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Marketing Research for Yelp in the Brazilian Market - Term Paper Example

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The following proposal represents the understanding of the project we have acquired so far. The purpose of the proposal is to provide you an understanding regarding the work to be carried out and the manner in which it would be carried out…
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Marketing Research for Yelp in the Brazilian Market
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Inserts His/her Inserts Inserts Grade (8, 7, Marketing Research for Yelp in the Brazilian Market Table of Contents Table of Contents 1 Market Research Report for Yelp in the Brazilian Market 7 PROCEDURES AND RESEARCH METHODS USED 11 DESCRIPTION OF PRIMARY RESEARCH CONDUCTED 12 DESCRIPTION OF SECONDARY RESEARCH CONDUCTED 13 FINDINGS AND CONCLUSIONS 20 Presentation of Findings 20 Presentation of Conclusions 21 RECOMMENDATIONS 22 PART 1 Market Research Proposal for Yelp in the Brazilian Market Dear: We anticipate the provision of qualitative research services regarding Yelp in the Brazilian Market. We ensure that the quality of the research services to be provided would be of the highest quality and utmost care would be taken in order to ensure the accuracy of the data used and relativity of the research with regard to your strategies. The following proposal represents the understanding of the project we have acquired so far. The purpose of the proposal is to provide you an understanding regarding the work to be carried out and the manner in which it would be carried out. If you feel that any of the steps mentioned in the proposal contradict with your expectations, kindly notify us so that we may be able to make the relevant modification on a timely basis. BACKGROUND: Yelp is planning to provide its services to the Brazilian users regarding Brazilian markets and this research report would assist Yelp in initiating its operations in Brazil. The research report would include a comprehensive study of various factors that will help the organization understand the manner in which Brazilian businesses operate and the ways in which it can engage the Brazilian users. RESEARCH OBJECTIVE: The purpose of this research is to ensure whether it would be feasible for Yelp to start operating in Brazil. The research report would provide the factors that are responsible for the success of Yelp in other territories and an analysis of the fact whether those factors would be feasible in Brazil. The findings of the research report would assist Yelp in understanding the environment of Brazilian markets and modifying its strategy for entering in the Brazilian market accordingly. RESEARCH METHODOLOGY: The research methodology to be followed would consist of primary research and secondary research. In primary research, the relevant information would be acquired directly from the users, while in secondary research, the information already available from different sources would be analyzed and it would be determined whether such information can be utilized for the purposes of this research. The primary research would be conducted through the use of online surveys using the social networking sites and questionnaires at different markets in Brazil. A set of questions would be designed that would focus on the attitude of the users towards a service like Yelp in Brazil. The surveys and questionnaires would include questions that would help the research team analyze their response towards such a service. In this manner, it would be found out whether the users anticipate the services provided by Yelp in Brazil or not. The questionnaire would be simple in order to ensure a higher response rate. The following would be the key information to be acquired through the questionnaires: 1. What are users overall perceptions and attitudes towards the services like the ones provided by Yelp? 2. How users view Yelp as compared to other such websites in Brazil. 3. Understanding the attitude of the users by understanding the cultural specifics that are most common in Brazil. 4. The factors that the users like and dislike regarding the markets of Brazil and how a service like Yelp would help them decide where to shop and where not to. 5. What the users in Brazil know about Yelp, what they like about its services and what do they dislike about it. The secondary research would include the analysis of market researches already conducted by other organizations or independent researchers. It would also be determined whether such research contradicts with the result of the primary research conducted by the research team. COMPOSITION: People who would be asked to fill the questionnaires and take surveys would age between 20 years to 40 years as it has been observed that users between this age group utilize the internet for shopping. It would be endeavored that there is a fair mix of males and females who take the surveys and fill the questionnaires. TIMING AND LOCATION: The questionnaires would be given out at selected markets in Brazil where it is most likely that people who utilize internet for shopping would be available and will be willing to fill the questionnaires. COSTS: