Do Hispanics Constitute a Market Segment?

Geraldine Fennell, Consultant
Joel Saegert, The University of Texas at San Antonio
Francis Piron, The University of Alaska Anchorage
Rosemary Jimenez, The University of Texas at San Antonio
ABSTRACT - Proponents seem not to have examined the implications for hispanics or marketing strategy of the notion that hispanics constitute a "market segment." A hispanic "market segment" implies that hispanics are homogeneous, and the implied recommendation that marketers should target such a segment leaves many questions unanswered, including attributes of the offering or, even, how to go about selecting such attributes, as well as the implications of such special targeting for the firm's overall marketing effort. The marketing concept states that brands are formulated on the basis of identified customer wants. Wants vary as a function of heterogeneity in the contexts in which prospects engage in a focal activity. Such contextual heterogeneity occurs among and within individuals and is not illuminated by the labels of demographic classes. Plainly, there is no basis for assuming that hispanic wants are homogeneous, that hispanics do not share the full range of human wants found among nonhispanics, or that producers may devise a simplistic strategy to appeal to hispanics.
[ to cite ]:
Geraldine Fennell, Joel Saegert, Francis Piron, and Rosemary Jimenez (1992) ,"Do Hispanics Constitute a Market Segment?", in NA - Advances in Consumer Research Volume 19, eds. John F. Sherry, Jr. and Brian Sternthal, Provo, UT : Association for Consumer Research, Pages: 28-33.

Advances in Consumer Research Volume 19, 1992    Pages 28-33


Geraldine Fennell, Consultant

Joel Saegert, The University of Texas at San Antonio

Francis Piron, The University of Alaska Anchorage

Rosemary Jimenez, The University of Texas at San Antonio


Proponents seem not to have examined the implications for hispanics or marketing strategy of the notion that hispanics constitute a "market segment." A hispanic "market segment" implies that hispanics are homogeneous, and the implied recommendation that marketers should target such a segment leaves many questions unanswered, including attributes of the offering or, even, how to go about selecting such attributes, as well as the implications of such special targeting for the firm's overall marketing effort. The marketing concept states that brands are formulated on the basis of identified customer wants. Wants vary as a function of heterogeneity in the contexts in which prospects engage in a focal activity. Such contextual heterogeneity occurs among and within individuals and is not illuminated by the labels of demographic classes. Plainly, there is no basis for assuming that hispanic wants are homogeneous, that hispanics do not share the full range of human wants found among nonhispanics, or that producers may devise a simplistic strategy to appeal to hispanics.


Judging from the recent number of journal articles and conference presentations on the topic of "marketing to hispanics," formulation of special marketing strategy for hispanic consumers would seem to be widely recommended by marketing theorists. However, a recent paper by Fennell and Saegert (1990) questions the logic of "segmentation," i.e., devising a single marketing strategy to appeal to a particular ethnic group, or indeed, to any class defined on the basis of a (relatively) enduring personal characteristic (e.g., demographic or personality trait, geographic location, or product ownership). This argument, based on Fennell's marketing model (e.g., 1982a, 1982b, 1985, 1989), takes as a point of departure the marketing concept, i.e., the notion that marketing strategy proceeds by systematically assessing the wants and desires of prospects, selecting brand attributes to address such wants and desires in a competitive context, while aiming to obtain a satisfactory return on one's investment.


Many factors contribute to recent interest in the notion of a "hispanic" (or other ethnic group such as blacks, orientals, etc.) segment. Unquestionably, hispanics make up a large part of the US population and contribute richly and distinctively to the character of the nation as a whole. Moreover, hispanics are recognized as minority group members who historically have been at economic and/or social disadvantage compared to majority group members. Thus, much attention is focused on both the cultural contributions made by hispanics and other ethnic minorities, as well as the need to provide mechanisms to prevent social injustice and discrimination. However, none of these facts argues for regarding hispanics as a market segment.

