Custom «Snyder's in Brazil» Essay Paper Sample

Introduction

A simple portfolio argument posits that if a firm’s covariance of sales in multiple nations is imperfect, the spreading of these sales in multiple nations will be tied to more stable overall sales, which is expected to lead to the reduced likelihood of failure in general and failure within the international markets. The question regarding how firms enter, operate, and succeed in foreign nations has been consistent and persistent within the realms of research in business and literature in strategic marketing for years (Schellenberg, et al., 2018). The rationale for the persistence of this question is the recognition that the strategic success and failure of any organization are determined by the market entry strategy selected and implemented by the company (Schellenberg et al., 2018). Further, international market entry is a highly conspicuous form of international expansion. The selection of an international approach to market entry is together with the market entered among the most vital decisions and firm that intend to expand into the international market has to make (Ahi et al., 2017). The two topics are the most common in the context of international business and international marketing. Therefore, understanding the target market and target country becomes among the most critical factors to ensure successful and positive outcomes in the expansion and undertaking and the established business venture. Snyder's-Lance intends to venture into the Brazilian market. Therefore, the purpose of this paper is to provide an analysis of the international marketing approaches the company employs when making adjustments to its products and/or services to fit in the various markets where it operates. In addition, the paper offers a critical analysis of the opportunities and risks tied to market entry in Brazil’s market.

Company Overview

Snyder’s-Lance, Inc. is a national company located in North Carolina (NC) and produces snacks. The company was established in 1909 and falls within the leading brands with a broad range of branded products, complementary manufacturing capacity, and a national distribution network (Snyder-Lance, Inc, 2016). The current state of the company is from the merger between Lance and Snyder’s companies with the Lance segment offering crackers, cookies, pretzels, potato chips, nuts, and other snacks while the Snyder's-Lance segment produces branded sandwich crackers, pretzels, tortilla chips, nuts, popcorn, and other snacks (Snyder-Lance, Inc, 2016). The company has multinational operations in Canada, Europe, and the Asia Pacific. Through an adaptation approach that will be further discussed later in the paper, the company has managed to penetrate the international market. The company has over a century of success in its operations and intends to expand into the Brazilian market.

International Marketing Approaches Employed by Snyder's-Lance, Inc.

Snyder's-Lance, Inc. (2017) indicates that novel baking and cooking approaches, exciting new flavors, and clean ingredients fuel the desire for better snacks by consumers. To meet these desires the company within the American market released various product offerings to transform the way the world is snacking by incorporating better ingredients, quality, and taste (Snyder's-Lance, Inc., 2017). The innovations the company has made include the use of revolutionary new baking and cooking methods (Snyder's-Lance, Inc., 2017). Furthermore, the transformations have been fuelled by the lifestyle and demographic changes that have increased snacking which presently comprises half of the entire eating occasions (Snyder's-Lance, Inc., 2017). Therefore, the company introduced new delicious and high-quality products to meet the increasing demand and provide better snacking options that are healthier, with multiple flavors and textures, and contain ingredients of the highest quality (Snyder's-Lance, Inc., 2017). The company  is uniquely positioned to deliver what the customers want and are increasing its marketing efforts to promote this message (Snyder's-Lance, Inc., 2015). The company is primarily driven by innovation, understanding the role of snacks in the consumers’ lives, and having a clear vision for every brand.

 Considering the adjustments the company makes discussed above, it is evident that the company employs the adaptation approach to marketing. Adaptation implies that every country/market has its unique marketing mix (Adams, 2017). The objective of this strategy is to meet the unique consumer needs of a specific market, planning the business activities with the goal of meeting the specific needs of local consumers while respecting their values (Adams, 2017). Therefore, the company has to make specific adjustments to meet the prevailing market demands and situations and is effective where there are differences between customers, local competitive conditions, local legal conditions/requirements, and a high degree of services offered by the company. Adaptation involves making price, promotion, and packaging changes to the product or changing the product itself to meet the preferences and needs of the specific country (Adams, 2017). The adaptation is done to attain a competitive advantage when entering new markets.

The corporation has operations in the US, Canada, Europe, and Asia Pacific. When expanding into new international markets, Snyder's-Lance typically uses a market entry strategy known as the "adaptation approach." This approach involves adapting the company's products and marketing mix to the local culture and preferences of the target market. For example, in China, Snyder's-Lance offers a variety of flavors of its popular Lance crackers that are specifically tailored to Chinese consumers, such as green onion and sesame.

