Corona Case Study

4. Determine the most promising states for Corona to allocate additional promotional resources, including but not limited to the BDI/CDI computations performed above. Consider any other data in the case that would affect your assessment of market attractiveness.

Corona has demonstrated competency with penetrating the U.S. market, however multiple regions and states still offer plenty of growth opportunity. Of the regions that are a best fit for Corona to develop its brand, the Middle Atlantic is best. The Mid-Atlantic region offers a market where the category is outperforming the brand, according to the BDI/CDI ratios. By increasing brand recognition in this region, Corona can also improve distribution and catch up to the growth of the import beers market. Despite the 3% of Mid-Atlantic market share Corona lost between the years of 1980 and 1996, import beers continue to grow in popularity. With focus in this market, Corona can use its Hispanic heritage to attract a strong foundation of buyers and increase market share.

8. Considering all the data in the case, what amount do you recommend that Corona spend in 1997 if it desires to become the #1 import brand by the end of the year?  Justify your recommendation. 

In 1996, Heineken was the number one import beer with a total 37.2 Million shipped cases, or 22.31% market share. Corona trailed in market share by 4.98%. If Corona has its eyes set on increasing market share to take lead the import beer market, the brand must considerably increase its Share of Voice(SOV). Currently Corona underspends on its advertising budget by approximately 10% when considering its market share to advertising spend. With Corona growing at an average 3.67% annually, they will need to improve its advertising by 7.47% if they wish to match Heineken’s size and become the largest import brand by the end of the year. Based on the total spend by import beers in 1996 Corona would have to spend an extra $4.76 Million to total $9.5 Million. While additional spend won’t ensure success, if Corona were to match its market share to its SOV, it would likely spend an additional $9.51 Million to total $14.21 Million in advertising spend.

Corona is able to underspend for the amount of market share it enjoys due to loyalists as a result of brand recognition and strong regional distribution. If it intends to further increase its market share, it must spend closer to the $14.21 million to balance the SOV and market share.