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 1997
LATINOBRANDS
By Paul Herbig*  

Abstract:
Lationbrands are defined, introduced, discussed, and arguments for and against are provided.  Rather than a single Latinobrand for all of Latin America, pan-regional strategies should be enforced for most brands.  Implications and recommendations are provided.


INTRODUCTION—Latinobrands
Latinobrand is the name that has been adopted by MNC’s to create brands that specifically target the Latin American marketplace.  Latinobrands is the Latin American equivalent to eurobrands,  marketing one single brand to all Europeans as a result of the European Union.   As opposed to the conflicts confronted by marketeers with the Eurobrand, Latinobrand advocates have found it more feasible to target the Latin Americans because of the amount of similarities between the nations.  However, this does not mean that marketeers necessarily have one single regional promotion strategy throughout Latin America.  In reality, “pan-regional” strategies must be adopted.  With several “pan-regional” strategies, MNCs have been able to  work effectively with fewer adaptations in comparison to the typical one strategy per individual country.  Such strategies have been employed effectively by service corporations such as MTV, AT&T, HBO Ole, ESPN, TNT, Galavision, and Gems.  Product  companies such as Kodak, IBM, British Airways, Nike, ADIDAS, and Reebok (to a lesser extent) have employed this strategy effectively.
Kodak has been able to achieve this with help from J. Walter Thompson, a Miami-based Advertising Agency by looking at cluster similarities  and creating a campaign in which the spots consisted of “lush imagery and strong visuals, with a bunch of happy smiling faces thrown in” (A.C. 1996, p.20).  Although local adaptations were made for these commercials (casting, music, and location),  the concept was standardized.  Nike is successfully pan-regionally promoting its latest line of soccer shoes through the use of TV.   In their TV spots, they have a local soccer star kicking a soccer ball from his country to another country and so on, in doing this the ball travels from Europe, to South America, to U.S., to Canada, and ends up in Mexico where goalie star for the Mexican National Team, Jorge Campos, makes a great stop not allowing the ball to hit the wall where his picture is painted on.  The ball is kicked from places where national landmarks can be seen.  This campaign has been so effective that the Brazilian National Team, ranked #1 in the world, has struck a deal with Nike for sponsorship.  Previously these sponsorships were done by corporations with more expertise in soccer such as Adidas.  Some of the other corporations have worked in cooperation with each other in order to achieve this objective.  For example, “MTV Latino had an audience of  4 million households in Latin America and the U.S. and only two advertisers.  Two years later, the audience has swelled to 6 million-plus and the advertisers now number 40” (A.C.1996, p.20).
It all seems very simple for MNCs.  “Target the Latinos all over America”, “the potential is there”, “there are 400 million Latinos out there”, “they all speak Spanish.”  But as they have come to learn it is not as simple as that. The cross-cultural differences will always exist and must therefore be taken into consideration  to adapt a campaign and appeal to the different groups of Latin Americans.
This manuscript will first identify some of the major factors which Multinational Corporations must confront when trying to promote their product and their corporate image to the Latin Americans in  more than twenty Spanish speaking countries in America, including the U.S., in a standardized manner.  I twill then identify some of the oppositions which MNC’s have faced throughout the years when advertising in Latin America and will conclude with listing and discussing a few techniques and help available to Multinational Corporations involved in promotion in Latin American countries.

