Synovate Diversity Versailles Breakfast Club Presentation June 10th 2011 Jane Edwards Hall

Synovate Diversity:Every 30 seconds, a Latino turns 18 inAmerica……. • June 10th, 2011 • Presenter: – Jane Edwards-Hall © Synovate 2011

What will be covered today?• Why we need to pay attention• Insights – Media Consumption• Insights – Shopper Behavior• What to consider when conducting Diversity research• Diversity and Customer Experience Management © Synovate 2011

Diversity Populations: Why we Need to Pay Attention© Synovate 2011

The U.S. Hispanic Market –Latest Data• Largest multicultural group with 50.5 million. That is larger than the population of Canada (33.9 million)• The Hispanic market is growing. Just since 2000, we have seen this population grow by 43%, now representing almost 16.3% of the total U.S. population• The Hispanic market is varied – New immigrants as well as multi- generational families – Different levels of Spanish-language usage – Mix of 22 different countries of Hispanic heritage © Synovate 2011

This combined group isprojected to grow toapproximately 40% in the nextnine years.• But that‟s not all• Hispanics, African-Americans, and Asian-Americans are projected to represent at least 55% of the total U.S. population in 2050.© Synovate 2011

2010 Census results show Hispanic growth exceeded projections across the U.S.• Over half of the Hispanic population in the United States reside in just three states: California, Texas, and Florida.• The Hispanic population grew more dramatically than expected in states with smaller and newer immigrant populations in the past decade: – Hispanics contributed 72% of all minority growth in Illinois. – Hispanics are growing eight times faster than non-Hispanics(63.5% vs. 7.5%) in Oregon and accounted for 43% of overall growth in the state. – In Oklahoma, Hispanics accounted for nearly 51% of the overall state population growth. Source: U.S. Census Bureau © Synovate 2011

But most importantly…theHispanic market is changing• Number of U.S. born Hispanics is growing, out pacing immigration• More youths are entering the consumer market .”..This is not your abuelas Latino community of two decades ago. A new generation has emerged, with a new Latino DNA, and marketers who fail to decode it will struggle to survive." - Geoscape American Marketscape DataStream Series 2011 © Synovate 2011

What‟s Really Driving the PopulationGrowth? OMG, r u serious?! :)© Synovate 2011

Kids/Youth Are Contributing To The Overall Growth Of Multicultural Populations Hispanics are African-Americans Asian-Americans are the youngest group are also young a bit older, but still young• Median age of Hispanics is • 31% are under the age of • 26% of Asian-Americans are only 27 years 18 under 18 years of age• 34% of Hispanics are under • Median age of African- • Median age of Asian- the age of 18 Americans is 30 years Americans is 33 years vs. 25% of Total Population under 18 (Median Age is 36 Years) © Synovate 2011

Theres a good chance America will eventuallylook like San Antonio• “Demographically, this Texas city is a glimpse into the American future — a majority Latino community, where English is the language of choice.• Like Latinos across the United States, San Antonios Latinos are trying to figure out their place in mainstream American life.” - NPR, December 12, 2010 Julian Castro, mayor of San Antonio is young, photogenic, well-educated, and barely speaks Spanish. © Synovate 2011

Diversity: Media Insights© Synovate 2011

Media Usage by Ethnicity Percent Consuming Media by Race/Ethnic Group – Adults (18+)Source: Synovate 2010 U.S. Diversity Markets Report© Synovate 2011

Hispanic Media Usage by Language Spokenat Home Percent Consuming Media – Adults (18+)Note: Spanish-dominant: Speak Spanish only or mostly at home; Bilingual: Speak Spanish and English equallyat home; English-dominant: Speak English only or mostly at homeSource: Synovate 2010 U.S. Diversity Markets Report© Synovate 2011

Hispanics – Language in Which Media isConsumed Percent Consuming Media Type by Language – Hispanic Adults (18+) Source: Synovate 2010 U.S. Diversity Markets Report© Synovate 2011

