It was very hard to come back to the cold and frozen tundra of Iowa after having experienced a fabulous week and a half of the summer sun in Argentina and Chile. Under that sun, 32 of my fellow full-time and part-time MBA students and two faculty/staff members from the University of Iowa enjoyed beautiful wineries (and the delicious wine they produced), a tango show, rafting, zip lining and hiking in the Andes, colorful squares for shopping and eating local cuisine, breathtaking views of several cities and the countryside and the kindness of the people of both Chile and Argentina. Although it sounds like simply vacation time, our travels with the Global Learning Opportunities program taught us extremely valuable information about doing business internationally.
During our week or so of class time, we had the opportunity to visit a wide variety of Chilean and Argentine companies that covered a wide range of industries, including the fishing, wine, farming, fruit, energy and banking sectors. When I signed up for this trip, I had envisioned our company visits to be very similar to many of the U.S. visits we take each semester in which I would learn more about each company in general as well as have the opportunity to ask a few pointed questions, all with an international spin. I didn’t not imagine that the people we visited with would be so honest and candid about business in South America. We learned while in Santiago, Chile from Enersis, one of the main privately-own multinational electric power corporations in Latin America, about the prevalence of energy stealing and the huge impact this makes on overall margins.
We also learned so much about the importance of government stability and individual views of economic reform from many individuals in Chile and Argentina, particularly from employees at John Deere, Cargill and Citibank in Argentina. The candidness of our presenters was refreshing and enlightening as I considered how different it is to conduct business when a government supports or stifles industry growth. For instance, farmers here in Iowa and in the states as whole receive government subsidies to support their livelihood and industry while Argentine farmers will pay a 35% tariff on exporting any of the grains or soybeans they grow. Or, that while in the United States we are encouraged to save and have the infrastructure to do so, while in Argentina, people have no concept of savings within a bank because of the 20 – 25% inflation they have seen year over year recently.
What was most interesting for me to observe while studying international business in South America was the way marketing was conducted and viewed in both of these countries. As a member of the marketing academy, I was intrigued by the various ways these companies are working to promote their products in country as well as global markets. We visited a P&G plant in Argentina and learned so much about brand naming in different markets, the impact of packaging type and size for the Argentinian consumer and the impact of U.S. market trends on Argentine manufacturing. P&G has been heavily promoting a change in consumer’s behavior in the U.S. from using traditional detergent powders to liquids, which is starting to take hold in South American markets as well and will greatly impact the product line-up and manufacturing process of the plant we visited. We also heard about the challenges the wine industry, which is a large player for both Argentina and Chile, faces in the U.S. due to the regulations on alcohol sales. In particular, we learned about how direct and specialized marketing campaigns, using social media in particular, has helped small family wineries like De Martino in Chile reach large markets such as Europe and the U.S.
I was also amazed at the push Chile is making with marketing campaigns highlighting the country as a whole. The country has seen growth and stability despite the recent February 2010 earthquake and with it’s beautiful coast and mountain ranges, wine valleys and temperate climate, it is, as our guide at De Martino winery stated, poised to be “the next California”. The government has put together Invest Chile to promote industry growth within the country. In essence, this organization is one giant marketing arm of the government to promote the wonderful resources of the country while also bringing economic growth to its regions. The wine industry in Chile has been promoting all Chilean wine producers through many methods, including their web presence WinesofChile.com and a new store front in New York City. All of these tactics are intended to inform the global economy of the wide range of products and industries this growing South American country has to offer.
Overall, the trip was an experience of a lifetime. I was given the opportunity to study business in such unique and intriguing ways. I’m excited and hopeful for the continued economic growth of both of these countries and interested to see the ways my learnings from this experience will continue to contribute to my professional life.