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Pictures and information for Approaching the
consumer market in Latin America:
Disclaimer: These notes below were taken by students
during the conference. Any misrepresentation of facts, omission or error of
interpretation is unintentional. They are intended to encapsulate the
presentations for conference attendees and do not represent the views of MIT
Sloan School of Management.
To download the presentation of this panel, press
here
Pablo Turner - Falabella
Falabella is doing great along the continent and especially in Chile. The
keys for success
 | Give autonomy to Managers. |
| Local talent should be exploited! (They know much better the local
consumer) |
| When you have top people, it is very easy to attract top people. |
| Local Brands are known by consumers!
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Strengths of Falabella:
| Well thought strategy and the capacity of execute it. |
| Consumer focus (Based on Consumer Facts) |
| Managerial Capacity and scale |
| Commitment |
| Brand Builders |
| We try to learn a lot from best practices around the word
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Quotes:
“We are at least more consumer focused than our competitors”
“The only corporate function is the one that handles money”
“We see ourselves, not as retailers but as a brand”
Lorenzo Mendoza -
Grupo Polar
Environment:
| Economic Instability |
| High Unemployment |
| Poverty in the region |
| 60% of consumer under 30 years |
| Points for doing business |
| The region is not a homogenous bloc of nations. For example, Argentina and
Brazil have a very developed infrastructure for distribution (hypermarkets),
different to the situations in other L.A. countries. Different tastes,
cultural habits of foods |
| Volatility of economy requires investing with long term vision |
| Companies must be adequately capitalized |
| Limit yourself to the extent that you can cover yourself against
fluctuations in the economy (avoid being overly optimistic). |
| Pricing is a delicate issue, manage it to avoid variations in volume of
your bussines |
| You must have a differentiator factor before entering a new market.
Entering the market thinking in being the Number 1 or Number 2 of the market |
| Decisive factor: attention at the sales point and customer service |
| To be a good Citizen and a good Businessman will eventually pay out. |
Final Remarks
Before ALCA comes, all the countries need to work as a group of Nations. South
American Countries need to talk before looking to the north. We, as a business
community, need to put pressure to our governments, we need people to have the
“Stones” to do the work that is needed but that is painful.
Carlos Paiz -
La Fragua and CARHCO
| 37 Million Hispanics in the U.S. 13.3% of the U.S. Population, largest
minority (67% Mexican Origin). Hispanic Purchasing Power is approximately that
of Mexico and Brazil. |
| The main source of foreign currency is composed by the remittances sent
from the U.S. So Central America is now more an exporter of People than of
Coffee |
| La Fragua was established in the 1920’s and followed a strategy devoted for
the poor that could not buy in traditional stores |
| Its original strategy: Low Cost: i.e. No lights, no bags, no marketing |
| Its customers: buy several times a week, buy small amounts to be able to
carry it |
| Its Employees: are trained to work in several positions (They do all the
work from cashier to unloading trucks) |
| Now the company also targets the high, medium and low income segments |
| The future is
- New Larger Discount Stores – now in pilot stage
- New Territories, waiting to be conquered
- Go to other businesses
- Special efforts to reduce market share of the informal sector
Customer profile
- Adapting to changing habits
- Working Environment is changing
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Lorenzo Mendoza - MIT Sloan Alumn and CEO of Grupo Polar
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It is critical for Polar to maintain the social responsibility part
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Don Carlos Paiz - CEO La Fragua
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Three of the most important representatives of Consumer Markets in Latin America
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