Marketing Across Ethnic Boundaries

We can define an ethnic group as a social group that has a common cultural tradition, common history, and common sense of identity and which exists as a subgroup in a larger society. By implication, the members of an ethnic group differ with regard to certain cultural characteristics from other members of their broader society. The ethnic group may have its own language, religion, and other distinctive cultural customs.

Extremely important to the members of an ethnic group is their (positive) feeling of identity as a traditionally distinct social group. The term is usually, but not always, applied to minority groups. Ethnic groups should not be confused with, or taken as synonymous with, racial groups, although it is possible for an ethnic group to be a racial group as well (for example, African Americans). The concept of ethnicity is a complex process with multiple stages and multiple outcomes. It begins with contact, when newcomer ethnic groups arrive but try to maintain their old culture and identity - perhaps as a means of survival, or a means of living their lives in a familiar way because that is what they are comfortable with. They may seek out areas to live and work where they can develop a network of friends with the same value systems.

Through acculturation ethnic identities emerge amid greater exposure to the larger society and culture. Adaptation sees the group trying to maintain its ethnic identity but slowly giving way to the dominant culture. The decreasing number of foreign-born members of the group are accommodated and gradually integrated, finally being assimilated into "mainstream" society and culture. Ethnically based cultural traditions manifest in daily life, but especially on significant occasions such as weddings, births, religious festivals, and deaths. Many ethnic groups are financially disadvantaged and/or suffer other forms of prejudice.

Categorizing individuals in societies can be achieved in a number of ways ranging from a subjective approach (where individuals are asked to decide their own groupings) to more objective approaches based on factors such as lifestyle, income, etc. The aim of the traditional marketing approach is to model the structure of different classes or groups because these are ways of determining (predicting) buyer behavior. In practice, however, marketing place models are more complex and, for some businesses and services, social class or income alone may be a more important discriminator than ethnicity. For others, such as low-interest loans for example, ethnic grouping may be more important, where the lender benefits from shared equity growth or insurance premium cover.