SAN DIEGO, August 27, 2003 (PRIMEZONE) -- A recent analysis conducted by market research leader Claritas Inc. using two of its acclaimed surveys, the Market Audit(r) for financial services and Convergence Audit(tm) for telecommunications, underscored not only the importance of consumer research in evaluating preconceived notions regarding ethnic consumers, but also demonstrated the impact of comparing behavior at the product level in addition to category level analyses. In many instances, category behavior masked key differences across ethnic groups.
Claritas analyzed consumer behavior for deposit products, non-mortgage credit, computer ownership, Internet behavior and television viewership, to name a few. Claritas compared four consumer segments: Non-Ethnic, African American, Asian and Hispanic.
Trends in Non-Mortgage Credit Balances by Ethnic Group
Non-mortgage credit balances were compared across high-income consumers (greater than $50,000); the ethnic segments have been accumulating more debt over the past two years relative to the non-ethnic group. Although the African American market is reported as having the highest outstanding balances, it is the Hispanic market that has shown the most consistent and greatest growth, with outstanding balances up 33% compared to the first half of 2001.
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While an increase in debt may have negative connotations, by conducting further analyses at the product level, a different storyline emerged. Specifically, by comparing the increase in outstanding balances among non-mortgage credit products such as auto loans, credit cards and student loans, Claritas found that student loans accounted for the highest increase of outstanding debt representing a 60 percent increase for Hispanic households over the last two years.
Claritas Vice President Margie Lymperis, who recently presented this study in an American Marketing Association web seminar, commented, "Though (accumulating) debt is generally perceived as a bad thing, once we look further, the numbers show that the debt is rising, in part, because Hispanics are investing in their education and, ultimately, their advancement in society."
Online Banking Usage By Income
Claritas also analyzed how banks distribute their products and services, i.e., ATM, Internet, bank branch. When comparing low-income consumers (less than $25,000) with a checking account, as shown below, Asians were more than two times as likely to use online banking, relative to non-ethnic consumers. In fact, online banking is prevalent with the Asian community across all income breaks, surpassing both the non-ethnic and other ethnic groups.
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Percent of Households with Home Internet Access By Income
Low-income Asian households also skewed high when making relative comparisons of computer ownership and Internet usage. In the chart below, this group has an index of 154, indicating that they are 54 percent more likely to have home Internet access relative to non-ethnic households.
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Conversely, African American households are less likely to subscribe to home Internet access relative to non-ethnic consumers. This holds true across all income breaks. To stimulate home Internet access, some companies have adopted the marketing tactics used with wireless phones by offering prepaid Internet services. Companies like AT&T, Sprint and AOL have teamed with retailers such as Target, Walgreens, CVS/Pharmacy, 7-Eleven and even Western Union to sell installation diskettes for prepaid Internet service.
Pre-paid Wireless Phone Usage by Income
The chart in the link below shows that African Americans have a high proclivity for having prepaid wireless phone service across all income groups. With 100 being average, African Americans have a high index for having a wireless phone relative to the non-ethnic market. "These numbers clearly show that having the ability to pay upfront has wide appeal to the African American segment," Lymperis said. Given that, marketers may indeed boost home Internet access with African Americans through the use of prepaid Internet service.
For chart, click: http://media.primezone.com/cache/2114/file/871.gif
Methodology
The Market Audit surveys over 100,000 households annually regarding consumer financial behavior. Data for this study was developed from 71,993 respondents surveyed between January 2001 and December 2002.
The Convergence Audit surveys over 35,000 households annually regarding a broad base of attitudes and behavior, including: wireline and wireless telephony, cable and satellite services, Internet and utilities. Criteria for inclusion in the study included specification of ethnicity and income as well as respondents who were under age 60 at the time data was collected.
About Claritas
San Diego-based Claritas Inc. is regarded as the leading provider of intelligent marketing information and target marketing services aimed at reducing the cost of customer acquisition and growing customer value. Claritas offers over 60 marketing databases, industry leading consumer segmentation systems, consulting services and software applications for site analysis, advertising sales and customer targeting. Since 1971, Claritas has been the pre-eminent source of accurate, up-to-date information about people, households and businesses within any geographic area in the United States. Claritas is a division of VNU, a world-leading information and media company that includes ACNielsen, Nielsen Media Research, Spectra Marketing Systems, and Scarborough Research, among others. To learn more about Claritas and VNU products and services visit their web sites at www.claritas.com and www.VNU.com.
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