BUILDING BRANDS THAT CROSS CULTURAL BARRIERS: ENTERING THE

HISPANC MARKET WITH A GENERAL MARKET BRAND

A Masters Project Presented to
The Graduate Faculty of Fresno Pacific University




In Partial Fulfillment of the Requirements
for the Master of Business Administration: Global Business Degree




By
Sara Mendez
March 21, 2012


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Accepted in partial fulfillment of the requirements for the Master of
Business Administration: Global Business Degree at Fresno Pacific University.



___________________________________
Committee Chair

___________________________________
Committee Member

___________________________________
Dean, Graduate School of Business



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Permission to reproduce this thesis in its entirety must be obtained from the
author.

___________________________________
Signature

___________________________________
Date

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ACKNOWLEDGEMENTS

I would like to thank the staff of Univision in Bakersfield, California, for
their assistance during this study, as well as everyone who took part in the
studies. I would also like to thank my husband Robert, and my two children,
Aydin and Blake, for all of the love and support they have given me since I began
this long journey. They have helped make this experience a wonderful one. To
my family, I love you with all my heart. To all of the professors throughout the
MBA program, thank you. Your encouragement and continued support was very
much appreciated.



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I grant Hiebert Library permission to make this thesis available for use by its own
patrons, as well as those of the broader community through inter-library loan.
This use is understood to be within the limitations of copyright.



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Signature

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Date
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ABSTRACT
Brand value is a quality that companies use to cause consumers to
purchase a product, as well as set the value as to what people are willing to pay
for that product. Brand value is important because it sets the value of the
company and the overall success of the brand. Appealing to consumers' values,
beliefs, cultural relevance, and tastes create this value. Because these values
and tastes differ within cultures, specifically within the Hispanic culture, it has
become increasingly difficult for brands to successfully cross cultures and
maintain value between Caucasians and Hispanics. Brands must reflect a
detailed list of values before they can effectively cross into the Hispanic market.
The research in this study sets out to find what items are in the specific list
that companies must use in order to create a brand image that can cross and
appeal to both cultures simultaneously. The study focuses on three main areas:
how brand value is created, what consumers and Hispanic consumers value, and
how to create and manage brands based on these diverse values from the two
cultures: general market and Hispanic.
This study will be conducted in Bakersfield, California. The primary
research will include feedback from Hispanic women, who will provide responses
to questions on various values in brand decision-making. The conclusions will
determine what factors must be used and considered in order to have a brand
successfully enter the market, using secondary data and a qualitative survey
analysis.


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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................. vii
CHAPTER 1: INTRODUCTION ..................................................................... 1
Background...................................................................................................................1
Case for Further Research.3
CHAPTER 2: REVIEW OF THE LITERATURE ............................................. 6
Why is Brand Value Important..6
Why People Buy What They Buy13
How is Brand Value Created...16
What do Hispanics Value.29
CHAPTER 3: METHODOLOGY...........................................41
Introduction.41
Statement of Purpose...41
Research Question...42
Research Design...42
Setting.44
Data Collection Methodology..44
Analysis Method45
Limitations of Data Collection Plan.45
CHAPTER 4: CONCLUSIONS AND ANALYSIS OF THE DATA47
Survey Results.. ...47
Soft Drinks..47
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Automotive.49
Beer.52
Cheese55
Make Up.57
Banking...59
Conclusions65
REFERENCES.70
APPENDICES..72


1
CHAPTER 1: INTRODUCTION
Background
Branding is an integral part of marketing and product success, which has
become more difficult to manage and develop with the advancement of
globalization and the increased number of cultures in the United States. A
brand is a name, symbol, design, or mark that enhances the value of a product
beyond its functional purpose (Crimmins, 2000, p. 136). Brand equity, as a
term, emerged in the 1980s and has been of interest ever since (Walgren, 1995).
Brands represent a product or a company and show the public who they are and
what they do. A business and its products are created to fill a gap in a market
and provide consumers a solution to something or provide a functional purpose,
meaning that consumers purchase products because they fulfill a need. By
having a brand with meaning, companies create something bigger than just a
functional fulfillment; they create something people want to use because of its
value and meaning: its brand. According to Kellogg School on Marketing (2010),
the purpose of business is to create a customer, and the goal is to influence how
those customers will behave. It is not easy to accomplish this task, and most
companies fail in trying to do so. The cost of bringing a new brand to a market is
estimated at roughly $100 million, and 50% of brands fail almost immediately
(Walgren, 1995). However, for those that have value, they have the potential to
increase profits by millions or billions of dollars. For example, for Quaker Oats, in
1991, the retail value of the product was estimated to being 3,000 times higher
2
than the price of its main ingredient. Why would people be willing to pay a higher
amount for that product? Brand names add value. Brands or brand equity is
perhaps the single most important asset that marketing contributes to a firm . . . it
is the extra profit earned by a brand over and above what it would have earned
based on its search attributes (Goldfarb, 2009, p. 69). Brands (and brand
equity) are identified as market-based assets and as sources of competitive
advantage (Bahadir, 2008, p. 51). According to Gobe (2009), consumers are
driven for a variety of reasons, including phase of life, experience, religion,
values, beliefs, and culture.
Knowing what brand value is, and that it is very important, the quest of this
thesis was to find out what makes people buy and use what they do, and how
that plays into their decision-making. Once these items are known, then the
difficult question of how to create a brand that crosses successfully into the
Hispanic market must be answered.
What do people value that causes them to find importance in a product,
which results in the decision to make a purchase of the product? And if those
values differ by culture, then how does one create a brand that is successful in
both the general market and the Hispanic market? These are the questions this
thesis has set out to answer. It is known that people make decisions based on
what they value and that these values differ by culture, among other things. So
what tool kit can be provided to ensure success when creating a brand that will
cross cultures?
3
Case for Further Research
Many companies originating from the United States have found success
and high profits by appealing to baby boomers, generation y, generation x, and
now the new up and coming generations. But what many have found is that since
the late 1990s, there has been a large shift in both the population and the
generations within the population. These shifts include a downsizing life stage
baby boomer population, unemployed y and x generations with the 2000 decade
recession, and a new generation that people are terming generation,
pronounced (en-yay), which describes what is now the Hispanic population in the
United States (Gobe, 2009).
The Hispanic population is now the largest minority group in the United
States. The population accounts for up to 60%, in many cases, especially in the
top five largest Hispanic populated states, including California, Florida, New
York, Arizona, and Texas (Census, 2010). Bakersfield, California, falls into this
densely populated Hispanic market, where many brands are advertising and
entering the market every day. What many companies do, which is more and
more common, is to take the brand and its general market meaning and simply
translate the message to Spanish and call it a Hispanic brand.
There are many reasons this tactic simply does not work. Sometimes it is
a translation issue, such as the Chevy Nova (or in Spanish, The Chevy No Go),
or the Got Milk campaign, Tienes Leches (or in Spanish, Are you lactating?). Or
sometimes it can be offensive, such as Columbia coffee, showing a Hispanic on
the can label, working the fields or Chevy showing their cars all going to a soccer
4
field during the 2010 World Cup, alluding to the fact that all Hispanics play
soccer. Sometimes it is a religious offense or value issue. Sometimes it is the ad
vehicle chosen to communicate to Hispanics; for instance, using local
newspapers to send coupons versus direct mail, or using a Puerto Rican
dominant TV network versus a Mexican dominant TV network. For these reasons
and more, brands fail crossover every day into the Hispanic market. Does it
mean that there is not a market for that brand, or does it mean it simply did not
cross over properly by appealing to specific values? Research suggested that it
is the latter. Done properly, brands can find huge successes by reaching out and
capturing the loyal Hispanic buying market. Companies such as McDonalds,
Coca Cola, Macys, Toyota, and Pizza Hut have all reaped the benefits of
crossing over successfully. So what is the tool kit? What is it that companies
must consider before entering the Hispanic market with a brand to ensure
success? And what is it that can make or break the brand image in each
market?
This research study, through the use of secondary data and exploratory
and causal research, sought to define those very questions and provide a
framework for what companies can use to determine the qualities a brand must
possess and display in order to appeal to the Hispanic market and still be
recognizable by brand in any language or market. Secondary data analysis
reviewed what brand value is, why it is important, showcasing its effect on
businesses, how it is created in the general market, based on what people value,
and what Hispanics value that differs from the general market. Once these
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foundational areas were outlined and the answers were revealed as to what
people value within the two cultures, general market and Hispanic, as well as
how brand value is created, primary research was used to develop the
framework for what companies can use as a tool kit to successfully reach the
Hispanic market by creating a bicultural brand. In this study, there were 18
carefully chosen Hispanic women who participated in the research surveys,
answering questions on what they value in brands, how they feel about specific
brand examples after being shown logos, and how those feelings changed,
based on different image perceptions provided. The data collected were
interpreted and analyzed to draw conclusions, developing the ground theory to
predict and explain these behaviors. This created the tool kit that companies can
use to ensure success with a bicultural brand for the Hispanic market.








