Alcoholic Beverages Segmentation and Buying Behavior

30th July, 2010 Thane centre (PGCBM Batch – 18) Kailash Thadani (2217441) Tushar Belwal (2217369) Nitin Mittal (2217284) Shubhojit Ganguly (2217232) Table of Contents Table of Contents ...... 2

Introduction to Alcoholic Beverages Sector ...... 4

Alcoholic Beverages ...... 5

IMFL (India Made Foreign ) ...... 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 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 ...... 16

Drinking Habits ...... 16

Segmentation of Alcoholic Beverages ...... 16

Buying behaviour for Alcoholic beverages ...... 20

Problem Recognition: ...... 20

Information search / identifying alternatives: ...... 20

Wine shops ...... 20

Word of mouth ...... 21

Restaurants/bars/discotheque ...... 21

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 2 Experience- ...... 21

International Brand Pull ...... 21

Advertisement- ...... 21

Evaluation ...... 22

Comparative evaluation ...... 22

Purchase and Decision Process ...... 23

...... 25

Advertisement of Alcoholic Beverages ...... 25

Surrogate Advertisement ...... 25

Surrogate Advertisements Promoted by Liquor Industries ...... 26

Major Players ...... 31

References ...... 34

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 3 Introduction to Alcoholic Beverages Sector

Alcoholic beverages in the India appeared in the Chalcolithic Era. These beverages were in use between 3000 BC - 2000 BC. Sura/ Somrasa, a beverage distilled from rice meal, wheat, sugar cane, grapes, and other fruits and was popular among the Kshatriya warriors and the peasant population.

The Hindu Ayurvedic texts describe both the beneficent uses of alcoholic beverages and the consequences of intoxication and alcoholic diseases. Most of the people in India and China have continued, throughout, to ferment a portion of their crops and nourish themselves with the alcoholic product.

Indians today drinks , Rum, , Wine, , and . Between 15 and 20 per cent of Indian people consume alcohol and, over the past twenty years, the number of drinkers has increased from one in 300 to one in 20. According to The Hindustan Times, it is estimated that of these 5 per cent can be classed as alcoholics or alcohol dependent. This translates into about five million people addicted to alcohol. The Intake of Indian Made Foreign Liquor (IMFL) is growing at the considerable rate of 15 per cent a year. Again, The Hindustan Times says that 65 per cent of the Indian liquor market is controlled by whiskey manufacturers.

Liquor industry is today exporting a sizable quantity of India Liquor products to other countries. The Indian market has traditionally been inclined towards the unorganized sector, which accounts for two-thirds of the liquor consumption in India. However, maturing tastes and preferences are making the Indian liquor market more Brand-led.

Roughly 60% of the population is under 30. What's more, incomes are rising, powered by an economy that's growing at 9%-plus. These trends are expected to fuel growth in beer consumption of up to 15% a year through the end of the decade.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 4 Alcoholic Beverages

IMFL (India Made Foreign Liquor) It is India's potential for whisky -- it accounts for about 60 per cent of the Indian Made Foreign Liquor (IMFL) market -- and other spirits such as rum and vodka that is attracting the MNCs to India. India is a big and growing market with a weakness for spirits, especially whisky.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 5 Number of cases in millions

Source- IWSR Report

Branded spirits market in India is 119 million cases out of which Whisky accounts for 55%, Rum 27%, Brandi 14%, Gin 3%, and Vodka 1%. North and west India consumes more of whisky and South, more of and Rum. The UB Group (35%) has a market share of 35% + 13% = 48% after merger of Spirits Division of Shaw Wallace (13%), Jagajit (7%), Mohan Meakins (7%) and IDL (3.5%). AP (24), TN (19.3), Karnataka (11.2), Kerala (10.9) & Rajasthan (5.7) consume 60 % of the total Indian Liquor which is growing at about 11%.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 6 Country Liquor India’s 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 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.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 7 Number of cases

Source- Times of 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.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 8 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 beer- drinker 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 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, , 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

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 9 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.

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 (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 manufacturers as Indian 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.

40 35 30 25 Mumbai 20 Delhi 15 Bangalore 10 Goa 5 0 Wine Consumption in %

Source-Report by Indian Wines

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 10 Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 11 Associations & Groups

Confederation of Indian Alcoholic Beverage Companies (CIABC) (Delhi, India)

The CIABC is the apex body of the branded segment of wine and spirits excluding the beer industry in India. This includes leading domestic and international companies like (USL), , , Bacardi Martini, Jagatjit Industries, Brown Forman Worldwide and Tilaknagar Industries as its members.

