Starting a new business even in the local market is always a tough and very challenging to do. One of the reason why it becomes very challenging is that in every product line, there are almost a number of products competing, unlike before, say like 10 to 20 years ago, product choices are very minimal, which is both beneficial for consumers to choose and even make his own preference. This was also benefited companies, because they can focus on competing only a few players in their product and eventually the more innovative and more anticipative about future needs of your consumer is easier.Unlike today, say in one product line, it may have even more than 10 or sometimes 20 different brands and all of it has the same claim that they are the no. 1 product, which sometimes confuse the customers. But, for some intelligent and smart buyers or consumers, they would still look at the label and since they can afford of trying the other brands, until they finished all, they can easily choose what the best product is truly.
In this paper, it will focus on how companies do a study on the potential success of a product which is Boost power drink in Brazil. This will cover all the important economic study like GDP/GNP ratio and growth rate.Also included is studying the market size, effective marketing strategy, and lastly is studying some of the economic policies and procedures in Brazil, which is important in order to have a better understanding on the country’s economy. Characteristics of target market The country of Brazil which has been highly considered as one of the highly developed country in Latin America. This prominent group of Latin American country has 33 country members and Brazil is the only one among this group that always in the top ten countries in the world in terms of Foreign Direct Investment (FDI).In fact the country has improved its ranking from Rank#7 in 2006, it improves to Rank#6 by 2007 with an FDI Confidence Ratio 0f 1.
78 closely behind Hong Kong with almost the same ratio. This only means that there is always a potential success in doing business in the country and the country hold third highest percentage change in outlook as compared to year 2006, and that percentage of change ratio is 30%, just behind two common giants in FDI, China and India, with 35% and 36% respectively. (FDI Confidence Index 2007, 2007).In terms of Gross Domestic Product (GDP), the country has improved a lot from 882. 5 billion in 2005 to 1.
1 trillion in 2006 GDP report and that gives a GDP growth rate from 2. 9% in 2005 to 3. 7% in 2006 and GDP per capita of 2. 5 by end of 2005, then by start of 2006 up to latter of third quarter of the same year, then reaching up to 4.
6 by October of 2006. In terms of market size, as one of the most populous country in Latin America, Brazil always has a big market to operate. With its 188. 7 million ending 2007, based on the report presented by the World Bank Group.Report also shows that 85% of Brazil is consist of urban population, They have high ration also in access to some of the basic commodities, like water by 90%, literacy and education ratio of 89%. (Brazil’s Data, n.
d. ). But in relation to market study about Brazil, the country at the present is also considered potential for luxury market. This is because of the reasons as well as figures presented earlier that most of the basic and standard products or commodities are readily available, the potential market is now more on the high end products.
Which means that the country is looking for products that are not only new but also will add value to their lifestyle or in other words product that would add more value. This explanation can be supported by the report presented by FAS Worldwide which shoes that about 1. 2 million families in Brazil were recorded in 2005, and that time the average annual income was already $72,000.In terms of geography, which will also be beneficial in studying the market share and its potential, about 73. % of the families were located in the Southern part and 58% of those are in Sao Paolo, this city has been always the main target for business since most of the wealthiest families lives here, with a number just under 500,000 families and following it as far 2nd and 3rd are Rio de Janeiro and Brasilia. This is the trend of the market in Brazil.
(Brazil’s Booming Luxury Market, 2005). Market Screening As to continue on the previous discussion on the current market trend as the country is more engaged on lifestyle rather than traditional products. This should be the main focus of any business that will be coming in the country.Like for Boost energy drink, it should be something that they may have to crave for and not just a simple drinks that will just be added in the displays in many of its supermarkets and convenience stores.
In terms of exchange rate trends, the country continues to make its local currency stronger just like what is happening to most developed countries after the great recession of 2001. The country has slowly making it stable as the year goes on, this is due to its economic developments, most specially in the industry sector and at the same time keeping its world presence in the agricultural sector.In the side of import restrictions, just like other countries where it needs to control its imports while maximizing its exports, the country also applies some of the standard import policies such as import licensing/ custom validation, and also added to that are some of the standard testing, labeling and certification that will ensure if the product is highly credible to local market, and one important requirement is to pass on the sanitary and phytosanitary measures.Price controls, just like the usual country standards, it is also being managed by its government that investors must abide and these policies are only involving on giving local entrepreneurs security in competing against foreign investors and this is being managed by the country’s trade and industry department. As the common attitude of Brazilian market in buying American products, it is not quite that hard for them to be enticed of the products.
The reason is that the market is a mature market with high literacy ratio and definitely knows what is real quality products and again most market are more focus in luxury, lifestyle and attitude that will add to their identity. Products like what is being introduced in this paper, boost health or power drink must be manufactured in a way that targets these requirements.As the country is becoming a global economic leader, that is one of the greatest problem in introducing a new product in this country, most specially in terms of financial strength, this country has it and most of the consumers are not that easy to be pleased and need to come up with something unique and something that will add value for their money and again add to their common lifestyle. In terms of socio-cultural forces, the country is again consist of highly urbanized families that is why living in the city and how the common lifestyle goes with it is very common to these kind of market.Firstly, in terms of attitude, these markets will definitely important to focus into. A product that will give much leverage in their way of life is essential.
Like in the case of Boost power drink, it should focus more on targeting the highest market possible, and that is teen age market, where it brings much attention to other sector and that brings more attitude in the product. Targeting what this teen age market would want and desire is enough to be successful.Language is not also much of a problem, majority of its people speak English, it is also being taught in school. This was also the main reason why the country has a distinctive place in the FDI list of countries where it was the only Latin American country on the top list.
Education, is also a no problem here as 89% of its population are educated, this ratio comes from 15 and above age population. That is why any product should be truly a positive effect for them or else it will surely not take a long time to fail in these very intelligent markets.Export marketing strategies Since most of the people now are health conscious and would do anything for their health. And they would prefer something new that are not that harmful to their health.
At the same time we also see some opportunities when it comes to internet users and product packaging and price. So, these are the main focus of our business. It will target all segments of the population--children, teenagers, and adults--through the entire major establishment, where they buy soft drink.This is truly a beverage people of all ages can enjoy. It is a fun, affordable alternative to the familiar party beverages that are available. Our market segmentation will focus more on areas on potential customers.
The only limitation would be how much the company can provide since we will first test the customers for the first 2 years. In order for the customers to know our product, there will be a series of launchings that will be done to big supermarkets. With free taste and big discounts upon purchasing of goods.The company would also give big discounts to fast food chains and major theaters and amusement centers, that if they transact with the company for at least 20 cases a week, they get 30% discount, valid until the first the 3rd month after its launching.
The target market as based from the charts and table above, we will focus more on the fast food chains, amusement parks and retail stores and supermarket nationwide, but this will be on a trial basis for the first 3 months after launching.For the promotion, it was clear that the company will offer big discount on a per limit order basis, on the place, the company will first target main cities for the first 3 months after launch in order to see first how the product can go, and lastly for the marketing mix in terms of price, it will be a more competitive and wide variety of sizes to be introduced in order to have greater advantage in other competing brands.
