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Inward and Outward Perspectives in South Amercian Context: Brand Value and Global Brand Strategies

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Prof. M.H. Ogasavara - V SGBED International Research Symposium

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Inward and Outward Perspectives in South Amercian Context: Brand Value and Global Brand Strategies

  1. 1. Mário Henrique Ogasavara, Ph.D. ESPM Sao Paulo, Brazil 因 mario.ogasavara@espm.br Dec em ber 2015 The 5th International Research Symposium, Nanjing, China Building and Promoting Brands in Emerging Markets
  2. 2. South America 2
  3. 3. WHAT IS THE FIRST THING THAT COMES TO YOUR MIND WHEN YOU HEAR ABOUT ''SOUTH AMERICA'’?
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  10. 10. NOW... DO YOU KNOW ANY SOUTH AMERICAN BRAND?
  11. 11. 11 ... Difficult?
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  14. 14. 14 • Top 100 o 15 countries o 17 sectors o Brand value: US$ 1,71 trillion o Top 4 sectors • 50% brands • 61% brand value • Automotive • Technology • Financial Sector • Fast-moving Consumer Goods o Top 3 countries • 69% brands (USA; GER; FRA) • 76% brand value (USA; GER; JPN) o #1 = USA (# 52%; $ 67%) o China • 2 brands = 0.5% brand value • Technology “0” South American brand
  15. 15. 15 • Top 100 o 14 countries o 20 sectors o Brand value: US$ 1.70 trillion o Top 4 sectors • 54% brands • 60% brand value • Technology • Automotive • Financial Services • Consumer Packaged Goods o Top 3 countries • 74% brands (USA; GER; FRA) • 83% brand value (USA; GER; JPN) o #1 = USA (# 58%; $ 70%) o China • 0 brand “0” South American brand
  16. 16. 16 • Top 100 o 15 countries o 20 sectors o Brand value: US$ 3.27 trillion o Top 4 sectors • 54% brands • 62% brand value • Technology • Telecom providers • Regional banks • Retail o Top 3 countries • 69% brands (USA; CHI; GER) • 83% brand value (USA; CHI; GER) o #1 = USA (# 49%; $ 66%) o China • 14 brands (13%) • Regional banks; Technology “0” South American brand
  17. 17. 17 • Top 100 o 15 countries o 22 sectors o Brand value: US$ 2.41 trillion o Top 4 sectors • 52% brands • 58% brand value • Technology • Telecoms • Banks • Retail o Top 3 countries • 67% brands (USA; JPN; CHI) • 72% brand value (USA; CHI; JPN) o #1 = USA (# 46%; $ 54%) o China • 11 brands (9%) • Banks and telecoms 1 South American brand! Bank (#112 Bradesco)
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  20. 20. INWARD PERSPECTIVE
  21. 21. • 13 Countries • Area o 17,8 million km2 o 12% of earth surface • Population o 414 million o Brazil +/- 50% • GDP o US$ 4.1 trillion o 72% of Latin American GDP • Languages o Spanish (majority countries) o English (Guiana) o Dutch (Suriname) o French (French Guiana) o Portuguese (Brazil) 21 2015 2030 2050 Source: 2015 Population Reference Bureau – World Population Data Sheet 350 400 Population (in millions) 496 464 500 414 450 Source: IMF Data (2015) 1.000 0 6.000 5.000 4.000 3.000 2.000 Nominal GDP (Billions of US$) 7.000 Emerging and Developing Europe Latin America and the Caribbean South America
  22. 22. 22 • Well developed local brands • Domestically companies with regional operations • Consumer goods • Urban population (80%) • Middle class growth • 仓Brand value change (2%) • Top 50 - US$ 132 billion • D Country risk, GDP, Company’s market value
