Market Entry Strategy for UNIQLO in the Brazilian Retail Sector

This report provides a comprehensive analysis of UNIQLO's market entry strategy into the Brazilian retail market. It begins with an executive summary highlighting Brazil's developing economy and the potential for the retail industry, particularly in fashion. The report details the selection of Brazil as a target market, emphasizing its coastal climate, fashion-conscious population, and growing retail sector. The report analyzes the competitive landscape, identifying key competitors like Zara and GAP Inc. The chosen entry mode, foreign direct investment (FDI), is justified by its advantages, including avoiding trade barriers, leveraging low-cost labor, and gaining control over operations. The target market is identified as young, urban Brazilians, and marketing objectives are outlined, including sales targets, store visits, brand awareness, and online shopping. The report also addresses the need for UNIQLO to adapt its product quality and fashion designs to meet the preferences of the Brazilian consumer, and the final recommendations made to ensure success in the Brazilian market.

Executive summary
Brazil is a developing country that is doing great especially in the retail industry. People in
Brazil also have a unique sense of fashion especially because of the climate conditions they are
exposed to. Being a costal country, the climatic conditions are hot and humid. They thus have
light dressing and prefers brightly coloured clothes. UNIQLO has selected this country for
investment due to the developing status of the country. The mode of entry into the Brazilian
market will be foreign direct investment. This means that the UNIQLO will acquire facilities and
even equipment needed to manufacture the fashion clothes in that country. They will also
employ the use of low cost cheap labour available in the country. Moreover, they have a ready
market of the youths in the buran areas who they choose as their target market by help of local
talent from employees they employ. This is because the local population has more knowledge on
the way things work in their country. They can thus provide the company with knowledge on
how to go about to ensure that they succeed. Brazilian youths are in need of fashionable products
which are of high quality and the company can supply them through various adjustments which
is a benefit to the company. There are various objective the company has and include reaching
sales of £1m in the first 12 months, attracting 2m visitors to the store in the first 12 months, and
store opening. Moreover, achieving 10% brand awareness and recognition and establishing and
promoting online shopping. Strategies to achieve these objectives are discussed and final
recommendations made.

III. Country selected
Brazil is among one of the developing countries which have a huge economy. It is located in the
coastal region and as a result, the climate there is hot as well as humid. The Brazilian retail
industry is developing which makes it a great target for international businesses willing to
venture in the retail market there. For instance, the Brazil retail industry total revenue in the year
2013 averaged 41.6 billion US dollars. This was a seven percent growth from the year 2009 and
it is projected that as the country grows and develops, so will its retail sector (Lakatos & Fukui,
2013). However, due to the developing state of the country, their communication and
transportation sector is not well developed. The company will thus have issues to accessing
different areas as well as with their marketing strategy which will require to be modified to fit
the target country.
Brazil has most of the people living in the major towns. Moreover, it has a high percentage of the
population as youths. The people of Brazil, regardless of the age, have the taste, preference, and
eye for fashion. This is especially due to the climatic conditions of the place which gives room
for them to be fashionable and dress simply but nice. Moreover, they have a high per capita
income which means that their disposable income can cater for the various needs of fashion
wear. The market size is thus huge and there is much potential for the company to perform better
if the right marketing strategies are implemented.
The main competitors that the company faces are Zara and GAP Inc. these are well recognized
brands not just in the Brazilian market but also in the global market. They have a lot of different
stores all over the world. For instance, Zara has more than 2000 store all over the world some of
which are in Brazil. GAP Inc., on the other hand, has more than 3300 stores all over the world
and some of them are located all over Brazil. Competition is thus quite high and UNIQLO

marketing team has to step up and do a lot of brand awareness, promotion and advertising so as
to give the company an opportunity to compete with these two competitors.
Furthermore, their brands are also well established in the Brazilian market and thus target
customers already feel comfortable with these brands. This makes it a bit more challenging for
the company as it will be going up against the most established brands in the region. Moreover,
these competitor companies, Zara and GAP Inc. do not just target one segment of the population.
Rather, they have products for every person and they segment their market and products
depending on the age group. UNIQLO, on the other hand, just targets the youth which will make
it harder to deal with the competition as the competitors offer a one stop shopping place for the
whole family and people of all ages.
IV. Entry Mode Selection
The entry mode selected for this company is foreign direct investment. This is whereby the
company transfer funds from the resident country to another country where they purchase
physical capital which includes factories, machines and other equipment they require to work
and manufacture products for sale in the that domestic market. This is the market entry mode
which UNIQLO will implement for entry into the Brazilian market. There are various reasons
why this is the best entry mode. First, it helps the company avoid tariff barriers as well as the
other non-tariff barriers which the country imposes as a barrier to trade and protection of the
domestic market. Since the company will be producing in the country, they will not be subjected
to barriers to trade which occur while importing (Varghese, 2014).
Moreover, the company will take advantage of the low cost cheap labour available in the
country. Brazil is a developing country. It also has a huge population. As a result, there is a lot of

