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The International Entrepreneur ? Strategic Marketing in Latin America

Marketing Strategy in Latin America

Skyline of Sao Paulo, Brazil

As I write this article, I am flying over the Great Plains of North America. There is nothing like being at 35,000 feet/10,668 meters as a place to take the high-level view of marketing strategy. I was in Minneapolis speaking on ?Social Media in Latin American Markets? at the U.S. Commercial Service?s Access to Western Hemisphere conference. After two days of discussing a variety of strategies with several company leaders, here is a strategic framework that I hope you find useful as you look at Latin America.

Global vs. Multi-Domestic Approach

This is the core strategic decision that helps to guide many marketing decisions. In a Global approach, a company changes their products or services very little when going from one international market to the next. Normally, a global strategy company either communicates in one or a few global languages. They would keep the product fairly unchanged in order to gain cost savings from standardization. In a Multi-Domestic approach, the company localizes its products and services to maximize greater potential out of each market. In Latin America, there might be multiple local websites customized to reflect the local language and product specification preferences. The company may have a completely different product and marketing mix for Colombia vs. Argentina. The choice between these two strategies lies on several criteria:

  • How fast does your company want to grow?
    Most companies would answer that they want to grow as quickly as possible. But that requires investment capital from combination of profits, debt and equity. Since localizing products, marketing communications, and customer service are all costly, a full-on Multi-Domestic Strategy is costly. A Globalized approach where marketing communications, products, etc. are standardized takes less financial resources.
  • ?Does your product/service category fit better with a more standardized or localized approach?
    Some products have very little variance from country to country. This group includes back-end software, bioscience products, and engineering services. On the other end of the scale are consumer products like foods and beverages, which are often localized for every market. Ask: what do the end-users of my products and services expect from a foreign product/service provider? If you are uncertain, your trade association can be a great resource for learning industry localization standards.

What?s the Right Marketing Mix?

The global vs. localized decision is important, along with considering industry norms. ?In globalized strategy, the focus is on standardized marketing channels from country to country. This can include online marketing around a website, social media, in-country reps and distributors, and international instead of local trade show exhibiting. Materials are typically standardized on a single language or small group of languages. In the localized approach, the marketing focus is on market penetration, with localized marketing materials taking into account local dialect in Mexico vs. Chile and definitely Portuguese materials for Brazil.?There would be in-country promotions and local sponsorships, and an in-country sales force that can help fine-tune marketing messages for the local market.

There is a wide variance in marketing mix between industries. Point-of-sale marketing is often critical for consumer products sold in distribution outlets such as stores. In large business-to-business industries, the sales representative that knows the local culture takes a key role in relationship-based marketing. Some industrial products can generate half of the year?s sales from trade show leads. In other industries, direct marketing is more effective. While it can be beneficial to take stock of what other companies in your industry are doing for their marketing, this is only a comparison. Your own marketing should be based in part off of the company?s competitive strengths.

Latin American Online-Offline Deal Flow

Today, it is hard to find a company that does not market both over the Internet, as well as through the more traditional sales channels. In Latin America, social media has grown to become the top Internet activity. User rates for Facebook, Twitter & Google+ continue to rise in countries like Argentina, Chile, Brazil and Mexico. Yet many companies consider their social media marketing to fall under the category of ?branding?, meaning something that perhaps helps build the company?s image, but has no direct effect on the company?s profitability. In my experience, ALL marketing needs to in some way be measured and linked back into the lead generation and sales process. In the case of online marketing channels, these efforts need to drive toward either an online purchase or allow a local sales rep or distributor to follow up with potential clients.

I hope this information is useful to you in as you do business in Latin America and the rest of the world.
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The International Entrepreneur: Think you know American values?

American culture values doing business internationalLike most of my readers, my business focus is on the world. As an American doing business internationally, I see my fellow countrymen sometimes make assumptions about other business cultures and fall flat in business relationships. The American cultural traits listed below all have implications for Americans doing business abroad.

The world keeps changing, but I think it is important to note that cultural values tend to remain steadfast over time. The United States does not have a long cultural history compared with cultures like in China or India. But its cultural characteristics have been present since before the American Revolution. These traits may be applied in new ways to work within our changing environment, but understanding them gives key insights into how Americans approach business.

Caveat: These are culture generalizations and all traits to not necessarily apply to all Americans in all situations. They may be more or less pronounced in specific regions of the country.

Mainstream American Cultural Traits

1. A high value on “Material well-being”.Anyone traveling through one of the American suburbs can see this cultural trait in action. In its more extreme form, it is materialism. While some cultures share this trait, there are many cultures that rank this as a lower priority. Americans are often willing to sacrifice leisure time for work time, meanwhile all of France goes on vacation in August.

2. 2-fold judgment based on principle. Americans often look for the simple answer to complicated questions. This may be a reason why American businesspeople conduct business so quickly. We don’t always spend the time to understand the fuller context of a situation. Most international situations are nuanced and complex because of culture, business environment and customer preferences. We jump in based on a quick decision we’ve made about a potential partner or an opportunity. It is much more difficult getting out of sticky situations when we are wrong. This cultural trait explains a lot about American politics too. But that is a whole different subject.

