Taking a Product International: Marketing Plan Cellucor Corporation Matt Peterson Madison College
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The International Environment Brazil is the world’s fifth largest country, and the largest country in South America. It is the fifth largest country both by population and by geographical area. It is the largest Portuguese speaking country in the world and the only one in the Americas. Because Brazil’s national language is Portuguese, there is a language barrier for potential business partners. As of 2012, Brazil has the world’s seventh largest economy by nominal GDP and by purchasing power parity. A member of the BRIC group (Brazil, Russia, India, China), Brazil had one of the fastest growing major economies until 2010. The economy of Brazil had been booming unit 2010 when stagnation began to occur, along with inflation and charges of corruption. However, it has been predicted that Brazil will have one of the top 5 largest economies in the decades to come. Because of agriculture, mining, manufacturing, and service sectors Brazil has a labor force of over 107 million (6th worldwide) and an unemployment rate of 6.2% (64th worldwide. The population of Brazil is estimated at around 202,656,788 people with a total geographical area of 8,515,767 km, or 3,287,597 square miles. Brazil occupies a majority of the eastern coast of South America, and includes much of the continent’s interior. Brazil is bordered by Uruguay to the south; Bolivia and Peru to the west; and Venezuela, Guyana, Suriname, and French Guiana to the north. Brazil shares a border with every single South American country except Ecuador and Chile. Brazil also has a very diverse topography, including hills, mountains, plains, and highlands, and scrublands. The majority of this terrain lies between about 200 and 800 meters in elevation.
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The southeast portion of Brazil is the most rugged consisting of complex ridges and mountain ranges reaching up to 3,900 feet in elevation. The Northern part of Brazil is where the Guiana Highlands are, which form a major drainage divide, separating rivers that flow into the Amazon Basin to the south from rivers that empty into Orinoco River system to the North. The highest point in Brazil is Pico da Neblina reaching 9,823 ft. in levitation, and the lowest point being the Atlantic Ocean. Brazil’s climate has a wide range of weather conditions amongst a variety of topography, but most of the country is tropical. According to Koppen system, Brazil has five major climate subtypes: equatorial, tropical, semiarid, highland tropical, temperate, and subtropical. These different climates produce different environments ranging from rainforests in the north, deserts in the northeast, coniferous forests in the south, and tropical savannas in the center. Brazil has been expanding its presence in international markets ad is part of a group of four emerging economies called the BRIC countries. Brazil has been the world’s largest producer of coffee for over 150 years and is the fourth largest market for automobiles in the world. Brazils major export products include aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, iron ore, steel, coffee, orange juice, soybeans, and corned beef. Highways and roads are the primary carriers of freight and passenger traffic. The total amount of paved roads in Brazil increased from 22,056 miles in 1967 to 184,140 in 2002. As far as railroads goes, Brazil has seen a decline since 1945 when emphasis shifted to highway construction.
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There are roughly 2,500 airports in Brazil, the second largest number in the world, after the United States. São Paulo-Guarulhos International Airport, near São Paulo, is the largest and busiest airport with almost 20 million passengers a year, while also handling the vast majority of commercial traffic for the country. Along side airway transport, waterways are also an important way of transport in Brazil.
Company Background and Market Justification Cellucor is one of the top brands in the fitness industry as far as supplementation goes. Fitness supplements are any sort of pills, shakes, or any other remedies to improve your body and/or health. Cellucor was developed primarily by this sole purpose, to give you the best body possible and improve the way you look. All of our products are extensively researched, tested, and retested to ensure our customers optimal results. Our main focus as a company is to make sure every person who buys our product accomplishes their goals, because we care about our customers. We have taken a different approach to the fitness industry and invested heavily into product development and less into advertising. While other companies may be more well known, we promise trying Cellucor will be a life changing experience. We guarantee your satisfaction and look forward to hearing your success story. For best results, refer to our website and reference the weight loss and muscle growth diagrams and learn how to combine products to reach your goals faster! One testament to the quality of Cellucor’s products is the fact that they have been nominated for 12 awards based off of the sales and performance of their products!
