This is a research paper for Nike tennis shoes in Brazil. This paper needs to include study topics such as international trade, cultures, assessing market opportunities in Brazil, marketing and pricing strategies, distribution channels, legal environment, labor laws, political issues, and statistical info such Brazil’s GPD, footwear market, etc.
The formal paper should show the theory learned from the course and presented in your textbook “International Marketing 18th edition – authors Cateora, Money, Gilly & Graham” The paper provides an opportunity to realize, reflect, and explain the issues that exist all around us.
The paper must include a graph used as an explanatory tool of the principles presented. The target word count is to be 1,700 to 2,000 words of content. The paper must follow APA guidelines.
The PowerPoint presentation must be like an elevator pitch – also known as an elevator speech – is a quick synopsis of your paper.
Research Paper on Sale of Nike Tennis Shoes in Brazil Market
The ongoing globalization trend has created both opportunities and challenges for multinational companies globally. Globalization has eased the movement of people, goods, and services across national borders. The trend has provided businesses with a chance to increase their market reach and revenue. One of the firms that have taken advantage of globalization to expand their operations is Nike. Nike is a United States-based multinational company that deals in apparel and footwear. The company is one of the few companies that have taken a special interest in the Latin American region to market its products. Nike has focused its marketing efforts in Brazil, a market that it has extensively explored over the last decade. The company had to rethink its market strategy when targeting the Latin American market due to its unique cultural composition and consumer behavior. Regardless of the reality that most companies focus on internationalization, many, such as Nike, implement their unique strategies to create a competitive advantage and improve their profitability in the target market.
International Trade
International trade involves the marketing of products and services beyond national borders. Many companies operate beyond their local markets to other countries in the developed and emerging markets. Companies use various strategies to internationalize their operations, such as direct exportation of products and services, mergers and acquisitions, opening up subsidiaries, or partnerships (Cateora et al., 2020). They make strategic decisions depending on the nature of the market. For example, while direct exports might be effective in one market, setting up production in the target market might be effective in another. Multinationals, such as Nike have succeeded in many markets, such as Asia by creating manufacturing centers in the region to export their products to other markets. Being a multinational means that the company markets and targets new countries to market its products, increase the market size, and grow its revenue and profitability. One of the markets that appears feasible for Nike’s tennis shoes is Brazil through effective distribution of goods manufactured in North America and Southeast.
Brazil’s GPD
A country’s economic performance determines whether it is a feasible target market for a multinational. Decision-making includes a critical analysis of the target country’s economic performance following indicators, such as GDP per capita. Figure 1 below shows Brazil’s GDP between 1996 and 2017, a period that is sufficient to help Nike in making the investment decision. From the figure, the country’s GDP has been increasing over the years with a slight decline in 2016. However, after the decline, the nation’s GDP started on an upward trend once again. The nominal (current) GDP of Brazil is $2,053,594,877,013 (USD) as of 2017, while the Real GDP was $2,284,132,600,491. During the same period, GDP Growth Rate was 0.98%, which was an improvement of 24,044,204,882 US$ over 2016, when the figure was $2,260,088,395,609 (Brazil GDP, n.d.). Regardless of challenges, such as the COVID-19 pandemic, which have affected the economic performance of many countries, it is evident that Brazil is a suitable target market for Nike tennis shoes. The target market’s GDP growth over the years, coupled with the high population, provides an opportunity for Nike to become profitable.
Figure 1: Brazil GDP, Wordometer. Retrieved from https://www.worldometers.info/gdp/brazil-gdp/
Footwear Market
The footwear market globally has been growing over the years, providing a lucrative market for current and existing brands. Besides sports footwear is a growing segment with the increase in the popularity of various sports, such as tennis. Overall, revenue in the Athletic Footwear segment has grown in the past years and is anticipated to reach US$1,248m in 2021. Current analysis reveals that the market will increase annually by 0.9% from 2021 to 2025 (Athletic Footwear, 2020). While most of the revenue will come from the North American market, others, such as Brazil will also contribute a considerable share. Besides, countries with large populations will also contribute to the positive performance in the sports footwear market. Thus, Nike benefits from marketing its tennis shoes in Brazil, an emerging market with a high population of sports enthusiasts. The company targets a sports segment that is not highly populated to create a feasible brand within the tennis sports market.
Cultures
Even though Brazil is a developing market, It provides a critical opportunity for companies like Nike to market its sports product. Consumers in the country are sports enthusiasts, to the extent that some scholars state that they are addicted to sports (Siemers, 2010). Nike took advantage of this consumer behavior and sports culture to manufacture and distribute its tennis shoes with identities of popular tennis celebrities and individuals affiliated with the sport. Furthermore, the company uses a customer-based focus that ensures the manufacturing and marketing of the product that customers need and prefer. The firm also focuses on major sporting events, such as tennis tournaments when producing their shoes to ensure that they sell them well. The marketing matrix includes dimensions of geography and sports culture in the Brazilian market. The company also designs products for the specific market to achieve its segmentation and positioning goal driven by consumer preferences.
