Commentary

Different Approaches For Entering The Hispanic Market

Entering the U.S. Hispanic market for the first time can be an intimidating endeavor. Particularly for brands that are pioneers in their category (e.g. pharma, investment services, etc.). In addition to being intimidating, it has historically been an expensive endeavor, focused on TV or radio advertising in Spanish, requiring significant investments for both creative and media purchases.

However, complexity and significant costs are no longer a requirement for entering this market. With its growth, the expansion of digital opportunities, and more sophisticated and cost-efficient research choices, brands have many more encouraging options for entering the Hispanic market.

In 2017, there are broadly four approaches, or models for entering — or re-entering — the Hispanic market. These approaches are expansive, and there is a great deal of variation within each model including duration/flight, number of tactics, and cost. Also, it’s important to note that these four models are applicable to new product/service launches, targeting new consumer markets, or entering a new geographic market, region or country, not just the Hispanic market.

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Market Research and Strategy

This is the most historically common and popular approach used by larger brands and established companies. It involves conducting secondary research, syndicated and/or primary research to determine if there is a Hispanic market opportunity and if so what is looks like. This approach culminates with the development of a formal Hispanic marketing strategy to define target audiences, product/service mix, tactical approach and measurement. Research and Strategy is often used as an initial step before launching a pilot program for a full launch described later.

Digital Pilot

This is one of the newer models available for entering the Hispanic market. It involves focusing on digital channels only, such as display advertising, social media, and search engine marketing to determine if a market exists for a brand. A digital pilot is typically used in lieu of any formal research and strategy, and the marketing itself is used as a form of research (e.g., message testing using multiple banner ad executions or paid search ads). The biggest benefits of a digital approach are cost, speed to market, and targetability. A brand can launch an inexpensive test in a few weeks targeting a well-defined Hispanic segment interested in its product/service and find out quickly if it worked.

Test Market Approach

This is another well-established model that involves identifying one to three test geographic markets to launch an integrated advertising program including both traditional (TV, radio, OOH, print) and digital advertising. I provided an overview of ideal Hispanic test markets in a previous article. This approach provides a more robust “test” of what the effects of a larger — potentially national — Hispanic marketing program might be. Markets like Atlanta, San Antonio and Fresno, California are popular Hispanic test markets.

Big Launch

This is just what it sounds like — a big launch into the Hispanic market across markets, media and channels. The centerpiece of the Hispanic market big launch is Spanish-language TV advertising, typically on one or both major Spanish television networks. The “Big Launch” is expensive and takes a lot of time. Producing an original Spanish TV spot will require four to six weeks. While I am not a huge fan of this approach — Big Launches often result in big failures — it’s still common.

Different Approaches For Entering The Hispanic Market

Model

Pros

Cons

Investment (avg. range)

Good fit for:

Market Research & Strategy

  • Limited investment
  • Speed to market
  • Can be non-conclusive

$50k-$200K

  • Large companies, brands
  • CPG, pharma

Digital Pilot

  • Cost
  • Speed to market
  • Targeting
  • Ability to test message
  • Not effective for all categories (e.g. CPG, services)
  • Not effective in brand awareness

$75k-$150K

  • Digital-brands
  • Good for direct response 

Test Market Approach

  • Most robust test 
  • Provides most conclusive results
  • Cost
  • Time to market

$100k-$150k (per market)

  • Speed to market
  • Can be non-conclusive
  • CPG, retail, QSR, financial services

Big Launch

  • Can lead to large results
  • Speed to market
  • Significant cost
  • Limited “testing”

$300k+

  • Re-entry into Hispanic market
  • Latin American brands
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