Holidays at home

After nine months in Brazil I'm back for a couple of weeks in Belgium. A long break to enjoy summer in Europe!

This means that I won't post that much. But being back in a different environment will no doubt give me good material for future posts!

Smuggling brands across the border

Brand loyalty drops in an economic crisis. And brands battle to maintain or increase market share.

Some are launching new brands. Others are bringing established brands from different countries.

Colgate-Palmolive for example brings brands that are strong in Mexico into the United States. Apart from being sharply priced, they sell well among the big Hispanic population.

The company already had success with this strategy. It has been importing Suavitel fabric softener for over 10 years. Today that brand's market share is at 12%.

Now Palmolive does the same for shampoo brand Caprice on the US market.

The shampoo market is already heavily contested, so why might this be a good idea?

Isabel Valdes says the following in an article on AdAge: "I call this the bounty of brand heritage. If it's a brand you grew up with and liked, if you missed that brand and that brand comes to you, you have a marketing advantage."

Emotions can play a significant role in brand loyalty, especially when you are far from home!

More story on AdAge.

Brands for the poor

The economic crisis is hurting many people in their wallets. And when times get though it are private label brands that sell well. These store brands however take away sales from the more expensive national brands.

So why do national brands not create a new low-cost version of their brand?

Brand extensions are always risky, especially if the new brand has a lower perceived value than the original brand.

In January P&G started testing a basic version of its Tide laundry detergent, 20 percent cheaper than the "real" one. Half a year later the company is stopping the test and pulling the basic version off the shelves. In the future it will follow a strategy that involves other brands from its portfolio that have a lower price and different brand image.

This failed introduction however was not a shot in the dark. The company already successfully introduced other basic versions of established brands like Basic Charmin toilet paper.

A safer but more expensive option is to create a new brand instead of an extension of an existing one.

This can be a temporary move, a so called fighter brand until times get better again. It can also be a permanent one, targeting a different part of the population.

In Brazil the C-class is the focus of attention of many brands. A and B are the top incomes while D and E are low income families. With incomes rising, the number of people in the C-class is growing rapidly.

Brands that currently target a higher part of the market are now using their expertise to bring a lower-cost brand onto the market.

Low-cost branding in Brazil

Kopenhagen, a Brazilian chocolate maker, launched Brasil Cacau, a new brand that fills the gap that showed up in its market research. Prices are 30% to 50% lower than the Kopehagen brand. Like the top brand, Brasil Cacau has its own stores.
A couple things are different however, the brand image is more sober. Less sophisticated than the Kopenhagen with its European brand associations. The stores have different locations and their design is less luxurious.
Today there are 80 stores and the brand accounts for 10% of the company turnover.

Lorenzetti, manufacturer of bathroom accessories like shower heads and water tabs created a new brand called Fortti. The products are more basic and prices are 80% lower.

One of the reason behind the brand is the upcoming government social housing projects. With 1 million houses in the pipeline having an established brand targeted at exactly this market might be gold.

Claudina, a luxury women shoe company launched a new brand called Vitória Ometto.
Prices are 75% lower. This because the shoes are produced in higher volumes and more synthetic components are used. Today their main market is in the North and North-East of Brazil, a region that has a big population growth.

Intense a C-class product line created by cosmetics company Boticário also seems successful. But contrary to the other brands described above, it is more a sub-brand. The name Boticário is present on the packaging, and the products are also being sold in the Boticário shops. This is not without danger for the main brand especially with prices up to 50% lower for some products.


All these companies see the growing  importance of a lower cost brand. A second reason why these second brands can be benefitial for the company is increased capacity. By moving to larger facilities, costs go down. For all brands.

In India there are also a bunch of brands for the poor.

A different kind of ambush marketing

There are not enough beautiful women on this blog. And since beautiful women are one of the most famous exports of brazil, it is important not to forget them!.

But todays curious case of personal branding involves a woman from Paraguay called Larrissa Riquelme.

She used the platform of the World Cup to promote her personal brand. With a modest investment (travel there, some match tickets) her brand awareness went up dramatically which will no doubt will get her new opportunities.

So was it a conscious decsion or a lucky break, nobody will know?

Speaking the lingo

If you look at the packaging of any consumer good, it is not uncommon two find two or more languages.

Companies do this is to avoid the cost of having to design a package for each country in specific.

• Belgium: Packaging with two of the three official languages. (Dutch and French for those wondering. Designed for a market of 10 million people.
• Brazil: Packaging in two languages, Spanish and Portuguese. Good for whole South-America, a market of 355 million people.

The example above is about cost savings. But providing an extra language on a package can have other functions too.

In the US some marketeers are using Spanish on packaging and in communication to cater to the needs of the huge Hispanic population. (Image above is a campaign from Coca-Cola for Dasani water)

The main reason is not because most of them don't understand English, but to give them the feeling that they are not being ignored by the manufacturers.

This offers an opportunity for brands to get closer to this ethnic group. And with a huge expected population growth being close to them might have a big impact.