This is free marketing research on the Hispanics market and can include information on the background, market structure, definitions, competitors, trends and developments of the Hispanics market and is related to other topics such as Latino and ethnic.

Table of Contents

[edit] Definition

Latino" or "Hispanic", as a description, refers to an origin or ethnicity, not a race. Spanish language stands as a symbol of difference for U.S. Hispanics. Irrespective of where they are from and regardless of their history, Spanish is the unifying key to their individual and collective pasts. The terms Hispanic and Latino are used interchangeably; they do not have different connotations.

[edit] Background

The single most important segmentation factor among U.S. Hispanics may be their country of origin. The U.S. Hispanic market is comprised of subcultures from over 20 countries in Central and South America, the Caribbean and Spain, with the majority (63%) of Mexican heritage. The culture, beliefs, opinions and consumer behavior patterns of U.S. Hispanics are not identical, due to the influence of differences in their native countries' geography, indigenous ancestry and colonial origins.

Mexico             -     63%
Puerto Rico        -     10%
Cuba               -      4%
Dominican Republic -      3%
El Salvador        -      3%

[edit] Market Structure

The Hispanic/Latino market is often divided by levels of acculturation: mostly acculturated or U.S. dominant; partially acculturated (also called “assimilated” or bicultural); or relatively isolated

Acculturated          -  59%
Bicultural            -  23%
Relatively Isolated   -  22%

Language use varies widely among Hispanics/Latinos according to whether they are at home or work. The longer Hispanics/Latinos have lived in the United States, the more likely they are to speak English primarily.

[edit] Market Metrics

Hispanic market is a rapidly growing market and loyal to companies that understand the Hispanic consumer and provide relevant quality products and services. By the year 2020 the Hispanic population is projected to reach 53 million, with buying power projected to surpass the $1 trillion mark by the year 2010. By 2010, nearly one person out of every six living in the U.S. will be of Hispanic origin.

Hispanics are the largest minority in the United States, with an estimated population of 41.3 million. They are estimated to grow by more than 1.7 million a year. Hispanics accounted for 40 percent of the country¹s population growth between 1990 and 2000. More than one eight of the people in the United States are of Hispanic origin. From 2000 to 2004, the Hispanic population increased 14 percent while the non-Hispanic population increased just 2 percent during this same time period. States with the fastest-growing Hispanic populations are: Nevada, Washington, Oregon, Massachusetts, Virginia, North Carolina and Florida.

The median age for Hispanics is 27.2 years (9.2 years younger than the median age for the United States as a whole.)

It is estimated than one in five teens in the United States is Hispanic. And, by 2020, the Hispanic teen population is expected to grow 62%, compared to a 10% growth rate for all teens. Hispanic youth account for more than 34 percent of the total U.S. Hispanic population and more than 18 percent of the total U.S. youth population. By 2020, Hispanic youth will make up 23 percent of all U.S. youth.

[edit] Consumer Behavior

Purchasing power Current Hispanic purchasing power is 8.5% of total U.S. purchasing power, but will reach 11% by 2010, when taking into account factors such as the narrowing Hispanic vs. overall U.S. income gap and the increase in the number of Hispanic households with earned income. Hispanic buying power is expected to climb to $992 billion by 2009 from $686.6 billion in 2004 and is projected to reach $1 trillion by 2010, nearly three times the overall national rate of consumer purchasing power over the past decade.

Income The economic well-being of Hispanics is improving at a faster rate than that of non-Hispanics. Aggregate personal, household, and family income of the Hispanic population increased at more than twice the rate of those of the non-Hispanic populations. For examples, while aggregate household income tripled for non-Hispanics, it increased more than six-fold for Hispanics between 1981 and 2001. The median income of Hispanic households rose by 20% from $27,977 to $33,565.between 1996 and 2001 while the median for all households increased by 6%. The number of prosperous Hispanic households those with incomes of at least $100,000 rose 137 percent between 1990 and 2000. In 2002, the ten states with the largest Hispanic markets by spending power were: California, Texas, Florida, New York, Illinois, New Jersey, Arizona, Colorado, Georgia and New Mexico. The net worth of U.S. Hispanics surpassed $534 billion in 2000 which is a 30 percent increase since 1998.

Buying habits More than a quarter of Hispanics (27%) identify themselves as "distance buyers" who purchase items from catalogs, telemarketing calls and online. Four in 10 Hispanic buyers (41%) prefer mailings in English, while 32% prefer Spanish.

Of all ethnic groups, Hispanics frequent the mall the most (10.1 times per three-week period) and stay the longest (91.5 minutes). Sales of mainstream Mexican and authentic Hispanic convenience foods - such as entrees and hand-held items - have more than doubled, rising 103% in the past five years, to $505 million in 2004 from $250 million in 1999. Hispanics are 33 percent more likely to buy toys than non-Hispanics.

Hispanic magazines took in $182 million in advertising revenue in 2004, an increase of 16.8 percent from the year before, and higher than the 11.1 percent increase for the general magazine market.