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CHAPTER 2: REVIEW OF THE LITERATURE
Why do people say I want a Coke when they mean they just want a
soda? Or why, when someone is crying, do they say, Heres a Kleenex when
they really mean tissue? These are both examples of strong brands that have
been built so well that people now recognize the brand name itself as covering
the entire product category. When the general public wears clothing with a RL on
it, or a polo horse, people automatically know that the consumer paid extra for
that brand recognition. It is the same reason that many women pay extra for a
purse with Cs all over it, because it shows status, much like driving a BMW or
Mercedes over a Nissan or Toyota. The value of brands can mean big things for
companies, shareholders, and consumers. What brands signify has already been
covered, but why are they so important? What is their real impact on a company?
Why is Brand Value Important?
As used as an example above, Coke has done an exceptional job at
maintaining brand value and creating a successful brand worldwide. Sergio
Zyman (as cited in Young, 2010), former Coca-Cola chief marketing officer who
helped boost its worldwide annual sales volume from 9 billion to 15 billion cases,
famously defined marketing as selling more stuff to more people more often for
more money more efficiently (p. 52). He argued that brands should always be
working to attract new customers, and advertising is one great way of doing so.
Young (2010) explained that though price cuts and promotions can move
products temporarily, it is building a brand that creates value for a company on a
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long-term scale. He used the following example: if Apple were to discount their
iPhones 50%, they would undoubtedly sell more products without even
advertising the discount. But to be able to get more dollars for a product, relies
almost entirely on differentiation, and thats where branding comes in. People will
pay more for Nike, Apple, or BMWs, even though they might perform no better
than similar products, because they are perceived as being different and better
(p. 53). In this way, brand value is important because it can be used to get more
money for a product.
Another example of why brand value is important applies when talking
about market share. Brand attachment is something that occurs when a
consumer forms a bond to a specific brand and becomes very loyal to the
product of a certain brand. When this occurs, competing brands will be less
likely to be regarded as substitutes (Park, 2010, p. 5). On the heels of share
comes stock market values and recognition. According to professors at both
Indiana University East and Mississippi State University, brand familiarity is one
component of a brand that affects consumer decision-making. According to these
analyzed studies, purchase behavior is very much impacted by the consumers
familiarity with a brand and recognition of that brand. Through further studies, the
professors also found that brand familiarity also influences a brands
performance in the stock market (Sundaram, 1999, p. 664).

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Commitment to an individual brand results from the perceived value. The
greater the value found in a product the better the chances that preference for
that brand will survive lower prices of competing products (Crimmins, 2000, p.
141).
A brand's value means more profits for companies. According to a study done
in the late 1990s, brand names sell for 30% higher than store brands, on
average. This is because consumers are willing to pay more for a brand name
that they are familiar with than less for a brand of which they are not sure
(Ailawadi, 2001). Sometimes this percentage can be even higher, as previously
shown with the Quaker oats example, where consumers are paying 3,000 times
the cost of the basic ingredient of oats for that product because of its name.
Customers are willing to pay a higher price for a brand name product and are
more loyal to the preferred brand. Price premium and brand loyalty are important
drivers of financial brand equity (Fischer, 2010, p. 826). For example, if Sony
flat screens were 75% off, it would get attention, but when Apple launches a new
product creates instant consumer interest. Why? It is because there is brand
value in Apple. Another example is from the British chocolate company, Cadbury.
The company aired a campaign that included a gorilla playing the drums to the
Phil Collins song In the air tonight and it became a viral sensation, getting more
than ten million plays on you tube. Consumers saw this and bought the candy
bars (Young, 2010).
Other times that brand value plays a large role in companies is in mergers
and acquisitions. For example, Philip Morris acquired Kraft for $12,9 billion; four
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times its book value. Why would a company do that? When asked, Philip Morris'
CEO Hamish Marshall (as cited in Bahadir, 2008) said, The future of consumer
marketing belongs to the companies with the strongest brands (p. 49). Bahadir
(2008) further explained that brands each have their own potential for generating
future cash flows as a result of differences in brand factors. Brand value has
come to play a large role in deciphering the value of major corporations around
the globe.
One of the best examples of successful brands is Coca Cola. In a seven
million dollar neuromarketing study, with nearly 2,000 volunteers, Martin
Lindstrom found out why people choose Coke over Pepsi, even when they liked
Pepsis taste better. The answer is riveting. When people drink Pepsi, the part of
the brain that likes flavors and tastes lights up and goes away when the taste is
gone. When the respondents drank a Coke or were just shown the brand's logo,
the part of the brain that is used to store photos of family, friends, and memories
lights up and lasts far longer than when Pepsi is consumed. The brand has
formed associations with consumers to family, friends, and being meaningful to
them. They call this the cokeness of the brand (Lindstrom, 2008).
Corporate identity programs are the expression of a corporation's culture,
personality, and products or services it has to offer- the very symbol and
signature of the values that should inspire trust with consumers, employees,
clients, suppliers, and the financial community (Gobe, 2009, p. 125). Logos and
colors, according to Gobe (2009), have become a major part of branding
strategies. For example, Mercedess three-pointed start logo is not only seen as
10
a guarantee of superior engineering but also acts as a signature of high value
and translates to a sign of good taste and status (p. 125). Gobe (2009) went on
to describe other brands that have done well in creating global brands, such as
Ralph Lauren (appealing to the American way of life), Nike (breaking barriers by
advertising to women), Virgin Atlantic (promoting more fun), and Gap (being first
to appeal to peace and love in the brands jeans). He said, Ralph Lauren
personally introduced a level of pride into American fashion that eventually
wooed the world ( p. 130). One element by which brands have been able to set
themselves apart by using is status, according to Gobe (2009). The image and
notion of status have catapulted businesses to success, he argued. For example,
Gobe (2009) mentioned the use of models for Ralph Lauren and Revlon (for
people to now associate with the brand), or Victorias Secret, when light pink,
feminine colors with stripes and a heart symbol were used to crystallize the
whimsical, romantic character of Victorias Secret (p. 153). Gobe (2009)
explained how Victorias Secret has moved with the times and has stayed in
business by advancing the brand into the new age. He also used the Victorias
Secret Fashion Show as one highly successful form of brand management.
Sometimes creating and finding value in a brand has nothing at all to do with
the product itself. For instance, when Corona was first introduced into the beer
and bar market in the US back in the 1970s, it was not well received. It was not a
popular drink and was not ordered often. But, after two men in an east coast bar
one night decided they would require a lime with their Corona, as that was the
only way to drink a Corona, it became a staple that all consumers must have a
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lime in their Corona. J ust this simple trend, still with the brand today, has created
value for the brand. When people think of the Corona brand today, they think of a
beach and a lime (Lindstrom, 2008). Guinness, by the same token, struggled to
find a market, as the beer took too long for the foam to go down once it was
poured. But once the company figured out a stance to take for that issue, it
immediately became a beer of choice for those who needed something a bit
above a beer. Their tag line became, The right way to pour a Guinness (p.
89). The brand position was that this was a special beer that took time to pour,
took time to wait for, and was worth the wait.
Perhaps one of the most recognizable ways to create brand value or
understand how impactful a brand can be if consumers find that it has value is in
examining the success found in brands that have embraced product placement in
popular films and TV shows. For instance, in the movie ET, the little girl was
going to lay out M&Ms for ET to find his way home, but when M&Ms turned
down the product placement offer, the film company went to Hersheys, who
agreed to the endorsement and used their product Reeces Pieces in the film. A
week after the release of the film, Reece's Pieces' sales tripled, and within a
couple of months of the film's release, the candy was found in more than 800
cinemas around the country. Another example is for Ray Ban in the movies
Risky Business, Top Gun, and Men in Black II. In all three cases, sales of Ray
Bans increased, and the brand had timeless associations to mega film stars
looking good and sporting the plastic, fairly expensive sunglasses. Sales of the
glasses, just from the Top Gun release alone, sent the company soaring into
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40% increases in profits. After Men in Black II, sales tripled. The company stated
it was like getting $25 million in free ads (Lindstrom, 2008, p. 46).
Cause marketing is a new way for many companies to increase their brand
value and presence within the market. Many companies publicly support
charitable organization, these companies include Apple, Avon, Procter and
Gamble, Wal-Mart, Target, GE, Starbucks, Liz Claiborne, Toyota, Home Depot,
and Coca Cola, to name a few. According to consumer studies, 83% of
Americans have a more positive image of companies that support a cause.
Nearly two thirds of people say that when price and quality are equal, they would
likely switch brands to those involved with a cause, and 68% say they would
happily pay more for a product associated with a good cause (Gobe, 2009, p.
299). Marketing consultant J ed Pearsall (as cited in Gobe, 2009) stated, People
are telling us theyre tired of having advertising in their face. They want it to do
something for them. Marketing will become a field that solves peoples problems
(p. 299).
The last reason to note that brand value is so important, is that companies
can no longer rely on advertising to communicate who the company is and what
the company stands for anymore. In 1965 the consumer public had an ad recall
of 34%; in 1990 that recall number went down to 8%; and in a 2007 survey it was
discovered that the average person only recalled 2.21% of commercials they had
ever seen in their lifetime (Lindstrom, 2008).

