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A voice less heard

Written by Adam Pescod on Monday, 02 December 2013. Posted in Sales & Marketing

Ethnic minorities in the UK currently account for almost one sixth of the population with a buying power of £300bn. Why, then, are more brands not taking advantage of this opportunity?

A voice less heard

The multicultural makeup of the United Kingdom is one of its defining qualities. As a nation, it prides itself on being inclusive to all nationalities, races, religions and ethnicities. This is reflected by the fact that 12% of the UK’s population is currently classed as being from an ethnic minority. And this proportion only looks set to grow over the course of the next decade. 

Given such figures, one would think that brands must be chomping at the bit to cater to the needs of this ever-increasing group of consumers wherever possible. However, this doesn’t quite appear to be the case.

According to research published last year by the Institute of Practitioners in Advertising (IPA), the UK’s ethnic minorities currently boast a spending power of £300bn and rising, yet efforts to take advantage of this are surprisingly rare. One finding from the IPA’s report was that only one in 20 adverts made in 2011 featured ethnic minority actors. Whilst cuts in public sector advertising and the closure of the government’s Central Office of Information (COI) played a large part in this, the IPA maintains that most mainstream marketing strategies are failing to take ethnic media, and the ethnic minority consumer, into account. This obviously provokes one overriding question: why?

“Most of the mainstream brands haven’t understood that ethnic minority consumers are themselves a force in the UK,” suggests Prasad Manjrekar, media director at communications agency Mans Media, which specialises in connecting brands with ethnic audiences. “I believe that there is a vast amount of space available for businesses to target these audiences.” Manjrekar cites the explosion in the number of Asian television channels as an example of the type of opportunity that brands should consider exploiting as a means to reach this demographic. “It is a relatively unknown fact that Asian channels are equal to the reach of mainstream channels such as ITV and Channel 4,” he adds. “That is something that is not often taken into consideration.”

Of course, this trend hasn’t been totally ignored, but there is a consensus that those who have made efforts to break into ethnic media in this way have thus far fallen short. “Nowadays, there is almost something like 100 advertisers who are placing spots on ethnic TV stations but without planning, without thinking,” says Saad Saraf, CEO of marketing agency Mediareach and chairman of the IPA’s Ethnic Diversity Forum. “I think that is money wasted because with a little bit more tweaking to the message, they could generate a huger amount. We did this for TalkTalk, we did this for BT. If you tweak the message so that it is the right message, you will have more calls to action.”

Another part of the problem, it would seem, is a failure to get to grips with the behavioural patterns of consumers from ethnic minorities. As a result, brands may lump this demographic in with their traditional target audience, under the assumption that its spending habits and purchase decisions are in alignment with consumers from a white background. However, there are a number of characteristics that set consumers from ethnic minorities apart, and which present a compelling picture for modern marketers and small business owners

“This is an increasing niche and it is going to keep increasing for the next three to four decades or beyond because we have second, third and fourth generations,” says Saraf. “It is not far from following the trends in the US, so you are getting younger consumers because the majority of ethnic consumers are young, Generation Y, and they are going to be tech-savvy, they are going to be big spenders, they have disposable income, money to spend.” This is put in further perspective by Manjrekar, who adds: “Asians in particular earn above the national average so that means there is a vast amount of spending capacity that Asian minorities have over the other ethnicities in the UK.”

The big spending power of the ethnic minority audience can also be explained by another unique purchasing habit, according to Saraf. “Their purchasing patterns are in bulk,” he explains. “Their consumption is high because they entertain and they eat a lot so therefore, even though they are less than 20% of the population, their spending could be 50% because of that consumption rate.” The opportunities on offer for brands in the fast-moving consumer goods space are palpable in this regard, and Saraf does admit that the likes of Asda and Tesco are already tapping into it with relative success.

Moreover, Tesco is going some way to cater for the various religious festivals that are celebrated by consumers from this particular demographic, something which can’t be said for the majority of other retailers. “The other brands have not taken advantage of the benefits they can get out of this multitude of festivals,” says Manjrekar. “We have seen it happen from the ethnic brands in the UK but that kind of approach is lacking from the mainstream brands. They are not trying to cater to every single market.” For any business owner left feeling sceptical about the benefits of dedicating marketing to such events, Saraf adds: “If you understand the ethnic consumers, you could have five Christmases every year – so that’s five times the consumption boom.”

Yet, as intriguing as the above characteristics are, there is one other that may grab the attention of a start-up trying to stamp its mark on this audience. For, when it comes to brands, Britain’s ethnic minorities don’t often stray from a chosen path, so to speak. “What you find is that ethnic consumers are brand-loyal consumers. They don’t switch easily,” says Saraf. And the luxury car market is one where such behaviour is particularly visible, with the IPA research revealing that ethnic minorities are three times more likely to own a BMW.

That isn’t to say other brands have little to gain from this rigidity though, and the age factor comes back into play in this regard. “The people that drive Mercedes-Benz are predominantly Arabs, Asian and Chinese,” Saraf explains. “The second generation has started switching to BMW because they don’t want to drive what their dads are driving. But all of this is because the targeting happened early on and they captured quite a niche market.” And it will come as little surprise to learn that Jaguar is now tapping into this trend too.

Essentially then, an intrinsic part of successfully capturing the ethnic consumer is garnering a thorough understanding and appreciation of their culture, everyday needs and buying behaviour. That may sound akin to most modern marketing campaigns, but the other side of the coin is identifying the right channels through which to engage with this market, some of which are relatively unknown currently. Employing the help of a specialist agency is naturally a decent place to start, but there are some simple steps that a right-minded business owner can take to at least get off on the right foot.

“If I see something that has some sort of Arabic culture or a face, I will sit up and take notice,” says Saraf. “We see lots of direct marketing, but if I receive a direct marketing piece which is slightly different and has some sort of cultural images in it, I am going to open it, I am going to read it.” 

Delving further inside conventional target markets can also help reveal the little nuggets of information that could make all the difference to future marketing efforts. “If you look at companies like Procter & Gamble, they target based on age, so they have a product per age, rather than looking at how many black women or Chinese people fall within that age,” Saraf continues. “So I think marketeers are wasting quite a bit of the budget by not applying some sort of analytics.”

And with more businesses looking abroad than ever before, capturing the imagination of ethnic consumers on home soil should make life a little easier when venturing into geographies where such cultures are more prevalent. 

About the Author

Adam Pescod

Adam Pescod

EB's former editor, Pescod was tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories, all written with the entrepreneur in mind. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration. 

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