FINAL ACCESSMENT Module: GLOBAL MARKETING Code: MKT3040 AS2 - Investigative Report

INTERNATIONAL ACCESSMENT Module: GLOBAL MARKETING Code: MKT3040 AS2 – Investigative Report Student: NGUYEN PHAM KY NAM Student ID: 1705025031 Northampton Student ID: 22403585 Cohort: K57NO Semester: I Academic year: 2021-2022 Headteacher: Ho Thi Hai Thuy Submission date: 22 December 2021 Student’s signature: FOR EXAMINERS ONLY Grade (in number): .................. Student: NGUYEN PHAM

FINAL ACCESSMENT
Module: GLOBAL MARKETING
Code: MKT3040
AS2 – Investigative Report
Ho Chi Minh City, November 2021
EXECUTIVE SUMMARY
The investigative research examines and assesses Coca-Cola, a prominent beverage
companyentry ,'s into the developing Brazilian market. It begins by providing an
overview of Coca-Cola and its aim to expand internationally. There are several reasons
1
Student: NGUYEN PHAM KY NAM
Student ID: 1705025031
Northampton Student ID: 22403585
Cohort: K57NO
Semester: I
Academic year: 2021-2022
Headteacher: Ho Thi Hai Thuy
Submission date: 22 December 2021
Student’s signature:
FOR EXAMINERS ONLY
Grade (in number):
………………..
Grade (in words):
………………..
Examiner 1
(Signature & Fullname)
………………..
Examiner 2
(Signature & Fullname)
………………..

and factors that led Coca-Cola to select Brazil as the primary site for its worldwide
development strategy.
The paper also analyzes internal and external variables that influence Coca-decision
Cola's to grow into Mexico and Brazil. Brazil's market offers more cultural benefits and
lesser political risk than Mexico's market. However, as the world's largest beverage
corporation, Coca-Cola must recognize the commercial potential in Brazil, which makes
Brazil a fantastic target for Coca-worldwide Cola's growth strategy.
The paper includes a discussion of Coca-one Cola's strategy of entering Brazil:
hierarchical entry mode (acquisition).
The final portion of the research discusses Coca-probable Cola's marketing plan for its
largest overseas market, Brazil.
Table of Contents
1. INTRODUCTION OF THE COMPANY....................................................................................................4
1.1. General information..........................................................................................................................4
1.2. Globalization....................................................................................................................................4
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2. INTERNATIONAL MARKET SELECTION.................................................................................................4
2.1. Market selection criteria...................................................................................................................4
2.2. Comparison of Market Mexico and market Brazil............................................................................6
2.3. Evaluations of market Mexico and market Brazil.............................................................................8
3. MARKET ENTRY MODE IN BRAZIL.......................................................................................................8
3.1. Factors affecting mode of entry selection.........................................................................................8
3.1.1 Internal Factors...........................................................................................................................8
3.1.2 External Factors..........................................................................................................................8
3.1.3 Desired Mode Characteristic......................................................................................................9
3.2. Mode of entry applied.......................................................................................................................9
4. INTERNATIONAL MARKETING STRATEGIES.........................................................................................9
REFERENCES...........................................................................................................................................9
1. INTRODUCTION OF THE COMPANY
1.1. General information
The Coca-Cola Company, founded in 1892, is primarily engaged in the manufacturing
and marketing of syrup and concentrate for Coca-Cola, a sweetened carbonated beverage
that has become a cultural institution in the United States and a global emblem of
American taste. The company creates and sells a variety of beverages, including soft
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drinks and citrus beverages. Coca-Cola, the world's largest beverage manufacturer and
distributor, is also one of the largest American companies, with over 2,800 products
marketed in over 200 countries. The headquarters are located in Atlanta, Georgia.
Their drinks are now eaten in more than 200 nations worldwide. The Coca-Cola
Company employs more than 700,000 people worldwide through its 225+ bottling
partners (The Coca-Cola Company | More Than a Beverage Company, 2021).
