Merrill Brink News Reviews and Opinion on May 20, 2013: Expansion in South America with Understanding of Its Languages and Unique Cultures

Share Article -- The BRIC countries of Brazil, Russia, India and China tend to top people’s minds on the subject of burgeoning economies, but South America is proving to be a resource-rich and consumer diverse continent.

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Each country has a different set of demands, and organisations need to realize how to service them through the optimal localisation effort.

The BRIC countries of Brazil, Russia, India and China tend to top people’s minds on the subject of burgeoning economies, but South America is proving to be a resource-rich and consumer diverse continent. The growing wealth and economic importance of the continent is quickly catching the interest of primed global businesses. Led by Brazil with the sixth biggest global economy, South America’s 400 million-strong population is sitting on some of the most desired natural resources in the world, including oil, iron and gold, with progressively increasing levels of consumer disposable income.1

One of the important moves of international companies planning to stage successful expansions into South America is to develop effective localisation strategies. According to Ethnologue, South America has 458 living languages with diverse cultures and different demands.2 Similar to Europe, the buying power and demands of South America consumers are at wildly different stages of economic development, the market in the prosperous and internationally-open Chile differ from developing nations such as Bolivia or Ecuador.

Chile is fast becoming the primary point of entry for international organisations into South America, due to numerous international trade agreements and open policies towards growth and reform. The doors are open for expansion into Chile, yet the need of localised strategies will still remain.

Greenfield venture strategies for expansions into this territory must consider the specific localisation of products, websites, advertising and media. Institutional languages in the South America include Spanish, Portuguese, English, French, and Dutch and a host hundreds of indigenous and immigrant dialects that must form a vital part and consideration in expansion strategies.

New Entry Challenges and Success
Digital media provider Netflix – hugely successful in North America and in parts of Europe – has spoken out publicly about the challenges it encountered in its efforts to enter the Brazilian market.3 The company received significant negative feedback following its launch in the country in September 2011. Jonathan Friedland, Netflix chief communications officer, said that technical difficulties with the nation’s streaming infrastructure were compounded by problems with the volume and variety of content.

“Brazilians enjoy different things, like UFC and stand-up comedies, whilst hating telenovelas that are made in other Latin American countries,” Friedland said in an interview with blog TechTudo, highlighting the cultural distinctions that it encountered.4 The company’s discovery of the different programming demands required time, investment and an honest revisal of strategy in order to address the issues, whilst maintaining the integrity of the business effort.

Staging an entry into the South American market is nothing new, and businesses would be wise to look at the strategies employed by Japanese car manufacturer Toyota on its staggered entrance into the continent. Toyota first launched in South America in 1958, with its focus largely on Brazil, but began forming specific localised strategies for other countries including Peru and Venezuela in the 1990s.5 The company has been emphatic in its acknowledgment that a ‘one size fits all’ approach to marketing its products, as a result gained impressive market penetration across the continent. Whilst its first launches in Brazil, Peru and other nations began with 4X4 vehicles and trucks, the 1978 launch on the more urbane and developed Argentinean market was done with its Celica coupe car. Understanding the identity of Argentina helped Toyota realise that this market desired a more efficient and traditional vehicle.

Take Action
South America is ready for business opportunities, but to prevent and limit the risks of failing, proper strategies must be utilised. Each country has a different set of demands, and organizations need to realise how to service both through the optimal localisation effort. Localisation is an important part of expansion in South America due to its unique and diverse cultures. Businesses must be prepared to meet the consumer’s desires and determine the best approach to reach the enormous potential that exists in the continent.


1 The Americas: The Latin American dream. The Economist. 16 November 2006

2 South America Languages. Ethnologue.

3 Netflix’s CCO Friedland: Brazil is a challenging market. The Next Web. 9 July 2012.

4 Brasileiros gostam de cosias diferentes”, diz diretor da Netflix. TechTudo. 07 June 2012.

5 Activities by Region: Latin America. Toyota.

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