Demographics: Ethnic Britain

relevance to them.

This view is shared by Patricia Macaulay, head of black and minority
ethnic (BME) communications at the COI. Given the government's
obligation to communicate to the whole population, the COI has led the
way in targeting ethnic minorities, with campaigns on issues such as
forced marriage. But that enthusiasm has yet to be matched by brands.
'There is a lot of talk in the private sector about the BME population,
and people are starting to discuss the importance of it, but not a lot
is actually being done,' says Macaulay.

In the 2001 census, Britain's black and minority ethnic population stood
at 4.6m, or 7.9% of the total population. The term refers to all
non-white communities, the biggest being Indian, Pakistani, black
Caribbean and black African.

There has been an attitude that this market is too small to take
seriously. But this is starting to change as the significance of the BME
population becomes apparent; the working-age population of ethnic
minorities is set to grow 20 times faster than that of the white
population by 2010, and it is a younger population concentrated in urban
areas, with nearly half living in London.

Economically, BME consumers are a growing force. In 2002, the IPA
estimated the population's disposable income to be £32bn and
recent research has underlined the growing importance of ethnic minority
markets to some brands and sectors. According to Starfish Research,
which carried out a detailed study last year, BME consumers are three
times more likely to own a BMW than the population in general and twice
as likely to own a Mercedes-Benz. They are also more likely to own
laptops and iPods, use the internet and have digital TV.

One reason it has taken so long for brands to recognise the BME
influence is a lack of data on their media and brand preferences. 'The
hard-to-reach groups are also hard to research,' admits Mark
Greenstreet, managing director at Carat Insight. 'It is likely that many
groups are under-represented in mainstream research. It is hard to know
whether you're picking them up or not.'

That the management of most organisations is predominantly white is
problematic. As ethnicity tends to be more significant for minority
groups than it is for the majority, it is simply less apparent to white
marketers that appealing to BMEs may be an important issue. There is
also an anxiety about the potential backlash if the wrong approach is
taken. 'It is a leap into the unknown,' says Parveen Bdesha, director of
Starfish Research. 'Brands don't want to be accused of racial
stereotyping.'

Yet there are signs that this hesitancy is beginning to subside.
Financial services companies have been quick to offer specialist
services, such as money-transfer products to allow people to send cash
to their families overseas, or banking products that comply with Sharia
law. Telecoms brands, too, have run campaigns targeting minority groups.
For example, last year Orange targeted high-value Asian customers with a
package for customers of B4U Movies, a Bollywood film channel; the
package included free Bollywood ringtones.

There is a definite opportunity for brands and sectors that help BME
customers foster and maintain links with overseas markets. One reason
technology take-up is high among these groups is that it offers a way to
communicate with relatives - Asian women, for example, are particularly
keen users of Skype. Lloyds TSB has sought to tap into this by
developing a product that helps UK citizens take out mortgages in
India.

The US, where marketing specifically to Hispanic and black consumers is
well-established, is the obvious comparison. While the US has a far
greater ethnic market - both in terms of population and spending power -
many commentators believe Britain will follow a similar line as
companies look for ways to grow. 'In America, it is not just the buying
power of ethnic minorities that forced the hand of brands,' says Terhas
Asefaw Berhe, director of Ethnic Communications. 'Companies need new
markets. In saturated sectors, they are looking for growth areas in
ethnic communities.'

One company keen to take advantage of this is data-management firm
Experian. It recently launched a tool called Ethnic Origins, developed
in conjunction with Richard Webber, visiting professor at University
College London. The tool can process consumer databases and work out
with reasonable accuracy the ethnic origin of each individual, based on
their name. The idea is to allow organisations to segment consumers by
ethnic community and target them with relevant offers.

So far the tool has been taken up most enthusiastically by the public
sector. The police, for example, has used it to identify Hindu and
Muslim consumers in Surrey and target them with a mailing campaign about
racism. However, there is private-sector interest too; one of the major
supermarket chains is using it to form a better idea about its
customers' backgrounds. 'Once the government is seen to be using it,
commercial organisations will become less nervous about it,' says
Webber.