The standard cost of printing and stationary for the questionnaires will be billed. REQUIRED MATERIALS: The standard stationary would be required in order to make it easier for the users to fill the questionnaires on timely basis. BILLING: An invoice of the standard cost along with the original invoice of the expenditure incurred by the research team would be submitted upon the completion of the research procedure. RESEARCHER CREDENTIALS: See attached resumes/bios. We thank you once again and look forward to our working with you on this project. Best Regards, PART 2 Market Research Report for Yelp in the Brazilian Market Executive Summary Yelp, Inc is an online community which provides guidance and information on urban city guide, this information aids individuals to locate places to shop, drink, eat, play and relax. The organization is planning to extend its services towards the users of Brazil and in order to ensure that the users would accept the services, a marketing research was required. Due to websites like Yelp, the business environment is changing dynamically because of which the marketing gurus have been forced to think out of the box not only to build the brand but also to sustain the brand equity so that competition can be rendered ineffective. Therefore, if Yelp is not accepted amidst the competition, its extension towards Brazilian users may prove to be ineffective. Therefore, in order to determine whether it would be feasible for Yelp to extend its services in Brazil, a market research was conducted that included both primary research and secondary research. The primary research included the user of surveys and questionnaires while the secondary research included the analysis of market researches conducted in the past. This research paper assesses the business environment in Brazil, attitude of the consumers, the attitude of users of internet towards websites like Yelp.com and the factors that indicate whether Yelp would be able to make its mark in the country. The paper would also indicate the anticipation of the users of internet for a service like Yelp. If the users require something new from the website, the organization would also consider such requirement as part of its strategy. Introduction Yelp, Inc is an online community which provides guidance and information on urban city guide, this information aids individuals to locate places to shop, drink, eat, play and relax. It was basically founded in the year 2004 and it’s headquarter is in San Francisco, California. This organization mainly operates the website yelp.com which includes user reviews, social networking and local search engine and it has over 54 million monthly exclusive surfers as of late 2010. Yelp Inc launched its namesake website into the San Francisco marketplace in Oct 2004 right after the terminated start as an email commendation service. Early funding from venture capital firms Mission Street, the company received $6 million and other additional investments that amounted to $3 million were made by Benchmark Capital in 2006, $3 million by DAG Ventures and $5 million by a private investor from Laguna Beach in the year 2008. In the first half of the year 2008 Yelp Inc expanded its operations and opened an east coast office at Manhattan initiating a Canadian focused edition of the website. The company now operates globally and has sites in Germany, France, Spain, UK, Netherlands and Austria. Yelp Inc’s page view count surpassed its precursor and former rival, Citysearch; revenues for the year 2009 were $30 million and $50 million in 2010. TechCrunch reported on Dec 17, 2009 that Yelp Inc is in serious negotiations with Google to acquire the organization for amount over $500 million and by 21st of Dec the same source reported that the CEO of Yelp Inc has rejected the offer made by Google. Yelp Inc has been recognized as a potential entrant for an IPO by the year 2013. Local search For its visitors, Yelp Inc provides online local search capabilities that comprises of what exactly the user is looking for (e.g. a bakery) and the place from which the search is to be carried out, entered as a particular address, street, state combination or a postal code. Each of the listing of business result includes reviews, ratings from other website visitors and information such as address, accessibility, hours and parking facilities etc. This activity helps in keeping the business listings up to date and the owners of business can update their own business’ listing information directly. Multi-tier and City categorization system organize the listings and related content and are also discovered via categorized reviews or through profile members of Yelp or their list of reviews. Through web or mobile browsers information can also be accessed. Current situation To build up a local online community, Yelp Inc combines the social networking functionality and the local reviews. A reputation system is build up adding user reviews to social web functionality, whereas the visitors of the site can actually see which users are the largely famous, appreciated and productive, since how long each has remained a member and amongst them which are the ones having similar interests to theirs. Through placement of admired