1.2. Globalization
The Coca-Cola Company began developing its global network in the 1920s. Coca-Cola,
the world's largest beverage manufacturer, has successfully implemented a simple
formula on a global scale: a billion refreshment moments every day at an affordable price
in more than 200 countries. In other words, Coke and its network of bottlers constitute
the world's most advanced and broadly spread distribution system. The system is
primarily focused on Coca-Cola and Diet Coke, as well as Sprite and other Company
products.
Coca-Cola has brought delight to thirsty people worldwide, from Boston to Beijing, more
than any other consumer product. Coca-Cola has offered a moment of pure delight to
hundreds of millions of people across the world every day for the last 125 years. Coca-
supremacy Cola's as the world's most popular soft drink continues to grow. Every day,
Coca-Cola provides consumers with a unique taste of refreshment. Over the course of
more than a century of development, Coca-Cola has been a persistent symbol of superior
refreshment (The Chronicle of Coca-Cola: A Global Business, 2021).
2. INTERNATIONAL MARKET SELECTION
There are numerous countries in which LSEs have established business, and they must
decide where to sell new products. Due to current operations, it is easier for LSEs to
obtain product-specific data in the form of primary information rather than secondary
databases.. LSEs will be able to be more proactive as a result of this. A more proactive
IMS approach, arranged in a methodical and step-by-step examination, might be a
gratifying manner for small businesses to choose markets. (Hollensen, 2012)
2.1. Market selection criteria
When a firm is seeking to enter a new market, knowing what they want is crucial. While
expanding, a company should focus on how to invest money in new markets. By
precisely outlining the main criteria, the organization may better plan for the future and
maximize income and expenditure sources as well as marketing strategy.
When a corporation aims to attract a given demographic, it does not exclude everyone.
Markets that are more likely to buy from you may be targeted with marketing money and
brand messages. In this way, you may attract new clients and generate money at a lower
cost. If you're attempting to reach a specific demographic, you don't exclude everyone.
With targeted marketing, You may target a certain market with your marketing budget
and brand messaging. This is the simplest and most cost-effective method available
(Inc.com, 2021).
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When Coca-Cola determines which markets to enter, it considers many variables. So the
author will concentrate on the four most significant and readily observable criteria for
Coca Cola.
Demographics
Using demographic data to segment your audience is a great way to get a better
understanding of who your customers are as a whole. Using demographic characteristics
to segment the Coca-Cola Company's market is simple because various regions of the
world have distinct demographics. It's another segmentation tool that Coca-Cola may use
to better understand its customers. When it comes to loyalty, there are two types of
consumers: those who are extremely devoted and those who aren't. While some people
are passionate devotees of a certain brand, others are more casual. Segmenting a market
based on these characteristics is possible (Perner, 2010)
Lifestyles
Lifestyles are often studied through activity, interest, and opinion research. International
researchers, on the other hand, lack a comparable research instrument. Perhaps some of
the study's participants' consumption patterns or behaviors might be utilized as an
indicator of the lifestyle being investigated. As a general indicator, the amount of alcohol
consumed might be employed. An worldwide beverage firm should be prepared to deal
with a wide range of lifestyles based on the kind of beverages they serve.
Cutural characteristics
According to Hollensen (2012), Segmentation of the globe market may be affected by
cultural differences. To capitalize on worldwide markets or sectors of global
marketplaces, companies must have a solid grasp of what drives consumer behavior in
various areas. They need to understand how to identify the extent to which marketing
operations might achieve similarity across products or services Language, spirituality,
beliefs and values, material components and innovation, aesthetics, education, and social
institutions are all dynamic features that might be utilized as segmentation criteria in a
particular community.
