UNDERSTANDING THE RURAL HISPANIC MARKET AND TARGETING THEIR TELECOMMUNICATION NEEDS WITH PROMOTIONS Deborah Lester, Kennesaw State University Dolly D. Loyd, University of Southern Mississippi ABSTRACT A telecommunications company located in rural north Georgia was endeavoring to develop a positioning and promotional strategy specifically designed to target the rapidly growing Hispanic population in their target market area. As part of the process, a research study was conducted targeting rural Hispanic residents. An analysis of their responses provided the basis for a promotional strategy. INTRODUCTION A telecommunications company located in rural north Georgia (referred to as GTC in this paper), was endeavoring to develop a positioning and promotional strategy specifically designed to target the rapidly growing Hispanic population in their target market area. As part of the process, GTC took steps to fully evaluate and understand the prospective target market. Historically, many cultural differences, as well as a language barrier, had made serving this population difficult. Also, the local business community had perceived the monetary impact of the Hispanic immigrants to be insignificant. Multi-cultural marketing within the rural community was non-existent; however, the recent significant increase in the immigrant population had dramatically impacted their influence and necessitated the development of innovative marketing strategies that could be applied to the rural Hispanic market. This research was designed to evaluate the rural Hispanic market and to determine specific service requirements and product opportunities for the rural Hispanic community. Additionally, it was designed to assess the different avenues of media used by rural Hispanic populations in order to be able to efficiently and effectively advertise to this segment. Information that is timely and accurate is the lifeblood of decision- making. To increase the company's customer base, develop an effective marketing strategy, and efficiently use company resources, this research project was developed and completed. The information generated from this activity provided quantitative, verifiable facts for informed, comprehensive decisions regarding the Hispanic market in rural north Georgia. OBJECTIVES The objectives of the project were:· To identify the telecommunication needs of the current and potential rural Hispanic market that GTC serves. • •
To identify unique aspects of the rural Hispanic market's buyer behavior. To develop a promotional strategy for GTC to effectively reach and communicate with the rural Hispanic market.
RESEARCH Secondary data was used to gain a thorough understanding of the Hispanic market and its needs. Information was obtained through a variety of sources that included PRIZM, Internet, government documents, and conferences. As the 90's came to a close and the new millennium began, Hispanics were projected to become the largest minority group in the U.S. (Exter, p.32). By the year 2010, 39 million people or 12.9% of the U.S. population would be Hispanic. Very recently the U.S. Census Bureau has updated their projection and predicted that Hispanics will replace African Americans as the nations largest minority group within five years (Bixler 2000). People who are called Hispanic can, in reality, be of any Latino race. The 1991 census revealed that 91% were white, 5% were black, 2% were Asian, and 1% native American.(Exter,p32) The uniting factor of the Hispanic market is the Spanish language. (Cispell) This is also the impetus for single target marketing instead of segmenting into the various cultural, religious, and linguistic differences. Most successful Hispanic marketing is predicated on an awareness that it is sometimes better to segment and sometimes the market should be targeted as a whole.(Braus) The primary countries of origin of the Hispanics in this target market are Mexico, Puerto Rico, and Cuba. Threefourths of the total U.S. Hispanic population comes from these three countries. Most of these immigrants have settled into America's largest cities, except Mexicans. Mexican immigrants reside in both large and small cities, as well as in rural areas.(Braus) No matter what country they may have originated from, most Hispanic immigrants "quickly acquire two basic American tools: a car and a telephone".(Braus,p. 19) Very little to no information is available on the many smaller Hispanic subgroups. A language barrier exists and this creates a difficulty in reaching them. "But rapid growth will inevitably lead more businesses to target the diverse Hispanic markets."