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Ivonne Kinser

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Ivonne Kinser (photo) notes that corporate social responsibility and sustainability are important concepts not only for building a better society, but also to reach Hispanics with a brand with meaning for the community.

There are currently 50.5 million Hispanics living in the US–and it is hardly news that they represent the largest, fastest growing minority group in the nation. But what does that mean for US companies? Where’s the real sustainable opportunity? (And make no mistake about it, the keyword is “sustainable.”)

According to the latest statistics, Latinos will account for 60% of the Nation’s population growth between 2005 and 2050. Obviously, the consumer-based growth potential for US companies speaks for itself loud and clear. And there is no question but that planning today with that future in mind will be crucial to building lasting brands, able to withstand competitors’ advances–and even markets and economic crisis.

Accomplishing sustainability through corporate social responsibility

The debate over defining “corporate social responsibility” (CSR) goes back to 1970 when economist Milton Friedman wrote his now-famous commentary on social responsibility, stating that “the social responsibility of business is to make a profit.”

John Mackey, founder and CEO of Whole Foods, responded to Friedman’s position in a subsequent article (that also included comments from Cypress Semiconductor founder and CEO T. J. Rodgers, who supported Friedman’s position), maintaining that corporations that seek long-term shareholder value are more beneficial to society than corporations that focus on charitable endeavors.

For the purpose of this post, let's take the definition Christine Arena proposes in her book The High Purpose Company, which reflects the view commonly-held by most experts in the field today: "The efforts companies make above and beyond regulation to balance the needs of stakeholders with the need to make profit."

Building a Sustainable Brand

CSR-focused efforts may be one of the most effective strategies in building a sustainable brand. And this is especially true among underserved demographic groups–although CSR speaks to any demographic in any language and goes light years beyond cultural stereotypes or language preferences. Think of it as “brands with meaning,” and if you’re not yet sold on the idea, just ask Coca Cola, Wal-Mart, Microsoft, Nike, Nestle, Kraft, General Mills, Kellogg’s, Nike, Adidas, Levi’s, GAP, Kimberly-Clark, Disney, and GE–among the many!

The most successful brands of this era inspire, engage, motivate, empower, and drive business and brand value by innovating with sustainability in mind. They embrace the future by acting as a platform for positive change, striving to impact our world as never before. And as a result, their consumers–as well as their employees–feel empowered to truly act upon their values and not just give them lip service. But to accomplish this marketing dream, your company’s business plan needs to be rooted in sustainability, and your brand’s message genuinely aligned with your cause.

A concept inherent to the Latino culture

During the past few years, multicultural marketers has been scratching their heads trying to figure out the magic message formula that will resonate with their ethnic consumers, to truly engage them and ultimately create strong emotional ties. But it may just be that the answer doesn’t lie in a bilingual TV spot nor in the colors of the talent’s wardrobe, but in a deeper understanding of the Hispanic community’s social needs, and in a genuine effort to address and fulfill those needs; an effort to improve the lifestyle of the Hispanic communities. And I can’t think of a more engaging approach than looking closely at the deepest values and beliefs inherent to the Hispanic culture.

Sustainability is a naturally-occurring characteristic of the Latino culture 

Latinos are highly committed to their community, and passionately embrace the causes that support one another within their respective communities. And this community-supportive attitude has existed within most Latino sectors since long before “sustainability & CSR” became hot topics in the US. This is exemplified by the Latino Community Foundation, a group which for nearly 20 years, has embraced the vision of “Latinos helping Latinos.”

There are clear and indisputable connections between CSR and Latinos. The Yankelovich MONITOR Multicultural Study conducted in 2010, discovered that roughly one-third of Hispanic consumers are more likely to choose brands and companies that support the causes they believe in and the communities in which they live. The same 2010 research indicates that 62%of Hispanics agree that there is an extremely small number of brands and companies that truly care about the state of their communities.

Action is not enough. Make sure you communicate it succinctly.

CSR can be a brand’s most effective strategy in gaining a competitive edge. By building social responsible, consumer-facing brands, marketers can provide real distinction. But to compete and ultimately win, brands need to generate sustainable innovation quickly and communicate it effectively, and that communication needs to start from within.

According to a recent article published in Sustainable Brands, “research shows that employees increasingly seek affiliation with organizations that reflect their values and that highly engaged employees outperform their disengaged colleagues by 20 – 28%” (Conference Board, 2006).

However, sometimes the brands with the highest sustainability scores have relatively low perception scores. This suggests that the corporation’s sustainability activity may not be “consumer facing.” 

But why not look at this as an opportunity to improve perception through increased consumer-facing product innovations and improved communications?

