Recommendation #2: Establish a Money Service Center

         Where does one go to transfer money? Some may answer that they go to a bank. However,
this is not the case for the Hispanic consumer where only 1 in 5 Hispanics will use the bank for such a
service.1 So where do the other 4 Hispanics go? Not where we would like them to go.

         We should create a money service center that offers various services such as:
              Check cashing
              Money transfers
              Money orders
              Bill payments
These are just a few services that there seems to be a need for. We could set up a money service
station in the customer service area (which each store already has). The start-up costs would not be
too extensive and by offering these services for a small fee we would be able to make a profit in no time
at all. Check cashing, money orders, and bill payments could all be offered for a small nominal fee, but
the fee for the money transfers would depend on the distance the money is being wired. It will be
easiest to set up a partnership with one of the larger wiring services already in place, such as
MoneyGram or Western Union. They already have many locations in place in Latin America and the
Caribbean; plus there is already a system in place. These greatly reduce our investment capital.

         Hispanics rely on money wiring services to send money home, an estimated $180 billion dollars
to Latin America and the Caribbean. As stated before, 1 in 5 Hispanics don’t use banks for money
transfers which means that they are going through some other place, a competitor of sorts, to wire
money home. It’s believed that 30% of south Florida Hispanics send money home each month.2 We
should offer this service for the convenience. More often than not, a Hispanic woman and her family
will go shopping together.3 It’s a family affair. When they enter a store, there needs to be more than
one reason to enter that store. The more services and products we offer to the Hispanic consumer the
more likely they are to choose our store over a competitor. Also, many Hispanics don’t have the all the
necessary documents to use a bank for the services and the hassle gives them many reasons to go
somewhere else. Many do not trust the market with their “hard-earned” money.4
         This service isn’t just targeting the Hispanic consumer because other types of consumers will use
this service as well. People transfer money all around the world. In addition, there are many people
who don’t have a bank account. Offering check cashing services will get guest into the store with their
money and hopefully they will spend it on some of our products.


         Probably our largest competitor would be Wal-Mart, who already offers these services in almost
all of their locations. They have a partnership with MoneyGram and use only their service. For money
transfers the cost depends on the distance that the money is traveling. Yet for check cashing, it is only a
small $3 fee.
         Many grocery stores also offer a form of service like this. Cub Foods has some stores that offer
money transfers, but they do not a partnership with just one company. Some locations have
MoneyGram while others offer Western Union.
         Banks also offer these services, but many Hispanics are hesitant to trust institutions with their
money due to market issues in their home country. However, Bank of America offers free wire
transfers to Mexico for account holders. They use SafeSend which had 4,500 locations in Mexico. There
are also Bank of Americas in each of the primary target cities: Chicago, Miami, and Los Angeles.


0-16—Younger Hispanic Generation:
     Ability to send money home to family
     Simple way to order money when visiting relatives

16-45—The Older, Integrated Hispanic:
     Convenient way to wire funds home to family in home country
     Helps with bill payment, check cashing and other money services
     Saves valuable time which can be better spent with family

35-60+—The Older, Non-Integrated Hispanic:
     Ability to send money quickly home to family
     Safe and reliable way to cash checks without having to go through a bank
     Saves valuable time which can be better spent with family


                        Strengths                   Weaknesses
                        •it will bring in new       •many compeitors
                         consumers                   already offer this service
                        •the service doesn't just   •it will take space away
                         target one market           from customer service
                        •remains brand loyal to
                         current guests

                        Oppurtunities               Threats
                        •increase profit            •unsure if consumers will
                        •reaching out to a new       switch companies
                         market                     •possible increase in
                                                     fraud issues
                                                    •competitors reactions to
                                                     this additonal service

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