Coca-Cola Brazil - Tubainas War Essays

The soft drink industry in the United States is a highly profitably, but competitive market. In 2000, carbonated soft drink retail sales were estimated $60.3 billion, however, soft drink consumption growth has slowed in recent years. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the U.S. They are the Coca Cola Company with 44.1% market share, The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/ Seven Up, Inc. with 14.7% market share. These three companies market the top ten brands account for 73% of soft drink sales in the U.S. Dr. Pepper/ Seven Up, Inc. owns two of the top ten brands: Dr.

Consumers around the world bought more snacks and beverages than ever before. They have gained market share in both snacks and beverages in the United States, their biggest market. Internationally snack and beverage units both posted healthy volume growth, even amid economic turbulence.

This report displays the various possible Investment opportunities and Strategic choices for a Scottish Alcohol Company to enter and trade within the South American country of the Federative Republic of Brazil.

The primary driver of non-alcoholic beverages in the U.S. is soft drinks, carbonated beverages that are flavored and don’t contain alcohol. The multibillion dollar U.S. soft drink industry consists

Coca-Cola is sold in over 200 countries and had for years done very well in Brazil. A closer look at Coca-Cola's Brazilian market is presented in an article in the Thunderbird (published by the Garvin School of International Management), which delves into the profit problems that Coca-Cola had in Brazil in the early part of the decade of the 2000s. The article, published in 2004, points out that the fast growth of "off-brand" soft drinks, called tubainas, has taken away profits from Coca-Cola, and created huge marketing problems for the giant soft drink corporation. This review of the article, "Coca-Cola's Marketing Challenges in Brazil: The Tubainas War " written by Gertner, et al explores the issues that Coca-Cola has had to deal with in attempting to gain a bigger share of the soft drink market in Brazil.

In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.

In Brazil, there is not as much of a market for energy drinks as there is in places like the United States. Still, introducing 5-hour energy shots to Brazil could cause the desire for energy drinks to grow in that country. That would open up an entirely new market for energy drinks that could make millions or even billions of dollars for companies that manufacture energy drinks throughout the world. In order to clearly understand how marketing will take place in Brazil and the issues that must be addressed, there are four specific areas that will be considered here. These will be the social-cultural environment of Brazil, the economic environment, the political environment, and the technological environment. Since all of those areas play a role in how an energy drink could be marketed and how much success it might have, they all must be discussed before any decisions are made.

The case explains the economics of the soft drink industry. There activities that add value to consumer at nearly every stage of the value chain of the soft drink industry. The war is primarily fought between Coca-Cola and PepsiCo as market leaders in this industry; who combined have roughly a ninety percent market share in their industry. The impact of globalization on competition has allowed both of these major players to find new markets to tap which has allowed each continued growth potential.

Sales in the United States are declining due to the public concern over sugar. Sales in Europe and Japan are flat, while markets in China and India offer up strong completion for Coca-Cola. Africa’s middle class population is growing at a steady rate, so the disposable income is increasing. This creates an opportunity for Coca-Cola to tap into growth opportunities (Natalia Cheverri 2012).

The change in the consumers' taste is another key trend in the industry. Many substitutes to carbonated soft drinks gained more popularity among consumers. Exhibit 5 shows an increase in the consumption of bottled water from 11.8 in 1998 to 13.2 gallons/capita in 2000, and that of juices from 10 to 10.4 gallons/capita at the expense of

Coca-Cola is the number one non-alcoholic beverage in the world and is also the golden standard in the beverage industry. Over the pass decade carbonated beverage sales has decrease which has lead Coca-Cola to seek for new opportunity and investor. Contribution of US soda sales in Coca-Cola’s revenue could decline to less than 15% by 2020. By the end of 2017 Coca-Cola is looking to refranchise two-thirds of its bottling territories in North America. The outcome of Coca-Cola refranchise two-third of its bottling territories will reduce the revenue to Coca-Cola sales of its products, however the operating margin will increase. Also, this could reduce the percentage contribution by the U.S to Coca-Cola overall revenue.

Coca Cola’s international achievement can be attributed to numerous of things, but in order to think globally one must first think locally. This is the main message that Coca Cola Company place huge emphasis on whenever they are entering a country. (Miller) Coca Cola has formatted its approach strategically using a tactical method, this is done to provide the appropriate marketing activities and beverage to its customers. As part of Coca Cola vision to taste the same around the world, they have chosen to standardize its product and manufacturing process. In Trinidad and Tobago the local name for Coca Cola is “Coke”. From the perspective of consumers the key conceptual categories are not the flavours and colas that marketer hold in high regard, but what we refer to locally as the ‘black’ sweet drink. (Miller) Trinbagonian’s are particularly fond of sugar and sweet products this is linked to the days of the sugar cane field. Coke came into Trinidad in 1939, while under the British Government. (Miller)

The Coca-Cola Company leads the world in manufacturing, marketing and distributing soft drinks. The company is styled as unstoppable due to its universal appeal ranging from Minute Maid orange juice, Dasani purified water to PowerAde sports drinks and Fuze vitamin-enhanced water. Indeed, despite the fact that Coca-Cola has ruled the drink market for the twenty years, however, "the soft-drink giant is struggling as per-capita consumption of soda has hit multi-decade lows."

The global beverages industry is currently a low-growth market, with an expected compound annual growth rate of 5.7% between 2017 and 2025 (Grand View Research 2017). Additionally, the industry is quite saturated with firms that offer increasingly differentiated products. However, due to this low growth rate, companies have been engaging in price competition to gain competitive advantage and increase their market share. Nevertheless, Coca Cola is a dominant force in this market, controlling 40% of the industry, and is therefore at a low risk of losing its position.

The Coca-Cola Company was created in Atlanta, Georgia, in the year 1886. The company is considered to be number one non-alcoholic beverage company in the world. It is leading in marketing, distributing an manufacturing its product which is the concentrate and syrup. Both the concentrate and syrup are sold to bottling companies for final product and packaging to consumers. Coca-Cola company has a wide range of products of about 500 different beverage brands around the world. In the early 1920 the company started its path of globalization, and now operating in more than 200 countries. Together with the bottling companies Coca-Cola has created the best production and distribution system worldwide. The employees are very involved