Go West Summit

Go West Summit

Latin America Marketplace Today

Pete C. Garcia

Consultant U.S. Hispanic and Latin American Marketing

Las Vegas, Nevada

2.6.2012

Latin AmericaLatin America

Area 21,069,501 km2 (8,134,980 sq mi)

Population 572,039,894

Countries 20

LanguagesSpanish, Portuguese, Quechua, Mayan languages, Guaraní, French, Aymara, Nahuatl, Italian and English.

Time Zones UTC-2 to UTC-8

Largest cities

[1]

1. Mexico City……...Los Angeles2. São Paulo3. Buenos Aires…….New York4. Rio de Janeiro5. Lima………………Chicago6. Bogotá7. Santiago…………..Houston8. Belo Horizonte9. Guadalajara……….Miami10. Caracas

The Latin America Marketplace

• So where do you start ?

Mexico?

Brazil?

USA ???

First let’s talk culture

• Latin American culture is the formal or informal expression of the peoples of Latin America, and includes both high culture (literature, high art) and popular culture (music, folk art and dance) as well as religion and other customary practices

Historically speaking

• Starting in the late 16th century, a large number of African slaves were brought to Latin America, the majority of whom were sent to the Caribbean and Brazil.

• Today, this ethnic group makes up the majority of the population in most Caribbean countries.

• Many of the African slaves in Latin America mixed with the Europeans thus the Mulattoes.

History

• Large amounts of European immigrants arrived in Latin America as did in the USA in the late 19th and early 20th centuries. Most of settled in the Southern Cone.

• Nowadays the Southern Cone has a large majority of people of European descent and in all more than 80% of Latin America's white population, which is in turn more than 90% composed of the top five groups of immigrants, which were: Italians, Spaniards, Portuguese, Germans and, to a much smaller extent, Irish, Poles, Russians, Welsh, Ukrainians, French, etc.

More on the history of Latin America

•In this same period, many immigrants came from the Middle East and Asia, including Lebanese, Syrians, and, more recently, Koreans, Chinese and Japanese (mainly in Brazil).

•This racial diversity has profoundly influenced religion, music and politics. This opaque cultural heritage is (arguably improperly) called Latin or Latino in United States' English. Outside of the U.S., and in many languages "Latino" just means "Latin", referring to cultures and peoples that can trace their heritage back to the ancient Roman Empire. Latin American is the proper term.

Where are the Latin Americans in the USA?

U.S. Hispanic Market at a Glance

US Hispanic/Latin American Marketplace

• According to a recent Fox News article, the U.S. Hispanic market will soon be the 11th largest economy in the world , putting it in the same category as Brazil, Russia, India, and China .

• In fact, U.S. Hispanics actually have more per capita purchasing power than the BRIC countries, as well as the G-20 member nations South Africa, Mexico, Argentina, Korea, Indonesia, Saudi Arabia, Turkey, and Australia.

Growth 1990 to 2013 by Ethnicity/Race“The Non-Hispanic White population is forming a decreasing proportion of the U.S. population

while Asians, Blacks and especially Hispanics are forming a larger part of our nation.”

75.8%

69.1%

65.5%63.3%

11.8% 12.0% 12.3% 12.4%

2.8% 3.7% 4.6% 4.7%

8.8%

12.5%15.5%

17.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

1990 2000 2008 2013

N-H White N-H Black N-H Asia & N-HPI Hispanic

*Source: Latin Force Group LLC, American Marketscape DataStream: 2008 Series

The Hispanic Boom in the USA

• From 2000 to 2010– Nearly 14 million additional Hispanics– 34% growth during period– 50% of the total USA population growth

– 2010 Census 51 million = 16.3 % of

311 Million USA total population

• From 2008 to 2013:– 1,440,087 new Hispanic Americans per year

• 120,073 per month– 3,943 per day

» 164 per hour

Mexicanos in the big Manzana(Apple)?

