Brazil Half-Full Half-Empty


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Presentation at Columbia University (NY) - International Affairs Center, Brazilian Studies Program

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Brazil Half-Full Half-Empty

  1. 1. Brazil: is the glass half full or half empty?
  2. 2. <ul><li>Glasses </li></ul><ul><li>The emergent middle class </li></ul><ul><li>Conclusions </li></ul>
  3. 4. Do you see a young lady or an old woman in this picture? It depends on how you look at it!
  4. 5. Do you see a duck or a rabbit in this picture? You can see both !
  5. 9. Depending on the glasses you use, you can better see reality <ul><li>Within the water </li></ul><ul><li>In the darkness </li></ul><ul><li>Very far </li></ul><ul><li>Very close </li></ul>
  6. 10. Brazil 2004: is the glass half full or half empty?
  7. 11. My book Copo Pela Metade aims at: 1.) seeing reality by combining different kinds of glasses, and 2.) to work out an archaeology of the future in order to antecipate trends and create scenarios
  8. 12. Policy Making <ul><li>guidance on social and economic development promotion </li></ul><ul><li>guidance on marketing strategy and tactics </li></ul>Business They share some point of view but use differente kinds of glasses, and many times they see different kinds of realities
  9. 13. Glasses for policy making used by governments, multilateral development organizations focus on <ul><li>Demography: </li></ul><ul><li>vital and social statistics, such as births, deaths, diseases, marriages, etc., of populations. </li></ul>
  10. 14. <ul><li>Demography </li></ul>CENSUS
  11. 15. Glasses for business organizations <ul><li>Marketing Intelligence and Research: </li></ul><ul><li>vital and social knowledge on the different lyfe styles and consumption patterns of society and individual </li></ul>
  12. 16. <ul><li>Marketing Intelligence and Research </li></ul>
  13. 17. More sophisticated methodologies and tools <ul><li>Focal group </li></ul><ul><li>Creative segmentation </li></ul><ul><li>Geomarketing (Geographical Information Systems) </li></ul><ul><li>Adhoc high techtools for scrutinizing people’s diverse life and consumption styles </li></ul>
  14. 18. Análise nacional/regional Análise de área de influência Análise de ponto
  15. 19. Rio de Janeiro, 10 julho 2001 (Jornal do Brasil)
  16. 20. baseada em informações nos Censos de 70, 80 e 91 Fundação Getúlio Vargas divulga pesquisa Mapa do Fim da Fome Temos 50 milhões de miseráveis (29.3% da população brasileira tem renda mensal inferior a 80 reais per capita).
  17. 22. <ul><li>Governments </li></ul><ul><li>Multilateral organizations </li></ul><ul><li>NGOs </li></ul>REALITY DEVELOPMENT MINDSET POLICY ACTION
  18. 23. Are outperforming businesses which <ul><li>Target the bottom of pyramid (bop) segments of the marketplace </li></ul><ul><li>Developed successful business design oriented for clients at the bop </li></ul>
  19. 26. 28 lojas no Rio de Janeiro 2 milhões de clientes ativos no Leader Card
  20. 27. Health insurance for CD strata in the states of RJ and SP: increased the number of clients from 250 thousand to 400 thousand over the last 3 years
  21. 28. How neighborhood supermarket are much more productive in terms of m2 profitability
  22. 32. <ul><li>Aparelho de TV a cores: </li></ul><ul><li>97% domicílios têm </li></ul><ul><li>4 anos de uso em média </li></ul>
  23. 33. Sectorial Production Sectorial Marketing Analysis Income Market penetration of goods and service
  24. 34. Sectorial Production Sectorial Marketing Analysis Income Market penetration of goods and service
  25. 35. Income Consumption What is the picture when one brings the things together?
  26. 36. Income <ul><li>48% does have formal labour relationship </li></ul><ul><li>52% does not have formal or consistent income </li></ul>The issue of the INFORMAL ECONOMY and how it mess up the Census conclusions Poor knowledge
  27. 37. <ul><li>48% does have formal labour relationship </li></ul><ul><li>52% does not have formal or consistent income </li></ul>Better knowledge about the different segments of the society as a whole Consumption and Life Styles
  28. 38. Brasil in the 70s
  29. 39. <ul><li>Affluents </li></ul><ul><li>Middle class </li></ul><ul><li>Poor </li></ul><ul><li>Deprived </li></ul><ul><li>300 thousand households </li></ul><ul><li>2,5 million households </li></ul><ul><li>12,5 million households </li></ul>70 million inhabitants 15 households Consumer society Out of Consumer Society ------------------------- Poverty line ------------------------------
