Latin America: How to thrive in a market we don’t understand

Being Brazilian technically qualifies me to be a Latin American. However, I must say I’m not sure what it means to be Latin American.

Brazil is really different from the rest of the region: we speak a different language, we were colonized by a different Iberian country, we don’t have the strong influence of pre-Colombian civilizations in our culture or DNAs, and most importantly, we bathe in Atlantic waters during summer vacations, not the Pacific or the Caribbean (although many of us tend to migrate in search of the second).

Argentina is also a unique country in the region. Before the 1st World War, it ranked amongst the richest countries in the world, and although – sadly – it has experienced almost a century of decline, it developed institutions to set it apart.

And what about Colombia and its recent history of the war on drugs that made the country suffer so much and left such deep scars in society?

I could go on and on with other examples. You get the point: Latin America, as a region, combines markets and societies that can have many more differences than commonalities between them. And during the last couple of years, some of the largest markets in the region have entered completely different dynamics and have very different forecasts for the next 12 to 18 months.

So, does it mean that companies should not try to have a regional strategy and should always look into individual markets and segments? I don’t think so.

When faced with more volatility and more complexity, instead of trying to cover absolutely everything in your strategy – which can’t be done anyway – you should revert to what’s essential and secure that the fundamentals are in place. You guarantee that if your analysis is completely wrong, nothing catastrophic happens. But if you are right, you’re positioned to profit big from it.

You don’t need more sophisticated models, with more data in them. You need to identify fundamental truths about how your business works. And apply them to your action plan.

My business is to help clients create 5-Star marketing that brings joy to consumers and fame and profitable growth to their brands. Brands help consumers make decisions, so understanding decision making is the essential part of a robust brand building strategy that survives complex and volatile market conditions.

We have identified in the latest behavioral and marketing sciences, few universal truths that are valid in any situation where brand choice is involved: If a brand is famous and comes easily to people’s minds, it must be a good choice. If people feel good about a brand, they think it’s a good choice. If a brand is distinctive and easy to recognize, it’s also seen as a good choice.

Therefore, all marketing plans should be focused on delivering only three objectives in the long term: make the brand famous, make people feel good about the brand and make the brand distinctive in consumer’s minds. There you go, a strong regional brand strategy.

When I discuss this with some industry colleagues, I can see most agree that these principals are important and valid, but they feel that only three objectives cannot be enough. There has to be more than this, to cover all the different market contexts, competition, brand situation and so on.

If you agree with my initial statement, that increased complexity in the scenario should not be matched with increased complexity in the strategy, but rather with securing the fundamentals, then there’s no reason to discard this model as being too simplistic. There’s no reason why 5, 7 or 12 objectives would work better than 3, just because my strategy needs to account for very complex market conditions. Maybe we feel more comfortable having a 10 point strategic plan for the next 5 years, with quarterly scheduled reviews and 3 scenarios. It helps separate us from the uncertainties and randomness of the market, but in my experience, it does little to support growth and improve business performance. Instead, a simple, clear and solid strategy, based on actual data and science, not impressions and opinions, allows us to focus our attentions on what really matters. Are my marketing campaigns helping me deliver the strategy? Do I have the right products? Am I using the right media channels for my objectives?

If you consistently focus on those three things, it doesn’t matter if the market is hot or cold, if consumers feel confident or not. You won’t need to try to guess the outcomes of the peace negotiations in Colombia, if the government in Argentina will manage to pass all the reforms it needs or whether Brazil will have a new government. You will be positioned to capture the best regional opportunities from the exciting and complex markets of Latin America, without falling prey to the dangers of too much complexity slowing down your business.

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