Qué es Marketing: Con un Verdadero Experto, Rolando Arellano

Rolando, thank you for coming. Thank you to you, Diego. I wanted to have this conversation thinking of it as almost a marketing masterclass. The followers of Digital know that I am passionate about the topic of marketing, advertising, content, communications. Infinite times at university I heard the phrase, "according to Arellano" or "according to Arellano marketing," referring to your studies, your works, your thoughts. So I think it's a super opportunity for the audience to learn about marketing, almost thinking of it as a conversation. To get to the core of marketing, I wanted to start by asking you, what is marketing to you?

What is marketing? Well, marketing, I could tell you, is the discipline supposedly most known by people. Everyone says they know about marketing or believes they do, and it's the least well-known of the disciplines. In that sense, for many people, marketing is exactly the opposite of what it should be. For example, when people say, "Ah, they're marketing themselves," they mean, "Well, they're presenting an image there that may or may not be true." But that, that's not important. When in reality, marketing is a discipline that starts precisely from fulfilling what people need and doing what people need to achieve their satisfaction and a long-term relationship between the sender and the receiver. I have a phrase I use a lot: marketing is not selling; marketing is getting them to buy again. Isn't that right? So, what that implies is that for there to be real marketing, you have to have sold, or they have to have bought something that has fulfilled what you promised, so that that virtuous circle is generated, which makes people return and fosters loyalty, and there is loyalty. But that implies a second level. I mean, while people think, many people think that, deep down, marketing has nothing to do with truth or with fulfilling. The essence of marketing is exactly the opposite. That is, you have to fulfill to be able to do good marketing. I mean, the sale is just the first step of marketing. The true result of marketing is loyalty. That's the first thing. And the second thing is that many people, when they think of marketing, think of communication, think of advertising, and eventually sales. But in reality, that in marketing is the tip of the iceberg. That's what people see, and it's normal that they think marketing is advertising or sales, because that's what they see. But underneath, marketing is creating the most suitable product for people, it's distributing it, marketing is setting an appropriate price or finding the appropriate cost so that it has the price, and on top of that is communication and sales. So those famous 4 Ps, right? That's what they taught me at university, right? The 4 Ps: product, price, place, promotion. That's right. And many people get stuck on the concept of marketing as promotion, when in reality the other three Ps, that is, developing the product, distributing it, setting a price for it, are as important or more important than that.

Many people, I think, also confuse marketing with branding. Of course, some of the things that happen is that there are marketing experts, and that's one of the problems, that they only know one part. Isn't that right? It's like the blind men, you know, who find an elephant, and one touches the leg and says, "Ah, the elephant is like a tree." Another touches the ear and says, "It's like a leaf." Another touches the trunk and says, "No, the elephant is like a snake." And the truth is that the elephant is all of that. So, the one who talks about branding being the marketing of the moment is actually forgetting that branding is one of the parts of marketing. It's like saying that branding is more important than marketing is like saying that Diego Reto's name is more important than Diego Reto. And of course, it's very important that Diego Reto's name is known, is well-positioned, but that's not separate from the rest of the structure, and branding is one part, not an unimportant part, but not even the most important part of marketing in general. When you get together with a company or a person to develop a project, where do you start? When you talk to a client, what is the first question you ask them? What is the first answer you want to be resolved in order to start a marketing plan or a marketing campaign or develop a product, perhaps?

Well, the first thing I ask, without a doubt, is what do you expect to achieve? I mean, when they seek us out for consulting, what do you expect? I mean, why are you looking for us? What's bothering you? What need do you have? What does the person have? And the second thing is, I ask them, what are you like? What is your company like? What are your clients like? I mean, when I sell, I don't talk; I listen. I mean, selling has much more to do with listening than with talking. So, I ask them everything I can about them, about their company, about their market, what they believe their market is. And based on those answers, do you have some kind of framework, methodology that you then advance with, or not?

The first thing is to listen to them based on what they need. I mean, what they believe they need, which is not the same. Based on that, it's to propose to them, if what we are understanding is what they want, because that is the second level. I mean, in the end, any interview is a matter of communication, and you communicators know much more about that than we do. I mean, communication problems are central elements, central, and they generate much of the problems in relationships with clients and all of that. So, the second step is to tell them, "Look, what I've understood that you're asking me is this, this, this other thing," and generally, there are improvements in that understanding. Yes, the number of companies with which I have met in my few years working as a marketer, as an agency owner, that I have met with a company, and the marketing manager thinks they are one thing, the general manager thinks they are another, the marketing assistant thinks they are another, human resources wants to communicate something else, etc., etc., etc. Or worse, in companies like law firms, where there are several partners and everyone has the same level, you could say, and each one wants to communicate something different, or wants to be something different, or even wants to achieve something different. In line with what you're saying, it makes a lot of sense. What you say about first needing to be very much on the same page about what we are trying to achieve.

Exactly. In fact, if you want to put it more currently, you have the threat for everyone, right? Of artificial intelligence and ChatGPT, etc., that answers all the questions. And it's true, but the problem is that often the answer isn't important; the prompt is important, what you feed it, what you're going to ask. And that's harder for artificial intelligence to do, right? Because you have to know how to ask the good questions, and there lies the magic of any consultant, of any analyst, and any marketer. Because marketing, in the end, is putting the market, putting the consumer first. I mean, they are the ones in charge; the market is. That's a point I wanted to get to. And referring to your work, which is also closely related to research, I think many make the mistake, many business owners, marketing managers, general managers, etc., of perhaps wanting to push the market, what they want the market to want, how they want the world to be, instead of listening and trying to find those needs, those problems, those frustrations of the market, to then, based on that, go to this product, price, place, promotion to go to the market, right?

Exactly. And in fact, if we go back to your initial question of what is marketing, I was telling you, marketing is a very poorly understood science because people think it's this, this other thing. But in the end, if you want the philosophy of marketing, which guides marketing actions, it's putting the consumer first. And that implies tremendous humility. I mean, manager, I, manager, I don't know. I mean, before doing what I like or what I think the client likes, what I have to do is know and find out what it is that they really like. So, it implies great humility and accepting that you are not right. And that's a problem that is very common among managers, that often there is a sense of self—I wouldn't call it arrogance—there is a very strong ego, that they believe they know everything. And the good marketer, the first thing they have to do is get rid of that ego and start saying, "Well, maybe things are different from how I see them."

In line with doing that, learning from the market, listening to the market, where do you start a market research? The first thing is to go out and see what's happening, what's going on. In a first, in a first glance, I mean, when a client comes to us and asks us for work, because we don't do studies, people think that at Arellano we are researchers. No, we provide results, we provide applicable results, so we are consultants, we give recommendations. Research is a tool of our consulting work, agreed. So, but we start all consulting by doing research, and the first research one does, even before proposing to the client, before making a proposal to the client, is to go out and see the market. And go out. Ah, you say, "You want to sell dog food." Okay, well, maybe we haven't had experience in that sector. Fortunately, we have experience in many sectors. But the first thing we do is, we go out there, let's see what happens. Let's go through the central market, go into the stores, etc., and then we'll prepare the proposal, but with a different perspective. So, even before working for the client, we are already working, informing ourselves, to be able to make a proposal that may coincide with what he wants, or sometimes it may not, because sometimes the client comes and tells us, "You know what, I want," and it's very common, "I want to enter the—my products, I sell them in the C, and I want to enter the A." And then we tell them, "Hey, you're going to waste time in the A, which is 3% of the population, and you're in the C, but you know that in the C you have 10% of that market, and you could grow to 40%." So, it's much more profitable for you to start analyzing more deeply here, here, here. But we do that based on even a preliminary study for us, and then we propose it and tell them, "What do you think if we study this better and propose growth in this segment and not in the other, maybe later?" But we present it to them, and there you have to be a bit brave, because often you have to go against the client, right? Because sometimes, if we don't do it, we believe we are doing well by following what he wants, and in reality, we are harming him. So, sometimes it's better to oppose in order to help him.

