Report of the Corona Beer Case Analysis
The Grupo Modelo (Former: Cerveceria Modelo) was formed in
1922, after the development of about 85 years, it has become the biggest beer producer in Mexico, the number one selling import in the United States and also the world’s fourth best selling beer. The brand Corona is the most famous one and the most successful beer among import beers in the United States.
The international strategies of Grupo Modelo and evaluation
In 1979, the Modelo decided to go global. First of all, they chose the US as the target market, due to the US had the largest beer market in the world and the consumption per capita is very high. The US is a diversified country that beer is popular among male adults with the age range of 25-45, so the product from Mexico can be well adapted into their culture. Also, Mexico is not far away from the US, the transportation is relatively convenient and low cost; the company could take advantage of Mexican low labor cost to produce beer instead of investing a brewery abroad. They use the concentration strategy to focus on the American market as the US has the largest potential consumers and profits.
Moreover, the Corona’s first entry into the US is depended on distributor named Barton Beers Ltd. which was the largest beer importer in the 25 western states and was experienced in the marketing and sales of imported premium beers. In addition, the importer would be
responsible for all activities involving the sale of the beer, including transportation, insurance, custom clearance, pricing strategy and the advertising. Modelo gave autonomous right to its distributors because the import company had local and specialized knowledge of the market, they knew everything about marketing better. Modelo always took an active role in the decision-making to make sure they can maintain the final say on everything related to its brand image, so they can avoid the communication problems and control...
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