The Opportunities & Challenges of Ethnic Marketing

The increasing growth of multicultural communities in Canada is changing the way businesses market their products and services. In fact, it has become an imperative to use a more targeted approach to reach these populations, and that’s where ethnic marketing comes in.

But what is ethnic marketing?

“Ethnic marketing” or “multicultural marketing” consists in segmenting the market by relying on the homogeneity of an ethnic group of consumers (…) and offering them products or services adapted to their physical and cultural characteristics. “

(Definition: B. Cova et O Badot)

Proposing a product tailored to the particularities of an ethnic group is the essence of certain industries. Whether it’s the colour or the type of skin (important in the cosmetic industry) or a culinary habit (in the food industry), ethnic marketing allows businesses to identify, target and sell their products in a more efficient way.

Ethnic marketing or multicultural marketing. What’s the difference?

None! The word “ethnic” has historically been used to refer to this type of strategy, but the term “multicultural” appeared in North American campaigns in the 1970s, due to the negativity often associated with the word “ethnic”. The use of the term “multicultural” implies the inclusion of people from all sorts of background, regardless of their physical characteristics.

So should we use the term “ethnic marketing” or “multicultural marketing”? The answer is … both! You are free to use the expression of your choice, because both means the same thing: which is the consideration of cultural diversity and the adaptation of a company’s products or services to meet their audience needs.

What are the opportunities of such a strategy?

• The rapid growth of the multicultural population

International migration accounts for over 80% of Canada’s population growth with 60% of the immigrant population coming from Asia, more particularly China and India. The Black population represents about 1.2 million people.

One of the first industry to have benefited from this migration is the telecommunications, followed by the finance industry (for money transfer services), automotive and food.

• The high purchasing power of multicultural populations

In the United States, Asian people represents only 5% of the American population but they contribute to 18% of the purchases of luxury sedans like BMW and Mercedes. Besides, according to a 2019 survey conducted by Nielsen’s Diverse Intelligence Series, 42% of African Americans expect brands they purchase to support social causes, which is 16% more than the total population. This social consciousness should demand that marketers understand not only the benefit of supporting African American social causes, but also the risk of not supporting them.

• Cost-effectiveness of multicultural campaigns

The costs associated with ethnic media are much more effective than the mainstream media. A 30-second ad on a national network equals the budget of a whole multicultural campaign. This return on investment is way too important to ignore!

What are the challenges?

One of the challenges in multicultural marketing is the lack of data and research conducted in Canada to guide businesses, especially when it comes to black consumers. To implement an effective ethnic marketing strategy, it is necessary to define the ethnic market, then determine under what conditions ethnic identity becomes relevant to consumers and what strategies can be implemented across those groups.

On the other hand, marketers need to have the right resources (internal or external) and a deep knowledge of their target audience. In the last few years, we saw a few brands trying to include diversity in their campaigns but getting a backlash from the public because of misrepresentation or offensive messages. So was it a creative or marketing oversights? Or was this the reflection of the lack of diversity, inclusion and equity in the media and advertising industry?

Finally, language is a key factor in developing an effective communication strategy that is welcoming to all, but it can also be a strong barrier. According to StatCan 2016 Census, although the top countries of birth for Black immigrants in Canada were Jamaica, Haiti and Nigeria, a higher percent of people within the Black population (28.0%) speak French at home compared to the total population (23.3%). So businesses should have a bilingual communication and offer their services in French should they want to increase the engagement of Black audiences with their brand.

In Conclusion

Ethnic or multicultural marketing is an approach that allows brands to segment their market in a most efficient way. However, such a vision of marketing can have shortcomings and the danger is to fall into caricature and clichés, and reduce the consumer to its only cultural sphere. The client is complex and his consumption behaviour cannot be limited to his ethnic group.