  23. 23. 23 Source: BrandZ Top 50 Latin American Brands 2015
  24. 24. Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; 24 Most popular brands and local icons • Beer, banks, retail and telecom providers • Brand strategies focused on the massive middle class and low-end population • Exploring emotional attributes associated with local needs
  25. 25. Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; BrandZ Top 100 Most Chinese Brands (considering the Top 50). BrandZ Top 100 Most Valuable Global Brands (considering the Top 50) • South American brands • More associated with daily consumption products of middle class • Exploring image of friendship • Enjoyment (parties, fun, festivals, etc) • Bank services 25 c c c c
  26. 26. Area 756,000 km2 17,8 million (2014)Population Pop. growth rate 0.8% (2010-2015) Life Expectancy 80 years (2013) Unemployment 6.4% (2014) GDP (2014) US$ 258 billion GDP per capita US$ 14,520 (2014) Growth rate 1.9% (2014) Share in regional GDP 5.4% (2014) Net FDI US$ 9.9 bi (2014) 27 Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; • Most valuable brands • Long-lasting history in the market • Balance between benefits and price • Development of new formats, new sales channels and service center or new sizes and varieties • Brand strategies • Chilean Premium • Restoring the value of native cultures • Life in the neighborhood • Focus on quality • Digitalization
  27. 27. Dafiti • E-shopping • Great shopping experience • Low prices • Wide variety • Possibility of returning the product 28 Emporio La Rosa • Ice-cream shop • Born in a traditional neighborhood in Santiago • Become a renowned coffee shop chain • Solid image allowed the presence of its coffee shops to reach even inside shopping malls without losing their neighborhood touch Tika • Handmade chips • Back to the basic concept • Local quality products • Sustainability • Experience connected with consumer
  28. 28. COLOJ BIA
  29. 29. Area 1.14 million km2 48,9 million (2014) Population Pop. growth rate 1.3% (2010-2015) Life Expectancy 74 years (2013) Unemployment 10.1% (2014) GDP (2014) US$ 377 billion GDP per capita US$ 7,720 (2014) Growth rate 4.6% (2014) Share in regional GDP 7.9% (2014) Net FDI US$ 12.1 bi (2014) 30 Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; • Colombian economy • Overall healthy development • High investment activity • More competitive exchange rate • Single digit unemployment rate • Emerging middle class • Sacrificing products in the basic market basket to spend on luxury products, entertainment or clothing • Brand strategies • Alcoholic beverages • Play a more and more decisive role in media plans • Foreign brands • More brands addressing consumers • But fewer brands in consumers’ minds • Digital environment • From researching online to purchasing online
  30. 30. 31 Águila Beer • Not only meet the basic needs • But creating closeness by generating emotional responses in their potential consumers • Águila Girls • “Our soul is in this” • More occasional for consumption • Águila Cero (alcohol free beer) Jet Chocolate • Candy • Very popular among Colombians • Colombians were asked: what best symbolized their country? 1. Flag 2. National anthem 3. Jet chocolate!!
