TITLE INSTITUTION NY. 87 - ERIC · The Key to Successful Advertising. Hispanic Expertise. Targeting Hispanics through Media. Big Business Comes on Board. Silver Screens Moving Beyond

DOCUMENT RESUME

ED 292 936 UD 026 106

TITLE Windows of Opportunity: How Business Invests in U.S.Hispanic Markets. Volume II: Business Development.

INSTITUTION Hispanic Policy Development Project, Inc., New York,NY.

PUB DATE 87NOTE 96p.; For Volume I, see UD 026 105. Photographs may

not reproduce clearly.PUB TYPE Reference Materials - Directories/Catalogs (132) --

Reports - Descriptive (141)

EDRS PRICE 2201/PC04 Plus Postage.DESCkLPTORS Advertising; *Business Administration; *Consumer

Education; *employer Attitudes; *Employer EmployeeRelationship; Employment Projections;Entrepreneurship; *Hispanic Americans; Investment;*Labor Market; Marketing; Population Trends;Underemployment

ABSTRACTThis is volume 2 of a two-volume series that

addresses the critical need to forge closer ties between corporateAmerica and Hispanic Americans. Volume 2 presents strategies forinvolving Hispanics in business. Techniques are given for developingbusinesses that will tap the Hispanic population as consumers andworkers. The key elements of this strategy are the following: (1)recognizing the significance of the Hispanic market; (2) securingcommitment from top management; (3) providing technical assistanceand financial support; (4) targeting specific populations inmarketing and in business development; (5) engaging Hispanic expertson staff and as contractors; and (6) encouraging Hispanics andnon-Hispanics to invest in each other. Descriptions and evaluationsof programs and initiatives that corporations are undertaking to tapand serve the Hispanic community are included. Photographs and tablesillustrate the text. The following information is provided forinterested companies: (1) a list of Hispanic advertising agencies (2)a list of the 20 largest Hispanic markets in the United States and(3) a map illustrating the concentration of the United StatesHispanic population. (VM)

**********************************************************************Reproductions supplied by EDRS are the best that can be made

from the original document.***********************************************************************

SponsorsARCO

General Telephone of CaliforniaMountain Bell FoundationPacific BellJCPenney Company, Inc.Security Pacific National BankAmoco Foundation, Inc.IBM CorporationSpanish International

Communications CorporationTelemundo7 Up/RC Bottling Companies

of Southern California

In association with the Aspen Institute for Humanistic Studies

4

WINDOWSOF

OPPORTUNITY

How BusinessInvests in

U.S. Hispanic Markets

Volume One: Human DevelopmentVolume Two: Business Development

Published by the Hispanic Policy Development ProjectNew York Washington

5

4,

What's At StakeWindows of Opportunity: How Business Invests in U.S. Hispanic

Markets is a report to the corporate community on what is at stakeand what some companies are doing about it.

These two volumes represent an appeal not only to the conscienceof of Corporate America, but to its hard business sense as well.

Volume I speaks to preparing Hispanics to participate fully in U.S.society. Volume II deals with the bottom line issues of marketing toHispanic consumers and developing the Hispanic business sector.

What's At Stake:

A rapidly expanding 120-billion-dollar domestic market of brand-loyal Hispanics, a market that is relatively untapped

An international market of more than 550 million Spanish-speakingconsumers in Latin America by the turn of the century

A shortage of the prepared workers vital to maintaining the U.S.international competitive position

Long range business losses and societal costs if Hispanic citizens arenot prepared and provided with the opportunity to become fully pro-ductive adults and knowledgeable consumers

8

BUSINESS DEVELOPMENT

WINDOWS OF OPPORTUNITY

Table of ContentsBusiness Development

What's at Stake i

Introduction: Business Development iv

The Facts vi

The Challenges vii

The Programs:Windows on Marketing,Purchasing and Contracting,Investment, and Joint Venturing

Distributorships; FranchisesThe Lesson of the Eight-Ounce Can

The Key to Successful AdvertisingHispanic Expertise

Targeting Hispanics through MediaBig Business Comes on Board

Silver ScreensMoving Beyond Stereotypes

JCPenneyIt Takes Only One

910

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4

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Von's "Tianguis" Low Income HousingThe New Mercado 12 A New Investment Opportunity 30

National Hispanic Corporate Council Pacific Bell/HACERA Hispanic Marketing Network 13 A Statement of Mutual Cooperation 32

AT&T Minority SubcontractingTaking the Show on the Road 14 Developing Assets 33

Telefono Hispanic Advertising Agencies 34Meeting Hispanic Consumers' Communication Needs 16

The 20 Largest Hispanic Markets 36Hispanic BusinessRevealing a Well Kept Secret 18 Concentration of the Hispanic Population

in the United States (map) 37Joint VentureAcross the Alley from the Alamo 20

Host InternationalJoint Venturing in Florida 22

Startup and Working CapitalAmoco Venture Capital Company 24

Local Initiative Support CorporationRebuilding Neighborhoods and Local Economies 25

Minority Purchasing ProgramsUsing Hispanic Suppliers 26

J2

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Business Developmenti"As the Hispanic community grows and develops,

we want to grow with it. We want to be there, not only toprovide quality products and services needed for Hispanicbusinesses and families but also to be a working partner inHispanic communities."

Donald E. PetersenBoard Chairman and

Chief Executive OfficerFord Motor Company

Ford Motor Company is not alone in its assessment of both thepotential of the Hispanic consumer market$80 billion plus today,and growingand the opportunities afforded corporate America byHispanic professional and service businesses. A number of compa-nies have begun to strengthen their ties to the Hispanic domesticmarkets through joint ventures, minority vending programs, and theconsultant services of Hispanic lawyers, accountants, and publicrelations, marketing, and advertising professionals. Moreover, busi-nesses that wish to enter or expand their Latin American and Carib-bean markets are finding Hispanic specialists an invaluable resource.

But business leaders would be the first to agree tha they wereslow to recognize the strength of the Hispanic market and that oftentheir initial efforts to tap it were unsure or ill conceived. Somebusinesses failed to realize that promotional strategies aimed atBlacks might not produce results in the Hispanic communities; all"minorities" are not the same. Other marketing campaigns paid scantattention to differences between the Hispanic subgroups; all Hispan-ics are not the same. At best they were ineffective in reaching theHispanic consumer; at worst they provided Hispanics with someamusing but embarrassing translation bloopers. "Pregnant" tooth-paste and "cars that don't go" are two that Hispanics continue tochuckle over.

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Good corporate managers make quick corrections, however, andso today we see that Hispanic marketing strategies are becomingincreasingly sophisticated. More corporations are placing qualifiedHispanics on staff in positions of influence; more are using theservices of Hispanic specialists and experts.

Joint venturing and vending programs, on the other hand, havemoved at a slower pace, in part because it takes time to build acommunication network with Hispanic entrepreneurs, and in partbecause there is a reluctance to tamper with long established net-worRs. Corporations that have taken the initiative, paid specialattention, and provided technical assistance to vendors where neces-sary have created opportunities that ha "e proved mutually benefi-cial. While the programs in this booklet demonstrate a wide varietyof strategies to reach and develop the Hispanic markets and supportHispanic business, they share many of the following key elements:

Recognizing the significance of the Hispanic market.Securing commitment from top managment.Providing technical assistance and financial support(venture capital/contracts) as indicated.Targeting speciiic populations in marketing and inbusiness development.Engaging Hispanic expert professionals on staff and %,.(sContractors.Encouraging Hispanics and non-Hispanics to invest in eachother and grow together.

The programs and ventures described in Volume II do notrepresent all the many initiatives corporations are undertaking toreach out to the Hispanic market and to support the development ofthe Hispanic business sector. But these programs are the front of agrowing corporate movement which seeks to build strong andenduring partnerships with the Hispanic communities of this nation.

L_


vi 17

The Facts

The Hispanic population in the United States is composed ofdistinct groups who trace their roots to Mexico, the Caribbean,Central America, South America, and Spain. There are great diversi-ties within and among these groups, but in a number of respects, theiroverall statistics can be distinguished from other groups in the U.S.population. According to recent government reports, here are somefacts about Hispanics:

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The Challenges

As the general population ages, Hispanics will become themajority of consumers and the U.S. labor force in many urbanmarkets, and a rising percentage of the population in many otherparts of the nation. The future and prosperity of these communitiesand the United States itself will be correspondingly related to the de-velopment and progress of their Hispanic populations. Based onrecent government reports and an excellent analysis, produced bythe United States Hispanic Chamber of Commerce, of the latestavailable data drawn from the U.S. Census survey of Hispanicbusiness in 1982, here are some challenges:

Reaching Hispanic Markets

The aggregate of incomes for all Hispanics totaled about $114billion in 1985.

Hispanic market advertising expenditures totaled $398 million in1986, according to Hispanic Business magazine.

Hispanic consumers are aware of and lo34l to brand products.

The HiSpanic markets are segmented by recency of migration,sub-group differences, socioeconomic differences, and language.

U.S.-born Hispanics are dominant in the English language, andfrequently are bilingual. Most foreign-born youth are dominant inSpanish. But after about 10 years in the United States, the vastmajority have made English their everyday personal language.

Supporting Hispanic Business Development

The number of U.S. Hispanic firms jumped from 219,355 in 1977 toabout 273,000 in 1982. The number of firms may have increased to340,000, or as much as 23.6 percent, between 1982 and 1987. By 1990,

19


they may increase to about 386,000.

Hispanic firms that grossed $1 million or more accounted for a littlemore than one-third of all Hispanic gross receipts, but were only .06of the total number of firms; 34% of Hispanic firms grossed less than$5,000.

Hispanic business people, especially those with firms located indepressed areas, report that access to capital is their greatest obstacleto growth.

Hispanic businesses operate overwhelmingly-94%as individualproprietorships. In 1982, this group accounted for 56% of grossreceipts. Partnerships accounted for 4% of the businesses and 11% ofthe gross receipts. Corporations accounted for only 2 percent of allHispanic businesses, but they generated 33% of gross receipts.

Hispanic businesses are concentrated in just a few states. Over 70%collectively are located in California, Texas, Florida, New York, andNew Mexico.

The gross sales of Hispanic businesses in just five metropolitanareasLos Angeles, Miami, New York, San Francisco-Bay Area, andSan Antoniocollectively totaled 44% of all Hispanic enterprise inthe country in 1982.

The Hispanic business sector in Los Angeles was the leading pro-ducer of total sales among all cities in 1982, but today Miami mayrank first in sales.

In addition to a steady growth of new businesses and revenues inthe traditionally Hispanic areas, Louisiana and the states aroundWashington, D.C., will be strong growth areas for the rest of thedecade.

The U.S. Hispanic business sector is expected to gross close to $20billion in revenues in 1987, andparalleling the growth of nationalbusiness incometo increase to $25 billion by1990.

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vii

Windows on Marketing,Purchasing and Contracting,

Investment, and Joint Venturing

=0.1111M

Distributorships/FranchisesThe Lesson of the Eight-Ounce Can

"Carlos de la Cruz attributeshis success to an understand-ing of Cuban consumers. Hepressured Anheuser-Busch touse advertising that reflectedtheir reality, their culture,their accent."

