Study case genius brazil

CASE STUDY

GENIUS IN BRAZIL 2001‐2009

By:

Franklin Levy Vargas

1

Case Study Genius Brasil 2001‐2009 By: Franklin L.V | November, 2009

Introduction: HISTORICAL CURRENCY EXCHANGE RATE 2001‐2009
Average High: Low:
The Challenges that Genius brand has    (365 days):
experience and will experience in Brazil may be 2001 R$ 2.38 R$ 2.69 R$ 1.93
grouped into seven categories: State of the 2002 R$ 2.97 R$ 4.00 R$ 2.18
Economy, Strategy, Marketing, logistics and R$ 3.12 R$ 3.66 R$ 2.74
2003
distribution, competition, and  Recovery.
2004 R$ 2.93 R$ 3.22 R$ 2.65
      Genius had in one way or another tried to
2005 R$ 2.43 R$ 2.78 R$ 2.15
attack these problems, but not all at the same
time, leaving always room to fail in some 2006 R$ 2.18 R$ 2.37 R$ 1.95
aspects while accomplishing others. This 2007 R$ 1.95 R$ 2.16 R$ 1.72
strategies, had not only being done by Genius 2008 R$ 1.84 R$ 2.62 R$ 1.55
but many other brands struggle while trying to 2009 R$ 2.04 R$ 2.45 R$ 1.65
import products, services, etc. to Brazil, having

to face exactly the same issues.
The biggest fluctuations of the dollar in the past 9
     Brazil Facts: 191 million People, Sao Paulo
years were that one in 2002, with a range of 84% of
has 41M, Rio de Janeiro has 15M, Minas Gerais
change, as well as during the years 2008 with a range
19M, Espiritu Santos 5M, Parana has 13M,
of variation of 69% and 2009 with 48%.
Santa Catarina 7M, Rio Grande do Sul 10M.

     During the 2002 rollercoaster of the dollar price, it
ENTRY INTO BRAZIL
was not much of an issue for the importation of
During the 2001, 2002 years, successfully the
Genius products, because during that time, the
brand accomplish the entering of the brand,
distribution was only done by one distributor, SACT,
most possibly even before, due to the fact that
that will adjust accordingly,  to be able to sponge a lot
Genius was one of the pioneers in mouse
of this changes of the dollar, also given the benefit
technology as well as an accomplished
that SACT, was avoiding a lot of the importation
manufacturer of scanners, this last one was one
duties, while in the other hand during the years of
of the huge hits in Brazil during this season, and
2008 and 2009 while the fluctuation of  the dollar was
during this time the only distributors of Genius
high, the terms at that time were different, at that
SACT took advantage helping him accomplish
time there were more importers, that didn’t avoid
the great success that SACT had with Genius
any importation duties, and for the most part, all the
brand.
importation of the product Genius was made in a
SACT was successful due to the fact that was
legal matter, at this stage, the dollar had a big impact
the only distributor in Brazil. This gave him
in this process, because current distributors as is
great flexibility to manage the Brazilian market
Aldo, and All Nations, will have to adjust their current
in any way they wanted, creating a big database
inventory and had to withhold decision making to
of sub distributors that will carry the products,
invest, with the uncertainty of where the dollar price
mostly because of the availability and the price.
will end up.
SACT created under their umbrella, a huge

range of distributors, naming them Genius
STRATEGY
Distributors, therefore within the territory of

Brazil there were a variety of distributors big
While other countries in Latin America are easy to
and small that regardless of their reach, they
adapt to the changes of strategy from Distributor to
will be still getting the credit of being a Genius
distributor, from Reseller to retailer, in Brazil the non‐
Distributor, of course, named by SACT. 2
consistency of the brand always had left the brand

burned.
ECONOMY  ‐ THE DOLLAR

One of the strongest factors that the economy

of Brazil faces is the local currency against the

dollar. The depreciation of the dollar had

always created a wall in the importation of the
brand.

