INDEX
1.1
Introduction ...................................................................................................................................... 3
1.2
Market research reports: general versus industry specific .............................................................. 4
1.3
Timeliness of information in market research reports ..................................................................... 4
1.4
Other factors which affect reliability of market research reports for Brazil .................................... 5
1.5
Where to get market research reports for Brazil.............................................................................. 5
1.6
What type of information you can expect to find in a market research report for Brazil................ 6
1.7
Custom Market Research.................................................................................................................. 7
1.8
How to Choose a Custom Market Research Firm ............................................................................. 8
1.9
What types of custom research can a market research firm perform? .........................................10
2.0
Where to find a market research firm to do custom research for Brazil........................................10
2.1 How does market research in Brazil differ from market research in other underdeveloped economies? .................................................................................................................................................10 2.2
Self Scoring Test on Market Research and Reliability Analysis in Brazil .........................................12
2.3 Self-evaluating questions to help you determine your best course of action when it comes to market research in Brazil ............................................................................................................................14 2.4
Conclusion.......................................................................................................................................15
1.1
Introduction
If you are going to initiate business in Brazil, one of the first things you need to consider is market research. There are two major types of market research you can undertake. One is to purchase existing reports and the other is to have a company do custom research for you. The latter is the more expensive option but may be more appropriate considering your circumstances. This module will first discuss existing market research reports. Market research reports for Brazil abound because the country is considered one of the “BRIC” economies. “BRIC” stands for Brazil, Russia, India and China and these countries combined are considered to be on the verge of overtaking the economies of the developed world within the next 50 years. The abundance of market research available can be confusing and as reports can cost upwards of 500 euros, it is best to consider carefully before making a purchase. We will go over how to select market research reports for usefulness, provide suggestions as to where you can obtain them, give an overview of what type of information you are likely to get from them, and determine how reliable you can expect them to be. Next, we’ll discuss the types of custom market research that are available and how to select the right firm for your needs if you choose to go this route. After this, we’ll present a discussion of how market research differs in Brazil in comparison to more developed countries. Finally, we’ll conclude with a self-scoring test to determine how well you have absorbed the material presented herein and a list of self-evaluation questions to help you determine your most effective method for gathering market research.
MARKET RESEARCH AND RELIABILITY ANALYSIS
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1.2
Market research reports: general versus industry
specific Market research reports for Brazil range from the broad overview to the very narrowly specific. Examples of general market research would include reports on the retail industry or business to business services. Narrowing the focus from there, you might find reports such as prepackaged foods or commercial navigation systems. Get even more specific and you can find reports so product specific that they cover topics like “hygiene wipes in Brazil.” What level of specificity you need to target depends on the market reach your products or services have. If you only manufacture or distribute a very specific product you can get away with a narrow report, but if your products or services cover a wide range it’s a good idea to get an overview of the entire industrial sector.
1.3
Timeliness of information in market research reports
Because the world economy is so rapidly changing, it is crucial to insure that any market research reports you purchase are as up-to-date as possible. A report that is two years out of date may mean that conditions have changed greatly, and Brazil’s economy is especially volatile. The country saw record growth in 2007 and 2008, suffered from the global financial crisis in 2009, and began to see growth again in beginning 2010. Some high ranking sites for Brazilian market research indicate that their reports are up to date but if you look at the fine print, they only go up to 2009, which means that they are missing the most recent developments and their forecasts may be based on outdated assumptions. Before spending hundreds of dollars or euros on market research reports, ascertain that the reports you are getting are not past their sell-by date.
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1.4
Other factors which affect reliability of market
research reports for Brazil Besides timeliness, other factors which affect the reliability of market research reports for Brazil include sufficient sampling size and geographical scope. As we noted in previous modules, Brazil is a very large country and it differs considerably from region to region in climate, culture and commerce. Make sure before purchasing any report that it has a sufficient sample size to be statistically accurate and that it covers the area in Brazil you wish to move into, as well as the ethnicities of people you wish to market to.
1.5
Where to get market research reports for Brazil
Following are some suggestions for sites where you can obtain market research reports on Brazil:
www.fastmr.com: this site is recommended because its reports are extremely up-todate
www.euromonitor.com/brazil has a deep selection of reports for the retail and food/beverage/hospitality sectors.
www.reportbuyer.com covers a wide variety of industries in Brazil, including automotive, finance, IT, electronics, consumer goods, manufacturing, leisure products and services, telecommunications, travel and pharmaceuticals/healthcare. In addition, this site organizes its reports based on how recently they were published.
If your product or service is well-defined, you may also be able to find reports on sites dedicated to market research for your industry globally.
