From Ethnic Market Niche to a Post-Ethnic Marketplace: A National Profile of Latino-Owned Business Market Orientation

Recent rapid increases in the number of Latino-owned businesses (LOBs) in the United States far outpace the growth in the number of businesses generally. In many ways, the growth and success of LOBs are very important to a healthy business, economic, and entrepreneurial ecosystem nationally. Yet there are few national studies of Latino-owned businesses, their characteristics, or their market orientation. Utilizing a national random sample of 4,024 Latino-owned businesses (LOBs) undertaken by the Stanford Latino Entrepreneurship Initiative (SLEI) in 2018, LOBs are classified by market orientation. The classification segments LOBs along their primary product orientation (Latino or non-Latino) and client (Latino or non-Latino) dimensions. The 2x2 typology creates four product/client classes for LOBs: a) ethnic market niche (Latino customers/Latino product), b) ethnic market experience (non-Latino customers/Latino product), c) ethnic friendly marketplace (Latino customers/non-Latino product), and d) post-ethnic marketplace (non-Latino customers/non-Latino product). The typology of market orientation indicates to whom are LOBs serving and with what (non-)ethnic type of good or service. For the first time, the distribution of LOBs as per their market orientation is reported: 25.9% in the ethnic market niche, 27.2% in the ethnic friendly marketplace, 4.3% in the ethnic market experience, and 42.6% in the post-ethnic marketplace. Group classification is further examined and estimated through a multinomial logistic regression.