ENVIRONMENTAL FORCES
Geographic
Latin America encompasses the continents of South America, Central America and Mexico, and the Caribbean.  The countries of Mexico, Guatemala, Belize, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Puerto Rico, Dominican Republic, and Cuba align the Caribbean Sea.  Chile, Argentina, Uruguay, Brazil, Ecuador, El Salvador, and Peru are adjacent to oceans as well, either the Pacific or the Atlantic.  Although not all countries are surrounded by water as are Puerto Rico, Cuba, and the Dominican Republic, the Atlantic Ocean, Pacific Ocean and the Caribbean Sea play very important roles in the lives of their inhabitants.
Most South American and Central American countries also have very diverse geography.  Mountainous terrain, pampas, valleys, and volcanic lands are found in most of these lands.  Temperatures vary according to the latitude the country is found on.  While in the U.S., Central America, upper part of South America, and the Caribbean is summer; Argentina, Chile, Paraguay, Uruguay and the rest of the Andean countries are going through winter.  Obviously you will not sell bathing suits, sun tan lotion, convertible cars or such products to these countries at that specific time of the year. Therefore, your pan-regional strategy must target only those countries which have similar geography in common, this increases promotional costs since the different markets will have to be targeted at different times and could conflict with the product life cycle. 
Geographic settings also need to be chosen for TV advertising.  For example, in Puerto Rico, as well as in most of the countries adjacent to the sea, most commercials take place at the beaches.  Men and women are dressed in bathing suits and are chosen for their tanned skin.  Also many promotions for several products take place at beaches during the weekends as well as in beach festivals.  In countries with complex geography it is not that simple.  TV ads can not only target the cities or towns by the shores, they also need to target the secluded areas of the mountains and the forests.  Some of whose inhabitants there have never even seen the ocean.   

Demographic
Latin Americans are very diverse in their background.  The inhabitants from Mexico, Central America and the northwestern part of South America are, for the most part, direct descendants of either Incas (South America), Mayas (Central America), or Aztecs (northern Central America, Mexico).    Most descendants come from Spaniards and Africans.  In Brazil, Paraguay, Uruguay, Argentina, and Chile, European descendants are numerous.  Brazil’s come from Portugal, the other four countries have clear German, Italian, and Spaniard with very few Indians compared to the other South American countries.  

Economic
Imported products have been in the Latin American markets for decades.  These products have competed against local goods but on a very small scale.  The duties placed on the importing of these products have made it very difficult for the average consumer to purchase any of these goods.  The price of U.S. edible products are priced as high as six times as much as they are in the U.S.  Import tariffs in the car industry range as high as 90% of the original value for a U.S. manufactured car, this makes it very difficult to compete against the Koreans and the Japanese who have had treaties with most of these countries for several years.
The Latin America economy varies, but one thing that most countries have in common is the large economic gap between classes.  Most of the income in each country is controlled by a few elite families who are very wealthy individuals even by American standards.  There might be a 10%-20% of middle-upper class, and the rest of the population lives below poverty levels.  	Economic factors can influence in the form of promotion used by any MNC.  Promotion strategy must take into consideration the packaging of products.  In most Latin American countries laundry detergent is sold in plastic bags because of economic factors.  Although it is easier for the consumer to do laundry by removing detergent from a box, a box is more expensive and it occupies more space.  In most of these countries labor is still very inexpensive for the elite and middle classes.  Laundry soap in bars is still sold and it is advertised a great deal since most households belonging to the upper classes have a live-in maid that can wash every piece of clothing by hand and hang it to dry in a clothesline; therefore, not going through the expenses of having to own a washer or a dryer.  
Although the maid will do the work, the target audience is still the housewives.  They are the ones who will decide if the clothes are clean enough or smell good enough.  Promotion for fabric softener should be limited only to the elite since most drying of clothes is done through the use of clothesline. 

Trade
	New economic development reforms throughout Latin America along with technological advances in telecommunications are opening doors for multinational corporations.  Multinational corporations will finally be able to target the Latin American population of 400 million inhabitants (Secunda 1994, p.150).  Some of the events and reforms which are making this possible include the North American Free Trade Agreement (NAFTA) between U.S., Mexico, and Canada which will eliminate all of the duties among these countries within fifteen years.  Argentina, Brazil, Paraguay, and Uruguay have formed the Southern Common Market (Mercosur), which called for customs union and a common market by the end of 1994 (with Chile as an associate member).  Honduras, Guatemala, El Salvador, and Costa Rica have agreed to establish a new common market in Central America.  Venezuela, Colombia, Bolivia, Peru, and Ecuador have agreed on renewing the Andean Pact  to create a common market (Secunda 1994, Pp.149-150). Although these new reforms, pacts, and treaties have been created to stimulate growth in the hemisphere, they are still in the early stages and their major benefits will not be incurred for a few years.  Of course, the sophisticated technology in telecommunications will advance this growth, and multinational corporations will make sure they are a step ahead of the rest. 

