Latin America's retail landscape has changed dramatically over the last 20 years. Attracted by deregulation and a sizable and growing market, modern retailers arrived looking for the next El Dorado. But signs of maturity appeared much before expected. Traditional retailers modernized their offer, while keeping their appeal to the emerging consumers. While chain retail has concentrated earlier than expected - and faster by the hand of crisis that are usual in emerging markets -, local chains have developed formats which add modernity to their understanding of their customers' base. By providing better access through convenience and credit to a broader range that even includes affordable design and quality, local chains are showing the way to the growing mass customers that form Latin America's new emerging middle class. And leveraging on this customer understanding, they are redefining concepts like convenience and crossing borders to grab the opportunity of the new emerging consumers. This article covers the evolution of retailing in Latin America over the past two decades, and provides insights on the segment that has brought the most significant growth: emerging consumers.

You can learn a lot about consumer marketing in the developing world by looking at the practices of its leading retailers. Multinational retailers have been slow to understand consumers in the developing world. As a result, they’ve been vulnerable to local competitors that know how their shoppers think, what they crave, and how they buy. These local retailers offer some valuable lessons: Forget the myth that the high end is the most lucrative segment. In emerging markets, the number of affluent consumers who could champion your product is small, and the wealthy tend to favor shopping trips abroad. Instead, aim your products at low-income segments from the start. Cater to consumers’ tendency to buy a lot of the cheapest products and a little of the best by providing decent quality at the low end and aspirational choices at the high end. Turn your stores into centers of learning, where shoppers can fill the gaps in their product knowledge. Expect the unexpected and develop quick reflexes—you’ll need them to deal with the rapid market expansion and demographic change of emerging economies.

This study explores the Latin American retail landscape to identify key pillars upon which innovative business models rely. In a region where retail innovation has traditionally been targeted at high-income consumers, we find a new breed of retailers that cater to the large mass of emerging consumers. Using qualitative research methods, we delve into the minds of Latin American emerging consumers to uncover their needs and paradigms. We also pinpoint the avenues of innovation retailers have followed to serve this impoverished segment. We find that retailers’ efforts to innovate have resulted in at least three original retail formats: one centered on providing access to durable goods, another centered on offering a wide assortment of goods and a convenient location, and the last one centered on incorporating design and quality. Based on the wheel of retailing theory, we show how these new formats are changing the structure of the retail industry in the region

In June 2001, Empresa Editora El Comercio (EEEC) had launched a new popular newspaper, Trome, for low-income families in Lima, Peru. Although several studies had preceded this launch, sales in following months failed to reach expected levels and actually displayed a decreasing trend. Trome embodied the company’s effort to expand its news coverage to new population segments that were not served by its other newspaper, El Comercio, a market leader that had served as the foundation for the company itself. Six months after Trome’s launch and faced with dropping sales, company managers had met to discuss their options. This case describes management team members’ dilemmas at that meeting: “Should the new paper’s style and contents be changed? Should Trome focus more on sex and violence-related issues, as its competitors did? Would it be convenient to replace the silverware promotion chosen to support launching? Was the channel conflict adequately managed? Were intended readers’ needs truly and fully understood? Should the company re-launch Trome or would it be wiser to just give up on this project? This case was written in 2008 -although the information used was seven years old- to leverage its wealth of insights into base-of-the-pyramid (BOP) businesses. The delay in case elaboration was due to the extreme confidentiality surrounding these emerging markets’ scarce data. Newspaper market, innovation, new product launching, emerging markets, Latin America (LATAM).

Si nos guiáramos por las características estructurales del sector minorista, éste debería estar imposibilitado para innovar. Y mucho menos si quiere apuntar a los consumidores emergentes. Claro, los minoristas casi no tienen incidencia en los productos que venden, entonces mal podrían impulsar la innovación desde su lugar de vendedores finales de una oferta ya elaborada. Además, resulta que la innovación es costosa, y es altamente improbable que los consumidores emergentes estén dispuestos a pagar un sobreprecio por un producto innovador. ¿Se puede ser tan concluyente? En absoluto. Los autores, profesores del IAE de Buenos Aires, han adaptado el radar de la innovación (creado por los académicos de Kellogg School Sawhney, Wolcott y Arroniz) para el sector minorista, y con él han descubierto casos de empresas del sector que sí han logrado innovar para los mercados emergentes. La clave, sostienen los autores, estuvo en su capacidad de repensarse holísticamente a nivel de modelo de negocios, y a la vez encontrar las oportunidades en aquellas particularidades propias de su sector. Y sin descuidar, por cierto, las dificultades de cambio conductual que suelen surgir con las innovaciones. Tras realizar una investigación a nivel continental, los autores extraen tres lecciones a partir de igual número de parejas de empresas innovadoras de un mismo subsector: Hortifruti y Surtifruver, en los productos frescos; Casas Bahia y Magazine Luiza, en productos electrónicos y muebles para el hogar; y las cadenas de farmacias Similares y Guadalajara. Finalmente, se propone una herramienta para que usted evalúe las dimensiones de la innovación en su modelo de negocios para el sector minorista.

Actualmente la clase media latinoamericana –que cuenta con un ingreso familiar mensual entre US$ 500 y US$ 2.500– constituye 67% de la población de la región, y su taza de crecimiento la está convirtiendo en un mercado con un potencial insospechado. Lamentablemente, el sector minorista no suele investigar mucho a los segmentos que componen su clientela, y tiende a aprender sobre ella apelando al viejo método del ensayo y error. El estudio realizado por los autores –provenientes del Consejo de Investigación Minorista de Coca-Cola para América Latina y de McKinsey– incluyó encuestas a 1.900 consumidores de ocho ciudades en cinco países latinoamericanos, y arrojó importantes lecciones para quienes quieran complacer a la enorme clase media de la región. La primera es la importancia de la dignidad y la confianza, pues se trata de clientes que no tienen holgura económica, pero quieren disfrutar del poder que les da la compra. Para ello es clave que sean bien tratados y que confíen en quien les vende. Esto es muy revelador para un sector que suele pasar por alto estos conceptos, al menos en nuestro continente. La otra lección importante apunta a la segmentación de este sector, el que está compuesto por cinco tipos de consumidores: los escépticos con limitaciones financieras, los compradores funcionales, los clientes de conveniencia orientados a las marcas, los clientes sociales en busca de experiencias y los amantes de las marcas. Cada uno de estos segmentos valora desigualmente los atributos presentes en el famoso “pentágono minorista”, por lo que es importante que las empresas ajusten sus ofertas a las diversas idiosincrasias de estos segmentos y les entreguen lo que éstos valoran más.

