How to internationalize a traditional Portuguese style

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Distance in International Business: Concept, Cost and Value How to Internationalize a Traditional Portuguese-Style Food – Liability or Asset of Portugueseness? Susana Costa e Silva, Maria Elo,

Article information: To cite this document: Susana Costa e Silva, Maria Elo, "How to Internationalize a Traditional Portuguese-Style Food – Liability or Asset of Portugueseness?" In Distance in International Business: Concept, Cost and Value. Published online: 30 Nov 2017; 425-442. Permanent link to this document: https://doi.org/10.1108/S1745-886220170000012007 Downloaded on: 11 December 2017, At: 06:50 (PT) References: this document contains references to 0 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 2 times since 2017*

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CHAPTER 18 HOW TO INTERNATIONALIZE A TRADITIONAL PORTUGUESE-STYLE FOOD – LIABILITY OR ASSET OF PORTUGUESENESS? Susana Costa e Silva and Maria Elo

ABSTRACT In an increasingly competitive global market, firms try to conquer a special place in customers’ minds and – when possible – in their hearts and spirits in order to succeed. Hence, through a competitive strategy based on differentiation, companies tend to focus their efforts in creating the right value proposition for consumers. They also establish upstream and/ or downstream partnerships based on win–win relationships for the parties that constitute their value chain. The particular characteristics of ethnic products influence these strategies and the brand crossover. How can the ethnic-national identity of a product be employed successfully – regarding its liabilities and assets – in international sales? This case study1 focuses on Nata Pura, a rather young Portuguese firm that has built its internationalization strategy based on exporting a traditional product pastel de nata using innovative solutions, which include the development of partnerships Distance in International Business: Concept, Cost and Value Progress in International Business Research, Volume 12, 425–442 Copyright © 2018 by Emerald Publishing Limited All rights of reproduction in any form reserved ISSN: 1745-8862/doi:10.1108/S1745-886220170000012007

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to produce and promote this as an organic pastry made with high-qualityadapted ingredients. Earlier, the traditional product was mainly sold and distributed within Portuguese Diaspora. Nata Pura company markets and distributes the re-invented product, originally a traditional Portuguese food product, and bridges cultural and administrative distances by combining the traditional with global tendencies and tastes. Keywords: Case study; differentiation; internationalization; international market selection; adaptation; marketing mix; Portugal; pastel de nata; Nata Pura

INTRODUCTION In January 2012, during a press conference regarding the internationalization of the Portuguese economy, the minister of economy and employment Álvaro Santos Pereira stressed the fact that despite its success, heretofore there hadn’t been any entrepreneur – Portuguese or foreigner – willing to promote and commercialize one of the most famous products in Portugal: the pastel de nata (TSF, 2012). At the time, this statement hit the headlines of newspapers, but many tended to welcome it with disregard, because there were already several companies exporting this product to different host markets around the globe. Nevertheless, none of them was promoting pastel de nata as a Portuguese delicacy, but rather as a non-branded staple. Although not in line with the incentive of the minister, more than one year later, in May 2013, Mabílio de Albuquerque and his partner Gonçalo Albuquerque decided to join efforts and search for traditional Portuguese agri-business products that could be accepted by consumers worldwide and be exported, respectively. Originally, they considered three distinct products: olive oil, wine, and pastel de nata. However, the first two items were already well established in the market and dominated by major players, which created strong barriers of entry to newcomers and increased the chances of failure. Hence, the two entrepreneurs opted to spread their chances of entering foreign markets with a product that they thought to be less difficult to introduce, due to its uniqueness as a Portuguese delicacy, good quality, and tradition. They also stressed that regarding pastel de nata it could also be fully controlled in terms of production quality. However, is an ethnic product strategy viable for internationalization, isn’t it facing particular liabilities of foreignness? How could the firm employ the ethnic-national identity of the


