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Corona Beer
- 1. INTERNATIONAL MARKETING (MKT3100) Group 4
- 2. OVERVIEW • Current Situation Analysis - Vinothini • Industry Analysis - Asjad • PESTEL Analysis - Dhananji • ANSOFF - Dhananji • Porters 5 Forces - Vinothini • SWOT Analysis - Asjad • 7P’s - Thilini • Market Segmentation - Thilini • Market Strategies - Vinothini • Positioning Strategies - Thilini • Recommendation - Thilini
- 3. Current Situation (Ashok Som, case 13, corona beer) •Formed in 1922, 1st brewery in 1925 •8 breweries in Mexico •Current chairman – Carlos Fernandez •Listed in the Mexican stock exchange •Considerable stake owned by Anheuser-Busch
- 4. • Mexico’s largestbeer producer and distributor • Corona extra- world’s fourth best selling beer • Top imported beer in the US market • Among top 10 breweries of the world • Market leader
- 5. Vision By 2015, earnover half of our revenue from International markets, and to consistently strengthen our leadership in the domestic market, while maintaining profitability. Grupo Model’s vision consists of three key aspects: to inspire pride, passion and commitment to the beverage market. Mission Statement To produce, distribute and sell quality beer, at a competitive price, optimizing resources and surpassing customer expectation, in order to contribute to the economic and social development of Mexico as well as growing as a multinational competitor in the beverage market, inspiring pride, passion and commitment, and generating value for our stakeholders.
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- 8. US BEER MARKET Source: Beer Brewer Industry Analysis, Matt Ford, April 16th 2008
- 9. Source: Beer BrewerIndustry Analysis, Matt Ford, April 16th 2008
- 10. US Market Share (Source: Ashok Som, n.d) Market Share 20% Anheuser - Busch 45% Miller Brew 10% Adolph Coors Others 25%
- 11. Mexico Market (Source: Ashok Som, n.d) Market Share 37% Femsa Corona 63%
- 12. Key Performance Indicators
- 13. Total imported Beersin the United States 2006 – 2007 (thousands of cases) Brand 2006 2007 • Corona Extra 116,155 115,000 • Heineken 66,790 68,100 • Modelo 19,605 22,404 • Guinness 12,725 13,360 • Corona Light 11,055 12,207 • Laball Blue 12,500 12,000 • Tecate 17,480 19,050 • Heineken Light 7,520 9,775 • Slella Artols 6,175 8,335 • Amstel Light 8,900 8,188 Total top 10 280,905 288,479 ____________________________________________________ Estimate. Source: GrupoModelo’s annual report, 2007
- 14. Competitors’ Earning Capacity Source: Beer Brewer Industry Analysis, Matt Ford, April 16th 2008
- 15. Stock Prices Company Stock Prices Anheuser Busch Inbev SA (BUD) $56.21 - $57.17 Grupo Modelo SAB de CV (GPMCF.PK) $6.38 Coca Cola Femsa SAB de CV (KOF.N) $87.83 - $88.20 Source: www.reuters.com,search Results. (n.d.).
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- 18. Anheuser-Busch InBev Annual Report2009, p.64
- 19. Anheuser-Busch InBev Annual Report2009, p.64
- 22. POLITICAL FACTORS – An unstable political environment • Corruption • Drug Cartels – Trade Regulations & Tariffs • North American Free Trade Agreement (NAFTA) • Federal excise tax - Absorb the tax rather than passing it to the consumers S, Abhijeet. Management Paradise.com. December 01, 2010. http://www.managementparadise.com/forums/principles-management-p-o- m/208681-pest-analysis-nafta.html (accessed November 09, 2011).
- 23. ECONOMICAL FACTORS – 11th Largest Economy – An unpredictable (volatility) Mexican economy • Devaluation of the Peso in 1995 • Expensive to export BUSINESS, rediff. rediff.com. October 13, 2011. http://www.rediff.com/business/slide-show/slide-show-1-worlds-20-largest- economies/20111013.htm (accessed November 10, 2011).
