Globalization is fast making the world a small village thanks to advances in technology and transportation. However, despite the seeming convergence of the world, there are aspects of each country across the world that make it unique and fundamentally different from another. One must learn these unique aspects that distinguish one country from another, especially in cases where an individual or organization wants to do business in a foreign country. Learning the unique aspects of culture, demography, social dos and don’ts, acceptable business practices, and market-entry strategies in the target country can help a business make a soft landing, instead of making assumptions and failing in the process. Peru and the U.S. are different in culture, business practices, and important features for business including demographic makeup and per capita income. In comparing the two, this paper will explore Peru’s demographic overview; cultural values and customs; cultural don’ts; effective marketing strategies; marketing similarities and differences between Peru and the U.S.; and products and services that would sell in the country (Peru) and those that would not.
Peru is a country in western South America that borders the Pacific Ocean. The country shares borders with Ecuador, Colombia, Brazil, Bolivia, and Chile. The country has a history with Spanish conquistadors, who conquered it before being toppled by the locals declaring their independence in 1824. Over the years, the country has advanced economically, leading to a large part of its population living in urban areas. About 21 percent of the country’s entire population lives in rural areas, while the rest of the population is urbanite.
Peru has a considerably youthful population. 41 percent of the country’s population is aged between 25 and 54 years; 0-14 years make up 25% of the population; 15-24 make up 17%; while 55 and above year make 16% of the country’s population (CIA n.p.). The country’s total median age is 29.1 years, even as male and female median ages stand at 28.3 and 29.9 years respectively.
Recent successive governments’ focus on economic growth has had a great impact on the nation’s per capita income. While the country had a history of immigration, the difficult political and economic environment had made the country an emigrant hotspot. Successive governments have, however, improved Peru’s economy evidenced by the growing per capita income. At the start of the economic crisis and internal violence in the ’80s the World Bank reports that the country’s per capita income stood at $1033.41 falling to $836 at the height of the crisis, before steadily climbing to its current $6941.24 (World Bank n.p.). Projections show that the country will continue in its progressive trajectory subject to political will.
Like many countries across the world, Peru has signature cultural values and customs. Spanish is the official Peruvian language, although Quechua is also more prevalent and traditionally referred to as the second official Peruvian language. The Peruvians believe in freedom of worship and religion; however, the bulk of the population is Catholic. Catholic ideals, which the Peruvians believe in, greatly influence decision-making in everyday life, education, and governance in the country.
Communication is of great importance to the Peruvians. Part of their cultural value in communication is making others feel comfortable in communication; for this reason, Peruvians avoid confrontations and giving opinions on some subjects such as politics. In business meetings, thus, politics, personal ancestry, religion, politics, and terrorism are taboo topics. In their attempt to save face and make one feel comfortable, Peruvians stand closer during conversations, and it is considered rude for one to back away. Additionally, the is a great amount of touching between both men and women and among men and women during conversations. The touching extends to walking hand in hand among men and men and women and women, merely as a sign of friendship.
Looks are an important part of Peruvian culture and customs. Physical looks such as self-grooming are especially important in making good impressions. Peruvians frown upon bad smell, which causes a majority to use perfume in addition to showing attempts towards daily hygiene. Hygiene extends to clothing, which should mostly be formal, particularly at the workplace.
Part of the nation’s custom of poor punctuality lies in the transport infrastructure. Despite the recent economic advances in the country, the nation’s transport infrastructure is limited. Traffic jams are a norm in the cities, starting from 6 a.m. to midnight. Workers are, therefore, accustomed to leaving for their destinations two hours early to arrive at work in time. For foreigners, therefore, it is important to arrive at business meetings in time; however, one should not be surprised if the hosts arrive late.
Aside from taboo topics like politics and terrorism, respect is particularly important for Peruvians. One should, consequently not address others using their first names, especially in business settings. It is offensive to use the first name, thus using professional titles such as teacher, lawyer, or doctor is acceptable. Where the person does not have a professional title, addressing them as Señor, Señora, Señorita along their surnames will do.
Given the wide catholic following in the country, religion plays a great role in the mannerism and culture in Peru. Peru is thus a modest country that demands decency in dressing. Wearing revealing clothing is frowned upon, especially in public. Conservative dressing allows one (especially tourists) to not only blend well with the surroundings and show respect to the culture but also avoid attracting unwanted attention that makes them targets of scams intended for tourists.
