Pricing Strategy Case Study

A Case Study of
By: Pascua, Juvel C.

2MKM-2
MW 11:30am – 1:00pm
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Don Enrique Maria Barretto de Ycaza y Esteban
In 1889, a well-known Manila businessman, Enrique María Barretto de Ycaza y

Esteban, who was also the original founder of San Miguel; started with a Royal Grant
from Spain, today it is one of the largest breweries in the world.
Company profile and brief history
Established in 1890, La Fabrica de Cerveza de San Miguel, Southeast Asia’s first

brewery produced and bottled what would eventually become one of the bestselling
beers in the region. Within the span of a generation, San Miguel Beer would become an
icon among beer drinkers.
By 1914, San Miguel Beer was being exported from its headquarters in Manila to
Shanghai, Hong Kong and Guam. A pioneer in Asia, San Miguel established a brewery
in Hong Kong in 1948, the first local brewer in the crown colony.
Today, San Miguel Beer–the Company’s flagship product–is one of the largest
selling beers and among the top 10 beer brands in the world. While brewing beer is the
company’s heritage, San Miguel subsequently branched out into the food and
packaging businesses. From the original cerveza that first rolled off the bottling line, San
Miguel Corporation has since expanded its portfolio to produce a wide range of popular
beverage, food and packaging products which have–for over a century–catered to
generations of consumers’ everchanging tastes. It has also diversified into heavy
industries including power and other utilities, mining, energy, tollways and airports.
The Company’s manufacturing operations extend beyond the Philippines to Hong

Kong, China, Indonesia, Vietnam, Thailand and Malaysia. Its products are exported to
major markets around the world. Continuing a tradition of product quality, San Miguel is
capitalizing on its unique strengths in brands and distribution to weave its products more
deeply into the fabric of everyday life. Not just in the Philippines but in the Asia-Pacific
region.
Company perspectives
San Miguel Corporation's commitment to bring quality products to each and

every Filipino home has brought together well-loved brands that make everyday life a
celebration. No other company in Philippine history has developed such a rich and
diverse product portfolio covering the beverage, food and packaging industries as San
Miguel.
Mission
 To provide goods and vital services well within the reach of every Filipino, making
everyday life a celebration.
Vision
 We are San Miguel.
Guided by a strong sense of social, environmental and economic responsibility,

our businesses will lead efforts to deliver on national goals, setting the pace of
progress in the Philippines.
San Miguel Corporation Current Board of Directors
Leo S. Alvez
Eduardo M. Cojuangco, Jr. Ramon S. Ang Joselito D. Campos, Jr.
Aurora T.
Calderon
Jose C. de Venecia, Jr. Menardo R. Jimenez Estelito P. Mendoza
Thomas A. Tan
Alexander J. Poblador Iñigo Zobel Ramon F. Villavicencio
Reynaldo G. David Reynato S. Puno Margarito B. Teves
On March 16, 2020, the President of the Philippines declared a state of calamity
and implemented a state lockdown because of the growing pandemic of coronavirus
disease 2019 (COVID-19) that caused many businesses to fall down their expected
profits in year 2020. One of the biggest company here in the Philippines, San Miguel
Corporation anticipates that there will be a lower demand for their food and beverage
products from on-premise consumption such as restaurant, bar, hotel and similar
establishments due to directives to minimize public gatherings and tourism-related
activities and also expected a big loss for their net profit because of the liquor ban that
has been implemented during the state lockdown. Some cities chose not to implement
the liquor ban and lifted it. But the capital of the Philippines (Manila) did not lift the liquor
ban that caused a great impact to the Liquor Companies especially San Miguel
Corporation.
Estimated Net Income of San Miguel Corporation
2019 2020 2021
Net Income 18,377,000,000PH 15,585,000,000PH 20,077,000,000PH

P P P
I. TIME FRAME: Sometime in 2020
II. VIEWPOINT: San Miguel Corporation Management
III. STATEMENT OF THE PROBLEM: Determine the marketing and pricing strategy
that San Miguel Corporation can implement after the pandemic to regain its profit
loss during the Covid-19 Quarantine in 2020.
IV. STATEMENT OF OBJECTIVE: Be able to achieve business growth and ensure
profitability of business operations.
V. AREAS OF CONSIDERATION:
 5.1 Internal Environment
V.1.1 Strength
 Strong and popular brand portfolio
 It is known leader in the beer concern
 Large group of company
 Globally and Internationally known
 It is diverse into non-allied business
 Maintains a strong cost leadership position
V.1.2 Weaknesses
 The company’s business and sales are affected by seasonality
 Losing international assets
 Product Cannibalization
 5.2 External Environment