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Why People Buy What They Buy?
People buy products and services for a variety of reasons. Sometimes
products are purchased for functional purposes only, such as milk, toothpaste,
and butter, while others are purchased for luxury use, such as clothing, jewelry,
or soda. The reasons people buy what they buy differ by usage needs, stage of
life, household needs, or because of values, cultures, religion, or beliefs.
One of the simplest ways for companies to give people a reason to buy their
product is from in-store advertisements, or invertising -- Ads that are directed to
people once they are inside the store. This tactic is aimed at creating
conversations in the store. This includes floor advertisements, displays, posters,
music, employee participation, and so forth. This is a tactic of which Pepsi has
done a lot (Young, 2010).
Another way companies sell products and build brand awareness and value is
through word of mouth (WOM). This is a very difficult element to use, especially
for new brands, as it is much more difficult to control. However, if WOM is used
properly and the communicated qualities are essential to the brand and match
what the company wants to be sent out, then it is one of the most effective forms
of brand building. WOM instills confidence, it's a personal stake, and it holds
increased perceived value, Word of mouth drives awareness (Young, 2010, p.
88). In a survey by Kantar Media, formerly TNS Media Intelligence, it was shown
that an advertising campaigns awareness among those who had generated or
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received brand word of mouth was 200 percent higher than among those who
had not generated any word of mouth (p. 90).
Brands that are relevant to the consumer will always find more success than
those that do not resonate with consumers as being relevant. Brands need to be
relevant to the customer to hold any economic relevance for the firm (Fischer,
2010, p. 823). A customers decision to purchase a product is important because
in a way they are representing the brand, which contributes to the function and
consumption of the product. A brand is seen as a way to reduce risk in
purchases. Buying a brand is buying what has been promised through
advertisements, packaging, and image. The quality, the assurance, and the
familiarity are what people buy in a brand. Buying brands is like buying down the
risk. Not everyone is risk conscious, but it is known that in the general U.S.
market, the older population has collected more consumption experiences
during their lifetime than younger people and place a higher value on continuity in
their decision making (p. 827). It is also known that men, according to research,
are also more risk averse than are women.
What people value and perceive as risk also differs by culture and region.
Research showed that countries and cultures differ in value systems. In looking
at Hofstedes value systems, it is clear how diverse country beliefs can be
(Fischer, 2010). For example, in the US, people emphasize individualism and
standing out, while in other countries and cultures, such as the Hispanic or
German societies, collectivistic ideas are more common, and people see things
as more of a team effort. This is just one of many examples of how cultural
15
differences play a role in decision making for consumers (Fischer, 2010). Brands
often help people communicate and differentiate themselves from others, while
they may also play a role in decision-making. Brands create trust in the
expected performance of the product and provide continuity in the predictability
of the product benefit (p. 826). There is also a social demonstrance function
that people use as a guide to buying brands that differs somewhat from the risk
reduction function. This function says that brands can represent intrinsic values,
such as self-expression, or even extrinsic values, such as prestige and status.
For instance, the younger consumer is still developing their professional and
social career so they are likely to value the social effect of brands (p. 827).
Fischer (2010) explained that people develop these values from experiences and
social interactions. He went on to explain, Traditions and cultural norms are
other important factors that influence the role of brands as status symbols (p.
826).
Overall, people value qualities in a brand for a variety of reasons. As a result
of the previously defined research, it is now clear that brand value is very
important and can impact the profits of a company. It is also clear that brand
value is based on qualities that hold value for people, which can be impacted by
different cultures. Some people value name recognition because they are risk
averse; some value individualism; some value status statements, quality, price,
and value in cost versus quality, recognition, endorsements and associations, as
was shown with Ray Ban and Reeces Pieces; or maybe people rely on what
others say, through strong WOM, or word of mouth, initiatives. The bottom line is
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that there are a number of reasons as to why consumers buy particular products,
and there are even more traits that play into what the market values in a brand.
So how is brand value created?
How to Create Brand Value
Creating brand value is a complex task that requires a lot of research and
information about the consumer target market and what they value before proper
development can begin. When evolving a brand and image for a product or a
company, it is extremely important to ensure that the traits given to the brand
include things that the consumer wants, not just what the company wants to see
in its own brand.
One of the common misconceptions is that branding refers to advertising.
While branding does relate to advertising, as advertising is often one-way that
brands communicate to the public, advertising is not necessarily branding. As
discussed in Advertising Age, branding efforts should start with the consumer,
not the advertising medium (Young, 2010). It is not the advertising schedule or
promotion that inherits brand qualities; it is the image that is portrayed through
the message, instead. The book argued there should be no more messaging to
an audience blindly, but rather an understanding of how consumers receive and
respond to the image a companys product is portraying. The starting point is the
consumer (Young, 2010).
What works and is valued to some is not necessarily what is valued by
everyone. Savings matters but only to some consumers, product quality matters
17
to those who are quality conscious consumers, entertainment is relevant to those
who enjoy shopping, exploration is for variety seekers, and self-expression
matters to very specific market segments. So if a brand has created value from
any of these characteristic traits and has created committed customers, the
likelihood of losing that customer becomes much smaller (Ailawadi, 2001).
The starting point for any measurement of brand value is the idea that
brands are productive assets for a firm, just as buildings and machinery are
(Goldfarb, 2009, p. 71). These assets are seen to have short-term hard costs, or
fixed assets, but have long-term benefits. For a brand to be productive, it must
be built, i.e. develop brand equity, a process that takes time and money (p. 71).
Goldfarb (2009) looked at brand value from a supply and demand outlook,
stating, On the demand side, it comes from the fact that an established brand
encapsulates all of the marketing that has gone on for the brand since inception,
plus all of the experiences that consumers have accumulated since the brand
was introduced (p. 71). As a result of these things, advertising, experiences,
and marketing efforts, a brand is now familiar to its consumer public. The
example used is from a survey on beer that was created to see what real impact
a branded beer had on consumers versus an unbranded or nameless beer. The
results showed that branded beer tasted 21% better when consumers knew the
brand versus when they did not know what they were drinking.
Cobb-Walgren (1995) discussed the five key elements required for creating
and maintaining brand equity. These include awareness, associations, perceived
quality, loyalty, and other proprietary assets, such as patents and trademarks.
18
This perspective is much more function and product focused rather than image
and creatively focused. Awareness speaks directly to the communication and
advertising efforts, associations are what consumers compare or associate with
the product, quality and loyalty are product built, and patents and trademarks are
noting the lack of competition by having a product that can not have substitutes.
Brands identify the source or maker of a product (Fischer, 2010, p. 826).
Consumers use what they know about brands, including the products quality and
specific characteristics, and then form expectations about the product, based on
the brand name. These characteristics are built from advertising, packaging,
public relations, marketing tactics, grass roots marketing, causal marketing, and
word of mouth.
There are two ends of the spectrum of branding: one is the corporate brand
strategy and the other end is the house-of-brands strategy. In the first strategy,
the company is using one brand name across all product markets, such as
General Electric, for example. The house-of-brands strategy are companies who
use different brands to serve different product markets, such as Procter and
Gamble who own a variety of companies, all of which operate under different
names, logos, images, and brands (Bahadir, 2008). Deciding which images to
take for a companys brand is extremely important when creating a marketing
strategy.
Once companies know if they are operating under one main brand or creating
separate brands for each focused product of the company, they must then
19
determine receptivity planning. There are five tactics in receptivity planning that
have proven to be effective: Contextual planning, situational advertising,
leveraging of target passion points, branding inside content, and tapping into
consumers relationships with media (Young, 2010). The tactics deal exclusively
with how to use media as a communication tool to get the message of the brand
across. Other forms of communication are now called invertising, or advertising
within an organization or to employees and those immediately surrounding the
company. This is one of the tactics that has helped Pepsi over the years expand
its message and image. The company used invertising to tell employees their
story. They used webinars, posters, floor and elevator decals, and place cards to
expand the brand's image internally. This was completely aimed at employees in
its head office in Purchase, New York.
Whether you are developing campaigns that drive conversations in social or
in traditional media, you need to start with an idea, a hook, something that is
worth talking about and sharing (Young, 2010, p. 100). All brand concepts start
with an idea that is then elaborated into an image. Developing consumer-driven
communications absolutely relies on collaborating and partnering ideas with PR
and creative or digital agencies (p. 100).
One of the most effective ways to create and manage a brand's image is by
appealing to consumers five senses: sound, sight, taste, smell, and touch. This
is not as simple as just providing the market with a product that makes noise, is
full of color, and smells like flowers. Knowing how different smells, colors,
sounds, and textures affect the consumer is important to managing the brand's
20
image. Gobe (2009) described specific direction on how to use the five senses
to leverage a brand to become more appealing. With regard to sound, he talks
about the fact that nearly 80% of consumers will buy a product more often if it is
accompanied with music they like. For example, when Southern Comfort began
advertising with music, sales jumped 112%. This is why companies such as
Abercrombie and Fitch use loud music to attract customers, and have been able
to show that their target demographic comes in, spends more money, and stays
longer because of the attractive music that appeals to them. It is not enough to
just play music; one must also know how to choose the right type. The tempo,
pitch level, and the amplitude modulation must match the type of mood the
company is trying to evoke. For instance, with a slow tempo, brands are soliciting
sadness, boredom, or disgust, whereas fast tempos make people feel activity,
surprise, happiness, pleasantness, potency, fear, or anger (Gobe, 2009).
Gobe (2009) expanded on the five senses by talking about visionary
branding, or branding with the use of colors. There are major meanings that must
be considered when designing any kind of ad, logo, or anything with which the
brand will be affiliated. Logos with colors will be the staple to a brand's
recognition for its lifetime. For instance, the golden arches that are very
recognizable, the red Coke can, or the black and silver sports teams. Color is
not about being pretty or aesthetic, color is about conveying crucial information to
your consumers (p. 79). The effects that color has on people also arise from
different backgrounds, acculturation, and physiology. Red is a stimulating color
that attracts the eye faster than any other color. Blue has been noted to lower
21
blood pressure and seems soothing, lowering both the pulse and the respiration
rate. Orange is friendly, pastel tints are gentle, yellow orange is welcoming, light
blue connotes calmness, navy blue symbolizes dependability, and gray is
professional and implies qualities of seriousness and anonymity (p. 80). Further,
companies must know who the target market is before selecting the look, color,
and logo for the brand. For instance, green in todays time is seen as being
environmentally friendly, but in Egypt green is the national color, and if it were
used on something that would be thrown away, it would be offensive. Another
example is white. White symbolizes purity in the United States, but in Asia it is
the color of mourning. Color perceptions are associated with age, social class,
gender, and religion (p. 84).
As Gobe (2009) elaborated on the five senses and how to determine which
qualities to pull from, he dabbled in the theory behind choosing tastes. There is a
reason that the high-end retail store, Nordstrom, has restaurants and espresso
bars in its stores. Selling and tasting gourmet coffees, Italian sodas, pastries,
salads, and sandwiches allow customers to spend more time in the store and
make them feel comfortable about spending more money. Today Costco, Kmart,
and many other national chains are adding restaurants or the optional purchase
of ready-made food in their stores, as it has been found to evoke hunger and
increased sales (Gobe, 2009).
When it comes to touch, the best example is Apple and its recent, out of the
box-marketing tactic, or inviting consumers into the store to feel, see, touch, and
experience the product first hand. This allows consumers to feel a connection
22
with the brand and the product and provide a more likely outcome for what they
will buy when it comes time to be in the market for their product.
Lastly, Gobe (2009) hit on the scent/smell sense. This, like color, is among
