Dos Equis Lager Especial

Fact Book
Columbia College Chicago 3 May 2012

John Froman, Simona Giulio, Emily Taus

Dos Equis Lager Especial

Table of Contents
Category Overview
Category Denition: Beer/Imports Category Size/Growth/Consumption Category Regionality Category Distribution Category Seasonality Category Pricing Category Consumer Prole Trends (PEST & External/ Internal Forces)

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Key Competitors (2)

1) Modelo Especial
Competitive Size/ Growth Competitive Regionality Competitive Seasonality Competitive Distribution Competitive Pricing Competitive Consumer Prole The key demographics for Modelo Especial consumers are (by index): Competitive IMC

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2) Corona Extra
Competitive Size/ Growth Competitive Regionality Competitive Pricing Competitive Consumer Prole The key demographics for Corona Extra consumers are (by index): Competitive IMC

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Our Brand
Dos Equis
Brand Size/ Growth Brand Regionality Brand Seasonality

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Strategic Thinking & Initiatives

SWOT Brand Mission Market Segmentation Perceptual Map Positioning Key Objectives

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Strategies
1) 2) 3)

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Category Overview
Category Denition: Beer/Imports The largest alcohol segment nationwide is beer, reporting for nearly 85% while generating over $91.6 billion annually in retail sales. The most popular beer segments are as followed; light, imports, domestic specialties and premium. Light beers have become an unstoppable trend, consumers enjoy the smooth, mild taste with lower calories. Imported beer gives the US a variety of international taste and traditions. The water, barley malt and brewing techniques of each region is what makes imported beers unique and different from domestic beers. Domestic specialties segment is becoming more popular due to brewpubs popularity increasing in American trends. Premium beers is just that a high quality of beer. Consumers are becoming yuppied, and trading up for better products. Source: The Beer Fathers & Beer-Brewing Category Size/Growth/Consumption Accounts for 85% of alcohol consumed in the US Annual sales of $91.6 billion Over 11.4 billion barrels sold in US Market share of imported beers in the US is 14% Imported beer increased .4% in 2011 Domestic beer decreased 1.9% in 2011 80% of consumption is male-dominated, However, light beer tends to be female dominated. In 2008 beer ranked 4th in per capita consumption behind soft drinks, bottle water and coffee.

Source: The Beer Fathers, Beer-Brewing, Brewing Association Top 10 Domestic Beers 1. Bud Light (28.5% market share) 2. Budweiser (11.45 market share) 3. Coors Light (10.2% market share) 4. Miller Lite (9.1% market share) 5. Natural Light (6.0% market share) 6. Busch Light (4.0% market share) 7. Busch (3.6% market share) Fact Book 1

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8. Miller High Life (2.7% market share) 9. Keystone Light (2.6% market share) 10. Natural Ice (1.9% market share) Top 10 Imported Beers 1. 2. 3. 4. 5. 6. 7. 8. 9. Corona Extra Heineken Modelo Especial Corona Light Tecate Labatt Blue Labatt Blue Light Dos Equis XX Lager Especial* Stella Artois Lager

10. Heineken Premium Light Lager * has been ranked 8th for the last 3 years. Source: The Beer Fathers Category Regionality

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Category Distribution The Industry is organized by the three-tier distribution system. 1. 2. 3. Brewers and Importers Wholesalers Retailers

Penetration rate is 25.2% per 100 HHs Source: The Beer Fathers & Spectra Category Seasonality Seasonality of Domestic Beers The United States Department of Commerce reports a decrease of 1.9% in 2011. Figures are in millions of barrels (31 gallons per barrel)

Seasonality of Imported Beers The United States Department of Commerce reports an increase of .4% in 2011. Figures are in millions of barrels (31 gallons per barrel)

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Category Pricing Brand Corona Extra Heineken Modelo Especial Corona Light Tecate Labatt Blue Labatt Blue Light Dos Equis XX Lager Especial Stella Artois Lager Heineken Premium Light Lager Category Consumer Prole The key demographics for the category consumers are (by index): Hispanic (120) Between the ages of 45 and 64 (134) Have 2 people living in the household (128) with no kids living at home (108) Have had some high school (131) or have graduated high school (126) Price $15.49 $13.99 $15.59 $15.49 $10.99 $11.99 $11.99 $10.99 $15.39 $13.99

Source: MRI+ & Spectra Fact Book 4

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Trends (PEST & External/ Internal Forces)

Political - Prohibited alcohol retail sales on Sunday (Blue Law effective in certain states) - Age restrictions 21+ to purchase - Relationship with exporting country

Economic - Domestic beers are less expensive - Tax for importing beer increases price for imported beers - US recession / ination

Social - Trends between domestic and imports - Consumers prefer light beers (less calories) - Life style changes (consumers drink choices change as they transition from student to working professional)

Technological - Social media contributing to sale increase (The Most Interesting Man in the World.)

