Developments in Science and Technology
Current Technology Available (Computers, Machinery, Tools, etc.)
Brazil amazes with its rapid economical development and variety of technology devices and machinery available due to science and technology achievements. There are developments in space research programs by the National Institute for Space Research, the National Institute of Amazonian Research, the National Institute of Technology. Among the evident achievements in technology are the Brazilian National Laboratory of Synchrotron Light – created for physics, chemistry, and material science research – and ‘Embraer 190’ – Brazilian aerospace conglomerate’s technology product. Alcantara Launch Center, the satellite launching base is a significant advantage of Brazilian science and technology production.
Percentage of GNP Invested in Research and Development
R&D is the contribution to the technological innovations. The Federal Service of Data Processing, Industrial Research on Technological Innovation (Brazilian Institute on Geography and Statistics) report the data on percentage of GNP invested in R&D, those are: 0.96% GNP. Among the latter are public expenses (0.55%), state expenses (0.22%), entrepreneurial expenses (0.42%), etc. R&D is exercised through the attainment of services, goods and knowledge. The percentage GNP invested in R&D through internal country’s activities rates up to 67% and the external ones are up to 92%.
Technological Skills of the Labor Force and General Population
Brazil is the fifth country in the world according to the population rates. This, however, made government face some problems. Among the issues stated were education and social inequality. The technological skills of the labor force in Brazil are not adequately estimated due to these factors. Teaching has been gradually deteriorating; hence, the level of education influences the economy of the country greatly. The cultural issue of Brazilian men being dominating in all spheres of social life hardens it to develop economy because of women’s problems to get employed, whereas there are very skillful and smart female employees lost this way. Besides, the country has two objectives: to provide the population with technology while many cannot afford tech devices, and reduce the dependence on sources of energy.
Channels of Distribution (Macro Analysis)
This section reports data on all channel middlemen available within the market.
Later, you will select a specific channel as part of your distribution strategy.
Retailers
Number of retailers
Brazil is an emerging world economy player. The country undergoes a small rate of unemployment, though it is not too crucial in comparison to developed countries. The foreign retailers in Brazil have vast opportunities and can operate, start business, work 8 or 24 hours per day and get real estate properties practically without any problems. Many entered Brazilian market through opening of new stores, logistic companies and plants. So, there are 15 major retail companies in Brazil. According to the gross sales (USD) the most prosperous is ‘Companhia Blasileira de Distibuicao’, food retailer – 6.890 USD per month. And the last on this list is D Paschoal with 654 USD gross sales per month. Overall there are 51 retailers gross total, and 32 net total in Brazil.
Typical size of retail outlets
In Brazil the supermarket sector covers about 80% of the entire sales outlet, these are 72,000 stores. The small local stores have been improved to the larger chain stores due to information and retail technologies. The latter comprise identification of customer profiles and, therefore, optimization of the sales and overall customers’ satisfaction. This led to more buyers acquisition and hence stores’ expansion. However, mostly there are convenience stores at gas stations and if the drug stores were considered to be convenience stores, there would be a different market-share.
Customary markup for various classes of goods
The markup for the products and for various goods in Brazil ranges up to 60%. The customer pays for the application of trademark and packaging. The markup reflects the target market, competition, locations’ economics, and customers’ buying capacity. Overall the increase in price is observed and this is called markup for prices – the percentage of the cost added to initial cost. The standard drawback of markup: sometimes it ignores either nature of market or competition.
Methods of operation (cash/credit)
Although the Brazilian credit market is still small in comparison to developed countries, the credit card system is rapidly developing. Back in 2005 the retailers were getting investments from financial institutions, which, in fact, made it possible to develop and improve business. This kind of partnership enabled financial organizations to attract more clients to their services, insurances, credit cards. Now, new PIS/COFINS credit systems ensure that a person pays a tax only on the final stage of each transaction. This appeals to the customers and they are eagerly taking up the credit card payment system in Brazil.
Scale of operation (large/small)
The scale of operation is large rather than small. Local retailers have emerged as solid vendors after the investments of larger outward investors. These developed local suppliers into vendors that can meet quality expectations and standards. So, most segments of marketing in Brazil have multinational companies’ parts. And, so, the small domestic operations have improved into large ones.
Role of chain stores, department stores, and specialty shops
The specialty stores, department stores, and chain shops that have long been a matter of local domestic ownership, have developed into a perspective spot in marketing of Brazil. These small businesses served a starting point for larger investors to invest money and develop the system of operation known nowadays. The chain stores – local supermarkets – had a mixture of convenience store and new retail techniques. In a word, the chain stores, gas station stores, pharmacy shops, and convenience shops served solid bases for attracting large investors to develop larger economic operations.
Wholesale Middlemen
Number and size
There are 23 wholesale companies in Brazil. They operate different kinds of goods ranging from clothes and food to jewelry. Brazilian wholesale market works both for domestic and foreign economy. They export and import goods making Brazil to become the best economic trader among Latin America countries. Martins, for example, a famous wholesaler in Brazil developed its own progr4am for developing and teaching small- and medium- sized retailers. The coaching programs have significantly improved wholesale market and sales technology.
Customary markup for various classes of goods
The customary markup for various wholesales goods ranges from20% to 60% in Brazil. Markup depends on the target audience that is supposed to buy products. The observed increase in price is caused by the brand of the product, the package price, shipping rate (if applicable), and competition rate. If those are dry goods or clothing the margin would be not less than 30%, if this is jewelry to consider, the percent will rise up to 60 %. Overall wholesale market presupposes giving an opportunity to retailers to level up prices further in their business.
Method of operation (cash/credit)
Import/Export Agents
For a long time the local businesses were kept away from imports. The entire tariff was very high for such transactions. The cash predominates today, while import and export agents have lot of business to operate. All payments for importing goods should be made through an exchange agreement. If there are cars, for example, that have to be imported to Brazil, payment is not transferred to foreign vendor in foreign currency. There is SISCOMEX agency that controls foreign trades exercised in Brazil. However, it is cash only, not credit.
Warehousing
Strategic growth in Brazil is exercised through its warehouses that enable many domestic and foreign manufacturers and middlemen to cooperate and do business. 110,000 square feet Manaus opened in Brazil in September, 2010 is a large warehouse that makes it possible to store air freights, sea, and land loads – operated by Penske Logistics Brazil. Penske Logistics is US, Canada, Brazil, and Mexico transportation and stock service.
Penetration of Urban and Rural Markets
Community-based businesses are under threat nowadays in Latin America. The rural markets undergo secession from the overall economic market of Brazil, whereas some authorities regard that rural market is wonderful opportunity to invest finances for further development of business at those areas. Moreover, the population of urban people has increased to 81% since 1991 (75.6%). The country experiences the third cycle of urbanization – people receive job offers and leave their small poor sites for urban and more perspective places.