You don't have to be His-panic to sell to Hispanic consum-ers, but business persons -,no gomano-a-mano with their compe-tition to attract Hispanic con-sumers had better have excellentHispanic advisors on board ifthey themselves are not.

The three year Battle of theDade County Beer Distributors,according to Al Diaz of theMiami Herald, is instructive.

Randy Moret was raised inan Atlanta family that had madeits money in beer and liquor sincethe repeal of prohibition. In 1972he joined in the family traditionand bought his own Miller Beerdistributorship in Dade County.

22

Be sold Miller and Lowenbrau.Trouble for Moret began in

1984 when Carlos de la Cruzbought the Anheuser-Eusch dis-tributorship for Central Dade,where he sold Budweiser andMichelob. Although he had abackground in business, de laCruz had never sold a bottle ofbeer. He was, however, Cuban-born and well connected in theCuban community.

When de la Cruz took overthe distributorship, Anheuser-Busch had 31 percent of the mar-ket. Two years later that marketshare had increased to 40 percentand Miller was steadily losingground.

Carlos de la Cruz attributeshis success to an understandingor Cuban consumers. He pres-suree Anh.euser-Busch to use ad-vertising that reflected their.reality, their culture, and theiraccent, and he scrutinized adagency story boards before anyadvertising was produced. He

made himself visible in Cubancommunity affairs, assuminghigh-profile leadership roles.

And then he persuadedAnheuser-Busch to ship thesmaller eight-ounce cans ofBudweiser. "Cubans think it'sneat to put eight-ounce cans onthe boat," de la Cruz says. "Theydon't get warm in your hand."

De la Cruz is now Anheuser-Busch's largest distributor ofeight-ounce cans in the UnitedStates.

When Randy Moret decidedto sell his distributorship, Millerlet him know that they wantedhim to find an Hispanic buyer.Moret sold to de la Cruz's gen-eral manager and his partner,both Cubans.

Miller's promotion now fol-lows the de la Cruz model. Millerhas made its first Spanish lan-guage television commercial inSouth Florida, and for the firsttime Miller will sell eight-ouncecans. A new chapter of the mano-


a-mano has commenced.De la Cruz says the lesson for

other companies is that "theremust be Hispanics in top man-agement who understand thelocal culture."

Randy Moret would beamong the first to agree. Withtime on his hands and moneyfrom the sale in his pocket, Moretis spending a lot of time on hisboat fishing...with eight-ouncecans aboard that don't get warmin the

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3

Wnvoows OF OPPORTUNITY

The Key to SuccessfulAdvertisingHispanic Expertise

"...gross sales rose from about$600,000 in 1981 to $13.5million by the close of 1986..."

Lionel Sosa

Hispanics experienced incapturing and retaining the at-tention of the Hispanic consumerhave become hot commodities,as recognition of the Hispanicmarket potential grows and asmedia targeting Latinos, in bothSpanish and English, proliferate.

More and more mainstreamadvertising agencies are eitherestablishing their own Hispanicdivisions staffed by Hispanics orforming relationships with agen-cies specializing in the Hispanicmarket. Indeed Hispanic ownedadvertising agencies are amongthe nation's fastest growing His-

panic-owned companies (see liston pages 34-35).

Sosa &Associates of San An-tonio, Texas, is a case in point. Itstood number four in the Nov-ember 1986 issue of HispanicBusiness magazine's listing ofthe 100 Fastest Growing Compa-nies.

Established in 1980 by LionelSosa, the agency's gross salesrose from about $600,000 in 1981to $13.5 million by the close of1986.

In January of 1987, Sosacounted Anheuser-Busch, St.Louis Ford Division, Ford MotorCompany, Hiram-Walker Inc.,Windsor, the Kroeger Company,the U.S. Army, and Westing-house Electric Corporationamong his many clientsall

riser.:.SalUtia 'Pueblo!) Puertorriquerio

`en-elite Dia taa'Especial.

ILA

4t"

Budweiser ad created by Castor Spanish International, Inc.

companies, in Sosa'swords, reported in His-panic Business, "lookingat the potential theyhave in communicatingto the Hispanic." Sosaestimates that the ad-vertising market isgrowing approximately25 percent per year.

In response to thatgrowth potential, spon-sors and advertisingagencies are taking fulladvantage of all ve-hicles to attract the His-panic consumertele-vision, newspapers,magazines, radio, directmail, catalogs, coupon-ing, posters, and bill-bor,rds are all em-

The 34 Leading HispanicMarket Advertisers-1986(Expenditures in Millions)

AdvertisingHispanic Market

Company

Procter & Gamble Co. $8.0Philip Morris Inc. 7.5Anheuser -Busch Cos. 6.5McDonald's Corp. 6.3Adolf Coors Co. 4.0Johnson &Johnson 3.5Colgate-Palmolive Co. 3.0Ford Motor Co. 3.0Goya Foods, Inc. 3.0Sears, Roebuck & Co. 3.0RJR/Nabisco 2.5American Tel. & 2.5Dart & Kraft 2.5General Motors Corp. 22Metropolitan Life Ins. Co. 2.0Coca-Cola Co. 2.0Wendy's International 2.0Sedano's Supermarkets 2.0U.S. Army 1.9Ster1 Drug 1.8Amer. Home Products Corp. 1.7General Mills 1.7Greyhound Corp. 1.5Eastern Airlines 1.5PepsiCo Inc. 1.4Campbell Soup Co. 1.4Warner-Lambert Co. 1.4Winn Dixie 12JCPenney Co. 12Padfic Bell 12Kimberly-Clark Corp. 1.0Beatrice Cos. 1.0Nestle Enterprises 1.0Burdines 1.0

Reprinted with permission, HispanicBusiness, Inc.

ployed. Agencies are not only de-signing campaigns to move theirclients' products and services,they are also emphasizing insti-tutional approaches that bolstertheir clients' images among His-panics and support their com-munity relations efforts.

Castor Fernandez, Presidentof Castor Spanish International,a leading New York-based His-panic advertising agency, likeSosa is confident that Hispanic-market advertising is a growthindustry. Fernandez maintainsoffices in Los Angeles, San Fran-cisco, San Antonio, Atlanta, NewYork, and Miami, to serve a list ofclients that includes Anheuser-Busch products, Coca-Cola softdrinks, Southland 7-ElevenStores, Burger King, Nabisco,

and Tambrands.Fernandez feels that main-

stream business is just beginningto awaken to the potential of theHispanic market and to under-stand its complexity.

"It's a segmented market,"Fernandez says. "Hispanicshave the money but you have tosay the proper thing to them inthe proper way. You have toknow their foods, music, and tra-ditions-you have to know whatkind of Spanish to speak and, toreach some market segments,you have to speak English."

On survey after survey, His-panics have shown themselvesto be brand loyal. The businesseslisted on this page are investingin the loyalty of Hispanic con-sumers.


Hispanic MarketAdvertising Expen-ditures* (1986)

$ inMedia millions

National TV $64.0(Spanish InternationalNetwork/SIN)

National 46.8Radio

Local TV 78.0(SIN)

Local Radio 83.2

Independent 42.3TV

Print 33.2

Outdoors 12.0

Promotion 35.0

Transit 3.5

Total $398.0

* Spanish Language



Targeting Hispanics through MediaBig Business Comes On Board"Our mission is to be the

.,fortnost Spanish-language com-munications company in theUnited States, improUing thequality of life and economicwell being of U.S. Hispanicsthrough mass media informa-tion, education, and entertain -ment."

Irvine 0. Hockaday, Jr.President, Hallmark

Mainstream 'U.S: businessgenerally has overlooked, untilrecently, the potential of mediatailored to Hispanic markets. Anetwork of such media has exist-ed for some time, but for the mostpart outlets were owned andmanaged as small businesses byHispanics, or controlled by for-eign interestsinterests that hadcultivated the U.S. Hispanicmarket for 25 years.

Over the past decade, how-ever, the picture has changed,and since 1984 the pace of thatchange has accelerated.

PAGE 6 28

Hallmark Cards Incorporated/First Chicago Venture Capital:SICC/Bahia TV Stations

Hallmark Cards and FirstChicago Venture Capital made along-term commitment to theSpanish-language format whenthey purchased 11 Spanish-lan-guage television stations formore than $300 million. Six ma-jor stations included in the saleare WXTV in New York, KMEXin Los Angeles, KFTV in Fresno,WLTV in Miami, KWEX in SanAntonio (formerly SICC), andKDTV in San Francisco (formerlyBahia). Denver, Philadelphia,Austin, Hartford, and Bak-ersfield are sites of the group'sfive low-power stations pur-chased from SICC.

Gannett:El DiariolLa Prensa

In 1981 Gannett acquired ElDiario/La Prensa and entered theHispanic news arena. El Diario,one of the nation's oldest Spanishlanguage newspapers, is thelargest serving the greater New

York City market. Gannett intro-duced modern production tech-nology, expanded the paper'snational and international cover-age, and explored ways ofextending its penetration into thediverse groups of Hispanics thatconstitute the complex NewYork Latino market.

Carlos Ramirez, Presidentand Publisher of El Diario/LaPrensa, says that Gannett hasmade a commitment to Hispan-ics, and they have recognizedthat the Hispanic population isgrowing five times as fast as therest. We are their foot in thedoor."

Arturo Villar/Hycliff Partners:Vista--Focus on the UpscaleMarket

In only one year, Vista pub-lisher Arturo Villar has made hiscreation the largest Hispanicmagazine in the United States.Vista with a circulation of 1.3millionis a Parade-type insertdistributed by 26 newspapersacross the country.

In 1986 Hycliff Partners,based in New York, became in-terested in the magazine andinvested in Vista through itsventure capital fund. DavidNutt, one of the Hycliff partners,is enthusiastic about Vista anduntroubled by any doubt that itscirculation and advertising reve-nues will continue to expand."Upwardly mobile Hispanicsare an untapped market," Nuttsays. 'Just a quick scan of the de-mography makes totally dearthat the growth potential of theVista audience is enormous."

Villar has aimed Vista at theyoung, bilingual, US.-educatedHispanics who prefer to read inEnglish, a segment of the His-panic market that has been virtu-ally ignored. "These peoplehaven't lost their identity as His-panics," Villar explains. "Theystill eat Hispanic food, have ex-tended families, and give abra-zos. The only thing is that func-tionally they are not very goodwith the Spanish language."

Vista offers its readers a mixof serious articles on issues thataffect Hispanics, upbeat storiesabout entertainment and sportsfigures and other Hispanic high

129

achievers, and features on cook-ing and culture.

The recipe works. Today ad-vertising pages account for 50percent of the magazine. Vista ispaying its way while showingthe way to attract the upwardlymobile Hispanic.

