Brazil Watch Market Export Feasibility Report

This report evaluates the feasibility of exporting wristwatches to the Brazilian market, focusing on moderately priced watches with modern features. It acknowledges Brazil's current economic challenges, including high inflation and government interference, but highlights the high demand for luxury goods and the potential for market penetration with less expensive, feature-rich watches. The report suggests exporting watches rather than establishing joint ventures due to economic instability and rigid labor markets. It recommends establishing a regional sales center in Brasilia and utilizing television and social media advertising for marketing. The report concludes that the product has good potential in the target market due to the urban customer segment's preference for feature-rich, affordable watches and the presence of large malls.

To
Mr. Allen Writer,
CEO,
XYZ Watch Corporation,
USA
Respected Sir,
The primary purpose of this report is to explain and evaluate the chances of the success of exporting
wrist watches to the Brazilian market. The watch would be marketed in the Brazilian market where
there seems to be a high demand for stylish and expensive wrist watches.
The product that would be marketed in the Brazilian market would be moderately priced wrist
watches that would be infused with modern technologies including calling options. The wrist watch
would have leather and synthetic bands and the body of the wrist watch would be of metal. The
inception of the idea of marketing such wrist watch to the Brazilian market has taken place in
response to the high demand of wrist watches in Brazil and in the major markets of the country.
Brazil has been selected as the country in which the product would be marketed. It is a fact that the
recent economic condition of Brazil is facing with some particular crises. It must be noted that the
fiscal condition of the country has been thoroughly compromised by an amalgamation of high
inflation rates, ineffective political policies, and widening of the budget deficits (www.heritage.org,
2017). These facts have increased the burden of public debt (www.heritage.org, 2017). The heavy
interference of the state into the market economy has acted as a barrier to trade growth recently in
Brazil. The poor government services along with corruption at different levels of government have
contributed to the economic deterioration. It must also be noted that burdensome taxes, undue
regulations, poor access to long-term financing, barriers to foreign direct investment (FDI) and a rigid
labor market have made the economic condition of Brazil an unstable one.
But despite such unstable economic condition, Brazil has been chosen to be the country where the
product would be marketed because there is a high demand for wrist watches in the Brazilian market
and in the very sector there is ample opportunity for FDI. The Latin American desire for luxury
products like costly wrist watches is still in vogue (Semilof, 2012), and this has encouraged the
Company’s marketing team to put emphasis on the Brazilian market. It must be noted that in the
Brazilian market “Watches is expected to record a flat retail value CAGR at constant 2017 prices over
the forecast period” (Euromonitor International, 2017). But this flat rate tendency would be profiting
the marketing efforts of our Company. This is primarily because; the dilemmatic market condition in
Brazil would now pave the way for the penetration of less costly wrist watches with great features.
Though the purchasing power of the Brazilian customer segment has been diminished to a great
degree; still the urge to own luxury items would propel the customers to put more emphasis on
purchasing wrist watches having great features (like luxury watches) in low price. It must be noted
that “Most popular watch models reveal Brazilians preferences for Men’s, Sports and Chronograph
timepieces, a segment dominated by TAG Heuer, Rolex and Omega” (Digital Dealer, 2013). This
provides a scope for substitution and this would encourage the marketing efforts for our Company’s
marketing team.

Considering the dilemmatic condition of the economy in Brazil, it has deemed suitable to ship the
product to the Brazilian markets. Establishing joint ventures in the Brazilian market does not seem
feasible right now and that is one primary reason why the watches would be exported through
shipment. From the supply chain and logistics perspectives, this option seems feasible. Moreover, as it
has been found that there are hindrances and obstructions to FDI, our Company should better not
consider to invest in any joint venture with any Brazilian watch maker for the time being. Hence,
shipping the products to the Brazilian market would be a better idea in this context. Also, as the labor
market is quite rigid in Brazil, the export option would be embraced more feasibly.
The regional sales center would be established it the capital, Brasilia. This would be done in order to
appeal to the urban customer segment. The presence of top malls in Brasilia should support the
decision of the marketing team to establish the regional center at Brasilia (TripAdvisor, 2018).
The product will do good in the target market. This is primarily because of two specific reasons.
Firstly, the urbane customer segment in Brasilia is prone to purchasing costly watches and they would
be inclined to purchase wrist watches with more features and less cost. Secondly, the availability of
large malls would also help the marketing team in promoting window shopping for the wrist watches
that would ultimately trigger the sale of the product.
Our Company should indulge in two specific marketing practices. Firstly, television advertisement of
the product should be launched and secondly, advertisements on social media should be promoted.
Such processes would boost the marketing effort.

References
Digital Dealer (2013). The Most Sought-After Luxury Brands in Brazil. Retrieved January 12, 2018,
from https://www.digitaldealer.com/the-most-sought-after-luxury-brands-in-brazil/
Euromonitor International (2017). Watches in Brazil. Retrieved January 12, 2018, from
http://www.euromonitor.com/watches-in-brazil/report
Semilof, S. (2012). Luxury Watches Breaking into The Brazilian Market. Retrieved January 12, 2018,
from https://www.hautetime.com/luxury-watches-breaking-into-the-brazilian-market/4047/
TripAdvisor (2018). Shopping Malls in Brasilia. Retrieved January 12, 2018, from
https://www.tripadvisor.in/Attractions-g303322-Activities-c26-t143-
Brasilia_Federal_District.html
www.heritage.org (2017). Brazil. Retrieved January 12, 2018, from
http://www.heritage.org/index/country/brazil