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Table of Contents
Introduction to Alcoholic Beverages Sector...............................................................4
Alcoholic Beverages.................................................................................................. 5
IMFL (India Made Foreign Liquor)........................................................................... 5
Country Liquor....................................................................................................... 7
Beer....................................................................................................................... 7
Wine..................................................................................................................... 10
Associations & Groups............................................................................................. 12
Confederation of Indian Alcoholic Beverage Companies (CIABC) (Delhi, India)....12
All India Distillers Association (AIDA)..................................................................12
All India Brewers Association (AIBA)....................................................................12
All India Wine Producers Association...................................................................13
Indian Government Regulation in the Sector...........................................................14
Segmentation for Alcoholic Beverages....................................................................15
Rising Income Levels............................................................................................ 15
Changing Age Profile............................................................................................ 15
Changing Lifestyles.............................................................................................. 15
Price vs. Kick Factor............................................................................................. 15
Drinking Habits.................................................................................................... 16
Segmentation of Alcoholic Beverages..................................................................16
Buying behaviour for Alcoholic beverages..............................................................19
Problem Recognition:........................................................................................... 19
Information search / identifying alternatives:.......................................................19
Wine shops....................................................................................................... 19
Word of mouth.................................................................................................. 19
Restaurants/bars/discotheque..........................................................................20
Experience-....................................................................................................... 20
Alcoholic Beverages
Country Liquor
Indias country liquor industry, a commoditised and often chaotic business,
is estimated at Rs 22,000 crore, with annualised volume sales of over 200
million cases. At one point, the country liquor market was projected at 2.5
times that of the more visible and heavily branded Indian Made Foreign
Liquor (IMFL) industry, but has been loosing ground rapidly in recent years.
Country liquor, however, has remained almost stagnant in absolute size as
consumers upgrade to IMFL on the back of economic expansion, and with
more States banning the segment citing social risk.
The standard characteristics of country liquor vary with the States, with its
alcohol strength in Maharashtra at 42.8% like IMFL, but 36% in Uttar
Pradesh where the purchasing power of the mass consumer is believed to
be lower.
Not only the changing skyline, but also the changing lifestyle and habits of
people are causing the slump in country liquor sales. The demographic
profile of the area has seen a sea change in the past few years.
Several big markets, especially those down south, have banned country
liquor immensely benefiting the IMFL sales. Country liquor was wiped out of
the southern markets when Karnataka became the last State to ban it..
However, country liquor continues to go strong in northern States like Uttar
Pradesh, Haryana and Punjab, while Maharashtra is one of the bigger States
in the west.
A.P., Karnataka and Tamil Nadu have abolished RS based CL in favour of
cheap ENA based IMFL. UP (19.5), Maharashtra (19.3), Karnataka (13.6),
Punjab (10.2) & Haryana (9.4) consume 63% of the total CL.
Beer
Beer is traditionally associated with young age consumption and often
considered as an urban socializing phenomenon. With the advent and
availability of more number of Western premium brands of beers in India,
the younger generation is also considering beer as an option to hang-out
with. The staid image of earlier generations at-home whisky or rum drinking
habits are mostly being replaced by a more jazzy club drinking culture in
India
Youthful exuberance, rapid growth in disposable income and urbanization
are the biggest selling points for the brewers to enter India.
The cult images of brands such as Carlsberg, Tuborg, Heineken, Tiger,
Cobra, Budweiser, etc. are further helping the cause as more number of
young Indians is influenced by Western cultures and customs. With India
expected to remain the youngest among all the bigger economies even in
2030 across the globe, the outlook for the beer market is definitely much
more than just bright.
In India the future of beer industry is very much optimistic because:
1. India has predominantly a warm/hot climate
2. The beer-drinkers in the country are much younger than the average
beer-drinker elsewhere in the world. This makes them more likely to carry
the brand with them for a lifetime.
3. Increasing exposure to beer and wine drinking, mainly due to media and
consumer mobility.