2001‐2002 Purchases of the only Genius Distributor SACT
During the Years 2001, 2002, while in total control from 2002‐2004 decreased 82% or 5.7Million
of the brand of only one Distributor SACT, the dollars, leaving at the same time a bad reputation
market itself for Genius was growing gradually to for those who carried Genius in the Brazilian
be a huge mess. The announcement from SACT of Market.
so many little distributors as Genius Distributors, 2003‐2004
had left a sour taste in the industry for the big After such a big slump that happened, Genius
Distributors, this announcements of so many strategy had to change, immediately after
distributors  gave room to the small distributor to watching what was happening with the problems
fight with price against someone bigger, it started of the only distributor, and totally uninformed of
to claim a negative reputation for the brand in the word by mouth that was going on in the
regards of their strategies. So much, that no retail industry, Genius tried to approach other
was very interested in the brand, due to the fact, distributors, trying to regain the market that was
that many companies big and small were offering losing, and tried to start to working with Mazer,
products, at different prices, and with no control or Flytech, Aldo, Mecer, Nagem, This were big names
true structure of the brand politics inside Genius.   in the industry in Brazil, but during this years,
    While all this was happening in the market, the unfortunately the bad left behind by SACT had
only Genius Distributor SACT during these years suck the popularity out of Genius, making it very
was getting itself in a lot of trouble with customs hard for this distributors to work with the brand,
and law agencies in Brazil, due to different still a lot of inventory of the brand from its
undisclosed problems. This of course, was bad predecessor distributor was in the market,
news in the industry, and because it was the affecting the sales of the new distributors that
biggest and only distributor of the Brand Genius, at were trying to make it work.
some point be called Genius Brazil, gave a plus to    Sometime during 2004, a new manager of the
the bad reputation already building up for Genius territory of Brazil, started to work on its own
in Brazil. This was a burden that all the companies strategy in order to help to”clean the market” of
carrying Genius had to deal with, therefore, at so much dump inventory and so much bad rumors
some points started to dump product into the about the politics of the brand, at least that was
market. At this point, none of the big Distributors, the goal.
and even less any retailers, wanted to have      Genius brand could not recover during this
anything to do with the brand. time. Sales that in 2002 were in the 6.5Million
SACT PURCHASING DECREASE 2001‐2004 range, during 2003‐2004, with new distributors
and new strategy, couldn’t even reach the
SACT / COLETEK 3Million mark.
PURCHASING DS – 2001 TO 2004
$8,000,000.00
$2,493,472.00
$2,766,596.00
$7,540,715.00

$7,000,000.00
$6,000,000.00
$6,522,906.00

$5,000,000.00
$4,000,000.00
$3,000,000.00
$2,000,000.00
$1,000,000.00
$‐ 2001 2002 2003 2004

