LatAm Market Entry: Before You jump

Many technology companies, like those targeting the mobile or wireless sector and with demonstrated products and valid references in the US and Europe, can significantly improve their bottom line by capitalizing on the CALA (Caribbean and Latin America) region.  After all, Brazil and Mexico are the 8th and 14th world economies respectively. The region, in general, represents a large number of potential consumers specially hungry for innovative technology products.

CALA market entry initiatives should take into account what effect subscriber behaviour and other considerations have on the five essential elements of a successful sales initiative:

1. Product;
2. Market;
3. Business Model;
4. Sales Process and
5. Sales organization. 

Product: At the risk of being obvious, understanding how a company's product is used and applied by existing customers allows for an improved and refined value proposition, specially when pursuing new customers. The question then becomes: Can CALA potential customers apply the product in the same way that their US or European counterparts do? If so, will the benefits be equivalent?

Many companies, particularly those with limited CALA experience, assume tacitly that their special widget, in the current encarnation is indeed a be all to end all. As an example, take billing systems. Post-paid billing systems are used to support over 95% of mobile subscriptions in North America whereas the ratio is more like 10% in CALA. Pre-paid billing platforms are the priority for CALA mobile operators. Location Based Services (LBS) common and the rage in the US, Canada, Europe and Asia are the exception even in Brazil, Mexico and Argentina, the largest mobile markets in the region.
Perhaps the most interesting example, to me at least, is the use of Voice Mail. In Latin America , leaving a voice message is not considered polite, it is deemed unproductive and not smart use of one's expensive minutes. Here in the US, for instance, is not uncommon to have ten's of voice mails to conduct business or even communicate with loved ones.

I recently concluded a consulting engagement for a company that has developed an extremely powerful analytics application. The product, among other things, allows mobile operators to determine how usage of advanced Value Added Services (VAS) can be optimized. An existing customer, in the US, has determined what handsets work best with each type of data service, and has, therefore, developed promotions to favor the more reliable handsets. The challenge in CALA markets is that the more sophisticated VAS are used by at most 10% of mobile subscribers. The result is that business case justifications for sophisticated analytics applications are difficult to come by. 

Truism: companies that understand the differences in the CALA market and apply this knowledge to product development will be amply rewarded.
Let me introduce you to  CATATREPA,  http://www.catatrepa.com/english/index.php , an innovative small software company based in Paraguay. CATATREPA developed a simple application for the CALA pre-paid mobile market: Reversed Charge SMS. Text messaging is prevalent in CALA. It is conveniently inexpensive for the subscriber and represents a high margin for mobile operators. The challenge lies in increasing usage for pre-paid subscribers whose budgeted allotment has run out. CATATREPA's SMS Collect makes it possible for a subscriber to exchange SMS with other subscribers who are willing to accept the charge. Already the service has been deployed in six countries and represents significant new revenues for CATATREPA's customers and added convenience for their subscribers.

In the end, successful CALA market entry initiatives must account for customer usage and behaviour that can be particular for the region and nowhere else.

On the next issue. I will write about Market considerations. As a preamble:

• Ready;
• Willing and
• Able 

Hasta luego.
Fernando