Corona Beer

1. What should Corona do to become the #1 imported beer brand in the U.S. market? Is this a realistic goal given Heineken's commanding heritage and historical presence in this market?

It is a realistic goal for Corona to become No.1 imported beer brand in the US. The challenges include long-standing Heineken and strong competition from other established brands with substantially more resources, in both the light and imported beer categories.

What should Corona do:-

• To overcome negative perceptions of the brand’s Mexican roots, as compared with more traditional European imported beers.

• Distribution - Focus on distribution efficiency - a competitive edge for quality taste of beer

• Advertisement & promotion - Create a unique brand value and break away from the stereotypical advertising for beer industry, point-of-sale promotion and off-premise store to drive volume

2. How did Corona establish its position in the U.S. market? How much of its success in Mexico was generalizable to the U.S.?

How Corona establish position in US

• Corona success would come from adopting this distinctive perspective on life rather than following the crowd – via distinctive set of values and a unique brand personality.

• The starting point began with consumer insights and perceptions. Corona uncovered a set of values important to its consumers and found a way to communicate those values.

• Consumers associated Corona with positive brand cues such as the beach, vacations, hanging out with friends – all cues that fall under the overarching umbrella of escape and relaxation.

• Corona represented a change in attitude: a more laid-back, tropical approach to life that its core consumers thrived on

• Corona’s television advertising was a fresh break away from the stereotypical advertising that the beer industry had been so famous for. (Look at Exhibit 8)

• The ads were quiet, relaxing, simple, and often without any dialogue among principal actors. The beach, the beautiful tropical surroundings, and the Corona brand were the heroes of this unique advertising.

How Mexico success can be generalized

• Consistency - Corona sold in authentic Mexican form: brewed in Mexico and exported with minimal changes to the packaging

• Appeal to the product’s “drinkability & fun” rather than to the “sophistication” represented by other importer

• Focus on off-premise sale (grocery, convenient store and bottle stores) which drive the sales volume

• Freshness of Corona beer was a competitive attribute, Modelo’s innovative brewing process eliminated the oxidation process which normally could be caused by clear glass bottle.

3. How has Corona managed to sustain growth despite serious threats to its brand image in the late 1980s and early 1990s?

Corona able to sustain growth through consistent and reliable pricing, consistent advertising message, excellent sales fieldwork, good point-of-sale promotions and fresh product:-

• In late 80s, rumors include Corona being contaminated with urine (spread by Miller and Heineken wholesaler), high calories of 400-500 per bottle, and cancer causing have caused Corona sales to drop as much as 30%

• Corona sustained growth by emphasizing on in-store and on-premise promotion & and these point-of-sale programs has slowly helped re-position the brand and re-establish the quality image.

• In 1991, US government doubled federal excise tax, and Modelo did not pass