NAPM InfoEdge
February 2001, Vol. 6 No. 2

Supplier Diversity Issues within Supply Management Departments Members Only Content

Supplier diversity programs originally started for compliance reasons in the late 1960s and the 1970s. Government customers required their suppliers to develop subcontracting plans for MBE and/or WBE suppliers. However, the growth of the minority population has given rise to a market-driven case for supplier diversity. In addition to the demographics, minority consumers are younger than the general population. This is significant since younger persons tend to consume more and will be customers for a longer period of time. Minorities tend to be more brand-loyal than the general population, so gaining their loyalty can lead to long-term profits. Minorities also tend to make their buying decision based on how they perceive an organization supports them. For example, The New York Times notes a 1999 study by Yankelovich Partners, a market research firm, that shows 87 percent of Blacks were more likely to buy from organizations that "give back" to their community, either through charitable contributions or business ventures.

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