[Seri column]Make inroads in U.S. minority marketTwo candidates command attention in the run-up to the 2008 U.S. presidential election: Senator Barack Obama from Illinois and New Mexico Governor Bill Richardson, both from the Democratic Party.
If elected, Obama would be the first African-American elected to the White House and Richardson would be the first Hispanic. They would be at the apex of a swelling number of non-whites winning elections at all levels of the U.S. government. In the Bush cabinet, Commerce Secretary Carlos Gutierrez is Latino, Secretary of State Condoleezza Rice is African-American and Labor Secretary Elaine Chao is Asian-American. A growing number of minorities are serving as senators and congressmen, governors and mayors.
Hispanics, African-Ameri-cans and Asian-Americans comprise 28 percent of the U.S. electorate and the percentage will likely grow steadily, given the higher birth rates of minorities compared to white Americans, and a steady flow of immigrants from Asian and Latin American countries. In projections for 2050, minorities are expected to account for almost 60 percent of the total U.S. population. Hispanics are expected to constitute 25 percent; Asian-Americans will account for 17 percent; and African-Ameri-cans, 15 percent.
Political power obviously means a greater voice in policymaking, which affects businesses, both foreign and domestic. This should be recognized by Korean companies dealing in the U.S. environment.
On a more personal level, the impact of U.S. minorities is even more important. Along with their expanding political power, U.S. minorities also are increasing their influence on the economy. As their numbers grow, minority groups have taken an increasing share of the nation’s income. The annual minority buying report released by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business noted that the buying power of the Hispanic community stood at $861.8 billion in 2007, followed by African-Americans, $845.4 billion and Asian-Americans, $57.1 billion.
The Selig Center further noted that between 2007 and 2012, Latino buying power will increase by 46.32 percent, African-American buying power will rise by 34.2 percent and Asian- American buying power by 45.9 percent. White buying power will grow 28.2 percent in that period. This suggests that minorities collectively will soon become the major consumers in the United States, accounting for two-thirds of the nation’s gross domestic product, which is heavily tilted toward the service sector and consumption.
The U.S. minority market is particularly important to Korean companies as they redouble their efforts to export to the United States after a recent slowdown. If the pending Korea-U.S. free trade agreement is ratified, exporters will have greater opportunities to sell to U.S. minority groups.
A few enterprising Korean companies are pioneering this promising market. Nong Shim, Korea’s largest instant noodle and snack manufacturer, for example, has marketed Korean ramen to minority groups by participating in events such as Expo Comida Latina, the largest Hispanic food and beverage event in the United States. However, most Korean companies are not yet sufficiently aware of the promising opportunities involved in serving this market. Many are prone to stereotypical views that minority groups are not part of the mainstream U.S. market and thus not worth the commitment of marketing resources. In fact, these groups are already the growth engines of the world’s largest economy and are some of the main economic actors in the country.
Hispanics are the largest U.S. minority group. In two of the largest states ― California and Texas ― as well as New Mexico, they constitute 30 percent or more of the population. It is hard to ignore nearly one-third of the potential consumers in a market like California, which does as much exporting and importing as individual nations.
In the short term, companies need to recognize the fact that the average disposable income of African-Americans and Hispanics still trails that of whites and Asian-Americans by a wide margin, and adjust their marketing and pricing strategy accordingly. But in the long term, more and more U.S. minorities will enter the middle class. So now is the time to make inroads in establishing brand recognition. Keeping in mind that the minority communities are a market with diverse values and lifestyles, it would also be appropriate to take a segmented rather than a mass marketing approach ― selecting target customers and pursuing product and communication strategies that meet their needs.
*The writer is a research fellow at Samsung Economic Research Institute. Inquiries on this article should be addressed to email@example.com.
by Kim Hwa-nyeon