reviews on the website and in local market and via peer feedback mechanisms, Yelp circulars aid in motivating the contributors. To generate competition amongst the contributing members Yelp Inc has started a reward system namely ‘First to Review’, this also further motivates the creation of better reviews and adding up to the website’s business exposure. The online community is strengthened via off-line events at bars, nightclubs, cultural venues and restaurants in different cities and areas for its popular, loyal and valued contributors, titled as the ‘Elite’ members on the website. The members are required to provide their recent snap along with their real name, should not be minors i.e. be at least of permissible drinking age and not own a local business. The members in return receive a special badge on their personalized page for each year they write explicit quantity of reviews or they add to the enhancement of the online community. This concept was introduced as to show that the user is a loyal and trusted creator of the business reviews and it is mostly helpful to get nominated by other Elite users in order to gain Elite status. Credit is given when author provides funny, cool or useful reviews so that other members can vote on those posted reviews. For online socialization and to debate on local events and businesses the website also has an online forum, but such concepts of Yelp have been failed as other competitors emulated the ideas. Products and services Throughout the US and Canada, Yelp Inc websites have listings for businesses and acknowledge reviews of any service or business. Business listings differ extensively in nature with the website comprising listings for stores such as shops and restaurants; service areas e.g. hotels, doctors and cultural venues and non business areas e.g. parks, schools, churches and museums. As of the year 2008, San Francisco, remains the most dynamic, with major acceptance in eighteen local areas comprising Chicago, Boston, Washington, New York, San Diego and Los Angeles. Usage of San Francisco have earned the website reviews over 4000 restaurant listings and few with hundred of review apiece. As of Feb 2008, website claims of having 2.3 million reviews in total, as per the estimation by CEO, review trends are 85% positive and are believed to be emerged mainly from the age group amid 26 to 35. In August 2007, a free REST and JSON-based application programming interface was released by Yelp, this mainly gives access to details related to business listings, snap shots and to add business information to a site or mobile application, ratings can be utilized. This application has been utilized to combine the business reviews into on hand application of Google Maps for instance on www.zillow.com. Yelp Inc executed Facebook Beacon in Dec 2007, this lead to some alterations being done in the website privacy policy which gained negative feedback. Yelp in Brazil The main purpose of this research paper is to analyze whether it would be feasible to start a Yelp (www.yelp.com) in Brazil and whether the site would attract a good number of users. The research would be conducted using the facts regarding consumer behavior which help in consumer marketing research1. The facts mentioned above provide concrete evidence that the website is popular is other countries. Users actively provide their reviews regarding different shops, markets, businesses and stores, while other users respond to such reviews. It is highly popular because it is an interactive website where different users provide their perspectives. It is also considered credible because the reviews are not sponsored by the businesses but they are provided by the users themselves. Therefore, whether such a website would be popular in Brazil as it is in other territories cannot be said for sure. In order to ensure this, the following research was conducted in Brazil. PROCEDURES AND RESEARCH METHODS USED In order to determine whether it is feasible for Yelp to enter the Brazilian market, an extensive research was conducted. The research conducted consisted of primary research and secondary research. Primary research is the information acquired directly from the source while the secondary research is the analysis of the information already available2. DESCRIPTION OF PRIMARY RESEARCH CONDUCTED The primary research would be conducted through the use of online surveys using the social networking sites and questionnaires at different markets in Brazil3. A set of questions would be designed that would focus on the attitude of the users towards a service like Yelp in Brazil. The surveys and questionnaires would include questions that would help the research team analyze their response towards such a service. In this manner, it would be found out whether the users anticipate the services provided by Yelp in Brazil or not. The questionnaire would be simple in order to ensure a higher response rate. The following would be the key information to be acquired through the questionnaires: 1. What are users overall perceptions and attitudes towards the services like the ones provided by Yelp? 2. How users view Yelp as compared to other such websites in Brazil. 