Presented is an approach to classify a brand’s buyers into groups with varying degrees of loyalty along a continuum from “hard-core loyal” to “hard-core switcher.” A taxonomy is developed based on the joint use of stated consideration set and brand-switching data. In an empirical application to the automobile industry, classic stochastic models such as Grover-Srinivasan (J Mark Res 24:139–153, 1987) and Colombo-Morrison (Mark Sci 8(1):89–99, 1989), which attempt to recover the heterogeneity existing in the switching matrix overstate the number of hard-core loyals (buyers who repurchase with probability one) by 48% and 67%, respectively. The proposed taxonomy illuminates the sources of the overestimation and provides insights into the brand health of competing automotive makes. DOI 10.1007/s11002-008-9065-y

En los últimos años, la necesidad de atraer a los consumidores emergentes se ha vuelto el foco primordial para los principales minoristas latinoamericanos. Hasta ahora, atraerlos ha sido difícil debido a la insistencia en adaptar las fórmulas del retail que han funcionado en Europa y EE.UU., pero que tienen poco que ofrecer a consumidores con ingresos más modestos. Sin embargo, una investigación conjunta de The Coca-Cola Retailing Research Council–Latin America y la consultora Booz Allen Hamilton en 2006, –que combinó focus groups en Argentina, Brasil, Chile, Colombia y México con más de 200 entrevistas a consumidores en terreno y con un panel de expertos multidisciplinario– reveló que los grupos minoristas verdaderamente innovadores están logrando satisfacer a los consumidores emergentes de manera sostenida y rentable. Para ello, debieron derrotar cinco paradigmas muy arraigados en las mentes de los consumidores emergentes, que los alejaban de los productos que deseaban (por ser inalcanzables) y de los lugares que los vendían (por sentirlos inaccesibles y a veces hasta hostiles). Los minoristas exitosos latinoamericanos crearon una serie de nuevas posibilidades que pueden agruparse en tres plataformas de innovación dirigidas exclusivamente a satisfacer sus aspiraciones: brindar acceso a la compra de productos o servicios, con fórmulas de crédito más flexibles; ofrecer diseño, calidad y surtido a precios asequibles, rompiendo con el paradigma de que las tiendas bellas y bien decoradas deben ser caras; y proporcionar gran variedad y ubicación conveniente, acercando a estos consumidores los productos que necesitan. Empresas como Casas Bahia, Elektra, Casa&Ideas y Locatel, entre otras, ilustran cómo, con creatividad y flexibilidad, se puede satisfacer a este sector largamente incomprendido por las prácticas tradicionales del retail provenientes de otros entornos. Por lo mismo, lo que han hecho estas empresas merece exportarse a otras latitudes, sostienen los autores.

In 2002, Petrobras joined the Argentine fuel retail (gas stations) market. The venture faced several challenges. On the one hand, Argentina was undergoing one of the most severe economic and social crises in history. On the other, the local fuel market was dominated by a few players with brands that held significant consumer mindshare over many years. Additionally, personnel morale at Eg3 –the company acquired by Petrobras to enter the local market- was besieged by uncertainty and disillusionment as a result of a string of mergers and acquisitions and underlying H.R. management remoteness. Finally, the company’s Brazilian origin could jeopardize its appeal for Argentine consumers, given the cultural –and sports-based (soccer)- rivalry between these neighboring countries. The case presents this scenario and calls for decisions associated with service brand definition and strategy formulation for this company across its national borders.

Our two-stage framework predicts that during impression formation, individuals who hold ambivalent attitudes toward an issue are influenced by other sources regardless of their perceived reliability on the target issue. Less ambivalent individuals are presumed likely to check the reliability of the message’s source before accepting it. Experiment 1 finds that highly ambivalent participants do not differentiate between a more vs. less reliable source when forming impressions of a political candidate whereas less ambivalent participants do. Experiments 2 and 3 show that less ambivalent individuals’ attitudes can be influenced by less reliable sources if participants are unaware of this influence or if participants’ cognitive resources are curtailed.

Only two out of the five levers –prices and assortment-, are consistently and broadly relevant accounting for nearly 75% of the price perception. Consumers’ diversity was apparent and so their attitudes towards promotions. We identified five major segments with different price attitudes and reactions to promotions, that were present in all the five cities covered, though their proportion varied. Consumers considered a limited set of SKU’s to form this price perception, and promotions had a minor role, except for those segments more interested in them. Promotions may cloud price perception accuracy among consumers, and drive the existence of bigger “bargain hunting” segments. Value of paper How OSPI is built is a relevant issue for retailers. Promotions are frequently used to build traffic, but its role in the OSPI is not so clear. They may strengthen the bonds with customers, but may also have a negative impact. Retailers may benefit from these insights when defining their promotional strategies, especially when considering EDLP strategies. As the study is based on five capital cities in Latin America, its results may also be of interest to retailers working in other emerging regions.

Findings Rather than emphasizing their limited income, emerging consumers as a group represent a sizable market for consumer products. But they should not be addressed as a single group: peculiarities among them underline the need for further segmentation, as in higher –income segments. Their needs should be better defined as basic instead of just simple, and they don’t just go for the lowest prices or second brands, as they have marked preferences that characterize them. This also reflects in their shopping habits, which partly explains the resilience of the traditional/small format retailers. Our findings underline these segments relevance for consumer products, their rational behaviour as they try to reconcile their preferences with their economic reality, and how this explains their distinct set of products and format requirements. Practical Implications Marketers and retailers interested in catering to lower-income segments will find clues to understanding the preferences, habits and needs of these segments that represent a significant portion of emerging markets. Originality / Value of the paper Conclusions are presented here in the form of 6 common myths on emerging consumers that are contradicted by our findings. The relevance of this study comes not only from the significant size of this market but also from the possibility of marketers to emphasize the social contribution of business.

