Jean-François Ouellet
Executive Summary
Many countries have distinct population sets within their borders, some for historical reasons (e.g., Canada) and some because of immigration. For example, in 2002, Hispanics accounted for 13.3% of the total U.S. population, according to the U.S. Census Bureau. These subnational groups are consumers, but they are also increasingly providers of products and services to the marketplace. As many as three million minority-owned companies in the United States made up 15% of the country’s 20.8 million nonfarm companies in 1997. Given this relatively new reality, this study set out to investigate how consumers reacted toward these minority-provided products and services and, more precisely, whether a phenomenon labeled “consumer racism” could affect consumer behavior toward these products and services.
The results of this study show that some consumers indeed exhibit racist sentiments and that these sentiments can affect their judgments about both the quality of minority-made products in their countries and their willingness to buy these products. Moreover, another survey shows that minority-owned companies that provide proximity-based products and services located in highly racist localities have significantly lower performance than those located in localities where consumer racism is less prevalent.
However, three factors appear to mitigate the effects of consumer racism on consumer behavior and firm performance. First is the perceived level of interaction between consumers and the minority-owned company. The less racist consumers believe that they must be when in contact with minorities during transactions with their companies, the lower are the effects. Second is what could be labeled as a product-ethnicity image. Some ethnic groups have a renowned expertise in providing certain products and services (e.g., Mexican immigrants should be perceived as more capable of providing a good chile con carne), a perception that appears to moderate racist consumers’ impulsion not to conduct business with minorities. Third is consumers’ perceived importance of the outcome associated with consuming minority-offered products and services. For products and services of limited importance to the consumer (e.g., inexpensive consumer goods), racist consumers are willing to buy from minority-owned companies anyway, though they still believe that the products are of lower quality.
For marketing managers throughout the world, the results of this research suggest that in countries that are inherently bi- or multicultural and/or are characterized by high rates of immigration, minority-owned firms should overcome adverse effects by deemphasizing product ethnic origin (e.g., through branding strategies). The identified moderators of consumer racism also suggest that minority-owned firms could try to put forward a favorable product-ethnicity image (when applicable), lower the level of perceived interaction with customers (e.g., by providing services online, home pickup/delivery by third-party companies), and limit the risks associated with the outcome (e.g., through warranties, recommendations). For majority-owned companies, this research also highlights the risks to a firm of associating with minority-owned companies in highly racist settings when it is seeking to increase its share of the dominant ethnic group market. In such a case, suggestions range from not associating with minority-owned businesses at all to recommending that partners adopt some of the previously mentioned risk-limiting solutions.
Biography
Jean-François Ouellet is Assistant Professor of Marketing at HEC Montréal. At the time of research, he was also a doctoral student at CERAG (in Grenoble, France) and a postdoctoral scholar at the Massachusetts Institute of Technology. He holds an MBA from Université Laval (Canada) and a Doctorate of Management Science (Marketing) from Université de Grenoble 2 (France). Before his academic career he spent ten years in applied marketing positions—four as an entrepreneur and six as an executive in an international high-tech company. His areas of marketing expertise and interest are in line with this previous experience and focus on product and innovation marketing, branding, and international and cross-cultural marketing. His current research projects include subnational yet cross-cultural consumer and marketer behavior, marketing of innovations and related brand management issues, and new product development and concept validation in the high-technology sector. For more information, visit http://www.hec.ca/profs/jean-francois.ouellet.html.
Journal of Marketing, Vol. 71, No. 1, January 2007
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