The case study is based on a series of in-depth interviews carried out with the owners and directors of the company. The data are complemented by documentary analysis, including descriptions of internal processes and industry information. For the teaching note, the authors opt for an exploratory study using the open-ended approach of grounded theory.
Arette® is a Mexican family business dedicated to the production and sale of tequila, fusing the artisanal with the new in its production processes. Sales take place mostly in the European and American markets. The foreign market for tequila is very attractive but also very demanding both in terms of financial resources and time. Although the company has managed to enter this market through bars and restaurants, it has not yet managed to reach the final consumers (those who order margaritas in bars). Jaime, Eduardo and Lalo are wondering whether it might be time to invest more resources in ensuring that Arette® is not just a brand for fine cocktails. Until now, their main promotional tool has been word of mouth, and they are not sure what their next step should be – to focus on the international or the domestic market.
The case study can be incorporated into undergraduate classes, where it could serve as part of an international marketing course, in particular, as an international sales strategy and implementation session. It can be used to teach basic concepts and their application.
This case study focuses on the decision that many small companies have to make at some point in their business strategy, which is to focus either on the international or domestic market: The objectives are as follows:
1. To identify the variables that increase or modify the demand for Tequila.
2. Compare the advantages and disadvantages of focusing on a domestic Tequila market or focusing on an international market.
3. Identify the critical variables that a small company faces if it wants to go international such as.
4. Identify if there are forms of diversification for Tequila Arette such as new markets or new products, or both.