3. Understanding the attitude of the users by understanding the cultural specifics that are most common in Brazil. 4. The factors that the users like and dislike regarding the markets of Brazil and how a service like Yelp would help them decide where to shop and where not to. 5. What the users in Brazil know about Yelp, what they like about its services and what do they dislike about it. DESCRIPTION OF SECONDARY RESEARCH CONDUCTED There are some basic questions that Yelp must answer and for this, successful market research is required. The three main elements that were considered for the purpose of this research are mentioned below4. 1. Market 2. Price 3. Competition Market Users of Yelp The users of Yelp are the young people more importantly those who fall in the age group of 20 to 35 years of age. However, since it is an online website where people can socialize and give their reviews, there is no age limit for people to use Yelp. Target market Yelp has a clear business model which enables the businesses to pay for the premium features that are offered by Yelp. Moreover, it has enhanced features as well as listings which are very much prominent. This approach is very well used by Yelp because many businesses approach them rather than opting for Google or Yahoo. The target markets of Yelp are all the entertainment providing and the eating places such as restaurants and cafe’s. Current customers Yelp has a lot of customers who are the high end restaurants. These restaurants enable the customers to order online and also emphasizes on the dining options that are not much expensive. Besides the restaurants, Yelp also serves the shopping centers, beauty parlors and spas. Projected growth rate in Brazilian market Yelp is doing well in the markets it is operating currently. Moreover, since the growth of Internet has been experienced, statistics show that there are 488,005,400 Internet users in America. In Brazil, there are more than 6 million users who use the Internet and this makes Brazil the fifth largest population of Internet users. In the future, Yelp will be able to meet the growth of the company and will increase the growth rate of their target market. Moreover, the target market of Yelp is prone to increase in the future. Yelp is prepared for the growth and will do well in the Brazilian market5. Internet penetration in America Price The target market i.e. the customers of Yelp are not price sensitive. Since the target markets are the local businesses, their aim is to create awareness of the businesses amongst the customers. Therefore, they are willing to pay to “Yelp” to help them in increasing sales. The price that Yelp charges to its customers is different from the competitors. However, since the Brazilian market is not well aware of Yelp, it cannot charge high prices to the target market. Therefore, the price decided should be justified with the “price curve” of the market. The perceived value that Yelp is providing to its target market is obvious. However, since people in Brazil are not well aware of Yelp. The website first has to create awareness about its presence before it approaches the local businesses to pay Yelp. With regards to the competitors, Yelp should study the competition and their prices well before opting for price structure. However, the competitors will opt for other strategies not to let Yelp evolve in the market. Therefore, Yelp must plan proper strategies to enter the Brazilian market. Competition Although Brazil has many Internet users, however, Brazil is not overrun with the competitors of Yelp. Therefore, Yelp can develop its market if it plans proper strategies. In order to overcome the competition, well planned strategies are required for which Yelp has developed the strategies mentioned below. 1. Attracting Customers 2. Customer retention strategies 3. High pressure sales tactics The competition of Yelp is intense and the website that competes with Yelp is mentioned in the figure below6. Elements of Brazilian market Climate and language Climate in Brazil is mostly tropical and temperate in the South. The population in Brazil is 184,101,109 and majority whites make the ethnic make-up of Brazil which also includes the Portuguese, German, Italian and the Spanish. The language spoken in Brazil is the strongest element of Brazil and Portuguese is spoken by almost 100% of the people who reside in Brazil. Races and family size Brazil has people living from many races and ethnic background which make it diverse. Moreover, families in Brazil are large in size. Brazilian Class System Social discrimination is done in Brazil on the basis of skin color. People who have skin which is dark brown are economically as well as socially disadvantaged. Middle and upper class do not interact with the lower class and great disparity between wage differences is visible. Similarly, women are also given low paid jobs. Currency Real (BRL) is the currency that is used in Brazil. Major Advertisers FINDINGS AND CONCLUSIONS Presentation of Findings We determined from our research that the majority of the people who took the survey and filled the questionnaire used the internet to find credible places for shopping. According to the research, 75% of the users browsed for different markets for a single product and opted for the market that offered lowest price. The initial question in our survey asked the users about their perception and attitude towards the services as provided by Yelp and the comparison of such services with the current information available over the internet. The overall response for this part was positive. It was found out that the users looked forward to such a service because it would make it easier for them to find a feasible market to shop at and they would be able to acquire good quality products at low prices. 