Geoscape Versailles Breakfast Club090605

Access the New Mainstream

Capitalizing on a Culturally Diverse America

Accessing the New

Mainstream

Arthur Rockwell, Vice President, Sales

Geoscape

Friday, June 5, 2009

TheVersailles Breakfast Club

Agenda

2 © Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353.

• The New Mainstream

• America‟s Secret Weapon

• Lifetime Profit Margin Contribution

• “The Long Tail”

• AMDS 2009 Demographic Data

• Who is Geoscape?

• Q&A

New American Reality

The face of America…is Multicultural!

Mainstream America

• A new reality and wake-up call

– What it means to be American has changed• Culturally and psychologically we are a diverse nation

• This will continue to evolve towards increasing diversity

• Many corporations still marginalize marketing to diverse cultural

segments

– Yet cultural segments represent fast growing opportunities

• Business is still looking for ways to better-serve and capitalize on this

trend

From 2000 to 2009…

• Nearly 13.4 million additional Hispanics– 38% growth during period

– 51% of the total population growth

• More than 4.1 million non-Hispanic blacks– 12% growth during period


• Over 3.7 million more Non-Hispanic Asian-Pacific Islanders– 36% growth during period


• 26 million more people overall– Nearly 21.3 million persons and 82% of growth from these 3 minority

segments

Source: Geoscape; American Marketscape DataStream: 2009 Series; Estimates as of July 1 2009.

Copyright© Geoscape®, www.geoscape.com, 1 (888) 211-9353. Page 5

HHs Median HH Income Mean HH Income Aggregate HH Income Aggregate Income

Total 118,293,887 $ 53,214 $ 66,338 $ 7,847,322,306,519 $ 8,080,469,566,868

White 97,617,470 $ 55,880 $ 68,468 $ 6,683,637,940,846 $ 6,845,430,654,775

Black 14,362,997 $ 35,843 $ 47,373 $ 680,412,381,876 $ 716,056,511,124

Asian & Pacific Islander 4,324,691 $ 69,654 $ 79,678 $ 344,581,718,498 $ 367,316,430,437

Hispanic 12,987,859 $ 44,073 $ 55,217 $ 717,155,262,027 $ 758,800,826,112

$69,654

$35,843

$55,880

$44,073

$53,214

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Asian Black White Hispanic Total

Household Income in 2009 by Culture Group

“Asians top the list in terms of annual household income, due in part to both the disproportionately large number in working age cohorts and to their higher levels of educational attainment.

Hispanics are about 17 percent below the overall median.”

Source: Geoscape, American Marketscape DataStream: 2009 Series.

Median Household Income


Hispanic Income by Ranges: 2009


“Over 37% of Hispanic households earn over $50,000 per year and 69% earn over $25,000 per year.”

less than $15,00016.0%

$15,000 to $24,99915.1%

$25,000 to $34,99913.9%$35,000 to $49,999

17.7%

$50,000 to $74,99918.3%

$75,000 to $99,9999.1%

$100,000 to $149,9996.5%

$150,000 or more3.3%


-

20,000,000,000

40,000,000,000

60,000,000,000

80,000,000,000

100,000,000,000

120,000,000,000

140,000,000,000

160,000,000,000

Food & Beverages

Shelter & Insurance

Utilities Housekeeping supplies

Furnishings And

Equipment

Apparel Transportation & Insurance

Health Care Entertainment Personal Care Products & Services

Personal Insurance &

Pensions

Hispanic Consumer Expenditures: 2009

“Hispanic spending is quite substantial in all major categories, especially due to their relative youth and larger average household size.”

Source: Geoscape, American Marketscape DataStream and Consumer Spending Dynamix™: 2009 Series.

Annual Expenditures Per Household in USD


America’s Secret Weapon

• Unlike other developed and developing countries, the U.S. has a history of embracing cultural diversity and this could lead to a strategic advantage in the world economy.

– “By 2030 Europe will have twice as many people over 65 as those under 15.”