- 24. SOCIAL FACTORS –Birthplace of tequila drinking market – New target segment • attractive women • parties (minimalist and humorous, escape scene rather on the beach) – Changing consumer attitudes-healthier lifestyles
- 25. ChartsBin. March 10,2011. http://chartsbin.com/view/1017 (accessed November 11, 2011)
- 26. TECHNOLOGICAL FACTORS – Different Transportations • Maritime (58%) • Air • Terrestrial (75%) – Brewing technologies – New advertising media – Keeping up with technological innovations Campuzano, Sandra, Lucia Castanedo, Alexandra Bell, Eloise Lill Anderson, Christian Brockschnieder, and Yan Tat Chan. Globalization Seminar: The Success of Corona Beer as a Worldwide Company. Group Analysis, September, 2007
- 27. ENVIRONMENTAL FACTORS – Voluntary reporting of carbon emissions
- 28. LEGAL FACTORS –Laws controlling advertising – Specifications of the packaging –National Regulations – Increased regulations by governments concerning alcohol distribution and production • Drunk driving • Health effects both short term and long term
- 29. Market Development Diversification •Domestic Markets •Sold the same beer but •International Markets diversified by moving into an New •Distributors international arena and enticed •No Specific Demography the international consumer. •Not targeted at one type of •Made the market crave for its consumer originality rather than change itself to suit the market Market Penetration Product Development MARKETS •Ad campaigns concentrated on •Started with Modelo the beer only. •Improved to Corona, Corona •Escape from everyday life light, Corona Extra etc •Absorbed tax instead of •Gave allowance to the passing it on to consumers. experienced international •Made strong ties with distributor to handle majority of international players who were international related Existing the best in the market in there responsibilities localities. •Acquiring more distributors to •Joined hands with market increase international alliances leader Anheuser Busch. and generate more revenue. Existing Products & Services New
- 30. Porter’s 5 Force Model
- 32. Threat of Substitutes– high threat Threat of New Entrants – low threat Bargaining Power of Buyers – moderate threat Bargaining Power of Suppliers – low threat Intra-Industry Competition – high threat
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- 34. Strengths • Mexico’s LargestBeer production & distribution • Corona Extra – 4th Best Selling beer in volume • Market Leader - No. 1 selling import beer in US • Distributors absorb taxes without passing to consumers
- 35. • 62.8% marketshare in Mexico 2007 (case study) • Brilliant and unique marketing campaign • Distributors in US well established
- 36. • Strong brandimage • Company has a long and well established history and experience in the beer market • Grupo Models has an extensive network of distribution channels throughout 159 countries and the company is ranked as the 27th On the list of global imported Premium beers • Highly differentiated product
- 37. Weakness • Lack ofpartners in the United States • Distribution costs rising since they refuse to brew in other countries • Small in size compared to revenue, operations compared to major competitors • Missing opportunities with merging with other brewing companies • Product positioning makes the product an occasional drink not a frequent drink in the minds of the consumer
- 38. Opportunities • Anheuser-Busch InBevsignificant interest in the company • Countries like Germany fond of beer • China largest beer market after 2003 • Distributors absorb taxes – cost leadership
- 39. • Main revenuecomes from Mexico and the United States • Major share in Mexico • Establish a JV with Pepsi Co since they have a fabulous distribution and customer relations network • Mexico dominated by only 2 brewing companies
- 40. Threats • Heineken isCorona’s main competitor • Increased Government regulations on the industry • FEMSA owns Oxxo, largest chain of convenient stores in Central America • FEMSA major competitor in Mexico
- 41. • Rumors ofmergers and acquisitions between large players in the beer industry • Beer isn’t considered as a healthy product • Increase in drunk driving and other legal laws can reduce sales in the industry
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- 43. Product • The producthas been modified several times in order to be able to be put on the market in 80 countries • A special aspect is that the Corona logo is engraved on the package. • It has become a tradition to drink Corona straight from the bottle with a wedge of lime inserted into the neck to add flavor.
- 44. Price • Premium pricingstrategy in the US to position as an Imported beer • Advantage over competitors like Heineken as distributors absorb taxes
- 45. Place • To reachcustomers most effectively, they rely on an extensive distribution network and services-oriented sales force that ensures the company’s products are available in the right time at the right place. • Provides a high level of service to each point of sale with segmentation by type of clients and by having differentiated execution. Domestic distribution also includes the Extra chain of proprietary convenience stores.
- 46. Promotion • Corona’s advertisingtheme had emphasized the “fun, sun, beach” theme since its inception. The original “vacation in a bottle” Ads was filmed in Mexico and kept simple and clear with a beach environment, with little music. • Promotion is done at high-level sponsor events such as racing car events, world football matches, the Paris – Dakar racing challenge, major exhibitions and international fairs around China and the US.
