Local Concept's Michael Cardenas explains why marketers should localize their material for the growing Hispanic market -- within both North and South America.
It has become painfully clear that the U.S. economy has not rebounded as expected, and the dollar is not performing well. Across the sea in Europe, things don't look a heck of a lot better. Growth has quite frankly stagnated. And it seems that Japan has yet to wake up from a period of dormancy that began back in 1998. The buzz around the IT industry has now turned to China -- the place to see and be seen.
But as usual, the most obvious hot spot is right under our own noses -- the sleeping giant known as Latin America.
While the United States and other western markets are expected to grow about six percent annually, International Data Corporation (IDC) sees Latin America's growth rate averaging 16 percent annually. It's anticipated that some of those countries may even grow as much as 20 percent per year.
How is this possible? Growth rates for most Latin American countries are more dynamic given the low saturation point for PC and PDA (personal digital assistant) products, for example. Businesses are more conscious of the benefits derived from an implementation of specialized applications, and local firms are taking advantage of this trend. International software publishers like IBM, Sun, Oracle and Microsoft understand the opportunities that await them in the southern American market and have jumped on them.
Yet there are some key differences between Latin America and other countries that most likely account for their ability to grow quickly. Project sizes tend to be smaller, and the intense scrutiny from U.S. headquarters that requires a quantifiable ROI (return on investment) argument as part of the sales process is not always given the same degree of attention in this region. However, providing an ROI argument can provide significant advantages to software publishers who go to the trouble to provide one. Most companies buying software in the region will tend to look to industry-specific solutions, and thus ROI becomes a very important factor. They seem to have a "sink or swim" attitude towards doing business. In many cases, the best way to market vertical software in the region is through industry, as opposed to using IT consultants.
The most attractive markets today are Brazil, Mexico and, to a lesser degree, Argentina and Colombia. For the software industry, there is a serious need for companies that offer complimentary services that can help them grow. Services like -- localization.
Take Brazil for instance: the biggest population, the greatest area, and the largest and most diverse industrial base in Latin America. Brazil is not only an attractive market, it is also an excellent launching pad for products and for exporting from Latin America.
Latin Americans in the United States
Interestingly enough, few companies are distributing the Spanish version of their localized products in the United States. Although the U.S. Hispanic purchasing purse equals USD 428 billion a year, and the U.S. Hispanic market is the fifth largest in the world, most companies prefer to sell their products only in English. Many of these same companies create a localized product for the Latin American market, but don't include U.S. Hispanics. This may be because there are few talented Hispanic advertising agencies or localization companies headquartered in the United States.
The convergence of localization and advertising for the U.S. Hispanic market brings together two distinct needs -- education and motivation. Localization companies have experience in helping consumers use products. Branding and advertising appeal to the consumers' emotions and provide a call to action: "Get up and buy now! After all, you need it!" Very few companies have the experience in both venues. It's a lot of work with a lot of risk that might not be well compensated -- at first.
For those interested in targeting the U.S. Hispanic market, there are some general marketing strategies to consider. You're selling to a culture, not selling a language, and this culture thinks differently than the general market. The United States is constituted by Hispanics who speak only Spanish, Hispanics who speak only English but talk, walk and think like Hispanics, and the bilingual (but English-dominant) Hispanics.
A successful Hispanic marketing strategy will cross-pollinate its message in both English and Spanish. The U.S. Hispanic market is more open to using English terms, such as "voicemail," because they hear these words in English with greater frequency. Another reason is that the longer Hispanic Spanish-dominant speakers stay in the United States, the more comfortable they become using English words.
Basic cultural differences among Hispanics
Contrary to the reputation that precedes Hispanic males via macho stereotyping, the husband is not, and I repeat not, the final decision-maker in the family (I hope my wife is not reading this). Hispanic families are matriarchal, that is, the wife has the final say while the man pounds his chest, stomps his feet and says, "I'm in charge." He is for all intents and purposes, a "paper tiger." My point is this: the women are making the majority of the buying decisions.
Another cultural difference can be found in religion. In the United States, it has become politically incorrect to send Christmas cards stating "Merry Christmas." We create generic, made-up terms, such as "Happy Holidays." For most Hispanics, the meaning of December 25 is highly religious. Our firm once worked on an advertising piece for MBE (MailBoxes, Etc.), which was going to be used in the United States and all Spanish-speaking countries in Latin America. We had to fight to be able to use the word "Christmas" in Spanish, since the campaign was going to be used in the United States as well.
The client wanted to increase packaging and shipping sales. The problem was that most Hispanics don't trust the mail (sorry, United States Postal Service) because the mail in their country is basically distributed sporadically, i.e., when the mail carriers get around to doing it. Hispanics, unlike Americans, consider that much of the thought behind a gift is in its packaging. Our Hispanic campaign focused on providing a sense of security that their precious gifts would be delivered safely and on time, and that they would be handled as if they were packaged and sent from home. This particular project was a great example of how important it is to weave cultural differences into a strategy for this particular market.
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