– “European and Asian societies do not seem to be able to take in and assimilate people from strange and unfamiliar cultures in an era where their future rides on its ability to take in many more.”

– “By 2010 foreign students in the U.S. will get over 50% of Ph.D.’s awarded.”

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. 10

– “Half of all Silicon Valley start-ups have at least one founder who is

an immigrant or first generation American.”

– “Americans have almost always worried about their immigrants…but

these immigrants have gone on to become the backbone of the

American working class…America has been able to tap their energy,

manage their diversity, assimilate newcomers and move forward

economically. Ultimately, this is what sets [the U.S.] apart from other

historical powers…”

– Fareed Zakaria, The Post-American World

America’s Secret Weapon

Lifetime Profit Margin

Contribution

• LPMC is a metric that can help bring focus into a company‟s

decision to invest behind cultural diversity.

– Lifetime:

• Younger age at initial acquisition leads to potentially more years of relationship

– Profit Margin:

• Cost of acquisition could be lower as under-served consumers’ are acquired in a

less competitive environment, improving ROI and increasing margin

– Contribution:

• Compared to available alternatives, investment in cultural diversity could yield

higher returns

Aggregate Lifetime Spending per Household

0

0.5

1

1.5

2

2.5

3

3.5

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

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pen

din

g

Mill

ions (2008 $

)

Calendar Year - Life Expectancy

Total Expenditures

NH White

Black

Asian

Hispanic

0

50

100

150

200

250

300

350

400

450

500

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Food at Home & Away

NH White

Black

Asian

Hispanic

0

50

100

150

200

250

300

350

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Food at Home

NH White

Black

Asian

Hispanic

0

10

20

30

40

50

60

70

80

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Household Furnishings& Equipment

NH White

Black

Asian

Hispanic

0

100

200

300

400

500

600

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Transportation

NH White

Black

Asian

Hispanic

0

5

10

15

20

25

30

35

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Personal Care Products & Services

NH White

Black

Asian

Hispanic

0

20

40

60

80

100

120

2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063

Cu

mla

tive

Ho

use

ho

ld S

pen

din

g

Tho

usand

s (

2008 $

)


Apparel

NH White

Black

Asian

Hispanic

Aggregate spending over the lifespan of a Hispanic or

Asian household is usually greater than that of Non-

Hispanic White households

Median Age Life Expectancy

Non-Hispanic White 40 81

Hispanic 27 83

Asian 33 85

African American 30 77

Source: Geoscape modeling on various data inputs.

Ask yourself….

• How much of your current business is Hispanic? Asian? Black?

• How are you doing with unacculturated Latinos?

• Who might be your best customers?

• What is your true opportunity in culturally diverse segments?

The Long Tail

• The new mainstream is a myriad of niches– In the era of 3-network TV and bricks & mortar shopping, pop-culture meant marketers strived for “bit hits”

– In today’s era of diverse programming and over-abundant 24 / 7 product selection, the mass is made up of niches

• Marketers and business strategists have no choice but to

advance their micro-targeting capabilities to fully exploit the

opportunities

• “Many of our assumptions about popular taste are actually

artifacts of poor supply-and-demand matching—a market

response to inefficient distribution.”– Chris Anderson, The Long Tail

Long Tail Chart on Cultural

Diversity

Mass

Market

Pop

Culture Segmented Markets — Diverse Culture

Uni

t Sal

es

Product Types / Consumer Groups

“The proliferation of product variety and expansion of distribution channels increase

consumer choice and result in a greater complexity of offerings to satisfy a diversity of

needs and wants.:::

The outcome is that the sum of the mass-cultures rivals the size of the mass market.”

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353.

Demographic Data and

TrendsThe Emergence of The New Mainstream

Source: Geoscape; American Marketscape DataStream: 2009 Series and the U.S. Census Bureau. * 2000-2009-2014 numbers for Asian and Black are for non-Hispanic; 2009 and 2014

Estimates as of July 1.

Population by Ethnicity/Race 1940-2014

Note: Population in the Commonwealth of Puerto Rico (3.97 million) is not included in Hispanic population figures.

