Marketing communications in conditions of strict regulation of : case of the alcohol market

MASTER THESIS WITHIN: Business Administration

NUMBER OF CREDITS: 30

PROGRAMME OF STUDY: Business Administration

AUTHOR: Yulia Lunina

JÖNKÖPING August 2020

Master Thesis in Business Administration

Title: communications in conditions of strict regulation of advertising: case of the alcohol market)

Authors: Yulia Lunina

Tutor: Michał Zawadzki

Date: 2020-08-07

Key terms: Dark market, alcohol marketing, marketing communication tools, the AIDA

Abstract This master's thesis explores the impact of marketing communication tools on consumer behavior in the Russian alcohol market. Russia is a dark market. The dark market is a market where outdoor advertising is prohibited, as well as advertising on TV and radio. As such, communications with consumers in these markets are strongly regulated by the government. The study provides an overview of current trends in the alcohol market in the world and in Russia. The purpose of this study is to analyse Russian consumers' perceptions of marketing tools and the impact of these tools on the purchase of strong alcohol under the AIDA model. For this purpose, the study examines the legislation governing the Russian alcohol market. The paper provides a description and classification of channels and instruments used in communications with consumers in the dark market conditions. Further, the perception of these methods by Russian consumers under the AIDA model is considered. The study identified the most effective channels of communication for marketing companies. Moreover, the ethical aspect of promoting alcohol products was discussed. The survey results showed that Russian consumers are loyal to both alcohol advertising and the market in general, as well as to their own . These results can be used by companies to create marketing campaigns and plan their budgets.

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Table of Contents

1. Introduction ...... 1

1.1 Background ...... 1

1.2 Research problem and question ...... 2

1.3 Purpose ...... 3

1.4 Structure...... 4

2. Literature Review ...... 5

2.1 Channels of communication with the consumer ...... 5

2.2 The AIDA model ...... 7

2.3 Marketing tools on the alcohol market ...... 10

2.4 at alcohol market ...... 11

2.5 Ethical aspects of alcohol marketing ...... 12

3. Methodology ...... 15

3.1 Research Philosophy ...... 15

3.2 Method ...... 16

3.3 Data collection ...... 18

3.4 Data analysis ...... 18

4. Description of the research field ...... 20

4.1 Global trends in alcohol consumption ...... 20

4.2 Trends in alcohol consumption in Russia ...... 21

4.3 Legal regulation of alcohol advertising in Russia...... 23

5. Marketing communication in dark markets ...... 26

5.1 Marketing instruments for promoting alcoholic beverages ...... 26

5.2 Off-trade ...... 27

5.2.1 instruments ...... 28

5.2.2 Shelf-stoppers and other shelf decorations ...... 28

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5.2.3 Customized pallets ...... 28

5.2.4 Packaging (gift wrapping, special editions, new products, small size bottles) ...... 29

5.2.5 Collaboration with non-alcoholic brands ...... 30

5.2.6 Neck-hangers ...... 30

5.2.7 Multifacing ...... 31

5.2.8 Consultants ...... 31

5.2.9 Tastings ...... 31

5.2.10 Online ...... 31

5.3 On-trade ...... 32

5.3.1 Venue branding ...... 32

5.3.2 Multifacing ...... 33

5.3.3 Menu ...... 33

5.3.4 Pricing instruments ...... 33

5.3.5 Promo staff...... 33

5.3.6 Exclusive contracts with venues ...... 33

5.4 Event and online marketing ...... 34

5.4.1 CRM ...... 34

5.4.2 Influencers and ...... 35

5.4.3 Own events ...... 36

5.4.4 Event Sponsorship ...... 37

5.4.5 Collaborations with celebrities and other brands ...... 37

5.4.6 Bartenders and ambassadors ...... 38

6. Analysis of consumer interactions with marketing tools ...... 40

6.1 The link between communication channels and the purchase process...... 40

6.2 Off-trade channel ...... 42

6.3 On-trade channel ...... 44

6.4 Event and online channel...... 45

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6.5 Ethical aspect ...... 47

7. Discussion ...... 51

7.1 Key findings ...... 51

7.2 Limitations ...... 53

8. Conclusion ...... 55

9. Reference list ...... 56

Appendix 1...... 64

Appendix 2 ...... 69

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Figures

Figure 1 The AIDA and the 4Ps ...... 8

Figure 2 The growth drivers 2018 ...... 22

Figure 3 Influence of communication channels on the purchase process ...... 40

Figure 4 Influence of communication channels on the purchasing process (with knowledge of the brand) ...... 41

