According to Sam, what was the purpose of his visit to Brazil and Chile?

F : OK, Sam, I just had a chance to quickly go over your report on your recent visit to Brazil and Chile, and the potential for eventual penetration of the Central and South American markets. However, that being said, it might be a good idea for you to lay out the main points of the report, all right?
M: Well, let me bring your attention to what I see as the main issues. The purpose of the report is to present findings and conclusions from a visit to Brazil and Chile I undertook last week. This visit was aimed at investigating the potential for Sandoz’s formula powdered milk in customer goods markets in Central and South America. I must stress that this was a very small scale survey, and that my findings are, as yet, very tentative.
F: So, what, in a nutshell, are your findings?
M: Well, I found a great deal of interest in our products. I visited two production factories in Brazil and Chile respectively, and in these factories, senior staff were extremely interested in improving the standard and range of formula powdered milk. Top quality imported and domestic products are becoming more and more popular as the spending power of the ordinary people goes up. Goods produced using Sandoz’s production lines would, I feel sure, be very attractive to the population.
F: Yes, that’s very encouraging. But, are there any obstacles?
M : Well, there are two major concerns. First are the laws in America. Will they make it hard for us to do business there? Second is how to sell in that market. Should we try to sell by ourselves? Or should we get people there to sell for us?
F: As you know, I’ve asked a legal expert to come today. He isn’t here yet, so I think we should get the show started with the second issue, how to sell in that market.
M: Good idea. If we were to consider penetrating that market, the question is, ’What kind of relationship with Central and South American manufacturers would we be talking about?’
F: Can you outline some of the options for me, Sam?
M: Well, we should certainly consider joint ventures, I think.
F: Yes, but the profit margin in joint ventures needs to be carefully considered.
M: Well, let’s get something clear. At this moment, we’re still at a very early stage of discussion. I don’t think anyone’s talking about tangible returns from this for at least three or four years. We’re really talking about ’ seedbed’ tactics.
F: Yeah, I think you’ve got a very good point here. Even if we recommend penetration of the Central and South American markets, in whatever sense, it’s very much a long-term project. But Sam, what do you see as the alternatives?
M: Well, there are the joint ventures, as I said. We could also look at import-export arrangements, or local sales and marketing. Then, there are always licensing arrangements. I think the last one would
be extremely good if you wanted to see quick returns in a short time. But I would recommend that we investigate the feasibility of each of these options thoroughly by perhaps arranging another, longer visit to Brazil or Chile early next year. While I was there, I noticed that the main problem in those markets is poor health conditions. We all know what happened to Nests when they sold their powdered milk in Africa. And we don’t want that to happen to us.
F: Yes, that was in the news a couple of months ago. In Africa, people had very little clean water. So they put dirty water in with the powder. Many people got sick, and Nests got in trouble because of it. But, can we find a way to prevent this? Isn’t it also very hard to find clean water in Central and South America?
M: I guess it might be a big problem. That’s why I’m suggesting we do a more thorough investigation.
F: Right, I shall certainly recommend to the Senior Management Group when I meet them next December that we arrange a further exploratory visit in the coming year. OK, thanks Sam for that short briefing. No doubt, we’ll come back to the subject in the very near future.