Diversity: Shopper Insights© Synovate 2011

Shopper Behavior Year-on-Year© Synovate 2011

Most Recent Shopping Trip © Synovate 2011

Hispanic Shopping Styles Hispanic shoppers are less likely to be fully focused on brand regardless of price considerations (Preference Planners). Hispanic shoppers are more price and promotion conscious than General Market shoppers in four categories: Condiments (137 index), Dishwashing Liquid (125), Pet Food (136), and Toothpaste (148). When shopping for 10 of the 12 categories (the exceptions being Condiments and Laundry Detergent), Hispanic shoppers may be open to influences at the shelf, as the proportion of shoppers classified as Explorers is significantly above the General Market results. While this Synovate study covered CPGs, we could assume that the same would be true in shopping for high-ticket itemsSource: Synovate Diversity Shopper Insights report 2010 © Synovate 2011

Diversity: Why is a Different Approach to CE Management Important?© Synovate 2011

Why Is This Important? In a down or stagnant economy customer experienceis crucial for current and future business success. This Spanish-speaking is particularly true for the Hispanic consumer who consumers would buy cherishes personal contact and general customer significantly more experience. Customer experience has a high products/services from correlation with brand loyalty. Hispanics, particularly companies that make it Spanish-dominant Hispanics over-index in brand easy to communicate in loyalty. Spanish. Portada Magazine, April 2010 Language Line Services While many firms on our list may say they value the Hispanic market, most fail to provide good customer experience. Amazon.com, and Barnes & Noble are the exceptions, with the highest CxPi scores; financial services firms have the lowest scores. Forrester CxPi 2010 © Synovate 2011

And, More Importantly, Synovate‟s Point ofView …… With an increasing need to build CE programs that deliver sales and profit back to the business, there is an It‟s time to increasing need to distinguish between Incorporate an just “claimed loyalty” and true drivers Acculturation of choice that make a difference. model We know that drivers are very different Into all initiatives, across our varying Diversity groups Including VoC and and, so, why create a CE management Mystery Shopping strategy that delivers a “one-size-fits- all” and assumes „general market‟ drivers across all groups? © Synovate 2011

What to consider when conductingDiversity research© Synovate 2011

Diversity Research Considerations • Methodologies: Phone, In-person, Online? • Question Styles: The “Sí” Factor • Cultural Relevance: “American “or “sensitive” concepts • Comprehension Levels: Varies by acculturation level and socio-economic status • Accurate Translations: Must convey both the meaning and sense of the question© Synovate 2011

Telephone Methodology• Telephone is generally the best representation of ethnic populations and the most cost effective with an interview less than 20 minutes with no visual stimuli. – Listed surname, high density random digit dial (RDD), hybrids, client lists, as well as panelists (English-speaking) from Synovate‟s panel for telephone studies.• 30% of Hispanics and 25% of African- Americans are cell phone only households, according to the CDC. – Currently, it is not possible to target specific ethnicities with cell phone sample but county level exchanges can be targeted in higher density ethnic areas. © Synovate 2011

“At Home” Internet Access Growing forHispanics• Online penetration at home varies from a high of 70% of Mostly Acculturated consumers to 38% of Unacculturated Hispanics.• Although Internet penetration continues to grow, online panels are generally not representative of ethnic consumers. We suggest “mixed recruiting” to obtain rep samples. Non-traditional panel sources, such as Spanish-speaking recruited Hispanics, are growing in popularity. These samples tend to skew towards „bilingual‟ respondents, so check language counts when bidding. Base: Adults 18+ Source: Synovate 2010 U.S. Diversity Markets Report© Synovate 2011

At Least 7 Out Of 10Adults Have SomeInternet Access (fromanywhere) Base: Adults 18+ Source: Synovate U.S. Diversity Markets Report © Synovate 2011

In-Person Methodology• Intercepts, pre-recruits, and central location tests in malls or other high traffic areas are an excellent method for ethnic online surveys using CAPI (computer assisted personal interviewing) for interviews to find harder to reach populations, interview lengths longer than 20 minutes, and visual or taste tests.• Synovate also has the capability for in-store interviews for at-the-moment purchase behavior and Mystery Shopping.• Synovate has ongoing business arrangements with field suppliers across the country and has successfully conducted in- person ethnic interviews in these types of venues for many years.© Synovate 2011

