The internationalization of micro-and p equenas Brazilian companies through international marketing
Summary
The Micro and Small Business , exercises m a key role in the Brazilian economy, they account for 98% of merchand the Brazilian business, and has high capacity to generate jobs . However, even with the degree of importance that this segment represents for the Brazilian economy, the mortality rate of Micro and Small Enterprises is very high. Most often, this segment closes its doors for its managers are not prepared to deal with the constant changes and market demands.
The new situation created by globalization, increased competition not only in the global market, but also in the domestic market, the high demand for imported products with competitive prices is one of the factors that contribute much to the early closing of Micro and Small Enterprises, which did not fit the new scenario. On the other hand has created new op ortunidades for this segment which is the ability to expand into foreign markets, internationalizing their activities. The internationalization process is not simple nor easy, requires the Micro and Small Enterprise a series of adaptations and behavioral changes throughout the company structure, as well as a good structure of international marketing for the company to indicate how their products and services will reach the hands of the target market and how it will continue to serve this market and changing demands.
Words Ch bird : Micro and Small Enterprises. Economics. Globalization. Internationalization. International Marketing.
A. Introduction
The current global scenario, is the result of constant changes caused by globalization, this in turn has eliminated all barriers to existing territorial marketing products and services between countries causing a fierce competition between companies regardless of size and industry. However for the Brazilian Micro and Small Enterprises, which already have a history of high rates of early mortality, there is no adaptation to the global scenario will result in a significant increase in mortality rates already.
The objective of this work is to show that the Micro and Small Enterprises, can and should enter the international market, through a rigorous strategic planning and marketing practices internationally and this segment will also show that the entry in the international market requires a change in organizational structure and culture of Micro and Small Enterprise.
The methodology used was the bibliographic, books, articles, newsletters, journals, as well as the explicit use of knowledge obtained in the classroom, through the course of business administration with an emphasis on foreign trade.
The first stage of this article discusses the concept and scenario of Brazilian Micro and Small Enterprises, as well as the importance of this sector to the economy. Then we approached the context of globalization and the necessity of Micro and Small Enterprise internationalize their activities.
Finally it is shown the concept of international marketing and its applications, as well as the dire need to use this tool to achieve success in the internationalization process of Micro and Small Enterprise.
Two. Micro and Small Enterprises
2.1. Small and Medium Enterprises in the Brazilian economy
A 2006 study by the Brazilian Service to Support Micro and Small Enterprise (SEBRAE), revealed that in 2004 Brazil had 5110.285 (five million, one hundred ten thousand two hundred and eighty-five) companies. Of this total 5028.318 (five million and twenty-eight thousand, three hundred eighteen) are micro and small enterprises.
This segment plays a key role in the Brazilian economy, they contribute significantly to economic growth and development of the country, since they represent 98% of companies, 25% of GDP, 2.4% of exports, 20% of the wealth generated the nation and is still responsible for generation of 14 million jobs, which corresponds to 60% of the formal job of the country.
According to a survey conducted in 2008 by Babson College in the United States as the leading business school in the world with a focus on entrepreneurship in partnership with London Business School in England, Brazil is one of the most entrepreneurial countries in the world, getting in seventh place among the thirty-five participating in the Global Entrepreneuship Monitor (GEM).
But these numbers and results could be even larger if the entrepreneurs were more prepared to face the new paradigms imposed by globalization, but they also receive help from the government through a government policy that encourages entrepreneurship and simultaneously drop the numerous tax and bureaucratic barriers that currently exist.
2.2. Concept of Micro and Small Enterprises
There is no unanimity about the criteria for the classification of Micro and Small Enterprises, the classification of this segment may vary according to the agencies or institutions that make this classification according to its segments and purposes.
Brazilian Service to Support Micro and Small Enterprise (SEBRAE): Micro to 9 employees. Small Businesses will be 49 to 10 employees.
National Development Bank (BNDES) uses the criterion of participating countries of the Southern Common Market (MERCOSUR), for credit. Microenterprises to $ 400,000. Small Business for $ 400,000 to $ 3.5 million.
Law No. 9841 of 10/5/1999: Micro up to 244 thousand dollars. Small Business of 244 thousand dollars to 1.2 million.
2.3. Mortality of Brazilian Micro and Small Enterprises
Despite the importance that this segment represents for the Brazilian economy, the Micro and Small Enterprises have high mortality rates.
According SEBRAE (2005) most of the Micro and Small Enterprises closed its doors before completing four years of activity. Also according to SEBRAE (2005) the main reason for such high mortality is related to management failures, emphasizing problems of lack of planning, lack of expertise and knowledge of an active market, the unavailability of working capital and financial problems, followed by factors related to high taxation, poor access to credit, economic and cyclical.
