‘Invisible’ Minority More American Than First Glance Suggests
November 18, 2008
As we prepare to usher in a new year and the newest crop of autos, we asked Thomas Tseng, a principal and co-founder of New American Dimensions, a Los Angeles-based multicultural marketing research organization, to discuss winning in the Asian American market.
Q: Tell us about the Asian American automobile market. Why should automakers care about Asian consumers?
A: The Asian American market, from an automotive perspective, is one of the most lucrative, but “hidden” consumer markets in the U.S. It’s already well established that Asian Americans have the country’s highest per capita income figures in the U.S., with strong purchasing power for upscale, luxury brands and products.
What’s often not as well understood or highlighted is the strong affinity many Asian Americans have for the automobile itself — particularly Japanese or European imports. For many Asian immigrants, among the many symbols that they have “made it” in the U.S. — in addition to homeownership, successful business, children’s higher education, etc. — a luxury automobile is a major emblem. This affinity is passed along to the second generation as well.
Q: How important is in-language marketing?
A: In-language advertising is important for a big chunk of the U.S. Asian market, but I also think it’s overplayed. For many auto manufacturers who want to successfully capitalize on this consumer, it’s important to contend with the 58 percent of the U.S. Asian population who are born outside the U.S. This is where there’s a lot of opportunity right now, it’s a group in their peak spending years — many who are Gen Xers, Baby Boomers and retirees. But when you look more closely at this 58 percent, it’s not as straightforward. First, there is the fact that you have a myriad of language groups — Mandarin, Cantonese, Korean, Vietnamese, etc. — so which target are you going to go after? Secondly, there’s a chunk of this 58 percent who arrived to the U.S. at a young age. So, culturally and linguistically, they may be more American than their birthplace suggests. To me, the biggest untapped opportunity are the 42 percent of the U.S. Asian market that is U.S. born — and linguistically, they overwhelmingly favor English — so they’re not watching KSCI or reading the World Journal. This is a segment made up largely of Millennials and Gen Xers, and they’re the ones who are increasingly shaping the marketplace.
Q: How can automakers better understand the market?
A: I think there’s a lot of information out there already via public census sources. So that’s the first step: culling together the profile of consumers and using that as a baseline to see where the opportunities are for automotive marketers.
The second step is to conduct some research (I’m obviously biased since that’s what we do) to answer some of those questions that aren’t attainable through census data. This will provide a strategic footing for the company. The final step is deciding whether to hire an (ad) agency or not. I can go a long time on whether Asian ad agencies offer any value or not but will save that for a future discussion. The short answer is: “It depends.”
Q: Where is the market going?
A: As I alluded, I see the market increasingly being shaped by younger consumers (and that’s not to say that there isn’t a major opportunity among the older segments). But in terms of starting trends and shaping attitudes, it’s the younger segments that will increasingly dictate how automakers should respond. There are a lot of macro-trends going on with this segment, too. It’s the D.I.Y. [do-it-yourself] ethos, the integration of car culture with lifestyle, the intersection of music, technology and driving — and numerous others too rich to detail here. And it’s all in a state of constant change, too.
Q: How do companies figure out where the market’s going?
A: Here I’m going to contradict myself a little. Research is a first step, but it’s not going to answer everything. I think more than anything, automakers and auto marketers need to immerse themselves in the culture of the consumers. There are networks of auto affinity groups, for instance (the youth import car culture is one of those), that those in the industry really need to be tracking, because many of the future trends in autos are incubated in these networks. And for the Asian consumer market, these networks are going to look very different than the general market.
Q: What do auto companies need to do if they want to reach the Asian market?
A: The first step is that there needs to be the recognition on the part of auto manufacturers that the U.S. Asian market is a legitimate, viable consumer base. That’s the first step, and it usually doesn’t happen unless there is a consumer advocate within the car companies who recognizes the opportunity. Once that’s been established, then some cultural immersion is required. Research, discussion with the cultural experts, etc., is all part of the due diligence required, even before a manufacturer commits to an advertising communications agency. (Ed. Note: See what Chrysler has done, page 9.)
Q: What do you drive?
A: When I turned in my leased Volvo XC90 this past summer, I wanted an upscale SUV but was seeking something a bit more environmentally friendly (befitting my California liberal sensibilities) and fuel efficient. So that narrowed my choices to the Lexus RX 400h hybrid — sensible, low-maintenance, practical but with all the amenities reflecting my professional background and standing. Believe me, I really wanted a Porsche Cayenne but couldn’t justify it at the end. Plus, my wife was dead set against it. Maybe if they had marketed to me, it would have put me over the tipping point.
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I have to say, Thomas’s statement “It’s already well established that Asian Americans have the country’s highest per capita income figures in the U.S.” doesn’t reflect my or any other refugee family’s situation. Maybe it reflects his upper-class background but a lot of Southeast Asians and a huge chunk of the immigration from mainland China (not Taiwanese businesspeople) does not have this amazing purchasing power he speaks of. To boot, the University of Maryland just concluded a study which found, as cited by the Los Angeles Times, “The median family income of Chinese Americans was $62,705, compared with the national median of $48,451. But they consistently earn lower incomes than whites at every education level, the study found.” (http://www.latimes.com/news/nationworld/nation/la-na-chinese14-2008nov14,0,2553767.story) How can this be? Maybe there are more workers per household. Thomas Tseng needs to do more research into the market so he can avoid making that kind of statement in the future.