Say 'Hola' to Emerging Markets

The fact that Latin America's low-income consumers represent an annual purchasing power of $120M (USD) may seem like a shock to some of you. Not only is it true, but it's also an attractive opportunity for advertisers and brand marketers to pay close attention to.

There are many American assumptions toward low-income Latinos. Most see them as unsavvy shoppers and dub them "cash poor." In fact, they are the opposite. They take purchasing decisions to heart and shop, shop, shop. This is one of the largest emerging markets today.

Few advertisers have targeted this market. Even fewer have done it successfully. Like any other group, we must rely on consumer insight to successfully appeal to this group.

Booz Allen Hamilton recently conducted a study which ran in Strategy + Business magazine this month. The study found there are far more myths than realities in regard to marketing and advertising toward such markets.

The myths that were found include:



  • Low-income consumers spend little on material goods.
  • Their needs are simple.
  • Emerging consumers are overwhelmingly attracted to lowest shelf prices.
  • Emerging consumers face budgetary constraints and do not prefer modern supermarkets.
  • They belong to the "popular class."

    The one that struck me as most peculiar was the "popular class." As you know, in emerging markets, we devise phrases and labels for particular markets. For example, DINKs stands for "double income no kids." Well, this market is said to be blue collar and working class. Many marketers think that represents the bulk of the market.

    Emerging consumers give shopping a lot of thought. Sure, they are price sensitive, but they tend to shop more on a daily basis. They often stock up on what they need. Retailers that are within walking distance from their communities are most successful. Many people in this market factor in the price of transportation to their shopping budgets. If they can walk to the store, it will save them money. Because it is convenient, they can carry large items back home as well. However, emerging market consumers tend to buy smaller sized products for this reason.

    Larger supermarkets prove to be a mixed bag to this group. Again, those closest to their communities will dominate. However, they face stiff competition with well-established local venues. A lot of window-shopping happens in these big stores. This market does not like a huge variety of products, as they fear spending above their means. They look for fresh food and familiar brands.

    Sure this group is price-conscious. They tend to steer away from credit and use cash or short-term cards offered in their countries for day-to-day items. They look at the individual price of each product then assess the overall purchase as it relates to their budgets. They tend to use credit cards for larger items, such as appliances.

    It is critical to look at branding and package size when trying to tap into this market. Put it this way; this group is not the "super-size" type. They prefer products that look fresh and wholesome, not fake. For instance, red waxy apples are a turn off to them, for it does not look natural.

    I hope this piece gives you food-for-thought and does some of the heavy lifting for you. As you can see, there are many myths and few realities. They key is to be educated and sensitive to this market. It is not something to miss.

    Have you been a part of a team representing a brand targeting this market? If so, what have you learned? Tell us the good, the bad and the ugly. Post your message to the Spin board and say Hola.

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