Analysis: How to Wreck a Brand

News that Constellation Brands has slashed the price of Corona 12-pack cans by about $2 a case is a strategic mistake.

Part of the allure of Corona has been its above-premium positioning.  Once a product becomes subject to price cuts, it loses part of its exclusive appeal.  (We grant you that “exclusive” is a weird term for such a super-successful brand.)

We’ve seen this before.  With Budweiser, for instance.

Part of the objective is to get more Corona volume into cans, rather than bottles.  But a bigger objective may be to prop up volume.  Corona Extra is down 0.4% in sales volume and Corona Light is down 14.6%.

The Corona brand franchise closed out 2018 up 7.5% in volume and so far this year is up 1.6%, thanks to Corona Premier and Corona Familiar.  We suspect Premier and Familiar have cannibalized a bit of the older brands’ volume.

Nonetheless, discounting is almost always a bad idea for a successful brand image, a lesson a number of brewers have learned to their sorrow.

Corona’s discounting was first reported by Beer Marketers Insights.

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