BUSINESS FACULTY

MANAGEMENT AND INTERNATIONAL

BUSINESS

SUBJECT:

Global Market Perspectives

TEACHER:

Coronel Aquiles, Jorge

STUDENTS:

Rojas Gomez, Genesis Belen

Castillo Rivas, Valeria Geraldine
Cruz Carreño, Carmen Maripaz

LIMA – PERÚ
2023
 TABLE OF CONTENTS

INTRODUCTION 2
1. SWOT: 3
1.1. STRENGTHS: 4
1.2. WEAKNESSES: 4
1.3. OPPORTUNITIES: 5
1.4. THREATS: 5
2. MARKETING TOOLS FOR THIS INTERNATIONAL EXPANSION 5
2.1 STRATEGIES: 7
2.2. MARKETING TOOLS: 8
3. CONSUMER PROFILE 9
3.1. DEMOGRAPHIC: 9
3.2. ECONOMIC: 9
3.3. SOCIAL: 9
3.4. GEOGRAPHICAL: 9
CONCLUSIONS 10
REFERENCES 11
 INTRODUCTION

Is Mexico considered the country with the highest consumption of soft drinks?

According to studies by Yale University, Mexico stands out as the world's leading
consumer of soft drinks, with an astonishing average of 163 liters per person per year.
This is significantly higher than the consumption in the United States, which ranks
second with 118 liters per person per year (Delgado, 2019).

It is even estimated that, on average, Mexicans consume at least one can of soda in their
daily routine. Remarkably, this demand persisted despite price increases, as in 2020,
major bottlers such as Coca Cola Femsa (KOF) and Arca Continental raised the costs of
their beverages by approximately 4% (En Alimentos, 2021).

This context underscores the significance of the beverage market in Mexico and
presents a substantial opportunity for the introduction of successful products, such as
AJE's “Big Cola" However, this market also comes with challenges, including
competition from established brands and the need to adapt to evolving consumer
preferences. A thorough internal and external analysis is essential to identify how AJE
and its product "Big Cola" can seize these opportunities and address the challenges in
their international expansion into the Mexican market.
1. SWOT:

Byrne, J. (2018), a SWOT Analysis is a powerful tool to develop business strategies for
start-up firms as well as for existing companies. An internal environmental analysis
assists an organization in recognizing its inherent strengths and weaknesses, while an
external environmental analysis aids in the identification of opportunities and threats
that are crucial for ensuring the long-term sustainability of the business.

International expansion continued in 2002, this time in Mexico. Mexico then had the
highest per capita soda consumption in the world.

*This is the SWOT analysis that we considered when evaluating AJE's international
expansion of the product "Big Cola" in Mexico.

1.1. STRENGTHS:

- AJE has a long history in the production and distribution of beverages in Latin
America, giving them industry expertise.
- "Big Cola" has proven to be a high-quality product with appealing taste in other
markets, which can gain a positive reception in Mexico.
- AJE is known for offering products at competitive prices, potentially attracting
consumers seeking affordable options.
- The company already has an established distribution infrastructure in Latin
America, making it easier to introduce "Big Cola" to the Mexican market.
1.2. WEAKNESSES:

- Mexico has a highly competitive beverage industry with well-established

multinational companies, making it challenging for new entrants.
- Mexico has specific regulations on beverages, such as taxes on sugary drinks,
which can impact costs and profit margins.
- Mexican consumer preferences may differ from other markets, potentially
requiring adjustments in taste and marketing.
- It is not very preferred in sectors A and B, because they have the perception that
the low price is of poor quality.

1.3. OPPORTUNITIES:

- Mexico is one of the world's leading consumers of soft drinks, creating a

substantial market opportunity.
- Diversifying "Big Cola" across various price segments can attract a wide range
of consumers, from those seeking budget-friendly options to those looking for
premium quality products.
- The growing health concern could open opportunities for AJE to expand its
product line to include healthier or low-sugar beverages.
- AJE can seek alliances with local distributors and retailers to expand its reach
and penetration in the Mexican market.

1.4. THREATS:

- Entry of new carbonated drinks to the market with low prices.

- Changes in beverage regulations, such as additional taxes on sugary drinks, can
impact costs and demand.
- Mexican consumers may have strong loyalty to established brands like
Coca-Cola and Pepsi, making it difficult to capture market share.
- The Mexican economy can be volatile, affecting consumers' ability to spend on
non-essential beverages.

