Abstract: This paper discusses services provided, target market segmentation and penetration into
Hispanic households by "El Colmadito Internet" and provides a quantitative assessment and perceptual
map of its market potential.
Company Name and General Overview: "El Colmadito Internet" which translates to "The Little Grocery Store on
the Internet" is an independent broker, Internet based marketing and online sales business catering to the
needs of working Hispanic women for purchase of a wide range of non-perishable Goya, La Cena Fine Foods, Iberia
and several Hispanic foods not available at most groceries stores.
Geographic Location and Operations: The company is home based in Elkridge, Maryland with corporate headquarters located at
9137 Washington Blvd, Elkridge Maryland.
Overall business administration,
Web page development, upgrades and required product prices or purchasing updates are performed at the Elkridge,
Maryland location. From there, changes in Web content are performed through Netfirms.com, a commercial Internet
Web Hosting company for a fee of approximately ninety dollars ($90.00) per year.
Website promotion is performed via Scrubtheweb.com,
a service dedicated to analysis of Web page content, optimization and suggested of key words, and promoting of
the company's domain name and associated Web Page on hundreds of search engines on the Internet like Google and
Yahoo using "search robot technology". There is no cost associated with the service - their money is
made through advertisement on their Web page.
Payment for purchases via credit card is performed
through ClickBank.com, an Internet based intermediary who takes care of electronic credit card transactions at
a fee of one dollar ($1.00) per order plus seven percent (7%) of each sale.
Tracking and shipment of orders is also performed from the Elkrigde location. Orders entered are received here
as emails from Clickbank with all the appropriate order and shipment information in it.
Products are stored at a nearby storage facility at a cost of three hundred dollars ($300.00) per year.
Company Objectives: The company's objective is to meet the needs of Hispanic women employed in Managerial /
Professional and Technical Sales and Administration occupations throughout the United States by providing them
access to non perishable food products online which are normally found in small sections on large grocery stores,
some which require "out or the way" trips to specialty food stores and even some which can only be purchased
through families and mailed from their countries of origin all in one convenient location and at a very competitive
price. The products can be shipped through a wide variety of customer options ranging from regular third class
parcel through guaranteed next-day delivery via UPS.
The company wishes to represent and promote a "community
store" look and feel in its bilingual (English and Spanish) Web page, providing nutrition information and
an opportunity for customers to share some of their favorite recipes and comments.
Company Resources: Company assets and resources consist of one self-employed owner, his laptop, a high-speed
Internet connection and five thousand dollars worth of products in stock.
Company's basic values and philosophy
- "Colmadito Internet" is dedicated to the marketing, sales and speedy delivery of high quality non-perishable
groceries to Hispanic women via the Internet.
Corporate vision - The company vision is to provide Hispanic women access to a larger variety of favorite brand
name products and delivering these quickly.
Needs Assessment: According to the U.S. Department of Commerce Bureau of the Census, the Hispanic population
in America is on a steep rise. It is estimated that the population of Hispanics will reach 63 million in 2030 and
88 million by 2050.
A number of 7.4 million Hispanic families live
in 6 million Hispanic households, and on 47% of these according to year 2000 estimates there is one computer. The
great majority of women in these homes continue to fulfill the traditional tasks of grocery shopping and cooking
meals for the family. Fifty seven percent (57%) of women are part of our country's workforce - that's an estimated
9.8 million Hispanic women, mostly in the ages of 18 to 64. The majority of these women outnumber men in Managerial
and Professional Specialty (16% Hispanic Women vs. 11% Hispanic Men) and Technical, Sales, and Administrative Support
(39% Hispanic Women vs. 15% Hispanic Men) jobs. This translates to approximately 5.4 million Hispanic women working
in jobs that provide familiarity in some fashion with computers and the Internet. The majority of Hispanic women
in the workforce earn annual incomes of $30,000.00 or less. According to a report published by Vertis Corporation
examining holiday shopping trends found that the greatest increase in Internet utilization for online shopping
took place in households of annual income of $30,000.00 or less with over 63 percent of these doing more Internet
The majority of Hispanic foods are still hard to find. Small selections of these can be found in some major grocery
stores while many condiments and foods require shopping at hard to find specialty stores and at a very high cost.
Time is a rare commodity for these members of the workforce and professionals as well. Being able to order these
products used in preparation of meals for their families while saving time and money would appeal to many of them.
Most Hispanic households will purchase their non-perishable
foods wherever these are available. In some cases it may take that extra long drive out of the way a few times
a month to get whatever is needed at a very high cost. In many other cases, Hispanics rely on their families who
live abroad to purchase and mail these goods. I have witnessed this in many military communities overseas where
the commissaries stocked Goya and other brand name products but where never able to fully satisfy the customer
needs. Here, as I have observed Hispanics still get what they need through their families via mail no matter at
Overview of competitors: The first segment evaluated was Internet based competition. After numerous searches on
the internet looking for food retailers that catered to the Hispanic population only one worthwhile competitor
was identified, www.mexgrocer.com . This individual company's web page provides an extensive selection of canned
goods, sauces, olives and capers, condiments and spices, candy, and toys but only in types and brand names, which
are specific to consumption by Mexicans.
Another consideration in competition is why would
an individual not purchase from a food manufacturer or distributor. After evaluating the presence of Goya Products,
a leading manufacturer of Hispanic non-perishable foods for the business on the Internet, it became clear that
the company's only portal to cyberspace, www.goya.com only provides information about the company, names of approximately
9 distributors over the United States, Spain, Dominican Republic and Puerto Rico, press releases and recipes. Further
analysis of availability or accessibility of Goya product distributors in the US and abroad showed that none of
these have an Internet presence. La Cena Fine Foods, another major Hispanic non-perishable Hispanic food manufacturer
had no Internet presence at all.
