Polycultural America Quick Facts What’s Changing Pillars of Polyculturalism Challenges & Opportunities Marketplace Manifestations Now What? Brands & Marketing Quotes of Note Other Resources Download in One

(CLICK FOR DEFINITION) Polycultural America Quick Facts An assortment of facts and figures providing a quick view of polycultural America POLYCULTURALISM (CLICK FOR DEFINITION) 61% of Americans agree: some of my lifestyle choices have been influenced by my interactions with people of other races or ethnicities 59% of Americans agree: I’m always looking for different cultural experiences and influences that will broaden my horizons 31% of Americans (and 37% of Millennial Americans) strongly affiliate or identify with a cultural community outside of their own race or ethnicity Despite the recession, ethnic buying power has risen to over $3 trillion and ethnic needs and influences are permeating American culture (Selig Center for Economic Growth) The under-18 population is slated to be majority-minority by 2018 and the under-30 population by 2027. (Brookings Institute Analysis of U.S. Census Bureau projections) Between 2000 and 2010, minority populations grew in every region, especially in the South and along the West coast. (U.S. Census Bureau)

Multiculturalism vs. Polyculturalism WHAT IS IT? Polyculturalism (noun): when diversity reaches a tipping point and becomes an inescapable part of the everyday fabric of life and of individual’s identity. BACK Quick Facts An assortment of facts and figures providing a quick view of polycultural America Multiculturalism vs. Polyculturalism At the individual level: Synonymous with “ethnic,” even among those with a background in only one race or ethnicity At the societal level: Not ethnically homogenous At the individual level: Refers to being the product (in terms of attitudes, values and lifestyle, not genetically) of many different cultural influences At the societal level: Diversity has reached a point where it has become an inescapable part of the everyday fabric of daily life

DIVERSITY REACHES A TIPPING POINT SOCIAL ISSUES ARE MARKETING ISSUES DEMOGRAPHIC SHIFTS What’s Changing Shifting dynamics that businesses and brands must understand about polycultural America to reach today’s and tomorrow’s consumer

DIVERSITY REACHES A TIPPING POINT: Some U. S DIVERSITY REACHES A TIPPING POINT: Some U.S. states and cities have reached minority-majority status already, but more significant is the qualitative change that accompanies this evolution. The influence of ethnic consumers and their cultures is permeating all aspects of life and the marketplace, restructuring the context in which people are working, living and consuming. The business implication is that diversity in America is becoming a primary driver of consumer expectations and needs. BACK What’s Changing Shifting dynamics that businesses and brands must understand about polycultural America to reach today’s and tomorrow’s consumer 81% 71% 61% Agree: its cultural diversity is one of America's major sources of strength Agree: my life has been made better by the things I've learned from people whose race or ethnicity differs from my own Agree: some of my lifestyle choices have been influenced by my interactions with people of other races/ethnicities

SOCIAL ISSUES ARE MARKETING ISSUES: Issues of race in America remain on the social agenda, confronted and debated, yet unresolved. This tension (one that can easily escalate into social unrest) affects the way consumers approach the marketplace, shaping consumer attitudes and behaviors. Consumers are making purchase decisions considering the values brands stand for and how they are communicating them. BACK What’s Changing Shifting dynamics that businesses and brands must understand about polycultural America to reach today’s and tomorrow’s consumer 71% Agree: because businesses are too concerned with offending customers, they fail to take a firm stand on controversial issues 81% Agree: I appreciate it when companies make it clear what values they stand for 74% Agree: I am more likely to buy a brand if I feel it is contributing to make the world a better place 64% Agree: I am more likely to purchase brands that push for change on issues I care about

