Monday, October 27, 2014

Coca-Cola changes after weaker sales

Global leader in soft drinks, Coca-Cola tried to show to the market last week that, despite the dominance in the segment, is not sitting back against the worsening of their results. After seeing its sales volume grow just 1% in the quarter and decline in markets such as Brazil, the company admitted that it will not meet its annual goal to expand between 3% and 4% in 2014. Therefore, promised to cut $ 3 billion in costs to keep profit even in an adverse scenario.
One of the areas to be affected by the situation should be marketing. A day after the disclosure of the balance sheet, the company announced the replacement of the Chief, Joseph Tripodi. The Executive, who served seven years at the helm of the company's communications, was responsible for the creation of the concept "Open happiness" which related the soda to positive causes.
Lately, however, the strategy had been reflecting on what sales put Tripodi in difficult situation, according to report in the Wall Street Journal, anticipating his departure.
For sources of advertising market, make marketing of soda is hard. The drink is facing a crisis of global image, being the frequency-related problems like childhood obesity.
Therefore, the global giant opted to "go on a tangent", talking about almost everything but of your product. "For a long time, the strategy worked. They made several beautiful campaigns ", says a publicist who has worked for brands of the segment.
That bet on institutional marketing was possible thanks to the dominance of Coca-Cola, which accounts for 60% of sales in markets such as Brazil. "As our product is very recognized, we focus on the brand. Maybe we need to go back to explore the products, "said the State the Vice President of communications for Coca-Cola Brazil, Marco Simoes.
In Brazil, after consecutive years of growth, the soft drink market lives in 2014 the third year of decline in the country. Coca-Cola's sales fell 1 percent in the third quarter, as compared to the same period in 2013.
The competition is also affecting the company's performance. In the second quarter, sales by volume of Coca-Cola remained stagnant, despite the World Cup. Ambev, which already distributes Guarana Antarctica and Pepsi in the country, had growth of 8.8% over the same period.
According to the second-quarter balance of Ambev, its brands registered 1.2 percentage point increase compared to the second quarter of 2013, reaching 19.2 percent of the market. The Coca-Cola Company cited in its results that, between April and June, faced a bad macroeconomic scenario in the country and suffered also with actions of rivals.
To reverse the adverse scenario in soft drinks, Coca-Cola also bet on increasing your portfolio. Today, in Brazil, the company is present in segments such as nectars, waters, teas and energy drinks. But the main product still accounts for about 70% of sales, according to market sources. "Although the sectors are smaller, they contribute to the result, because the price of the products is higher," says Simoes.
Investments
The cuts that Coca-Cola plans to perform should not affect the local strategy. Economies, explains Simões, will be made in the day to day operations, and strategic projects, such as the Olympic Games. The investment planned by Coca-Cola for the Country between 2012 and 2016 is r $ 14.2 billion, 50 percent more than in the previous five years.
O Estado de S Paulo
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