Why diversity matters
Professor Richard Webber, founder of Webber Phillips
Richard is the originator of the postcode classification systems Acorn and Mosaic and is a former Director of Experian. He is a visiting professor at the University of Newcastle and a fellow of the Market Research Society and the Institute of Direct Marketing.
The media has been full of stories about the ethnic divide. Cambridge University isn’t diverse enough, radio stations have few minority employees and charities too have been criticised for ‘white washing’. Moreover, Dame Louise Casey, in her recent review of the integration of ethnic minorities, accused the public sector of burying its head in the sand. Her report criticised public officials for their failure to tackle strategic issues that affect the integration of minorities for fear of being branded racist. The report is a damning indictment of Britain’s approach to managing diversity.
But are marketers any better? Today the number of the Britons of foreign descent is approximately equal to the number of people aged over 70. It is larger than the population of Greater London. Marketers that fail to address the needs of such groups are often criticised for their lack of sensitivity or understanding of an important niche market segment. Why then are the needs and consumer preferences of specific minority groups so routinely overlooked? Is it, as Dame Casey suggests, from a deeply entrenched anxiety of being considered racist? Or is it for want of a proper understanding of how the needs of minorities differ from those of the mainstream population?
One reason is undoubtedly anxiety. As was evident during the Brexit referendum, people are frightened of being criticised for unwittingly using politically incorrect language or appearing to stereotype. Marketers are no exception. Companies worry about the legalities and reputational risks of using data tabulated by ethnic background. It is easier to duck the issue.
A second problem is that until recently it has not been easy to measure consumption by ethnic group. Asking people their ethnic background does not improve response to customer surveys. And even where the 12% of the national population that belongs to a minority can be identified, aggregate data conceals huge differences between minorities, many of whom make up fewer than 1% of consumers, too few to be statistically reliable when analysed using market research surveys.
A third reason is the assumption that over time the lifestyles and tastes of diverse groups will converge with those of the majority. But this is not the case. Our analysis shows that the behavioural traits that distinguish one ethnic group from another are greater and far more deep-rooted than we had originally supposed, indeed often more deep-rooted than even the members of the communities are themselves aware of. The orthodox view of race relations experts is that historic patterns of discrimination are at the root of most differences in behaviour. But so different do we find the behaviours of different minorities that it is difficult not to conclude that it is often innate cultural differences that are the principal source of differences in consumer behaviour.
The fact is that the good instinct of most people to treat everyone equally isn’t served by pretending that they are all the same. Actually, the reverse – if we want everyone to have access to the same range of services and goods, we need to understand their needs, desires and behaviours even better.
For instance marketers of more expensive consumer goods often underestimate the extent to which a South Asian consumer will consult with other members of the extended family before he or she makes a purchase. South Asians, according to research, are likely to include a larger number of family members in an important shopping trip. Restaurant meals are likely to involve a much larger gathering of people. So too do visits to the performing arts. Banks have recognised that the distinctive structure of South Asian extended families have significant implications for the design and marketing of financial service products to their small business owners.
In clothing it would be surprising if there were no significant differences between cultural groups in terms of price points, styles, colour and materials. Whereas the Jewish man has a predilection for white shirts, a well-dressed Spaniard will choose a blue shirt and an Italian a pair of brown shoes. Greek Cypriots are skilled in leather-work and particularly enjoy wearing apparel which is made from it.
In the car industry we are confident that it is not only different marques that appeal to members of different minorities but so too do different colours. South Asians and Jews, by virtue of the frequent need to transport extended families, have traditionally been frequent purchasers of people carriers. And predominantly Jewish Stamford Hill used to be referred to as “Volvo City”. Different minority groups also have very different tastes in housing; Hindu and Sikh South Asians being attracted to inter-war mock-Tudor styles whilst the Chinese have a particular predilection for homes that are newly built.
Political parties, by tagging their national databases with the likely cultural background of each elector, are beginning to discern not just differences in the party preferences of different groups but also differences in social values. The police find that different minority groups specialise in different forms of criminal behaviour. TV ratings agencies are demonstrating that given the choice, different ethnic groups not only watch very different programmes, but favour different genres of programme.
It’s easy to see why all this might matter if your business is aimed at minority audiences. But does all this make any difference to the reach and earnings of organisations which depend for their livelihood on the patronage of mass audiences?
Yes it does.
To begin with, what in the jargon is described as “cultural intelligence” can prevent horrendous mistakes. In the early part of the century, Honda invested heavily in marketing its new compact under the brand “Honda Fitta”. It took some time and many millions to discover why it tested so poorly in northern Europe: in Scandinavia “fitta” is slang for “pussy”. The slogan “small on the outside, big on the inside” didn’t help.
German tourist authorities have recently profited by the flood of tourists from East Asia, not least from China. But they are learning that they need to know more about these new consumers – for example that Japanese hotel guests are likely to prefer single beds; and that Chinese guests tend to avoid the restaurant if the Japanese coach party gets there first – so booking systems that can anticipate clashes may be vital to capturing and keeping that trade.
Marketers’ attitude to race has moved on immeasurably in recent years. A recent visit to Brent Cross revealed the significant efforts many retailers have made to include images of minority groups in the posters and adverts that seek to attract customers to their shops. The will is clearly there to position their brands as diverse and approachable by all minority communities. The only shame is that these efforts are so seldom supported by the detailed evidence of the preferences of different communities and any systematic monitoring of how successful they have been in improving their market share among particular minority groups.