Consumer spending power
According to Investopedia (2021), divisions based on consumer income have the
potential for lucrative sales development since the firm can give excellent items to clients
based on their purchasing power. If the consumer has strong purchasing power, the
corporation may supply big amounts of products, but if the customer has little purchasing
power, the same things can be supplied in smaller packages. Everywhere in the globe,
Coca Cola distributes its product in a range of sizes and packaging at affordable prices.
This category is tied to family size due to bottle size and packaging variations (Anders,
2021).
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2.2. Comparison of Market Mexico and market Brazil
To illustrate the aforementioned requirements, the author will use examples from two
nations in two of Coca-primary Cola's market areas. Both of these countries, Mexico in
North America and Brazil in Latin America, use a considerable amount of Coca Cola
goods (University Magazine, 2021).
Source: Statista 2021
DEMOGRAPHIC
More than 43 million women between the
ages of 15 and 64 are expected to populate
Mexico in 2020, according to the country's
2020 demographic forecast. The only age
group in which the male population
outweighs the female population is between
the ages of 0 and 14 (Statista, 2021)
Since 1950, the population has grown from
little over 53 million to more than 210 million
people according to the 2019 version of the
World Population Prospects. In 2015, 23.0
percent of the population was under the age of
13, while 69.2 percent was between the ages
of 15 and 61, and 7.8 percent was over the
age of 65.
LIFESTYLE
Although Mexicans consume more soda than
any other country in the world, their top three
daily sources of calories in 2012 were all
high-calorie beverages. As a result of sugary
drink consumption, chronic illnesses like
diabetes and heart disease kill more people in
Mexico than any other country (The
Guardian, 2015). This beverage is so essential
to Mexican culture that it has influenced
politics and religion in some areas. (Business
Brazilians love to play sports and in this
country, sport in general and football in
particular is like a religion. And the fact that
people in Brazil worship sports as a religion
makes the beverage industry, especially soft
drinks, an indispensable part of their lives.
However, in this country full of living culture,
it is still a huge challenge for soft drinks to
compete with alcohol.
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Insider, 2018)
CONSUMER PAYING POWER
According to Statista Research Department
(2021), in May 2020, Mexico will have
produced around 1.27 billion liters of cola
drinks, up from 1.22 billion liters produced in
May 2019. This includes both refundable and
non-refundable bottles and cans. In recent
years, the months of May through August
have seen a spike in Mexico's manufacturing
of cola drinks. Which means within a week, a
Mexican can drink almost a package of Coke
without considering about their health.
In today's economy, people are more likely to
invest in experiences than in items. Brazilians
spend a lot of money on gadgets and beauty
items, which is why they are one of the
world's largest marketplaces for cosmetics.
According to Oxfam's most recent estimates,
the richest 1% of Brazilians have the same
wealth as the lowest 50% of the population
(approximately 100 million people), and the
richest 5% of Brazilians have the same
income as the other 95%.
CUTURAL CHARACTERISTIC
The Aztec and Mayan civilizations, as
well as European colonization, have left
their mark on Mexico's rich, vivid culture.
It's one of a kind and one of the world's
most intriguing civilizations (Dwyer, 2017)
Since its inception, Brazil has been
characterized by a strong convergence and
a large diversity of races, customs,
languages, and creeds that combine to
form the features of Brazilian culture as
we know it today.
The country of Brazil is made up of 27
states that cover an area of more than 8
million square kilometers. Each of these
republics is unique in its own way, from
the cuisine and environment to the unique
features of the local inhabitants. In
addition to its immensity, the country is a
cultural treasure trove.
2.3. Evaluations of market Mexico and market Brazil
Based on our research, the two nations mentioned above are still open markets that can be
exploited. Coca-export Cola's to these two countries is quite reasonable. Despite meeting
the evaluation standards in both areas, Coca-Cola confronts many weaknesses and
obstacles in retaining a strong position.
Mexican Coca-Cola has the largest income and market share, but the Mexican
government is placing pressure on the industry due to increased diabetes and early deaths.