Cultural
Cultural differences are without a doubt the toughest factors any marketeer will confront while preparing a promotional strategy for any product.   Traditionally Latin American countries are predominantly Catholic due to their Spanish heritage.   It was not until 20-30 years ago that Protestant religions gained popularity.  In many Latin American countries, shower scenes are still restricted because of the public nudity topic.  TV advertising of birth control methods was prohibited for many years in some countries until governments created departments for family planning in order to control the explosive growth of population during the 1970’s and 1980’s.
In order to target the Latin American audiences, an MNC must target the family as a whole unit.  The extended family dominates.  In most countries of Latin America, the families usually remain in the same town, city, or province.  Even if they are in another state or part of the country, it is not difficult to keep in touch with their families and exchange consumer ideas.  Usually the mother will teach their children how to wash dishes with a certain brand of dishwashing liquid and they will use it for generations to come.
Sports  (especially soccer or futbol) play very important roles in the lives of most Latin Americans.   Soccer is played at a professional level throughout every country in the American Hemisphere.  Fans have engraved soccer so deep in their hearts that fights, riots, and even killings occur for the love of the local team.  The same can be said for the love fans from the Caribbean countries have for baseball.  A promotional strategy used frequently and with great success is that of revolving billboards for soccer games and fence billboards for baseball games.  Soccer and baseball stars are considered heroes in each of their countries.  They are used for commercials ranging from sports shoes to food.  Another cultural attribute is “machismo”as for the most part Latin Americans base their lives on the idea of “machismo”. 
      Jingles are very important to any promotional campaign, the target audience must identify with the music and the beat which have been part of their culture.  The following is a listing of music styles used for jingles in the different countries. “Salsa” is used in Puerto Rico, Dominican Republic, Cuba, Venezuela, Colombia, and Panama. “Merengue” is used in Puerto Rico, Dominican Republic.  “Cumbia”, “Rancheras”, and “Nortenas” are used throughout Mexico.  “Tango” in Argentina, Uruguay, Paraguay, and Chile.  “Ballenato” is used in Colombia.  “Zambas” are widely used in Brazil.
Although these countries use their local listening music for their jingles, they also use their folkloric music quite effectively.  Another trend which has captivated audiences throughout all the Latin American countries has been the phenomenon of  “Spanish Rock”.  This has been used mainly to target the younger generations.    
 