All these factors combined make the scenario very promising for beer
industry and are 'in sync' with their strategy for India.
The beer-drinkers in the country are much younger than the average beerdrinker elsewhere in the world. This makes them more likely to carry the
brand with them for a lifetime. Also, as the target audience becomes
younger, a light beer is expected to attract first-time drinkers, since it is
much milder than any of the other beers in the country.
United Breweries and SAB Miller together, sweep close to 80% of the Indian
beer market. Individual state oriented excise structure has further allowed
these two companies to develop a near duopoly in the market, since
differentiated alcohol policy in different states, localized distribution
monopolies and state excise on imports and exports of alcoholic drinks
make distribution and logistics of beer almost economically futile for most of
the new entrants.
UB (United Breweries Ltd.) is the market leader in the Indian beer market
with a 40% market share. Its flagship Kingfisher brand alone commands
25% market share. The company has however been focusing on strong
beer, which has driven growth. The company introduced its strong beer,
Kingfisher Strong during the year 2000 in the selected market of
Maharashtra and Karnataka. The market is now skewed towards strong beer
with more than 60% of the market being strong beer market.
Apart from Kingfisher, and Foster's Beer, the other brands in the Indian
market are Carling Black Label, Carlsberg, Dansberg, Golden Eagle, Guru,
Maharaja Premium Lager, Haake Beck, Haywards 2000 Beer, Haywards
5000, Haywards skol, Flying Horse Royal Lager, Taj Mahal, Heinekin, Hi-Five,
Ice, Kingfisher Diet, Kingfisher Strong, Kirin, Knockout, Legend, London Diet,
London Draft, London Pilsner, Royal Challenge, San Miguel Lager, Sand
Piper, Strohs and Zingaro.
The major brands which belong to large groups in the industry (apart from
UB) are Shaw Wallace - Royal Challenge Premium Lager, Haywards 2000
Premium Lager, Haywards 5000 Super Strong, Hi-Five and Lal Toofan.
A lot of new variants promise to gain prominence, but mainly in niche urban
segments. The sophisticated consumer who drinks beer for the experience
and not to get drunk will lap up ice beer or light beer. In urban centres, apart
from first time users companies are also targeting women, who as 'the times
they are a changing,' are entering the market for beer. Essentially, women
shy away from beer consumption because it is associated with calories, and
has traditionally been a buddy drink, associated with pot-bellied men sitting
at bars and shooting darts.
Source- Times of India
Wine
Wine is an alcoholic beverage made by fermentation of grapes or grape
juice. Global market for wine is estimated at well over 25 billion litres.
Compared to other countries, wine manufacture and consumption in India is
insignificant. This is attributed to earlier period of prohibition in the country
and higher price compared to spirits like whisky and brandy manufactured in
the country, referred to as Indian Made Foreign Liquors (IMFL).
Challenge for industry is maintaining lower costs to control the cost of
expensive packaging inputs. Another challenge for the company was to
manage the distribution of the finished goods. Eighty per cent of wine
consumption in the country is confined in major cities such as Mumbai
(39%), Delhi (23%), Bangalore (9%) and Goa (9%)
There are new players entering the Wine playing field and India can now
boast 3-4 large Wine manufacturers with capacity of about a million cases
per year. 2008 has been great year for Indian Wine manufacturers as Indian
Wines have won awards and acclaim in Europe and U.S. Indian Wines
however still are not very well accepted and there is still a resistance to
Made in India label.
Source-Report by Indian Wines
Hypothesis
Segmentation for Alcoholic Beverages
There is significant latent demand and vast scope for growth in liquor
consumption, both in the urban and prosperous rural areas of India. Drinking
liquor has rapidly gained acceptance and is no more considered as taboo even among the conservative middle-class whose attitudes have changed
with improved standard of living. Alcohol companies have been quick to
cash on to this trend. In fact, the youth, women and middle-class and
many other overlapping segments are being targeted by the liquor
companies looking for growth.
