We the People: A Memo on Multiculturalism

Corporate America's leadersand the next president of the U.S.must put diversity on top of the agenda, says BusinessWeek reader Esther Novak

The recent election has probably settled one long-standing debate: It's worth investing in multicultural markets, whether to win a political campaign or business revenue.

In fact, the success of President-elect Barack Obama's campaign provides a case study for building a brand with appeal to nearly every demographic segment of American society. Two pieces of data that clearly informed Obama and his advisers as they plotted their campaign strategy are noteworthy of note for all C-suite residents, because they tackled them flawlessly.

First, as the U.S. Census has been showing for some time, we are an incredibly diverse nation—the ultimate "stew" of ingredients from every nationality, race, and creed. Second, the various segments of our population don't respond to a one-size-fits-all approach, whether it's getting out the vote or selling diapers. People respond to appreciation for their individuality, and when reached through their preferred channels.

Learning from Marketing 101

You might think this is first-year theory for any business-school student. And you might think your business is already addressing these needs within the multicultural market segments within your corporate "diversity" program.

Yes, a number of companies claim to address "special interest" communities—African, Asian, and Hispanic Americans; gay, lesbian, bisexual, and transgender individuals; Native Americans; disabled citizens; senior citizens; women. Some add other groups to this list, such as Arab Americans, veterans, etc.

However, for many companies, their approaches to these markets mainly arose from legal requirements such as Affirmative Action and Equal Employment Opportunity. While such measures drove a measure of progress toward inclusion, four decades later, sophisticated understanding of these markets and their consumers' behavior seems to have flown past the world view of many marketing departments.

Cultivating Cultural Savvy

To put it simply, merely including images of diverse peoples or translating some marketing materials into another language does not constitute an effective approach to potential customers of diverse cultures. Instead, savvy business leaders can help their teams understand that the market is more varied and nuanced—a richer version of America the Beautiful—than at first glance.

So, what insights should we bear in mind when considering multicultural markets? Start with these facts:

• About one in three U.S. residents is a minority. In fact, the minority population in the U.S. is larger than the total population of all but 11 countries.

• Minorities don't just live in urban areas. Nearly one in 10 U.S. counties is "majority-minority," having more than 50% minority residents, according to data released by the Census Bureau last August. As of July 2007, 302 of the nation's 3,141 counties had more people identifying themselves as non-white than those that labeled themselves white.

• Minority populations have more buying power and a bigger middle-class and affluent sector than you may realize. The University of Georgia's Selig Center for Economic Growth reports that the buying power of Hispanics exceeded $860 billion in 2007 and will grow to more than $1.2 trillion five years from now. For the same period, African Americans spent $845 billion with growth, to $1.1 trillion in five years, and Asian Americans $459 billion, with growth projected to rise to $670 billion.

• Core values and behavior are even more important than language when it comes to marketing to multicultural America. These include the role of family, connection to home country, respect for the elderly, the influence of community leaders, and the roles of faith, tradition, and cultural icons.

Additionally, for many first- and second-generation immigrants, acculturation has taken precedence over assimilation. The ability to retain core values while living in a dominant culture has trumped the old model of shedding native language and customs. "Commonalities" such as preference for emotional connection, grassroots, or digital communication, can be leveraged across multicultural segments for marketing efficiency and effectiveness.

Multicultural Stimulus

I'm not an economist, but I can guarantee you that when it comes time to "sell" a stimulus plan to the American public, the Obama administration will use the same kind of approach to America's diverse audiences it did in the campaign. Residents of Portuguese background in Newark's Ironbound district will hear about its benefits in their local papers and ward leaders; Vietnamese-Americans in Houston will likely receive face-to-face briefings in community center meetings; African Americans in Los Angeles may hear talk of the plan from the pulpits of their churches.

Additionally, the 10 million people with e-mail addresses in the Obama campaign database will be segmented, with messaging tailored to each cultural, ethnic and demographic group. Every venue, channel, social media platform, and messenger will be tapped to bolster the plan, whether it's the press, the Web, advertising, rallies, events, you name it, all filtering up toward local, county, state, and federal policymakers.

But it won't just be about delivering a message to targeted groups. The incoming Administration is sure to have "eyes and ears" responsible for identifying and assessing each group's needs, wants, and priorities—and striving, as much as possible, to find ways of showing how the stimulus package will address them. It will be a complex, often nonlinear process, and probably a good test of the President-elect and his team's discipline. In the end, however, the Administration will need to connect emotionally with diverse America, linking their values and dreams with policy and legislation that brings them out of the economic crisis.

Such a process is worth thinking about the next time you—whether a CEO, an entrepreneur, a manager, or the next U.S. President—deliver a speech, introduce a new product or idea, or appeal to your customers, investors, employees, or target audience.

Understanding the nuances of this great nation's many cultures, and adopting strategies to address them on their terms, can help open or advance a company's fortunes, and perhaps even give it a first-mover advantage with these brand-loyal markets—just as a certain savvy candidate did on Nov. 4.

Before it's here, it's on the Bloomberg Terminal.