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The reason behind Cellucor expanding into Brazil is because Brazil occupies the second place on the list for countries with the most fitness centers in the world. Health conscious people on the quest for a “perfect body” are the reason Brazil is in the top three nations. To put this into perspective, Brazil has over 23,600 establishments open compared to the United States coming in at just around 30,000. According to the Latin American Report 2012, made by International Health, Racquet and Sports club Association (IHRSA), in 2011, the amount of fitness centers increased by 30% and the revenue of the fitness and well-being sector increased by 10%, reaching 2.45 billion. Based off of this income, Brazil is the 3rd largest gym industry behind the United States and Canada. The Brazilian association of fitness centers says that more than 5 million Brazilian, which covers 3% of the country’s total population, attend some sort of fitness center. The great thing about this is that there is a lot of potential growth, considering that nations like the Netherlands and Denmark have 40% of the population as members of such establishments. São Paulo has the greatest number of fitness centers in Brazil, with over 6,400 establishments. This means that there is a fitness center in São Paulo for every 6,445 people who live there. The next largest would be Santa Catarina, with the second largest density in Brazil with over 1,700 fitness centers; one for every 3,487 people. However the gym industry is still a relatively small part of the population, considering the fact that Brazil has almost 200 million inhabitants. The good part about this is that there is a ton of room for growth.
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This sector has been gaining ground and investments, because of health conscious people realizing the importance of doing exercises to have a healthier life. According to a study done by Popular Data Institute, 79 million Brazilians declared to have interest in exercising or practicing physical activity, 54.2% of that 79 million coming from the C social class. This class is responsible for a majority of the growth in the market; now that their incomes are higher, they can afford to attend fitness centers. One trend of this sector is opening up lower cost establishments to cater to the people who are just getting into fitness. A company by the name of Bio Ritmo launched a product called Smart Fit, which offers monthly plans at a discounted rate of $50-$60. Typically the plans were offered at about $250. With Smart Fit, this company was able to reach out to 200,000 members, 130,000 of which came from the new line. Approximately 30% of gym members in Brazil are over the age of 60. One decade ago, this number was guessed to be only 5%. Elderly people contribute to the success of the fitness industry because they tend to be more faithful to the fitness centers. More importantly, this group of people understands that exercise and physical activity is important to have a better quality of life. Being one of the leading producers of dietary supplements, Cellucor needs to take advantage of the amount of people who have a desire for these products. The sale of vitamins and other dietary supplements in urban cities, such as São Paulo and Rio de Janeiro, are driven by the fact that consumers have hectic, stressful lives. Being stuck in traffic jams, pollution and crowded places, like shopping centers and public transportation are just a few of the things the people of Brazil go through on a daily basis.
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Because of the hectic lives these people live, more often than not they end up eating unhealthy during the week, mainly during lunchtime. Because of this, consumers are sacrificing the nutrition you get from a well-balanced meal. To compensate for an insufficient amount of nutrients, consumers turn to vitamins and other dietary supplements to fulfill their nutritional needs.
Adapting the Marketing Mix Product- The main focus of introducing this product is to meet the needs of health conscious people in search of nutritional supplements. Considering the major increases in the fitness industry in Brazil and the potential increases in the years to come, it is foolish to not bring a product like Cellucor to Brazil. Where you see growth in gym memberships and fitness related people, you will also get major increases in sales of products like Cellucor. As far as resistance to innovation goes I don’t think there will be anything to worry about. Yes there will probably be products people haven’t taken before or maybe even heard of, but with the right education and knowledge about the products, it will change the market for supplements in Brazil. Every new product comes with some resistance, but as the product matures in the new market it will work itself out. As far as the packaging goes there should be no issues as far as any color or name changes.
Price- With the cost of living being considerable higher in the United States, our prices in Brazil are going to reflect that. With production costs being lower, Cellucor will be able to get the product to consumers at a much lower cost than in the U.S.