“By 2014 the population in the three largest ethnic groups will be more than 110.4 million and Hispanics will represent nearly half of that population.”

Asian & PI*

Black*

Hispanic

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1940 1950 1960 1970 1980 1990 2000 2010

Population 1940 1970 1980 1990 2000 2009 2014

Asian & PI* 254,918 980,337 3,500,439 6,994,034 10,410,556 14,133,634 15,694,304

Black* 12,865,518 22,580,289 26,495,025 29,284,605 33,707,230 37,861,980 39,967,766

Hispanic 1,858,024 9,589,216 14,608,673 21,898,546 35,238,481 48,628,991 54,780,913

Total 31,669,275 203,211,926 226,545,805 248,684,787 281,421,906 307,469,178 322,217,026


Other1

67.3%

Black1

12.3%

Asian & Pacific Islander1

4.6%

Hispanic15.8%

Commonwealth of Puerto Rico add'l 1.3%

U.S. Population: 2009 by Ethnic Group

Source: Geoscape, American Marketscape DataStream: 2009 Series.1 Non-Hispanic portion of race.

About one-third of America’s population is of either Asian, Black or Hispanic origin; these proportions vary dramatically at the state

and metropolitan area levels. Many companies include Puerto Rico within their U.S. marketing efforts, although it is not technically

part of the U.S.


Increasing Cultural Diversity

0%10%20%30%40%50%60%70%80%90%

100%

1940 1980 2020

Other Asian Black Hispanic

Source: US Census Bureau (1980 & 1990) and Geoscape (2020).

The “Non-Ethnic” market” is shrinking!

Hispanics may be any race, most are White (92.5%), Black (3.8%) or Native American (1.4%).


Growth 1990 to 2014 by Ethnicity/Race

The Non-Hispanic White population is a decreasing proportion of the U.S. population while Asians, Blacks and especially Hispanics are

forming a larger part of our nation.


75.8%

69.1%

65.2%63.8%

11.8% 12.0% 12.3% 12.4%

2.8% 3.7% 4.6% 4.9%

8.8%

12.5%

15.8%17.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

1990 2000 2009 2014

N-H White N-H Black N-H Asia & N-H PI Hispanic


Non-Hispanic Whites are the minority in an increasing

number of counties—316 in 2009—including some of the

largest like LA & Chicago.

Top 25 Counties

(Except Non-Hispanic White)

Los Angeles, CA

Cook, IL

Harris, TX

Miami-Dade, FL

Orange, CA

Dallas, TX

Kings, NY

Queens, NY

San Bernardino, CA

Riverside, CA

Bronx, NY

Bexar, TX

Santa Clara, CA

Broward, FL

Alameda, CA

Philadelphia, PA

New York, NY

Honolulu, HI

Prince George's, MD

Hidalgo, TX

El Paso, TX

Fresno, CA

Fulton, GA

Orange, FL

Shelby, TN

Majority-Minority Counties: 2009


Acculturation: Hispanicity™

“Acculturation is the process whereby immigrants acquire a new culture through language, customs, lifestyle, media usage and other practices—they retain elements of their home culture as well. For

Hispanics, Geoscape calls this characteristic Hispanicity.”

• HA1: Americanizado– English Dominant (nearly no Spanish)– Born in US; 3rd+ generation– Few Hispanic cultural practices

• HA2: Nueva Latina– English Preferred (some Spanish)– Born in U.S. 2nd generation– Some Hispanic cultural practices

often “retro-acculturate”

• HA3: Bi-cultural– Bi-Lingual (equal or nearly)– Immigrant as child or young adult– Many Hispanic cultural practices

• HA4: Hispano– Spanish Preferred (some English)– Immigrant as adult, in U.S. 10+ years– Pre-dominant Hispanic cultural practices

• HA5: Latinoamericana– Spanish Dominant (nearly no English)– Recent Immigrant as adult (less than 10 years ago)– Primarily Hispanic cultural practices– Identify with home country more so than U.S. Hispanic Source: Geoscape, American Marketscape DataStream: 2009 Series.