Assessing Market Opportunities in Brazil
Brazil presents an interesting marketing environment for Nike tennis shoes. The company takes advantage of the relatively low cost of labor in the Brazilian market to present the product at a competitive price compared to rivals, such as Addidas (Mahoney et al. 2020). Besides, Brazil has few market regulations and a considerable large population, offering a wide consumer base. Although the entire population does not consume the product, the high numbers of potential consumers are provided by the market’s strong sports culture. The country is a regular host to international sporting events, including soccer and tennis, opening Nike’s opportunity to market its products. The firm’s presence in Brazil will be significant in the emerging market since it is a leading manufacturer and seller of sports products, especially shoes. Besides, the company will market to the huge population, providing the opportunity to succeed in the emerging market. Sports shoes are the most lucrative products that Nike can sell to the huge Brazilian population. Consumers prefer sportswear aligned with the consumer culture that supports sporting activities in Brazil (Goldman & Papson, 1998). Thus, Nike tennis shoes’ primary customer is a sports enthusiast and an admirer of the tennis sport.
Marketing and Pricing Strategies
Nike has used the same strategy it uses in other emerging markets to sell the Nike tennis shoes to Brazilians. Marketing Nike tennis shoes in Brazil presents an opportunity for effective marketing and low-cost pricing strategy since the management will manufacture outside the target market. The highest proportion of Nike’s marketing budget will be used in marketing, including advertising, in major tennis sporting events. However, instead of manufacturing in the country, the firm exports its products from Southeast Asian and American manufacturing segments to Brazil (Mahoney et al. 2020). Consequently, it reduces the cost of production to sell the products at a competitive price. Nike targets to sell its products at a lower price than competitors, such as Nike by taking advantage of economies of trade and low production cost. Nike will become competitive by customizing its marketing strategy to the needs of tennis enthusiasts in the emerging market.
Distribution Channels
Nike is one of the leading manufacturers and distributors of sports shoes and apparels, including Nike tennis shoes. The company required an effective strategy to manage the distribution of its products in Brazil. Brazil offers one of the most lucrative markets for the firm to increase its profitability since it is soccer, enthusiastic society. Regardless of the competition from other similar sports products, such as Adidas, Nike succeeds in the market due to an effective strategy. Nike maintained its centralized production system, but with extensive marketing to sell its tennis shoes to the Brazilian market. For example, instead of creating a production basis in the emerging market, the company reduces the cost by focusing on distribution to the target market. Setting up manufacturing firms in the target market would prove expensive and counterproductive. Thus, the company could still take advantage of Brazilian addition to sports to market tennis shoes by having effective distribution channels.
Legal Environment (Labor Laws and Political Issues)
The legal environment in Brazil is relatively stable and supportive of business. The government has over the years supported a market economy, making it open for national and international companies. Besides, the country has minimal legal regulations for the market, making entry relatively easy for local and global companies. The legal environment has made operating business in the country relatively low for competitive pricing. Besides, the country has labor laws to support positive treatment of employees in all companies operating therein. Nike observes the labor laws by being employee-oriented to gain a competitive advantage in its global operations. Besides, Brazil is a politically stable country, a factor that attracts businesses worldwide to compete and succeed. Political stability plays a key role in market performance since companies thrive in a peaceful environment. Thus, Nike and its competitors have the opportunity to invest and thrive in Brazil.
Conclusion
The analysis reveals that Nike has an opportunity to succeed in the Brazilian market, especially for its tennis shoes. The company can improve its marketing strategies to take advantage of the huge population and the sports’ addiction in the Latin American market. Besides, it can compete successfully with other sports shoes’ sellers, such as Addidas. The report reveals that with a strong marketing and distribution strategy, the company can enhance its profitability in the target market and marketing to tennis enthusiasts. However, the company should change its marketing strategy, including tennis celebrities, to sell to the market with a high population of soccer enthusiasts. Nike needs a comprehensive and extensive market strategy to explore and take advantage of opportunities in the emerging market. Investing in the target market is a brilliant idea of Nike in selling its tennis shoes since it will sell to consumers who already love sports.
References
Athletic Footwear (2020). Statista. Retrieved from https://www.statista.com/outlook/11020000/115/athletic-footwear/brazil
Brazil GDP, Wordometer. Retrieved from https://www.worldometers.info/gdp/brazil-gdp/
Cateora, P. R., Meyer, R. B. M. F., Gilly, M. C., & Graham, J. L. (2020). International marketing. McGraw-Hill Education.
Goldman, R., & Papson, S. (1998). Nike culture: The sign of the swoosh. Sage.
Siemers, E. (2010). Nike Focuses on Brazil. Keshkar, S., Lawrence, I., Dodds, M., Morris, E., Mahoney, T., Heisey, K., … & Santomier, J. (2019). The role of culture in sports sponsorship: An update.
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