ABDOU MEITE

INTERNATIONAL MARKETING

Under Armour in Brazil

Proposal

Student work starts here

Contents0.1 Introduction.....................................................................................................................................4

0.2 Target audience...............................................................................................................................5

0.2.1 Demographic............................................................................................................................5

0.2.2 Psychographic...........................................................................................................................6

0.2.3 Behaviour..................................................................................................................................7

0.2.4 Geographic...............................................................................................................................8

0.2.5 Benefits.....................................................................................................................................9

0.3 Brazil opportunity and threat for Under Armour (UA)...................................................................10

0.4 Brazil cultural value.......................................................................................................................11

0.4.1 Strength and weakness of UA in Brazil...................................................................................12

0.5 UA brand positioning.....................................................................................................................13

0.5.1 Perception Maps:....................................................................................................................14

0.6 Recommendation and adaptation for UA in the Brazilian market.................................................15

0.7 Entry mode....................................................................................................................................15

0.8 Conclusion.....................................................................................................................................15

References...........................................................................................................................................16

Appendix.............................................................................................................................................18

0.1 Introduction This report will investigate the practicality of Under Armour entering the Brazilian market place. The report will look into the threats and opportunities of the Brazilian market to evaluate the strengths and weaknesses of Under Amour marketing efforts. A conclusion, with recommendations and strategies for the Brazilian cultural market place to adopt will result from this investigation. This will be achieved without compromising Under Armour’s brand value proposition.

Brazil is part of the BRIC Nations which are the fastest growing and largest emerging economies. They account for almost three billion people, or just under half the total population of the world. (economywatch,2010). Brazil’s economy is the largest in South America; it has a major agricultural products, commodity-based economy and, therefore relies heavily on the price of commodities and exporting. Brazil is currently in a transformation phase, becoming a consumer driven economy which relies on its growing middle class spending to maintain the economy stability. The government encourages international business (nytimes ,2012)

Under Armour (UA) is based in North America and is a developer and distributor of athletic and lifestyle fashion apparel for men, women and children. Its brand value proposition mission is to make all athletes better, through passion, design and the relentless pursuit of innovation. The brand’s vision is to empower athletes everywhere, motivating them to achieve greatness. (underarmour,2015). Under Armour is the market leader in performance apparel with over 70% market share, including company brands HOTGEAR, COLDGEAR and ALLSEASONGEAR. These are extremely popular among professional athletes as well as consumers. As apparel is high tech and innovative, the cost of the product is high and above that of competitors. Its main competitors are Nike , Adidas, Puma and Reebok, all of which are well established brands within the marketplace while Under Amour has yet to expand internationally.

0.2 Target audience In order to move into Brazil’s marketplace Under Armour will need to evaluate the ways in which they will be able to break customers into easily targeted segments. These segments would have similar characteristics which would allow the company to concentrate their efforts on the needs of the customers within the groups. ‘This makes segmentation a proactive part of developing a marketing strategy and involves the application of techniques to identify these segments’ (Wind, 1978)(Brassington,2006,p193).The analyses the behaviour patterns of the Brazilian social classes in an attempt to understand the attitudes in line with Under Armour’s opportunities within the Brazilian market.

0.2.1 Demographic- Demographics segmentation is the usage of population characteristics and provides a range of useful variables to state current trends and opportunities in consumer behaviour (Materson ,Pickton,2010, p125)Brazil’s current population is 203 million with a yearly change of 0.85% (1.6 million). It is globally ranked 5th most populated country in the world (worldometers,2015). 85% (172 million) live in urbanised environments and 62% of the population is aged 29 or under (Appendix 1) (worldpopulationreview,2014). Male to female ratio is 49.156% to 50.844%. Brazil’s population is projected by the national statistics agency to peak at 228 million in 2042 (worldpopulationreview, 2014).

As Brazil’s infrastructure improves and poverty is minimised, thus spear-heading Brazil’s middle-class growth, life expectancy is increasing to 71 years for men and 78 years for women. It is estimated both men and women will live, on average, longer than 80 years by 2041. (worldpopulationreview,2014)

As more women are entering the workforce and choosing to wait before having children, an aging population is being created in Brazil (worldpopulationreview,2014). In the 1980’s, Brazil’s fertility rate was 4.31. This has decreased to 1.82 in 2015 (worldometers,2015), resulting in fewer mouths to feed and more disposal income to spend on products.