50.4% of babies born in 2014 were non-white DEMOGRAPHIC SHIFTS: The polycultural transformation underway in America is driven largely by demographic sea changes. As Millennials—the most diverse generation in American history—moves into adulthood and parenthood, they are quite literally changing the face of the average American consumer and household. BACK What’s Changing Shifting dynamics that businesses and brands must understand about polycultural America to reach today’s and tomorrow’s consumer 86% of first-time moms are Millennial 43% of Millennials are non-white 9.5% of U.S. marriages are interracial or interethnic 50.4% of babies born in 2014 were non-white Sources: National Vital Statistics Reports; Pew Research Center; U.S. Census Bureau

Cultural Orientation Model Cultural Intelligence PILLARS OF POLYCULTURALISM: There are four critical concepts that can help marketers get a deeper understanding of polyculturalism and how it can be acted upon. ce and where it is headed. Polyculturalism Cultural Orientation Model Cultural Intelligence Color Bravery The Opportunity Gap Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America

Pillars of Polyculturalism CULTURAL ORIENTATION MODEL: One powerful lens with which marketers can better understand the polycultural transformation occurring in the U.S. today is a cultural orientation model. The framework decomposes cultural orientation into two independent variables: Cultural Attachment and Cultural Openness. However, neither of these on its own is sufficient to describe fully the evolving outlook of consumers in a landscape of rapidly changing ethnic diversity. Together, Cultural Attachment and Cultural Openness define a set of discrete cultural-orientation mindsets: BACK Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America CLICK TO EXPAND

CULTURAL POSITIONING SYSTEM BACK CULTURALLY BLENDED (High Openness & Low Attachment) POLYCULTURAL High Attachment) ACULTURAL (Low Openness & Do not see race or ethnicity as an important part of their personal identity. MONOCULTURAL Place a great deal of emphasis on their race or ethnicity, viewing it as a defining aspect of their identities to the exclusion of other cultural influences. MORE CULTURALLY OPEN MORE CULTURALLY ATTACHED LESS CULTURALLY OPEN LESS CULTURALLY ATTACHED Tend to be strongly interested in culture but do not feel personally defined by their own race or ethnicity. Place high value on their own culture, but are equally open to, and interested in, other cultures. CULTURAL POSITIONING SYSTEM Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America

Pillars of Polyculturalism CULTURAL INTELLIGENCE: Cultural Intelligence is the ability to read the world without feeling threatened in the presence of someone who is different, either because of race, socio-economic status, appearance, personal abilities or sexual orientation. Superior cultural intelligence takes it up a notch with the ability to relate to those who are different, engage in dialogue, work together or develop personal relationships. The development of cultural intelligence is the result of two processes: parental upbringing and home exposure to polyculturalism, as well as the environment kids are living in (school, community and society as a whole). BACK Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America Polycultural* parenting on the rise: Diverse Environment Agree: I believe the students at my school are racially diverse 61% Agree: I believe my social network (friends on Facebook and other similar sites) is racially diverse 59% *Percentage of the population who fall under Polycultural using the Cultural Positioning System Source: 2014 U.S. TRU Youth MONITOR

Pillars of Polyculturalism COLOR BRAVERY: Originally introduced by financial executive Mellody Hobson in a recent TED Talk, color bravery is part of an effective total market strategy and means being realistic about race issues and addressing them directly. The majority of U.S. consumers—and sizeable majorities of ethnic minority consumers—agree that because businesses are too concerned about offending the general population, they fail to take a stand on issues that matter to minorities. And yet consumers are ready to support those brands that advocate for issues they care about. BACK Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America

Pillars of Polyculturalism OPPORTUNITY GAP: The opportunity gap—a measure of the disparities among different segments based on lifetime individual opportunities for wellbeing, not just outcomes—points to the unmet needs of people and an opportunity for companies and brands to connect with them in meaningful and useful ways as consumers. BACK Asian American Non-Hispanic White Hispanic African American 23% 27% 44% 47% Pillars of Polyculturalism The foundational components necessary to develop a comprehensive understanding of polycultural America The Opportunity Gap Index (OGI) measures the opportunity provided to children based on the family they are born into. It is built on U.S. Yankelovich MONITOR data for parents who are not employed fulltime; have a HH income of under $35K OR whose completed studies are high school or less; AND do not have a credit card OR do not have a car.