The CIABC’s role is to interact with excise authorities at the state level and to find solutions that are in the interest of its stakeholders. State governments invite the body for discussions before formulating excise policies.

All India Distillers’ Association (AIDA)

In 1953, an all India body of distillers was constituted which was baptized All India Distillers’ Association. During the Intervening four decades this association has not only grown in size but has also widened its sphere of activity.

The Association has been carrying out a pioneering work with regard to catering to interest of the and has gone from strength to strength through out all these 54 years, to the extent that it is now a force to reckon with as far as the alcohol and distillery industry is concerned.

AIDA is the leading business support organizations for the alcohol & liquor industry in India and maintains the lead as the proactive business solution provider through continuous interaction at the constituent members’ level and various government agencies level. It is therefore now the largest and the oldest apex organization of Indian Alcohol Industry which stands for quality, industry – Government- Society partnership and to enhance the quality and productivity of the distillery/ alcohol industry on the whole. AIDA today espouses the shared vision of the Alcohol / Distillery industry in the country and speaks directly or indirectly for the entire industry.

All India Brewers’ Association (AIBA)

The All India Brewers` Association is a prime body representing the interests of industry of India. Its members account for more than 90% of production and sales of . AIBA was formed in the year 1977 and was registered under the Karnataka Societies Registration Act 1960. From

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 12 membership strength of mere 15, it has now swelled to close to 50 and is India’s leading business support organization. The membership includes leading brewers, malt companies, manufactures of brewing equipment and engineering & technological service providers. United breweries, SABMiller India, Malt India, Alfa Laval, Praj Industries, and Briggs of burton are some of its members.

AIBA has been at the fore-front of working with the Government and been carrying out a pioneering work in addressing the interests of the beer industry. Besides providing policy support, it also represents the commercial and other interests of the industry with the various State Governments. The association has also been actively engaging both nation and regional media to highlight the immense agricultural and social benefits of encouraging beer in a country weaned on hard spirits

The principal functions of AIBA can be summarised as follows: • To provide a common platform for its members to discuss issues of mutual interest • To work with all stakeholders like Central & State Governments, raw material suppliers , consumers other than the brewing companies on issues affecting the industry • To be able to present a common face and voice on industry issues whilst representing to other constituents of our environment • To lobby with the regulatory authorities (decision makers- state government

All India Wine Producers’ Association

All Indian Wine producers association established their association in the year 1996. At that time there were only one or two grape processing units in working, having great scope to generate skilled or unskilled employment and to earn foreign revenue. By promotion of this Industry the Grape Growers community will get the assure market for their grapes produced. All over world there is 99% grapes are cultivated for processing and 1% is used for eating purpose. As of today there are 75 grape processing units all over the India and wine grape plantation is increased to 9000 acres.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 13 Indian Government Regulation in the Sector

Indian Government heavily regulates this industry by influencing the movement and prices of alcoholic beverages along with intermediate goods (molasses, alcohol). They are heavily taxed thus providing a major source of revenue for state governments. Government license is required for the import of potable alcohol.

Gujarat, Manipur, Mizoram, Nagaland has imposed total prohibition on alcoholic products.

The general policy is to discourage the consumption of alcoholic beverages including total prohibition in some states. This usually causes illicit distillation, loss of government excise revenue and enforcement problems. The following initiatives have been taken by the government in the alcohol beverages sector.

1) The Cable Television Network (Regulation) Amendment Bill, in force September 8, 2000, completely prohibits alcohol advertisements.

2) Regulatory laws pertaining to hours of sale of alcohol, sale to minors and drunken driving are observed. Implementation of a nationwide legal drinking age of 21 years have achieved about 50-60 per cent cut in the consumption of alcohol

3) The Indian Motor Vehicles Act specifies a blood alcohol cut-off of 30mg.% for drivers, which is arguably one of the strictest in the world.

4) The Government has funded 483 detoxification and 90 counselling centres country-wide, under National Drug De-addiction Program, to treat people with substance abuse disorders. 45% of people seeking treatment in these centres are for alcohol dependence.

Various Indian states have independent laws, the legal age limit varies from 18-25 and some have implemented prohibition as well. Lots of taxes in the form of duties are imposed at various stages from bottling to sale.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 14 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:

Rising Income Levels India is home to nearly one-sixth of the global population and is one of the most attractive consumer markets in the world today. Various research studies have shown that a rise in the income levels has a direct positive effect on alcohol consumption.

Changing Age Profile As a consequence of the high birth rates prevalent until the 1990s, a large proportion of the Indian population is in the age group of 18-30 years. This age group is the most appropriate target for alcoholic products marketers. This population trend will give a further boost to the growth of alcohol consumption in India.

