Multicultural marketing strategy by michael

1
MulticulturalMulticultural
Marketing Strategy:Marketing Strategy:
The Asian SegmentThe Asian Segment
Prepared by Michael Hong
June 2010

2
The Diverse Nation
U.S. is one of the most diverse population in the world
• Ethnicity, Language groups and Race attribute to diversity
• Diversity is increasing rapidly across the nation
• 18% of US population speaks a language other than English

3
Market Over View
General Market is already Multicultural
• One third of US population is Hispanic, Black or Asian
segment
• Hispanic and Asian are the fastest growing segments
US Census 2000

The Forgotten Market
Multicultural segments purchased 24x more than the total amount purchased
through online retail space, however, the media spending on multicultural
market is less than a half of the online market.
$10.7 trillion purchasing power from the multicultural segment in 2008. $10.7 trillion roughly translates to 18.5 percent of all U.S. buying power(GDP) where $913B for African American, $951B for Hispanic,
and $509B for Asian. Since retail spending is about one third of the purchasing power, multicultural market retail spending can be estimated to about $3.5 trillion. On the other hand, in 2006, E-commerce
product sales totaled $146.4 billion in the United States. Nielsen reports that in 12 month period of July ’08 to June ’09, total advertising spending for combined Hispanic and African American, not including
Asian American, is about $7.3 billion which is 4.6% of total media spending in the US. About the same time, digital marketers spent about $16billion or 10% of total US advertising spending.

5
Part I : Asian
Market
Cultural Insight

Why culture matters?
Culture is a DNA that distinguishes how the
target thinks, say and does.
Effective marketing begins with understanding
how the target thinks, say and does.

Cultural Dynamic
MeltingMelting
PotPot
SaladSalad
BowlBowl
Diversification
Assimilation
Peoples from various cultures
come to America and contribute
aspects of their culture to create a
new, unique American culture.
People retain unique aspects of their cultures
that are identifiable within the larger
American society, much like the ingredients
in a salad are still identifiable, yet contribute
to the overall make up of the salad bowl.
Need to Fit In
Need to Stand Out
Culture of society and individuals continue to change over time. The evolution of life stages,
lifestyles and life trends impacts both long term and short term marketing plans.

Source: Hofstede Dimensions
The cultural difference manifest through, symbols, heroes, rituals and values
where values are the deepest DNA of mental map that drives cultural
behavior.
Symbols: Visual/verbal icons
Heroes: Role Models
Rituals: Collective Activities
Values: Belief System
Evil vs. Good
Decent vs. Indecent
Forbidden vs. Permitted
Natural vs. Unnatural
Normal vs, Abnormal
Irrational vs. Rational
Ugly vs. Beautiful
Cultural System

Cultural differences can be measured in 5 different bipolar dimensions.
Marketing Communication should relect accordingly.
Power Distance
Uncertainty Avoidance
Individualism Collectivism
Masculinity Femininity
Long vs. Short -Term
Cultural Dimensions

Cultural Differences
China Korean Japan Vietnam India Philippines USA Mexico
Large/Small Power
Distance
80 60 54 70 77 94 40 81
Strong/Weak Uncertainty
Avoidance
30 85 92 30 40 44 46 82
Individualism/ Collectivism 20 18 46 20 48 32 91 30
Masculinity/ Femininity 66 39 95 40 56 64 62 69
Long/Short term
Orientation
118 75 80 80 61 19 29 29

Power Distance
A degree of acceptance and expectation that power is distributed
unequally.
Hierarch Equality

Power Distance
Large power distance Small power distance
China, Vietnam , India , Philippine Japan and Korea USA and European countries
Might prevails over right: whoever holds the power is right
and good
The use of power should be legitimate and is subject to
criteria of good and evil
Power is based on family or friends, charisma, and ability
to use force
Power is based on formal position, expertise, and ability
to give rewards
Less powerful people should be dependent on the more
powerful; in practice, less powerful people are polarized
between dependence and counter dependence
There should be, and there is to some extent,
interdependence between less and more powerful people
Teachers are expected to take all initiatives in class
Teachers are gurus who transfer personal wisdom
Teachers expect initiatives from students in class
Teachers are experts who transfer impersonal truths
Both more and less educated persons show almost
equally authoritarian values
More educated persons hold less authoritarian values
than less educated persons
Wide salary range between top and bottom of
organization
Narrow salary range between top and bottom
The ideal boss is a compassionate autocrat or good
father
The ideal boss is a resourceful democrat
Centralization is popular of organization Decentralization is popular of organization
Subordinates expect to be told what to do Subordinates expect to be consulted

