Wei Zhang – Hank, to his friends -- is a 35-year-old computer network engineer. He arrived in Fremont, Calif., from China a year ago. Since his arrival, Hank has relied on friends from China who have been in the U.S. a few years to give him advice on what to buy. He also reads Chinese newspapers and watches Chinese TV programs to learn as much as he can. When possible, Hank buys products from companies with which he is familiar. But his choices are limited because there are so many brands here that Hank doesn’t yet know.

The Growth of Asian Americans

Asian Americans compose 14 million of the nation’s population in 2004. Four million Asian immigrants like Hank have come to the U.S. since 1990. If you had to decide whether to battle with competitors for their loyal customers or target these new and overlooked Asian American consumers, which would you choose?

Although Asian Americans are only the third largest minority group in the U.S. -- after Hispanics and African Americans -- their numbers are growing the fastest, largely as a result of immigration. And the population will continue to grow from its current total of 14 million. It is expected to triple by 2050, and top 40 million. With household size, disposable income, and education level all above the national averages, Asian Americans are a lucrative consumer group, contributing $363 billion in annual buying power to the U.S. economy in 2004. Many companies have awakened to the real value of targeting Asian American consumers. Are you ready to compete for your share of the market?

Learning the Basics

If you want to do business with Asian American consumers, you have to reach out to them. That’s not as difficult as it might sound. After you understand the basic dynamics of this vital market, you’ll see that targeting these consumers is a viable business strategy.

In 2004, more than half Asian Americans lived in just three states: California, New York, and Hawaii. 35 percent of Asian Americans reside in California.

• Six groups make up 88 percent of Asian Americans: Chinese, Filipinos, Asian Indians, Japanese, Koreans, and Vietnamese.
• Overall 70 percent of Asian Americans are immigrants, thus they still prefer speaking their native language to speaking English.
• Asian-language media vehicles such as television, print, radio, outdoor, online and direct mail are widely available in metropolitan cities.
• Specialty ad agencies are in the market to help you reach out to Asian American consumers.

A Deeper Understanding

"Asian American market" is a collective term. The population is diverse, and itcan be further divided into numerous subsegments based on three fundamental factors:

1. Ethnic Identification
2. Degree of assimilation
3. Language dependency

Over 15 Asian ethnic groups exists, the larger groups are the Chinese, Filipinos, Asian Indians, Koreans, Vietnamese, and Japanese. Although each group has its own language and multiple dialects, there are cultural commonalities, belief systems and core values unite them in many ways. For example, all groups share strong family values, cherish education, desire success in life and are very entrepreneurial.

Within each ethnic group, the length of time in the U.S. also separates individuals into different subsegments -- some Asian Americans were born and raised in the U.S.; some immigrated to the U.S. decades ago; and some arrived recently.

And language ability also differentiates the subsegments. "Native-language dependent" Asian Americans communicate exclusively in their native language. "Native-language preferred" refers to individuals who are bilingual in English and their native language but prefer to communicate in their native language. There are also Asian Americans who communicate only in English.

Immigration accounts about 60 percent of the increase in Asian American population over the past 25 years. The remainder of the growth is the result of children born to Asian American parents in the U.S. More than 65 percent of Chinese Americans in the U.S. today were born overseas whereas the percentage of foreign-born Vietnamese- and Korean-Americans is much higher, in the 75-80 percent range. As a result, in-language advertising is one of the most effective marketing tools to use in reaching these groups.

Questions To Ask In Targeting Asian American Consumers

Target One or All? With the diversity in the Asian American market, the issue of which segment -- or segments -- to target is crucial. It is important to set priorities based on relevant factors, including the size of target segment(s), the revenue potential of each segment, the segment’s propensity to purchase your product and budget availability.

How To Reach them? In addition to in-language media, an integrated marketing program including the use of events, public relations and community outreach will be most effective in reaching Asian American consumers

In-Language Or CrossOver Advertising? With segments such as the Filipinos and Asian Indians where a large proportion of the population speaks fluent English, companies often wonder: "Can we use our English ads to target these segments?" Is in-language in-culture advertising more effective, or is English cross-over advertising in general market media better? Or would a combination work best? The answer will depend on your product category and a careful identification of your target audience.

How to Target the Asian American Market

Start with strategic planning. No matter what the target market is -- the general market or the minority market -- strategic planning is necessary. Syndicated market research data may not be widely available in the Asian American market, but you should establish reasonable marketing objectives based on the allocated resources; do your diligence in understanding the market dynamics and competitive landscape. Don’t compromise on this process just because your targets speak a foreign language. Targeting Asian American requires a strong strategy.

Find the right partner. Hire a communications firm that truly understands Asian American consumers. Work with an agency partner that does quality work and knows the marketplace. Look for a firm staffed with a bilingual and bicultural workforce that understands the cultural values of the various segments of the market. Remember, cultural taboos exist, and mistakes can be expensive. Using an expert with linguistic abilities and cultural understanding will help you steer clear of cultural mistakes.

Be prepared. Depending on your products, you might explore opportunities to provide tailored services to fill the specialized needs of your Asian American customers. Many financial institutions, such as Wells Fargo, have installed Asian-language phone lines and staffed multilingual representatives at branches in Asian American neighborhoods. This has proved to be an effective tactic in providing quality customer service and cultivating customer loyalty.

Be aware. Even a modest start in providing cultural-awareness training to your workforce can prepare them to better serve the Asian American consumers. You’ll find that your Asian American customers appreciate these efforts, and they’ll keep coming back. In the early 1990s, we worked with Miller Brewing Co. to implement business-to-business programs targeting Korean grocery retailers. As a first step, we helped the company develop a cultural-awareness program. We taught sales-people as well as delivery drivers how to greet and do business with these important retailers.

Advertise in the Asian American media. Because more than two-thirds of Asian American consumers prefer to see ads in their native language and also in-language media is widely available, it makes perfect sense to market to Asian American consumers in a way that resonates with them, and in their preferred language. Also note that there are English-language media targeting English-speaking Asian Americans.

“Talk” to your customer via effective creative. Culturally insensitive or inappropriate creative treatment in advertisements can be detrimental to your business. Some companies choose to run their original English television commercial on Asian language television, and often the original script is translated literally into Asian languages. The problem is, most storylines of American commercials are centered on American jokes or slang that a recent Asian immigrant may not understand. Through the years, Fortune 500 companies have made some cultural faux pas which produced negative impressions and some resulted in a message that was baffling, comical or downright offensive. When it comes to communications, the skill is in the nuance.

Get involved. Involvement in the community will demonstrate your sincerity and commitment to serving Asian Americans. And community-based events can offer you the opportunities to interface with consumers. Many Asian holidays, such as the Lunar New Year, Moon Festival, and Filipino Independence Day, are good occasions for your involvement. And you can also partner with Asian professional and business organizations to outreach to specific audiences.

Secure the blessing of top management. It’s important for marketing managers to secure full support and commitment from senior management for an Asian American outreach initiative. By far, the biggest mistake companies make in Asian American market is a lack of long-term commitment to targeting the segment. Brand preference and customer loyalty take time to build. Success in the Asian American market does not come from a single stroke of luck; it is the result of strategic marketing and consistent communications efforts. Receiving senior management’s support is critical to success.

Checklist for Success

Get Ready for the Asian American market

• Have the right products & services
• Have a plan to build your brand
• Be ready to service your new customers
• Make sure senior management buys in and recognize the long term vision of your strategy
• Be prepared to champion the cause