New York DMA Hispanic Origin Pop 1990 % of Hispanic 2013 % of Hispanic % Growth Growth IndexPuerto Rican 1,247,544 46% 1,488,866 32% 19% 0.26Dominican 406,774 15% 848,083 18% 108% 1.48Cuban 160,015 6% 237,926 5% 49% 0.67Colombian 159,711 6% 331,231 7% 107% 1.47Ecuadorian 117,554 4% 311,000 7% 165% 2.25Mexican 99,974 4% 586,809 12% 487% 6.66Salvadoran 63,866 2% 211,868 4% 232% 3.17Peruvian 56,692 2% 148,571 3% 162% 2.22Other Hispanic 412,783 15% 551,996 12% 34% 0.46

Total 2,724,913 100% 4,716,349 100% 73% 1.00

Chiflando(Whistling) Dixie

State TotPop90 HispPop90 % of Total TotPop13 HispPop13 % of Total % Hispanic Growth Growth IndexAlabama 4,040,590 23,548 1% 4,706,709 150,786 3% 540% 87.16Georgia 6,478,215 101,388 2% 10,382,063 936,750 9% 824% 132.91Kentucky 3,685,292 20,356 1% 4,385,052 113,322 3% 457% 73.67North Carolina 6,628,627 69,004 1% 9,901,885 830,616 8% 1104% 178.05South Carolina 3,486,690 28,316 1% 4,645,155 208,485 4% 636% 102.64Tennessee 4,877,192 31,062 1% 6,492,727 271,498 4% 774% 124.87

Total 29,196,606 273,674 1% 40,513,590 2,511,456 6% 818% 131.90

Hispanics in Florida are Cuban, right?

Hispanic Origin Pop 2008 % of HispanicCuban 1,192,355 30.0%Puerto Rican 746,346 18.8%Mexican 737,131 18.5%Colombian 314,728 7.9%Dominican 153,656 3.9%Nicaraguan 137,433 3.5%Peruvian 100,231 2.5%Honduran 98,947 2.5%Venezuelan 93,824 2.4%Guatemalan 68,607 1.7%Argentinean 64,604 1.6%Salvadoran 52,831 1.3%Ecuadorian 51,577 1.3%Panamanian 37,510 0.9%Chilean 28,250 0.7%Costa Rican 25,934 0.7%Other Hispanic 70,450 1.8%

Total 3,974,414 100%

Population by State in 2008: Top 25 States

“The Non-Hispanic White population is the minority in CA, TX, NM, HI plus DC.”

