Executive summary

The international marketing audit and plan explores the country of Brazil with a specific focus on its economic and socio-cultural characteristics as well as proposing the introduction of a well known Australian product, Up and Go which operates under Sanitarium for entry to the market. Through deep analytical thought and consideration the report illustrates whether or not Brazil is suited to launching the Up and go product and how it would need to be modified and adapted to be present within the Brazilian environment. Following a sequential approach, a preliminary marketing plan has been carefully constructed outlining how the Up and Go product will be introduced in accordance with the marketing mix. The product, Up and Go is a liquid breakfast supplement consumed predominately in the mornings or whenever there is a need to get that boost into your day-to-day activities. The product itself ticks all the health indicators as it is high in both protein and energy, contains an impressive 10 vital vitamins and minerals and is low in fat. Brazils overall economy has advanced in leaps and bounds over the last decade leading to a demand for more convenient products as they now lead busier lives and are working long customary hours as Brazilians are characteristically hard workers. With this behavioural understanding of Brazilian individuals coupled with the knowledge that Australian products have successfully penetrated the Brazilian market before and the fact that Brazil is becoming more attractive for foreign imports, leads one to believe the marketing of the Up and Go product in Brazil will work and will work well. The target areas in Brazil for the adoption of the product are areas that are full of activity, busy by day and night and are well populated. These areas are Sao Paulo, Rio De Janero, Manaus and Port Alegre that cover a wide geographical base. The main target markets for exploitation will take the form of multi-segment markets. Our primary target market is active business people, secondary target market are School/University students and future target markets will include active sporting

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athletes. Each target market need the product but in a differentiated way: Business people need an Up and Go to give them that lift needed to make it to the meetings, drink it whilst busily and hurriedly trying to get to work on time. School/university teenagers need the up and Go to make it to school on time, be readily available and alert to delve straight into theory based tasks. The business has also cleverly anticipated major sporting events in the future such as The Olympic Games and The World cup being hosted in Brazil respectively to target another market- active athletes for the up and go product. The major problem with this product doesnt exist with the product itself but more so with the time it will take to enter the market. Brazilian administrative and legal systems often require countless forms to be filled out for doing business in Brazil. Also business practices and negotiations in Brazil are often unhurried; if word gets out to competitors about a proposed launch of the product then domestic companies could enter the frame much more rapidly. To overcome this, the appointment of agents and middlemen will assist us in a smoother transition to the market. The companies aim is to increase the awareness of this new product being exported into Brazil as well as inform the Brazilian consumer base on the nutritional supplements the Up and Go product has and how it will benefit their diets. The company expects to gain a 30% market share in the liquor breakfast industry as through considerable market research there doesnt exist a lot of direct competitors within the environment. Up and Go has expected sales in 2012 of approximately AUD$35 million with a substantial increase within a 5 year period of AUD$140 million. The substantial increase has been based on continual marketing efforts to attract new consumers to the Up and Go product and retain those who have adopted it over the product life cycle. Up and go will adhere to the necessary packaging guidelines stipulated in Brazil, with a Portuguese translation provided on the back of the product packaging also with an accreditation sticker

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informing the public that the product has been accepted by INMETRO, (The National Institute of Metrology, Standardization and Industrial Quality). A combination of the media mix will be used to position the product as a front runner in the industry as well as increase awareness and stimulate trial of the product. Television advertisements will incorporate all the target markets in one ad, airborne advertising will be used over the beaches in Brazil where many locals venture too, billboards will be initiated with a demonstrated knowledge of the product being intrinsic with the culture and other forms will be exploited as well. The Up and go product will be sold in all major retailers, supermarkets, convenience stores, service stations and university campuses. Distribution will begin from Sydney, Australia and will be transported via air and ship freight. Due to the lack of direct flights to Brazil, shipping the goods has therefore eventuated as another possibility. Sanitariums HQ, (Head quaters) exist in Sydney therefore this is the most suitable origin for its takeoff. The recommended price for the product is $1.80 for a single buy, $4.85 for 3x and 15.99 for a carton, (12x). Flexible pricing has allowed for different behavioural trends- some individuals may want to quickly grab 1 individual up and Go, those who do their grocery shopping may opt for a carton to stock up on the product at a reasonable price. Towards the conclusion of the marketing audit and plan a marketing budget has been presented as well as a sample snapshot of the pro forma financial statements showing the costs and revenue received in year 1 and year 5. The trend follows that profits in the first year will be at its lowest as start up costs for a business venturing into international territory is substantially high. Profits will increase as the years go by and offset the costs of producing the goods.

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TABLE OF CONTENTS
1.0 Executive summary 2.0 Market Audit 3.0 Socio-cultural Analysis 3.1 Brazil relevant history 3.2 Geographical setting 3.3 Education and literacy rates 3.4 Stability and government 3.5 Business customs and rituals 1 7 7 7 7 7 8 8

4.0 Economic Analysis 4.1 Population 4.2 Foreign investment 4.3 Trade restrictions 5.0 The Product 5.1 Evaluate product as an innovation 52 Relative advantage 5.3 Compatibility 5.4 Ability to trial 5.5 Major problems and resistances to product 6.0 The Market 6.1 Describe the market (s) in which the product is to be sold 6.2 Geographical regions 6.3 Forms of transportation and communication available 6.4 Product use patterns 6.5 Shopping habits 6.6 Distribution 6.7 Advertising and promotion 6.8 Pricing strategy 7.0 Compare and contrast your product with competitor (s) 7.1 Competitors product 7.3 Product features 7.4 Promotion and advertising methods used 7.5 Packaging and price 8.0 Market size 6.1 Market size 6.2 Estimated industry sales for the planning year