Brazil is segmented to 4 waves of household; subsister household poverty (12% of population), making under $3,000 annually. Occupations include: cleaners, unemployed. Restricted households have recently passed poverty (59% of population), making between $3,000-$15,000. Occupations include: housemaids, builders. Second wave: emergent households (18% of the population) make $30,000- $45,000. Occupations include teachers , managers. Third wave, established middle-class (5% of the population) who make $30,000 to $45,000. Occuations include: doctors, lawyers. Fourth wave: affluent households (6% of the population) make $45,000 and beyond. Occupation: investors and business owners. (bcgperspectives) and (thebrazilbusines, 2011)Table: 0.2.1a: demographic

The demographic information shows Brazil population is to increase; also it is a young population, life expectancy has increased, women fertility rate has decreased. This indicates the potential of consumers within the Brazilian market for Under Armour, as families have an increase in disposal income and longer life is associated with health and exercise, therefore a target audience for UA sport performance apparel will have an position within a growing population. Social grading is used to understand the population of each social class and the capability of purchase power for the UA brand. The information shows that restricted households are the biggest population; Therefore UA can devise a strategy to specifically target this group through price initiatives.

0.2.2 Psychographic- Psychographic refers to the understanding of the psychological basis of opinions, motivations and attitudes. It helps to determine the reasons of purchase of products and services. (Yeshin, 2011,p197)

In Brazil incomes reflect consumption rate per household on product and service categories. It is important to understand spending psychology of consumers to anticipate purchase intent and precisely, strategically position and target the products to customers. Households entering new income segments: subsister households can afford to purchase little more than necessities. Restricted households increase consumption of basic goods and durable products. They also trade up to higher value products, especially in electronics. Emergent households spend money on essential and higher value products. These households trade up on products. Established households increase spending in new categories and trade up in wine, clothing and entertainment. Affluent households spend 40% on discretionary consumption; they dramatically spend money on living in luxury. (Appendix 2) (bcgperspectives, anon)

The emergent and established households will represent around 35% of Brazil’s income in 2020, while the affluent will increase their share from 39% to nearly 43 %. The middle-class and affluent households will account for 85% of incremental consumption in Brazil between 2010 and 2020 (Appendix 3) (bcgperspectives) . The emergent and established social class represents 80.2% on sport apparel total spend and affluent households represent 11.66% (Appendix 4)(M.O.F.A.O.D, 2014).Table 0.2.2a: Psychographic

The psychographic information shows social classes spending on sport brand apparel, therefore indicating customer profitability for UA brand within Brazil emergent, established and affluent. The psychographic information shows the different spending habits within social classes. It is important to understand attitudes, motivation and income because it can predict categories trade up as income increases. This can vary due to the perception of brand positioning to the consumer.

….”Schaninger (1981) compared the relative effectiveness of social class and income. Income exerts an influence when the product of concern is expensive, and social class exerts an influence when the product of concern can be seen as a reflection of consumer social class this information is particular in product categories ”…. Positioning the UA brand as high luxury sport brand will create an image within the society to reflect the target audience of affluent and middle class consumers.

Personality

VALS was created to maximize the ability to predict consumer behaviour. VALS system based on demographic and psychological characteristics correlated with purchase behaviour. The dimension of the framework is based on motivation and resources. Different levels of resources (age, education, income) enhance or constrain the expression of a person motivation( J. Baker, 2014,p270) UA will be targeting personality;

Achievers Consumers who are primarily motivated by achievement look for products and services that demonstrate success to their peers. They are attracted to premium brands

Experiencers Young , enthusiastic , self- expression desire social or physical activity, variety and risk,

Table 0.2.2b: personality

This two combined personality represent the UA brand positioning which is primary based on enhancing personal skills through hard work.

