Selling Ideas: How to approach Ethnic Housing Market

As the United of States becomes more heterogeneous, minority’s population subcultures are growing in affluence and sophistication.  Understand consumers’ subculture became a marketing opportunity for companies to increase revenues by developing successful marketing strategies that can integrate consumers’ moral values.

            African Americans for instance, comprise a significant subculture and account for 41.1 million, approximately 13.5% of the American population (BlackDemographics.com, 2010), while Hispanic represents 16.3% with 50.5 million Hispanics in U.S., followed by Asia with 14.7 millions (United States Census Bureau, 2010). Additionally, the purchasing power of ethnic subcultures are growing substantially, Hispanics Americans are expected to surpass $1.4 trillion in 2013, African Americans surpass $1.2 trillion and Asian Americans $752 billion (Pride & Ferrell , 2010). Although the marketing phenomenon of targeting subcultures is gaining ground and is expected to escalate in the future, only the companies that really understand the cultural differences will be able to explore this opportunity and obtain success.

            However, housing lenders and real estate agents are going to face a lot of challenges across ethnic subcultures. Where, cultural generalizations about whole societies and how they view ethical issues may not be completely appropriate in the future (Jenner et al. 2008). Among African Americans for example, marketers have found differences relating to aspirations, in terms of brand and style consciousness and even generational differences (Hawkins, et al, 2010). Especially among the Hispanic Americans the generation differences heavily influence their buying decisions. This happened because of the degree to which an immigrant has adapted to his new culture (Hawkins, et al, 2010).  Asian groups also represent a challenge because of the various nationalities, an effective communication has to be more than simply translating an ad (Hawkins, et al, 2010). There are cultural symbols and meanings with different relevance for each nationality segment, which can be very confusing for a company to master.

            Although this article is focus on the three majors American subcultures it is important to consider that there other subcultures that also have their own interest and preferences, such as Native Americans, Asian-Indian Americans, Arab Americans and other religious subcultures as such Christian and non-Christians. All those subcultures reflect the diversity of not only United States but also the whole market place where there is no distance and companies are more global than ever. Understanding and distinguishing patterns of behavior in each subculture is a challenge for the housing market but can provide an opportunity to develop an unique programs (Hawkins, et al, 2010), to match the unique needs of each subculture.

Overall marketing strategy for targeting each of the following groups:

a) African-Americans

            Only 28% of African Americans who own a house are a married-couple family compared to 49% in all races and more than 29% are female householder with no husband present compared to 12% in all races (BlackDemographics.com, 2010). Considering that 34% are families with no husband (BlackDemographics.com, 2010), this type of family situation creates unique needs for areas with child care, practical, easy to maintain houses and recreation. The product should have characteristics of energy and time saving.

            Although the Black Population has increased in all US regions since 1990, the South has had the most growth. Therefore the strategy should focus on the southern states of America because more than half 55% (BlackDemographics.com, 2010), of the African American population lives in the South. This is especially true in urban areas, where more than 80% of African Americans reside (BlackDemographics.com, 2010).

            According to table B most African Americans believe that the person buying home does have to pay a real state professional. There is an opportunity for the marketing strategy to make clear that to buy a house they don’t have to pay the real state professional and therefore the price is fair. Also only 36% know that the house lenders are not required by law to give the lowest rates on loans, combine this with the fact that only 57% know that is not necessary to have a perfect credit rating to qualify for a mortgage. This combination of facts   results in a fact that more than half of all African Americans rent house instead of buying at a figure of 53% (BlackDemographics.com, 2010). A promotion strategy should demystify those factors and make the process look less complex. Giving the feeling of ownership could also influence positively the attitudes towards the purchase of a home.

b) English Hispanics

            While English Hispanics scored the highest percentage on every key reason to purchase a home the most important reason is the feeling of ownership. Also, they seem to understand the process of purchasing a home better, than other groups. Therefore, the focus of the marketing strategy should be the product itself. With more than 63% representing  married house holders and 39% have young child (U. S. Census, 2010 b) a house should accommodate children and therefore schools and facilities close to the house would make a difference.

            Because most of English Hispanics think that rent is “bad” the price of the house can be one of the biggest attractions for them to purchase a house if put in comparison with the rental price. Also, those houses should be placed in one of the 25 states in which Hispanics were the largest minority group or California where 14 million of the population of the Hispanic-origin population lives (U.S. Census, 2010 b). A promotion strategy should emphasize the ownership, achievement of a dream and avoidance of discrimination while the benefits of the home’s characteristic would satisfy their needs.

c) Spanish Hispanics

            According to table B this group have the least home buying knowledge, consequently on table C their perceptions is of a process which is too complex which they don’t understand very well. The fact is that the language has created an issue and the fact that most of the information is only available in English has created a gap between real state and Spanish Hispanics. Little things like the manual for air-conditioner in Spanish might make a difference whether members of this group to buy a house. Even the position of the kitchen can be an issue, for example Hispanics don’t like to have kitchen open to the family room (Hawkins, et al, 2010).

            With the language issue, promotion must not only include the translation of ads and documents. It must improve the home buying knowledge and give more confidence in a home buying skills to encourage the purchase. Again, those houses should be placed in one of the 25 states in which Hispanics were the largest minority group or California where 14 million of the population of the Hispanic-origin population lives (Census, 2010 b). To communicate to them, since Spanish Hispanics are not so familiar with the internet use, it is possible to reach them through Spanish languages TV or even newspapers. 

