Harvard Case - Corona Beer: Ambiguous Brand Association during the Coronavirus Pandemic
"Corona Beer: Ambiguous Brand Association during the Coronavirus Pandemic" Harvard business case study is written by Arpita Agnihotri, Saurabh Bhattacharya. It deals with the challenges in the field of Marketing. The case study is 11 page(s) long and it was first published on : Jul 22, 2020
At Fern Fort University, we recommend Corona Beer implement a multi-pronged strategy to address the negative brand association with the Coronavirus pandemic. This strategy involves a combination of immediate damage control, long-term brand rebuilding, and strategic pivoting to capitalize on emerging opportunities.
2. Background
Corona Beer, a global brand owned by Constellation Brands, faced a significant challenge in 2020 when the COVID-19 pandemic emerged. The brand's name, closely linked to the virus, triggered negative associations in the minds of consumers, leading to a decline in sales. The case study explores the impact of this association on Corona's brand image and examines the company's response to the crisis.
The main protagonists of the case study are the Corona Beer leadership team, who are tasked with navigating this unprecedented crisis and developing a strategy to mitigate the negative impact on the brand.
3. Analysis of the Case Study
To analyze the situation, we can employ several frameworks:
a) SWOT Analysis:
- Strengths: Strong brand recognition, established distribution network, loyal customer base, positive brand associations in pre-pandemic era.
- Weaknesses: Negative association with the Coronavirus, potential for long-term damage to brand image.
- Opportunities: Leverage the pandemic's impact on health and wellness trends, explore new product lines and marketing channels, enhance digital marketing efforts.
- Threats: Continued negative media coverage, competitor actions, potential for long-term decline in sales.
b) PESTEL Analysis:
- Political: Government regulations on alcohol consumption, potential for travel restrictions impacting international sales.
- Economic: Global economic downturn, potential for consumer spending cuts impacting beer sales.
- Social: Increased health consciousness, potential for shifting consumer preferences towards healthier beverages.
- Technological: Opportunities for digital marketing and e-commerce, potential for new brewing technologies.
- Environmental: Growing consumer concern for sustainability, potential for pressure to adopt eco-friendly practices.
- Legal: Regulations on alcohol advertising and marketing, potential for lawsuits related to brand association with the virus.
c) Consumer Behavior Analysis:
- Fear of Association: Consumers may avoid Corona due to the perceived association with the virus.
- Health Consciousness: The pandemic may have increased consumer focus on health and wellness, potentially impacting beer consumption.
- Social Media Impact: Negative sentiment on social media can amplify the brand's negative association.
d) Competitive Analysis:
- Competitors: Other beer brands may capitalize on Corona's struggles by promoting their own products as safer alternatives.
- Industry Trends: The pandemic may accelerate trends towards non-alcoholic beverages and healthier options.
4. Recommendations
Corona Beer should implement the following recommendations to address the negative brand association and rebuild its image:
a) Immediate Damage Control:
- Public Relations Campaign: Launch a transparent and empathetic campaign acknowledging the negative association and addressing consumer concerns.
- Social Media Engagement: Actively engage with consumers on social media to address negative comments and promote positive brand messages.
- Media Monitoring: Closely monitor media coverage and respond proactively to any negative narratives.
b) Long-Term Brand Rebuilding:
- Brand Repositioning: Emphasize Corona's existing positive attributes like its beach-themed imagery, refreshing taste, and social connections.
- Product Innovation: Explore new product lines that align with health and wellness trends, such as low-calorie or non-alcoholic options.
- Marketing Partnerships: Collaborate with health-conscious organizations or influencers to promote a positive brand image.
c) Strategic Pivoting:
- Digital Marketing Focus: Invest in digital marketing strategies to reach target audiences directly and control brand messaging.
- E-commerce Expansion: Expand online sales channels to reach consumers who may be hesitant to visit physical stores.
- Global Marketing Strategy: Tailor marketing campaigns to specific regions and cultures, addressing local concerns and preferences.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Leveraging existing brand strengths like refreshing taste and social connections aligns with Corona's core competencies and mission.
- External Customers and Internal Clients: Addressing consumer concerns and rebuilding trust is crucial for customer retention and employee morale.
- Competitors: Staying ahead of competitors by adapting to changing consumer preferences and exploring new product lines is essential.
- Attractiveness: The recommendations are expected to improve brand image, increase sales, and enhance long-term profitability.
Assumptions:
- Consumers are willing to forgive the brand if Corona demonstrates genuine efforts to address the negative association.
- The pandemic's impact on consumer behavior will eventually subside, allowing for a return to pre-pandemic normalcy.
6. Conclusion
Corona Beer faces a significant challenge in overcoming the negative brand association with the Coronavirus. However, by implementing a comprehensive strategy that combines immediate damage control, long-term brand rebuilding, and strategic pivoting, the brand can mitigate the negative impact and emerge stronger.
7. Discussion
Alternatives:
- Ignoring the issue: This would likely lead to further decline in sales and damage to brand reputation.
- Focusing solely on damage control: This approach may not be sufficient to rebuild trust and attract new customers.
Risks:
- Negative media coverage: Despite efforts to address the issue, negative media coverage could continue to impact the brand.
- Consumer skepticism: Consumers may remain skeptical of the brand, even after efforts to rebuild trust.
Key Assumptions:
- Consumers are willing to forgive the brand if Corona demonstrates genuine efforts to address the negative association.
- The pandemic's impact on consumer behavior will eventually subside, allowing for a return to pre-pandemic normalcy.
8. Next Steps
- Immediate Action: Launch the public relations campaign and social media engagement strategy within the next two weeks.
- Short-Term Focus: Develop and implement the brand repositioning strategy within the next three months.
- Long-Term Strategy: Explore product innovation and marketing partnerships within the next six months.
- Continuous Monitoring: Regularly monitor brand perception, media coverage, and consumer sentiment to adjust the strategy as needed.
By taking these steps, Corona Beer can effectively address the negative brand association and emerge from the pandemic as a stronger and more resilient brand.
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Case Description
In early 2020, during the COVID-19 coronavirus pandemic, Google Trends data revealed a surge in the use of the search terms "Corona beer virus" and "beer virus" by users of the Google search engine. A survey conducted around that time also seemed to suggest that consumers were less likely to buy Corona beer, which led various major media outlets to misrepresent the accuracy of the findings regarding consumer beliefs about the association between Corona beer and coronavirus. However, the chief executive officer of Constellation Brands Inc., the Corona brand's distributor, was confident about the brand's performance and did not change the company's plans for a US spring 2020 launch of Corona hard seltzer. Consumers criticized both the poor timing of the planned launch, during the coronavirus pandemic, and various promotions for Corona beer that were considered inappropriate. Constellation Brands Inc. had to consider the effect, if any, on Corona beer sales in the United States. Should the launch of Corona hard seltzer go on as planned during the coronavirus pandemic? How should the company respond to misleading survey reports by some media outlets? Should bar owners in the United States be cautioned against launching promotional campaigns that link the Corona beer brand with the coronavirus?
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