Flare Fragrance Case

Core issues

Not able to strike the balance between profitability and sales(market share)

Challenges

Improper identification and utilization of distribution channels to increase the profitability

Introduction of new product mix with sustained market share

Target market segment

Economic Class A and B: Forms a major part of coca cola consumers. Price should not be compensated. High profit margin should be kept on these products since these class of consumers are price sensitive

Economic Class C: Comprises of 28% of total consumer population.Bothered about quality. If they perceive quality is similar, then they go in for lower price. Price sensitive. An affordable pricing strategy should be developed for this segment. This segment should be main focus of Coca cola now.

Economic Class D and E: Do not have purchasing power foe even basic needs. Hence not suitable for Coca cola to target this segment.

SWOT Analysis:

Strength:

* Large market share- 50% of the soft drink share

* Brand name- World's no 1 brand. This plays a major role in economic segments A and B

Weakness:

* Absence of strong distribution channels

* Unability to reduce production, packaging and operations cost compared to tubainas

* Lesser number of variants in products as compared to close competitors

* Not having preffered and differentiated flavours of Brazilians like sweet drinks, lime flavoured drinks and other flavours.

Opportunity:

* Vending machines to be explored in Brazil using cups and cans of 200ml

* New variants including mineral water, energy drinks, tetra packs, local flavours

* Collaboration may improve connectivity with Brazilians

Threats:

* New entrants and collaboration between other existing players

* Tetra packs may flop

* Negative publicity may eat our market share

Market characteristics of soft drink market in Brazil

Soft drinks are sold in containers made of glass, PET and Al with capacities from 200ml to 2.5ltr.

3500 brands manufactured in more than 700 plants

Per capita consumption 95.3 lts in 2003

Cola-41.8%, gurana-23.9% and orange flavour-11.4%

Supermarket-accounts for 25% of total sales

Strategy to be successful in Brazil

To increase the market share to an extent such that total profit is satisfactory when compared to other countries :

To increase market share we need to do following things

Introduction of