Minority Target Markets, Research Paper Example

Introduction

Due to the increasing numbers of minorities in today’s United States, the major consumer markets have shifted from white Americans to Hispanics, African Americans, and Asian Americans, due in part to the rising incomes of these three groups and their unprecedented influence in American society. According to the most recent data, it is estimated that by 2030, white Americans will become the minority in the U.S. with Hispanics, African Americans, and Asians becoming the majority. Thus, American companies and corporations that furnish goods, products, and services on the open market are rapidly seizing the opportunity to appeal to these three groups or target markets as major U.S. consumers.

Target Market 1: African Americans

According to a 2012 report by the Nielsen Company, there are about 43 million African Americans in the U.S. or about 14% of the total population. As of 2000, the overall population of the U.S. only increased by 11.3%, while the “black population increased by 17.9%, a rate that is 1.6 times greater” than the overall rate in U.S. growth (“African-American Consumers: Still Vital, Still Growing,” 4). As to household size, 64% of African American households have family members related either by birth or marriage; also, an African American household is “127% more likely to include a single parent, most often a woman.” These families are also mostly intergenerational with “almost 50% of grandparents living with their grandchildren” in the same house (“African-American Consumers: Still Vital, Still Growing,” 4). Age-wise, the overall African American population is “14% younger than the American population as a whole” with the median age being about thirty-two. Nor surprisingly, more than 50% of African Americans are under the age of thirty-five. Also, the percentage with degrees from an American university is about 20% of the total black population (“African-American Consumers: Still Vital, Still Growing,” 5).

The median income level stands at $47,290 per household with 35% earning $50,000 annually or more. Geographically, most African Americans are concentrated in the South, the Southeast, and the Midwest. Some surveys have shown that blacks “continue to migrate to the southern regions of the country” to settle in cities like Atlanta, Georgia, and states like North and South Carolina (“African-American Consumers: Still Vital, Still Growing,” 5). As to the brands that are purchased by African Americans that are higher than average, these include ethnic health and beauty aids, toiletries, unprepared meats, and flavored wine coolers. Some of the specific products includes Proctor & Gamble health and beauty items and Seagrams Wine Coolers. As to the best media to use to target African Americans, a large majority of adults watch more television that their white counterparts, therefore making TV the best media source to attract black consumers (“African-American Consumers: Still Vital, Still Growing,” 20).

Target Market 2: Asian Americans

Another 2012 report by the Nielsen Company reveals that the Asian American population in the U.S. is about 18 million and is “expected to reach almost 21 million in the next five years” (“State of the Asian American Consumer: Growing Market, Growing Impact,” 2). This figures to about 12% of the total U.S. population. Since 2000, there has been a 51% increase in Asian American populations and is now “experiencing the highest growth rate of any multicultural segment, slighting outpacing Hispanics” (“State of the Asian American Consumer: Growing Market, Growing Impact,” 2). The average household size stands at about three with the average age being in the early to mid 40’s. As to education, “50% of Asian Americans 25 years or older have a Bachelor’s degree, compared to 28%” of the total U.S. population. Thus, the median income for Asian Americans tends to be higher than for African Americans–about $63,420 annually (“State of the Asian American Consumer: Growing Market, Growing Impact,” 4).

Most Asian Americans live in Los Angeles, New York City, and San Francisco, but one-third of all U.S. states have Asian populations greater than 225,000. In these cities, Asian Americans tend to purchase higher than average food products like fruit, vegetables, meat, and grain. Some of their most favorite brands includes imported vegetables from China, and Gerber’s Baby Food. Some of the above average products includes vegetables from Asian markets and fresh produce from Asian-owned businesses Thus, like their black counterparts, Asian Americans spend a good deal of time watching TV but also use the Internet more frequently, thereby making these media sources the best to use to target Asian American consumers (“State of the Asian American Consumer: Growing Market, Growing Impact,” 6-12).

Target Market 3: Hispanic Americans

As of 2003, the total Hispanic population in the U.S. stood at about 10 million or 12%, but today in 2013, the number has exceeded 15 million. According to Geoffrey D. Paulin, the Hispanic population “experienced its largest increase between 1995 and 2000 when it increased” almost one and a half percent. Thus, Hispanics account for a large portion of consumer spending with “more than 6% in 1995, 7% in 2000” and now about 10%. Their rate of growth is also substantial which in 2000 stood at about 11% and now exceed 15%. The average household size stands at about four with almost 20% having a retired person or a grandparent living in same house. As of 2003, the average age was about 40 years old, but with the huge increase in births over the last ten years, the age now stands at about 23 years old. However, unlike Asian Americans, only about 15% possess a university degree (“A Changing Market: Expenditures by Hispanic Consumers, Revisited,” 12-14). Also, like African Americans, the median income stands at about $48,000 annually. Most Hispanics live in California, Texas, and other areas of the U.S. Southwest; however, an expanding number now live in the Midwest, the Southeast, and the South (“A Changing Market: Expenditures by Hispanic Consumers, Revisited,” 14-16).

Some of the brands that are higher than average includes Marlboro cigarettes, Budweiser beer, and Jose Cuervo tequila. Some of the above average products includes vegetables from Mexico and other food items found in Mexican specialty retail stores. As Paulin points out, expenditures for food “away from home” (i.e., fast food) is “higher than average and stands at about 25% of all Hispanic families in the U.S. (“A Changing Market: Expenditures by Hispanic Consumers, Revisited,” 18).

Business Potential:

One specific American corporation stands to gain the most related to business potential and the growing number of African American, Asian American, and Hispanic consumer groups–Proctor and Gamble, one of the largest producers of personal health and beauty products in the U.S. and globally. All three of these consumer groups purchase an above average number of health and beauty products, due to their expanding populations, cultures, and lifestyles.

For example, most Hispanics and African Americans adhere to brand loyalty like products made by Proctor & Gamble, especially related to hair care and health and beauty products with hair dye ranking at the top. Another Nielsen Company report for 2012 reveals that “brand buying is 43% higher” for Hispanics and blacks as compared to the total U.S. market. With hair care products, Hispanics spend $55 for brand products as compared to only $7 for generic or non-brand products (“State of the Hispanic Consumer: The Hispanic Market Imperative,” 13).

Bibliography

African-American Consumers: Still Vital, Still Growing. Web. 2012. 26 June 2013.

Paulin, Geoffrey D. “A Changing Market: Expenditures by Hispanic Consumers, Revisited.” Monthly Labor Review (August 2003): 12-35.

State of the Asian American Consumer: Growing Market, Growing Impact. 2012. Web.26 June 2013.

State of the Hispanic Consumer: The Hispanic Market Imperative. Web. 2012. June 27, 2013.