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When our product is first emerging into this market however, we are going to have to take into account how exactly we want to translate the pricing. Since Cellucor has been around so long and is prominent in the United States, bringing Cellucor into a new emerging market should be no problem. Pricing should be a bit lower in Brazil compared to the United States, realizing that all products are going to be cheaper in Brazil. The fact that products are cheaper also reflects the quality of them, seeing as how much of the products made/sold in Brazil will never be sold outside of there because they cannot compete. However, that would be the case if Cellucor were a Brazilian based company that didn’t have to worry about tariffs. The fact that Brazil has such high tariffs to protect domestic companies will certainly drive the cost up. The fact that Brazil has the 7th largest economy and is predicted to grow into one of the top 5 in decades to come shows promise for our product to succeed in this new market. The biggest factor in sales is going to be if Brazilians are willing to pay a little extra for a quality American-made product over what they already have.
Place- The placement of where we choose to sell our products needs to be done carefully to ensure we are reaching our target market. Our products need to be in places where they will reach consumers who are searching for them, or who may come upon them and find a desire for them. Since are sales come from a heath conscious consumer lifestyle, we need to be in places where those people go. Large cities like Rio de Janeiro and São Paulo will be the starting point when introducing our product because of the density of the population.
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These cities are both very large, will be able to move products easily in and out, and São Paulo has airport access. These cities with their large populations also have a lot of fitness centers, the two leaders in Brazil. Cellucor products should be sold there and at any other nutrition stores with retail locations, seeing as how the internet isn’t as popular in Brazil as it is in the United States. However, after doing some research I found that if need be, Brazilian’s can get Cellucor products on the internet. As far as any challenges of moving products it should not be a problem seeing how Brazil has a lot of major highways and the second most airports in the world.
Promotions- Internet is about the only media source that is highly used in Brazil. The problem with television is that there is only 7 national channels and it is said to be the worst you will ever see. However, even though the T.V. shows aren’t that good, it is a good platform to use for advertising. Brazil and the United States both have very similar tactics when it comes to advertising; using television, billboards, street signs, electronic media, magazines and newspapers. Brazilians enjoy advertising a lot more than people in the U.S. do, especially if it is creative. With that being said, apart from translation, Cellucor can use a lot of the same tactics to advertise in Brazil as it does in the United States. Another platform to use would be the popularity of football (soccer) in Brazil. Much like football is popular in the United States, Brazilian’s are always watching on T.V. or attending the games. This is a great way to advertise to a lot of people by putting ads on the way to the stadium, during commercials, or having billboards in the stadium.
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Conclusion- Brazil is very culturally diverse from the United States, but also has some similarities. I wasn’t aware of the technology they had in Brazil before doing research and finding out that they do in fact have some of the same technology as the United States. I also didn’t know that fitness related things would be so big down there, and I was surprised to see that they were in the top 3 countries with the most fitness centers in the world.
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Executive Summary My company that I will be doing this marketing plan for is Cellucor. Cellucor is a company that sells dietary supplements to people who want to live a healthier lifestyle. Their products range from things as simple as vitamins, which can are taken by every day people all the way to pre workouts and protein powders for people who are exercising and looking to recover faster, burn fat, and build muscle. Cellucor prides itself on the fact that they are one of the most well known brands in their field. The problem being solved in Brazil is that people are not getting enough nutrition throughout the day and they need alternative ways to help with that. More often than not the people are not getting a well balanced diet and because of that are not as healthy as they could be. People in Brazil live a very hectic life and have a very busy workweek, so any way to quickly get nutrition into their body is something they are very interested in. Along side the need for Cellucor products, there is also a desire from people who are working out. The country’s market that we will be entering will be Brazil. As I said before, our reasoning for entering this market is because there is a need, and also a want for our product. The rate at which fitness is growing in Brazil shows great promise for an emerging market for our products. Brazil may not have a superior fitness industry like the United States does, but Brazil is very close to the number of fitness centers we have and has a huge probability of passing us in the years to come. Cellucor hopes to be in Brazil to give people a quality product they will enjoy for years to come.
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(1) http://en.wikipedia.org/wiki/Brazil (2)http://www.zoominfo.com/s/#!search/profile/company?companyId=9749192 &targetid=profile (3) http://www.euromonitor.com/vitamins-and-dietary-supplements-inbrazil/report (4) http://thebrazilbusiness.com/article/the-gym-industry-in-brazil (5) http://muse.jhu.edu/journals/advertising_and_society_review/v009/9.2.obarr.html
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