MKT6005 - Global Marketing: Clarks Shoes Brazil Market Entry Analysis

This report presents a comprehensive international marketing plan for Clarks Shoes, focusing on its potential entry into the Brazilian market. It begins with an introduction to global marketing and the Clarks brand, followed by an outline of the marketing plan. The report conducts a thorough evaluation of the macro and microenvironmental factors in Brazil, including PEST, SWOT, and Porter's Five Forces analyses. It then assesses the suitability of various market entry recommendations, such as franchising and direct exporting, and proposes appropriate marketing strategies, including growth and pricing strategies. The report concludes with a summary of findings and recommendations, supported by references. The analysis provides a strategic framework for Clarks to successfully navigate the Brazilian market, considering its political, economic, social, and technological landscape, as well as competitive dynamics.

Running Head: MARKETING MANAGEMENT 0
Marketing Management
(student name)
12-3-2018

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Contents
Introduction......................................................................................................................................3
International marketing plan outline................................................................................................4
I. Evaluation of macro and microenvironmental factors of Brazil..........................................4
PEST analysis..........................................................................................................................4
SWOT Analysis.......................................................................................................................5
Porters five force model...........................................................................................................6
Suitability of market entry recommendations..............................................................................7
Suitability of marketing strategy recommendations....................................................................9
Suitability of marketing mix recommendations........................................................................11
Conclusion.....................................................................................................................................14
References......................................................................................................................................16

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Introduction
Global marketing is not only about trading goods across the nation, it includes promoting
products and services across the globe; they could have foreign offices in other nations. With the
help of technology and the increase in digitalization, even petit organizations are able to trade
using the internet worldwide.
This report will discuss global marketing aspect with Clarks shoe store company case. Clarks is
considered to be a successful shoemaker since 1825 by James Clark and Cyrus (clarks, 2018).
The company tends to go internationally and until now, the company has expanded to various
nations, more than thirty-five nations. The company’s major objective includes the latest design,
innovation, and maximum selling of shoes each year (clarks, 2018). The new target market for
the company is Brazil and the company wishes to expand business in this country. For this, the
report will contain an international marketing plan. The external and internal analysis will be
conducted for the company to enter into Brazil market.
The target market is Brazil, which is a country in South America. The country is popular for its
Ipanema beaches, busy Copacabana, and raucous Carnival festival (Evans, 2018).

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International marketing plan outline
I. Evaluation of macro and microenvironmental factors of Brazil
PEST analysis
To study macro environmental factors of Brazil, For Clarks to expand in this nation, PEST
analysis is as follows:
1. Political factors
The government of this nation is stable and proactive and there is no political instability
is observed recently. Nevertheless, from the history of the nation, it has been observed
that there could be a change in Brazil overnight, as political circumstances lead to head
up to a good extent, especially in the election environment. Corruption is still a major
problem in the nation. Therefore, it can be said that for Clarks, expansion in this nation is
neither too good option, nor bad.
2. Economic factors
If growth potential is considered, it can be said that it is very high for Brazil. The foreign
direct investment inflow is large, and the population is also very large of the nation.
Moreover, the declining gap of poor and reach indicates the improving economy, which
could be a positive point for Clarks to enter the market. In addition, the risk of
devaluation of currency is also reduced by Central Bank, and inflation has also brought
under control. Therefore, considering economic factors, it is advisable for Clarks to
invest into the nation.
3. Social Factors

