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Coca Colas Marketing Challenges in Brazil: The Tubainas War

Presented By Group 8

Core Issues
!! To increase profitability of Coca Cola in

Brazilian Market?
!

Brazil was Coca Colas Third market in sales and ranked a worrisome 20th position in profitability

!! To formulate the strategy for coca cola to

increase the market share sustaining the competitive forces?

Strategies Coca Cola Implemented in Brazil


Strategy 1: Cutting Down Prices from $1.8 to $1.25 and changing distribution channels. Strategy 2: Expansion of Fanta Mix by incorporating new flavors . This was done to eat Guarana Antarticas Market Share Strategy 3: To buy few competitors in order to stop growth of Tubaina. Strategy 4: Did lot of local, regional and national events and celebrations Strategy 5: Reintroducing Coca Cola in returnable glass bottles. This was done to gain customers loyalty once they bought the bottles. Strategy 6: To improve the distribution channels in several northeastern states.

Pros and Cons of strategies implemented


Strategy 1a: Price Penetration: Gaining price competitive advantage with Tubainas and other competitors Brand value deterioration , Profitability decreases Strategy 1b: Changing distribution channels: To improve the reach to the local consumers Heavy investments to be made and formulation of networks is cumbersome Strategy 2: Expansion of Fanta Mix: It will add the new flavors to the product mix and will lead to improving market share. New product can result into cannibalization of the existing product lines. Strategy 3: Buy few competitors This will lead to reducing competition in the market and will unsettle local markets. This required investments to be made and these costs are not adding to the operations of the company as these companies are not following standard procedures. So mostly dead investments.

Pros and Cons of strategies implemented


Strategy 4: Promotions through local events This will help in improving the local branding and will help in improving the reach to consumers. Strategy 5: Reintroducing Returnable glass bottles This will help in improving the Brand Loyalty and also in reducing the costs of the company This will increase the operational cost and will increase the distribution time Strategy 6: Improve distribution channels in northeast brazil Northeast and southeast have upto 70% population situated in these region. Coca Cola focusing on this regions will improve the market share and visibility to the consumers.

"!

"! Class Distribution at Brazil "! B D "! C


! 2.6 million 1 ! to 10 times 4

"!

!High Income !High

!Low

Education ! igh H Purchasing Power ! ophisticated S Customer

minimum wage ! 8% of total 2 national consumption ! 8% of food 3 related purchase and 31% of other products affected by price. ! rand- Least B important factor, 13% !Very few brand loyalists ! avor low price F products.

Income !Low Education ! ow L Purchasing Power !Struggle to afford even the very basic goods

Factors Influencing Consumers


"! Economic Factors: family income ranges

between 4 to 10 times the minimum wage.


"! Social Class: lower middle class usually

workers.
"! Lifestyle & Values: prefer low priced products. "! Psychological factors: Lack brand loyalty.

Segmentation
"! Social: The Social Class C of the Brazilian

society. "! Geographical: South-east, North-east and South of Brazil.

Target
"! Mass Distribution Channels. "! Restaurant Chains. "! Local Dealers. "! Tie-up with local brands in specific regions to

use their distribution channels.

Re Positioning
"! Rebuild and Reposition the brand. "! Establish brand value. "! Make the brand exclusive.

Our Suggestions
"! Reposition the brand as an exclusive brand "! Improve Distribution Channels "! Provide vending machines to inaccessible communities to increase visibility and sales. "! Local promotions "! Connect as a Brazilian brand with the national sports team rather than a multinational brand. "! Have an emotional touch to the marketing campaign.

Thank you

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