8 9 9 9 9 10 10 10 10 11 11 11 11 11 12 13 13 13 14 14 14 14 14 14

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6.3 Estimated sales for your company for the planning year 9.0 Government participation in the marketplace 6.6 Testing, Standards, Labelling and certification 6.7 Regulations you must follow 6.8 Agencies that can help you 10.0 Preliminary marketing plan 6.1 The marketing plan 6.2 Target markets 6.3 Expected sales 2012 6.4 Profit expectations 2012 6.5 Market penetration and coverage 6.6 Product adaptation or modification 6.7 Core component 6.8 Packaging component 6.9 Support services component 7.0 Promotion mix 7.1 Advertising 7.2 Sales promotion 7.3 Personal selling 7.4 Other promotional methods 8.3 Distribution: from origin to destination 8.7 Origin Port 8.8 Destination port 8.9 Packaging 9.0 Marking/labelling regulations 8.4 Containerisation 8.5 Documentation 9.0 Channels of distribution 9.1 Retailers 9.2 Wholesale middlemen 10.0 Price determination 10.1 Costs of the shipment of goods and transportation costs 10.2 Handling expenses 10.3 Insurance costs 10.4 Customs duties, import taxes and value added tax 10.5 Wholesale and retail mark-ups and discounts 10.6 Companys gross margins 10.7 Retail price

14 15 15 15 15

16 16 17 17 18 18 18 18 18 19 19 21 22 22 23 23 23 23 24 24 24 26 26 27 27 27 27 27 28 28 28 29

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11.0 Terms of sale 11.1 CIF 11.2 C&F 11.3 FAS 11.4 FOB 11.5 EX 12.0 Methods of payment 12.1 Cash in advance 12.2 Open accounts 12.3 Letters of credit 12.4 Consignment Sales 11.0 Pro Forma financial statements and budget 6.1 Advertising and promotion 6.2 Overheads 6.3 Distribution 6.4 Production 6.5 Pro forma annual profits and loss statements 12.0 Resource requirements 6.1 Finances 6.2 Personnel 6.3 Production capacity 13.0 Sources of information 14.0 Appendices

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Introduction
Following is an Analysis of the socio-cultural and economic factors that may affect the success of the Up and Go product from entering the Brazilian market, along with other specific information that is necessary for exploration.

3.0 SOCIO-CULTURAL ANALYSIS

Relevant History
Over the years Brazil has emerged and grown into a powerhouse on the world stage. Now regarded as one of the BRIC counties comprising of themselves, Russia, India and China they are one of four economies that have been tipped to be wealthier than most of the current major economies. A historical trend has been identified over the years and According to department of foreign affairs and trade, 2001 They [Brazilians] are worldly and have an approach to business that is entrepreneurial. In terms of the history of doing business between Brazil and Australia there seems to be a strong acquaintance between them and thus allows for an environment that fosters a good-working relationship. Understanding the relevant history before further exploitation bolsters the belief that doing Business in Brazil is attractive and advisable.

Geographical setting
Brazil is located in Eastern-South America bordering the Atlantic Ocean and covers an area of 8,514,877sq km which positions them just above Australia and 5th overall highest area in the world. (CIA, 2010). Brazils diverse topography could potentially encumber the successfulness of transporting the materials. Brazil is known to consist of dense forests, semiarid scrub land, rugged hills and mountains, rolling plains, and long coastal strips, (Library of congress, 2004).

Education and Literacy rates

In 1990 it was estimated that 81 percent of the total population above age fifteen was literate, or 19 percent illiterate (based on the inability to sign one's own name). Illiteracy is known to be the highest in rural areas of the Northeast and North, where the figures are comparable to those in Africa and lowest in urban areas of the Southeast and South, where the figures are comparable with those in the developed world, (Library of congress, 2004). Educating the potential consumers on what the Up and 7 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

Go product is intended to do and how is therefore made possible given the large percentages of literate rates.

Stability of Government
In what was a turbulent political evolution in recent decades Brazils stability of government is notable increasingly stable. According to (Ball, 2009) Brazils democratic institutions have enabled the international and domestic markets to maintain their confidence in Brazils political system (Ball, October 16, 2009). Much of this stability can be directed to the efforts from Luiz Inacio Lula da Silva who served two terms consisting of 4 years each from 2003-2011.

Business customs and Rituals

Shaking hands with the counterpart is considered a routine when conducting business as well as making the conscious effort to say, muito prazer translated as my pleasure in English when meeting a business college for the first time. When conducting negotiations and discussion of doing business in Brazil a high degree of patience is needed as sources identify that the Brazilians have a relaxed attitude to time combined with an extensive system of regulations. What will be of assistance to Sanitarium when launching the new product is the knowledge of Brazilian practices in which the hiring of a despachante, otherwise known as a middleman. This will assist the company to work congruently together to achieve business dealings and could save miss-conceptions of the environment and save time.

4.0 ECONOMIC ANALYSIS

Population
As of July 2011 the population of Brazil is 204,429,773 which positions them 5 t h overall in yielding the highest populated country (CIA , 2010). Therefore, there is a huge potential to market this product in an expansive range .

Foreign investment
Foreign investment in Brazil is ascending and is becoming welcomed more and more. International investors have continually dispensed copious amounts of foreign direct investment. A record 8 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

US$32.66bn of foreign direct investment in 1999 and was followed in 2000 by an additional US 29.8bn. (Australian trade commission, 2011). In terms of Australias foreign investment they currently have 430 merchandisers exporting to Brazil and 53 companies established in Brazil. Examples include, but are not constricted to, BHP Billiton, Nuform and QBE insurance. (Australian trade commission, 2009). The successful investment of Australian products/companies into Brazil can only be comforting news for the product being proposed into the market.

Trade restrictions
Government intervention in foreign trade restrictions has had an extensive history in Brazil. More recently since the last review was conducted in 2004 by the WTO, (World trade organization), Brazil has continued with the gradual modernization and streamlining of its trade regime, while also increasing average tariff protection WTO, (2009). Tariffs are existent within all countries as taxes associated with the imported product provides revenue for the country.