Figure 5 The influence of off-trade instruments on the buying process ...... 42

Figure 6 Influence of on-trade instruments on the buying process ...... 44

Figure 7 The impact of event and online channel tools on the purchasing process.... 46

Figure 8 Comparison of the attitude of groups of respondents to the current regulation of alcohol products promotion ...... 47

Figure 9 Rating of channels for stricter regulation of alcohol promotion ...... 48

Figure 10 Influence of marketing tools on the consumer ...... 49

Figure 11 Comparison of consumer groups' attitude towards a brand involved in ethical conflict ...... 50

Tables

Table 1 Classification of tools for communication with consumers on the ...... 26

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1. Introduction

______The purpose of this chapter is the presentation of the background of this research. Then the research questions and purpose of the study are presented. At the end the structure of the thesis is described.

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1.1 Background

Promotion of a product is a very important part of business. Marketing allows to introduce a brand to customers, build brand image and increase the interest of potential buyers (Keller, 1987). The consumers’ perception of brands strongly influences their purchasing decisions (Neslin & Blattberg, 1990). Many studies try to determine the impact of the promotion on the consumers’ buying process described by the AIDA model (awareness, interest, desire and action) (Stávková et al., 2008; Kucuk, 2017). Some authors claim that promotion plays a big role during the first stages of a consumers’ journey (Kucuk, 2017), however there also exists an opposite opinion. Stávková et al. (2008) state that customers enter the shop with already planned brand list and promotion can influence only the number of products. Therefore, the role of promotion is still significant topic for researches.

Alcohol markets are very diverse and also very fast developing. According to Nielsen report (2020), the consumption of alcohol in the world increased in 2019 and will continue growing. There are new products at markets, that respond to the trends towards healthy lifestyle, sustainability and small volumes of package for personal consumption.

The alcohol industry lives in a long-standing struggle with regulatory authorities. For many years governments of different countries have developed new restrictions and regulations for production and promotion of alcohol beverages. Therefore, companies have to invent new creative and original ways of promotion of alcohol production. The main purpose of alcohol marketing is to differentiate the brand from others, built strong relations with customer and create recognizable brand image (Jones & Morgan, 2015). Marketing campaigns are usually last for a long time and have significant budgets (Sargent, 2014). However, the alcohol is the case of numerous diseases and social problems (Hingson et al., 2005). Therefore, the ethical aspect of alcohol promotion has a big influence on used marketing tools and consumers’ attitude towards the alcohol marketing. The perception of ethics differs from country to 1

country. This leads to different regulations of alcohol promotions in different markets. Some governments are more loyal (e.g. Spain, Germany), while others have very strict regulations (e.g. Nordic countries, Russia). The last are called dark markets, since the outdoor, TV and radio promotion are prohibited. Due to strict regulations and its differences from one country to another, international companies have to adapt their campaigns to local markets and transfer their message by different tools.

There are several studies about consumer behavior on alcohol market (Lockshin et al., 1997; Brunner & Siegrist, 2011; Lockshin & Cohen, 2011; Anchor & Lacinova, 2015; Jashim et al., 2017). Consumers are usually divided in different segments and behave in accordance with their preconditions (Lockshin et al., 1997). The segmentation allows to divide consumers in groups according to their age, gender and drinking habits. Lockshin et al. (1997) define segments according to their demographic factors, however this method becomes more and more outdated during the time. Jashim et al. (2017) follow new trends in segmentation in their study. They claim that the patterns of behavior become more widespread among all age and gender groups. However, the individual habits and preferences have bigger influence on buying process. Therefore, they create segmentation according to people’s attitude towards alcohol, consumption behavior and personal interests. It should be also mentioned, that groups which were created through this approach still are skewed to similar age or gender characteristics.

There are also different occasions of consumption which can influence the decision of purchase (Anchor & Lacinova, 2015). The choice of the product depends on the purpose of the purchase. People may look for a gift, personal consumption or a drink for the group of friends. The aim of purchase defines the expectations of price, quality and taste of desired product. However, some basic factors such as price, brand and taste have a significant impact on decisions of every consumer. Though there is a large amount of research on consumer behavior on the alcohol market, little attention has been paid to marketing tools on the highly regulated markets (dark markets) and their impact on the buying process.