Reliance Group Holding Inc.:TelemundoThe New Net-work Contender

Saul R.:Steinberg, Chairmanof the Reliance Group, has confi-dence in the Hispanic market.Steinberg entered the field inDecember 1986 when he ac-quired two Spanish languagetelevision stations, in Miami andPuerto Rico, in the purchase ofJohn Blair and Company. He hassince then acquired Spanish tele-vision stations in New York, LosAngeles, and San Francisco-SanJose, giving the network stationsin four of the five largest U.S. His-anic markets. A Houston-

Galveston station is scheduled tobegin airing in January 1988.

In addition to owned sta-tions, Telemundo has affiliates inChicago-Milwaukee, McAllen-Brownsville, and Denver, andplans tp further expand its affili-

30

ate line-up to include stations inkey Hispanic markets.

Telemundo is producingoriginal programming gearedtoward the needs and lifestylesof Hispanics living in the UnitedStates. The network also syndi-cates Spanish-language televi-sion programming internation-ally.

Telemundo is seriously chal-lenging the number one TV net-work, Univision, and the compe-tition of such major players is cer-tain to generate both interest anddollars.

Spanish Air Waves:Tichenor Media System Inc.

The Texas-based company,Tichenor Media System Inc.(TMS), is the largest Spanish-language radio chain in theUnited States. Within the lastyear TMS increased its lead byadding WADO in New York(purchased for $20 million, thehighest price ever paid for aSpanish language radio station)and WOJO in Chicago to thechain that includes stations inCorpus Christi, El Paso, Hous-ton, San Antonio, and thecompany's home city, Harlin-gen. The company intends to buystations in Los Angeles and Mi-ami. Says Executive Vice Presi-dent Mal Kasanoff, "...eventu-ally we want to own stations inall the major markets."

Clearly, the Spanish speak-ing community has become a de-sirable audience and an activemarket. Dennis Roberts, generalmanager of TMS-owned KSAHin San Antonio says, "Tichenorhas made unheard of purchases.You can't make a $20-million in-vestment without knowingthere's going to be a substantialreturn on that investment."


The 10 LeadingHispanic MediaMarkets-1986(expenditures in millions)

Los Angeles $81.5Miami 68.4New York 64.5Chicago 19.0San Antonio 16.0San Francisco/

San Jose 15.0San Diego 8.0El Paso 7.0Phoenix 7.0Fresno 6.5

Total $292.9


PACE 7

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Silver ScreensMoving Beyond Stereotypes

The last three years have seena significant increase in thenumber offilms that deal withHispanics and dramatic changesin how Hispanics are portrayed.The stereotypical spitfires, ban-didos, maids, and gardeners arestill in evidence, but they arebalanced by stories that reflectHispanic history and culture,delineating characters to whomboth Hispanic and Anglo audi-ences can relate.

Three independent film-makers have spearheaded themovement: Jane Morrison withThe Two Worlds of Angelita, thestory of a Puerto Rican family'sculture shock upon migrating toNew York; Gregory Nava's ElNorte, the harrowing saga of abrother and sister's escape fromtheir native Guatemala, and theproblems they face in the United

32

PACE 8

State; and Robert M. Young's TheBallad of Gregorio Cortez, whichreceived backing from the Na-tional Council of La Raza, a pe-riod film about a man chargedwith a crime he did not commit.

Viewers and critics alike re-sponded positively to these pro-ductions and appeared to becomfortable with both subtitlesand overdubbing. The success ofthe films spurred the entertain-ment industry to address Latinothemes.

La Bamba, the story of a youngHispanic entertainer's strugglefor success, was released byEmbassy Studios in both Englishand Spanish versions. Until re-cently, films like La Bamba,strongly rooted in Hispanic cul-ture, would have been producedonly in Spanish on the assump-tion that Hispanic subjects ap-

peal only to Hispanic audiences.Embassy and Columbia Pic-tures, which provided majorbacking for the venture, chal-lenged this assumption. EdRussell, Vice President of Pub-lishing and Promotion for Co-lumbia Pictures, said, "La Bambais a strong product. The serioustargeting of both the generalaudience and the Latino audi-ence made it a hit in both sectors.The surprise for us was the largenumber of Latinos who weredrawn to the English version."

Santiago Pozo, Manager ofSpecial Markets at UniversalPictures, finds the Hispanic mar-ket to be an untapped resource."The Hispanic community is thefastest growing, and has the mostpotential for anyone who takesadvantage of it," Santiago says."Any mass market film will

gross five to ten percent more ifthe film's advertising is geared,in part, to the Hispanic commu-nity."

Television, which histori-cally has portrayed Hispanics asdrug dealers or gun runners forSouth American guerrillas, isundergoing a campaign to intro-duce positive Latino images.Cheech Marin, actor and pro-ducer, has made a number offilms for television and the bigscreen. Marin most recentlystarred in the film Born in EastL.A. and produced Paradise Mo-tel, both Hispanic- and minority-based stories. In making filmsthat speak to both Anglo andLatino audiences, Marin joins thegrowing trend in television to-ward portraying Hispanics in avariety of authoritative and pro-fessional roles. For example, on

the popular television series L.A.law, Jimmy Smitts plays VictorSifuentes, a young Hispaniclawyer with high morals andstandards of justice. This kind ofrole may mark the beginning ofHispanic assimilation into main-stream entertainment.

The 1987 television season ispremiering three Hispanic sit-coms, affirming that Hispanicthemes are here to stay.

Latinos have begun to play alarger role on the stage as well.Luis Valdez, writer and directorof the 1978 stage hit, Zoot Suit,has made substantial advanceswith his portrayals of Hispaniclife and the Hispanic voice in theUnited States.

Zoot Suit recreates Los Ange-les Chicano life and ethnic ten-sion in the 1940's. The produc-tion garnered Valdez much ac-

Flio1.17Matifoun.cou,syd )(QED

Luis Valdez/ is joined by singer Linda Ronstadt in Corridosl Tales of Passion and Revolution.

BusugEss DEvELopmErrr

claim and eventually made itsway to the silver screen.

Valdez, who is also founderand artistic director,of "El Teatro

. Campesino," wrote, directed,and starred in Corridos! Tales ofPassion and Revolution, which hasbeen adapted for television byKQED/San Francisco and ElTeatro Campesino. JaneBlackschleger, Producer of Cord-dos!, says of the production, "It isabout Americans because we areall Americans."

JCPenneyIt Takes Only One

"...the production and dis-semination of iGuia Prdctica;a Spanish-language cata-log:le/buying guide, a firstfor JCPenney and a first in theU.S. retail industry."

JCPenney's success in at-tracting Hispanic customers is atext-book example of how onedetermined stafferin a com-pany employing as many as200,000 personscan bringabout significant marketing in-novation.

In 1978 Patricia Asip wasworking in the Catalogue Divi-sion of JCPenney. Trained as alawyer in her native Argentina,Asip was sensitive to the grow-ing Hispanic population, and shewas convinced that JCPenneyshould go after the Hispanicmarket. As editor of Penney'sEnglish language catalogue, shewas in a unique position to pres-ent her planthe production

PACE 10 36

and dissemination of a GutaPrdctica, a Spanish languagecatalogue-buying guide, a firstfor JCPenney and a first in theU.S. retail industry.

The success of the initial GuaPrdctica soon convinced manage-ment to target the Hispanic con-sumer. A company-wide His-panic marketing strategy hasbeen evolving at JCPenney eversince.

Today Asip's qualities ofdedication and perseverancehave made her Corporate His-panic Marketing Programs Man-ager, and have earned JCPenneya place as one of the leaders in thefield of Hispanic marketing.JCPenney's competition now allpublish catalogues in Spanish,following the Asip lead.

But neither JCPenney nor Pa-tricia Asip rest on their laurels.Asip says, "I work as hard todayas I did back in 1978. I believe in

particularizing the program tothe store. I still travel constantly,and I meet with store and re-gional teams regularly. It is nec-essary to stay in contact withyour market base or else youbecome detached from yourpoint of sales."

Asip produces an in-housemarketing newsletter, Noticias,

Patricia 'trip

so she can share national, re-gional and local marketing infor-mation and data with the Penneymanagers, exchange informa-tion and experiences among thestores, and inspire the staff whileincreasing their sophistication intheir relations with the Hispaniccommunities they serve.

JCPenney encourages salespromotions directly targeted toHispanics. But in addition Asiphas established local companyteams in key markets to identifythe needs of Hispanic communi-ties and to find ways in whichJCPenney can be responsive.JCPenney employees are encour-aged to become involved in localHispanic organizations, Cham-bers of Commerce, and commu-nity committees. All these activi-ties, including Asip's own highlyactive participation in nationalHispanic organizations, havegarnered for Penney high levelsof visibility and loyalty amongHispanics.

37

JCPenney backs its cata-logues, in-store special promo-tions, and community outreachwith a carefully crafted advertis-ing campaign. The companyruns 20 different Spanish-lan-guage television commercials,Spanish-language radio com-mercials, and a plethora of Span-ish language print advertise-ments and promotional materi-als.

Patricia Asip took a GalaPrdctica and launched JCPenneyinto the Hispanic market. Sheraised her corporation's aware-ness of a promising marketingopportunity, she designedstrategies to take advantage ofthat opportunity, and she trainedstaff on all levels in a new andchallenging field.

it takes expertise and experi-ence to develop a new market,and identifying the right persons

48

for the job is key to achieving suc-cess. As corporations commencetheir searches, however, theyshould not neglect to look in-sidethere may be another Pa-tricia Asip on the payroll ready tolead the way.

_____,

JCPenney'sHispanic Markets

ArizonaPhoenixTucson

CaliforniaLos AngelesFresnoSacramentoSan FranciscoSan Diego

ColoradoDenver

New MexicoAlbuquerque

FloridaMiami

IllinoisChicago

TexasSan Antonio

PACE 1139 0

WINDOWS 00 OPPORTUNITY

Von's "Tianguis"The Netv Mercado

"The general perception hasalways been that the moneyisn't there. We think it is."

Norman McMillanConsultant

Sides of beef: Tongues,snouts, jowls, feet. Varieties offresh chorizos, or hot Mexicansausages. A dozen kinds .of freshand dried chili peppers. Freshcilantro. Hundred-pound bagsof dried beans. A tortilla ma-chine. A bakery producing Mexi-can breads and pastries.

All of those thing can befound in the stalls of Von's Tian-guis, a 60,000-square-foot all-purpose grocery store that theCalifornia chain opened in Janu-ary 1987 in Montebello, a city onthe east side of Los AngelesCounty, targeted to the Hispanic,60 percent of Montebello's popu-lation.

According to staff writerJohn Nielsen, writing in The New

PACE 124 .0

York Times, February 11, 1987,Von's Grocery Company firstspent two and a half years on a$2.5-million market study inTexas, Florida, Illinois, and Mex-ico, before it decided to go aheadwith its plan to open at least 15stores, designed to appeal spe-cifically, to Hispanics, by 1990.Montebello's Tianguis is the firstof these, and Von's 191st store.The Tianguis chain takes theplace of a proposed chain ofbroad-appeal, warehouse-likesupermarkets that Von's earlierhad planned to establish.

Gross sales at each Tianguismarket are expected to average$35 million annually, or from$15 million to $25 million morethan most of Von's regular su-permarkets.