5.0 THE PRODUCT

Sanitarium, (100% Australian owned) Launched its new product line, Up and Go liquid breakfast range in the year 1998. The product was introduced to the Australian Market in regard to the trend of busy lifestyles and the need for nutritional breakfast supplements for individuals on the go or couldnt find the time in the morning to eat breakfast. The product is high in calcium, has no artificial colours, 98.5% fat free and contains 10 essential vitamins and minerals not to mention coupled with protein, energy and dietary fibre of 2 weet-bix and milk- the product features present a optimistic view of a nutritional and beneficial breakfast meal. Given that the product has definitely matured in the product life cycle stage now, given its launch dated back in 1998, the company has opted to look into new product lines such as Up & Go Vive and Up & Go energizer. Due to its maturity and its sales having plateau, it is now time to market the product internationally to revive the cycle again to increase profits and market share.

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Evaluate the product as an innovation

The experience of Australian companies active in the market indicates that Brazilians are receptive to Australian products and services. (Department of foreign affairs and trade, 2001). Therefore there is an already established relationship and presence between both the countries and given that Brazil is moving in the direction of a demand of energy drinks of all sorts they would knowingly value another Australian product.

Relative advantage
The product is providing a needed benefit for the consumer base in Brazil, it is not only a convenience product but it is also a nutritional product. Liquid breakfasts are a relatively new phenomenon in the breakfast industry and can be consumed on the go. Also those with protein deficiencies in their diets will benefit from the Up and Go product.

Compatibility
The appropriateness of implementing the Up and Go product into Brazil are compatible with the notion that, They [Brazilian consumers] are becoming increasingly sophisticated, demanding greater quality,
fast service, and convenient products as they lead their busy lives. The Up and go product is therefore working towards trends in Brazil of busier lifestyles. (Consumer lifestyles, 2010).

Ability to trial
As the product is something that can be consumed the ability to trial will be effortless. Small samples of the population/geographical area will be selected at random to taste test the Up and go product which include different flavours, (vanilla, banana, strawberry and chocolate). These taste testings will be conducted in major supermarkets, within the Central business district as well as outside of university campuses to get a feel for the consumer perception towards the product. Trade-shows can also be exploited for example, food and beverage trade shows, if deemed appropriate.

MAJOR PROBLEMS AND RESISTANCE TO PRODUCT

Time taken to actually penetrate the market poses as a major problem for the product launch. Time taken to launch the product would include things such as trialling the product, waiting on consumer perceptions and then weighing them, modifying the product design to fit the urban setting, 10 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

outsourcing suitable middlemen and agents. Also research indicates that Brazilian business people have a very relaxed approach to business and do not like to be hurried. As time progresses and negotiations drag on, word could get out to other domestic competitors and given they are already established within the local environment they could rapidly alter their existing products to overcome any international imports.

6.0 THE MARKET

Describe the market (s) in which the product is sold
Region North Major city Manaus Transportation available Roadways Railways Air & sea ports Roadways Railways Air & sea ports Roadways Railways Air & sea ports Roadways Railways Air & sea ports

South East

Rio De janero

South

Porte Alegre

Southeast

Sao Paulo

Forms of transportation and communication available

Brazil has an impressive amount of airports totalling 4,072 recorded in 2010, second behind the United States in world comparison. In regards to the railways there is a total of 28,538km which is considered to be significantly inferior to the proportion of highways present. Roadways are the most dominant form of transport available carrying freight and passenger vehicles which amounts to 1, 751, 868km available of which 96,353 km is paved. (Library of congress, 2004). Of particular interest is the amount of ports and terminals available at Brazil. Cargo ports exist in Ilha Grande (Gebig), Paranagua, Rio Grande, Santos and many other areas as well as container ports also existing in Santos. The downside and risk to shipping our product components via boat form is the perceived risk for piracy and robbery against ships and this will need to be taken into consideration.

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Brazils telephone system is considered in go od condition overall. Main lines in use are at 41.497 million. In terms of the rural areas and low -income earners, there has been a boost in mobile-cellular activity in the past decade which has in affect expanded the telephone service. Promoting the produ ct via media mediums is at first look extremely promising as Brazil hosts more than 1,000 radio stations and over 100 TV channels. Mostly are privately owned, therefore negotiations will need to take place to reach an agreement in order to tap deeply into these lucrative media forms. There are several newspapers published daily in Brazil. Gaining Public relations awareness, (PR) in business magazines such as Exame, (188,000) as well as other big sellers will assist in promoting the product and getting the name out there .

Product-use patterns
The product will be more likely to be consumed in the morning and mid-mornings as it is a breakfast supplement. The product can be consumed on any given day of the week however it will most likely be consumed during the average 5 day working week (Monday-Friday). The product will be used as a substitute for breakfast cereals for those who do not have the time in the mornings.

Shopping habits
Consumers are expected to stock up on the product in their weekly grocery run thus purchase a carton of the Up and Go product at an affordable and competitive price of $AU15.99. Think about it boxed cereals are usually bought every week and are expected to last for a weeks duration; the same concept can be applied to the Liquid breakfast.

Distribution of the product

Convenience stores Widely accessible, easy to find, quantity multiplied. Locals will be able to find the product in fridge fronts. Products will be located in the cereals aisle, as well as the refrigerators. Those who need to refuel up in the morning, can quickly grab an Up and Go. Distributed evenly at all major shopping centres,

Supermarkets Service Stations Shopping centres

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easy to locate as there will be big signs. University campuses Distributed at cafe/canteens around the campus, for those who need their kick start to the day

Product sales by other middlemen

Appointed agents and middlemen in Brazil will be given the rights to distribute the Up and Go product, to the agreed contractual supermarkets and stores. Continual communication and checkups will be required in order to see what progress the middlemen are making.

