In the Clouds Started by two men who pooled USD 500 together in 1986, USCloud is a global technology provider offering innovative, next-generation technology solutions and services. With headquarters in San Francisco, California, and offices located in six countries across the globe, USCloud assists international clients with modernizing their business processes and infrastructure with the latest technology-based solutions. A major offering provided by USCloud is support of Software as a Service or SaaS. SaaS is a distribution model in which software applications are hosted by a service provider such as USCloud and made available to clients over the Internet. This model allows businesses to focus on critical initiatives rather than spending valuable resources on ensuring their software applications are secure, reliable and available 24/7. For example, a job placement firm with 35 locations completes the payroll functions for all employees in-house. Rather than managing a physical copy of accounting and payroll software at each location, it has contracted USCloud to host its software in a private cloud space. This means all 35 locations have instant and secure access to the software over their network, and the firm can be confident all locations are always using the same software version. According to Forbes.com, the global SaaS market is projected to grow from USD 49 billion in 2015 to USD 67 billion in 2018. USCloud is hoping to take advantage of this projected growth by expanding into a number of new markets, the first of which is Brazil. Rated the worlds seventh largest technology market, Brazil is a recognized software producer with a software services market growing at approximately 8 percent per year and approximately 12,000 companies dedicated to the development, production and distribution of software and services. In 2014, the U.S. was the second largest exporter to Brazil, with services accounting for USD 28 billion. Their trading history and Brazils high regard for American products, brands and technology make Brazil an excellent target market for the U.S.-based company.

International Sales and Marketing Module Selling to International Markets Getting Cloudy As international collaboration, security, CRM and storage demands increase, the call for cloud computing is increasing in Brazil, and there is a lack of local providers. Due to challenging import laws and a lack of trained human resources expertise in the country, it is common for Brazilian companies to subcontract technology services to other countries, although there are also several challenges involved in selling to Brazil. One such challenge lies in the payment system. The boleto is the preferred payment method of business to business (B2B) transactions in Brazil. It is a financial document, similar to an invoice, which clients must take to the bank when payment for a service is due. In order to offer boleto as an option, companies are required to have a bank account and legal office in Brazil. Payment methods such as credit cards, debit accounts and parcelado, which involves monthly payments, are also fairly common. Local IT service providers have a large competitive advantage because they are selling in the local currency and with local payment rules. In addition, they arent subjected to the import taxes and complicated laws that importers need to navigate to sell to the market. Another advantage local companies have is the affinity for personal relationships in the Brazilian market. Face-to- face meetings and reputation are critical for developing new business in Brazil. Building relationships with potential clients will be essential to USClouds success because of the highly technical and next-generation nature of its service. For these reasons, and also due to the level of investment required by its clients, USCloud will establish an office in So Paulo, Brazil, and sell directly to local software providers. Four representatives from the company will travel to So Paulo to set up the new location. In order to break into the local market, USCloud will need to create and implement a sales strategy and begin making local contacts. As an initial step, two of the representatives have set up a meeting with the local trade commission office. As an outcome of that meeting, they hope to gain a number of potential sales channel opportunities, as well as a list of possible supports that could assist them with navigating the market and becoming familiar with individuals and businesses in the local technology community. As the operations plan is being implemented, the USCloud international business development team is working on the pricing strategy for the new market. It will need to enter the market competitively due to the advantage held by local cloud service providers. It also has a great deal of information to gather and analyze before fully understanding the direction it should take on pricing for a strategic and successful market entry.

International Sales and Marketing Module Selling to International Markets Aim for the Clouds Once a pricing strategy is established, the Brazil-based team can begin utilizing its newly made contacts to schedule exploratory meetings with potential clients. As the company begins to gain its first clients and build a reputation locally, it plans to seek out Brazilian IT professionals to join the local USCloud team. This will assist the company with gaining new relationships from already established networks, overcoming the language barrier and providing local customer support in the future. Although USCloud has entered new markets successfully in the past, this is by far its most challenging venture, with the most potential for a substantial return on investment. The team is excited to continue planning the sales and marketing of its cloud-based services in order to bring them to the booming Brazilian ICT market. Learning Outcomes Develop a pricing strategy that maximizes profits and achieves business objectives by penetrating a market, building market share or positioning a product or service within a market to attain business objectives. Describe sales channels available for direct exporting of products and services to intermediaries and to end-usersboth businesses and consumers. Select the best sales channels for the specific trade initiative based on a range of key factors including coverage and costs. Abide by laws of the domestic and target markets that apply to the selected sales channels and to the products and services being exported. This case study relates to the following learning outcomes from the modules Marketing Products and Services and Selling to International Markets in the course International Sales and Marketing:

International Sales and Marketing Module Selling to International Markets Case Study Questions

1. There are many barriers to the sale of services in Brazil. Identify the barriers directly and indirectly described in the case study and explain how USCloud plans to address them.

2. USCloud chose direct sales as an entry sales channel. Describe a possible second sales channel option for the ICT company to implement as it gains credibility in the new market.

3. List the information USCloud will need to gather to determine the best pricing strategy and price to enter the Brazilian market.

4. When preparing sales presentations for potential clients, what information will be important for the USCloud representatives to research?