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.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 15 Price vs. Kick Factor The Indian consumer typically values an alcoholic beverage on the basis of its 'kick' factor versus its price. The following two factors therefore, affect the market for alcoholic beverages.

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.

Segmentation of Alcoholic Beverages

Segmentation for Alcoholic Beverages

State of Mind (Image requiremen Preferred Alcoholic Segments Characteristics Purpose t) Beverages High level Leisure, Awareness ,Easy Celebration, availability, Social Power, Premium brands of Metro Drinking Socially outings, Rebel, Beer(mild & Cities(Cla accepted, Variety Weekend Status, strong),Wine, Whisky, ss A) of drinking habits, drinkers Flamboyant Rum, Vodka, Gin Medium level c i awareness, h

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Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 16 Page Page Belwal Tushar Thadani, Kailash Age Gender Male ov Senior(ab 50) aged(31- Middle -30) Youths(18 Female 17 e50)

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Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 19 Buying behaviour for Alcoholic beverages

Problem Recognition: Reasons for buying alcoholic beverages can be broadly classified into following categories:

1. Leisure, Celebration and Social outings 2. Weekend drinking. 3. Mostly getting drunk for kick factor who are Habitual drinkers 4. Drinking is also considered as a great stress buster after hard day’s work. 5. Festivals e.g. Deepawali, Holi etc where larger number of family members/friends gather. 6. To increase bonding between friends, for various business and corporate dealings.

Also there is always a search of varieties amongst drinkers, trying newer options, and various influences that indirect advertisements etc try to create. For e.g.-Projecting a more flamboyant, glamorous image will create a pull towards a particular brand and type of drink.

Information search / identifying alternatives: Buyer always ends up buying a product which has entered its consideration set and liquor companies will try their level best to be in that consideration set. The typical behaviour exhibited by buyer is that the initial information search is carried out to construct a Consideration set. Then the extensive search as described below is carried out to make a decision from the consideration set.

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 buyer’s 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 buyer’s 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.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 20 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 other’s 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, 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 can’t resist the idea of simply getting drunk at their favourite joints.

Experience- It 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.

International Brand Pull We Indians have this mindset of buying “Made in Other” countries or International branded alcoholic beverages due to its quality, reliability that it is not duplicated or tampered and other factors. We tend to be a bit more partial towards Indian brand when a buyer is not cost conscious.

Advertisement- All the liquor companies invest heavily on advertisement in print as well as media surrogately which mould the decision of the buyer too a large extent for leisure, fun or the personality that it projects. Most of the liquor companies use advertising tools extensively in restaurants, bars, pubs and discotheque. These places also provide an opportunity to sponsor events etc on special occasion e.g. friendship day, valentine day & host of other days.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 21 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.

Attribute based evaluation Over a period, there is no advantage to the product of introducer. At this stage evaluation will be solely based on the attribute of individual brand. This exercise will be based on what consumer want or do not want. On a broader scale, following will be criteria,

• Technical performance; This criteria uses the effectiveness of the product during evaluation. Hence taste, percentage alcohol, smell, after drink smell, kick etc shall be deciding factor.

• Generated functions: These incorporate additional costs and benefits generated even the psychological ones. Hence going to a expensive bar/restaurant will be status symbol. Also having expensive brands/foreign brands gives a feeling of socially upper class.

• Economic criteria: Economic criteria use information on price or cost per unit of effort or time. This will be basically considered by segment of rural areas where cost/unit relation is sensitive and for them it’s a habit which will push them to drink almost everyday.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 22 • 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.

• Integrative: Under the consumer buying situation the integrative criteria are related to cultural, social and ego aspects. Hence while segment of metro city drinkers will have a satisfaction on power, rebel status and rich by going to expensive places, for segment of rural areas, it does not matter much.

Purchase and Decision Process

PURCHA TIME SE PREFER Segments UTILITY PLACE UTILITY PROCESS ENCE Willing to travel to Bars , Restaurants, Pubs , 5 Star Hotels, Parties with good ambience, Metro multi-brand & Extended Product Cities(Clas reputed wine Problem -> Store s A) Can Wait outlets Solving & Brand Geographic Tier-II Convenience - Sub Product Cities Restaurants, Home, Contracte -> Store (Class B) Can Wait Parties, Wine shops d -> Brand Store -> Product Convenience - -> No Rural Immedia Home or Nearest Brand Areas te Country Bar Picking Decision Wine shops, Convenience- home, friend’s place, trust-word of mouth, favorite Product ambience in bar, Variety -> Store Gender Male Can Wait restaurant Seeking -> Brand Shopping Experience, pubs- nightclubs, Store -> Immedia attractive Product Female te packaging Impulsive or brand

