11
Product, Price, Place, Physical Evidence and Process
It is well documented in the marketing and psychology literatures that consumer attitudes and purchase intentions are influenced by ethnicity (Luedicke, 2011; Papadopoulos et al., 2008; Ouellet, 2007), with effects that help to predict and understand the decision-making process of ethnic consumers (Podoshen, 2009). Consumers sharing a similar ethnic background also share their consumption behaviours (El Banna et al., 2018; Balasubramanian and Herche, 1994), and, as discussed in Chapter 9 of this text, the sharing is extensive to consumers’ long-term endorsement of community preferred suppliers.
The implication is that, as associations of self-ascribed and group recognized individuals sharing one ethnicity with a common cultural tradition and a sense of identity (Connor, 1978) minority ethnic groups offer potentially attractive opportunities for business that are sensitive to the ethnicity attributes binding the consumers making up the target market. Since these markets are protected by ethnicity-related entry barriers, built on culturally based tastes of ethnic minorities that, arguably, can be best served by co-ethnic businesses (Aldrich et al., 1985; Light, 1972), entry deterrence of competitors unable to overcome those barriers can lessen competitive pressures. Given ethnic minority businesses’ embedding in their co-ethnic group, such businesses arise as particularly suited to take advantage of the emergent business opportunities.
Always acknowledging possible contextual effects, Chapters 5 and 10 of this text identified the challenge facing ethnic minority businesses as to devise ethnic marketing tactical activities which are ethnic sensitive and which focus on the establishment, maintenance and enhancement of desired long-term relationships with co-ethnic consumers.
This chapter discusses tactical activities for five of the elements of the marketing mix, namely product, price, place, physical evidence and process. Two other elements, promotion and personalization, are discussed in Chapter 12, while Chapter 13 accounts for people, including ethical behaviour and social responsibility.
The Product Element: Considering Tangibility and Perceived Risk
Ethnic minority consumers’ behavioural uniqueness may involve choice difficulties that constrain their exchanges in the host country’s markets. These include language difficulties and ensuing limited exposure to mass media; a lack of time, money and marketplace knowledge to search out and evaluate information about service-products and suppliers; and possible unfamiliarity with available brands as well as preference for familiar ethnic brands. From the business perspective, ability to reach these consumers may be limited by their own difficulties in understanding and communicating with different cultures, and by their possible unfamiliarity with ethnic communication networks (Laroche, Kim and Clarke, 1997; Kaufman, 1991). This converts into potential advantage for ethnic minority businesses targeting co-ethnic consumers.
Service activities are sufficiently different from tangible goods to justify research on how the differences may impact on service-product consumption by ethnic minority consumers. Consumption can be complicated by their restricted ability to read product literature and discomfort in consulting with service staff. Inexperience within the marketplace and differences in meanings and contexts are exacerbated by reduced service-product awareness due to perishability and, in comparison with mainstream consumers, increased perceived risk due to limited access to sources of information, more subjective assessment of value and quality and difficulty in participating in service-encounters.
The noted difficulties arguably lead to increased post-purchase evaluation, less information gathering from the front-stage, increased dependence on service providers, reduced incentive for extensive information search and to switch suppliers, and loyalty (Pires and Stanton, 2000). Implicitly, therefore, difficulties facing ethnic minority consumers and marketers trying to reach them may be a function of the degree of tangibility, greater for exchanges involving services rather than physical goods. But this is a conclusion that merits revisiting relative to the untested possibility that ethnicity can convert search and experience service-products into credence ones. For example, sardines and bottled water are tangible food items. Sardines imported from Portugal are better appreciated and more sought after by the Portuguese community in Australia. The community also remains supportive of an import co-ethnic business that distributes a variety of bottled water from Portugal.
Tangibilit y refers to the physical nature of the core product, the basic, generic central thing that is exchanged (Levitt, 1997). Goods may be displayed and examined by prospective purchasers often without interaction with the provider being necessary, providing the consumer “with the opportunity to make physical comparisons and to set standards on which to make purchase decisions” (Hartman and Lindgren Jr., 1993). In contrast, intangibility emphasizes services as performances resulting in experiences, so that a service may be argued “to have no existence apart from the interaction between the people, both provider and consumer, who experience the service together” (Friedman and Smith, 1993). People interactions reflect the inseparability characteristic of exchanges involving intangible service-products.
Service-products vary in their tangibility (Lovelock, 1996; Rothmell, 1966; Shostack, 1977), arguably in a continuum from highly tangible dominant to highly intangible-dominant (Zeithaml and Bitner, 2000). Whether the service-products are more or less difficult to evaluate by consumers is a quality inversely related to the dominance of their tangible element. Highly tangible service-products, such as groceries, are likely to be high in search qualities associated with some characteristic (e.g. appearance, colour or smell) that can be predetermined before purchasing takes place. Service-products that involve characteristics that can only be discerned after purchase or during consumption (e.g. taste and ease of handling) are likely to be high in experience qualities (Nelson, 1970). At the highly intangible end of the continuum, service-products may be impossible to evaluate even after consumption. Including activities (such as education, legal and medical services) involving a high degree of techno-professional specialization and expertise commonly out of reach to general consumers. These service-products are said to be high in credence qualities (Darby and Karni, 1973).