2001 2002 2003 2004 3


2005‐2006 Distributors, as is Alcateia, Aldo, Allnations Nagem,
New management of the territory was making Ingram Micro, Agis,etc…the list goes on.
some changes to the strategy, by utilizing a trading      But as expected, due to the past and the
company in order to import the product. Cotia current reputation of the brand Genius in Brazil,
Trading, was more than a Logistics company. At none of them wanted to work with Genius,
this point the whole strategy of keep working with nobody open the doors anymore to the brand.
the new distributors was off the table, and the      Running out of options, Genius tried once again
new manager of the territory wanted to use Cotia a new approach to this impossible market, by
Trading as the main path to get the products into partnering up as exclusive with Metropolitan
Brazil, by doing this Cotia was the logistics and the Trading, to serve as importer and only distributor
storage of Genius products, eliminating the of the brand. This time Genius started to learn the
distribution partners already established. Also the complexity of the importation of its products into
methods used were at some points unethical. Brazil, and how it would affect their end‐user
These methods of negociation brought even more price. Genius’ main approach through this
bad news to Genius brand. partnership was to get into the Retail market that
     Genius then would import the product and was booming by this time in Brazil. Unfortunately
store them in Cotia Trading, and the territory Coletek had tried to get some products in the
manager in charge of Brazil, would then proceed retail market, but didn’t have the conditions to
to try to sell those products to many distributors, support and didn’t really put too much effort to do
once again to a range of customers from big so. Genius needed to get into retail in order to
distributors to small resellers, all at the same price. better its name in the Brazilian market.
This created a very bad agitation of the market,
because once again, there were all kinds of 2007
distributors, all with the same price, and at this THE EXCLUSIVE PLAYER
point was even worst because apart of the many The partnership with Metropolitan was positive
problems Genius was facing, new manufacturers and negative for Genius. Metropolitan Trading was
were starting to surface, brands like Clone, a Logistics company, and didn’t have experience in
Multilaser, Coletek, Bright, C3 Tech, and others, the distribution of peripherals. They’ve done some
started to manufacture their peripherals in Brazil, partnership with Sony Media in the past, and that
and selling them directly, offering great was about it. But time was running out, and
warranties, services, marketing and overall, Genius was taken out of the market. Metropolitan,
outstanding prices. At this point Genius is had a good partner call Central Business, company
confronting the local market even stronger than that was a great contact to start selling products in
before.   TV, through Polishop and Magazine Luisa, one of
      Without the same conditions that the local the biggest Shopping Networks in TV.
market was offering, and with the ruined politics      Metropolitan started using Digital Cameras and
that the brand had face, Genius was doom to fail. Video Digital Cameras as one of the products to
In the mean time, SACT had change names and sell in TV, because it was the product that will give
had stablished itself under another name more room to cut margins to be able to support
COLETEK. But at this point Coletek was not the TV exposure. The biggest chunk of this
concentrated in Genius, they had started to investment in TV was taken by Genius itself.
manufacture their own peripherals, and Coletek Metropolitan would not give in much, claiming
started to use Genius as a tool to get into the they didn’t have room. Out of the cost of the
peripheral market again, and it was only a tool in digital cameras imported, the cost of the TV
order to start to sell their own Coletek brand. commercial has to come out, the cost of the 4
Coletek never even came close to sell Genius as it Technical and Customer Service, the cost of the
did before as SACT. importation, and the margin of Metropolitan,
     By mid of 2006, Genius try to knock the door leaving Genius with little or no margin.
once again of the good name established,


Regardless of the losses that Genius was taking, This was a long process. Genius main focus now is
when the brand started to appear in TV networks, to enter to Retail, one of the biggest players in the
sales of the Digital cameras would start to move, retail market are Ingram Micro Brazil and
and at the same time, the Genius brand, started to Alcateia/Abano.
re‐appear in the Brazilian market again. This kind     The entering to work with Ingram Micro would
of publicity, gave Genius a better room to improve, take close to a year. Their first order was placed on
people were buying, and Metropolitan was April 2009, arriving by September due to
basically making its numbers out of Genius importation changes. The goal to open Ingram
through this products. The rest of the Genius Micro for Genius is to be the Distributor that will
products, Metropolitan didn’t know how to sell, enter the so desired Retail Market. Ingram Micro’s
they didn’t have the distribution channel to do so, next order was on May, at this point, this was the
plus they were face with the already stated first time Ingram Buy products Genius, they had no
problem that Genius had. So they just stored a history with Genius, and they acted very cautious,
great deal of products and concentrate mainly on only 3 months ago they started to move Genius for
the sales of the Digital Cameras through TV.   the first time. No luck in the retail market, because
     Genius name is back in the market through TV the product arrived way too late in the year to
as a brand. But the inability of Metropolitan to sell enter it into retail. Ingram Micro Brazil, then will
the rest of the products, also gave room for the show some indices of internal turmoil, leaving
market to clean up, to the point where Genius was Genius brand unattended and Genius  was not a
not to be found anywhere, in Brazil. This was the priority for Ingram, they have brand that gave
good of the bad. Also Genius sold close to 122k them the volume, and that seems more important
Digital and video cameras during 2007, close to for this distributor.
$6.3M gaining some market share of the DSC / DV
market.      Genius in 2009 getting desperate to get into
     The exclusivity Agreement of Genius with retail market approached Alcateia/Abano. And this
Metropolitan was finished by February 2008. time after knocking on Alcateia’s door more than 4
2008‐2009 times in the past, they started working with
Genius, once again, started knocking doors. At this Genius, mainly targeting to the retail market in
point, there were no Genius Distributors, there which they seem to be strong.. Alcateia’s first
was no war of prices, there was nothing. Only the order was on August, arriving in their warehouse
huge amount of publicity that Metropolitan had to be sold on end of October 2009, last month,
accomplish the past year. Genius Digital Cameras Retail market stops buying product for the year by
was a hit.  The Digital Camera Market was a boom October, so for Alcateia getting into retail is still a
in Brazil, and this had help Genius brand be part of work in progress.
it. Immediately after Finishing the Agreement with
Metropolitan, Genius talked to Aldo, and Aldo     Also, at the same time Aldo during 2009, has
agreed to distribute Genius again, then to All increase its Drop Shipment purchases, from 2008 ‐
Nations, and they opened the doors for Genius as $665,034 to 2009 ‐ $1,075,653, an increase of 61%
well. Even though Metropolitan still have and for the first time importing containers of
inventory, thankfully they didn’t opt to dump it. speakers. also looking at the possibility of entering
     The first Containers of All Nations and Aldo, the retail market.
arrived in Brazil on June and July 2008. Aldo and
All Nations made 3 orders each that year.
5
     Accommodating to the manufacturing time plus
the shipping time, plus the nationalization time,


