Success of Wrist Watches | Report

Added on - 18 Sep 2019

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ToMr. Allen Writer,CEO,XYZ Watch Corporation,USARespected Sir,The primary purpose of this report is to explain and evaluate the chances of the success of exportingwrist watches to the Brazilian market. The watch would be marketed in the Brazilian market wherethere 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 wristwatches that would be infused with modern technologies including calling options. The wrist watchwould have leather and synthetic bands and the body of the wrist watch would be of metal. Theinception of the idea of marketing such wrist watch to the Brazilian market has taken place inresponse 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 therecent economic condition of Brazil is facing with some particular crises. It must be noted that thefiscal condition of the country has been thoroughly compromised by an amalgamation of highinflation 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 heavyinterference of the state into the market economy has acted as a barrier to trade growth recently inBrazil. The poor government services along with corruption at different levels of government havecontributed to the economic deterioration. It must also be noted that burdensome taxes, undueregulations, poor access to long-term financing, barriers to foreign direct investment (FDI) and a rigidlabor 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 theproduct would be marketed because there is a high demand for wrist watches in the Brazilian marketand in the very sector there is ample opportunity for FDI. The Latin American desire for luxuryproducts like costly wrist watches is still in vogue (Semilof, 2012), and this has encouraged theCompany’s marketing team to put emphasis on the Brazilian market. It must be noted that in theBrazilian market “Watches is expected to record a flat retail value CAGR at constant 2017 prices overthe forecast period” (Euromonitor International, 2017). But this flat rate tendency would be profitingthe marketing efforts of our Company. This is primarily because; the dilemmatic market condition inBrazil 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 greatdegree; still the urge to own luxury items would propel the customers to put more emphasis onpurchasing wrist watches having great features (like luxury watches) in low price. It must be notedthat “Most popular watch models reveal Brazilians preferences for Men’s, Sports and Chronographtimepieces, a segment dominated by TAG Heuer, Rolex and Omega” (Digital Dealer, 2013). Thisprovides a scope for substitution and this would encourage the marketing efforts for our Company’smarketing team.