For example,
www.displaysearch.com presents market research for digital display products such as computer monitors, televisions and digital signage. This site offers a market research report for Brazil on these specific products. MARKET RESEARCH AND RELIABILITY ANALYSIS
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In some ways, reports generated by sites that are industry-specific like this one may be preferable to reports from general sites because they will have more in-depth information on the specific challenges in manufacturing and distribution for particular products. Finally, a good source of free market research information are government sites set up specifically for the purpose of helping their citizens do business overseas. Following are some examples: www.export.gov: for US companies http://www.nzte.govt.nz for companies from New Zealand
1.6
What type of information you can expect to find in a
market research report for Brazil Besides the issues of sample size and geographical relevance mentioned above, a good market research report for Brazil will give you a comprehensive overview of all the factors affecting your industry, both positive and negative. It should present trends in market performance, determine which sub-sectors of this market will be experiencing growth and why, and specify the market and brand leaders in the sub-sectors and explain what their competitive advantages and disadvantages are. A strong and current market research report will explain recent regulatory changes, transmit industry events that will impact the market such as acquisitions or bankruptcies, and especially note whether or not foreign companies have achieved any penetration in the sector or subsector you are targeting. Brazil’s economy very definitely qualities as protectionist in some ways, with the government constantly providing stimulus and incentives for their own industries.
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In addition, because wealth is highly stratified in Brazil, with the largest number of the population fitting into the poor category, a useful market research report for Brazil will take social class issues into consideration when discussing factors such as distribution. Finally, another important issue to consider when determining how useful market research reports for Brazil are is whether or not the report covers advertising strategies. Advertising in Brazil is a whole different world than advertising in fully developed countries. For example, while in the US and Europe, the effectiveness of television advertising has so declined that world famous brands like Pepsi have moved their television advertising budgets into social media, in Brazil tv ads still have major reach. Televisions are more prevalent among the poor than what we would consider necessity appliances, such as refrigerators, and Brazil is extremely liberal with its regulations regarding television advertising, allowing as much as 25% of programming time to be taken up with commercials. Television advertising in Brazil is thus highly expensive, and largely dominated by major multinational corporations. For this reason, if you are relying on market research reports to provide your entry strategy into Brazil, it is crucial that they cover the area of advertising.
1.7
Custom Market Research
Now that we’ve discussed market research reports thoroughly, let’s turn to the topic of custom market research. If your budget allows for it, custom market research is a highly-recommended addition to any comprehensive marketing plan for Brazil. The reason for this is that while we consider Brazil a “market” in itself, we must constantly remember how stratified it is geographically, ethnically, and economically. If you are marketing a product like television sets you may be truly marketing to “Brazil,” but if your company provides something less universal, such as IT services, you’re not really marketing to the entire country. You need to narrow your scope down to geographic areas where the technological capabilities for IT services exist, and potential clients who are likely to be able to afford them. Having a local market research company on hand that can pinpoint who you are really targeting can be invaluable, and they MARKET RESEARCH AND RELIABILITY ANALYSIS
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are more likely to be able to provide you with accurate information on that narrower market’s specific habits, buying power, etc.
1.8
How to Choose a Custom Market Research Firm
When choosing a custom market research firm, look for one with reach. Make sure that if you are truly trying to cover the whole country as a market, they have people in the field in all the relevant states. If, however, you’re targeting a narrower market, a local firm will be better able to help you than a large company in the capital. Market research firms in Brazil tend to skew towards the industry-specific. If you are targeting the pharmaceutical market, for example, finding a firm that specializes in this area will provide a big advantage. MARKET RESEARCH AND RELIABILITY ANALYSIS
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Other issues to take into consideration when choosing a custom market research firm in Brazil are language and race. Remember, as noted in previous modules, Portuguese is the official language of Brazil but Spanish, French and English are also widespread. To get accurate market research people need to be polled in their own native languages, so multilingual market research firms are preferable. When it comes to race, although Brazil is known worldwide as being racially tolerant because of the prevalence of racial mixing, there is economic and social disparity among the races in Brazil, as well as enclaves of largely unassimilated ethnic minority groups such as European immigrants from areas other than Portugal. People of apparently white ancestry are more likely to be better educated and be better off financially than people who are clearly of African descent. When determining the economic profile of your target customers, race is an unspoken issue, and a market research firm with a diverse staff is more likely to be able to reach a diverse set of clients. Ethnographic research is a major component of marketing research in Brazil, and you will ignore it at your own peril. In addition, many of the market research companies that cover Brazil position themselves as general “Latin American� experts. Brazil, while certainly part of Latin America, is a unique culture and deserves to be treated as such. A firm that specializes in Brazil will serve you better than a firm that is trying to paint the entire Latin American market with one brushstroke. Finally, because there is a large expatriate community in Brazil, especially of US citizens, it may be helpful to work with a company that includes officers from your own country of origin. For example, many large market research firms in Brazil have US offices, and this can cut down on communication problems caused by time zone differences or language barriers.