Findings In spite of being “poor,” emerging consumers have a substantial purchasing power as a group. They work with a very specific set of products, categories and store format needs that distinguish them from other consumers. These distinct needs imply that it is not “just a matter of money and time” for them to change their purchasing patterns over to the “modern trade”. In fact, the evidence shows that smaller scale retailers fit the needs of emerging consumers quite well. Despite perceptions that the small retail sector draws its resilience from informality, we conclude that that the sector can be surprisingly efficient. Furthermore, they retailers exhibit a sustainable business model. Value of paper Although a wide variety of studies have been developed around small-scale retailers, less effort has been devoted to learn about local storekeepers that are actually conducting successful business, especially in reference to less developed countries.

Economic systems are undergoing a generalized effort to improve corporate governance structures and processes. Waves of scandals and increasing public scrutiny push institutional regulators and corporate boards of directors to establish and adopt new practices. Codes of good governance have emerged as a primary tool to increase the effectiveness of corporate governance systems. Building on extant views of institutional change, the authors study the process of the institutionalization of codes of governance and the role of the different actors involved in issuing the codes. They define four groups of actors: law-makers, model makers, market makers, and governance enactors. They analyze a sample of 150 codes of governance introduced in 78 countries from 1978 to 2004 to describe the following stages of institutionalization: precipitating jolts, theorization, diffusion, and reinstitutionalization. This description invites thorough investigation of the content of codes of governance and the likelihood adopting such codes in a given country.

Los tradicionales tres estratos socioeconómicos ya no sirven para explicar las decisiones de compra de los consumidores. Los perfiles del comprador latinoamericano son cinco, y derriban varios mitos acerca de cómo construyen su percepción de precios. Las empresas que adapten sus estrategias podrán fortalecer sus propuestas y llegar a esos bolsillos.

Si nos guiáramos por las características estructurales del sector minorista, éste debería estar imposibilitado para innovar. Y mucho menos si quiere apuntar a los consumidores emergentes. Claro, los minoristas casi no tienen incidencia en los productos que venden, entonces mal podrían impulsar la innovación desde su lugar de vendedores finales de una oferta ya elaborada. Además, resulta que la innovación es costosa, y es altamente improbable que los consumidores emergentes estén dispuestos a pagar un sobreprecio por un producto innovador. ¿Se puede ser tan concluyente? En absoluto. Los autores, profesores del IAE de Buenos Aires, han adaptado el radar de la innovación (creado por los académicos de Kellogg School Sawhney, Wolcott y Arroniz) para el sector minorista, y con él han descubierto casos de empresas del sector que sí han logrado innovar para los mercados emergentes. La clave, sostienen los autores, estuvo en su capacidad de repensarse holísticamente a nivel de modelo de negocios, y a la vez encontrar las oportunidades en aquellas particularidades propias de su sector. Y sin descuidar, por cierto, las dificultades de cambio conductual que suelen surgir con las innovaciones. Tras realizar una investigación a nivel continental, los autores extraen tres lecciones a partir de igual número de parejas de empresas innovadoras de un mismo subsector: Hortifruti y Surtifruver, en los productos frescos; Casas Bahia y Magazine Luiza, en productos electrónicos y muebles para el hogar; y las cadenas de farmacias Similares y Guadalajara. Finalmente, se propone una herramienta para que usted evalúe las dimensiones de la innovación en su modelo de negocios para el sector minorista.

A fines de los 90, encaramos con John Quelch, colega de Harvard y amigo de muchos años, la publicación de un libro sobre estrategias de negocios de compañías en América Latina. Nos interesaba entonces retratar cómo algunas empresas globales adaptaban sus estrategias a las características de la región, y al mismo tiempo, rescatamos los casos de varias compañías originarias de la región que tenían un destacable desarrollo que las llevaba, incluso, a abrir mercados fuera del continente. La globalización anunciada en los 80 abrió las puertas de los mercados emergentes hasta entonces protegidos, y desató en los 90 privatizaciones de sectores y una ola de adquisiciones de empresas emergentes por parte de competidores internacionales. La baja de tarifas estimuló el intercambio y la llegada de nuevos productos importados que se imponían desplazando a la producción local. Pero muchas empresas encontraron que sus estrategias de productos y precios masivos solo lograban penetrar parcialmente los mercados emergentes. La ausencia de una clase media significativa y un menor poder adquisitivo cuestionaban la capacidad de penetración, en tanto el mercado masivo permanecía atendido por los fabricantes locales, qeu gradualmente fueron incorporando nuevas prácticas y desarrollando sus propios modelos de negocios. A fines de 2004, en una reunion del Consejo Minorista de Coca-Cola en Cartagena de Indias, Colombia, al buscar el tema de investigación para el siguiente proyecto y frente a la evidencia de las limitaciones de las estrategias de las empresas globales, surgió la siguiente reflexión: tiene que haber empresas innovadoras en la región que sirvan de ejemplo.

Los temas del libro La Esencia del Marketing progresan desde una mirada que procura ampliar la perspectiva, haica la creaciòn de valor, y luego entran algunos aspectos específicos que nos han interesado: la implementación efectiva de los planes-un recurrente problema-, el enfoque de servicios, la gestión en el punto de venta, los segmentos emergentes y la exportación. En este sentido, cada capítulo puede ser tratado de manera individual, así como las notas incluídas ya que fueron escritas de manera independiente, aunque este libro es testimonio de un hilo conductor que guió nuestro trabajo en años. Existen dos temas diversos que reflejan dos momentos muy distintos:mis intereses inciales y los más recientes. Mis intereses iniciales, se remiten a la expansión internacional de los negocios, un tema que ha mostrado ser particularmente difícil para los países latinoamericanos, dados los vaivenes de nuestras economías. Los más recientes se centran en mis últimas investigaciones que han transcurrido dirigiendo el Coca Cola Retailing Research Council de Latinoamérica, e invevitablemente nos topamos con las grandes masas de consumidores emergentes. Encontramos varios mitos, situaciones paradojales, y estudiamos estrategias para atraer y brindar acceso a mejores condiciones para la base de la pirámide.

