Presentation in Amsterdam Marketing and BID Network

Lessons that I have learned working with development organizations and as a marketing and strategy

consultant with corporations

Brazil Half-Full Half-Empty

Analysis of the

situationInsights Marketing

StrategyDesign

Branding

Distribution Channels

Communication

Products

Marketing Intelligence

Depending on the glasses that are using, you can better see reality

and/or see different things

• Within the water

• In the darkness

• Very far

• Very close, etc.

Different glasses to see the reality

Development Economics of poverty

Business Marketing research

People Economics of happiness

“60 million below the poverty line”

[in a recent article about Brazil]

• 60 million

• 46 million

• 44 million

• 22 million

FGV

Hunger Zero (Federal Govermental Social Program)

Workers Party (Citizen Institute)

IPEA

For BRAZIL in 2005 = 183 million inhabitants

Some governmental research institutions and think-tanks, processing the income data of 2001 Census, came to the following figures for Brazilians living below the Poverty Line:

Different glasses to see the reality

Development Economics of poverty

Business Marketing research

People Economics of happiness

Appliances: market penetration per strata 2000

Source: ANEP/ABIPEME/IBOPE

Strata TOTALGoods A1 A2 B1 B2 C D E

Washing machine 96 95 91 85 66 32 4 58

Dryer (clothes) 58 40 28 16 7 2 9

Dish washer 68 44 26 8 1 5

Refrigerator 100 100 100 100 99 94 31 89

Freezer 87 75 53 40 18 5 19

Microwave oven 89 78 54 34 11 2 15

Vaccum cleaner 83 76 66 43 15 2 19

More than 4 radios 51 45 42 50 33 5

TV set 100 100 100 100 99 95 62 93

2 or more TV set 100 98 40 21 6 1 11

CD Player 96 92 81 63 32 9 1 30

VCR 100 98 94 87 47 4 37

Telephone 98 96 86 67 36 11 1 33

VCR camera 63 35 16 8 1 - - 4

PC 69 51 32 11 3 - - 7

Fax 44 22 12 4 1 - - 3

Marketing research firms

The CDE share of national consumption(almost 80% households)

• 64% of food• 58% of personal care and household

products• 58% of appliances• 51% of vestuary and shoes• 50% of household construction reform• 43% of personal services• 64% of pharmaceuticals

In business no one is leader without being leader with CDE strata

Evolution of spending per household stratum

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C+DE

A/ B

Jan

uary

´20

01

Marc

h 2

00

5

Market penetration of utilities and housing (% of households) 1969 and 2001

29%

60%

48%

37%

97%

96%

95%

96%

Água

Esgoto

Luz

Casa de Alvenaria

1969 2001

WATER

SANITATION

ENERGY

BRICK HOUSES

Aplliances per household 1969 and 2001

95%

98%

79%

64%

58%

25%

0% 20% 40% 60% 80% 100%

TV

Geladeira

Som

REFRIGERATOR

TV SET

AUDIO

Patterns of Rio’s Favelas 21st CenturyPoverty: the failure to understand it and the need to re-interpret it correctly.

Pearlman’s research: the evolution of urbanization patterns in Rio’s favelas

Market penetration of goods (% households) 2001

96%

98%

89%

79%

57%

48%

48%

22%

14%

0% 20% 40% 60% 80% 100%

Geladeira

Liquidif icador

Telefone (f ixo ou celular)

Videocassete

Carro

Pearlman’s research: the evolution of consumption patterns in Rio’s favelas

Patterns of Rio’s Favelas 21st CenturyPoverty: the failure to understand it and the need to re-interpret it correctly.

refrigerator

mixer

cell phone

tv set

vcr

audio stereo

carmicrowave

washing machine

Cell phone market penetration per household strata

DEZ’04

52.7

34.1

18.1

A+BA+B

CC

D+ED+E

Different glasses to see the reality

Development Economics of poverty

Business Marketing research

People Economics of happiness

Wealth and poverty are a moving target...Source: David Meyers, The American Paradox

We couldn’t say that Americans were poorer by that time... For sure they were happier!

