1.

Introduction

Major characteristics of the Brazilian soft drink market Brazil is the third largest operation of Coca-Cola after Mexico, and the second largest company in the international market. Brazil is among the ten largest economies in the world in 2004. The country population of about 180 million people living in more than the U.S. mainland. Due to the successful economic stabilization and reform in 1990 for restore and strengthen the purchasing power of the population with low incomes. This reform has allowed withdrawing the country's economy from the period of stagnation, and increased sales, per capita consumption of soda shot up by 60% between 1994 and 1999.6. The main buyers in Brazil are social class C. In Brazil have 5 social classes defined by income, education, and material property of the population. Categories A and B have a high level of income, education and purchasing power. Categories D and E are not involved in the purchase and cannot afford the extra costs of basic goods and services. Class C consumers have been described as typical lower middle class workers and account for 12.6 million Brazilian households. Over the decades, Brazil's consumer market depends on the consumer habits of the population classes C that led to a significant loss of market share brand leader in several categories. Because of the emergence of cheap local products market share of leading global consumer products is not limited to soda drinks. Introduced to market global brands of different product categories are already in use in developing countries. In Brazil, soft drinks were sold in various containers, containers made of glass, PET, and aluminum, with the possibilities, which ranged from 200 ml to 2.5 liters. There are over 3,500 brands of soft drinks in Brazil, is produced in more than 700 plants, in accordance with Coca-Cola Company, which operates in more than two hundred countries since 2001, initiated business in Brazil in 1942. The Brazilian subsidiary of Coca-Cola includes Coca-Cola Industrias Ltda., Amazonas Ltda., and 39 plants spill in 16 independently managed companies. The Brazilian subsidiary of Coca-Cola employs 25,000 people and generated another 250,000 indirect jobs. The company's products are available in nearly one million points of sale. At Coca-Cola achieved sales of around 50% market share of soft drinks (2003). The closest competitor of Coca-Cola is AmBev, which held almost 17% of the Brazilian soft drinks market share. In 2003, Coca-Coca stamps (regular and diet) has been a leader in the Brazilian soft drink market with 35.6% market share. Taste of cola has 45% of the Brazilian soft drinks. The closest competitor market.20 Coca-Cola was Guarana Antarctica, a 7.9% market share. Guarana has been a common name is very popular flavor soft drink in Brazil, who competed with a drink of Coke. Antarctica was a leading beer and soft drink brand owned by AmBev, Coca-Cola's main rival in Brazil. Another Coca-Cola Company brand, Fanta, available in several flavors of Brazil, ranked third in the Brazilian soft drinks market, with 7.1% market share. Although sales of Coca-Cola have grown steadily in Brazil, the brand's market share has declined since 1996 due to competition from products with hundreds of AmBev and inexpensive tubanas. In Brazil, sales depend on the expansion of distribution; since the bulk of the population lives in cities, which are located along the Atlantic coast, millions of Brazilians live in small towns with low

income. This is due to the climatic conditions of the country. Due to the small size of the population and low consumer incomes in these regions prefer to consume low-cost tubanas. Also the main instruments are the distribution in supermarkets and vending machines selling soft drinks. The situation with the Coca Colas position in Brazilian soft drinks market is described in more details in our SWOT analysis.

2. SWOT analysis of the Coca-Cola Company in Brazil.

Strengths 1. 2. 3. International Trade. World leading Soft drink manufacturer Branding obvious and easily recognized Market leader in Brazil soft drink market by more than 50% market share

4. Establish Infrastructure. The Brazilian subsidiary of Coca-Cola employs 25,000 people and generated another 250,000 indirect jobs. 5. Coca Cola having broad product mix in Brazil. Product Line Includes soft drink, bottled water, iced tea, juice & energy drinks. 6. 1. 2. 3. 4. 5. 6. A lot of finance and customer loyalty. The biggest taxpayers in Brazil market. Under develop Distribution channel Lack of popularity of many Coca Colas brands Most unknown and rarely seen Result of low profile or non-existent advertising Health issues Price of Coca Cola product is high compared to local manufacturer Weaknesses

Opportunities 1. Per capita consumption of soft drink in Brazil increasing drastically.

2. Class C consumed 28% of total national consumption & whose buying decisions are influences by quality of product. Which help Coca-Cola to overcome on local brands 3. 4. 5. Many successful brands to pursue Advertise its less popular products Buy out competition.

6. 7. E.

More Brand recognition Changing bottle size from 2 litters to 200 ml, this step help to increase sales in classes D and

Threats 1. Pepsi Ambve alliance for producing & distribute Pepsi product in Brazil. Its result in Pepsi sales grew by 28% in 2003 2. 3. 4. Low price small local brand Tubainas with 32% Market share in 2003. Local Non Tax payers soft drink manufactures who dont have legal existence Very low Brand loyalty & price sensitive Brazilian consumer tends to local low price brand

3. Pros and cons of the several strategies the Coca-Cola Company implemented in Brazil Pros: 1. Business evenly distributed geographically. The company shows in the world's most dynamic growth among enterprises of the consumer segment, which, in turn, analysts believe the most attractive for investors. Coca-Cola is focused on, to take advantage of emerging opportunities to strengthen its positions around the globe. The company's goal is to be number 1 in the world in all categories of soft drinks. 2. Consumers in each country have its own preferences, favorite local brands. In Brazil, the drinks sector growing rapidly in recent years, which, in particular, have contributed to economic reforms. Increasing the product range by expanding the product line through brand extension on the market. Both new flavors such as citrus and strawberries. This helps Coca Cola to increase its visibility in the market. They may be able to cater to all different type of customer with different options, resulting in increased brand loyalty 3. Unlike many competitors, Coca-Cola boasts a well-organized production and distribution. Looking to increase market share, guarana flavored Coca Cola facility renovates production and planted 200 hectares of guarana. This gives an advantage to the management of Coke in cost of raw material supply and quality 4. Coca-Cola Company has offices in more than 200 countries, each local market focuses on the national characteristics, offers a host of domestic programs. So that consumers in all countries perceive the Coca-Cola as part of their everyday life, despite the fact that it is a transnational corporation. Coca-Cola is trying to build goodwill and image in the community by sponsoring and participating in local, regional and national events. This will help Coke to increase social acceptance in the community. 5. Coca Cola will provide a return glass bottles to reduce the cost of several packaging.