Consider this highly effective approach:

• Identify what (other than your product/service) is most important to your ideal customer–and then focus on it. Direct every activity toward delivering that customer’s priority outcomes. In short, make your costumers’ priorities the pillars of your marketing strategy and of your message’s portfolio.

• Add social benefits to your brand’s promise . . . and deliver!

• Raise awareness from within. (Companies must engage their own employees first–and then reach out to the consumer.) This means not only communicating your “purpose” to them, but explaining what their brand ultimately represents. Employees must be motivated to live and breathe what your/their brand is all about.

• Stay consistent and innovative–and never waver. (Deliver the message everywhere–even in your company’s Christmas dinner napkins!)

• Watch the front line. Make certain that every interaction with a customer–or potential customer–reiterates what your brand is all about.

• Be genuine and project honesty. Today’s consumers are savvy enough to know when a brand is being deceptive or condescending.

Where the Latino’s heart hurts, and how brands can heal and engage it?

The two primary socioeconomic issues that affect US Latino communities are immigration and education. There is not much marketers and brands can do about the first one, but they can certainly affect the latter. (It is not a coincidence that so many companies have already directed their CSR efforts toward the Latino education cause.)

Although Latinos are by far the largest minority group in America’s public education system, they have the lowest high school and college completion rates of any cultural or ethnic group.

And despite recent advances in educational attainment, reports from the US Census Bureau reveal that serious discrepancies persist when Hispanic educational levels are compared to otherethnic groups. And there’s more to consider:

• Only about half of Latino students earn their high school diploma on time.

• Those who do complete high school are only half as likely as their peers to be sufficiently prepared for college.

• Just 13% of Latinos have a bachelor degree.

• Only 4% of Latinos have completed graduate or professional degree programs.

Some of the many brands currently responding to the Hispanic market

• As part of the platform Live Positively®, the Coca Cola Foundation contributes $300,000+ to HSF (Hispanic Scholarship Fund) for scholarship and retention programs.

• MillerCoors is the founding corporate sponsor of the Adelante! education program and now provides $200,000 annually to fund education support, leadership development, and internship opportunities to deserving Hispanic/Latino students.

• Since 2007, the Staples Foundation for Learning continuously collaborates with the Hispanic Heritage Foundation towards the foundation’s Hispanic Heritage Teacher Award, which honors teachers throughout the United States who have had a positive impact on the lives of children in Latino communities.

• In 1985, McDonald’s founded HACER, a fund that provides scholarships to Latino students who otherwise would no be able to further their education. To date, HACER has awarded more than $20 million in scholarships to nearly 14,000 Hispanic students.

• Western Union developed a community relations campaign aimed at bridging the cultural gap. The campaign is called “¡Sí! Western Union Helps Make Dreams Come True.”

• Macy’s supports the Hispanic Scholarship Funds’ goal of increasing the number of Hispanic college graduates.

• Gillette’s Venus razor brand (P&G), is launching a new scholarship program for young Latinas through The Venus Goddess Fund for Education–the brand’s commitment to empowering women through education.

• AT&T, through the HSF/AT&T Foundation Scholarship Program, assists students of Hispanic heritage, dependents of AT&T employees attending two-year or four-year colleges to obtain a degree.

The paradigm-shift

Branding has changed a great deal since companies’ sales were driven by the promise of instant personal gratification and “ego-feeding” messages. The greatest paradigm-shift of this era is driven by the new generation of consumers with “values-aspired” mindsets who embrace brands that deliver the total package: products that work well, cost less, last longer, and compliment their overall lifestyle by creating richer and more balanced social capital.

All of the above suggests that marketers who truly want to engage Latinos through a sustainable effort should shift their focus from Hispanic “ad work” to Hispanic “community work.”

Ivonne Kinser is a marketing consultant for corporations and advertising agencies. Her 18+ years experience encompasses some of the best known advertising agencies such as Lintas, T:M Advertising (McCann Erickson), and The Richards Group in Dallas; and her brand experience includes brands such as American Airlines, The Home Depot, Metro PCS, Unilever and Hyundai, among many others.

Sources: http://hispanicad.com/cgibin/news/newsarticle.cgi?article_id=320, • http://bit.ly/AjU5pI, • http://mwne.ws/xm4dpc, • http://bit.ly/wbhsgo, • http://www.HSF.net/innerContent.aspx?id=102, • http://www.slideshare.net/ikinser/winning-the-future-by-improving-latino-education, • http://bit.ly/8aYovt, • http://bit.ly/xEhl7O, • http://bit.ly/Ab92L5, • http://bit.ly/A6Vf3e, • http://bit.ly/zOLOkb, • http://bit.ly/xBnWGP, • http://bit.ly/zQl2R3, • http://bit.ly/yTwdNwhttp://bit.ly/x5DDgy

 

No one could deny at this point that we have arrived at an unprecedented stage where globalization is making the world “one large market”.  Companies worldwide are recognizing the need to “globalize” their business models in order to grow.

