Auto brands overlook niches in ethnic marketing

August 14, 2017 01:00 AM

Nissan, the official automotive partner of the BET Awards, drew a crowd to its booth during June's BET Experience Fan Fest.

Blue-collar luxury? It sounds like a contradiction in terms.

But it represents a potentially lucrative niche market opportunity among ethnic consumers that is being overlooked by advertisers, says Marc Bland, IHS Markit's vice president of diversity and inclusion.

These are the urban entrepreneurs who might have a little dirt under their nails. It could be the small-business owner who runs a profitable landscaping operation, or maybe a beautician or barber who owns several shops. They're not in white-collar professions, but they're making good money, says Bland.

They work hard during the week, Bland says, and when Friday night rolls around, they get dressed up and pull the cover off their Audi, BMW, Cadillac, Lincoln, Mercedes-Benz or Range Rover for a night on the town.

But for whatever reason, Bland says, advertisers are looking past this group, which he considers to be very much the luxury segment's core audience.

Bland: Auto brands should resist subscribing to stereotypes.

Quizás necesites un descanso para seguir adelante. Inspírate con este momento de "El Respiro" traído por @HondaLatino pic.twitter.com/TcJfdi7wzg
— Reina de la Canción (@ReinaDLaCancion) April 28, 2017

"I don't see any commercials in the industry that are reaching and speaking to those people," Bland told Automotive News. "Everything is if you're some affluent designer, or some artist. How many of these people are really out there?"

This example highlights the challenge automakers face in their attempts to reach ethnic buyers, who are by no means monolithic. Within each minority group are subgroups such as the "blue-collar luxury" crowd whom brands must first identify and then reach out to with nuanced messaging.

Otherwise, Bland says, brands can easily overlook certain segments within these groups and fall into the trap of putting ethnic consumers into boxes that are defined by old stereotypes. Bland believes some brands form their own ideas of who they want to be in their vehicles as opposed to letting the data guide them and reacting accordingly.

Bland wants to challenge the industry to avoid basing its advertising on outdated assumptions. For instance, he thinks this phenomenon is hampering the growth potential for African-American customers in the full-size pickup market.

Just look at the data.

Who's buying what?

Nuances in buying patterns within minority groups are sometimes overlooked by advertisers.

African-American buyers		Hispanic buyers
	2017 new vehicle registrations*		2017 new vehicle registrations*
1. Toyota Camry	14,311	1. Honda Civic	33,484
2. Nissan Altima	13,423	2. Honda Accord	30,701
3. Honda Accord	13,362	3. Toyota Corolla	29,780
4. Ford F series	12,456	4. Toyota RAV4	24,378
5. Nissan Rogue	11,787	5. Nissan Rogue	22,459

Asian buyers		U.S. total
	2017 new vehicle registrations*		2017 new vehicle registrations*
1. Toyota RAV4	15,191	1. Ford F series	215,133
2. Honda CR-V	14,973	2. Honda CR-V	155,529
3. Toyota Camry	13,686	3. Chevy Silverado	155,404
4. Honda Civic	13,204	4. Ram	147,273
5. Honda Accord	12,725	5. Toyota RAV4	143,375
*Through May
Source: IHS Markit

Yes, Hispanics are a coveted segment for pickups — and for good reason: Bland said one out of every 10 vehicles Hispanics drive is a pickup.

As a result, brands have funneled big money to Hispanic agencies over the years to entice this group, and Hispanic faces will often find their way into full-size pickup advertising, Bland said.

But among the five vehicles most purchased by Hispanics this year, none is a pickup.

Among African-Americans, meanwhile, the Ford F series comes in at No. 4, according to IHS' vehicle registration data for 2017 through May, and within 2,000 units of being No. 1. And yet Bland said he isn't seeing the same determination to pitch full-size pickups to African-Americans on TV airwaves.

"I would love to see everybody move beyond our own unconscious bias," Bland said. "Look at the data and keep our eyes and ears open around us about what's happening today."

Happening Now! @nissanUSA at BETX17. #betawards @betawards

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Nissan teamed up with Grambling State University's Tiger Marching Band as part of its College 100 initiative.

Nissan, for example, tailored its College 100 initiative — a broad sponsorship deal in college athletics that spans 100 universities and 22 sports — to appeal to the five historically black colleges and universities that are included in the program.

Instead of applying the same marketing outreach approach to every school, Nissan engaged with the HBCUs, and learned that it would be effective to build its activities around the marching bands and Greek-letter organizations, according to Jeremy Tucker, Nissan's vice president of marketing communications and media.

When Grambling State University won the 2017 HBCU national football championship, a university-branded Rogue was driven along the victory parade route as the Tiger Marching Band followed behind it. The other HBCUs in Nissan's College 100 program are Hampton University, North Carolina A&T State University, Southern University and Tennessee State University.

Finer data

Honda says it uses the input of dealers and sales staff in the field to learn about the preferences of all of its customers.

To stay informed from a data standpoint, Honda says it looks at retail sales data from consultancy Urban Science along with IHS Markit registration data "to understand consumer buying shifts" and whether the overall industry shifts are also taking place across ethnic groups, said Susie Rossick, Honda's assistant vice president of marketing, in an email to Automotive News.

Rossick said Honda has long supported Spanish-language creative for the Civic and Accord, which lead the way among Hispanic consumers.

The brand has also noticed increasing popularity of the CR-V with this group. To capitalize on this trend, Honda crafted a TV spot specifically for Hispanic audiences pegged to the launch of the 2017 CR-V. It also partnered with Univision talent show La Reina de la Cancion this year and integrated the CR-V into the show's storyline.

Nissan's Tucker said the automaker is relying on more precise data readings when it brings products to market. The brand can analyze the vehicle preferences of consumers down to the ZIP code level, which can be helpful in markets with large Hispanic populations such as Los Angeles, where it began testing this strategy earlier this year.

"We're accelerating that because we're seeing the performance of what it means to be really focused at a more granular level based on the makeup and needs based on different segments in the multicultural community," Tucker said.