Finding Indigo's Niche in Brazil and Chile

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FINDING Indigos Niche IN BRAZIL AND CHILE
Presenter Arundati Dandapani
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Agenda

1. Who or what is Indigo Canada?
2. What is the problem?
3. Where are the new markets?
4. What are Indigos objectives?
5. Scripting a new research methodology
6. Analyzing the research
7. Market and competitive intelligence
8. Indigo now vs. Indigo tomorrow? (Old markets and
   new)
9. So what?
10. Q A / Photo op

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Canadas largest bookstore is A retailing First!
Enrich your Life
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INDIGO STORES CANADAWIDE

• Chapters, Coles, Indigospirit, SmithBooks, The
  Book Company
• 92 superstores (10X small stores sq ft.)
• 140 small format stores
• Over 5 million book titles
• Approx. 7000 employees
• Entrepreneurial started up Kobo, tie ups with
  Mattel/American Girl
• Price of Kobo Touch WiFi US139 (same as Amazon
  Kindle)

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CEO chief book loverHeather Reisman, 66
We dont care whether people read books
physically or digitally!
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CANADA DOMESTIC BOOK SALES

• Monopoly excludes Quebec where Archamebault and
  Renaud-Bray independent bookstores hold most
  market share
• Sales exclude educational texts
• Independents  campus stores, large book
  departments in grocery stores, and used
  bookstores
• Non traditional retail Wal-mart, Costco, etc.
• Online booksellers eg. Amazon, Smashwords,
  brick-and-mortar online affiliates

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INDIGO MOBILE APP
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Research Problem

• Management decision problem
• How can Indigo expand its line of operations to
  restore a flagging bookstores business by
  entering foreign markets? How will the company
  compete internationally and what elements of its
  international marketing strategy are pegged to
  make Indigo a retailing first in the industry?
• Marketing research problem
• How will Indigo make its first choice of foreign
  market entry between the potential markets of
  Brazil and Chile and what will be the
  implications for the launch of the companys
  first global operation outside Canada?

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Country profilE Brazil
Large and well-developed agricultural, mining,
manufacturing and service sectors Brazils
economy outweighs all South American countries
and is a fast expanding presence in world
markets. Exchange rates reals (BRL) per US
dollar - 2.153 (2013 est.) Labour force 107.3
million Unemployment rate 5.7 Telephone users
75.9 million Internet users 76
million Languages Portuguese 210 languages, 180
indigenous
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Research Objectives Brazil

• To analyse the advantages of setting up a new
  chain store in Brazil by extending Indigos
  operations to Brazil
• To analyse key regions within Brazil where
  Indigos chain will operate
• To assess the retail experience (including sales
  platforms and marketing mix) offered by
  equivalent bookstores in Brazil and gain insights
  from competitor and competitive analysis
• To develop a blueprint and timeline for the
  setting up of IndigoBrazil including online
  affiliates like indigo.br
• To generate branding communications for
  IndigoBrazil, a uniquely Canada-Brazil
  partnership and an international retailer to
  reckon with

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Country ProfilE Chile
A market-oriented economy High level of foreign
trade Strong financial institutions Strongest
sovereign bond rating in South America. Labour
force 8.367 million (2013) Unemployment rate
6 Inflation (consumer price) 1.7 Exports 78
billion Imports 76 billion Chilean pesos per
US dollar 491.7 Telephones 3.27
million Internet users 7 million Languages
Chilean Spanish
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Research Objectives Chile

• To analyse the advantages of setting up a new
  chain store in Chile by extending Indigos
  operations to Chile
• To analyse key regions within Chile where
  Indigos chain could operate
• To assess the retail experience (including sales
  platforms and marketing mix) offered by
  equivalent bookstores in Chile and gain insights
  from competitor and competitive analysis
• To evaluate the pros and cons of doing business
  in Chile as a Canadas largest book retailer
  (keeping in mind the ease of starting up here)

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Hybrid Methodology

• Brazil
• Face to face intercepts and door to door
  interviews seeking peoples views on what are the
  kinds of customer experiences being sought in
  towards the different, seeking awareness of local
  books, global books, link to culture
• Internet shopping habits and satisfaction
  surveys online
• Secondary research
• Chile
• Similar to Brazil, but will account for cultural
  and linguistic differences
• Online Internet retailing habits satisfaction
  surveys
• Secondary research

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Hofsteds Model Brazil vs. Canada
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CHILE VS. CANADA
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Analysis And TESTS

• Correlations between book buying rates and age
  groups, regions, languages spoken
• T-tests for means to test for variation in book
  sales among and between groups
• Logistical regression between time spent on the
  internet and reading or purchase of ebooks and
  books purchases online and drivers of
  satisfaction with retail experience
• Multi-collinearity tests between the impact of
  several factors (ambience, culture, type of
  books, technology, accessories sold, pricing,
  deals, toys and family store features, etc.) on
  repeated customer visits to a bookstore
• Determine predictors of technology adoption
• AlphaCronbachs test for reliability

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Competitive Intelligence

• Book Retailers in Brazil
• US 3.3 billion book market
• Livraria Cultura (Bookstore culture)
• Saraiva (largest bookstore) might be taken over
  Amazon?
• Over 56.2 of retailers revenues come from
  non-book sales! (USD 399 million)
• Indigo should partner with Saraiva online to cash
  in on online revenues
• Book Retailers in Chile
• Mostly small internet businesses
• E-commerce small-scale online marketplace for
  utility-based books!

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Conclusion action plan

• Go after Brazil now 3.3 billion US dollar market
• Hit the chain bookstores
• Seek unique partnerships
• Community building is key to sales in Latin
  America
• Translations
• Tackle Chile next as a companion market,
  following on the heels of Brazil
• A good immigrant, and commuter population, urban,
  literate, but largely ONLINE population

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See You IN Brazil 2020!