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Presentation delivered August 2007 to the Hispanic Marketing Sig of American Marketing Association, Houston.

Presentation delivered August 2007 to the Hispanic Marketing Sig of American Marketing Association, Houston.

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    AMA Presentation-Buyer Profile:  Hispanic Home Buyer AMA Presentation-Buyer Profile: Hispanic Home Buyer Presentation Transcript

    • Increasing Sales to the Hispanic Buyer Brian Johnson Senior Marketing Strategy Manager KB Home Houston September 13, 2007
      • Who is KB Home?
      • Basis for developing an Effective Market Strategy for the Hispanic Marketplace – is there a market?
      • How do we reach the Hispanic consumer and persuade them to become a customer?
      • Five key in-field strategies that had an immediate impact on sales
      © 2007 KB Home. All Rights Reserved. Agenda
      • Kb home is the 4 th largest national home builder in the country with 31 divisions in 15 states.
      • KB Home is a developer and builder – this provides tremendous pricing power.
      • KB Home Houston is the 2 nd largest production builder in the market.
      • Communities are located in all areas of the market.
      • We offer 8 product lines raging from town homes to our Martha Stewart Brand.
      • Pricing of our product lines ranges from $75,000 - $600,000.
      • Hispanic buyers make up 38% of our homeowners. This is an increase of 15% over the last 18 months.
      © 2007 KB Home. All Rights Reserved. Who is KB Home
    • Is there a market?
    • 2004 Census, Country within a Country
      • 43.5 million Hispanics in U.S.
      • Mexico 104.9 MM
      • U.S. 43.5 MM
      • Colombia 42.3 MM
      • Spain 40.3 MM
      • Argentina 39.1 MM
      • Peru 28.9 MM
      • Venezuela 25.0 MM
      • Chile 15.8 MM
      © 2007 KB Home. All Rights Reserved. Source: Synovate 2004 U.S. Hispanic Market Report
    • Top US Hispanic Markets by Population (2004) © 2007 KB Home. All Rights Reserved. Source: U.S. Census
    • Is the market large enough to provide the necessary return on investment?
      • Hispanics currently pay more than $30 billion per year in rent. They own U.S. homes valued at more than $360 billion.
      • Census figures show that Hispanic homeownership in the U.S. rose from 40 percent to 47.4 percent in the 10-year period from 1993-2003.
      • More than 230,000 Hispanic households will join the ranks of homeowners each year over the next 20 years.
      • Hispanics are expected to make up 40% of first-time home buyers over the next 20 years, according to the Harvard Joint Center for Housing Studies says.
      … And Becoming Homeowners © 2007 KB Home. All Rights Reserved. Source: John Burns Real Estate Consulting Research
    • How is this market segment trending?
    • U.S. Hispanic Population is Growing © 2007 KB Home. All Rights Reserved. Source: Strategy Research Corp. 2002 U.S. Hispanic Population in Millions
    • By 2020, 1 in 5 will be Hispanic © 2007 KB Home. All Rights Reserved. Source: 2000 U.S. Census
        • The Hispanic population will triple in size from 2000 to 2050.
    • Youngest of All Ethnic Groups
      • Mean age by ethnicity:
        • Hispanic 27.9
        • African American 32.0
        • Asian 32.6
        • White 38.6
      • Bottom Line:
        • Fifty percent of Hispanics are under age 25 and 70 percent are under age 36.
        • The number of traditional entry-level buyers (33-year-olds) of Hispanic heritage is projected to rise by 12 percent over the next six years, compared to a 10 percent decline among other U.S. residents.
      • … ..Their prime income-earning years are ahead of them!
      © 2007 KB Home. All Rights Reserved. Source: U.S. Census 2000; John Burns Real Estate Consulting Research
    • Significant Purchasing Power
      • Average HH Income for Hispanics $45,701
      • Middle-class with significant purchasing clout
      • Upwardly mobile, growing in affluence
      © 2007 KB Home. All Rights Reserved. Source: Strategy Research Corp. 2002 The U.S. Census Bureau projects that by 2015, Hispanic families will control $670 billion in personal income.
      • Projections show U.S. Hispanics will need 4.6 million housing units over the next 20 years. This market is:
        • Large
        • Growing exponentially
        • Geographically concentrated
        • Young
        • Lucrative
        • Loyal
        • AND….. BUYING HOMES
      © 2007 KB Home. All Rights Reserved. Market Snapshot: A Home Builder’s Dream!