Infrastructure
Note carefully that the mail systems in 95% of these countries lack efficiency.  Do not take the chance of mailing gifts, using mail-in rebates nor offers. Low wages might be viewed as an advantage for telemarketing, but only the people living in the cities would make up the target market since long-distance calls are very expensive and lines are limited.
The Gallup Organization has redrawn Latin America in a landmark study that develops a panregional purchasing power index of consumers there.  Gallup divided Latin American consumers into eight segments to help marketers avoid the ethnic, cultural and economic differences of each country, and allow companies to target consumers by disposable income across national borders (Zbar 1995, p.21).
The categories were defined by economic, psychographic profiles and they were divided as follows:  the emerging professional elite (14%), traditional elite (11%), progressive upper-middle class (13%), self-made middle class (11%), skilled middle class (9%), self-skilled lower middle class (13%), industrial working class (14%), and struggling working class (15%). 
Although the numbers for this survey do not coincide with the percentages mentioned in the demographics section of this research, there is a valid reason for this.  This survey ignores rural markets, it also ignores the lowest economic stratum, or 17% of workers, because they lack disposable income and have no access to public services and media.  We must keep in mind that this figures came from surveys conducted in 15 metropolitan areas from 17,564 people 14 years or older (Zbar 1995, p.21).
According to Zbar and the Gallup study, of the 14% of the emerging professional elite in Latin America, 98% have a color TV, 96% a VCR, 97% a car, and  98% a credit card.  Of the 11% traditional elite, all have color TV, 91% a VCR, 89% a car, and 60% a credit card.  Of the 13% progressive upper middle class, 99% have a color TV, 77% a VCR, 74% a car, and 31% a credit card.  Of the 11% self-made middle class, 98% have color TV, 72% a VCR, 81% a car, and 46% a credit card.  Of the 9% skilled middle class, 96% have a color TV, 60% a VCR, 28% a car, and 29% a credit card.  Of the 13% self-skilled lower middle class, 97% have a color TV, 50% a VCR, 4% a car, and 8% a credit card.  Of the 14% industrial working class 92% have a color TV, 13% a VCR, no cars, and 5% a credit card.  And of the 15% struggling working class 63% have a color TV, no more than 10% a VCR, car, or credit card.
Therefore, television advertising should be the most important option in order to reach the target markets.  Most of the Latin American countries permit limited advertising throughout the the day.  There might be from three to four intermissions during a movie in most countries compared to five or six intermissions during soap operas, variety shows and newscasts.  
Variety shows are very popular in Latin America.  These shows contain contests in which the audiences participate in, they contain short comedy skids, and musical guests.  Many of these shows last for several hours and others showing from 12:00-1:00PM, when many workers go home for lunch.  The most popular of these shows, and a perfect example of MNC’s targeting the Latinos in the U.S. as well as in Latin America, is Sabado Gigante.  This show is seen throughout every Latin American country.  Advertising is done live by the host and co-hosts of the show.  The power that some of these stars have over their audience is enough to convince them of purchasing a particular brand.  For example, Pepsi ‘s ad using its slogan  of  “the taste of a new generation”  is done live by having the host take a sip and say in Spanish  “el sabor de una nueva generacion”.  The meaning of this is exactly the same as in English and no need to change the translation in order to adapt it to Spanish was necessary.
During the transmission of sports events, advertisers are able to obtain spots while the games are showing.  Images in the corners of the screen can be placed for a very brief moment and are usually composed of a miniature cartoon of the sport that is being played.  
Credit card offers could be attractive if used effectively; these should only target the elite and middle upper classes due to the high risk of default with the steep fluctuations in exchange rates.
Newspaper circulation is large amongst Latin American countries.  Magazines are local publications usually containing topics of social interest such as gossip on movie stars, TV stars, or political personalities.  “Hola” magazine, a publication from Spain is targeted towards all Latin America and along with international topics on international stars it is adapted for local content.  Many MNCs use this publication as one of their top promotional campaigns for its large audience.
Newspaper advertising is commonly used.  Most of it is done by the larger corporations because of the high prices and demand on available spaces.  Very important are negotiations with grocery stores which will include one’s product in the weekly “shoppers”.  In most cities in Puerto Rico as well as in most metropolitan cities in the rest of Latin America “shoppers” are used extensively.  
Most negotiations with retailers and distributors, for the promotion of products, demand a great deal of commissions, so advertising alone will not ensure purchase of your product but merely create awareness of it.  

Language
It is not just Spanish!  MNCs must take into consideration that there are different local, and regional slang words that cannot be used in a global strategy.  The dictionary meaning of the word “coger” is “to grab”; in Puerto Rico, Dominican Republic, and most of the South American countries it is used as such, however, in Mexico and Central America it is used often as a dirty slang for the act of having sex.  In all Latin American countries, “bicho” stands for an insect, in Puerto Rico, however, it is used as a dirty word for the male reproductive organ.  For bathtub some countries use “tina” others use “banera”.  For shower some countries use “regadera” others “ducha” which might not be appreciated on some countries because it might be understood as douche.  For tires some countries use “llantas”,  “gomas”,  or “neumaticos”.  Aside from different words, some of the Central American countries such as Honduras, Guatemala, and El Salvador use a variation of the pronouns “vos”, and “vosotros” which derives from the old Castellano used by the Spaniards at the time of colonization; it is still widely used in Spain.  These are only a few examples of diversity in local and regional vocabularies. 