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product reducing its liabilities as a foreign product and increasing its assets as a recognized delicacy in international sales? Bridging the distance in taste and demand in distant markets positively requires a strategic fit and cultural asset employment following the idea of semantic fit in strategy in the case of Walt Disney Company’s internationalization (Brannen, 2004). In this case, the delicacy offered them the opportunity to tell a story, which combined with a strong tradition in the country of origin – Portugal – could allow the two partners to differentiate Nata Pura from their competitors, following a business strategy based on differentiation, rather than on costs Palavras, H. de. (2014, July). Nata Pura com personalidade. Pontos de Vista, 57. In fact, according to Nata Pura’s CMO, Nuno Costa, it seems that “clients, especially end consumers, like to know that there is a story behind the product.” The CEO of Nata Pura, Mabílio de Albuquerque, considered that differentiation (from other suppliers) was an extremely relevant part of the internationalization process, because it added credibility and sustainability not only to the product but also to the business, especially when competing in foreign markets. Furthermore, the firm regarded branding and promotion as being very important to achieve the right kind of differentiation and the correct positioning that was still missing concerning the other pastel de nata in international markets. While the origin of the food product (country of origin) can represent a liability of foreignness for consumers, it may particularly be so in the minds of the gatekeepers to new foreign markets and increase entry difficulties (Knight, Holdsworth, & Mather, 2007). With this Portuguese custard tart, the firm Nata Pura attempts to develop a contemporary and dynamic wise-activated brand, turning it into a global concept of delight with Portuguese origin that may crossover to mainstream markets abroad. Simultaneously, the brand was designed to be adopted and recognized in any part of the world, permitting it to be used in distinct situations, not only in terms of marketing but also considering its concept as a global product-ethnic delicacy (Palavras, 2014).

THEORETICAL VIEWS ON DISTANCE AND FOREIGNNESS Distance and otherness remain central problems in internationalization. There are several concepts of distance between foreign and indigenous firms from linking information asymmetry to aspects of foreignness as a taste. “The psychic distance is defined as the sum of factors preventing the flow of information from and to the market” (Johanson & Vahlne, 1977, p. 24). It is


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constituted by aspects like language, education, business practices, culture, and industrial development. The concept of liability of foreignness can be credited to Hymer (1976) who claimed that there are unavoidable costs faced by foreign firms when operating in a different environment than their home market. International market selection is frequently linked with the liability of foreignness due to the costs associated with the acquisition of market knowledge and the respective hazards. Later, the concept of liability of foreignness was complemented with a new view on deficiency: the liability of outsidership. This extended concept on entry problems as well as the liability of outsidership illustrate the significance of the establishment of a network that involves different actors like suppliers, customers, and stakeholders, which places foreign entrant firms in a competitive disadvantage relative to incumbent firms enjoying stronger ties with relevant players in the host market (Gallego & Casillas, 2014; Johanson & Vahlne, 2003, 2006, 2009; Muzychenko & Liesch, 2015; Zaheer, 2002). The Uppsala model (e.g., Johanson & Vahlne, 1977) for market entry proposed an entry order starting with exports via an agent, followed by established sales subsidiary and later in some cases by beginning production, as exporters attempt to reduce psychic distance between home and host countries. Accordingly, we can claim that the existence of stronger and larger business networks may contribute to firms’ establishment of important relationships in foreign markets, which apparently can help the companies to diminish the costs of doing business abroad (i.e., liability of foreignness), as well as those associated with being considered outsiders (i.e., liability of outsidership; Johanson & Vahlne, 2009; Muzychenko & Liesch, 2015). In addition, other scholars have pointed out that the distance or liability of foreignness may influence the business positively and constitute an asset (cf. Brannen, 2004; Nachum, 2010). Brannen (2004) illustrates how foreignness can facilitate the international marketing process of a product or concept in a foreign market entry. Market-based resources are central in generating assets, such as classic firm-specific advantages, and may enable overcoming liability of foreignness (LOF) (Barnard, 2010). Thus, there are two dynamics to consider in ethnic-national product entry: (1) how the liability of foreignness is diminished to enable local acceptance and (2) how the assets of foreignness are created for a product’s differentiation strategy that may leverage the foreignness positively. In marketing and advertising literature, the promotion of branded products toward ethnically diverse target groups is referred to as “brand crossover” (Puzakova, Kwak, & Bell, 2015), which implies that a certain degree of ethnic-national character is employed in international marketing across



