Global Bottled Water Congress, Lisbon

‘Our consumers are too poor to buy cheap things.’ AJE’s strategy for success in emerging markets

By Rachel Arthur contact

- Last updated on GMT

‘Our consumers are too poor to buy cheap things.’ AJE’s strategy for success in emerging markets

Related tags: Developed country

Brands often fall into the trap of thinking that consumers in emerging markets only want cheap, generic products. But these consumers are just as savvy as those in developed markets and value a good brand, says AJE.

Felipe Burgaz, chief marketing officer of AJE, told the Global Bottled Water Congress in Lisbon that bottled water brand Cielo has built its success by offering consumers something different to the multitude of cheap, indistinctive products on the market.

There’s a distinction to be made between ‘cheap’ and ‘affordable,’ he added.  

Consumers understand what a great brand is

AJE is a multinational beverage company, with efforts focused on 20 emerging markets in Latin America, Asia and Africa. Its flagship brand is BIG Cola, but it also works in water and juice categories, with brands such as Cielo, Cifrut and Pulp.

Cielo (which means ‘sky’ in Spanish) was launched in 2001 and takes on a beauty and fashion positioning.

This differs to the rest of the market, said Burgaz.

“I think that normally water offerings in emerging countries are pretty generic,” ​he said. “Bottled water is expected to be inexpensive if not cheap, with no real branding and no real innovation, certainly with the myriad brands that are out there.”

But, emphasises Burgaz: ‘Our consumers are too poor to buy cheap things.’

“What that means to me - it’s the number  one sin of marketers in emerging countries – you assume that because consumer is poor, consumer does not have a lot of money, consumers are not interested, willing or able to buy products a little more expensive than what you are willing to sell to them.

“The issue here is: what are you offering to them? Are you creating the value proposition that’s strong enough to be attractive?”

Cheap vs affordable

Shopping habits among consumers can be based around buying for the day, rather than the week. They want to buy premium products that they trust: but do so in small, affordable quantities.

burgaz
Felipe Burgaz

“Consumers in emerging countries are just as smart as any consumer in a developed country, and they’re connected through mobile phones and social networks,” ​said Burgaz. “They understand what a great brand is. They want to buy a great brand, they don’t want to buy a cheap brand.

“It’s not about selling cheap things, they’re too poor to buy cheap things, they don’t have enough money to make a mistake. They’re going to put money on stuff they know performs.

“It’s about having the right price. We need to make a distinction between having a cheap price, and an affordable price. One of our key components of our DNA as a company is we want to be affordable. We want to say to consumers: you’re going to get a great brand, but affordable.”

Brands in developing markets need to invest and look at branding and image just as much as those in developed markets, said Burgaz.

Cielo has focused on a beauty and fashion positioning: at a point that is affordable and offers value to consumers. The Cielo brand now includes Cielo Q10, which focuses on skin health.  

“It’s important to also say something to consumers beyond refreshment and purity. We want to go after beauty and fashion. At the end of the day, we all understand the reasons behind refreshment and purity. We think it’s important to say: you know how it makes you feel on the inside, let’s talk about how it makes you feel on the outside.”

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