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A US Diapers Firms Entry into the Brazilian Market
Introduction
The proposed initiative, the Brazilian market entry of a U.S. manufacturer of disposable diapers, requires particular attention due to the differences in conditions of the two locations. The conflicting views regarding the use of an original advertising message and the responsibility for pricing decisions alongside the trends of the marketplace development might adversely affect the outcome of the project. Therefore, it is vital to clarify the circumstances of the matter to ensure the success of the company.
Advertising Message
The suggestion to keep the advertising message, which has been effective in the United States, unchanged does not seem feasible from the perspectives of cultural and other important factors. The population of Brazil is generally younger; they are characterized by a significant gap in incomes, the tendency to save as much as possible when shopping, and loyalty to their favorite brands ( Advertising and marketing in Brazil, 2020). They also appreciate the quality of goods, accompanying services, and customer support and demonstrate trust in social media when searching for information before purchasing ( Advertising and marketing in Brazil, 2020). From this point of view, the advertising should be modified with regard to the identified specificities, and they primarily include the need for a strong online presence and increasing the attractiveness of the product. The latter can be done by demonstrating the best value for money. Hence, the message should be realigned in accordance with their characteristics, and the failure to do so might lead to a lack of interest in the product in the future.
Pricing Decisions
The pricing decisions in Brazil will also be influenced by the considerations provided above and, therefore, should not be delegated to the local managers. The principal obstacle, in this case, will be related to their desire to readjust the initial price of the product with the markets needs. In other words, they will attempt to make it as attractive as possible. Taking into account the low purchasing power of Brazilian customers, the most optimal solution will be the reduction of the price. However, there are no data attesting to the possibility of a shift in peoples incomes, and this fact defines the probability of failure to raise it in the future. In this situation, the suggested market entry will be unprofitable.
Prospective Development of the Market
The emergence of enormous global markets for standardized customer products within twenty years is likely to happen, but this reason is not sufficient for ensuring the firms growth in Brazil. This event will increase the profits, but the presence of stronger players in the market will not contribute to a rapid rise in sales. For example, at present, Procter & Gamble, Kimberly-Clark, and Unicharm producing diapers are the leaders, and the competition in this field is already intense ( Baby diapers, 2017). Therefore, the current rates of annual growth of the market by 4.90% might not be beneficial for the firm but, on the contrary, enhance the development of large enterprises instead of small companies ( Baby diapers, 2017). Thus, the probability of this outcome does not allow relying on it.
Conclusion
To summarize, the proposed market entry in Brazil will be profitable but only if the required conditions are met. They include the reorientation on local customers in advertising and the refusal from the involvement of local managers who are likely to establish low prices. In this way, the success will be moderate since the potential emergence of global markets realises standardized products will be advantageous mostly for big corporations.
References
Advertising and marketing in Brazil. (2020). Nordea Trade. Web.
Baby diapers. (2017). Statista.
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