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distant markets. In brand crossover, the role of the product itself may play an instrumental role in satisfying customers and creating value for them (e.g., Fang, Palmatier, & Evans, 2008), potentially due to its ethnic features (Chaudhry & Crick, 2004) or those of the customers (Dimofte, Johansson, & Bagozzi, 2010). As the research literature on international distribution underlines, there is a network of actors involved in international marketing and international diffusion of a product but also shaping its value proposal (cf. Grier et al., 2006). The integration of this actor network into the strategic planning may reduce the business distance in multiple ways; it may reduce the meaning of geographical distance by developing manufacturing and logistics solutions together to serve the distant markets better; it may decrease the uncertainty and perceived liabilities of foreignness by building strong working relations with channel partners; and finally, the market-specific knowledge of this network may be crucial in generating the right product adaptation mix that makes the foreignness into an asset. The constellation of the international strategy and the product’s value proposal may obtain advantages from cooperation with experts, for example, for the acceptance of a correct dosage needed for local consumption. Such adaptation in terms of the international marketing-mix program (Walters, 1986) does not have to relate to the ethnic value of the product. Still, it can balance the differences between the traditional national style and needs of the target markets. Thus, incremental innovation on various aspects of the marketing-mix aligned with international market preferences may contribute to higher acceptance while protecting the authenticity of the product, such as recipe in this case. A modular type of product strategy that allows the core to remain authentic but anticipates local purchasing preferences in other product characteristics may enable the assets of foreignness to be employed while reducing the respective liabilities.

METHODOLOGICAL APPROACH Case Study This is a qualitative single case study. It employs ethnographic and qualitative methods on a complex real-life phenomenon with ethnic-cultural dimensions (Alasuutari, 1995; Ghauri & Grønhaug, 2005; Stake, 1995). Because ethnic liabilities and assets related to a product and its diffusion and distribution are less known, a case study approach can be particularly useful


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(cf. Dana & Dana, 2005; Eisenhardt, 1989). The study follows an explorative and descriptive strategy. Its purpose is to further develop international marketing and product theory on ethnic products in an interchanging dataand theory-driven reflection without rigid hypotheses, instead by interpreting the findings in our theorizing and discussion using a more progressive focus (cf. Piekkari et al., 2010; Sinkovics & Alfoldi, 2012). The case selection has been purposeful focusing on a traditional flagship-ethnic product representing a critical case for Portugal. The data collection builds strongly on primary sources, such as in-depth interviews, observations, and company documents. In addition, other data such as photographic materials, reports, newspaper articles, and marketing material are collected and analyzed. The data are compared and content analyzed in reflection to the ethnic nature of the product’s Portugueseness and its implications and meanings in the international marketing context. Mr. Mabílio Albuquerque and Mr. Nuno Costa, respectively, the CEO and the CMO of Nata Pura, are primary information sources. This primary data, the secondary data obtained in public presentations made by the company, as well as their public reports are used. A representative of Portugal Foods, a private organization that assists firms willing to further develop their international operations in the agri-business sector, Ms. Ondina Afonso, was also interviewed for the catalyst role played by this actor in the internationalization process of the firm. Interviews took place between December 2015 and March 2016. The data collection is summarized in Table 1.

THE CASE OF NATA PURA Pastel de Nata: The Story Behind the Product Pastel de nata is a Portuguese traditional pastry that can assume different names around the world, such as egg tarts, custard tarts, cream custards, or even Portuguese-style cakes – the latter is the name adopted by McDonald’s (Pinto, 2015). According to The Guardian (Fox, 2009), pastel de nata was considered one of the best foods in the world (ranked at number 15, among 50); it suggests that these “creamy, flaky custard tarts – served with cinnamon – are one of Portugal’s great culinary gifts to the world” (Fox, 2009). The historical origin of this pastry cannot be traced with accuracy; it is assumed that pastel de nata was originally produced in the 18th century by Jerónimos’ monks, who lived in a monastery located in Belém – currently