3. Tendency of moralizing.In the American culture, we often judge based what is perceived as morally right or wrong without first understanding the context of a situation. For those wishing to do business with Americans, it may help to explain a situation when Americans throw down their opinion prematurely. For Americans, this means ask questions about a situation to understand context & don’t verbalize your conclusions.

4. Distinction between “work” and “play”. Americans do not usually socialize with colleagues and clients as much as in countries like Japan. In Latin America this distinction is blurred too. As Americans doing business abroad, you may be expected to be on call after work if the local culture expects it. For those doing business in the U.S., while there may be occasional dining together, do not expect that your American hosts will always see to your schedule outside of normal work hours. Also, do not necessarily expect to meet an American colleague’s family or friends.

5. Special attitude towards time. Americans focus on “Time Management” the ability to carefully plan our time in order to produce the right outcomes. A common expression in American business is: “Time is money.” The emphasis is on completing the task, the sales transaction, the hiring of new staff, etc. as quickly as possible. For Americans, please understand that the rest of the world knows about this trait and frequently uses it against us. That long, drawn-out negotiation in Thailand may actually be stretched out to encourage Americans to give more concessions. Americans, don’t share your actual timeline with international contacts. For those doing business with Americans, understand that when you feel Americans getting impatient with your long story, it may be time to make your point and move on to the next task or topic.

6. High value on Individual Efforts and Optimism. The American culture is supposed to be a meritocracy people?s fortunes rising and falling based on their individual efforts. This fuels the famous “American Dream” where anyone is supposed to be able to succeed with enough hard work. Americans want to be judged on their efforts, instead on the basis of their family name, socio-economic class, race, age, or gender. At work, we want to be compensated based on their efforts and results relative to their peers.

7. High value on Individualism and Individual Freedom. As Americans, we often focus on the “I” before the “we”. Others may see us sometimes as selfish and disconnected from the group dynamic. We need to be mindful of group context in order to be most effective internationally. When doing business with Americans, it is helpful to know that when the American decides to leave the group early to go do something they prefer, it is not necessarily considered rude in our culture.

8. When it’s man vs. nature, man wins. As Americans, we feel that we should have control over our physical environment. We can design structures to withstand most natural disasters. With medical procedures, we hope to avoid death. This trait also plays a role in some American’s view of Global Warming and our desire to find technologies that allow us to continue current energy usage with less environmental consequence.

9. Avoid uncertainty through legal process (courts, contracts, etc.) and goal setting. For Americans, a legal system should protect individual and business rights. Once someone signs a contract, they are legally obligated to follow its provisions. The contract serves as the foundation of most business relationships. In contrast, for many cultures a contract is not legally enforceable. The business is based on the relationship forged with individuals or enforceable by having friends in power. While such a foundation is much more flexible over time, it is difficult for many American businesspeople to adjust to relationships being more important than contracts.

10. Egalitarianism and Fairness. This value is part of the work environment as access to opportunity. While Americans have a wide range of socio-economic status, we at least try to give equal access for those with talent and drive to success in business. Women now get most of the same opportunities as men. Young people can lead older colleagues if they have the right skills. As a culture, Americans don’t like what they perceive as being unfair. Other cultures may feel that there is no way to be completely egalitarian, so there is little point in trying.

11. Importance of “belonging” – membership. While I believe that more “group-oriented” cultures stress “belonging” more than Americans do, I think Americans associate with others based on shared values. This could be by religious affiliation, hobby or interest, shared education, a passion for a cause, etc. Examples include: Methodists, Harley bikers and those raising funds for cancer research. The important aspect is that Americans decide for themselves what groups with whom they affiliate.

12. Humanitarianism and generosity. Americans are not the only culture to emphasize individual generosity and humanitarian traits. But we do expect that people and companies take social responsibility for issues around them. As an American, realize that not every culture expects similar actions. As someone doing business with Americans, consider contributing to or at least acknowledging a cause championed by the American company.

13. Nationalistic and patriotic. Again, Americans are not the only culture with this characteristic. But Americans need to be mindful that with our country’s relative size and might. Overt nationalism needs to be toned down in the international business environment or be perceived as arrogant and ignorant. And anyone still convinced of America’s exceptionalism should do their homework (education, healthcare, economic opportunities, best countries to do business, etc.) and join the 21st Century.

14.Religiosity (very religious). Religion does play a significant role in many Americans’ lives. It can provide structure for “belonging” to a same-values group. A religious organization often provides ways for its members to donate money and time to help others. Generally, it is wise for those doing business in the U.S. to avoid the topic of religion all together.

(Source of the original cultural trait list: Cross-Cultural Management by Dr. Kang-Rae Cho at the University of Colorado Denver)

I hope you found this article helpful as a perspective on doing business culturally as an American or as someone wishing to do business in the United States. For more help navigating cultural business differences, please contact me.

Best of success to you in all of your international business dealings,

– Becky

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