Introduction
The Soreen company was formed 70 years ago by Sorenson family . In the 2003 the brand was sold to interlink foods. Currently the company is employing about 70 employees in their factory and its headquarters in Manchester. The Soreen is a brand of fruity malt bread. The Soreen malt loaf is a commonly sold snack food in the United Kingdom market. It has a sweet taste and an extremely chewy texture which make it a very soft bread. The Malt loaf is mainly eaten sliced and with butter. The company has currently seven malt loaf products on sale in the UK market. The Soreen is exploring the means to expand to new markets and the marketing team have suggested Brazil would be a better target. Therefore, the paper will analyze the Brazil market that Soreen will use to expand its operations. The paper will analyze opportunities and risks under economic issues, political issues and social, cultural & demographic issues among others.
Brazilian Market
The Brazilian market has both risks and opportunities. This is so because it is one of the largest emerging market of the Latin America that has not collapsed and it has many foreign investors with extremely large investment positions in various regions. Reductions in poverty and a movement towards greater income equality are most exciting and significant developments in the Brazil currently. This process, which is gradual and subject to reversal Brazilian society and the county role in global affairs. Brazil has a strong emerging market for the firms which want to expand their operations. Similarly, the country is enjoying many year of democracy that has contributed to attracting international marketing and led to its economic management, and the effectiveness of its social policies. Brazil’s vision of itself as a dominant in Latin America, leader of the global South and significant partner for the United States is a great opportunity for Soreen company.
Economic Environment
While the economy of Brazil has lagged behind china in terms of economic growth, it has higher base of development than China, and has developed an impressive economy. It has more diverse economic structure than in past years, which has promoted growth in the competitive agribusiness sector. Its demographic changes help to explain why the country has improved economic development. The population has doubled from 95 million in 1970 to nearly 200 million today (Alon, 2003, PP. 78). Brazil is in a demographic sweet spot with younger people who will be a significant opportunity for Soreen company because the large population will increase its volume sales. The Brazil is now an overwhelmingly urban society because more than 85 percent of its people lives in cities and others in various part the country because of rapid urban expansion in the core of the agricultural regions. The foreign direct investment has promoted economic growth in the country. The interest of foreign investors in the local market has varied due to government policies as well as internal and external pressures. The foreign markets are the combination of high rates of economic growth in the country of origin of market entrant firms.
However, high rates of inflation will be greater risk for the Soreen company because it affects the transaction activities.
Political environment
The political environment in Brazil marketing includes political factors that can affect the Soreen Company operations negatively and positively (Stone, 2001, Pp. 35). This is so because politics has come to be considered as the significant factor in many international business decisions based on investing decision on how to develop an international marketing plan. Politics are linked to a government attitude to business and freedom within which it allows firms to operate. Political instability in any country exposes foreign businesses to a variety of threats that they would mainly not experience in their home market. This mostly means that the political arena is the most volatile area of international marketing. Therefore, the Brazilian government tendency to change regulations will have a profound effect on Soreen Company strategy to exploit the market because of the opportunities and threats involved. The democracy in Brazil has brought market development opportunities for some but market devastation for others and peaceful environment for neighboring markets (Bennett and Blythe, 2002, 76). Since Brazil is an emerging market it pose high political risks despite following reforms to solve their political problems. The stringency of such reforms has led to civil disorder and rising opposition to government in Brazil.
It is very risky to think of Brazil as a consolidated democracy because it has experienced military dictatorship as a centralized country. These many years of brutal military and economic mismanagement affected the democracy of the country. However, the political leaders who helped to unite Brazilian society around democratic values and society acted quickly to meet social demands in order to prevent a return to the abuses of the military regime. The democracy in Brazil is a good start for Soreen to expand its business in the region. This is so because the government has abolished limits on short-term capital inflows that encourages the various business sector to invest in the country.
The government has made great moves in strengthening the influence of emerging markets in global policymaking institutions, which has promoted its dealings with western unions as well as with regional neighbors (Kotabe, 2009, PP. 98). The government policy toward private businesses and foreign investors are significant in securing a steady flow of funds from abroad, which will enable the country to sustain high economic growth over the years. The Brazilian constitution has given business sector freedoms to establish a framework for regular regulation by separating powers at the federal level and make provisions for universal social policies in the business sector (Onkvisit and Shaw, 2009, 127). This is a major opportunity for Soreen because the constitution will protect its rights in the country. However, a major risk that Soreen will face in the Brazil is weakening of economic activities as a result of political issues. This weakening has been the powerful nominal appreciation of the domestic currency which is threatening the competitiveness of Brazilian products in the international market. Similarly, the politicians have shown skills at changing the regulatory policies of income distribution in the context of the emerging economy. This intends to embrace foreign policies which will attract more investors.
Technology environment
Technology is a significant motivating factor in international marketing and a strategy towards competitive marketing. The advances in the technology are significant in various marketing process (Doole and Lowe, 2008, pp. 89). The opportunity to access information on market, management control capabilities and the practicalities of carrying out the business function internationally are all part of the technology. Satellite communications and the internet have played a significant in the Brazil. Similarly, faxes and advanced telephone networks have all led to dramatic shrinkages in the Brazil communications. This means the country has increased its international marketplace information power. The firms can access information on the key factors that determines the development of product in the market. Similarly, Brazil has introduced wireless technology will facilitate firms' communication.