1.2 Research problem and question

It is very important for alcohol companies to communicate with consumers to differentiate brands (Jones & Morgan, 2015). Therefore, marketing pays very significant role in alcohol business and demands high costs (Sargent, 2014). However, in many countries the alcohol

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promotion is strictly regulated by government. In some countries the advertisement of alcohol is fully forbidden. Other markets, like Sweden or Russia, are strictly regulated by government. The markets where outdoor advertising is prohibited and promotion is strictly monitored by government are called dark markets among alcohol companies.

In conditions of the dark market companies are allowed to use reduced number of marketing tools to attract people but still make them exciting about brands and transfer the right message. In this study the marketing tools are used in the dark market (Russian example) is discussed.

Thus, the questions of this study are:

• What influence do these tools have on buying process (on the example of Russian consumers)? • What is ethical perception of alcohol promotion in Russia?

The following hypotheses will be tested in this paper:

1. Marketing price instruments (discounts, promotions) used in off-trade (shops) and on-trade (bars, nightclubs and restaurants) channels have the greatest impact on the buyer at the action (purchase) stage. 2. Online marketing tools (social media, online resources) are the most effective in the 1st stage (attracting attention to the brand). 3. Alcohol consumers in Russia are loyal to the advertising of alcoholic beverages and do not pay much attention to the ethical aspect.

1.3 Purpose

The purpose of this study is to explore the perception of Russian consumers of marketing tools and the influence of promotion on buying process within the AIDA model. The AIDA model is a model of consumer buying behavior. It claims that there are 4 stages of decision process: awareness, interest, desire and action (Kucuk, 2017). As it was discussed before, marketing tools affect different stages of buying process. Therefore, it is interesting to analyze the effectiveness and influence of marketing tools in conditions of the dark market.

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The topic of of alcohol is very delicate since the consumption of alcohol can have adverse consequences. Therefore, the ethical aspect of alcohol promotion is the burning issue.

On the other hand, the marketing of alcohol is necessary for producing companies. For example, there is a huge variety of brands, and as a result, competition for consumer attention in the Russian alcohol market. The fact that consumers are uneducated with alcoholic beverages and consume a very large proportion of vodka and homemade moonshine, tinctures, and others homemade beverages also plays big role in consumption of alcohol. Given the severe limitations of communication channels with consumers, marketing at beverage alcohol companies is a very complex and interesting process. It is developing both in marketing and in trade marketing, developing contracts with distributors, on-trade and off-trade points.

1.4 Structure

This work consists of 8 chapters. The purpose and the research queations are discussed in the first chapter. The second chapter is enlightened by consideration of already existing researches in the field of consumer behavior, models of purchase process and marketing tools. Methodology is described in chapter three. Chapter four examines the Russian alcohol market and its regulation. Chapter five describes the marketing tools used in the “dark market”. Chapter six examines the impact of communication marketing tools on consumer purchase and consumers' perceptions of the ethical side of alcohol advertising. The discussion of key findings and limitations of the study is presented in chapter seven. The chapter 8 is conclusion.

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2. Literature Review

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The purpose of this chapter is to provide the theoretical background to the marketing communication and marketing tools. In specific, the AIDA model is presented in this chapter. The specifics of alcohol marketing and its ethical aspects are also discussed.

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2.1 Channels of communication with the consumer

Advertising is an integral part of every person's daily life. Advertising currently has two main goals: to convince a buyer to buy a product, and to build long-term relationships and consumer loyalty (Wijaya, 2012). Moriarty et al. (2009) argue that advertising is a paid form of communication with a consumer that aims to convince them to buy a particular product. One important objective of advertising is to reach the widest possible audience in order to connect a particular seller with the right customers (target audience). Typically, the media and interactive media are used to provide information about a product (goods, services and ideas). Nowadays, advertising is aimed not only at informing consumers about the existence of the product, but also at persuading them to buy the advertised product. It uses entertainment, educational and inspiring tools (Wijaya, 2011). Therefore, advertising can be perceived from two interrelated perspectives: its economic role and its sociocultural role in communicating not only product information but also social values (Lane et al., 2011).

