online marketing psychology

March 29, 2010

Brands of Brazil: Embraer

the company

Embraer is a Brazilian aircraft builder. Number three in the world after Boeing and Airbus.

Like many big Brazilian companies Embraer has its origins as a public company. In the early nineties the company found itself in trouble when a combination of high oil prices and the end of the Cold War froze demand. Privatization was one of the solutions. But on its own feet the company had to face other challenges such as rapid technological changes, shorter product cycles and more difficult access to funding.

Today the company builds planes for commercial and military use and also builds executive jets. The company focuses on niche markets and serve these. In the commercial aviation this meant building an airplane that other manufactures didn't offer. For example smaller planes or planes that can operate in a tougher environment such as bad weather and low quality runways. In their military manufacturing they created less sophisticated products compared to the products produced in industrialized regions. This allowed them to sell at a much lower costs and thereby supplying opening some different segments.

"It's not our intention to go head to head with Boeing and Airbus." said CEO Fred Curado. These niche markets is where it tries to compete. There Bombardier is one of their main competitors.

Embraer is one of the biggest exporters from Brazil (clients in more than 100 countries). This focus on exports has allowed them to work on a bigger scale.

the brands
Embraer logo aviation industry Brazil

Embraer, short for Empresa Brasileira de Aeronáutica, is the corporate brand. In the commercial aviation it is also used in combination with a model number.

In the executive aviation they have tried to build the Phenom and Lineage brands.

More Brands of Brazil!
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March 23, 2010

The danger of sponsoring a big event

Being an official sponsor for a big event like the World Cup Football or Olympic Games costs a lot of money. Money that is additional to any campaigns or initiatives at these events.

That is why a lot of brands try to be the unofficial sponsor. Getting the attention without paying the official price. There is a term for it, it's called ambush marketing.

Using event names and logos among other things is not possible. So it requires some creativity from brands to use this to their advantage. This goes from sneaky TV ads to taking control of a hosting city's billboard space.

At the past Olympic Winter games American carrier Verizon used some winter sports analogy in its commercial despite  AT&T being the official sponsor.

The upcoming FIFA World Cup already knows some of its adversaries:
  • Pepsi released and ad called "Oh Africa". Situated in Africa, featuring three international stars playing a game of football. Giving official sponsor Coca-Cola already a warning before the event has even started.
  • South African airline brand Kalula put out an ad avoiding any direct references, calling the World Cup The You-Know-What. A rather playful ad which promptly got the attention of the FIFA lawyers.

Although ambush marketing is situated in a gray zone, it is competition. So it requires the official sponsors to think these possible attacks through and try to prepare against them.

After all, if you pay that much money, you should not be caught with your pants down!

March 17, 2010

Beer battles in Brazil

Things are moving on the Brazilian beer market.

Inbev is introducing its American flagship brand Budweiser. The brewer is already pretty dominant in the pilsener market. In the premium import beer category it has Stella Artois in place, but the competition from Heineken is fierce.

It wil be interesting to see how Inbev will market Budweiser to take on Heineken. It is a challenge how they can avoid cannibalization for its Stella brand. I'm not sure if there is place for so many (expensive) import beers on the price sensitive Brazilian market.

Dutch brewer Heineken however is following a similar strategy. After the recent acquisition of brewer Femsa it gained a larger control over the Brazilian market.

And now they are using this distribution to launch five import beers. Dutch beer Amstel Pulse, Italian Birra Moretti, Austrian Edelweiss and Irish beers Murphy's Irish Stout and Murphy's Irish Red.

Not sure what their strategy is. To fill the market, or to make it harder to launch new brands.

Although not a new beer, Devassa Bem Loura (Good blond) attracted a lot of attention lately. The company hired Paris Hilton to shoot a video clip and make some promotion at this years carnival.

Hire her and you get drama.

Not only did her drunk escapades during that carnival attract some attention. Maybe even more brilliant was the controversy surrounding the advertisement. Media all over the world wrote about the ad.

Although I'm not a fan of the commercial, the decision to remove it from TV because it is too sexy by government agency Conar seems a bit overreacted. Although ruling on commercials is strict, the ad is nothing compared to the content of the actual television programs.

Some claimed the complaint and controversy was just brewer Carolschin's PR machine in action. And while it did attract a lot of free press and coverage, it remains to be seen if this campaign pays off. With a price of R$100 million (about 40 million euro) it remains to be seen if the campaign pays off. (Paris Hilton is rumored to have taken about $700,000 of that budget)

If you have any more clues or opinions about strategies of Heineken, Inbev, or Devasse, please do share in the comments!

March 9, 2010

How brand focus can make you profits.

The cost to launch new brands, especially on a global level is huge. So what if you are a CPG producer and launching new products is an important aspect of your business?

You start focusing on improving existing brands.

One fact that really surprised me was that Reckitt Benckiser (CPG manufacturer with a market value of £21billion) only launched one new brand in the last ten years.

One brand!

So instead of looking for new brands. They focus on two things:
  • Existing brands (in 2000, their top 17 brands were responsible for 40% of the revenues. Today they account for 71%)
  • Markets were they can have the top position or where there is a lot of growth potential
While they only launched one brand in these last ten years. A lot of new products got introduced as extensions. Probably some of these have failed. Luckily the investments in an extension are a lot lower then the cost of launching a completely new brand.

On the other hand, this strategy might have cost them another successful product. That, if they had launched it as a separate brand, might have been a hit!

Rolling out new brands globally is a very expensive exercise. It’s much more likely that you will see the bulk of new innovations in our existing brands.
CEO Bart Brecht
However it is more a safe strategy trusting the reputation you have build up on certain brands.

This focus on existing brands is remarkable in the CPG industry. And it has paid off. Their stock grew an impressive 400%, well above sector average.

Let's hope this brand focus inspires some other companies.

March 3, 2010

Brands of Brazil: Vale

Vale, the next in our Brands of Brazil series, has already conquered the world. It is the second biggest mining company in the world.

They are digging up iron ore, copper, nickel, coal and other products all over the world. However the main part of their revenue is generated in Asia.

Vale is also active in logistics and energy, it owns a serious railway and harbor infrastructure and a couple of electricity plants. These activities are meant to allow the company to keep the costs low and diversify the risks of the commodities.

At the moment they are still involved in other operations like steel production. But the aim is to build off these activities and focus on mining.

the brand

In 2007 Companhia Vale do Rio Doce (CVRD) changed its name to Vale.  A re-branding operation that was accompanied by an investment of $50 million to increase familiarity with the new name and the logo. The name refers to the origin of the company, located in the valley of the Rio Doce river. The logo also reflects the valley.

Because Vale is mainly active on the commodities market, their products are not branded.

Their main brand is the corporate one: Vale


Although it is a B2B company, the company advertises a lot to the consumer. These ads appear in newspapers and on TV.

And they don't limit themselves to the Brazilian market. Check this ad featuring football player Ronaldo that aired in China.

The main focus of these ads is on brand building and informing the public what it is that Vale does. The message that is that they are massively investing in the future of Brazil.

One of these investment lead to the creation of the Vale Institute of Technology at the Federal University of Pará.  The institute has a budget of R$4 million (about €1.6 million) to distribute among researchers masters and doctorates.

The research topics do not only concern engineering but also other disciplines: computer science, aquatic ecology and neuroscience among others.

The invested money, and television spots to make the public aware of this institute, enhances the image of the company. While a company like this, active in such traditional industry, could easily have the reputation of being boring, an initiative like these shows that innovation is important for the company.

Follow this link to discover more Brands of Brazil.