La creatividad se devela en la confluencia de miradas y paradigmas diversos, con líderes creativos que funcionan como artistas de negocios, generadores de conversaciones y espacios que fomentan la creatividad de su gente y equipos de trabajo. Surge y brota vertiginosamente, una nueva manera de hacer negocios y de crear, no solo para el futuro sino también para el presente. Un tiempo que convoca formas de liderazgo para cocrear nuevos sistemas económicos, transformando la economía tradicional en economía creativa, producto de la interacción de miradas intrépidas e insolentes, despertando la unicidad creativa de cada individuo y convocando la comunión creativa de todos los individuos. La realidad actual sugiere un nuevo orden apasionante y novedoso, descarrillado y sorprendente. Implica coraje, pasión, y desenfreno hacia lo desconocido. Sugiere pedir perdón antes que permiso. Pero por sobre todas las cosas, esta nueva-vieja realidad, despierta un inusitado y desesperado apetito por re-energizarnos, renovando formas y sistemas obsoletos que generan aburrimiento y cansancio. En estas páginas, el autor ofrece con agudeza, simpleza y valentía herramientas simples para reconvertirnos en lo que ya somos, seres creativos que desean coconstruir una nueva manera de hacer negocios. Sin duda, el desafío de los próximos años.

The 20th century was a fascinating time in more ways than one, and retailing experienced its influence, mirroring the profound changes that reshaped social life. The accelerated transformation undergone by the manufacturing industry also reached the retail sector and fueled its dramatic evolution. It was amidst this increasingly complex environment that the late Michael O’Connor interpreted the need to gain a better understanding of the changing, complex issues that filled the retail landscape. And who better than the retailers themselves to define the areas where more light was needed? This initiative translated into the Research Councils, that were intelligently supported over these past twenty-five years by the Coca Cola Company and expanded from the United States first into Europe, then to Latin America and, more recently, into Asia. Thus, this overall experience offers a unique opportunity to look at how retailers view their own sector globally and from a regional perspective, as well as their inquiries about its evolution. This book only brings together these projects in condensed versions. However, it interestingly depicts the quest of retailers to improve their understanding of their own sector. The twenty-nine projects included comprise a significant wealth of knowledge, bringing clarity to different issues that caught the attention of retail leaders during this period of accelerated change. Many maintain their relevance to this day, showing how Council Members were often ahead of their time, anticipating trends that would impact and change the industry. They cover a wide range of topics and regions, and -perhaps somewhat arbitrarily, as in any classification- we chose to align these studies under four tracks: the look at the market, strategic insights, managing the most valuable and costly asset –their people, and extracting a profit. Readers will be entering into the fascinating world of retailing and the challenges it presented over the past twenty-five years, following on the footsteps of retail leaders from around the world. Their thoughts, concerns, questions and solutions are generously shared through the contribution of a Company that has learned to look beyond its own short-term interests. Full versions of the studies in this book may be found at www.ccrrc.org.

La creciente complejidad del comercio minorista hace que gestionarlo efectivamente sea un desafío cada vez más difícil. Este libro busca facilitar la ardua tarea que cada día enfrentan los directivos del retail. A partir de las presiones que soportan los minoristas presenta un esquema de formulación de la estrategia que avanza hasta la efectiva ejecución. Detall es Detalle. Es necesario no quedarse solo en el plano estratégico sino avanzar a la ejecución del día a día, tienda por tienda y producto por producto. Las Ocho Claves del Retail -el Triángulo y el Pentágono-, identifican los aspectos fundamentales de la estrategia minorista. El modelo de Gestión Estratégica de los Recursos Minoristas permite vigilar detalladamente la marcha del negocio para lograr la difícil rentabilidad de este negocio. Todo esto tratado sin perder de vista las características particulares del entorno minorista de los países emergentes. Cómo los pequeños minoristas también crean valor para satisfacer a los consumidores emergentes, y cómo los fabricantes adaptan sus políticas y prácticas para crear valor en el complejo universo minorista. El sector minorista ha evolucionado hasta tener desafíos estratégicos significativos y particulares del sector. Esta complejidad merece un análisis profundo y detallado. Esta obra representa la búsqueda seria y fundamentada sobre el diseño de la estrategia, las herramientas para su implementación efectiva, la medición financiera y de la productividad específicamente en el negocio retail, y el marco de las relaciones con los fabricantes.

Administracion de Servicios es un significativa revisión y reestructuración del muy recocido libro Services Marketing de Christopher Lovelock. Esta obra representa el primer intento serio y fundamentado para crear un libro en español en que se analizan las estrechas interrelaciones que existen entre los procesos de marketing, operaciones, y recursos humanos en las empresas de servicio. El libro contiene herramientas, conceptos, y estrategias que enfatizan el reto de adminstrar negocios de servicio en el ambiente competitivo de hoy. Hay numerosos ejemplos de diferentes empresas de servicio, especialmente de America Latina y España. Contiene también importantos resultultados de investigación, ochos casos de estudio (seís de los cuales son de empresas en paises de hablo español) y ocho lecturas de autores lider en su campo de estudio. Este libro es adecuado para estudiantes de carreras profesionales como para alumnos de posgrado y participantes de programas ejecutivos. Los instructores que lo utilicen puedan hacer uso selectivo de capítulos, lecturas, y casos para impartir cursos de diferente formato y duracion, y sea en Administración de Servicios, Marketing de Servicios, o Operaciones de Servicio.

This exploratory study identifies key pillars on which innovative business models rely in the Latin American retail landscape. First, using qualitative research methods, we delve into the minds of Latin America's emerging consumers to uncover their needs and paradigms. In a region where retail innovation has traditionally been targeted at high-income consumers, we find a new breed of retailers that cater to the large mass of emerging consumers. Second, we explore the avenues of innovation retailers have followed to serve this impoverished segment and find that retailers' efforts to innovate have resulted in at least three original retail formats: one centered on providing access to durable goods, another centered on offering a wide assortment of goods and a convenient location, and the last one centered on incorporating design and quality. Based on the wheel of retailing theory, we show how these new formats are changing the structure of the retail industry in the region.

 This chapter focuses on low-income consumers in Latin America, and on the retailers that serve their needs. We first highlight some macroeconomic data on the region, describe the research method followed, and then cover our major findings about low –income consumers( such as brand preference, frequency of purchase, ticket size, store selection criteria, their buying decision process, and so on). We then look at the retailers that serve these consumers’ needs and try to understand their business model and value proposition. Finally, we analyze both the performance and the fiscal behavior of smaller retailers.