From a business perspective, advertising not only affects the quantity of a product or service sold, but also influences the consumer at various stages of the buying process (Seiler & Yao, 2017). The impact of advertising has a long-term effect (Jedidi et al., 1999). Thus, marketing tools not only stimulate the purchase at a given moment, but also allow to build a relationship with the buyer, which will increase the probability of buying a given brand in the future. According to Keller research (1987), as well as Mela et al. (1997), promotion and advertising influence consumers' perception of the brand image. This, in turn, affects the consumer's future choice of brand. It is very important for companies to understand consumer behavior and their motivation to choose and buy a certain brand (Nancy et al., 2009), because this knowledge allows them to stimulate buying processes and interact better with consumers. In this way, a company can create and experience for customers (Mackey et al., 2014).

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Consequently, marketing can not only increase the amount of product sold, but also convince consumers to interact with the brand and be involved in its activities. This, in turn, strengthens the link between the consumer and the brand.

Companies use many different tools and channels to interact with customers. Marketers create advertising and stimulate sales to attract customers, build relationships between consumers and brands, and influence the process of selecting and buying products (Neslin & Blattberg, 1990).

One of the keys and more popular sales channels in Russia is off-trade - selling goods in shops, grocery stores, kiosks or petrol stations. Goods are not used in the place where they were bought. The shop is a very important part of the consumer experience and can be used as a communication tool. At the beginning, the consumer determines the at which the purchase will be made (Srinivasan & Bodapati, 2006). The atmosphere of the store plays a significant role in consumer behavior because it is related to the psychology of the buyer (Spence et al., 2015). The more comfortable the customer feels in the store, the more favorable his experience will be, and the more goods will be purchased. The most common way to interact with customers are visual promotions. Beautiful design of stands and shelves, dynamic presentation - all these tools influence the choice of the buyer (Roggeveen et al., 2015). Stores are a convenient place to place visual advertising (e.g.: displays, pallets, branded shelves) (Roggevven & Grewal, 2016). The most common visual marketing tool is pricing (Mithun & Iqbal, 2018). Many consumers may be attracted by special offers, sales or discounted prices. Currently, another popular tool for attracting customers among retailers is the use of loyalty programs. This tool influences consumer satisfaction and attitudes towards stores (Magi, 2003).

A huge impact on the customer's attitude to the product is the acquisition of own experience, which is created by forming their own opinion after trying the product (Tereschenko K., 2018). For this purpose, large companies use tastings. They give the consumer the opportunity to independently verify the quality and taste qualities of the product of promotion. These tastings can include both tasting the goods in retail outlets and special events, which can be accessed only by invitation.

Another channel of interaction with consumers is on-trade channel. On-trade is selling goods in bars, restaurants, nightclubs and cafes. Beverages are consumed in the place where they

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were bought. Clubs, cafes, bars and restaurants are striking examples of on-trade channels. They are effective not only because of direct contact with the target audience and the ability to clearly target sites, but also in terms of the modern lifestyle of adult youth (Plotnitsina T.M., 2017). They are interested in social networks, synchronism and speed of processes, they do not let smartphones out of 10 their hands. This makes it possible to effectively use in communication additional privileges for consumers: for example, access to a branded terrace, the ability to charge a smartphone, etc., or offer access to tickets to interesting events at a special price (Plotnitsina T.M., 2017). It can also be concluded that online channels are increasingly used for marketing purposes. Companies use such tools as CRM databases, social media advertising, integration with bloggers and others (Kucuk, 2017). These tools target a younger audience and are informative and entertaining.

On the other hand, Kotler et al. (2010) argue that there is a tendency in marketing communication strategies to be less product oriented and more consumer oriented. Advertising has a moral and ethical responsibility to provide accurate information about the product and its social acceptability. The use of educational and inspirational tools does indeed reduce the power of the persuasion function, which still ranks first in the promotion of some companies. However, consumers are already saturated with advertising and treat it cynically, almost without perceiving it. The educational function allows companies to attach certain positive things and associations to a brand. The inspirational function plays a more diverse role. Today, many brands try to convey the right values and promote kindness, tolerance and humanity. Some promotions have conflicting content, which makes people discuss pressing issues and raise awareness of the problem. For example, the advertising of a Gucci sweater in 2018 was an occasion to discuss racism; the Reebook ad in 2019 had a great resonance in Russia and made people think about the issue of equality between men and women. Thus, companies must be aware of both the economic and social aspects of promotion and its consequences.