Question Styles, Cultural Relevance, andComprehension Levels• The “Sí” Factor - Culture has an impact on how respondents use rating scales. Hispanics gravitate toward always giving higher ratings while others tend to give lower ratings, frustrating attempts to compare results across ethnic groups. - Different techniques are available to help minimize scale bias.• Cultural relevance - Many ethnic consumers do not have the depth of experience with many U.S. brands nor are used to lengthy questionnaires which must be taken into account when designing a research survey. - Care must be taken with assumptions about generally known “American” concepts, particularly among foreign born/less acculturated. - Sensitive topics (e.g. immigration status, income) should be recognized.• Literacy and education levels are lower (though increasing) than those of General Market overall - Pilot testing is recommended for language and questionnaire length that may diminish quality of the response. © Synovate 2011

Accurate Translations• Translations must accurately convey both the meaning and the sense of the question.… − Literal translation does not guarantee the same meaning. − Use experts who adapt English-language questionnaire. − The translator must assess whether phrases are actually English-language idioms or slang and, as such, do not have the same meaning or sense in Spanish – then find a Spanish phrase which works.• Ideally, questionnaires should be back edited and reviewed by research staff who understand the multicultural culture, consumer language and survey language. © Synovate 2011

What types of Diversity Questions Should we Include?© Synovate 2011

Aside from „typical‟ demographics such asage, gender and income, we suggest: • Self-identified ethnicity and/or race • Place of birth/country of origin • Length of time lived in the U.S. • Generation (parents and grandparents place of birth) • Language spoken at home and outside of the home • Acculturation level using (Synovate‟s) Proprietary Algorithm© Synovate 2011

U.S. vs. Foreign-Born Hispanics• Majority of Hispanics are Foreign-Born which creates a very different marketing and economic environment – Traditional values, importance of family, respect for elders, reluctance to accept humor at expense of others – Don‟t want to “stand out”, willing to make sacrifices for a better life for children % of Hispanics born outside the U.S. is decreasing which is creating a new generation of Hispanics© Synovate 2011

Spanish is mostly spoken at home by Hispanic adults English only/ mostlySpanish only/ mostly Spanish and English equally The % of Spanish-dominant adults is slowly decreasing as U.S. born children enter adulthood Source: Synovate 2010 U.S. Diversity Markets Report © Synovate 2011

How do I know when to use (Synovate‟s)Acculturation Model?First, it is important to understand whatacculturation is:• It is the process by which a person learns or accommodates to a new culture. – Observing new “host” culture – Reacting to “host” culture – Adapting to ”host” culture to order to better function within it• Can be Dynamic or Passive (Conscious Effort vs. “Rubbing Off”)• Acculturation DOES NOT REQUIRE a person to abandon all aspects of their home culture. © Synovate 2011

Push and Pull Factors Affect Acculturation• Life events begin to shape acculturation level such as: – Employment status – Household establishment – Family formation – Education and exposure to attitudes and values different than their own For example…the Internet provides Hispanics with an accessible medium for keeping in touch with their families back home and news from their country of origin. This continued contact with family and media from their country of origin exerts “pressure” to keep their culture.© Synovate 2011

Synovate Diversity‟s Acculturation Model• Our model uses several predictors of acculturation, including country of birth, years lived in the U.S., and social network.• Using this framework, our acculturation model segments the 18+ Hispanic market into 3 groups: – One small “Acculturated group” (9%) – One very large (non-descript) “Partially Acculturated group” (68%) – One “Unacculturated group” (23%) Note: We do not use language spoken at home as many models do.© Synovate 2011

Synovate adds “cultural tension” to enhanceunderstanding• Acculturation requires adaptation which places anxiety or stress on an individual. These stresses affect rate of acculturation and resulting consumer behavior. – Attempts to “fit into new culture” – Attempts to “preserve the home-country connections” LOW CULTURAL TENSION HIGH CULTURAL TENSIONFeelings of being discriminated • Low • HighagainstFamily ties • U.S.-based • Home countryTradition • Consider themselves less traditional • Maintain traditions • Seek interactions with non- • Feel uncomfortable interacting withInteractions Hispanics non-Hispanics • Country of origin and family back • Positive aspects of life in U.S. homeCommunication points • Family and friends in U.S. • Uniqueness of Hispanics in U.S. • Positive experiences of life in U.S. • Nostalgia for past and home country © Synovate 2011

