The participants in “A Changing America” panel at the recent Wharton Latin American Conference hardly needed reminding that 40 million Hispanics live in the United States today, accounting for 14% of the total U.S. population and establishing a base as the largest minority group and the fastest growing population segment in the country.

Which was exactly the point. Instead, the three panel representatives from Citigroup, People en Espanol and Univision discussed how their banking, magazine and television entertainment businesses have successfully captured the Hispanic and Latino markets in the U.S. by designing programs and products specifically tailored to these segments.  

Across these three diverse industries, similar themes emerged, with one overriding message: Though 60% of all Hispanics in the United States come from Mexico, Hispanics are increasingly recognized as a complex, multi-layered population segment that represents many different Latin American nationalities and varying levels of integration within the U.S. economy and the culture. And while the Hispanic population continues to assimilate, its tendency to hold on to its origins and its native language will create a complicated and challenging consumer market — a “changing America” that won’t be easy to define.

“We are not here to try to convince anyone that the Hispanic market is a relevant market, that it is a growing market,” said panel moderator Fernando Valenzuela, a member of the Society of Wharton Fellows and the founder and director of Instituto de Desarrollo Empresarial Anáhuac del Sur (IDEAS), a group that brings academic and business worlds together to help Latin America. “We are going beyond that. It’s a very live market that is changing every day.”

Traditionals, Bi-Culturals and Assimilated

Panelist Rebeca Vargas, Citigroup’s vice president and Hispanic markets director, leads the global financial giant’s efforts to develop products and services that meet the needs of the Hispanic population. Citigroup recognizes that “there are three different types of Hispanics in this country,” said Vargas: the Traditionals, those Hispanics who only recently came to this country, speak only Spanish, prefer to live in Hispanic neighborhoods, and do not use banks or banking services; the Bi-Culturals, Hispanics who have been in the U.S. longer, speak both languages, live in-between cultures, and “have their own bank accounts but still walk across the street to send money to their relatives through Western Union;” and third, the Assimilated, Hispanics who have lived the longest in the U.S., speak primarily English, have a higher level of education, and use financial services similar to the banking patterns of the general market.

Citigroup’s outreach efforts focus on helping Hispanics — especially the Traditionals and Bi-Culturals — overcome what Vargas called the Hispanic population’s “barriers to financial services … Hispanics may lack identification or proof of address. They are unfamiliar with what the (banking) products and services are, due to lack of access in their country of origin. They feel intimidated dealing with a financial institution. Culturally, they have been used to living in a cash-culture basis. And Hispanics usually prefer face-to-face interactions and acquire products through word of mouth.”

Given this environment, Vargas said, Citigroup “developed an overall strategy to target these segments” that included providing bilingual services and bilingual marketing materials; accepting specific Mexican forms of identification issued by Mexican consulates to open U.S. bank accounts; offering bank-to-customer communications that reflect the Hispanic financial culture and provide more one-on-one explanation within the Hispanic community; recognizing and catering to the Latino woman as the financial head of the household and the one who starts businesses, applies for a mortgage or secures loans; and launching a money remittances service to capitalize on what the Pew Hispanic Center in Washington, D. C. estimates is nearly $30 billion in remittances flowing each year from Latinos in the United States to Latin America. “Indeed, for many migrants the ability to support family members through remittances is an important motive for coming to the United States,” Pew reported this past October in its report, “The Wealth of Hispanic Households: 1996 to 2002.”

Vargas and others call these the “unbanked” households, and Citigroup has developed several new products to try and capture this business. One such product is Citigroup’s bi-national or “cross-border credit card” that allows Hispanics in the U.S. to share credit with relatives in Mexico. Citigroup charges a yearly fee for the card, which is issued through Banamex, the largest bank in Mexico and a Citigroup subsidiary. After opening an account with Citigroup, the U.S. cardholder — who is responsible for the payments and sets the spending limits — chooses the people in Mexico who get a card, which can also be used, for a fee, for cash withdrawals from automatic teller machines in Mexico.

Another Citigroup product designed to capture the remittance banking activity is the “tri-color card.” Essentially a debit card, a tri-color card can be acquired for $2 — about 25 pesos — from a bank in Mexico and is maintained by a relative in the U.S. “The tri-color card is the entry account for the unbanked segment in Mexico,” said Vargas. At this point, she added, most of Citigroup’s cross-border products are available only in Mexico, but the bank is working to make them available in other Latin American countries as well.

Magazine for Spanish Language Readers

While Citigroup has, over the last decade, consistently positioned its services and products to take advantage of the burgeoning Latino influence, the trend took People magazine by surprise, according to one of its top directors.

“Does anyone know how People en Espanol got started 10 years ago?” asked panelist Jose Raul Perez, the consumer marketing director for the People magazine spin-off called People en Espanol that has become the best-selling U.S. Hispanic magazine with over four million readers. “One situation happened: Selena was assassinated.”

According to Perez, Time Warner published and sold a million copies of People magazine in Texas in May 1995 when Selena — the star of Tejano music who was a household name throughout Mexico and Latin America and who was on the verge of being a cross-over star — graced the cover, just days after she was killed by an assassin outside Corpus Christi. “That sort of woke Time Warner up, and they realized, ‘Wow, there is a huge population of Hispanics out there and we better get a product'” for them.