Top 5 Magazine Categories among Hispanic Readers
1 	Women’s
2 	General Editorial
3 	News and Entertainment Weeklies
4 	Men’s
5 	Home Service

Top 10 Titles Read by Hispanics/Latinos
1 People 
2 People en Español 
3 National Geographic 
4 Cosmopolitan 
5 Sports Illustrated 
6 Latina 
7 Better Homes & Gardens 
8 Selecciones 
9 Maxim 
10 Reader’s Digest

Source: MRI Fall 2006

Roughly half (51%) of U.S. Hispanic households are involved in hobbies and crafts, spending an estimated $1.9 billion annually. The most frequent activities are Art/Drawing and Floral Arranging. Hispanic women shop less frequently than other multicultural women and select stores for their convenience rather than price. They are more likely to shop with family members and are least likely to shop alone. They enjoy shopping with children much more than other women. Number of Hispanic homeowners grew 56.6% between 1994 and 2002, the number of non-Hispanic homeowners increased by only 14.7%.

Business and Entrepreneurship

The number of Hispanic-owned businesses in the U.S. is expected to grow 55% in the next six years to 3.2 million, with total revenues expected to increase 70% to more than $465 billion. Hispanics (15.2%) are more likely than non-Hispanic Whites (10.8%) to be entrepreneurs. There are approximately 2 million Hispanic-owned businesses in the country that generate almost $300 billion in annual gross receipts. By 2010, there will be 3.2 million Hispanic firms generating $465 billion. The number of Hispanic-owned companies grew 82 percent since 1997, making them among the fastest-growing business segments in the nation.

Some 79 percent of Latino teenagers want to start their own businesses compared with 69 percent of non-Hispanic white teenagers.

1 out of every 10 small businesses will be Hispanic by the year 2007. Hispanics account for over 13 percent of the documented U.S. labor force and are expected to increase to 20 percent by 2030. Hispanic employment has grown more than 16 percent since 2000, while overall U.S. employment has barely grown 2 percent.

Hispanic women owned businesses

Between 1997 and 2004, the number of firms owned by Hispanic women increased by nearly 64 percent, to 553,618, and their combined revenue climbed by more than 62 percent, to $44.4 billion. Hispanic women-owned Businesses number 553,618, employ 320,000 and generate $44.4 billion in sales nationwide. More than one-third (34.9%) of all Hispanic owned firms are owned by women. Hispanic women-owned firms employ 18.5% of the workers in all Hispanic-owned firms and generate 16.3% of the sales. (Source: Center for Business Women¹s Business Research, November 2004.)

Education

80 percent of Latino college freshman are enrolled in just seven states: California, New York, Arizona, New Jersey, Florida, Texas and Illinois. Latino college enrollment in four-year colleges increased 29 percent from 1996 to 2001 (and 14 percent at 2-year colleges) and overall college enrollment was up 24 percent (Source: Pew Hispanic Center). From 1970 to 2000, the share of U.S.-born Latinos aged 18 or 19 with a high school diploma increased from 40 to 60 percent. (Source: Hispanic Trends).

International

Of the 41 million-plus Hispanics living in the United States, almost half have family living in Latin American countries. Latinos working and living in the United States send over $30 billion annually in remittance to family in Latin American countries. Mexico alone receives over 15 billion a year in remittance from the United States. These remittance dollars make up Mexico’s largest industry. Imports from Mexico in 2004 totaled over $155.8 billion, up from 138 billion in 2003. Exports from the United States to Mexico in 2004 totaled over $110.7 billion, up from $97.4 billion in 2003 (Source: International Trade Administration).

[edit] Recent Trends and Developments

Hispanic/Latino Market Opportunities are immense due to:  Size, growth and spending power of Hispanic market  More younger people than the U.S. population—particularly strong teen market  Urban population concentrations allow relatively easy geographic targeting  Bound by common language (Spanish) and/or common immigrant experiences

Internal dynamics of the population indicate that over time, the U.S. Hispanic market will lose its immigrant character and integrate with the mainstream culture. The main reason behind this qualitative change is the growth of second- and third-generation Hispanic segments. There are basic differences between Latinos and other consumers which will be tackled through culture- and language-specific marketing. With more Hispanic start-ups entering the pipeline, more mature Hispanic firms will reach the institutional middle market, defined as companies with revenues between $5 million and $50 million. As more Hispanic firms enter the middle market, banks, business services, and government development programs will cater to larger firms in addition to start-ups. Hispanic entrepreneurs will compete in a tightly integrated global economy where their cultural heritage will function as a key advantage. The expanding affluence of the Hispanic middle class and the growing influence of Hispanic entrepreneurs and professionals will have profound impact on the national U.S. economy and political system. Hispanic culture will keep on influencing other segments of the population with greater frequency and impact especially among urban and inner-city youth. Hispanic market has a higher-than-average brand loyalty compared to non-Hispanics. A 2002 survey by Research Data Design showed that 85 percent are willing to pay more for quality and prefer to buy a more expensive but trusted brand rather than a less expensive but unfamiliar one. And 94 percent are likely to buy a brand that provides the best customer service. Hispanic loyalty and relationship building tactics require a substantial emphasis on the delivery of quality customer support in Spanish. Hispanic consumers are strong brand advocates and influential with other potential customers. Positive word-of-mouth is common practice, as six in ten of Hispanics with a positive customer service experience tell an average of seven family members and friends. Communication and advertising in Spanish is important, as it represents a matter of cultural identity and pride. Advertisers who use Spanish-language advertising and media, including Web sites, build customer loyalty because they're perceived as understanding and relating.

[edit] Sources

• United States Hispanic Chamber of Commerce
• U.S.Census Bureau
• International Trade Administration
• HispanSource.org
• HispanicBusiness.com

[edit] Next Steps

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