Those who would regard hispanics as a market segment contribute, doubtless unwittingly, to confused thinking about both hispanics and marketing strategy. It may be helpful to reflect on the concept of market segment. In short, it is necessary to think of markets as segmented because demand is heterogeneous, and the producer's decision, i.e., in a competitive context, choosing brand attributes to appeal to at least some prospects, requires reducing the heterogeneity of varied individual contexts to a manageable number of homogeneous segments.

Regarding markets as comprising "segments" simplifies the producer's task of responding to the varied circumstances of the prospects for a product. On the demand side, there are individuals in a population who perform a particular activity, e.g., feed a dog, attend live theater. Having regard to such prospects for dog food brands and live theater performances, respectively, the context in which they engage in the focal activity varies across individuals, and within individuals over time, and what they value in an offering varies accordingly. On the supply side, looking for a return from investing his/her resources, there is a producer who wants to make offerings that at least some prospects will (repeatedly) pay for. The contexts in which prospects perform the focal activity are outside the producer's control, but the producer has control over the attributes of the offering. S/he hopes to choose attributes that at least some prospects will want on at least some occasions when they engage in the focal activity. Considering how to create the offering, the producer faces a wide range of options, and must choose in light of prospects' wants and competitive offerings. This enormously complex task is facilitated by investigating the contexts in which prospects perform their focal activity and reducing complexity on the demand side to a manageable number of roughly similar kinds of context. These are the segments of demand. When that information is combined with information on brand liking/use within segment, the resulting picture shows how the market is segmented. Empirically, both demand and market segments are independent of demographic classification.

For our purposes here it is obvious that a market segment implies within-segment homogeneity as regards wants. Accordingly, to suggest that hispanics, or any ethnic group, constitute a market segment implies that hispanic wants and desires are homogeneous within their ethnic group. Of course, no one explicitly argues this and, in fact, many authors emphasize the need to distinguish among subgroups of hispanics, most frequently, for example, as a function of their country of origin (e.g., Mexico, Puerto Rico, Cuba, or other hispanic countries). Nevertheless, it is easy to see that distinguishing among such subpopulations merely extends a presumption of homogeneity to another level; that is, it presumes that Mexicans, Puerto Ricans and Cubans are homogeneous within their respective subgroups, an assumption, again, that none argues explicitly, or examines.

A related issue is the implied recommendation that a marketer should design a marketing strategy to "appeal to hispanics," i.e., the notion that it is possible to appeal to an entire ethnic group by a single marketing strategy. Let us examine this by considering formulating a brand to appeal to a given ethnic subgroup. Even searching for an example of such a brand strategy runs the risk of perpetuating ethnic stereotypes, an outcome to which advocates of "ethnic segmentation" appear oblivious. However, in the interest of illustrating the illogic of "formulating a brand for hispanics," we must conjecture a stereotypical trait. For example, a recent article has maintained that a major cosmetics firm employed a "hispanic market agency" (Brookman 1988), presumably to "target" prospective hispanic make-up buyers. Assuming some characteristic that may be pertinent to hispanic customers, for example, darker skin shade, let us imagine that the manufacturer considers producing a brand specifically formulated for this subgroup. However, the producer would undoubtedly be aware that dark skin tones are not present in all hispanic prospects, and moreover are also found among nonhispanics. Thus, identifying an ethnic group as a market segment fails to deal both with the heterogeneity of conditions within, and similarity of conditions across, ethnic groups. Finally, and perhaps most important in terms of marketing strategy, deciding to formulate a brand for dark-skinned prospects (hispanic or otherwise) leaves unaddressed prospects' heterogeneous motivations concerning the focal behavioral domain, which would be personal grooming in the present example (e.g., coping with dry/oily/blemished/sensitive skin, symbolic/aesthetic/intellectual considerations), not to speak of preferences among product forms and package sizes. As Fennell (e.g., 1990) points out, desirable attributes in brands vary, across and within individuals, as a function of enduring and transitory elements in the contexts for engaging in the focal activity. In line with the marketing concept, i.e., brands are formulated to respond to a subset of prospects' wants, the notion of a hispanic, or any other ethnic, "market segment" is an oxymoron. Similarly, the notion that it is possible to "appeal to hispanics" by formulating "the hispanic brand" or even "the hispanic strategy" does a disservice to marketing professionalism, no less than to the ethnic group that is to be thus stereotyped.


