Problem
Because there are so many different cultures within the Hispanic community, researchers have found it very difficult to target this group as a whole. Many companies don’t believe Latino’s to be a viable target and they don’t want to spend the time or money trying to research this community.
The companies that have explored this target market have had to figure out what approaches or appeals should be used and what strategies should be used in creating long-term relationships with this target group.
Sonic drive-in is among one of the companies currently researching the ways to target the Hispanic community and creating the long-term relationship with them. Figuring out where to begin is the problem Sonic is currently facing with targeting this group.
Purpose
The purpose of this report is to investigate how viable it is to target the Hispanic community and what approaches should be used.
In this report, we will explore the Hispanic culture in the United States and try to prove how important it is to target this community due to the rapid growth of population. Since the Hispanic community has never been considered a viable target, we tend to research this group and prove how influential this group is.
Assumptions
Our recommendation is based on three assumptions
• The Hispanic population in the United States will continue to sky rocket.
• Many more companies will see the importance of targeting this very influential group.
• Accommodating the Hispanic community will prove to be very profitable for many successful businesses.
Limitations
This report depends almost entirely on print and online resources. Before targeting this community it is important to research and understand the Hispanic culture.
Criteria
According to Sonic’s marketing club director, Tamara Stanley, Sonic is exploring the Hispanic community and trying to target this market by:
1. Creating menus designed in Spanish for better communication.
2. Satisfying the community enough for there to produce positive word of mouth.
3. Reaching this group by advertising commercials in Spanish and broadcasting over Spanish speaking radio stations.
Why target the Hispanic community?
Targeting the Hispanic community is very essential to modern day business success. Hispanics are constantly rising in numbers in the United States. They currently account for fourteen percent of the U.S. population and continue to grow. Adapting to foreign cultures is very challenging and important for business growth. This process can be very difficult and provides many obstacles. Another important aspect to note is that they too are adapting to our culture as well. Traditionally, Hispanics are very family oriented. A very important aspect of their culture is family.
Examples of this can be seen in their business practices, as it is a common practice of their culture to shop together. Therefore, targeting the Hispanic community has a competitive advantage in the sense that they tend to utilize goods and services as a whole thus yielding higher net revenues to companies. For example, if a large number of Hispanics go dining and are unable to be properly accommodated to their needs due to language barriers, that establishment will experience a drop in the potential earnings from their business.
Due to the aforementioned factors, Hispanics prove to be a highly marketable culture when the necessary accommodations are met. These accommodations can be easily achieved by Sonic with simple inexpensive modifications to their business plan. Hispanic culture is steadily rising and it would be a poor business practice to not embrace their growth in the community.
Difficulties and complications of targeting the Hispanic community
When implementing new target markets to a company’s mix many challenging complications can and will arise. The most prevalent complication is of course the language barrier. The speaking of Spanish is becoming ever more popular amongst Central Americans. Getting people to adapt this rapidly growing change is always a problem. The typical American is hesitant to embrace the Spanish language. The most common reason for this is the belief that we are an English language based country and should not have to learn a new language. Rather than embracing a new language, those whom come to America from a foreign language speaking country should practice our native tongue. This is a very unfortunate way of thinking as well as unmethodical and stubborn. So the question arises, how does one influence others to embrace this necessary change? Another problem with targeting this group is the vast differentiation amongst Hispanics in regards to geographic locations. There are several Spanish speaking countries and this poses as a obstacle to market to the Hispanic community as a whole.
Reasons why Hispanics are a crucial target market
The rapid growth of the Hispanic community in the United States is on a constant rise. The following chart demonstrates this trend.
Figure 1:
1970 to 2000—Immigrants Dominate Growth
Change in the Hispanic Population,
1970-2000: 9.6 million to 35.3 million
Growth
(in thousands)
Growth
(in percent)
Share of
Total Growth
Total Hispanic Population 25,690 267% 100%
1st Generation 11,515 436% 45%
2nd Generation 7,132 259% 28%
3rd +Generations 7,042 167% 27%
As one can see, the number of Hispanic Americans is exponentially increasing. Another key factor when considering Hispanics as a target market is their spending abilities and patterns. As previously illustrated, Hispanics tend to shop in large groups. This spending trend should be utilized in order to increase Sonics’ revenue. Hispanics are very family oriented in nature as well as loyal to the organizations that they interact with. Targeting this community in an effective manner will thus lead to repeat business transactions. Another common practice of this group is word of mouth. By providing necessary accommodations to satisfy this community’s needs’ will also lead to a continuance of new customer growth. Embracing this trend in Hispanic growth in Central America will provide Sonic with higher net revenue associated with repeat customer transactions as well as customer loyalty and growth.
Sonic Exploring Hispanic Community as a Viable Target Sonic has currently been researching ways to target the Hispanic community for the past five years. The company has found this to be very difficult due to the language barrier and ways to target the many different sub-cultures within the Hispanic community. After speaking with Tamara Stanley from Sonic’s marketing department, it is clear to us that the company feels they have successfully found ways to target this largely growing population. Sonic recently teamed up with another marketing team to create a kid friendly, Spanish speaking atmosphere geared at targeting the Hispanic community. Sonic first developed the idea of being Hispanic friendly by creating cards within the “Wacky Packs” geared to teach children simple Spanish speaking phrases. This was considered a huge hit among parents as it is becoming more essential to learn Spanish everyday within our country. The restaurant was not excepting such a huge hit among the cards but it showed the company more than ever how crucial it was to target this market. They then took their marketing efforts to the next level by producing menus in Spanish and hiring staff that is bilingual. They currently are working on advertising campaigns that are in Spanish and broadcasting commercials over Spanish speaking radio stations. The most important concept Sonic has learned throughout their marketing research is that Hispanics rely very heavily on word of mouth. Because of this, Sonic wants to make sure that everyone that comes in has a positive experience and will want to share it with family members and friends. Sonic is currently planning on opening their first restaurant in Mexico within the next year. The company is hoping the restaurant will boom and will help fill in some voids that are missing with researching the Hispanic community. The best way to understand this community is to place the product in their environment and see how they react.
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