Monday, July 11, 2011

Marketing Project : "Concierge Brazil"

#1 The marketing segment:
For a market plan the product choose to work on, it is a service that provides in the America market a luxury entertainment in Brazil, “Travel Luxury Brazil”, the propose is to provide a luxury service and entertainment during a travel to Brazil with exclusive service for America’s high society consumers who increasingly want a personalized experience. The segment would be to focus on the wealthy individuals from USA, which are prepared to spend a lot of money to have a great experience in Brazil. Why Brazil¿ the next World Cup will be hosted by Brazil, and also the Olympics in 2016, The World Cup is the world's most widely viewed sporting event, and then the Olympics, those events are of high relevance that will attract all the attentions to Brazil in the next’s years.
Identify the marketing segment for this service is very important, “A marketing segment is a group of customer the shares similar inclinations toward your brand”, Lacobucci (2010). Segment has different bases present on consumers: Demographic, Geographic, Psychological, and Behavior. And How to evaluate the Segmentation¿ For identify a good marketing segmentation, it is necessary to use some databases to show the facts, and correlations systematically gathered, to represent a refined selection. For example, to identify the demographic and geographic segment for this product we based on the information about HNWI population by countries, that determines in terms of the number of wealthy individuals, USA holds first place in the world ranking of, with 2,460 thousands (Source: Capgemini Lorenz curve analysis ‘World Wealth Report 2009’).
To determine the psychological segment it is important to understand that the notion of luxury is subject to a constant process of change, luxury became an extremely heterogeneous and individual phenomenon in the second half of the 20th century and that the sector will be dominated by a variety of market segments, all very different in character. (Focus Magazine, 2009).
Analysis of consumer orientations toward certain product, categories and brands has moved ever more into the realm of psychographics and life style analysis. SRI International's VALS framework, where six sub segments (Thinkers, Achievers, Experiencers, Believers, Strivers, Makers) are sandwiched between high-resource Innovators and low-resource Survivors (VALS, 2010). In the VALS framework, Innovators have the resources, success, sophistication, place importance on image as an expression of taste, thus fit with the notion of the affluent luxury goods consumer.
Behaviors, as other segmentation, find out more about the costumers’ needs orther than just customers potential, it helps to make predictions regarding future purchasing, it is not possible to observe attitudes, but it is possible to use behaviors to infer attitudes and psychological states. (Lacobucci, 2010). For our product it will be necessary to study what is the behavior of the Innovators (VALS) wealthy individuals from the USA, then find out who is purchasing luxury trips around the world and by using a co purchasing patterns it will be possible to generate sales to our product to Brazil, making a suggestion for then.
The position in a high price, high quality, exclusive availability, it will be necessary exclusive channels and light promotions. In this scenario our positioning statement it will be: for America’s high society consumers who increasingly want a personalized experience, our brand is the best to provide a luxury service and entertainment for their travels to Brazil with exclusive experiences that no one can do it.
After the market has been separated into its segments, it is time to select a segment or series of segments and 'target' it/them. Resources and effort will be targeted at the segment.” The idea of targeting is merely one of selection” Lacobucci (2010).  The basic target for achieving consumer satisfaction it will be differentiated marketing, that promote a numerous services with differing marketing mixes designed to satisfy smaller segments, despite higher marketing costs, the travel industry now recognizes the need to target smaller groups of travelers with specialized interests. (Kurtz & Mackenzie & Snow, 2009).
The survey tracks and analyzes three distinct segments in the luxury consumer market representing the top 20 percent of U.S. households by income -- that represents about 23 million households at the top of the income range.  Throughout 2010 the average consumer surveyed had a household income of about $300,000, Pare Danziger, president of Unity Marketing, which conducted the survey, says the rise in experiential luxury is directly proportional to the wealth of the baby-boomer generation, which will be profoundly influential on the economy through 2010. (Betts, 2010). Also is important to consider the internet access, there are 250 million people in North America and 1.5 billion people worldwide surfing the web, where Indeed, travel was the top category in online purchases and transactions among US adult online buyers, 44% of luxury consumers turn to the Internet above all other media sources, 31% of luxury shoppers are influenced by newspaper ads, 24% are influenced by magazine ads. (Source: Luxury
Exclusiveness is a decisive keyword in the luxury market, an alternative to targeting the market for the Travel Luxury Brazil, would be to focus more in a small group on the baby boomer generation that purchase on the internet and has income of about $300,000,. It is a smaller than other segments, and targeting then might lead to drop the sales, but will also strengthen the value of the travels. In addition to targeting this segment in marketing travels, would be necessary to invest in a new model of travel to attract and retain the interest of this segment. Although few competitors exist at the moment if the market grows big enough, more competitors will be attract to do it, even if this happened our exclusive services should be able to handle then because we know how to serve this segment well.
The company’s competitors:
Concierge Brazil proposes a new kind of service somewhat  similar to what is available in the market but with the refinement and exclusiveness that some customers are looking crave. At this moment we do not face any competition in this market for the same service, but there are some  service providers who offer similar services such as a Zicasso (  who customize trips for discerning travelers on the internet but they are not focused only on the luxury class. There are also agencies like Southern Travel International (, and Brazil Express (, who only provide the tickets and reservations. In the figure 1.1 we can see the strengths and weaknesses of each.

