HOW HAVAIANAS GOT A STRONG FOOTHOLD

       Havaianas looks like a fairly basic holiday sandal: a rubber sole, two straps and a range of bright colours. But this simple Brazilian shoe has emerged as a global brand - and one that is likely to herald the arrival of many other emergent brands from the "new world", where entrepreneurs in countries such as China, India, Argentina and South Africa are developing plans for brands that they hope will rival names such as Nike and IBM.
       As the world gets smaller, thanks to the Internet and other communication innovations, consumers are always in search of great novelties. Consequently, it's only natural for us to look at Brazil, a country with formidable growth potential, a great culture and plenty of hungry entrepreneurs who want to make a difference in this new world. Given the size of the country, its economic and business potential, any good marketing professional should be curious about what is happening there. The Havaianas is case in point.
       At the beginning of the 20th century, Scotsman Robert Fraser arrived in Brazil and began manufacturing flip flops based on the traditional zori sandals brought to the country by Japanese immigrants. By 1958 he had developed the rubber version known as Havaianas - a name that he trademarked in 1962.
       The design of the shoe was basic and it was available only in a limited range of colours, but what it lacked in variety it more than made up in strength, durability, comfort and price. Within a year it was so popular with working Brazilians that Fraser's Alpargatas company was making more than 13,000 pairs every day; it was even part of the basket of staples that the Brazilian government used to calculate the increase in the cost of living. At the same time, tourists were packing the unique, colourful sandals, which they identified with their Brazilian holidays, into their suitcases and taking them home.
       However, sales slowed in the 1980s and in 1994 Alpargatas' management decided to reposition the brand as a fashion item. It added more colours and launched an advertising campaign showing celebrities wearing the shoes in an effort to appeal to middle-class buyers rather than being associated simply with working-class people. As the shoes were taken up by opinion leaders and stars such as Jennifer Aniston and surf champion Kelly Slater, it became socially acceptable to wear them in an ever-wider variety of circumstances. They even appeared on the runway during a John Paul Gaultier show and in the gift bags received by actors at the 2003 Oscars.
       The free publicity generated by international stars adopting Havaianas helped fuel the company's expansion into overseas markets. What had begun almost as a word-of-mouth expansion was given more structure and backed by aspirational advertising campaigns. Marketers were also very careful to adapt campaigns to the country. For example, when promoting the sandals to college students in the US, they maintained authenticity by not over-promoting the product, as this would have seen it lose its "cool" edge in this demographic. And in France the big export hit started during the 1998 Fifa World Cup but really took off when the French importer started to position the brand in the luxury market alongside leading designers such as Lacoste, Gaultier and John Galliano of Dior.
       However, at the centre of Havaianas' success was the formula used by most other successful new brands, wherever they are based: a dedicated, persistent and committed group of people created an innovative product that is genuinely meaningful for customers. They maintained a clear focus on that product and, thanks to the company's size, were also able to be more flexible than established competitors. Additionally, they worked to exploit their competitive formula in as many markets as possible and as fast as possible, making it harder for competitors to get a foothold.
       For a brand like Havaianas, the challenge will remain to be creative enough to bring exciting new products to the market while avoiding the complacency that sometimes follows success. Being relevant to consumers, being innovative and being better than the competition remains the old, the current and the future challenge of all companies around the world who want to survive and prosper, whether they originate in the old world or the new.

       Prof Dominique Turpin is IMD's director of the international seminar for top executives. IMD is a leading business school in Switzerland (www.imd.ch).