Global Marketing Plan

COUNTRY ANALYSIS

History

Dating back to the early 1970’s, Brazil was directed under military rule but experienced rapid economic growth due to the new economic associated policies by Presidents Artur da Costa e Silva and Emilio Mediici (Skidmore, 1999). “These policies centered on a commitment to domestic production of consumer goods, namely automobiles, as well as the availability of foreign capital to finance economic expansion and significant government funding for infrastructure expansion” (Skidmore, 1999). What contributed the most to this short-lived economic boom was the high demand of Brazil's exportation but this came to a halt in 1973. Due to not being able to keep up with the rising costs of petroleum this had a major impact on the continuing industrial expansion having a highly negative impact with the profits they earned tied to oil.

By the 1980s, Brazil faced many hardships and failures within their government. The 1980s for Brazil was known as the period of debt crisis for the country. Before this debt crisis, Brazil had 30 years of economic prosperity. Many economists believe these financial hardships were as a result of deficits not being properly handled by the government. The public and government deficits lead to the country to begin external debt negotiations with several international financial communities. Some of those financial institutions were nine large banks from the United States. These international banks came together to lend money to assist with the devastating crash of Brazil's capital. Brazil was ordered to sign agreements and follow certain principles in order for creditors to assist them. The agreement allows Brazil to follow certain principles such as rapid settlement of debt to prevent more disruption in their finances, reduction in exposure of foreign banks and little debt forgiveness (Dalto, 2019).

In the 1990s, the government still faced many hardships. The government still had not improved the economy due to many corruption scandals. The president had been accused of taking millions of dollars and placing them into secret bank accounts which led to his impeachment. The impeachment of the president led to further investigations which showed many leaders were corrupt. The corruption was found on state and federal levels. With so many political scandals happening, the people of Brazil also began to see a decline in industrial production along with their incomes. Many of Brazil’s people believed the reorganization of its political system was a way for the county to emerge from the crisis in the 1980s ( James and Burns, 2020).

Geography

Map of Brazil ( Brazil Map and Satellite Image, n.d)

Brazil which is also referred to as the Federative Republic of Brazil is located in South America. Brazil is the fifth largest country in the world and covers half of the South American continent. Majority of the country’s border is along the coastline of the Atlantic Ocean. The border of Brazil that faces the Atlantic Ocean is approximately 4,600 miles long. While sharing its borders with the Atlantic Ocean, Brazil also shares its borders with other countries on the South American continent. Brazil shares 9750 miles of its inland borders with almost every country on the continent due to its massive size. These countries include Uruguay which is located to the south and Argentina, Bolivia, Paraguay located to the southwest. Venezuela, Suriname, Guyana, and French Guiana on the northern side of the country. To the west of Brazil is Peru and on the northwestern side of Brazil is Columbia. There are only a few countries that do not share its borders with Brazil which include Chile and Ecuador. The Brazilian government has sectioned the country into five major regions (Poppino, Schneider, James, Martins, , Momsen, & Burns, 2020).

The country contains a variety of tropical and subtropical landscapes. Some of these landscapes include low mountains, plateaus and the Amazon River. The Amazon river is the largest and most extensive river basin in the world. Brazil does not have any deserts, arctic environments, and high mountains. The five major regions include North, Northeast, Central-West, South, and Southeast. The northern region is covered mainly by rainforest with limited population and economic input. The Northeast region has the hottest weather conditions which is why only one-fourth of the population resides there. The southeastern region is relatively small in comparison to the other regions. The southeastern region is only one-tenth of Brazil's land and has a highest concentration of agricultural and industrial output. In this particular region, there is only two-fifths of the population. The Southern region has one-seventh of the population and offers economic diversity opportunities. The central-west region covers one-fourth of Brazil. The population is growing here due to a number of people settling here for agricultural opportunities (Poppino, Schneider, James, Martins, , Momsen, & Burns, 2020).

Cultural environment

Hofstede dimensions: Brazil scored 69 to power distance which reflects a society that considers hierarchy should be respected and inequalities amongst people are acceptable. The different distribution of power shows that the powerful authorities have more assistance than the less authoritative in society. Brazil score of 38 which means that this country's people are integrated into strong, cohesive groups (especially represented by the extended family; including uncles, aunts, grandparents and cousins) which highly believe that protecting its members in exchange for loyalty. A high score on Masculinity shows that the society will be driven by competition, achievement and success, with success. At 76 Brazil scores high on UAI, this is not surprising because the majority of Latin American countries score high in the UAI. These Latin countries have a strong need for rules and elaborate legal systems for a structured life. Brazilians are very passionate and demonstrative people: emotions are easily shown in their body language and choice of words. Brazil scores as intermediate in this dimension of long term orientation at 44. “One challenge that confronts humanity, now and in the past, is the degree to which small children are socialized. Brazil’s high score of 59 marks it as an Indulgent society. People in societies classified by a high score in Indulgence generally exhibit a willingness to realize their impulses and desires with regard to enjoying life and having fun, they place a higher degree of importance on leisure time, act as they please and spend money as they wish (Hofstede dimensions, 2020).”

