European and Latin American growth rates have mirrored each other closely over the last decade. Faced with many of the same macroeconomic challenges, brands on the two continents can learn much from studying each other.
Global Head of BrandZ
BrandZ Latin America--Millward Brown’s comprehensive brand value report--has just been released and it contains important lessons for European brands. The Latin American report is one of several BrandZ reports Millward Brown publish every year, based on 17 years of research into brands across the globe.
This year’s report contains many insights about building closer relationships with consumers during an economic downturn and positioning a brand as emblematic of a broader region, trend or movement.
The Brazilian beer Skol is for the first time Latin America’s most valuable brand, up from second place last year. Skol has created value by building a close relationship with its target audience through music festivals and other special occasions. The brand’s mantra of “Desce Redondo” (“Easy to drink”) builds associations of fun, playfulness and happiness.
Skol’s relationship with consumers is close, but not deep in the sense of being connected to more fundamental issues in consumers’ lives. This means that the brand can position itself as a welcome distraction from troubling financial prospects. Skol has understood that its role is not to be the main character at the party, but to help others have a good time.
Around Rock in Rio, the Rio Carnival and the FIFA World Cup, the brand organised more than 2,000 events where it let its consumers play the main role. During the World Cup, it even created small “embassies” where customers were invited to become Skol “ambassadors” and welcome foreigners. And its “Gringo your selfie” competition encouraged Brazilians to take selfies with tourists from all the countries competing in the World Cup in less than 24 hours.
By fine-tuning its relationship with consumers like this, Skol is always in the background, but never far away. Its ingenious approach is to not run the party but to be one of its fundamental building blocks. Its brand events do not have to be about the brand at all. The embassies and selfie competitions can be all about what consumers want to do, while Skol can confidently assume that the customer will bring the product to the party.
New Experiences And Old Values
Another aspect of building closer relationships with consumers is to create unique experiences. Chilean gas company Abastible--not yet in the BrandZ LatAm top 50--had great success this year creating a different type of unique occasion.
Struggling against strong competitors, Abastible created a TV advert that helped it to stand out from the crowd by tapping into a broader media happening. The ad featured a popular 80-year old contestant from the local version of the TV programme Master Chef. It created an emotional connection with consumers and was spurred on by the contestant being interviewed by traditional media and discussed on social media.
In this way, the advert and the brand became part of a broader “national experience”, where Abastible succeeded by employing a non-conventional brand ambassador for a gas company. European brands are also adept at using non-conventional brand ambassadors, but where UK brands often use bloggers and the like to reach new audiences, Abastible instead took an old-fashioned route with an older lady. By going against consumer expectations, it managed to grab attention.
The ad also exemplifies how traditional values are helping to connect Latin American brands more closely to consumers. Representing the warm values of a traditional household, the chef managed to communicate the sense of security that follows from tradition. European brands that are able to follow this and tell a compelling story about the warm values consumers care about can build close relationships without engaging in the more serious debates about economic challenges.
An important difference between Europe and Latin America is foreign involvement in the economy. Because of the generally lower levels of foreign involvement in Latin America, local brands dominate these markets to a larger degree. This in turn creates a dynamic where local brands in LatAm--as in APAC--try to break through internationally by converting local or regional USPs to international ones. An important strategy for these brands is to position themselves as “emblematic of the region,” so that they are seen to represent a broader location, trend or “local feel.”
Beauty and personal care products from Peru--such as Belcorp and Yanbal International, still outside the top 50--are expanding and starting to pose a threat to bigger, global companies. The Peruvian brands’ business models emphasise a strong understanding of the locally emerging middle classes in the entire Latin American region. This way they manage to represent a broader set of ideals and capture the mood of their target consumers better than competitors coming in from the outside.
Taking The Lessons Home
Of course, brands in Europe use many similar tactics to their Latin American counterparts; Louis Vuitton creates unique content for its consumers and IKEA is definitely emblematic of Scandinavia. However, subtle strategic differences do exist and a closer study of Latin American successes will show European CMOs how to gain the edge. By looking out to the wider global market--to Latin America and to Asia-Pacific--European CMOs will be in a better position than ever.