Speaking of examples, I think there are many mistakes that can be made when interviewing your target audience, right? Almost like leading questions that you can give them, in a way, pushing them to give you the answer you're looking for, to then go to your client and say, "See, my hypothesis was validated." What have you learned in terms of helping a marketing manager, a business owner, on how to correctly validate if their product or service they want to bring to market is required by the market?

Well, you have to learn. The good thing is that most clients [Music] have, they come with a product. It's very likely that that product has certain possibilities of success, right? Because otherwise, they wouldn't invest in researching it; they've already thought about it. So, let's assume it has certain possibilities of success. But also, what we try to see in many cases is not to prove that they are wrong, but to try to improve that position, which is the most common. I mean, very rarely do we tell them, "You know what, this isn't going to work." Why? Because of what I'm telling you. The most common thing is to say, "Hey, this would work if it had these conditions, these others, etc." So, someone comes and tells us, "Look, I live in such a place, etc., I have land, I want to build a shopping mall." So, of course, and we analyze it to tell you the case of Megaplaza, which is an almost emblematic case, the first shopping mall in the popular areas of Peru, which later served to build many other centers that we have fortunately helped. So, the gentlemen, the clients, come and say, "We want to build a shopping mall in Lima Norte," at a time when nobody thought that the districts, as they were called before, had possibilities, that people didn't want this modernity. We analyze with them, and very open people, and we tell them, "Hey, and why don't we think about building a modern shopping mall?" And they say, "Well, I think these people here aren't interested; they're more interested in a Gamarra." No, but let's study it to see what happens, what occurs. And suddenly, we find, because we already knew that there was much more modernity than we thought. And then the open client, which is good, is to have an open and willing client, and they say, "Okay, let's study it," and we end up building a very successful modern shopping mall. But it's based on their idea, "Hey, there's an opportunity here," and we improve it, which is the most common thing now. For that, you have to have a client who is open to that, because some might say, "No, you know what, I don't like what you're saying, so I'd better look for another researcher or another consultant who tells me what I want." You might lose them. Yes, but in the end, there's a responsibility on both sides, and the good thing is that you can help clients improve their ideas much more than telling them that their idea won't work. In some cases, it happens, but not, it's not that common.

Returning to the marketing plan, looking at this elephant completely, this marketing in a rounded way, perhaps referring to what we discussed earlier about the 4 Ps: product, price, place, promotion. Going step by step, let's say, what have you learned about the product? You spoke, for example, earlier about this client who perhaps wants to go to the economic level A, but there's an opportunity at the economic level, perhaps C. You famously, I would say, have spoken about lifestyles, of different audiences, of how there are the sophisticated, the progressive, the modern, the formal, the conservative, and the austere. What have you learned about how to formulate a good product or service, and perhaps what learnings are there about what type of market segments, or in this case, perhaps lifestyles, require or want?

Well, of course, the central element of a marketing strategy is to design the product or service that will be the element, let's say, that will be the axis of a company's offering. And for that, the first thing is that you have to think about the specific characteristics that your clients have. And one of the most common things we see is that often people come with stereotypes. So, for example, stereotypes become fashionable, and then they start talking about millennials, or they start talking about, I don't know, some characteristics that are going out of fashion, right? Characteristics go out of fashion, and they tell you, "So, millennials don't like to work. Millennials, what they want is for me to grab their backpack and leave." And they say, "Well, if I find work later, etc." And the truth is, of course, they read that, and maybe it's true in England, in the United States, but when you go to our millennials, I mean, people who are between 25 years old, or when they started seeing them as 20 years old, to the millennials of Latin America, you won't find a millennial who tells you, "You know what, I don't want that job, under what conditions? I'm going to pack my backpack and go on a trip." Maybe that will be a very select, small group, a very small percentage. But the opposite, rather, is to find that millennial who says, "Hey, I work until 5, and at 6 I go to university to do my diploma, and I finish, and on Saturday I have classes, etc., and by the way, I do odd jobs doing taxi." Those are perceptions that perhaps come from Hollywood, or I don't know where they come from.

Of course. And that's the most serious error when one tries to do it, let's say, to define products, because you base yourself, and in many cases, you base yourself again on what you like. So, you say, "Let's define a bank. What do we want? A bank? Ah, where people go and find a coffee, and where they can sit, and where there are comfortable seats." Clear, that's for me. But most bank users, what they want is to get in and get out quickly. They don't want to have coffee or sit. They want to know, "You know what, how do I do it?" But then, in the definition of products, you have to take into account the characteristics of your consumers very carefully. And in this case, that's why in Peru, with a very large middle class, but which doesn't correspond to the middle class described by books from abroad, we said it's necessary to segment. Because it's not the same to sell cosmetics to a modern woman, meaning a lady who works outside, who is on the street for 8 hours, etc., and who also takes care of her family, but is much more active, than to another conservative lady who is at home 20 hours a day taking care of the children and etc. They are two different products, even if they are at the same socioeconomic level.

Rolando, how are you going to think about it? Because both are B, if you want, and they are sisters, but the conservative mother, the conservative sister, well, she only uses cosmetics when she goes out with her husband. And the other, the modern one, uses cosmetics every day because she needs them for work.

There are aspects, demographic aspects, who they are as a person, by age, gender, even perhaps where they live, etc. And then there are psychographic aspects, which we could say go more by personality, lifestyle, etc.

Of course, the concept is that money doesn't dictate everything. I mean, the fact that you have money, more money, doesn't mean you're going to drink whiskey. I can have a lot of money, but I don't like whiskey because I was born in Villa María del Triunfo, I grew up in Villa María del Triunfo, and when I have money, what do I do? I drink more beer. I don't move to whiskey. Or, for example, with technological products and services, you have someone who is an early adopter, whether they have money or not, they want the latest cell phone, they're using ChatGPT, etc., etc. And then you have, perhaps, a multimillionaire who is still using a 10-year-old cell phone, very traditional.

Exactly, exactly. So, I think that for the definition of products, the P of products, it is fundamental to see which market you are targeting and to be clear that these markets are not always the markets that appear in magazines or that sometimes articles or things that reach you through your social media talk about.

In line with listening to the market and defining if there is an opportunity for a product or service, there is this famous phrase that supposedly Ford said, that if I had asked people what they wanted, they would have told me a faster horse. And so, he, in theory, ignored the market. What do you think about that? About to what extent should one listen to the market?

Well, you're right, because of course, you, the thing is not to ask people. In some cases, you ask, and they will give you the adequate answer, but often people don't know what they need, or they don't know what is possible, or if it is possible. So, of course, if you had asked people what they needed, they wouldn't describe the product, because that's precisely why you are there, you are the developer, the inventor of these things. But if you had asked them, not what they want, but what they need, and you analyze their need, what they will tell you is, "I want faster transportation," right? Because of course, since I don't know beyond horses, they will tell you, "I want horses that run faster." But deep down, you will go and see faster transportation, which is what people are needing. So, the value of a good entrepreneur, or of a good researcher, is not in asking what people say, it's in researching what people need. Because it's like saying, it might sound a bit silly, but it's like I'm a criminal investigator. So, supposedly, if what Ford said were true, then as an investigator, I know you are a criminal. I know you are a criminal, and then I would ask you, "Hey, are you a criminal?" And then I would say, "No, he's not a criminal because he told me he's not." That's not the job of the investigator. It's not to ask people; it's to find out what's behind it. Because if you ask, in reality, people won't answer you. And in fact, Steve Jobs said the same thing: "I don't ask," right? But when you see Jobs's statements later, you start to say, "Hey, Jobs was pure marketing," because not even Jobs knew about technology or anything. What he did was analyze and think about what people could receive better and what people were needing. He said, "Hey, faster music, easier to carry, 1,000 songs in your pocket, 1,000 songs in your pocket." And 30 or 40 years earlier, Mr. Morita of Sony did the same thing when he created the Walkman. He said, to the point of saying, "What people need is to carry their music with them." And what did he do from there? He developed the little devices, the headphones, and even the cassette, they developed it for that reason.