According to NormanMcMillan, a consultant hired byVon's to help with the marketstudies, quoted in The New YorkTimes, "We think we're dealingwith a share of the market that's

been misunderstood by the big-ger chains. The general percep-tion has always been that themoney isn't there. We think it is."

And Tianguis makes everyeffort to appeal to that marketshare. Well over two millionHispanics live in Los AngelesCounty, and Von's is determinedto attract them. The Tianguisstaff is bilingual, and the store'slabels, notices, and signs arewritten in both English andSpanish Hispanic families tendto be large, and they are expectedto appreciate storeslike Tian-guiswhere they can buy freshfood, such as meat, produce, anddairy foods, in bulk, and wherethey can buy foods characteristicof their Latino cultures in anenvironment reminiscent of themercados of their native coun-tries.

HispanicExpendituresNon-Durable

Goods*1986

Billions

Northeast $7.3

Southeast 5.6

Central 4.0

Southwest 11.7

Northwest 2.0

Pacific 16.3

Total $46.9

*Strategy Research Report

41

National Hispanic CorporateCouncil (NHCC)A Hispanic Marketing Network

"NetWOrlis serve essential func-tions, in both a corporate and asocial- context. They encouragethe exchange of informationand ideas that prevent stagna-tion in our lives and in ourbusinesses. ALS° they weave thefabric of which our communi-ties are made with new threadsof respect and cooperation.Networks offer resources,energies and synergies thatexpand our thinking. They areinsurance policies againstnarrow-mindedness and com-placency."

Irvine 0. Hockaday, Jr.President, Hallmark

As the numbers of "Corpo-rate Hispanics" increased overthe last decade it became clearthat a mechanism was needed forthe exchange of ideas, data andinformation, for mutual assis-tance and to make Hispanic pro-fessionals as valuable as possibleto their corporations.

The National Hispanic Cor-

,4.2

porate Council, a Fortune 500network, was born in 1986 tomeet these needs. Today 36 ma-jor companies have joined theNHCC, which stresses the im-portance of networking to helpcorporations increase their busi-ness opportunities in the His-panic marketplace_At quarterlytwo-day meetings, the execu-tives exchange ideas and exper-tise on the Hispanic market. A

Olga Aros, Founder of the National HispanicCorporate Council.

newsletter keeps the membersinformed between meetings, andNHCC produces an annual re-port that profiles companies thathave succeeded in Hispanic mar-keting. A corporate awards pro-gram also recognizes executivesand member corporations fortheir investment in the His-panic marketplace. In addition,NHCC is a conduit for sharingtalent. Members send resumesaround the network and assisttalented Hispanics in their ca-reers.

Olga Aros of USA Today, firstPresident and Founder of theCouncil, feels that professionalinformation and mutual supportnetworks for Hispanic execu-tives is a key function of theNHCC. NHCC President, GusCardenas, of Xerox, emphasizesthe benefits for corporations inbeing represented in NHCC:"Corporate America is becomingaware of the growing Hispanicmarket," he says. "It's just goodbusiness sense to be part of it."


NHCC MemberCorporations

Allstate Insurance CompanyAmerican Savings & Loan AssociationAmocoAnheuser-Busch CompaniesARCOAT&TAvonCircle K CorporationCoca-Cola USACoorsDow Chemical USADun & BradstreetEquitable Life InsuranceFord Motor CompanyGannett, Inc.Goodyear Tire & Rubber CompanyHallmark InternationalIBMJCPenneyKaiser FoundationKraft, Inc.Land 0' LakesMcDonalds CorporationMiller Brewing CompanyMotorola, Inc.PepsicoProctor Sc GambleRalston-Purina International7-Up of Southern CaliforniaSouthland CorporationSouthwestern Bell TelephoneStroh BreweryTime Inc.USA TODAYWestinghouseXerox

For more information contact:Joanne SamoraProject CoordinatorNational Hispanic Corporate CouncilP.O. Box 61421Phoenix, AZ 85082-1421(602) 437-7545

Pace 13

43

WINDOWS OF OppoRruNirry

AT&TTaking the Show on the Road

"I believe ethnic diversity canbeand indeed, should beseen-as a healthy; positiveexperience for Ainerica. Inparticular, thegrowing pres-ence Of Hispanic men andwomen, families, communitiesand businesses will enrich analready varied cultural tapes-try in Our country. A good.examplewis the Hispanic ArtF.Thibit.,..now on dispLiy at theHOuston Fine Arts Museum,which I am proud to say issponsored by AT &T."

Randy TobiasVice Chairman, AT&T

The story begins in 1982when the Museum of Fine Artsin Houston, Texas, began to or-ganize-a major exhibition of con-temporary Hispanic art, entitledHispanic Art in the UnitedStates: Thirty ContemporaryPainters and Sculptors. PeterMarzio, Director of the museum,

PACE 14 44

worked with curators Jane Liv-ingston and John Beardsley, bothof the Corcoran Gallery in Wash-ington, D.C., to collect 180 worksof art created by 30 Hispanic art-ists.

It requires a great deal ofwork and financial support to or-ganize a show of these propor-tions; it is large both in terms ofquantity and the actual size ofsome of the pieces. Moving such'a collection around the countryrequires still more support.Original funding for the collec-tion came from the RockefellerFoundation, the ARCO Founda-tion, and the National Endow-ment for the Arts. Then AT&Tstepped in to take the show on theroad.

The tour, which brings theexhibition to five major U.S. cit-ies and Mexico City, is consid-ered to be the first national tour

"San Jose," by Felix LOpez,1983

of an exhibition sponsored by amuseum to survey in depth therange of expression to be foundin contemporary Hispanic art.AT&T's involvement in the tourstems from its long history ofsupport for the arts aad itscommitment to its many His-panic employees and customers.In fact, while the show was beingorganized, AT&T independentlyhad made the decisionto targetHispanic cultural activities in itsgiving programs and was inves-tigating various possibilities.The company agrees with exhibitcurators Livingston andBeardsley that Hispanic art hasnot been sufficiently exhibited inthe United States. AT&T's inter-ests and the needs of the exhibi-tion coincided perfectlyandthe tour was launched.

In researching the exhibition,organizers covered the UnitedStates and Puerto Rico, working

45

"Our Falai airl:(190 Cevy lowrifer)t. by OilVertixiikle85-86

with. members of the Hispaniccommunity and talented localartists. The exhibition featureswork that varies widely in style,ranging from folk art tb new ex-pressiOnisM. "What we caredabout," states-Beardsley, "is thestrength Of an artist's work, notconforming to some precort-ceiVed notion of what constitutesa Hispanic style or school."

The show opened at the Mseum of Fine Arts in Houston onMay 3rd, 1987, and will be shown

46

in Washington, D.C.; Miami,Florida; Los Angeles, California;Santa Fe, New Mexico; Brooklyn,New York; and Mexico City,Mexico. The premier was re-viewed favorably by both thelocal and national press.

In addition to the exhibitionitself, satellite activities, such asshows of local Hispanic artists,performances, storytelling,films, and lectures, are being or-ganized in each host city.Local AT&T staff are instrumen-

tal in coordinating the satelliteevents.

As the show proceeds fromcity to city it will focus positiveattention on the achievement ofour Hispanic artists. AT&T's in-volvement on both the nationaland local level sends a messageto AT&T Hispanic customers ineach cityAT&T cares about you.


Hispanic Art in theUnited States:30 ContemporaryPainters and Sculptors

Itinerary

Museum of Fine ArtsHouston, TexasMay 3 to July 26, 1987

Corcoran Gallery of ArtWashington, D.C.October 24, 1987 toJanuary 9, 1988

Lowe Art MuseumMiami, FloridaApril 7 to June 30, 1988

Museum of Fine ArtsSanta Fe, New MexicoAugust and September, 1988

Centro Cultural de ArteContemporaneoMexico City, MexicoOctober to December, 1988

Los Angeles CountyMuseum of ArtLos Angeles, CaliforniaFebruary 2 to April 16, 1989

The Brooklyn MuseumBrooklyn, New YorkJune 10 to September 4, 1989

PAGE 15

Jivoows oirOpecerumm,

'Telefono Meeting HispanicConsumers' Communication Needs

In the Modern age the telephone is a lifeline. It is how we"...reachout and touch someone we love...." as the advertisementstell us. It IS also4low we do business, locate the goods and serv-ices. we need, summon help in emergencies. Manrof the telephoneCoMpanies have been involved "in making telephone service moreattractive and useful for their Hispanic consumers.

Pacific Bell

Pacific Bell's consumer advi-sory process Was established

to create an open dia-logue between Pacific Bell andkey California consumer and mi-nority leaders,

to sensitize Pacific Bellpolicy makers to the concernsand needs of special interestgroups, and

to discuss controversialpublic policy issues in an openenvironment.

The Consumer AdvisoryPanel is composed of 12 commu-nity, consumer, and minorityleaders who advise the companyon a broad range of issues andpolicies. The panel membersmeet with policy makers every

48PAGE 16

other month in different geo-graphic loCations.

In addition to the ConsumerAdvisory Panel, Pacific Bell hasformed a Council on Multilin-gual Services to provide over-sight and advice to the companyon the implementation of itsHispanic and Asian MarketPlans.

"We do the same kind of re-search about ethnic groups as wewould for any market segmentidentifying what people needand matching our products tothat need," said Kathy Pinard,Consumer Market planner. "Butwe have to do more than that. Wehave to try to anticipate whatneeds may arise:"

Mountain Bell

Mountain Bell's SpanishSpeaking Service Center, openedsix years ago in Denver, was oneof the first offices of its kind.Mountain Bell opened the officein order to provide customerservices, such as new accounts,billing and information, andrepairs, to their Spanish-speak-ing customers.

After the Denver officeopened, Mountain Bell estab-lished Spanish Speaking ServiceCenters in Phoenix and Al-buquerque, with one underwayin Idaho. The popularity of theservice has affected the entire 14-state region covered by Eoun-tahi Bell, Pacific Northwest Bell,and Northwestern Bell. Researchand feaSibility studies currentlyare being cond ncted in the metroareas of every major city in the 14states.

Lucila Sabala, now AssistantStaff Manager in Public Rela-tions for Mountain Bell, worked

in the Denver Spanish SpeakingService Center for three years."The experience was a goodone," says Sabala, "the work wasexciting and I learned a lot. SinceI know more now about workingwith our Spanish-speaking cus-tomers I can serve them better."

General Telephone ofCalifornia (GTE)

GTE's Language AssistanceCenter is similar, in aim and serv-ice provided, to Mountain Bell'sSpanish Speaking Service Cen-ters. Established in January of1987, it provides limited-Englishand Spanish-monolingual cus-tomeipt with Spanish-speakingservit.: representatives. All cus-tomer-assistance related servicesare provided, including billing,new accounts, service, and re-pairs.

In addition to providing spe-cialized customer services to itsSpanish-speaking clients, GTEprovides bilingual yellow pages

49

in both Santa Ana and East LosAngeles, California. Businessesare-listed in both English andSpanish sections at no extra cost.Billing inserts are also bilingual,one side in English and the otherin Spanish, to aid consumers inlearning about GTE's servicesand procedures.