What did local store chains do to successfully approach emerging consumers? Do emerging store chains organize differently to cater to this new market more effectively? With these questions in mind we set to study how emerging retailers are solving their access to emerging consumers around at different emerging latitudes. This project was sponsored by The Coca-Cola Retailing Research Council, and field work was commissioned to the WPP Group –The Store, The Futures Company and MVI-Kantar Retailing. Following a pragmatic approach and using qualitative research methods, we gathered information about six local retailers from different countries and sectors. To identify common marketing practices among the retailers in Emerging Markets, the information was examined according to the 8-ways-to-win in retailing framework , which features eight fundamentally proven dimensions of the retail business. Despite the differences in market contexts and execution strategies, we found some common principles that will prove useful to companies willing to perform in emerging environments. Although our limited sample cannot yield definitive conclusions, it showed six pillars upon which local retailers rely on to serve Emerging Consumers successfully. While in order to identify “best practices” in emerging markets most of previous research focused on the experience of Multinational manufacturers and Small-Scale retailers, our research focused on studying six local store chains all aiming at the same segments of emerging consumers. Each of the studied retailers has proven to serve its consumers successfully. We believe that the value of this study resides not only on its focus on large local retailers, but also on the diversity of sectors (consumer electronics goods, department stores, supermarkets, hypermarkets, hard-discounts, and franchise stores) and countries (Brazil, Peru, China, Poland, Turkey, and South Africa) covered.

This paper presents the results of a qualitative exploratory study which demonstrates that a buyer's personal motivation to build a relationship with a supplier is represented as a function of cognitive, affective, and behavioral components. Proposing value as an output based measure of supplier-buyer relationships we present a multi-echelon model which links relationship value and trust from the buyer’s perspective, and posits that these two constructs are impacted by a strong cognitive dimension, with buyer satisfaction as an affective dimension, with commitment and loyalty as functions of a behavioral dimension. Preliminary findings suggest that supply managers appear to be aware of the need to balance all key behavioral components efficiently, but there is little evidence to suggest that they have formal measurement systems to track them in order to evaluate relationship performance. It appears that when managers find that one particular relationship variable does not perform well, they can take steps to avoid unbalanced relationships by taking into account changes in other behavioral components through substitution. Implications for concept measurement are discussed, and possible paths for research are suggested in order to generalize the model.

After six years of negative net profitability, Officenet (ON), Argentina’s leading office supply vendor, started to show signs of positive results. However, its performance still lagged far behind STAPLES’ net profits. This U.S.-based global industry leader owned ON since the end of 2004. In mid 2005, Leo Piccioli took over as ON’s General Manager, knowing full well that his key challenge lay in driving ON to reach Staples’ profitability levels. He was also aware of the fact that one of the reasons for ON’s low profitability rested with the company’s sales force. Free to set prices for specific quotes, sales agents used to grant significant discounts (40 percent of the items in an order were priced below their regular prices) to their customers. Piccioli needed to revise the company’s pricing policy. Should ON change the pricing delegation practices that were so embedded in its organizational culture? Or could it raise its prices and maintain its current policies? How would its competitors react? The case describes this scenario, inviting class participants to delve into topics associated with pricing delegation and price policies.

In 2007, 3M Argentina’s management team was evaluating growth alternatives. Specific market development posed challenging questions for a company with a commercial scheme based on products. The team knew they should align the company’s organizational structure to the commercial strategy of choice, but how could they build an action plan that contemplated this alignment? Was it possible to grow through specific market development or should they consider other options? After analyzing each market’s core features and growth opportunities, and determining their complexities and how much knowledge the company actually had on each of them, two markets were selected: the wine business and the mining business. The former featured a local market with multiple actors engaged in complex relationships, while the latter exhibited a higher concentration at the international level. Each project displayed particular complexities at the domestic and international level. Therefore, they called for different management schemes. This case encourages class participants to discuss, in the first place, complexities arousing from the decision to implement specific market development and, second, to formulate an action plan for each market selected in order to achieve greater penetration and growth. This will require a deep analysis of each market’s structure, its specific customers and account management systems.

Upon becoming general manager of Artesanías de Colombia (AC), Paola Andrea Muñoz Jurado faced the challenge of redefining the company strategy. AC was a mixed ownership company aimed at fostering, promoting and marketing Colombian handicraft, thus creating attractive job and economic development opportunities for artisans, a low-income sector mostly of indigenous origin. Soon after assuming as general manager, Paola engaged herself in reviewing the company´s previous management in order to plan her next steps. In doing this, it was key to assess the true impact on society of the activities carried out during the previous 16 years under her predecessor, Cecilia Duque’s leadership. The present case allows students to work on a no-for-profit organization strategy, with a strong social orientation, and evaluate value creation within a complex network of relationships with a strong economic, social and cultural impact.

In June 2001, Empresa Editora El Comercio (EEEC) had launched a new popular newspaper, Trome, for low-income families. Although several studies had preceded this launch, sales in following months failed to reach expected levels and actually displayed a decreasing trend. Trome embodied the company’s effort to expand its news coverage to new population segments that were not served by its other newspaper, El Comercio –a traditional daily leading unaided recall and frequent readership rankings among high-income sectors. Six months after Trome’s launch and faced with dropping sales, company managers had met to discuss their options. This case describes management team members’ dilemmas at that meeting: “Should the new paper’s style and contents be changed? Should Trome focus more on sex and violence-related issues, as its competitors did? Would it be convenient to replace the silverware promotion chosen to support launching? Was the conflict with newspaper salesmen’s union adequately managed? Were intended readers’ needs truly and fully understood? Should the company re-launch Trome or would it be wiser to just give up on this project?

In August 2002, Aguas Danone de Argentina (ADA) faced an adverse scenario. Argentina was undergoing its worst economic crisis in history, and bottled water sales were dwindling (replaced by utility network running water). The company needed to boost its revenues through new, innovating, more value-added product development. Argentina displayed a significant interest in fitness. By means of several market research studies, ADA managed to identify a segment whose needs were unmet by existing products and brands. New product launches were planned to target that segment. This case describes the dilemmas faced by ADA and the decisions required to formulate and pursue a strategy for new product launching and brand expansion in adverse scenarios. More specifically, this case provides an opportunity to discuss how a new product category can be created to address market downturns.