Large Power Distance
Dimensions Marketing Implication Segment
Large
Power
Distance
(Status)
In the past, social status was defined by birth, caste, family position or
profession. In modern society, social status is defined by economic power
for the most part and it is prominently displayed through personal
possessions such as luxury houses, cars and designer items.
Fact:25% of traffic to luxury brand website are consist of Asian American
Chinese,
Vietnamese ,
Indian , Pilipino
Japanese and
Korean

This dimension measures how much members of the culture define
themselves apart from their group memberships.
Individuality Conformity

USA China, Korea, Vietnam, Philippine
Identity is based on the individual Identity is based in the social network to which one
belongs to (School, company, profession, religion etc)
Everyone is expected to have a private opinion Opinions are predetermined by group membership
Consumption patterns show self supporting lifestyle Consumption pattern show dependence on others
Task prevails over relationship Relationship prevails over task
Everyone has right of privacy Private life is invaded by groups
Individual contribution important to Teamwork Team accomplishment prevails over individual
Media is the primary source of information Social network is the primary source of information
Low Context Communication; Favor content over
context. In other words, they expect their words to be
interpreted literally without regard to situational or
relational circumstances. Feel that getting things done
relies on following procedures and staying focused on
the goal.
High Context Communication; Favor context over
content. In other words, their actual message is often
quite different than the literal words they use and relies
on situational and relational circumstances. Feel that
getting things done relies strongly on relationships with
people and attention to group process.

Collectivism
Collectivism In collectivism, information from reliable friends and family members has
higher believability. Building personal relation is the key. Grass root and
sales agent based marketing works well. Free product trial could
formulate opinions that may be pass through the word-of-mouth.
Generate positive opinions from the influencers and channel the buzz
through social media network.
Facts: Other than twitter, Asian Americans are over indexed in many social
media space. 3 out of 4 uses social media.
Chinese,
Vietnamese ,
Pilipino and
Korean

Femininity Masculinity
This dimension measures the value placed on traditionally male or female
values. The assertive pole has been called ‘masculine’ and the modest,
caring pole ‘feminine’.

Korea, Vietnam Japan, Chinese, Philippine, USA
Dominant values in society are caring for others and
preservation
Dominant values in society are material success and
progress
Both men and women are allowed to be tender and to be
concerned with relationships
Women are supposed to be tender and to take care of
relationships
In the family, both fathers and mothers deal with facts and
feelings
In the family, fathers deal with facts and mothers with
feelings
Sympathy for the weak Sympathy for the strong
Both boys and girls are allowed to cry but neither should
fight
Girls cry, boys don't; boys should fight back when attacked,
girls shouldn't fight
Friendliness in teachers appreciated Brilliance in teachers appreciated
Stress on equality, solidarity, and quality of work life Stress on equity, competition among colleagues, and
performance
The needy should be helped The strong should be supported
Dominant religions stress the complementarities of the
sexes
Dominant religions stress the male prerogative
Women's liberation means that men and women should
take equal shares both at home and at work
Women's liberation means that women will be admitted to
positions up till now only occupied by men

Femininity Focus on people and Stir their emotion
Warm , Caring, Emotional, Down to earth, Spiritual, Social
Korean,
Vietnamese
Masculinity Focus on performance and Excite their five sensors
Fun, Humor, Confident , Facts, Logical, Exaggeration, pride
Japanese,
Chinese,
Pilipino
2002 World cup in Korea Making fun of Tiger Wood

This dimension measures how much members of a society are anxious about
the unknown, and as a consequence, attempt to cope with anxiety by minimizing
uncertainty. (Strict vs. Flexible code of conduct)
Uncertainly Avoidance is not risk or fear avoidance. It’s degree of people expressing emotion or anxiety outwardly.

