How Havaianas built a global brand; Flip-flop maker excelled at planning and marketing

September 2, 2013 6:10 pm

How Havaianas built a global brand

By Dominique Turpin

The story

The Havaianas brand of rubber flip-flop sandals started life 50 years ago as a basic shoe for poor plantation workers in Brazil. The brand became a staple in the country before gaining fresh impetus in the mid-1990s, when parent company Alpargatas decided to reposition the declining brand as an aspirational fashion product. It hired leading designers to come up with attractive colours and designs and soon Brazilian and then international celebrities were wearing the new, colourful and stylish, higher-priced sandals. Sales grew rapidly. However, the market was saturated in Brazil, where Havaianas sold 850 pairs of flip-flops for every 1,000 people in 2007. And although it was enjoying strong overseas sales growth in 65 countries, it did not have a strategy for international expansion. In 2008 Marcio Luiz Simoes Utsch, Alpargatas chief executive, decided to try to turn Havaianas into Brazil’s first truly global brand.The challenge

Making Havaianas a global brand would require further expansion in Europe, the US and Asia. Although wealthy markets with huge potential, they required several responses from Havaianas.

● It would have to expand its range of colours and designs to appeal to consumers who were more sophisticated and who did not have either the same flip-flop culture or climate as Brazilians.
● Heavy investment in sales, marketing and production was necessary.
● Rivals included successful brands such as Crocs, Rip Curl and Quicksilver.
● Lack of precedent: global brands had generally come out of the US, western Europe or Japan, not emerging markets.

The strategy

The key elements of Havaianas’s strategy were a constant focus on product innovation; a consistent global marketing and communications strategy; and fast, flexible responses to consumer tastes.

The company introduced new sandals with closed tops for cooler climates, sandals with straps around the ankle, and even sandals with real diamonds for fashion shows. It also kept the Havaianas brand fresh by introducing socks, bags and softer, washable shoes.

The marketing message suggested innovation and aspiration; it also built on Brazil’s positive image overseas by portraying Havaianas as a colourful, joyful, simple product. This general message still allowed the company to tailor its approach to different countries. For instance, in the US, Havaianas was careful not to promote its sandals to college students so much that it threatened the brand’s “cool” edge in this demographic; in France, sales took off when the French importer positioned the brand in the luxury market alongside design names such as Lacoste and Jean Paul Gaultier.

To help maintain a consistent message, the company preferred to run its own operations rather than work through local importers and distributors. The main exception was Europe, where it has five offices but 18 distributors.

The company reacted fast to market intelligence. Sales slumped if the flip-flops were made outside Brazil, so Havaianas opened a new plant in the southeast of the country. When it realised customers liked shops with a full range of its flip-flops, it opened stores in Rome, Paris, London and New York.

The results

The brand is sold in more than 80 countries, helping Alpargatas to post total sales of R$2.6bn in 2011, up from R$1.7bn in 2008.

The brand manages both to remain popular with all classes of people in Brazil, while also selling as a premium product abroad.

The lessons

Turning Havaianas into a global brand was a triumph of planning and classic marketing techniques, in which diligence and creativity are allied to constant innovation.

At its centre was a simple yet innovative product that is genuinely meaningful for consumers. The company maintained a clear product focus and was careful to remain flexible.

Additionally, Havaianas focused on as many markets as possible, making it harder for competitors to gain a foothold.

The writer is professor of marketing and president at IMD