The first step for brands interested in targeting the BME community is
to know the communities they want to target. There is a tendency to see
the BME population as a single group, but it is more a patchwork of
different communities, each with its own needs. Deciding to target
'Asian' consumers, for example, is not enough, says Dal Singh, marketing
manager at ethnic communications agency The Marketing Effect; more
in-depth questions must be asked. 'Do you want to speak to the Indian,
Pakistani or Bangladeshi communities? What are the cultural differences
between each one? Do you know what media each community watches, reads
and listens to? What are key cultural dates and events for each group?
What are the spoken and written languages in each community? Do you
translate?'

There are therefore very different ways of reaching the various
communities. The Asian population, for example, has established media
catering to it and is more likely to watch ethnic TV stations or listen
to ethnic radio than black consumers.

There may well also be differences within communities, especially
between different age groups. First-generation immigrants often have
different attitudes to second- and third-generation. That said, the idea
that ethnic minority consumers born and raised in the UK join the
mainstream population - and thus consume mainstream brands and media -
is a myth, according to Dr Marie-Claude Gervais, research director at
ethnic research specialist Ethnos, who adds that those targeting the
ethnic population must appreciate the fluid nature of interaction
between ethnic consumers and the mainstream.

Gervais argues that someone may appear assimilated into mainstream
culture in their work environment, but in their private lives (what they
eat, for example) may remain rooted in their community. 'Integration is
not a homogeneous process. A person could be separated from the
mainstream in some areas of their life, and totally integrated in
others. It is about understanding the complexities of the ways people
relate both to their own communities and other communities.'

Total assimilation is something most ethnic consumers actively resist.
The Muslim population is a good example, as the fall-out from 11
September 2001 has led to renewed tensions between the Muslim and white
communities, making British Muslims more aware of their Muslim
identity.

Gervais argues that there is a major opportunity for brands to target
ethnic consumers determined not to lose touch with their roots. She
points to research that Ethnos conducted for BSkyB, which found that one
of the groups most eager to subscribe to Asian TV stations was young
parents, born and raised in the UK. Their goal was to ensure their
children retained links to their cultural heritage, precisely because
they felt unable to provide this themselves. As communities become more
established in the UK, this band of UK-born, educated, roots-oriented
consumer will grow in number.

A common complaint is that marketers seeking to be more inclusive do
little more than put a few ethnic faces in their ads. True inclusivity
is about understanding the different needs of BME markets, how they
overlap with and diverge from the mainstream. Targeting minorities need
not be about separate products, campaigns and media; it can be about
appreciating how a campaign will resonate in different communities and
can be tweaked to serve them better. 'Although every campaign is
different, relevance is key,' says Rakhee Vithlani, head of
multicultural communications at Weber Shandwick Worldwide. 'Sometimes it
isn't as much about treating groups separately, as it is adapting
communications to reflect the varied audience.'

The consensus is that marketers need to act now. BME consumers tend to
be more brand-loyal than the white population so there is a huge
first-mover advantage for brands interested in this population. 'If they
do something in three years' time, they will have missed the boat,' adds
Vithlani. 'Brands that get in now will reap the rewards now and in the
future.'

CASE STUDY - BME BRITAIN

- Population

The BME population is concentrated in urban areas, with about 45% living
in London. There are also large Indian groups in Leicester and a sizable
Pakistani community in Bradford. BME groups are growing more quickly
than the white population and are younger, while Asian groups often live
in bigger families. Unemployment rates tend to be higher among ethnic
minorities, though many groups, such as Pakistanis, have higher rates of
self-employment than the mainstream.

- Media choice

Several BME groups use the web more than average, and digital TV take-up
is higher. There is a strong ethnic media market catering to the South
Asian community, which is more likely to engage with ethnic TV or radio
than black groups. This applies beyond older groups - radio station
Asian Sound, for example, targets young Asians.

- Brand choice

Ethnic minority consumers have significant disposable incomes and in
certain sectors tend to spend more per head than the national average.
They tend to be highly label-conscious and more brand-loyal. In several
categories their brand of choice is different to that of the white
population.