International Marketing - Brazil Country Notebook Project - Term Paper Example

?International marketing Executive summary The current situation of the company can be valuated using comprehensive SWOT analysis and the analysis of the market trends and the success of the products in the market. The market share of Brastemp has been increasing over the last two years. The success of the company is tied to the increasing demand for household electronics. The company is the leading maker of household electronics in Brazil. The quality of the Electronics is the main strength of the company. The company has attracted more customers from around the world based on product quality and prices in the market. The company has established a strong brand which has enabled it to be the best in the market. The brand is of part of the organization, it is an integral property of the business, which adds value to the business (Anushree, 2012, p. 50). However, the cost of the products has been a hindrance to new customers without the understanding of the status of the company. The company is currently targeting the high and middle class by producing phones that facilitate business operation. However, the low-class customers are a potential opportunity for expansion and development. The company needs to expand and develop products targeting the mass market. The company’s product price is slightly higher compared to the products originating from Korea and Japan and China. Coupled with the narrow range of products offered, the company faces stiff price competition because other companies produce a wider range of products with varying prices. The success of the company’s electronics in the market has been reduced by the variety existing in the market (Lee & Carla, 2005, p. 45). Additionally, the greatest threat is from the already established companies such as Black and Decker because they have established a presence. The main threat to the company is the increasing cost of manufacture coupled with stiff competition from established players in the market. The preference of electronics could help to reduce the threats posed by the competitors. The company is experiencing a massive change in the economy after the global financial crisis. Product: brastemp country: Brazil Cultural analysis of Brazil The success of a business depends on culture. Culture varies from country to country depending on the origin, religion or cultural practice of the indigenous population. In fact, the tradition of the indigenous and the effect of religion in behavior is advance. For example, Brazil population is affiliated to Catholicism and the impact of religion may be adverse in some areas. However, Christianity offers the opportunity for success through integration and acceptance. Brastemp is a company dealing with kitchen equipment with the main focus being on cookers and fridges. It targets export to countries such as the US, Argentina and other South American countries. However, in the next decade the company intends to supply its product globally by venturing into Asian and African markets. History of Brazil The origin of the Brazil nation is under dispute by archaeologists. However, the beginning of the nation can be traced back to the native population described by the Portuguese colonizers as Indians. In the early discovery there were over 2000 tribes living in Brazil. The nature of the population owing to the difference in origin is complex with a diverse approach to business and other related activities. The history of Brazil is a complex story with diverse conflicts in academic report or work. In fact, the country’s history is divided into several eras with the main focus being on the colonization era. For business, the population and preference is vital because they help in determination of the market quality. Geographical setting Brazil is locates in the South America continent and is covers almost half of the continent. It is the largest country in the continent but has diverse coverage. The total area coverage is 8,514,215km2 which is both land and water combined. It is border by several countries such as Argentina, Bolivia, Colombia, French, Uruguay and Venezuela. Climate The climate of Brazil with the southern area is temperate. It has the amazon basin known for diverse forms of wildlife including aquatic inhabitants. The amazon basin constitutes almost half of the rainforests in the world. Topography Brazil has a major basin known as the amazon basin which dominates the northern part of the country. The Amazon River occupies up to two-fifths of the country. The total coverage of the amazon basin constitutes 40% of South America’s total area (Crawford, 2000, p. 78; Anushree, 2012). The Amazon River is the second longest river after the Nile in Africa. The amazon lowlands constitute the world largest tropical rainforests. The Atlantic coast of Brazil does snot has a real coastal plain but is made of stretches of lowlands along the coast with bay like indentations. These bays like indentations are the location of the principal cities of Brazil. Therefore, the topography of Brazil is unique based on the land and water surface area. Social institutions The family is an integral part in business marketing because it determines the cost and preference of the business. In fact, social welfare depends on the nature of the families, which is the main unit in consumer evaluation. The family is the foundation of the social structure in Brazil with the focus being on nuclear family (Anushree, 2012). However, the family set up allows for strong ties with the extended family. The family unit is very different but tends to be small and unclear. The nuclear family The nuclear family is the integral part of the family with the main focus being on developing of stable families. However, the decision making process of the family involves the inclusion of the extended members of the family. While the role of the nuclear family is clearly stipulated in brazil, the extended family is maintained through the work of the strong ties which make the person believe in the need it respect the elderly and the members of the extended family. With such reports, it is vital to understand the role of nuclear family in the social structure. Nuclear family is the basic unit in the social structure of Brazil and is controlled by family tradition, culture and aspirations. In spite of the existence of the strong