| A hat that fits Companies adjusting marketing strategies to seize Latino market 04/05/2001 By Dianne SolĂs / The Dallas Morning News To understand status in Latino America, one must know one's sombreros.
So even before the 2000 U.S. Census declared that U.S. Latinos were roughly equal in population to African-Americans, John Tillotson had hired Victor Cornejo to retool his company's Stetson, that proud symbol of cowboy America.
The Mexico-born Mr. Cornejo fashioned several pricey designs, including a real winner lined with the image of Mexico's patron saint, the Virgin of Guadalupe. Sales ascended.
Corporate America is now busy digesting the nation's decennial headcount. Those such as Mr. Tillotson are patting themselves on the back for spotting the obvious: Their neighborhoods' complexions were changing. Those whose marketing went musty are playing catch-up, trying to come up with strategies to boost profits.
"The census puts it right in front of us," says Mr. Tillotson, head of Arena Brands Inc. in Garland. "The Latino segment of the market is good for us and we must continue to market to them."
The census says the nation's Latino population has swelled to 35.3 million, nearly a 60 percent jump from 1990. In Texas, a third of the state is Latino. And Dallas-Fort Worth is one of the fastest-growing areas in the nation, in part because of the Latino influx.
Those demographics have increased profits at companies such as Arena, which makes the Stetson and other types of Western wear.
They've buoyed the stock price of such companies as Univision Communications Inc. and Hispanic Broadcasting Corp., the nation's biggest broadcasters in the Spanish language.
And they present new opportunities for others, ranging from video giant Blockbuster to cyberportal Starmedia.com, from wireless carrier Cingular to the nation's temples of culture and art.
"The Dow Jones is down again, and the Hispanic market is up," says Felipe Korzenny, a principal at Cheskin Research in Redwood Shores, Calif. "So where do you put your money?"
Arena put its money in the Latino market. Though Latinos make up 12.5 percent of the population, they buy 30 percent of the company's Stetsons and 40 percent of its Western wear, which includes alligator boots and belts with silver buckles.
Arena's Mr. Cornejo has come up with styles distinguished as much by the dimples in the crown as the expense of the materials.
The Guadalupe hat, prompted by the practice of tucking the Virgin's image into a sombrero for spiritual protection, can soar to $500 when made with the finer felt blends from the fur of beavers, minks or chinchillas.
Mr. Cornejo, a serious 25-year-old, operates like a cultural anthropologist. He can tell you where a Latino is from by his sombrero. The cultural cues are flat brims, taco-shaped brims, high crowns, low crowns, leather hat bands and jeweled hat bands.
For the record, California Latinos prefer a traditional Mexican-style sombrero with a high crown and a so-called taco brim. Texas Latinos tend to buy a stylized version with a shorter crown and a wide, flat brim. Mexicans from the Texas-size state of Chihuahua like the hat that President Bush favors but with far more expensive materials.
"The high-quality hats are really the only sombreros that the Latinos buy," Mr. Cornejo says. "A good hat represents status in our culture."
Still growing
When the census figures were released, Spanish-language broadcasters received a boost in stock prices.
It's noteworthy because in this brutal bear market, the sagging broadcasting sector as a whole is expected to post losses for the year, according to First Call Corp., a Boston-based research house.
In Miami, at news division headquarters for Los Angeles-based Univision, network co-anchor Jorge Ramos seems flummoxed by the fuss over the census and the Latino growth spurt.
"I am just surprised that people are surprised," Mr. Ramos says.
In markets such as Los Angeles, Houston, Miami and New York, Univision, the nation's fifth-largest network, can bob up to the No. 1 or No. 2 perch in any given ratings period. That's why Mr. Ramos views his competition in a bilingual America as the English-language networks.
Despite this, Spanish-language media still get only a fraction of total advertising dollars, around 2 percent to 3 percent, or $2.38 billion annually, according to Hispanic Business magazine. "It is a very subtle prejudice," Mr. Ramos says.
In Dallas, Univision owns and operates KUVN-TV (Channel 23), and last December it purchased KSTR-TV (Channel 49).
Like Univision, Hispanic Broadcasting Corp. has had ratings upgrades from several Wall Street brokerages. McHenry Tichenor, president and CEO of the Dallas-based radio broadcasting company, calls the census "ammunition."
Mr. Tichenor will use it to push for higher advertising rates for his chain of 47 radio stations. The stations include KLNO-FM in Dallas and KSCA-FM in Los Angeles, the nation's largest Latino market.
To catch the swell in the Latino population, Hispanic Broadcasting has quadrupled in size from four years ago.
"We will probably be even more aggressive in finding radio stations to buy and convert them into Spanish stations," Mr. Tichenor says.
Younger market
Trolling through census data – block by block – is standard practice at Blockbuster Inc., the gigantic video-rental chain based in Dallas. That's why there are two Blockbuster stores less than a mile apart in East Dallas. One targets the Latino population; the other goes after a general market.
"Our best customers are adults, aged 18 to 34, with children," says Scott Parks, vice president of advertising.
The median Latino age is around 27 years – 12 years younger than the median age of a non-Hispanic white. Latinos of Mexican origin are even younger, with a median age of 25 years. Latinos also have larger families than the general population.
While Latino households have lower income levels than non-Hispanic white households ($31,000 compared with $44,000, according to the census), they spend heavily on video rentals. But in particular, they outspend the general population on DVD rentals, Blockbuster officials say.
New services
A recent Cheskin Research study found that nearly half of the Latino population surveyed had a cellular phone.
Capitalizing on that, Cingular Wireless – a joint venture of SBC Communications Inc. of San Antonio and BellSouth Corp. of Atlanta – announced last month that it had hooked up with a Latino cyberportal to offer its customers Spanish-language access to various Net services.
With Starmedia Network Inc., Cingular offers "Mi Ventana Movil," or "My Wireless Window" – a service that includes e-mail access, automatic alerts on stocks and news, and instant messaging.
"Marketing to the Latino population can no longer be a special project," says Adriana Kampfner, Starmedia's senior VP for global sales and business development. "People have to work it into their core strategy for growing market share."
Reaching out
To reach out to Latinos, the Dallas Museum of Art over the last three years has made a Latino or Latin American show a standard fixture. A large Mexican folk art exhibit comes this fall. And this summer, the annual teachers' workshop will focus on Hispanic art and literature.
Says museum spokeswoman Ellen Key, "We are certainly looking in every way possible to bring that culture into the museum. It's rich."
The imperative to appeal to Latinos may be even greater than the census showed.
Mr. Korzenny of Cheskin Research said he believes there could be a significant undercount because immigrants often take great pains to avoid government officials.
Mr. Ramos agrees. "I would not be surprised if the real figure is not 35 million but 37 to 38 million," he says.
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