labour available as the unemployment rate is also high. The cost of this labour is also low as
opposed to other countries where labour is expensive. Furthermore, the company can use local
knowledge from the employees they employ to learn how best to venture into the domestic
market in Brazil. Foreign direct investment entails company establishing a firm in the local
nation. They thus have to employ local employees as importing labour is expensive and the
country regulations requires foreign companies to employ local employees. By so doing, they get
an opportunity to exploit the knowledge these local employees have in regard to the domestic
market and the target consumers. This provides them with an opportunity to learn what they
require to do so as to compete fairly and thus offers them a competitive advantage over exporters
of commodities to this nation as well as other competitors (Pettinger, 2016).
Foreign direct investments also allows the company, in this case UNIQLO, to have a high degree
of control over their investment. This is not the case with other entry modes such as mergers and
acquisitions or even joint ventures. Through foreign direct investment, the company retails sole
ownership of the company. This allows the company to have all the control over the company’s
operations. It also means that the company’s management makes the decisions on their own
without having to share this power with another group. By so doing, they can determine what is
best for the company and work towards the achievement of the set goals without any
interference. Moreover, it allow them an opportunity to be more flexible and easily change the
strategies that are not working as required without taking too much time. In the cases of joint
venture and other entry modes, the company management would require to call for meetings so
as to discuss changes that are required to be done which can sometimes take time due to
unavailability of all required personnel. However, in this case, the company can make immediate

changes as and when they fall due since the management team is flexible and understands the
importance of the need to be more flexible (Amadeo, 2016).
V. Target Market
Young people, that is both male and female Brazilian youths, are the target market for UNIQLO
Company. These are especially the young people who live in the urban areas since these is where
UNIQLO will have most of their stores in Brazil. This is due to the fact that young people are
more sensitive when it comes to fashion as compared to people of other ages. Moreover, they are
the people likely to purchase fashionable products as they wish to keep up with their fellow
young people all over the world. The youths living in urban areas are especially more fashion
sensitive than their counterparts living in the rural areas. They are thus likely to purchase more of
UNIQLO Company products since they are fashionable clothes and they focus on new as well as
the latest trends in fashion.
UNIQLO outsources the manufacturing of some of their products to a company in china. This
gives them the opportunity to enjoy a low cost production of their fashion clothes. However, this
also contributes towards the quality of the produce. Low and cheap production contributes to
lower quality of the products the company gets in return. When the company goes to business
with their lower quality products in the Brazilian market, they are bound to fail. Some changes
needs to be done so that they can manage to compete in the Brazilian market (Jin, Chang,
Matthews, & Gupta, 2012).
For strata’s, the people of brazil, especially the youth in urban areas who are the target market,
are sensitive not just to price but also to quality of the product they purchase. Therefore, if the
company brings a lower quality of products to the Brazilian market, the youths are bound to opt

for other brands other than UNIQLO because the products they get are of higher quality. This is
one of the changes that UNIQLO requires to change. They are used to selling lower quality
products although the products are in line with the current trend of fashion and many people like
them since they are cheaper. However, the Brazilian market is a bit different. Although they have
an eye for fashion and they like the latest fashion line, they also care about quality. And since
there is little differentiation in clothes products sold all over by all fashion companies, brazil
youths are more likely go for products from GAP Inc. and Zara among others. To fit into the
market, therefore, UNIQLO will have to change their production so as to ensure their products
are of a higher quality as demanded by the young males and females in Brazil urban areas.
Brazilian youths, and Brazil population in general are fashionable. They like fashion and most
especially they are more fashionable than people from other regions. This means that is
UNIQLO are to have a competitive advantage over their other competitors, or even have a
certain percentage of the market share in Brazil which will lead to success of their business, they
have to produce more fashionable products. In the past, UNIQLO has been known for producing
basic designs. However, they have to step up and focus more of their designs. Other than just the
basic designs, they have to focus on production of fashionable designs which follows the latest
trends in the fashion industry. Doing so will buy them good will with the young males and
females in the urban areas who are their target market as they produce products suited to the
customer’s needs and wants. This will thus impact greatly on their success as a brand and as a
company.
Young people like being in the spotlight. They like wearing the latest fashion clothes and
especially before their friends so that they can show of their good taste in fashion. They thus
need a store or Fashion Company that avails these clothing’s for them in the best quality and a