High tangibility offers consumers in general the ability to make physical comparisons across service-products, even if physical comparison may not always be sufficient to evaluate a complex product conclusively, or to choose between brands. If these consumers need to interact with co-ethnic service staff, as when learning how to use/consume an “ethnic” product, they may gain reassurance from peers as well as the added benefit from their ability to peruse appropriate service-product literature in their own language (Pires, Stanton and Stanton, 2004). Hence these consumers may experience lower perceived risk compared with what would be the case if interaction was with service staff without a shared ethnicity (Montoya and Briggs, 2013; Murray 1991).
From a business perspective, there may be a lower need for free trials or for “satisfaction or money back” guarantees. However, Montoya and Briggs (2013) show that
shared ethnicity affects consumers’ expectations of exchanging particularistic resources and receiving preferential treatment benefits (and) high levels of ethnic identification appear to promote in-group favoritism.
(p 314)
Intangibility, personalization (referring to the social content between customer and service provider, discussed in Chapter 12) and the limited ability to replicate service performance associated with service-product heterogeneity all can be expected to limit ethnic minority consumers’ objective ability to evaluate service-product quality (Mittal and Lassar, 1996). Hence, customer satisfaction and repeat patronage may be determined solely by the quality of the interaction during the personal encounter (Solomon et al., 1985, p. 100). For example, if evaluating quality for medical service-products is more difficult than for childcare service-products, there is a need for greater consumer perceived provider credibility in the first case, to ensure satisfying service-encounters.
The implication is that risk-reducing information by the business is likely to be highly valued, particularly for relatively intangible service-products, such that ethnic minority consumers may have no incentive to search for new information sources (or new suppliers) because to change partners is to reestablish risk (Bendapudi and Berry, 1997). It is thus justified to develop tactical activities focused on consumer perceptions regarding service quality and perceived value of a service-product. While ethnic minority consumers may rely on provider credibility as a major choice criterion, they are not passive when faced with poor service, inconvenience and/or overpricing.
Pires, Stanton and Stanton (2004)’s study of the Portuguese community in Sydney found that ethnic minority consumers value continuing relationships with suppliers, more so in the provision of service-products in the credence class. Habituation to the supplier is the most valued attribute in this class. But business attention to ensuring continued value creation also should strengthen relationships with consumers. For example, tactical activities that facilitate socialization between co-ethnic consumers within service delivery frontstages is recommended in relation to service-products high in experience qualities. This has been recognized as influencing customer relationship maintenance (Sheth and Parvatiyar, 1995), which is consistent with Brand and Cronin’s (1997) observation that consumers of highly intangible service-products, high in credence qualities, tend to exhibit a great propensity to maintain long-term relationships with providers.
It is apparent that the discussion of tangibility fully supports the argument for tactical activities enacted by ethnic minority business to be embedded in a relational marketing environment, as discussed in Chapter 10. Tangibility matters: different service-products with different tangibility will have specific circumstances that need to be taken into account by providers in devising and implement tactical activities. Also, individual exchanges of service-products are not assessed in isolation but within a continuation of past exchanges likely to continue in the future (Bendapudi and Berry, 1997).
Approach to the Discussion of the Tactical Ethnic Marketing Mix
The tactical activities for each of the eight elements of the ethnic marketing mix to be deployed by ethnic minority business are included in Chapters 11 to 13, one table for each element. The inclusions in these tables are neither arbitrary nor to be taken lightly. Rather, from a demand perspective, decisions on each activity need to be subject to careful analysis of the context characterizing the market(s) to be targeted, including information about:
- The entrepreneur’s minority ethnic group of affiliation: socioeconomic status, demographic and psychographic print, relevant regional characteristics of consumption in the country of provenance, the minority ethnic group’s substantiality given that it is likely to be heterogeneous within itself (Kwok and Uncles, 2005), how close-knit the community is and factors of community distinctiveness relative to co-ethnic communities at distinct locations;
- Other minority ethnic groups co-located with the entrepreneur’s group of affiliation: demographic and psychographic print, similarity in needs and wants across minority ethnic groups, relative substantiality, ethnic engagement;
- Other consumer groups that may offer targeting opportunities: demographics, substantiality, cross-target compatibility, group engagement.
From a supply perspective, the competitive environment needs to be well understood, both in terms of the range of service-products on offer and the characteristics of the direct suppliers—those who interact with consumers—independently of their association with the entrepreneur’s co-ethnic group of affiliation. Particular attention should be given to learning from those suppliers endowed by community preference (see Chapter 9), particularly by recognizing the preferred suppliers to the community and the determinant factors of community preference.