Advertising and promotion

As secondary studies have shown there is a range of mediums available to the marketer in Brazil. Therefore a combination of mediums will be utilized in advertising the Up and Go product which include Airborne advertising especially over the beaches/sporting games which attract a lot of individuals, (locals and tourists), print advertising in newspapers and billboards and advertising on the local radio stations comprising of 30 second time slots.

Pricing strategy
Different prices will be available for the Up and go product which include a single price, 3pack and a 12-pack. The costs will differ due to the convenience-factor for example consumers should expect to pay more for up and go products located in vending machines and convenience stores as opposed to those sold in supermarkets and value-packs.
Different packs 1x individual 3x packs 12x packs (Carton) Price (Per quantity) $AU1.80 $AU4.85 $AU15.99

Customary Mark ups

100% mark up of the product to cover all associated costs with the product such as production, storage, transportation and manufacturing. 13 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

Types of discounts available

Discounts will only apply for special prices through the introductory stage of the Up and Go product life cycle, as a push/incentive to get consumers to trial the product. A 15% discount will apply to higher quantity packs such as 3x packs and 12xpacks.

7.0 COMPARE AND CONTRAST YOUR PRODUCT AND THE COMPETITIONS PRODUCT (S)
Competitors product (s)
Who: Carnation-instant breakfast (Nestle)

Features
Each serving of the drink provides 220-225 calories and at least 25% of the daily value of B Vitamins. Plus kids get needed nutrition and energy with 21 essential vitamins and minerals, 25% of their daily value of protein, and 50% daily value of calcium per serving (Breakfast products, n.d.).

Promotion and advertising methods

The product was launched through a campaign. Breakfast done fast. The campaign was aired and promoted through television commercials, print ads, (see appendix 1), subway ads, college newspaper ads and through a website. Promotions were further outsourced through the hiring of a promotional team which travelled to various areas to sample the product

Packaging and price

Carnation Instant Breakfast is priced between $4.00 and $6.00 a unit. It comes in a powdermix form as well as ready-to-drink form. The flavor offerings include Chocolate, Vanilla, Strawberry, and just recently launched, Dark Chocolate. 8.0 MARKET SIZE Estimate industry sales for the industry and our Product.
Although there are no statistics pertaining to the Liquid breakfast industry it is known to have emerged significantly as consumers are becoming more demanding of convenient breakfast 14 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

supplements to aid their busy lifestyles. However it is interesting to note that, Sanitarium Up&Go continues to dominate the booming liquid breakfast category with 53.6% value share in the convenience market and a growth rate of 31.1%.(Breakfast on the move, 2009). As consumer behavioural trends are changing there will be even more demand for Up and Go products. Therefore based on this knowledge we can assume. Market size (No information)

9.0 GOVERNMENT PARTICIPATION IN THE MARKETPLACE

Testings, Standards, Labelling and certification
Under the Brazilian consumer protection code all product labelling needs to be easily readable, accurate, clear and concise about the products quality, quantity, price, guarantee, shelf life and other important factual information. Imported products must also abide by conforming to a Portuguese translation. This information is beneficial and will affect the way in which the up and go products are packaged and labelled. Regulated products must be accredited by INMETRO which stands for, The National institute of Metrology, Standardization and Industrial quality.

Regulations you must follow

Import regulations and tariffs Along with its MERCOUSLpartners, Brazil implemented the MERCOUSUL common external tariff (CET) on the first day in the year 1995. The rang of levels extended from 020% however some products such as telecommunications equipment and capital goods were exempt from high rates. The maximum tariff amount is at 22.5%; however the most common is 17%. Duties imposed are calculated based on the cost, insurance and freight (CIF) of the import. (Brazil country profile, n.d.)

Agencies that can help you

Organisations
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Address

Contact details

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Brazil Trade Bureau

Brazil Australia Chamber of Commerce

Australia-Brazil Chamber of Commerce, Inc

Consulate General of Brazil Level 17, St. Martins Tower 31 Market Street, SYDNEY NSW 2000. Rua Said Alach 161 Ibera Poera So Paulo SP CEP 04003 020 Brazil PO Box 549 Neutral Bay NSW 2089

Tel: (02) 9267 4414 /4416 Fax (02) 9267 4416 /4419

Tel: +011 889 8388 Fax: +011 887 9851

E-mail: abcc@australiabrazil.com.au

10.0 Preliminary marketing plan

THE MARKETING PLAN
Marketing objectives
To successfully enter the Brazilian market, under the name of Up and Go in the year 2012. To increase awareness of the need for a nutritional breakfast supplements for active people To increase awareness amongst the Brazilian citizens and tourists about the Up and Go product To Launch campaigns prior to major sporting events in the future: Olympic Games and World cup. To achieve 30% of the total market share for Liquid breakfast products in Brazil 2012

Target Markets
Demographic and Psychographic will be used as the main segmentation variables for categorising our intended target market. There are two distinct target markets for the Up and go product, both are homogenous in that they share a similar need but both differ in their associated lifestyles. The first target market for the Up and Go product within the Brazilian citizens are teenagers in secondary college/university who live a busy life through their continual studies and sometimes deprivation of sleep. The second target market for the Up and Go product are active business people, gender bias is irrespective. Business people usually work from 9-6, (within the Brazilian environment)

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and 5 to 6 days a week with a strong ethic for work. This product will ensure they get the right nutrients to kick start their day. Due to foreseeing future events held in Brazil, particularly the Olympic Games in 2016 and the Fifa world cup 2014 an additional target market will naturally evolve and could definitely increase the market share of the product. Active sports athletes will be another potential target market for exploitation.

Expected sales 2011

Year 2011 2012 2013 2014 2015 Sales in AU$ 38 million 53 million 78 million 112 million 119 million

Expected sales in year 1 of our product launch will be at AU$38 million with substantial increases in subsequent years as our product moves through its respective life cycle. We believe the projected sales for year 1 is attainable given our appropriate and clever use of the marketing mix and its extended coverage over our geographical base.