Happy people tend to have:

• Strong supportive relationships (family, social and community)

• Sense of control over their life (the capacity to navigate the lifetime)

• Good health

• Fulfilling work (not necessarily a job)

Redefining prosperity and development

and poverty, and social vulnerability and necessities, wellness, etc.

It is not only a matter of income and consumption...

Different glasses to see the reality

Development Economics of poverty

Business Marketing research

People Economics of happiness

Remember

Very often the advancement of sciences occur with integrations of different body of knowledges, and

when contradictions are solved.

• Rich/Affluents

• Middle class

• Poor

• Deprived

• 300 thousand households

• 2,5 million households

• 12,5 million households

90 million inhabitants 15 million households

Consumer

socie

ty

Out of

Consumer

Society

------------------------- Poverty line ------------------------------

Brasil of the 70s

T h e N ew B razilian M id d le C lass

19 93 19 96 20 00 V a ria tio n

A 2 5 5 3

B 12 19 19 7

C 26 31 34 8

D 42 33 34 -6

E 18 12 8 -1 0

F orm er M idd le C lass

T heN ewM idd le C lass

E m ergen t M idd le C lass

B razil 2004 182 m illion inhab itan ts47 ,5 m illion househo ld

% of household per stratum

Household stratification by consumption

183

Major Forces of the transformations post 70’s

• Acceleration of the urbanization process • Acceleration of the industrialization process• The Civic Revolution since the end of military rule

(1980): ongoing improvement of democratic institutions and civil society participation

• Economic estabilization• Rapidly increase of social mobility• Globalization

ACCELERATION OF URBANIZATION PROCESS

224 cities with more than 100 thousand

inhabitants

Market and demographic researches testify great changes in household patterns

• Family average number of members has decresased dramatically

• Improvement of the women social and economic condition

• Two breadwinners instead of one...

6,2 6,2 6,3

5,8

4,4

2,9

2,3

0

1

2

3

4

5

6

7

1940 1950 1960 1970 1980 1991 2000

Fil

ho

s/m

ulh

er

Maternity: a woman’s choice instead of a curse

Fecundity: Average number of children per woman

Source Brazilian Census Bureau

3,3

3,94,3

0

1

2

3

4

5

1981 1990 2001

Nú

mer

o d

e P

esso

as

Less people under the same roof

Average number of people per household

Source Brazilian Census Bureau

3,7 3,6 3,6 3,6 3,5 3,5 3,4 3,3

1,7 1,8 1,7 1,7 1,6 1,6 1,6 1,5

1992 1993 1995 1996 1997 1998 1999 2001

Pessoas Filhos

The 3rd children becomes almost an “endangered specie”

Average number of people per household

Source Brazilian Census Bureau

Average number of children per couple

16,9

18,2

20,1

22,9

26

27,3

10

15

20

25

30

1981 1985 1989 1995 1999 2001

Fonte: PNAD 1981,1990 e 2001 IBGE

Proportion of household which are headed by a woman

Source Brazilian Census Bureau

Design

Branding

Distribution Channels

Communication

Products

Avoiding the traps represented by clichês and misconceptions:

Income, Consumption, Informality, Poverty, and Wealth:

Keeping away for the traps represented by clichês and misconceptions:

Income, Consumption, Informality, Poverty, and Wealth: . Income indicators: handle them carefully.. Consumption indicators: use them as starting point for

lifestyle segmentation.. Informality: never underestimate this challenge for

emergent markets. Bear in mind the exuberant mass market formation and

fragmentation process . Never forget that Poverty and Wealth are like moving

targets!

STRIVE TO UNDERSTAND PEOPLE’S DESIRES NOT ONLY (what you think that are their) NEEDS

THINK OBSESSIVELY ABOUT LIFESTYLES!

Mass market formation and at same time mass market fragmentation...

Thank you!