(Braus,p. 17) According to the 1998 study of the Hispanic market by the U.S. Census Bureau, growth rates for Georgia have increased 84.8%. The purpose of generating a Compass geo- demographic data base report was to highlight the composition of the four counties that comprise the, geographical market. In this case, the target market is Hispanic Americans that live in the following rural north Georgia counties: Gilmer, Pickens, Fannin, and Union. The findings from the reports are date from the year 1997. It should also be noted that these figures reflect the composition of the legal residences of these counties. Unfortunately a problem exists in that large portions of the Hispanic population in this area are considered to be illegal aliens. In an effort to single out the Hispanic population, whether legal or illegal, the report chiefly focuses on the number of persons within each household in each county, their past financial behavior, ancestry, and length of residence. Reviewing past financial behavior resulted in the emergence of two distinct behavior characteristics of Hispanic emigrants. Hispanics respond positively to direct mail, and Hispanics tend to keep in touch with their families in their native countries, thus the high usage rate of money orders and long distance phone service. The consumption of these three items: direct mail correspondence, long distance service, and money order purchases, is consistently high among the Hispanics living in the four counties. The data generated by Compass leads to the conclusion that a large proportion of the target market is concentrated in Pickens and Gilmer counties. The target market tends to live in a single residence for an average of 12.9 years. Gilmer and Pickens counties contain the largest number of households with 5+ persons. Residences of these counties are very interested in direct mail and are likely to pay with money orders. Finally, there are a modest percentage of households with a long distance bill of $26+. Based on company data, the majority of the Hispanic population in rural north Georgia is from Mexico and Guatemala. Spanish is the national language in both Mexico and Guatemala although it consists of two dialects, Guatemalan-Spanish and Mexican Spanish. These two dialects are different in nature, and may be a source of animosity between these two groups.
Soccer is the number one sport in Guatemala. American sports such as baseball, basketball, and football, are slowly closing the gap and increasing in popularity. Hispanics allocate about 75% of their income to housing, food, transportation, and clothing. They also spend 13% of their income on personal insurance, pensions, and health and personal care. Finally, 11% is spent on entertainment, alcohol, tobacco, and educational materials. Hispanics spend about the same or more than non- Hispanics in eight key areas: home foods, apparel, telephone services, rental housing, TV/radio and similar equipment, personal care products, public transportation, and cleaning supplies. Sixty-four percent of U.S. Hispanics believe that nationally advertised brands are the best products for their family. Sixty-two percent will still be using the same brand product one year from now. The majority of Hispanics (64%) try to support companies that support Hispanic events. Hispanic consumers view direct marketing as a more comfortable alternative to traditional, inperson shopping situations. Forty-two percent order by mail to avoid the pressures of shopping in a store. However, this type of direct marketing is being under-utilized by marketers. Only about forty-four percent of the total Hispanic population uses direct marketing to purchase products and services. Primary Primary research was conducted to gather relevant, specific data that secondary information was unable to ascertain. A survey was developed targeting the rural Hispanic community in north Georgia. The survey contained twenty-four questions covering eighty-three (83) items and was designed to provide further insights into the specific rural Hispanic community served by GTC. Both English and Spanish language versions of the questionnaire were used. The translation of the Spanish version was pre- tested and revised to better reflect the dialect and culture of the community surveyed. Determining the Hispanic community's needs and the best ways to communicate with them were the primary objectives of the research. Over 119 questionnaires were distributed with a resultant sample size of 82 respondents. It should be noted that a local Hispanic community member assisted with the distribution and collection of the surveys. This individual helped to resolve the interpretation problems while also providing reassurance and establishing trust with respondents. Results The percentage of those respondents who attend church was the highest overall response category in comparison with all other activities. Sixty-five or 79.3% of respondents go to church. The second largest activity engaged in by the respondents was frequenting restaurants. Forty-five or 54.9% of respondents like to eat in restaurants. Twentysix or 31.75% of respondents take part in cookouts, and sixteen or 19.5% of the respondents enjoy playing soccer. When asked how much time they spend listening to the radio daily, 51.5% indicated that they did so for one to two hours. The primary radio stations listened to were the Atlanta Spanish stations with 25%, and the Dalton station with 15.6% of the respondents. When asked if they read newspapers or magazines, most answered yes. Forty-six or 64.8% of respondents stated that they read either the newspaper or magazines. If the respondents surveyed responded, "yes" that they did read newspapers or magazines, they were to state which ones they read. The most popular reading material for the respondents was the National Spanish newspaper at 33.3%. Second was the local newspaper with 19%, and third was the local Spanish newspaper with 14.3% of respondents.