Much of the confusion regarding hispanics as a "market segment" may follow from inappropriate terminology widely referring to ethnic and other demographic subgroups as "market segments." In fact, market segmentation reflects variability, within domains of human activity, in the circumstances that result in specific human wants, (e.g., Fennell 1982b). As noted, specific human wants, i.e., at the level of individual acts and corresponding market offerings, are not reflected in demographic or other enduring personal characteristics, which cut across domains of activity. Recognizing such heterogeneity of human wants and desires within activity domain, producers have understood that "responding to customer wants" leads to a variety of brand formulations within a single product category. Opportunities for brand differentiation result from the varied circumstances, within a particular domain of activity, for which prospects may choose a brand to minister to their wants.

Developing a marketing strategy follows a number of steps such as those outlined elsewhere (e.g., Fennell 1982a), which it may be useful to recap here. Faced with the range of everyday human activities that include, e.g., "removing: soil from clothes, sensations of hunger, various kinds of pains, aches, and insecurities, as well as providing stimulation for the mind and pleasure for the senses" (Fennell and Saegert 1990), a producer identifies a domain that corresponds to his/her productive interest. Within that domain, the producer hopes to be able to put productive resources to good use by creating a brand that some prospects will favor relative to competitive offerings.

Fennell's model outlines categories of motivation that lay the groundwork for differentiating brand offerings and, more broadly, developing marketing strategy. These heterogeneous contexts for an activity, found across ethnic and other demographic categories, are the source of market segments, and of the attributes that segment-appropriate brands should possess. Briefly, the model describes five simple and two complex motivational classes that help marketers to identify the heterogeneous contexts in which people perform an activity. These contexts are illustrated as follows for an oral hygiene activity:

...observing an individual engaged in some activity related to oral hygiene, such as "brushing teeth," and bearing heterogeneity in mind, one may conjecture that the individual may be escaping from the unpleasant process of bacteria in the mouth creating bad breath, or damaging teeth, or from the ugliness of teeth discolored or stained from smoking cigarettes/drinking coffee; or preventing imagined criticisms from oneself/significant others on grounds that one is lazy, or careless of personal hygiene, or lacking in consideration; or maintaining a system that needs only routine attention; or exploring an interesting question related to brushing techniques; or enjoying the sensory experiences associated with bristle on gums, taste and tingle of dentifrice, and the sight of glistening pearly teeth; or doing any of the preceding while trying to ignore the discomfort of water on sensitive teeth or painful gums (conflict); or while feeling discouraged at the unsatisfactory result that one has previously obtained from one's efforts (frustration). Accordingly, the qualitatively different kinds of circumstances to be found in the establishing operations of instrumental conditioning help a researcher to generate candidate personal and environmental elements that may be operative in any individual instance or on some proportion of a universe of occasions (Fennell and Saegert, 1990).

Elements such as the preceding guide the qualitative researcher in obtaining the necessary information from prospects for quantification in large scale surveys. As noted, to simplify the brand positioning decision, marketing researchers form segments of demand and, having regard to prospects' information about and reactions to competitive offerings, market segments (e.g., Fennell 1978, 1982a). The producer's positioning decision reflects a judgment concerning how productive resources can be used to best advantage by responding to some region of demand that appears to be not well served by existing offerings.


Researchers who have studied hispanic consumer behavior have offered a number of justifications for doing so. Some of these include the large number of hispanics in the US, empirically found differences between hispanics and others (e.g., nonhispanics/general population), and hispanic preference for Spanish language media. As will be seen, however, none of these justifications for studying hispanics as consumers establishes a basis for regarding hispanics as a market segment.

