Professional Documents
Culture Documents
To be successful Krispy Kreme must understand and be sensitive to different cultures and
societies if they are to initiate and consummate mutually beneficial exchange relationships with
A thorough study and analysis of its culture is conducted to identify the values, customs, and
cultural symbols of the Brazilian consumers and what might affect a buying behavior in this
growing market.
Following more than three centuries under Portuguese rule, Brazil gained its
slavery in 1888 and the subsequent proclamation of a republic by the military in 1889. Brazilian
coffee exporters politically dominated the country until populist leader Getulio VARGAS rose to
power in 1930. By far the largest and most populous country in South America,
Brazil continues to pursue industrial and agricultural growth and development of its
interior. Exploiting vast natural resources and a large labor pool, it is today South America's
leading economic power and a regional leader. Highly unequal income distribution and crime
The family is the foundation of the social structure and forms the basis of stability for most
people. Families tend to be large (although family size has been diminishing in recent years) and
the extended family is quite close. The individual derives a social network and assistance in
Nepotism is considered a positive thing, since it implies that employing people one knows and
Customs in Brazil
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Meeting Etiquette
Men shake hands when greeting one another, while maintaining steady eye contact.
Women generally kiss each other, starting with the left and alternating cheeks.
If a woman wishes to shake hands with a man, she should extend her hand first.
Brazilians need to know who they are doing business with before they can work effectively.
Brazilians prefer face-to-face meetings to written communication as it allows them to know the
The individual they deal with is more important than the company.
Since this is a group culture, it is important that you do not do anything to embarrass a Brazilian.
Criticizing an individual causes that person to lose face with the others in the meeting.
The person making the criticism also loses face, as they have disobeyed the unwritten rule.
Due to the Brazilian fluid nature of time, it is important to schedule meetings at least two
weeks in advance. It is also common for meetings to run 20 minutes late. While this is expected
and common in Brazil, punctuality is still important for a new comer into the country. This fluid
and relaxed orientation to time can also cause necessary approvals and decisions to take longer
Communication is often informal and does not rely on strict rules of protocol. Anyone who feels
Face-to-face, oral communication is preferred over written communication. At the same time,
when it comes to business agreements, Brazilians insist on drawing up detailed legal contracts.
Business Negotiation
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Expect questions about your company since Brazilians are more comfortable doing business with
Wait for your Brazilian colleagues to raise the business subject. Never rush the relationship-
building time.
Brazilians take time when negotiating. Do not rush them or appear impatient.
Often the people you negotiate with will not have decision-making authority.
Use local lawyers and accountants for negotiations. Brazilians resent an outside legal presence.
Brazilians negotiate with people not companies. Do not change your negotiating team or you
Business appointments are required and can often be scheduled on short notice; however, it is
Confirm the meeting in writing. It is not uncommon for appointments to be cancelled or changed
In Sao Paulo and Brasilia it is important to arrive on time for meetings. In Rio de Janeiro and
Do not appear impatient if you are kept waiting. Brazilians see time as something outside their
control and the demands of relationships takes precedence over adhering to a strict schedule.
Dress Etiquette
Men should wear conservative, dark colored business suits. Three-piece suits typically indicate
Women should wear suits or dresses that are elegant and feminine with good quality accessories.
Symbolism
Most Brazilians would agree that the symbols that best characterize their nation are the exuberant
revelry of the pre-Lenten celebration of carnival and the wildly popular sport of soccer, called
and musicians, formal balls, street dancing, and musical contests, a truly national party during
which Brazilians briefly forget what they call the "hard realities of life." Carnival is symbolic of
the national ethos because it plays to many of the dualities in Brazilian life: wealth and poverty,
African and European, female and male. The key to carnival's popularity is its break with and
reversal of the everyday reality. Through the use of costume—notably called fantasia in
Portuguese—anyone can become anybody at carnival time. Class hierarchies based on wealth
and power are briefly set aside, poverty is forgotten, men may dress as women, leisure supplants
work, and the disparate components of Brazilian society blend in a dizzying blaze of color and
music. Brazilians are passionate about soccer and are rated among the best players of the sport in
the world. Every four years when the world's best teams vie for the World Cup championship,
Brazil virtually shuts down as the nation's collective attention turns to the action on the playing
field. And when Brazil wins the World Cup—as it has on more occasions than any other country
—the delirium of the populace is palpable. Brazilian flags are hoisted aloft, everyone wears
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green and yellow (the national colors), and thousands of Brazilians, seemingly intoxicated with
Brazil has a large acculturation of other ethnic groups. The country’s tourism well
developed, has beautiful beaches, and famous carnivals. Lots of tourists choose Brazil to have
fun. Therefore tourism has an important and large placement in country’s economy.