Interlocking directorates is a widely studied, applied measure of governance practice. Most of the research has been limited to data from developed countries and studies interlocking as an independent variable explaining other governance constructs. This work studies interlocking as a rational decision of the owner of a company, as a dependent variable of board's design, and apply the concepts in an emerging market business environment. We found significant associations between interlocking and firm characteristics such as ownership structure, industry and regulation. We finally draw some conclusions on the direct application of corporate governance theories in developing countries.

As creating superior customer value is key to a company’s long-term success (Slater 1997, Woodruff 1997), the notion of value has been emphasized as a critical variable in marketing (Holbrook 1994). Yet, academic literature suggests that the study of customer value is in its infancy (Holbrook 1994, Day and Crask 2000, Flint, Woodruff, and Gardial 2002). Although some progress has been made in the understanding of how consumers perceive value, there is still remarkably little agreement on what constitutes ‘value’, ‘customer value’ and ‘organisational buyer value’ (Tzokas & Saren 1999). In addition, little is known about the dynamic nature of how customers perceive value from suppliers (Flint et al 2002), as most value assessment studies in business marketing typically focus on the value of the physical product, adopt a suppliers’ perspective and neglect the relational dimensions of customer-perceived value (Dwyer and Tanner 1999). This is contrary to the argument underlying the notion of “relationship” and supports the argument for a more complete understanding of the buyers’ perspective.

In 2003, after Carlos Etcheverry joined San Antonio (SA) as Latin American Region Vice President, the company implanted a KAM System. SA’s relationships with its two key clients, Vintage and Chevron, seemed to progress nicely until mid 2004, when Chevron’s newly hired Purchasing Manager decided to change the company’s commercial structure, rendering its purchasing process more bureaucratic and extremely competitive. Most purchasing area employees, all oil business veterans who had worked at the company for many years, were replaced by young professionals, predominantly with engineering or business degrees and more of a financial focus. One of the employees replaced was SA’s key contact at Chevron, with whom its Account Leader was renegotiating contract fees. Additionally, the oil company’s operations area was increasingly losing leverage in decision-making processes, moving towards an advisory-like role in supplier selection. In March 2005, Etcheverry was to meet Chevron´s Procurement Manager, since Chevron had decided to reassign a service contract through a new invitation to bid, leaving San Antonio out, despite the fact that the company had submitted the lowest quotation based on requested specifications. Chevron argued that there had been operating failures, including accidents, and other issues under review by both companies and that SA refuted accordingly. The case poses the questions plaguing Etcheverry at the time of the meeting: was it possible to anticipate this sort of problems? If so, what changes should be recommended? Could those changes enable SA to sustain the steady growth pace it had enjoyed over the past two years? These questions aim at inducing students to contemplate and analyze different decision options regarding a KAM System.

After making a choice people preferred positive features of the chosen options and negative features of the forgone ones, presumably to justify their choices. Follow-up results showed that, after choosing, consumers tended to attribute positive features to the chosen products and negative features to the not chosen ones. Based on these beliefs, people changed their attribute importance ratings such that positive features attributed to chosen products and negative features attributed to forgone products became more important. The latter only held when participants were highly confident about their attributions, suggesting a choice-defensive strategy to support their choices.

This research studies which key drivers are relevant at determining consumer’s overall store price image (OSPI) of grocery stores and identifies its relative importance. Whereas previous research on this topic has investigated the influence of different variables independently, this study was set to build an overall answer for store’s price perception image. The study was conducted in five major cities: Bogotá, Buenos Aires, Mexico City, Santiago in Chile, and Sao Paulo. 3000 consumers were interviewed, and 3000 SKU’s covering 30 categories were monitored using AC Nielsen data over a 32 week period of time. The project was sponsored and funded by The Coca-Cola Retailing Research Council -Latin America, and the field work was commissioned to McKinsey and Co. Eleven elements widely considered to build price perception were classified in five main heterogeneous levers and tested. As a result, the study finds that only two out of the five levers are consistently and broadly relevant accounting for nearly 75% of the price perception. Several findings came out of this effort: As expected, consumers’ diversity was apparent. We identified five major segments with different price attitudes and reactions to promotions. These segments were present in all the five cities covered, but their proportion varied. Retailers’ pricing and promotion policies were analyzed intending to explain these differences from a supply-side perspective. Among the major marketing factors available to a retailer, price related issues are key to form price perception, and consumers consider a limited set of SKU’s to form this price perception. Promotions had a minor role in general, except for those segments more interested in them. Promotions do have a significant role, but in markets where more promotional activity was registered, price accuracy among consumers was lower than in less promotional -more price stable- markets. Naturally, more promotional markets had bigger segments of ‘bargain hunters’, but this didn’t necessarily mean better knowledge of real price level. Quite the contrary: the more promotional the market, the less accurate the price perception. Pricing strategies and promotional activity also had their impact on loyalty to the store. Price differentiation seems to feed store loyalty, while intense promotion tends to blur the perception, with a negative impact on store loyalty.