TOTAL MARKET STRATEGY CHALLENGES OPPORTUNITIES A big transformation is taking place in the U.S.: as individuals and society change, marketing needs to evolve as well. Corporate leaders are exploring new approaches to reaching the polycultural market. Many companies are deploying a total market strategy—one that poses challenges, but offers great opportunities for those who do it well. TOTAL MARKET STRATEGY (CLICK FOR DEFINITION) Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America CHALLENGES OPPORTUNITIES Need to do More (Not Less) Unparalleled Growth Message Dilution Marketing Efficiencies Risk of Backlash Increased Brand Equity

Challenges & Opportunities DEFINITION: TOTAL MARKET STRATEGY “A marketing approach followed by corporations with their trusted internal and external partners which proactively integrates diverse segment considerations. This is done from inception, through the entire strategic process and execution, with the goal of enhancing value and growth effectiveness. In marketing communications this could lead to either one fully integrated cross-cultural approach, individual segment approaches, or both in many cases, but always aligned under one overarching strategy.” Addressing Total Market Research Initiative, Clients & Agencies Round Tables Report, AHAA, 2014 BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America

Challenges & Opportunities CHALLENGE: NEED TO DO MORE (NOT LESS): One of the biggest mistakes in the implementation of a total market strategy is reducing resources allocated to ethnic marketing. Going with a total market approach demands exactly the opposite—making ethnic marketing a priority, investing in it, and incorporating an ethnic perspective into the big, important decisions. A total market strategy requires three key elements: BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America AMBITION “If you are not pushing your brand, no one will do it for you.” —Wendy Clark, President, Sparkling Brands Coca-Cola NA (ANA 2014) 1 INTEGRATION COLLABORATION & TRUST “Total Toyota—comprising five agencies—unites the automaker's multicultural marketing initiatives under one umbrella.” (AdAge) 2 “You have to become an evangelist. … You still have to justify the business case for it. You have a new CMO, you start all over again.” —Priscila Aviles Jamison, senior director, U.S. marketing creative for McDonald’s (AdAge) 3 COMMITMENT

Challenges & Opportunities CHALLENGE: MESSAGE DILUTION One size doesn’t fit polycultural America. Stay away from approaches that showcase diversity but might not connect with any consumer group, as well as mere translations to reach immigrant groups. BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America “Anyone who's seen a United Colors of Benetton ad understands how multicultural advertising can miss the mark. When you unroll a campaign that attempts to reach all demographics at once, you run a hefty risk of not appealing to anyone. On the other hand, niche ads that are highly segmented and in-language often suffer from a generic treatment that doesn't resonate with the target audience because the creative process stopped immediately after translation.” —Yuriy Boykiv, Co-founder and CEO, Gravity Media (Inc.com)

Challenges & Opportunities CHALLENGE: RISK OF BACKLASH When it comes to diversity issues, a fear of backlash can cause brands’ efforts to come up short—a failing consumers take notice of. Marketers often underestimate how much people care about the social issues affecting them and their community. BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America 70% of Millennials agree: because businesses are too concerned about offending the general population, they fail to take a firm stand on issues that are important to minorities “You have to embrace a trailblazer mentality. … Fear is a crutch.” —Sakia Sorrosa, VP, Marketing Innovation & Growth Platforms, National Basketball Association “NBA Inspires and Connects with the Total Market,” ANA Conference 2014

Challenges & Opportunities OPPORTUNITY: UNPARALLELED GROWTH Corporate leaders in the U.S. are recognizing how much ethnic consumer groups drive growth, especially those whose target market skews younger, or that operate in categories such as food and beverage, health and beauty, retail, automotive, and others. Many of these companies are utilizing a total market approach driven by ethnic consumer insights that leads to demonstrable business growth. BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America (Selig Center for Economic Growth)

