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Evolution of Ethnic Segmentation for Telecom

In 2006, U.S. ethnic communities account for one-third of every dollar spent on consumer telecommunications services, according to a new market research study from The Insight Research Corporation.

The largest minority group, Hispanics, representing nearly 44 percent of the U.S. minority population, spend the most. The ability to tap into the increased spending power of the Hispanic-American, African-American, and Asian-American communities will be crucial to the survival of telecommunications providers over the next five years.

Insight Research’s market analysis study takes a close look at the purchasing habits and telecom usage patterns of the Hispanic segment of the U.S. population. The study emphasizes that the U.S. Latino market is not one homogenous market; rather, it is made up of many markets.

The study found that 68.3 percent of the overall U.S. population owns cell phones, with White Non-Hispanics having the highest ownership rate at 71.9 percent, followed by Asians at 71.3 percent, African Americans at 68.2 percent, and Hispanics at 60.6 percent. When sub-segmenting the Hispanic market, however, Insight found that English-oriented Hispanics nearly approach the overall market penetration rate at 67.5 percent.

“The purchasing power that the Hispanic-American, African-American, and Asian-American communities exert in the telecommunications industry is not being ignored,” says Robert Rosenberg, Insight Research. “Yet the cell phone companies that now spend millions of dollars on undifferentiated Spanish-speaking advertising campaigns that blanket the Latino community have missed the boat. The Hispanic community must be addressed with nuanced messaging appropriate to its internal diversity or those cell phone carriers simply won’t survive,” Rosenberg concluded.

I've previously reported on the requirement for more granular market segmentation approaches to help identify -- and fully comprehend -- both the apparent commonality and differences between the various needs-based clusters within the increasingly fragmented marketplace for new communication and entertainment products.

Clearly, these sub-segment clusters have been in existance for some time. What's new is the marketer's discovery and acknowledgement that mass-market approaches produce a very limited perspective -- because of the inherent broad-based assumptions that are often applied. And, while a more in-depth market analysis can require a significant investment in time and effort, the results are proving to be worthwhile for our target marketing projects.

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