Hispanicity™

in 2009: Top 5 DMAs


“Recent immigrants have increased the portion of less acculturated HA5 Hispanics, while second and third generation Hispanics have increased the proportion of HA1 & HA2 Hispanics. Although Hispanic

population will increase in all segments, the future trend will have a steady proportion of HA5, increasing HA1-HA2, and decreasing HA3 and HA4.


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CHICAGO HOUSTON LOS ANGELES MIAMI-FT. LAUDERDALE

NEW YORK

15.3% 15.5% 15.7%

7.3%12.9%

26.8% 27.3% 26.9%

22.4%

27.0%

24.7% 25.9% 25.9%

22.7%

27.3%

17.9%18.2% 18.8%

18.2%

19.0%

18.2% 16.0% 15.6%

32.2%

16.4%

HA1: Americanizado HA2: Nueva Latina HA3: Bi-Cultural HA4: Hispano HA5: Latinoamericana

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Chicago Houston Los Angeles Miami-Ft. Lauderdale

New York

15.3% 15.3% 17.8%

6.2%

12.8%

24.6% 26.4%25.2%

27.5%

27.3%

14.7%15.2% 13.6%

15.8%

15.6%

22.2%19.9% 20.9%

22.6%

22.3%

23.3% 23.1% 22.5%27.9%

21.9%

English Dependent Bi-Lingual English Preferred Bi-Lingual English & Spanish Bi-Lingual Spanish Preferred Spanish Dependent

Hispanic Language use in 2009: Top DMAs

“Spanish language use varies among the top five DMAs, however Spanish is preferred by about half of Hispanics over Age 5 within each of these major metropolitan areas.”

Source: Geoscape, American Marketscape DataStream: 2009 Series.Copyright© Geoscape®, www.geoscape.com, 1 (888) 211-9353. Page 24

Hispanic Origin Pop 2009 % of Hispanic

Cuban 1,233,596 30.4%

Puerto Rican 808,164 19.9%

Mexican 659,476 16.3%

Colombian 278,531 6.9%

Dominican 158,073 3.9%

Nicaraguan 141,304 3.5%

Honduran 104,054 2.6%

Peruvian 100,384 2.5%

Venezuelan 96,099 2.4%

Guatemalan 79,242 2.0%

Ecuadorian 60,524 1.5%

Salvadoran 55,358 1.4%

Argentinean 51,893 1.3%

Panamanian 24,051 0.6%

Costa Rican 19,527 0.5%

Chilean 19,516 0.5%

Other Hispanic 165,392 4.1%

Total 4,055,184 100%

Hispanics in Florida are Cuban, right?


Cubans and Puerto Ricans are the Hispanic majorities in only two Florida counties each

whereas Mexican’s are the majority in 31.

Who is Geoscape?

Market Intelligence :: Intelligent Marketing :: Business Advantage

Geoscape Background

• Geoscape International, Inc. founded in ‟95 by Cesar Melgoza

• Geoscape Europe BV founded in „02

• Merged interests with Latin Force and Goldman Sachs and in June

‟07

– Now a Goldman Sachs portfolio company: Urban Investment Group

• Headquarters in Miami

27

Geoscape provides…

• Strategic Analytics

• Consulting Services

• Databases

• Market Intelligence Systems

to corporations seeking growth by capitalizing on opportunities in

culturally-diverse consumer and business segments.

Business Advantage

Intelligent MarketingMarket Intelligence

TransFirmation™

Conclusion

• Inaction could lead to missed opportunities to produce

growth

• Inefficiency is too expensive

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. 29

The Versailles Breakfast Club

• Questions?

• Comments?

Muchas gracias!

!

Access the New Mainstream

Arthur R. Rockwell

Vice President, Sales

[email protected]

1 (888) 211-9353

www.geoscape.com

Capitalizing on a Culturally Diverse America

Accessing the New

Mainstream