Brazilians focus a lot of importance on the family structure and the values that are entrenched within that institution. Families are usually large, and even extended family members are close with one another, providing much-needed help and support to each other (Meyer, 2010). In their relationships people appreciate honesty, respect, trust and patience. Warmth and compassion are valued, hence bringing Papa Johns to Brazil would be beneficial promoting family meals and deals. Integrating a family bond with food at a great price at the same time helping elevate the economy.

Local traditions and celebrations are Capoeira, the national sport, and the festivities of Carnaval. From the love of soccer to Catholic holidays to the rituals of the local religion, Candomble, Brazil's traditions are both secular and sacred. Carnaval is the traditional festival of decadence before Lent begins. It is one of the biggest celebrations in Brazil. Capoeira, a home-grown martial art, is based on self-defense practices devised by African slaves. Brazil's enthusiasm for soccer launches the sport to the level of a national obsession. Other national traditions draw from the predominant religions, Catholicism and Candomble. Candomble traditions include offerings to Lemanja during the New Year, as well as Boa Morte, or beautiful death, a celebration that takes place in Salvador and incorporates music and dance. Samba music and dance comes from the Bantu who arrived in Brazil from Angola. This African musical import has evolved to produce Bossa Nova and other traditional forms of Brazilian music (Hill, 2018).

Culture is shaped by communication (Encyclopedia, 2013). Cultural habits, norms, ethics, values and behaviors are typically established through communication in the Latin culture. Communication is referred to the transmission of emotions, thoughts and suggestions to the recipient by using words, gestures or behaviors as a medium of transmitting the desired message (Merriam-Webster, 2016). They are physically expressive and convey emotional information through touch, which is why their language has a lot of lust and passion behind it.

Physical contact is a common form of communication in Brazil. Nicol (2012) elucidates that Brazilian women greet one another through exchanging kisses by having each other’s cheeks come into contact and simultaneously kissing the air. Brazilians are comfortable sharing space and co-existing in close proximity with one another (Hall, 1990). In this culture, emotions were conceived as relational to the group. Emotions are postulated to occur between people, rather than within an individual. The more collectivist a society, the more likely to find in the vernacular, public displays of emotion and emotional language (Heather, 2016).

Knowing about their culture, virtues and ethics it is safe to say that Brazilians also prefer face to face communication to part of building rapport, as trust needs to be gained before they would be comfortable to do business. A firm prolonged handshake is often visible in business and it is customarily common to see them place one hand over the shaking hands to convey warmth and sympathy. With this noted, touching is a norm rather than an exception and is welcomed between close friends, family and at work. Brazilians are also comfortable being close to one another and accept proximity in tight public places (IOR, 2015). Brazilian companies commonly tend to have vertical hierarchies where managers at the top make most of the decisions. This could be due to the political history where a military coup in 1964 established a dictatorship that destroyed the social system and oppressed people for 21 years, leading to the gradual acceptance, and even expectancy of inequality and hierarchical structure in their society (Rotta, 2013). Brazil is what is a high context culture, because Brazilians place a strong emphasis on how a message is said rather than on the words used alone. Brazilian need to establish personal relationships when business is concerned. It is when this personal relationship can take place an adequate level of trust to undertake most business arrangements. Brazil's personal business relationship may well prove more binding than contracts. “Brazil, like all polychronic cultures, ranks personal involvement and completion of existing transactions above the demands of preset schedules (Victor, 2020).”

Legal environment

Brining Papa John into another country we must first have to understand their legal environment. For foreign direct investments Papa John’s must be registered with the Brazilian Central Bank. Because Papa John has the intent to expand for investments in the securities market, registration with the Brazilian Securities Commission is further required and must be enrolled in the Brazilian Federal Revenue Office's taxpayer registry. As a United Nations member, Brazil applies the Security Council Resolutions, some of which impose economic sanctions preventing or restricting trade with certain countries.