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A major aspect of social factors is economic inequality, which is twenty percent of the
residents of the nation is under the poverty line. Considering class distribution, there is a
large amount of wealthy population and high segmentation of minimal income group. For
Clarks, a positive aspect regarding this factor is that the nation is very much into fashion
and modernization. The residents are very much interested in purchasing from well
popular and reputed brand and expensive luxurious goods (Ho, 2014).
4. Technological factors
Technological infrastructure is weaker as compared to other developed nations like the
US. Nevertheless, Brazil is rapidly enhancing in the IT sector and it is at 53rd ranking all
over the world. This is not a major issue for the company to invest in this country, as
Clarks can bring technology through other nations for manufacturing of shoes and market
in the nation (Pestleanalysis, 2018).
SWOT Analysis
To analyze the internal environment of the company, SWOT analysis has been conducted for
Clarks:
Strengths
 High-quality shoes
 Competitive prices
 High brand awareness across nations
 Controlled distribution market
Weakness
 Less profit margin due to competitive
pricing
 Competition with similar retailers
 Narrow product range
 Fashion forecasting trends difficulty
Opportunities Threats

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 Product diversification
 Targeting new market/ nation
 Product development
 Global brand recognition
 Price competitive sector
 Various substitute good
 Low switching cost (Boone, 2016)
Porters five force model
For studying industry analysis of Clarks, the theory used is porter’s model. Five forces are as
follows:
1. Competitive rivalry
Brazil holds the third position for leather manufacturing worldwide, which makes this
industry a competitive environment. Some of the competitors of Clarks in Brazil are M
Boots, Kadesh, and Sports shoes range from most recognized brands like Reebok,
Adidas, and Nike. Moreover, it has been observed that in this industry, price
competitiveness is very high. Due to large producers, the companies are competing for
each other with lowering the prices (Porter, 2014).
2. The threat of new entrants
This factor is very relevant, as there is no major restriction in entering into this market.
Due to which, the competition increased every day. This is a major threat to the company,
as a new company with more innovative design can enter into the company with various
intellectual proprietary rights can lead in this industry. Considering this factor, access to
inputs is very easy, and access to the distribution would be limited due to various another
brand, which is leading the industry for years.
3. Threat of substitutes

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Substitute threat for Clarks is moderate because the switching cost is short. The major
substitute for Clark’s shoes is normal sandals produced within the country. Moreover,
nowadays, crocs are also a new trend to the market, which is a substitute for Clark’s shoe
(Khoja, 2016).
4. Bargaining power of suppliers
This force is not a much concern for Clarks because switching suppliers is not a problem,
without decreasing the respective quality product. Moreover, the threat of integrating
forward is low due to entry barriers. Any supplier, which is liable to meet the standard
quality, could be able to supply raw material to Clarks easily. The number of suppliers in
Brazil is very high, which is another reason for bargaining power in hands of Clarks
instead of suppliers (sutherland, 2014).
5. Bargaining power of buyers
Since the competition is high in the industry and switching cost of buyers are not as such.
Therefore, the ball goes into the court of buyers, and the power of bargain in their hands.
Moreover, buyer power depends on brand identity, which is a plus point for Clarks, as it
is a recognizable brand. Nevertheless, there are various substitutes available like normal
other sandals, dancing shoes, and sports shoes of popular brands like Nike. Moreover, the
product range is narrow of Clarks, which makes the customer completely in a position to
bargain. This is the reason for Clarks to offer competitive prices in most of the nations
(Dobbs, 2014).
Suitability of market entry recommendations
For entering into the Brazilian market, the mode of entry recommended to Clarks is:
 Franchising

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According to this entry mode, the owner of the company, or product and services opted to
sell their products across the nation through dealers affiliated. This is the best method or
marketing concept to be adopted by a company that wishes to expand the business,
without taking marketing pressure in another nation or market. The franchising sector of
Brazil is growing since the last few years, the majority of companies that are opting this
mode are from the food industry. For Clarks, this mode is recommended because, with
this, the company can trade their products of same quality and similar design, and in case
any changes as per the local culture of the country are to be made, then it can be done by
the franchise. Out of 183 countries, Brazil “Ease of doing business index” ranked at 126
by the World Bank. Moreover, there are no such legal issues, regarding franchising
process in Brazil. According to statics, the risk of failure of a company with franchise
business is fifteen percent, when compared to a non-franchised company that is eighty
percent (forbes, 2018).
The only con for this mode is that the control is not properly in the hands of the company.
Moreover, the training and quality control is to be maintained by the company. The legal
formalities are also long for franchising (Schewen, 2018).
 Direct exports
Another mode, which is recommended to the company, is direct exporting. Direct
exporting includes the entry to a nation through selling goods and services directly by the
supplier to the end users. This could be done either without any intermediaries, or with
intermediaries like distributors, sales representative, or foreign retailers. According to this
mode, the requirement for market research increased in order to locate a market for
selling the goods and provides services, creating a relation to customers, the international