Peru’s economy has been growing in the past few decades putting more disposable income in the hands of the citizens. Along with the changes in economy has been a change in consumer behavior towards luxury goods and sharing of information with brands, as well as uptake of e-commerce. However, marketing and advertising still border on traditional marketing avenues such as television and radio. Pricing plays an important role in marketing in the country as consumers are especially price-sensitive (Spillan and Rahman 153). More important is that marketing is mostly relevant in the metropolitan areas of the urban centers across the country.
Another considerable marketing strategy in Peru is direct marketing. The close-knit culture in the country means that direct marketing is more acceptable than the impersonal electronic marketing that has become popular in the West. Personal selling, telemarketing and mailing campaigns are thus acceptable in Peru (Spillan and Rahman 153). These marketing strategies are particularly popular in the service sector. Given the price sensitivity of most of the Peruvian consumers, customers are keen on promotions and discounts: using the two as part of a marketing strategy has the potential to increase purchases of goods and services advertised.
Marketing in Peru and the U.S. is different, although globalization and the use of the internet are fast-changing marketing practices in Peru. Personal selling plays an important role in Peru, although the recent widespread use of the internet is slowly changing the practice. For the U.S., however, marketing is more impersonal and online advertising and marketing are more popular. The considerably low internet penetration and low online presence of consumers in Peru points to a significantly low impact of social media on consumers. This is different for American consumers, where more than 74% of consumers actively use social media, which then plays a huge role in their decision-making. It is for this reason that many brands actively operate social media accounts in the U.S. The brands use the accounts to market and advertise new goods and services, respond to consumers’ complains and concerns as well as collect feedback on their products and services from the consumers.
The bulk of Peruvian consumers are rational and look to quality in making their purchase decisions. Along with rationality towards quality is a high brand awareness among the consumers. Price and product availability, however, continue to play a major role in purchase decisions (Spillan and Rahman 153). It is for this reason that Asian products are especially popular in Peru, although there is a liking of European and American products due to their quality and durability. Peruvian consumers are different from American consumers: for American consumers brand loyalty is important and greatly established. The bulk of American consumers are inclined towards purchasing American products; often perceiving most Asian products as poor in quality. It is for this reason that the iPhone is more popular in America and draws most of its revenues from the American market than other areas in comparison to other phone markers.
Recent economic crises have had a great impact on consumer behavior across the world. While Peruvians are price sensitive and look to discounts and promotions, the same trend has caught up with American consumers. Although brand loyalty continues to play a huge role in purchase decisions, more Americans are willing to learn and try other brands that offer cheaper prices. Additionally, more Americans hunt for promotions and discounts and are willing to compare product prices.
The Peruvian country setup and economic performance along with the levels of disposable income mean that while some products may sell better in the country, others may not. Personal grooming products, for instance, would find a greater market in the country. With a culture that demands presentation and good looks, personal grooming products such as cosmetics, clothing, and footwear would sell well in the country. Electronic goods and cars would, however, not sell well in Peru. Although the bulk of the population lives in urban centers, the rural population does not offer a good market for electronic products and cars (Spillan and Rahman 153). Moreover, despite recent growth in economic fortunes, there are still low-income levels for the majority of the population in the country. Low-income levels for populations both in the rural and urban settings put limited disposable income for the purchase of electronic goods and cars.
Peru has shown great economic improvements in the past decades. With a considerably youthful population, the country is poised for even better economic fortunes. Peru’s cultural beliefs are hinged on religion; most Peruvians are practicing Catholics. Consumers in Peru are price sensitive and while there is brand awareness, the availability of products and their price play a major role in purchase decisions. Personal grooming products have a great potential of sale in the country, largely because of a positive cultural norm towards personal hygiene. Overall, the country shows great potential for marketing different products.
CIA. “South America: Peru.” The World Factbook, 2019. https://www.cia.gov/library/publications/the-world-factbook/geos/pe.html, Accessed 19 April 2020.
Spillan, John, E. and Rahman, Mohammad, N. Doing Business in Chile and Peru: Challenges and Opportunities. Palgrave Macmillan, 2020, https://books.google.co.ke/books?id=Iy2oDwAAQBAJ&printsec=frontcover#v=onepage&q&f=false. Accessed 19 April 2020.
World Bank. GDP per capita- Peru. World Bank, 2019, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PE. Accessed 19 April 2020.