State Total PopulationNon Hispanic

White Population

% Non Hispanic White Population

Asian & PI Population

% Asian & PI Population

Black Population

% Black Population

Hispanic Population

% Hispanic Population

TOTAL 305,404,133 199,935,729 65.5% 14,505,641 4.7% 39,388,302 12.9% 47,202,030 15.5%CA 37,117,133 15,535,835 41.9% 4,862,395 13.1% 2,457,487 6.6% 13,669,540 36.8%TX 24,445,647 11,507,936 47.1% 885,659 3.6% 2,977,350 12.2% 8,959,512 36.7%NY 19,348,942 11,579,601 59.8% 1,411,206 7.3% 3,339,817 17.3% 3,199,035 16.5%FL 18,801,900 11,276,349 60.0% 456,780 2.4% 3,021,896 16.1% 3,974,414 21.1%IL 12,953,283 8,343,916 64.4% 582,564 4.5% 1,934,305 14.9% 1,992,628 15.4%PA 12,501,596 10,180,217 81.4% 320,237 2.6% 1,362,662 10.9% 574,884 4.6%OH 11,504,082 9,486,946 82.5% 193,813 1.7% 1,392,359 12.1% 282,796 2.5%MI 10,112,157 7,819,395 77.3% 255,848 2.5% 1,442,545 14.3% 411,485 4.1%GA 9,771,845 5,639,875 57.7% 298,940 3.1% 2,965,196 30.3% 798,774 8.2%NC 9,158,932 6,168,747 67.4% 186,444 2.0% 1,986,111 21.7% 671,798 7.3%NJ 8,786,597 5,388,233 61.3% 697,956 7.9% 1,275,325 14.5% 1,434,636 16.3%VA 7,818,632 5,221,471 66.8% 400,142 5.1% 1,557,775 19.9% 528,435 6.8%WA 6,572,850 4,979,885 75.8% 485,303 7.4% 238,606 3.6% 630,539 9.6%AZ 6,554,910 3,835,069 58.5% 181,176 2.8% 259,297 4.0% 1,993,453 30.4%MA 6,438,907 5,097,158 79.2% 338,021 5.2% 458,168 7.1% 534,158 8.3%IN 6,397,180 5,325,047 83.2% 94,163 1.5% 579,744 9.1% 331,657 5.2%TN 6,177,103 4,760,338 77.1% 90,652 1.5% 1,050,493 17.0% 221,323 3.6%MO 5,928,290 4,874,082 82.2% 94,450 1.6% 685,958 11.6% 179,568 3.0%MD 5,690,132 3,249,796 57.1% 299,865 5.3% 1,698,403 29.8% 375,197 6.6%WI 5,615,446 4,782,954 85.2% 119,038 2.1% 338,631 6.0% 279,696 5.0%MN 5,240,085 4,466,061 85.2% 195,372 3.7% 248,237 4.7% 211,994 4.0%CO 4,894,547 3,479,231 71.1% 141,024 2.9% 203,630 4.2% 995,429 20.3%AL 4,671,153 3,208,243 68.7% 47,433 1.0% 1,236,276 26.5% 128,386 2.7%SC 4,441,183 2,900,888 65.3% 56,546 1.3% 1,277,415 28.8% 171,644 3.9%LA 4,381,527 2,734,052 62.4% 64,473 1.5% 1,406,270 32.1% 130,799 3.0%

NH-White is Minority in the two

largest states

Asian 2.95Black 2.60Hispanic 3.41NH-White 2.40

Average Household Size

Language Use in 2008: Hispanic

“The vast majority of Hispanics are Bi-Lingual to some degree; and nearly equal quantities are dependent on either English or Spanish.”

English Dependent19.2%

Bi-Lingual English & Spanish14.7%

Spanish Dependent20.6%

Bi-Lingual English Preferred26.5%

Bi-Lingual Spanish Preferred19.0%

Code Language Segment Hispanics Age 5+ Language Segment Hispanics Age 5+ %HL1 English Dependent 8,089,402 English Dominant 19,279,627 45.7%HL2 Bi-Lingual English Preferred 11,190,225 Bi-Lingual 6,205,170 14.7%HL3 Bi-Lingual English & Spanish 6,205,170 Spanish Dominant 16,718,288 39.6%HL4 Bi-Lingual Spanish Preferred 8,031,954 HL5 Spanish Dependent 8,686,334 English Capable 33,516,751 79.4%

Total 42,203,085 Spanish Capable 34,113,683 80.8%


Hispanic Income by Ranges: 2008

“Over one-third of Hispanic households earn over $50,000 per year and two-thirds earn over $25,000 per year.”

less than $15,000

16.2%

$25,000 to $34,999

13.9%$35,000 to $49,999

17.6%

$15,000 to $24,999

15.2%

$150,000 or more

3.2%$100,000 to $149,999

6.4%

$75,000 to $99,999

9.1%

$50,000 to $74,999

18.2%


Hispanic Consumer Expenditures: 2008

“Hispanic spending is quite substantial in all major categories, especially due to their relative youth and larger average household size.”