Brazil has lifted 28 million people out of poverty in the last 15 years, 10% of the population still live in poverty, while the country's richest 5% have the same income as the remaining 95%. There are high disparities between the regions, and there has been a recent rise in the rates of delinquency and criminal violence according to the OECD Economic Outlook Interim Report Coronavirus: the world economy at risk (March 2020) “Brazil is still considered a developing nation, and although that is often interpreted as a precursor for ‘high growth levels’, it also means that several areas of the economy remain underdeveloped. The consumer base, regulatory environment and sphere of investment are not as mature as those of developed nations, and considerations must be made to that effect (Sottovia, 2018).” While Brazil is among the world’s leading investment destinations and being formally a well-functioning business environment, corruption and bribery are still serious obstacles hence why we chose to bring Papa Johns in the Brazil market. The federal structure of the political system means there is a wide range of regulatory agencies that will lead to demands for bribes from public officials being a third world country. “In 2016, Brazil was ranked 76 in Transparency International’s corruption perception index, and organized crime is a significant problem in some parts of the country (Sottovia, 2018).”

The declaration must be submitted every five years by:

· Legal entities headquartered in Brazil in which non-residents hold a direct equity interest, regardless of the amount.

· Investment funds with non-resident quota holders.

· Legal entities headquartered in Brazil with a total balance of short-term commercial credits (payable up to 360 days) granted by non-residents equal to or greater than the equivalent of USD 1 million.

The most common forms of business vehicles in Brazil are the following: (when/if we expand for delivery)

· Limited liability companies (sociedades limitadas) (LLCs). LLCs are subject to less strict rules regarding members' rights and obligations. As such, their constitutional documents may be drafted with more flexibility. Disclosure requirements are also more flexible. In 2019, Law 13,874 was enacted which allows LLCs to be incorporated and/or remain with a single member.

· Corporations (sociedades anônimas). The law currently governing corporations (Law 6.404/1976) provides detailed rules regarding the rights and obligations of shareholders, controlling shareholders and managers. As such, corporations are considered a more complex form of business vehicle. Corporations must have at least two shareholders and are subject to additional formalities and disclosure rules compared to LLCs. Corporations are usually preferred when sophisticated corporate structures (different classes of shares can be issued, including non-voting shares), or alternative fundraising structures, are needed.

· Single member limited liability company (empresa individual de responsabilidade limitada) (Eireli): Eireli is also a vehicle that may be useful for foreign investors, as it also provides a separate legal personality (similarly to limited liability companies and corporations) with the benefit of allowing a single member. Nevertheless, this vehicle requires a minimum capital of at least 100 times the highest minimum wage in force, which must be paid in full upon incorporation (currently the highest federal minimum wage is BRL1045.00). In addition, an individual is only authorised to hold interest in a single Eireli. On the other hand, the Normative Instruction No 47/2018, issued by the Corporate and Integration Registry Department (DREI) states that legal entities may hold interest in one or more Eirelis. The rules regulating limited liability companies are also applicable to Eirelis, when adequate. Investors are likely to use the LLC as an investment vehicle in most single member situations. This is because Law 13,847 allows the LLC to be incorporated and/or remain with a single member, without any minimum capital requirement or the further restrictions applicable to Eireli.

The company must also be registered with the national taxpayer's registry (kept by the Brazilian Federal Revenue Office) and, depending on its activities, also with the state and the local taxpayers' registries.

Environmental licences and additional registrations with other agencies or government bodies may be required, depending on the company's activities, for example:

· Financial institutions must be authorised to operate by the Brazilian Central Bank (except for Brazilian fintechs (that is, direct-credit companies and peer-to-peer lending companies), which were exempt from special authorisations from October 2018, according to Decree 9,544).

· Insurance companies are subject to authorisations by the Federal Insurance Commissioner.

Brazil’s free trade agreement is as follows: “Brazil, together with other Mercorsur members, is also pursuing negotiations on potential trade agreements with other countries. Officially, there are ongoing negotiations on potential agreements with EFTA, Canada, Singapore, Lebanon, and Tunisia. Mercosur and India are also discussing the expansion of the existing preferential trade agreement, and Mercosur and Mexico are discussing the expansion of ACE-54 (ELANBIZ Trade Experts in Brazil, 2019).” According to Peter Surfrin an Associate Member of the Inter-American Dialogue in Washington, D.C. and contributes regularly to the Latin America Advisor: For trade to prosper under Trump, Bolsonaro, and future administrations, the impetus for development can come only from formal implementation of an FTA. The mechanisms are now in place. The Strategic Partnership Dialogue announced in September, and initiatives through organizations such as the Brazil-U.S. Business Council and U.S. Chamber of Commerce will help to overcome the historical ambivalence of the U.S.-Brazil trade relationship.