Southwestern Bell

Southwestern Bell Tele-phone provides several serviceswhich target its Hispanic cus-tomers.

The company established itsSpanish Service Bureau in ElPaso to provide service to allSpanish speaking customers inTexas. The bureau handles ap-proximately 9,000 calls a month.To promote the bureau, South-western Bell contracted with anHispanic ad agency and a mediaplacement agency.

Following the breakup of theBell System, Southwestern Bellcreated Tele-Help, an informa-

50

tional campaign designed tohelp customers adjust to the newtelecommunications environ-ment. Tele-Help informationalbrochures-were printed in bothEnglish and Spanish to assistHispanic customers doing busi-ness with the company.

Finally, Southwestern Bellprovides a Spanish version of theinformational pages found in thefront of the telephone directo-ries. These pages contain infor-mation on a wide range of topics,including how to deal with anemergency and how to read aphone bill.

New York Telephone/NYNEX

New York Telephone, one ofthe NYNEX companies, pro-vides a wide variety of servicesfor its Hispanic customers.

Since 1964 New York Tele-phone has offered. La Telefonica,a new line service to it's Spanish-speaking customers. Spanish

langlage "Welcome Kits" arealso available for new customers.

The company publishesmany informative materials inSpanish, including a brochure oncustomers rights and responsi-bilities, a money saver brochurefor home telephone service forthe disadvantaged, and PagiliasAmarillas, or Spanish YellowPages. When rate changes occur,announcements and explana-tions are placed in leading His-panic newspapers.

Among the direct aids thatNew York Telephone providesfor Hispanics are bilingual repre-sentatives in the Business Office,in Installation and Repairs Of-fices, and in Customer ServiceCenters in areas with high His-panic populations. Communityrelations teams with bilingualpersonnel survey customers tobe sure that they are receivingsatisfactory service.

BUSINESS DEVEWPMENT

Telephone Servicesfor Spanish-Speaking Customers

Direct consumer help inplacing calls in Spanish

Providing businessoffice services in Spanish

Publishing Spanish Yel-low Pages/PaginasAmarillas

Employing Spanish-speaking service repre-sentatives

Providing DirectoryInformation in Spanish

1

PACE 17

Hispanic BusinessRevealing a Well Kept Secret

"The success of our magazinehas proven beyond any doubtthat a significant Hispanicmiddle class exists and thatHispanic business has greatpotential for growth, not onlyin the U.S, but in Latin Amer-ica and other parts of the worldas well."

Jesus Chavarria, PublisherHispanic Business

PACE 18 52

Hispanic Business began inApri11979 as a monthly newslet-ter. By 1980 it had been convertedto a substantial magazine sup-plying reliable information on allaspects of the Hispanic businesssector and the Hispanic markets.Today, Hispanic Business ,with anaudited circulation of 113,000, iswidely accepted as the authorita-tive voice in its field.

Chavarria launched HispanicBusiness to reveal one of the bestkept national secrets: the signifi-cant growth and achievements ofHispanic entrepreneurs. Thepublication was designed to giverecognition and visibility to therobust health of the Hispanicbusiness sector, to promote net-working among Hispanic b.:si-ness persons who often do notknow about each other; to iden-tify Hispanic professionals, ex-perts, and suppliers; and to ana-lyze and publi..:1 data that pres-ents an accurate picture of His-

panic markets and Hispanicbusiness sectors. In fact,Chavarria's insistent quests fordata have influenced state andfederal officials and agencies tosystematically collect and dis-seminate information on His-panic business that was not pre-viously available.

Hispanic Business subscribersdo not take the publicationlightly. Surveys indicate that themedian reading time per issue is60 minutes and 58 percent of thesubscribers surveyed had readfour out of four issues. On a 1985Price Waterhouse study of His-panic entrepreneurs, 81 percentresponded that their major

Hispanic Subscribers toHispanic Business

$52,000 Median Income

84% College Educated20% Post Doctoral Degrees30% Own Businesses67% Executives, Managers

or Administrators

53

";.`"711.,:fe,

?1,fk

A .??4: qr.";

sources of information were His-panic Business and their localnewspapers.

Chavarria believes that hismagazine arrived on the scene atthe right moment. Its debut coin-cided with a marked increase inHispanic political participation,expansion of Hispanic market-ing opportunities, and the emer-gence of recognized nationalHispanic leadership.

But increasingly, HispanicBusiness is attracting non-His-panic subscribers who comple-ment its loyal. Hispanic reader-ship. The magazine is recognizedas a valuable resource for boththose who want to sell to Hispan-ics and those who want to buyfrom Hispanics.

For more information contact:Hispanic Business, Inc.360 Hope Avenue, Suite 100CSanta Barbara, CA 93105(805) 682-5843


Latino-OwnedBusinesses in theUnited States, 1982*

16.17Cuban

14.4XOtherLatinos

63XMexican

6.5XPuerto Rican

Average receipts per LatinoOwned Firm, 1982

* reprinted from DATANOTE withpermission from the Institute forPuerto Rican Policy

, joint VentureAcross the Alley from the Alamo

"The Mexican American UnityCouncil's investment in theHyatt Hcitcl provides our com-munity organization.with asignificant source of earnedincome. That makes us lessdependent on grants and tax,-payer support. We are able tohelp ourselves provide servicesto our constituents.

Domingo BuenoPresident, Mexican American- ,

Unity Council

A unique public/privateventure in 1978 gave birth to aluxury, 632-room Hyatt Hotel onSans Antonio's famous RiverWalk, adjacent to The Alamo, a;popular tourist attraction andnational landmark.

The Hyatt was developed bySan Antonio 2000, whose princi-pals are Belton K. Johnson, a dis-tinguished Texas businessman, kotei

and San Antonio Hotel Dev-

PACE 2056 57

elopers, a limited partnershipowned by Hardin Investmentsand Samuel G. Friedman of At-lanta, Georgia, and the MexicanAmerican.Unity Council of SanAntonio (MAUC). The UnityCoundil, a highly successfulcommunity development corpo-ration, founded in 1967 underthe aegis of the National Councilof La Raza, initially was fundedby. the Ford Foundation.

The Mexican AmericanUnity Council, which operates abroad spectrum of housing, eco-nomic development, employ-ment, training, and social pro-grams, invested a million dollarsin the Hyatt deal for a nine-per-cent interest. In addition to its fi-nancial participation, the UnityCouncil was given the opportu-nity to identify, and in some in-stances train, employees both forconstruction and for the perma-nent staffing of the hotel.

58

Eight hundred jobs were cre-ated during construction: Fiftypercent went to minorities. Thecompleted Hyatt Hotel nowregularly employs 569 people, 60percent of whom are MexicanAmerican.

But MAUC was not the onlymember of the joint venture toreap special benefits from thenature of the partnership.MAUC's participation in theHyatt development made thecity itself eligible for a $6.5-mil-lion Housing and Urban Devel-opment Action Grant from thefederal government. The HUDgrant was used by the city toacquire the land and to improvethe site, which then was leasedfor 75 years to San Antonio 2000.

The Hyatt's gala opening in1981 launched a profitable busi-ness that added luster to SanAntonio's reputation as a desir-

able site for conventions and apleasant destination for touristsfrom around the nation.

And for each of the last threeyears, the Mexican AmericanUnity Council has received a re-turn on investment of $250,000 to$300,000. That cash flow is usedto support the Council's socialand economic development pro-grams that serve San Antonio'sHispanic population.

"The Hyatt Development isan example of how the inclu-sion of a minority partnermakes good business sense forall the partners. The revitaliza-tion of Alamo Plaza wasinitiated by this venture. In myjudgment it wouldn't havehappened without the UrbanDevelopment Action Grant theMexican American UnityCouncil essentially brought tothe table."

Samuel G. FriedmanAtlanta Real Estate Developer

BUSINE-S DEvammErsu

Benefit Analysisof the Hyatt JointVenture

Venture Benefit

CapitalMAUC InvestmentUDAG

Recruitment andtraining of employees

MAUC Benefit

Job creation duringconstruction

341 on-going jobs heldby Mexican Americans

Regular income tosupport MAUCprograms

PACE 21

59

WINOosys of rjOoilfuigrry

Host InternationalJoint Venturing in Florida

"If Host-had not been involved,there Was no way we couldhave opened up. It would havebeen too costly....If most smallbusinesses could get this kindof help, there would be,a,muchsmaller failure rate!

Don BarcoQuoted by Staff Writer

Glenn BurkinsSt. Petersburg Times,

May 3, 1987

Host International, a subsidi-ary of the. Marriott Corporation,needed minority businesses forTampa International Airport.Having won a multi-million dol-lar concessions contract, Hostwanted not only to meet its fed-eral obligations, but to avoidmistakes of the past.

The law requires that minori-ties and women be given a share

4

Ars 4.

of all U.S. airport contracts, butpast experience has not been uni-formly good. Often minoritiesare given shop space and thenleft to survive on their own. Fre-quently minorities are recruitedas silent partners with no voice indecision-making.

Host's first step was to ac-tively look for minority businesspeople, and this active approachwas to be the hallmark of thissuccessful program.

Not only did Host search outand find four minority busi-nesses. Host created financial aidplans for each of the companies.In addition to investing in theirenterprises, Host took on non-traditional roles, providing tech-nical advice and training, shopdesign and some furnishings,and even fabrication of somestore fixtures. Host also taughtthe four owners how to selectand buy merchandise to appealto airport travelers.

Says Constance Mitchel?,general manager of one of thefour shops, "You have to giveairport passengers good cus-tomer service, you have to be in ahurry. You have to be sharperwith these passengers."

An officer of another of theshops, Don'Barco, quoted in theSt. Petersburg Times, says, "Hosthas given us guidelines on howto run a business. It hasn't beenforced on us, but it's been there ifwe needed it. If most small busi-nesses could get this kind of help,there would be a much smallerfailure rate."

Host's organizational con-cept was unique, too. Instead ofindividual shops, one large,common area was designed,with the four individual busi-nesses all functioning as if theywere departments in a largerstore. This was done to avoidcompetition among the indivi-dual stores, and because it was

61

f.

felt that the customer would findthe large open area more attrac-tive than scattered small shops.Tampa International's conces-sions area is 11,000 square feet;about 2,860 square feet is setaside for stores owned bywomen or minorities.

The shops, which share acomputer system that monitorsthe cash intake and inventory ofe4ch, are not separated by anyphysical barriers, and in factfunction like a mini-mall. Thegroup includes Hispanic, Black,White, and women managersand owners; nearly all had priorretail experience.

Host went into partnershipwith a Hispanic-owned tobaccoshop, a chocolate company, andan art gallery, and itself sellsgeneral merchandise with afourth minority partner.

The St. Petersburg Timesquotes Denis Albert, a Host offi-

62

cer who helped create the pro-gram: "The key is that it's hands-on. It's minority owned andoperated, not a silent partner-ship. Anything that is availableto us is available to our minoritypartners."

