In marketing its Nova sedan in Latin America, Chevrolet overlooked the fact that in Spanish, "no va" means "doesn’t go." And when the US Milk Board translated its "Got milk?" campaign for Hispanic consumers, it accidentally asked them if they were lactating. People rarely make such embarrassing mistakes twice. Yet in their pitches to the United States’ large Hispanic population, marketers continue to make an error that is more fundamental and more costly than simply mistranslating advertising copy.

Every year, US marketers lose millions—perhaps billions—of dollars in sales by misunderstanding their country’s Hispanic market and clinging to a simplistic notion of its structure. Many see the market as comprising two groups: an isolated segment that speaks only Spanish, and an assimilated English-speaking segment whose preferences are barely distinguishable from those of the general consumer market. Adherence to this "bipolar" view causes marketers to overlook the vast majority of consumers who speak both English and Spanish and make up a third, acculturated segment (Exhibit 1).

The acculturated segment is the largest and fastest-growing of the three groups, currently accounting for 57 percent of the Hispanic market and on course to take 67 percent by 2010 (Exhibit 2). To serve it,...