Brazil Market Entry Paper

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Challenges......................................................................................................3 Target Market……………………………………………………………….4 Projected Sales……………………………………………………………....5 Operations…………………………………………………………………...6 Entry Modes………………………………………………………………...7 Marketing Campaign………………………………………………………..8 Final Analysis……………………………………………………………….9

Introduction
Brazil is by far the largest and most populous country in South America. The country gained its independence in 1822, maintaining a monarchical system of government until the abolition of slavery in 1888 and the subsequent proclamation of a republic by the military in 1889. For more than a half a century a military government ruled Brazil. However, in 1985 the military regime peacefully relinquished power to civilian rulers. Brazil has the largest economy in South America because of its vast natural resources and a large labor pool. In January 2010, Brazil assumed a nonpermanent seat on the United Nations Security Council for the 2010-11 term. In this report the goal of our team is analyze the Brazilian gaming market and to present a successful market entry strategy for the M-Box. Challenges

One of the challenges within the demographics of Brazil for the M-box is the $10,100 GDP per capita of the country (CIA-World Fact Book, 2010). Brazil is a highly populated country ranking fifth in the world, but the people are not typically independently wealthy. The M-box Corporation has to keep the low GDP per capita in mind, to make an affordable console for Brazil. The government within Brazil poses the challenge of offering limited support in the form of grants for edutainment games and simulations. Without government funding the M-Box Corporation will have to seek other form of funding. A challenge within the physical infrastructure of Brazil is in the water off the shore of the country. The International Maritime Bureau reports the territorial and offshore waters of Brazil in the Atlantic Ocean as a significant risk for piracy and armed robbery against ships; numerous commercial vessels have been attacked and hijacked both at anchor and while underway; crews have been robbed and cargoes stolen. The major economic challenge the M-Box faces in Brazil is the extremely high tax rate. Brazil has a sales tax of twenty percent. Games which are six months old in the US are being sold through legitimate vendors at R$250, or around $140 US dollars. The M-Box Corporation has to be able to provide affordable games for the consumers in Brazil. A challenge within the communications infrastructure in Brazil is that only 5% of the population has access to broadband. With this low of a percentage of the population not having access to broadband, it will make the online gaming aspect of the M-Box not as attractive to the Brazilian market. Target Market

Of Brazil’s 190 million people, more than 50% are under the age of 29, with 28% being between the ages of 15 and 29, and an estimated 15% being between the ages of 7 and 14. In past years, game console sales have been estimated at around 600,000 annually, a number which has been on the rise. The current market in Brazil is considered to have unlimited opportunities for growth and development. We feel the market would easily lend itself to targeting no fewer than 350,000 households—a number which does depend on how many members reside in each. The main competition would be from consoles to which the M-Box is most similar— the Nintendo Wii, the Microsoft X-Box 360, and the Sony Playstation 3. However, our plans for manufacture and distribution could give us a competitive advantage over those consoles due to the planned lower costs of the M-Box. The middle class is also an important factor in the target market, as those who are a part of the middle class or higher are more likely to be able to afford luxury items, and depending on a family’s income, the M-Box may...
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