By overlaying Tension onto our StandardAcculturation Model, we can more fullydescribe “Partially Acculturateds” and“Unacculturateds” • Mostly Acculturated (9%) • Partially Acculturated (68%) - American Latinos (28%) - low cultural tension - New Latinos (23%) - medium cultural tension, - Traditionals (17%) - high cultural tension • Unacculturated (23%) - Unacculturated Stable (17%) - low cultural tension - Unacculturated Traditionals (6%) - medium to high cultural tension© Synovate 2011

Latest demographic and categorytrends• We have been following trends in the The U.S. Diversity multicultural populations for more than Markets Reports TeleNación 30 years.• With this knowledge, we provide multicultural insights and strategic consulting to help our clients make better business decisions.• We publish several syndicated studies which solidify our expertise in the U.S. Diversity Markets HispanicLink © Synovate 2011

We are still selling the2010 U.S. DiversityMarkets Report• Premier one-stop resource for the Diversity market• Published every other year• Trusted and used by Fortune 500 clients since 1980 – Detailed population estimates (by DMA, by Age, by Gender) – Proprietary characteristics data, including language, media, acculturation, shopping behavior• Now discounted at $1,599 through your account representative or by visiting: http://www.synovate.com/insights/public ations/reports/diversity/ © Synovate 2011

…and the U.S. Diversity Shopper Insights Report• The Diversity Shopper Insights Report examines the Shopping Styles and Path to Purchase through the lens of the ethnic shopper.• Using its proprietary Shopping Styles Segmentation, Synovate compares category shopping styles among Hispanics vs. African-Americans vs. the General Market: – Carbonated Soft Drinks, Coffee/Tea, Condiments, Crackers, Salted Snacks, Breakfast Cereal, Pet Food – Hair Care, Internal Analgesics, Dishwashing Liquid, Toothpaste, Laundry Detergent• Now discounted for $399…what a deal! © Synovate 2011

Introducing HispanicLinkJoint Partnership with SymphonyIRI GroupHispanic Survey Hispanic Shopping Basket• Survey compares the shopping preferences • Trended Hispanic Shopping Basket uncovers and motivational drivers of behavior among the actual purchasing habits of Hispanic More Acculturated and Less Acculturated consumers on IRI‟s panel; to pinpoint greatest Hispanics (vs. Non-Hispanics) opportunities by Retail channel• Topics include: Cooking, Eating, Drinking, Cost: Health, Marketing & Media Influencers, & • Hispanic Survey & Shopping Basket: $35,000 Impact of Economy • Survey only: $25,000• N=1800 interviews fielded in Dec. 2010 and Jan. 2011 • Shopping Basket only: $15,000 42

TeleNaciónTeleNación – Hispanic Omnibus • Monthly Telephone Hispanic Omnibus CATI studies offering shared cost opportunities • Top 10 Hispanic markets or National Rep Sample (other markets added on custom basis) • Client can have surveys in one or more of Top 10 U.S. Hispanic markets • As migration has increased, Hispanic penetration into more and more markets throughout the country, some clients prefer national information • Fielded monthly beginning on the last Tuesday of the month.TeleNación Markets • San Francisco/San Jose • Los Angeles • Dallas/Ft. Worth • New York • San Antonio • Houston • Phoenix • Miami • McAllen/Brownsville • Chicago © Synovate 2011

Customized Customer Experience andMystery Shopping Research • Using our Synovate Acculturation model we are able to design best-in-class approaches for you to manage your CE research and management strategies • Examples of recent programs include: – State Government Mystery Shopping programs – A national financial services provider© Synovate 2011

Questions/Preguntas? Thank you! • Contact: Jane Edwards-Hall jane.edwards- hall@synovate.com • Denise Sharp denise.sharp@synovate.com© Synovate 2010

Synovate Diversity Versailles Breakfast Club Presentation June 10th 2011 Jane Edwards Hall

by Dan Austin

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