The Request
The client*, a North American wellness and health products manufacturer, required qualified information to expand its operations into other markets. The company had already conducted internal work to identify which geographies it would target first.
Link Estratégia was tasked with studying the Brazilian and Colombian markets, as well as providing analytical support to an Asian team that collected information from South Korea. The scope encompassed a dozen competitors, combining the three geographies.
As the client operates through direct sales via multi-level marketing, the project required a study of the behavior of sales representatives/members engaged in this activity in each of these geographies. At the client’s request, we also presented an overview of the market, both for wellness and health and for multi-level marketing.
The Process
To obtain the necessary information, it was necessary to resort to both primary and secondary sources. We cross-referenced global sales data of competitors with general data and market share in each geography to obtain estimates of each competitor’s market share in the selected countries.
The historical evolution of each company’s product portfolio was obtained by analyzing current and old catalogs. This provided indications of the change in strategy and level of maturity of each competitor’s operation.
But secondary sources alone were not enough to complete the work. Link Estratégia’s multidisciplinary team conducted nearly a hundred interviews with primary sources in the three geographies to reach solid conclusions about each of the competitors. IDI (in-depth interview) and elicitation techniques were applied to obtain the information necessary for the analysis.
The Output
As the client intended to circulate the reports at different management levels within their multi-level marketing network, each country had its own report. Illustrated with graphs and images, the reports alternated between recommendations, analyses, and information.
This is standard in Link Estratégia’s deliveries: our analyses always generate recommendations taking into account the implications and opportunities raised in the information gathering phase. This is especially true in internationalization projects.
The Results
With the market analysis in hand, the company was able to adjust its penetration strategy in each market. Initially, the intention was to operate exclusively with direct sales in the three geographies. But based on the findings, the client opted to set up physical stores in the two Latin American countries. They serve as places for customers to experience the products, one of the characteristics identified as relevant in the purchasing process by Brazilians and Colombians.
In addition, the mapping of prices, the local economy, and the performance of competitors allowed the client to adjust its margins and pricing to align with the local market, something essential when entering a new geography.