How corporate social responsibility (CSR) and bottom of the pyramid (BOP) strategies could interact in a synergistic way? Based on two different sets of assumptions on the nature and goals of the firm, this paper develops two paradigms under which that synergy could be created. The first paradigm, which we call instrumental, assumes that the social responsibility of the firm is embedded in its goal of profit maximization. Given this goal and the fact that it is logically impossible to maximize in more than one dimension at the same time, BOP strategies are a means to achieve the profit maximization goal. Therefore, the synergistic connection between BOP and CSR is done using an instrumental or means-end logic: the social responsibility of the firm is the maximization of profits and BOP strategies are alternative means to achieve that goal. The second paradigm, which we call intrinsic, assumes that the social responsibility of the firm is intrinsically embedded in its goals of creating and distributing value. In this view, BOP strategies, when adopted by a particular firm, are necessary parts of the value creation and distribution system. Therefore, the synergistic connection between BOP and CSR is done using a practical or part-whole logic: BOP strategies have not only an instrumental but also an intrinsic dimension that makes those strategies as necessary parts of the value-creation and distribution goals of the firm. In this paper, we argue that this latter paradigm is a better lens to understand the connection between CSR and BOP strategies, because it acknowledges both the instrumental and intrinsic dimensions of these phenomena. However, it stresses that focusing only on the instrumental dimension of CSR and BOP strategies will damage the value creating and distribution goals of the firm in the long run. At the same time, we argue that the intrinsic paradigm provides the criteria for a genuine approach to CSR and BOP, because, going beyond the instrumentality of these phenomena, derives their meaning from a broader view of the nature of the firm and its role in society. As from the development and comparison of both paradigms and based on a series of case studies, this paper concludes with a set of criteria for discriminating between firms more inclined towards an instrumental paradigm and firms more oriented towards an intrinsic paradigm. These criteria contribute not only to managerial self-evaluation but also to future research on the implications of CSR and BOP strategies based on two different set of assumptions about the nature and goals of the firm.

This paper introduces the literature review, research question and research overview for a program of research that has recently been initiated. Few empirical studies show the buyers’ perspective of the different marketing practices implemented by suppliers. The research aims to investigate the value perception accorded by organizational buyers to suppliers’ marketing practices. The research program will be based on a framework derived from work undertaken by Cannon and Perreault, (1999), complemented by a deeper analysis of organizational buyer behavior literature. According to organizational buyer behavior literature buyers differ in many ways, including what they perceive to be important, the decision processes they follow, and the purchases they make. Well-established organizational buyer behavior models highlight the importance of individual buyer (e.g., perceived risk), purchase (e.g., product attributes), environment (e.g., environmental uncertainty), organizational (e.g., size), decision process (e.g., B2C or B2B), and group (e.g., DMU) characteristics (Kauffman 1996). The first three characteristics are accounted for by the factors discussed earlier, while the following two have not been found to affect a company’s choice of any marketing practices (Coviello et al 2001 2002) or, therefore, relationship type. Instead, no research has yet explored whether the group factor affects CMP choices or not. Thus, the DMU complexity factor will be added as another situational determinant for buyer-seller relationships. Finally, since relationship forms reflect conscious choices or uncontrollable circumstances, buying-firm relationship evaluations may provide insights on structures preferred by buying organizations (Cannon et al 1999). The different dimensions of CMP buyer received value judgments may determine important outcomes in business exchanges. To sum up, the result of this research may allow for the evaluation of marketing practices that create value for specific buyer or market segments in different market and organizational situations.

In 2002, Petrobras joined the Argentine fuel retail (gas stations) market. The venture faced several challenges. On the one hand, Argentina was undergoing one of the most severe economic and social crises in history. On the other, the local fuel market was dominated by a few players with brands that held significant consumer mindshare over many years. Additionally, personnel morale at Eg3 –the company acquired by Petrobras to enter the local market- was besieged by uncertainty and disillusionment as a result of a string of mergers and acquisitions and underlying H.R. management remoteness. Finally, the company’s Brazilian origin could jeopardize its appeal for Argentine consumers, given the cultural –and sports-based (soccer)- rivalry between these neighboring countries. The case presents this scenario and calls for decisions associated with service brand definition and strategy formulation for this company across its national borders.

Organized modern retail formats have based much of its successful expansion in its attraction to the mass consumer, replacing the traditional small formats. Yet in emerging markets, where most of the mass market is placed around or below the line of poverty, small retailers keep attracting customers in spite of the expansion of modern formats. Focusing our research in Latin America, with its typical emerging markets, our main question was why is it that traditional small formats endure in spite of the increasing modernization of retail that took place in the 1990’s?

Understanding consumer behavior seems necessary to help marketers effectively address the needs of the lower-income segments that represent a significant portion of emerging markets. However, the literature indicates that most studies of lower-income consumers have focused on the developed countries. Little attention has been paid to developing regions. Our research objective was to understand what is retail value for emerging consumers?

Serving the consumer products needs of Latin America’s sizeable lower income, or “emerging” consumer base may at first glance seem like a tempting opportunity – or perhaps even a necessity—for supermarket retailers in search of new customers. Yet smaller scale retailers already supply a significant portion of fast-moving consumer goods to these segments. Is this the natural order for supermarket retailing in Latin America? Is, as some would claim, the continued success of small-scale retail in Latin America attributable to market inefficiencies? Can large chain retailers create value for emerging consumers and win them as customers? New research across six Latin American countries examines the mindset of emerging consumers and lessons learned from the small-scale retail trade. Our research found that many elements of the conventional wisdom about lower income consumers are unfounded. In spite of being “poor,” emerging consumers have substantial purchasing power as a group—and they exercise their buying power in some quite surprising, yet rational ways. For one thing, it is not a given that these consumers are attracted to low prices or whatever is “low cost.” And they exhibit a very specific set of product, category, and store format needs that distinguish them as consumers from the middle and higher income segments that were typically the focus for many of the large supermarket retailers. These distinct needs imply that it is not “just a matter of money and time” for emerging consumers to change their purchasing patterns. Readers should be careful about falling into the “informality trap” and losing sight of these consumers’ needs, and how small retailers have effectively addressed them. In fact, the evidence shows that smaller scale retailers fit the needs of emerging consumers quite well. Furthermore, small retailers manage to offset scale disadvantages (in areas such as purchasing) and have a sustainable business model—even before the effects of any informality in taxes and labor contributions. Despite perceptions that the small retail sector draws its resilience from informality, we conclude that there is much more to small-scale retailers’ value proposition and business model—and that the sector can be surprisingly efficient.

Marketing scholars have addressed the influence of spatial correlation on consumers’ preferences and companies’ market shares, but no study has yet looked at the influence of spatial dependencies on consideration set membership. We investigate the explanatory power of spatial correlation (i.e., spatial proximity across buyers) for consideration probabilities. Our modeling approach builds upon the spatial probit model developed by Smith and LeSage (2004).We parsimoniously account for the impact of observable and unobservable heterogeneity as well as unobservable spatial dependencies on consideration set membership probabilities. We apply our model to stated consideration set data for new car buyers. We investigate the impact of the spatial interaction on the consideration probability for vehicle types (e.g., pickup trucks) and makes (e.g., Chevrolet). We find a significant spatial interaction in consideration set probabilities for type but not for makes. The magnitude of this correlation coefficient varies by the scale of geographical aggregation. Furthermore, we find that the impact of spatial correlation changes depending on the amount of heterogeneity explained by other model variables. Our findings allow managers to better understand multi-market competition and to customize the product and promotional offers based on geographical area.

