Christian Dior Takes On Latin America

Fifty-three years ago, when a young man named Christian Dior launched Miss Dior as a complement to his 'New Look' line of clothing, do you think he envisioned the global growth his company has seen? Perhaps he did.

We have come a long way since then. In fact, Parfums Christian Dior opened a gateway to Latin American markets in Miami in January 1999. This office covers the following zones: Latin America, the Caribbean and North/South American Duty Free markets. Two teams are specifically developing Latin American domestic and duty free channels. Subsidiaries have been opened in Argentina and Brazil to further their presence in these markets, enabling Christian Dior to be closer to the consumer.

With this new structure, Christian Dior has given themselves an opportunity to gain strength in these markets. Perfume 2000 recently had a chance to chat with Olivier Charriaud, Christian Dior's Regional Marketing Director for Latin America, about the different markets, the goals and expectations that they have for them.

"South America is not just one market," said Charriaud. "We have a lot of markets here, and different countries have different situations concerning the products. For example, our makeup is prominent in Central American countries, but is underdeveloped in most South American countries."

The problem is that many of the countries themselves are underdeveloped. For most areas in Latin America, it is very difficult to generate solid numbers and statistics relating to sales figures and such. One factor that helps Christian Dior in these markets is their name, and Charriaud believes this will help them have success and help increase their market share.

"The name (Dior) is known - we don't have to explain it," he said. "We have a wide target. Our consumers can be very young as in the case of Mascara Flash or Hypnotic Poison. We also have consumers who have enjoyed Miss Dior since '47. We have to maintain the consumers we've had since then, while in the meantime grab the younger consumers."

Some companies are hesitant to move into these markets because they are often unpredictable, oftentimes with rapidly changing economies and political structures. M. Charriaud admits that these are difficult problems to face, but adds that Christian Dior's long-term strategy will help them succeed there. The potential in these markets is so great, that it encourages you to overcome the various obstacles that are faced.

"We saw it (economic difficulties) in Brazil in '99," he said. "Venezuela is facing difficulties in Caracas. But all of our competitors face the same thing. The major difficulties are the lack of a strong middle class and shortcomings in distribution. It (Latin America) is such a large area. We try to define a common strategy and adapt our launches to each market through specific merchandising policies and training programs."

M. Charriaud does not see major differences when it comes to attracting consumers in Latin America, as compared to consumers in Europe.

"Latin consumers have a good education and sensibility concerning luxury products. We have discovered that they are very close to Europeans in terms of taste, that they are sensitive to the French touch. Brazil is going to be interesting to follow; the more Latin America can develop a middle class, the better it will be for us, as well as for luxury goods in general."

Christian Dior's goals and expectations for these markets for both the short term and the long term are achievable, provided they follow the structure and strategy that they have created for themselves.

"We have to develop our commercial impact, we must become closer with our distributors and consumers," said Charriaud. "We do not have very good distribution in Latin America. We also must have successful launches of our new products. Moreover, we look forward to our upcoming launch of J'adore…we have seen it develop around the world…in Mexico, North America, Europe…we know this product is going to be top selling and a key player in these markets. We are also looking forward to strong launches of our two new skincare products, and our new range of cleansing products, all to be released in 2000."

Right now, while trying to increase overall market share, Dior is a stronger brand in Northern areas of Latin America. Mexico, where they are number three in the market, is their flagship country. In Latin America in general, the Dior brand is a challenger. Because of their situation in these markets, they feel they must establish all over their products equally, rather than focus on certain ones.

"We want to establish a well-balanced product mix," said Charriaud. "It is difficult to prioritize - you have to develop every type of product homogeneously: skin care, makeup and perfume."

In fact, Dior's new perfume, J'adore, the company's first new fragrance since 1998, is just hitting these markets. This launch is one of the keys to Dior's success in Latin America. In addition to creating new products, Dior must reinforce their classical product lines such as Fahrenheit.

Along with the emergence of new markets in Latin America in recent years, something else has emerged: the Internet. Charriaud has seen the staggering growth of the Internet. It has exploded from being a high-tech luxury, to a major form of communication. It seems that everyone has a website, but that is not enough. You must know what your purpose for the site is; what are you trying to accomplish? Perfumes and makeup can be difficult to sell on the Internet because they are very personal products. The core of the business has always been feeling, smelling, the intimacy and seduction.

"We think it (the Internet) could be a very interesting medium to show and explain the products," he said. "The Internet is a wonderful way to participate in brand building. But, how can one truly discover perfume and other luxury goods without knowing the smell or the feel?"

Internet or not, Christian Dior is certainly making strides to make the consumers in Latin American markets more aware of them and their products. They have direction and they know what it is going to take to be successful in such diverse markets.