But the emerging trends are interesting. Strong beer (alcohol content in
excess of 5 per cent), a category non-existent in developed countries, has
been growing at about 15 per cent in India and already accounts for more
than 55 per cent of beer consumption. This trend is slated to continue.
The Indian alcohol market has been growing rapidly over the last 10 years,
due to the positive impact of demographic trends and expected changes,
like:
Changing Lifestyles
A deep-seated traditional social aversion to alcohol consumption has been a
traditional feature of the Indian society. However, as urban consumers
become more exposed to western lifestyles, through overseas travel and the
media, their attitude towards alcohol is relaxing. Social habits are
undergoing a transformation as mixed drinks are becoming more popular.
The greatest evidence of this trend is the increase in beer consumption
among women. More and more women are consuming beer the
penetration in metropolitan areas is almost twice as high as the penetration
in other large cities implying that the greater tolerance towards alcohol
consumption in metropolitan areas with increasing urbanization, this
acceptance is only going to rise.
Drinking Habits
Drinking habits will differ across various segments and will range from first
time experience drinkers to habitual ones. Normally binge drinking is more
popular amongst youth segment while middle age group segment will prefer
drinking within limits due to family. Senior drinkers will be more limited due
to their old health and will prefer drinking only on special occasions like
family and friends gatherings. But we can always find habitual drinkers
present across all segments for whom drinking is a way of life and they have
to drink as per their daily body requirement.
Off late drinkers catering to segments like Page-3, Image seekers, Globe
travellers, seasonal, loyal ones are seen increasing.
Segments
Geographic
Metro
Cities(Cla
ss A)
Tier-II
Cities
(Class B)
Rural
Areas
Characteristics
High level
Awareness ,Easy
availability,
Drinking Socially
accepted, Variety
of drinking habits,
Medium level
awareness,
Availability is not
a major issue,
Social acceptance
showing upward
trend
Low level
awareness,
availability is a
challenge,
Drinking socially
unacceptable
Purpose
Leisure,
Celebration,
Social
outings,
Weekend
drinkers
Weekend
drinkers,
leisure,
celebrations
Mostly
getting
drunk for
kick factor,
Habitual
drinkers
State of
Mind
(Image
requiremen
t)
Preferred Alcoholic
Beverages
Power,
Rebel,
Status,
Flamboyant
Premium brands of
Beer(mild &
strong),Wine, Whisky,
Rum, Vodka, Gin
Power,
Status, Just
to get drunk
Power,
Rebel, To
quench daily
thirst, cost
conscious
Semi-Premium brands
of Beer(mild &
strong),Wine, Whisky,
Rum, Vodka, Gin
Lower and local
brands of Strong
beer, Country liquors
(licensed &
illicit),Low-priced
whisky & rum
Gender
Male
Female
Middle
aged(3150)
Senior(ab
ove 50)
low to high
quantity habitual
drinkers
Age
Youths(18
-30)
Celebrations
, daily,
weekend &
social
drinkers,
leisure, To
taste and
experiment
with
different
brands, To
relieve
stress
Power,
Rebel, Cost
conscious,
flamboyant,
status
Curiosity,
Celebrations
,
Social
outings,
Glamorous,
Status
Curiosity,
celebrations,
Show-off, To
give
company for
drinking, To
simply get
drunk, high
addiction
seen in this
age group
Power, rebel,
Casanova,
Flamboyant,
Beers, Breezers,
Whisky, Vodka, Rum,
Gin, Wine
Taste
conscious,
Brand
Specific
Cost
conscious,
Brand
loyalty
Relaxation,
Weekend
celebrations,
Friend
gatherings,
medium
addiction
Body
requirement,
Relaxation,
low
addiction,
social &
family
gatherings
Occupation
Students
Working
Executive
s
Middle
level
profession
als across
IT
Sector,Airl
ines,Banki
ng etc
Business
Elite Class
(Top
Notch
managers
)
Psychographic
Defence
Profession
als
Party
Lovers/Pa
ge-3
Image
Seekers
Globe
Travellers
drinking by
contributing
earned/pocket
money within
friend circle,
trying different
beverages
Considers
drinking as a kind
of stress buster
after hard work.