Target Country Overview

The country chosen for this analysis is Brazil; The opportunities associated with launching Snyder's-Lance products in Brazil include the following: Brazil has a vast and rising market. Brazil is the world's fifth biggest country, with a population of approximately 200 million people. In Brazil, the snack food market is rising at a pace of 5% each year. Brazil has a young and affluent population. Over 60% of the population is under the age of 35, and the middle class is expected to grow from 50 million to 120 million people by 2030. This provides a large potential market for Snyder's-Lance products. There is strong demand for snacks in Brazil. Brazilians consume an average of snacks per day, which is higher than the global average.

SWOT Analysis

Opportunities

The country of interest is Brazil and it has multiple risks and opportunities for Snyder's-Lance products. Among the opportunities include the country’s large population (212.6 million) which offers a large customer base for the company. In addition, the snack market in the country is rapidly rising at a rate of 5% annually (Grivoyannis, 2019). Furthermore, the country has a large youth population with over 60% of the population under the age of 35 which comprises the highest population of snack consumers. In addition, the country has a growing middle class which is the highest consumer of snacks. This population is projected to grow from 50 million to 120 million people by 2030 (Grivoyannis, 2019). Therefore, they provide a huge pool of potential consumers of Snyder’s-Lance products.

Further, market analysis in the country highlights increased demand for snacks in the country. An earlier study by Duffey et al. (2013) established that 74% of Brazilians aged at least 10 years snacked with each taking an average of 1.6 snacks daily. In addition, 23% of the sampled population were established to be heavy snackers and took a minimum of three snacks daily (Duffey et al., 2013). Further, snacking comprised 21% of the sample’s daily energy intake and 35.5% for the heavy snackers. The non-snackers used 1548 kcal daily, the light snackers used 1–2 snacks/daily, and the heavy snackers consumed more daily energy which was between 1929 and 2334 kcal daily (Duffey, et al., 2013). More recent findings by Statista Research Department (2022) highlight that the savory snacks market in Brazil amounted to approximately $2 billion which was an increase of $0.1 billion from the previous year. The Statista Research Department (2022) projected that the figure will go beyond $2.4 billion by 2026. These figures are indicative of the numerous opportunities for the company to establish itself in Brazil.

Risks

While there are multiple opportunities, the country also has multiple risks. Among the risks is the significant competition within the snack market. As highlighted by Mordor Intelligence (2022) the snack bar market in Brazil is significantly concentrated by major players who occupy a significant portion of the market share. The major market players in the country include Kellog, Nestle, Hershey, PepsiCo, and Alfred Ritter GmbH & Co. KG, to mention a few (Mordor Intelligence, 2022). The increased competition from such players who also use the adoption strategy would pose a serious risk to the success of Snyder's-Lance. In addition, there are significant regulations related to labeling and advertising food products and this would prevent the company from conducting effective marketing. Further, the country’s currency is quite volatile implying that the company would experience challenges in setting appropriate prices. While there are numerous risks, overall, the country’s opportunities, particularly its market size and economic growth make it suitable and attractive for Snyder's-Lance. The opportunities and risks are summarized in Table 1.

Table 1:

Summary of risks and opportunities in the Brazilian Market

Snyder's Marketing Tactics to Sell Goods in International Markets

• Exporting

Advertising your products in the nations where you want to sell them is part of exporting.

• Licensing

When one corporation provides the permission to use or sell goods to another, this is known as licensing. If Snyder's firm has a popular product and the company to which it seeks to license it has a large market, this is a viable option.

• Business ownership

If Snyder's firm seeks to increase sales globally but doesn't want to deal with shipping and distribution, it can investigate buying an existing company in the country where it wants to trade. Having a company with a global presence provides your company legitimacy as a business owner, which can assist increase sales.

• Outsourcing

Snyder's Business has the option of producing the products, purchasing them, or collaborating with a foreign producer.

• Countertrade

This is a frequent type of worldwide marketing strategy. Countertrading is a barter method by which Snyder's business can barter items instead of selling them.

Market Entry Opportunities

Apart from the opportunities highlighted above, there are numerous opportunities for market entry. These opportunities include the potential for expanding into a new market. The rationale is that the world provides a large market with billions of potential customers. A company’s purchasing power increases when it expands into new global markets. The increased number of customers generates more profit and reduces the new market entry costs. In addition, Brazil provides a new source of talent through the recruitment of locals which is more cost-effective for the company. The new employees have an in-depth comprehension of the local market and culture. Further, entry into the market offers the advantages inherent in the economies of scale which will ensure cost savings for the company as it launches in the new market that will ensure effectiveness and efficiency in its operations. The economies of scale ensure higher outputs at reduced costs as the fixed and variable costs are spread over a greater quantity of goods and services. Finally, there is the aspect of competitive advantage inherent in entering a new market. The company will have the first movers’ advantage in the market which will allow it to build its brand image. A summary of these factors and their impact is provided in Table 2.

Table 2:

Summary of market entry opportunities.