the most important when it comes to influencing consumer decision-making.
Some even argue that this is the strongest of the senses. Since the 1990s,
scented product sales have increased 30% annually. A study done at Duke found
that fragrances, regardless of whether theyre liked or disliked, improve the
mood, specifically of middle-aged women (p. 102). In another study it was found
that a more positive mood was reported by visitors in a bubble gum (odor)
condition compared with those in the leather or no odor condition. Visitors
exposed to incense odor reported that they had learned more from the exhibit
than visitors exposed to no odor (p. 102). Smell impacts learning, experience,
feeling about a brand or product, and overall emotion towards the brand.
Aside from appealing to the senses, there are many arguments over whether
or not strong ad campaigns are the solution to successful branding. Mega
Brands or Mega Spenders reviewed the argument on whether or not the largest
market spenders were also the producers of the largest valued brands (Shultz,
2005). The outcome, simply stated, is no, the largest spender is not always the
most successful brand. According to Schultz (2005), brand success should be
evaluated on profits, or earning power, not advertising expense. For example, in
2004, Advertising Age ranked their Top 10 mega-brands for the first half of the
year, which included Verizon, AT&T, Nissan, Chevrolet, Ford, Toyota, Sprint,
Cingular, Dodge, and Home Depot. Heidi argued that at the time she wrote the
23
article, AT&T was exiting the market, Home Depot was losing out to Lowes, and
the auto dealers were moving share around all the time. Instead, the brands that
hold the most value should have been listed, such as Coca-Cola, McDonalds, or
Apple. Another example of spending as an inaccurate representation of a well-
created and managed brand is from an article in the J ournal of Advertising that
analyzed a1990 study between the Holiday Inn and the Howard J ohnson. At that
time, The Holiday Inn spent $26.2 million and the Howard J ohnson spent just
$4.1 million. The results of a 1990 consumer report survey comparing the two
brands came out as follows: Holiday Inn Satisfaction Index was lower than
Howard J ohnson by one point; the two rated exactly the same in cleanliness, size
of room, bed comfort, climate control, noise, amenities, staff, food quality, and
pool (Cobb-Walgren, 1995).
Word of mouth, as mentioned earlier in the study, is one of the most
influential marketing tools. As Young (2010) explained, Word of mouth instills
confidence: many recommendations come from people you know, which reduces
the emotional risk of following a recommendation (p. 88). The other thing
created by word of mouth advertising is loyalty. Nothing creates loyalty like
advocacy (p. 88). Lastly, word of mouth increases perceived value. A person
who advocates on behalf of a product becomes more appreciative of the product.
This strengthening of perceived value translates into increased trial and loyalty
(p. 89). According to a list provided by Zenith Optimedia Global database, the
following are the top 20 most influential marketing contacts on purchase: friends
and family, aftersales service, colleague recommendation, specialist
24
recommendation, personal use of brand, brand received as a gift from a friend, in
store product tester/sampler, comparison websites, seeing others with the brand,
expert recommendations, independent reviews, free gift with purchase,
packaging, sales brochures/retailer catalogues, salesperson recommendation,
TV advertising, internet search, loyalty schemes, brand websites, and print
articles (Young, 2009).
Over the past couple of decades, product placement and endorsements have
become a major part of a brand's image. According to Young (2009), there are
five groups of influential people on brands. First, there are formal positions of
authority, who are political leaders and business leaders who communicate
through laws, regulations, decisions, and directives. These people are called
opinion leaders and decision makers. Secondly, there are recognized experts on
the subject, such as academic and consumer activists, who work through
journals, traditional media, new and social media, and are called experts,
analysts, and critics. Thirdly are the media elite, such as journalists and talk show
hosts, who speak through media and include columnists. Fourthly, there are
groups of cultural elite, including celebrities, designers, and musicians, speaking
through media and known as trendsetters. Lastly, there is a group known as the
socially connected. This group includes leaders, online networks, and business
networks, which communicate through relationships, email lists, social
gatherings, web, and social media. These people are known as mavens, starters,
connectors, soccer moms, and alpha moms (Young, 2010).
25
Nike has been seen as a premier marketer since the early 1980s when the
brand used a celebrity endorser, Michael J ordan, to reach young kids living in the
inner city or a leafy suburb. In 1988, the J ust Do It campaign sparked new
interest and an expanded rebrand. According to Nike's VP of Global Brand
Marketing, J oaquin Hidalgo (as cited in Young, 2010), Consumers dont want to
be told whats cool. People dont want more products, they want more
experiences (p. 18). Nike later used a variety of celebrity sports endorsers, and
has since seen profits and brand value soar.
In the early 2000s, product placement in television went to a whole new level
with the hot new reality start show, American Idol. This is a reality TV series
where contestants compete to become the next big star, and the winner of the
show gets a recording contract and money. Companies such as Ford, Coke, and
Cingular each spend $26 million per year on product endorsements within this
show. What are interesting are the results to the effectiveness of each
endorsement. The results of this study go back to the neurological study that
Martin Lindstrom did over the span of seven years. What he found was that
Coca-Cola was much more memorable than Cingular Wireless and far more
memorable than Ford. Why did this happen? Ford only had commercial spots
within the shows hour run, during breaks. Cingular was mentioned and shown
each time viewers were asked to vote. But Coke was in the show in front of the
judges throughout each show, the color red was on screen a specified number of
times per show, and the couches contestants sat on were in the shape and color
of a coke bottle. This amount of recognition and product placement resonated
26
much more in the consumers' minds of those who were watching the show. Coke
was visibly on the show at least 60% of the shows running time. What Ford got
from its sponsorship was decreased market share after year one (Lindstrom,
2009).
Other examples of product placement include political leaders, such as when
Michelle Obama went on the Tonight Show and mentioned her outfit from J .
Crew. Or when Comedy Centrals Stephen Colbert created an entire segment
for Kraft by setting up a tongue-in-cheek fight between mayonnaise lovers and
the Kraft product Miracle Whip (Young, 2010, p. 33).
One of the ways that product placement works so well is because of what
Steve J obs called monkey neurons, or a function of money brains, that mentally
imitate people's actions and buying behavior. He alluded to the human desire to
look like someone else or be like someone else. For example, when a woman
notices a pair of hip-hugging jeans on a mannequin in the window, and she
stops in her tracks, the driving force behind wanting to go in and try it on or
purchase it is the natural instinct to say, I could look like that, too, if I just bought
that outfit. I could be her. In those clothes, I too, could have her freshness, her
youthful nonchalance (Lindstrom, 2009, p. 59).
Playing off of peoples values, beliefs, and superstitious backgrounds to
create a valuable brand has proven quite successful for many brands. One brand
increasing sales significantly in J apan from playing off of religious traits is Kit Kat.
When the Nestle brand rolled out the candy in the country, they were unsure of
27
how it would be received. The success they found, though unanticipated, came
from religious association. The spelling alone, Kit Kat, was very close to Kitto-
Katsu, which means win without fail. In time students all over J apan were eating
the candy before tests, as they thought it would help them score higher grades.
The other thing Nestle did not anticipate was the success of its blue bag
packaging. This packaging symbolized heaven, and combined with the letters of
Prayers to God on the cover, people bought the product left and right
(Lindstrom, 2009). By playing off of consumers' beliefs and superstitions, the
companys profits have soared, and Nestle has been successful in J apan ever
since.
Targeting plays a role when working with consumers' psychographics. For
instance, if one examines how a brand such as Ambien CR has gained so much
success, they see how important targeting and positioning is. The company
realized that the consumers likely to use their product were sleep deprived, had
high anxiety and depression, and were likely be watching TV early morning and
late night, and were reading the newspaper in the morning (Young, 2010). The
company also sponsors more programming than any other time when time is
about to change, for people who all of a sudden feel sleep deprived, even though
they may not be. Lastly, the company targets business travelers often flying in
and out of time zones who are likely to naturally be sleep deprived. Their
commercials use the soft pastels and the sounds mentioned earlier to create a
soothing feeling and apply to how image directly transpires for the
28
viewer/listener. This is a prime example of combining some of the techniques
mentioned throughout the thesis thus far.
Of all the tactics mentioned above, and all of the many options and decisions
companies must make before they can create a successful brand, one of the
most important elements involved in creating a brand is its cultural connection
and relevance. The prime example of this is the success of Kit Kat in J apan, with
changes to packaging, colors, tag lines, and image to adhere to the cultural
differences of the country and culture. Gobe (2009), regarding emotional
connections, argued, the full impact of all this effort could not be realized without
sustaining a powerful cultural connection to the consumers (p. 154). He went on
to explain, Connected identities are culturally relevant and endorsed by people,
consumers, and employees alike. They are flexible, imaginative, and attractive
(p. 155).
In looking at how brand value is created, the researcher has reviewed a
variety of ways this can happen with analysis and opinions, as well as with facts
from research and surveys from many experts in the field. After reviewing the
facts the research suggests the consumer is always the focus, there are five
points to consider when looking at a platform to tell the story, determining a
corporate brand or house brand strategy is imperative, the optional use of senses
in brand management, and ways of building brand credibility. Credibility can
come from advertising, invertising, endorsements, product placement, and
playing on consumers' desires for image, religion, and cultural relevance. The
core element that creates brand value is from understanding what consumers
29
value. Up to this point, everything thus far has been what the general market, or
non-Hispanic, consumers value. But with the growing Hispanic population in the
United States, and the increasing acceptance of cultural differences, how can a
general market brand cross over successfully into the Hispanic market? Again,
first one must know what the Hispanic market values.
What Does the Hispanic Market Value?
There is a large gap between U.S. companies and the U.S. consumer market.
This consumer market now includes large minority groups, encompassing large
sectors from which profits are going to come. We are on the verge of major
demographic changes that are already affecting the country, and much of
corporate America still seems to be, in many respects, dozing (Gobe, 2009, p.
29). There are three main minority groups in the US that are becoming highly
influential groups. These include Latin American, Asian American, and African-
American populations. Statistically, it is projected that the buying power of these
three groups will triple in the next twelve years (p. 2). The values of these
groups differ significantly from the general market in the US. They are bringing
different values with them, in contrast to the European immigrants who have
dominated the political and sociological landscape in the US for the last two
hundred years (p. 29). One of the reasons that companies struggle to reach
these new consumer markets is that typically, management in U.S. companies is
still dominated by Caucasian male leadership (Gobe, 2009). There is little
understanding of the culture to which is being marketed. What is culture? Culture
is the system of social institutions, traditions, values, and beliefs that
30
characterize a particular social group or country and which are systematically
transmitted to succeeding generations (Valdes, 2000, p. 37). Culture relates to
the dreams people have, the life people live, and their emotional and behavioral
traits. Culture includes everything people have seen and experienced through
friends, family, school, media, and church. Culture is created from knowledge,
beliefs, and experiences acquired since birth (Valdes, 2000).
When looking at what Hispanics value, it is important to understand the
chronology of the Hispanic presence in the US, as it pertains to Mexicans
specifically, as well as to Puerto Ricans, the two dominant Hispanic cultures in
the US. Mexico is the largest consumer Hispanic market in the US. In 1821
Mexico acquired independence from Spain and had permanent colonies in
California, Arizona, Texas, and Colorado. In 1836 settlers in Texas declared the
Republic of Texas independent from Mexico, and Mexicans were forced off of
their properties and moved to Mexico. In 1845 Texas became officially part of the
US. In 1846 the US invaded Mexico, with the Treaty of Guadalupe ending the
war, giving half of the land area of Mexico to the US, including California, most of
Arizona, New Mexico, parts of Utah, Colorado, and Nevada. At that time, 75,000
Mexicans became U.S. citizens through the treaty. In 1880 immigration from
Mexico to the US was stimulated by the railroad. In 1910 the Mexican revolution
began and hundreds of people fled to the US. During the World War in 1917,
many temporary Mexican farm laborers were brought into the US to work fields.
American immigration initiatives to attract low-wage earners, such as the
Bracero program, enticed Mexicans to join the US labor force in 1942 (Valdes,
31
2000, p. 100). Also, in 1917, the Immigration Act was imposed with literacy
requirements on all immigrants, designed to curtail immigration from Asia, and
Eastern Europe. Mexicans and Puerto Ricans became large sources of workers
during this time (p. 18).
In 1898, through the Treaty of Paris, Puerto Rico and Cuba were transferred
