Corona Extra was introduced in the United States in 1979, and became the fastest growing imported beer in U. S history. Corona Extra has been brewed and bottled in Mexico by Grupo Modelo (Mexico’s largest brewer) since 1926. It operates seven state-of-the-art breweries throughout Mexico and currently exporting Corona to more than 1500 countries worldwide (Corona , 2010). The brewer has a 51 percent market share and exports to 56 countries.
Beer has increased its share of total alcohol consumption every year but in 2008 the trend of Corona slowed down.In emerging markets beer has shown higher growth than other alcohol categories as consumers switch local to commercially produced beer. Beer drinking is on the rise and the market of beer drinkers has changed from being predominantly a male product to females now drinking socially too. Over the past five years, the beer category has maintained a compound annual growth rate of 4. 8% globally (www. sabmiller.
com,2010). The beer industry has also seen a trend towards consumers trading up to attractive, local, premium and more expensive beers.Since 1997 Corona has become the number one imported beer in the US, substituting Heineken who had held the number one spot in the beer industry since 1933. With Corona expanding their company internationally into the United States and Canada, Grupo Modelo has already responded to the potential threats that may come because of the unpredictable Mexican economic system and their political environments. Case Study: Miles away from ordinary… 1) Which are the inner competative advantages of Corona? * Production in the territoty of sunny Mexico.
In this way Modello has bigger apportunities to control the quallity of the products.When concentrating its production capacities on one place, the company does not dissipate its efforts over human resources, looking for an appropriate place for the factory, its purchase, which leads to additional expenses. * Preserving the image of party beer. There is a myth around the beer, that it was found out by californian surfers while they were hanging around Mexican coast waiting for the next big wave to appear. * Sufficient financial resources: The company can afford to defray the increase of federal excise duty of the beer in the USA.
After its enacting all other producers of beer transfer the excise over its consumers, in contrast to Modello, who shares the excise between the producer and the distributor according to teh contract between them. * Type of the distribution contracts, which gives distributors independance and allows the developement of healthy competition between them, despite the fact they operate on different geographical markets. Modello enters into an agreement for distribution with Beer Barton Ltd and Gambrinus over the territory of the USA, as each of them distrubutes the beer in 25 differebt states (respectively for the east and west coast.They are responsible for all vital actions which include selling of beer, excluding production.
However, Modello has the final saying when concerning decisions connected with brand image. Thus they create an associate controlling partnership Prosermex. Its activity includes coordinating, supporting and supervising both of the distributors. * Marketing philosophy, which is not focused over the classic market target (men, aged between 25 and 55).
The message is to forget about the ordanary life and replace it with one which is carefree and relaxing.This running away is presented most often as relaxing on the beach. The picture of rising sun and thefresh see breeze remind the customers about the origin of the beer – Mexico. On the one hand, consumers percieve as a mean of relaxation and freshness in hot days on the beach. While, on the other, as a invariable during a crazy party at the beach bar till the dawn.
People’s faces are not shown at teh advertisements, because the accnet is the bottle itself. This inspires the idea that Corona is the beer which allows all the people to run away from their daily routine. The unique bottle – transperent, created according to consumers’ wishes for clean sqare bottles.In comparisson to most of the other beers, Corona is botteled in white, transperent bottles, which create the feeling of freshness and peace of mind.
Furhtermore, the golden label confirms the premium quality of Corona. 2) How could Corona manage with the increasing competition on the local as well as global market? Local Market FEMSA – major competitor on local level, who has its own supermarket chain (Oxo) and full distributor channel, which starts with manufacturing and ends with the end consumer.The company should develop its own distrubutor network in the country so that it could confirm its posiotions on the local market. We strongly recommend creating of trategic alliances with local markets, restaurants and other places of entertainment and thus distribution of Coroma would become more wide-ranging. Besides, an appropriate alliance would be this with the distributors of Pepsi Co. A coallition with the biggest competitor of Coca Cola, would equal the forces in distribution and promotion of the product with these of the competitor.
Global market Heiniken – this company reconsiders its marketing strategy related to the brand image as focusing over the red star, which becomes center of the brand. We agree with the intentions of the company to accomplish a partnership with its american rival - Anheuser-Busch. Such a strategic union would deffinetely gives Corona opportunity to form a brewery colossus with pore than 1/5 market share from the beer world beer market. In this way Corona would take advantage of the established pisitions of Anheuser-Busch on the international market.Another proposal, which we want to give to Corona is to sustain their built image and to promote the brand in the countries where it is not enought well-known. Positionign the brand in the consumers’ consciousness should not be changed it should sustain the idea of relax and run away of the reality.
3) What kind of marketing mix yould you recommend to Corona so that it could improve its positions on the market. * Product * Consistent with the American consumers’ flavour – stronger than this preffered by the European comsumers. Appriopriate for parties and relax on the beach."The only Light beer that is also a Corona" – sustaing the product Corona Light, as it corresponds to the consumer demand of lighter beer as well as the onset of the competitors who also offer such kind of beer.
However, Corona is the only light beer, which is Corona and thus exceed the others. * Preserving form and colour of the bottle * Lounch of a can for convinience of the consumer and recycling. * Communication * Public realtions – sponsor different events connected with surfing, supporting the myth of creating the beer, as well as other sport events such as beach volleyball.We encourage also sponsoring of concerts and thematical partues and thus Corona would be associated with party till the dawn. * Advertising – actual, funny ang intriguing advertiments, which sustains the image of beer which leads you to unknown and exciting places, far away form the rut of grey daily round. Besdes, we offer lauching a mobile site, which allows downloading applications (themes, soundtracks from the advertisements, plays etc.
) And of course, another appropriate method is product placement in popular american TV series such as Gossip Girl, 90210, How I met your mother or Californication.Sales promotions – Corona should make a CD with music from the advertisements, which would be given to the consumers when they buy a certain amount of bottles. Thus we not only will increase the incomes of purcheses, but only will promote the product. * Prices * Following the rule ‘Premium beer on premium prices’, we recommend policy of high prices and the so called Creaming strategy.
Thus Corona will be highly placed in the consumer consciousness as providing him not only premium quality but also high social status.* Distribution We recommend perserving good relationships with both importers as well as testifing trust to them through delegating autonomy on the matker where they are operating. They have full freedom regarding marketing activities which includes promoting the product because they know the consumers and their wishes and expectations even better than Corona itself. * When concerning the company Prosermex – it should supports more the distributors as well as being a bond between the central office and Corona’s partners on the US market.
