Economic, Social and Cultural Implications for Marketing Opportunities - Term Paper Example

Economic, social and cultural implications for marketing opportunities Introduction Numbers of business organizations and companies operating internationally have continued to grow constantly. It is undisputable that the world is opening up for foreign companies and new destinations in the organizations’ business. As one of the emerging market economy, Brazil offers market opportunities in the current global world. As one of the BRIC which include India, Russia and China, it is thought that it would lead the world economy in the coming fifty years. The countries as a member of emerging market economy (EME) has various countries related to the business world. These include rapid economic growth, increased international politic power and increased foreign investment. Rapid economic growth simply means more profits for foreign investors promoting economic growth. The EMEs are more open to international trade, therefore, offering more market opportunities. As a result integration and diversification into the international economy has assisted in reducing the effects of drastic changes in then prices and other external and internal shocks allowing the country to become stable in the global world. It is obvious that such countries will definitely call for market opportunities in their business industry. Economic, social and cultural factors have various implications on market opportunities. Social influences market opportunities in various. Crime, education, ethnicity, social class and health are common social factors. Culture also has an influence in business in different ways. Culture collisions, pricing difficulties and language are not uncommon. This is common especially in the beginning. Mistakes done at the cultural level may destroy the entire business operation. Economic factors also play a major role in market opportunities. Factors such as infrastructure, capital, import systems and demands are significant in establishing markets in different countries. Social factors As Matos (2010) argues the social factors in Brazil can have impacts on marketing opportunity. Society classes, to begin with, that evolved in twentieth century has four distinct classes. They are the high class, formally middle class, informally middle class and lower class. The high has more properties and prestige while the middle are the employed, technical work force, self employed businessmen that account for nearly half the economically active population. The lower class includes a 21% of Brazilian population but generally the differences between the rich and the poor is very small. Such classes are an opportunity for diverse products with different prices. They also exhibit unique skills and are generally mobile in different work places and opportunities. Most products with pricing strategy can attract such classes who also tend to be open to various market products. Crime is rampant in Brazil, and the high rates of violence such as robberies and murders might negatively affect market. Life threatening crimes are traced back to alcoholism and drug trade of cocaine. There are also carjacking, trafficking, internet hacking, express kidnapping, slavery and domestic abuse. The crime related issue may adversely be a push factors for investors. Without adequate security of assets, personal life investors cannot opt for Brazil as a good market opportunity. Another big problem is the slow justice system that is common with Brazil. Majority of crimes go unsolved as there are many loopholes for numerous appeals. The lax criminal charges show the ineffective of settling cases and thus wastage of time and resources for investors. Other already established markets may be contained to relatively secure town and cities reducing the geographical access to markets. Brazilians are much involved in sports. As many people follow and participate regularly in various sports, opportunity emerges for interaction with other nations. International and regional football matches are opportunities that attract many investors as they participate in advertising and sponsors activities. Since Brazil has participated in all World cup and also won in many tournaments, this is an important appeal for marketers. Sports including football, foot volley, Capo era and martial arts attract many visitors which rated at five million in 2008 (Matos, 2010). This is another boost for Brazil as a market opportunity. In terms of health Brazil is rated as a high developing country since the three dimensions of human development including life expectancy, GDP and knowledge are high. Its Human Development Index (HDI) value is 0.800, with life expectancy at 71.7. Other aspects of physicians, sanitation, water quality and infant mortality rates are favorable. Health is a vital consideration for investors as well as its customers. Stable health conditions and provisions in Brazil is an important pull factor that makes it a desirable market opportunity (Reiter 2010). There are multiple ethnicities including the Portuguese, African descents from slavery, Italians and Germans. Racial mix was also diversified by arrival of Middle Eastern immigrants and Japanese in early 20 th Century. The resulting intermarriages and intermingling has created unity and thus discrimination is not explicit. This is a vital phenomenon that causes Brazil to attract international business investors. Diversities and large internal market also attract wide products from different regions of the world and therefore a timely market for investors. Education on the other hand is structured in three different categories. The fundamental, intermediate as well as higher education is quality one and therefore the workforce is relatively competent to offer services and skills. Graduate and undergraduate studies promote updating and specializing and this can positively reflect on its employees. However due to competitive scenario in education, inclusion for all is not possible and many people do not get higher education (Meuleman, & Roeland, 2009). There is therefore skilled and semi-skilled population. The population may provide relatively cheap labor and therefore a significant market opportunity for big investors. Culture factors Cultures influence market opportunities in different ways and it is important that companies and business are able to handle the difficulties that accompany culture in foreign countries. Different ways have been used to describe culture. It includes language, religious art and rituals. Osland et al. (2001) assert that the cultural factors have a significant impact on the flow of the business. Elements of culture that influence market opportunities include language, religion, education, customs and manner, attitude and value. The culture of Brazil is diverse. This diversity is emphasized by prevalent class differences that permeate every aspect of society. Indeed, it is obvious that understanding the diversity and the attitudes and unique will help in establishing market opportunities in this country. According to Bradley (2002) as much as Brazil is a real market opportunities but operating business in this country may be seen as a significant cultural challenge. The culture is a combination of America, European and Asian cultures. Culture in this country is mediated in three