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International Marketing- Brazil Presentation

International Marketing- Brazil Presentation



A competitive analysis of Brazil. An international marketing approach to discussing its competitive options in today’s world marketplace.

A competitive analysis of Brazil. An international marketing approach to discussing its competitive options in today’s world marketplace.



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    International Marketing- Brazil Presentation International Marketing- Brazil Presentation Presentation Transcript

    • The New Land of Opportunity International Marketing Term Project
    • TEAM MEMBERS: Allegra Ellis, Ali Saleh, Betty Tieu, Joman Ortega, Ndeye Sambe, Sam Reyna
    • Where is Brazil?
    • Brazil • Officially the Federative Republic of Brazil • September 7, 1822 - declared Independence from United Kingdom of Portugal • Brasília, federal capital of Brazil • Metropolitan population 3.7 million est. • São Paulo, largest city • Metropolitan population 19.8 million est. • Rio de Janeiro, second largest city • Metropolitan population is 12.3 millions est. • "Brazil" comes from brazilwood, • Tree that once grew plentifully along the Brazilian coast.
    • HOFSTEDE`s Dimensions DIMENSION BRAZIL Power Distance High - Hierarchical-based, respect elders/leadership Individualism Low - loyalty and team work are sought out for Uncertainty Avoidance High - Laws and rules are very important for safety Masculinity Middle – Men/Women equality, current President is a woman Long Term orientation High - Embrace long-term goals, easily accept change as a part of life. Dilma Rousseff, President of Brazil First women President Worker’s Party Voted in office 1 January 2011
    • Ms. Aparecida Delurdes Malik Trade Officer of the Trade Promotion Bureau Ms. Mary Ann Blackburn Trade Officer of the Trade Promotion Bureau 1233 West Loop South Suite 1150 Houston, TX 77027 Phone 713.961.3063
    • Source: FGV. Reasons for Middle Class Expansion: • Resumption of economic growth; • Simplification and reduction of the tax burden for small and medium enterprises, which led thousands of companies into the formal market and allowed access of 1 million workers to social security benefits; • Real increase in the minimum wage; • Expansion of income transfer programs by the federal government.
    • Factors that contribute to the continued growth of the Brazilian Economy: • The discovery of the Pre-Salt oil reserves and bidding rounds for exploration; • 2013 Confederations Cup • FIFA World Cup of 2014 • World Olympics 2016 • Infrastructure updates and expansion to keep up with the new activities listed in addition to become more competitive internationally. Brazil in 2013
    • • Rio de Janeiro • Investing $30 Billion to improve infrastructure • Three year plan to improve infrastructure • $2 Billion in BRT (public transportation) • Pacification - making the streets peaceful and safer for tourism • “My dream would be to be born in Rio de Janeiro in 2020. It’s a new city.” • Leonardo Gryner, COO, RIO 2016 Organizing Committee Brazil in 2013
    • Business market Brazil currently pursuing? • Oil and Gas • Infrastructure • Ports and Airports • Technology PRIMARY INDUSTRIES Manufacturing: • Mining • Textiles • Apparel • Vehicles • Consumer Goods Agriculture: • Coffee • Soybean • Sugar • Tobacco Service Sector: • Tourism • Financial Services • Retail Sales
    • Brazil PAC PAC – Growth Acceleration Program was introduced in 2007 and laid out investment plans to solve infrastructure issues as well as prepare for the upcoming 2014 World Cup and 2016 Olympic events. Investments are in: Logistics Highways and local roads Railroads Ports Airports Waterways Energy Power generation Power transmission Renewable fuels Oil and natural gas Geology and Mining Revitalization of the shipbuilding industry Water and Electricity for all Housing Integrated Community nurseries sports fields in schools arts and sports center unified
    • Brazil PAC • PAC 1 (2007 – 2010) • Investments planned of R$ 656,5 billions • PAC 2 (2011 – 2014) • Total investments planned of R$ 989 billions • Investments up to June 2013 of $ 557 billion - 56.3% of the total planned by 2014 • Total Planned Works finalized by 2014: R$ 708 Billion • Work completed from 2011 until April 2013 R$ 388 billion - 54.9% of the total planned by 2014 • Since 2011 more than 4 million new jobs were created, of which 500,000 just in the civil construction
    • Brazil’s Political Structure Political • Brazil political and legal system governed as a Federal Republic since 1985 • Consists of 26 states and a federal district Legal System • Brazil is a federative republic • Constituting of a union of States, Municipalities, and the Federal District. • Brazil’s legal system is codified • Laws are issued by the Federal Government, States, and Municipalities • Each within its own sphere of authority.
    • Brazil’s Political Structure • Foreign investors advised to note Article 3 of the Brazilian Constitution Article 3 • The fundamental objectives of the Federative Republic of Brazil: • I – to build a free society, justice and solidarity • II – guarantee national development • III – to eradicate poverty and marginalization and reduce social and regional inequalities • IV – to promote the good of all without distinction as to origin, race, sex, color, age and other forms of discrimination
    • Socio-Political Environment • Brazil has a high rate of International clients attracted to the economy. • It's economic and political environment is stable. • It also has a more stable public and private sector and a better-proven legal framework than some other BRIC countries. • Low levels of political risk compared to other neighbouring South American countries. • Political violence is not really an issue. • Companies come to Brazil because the business environment is more familiar than the other BRIC countries (Brazil, Russia, India and China)
    • Market Strategies, Market Segments • Brazil is World's 6th largest economy by GDP (7th by purchasing power). • Brazil has cultivated a constructive relationship with other economical states/countries in pursuit of their respective efforts to promote trade liberalization. • Brazil’s foreign policy plays a more prominent role. Unlike the United States where trade policy is constitutionally defined as the responsibility of Congress.