2.2 The AIDA model

The first idea of the AIDA model was introduced by American advertising advocate E. St. Elmo Lewis (Barry, 1987). Lewis (1903) outlined 3 principles of successful advertisement (to attract, to interest and to convince). However, the first published example of a general concept was an article by Frank Hutchinson Dukesmith in 1904. Duxmith's four steps were

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attention, interest, desire and conviction. The acronym didn't appear until 1921. It was suggested by Russell and presented the modern version of the AIDA model.

Nowadays, AIDA is a well-known model of consumer behavior. The AIDA divides consumer decision process in 4 stages: awareness, interest, desire and action (Kucuk, 2017). The essential elements of are known as “4Ps”: product, price, place and promotion (Kucuk, 2017). The relations between 4P model and the AIDA model are shown in figure 1.

Figure 1 The AIDA and the 4Ps

Source: Kucuk, 2017

Promotion plays a very important role in the first phase: attracting consumer attention. The product itself is also very important at the beginning of the purchase process. It must have an attractive packaging design and valuable features in order to be interesting to the customer. The price is moderately attractive for general purpose products, but at the first stage it is more important for particularly frequently purchased products. When a consumer is interested in a product, price also plays a very active role in controlling consumer wishes. Once the consumer has decided on a product, the location factor becomes important: that is, the point where the selected product is available for purchase. Therefore, after the consumer has passed the stage of interest and desire, where psychological aspects play a significant role in the decision-making process, and logistics begin to have a great influence on the buying process. At this point, companies may face the problem of not

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having the goods in stock when the goods are not available on the shelves of the retailer. In this case, consumers may postpone the purchase, switch to a competitor's product or try to find a desired product in another store. Consequently, there is a risk that sellers will lose customers and profit (Kucuk, 2017).

On the other hand, Mitsun and Iqbal (2018) found that advertising in stores does not affect the first 3 phases of the AIDA model. According to their findings, advertising in stores affects the volume of goods purchased. A buyer who has already decided to buy a certain brand is likely to buy more of this product. Stavkova et al. (2008) argue that the most important factor influencing the decision to buy on the food market is habits. The price, actions and discounts, quality and attractiveness of a product (its attributes and characteristics) also testify to a high degree of influence on buyer behavior. On the contrary, advertising, packaging and brand showed a low level of influence on consumers' decisions to choose a particular brand.

There are also improved versions of the AIDA model. For example, there is a modified AIDA model that consists of 5 steps: awareness, interest, convention, desire and action; or the AIDAS model (attention, interest, desire, action, satisfaction) (Barry & Howard, 1990). The AIDA model can also be implemented in today's online world. Thus, the AISDALSLove model includes awareness, interest, search, desire, action, likes/dislikes (dislikes), desire to share, love/hate (Wijaya, 2012). New social life has changed people's behavior, search for information, and trust in advertising (Cappo, 2003). For many companies, it is very important not only to attract consumers and convince them to buy a product, but also to build relationships with them and create loyalty.

The AIDA model in its traditional form can also be used for analysis. The analysis of digital marketing efficiency is based on various measures and conversion rates (SiteTuners.com, 2019). Thus, the level of awareness can be measured by visiting a web page or browsing a blogger's post on social networks, the number of clicks can reflect interest, while the desire can be presented by returning visitors or the relevant product research. Finally, in this case the actions are downloading, buying or registering for an event. The AIDA approach is more useful in digital marketing, because you can see the path of each consumer. This allows you to analyze the effectiveness and usability of each tool for users by using conversion rates between stages (SiteTuners.com, 2019).

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Despite the fact that the AIDA model is well known and widely used, it has limitations and shortcomings. AIDA is a hierarchical model. The main drawback of these models is the lack of evaluation of post-purchase interactions such as satisfaction, consumption, quality of use and other behavioral intentions such as recommendations (Egan, J., 2015). Moreover, the AIDA model does not take into account the relationship between the stages. Buyer behavior is not always linear. Some purchases are made because of emotional impulse, which cannot be reflected in AIDA model (Egan, J., 2015). When working with the AIDA model, it is important to understand that this phase model cannot reflect all individual aspects of the buying process and the impact of advertising. However, it provides a basic understanding of consumer behavior and how people interact with advertising.