DISTRIBUTION 2007‐2009

Customer 2007‐ Metropolitan 2008 2009 (up to
Exclusivity Nov)
ALDO    $      665,034.00   $  1,075,653.00
RAINBOW    $        40,681.00   $      103,473.00
METROPOLITAN $  7,904,642.00   $  1,208,536.00   $                       ‐
ALLNATIONS    $      533,251.00   $      235,010.00
UMCOMEX       $        73,983.00
INGRAM MICRO       $      158,353.00
ABANO       $      710,462.00
SND       $        73,498.00
MOBIMAX       $          2,079.00
AMAZON PC (MCD)       $        60,401.00
   $  7,904,642.00   $  2,447,502.00   $  2,492,912.00

THE RETAIL MARKET Hardware, also giving a lot incentive to the
retailers directly, as well as 3 years of warranty in
Genius strategies had always being driven by most of their products.
selling to the channel through Distribution and
there to the reseller in Brazil. At least that was the Brazil is divided in 2 categories when talking about
way SACT was doing it in the early 2001 to 2004. Retail market. The sales online and Retail Store.
And then same distribution method was done by
most of the new distributors since 2004 till 12 BEST ONLINE E‐COMMERCE
beginning of 2007. Never the main focus of the 1. Americanas.com.br
distributors was retail. 2. Submarino.com
       Other competitors as is Logitech and 3. Walmart.com.br
Microsoft’s strategies were very clear from early 4. Casasbahia.com.br
stages, to attack the retail market. Logitech was 5. Fastshop.com.br
trying to enter the Brazilian market and had a lot 6. Balaodainformatica.com.br
of hard time entering their product to retail, but 7. Extra.com.br
without a question that was their main focus from 8. Magazineluiza.com.br
the start. Their investments on marketing towards 9. Pontofrio.com.br
the retail had paid off, Logitech is a product you 10. Ricardoeletro.com.br
can find in the biggest and small retail stores. 11. Librariasaraiva.com.br
    Microsoft in the other hand has a lot more 12. Shoptime.com.br
resources to attack the Retail market. It has
around 40 people working as field sales, going out LARGEST RETAILERS IN BRAZIL
to the big and small retailers in‐country and 1. Casa Bahia – 560 Stores
“making the sale for their distributor”. This way 2. Ponto Frio – 460 Stores
the distributors only get to be a logistic front that 3. Extra – 150 Stores
will have to be ready with stock to maintain the 4. Carrefour – 250 Stores
demand created for the Microsoft itself, 5. Wal‐Mart – 317 Stores 6
attributing also the amount of money put in the 6. Fast Shop – 35 Stores
country for marketing of the brand, software and   7. LASA (Lojas Americanas) – 418 Stores
8. Magazine Luiza – 392 Stores


