@Revolution:Global Business News

New Economy, Leadership, Entrepreneurship, Management, Global Business

Latin America Price Promotions

Posted by iBlog on January 6, 2008

Certain techniques retailers have long used to persuade their customers that they offer good value—frequent discounts, two-for-one deals, and other promotions—have limited effectiveness in Latin America. Far more important are factors that have also come to the fore in developed markets: the price of products that shoppers buy regularly, for example, and whether a store has a broad range of goods at different price and quality levels in key categories.

These findings emerged from a survey of more than 3,000 shoppers in and around Bogotá (Colombia), Buenos Aires (Argentina), Mexico City (Mexico), Santiago (Chile), and São Paulo (Brazil). Each city’s sample—600 to 700 people—matched the socioeconomic composition of its country’s overall population. One key component of the survey was our effort to get shoppers to identify, from among a wide range of tactics1 that retailers use to influence price perceptions, which tactics the shopper’s primary store employed. We then used regression analysis to understand the impact of various tactics on the consumer’s perception of stores as inexpensive, very expensive, or somewhere in between. This analysis allowed us to examine the relationship between each tactic and price perceptions (Exhibit 1).

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