A business model that defies gravity
Defying the laws of gravity is not usually something to attempt every day. But that is how Nelson Mello describes his business model.
In the past two decades the Brazilian entrepreneur has launched a succession of products in markets commanded by one or two seemingly unassailable leaders. Thanks to a combination of astute strategy and changing market conditions in Brazil, the approach has worked.
Mr Mello and his team began selling a range of tomato products in 1986 in a market dominated by Unilever. By 2000, one of their products had become a market leader. In 1988 they launched a stock cube to compete with established products from Knorr and Maggi, gaining 20 per cent of the market.
Other successes include a fruit-flavoured drink that gained a 32 per cent share against Kraft’s Tang, and a mayonnaise that, in four years, won 19 per cent of a market dominated by the mighty Hellmann’s.
Now it is the turn of steel wool. In 2001, Mr Mello was brought in to head up Assolan, a maker of steel wool scourers. The giant in the sector was Bombril, with 89 per cent of the market. It had dominated the sector for so long that the words “Bombril” and “steel wool” were almost synonymous. True to form, though, Assolan’s market share has risen from 10 per cent in 2001 to almost 27 per cent in January.
How did Mr Mello do it? He and his team developed their strategies at Arisco, a foods company that is now a standard case history in Brazilian corporate culture.
In 1973, Arisco was a small business making condiments in Goiania, deep in Brazil’s interior. Its owners, the Alvez de Queirroz family through their holding company Monte Cristalina set about making it Brazil’s first industrialised condiment company with nationwide distribution. Mr Mello joined in 1978. Twenty years later, Arisco had more than 400 products with sales in 1999 of $936m, and had acquired Assolan, among other companies. Then, in February 2000, Monte Cristalina sold Arisco to Best Foods for more than $500m. When Best Foods was bought by Unilever ten months later, Mr Mello remained head of the Arisco foods portfolio. Yet Assolan languished and a year later Unilever put it up for sale. The buyer was Monte Cristalina, which bought its old brand for about $9.3m and re-hired its old managers.
Arisco’s success in grabbing market share derives partly from two characteristics of the Brazilian market. First, the course of industrialisation in the country from the 1950s led to each market being dominated by a small number of brands. In the late 1990s, however, conditions began changing, and many strong brands were ripe for a fall.
Second, Arisco launched its new brands at a time when Brazilian consumers were becoming aware of a widening choice of products. To exploit these factors, Mr Mello and his team developed what he calls the four pillars of success: product, distribution, communications and people (see box).
The basic product the Assolan steel wool sponge is barely distinguishable from competitors, although the company has subsequently produced related products such as abrasive pads, sponges and absorbent and humidified cloths.
Its sales force is also largely ex-Arisco, and distribution is built on the Arisco model, using four logistics contractors, 52 distributors with 2,100 sales representatives and an in-house sales team of 100. The fact that Assolan products are still made in Goiania, in central Brazil, helps greatly with distribution, says Mr Mello.
Yet Mr Mello concedes that Assolan owes much of its success to its marketing nous. “We set out our strategy based on a seven-year plan of rising sales,” he says. “We spend a disproportionate amount on communications at the start. Over time, the expenditure remains roughly stable but falls as a proportion of sales. That’s the bet: spend much more than normal at the start to reach your targets more quickly.”
If the amounts are unusual about $10m, $12m and $12m in each of the past three years the way they are spent is even more so. For the first year, Assolan used no advertising agency. Instead, Mr Mello met the presenters of “auditorium” shows, the hotchpotch of celebrity interviews, real life dramas, singing acts and video clips that air daily on Brazilian television. Product endorsements on the shows are routine. Armed with personalised scripts prepared by an advertising copywriter, Mr Mello told presenters superstars in their own right that they could improvise at the start and end of an endorsement, but the central message was to be learned by heart. For ten months, the most powerful opinion formers in Brazil told their admirers about a wonderful steel wool called Assolan. “We had got across the very simple message that there was a wire wool that was not Bombril,” Mr Mello says.
Next, he hired Nizan Guanaes, a star of Brazilian advertising, who was setting up a new agency. “We set two rules,” Mr Mello says. “One, never mention our competitor. Two, never create expectations beyond what we’re selling.”
Assolan’s advertisements, in fact, make virtually no claims about the product. Instead they play on changes in Brazilian society, promoting the idea that Assolan, “the phenomenon”, is part of a new wave of consumer choice. As promised, Bombril is never mentioned, though a version running this year notes that nowadays, “addresses are electronic, letters are by e-mail, cameras are digital, and wire wool is Assolan”. “We don’t mention the competitor, but we make him look old,” says Mr Mello.