5.2.1 Opportunities
 New ventures
 Increasing Social Media and Internet Penetration of Filipinos
 Filipino’s Drinking Culture
 Growing demand for beer products in other parts of the world,
especially in North America
5.2.2 Threats
 Competitors
 Entry of new producers of other alcoholic beverages
 Water scarcity
 Changes in consumers' preferences or purchasing power
VI. ASSUMPTION: Applying the marketing and pricing strategy to the products
specially on the products that has high demand rate will help them to regain their
profit loss.
VII. ALTERNATIVE COURSES OF ACTION:
1. Release new product and package introduction.
2. Increase product visibility through promotions.
3. Use or apply the segmented pricing strategy to the products specially to liquor
products.
4. Expand to areas or places currently underserved.
5. San Miguel Corporation should try to increase the profit margins of products.
VIII. ANALYSIS OF ACA
1. San Miguel Corporation should introduce new products and improve
packaging to increase customer interest and overall market size, as well as
address the needs of an increasing fragmented market.
2. San Miguel Corporation can capture more of its existing markets through tactical
consumer promotions such as flash promotions and special sales to social
media.
3. Implementing segmented pricing strategy will give a great contribution to

increase their profit.
4. Could maximize its growth potential by entering into new markets especially
those located in North America where there is a signification of growth in demand
for beer products.
5. Increasing profit margins of products can be done through product

development techniques, innovative methods and reducing the production cost
and improving the efficiency of production plants and such. More revenues will
be generated along with better operational profits, also innovative products tend
to attract a larger consumer market.
IX. ACA SELECTION

3. Implementing segmented pricing strategy will give a great contribution to
increase their profit.
4. Could maximize its growth potential by entering into new markets especially
those located in North America where there is a signification of growth in demand
for beer products.
X. CONCLUSION
San Miguel Corporation should implement the segmented pricing strategy to their
products to regain their profit loss during lockdown, which is charging a different
price to different customers. Being a successful and well-known company will be
a great opportunity for them to implement this strategy.
XI. ACTION PLAN
1. Implement the segmented pricing strategy
Putting a higher price to their products especially in the liquor to high class
hotels, bars, restaurants and other establishments. Because there will be a high
demand in the food and beverages, once those establishments reopen and
operate their businesses when everything gets back to normal after the
lockdown/covid-19 period.
2. Maximize growth opportunities by expanding to areas currently

underserved
Another great opportunity for them is entering into new markets that are currently
underserved, particularly in North America where there is an increasing demand
for beer products. It can also be a great start to them to recover their loss
international assets
References:
San Miguel Corporation Company History. (2018). In San Miguel. Retrieved from
https://www.sanmiguel.com.ph/page/our-history?fbclid=IwAR1WX-
HrErGfBIOptgCw3-FFQKcqBobTTPxBGyN2MwMHfi_2Rrt6cnDZEew
San Miguel Corporation Current Report amid Covid19 pandemic. (2020). In San Miguel.
Retrieved from https://www.sanmiguel.com.ph/files/reports/PSE-
SMC_Filing_of_Current_Report_Under_Section_17_SRC_amid_covid19_pandemic
_03.13_.2020_.pdf?fbclid=IwAR01MjTmn1MfWnTTV4p1-q36v0z2qbKJqi-
YeVQ0JDH4f1QjdI_4rO0ZlRg
San Miguel Corporation Financial Report. (2020). In Market Screener. Retrieved from
https://www.marketscreener.com/SAN-MIGUEL-CORPORATION-
105526404/financials/
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A Case Study of

By: Pascua, Juvel C.

In 1889, a well-known Manila businessman, Enrique María Barretto de Ycaza y

Established in 1890, La Fabrica de Cerveza de San Miguel, Southeast Asia’s first

The Company’s manufacturing operations extend beyond the Philippines to Hong

San Miguel Corporation's commitment to bring quality products to each and

Guided by a strong sense of social, environmental and economic responsibility,

San Miguel Corporation Current Board of Directors

Eduardo M. Cojuangco, Jr. Ramon S. Ang Joselito D. Campos, Jr.

Jose C. de Venecia, Jr. Menardo R. Jimenez Estelito P. Mendoza

Alexander J. Poblador Iñigo Zobel Ramon F. Villavicencio

Reynaldo G. David Reynato S. Puno Margarito B. Teves

Estimated Net Income of San Miguel Corporation

2019 2020 2021

Net Income 18,377,000,000PH 15,585,000,000PH 20,077,000,000PH

 5.2 External Environment

3. Implementing segmented pricing strategy will give a great contribution to

5. Increasing profit margins of products can be done through product

IX. ACA SELECTION

1. Implement the segmented pricing strategy

2. Maximize growth opportunities by expanding to areas currently

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