Political environment

Brazil is a federal presidential representative democratic republic that is divided into 26 states and the Federal District. Brazil’s political environment, like many, has taken many different routes to get to where it is today. The contemporary political party system began to emerge in the 1940s under President Getúlio Dorneles Vargas, who was responsible for establishing the Social Democratic Party and the Brazilian Labour Party. Although, In 1965 the military government abolished all political parties and replaced them with a single government party, the National Renewal Alliance, and a single opposition party, the Brazilian Democratic Movement (James et al., 2020). The government abolished these two organizations in 1979 and allowed more parties to participate, but under particular restrictive regulations (James et al., 2020). In 1985, the civilian government was restored which led to the legalization of all political parties. This brought about a multiparty system that included: the Liberal Front Party, the Brazilian Social Democratic Party, the Party of the Brazilian Democratic Movement, and the Workers’ Party (James et al., 2020).

Unfortunately, Brazil’s current political situation is much the same as the country is currently facing a political crisis centered around its President, Jair Bolsonaro. In April 2020, Brazil’s Justice Minister, Sergio Moro, who was the face of anti-corruption in Latin America, resigned after accusing the President of seeking political gain by establishing an improper control of the federal police (Londono et al., 2020). In addition, President Bolsonaro is currently facing a lot of criticism for his handling of the COVD-19 pandemic, as he fired the health minister over strict quarantine measures (Londono et al., 2020). The president’s response to COVID-19 along with impending investigations surrounding those close to him, have led to his political isolation. Many in Brazil feel that the President is threatening the country’s democratic principles with his improper management of the federal police (Londono et al., 2020).

With the aforementioned taken into consideration, international business is affected in a tremendous fashion. The United States has long had deep trade collaborations with Brazil, as the United States is Brazil’s second largest trading partner. Although, amidst the current global pandemic, it would be rather difficult for Papa John’s to begin its operations in Brazil. It also doesn’t help that the country is suffering a political crisis and that its current President is at the center of the country's warranted criticism. Team Pizza Brazil strongly advises Papa John’s to adopt a wait-and-see approach with COVID-19 before beginning its operations in Brazil, as additional measures that must be taken during a pandemic, especially in the food industry, can prove to be challenging.

Economic Environment

Between 2013 and 2014, Brazil witnessed a period of economic progression. The income of the poorest 40% of the population increased by an average of 7.1% between 2003 and 2014, compared to a 4.4% increase in income for the entire population. During this time period the Gini coefficient dropped 6.6%, which is indicative in the improvement of financial inequality within the country. Although, since the beginning of an economic crisis in 2014, the pace of poverty reduction has remained static which has affected the distribution of Brazil's income. Brazil’s GDP per capita (USD) in 2018 was 9,001.234 in comparison to 9,925.386 in the previous year (World Bank, 2018). In addition, Brazil’s GNI per capita (USD) in 2018 was 9,080 compared to 8,700 in 2017. GNI per capita is a measure of the average gross national income per person, which can aid in the assessment of market potential (Mullen, 2008). Although it is important to note that the per capita GNI can be misleading in countries with wide income disparities, such as Brazil (Mullen, 2008).

In 2019, Brazil ranked 109 out of 190 countries in the World Bank’s Ease of Doing Business Report, which was largely attributed to its problematic regulatory environment. There are a plethora of obstacles that discourage companies from the United States from doing business in Brazil which include: high tariffs, an ambiguous customs system, high and volatile tax burdens, and an exploited legal system. Brazil’s previous administration had a “Buy Brazil” policy that placed further obstacles for foreign traders, although the United States has been able to work with the Brazilian government to reduce non-tariff barriers and promote good regulatory practices. Brazil’s notorious regulation environment was further improved on March 16, 2018, with the publishing of Regulatory Impact Analysis (RIA) Guidelines and Elaboration Guide for Brazilian regulators by the Brazilian Executive Branch. With consistent collaboration between the United States and Brazil, Brazil’s regulatory environment is sure to be more transparent and attractive to foreign investors.

Import tariffs are also prominent in Brazil, as there are three taxes that account for the majority of import costs: The Import Duty, the Industrialized Product tax and the Merchandise and Service Circulation tax. Brazil allows for what is called an “ex tariff”, which is a tax reduction that can only be requested by local companies with import/export registration with customs. United States exporters must submit a technical application for review in order to qualify for an ex tariff. In regards to trading agreements, Brazil is a member of the Mercosur trading block. The Mercosur trading block has its own standards on a regional basis that must be ratified by each country before they are implemented, respectively. Some of these approved standards include: Food industry good manufacturing practices requirements and Code of good practice for standardization.

