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Coca Cola Tubainas War Analysis

In: Business and Management

Submitted By jeanluc
Words 841
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Coca Cola’s Marketing Challenges in Brazil: The Tubaínas War Case Analysis

I. Summary
The case study deals with Coca Cola’s attempt to pursue different strategies in order to stand up to the strong growth of the so called tubaínas. Tubaínas is defined as the numerous brands of inexpensive, carbonated and sweet beverages which are manufactured and distributed locally throughout Brazil by hundreds of small companies. Due to the significant growth of the tubaínas in Brazil, Coca Cola intended to find a way to impede and even defeat the steady increase, to sustain their performance and strength.

II. / III. Statement of the problem / Causes of the problem
One of the biggest problems Coca Cola faced was its declining market share in 1999 which dropped to 48%. It became evident that Brazil seemed to be a challenging market for Coca Cola concerning sales, market share and profitability despite the existing high brand awareness all over the world. The decline was the result from the rising social class C which included typical workers in the lower middle class and accounted for around 28% of total national consumption of soft drinks. The outcome of a market study conducted by Boston Consulting Group showed that brand awareness was the least significant factor in the beverage purchase decision of Class C. However lower-priced products, also referred to as B brands, played a decisive role and were preferred. Another market study, published by A.C. Nielsen/CBPA study supported the unimportance of brand awareness by highlighting, that between 1998 and 2000, 63% of the market leaders in 157 product categories lost market shares in Brazil. Consequently, Coca Cola was not able to get into the relevant set of the Class C consumers when they were purchasing soda beverages. In this connection also was the unfair competition ensuing from the tubaínas which only could hold its…...

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