Challenges & Opportunities OPPORTUNITY: MARKETING EFFICIENCIES U.S. corporations are reporting on the marketing efficiencies of a total market strategy. The efficiencies often reside on the media reach of their campaigns, but they also include internal team collaboration and support. BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America “The total market approach allows us to get both scale and efficiency while balancing relevance and effectiveness where it matters the most. As a result, brands like Huggies, Kleenex, and Kotex have shown great potential for growth.” —Lizette Williams, multicultural marketing leader, North America, Kimberly-Clark (Mediapost.com)

Challenges & Opportunities OPPORTUNITY: INCREASED BRAND EQUITY Total market brand communications use integration, coherence and message repetition; this builds the brand across all consumer segments, regardless of race or ethnicity. Brand equity is built on the number of consumer touch points as well as the quality of the message itself. BACK Challenges & Opportunities The challenges and opportunities of a total market strategy in a polycultural America CASE STUDY: Coca-Cola 1003% 20% 26% increase in social mentions after airing the 2014 Super Bowl commercial, making it the company’s most successful campaign in years. increase in purchase of Coca- Cola products among those 19-24 compared to the month before the ad aired. of ethnic minority consumers say Coca-Cola Classic is the soda they drink most often, compared to 20% of Non-Hispanic White 1,003% (Wendy Clark, President, Sparkling Brands, Coca- Cola NA; ANA 2014)) (BloombergBusiness) (Source: 2014 Kantar Media TGI)

Marketplace Manifestations POLYCULTURALISM IN THE MARKETPLACE: To better understand polyculturalism, it’s useful to examine the ways it manifests in today’s marketplace. These trends highlight marketing, innovation and positioning opportunities for brands in any category. Marketplace Manifestations Four ways that polycultural America can be seen in the marketplace The New Protagonist The Changing Color of Luxe Bilingual Identity Sensorial Blast

Marketplace Manifestations THE CHANGING COLOR OF LUXE: Savvy and aspirational ethnic consumers are branching out, in some cases going for more subtle expressions of luxury, in others for unique products with cultural relevance, and in still others for high-end versions of beloved home-stuff. For ethnic minority consumers more open to spending money than in previous years, culture plays a vital role in purchasing decisions. BACK Marketplace Manifestations Four ways that polycultural America can be seen in the marketplace Chayo Mexican Kitchen & Tequila Bar, Las Vegas A new and upscale taste of Mexican food with a focus on tequila culture. Black Coyote Wineries, Calif. One of the first African-American founded wineries; 65% of its club members are African American.

Ethnic media consumers: immersed and engaged THE NEW PROTAGONIST: In the entertainment business, diversity has officially reached the lead role. It is no longer acceptable to have diverse casting in secondary roles only. And with ethnic consumers’ tendency to be either more immersed in or more engaged with media content than Non-Hispanic Whites, they expect dynamic ethnic main characters to relate to. BACK Marketplace Manifestations Four ways that polycultural America can be seen in the marketplace Ethnic media consumers: immersed and engaged “It’s time for people to see us, people of color, for what we really are: complicated.” —Viola Davis, star of ABC’s “How to Get Away With Murder” *Among those with an internet-enabled mobile device (summary of frequently/occasionally) **Source: 2014 Kantar Media TGI

Marketplace Manifestations SENSORIAL BLAST: The most noticeable effect of polyculturalism in the marketplace is the ways in which American tastes have been changed and shaped by ethnic preferences and flavors. People’s senses are being stimulated today more than ever before—thanks to the ethnic experience, product innovations and attention to quality. BACK Marketplace Manifestations Four ways that polycultural America can be seen in the marketplace TASTE The American palate is getting broader and stronger: flavors are bold and what was exotic before has gone mainstream today. My preferences have been shaped by my interactions with people of other races and ethnicities (among Millennials) SMELL Scents and aromas have become more prominent and, in many cases, more upscale. TOUCH Textures have become smoother with new levels of softness never reached before.

