The Homa Files

Excerpted from WSJ, ” McCann Offers Peak Lives of Latin America’s Poor” By Antonio Regaldo, December 8, 2008

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During presentations at McCann Worldgroup’s office in Bogotá, Colombia, staffers have taken to letting a chicken loose to hunt and peck around clients’ feet. Racks of potato chips and other products on display in McCann’s Mexico City conference room, which has been designed to look like a bodega…

The point of these exercises: to give big marketers some insight into the lifestyles of Latin America’s low-income consumer…McCann’s move comes as multinational companies increasingly consider such “emerging consumers” as a big opportunity. But these consumers’ tastes, habits and needs remain largely an enigma to global marketers…

McCann’s research is helping Nestlé market Nido Rindes Diario, a brand of fortified powdered-milk product…one of Nestlé’s challenges was to overcome the perception that milk powder is a specialized formula for babies, and too expensive for the whole family to drink. McCann says its research helped position the product…

The idea of targeting low-income consumers may raise some eyebrows. But greater access to industrialized products like deodorant, and packaged food, can improve their physical and “psychological welfare…We do not pretend to be Mother Teresa”…

Advertisers say practical insights into low-income groups are hard to come by. “A lot of people talk about the emerging consumer, the bottom of the pyramid, but no one really has a structured approach…We have to do a lot for ourselves, and sometimes fall on our face doing it.”

In Mexico, Nestlé decided to sell Nido Rindes Diario exclusively through mom-and-pop stores, not supermarkets…That decision came after McCann found that local shopkeepers exert outsize influence in tightly knit, low-income neighborhoods. “It’s the shopkeeper who can recommend or disavow a product,” he says…

Some experts say marketing directly to low-income groups has yet to become a full-blown trend. “Usually multinationals just put out a Mexican version [of their product] that looks as American as possible”…But examples of products tailored to thin pocketbooks are increasing…

Edit by SAC

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According to the theory of the bottom of the pyramid, there is a combination of profit opportunity and social responsibility to be had by marketing to consumers at the bottom of the economic pyramid. Critics of the theory argue that the benefits of marketing to this group are overstated and that marketing to this group can be exploitive.  Whether the profit opportunity is real or a mirage, McCann is taking the right steps to help Nestle benefit from this group by working to understand the group’s purchase desire and developing tailored solutions for the market to ensure that consumers are able to access the product.

http://online.wsj.com/article/SB122824726034173129.html

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