Never had to do in the past, this usually set up a
NATIONAL RETAIL SALES IN BRAZIL 2001‐ 2008 series of issues in regards of positioning the brand in
the market, and the skepticism of the retail market
towards Genius is still an issue.
     Another of the main requirements of the retail
market for the brand was to have a Customer Service
for the brand, which was never, obtain by Genius,
only on the beginning of October 2009 a very small
company call GFTEC with only 2 people to attend the
whole Brazilian Genius market.
     It is very clear now for Genius, that retail is the
market they have to be in, but for that, the retail
market itself has to learn the behavior of the Genius
      After 2003 slump in the retail market in product in their stores, they have to trust the brand
Brazil, due to the government’s unpopular tight and most of all they have to be well
monetary policy, and the high inflation, the served by the distributors that Genius has partner up
country has recovered dramatically. The Brazil with, because for the retail in Brazil, it is all about the
retail report predicted that sales will rose from trust and confidence, and this is something that is not
$368bn in 2008 to 573bn by 2013, without a gain overnight.
doubt this is the market where every brand
wants to be.      DISTRIBUTORS IN BRAZIL
     This growth is based to the positive trends in
underlying economic growth, an enormous and Brazil is an enormous market, in which whomever
growing population and rising of disposable grows, they get to grow big. In the distribution
income, the easier access to credit and the channel there are many important players, but
emergence of wealthier middle class.  The having too many distributors in Brazil is not a great
population of Brazil is estimated to grow from strategy,  here some of the distributors  in Brazil:
192M in 2008 to 204M people by the end of Abano Districomp
2003 (BNET news).   ABC Lan DW do Brasil
      The focus of Genius to enter the retail Acao Informatica Emix Hardware
market more aggressively and more focus came Acorp do Brasil EPI Distribuidora
during and after 2007, after the huge numbers
Aldo Everbiz
made through the sales of Digital Camera
through Shoptime and Magazine Luiza in TV, Alcateia Formula Comercial
but Retail market don’t  know Genius behavior All Nations Gralha Azul
in the retail stores, because it has never being a ASP Distribuidora Grupo Move
product they had carried continuously, and this B4B Grupo Policom
is another issue that has to face Genius. Handytech
    In order to enter any product to any retail, Bassetti Industrial Distribuidora
the retail needs to register product by product, Braile on Line Hardlink
is a series of documents and formalities that can 7
Brasilnet (Logitech) Houter
take up to a month to achieve an approval from
Cernet Info 2
the retail, also, Genius has to offer in a very
transparent way, the end‐user price, and its Cogra Ingram Micro
price strategy, something that Genius had
Cia do Software Klasse Informatica


Conections Distribuidora Koerich Distribuidora   They have about 245 employees, and have
Connection Technology Mazer Distribuidora close to 6000 active channels.

