Multi-national marketing execs see brand name awareness growing with Latin American middle class

May 11, 2011

As Latin American economies strengthen and incomes rise, the behavior of Latin American consumers is changing and so are their shopping habits.

“Consumption becomes very important as a signal that your family is moving up,’’ said Lovina McMurchy, general manager for Microsoft Latin America’s consumer and online division. “Latin Americans tend to be more status-driven."

“The power of the brand is more important than in the developed world,’’ she said, and Latin Americans tend to have more of an emotional connection to brands.

What these new consumer patterns mean for multinationals trying to sell in Latin America was the topic of a Global Connections seminar organized Friday by WorldCity, a Miami media company.

The biggest shifts in Latin American consumer behavior over the past decade have resulted from the growing middle class, new consumers coming into the market as people move out of poverty and the use of digital connections to get the news out about products, said Patricia Madueño, vice president for branding communications and licensing for Jarden Consumer Solutions International.

Jarden’s brands include Oster, Sunbeam, FoodSaver, Mr. Coffee, Crock Pot and others.

Latin American countries with the largest middle classes include Argentina, Brazil, Ecuador, Panama and Chile but experts say middle classes are growing in other, poorer countries in the region as well.

Jarden has found that once Latin Americans come to the United States they become “acculturated very fast’’ and often gravitate toward products they couldn’t get in their homelands, she said. They buy more expensive cars, are more likely to drink premium liquor brands and purchase more expensive clothes.

“In Latin America, they keep their traditions much more,’’ Madueño said. But, she added, Latin American consumers also are influenced by what their friends and relatives are buying in the United States.

For marketers, Madueño said, there is untapped potential in figuring out “how to use those connections.’’

One of the challenges for those exporting to Latin America is that shipping costs and, in some cases, tariffs make their products premium goods compared to local products.

But Ivan Bargueiras, senior vice president of advertising sales for Discovery Networks Latin America, said “the power of a brand serves as a foundation for premium pricing.’’

Discovery’s Latin American channels, he said, consistently rank tops in viewer satisfaction in the region. Even though Discovery may be a more expensive buy than some of its competitors, its message is that “because the brand has credibility, that quality is shared by our advertisers.’’

Because Windows and Microsoft’s gaming offerings, for example, tend to be expensive by Latin American standards, the company’s strategy has been to “be very smart about targeting,’’ said McMurchy. That means getting the leading group of people in a market to know and “like your product and hope that cascades down’’ she said.

Jarden’s strategy has been two-fold. When it comes to Oster blenders, it has a premium line but also offers products at various price points.

And it also tailors its products to local tastes. Latins, for example, tend to make their rice by frying a sofrito — a dice of vegetables with garlic and oil — then adding the rice and finally the water. Oster came up with a one-stop rice cooker that fries the sofrito and then cooks the rice. That innovation, Madueño said, helped double rice cooker sales.

Now, McMurchy said, the Internet and social media are opening up Latin American consumers to the outside world. Consumers are going online to research products they are interested in buying but are still “very influenced by friends and family,’’ she said. And at the end of the day, McMurchy said, purchases still generally happen at the retail level rather than online.

One study found that Latin consumers tend to message their friends and family when they are still making up their minds about a purchase but once they make the decision they tend to use Facebook to broadcast news of their acquisition, she said. “Facebook is important, but it does not equal social media,’’ McMurchy said.

“Adapting to the technology revolution is fundamental to success’’ in the region, said Discovery’s Bargueiras.

Credit: By Mimi Whitfield, Miami Herald, www.miamiherald.com

Subscribe to our newsletter

Cuenca High Life offers on-line publications, local translated news, and reports about the expat life and living in Ecuador. 

You have Successfully Subscribed!

Subscribe to our Newsletter

Subscribe to our Newsletter

CuencaHighLife publishes Ecuador news daily. Subscribing will guarentee that you never miss the most important news.

You have Successfully Subscribed!