extended family ties, the personal space of the nuclear family is clearly defined. The extended family The extend family in Brazil tend to live with the nuclear family. In fact, in some household all the three main generations will be present, which is the grandparents, parents and grandchildren. The binding factor in the whole process is the strong ties developed by the Brazil culture and tradition. The extend family has a vital role to play because it influences the development of social controls which in turn shape the behavior of the individuals within the family. The dynamics of the family The strong family ties help in the development of the dynamics of the family setting. The development of respect across the three generations defines the relationship between individuals. In the family, children are not expected to contribute to the welfare of the whole family. In addition, children have separate activities and are not expected to participate in other adult activities. The adult children are expected to live at home until they are married. Before they marry, they are encouraged to leave the nuclear family and become independent. Individualism is encouraged with the main aim of achieving self-reliance. However, merit is considered of great importance than interpersonal relationships in business interactions. However, the frail elderly are place in nursing facilities because it is the common practice. Parental roles The roles of the parents are vital in development of families. Therefore, the parents in Brazil are expected to develop the necessary skills and transfer them to the children. When the children attained adulthood, they are expected to be self-sufficient and state their marriage. Marriage and courtship The marriage and courtship program of the Brazilians is simple because the adult child is expected to identify and start a relationship with his spouse. The extended family offer support and direction to the children by teaching them code of conduct and planning for marriage. The role of women in Brazil is different because they are expected to offer guidance. The dressing code of women in Brazil is different because they are expected to dress in bright color regardless of the occasion except in cases of funeral. In fact, even the office dress code involves the use of warm or bright colors. In European countries, the dress code for office involve suits of cool colors and designed in a particular way and not the use of bright colors. Economic analysis The Brazil’s economy is the seventh largest with respect to nominal GDP. The markets are relatively free markets in an inward-oriented economy. It is the largest economy in South America. It is among the fastest growing economy in the world with an average GDP growth of over five percent per annum. It is estimated that the Brazil economy will become one of the five largest economies in the world by 2050. Growing economies present a good ground for new product development and instill the development of better and complex methods (Lee & Carla, 2005). In fact, the market potential of such countries is high. Brastemp can achieve success if they engage in effective product marketing coupled with the power of change and the development of social media platforms of communication. Population The population of Brazil has increased over the last 50 years from 72.7 million in 1960 to 196.7 million in 2011. The population in Brazil accounts for 2.85% of the world’s total population. It gives a ratio of 1:35 which means for every 5 people one resident of Brazil. The high population presents a large market for products. Brastemp must ensure that the kitchen product resonate with the population as such several market penetration strategy can be used to ensure that the targeted market share is reached. Population distribution The average age of the Brazilian population is lower than most of the European countries. The elderly of the age above 65years make up only 4.2%. The working age of between 15 to 65 years makes 61.1 percent of the population which indicates a potential market for the kitchen products. The working class is a vital part of the population because they are the potential customers of the products. In fact, very many companies have achieved success because of the target population. The population in Brazil offer vital and important market segment for consumer and household products. Brazil has higher birth rate than death rate which makes the country a developing country. However, with the increased education the number of children per couple has reduced significantly. The fertility rate may be less than 2.2 children per woman. The young account for 28% of the population which makes the population structures more like a bullet and not a pyramid. Economic statistics and activity The GDP of Brazil in 2011 was worth 2475.65 billion US dollars and it represents 3.99% of the world economy. The country has experienced growth its GDP at an average of 469.5 with the highest GDP being recorded in December 2011. The average growth of the GDP indicates the changes in the manufacturing and the agricultural sector. The growth indicates the continual growth of the national income. In business, it indicates the market potential of the country. The increase in GDP illustrates the increase of the buying power of the people. Consequently, it offers an idea on how the promotional strategy and marketing strategy should look like in the case of the kitchen ware company. Per-capita income Per capita income is vital because it can be used in developing pricing strategy. When products are affordable the population can buy the products readily. However, per-capita income may not be effective in household with extended family. In Brazil, the per-capita income is applicable because the family structure ensures that adult children become self-sufficient and have their own homes before marriage. The self-sufficiency approach in adult population ensures that the per-capita income values are close to accurate. Brastemp needs to develop product variety that covers both the young adults in the process of achieving self-sufficiency and the adult population requiring luxury goods. The company has products that accurately cover the above mentioned difference and can be able to achieve success in the Brazilian market. Current performance of the company indicates success because of the diversity of products offered to the