Dealer Informatica Local X
Ingram Micro:
Distech MegaData Located in Sao Paulo, Brasil – Ingram
Dexcom Distribuicao Mobimax distributes: IBM, HP, CISCO, MICROSOFT,
MS Distribuidora Star BKS ORACLE, SUN, LENOVO, XEROX, SAMSUNG,
Metrocomm Superkit Distribuidora SYMANTEC, AMD, AOC, APC, BROTHER,
Mude SVM do Brasil CANON ELGIN, CIS, COREL, ECS, EMC,
ENERMAX, EPSON, ITAUTEC, JUNIPER, LABEC,
Myatech Tech Data
LEXMARK, LOGITECH, LG, LINKSYS,
Nagem Teeleap
KINGSTON, MAXELL, MCAFEE, METROLOGIC,
Network 1 Towwer Distribucao MOTOROLA, MSI, OKIDATA, PALM, PHILIPS,
Officer Distribuidora Phase 1 PROVIEW, REDHAT, SONICWALL, SONY,
Notecel Qualitech Distribuidora NERO, TECNOWORLD, TREND MICRO, V7,
Opcao Distribuidora Riomidia ZEBRA.
Opeco Royaltech Distribuidora
SND Distribucao:
Orbit Sharperner
Located in Sao Paulo, Brazil – SND
Partenza Sky Technology distributes: MICROSOFT, LG, SAMSUNG, HP,
Pauta SND Distribuicao EPSON, AOC, AMD, GIGABYTE, INTEL, APC,
PALM, MCAFEE, MCAFEE, M‐TEK, KMEX,
Genius clean approach started on 2008 after the TRUST, SONY, PINNACLE, VS COMPANY, XFX,
exclusivity with Metropolitan, with solid platform of NVIDIA, SANDISK, KINGSTON, ITAUTEC, AIRIS,
partners.   OPTICON, BRAVIEW, BATTERY‐BIZ, CCE,
Aldo : PHITRONICS, MSI. It has around 220
Located in Maringa, Parana, Aldo distributes, INTEL, employees, and has around 10000 active
HP, MICROSOFT, SONY, SAMSUNG, WESTERN DIGITA, channels.
AOC, GIGABYTE, SMS, INTELBRAS, MSI, BENQ, ACER,
NVIDIA, GENIUS, COOLER MASTER, BELKIN AND Genius also have some small distributors as
SUPERMICRO. Its main region is the South east of is UMCOMEX, MOBIMAX, RAINBOW that do
Brazil, with more than 100 employees, and with take opportunist business sometimes, but
around 7370 active accounts. they are not consider strong players.

All Nations:   LOGISTICS
Located in Rio de Janeiro – All Nations distribute:
INTEL, LG, HP, ASUS, ACER, APC, ZOGIS, EPSON, Genius was also faced during 2007 to
GENIUS, LEXMARK, BENQ, SANDIS, LEXMARK, CANON, understand very clearly the importation
POWERCOLOR, AOC, POSITIVO. Its main region is the duties and taxes, something that in the past
North, Northeast, and Center of Brazil. They have was not necessary, because the past
around 201 employees. distributors had done by themselves. One
important certification that the distributor
Alcateia: most have in order to be able to import into
8
Located in Sao Paulo, Brazil – Alcateia Distributes: Brazil is the RADAR. If the distributor does
INTEL, D‐LINK, MAXTOR / SEAGATE, KINGSTON, AMD, not have this certification, it will be
HP, LG, MICROSOFT, SAMSUNG, 3COM, and others.   impossible to import.