One thing that I have learned, to put it simply, is that your job as a marketer is to understand the current situation of your market with all its problems and frustrations, and then to understand its desired situation, let's call it, with its objectives, what it wants to achieve. And it's your job to try to bridge that gap and design the product or service that will take it from point A to point B.

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Now, back to the conversation, and in line with differentiation and positioning, because there are times when you can create a service or a product that enters into direct competition, same price point, sold in the same place, promoted perhaps in a similar way. And on the other hand, you say, "No, we have to find our niche, we have to be different," either because we solve the problem in a completely different way, or because we target a different market segment. What have you learned from that? Surely you have seen many cases where companies have entered into competition and others that differentiate themselves, don't seek that. There is this famous book, "Blue Ocean Strategy," versus very competitive "Red Oceans."

Well, the element is that if you sell something that is the same as the rest, as what the rest sells, then your only differentiation will be price. So, it means a cheaper price. And when you sell at a cheaper price, what you are doing is lowering your profits. So, it's the worst possible logic, it's doing the same as the rest, because in the end, you will end up competing on prices and not winning, or rather, winning as little as possible. Or, from a business perspective, it's suicide. It's a race to the bottom, as they say. It's predictable, isn't it? Even the one who tells you, "Hey, I'm going to enter, and my product will be cheaper than the current one, and since it will be 10% cheaper than the current one, then I will win everything." And the truth is, the one who is in the market will say, "Oh, what a shame, they're coming 10% cheaper, and so they've already beaten me." They will also lower their price, and in the end, they end up in a price war where no one wins. The important thing here is precisely to differentiate yourself to be able to raise prices, or rather, to be able to charge more than the rest. So, if you don't differentiate, you are exposed to low prices. If you don't differentiate, you are exposed to immense competition. If you don't differentiate, you will never be able to grow.

What are the most effective ways to differentiate, in your opinion? Because there are many ways you can differentiate, but not all of them are necessarily beneficial, or beneficial in the long run.

No, the greatest differentiation is when you provide more value to your client in a way that is difficult to imitate. Clear, like barriers to entry. Clear, but, I mean, a difficult-to-imitate value, right? And that difficult-to-imitate value is sometimes not that complicated. Sometimes it is, but sometimes it's that you find a niche that no one had seen. I mean, if you sell, I don't know, clothing for women in our countries, I mean, it's not the same to dress, to sell clothes for a Caribbean woman, Colombian or Venezuelan, as it is to sell clothes to a Bolivian or Peruvian lady, etc., who have different bodies. So, if you are in Bolivia, you would probably have much more success if, instead of copying the models that come from abroad, you would copy, I don't know, measures specific to the ladies of Bolivian ladies, who are different, with different bodies. It is often that differentiation is found by adapting better to the market you know.

Clear. And that differentiation can also come from how you sell, right? In a way, finding an underserved sales channel. Differentiation, the case of our countries, for example, is not much in the world, but for example, these sales networks of women that are very common in Mexico, that are common in Colombia, in Peru, etc., the cosmetic companies like Unique, Yanbal, and all these systems are very differentiated systems and they manage to reach a community of women in a very efficient way, and different from other places.

Following the topic of price, a while ago you mentioned that there are clients who want to go to that premium sector, they want to have the highest-priced product in the market. Often we see products where we say, "It's the same product that costs 10 times more or five times more than the standard, but for some reason, people buy the one that costs five or 10 times more." In your experience, what has that product done well that sells five times more, even if it's not even that differentiated, perhaps by how it communicates, brought in some influencers, famous people, where it sells? What do those products do that manage to sell a product that is, in a way, the same, but manages to convince people to pay considerably more for that premium price?

Clear, because this comes a bit with your previous question, right? In what way can you differentiate? Sometimes the differentiation is not by the product. Sometimes the differentiation is by the image the product has. So, in that case, you can be differentiating yourself by the image you have given to the brand, etc., which is one of the differentiation variables. So, of course, when you buy a white t-shirt, or a sweatshirt, as they might call it in other places, a white t-shirt, and how much will it cost you? Maybe $2. And then, that t-shirt, if it had a little mark here, right? A little mark here that is Nike, right? Or Hugo Boss, or Hugo Boss, that little mark or that brand no longer costs you $2, but it costs you $20. But you're not selling a more expensive t-shirt there. What you are selling is the brand. So, in reality, it's not the more expensive product; it's the status it gives you.

Clear. What it's selling is the status, and the differentiation is by status, to the point that it no longer matters to me if that mark is on the t-shirt, or if it's on a bandana on my head, or if it's on my sneakers, or whatever. So, the brand becomes the product. And it comes a bit with branding, which is one of the market strategies. But on the other hand, that is also true, and it works, and it works in some markets, especially in richer markets. But when we talk about Latin American markets, where the high-income sectors are very small, I mean, where we talk about 3% of the population in Mexico, in all our countries, you have to think that if you want them to pay that much, your sales volumes will be small. So, there, you have to consider the risk of the equation of sales volume versus margin, because you can have very large margins but sell little. Sometimes it's even convenient to sell little. I mean, you want the stock to run out, you want the product to be scarce to justify the price, because if everyone can buy it, if it's available at all times for everyone, it loses a bit of that status aspect.

Clear, because that's the paradox of luxury. The paradox of luxury is that for it to be a luxury brand, it has to be a very well-known brand, which means it has to be sold. But if it's sold a lot, it ceases to be luxury. So, it's a paradox, and the brands that work on that have to walk a tightrope between selling a lot and being desirable enough, but not selling so much as to be desirable.

Clear. There's a clothing brand called Supreme that basically became very well-known, and it's not as popular as it was perhaps a few years ago, but basically it grew based on this game of scarcity. They would release a new batch, let's say, of sweatshirts, polos, shirts, every month, and they would sell out in an hour or less. They had a very long queue of people outside the store to buy, and they always sold out of stock. And that was the strategy: always sell out of stock. And then that created a second-hand market, just like here in Peru and Latin America, people buy concert tickets to then resell them. It was the same with clothing. People simply bought because they knew they could then sell it for double, triple, precisely because of that scarcity.

Yes, but, but I don't know the experience you're talking about well, but if you tell me now, "What brand is it? How long did that strategy last?" I'd say, "I don't know." But I don't know if it was as successful as to be able to sustain itself over time. Something I learned, I don't know if I'll get the names right, but in line with the different product categories, perhaps we could say there's like a standard, right? The product that provides the average solution in terms of value. Then, perhaps we could say it's premium, in line with what you mentioned about differentiating by providing more value. And then you would have luxury, where luxury doesn't necessarily give you more value than the standard or the premium, using these names, but precisely the value of this luxury product is the price. It's being able to say, "I spent X amount of dollars on this watch," and the ability to say how much you spent, that status, which also comes a lot with the ego we talked about earlier, is the value that someone is buying, not what the product gives you. It's simply a signal: "Look how much money I have."

Clear. It's again the issue of the paradox, because of course, we were talking about the 4 Ps, right? And what happens with the 4 Ps is that, although we present them as if they were all equal, in reality, what you have is a balance where, on one side, you have the product, you have the distribution, which is the place, the place P, the place, and then you will have, let's say, advertising, communication, which is the image, I mean, that you are known. I mean, what is it that you give the client? Do you give them a product, or do you bring it to their home through distribution, through place, or do you give them status because you make it known, etc.? And at the other end of the balance, you have the price. Agreed? So, the, they are not 4 equal Ps. I mean, the P, the price is what you take away, while product, place, and promotion are what you give. In some cases, it happens that the price, the fact of having a high price, you put it here because the fact that it is expensive gives it value, which we could call luxury products, right? But that's very rare, isn't it? But, but they exist, but they are rare products. But in most cases, even the premium product, why can you charge more? Because you are giving more in product, or you are giving more in distribution, or whatever. Agreed? But sometimes, yes, price is an indicator of value. And in fact, in our countries, in our work, we have an area at Arellano, which is precisely why it's not Arellano Marketing, it's Arellano Consulting for Growth, one of its areas is Arellano Marketing. We have products called "Preciar," which is all the consulting on prices. And very often, we tell clients in their price analyses that if they want to sell more, they should raise their price. Why? Because there are many people who have high-quality products and don't sell them because they believe it's better to compete on low prices. And when people see the product at a low price, they say, "No, it can't be that good." And it's very common that in our consultancies, our recommendation is: raise the price, and by raising the price, they sell more. I've heard of a study where they gave several people three bottles of wine, without labels, and just told them the prices. Let's say, any number, I don't remember the exact number. You have the $10 one, you have the $100 one, and you have the $1,000 one. Undoubtedly, everyone ranked it in terms of wine quality based on its prices. It was the same wine. People judge based on price. So, price becomes an indicator of value. It's an indicator of value that you have to be very careful with. Correct.