Not surprisingly, observerspredict that the Host programwill become a national model.

At last report, Host had in-vested $2.6 million, with first-quarter sales reaching $1.3 mil-lionand each of the four minor-ity owned and operated shopsmaking money.

BUSINESS DEVELOPMENr

MinorityConcessionaires

Tampa Rica Cigar Co.Don Barco and Jerry GarciaProprietors

Bay Area ConcessionsJames I Iogrett, PresidentResort apparel, shells,luggage, gifts, Cubanbread

Aiello's ChocolatesAmelia Sklar, proprietorGourmet chocolates

Florida AritsansThom Thibodeau,CoordinatorGallery

SPACE 236

WIDOWS of OPPORIUNICTY

Startup and Working Capital:Amoco Venture CapitalCompany (AVCC)

"Since 1986, 30 percent of allAVCC investments have beendirected toward Hispanic-owned companies."

The Amoco Venture CapitalCompany was established by theAmoco Corporation in 1970 as aMinority Enterprise Small Busi-ness Investment Company(MESBIC) to serve minority en-trepreneurs. Since 1970, AmocoVenture Capital Company hasinvested $14.4 million in a widerange of minority firms. Tenbusinesses that received AVCCsupport were Hispanic, andsince 1986, 30 percent of allAVCC investments have beendirected toward Hispanic-owned companies.

One company, Printing Mas-ter Services, was established in1978 with AVCC assistance. Thisenterprise has grown over the

PACE 24 64

years with additional financingthrough AVCC. Today, the com-pany uses a state-of-the-art six-color printing process and pro-duces two notionally distributedpublications for Amoco.

In 1986, Amoco was the leadsyndicator (with seven other in-vestors) in a $7.1-million financ-ing consortium supporting aHispanic-owned waste manage-ment company.

Amoco Venture CapitalCompany's program includesthe sponsorship of a Hispanicbusiness network that facilitatesreferrals between Hispanic busi-nesses and between larger corpo-rations and Hispanic entrepre-neurs. The network also helpsaspiring Hispanic entrepreneurswith technical assistance andadvice.

A new program launchedthis year has organized businessdevelopment teams (staffed by

Amoco specialists) to serve aspart-time advisors to, all newlyestablished Venture Capital-sponsored businesses. The busi-ness teams will be drawn from avariety of departments, usingthose specialists having the mostappropriate expertise for offer-

0

ing advice to a new companyduring its critical first year ofoperation.

In 1988, Amoco VentureCapital will provide both anEnglish and a Spanish annual re-port to Hispanic organizationssponsoring new businesses.

'VW

65

Local Initiative SupportCorporationRebuildingNeighborhoods and Local Economies

"LISC brings together threeforces: sustaining support fromthe non-profit sector, respon-sible investment from theprivate sector, and communitydevelopment groups intent onbuilding their capital base."

Goldmark, Jr.Group Vice President, Times

Mirror CompanyDirector, LI

The Local Initiative SupportCoalitionLISC was the brainchild of its first President, Mitch-ell Sviridoff, former Ford Foun-dation Vice President for Na-tional Affairs. Since its foundingin 1980, 300 private corporationsand foundations have contri-buted capital resources in theeconomic and physical develop-ment of housing, business, andindustrial programs that are ini-tiated by community-based non-profit organizations. Over 400community development or-

66

ganizations now have receivedprogram support from LISC in119 cities and towns across thenation. This help has led to theconstruction or rehabilitation of3.3 million square feet of com-mercial and industrial real estateand 11,332 housing units.

LISC operates through a na-tionwide network of 24 localareas of concentration. Each areadraws upon its pool of fundsfrom local-corporations, founda-tions, and, in some instances,local government, and receivessupport from LISC's nationalcapital fund. Representatives oflocal funders sit on advisorycommittees in each area andwork with the LISC programofficers to select and structuredeals.

LISC structures its support tobring local banks and other pri-vate-sector lenders and investors

into each project. LISC's loansand grants have leveraged over$395 million for communitydevelopment in neighborhoodshaunted by the spectre of localindustry shutdowns, lost em-ployment, and business districtdeterioration.

LISC-sponsored deals pro-vide a systematic way of linkingcorporate capital to neighbor-hood rebuilding.

"Many corporations wantto make a contribution to theircommunities....LISC has pro-vided them with a method formeaningful investment. TheLISC formula is a good oneit's responsible, accountable,an: 7chieves real results."

Robert LilleyRetired AT&T President

Director, LISC


Capital SourcesReported by HispanicEntrepreneurs

Original Investment

PersonalSavings

80%

Family/Friends 21.8%

Conventional BankFinancing 21.8%

Venture Capitil 3.6%

SBA 6.7%

Subsequent Investment

Personal Savings 9.7%

Family/Friends 9.7%

Conventional 35.2%Bank Financing

Venture Capital 2.4%

SBA 13.3%

Reprinted with permission, HispanicBu^sness, Inc.

PACE 25

67

iNDOWS OF OPPORTUNITY'

Minority Purchasing ProgramsUsing Hispanic Suppliers

ARCO From Posies to Pipes

"We know we can't afford toignore the bottom line, but thedifference is that we think thatour concern for good financialresults can be tempered with athoughtful concern Pr the totalpurpose of business in oursociety, in its social as well asits financial aspects."

H.E. Bond, PresidentARCO Transportation

Company, 1985

\Ow

ARCO began a deliberate mi-nority purchasing program in1973, adopting an official com-pany policy and setting specificgoals.

Supported from the top fromthe very beginr:ng, ARCO re-cently increased its 1987 minor-ity buying goal to 3 percent ofcompany purchases. "And we'retalking about everything fromflowers to pipes, or tubulargoods, as they are also known,"

PACE 26 68

says Jerry Bathke, ARCO Direc-tor of External Relations.

When ARCO decided to buyminority, its leadership realizedthat much work had to be done ifthat policy was to filter downthrough the company's layers.

Armed with a simple, one-page policy statement, the com-pany began the process of sellingthe policy to its own employeesas a prerequisite to meeting itspurchasing goals.

ARCO is proud of its recordin minority purchasing and tellsthe world about it. In advertise-ments that began appearing innational magazines in 1985,ARCO highlights its minoritybusiness developMent program.

But minority business devel-opment at ARCO is still not takenfor granted. In the fall of 1986,ARCO created a special quar-terly newsletter, EXCHANGE.Its sole purpose is to furtherpromote minority business de-

velopment among corporate andoperating division managers. Italso became involved in sup-porting minority tAness andtrade associations at the local,regional, and national levels.Says Bathke, "We're talkingabout more than minority pur-chasing, we're talking aboutcomplete minority business de-velopment."

Internally, ARCO has cre-ated the title "minority business

coordinators" purchasingmanagers or buyerswho are"encouraged to seek out anddevelop minority owned busi-nzzses that can be utilized bytheir divisions."

Through this approach ofhigh visibility, endorsement atthe top, and consciousness rais-ing throughout the company,ARCO has seen its minority pur-chasing program grow steadily.

These are the objectives of the ARCOMinority Development Programs:

I. To actively and diligently promote the procurement offacilities, equipment, supplies, and services from minorityenterprises.

II. To encourage and assist minority vendors in theirefforts to sell products and services to ARCO and its operatingcompanies.

III. To stimulate affirmative efforts by ARCO managementin the implementation of this policy.

IV. To work closely with government and private sectorprograms that support minority business.

69

JCPenney --"Guia pars Empresas Comerciales Minoritarias"

"JCPenney has a commitmentto the development of minoritybusiness enterprises. A Minor-ity Purchasing AdvisoryGroup, with representativesfrom all departments whichpurchase products or services,is responsible for promotingminority business relationshipsthroughout the Company'sbuying structure. These JCPen-ney associates have developedseveral programs to expressthis commitment, including thisbooklet."

JCPenney is a major retailer,with stores in all 50 states, PuertoRico, and Belgium, providingmerchandise and services to con-sumers through catalog oper-ations as well as retail outlets.

The company buys tens ofthousands of products and serv-ices from more than 10,000 sup-

70

pliers. Every item sold in thestores orthe catalog, or used inday-to-day operation of the busi-ness, must be purchased fromsuppliers, as well as store design,construction, alteration, and re-pair; transportation and ware-housing; printing services; andmedia, public relations, and ad-vertising services.

The company does not haveaset-aside program for minority-owned businesses. "Instead,"says the Grua, "we encourage ourbuyers and managers to takeextra steps, providing guidanceand assistance to help suppliersmake their products or servicesmore attractive to JCPenney. OurMinority Supplier DevelopmentAwards program was institutedto recognize our associates fortheir outstanding contributionsin this effort."

Philip MorrisOpen Doors

"You stand for growth in theAmerican economy. You createjobs and profits, strengthenyour communities and set thestage for other minority entre-preneurs to t:o business withcorporate America."

"They Sell to Philip MorrisSo Can You"

Philip Morris CompaniesInc. annually spend more than$150 million with minority enter-prises. Philip Morris manufac-tures and markets tobacco, beer,and fcod products. Its subsidiar-ies include Philip Morris Incor-porated, General Foods Corpo-ration, Miller Brewing Com-pany, and Mission Viejo RealtyGroup Inc.

Pl-ilip Morris welcomessmall-business operators. In thewords, of a company brochure,"to keep doing the best possible

BUSINESS DEvaormErlr

All HispanicBusinesses 1982

Service 39.6%

Retail 23.5%

Construction 10.8%

Transportation 5.6%& Utilities

Finance 4.5%

Agriculture 3.1%& Mining

Manufacturing 1.8%

Wholesale 1.5%

Unclassified 10.1%

Reprinted with permission,Hispanic Business, Inc.

71PAGE 27


Philip 'Morris; cont.

"to keep:doing the best possiblejob for our customers and Share-holders,iltilip Morris needs thehighest-quality; goodS -arld serv-ices., We can't get them if we'don't open our doors to all whocan provide them."

philip-Morris has establisheda Minority Vendor Task ForceConsist* of purchasing and af-firmative action executives,chaired by-Robert]. Romano. Lo-cated throughout . the corpora-tion, Task Force members are re-sponsible for finding minority-owned .businesses and encour-aging them to bid to supply com-pany:goods and services.

Minority vendors seeking todo business with Philip Morrisare urged to contact a Task ForceMember, and they receive copiesof They Sell to Philip MorrisSoCan You, a large, four-color book-let that explains what PhilipMorris produces, what PhilipMorris buys, how to qua!' 'Fy as asupplier, and whom to t.,,ntactfor more information.

They Sell to Philip Morris isfilled with examples of what and

PACE 2872

iy

how Philip Morris buys. The lastpage carries a complete,alphabetized list of everythingthe company obtains from mi-nority vendorsin nearly 100categoriesand the book in-dudes a simple form for minor-ity vendors to fill out and return.Completed forms are distributedto the company's Minority Ven-dor Task Force members, whoconsult their files when suppliesor services are needed.

AmocoProducing "A Directoryof Hispanic Companies"

In 1985 Amoco's MinorityPurchasing Programbegun inthe early 1970sreached a rec-ord $190 million in company ex-penditures with all minorityvendors.

