As the cultural composition of global markets continues to diversify, businesses too need to change with the environment. The rise in the number of Latino consumers in recent years offers small businesses a potentially growing customer base.
A study by Maru/Matchbox points to this trend as businesses face stronger competition and more selective customers. For the study, Maru/Matchbox surveyed 2,500 consumers across five Latin American countries to help businesses develop products and services that will thrive in those markets.
Why Innovation is Key for Designing New Products or Services?
In its survey, Maru/Matchbox notes that size does not really matter when it comes to innovation. Seven out of 10 Latin American consumers believe that innovation can come from national or global companies in equal measure. In fact, more than 80% are willing to try innovations that come from young companies and new players if they fulfill a specific need.
Similarly, eight out of 10 Latin American consumers don’t associate innovation with cost. They expect to pay the same or less for innovation compared to what they currently pay for their products. Stressing that innovation must be accessible to all irrespective of cost, exclusivity or luxury.
Businesses who position their products and services as innovations might risk alienating potential customers. This is because Latin Americans consumers don’t consider most common brand innovations as innovative.
Label changes, new flavors, new functions or cheaper versions of existing products rate low. Instead of evoking the image of a dynamic and innovative brand, it could create the opposite image of repeating itself.
In fact, a third of the Latino consumers, view products branded as innovations as let downs and opt-out of trying them. A case in point here is the cannibalization of more effective products. It would amount to nothing if improvements of production, logistics, marketing are put in a sector that is already saturated.
Be Original and Relevant
Innovation for the Latin consumer should imply revolution. Maru/Matchbox advises that if companies want to go on the innovation branding route the innovations should be original and relevant.
Besides looking for true innovation Latin Americans also value sustainability equally. Some 95% of Latino consumers say they worry about the environmental impact of the products they use. With a further 80% willing to exchange their usual products for eco-friendly alternatives. However, it’s important to note that most would only do so as long as they aren’t required to overpay.
In fact, a sustainable product or service is among the top five attributes of innovation. The study identifies the emergence of ecological and socially responsible alternatives. The issue is the second most mentioned benefit in relation to innovations. Companies who follow the cue on being environmentally consciousness have more chances of success- the study advises.
Efficiency, simplicity and flexibility also rank high when it comes to innovation. More than 40% of Latino consumers point out that innovations make their lives easier because they allow access to better, more practical and more efficient products. They value products and services that are time-saving and easy to use. In addition, being available at all times and places and the use of existing platforms or devices are highly valued.
Keep Latino American Consumers Engaged and Give them Control
Finally, control by the consumer is an important factor moving forward. Of the 22 innovations evaluated and seen within the same category, the most valued innovations are those that offer additional benefits or user-controlled upgrades. This is in contrast to innovations where the person surrenders control to a device or institution.
For example, Electric cars occupy the first place in the attractive ranking, while cars with autopilot are down to 20th. Personal health monitoring via smartphone is the fourth most valued idea, but the proposal of a health insurance company that offers discounts based on physical activity measured via smartphone is ranked as low as 16th.
Similarly, innovations that are too “futuristic,” — those that radically deviate from the familiar and safe — are rejected.
Despite the need to innovate successfully, the study advises that it is essential to look beyond basic categories and look towards the needs, desires and interests of consumers. The answer lies in offering innovations that can really connect with the desires, motivations and mindset of Latin American consumers.
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Studies like this can be dangerous. They surveyed people in 5 Latin American countries. Each country has a unique culture and some of them can be very different. Latin America could mean Mexico, Venezuela, Brazil, Argentina or many other countries.
It really helps to look closely at various target markets in order to appeal to their specialized needs.