Analyzing the Macro Environment point of view, there are new variables that influence the mortality of Micro and Small Enterprises, the rate of inflation, high domestic demand, social and political instability, are prime examples.
In this context it is also important to identify the factors that influence the Micro environment for the success of this segment in accordance with SEBRAE (2005), good knowledge of market performance (habits, cultures and customs) is in first place followed by a good strategy sales. In the group of attributes perseverance, creativity and courage to take business risk to prominence.
By this scenario above, the internationalization of Micro and Small Enterprises, an alternative is to change that thrives, internationalization is a competitive advantage that provides this segment, a global dimension in the processes of buying and selling.
Three. Internationalization
3.1. Globalization
Before entering in the context of internationalization, necessarily must know and analyze the phenomenon of globalization, which increasingly influences all activities of the global society.
Globalization breaks down all borders and territorial “shortened” the distance between countries and even between continents.
The term globalization arises from the need to minimize the distance and cost, service of interest, ease of negotiations, involving the search for contentment of two or more parties. (MACHADO et al, 2008, p.15).
3.2. Internationalization of Companies
Internationalization is the natural way for companies to remain competitive both in the international market as the domestic market (RODRIGUES, 2004, p.195). Globalization has eliminated all territorial barriers between countries, so companies that do not conform to this new concept will lose their market share even in the domestic market.
This scenario is no different for Micro and Small Enterprises, they also must adjust to new concepts, or they will lose will be the first territory, since they are much more fragile than larger companies.
The internationalization of enterprises is the active participation of a company or in any foreign market, but in most cases the companies involved are actively achieve success, the internationalization process is not simple and trouble-free, on the contrary is a complex process that requires much study and planning.
Companies wishing to enter this segment they are micro, small, medium or large, must change their organizational mind through a continuous adjustment of the mentality and behavior of all persons involved in the process of internationalization.
In the case of Micro and Small Enterprises, which mostly has certain shortcomings of skilled professionals due to the low wages offered, the change of organizational mindset is not sufficient for entering this market. These companies must also have qualified, either through training of existing professionals within the organization, or the hiring of new human capital.
3.2.1 . The first steps in the international market
Companies wishing to enter the international market should be aware that all activities aimed at or related to foreign trade, must be based on strategies that will meet the global needs, even if the business principle extend to just one country.
The entry into foreign markets, should be done cautiously, responsibly, ethically and planned, otherwise the chances of success are nil.
According to Rodrigues (2004: p.196)
The company that want to export and really want to enter the international market requires firstly a professional attitude and above all of “export culture”, that is, under no circumstances may leave the international market because the market has further improved. Thus, it should define within their line of products or services which it is or export, and for which market you want to put that your product or service.
Based on the text of Robinson (2004), the internationalization of Micro and Small Enterprises, require the same execution of some steps, so that the results are positive.
Market Research: Market research aims to evaluate and identify the real possibilities of acceptance of goods or services. The selection of the target market is made with diagnoses related to cultural aspects, economic, legal, tax, political and geographical, of the target country according to the company’s export capacity. In the following chapter this theme is treated with greater focus.
Study of legislation: Regardless of the method chosen for internationalization, the company must meet the legal and tax systems practiced in the country where their products or services are intended.
Choice of technical and administrative framework: As mentioned earlier, internationalization is not a simple process therefore requires a cadre of trained staff and knowledge oriented to foreign trade. Recalling that the staff should be trained, so that based on Micro and Small Enterprise opted to internationalize their activities.
Training of sales prices: The pricing should be based on costs of inputs, transport costs, expenses related to the payment of skilled labor, taxes and financing, but should take into account the prices of the competition and not fitting only cost to the sector the responsibility for pricing.
The fixing of the selling price does not fall exclusively to the field of costs, even with the entire arsenal of information available to the internal point of view and does not fit completely to the marketing sector, with the full range of market data and his predictions (…) and demand not only work based on what exists today, but also (and especially) when it expects will occur in the future. ” (Apud RODRIGUES MARTINS, 2000, p.238).
Business Travel: To enter the international market, it is also necessary to conduct business in the target country will maintain direct contact with importers, study the market and promote sales.
3.2.2 . Paths to Internationalization
There are many ways for companies to enter international trade, the company must do an analysis to identify the method that meets their needs for profit and promotion of its products and services in foreign markets.
The company may open a branch of his company in the country to where you want to export products, but this process requires the availability of a big entrepreneurial capital, is a strategy that can be very efficient, but the cost of implementing and maintaining a branch are high, and thus impractical in most cases, for Micro and Small Enterprises.