Early on, the company foundthat minority vendors often out-bid larger, established mainlinefirms. Recognizing that a suc-cessful minority vending pro-gram benefits The-company-and-its customers as well as the mi-nority suppliers, and committedto the development of minorityenterprises, Amoco consistentlylooks for minority vendors whocan deliver the ideal combina-tion of price, quality, and service.

Prior to 1987, Amoco placedno special emphasis on any oneminority group, whether Black,Hispanic, American Indian, orAsian. But in 1986 Amoco de-cided to track by ethnic group itsexpenditures with its then 113minority supplier firms, in order

to match the availability of mi-nority suppliers and thecompany's needs. By year-end1986, Amoco had found that itsHispanic suppliers were receiv-ing over 13 percent of all thecompany's minority purchases.

And in 1988, Amoco will re-search and publish a Directory ofHispanic Companies for its ownuse in purchasing services orcommodities for the company,"for the sake of the minoritypeople, for the sake of our U.S.society, and for our own sake."

73

GTE "MaximumOpp ortunity"

"The ultimate goal of the pro-gram will be realized whenwomen and minority vendorsbecome fully represented andare otherwise indistinguishablefrom our othersuppliers."

General Telephone ofCalifornia's poli.-y is to providemaximum opportunity for firmsowned by women and minoritiesto compete, on a fair and equalbasis, with all other suppliersand contractors.

The company assertivelyseeks women- and minority-owned business enterprises andencourages their participationby familiarizing them withGTE's requirements and proce-dures. But GTE takes additionalsteps: GTE maintains member-ships in minority business tradefairs, provides workshops toguide these groups in their deal-ings with the company, al dinparticularbreaks down largecontracts into smaller oneswhenever possible, in order to

74

ensure minority participation.Such a program requires the

full support of every GTE depart..went. Purchases of minority-produced goods and serviceshave increased from $3 million in1978, disbursed to about 47women- and minority-ownedfirms, to $45 million in 1986, dis-bursed to an average 473 suchenterprises.

General Telephone recentlyhas begun discussions with theLatin Business Association forthe purpose of establishing aPartnerships Program betweenthr.., two organizations. The finalefforts will clearly define mutu-ally beneficial objectives in busi-ness development, education,and advocacy.


Hispanic RatingOf Procurement Sources

Federal II= 23.7government

Stategovernment I

12.1

60.6

City pig 18.7

government

Major 32.2

corporations 53.3

40.0

44.9

Consnmers 34.5

Smallbusinesses

Reprinted with permission,Hispanic Business, Inc.

43.0

70.9

164.9

U Excellent/good

Fair/poor

7 5 PAGE 29

INPOWS OF OPPORTUNITY

Low Income. HousingA New Investment Opportunity

"Business has a vestedinterest in helping improve thecommunities where it main-tains opergtions. At AmocoCorporation, we believe that anadequate supply ecaffordablehousing is an indispensablecomponent of the overall well-being of the neighborhoodswhere our employees live andwork. And I am proud to saythat Amoco has committed it-self to addressing many of thesocial problems which ad-versely affect cities such asChicago."

Laurance Fuller, President,Amoco Corporation

Historically the only inves-tors who derived benefit fromlow-income housing were slumlandlords. Today the picture ischanging. To encourage corpora-tions to invest in affordable

housing for low-income families,Congress included the Low-In-come Housing Tax Credit in thenew Tax Reform Act of 1986. TheCredit replaces a system of accel-erated deductions for low-in-come housing investments witha simpler and more valuablecredit calculated as a percentage(4 to 9 percent) of constructionand rehabilitation costs. Thecredit is awarded annually for aten-year period, and providesprofits for corporate investors inthe form of tax savings.

In addition, business hasdeveloped a number of othercomplementary and innovativefinancing tools to attract corpo-rate and individual investors tothe field of low-income housingand to assure that these lenderscan do well while doing good.

The Enterprise Social Invest-ment Corporation

The Enterprise Social Invest-ment Corporation (ESIC) is anarm of the Enterprise Founda-tion, an organization founded bythe real estate developer JimRouse to deal specifically withthe problem of how this nationcan house its poor citizens.

ESIC has worked to developfinancing techniques that maxi-mize the use of tax benefits, andarmed with the substantial pro-grams that now exist, ESIC isestablishing city-wide public/private systems to fund low-in-come housing projects spon-sored by non-profit groups.

To augment the capitalraised through syndication,ESIC has been assembling mil-

lion-dollar benevolent loan'funds in its concentration citiesin which corporations and indi-viduals make relatively large in-vestments at low interest rates. Inaddition, as federal fundsdwindle, ESIC has been helpinglocal governments identify newsources of funding, such as theproceeds of the Miami real estateproperty transfer tax.

Enterprise is demonstratingthat investment capital linkedwith affordable financing andtechnical support can dramati-cally increase the capacity of lo-cal nonprofits to produce afford-able housing for the poor.

The Chicago Equity Fund

In May 1985, Mayor HaroldWashington announced the for-mation of the Chicago HousingPartnership. It was set up as acoalition of government, busi-ness, and community-basedgroups whose purpose was toencourage sustained productionof affordable multi-family rentalhousing for low-and-moderate-income Chicagoans. The part-nership was an 18-month effortspearheaded by Amoco Corpo-ration, a leading Black entrepre-neur, and officials from theMayor's Department of Hous-ing.

The Amoco NeighborhoodDevelopment Corporation(ANDC) has supported the de-velopment and rehabilitation of

78,

low- and moderate-incomehousing through the ChicagoEquity Fund (CEF), an integralpart of the Chicago HousingPartnership. CEF has organizedtwo investor partnerships com-prised of 20 major corporations.Within two years' time it hasraised more than $11 million ofcorporate capital and combinedit with low- and no-interest loansfrom the City of Chicago, theState of Illinois, private banksand foundations to generate $45million of affordable Chicagohousing.

The Chicago Equity Fundhas been highly acclaimed for itssuccessful comprehensive ap-proach to project support anddevelopment. The ongoing suc-cess of the Chicago program isattributable in large part to the

support of the Chicago HousingPartnership.

The goal for the Partner-ship's first three years is thecompletion of $50 million worthof rehabilitated housing withrents ranging (for a one-bed-room apartment) from $275 tc$350 per month. By 1988, close to1,000 apartn tents will be rehabili-tated to provide housing formore than 3,300 low incomepeople, most of whom will beBlack and Hispanic.


CorporationsInvesting in theChicago Equity Fund

Commonwealth Edison

Harris Trust and Savings

Illinois Bell

Illinois Service Federal Savingsand Loan

Johnson Publishing

Amoco

First National Bank of Chicago

Kraft

People's Energy

Quaker Oats

Sara Lee

Tribune Co.

Baxter Travenol

Central Corporation

Combined International

Illinois Tool Works

Material Service Corp.

Northern Trust Co.

7 PAGE 31

WINDOWS OF OPPoRnzart

Pacific Bell/HACERA Statement ofMutual Cooperation

"I believe this partnership willhelp Pacific Bell meet the needsof the growing Hispanic Com-munity while bringing the bene-fits of the Information Age tothe California marketplace."

Ted SaengerPacific Bell

The Hispanic Associationof Corporate Responsibility(HACER) and Pacific Bell bothbelieve that meeting the chang-ing needs of California's diversepopulation can be a cooperativeeffort between communities andthe corporations which serve

Jerry Apodaca (left), President of HACER, and Ted Saenger, President of Pacific Bell, sign anagreement in San Francisco which signifies increased opportunities and partnership for theHispanic community and the telecommunications company.

PACE 3280

them. To this end HACER andPacific Bell signed an agreementdesigned to establish an ongoingrelationship of mutual trust andrespect. It is conceptual in natureand provides a forum in whichHispanic leadership and corpo-rate leadership can discuss thecommunity's economic needsand seek creative solutions.

The statement outlines 11areas of mutual cooperation andconcern, six of which relate towarketing and to the develop-ment of the Hispanic businesssector:

ServiceProcurementBankingInsuranceAdvertisingProfessional Services

In all these areas Pacific Belland HACER pledge to work to-gether to intensify outreach toHispanic consumers and busi-nesses, to increase the use ofHispanic owned businesses andservices, and to examine creativeways to develop the capacity ofHispanic vendors at all levels inall sectors relevant to the workand needs of Pacific Bell. Thecompany is one of California'slargest private-sector emplonrs

of Hispanics; more than 14 per-cent of its 67,000 employees areHispanic.

Jerry Apodaca, President ofHACER, feels that the statementof mutual cooperation offersHispanics an opportunity to gaina better understanding of tech-nology and its applications:

"Missing that opportunityby failing to participate in thetechnological and economicchanges driving society couldlead to increased hardship....I be-lieve this agreement will help en-sure a strong economic positionfor Pacific Bell in the future andthe continued strengthening ofCalifornia's Hispanic commu-nity."

A joint committee represent-ing Pacific Bell and Hispanicswill review progress and exploreareas of concern; an independentconsultant, jointly selected, willprovide data analysis and infor-mation to the committee; andHACER will report annually tothe state's Hispanic community.

For more information contact:Maury RosasArea Vice President, Los AngelesPacific Bell1010 Wilshire Blvd., Rm. 1677Los Angeles, CA 90117(213) 975-4504

81

Minority Sr bcontractingDeveloping Assets

Over the' last decade, tmsi-nesses have found it not onlylucrative and cost effective toinstitute minority subcontract-ing programs, they have alsofound that the u.-Ique skills andbusiness practices employed bysome groups have enhanced theprojects contracted out.

One successful example isthat of Pacific Bell's minoritysubcontracting programs, Mi-nority Business Enterprise andWomen Business EnterpriseMBE/WBE. Pacific Bell is at-tempting to encourage opportu-nities for minority Owned busi-nesses to participate as directcontractors and suppliers,through prime contractors. Pa-cific Bell requires affected pri-mary contractors to submit aplan for the utilization of minor-ity subcontractors. This thirdparty involvement is meant tofoster lasting relations betweenthe prime contractor and theminority business.

1111111

Pacific Bell sees its policybenefiting minority businessesin two major ways. Fiist, requir-ing prime contractors to developbusiness relationships with mi-nority subcontractors on con-tracts with Pacific Bell producesa strong likelihood that this rela-tiorc'ip will continue and willen; .4.npass other work per-formed by the prime contractorwith other companies. Second,the opportunities provided

0

through this program will stimu-late minority business growthand well-beii.g. The subcontracting plan will be one of the manysignificant evaluath a cry eriaconsidered by Paci`ic Bell inawarding the contract.

Another example of minoritysubcontracting is Westing-house's work with the CauseyMachining Company inOrlando, Florida. Westinghouseover the last three years has de-veloped a relationship wit' the50-percent-Hispanic-owned mi-nority company; this relation-ship was the result zif Westing-house working with Causey,teaching the company Westing-house specifications.. (.7ausey hasproduced over $150,000 in spe-cialized parts and -machining forWestinghouse to date. About 80percent of specialized machiningthat has been performed forWestinghouse, Orlando, by in-state suppliers has been con-tracted to Causey Machining.