The challenge for Genius is to import the products time, gives incentive to the internal product,
and go through a lot of taxations and fees that had making it a very aggressive product to compete
to pay while importing, and still have room to be with.
able to compete with price in the market. To      Apart of all this complex apparatus in order to
understand the way Brazil customs add taxes to import there are the Licensing of certain products.
different products can be tricky, because in some A good example is the Wireless products, if they
cases the government is changing the percentage are not approved by ANATEL (Agencia Nacional de
of taxes, also, Brazilian government with all this Telecomunicacaoes Brasilera) then the product is
taxes tried to incentive the creation of not consider by any retailers, this certification
manufacturers inside Brazil, therefore, creating protects the user of any harm. Retailers are very
employment in the country. Manufacturers in specific in order to sell products with or without
Brazil usually get an incentive of the government, ANATEL Certification, and if the product is not
making the product produced inside Brazil a much Certify, they rather not sell it, to avoid any
cheaper product, creating a big competitor field in problems and sanctions with the Brazilian
the market. Importers like Genius, Logitech and Government. Genius only has 3 or 4 product
others should then have to adjust their product currently with this Certification, but only 2 of them
prices to compete against local brands, but it is are selling in the Brazilian market. This is a
almost impossible, then the only way to get some tremendous disadvantage against any other
market is to get a different segment due to the competitors,
price competition.      A speaker product face an additional tax and is
one of the most strongest ones, the Anti‐Dumping
    Brasil has a VAT or Value added Tax according to Taxes, which its fees are that for every kilo
which port the merchandise is received. If it arrives importer of speaker products, the tax will add
through Vitoria, it has a 12% VAT, but if it arrives $2.35 per kilo.
through Sao Paulo it has a 18% VAT.  Also, the duty
of each and every category of product is All this complexity was only face by Genius on the
important, end of 2006 more directly, and this has to still be
‐ Peripherals have a 12% duty understood well to establish a good pricing
‐ Speakers have a 15% duty strategy.
‐ DSC / DV has a 20% duty
Also adding to all this series of dues, there are COMPETITION & COMPANY STRUCTURE
some additional taxes, the IPI (Imposto sobre
Produtos Industrializados), that usually is a 15% for In order to enter the retail market which should be
peripherals, 20% for DSC / DV, and there is the the main goal of Genius to succeed, it has to fight
CONFINS Tax that is 9.25% more, then for some directly with local Brands and power brands.
products it has to add the ICMS (IVA) in some
cases up to 12%, the industrialization Tax for DSC / Known brands as is Microsoft, with an aggressive
DV that is 20%, then on top of that the IR (Imposto structure ready to attack any channel, from retail,
sobre a renda) 1%. reseller, corporative, government market.
     The complexity of importation taxes apply to Microsoft is one of the great competitors with
the products entering the country, it is so Genius. Their high price of products is not an
complicated that it is not easy to understand the inconvenient product for any store, Microsoft is
main meaning of each and every tax. Many times targeted for a high‐context culture, which means
9
the government changes the percentage of tax, to say that is an expensive product, but with great
increasing it or decreasing it at any given time, this looking design and outstanding pre‐sales and post‐
helps the government to manage and control the sale service. Their products are in every retail, in
products entering the country, and at the same   every small retail and reseller, because their only


Direct competitor is Logitech.   They’ve been in the market for many years, except
C3 Tech which has close to 2 years in the market,
LOCAL COMPETITORS: but is making huge improvement in small resellers.
peripherals
Axis Communications   IP Cameras
The price positioning of peripherals in Brazil based
on price and quality
Bright Accessories
Accessories, Multimedia

C3 Tech (Coletek) Accessories
Clone Accessories
Accessories, IP Cams,
Coletek Wireless products
Cooler Master Accessories
Elgin Accessories, DSC
Fujitsu Scanners
HP Brasil Accessories
ITC BR Accessories
Lenovo Accessories
Maxell Accessories
Medina Informatica IP Cameras
Microsoft Brasil Accessories

Microsol Tecnologia Multimedia Accessories
At this point, Genius does not have that mid‐level
Multilaser Accessories market, in order to be there, it needs to enter the
Samsung DSC retail segment. Microsoft, Logitech, C3 Tech,
Accessories, Multimedia Clone, Brigth, Leadership, Multilaser are already
Sony Brasil Accessories, IP Cameras
establish in Brazil and they keep growing, still the
Tenda IP Cameras empty space of price range between the low level
Trellis IP Cameras product and high level product is the target for the
Xsound Multimedia Accessories distributors of Genius.
Zyon Brasil

Multimedia Accessories
MARKETING
Their price structure is more aggressive towards Advertising for the masses in Brazil is extremely
the retail market, they are more into the low‐ expensive, Genius tried this approach, but its
contex cultures,  the most famous brands that at resources are not that big, to be consistent.
this moment anybody can find in the retailers and      In Brazil during the 2001‐2003, Genius rely on
resellers are C3 Tech, Clone, Multilaser & Bright. its distributor to do the marketing,  by the year
They manufacture in Brasil, therefore they 2004‐05, Genius try to do new approach, by doing
managed their market directly from their base, some road show throughout Brazil, with its new
giving them an outstanding advantage because is a distributors, try to work on some on‐line strategy
local product, and Brazil government and retailers to improve their e‐commerce sales, unfortunately,
like to incentive Brazilian products. The mentioned everything that was going on during that time limit 10
brands are well stablished in the industry, and   the marketing efforts, the on‐line strategy would
work if the distributor had more trust on the