Spanish language skills among non-Hispanics BILINGUAL IDENTITY: Bilingualism (English/Spanish) is an aspiration that transcends today’s Hispanic population. Throughout the country, non-Hispanic children are learning the language at earlier stages and developing bilingualism. Marketers are leveraging this trend with bilingual signage and products for both native speakers and those who want to learn Spanish. BACK Marketplace Manifestations Four ways that polycultural America can be seen in the marketplace Spanish language skills among non-Hispanics

Now What? WHAT’S YOUR ISSUE? A roadmap for developing a successful strategy in the new polycultural America IS POLYCULTURALISM A TREND AND HOW LONG WILL IT LAST? WHICH CONSUMER GROUPS SHOULD I FOCUS ON? WHAT IS THE ROLE OF CULTURE IN MARKETING TO CONSUMERS?

BACK Help! How long is polyculturalism going to last and how long should I follow it? BACK 1 2 3 Now What? A roadmap for developing a successful strategy in the new polycultural America ASSUME RECOGNIZE ENGAGE Across categories, there is a growing need to embrace diversity, innovate with ethnic consumers in mind, and speak with cultural intelligence. This is especially true for marketers targeting Millennial and Centennial consumers. Polyculturalism is not a trend; it is and will be the norm. Polyculturalism is the everyday reality of U.S. consumers today and assume it will only grow as we look into the future. Recognize the new polycultural paradigm and how it influences your current and future consumers. Different facets of a polycultural America will impact different aspects of your business, from human resources to brand communications.

BACK Help! Which consumer groups should I focus on in a polycultural America? BACK 1 2 3 Now What? A roadmap for developing a successful strategy in the new polycultural America INCLUSION INTEGRATION COMMITMENT Marketing in polycultural America isn’t about focusing on one specific group. The right approach looks at integrating sub-segments of the population into a total market strategy that is cohesive and therefore, more impactful. Bring in diverse voices to the table early on in the planning/creative process. Listen to ethnic consumer perspectives and fold them into strategy development. Building cultural intelligence into the planning process will ensure you reach the total market. It can be easy to “talk the talk” of a total market focus, but companies and brands must fully commit to incorporating diversity into their strategy and stand behind it. Success in polycultural America requires color bravery, not color blindness.

Help! What is the role of culture when marketing in a polycultural America? BACK 1 2 3 Now What? A roadmap for developing a successful strategy in the new polycultural America APPETITE DIRECTION OPPORTUNITY The Futures Company’s cultural orientation model—the Cultural Positioning System (CPS)—shows that consumers increasingly are demonstrating more interest in their own and others’ culture. Consumers are moving into the polycultural quadrant of the CPS as openness increases across the board and attachment to cultural heritage grows, especially among ethnic consumers. Brands using culture to connect with consumers in relevant ways stand to win in the polycultural marketplace. Knowing where your target consumers fall in the CPS can help you strike the right balance of cultural openness and attachment to match their relationship to culture.

A Brand’s Journey to Color Bravery Beginning Steps  Intermediate Steps  Advanced Steps  Brands & Marketing Brands and campaigns resonating with polycultural America Forges meaningful connections with ethnic communities, especially those underserved; commitment towards social issues Launches diversity-related brand initiatives; ethnic voices and faces Diversity from within (HR, leadership) Invests in ethnic initiatives; new product innovations to meet ethnic consumer needs Brand drives race conversations Takes a stand on polarizing diversity issues

“There’s room in this world for beauty to be diverse.” The Journey to Color Bravery Beginning Steps BACK Brands & Marketing Brands and campaigns resonating with polycultural America In its December 2014 issue, Glamour magazine chose Lupita Nyong’o for its cover as the “breakthrough” woman of the year. P&G is redefining beauty and celebrating ethnic identity with its twin campaigns: Orgullosa (Proud) for Hispanic women and “My Black is Beautiful” for African Americans. “There’s room in this world for beauty to be diverse.” —Lupita Nyong’o