In 2020, Brazil has a population of 211,716,000 with a growth rate of 0.7%, compared to a population of 204,260,000 with a growth rate of 0.8% in 2015 (World Bank, 2020). In order to better comprehend the age-sex distribution within Brazil, a population pyramid was utilized by Team Pizza Brazil. The population pyramid provides valuable information beyond raw numbers, as the overall shape of the age-structured diagram indicates whether a population is growing, shrinking, or stable (Mullen, 2018). The number of potential customers within Brazil market segments can be identified. Our firm seeks to open a Papa John’s within Brazil, which is fairly unique as just about everyone at all ages like pizza as it is a globally accepted dish with lots of variety. Although, from a marketing perspective, Papa Johns is likely to segment the following groups: families with children under 18 years old and brand/quality conscious individuals between the ages of 20-40. Brazil’s population pyramid demonstrates a smaller percentage of individuals within the younger age groups. There seems to be little disparity in terms of gender in Brazil throughout all age groups except the elderly. The total fertility rate in Brazil in 2020 is 1.7, compared to 1.8 in 2015 (United States Census Bureau, 2020). The top portion of the population pyramid is of importance as it demonstrates an aging population with a decreased mortality rate. In 2020, the life expectancy at birth in Brazil is 75, compared to 68 in 1995 (United States Census Bureau, 2020). An increase in life expectancy can be seen as an increase in years of consumer consumption. In addition, Papa John’s slogan and reputation for “Better Ingredients. Better Pizza.” can prove to be beneficial amongst the aging population, as societies are more conscious about the food they eat and how the food is prepared.

Figure 1: Brazil’s Population Pyramid in 2020

Brazil's annual inflation rate eased to 2.4% in April 2020 from 3.3% in the previous and below market expectations of 2.5%. That was the lowest inflation rate since February 1999, as the sharp decline was offset by a fall in fuel prices amid the coronavirus pandemic (Trading Economics, 2020). In addition, in February 2020, prices decreased for food & beverages from 5.12 to 4.87 (Trading Economics, 2020). Prices for transport decreased from 4% to 1.61% (Trading Economics, 2020). Housing pricing had also decreased from 3.41% vs 3.29% (Trading Economics, 2020). On a monthly basis, consumer prices went up 0.07%. It was the lowest monthly inflation rate for a March month since the country’s “Real Plan” that was launched in 1994, as cost of personal expenses fell and prices declined at a faster pace for transport and household equipment (Trading Economics, 2020).

Brazil is a country on the rise with an economic freedom score of 53.7, as its ranking 144th freest in the 2020 Index (Index of Economic Freedom, 2020). Brazil’s increased by 1.8 points was attributed to its government integrity and investment freedom (Index of Economic Freedom, 2020). Brazil is the largest country in South America. Following the United States, it is the second largest economy in the Western Hemisphere, and the eighth fastest-growing source of Foreign Direct Investment (FDI) in the United States (International Trade Administration, 2020). Brazil’s economy continues to recover from a recession and achieved GDP growth of slightly more than 1% in 2018, as the country is seeking economic stability/flexibility through a pension system reform and a tax reform (Index of Economic Freedom, 2020). Brazil’s strong trading connection to the United States can prove to be beneficial for Papa John’s.

In Brazil the average household net-adjusted disposable income per capita is lower than the OECD average of USD 33,604 a year (OECD, 2020). In terms of employment, about 61% of people aged 15 to 64 in Brazil have a paid job, below the OECD employment average of 68% (OECD, 2020). In Brazil, 49% of adults aged 25-64 have completed upper secondary education, which is significantly lower than the OECD average of 78% (OECD, 2020). In respect to health, life expectancy at birth in Brazil is 75 years, compared to the OECD average of 80 years OECD, 2020). Although, with many of its categories below the OECD average, Brazilians rated their general life satisfaction as 6.4, which is similar to the OECD average of 6.5 (OECD, 2020). In summary, Papa John’s can also help boost the economy within Brazil by providing employment, as the country has a higher unemployment rate and a lower level of education.

Marketing Objectives

The strategy concerning market mix has made Papa John’s organization to remain a market competitively advantaged firm. Besides, the company applies the market mix (4Ps) to achieve the objectives and goals aligned in place. As of 2020, Papa John’s company will have expanded its brand in Brazil through innovative strategies. Following is a description of Papa John’s company objectives to gain the market competitive advantage. Products in the firm are speculated to reflect a solution to the needs of the customers. As a result, Papa John’s international intends to initiate the design of products, features, and names in order to stand out in the market competition (Charlton, 2019). In fact, the organization follows certain factors intended to boost the strategy of products. Hence, the factors comprise of variety, packaging, quality, name of the brand, features, as well as augmented services.