Ideally,
however, the actual research will be performed on the ground in Brazil and the office that is local to your own country will only facilitate communication.
MARKET RESEARCH AND RELIABILITY ANALYSIS
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1.9
What types of custom research can a market
research firm perform? Good market research firms will provide you with a broad spectrum of methods of market research that includes both qualitative and quantitative data. An example of qualitative data would be to find out what demographic your product is most popular among, while quantitative data would be such information as how many units of your type of product does the typical customer purchase per year. These studies will cover such varied categories as branding, product development, spending habits and usage and attitude studies. Methods may range from focus groups (both online and in person) to collecting secondary data (such as store receipts) to in-depth interviews with representative individuals to get the “big picture” on their opinions.
2.0
Where to find a market research firm to do custom
research for Brazil One
place
to
find
a
good
directory of
market
research
firms
for
Brazil
is
www.directory.esomar.org. You can put Brazil into the search engine and select “directory” there and you will find over 25 firms that can help you with custom market research.
2.1
How does market research in Brazil differ from
market research in other underdeveloped economies? Market research in Brazil differs from market research in other underdeveloped economies in numerous ways. One example is the fact that the state of Sao Paulo, one of the economic centers of the Brazilian economy, has prohibited the use of telemarketers, both for selling and
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for market research purposes. This makes the cost of custom market research higher in Brazil than in other Latin American countries. In addition, there are other regulatory bodies in Brazil which impose limits based on ethical consideration on market research there. These are largely industry-specific but they can make conducting custom research in Brazil more difficult than in other Latin American countries. There is also some resistance among certain professionals to cooperating with market research efforts because of economic concerns. For example, physicians in Brazil charge between $90 to $500 per typical office visit, and they do not wish to take time out of their schedule to assist in marketing research initiatives that pay them a mere token for their time. For this reason, consumer market research in Brazil is more likely to be successful. Conversely, poorer people are more likely to cooperate with market research efforts in order to reap financial reward, and this may skew the results achieved for studies such as taste tests, where they are more likely to report they are happy with the product in order to gratify the person conducting the test. The higher level of literacy and education in Brazil is another factor that makes market research there more expensive. In addition, the exchange rate between the real and US and European currencies makes a difference in the quality of custom market research in Brazil. Brazilian market research firms tend to like to keep their prices stable. When the real compares unfavorably to the dollar or Euro, they will charge the same price but may cut corners in the service department. For this reason, it is recommended that you undertake custom market research studies at a time when the real is strong in order to obtain the best results.
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2.2
Self Scoring Test on Market Research and Reliability
Analysis in Brazil 1. True or false: market research reports for Brazil can cost more than 500 euros. 2. True or false: the more recent a market research report is, the more accurate it is. 3. True or false: ethnicity and race are not important questions when it comes to demographic research in Brazil. 4. True or false: economic status is an important question when it comes to demographic research in Brazil. 5.
True or false: you can find free marketing reports regarding marketing in Brazil on
governmental websites of other countries. 6. True or false: television is not an important advertising medium in Brazil. 7. True or false: language is an issue when choosing a firm to do market research for you in Brazil. 8. True or false: a firm that specializes in Latin America is the best way to get market research for Brazil. 9. True or false: a good market research firm will provide you with both qualitative and quantitative data. 10: True or false: there are some significant barriers to market research in Brazil.
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Answers: 1. True 2. True 3. False 4. True 5. True 6. False 7. True 8. False 9. True 10. True A score of 7 or better indicates that you have properly absorbed the material in this module. If you’ve scored less than that, it is recommended that you reread the previous sections of the module and try again.
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2.3
Self-evaluating questions to help you determine your
best course of action when it comes to market research in Brazil 1. Am I targeting consumers or business-to-business? 2. Do I know what geographical area I wish to target? 3. Is my product or service universal or does it appeal to a more narrow market? 4. If the market it appeals to is more narrow, do I know the geographical location, ethnicity and economic level of my targeted customer? 5. Do I need broad market research, narrow market research, or both? 6. Do I have the budget to perform custom research or will preexisting reports suffice? 7. Do I have a wide range of products and services I want to market in Brazil or is my scope more narrow? 8. If I am purchasing market research reports, do they meet the criteria of being timely, comprehensive and accurate? 9. If I am utilizing outside services for custom market research, do they meet the criteria of being specialists in Brazil and having a wide geographic reach and ethnic diversity? 10. Am I aware of the pitfalls that can occasionally plague market research in Brazil?
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2.4
Conclusion
If you have completed this module you should now have a good idea of the different types of market research that is available for Brazil, how to obtain the best kind for your own purposes, where to obtain it, how to evaluate its usefulness, and some issues to keep in mind when selecting it. In the next modules we will address import and export issues in Brazil.
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