Foreign Market and Market for Energy Drinks Issues - Case Study Example

Market Analysis Name Institution Course Professor Date Introduction The market for energy drinks, in Brazil, is small (Russell, 2012). According to Russell (2012), Brazil had an off-trade of approximately 31m liters of energy drinks volume in 2010, which is just 1% of global energy drinks volume. Nevertheless, in the category of soft drinks, energy drinks were the ones, which had a tremendous growth in 2010, with a growth of 33%. This indicates that the growth of energy drinks in Brazil is anticipated to increase by 14% per year (Russell, 2012). This growth is expected to be at the peak during the 2014 Brazil world cup. What needs to be done to ensure this growth is attained is to ensure that energy drinks are availed, lower price points are adopted, and new positioning are used for this product. This will ensure that the product has the ability of attaining its desired market presence. This will occur since Brazil is thirsty for sport and energy drinks, which mean satisfying this market, will demand allocation of adequate resources from companies and distributors of sport and energy drinks in the country. Brazil occupies 8.5m km2 land. The country is ranked sixth in terms of population with a populous of 185 million people. Among this population, majority are the young individuals while the old occupy approximately 6.2% of the population (Australian Government, 2012). The country is beautiful with fantastic beaches and scenery, which act as tourist attraction centers. Further, the country has low risk with respect to terrorism, war, hurricanes or SARS. Moreover, Brazilian are cheerful and friendly people (Ronnie, 2012). These are clear indications that introduction of a new product (energy drinks) into this country will lead to attainment of considerable benefits to the population and earning of revenues to the marketer and distributor of the product. Actually, energy drinks is a product, which has a higher demand among the young as it is for the Brazilian population, which is composed of young people as the majority. Economic and Financial Environment Brazil economy is characterized of well-developed and large service, manufacturing, mining, and agricultural sectors, which enabled the country to have a presence in world markets. Economic forecasting agency have predicted that the economy of Brazil will keep on growing. This indicates that investment in this country is viable. As such, marketing energy drinks in this country will lead to attainment of benefits instead of losses from the investment action, which will be adopted. Economic development in Brazil is strengthened by the overwhelming performance of export sector and increment of domestic demand of products such as soft drinks. As the international financial environment is changing, Brazil has established adequate international reserves, which have contributed towards sustained growth. Self-sufficiency, in Brazil, has been achieved through the creation of enormous internal markets and diversity of resources. The inflation and interest rates in Brazil are low (Brazil, 2011). This acts as an effective enticement for foreign investment in the country. Moreover, the country has depicted a sustainable growth of its economic and financial environment. As such, marketing of energy drinks in this country will result in earning of revenues to higher levels than expected. This will occur since the economic environment warrants a return from investment in this country. Figure 1 indicates that international reserves for Brazil have being having a positive trend since year 2003. This is a clear illustration that marketing of energy drinks in this country will lead to earning of revenues since economic and financial shocks are not anticipated in near future. This is because the country has safeguarded itself by ensuring that it has adequate and reliable international reserves (Ronnie, 2012). Figure 1: International Reserves for Brazil Cultural Environment In Brazil, education and family are the most significant social institutions. As such, engagement in business activities is seen as just an activity of individuals. However, people have to work in order to earn income, but family is more important than work. This indicates that attainment of labor for marketing and distributing energy drinks in this country could be challenging to some extent (Fletcher, & Crawford, 2011). The population of Brazil is composed of people from different religions and ethnicities. This influences beliefs and philosophy of this country. Further, arts, government, and religion influence the belief system of Brazil. This indicates that in marketing energy drinks in this country, there is a need of ensuring that labor is outsourced from different people with different religion and ethnic backgrounds. This will ensure that the product does not attain a cultural shock as it is being distributed in this new marketing environment. In Brazil, healthcare is very significant. As such, energy drinks product has to be marketed in a manner that it enhances attainment of good health for the people. Failure to do this would result in rejection of the product in this market. Language could also be a sensitive issue in this country. The main language is Portuguese, but