Polycultural base for growth

By William L. Carney, Professor Instituto De Empresa, Madrid and Visiting Professor at Mannaz

The multicultural reality of the European Market

Increasing friction
Immigrant is a loaded word in most of Europe these days, both politically and in a broader context, socially. In most European countries, there has been increasing friction between existing residents and the new arrivals documented almost daily in most newspapers. On the one side are accusations of diversion of scarce national resources and privileged treatment supposedly given to immigrants (to the detriment of the existing population). On the other side are claims of social exclusion, racism and lack of access to the economic and political machinery of the country in question. The issue has polarized the citizens of many European countries, and is increasingly targeted by extreme politicians at both ends of the political spectrum for their own policy ends.

30 million new immigrants
There is another side of this story which should be mentioned. The press and various other governmental bodies have proclaimed that Europe may need to take in up to 30 million new immigrants (current European population is about 450 million) to be able to generate retirement income for a rapidly ageing baby boomer generation. I cannot justify or reject the accuracy of these claims, but it is clear that the influx of a significant number of new entrants is an economic necessity. The newly admitted members to the European Union will most likely remove some of the pressure, but for how long will they continue to provide lower cost labour as they truly become part of Europe and their cost bases rise as a consequence?

Illegal immigration
A review of the Euromonitor 2003 European country lifestyle reports and statistics shows a striking picture. In total, 7% of the French population are ‘official’ immigrants, a third of whom are from Africa , and the high number of illegal immigrants puts the real percentage much higher. In Germany , official immigrants account for 9% of the population, the largest group being of Turkish origin. The German data in Euromonitor reports surprisingly few Africans. In the Netherlands , Muslims alone now constitute 4% of the total population, ten times more than in 1971. Illegal immigration is a major political and social issue at the time of writing, and has divided the Dutch population. In the United Kingdom it is estimated that 1 person in 13 is from an ethnic minority group, and ethnic minorities represent 7.9% of the total population. In Spain between 1990 and 2000, the Spanish population actually declined by 1.27 per cent, while over the same period the Moroccan population increased by 1024% and that of the Dominican Republic population by 1230% ! 

The numbers cited above are just some of the statistics concerning legal immigrants, in other words legal residents who are not citizens of the country. If one takes into consideration second and third generation ‘ex-immigrants’, the numbers of this market grow significantly. Successful European sportsmen such as Zidane, Kluivert, Makalele and others have increased the visibility of this particular group by proxy.

The impact
There is a clear pattern emerging in Europe at the present time, particularly as birth rates amongst the ethnic minorities also tend to be higher than other population segments. The ethnic minority population is not only growing, in some cases it is the fastest growing segment of the country’s population as a whole. There are more consumers, more wage earners and in some cases, there is  more social mobility. For European marketers, this is surely an interesting group of consumers to tap into.

This multicultural reality at ground level is however, often not viewed in positive terms. The Globe and Mail newspaper of Montreal, Canada, published an article on August 20, 2004 which mentioned that the vast majority of immigrants in Canada were between 19 and 49 years old and were the most vibrant and productive elements of Canadian society. The article lauded the ‘immigrant’ contribution in no uncertain terms. What a contrast to what one reads in the European papers these days and witnesses on the social and political front. I have a two inch file of solely Swiss articles of abuse against immigrants in Switzerland . Think of the impact of right-wing demagogues such as Le Pen in France , Blocher in Switzerland or Fortuyn in the Netherlands. In some areas of Europe, the extreme right, campaigning on an anti-immigrant platform, has secured over 15% of the national vote.

Standing on a gold mine, but looking for oil
What never ceases to amaze me on the commercial front, is how ineffective most European companies have been in communicating and establishing relationships with this particular group of consumers. The traditional European model seems to be one of integration and assimilation i.e. ‘let’s try to mould Rachid into a Sven or Youssuf into a Jean-Jacques.’  I think this approach is misguided and can be perceived by some as downright insulting.  Moreover, what I increasingly see in the streets of Europe is young Jaap or Torben trying to look and sound like the rapper 50 Cent or Eminem. The term ‘wigger’ is a common one all over Europe ’s urban centres.