Considers
drinking as a
regular weekly
activity
Show-off,
Friend
outings
Power,
Rebel,
Casanova,
To simply
get drunk
Relaxation,
Friend
gatherings
Rebel, cost
conscious
To give
company,
Heavy
weekend
drinkers
Leisure,
Celebrations
,
Status
conscious
Deluxe Scotch
Whiskies, Wine
Power, Taste
conscious,
Power,
Celebrations
, Status
conscious,
Glamorous
Premium Scotch
whisky, Wine, Vodka,
cocktails, mocktails
Power,
Image
conscious
Taste
experience,
Enjoyment
Deluxe imported
Scotch whisky, Wine,
Vodka
Deluxe and Premium
scotch whisky, Wine,
Vodka
Drinking after
office hours
considered as a
norm,
Business
dealings,
Social
outings
Relaxation,
Team
bonding
sessions, To
relieve
stress
To celebrate
Launch of any
event, success of
any movie.
Basically they
need reasons to
party.
Will consume
certain type of
product and
brand which will
reflect their
personality
Managers/Professi
onals on frequent
overseas travel
always purchase
different brands
from duty-free
shop at airports,
First time
experience
drinkers
Leisure,
Celebrations
, To increase
acquaintanc
es, to give
company
To project
certain
personality
at social
gatherings &
events
To
experience
international
brand which
are
generally
not available
and
manufacture
d in India.
esteem drinkers,
Habitual/
Daily
Drinkers
Convenience
, Relaxation,
To quench
their thirst
/addiction,
Relaxation,
Body
requirement
Loyalty
Status
Relaxation,
Convenience
,
Where
Consume
d
Consumption can
be in Bars,
restaurants, pubs,
clubs, Friends
house, private
parties, home
All possible
mentioned
purpose as
above as per
applicability
Behavioral
Seasonal
Drinkers
Leisure,
Enjoyment
Cost
conscious,
To quench
their daily
thirst
Semi-premium
whisky, rum, vodka,
Country Liquor
Taste
conscious,
Brand
conscious
All possible
mentioned
Image
requirement
as above as
per
applicability
Wine shops
More than half of purchase decisions are made and changed at wine outlets.
Factors like attractive display, recommendation from the shop owner about
a particular brand and drink heavily influences a buyers decision process. A
habitual drinker will only ask for his particular brand in wine shop due to his
loyalty and the taste preferences which he has developed towards a
particular brand over years. A new or a more youthful drinker will get
attracted due to fancy packaging and the exuberance which a particular
drink is trying to project. Wine shops also offer free glasses, supplementary
drink like soda, soft drink to attract customer especially during festive
season on a particular type and brand of drink which also leads to change in
buyers decision. The only gap here is buyer may not be able to get any
information w.r.t. technical parameter of different brands as these shops are
being run with intention of maximizing sales which in turn may sometimes
lead to dissonance amongst buyer.
Word of mouth
Word of mouth publicity from friends, peers and others whom you always
tend to rely leads to buying and trying out a particular type and brand of
alcoholic beverage.
In gathering of working professionals and day to day activities, people
exchange each others opinions on different type of alcoholic beverages.
These opinions are shared by individual who had prior experience or have a
loyalty to one brand or company.
