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As more multinational marketers focus on Latin America, they struggle to cope with the daunting diversity of individual markets while seizing opportunities to develop a more regional


(Latin America is the focus of a special report, Page I-19.)

An Advertising Age International survey of 25 leading multinational marketers highlights concerns from identifying and reaching customers to tackling distribution problems.

But respondents also cited a growing consumer sophistication and greater brand awareness. And the growth of regional cable and satellite TV and print media is spearheading the move toward

regional strategies as marketers scramble to standardize brand names, messages and packaging.


More than half of those surveyed entered Latin America in the 1990s, generally after marketing to the U.S., Europe and Asia.

"The same principles of marketing and advertising applied in other regions do not transfer well to Latin America," a computer marketer said. "It needs to be customized, or better yet, created

specifically for the market."

Marketers overwhelmingly indicated the need for more useful information and help in targeting potential consumers. Respondents cited lack of data and good direct mail lists, difficulty in

reaching consumers and decisionmakers, and the need to expend more time and money educating consumers and creating a need for their product. A courier company executive's biggest challenge

is "Difficulty in accessing demographic and psychographic information."

Fast-food, cosmetics and package goods marketers said Latin Americans' low disposable incomes and underdeveloped consumption habits presented obstacles. One respondent described

his greatest challenge: "Two languages with 20-plus cultures and differences."

Asked about the biggest changes they are experiencing in Latin America, more than one-third mentioned the growth of brands.

A computer marketer noted a trend toward buying brand name computers rather than clones.

And a car marketer responded that the biggest change he has seen in Latin America is greater brand awareness due to the influence of satellite and cable TV.

Others noted the appearance of new, often local, brands as competitors and the fragmentation of homogeneous markets as more brands emerge.


Almost all respondents said they are advertising pan-regionally-and plan to step up activity within two years.

New media outlets, especially in the print area, are still appearing, with a Spanish-language edition of Newsweek, for example, due to launch in mid-1996.

"We've become more aggressive with advertising investment and marketing programs," said Jim Power, Polaroid's director of marketing services for Latin America, in a followup interview.

"Before, we looked at local and national strategies, perhaps TV, business press, and business-to-business. Now we're looking at a regional approach, through broadcasting

opportunities like the Discovery Channel and MTV and print like America Economia."

Polaroid Corp. has recently standardized names and packs to facilitate regional marketing.

Similarly, U.S. confectionery marketer Arcor began a move toward common packaging, positioning and communications in 1993 to facilitate international marketing, said Enrique

D'Alessandro, Arcor's Buenos Aires-based manager/publicity, promotion and packaging.

"Satellite TV is changing our marketing a lot," Mr. D'Alessandro said. "Every year we're using it more."

For some marketers, local conditions dictate strategy.

"More and more, I am seeing that the only common ground these countries have might be the language, if that," said Bob Viera, Budget Rent-A-Car's Chicago-based marketing manager for Latin America and the Caribbean. "The countries' economies are very different and volatile."


Mr. Viera believes Latin America has great potential for Budget but he worries about the regulatory environment. In some markets, import laws restrict the number of cars and spare parts allowed into each market.

"As a society, the car rental business is second nature for us in the U.S.," he said. "But in Latin America, depending on the country, a daily rental rate amounts to a week's or a month's wages."

For Joh. Benckiser, a German personal care products company that entered Latin America in 1993, low consumption is also a problem but retail distribution is the biggest concern.

"The retail sector is fragmented," said Colin Webster, senior VP Latin America of Benckiser Export. "Brazil alone has more than 200,000 different stores, and more than 50% of the business is done door-to-door.


In Latin America, economic factors are never far away. Although enormous progress has been made in taming hyperinflation, breaking down trade barriers, and electing democratic governments, Latin America is still considered a risky region.

The spectacular shattering of the Mexican economy after a 15% devaluation of the peso in December 1994 prompted wary marketers surveyed to cite as a challenge the "tequila effect" that

caused investors to lose confidence in other Latin markets, too.

Marketers also complain about everything from import tariffs to tax laws.

"Devaluation and political instability are everyday risks," one respondent lamented.

The economic news isn't all bad. Respondents were enthusiastic about governments taking a more pro-international business attitude and the emergence of trading blocks like Nafta, the Andean Pact, and Mercosur in the southern cone.

Latin America has less agency network alignments than Europe and other regions of the world. Almost half of respondents said they don't use the same agency throughout Latin America, and they move accounts in either direction rather than opt for centralization, as advertisers almost always do in Europe. Budget's Mr. Viera and Benckiser's Mr. Webster said they are considering

local agencies in each country.

Some marketers said they split their ad budgets between a regional agency to coordinate multicountry efforts like satellite TV and local agencies to address local market diversity.

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