market. Mineral resources Brazil is rich in mineral reserves which include iron ore, tin, copper, bauxite and Pyrochlore. These minerals are partly exploited. Minerals can improve the welfare of the citizens if properly addressed. In addition, there are other products that can benefit from reduced prices due to the increased demand for the product and as a result of reduced pricing. The availability of raw materials locally will reduce the unit cost of the product. Brazil has large deposits of other metallic and non-metallic compounds which can be exploited to benefit the country. Transport in Brazil Transport infrastructure in Brazil is marked with several differences in terms of region and quality. Regional differences are as a result of poor national rail network and the difference in road network quality. In spite of the poor infrastructure, Brazil’s economy is growing very fast, which will force the government to develop or improve the road infrastructure. The understanding of the transport infrastructure will ensure distribution channels employed will have the necessary advantage and efficiency. For the regions with good rail network, the company may resort to using the rail network while the regions with poor road network will require mergers with the existing distributor in order to reduce cost of the product and improve availability. Mergers with the established distributors will improve product presence and ensure customer confidence because of the brand loyalty established by the distributors. The reduction of the cost of distribution will be reflected by a reduction in product price and increased product or brand visibility. In developing an effective distribution channel, Brastemp can be able to achieve greater success by developing a strong brand image. Brand image is vital in marketing because it increases loyalty and preference. Strategic Marketing Process The process of developing a strategic marketing plan involves several steps namely; situational analysis, developing of the action plan budgeting and establishment of the goals and vision of the marketing strategy. Situational analysis According to the American Marketing Association (AMA), situational analysis is” the systematic collection and study of the past and present date to identify trends forces and conditions that have potential of influencing business and choice of appropriate strategies.” Situation analysis has several elements that must be analyzed and include; product situation analysis, competitive situation, distribution situation, environmental factors and opportunity and issue analysis (Lee & Carla, 2005). Product situation This is the analysis of the current product or the modification done so as to establish the product position in the market. The definition of the product is significant at this stage to be able to evaluate its ability to penetrate in to the market especially if it is a new product. Additionally, it enables the business to choose appropriate promotional and advertising strategy. The product situation is vital for the planning of the marketing strategy. Competitive analysis It involves the researching on the competitors both directly and indirectly. The analysis is indispensable for the establishment of the relative position of the organization in relation to the competitors. Several factors can be employed in the analysis including the use of sales and profit figures, price, product attributes, market position and customer service attributes (Beverly & Thomson, 2011). The strength and weakness of the business is also analyzed in the process. Distribution situation The distribution situation of the business is noteworthy because it affects product visibility and accessibility. These factors affect the performance of the product in the market leading to an increase or decrease of the sales volume. The method of distribution employed is vital and includes use of distributors or intermediaries. The method employed may affect the price and profit margins. Environmental factors Environmental factors include external and internal factors that affecting the performance of the product. The internal factors that should be explored include sales volumes, profitability, customer mix, data on customer complaints and perceptions (Anushree Bhattacharyya, 2012). This analysis is helpful in the evaluation of internal departments to give insights of the performance of the product. After situation analysis, SWOT analysis of the product or service is undertaken. SWOT analysis enables the understanding of the current situation of the product thus encouraging the implementation of changes to facilitate the achievement of the desired goal. The procedure and guideline of conducting a SWOT analysis includes; setting the ground rules which involves brainstorming and allowing participants to share freely during the process (Sandhusen, 2000). The analysis must proceed in an orderly fashion starting from the strengths and ending with the threats. After review, the list of items must be reproduced to promote group reviews. In addition, the identification of the opportunities and challenges facing the organization is done. The list generated must be limited having the essential issues. Resources are usually limited; therefore, the list must be narrowed down using a ranking process thus facilitating the attainment of group consensus. Conclusion The marketing mix and sales plan are integral for the success of the products. It is vital for the company because it has covered integral issues in market segmentation and penetration. However, the company needs to address price issues that are arising from distribution cost. The marketing strategy is successful because it has enabled the success of the products. Reference Anushree, B. (2012, June 20). Cannes Lions 2012: Five-points to a great marketing strategy. Retrieved July 10, 2012, from Cannes Lions: http://www.afaqs.com/news/story.html?sid=34444_Cannes+Lions+2012:+Five-points+to+a+great+marketing+strategy Beverly, M., & Thomson, T. (2011). The Power of Real Time Social Media Marketing:How to Attract and Retain Customers. New York: McGraw-Hill Professional. Crawford, M. (2000). Marketing Research and the New Product failure Rate. Journal of Marketing, 51-78. Lee, J., & Carla, J. (2005). principles of Advertising; a global perspective. London: Routledge. Sandhusen, R. (2000). Marketing. New York: Barron's Educational series. Read More