brand, but they didn’t. by 2006‐2007, under OPORTUNITIES, ON THE WAY TO RECOVERY
Metropolitan distribution, Genius only way or 2009 has being a year for Genius to establish itself
marketing and probably one of the strongest back again in the Brazilian market, creating a great
marketing campaigns, was the TV advertising. Even platform with top of the line Distributors, with a
thought it was for only one of the product lines, great reputation to target Distribution channel,
this type of communication, started to help to reseller channel, and retailer channel.
improve the reputation of the brand, bringing a lot      For the first time Genius is targeting strongly
of attention, and in some cases making the brand the retail market, that he has never explore
name Genius much stronger and known for the intensely and so directly before. This will still take
end user. This was probably the only one thing so some time while the retailers test and create a
valuable that this partnership with Metropolitan connection between Genius and their retail store;
brought. After the partnership with Metropolitan Retailers had to see Genius as a value added to
diluted, Genius had to approach the market in one their store, just like it happens in many other Latin
of the most convenient ways to maintain the user American Countries and this takes time.
know about the brand. So a PR Agency was hired,        Distribution just started to work with Genius
even thought is not a strong big Powerful PR towards that retail market, they had just received
agency, because one like that will cost a lot of their first containers as is the case of Alcateia, SND
money in Brazil, but it is one that does the job ok, (hasn’t received any product jet), including Ingram
keeping informing the media about new products, Micro.
new trends for Genius.        For the first time Genius started to work
     The lack of marketing material, during the product lines like speakers, Genius has the
years, in Brazil is also another problem that Genius opportunity and most increase the line of wireless
had faced. Head Quarters cannot send marketing products that at this moment end‐user had not
materials, like it does in another  countries. The much options. For the first time Genius has a clear
importation of marketing products, into Brazil, is policy in the market in which the partners are
impossible and probably will bring taxes and fees feeling comfortable to work again with Genius.
that will overpass the price of any marketing       Genius is regaining for the first time the trust of
material imported.   the Brazilian market that unfortunate events had
    Billboards in Brazil are banned (not in the almost had the Genius brand burn. This RECOVERY
airport), since 2005, the Brazilian government of brand, recovery of trust, and willingness to work
banned the use of billboards in the main highway s with the brand, does not happen so fast. Brazil has
and main streets. Not all the cities have this law, to see, try, digest and trust the brand again.
but the most important does, like Sao Paulo.       Genius has to have a direct approach with
    The biggest magazine companies and biggest retailers, had to known all of them, had to create a
names in Brazil’s magazines are own by even one new retail network.  Genius most invest in its own
of the 2 biggest networks in the industry, Oglobo Local structure, own marketing approach, own
or Abril. They carry from hundreds of magazines, distribution politics in order to be able to gain that
to radio networks, to TV stations. trust, and it should be done in an organized
matter.
Genius has not invest much in Brazil’s
development of marketing, in fact, budget still
being limited, this will probably brings a lot of
difficulties in the future.
11


CONCLUSION

     Genius just started to recover, started to finally
getting out of the bad name that was given for
many years. The brand Genius was badly hurt and
burn in the Brazilian market. The recovery of trust
in the market in such a big country is not easy.
First it has to be established, with great partners as
started to do this year, 2008‐2009 is being the
years were Genius recovery back to a strong name
in the Brazilian market started, and it is controlled
this time by Genius not by anybody else, therefore,
has to develop a better structure for the channel
and for the retail, has to invest for the long term
for the future, all is starting now. For the first time
Genius has control of the channel, it has a target
which is retail, it has to have it develop, because it
was never done before.
     Local brands in Brazil have the opportunity to
grow rapidly, imported brands had to take its time
to accommodate.
     Genius has to understand the culture of Brazil,
understand that Distributors and resellers do not
forget what happen few years ago when they
carried the brand. Has to understand that that
damage has to be overcome with trust and with
persistence and the changing strategies every time
will not help create this trust, because for the
Brazilian customer, trust is everything. .
      Genius cannot afford to start running
desperately to have the risk to falling again, and
now Genius is walking toward the right direction,
slowly but surely.

12


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