0.2.3 Behaviour – Behaviour segmentation is based on the relationship between customer and product usage (Brassington,2006,p207)

In Brazil 80 million people claiming to be actively engaged in one or more sports, and approximately 60% of the population being under 30 years old, (latinvex,2014) . Womens wear is the largest segment in sport-wear, accounting for about 48% of the industry; menswear and children’s wear account for 34% and 19%, respectively. (M.O.F.A.O.D, 2014)

The 2014 FIFA World Cup, followed by the 2016 Olympic Games, both in Brazil, will play a role in driving the performance of sportswear. In addition the warm climate makes it easy to practice outdoor sports all year long.

Football’s is the dominate sport in brazil, running and cycling are gaining momentum. The Rio de Janeiro Olympics will bring world-class runners and cyclists to Brazil, promoting the popularity of these sports, stimulating growth as a result. (latinvex,2014). Running has become the country’s second most popular sport, with 4.5 million runners training regularly, dedicated runners are happy to invest in performance sportswear, including special footwear, fast-dry T-shirts, compression shorts and anti-UV caps, and there remains plenty of opportunity for development. (latinvex,2014)

Brazil prefers performance apparel accounting for 45% of sports apparel value sales in 2013. Brazilians tend to purchase performance brands over fashion sport apparel, This is largely due to the seriousness for sport . They are prepared to pay more for high-spec sportswear. Brazilian consumers are extremely brand conscious and brand name certainly influences purchase decisions.(latinvex,2014)

target audience by usage; high users; professional athletes, aspiring young athletes and sports enthusiast . Medium users: students, dieters, people pursuing healthy lifestyle. Low users: people who want to keep fit, once a week runners or bike riders and leisure fun sports. Table 0.2.3a: Behaviour

The behaviour segmentation shows the relationship between Brazilians and sports products. It shows 80million are actively into one or more sports and 60% of the population is under 30 years, this shows the customer profitability for UA in the market place. Brazil will host the world cup and Olympic Games this will have a direct influence and motivation for more people to partake in sporting activities. Sport performance apparel is already established within Brazil as 45% of sales were performance apparel. Brazilians are willing to pay high prices for enhancing performance therefore UA will profit from this behaviour as they are the function brand leaders in sport performance apparel in the USA.

UA brand positioning in America caters to heavy users; athletes, aspiring young athletes or sports enthusiast .they mostly train every day to improve their sport performance for competitions. Competitors are strongly positioned for medium and lower users. UA strategy to penetrate high users was through sponsoring college/universities and endorsing professional athletes to promote its brand within America , this strategy can be adopted in Brazil.

0.2.4 Geographic- Defined as the analysis people by where they live (slight,1997, p6) this give an understand where customers are placed geographically within the country. This will make the targeting process effective and efficient.

Geographic landscape of Brazil is broken down into 5 regions and 26 states. The south and the southeast region are considered as the urbanised and wealthy cities in Brazil. South and south east region consist of Sao –Paulo with a population of 19millon (2007) and Rio De Janeiro 14million (2007) people (Appendix 5). Sao-Paulo is regarded as the one of the largest city in the world (worldpopulationreview,2014 ) its known for its vibrant colourful culture, beaches , shopping malls. This region will have the highest concentrations of upper-income Brazilians in 2020. Nike already has established stores in these location (Appendix 6) The north and northwest are still undeveloped but show the fastest growth potential it is “projected to add around 2.5 million new middle-class and affluent households between 2010 and 2020.” (bcgperspectives, anon ) Appendix 7 shows the growth rate potential of new emerging cities within brazils.

E- CommerceOnly 53% of brazils 202 million population are active on the internet. Most of the population that is yet to have access to the web come from under-developed states where connections are still expensive and unreliable(techinbrazil,2015).South and south-eastern region ; São Paulo, Rio de Janeiro and Minas Gerais, combined with Espirito Santo gather over 72% of all e-commerce revenue. E-commerce revenue was highly apparent in south-eastern as because these areas have good infrastructure logistics. Customers trust e-commercial sites because delivery is in a timely manner. Sao Paulo showed the highest revenue share among others inner cities(Appendix 8) , outside the city and metropolitan areas of brazil customer are less likely use e-commercial due to unreliable logistics and they prefer to see and feel items the before deciding to purchase(techinbrazil,2015).