Now, on the other hand, an element there that is very important, Diego, here is a

The idea that many of us have, that the poor, in quotes, in our countries want low prices, that is a fantasy of many people. That is, the poor, you have to sell to them. Be careful, now all the supermarkets are listening and are going to start raising their prices. It's not a question of raising or lowering. What happens is that here, when you analyze the markets in general, the popular ones, you will find that never, or almost never, is the cheapest product the market leader. That is, look at noodles, look at oils, sodas, everywhere. So you will see that in Coca-Cola in Buenos Aires or anywhere, the bottle sells for one dollar, while the average national product sells for 50 cents, and you will find it in Peru, you will find it in Mexico, you will find it everywhere, and it is the best-selling, and it is not the cheapest. And in most mass consumption products, I'm not even talking about clothes or brands or those things, the cheapest product is the market leader, the one that sells the most. It's very rare. Why? Because the poor, in quotes, what they have is less money, and since they have less money, they have to demand to get the most value possible from the money they have. Therefore, what they are going to look for is to buy the best they can with the money they have, which is different from buying the cheapest. It's an important distinction, isn't it? So, if I have one sol, I will have to buy as much as I can. Or I have one peso, I will have to buy as much as I can with that peso, not that I won't buy what costs 50 cents, I will buy the peso, but the best product with that peso. So it's more a matter of accessibility, of my money being enough to buy something, rather than looking for the cheapest. It sounds a bit special, but it's very important.

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We have talked about product, we have talked about price. Now I want to move on to talking about promotion, advertising, communication, persuasion, all these words. But before that, and I think it's very aligned with what we were talking about regarding the product, what do you think about names and logos? Are there any insights, any learnings about what makes a good name, a good logo? Because it's very related to what you were talking about with the stain on the shirt. Yes, yes, without a doubt, they are important, and they are very important. What happens with brands and names in general? Communication has a cost. Becoming known, that is, communication has two variables: that they know you, and then that they like you. That's commercial communication. So, what you have to do is... this is almost mathematics, physics, whatever you want to call it. Everything you want to achieve in communication will have a cost in time, effort, and money. So, first, they have to know who you are. If you are going to talk about this new soap, about a soap you are going to launch, you have to know that that soap exists, and then know that that soap is good. Okay? So, if you call the soap, let's say, "Margarita Soap," then the first thing you have to say is, "Ah, I have to spend on communication, on communication bytes," so that people know that Margarita is a soap. And then, after people know that Margarita is a soap, I have to make a communication effort so that people know that it is a good soap. Two communication hits, two efforts. What happens if, instead of calling it Margarita, I call it, let's say, "Cleanie" or "Good Soap" or "Good Soap" directly? Okay? The name, "Good Soap," "Good Soap," I no longer need to spend on saying, "Hey, this thing I'm talking about is a soap." You've diluted yourself less. You've diluted yourself less. So, instead of spending 1000, you'll spend 500 to achieve the same result.

There's this video that anyone listening to this can find on YouTube of Steve Jobs when he had just returned to Apple. They had fired him, he had been kicked out of Apple, the company had done terribly. He returns, he's in his sandals, shorts, and polo shirt on stage, and he says, "Apple is one of the best brands in the world." It's not up there with Nike, with Sony, etc., etc. But in recent years, we've made the mistake of having too many products, communicating too many things. So, just me, and currently in the world, and this was in the 90s, early 2000s, around there, it's very difficult, it's very expensive to make people understand what you want to communicate, what you want them to understand about your business, your product, your service. They are bombarded all day with information, with communication. So, we have to be very specific, very punctual, not dilute what we want them to know about us, because again, we have limited resources. As you say, everything, each communication costs, each thing we want them to know about us costs. So, we have to be very specific. And there they reduced the product portfolio, I think from like 12 to four, and they were much more specific and launched their famous campaign where they compared themselves to John Lennon and all these people. That's right. Now, many people will say, "Well, hey, but Mercedes was the daughter of Mr. Benz, they named her Mercedes, and look what a tremendous brand it is now." Yes, and there is that. But, of course, these were times, or first, when there was little competition, and when you could wait 50 years, right? For your brand to be famous. So, of course, and Chevrolet was a French race car driver from that era, etc. So, yes, I mean, you can name it anything. I mean, you'll see "Furniture Store," "The Effort of Two Lives," or things like that, you can name it. But it will cost you. So, of course, the marketing, communication, advertising professional, precisely what they do is look for efficiencies. So, for this, it's important to invest in generating a brand that saves you the communication cost, so that every time people hear it, they think of some attribute you want to give to your product, and it's not the minimum attribute, the attribute inherent to your product, just a randomly placed name. Because branding, the word branding comes from branding cows, from putting that stamp, you could say, burning the cow so you know where it comes from, it has quality, etc., etc. So, the logo, the name, the brand is simply a reinforcement of the experience or expectation you can have of a product or service.

Of course, it's fundamental. Branding is fundamental. Having a, working on a brand is fundamental. The only important thing to see is that it's part of a larger concept of marketing, not of a marketing strategy. And speaking of the last P, promotion, how to communicate better. You've done a lot of work where you've analyzed the market, understood those needs, those market problems, what the market wants, not what the manager wants the market to want. A first hypothesis has been thought of for what the indicated price should be. Then, to go to market and promote and communicate, how is influence and purchase persuasion generated? You mentioned that marketing is also what happens after the purchase, but it has to achieve the purchase to then get that recurrence, that loyalty. What happens there is that communication is not at all, on the contrary, separated from the good product, from good distribution, from the adequate price. And why? I mean, it's not "instead of," it's "with." Because very good communication for a bad product is what makes the product fail faster. Exactly. So, it's important to know that communication has a very direct relationship with the other 3 Ps. So, I can't think of an advertiser who believes that only with communication they will achieve success. So, probably, if they are a very good advertiser, they can make a bad product fail faster. So, it's that. That's the first thing. Second, from there, I do believe that the most important job of communication is to highlight the truths, the truths of the benefits of your product. And this is not doing advertising at all. In fact, I have nothing to do with it, but I really like the phrase from Macá, from the Macá agency, which says their phrase is "the truth well told," because if it's not well told, no one will listen to the truth. Exactly. So, what the communicator does is make that truth spread faster. But it's not detached from one thing from another. And I believe that the essence of communication is now. The best communication is that which makes you try a good product, because from then on, the product itself does the communication. That is, the important thing is that advertising should initiate the trial cycle so that the product itself is the great promoter of itself.

We all have a favorite advertisement. What is yours? No, no, no, there isn't one. I remember there's one that we chose many years ago, as in the case, I'll tell you about the Peruvian case, in the advertising of a Peruvian rum that was called Pomalca, right? Pomalca Gold Rum. I like it a lot because I think it captured the spirit of the market it was aimed at, which was the Peruvian market. I think there are advertisements that break molds. The launch advertisement for... in the Super Bowl, let's say, of Wall, the Apple advertisement. I think it's interesting, it's iconic, it's iconic, it's good. But because they grab attention, they grab attention. I, I think there is, you know, I think there are two ways to look at advertising. When you say that advertisement is good, it's probably good advertising. But when you say that product is good, then it has been good advertising. It's the best advertising. Exactly. So, an advertisement that makes you say, "What a good product," is the best advertising. Now, there are advertisements that win awards, etc., and that then sell nothing. We'll find a lot of that. I mean, one of my favorite advertisers, the most famous in the world, David Ogilvy. Ogilvy's phrase was "We sell or else." We sell, or else. You'll see what happens. You'll see what happens. That's right. That's why I don't focus so much on whether advertising is good or not. There are some that make you laugh. There are advertisements, in fact, in some cases, they even abuse things that logic tells you they shouldn't. Those advertisements that tell you a joke or make you laugh are interesting advertisements. But we know they will last one or two times because if you laugh at the same joke three times, you no longer laugh. So, there are some things that I think should be thought about regarding the advertising scheme. But what I do want to say is that in moments of increasingly intense competition in the world between products, advertising is essential to get you to try it faster, to stimulate the speed of product introduction and to prevent your competitors from catching up so quickly.

