Corona There Are a Number of Trends Case Study

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Corona

There are a number of trends in the global beer industry. One is consolidation, where firms are using mergers and acquisitions to enter new markets and to achieve economies of scale. For a brewer like Modelo, consolidation means that the company becomes smaller relative to the industry's top firms. Modelo has does not compete (at least with Corona) on a cost-leadership strategy, so this trend does not matter much for production economies of scale but it does matter for marketing economies of scale. Corona is also leading a trend of premium beer brands competing in the marketplace. Products such as Stella Artois, Hoegaarden, Heineken and (in international markets) Budweiser are competing with this strategy in this is one of the most important growth markets in the industry.

Modelo's international expansion was made possible through the use of strategic partnerships with distributors. These partnerships allowed Modelo to penetrate internationally markets quickly, with little initial investment. These distributors were able to get the product shelf space quickly, and are able to understand how best to position Corona in the foreign market. Thus, Corona benefited from the established routes to market and distribution infrastructure, in addition to local market expertise. This allowed the company to focus on two aspects of their business that they considered to be essential -- brewing and marketing.

In the critical U.S. market, Modelo's strategy for Corona was to use two different distributors, and split the country evenly between them. This forced each of the distributors to pay more attention to the brand, lest they lose it. Additionally, Modelo was able to leverage the knowledge base and innovation of both distributors.

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This delivered to Modelo greater market penetration, greater marketing innovation and more distributor support than it would have enjoyed if the company had selected a single distributor for the entire American market.

3. According to the Corona website, the brand is already sold in over 150 countries. When one considers the Muslim countries where alcohol is not available (such as Brunei or Saudi Arabia), this leaves very few untapped markets, none of which are particularly enticing. One country where Corona cannot be found -- according to the Corona website -- is Mongolia. The Mongolian market is small -- 3 million -- but the country is growing in wealth. The market is easy to enter, as the population and money in the country is concentrated in the capital of Ulanbaatar.

The market entry strategy for Mongolia should be the same as it would be for most other nations. Corona needs to find a local distributor to help market the brand. There is a national brewing group that lacks a premium brand, and there are also a number of small distributors. There are few barriers to entry, so once a distributor is chosen market entry can occur quickly. Shipping is easy -- once offloaded in China the beer can be shipped by truck up to UB.

The promotional campaign should be much the same as it would be anywhere else. The initial target customer group would be ex-pats, of which there are a few given the importance of the mining industry to the Mongolian economy.….....

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"Corona There Are A Number Of Trends" (2011, November 12) Retrieved May 6, 2024, from
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"Corona There Are A Number Of Trends", 12 November 2011, Accessed.6 May. 2024,
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