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Alcoholic Beverages Segmentation Buying Behaviour 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 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 ............................................................................................. 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 Whisky, Rum, Beer, Wine, Gin, and Vodka. 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 Brandy 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 beers in India, the younger generation is also considering beer as an option to ‘hang-out’ with. The staid image of earlier generations’
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