    • Strong Loyalty to the Brand/Service © 2007 KB Home. All Rights Reserved. Source: CNW Marketing/Research
    • How to build an effective market strategy to reach Hispanic Buyers?
      • Understanding your buyer and how they buy is the key to building a marketing strategy that will lead to increased sales.
      • Each consumer has a specific reason for wanting to purchase a new home:
        • Life stage changes: marriage, children, retirement
        • Career changes: new job, work re-location
        • Desire for improved quality of living
      • Regardless of the reason, when the time comes to buy a new home, many consumers go through a similar step-by-step process to finding and buying their new home
      • When appealing to the Hispanic consumer there is an additional element to the mix – Acculturation…
      The Key: The Consumer Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Acculturation is Defined as…
      • The acquisition of a second culture while retaining one’s first culture
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing
    • © 2007 KB Home. All Rights Reserved. UNACCULTURATED ACCULTURATED
      • Foreign Born
      • Resident
      • Spanish
      • preferred
      • Aspirational
      (TM)
      • Foreign Born
      • Recent arrival
      • Spanish
      • dependent
      • Traditional values
      CULTURAL LOYALIST ™
      • U.S. Born
      • First generation
      • Bilingual &
      • Bicultural
      • Professional
      • In touch with roots
      CROSS CULTURER ™
      • U.S. Born
      • 2 nd , 3 rd Generation
      • English
      • Preferred
      • Latino Proud
      • Retro-acculturation
      • Influential
      CULTURAL INTEGRATOR ™ Latino Acculturation Stratification ™ CULTURAL EMBRACER ™ Source: McDonald Marketing
    • Acculturation Levels Vary by Market
      • Top three most acculturated markets:
        • San Antonio
        • Albuquerque
        • San Francisco
      • Top three least acculturated markets:
        • Los Angeles
        • Miami
        • Lower Rio Grande Valley, TX (Brownsville, McAllen)
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing
      • FABAH:
        • The consumer experience of F inding a nd B uying a H ome
      • While each consumer carries out the steps in a slightly different way, overall they are consistent in their approach
      • Each element in the marketing mix has a specific role within this process
      The Consumer Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • The Consumer Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Research © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • The information-gathering step
        • The Hispanic consumer begins to research what is available in the areas they want to live
        • More homework vs. fieldwork at this stage
          • Information gathered in the research stage will help determine which homes the buyer will visit
          • “ How much do the houses typically cost?”
          • “ What do they look like (exterior/floor plans)?”
          • “ How can I get the most for my money?”
          • “ What opportunities do I have with a new home builder?”
          • "We looked at websites and in the newspaper and then drove around to look at different areas."
          • "I knew what builders to look up because they have billboards all over town." 
        • Consumer Tools:
        • Internet, newspaper, outdoor signs, magazines/flyers, word-of-mouth
    • Hispanic Language Use and Preferences © 2007 KB Home. All Rights Reserved. Source: Strategic Research Corp. 2002 Language most comfortable speaking Language spoken at home
      • Advertising in Spanish is far more effective among Hispanics. Spanish language commercials (as compared to English language commercials) are:
            • 61percent more effective at increasing awareness
            • 57 percent more effective in message comprehension
            • Nearly 4.5 times more persuasive
      Role of Language in Motivating Purchase © 2007 KB Home. All Rights Reserved. Source: Marketing to the Hispanic Homebuyer: Finding the Right Advertising Medium
      • Television
        • Hispanics watch approximately 25.9 hours per week of television, and it is the most widely used ad medium. Hispanics make a special effort to watch television in Spanish.
      • Radio
        • Radio is an excellent, local medium for reaching Spanish speakers, depending on the objectives of your initiative. It can serve as a more intimate complement to wider campaigns as well as give attention to other local grassroots advertising.
      Role of Medium in Motivating Purchase © 2007 KB Home. All Rights Reserved. Source: Marketing to the Hispanic Homebuyer: Finding the Right Advertising Medium
      • Print
        • In one study (Cheskin), Hispanics were found to have read newspapers two or three times a week and English language publications were favored to some extent over Spanish language options.
      • The Internet
        • The Internet is achieving wide usage among the Hispanic market with more than half of Hispanics shopping online.
        • Internet usage among Hispanics is expected to jump 6.7 percent in 2006 after a 6 percent rise in 2005.
