For a decade Coca cola’s brazilian subsidiary tried to stop the growth of tubainas ( inexpensive, carbonated and sweet beverage) they are sold for more than a half century by hundreds of micro and a few medium-size manufacturers.
Before Brazil = coca’s third largest operation and company’s second largest international market.
Until 1995, tubainas were not a threatbut after environmental changes, tubainas market grew and jeopardized the company’s profitability.
Different strategies by coca over Pepsi gained market share thanks to partnership with Brazilian beverage manufacturer ambev and the years. Cola war (pepsi vs coca). + successful launch of pepsi twist.
Coke performance in Brazil could be improved because social economic positionsimilar to mexico
But average consumption of coke in brazil quite low only 144 bottles per capita annually instead of 462 in USA and 402 in mexico
Even if brazil the 3rd market in sales for coca the profitability is 20th because of the competition of tubainas very cheap. They have to keep the price low (dropped of 30% since the 50’s.
Economic stabilization and consumer behavior in brazil
Bettersituation in Brazil: long period of high inflation and economic stagnation, there was a successful eco stabilization plan called plano real improved the purchasing power of the low income segment of population.
A lot of consumer goods are now accessible and consequently, after the 1995’s numerous segment = tremendous prosperity. Ex : consumption of soda shot up 60 % between 94 and 99Categorization of Brazilian by marlet research association abipeme developed a social class classification. A to E
C = lower middler class and comprise 12,6 million households or 28% of the national consumption.
Market study : what affect the purchasing decision :
* Price 38% of purchase decision
* Quality 31%
* Brand = least important factor only for personnal care product (22ù of thedecision)
Consumer C not brand loyalist. If no difference perceived for quality, they prefer the cheapest product.
Between 98 and 2000, 63% of the market leader in 157 products lost market share in Brazil
This phenomenon of cheap local product stealing market share of leaders not only for the soda and the brazil => scheme of the developing countries
Soft drink sales grownglobally on average of 5% a year.
In 2001, consumers of soft drink globally drank 412,000 million liters (67,5liter per capita). Carbonated drinks= 45% of the total soft drink sales
Projected growth for soft drink will bearound 5% through 2006.
Coca’s supremacy :
* For a century was the supreme drink market leader, sold in 200 countries
* In USA coca hold 44% and Pepsi 31% of the marketshare
* Oversea coca sold 3 timePeps’I’s volume
* In 2003, coca groth 30% vs pepsi only 2
* The us population = 5% of the global pop = 27% of the soft drink volume total
* Market has growth opportunities in China, India and Brazil highest market growth rates in latin America, and asian countries
Coca company : Brazilian division
Inititated business in 1942
Coca Braziliandivision = coca cola industrias ltda, recoforma industrias do amazonas ltda and 39 bittling plants.
Cie product available at 1 million point of sale
Different product see exibit 2 cie distributed a broad productmix in Brazil = 50% of the sales of the SD market
* Ambev = 17% of the sales
* Others pme combined = 33%
2003, coca = 35,6% of market share. Cola flavor =45% of the SD market
Coca’s closest competitor =
* guarana antartica with 7,9% of market share (belong to ambev)
* The other one = fanta (owned by coca) 7,1% of market share
Coca’s sales grew in Brazil but the market share decrease due to completion with ambev and the 100 of pme
The Brazilian SD market
Brazil = latin America titan and was major investment destination of global...