Marketing Mix Plan

Price

Snack market in Brazil is highly competitive.  Therefore, companies focus on quality and pricing to attract customers.  Consumers in the country looks for companies offering better pricing for their snacks.  Major snack companies such as The Kellogg Company, Nestlé SA, and The Hershey Company have embraced competitive pricing to attract customers in Brazil snack market (Research and Market, n.d.). Snyder’s-Lance, Inc should assume the position of a price leader by streamlining its operation process to cut operation costs and pass the low cost to customers in terms of low product pricing.

Place

Brazil has recorded expanding supermarket and hypermarket chains. Most of the snack distribution channels are concentrated in supermarkets and hypermarkets which has a share of over 70% of the distribution channel. specialist retailers and variety stores are also growing at a faster pace. Additionally, there is increasing adoption of e-commerce in sale of snacks which plays a major role in repetitive pattern of snack consumption in the country (Research and Market, n.d.). This offers international brands opportunities for further accelerating their sales. Therefore, Snyder’s-Lance, Inc should partner with these chains which are mainly located in urban settings in the country.

Product

There is increased snacking trend in Brazil contributed by busy lifestyles which is primarily driving the market. Consumers have also increased their demand for health and wellness products and cereal-based snacks (Research and Market, n.d.). cereal bars, for instance have become one of the fastest growing segments of snack in the market.  The high sale of cereal bars has been driven by growing attention to taste and culture. This demand has accelerated the growth of snack market in Brazil.  The growing demand for snacks in the country has given snack companies opportunity for growth.

Promotion

The Brazil snack market is a very competitive market. major companies have invested in product promotion to increase sale and enhance competitive advantages. Companies are investing in interactive ads to connect with their customers. Snyder’s-Lance can use existing media in Brazil to promote its products. Popular product promotion media including Facebook, twitter and Instagram. Other platforms include TV advertisements and billboards.

Challenges and Recommendations

Currency fluctuations as well as political uncertainty are two main market entry concerns that Snyder's company may encounter. Foreign exchange defined as the risk of currency value variations, which are mainly caused by the home currency appreciating against a foreign currency.

Brazil is exposed to political risk comes when governments change policies which might have a negative impact on enterprises, such as trade restrictions. The company may also face administration and control challenges, which is determined by the structure of the corporation. The company is prone to the risks of human mistake. One of the dangers it cannot really manage is human mistake. These are the numerous small errors performed repeatedly, such as incorrect currency conversion. Additionally, it potentially faces logistical problems These are the hazards connected with service or product transportation, delivery, and delaying. Above all, issues with technology may impede its success in international market. One major risk of entering a new market is that technology will fail to perform as expected.

To be successful in the international marketplace, Snyder-Lance, Inc must carefully consider the unique needs of each foreign market and adjust their products and services accordingly. This was certainly the case for Snyder's of Hanover, a Pennsylvania-based pretzel company that has found success in a variety of international markets.

Conclusion

Companies today target at increasing their profits by promoting sales in foreign nations. However, to achieve a significant number of sales the companies have to engage in robust marketing strategies. The sales or establishment of operations in a foreign nation demands an understanding of the market and coming up with the appropriate market entry and marketing strategies to suit the needs and demands of the country. Snyder’s-Lance, Inc. is an American company intending to expand to the Brazilian market, therefore, there is a need for the company to understand this market before venturing into it. Snyder's has been successful in its international expansion, due in part to its ability to adapt its products and marketing to the unique needs of each foreign market. The company's next step is to enter the Brazilian market, where it sees significant potential for growth. There are several reasons why Brazil is an attractive market for Snyder's. First, Brazil has a large population of over 200 million people, which provides a significant potential customer base. In addition, Brazil is a rapidly growing economy, with a GDP that is expected to reach $3.5 trillion by 2025. This economic growth is expected to lead to an increase in the middle class, which will provide Snyder's with a new group of potential customers. Also, Brazil is home to several large events that could provide Snyder's with an opportunity to increase its sales, such as the Olympic Games, which will be held in Rio de Janeiro in 2016.However, there are also several risks associated with entering the Brazilian market. First, the Brazilian economy is currently facing a few challenges, including high inflation and a weak currency. These factors could lead to a decrease in consumer spending, which would impact Snyder's sales. In addition, Brazil is a highly competitive marketplace, with several local and international companies competing for market share. Snyder's will need to carefully consider its pricing and marketing strategy to succeed in this crowded marketplace. Despite the risks, Brazil is a potentially lucrative market for Snyder's due to its large population and rapid economic growth. The company will need to carefully consider its product mix and marketing strategy to succeed in this new market. From the analysis provided above, it is recommended that the company should continue using its adaptation approach to marketing to ensure it produce products that meets the needs and demands of Brazil consumers.