Multicultural Marketing: A Misunderstood Concept and Untapped Business Strategy


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published June 13, 2009

Newly released census figures show that the nation’s minority population has reached 102.5 million people, or one in three Americans. For example, Illinois’ population is now 35 percent minority, ranking the state 15th in the percentage of minority inhabitants nationally. Hispanics now account for over 15% of the overall population and are leading these growth trends.

This burgeoning population-and the buying power it represents-makes effective multicultural marketing imperative for businesses to succeed. Yet many firms in our businesses community lack both a clear understanding of these diverse consumers and a disciplined approach to investing in and managing multicultural marketing.

Decisions about multicultural marketing often are flawed by misconceptions and a lack of data about minority consumers.   Assumptions about acculturation and assimilation lead firms to believe that diverse segments-especially consumers from immigrant populations-will eventually be absorbed into the general market, so, why bother tailoring marketing messages or products to them? Until recently there were few research databases available to provide information on consumption behaviors of African Americans, Hispanics and the many Asian groups.  Marketers should take advantage of these resources, but also dig deeper because even this data is not complete.  For example, supermarket consumption data often doesn’t count the many small ethnic neighborhood stores, and news consumption tracking often does not include magazines from immigrants’ countries of origin.

So, how can companies begin or improve multicultural initiatives? Some advice:

1.      Adopt a common company-wide definition of multicultural marketing. Avoid trial and error approaches by creating a shared platform to discuss and capture knowledge and experiences about multicultural marketing.

2.      Analyze your customer base thoroughly. Invest in database-mining techniques to identify how multicultural customers can help grow your business.  You’ll be surprised where the growth is coming from when you segment by culture and level of acculturation.

3.      Identify opportunities. Do not focus just on just one promotion or version of a promotion.  Dig deeper.  Look for new product and market development opportunities that meet the needs of un-served segments.

4.      Learn to understand differences in consumer behaviors and decision-making processes among multi-cultural groups and subgroups. Develop a measurement process and criteria that takes into account those differences when promoting your product. Once you know the differences, look for the potential similarities between multicultural segments, the general market and even world markets.  Use this knowledge to promote across brands and product categories or to create new offerings.

5.      Define a process for multicultural marketing so your company consistently applies techniques to other projects, measures and understands the results, and adjusts applications accordingly.  Institutionalize the learning.

Companies miss the whole enchilada when they cling to the concept of the melting pot.  Only when businesses truly understand multicultural market differences can they leverage both differences and similarities across markets to succeed.

Posted in:
Tagged: ,

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.