Market Audit and Competitive Market Analysis - Case Study Example

10th May 2016

A. Evaluating beer Corona as an innovation as it is perceived by Brazil market

1. Relative advantage

Relative advantage refers to the extent to which a particular customer identifies certain attributes of a new brand to be better than a similar product in the market (Victor, 2015). Even though the consumers see the new product as being better, it does not imply that the product is actually better but it is based on the consumers’ perception. There is a close relationship between relative advantage and the rate of product adoption. For instance, the more the customer perceives a certain product as better, the higher the rate of adoption. To make a product acquire a relative advantage and attain a competitive edge, manufacturers can improve their interface as a way of making them user friendly. Other strategies of product improvement include reducing user effort, reducing environmental impact and saving of space and storage. As a new brand in Brazil market, Corona brand will meet the customer needs. The brand is a premium beer, classic, recognized in the global market due to its high quality and refreshing taste. The major ingredients include barley malt, hops, ascorbic acid, antioxidants and rice or corn.

In order to make Corona enjoy strong customer acceptance, the brand will be innovative in many ways thus improving its current situation. For example, our product will be sold in cans of 473 ml and 355 ml as well as bottles of 710 ml, 207 ml and 330 ml. In this way, the consumers will have an opportunity to choose the quantity of beer they need, which is a way of empowering them. Corona has an increased longevity as compared to other brands. This means that consumers can purchase it and consume it at a later date an aspect that makes the brand to look better than other brands in the market.

2. Compatibility

Compatibility refers to the way consumers perceive the new brand into their lifestyle choices. For example, when a product is in line with the needs, values, beliefs and consumption patterns of the customers, it is viewed as innovative and compatible with the consumer (Hochbaum, 2011). Corona top quality has made it to be competitive. As noted earlier, the brand is available in varied bottled presentations and it features eight languages for export in European community. The bright colours and quality taste has made Corona to be a favorite brand among the middle aged consumers, who are also major fans of football and athletics. With the upcoming 2016 Summer Olympics in Brazil, the demand for our innovative brand is expected to increase. On its part, CP+B Brazil, the authorized distributor of Corona in Brazil will ensure continuous distribution to all outlets within the 16 days the Rio 2016 will be taking place. Even though a Corona substitute might have almost equal flavor to the real Corona, consumers who are loyal to Corona are unlikely to purchase the competing brands. This is based on the fact that in the minds of our consumers, the real Corona is the only Corona and any other brand is considered as worthless. Thus, Corona substitutes will be considered as incompatible with loyal Corona consumers.

The improved compatibility of Corona was based on the understanding by the design team about the infrastructure they were designing for as well as the being aware of the conditions that the brand will meet in the market.

3. Complexity

Complexity refers to the extent to which a brand is difficult to be used. A product with a high level of complexity has a lower level of adoption. With the advanced technologies, consumers are facing difficulties in using most of the modern innovations (McGrath, 2001). Corona is made in such a way that it is easy to use since all the necessary information is included during packaging. It is worth to note that potential adopters do not usually allocate much time for learning how to use innovation making the adoption process to be lower. During the production process, designing teams should consider the simplicity of the brands and scrutinize all the details of a product in order to ensure its alignment with the needs of the consumers (David, 1988). To address the complexity and avoid consumer resistance, manufacturers should conduct a usability test, with the aim of identifying the iterations in the design of a product. Even though Corona is produced by advanced machines, basic use among the consumers is good.

4. Trialability

In case a new product can be tried for a shorter time before money is invested in it, the rate of adoption will rise significantly. As a way of ensuring that Corona becomes successful in Brazilian market, a trialability test in new outlets will be conducted within the next the next few months. The test will play an important role of reducing the consumer’s perceived risk of using the product. By allowing the consumers especially those in new beers selling outlets to try the brand by giving them free samples, we will show our customers that we have strong confident in Corona brand (Schultz, Tannenbaum, Lauterborn, 1993). As a product that is to be consumed, CP+B Brazil will be given free samples from the beer manufacturer located in Brasilia. The first 100 customers will be given the samples to taste and through word of mouth marketing, consumers will inform other potential customers within Brazil about the benefits of the brand and its high quality (Johansson, 2011). As a result, Corona sales are expected to increase during and after the Olympics. To ensure the product meet the requirements of the customers, consumers who will be involved in trying the brand will be given an opportunity to provide feedback on how to make improvements on the brand. The marketing research team will on its part undertake the trying process and gather vital information that will be used in future to enhance the quality of our brand.

