Fundamentals of Management 7th Edition by Ricky Griffin

Exercise 11

¿Qué Pasa in the Ad Agency?
• A recent Toyota television ad: A father is explaining Toyota's hybrid engine to his son. "[The car] runs on gas and electricity," he says. "Mira. Mira aquí. [Look. Look here.] It uses both." The son replies, "Like you, with English and Spanish." "Sí," replies the father.
As the makeup of U.S. society changes, organizations have realized that they need to change the ways in which they communicate with diverse customer bases. It might come as something of a surprise, but this Toyota TV spot reflects a virtually revolutionary change in the way American companies address potential buyers from different cultures. Once, for example, they assumed that Hispanics living in the United States were immigrants, spoke no English, and clung to old world values. Today, however, they're well aware of the fact that over half of the country's 50 million Hispanics were born in this country. Like the father and son in Toyota's depiction of Hispanic life, most Spanish speakers know English and mix elements not only of both languages but of both U.S. and Latino culture. "This group is not about nostalgia for the home country," says Jaime Fortuño, managing partner of Azafrán, a New York-based ad agency.
There was also a time when advertisers relied on mainstream ads-ads aimed at the center of the market where they expected to find the "typical" consumer. But as the purchasing power of minorities has increased, companies have put more energy into developing targeted ads-ads aimed at specific groups of consumers and often delivered through language-targeted media. Today, for example, a corporation thinks nothing of budgeting $100 million a year for Hispanic-themed ads. Since 2004, about one third of ads targeted to Hispanics have been presented in Spanish, and that proportion is growing-for good reason. The buying power of Hispanics grew from $490 billion in 2000 to $1 trillion in 2010-a rate of 108 percent over the decade (compared to a 49 percent rate for the majority market). By 2015, Hispanic buying power will hit $1.5 trillion and will account for 11 percent of the national total.
Although advertising slumped across the board in 2008 and 2009, the decline in Spanish-language media was more moderate than in the industry as a whole. And although Spanish-language advertising in 2009 was down from in 2008, the Association of Hispanic Advertising Agencies (AHAA) reports a rebound in 2010, especially among its "best-in-class" Spanish-language advertisers-those that allocate more than 11.8 percent of their ad budgets to Hispanic audiences. "Our 2009 report," says AHAA chair Gisela Girard, "revealed that many corporations 'don't get it,' [but] our 2010 … findings indicate that it's the current best-in-class companies that are spending more in the Hispanic market in an effort to turn around those businesses."
• An ad for Southwest Airlines: A virile young Hispanic rollerblades up to a parked car to admire his image in the tinted window. The window unexpectedly rolls down to reveal two men inside the car who are also admiring him. "Want to get away?" reads the punchline, which is followed by a low airfare price.
"In advertising," observes Juan Pablo Oubiña, art director at Grupo Gallegos, an L.A.-area agency, "it's not easy to be different. It takes ten times as much work." And getting the language right isn't really the hardest part of making Spanish-language ads. Like this Southwest ad from the Hispanic-owned agency Dieste Harmel Partners, many of the latest-vintage Spanish-language ads have succeeded in appealing to Hispanic audiences by playing with and against stereotypes, but as one Hispanic marketing consultant observes, it's a tricky balancing act. "Not only are Americans comfortable with positive stereotypes as a means to be politically correct," says Jennifer Woodard, "but so are many Hispanics." The problem of stereotyping, she reminds us, is usually twofold: Advertisers tend to rely on stereotypes because they assume that they're somehow reflective of the mainstream, and the consumers being stereotyped tend to settle for stereotypes because they dominate the images of themselves that are available to them in the media.
• An ad for Fox Sports Net: Returning home from a shopping trip, a Hispanic woman detects an unpleasant odor in the house. The camera pursues her as she follows her nose from room to room until she reaches the living room, where she realizes that her husband is so thoroughly immersed in a televised soccer game that he's been watching through the open door of a nearby toilet.
This ad-a Grupo Gallegos creation-does a good job of playing with and against stereotypes because it bounces off the stereotype of the soccer-obsessed Latino in what Woodard describes as "a great example of taking a slice of life from a husband and wife, no matter the culture, and pushing the ad into entertainment." Contrast this ad, however, with the far more common appropriation of the same stereotype in TV advertising aimed at Hispanics. "[W]atch a few hours," suggests agency executive Tommy Thompson, "… and count how many soccer-themed spots you see. And I'm not talking about World Cup season or during the airing of soccer matches where contextually it makes sense. It almost seems that soccer is the only way to connect with [Hispanic viewers]. What does soccer have to do with life insurance, for example? Are there really no other insights as relates to Hispanics' need for life insurance that can be communicated without soccer?"
Thompson, founder and president of Dallas-based iNSPIRE!, argues that advertisers should focus on "what makes the target [market] tick as it relates to [a] particular brand or category." It's advice that Gallegos put to good use in an ad for Energizer batteries. Gallegos was originally given the task of making the brand "iconic" for Hispanic consumers-giving it immediately familiar symbolic value so that Spanish speakers would think of perpetual motion and say "como el conejito Energizer" the same way that English speakers think of perpetual motion and say "like the Energizer bunny." At Grupo Gallegos, however, brainstorming on a new account always starts with "Okay, aquí está el problema que tenemos when we really start looking at the brand," and the Gallegos team realized early on that most Hispanics don't associate batteries with perpetual motion (or anything else): For them, a battery is a battery. So Gallegos came up with an ad in which a Mexican man walks down the street and shares his realization that he's immortal-whereupon a two-story commercial sign falls on his head. Among other things, he observes, being immortal means that you need a very long-lasting battery for your camera.
You're a top manager in a large factory whose workforce is approximately 40 percent Hispanic. Business is down because of the recession, and you've learned that there's a rumor about layoffs circulating in the grapevine. In particular, a lot of Hispanic-speaking employees seem to think that they'll be laid off first. How should you deal with the rumor?