Opening the Door to the Latin American Market

By Daniel Gorinstein

How can European marketers venture into the Latin American market? There is basically one answer to this challenging question, even when one may choose several different words for it: with confidence, caution and strategically.

After Brazil, Mexico is the second largest Latin American economy. Argentina has gradually, but steadily, improved its economic landscape and is rapidly becoming a powerful force in consumption.

Mexico has been actively seeking substantial foreign investment in various sectors to help it achieve the economic growth it needs to take its country forward economically. Companies large and small are being sought and even micro-companies that have specialized knowledge in niche markets may find business opportunities in Mexico.

WHERE ARE YOUR PRODUCTS MADE?
Since 2007, the European Free Trade Agreement has enabled companies working in non-restricted product and service areas to sell their goods and services in Mexico with little or no import tariffs. But there is a caveat. European companies wanting to enter the Mexican markets must bear in mind where the products they offer are originally manufactured. Why? Even when there are minor or no tariffs for European-made goods, if the products to be exported from Europe are actually made in China, there will be steep duties applied. Other countries like Brazil have a solid manufacturing infrastructure that may eventually bar products that can otherwise be manufactured locally.

But more specifically, a European company must closely analyze three key elements in choosing a partner in a particular market and country.

Confidence - The Latin American markets are now mature, in the sense that DR marketing has become well established and accepted in almost every country in Latin America. This should give a European or global company enough confidence that there will be not only sufficient exposure for its product, but also that the consumers are there--waiting for the next product to surface.

Caution - There is a drawback, however, in most of the Latin American markets, and that has to do with integrity, culture, idiosyncrasy and solid business ethics. When you put those four factors side-by-side with those of most European countries, they present a stunning contrast. That is why it is paramount to choose a reliable partner with a proven track record, for which some research and a little bit of due diligence will lead the interested party down the right path.

Strategy - The potential entrant must choose the right marketer capable of carrying the ball all the way down the field. This means one with a large degree of specialization--the commitment of a local and experienced company that can focus on the key marketing aspects the potential European executives want to maximize. It is crucial, therefore, to insist on similar philosophical and cultural principles among the top ranking officials of the companies, sharing the same vision and that will work together building a market--a lasting brand and a long-term relationship.

Daniel Gorinstein is president and CEO of Premiere Exclusives in Mexico. He can be reached at +011 525 55 395 4847.