Weaving all these threads into a comprehensive ad campaign is an exercise in cultural diplomacy and understanding that many wireless carriers are failing, says Roger Entner, program manager for the Yankee Group, a Massachusetts-based market researcher. "Many wireless carriers view Cinco de Mayo simply as a Latin American festival," laments Mr. Entner. "They don’t know that people from [countries other than Mexico] are as excited about Cinco de Mayo as the Russians are about the German Day of National Unity."
AT&T Wireless believes it has developed a strategy that communicates a consistent corporate message while addressing the divisions within the U.S. Hispanic market. The Washington-based company relies on "macro-campaigns" – marketing initiatives created and executed within local markets – to promote its products and services. In keeping with the company’s international marketing strategy, the focus remains on easy-to-use mobile devices and ready-to-go packages. Retail services, local promotions, and customer support services are tailored to suit individual markets.
"Your national strategy has to be aligned with a very comprehensive local market strategy. You have to have a grassroots effort in the local markets," says Rosa Alonso, director of multicultural marketing at AT&T Wireless. "And you have to have campaigns that appeal to specific groups."
THE BATTLE FOR LATIN AMERICA
The when-in-Rome approach also works as wireless companies penetrate the Latin American markets. According to Mario Carotti, Nextel’s vice-president of Latin American corporate communications, Nextel gained a foothold by fashioning itself into a homegrown institution. Local residents, not expatriate U.S. executives, make up each country’s workforce. Marketing campaigns and product promotions are customized in accordance with the buying preferences and usage patterns of local residents.
"Latin American people perceive Nextel as a domestic company in the same way they perceive Ford and Coca-Cola as domestic companies," says Mr. Carotti. "These are everyday names that are a part of everyone’s life and are as much local as they are international."
Industry privatization of formerly state-owned telephone companies has opened up gigantic opportunities as well as fierce competition, attracting the likes of Verizon Wireless, Bell South, and large Latin American players. With a population of 500 million and one of the highest online growth rates in the world, Latin America appears a ripe market for wireless services.
At the same time, economic and political turmoil mean a bumpy ride for utility-related industries such as wireless. After the destabilization of Argentina’s banks in early 2002, for example, Mr. Carotti traveled door-to-door, meeting with subscribers in order to negotiate reasonable payment plans. "From the president to junior sales reps – each of us was assigned a group of clients with whom we had to speak face-to-face, to analyze what payment problems there were, what limitations there were to draw cash from the bank, and how to work it out," he says.
Other bumps come from the telecom industry’s competitive pressures. In the mad rush for market share, many wireless companies focused on enlisting new subscribers rather than drafting a disciplined business strategy and conservative cost structure. Today, these companies are fast realizing that many of their subscribers are low-revenue generators, incapable of offsetting operational costs, especially in the midst of an economic slump. "If you already have a low-revenue subscriber and then your currency devalues 75 percent in one year, all of a sudden you just have a junk subscriber," warns Erica Eppinger, research director for Latin America at the Yankee Group.
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