Marketing scholars have addressed the influence of spatial correlation on consumers’ preferences and companies’ market shares, but no study has yet looked at the influence of spatial dependencies on consideration set membership. We investigate the explanatory power of spatial correlation (i.e., spatial proximity across buyers) for consideration probabilities. Our modeling approach builds upon the spatial probit model developed by Smith and LeSage (2004).We parsimoniously account for the impact of observable and unobservable heterogeneity as well as unobservable spatial dependencies on consideration set membership probabilities. We apply our model to stated consideration set data for new car buyers. We investigate the impact of the spatial interaction on the consideration probability for vehicle types (e.g., pickup trucks) and makes (e.g., Chevrolet). We find a significant spatial interaction in consideration set probabilities for type but not for makes. The magnitude of this correlation coefficient varies by the scale of geographical aggregation. Furthermore, we find that the impact of spatial correlation changes depending on the amount of heterogeneity explained by other model variables. Our findings allow managers to better understand multi-market competition and to customize the product and promotional offers based on geographical area. Marketing scholars have addressed the influence of spatial correlation on consumers’ preferences and companies’ market shares, but no study has yet looked at the influence of spatial dependencies on consideration set membership. We investigate the explanatory power of spatial correlation (i.e., spatial proximity across buyers) for consideration probabilities. Our modeling approach builds upon the spatial probit model developed by Smith and LeSage (2004).We parsimoniously account for the impact of observable and unobservable heterogeneity as well as unobservable spatial dependencies on consideration set membership probabilities. We apply our model to stated consideration set data for new car buyers. We investigate the impact of the spatial interaction on the consideration probability for vehicle types (e.g., pickup trucks) and makes (e.g., Chevrolet). We find a significant spatial interaction in consideration set probabilities for type but not for makes. The magnitude of this correlation coefficient varies by the scale of geographical aggregation. Furthermore, we find that the impact of spatial correlation changes depending on the amount of heterogeneity explained by other model variables. Our findings allow managers to better understand multi-market competition and to customize the product and promotional offers based on geographical area.

¿Qué hace que una empresa sea confiable? ¿De dónde surge la reputación de una empresa?¿Cómo se crea aquella mística? Todas las actividades qeu realice son importantes para sus stakeholders y sin duda serán observadas.

Emerging consumers want and need it all. Some Latin American retailsers have created innovative and attractive shopping experiences that successfully and profitably moved these consumers from resignation to access in both a functional and emotional way. Different roads may be used to cater these vast needs, as proves our study of several retailers using a holistic, industry-specific approach brings out.

Los consumidores emergentes quieren y precisan todo.Algunos retailers de Amérida Latina crearon experiencias de compras innovadoras y atractivas que han logrado, de manera exitosa y productiva que ciertos consumidores "resignados" pasaran a ser consumidores con un mayor acceso a bienes.

¿Atendemos a persona o a “números en un sistema?” Un debate propuesto por dos profesores del IAE poner sobre la mira el trato que brindan las empresas a s sus clientes y empleados, haciendo uso de las nuevas tecnologías.

The so called "flatness" of the world shows that in spite of the progress of globalization, several gaps still need to be addressed, particularly in emerging markets. This opens an incredible opportunity for companies to cater to the needs of the global emerging consumers, as they increasingly rise our of poverty. but to focus on this, companies need to rethink not only their business models, but also the impact their actions have in emerging societies which often lack strong regulatory systems.

A raiz de la reciente sanción de la Ley de Medios, el autor se pregunta: ¿hay otra forma de negociación, fuera de la imposición? La necesidad de que los empresarios negocien con el resto de la sociedad una agenda en común.

Most probably the current financial year will not be the most fortunate one, but perhaps it can turn out to be the year in which we strengthen our bonds with customers, balance market forces, and even conquer clients abandoned by less creative and hardened competitors in spite of the recession. The article urges to re-focus our organization on its essential mission of creating value for our customers.

Una marca corporativa representa los valores, la cultura y la visión de una empresa, y contribuye a diferenciarla del resto a través de una identidad. Para desarrollar su fortaleza, es fundamental la coherencia y consistencia de dichas variables en el comportamiento organizacional y la participación de todos los empleados.

Previous research has shown that increments in the visual saliency of product packaging affect visual attention and subsequent choice. However, no studies have addressed this issue at the level of individual packaging elements such as product claims and labels. The present paper reports the findings of an eye-tracking study on consumer attention and product choice. The study revealed that increases in the visual saliency and surface size of packaging elements are associated with greater fixation likelihood and that attention to elements such as product claims and organic labels is associated with increased choice likelihood whereas attention to nutrition-related elements such as GDA labels or the Nordic keyhole label is associated with decreased choice likelihood.

Do consumers bolster products’ attributes evaluations to justify their choices? Study 1 shows that choosing a product may alter people’s products’ attribute preferences to make them consistent with prior choices. Study 2 shows that consumers tend to increase or decrease the importance of positive and negative features in a choice-supportive fashion based on their attributions regarding the features’ source (i.e., the chosen or the forgone option). These choice-supportive distortions only held when people were highly confident on their attributions about the features’ source. Study 3 suggests that these effects may happen only when consumers cannot find an external justification for not choosing properly.

Entre los consumidores y los productos que adquieren, y sus proveedores se establecen relaciones de valor basadas en los beneficios percibidos al utilizar los productos, menos los costos asociados con el hecho de seleccionarlos, adquirirlos y utilizarlos. La experiencia creciente del consumidor y otros factores que influyen en la evolución de los hábitos de compra provocan que el concepto de valor evolucione, con implicancias para el desarrollo de nuevos productos, su distribución y servicios asociados, y las estrategias comerciales en general. Esta nota intentará facilitar la comprensión del concepto "valor para el consumidor", explicando los elementos que lo componen.