  31. 31. Area 1.29 million km2 30.8 million (2014)Population Pop. growth rate 1.1% (2010-2015) Life Expectancy 75 years (2013) Unemployment 6.1% (2014) GDP (2014) US$ 203 billion GDP per capita US$ 6,594 (2014) Growth rate 2.4% (2014) Share in regional GDP 4.3% (2014) Net FDI US$ 7.8 bi (2014) 33 Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; • Peruvian economy • Highest economic peal of the previous 60 years • Three-fold increase of its GDP over the last 15 years • 1 million families have overcome extreme poverty • 2 digit growth in the consumption of many basic basket products • Construction sector 仓12% average annual rate in the last 10 years • Brand strategies • Peruvian brands with high affinity, bonds and history with local consumers • Building new brands in Peru is almost a handicraft, a task that requires patience, clear strategies, perseverance and consistency
  32. 32. 34 Cerveza Cristal • Produced by the largest beer company in Peru: Backus • “Peruvians’ beer” • Celebrate national unit • Values • Diversity, Harmony, Positivity • Triggers strong consumer passion: soccer • Club sponsorship • Naming team as “Sporting Cristal” Interbank • Trigger closeness with consumers • Generate an emotional relationship with their target audience • Focusing on their understanding • Identification with users’ difficulties • Values • Digitalization • 1st to increase their digital campaigns and create more salience, while favoring the use of the internet and mobile devices to make transactions
  33. 33. ARGENTINA 糕
  34. 34. Area 2.78 million km2 41.8 million (2014)Population Pop. growth rate 0.8% (2010-2015) Life Expectancy 76 years (2013) Unemployment 7.4% (2014) GDP (2014) US$ 404 billion GDP per capita US$ 12,594 (2014) Growth rate 0.5% (2014) Share in regional GDP 11.3% (2014) Net FDI US$ 4.5 bi (2014) 36 Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; • Argentinean economy • Main economic indicators are not showing a clear reaction • Private sector is not creating many new jobs • Tax pressure and exchange rate costs are shrinking the margins • High inflation rate - consumer creativity to protect their purchasing power (saving not spending) • But also opportunities… • The highest broadband and smartphone penetration levels in Latin America • Ranks third globally in the use of social media networks
  35. 35. 37 Villa del Sur Levitté (Danone) • Size matters and in-home consumption • Pushed 2.25 liters bottles instead of the traditional 1.5 liters pack • Savvy consumer who looks for the beast deal • Lower price per liter H2oh! (Pepsi) • “Tables have changed”! • Way to gain differentiation: humor • Jokes and funny situations that everyone can relate to • A very particular member of a conservative family causes trouble in his attempt to bring new flavors of H2oh! to the table
  36. 36. '1 ZV'H8
  37. 37. Area 8.51 million km2 202 million (2014) Population Pop. growth rate 0.8% (2010-2015) Life Expectancy 74 years (2013) Unemployment 4.9% (2014) GDP (2014) US$ 2.3 trillion GDP per capita US$ 11,612 (2014) Growth rate 0.1% (2014) Share in regional GDP 49.2% (2014) Net FDI US$ 66 bi (2014) 39 Source: Millward Brown and BrandZ; BrandZ Top 50 Most Valuable Latin American Brands 2015; • Brazilian economy • Large size but almost zero growth • FIFA World Cup and presidential election • Uncertainty in political and economical issues • Corruption scandals (Petrobras) • But … • Good news from brands from • Beer, Food & Personal Care 仓19% value • Financial Sector 仓26% value • Attraction of middle class consumers • Banks and beers • Changing consumer behaviors • Domestic tourism • In-home lunch or dinner
  38. 38. Mario H. Ogasavara © 40 International Business in Brazil Skol • Produced by the largest beer company in Brazil: AmBev • Creating closeness and triggers strong consumer passion • Friendship • Soccer • Beautiful women • Entertainment • Jokes and funny commercials
  39. 39. 41 Bradesco • 2nd largest private bank • Branches in most of Brazilian cities • Focuses on middle class • Digitalization • Internet banking • Use facility • Mobility • Bradesco Prime • Differentiation • Unique experience • Personalized services
  40. 40. “In times of recession , the consumption of these products tends to grow , with consumers spending part of their income for items that do well and encourage self- reliance" Against economic crisis, Brazilian purchase more cosmetics and sales rise 6% in one year Crisis boosts sales of cosmetics 42