    • Market Strategies, Market Segments • Brazil’s foreign policy over the past four decades is characterized by competition with the United States. • Brazil implements several schemes to encourage exports, including export financing, insurance, and guarantee programs. • E.g. PROEX, provides incentives to local producers
    • Trade policies • Brazil uses both automatic and non-automatic licences. • Licences for used machinery, equipment, and cargo containers are issued only if no similar goods are produced in Brazil. • According to the Brazilian authorities, absolute import prohibitions are in place mainly for environmental and safety reasons.
    • Trade policies • Brazil has comparatively high average tariffs. Brazil’s average tariff on industrial products is three times that of the United States. • Brazil has a modern, diversified economy, with services accounting for 53% of GDP. • Major producer of steel, aircraft, automobiles, and auto parts. • Brazil’s macroeconomic priorities still constrain trade and other policy choices. The economy is stable, growing at adequate levels to bring about desired development goals.
    • Marketing in Brazil • The most important aspect of the Brazilian market is to understand the affinity between Brazilians and brands. 1. Origin of the brand 2. Reputation of the brand • An increase in the relationship between social media and purchasing and consumptions trends (Facebook) • Blogs and sites of marketing specialists are taken very seriously by consumers and seen as more reliable than the official sites of companies most of the time.
    • Management in Brazil • Renovated interest in a traditional issue: the design and the adjustment of Organizational Structure. • Decision-making in Brazil is often reserved for the most senior people. • In the major cities of Brazil (Rio de Janeiro and São Paulo) companies are accustomed to dealing with international businesses. • In other areas, the business practices may be less international and more patriarchal.
    • Management in Brazil Four-Drive Theory • Brazilian managers perceive their employees to be more intrinsically than extrinsically motivated. • Motivation seems to be a better driver of performance at a typical Brazilian firm Path-Goal Leadership Theory • Directive leadership style due to a low Power Distance in combination with a high Uncertainty Avoidance • Strong hierarchy with control enforced from the top
    • Future Appraisal of Brazil • Banking industry and fund management are very transparent (financial institutions must maintain an 11 percent capitalization rate, compared with 8 percent under Basel regulations other global banks follow.) • The Real currency has been strong and has also contributed to the confidence and credibility of Brazil amongst foreign investors
    • Future Appraisal of Brazil Oil and Gas • Substantial oil and gas reserves are being discovered off Brazil's coast • The country is now the world's eleventh largest oil producer • The government wishes to ultimately enter the top five Sustainable Development • Major expansion of hydroelectric power in the Amazon Basin • Expansion of hydropower: sustainable way to increase energy access and attract more businesses to the country.
    • Five industries to watch… Automobile industry • 2003-2011 - 40 million Brazilians climbed into Middle Class • 2012 - record 3.8 million vehicles sold • 2016 - Experts estimate 6 million vehicles sold by 2016 Government intervention • Automobile import tariff into Brazil 340% • Brazilian government extended tax-break on locally manufactured cars • Foreign companies, local manufacturing
    • Five industries to watch… Automobile industry • General Motors Vehicles • Past 5 years in Brazil, GM has invested over $3 billion dollars • New products, improving productivity, increasing capacity • Manufacturing Plant in Sao Jose Dos Campos • Two hours outside São Paulo • 300 vehicles a day during two shifts
    • Beverage industry • Coconut Water • Water from inside young, green coconuts • Bland, refreshing drink • Filled with electrolytes and potassium • $300 million in retail sale Vita Coco • Coconut water born on the beaches of Brazil • Annual Revenue • 2009 - $20 million • 2012 - $150+ million • Settled a $10 million lawsuit over false claims of nutritional value and health benefits Five industries to watch… • Coca-Cola – $15 million to acquire ZICO (Philippines) • PepsiCo – O.N.E. brand (Philippines)
    • Footwear industry • Havaianas sandals • Known as the world's best rubber flip flops • Comfortable, basic and affordable sandal • Started in 1962, 1 style in 5 colors Havaianas Global Expansion • 1993-94, company sought to be more aspirational and appealing • 2012 – available in 80 countries, over 500 styles • $8 Brazil tickets price • $20 global price - average global markup of 250% Five industries to watch…
    • Biological Agent/Pesticide industry • Brazil is a breadbasket to the world • One of the biggest exporters of coffee, sugar, beef, chicken, orange juice • Pesticides are an issue, bugs are becoming immune • $7 billion pesticide market in Brazil • harmful to the environment and crops BUG: Agentes Biologicos • Genetically engineered bugs to eat other bugs (superbugs) • Cheaper than pesticides, doesn’t hurt environment or crops • BUG team developed an artificial diet for BUG insects • Currently has 3% of the biological agent market now Five industries to watch…
    • Oil industry • 100 Billion barrels, far from the coast and deep in the water • 2006 discover 160 miles off coast if Rio de Janeiro • biggest in three decades • Enough to sustain Brazil for a century • Must be extracted through a miles layer of salt • Technological challenge • Investors expect 5 million barrels extracted a day, 1.5 million of it to be exported • Brazilian government mandate to get parts/labor locally • GE sees this as opportunity for creating industry and demand • Today, only world’s 11th oil producer, buts aims to be in top 5 by 2020 Five industries to watch…
    • General Electric Oil • GE is a firm working along with Petrobras to extract this oil • GE is producing “risers” – giant pipes that can transport oil four miles below salt layer, up to ships waiting at ocean level. • “Sounds simple, but it is a very complex and precise technology that must withstand enormous pressures” • Reinaldo Garcia, CEO, GE Latin America Five industries to watch…