Though two weeks ago I made a brief trip to Brazil, it wasn’t until I was in Colombia last week that I learned about a uniquely Brazilian brand of hair salons and hair care products, Beleza Natural. Originating as it did in the favelas (slum areas) of Brazil, the brand is a real rags-to-riches story. Now, however, because of its success, the brand faces a marketing dilemma. Should it stay true to its roots, or should it evolve to attract new, more upscale customers?

I learned about Beleza Natural at the ESOMAR Latin American 2010 Research Conference in Cartagena, Colombia, where Hy Mariampolski of QualiData Research gave a presentation titled “Beleza Natural: Expanding from the base of the pyramid.” The “pyramid” of Hy’s title refers to the large proportion of Brazilians who live on the edge of poverty. Beleza Natural was created with this target audience in mind. More specifically, it was created to serve the needs of the millions of Brazilians of African descent who possess thick and curly black hair.

Beleza Natural is the creation of a woman named Zica, who, while working as a maid and washerwoman, created a line of hair care products specifically designed for hair like her own.  As Hy described it, she experimented on herself before finally patenting her products and founding her chain of salons. Today there are 11 salons serving over 70,000 customers a month. That works out to an average of 212 customers per day at each salon, assuming a 7-day work week.

That’s a lot of customers, and not surprisingly, the description of each customer’s “personalized” treatment made me think of a production line. Customers are interviewed and their treatment agreed before they are sent to a series of stations for the service itself. The number of people served at once means the salons are noisy and crowded. A ninety-minute treatment may take as long as three or four hours as the lines grow at each station. Even so, a visit to Beleza Natural is highly coveted by poor Brazilian women, even though it might cost  about 20 percent of their average monthly income (roughly $60 U.S.).

Beleza Natural is thriving, but it has clearly reached a crossroads. Brazil’s economy is growing and standards of living are rising. The original management is now dealing with a much more corporate environment within the company and must decide how best to grow the brand. Do they continue to serve their original target audience, or do they follow their original customers upwards, evolving to meet new needs at a higher price?

Toward the latter objective, the company has already opened a store in stylish Ipanema (where Zica once worked) and has introduced a VIP space that allows people to avoid the lines for an additional fee. While on the surface there is nothing wrong with those innovations, I wonder if they are really taking the brand in the right direction. All Millward Brown’s learning suggests that the brands that grow best over time are the ones that maintain clarity about what they stand for. These brands stay true to their origins unless circumstances force a change of course.

In spite of rising standards of living, I suspect that many Brazilians today are just as poor as they were 10 years ago, when Beleza Natural was founded. If that is true, then 70,000 customers a month is a drop in the ocean. There are many more people to be served in towns and cities across Brazil. And many more who have similar needs in Africa and elsewhere. After a successful business model has been established, the biggest driver of brand value is availability—both mental and physical. If people readily think of your brand as one that will meet their needs and it is readily available to them, then the stage is set for significant growth.

So my suggestion to Beleza Natural is to stay the course. Follow the example of the strategy originally adopted by Starbucks. Stay with the original format, and invest in new stores at home and then abroad. Starbucks did eventually stray from what made them successful, and though they have struggled for a year or two, they may have enough momentum and scale to recover. It would be a shame to see a promising brand like Beleza Natural go bad at such an early stage.

So what advice would you offer to Zica and her colleagues?

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