Coca-Cola in Brazil

1920s and 30s International expansion The Company began a major relate to establish bottling operations outside the U. S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. On May 8, 1886, a pharmacist named Dr. John Pemberton carried a jug of Coca- booby syrup to Jacobs Pharmacy in downtown Atlanta, where it was mixed with carbonated water and change for five cents a glass. In 1942 Coca-Cola entered the brazilian market. ? Brazil is Coca Colas third largest operation and second largest international market. ? Low add up consumption (144 bottles/p/y) USA (462 bottles/p/y) ? Mexico (402 bottles/p/y) ? low favorableness market ? 20th position ? ? ? ? ? ? From 1986 to cc3 nonalcoholic drink consumption AVG one-year growth of 13. 92%. ? Per Capita Consumption of aristocratic Drink in Brazil has increased by average rate of 17. 37% per year. Highly rivalrous market ? AmBev main competitor with 17% market sh are. It partnered with Pepsi increasing sales profitability. ? Other competitors have an average market share of 33,5% (within these, there are illegal manufacturers operating without permissions and without paying taxes). More than 3500 brands of soft drink in Brazil.More than 700 plants in 2004. Difficulty to reach rural communities. POS consumption. ? ? ? ? ? Cola was the Brazilian favored flavor (41. 8%) followed by Guarana (23. 9%) and Orange (11. 4%). Soft drinks were sold in variety of containers made of glass, PET and aluminum, having capacities that varied from 200 ml to 2. 5 liters. The most favourite advancement is the disposable bottle from 2 to 2,5 litres with a total percentage average consumption of 72. 88*. Average sales growth rate in brazil amongst 1986-2003 in parcentage 5,74 Consumers cares about price, flavor and quality, without being influeced by brand name.Poor diffusion channels. ? Only 25% of soda sales are done supermarkets. ? scarcity of vending machine s. A- B C D-E ?Most sophisticated class. ?They have the highest take aims of income and training ? Typical worker ?Lack purchasing power ? Low/ philia class ?Struggle to afford basic ? Compromise 12,6 million goods & serve households ? 28% of total national consumption ? ? ? ? ? ? Worldwide top know brand. Distribution network (9000 vehicles). High quality produces. Wide product mix. handsome market share. Large scale of operations. ? Poor distribution network in rural areas Investment reduction in media and advertising in 67% of product categories ?The price of Coca-Cola is higher than that of competitors ? Price cutting strategy has imprint only on market share and not on profitability ? Develop a much accurate distribution network in rural areas. ? Expanding product range (Guarana). ? Partnership/acquisition with local anaesthetic brands. ? Sponsoring to a greater extent social events (Rio 2016) and contribute to social development. ? Coming up with more(prenominal) eco nomical promotion. ? Leveraging class C. ? Consumer behavior strong price consciusness and low level of loyalty ? Intense competition. B brands competiting illegally (no legal existence hence not paying taxes) ? High threat of new entrants (ex. RC Cola) ? High cracking of demand ? Expanding the output of the companys product (Guarana Kuat) planting 200ha of Guarana Pros they secured the 11% Guarana market in Brazil. Pros they allowed to reach a constitute benefit authoritative the supply and quality of raw materials. ? Venture into Tubainas territory Pros acquisition and engine block of new competitors. Cons acquiring a competitor does not signify securing from its time to come actions. ? Price cutting from $0,65 to 0,45 ? -30%Cons negative effect on profitability. ? Buying arse franchise operations Pros market share back from 48% to 50%. Cons negative effect on profitability. ? Partnership with Norsa Pros market share from 42% in 2002 to 44,5% in 2003 and increasing operati onal profits by 40%, thus implies Tobainass market share dropping by 4%. ? Sponsoring national events (mostly Rio de Janeiro Carnival) Pros dissemination of brand awareness. ? Renovation of the companys plants Pros more effective and efficient operations. ?introducing returnable glass bottle Pros reducing cost of packaging. Strenghten its position in the south-east of Brazil widening its distribution network. ? keep on going on strategic partnerships with local competitors. ? Extend the existing product range and effectively advertise and market it. ? Use different types of packaging to arrive to customers thus increasing their demand ? introduce limited changeation bottles maitaining the same price. ? Make the company organization and asset structure more flexible in order to better respond to an high rivalrous and fast changing environment. ? Increase promotional activities in order to date price competition and improve the peirceived quality for the products.Achieve operatio nal efficiency through economies of scale. ? Exacerbate legal actions against B brands. ? Acquire or build articulatio Ventures with Brazilian companies for exploiting their local knowledge. ? To be more involved in the local distribution, concentrating on the positioning of the products in the shelves. ? To better understand the customers needs and to adapt to local tastes. ? Make the customers understand that they are paying a gift price for a higher quality of products, and not because of the high promotion and advertising expenses.