Also relevant is an audit of community resources for each target market, including major gatekeepers, the range of service-products on offer and ethnic supplier networks. A minority ethnic group’s ethnic resources can be an effective external indicator of group substantiality (Pires and Stanton, 2015, 2005).
Once the strategic objectives for identified target markets are identified, an ethnic minority business can proceed to consider the tactics to be deployed for achieving the objectives. This chapter first discusses product-related tactical activities.
Product
The product element refers to the core service-products that are offered to the market, augmented with value added features, branding and packaging as well as service and any warranties. Table 11.1 identifies product-related tactical activities, drawn from observation, own experience and from recommendations in the specialist literature. Given the importance of the nature of the service-product, reflected in the discussion of intangibility and perceived risk above, the table is conspicuous for the reduced number of entries, but this ensues from the attempt to identify types of activities that may be generalizable to a variety of contexts, rather than simply listing instances of activities deployed in very specific contexts.
Table 11.1 Tactical Activities by Ethnic Minority Businesses—Product
| Marketing Mix—Product Related Tactics |
|
|
| Consider the attributes of the value proposition that are best valued by ethnic consumers and relate that perception of value to consumers’ strength of ethnic identification with the ethnic group. Research shows that the Hispanic community in the USA exhibited a direct relationship between ethnic identification strength and the likelihood of preferential consumption from co–ethnic service providers and for brands used by family and friends, with a lesser concern about economic value. |
| Consider evidence from the UK that that cultural differences do not explain preference for grocery brands, although ethnic minority consumers appear less concerned with country of origin than mainstream consumers. |
| Carry an appropriate range of ethnic products relevant to the specific community. Consider including other relevant and some mainstream products. |
| Sell branded products originating from country of origin. |
| Sell branded products specially developed for ethnic minorities in the host country. |
| Sell special pack sizes only suitable for consumption by ethnic minorities. |
| Sell product range unavailable via mainstream outlets. |
| Sell a range of famous and non–famous brands. |
| Consider any service–products characterized by credence attributes that may be embodied in the provider. |
| Consider opportunities to appeal to dissimilar markets, such as occasional customers from distinct consumer groups. This may involve the provision of exotic (from the mainstream perspective) service–products, of service–products from the country of origin of the minority ethnic group, as well as a range of convenience products sought after by customers in general. |
The first entry refers to the effect of strength of ethnic consumer identification with a minority ethnic group in the preference for co-ethnic service providers and for brands used by family and friends, above economic value concerns. This finding was derived in the context of Hispanic communities in the USA (Donthu and Cherian, 1994) and may not apply in different contexts or over time. This is also the case of evidence from the UK—that cultural differences do not explain preferences for grocery brands, although ethnic minority consumers appear less concerned with country of origin than mainstream consumers (Omar, Hirst and Blank-son, 2004). Both cases identify issues that are deemed sufficiently important to be given consideration by ethnic minority business in general, providing guidance on what the business should be taking into account when devising product-related tactical activities.
Most of ethnic minority businesses’ product-related tactical activities in the table were identified by Jamal (2005) in the context of the UK. Attention is predominantly on the type of products to offer focusing on their ethnic nature as compared with mainstream products. Attention is also given to the consumer and product constellation, referring to the products co-ethnic consumers consume (Solomon and Buchanan, 1991) based on their emotional dispositions (Flight and Coker, 2016). Emphasis is given to making available an appropriate range of ethnic products relevant to the specific co-ethnic community, although also considering other relevant and some mainstream products (Jamal, 2005).
Accordingly, it is recommended that business should include branded products originating from the home country (Al Ganideh and Al Taee, 2012), products specially developed for ethnic minorities in the host country, including a range of famous and non-famous brands. Consideration should be given to a possible need for special pack sizes only suitable for consumption by ethnic minorities, as well as for a relevant range of products unavailable via mainstream outlets. The reasoning is to nurture consumer dependence by catering for the special needs of the targeted clientele, hence enhancing the relationship with the market.
A final entry in Table 11.1 may be particularly relevant in serving consumers who don’t share the business ethnicity. For example, the provision of exotic (from the mainstream perspective) service-products, of service-products from the country of origin of the minority ethnic group, may appeal to consumers who don’t share the business ethnicity, whether mainstream or similar-others (McClintock, Novie and Gebhardt, 2017; Parzer, Astleithner and Rieder, 2016; Aldrich and Waldinger, 1990).
