The Influence of Ethnic Identity on Consumer Behaviour

WELCOMES YOU to

A CONVERSATION on how the rise in

ETHNIC IDENTITY is SHIFTING BEHAVIOR in the U.S. CONSUMER MARKET

CULTURAL OPENNESS:

A Metric for Tracking Increasing Multiculturalism

AGENDAKEY TAKEAWAYS

CULTURAL OPENNESS DEFINED

STUDY RESULTS

IMPLICATIONS

EXISTING EXAMPLES

KEY TAKEAWAYS

• The rise in ethnic identity in the Census shows the demographic reality, but there is an important attitudinal dimension that Marketers need to understand

– Influential consumers are changing their traditional views of racial and ethnic identity roles, and are seeking greater engagement in ethnic identities other than their own

• Understanding cultural openness within U.S. consumers provides marketers the possibility to be relevant deeply and broadly;

– By tapping into a cultural identity truth, it will resonant deeply with consumers of that cultural identity and has the strong potential to appeal broadly with certain consumers outside of that cultural identity.

– Finding a specific ethnic consumer “truth” that carries a universal truth is the marketing home run

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NEW MAINSTREAM VALUE PROPOSITIONS ARE EVERYWHERE

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KEY TAKEAWAYS

• With few exceptions, marketing infrastructure is not currently set up to understand or execute against ethnic identity’s rise in U.S. consumer attitudes

– McDonald’s has institutionalized it, General Mills, Pepsi, and Time Warner are moving in this direction

– New metrics/measures are needed– Cultural depth, especially ethnic identity depth is increasing in its

relevance in marketing

• Multicultural marketing doesn’t go away– In some cases, multicultural marketing becomes a leader in a more

holistic branding campaign– In most instances, multicultural marketing can be more

complementary in overall marketing effort

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A SOCIETY WITH MANY LARGE RACIAL/ETHNIC GROUPS IS NOT NECESSARILY A INTRACULTURAL SOCIETY

Between 2000 and 2010, 80% of all population growth came from Hispanics, African Americans

and Asians, which Hispanics representing 52% of that growth alone.*

*Source: Geoscape 20108

LARGE POPULATION SIZE CREATES IMPACT, NOT NECESSARILY INFLUENCE

A Jewish bread product with impact

A Jewish bread product with influence

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CULTURAL OPENNESS DEFINED

Cultural Openness is the degree to which the historic boundaries between ethnic and racial groups are perceived as being highly porous and easily crossed. Such porousness allows people to navigate without self-consciousness and social constraint within and across different cultural groups, absorbing the elements that work within their preferred lifestyle but not necessarily at the cost of pride and participation in their native culture.

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THE 5 MAIN STAGES OF CULTURAL OPENNESS

Intercultural influence is a source of concern, and people who are different are eyed with distrust.

Personally recognize and appreciate the benefits of intercultural influences in their own lives.

Actively pursue and immerse oneself in inter-cultural experiences and situations.

Organically and non-self consciously navigate within and across multiple cultural group boundaries.

Acknowledge and understand the benefits of intercultural influences within society.

1 2 3 4 5

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MULTICULTURAL MARKETING STUDY METHODOLOGY Respondent Recruitment Process:

• Phone-study participants were recruited using a random-digit-dial (RDD) sampling technique and were placed into their appropriate self-selected multicultural sample group, while web participants were recruited from select web panels.

• To achieve the full sample of African-American respondents, we used a geographically enhanced RDD sampling technique that targeted high-density African-American census tracts. The remaining Hispanic respondents were recruited via a Hispanic surname sample list.

Two-phase data collection process: • 20- to 30-minute telephone and Web interviews in respondent’s language of choice

• 60- to 75-minute survey that was self-administered and returned via mail or the Internet, also in their language of choice

The total numbers of participants ages 16+ who completed both phases of the study: • 1,620 African Americans

• 1,645 Hispanics

• 3,001 Non-Hispanic Whites

• The study includes 937 cell-phone only respondents.12

“I am uncomfortable with the changing ethnic makeup of this country.”

Total Agree: 45% (Gen Pop - 2008)

STAGE 1

“One of the best things about America is the cultural diversity you find here.”

Total Disagree: 20% (Gen Pop - 2010)

“I feel I must maintain some sort of allegiance to people with similar ethnic roots to my own because when things get bad, those are the only people you can count on.”

Total Agree: 32% (Gen Pop - 2005)

Intercultural influence is a source of concern, and people who are different are eyed with distrust.

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“Cultural diversity is necessary for progress in our society.”

Total Agree: 58% (US Gen Pop from Global Monitor - 2010)

77%83% 64%“I appreciate the growing influence of other cultures on many of the products we use.” HispanicsAfrican

AmericansNon-Hispanic

Whites

“I appreciate the influence that other cultures are having on the American way of life.”

77%78% 62%

HispanicsAfrican Americans

Non-Hispanic Whites

STAGE 2

Acknowledge and understand the benefits of intercultural influences within society

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“I know a Black person I consider a friend.”64%n/a 80%

HispanicsAfrican Americans

Non-Hispanic Whites

n/a58% 66%

“I know a Hispanic person I consider a friend.” HispanicsAfrican Americans

Non-Hispanic Whites

77%82% 69%“I have learned many new things from people whose race or ethnicity differs from my own.” HispanicsAfrican

AmericansNon-Hispanic

Whites

STAGE 3

Personally recognize and appreciate the benefits of intercultural influences in their own lives

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“Someone in your extended family is from a different race or ethnicity.”