to the US. The Island became a common wealth of the US in 1950. About that
time, through the 1960s, factory labor and menial jobs were light and hard to find.
In 1959, Puerto Ricans were able to enter in and out of the US without any red
tape from the US. In 1978 the US recognized Puerto Rico as a colony of the US
(Valdes, 2000).
Keeping this history in mind, it is no surprise that the highest populated
Hispanic states include California, Arizona, and Texas, as this was once Mexican
land. In the 2000 census, the Hispanic population distribution was as follows:
33% in California, 20% in Texas, 8% in New York, 7% in Florida, and 32% in
other states, including New Mexico, Illinois, Arizona, and New J ersey (Valdes,
2000).
Understanding the history of Mexican and Puerto Rican Hispanics, who is
defined as a Hispanic in the US? People often hear Latino and Hispanic terms
used interchangeably, but in fact they are different. Latino defines more
Hispanic/Latin Americans living in California and Texas. Research has found that
the most appropriate term is Hispanic, but also noting the country of origin:
Mexican Hispanic or Puerto Rican Hispanic. Research also suggested that
32
Hispanics associate more with their country name than the term of generic
Hispanic (Valdez, 2000). Many Mexicans in the US identify themselves as
Mexican, Latino, Mexican American, Chicano, and La Raza (Valdes, 2000).
Hispanics from Mexico have a strong cultural heritage but a weak connection to
other Hispanic groups. Mexicans have limited contact with other Hispanic groups,
as there is an unspoken separation between each Hispanic group and many
Hispanic cultures see Mexicans as being on the bottom of the hierarchy (Valdes,
2000). The Mexican Hispanic group is also known to report having the most
positive relations with Anglos in the US, and is also the most likely of the
Hispanic groups to report discrimination in the US (Valdes, 2000).
Understanding the history of this market is essential to understanding what
they value. Keeping in mind that they typically come from slower economic,
technological, and scientific development, and they still have large rural or
semirural populations with little formal education, and their countries are not well
developed (Valdes, 2000, p. 24), this group will think and behave differently
towards brands based on their past experiences and backgrounds. Many areas
in Mexico also include indigenous cultures, and these people will naturally be
slower to any acculturation once they come to the US.
Mexicans in the US are the largest of the Hispanic group in the US. The
motivations behind migration from Mexico into the US have to do with poor
economic conditions, a desire to improve their standard of living, and family
reunification (Valdes, 2000). This speaks directly to some of the cultural values,
such as family, way of life, and economic conditions. It is important to keep in
33
mind that when a person refers to poor economic conditions, they are talking
about the lack of running water in many areas of Mexico, limited or no internet
access, unpaved roads, uninsured banks (money is kept in secret places in the
home), and the lack of lending (without cash, it is impossible to buy cars, or build
homes). These experiences and expectations influence how Hispanics from
Mexico think and behave in the US, as these traits and experiences form and
shape them as individuals.
Mexican Hispanics have a higher household income than Puerto Ricans but
lower than Cubans, Central and South Americans (Valdes, 2000, p. 102).
Mexican Hispanics are also younger in the US than other Hispanics. They are
more likely to own their own homes than Puerto Ricans and Central and South
Americans, but homeownership is most prevalent among Cubans and other
Hispanic groups (p. 102). Hispanics value family, which includes personal
sacrifices for the good of the family. This also means they are more group
oriented rather than individualistic in nature. Mexican Hispanics have the largest
families of any other Hispanic group. Divorce is less acceptable to this group of
Hispanics, as well, though it is becoming more common (Valdes, 2000). Mexican
Hispanics are also more active politically.
With regard to healthcare, US Mexicans tend to seek medical care less often
and postpone doing so more often than other ethnic groups (Valdes, 2000, p.
103). This goes back to heavy reliance on vitamins and natural medicine, as they
are used to in Mexico. Mexican Hispanic children are often healthier than any
34
other Hispanic child, as they are 44% less likely to be exposed to cigarette
smoke under the age of 5 (Valdes, 2000).
Religion is very important to Mexican Hispanics. The largest religion for
Mexican Hispanics is Catholicism, as it is the prevailing religion in Mexico, as it
was brought over from Spain before Mexico gained its independence. However,
there is a growing number of Mexicans becoming Pentecostals. Within the
Pentecostal religion, the Mexican Hispanics believe in evoking the spirit of the
dead through mediums (Valdes, 2000). Other religious practices include
yerberias, or specialty stores that sell herbs and plants used for medicine and
healing. Curanderismo is the practice of healing by invoking the forces of good
and evil (Valdez, 2000, p. 104).
One noticeable trait in the Hispanic culture, specifically Mexican Hispanics, is
their use of art and music to communicate their culture. The art seen in most
Mexican Hispanic homes will be religious: crosses, the Virgin Guadalupe, saints,
churches, or altars. This protects the home and reminds them of who is watching
over them and saves them every day (Valdes, 2000).
Mexican-Spanish music is a very notable part of the culture, and has gained
attention in the US through sold out shows at large arenas featuring Vicente
Fernandez, Pepe Aguilar, or Ezequiel Pena, or on the numerous radio stations
throughout the US. Within the context of Spanish music come different
backgrounds and sounds, similar to the English music world. There is Mariachi,
Nortena (from Texas), Tejana, Cumbia, Bandas, and many more. Each type of
35
music comes from a different state in Mexico, and is like a mini subculture within
the Mexican culture (Valdes, 2000).
Mexican Hispanics are proud of their heritage and welcome ethnic
recognition in advertising and promotion of brands and services (Valdez, 2000,
p. 47). They will support Hispanic activities and will tend to watch TV, listen to
the radio, and read the newspaper, all in Spanish, as they are trying to keep their
language and culture alive in their homes. Though many English TV networks
argue that Hispanics are not still speaking and watching Spanish, the top three
Spanish TV networks: Univision, Telemundo, and Telefutura, are all up 22% for
the 18-49- year-old demographic in the US, while ratings for the other four large
networks in the US: NBC, ABC, CBS, and Fox, remain flat over last year (Grover,
2011). Research has proven that Hispanics are drawn to media and marketing
messages that accurately and fully reflect their Hispanic-American lives
(Univision, 2011, p. 2).
Hispanics are likely to support other Hispanics in elections. Family is one of
the most important pillars to their culture. Parents often feel obligated to make
sacrifices for their kids, and children are later expected to care for their parents
as they age. There is a large discrepancy to how men and women are viewed
regarding their roles in the Hispanic culture. Women keep a good home, clean,
care for children, and cook. Men have more freedom but are held responsible for
the behavior of their kids. Children are expected to get input from their parents on
all decisions they make until they are mature enough to make them on their own,
which usually does not occur until the kids are well into adulthood (Valdes, 2000).
36
Some of the segments within the Hispanic market that must be considered
before creating an effective brand and message include generation, country of
origin, family, brand, and language. There is more of a commonality between
generations among Hispanics than Caucasians. Country of origin has a big
impact on culture, beliefs, and opinions. The country a Hispanic group comes
from plays a key role in how a company should communicate. For instance,
Mexicans view buying a home and car very differently than Venezuelans do
(Lucas, 2009). Family is important to Hispanics, speaking in their language helps
communicate a proper message, and the brand name and its importance plays a
big part in why consumers buy what they do in the Hispanic market (Lucas,
2009).
There are two common terms used for Mexican men and women that are
used to describe very strong personalities of each gender. The first, for men, is
the term machismo, which is a complex set of beliefs, attitudes, values, and
behaviors about the role of men that is pervasive in the Hispanic culture (Valdes,
2000, p. 49.) This is a bold behavior and shows men as protectors, courageous,
strong, and virile. Men who exhibit these traits often have much more freedom
with regard to sexual activity and public and social interactions (Valdes, 2000).
For women, there is a counter balance term used: marianismo. This term
refers to an excessive sense of self-sacrifice found among traditional and less
acculturated Hispanic women the more sacrifice, the better mother, spouse
many times to the detriment of the women (Valdes, 2000, p. 49). This is
extremely common for Mexican Hispanic women, even into the second and third
37
generations. These women do not spend money on themselves, and from a
marketing perspective, they play a large role in household decision making for
the home, the kids, and the husband. These women typically exude low self-
esteem and depression (Valdes, 2000).
Mexican Hispanic cultural characteristics include many traditional traits of
Hispanics. They usually speak Spanish in the home, as seen from the 2010
census. Mexican Hispanics are mostly Catholic, but are becoming more
Protestant and Mormon. They are big on respect and status; for instance,
addressing them with mam and sir are very important. They are family oriented,
group oriented, and believe in generational hierarchies, as well as stratification of
families. They are observant in social interactions, and amicable but formal in
business situations preferring to use last names rather than first. They are
more focused on the present and enjoy reminiscing about the past rather than
focusing on the future. They believe Dios Dira! (God will tell) about the future
(Valdes, 2000, p. 51).
Acculturation is occurring in the US every day, and it does have to be taken
into account when marketing and communicating to this market. There are
important things to keep in mind when talking to the Hispanic market in the US.
The first is that acculturation is ever changing and is an on-going process. What
acculturation does not mean is the loss of culture or the moving away from their
original culture; instead, it means more of applying the new culture into the old
one, and creating an bicultural brand to a bicultural group. The second thing to
remember is that acculturation speaks to more than just language. This refers to
38
food, family, music, sports, fashion, celebrities, and spirituality (Univision, 2011,
p. 1). The third key to understand is that Hispanics are incorporating American
values and traditions into their culture. They are not replacing them. Lastly,
bilingual Hispanics cultural duality creates an appetite for all things Hispanic (p.
2), leading to a cultural fluency that is needed among brands, not just bilingual.
Earlier in the paper, the researcher introduced a somewhat new concept that
has developed in the past few years, which is the idea that there is a new
generation in the US, which is the generation. According to Gobe (2009), this
generation has come out of starts like J ennifer Lopez, Salma Hayek, and Ricky
Martin. It has only recently become acceptable and something to be proud of to
exuberate ones culture, and portray themself in their own bicultural existence.
For the Hispanic market, celebrity endorsements have been found to be the most
successful forms of marketing and communications because this demographic
places high regard on famous people in the media. Hispanics consider
celebrities important trend setters, and 18 percent of Hispanics-American women
turn to stars for clothing ideas, versus a mere 10 percent of non Hispanic
women (p. 37).
One thing is for certain, Hispanics are spending money! Todays Hispanic
buying power in the US is estimated to be over $12 trillion dollars (Gobe, 2009).
Hispanics buy four times the rate of the rest of the population and continue to be
market leaders in spending for groceries in the home and for other necessity
items (Gobe, 2009).
39
When it comes to buying a brand versus an unknown brand, Hispanics very
much skew on the side of buying what they know, recognize, and trust.
According to the Miami Herald, studies have shown that brands are more
important to the Hispanic consumer than any other consumer group (Madruga,
2003). According to Berman (2003), the Chief Executive of Market Segment
Research, Hispanics are much more brand conscious as they perceive
branded products as superior, and theyre willing to pay more for a branded
product because they want to provide their families with the best (p. 1).
In a study done by research giant Yankelovich (2010), 61% of Hispanics said
it is very hard to get them to change brands once they find one they like.
Furthermore, 58% believe that it is too risky to buy a product they are unfamiliar
with; it is better to buy what is known and recognized. Eighty-five prefer to buy a
more expensive but trusted brand to one they do not know, even if it is less
expensive. 65% of Hispanics feel that brands keep them informed about whats
going on in the marketplace, compared to only 41% of non-Hispanic whites
(Yankelovich, 2010). The study also showed that 48% of Hispanics feel that the
brands they use tell people where they stand in social status versus only 20% of
non-Hispanic whites (Yankelovich, 2010). Once the brand is built in the Hispanic
market, as long as it is maintained, a company will have customers for life. P&G
is a prime example of a brand that has built a strong Hispanic name and
continues to have success in this market segment. When Hispanics were asked
about how they felt towards many of the companys house brands, the study
40
found that six of the 12 brands rank number one among Hispanics, and others
rank number two (Yankelovich, 2010).
As a result of this secondary data, it is clear what brand value is, why it is
important, how it is created based on values in the general market, and finally,
what Hispanics value and how this differs from the general market in the US.
What is not clear through this research, and leaves questioning in marketers'
minds, is how to create a brand that is successful in the general market but that
also crosses over into the Hispanic market, as a bicultural brand, not leaning
more one way than the other. To answer this question and to develop a reliable
tool kit to aid brands in developing this strategy, the researcher conducted a
survey with a group of Hispanic women, aged 30 - 50, to see how they react to
certain brands, and why. From there, a solid foundation will be created to ensure
cultural relevance in placed in brands.