Reflecting on the product-related activities, and similar to considerations of pricing tactics which are discussed next, it appears plausible to consider that technologic development, greater availability to all business and convergence across markets may have a role to play in the differentiation tactics available to of ethnic minority businesses. Even in the context of ethnic minority business, and to ethnic products in general, availability might depend more on computer literacy and on the ability to use the Internet, than on ethnic entrepreneurship related supply. Accordingly, Ulaga and Eggert (2006) report that product quality, delivery performance and economics have become only moderate supplier differentiators, price being the weakest, with service support and personal interaction benefits exhibiting a much stronger potential as core supplier differentiators. But, again, the matter of context cannot be set aside. That study addressed a business-to-business environment and more recent research in a business to consumer environment highlighted competitive pricing as the second most important ethnic-related attribute after delivery performance (Huang, Oppewal and Mavondo, 2013). As noted in Chapter 6, this is an area clearly requiring further research.
Price
Often related to the business position in the market, the price element in the marketing mix refers to the setting of prices for service-products on offer, including all the parts that make up overall cost. Table 11.2 lists price related tactical activities meriting consideration by ethnic minority businesses in targeting co-ethnic consumers. Again, most tactical activities in the table were identified by Jamal (2005) in the UK context.
Since minority ethnic groups can be expected to be heterogeneous within themselves a customer portfolio comprising different segments of co-ethnic consumers may result from the segmentation process and targeting decision. Presuming the requirements for effective market segmentation have been met, each segment that is selected for targeting requires a distinctive value proposition, and this may or may not involve distinct price related tactical activities, depending on the proposition attributes that are identified as important and as determinant, and on the business capabilities and competencies (Nagle and Müller, 2017).
Table 11.2 Tactical Activities by Ethnic Minority Businesses—Price
| Marketing Mix—Pricing Related Tactics |
|
|
| Consider following a differentiated pricing strategy. |
| Keep the overall prices down. |
| Sell famous brands at a premium and non–famous brands at low prices. |
| Subject to reflecting additional value creation, premium pricing may be possible. |
| Use pricing as a promotional tool (cut prices on vegetables and fruit). |
| Take into account that research in Australia has found that ethnicity does not have a significant impact on responses to sales promotions. |
| For service–products in the search class, price needs to remain competitive, since consumers can easily shop around and compare essentially tangible service–products, even before they make a purchase. |
| Service–products in the credence class are complex and difficult to evaluate even after consumption. While this may suggest that price is much less important, this may not be the case because minority ethnic consumers condition their price evaluations in this class on their assessment of service quality. If performance is perceived positively, then price may not be a concern. If the performance is perceived negatively, then price provides an excuse for switching suppliers, even when the consumer lacks the technical expertise to assess performance quality. |
The recurring recommendation in the specialist literature is that ethnic minority business should consider following a differentiated pricing strategy (Ibrahim and Galt, 2011; Blankson and Stokes, 2002), while generally keeping prices low, which is often the case for generic or unproven service-products (Labrianidis and Hatziprokopiou, 2010; Ward, 2005; Aldrich and Waldinger, 1990). But it is also considered that premium pricing may be possible in the case of famous or well recognized and proven service-products or brands, provided the value proposition that is delivered reflects commensurate value creation. In any case, care needs to be taken with changes in the supplementary benefits surrounding the core product, such as price, particularly when seeking to maintain or enhance relationships with consumers for the long term, as is the case for ethnic minority business.
Charging different prices for equivalent value propositions, particularly when consumers share the same front-stage, is fraught with difficulty and can compromise trust and commitment, ultimately compromising loyalty (Han and Ryu, 2009). Hence, it is important to note that while it is recommended that ethnic minority businesses should consider using lower prices as a promotional tool, for example cutting prices of consumables such as vegetables and fruit, it has been found that at least in Australia ethnicity does not have a significant impact on responses to sales promotions (Kwok and Uncles, 2005). Hence, the effectiveness of price cutting as a tactical activity needs to be carefully assessed.
Amidst other important considerations such as reputation and conspicuous consumption of hedonic or utilitarian service-products (Dhar and Wertenbroch, 2000), pricing is necessarily dependent on the service-product itself so that intangibility and ease of quality assessment also need to be taken into account. Rather than the dollars involved, it is the perceived value that is perceived by consumers relative to competing offers that determines whether a price is high or low.
In the context of the Portuguese community in Sydney, Australia, Pires and Stanton (2000) provide insights on the implications of tangibility for pricing. In the case of complex, intangible-dominant service-products in the credence class, value is difficult to evaluate even after consumption. While this may suggest that price is much less important, this may not be the case because ethnic minority consumers condition their price evaluations in this class on their assessment of service quality. If performance is perceived positively, then price may not be a concern. If the performance is perceived negatively, then price provides an excuse for switching suppliers, even when the consumer lacks the technical expertise to assess performance quality.
In contrast, in the case of tangible dominant service-products in the search class it is expected that price needs to remain competitive because consumers might be able to easily shop around and compare essentially tangible service-products even before they make a purchase. Notwithstanding, as noted earlier in this chapter customer satisfaction and repeat patronage may be determined solely by the quality of the interaction during the personal encounter (Solomon et al., 1985, p. 100), rather than the tangible service-product per se.
