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LATIN AMERICA<br />

THOUGHT LEADERSHIP<br />

TOP 50 MOST VALUABLE LATIN AMERICAN BRANDS 2015<br />

THE MACROECONOMIC<br />

ENVIRONMENT:<br />

A CHALLENGE<br />

TO BE OVERCOME<br />

At the beginning of this year, I<br />

had the chance to take part in<br />

an event in Ecuador, attended<br />

by the main entrepreneurs and<br />

celebrities of the country. There,<br />

a famous economist was talking<br />

about “the perfect storm”:<br />

a decrease in global demand,<br />

the collapse in the price of oil<br />

(on which so many countries in<br />

our region depend), and the US<br />

dollar high appreciation.<br />

GONZALO FUENTES<br />

CEO<br />

Millward Brown, Latin America<br />

Gonzalo.Fuentes@millwardbrown.com<br />

In addition to this challenge shared by the whole region,<br />

Mexico and Brazil, the two largest economies in the region,<br />

are facing barely positive scenarios. At the end of July,<br />

Standard & Poor’s kept Brazil’s country risk rating at –BBB,<br />

but changed its outlook from “stable” to “negative”.<br />

In the case of Mexico, the Enrique Peña Nieto administration<br />

was confident that last year’s structural reforms would<br />

boost the country’s economic growth. However, the impact<br />

of these reforms was strongly affected by a difficult<br />

economic and social environment, which led to a very large<br />

cut in public investment and expenditure.<br />

WITH CHALLENGE<br />

COMES OPPORTUNITY!<br />

Although the social and economic environment is<br />

challenging, investment in the creation of great brands is<br />

needed more than ever. This is evidenced by the fact that in<br />

our ranking BrandZ Top 50 Most Valuable Latin American<br />

Brands, the joint value of the 50 main brands in the region<br />

had a 2% increase against last year. The Brazilian beer brand<br />

Skol had a 20% growth, which made it the most valuable<br />

brand in our region.<br />

How can brands continue to grow in such adverse scenarios?<br />

Brands that grow do so because they adapt to the new rules<br />

of the game, they understand how these impact consumers,<br />

and based on this they look for solutions considered<br />

innovative and relevant by their market. Thus, the secret is<br />

simple, but it is the details that count.<br />

A good example of adaptation to a new scenario is the<br />

Mexican brand Bodega Aurrerá. Seeking to respond to the<br />

evolution of demand (consumers with less time “to do the<br />

shopping”, but still looking for inexpensive and local options),<br />

in 2008 it created a format called Bodega Aurrerá Express.<br />

This has helped it to gain share in the informal market, due<br />

to its value proposal: low prices and convenience. In 2014,<br />

Bodega Aurrerá continued this expansion, adding 45 stores<br />

in that format. The success is clear: in a sector with brands<br />

facing important challenges —brand value in the retail<br />

sector as a whole decreased 15%— Bodega Aurrerá had a 10%<br />

value increase.<br />

The new challenge for the retail sector will be related to<br />

the development of e-commerce in our region. In 2014, 110<br />

million Latin Americans made at least one purchase online,<br />

almost 13 million more people than in 2013. This constitutes<br />

a challenge not only for this sector —for brands from other<br />

categories such as Alibaba already present in Brazil— but<br />

also for brands, since the purchase process and the context<br />

are clearly different.<br />

BRANDS AS 'EXPERIENCES'<br />

ACTIVATORS<br />

There is no doubt that consumers are human beings first,<br />

and that some countries in our region are going through a<br />

difficult situation. Brands have the opportunity here to offer<br />

playful experiences that unite consumers and allow them to<br />

enjoy small pleasures, while building equity and encouraging<br />

consumers’ loyalty.<br />

The digital development allows acceleration of this<br />

process and going from “brand image building” to “creating<br />

experiences with brand content”. The trick is doing this<br />

without the brand seeming too intrusive.<br />

Skol is a brand that understands its role is not that of the<br />

main character at the party, so to speak, but a vehicle for<br />

its consumers to have a great time: it takes advantage of<br />

important social events to join the party.<br />

Last years’ events provided an amazing stage to become<br />

this companion: from being the main sponsor of Rock in<br />

Rio, to taking part in the traditional Festas Juninas and the<br />

Brazilian Carnival, and all the way to the Football World Cup,<br />

Skol made great efforts to become part of these playful and<br />

high-engagement moments.<br />

For example:<br />

• This brand invests in more than 2,000 events so as to<br />

“stay close to customers”.<br />

• For the World Cup it created “Albergues-Consulados”<br />

( Embassy Shelters), where consumers were invited to<br />

become Skol ambassadors and receive foreigners in the<br />

different host cities.<br />

• It also used a digital platform to create what was called<br />

“Gringo your selfie”. In this activity Skol asked Brazilian<br />

consumers to take selfies with fans from all the countries<br />

competing in the Cup in less than 24 hours. The prize? A<br />

trip around the world!<br />

To sum up, the changes and challenges our region is facing<br />

constitute opportunities to grow by means of the elements<br />

that have always worked: innovation and relevance. My<br />

advice is that, now that we are tempted by too much<br />

information and all kinds of data, we should not forget the<br />

basics: to be close to our consumers. This book and the<br />

BrandZ Latin American ranking present 50 brands that<br />

seem to understand this quite clearly. Enjoy!<br />

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