Profit expectations 2011

Year 2011 2012 2013 2014 2015 Profit in AU$ 5 million 8 million 14 million 23 million 28 million

As expected, Profit levels in the first year will be at a premium low due to the common knowledge of a high start up cost of the business which includes production, manufacturing, marketing and so forth. As you can see the profit section in the table marginally increases in the second year, increases quite substantially in the 3rd and 4th year and then begins to move towards an area of stability, (profits begin to slow down). When the % of growth begins to hold back the company will reevaluate their position in the market and look towards extending their product line, providing a different USP, (Unique selling point) or penetrate different markets such as the greying market. 17 MKT3120: INTERNATIONAL MARKETING | Prepared by Rhys Martin

Market penetration and coverage

High populated cities, business districts, schools and universities will be penetrated for optimal success of the Up and Go Product

PRODUCT ADAPTATION AND MODIFICATION

The product packaging is in its most simplistic form. The packaging has a protection function and due to its aseptic packaging, (akin to boxed fruit juices) it allows for the milk substance to retain its freshness for an elongated period. The design of the packaging for the Up and Go product also gives each box made a shelf life of 7 months from its date of manufacture. The packaging of the product suits both target markets as it is a relatively small box and can fit easily into school bags, briefcases, handbags and sport bags.

Packaging component
In accordance with the earlier research conducted and the findings presented above, the product that is to be imported into Brazil Via Australia will need to abide by the Brazilian protocol for the product presentation. As such a Portuguese translation of the product information will need to be provided on the 250ml box coupled with an accreditation stamp/sticker informing the general public that it has been accepted by INMETRO.

Support services component

For any enquires complaints or for further information related to the product, the following tagline will be presented on the back of the product towards the bottom of the packaging. For more information phone our Consumer Advisory Centre. Free call 1800 number

PROMOTION MIX

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Advertising
To inform the target markets on the importance of the nutritional supplements the Up and Go product has One single standard message is to reach a mass audience, (target markets) informing them of the positives of consuming this drink and how it can be beneficial to their busy lives. This will be welcomed by the Brazilians as our company will be having their best interests at heart. To position the brand/product as a front runner in the Liquid breakfast industry Present a quality product to the market from the onset and ensure that those target markets become loyal to the product imported and are resistant to substituting other products that may emerge in the market in the future. Media Mix

Television
As highlighted earlier, Brazil has a range of television stations some of which are privately owned and given vast population of Brazil; television advertising may be the most suitable form. The concepts behind the television advertisements aired in Australia can be taken forward for implementation into Brazil. Television advertisements will show an amalgamation of the target markets within the one ad for example, the advertisement will be titled Up and Go, it will give you the boost to do whatever is in your day. The ad will be aired for 30-45 seconds showing the alarm clock ringing in the ears of individuals who prior to the alarm going off are dreaming about the day that awaits them, (school tests, dropping the kids off and assuming natural position in work, and football training). They all awake in unison, dart to their respective fridges in a dim, darky setting- grab an up and go- and the lights switch on symbolically representing their day has started and they are ready.

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Billboards.
Billboard advertising will also be heavily exploited and there could be a potential for exposure in the streets of Sao Paulo as some billboards that are not intrinsic with the Brazilian society are being stripped, The choice of products on display sometimes bears witness to the uninhibited nature of Brazilian society (Plummer, 2006). Thus, these billboards will set out to raise awareness of the product and how it will fit in with the busy lifestyle of Brazilians using simplistic language and a question that will be proposed, Have you got yourself one?

Radio.
Radio advertising is definitely a cheaper alternative than the other forms of the media mix and is another technique that can reach a large consumer base. Radio advertising will be used on both AM and FM frequencies, and main radio stations in the selected geographical regions will be exploited. Radio advertisements will vary in length, short and sharp radio segments will be accompanied by a catchy jingle and longer radio segments will bring together consumer favourable perceptions on the product pertaining to word of mouth exposure which is seen more creditable and less biased as the opinions are coming from outside sources instead of directly from the company itself.

Message
The product is most beneficial and suited to those who live and lead active lifestyles. The main concern behind this product is to provide individuals with a nutritional and convenient supplement to kick start there day and is therefore concerned with the health and wellbeing of Brazilian individuals. The main messages/slogans that will be promoted include the following: A car needs fuel. Your body needs fuel: Your body needs Up and GO Active? Tired? On the go all the time? Have an Up and Go
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Start your day with Up and Go When the alarm bell rings in the morning, think Up and Go

Sales promotion
Sales promotion objectives will be segregated into two categories: Consumer sales promotion and trade sales promotion. Consumer sales promotion Build brand loyalty Encourage consumer to try the product Encourage consumers to repeat or multiple purchase

Trade sales promotion Encourage retailers, supermarkets, convenience stores to stock and support the Up and Go product Sell more volume of Up and Go products

Coupons and sampling

Both these sales promotion techniques will assist in the introductory stage of the product life cycle of Up and Go. The introductory stage of the product life cycle is usually characterized by slow sales as the general public are not entirely aware of the products existence. Coupons accompanying print advertisements in the newspaper and magazines will facilitate trial purchase and will be in the form of cut outs. Free sampling of the product will also be another initiative for the Up and Go product and will be uncomplicated to conduct. Sampling stores will be set up in shopping malls, outside of schools and sporting stadiums/ovals to encourage consumers to try the product. If they are responsive to the product a free brochure/pamphlet will be given to them to direct them to further information.
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Premiums
Premiums will be used in a way that will benefit the adoption of the Up and Go Product. They will act as an incentive to purchase the product and can stimulate sales early on to override high research and development, (R and D) costs. A limited edition stylish synthetic watch will be given to those who purchase the Up and Go product with the brand fixated on the watch with the words Sinta-se vivo in English, Feel alive. Not only is the premium acting as
an incentive to buy the Up and Go product it is also doing two other things: the brand/product has cemented itself in the consumers mind and will assist with brand/product recall when shopping also those who wear it will be noticed by other individuals which will create word of mouth exposure, Have you seen those new watches people are wearing?