- 47. Process 1. Malting 12.Continenal Airlines 2. Soaking 3. Wort 11.Wholesale Filtration Process 4.Wort Boiling 10.Bottling 5. Separation 9.Filteration of regs 6.Wort 8.Ripening Cooling 7.Fermentation
- 48. People • The companyhas developed its own integrated system of continuous employee training and development through which employees are able to increase their skills. Physical Evidence • Billboards, Posters, broachers and other props. • Bottle and canned packaging in supermarkets.
- 49. Competitors Domestic Competitor: FEMSA :Significant competition due to high quality and its top‘6 best-tasting beers in Mexico. It also entered into marketing partnership with Heineken to grow its share in USA International Competitors: • Anheuser-Busch: 50% shares in Grupo Modelo and partnered with it to distribute its products in Mexico. • Heineken: Main import competitor in US, & plan to be the market leader through aggressive marketing campaigns.
- 50. Total Imported beerin the US 2005-2006 (Thousands of cases) 2005 2006 Change Corona Extra 104,815 115,295 10.0% Heineken 64,350 69,050 7.0% Modelo Especail 14,635 19,757 35.0% Tecate 15,800 16,906 7.0% Labatt Blue 13,315 13,715 3.0% Corona Light 9,610 11,147 16.0% Heineken Light 7,500 Source : Grupo Modelo 2006 Annual Report
- 51. Market Segmentation Target Market •Developed an image of a beer that would attract everyone • Enticed non beer drinking population to drink beer specially females • Targeted on the working class as an escape from reality • Targeted on people who appreciates an adventurous life style (Surfers)
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- 53. Demographics Psychographics Geographic's Primary Target The weight and image Entire US, Urban centers Characteristics: conscious mature upper- of 500,000 or more Age: 35 & above middle class who might Gender: Male & Female see a rejuvenation effect Income: $60,000 by associating with this Lifestyle: Semi- new hip and healthier Professional, Professional beer. Secondary Target Consumers who engage in Entire US, Especially Characteristics: leisurely activities, such as Southwestern US Age: 21 to 34 lounging, socializing, and Gender: Male & Female vacationing in tropical Income: Low to Middle destinations, whom value Lifestyle: Blue Collar / relationships, relaxation, Retail / Semi Professional and individuality Language: English speakers, Spanish spoken in the home
- 54. Demographics 80.00% 70.00% 60.00% 50.00% 40.00% Age between 21-34 30.00% Age 35 & Above 20.00% 10.00% 0.00% Bud's Coor's Miller Lite Corona Light Light Light Source: The demographics of beer. - Free Online Library. (n.d.). Retrieved 11 08, 2011, from Free News, Magazines, Newspapers, Journals, Reference Articles and Classic Books - Free Online Library: http://www.thefreelibrary.com/The+demographics+of+beer.-a0134384833
- 55. Market Strategies • Brilliantand unique market campaigns which was a direct result of the international strategy. • Distribution contracts with companies that had local knowledge of the market s and gave them autonomy to market the product fittingly yet, maintained an active involvement in the decision making. • Developed an image of a beer that would attract everyone. “Fun in the sun” campaigns it sold the idea of escape and the idea of leaving behind everyday life for one that is relaxing. • Modelo set up Procermex Inc, a subsidiary whose purpose was to coordinate, support and supervise the two distributors. Which proved to be a further strength.
- 56. Product Development • Sugarfree beer for the health conscious consumer. • Corona mainly into lager, huge potential in stout beers that Groupo Modelo has not looked into • Ladies for instance a pink light beer • Flavored beer
- 57. Positioning Strategy • Corona’sposition is all about the fantasy that drinking the beer will transport you to a tranquil sandy beach where all your stresses of the modern world are washed away.
- 58. Value Proposition • In the US, Canada, Australia and UK Corona Beer have become increasingly popular among “trendy” or fashion conscious consumers. • It’s viewed a cool and stylish “designer” beer.
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- 60. Recommendations • Increase Marketingbudget and engage in focused advertising towards specific target segments such as Young people, Women, Health-conscious consumers etc. • Develop efficient supply chain to better manage the inventory and increase availability of its product in stores. • Expand in International market especially China & Australia which are the leading consumers of beer. • Expand its portfolio of “malternatives" in light of the social changes leading to increased popularity of low calorie drinks and flavored alcoholic beverages.
- 61. Thank You Enjoy your weekend with a Corona Beer.