41
CHAPTER 3: METHODOLOGY
Introduction
In order to find out why Hispanic consumers make the purchase decisions
they do for different brands, and what factors play into those decisions, a primary
research survey was done. This survey asked several different questions
regarding the factors in involved in ones decision to purchase a product. About
six different industries, and compared three brands within each industry.
Industries were selected based on diversity, relevance to everyday purchases or
usage, and allowed for comparisons between companies that have worked to
gain brand awareness in the Hispanic market and those that have not.
In order to get an accurate sample and reliable feedback to the survey
questions, 18 women were chosen to participate, based on specific criterion.
The women were aged 30 - 50, and had household incomes between $40,000
and $65,000 a year. Each had a full time job, and had children in the home. Each
was either foreign born, or second generation to the US from a Hispanic
country, including Mexico, Guatemala, El Salvador, and Puerto Rico. Each
respondent spoke English during the day and at work, and Spanish in the home.
Statement of Purpose
This survey provided details and answers as to what Hispanics use to make
purchase decisions on particular brands. The answers to the questions
comparing different brands from the same industry provided a tool kit for
42
companies to use in order to successfully create a bicultural brand that crosses
from the general market into the Hispanic market.
Research Question
How can companies create a brand that successfully crosses from the
general market into the Hispanic market, creating a bicultural brand?
Research Design
In order to answer the research question, there was a combination of
research done, including secondary research analysis, data collection and
interpretation, and primary research surveys. The research was then analyzed
and triangulated to find correlations between what works in the general market
and what needs to be altered to be effective in the Hispanic market. The
secondary research was for exploratory and causal purposes, and broken into
two main parts. The first part included searching for a) why brand value is
important, b) why people buy what they buy, and c) how to create brand value.
The second section of secondary research was to find out what Hispanics value
and why they buy what they buy based on these values.
Primary research was conducted and a survey was issued to form a
grounded theory to predict and explain the behaviors seen in the buying patters
that resulted from the survey.
The sample chosen included women, because women, according to
secondary data review, are the primary decision maker in the home. The survey
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44
subject and industry, the survey included the following industries: soft drinks,
automotive, beer, cheese, make up, and banking. Once the industries were
chosen, three comparable and similar brands were used in each category for the
respondents to describe feelings, emotions, and attitudes towards each brand.
Once respondents gave their initial feedback and opinions, they elaborated on
why they felt that way about each brand. Notes were taken on what caused these
feelings and what created the reactions given.
Once both forms of research were performed, the two were combined,
reviewed, and analyzed to configure a tool kit that businesses could use to create
a successful brand that crosses from the general market to the Hispanic market.
Setting
The setting for the survey was in a local restaurant in Bakersfield, California.
Each participant was given lunch and an explanation as to what the survey was
for and what was expected as far as answering and feedback.
The surveys were handed out and took place over the course of 2 hours.
Each person gave feedback and opinions on each subject and explained, in
detail and qualitatively, why they felt the way they did and how they made certain
purchase decisions.
Data Collection Methodology
Once the surveys were given, respondents answered the questions both by
writing answers on the questionnaires provided, as well as by answering orally
45
and participating in continuous conversation after each question. Based on the
answers provided, additional questions were asked to inquire as to why those
decisions were made and what feelings were evoked. Individual sheets were
collected at the end of the survey, and all oral responses were written down and
recorded for later analysis.
Analysis Method
Once the surveys were all collected and the oral responses were written
down and recorded, all information was compiled and reviewed. Each of the
three brands from each survey question was compared and analyzed to find
solid results on why the Hispanic respondents had the preferences they did.
Once each question was reviewed, tables, charts, and visuals were made to
show the results of brand choices made. The final conclusions were drawn by
compiling all information on what the Hispanic women used as decision-making
tools in each brand comparison. These combined tools, in combination with the
secondary research facts, became the foundation for what would form the
company tool kit for creating a bicultural brand.
Limitations of the Data Collection Plan
There are a few limitations to how the data was collected and the sample size
chosen, as well as the survey overall. One problem was that it only represented a
small group of Hispanics in the US, all of whom currently live and work in
Bakersfield, California. There were no men surveyed, and the women were only
aged 30-50. Household income range was limited. All women had children living
46
in the home. Not all Hispanic countries of origin were included in the survey, only
those originating from Mexico, El Salvador, and Guatemala. The sample chosen
only represented a small sector of the total Hispanic market in the US. For a
more conclusive study, there should be additional surveys distributed that include
Hispanics from different countries (including all Hispanic countries of origin),
studies for different age ranges, for people born in a foreign country, for those
born in the US (noting generation in the US), and studies which cover primary
language and acculturation effects.