Personal selling
Personal selling will be utilised strategically and focus more on quality rather than quantity. For example, salary paid sale representatives often cost a business a large fee therefore what the company intends to do is narrow down the number of sale representatives that inherit certain characteristic traits such as; they are enthusiastic, knowledgeable, confident and patient. With the right choice of sale representatives they will be employed in high trafficking areas such as Rio De Janiro, Sao Paulo even tourists destinations such as Santa Catarina, (especially around the Olympic games and World cup in the coming years). Other promotional methods

Other promotional methods: Airborne Advertising

Like a key to the lock, like a bee to honey- Brazilians and their beaches go hand in hand. Brazilians flock to their beaches seasonally and in mass numbers. What better way to promote our new product into the Brazilian market by Airborne advertising in and around the beaches. Its something unique, new and different and it will engage the consumer base and make them aware of the product.

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DISTRIBUTION: FROM ORIGIN TO PORT

Origin port.
The headquarters of sanitarium are situated in NSW, (Sydney) which is the deviation point on embarking on travel to Brazil by default. The goods will need to be dispatched on cargo planes and a channel that will need to be pursued is via Australia air express who provide services to sending packaged products internationally. To get from origin to destination port, there is currently no direct route- which is a disadvantage for exporting this product to Brazil. However according to an article from the Sydney Morning herald, Osullvian comments, Qantas is considering tapping into the booming Brazilian economy by flying either to Sao Paulo or the popular tourist destination of Rio de Janiero (Osulliva, 2010) this is good news for the business.

Destination port
The main destination port will be the Sao Paulo Congonhas International Airport. This is renowned to be one of the busiest airports in Brazil and it houses many cargo operations. Once the goods arrive at this port, the goods can then be easily dispatched by road and railway.

Packing
The packaging of our product will be light-medium and will be packaged in bundles of 24 akin to a carton. The products packaging will be bound together by rigid plastic to ensure there is no movement between each single box and they have some form of protective mechanism.

Marking and label regulations

The common knowledge in Brazil is that labelling requirements have the tendency to be at variance within different product categories. Special label requirements will be required for beverage products and may have to be approved by regulatory bodies. In regard to common
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imported products the name and contact details of the importer coupled with additional information need to be positioned on the back of the product with a Portuguese translation. What this means for the company is that they will have to appoint a local partner to liaise with over into the imported country to ensure that all appropriate information has been included in the marking and labelling regulations. Non-compliance could severely hamper any further progression of the product.

Containerisation
Pallets otherwise known as ULD, (Unit load devices) will be utilized by airfreight as well as ship freight. This will be beneficial for the distribution of our products as it will allow for a smoother transition of the cargo goods, reduce time and will also heighten the security given that they are locked securely inside the ULD.

Documentation required Bill of lading

This form of documentation is critically important and is a requirement for export to Brazil. The bill of lading serves the following purposes: 1. Is a contact for shipment between the carrier and shipper 2. As a receipt for the transaction 3. As a certificate of ownership or title to the goods Given that shipping the goods is a viable option due to the number of ports in Brazil and the fact that there is no direct flights to Brazil a bill of lading will be significant given that if the goods were to be damaged enroot to brazil or if the ship was subjected to acts of piracy which is common in Atlantic ocean waters then the bill of lading will be used to take action against such occurrences.

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Commercial invoices
Invoices are required for all dutiable shipments relating to commercial transactions. The commercial invoices for Brazil should include the following: Freight, insurance and similar charges as separate items when applicable.

Certificate of origin
A certificate of origin must be accompanied with each commodity entering the Brazilian market for import licensing and/or quota restrictions .

Registration
Most importunately imported products into Brazil need to be registered with the Foreign Trade Secretariat (SECEX) of the Ministry of Industry, Commerce and Tourism (MICT). Failure to do so within 45-90 days the product goods are considered abandoned. (Bacchus, 2010). The downside in considering importing the Up and Go product to Brazil is the lengthy period that it takes to register a product- however after 3 months of stability in the market importers can be granted with a protocol number by Brazilian authorities to distribute the product. (Brazil country profile, n.d).

Freight forwarder
Freight forwarding will definitely be considered by the company exporting the Up and Go product at the port of export. The freight forwarder can prove to be indispensible as they, Provide information and advice on routing and scheduling, rates and related changes, consular and licensing restrictions and export restrictions (Cateora, Sullivan Mort, Dsouza, Taghian, Weerawardena & Graham, 2009). Given that the company has only exported to New Zealand a freight forwarder is needed as there is not enough prior experience to do so alone. Stockwell international are a freight forwarding company with its head office in NSW, Sydney which coincidentally is where our main office for the product is. With over 40 years experience in international freight forwarding and priding themselves on exceptional service- we will look into this freight forwarder for assistance.

CHANNELS OF DISTRIBUTION

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In order for our product to finally reach the end consumer it will go through a lengthy channel of distribution. Firstly the company doesnt have enough international presence to market directly to the retailers, (only established in Australia and New Zealand) therefore the hiring of an agent/distributor in Brazil will be the first port of call. With Several agents hired over a wide geographical base that have acquired some local expertise can then source out appropriate wholesalers. Once the wholesalers have been decided upon, they can then convince retailers to support and stock the product being imported. Wholesalers also have warehouses and can store the goods and deliver to retailers which will assist the company immensely.

