Consumer Portraits

Knowing the wants and needs of a consumer group with the spending potential of $1 trillion is a tricky thing. That’s where Garcia Research Associates Inc. enters the picture with its research on the Hispanic market. Garcia has clients that are global consumer products companies that want to make sure the cost to reach these potential customers is money well spent. Through focus groups, online panels, mall intercepts, interviews and other collection methods, Garcia provides the data client companies need to make the right decision with a product; data that predicts behavior and response by consumers. “They want to know this will work when they take it to the marketplace,” said the firm’s founder, Carlos Garcia. With headquarters in downtown Burbank and an operations center just across the border in Tijuana, Garcia Research has been lifted by the rising tide of consumer companies getting into ethnic marketing to find new customers. The most successful way Garcia Research created to gauge the attitudes of those potential customers was with its online panel, Cada Cabeza. The site has 40,000 registered users that take surveys on consumer goods, and social and political issues, and is the first to cater to a predominantly Spanish-speaking user. The best panels, Carlos Garcia believes, are those that create a sense of community and connection. The design of the panel site goes beyond what would have been done for the general population. There are multiple touch points for the users, including an 800-phone number. Staff will help a new user in setting up an e-mail account. There are links to health, job and educational information, and to Spanish language media. The online effect Eventually most market research is going to be done online, said Enrique Gil, CEO of Ethnic Marketing Group, a Valencia advertising agency that has worked with Garcia Research for more than a decade. “Numerically, you can get responses from thousands of people,” Gil said. “It is a lot more meaningful and is qualitative and quantitative.” While it has been a great success, Cada Cabeza was launched just as the U.S. economy began its nosedive. It was a two-year period of struggle for both Garcia the business owner and Garcia Research the firm. With corporate clients cutting back, there was less work. Just breaking even as had happened in 2009 was seen as a good thing. But Garcia acknowledges he is not alone, that it is a tough, new world for all small businesses that have had to make tough decisions with cost cutting and staffing. As the country emerges from the recession, however, Garcia finds himself questioning his firm’s survival as an independent company. Growth of market When it comes to the Hispanic market, the world has changed in the 20 years since Garcia Research was founded. It used to be that the huge corporations – Procter & Gamble, McDonald’s, Anheuser Busch, and Coca Cola – went after the Hispanic market. Now companies of all sizes are doing it with Spanish language advertising, commercial and websites. Companies ignore the Hispanic market at their own risk. Consumer spending by this segment of the population is expected to reach $1 trillion in the next few years. Between 2005 and 2008, Hispanic consumer spending increased 6.4 percent while that of non-Hispanics went up by 2.9 percent, according to a study by the Latinum Network based on figures from the U.S. Bureau of Labor Statistics. That spending is what Garcia Research gets hired to bring in with its analysis of what the Hispanic market will buy and remain loyal to. “They have been instrumental in guiding our clients to the hot buttons in the market,” Gil said. Garcia also uses its expertise outside the consumer world. Alan Helfman worked with Garcia Research a few years ago when he was with the Adult and Career Education division of the Los Angeles Unified School District. Garcia was hired for a project to develop a business plan for the division. The research involved extensive interviews with both English and Spanish speaking adults and high school students, teachers, administrators and employers. In doing its work, Garcia kept in mind the differences in languages and culture. “There were subtleties that had to be addressed to put the focus groups together,” Helfman said. The many socio-economic strata found in the Hispanic community presents a challenge when putting together the research panels. Online panels are pre-recruited to fit a specific profile with a moderator keeping the conversation moving along. There are differences in the responses from an in-person panel as compared to one done online. With an in-person panel, you can see body language; see a person wince or smile; hear their laughter. Online, however, you tend to pay attention to how articulate the panel members are, how well they write and spell. “It is very mechanical,” Garcia said. Big challenges Online panels are becoming the preferred way for companies because it is cheaper. For Garcia Research that means having to do more panels at say $10,000 a session to make the same amount that a single in-person panel would cost. Revenues, however, have remained stable and Garcia Research comes out of the recession not too much different than a few years ago. Yes, there were layoffs, Garcia said, but he also kept on more employees than he should. While large corporations could easily cut back on its workforce, it was not so easy at a small company where employees were like family. “It’s just numbers to them (larger companies),” Garcia said. “To us, it’s not numbers; it’s people.” Reducing the workforce was not the only challenge Garcia faced in keeping his company going. When the national bank the company had used for many years denied an extended line of credit and instead called in what was owed, that nearly killed the company, Garcia said. Money was borrowed from several sources to keep going. Now, even with companies beginning to spend again, Garcia Research is not done facing difficult times and remaining independent may no longer be an option, Garcia said. There may come a time when the firm will have to merge or somehow team up with another market research company. “We’re waving the white flag,” Garcia said. Garcia Research Associates Inc.FOUNDED: 1990NUmber of Employees 2009: 15NUmber of Employees 2010: 12Revenue in 2009: $3.25 millionRevenue in 2010 (estimate): $3.37 million