Restaurants/bars/discotheque
A large percentage of buyer prefer drinking at various restaurants, bars,
pubs as they are away from social gaze, ambience which a person gets
attracted to and feels comfortable with, service offered to customers and
quality and variety of food which it offers. Indians love to have variety of
spicy snacks with their alcoholic beverages. The young crowd would
preferably drink in a particular club due to its nightlife and the various types
of cocktails and mocktails it offers. Buyer again tends to go with the
availability of particular type and brand of drink in his favourite bar, pub just
changing his decision process. Most of the bars, restaurants have started
Happy Hours concept which offers popular brand of alcoholic drinks at lower
prices at odd hours which in turn leads to increase in consumption and in a
way changing buyers decision who are heavily addicted and cant resist the
idea of simply getting drunk at their favourite joints.
ExperienceIt also happens many a times that you try out different drinks in all your
various social outings with friends, parties, celebrations, corporate meet
that you develop a liking to particular type and brand of alcohol beverage.
Factors like taste preferences, hangover effect play a major role in decision
making process.
During any global sporting series e.g. football world cup, cricket world cup
etc, liquor companies sponsor the event to underline and showcase their
brand. These events are a perfect platform to enter into any buyers
consideration set easily and quickly. Studies have shown that buyers end up
buying the particular brand which gets projected heavily and regularly.
Evaluation
When the required information had been collected and consolidated, buyer
will make a comparison between the available brands. Also this process and
criteria of evaluation will vary at different stages of the life cycle of the
product.
Generic evaluation
At this stage, product may be competing with other products satisfying
same need level. Hence consumer may have a little knowledge on the
optimum parameter of the product. At this stage a drinker just need
availability of alcoholic beverages whenever he has urge to have some
drinks.
Comparative evaluation
At this stage consumer will compare standard product available with the
newer products available. Hence customer may compare standard set by
generic brand with the offer of newer entrants. E.g., any new beer brand
available is compare with the existing brands of beer, still there is no brand
loyalty from a consumer. Hence this type of evaluation has higher chances
of shift.
Adaptive: The criteria used under this head are: trial, guarantees, and
so on. Hence its brand image and value which plays a role. E.g. having
consumed some quantity of a reputed brand, one will be sure on the
purity and quality of the product.
Segments
Geographic
Metro
Cities(Clas
s A)
Tier-II
Cities
(Class B)
Rural
Areas
Gender
Male
Female
TIME
UTILITY
Can Wait
Can Wait
Immedia
te
Can Wait
Immedia
te
PLACE UTILITY
Willing to travel to
Bars , Restaurants,
Pubs , 5 Star
Hotels, Parties with
good ambience,
multi-brand &
reputed wine
outlets
Convenience Restaurants, Home,
Parties, Wine shops
Convenience Home or Nearest
Country Bar
Wine shops,
Conveniencehome, friends
place, trust-word of
mouth, favorite
ambience in bar,
restaurant
Shopping
Experience, pubsnightclubs,
attractive
packaging
PURCHA
SE
PROCESS
Extended
Problem
Solving
Sub
Contracte
d
PREFER
ENCE
Picking
Product
-> Store
& Brand
Product
-> Store
-> Brand
Store ->
Product
-> No
Brand
Decision
Variety
Seeking
Product
-> Store
-> Brand
Impulsive
Store ->
Product
or brand
Age
Youths(1830)
Middle
aged(3150)
Senior(abo
ve 50)
Students
Occupation
Psychograp
hic
Working
Executives
Middle
level
profession
als across
IT Sector,
Airlines,
Banking
etc
Immedia
te
Wine-outlets,
Restaurants,
Friends home,
Pubs, nightclubs
Ambience &
Convenience -Wine
outlets, Bars, Home
Can Wait
Convenience -cost,
home
Immedia