Price is clearly a complex element in the marketing mix, depending on the service-product itself as well as on where it is delivered to consumers. At a minimum, price needs to take all costs into account, including those related to location.
Place
Place is a marketing tool that refers to how and where consumers and suppliers meet for business. It includes the physical location (such as via a shopfront, online or a distributor), delivery methods and even stock level management; however, these inclusions have been diluted to some extent by considering tactical activities related to people, physical evidence and process.
In the case of ethnic marketing, place is particularly important because it constrains and goes beyond transactional notions of convenience, involving stakeholder emotions and encompassing an “understanding” of the community, including ties to the home country, that may be difficult to grasp by outsiders to the ethnic community. This “understanding” is eloquently expressed in an article in National Geographic about Chinese individuals’ attraction to New York’s Chinatown as a community place, including individuals in the professions who have settled outside Chinese neighbourhoods. The Chinese are attracted to Chinatown
to escape loneliness, to meet other Chinese people, to eat the best Chinese food, to remind themselves of where they came from…. Cultural pride is evident in Chinese Americans who live among non-Chinese neighbours … but come to Chinatown on weekends to give their children what they call “a Chinese experience…. It’s nostalgic. You go even if you don’t need anything, and you always pick up something that reminds you of home”…. To keep their sense of the mother culture strong …, parents send their children to Chinese-language, or “Saturday” schools in Chinatown.
(Swerdlow and Chang, 1998, pp. 64–71)
Place can be described as where the community happens. From a marketing perspective it is essentially where consumers and entrepreneurs who share their ethnicity come together, interact, transact and socialize, placing them at the marketers’ reach for targeting purposes. Guided by ethnic sensitivity and relational imperatives, Table 11.3 lists place-related tactical activities meriting consideration by ethnic minority businesses in targeting co-ethnic consumers.
The attraction of the Chinese community to New York’s Chinatown in the excerpt above strengthens the argument that it makes sense for ethnic minority businesses to locate within their community where their customers are, improving accessibility for both. Settling into the community by inexperienced co-ethnic consumers assists with eventual communication and socialization deficits. In addition to reducing cultural shock, the community may assist the settlers’ need to earn a living, a view echoed by Zhou and Logan’s (1989) reporting of thousands of ethnic jobs (such as jobs in ethnic food outlets) being provided by the Chinese enclave in New York City for Chinese immigrants. Reflecting Chinese society and organizations, ethnic jobs are arguably used to generate excellent relationships with customers, driving repurchase with a positive effect on customer relationship marketing (Liao, 2016).
Table 11.3 Tactical Activities by Ethnic Minority Businesses—Place
| Place–Related Tactics |
|
|
| Place is particularly important for ethnic marketing practice because it constrains and goes beyond transactional notions of convenience, involving stakeholder emotions and encompassing an "understanding" of the community that may be difficult to grasp by outsiders to the ethnic community. |
| Ethnic minority businesses should consider locating within their co–ethnic community, given the group’s extensive role on their viability at each stage of their development. Ethnic entrepreneurs are likely to derive from and remain entwined with their co–ethnic group, which also provides a market presumed to be substantial and stable over time. |
| Co–location with the target ethnic community may reduce communication and socialization deficits, as well as difficulties in earning a living. Self–employed ethnic entrepreneurs may take advantage of opportunities stemming from unmet demands of the co–ethnic group. |
| Locating near the ethnic community can be a source of access economies and competitive advantage for ethnic minority businesses based on birth–related attachment and belonging, a consideration consistent with use the theory of intercultural accommodation. |
| Co–location advantages can make all the difference. Some ethnic businesses are able to thrive by just "being there". Reportedly, 17 percent of Albanian businesses in Greece used no form of business promotion, simply locating their businesses in immigrant cultural centres. |
| Ethnic minority businesses are indicators of the existence of minority ethnic groups, and Minority ethnic groups signal the existence of affiliated ethnic minority business. |
| Location issues must take the line of business activity into account. |
| Separation from the co–ethnic group can dictate business demise, even in cases where businesses effectively deploy ethnic–sensitive tactical activities and establish successful relationships with their market. Alternative tactical activities need to be considered to defend relationship maintenance. |
Further to being a source of employment opportunities for co-ethnic individuals, minority ethnic groups also facilitate self-employment and entrepreneurship solutions (as discussed in Chapters 7 and 8 of this text) including business opportunities and the support needed to take advantage of the opportunities stemming from unmet co-ethnic group demands (Takyi and Boate, 2006).
Co-location within the ethnic group assists in the extensive role the group plays in the start-up and development phases of ethnic minority businesses and, crucially, in their ultimate viability. This is because the primary focus of these businesses is by definition the co-ethnic group itself, which is presumed to provide a stable and substantial market over time and without which the business might not survive due to declining sales (Komakech and Jackson, 2016).
