July, 2003

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1 July, 2003

PRESENTED TO: PRESENTED BY:KAPPA ALPHA PSI FRATERNITY, INC. GRANT BUSINESS STRATEGIES, INC.

www.grantbusinessstrategies.com

Partnership & Community Partnership & Community DevelopmentDevelopment

http://www.grantbusinessstrategies.com/

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Facts about the African American Community

2000 2002 Share of Total

Population 34,658,190 35,712,636 12.4%

Buying Power $588.7 billion $645.9 billion 8.5%

Black population has increased by 19% in twelve years since 1990 and is projected to reach 38,550,347 by year 2007 Black buying power has increased by 104% since 1990. It is projected to account for 62% of combined spending or $853 billion by year 2007 African Americans account for almost nine cents out of every dollar spent The number of black-owned firms increased four times faster than all U.S. firms - according to the Survey of Minority-Owned Business Enterprises released by Census Bureau in 2001 As African Americans increase in number and purchasing power, their growing share of the U.S. consumer market draw more and more attention from retailers and producers alike.

Source: Selig Center for Economic Growth, The University of Georgia, Volume 62, 2nd Quarter 2002

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African American Combined Income, 1990 - 2002

304.4320.4

343.4360.3

386.2416.3

446.9469.4

497.6 510540.48

572.1

645.9

852.8

0

100

200

300

400

500

600

700

800

900

1990 1991 1992 1993 1994 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: The Selig Center for Economic Growth, University of Georgia

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Buying Habits of African Americans 1996 vs. 1999

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African American Consumer Expenditure- 2002

Source: 2002 Target Market News; “The Buying Power of Black America”Note:2002 Black Households earned income = $631 billion

Apparel

Food

Telephone Services

Transportation, Travel & Lodging

Housing & Related

New & Used Car

Computers & Electronics

21%

9%

7%

4%2% 1% 1%

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Trends of Spending in Specific Categories

2000 2001 2002 % Change

(2001 vs.2002)

Apparel Products $24.7 $22.3 $22.9 3%

New, Used Cars & Trucks $31.3 $30.1 $46.7 55%

Food $52.9 $52.4 $54.7 4%

Housing & Related Items $128.1 $130.7 $131.7 1%

Telephone Services $12.3 $13.0 $13.6 5%Computers / Consumer Electronics $5.4 $5.4 $5.1 -6%

Source: 2002 Target Market News

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Brands Blacks Purchase

Source:The Arbitron Black Consumer Study 2003; Urban Radio Marketing Services

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•Auto-makers: Minority owned dealerships is the key to Ford's success. Ford leads U.S. automakers in the percentage of minority-owned or operated dealerships with more than 360 minority dealerships, or 7 percent of the company's total of 5,100 dealerships nationwide. The company has made the greatest inroads into the multicultural market with advertising and community partnerships.

Auto-makers are increasing purchases from minority-owned companies because the industry has recognized the demographics of their customer base. If CEOs and top managers in the auto industry set the game plan, auto dealers are those who implement it. Automakers are keenly aware of the need for cultural competence at dealerships.

•Media & Broadcasting: Viacom gained million of viewers, when it purchased BET. Viacom also brokered a deal with with UPN, the leading TV network for African Americans. AOL Time Warner purchased a 49% interest in Essence magazine.

Marketing to African American Market

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Telecommunications/Electronic: Supplier diversity as a business strategy - develop a supplier base reflecting the demographics of their marketplace to increase market share, profits, and shareholder value.

Retail: Kmart targeting Black & Hispanic consumers to be a core strategy for their revitalization. Latino and African-American customers, who represent 39 percent of Kmart shoppers, according to data from Kmart. As the retailer moves to revamp its image, it is acquiring brands it hopes will appeal to people of color.

Embracing ethic and cultural diversity rather than assimilation is critical for competitive retailers. (Source: Diversity Inc.)

•Financial Services: Communities of color hold great potential for profit for the financial-services industry, a mature industry, which must find new customers in order to grow. Financial institutions and accounting firms, such as HSBC USA and Pricewaterhouse Coopers, are making use of their recruitment efforts and community involvement operations to build awareness of their brands among communities of color.

Marketing to African American Market

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Economic Development Examples

More banks are becoming involved in “faith based” lending. According to Richard Roberto, President of EAB Community Development Committee and member of ABA’s Center of Community Development Steering Committee – “We see this as a specialized loan area. Its proven successful. We help supplement programs that tithes fund while helping parishioners with their finances by providing, for example, seminars on mortgage loans.”

House Equity Lending Program (H.E.L.P.) a program by Jesse Jackson – working with congregations of Allen AME and Bridge Street AME in Brooklyn, New York is designed to help home ownership in minority communities and curb predatory lending. The partnership includes several banks (including CityMortgage, Bank of New York, Green Point, NorthFolk, M&T, Fleet and HSBC) and Fannie Mai. H.E.L.P. uses the pulpit to get the word out on how banks can help the consumer.

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Economic Development Examples Collective Bank Group (CBG) in Maryland – the program involves over 250 churches

and five banks (AllFirst, Bank of America, Industrial Bank, Enterprise Savings and

Loan, Riggs Bank). The banks and the churches form a covenant in order to provide

workshops and seminars for church members on various banking industry subjects e.g.

Home Buyers Institute, a free program that talks about hidden costs on mortgages and

offers tips on buying a home. CBG also has strategic partners such as accountants,

CPAs, legal firms and architectural firms to provide their expertise.

Rainbow/Push preaches investing through 1000 Churches Connected project.

Black Enterprise – Black Wealth Initiative/Declaration of Financial Empowerment

Self-Help outreach – minority homeownership presentations to African American church congregations

National Association of Investors Corporation’s partnership with Rainbow/Push and Black Churches to help congregations launch investment clubs

Other Programs focused on continued information and education on investments, stock market, and financial planning to encourage wealth building through saving, investing, and owning

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Conclusion

The buying power of the African American market segment represents not only consumption but power of investing and ownership. This is the financial strength or potential for economic impact that can lead to financial empowerment.

Demographic and economic trends of minority groups should be used to position ourselves to grow wealth, establish and grow businesses and achieve economic empowerment.

This growth has been the catalyst for community development and the growth has clearly created opportunities domestically for economic development.

Identify and leverage mutually beneficial strategic alliances that fully complements the organization and its constituent groups by leveraging the buying power.

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Expand economic development initiatives, to include a focus on leveraging partnership relationship to:

1. Enhance understanding of the value of the urban market

2. Increase lending and investment in inner city markets, minorities and minority-owned businesses

3. Provide more education for minorities in the area of investment/ownership and becoming entrepreneurs.

Conclusion

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For more Information on Grant Business Strategies, Inc.Please visit our website:

http://www.grantbusinessstrategies.com

Documents

July, 2003