Reaching Asian-Americans

Are Asian-Americans a valuable demographic segment to target?

Absolutely, says Ronnie Fok, executive vp of A Partnership, Inc., a New York City-based advertising agency. Fok provided a comprehensive look at the segment at the annual ethnic marketing roundtable held at Wake Forest University’s Babcock School of Business, where marketing to Asians was a key focus for the first time this year. “Asian-Americans are rapidly moving up the growth curve,” says adjunct professor Sandra Miller Jones, who led the roundtable.

“Although relatively smaller in absolute size, the affluent Asian market offers tremendous opportunity,” says Fok.

Asians, who represent only 3.6 percent of the U.S. population, have the highest median family income of all groups. Census data puts the figure at $51,200, more than $10,000 above the average U.S. household. Fok’s agency predicts that the Asian population, now at 10.3 million, will reach 40 million by the year 2050.

Targeting may seem daunting, however, because Asian-Americans have different countries of origin and different languages. And is it effective to target just the main geographic regions in which they live?

Asian-Americans come from many different countries, but six of those represent 79 percent of the U.S. population: China (21%), the Philippines (18%), India (11%), Vietnam and Korea (10%), and Japan (9%), according to A Partnership. Cambodians, Hmong, Indonesians, and others make up the balance.

With 94 percent of Asians living in major metropolitan areas, geographic clustering helps. The five metropolitan statistical areas in which most Asians live are Los Angeles-Long Beach, CA, New York City, Honolulu, San Francisco, and Oakland, CA. Asian-language media vehicles — there are more than 500 nationally — are effective tools in reaching these segments. (Imada Wong Communications Group’s Asian-Pacific American Media Guide is one way to identify them.)

Past “wisdom” had marketers treating the Asian-American community as a homogeneous unit and appealing to its shared “American-ness.” New thinking has them devising campaigns to address differences. Packaged Facts, a leading marketing research company, says brands are using specialty agencies that “have a firmer grasp on the cultural and linguistic nuances that can make or break an Asian-American campaign.”

Smart Shoppers

Fok says it’s important to do four things: Find the Asian customers who are valuable and worth pursuing. Separate them into homogeneous groups. Determine reasonable costs. Make campaigns relevant. “Data is meaningless unless you apply the proper marketing strategies,” he says.

The percentage growth of Asian-American purchase power has jumped 124 percent to $254 billion since 1990 — more than that of any other minority group, says the University of Georgia Selig Center for Economic Growth.

“Asians out-index all other groups when it comes to having a computer in the home, purchasing products on the Internet, and using the Internet for financial transactions. But there’s next to no marketing to Asians in this category,” Saul Gitlin, vp-strategic marketing at Kang & Lee, said recently on DiversityInc.com, a Web site devoted to ethnic marketing issues. (Kang & Lee’s president, Eliot Kang, heads the Asian American Advertising Federation.)

Asians also continue to out-distance non-Hispanic whites in education. Census data indicates that 46 percent of Asians and Pacific Islanders hold at least a bachelor’s degree, compared with 31 percent of whites. Urban Call: The Trade Magazine for Urban Retailers and Businesses reports that Asians have the highest rate of business ownership. The 12-year-old National Korean American Grocers Association, for instance, is a multi-billion dollar power.

But it would be a mistake to paint the entire Asian population as rich and well-educated. Many residents are recent immigrants. Sixty-six percent are foreign born, and 63 percent use their native language at home, says A Partnership. Twenty-three percent have five or more members in their family, compared with 13 percent of non-Hispanic whites, says the Census.

Retailers need to pay attention to the numbers. Asian shoppers index high for orange juice, cooking oil, and bottled water. They like skin-care products that enhance their natural beauty rather than transform their image. (Los Angeles-based Interviewing Service of America and a consortium of leading Asian companies have launched a study called Asian Pacific American Marketing Trends that will spot more of these details.)

Bill Imada, ceo of Imada Wong, says that a major pitfall marketers face is trying to directly translate phrases that work well in America but may not be culturally relevant to Asians.

For example, “‘The power of one’ appeals to the American spirit of individuality, but Asians tend to think more in terms of the group,” Imada says. “American ads may show Mom, Dad, two kids, and Fido. But in Asia, families are extended. If you put in a Grandma and Grandpa, more siblings, some cousins — even neighbors — an Asian person would say, ‘Yes, that’s what a family looks like.’”

Lafayette Jones is president and ceo of Segmented Marketing Services, Inc., Winston-Salem, N.C. He can be reached at [email protected].