- Flexible and customizable for private departures;
- Customized luxury trips to the destinations available;
- Easy to contract the service on the web site;
- Provide a personally sales person for questions.
- They provide a personal guide if necessary;
- Only three packages are available;
- The package has only three different destinations;
- Price covers the described services and does not include air fares, extra costs and personal expenses, lunch, dinner, beverages and optional tours;
- It is not exclusive.
Southtern Travel International
- Includes air fares;
- The lowest package price;
- The web site provides the information in details.
- Only packages are available;
- They don’t customize luxury trips;
- They provide only 3 packages;
- They don’t provide service for Lunch or/and dinner;
Brazil Express
- The leading Brazil travel site on the net;
- The lowest flight tickets;
- They have packages by life style;
- The web site is very confusing;
- They don’t customize any trips;
- They don’t provide service for Lunch or/and dinner;
- No luxury packages.
The Plan to differentiate:
Exclusive is a decisive keyword to differentiate our company from the competitors, while the competitors offer some packages with very straight plans for many costumers, we are going to offer a variety of plans and destinations for a small group of consumers. Zicasso is our closest competitor, to differentiate from them instead of only some few destinations in the package we are going to work with at least one destination per state that means at least 26 destinations, and no package. On the web site the customer will be able to customize their trip that includes exploring the size, relief, climate, and natural resources that make Brazil geographically diverse. Including its Atlantic islands, hills, mountains, plains, highlands, and scrublands. Also with dense and complex system of rivers in Brazil we will offer from rides on the rivers to explore the different ecosystems, such as the Amazon Rainforest, recognized as having the greatest biological diversity in the world. Using all this diversity our company will be the only one in the market that can provide a customized and flexible service where our client will be able to choose wherever he or she wants to go in the best style.
Things like unpack the luggage, serves the lunch on the beach and a concierge at each destination to show guests around the place comes standards in our service however the client also can contract a personal vacation advisor, baby sitter, reservations in the bests restaurants. The visitor for our market is looking for, experience-wise where the Concierge Brazil even been a small company are going to use the creativity to reach this niche of the market.
            The facilities of our web site online will give us that advances in technology that are so prolific, however our  challenge it will use the potential impact these facilities but providing a personal interactions with the service organization to impact positive on consumers’ future intentions. According to Ganesh, Arnold and Reynolds 2000, personal interactions between consumers and front-line employees are important for consumer satisfaction and consumer commitment. The concern is the impact this potential loss of personal interaction may have on these evaluations, as consumer satisfaction and consumer commitment are important for organizational survival (Anderson, Fornell and Lehmann1994). Our fundamental aspects for differentiation will be customer satisfaction and consumer commitment in our service, by providing a service with important attributes for the costumers as: prompt service, approachable service, trustworthy service, courteous service and professional service (Hecker and Francis 2002). In order to warranty staff promptness, informativeness, approachableness, trustworthiness and professionalism we will create a quality standard and make sure that each one of the suppliers are within the pre-established standards.
The corporate identity with regard to the company’s philosophy toward the market place will be strategic followership, as Howell & Mendez (2008) mentioned the extent to which a follower envisions, maintains flexibility, and thinks strategically in interacting with a leader in order to initiate changes that will create a viable future for significant constituents. The interaction between leaders and followers depends on the competence of each other where leaders and followers mutually influence each other with the strategic followership the Concierge Brazil will take an advantage to this particularly relevant in ineffectual leadership situations such as incompetent or rigid, etc.
            On the travels market we will not be innovative there are many players and some leaders that have largest market share, or have become first in the market, our intention is not to compete directly with them. Even with creative idea to develop a new model of trip to Brazil our tendency it will be to explore a niche of the market that the leaders are not, in this case we will be more conservative to protect our market share and sales.
            Our opportunity as a follower is to analyze the leader’s attitudes and learned with their mistakes to make it better for our customers discovering the value of the new offering. Furthermore, this decision is not arbitrary, based on our service’s life time cycles we will venture into a large scale offensive action to might be a leader in the time of the events in Brazil - Worl Cup in 2014 (FIFA) and the Olympics in 2016 (NY Times) - to ensure a rapid growth.