other languages such as Korean, Japanese, Italian, and German are essential. These should be embraced by all individuals who will be marketing and distributing the product. Moreover, Brazil is a country, which more sensitive cultural responsiveness. In this, Brazil embraces technological and social changes. This is an area, which has to be taken into consideration as the new products are being introduced into this country. Political, Legal and Technological Environment The political system of Brazil is based on democracy, which ensures that the country is led by a president who is elected by citizens of the country. The country’s national legislature comprises of Chamber of Deputies and Senate. The country has 12 political parties. This indicates that formulation and implementation of various laws and regulations in this country is vested on the political system power. Unfortunately, Brazil presents a political risk to investors (The World Factbook, 2012). This is because the government is often characterized of being engaged in corruption. Further, the country has political instability in it s political system. This is a serious threat for business investment in this country, which will have to be taken into consideration as the energy and drinks product is being marketed. Brazil has a legal system, which is based on Roman tradition. As such, all the laws, which are used in disciplining and regulating various actions and situations, in the country, have to be previously made public and written. Municipalities, states, and federal governments are involved in issuance of laws in this country. Brazil also recognizes various legal documents, which include Civil Procedure Code, Penal Code, Tax Code, and Civil Code. This indicates that staging a business in this country demands that one adheres to various laws and legal documents, which an individual is expected to possess. These bureaucratic legal requirements tend to affect the energy drinks market. This is because prior to venturing into the market one has to ensure that he or she has complied to laws and legal documents of this country. However, this is essential in order to curb the emergence of illegal businesses and noncompliant companies, which may induce unhealthy competition for the energy drinks market. The technological environment for Brazil is characterized of several researches, which are conducted by research institutes and public universities. The findings for these researches are presented in forums and discussion of the same takes place. This compel Brazil to adopt new technological advancements as they occur in society. The country has never being left behind in adopting the new levels of technology. As such, Brazil is a country, which is technological sensitive. Therefore, marketing of the energy drinks product into this region will call for ensuring that new technological advancement are used in order to ensure that people do not reject the product on basis of not adhering to the current levels of technology. Conclusion Brazil presents a favorable, economic, and financial environment for marketing energy drinks product. This supported by the availability of a large market (ensured by the large young population) for marketing of the product. On the same note, the cultural environment for Brazil warrants successful investment in this country. Despite this, several precautions such as cultural shock have to be taken into consideration as the new product of energy drinks is being marketed into Brazil. The political instability, which is present in this country, may distract investors, but measures have to be taken in order to ensure that the product reaches this market. Actually, with coming of Brazil 2014 world cup, the market for energy drinks will expand rapidly. Furthermore, the inherent Brazilian population has not yet being satisfied with soft and energy drinks. This presents an opportunity, which has to be grabbed in time before others realize it exists. Nevertheless, competition is expected to rise for this new market as other major drinks dealers like Coca-Cola Company discover this market niche. Exporting energy drinks product to Brazil will lead to attainment of positive benefits to the population (by satisfying their thirst for energy drinks) and the exporter (by earning revenues from the investment activity). The country will also benefit by getting foreign exchange as this business takes place. Reference List Australian Government. (2012). Brazil Country Brief. Retrieved from: http://www.dfat.gov.au/geo/brazil/brazil_brief.html Brazil. (2011). South America and South Atlantic Islands. Retrieved from: http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/south-america/brazil/ Fletcher, R. & Crawford, H. (2011). International Marketing: An Asia-Pacific Perspective, 5th Edition. Sydney: Pearson Education Australia. Ronnie, L. (2012). Economic Life in Brazil. Retrieved from: http://ronnielucas.wordpress.com/investment-opportunities/ Russell, M. (2012). Just the Facts – Sports and Energy Drinks in Brazil. Retrieved from: http://www.just-drinks.com/news/just-the-facts-sports-and-energy-drinks-in-brazil_id106152.aspx The World Factbook. (2012). Central Intelligence Agency. Retrieved from: https://www.cia.gov/library/publications/the-world-factbook/geos/br.html Read More