And in line with the use of discounts, promotions, scarcity, or urgency to convince someone, to what extent should a company use these, perhaps let's call them tactics, because they can't be a promotion always, otherwise it becomes the reality, or urgency always, or scarcity always? At what point should a company consider it, because it can also become a double-edged sword? It's a double-edged sword, in fact. Many people believe that promotion is actually a competitor to advertising, which is not true. The "buy one, get one free" says, "Why should I do advertising if when I offer buy one, get one free, I sell much more?" And while with advertising, I don't know how long that will give me results. But the truth is that, again, every promotion is a price reduction, and every price reduction, as we were discussing a while ago, diminishes your perception of value. They are giving you something cheaper, and moreover, you are earning less. So, while the value of advertising is to generate brand value, to make people appreciate you more, promotion what it does is take away value from you, while advertising, true advertising, gives you value. So, any of those little tricks to make them buy, for whatever reason, simply for an external stimulus, etc., will last a short time. And companies are not made to last a short time. Companies, the idea of a company is to have long-term loyalty. Perhaps an emergency button for situations where you might have overstock, or the product is going to perish, or something like that. Oh, without a doubt, without a doubt. Of course, there are many cases where it is useful, but it cannot be a strategy. As you said, I think you said it very well, it's more of a tactic for a moment, etc., but it cannot be the strategy. And there are companies that do have it as a strategy, who even... what is happening today with all digital advertising and traditional advertising, of course, one says that what's good about digital advertising is that it makes you sell immediately, but it doesn't necessarily create, it doesn't generate brand value. Not necessarily. And so, I think that's something that one also has to look at and reflect on the use, not the combined use of, I don't know, advertising that gives you content with that which gives you direct sales.

Of course, there, you're referring a bit to when you do digital advertising, there are different ways to do it, right? Or promotion, digital marketing is a bit more my world. I can have a brand strategy, for example, this podcast, you mentioned it, I love Diego Reto, you know it because this program exists. I've created a personal brand, Era Digital. It's growing little by little, but in a way, I can't directly measure the commercial result. I'm generating a brand, I'm generating followers, I'm generating awareness, all these words. And I trust, just like when someone does an advertisement perhaps on the radio, on television, or I write a book or something like that, that in the long run, over time, it will give me business results because it will give me access to new opportunities. If I provide value, that will generate a positive reputation that I can then attach a product or service that I sell. Versus when I invest in Google Ads or Facebook Ads or something like that, and I'm doing what perhaps in my world we call performance marketing or growth marketing, there I am measuring. Hey, for every dollar I put in, how many dollars do I generate? And I'm measuring every click, every meeting, every conversion, and I need that customer acquisition cost to be less than the lifetime value of each customer. And it's a mathematical game. And literally, agencies that do performance marketing or growth marketing have mathematicians on the team who are calculating those equations, which is perhaps the equivalent in the traditional world to what was called Direct Marketing, which wasn't the brand recognition ad, it was perhaps flyer distribution, door-to-door promotion.

Exactly, that's precisely what I was referring to, because what happens is that there isn't a word to differentiate when we talk about digital advertising, whatever it may be, the use of the internet and all that is absolutely valid, but what precisely I was saying is that there is the type of advertising with content, where there is content that makes you, and that gives prestige to the brand per se, and there is another that is more of a targeted and results-oriented advertising. It's not that one is bad and the other is good. What needs to be understood is that they are two different objectives. So, in one, it creates value, and in the other, it gives you direct sales. But it's not one or the other. But what happens is that often people believe that everything must be invested in the direct sales side, and they are losing value, or others are only creating value but not selling. I talk to many business owners, just like you, and we have these conversations, precisely on this topic. I tell them, "Look, I can help you with the direct marketing part, but I recommend investing more in this part of brand generation, of content, which, as you say, creates value for the brand in the long run." And again, neither... it also creates an audience for you in the long run, it creates a community, it creates a reputation. Versus the other, you almost enter this hamster wheel where you always have to be putting in the next dollar every month because otherwise you stop appearing. But this brand generation requires patience. They are two complementary worlds, but it's important to keep them in mind because often people don't understand them and believe that one is like the case of promotions, they believe that promotions are instead of advertising, and that's not the case. It's both that should coexist.

And what about public relations? Is that something I've only recently started learning about? Look, what happens is that for a long time, marketing people have been thinking that their target, you know, their target group, are consumers or customers, let's say, those who buy your brand or who could buy it. And the truth is that companies are influenced by many more groups of influence, as they say in English, stakeholders. And a very important group of influence, and one that can influence your company without being your buyer, is what society thinks about you, public opinion. And if that society starts to think badly, it can destroy your brand. So, the job of marketing, let's say, of the public it should serve, goes from your objective to society. And that society, that is built through relationships with the public, relationships with society. In some cases, if that, in some cases, that can be beneficial. For example, Coca-Cola, in the Peruvian case, is a symbol of Peru. So, beyond those who consume that drink, María, those who see us from other countries, perhaps you don't know it, it's a drink, María, that for some it might taste like bubblegum, but for Peruvians it tastes a lot. And more than the taste, it tells them that it is the taste of Peru. It doesn't matter if I drink it or not, but that image in the public has a fundamental influence on the company, on its values. So, public relations, I think, are fundamental to generating value beyond the market. There are also other stakeholders that one should not leave aside, such as in the marketing function of the company, for example, shareholders. For companies that are listed, the relationship with shareholders is very important because the value of the company will depend on it. Or employees, what is internal marketing, which is the segment, how to attract the best and for the best to stay as well. So, that's like a next step that the marketing vision takes, and that is increasingly important.

In your opinion, is there a difference in how to market a person versus a company today? With the issue of social media, it has become viable for anyone to create their personal brand. We have talked about many marketing principles. In your opinion, does anything change when you are marketing a person versus a company? No, the essence is the same, isn't it? I mean, you have to behave according to what, I mean, be useful to your market. I mean, if you are a person who sells your services or you are a professional who wants to be known, the issue is that you have to fulfill your, with that promise. So, the essence of marketing is essentially the same. In fact, many of us don't know it, but our names are a brand. I mean, I am Rolando Arellano Cueva. Why am I Rolando Arellano Cueva? Because Mr. Arellano and Mrs. Cueva got together and produced a child. So, my name is, what do I know, Baigón of Bayer? Arellano Cueva are the producers. And then my name. And that's the name with which they identify me. And it depends on how, how I have behaved well throughout my life for people to say, "Hey, have a good impression of me or not." We all have a brand. We are all marked.

What myths or common mistakes do you see in entrepreneurs, in marketers, about how to do marketing? I think the most important one is what I said a while ago: believing that what we like is what the majority likes. And in this case, the most common thing I've seen in the countries where we work, where our company works, we have offices in several countries, is the view as if socioeconomic levels actually determine people's tastes. And that goes very, very much tied to prejudices, such as prejudices that in the advertising field, for example, that everyone wants to be white. And so, you see commercials from any of our Latin American countries, and if you show them to a Swede, they will say, "Ah, the Latin people are just like the Swedes," with all fair-skinned people and brown hair, as if they were the majority, when in our countries, 60-70% identify as mestizo. Or believing that, in the case of lifestyle, that the image of people reflects their consumption capacity. So, we see a person, you know, who is queuing at the bank, or in line at the bank, and they see them, you know, with an open shirt, a bit disheveled, and they make them wait because there's another gentleman with a tie who is queuing, and it turns out that the gentleman with the tie is an employee in a company, and the one with the open shirt is the owner of four trucks, and each truck is worth, what do I know, $200,000. So, there are many errors of that type based on a mistaken perception of people and of what our markets are.