            The Concierge Brazil is going to focus in the American market, in this case is very import to consider the context of the economic environment of U.S that historically, has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment funded by both national and by foreign investors. It has been the world's largest national economy since the 1870s Maddison, Angus (2006).  However since the crash of the U.S. economy has begun in 2007 (Cook, 2009) U.S. has been face high unemployment rate that according to Bureau of Labor statistics, official rate reached 9.8%, also the US consumer confidence survey measures the level of optimism that consumers have about the current performance of the economy, these passed 3 years, 2008-2010, consumer confidence index fall enormously (Cook, 2009). Despite this facts according to "World Wealth Report 2010." about 31% of the entire world's millionaire population reside in the United, furthermore, 34% of the world's billionaires are American. Since North America remains the single largest home to HNWIs with 3.1 million of the global HNWI population even with the Global crisis U.S. still looks a good market for a service as a Concierge Brazil that focus on these potential global HNWI population. We have to take advantage the fact that according to "World Wealth Report 2010." by the end of 2009, HNWIs had more invested outside their home regions than a year earlier, so I believe that they will probably travel more to places like Brazil that as an emergent country offer a lot of opportunities.
            Conduct business across borders, we must deal in foreign currencies that will be one of the biggest challenge we will face for our service to develop the business between U.S. and Brazil; according to Kurtz (2010) recently the U.S. dollar hit a historic low against such currencies at the euro, Canadian dollar and the Real (Brazilian currency). A weaker dollar drive the price of foreign services or products upward, because of these American consumers might not be able to afford to buy vacations abroad and business as a Concierge Brazil will attract fewer U.S. vacationers; people that might plan to travel to Brazil will be more apt to stay closer to home.
                The legal and regulatory context that we have to concern is about the visa, until now the American need a visa to go to Brazil, this might change in the next years as in last visit of  the U.S. president, Barack Obama, in Brazil in April 2011 he said in the govern studies the extension of visas for both countries. If something like that happened will crash the barrier and facilitate the transit of Americans to Brazil. (
            Finally the technological and information advances of the internet provide some tools that will give for our business a better features and efficiency to ensure more convenience and speed in our transactions with the costumer.
The most significant trend to impact this business
The high U.S. budget deficit and the risk of current North America slowdown turn in another recession (Reuters, 2011), affect directly the stability of the dollar value especially the exchange rate for dollar to real (Brazilian currency) that in recent months has been falling, hitting the lowest level ever in the past seven years, where R$1 real is now US$1,58 (CNN).  Regarding those facts the instability of dollar rate exchange became one of the most significant trend to impact our business because has a big impact on the cost of the service that affects directly the price for the final consumer.
            To minimize this problem and make this an opportunity to get an important price advantage we are going to work in two point first is negotiate the price of the biggest costs with the suppliers and second is to do the activity called balance sheet hedge. So then in order to negotiate with the suppliers for example we know that Rio de Janeiro and São Paulo will be the most common destination so then we are going to negotiate the rooms with the hotels in advantage the estimated rooms that we will contract for the whole year; creating an economy scale in order to reduce the price, as well as negotiate the domestic flights with the suppliers and leave the date open for the year. This might be a risk that we might not sell all the services that we already negotiated but we are going to do a very carefully estimative to be very close to the reality.
            So, then the second activity is a very simplest, and most widely used, balance sheet hedge (Kurtz, 2010). Using the accounting rules by both the International Financial Reporting Standards (IFRS) and by the US Generally Accepted Accounting Principles (US GAAP) essentially, a balance-sheet hedge involves the selection of the currency in which exposed assets and liabilities are denominated so that an exchange-rate change would make exposed assets equal to exposed liabilities, Kurtz (2010). To do this, our company must maintain the same amount of exposed assets and exposed liabilities in a dollar currency. Done correctly this hedge can reduce the risk associated with changes in the value of the dollar relative to real. This will improve the financial performance of the firm; which can have a positive impact on our price.

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Additional Sources:

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