The Brazilian government implemented a growth acceleration programme (PAC 2) particularly in terms of infrastructure, of R$ 958 billion (round €400 billion). This effort will be developing the logistics to improve the e-commerce delivery around Brazil in particular cities outside the capital or metropolitan areas, therefore indicating growth of e-commercial in more cities around brazil(bpostinternational,2014)

Customer behaviourBrazilian e-commerce revenue by social class, Affluent (Class A) and Established (Class B) accounts 61% of purchases online, research from 2013 shows that 97% of citizens belonging to class A and 78% of citizens belonging to class B were online. Emergent (class C) account for 35%, Restricted (Class D) and Subsister (Class E) accounts for 4% (techinbrazil,2015) (Appendix 9) .Fashion and accessories has the largest share among customer using e-commercial , it made up 18% of retail ecommerce transactions in H1 2014. The next largest share came from health and beauty aids (16%), (emarketer, 2015) (Appendix 10)

0.2.4a Table :Geographic

The geographic information indicates south and south-east region in Brazil consist of the wealthiest individual and families. These regions consist of Sao-Paulo and Rio, these are the biggest populated cities within Brazil and cover over 72% of all e-commerce revenue. North and Northwest regions shows the most promising growth potential as household increases income. UA will target the wealthy southern areas of Brazil to have more exposure to potential customers and easily target e-commercial customer with special local offers.

0.2.5 Benefits- Benefit segmentation is the desired or sought functional and psychosocial benefits , reflecting the fundamental human needs of consumers for the product or service (Haley 1968)

As Under Amour is a specialist at producing performance based technology clothing,Under Amours have several product ranges which benefit the customers.” Infrared technology that recirculates heat around the wearer’s body, Coldback technology designed to reflect heat and keep athletics cool in the sun, and MagZip technology which allows a zipper to be pulled with one hand.” (prophet,2014) HeatGear ArmourVent: “built to handle the worst heat—it’s tougher, dries faster & gives you true breathability.” wicks sweat away from the body, Anti-odour Cold Gear: circulates heat, keeps people dry and protected, s muscles for increased power. Heat gear: Moisture Transport System wicks sweat away from the body. (underarmour,2015)0.2.5 Table: Benefits

All the features benefit customers partaking in sports by making them feel comfortable and enabling them to train longer to improve sport performance through conditioning their body. UA products features are functional to mostly heavy users who train hard under weather conditions. UA product uses technology for individual to enhance their skills through training. UA uses the tagline “I will” which differentiate itself from Nike “just do it”.

Summary

The segmentation process was used to understand UA target audience within Brazil. The information established a foundation of a more focused marketing effort(smith 1957)p193. The purpose of segmentation process is to position UA brand to enhance customer lifestyle or help them to achieve their aspiration for physical activity Solomon (1994)

Target audience

Demographic Social class Personality Product usage Geographic Benefits

Male/femaleAge 18-40

Future:40-80 age (grey market)

Emergent , middle-class and affluent

AchieversExperience

Heavy users:Professional athletes, aspiring athletes, sport enthusiast, dieters, healthy livingAge

South , south east- Sao Paulo and Rio Jeniro

Future plans : north and north west

Motivated athletes, keep athlete dry, recirculates heat around body, wick sweat,

0.3 Brazil opportunity and threat for Under Armour (UA) Opportunities threats85% (172 million) live in urbanised environments,62% of the population is aged 29 or under, peak at 228 million in 2042, Life expectancy grown(age 80) ;these indicate the potential customer base for UA within the Brazilian market. It states people are living for longer therefore a need to exercise to maintain a healthy lifestyle will be important and UA can utilise this opportunity in the long term.

Raise of middle class, high disposal income,80 million people claiming to be actively engaged in one or more sports, 2014 FIFA World Cup, followed by the 2016 Olympic Games ,Brazilians purchase performance brands over fashion sport apparel; these show the potential popularity growth of sport within brazil marketplace. UA can utilise these events and cater to customers’ needs to promote its products.

Big cities Sao- Paulo and Rio De Janeiro will have the most affluent. class in 2020, São Paulo, Rio de Janeiro and Minas Gerais, combined with Espirito Santo gather over 72% of all e-commerce revenue: these cities within brazil shows the most customer profitability potential within brazil. UA can concentrate to target these areas.