Demographic Differences

Frequently, researchers have pointed to demographic characteristics of hispanics as the basis for developing marketing strategy (e.g., Valencia, 1989). These include, for example the large number of hispanics in the US, their comparatively high growth rate, large average family size, disproportionately low average age, etc. Also, the argument is made that even though their economic status may presently be lower than that of the population at large, hispanics' income levels are rising rapidly, thus providing them new wherewithal to purchase producer's brands. Such characteristics, in fact, do not provide a basis for developing brand strategy. Take family size, for example. Knowing that "hispanics have larger families than average" might be considered as guiding a marketer to position a brand accordingly, namely for "large hispanic families." Characteristics of such a brand might include, for example, larger package sizes of foodstuffs, or greater durability of furniture (to lessen breakage by youngsters). But "large family size" provides no information relative to other aspects of the focal activity and hence, no guidance for choosing brand attributes in regard to the central task that the brand is to perform. For example, knowing that some hispanic prospects have large families provides no information about whether such families, in regard to the focal activity, are seeking to escape from current problems, prevent potential problems, maintain a stable state, avail of opportunities to explore, or to enjoy sensory pleasure. Moreover, is there any reason to believe that "large hispanic families," as regards a focal activity, are homogeneous in their motivations and different from large nonhispanic families? In other words, the motivations of prospects are still not addressed by knowing yet another demographic label. Furthermore, not all hispanics have large families, so a recommendation to regard hispanics as a market segment has now been transformed into one to regard hispanics with large families as a market segment without, however, achieving the homogeneity regarding wants that is the defining feature of market segment.

Different Brand Loyalty

A number of studies have been produced that identify particular consumer behaviors as a basis for differentiating hispanics from nonhispanics. One celebrated example is the argument that hispanics are found to be more brand loyal than the general population (e.g., Deshpande, Hoyer and Donthu 1986), although the data are mixed as to whether this is actually the case (Saegert, Hoover and Hilger 1985). According to the brand loyalty claim, to a greater degree than nonhispanics, hispanics are believed to choose the same brand in repeated purchases, and to have strong positive feelings for familiar brands. Here again, it is difficult to identify a marketing strategy that proceeds from such findings. A marketer might reasonably ask, given that hispanics are brand loyal, what characteristics are implied for brand development? The answer is plainly, none. Further research along the lines already described is needed and will reveal heterogeneous wants among hispanics. Furthermore, what strategy is recommended for gaining new customers? If a particular producer's brand is not currently favored by hispanics, the indicated strategy might simply be to refrain from making special efforts to promote that brand to hispanics. Marketers rarely choose to challenge on a competitor's strongest ground, e.g., the brand loyal customers.

Different Attribute Ratings

Another example of distinctive hispanic consumer behavior being taken as a basis for regarding hispanics as a "market segment" is presented by O'Guinn and Faber (1986). These researchers asked hispanics and nonhispanics to rate the importance of attributes that they might consider in buying two products, laundry detergent and a TV set. They found that compared with nonhispanics, hispanics rated two attributes (price and friend's brand preference) as more important for laundry detergent, and seven of eight attributes as more important (e.g., price, brand, quality, and credit) for television sets. Putting aside the issue as to whether it is appropriate to compare the means of the two groups in this manner (see Wood and Howell 1991 for arguments to the contrary), producers may again ask how such information can contribute to their marketing efforts. Designing and promoting a brand that features "low price" as a predominant attribute would not appeal to hispanics for whom price was unimportant (it is surely not suggested that such hispanics are nonexistent), although it would, of course, be interesting to nonhispanics for whom low price is a consideration. And again, besides low price, what attributes should the brand possess?

Spanish Language Preference

Another unexamined reason for recommending ethnicity as a basis for marketing strategy is the characteristic preference for the Spanish language by many hispanics. For example, it is recognized (O'Guinn and Meyer 1983) that many hispanics use Spanish language media, primarily radio and television and thus, for a marketer to reach this "market segment," advertising messages must be communicated in Spanish. There are at least two ways to consider the issue here: (1) as a purely business decision, and (2) as a decision guided by considerations of social justice or public relations.