2.3 Marketing tools on the alcohol market

Companies operating on the alcohol market are largely focused on market trends and consumer behavior. They are less dependent on technological advances and production technologies because traditions and consumer loyalty play a more important role in this industry (Jones & Morgan, 2015). Brands, packaging innovations, and play an important role in the alcohol business. To be competitive, companies must pay attention to factors such as distribution, brand and image, and (Jones & Morgan, 2015). The alcohol industry is characterized by high advertising costs (Sargent, 2014). The goal of promoting alcohol is not only to increase sales, prevent new players from entering the market, and win price competition. Alcohol companies are also trying to educate consumers by providing information about the history of beverages, how drinks are consumed, and the differences between them (Jones & Morgan, 2015).

As mentioned earlier, alcohol companies are doing everything possible to highlight their brand in the market. Marketing campaigns differ in some aspects of their marketing strategies: topics, key channels of communication, and the amount spent on advertising. Advertising campaigns have a certain general theme, which can be seen in different channels. Moreover, some brands create collaborations with celebrities from sports, music, other celebrities and the media (Primack et al., 2014). Collaborations are also widely used to collaborate with other major fashion brands, such as clothing brands, car brands or soft drinks (McClureet et al., 2009). In some countries, it is possible to conduct

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campaigns in traditional media such as , radio or (Federal Trade Commission, 2014). Nowadays, however, social media are more actively involved in marketing campaigns and attract more attention from marketers (Sargent, 2014). Online tools and social media are mainly used to interact with a younger target audience (de Bruijn et al., 2012). These channels attract new consumers, educate youth, and build relationships between brands and young consumers from the first steps in alcohol consumption (Atkinson et al., 2017).

It should be noted that each country has its own rules and laws governing the marketing of alcohol products. International alcohol companies are therefore forced to adapt their marketing campaigns to local markets.

The term "Dark Market" will be used in this study. The Dark Market is a market with strong government regulation of advertising. The word "dark" means that product advertising should be unobtrusive, unnoticeable, almost invisible. Therefore, any outdoor advertising, as well as advertising on television and radio, is prohibited. Moreover, all marketing campaigns should target a specific audience that is older than a certain age (e.g. older than 18 years in Russia or older than 25 years in Sweden). Consequently, companies are very limited in their tools for communicating with the consumer. The term "Dark Market" is widely used between alcohol and tobacco companies.

2.4 Consumer behaviour at alcohol market

The alcohol market is very diverse. The alcohol market has several key segments: low- alcoholic beverages (beer, beer drinks, cocktails), wines, and champagne and spirits (Nielsen, 2019). Thus, consumer behavior varies both between these segments and within each segment. The behavior of consumers who buy beer is very different from that of consumers who buy wine or vodka. Nevertheless, there are a number of studies on consumer behavior in wine and beer markets (Brunner & Siegrist, 2011; Anchor & Lacinova, 2015; Jashim et al., 2017). Consumers are usually divided into several segments by selected criteria. Most often these are demographic indicators: sex, age. However, segments can also be distinguished according to frequency of consumption, habits and hobbies, attitudes towards life and beverages and others. Each segment then has its own marketing tools and strategies, depending on consumer preferences and the characteristics of the segment itself (Lockshin et al., 1997). In addition to the consumer segments, there are also different cases of alcohol

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consumption (Anchor & Lacinova, 2015). These include individual consumption, consumption with friends, romance atmosphere, holidays, and so on.

There are many factors that can influence a consumer's decision to buy a certain brand: taste, price, loyalty to the brand, special offer, etc. (Anchor & Lacinova, 2015; Lockshin & Cohen, 2011). The order and importance of these factors depend on the consumer segment, the market, and the country in question. According to a study conducted by company A (Whiskey Shopper, 2018), the main factor influencing the purchase of spirits in Russia is price. We consider the price-quality or price-volume ratio. Consumers are also unlikely to move from one category to another. Usually, when they enter a store, they are referring to the planned brand. However, if there is no planned brand, they switch to another volume first and then to another brand. Therefore, we can say that in the market for spirits, is very strong.

The alcohol market is heavily influenced by seasonal demand. Thus, in summer there is a high demand for drinks and cocktails with low alcohol content, and in cold seasons the number of purchases of spirits is increasing. In Sweden, for example, demand for locally produced glögg (or mulled wine) drinks increases during the Christmas holidays. In Russia, the New Year is a very important holiday. That's why many stores and distributors face the problem of product shortages in December in Russia. This leads to great losses for companies and disappointments for consumers.