5. Observability

Observability refers to the extent to which a potential consumer can observe the brand and identify its positive implications. The more the positive impacts are noted, the more the observable results are to the customers. Through observation, potential adopters can also know about the benefits of an innovation. One of the ways that Corona will adopt to highlight the benefits will be through side-by-side comparison. This method is effective when a brand has easily noticed improvements over what the consumers are currently using. The second method that Corona will emulate is before and after way. This involves showing the potential adopters the positive impacts the innovation will have on their lives. The brand will also be served as a beer cocktail thus providing customers with an experience that will leave them fully satisfied. The testimonial of current consumers will play a key role. As a brand that enjoys high demand by young tech savvy consumers, the online testimonies and word of mouth marketing from the consumers will be used as a marketing strategy by the company.

B. Major problems and resistances to product acceptance based on the preceding evaluation

During the introduction of Corona in Brazil, consumers are able to make a comparison between the new product and existing beer brands. For example, as discussed in the preceding section touching on relative advantage, consumers seek to identify attributes of the brand that makes it better as compared to other products (Weitz and Robin, 2002). On their part, the consumers can offer resistance to the innovation due to perceived risk or other personal factors. As the result of complexity of the new products that emulate modern technology, adopters may hesitate to use the product. Innovation resistance refers to consumer’s reaction towards an innovation possibly as the result of conflict with their belief structure or potential changes. A good example of innovation resistance is resistance due to changes occurring from innovation. The resistance to change as stipulated by Kamran and Kim (2009) refers to natural response of human being to any change that disturbs the balance of living environment or an organization’s actions.

In the adoption of technological innovation, innovation resistance is one of the essential factors marketers must consider. The adoption of a product for example Corona will only occur after overcoming resistance among the customers. The cause of product resistance can be traced from adoption barriers that consumers can experience as they try to use new brands (Farris et al, 2010). These include usage, value, image, traditional and risk barriers. Usage barriers occur when an innovation or a brand does not match with the consumer’s prevailing workflow or behaviors. For example, during its testing stage, Corona, which has quite a number of ingredients, may not be accepted by some consumers on a health ground. In turn, the brand may experience poor awareness among the consumers in Brazil market thus reducing its sales (Shimizu, 1989). The value barrier on the other hand, is based on economic value of a product based on the argument that it does not offer strong performance-to-price compared to competing brands. Risk barrier, refers to the degree of potential risks that a product can bring to the consumers (Kotler and Kevin, 2009). For instance, in the case of Corona, consumers might resist purchasing and using its due to the risks associated with excess alcohol consumption such as increased level of blood sugar, accidents and other forms antisocial behaviors. Traditional barriers entail the changes a product may cause in day to day usage. Additionally, it refers to the customers’ preference for existing and familiar brands over new products (Kamran and Kim, 2009).

Consumers’ resistance also plays a major in the success of new brand in the market in addition to other marketing strategies that companies may adopt in the market. This is based on the fact that it can cause delays of the consumer adoption or inhibit it altogether (McCarthy, 1964). Notable aspect of resistance for example due to lack of product compatibility to the requirements of the consumers is that it makes consumers to respond in three ways that include rejection, postponement and opposition. Postponement takes place when consumers adjourn the adoption of a product. This implies that the consumer pushes the adoption into a future date. Even though the innovation may be acceptable to the consumers, situational factors for instance waiting for the right time and ensuring the product works effectively affects the acceptance (Shimizu, 2003). Opposition entail protesting a product or an innovation and looking for more information after the trial stage. Even though it is a form of rejection, the consumer has willingness to check or test an innovation before making final decision to reject it.

Some of the notable causes that can make Corona to be rejected by consumers in Brazilian market include situational factors, consumers’ cognitive style as well as habit resistance. The additional information that consumers seek from other sources and which relates to the new product is essential since it can lead to acceptance (Richard and Kyu-Hyun, 1999). On the other hand, once the consumers understand that the innovation is not suitable to them or the advertisement strategies adopted during trial stage were deceiving, they could reject such innovation. Direct rejection is also possible for new brands. On their part, manufacturers can modify their products in case of mass consumer resistance and then re-introduce the brand (Luhnow and Kesmodel, 2008). One of the major causes of rejection is the failure by innovation to offer valuable advantage or it exposes consumers to more risks. Notably, there are two types of rejection. Passive rejection takes place when a product is never actually implemented or adopted while active rejection occurs after a product is first considered and later rejected.

Consumers’ resistance is affected by two major factors which include innovation characteristics and consumers’ characteristics. Innovation characteristics are related to impacts of new products on customers which in turn define the level of resistance generated. In addition, through innovation characteristics, firms are able to predict the expected resistance and consumer adoption. According to consumer resistance researchers, there exist a relationship between the attributes of an innovation and the implementation of such innovation. Consumer characteristics on the other hand, refers psychological aspects of consumers for example their view about innovativeness in relation to a product. Some of the major issues correlated with consumer behavior and related to innovations include value orientation, personality, recent innovative experience, consumer attitudes, motivation and perception.