How to sell for Brazilian markets?
The CALM model
UK Trade & Investment director for Brazil John Doddrell gave a really good tip on how to deal inside Brazil:
Collaboration with people with local knowledge is absolutely critical for
getting established here. Just to come in and think that a British model
will automatically work in the same way is naive. The best way to come
here is to get to know the market, and often go into partnership with
local companies or at least to get advisers on board, who can help
steer through some of the pitfalls and address the issues in the most
Source: https://www.marketingweek.com/2012/02/21 09/breaking-into-brazil/
This is exactly what our CALM model is about. At Quote Translations we will form and deploy a strategized model within the country so you can start penetrating the market with the right partnerships and collecting the correct information. These are the four main areas that we work upon:
1. Channel and distribution
How will your products circulate in Brazil? How will you promote them? How will you distribute your products and sell them locally? You can gather as much prior market intelligence information as you want, but you need to answer these two questions, not with conjectures, but with concrete results. You need to figure out the revenue sources that you are able to conquer inside Brazil, and it can be done through the development of the appropriate business model. In this quadrant we are focused on finding your client basis inside the country, the segment that you must appeal to and also find out who is already in contact with these clients so that they are able to be multipliers of your selling efforts.
a. Physical Products
Exporting products to Brazil will certainly become easier in the next years as the recent external policies are progressively liberating trade with America and the European countries.
If you are selling physical products, it is necessary to understand the retail or wholesale, outlets and shops that will help you distribute your products.
Through the assembly of our task force, we can help you find suitable partners that are willing to try out selling new products or services in the internal market and that are partnership-ready to expand sales efforts in Brazil. We strategically organize optimal teams for your project and assure proper execution.
In this phase of internationalization, it is not yet the right time to build structures in Brazil and start heavy capital investments, nor start producing inside the country and organizing a whole chain. Before such investment takes place, it is better to look inside Brazil and forge an extensive network of partners and then focus on branding and reaching out to the consumers, testing the waters, generating essential information, and at the same time, consolidating the brand among the local population. When you have enough information, you can deploy more investments and extensions of your company.
This is a good way of knowing if a rebranding is required and if the price is adequate. You could also play with price to see at which level you will maximize your profit functions.
A buy-in is also a good strategy in Brazil through the utilization of small deals plus the help from strategic partners. Buying your way in through private capital shares and having participation in the decisions of a key small to medium company is also a sound strategy to get knowledge of operational intelligence, which also means knowing the territory, its geography, political, physical, and cultural organization.
b. Digital Products
In the case of digital products, the channels would be blogs, e-commerce, YouTube channels, reference figures (YouTubers), and so on that could promote the product. Although digital products are borderless, there is not only the preoccupation with adapting language, but also launching the product, distributing through channels and multiplicators that already have access to your audience. Brazil is way past an internet revolution and most homes are
already online, buying, talking to each other, or watching the next viral video on social media. And of course, it is not only about digital products – the internet is essential to most categories of products.
2. Localization and Internationalization
How will the consumers recognize your brand and products in
There is no way of taking a brand to another country without paying attention to cultural aspects. Depending on the product and on the target audience, the brand and products must be adapted or completely rebranded. There are many aspects that come into play – mainly the language and people’s mentality, the common imaginary, the humor tone, words that are used in certain contexts and not in others, words that should be always avoided, etc. The partnerships here consist mostly of a marketing and linguistic professionals team. Channel partners could also help, as long as they are in contact with their target audience and are aware of their needs and wishes.
3. Administration and Management
How will the processes intertwine and generate information within
Brazil? Who will manage the different aspects of internationalization?
How will business owners and managers be aware of how all the business layers are interacting? There must be a summarizing of information that will not only serve for the business’ managers and owners, but also that is required by the government, organizations, and departments that must regulate the business and legal environment. This part of the quadrant relates to all the necessary formalities to get a business up and running and also the feedback loop of the information flow. The information generated in each quadrant must be somehow compiled, stored and then interpreted.
It is necessary that special attention is paid to the contracts and to the legal forms that you find in a country, the relationship with workers, employees and freelancers. Also, it is a good opportunity to consult with our specialists in order to save money when paying taxes, getting the accounting right, and all in all, getting a proper bureaucratic administration and a sound operational management. Here, it is also vital to have the right partners who can navigate all the papers, documentation, and licenses that are necessary to do business. A manager for internationalization through the CALM method can also be used.
Although this part is not essential, it is good to have a broad understanding of the bureaucratic procedures and, as mentioned, at Quote you can have a study for the best
option in your case.
4. Money and Payment Systems
How will currency and payment be managed?
These variables relate to the management of money inside the country, exchange, investment, and also how the population of such a country prefers to pay for their goods and services, that is, which payment gateways are better suited.
a. Payment Systems
Payment systems might be an easier variable to manage when talking about USA and Europe - although there are still some clear differences - but as we go further to other continents, the payment mechanisms have a wider variation of how they function and which are the main means of paying for products and services.
While there is in the USA a dependence on credit cards, in Germany, there is a tendency towards paying through direct transfers. In Brazil, the form of “Boleto Bancário” is also very common. The Boleto Bancário is a ticket emitted by a business that can be paid directly in banks, post offices, or even in supermarkets.
The internationalization of companies that deal with payment systems and monetary and finance affairs is also sometimes tough, for the financial system in Brazil plays a lot of emphasis in stability and control, so that the country becomes immune to financial turmoil.
Besides, there are more than 100 methods of payment in Latin America. Fees, quality, and local availability need to be observed and implemented into day-to-day business in order to receive and make payments. The whole engineering of payment and finance management must be observed alongside the other variables. None of them are isolated; they need to be
working in cooperation with one another, and this is what the CALM model is about – integrating these different variables into one process of effective internationalization.
b. Managing Exchange Rate
A good strategy is not to go short-term on exchange rates and freak out about losing wealth. The game here is to play long run and focus on one thing: developing a sustainable and profitable business model inside Brazil. Banks in Brazil are safe and backed up by national associations of banks, the money can be kept in funds until an appreciation of the exchange indicates that retrieving the profits back to dollars is advantageous, and, in these times, you might get double digit gains on the accrued appreciation of the dollar.
If there is a need to withdraw money from your business in Brazil in the short-term, you may want to look for an exchange expert in order to hedge your position and safeguard you from abrupt variations in the exchange rate. We can also offer you a solution for these matters assembling the optimal partnerships.
All in all, there are many variables that you must pay attention to. You can already use our material and content as a guide. If you want to get sharper on your strategy get in contact with us so we design the optimal strategy.