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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