47

CHAPTER 4: CONCLUSIONS AND ANALYSIS OF THE DATA
Data Survey Results
Soft Drinks
For the first subject, Soft Drinks, three brands were used: Coca Cola,
Pepsi, and Fanta. Coca Cola was selected, as it is known to be a successful
global brand and does a lot of advertising in the Hispanic market in the US. Pepsi
was chosen as a comparison option because it is Cokes largest competitor. The
last brand chosen was Fanta. Fanta is largely popular and common in stores and
restaurants all over Mexico.
The first question was, What comes to mind when you see logos for each
brand? and logos for each were shown. For Coca Cola, the responses included
polar bear, Christmas, lights, trains, Mexican Coke (in bottles), family, gatherings,
childhood, and memories of some of their fathers drinking coke with a raw egg in
it, as was common to do in Mexico. (That concept was something that appeared
strange to the Hispanic women from countries of origin other than Mexico). The
feedback given when shown the Pepsi logo was much different. Comments
included Brittney Spears, the Pepsi Musica Party on Telemundo, parties in the
US, and the fact that Pepsi tastes better in the US than coke, because they
cannot use real cane sugar. The last logo shown, Fanta, evoked memories of
drinking in Mexico and in other Latin American countries, in a bag with a straw,
as it is served in those countries, memories of drinking it as a child, and giving it
to
fe
o
m
C
o
w
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p
s
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59
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60
America, Rabobank, and Kern Schools Credit Union. The first question asked
respondents what they thought when they saw each brand's logo. For Bank of
America there were many responses given, including mortgage, recognized,
easy access, send money to Mexico and other countries easily, expensive fees,
best bank, trusted along with Wells Fargo as the best banks in the US, family
bank, and long lines. When Rabobank came up and the logo was shown, there
were blank looks on faces and question marks. Rabobank owns the local arena
in Bakersfield where all major concerts are held and the local hockey team plays;
most of the feedback given was about the arena. A few respondents even asked,
They are a bank? What is interesting about this response is that Rabobank has
many locations in the county, and stated in the beginning of 2011 that it would be
focusing on this market. With Kern Schools Credit Union, feedback was personal
banking, cheaper, higher interest on money in the bank, lower interest for loans,
and community oriented, as they have been seen to sponsor local events.
The second question asked with which one of the three they would prefer to
bank. There was a 50/50 split between Bank of America and the Credit Union.
They ones who selected the credit union said it was because it was cheaper, and
the people who chose Bank of America said it was more trusted because it was
bigger, and all of their loans, even for their homes, were with that bank.









