 |
| | | | | REPRINTS
|
Courting Youth
Automakers bet on young Latinos to drive future sales. Though purchases so far are few, it's never too early, they say
July 18, 2005
By Luis Clemens
Scion, Toyota's youth-obsessed automotive brand, is as relentlessly hip as is humanly possible for a hunk of machinery powered by fossil fuels and manufactured by a multinational corporation.
Scion cultivates an image of cool by promoting itself at nightclubs, distributing CDs recorded by its own hip-hop label and by deliberately featuring a mix of young African Americans, Asian Americans and Latinos throughout its advertising. Unlike many other automotive brands, there is no direct sales pitch to Hispanics. The indirect pitch to young Latinos, in fact, is cosmopolitan, not ethnocentric.
The urban youth market and its crucial Latino component are hot and the subject of much excitement and increased marketing efforts by automakers. Yet Latinos ages 18 to 34 bought far fewer vehicles in 2004 (202,438) than they did in 2000 (243,180), according to Michigan-based automotive research firm R. L. Polk. The 6.8 percent annual growth in the Hispanic new-car market is driven by those ages 35 to 54 who bought significantly more vehicles in 2004 (565,765) than in 2000 (475,841). Overall, Latinos of all ages were responsible for 8 percent of all new vehicle sales, and if you add in used cars, according to another company's estimates, they spent $163.5 billion last year.
Although many product marketers struggle to determine how to reach both younger and older Latinos, nowhere else are the financial stakes as high and the competing strategies as stark. Says Carl Izzi, senior vice president and group account director of GlobalHue, the multicultural advertising agency of DaimlerChrysler, "You have to pay an awful lot of attention to that [more mature Latino] consumer buying your car today. At the same time, you have to pay equal attention to that young Latino buyer." Izzi, who drives a Grand Cherokee, stresses, "If that [young] group doesn't favor your client's brands in 10 or however many years, there will be a big impact on the bottom line."
Young buyers have become increasingly more important to automakers, even though they still don't account for a sizable portion of car purchases. There are indications that this demographic may soon start buying more vehicles because of earlier and greater access to easy credit combined with new spending patterns. Market research firm Synovate recently compiled a report about young consumers they labeled "gold collar" as opposed to "blue collar" laborers or "white collar" professionals. These disproportionately African-American and Hispanic consumers are said to spend an above-average percentage of their income on expensive products such as automobiles.
TOYOTA TAKES TWO APPROACHES
F. Scott Fitzgerald once wrote: "The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function." In that case, Toyota's approach to Hispanic marketing is either brilliant or the sign of a split personality. The Japanese automaker — which in 2004 surpassed Ford as the most popular automaker among Hispanics making new vehicle purchases — actively and aggressively markets the Corolla and five other brands using two opposing routes. Toyota claims its success with Latinos is based on 16 years of Hispanic marketing efforts produced by a single agency, Conill Advertising, yet the carmaker's Scion division does not have a Hispanic advertising agency nor a Hispanic marketing campaign. While Conill emphasizes the cultural uniqueness of Hispanics, Scion marketers highlight the supporting role of Latinos in a much larger and diverse youth market.
"Our target audience is multicultural by its very nature," says Dawn Ahmed, Scion national sales promotion manager, who drives a Toyota Scion xB. She is referring to the various estimates that suggest nearly 40 percent of the U.S. population under 30 belongs to a racial or ethnic minority.
For his part, Land Rover driver Will Travis, president of Scion's creative agency of record, Attik, says, "We make it culturally colorful to everyone. You do have to have sensitivities to different races, different cultures. What annoys me is when you see agencies that [target] the African-American or Hispanic market agencies and they put out crap advertising."
That doesn't mean Travis, a native of Manchester, England, discards the role of cultural influences. "Sure, everyone has cultural weaknesses," he says. "I like fish and chips."
REACHING 'FILTER GENERATION'
Music is the unifying force of Scion's marketing. The brand sponsors up to a hundred events each month, many taking place at nightclubs where the signage is low profile and compilation CDs from Scion A/Z, the brand's hip-hop label, are typically handed out for free. Through online campaigns, Travis says Attik strives to provide "an honest representation of personal taste. If you like punk, there is punk. If you are goth, then there is goth." He says these efforts are necessary to get through to what in Europe is referred to as the "filter generation" because they are adept at filtering out uncool and unwanted messages.
The median age of Scion buyers is 29, and on the strengths of last year's sales of 99,259 cars, the brand can be judged to be a modest success. In January, Scion projected this year's sales would be a respectable 120,000 units. In June that figure was revised to 140,000, and it could have gone higher if the company had fully anticipated consumer demand. At this point, Toyota simply cannot build Scions fast enough. Toyota spokesperson Ming-Jou Chen says, "We didn't imagine they would take off that quickly."
