This document outlines a presentation for Indigo Books & Music to expand into international markets. It discusses researching potential markets of Brazil and Chile, including country profiles of their economies and book industries. Research objectives are described to analyze opportunities in each country and assess competitors. A hybrid research methodology is proposed, combining interviews, surveys and secondary research. The document analyzes cultural dimensions differences between Canada, Brazil and Chile. Finally, it describes analyzing the data, competitive intelligence on local book retailers, and a conclusion to initially expand into Brazil given its larger book market and later expand into Chile.

1. FINDING
Indigo’s
Niche
IN BRAZIL
AND CHILEPresenter: Arundati Dandapani

2. Agenda
1. Who or what is Indigo Canada?
2. What is the problem?
3. Where are the new markets?
4. What are Indigo’s objectives?
5. Scripting a new research methodology
6. Analyzing the research
7. Market and competitive intelligence
8. Indigo now vs. Indigo tomorrow? (Old markets and new)
9. So what?
10. Q & A / Photo op

3. Canada’s largest bookstore is A
retailing First!
Enrich your Life

4. INDIGO STORES CANADAWIDE
• Chapters, Coles, Indigospirit, SmithBooks, The Book Company
• 92 superstores (10X small stores sq ft.)
• 140 small format stores
• Over 5 million book titles
• Approx. 7000 employees
• Entrepreneurial: started up Kobo, tie ups with Mattel/American
Girl
• Price of Kobo Touch WiFi US$139 (same as Amazon Kindle)

5. CEO & chief book lover
Heather Reisman, 66
“We don’t care whether people read books physically or digitally!”

6. CANADA DOMESTIC BOOK
SALES
• Monopoly excludes Quebec where Archamebault and Renaud-Bray independent
bookstores hold most market share
• Sales exclude educational texts
• Independents: campus stores, large book departments in grocery stores, and
used bookstores
• Non traditional retail: Wal-mart, Costco, etc.
• Online booksellers: eg. Amazon, Smashwords, brick-and-mortar online affiliates

7. INDIGO MOBILE APP

8. Research Problem
Management decision problem:
How can Indigo expand its line of operations to restore a flagging
bookstores business by entering foreign markets? How will the
company compete internationally and what elements of its
international marketing strategy are pegged to make Indigo a
“retailing first” in the industry?
Marketing research problem:
How will Indigo make its first choice of foreign market entry
between the potential markets of Brazil and Chile and what will be
the implications for the launch of the company’s first global
operation outside Canada?

9. Country profilE Brazil
Large and well-developed agricultural,
mining, manufacturing and service
sectors; Brazil’s economy outweighs all
South American countries’ and is a fast
expanding presence in world markets.
Exchange rates:
reals (BRL) per US dollar -
2.153 (2013 est.)
Labour force: 107.3 million
Unemployment rate: 5.7%
Telephone users: 75.9 million
Internet users: 76 million
Languages: Portuguese
210 languages, 180 indigenous

10. Research Objectives: Brazil
• To analyse the advantages of setting up a new chain store in
Brazil by extending Indigo’s operations to Brazil
• To analyse key regions within Brazil where Indigo’s chain will
operate
• To assess the retail experience (including sales platforms and
marketing mix) offered by equivalent bookstores in Brazil and
gain insights from competitor and competitive analysis
• To develop a blueprint and timeline for the setting up of
IndigoBrazil including online affiliates like indigo.br
• To generate branding communications for IndigoBrazil, a
uniquely Canada-Brazil partnership and an international
retailer to reckon with

11. Country ProfilE Chile
A market-oriented economy
High level of foreign trade
Strong financial institutions
Strongest sovereign bond rating in
South America.
Labour force: 8.367 million (2013)
Unemployment rate: 6%
Inflation (consumer price): 1.7%
Exports: $78 billion
Imports: $76 billion
Chilean pesos per US dollar:
491.7
Telephones: 3.27 million
Internet users: 7 million
Languages: Chilean Spanish

12. Research Objectives: Chile
• To analyse the advantages of setting up a new chain store in
Chile by extending Indigo’s operations to Chile
• To analyse key regions within Chile where Indigo’s chain could
operate
• To assess the retail experience (including sales platforms and
marketing mix) offered by equivalent bookstores in Chile and
gain insights from competitor and competitive analysis
• To evaluate the pros and cons of doing business in Chile as a
Canada’s largest book retailer (keeping in mind the ease of
starting up here)

13. Hybrid Methodology
Brazil
•Face to face intercepts and door to door interviews seeking
people’s views on what are the kinds of customer experiences
being sought in towards the different, seeking awareness of
local books, global books, link to culture
• Internet shopping habits and satisfaction surveys online
•Secondary research
Chile
•Similar to Brazil, but will account for cultural and linguistic
differences
•Online Internet retailing habits satisfaction surveys
•Secondary research

14. Hofsted’s Model
Brazil vs. Canada

15. CHILE VS. CANADA

16. Analysis And TESTS
• Correlations between book buying rates and age groups, regions,
languages spoken
• T-tests for means to test for variation in book sales among and
between groups
• Logistical regression between time spent on the internet and
reading or purchase of ebooks and books purchases online and
drivers of satisfaction with retail experience
• Multi-collinearity tests between the impact of several factors
(ambience, culture, type of books, technology, accessories sold,
pricing, deals, toys and family store features, etc.) on repeated
customer visits to a bookstore
• Determine predictors of technology adoption
• AlphaCronbach’s test for reliability

17. Competitive Intelligence
Book Retailers in Brazil
US $3.3 billion book market
Livraria Cultura (“Bookstore culture”)
Saraiva (largest bookstore) might be
taken over Amazon?
Over 56.2% of retailer’s revenues come
from non-book sales! (USD 399 million)
Indigo should partner with Saraiva
online to cash in on online revenues
Book Retailers in Chile
Mostly small internet businesses
E-commerce: small-scale online
marketplace for utility-based books!

18. Conclusion action plan
Go after Brazil now: 3.3 billion US dollar market
Hit the chain bookstores
Seek unique partnerships
Community building is key to sales in Latin America
Translations
Tackle Chile next: as a companion market, following on the heels
of Brazil
A good immigrant, and commuter population, urban, literate, but
largely ONLINE population

19. See You IN Brazil 2020!