Factors Affecting Beer Sales The U.S. beer industry has encountered a number of challenging economic as well as powerful demographic and cultural trends that have hurt sales and will likely continue for years to come.

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Key Competitors (2)

1) Modelo Especial
Competitive Size/ Growth .5% penetration with with an index of 163. This is in the high index/high penetration quadrant. Has steadily been gaining penetration in the last few years. Number 3 imported beer in the US, selling more than 30MM cases annually. From 1999-2008, Modelo Especial compounded annual growth rate has achieved a 19.2% increase, which ranks second in the total US beer market. *Crownimports.com, April 2012 Competitive Regionality Variables and Measures Demographic Variables Housing Tenure Own Rent Spectra LifeStyle Urban High Society Suburban Aristocrats Prosperous Suburbs Elite Country Manors Afuent Suburbs Afuent Minipolitan Sprawl Afuent Country Living Cosmopolitan Urban Mix Cosmopolitan Suburbs Midscale Suburban Mix Midscale Minipolitan Midscale Fringe Towns Midscale Working Towns Striving Urban Melting Pot Striving Suburban Mix Striving Small City Living Moderate Blue-Collar Towns Moderate Country Living Struggling Urban Mix Struggling Small City Mix Struggling Minipolitan Struggling Country Living Struggling Rural Mix Struggling Backroad Living % Volume 76.0% 24.0% 3.9% 6.2% 6.8% 3.5% 6.9% 7.4% 3.0% 7.1% 6.2% 5.4% 2.0% 2.8% 4.0% 6.9% 2.6% 2.2% 5.1% 3.3% 3.6% 2.8% 2.7% 1.9% 1.3% 2.8% Index 114 72 121 174 154 93 155 139 92 141 118 144 62 66 66 126 71 67 91 79 93 92 59 46 45 67 Mountain 16.5% Vol, 232 index

Pacic 41.8% Vol, 278 index West South Central 19.1% Vol, 169 index Dos Equis top 3 areas are the Pacic (as is Modelos), E. North Central, and the S. Atlantic. These are areas that Dos Equis owns, yet there is opportunity for expansion into the 2 other Modelo markets.

Taken from Spectra, April 2012 Fact Book 6

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Competitive Seasonality

Competitive Distribution Top 10 Stores: From Spectra, April 2012 Account Name 1 2 3 4 5 6 7 8 9 10 Save Mart/Dist Ctr / Vacaville CA : 35 Stores Trepco West / San Diego CA : 1 Stores Campbell Wholesale Co / Tulsa OK : 1 Stores Whole Foods Market/Dist Ctr / Vernon CA : 21 Stores Mountain Peoples/Dist Ctr / Auburn WA : 31 Stores United Natural Foods/Dist Ctr / Rocklin CA : 101 Stores Tesco USA/Dist Ctr / March ARB CA : 190 Stores Core Mark/Dist Ctr / Sacramento CA : 5 Stores Trader Joes Co / Monrovia CA : 233 Stores Safeway Inc/Dist Ctr / Tracy CA : 270 Stores HHs Index 542 311 290 283 244 241 227 226 222 216

Competitive Pricing Modelo Especial is priced at an average of $15.59 for a 12 pack. This is more expensive than Dos Equis. Taken from Spectra, Spring 2012. Competitive Consumer Prole The key demographics for Modelo Especial consumers are (by index): Hispanic (418) HHI of $30,000-$39,000 (192) Between the ages of 18 and 34 (182) Have 4-5 people living in the household (181) with children between the ages of 6-17 (250) Have had some grade school (198) or have completed some high school (198) Are part of the cosmopolitan urban mix (202) or the cosmopolitan suburbs (158), living in the Pacic (278) or Mountain areas (232), and some live in the West South Central (169)

Competitive IMC

Advertising:

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Modelo just started a new national multimedia campaign entitled, Descubre lo Especial (discover whats special). This campaign was created specically for Hispanics in the US. Social Media:

Discover the Especial facebook page. Very active page with interaction with consumers. A majority of their content is written originally in spanish, then translated into english after. They are keeping with their hispanic roots well. Competition: They asked their consumers where they were enjoying their Modelos. This was a response.

Currently, Modelo sticks to the traditional forms of advertising and has not ventured into many other channels. They are a brand that likes to stick to their heritage, and through their campaigns, they certainly have.

