Hispanics’ cellular bills higher than the national average
Scarborough Research, New York, has released a study showing that Hispanics spend more on their monthly household cellular phone service than the national average. According to the study, the average monthly household cellular bill for Hispanics is $67, which is more than 10 percent higher than the national average of $60. Nationally, 64 percent of Hispanics live in a household with a cellular phone subscription. This is virtually equal to the national cell phone penetration rate of 66 percent.
Hispanics also report spending more on their monthly household long distance and local telephone service bills. The average household long distance bill for Hispanics is $33 versus $27 for all consumers. Hispanics average $36 per month for local service, which is slightly higher than the national average of $34.
Nineteen percent of Hispanic consumers who said they or a member of their household subscribes to wireless service plan to switch carriers in the next year. They are 22 percent more likely than all wireless subscribers to do so.
“Hispanics are consuming products and services at a rate equal to, and, in certain instances, greater than the general population. These consumers, characterized as the ‘largest minority group’ in the 2000 Census, are in fact a consumer force to be reckoned with,” says Bob Cohen, president and CEO, Scarborough Research. “In the case of telecom, Hispanics tend to place great value on social and family ties, which makes being connected very important. This cultural nuance places Hispanics among the telecom industry’s best customers.”
Hispanics are 24 percent more likely than all consumers to have spent $150 or more on their monthly household cellular bill last month. They are 86 percent more likely than all consumers to spend $100 or more on their monthly long distance service and 41 percent more likely to spend $100 or more on their monthly local phone service.
The Scarborough study also found local market differences when it comes to household cell phone penetration among Hispanics. Miami and New York lead local Hispanic markets in cell phone penetration. Seventy-four percent of Hispanics in Miami and 71 percent in New York said they or a member of their household subscribes to cellular service.
“The growth of the Hispanic marketplace in the U.S. is a national phenomenon, but marketing to these consumers requires a local focus,” says Cohen. “Cultural differences, shopping patterns and language preferences are important factors that distinguish Hispanic segments and these are driven at the local market level. Through better understanding Hispanics where they live, marketers can maximize their multicultural budget, make more informed media decisions, streamline the marketing process and expand their brand’s reach.”
Data in this report is from Scarborough USA+ 2003 Release 1. The 2003 data on switching carriers is from Release 1 and represents six months of measurements. The other 2003 data represents 12 months. For more information visit www.scarborough.com .
Suburban African-Americans an underserved market
The growth in the number of suburban Blacks between 1990 and 2000 was 2.5 times the rate of whites, according to data compiled by The Hunter-Miller Group, a Chicago research firm. These 4.6 million households have median incomes up to 48.5 percent higher than Blacks who live in central cities. Almost 50 percent of Blacks with incomes of $75,000+ and 57 percent of those with incomes of $100,000+ live outside central cities. Furthermore, African-Americans who have moved to the suburbs are more likely to be highly educated home owners compared to their central-city peers. They have more disposable income to spend on luxury items and other goods that show they “have made it” but marketers are not fully acknowledging the strength of this segment and addressing it appropriately, a Hunter-Miller report maintains.
Demographically, suburban African-Americans: were nearly 14 million strong in 2000, with 5 percent growth between 1990 and 2000 compared to a 2 percent increase for whites moving to the suburbs (almost four out of every 10 Blacks [39 percent] live in the suburbs); represent 4.6 million households, or 34.7 percent of all Black households (13.4 million); are educated and more likely than Blacks in central city areas to have advanced educational achievements, more closely tracking the general population - 16.4 percent of suburban Blacks, ages 25+ years in 2002 had a Bachelor’s degree compared to 10 percent of those in central cities and 17.7 percent of all races, 6.9 percent of suburban Blacks, ages 25+ years in 2002 had Master’s, professional or doctorate degrees compared to 4.8 percent of those in central cities and 9 percent of all races; are more likely to be homeowners - home ownership among Blacks with household incomes of $75,000 or higher is 79.8 percent, nearly double the rate for those with household incomes less than $50,000 (39.9 percent) and significantly higher than the rate for all Blacks (47.1 percent).