There is evidence that being located near or within the co-ethnic community can be a source of access economies and competitive advantage for ethnic minority businesses, based on shared ethnicity, birth-related attachment and belonging (Du, 2017) and a consideration consistent with the theory of intercultural accommodation (Huang, Oppewal and Mavondo, 2013). Indeed, a study of Albanian minority business in Greece revealed that co-location is a substitute for business promotion, being sufficient for businesses to thrive by just “being there” (Piperopoulos, 2010).
The considerations surrounding place in the context of ethnic minority business are uncontested in the specialist literature, such that the existence of an ethnic community indicates that ethnic minority businesses can be expected to be found in its midst. Conversely, the existence of particular ethnic minority businesses is considered to signal the existence of a co-ethnic community. Such is the case of Warsaw, a Polish ethnic minority business in Ashton-under-Lyne, Manchester, UK. As noted by Bannister et al. (2016), the supermarket targets mainly Polish speakers, reflecting the owner’s own language and the products it sells. The fact that a large Polish supermarket exists in the centre of Ashton-under-Lyne is indicative of a growing population of Polish residents in the area.
Location issues must take the line of business activity into account. While ethnic business as a rule locates within or in close vicinity with the co-ethnic milieu, it is not uncommon for businesses such as ethnic restaurants to break the rule, co-locating where similar establishments exist (Humphreys and Matti, 2018; Wang, 2013), often quite apart from the co-ethnic neighbourhood. There is also recent evidence of retail chains targeting ethnic markets and expanding into ethnic neighbourhoods of groups with less popular cuisines in New York, such as Caribbean, Indian and Korean (Somashekhar, 2018). However, these are special cases that can be justified by the nature of the service-product and its ability to appeal across markets, as well as related to competitive tactics seeking to attract a larger market (Chidambaram and Pervin, 2018; Thompson, 2010). In general, separation from the co-ethnic group can dictate business demise, as in the case of urban renewal in Toronto (Canada).
Urban renewal often drives away original residents, replacing them with higher income residents who can afford the new spaces, leading to gentrification. This was the case in a multicultural social housing neighbourhood in Toronto (Regent Park) where small ethnic retail grocery stores that supplied ethnic foods and items to the resident ethnic populations were excluded from the civic planning processes, being unable to compete for space in the new buildings. Conducted by Komakech and Jackson (2016), the qualitative study found that the resident population was supportive of these shops which provided culturally familiar items and offered a social credit scheme that recognized existing social relationships and allowed low-income residents to afford food and other amenities in a dignified manner and pay later, without penalty or interest. Yet, although the shops were trusted and provided valued cultural social spaces for ethnic identity formation and ethnic food security in an ethnic-sensitive manner, displacement from the renewed neighbourhood resulted in declining sales and loss of business, breaking the relationship and dictating their ultimate demise.
An implication from the study of ethnic minority businesses in Regent Park is that their demise happened irrespective of the ethnic-sensitive tactical activities they deployed, which generated favourable place identity for consumers, reflected in the congruency between a consumer’s self-identity and a place and assessed by evaluating the ethnicity of employees and customers in a consumption setting (Rosenbaum and Montoya, 2007). The inference is that careful consideration must be given by ethnic minority businesses to their mixed embedding, accounting for the attitudes of the community at large, not only the co-ethnic community (Brown-Saracino, Thurk and Fine, 2008).
Ultimately, while consideration of place points to co-location as an almost unavoidable outcome from the process of formation of minority ethnic groups and ethnic minority businesses, analysis of context may reveal other tactical activities that can shore business activities and the maintenance of relationships with consumers for the long-term. For example, consideration of how and where consumers and suppliers meet for business includes traditional and online service scapes (Harris and Goode, 2010; Booms and Bitner, 1981, 1982) which can provide useful insights. Online service scapes are influenced by technologic development, greater availability to all business and convergence across markets, inviting perspectives of place being everywhere, but much more research is needed to fully understand related ethnic marketing and entrepreneur-ship effects. More is known about traditional service scapes, discussed in the next section dealing with tactical activities related to physical evidence, an element of the extended marketing mix.
Physical Evidence
Dominated by a significant mass of ethnic minority businesses, ethnic shopfronts, interesting landscapes, street furniture, spatial use patterns and people, ethnic neighbourhoods within culturally diverse cities provide consumers with rewarding cultural living experiences (Lam, 2001; Conzen, 1990), through their emersion on the neighbourhood’s distinctive atmosphere, as in the cases of Chinatown, Little Italy, Latin Quarters, Klein Turkei and Koreatown, just to mention a few. They also represent the commodification and marketing of diversity (Rath, 2017).