You, in 2009, did a Tech Talk precisely on this topic. You spoke about the new middle class, about prejudice against Latin Americans. Yes, yes, it's something I've worked on for quite some time. And speaking of Latin Americans, what differences have you learned among us Latinos? Look, I'm going to answer the other way around. I think what has been learned the most is not about the differences, but about the similarities that exist among Latin Americans. I think one of the problems we have in Latin America is looking too much at what differentiates us. So, we think, "Oh, an Argentinian is very, very different from a Guatemalan, then," or a Chilean is totally different from a Mexican, no? But when you really start to look from the other side, you will find that Europe, the European community, which has more or less the same population as Latin America, 700 million. In the European community, you have, for example, 21 official languages, not counting all the patois and all the other things, 21 official languages for 700 million. In Latin America, we have two languages for 700 million speakers: Spanish or Portuguese. And in reality, "Portuñol," no? Because we can, or when we talk about differences in races, right? In Europe, you have the Dutch, the tallest in the world, you have the Spanish who are short, and you have all types. In Latin America, we are all the same. Diego Reto can travel through any Latin American country, and no one will say, "Oh, this person isn't from here." Right? And so on. Wars, you say, "Well, but we've fought, etc." Yes, we've fought, and there was the War of the Pacific between Bolivia, Peru, Chile, or the war between Colombia and Venezuela. But our wars, perhaps they had 20,000 deaths, and 100 years ago. The War of the Pacific was 100 years ago, 200,000 deaths. World War II, 80 years ago, there were 8 million deaths. And now these gentlemen from France and Germany have no borders, they use the same currency, etc., and we can't unite. So, I think the great learning for me is that we Latin Americans are the same. And I've had the luck to teach in many Latin American countries, and I haven't had absolutely any problem. Perhaps in one place they'll call watermelon "patilla," and in another place "aguacate" or "palta," but apart from that, I think the great learning is that we are very similar, and we are wasting that similarity because we could have, instead of having a market of 15 million people like in Ecuador or Chile, we could have 700 million people if we looked at it from that other side.

I don't like it, and to wrap it up, I think marketing is very important. Something that will surely seem even more interesting to those who are interested in marketing here is that perhaps marketing is the discipline closest to general management of companies. Why? Because, as we've seen, when you do marketing, you have to know production because you're going to make a product. You have to know logistics and those things. You have to know distribution, so you'll deal with the logistical aspect. You have to know finance to determine the price. And well, you have to know communications. And that's why, according to statistics, 40% of general managers come from marketing or commercial areas, because it's a very, very integral vision of the company and its customers, probably more integral than some other administrative disciplines. As you referred to earlier, Steve Jobs was a marketer. Is he perhaps the best marketer in history? Yes, he was a person who did marketing.

I don't want to move on to talking about you, I want to move on to closing the topic of marketing a bit and talking about your side as a writer, as a professor, and as an entrepreneur, and then businessman. Experience a moment when you started as a professor, and you taught at universities. How did you start in the world of marketing? What drew your interest to this whole topic? Well, I got into marketing more than I sought it out. Marketing was coming to me because I'm not that young. So, when I started studying at university, my first profession is psychology. I studied psychology, and in fact, at 17, in my second year of studies, I entered as a teaching assistant, a professor at the Catholic University in letters, and I haven't stopped teaching at the university level until now, fortunately. Fortunately, I've had the luck to have a long teaching career, which is what I like, what I always want to transmit. And when I was studying psychology, in fact, in psychology itself, the idea was basically, the only psychology that existed was clinical psychology, psychology to treat problems, let's say, mental, psychological, or that type of thing. But I've always been a person who has always liked to see the results of things and their applications. And in the times when I was studying psychology, it was very interesting to talk about Freud, psychoanalysis, those things, but the truth is, I didn't believe much in it. I said, "Where is that relationship?" Of course, if everything is your mother's fault, and everything is your ghosts' and sex's fault, it could be, but the truth is, I didn't find the connection. Fortunately, when I was finishing psychology, in fact, something very few people know, in my third year, I was already studying, because I didn't find solid foundations in it, I started studying medicine, and I studied medicine for 3 years, parallel to psychology. In fact, fortunately, they were two universities close by, the Catholic University here, I entered the Villarreal National University, Federico Villarreal, to study medicine. And in medicine, I found the exact opposite. That is, there was very rote learning, because the first years of medicine are that, learn the muscles, the cranial nerves, etc., but it's memory, memory, memory. And the truth is, neither of them convinced me. One was very ethereal, and the other was too concrete. And I was lucky that, at the end of finishing psychology, I was lucky to get to work, to do my professional internships at a hospital called Obrero at that time, what is now the Social Security Hospital, in an area where they treated work accident victims. And in the psychology area, there was a professor who took me in there, who helped work accident victims, those who had lost a hand, etc., to reintegrate into work. And I started to see, and here, the psychology that I like, I saw that it was starting to have a productive purpose. That is, yes, it can be, it can very directly start to give results, generate productivity, improve people's quality of life in other ways beyond just the mental. The next step was that I went to do the second part of my, of my internship at the National Institute of Public Administration, at that time, where there were other psychologists who were working on the issue of attitudes, changing people's attitudes, workers' attitudes, how to increase productivity, etc., in the public sector. And the area interested me, the relationship between administration and psychology. In fact, my undergraduate thesis in psychology, because they required it at that time, was a thesis called "Systems Theory between Psychology and Administration," which they approved at the university. I think no one understood it, or very few did, so they had to approve it. And I became interested in administration. I worked in it for a while. I had the luck to have very good older friends in the administration area. A few years later, I decided to do ESAN, that is, the master's degree in administration at ESAN. And at that time, in Latin America, there were three places where master's degrees in administration were given: one in Nicaragua, another in Brazil, and Peru at ESAN, which was very, very difficult to get into, etc. And I was lucky, perhaps as a psychologist, in fact, no one told me, "What are you doing here?" But well, fortunately, I finished well, quite well. And there I found some first marketing courses, and the topic interested me, but I always had my life between human resources and... until two years later, I had the opportunity for a doctorate, to do a doctoral scholarship that could be in the United States or Europe. And I chose to go to Europe because I liked the concept of broad culture more. I went to France, and in France, I found marketing just starting. So, my doctorate in marketing, a doctorate in quantitative marketing. That is, I knew the psychology part. So, it was easier for me, but I did my doctorate in quantitative marketing, and from there my career continued. I was quite young, I wasn't 30 years old, etc., so from there I could dedicate myself to deepening that.

At what point did you decide to start your own business, get your own clients, start your own business with your own surname? Look, for a long time I was a professor at universities, I was director of ESAN very young, then I was a professor for 10 years at a Canadian university, Laval University, where I was director of the marketing department, director of a master's degree in international business. And the advantage of being a university professor, of being a university professor, is that, in the end, you are your own boss, because you decide what to research, you have a lot of freedom, in reality, if you are dependent, but you are almost your own company. So, I've always been independent in that. I've liked doing my own things for myself. While being a professor, I've also done many consultancies. I started doing consultancies for USAID in the United States. I was doing marketing consultancy to fight AIDS, marketing against drug use in Haiti, the Dominican Republic, Colombia, various places in the world. So, I've always been very active as an entrepreneur. In fact, I got that from my parents, who were entrepreneurs. My mother, my father had transportation businesses, etc. I've always seen them work, let's say, independently, and always, work has never bothered me, I've always liked it. So, I've always had activities of this type, many related to consulting, as well as an independent consultant, while I was a professor. And then we went to Canada because I accepted a professorship there at the university, at Laval University. But of course, with my wife Gina, with whom we came from here, our idea was never to stay, to emigrate. Our idea was to go and work for a while because it seemed interesting. But we had already planned our return. Always. And when we decided to return, which was already 28 years ago, the idea was to return and, of course, to be a professor. At those times, they were difficult times in Peru. We're not talking about Sendero still being around a bit, and things like that. And it was going to be difficult. So, we decided that we had to generate something for ourselves. So, we came and formed a consultancy. Fortunately, with the support of various people who already knew me from before, from having been a professor and from the things I had written, and who put up the money to do the first lifestyle study, which was a study that required a very strong investment. The lifestyle study, which you mentioned a while ago, which actually gave rise to this book. This one here, I'll show it. "Lifestyle in Peru." It's the book, "How We Peruvians Are and Think in the 21st Century." Of course, it's a book that, well, it starts to take shape in the work. In '96, the study was done, but it was the largest study that had been done at that time, that had been done. 5,000 people, including, you know, surveys and also focus groups and a series of things.