Psychographically, suburban African-Americans: have moved to suburban areas with greater advantages as they have professionally advanced, much like other races; see a single-family home with a backyard and other suburban “advantages” as signs of success; generally maintain their racial identity, which can influence their purchases, contrary to the beliefs of some who think suburban Blacks completely adopt the behaviors of suburban whites; adapt to a more affluent lifestyle and purchase luxury items but remain an underserved market; want marketers to recognize their accomplishments and address them appropriately, taking into account both their racial identity and socioeconomic achievements; are more likely than other races to purchase certain branded and status symbol items which show the world that they have “made it” and have significant disposable income to acquire such items.
Many African-American tykes, tweens and teens who grow up in predominately white suburbs are more likely than their urban counterparts to desire an inclusive (with whites) lifestyle experience versus a “Black” lifestyle experience. As a trend, most young consumers will continue to celebrate Black culture, but lifestyle and personal accomplishments now become important defining characteristics.
Demographic trends point to increasing wealth among a growing African-American population, which will result in continued migration to the suburbs. Marketers cannot assume that campaigns targeted at the general suburban market or Blacks as homogeneous group will reach this segment. They must tailor messages to recognize the achievements of suburban Blacks (young and old) while taking into account that this group maintains its racial identity. For more information visit www.huntermillergroup.com .
Major restaurant chains are leading growth
Fast-food hamburger outlets are leading the recovery in the restaurant industry, after the weakest year in more than a decade, according to data from The NPD Group, Port Washington, N.Y. The brightest spots for the industry came in the last quarter, with November, the last month in the seasonal year, being the strongest month of the restaurant year. Traffic at fast-food hamburger restaurants was up 6 percent from September-November vs. the year earlier, and dollars were up 7 percent for the same period. The year ended with overall consumer spending for the industry up one percent for the 12 months ending November vs. the same time a year ago, but traffic still declined by 1 percent for the total industry.
The NPD Group reported gains in the last quarter of the restaurant year, September-November, for the first time in five quarters. Consumer spending for that quarter (September-November 2003) was up 2 percent vs. the same time a year ago and traffic was up 1/2 percent. “The industry still has yet to show strong growth. We had an uptick, driven by market leaders, but it’s not enough to get customers out of their homes in droves,” says Harry Balzer, vice president of The NPD Group.
Major chains are fueling the growth and getting Americans back to restaurants. The big chains account for about 50 percent of the total restaurant industry and they saw a 4 percent increase in traffic for the year ending November compared to the same time a year ago. Quick-service restaurant (QSR) chains and casual dining chains led the way with an increase in traffic of 5 percent.
Americans are doing breakfast and lunch at restaurants. New product introductions and marketing support led to increases in the cheaper dayparts of the restaurant industry. For the last seasonal quarter, September to November, fast-food restaurants saw an increase in traffic of 3 percent for breakfast and 4 percent for lunch, with dinner coming in flat. Traffic at casual dining restaurants was up 6 percent for lunch and for midscale restaurants it was up 1 percent.
People are spending more, but not much more. Average checks at restaurants were up just over 1 percent, below the 2 percent inflation rate. This slow growth rate partially reflects consumers’ shift towards visiting more often for breakfast and lunch, which are less expensive than dinner.
“This is our first indication in over a year that Americans are going out and buying meals at restaurants again. There was some concern in the last year that maybe we’re moving back to our homes for more meals…that restaurant usage had peaked. While the trend is not clear, this is a good sign for the industry,” says Balzer. For more information visit www.npd.com .
Young adults more willing to purchase insurance from non-agent resources
Baltimore-based Vertis announced the results of its Customer Focus 2004: Insurance study, which reveal that some consumer audiences are willing to purchase dental, health and life insurance through resources other than an agent. “With both life and dental insurance purchases, Generation X adults [28-39] were more willing than the average adult to consider utilizing the Internet, telephone or direct mail to initiate their policies,” says Therese Mulvey, vice president, marketing research, at Vertis. “The results of the study show that Generation X adults are 10 percent more likely than the average adult to purchase life insurance and 7 percent more likely to purchase dental insurance through channels other than the insurance agent.”