S

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63
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64
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65
Bank of America, and most auto loans were through the credit union. Both banks
chosen for each type of loan was due to interest rate incentives.
The findings from the banking industry were of most interest and had the
most complex answers from respondents. Trust, values, family, experiences,
country of origin history, and family hierarchy all play a large role in how many
Hispanics determine which bank to choose.
Conclusions
From the soft drink category, there were a few values that played a role in
how the brand was selected for purchase. Many shared that family values had
much to do with their decision, from childhood memories, to family gatherings.
The holidays, Christmas memories specifically, resulting in a focus on religion,
also played a role. From this analysis, it is clear that family values should always
be considered in the image a product will be portraying as part of its brand
image. What Hispanic family values will be portrayed in the brand image through
advertising, messaging, and communications?
Within the automotive category, there were fewer values that played a role in
decision-making, and it was noted that this decision was much more widely
based on functional facts. In this category, Hispanic women were found to place
higher value on cost and quality than anything else. With regard to cost, this
includes financing, interest rates, and cost to fix the vehicle or maintenance
costs. Much of the reasoning behind placing value on cost and quality comes
from experiences in their past with parents who kept vehicles for much longer
than people in the US, causing a much higher need for quality and reliability. The
66
cost component also comes from past experiences with family, whereas vehicles
were typically paid for in full and in cash, without financing. The takeaway for
companies is to take into consideration what Hispanics will use from past
experiences in their country of origin when viewing and experiencing this brand.
What can be communicated to overcome any of the potential concerns or values
within those concerns?
The beer industry emphasized the importance of culture, gatherings, music,
and emotion that plays a role in how Hispanics determine what to buy or drink for
gatherings, parties, or for their homes. The number one way that Hispanics are
exposed to new beer is through events. Hispanics typically attend more events
than Anglos, they stay longer, and according to local distributer information, drink
more beer at events and attend them with more friends and family than non-
Hispanics. The values used to determine brand purchase are all related to
cultural values and emotional connections. When Hispanics drink, they like to
spend time with family and friends and reminiscence about the past. They are
very emotional as a culture, and when it comes to some purchase decisions,
these elements play a role. Companies must ask how they can form an
emotional connection with the Hispanic consumer and how, using elements from
their culture, this can be accomplished in the messaging of the brand.
In the cheese industry, it was very clear that health and family were the two
key values in determining what kinds of food will be purchased, including what
kind of cheese. One hundred percent of respondents said they purchased Kraft
because it had no oil in it and was all natural and healthy for children. All
67
respondents noted that they always buy the healthiest option for their children as
Hispanics, historically, have some of the worst known health issues. They have
become a very health conscious consumer group. Businesses must include how
their product and brand positively impacts the health and well being for Hispanics
and their families, specifically elders and children, the two most coveted age
groups within the Hispanic market. Why is the brand good for Hispanic
consumers, what does the brand do for them or prevent them from?
The make up category spoke to Hispanic women and their personal values.
The values here were overwhelmingly unanimous about image. Hispanics care
very much about image and the perception of themselves in the communities in
which they are a part. Hispanics, being group oriented and family oriented,
rather than an individualistic culture, care about fitting in, looking good, and being
respected. This value of image is the result of why Hispanic women place such
high regard for the make up they use and the way they dress. This value also
explains why Hispanics put such trust in endorsements and hold what celebrities
say in high regard. With make up, specifically, Hispanic women are likely to use
what it appears other beautiful women use. Fitting it matters, and being beautiful
and accepted is very important. Companies should always consider how their
brand is helping the self-image of Hispanics. How does the brand make
Hispanics look or feel better about whom they are?
The banking industry is a complex subject with convoluted issues. Ten
years ago, banking for Hispanics was almost nonexistent as trust in financial
institutions was low. This came from past experiences in their countries of origin.
68
Previously, banks had gone bankrupt and taken the money people had put in
them and disappeared. Banks in other countries were never or rarely insured, so
there was little to no trust placed in them. Cash was the means for paying for
things, even homes and vehicles. Financing was never an option, as banks were
not reliable or experienced enough to secure them. Savings, interest, online
banking, debit cards, credit cards, and ATMs are not common terms for many
Hispanics, even today, though many third and younger generations are
becoming more familiar with these options. The more acculturated Hispanics are
open to these features and banking, but still have a learning process to go
through. The number one way that Hispanics end up banking at one facility over
another is because their parents go or went there. In this survey, all 18 women
currently bank where their parents do or did when they first opened their
accounts. The answers provided to the banking questions have given companies
two important values to consider when branding to the Hispanic market: always
consider family input in the decision to purchase the brand and how experiences
from their country of origin will impact these decisions. Companies must ask what
influence will other people have on the Hispanic consumers' decisions? Meaning,
will the mother, father, or anyone else have a say in this decision? This will help
determine if perhaps the brand will need to also speak to this demographic.
Lastly, like the automotive subject, how will the past experiences of the Hispanic
market influence how they feel about the brand, and how can the company
position the brand in such a way to overcome any of these potential issues?
69
As a result of the six industries surveyed, there are many important values
that have come forward. There are five primary questions that companies should
ask before creating a brand that enters the Hispanic market:
1. What Hispanic family values will be portrayed in the brand?
2. What experiences from Hispanics' past or country of origin will play
a role in developing a brand image?
3. What elements within the Hispanic culture will be used to develop
the brand's emotional connection with the consumer?
4. What does the brand do for the Hispanic consumer, or what does it
prevent for them? (Regarding health or impact on children, family or
elders). How does the brand help Hispanics show a better image of
who they are or who they would like to become?
5. Who are the likely influencers for views of the industrys brand?
How does the brand appeal to the various decision makers within
the Hispanic market?
The tool kit listed above will provide a solid foundation for developing a brand,
which has already been established within the general market to cross over into
the Hispanic market. The brand will become a culturally relevant, successful,
bicultural brand that has created one brand name, logo, and recognized image,
with a different emotional connection from one culture to the other.



70
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72
APPENDICES
Appendix A - Survey
Survey October 2011

Brand Values in the Hispanic Market: A Research Study

Brands to be compared:
Coke Pepsi Fanta
Budweiser Coors Corona
Toyota Ford BMW
Kraft Tillamook El Mexicano
Cover Girl LOreal Revlon
Bank of America Rabobank Kern Schools Credit Union

Soft Drinks/Soda

1. What comes to mind when you see the logos for:
Coke Pepsi Fanta



2. Of the three brands above, which do you prefer to buy?

Why?

3. If the brand you chose were 10% more expensive than the other two,
would you still buy it?


If it were 15% more expensive would you still buy it over the other two?


4. If Pepsi gave 50% of profits back to the local school of your choice, would
that impact your decision on which brand to buy?



5. If Coke focused on family - grandparents, time together with kids and
grandkids, and did a buy one get one half off would that influence your decision?




73

Automobiles

1. What comes to mind when you see the logos for:
Toyota Ford BMW



2. Of the three brands above, which do you prefer to buy?


Why?


3. If the brand you chose was 10% more expensive would you still buy it over
the other two?



4. If BMW advertised that you could buy a 3 series for the same price as a
Toyota Camry, would that influence your decision?



5. If Toyota Trucks showed in commercials how they were tougher than
Ford, and had more room, for kids, and family space inside, would that influence
your decision on buying a Toyota truck over a Ford?



















74
Beer

1. What comes to mind when you see the logos for:
Budweiser Coors Corona



2. Of the three listed above, which do you prefer to buy?

Why?


3. If the brand you chose was 10% more expensive than the other two would
you still purchase it?



4. If Corona became the official beer of the World Cup, and was the beer that
you always saw at parties (weddings, babies being born, all celebrations) would
that influence your decision?



5. If Coors got in trouble for having poor employee working conditions and
treating employees badly, but they were $3 cheaper than the other two brands,
would that impact your decision?




















75
Cheese

1. What comes to mind when you see the logos for:
Kraft Tillamook El Mexicano



2. Of the three listed above, which do you prefer to buy?


Why?


3. If the brand you chose was 10% more expensive than the other two would
you still purchase it?



4. If Tillamook was cheaper than the other two, by $.75 would that make you
purchase it over the others?



5. If Kraft advertised that it had ads out that showed proof that their cheese
tasted better, and had less fat and bad ingredients for kids, but was the same
price as the other two, would that make you want to buy Kraft?




















76
Make-Up

1. What comes to mind when you see the logos for:
Cover Girl LOreal Revlon



2. Of the three listed above which do you prefer to buy?

Why?



3. If the brand you chose was 10% more expensive than the other two would
you still purchase it?



4. If Sophia Vergara, Salma Hayek, and Ninel Conde came out with ads for
Revlon saying it was the best line of product they had ever used and nothing
made them feel more beautiful, would that impact your decision on which
production to buy?




5. If LOreal was made from parts of an animal, and it came out that they
were brutally killing the animals to make the make-up, but it was popular and
cheaper than other brands, would that impact your decision against LOreal?

















77
Banking

1. What comes to mind when you see the logos for:
Bank of America Rabobank Kern School Credit Union




2. Of the three, which would you prefer to bank with?

Why?




3. If Bank of America charged $10 a month to have checking there, would
that make you not want to bank there?




4. If Rabobank gave you $20 for signing up, and $20 for referring a friend,
would that make you want to go sign up at that bank and refer a friend?





5. If Kern Schools Credit Union was giving a free checking account for each
child under 18 years of age, if the parents signed up for a checking account, plus
they gave each child a $50 savings bond, would that make you want to sign up
for an account there, over the other two?



Do you trust banks?
Do you use Debit Cards more than Cash?
Do you use online banking?
Do you use more than one bank (for checking, savings, loans)?
Does your household share one account?
Do you use different accounts for different things (i.e. Checking, savings,
investing, etc.) or just one or two accounts?