Teri Hill, car advertising manager for Toyota, who sits behind the wheel of a Toyota Highlander, stresses the importance of snaring the first-time buyer. "People who buy Toyota are loyal, and we have a better shot at retaining them [for their next purchase]."
Hill oversees Conill's efforts to promote five of Toyota's car models, but not Scion. When asked to reconcile the two very different Hispanic marketing approaches, Hill responds, somewhat tersely, "They are two very different products."
Toyota Camry driver Carlos Martínez, executive director of Conill's Los Angeles office, believes in the benefits of a Hispanic-centered approach even with young U.S.-born, English-dominant Latinos. "The environment is multicultural, but there are some things that tie these Latinos ... together and make them a group [distinct from the rest of the multicultural market]," he says.
Martínez uses the Chupacabras and La Cucaracha to make his point. He believes the mythical goat-sucking monster of Latin American folklore and the crippled cockroach of the eponymous Mexican song are symbols that appeal to young Hispanics, but not young African Americans or Asian Americans. The Chupacabras is one of three characters in a recently released online video game designed to promote the Toyota Corolla among young Latinos. A remix of the La Cucaracha tune is free to download on a Toyota-sponsored, bilingual music site, matrixmusica.com, which Martínez says provided sales leads.
When it comes to Hispanic marketing, the difference between Scion and the rest of the Toyota brands is the belief that young Latinos respond more readily to a pitch that features Japanese anime and the Gorillaz than one that features the Chupacabras and La Cucaracha. But what makes the two opposing viewpoints most interesting is that they are espoused by the same company.
FORD AND GM PICK UP THE PACE
The other automakers are not simply sitting on the sidelines. Ford was the most popular car brand among Latinos through 2003. The company achieved this without advertising in video games or offering free downloadable music, and Japanese anime was never featured in any Hispanic campaign.
The carmaker has always been a strong supporter of Hispanic advertising and product integration on Spanish-language television. "Currently 91 percent of Hispanics watch Spanish-language television, therefore we need to be in broadcast and be big in that area," says Mary Lou Quesnell, Ford's director of marketing communications, and the driver of the distinctly American Ford Mustang. Zubi Advertising COO Joe Zubi agrees, saying, "Spanish-language television is still the king." Joe Zubi, by the way, drives both a Ford Thunderbird and Lincoln Navigator.
There is nothing regal, though, about the state of Ford's and General Motors' finances. It is no secret that both companies are going through a rough patch with credit ratings downgrades, declining popularity among Hispanics and an overall reduction in car sales. "No te voy a mentir," says Sonia Green, GM's director of diversity marketing and sales. "We are hurting." Green, who drives a Chevy Tahoe, links the importance of a rebound in the Hispanic market share to the company turnaround. Ford and GM need sales now. GM has gone so far as to extend its employee discount to the general public as a quick sales boost, a strategy that produced a dramatic 41 percent increase in sales for June, compared to the same period last year. The employee discount was promoted in the Hispanic market, but the number of Latino buyers will not be known for a few months. In general, though, the impact was so spectacular that Ford and DaimlerChrysler also have decided to extend their employee discount to the public, with the exception of purchases for a few of their most popular models. Toyota says it will not offer similar discounts.
GM's best-selling car among Hispanics is the Chevrolet Silverado. (The company has already posted a 69 percent increase in overall sales as a result of the employee discount.) Green says GM focused on the question, "How do you create newness and cachet around this truck?" The answer was placing it in the context of a longstanding Latino tradition. GM's Hispanic agency, Accentmarketing, produced an ad showcasing three decades worth of customized Chevrolet Silverados before introducing the newest model. The tagline "Sigue la Leyenda" (the legend continues) firmly placed the car model within a longstanding tradition of Silverados modified by Latinos and converted to lowriders.
For lowrider fanatics, it was a beautiful commercial. GM aired the spot in Spanish during the World Series, which Green says sparked a small number of "pretty harsh, pretty crude comments." The harshest words, though, may be from shareholders demanding a rapid turnaround. The June sales figures produced only a 2 percent increase in the price of GM shares due to concerns that heavy discounting will dent profitability. Even so, DaimlerChrysler's financial recovery is being touted as a model for the other two of the Big Three. After a few rough years, DaimlerChrysler has expanded its product line and focused on innovative design and marketing.
Fred Diaz, the director of Dodge marketing communications and the driver of a Dodge Durango, is willing to keep people guessing. When it comes to print advertising and catalogues, he deliberately seeks out models that look ethnically and racially ambiguous. "We want a Hispanic individual to pick up a catalog and ask, 'What is that guy? Is he African American? Is he Puerto Rican?' "
But, when it comes to regional differences, Diaz has a clear-cut view: A Tejano is a Tejano is a Tejano. He proudly recounts a Dodge truck ad featuring Flaco Jimenez, a famous Tex-Mex musician, filmed for the Texas regional market. The commercial was shot in both English and Spanish, which is Diaz's standing rule for the Dodge ads. The ad shows Flaco playing the accordion and features two young vaqueros. The idea was to hit a younger and older demographic at the same time by using a regional cultural touchstone.