fair price. UNIQLO has these products although they need to improve of various strategies so as
to enable them provide these products as per the customers’ needs and wants. This is thus a
benefit to the company. Availing this products ensures that the business succeeds.
VI. Marketing objectives
To reach sales of £1m in the first 12 months.
UNIQLO is japan based clothing apparel company. To reach this amount of sales, the most
important step the company should take is customer satisfaction. This can be achieved through
various ways which include;
High quality products: The Company will improve its service by offering a better quality product
at a lower price.
Great customer care: The staff of the company will be friendly to the customers. Doing so helps
them relate easily with the customers and thus the customers feel comfortable coming again and
again to the store all their wants and needs are fulfilled by people that know how to relate well
with customers.
Satisfying the customers means they chose the store for their shopping every time they want new
clothes. This is helpful and it leads to customer loyalty and aids in improvement of business
performance which is attributed to the increased revenue of the company.
To attract 2m visitors to the store in the first 12 months
This will be achieved through opening the store in a convenient spot. Before choosing the proper
place UNIQLO will have to consider their style of operation entirely. Convenience is everything
to customers. Therefore, customers tend to shop in areas which are more convenient to them for
instance, in a shopping mall where they can buy all they want then be on their way. They also
check for accessibility and parking as they do not want to leave their cars on the streets while

shopping where they are not aware of security. Furthermore, the company will consider
advertisements on television, newspapers, as well as billboards all over Brazil so as to show
people the commodities offered. This will raise curiosity among many people and thus wish to
visit the store to see what is offered. This leads to more visitors to the store and more revenue for
the company. Celebrity casting is another way through which the company can get more people
to the store. A famous and influence celebrity in Brazil will be dressed by UNIQLO and through
this kind of advertisement the flow of customers to the store is bound to increase.
Store opening
The mode of entry that the company chose is foreign direct investment. This requires that the
company have a physical store where clothes and textiles will be sold from. Therefore, one of the
marketing objectives for the company is to open a store. The location of this store will be in an
area that is convenient for all customers. The location will also be assessable to all so as to
ensure that there are more people coming into the store each and every day.
A. Brand awareness and recognition – to create brand awareness and brand recognition so
that 10% of the market recognises UNIQLO.
Brand awareness and recognition aids in the performance of the company. This is because when
people are aware of a brand and they recognise it, they prefer it over other brands and thus
become loyal customers. This increases the flow of revenue to the company thus leading to better
performance of the company. UNIQLO thus aims to make the brand known and recognisable by
to many people in Brazil. There are various strategies that will be used to achieve this. First is
celebrity casting whereby UNIQLO will selected a well-known and influential celebrity to be the
face of the brand. This will help the people associate the brand with celebrity and thus recognise
it every time and choose it over competitor brands.

Another way is through better market positioning. This will be done through substantial
advertisements in various outlets. For instance, billboards will be erected in town centres.
Newspapers will also have brand advertisements. Television and radio channels will also be used
to advertise the brand. Better quality of products and great customer service are also ways
through which market positioning will be achieved which will help in the attainment of the 10%
market recognition.
To establish and promote online shopping within the Brazilian market
One of the ways through which companies are benefiting and performing better is through online
marketing. The company thus needs to have an online shop from which customers all over the
world can make orders of various products and in return they can ship them or take them to their
locations. Online shopping is not popular amongst most Brazil residents and especially the
youth. However, the trends are changing with the increased adoption n technology. Therefore,
the company is bound to do great if they embrace online shopping. This is because through their
online shop, people from all over Brazil can access their shop, place an order and wait for it to be
delivered. This will help in improvement of the company’s revenue. This is expected to be
especially great in South East Brazil where people are more open to online services and home
deliveries.
VII Marketing Strategies to reach Marketing Objectives
Product strategies
Product is the first element of marketing mix. It can be a tangible good or intangible service that
fulfils the customer needs. It can be defined as ideas, a service, or a good. It is traded for money
or any other trading unit which has some value attached to it. Every company needs to adopt a
good product strategy to sustain the competitive market. The chosen company UNIQLO is a