Other advertisements feature a dancing Assolan mascot and babies with steel wool wigs. “Ads have to create sympathy for the product,” Mr Mello says.
This month, Assolan will launch a range of cleaning products. “Arisco developed on the premise of being the brand that helps the housewife add emotional value to preparing the family’s meals,” Mr Mello says. “Cleaning is a lot like cooking: there is an emotional element to caring for the family’s health.” Brand managers of household cleaners would do well to take note.
巴西有个离谱的“离谱”模式
通常，没有人会把挑战地心引力当作家常便饭，然而纳尔逊?梅洛(Nelson Mello)却正是这样描述他的商业模式。
这位巴西企业家在过去的几十年里推出了一系列产品，而这些产品市场当时由一、两家似乎不可撼动的寡头垄断着。但得益于精明的策略和巴西市场的变化，他的方法获得了成功。
1986年，梅洛先生和他的团队开始销售一系列西红柿产品，当时市场受联合利华(Unilever)主导。但到了2000年，他们有一个产品占据了市场首位。1988年，他们推出了一款浓缩汤料，想要与家乐(Knorr)和美极(Maggi)的成熟产品抗衡，结果他们获得了20%的市场份额。
他的成功案例还包括一种水果口味的饮料，这种饮料在与卡夫(Kraft)公司果珍 (Tang)的竞争中，赢得了32%的市场份额。另一种蛋黄酱通过4年的努力，从强大的赫尔曼(Hellmann’s)手中抢到了19%的市场份额。
而这回轮到了钢丝绒。2001年，梅洛先生被推举领导一家生产钢丝绒清洁用品的企业Assolan。当时的业界巨擘为占据市场份额达89%的Bombril。由于该公司长期垄断市场，以至于Bombril几乎成为钢丝绒的同义词。然而旧幕重演，Assolan的市场份额从2001年的10%上升到今年1月的近27%。
梅洛先生是怎么做到这些的？他和他的团队在一家名为Arisco的食品公司发展了他们的策略，这家公司如今已是巴西商业文化中的经典案例。
早在1973年，Arisco还只是位于巴西内陆戈亚尼亚(Goiania)很小的一家调味品生产商。其业主Alvez de Queirroz家族想通过控股公司Monte Cristalina，把它变成巴西第一个工业化生产的调味品企业，产品远销全国。梅洛先生于1978年进入这家企业。20年后即1999年，Arisco已有400多种产品，销售额达9.36亿美元，并且它还兼并了一系列企业，其中包括Assolan。2000年2月，Monte Cristalina将Arisco以5亿多美元的价格卖给了百事福(Best Foods)。当10个月后，百事福被联合利华收购时，梅洛先生仍是Arisco食品部主管。但Assolan每况日下，一年后，联合利华将其出售。而买家却是Monte Cristalina。这位老东家以930万美元的价格买回了昔日的品牌，并重新雇用其原班管理人马。
Arisco在抢占市场份额方面的成功部分得益于巴西市场的两个特点。首先，该国从50年代开始逐步向每个市场推进的工业化进程，主要受到一小撮品牌的主导。然而在90年代后期，这一状况开始发生变化，许多强大的品牌从成熟走向衰弱。
其次，当Arisco推出新品牌时，恰逢巴西消费者开始意识到产品选择的多样性。为了充分利用这些因素，梅洛先生及其团队发展了他所谓的成功4要素：产品、分销、沟通和人才。
Assolan基本的产品钢丝绒球与竞争品牌几乎毫无二致，尽管该公司后来推出了一些相关产品，如洗洁布、海绵、吸水布和湿巾纸。
其销售力量大多仍依靠Arisco的前销售人员，分销网络仍建立在Arisco原有的模式之上，即有4个物流承包商，52家经销商共2100名销售代表，以及100名内部销售人员。事实上，Assolan的产品仍在巴西中部戈亚尼亚生产；梅洛先生认为，这其实对分销十分有利。
但他承认，Assolan的成功主要归结于它的营销理念。“我们根据一个销售逐步增长的7年计划制定了策略，”他说，“一开始，我们在沟通上花的钱多得不成比例。随着时间的推移，花费基本稳定下来，并下降到与销售成一定比例。这就是赌博：在一开始大量投入，从而更快地达到你的目标。”
如果说在过去的三年里，一年1000万美元、1200万美元和1200万美元的数额不太正常，那么他们花钱的方式就更离谱。第一年，Assolan没有聘用广告代理公司。相反，梅洛先生遇到了“观众席”(Auditorium)栏目的节目主持人，这个