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2) Corona Extra
Competitive Size/ Growth 3.5% penetration with with an index of 156. This is in the high index/high penetration quadrant. Corona Extra is the #5 selling beer overall in the US with more than a 29% share of the import market. Average growth rate in the US for the last 10 years has been 8.3%. Although Corona is not growing as fast as Modelo, it has a huge market share. Total $ per 100HHS = $12.38 Competitive Regionality Variables and Measures Demographic Variables Housing Tenure Own Rent Spectra LifeStyle Urban High Society Suburban Aristocrats Prosperous Suburbs Elite Country Manors Afuent Suburbs Afuent Minipolitan Sprawl Afuent Country Living Cosmopolitan Urban Mix Cosmopolitan Suburbs Midscale Suburban Mix Midscale Minipolitan Midscale Fringe Towns Midscale Working Towns Striving Urban Melting Pot Striving Suburban Mix Striving Small City Living Moderate Blue-Collar Towns Moderate Country Living Struggling Urban Mix Struggling Small City Mix Struggling Minipolitan Struggling Country Living Struggling Rural Mix Struggling Backroad Living % Index Volume 75.1% 24.9% 4.3% 5.7% 6.0% 4.5% 7.9% 6.8% 5.5% 6.6% 5.5% 4.4% 2.3% 3.4% 3.6% 6.7% 1.6% 2.0% 5.2% 2.8% 4.2% 3.1% 2.1% 2.6% 1.4% 2.0% 112 75 134 161 136 119 178 128 170 131 104 116 69 81 58 123 46 62 94 67 110 102 46 64 48 48
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Mid Atlantic 11.4% Vol, 72 index

Pacic 31.9% Vol, 212 index South Atlantic 20.3% Vol, 102 index Dos Equis top 3 areas are the Pacic (as is Coronas), E. North Central, and the S. Atlantic (similar to Corona). Corona, however has managed to be popular in the Mid Atlantic, and Dos Equis could easily use this knowledge to gain traction there. Taken from Spectra, April 2012

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information in this paragraph taken from http://www.crownimportsllc.com/ourbrands/coronaextra.htm, April 2012

Spectra, April 2012 9

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Competitive Distribution

Top 10 Stores: Spectra, April 2012 Account Name 1 2 3 4 5 6 7 8 9 10 FRESH & EASY NEIGHBORHOOD M 1098 E Z MARKET SAFEWAY SUPER STORE FOOD MAXX STORE 482 201 6592 686 2645 FRESH & EASY NEIGHBORHOOD M 1116 TRADER JOES MARKET ALBERTSONS STORE RALPHS MARKETPLACE GINS SUPERMARKET HHS Index 219 209 206 205 205 205 204 202 201 201

MANILA ORIENTAL MARKET

Competitive Pricing For a 12 pack, Corona has an average price of $15.49. This is more expensive than the $10.99 price for Dos Equis. Competitive Consumer Prole The key demographics for Corona Extra consumers are (by index): Hispanic (277) HHI of $75,000 or above (170) Between the ages of 35 and 44 (132) Have 3-5 people living in the household (145) with children between the ages of 6-17 (180) Have had some grade school (220) Are part of the afuent suburban spread (170) or the suburban aristocracy(161), living in the Pacic (212).

Competitive IMC

Advertising:

Spectra 10

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Television: Find Your Beach

Print:

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Social Media

Corona was trying to become the most liked, light beer in the US. If you liked it, you could see your face in Time Square and potentially, win a trip to Mexico. Currently, there is no US Corona Extra facebook page.

Sponsorship

Corona is the ofcial sponsor of the Chivas football club.

JWT Madrd had Corona as a sponsor for the ATP World Tour. This was one of their print ads.

Digital

Corona has a Beach Break App. With this, you can partake in activities and receive rewards for doing so. Fact Book 11

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Our Brand
Dos Equis
Parent Company: Heineken: DosEquis, the fast-growing Mexican beer, which Heineken picked up as part of its $7 billion acquisition of Fomento Econmico Mexicano's beer brands (January 11) 2010, is key to plans to revive its fortunes in North America. Core of Success: Effective Marketing Brand Size/ Growth

Dos Equis, the fastest growing Mexican import beer in the United States, and perennial favorite of the Most Interesting Man in the World, is the proud recipient of the Market Watch Beer Brand of The Year Award (Beverage Industry 101.11 [2010]). There are limits to how muchDosEquiscan boost the company's momentum--the Mexican brew represents just 0.6 percent of U.S. beer market volume, vs.the Heineken brand's 2.2 percent in 2011--down from 2.6 percent in 2006, estimates consumer researcher Euromonitor. 21.5%Jump in case sales afterDosEquis's"Most Interesting Man" ads began

