Marketing of financial services to minorities has captured the attention of many of the nation’s largest financial institutions.  The two largest growing segments of the United States population, namely Hispanics and Asians will constitute an area for potential growth by financial institutions in the coming years.   Cultivating marketing communications often differs across cultural contexts (Aaker 2000).  The robust nature of these results has been transposed on values (Han and Shavitt 1994), depicted lifestyles (Tse, Belk, and Zhou 1989), emotion type (Martenson 1987), benefits (Sherry and Camargo 1987), and information content (Hong, Muderrisoglu, and Zinkhan 1987).  Marketing communications is documented to reflect cultural differences (Belk and Pollay 1985).  Developing innovative marketing strategies will be key to tapping into the resources of these minority groups.

In America, Anglos comprise the most affluent ethnic group but the African Americans, Hispanics and Asians are experiencing the most rapid population growth.  The purchasing power of African-American and Hispanic consumer markets already are larger than the entire economies as measured by GDP in US dollars of all but nine countries in the world (Humpherys, 2005).  By 2010, the purchasing power of these two groups of population in the United States will exceeds the economy of Canada which the ninth largest economy in the world (Humpherys, 2005).  The Selig Center of the University of Georgia estimates that  Hispanics control about $736 billion in spending power in 2005, the this purchasing power is expected to rise to $1087 by 2010.  North Americans (predominately Anglo) have been found to have more favorable attitudes toward marketing strategies that focus on self-reliance, self-improvement, and the achievement of personal goals (Han and Shavitt 1994).  To capture this potential area for expansion, financial services must be specifically tailored to meet the financial needs and culture-related characteristics of these diverse groups.  The financial entity that successful develops a unique, ethnic-centered marketing of financial services to each of these three diverse ethnic groups will be assured of a profitable return on investment.

The purpose of this paper is to surmise the literature stream and develop effective strategies in marketing to the two fastest minority groups, Hispanics and Asians.  Because marketing to these minority groups is becoming increasingly relevant to financial institutions, using the available literature in order to maximize effectiveness of potential marketing plans by financial institutions is paramount.  The paper is organized as follows:

1. Literature on Marketing to Asians
2. Literature on Marketing to Hispanics
3. Formation of Effective Objectives in Marketing to these Minority Groups

Marketing to Asians
To illustrate these unique, cultural-related needs, some research has actively explored attitudes of these minority groups.  For example, Asian culture has certain preferences that differ from Western culture regarding financial services.  Asian individuals have been found to respond positively to marketing strategies that focus on family integrity, collective goals, and the feeling of harmony with others (Han and Shavitt 1994).  A 1986 study demonstrated which social factors, such as, advice from family and close friends are more important than attitudes concerning a company’s reputation or commitment to service (Tan 1986).  Traditional selection criteria for financial services are often foregone in lieu of family advice.  Financial services selection of Chinese immigrants vs. U.S. born Chinese and found that U.S. born Chinese put a greater emphasis on banks having FDIC insurance (Yue and Tom 1995).  Poor interpersonal relation was found in to be the primary restraint for banking services among certain Asian populations in Wisconsin and governed their banking preferences (Languerre 1998).

Marketing to Hispanics
Like the Asian market, the Hispanic market is regarded as being important due to its size, rising income, and geographical concentration.  Hispanics are the fastest growing ethnic group and are soon expected to outnumber African Americans (Strategy Research Corporation 1998).  Also, the recent proportional increase in consumption has been rapid (Comer, Nicholls, and Vermillion 1998).  By 2010, the U.S. Hispanic population is expected to number 38.5 million (Exter 1991). In 1992, the disposable income of U.S. Hispanics was estimated to be $200 million, an increase of 138.0% in the twelve years previous to the study (Business Week 1992; Webster 1996).  The rapid growth of the Hispanic market has been reflected in an adaptation of the sales force reflecting the change in cultural values (Merrill and Reid 1981; Mok 1982; Wilson 1987).  This has spawned a sizeable increase in the number of Hispanic sales people (Comer and Nicholls 2000).  The Hispanic culture is documented as being distinct from the Anglo culture (Maria and Maria 1991; Webster 1996).  When compared with the Anglo community, Hispanics feel more comfortable in close proximity with other people (Hall 1990; Hawkins, Best and Coney 1989).  Hispanics have a strong sense of familialism (Moore 1970).  This gives the Hispanic community a sense of loyally and solidarity to their family members (Triandis et al. 1982).  Due to their increasing size and income potential, the Hispanic population offers perhaps the greatest opportunities as a market for financial services.  Hispanics also prefer liquidity over more volatile investments, such as common stock (Plath and Stevenson 2005). 

Effective Strategies
Asians
The most effective marking campaigns to Asians focus on family and integrity.  In light of recent financial scandals, there exists an overall heightened sense of skepticism regarding financial markets.  The core of any marketing campaign aimed at the Asian  must focus on a sense of community and togetherness.  The following is a list of highlights to be followed when marketing financial services to Asians:

1. Emphasize the concept of family, specifically how investing with your group can lead to greater financial security for the family
2. Portray family and close friends giving advice about you company, and how it helped them grow together
3. Show adds featuring the entire family, grandparents and children

Hispanics
The most effective marking campaigns to Hispanics focus on a sense of community and closeness.  In light of recent financial scandals, Hispanics prefer low risk, more liquid investments such as money market accounts or certificates of deposit.  The core of any marketing campaign aimed at the Hispanic market  must focus on a sense of loyalty and solidarity.  The following is a list of highlights to be followed when marketing financial services to Hispanics:

• Emphasize the concept of togetherness, creating a sense of closeness within the community
• Place an increased emphasis on liquidity, emphasizing that the investments are a safe way to make money that is backed by the FDIC
• Show adds featuring the entire family, grandparents and children
About the Authors

Randall Valentine
Assistant Professor of Finance
Georgia Southwestern State University
rvalen@canes.gsw.edu
John G. Kooti Dean, School of Business Georgia Southwestern State University jgk@canes.gsw.edu Dawn Valentine Assistant Professor of Marketing Georgia Southwestern State University dvalen@canes.gsw.edu