(1) Considering first a purely business approach, the advertising decision is properly just one aspect of overall marketing strategy. On the assumption that within-activity wants are similar across ethnic groups and that Spanish speaking targets will not be reached other than by Spanish-language messages, it comes down to conducting a media buy analysis, applying the same criteria that are applied for the campaign generally. Based on those criteria, analyses show how available funds are best spent--on general media, or some mix of general and special language media (including various mixes of special language media, given that there are a number of ethnic groups, some of whose members may not understand English). It should be clear, however, that one is not thus targeting "hispanics," but rather attempting to reach the Spanish speaking prospects who fall into one's targeted segment. (For example, if the marketing analysis described earlier shows that the best national strategy for our brand of laundry detergent is to be formulated for light laundry of delicate fabrics, then our national media selection is going to seek media vehicles believed to offer a high concentration of individuals who want such attributes. Extending the media buy to include Spanish speaking targets attempts, similarly, to locate hispanics who do light laundry.) If it seems that including Spanish speaking targets is feasible within the budget on a ceteris paribus assumption, before giving the final "go" decision, the assumption should be examined. For example, the presence of a well-entrenched regional or ethnic brand that has been formulated for light laundry might argue against the decision because, presumably, the national campaign is not geared to challenge a well-entrenched competitor. Thus, management might decide that although Spanish speaking targets can be reached economically, such funds would be misspent in that the chances of achieving a return on the investment are reduced because of the special competitive conditions existing within the hispanic market. (To keep the analysis simple, we are making the point here for the most straightforward case, i.e., where it is assumed that some hispanics simply will not receive our message unless it is in the Spanish language. Given appropriate documentation, we would extend the present analysis to cases where it is shown that message registration among targets is likely to be improved because of, e.g., greater familiarity with a mother tongue than with a second language, or greater receptivity engendered by feelings of national pride or ego enhancement due to being addressed in one's mother tongue. We stress, however, that we do not regard anecdotal evidence acceptable and that we would require research submitted in support of such claims to meet commonly accepted professional standards.) (2) Secondly, if one has decided, for social justice or public relations reasons, that regardless of return, it is proper to divert funds to special language media, the economic implications of so doing should nevertheless be estimated.

Whether as a purely business decision (i.e., expected return on investment), for reasons of social justice, or, more ambiguously, for public relations considerations, if management decides to use Spanish-language media, the translated advertising message should be checked for communicative problems to achieve good registration of the message and to avoid running afoul of culturally-given meanings that might be counterproductive (Valencia, 1983). The attentional aspects of the ad should also be checked to ensure that it is well designed to achieve processing by the targeted segment within hispanics (Fennell 1979). Note that the present analysis does not suggest changing the ad's essential message. Before such a change could be made on sustainable grounds, it would be necessary to redo the marketing analysis described above, but now defining one's prospects as hispanics who engage in the focal activity. The likely cost of such an analysis could well approach that of the original nationally based studies, and should be assessed in light of the number of ethnic groups that are candidates for such special treatment.

It must be fairly clear by now that the cause of "hispanic marketing" is not well-served by such studies reported in the "marketing to hispanics" literature. Most basically, a research design that is chosen to show differences between hispanics and nonhispanics is irrelevant to how a producer should proceed in trying to find favor with hispanics, and it establishes nothing to show a producer that his/her scarce resources are going to be well spent by being diverted to a special hispanic effort. Even if "hispanics" differ from "nonhispanics" on a particular want, no information is provided about the extent to which the want is well satisfied by the brands available to hispanics. Between-group differences, even when they achieve statistical significance, are far removed from the considerations that are relevant to a producer. An offering stands or falls depending on how well its attributes, compared with those of competing offerings, match the concrete physical and psychological contexts in which individual human beings pursue a task or interest. Goods/services are judged, chosen, used and evaluated, not by "between group differences," but by individual human beings, hispanics or nonhispanics, in real world circumstances.