Also, the strategy of pricing aims at evaluating the strategy of product values that concerns the customers targeted. Notably, Harvey (2018) says Papa John’s intends to establish terms of credit, periods of payment, pricing lists as well as discounts in products for formulated discounts. However, the awareness has raised in the company that if the firm is motivated to adopt the strategy of pricing, it has to utilize the discounted prices that guarantee the market share. Brazilian, market players show retaliation that the company has tried to be aware of; thus; planning to initiate a war that involves an undesired price.

Reflecting on the Brazilian economy, Papa John’s firm has established a strategy in the front line to initiate a movement that regards the place/distribution approach towards achieving competitive advantage. The company intends to involve a combination of both indirect and direct distribution. Particularly, the firm intends to involve no intermediaries in the country while at the same time there is the need to specify on selected middlemen (Harvey, 2018). The latter includes the involvement of retailers and wholesalers as they are the most effective in the chain of distribution. However, the most effective mechanism that cannot be avoided in the goal to gain the marketing advantage, revolves around the strategy for distribution. Basically, the firm intends to outweigh its competitors by utilizing both the modern and traditional approaches in a promotion. The former (modern approaches) is a supplement to the already employed traditional mechanism. Hence the use of current media platforms, such as YouTube, Twitter, and Facebook among others is a deliberate advancement that would boost the reach of radios, televisions, and newspapers.

Our first main marketing objective is to increase sales by 10% of our products that are seen mostly in the United States as opposed to the traditional pizzas that are encountered in Brazil. We would like to introduce a new product line featuring our pizzas in the United States such as the typical flavors like Hawaiian pizza and margherita pizza.

Another marketing objective to explore is the beginning of a new era in the pizza industry. Pizza is known throughout the world as a likeable food to others. You can travel to a different country and be exposed to other foods however, if you do not feel comfortable pizza is the road to go. With a new beginning in Brazil, we will be the first pizza company to offer seafood pizza and pasta in the first year based on the liking of the customer's taste and preferences. We will also begin offering in the menu a product line of fruit juice, smoothies and milkshakes to accompany your pizza with it. This is an innovative way to revise our menu. Our goal is to revise our menu based on the new flavors and items based on a survey, which we are planning to continue doing so after every year since our opening.

As mentioned in our SWOT Analysis, Sao Paulo withholds a majority of pizzerias from our biggest competitors to the small business which has great popularity by its consumers. Our goal is to open 2 to 3 stores in the first two years in Sao Paulo and as the popularity of our pizza’s expand move into other cities such as Rio de Janeiro, Salvador, Brazilia, Fortaleza and Belo Horizonte. The long term expansion goal to open stores in these cities will take around 5 years based on the likeness from consumers in the first city of Sao Paulo.

SWOT Analysis

The Brazilian Pizza Market is one of the largest markets in the world. There are currently 25,000 pizzerias in Brazil which a majority can be located in the capital of Sao Paulo. The Brazilian Pizza Market is dominated by small businesses as they are the most knowledgeable business when it comes down to the taste of pizza in the Brazilian population however, their main issue comes to management, correct pricing and advertising. The most common pizzas that are ordered in Brazil are the Calabresa, Margherita and Portuguesa which are flavors that are not seen in the United States except for the Margherita which can be found in Italian restaurants. Our main competitor in Brazil is Patroni Pizza, a firm that has been established for 30 years, has more than 130 franchises in 13 Brazilian states and has had a growth in revenue of 30%. Although this is our main competitor we still have to remember that there are other international firms that are currently in the Brazilian pizza market such as Domino’s and Pizza Hut. Pizza Hut has been present in Brazil since 1989 and now has 67 restaurants spread over nine states. Domino’s has 54 restaurants present in 18 states.

Surprisingly the SWOT matrix of Papa John’s international in Brazil would compare the most achievable sectors of the firm as compared to its competitive position in the market. Luckily, the company’s strengths are attained regarding Brazilian internal advantages. That is the reach in distribution and the structure concerning pricing. The firm has the most affordable number of outlets that fit a timely manner in Brazil. Another of Papa John’s strengths is that they take pride on it’s highlight skilled workforce as they have implemented successful training and learning programs by investing in huge training resources in training and development of its new employees which does not only result in the high skills that it’s employees will have but it creates motivation to exceed the expectations that Papa John’s has invested on. Also, the latter is achievable through the production of minimal costs, in which the firm disposal products at a lower price as compared to other market players in Brazil. However, the firm has been weakened in the promotion/advertising sector; thus, the emergence of modern technologies has outweighed the traditional approaches used in Brazil by the firm. The weakness is solvable through present internet and social media opportunities that arise in the country; thus, the opportunity is more effective in the entertainment industry (Williamson, 2018). In fact, the organization might want to expand the services based on the existence of Brazilian internet users. Perhaps, adverts might appear in between entertainment contents in which most of the Brazilians spend their time on Twitter, Instagram, and Facebook platforms (Charlton, 2018).

