Goya is Big, But Not Great (Yet)

Article by by Larry Lucas and Jorge Aguilar
When you think about prepared Hispanic foods, Goya is the brand that most likely comes to mind. Around since the 1930s, it offers hundreds of products, has gained access to both Hispanic and mainstream retail outlets and has spent tens of millions of dollars in television advertising. Unequivocally, Goya Foods is a large, successful company.

Many brands are at a similar impasse, investing significant resources in the quest to become authentic Hispanic brands. But they end up stuck in the middle, unable to connect with this demographic group and undifferentiated against competition. Why?
At the most basic level, one explanation is the tendency of marketers to approach Hispanics as a single group when, in fact, there are a variety of fundamental differences within it. Fortunately, an increasing number of businesses are realizing this and are exploring ways to segment the Hispanic market. A basic Google search, for example, reveals a handful of segmenting variables that are being used today. While they are a good starting point, these variables are less than ideal. Here’s why:
• Generation: Many believe Hispanic attitudes and behavior are generation-dictated. Not necessarily. While differences exist among first- and second-generation Hispanics, common attitudes can bridge the gap among generations. In our experience, regardless of generation, customer segments that share a hectic lifestyle are willing to pay for products and/or services that help them simplify their lives.
• Country of origin: While country of origin can influence culture, beliefs and opinions, there are enough similarities to assist in cross-country segmentation. Why should a Mexican think differently than a Venezuelan when buying a car or a home? Country of origin is probably more effective in profiling customers rather than segmenting them.
• Orientation toward family: Many ads targeted at Hispanics depict a big family celebration, as some marketers think that all Hispanics are family oriented. In fact, while there are segments that are defined by their family ties, others are more motivated by a different set of values, such as the level of service they receive during the shopping experience.
• Importance of brand: Another fallacy is that Hispanics tend to buy based on brand recognition, preferring what they already know to minimize risk. This isn’t universally true. As in any demographic group, a segment exists that actively looks for and purchases new products and services—the early adopters. Not all Hispanics are risk-averse.
• Product usage: A Goya manager once said, “In Latin America we are united by the language and separated by the bean,” implying that customers can be effectively segmented by what they buy. Segmenting via purchase behavior, however, presents an incomplete picture and produces a segmentation solution that is not stable over time. Think about segmenting customers in the cell phone category based on what product they currently use. This segmentation solution would change every six months and thus hinder the creation of strategies that work over time. Marketers need to understand the motivation for why customers choose the model they do.
• Language: Another popular notion is that English-language ads are less effective than Spanish-language ads in reaching this group. Reaching customers in their preferred language is necessary, but not sufficient to be successful. The most critical issue is identifying the type of message that resonates best with Hispanic segments. Finding the right vehicle and language should flow from there.

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Source Brandchannel