Coca Cola’s Marketing Challenges in

Brazil: The Tubaina’s War

Presented By

Group 8

Core Issues

!! To increase profitability of Coca Cola in

Brazilian Market?

•! Brazil was Coca Cola’s 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 Antartica’s 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.

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.

Pros and Cons of strategies implemented

"!

A "!C

"!

B "!

E "!

D

•! High Income

•! High Education

•!High Purchasing Power

•!Sophisticated Customer

•! Low Income

•! Low Education

•!Low Purchasing Power

•! Struggle to afford even the very basic goods

•!12.6 million

•!4 to 10 times minimum wage

•!28% of total national consumption

•!38% of food related purchase and 31% of other products affected by price.

•!Brand- Least important factor,13%

•! Very few brand loyalists

•!Favor low price products.

Class Distribution at Brazil

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