In regards to the threats, One of the biggest threats that Papa John’s will encounter is new technology implemented by its competitors. As explained under weaknesses, Papa John’s has the emergency to move from the traditional ways to the new century and as technology advances they need to advance as well since their competitors have taken the necessary measures to stay abreast with technology and implement easier ways for the user to order their products. The suppliers in the fast food industry become a threat in which Papa’s John’s company might want to employ more inputs to acquire the best suppliers. Another threat that Papa John’s is the go green movement. As society becomes more aware of the damage done to our environment, consumers are looking to purchase products from companies that are taking the necessary steps to protect our planet and Papa John’s continues with their traditional techniques without preference of the consumers caring of the environment as opposed to their competitors.

Target Market, Segmentation and positioning

Industry Context Analysis

Since the early 2000s, there have been several changes to the habits of Brazilians when it came to the food industry. There has been major growth in the food industry as a whole due to fundamental changes that have changed the way people eat. Consumers in Brazil now want more convenient, yet tasty foods. With this growth, the Brazilian foodservice market is now the fourth largest in the world. In total, there are approximately 1 million food service establishments in Brazil. Majority of the restaurants are independents meaning they are small businesses. The most popular restaurant style in Brazil are self-serving restaurants known as Kilo restaurants. These restaurants are popular during the weekdays while traditional restaurants such as pizza, barbeque are more popular during the weekends.

The markets for franchised food chains have also grown in Brazil. The largest food chains in Brazil include Habib’s, Spoleto, and Viena. Habib’s is the largest and is an affordable Arabic style fast food chain. Habib has approximately 475 restaurants located in São Paulo. Spoleto is the second largest and is an Italian style food chain which is mainly found in local shopping malls with a total of 348 restaurants. Viena, a self-service kilo restaurant, is the third largest fast food chain, with more than 70 restaurants. The largest international food chains in Brazil are Pizza Hut and Outback Steakhouse. Below is an in-depth breakdown of the food service market and its performance throughout the last several years Country Focus: Brazil, 2016).

Food Service market Performance (Fonseca, 2018).

In Brazil, pizza orders account for 26% of the total orders in the food industry. The market for pizza has grown rapidly over the last decade in Brazil. The market has expanded so much in Brazil, that currently they now have the second largest pizza market in the world. The first and largest pizza market in the world is the United States. Majority of pizzerias are family owned small businesses. As a result, 60% of pizzerias cease operation within their first year of businesses. Many of these pizzerias do not continue operating successfully due to the lack of knowledge management has when it comes to establishing their business in the market and choosing the correct pricing of their pizza. The pizza market in Brazil also provides consumers with a multitude of unique toppings and styles of pizza. There are over 230 different styles of pizzas for consumers in Brazil. Pizzerias typically offer approximately 70 of the different styles and toppings. The top three common pizza toppings in Brazil include Calabresa, Portuguesa, and Margherita. In Brazil, most of the pizzerias are located in São Paulo. The population in São Paulo are the second largest pizza consumers in the world. The city falls in second place behind New York. With its large pizza consumption, São Paulo also has the top three pizza chains which include Patroni Pizza, Domino’s and Pizza Hut (Patrick Bruha Staff Writer The Brazil Business, 2014).

Target Market

Papa John’s target market went from a hard focus on the older generations and has changed to target the youth. With going to Brazil our target market are middle income heads of households, who tend to have a higher than average income. They tend to be older than families or teenagers/young adults with disposable income and are often brand-conscious, loyal customers. They are also a more stable market during tough economic times (Viveiros, 2014). “When it comes to sensing consumer appetite at the right time and in the right place, quick serving restaurants like Papa John’s need to be increasingly innovative to engage their audience (Case study, 2015)”. In the U.S Papa John uses football season to target their audience, since Brazil’s most popular sport is soccer, we will follow Papa John's path and use that target marketing strategy. When soccer season is over we will continue to target our original audience promoting family time, birthday gathers, get to gethers and any other celebration. Where there is a party/celebration Papa John is there for your catering needs. We have a meal for anyone with any dietary restrictions. Brazilians have less disposable income, Papa John’s will continue to grow in this country while charging premium prices for our product and while retaining customer loyalty. According to the company’s 2014 annual 10K report, the goal of Papa John’s Pizza is, “to build the strongest brand loyalty in the industry (Papa John's Pizza, 2014).”