te
Immedia
te
Can Wait
Can Wait
Business
Elite Class
(Top Notch
managers)
Can Wait
Defence
Profession
als
Immedia
te
Convenience
,pubs ,bars, friends
place, wine shops
Willing to travel,
trust-word of
mouth, wineshops
Willing to travel,
multibrand wine
outlets, ambience,
AmbienceCorporate
Gatherings, Status
and image
orientation
Habitual
Buying
Product
-> Store
-> Brand
Product
-> Brand
-> Store
Product
-> Brand
-> Store
Store ->
Product
-> No
Brand
Decision
Product
-> Brand
-> Store
Problem
solving
Product
-> Brand
-> Store
Variety
Seeking
Habitual
Buying
Heuristic
Picking
Heuristic
(taste
preferenc
e)
Party
Lovers/Pag
e-3
Can Wait
ConvenienceHome, Bar
Status orientation,
trust-word of
mouth, ambience
of party
Image
Seekers
Can Wait
image orientation,
reputed outlets
Habitual
Buying
Can Wait
Ambience, reputed
multibrand outlets
Variety
Seeking
Can Wait
Convenience, wine
outlets
Problem
solving
Immedia
te
Convenience
Habitual
Buying
Globe
Travelers
Seasonal
Drinkers
Habitual/D
aily
Drinkers
Picking
Sub
Contracte
d
Brand ->
Product>Store
Store ->
Product
-> Brand
Decision
Store ->
Product
or brand
Product
-> Brand
-> Store
Product
-> Store
-> Brand
Product
-> Brand
-> Store
Product
-> Brand
-> Store
Loyalty
Status
Can Wait
Willing to travel to
favorite pubs, bars,
wine outlets for
particular brand
Where
Consumed
Immedia
te
Convenience-bars
Habitual
Buying
Picking
Behavioral
Brand ->
Product>Store
Store ->
Product
-> No
Brand
Decision
Surrogate Advertisement
As a reaction to the directive of Government, the liquor & tobacco majors
sought other ways of endorsing their products. They have found an
alternative path of advertising through which they can keep on reminding
their liquor brands to their customers. They have introduced various other
products with the same brand name. Launching new products with common
brand name is known as brand extension, which can be carried out for
related products (e.g.: Kingfisher Airlines and Kingfisher Beer). In this case,
the companies launch other products with the same brand name for the
purpose of reminding their old customers. Heavy advertising is done so
that the customers do not forget their liquor & tobacco brands, for which
advertisements are banned. The advertisements for such new products are
placed under the category of "Surrogate Advertisements". Their only
objective is to compensate the losses arising out of the ban on
advertisements of one particular product (i.e. liquor). This is a loophole
challenging the Government's action.
LEGITIMATE BUSINESS
McDowells malt whisky
Radico Khaitans 8 pm whisky
Haywards 5000 Beer
Derby Special
Bacardi Liquor
Bagpiper liquor
Kingfisher Beer
SURROGATE
ADVERTISEMENTS
McDowells Soda/water
Radico Khaitans water
Haywards water/soda
Derby Special Soda
Bacardi Blast CDs & Cassettes
Bagpipers soda and cassettes
Kingfisher bottled drinking water
Sponsoring for any highly watched sporting event like IPL in form of apparels
for Bangalore-Royal Challengers, Cricket and Football events, Sports
accessories appeals the sensibilities of consumer and creates a pull effect
towards their brand. Liquor companies wont mind getting into any low cost
surrogate products like CDs cassettes, supplementary drinks - Soda, soft
drinks as long as customers choose their brands and increases their
profitability and market share.
Major Players
IMFL
Major Players operating in the India include United Spirits, Diageo (Smirnoff
& Johnnie Walker brands), Seagram, Jagatjit Industries, Tilak nagar, Radico
Khaitan.
DIAGEO
TilakNagar Industries
Khaitan Ltd
Radico
BEER
Major Players operating in the India include United Breweries in form of
Kingfisher Brand, and SAB Miller. Knock Out, Carlsberg; Fosters are some of
popular brands.
References
Marketing Management Pingali Venugopal
http://www.aidaindia.org
http://www.theubgroup.com/beveragealcohol.html
http://www.vogaitalia.com
http://economictimes.indiatimes.com
http://www.hindustantimes.com
http://www.timesofindia.com
http://mofpi.nic.in