      Role of Medium in Motivating Purchase © 2007 KB Home. All Rights Reserved. Source: Marketing to the Hispanic Homebuyer: Finding the Right Advertising Medium
    • Explore © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • The fieldwork step
        • The consumer physically visits the resale/model home to experience them firsthand
          • Most consumers will visit many resale/model homes, even if they liked one enough to buy, just to compare
          • Typically the most time consuming, yet necessary, part of the process
          • Emotion begins to factor into the decision making
            • Can I picture myself/my family actually living here?
          • Differentiation between builders also starts to play a role
            • What are they offering me that is different from the other builder?
      Consumer Tools: Directional signage, model homes, salespeople, sales collateral/brochures, REALTOR ® , internet, newspaper
    • Home Design: Attention to What Matters
      • Attention to overall amount of floor space as well as configuration of rooms is critical.
        • KB Home design strategies:
          • Configures rooms so that parents can monitor the activities of their children and other areas of the house from a central activity space, such as the great room or kitchen.
          • Adds family social space, including study nooks and play spaces for children, attracts a large, active family.
          • Develops communities with plans that have a variety of bedroom sizes, and floor plans with more but smaller bedrooms and many flexible spaces built into the design. That way, as families grow, they can convert spaces such as garages and dens into fourth/fifth bedrooms.
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Home Design: Attention to What Matters
      • Attention to traditional family characteristics is important.
        • KB Home design strategies:
          • Offer homes with a bedroom that is physically separated from other bedrooms to give an elderly relative more privacy, as many Hispanic families have an older relative who lives with the family.
          • Design space so that the natural flow is directed toward a cooking area. Like many other American families, Hispanic families tend to lead active social lives that involve large gatherings of family and friends. Creating this type of space flow helps to accommodate these gatherings.
          • Pay attention to the design of outdoor play spaces. For example, in some homes, there are large windows and doors that make it possible for parents in the kitchen to monitor their children more easily.
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Home Style: Style Matters Too!
      • While the actual design and layout of the home is critical to successfully building and selling to Hispanics, the “look and feel” of the home can be equally as important.
      • KB Home pursues some of the following design strategies:
        • Incorporates architectural elements that are common to Latin American homes when designing for the Hispanic market.
        • Blends Latin style with American tastes and trends.
        • Incorporates design elements such as stucco exteriors, red tile roofing, stone columns and fountains, pastel-colored exteriors, arches, and brick or stone natural accents.
        • For higher-end homes, incorporates with stone floors, wood beams, ample gardens, terraces, and interior courtyards.
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Community Style: Style Matters Too!
      • While the actual design and layout of the home is critical to successfully building and selling to Hispanics, the “look and feel” of the community can be equally as important.
        • KB Home community design strategies:
        • Community naming conventions that are universally accepted in both the American culture and Hispanic culture
        • Incorporate grand entry monuments that express a sense of arrival
        • Incorporate community amenities that lend them selves to large family celebrations. Clubhouses, fields and parks.
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Engage © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • The relationship-building step
        • A shift occurs
          • The consumer begins to be influenced by their relationship with the sales person or REALTOR ® , not just their feelings about the home
        • Topics like financing, availability and design options are often discussed
          • Can I trust this person?
          • Why should I believe this is truly the right choice?
          • How are they going to make this the best experience possible?
          • Is this home a legitimate possibility?
        • Consumers begin to investigate the reputation of the builder
          • Should I believe I’m going to get a quality products and service?
      Consumer Tools: Salespeople, sales collateral, REALTOR ® , internet
    • KB Home Spanish Language Website
      • The functionality of the site remains identical to the English version, with users having to click a button, labeled "Espanol," at the top of the page to direct them to Spanish-language content on the website. Consumers can also log on to the Spanish-language website at http://www.kbcasa.com/.
      • Users logging on to the website can now search for new KB Home communities in Spanish, as well as research mortgage information with KB Home Mortgage and view design choices available at KB Home Studio. The website also includes information in both languages on the process of building a KB Home and instructions to contact customer service representatives.
      © 2007 KB Home. All Rights Reserved.
    • www.KBCasas.com
    • www.KBCasas.com
    • www.KBCasas.com
    • Commit © 2007 KB Home. All Rights Reserved. Consumer Tools: Salespeople, REALTOR ® , financial representatives, additional builder representatives, internet Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • The decision-making step
        • The consumer finds a home and begins the contract portion of the process
          • This experience can be very exciting AND stressful for the buyer
            • "The hardest part for me was feeling good (confident) about the decisions I made."
        • Consumers rely heavily on communication with their sales and financial representatives
          • Allows them to feel in control and positive about their decision
        • For many consumers, this is the true test of the builder
          • Do they keep me informed and are they true to their word?