80% of the responses indicated that they looked forward to services like Yelp while the rest of the respondents were satisfied with the current information available over the internet. Another set of questions in the survey was targeted towards the cultural specifics of Brazil. As the response to this set of questions, it was found out that consumers in Brazil opt for markets that offer lowest prices. 73% of the users were ready to accept lower price for a slight difference in quality. Another set of questions was targeted towards finding out the perception of the users regarding the Brazilian markets. It was found out that factors that are liked for Brazilian markets are the wide range of products available in a wide range of prices, while the factor disliked was the lack of quality. As a response to the question that whether a service like Yelp would help the users enhance their experience regarding Brazilian markets, it would found out that the majority was optimistic. 78% of the users responded positively saying that a service like Yelp would help them enhance their market experience. The final set of questions was designed to assess whether the users already knew about Yelp and the response to these questions was near average. 55% of the users were aware regarding Yelp already while the others were unaware. Presentation of Conclusions As a result of the research procedures, the conclusions drawn were; the consumers in Brazil utilize the internet in order to find out better markets for shopping, the users in Brazil anticipate services as provided by Yelp and in light of the information obtained it can be said that Yelp would succeed in Brazil. A number of users browse the internet in order to obtain information regarding different markets in their surrounding and this fact gives concreteness to the planning of Yelp to enter the Brazilian market. Since Yelp is already successful in other territories, it would be easier for Yelp to capture users in Brazil. The users in Brazil already look forward to the services of Yelp therefore it can be said that Yelp would not find it difficult to enter the Brazilian market and there would be a number of users would be willing to provide their reviews regarding the markets of Brazil on the website and an even larger number of users would be willing to read the reviews and decide to go for shopping accordingly. RECOMMENDATIONS Each recommendation given below would help the organization in attracting a large number of users so that the website may be able to provide enough number of reviews for all the markets in Brazil. The website should be advertized through different social networking websites. According to a secondary data, it was also found out that along with Facebook, Orkut is also vastly used in Brazil therefore Yelp should consider advertising the website on Orkut as well along with Facebook7. The interface of the website should be slightly modified in order to cater the requirements of the Brazilian users. Since a large number of users search the internet for information regarding markets in Brazil and the search engine used is Google, therefore Yelp should get its website advertised by Google. In this manner, the website would appear as a sponsored result whenever a user in Brazil tries to seek information regarding a market in Brazil. People will be encouraged to visit the website so that more and more places get known to the people in Brazil. The owners of various places in Brazil will have an easy and cheap tool for marketing. Marketing is an extremely important concept today. Therefore, it is very essential for the companies to market their products to create awareness about their product. Similarly, companies will market using Yelp and it will create awareness. Other than this, when people hear about positive reviews about something from someone through word of mouth, they are more prone to trust that individual and to try that new outlet. This will help the client in operating successfully. Work Cited Armstrong, G. & Kotler, P. Principles of Marketing. 12th Edn. Prentice Hall, 2007. Hawkings. Consumer Behavior. 7th Edition. McGraw-Hill Education. 1998. Internet world of stats. (2011). “Internet World Of Stats”. September 10th, 2011. Retrieved from: http://www.internetworldstats.com/stats2.htm Jobber, D. Principles and Practice of Marketing. McGraw Hill, (2008). Kevin,K.& Kotler,P. Marketing Management. 13th Edn. Prentice Hall, 2008. Meyerson, M & Scarborough, M.E. Mastering Online Marketing. 1st Edn. Entrepreneur Press, 2007. Yelp. (2011). “Competitors”. September 10th, 2011. Retrieved from: http://venturebeatprofiles.com/company/profile/yelp/competitors Read More
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