Brazil

Executive Summary

Brazil is a country with vast ethnic diversity, yet one common language, Portuguese is spoken the masses. This provides international marketers with the opportunity to target ethnic niche markets, or the population as a whole.

However, marketing distribution efforts may be hampered by the poor transport infrastructure of Brazil, thus highlighting the need to develop efficient transportation networks and be strategically located in economically dynamic areas. The ideal location for manufacturing or exporting are the coastal areas where roads and railroads are most effectively established, especially considering that in slum areas, reigns of drug cartels are proliferant.

Brazil’s current growth has seen increased prosperity to the middle-class, which are increasing their demand for domestic consumer goods. This represents the most substantial market for foreign companies wishing to enter the Brazilian market.

Introduction

Brazil is the eighth largest country on Earth and it has the eighth largest population. It is a country characterised by its richness and depth of regional and ethnic diversity. Yet despite this, the Portuguese language provides one common bond, albeit, there are variations in regional accents but no regional dialects.

Although Brazil is the 10th richest country, however it has the biggest polarity between rich and poor. It is estimated that two thirds of the population lives below the poverty line, and one-third are suffering from malnutrition.

The estimated population of Brazil is 150 million, however millions of people live in slums, with no running water or electricity in their homes, access to little health care, and not enough to eat. They mainly comprise of first-, second- and third- generation rural-urban migrants.

Brazil’s poorest region is the North-east, where about 86% of the children from the north-east suffer from malnutrition, and the infant mortality rate is 10%, compared to the national average of 61%. Life expectancy in the North-east is 55 years compared to 65% in the South.

Social inequalities, have reached potentially explosive levels. Cases of food supplies being looted, and riots provoked by failures in the rail system indicate the oppression that the poor face. Furthermore, personal security is a major concern for all Brasilia’s, as the crime rate joined inflation in an upward climb. Heavily armed gangs of drug traffickers in Rio de Janeiro took control of large slum areas, where they even began to furnish municipal services .

Education is compulsory between 7-14 and free in state schools, approximately 2 million children have no school which they can attend . Almost 20 % if the population is illiterate. Education is the primary mechanism for mobility from middle class to the urban elite is primarily attained through higher education. The expansion of higher education and increased public employment have had as almost their sole beneficiaries the middle ranks .

Despite the large the social inequities that exist in Brazil, there is hope that Government policies in the midst of a growing economy can bridge the gap between rich and poor.

Geographical setting

Brazil is the fifth largest country in the world, covering 47 percent of South America. It is essentially a tilted plateau, the highest, wall-like slope is known as the Great Escarpment. The main river systems which originate in Central and Southeastern Brazil are fairly close to the ocean, however the majority of rivers drain inward. This unfavourable river flow means that there is inadequate access to the most economically active areas of Brazil. Furthermore, much of the river systems in the Great Escarpment descend steeply, preventing access by large ocean vessels. As a consequence, there is no direct access from the coastal mountains to the sea. These mountainous plains has made the construction, of railways and highways into the interior, both in the past and present, an extremely difficult and expensive task.

The sheer nature and size of the Brazil’s geography explains why the maintenance of transportation infrastructure is poorly maintained. It also highlights the need for international marketers to establish effective distribution systems. Importers or manufacturers, need to be established around the coast line where the infrastructure is well developed and maintained.

Climatically, the Brazilian varies from tropical weather in northern zones to more temperate conditions in southern states. The Amazon region is characterised by its humidity and high rainfall. Therefore goods supplied to Brazil which are to be distributed nation wide need to be able to accommodate for varying conditions.

The Family

Historically, the family has been the single most important institution in the formation of Brazilian society . This ideal embraces byenlarge upper class families, where traditionally the patriarch was he head of family, however this notion also extends to lower classes. In many cases, three generations often live together in one house. Consequently, products marketed in Brazil which have use to the whole extended family provides a strategic advantage as it has the opportunity to access the mass market.

The Brazilian Political System

Brazil’s political system has been dominated by military dictatorship which existed between 1964 and 1985. Democratically elected governments are currently in operation.

The foremost feature of Brazil’s political-economic system is the deeply engrained tradition of corruption. Corruption has existed since the arrival of Portuguese settlers and it is a well documented fact. Mario Amato, the president of Sao Paulo’s Federation of Industries admitted that “We are all corrupt,” and the formerly prominent individual Antonio Emirio de Moraes, whose family assets are worth billions of dollars, confessed that his company had paid bribes to secure favours from the Collor administration.

In January and April of 1992, despite cabinet changes which attempted to restore public confidence in the integrity of the Collor Administration, allegations of deep-rooted corruption still persisted. The President was still subject to bribery and corruption scandals in May 1992. This effectively signified his political demise.

Amongst many corrupt practices, Collor was implicated for the embezzlement of federal revenues, of which his 1989 election campaign treasurer, Paul Cesar Farias, was principally responsible for. Although Collor publicly denied these allegations, in late May 1989, the Congress initiated a special commission enquiry to investigate the claims, which eventually impeached the President. Collor resigned in December 1992, and in December 1994, charges of ‘passive corruption and criminal association’ were dropped due to insufficient evidence.

Due to the inequality of wealth distribution in Brazil, it is the relatively elite members of society who hold power, and therefore have been the primary beneficiaries of the political system. Entrepreneurs often overcharge the government for the goods and services, they provide, and government officials often receive kickbacks from individuals and corporations doing business in the state. The rot that caused Collor’s presidency to crumble was novel only in its size and scope, in the glare of publicity it attracted, and in the wide-spread outrage it provoked .

The nature and extent of this corruption has severe ramifications for any Australian company wishing to enter the Brazilian market, whether it be importing goods or the establishment of manufacturing sites for goods or services. To overcome the bureaucratic “red tape”, it is highly likely that government officials at all levels- federal, state and municipally, will need to be compensated for their bureaucratic services, although this will vary with the nature and size of the good or service being marketed in Brazil. Furthermore, unless some type of rapport can be established, a foreign investor may be black- mailed into paying exorbitant bribes or else they may face the risk of having their operations either decommissioned or made entirely unprofitable. Therefore the need for Australian companies to enter joint ventures with partner’s who have government contacts is essential.

Religion

Approximately 90% of the Brazilian population are Roman Catholics, which represents the single largest national group of Catholics in the world although a minority of approximately two million Protestants.

For a long time, the Catholic religion has been an integral part of Brazil’s culture. Catholicism emanated from the early colonial period institutionally handicapped . Festivals of a religious nature are not only major public celebrations, but they provide a substantial amount of entertainment for the people. A hybrid religion which combines African and Catholic religions are also common.

Since the late 1960s the, the Catholic hierarchy have byenlarge been critical of both the political policies and the disparities between the benefits reaped by the wealthy, elite from economic growth. Catholic believers who are poor believe that however difficult their path in life is, faith and devotion to a stain can make better some of the harsher conditions in their lives. Another feature of religion is hard work, moral living, and abstention from alcohol and gambling. Given that the masses of the population are religious, marketing messages should not be offensive. For instance, indiscreet sexual overtones or the implicit condoning of immoral behaviour should be refrained from.

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