          • Are they helpful and attentive?
          • Are they hiding any costs or are there timing issues?
    • Don’t mind the fine print
      • 天亮出发天亮出发天亮出发天亮出发天亮出发天亮出发
      • 林海峰行为举止衣着打扮,通通都是年轻人典范。四十岁,两女之父,林海峰依然活力无限,三个月前开始,逢周六天刚刚亮,便约一群老朋友到西贡三杯酒玩 wa 同行还有比太太彭羚年轻得多的比基尼辣女。即使有美相伴,强身健体本不应该是罪过,但林海峰临上船出发冲浪,居然当众露械,继而对住汪洋大海放水。
      • 就地正法
      • 尿壮举。拉尿到海里加当众露械同属违法,但船上众人却见怪不怪,即使同行的女友人,也若无其事地专注执拾板,可想而知,林海峰如此贪方便,并非罕见。
      • 罚款兼坐牢
      • 根据香港“公众洁净及防止妨扰规例”,任何十二岁以上人士,没有合理情况下,在街道、公众地方或公众看到的地方,建筑物的任何公用部分小便,而该公用部分非洗手间或水厕,即属违法,初犯者须罚款港,而最高处罚是港币 $170,000.00 监禁六个月。
      • X __________________________
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller Housing Industry Awakens to the Latino Market Home Builders Take Steps To Make Buying Easier For Hispanic Prospects, ILAN BRAT
    • Financing
      • Many home finance companies and banks are adapting their credit standards to accept Hispanic home buyers who don't have long credit histories or who depend upon multiple paychecks to pay the mortgage.
        • One Example: Countrywide Home Loans Inc. started a program in 2004 that gave loans with no down payment to someone who can present a year's worth of utility bills, rent or even cable television payments. The program was well-suited for the Hispanic market, said Mary Salinas Duron, Countrywide executive vice president of national multicultural markets. "Because they do business slightly differently, it doesn't mean their loan becomes riskier," she said.
        • Countrywide staff is 65% bilingual. By 2009 they will be 100% bilingual.
      © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller Housing Industry Awakens to the Latino Market Home Builders Take Steps To Make Buying Easier For Hispanic Prospects, ILAN BRAT
    • Side Note: The Design Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • During the commitment stage, consumers may go through the “designing” portion of the process
        • Many consider this a “fun yet overwhelming” part of the house building experience
          • "It's a long and rough process but we still enjoyed picking out what we wanted."
      • In fact, for the consumer, determining the design elements of their new home is a process almost identical to FABAH
        • They research and explore their options
        • They engage with the design representatives
        • They commit to chosen up-grades
        • They justify their choices
      • The amount of time, energy and emotion that goes into the design process is often equal to or greater than what goes into buying the actual home!
      Consumer Tools: Design studios, design representatives, friends/family advice, internet, magazines
    • The Studio Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Justify © 2007 KB Home. All Rights Reserved.
        • Consumer Tools:
          • Product visuals, customer service representatives, sales people, internet
      Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
      • An on-going step
        • The consumer is continually validating their choices and ultimately their purchase to avoid buyer’s remorse
          • "We still go visit the models to see what they are offering vs. what we bought with KB Home.“
        • While justification happens throughout the process, it appears to be heightened immediately after committing to a home
          • Includes checking out other homes in the area for comparison
          • Talking with friends and family and soliciting their opinion
        • Delivering a quality product and excellent customer service are the best ways to validate a consumer’s purchase
      • The next step is leading consumers—through their own process—to KB Home
        • Driving the consumer to take steps in the direction of KB Home requires the right message delivered in the appropriate medium
        • The success of the communication tools relies heavily on their ability to direct the consumer to KB Home in a meaningful and relevant way and keep them positively engaged in the brand even after purchase
      The Consumer Experience © 2007 KB Home. All Rights Reserved. Source: Making Inroads With Hispanic Home Buyers , Jennifer Hiller
    • Marketing: The 4 “E’s”
      • In order to lead consumers down the desired path, the communication should deliver against the “4 E’s”
      © 2007 KB Home. All Rights Reserved. EDUCATE ENLIST ENTICE ENCOURAGE
    • Entice: Does buyer know where you are?
      • Purpose
        • Lets the consumer know that KB Home is building in an area they want to live
      • Communication
        • Showcases locations of the KB Home communities in the appropriate consumer touch points
      • Primary Communication Tools
        • Outdoor, newspaper, internet, flyers
      © 2007 KB Home. All Rights Reserved. ENTICE
    • Educate: Does the buyer have a reason buy?