  41. 41. Source: Brazil & Partners, Investment Opportunities 2005 Brazilian Government 43
  42. 42. Source: Euromonitor (2015); RSP = Retail Selling Price; 44
  43. 43. Natura • Company Image • High reputation among Brazilians • Largest cosmetic company in Brazil • Sustainability • Agro-extractive community support • Sales • No physical shop • Direct sales (1.6 million sales force) • Online sales associated with direct salespeople • Brand strategy • Nature • Extract local raw materials (Amazon) • High quality products • Environmental friendly packages • Brazilian culture 45
  44. 44. O Boticário • Sales • +3,200 shops (franchising) • Direct sales (+200 thousands sales force) • Brand strategy • Quality • Beauty • “Life is beautiful , but it can be gorgeous” 46
  45. 45. Price Value Perception 47
  46. 46. L’Occitane au Brésil Facts • Start 2013 • 50 sales points Brand strategy • “Made in Brazil” • Brazilian raw materials (different regions) • “Brazilianity” • Nature • Life style • Enjoyable • Brazilian arts 48
  47. 47. • Brazilian Market • Traditional Food and Beverages • 2009 (US$ 85 bn) – 2014 (US$ 142.2 bn) 舍67% • Healthy Food and Bevarages • 2009 (US$ 18 bn) – 2014 (US$ 35 bn) 舍98% • Since 2009 – organic food market: increase 25% per year • Brazilian consumers • Looking for more healthy products Source: Exame Magazine (18Fev2015) based on Dunnhumby survey of 30,000 respondents of 60 countries; 49
  48. 48. 335 stores – 25 states 2015 -> 430 stores 150 thou clients/day 30 thou products Average growth of 46% in the last 2 years R$ 100 million/year R$ 94 million/year Increase organic products in the largest supermarket chain (R$64 bn) R$ 200 million/year 50
  49. 49. OUTWARD PERSPECTIVE
  50. 50. • Multilatinas • Strong in domestic market • Commodity products • Regional operations • Challenges to promote product/service of emerging countries • Overcome the negative “made-in” image • Stereotype of inferior product 52
  51. 51. Created in 1962 • Sandals for ordinary people: no fashion Sales • 210 million pars per year • 6 pars per second • Export 30% of sales • 117 countries • 52% sales -> sandals 53 Internationalization • 1997 Export • Sales point in different European countries (department stores) • 2003 – Sophisticated sandals (with ruby) to actors (Academy Award) and other artists • Use image of Brazil (summer, joy)
  52. 52. • Biannual book • ESPM Researchers • Brazilian Association of Franchises (ABF) • 105 Brands, 23 countries • Different stages o Domestic franchising o Experiential involvement o Active involvement o Committed involvement 54
  53. 53. 55 International Brand strategy • Latin America • Direct sales • France • Different entry strategy • Concept store • But keeping in selling “Brazilian image”, Nature, Culture, sustainable products, supporting local communities
  54. 54. 56 Internationalization • 2011 First entry in USA • Miami • A large Latin America community • 9 stores (Miami and Orlando) • Associate the brand with the country image “Brazilian meat” • Colorful stores • Adapted menu for American taste
  55. 55. Facts • 1880 foundation (manufacturing) • Brand name = German word • No stores, selling in large department stores or small street shops • Almost bankruptcy in 1990s • Start to invest in own stores and brand • 640 stores in Brazil Internationalization • 17 stores in South American countries • Paraguay • Uruguay • Venezuela • Bolívia 57
  56. 56. 58 Facts • Founded in 1993 • 1995 Built a world-class internal team of fashion designers led by the stylist Monalisa Spaniol • Brand name = founder mother’s name • 505 stores (franchising) Internationalization • 18 countries • Focus on world fashion • Not mention that is a Brazilian firm in its origin
  57. 57. FINAL CONSIDERATIONS
  58. 58. • Inward perspective • Brands of consumer goods/services (beer, banks and retail) • Create closeness by generating unique experience, emotions and passion • Understand local culture and needs • Knowledge of new media and approach to reach consumers • Outward perspective • Associating positive points of country image when the product fit on it • Hiding country image and focus on product quality and reputation • Focused on regional operations or countries with cultural proximity 60
  59. 59. Mário Henrique Ogasavara, Ph.D. ESPM Sao Paulo, Brazil 因 mario.ogasavara@espm.br

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