The Journey to Color Bravery Intermediate Steps BACK Brands & Marketing Brands and campaigns resonating with polycultural America Walgreens innovated its retail format to meet the needs of people living in food deserts by offering fresh produce in its stores. Walgreens is investing right where ethnic consumers need it: health and nutrition. One of ESPN’s key competitive advantages is the diversity of its workforce. This is a quality that is reflected on screen, in front of an increasingly diverse audience.

The Journey to Color Bravery Advanced Steps BACK Brands & Marketing Brands and campaigns resonating with polycultural America During Martin Luther King Jr. Day, MTV took a stand by airing their programming in black and white with the objective of starting conversations about race. Conversations were directed to the online platform lookdifferent.org. MTV used the hashtag #thetalk to engage its audience, featuring stories from politicians, artists, actors and activists throughout the day and on their website.

“Millennials are the most racially diverse generation in American history, a trend driven by the large wave of Hispanic and Asian immigrants who have been coming to the U.S. for the past half century, and whose U.S.-born children are now aging into adulthood.” (Millennials in Adulthood, Pew Research Center) “As immigration continues to shape our food tastes, watch for authentic interpretations, as well as the introduction of ingredients into mainstream cooking, and curious new products at the grocery store, including exotic flours, and spicy and vinegary condiments. Already you can get your ghee and your togarashi at local Whole Foods stores.” (The National Restaurant Association) “To win over important growth communities, culture can no longer just be subtext; it must drive total market models. So are you ‘culturalizing’ for future growth and success with the rapidly expanding and shifting multihued audiences critical to growth in the U.S.? Fail to do so at your own risk.” (Esther Franklin, Executive Vice President, Starcom MediaVest Group, AdWeek) “We cannot afford to be color blind. We have to be color brave. We have to be willing—as teachers and parents and entrepreneurs and scientists—we have to be willing to have proactive conversations about race with honesty and understanding and courage, not because it's the right thing to do, but because it's the smart thing to do. Because our businesses and our products and our science, our research, all of that will be better with greater diversity.” (Mellody Hobson, TED Talk) “The path to becoming a true color brave brand is far from easy. To be credible in this space, brands need to demonstrate a true, unyielding commitment to diversity—and not just of the casting variety. They must be prepared for the backlash and controversy that often comes with taking a courageous approach. But the upside is worth the risk. Americans’ steadfast belief in the value of diversity is widespread and growing.” (Valeria Piaggio, Head of Polycultural Insights, U.S. Yankelovich MONITOR) Quotes of Note Useful snippets of relevant content about polycultural America to add color to these insights

Other Resources Links to additional content on polycultural America Future Perspectives The Roadmap to the New America MONITOR LIVE Spotlights Diversity Reaches a Tipping Point The Demographic Future: Are Brands Ready for the Next American Revolution? MONITOR Minute Why Being a Force for Good is the Future The Customer Service Conundrum MONITOR Downloads Multicultural Consumers Millennials New American Household Other Sources Racial Dot Map (Demographics Research Group) The Next America (Pew Research) Race in America (Pew Research) The Changing Demographics in America (Smithsonian) 20 Years of Sweeping Change (USA Today) Mapping America’s Future (Urban Institute) Welcome To The New Off-white America (AP) Interracial Marriage Seen Gaining Wide Acceptance (New York Times) Millennials as New Parents (Barkley/Vision Critical) Racial Bias Persists (National Bureau of Economic Research)

CLICK HERE to access the Interactive Download on Polycultural America Download in One Share or save this Download CLICK HERE to access the library of MONITOR Downloads All data are from the 2015 U.S. Yankelovich MONITOR, unless otherwise noted