DosEquis'sannual growth in November 2011 outpaced Heineken's core brand. (Fletcher, Clementine. ("Heineken's Most Interesting Savior." Bloomberg Businessweek 4261 (2012): 23-24. Business Source Complete. Web. 2 Feb. 2012.) Heineken DosEquisAmbar DosEquisEspecial Brand Regionality The campaign was rst launched in a select number of markets, including Texas and the southwest U.S. in 2007, but it wasnt taken nationwide until March 2009, by which time it had been building buzz. Given the success in the U.S. Dos Equis has expanded to markets in Canada, Norway, Australia, United Kingdom and Germany. 3.9% 18.1% 25.6%

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Brand Seasonality Christmas & Holiday Season: 24-bottle pack combines Dos Equis with Noche Buena, the No. 1 selling winter seasonal in Mexico. Noche Buena is a super-premium, limited-run craft beer that has been around since 1920. The seasonal pack was on sale from November through the beginning of 2011.

Cinco De Mayo: Cinco Ways to Celebrate: Dos Equis and Tecate--Cinco ways to Celebrate campaign for Cinco de Mayo and the spring season. The marketing campaign gives consumers ve themes to incorporate into parties, including creating a dance club, turning a yard into a holiday party, celebrating in disguise (Mysterioso luchador masks) and menu suggestions combining the two drinks with food. Each theme includes playlists, recipes and a checklist. (http://www.csdecisions.com/2010/03/26/dos-equis-and-tecate-offer-cinco-ways-to-celebrate-spring/ March 26, 2010)

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Brand Distribution United States, Mexico, Canada, Norway, Germany, and Australia

Brand Consumer Prole Males 18-34 College Educated No Children Men who desire to lead interesting lives Consider themselves trend leaders and a cut above mainstream frat boys, and want to be seen as interesting.

These consumers have active lifestyles and energetic social lives. They like to collect stories and experiences as part of their social currency. IMC TMIMITW: He is a conquistador He is welltraveled, interesting, and thrives on interesting adventures. Denitely not your average guy, but possesses a life the average man dreams about leading. 360 Marketing: The campaigns integrated marketing and messaging strategy has ensured that all elements of the marketing mix tell a story about the product. Dos Equis has given consumers the stories and images to dene a brand culture. One that people want to engage with and discuss. Brand proposition has been brought to life across different consumer and marketing touch points, including on-premise retail programs, consumer promotional programs, and digital and social media. 2009: The Most Interesting Academy. These on-premise sampling nights, held in cities such as New York, Chicago, Los Angeles and San Diego, were designed to help people experience the brand. They featured barbers giving people interesting haircuts as well as shaping beards and moustaches and two world champion table tennis players who took on all comers and passed on tips. There was even a bug-eating bar where people could sample interesting appetizers. Dos Equis has over 2 million fans on Facebook a number that shadows the amount of consumers that visit the brands website. ROOT OF CAMPAIGN SUCCESS: Focusing on one medium really well- Facebook. All of Dos Equis initiatives online and ofine make it really easy and clear for fans, as everything drives to the Facebook page. When you open up the conversation and give consumers a voice, true engagement, it affects the brand in a clearly forward and positive manner.

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EVENTS/PR: May 2012- Dos Equis sent Cinco de Mayo'Feast of the Brave' taco trucks to six US cities- Austin, Chicago, Dallas, Houston, Los Angeles and Miami. The bold visited Dos Equis-branded food trucks to taste some unique and original tacos and delicacies to celebrate the 150th anniversary of Cinco de mayo. . The Feast of the Brave tab on theDos Equis Facebook shared the local map, schedule for the taco truck stops and menu for each city, an updated leader board of "bravery points" and photos from the events. Fans could also invite friends to dine with them through a customizable invitation. Consumers could also follow the Feast on Twitter with Dos Equis' handle @StayThirsty and hash tag #DosEquisFeast. (http://www.prnewswire.com/news-releases/dos-equis-invites-the-brave-to-feast-on-unique-cinco-de-mayodelicacies-148844895.html)

TOUGH MUDDER PARTNERSHIP: In March of 2011 Dos Equis a two-year sponsorship of the endurance running series, Tough Mudder. The series, which is among the nation's most recognized and most challenging, has 12 events scheduled in the U.S. in 2011 and 2012. With this partnership, Dos Equis becomes the exclusive beer sponsor of Tough Mudder. Dos Equis will also host a VIP area at each event. (http://www.prnewswire.com/news-releases/dos-equisplans-to-get-dirty-with-tough-mudder-partnership-118162629.html)