  30. 40. <ul><li>Ricos </li></ul><ul><li>Classe média </li></ul><ul><li>300 mil domicílios </li></ul><ul><li>2,5 milhões de domicílios </li></ul>The major beneficiaries of the “Economic Miracle” of the 70s <ul><li>National Housing Funding System </li></ul><ul><li>Public free Universities </li></ul><ul><li>Jobs in state-owned corporations </li></ul><ul><li>Mechanisms for protecting of savings against inflation (indexation) </li></ul>The subsidies which just a few people are aware of...
  31. 41. Major Forces of Transformation post 70’s <ul><li>Acceleration of the urbanization process </li></ul><ul><li>Acceleration of the industrialization process </li></ul><ul><li>The Civic Revolution </li></ul><ul><li>Economic estabilization </li></ul><ul><li>Globalization </li></ul>
  32. 42. Major Forces of Transformation post 70’s <ul><li>ACCELERATION OF URBANIZATION PROCESS </li></ul>Gráfico 4.1 pg 66
  33. 43. Major Forces of Transformation post 70’s <ul><li>ACCELERATION OF INDUSTRIALIZATION PROCESS </li></ul><ul><li>1950: rural economy 1950 ==> early 90s: 8o. GDP </li></ul>
  34. 44. Major Forces of Transformation post 70’s <ul><li>THE CIVIC REVOLUTION </li></ul><ul><li>amazing increase of the social mobility </li></ul><ul><li>from military dictatorship ==> democratic system </li></ul><ul><li>222.000 NGOs </li></ul><ul><li>Free elections </li></ul><ul><li>Free press </li></ul><ul><li>Ongoing improving of the democratic-civic institutions and system </li></ul><ul><li>A new civic mindset: for the very first time in History the ordinary man has a feeling that playing by rules seems to be worthwhile </li></ul>
  35. 46. Major Forces of Transformation post 70’s <ul><li>GLOBALIZATION </li></ul>
  36. 47. Brazil 2000 The emergent middle class is reaching a critical massa
  37. 48. 178 million inhabitants 46,5 million household Citizen Tax payer Consumer Client is king!
  38. 51. The New Brazilian Middle Class Former Middle Class The New Middle Class Emergent Middle Class
  39. 52. The economic estabilization repositioned almost overnight the life style and the consumption patterns of the popular strata in terms of <ul><li>Purchasing power </li></ul><ul><li>Purchasing habits </li></ul><ul><li>Capacity to plan </li></ul>
  40. 53. The CDE share of national consumption (76% households) <ul><li>64% of food </li></ul><ul><li>58% of personal care and household products </li></ul><ul><li>58% of appliances </li></ul><ul><li>51% of vestuary and shoes </li></ul><ul><li>50% of household construction reform </li></ul><ul><li>43% of personal services </li></ul><ul><li>64% of pharmaceuticals </li></ul>
  41. 54. The message for the business players is easy: No one is leader without being leader with CDE strata
  42. 55. Changes in household patterns <ul><li>Family average number of members has decresased dramatically </li></ul><ul><li>Improvement of the women social and economic condition </li></ul><ul><li>Two breadwinners instead of one... </li></ul>
  43. 56. The society as a whole has been striving to improve its life not only after the Real Plan implementation.
  44. 61. Penetração eletroeletrônico 2000
  45. 62. Fonte: ANEPE/ABIPEME/IBOPE 1998
  46. 63. Corporations are le a r n ing to develop a business design more oriented to the needs of CDE strata
  47. 64. Government won’t be able to deliver good quality services to everyone The truth that people are starting to realize is...
  48. 65. A and B are already paying for education and health services (although they still have non-paid university what means that. 55 public governmental university draw 70% of the budget of the Education Ministry) .
  49. 66. CDE are in a hurry to improve their life
  50. 67. Exemplo: Educação A/B C D/E Distribuição da População Economicamente Ativa (milhões) por Grupos de Anos de Estudo e Classe Econômica
  51. 68. Fonte: PNAD 2001/IBGE
  52. 69. Fornecedores Produção Logística Canal distribuição Esgota-se o ciclo da “Economia de Produtos”
  53. 70. Valor Agregado Produção Logística O cliente quer soluções <ul><li>Preço </li></ul><ul><li>Conforto </li></ul><ul><li>Conveniência </li></ul><ul><li>Atendimento </li></ul><ul><li>Economia de tempo </li></ul><ul><li>Qualidade </li></ul><ul><li>Relacionamento </li></ul>Canal Distribuição Economia de Serviços: o famoso “Foco no Cliente”
  54. 71. Transporte urbano
  55. 72. Conclusions <ul><li>Lack of vision the need to integrate business and goverment knowledge to forge a new development consensus </li></ul><ul><li>Opportunities (infrastruture, education, health, public services, etc) </li></ul><ul><li>Challenges </li></ul>
  56. 73.