The trend continues among Generation Y (18-27) adults in their purchases of both health and dental insurance. The Customer Focus 2004: Insurance study shows that these adults are 7 percent more likely than the average adult to purchase health insurance and 8 percent more likely to purchase dental insurance without the use of an agent.
The study shows the following additional findings, which provide insight into the differences in consumers’ insurance purchase plans and trends.
Insurance interests of Generation X adults: 20 percent of this group would consider purchasing high-face life insurance, 5 percent more than the average adult; 10 percent more Generation X adults than average adults consider purchasing mortgage insurance; 5 percent more Generation X adults would consider purchasing identity theft insurance than average adults; juvenile whole life insurance is also a priority, as 15 percent of Generation X adults, compared to 9 percent of average adults, would consider its purchase; of the Generation X adults who would consider purchasing insurance products direct, over 50 percent expressed that they would consider purchasing life or dental insurance from the Internet, phone or direct mail instead of their agent; in the next 12 months 4 percent more Generation X adults than the average adult plan to get a price quote for life insurance on the Internet.
Potential insurance purchases by Generation Y adults: 44 percent of Generation Y adults would consider purchasing long-term insurance, 13 percent more than the average adult; hospital insurance, which provides for emergency cash when hospitalized for outpatient surgery, is considered by 46 percent of this group, 16 percent more than average adults; 14 percent of these individuals are inclined to purchase insurance for their pets, 7 percent more than the average adult; of the Generation Y adults that would consider purchasing insurance products direct, over 50 percent expressed that they would consider purchasing health or dental from the Internet, phone or direct mail instead of their agent; 32 percent of Generation Y adults and 28 percent of adults with annual household incomes between $50,000 and $75,000 indicated that they would also consider using financial products or services from an insurance company.
The impact of insurance direct mail: 26 percent of adults with household incomes of $50,000 to $75,000 reported that they read insurance direct mail in 2003, reflecting an 11 percent increase from adults surveyed in 2002; 70 percent of adults surveyed indicated that they are more likely to open insurance direct mail if their name is on the front; timing, an interesting-looking package, one that conveys a sense of importance, and special offers or discounts prompt over 50 percent of adults to open insurance direct mail; weekly direct mail readership has increased 6 percent from 2002 to 2003 among adults with household incomes of $75,000 or higher.
Services important to insurance consumers: 35 percent of adults with household incomes of $75,000 or higher felt that a knowledgeable agent was the most important service provided by an insurance company; 20 percent of adults felt that 24-hour accessibility is most important; 19 percent of adults indicated that prompt claim payments were the most important service while 16 percent felt that courteous customer service was the highest priority; only 3 percent of adults felt that online accessibility was the most important service. For more information visit www.vertisinc.com .
Almost half of Americans have tried low-carb diets
Forty percent of Americans have personally tried to lose weight using a low-carbohydrate diet, according to a poll by FGI Research, Chapel Hill, N.C. About 60 percent of 927 respondents indicated that they have never personally tried this kind of diet program.
Despite the current focus in the media on the Atkins diet, the majority (46.9 percent) of those who have tried a low-carb diet selected a different diet program. A small percentage had tried Atkins as well as some other program, with less than 40 percent having used the Atkins program exclusively.
More than three-fourths (79 percent) of those who had tried a low-carbohydrate diet indicated that they were successful in losing weight on this diet. Similarly, among those who have not tried low-carb diets, almost three-fourths (69 percent) said that they believed low-carb diets can help people lose weight, even though they had not had personal experience with this.
So, it would seem that the majority of Americans are sold on the idea of low-carbohydrate diets as a way to lose weight. This is a big change from even just a few years ago. However, the issue of these types of diets from an overall health perspective seems to still be on the table for many consumers: half of those surveyed indicated that the healthfulness of the diet depended upon the specific diet plan. However, just fewer than 34 percent said that they believed these diets are not healthy. Only about 16 percent believe these diets are healthy, without qualifying the statement by diet plan.
The FGI Research Poll was conducted online within the U.S. during February among a nationwide cross-section of approximately 921 adults. For more information visit www.fgiresearch.com .