Northern region, underdeveloped cities show greatest opportunity as more families become middles-class or affluent ; this shows future opportunities outside the major city, quickly reacting to this growth areas will gain an advantage over competitors

logistics Infrastructure improvement to underdeveloped cities within brazil, this will help e-commercial sites

Women having less children , aging population; this indicates UA will mainly targeted at young heavy users, therefore this may cause a decline in UA products

Economy instability of the countries threaten customers spending habits , as in financial crisis consumer tend to use their money wisely a decrease on luxury products

incomes reflects consumption rate per household, therefore the emergent middle class, is biggest populated social class may settle for lower price competitors brands

Football dominates brazil, Nike and Adidas have strong presence, football is the biggest sport market within brazil.

Nike, Adidas and local sports brands already established within brazil

Apple watch; apple are transforming its watch into a healthy lifestyle sport trackers. This is a direct competitor with Under Armour long term goal ;to enter wearable technology sport gear to improve consumer performance

Generation Z, are not heavy users of UA products, they prefer to be on the internet or fast food chains. They do not like exercise and follow fashion, therefore brands like Nike and Adidas are appealing to them.

0.3 Table: Brazil opportunity and threat for Under Armour (UA)

0.4 Brazil cultural value Culture values influence all aspects of consumer buyer behaviours in different countries. This can be the central consideration in developing and implementing international marketing strategies. (Doole & Lowe, 2012,p66)

Brazil culture values; The understand Brazilian culture the three main areas to understand is; beliefs, values and custom of specific situation e.g Christmas, Easter etc that serve to direct consumers behaviour.(Doole & Lowe, 2012,p66)

Brazil is one of the world’s most diverse places due to its mixture of different nationalities migrating to create unique culture and custom. Brazil has a big vibrant culture full of fun and enjoyment. They love football, carnival, music and well known for dances like samba and salsa. (brazil.org,2015)

Brazil is a collectivism society they are very family orientated; they are tight-knitted, in times of hardship family members will stick together to resolves problems formally. Brazilians value trust and loyalty which is built through friendship, therefore product will have to create valuable relationships with Brazilian consumers. Religion is a major cultural variable and has significant effect on beliefs and norms as well as taboos (Doole & Lowe, 2012,p68) in brazil 80% of the population ascribes to the Roman Catholic faith traditions.

Brazilian generations’ differences

To understand generation differences in brazil Inglehart (1997) states “that historical, societal and cultural events that take place during the formative learning years of a generational cohort will impact the values, attitudes and behaviours of that group through life” these changes took place in brazil as its going through a developing phase of an agriculture society to a post-modern society . The differences can be seen through generation X to generation Z.

Generation X Generation Y Generation ZThis generation grew up comfortable to a dominant authority, with modest expectations. Limited expertise or confidence in how to build a business; they were more comfortable being part of the multinational enterprises that dominated the economy after Vargas’ rule. They were idealism for a better future and an anti-authoritarian point of view; Worried about the economy, this generation developed a short-term orientation and became excessive consumers.They fought for a better future through protesting against military control and gained democratically election. This difficult path left members of Generation X risk-adverse, with a strong sense of self-reliance and a strong commitment to their families. (tammyerickson,2011)Culture: dictatorship, family, , equal right fighters, pessimistic

Brazilian generation Y emerged motivated with the freedom they gained from generation X efforts to make brazil a much fairer working environment with the help of government . This generation developed excitement about the economy status of Brazil. This generation is optimistic, with a desire to make things better and gain success. This is because of generation X instilling “you can be anything you want”. This has enabled this generation to become a vibrant middle-class. This generation has puts their family as priority as generation X. generation Y are social class oriented as image place a big emphasis on lifestyle. (tammyerickson,2011)Culture: democratic, religious, family, technology, work hard, optimistic

Generation Z is benefitting from previous generations efforts. This generation are tech savvy and image conscious. They have great interest in brand image within society. They are starting to develop their sense of identity and are anxious to cultivate a sophisticated self-image. Brands are seen as status symbols, and they are not prepared to compromise, even in hard time. They are concern with environmental issues as they have witnessed the deforestation of the amazon and pollution within brazil. They are interested in sustainability. This generation spend time alone 56% explore the Internet alone, 30% play on their own, and a sad 5% say they hang out alone. They want to be successful.(Euromonitor International,2011)Culture; Democratic, religious, family oriented, technology, success ,brand conscious.

