Coca-Cola in Brazil

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Coca-Cola´s Marketing Challenges in Brazil: The Tubaínas War

What recommendations would you make to global brands to help them compete successfully with B brands in emerging markets

In emerging markets global brands need to compete on unfamiliar terrain dominated by local players and plenty of B-brand that sell at price points below the MNC production costs using home court advantages with government regulators, and wrestle with deep-seated social and cultural customs. While the established firms more visible to consumers, taxmen, regulators, and activists, among other communities pay their taxes and abide by labor (and environmental) laws, the less visible makers of B brands allegedly are able to get away with evading taxes and subjecting their workers to weak conditions and compensation. In contrast to the established brands, commonly owned by multinational corporations or by large traditional domestic firms, such “low-end” entrants typically offer low-price, low-quality, largely unadvertised products to low-income consumers, often distributing their products within limited geographic areas, such as a few counties or a fraction of a state or province. Using Coca-Cola experience we can make following recommendations for global brands in emerging markets: • Usually globals work in premium niche segment but they don’t need to forget about mass-segment, for both opportunity and to play defense; it allows to drive down the costs of their premium products by achieving economies of scale in row materials purchasing, manufacturing, sales, distribution and brand building. • Localize “4Ps”: Product – reconfigure global products to compete with consumer preferences for popular local brands, both in price and taste, create new products specific to a market; Place – master the dynamics of local distribution and placement. Distribution is one of the most challenging problems for consumer-products businesses in emerging markets. While supermarket and hypermarket...
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