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 23 Wine-outlets, Restaurants, Product Youths(18- Immedia Friends home, Variety -> Store 30) te Pubs, nightclubs Seeking -> Brand Middle Ambience & Product Age aged(31- Immedia Convenience -Wine Habitual -> Brand 50) te outlets, Bars, Home Buying -> Store Product Senior(abo Convenience -cost, -> Brand ve 50) Can Wait home Heuristic -> Store Store -> Product Convenience -> No Immedia ,pubs ,bars, friends Brand Students te place, wine shops Picking Decision Willing to travel, Product Working trust-word of Habitual -> Brand Executives Can Wait mouth, wineshops Buying -> Store Middle level profession als across Occupation IT Sector, Airlines, Willing to travel, Product Banking multibrand wine Problem -> Brand etc Can Wait outlets, ambience, solving -> Store Ambience- Business Corporate Heuristic Elite Class Gatherings, Status (taste Brand -> (Top Notch and image preferenc Product- managers) Can Wait orientation e) >Store Store -> Defence Product Profession Immedia Convenience- -> Brand als te Home, Bar Picking Decision Status orientation, Party trust-word of Sub Store -> Lovers/Pag mouth, ambience Contracte Product e-3 Can Wait of party d or brand Product Image image orientation, Habitual -> Brand Seekers Can Wait reputed outlets Buying -> Store Psychograp Product hic Globe Ambience, reputed Variety -> Store Travelers Can Wait multibrand outlets Seeking -> Brand Product Seasonal Convenience, wine Problem -> Brand Drinkers Can Wait outlets solving -> Store Habitual/D Product aily Immedia Habitual -> Brand Drinkers te Convenience Buying -> Store

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 24 Willing to travel to favorite pubs, bars, Brand -> Loyalty wine outlets for Habitual Product- Status Can Wait particular brand Buying >Store Behavioral Store -> Product -> No Where Immedia Brand Consumed te Convenience-bars Picking Decision

Advertisement of Alcoholic Beverages Advertisements have a strong influence in our life. We like them because they provide Information and create awareness about the market. But many times, some advertisements are accused of misleading people. When such accusations are proved, some advertisements are scrapped off from media. Such instances have been reported in the advertisements endorsing alcoholic drinks and cigarettes. Hence the Government had imposed a ban on advertisements of these products in the media in the year 2002.

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

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 25 brand name is known as brand extension, which can be carried out for related products (e.g.: 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.

Surrogate Advertisements Promoted by Liquor Industries The liquor industry is a prominent player in this game. Few surrogate advertisements shown in print, electronic and outdoor media are - soda and cassettes & CDs, Hayward’s soda, Derby special soda, Gilbey green aqua, Royal Challenge golf accessories and mineral water, Kingfisher mineral water, holidays, Smirnoff cassettes & CDs, Imperial Blue cassettes & CDs, Teacher's achievement awards etc. These products bear exactly the same brand name and logo, which we had seen earlier in liquor advertisements. It was little surprising to know that liquor giants like McDowell's and Seagram's have entered into new segments like cassettes & CDs, mineral water, sports accessories etc. Later it was found that the basic aim of these surrogate advertisements was to promote their liquor brands like beer, wine, vodka etc. This brand extension is an act of bypassing the advertisement ban.

Below table gives you a clear indication of how the liquor industry have introduced surrogate products and how advertisements of these products indirectly helps their sales and brand awareness.

LEGITIMATE BUSINESS SURROGATE ADVERTISEMENTS

McDowell’s malt whisky McDowell’s Soda/water Radico Khaitan’s 8 pm whisky Radico Khaitan’s water Hayward’s 5000 Beer Hayward’s water/soda Derby Special Derby Special Soda Bacardi Liquor Bacardi Blast CDs & Cassettes Bagpiper liquor Bagpipers soda and cassettes Kingfisher Beer Kingfisher bottled drinking water

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 26 Royal Challenger whisky Royal Challenger golf accessories & mineral water & cricket team White Mischief Liquor White Mischief holidays Smirnoff Vodka Smirnoff cassettes & CDs

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 won’t mind getting into any low cost surrogate products like CD’s cassettes, supplementary drinks - Soda, soft drinks as long as customers choose their brands and increases their profitability and market share.

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 27 Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 28 Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 29 Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 30 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

Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 31

TilakNagar Industries Radico Khaitan Ltd

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.

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Kailash Thadani, Tushar Belwal, Nitin Mittal, Shubhojit Ganguly, Page 33 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

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