That product — People en Espanol — is not People magazine simply translated into Spanish, Perez noted. “Rather than trying to translate People, we create a product every single month that is 100% written expressly for Spanish language readers.” Which means that Tom Cruise and Jennifer Lopez are not on the cover. Why? “No one cares,” said Perez. “Our consumers are interested in their own television stars or music stars from their countries of origin. They see a lot of these celebrities crossing over, and once that happens, we find that it detracts from sales and no one wants to read about them.”

According to Perez, “cultural authenticity is the most important thing we do.” While People en Espanol carries stories on celebrities, fashion and beauty — “which are hallmarks of People magazine in English” — it also includes current events and human interest stories. “We have learned from our research that our Latino readers love to see Latinos who have made it in the United States. Every issue features those kinds of people. We always refuse to present the stereotypical Latino.”

Some additional People en Espanol touchstones? According to Perez:

·         Brands really matter. People en Espanol must be sold where Latinos traffic, especially in places like Los Angeles, New York and Miami. When the magazine launched in 1998, “the first thing we did was make sure that the product was in supermarket checkouts and Kmarts in areas where Hispanic people live and shop.”

·         Building trust is critical, particularly when it involves the U. S. Postal service. “One of the things we had to overcome is the fact that the immigrant population doesn’t trust the postal service. In their countries of origin, it doesn’t deliver the mail very well. We had to provide education about subscriptions, and the fact that you could get your magazine delivered to your home.”

·         The magazine is 100% published in Spanish — not “Spanglish. That’s what really sets us apart from our competitors (like ‘Latina’ or ‘Selecciones’).  We avoid slang. We actually use Colombian Spanish to edit the magazine every month, because it is the most generic form of Espanol. We have to be very careful with the way we use certain words. Words that mean one thing in Mexico mean something very different in Cuba. I have learned that the hard way.”

·         People en Espanol caters to the Hispanic woman. “She is in control of the household budget, she participates actively in major purchases, and if you ignore the woman you are ignoring the bulk of your opportunity. The Hispanic woman has become our hallmark.”

Granted, People en Espanol is not intended for the “assimilated Latino, or even the heavily acculturated Latino,” said Perez. “Our product is for the first- and second-generation Latino. But we are finding that there is a lot of reverse culturalization going on in Hispanic communities. People en Espanol is a great product for Hispanics and Latino families who are back in touch with their language.”

Straddling Two Worlds

While the banking and publishing industries seek new ways to capture the Hispanic markets, panelist Peter Filiaci, a strategic marketing representative for Univision Communications Inc., the largest Spanish-language media firm in the United States, told the conference that “reaching out to the Hispanic population has always been our sole focus. The marketplace is not an experiment for us but actually our heart and soul.”

The strategic marketing group at Univision — which operates television (Univision, TeleFutura and Galavision), radio (Univision Radio), an Internet portal ( and a music division — is responsible for connecting Hispanic consumers and clients’ brands with Univision’s assets to create “integrated marketing platforms.”

One of the challenges “is to keep pace with the growth of the Hispanic population and its changing needs,” said Filiaci, who describes the Univision television networks as a “mass-reach vehicle serving a niche population.” According to Univision statistics, Univision broadcast reaches 98% of all U.S. Hispanic television households; TeleFutura, the 24-hour Spanish-language broadcast network launched two years ago, reaches 79% of households; and Galavision, the Spanish-language cable television network, reaches more than 5.7 million U.S. Hispanic cable subscribers.

“The other challenge, quite honestly,” said Filiaci, “is to get marketers to see that Hispanic consumers are not that different from other brand or consumer groups. What we are really trying to do is demystify the challenges while highlighting the opportunities. In other words, we want to show marketers the positive impact that this consumer group will have on their bottom lines.”

Filiaci admitted, however, that the Hispanic population in the U.S. “is straddling two worlds.” Hispanics, he noted, have achieved an “all-time high in home ownership, income and acquiring new vehicles, and they are heavy users of wireless services and are getting online at a faster pace. Their total consumer spending is now over $600 billion and is expected to double over the next 10 years.”

But despite the Hispanic population’s dogged pursuit of the American dream, advertisers, products and services must recognize that “there seems to be an equally determined effort to hold on to their language and culture,” said Filiaci. “While Hispanics can and do watch English-language television, they continue to watch Spanish-language television in record numbers, not only because of the language but because of the unique product.” Echoing a theme from People en Espanol’s Perez, Filiaci noted that “it’s not as simple as taking English content and translating it into Spanish content. If that were the case, we would be facing much stiffer competition.”

When questioned, all three panelists defended their companies’ mono-lingual products and services approach to the Hispanic market. “I don’t think any one of us can say that we represent 100% truth for the Hispanic population,” said Filiaci. “But we try to serve the portion of the population that is very underserved, who want a unique destination of 100% Spanish programming.”

Perez noted that when People experimented with “a number of bi-lingual issues, they bombed. Completely. They never worked for us.” And Citigroup’s Vargas argued that “even in the case of people who are completely assimilated, they still appreciate that a financial institution is trying to talk to them in their language.”