30%47% 32%

HispanicsAfrican Americans

Non-Hispanic Whites

61%68% 48%“I am always looking for different cultural experiences and influences that will broaden my horizons.” HispanicsAfrican

AmericansNon-Hispanic

Whites

42%48% 34%“My taste in food, music, media and entertainment have changed as a result of having friends outside my race/ethnicity.” (among those with friends outside of their race/ethnicity)

HispanicsAfrican Americans

Non-Hispanic Whites

STAGE 4

Actively pursue and immerse oneself in inter-cultural experiences and situations

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37%27% 23%“I see myself as a citizen of the world more so than as a citizen of the United States.” HispanicsAfrican

AmericansNon-Hispanic

Whites

23%29% 14%“Someone in your immediate family is from a different race or ethnicity.” HispanicsAfrican

AmericansNon-Hispanic

Whites

“Less than half of my closest friends are of the same cultural or ethnic background as I am.” (MMS 2007)

36%34% 23%

HispanicsAfrican Americans

Non-Hispanic Whites

STAGE 5

Organically and non-self consciously navigate within and across multiple cultural group boundaries

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65K 64K 68KMean Income 69K 72K

YOUNGER, BUT NOT ONLY THE YOUNG

45 46 44Mean Age 41 40

Ethnicity IndicesNon-Hispanic WhitesHispanicsAfrican Americans

High High Low LowLow Avg High HighLow Low High High

Education Indices High School or LessSome CollegeCollege Graduate or more

Avg Avg Avg Avg LowAvg Avg Avg Avg AvgLow Low Avg Avg High

AvgAvgAvg

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“I feel a need to preserve my family’s cultural traditions.”

46% 58% 67% 78% 77%

THEIR HERITAGE OF ORIGIN REMAINS IMPORTANT AND VALUED

“Feel highly connected to my heritage.” (Top 3 box on an 11 point connected scale)

41% 47% 49% 58% 51%

“I would like to participate in more activities that celebrate my cultural heritage.”

60% 67% 72% 82% 79%

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Degree to which the following types of advertising persuade you to buy or try a new product: Ads that show people of my race or ethnicity (Top 3 box on a 7 point persuades me scale among Non-Hispanic Whites)

20% 16% 20% 25% 21%

I find that I often have a hard time relating to a brand’s spokesperson if that person is not of my race or ethnicity.” (Forced choice versus the opposite sentiment among Non-Hispanic Whites) 28% 16% 5% 6% 3%

Degree to which the following types of advertising persuade you to buy or try a new product: Ads that show the many different cultures and kinds of people in the US (Top 3 box on a 7 point persuades me scale among Non-Hispanic Whites)

13% 18% 26% 36% 34%

MORE RESPONSIVE TO INCLUSIVE VERSUS TARGETED ADVERTISING

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“African Americans are a good group to look to when you want to know about...” (among Non-Hispanic Whites)

How to rally people around a community issue

How to be spiritually fulfilled

New Music

7% 14% 17% 22% 28%

CONDUITS FOR NEW IDEAS AND CULTURAL INFLUENCES

“I am usually one of the first people in my group of friends to accept new ideas or try new things.”

35% 43% 53% 70% 72%

“I like taking the risk of being one of the first people to try a new product or service.”

30% 38% 41% 55% 57%

6% 9% 13% 18% 21%

5% 9% 12% 17% 15%

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GENERAL MARKETING IMPLICATIONS

• Consumers with high levels of cultural openness are less likely to be put off by marketing that is not specifically designed with their particular ethnic group’s sensibilities in mind or that references cultural touch points that are not a part of their culture or ethnicity of origin

• At this point in time, consumers with high levels of cultural openness are the conduit through which cross cultural influence flows from one ethnic consumer segment to another

• In order to assess accurately the pace and current status of the movement towards intraculturalism both in society at large and among their target consumers, marketers need to measure and track cultural openness or run the risk of prematurely abandoning (or holding on too long to) targeted ethnic outreach marketing strategies.

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PHASE 2 RESEARCH GOALS (INITIAL RESULTS EXPECTED MAY 2011)• Consumers with high levels of cultural openness are less likely to be put off by marketing that

is not specifically designed with their particular ethnic group’s sensibilities in mind or that references cultural touch points that are not a part of their culture or ethnicity of origin

• Officially size, benchmark and begin tracking the Cultural Openness stage segments by ethnicity within the US 16+ consumer population

• Produce richer stage profiles that include more depth of information around demo- and psycho-graphics as well as media habits, shopping behavior, and responsiveness to various marketing strategies

• Develop a cultural openness short form that clients can incorporate into their own custom research

• Build consulting platforms based on Cultural Openness that will help our clients enhance their:

o Marketing/Advertising Strategy

o Media Buying

o Brand Positioning

o Product Innovation

o Customer Service23

EXAMPLE:Kia Soul Michelle Wie

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EXAMPLE:DJ Hero Mix2Gether

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EXAMPLE:AT&T MOBILE

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PANEL DISCUSSION

Thank You.

FRANK COOPERSVP and Chief ConsumerEngagement Officer, PepsiCo

MICHELLE EBANKSPresident,Essence Communications

ROBERTO SUROProfessor of Journalism and Public Policy, Managing director of the Annenberg Innovation Lab, University of Southern California

DISTINGUISHED PANELISTS

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THANK YOU for participating and

CONTINUING the conversation…