Cons: 1. Coca-Cola has acquired several competitors in order to stop the growth of Tubainas, but it will not succeed because there is no entry barrier for new players and former owners. 2. To compete with low cost local brand Coca-Cola has reduced prices by 48%, resulting in negative impact profitability. Coke's initial response to the tubanas' assault was to cut prices. But that didn't help it win back market share, and profits were eroded. "We definitely had a struggle with profitability," says Brian J. Smith, head of Coke's Brazilian operation since 2002. "It didn't match up to our position [with] respect to volume." 3. Redemption franchisees work to promote change in distribution channels, as well lead to negative impact profitability.

4. What should Coke do to be more successful in Brazil 1. Coca-Cola Brazil should work with the parent Coca-Cola Company to develop business model to continue exploring new lines of beverages, extend existing products, participate in new beverage segments and effectively advertise and market the companys products; 2. Develop and expand the non-carbonated beverage portfolio organically and through strategic acquisitions. Concentrate on energy drink, which is upcoming market. Need to step up advertising company, as well as increase the efficiency of the marketing process, because the products of the "Coca-Cola" company refers to these kinds of soft drinks, for which demand does not depend on ambient temperature, with respect to the degree of novelty products, it is different for different types of beverages made by the company. This is due to different dates of creation and market entry of each individual drink with the corresponding trademark, and secondly, in terms of output and duration of treatment of each brand on the market of the country in which the company is represented. This means that a brand stay at the stage of saturation or even decline in a regional market (where it operates long) and is located in the growth phase at the newly opened markets by another region. 3. Implement packaging strategies designed to increase consumer demand for the companys products and to build a strong returnable base for the Coca-Cola brand selectively. 4. Replicating the companys successful best practices throughout the whole value chain. Need to maximize retail outlets, to develop a zone of competition and retail outlets to offer better terms than competitors, because of products of Coca-Cola are the daily basic goods and impulsive purchases. Rationalize and adapt the companys organizational and asset structure in order to be in a better position to respond to a changing competitive environment; 5. Strengthen the companys selling capabilities and selectively implementing-sale system, in order to get closer to clients and help them satisfy the beverage needs of consumers.

Despite the fact that the objective of the company will remain unfulfilled as long as people do not stop torturing thirst, companies need to increase their profits not only by the desire simply to sell more drinks. One tactic is to promote their products in a network "catering" - quick-service restaurants, cafeterias at the school and University. 6. Strengthen pricing. In general, financial and economic activities of enterprises are stable. In this ever-increasing competition in what is important is not the growth of trade, how many of today's holding company's market position, improved asset quality, growth companies (mostly profit) from existing internal resources. Accessibility drinks "Coke" is not a factor, formed by the price. On the contrary, winning markets, companies must not seek to adjust their prices to the market situation in Brazil, as they did before. The Coca-Cola Company in Brazil should use an aggressive system of advertising (commercials, billboards, signs) and providing proximity to customers. ). "When thirsty people go into a store looking for something to drink, the package sells the product. It's a brand's last chance to sell itself," says Hemphill. It's an acknowledgement that in the vastly overcrowded beverage aisle, every advantage counts. Coca-Cola can afford to set a price to be higher than normal domestic producers. With a focus on quality, popularity and convenience of the drink, the company has adopted a common price policy, which should bring it a steady income. Thus, the pricing strategy of the company will provide its undisputed leadership in the beverage market and allows it to gain serious pressure on domestic producers. The one of the mission of the Coca-Cola Company is to create value and make a difference it means that companies need to increase their profits not only by the desire simply to sell more drinks (Company mission, 2011). One tactic is to promote their products in a network "catering" - quickservice restaurants, cafeterias at the school and University.

5. Conclusion Recommendations to global brands to help them compete successfully with B brands in emerging countries 1. To develop distribution in other parts of Brazil. As Coca-Cola Company has well developed distribution channels only on the part of the territory, where the majority of population living in, they still have really poor distribution on the other territories of the country, where are thousands of people live in the separated communities. This market can be really attractive to the company. 2. If company actually needs more profit than market share, than it is better to stay at the premium class product in Brazil mostly, and produce the amount for the mass market. 3. To increase its market share and profitability is to develop new products for the market. In this option company should take into considerations the specific tastes and preferences of local customers. For instance, if on the Brazilian market the sweet beverages with bright colors are popular, Coca-Cola Company should do something in that style. This action will help to achieve new markets and to increase profitability.

4. To mix of two last options, which are presented above. Coca-Cola should develop their distribution channels not only in the densely populated areas of the country, but also on the other territories. This action will help to increase not only the market share of the company but the profitability as well. While company builds the strong distribution on the whole territory of the Brazilian market, it should also create new products. Entering the new market not only in the territory meaning but also in the meaning of new products will make the good push for the Company in targeting new segments and build the strong positions on the existing market.