SAN JOSE — The technology economy’s downturn has opened the eyes of personal computer makers to the nation’s booming Hispanic population, which has grown 58 percent to 35.3 million in the past decade.
The overall U.S. market for computers is saturated. Computer ownership among white households is 55.7 percent; among Asians, it’s 65.6 percent.
Yet just 33.7 percent of Hispanic households owned a PC in August 2000, according to the latest available data from the U.S. National Telecommunications and Information Administration.
“It’s simple math,” said Eric Newburger, a statistician with the U.S. Census Bureau.
“If you’re selling computers, you’ll see that a lot of the Hispanic population doesn’t have computers.”
Computer marketers, their sales badly sagging, are waking up to Latino customers like Otelia Mendoza.
A Mexican immigrant living in East Palo Alto, Mendoza recently bought a Gateway computer to help her five children through school.
“It took a long time for them to notice us – computers have been around for 10 years,” said her 13-year-old, Genaro Lombera Jr. “Just because we’re Mexicans doesn’t mean we don’t need computers.”
The nation’s top PC vendors – Dell Computer Corp., Compaq Computer Corp., IBM Corp., Hewlett-Packard Corp., Gateway Inc. and Apple Computer Inc. – all have some services aimed at Spanish speakers, including multilingual help desks or Web sites.
But none have marketing campaigns as intensive as Gateway, which drew 20,000 visitors to its small store in Stockton, in California’s Central Valley, by inviting champion boxer Oscar de la Hoya.
The San Diego-based PC maker was the first to make a major push, increasing its Spanish-speaking call center staff from nine to 65 beginning in September, and putting merchandise and staff dedicated to Hispanics in nearly half its 300 stores.
Compaq plans its own Spanish-language initiative by the end of July, offering Presario 5000T desktop models with Spanish-language software, operating manuals and keyboards, including such characters an “n” with a tilde, which were previously available only in Latin America.
IBM, meanwhile, is increasing its involvement with Hispanic associations and businesses; HP is setting up product booths at cultural festivals.
“We realized we weren’t talking to them, we were talking at them,” said David Turner, vice president of marketing for Gateway’s consumer division. “Now we’re talking to them, and they’ve responded favorably.”
Gateway said it made three times the revenue from Hispanic customers in the first quarter of 2001 than in all of 2000. By year’s end, it expects revenue from Hispanic customers will be 13 times greater than in 2000.
Partnering with Univision Communications Inc., which owns the nation’s leading Spanish-language broadcast network and Internet service provider, Gateway also runs television commercials that are made from scratch – and not just a translated version – for a Spanish-speaking audience.
Marketing experts who have seen Gateway’s ads say the PC maker has smartly captured the attention of Hispanic viewers, appealing to their strong family values and aspirations to succeed.
One ad features a middle-class Latino family gathered around a PC, the father commenting on how Gateway helped his family fulfill a seemingly impossible dream of getting a computer.
Gateway officials are being careful to avoid the hall of shame of Hispanic marketing – ads that lose their relevance or manage to insult their audience by mangling translations.
For instance, a Spanish version of a “Got Milk?” commercial had to be pulled off the air because the translation asked the equivalent of “Are you lactating?”
Compaq, based in Houston, is equally ambitious about targeting Hispanics.
“We see this as a potential gold mine,” said Mark Vena, director for consumer desktops in Compaq’s Home and Office division.
None of the companies would say what they’re spending on these marketing initiatives, but all say the efforts will pay off.
The new focus could have come earlier, said Felipe Korzenny, principal and co-founder of Cheskin, a market research and consulting firm.
“They’ve been under the wrong impression that making specific cultural efforts were not relevant to their category,” he said.
Compaq officials admit targeting the nation’s Hispanic segment wasn’t on their radar until PC sales slowed.
“When you were looking at 20- to 30-percent growth rates over the last two or three years, you can afford to not do something like this,” Vena said.
Now, PC makers need new markets. The first quarter of this year saw the industry’s first-ever U.S. revenue decline.
The numbers are more promising among Hispanics, now even with non-Hispanic blacks as the nation’s largest minority group.
According to a Cheskin market study, the percentage of Hispanic non-computer owners who intended to buy one rose to 40 percent last year. More than two-thirds didn’t have a preferred brand.
At the moment, it’s anybody’s market to dominate.
Compaq leads with an 18 percent share of computers owned by Hispanic adults; IBM and Gateway follow with 15 percent each, according to the Cheskin study. Apple has 13 percent; HP, 11 percent; and Dell, 8 percent.
Advertising experts say high-tech players should learn from Old Economy companies that have long catered to Hispanic consumers, such as Coca Cola or Procter & Gamble, one of the first to make product labels in Spanish.
Such companies have invested millions in time, money, and community involvement to lure Hispanics – and have won their consumer loyalty in return.
“People are looking for comfort levels,” said Robert Grayson, a consultant and 20-year veteran in marketing. “Having a tilde key (on a computer keyboard) is great, but it goes beyond the need of the tilde because you can still write ’senor’ without the tilde. What that says is, ’You’re thinking of me,’ – and that’s ethnic marketing.”