Group Work

1. INTERNATIONAL MARKETING (MKT 3100)
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 largest beer 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, earn over 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.

6. Industry Analysis

7. Supply Chain Process

8. US BEER MARKET
Source: Beer Brewer Industry Analysis, Matt Ford, April 16th 2008

9. Source: Beer Brewer Industry 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 Beers in 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.).

16. Financial
Statements

17. (Bloomberg Businessweek.com, n.d)

18. Anheuser-Busch InBev
Annual Report 2009, p.64

19. Anheuser-Busch InBev
Annual Report 2009, 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

33. SWOT
ANALYSIS

34. Strengths
• Mexico’s Largest Beer 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% market share in Mexico 2007 (case
study)
• Brilliant and unique marketing campaign
• Distributors in US well established

36. • Strong brand image
• 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 of partners 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 InBev significant interest in
the company
• Countries like Germany fond of beer
• China largest beer market after 2003
• Distributors absorb taxes – cost leadership

39. • Main revenue comes 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 is Corona’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 of mergers 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

42. 7P’s

43. Product
• The product has 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 pricing strategy in the US to position as an Imported beer
• Advantage over competitors like Heineken as distributors absorb taxes

45. Place
• To reach customers 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 advertising theme 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 company has 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 beer in 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)

52. •Light
•Regular
•Premium
•Imports
•Domestic Specialties

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
• Brilliant and 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
• Sugar free 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’s position 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.

59. Perpetual Map

60. Recommendations
• Increase Marketing budget 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.