factors; cultural messages, cultural forces and consumer decision process. National identity, education and family manifest cultural forces. Design, roles, morality and ethics influence cultural message. Culture is indeed influenced from needs and wants in a country and consumer trends. The three factors have a significant effect on market opportunities in the country. Brazil is a Portuguese-speaking nation. However, the Portuguese differs from that spoken in Portugal. The language is a useful tool in creating marketing opportunities. In addition, most business opportunities are influenced by the language. It is obvious that a foreigner who uses their language is interpreted as having an interest in the country. Therefore, speaking the local language is advisable as it assist in gaining market insight and establishing relationship. It is also important note that language as a culture is a significant tool in negotiations. Still, each culture has different culture has different approaches to negotiations. Therefore, for excellent market opportunities in the country, it is crucial that organizations are conversant with the Brazilian language. The culture in Brazil is also manifested in different ways. Armstrong & Kotler (2007) assert that levels of manifestation include values, underlying assumptions and artifacts. Under artifacts, issues such as clothing, work practices, manner of address and visible products are important elements in organizational process and structure. Perceptions, feelings, thoughts and unconscious characterize underlying assumptions while values are characterized by strategies, philosophies and goals. Indeed, adaptation of the culture is necessary when it comes to co-operations and negotiations. However, there is a limit that an organization or company should go to accommodate the culture. Mistrust may be created form the other party if a company is trying to adapt to the culture superficially and with no deep meaning. It may lead to misinterpretation and therefore, affect market opportunities. Economic Factors It is undisputed that Brazil is an excellent market that promises marketers a promising future. One of the economic factors that have boosted Brazil in the international trade is the growth of capital. Indeed, the country is classed as an emerging property market that has continued to put growth figures at the highest levels in recent times. Property prices have continued to increase and the returns, for instance for last year were recorded at 20%+. The supporting infrastructure has also played a role in the rise of Brazilian property market. The steady mature of this market will definitely have great implications on market opportunities in the country (Bradley 2002). Low cost of living is another characteristic of economic factors that has an implication on market opportunities. It is obvious that cost of living in this county is less as compared to the Western countries. Therefore, the costing of maintaining of property related to is very low. In addition, the requirements of running business are also low. The rates of current exchange in Brazil are favorable for trading. The currency has continued to stabilize in the recent financial sector. Indeed, it has become competitive with international currencies, for instance, the dollar. This has increased market opportunities and purchasing power for most investors. The competitiveness nature of the currency clearly indicates that international business from major organizations or companies are able to establish themselves and operate with low overheads. This leads to an increase in profits and productivity (Ghauri & Usunier 2003). Customer markets have continued to increase in Brazil. These include government markets, business markets and consumer markets. As a result, ready market has been created for companies and organization to invest. This basically implies that demand for goods and services will increase following the establishment and increase of customers’ markets. Under infrastructure, there is no economy that will perform well with poor infrastructure. Indeed, Brazil has continued to spend more in improving infrastructure. Expansion of infrastructure will continue to attract investors and potential business organization in the country, therefore, opening new market opportunities. Infrastructure has significant effect on communication and transport that are major elements in international trade in the global market (Czinkota & Ronkainen 2007). The financial sector in Brazil has undergone tremendous changes. It is obvious that these changes will have major significance in international trade. The modernization of import system and lowering of import tariffs has made it easier and cheaper for foreign companies and countries to participate in trade in Brazil. Indeed, the imports have continued to increase balancing the account surplus. Essentially, import systems such as payments, customs and licensing have profound effect on market opportunities. Well refined system increase market opportunities in country while the harsh ones tend to lower the flow of goods into a country affecting the account surplus (Bradley 2002). Indeed, with these understanding, various outcomes have been observed; cultural adaptation in marketing programs is significant in order to explore the market opportunities. This is related to the consumer behavior as a result of varying cultures. Therefore, it calls for a clear ethical and market analysis in order to make the right decision in an international setting. This is necessary when penetrating a new market. In conclusion, Brazil has significant market opportunity which can be promoted for it to rise to significance with China, Russia and India. Its cultural inclusion is important, as well as regional prominence in Southern America. Steps geared to solve some of negative aspects such as crime and low levels of education may put them at an advantage, as many opportunities can open for marketer. The wide geographical regions together with natural resources like forests can be harnessed to increase its competitive advantage. The social, cultural and economic aspects may influence Brazil sustainability, and therefore there should be important attention to it. One of its important aspects to consider is how other countries have solved some of major hindrances to gain strategic capabilities in the market. This would impact on planning, and decisions that efficiently leads to continuous development of internal and international corporations markets. References Armstrong, G & Kotler, F 2007, Marketing, An introduction 8th Ed, New York: Pearson Education Bradley, F 2002, International Marketing Strategy 4th edition, London: Pearson Education Czinkota, M & Ronkainen, I 2007, International Marketing 8th edition, New York: Thomson Ghauri, G & Usunier, J 2003, International Business Negotiation 2Edition, London: Elsevier Matos, J., et al, 2010. Socio Cultural Factors Summary, http://www.boomingbrazil.nl/ Meuleman, L & Roeland, J 2009, Sustainable development and the Governance of Long-term decisions. New York: Wiley & Sons, Inc Osland, G Taylor, C & Zou, S 2001, Selecting International modes of entry and expansion. Marketing Intelligence & Planning. 19(3): 153-161. Reiter, B., 2010. What’s New in Brazil's “New Social Movements”? Latin American Perspectives, 38(1), p.153-168. Read More