Diverse Multicultural Communities (and Why You Should Target Them)
Every global business has to achieve a difficult balance: achieving an economy of scale through uniformity across markets and simultaneously serving regional and national markets.
Diverse multicultural marketing, sometimes called ethnic marketing, targets audiences of different ethnicities. These audiences usually fall outside of the nation’s majority culture. Marketers adopting this strategy should consider the community’s languages, religions, traditions and celebrations during communications. Multicultural marketing, if executed properly, can become the company’s main competitive advantage.
For multicultural marketing to truly work, complex product and company knowledge has to be translated, not just linguistically, but through the lens of local institutional norms and interpersonal networks. Simply modifying existing content or translating messages into different languages can lead to misrepresentation. Think of Europe, where English adverts with characteristic British humour are shared with a broad audience and fail to achieve the desired result. Effective DMC marketing builds loyalty and brand awareness through targeted, direct communication.
Tips For Diverse Multicultural Community Marketing
Global cosmetics brand L’Oréal is one that is frequently mentioned in multicultural marketing white papers and research. Their strategy of universalisation (globalisation that captures and respects differences in local cultures) has led to considerable growth in the past 10 years. The company has offices in more than 130 countries and has reported +20.9% growth in the first half of 2022, performing exceptionally well in India, China, Brazil and Germany. They also own more than 20% of the cosmetics market in Europe.
L’Oréal approached each expansion with the belief that cosmetics are not just a combination of chemicals. The concept of beauty varies dramatically from culture to culture, not just country to country.
In order to adopt this strategy, the company internationalised their entire management team, taking care not to disrupt the community of senior management by recruiting teams around highly experienced individual managers and placing executives from mixed cultural backgrounds in their new product development centre in Paris. The company also outspends their competitors on R&D by devoting 3.5% of their total budget to adjusting and creating products that appeal to multiple cultures.
The message is clear. Brands that want to appeal to DMC audiences have to be authentic in their approach and do their homework. The transformation has to be genuine in order to be relatable. For example, many Middle Eastern creatives use models from India or Latin America to represent Arab consumers. This tokenistic approach has resulted in customers who feel devalued, and many will pivot to new brands with more authentic targeting.
It’s also important to conduct thorough research – and to thoroughly interrogate the results. Many large research houses use small sample sizes of diverse ethnic consumers, which can lead to inaccuracies that are later reflected in client budgets. Businesses must ensure that they partner with a research house to obtain results that are reflective of the true size and purchasing power of the audience.
Benefits of Reaching DMC Audiences
Targeting diverse, multicultural communities can open up exciting new revenue streams for brands.
Instead of focusing all of their marketing resources on the highly competitive Easter, Black Friday and Christmas period, brands can take advantage of other peak retail seasons celebrated by DMCs, including Ramadan, Eid, Diwali, Chinese New Year, Nawrooz and Vaisakhi. Consumers shop for food, clothes and white goods during these festivals and events, creating an excellent opportunity to boost sales and capture consumer attention.
Clients will often target a single segment that only represents a portion of the market. For example, brands in the UK may target the white majority with their entire budget. This approach discounts 4.3 million Asian British consumers, 1.9 million Black consumers, and nearly 2 million other ethnic groups. By targeting smaller and more diverse audiences, brands can extend their reach and optimise their budget.
While anyone can uncover new market opportunities, businesses that have strong multicultural teams are more likely to do so as they are more adept at dealing with cultural complexities.
Targeting different audiences can fuel innovation and expand product lines for brands. As audiences become more familiar with the cultures around them, these products will start appealing to the primary market as well. Think of the many different food trends that have become staples at restaurants around the globe, including sushi, kombucha and dukkah.
With more than 70 million first- and second-generation migrants in Europe and a 36.7% DMC population in the USA, marketers have to recognize the potential of targeting diverse, multicultural communities in their ad campaigns and efforts.
Markets and competencies are increasingly dispersed and strategies need to be differentiated in emerging regions as well as in a brand’s home country. It requires a true shift from ethnocentricity to globalisation, where knowledge from multiple locations are integrated with HQ expertise to minimise conflicts and develop new products with mass appeal.
Brands that fail to recognize the importance of DMCs may soon fall behind the competition for good.