Marketing Latam - 06 Product

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Global MarketingDoing Business in Latin America

6. Product, Services & Branding

This presentation (and extra material) belongs to Natalia Ceruti´s Global Marketing Course, within the Leading the Way to Success in Latin America Program. Should not be copied, nor reproduced, in full or in parts, without Natalia Ceruti´s permission.

Product


Product Levels

Source: Cateorawww.nataliaceruti.com · [email protected]

Sales and Product Life Cycle


Common Product Life-Cycle Patterns


Source: Kerin, Marketing The Core

Product Life Cycle



New Product Process



Product Newness



Product Adoption


Consumer Goods

General Trends in LA


Green

Disco – Traé tu Bolsa - 2009


Acceptance & Wellbeing

www.happinetics.com.ar

H2Oh – Sentirse bien es una elección 2008


Eternal Youth

Nivea Q10 Plus


Homo Mobilis

! Drink on the go! Entertainment on the go! Beauty on the move


Snack Cult: easy to make

! Paradox: Fast Food vs Fitness (Rica y Sana)

Savora - Nada


Stress Out

Sandero Inflables


Singles


HyperPremium

! Paradox: desire for luxury and intense seeking for discounts (Ford EcoSport)


Real Fact

! Marketing Resistance

! Sampling

! Forum

! Influentials

Schneider Telemarketer


Living the Experience

! Always give more

Movistar - Marcas


Hyperconnectivity

Arnet - Pandas

Services in LA


Marketing in Service Industries


Personal Shoppers


Rentals


Root Causes of Customer Failure


Service-Quality Model


Gaps that Cause Unsuccessful Service Delivery

• Gap between consumer expectation and management perception.

• Gap between management perception and service-quality specifications.

• Gap between service-quality specifications and service delivery.

• Gap between service delivery and external communications.

• Gap between perceived service and expected service.


Marketing Services in LA

• Just make it work is enough

• Everyday stress affects services

• Lack of culture makes it difficult

• No real value on Service (seen as free)

• Informal labour (no punishments)

• Poor regulations

Brand Equity


Brands

Source: Keegan


Brand Equity & Marketing

• How do marketing activities in general—and product, pricing, and distribution strategies in particular—build brand equity?

• How can marketers integrate these activities to enhance brand awareness, improve the brand image, elicit positive brand responses, and increase brand resonance?

Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product

or service did not have that name.


Personalizing Marketing• One-to-One Marketing: Consumers help to add value by providing information.

• Firm adds value by generating rewarding experiences with consumers. • Creates switching costs for consumers• Reduces transaction costs for consumers• Maximizes utility for consumers

• Treat different consumers differently • Different needs• Different values to firm (Current, Future LTV)• Devote more marketing effort on most valuable consumers (and customers)

• Five Steps1. Identify consumers, individually and addressably2. Differentiate them by value and needs3. Interact with them more cost-efficiently and effectively4. Customize some aspect of the firm’s behavior5. Brand the relationship


Personalizing Marketing

http://www.tuestilogalicia.com.ar



• Experiential Marketing• Focuses on customer

experience• Focuses on the

consumption situation• Views customers as

rational and emotional elements



• Permission Marketing (Seth Godin)“Encourages consumers to participate in a long-term interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.”• Anticipated• Personal• Relevant

• Five Steps1. Offer the prospect an incentive to volunteer.2. Offer the interested prospect a curriculum over time, teaching

consumers about the product.3. Reinforce the incentive to guarantee that prospect maintains the

permission.4. Offer additional incentives to get more permission from the consumer.5. Over time, leverage the permission to change consumer behavior

toward profits.




Interbrand Model

• Global Brands• There must be substantial publicly available financial data• The brand must have at least one-third of revenues outside of its country-of-

origin• The brand must be a market-facing brand• The Economic Value Added (EVA) must be positive• The brand must not have a purely B2B single audience with no wider public

profile and awareness

• Latin American Brands• There must be substantial publicly available financial data• The brand´s country-of-origin must be Latin American• The brand must be a market-facing brand• The Economic Value Added (EVA) must be positive• In Holding cases, they should report enough information in order to determine

each individual brand´s financial revenues


World Brands

http://www.interbrand.com


Latin American Brands

http://www.interbrand.com/es/knowledge/branding-studies.aspx


Some Ads

Banco Itaú - Carteles Petrobras


Brand Building in Emerging Markets:The McKinsey Study

• Studied 23 global consumer goods makers in Argentina, Brazil, Chile, China & India.

• Study revealed that companies perform best in vast low-income segment by adopting local branding & organizational strategies, which often run counter to established practice in more advanced regions.

http://www.mckinseyquarterly.com/Brand_building_in_emerging_markets_1317



• Most entered an emerging market by acquiring a local competitor (buying access to local distribution networks & facilities).

• Imported brand managers from developed markets overhauled manufacturing processes & launched expensive marketing campaigns.

• Most integrated acquisitions into parent organization by extending corporate functions and allocating share of those costs

• Almost all had then to raise prices.



• This approach worked for affluent consumers who pay a premium for brand names.

• But it prices products out of mass markets.

• It is common for multinationals to lose half the market share of brands they acquire.



• Local competitors typically manufacture & distribute.

• They have little or no marketing or brand management expenses.

• Far lower costs of materials, packaging and production.

• Margins are comparable to those of global competitor.

• Provide higher margins for retailers, thus increasing their loyalty.

• Local manufacturers can thus maintain profitability – even without tax evasion.



• Global manufacturers should develop two distinct approaches to emerging markets.

• For high-income segment: can continue to pursue sophisticated brand-building strategies.



• For low-income segment, emulate local competitors:• Retain the best local managers: less likely to change products

extensively, focused on cost reduction, operational efficiency and simplicity

• Adhere to local standards of quality & technology (let the consumer define quality)

• Keep operations of acquired local manufacturer separate, sharing only a few functions (eg: purchasing, logistics)

• Parent should act like a venture capital firm does:• Invest in companies that are growing• Preserve their autonomy and lower cost structures• Transfer product ideas between countries


Other challenges in branding

• Legal issues (pre-empting of brand name by 3rd party)

• Meaning, pronunciation (ESPN, HSBC)

• There might be waves of negative public opinion affecting some industries or specific brands. Well established media relations are essential.


Building Strong Brands

• Strong brands have aspirational attraction

• A top-branded jean for a lower income in L.A. is the equivalent of a Rolex for an European upper customer

• When shoddy or unreliable products proliferate, a good brand guarantees quality, even in commodity-like products (example: La Serenísima in milky products)

• Brand building cost induces to support umbrella brands even in food. Examples: Sadia and Arisco in Brazil, Ser and Sancor in Argentina

• Buying local firms and supporting their well-established brands is also a good strategy.



Sources

• Cateora, P., Gilly, M. and Graham, J. (2009). International Marketing, 14th ed. New York: MacGraw-Hill.

• Czinkota, M. and Ronkainen, I. (2010). International Marketing, 9th ed. New York: Cengage Learning.

• Keegan, W. and Green, M. (2011). Global Marketing, 6th ed. New Jersey: Pearson Education.

• Kerin, R., Hartley, S. and Rudelius, W. (2007). Marketing The Core, 2nd ed. New York: MacGraw-Hill Irwin.

• Kotler, P. and Armstrong, G. (2006). Principles of Marketing, 11th ed. New Jersey: Pearson Education.

• Kotler, P. and Keller, K. L. (2009). Marketing Management, 13th ed. New Jersey: Pearson Education.