Corona Beer: From A Local Mexican Player To A Global Brand
UNWE, Marketing and Strategic Plannig,
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.
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...