One explanation for a neighbourhood’s distinctiveness and appeal refers to the ethnic/foreign goods and services on offer, as well as different work practices and attitudes that give the place a particular socioeconomic identity, including a reputation for particular forms of doing business (Lagendijk et al., 2011). But the more general view recognizes the importance of the atmospherics (Ha and Jang, 2010; Kotler, 1973) of the neighbourhood and of the ethnic minority businesses within, for conveying subjective perceptions of familiarity to co-ethnic consumers and generating preference. For example, in restaurant settings, Turkish customers in Istanbul care particularly about service staff demeanour, facility aesthetics, layout, ambience, table setting and lighting (Tuzunkan and Albayrak, 2017). These are physical evidence cues that may help make sense of Turkish restaurants’ physical environment within Turkish neighbourhoods. In general terms, ethnic minority businesses can influence consumer perceptions by using physical evidence-based tactical activities in their marketing mix.
Another physical evidence clue refers to front-stage staff, given that consumers regardless of their ethnicity prefer service staff of the same ethnicity (Baumann and Setogawa, 2015).
Understood as a visual metaphor that provides consumers with meaningful clues of the business itself, and of how it fits within the co-ethnic community, physical evidence refers to
the environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.
(Booms and Bitner, 1981)
Table 11.4 lists physical evidence related tactical activities meriting consideration by ethnic minority businesses in targeting co-ethnic consumers, most of which are self-explanatory.
The physical environment developed by ethnic minority business must be congruent with other elements of the marketing mix and may positively or negatively influence co-ethnic consumers’ perceptions, with consumers feeling alien, excluded or unwelcome (Rishbeth, 2001). So the aim is to develop physical evidence cues that create an aesthetically pleasing environment or atmosphere, to assist consumers’ favourable evaluation of the business and of its service-products before, during and after consumption (Ryu, Lee and Gon Kim, 2012). But care is required to ensure that store atmosphere is not perceived by co-ethnic consumers to compromise fair pricing (Huang, Oppewal and Mavondo, 2013).
Table 11.4 Tactical Activities by Ethnic Minority Businesses—Physical Evidence
| Physical (Tangible) Evidence Related Tactics |
|
|
| Put the welcome mat out (Tyler Morning Telegraph, Texas 3/3/2011). |
| Employ front–stage, bilingual, co–ethnic staff whenever possible. This helps co–ethnic customers to feel at home, facilitating communications. In the case of cross–cultural encounters in (Chinese) restaurants, for example, the clientele might expect employees to match the specialized food. |
| Also, similarity–attraction theory, involving homophily—the tendency of people to bond with others like themselves—and proximity—the tendency of people to bond with those nearby explain why ethnic minority consumers may be strongly predisposed to speciality shops and business establishments owned by members of their group of affiliation, and enter into personal relationships with (similar) shopkeepers (Parissis and Helfinger, 1993). |
| Whether co–ethnic employees are used or not, develop frontstages where members from your targeted minority ethnic group(s) feel welcome and comfortable doing business. This also requires: |
| 1. Providing employees with extensive cultural training so as to develop their understanding of different groups’ unique needs and perspectives, and |
| 2. Using physical evidence to closely match customers’ attributes. This is a very complex task to accomplish because the diverse clientele will possibly be sharing the frontstage, requiring well–developed interaction skills by personnel. |
| Increase visibility and achieve top of mind recognition by attending events of interest for the ethnic community, such as cultural events, feasts and festivals. |
| Beyond attending events, conspicuously get involved in and provide support to community events. |
| Engage with ethnic group related associations, social clubs and recognize group gatekeepers in general. |
| Create value for the community through conspicuous endorsements, sponsoring and scholarships. |
| Show commitment to the community by sponsoring and endorsing events over a significant period of time, such annual celebrations for number of years |
| Engage the community in business activities such as innovation drives, inviting community participation in regular focus groups seeking to improve service delivery to the group by better understanding the group’s needs and wants. |
| Objective is to create a welcoming store atmosphere, but this cannot compromise perceptions of fair pricing (Huang, Oppewal and Mavondo, 2013) |
The means to develop physical evidence cues are many and varied. The aesthetics and design of the premises, signs, symbols, artefacts, furnishing, lighting and decoration style; sounds like spoken language and music, scents, brochures, promotional materials, stationery, business cards, business vehicles, websites, blogs, social media and other forms of digital activity; service and support staff, business owner, the way personnel behaves and dresses and other customers visiting the premises, are just examples of physical elements of an ethnic shopfront that can be used to provide tangible clues of what the business represents and of the service-products it provides.
Conspicuous Commitment for the Long-Term
The underlining idea of the objectives to be achieved by tactically using physical evidence cues is for co-ethnic business to demonstrate a commitment to the relationship with the co-ethnic group that is sincere and for the long-term. In doing so, the end is to create and maintain an image as a good group member, in a way that is conspicuous to co-ethnic consumers without being construed as self-publicity, and through them to the group. Focus must be on augmenting the value creation to ethnic networks by contributing to the collective, heightening their demonstration of community citizenship. This involves ongoing and dependable engagement with the community, demonstrating a respectful understanding of co-ethnic group heterogeneity. Other relevant elements range from low employee turnover so the faces of the business remain familiar, to maintaining a preferred product mix, support for community activities and aspirations, such as funding of study scholarships, as well as care for how co-ethnic consumers participate in and experience the delivery of the business service-products—corresponding to the process element of the marketing mix discussed next. Other elements in the marketing mix, namely promotion, personalization and people are discussed in Chapters 12 and 13 of this text.