An example of this  benign neglect lies in the millions of Euros which are remitted each month to countries such as Morocco , Tunisia , Turkey , Senegal and others by immigrant workers maintaining their families back home. The mainstream European banks have dealt clumsily with this market. Where is the European competitor to Western Union  for example? Why did it take two newcomers to establish The Islamic Bank of Great Britain? Didn’t the major European banks spot this opportunity, or didn’t they care about the market?

Many companies seem to have some difficulties in plugging into this new demographic development. When I ask managers why they still tow the old party line of assimilation, the reason often given is that there is just too much fragmentation within the various ethnic minorities – religion, language, nationality, culture etc., and that such tailoring and subsequent targeting is not profitable. Perhaps another unspoken reason is the lack of minority representation within the European corporate establishment. How many marketing executives really know what Rachid’s family eats for breakfast, or Cissoko’s for lunch? What are the issues that lower income kids (unlike their own) are dealing with on a daily basis?

I think European marketeers are standing on a gold mine, but are looking for oil. Take a look at how new ‘fusion’ culinary habits have grown the food market in the United Kingdom .  Cross-cultural infusions into popular music have helped the music industry weather its own particularly stormy waters. L’Oreal and others are now developing products for and exploiting differences in skin and hair textures. Think of what hip-hop did for Courvoisier or Burberry in terms of recent sales increases. Grand Marnier has linked up with the group Outkast.

The urban effect
One of my marketing professors years ago, an ex-Nestlé man, once told me to focus on the similarities and not just the differences when scanning consumers. And there are things that many of these ‘immigrant’ consumers do have in common. Most are urban residents. Many live in densely populated areas. Many occupy the lower end of the economic ladder. Many perceive themselves as excluded from the mainstream, and some are overtly discriminated against. They are highly aspirational and generally speaking hard working.

At home they may be Muslim or Christian or Nigerian or Turkish – but the moment they step out into the streets of London or Paris or Amsterdam there is a common reality confronting them. And that common reality is increasingly forging a common identity, often currently defined as ‘URBAN’, which is multicultural, multiethnic and wary of the mainstream. Like it or not, for the moment this emergent culture is increasingly derived and adapted from African-American street culture. Look at the clothing, the language and listen to the music.

Is it that the Europe of today and tomorrow is being crafted in the streets rather than in Brussels?  Maybe there really is gold in the streets of Europe.

How companies can benefit
The future of the European consumer is going to be increasingly multi-ethnic, multi-cultural and multi-lingual. And European companies need to adapt to this reality. There is therefore a need to improve communication amongst and towards the various segments of the societies. There is a need to build positive images and provide appropriate role models for young people as they grow into this new identity, as yet undefined. There is a need to develop specific products and services for this growing market. There is a need for companies to embrace the wealth that diversity can create.

Companies need to take a look at the composition of their workforces, particularly in the executive suites. Minorities do not figure prominently in most management development and high potential human resource initiatives, and they are a rare breed in the boardroom.

Companies need to realise that there is wealth in diversity, not just risk. A Swiss butcher hired an unemployed immigrant from Kosovo to work for him. The Kosovar noticed that the butcher was throwing away cuts of meat which are used to make sausages in his native Kosovo. Drawing this to the butcher’s attention, the two began making sausages for the growing Kosovar community and have created a flourishing business opportunity.

Companies increasingly need to reach out to these communities in a coordinated and coherent fashion, in much the same way as they have done to their ‘traditional’  customers. This means making outreach efforts to understand and create bridges to these communities.

One could say that the challenges posed by polycultural marketing, in a domestic sense, are to some extent a microcosm of the international marketing issues that large multinationals have had to deal with on a daily basis. As the world shrinks and globalisation opens the door to new opportunities and risks, medium and small companies are now facing similar challenges which they must master.

Perhaps understanding and embracing domestic polycultural marketing can also assist in the international arena, and lead to growth and expansion.

About the author
Professor William Carney is an internationally renowned specialist in international marketing and customer orientation. He is professor at the Instituto De Empresa in Madrid, visiting professor at Mannaz, and CEO, Laughing Bear Productions, Nyon Switzerland.

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