Annual Expenditures Per Household in USD

-

20,000,000,000

40,000,000,000

60,000,000,000

80,000,000,000

100,000,000,000

120,000,000,000

Food & Beverages Shelter &Insurance

Utilities Housekeepingsupplies

Furnishings AndEquipment

Apparel Transportation &Insurance

Health Care Entertainment Personal CareProducts &Services

PersonalInsurance &

Pensions


Latin America Market at a Glance

GLOBAL POPULATION- 6.6 Billion

Top 15 countries of the globe’s population include :

• Two in Latin America: Brazil, Mexico

• 572 MILLION LATIN AMERICANS , GROWING AT 9% EACH YEAR

• MEXICO 110 million in population

• Central America 84 million population, 6 countries

• South America 375 million

• 186 million population Brazil – 20 million in Sao Paolo alone

• 40 million population Colombia and another

• 40 million population in Argentina

• Caribbean 30+ Million population in the market

How to Market to Latin Americans?

• Story of Continental Airlines, the Latinization of its product and services– Identify what Latin Americans prefer and don’t prefer– What was discovered & what was done to react to marketplace

Clients prefer to speak their own language ..AHA !

The airline chose to make changes by having TRI-LINGUAL– flight attendants– airport service representatives– signage at airports – reservation centers– screens e-Kiosks – Website in español– Dedicated Sales Staff throughout USA

Is language enough ?

– Translation alone will not get you there!

•How much should you know about your Latin Customer?

•Who in your organization should know what they prefer and more importantly what they don’t prefer?

•How can you spread this knowledge?

How to Market to Latin Americans? (cont.)

– Clients prefer their regional cuisine

– Created a congress of chefs• Continental Airlines counts with awarded culinary

chefs for the Latin, Asian and European markets

– Clients prefer personal touch and understanding of their culture

– Created training courses of our customer service, in-flight, reservation services to address not only differences with the Anglo markets, but most importantly differences amongst Latinos themselves.


• Latinization also required specific advertising and public relations campaigns to let Latinos know that Continental understood their needs and was now providing services especially designed for them.


• Latinization was a marketing concept that could enhance not only customer services, but revenues and profits

• In 10 years Continental grew from $250 million in revenues to $2.5 billion and from serving 25 destinations to serving 75 destinations

• Providing a product and service that communicates speech, taste, sound, touch and visibility meant that the could touch on all their five senses

• The Latinization program provided the guideline as Continental grew globally thus..the Globalization marketing concept


• Not only Continental, look at AT&T’s experiences with new stores in Hispanic neighborhoods and in a few countries in Latin America

• In Texas, HEB stores now markets “Mi Tienda” just like Central Markets in upscale neighborhoods

• Toyota chose to market its Scion product to Hispanics right in their own neighborhoods and choosing selected locations where young Hispanics chose to congregate


• Marketing to US Hispanics and Latin Americans requires an understanding of the languages and cultures, but most of all ensuring your leadership understands the value of marketing to them

• We must first understand the Latin American, then ensure organizational understanding

• This is accomplished by learning to respect differences and then embracing the differences

• Marketing diversity makes dollars and sense

• So teach your staff how to say “Hola” and “more”

So how much do I spend on this market?

• Take a look at your overall budgets and determine what gives you the most return on your investment?

• What is the percentage of your overall spend for the Latin Ameircan market?

• What is the airlift capacity from the global markets you need to invest in?

• What is the proximity to my market?

• What do other cities do to garner the Latin market?

Future of Latin American Market Place

•ALTA, the Latin American Association of Airlines reports quarterly growth in the 9-11% ranges on a consistent basis

•Latin America is the one place in the world where air travel continues to grow

•Latin countries continue to grow politically and financially as amongst the most successful emerging markets on the globe

•There is much opportunity today to continue developing ties with this huge marketplace

• BUT, do your homework, FIRST!

•Then make the decision on where to place your bet!

Thank you !

Muchas gracias !

Muito Obrigado !

Pete Garcia International Inc

• [email protected]

• 1-713-854-1577

• www.petegarciainternational.com• www.airlinemarketdata.com• www.extreme-blue.com• www.usmcocgc.org

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