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The Rise of the C Class in Brazil

In 2008, nearly 20 million people became part of the C class in Brazil, which now boasts 86 million people and represents 46% of the population of this country. That tops the population of the three most densely populated states in the U.S. And the growth of this middle class has come more from the rise of the lower classes -- the D and E classes in socioeconomic terms -- than from diminishing the ranks of the A and B segments.

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"The power of consumption of the Brazilian C class was already growing at close to a 30% annual rate before the global crisis," says research director Rosangela Bolze.

Ms. Bolze and Damiana Buosi were partners in an eponymous research company bought recently by London-based M&C Saatchi. Together they have 40 years of experience in market research, working currently with Unilever, Citibank and Natura, among other clients, in Latin America and Europe. All that experience will be vital to helping one of Brazil's newest agencies grow in extremely tough times.

News of the arrival of M&C Saatchi in Brazilian territory surprised the local and regional industry. "We have always believed that the time to gain market share is during crisis periods, when the competition is fearful and underinvesting," says Geoffrey Hamilton-Jones, president of M&C Saatchi, Sao Paulo. "Purely from a geographic and economic viewpoint, Latin America represented a big gap in our ability to work with international clients on a global basis."

Worldwide CEO Moray MacLennan adds: "We admire the creativity and vitality of advertising professionals in Brazil and Latin America. Having a presence there improves our chances both of working with major Brazilian companies as they expand internationally and with major international companies as they expand in Brazil."

Further expansion in Latin America to places like Argentina, Chile, Colombia and Mexico hasn´t been ruled out.

But the first order of business is securing the beachhead, and that requires engaging a middle class that has been affected by the recession but hasn´t been squashed and is still a fertile ground for marketers. "With offer of long-term credit, this consumer has had access to inspirational, automobile, electro-domestic goods and internet access," says Ms. Bolze. "Casas Bahia, one of the main home-goods stores, was a pioneer and had success positioning itself in the lower-income segment and has become, in fact, an international case of success."

The consumer desire of the C class has been linked to the home -- renovation or decoration -- and to improving the environment and quality of life of the family. So cleaning products and foods like soda, ready-to-drink juices, yogurts and ice creams were among the products that grew.

Here´s one example: 57% of the washing machines in Brazil are "tanquinho," a semi-automatic and economical type of washing machine, according to data from Latin Panel, a Latin research firm. Seeing this, Unilever just launched a line of products in the country that are specially designed for doing laundry in these machines, which allow the use of the same water three times. It´s a soap called "OMO Multiação Tanquinho" and there´s another product for rinsing, "Comfort Concentrado Tanquinho." This allows the C segment to access a premium brand like Unilever´s and take care, at the same time, of their home economy. All the research made prior to this creation from Unilever came from Ms. Bolze, though the agency responsible for the campaign was Brazilian Neogama/BBH.

It is difficult to estimate how much this crisis will affect the growth of the Brazilian C class. Nonetheless, according to Ms. Bolze, there is an irrefutable truth: "This segment that had access to consumption and already tasted the sweet will never be the same. It will continue to be more selective in consumption, looking for quality, efficiency and added value. And it is here where companies will have to find alternatives so as to not miss out."

Aixa Rocca is Argentine and lives in Buenos Aires. After studying advertising she became a journalist and has worked for FIAP Ibero American Festival and Adlatina. She is also an amateur photographer and co-director of a new freelance-journalism firm called S.A. Journalists.

Are you saying that only 86 million citizens somehow equates to 46% of Brazil´s population? That doesn´t sound right.

Whatever the numbers, bravo to any agency that is investment spending in this economy. Look at the classic business case of Kellogg vs. Post - in the depression of 1929, Kellogg doubled their ad spend while Post cut back...look at share reports in the year 2009 to see which tactic paid off.

It sounds about right...

[Estimated timeframe:Q3 2009-onward]

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4089

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