What made you arrive at the idea that that was the research you had to do? Well, I worked on segmentation since my doctoral thesis. In fact, in my doctoral thesis, it was about...

How to do marketing to decrease consumption, not that it was like for people in France during the time of the oil embargo to consume less energy, and for that I found that there were segments that had nothing to do with income and that had to do with lifestyles, which was something that had already been studied about 10 years before, and you said this must also happen in Peru, this must necessarily happen in Peru because the concept of socioeconomic levels is a concept to start with that is not used much in the world, right? I mean, in the United States they don't talk to you about ABCD, in the United States they talk to you about African American, about WASP, and in France they talk to you about, I don't know, agricultural worker, industrial worker, but there is no concept of ABCD. I used to say, and Latin America needs something almost because of the formation of new societies that I had been studying since before. In fact, at one point, even my students called me Professor Chicha because in those times when Chicha was not so, let's say, it wasn't necessarily a nice word, and they called me Chicha, but also because they appreciated me because I talked a lot about Chicha culture that was appearing at that time. So I believed that we needed a theory to explain Latin American markets, and that theory, well, we looked for it and found it in the first study of lifestyles from those times, which was the origin of the company. Later, we have done that study in several Latin American countries, etc. A book that is not here is called, it's a book called "12 Myths About Latin America," not "12 Myths About a Region Without a Name," it's called Latin America. So there we founded the company by doing this study. It's a company that is born from research, and then to be able to sustain itself, we did consulting work that fortunately has been growing and we have expanded, and well, and there we are.

I want to return to the topic of business, but talking about your books, which I also want to delve into. Today, how many have you written? Mine, let's say, in just a couple of cases with someone who helps me, 24. I have different books, and of course, with the company, we have eight more, something like that. Books from the company. Do you have a favorite? The last one is always the favorite, right? The last one is always the favorite, but no, it's not among the best-selling ones. Well, "Lifestyles" is a book that sold many, many thousands of copies, not just official copies, but also because there were many university students who came and had me autograph photocopies. Then "City of Kings, of the Chávez, of the Quispes," which is a book that describes all the migrations and the formation of the new City of Lima, is another important book for me. I have books that are strictly academic books, like "Marketing Manual for Latin America" and "Consumer Behavior for Latin America," which are books edited by McGraw-Hill and other publishers. And the last one I have, which is something new and different for me, is a novel, but it's a historical novel showing the development of Peru and how the mestizaje that exists now came about and is found in the peripheries of the cities. Which was the most difficult to write? All are difficult. Well, the first one is always difficult, and the last one, which is a novel, is also difficult for me because I have written a lot of essays, but giving it the form of a novel is different. And going through the history of Peru and interviewing Pizarro and then talking with La Perricholi and a series of Peruvian characters, who, seen from a completely different perspective than what they always show us, is more laborious, but beautiful.

And regarding your books, do you think there is any about which you have changed your opinion over time? You started the first one almost 28 years ago. Is there one where perhaps a work experience or because the world has changed, perhaps you would say your opinion has changed about what you wrote in that book? The truth, the truth, the truth is not that I say, "Oh, now I wouldn't say what I said back then." I believe, but yes, they are things that have been built one on top of another. The world has been changing, and "City of Kings, of the Chávez, of the Quispes," which was written 20 years ago, is completely different today, but the book was valid in its time, and I don't have anything that I really regret or say, "How bad that I did it." No, no. And which do you consider to be the most relevant for an entrepreneur, given that this program is related to business and entrepreneurship? Well, I think it depends on how you see it. There is a textbook, a book you should read, which is, I don't know, "Marketing: Latin America Focus," because it teaches you all the 4 Ps and everything else from our perspective, not the gringo perspective. It doesn't talk about McDonald's in Seattle, and it will talk about the sales of, I don't know, ceviche in some places, etc., and these types of things, or about the small shops, or the "tambos," or the "tianguis," and not just the large shopping centers. That would be, I think, a relevant one. And then I really like my "Bueno, Bonito y Barato" collection, because it's a collection that, like this conversation we're having now, which I find very, very interesting. Thank you for your questions, Diego. It has a series of ideas and comments on various facets of our society, our companies, our commerce, and that each of those readings, in the end, is a different lesson. In fact, they are the result of 20 years that I have been a columnist in "El Comercio" and in some other media.

Returning to the topic of your side as an entrepreneur, what have you learned about how to sell your services, your knowledge? Obviously, all the titles, the books that you have also written over time have helped to sell more, but in terms of giving value to someone who is listening, who has knowledge, whether it's in marketing or another topic, about how to present yourself and try to communicate the value you can offer to a business, what have you learned? Well, for a long time, I have been quite shy about showing what we do as a company. So, during the time I directly managed the company, because now my son, Dr. Rolando Arellano, directs it with manager Héctor Guerra García, I have been very shy about showing my products. I have been, quote-unquote, a bad salesperson, but a good marketer, of course. I think I've done good marketing because I've done much more pull than push, right? I've done more so that people come, inbound, as we would say today, inbound, more than outbound, right? So clients have come to us a lot because of what they saw, because of what we did, etc., and I have neglected the side of showing what we are a lot. So, for example, for a long time, and I think it's still the case, many people think that perhaps the company is Rolando Arellano and some assistants, and in reality, we are a company of 150-200 people. In some countries, we have loyalty areas and pricing areas, and I haven't shown those things. And I think that's something that hasn't been a mistake because it's been my preference, it's what I wanted to do, but I do think it's necessary for people to know us a little more, or for people to know the company a little more, beyond Rolando.

Speaking of the company and the work the company has done, what was the, you mentioned obviously this first research that led to the book on lifestyles, and it was a challenging job. What other cases you have worked on with companies or organizations have been challenging? Are there projects you remember that perhaps in this conversation we can extract some learnings? Well, of course, if we talk about the old ones, the first ones, of course, "Lifestyles," well, the case of Megaplaza, which later gave us the opportunity to create many, to help create many shopping centers in the rest of the country. A challenge was to create, to help create the shopping center in Juliaca, for example. Juliaca is a commercial center in the south of Peru, on the border with Bolivia, which is a commercial town, but very much so. And putting a formal shopping center there was competing with almost the entire society that lived there, but we were able to help design something that became an object appreciated by the people there. What was the key differentiation, in line with what we discussed at the beginning of the conversation? Yes, it was differentiation, but among other things, it was integration with society, meaning bringing in merchants from those Juliaca merchants, Juliaca natives, and putting them inside the shopping center as well, so as not to just bring imported things, etc., but to make them part of it. Another iconic case for me from the beginnings is having helped develop what is now the essential brand for Alicorp, even from before it was Alicorp, which is a Peruvian food company that exports and sells a lot. To make the first mayonnaise with a Peruvian national flavor, because people consumed a lot of external mayonnaise. So the executives of Alicorp from that time, which wasn't even called that, later took that name, asked us, and we worked together, we always work with them or with our clients, hand in hand, to develop a product that would respond truly to the needs and tastes of the national market.