Strong Uncertainty Avoidance Weak Uncertainty Avoidance
Japan, Korea, China, Vietnam, USA, Philippine, India
Acceptance of familiar risks; fear of ambiguous situations
and of unfamiliar risks
Comfortable in ambiguous situations and with unfamiliar
risks
What is different, is dangerous What is different, is curious
Many and precise laws and rules Few and general laws and rules
Aggression and emotions may at proper times and places
be ventilated (Korean Drinking culture)
Aggression and emotions should not be shown
Belief in experts and specialization Belief in generalists and common sense
Family life is stressful Family life is relaxed
Emotional need to be busy; inner urge to work hard Comfortable feeling when lazy; hardworking only when
needed
There is only one Truth and we have it One group's truth should not be imposed on others
Scientific opponents cannot be personal friends Scientific opponents can be personal friends
In shopping, search for purity and cleanliness In shopping the search is for convenience
Hesitant toward to accepting new products New products are subject of test
Appeal of expertise in advertising (Give facts and
figures)
Appeal of humor in Advertising

Strong UA Popularity and familiarity helps choosing a product. Spokes person or
expert ease the uncertainty. Higher price means higher quality. Avoid
controversial topics. Brand plays a bigger role.
Ie T-Mobile 11% ATT 22% Verizon 54% (Korean)
Japan,
Korea,
Weak UA Willingness to try new product. Innovative feature captures people
attention. Highlight common sense. Unique Selling Points to focus on
convenience and comfort. Higher price does not means higher quality.
Humorous ad is well received. Price plays a bigger role.
Ie T-Mobile 34% ATT 40% Verizon 14% (Chinese)
China,
Vietnam,
Philippine,
India,
USA

Long/Short term orientation
“Making the children
feel good and gain
their love”
“Contributing to their
children’s education
and financial situation”

Long/Short term orientation
Long term Orientation Short term Orientation
China, Vietnam, Japan, Korea USA, Philippine
Persistence , Perseverance efforts toward slow results. Effort should produce quick results
saving, being sparing with resources Social pressure toward spending
Respect for circumstances Respect for tradition
Concern with personal adaptiveness Concern with personal stability
Willingness to subordinate oneself for a purpose Concern with social and status obligations
Having a sense of shame (Humbleness ) Concern with face
Focus on Virtue Focus on Truth
Life time career path Opportunistic career path
Investment in real estate (Saving for future) Small savings and little money for investment
Leisure time is not important Leisure time is important

Long term orientation
Dimensions Implication Segment
Long term
orientation
Focus on virtue, hope, endurance, sacrifice, vision
Long term financial investment and preparing children for the future are
the priorities in life.
China,
Vietnam,
Japan,
Korea

Conclusion
Culture is a DNA that distinguishes how the
target thinks, say and does.
Effective marketing begins with understanding
how the target thinks, say and does.

27
Part II: Asian Market
Marketing Strategy

28
MM is Segmentation Marketing
Multicultural Marketing is Customer Segmentation Marketing
• It is to reflect changes of demographics, socioeconomic and ethnicity of the US
population.
• Traditional mainstream or “mass” marketing no longer provides the most
effective or efficient approach to reach increasingly fragmented audiences.
• With improvements in data base technology and multicultural media, marketers
are enabled to target the specific segment efficiently and effectively.
• In addition to age, gender and geographic location, marketers are now capturing
language preference and cultural affiliation to maximize segmentation
opportunity
TargetingFragmented
Market
Homogenous
Market
Demographics
Ethnicity
Socioeconom
ics
Segmentation

29
In-language as Strategy
Retail
Face2Face
Telemarketing
CareOnline
Advertising
A brand should speak the customers’ language, celebrate their lifestyles and respect
their cultures. An in-language capability should serve not only as a communications tool
but also as an intricate part of the marketing strategy.

30
Strategic Approach to MM
“… sell a single customer as many products as possible - over a long period of time,
and across different product lines.”
Peppers, Don & Martha Rogers, Ph.D.,
The One to One Future: One Customer at a Time.
New York: Doubleday, 1993
Market Driven
Product Focused
Homogenous Market
Mass Advertising
Market Share
Brand Driven
Customer Focused
Segment market
Database / Direct
Share of Wallet
Selling a
single
product to
multiple
customers
Selling
multiple
products
to a single
customer
VS.