The sales agents are individuals or entities that represent the exporter in a particular market, if the choice of means, both parties must make a contract which determines the rights and obligations borne by any party such as the amount of commissions , transportation, distribution and responsibilities as to the exclusivity. This medium can be a good alternative for Micro and Small Companies wishing to enter the foreign market, but can not afford to open a branch abroad.
The distributors are entrepreneurs importers after import is the distribution of goods in national chain stores to small, is an alternative to the Micro and Small Businesses that want to internationalize and the principle has no capital, but in most cases the profit margins for exporters are low, preventing the business.
In the process of direct export, the goods being exported by the producer is billed to the importer, this process requires that the exporter knows the entire export process. Although this process is more complex requiring more preparation and a greater availability of financial capital, in most cases is the most suitable, as are direct contacts between exporter and importer, and it really increased the chances of new businesses and partnerships. The Micro and Small enterprise, must make a clear analysis of their production capacity, so you can always meet the demand requested by the importer.
Already the case of an indirect export, the export process occurs within the internal market. The exporter is selling its products to companies which then send the goods to foreign markets. An example are the Trading Companies. However if later the Micro and Small Entrepreneurs want to make a direct export, the difficulty may be higher, since your product or your brand will be linked to another company, which already has a share of this market.
The export consortia are mostly formed by companies that offer similar or complementary products, the internationalization of Small and Medium Enterprises through a consortium has advantages such as low financial investment, but otherwise has the disadvantages that would decision making power of the entrepreneur, since decisions must be made jointly by all participants in the consortium.
4. International Marketing
4.1. Marketing
Contrary to what many think, marketing is not just advertising and sales definition and function goes far beyond that.
According Bamossy, Semenik (1996: p: 6)
Marketing is the process of planning and executing the concept, price, communication and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.
02.04. International Marketing
Globalisation has created a new scenario for the trade, the processes related to production, distribution, sale and competitiveness, will now be smaller overall.
The new paradigms imposed by globalization, caused a major shift in consumer behavior, since these new paradigms provided a large increase in the variety of products and services will be available to consumers, currently in the majority of countries a consumer can purchase goods and services originating from any corner of the planet.
This new scenario is increasingly demanding, fast setup and integration between the markets for the survival of businesses, both in relation to the external market, as compared to the internal market, in this context based marketing strategies can help firms all sizes to adapt to constant changes, and Marketing in turn must pay attention to any changes that may cause glare, before the market behavior.
As reported Hartline & Ferrell (2005:19):
One of the biggest frustrations is the change in marketing: consumers change, competitors change and until the organization of marketing changes. Strategies very successful today will not work tomorrow. Today, consumers buy products that tomorrow there will be more interested.
The marketing concept is universal, but their practices and strategies vary according to country and market. The International Marketing is one that focuses its strategies for market that is not the household.
A good international marketing strategy should begin by identifying all external environmental factors that may be interfering positively or negatively to achieving business partnerships or in certain countries. The greater the amount of information that the entrepreneur has, the greater the chances of success.
Whatever means is chosen for the internationalization of Micro and Small Enterprise, a good international marketing strategy is essential to success in foreign markets, the marketing will help the company identify the product or service will meet the needs and expectations of consumers the target country, but will also help empresar to segment the market that will work. To reach this definition should study and understand the behavior of the target market.
Market research is the first step and will help the Micro and Small Enterprises to charting sales strategies, guiding these companies for the process of creating or adapting products and services to meet these needs and demands of international market.
Even within this process micro and small enterprises, identify your competitors, and have assessed the market share, what prices, what are the strengths and vulnerabilities presented by the competition.
To carry out this research the Micro and Small Enterprises can hire the services of professionals or firms specializing in trade practices abroad or international marketing, but like most micro and small enterprises have few financial resources, another way to implement these services is to seek help and guidance from the governmental organizations and entities will be facing this segment.
4.2.1. Demographic Environment
The population is based on measurable characteristics of the population such as age, income, gender, education, number of children, population and ethnic compositions. Through the study population, marketers can identify consumer behaviors and preferences of potential customers, and thus help micro and small businesses to develop or adapt their products and services so they meet the needs and expectations of market segmentation target .
4.2.2. Sociocultural Environment
The study of this environment should be done in a very cautious and careful, because it is directly linked to religious and cultural values ??of an entire society, any changes occurring in the sociocultural environment, changing needs and desires of consumers, to automatically create new market segments
Marketers, companies wishing to enter the international market as well as companies that already operate in this market, should be vigilant and monitor any changes that occur in this environment, otherwise not be able to identify new trends and opportunities that demand the market demands at every step of the conversion or creation of new values, but also will be stopped in time.
