Name: Sachin A Khochare

Roll No.:13, PTMBA ,Marketing Div A

Subject: International Marketing

Q1 Briefly summarize the major characteristics of the Brazilian soft drink market.

Ans.

Economic Statistic of Brazil

The economy of Brazil is the world's eighth largest by nominal GDP and seventh
largest by purchasing power parity. Brazil has moderately free markets and an
inward-oriented economy. Its economy is the largest in Latin American nations and
the second largest in the western hemisphere. Brazil is one of the fastest-growing
major economies in the world with an average annual GDP growth rate of over 5
percent. In Brazilian reais, its GDP was estimated at R$ 3.143 trillion in 2009. The
Brazilian economy has been predicted to become one of the five largest economies
in the world in the decades to come.

Soft Drink Industry in Brazil

In Brazil, carbonated drinks are called refrigerantes (coolers). There were more than
3500 brands of soft drink in Brazil, manufactured in more than 700 plants in 2004.
From 1986 to 2003 nonalcoholic drink consumption lead to 11.6 billion liters with
average year to year growth of 13.92%.

Major Characteristics of the Brazilian soft drink market.

1. Per Capita Consumption of Soft Drink in Brazil is increasing by average rate of

17.37 % per year. In year 2003 it was 95.3 liters & projected 104.9 litters in
2008. Its showing Brazil is rapidly growing market in term of soft drink.

2. Coca Cola is a leader in Brazilian market by holding Market share 50.1% in

2003. & Ambev has 17.2% market share in 2003 with second position.

3. Local soft drink product Tubainas is having major market share near about
32% in 2003. More than 700 manufacturers of Tubainas in Brazil.

4. Tubainas is low price soft drink with compare to other big brand. The main
reason behind it that it’s manufactured by small manufacturers with low
operational & administrative cost. Also the major factor is these manufacturer
did not have legal existence & do not pay taxes.

5. Majority of Brazilian population resided in urban area & due to

underdeveloped distribution channel soft drink market is untapped.
Q2 Perform SWOT analysis of the Coca-Cola company in Brazil.
Ans:
Strength
1. World leading Soft drink
manufacturer
2. Market leader in Brazil soft drink
market by more than 50% market
share
3. Establish infrastructure in Brazil
( 39 Bottling plant ,25000 direct &
250000 indirect employees & 9000
vehicle for distribution.
4. Coca Cola having broad product
mix in Brazil. Product Line Includes
soft drink, bottled water, iced tea,
juice & energy drinks.
Opprtunity
1. Per capita consumption of soft
drink in Brazil increasing drastically.
2. Class C consumed 28% of total
national consumption & whose
buying decisions are influence by
quality of product. Which help Coca
Cola to overcome on local brands
Weakness
1.Underdevelop Distribution
channel
2.Price of Coca Cola product is
high compared to local
manufacturer
Threats
1. Pepsi Ambve alliance for
producing & distribute Pepsi
product in Brazil. Its result in Pepsi
sales grew by 28% in 2003
2. Low price small local brand
Tubainas with 32% Market share
in 2003.
3. Local Non Tax payers soft drink
manufactures who don’t have
legal existence
4.Very low Brand loyalty & price
sensitive Brazilian consumer tends
to local low price brand
Q3 What are the pros and cons of the several strategies the Coco Cola company
implemented in Brazil?

Ans:

Pros of the several stratergies implement by Coca Cola in Brazil.

1. Increase in Product Mix by expanding the product line through brand

extension in market. Like new flavors such as citrus & strawberry. This helps
Coca Cola to increase its visibility in market. They can able to cater all
different type of customer with different variants, which result in increased
brand loyalty.

2. Looking at increasing market share of Guarana flavor Coca Cola renovates

production facility & planted 200 hectares of Guarana. This will gives Coke
cost benefit with control on raw material supply & quality.

3. Coca Cola is try to build the good will & image in local community by
sponsoring & participating in local , regional & national events. This will help
Coke to increase social acceptance in community.

4. Coca Cola introduce returnable glass bottle to reduce the cost of packaging.

Cons of the several stratergies implement by Coca Cola in Brazil.

1. Coca Cola acquired few competitors to stop growth of Tubainas, but it will not
succeed due to there is no entry barrier for new comers & former owners.

2. To compete with low price local brand Coca Cola reduced its prices by 48 %,
which result in negative effect of profitability.

3. Buy back franchisees operation s to promote change in distribution channel,

same result in negative effect of profitability.

Q4 What should Coke do to be more successful in Brazil?

Ans:

1. Coca cola Brazil should work with the parent Coca-Cola Company to develop
a business model to continue exploring new lines of beverages, extend
existing products, participate in new beverage segments and effectively
advertise and market the company’s products;
 2. Developed and expand the non-carbonated beverage portfolio organically
and through strategic acquisitions. Concentrate on energy drink which is
upcoming market.

3. Implement packaging strategies designed to increase consumer demand for

the company’s products and to build a strong returnable base for the Coca-
Cola brand selectively.

4. Replicating the company’s successful best practices throughout the whole

value chain.

5. Rationalize and adapt the company’s organizational and asset structure in

order to be in a better position to respond to a changing competitive
environment;.

6. Strengthen the company’s selling capabilities and selectively implementing

pre-sale system, in order to get closer to clients and help them satisfy the
beverage needs of consumers.

Q5 What recommendations would you make to global brands to help them

compete successfully with B brands in emerging countries?

Ans:

1. Implement multi-segmentation strategies in the company’s major markets to

target distinct market clusters divided by competitive intensity and
socioeconomic levels

2. Implement well-planned product, packaging and pricing strategies through

wide spread distribution channel to kill B brands.

3. Achieve operational efficiencies throughout the company to tackle low price

advantage of B brands.

4. Acquire or build JV with bigger B brand to reduce market penetration of B

brands.