Unintentional consumption of carbonated soft drinks is on the rise. In Oaxaca, a state in
southern Mexico, children are prohibited from purchasing carbonated soft drinks. This
will negatively affect Coca-future Cola's income.
Brazil, while not as wealthy as Mexico, is South America's most valuable market. While
the beverage industry in this country has issues, Coca Cola has a lot of promise if it can
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use its human-centered values. using a lifestyle to make Coca-Cola products more
accessible.
3. MARKET ENTRY MODE IN BRAZIL
According to Coca-Cola FEMSA, Coca-Cola has been using the hierarchical mode to
enter into Brazil since 2008, when it acquired Refrigerantes Minas Gerais (REMIL).
3.1. Factors affecting mode of entry selection
3.1.1 Internal Factors
Following a survey, it was found by Dow and Larimo (2009) that companies need to be
aware that not all types of experience are created similarly. The selection of a high-
control entrance style is connected with international experience from similar nations
(with a low felt mental distance) (i.e. entry by wholly owned subsidiary). There is
evidence to suggest that exploring each geographic region sequentially rather than
'hopping' from region to region is preferable. This would help to optimize the benefits of
the expertise gained inside a cluster. Coca-Cola has an excellent possibility to gently
enter adjacent nations due to the fact that areas in the Americas have comparable cultural
habits, physical locations, and demographics. Coca-Cola had prior experience in nations
with Brazilian cultures, such as Mexico and Argentina, prior to starting business in
Brazil.
3.1.2 External Factors
The country's size and the market's growth rate influence the entry path. The bigger the
country and market, and the faster it grows, the more likely management is to invest in it
and consider setting up a wholly owned sales subsidiary or a majority-owned joint
venture. Controlling operations allows management to effectively plan and lead market
development. Brazil has the largest population in the Americas, thus Coca Cola should
consider joining the beverage market here. According to Forbes (2014), Coca-choice
Cola's to enter this market gives them up to 7% of the worldwide share..
3.1.3 Desired Mode Characteristic
Wholly owned subsidiaries (hierarchical mode) give the greatest amount of control, but
they also need a significant investment of time and money. Modes of entry decisions
must also take into account the level of control that management requires over operations
in overseas markets before making a final selection. Control is frequently found to be
directly related to the amount of commitment of resources. Modes of entrance that
require minimum resource commitment, such as indirect exporting, allow for little or no
control over the conditions under which a product or service is sold in a foreign country.
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3.2. Mode of entry applied
For the soft-drink industry, Coca-Cola made the proper option by opting for a
hierarchical entry strategy. All goods and customer experiences must be aligned with the
brand's orientation since that is what the company's vision and orientation is all about.
Coca Cola's financial goals and affairs are better managed when the corporation owns a
subsidiary in a certain region.
4. INTERNATIONAL MARKETING STRATEGIES
Customer interaction and brand establishment
Brand establishment is crucial for expanding a company's portfolio. Consumers trust
branded items more and are ready to pay more for them. In established markets, brand
name is assumed. Coca-Cola wisely invested over $250 million in updating and
enhancing advertisements to improve brand value.
These commercials attempted to change people's image of Coca Cola from an occasional
drink to a vital part of their life. Through strategic agreements with Monster Beverage
Corporation, Suja (a brand of premium organic juices), Fairlife ultra filtered milk, and
others, the company's position in the energy drink, juice, and healthy drink categories was
boosted.
Substitute for alcoholic beverages
With rising business and personal stress levels, more Brazilians are turning to dangerous
drugs like alcohol, smoking, and chewing tobacco. When they recognize their mistakes
and strive to overcome their addiction, it is typically too late. It may consider developing
a new sub-brand focused on this issue, which may generate significant demand and a
favorable public image. Although there are identical prescription medications, Coca-Cola
may advertise its product utilizing its brand name and unique marketing approach..
REFERENCES
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The Guardian. 2021. How one of the most obese countries on earth took on the soda
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