	COUPONS
This form of promotion has been basically unknown due to the infrastructure and technology necessary in order to redeem these.  It was not until a few years ago that this strategy has been used but with small success.  There seems to be some link between the coupons and the cultural attitudes of the Latin Americans which links them to welfare and a sense of shame by the consumer in redeeming them at the cash register lines. 

	SPECIAL OFFERS
Special offers and packages seem to work well.  Consumers do not link these offers with welfare but link them to a bargain they have just made.  They feel proud of their purchase as opposed to shame in the welfare or discount they receive from coupons.

OPPOSITION To Marketing FACED BY MNC’s
There has been opposition to local advertising by foreign multinational corporations in several countries, including Chile, Argentina, Mexico, and Paraguay, by advocates of what is known as the Dependency Theory.  According to the dependency theory, which tends to have a socialistic point of view, advertising by multinational corporations is changing the attitudes of consumers in Latin America for the worse.  Advocates of the Dependency Theory believe that foreign multinational corporations are doing business in the Latin American countries in order to exploit them; therefore increasing the capitalistic wealth of their countries and delaying further growth for these countries.  This theory explains some of the reception that many MNCs have received throughout Latin America. For its opponents, Dependency Theory evokes fears of Marxism, communism, radicalism, and general disrespect for established academic procedures (Tansey and Hyman 1994, p.28).  For its adherents, Dependency Theory threatens only defenders of the status quo, wealthy capitalists, and imperialist pigs.  Advocates argue that foreign MNCs use TV and radio advertising, marketing research, and R&D to create new mass markets that only they can service.  Such markets are typically oligopolistic in nature because the expenses involved in advertising and research create entry barriers  for local entrepreneurs.   
The “dependentistas”, as advocates of this theory are called, have seven propositions with which to base their evidence as to the negative effect that foreign multinational advertising has on Latin American countries.  The following are true for TV or radio: 1)  Advertising by MNCs (AFMC) promotes conspicuous consumption among affluent Latin Americans (encourages consumption of nonessentials).  2)  AFMC promotes conspicuous consumption among the poor of Latin America.  Whereas newspaper and magazine ads promoted consumption of  nonessentials by the affluent, TV and radio promotes drinks, cigarettes, entertainment and travel among all classes (which does away with necessary income).  3)  AFMC promotes unhealthy lifestyles (promotion of cigarettes and non-staple goods takes away from healthy purchases).  4)  AFMC distorts local cultural values (by imparting U.S. norms to the Latin American children and teenagers). (Tansey and Hyman 1994, Pp.33-37).  5)  U.S. ad agencies continue to dominate the ad industry in Latin America (in 1979, 58% of the continental countries and 92% of the Caribbean).  6)  Programming and ads only flow from the Industrialized nations to the Latin American countries.  7)  A U.S. style media leads to excessive advertising clutter. 