Japan based company. Their product ranges include apparels, shoes, and accessories for men,
women, girls and babies. Initially they offer quality products. But the products are not so much
unique in looks. So they need to make the product range more innovative than their competitors.
They need to judge the product life cycle to make product strategies. A product life cycle
includes introduction of the product, growth of the product, maturity of the product and
declination of the product. If the company introduces a new product range, they can see the
growth of the product it means how their new product ranges are making profit from the business
or loss from the business. Before implementing any product strategies, UNIQLO needs to assess
the demand of the customers for new or improved products and trends of the market. They
should launch new or improved ranges of products as the current products are not so much
attractive to the customers. They can import or purchase clothes from top international brands. It
can increase the brand image of the company. The packaging of the products need to be changed.
Pricing strategies
Pricing is one of the most important elements of the marketing mix because it is the only element
of the marketing mix which generates revenue for the organization. The pricing strategy
developed by a company can either help the company reap the maximum profits or throw it out
of the business. Companies must ensure that their pricing structure covers the costs incurred to
produce a product, earns profitable margins for the company and at the same time, provides the
maximum value to the customer. Further, companies should not design a pricing structure in
isolation; rather it should be consider and design it along with the other elements of marketing
mix. Price is the value of the product. Pricing should take the following factors into account:
1. Fixed and variable costs

2. Competition
3. Company objectives
4. Proposed positioning strategies
5. Target group and willingness to pay
In this case, the company UNIQLO charges high prices for their products. For example, the price
of a simple long sleeve tunic is 19.90 Dollar which is equal to Japanese money 2206.57 Yen.
Besides that, their product ranges are not so good comparing to the price range. They should
adopt a unique pricing strategy to meet the current problem. The most effective pricing strategy
for the company will be penetration pricing. It is used by a company when new products are
introduced in the existing market or vice versa. As the company is charging high prices to the
customers, they lose many potential customers who could be their loyal customers. Initially, the
prices of the products are kept low so that customers tend to repurchase from their company and
thus become loyal customers over time. Even if they increase the prices of the products at a later
point of time, customers tend to continue with them. They can also increase the rate of sales of
their products.
Promotion strategies
Promotion, like any other of the marketing mix, is very essential for successful marketing of a
product or service. The UNIQLO offers different product ranges for men, women, girls and
babies. So their target customers are from babies to adult people. To reach their target customers,
they are presently using social media like Tweeter for product promotion. They can also use
Pinterest, Facebook, LinkedIn, and YouTube. There are large numbers of people who are very
much active in social media platform. But only social media promotion cannot reach to the mass.
There are also some people who do not use social media. The company is an e-commerce

industry. It is very uncommon for an ecommerce business to promote their product through
personal selling. The company can employ their personnel to interact with the customers face-to-
face and inform them about the products so that they can buy or trial the product. The company
can start sales promotion so that they can persuade their potential customers to buy the product.
The company can give their product as free trial or free gifts to their customers. They can also
hold contest offer to their customers or they can offer special pricing to their new or loyal
customers as effective promotional strategy.
Distribution strategies
Today many organisations are looking for alternative channels of distribution without relying on
direct sales or media launch. They were concentrating on the traditional distribution channels
earlier, but are now looking at innovative methods of taking their products to the customers.
Some organisations continue to sell their products directly to customers. Basically there are two
types of distribution process. One is direct distribution where manufacturers sell the products
directly to the customers. Another is indirect distribution where consumers get products from
retailers. The retailers get products from wholesalers and the wholesalers get it from
manufacturer. The company can use direct distribution so that they can reduce the extra cost. In
this case, UNIQLO needs to select port around the country for shippers' supply chains. They can
reduce the transportation cost if they can find a port near their trading partners. They can use
retail stores as their distribution channel. It will be a good strategy if the company opens a retail
outlet. They also can use middle man for selling purpose. The delivery process of their products
should use next day delivery option. It can be a huge USP of their brand.