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distribution system is established, and collection of payments is to do. Direct exporting
depends on marketing ability, company’s size, and exporting experience of the company,
target market conditions (Hennart, 2015).
According to this mode of entry, Clarks can manufacture shoes in the home country or
most feasible country and can directly sell to Brazil with the help of distributors, who will
be held responsible for selling, building customer relationships, and collection of
payment. This method is suitable for Clarks because there is no such restriction in
entering into the Brazil market through direct exporting. This mode of entry is
advantageous because the intermediaries are minimized through this mode, due to which
profit is maximized. The employees can also be of the seller from sale call to retailers at
end market. Moreover, the control is more in case of direct exporting by the company and
can gain more protection for property rights for foreign markets. The only negative aspect
of this mode of entry is a cost that the company occurs for the creation of a completely
new department that is exporting department. In addition, the human resourced cost can
also be high, and with more control, the responsibility increases for the company
regarding the marketing of good into a new foreign market (sharma & Johanson, 2015).
Suitability of marketing strategy recommendations
The most recommended suitable marketing strategy for Clarks shoes are
1. Growth strategy
This marketing strategy major objective is the growth of the company as a whole. The
growth could be either expansion in the product line or product diversification. That is
targeting existing market with new products or targeting a new market with the existing

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product line. Since the company is targeting new international market that is Brazil, the
growth strategy can be achieved by either offering the existing product ranges or the
company can introduce a new product to offer this new market. Since the culture of all
the nations is different, the company can introduce the customization. According to this,
the designs that are more adaptable in Brazil can be introduced and offered to the
customers. This strategy also includes increasing profit, which can be done through the
right decision of mode of entry, targeting right segment of customer, most suitable
distribution system, and enhancing customer awareness in order to reduce the cost to the
company.
For an increase in sales of the company, the marketing includes conveying correct
message to the customers, to create a positive perception to the customer’s while using
various promotional tools (Feng & Chari, 2018).
2. Pricing strategy
While observing the trading of the company in various nations are price penetration
strategy. Which is recommended to be followed for Brazil trading as well. Since the
competition is very high in this industry and price is the major aspect for customer shift
from one brand to another. It is recommended to keep competitive prices in this nation as
well, in order to attract new customers. Price plays an important role in marketing, as the
customers initial two expectation from any barn is quality and worthy pricing. Clarks
have premium quality products, which must be offered to the customer at a relatively low
price.

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Through this strategy, Clarks can enter the competitive market of footwear with other
existing brands in Brazil. It is difficult to influence the customer to leave a brand and
switch to another, the best reason could be the price.
Moreover, from the existing market, it was observed that customer only purchase goods
when they are on a discounted price. Therefore, one of the recommended pricing
strategies is discounting strategy. Through discounting, the customers can be attracted
and that will purchase more and more good. Such promotional tools are best to increase
the sale of the company. This has been witnessed through sales trend from American
business; it was observed that the sales increased to a large at the time of discount.
Customer’s persistent and aggressive attitude has been observed in pricing; therefore, the
company needs to enter with a lower price or discount coupons at first five purchases
(Jaworski, 2018).
Suitability of marketing mix recommendations
For offering products and service in Brazil, the recommended marketing mix includes
1. Product
 The products of the brand include its existing product line that is the footwear collection
for women, men, and kids
 The major focus is on the premium quality product to be offered by the company, for
which the brand is popular
 The company can also offer handbags along with footwear in Brazil market
 Boots are the major product when it comes to both men’s and women style