CONCLUSION
Only a fool (or a person who has led a very cloistered life) would fail to recognize that consumers in each Latin American country have distinctly different tastes and patterns of consumption (Secunda 1994, p.150).  The previous statement is true but, does not mean that a Latinobrand or, better yet, a pan-regional strategy will not work for Latin America.  What it means is that marketeers must build pan-regional strategies on similarities and adapt their standardization on the different patterns of consumption, including the previously mentioned environmental forces.  
There are many factors which affect the process of decision-making when dealing with Promotional Strategies.  There is great potential in pan-regional campaigns for the Latin American target audiences but, we cannot assume that all Latin Americans live under the same economic conditions, have obtained the same amount of education, have the same cultural attributes, or use the same everyday vocabulary.  We must foresee the need to adapt our global campaign by regions, and socioeconomic trends.  Billboards, TV ads, radio ads, and  special offers will have a high degree of success.  Coupons, tele-marketing, and “mail-in offers” or “gifts” will not succeed due to infrastructure inefficiency.  
According to some members of the advertising community, “creatively, the trend is about how the advertising is executed - pan-regional rather than individual agencies in each country,” says Benedico.  “Agencies and clients need to be more centralized.  And we’re offering a window to the Latin American world” (A.C. 1996, p.20).  The trend has been for advertising agencies to integrate their creative departments in Miami and work out of there while leaving the local subsidiary to work on the implementation of the strategy.  Some of the agencies doing this include Young & Rubicam, J. Walter Thompson, and Del Rivero Messianu (whose clients include McDonald’s, Continental Airlines, MCI Communications, and Volkswagen.  Gossage comments that “Miami is emerging as the creative hub not just for the U.S. Hispanic market but for Latin America” (Gossage 1996, p.20).   
“Key to creating pan-regional advertising, says Pimental, is humor and emotion.  ‘Latins do everything more emotionally,’ he says.”  “We like our advertising with more music and color and more body language.  Pan-regional advertising has big potential, and clients are just beginning to discover it” (A.C. 1996, p.20).   
There seems to be many obstacles for an MNC to create a Promotional Strategy for Latin America, but there is help available.  The main opposition seems to come from the so called Dependentistas, or advocates of the Dependency theory, who seem to have socialist point of views, stand for the working class and despite advances made by the affluent classes.  These thoughts dependentistas have are agreeable to certain extent but, the capitalistic and classic economic models have been proven to work in our societies and have been the foundation by which all these pacts and treaties have based their ideas on.  There is a belief that the attitude of the Latin American youth is changing or, as they say, is becoming more “Americanized,” which should be “more like “U.S. youth’s attitudes” since all people living in the three continents are “Americans.”    The truth is that they are not becoming more “Americanized” nor more “Europized” nor more “Russianized”, the reality is that the world as a whole is obtaining little bits and pieces from the different cultures which suggests that everyone is becoming more “globalized”.  Tele-communications have and will continue to bring ideas and norms a bit closer together for people from different countries.  There will always be those who oppose this but, the majority of the people will support it.    
Weekly, Monthly, Quarterly publications and research analyses are now within seconds of the MNC’s through the Internet.  Tele-communications have facilitated the process of researching for information for any given country.  Also, the enactment of treaties and pacts such as NAFTA, Mercosur, the Andean Pact, and a common market in Central America will encourage participation in export programs and should remove barriers for promotion.  From this, we can conclude that Latinobrands can be successful if  a “pan-regional” promotional strategy is implemented.

BIBLIOGRAPHY
A.C. (1996), “Creative Hotbed: Mas Musica,” Adweek, January 1, p.20.
	
Gossage, Howard (1996), “Creative Competition: Equal Opportunity,” Adweek,  	January 1, p.20.

Pesky, Grey (1994), “Scouting Report,” Sporting Goods Business, February, Vol.27Issue 2, Pp.132-136.

Rosenthal, Robert (1995), “More Different Than Not,” Adweek, Oct.23 Vol.36              Issue 43, p.46.

Secunda, Eugene (1994), “Freedom of Choice and the Future of the Latinobrand,” Journal of Global Marketing, Vol. 7(3), Pp.149-155.

	Tansey, Richard and Hyman, Michael R. (1994), “Dependency Theory and the Effects of Advertising by Foreign-Based Multinational Corporations in Latin America,” Journal of Advertising, March 94, Vol.23 (1), Pp.27-42.

Zbar, Jeffrey D. (1995), “Gallup offers new take on Latin America,” Advertising Age, Nov. 13, Vol.66 Issue 46, p.21.