      • Purpose
        • Gives the consumer a reason to want to pursue a KB Home beyond location
      • Communication
        • Provides relevant information on the home such as floor plans, square footage, price (value), look of the exterior and interior, etc.
      • Primary Communication Tools
        • Internet, newspaper
      © 2007 KB Home. All Rights Reserved. EDUCATE ENTICE
    • Encourage: Is the buyer confident in your product?
      • Purpose
        • Supports the consumer’s decision to pursue a KB Home by building trust in the brand and distinguishing KB Home from other builders in a way that is relevant to the consumer
      • Communication
        • Provides compelling, differentiated product and service benefits in sales and support materials
        • Bring to life the design possibilities with KB using the model homes
      • Primary Communication Tools
        • Model home, sales collateral, sales guides
      © 2007 KB Home. All Rights Reserved. EDUCATE ENCOURAGE ENTICE
    • Enlist: Can they share with friends and family?
      • Purpose
        • Empowers the consumer to become an extension of the marketing—
        • a brand ambassador—by providing such outstanding products and experience they’ll want to spread the word
      • Communication
        • Gives consumers the right tools to share the KB-love
        • Generates excitement for KB Home throughout the consumer’s experience
      • Primary Communication Tools
        • Anything that consumers can pass on to friends and family
      © 2007 KB Home. All Rights Reserved. EDUCATE ENLIST ENTICE ENCOURAGE
    • Working Together
      • As the consumer moves through the steps of FABAH, the sales and marketing messages must adapt accordingly to keep the consumer interested and involved in KB Home
      © 2007 KB Home. All Rights Reserved. Consumer Process Marketing Response EDUCATE ENLIST ENTICE ENCOURAGE
    • 5 key strategies in place in the field that have directly increased sales
    • Strategy #1 Staffing is Key
      • Recruit bilingual staff member(s)
        • Numerous KB Home communities have been staffed with bilingual sales counselors
      • Immediate benefits:
        • Puts Spanish-dominant and Spanish-preferred customers at ease
        • Word-of-mouth resonates quickly within Spanish-speaking community, networks of friends & family
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing Hispanic households are four times more likely to make a purchase when they are dealing in their preferred language.
    • Strategy #2: Be “Hispanic Ready”
      • Build the infrastructure to support Spanish-speaking customers
        • Employees who speak Spanish
          • Voicemail in Spanish
          • Business cards in Spanish
        • Signage in Spanish
        • Products right for Hispanic needs, tastes
        • Marketing materials in Spanish
        • Offices designed to accommodate large families. Often, children and extended family members are likely to come along at closing or take part in key decisions, such as which neighborhood to move into or which home to buy.
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing; Booming Hispanic Home Buying Market Is Sold on Spanish
    • Strategy #3: “Be Hispanic Friendly”
      • Flexible hours
      • Promote “ease”
        • Easy to understand, easy to do business with
      • Inform staff of what you’re doing and why
      • Partner with Hispanic Realtors
        • Many of our buyers seek advice from Spanish-speaking Realtors®, friends and coworkers and family members.
      • Host “Hispanic Friendly” Events
          • Ties-in a strong local Hispanic retailer.
          • Chooses useful branded giveaways that can be used by the event attendees during everyday and family activities.
          • Offers children’s activities at events. While kids play, we can engage the parent.
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing
    • Strategy #4: Adapt to Differences
      • Hispanics value highly personal/personalized service
        • Human interaction more important than speed
        • Often reluctant to leave voicemail, rather talk to a “live” person
        • Often “bond” with a specific individual at a company- trust only that individual, will wait for that individual
        • Appreciate being given all the time they need
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing
    • Strategy #5: Be Relevant
      • Learn about and understand the Hispanic buyer
        • To help potential Hispanic buyers feel at home, models have been remerchandised to include decorative items that may resonate with the Hispanic market.
        • Not only do we advertise on Spanish-speaking radio stations, but once a Hispanic buyer drives into the model complex, his or her entire experience can be in Spanish.
        • Certain floor plans sell better than others to traditional Hispanic families. In this slower market, we are increasingly doing a lot of “build to order” to make plans affordable and still accommodate families’ needs.
        • In addition, KB Home buys ads on Spanish-language radio stations and television stations and in newspapers all aimed at reaching working Hispanic families who may feel they have been priced out of the market.
      © 2007 KB Home. All Rights Reserved. Source: McDonald Marketing