Retailers
Outlet Convenience stores Supermarkets Service stations Kiosks (train stations) Airport terminals University campus 10% 15% Both Both Medium Large Mark-up Cash/credit Cash Both Both Cash Scale Medium Large Low Low

Wholesale middlemen
Wholesale middlemen will be used by the company as we can foresee the potential benefits: Local Market knowledge understands the nature of doing business in the certain market, Save time and costs in the future. The company will seek to hire several wholesale middlemen; 1 per geographical region being exploited for distribution of the product. The types of wholesale middlemen predominately pursued will be Agents. Agents generally involve
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lower market entry costs than representatives and can provide good access to potential buyers (Department of foreign affairs and trade, 2001).

PRICE DERTIMINATION
Costs of the shipment of goods and transportation costs

The determination of the shipment of good and transportation costs will be dependent upon the size and quantity of the containers to be distributed from the origin to destination port. Contractual agreements will be meet by both parties, (shipper and transporter), and consultation with the Australian export agency as well as the hiring of a distribution agent in Brazil will make this process possible and less convoluted.

Handling expenses
There are various handling expenses involved and an interception of Australian service terminal fees initiated by Qantas can give the company some indication of what to expect. (Australian terminal service fees, 2010). Export document fee: $40.00 per air waybill Export security fee: $32 per container (for a lower deck container) Import document fee: $44 per air waybill International terminal fee (ITF): $38.50 per container (presuming shipments arrive as shipper loaded These handling expenses will marginally change and are dependent on the size of the container, (ULD). Insurance costs Exporting the product into Brazil will attract an Insurance rate of 1.30%, as Brazil is categorised under the Central & South American destination. Thus if the container was valued at 25,000 the company would have to pay approximately $AU325, comparatively if the container was valued higher at 40,000 the insurance cost would be more: $AU520. (Cargo insurance rates, 2009).

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Customs duties, import tax and vat tax

Shipments by air valued between 50USD and 3,000USD will be subjected to a flat 60% duty and tax on the FOB, (Free on board) value of the shipment regardless of the commodity. (Brazil country profile, n.d)

In addition to the general taxed duties the merchandise circulation tax, (ICMS) will be applied on the imported product. This tax is operated by the state government and although the special tax varies across a wide range of states the predominant rate is 18% (Brazil country profile, n.d).

Mark-ups for class of products by each type.

The company follows a simplistic formula: The longer the distance travelled and the higher the size of the shipping handling the more likelihood of an increase in the mark-up for the associated products.

Methods of operation (Cash/credit)

Flexible methods of operation will be employed to give the consumers choice. However cash will be the more preferred method of payment in convenience stores and kiosks.

Scale of operation (small/large)

Supermarkets will have a large scale of the products as there will be more shelfing space/floor space to position cartons of the product, (24 individual Up and Go boxes)allowing consumers to stock up on the product at a discounted price for buying more. University campuses will also have a large scale of the products and the onus will be to have sufficient stock stored away in a cool environment so if stock does run low they can be easily replenished.

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Wholesale and retail mark-ups and discounts

Mark-ups between wholesalers and retailers will differentiate with an expected range of 2550%. Those who stock up on the product in larger quantities will be rewarded with continual discounts in order to establish a long-lasting and profitable relationship which will be healthy for the business.

Companys gross margin

The expected gross margin from the outset of the business running is 25%. We expect that the prediction of the gross margin in the coming years to be more accurate as we can base our calculation on previous financial records of the business. The gross margin is expected to increase over the 5 year span as more revenue will be generated as the product reaches maturity in the product life cycle, (well-known presence).

Retail price
The RRP, (Recommended retail price) for the sanitarium Up and Go products is AU$1.80 for 1 single, $4.85 for a pack of 3 and for a carton of 12 the price will be 15.99. Flexible pricing has allowed for different buyer behaviour trends and has followed the notion whereby the more you buy, (in quantities) the better deal you will receive. The company feels that the prices suggested will be sufficient enough to offset production costs.

TERMS OF SALE
The terms of sale that exists in an international environment focus astutely on the buyer-seller relationship and there are differentiated by the division of different risks and obligations. Each term of sale has its associated advantages and disadvantages.

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CIF.
Cost, insurance and freight. Within the CIF the seller has a huge degree of responsibility over the costs of goods, insurance and all transportation and miscellaneous charges to the named place of debarkation..CIF is the most viable term of sale for our business as the company is still relatively new to international trade and the process of this sale will allow authority over the control of the importer. (INCOTERMS, n.d)

C&F
Cost and freight. In this term of sale there are a division in the responsibilities between the buyer and the seller. The shipper/sellers duty of care is to ensure the product gets from origin to destination, from x to y; therefore covers transportation costs and the cost of the goods. The buyer will be forced to cover the insurance costs. (INCOTERMS, n.d)

FAS
Free alongside ship. This term of sales bears a lot of responsibility on the buyer. The buyer will have to endure all the transportation costs and the associated risk of the loss of goods. In a reversed manner, the seller will need to clear the goods for export in accordance with their chosen freight forwarder. (INCOTERMS, n.d)

FOB
Free on board. Basically the shipper/seller will be held responsible for using a freight forwarder to move the goods for import into a designated market. More specifically FOB refers to transportation of goods into an inland point. Once the goods have been received to be passed on by their freight forwarder, responsibility has been shifted. (INCOTERMS, n.d)

EX
Minimum responsibility = seller
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Maximum responsibility= Buyer. Fewer obligations, but less control as well- is this such a good balance to have?

METHODS OF PAYMENT
Another hurdle that is encountered when importing a product into a new international market is the establishment of methods of payment, which is risky business as there could be inadequacies in credit reports on customers and problems of currency exchange. (Cateora, et al. 2009)

Letters of credit.
Letters of credit will be the most pursued route for methods of payment as it is the most common form of payment and evidence shows letters of credit can be used in Brazil without any dilemmas. Bianco Do Brasil is focused on developing sustainable partnerships with foreign banks- with the main goal in shifting the importers credit risk to their bank. The requirement is that the appropriate documents are presented to ensure that the bank can honour the transaction.