As a result of this analysis, I conclude that the
only competition would be provided by a dwindling number of small specialty retailers who are being driven out
of business by major grocery stores and therefore present little risk to El Colmadito's ability to penetrate the
Hispanic household market. Very few major grocery stores in turn carry a good or wide selection of Hispanic products.
Even where Goya has introduced a dedicated product shelf concept and succeeded in achieving larger sales than it's
competitors, the fact still remains that even if Goya was to place all available products in one single isle it
would still not be able to provide all of the popular foods, and condiments desired by Hispanics - Goya makes only
some of them. In addition, a lot of the can goods they package are already available at stores under other brand
names. Some of these are chick peas, pinto beans, black beans, red beans, rice, spices and sauces. Where Goya has
been able to capitalize at these stores is the fact that the majority of these canned goods happen to be displayed
with Goya's label next to very few hard to get ones like "Sazon" condiment, "Annato" seed and
deserts like guava paste or food coloring products. Because the major grocery store would normally cater to customers
within a small geographic area they would not be able to provide the needed and desired products in sufficient
variety at a profit. Therefore, major grocery stores also present little risk for El Colmadito.
Market Penetration: According to a report recently published by Insight Research Corporation in it's website
www.insight-corp.com, Hispanics and Asians in America are more likely to be online than Caucasians and African-Americans.
Statistics provided recently for year 2000 by the Census bureau have caught corporate America off guard. The reality
of our country's demographic make up is that Hispanics have surpassed the African-American population as the largest
minority group in America. This does not include the population of Puerto Rico which consists of an additional
3.8 million Hispanics and who display an equal fast growing pace in Internet presence and utilization.
According to an article published by May Wong in the Associated Press several computer vendors and Internet Service
Providers (ISPs) have rallied to meet the increasing demands of Hispanic customers. Gateway drew 20,000 customers
to a small store in Stockton, CA by inviting boxing champion Oscar de la Hoya.
The "Digital World and the U.S. Hispanic II" study conducted by Cheskin Research states that the rate
of growth of Hispanic household computer penetration over the last two years is 80 percent. This is a substantial
increase over the last few years and rates higher than even the over all market which was only 21 percent. The
report goes on to tell us that that Hispanics still find that shopping is a main reason for using the Internet
and 60% use the Internet for reasons other than email. The big challenge here is how to reach the potential customer.
This must be a very diversified approach requiring a lot of legwork.
Here are some ideas:
A good way to reach many Hispanics
in high-density areas is through the radio particularly in stations that broadcast Hispanic music and sport events.
Advertising a web page over radio particularly one with a catchy name will yield good results.
Hispanics, according to Cheskin Research favor Yahoo as their top ISP. Popup adds on Yahoo should provide a substantial
return on investment dollar with 68% of Hispanics preference.
Population of Yahoo, Google and other search engines with links to my Web page will also yield good results.
Finally, spam mail using subjects in Spanish would help get attention.
Psychographic Profile of the Consumer
Population: According to a report published by Cheskin in September
1998, these are key psychographic characteristics of the Hispanic population.
a. Cultural Values. Hispanics enjoy spending time with their families and loved ones. The introduction of the computer
and it's ability to help them organize is perceived as a way to help them spend time with their families.
b. Social Necessity. Hispanics feel that an individual must learn how to use computers in order to get ahead in
society and at work.
c. Social Connectivity. Hispanics feel that introduction of computers into their homes helps them stay busier communicating
with others on the Internet and even with families in their countries of origin.
Frequency and Sales Estimate: According to The Wall Street Journal, Tuesday July 9, 2002 ed., "Hispanic Food Firm
Goya Scores With All-in-One-Aisle Approach", there are two very important purchasing characteristics of Latinos.
First, Hispanics are very loyal to their food brands.
Goya, and the other brands offered in the Web site are and have been the most popular brands in the Hispanic food
market for many years.
Second, Hispanics unlike other ethnic groups shop on the average four times per month. From this figure, I estimate
receiving orders from each customer at a rate of at least twice per month.
I believe the company can reach more, but if it was only able to reach a conservative 1% percent of the 48% of
Hispanic households who have computers, roughly 28,200 homes as the target customer at an average purchase of fifty
dollars ($50.00) per month the volume and profit could be substantial.
The numbers therefore indicate 28,200 x $50 = $1,410,000 a month in sales. This of course does not take into account
the cost of replenishing stock, my time, gas and oil shipping the orders, packaging and a small fee to Clickbank
for processing the electronic transaction but at least in principle, it sounds like as could work as a small home
based e-Commerce business.
Market Segment: Based on the above demographics, I conclude that my target segment is 5.4 million Hispanic women
who live in 48% of Hispanic households.
Kotler, Phillip. Marketing Management
Millennium Edition (10th ed.). Boston, MA: Pearson Custom Publishing, 2002
U.S. Department of Commerce Bureau of the Census, http://www.census.gov/pubinfo/www/hotlinks.html
The Wall Street Journal Online, Tuesday July 9, 2002 ed., www.wsj.com
The Digital World of the U.S. Hispanic, January 2001, Cheskin Research, www.cheskin.com
US Hispanic Use of Telecom Services 2002-2007, Insight Research Corporation, www.insight-corp.com/ushispanic.html
Hispanics Increase Their Purchases of Computers: Why Now?, Cheskin Research Corporation, www.cheskin.com
In saturated market, PC makers begin to woo Hispanics, May Wong, Associated Press, June 2001 North County Times
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