The amount of television watched daily was highest at one to two hours with 56.5%.
If they answered that they did watch television, then they were asked to list which stations. The highest rated station was Univision with 36.4%, basic cable with 23.6%, and music videos at 9. 1%.
When the respondents surveyed were asked to identify their music preferences, the most popular music listened to was country, Thirty individuals or 36.6% of respondents listen to country music. Second was Christian music at 24.4% of the respondents, with Latin music at 20.7%. Most Hispanic respondents were originally from Mexico (52%), while 39% were from Guatemala, and almost 5% from Puerto Rico. Two respondents were from Peru and one respondent was from El Salvador. When asked to identify the stores where they shop, Wal-Mart was indicated overwhelmingly as the most popular store. Of the eighty-two respondents, 97% selected this store as the one they visited the most. The second selection was Food Lion with almost 80%, then came the convenience store at 36%, the pharmacy at 35%, shoe stores with 20%, hardware store at 22%, and Cub Foods was last with a little under 4%.
When the respondents were asked how important a Spanish-speaking operator would be to them, almost 92% said that it would be very important.
Respondents were asked to identify the communication services they would be interested in. Over 40% wanted Western Union services, 37% wanted Caller I.D., over 29% were interested in Call Waiting, 24% in calling cards, and less than 4% were interested in pagers.
Questions to determine how often they engage in long-distance communications with their families resulted in a respondent rate of 40% who communicate monthly, 28% weekly, 4% twice a month, 4% daily, and only 5% who do so once a year.
When participants were asked to identify what communication services they currently use, basic phone service was used by 39%, a pager service was used by a little over 7%, and prepaid calling cards were used by 29%. Call Waiting was used the most by almost 55% of the respondents, Caller I.D. was used by 13%, and only 9% used Western Union. The research showed the north Georgia Hispanic community to be widely diverse in terms of the activities they enjoy and the products and services that appeal to them. However, even among a population as varied as this is, certain themes consistently appear in the respondents' answers. The Hispanic community is a religiously devout group with nearly all respondents attending church regularly. The respondents surveyed overwhelmingly said that they prefer to watch Spanish language media. Similarly, nearly all said that a Spanish-speaking telephone representative would be very important to their overall satisfaction with GTC.
RECOMMENDATIONS As a result of the information generated by the survey, it is recommended that GTC: • • • •
Change phone card companies. Selection should be based on the company's ability to provide the cards in Spanish, with free promotional material targeting Hispanics. Increase distribution of the cards. Make the phone cards available at all appropriate locations (Wal-Mart, Food Lion, GTC.) Develop an on-site promotional display designed to create visibility, interest, and self-service. View the Western Union service as a profit center. This can be accomplished by understanding cost allocations. The cost of Western Union services is dramatically less than current accounting practices have identified since all of the labor costs cannot realistically be attributed to servicing Western Union customers. Train current staff on how to properly utilize Western Union services will accelerate the transaction time. Western Union will provide the training and the company estimates five minutes as the normal processing time per customer. Hire a Hispanic customer service representative to act as an interpreter who will better service this customer segment. This individual will greatly speed transaction time and will make the Hispanic customers feel more comfortable and welcome. Obtain free P-O-P material from the Western Union Company in Spanish, and display that material in the customer service area. Develop and execute a promotional plan that is targeted specifically toward the Hispanic market. Our research clearly indicates this is a viable market segment that not only warrants individualized attention but that it also has tacitly requested it. Media messages should reflect the values that this segment holds in the highest regard. Values such as family, purchase quality, and product reliability have proven to be a common thread running through the body of our research. Creating a link between these values and the telecommunication company offers the greatest prospect for successfully reaching this market segment.
CONCLUSIONS This market research, coupled with interviews of GTC personnel, have led to the following conclusions: •
Prepaid phone cards are currently not being marketed successfully. Their distribution needs to be increased to make the cards more available to this market segment. Additionally, an appraisal of the cur-rent card provider needs to be undertaken. It is felt that a competing supplier, Worldlink, offers a product that can be marketed more effectively to this audience. Moreover, Worldlink offers a greater array of Spanish language point of purchase material.