Despite the history of economic and political upheaval in Brazil, the technology is helping make direct –marketing a popular technique for reaching consumers in various regions. Growing demands of two-income households and the lack of high caliber retailing personnel are driving consumers to interactive internet marketing (Bradley, 2005, PP. 67). This technology is motivated by many of the same economic shifts pushing online marketing in the Brazil. For instance, falling computer prices, growing comfort with online use and growing e-commerce applications such as placing orders for home shopping and paying for goods are opportunities that Sorreen will get in the Brazilian market. However, there are other challenges that technology will pose with the Soreen’s product. The company’s which intend to use this technology will be required to inform consumers about the type of the information it will use in marketing, which will require permission for diverse uses. Thus, the legislation would give the Soreen Company the right to access necessary information, but restrict its use especially in privacy matters
Potential Consumers in Brazil
A middle class market segment in emerging market has been the growth target for the business which want to invest in them. Since Brazil is among largest emerging market Soreen company will target the middle class who spends trillions of dollars annually. The purchasing power in the emerging middle class will be a changing of Soreen Company marketing opportunity in the Brazil. The Brazil’s large population and growing middle class will offer attractive prospects for Soreen Company. This is so because it is the largest apparel market and is growing rapidly. The country is made up of Secondary appeal pre-family and parents of active children, hence Soreen will Soreen Malt Loaf appeal to consumers interested in sport and active lifestyles.
Brazil serves as a test for other emerging markets because by now the consumers in Brazil have more disposable income than other emerging markets. Therefore, Soreen Malt Loaf will target these disposable income earners in order to capture the market in the Brazil. The Brazilian market is serviced mainly by local retailers which suggests opportunities for the entry of foreign firms. There Soreen company will use these retailers to target consumers in local places because most of Brazilians tend to prefer local brands.
The Soreen Malt Loaf in the Brazilian Market
I recommend Soreen company exploit the Brazilian market because the country is politically stable , hence Soreen will have freedom within which it will operate. The country has increased globalization because it is being driven by information technology. Technology is very vital in the development of new product in the market. The online marketing in Brazil will help Soreen to launch the new product in the market. This will help Soreen to re-examine what contributes to its global competitive advantage. Soreen Company has ability to change perceptions from a teatime snack to an anytime occasion, hence it can develop strategies which will enable to respond to these needs accordingly. The company can take advantage of the social trends and changing purchasing behavior of consumers in Brazil by producing appropriate products that meet customer needs. The texture of Malt loaf can give the new product a strong brand recognition in the market. The Soreen Company has a stable financial stability, so it has the resources to put together a powerful marketing campaign for the new product. Its staff will appropriate skills to develop products that will meet the need of consumers and marketing team with the skills to assist promote the new product effectively.
Although Brazil is an emerging market there are threats. Consumers are becoming more experienced and price conscious in that they require intensive sales promotion such as discounts and offers to attract them. Moreover, there is threat of competitors entering the market. The Soreen Company will be required to differentiate its products in order to face stiff competition. The competitive market may provide a negative return on investment based on sales and profits. Similarly, the policies implemented by Brazilian government will influence the development of the new product in the market. A variety of new legislation being implemented currently will influence the implementation of the new product. Interest rate and completion are economic factor that will affect the development of new product in the Brazilian market. The new product will face challenges in its development if the market research is not updated.
Recommendations
The company’s product research and development network ensures to tackle challenges of introducing new products in the international market (Westwood, 2002, Pp. 27). Therefore, I recommend Soreen Company to deal with the international communication, distribution and pricing strategies that support the introduction and the development of Soreen Malt Loaf in the Brazil. I recommend Soreen to develop marketing strategies and activities which will help to achieve the objectives. The Soreen should make decisions on how the company will segment and target the consumers in the Brazil. It should plan on how to position itself in different market segments. Soreen companies should evaluate how it will add value to its efforts via its product portfolio, communications, distributions and pricing strategies. The company should Evaluate and monitor the progress of the new product in commitment to high quality market research that ensure understanding of consumer behavior.
The company should employ training program to educate consumers about the proper nutrition obtained from consuming the new product. This will be achieved because Soreen support various initiatives intended to create the new product awareness. The Soreen Company should focus on the marketing research which will attract new customers. For instance, the distribution of free samples will promote the trial of the new product in the Brazilian market, which will increase the volume of sales. The company should analyze if the product range is relevant to the targeted customers. It should evaluate if there are right sales and distribution outlets to cater for the new product.
Conclusion
In a recap, given the international marketing environment in Brazil, the Soreen Company should use the opportunity to exploit the market. The economic environment is extremely productive for the Soreen Company. Similarly, the democracy and technology are conducive for introduction of the Soreen Malt Loaf in the Brazilian market. However, the company should consider threats such as competition that can affect its international marketing. Similarly, the government regulations can pose a threat for for Soreen Malt Loaf marketing in Brazil.
References List
Alon, I. 2003. Chinese economic transition and international marketing strategy. Westport, Conn.: Praeger.
Bennett, R., & Blythe, J. 2002. International marketing: strategy planning, market entry & implementation(3rd ed.). London: Kogan Page.
Bradley, F. 2005. International marketing strategy (5th ed.). Harlow, England: Financial Times/Prentice Hall.
Doole, I., & Lowe, R. 2008. International marketing strategy: analysis, development and implementation. (5th ed.). London: Cengage Learning.
Kotabe, M. 2009. The SAGE handbook of international marketing. Los Angeles: SAGE.
Onkvisit, S., & Shaw, J. J. 2009.International marketing strategy and theory (5th ed.). London: Routledge.
Stone, P. 2001. Make marketing work for you: boost your profits with proven marketing techniques. Oxford, How To Books.
Westwood, J. 2002. The marketing plan: a step-by-step guide. London, Kogan Page.