Papa John’s does not want to be successful as possible so they will have a large target market. Market targeting becomes necessary when it’s time to determine proper segmentation. “Here are four segments to consider in 2014 when determining a proper cross-section of people with whom to market the chain’s products. Families with children 18 and under, when the meals involve them, 68% are reporting that pizza is involved in meal planning. Children, ages 3-11, prefer pizza as their favorite choice for lunch or dinner (Franchise Holdings LLC, 2015).”

“When John Schnatter started Papa John’s Pizza, he determined that of the competitors in the market, Domino’s was known for speed, Pizza Hut for its variety, Little Caesar’s for its price, and about 65% of the others were independent restaurants. He decided his competitive advantage would be quality (Baer, 2014).” In 1997 the pizza chain teamed up with Cybermeals, Inc. to create an online takeout and delivery platform to test markets. This motivated the executive team to keep with perceptions of great customer service and high quality products. “Demographic studies have shown that customers who surf the Web frequently order pizza for takeout and delivery” (Rubenstein, 1997). Papa John’s has innovated into a new segment and was known in the market by positioning itself in Cyberspace.

Industry Research

Product strategy

Papa John’s main priority when it comes to delivering products to customers is that they are provided with top-quality ingredients and products that are consistent across all of their stores, domestically and globally. This further exhibits how important it is to the company to continually build trust, reliability, and consistency in their products, which are crucial factors that determine success in Brazil. Papa John’s also gives customers in the pizza segment an abundance of options, ranging from pizza size, crust, and toppings (including taking into consideration) for vegetarians.

“Popular pizzas both in veg and non-veg category are as follows-

· Classic Veg – Margherita and Say Cheese Single

· Papa’s Favorites Veg – Paneer Tandoori, Spicy Pepper Roast and Garden Special

· Heritage Veg – Simply Veggie, Farm Fresh and Veg Curry Pizza

· Exotic Veg – Papa’s Paneer, Fajita Pizza and Classic Veggie

· Papa’s Favourites Non-Veg – Super Papa’s, Chicken Super Papa’s, All the Meats and Lamb Pepperoni Pizza

· Exotic Non-Veg – Fajita Pizza and Spicy Pepper Roast

· Heritage Non-Veg – Murg Curry Pizza and Chicken Barbeque

· Classic Non-Veg – Chicken Delight and Papa’s Italian Chicken Sausage” (Bhasin, 2019)

In order for product strategy to be successful in Brazil it is important to provide what Papa John’s stands for while taking into consideration their culture. With the continuing popularity growth for the pizza market in Brazil, there needs to be a continuance of the same product strategy, while offering special limited time offering products with inclusion of Brazilian culture. For side items or appetizers, there are a variety of breadsticks, chicken wings, and chicken poppers. “There are three dessert items on the menu, including the Red Kettle cookie, which includes a donation to the Salvation Army Red Kettle campaign, the family-size chocolate chip cookie, and the Cinnapie. There is also a variety of dipping sauces and condiments to top the pizza. Finally, Pepsi beverage products are available to quench the customer’s thirst” (Papa John's Pizza, 2014).

Price determination

Promotion Strategy

Papa John’s uses a multi-channel approach for advertising and promotion. The advertising materials include traditional channels such as television, newspapers, and radio. Papa John’s also uses social media channels to further increase engagement such as Facebook, Instagram, and YouTube. Along with these platforms, Papa John’s is known for partnering with popular sports to further promote their brand. Here in the United States, Papa John’s is a major sponsor in the national Football League’s Superbowl and other popular games that target large audiences. They also are able to sell their pizza in many sports stadiums across the country. Another factor that aids in promoting their pizza are the incentives used to maintain their audiences as well as attract new customers. Reward systems are put into place for customers who consistently buy pizza. This system ensures they receive points which can result in discounts when they are accumulated (Team, M. S. , 2020).

For proper expansion into Brazil, Papa John’s will be able to maintain its traditional marketing strategies for promotion however, it is imperative they incorporate Brazil’s consumer culture. All marketing materials in print and media must be translated properly into Brazilian Portuguese. Papa John’s will need to take things a step further and localize the digital and printed material. Portuguese is the main language however; certain areas may have consumers who speak a variation of Portuguese. Digital promotion should be increased, due to the fact that the majority of the marketing advertisements in Brazil are digital. Due to Papa John’s increased participation in sporting events, Papa John’s would have to adjust all sports related content to soccer. Majority of their sponsorships and material are designed specifically for American football. The new marketing continent would need to be switched to Brazilian football which is similar to American soccer (Shofner, n.d.).

Distribution Strategy

Methods of Payments

Price Determination

HR requirements

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