4.2.3. Economic Environment
The economic situation of a country immediately reflects the purchasing power of consumers, so one should look carefully at the characteristics regarding the spending patterns of the population, patterns that vary with income, which in turn varies with employability levels, inflation and interest which is the country’s economy.
Even the Micro and Small Enterprises, which already conduct business in foreign markets, should never fail to monitor how good the economy to which it maintains business. Otherwise these companies may be caught off guard by recessions and political instability that could bring great harm and damage that are often irreversible.
4.2.4. Political Environment
Should analyze the current political scenario of the country, and what future expectations about the policies adopted by government to also take into account the relationships that the exporting country has with the importing country in relation to bilateral agreements, protection policies and exchange controls.
Even within that environment, attention should be paid to the legal and regulatory issues in the country and will market the product to be exported. To obtain this information the most feasible way is to search the Chambers of Commerce.
4.2.5. Technological Environment
Technological resources are constantly innovated, so the Micro and Small Enterprises exporters, will need to be alert all the technologies that are posted daily on the technological tool that the company uses to manufacture its products and services, can be seen by your customers as an extra attribute, which will exert great influence at the time of purchase.
Based on analyzes will ambientas from above, marketers should establish an international audience, and segmenting the market the Micro and Small business will operate. Since these definitions should be based on power that the company has or may be provided at meeting the needs of consumers in the target country.
4.2.6 . Promotion
To promote the brand in foreign markets, is of great importance to the success of sales, promotional material should be prepared in the language of the target market and can be brochures, catalogs, CDs, or even brand awareness in the media, but this latter alternative requires greater availability of financial resources, and most often becomes less viable alternative for the beginning of the internationalization of Micro and Small Enterprises.
03.04 . Definition of Goals and Objectives
After analyzing the environmental factors that may interfere with the success of the internationalization of Micro and Small Enterprise and the definition of a market segment and target audience, marketers with the company, which should define the goals and objectives to company wants to and can achieve.
Marketing and Micro and Small Enterprise, shall, sales volume, profit margin, geographic coverage, market share target and growth projections.
04.04 . International Marketing Strategies, focusing on target market
The marketing strategy of an enterprise indicates what are the plans of action for the achievement of the objectives and goals for successful internationalization of Small and Medium Enterprises in the target country.
The marketing strategy is a plan that will indicate how the organization will use its forces and capabilities to suit the needs and market demands. (Hartline & Ferrell, 2005: p.14).
The Micro and Small Enterprises should develop along with the professional marketing strategies to differentiate their products and consequently gain a competitive advantage, followed by pricing strategies and market position strategies, square (Communication) and his last strategies and distribution channels and supply chain.
A marketing strategy can consist of one or more marketing programs. Each program consists of two elements: at least one target market and market a compound (sometimes called the four The product, price, place and promotion). (Hartline & Ferrel, 2005, p.15)
4.4.1 . Implementation of International Marketing Strategies
After defining marketing strategies, the company should review the strategies chosen and consider whether they will in accordance with the requirements of the target market, then comes the phase of implementation of strategies, even during the implementation process should be done revisions will be to examine whether the strategies are achieving the objectives set out above.
Five. Conclusion:
The Brazilian Micro and Small Enterprises, are of extreme importance to the economy, but for lack of managerial expertise, market knowledge, prepared to deal with the variables that affect the macro-environment, and followed by bureaucratic politics, most Micro and Small Enterprises terminate its activities before reaching five years of existence.
The phenomenon of globalization accentuates the problem for companies that do not adapt to this new market concept. This segment must change their culture and habits returning them to internationalize their activities and creating a culture of commercial exchange, otherwise besides losing the opportunity for growth and market diversification, these companies also lose competitiveness in the domestic market.
Companies should bear in mind that the international market is a very demanding market, and very different from the domestic market
Internationalize a company is not an easy process but a process is possible, since the micro and small entrepreneurs, plan your entrance into that market, maintain ethical conduct, meet the demands and needs of the consumer always investing in innovation and high quality their products and services, using tools of international marketing are extremely important to the success of this process.
6. Bibliography
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[1] FACP – Faculty of Paul�nia-Paul�nia. CST Business Administration 7. Semester nocturnal. Student: Maria de Fatima da Silva Nascimento – AR 10126 – Email marianasciimentopln@yahoo.com.br.
[2] FACP – Faculty of Paul�nia – Paul�nia. Prof.MsC. Waldemar Rodrigues.