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Sept. 2007: Latin American Marketing |
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Latin American Marketing
Know your market before seeking to sell south of the border.
By Claudio Perez-Korinko
Beach, tropical weather and beautiful scenery—Central and South America have a lot more to offer than just a tourist destination. In fact, with some of the world’s most rapidly growing economies, the countries to the south offer an attractive marketplace for U.S. companies trying to expand internationally.
Factors such as proximity, trade agreements and more stable economies are reasons for U.S. companies to look across the border for market expansion. Given the opportunities, however, it’s not surprising that U.S. companies are facing stiff competition from European, Asian and native companies already positioned in the Latin American marketplace.
The fact that they are late entrants into these markets should not be a deterrent for companies trying to increase their client base in Central or South America. It does mean, however, that the typical American supply-driven strategy will no longer be effective, and it will take more knowledge of the market and the potential customer to be successful.
More Than Stocking the Shelf
You can’t just put your products on the shelf and expect them to move in South and Central America. Strategic Latin American marketing is a lot more complicated than producing a good product and selling it. A poor understanding of the culture and language of their potential customers has left countless companies with quality products stranded at the border.
To be successful, U.S. companies must have an intimate understanding of how the local industry sector works and identify the ultimate buyer for their products. Most importantly, they will have to rely on bilingual and bicultural marketers.
Just speaking two or more languages fluently isn’t enough. Many incredibly successful American companies have stepped on toes because they haven’t done their homework when advertising, promoting and selling in Latin America. Simply translating promotional tactics from English to Spanish is rarely successful.
Because we are so entrenched in our own culture, it’s almost impossible to identify potential issues in Latin American and/or global business. Even between Spanish speakers, there exist some pretty significant cultural differences. Translations that work in Puerto Rico, for example, may not be the right translation for Ecuador. A company must have an inside edge to understand the idiosyncrasies of the target country as well as purchasing behavior of those consumers.
Tips to Succeed
Know your consumers: what they look like, how they dress, what they eat, what’s entertaining and what’s taboo. To build a Latin American brand, a company needs to start with a cross-cultural analysis in order to understand the cultural value system of the target country.
Once you know who’s going to buy the product, the issue becomes how do you get it to them? You must understand the distribution channel.
And finally, you need to know why consumers are buying the product. What cultural attributes make it attractive?
Target Market in Its Terms
Once you have gathered information about your target market, what do you do with it? Revise your product offerings to meet consumer needs and build an in-culture Latin American marketing mix strategy. Target your consumer in their own terms—don’t sell chile peppers to Chileans, for example, or you’ll get the cold shoulder at best—that’s “ají”, Señor! Make your product attractive to each market.
The in-culture promotional strategy helps you:
- Target a specific group of consumers
- Fit the cultural context and the mind-set of the target audience
- Promote your brand at the local level, which generates a better response from the target audience
- Create a point of differentiation against local and international producers
- Build effective price elasticity per segmented market
- Effectively manage the growth of your product brand within the target market
- Build brand loyalty
Along with this strategic marketing approach, the mere fact of being an American company provides an edge. Consumers link America with brand superiority, quality and prestige. This final factor will expedite the process of developing close relationships with Latin American consumers. So, do your homework, and do it soon if you want to take advantage of the burgeoning opportunities in South and Central America.
Claudio Perez-Korinko is the president of IM International Marketing, LLC, a company providing marketing research, strategic and advertising services to U.S. companies entering the Latin American and U.S. Hispanic marketplace. He can be reached at (816) 822-8331.
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