In-depth, recorded and transcribed interviews with Mr. Albuquerque and Mr. Costa, in Porto/Portugal, and with Ms. Ondina Afonso in Maia/Portugal in 2016, non-recorded interviews with consumers of “pastel de nata” and mainstream customers in various contexts, photos, observations

Primary

http://www.natapura.biz/ http://www.theguardian.com/ http://www.portugalfoods.org/ http://www.natapura.com/ lifeandstyle/2009/sep/13/bestcatalogo/files/assets/common/ https://twitter.com/nata_pura foods-in-the-world, accessed on downloads/page0130.pdf, https://www.facebook.com/ March 17, 2016 accessed on March 23, 2016 natapura/ http://www.agroportal.pt/x/ http://www.portugalfoods.org/ http://www.logisticaetransporteshoje. agronoticias/2005/11/23.htm and catalogo/files/assets/common/ com/sobre/nata-pura/ http://www.dinheirovivo. downloads/page0131.pdf, http://www.natapura.biz/blogpt/buzz/ementa-do-mccafeaccessed on March 23, 2016 detail9.html completamente-renovada/, http://www.portugalventures. All retrieved on March 22, 2016. accessed on March 17, 2016 pt/pt-pt/article/portugalhttp://www.portugaldailyview. ventures-anuncia-investimentocom/whats-new/pasteis-de-natana-nata-pura-no-%C3%A2mbitoportuguese-pastry-around-thedo-programa-inova%C3%A7%C3 world, accessed on March 22, 2016 %A3o-ind%C3%BAstria, http://www.portugaldailyview. accessed on April 14, 2016 com/whats-new/pasteis-de-nataportuguese-pastry-around-theworld, accessed on March 22, 2016 http://www.natapura.biz/blog-detail12. html, accessed on May 5, 2016 https://wilkes888.wordpress. com/2013/04/25/london-coffeefestival-2013-50-pics/londoncoffee-festival-2013-tasty-natafrom-nata-pura/, accessed on May 5, 2016 http://www.mytaste.co.uk/s/bbc-goodfood-custard-slice-recipe.html, accessed on May 5, 2016

Secondary

Table 1. Data Collected in the Interviews.


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part of Lisbon, but at the time considered an independent village. Over the years, many people have tasted this cake not only in Portugal but also in other countries where the Portuguese diaspora has taken it, most of the times, combined with an espresso, which is the traditional way of consuming this product in Portugal. In Portugal, the espresso, a small shot of caffeine that most of the Portuguese consume several times a day – 80% of the Portuguese population drinks coffee on an everyday basis (RTP, 2015) – is bundled with a pastel de nata. Interestingly, this tradition has already been imitated and incorporated by McDonald’s, which has created a specific menu for Portugal that includes a coffee mingled with the pastel de nata (Brito, 2011). This shows how McDonald’s has adapted its product range to meet the needs of the Portuguese market. In Portugal, it tends to be mandatory to always have these sweet custard tarts available in any bakery, pastry, or coffee shop. This stresses the idea that more than popular, pastel de nata is considered an ethnic cultural tradition of consumers in its country of origin. One of the most well-known pastries selling pastel de nata is located in Lisbon and has branded this cake as Pastel de Belém. This shop is considered by many as the birthplace of this custard tart, and it also contains the story that its founder bought the original secret recipe from the Jerónimos’ monks in 1837. Currently, the shop is owned by the descendants of the person who has purchased the formula in the 19th century. It is the only one that, until 2013, had branded this product, trying to convince consumers that other coffee shops, bakeries, and pastries simply sell copies of the original cake, no-name products of little authenticity. The positioning of that brand in Portugal allowed the firm to benefit from an excellent reputation that permits it to charge a premium price for the product and at the same time have customers queuing for hours just to buy the traditional cakes. Consequently, Pastel de Belém attracts people from different parts of the world – tourists visiting Lisbon – as well as locals. Regarding the international markets (Garcia, 2012) from London to Los Angeles, through Paris and Berlin, there are many places where one can find pastel de nata; since, for decades, Portuguese have been selling this product abroad, especially in shops located in the vicinity of the Portuguese Diaspora. In light of the aforementioned facts, it was indeed pertinent to think that pastel de nata could go further than just playing a small role in small businesses as an exquisite tart. It was a challenge to establish a branded product with ethnic-national heritage. Other firms selling it were not employing branding strategies or developing the marketing mix. In 2013, Nata Pura decided to pursuit novel branding and embrace more innovative international marketing.



