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Positioning the future

The most recent wave of bullish oil prices that affected the prices of basic inputs to make paints, made formulators think about the need to look for new markets. The focus of our industry in Latin America has on the low price scheme one of its greatest sources of income, because our customers do not have a great purchasing power and we do not have a very large rate of growth in paint consumption.

Hence, our industry grows at rates very close to and barely higher than the GDP of each country. When the cost scheme becomes unmanageable due to increases in raw materials, margins begin to decline. Therefore, many companies began to venture into market segments where there is greater profitability and added value. That is, they climbed a step and began to compete in the high-tech segment. However, this fundamental step for the portfolio of any company has to be accompanied by an adequate marketing strategy to "not die in the attempt".

These segments have their markets and their natural players and there is not much room for new competitors. Venturing into them requires a long-term vision that includes a bit of financial muscle, positioning of new products from their attributes, adequate distribution channels and knowledge of the needs of my client.

According to the Argentine consultant in paint marketing, Claudio Fazzone, it is more pertinent to launch new brands for high-tech segments, than to use brands already known by the market that have a position in other segments. This is because consumers are used to acquiring a brand that has certain attributes for which they pay and that generates credibility. Raising the price of that brand would mean generating confusion in the customer and a wrong positioning that would destroy the value that was created.

Thinking about positioning a high-tech paint in its natural market, implies thinking about a profitability in the medium term, since the investments in distribution channel, quality systems, communication and attribute advertising, are large. Pretending that these costs will begin to recover in a year is a utopia. Competing in these high value-added segments requires a view of the business that cannot be the same as that competing in low-price segments. Customers are always different and their behaviors, too.

Author: Vanesa Restrepo

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