Summary

The Brazilian culture is very vibrant, exciting and sociable; these traits are embedded within the culture and have been passed through generations. Hofstede (2010) illustrates people belief system and behaviour pattern (Appendix 11) Generation X values and attitudes was based on fighting against dictatorship and military control for a better future for their children’s, Generation Y values and attitudes was motivated by their parents giving them confidence in achieving the impossible, this generation is the driving force of the raising Brazilian middle-class, Generation Z is benefiting from parents hard work, they value their families and sustainability. They are brand conscious and have a high usage of the internet. They spend various hours alone on the internet and have a strong belief for what they see on social media.

UA can use this information to target generation’s values and attitudes. The ethos of the Brazilian culture and value is based on hard working to achieve success. This philosophy is similar to the UA brand positioning therefore UA can use these generation story into its marketing efforts. Generation Z is brand conscious are not willing to compromise therefore there are brand loyal to prestige brands with high society acceptance. UA can utilise this by positioning it brand to be high quality luxury sport performance brand.

0.4.1 Strength and weakness of UA in Brazil Strength

Unique selling proposition of innovative sportswear technology (market leader in sport performance apparel in America )

Positioned as a high quality , expensive sport performance apparel brand

High brand presence in the USA which shows credibility to the Brazilian consumers

Highly integrated with American Football and American basketball which is becoming an interest to Brazilian youngsters

Acquired new sport sponsorships deals with Brazilian football team; Sao-Paulo FC , (localisation)

Weakness

Not established internationally

Product line is a discretionary items and therefore in economic crisis or cut back these products will not be purchased by customers

Team based in the America, has not expanded or have any offices in brazil

Very intensive competition , Nike, Adidas , Reebok and local Brazilian heritage sport brand, competitors can easily produce UA replicas , as the Brazilian government doesn’t have a specific department for patent controls , there is a black market in brazil where people sell counterfeit brands at lower prices

0.5 UA brand positioningPositioning is creating a brand which has a competitive advantage and caters to consumer needs. Positioning is the perception in which customer view brands through marketing efforts and status within its community. (Brassington,2006, p358)

UA stands for working hard to overcome obstacles to better craft the individual skills to be a winner. The brand essence revolves around being the underdog, being motivated to work hard to succeed. The slogan “I will” is emotional which captures the passion, intensity and drive for the individual. UA products have functional innovative features which are advantages over competitors, but through its emotional transparency it has developed an personality which is described as attitude clothing.

Competitors personality: brand personality is the ”set of human characteristics associated with a brand” this is a driver of self-expressive benefits, brand-customer relationships and the communication of functional benefits, using brand personality dimensions of Jennifer L Aaker framework will gain a greater understanding of UA and competitor.(prophet,2013)

Brands Personality brand reflectionNike Sophisticated, ruggedness,

competence ,True sportsmanship, champion and aggressive

Under Armour Sophisticated, ruggedness and competence

Hard work out motivation, team work and aggressive

0.5.1 Table:

Brazil ration vs emotional

Nike and Under Armour are similar but betray different images. Nike is a champion top dog with a tagline “just do it”, while Under Armour is an underdog motivated to overcome obstacles to be a champion through hard work and determination. Under Armour has an emphasis on training and performing in its promotions.

In Brazil UA marketing efforts will be towards emotional positioning through betraying a sporting and healthy lifestyle. In Brazil, brands dictate social status, individualism; sophistication therefore emotional lifestyle marketing has to be associated with prestige and credible imagery. Brazilians trust people who they build relationships with, through emotional advertising UA will be able to build an emotional trustworthy bond to the Brazilian market, consumer will become brand loyal. The “I will” ethos is instilled within Brazilian culture therefore manipulating and integrating UA brand positioning will have to be executed creativity to capture Brazilians attention

0.5.1 Perception Maps:Perception maps are insight into competitors positioning within a market, the perception map is primarily used to identify competitive advantages points and possible avenue to differentiate products or brand for consumers. (Brassington,2006, p360)

USA perception map

Brazil perception map

In Brazil UA will position as a high prestige brand aiming at high users and affluent social class. Brazilian perception are based on society status, therefore positioning the brand as a high luxury sport brand for serious athletes and sport personal, will motivate and attract all social classes in the category of sport wear. Brazilians are brand conscious and willing to pay the cost to fulfil need but also socially accepted.