Within the global marketplace, Latin America is in the crosshairs of many global companies. Below are five reasons that make the region a no-brainer for companies considering new markets to expand their businesses.

1) An Economy Racing Ahead

According to the World Bank the economic growth in the region will likely outpace the expansion in the Euro area, Japan and the U.S. through 2012. It’s simple; Latin America is in a growth stage where many developed countries are still recovering from the economic impact. The region’s middle-income and lower middle-income classes are enjoying the benefits of improving credit conditions1, which represents a huge opportunity for global companies to partake from the benefits of this “consumer boom” that translates in bigger markets for everything, from high-price items, to snack-foods and even pay-TV channels.

A great example of the region’s economic recovery is Brazil, the 7th largest economy in the world and the largest in the region with a 2010 GDP of  $3.6 trillion2. Over the past 10 years the per capita income of the bottom 10 percent of the population has been increasing at very high rates, (7% a year), well above the national average, placing Brazil’s economy ahead of Britain and France earlier than predicted by Goldman Sachs3.

According to the expert’s predictions, the economic growth in Latin America will continue to proceed at multiple speeds in 2011 with continued growth dynamism, especially in the pro-market democracies such as Brazil, Peru, Chile and Uruguay. There’s definitely a positive momentum building in the region. While it hasn’t reached its peak, this is the perfect time for anyone with good products and a good marketing strategy to step in and win.

2) An almost 600 Million People Market4Organized in Four Trade Blocs

Although the entire region is comprised of 20 countries, all of them, (except Cuba), have joined one of four trade blocs:

•    Mercosur5: Argentina, Brazil, Paraguay, Uruguay and Venezuela, (special member)

•    Andean Community of Nations6: Bolivia, Colombia, Ecuador, Peru and Chile, (associate).

•    Central American Integration System7 (SICA): Costa Rica, Guatemala, Honduras, Nicaragua, El Salvador, panama, Belize and Dominican Republic.

•    Mexico is part of NAFTA8, which includes USA and Canada.

This relatively recent integration of the region represents major efficiencies for U.S. companies looking into international expansion.

Tapping – not only into a 600 MM people market – but having the possibility to do so through only four main channels and in two languages, (Spanish & Portuguese), is a very enticing proposition for any company looking forward to embark in an international expansion journey.

3) An enormous Import Potential

Latin America is the fastest growing U.S. trading partner9 and this growing curve started more than 10 years ago. Between 1990 and 2000, total U.S. merchandise trade with Latin America grew by 219% compared to 118% for Asia.

Today, imported products ranging from smart phones to medical gear to drill bits are coming into the region in larger volumes on international flights. In fact, many airlines are adding cargo capacity in Latin America confident that total freight revenue in the region is increasing10. A good example is UPS, which recently increased its weekly schedule of Boeing 757 freighter flights to Bogota Colombia to meet increased inbound demand there for imports.

According to Tom O’Malley (Miami-based vice president of UPS air cargo operations in Latin America), in 2010 the carrier saw a 46 percent growth in kilos, year over year, compared to 2009, and continued growth is expected in 2011.

In 2010 the U.S. exports to Brazil alone, supported more than 250,000 jobs in the U.S11.Clearly, a market big enough to catch the attention of U.S. manufacturers.

4) A millionaire e-commerce business that’s booming

Technology has dramatically changed the way the international development game was played in the past. Until recently, retailers have looked at international e-commerce expansion as an “all or nothing” proposition.  As e-commerce reaches critical mass in the region – especially in Brazil – the decision to expand internationally leveraging this technology is something definitely worth it to consider.  A good example of this opportunity is the service offered by Miami Beach-based SafetyPay12, a global online payment system, and the only one within its business model that enables Latam customers to shop online in U.S websites and pay directly through their online banking account in their local currency. This global provider of Internet payment solutions has established agreements with banks across Latin America so the customers’ cash goes into a SafetyPay account, which pays to the merchants with its own credit, while sharing a fee with the bank. The golden opportunity for U.S. retailers that choose to leverage this technology to open markets in the region is Brazil.

Let’s start by highlighting the enormous potential of the Latin America’s giant: in the first two months of the 2011, Brazilians spent $2 billion overseas – a 33% increase from the previous year – and the country e-commerce numbers are no less impressive. Brazil represents more than half of the region’s retail e-commerce with only 34% of the total Internet users. If all of the above isn’t enough to entice U.S. retailers to jump into the Brazilian e-commerce extravaganza, on March 2011 the local government increased the tax13 on what Brazilians buy abroad to a 7%, which becomes “zero percent” when they purchase U.S. products, (in their country and in their local currency), through companies like SafetyPal.

