Gallo Courts Hispanic Market with a Punch
In 2023, Gallo saw an opportunity to grow its product lines by being first in the industry to specifically target the U.S. Mexican and Mexican-American market with a canned cocktail. The premixed alcohol beverage market was growing fast, and Gallo held the lead with 43%. Through a partnership with world champion Mexican boxer Saúl “Canelo” Álvarez, Gallo brought the Mexican canned cocktail VMC to the United States. VMC harnessed its cultural roots though branding which displayed images reminiscent of Mexico as well as the use of the Spanish language. Additionally, Canelo, who was considered a national hero in Mexico, was the main spokesperson for VMC. Given that Hispanics of Mexican origin make up 60% of the Hispanic population in the U.S., this was an attractive segment with much potential for profitability. Would VMC’s strong ties to Mexico and Gallo’s strength in the premixed alcohol beverage market be enough to capture the attention of the largest Hispanic market segment in the U.S.?
In completing this assignment, students should be able to:
1. Identify the segmentation bases used in an ethic segmentation strategy and assess their value. Evaluate the use of demographic segmentation as a primary marketing strategy.
2. Identify the stage of the product life cycle for a product. Apply Everett Roger’s five innovation attributes to assess the adoption of a new product.
3. Assess how a cultural branding strategy creates value for the target market.
4. Evaluate the value of an ethnic marketing strategy.