31
MM Marketing Process
Product
Lifecycle
Management
Customer Contact
Management
ITM, OTM
Web, Retail, AS
MM and Sales
Management
Segment P&L
Communications
Programs
Multicultural
Marketing
Communications
Mass Ad, DM , Online & PR
Database
Management
Database
Management
Target Segment
Market Research
Multicultural Marketing is not limited to creating culturally sensitive advertising. Rather,
it is about creating a business process by managing the brands, products, customer
relationships and sales channels that are effective and relevant to the target segment.

32
MM Strategic Framework
How to
communicate
Where to find
the target
Role of your
brand
Who the
target is.
Targeting Multicultural segment requires considerable knowledge of demographic,
culture, behavior around your brand and access to communication channels.

Communication Strategy
Event
DM
Mass
Web
PR
Retail
Direct
Target SalesTarget Sales
Sales EffortSales Effort
Brand BuildingBrand Building
To deliver the target sales, all sales and branding effort must work together.
Optimum media mix is imperative at all brand funnel levels.
AwarenessAwareness
FamiliarityFamiliarity
ConsiderationConsideration

34
MM Branding Strategy
MM is not about creating a unique brand positioning within individual segment rather
it is to reinforce and unify a single brand strategy through multilingual/cultural
communications that are relevant to the target segment
MM is to change or reverse any undesirable brand image to a desirable brand that
will attribute maximum market opportunities
WH
BL
TargetTarget
BrandBrand
PositioningPositioning
KO
CH
AI
HS
Unified
Brand
effort
In-language
effort

Moment of Truth
Website Retail
Sales PersonServiceAdvertisement
To build memorable and meaningful brand experiences, managing the MOT is an
imperative marketing process. MOT experiences are high at the retail level. Ideal MOT
strategy reflects cultural insight about the target segment.

36
Executive Summary
1. Today, most marketers believe that multicultural market has become too big to simply ignore.
Hispanic, African-American and Asian now constitute one-third of the total US population and
command purchasing power of $10.7 trillion. General market is already multicultural.
2. Multicultural Marketing is an extension of segmentation marketing. It is to reflect changes of
demographics and life styles of US population. Multicultural Marketing is not limited to creating
culturally sensitive advertising rather it is about creating a business process through managing brands,
products and sales channels that are effective and relevant to target segment.
3. Asian customers are heavily dependent on in-language. 80% of Asian customers order services
through in-language sales reps. Purchase decision is heavily dependent on information acquired
through word-of-mouth from in-language speaking friends and/or Asian sales reps. Inaccurate or
misleading offer information creates undesirable brand/product positioning, customer dissatisfaction
and reduces customer loyalty.
4. Asian segment is highly educated, tech savvy and upwardly mobile. The market is ideal to promote the
latest technology and premium services or goods. To attract Asian segment, leverage culturally
relevant product benefits that are unique as the main differentiator.
5. We can developed a marketing strategy that could immediately generate a new revenue opportunity
for the brands challenged with new growth area. We will help the general marketer to win the Asian
market in a speedy and cost effective manner through both traditional and alternative sales channels.

Michael Hong Marketing Consulting
Michael is a Senior Marketing Management professional with exceptional skills and experience in e-
Commerce Marketing. Michael has 20 years of marketing and marketing communications experience
at corporations such as AT&T and LG Electronics. He is a creative marketer and a thought leader in
digital marketing and multicultural marketing industry. He spoke at numerous conferences such as
Internet Retailer and the eM9-Marketing Conference.
Specialties: Advertising Strategy, Planning and Execution, Digital Marketing (SEO, SEM, Social
media, Word-of-Mouth), Direct Marketing, Multicultural Marketing, B-B Marketing
Education: Cornell University, Ithaca, New York
B.A. 1985 School of Art, Architecture and City Planning
2 Brookstone Dr. Boonton Twps., NJ 07005 (C) 201 841 9659 njmikehong@yahoo.com
Thank You

Multicultural marketing strategy by michael

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