Consider the case of a producer who has already decided to try to make inroads into the "hispanic market." The producer's task is to create and announce the availability of an offering that some hispanics will find appealing, relative to their other options, so that they will repeatedly select that offering over the competition, and do so at a rate that gives the producer a satisfactory return on investment. What is going to be relevant here are exactly the same considerations that any producer deals with in deciding to try to gain a share of some market--identify the characteristics of the contexts in which the focal activity is performed, form the segments of demand, investigate how well such segments are being served by existing brands, judge the probability that the producer can successfully claim to be more appropriate than the competition for some subset of the contexts in which people (hispanics here) perform the focal activity (e.g., Fennell 1982a). In other words, the hispanic market is, from the point of view of marketing analysis, exactly on the same ground as the national, or black, or oriental markets. At the widest definition, a market consists of prospects for a producer's offering--people in a naturally-occurring population (or population subgroup), who are likely to be interested in using a particular category of good/service (e.g., dog food, live theater). Such interest is usually indexed by their engaging in some activity for which the category of good/service could conceivably be used (e.g., feeding a dog, regularly patronizing entertainment outside the home). A market segment consists of individuals within a market, i.e., a subset of such prospects, whose wants regarding the focal activity are sufficiently alike as to be addressed by the same brand formulation (physical and psychological).

We are now in the fourth decade of an era in which marketers act on the assumption that the wants of individuals who engage in a particular activity, who form a "market" in the broadest meaning of that term, are heterogeneous to the extent that they cannot be well-served by a single brand formulation. Recall, again, that a marketer does not hope to appeal to the entire national population: for any product the market is always smaller than a naturally-occurring population. A first cut through a naturally-occurring population gives the outside limits of a market, for convenience usually stated in terms of individuals who perform some activity. Moreover, within a market as defined, a producer does not hope to appeal to all prospects. Similarly, no one producer can count all hispanics as prospects, only those who engage in a particular activity and, within that group, a producer does not expect to find favor with all hispanic prospects. In a word, a producer does not plan to appeal to the entire national market, or to the hispanic, or black, or oriental, market by means of an undifferentiated marketing effort. And beyond the market as defined, there are other members of the national population, and of the hispanic, black, and oriental populations, who are not in the picture for any individual marketing effort.


As to wants, markets are heterogeneous, and market segments are homogeneous. Accordingly, there is no sense in which it is proper to speak of a hispanic, or black, or oriental market segment. Doing so tends to reinforce the notion that ethnic groups can be stereotyped. To suggest that producers and advertisers can readily "appeal to" an ethnic group by some simplistic marketing gesture does disservice both to ethnic groups and to marketing practice.

Such a conclusion says nothing about the value of hispanic studies in general, nor does it seek to discourage interest in studying cultural diversity and pluralism. Moreover, it does not minimize concern for addressing minority disadvantage. Rather, the intention in the present context is to focus on maintaining our integrity as consumer researchers and marketers. To that end, we must try to ensure that our terminology with reference to marketing strategy is coherent, and our recommendations to management are such that we can stand behind, as scientists and practitioners.

In that connection, issues under a number of headings should be disentangled, including:

Social justice According hispanics and other ethnic groups their due place as part of the fabric of American life,

Marketing science Developing marketing science and formulating guidelines for marketing strategy that enable producers to use productive resources to good advantage in serving people's wants,

Marketing practice Equipping marketing practitioners with analytic tools to use in advising management and clients regarding--

(1) the claims made and research presented by representatives in support of diverting funds to ethnic (language) media;

(2) the bottom line implications of allocating funds, to according ethnic groups their due place as part of the fabric of American life on social justice grounds, as well as where the line is blurred between social justice and responding to pressure for reasons of public relations; the implications of alternative ways of achieving social justice/public relations in the context, e.g., use of minority spokespersons, buying space/time in minority media, etc.;

(3) legitimate, sustainable arguments to use in approaching advertisers in order to achieve due recognition for ethnic groups as part of the fabric of American life.

As marketing professionals, we are properly called upon to advise management, business and nonbusiness, in regard to the implications of engaging in marketing in a pluralistic society. In this paper, we have but traced the outline of the kind of formulations and analytic tools that must be developed. We look for further developments toward achieving these goals.


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