To successes in Brazil, Krispy Kreme has to tailor its product to satisfy the needs and wants of a
Age structure:
Ethnic groups:
White 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%, other (includes Japanese,
Languages:
Less common languages include Spanish (border areas and schools), German, Italian, Japanese,
With both the area and population each being the fifth largest in the world, Brazil also
happens to be the largest country in South America. It borders every country on the continent
except for Chile and Ecuador. Officially known as the Federative Republic of Brazil, the
country is also the only Portuguese speaking country in South America. The country’s flag is
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“green with a large yellow diamond in the center bearing a blue celestial globe with 27 white
five-pointed stars (one for each state and the Federal District) arranged in the same pattern as the
night sky over Brazil: the globe has a white equatorial band with the motto ORDEM E
Although the country can be considered multi-cultural, ethnic groups are primarily made
up of white groups (53.7%) and mixed black and white groups (38.5%). From a religious
perspective, almost 74% of the country is Roman Catholic. Once ruled by Portugal, Brazil
gained its independence on September 7th, 1822. Brazilians tend to get close to each other when a
conversation is taking place, no matter what the relationship is between them. Between 30 and
40 cm is an average distance, and this is also true in other situations, such as standing in line,
Over the past fifteen years Brazil has made remarkable transformations from economic
isolation to global integration to becoming a leading market. Some high points in the
development include the privatization program started in 1990, extensive import tariff reform
during the early 1990s, external debt re-negotiation completed in 1994, and the termination of
the Asuncion treaty (which allowed for more exclusive trade in South America). Then, Mercosur
began on January 1, 1995. Control of inflation was perhaps the single most important
inflation and promoting fiscal reform, the Brazilian Government inspired domestic and foreign
investor confidence and spurred internal consumption and foreign investment levels. Extensive
legal reforms followed to help Brazil’s legal framework keep pace with rapidly changing
This paper will explore the unique historical, cultural and economic aspects of Brazil that
have contributed to its maturity and have made the country a positive foreign investment in
Brazil’s current GDP growth is mainly comprised of expanding labor force, real wages
growth, and credit expansion. According to the CIA Fact book, GDP of Brazil is ranked 10th in
the world and 1st in the entire South American continent. For the past three years, the GDP is on
the rise as can be seen in Table 1. This is an excellent indicator for the chosen country. The real
growth rate also rose till 2007 but was negatively affected by global recession and the rate
declined sharply. From the beginning of this year, Brazil started recovering from the recession
The currency of Brazil has gone through changes several times because of very high inflation
during the 1980s and early 1990s. Currently, Brazil’s currency is Real. It can be exchanged for
about half a dollar with present exchange rates (1 Brazil real = 0.54 USD, as on 02/10/10). Due
to inflow of foreign investments, the Real will appreciate marginally during 2010 and weaken
Entry barriers for businesses wanting to conduct business must be identified to effectively screen
and analyze the political and legal forces within Brazil. Entry barriers into Brazil include the
devaluation of the REAL, government control of certain sectors of the economy such as the
telecommunications and electrical energy sectors, and the lack of competition. Other barriers
In 1999 there was a devaluation of the REAL brought on by deficits in the budget, which created
problems within the Mercosur and the trading block for Brazil. Brazil then introduced emergency
taxes to cut the national debt, which exceeded 50% of the GDP. Brazil was then on its way to
recovery repaying a $41 billion dollar IMF loan and the debt began to decrease. In 2001
however, Argentina defaulted on its international debt, which led investors to feel uncertain
about Brazil’s economy. A new US backed IMF loan of $30 billion dollars came as a result in
2002. President Lula in 2003, facing issues such as poverty, inflation, and unemployment has
had to pull money from the Brazils social security program. (Countrywatch.com, 2003) Each US
dollar is worth 3 Brazilian REAL, and companies contemplating entry into Brazil may see this as
a barrier. The entry strategy must focus long-range future profits as opposed to immediate
profits.