Cash in advance
Not the most suitable choice of payment methods. Both Parties are not equally satisfied with business proceedings. Yes, it is ideal for the exporter receiving cash up front through a wired transfer but for the importer there is less certainty- what if the goods are not actually sent? Only when credit is not assured, cash in advance may prove to be the right perusal. (Cateora, et al. 2009)

Consignment sales
In consignment sales, the goods are channelled to the foreign distributor who then sells them on behalf of the exporter consequently the risk is greater for the exporter, so if we can avoid risks whenever possible consignment sales will not be used. (Methods of payment, n.d.)
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Open accounts
Out of all the methods of payment open accounts is the most simplistic method of paymentthe exporter bills the customer, provides an invoice and have settled on a date for the agreed payment. Open accounts also have their associated disadvantages whereby the, buyer can receive the goods and not pay you, leaving you totally exposed to buyer credit risk and possible country and currency risk (Cateora, et al. 2009). The business intends to enter the market as quickly as possible as Brazil is at its peak in regard to opening its doors to foreign investors, the market has never been so attractive. More time will be needed to determine and explore potential buyer credit worthiness and their trends overtime.

11.0 PRO FORMA FINANCIAL STATEMENT AND BUDGET

Advertising and promotion
This will cover all advertising and promotional costs used by the business including Television, print, radio, airborne advertising, sales promotion efforts, (coupons/sampling) and premiums. Costs for advertising and promotion would have increased significantly in the 5th year as innovative and fresh concepts behind the design of the advertising and promotion for the up and Go product materialize.

Overheads
Overhead costs will include a mixture of fixed costs and variable costs as well as other additional costs Fixed costs: Salary of employees, rents (warehouse) Variable costs: Raw materials/ingredients, packaging, direct labour

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Distribution
All distribution costs will amount to a relatively large figure and will be calculated based on modes of transport used and associated distances, (ship/road/rail)- the container costs, (Unit Load device)- the appointment of middlemen.

Product
Labelling, packaging, branding, manufacturing and test-marketing are all components association with product costs. A significant commitment of funds to the production of the product will be noticeable in year 1.

Pro forma annual profit and loss statement (first year and fifth year)
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12.0 RESOURCE REQUIREMENTS

Finances

Financial resources will be needed and used in the start up costs of the business, distribution costs, Competitive pricing identifications, market trends by values emitted over time and a range of day to day business activities. Financial resources will also be needed later on in the five year span of the product where additional Product lines may be added to increase market share.

Personnel

A team combining of marketing, human resource, business, strategic management and administrative personnel will be needed for the successful adoption of the Up and Go product. The team, although being segmented by duties, will need to work in unison and ensure the approach is relationship-driven.

Production capacity
As sanitarium has been situated in Australia for an elongated period, most of the production will be done within the home country. This is primarily due to the fact that production capacities and capabilities already exist in the home market and the familiarity of the facilities is already achieved.

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SOURCES OF INFORMATION

Australian Terminal Service Fees. (2010). Retrieved May 13, 2011, from: www.qantas.com.au/freight/pdf/AustralianTerminalServiceFees2010.pdf

Australian trade commission, (2011). Brazil market update and opportunities in infrastructure, 2014 Fifa World cup, & 2016 Rio Olympic games

Australian trade commission, (2009). The missing bric: Export and investment opportunities in Brazil. Canberra, Australia: AGPS.

Bacchus, R. (2010). Understanding Brazils import regulations. Retrived from the Rosaline Bacchus website, http://www.rosalienebacchus.com/articles/UnderstandingBrazilsImportRegulations_012910.html

Ball, J. [October 16,2009]. Investing in Brazil. Retrieved from the Investement International website: http://www.investmentinternational.com/magazine/alternative-investments/investing-in-brazil3057.html

Brazil country profile, (n.d.). Retrieved from the FedEx website: http://fedex.com/us/international/irc/profiles/irc_br_profile.html?gtmcc=us

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Breakfeast on the move, (2009). Retrieved from the Conveniance & impulse retailing website: http://www.c-store.com.au/magazine/432

Breakfeast products [n.d.]. Retrieved from the Carnations breakfeast essential webstie: http://www.carnationbreakfastessentials.com/Products/Default.aspx

Cargo insurance rates, (2009). Cargo insurance quotes. Retrieved May 11, 2011, from: http://www.shipping-insurance.com/cargo-insurance-quotes.html

Cateora, P. C., Sullivan-Mort, G., DSouza, C., Taghian, M., Weerawardena, J. and Graham, J. (2009). International Marketing. McGraw-Hill.

CIA. (2010). Brazil. CIA World fact book. Retrieved May 22, 2011, from https://www.cia.gov/library/publications/the-world-factbook/geos/br.html

Consumer lifestyle. (2010). Retrieved from the Market research website: htttp://www.marketresearch.com/product/display.asp?productid=6108764

Department of foreign affairs and trade, (2001). Doing Business in Brazil- an introductory guide. Canberra, Australia: AGPS

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INCOTERMS. [n.d]. Retrieved from the foreign trade website: http://www.foreigntrade.com/reference/incoterms.cfm

Library of congress. (2004). Country profile: Brazil. Federal research division. Retrieved May 24, 2011, from http://lcweb2.loc.gov/frd/cs/brtoc.html

O'Sullivan, M. (2010). Qantas looking at direct flights to Brazil. Retrieved from the Sydney morning herald website, http://www.smh.com.au/travel/travel-news/qantas-looking-at-direct-flights-to-brazil20100906-14wmt.html

Plummer, R. (2006). Brazils ad men face billboard ban. Retrieved from the BBC website, http://news.bbc.co.uk/2/hi/business/5355692.stm

World Trade organisation, (2009). Promoting market competition would help sustain economic growth. World trade organisation. Retrieved May 22, 2011, from http://www.wto.org/english/tratop_e/tpr_e/tp312_e.htm

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