VW HITS THE ROAD WITH NEW ADS
A cultural misunderstanding by Volkswagen's general-market agency led to a decision to hire a Hispanic agency. It is a shopworn story, but Daniel Marrero, co-head of the Miami-based CreativeOnDemand (COD), believes the story reflects an important truth. In Marrero's retelling, the slogan created by Arnold Worldwide for the general-market campaign "Drivers Wanted" was poorly translated for use in Spanish-language media as "Se busca choferes."
He says, "[It] was being taken literally as a want ad. That ignited the review."
After winning the account three years ago, Marrero, who drives a VW Tuareg, says one of the first challenges was "to come up with a line [in Spanish] that reflected the essence of Volkswagen" but didn't conflict with the aura of Drivers Wanted. The solution was "Agarra Calle," a nifty adaptation that roughly translates as "Hit the Road."
COD targets young Latinos by purchasing full-page ads in the yearbooks of a few heavily Hispanic high schools. Volkswagen has a stand-alone Spanish-language Web site (agarracalle.com) for older foreign-born Latinos. It also regularly produces Spanish-language commercials that air on both Hispanic and general-market stations, the latter during programs such as The Simpsons that have large Latino audiences. Marrero says the viewer response has been positive.
Curiously, even though COD got the account thanks to a cultural slip-up and creatively engineered a culturally specific adaptation of a successful slogan, Marrero somewhat downplays the relevance of uniquely Hispanic concerns. "Hispanics don't live in a vacuum. We live obviously as much in English as Spanish," he says. "Sure there is Hispanic insight, but there are a lot of human truths, just universal truths."
HONDA, NISSAN CREATE NEW WAVE
Among Latin Americans, soccer may be the closest thing to a universal truth, which explains why Honda is a charter sponsor of Major League Soccer and a sponsor of the Chivas USA soccer team. Barbara Ponce, Honda's manager of emerging markets advertising, says, "The support from the community that this team gets is unlike any I have ever seen." The arrangement with Chivas USA was well planned, but one of the most positive developments with the Honda brand and U.S. Latinos was a complete surprise.
There has been an explosion of Honda Civic "tuners" who enthusiastically customize and retrofit their cars with a full range of accessories. "We didn't do it. Our customers did it," says Ponce, who drives a Honda Pilot.
Oscar Orozco is a customer service rep by day and Civic enthusiast most of the rest of his time. He is president of a car club named Devious, which meets Saturday evenings in the parking lot of a Taco Bell in Altamonte, Calif. A few years ago, he bought a used Civic for $8,000 and has since invested another $10,000 in accessories, modifications and paint jobs. "I kind of see it as a way of expressing yourself through your car. ... It is a good feeling modifying the Civic."
Ponce says Honda is staunchly supportive of the customization segment of the market and believes it is one of the keys to the youth market. Even though the personalization of vehicles by Latinos is nothing new — for instance, lowriders have been around for several decades — the current wave is widespread.
"Customization is just a result of a lot of things," says Fred Suckow, director of marketing for Nissan North America and the driver of a Nissan Armada. "We design our products to be real expressive with breakout design and performance. A vehicle is a personal expression." Not surprisingly, Nissan has an elaborate and intensive relationship with car club members.
"We use them as a sounding board," Suckow says. "Typically, we share a little information inside the ropes. Send over the engineers, the product planning team to talk to them. Share some creative."
In return, Nissan gets constant feedback and design input for future models. Suckow believes the new Nissan truck would have been nowhere near as successful if it had not incorporated specific innovations suggested by car club members to company designers and engineers. The idea is to tie customers closer to the vehicle by investing them with a collective ownership of the brand. In other words, this two-way, car club/car company relationship makes it harder to switch to another automotive manufacturer. And that is the goal of all automakers.
The wide variety of Hispanic marketing campaigns in Spanish and English speaks both to the willingness of automakers to experiment and to their huge pocketbooks. As GM's Green says, "We spend plenty of money."
Plenty of money is being spent on varied pitches to a growing market made up of distinct segments. The full impact of young Latinos on the auto industry is still several years away, but consider 29-year-old Oscar Orozco as a glimpse into the future young car buyer.
Born in L.A. to Mexican parents, he has yet to buy a new vehicle. Yet Orozco's passion for his tricked-out, bright yellow '98 Honda Civic shows how serious he will be when purchasing a brand-new car. "I am proud of my car," he says. "It is my baby."
|
| | | | | REPRINTS
Copyright 2007 Marketing y Medios |
|
 |
|
 |
|
|
|
QuickLinks:
1-click access to topics in this article.
|
|
|
|
|
|
ADVERTISEMENT
|
|
|