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Additionally, the company was able to verify that this delight was becoming popular not only among Diasporas suggesting potential for an ethnic cross-over. When looking at the percentage of Portuguese buying pastel de nata at Kensal Town, London, the proportion of Portuguese buyers has been decreasing over time and substituted by foreigners (70% of the buyers are not Portuguese). Similarly, the increasing number of recommendations posted on TripAdvisor, it becomes visible that pastel de nata is no longer just a delicacy that Portuguese living abroad like to purchase in order to experience something from their home country. In fact, it seems that pastel de nata is definitely conquering the delicacy market in foreign markets. This is illustrated by the current consumption trends in cities like New York, Paris, and São Paulo (in the latter it is also possible to find shops fully devoted to this pastry). Nata Pura: Paving the Road to International Expansion Nata Pura is a rather young company founded in 2013, which has currently five people working in international sales management, design, marketing, and communication. Since day one, the firm wanted to have a project based on exports that was also driven by the desire of having a product that could be an international sales champion, built on a clean label. Hence, Nata Pura started developing a business on the basis of an organic product, made with high-quality ingredients, combining a three-centuries-old traditional product in its home country, with an innovation in marketing abroad. The firm currently sells the pastel de nata made with high-quality ingredients in a business model characterized by upstream and downstream partnerships, as the authors will describe next. According to Nata Pura’s CEO, Mabílio de Albuquerque, the entry barriers to this market can be considered low, especially after getting experience in this business, which was not, however, this case. Having obtained the experience in the production of pastel de nata, Nata Pura realized that with little incremental costs, it was possible to serve different markets using distinct channels: indie coffee shops, coffee chains, catering services, department stores (gourmet), restaurants, hotels, and supermarkets (Nata Pura, 2016), regardless of their location, independently from the geographical distance to Portugal. In the road to the achievement of testing the concept, the product, and the brand in foreign markets, Nata Pura decided to attend events in several places, starting by the Waldorf Hilton Hotel in London, the Portuguese consulate in Seville, as well as other Portuguese consulates in the Middle Eastern markets,


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such as the United Arabs Emirates. The result of these events was extremely positive for the firm which was able to get constructive and encouraging feedbacks that helped to define Nata Pura’s strategy, placing the project in a more focused and effective path. In one of these events, Nata Pura was also able to meet and establish a fruitful relationship with AICEP Portugal Global (a Trade and Investment governmental agency, created in 2007, focused in encouraging the best foreign companies to invest in Portugal and contribute to the success of Portuguese companies abroad in their internationalization processes or export activities.),2 which offered the company full support, provided by a team of experts in the international business and marketing arenas (Palavras, 2014). Nata Pura considers itself as a marketing firm that sells a product using a differentiation approach, focused on quality, texture, color, and lightness, which are the result of producing pastel de nata only with fresh and highquality organic ingredients. Therefore, to reach distant host markets, Nata Pura’s internationalization process is based on finding the right partners with whom it can develop a win–win relationship, where the firm provides not only the product and the brand but also all the marketing tools necessary to penetrate the market and engage consumers into a long-lasting relationship. This way the firm believes to be able to address administrative distance and the foreignness of the product positively. At the same time, the firm increases its sales and helps its partners to achieve customer loyalty through customized communication that can go from ads to social media, through an appealing packaging, as well as the promotion of events (Nata Pura, 2016). At the moment, the firm has already conquered markets across the European Union and beyond, in Saudi Arabia, and the United Arab Emirates – in the latter it opened a kiosk at the Barsha Mall, Dubai. Using the same strategy employing the Portuguese tradition and the high organic quality, the firm is currently serving also very distant markets, such as South Korea. Thus, it has been able to overcome distance and related liabilities and to benefit from the distinct ethnic speciality character of the product. Australia and New Zealand are targeted during 2016, along with other European markets, for example, the Nordic countries. Regarding the European market, Nata Pura established a partnership with a reference partner in the United Kingdom. These local partnerships allow the firm to access foreign markets, retrieve information about them, and obtain local acceptance (Nata Pura, 2016, cf. Rana & Elo, 2016). This has been, in fact, the modus operandi that the firm found to be effective in the international market selection process: Nata Pura establishes partnerships with local actors met in trade fairs that guide the firm to its next markets. By doing so, the firm mainly follows a relational approach on international market selection and an opportunistic approach