Process
The focus of the final element of the ethnic marketing mix discussed in this chapter refers to managing process related tactical activities, justified by service experiences perishability. In addition to adequately accounting for co-ethnic group needs, preferences and evaluative criteria when developing terms of exchange, ethnic minority business may develop service delivery systems designed to overcome logistic liabilities. Home delivery and pick-up (for possession processing service activities, such as car repair/detail, dry cleaning) or home delivery (for personal processing service activities, such as healthcare, hair care, financial planning) are some of many options.
Process refers to the activities, procedures, protocols and more by which service-products, including ideas, are eventually delivered to customers. As services are results of actions for, by or with customers, a process involves a sequence of steps and activities for achieving effective delivery, justifying care in adequately managing consumer expectations at each step and activity.
Table 11.5 lists a few process-related tactical activities meriting consideration by ethnic minority businesses in targeting co-ethnic consumers. The entries in the table should be understood as merely illustrative, given the strong link between business activities and associated processes, emphasizing the importance of context.
Table 11.5 Tactical Activities by Ethnic Minority Businesses—Process
| Process–Related Tactical Activities |
|
|
| Value proposition: Primary focus is on the value that accrues to the co–ethnic group. Then, adjust by considering individual needs. Value is in your co–ethnic consumer’s eyes. |
| Co–creation: Provide opportunities for co–ethnic consumers to decide on what service is provided and how. |
| Convenience: Provide home delivery where applicable. |
| Value creation process: Give emphasis to what your business contributes to your co–ethnic group, other than focusing on your own success. |
| Sobriety: Provide the means for your co–ethnic consumers to express their views about the business to other co–ethnic consumers, taking advantage of grassroots marketing. |
| Consistently act co–ethnic: Consider and implement tactics to ensure service delivery processes are consistent with acting in agreement with co–ethnic group expectations. People act in keeping with an ethnic identity. Arguably, "acting ethnic" is a collective performance, aimed not only at belonging to the group, but also as a means of maintaining and reproducing ethnic identity and asserting a legitimate alternative to the hegemonic identity (Kachtan, 2017; Tsuda, 2000). |
| Monitor consumer participation in service delivery. |
| Blueprint all delivery processes: As services are dynamic and experiential, service companies also use a blueprint method called "Service Blue Printing". This process–based method provides a better management of the service in the area of internal and external interaction, makes this transparent and ultimately this is implemented in practice (Bitner, Ostrom and Morgan, 2008). |
A brief discussion of the need to monitor co-ethnic consumer participation in service delivery processes assists in better understanding the issues involved. In addition to operational efficiency concerns in devising service delivery processes, ethnic minority businesses need to account for the specific behaviours, degree of effort and involvement, whether mental, physical and emotional, that relate to consumers’ participation in the production and delivery of a service (Cermak, File and Prince, 1994). Customer participation can be high, medium or low (Bitner et al. (1997). It can involve technical qualities, referring to the resources (e.g. labour and knowledge) contributed by the customer, and functional (interactional) qualities, referring to how the customer behaves (including interpersonal aspects such as friendliness and respect) while participating (Ennew and Binks, 1999).
A crucial aspect to understand is that participation in service delivery can be valued either positively or negatively by consumers. For example, customer participation in healthcare decision-making may cause improved psychological well-being and greater satisfaction (McColl-Kennedy et al., 2012), while other customers may prefer to be told what to do. That is, customer participation can add or detract from the way customers assess a value proposition such that understanding how and why consumers participate in service delivery is a key factor in understanding value proposition creation, customer value creation and, ultimately, what contributes to competitive advantage (Pires, Dean and Rehman, 2015; Rehman, Dean and Pires, 2012), justifying its monitoring.
The primary focus is on processes that reflect cultural competency. Staying in the healthcare context, Reardon (2014) explains that providers need to look beyond overcoming language challenges and to consider other factors, such as social customs, attitudes toward medical care and non-verbal communication as key elements of cultural competency so as to better identify ethnic clients’ needs. Focus should be on consumers’ quality of life, making sure they are asked to engage with friendly service delivery processes that contribute positively to their well-being. This is the case of the user friendly, one-stop shopping place provided by Asian Human Services in Chicago, US, which sought to offer primary health-care services but also mental health services, legal services, employment services, adult education programs and a charter school focused on the needs of immigrant and refugee children.
Ethnic minority businesses in healthcare may consider strengthening their relationship with co-ethnic consumers/patients by visiting them when justified, instead of always asking them to visit their surgery.
The next chapter discusses promotion and personalization tactical activities.
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