HP opens door to Hispanic market

May 01, 2005 9:30 PM  By

According to the U.S. Small Business Administration, the number of small and midsize Hispanic-owned U.S. businesses is now at about 2 million and expected to grow to 8 million by 2010. Palo Alto, CA-based computer manufacturer/marketer Hewlett-Packard started making plans to serve the Hispanic market two years ago, stepping up its efforts within the past year.

In spring 2004, the $79.91 billion Hewlett-Packard established a division devoted to U.S. Hispanic- and female-owned small and midsize businesses; Denise Marcilio was named general manager. “As recently as last winter there was virtually no U.S. marketing data available on Hispanic-owned businesses,” Marcilio says, “so we began conducting telephone surveys.”

Hewlett-Packard hired Ogden, UT-based MarketStar, a marketing firm that serves primarily the technology and electronics industries, to identify Hispanic business owners. Focusing on states with large Hispanic populations — California, Florida, New York, and Texas — MarketStar began making calls in fall 2004.

The 20-question telephone surveys, set up to run about 20 minutes, gathered information from these business owners on their daily operations, their interest in and willingness to spend on technology, and their customers’ general buying habits, says Marcilio. “We did not identify ourselves as calling from HP,” she says, because MarketStar felt that anonymity would promote more honesty.

Snail mail, por favor

Most of the 350 Hispanic owners of small and midsize businesses surveyed for Hewlett-Packard indicated that they preferred to be contacted through the mail. This is likely a cultural holdover, Marcilio says, as the majority of communications in Latin America are via the mail, and most people who live in Latin America are less Web savvy than their North American counterparts.

To that end, Hewlett-Packard is working to make its Hispanic prospects more comfortable online. “Our current Website includes Spanish-language fields that ask Spanish-speaking individuals where they are located and what items they want to buy in hopes of growing the Hispanic market on the Web,” Marcilio says.

But because more than 90% of the Hispanic business owners polled were bilingual, “our overall strategy is not focused on doing everything in Spanish,” Marcilio continues. “We understand that there are many other challenges for a Hispanic business owner that go beyond the potential language barrier: dealing with a different cultural environment, concerns over economic stability not only for themselves but future generations, and structuring business to accommodate both Hispanic and non-Hispanic customers.”

Hewlett-Packard in January began mailing English- and Spanish-language catalogs to more than 10,000 Hispanic business owners. The catalogs were distributed based on company size, geography, and projected IT expenses.

“We’re not concerned if these business owners happen to receive both versions,” says Marcilio. “We prefer to be redundant.” Marcilio’s team conducted briefings as to the content and look and feel of the Spanish-language catalogs, but the actual translations and execution was done by an outside agency.

Additional data from the Small Business Administration show that Hispanic-owned and -operated businesses in the U.S. are more prevalent in the fields of retail, healthcare, construction, and real estate. And most of these small and midsize businesses are in the Southeast; larger Hispanic-owned businesses are most heavily concentrated in California.

Marcilio’s staff of bilingual reps is broken up into three teams: The 10-member outsource team is responsible for driving business to Hewlett-Packard’s companies; the five-member mutual team functions as the organization’s marketing arm; and the on-site agency consists of two representatives based in California, two in Colorado, and four based in Texas.

Hewlett-Packard would not disclose the costs of its efforts to reach Hispanic business owners and says that no sales figures will be available until this fall. But the company has high hopes for the division. Currently the Hispanic market accounts for only about 3% of the company’s $29.36 billion domestic business, but it expects that percentage to rise to more than 10% by 2010.

“This could potentially become a $15-billion-a-year market, and our goal is to be its number one IT vendor of choice,” Marcilio says. “Based on our research, we are confident that the market will keep growing.”