The relationship has ma-tured to the point where certaintechnologies are shared betweenCausey and Westinghouse. Nowthis minority subcontractortrains Westinghouse buyers onits machining process, and inreturn Westinghouse offersCausey engineering expertise.No wonder the Orlando divisionof Westinghouse plans to con-tinue its working relationshipwith Causey.

0


Hispanic Advertising Agencies

The Spanish speaking community has become a desirable mar-keting segment for Procter and Gamble, McDonald's, Ford, Metro-politan Life Insurance, Eastern, JC Penney, and Nestle, to mentionjust a. few corporations. These companies, along with a myriad ofothers, have made the Hispanic marketplace a dynamic part of theirstrategic and business plans.

Other companies are anxioui to enter the Hispanic market aswell. They have the products, the capital, all the resources necessary,but are unsure of the approach and the direction. Hispanic advertis-ing agencies can help these companies enter this profitable segment.

In addition to the traditional services' provided by Anglo agen-ciescopywriting, research, design, production, and mediaHis-panic agencies also provide consumer promotion, trade promotion,public relations, and community involvement. In effect, Hispanicagencies can operate as an extension of a corporation's marketingarm.

Following is a list of some of the Hispanic advertising agenciesthat can help your company en-ter the expanding Hispanic mar-ketplace.

Adelante Advertising, Inc..386 Park Ave.New York, NY 10016(212) 696-0855

Bermudez Asociados12400 Wilshire Blvd.Suite 1100Los Angeles, CA 90025(213) 207-4606

PAGE 34

84

Jorge Caballero & Assoc.410 S. Michigan Ave.Chicago, IL 60605:" 2) 939-1410

rnpbell -Ewald LatinaKoger Executive Center8525 NW 53rd TerraceSuite 101Miami, FL 33166(305) 592-7135

Carranza Advertising, Inc.1625 W. Olympic Blvd.Suite 800Los Angeles, CA 90015(213) 385-3414

Castor Spanish Intl, Inc.122 E. 25th StreetNew York, NY 10010(212) 995-5900

Cervera Int'l Corporation1134 N. Vine StreetHollywood, CA 90038(213) 464-2346

Creative Marketing & Adver-tising

1150 NW 72nd Ave.Suite 760Miami, FL 33126(305) 591-7700

Fallis Communications, Inc.3665 Cascade Rd. SWAtlanta, GA 30331(404) 691-3988

Ferrer Ad America, Inc.818 West 7th StreetLos Angeles, CA 90017(213) 688-7250

Font & Vaamonde Assoc., Inc.183 Madison Ave., Suite 1402New York, NY 10016(212) 686-2230

Garcia-Serra, Blanco Advt.250 Catalonia Ave.Penthouse 801Coral Gables, FL 33134(305) 444-4221

Hispania Advertising, Inc.420 Lexington Ave.New York, NY 10017(212) 210-3970

Hispanic CommunicationsDivision

Fleishman-Hillard, Inc.444 South Flower StreetLos Angeles, CA 90071(213) 629-4974

85

Hi§panicinark Advertising, Inc.183 Madison Ave.New York, NY 10016(212) 532-1616

Martinez & Associates3322 Shore Crest DriveSuite 107Dallas, TX 75235(214) 357-3400

MOdoza, Dillon & Assoc., Inc4685 MacArthur CourtSuite 470Newport Beach, CA 92660(714) 851-1811

Media Management Group*1380 Lawrence Street,Suite 1101Denver, CO 80204(303) 893-8011

Moya, Villa Nueva &Associates

Marketing/Public Relations10100 Santa Monica Blvd.Suite 740Century City, CA 90067(213) 551 1114

Noble & Asociados/U.S.A.485 E. 17th Street, Suite 300Costa Mesa, CA 92627(714) 631-4011

OMAR CO.5525 N. BroadwayChicago, IL 60640(312) 271-2720

D.L. Passante Assoc., Inc.2460 Lemoinne Ave.Fort Lee, NJ 07024(201) 886-9000(212) 265-0220

Publicidad Siboney Int.101 Park Ave.New York, NY 10178(212) 907-1000

Reliable All Media Advertising4617 Bergen line Ave.Union City, NJ 07087(201) 348-2919

Robles Communications Inc.38 East 29th StreetNew York, NY 10016(112) 696-4433

San Jose Associates20 E. Jackson Blvd.Chicago, IL 60604(312) 939-7400

Sosa & Associates321 Alamo PlazaSuite 300San Antonio, TX 78205(512) 227-2013

Thompson/Marince Advt.70 NE LoopSuite 610San Antonio, TX 78216(512) 349-9925

Uniworld Hispanic38 West 32nd StreetNew York, NY 10001(212) 239-5000

Zubi Advertising2525 SIN Third Ave.Miami, FL 33129(305) 854-6807

Media Management Group, is aminority owned and operatedagency working closely with theHispanic community in the Denverarea.

WINDOWS-, OF OPPORTUNITY

The 20 LargestU.S. Hispariic Markets

Any list of the largest His-panic markets in the UnitedStates will, depend upon themarket definition employed. Forexample, a market might be de-fined according to the geo-graphic boundaries of a city;county, or counties, StandardMetropolitan Statistical Area(SMSA), or any other limitsdeemed appropriate.

Increasingly popular amongThese alternativeS is the Area ofDominant Influence (ADI). TheADI is a series of counties meet-ing, specific criteria. The ADIconcept originated in the broad-cast industry, and counties areincluded based on the televisionviewing patterns of their popula-tions.

Although used initially as anindication of television marketcoverage, the ADI has been ac-cepted as one of the best, if notthe best, of the market defini-tions. Since the economic, social,and political activity of a marketis, to a great extent, conveyed bytelevi. the ADI effectivelydescribes the geographic area

PACE 36 88

dominated by an economic cen-ter. Thus, the ADI was selectedfur use in defining the metrop oli-tan areas appearing in the fol-lowing list. Using the ADI defini-tion, these are the 20 U.S. areaswith the greatest concentrationsof Hispanics, the prime areas forb.',.siness investment in Hispaniccommunities.

The 'following list presentsthe concentration of Hispanics inthe United States based on 1980U.S. Census estimates. In 1980the Los Angeles ADI accr untedfor almost 20 percent of the entireU.S. Hispani' population. Add-ing the New York ADI, with 14percent of all U.S. Hispanics,these'two markets accounted forover one-third of the total group.

In 1980 most Hispanics (51percent) were located in the sixlargest markets: Los Angeles,New York, San Antonio, Chi-cago, San Francisco, and Miami.Adding Houston, McAllen, Al-buquerque, and El Paso broughtthe total to 62 percent of thenation's Hispanics 'living in theten largest markets. Overall, 77.9

percent of all U.S. Hispanicswere concentrated in the 20 larg-est markets.

Population projections showHispanics are expected to con-centrate increasingly in the 20

largest markets; Los Angdes andNew York will continue to betwo largest U.S. Hispanic mar-kets and will continue to containslightly over one-third of all U.S.Hispanics.

The 20 Largest U.S. Hispanic MarketsADI Market Hispanic Population (Census, 1980)

1. Los Angeles 2,838,6942. New York 2,063,0073. San Antonio 650,7034. Chicago 640,2455. San Francisco 638,1126. Miami 628,4687. Houston 484,560

8. McAllen 432,3439. Albuquerque 368,09110. El Paso 357,04311. Fresno 295,38912. San Diego 275,17713. Phoenix 269,598

14. Dallas-Fort Worth 266,12815. Sacramento 260,92616. Corpus Christi 229,43517. Denver 228,75618. Philadelphia 182,620

19. Tucson 153,12220. Salinas-Monterey 114,207

Reprinted from IV Hispanic Almanac, Hispanic Policy Development Project, 1984

89

Concentration of the HispanicPopulation in the United States

California

Washington

120,016

Oregon

65,847

4,544,331

Nerada

53,879

9,507

Idaho

36,615

90

Utah

60,302

Arizona

440,701

Montana

9,974

Wyoming

24,499

Colorado

339,717

New Mexico

477,222

<lb C0C:OOHawaii

71,263 ,

North Dakota

3,902

South Dakota

4,023

Nebraska

:8,025

Kansas

63,339

Minnesota

32,123

Oklahoma

57,419

Texas

2,985,824

Wisconsin

62,972

Iowa

25,536

Missouri

51,653

Illinois

635,602

Arkansas

17,904

Michigan

162,440

Indiana

87,047

Mississippi

Louisiana 24,731

99,134

Ohio

119,883

Kentucky

27,406

34,077

5,587New

Hampshire

3304 *ff':'

New York

1,659,300

rennsyhuma

153,961

WestVirginia

12,707

Georgia

Virginia

79,868

North Carolina

56,667

South Carolina

61,260

33,426

The Number of Hispanics by State

Numbers Included Within State BoundariesAre 1980 Census Counts of Hispanics

Source: Data from Census Report PC80-S1-7,

Maine

5,005

141,043havens

Island 19,707nnecticut

124,499

sewjeney 491,883

1are 9,661gt of Columbia 17,679

Alaryland

64,746

858,158


PAGE 37

91

Share With Us

The Programs described in these books are only a smallfraction of the programs in operation across the countrysome nationwide, some statewide or regional, some re-stricted to one neighborhood.

If you are involved in or know of such a program, aimedat Hispanic human development or business development,please tell us. You need not report all the details or write upthe program. Butin the words of Lodwrick Cookwewant your stories! We will follow up the leads you send us.

Once a year we will send you all a newsletter detailing7rograms that demonstrate leadership in working with theHispanic community. just complete the coupon and mail it;we'll be in touch.

92

r

L

Name (please print)

Title

Corporation, Business, or Organization

Address

City, State, and Zip

Name of Program

Type of Program

Target Population

Clip and mail to: The Hispanic information CenterHispanic Policy Development Project1001 Connecticut Avenue, NW, Suite 310Washington, D.C. 20036

93

-1

Published byThe Hispanic Policy Development ProjectSuite 3101001 Connecticut Avenue, NWWashington, D.C. 20036

(202) 822-8414

Project Coordinator: Carol OppenheimerEditor: Stina SantiestevanDesign: Carol Oppenheimer, T.C. FieldsConsultatits: Ray Garcia, Joaquin AgeerosWriters/Researchers: Martha Galindo, Siobhan Niko lau,Carol Oppenheimer, Carmen Ramos, Henry Santiestevan,Rafael Valdivieso

This publication was produced on a Macintosh Plus computer, and wasreproduced from a master copy created on an Apple LaserWriter Plus,a gift from Apple Computer, Inc

Copyright 0 1987 by the Hispanic Policy Development Project, Inc Allrights reserved. No part of this book may be reproduced or transmittedin any form or by any means without permission from the publisher.

94

Documents

TITLE INSTITUTION NY. 87 - ERIC · The Key to Successful Advertising. Hispanic Expertise. Targeting Hispanics through Media. Big Business Comes on Board. Silver Screens Moving Beyond