Abstract
As Latin America moves towards 2020, consumer spending is expected to overtake resource extraction as the engine for economic growth. However, the international business community still has only a surface understanding of the peculiarities of Latin American consumers and marketplaces. More importantly, there is little academic or even practitioner-generated guidance for producing meaningful consumer research in the Latin American context. This chapter addresses some of the relevant consumer research issues and challenges in the dynamic marketplace that is Latin America and serves as a useful point of reference for international marketers and investors seeking to explore the opportunities that exist therein. The chapter also gives a brief summary of current consumption trends in Latin America, in an effort to highlight the uniqueness and dynamism that render consumer research a necessity rather than a choice for prospective entrants.
TopThe Latin American Consumer And Marketplace
The first years of the new millennium have been defining ones for the countries and the peoples of Latin America (Valores, 2012). During that time, approximately 12 percent of the region’s 550 million people entered the middle class. In countries such as Colombia, the middle class has grown by as much as 30 percent (Levitt, 2011). The expansion of the middle class is a critical marker in emerging markets as it translates to an increased demand for an array of quality and high-end consumer goods (Solomon, 2009; Schiffman & Kanuk, 2010).
As expected, this growth in Gross Domestic Product (GDP) across the region has been accompanied by a virtual explosion in consumer spending across all income levels, since earnings from mining and exploration have ameliorated the social and economic conditions of even the poorest of Latin Americans (Global Intelligence Alliance, 2011; Valores, 2012; Levitt, 2011). Nevertheless, practitioners warn against adopting a regional or national mass market approach. The 2012 Wharton conference highlighted five Latin American experts: 1) Nick Handrinos of Deloitte; 2) Augusto Garzon, a Managing Director at Unilever, Latin America; 3) Joel Muniz of the Boston Consulting Group; 4) Juan Carlos Lombera of Colgate Palmolive; and 5) Andre Barbieri of Itaú Unibanco. All agreed there is no such thing as a “Latin American market”. Despite strong evidence of similarities across cities and countries – for example, the insatiable desire for Internet-based and technological products among Latin youth (Jarski, 2013) – there are some important aspects of consumer behavior which are country specific, income/class specific, or even lifestyle specific.
Key Terms in this Chapter
Consumer Research: The study of consumer behavior.
Psychographic Segmentation: The division of buyers into groups based on their lifestyles, personalities and social class.
Cashonomy: An economy where the majority of transactions are conducted in cash and persons do not typically form relationships with banks.
Latin America: The region of the world that encompasses South and Central American and Mexico.
Monolingualism: The ability to converse in one language only.
Test Marketing: The launching of a good or service in a limited geographical area to measure market response and to revamp the market offer where necessary prior to full commercialization.
Consumer Behavior: The behavior that consumers display in searching for, evaluating, buying and using goods and services.