Question

A U.S.-based organization that sells household appliances is considering opening stores internationally, starting with Brazil. What are some recommendations based on the following questions?

1. Discuss how you would modify the personal selling approach based upon the Brazilian target market. Provide an example of the specific changes you would make and justify the changes.
2. Identify ethical and regulatory issues that should be considered when marketing in Brazil.
3. Identify cultural and social considerations you should take into account as part of your marketing planning efforts. Explain how these factors make the marketing presented to the Brazilian audience different from what is presented to U.S. consumers.

Answer 1

Before we start with targeting consumers, we should look at Brazilian culture using Hofstede dimensions:

Power Distance, Masculinity, Uncertainty Avoidance and Indulgence is high while Individualism and Long Term Orientation are relatively lower.

Personal Selling Approach:

Sproles and Kendall (1986) developed the Consumer Style Index [CSI] and came up with eight significant consumer styles: H1 - perfectionist, high-quality conscious (quality)

• Individualistic cultures are more quality conscious than consumers from collectivistic cultures (meaning that Americans are more quality conscious than Brazilians ).

H2 brand conscious (brand)

• Consumers from individualistic cultures are more brand conscious than consumers from collectivistic cultures (meaning that Americans are more brand conscious than Brazilians ).

H3 innovative and fashion-conscious (innovative)

• Individualistic cultures are more innovative than consumers from collectivistic cultures (meaning that Americans are more innovative than Brazilians).

H 4 recreational or hedonistic shopping conscious (recreation)

• Consumers from masculine cultures are more innovative than consumers from feminine cultures (meaning that Japanese are more innovative than Brazilians)

H5 price-value conscious (price)

• Consumers from individualistic cultures are more likely to practice hedonistic shopping than consumers from collectivistic cultures (meaning that Americans are more likely to practice hedonistic shopping than Brazilians and Japanese).

H6 impulsive/careless (impulse)

• Masculine cultures are more price-conscious than consumers from collectivist or feminine cultures (meaning that Americans or Japanese are more price-conscious than Brazilians).

H7 confused by over-choice (confused)

• individualistic cultures are more impulsive than consumers from collectivistic cultures (meaning that Americans are more impulsive than Brazilians ).

H8 habitual and brand loyal (loyal)

• Individualistic culture's consumers are confused by a variety of options than consumers from collectivistic cultures (Americans are more confused by numerous choices than Brazilians).

We can loosely base the kind of consumer, based on Hofstede dimensions as follows:

This means the product needs to be a basic but one with many options and priced aggressively so that it is affordable. Brand creation is not a priority as big an issue as Brazilian consumers are more worried about quality and features. Hence production could be done locally to save cost and also looked at selling in the local community markets rather than big retail stores. This is because Brazilians associate more with communities and may prefer to buy items from local stores which they trust more than in a huge mall. Instead of a technical approach, the use of emotion would work better. Showing the product in action and how it fits into your life. The specs need to be there but will be less critical in the decision-making process, while offers and discounts are still important to increase value for money perceptions.

Ethical and Regulatory Environment in Brazil:

Brazil is the 9th biggest economy. It is a developing country with an unstable political system, lagging economy bundled with a weak judicial system. For years, Brazil is plagued with public corruption which has led to political chaos. In 2010, the then President Luiz Inácio “Lula” da Silva of the socialist Workers’ Party went to prison on corruption charges while his successor, Dilma Rousseff, was removed from office in 2016 for budgetary misconduct. Her successor, Michel Temer, was similarly tainted by corruption. With a large majority of voters hoping to see change and restore sanity, stabilize the economy and put Brazil on a path to economic freedom, elected Jair Bolsonaro in October 2018 as their president.

Law and Order had gone for a toss as violence reached a new record with 64,000 killings in 2017. While police could only solve a small fraction of the homicides, few cases of unlawful killings by the police surfaced which further feed the wave of violence. The federal government has failed to publish a yearly report about killings by and of police officers, as ordered by the Inter-American Court of Human Rights in a 2017 ruling.

Another issue in Brazil was the deepening of social and economic inequality. The Brazilian government till 2018 was retreating from global organizations and going back to implementing reactionary nationalism and protectionist policies. Brazil tried reducing poverty since the 2000s, but inequality and unemployment levels still remained very high and in recent years, per capita income plunged and the gap between the rich and poor started rising, wiping out many social gains of the previous three decades. The average monthly income in 2018, of the wealthiest one percent, Brazilians was more than 33 times the income of the poorest 50%. Inequality hinders economic growth, but it also fuels polarization, weaker work ethics, and populism as well.

In terms of working conditions and labor laws, the country does not fare well either. From January to October 2018, the Ministry of Labor identified 1,246 cases of workers who were subjected to abusive conditions. Brazilian workers were increasingly subject to work in "slave-like” conditions, forced labor, poor wages and degrading working conditions. In response to a judicial order, the Ministry of Labor in April released a list of 166 employers on whom it had imposed penalties since 2010 for employing people in “slave-like” conditions, however, the implementation has been poor due to high levels of corruption and bribery in the government.

Cultural and Social factors - Marketing Efforts:

As a US-based consumer firm, one key insight from the above is that people like to follow others, be a part of the group and do not like uncertainty. It means word-of-mouth, reference coupons, and group discounts would work really well in Brazil. Instead of a technical approach, the use of emotion would work better. Showing the product in action and how it fits into your life. The specs need to be there but will be less critical in the decision-making process, while offers and discounts are still important to increase value for money perceptions.

While in the US brand loyalty is high, Brazilians have very low brand loyalty and consciousness. Hence, more than branding efforts, sales and marketing would be given a higher push. Cash discounts and trying to spread using word-of-mouth reference would be the best as it would have a higher connection with the Brazilian consumer. Instead of branding and focus on quality, attention should be on stating the features, cost and probably periodic sale events.