Expansion of Molson Coors Molson Canadian Premium - Research Paper Example

Expansion of Molson Coors’ Molson Canadian Premium Molson Canadian is a premium lager beer brand manufactured by Molson Coors, a subsidiary company belonging to Molson Coors Brewing Company. Molson Coors has recently experienced a decline in its worldwide sales and it has seen a need to outline a strategy for expansion of their markets. The decline has seen them drop their volume sales to percentages of up to 62% between 2007 and the year 2009. This is despite an increase in sales of a competitor. It clearly outlined how Molson Coors had lost it in matters concerning marketing and other strategies relating its sales. One of the major brands that Molson Coors has in mind to promote is the Molson Canadian, one of the three beer brands that it owns. Molson Canadian is a premium lager. One of the possible reasons as to why it is the product of choice to be targeted for expansion is its increasing popularity among beer brands worldwide. It is already a hit in its native country of production, Canada, and the company has major plans for it. The plans fostered research in the four countries considered of being potential markets on the international scene and this paper shall rank the countries in order of their potentiality and give the criteria and other details that would have determined the outcome of the results of ranking. Ranking The ranking of the countries in the order of the best market to the worst is: 1. China 2. Mexico 3. Czech 4. France China There are several reasons as to why China is the best potential market for expansion of Molson Canadian premium lager. One is the popularity gain of premium drinks among the Chinese population (6% in 2010) and its promising steady progress. They distinctively prefer drinks that have quality and have some status. Premium lager drinks fit perfectly in this description. A preference is skewed towards imported premium lager brands given the inclination of the Chinese to the Western countries culture. This is in fact a perfect opportunity for the Molson Canadian premium lager, given its origin and perfection. The Chinese market has a promising future market, both in the present and in the future. This is given its younger generation’s capability to spend more on luxury goods. The young Chinese thus hold the future market for the Molson Canadian beer brand. Mexico Mexico could have been the best option if at all it had a little glimmer in its economy growth, which is its main letdown while considering the best country for Molson Canadian Premium Lager. This in fact was the main reason as to why they had a drop of 2% of beer volumes sold in 2010. The poor economy is a threat in that the population might prioritize other basic needs due to the rising prices of beer and the overall increased inflation that read 4.4% in 2010 up from 3.6% in 2009. Generally, Mexico has a very conducive market for premium beer with the consideration that a large percentage (94%) is committed to beer among all alcoholic drinks. The age group of the consumer base is also perfect; in the range of 20 – 29 years which is also the future market of the brand. Statistics also show that beer would eventually replace soft drinks for men given the trend it had taken. Of the 3% lager imports that are consumed, 90% comprises of premium lager. This leaves no doubt that Mexico is the second best option for Molson Canadian premium beer expansion plan. Czech Anyone who didn’t have the statistics would have no doubt chosen Czech as the perfect country for this investment plan. This would have been utterly wrong because despite Czech ranking among the top five in beer consumption, most of the supported brands are local brands. This is despite the imports that it gets from Slovakia and Poland. Its recent economic shakedown and the wellness and health sensitization are also designed to increase awareness and thus a high chance of reducing its market. France Among the three choices made, France is the worst for the investments given the statistics in the research. It has experienced a steady decline in beer volume sales. There are numerous reasons as to why this is happening: Change of alcohol interest to specific purposes of socializing, gifts and special occasions New laws inhibiting the young population from drinking that include high fines Banning of drinking places such as the Open bars that are claimed to promote bad drinking habits (overdrinking) There is no definite hope of a growing market of beer despite a promise that its market is growing and a possibly low inflation rate of 1.7% in 2010. The above obstacles plus a drop in the GDP (USD. 2,657 in 2009 to 2,582 in 2010) just emphasize this point. There is generally a bleak future of beer market in France and therefore the riskiest country to invest in any expansion of Molson Canadian premium lager among the four given countries. Criteria The criteria used in determining the best market for this investment and sorting it from the rest were: i. The change in sales of beer volumes ii. The preference that premium lager had over other alcoholic drinks iii. Population for current and future markets iv. The preference between local and imported brands and v. The economy, based on inflation and the Gross Domestic Product (GDP) Conclusion Having several good analysis of a potential market for any investment is one of the core practices that any given organization must take. The exclusion of this prior to any investment can result in losses that could shake the financial foundation of a company. Molson Coors’ objective was to study the best market among the three countries: Czech, France, China and Mexico, compare its economies, beer consumption rates, and other general parameters in order to decide on the best possible market destination. With the ranking, there is no doubt that the company has the key to Molson Canadian premium lager beer expansion: this would however have to come with one sacrifice; shedding the stereotype in its second name, ‘Canadian’, and obtaining a more universal name for the product. Read More