As an example of the magnitude of this opportunity, the country’s consumer electronics market was estimated at US$26.6 billion in 2010 and is expected to grow 11 percent to US$36 billion by 201414.

5)Remittances15: An additional $58.9 Million Purchasing Power

Measured in U.S. dollars, money transfers made by Latin American and Caribbean migrants to their countries of origin reached $58.9 billion in 2010. Mexico is the largest remittance-receiving country in the region -with over $23 billion- and Brazil remittances from the U.S are approximately $2.7 billion per year.

If you think that only money transfer businesses can tap into the billionaire remittance business, think again. Any company in almost every industry category could offer solutions to allow U.S. Hispanics to satisfy the needs of their loved ones in their countries of origin, and therefore, to enjoy a piece of the remittances’ succulent pie. A strategic partnership with any of the global players in the remittances or banking industries would become very important to any U.S. manufacturer interested in leveraging this lucrative money-transfer dynamic.

For all the reasons mentioned above, and many more, global companies around the globe – regardless of market sector or product category – have been increasingly enthusiastic about expanding their businesses in Latin America, and they have experienced the rewards of their growing strategy. Although we can count them by hundreds, here are five of the lucky ones… or should I say “some of the wisest ones”?

  • Groupon16

The daily deal sensation companyturned its attention to the budding e-commerce market in Latin America and acquired Chilean deal site ClanDescuento. More expansion in countries such as Argentina, Mexico and neighboring countries are also on the Groupon road map.

  • Google17

The search engine giant launched its Latin American division in Brazil in 2005, opened in Argentina in 2006 and now it is focusing an unusual amount of attention on Central and South America since revenue from the region surged 80 percent last year, outpacing every other market.

  • Amper SA18

Spain’s leader information technology company is buying Miami’s eLandia International, (with a portfolio of more than 3,000 business customers in 17 markets in Latin America, the Caribbean and the South Pacific and $367,000,000 revenue in 2010), to expand its reach in the fast-growing market of Latin America.

  • Harley-Davidson Motor Company19

The U.S. motorcycle maker will open a Latin American regional headquarters in the Miami area to seize the great deal of opportunity for the brand in Latin America that posted nearly 6 percent economic growth in 2010, led by booming Brazil.

  • Wal-Mart20

The U.S. retailer giant, is planning a massive expansion in Latin America this year with a 1.6 billion investment in 6 countries across Mexico, (365 outlets), and Central America (80 new stores), as an addition to the 1,743 stores that it already operates in Mexico and the 551 outlets in Central America.

This comes on the back of a massive investment for the opening of 275 units in Mexico and a $1.2 billion investment allocated to its expansion in Brazil.

Ivonne Kinser is part of American Airlines Marketing Solutions. A newly created group that operates under the Marketing Organization and is in charge of developing innovative marketing strategies and platforms to integrate other brands with the American Airlines’ experience.

For the past ten years, Ivonne has served as an Account Director for Richards/Lerma & The Richards Group in Dallas, TX, have led the international marketing efforts for one of the largest trade show management companies worldwide -The Market Center Management Company- and managed the American Airlines advertising efforts in 19 countries throughout Latin America while at T:M Advertising in Dallas, TX.

Sources: 1- Latin America improving credit conditions http://on.wsj.com/i9kCjD, 2- Brazil economic growth/ 2010 GDP http://1.usa.gov/grWLVf, 3 Goldman Sachs http://bit.ly/ib8jvm, 4- Latin America Population http://bit.ly/hrSSy8, 5-Mercosur http://bit.ly/dT2YmL, 6- Andean Community nations http://bit.ly/eBFdhE,7- (SICA) http://bit.ly/hUEkkP, 8- (NAFTA) http://bit.ly/eXOxau, 9- Latam exports http://fpc.state.gov/6122.htm10- Latam cargo growth http://bit.ly/eYUhLU, 11-Brazil (U.S. jobs)  http://bit.ly/g7kcug, 12-SafetyPay http://bit.ly/dXn8rj, 13-Brazil Tax increase http://on.wsj.com/iccAef, 14- Brazil consumer electronics market http://bit.ly/hUofZO, 15-Remittances http://bit.ly/fUG0cm, 16-Groupon http://bit.ly/h68ZDl, 17-Google http://bloom.bg/fvqnkh, 18-AMPER SA http://bit.ly/f3m5w9, 19-Harley-Davidson http://bit.ly/i81mlX, 20-Walmart http://bit.ly/hkmkBN.