Tell me about that process. We are talking about the mayonnaise. The mayonnaise for the table? Yes, we are talking about this mayonnaise with lemon, with a touch of lemon. Of course. What happens is that this company wanted to grow. It had inputs, it sold fats, oils, flours, etc., and it wanted to see what other options it had. And as I say, collaborating with the executives of that time, we are talking about 96, 97, probably, I don't remember well, because it took a while for the product to come out, about 2 years, I think, but due to a brand problem they had. The idea was, how do we generate products from that? And what was found in the analyses was that one of the things people used oil for a lot, besides frying and simple things, was to make their own mayonnaise. Why? Why did they make their own mayonnaise and not buy it? There was a price issue, but the truth is that when you make it, the inputs weren't that much cheaper than buying that mayonnaise that the North American brands, Hellmann's and others, had. And we found that what people didn't buy was because the brand, the North American mayonnaise, was made for the taste of North Americans, which is indeed one with a less intense flavor and made for spreading, for putting on a hamburger, and those things. And people here used it to put on fried fish, or to eat it with, I don't know, on top of noodles sometimes, so more light and with a stronger flavor. So we had to find the best cooks among those recognized as the best cooks among their peers, ask them to make mayonnaise for us, find out with them what was preferred. And there are many ways to cut the mayonnaise, what the ladies call "cutting," which is some put pepper, others put chili, others put vinegar, but many put lemon. That brief final flavor. We ended up doing tests. I remember our first location there in Miraflores, we had a lady frying potatoes and having them taste-tested in meetings so that they would be eaten as they are eaten, which is hot. And in the end, a product was created that our clients perfected, without a doubt. They did a lot of work, and it was a phenomenon because it tripled the consumption of mayonnaise, in addition to taking market share from the packaged mayonnaise that was there. But deep down, I like that a lot, why? Because it's a clear example of marketing, which is responding to people's needs. That is, it's not bringing what you think is marketing for the gringos. They developed it for the gringo taste. If you want to do it, you have to do marketing, and if you want to do marketing in Mexico or Venezuela or Peru, you have to think about your customers' taste. And that was a very, very beautiful experience, and one of the first ones we did. Later, we have had the luck to develop hotels and a lot of work in the real estate sector, changing perceptions, for example, about what people are looking for. The classic, for example, at the beginning, when we went to develop popular housing real estate, it was "we have to put a pool to make it more attractive." And yes, but the pool is something that has an appeal for a certain type of person. For others, it's having stagnant water near the house. So it's more important to have their grotto with the little Virgin, and not forget that the parking spaces have to be some wider so that my van can enter, not my car. So those types of things are things that have given me a lot, personally, they have given me a lot of pleasure.

What would you have liked to know at the beginning of your business? You already mentioned that you grew more than anything through inbound, that people came to you, and perhaps it would have been a little better to also sell a bit more, to go out a bit more, to sell outbound. What else, in terms of other people listening to us, who again see their services, perhaps have communication or marketing agencies, what? Well, if you ask me what I would have liked to know, well, everything, I mean, and the answer is everything, because everything is a continuous learning process, and we are learning and learning and learning every day, and not only because we don't know, but because the world changes. So, you ask me, probably the Arellano of today is not at all the one from 28 years ago, except, I think, the essence, which is respect for the client as a guide for us, and the application of that respect and the increase of well-being to make the country grow. Now, one thing that I do like, and that I am not proud of many things, I think many more things can be done, but one thing that gives me a lot of pleasure is that around the year 2000, with a group of friends, we got together and created the Peruvian Marketing Society, which was at the beginning, it was, "Hey, let's help develop it, work so that the discipline grows." In fact, we had an oath, we said, "We are going to work to develop companies and develop the country, to do marketing well done." And it has given me a lot of pleasure that 20 years later, the Peruvian Marketing Society is very strong, growing, and I think it generates pride for those of us who have that profession. Moving forward, if I were to put you as a predictor of the future, what do you think will change? You mentioned in this conversation the topic of ChatGPT, we've talked a bit about this connectivity that the internet gives us, social networks. You've already been through many years in this industry, decades. You've seen how there are trends that come and go and are pure smoke versus other things that perhaps change life for everyone in many ways. Moving forward, do you have any prediction for the next, who knows, 10, 20, 30 years? Yes, look, when I started, surveys were done by hand, and they were counted with crosses, and we had boxes and boxes of things, and then came computers and everything came, and now comes chat. The truth is, technology doesn't scare me, and we have always used the latest technology. So, from that perspective, it doesn't scare me. What I do believe is that in the future, it will continue to change, and the power of consumers will continue to grow, and the stronger consumers are, the more marketing you have to do. That is, you have to pay much more attention to them, because they will have more and more power. And today, until recently, they had power because they were very numerous, and there was always more competition, but today, for example, with the internet and all these things, not only are they very numerous, but they have the ability to express themselves all and express themselves a lot. So I think the need for marketing will be much greater, it will grow exponentially because you will have more powerful clients. Today, already, I mean, here in Peru, we can already order from Amazon, and it arrives in a week. As you say, someone can post a comment, and we already see cases of, "I had this bad experience with this bank, with this insurance company, with this restaurant. Look, I found this in my plate," and it goes viral. Of course, and the bank that was previously calm because, well, it had competition, the other 20 banks in the country, today it has 200 competitors that come through fintech and start attacking you. So competition becomes stronger. Stronger competition, more informed clients, means much more consumer power, and much more, that is, the only way to really succeed or continue to be successful in the long term is by doing more marketing, by focusing more on the market.

Rolando, I've loved this conversation, truly. It's been a pleasure. I've enjoyed it immensely. I want to finish with a quick dynamic that we usually do here on the podcast. Several quick questions. The first thing that comes to your mind when you think of the word successful? Who is the first person that comes to your mind? My wife. Is there something that you believe is true that others would say you're crazy for believing? That optimism is the basis of growth. What business opportunities do you see in general that you would recommend to a friend or family member? Anything that looks at the vast majority. What software tool do you use in your day-to-day life to manage your business or life? A lot, Word. Writing, writing a lot, Word. And there are people who don't know all the applications that are behind it. If you could have a coffee or beer with any historical person, who would it be? I think Leonardo da Vinci, that super complete inventor, artist, etc. What would you ask him? How does he do it? Simply that. A bad recommendation that you usually hear others give? The most important thing is the first impression. Perceptions can change. Yes, I believe the first impression doesn't count. What matters is that the subsequent ones are good. The first one, you can be wrong. What matters is that the subsequent ones are good. I like that. If you could only do two hours of work a week, what would you do in those two hours? Perhaps thinking about when you were in your prime, more involved in work? Write, write my ideas, write them well. If you had to have another profession, what would it be? Doctor? No, no, no, no, not at all. No, no, no, I can't think of anything else, honestly. It shows that you are passionate about what you do. Best purchase under $100 or less? Anything that makes your children happy. A panel on the street that the whole city could see, what would you write today? Vote well, that's necessary. What new habit from the last couple of years has helped you the most? I'm starting to learn to rest. Any tip on how to do it better? Do activities that don't allow you to think too much about these productive things. I ride my bike, for example. I ride mountain bikes, things that demand all your concentration. The book you've recommended the most? I ask you for two. I ask you for one of yours and one that isn't yours. Well, mine, actually, I think the most recommended has been "Lifestyles," the one that most people have read. Well, "Bueno y Barato," you mentioned that for any marketer, as we will also add it in the chapter description so people can find them. Today I recommend reading "El Tesoro," because it's more aimed at young people. Yes, and there are so many good books that I honestly can't say I could recommend just one. I read it. People, read. Read, because by reading, they will learn something that is being lost, which is talking and writing. The movie you've recommended the most? It's not the one I've recommended the most, but the one I've liked the most of all movies, without a doubt, is "The Godfather." "The Godfather One" was a flash. And the last one? What has been the best investment you have made? It could be time, energy, money. Getting married. I've been with my wife, my girlfriend, for almost 50 years, and I believe that without her, I wouldn't have been able to do half of what I've done. What is the key to reaching those 50 years? The key is like marketing. Marketing is love. It's caring more about other people than about yourself. And that's in couples and in companies. Care more about the other than about yourself, and you'll see things will go well. Rolando, I couldn't have thought of a better way to end this conversation. Thank you very much for your time. Thank you very much, Diego.