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exploring opportunities to which the firm is exposed that lead the process instead of having a systematic way of pre-defined strategies. This network-based, rather organic way of approaching the foreign markets assists the firm to build on the value creation of its products that is emerging from a more emic perspective. Adaptation Versus Standardization: The Path that Nata Pura Follows Product Policy The company intentionally chose differentiation over price strategy. Following the guidelines that resulted from Nata Pura’s research and development activities, the product is produced only with high-quality ingredients, such as real eggs, fresh milk, and sugar cane – avoiding the use of high-fructose corn syrup (HFCS) which is considered to be related to health problems like diabetes. Nata Pura is concerned about food safety and the key role played by certifications, which in the food industry can be considered by end consumers as more relevant than the brand per se. Thus, the company needed to search for a manufacturer that would be able to comply with certifications like the standardization of quality, safety, operational criteria, and legal obligations (i.e., BRC Global Standards is a leading brand and consumer protection organisation, used by over 25,000 certificated suppliers over 130 countries, with certification issued through a global network of accredited certification bodies. (in https://www.brcglobalstandards.com/) – Grade A), International Featured Standards (IFS) and Halal – an extremely important certificate for Muslim communities. Moreover, due to the relevance of the Jewish community in some of the countries where Nata Pura is present, the company is now aiming to get the Kosher certification. Genuine and certified quality is essential in order to reach certain markets and partners like Harrods. Also some events require that to be eligible to participate. Nata Pura is aware of the relevance and need of having internationally recognized certifications. At the same time, the certifications seem to help the company to differentiate its products from others in the market while establishing its own standards for the quality of its pastel de nata. The externalized production of Nata Pura guarantees manufactured according to the firm’s instructions, under strict rules in terms of ingredients and specific certification standards. The firm was awarded with two of the three stars granted by the Great Taste Awards in 2015. As part of the differentiation strategy, Nata Pura tries to adapt the product to the tastes of consumers in diverse distant markets. After attending some trade shows and processing all the information retrieved from the interaction with potential partners, clients, and other stakeholders, the firm realized that


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in order for its pastel de nata to thrive in the international market, Nata Pura would have to show the superior quality of the product. This could be done by the use of high-quality ingredients, such as margarine (or butter, as the team subsequently learned to be almost mandatory when producing for the French market), leaving behind the use of powder eggs, powder milk, trans fats, and HFCS. Thus, the incremental innovations used in the production of pastel de nata enabled Nata Pura to excel and to define its differentiation strategy in marketing communication addressing local preferences. It also called the attention of trade visitors who tasted the product during international food events and exhibitions. This openness to innovation is relevant for the product per se, but also for the markets where the company is present and for the target markets. The firms follow the rule: “be where the market requests us to be,” as said by Nuno Costa, Nata Pura’s CMO. This mindset enabled in 2013 that in the world’s most important food exhibition, ANUGA Food-Fair in Cologne Germany, the firm got acquainted with a Japanese chef who was delighted with the brand and product of pastel de nata. The chef was so enthusiastic about this delicacy that he requested some product adaptation to Japan in order for the tart to be included in Japanese restaurant Yosushi menus. This was the seed for the development and production of pastel de nata with green tea flavor (being added to the inner part of the pastry), which resulted in a new creation that was successfully introduced in other south eastern markets, like South Korea, where the brand can currently be found in 79 shops. In this specific case, the firm not only adapted the product to the market, as it also changed its entry-mode choice, which resulted in a full conjoint partnership with the local associate. Furthermore, in this entry process it was not the firm that selected the market but it was the partner who developed the entry in the host country with Nata Pura’s new products. The firm employed a relational approach to its international market selection. In terms of product adaptation, it is also important to stress the fact that instead of the determined attitude revealed by some players about not changing the traditional recipe of pastel de nata, the company decided to introduce some changes and capitalize on a modification that seems to be effective and fruitful for all parties involved in particular new markets. In fact, the CEO of the firm stated that: “we know about the product, but they know about the market. Thus we have to rely on their knowledge of the local preferences and if the market requests a green tea and a passion fruit pastel de nata, that is what we are going to develop.” According to Nuno Costa, CMO, adaptation pays off when it is technically viable. Hence, after considering the knowledge of the market of the selected partners, it can be transformed in a win–win