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Strategic Thinking & Initiatives

SWOT
STRENGTHS: ONE OF THE BEST MARKETING CAMPAIGNS IN THE U.S. BROAD CONSUMER BASE SOCIAL MEDIA INTERACTION: Uses Facebook as a research tool and marketing outlet, allowing for transparent and open dialogue between the brand and consumers. ENDEARING AND CREDIBLE SPOKESPERSON CONGLOMERATE SUPPORT-OPERATIONAL EFFICIENCY EASY TO MAKE- but standards are high WEAKNESSES: DRINKING AGE ISSUE: Most of the people who consume Dos Equis are older; the average consumption age is 18-34. Dos Equis has been trying to create an image which can be accepted by Males, 18-34. COMMODITY PRICES: Supply chain costs and its effects on beer prices inuence consumer price increases OPPORTUNITIES: DEVELOPMENT OF WIDER AUDIENCE AND GEOGRAPHICAL DIVERSITY HARNESSING CONSUMERS THRIST FOR INTELLIGENT HUMOR FUTURE PACKAGING: Lighter glass bottle. The reduction in bottle weight will reduce CO2 emissions THREATS: MARKET SHARE LOSS RETAILERS AGGRESSIVE PRIVATE LABEL/CRAFT BEER MARKETING EFFORTS RECESSIONS SMALLER CRAFT BREWERS EXTERNAL FACTORS: Drunk-driving increases the rate of car accidents, and more laws were established to reduce the incident. This can affect the sales on alcohol products. SUBSTITUTES: The top substitute for beer is other malt beverages which have been growing in popularity. The main group is what is known as "malternatives". These are malt beverages that have been avored to taste similar to wine, fruit, and other drinks. Examples of such beverages are Smirnoff Ice, Mike's Hard Lemonade, Bacardi Lemonade. Other substitutes include pre-mixed drinks and wine coolers. COMPETITION: The rivalry among existing Mexican import competitors is also strong.

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Brand Mission To be known as the beer that is different, unique and interesting. Dos Equis wants to be the beer of choice for those whom do not drink beer often or those who would prefer a unique experience. I dont always drink beer but when I do I prefer Dos Equis. Market Segmentation

Perceptual Map

Positioning Dos Equis positively impacts the role of import beer in society by creating interesting initiatives and superior advertising, empowering their consumers to lead interesting lives. Key Objectives Contribute to an overall increase in Dos Equis market share. Drive trafc to Dos Equis various microsites to promote events, publicity initiatives, and the brand itself.

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Strategies
1)
Focus on media vehicles and promotional events with a high concentration of multicultural Males as a way to reach the broader multicultural market. Continue with non-traditional initiatives, events, and digital tools that allow our target market consumers to engage with the Dos Equis Brand. Tactic: The Most Interesting Adventure in the World: Contestants enter online to win an opportunity to partake in an interesting adventure in an exotic location somewhere in the world. The Most Interesting Adventure would be documented and available online at a Dos Equis microsite where fans would be able to read the Most Interesting Adventurers blog about the experience, views photographs, see maps of the adventure, and provide feedback. The Most Valued Ticket in the World: Consumers would have the opportunity to spend an evening with the MIMITW and travel to one of his many exotic estates. Participants would purchase cases of Dos Equis to try and discover the case containing the winning golden ticket to the Most Interesting Evening of Their Lives. (SIDE NOTE- Think Willy Wonka)

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2)
The 2nd Most Interesting Man in the World Tactic: This competition is all consumer generated content. Beginning with a television ad about The Most Interesting Man in the World, he will then say he needs a buddy that doesnt bore him. He needs The 2nd Most Interesting Man in the World. Consumers (21+) can record videos of why they are the second most interesting man in the world. The 10 nalists will be chosen based on youtube likes ( ). After this, The Most Interesting Man in the World gets to choose his new buddy. The winner of this competition will get to be on one of the ads, and tons of interesting man swag.

3)
A new marketing campaign with The Most Interesting Women in the World. The campaign would consist of The Most Interesting Man in the World & The Most Interesting Women in the World competing verses one another. Theyll state as to why he or she is the most interesting, they wont agree on anything but Dos Equis. In hopes of going viral this campaign will air via social media; facebook, youtube and Dos Equis website. The youtube channel & Dos Equis website will request videos from consumers to join in The Most Interesting Man/Women in the World battle.

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