The Western Union Service offered by GTC should be viewed as a profit center. Historically, GTC personnel have frowned on the Western Union service. They have been quick to assert that Western Union transactions are a timeconsuming process that is not cost effective. Our research indicates that this is fundamentally untrue. All the labor costs that occur in this office cannot realistically be attributed to the servicing of Western Union customers. Additionally, the hiring of a Spanish- speaking customer service agent will greatly reduce the transaction time. This will also make great strides in displaying goodwill toward this market segment.
GTC should develop and execute a promotional plan that is targeted specifically at the local Hispanic community. Research clearly indicates that this is a viable and as yet largely untapped market segment. Media messages should reflect the values that this segment holds in the highest regard. Values such as family, purchase quality, and product reliability have proven a common thread running through the body of our research. Creating a link between thee values and GTC offers the greatest prospect for successfully reaching this market segment.
An analysis of the preceding research and recommendations have resulted in the following promotional plan: Indoor/Outdoor Media Campaign •
An ad has been created which is suitable for display in both print and outdoor formats. The ad consists of an outline of the country of Mexico and the state of Georgia. Cropped into each outline are pictures of people. Appearing in the outline of Mexico is a grandmother figure smiling as she holds a telephone. In the outline of Georgia appears a small girl flanked by her parents. The girl is speaking into a telephone with much animation as her parents look on gleefully. Spanning the distance between the two regions is the GTC logo. Appearing beneath the logo is the tag line, "Uniendo La Familia", (Uniting the family).
Radio Campaign •
A radio campaign consisting of fifteen- second spots has been developed. It is recommended that the spots be played on WLJA 93.5FM and 1560 AM. The cost of running these spots fifteen times per week is $150.00 per week.
Direct Mail •
A direct mailer has been developed with the objective of acquainting the Hispanic market not only with GTC but also with its various products and services. A mailing list consisting of over 200 names has been obtained to serve as the first phase for the implementation of this strategy.
Sales Promotion •
In order for GTC to effectively market to the local Hispanic community, they must first - am their trust. Implementing appropriate elements of sales promotion will go a long way toward the successful accomplishment of this goal. The following is a list of potential sales promotion opportunities that GTC may wish to consider.
1. Partnerships with local Hispanic churches.
2. Providing an on-site Spanish- speaking customer service agent during the Grand Reopening of GTC's new headquarters.
3. Hosting a "Family to Family" day for local Hispanic residents. Projected cost: $950.00
4. Sponsorship of the annual Health Fair. Projected cost: $500.00
REFERENCES Bixler, Mark (2000), "Hispanics Forecast to Outnumber Blacks," Atlanta Journal Constitution, (January 13), Al. Braus, Patricia (1995), "What Does 'Hispanic' Mean?" American Demographics, p. 8. Exter, Thomas G. (1995), "The Largest Minority", American Demographics, p. 32. Cispell, Diane, (1995), "Hispanics May be of Any Race", American Demographics, p. 1. Draft Direct News (1998), http://www.draftdirect.com. El Hispanic News. Statistics, (1998), http://hispnews.com/statistics/html. Mayan Traditions, (1998), http://www.youthbb.org/gtraditionas.html. Our People, (1998), http://www.guetzalnet.com/quetzalNET/OurPeople-real.html. Guatemala's Festivals, (1998), http://www.vacationstation.com/samerica/guatemala festivals.html. Hispanic Call Center. Hispanic Affluence: Hispanic Market Report, (1998), http://www.hispaniccallcenter.com/affluent. html. Soccernet, (1998), http://www.soccernet.com/u/soccer/worldcup98/temas/mexico.html. Summer Institute of Linguistics. Ethnologue, (1998), http://www.sil.org/ethnologue/countries/guat.html. Summer Institute of Linguistics. Ethnologue, (1998), http://www.sil.org/ethnologue/countries/mex.html.