Performance

Leisure

High price Low price

Under Armour

Nike

Adidas

Affluent

Lower- Class

Low user High user

UA

Nike

0.6 Recommendation and adaptation for UA in the Brazilian market

UA should adopts Brazilian vibrant colours to its products, Brazilians takes pride in their country colours ;

UA should gain insight to category spending behaviour among social classes and understand when customers trade up due to increase in incomes;

UA should develop a grey market sport performance apparel as brazil is forecasted to be an aging population;

UA is primary a sport and fitness focused brand, UA should try to adapt to the Brazilian culture through marketing through different activities e.g, UA wear for samba or salsa dancing, sport performance gear for physical workers, eg agriculture workers , bricklayers and miners

UA should target generation Z through digital base platform and promote healthy living. therefore build a healthy social media platform where generation Z can interact with sporting activities within the community and provide incentives

UA should use the Brazilian success story “nothing to something “mentality adopted in UA marketing efforts. UA stand for underdog and Brazil has resemblance of the Brazilian culture within its current marketing efforts.

UA can target families with incentives , as families are valued and at the core of decision making; UA can utilise this culture by offering family initiative

0.7 Entry mode Establish a location for office space in Brazil. License manufactures in Brazil to avoid purchasing a factory cost. Negotiate a contract agreement of percentage of sales and commission with the licenser, Set up a distribution network via agents or local companies to get UA within brazil supermarket chains or small sport specific retailers. Open up Under Armour specialist stores in capital cities to compete with competitors. Establish e-commerce logistics partnerships to to cater for online customers. Create a big Brazilian campaign launch, acquire Brazilian sport personal to be the front man of the campaign. As the companies will be based in Brazil this will eliminate tariff fees and take advantage of the “MERCOSUL agreement”

0.8 Conclusion The report investigated Brazil market with UA opportunities to enter the market place. The Brazilian market shows a lot of potential with its young population and growing middle class who are willing to spend on prestige international brands. The growing of sports and the importance of performance sport apparel consumption indicates UA is well positioned to enter the market as it has the innovative products already. UA will have to create a very creative advertisement to entice and build relationships with customers.

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Appendix

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Appendix 5

Appendix 6

Appendix 7

Appendix 8

Appendix 9

Appendix 10

Appendix 11

Figure 0.4.1: Hofstede dimensions of brazil

Results ReasoningHigh power distance Brazil is a high power distance country due to its family

orientation where older members are respected and make key decisions on behalf of the family. This translates into the business organisation of hierarchy structure, managers are responsible for final decision making.

Collectivism As Brazil is a family oriented society, they have big families and decisions are based on family principles. They look out for trust and loyalty which is built through social meetings and gatherings to build business relationships. Brazilians will always give opportunities to people they trust or in their inner circle before seeking partnerships from less sociable partners outside their circle.

Feminine/masculinity Brazil is a feminine and masculine society, meaning it is in-between “masculine values such as achievement and exercise of power and feminine values; caring for others, being less self- centred”. This stems from the Brazilian attitudes of friendliness and free spirit. Also females work as much as male figures and there is an upcoming wave of strong educated women in Brazil.

High uncertainty avoidance Brazil is a high uncertainty avoidance society, with a strong need for rules and elaborate legal systems in order to structure life. This provides a safer environment in which to live. Due to high crime levels in Brazil this balances Brazilian life with sociable encounters with peers.

Normative and pragmatic Brazil is a normative and pragmatic society. This means they have traditional principles and are looking to the future for a better living. This may stem from parents working hard to give better opportunity for their children by sending them to school in order to have a better future.

Indulgent society Brazil is an indulgent society. This means they love enjoying life and have a positive attitude to each other. They are optimistic and enjoy socialising , which stems from family values.