Example of advertising campaigns for Fannie Mae:

a)      African-Americans

            The overall positioning strategy and core theme is “feel as light as a clouds when you buy a house with Fannie Mae”. The idea as it is on Figure 1, is to position in African American’s mind as a reason to own a house because Fannie Mae’s process will give for them more confidence while increasing their knowledge about the homing buying process. The visual elements are a black woman dressed as a working professional while she also has kids to take care of. She looks happy because she has the feeling of home ownership. The bubble with another image with her in the clouds transmits the feeling of freedom and simplicity that is inside her by owning a house. The key advertising copy points explain the visual elements to their target market while directing them to the company by saying that “this is what you feel like when you buy a house with Fannie Mae”. The key media outlets for this ad should be in magazines that specifically target African American culture, internet and in TV shows that are related to or deal with African American themes.

FIGURE 1: African American advertising Campaign 

a)      English Hispanics

            The overall positioning strategy and core theme is “Fannie Mae can help you to achieve your dreams”. The idea as it is on Figure 2 is to position Fannie Mae in English Hispanic’s mind as a realization of a dream and therefore Fannie Mae can make it happen for them. The visual elements are the English Hispanic family arriving in a new house, very happy while the neighbor to the right outside of the door just looks surprised. With this image it is expected to emphasize the ownership, achievement of a dream and avoidance of discrimination while the benefits of the home’s characteristic would satisfy their needs. The key advertising copy points states: “Achieve your dreams” while directing them to the company by saying: “call to Fannie Mae today”. Since this group are English dominant language, the key media outlets for this ad should be in English magazines that specifically target Latino culture, internet and in TV shows that are related to deal with Latino themes.

FIGURE 2: English Hispanic advertising Campaign

c) Spanish Hispanics

            The overall positioning strategy and core theme is “Problemas para comprar su casa?”. The idea as it is on Figure 3 is to position Fannie Mae in Spanish Hispanic’s mind as a company that has the tools necessary to help Spanish speakers to understand the process to buy a house and finally make a purchase. The visual elements are the Spanish Hispanic guy confused while trying to understand the process of buying a house. This is contrasted by the other images on the bottom showing Spanish staff talking with potential consumers, sale signs in Spanish and even a personalized service by Fannie Mae. The key advertising copy point statements are in Spanish and it lists the tools that make Fannie Mae able to facilitate this process to the Spanish Hispanic communities. Since this group is not English dominant language, the key media outlets for this ad should communicate to them through Spanish languages TV and news papers.

FIGURE 3: Spanish Hispanic advertising Campaign

Training materials

         First of all, the type of training materials should include an educative process that improves intercultural learning via the development of cognitive, affective and behavioral competencies needed for successful interactions in diverse subcultures. Using the thesis from Littrell (2006) about Cross Cultural Training, it would be necessary to provide for lenders and real-estate agents the knowledge, skills and abilities necessary for cross-cultural adjustment and integration to improve interaction performance and minimize failure in understanding.

            After lenders and real-estate agents understand or at least have an acceptance of the subcultures, they should learn the reasons for purchasing a home by ethnicity and then they can focus on that information to encourage each subculture according to their preferences. However, the home buying knowledge is relatively low among all the subcultures as a consequence the home buying confidence was very low as well. Therefore, lenders and real-estate agents must increase their knowledge about the process to be able to transmit this information clearly among the subcultures. Things like the need for attorney or not, time of commitment, rates on loan and mortgage issues should be discussed to enhance their interactions with consumers from various ethnic backgrounds. Of course the language is an issue for Spanish Hispanics therefore language training should be essential for real estate agents who are focusing on this group.

            The type of training materials would include in-house lectures, cultural assimilation, mentoring, field experience, interviews with members of subcultures and host country in Spanish Countries. In-house lectures range from interactive methods of case studies, critical incidents, cultural simulations and role playing to guided discussions (Harris, Brewster and Sparrow 2003). Field experience exposes trainees to the emotional stress of living and working with people from a different subculture through orientation visits, probation and interviews with members of the subculture. As being a hosted in other countries such as Mexico for example, they will be able to get familiar with the conditions and environment where those subcultures came from and hence be in the best position to impart the necessary knowledge and skills to the real estate market (Osman-Gani 2000, 230).

REFERENCES

BlackDemographics.com. (2010). African American population. Retrieved in July/2012 from             http://www.blackdemographics.com/.

Jenner, S., MacNab, B., Briley, D., Brislin, R., & Worthley, R. (2008). Cultural change and       marketing. Journal of Global Marketing, 21(2), 161–172

Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2010). Consumer behavior: Building

            marketing strategy (11th ed.). New York: McGraw-Hill/ Irwin

Harris, H., C. Brewster, and P. Sparrow (2003). International human resource management.

            London: The Chartered Institute of Personnel and Development

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Osman-Gani, A.M. 2000. Developing expatriates for the Asia-Pacific region: A comparative

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United States Census Bureau (2010). 2010 Census Shows America's Diversity. Retrieved at       July/2012 from:             http://www.census.gov/newsroom/releases/archives/2010_census/cb11-cn125.html

United States Census Bureau (2010b). Hispanic Heritage Month 2011: Sept. 15 -Oct. 15.          Retrieved at July/2012 from:          http://www.census.gov/newsroom/releases/archives/facts_for_features_special_edition            s/cb11-ff18.html

 William M. Pride & O. C. Ferrell (2010). Foundations of Marketing. Cengage    Learning, 01/01/2010.