In 2006, 36million domestic tourists travelled in their country spending approximately US$ 5
Billion, while 6million foreign visitors have spent the same amount of money (see appendix 10).
UNWTO has been forecasting that by the year 2020 international arrivals worldwide should
exceed 1, 6 billion, while out that 1, 2 billion should be intraregional and the rest 378 million
Marketing Mix
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An initial plan will start with the World Cup and Olympics, to provide superior quality and
service at a lower cost to local consumers and sport spectators. This will enable the company to
introduce its products locally with spectators acceptance, and to have the ability to extend its
offerings and products past the games (i.e. past 2016) and keep a continued partnership with the
Product
To serve the demand of Brazils market, Krispy Kreme uses original donuts recipe used in United
States. Franchising method is a strategy oriented to investors with working capitals. Franchising
Price
Exchange rate can impose a financial risk on Krispy Kreme. With a poorly taxation structures
system, the Brazilian tax system is among the most complex and burdensome in the world.
Accountants estimate it would take 2,600 hours for a firm in Rio de Janeiro to comply with the
tax system. Rio de Janeiro even holds the world record for the highest taxes.
Brazil has comprehensive labor legislation, primarily in the Consolidated Labor Law (CLT),
which governs most occupations. Labor rights and benefits are clear in principle, but compliance
has presented increasing complications over time. Wages are freely negotiable and widely set by
In addition to basic pay, employees have a mandatory entitlement to substantial paid benefits, the
Doing business in Brazil comes with a lot of overhead, the need for patience, the ability
to grow relationships and the potential for growth. Brazil is a country that is just coming into its
own on the global stage. For a number of years the country was in political turmoil with military
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coups and experienced constant political turnover. Recently, in 1988 the country ratified a
constitution and has had a stable federative republic since that time. The Government has worked
to grow and strengthen the Brazilian economy and make it easier for foreign businesses to invest
Brazil is ranked 119 out of 155 countries on the ease of doing business by the International
Finance Corporation. Some reasons for this include the lack of oversight of the necessary steps
and cost for single regulation, multiple municipals require separate individual approvals, and the
Brazil is a South American country that places an emphasis on relationships and has a
fluid sense of time. Because of this, it is important to take the time to establish relationships well
in advance of embarking on a business partnership. Establishing the right relationships can help
ease the bureaucratic process involved in many aspects of establishing a business in Brazil and
telecommunications, banking, energy, commerce, and computing). The two major components
of the sector are the banking and energy components. During the early 1990s, the banking sector
accounted for as much as 16% of the nations GDP. The San Paulo and Rio de Janeiro stock
exchanges are undergoing a consolidation and the reinsurance sector is about to be privatized.
Economy
sectors, Brazil’s economy outweighs that of all other South American countries and Brazil is
In Brazil, grocery stores and pastry shops sell ball-shaped doughnuts popularly known as
"sonhos" (lit. dreams). The dessert was brought to Brazil by Portuguese colonizers that had
contact with Dutch and German traders. They are the equivalent of nowadays "bolas de Berlim"
(lit. Berlin's balls) in Portugal, but the traditional Portuguese yellow cream was substituted by
local dairy and fruit products. They are made of a special type of bread filled with "goiabada"
References
Kerin, R., Hartley, S., & Rudelius, W. (2007). Marketing: The core (2nd ed.). NY: McGraw-Hill-
Irwin
Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: Knowledge and skills. (8th ed).
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
http://en.wikipedia.org/wiki/Politics_of_Brazil
http://en.wikipedia.org/wiki/Luiz_In%C3%A1cio_Lula_da_Silva
http://www.mongabay.com/brazil.html
http://www.financierworldwide.com/article.php?id=5678&page=2
http://www.tesouro.fazenda.gov.br/english/hp/downloads/Nota_Investment_Grade.pdf
http://www.edc.ca/promotions/english/docs/FINANCING_INVESTMENTS_IN_BRAZIL_-
_Ciao_Azevedo.pdf
http://www.articlesbase.com/international-business-articles/communication-in-a-global-market-
1922330.html