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situation with appealing outcomes for both parties. Thus, as the CEO Mabílio Albuquerque commented, apart from having the original formula, Nata Pura also produces other flavors, such as chocolate, passion fruit, green tea, and wild berries, and although the latter may “definitively not be successful in Portugal,” the CEO argues that this is not one of the target markets, mainly due to the fact that only 0.5 million people will be willing to purchase these products. Consequently, Nata Pura focuses its attention and efforts on more attractive markets like the United Kingdom, where it is possible to find 15 million people keen to buy premium pastel de nata with different flavors, as well as the French market with its 10 million potential consumers for this kind of product. Moreover, Nata Pura’s CEO suggests that “Europe is our home market, not Portugal.” To sum up, country of origin effect and the original recipe do not seem to be the key drivers of the success achieved by Nata Pura in its distant host markets, where South Korea and Saudi Arabia tend to play a key role. Instead, the branded high-quality Portuguese tradition of real ingredients, intrinsic for the product range, and the value created through adaptation tends to be the real motivator for partners to start a business relationship and for customers to buy this delicacy and develop customer loyalty. Regarding the firm’s perspective, one of the key elements for the success of its strategy is the partner selection and integration in the overall internationalization process and in international product development. This strategy has enabled overcoming of the liabilities and selecting the best of “Portugueseness” for the target markets. Surprisingly, in most of the international markets the product seems to be sometimes considered as overcooked, due to its brownish crispy surface, which has a rather different perception in Portugal, where consumers tend to see this as the normal color of this kind of products. Bearing in mind the reaction of potential and actual clients in the host markets, Nata Pura decided to decrease the tanned surface in the overall area of the top, leaving the pastel de nata with a more yellowish tone. This assisted in diminishing the perception that some new consumers of nata may have that the product did not have an “optimal outline.” Promotion Policy As far as B2B communication is concerned, Nata Pura chose to use international trade shows as the main communication vehicle, mostly driven by pastry tasting, which tends to help the brand to establish contacts with several agents, distributors, retail chains, restaurants, hotels, coffee chains, indie coffee shops, as well as catering service providers. These are usually contacted after the end of the event. So far, this approach has granted the firm a number


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of partnerships that have been subsequently developed into businesses and seem to set the path in terms of market selection. In fact, as the CEO of the firm said: “in our presence in these fairs, we were not constrained by any previous decision in the markets to enter. We may have been thinking about entering the French market, but we have always remained open to other possibilities that might appear.” As part of Nata Pura’s communication strategy, the firm relies on being innovative and traditional in both approaches: above and below the line. It mainly communicates in the B2B market, but the company also wants to assist its partners by developing B2C communication campaigns, which tend to increase top-of-the-mind awareness for these delicacies. B2C marketing communication is not standardized but developed in these partnerships to enable right kind of acceptance and perception. The image and the brand activation are developed centrally, as well as the creation and making off of the videos that try to inform about the product and, at the same time, tease consumers by positioning the product as the second best delight in the world, since there is no consensus about the first one, as the firm’s slogan mentions. Concerning brand activation, Nata Pura prefers to partner with its local intermediaries and in most of the cases the brand employs degustation which is inexpensive and also a good way of associating the product with the senses and the experience of seeing, touching, smelling, and tasting it. The firm has also elected some events to sponsor, such as the London Coffee Fest, BBC Good Food, and the RHS Flower Show, which in its opinion highlights the right associations to the brand, as the CMO recognized. In the absence of another place to insert the brand, the company chose to imprint it on the paper cup in which the pastel de nata is served that is simultaneously essential to absorb any fat left by the pastry. Regarding Nata Pura’s presence online, the firm has created two domains: a “.biz”’ for distributors and a “.com” for end consumers. Moreover, the brand has a Facebook page as well as a YouTube channel that have been activated by the generation of new contents, where the core message is focused on the presentation of a new product, with an innovative approach to the requisites of the market, taking into account the local preferences of consumers. At the same time, the note also carries a traditional value proposition, since it refers to a product that transmits hundreds of years of history. Distribution Policy As for distribution and strategic product placement, the company relies on a structure that includes the partner’s retail chain, hotels, restaurants, and coffee shops, as well as food retail stores. Thus, Nata Pura provides some solutions for partners in the retail business, distributing and marketing the



