Marketing in LA

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Marketing in LA
Mafalda by Quino
Woman Do you have oil? (Bulk) Manolito Of
course Woman Is it good? Manolito How is it
possible that everybody have to ask that
damned question?!
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What is marketing (management)?

• Marketing is the process of planning and
  executing the conception, pricing, promotion and
  distribution of ideas, goods, and services, to
  create exchanges that satisfy individual and
  organizational objectives. Phillip Kotler

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Marketing Plan

• 1.Executive Summary
• 2.Current Marketing Situation
• 3.Opportunity and Issue Analysis
• 4.Objectives
• 5.Marketing Strategy
• 6.Action programs

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A tropicalization of a marketing plan

• A plan in LA has to consider
• Economic obstacles
• Inflation
• Crises
• Income distribution
• Low average income
• Financial burdens

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Tropical plans

• Political factors
• Centralization of power
• Over-regulation
• Prices, exchange rate,
• Protectionism
• Clientelism

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Product

• Product design has to consider
• Disposable income issues
• Alternative materials
• Size
• Particular characteristics of the country/culture
• Resistance (cars, electronic equipment)
• Adaptation to local tastes
• Price control issues
• Redesign of controlled products

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Products, services and culture

• Collectivism
• Use of products
• High power distance
• Symbols of social status
• Masculinity (Brazil is fem)
• Cookies vs beer.
• Risk avoidance
• Tradition

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Price

• Inflation can cause distortion in the market.
• Price control is a main issue for many producers
  (milk, soft drinks)
• Economic plans (Argentina, Brazil and Peru)
• Recommendations
• Selective and quick price increases
• Watch the sales terms
• Watch competitors

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Promotion

• Less cluttered media
• Media choice
• Electronic media is more popular
• Critical but impossible to standardize in LA
• Political implications
• New media like cable and the Internet have very
  low levels of penetration
• POP material is very important

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Promotion and culture

• Collectivism
• Family situations
• High power distance
• Status vs. performance
• Masculinity
• Ability vs. results
• Risk avoidance
• Use of coupons

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Sales management

• Sales force
• Education level
• Productivity
• Transportation
• Need for control and supervision
• Need for constant motivation
• Other cultural aspects

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Distribution in LA

• Transportation
• Communication
• Capital
• Distribution channels
• More retailers
• Less distributors
• Less wholesales
• Legal aspects

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Retailing in LA

• Concentration of POS around large cities
• Large number of retail stores
• Store characteristics
• Small
• Family operated
• Independent (Changing fast)
• Small inventory
• Management
• Informal/non-technical
• Lack of controls

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Selection of POS

• Golden rule 80-20 is adjusted as 35 - 65
• Selection criteria
• Consumers
• Geographic coverage
• Strategic POS
• There is no data so it is time and resource
  consuming

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Criteria for choosing channels

• Economic criteria
• Sales
• Costs Fixed and variable
• Control criteria
• Control of salespeople
• Training, specialized assets
• Need for flexibility
• Commitment

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Direct or indirect?

• Crucial decision in new ventures
• Power, conflict, control
• Intangible costs
• Analysis of indirect distributors
• Availability
• Willingness
• Competition
• Compatibility

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SWOT analysis of distribution alternatives
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Direct or indirect distribution

• Financial resultsales revenues-variable costs
  investments
• Example Hire a distributor or distribute
  directly?
• Sales estimates are 10,000,000
• Distributor will charge a commission of 10
• On our own
• Initial investment 1,500,000
• Variable cost 1

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Example

• Indirect
• Y1 cost 1,000,000
• Y2 cost 1,000,000
• Y1Y2 cost 2 million
• Direct
• Y1 cost 1,600,000
• Y2 cost 100,000
• Y1Y2 cost 1.7 mill.

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The dark side of marketing in LA

• Different kinds of competition
• Informal economy
• Black market
• Rumors and urban legends
• Antimonopoly issues

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Market data

• Primary data
• Quantitative
• Qualitative
• Secondary data
• Not entirely trustful
• Difficult to compare across time and across
  countries

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Market research

• Problems of survey research
• Interviewing members of the extremes of the
  socioeconomic range
• Gatekeepers
• Geographical inaccessibility
• Illiteracy
• Social desirability
• Multiple choice questions
• Reliability

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Market research (cont)

• Other issues
• Translation
• Measures
• Supervision
• Phone interviews

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Market research (cont)

• Problems of qualitative research (Focus group)
• Heterogeneity of the members of the FG.
• Socioeconomic class
• Gender
• Participants might be skewed
• Suspicion