The entry of "Big Cola" into the Mexican market offers significant opportunities due to
the high demand for soft drinks, but it also poses challenges due to strong competition
and specific regulations. AJE will need to adapt to local consumer preferences and
possibly diversify its product line to succeed in this competitive market.
2. MARKETING TOOLS FOR THIS INTERNATIONAL EXPANSION

International marketing is the adaptation of the company's marketing strategy to markets

in other countries, identifying the specific needs in each region. Just as Aje Group has
been doing, to position itself in the international market. Aje Group has a presence in
different countries, with versatile business units such as the following.

About the company, it entered the Mexican market

in 2002 with resounding success and was where
one of its leading brands, the Big Cola soft drink,
was launched for the first time, which has great
acceptance. Currently in Mexico, AJE has 3
production plants, 11 Distribution Centers, more
than 1,150 direct collaborators and, in addition to
Big Cola, highly positioned brands such as Volt,
Sporade, Cifrut, Pulp, Aqua are produced and
marketed.This was achieved thanks to the
positioning and marketing strategies that helped
position the brand in the international market.
2.1 STRATEGIES:

● Concentration in a sector with significant growth potential: The company

decided to focus on markets with substantial growth potential, such as the
socio-economic segments C, D, and E, which are the target audience of the
company.
● In-house distribution and broad coverage: Aje Group has incorporated
micro-entrepreneurs into its distribution network, who, using their own means of
transportation, are responsible for distributing the product in the different
assigned areas of Mexico.
● Diversification of presentation and flavor: The company not only focuses on a
single product but diversifies its products to reach a wider audience. The most
well-known product, Big Cola, initially entered the Mexican market at a price of
17 pesos, which was 30% lower than its competitors.
2.2. MARKETING TOOLS:

● Digital Marketing: Among the tools the company utilizes is digital marketing,
which has been in the market for a few years and adapts to the current landscape.
One of its strategies involves the use of influencers to promote the brand.

"Consumers have started to become more informed about the products. There's a
rising healthy trend. Thus, we aim for influencers to make the functional
attributes of our beverages known," says Erika Córdova, Marketing Manager of
Grupo AJE.

● Market Research: Following research, Aje Group decided to sell Big Cola in
Mexico because the per capita consumption in the country is higher than in Peru
(its residents consume an average of 634 8-ounce servings per capita per year).
● Content Localization: The company adapted its brand to the target market,
Mexico, with a presentation and packaging featuring red, black, and yellow
labeling. In a short time, its growth reached 17 percent nationwide, and even
increased to 25 percent in some regions.
3. CONSUMER PROFILE

The consumer profile is a collection of information intended to help you create better
products, services and offers for your target
market.

3.1. DEMOGRAPHIC:

Mexico is the third most populated country in

the world, with a population that exceeds 120
million inhabitants.

● Age: 19 and 35 years

● Gender: Female and Male
● Education level: Complete
Secondary
● Marital status: Not defined

3.2. ECONOMIC:

According to INEGI Mexico has 4 socioeconomic categories, these are “Low Stratum”,
“Middle-Low Stratum”, “Medium-High Stratum” and “High Stratum”. Likewise, due to
job insecurity, the largest population is located in the low and lower-middle stratum,
with a very small minority located in the high socioeconomic stratum. (Arellano, n.d.)

3.3. SOCIAL:

From a social point of view, the Mexican consumer values ​family and community
relationships. Purchasing decisions can be influenced by the opinions of friends and
family. Brand loyalty can also be strong, and companies that demonstrate social
responsibility often score points in consumer perception.

3.4. GEOGRAPHICAL:

In Mexico, carbonated drinks reflect a preference for traditional flavors such as cola and
fruits.

Price sensitivity is notable, and promotions have a significant impact on purchasing

decisions. Mexicans look for offers and discounts, this is due to economic diversity.

Advertising campaigns that highlight freshness and tradition tend to be well received.
 CONCLUSIONS

The internationalization of AJE to Mexico with Big Cola represents a valuable

opportunity in a market where the demand for soft drinks is substantial. Despite the
fierce competition from established brands like Coca-Cola and Pepsi, AJE has the
advantage of offering a variety of quality products at affordable prices, which could
attract a segment of consumers seeking alternatives. AJE's existing distribution
infrastructure in Latin America simplifies the efficient introduction of Big Cola to
Mexico. However, the company must be vigilant about local regulations, such as taxes
on sugary beverages, which can influence costs and profit margins. Adapting to
Mexican consumer preferences and constant innovation will be crucial for success in
such a competitive and diverse market.
 REFERENCES

Arellano, S. (n.d.). Los estratos socioeconómicos y los salarios en México. México

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https://enalimentos.lat/noticias/3429-crece-en-mexico-consumo-de-refrescos-en-
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