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product. However, the firm does not tend to do the same thing when dealing with the latter (i.e., hotels, restaurants, and coffee shops, as well as food retail stores) that are normally more independent in these decisions. As for the transport of the products, in order to maintain the original quality of the pastries, they need to be sealed in refrigerated containers that are needed to move the frozen pastel de nata. Then, the product flies into the destination markets and remains appropriate for consumption for a long period as it has, at least, a 12-month shelf life. Furthermore, Nata Pura’s products can go straight from the freeze to the oven, reducing wastes and shortening the need for space – especially in small coffee shops – since these pastries can be baked as they go. Nata Pura’s clients welcome these features as they generate value and flexibility. Pricing Policy Retail prices vary across contexts. Regarding retail price, even though in Portugal a typical coffee shop can sell pastel de nata at a price that ranges from 0.75 euro to 1 euro, in the United Kingdom, for instance, it is marketed at 2 pounds and can easily reach 2.5 pounds in some stores. This provides distributors a good margin, which also contributes to the success of the product abroad.

CONCLUSION AND DISCUSSION The strategy pursued by the firm is granting it the success that Álvaro Santos Pereira longed for in 2012. Nata Pura has been able to merge tradition with innovation in a combination where the accomplishment of its partners’ suggestions plays a central role in overcoming barriers to entry and foreignness of the product. Their brand crossover strategy (cf. Fang et al., 2008; Puzakova et al., 2015) in international expansion has been successful and has bridged the distance of Portugueseness and the foreign markets. It is important to observe that in Nata Pura’s strategy, international markets are not regarded as extensions of the domestic one. In fact, the firm did not build on any previous domestic business experience before going abroad. It started as a born international. The same way it did not insist – as many did before – in using and copying the “Portuguese” traditional formula of pastel de nata to be sold abroad (cf. Brannen, 2004). The firm reveals to be open-minded enough to accommodate changes suggested by its international partners while building on the strong reputation and organic ingredients, as tastes are vital for foreign consumer acceptance. Systematically,


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Nata Pura recognized and integrated the market knowledge of its partners into its international marketing policies, contrary to other Portuguese firms in this sector. Nata Pura can be considered a success on the basis of its product codevelopment with partners and incremental innovation on its product character as Portuguese delicacy. This strategy has been integrative and a flexible way to internationalize. One can say that being open to adaptation made this traditional product competitive and generated a positive ethnic character, that is foreignness, which was easier to welcome in target markets. The openness to innovation is not common when it comes to the traditional or ethnic delight market. Thus, even though Nata Pura may have played down the “Portugueseness” of pastel de nata as its central feature, it has shown to be able to promote the high-quality perception of the country (ethnic-national character) in the innovation carried, in what is considered the second best delight of the world. Thus, its hybrid brand cross-over strategy following a global logic has combined the best features for each market and leveraged on these assets of foreignness when crossing borders and consumer tastes. As a result, Nata Pura has become a global product.

NOTES 1. Which has a teaching note, as well as some visual representations that can be provided upon request. 2. See more at http://www.portugalglobal.pt/EN/about-us/Pages/about-us.aspx

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