2.5 Ethical aspects of alcohol marketing

The issue of ethics is very relevant when considering the marketing of alcohol. Thousands of people die each year from health problems caused by alcohol or from accidents caused by alcohol intoxication (Murray & Lopez, 2013). Therefore, companies producing and marketing alcohol must understand their social responsibility. Marketing and alcohol production can cause a lot of discussion and disagreement, and it is important to understand how players on the alcohol market position their vision of the problem.

The first problem caused by alcohol consumption is the consumption of alcohol among adolescents (minors). According to the American study "Mothers Against Drunk Driving" (MADD, 2016), children who start drinking at an early age are 7 times more likely to become alcoholics. Alcohol consumption by adolescents causes approximately 6,000 deaths per year. Although official marketing campaigns target people over a certain age (25+ in Sweden, 18+ 12

in Russia), effective advertising campaigns for young people affect not only the target audience but also minors (Sargent, 2014). Many studies have suggested that alcohol promotion is likely to contribute to exacerbating alcohol consumption among adolescents (Hastings et al., 2005; Anderson et al., 2009; Smith and Foxcroft, 2009). Adolescents are also more receptive to advertising, what is making alcohol advertising even more dangerous for this group of people (Hastings et al., 2005).

Another important problem related to alcohol consumption is alcoholism. Alcoholism leads to health problems and even death. Moreover, this disease also has a negative impact on other people's well-being. Thus, family members and friends of a person, both financially and morally, can suffer from alcoholism of a loved one (Hingson et al., 2005).

Given the above, the promotion of alcoholic beverages has an adverse effect on consumers' lives. On the other hand, pricing is the only element of the marketing mix that makes a profit to companies. To ensure fair distribution in the market, the company must oppose unethical pricing, thereby ensuring that everyone is treated equally and equally. From an ethical point of view, the price should be equivalent to or in line with the interests of the buyers (Atkeson & Kehoe, 2004).

On the other hand, alcohol consumption is everyone's personal choice. Nevertheless, companies have a corporate and social responsibility to all stakeholders. Therefore, companies need to take action to reduce harm to consumers' health and well-being.

Many companies create their own codes of ethics for alcohol advertising. Examples of such codes are the codes of Pernod Ricard, Efes or Carlsberg. These documents focus on social responsibility and moderate alcohol consumption. In general, these documents describe the marketing communications policy that a company can use in the marketplace. Under these codes, commercial communications should not encourage or condone excessive or irresponsible drinking. Companies do not advertise alcohol consumption among children, nor do they inform people about the consequences and risks of alcohol consumption. They are responsible for providing correct and relevant information about alcoholic beverages. In addition, the Advertising Act prohibits the use of links between alcohol consumption and success, sexual attraction, disability, pregnancy and other aspects of life in marketing messages. In addition, many alcohol companies participate in seminars and presentations about the dangers of drinking. They support this movement and try to raise awareness of the

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possible consequences of alcohol consumption while driving. Also, commercial communications should not be associated with gross, aggressive, illegal, dangerous or antisocial behavior. Thus, it can be said that alcohol companies are aware of their responsibility and try to promote alcohol in the most ethical way.

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3. Methodology

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The purpose of this chapter is to describe the methodology of a research. There will be provided arguments in favor of the chosen methodology, the method of data collection and data analysis is described.

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3.1 Research Philosophy

When defining the research method, it is important to understand the philosophy of research. The understanding of research philosophy allows to recognize which design of research will work and be more effective in current study. From the ontology perspective, there are four different approaches: realism, internal realism, relativism and nominalism (Easterby-Smith et al., 2015). Considering that this study is about people's perception of advertising, internal realism or relativism are the approaches that should be chosen for research design creation. Internal realism stands for the independence of reality; however, the observer can only gather indirect evidence of phenomena (Easterby-Smith et al., 2015). In terms of relativism, there is no single reality and its understanding depends on the perception of the individual. Consequently, the observations will be more credible if made from different perspectives (Easterby-Smith et al., 2015). Therefore, while exploring the consumers’ perception of marketing tools of alcohol, different points of view should be regarded. This allows to look at the problem from the different angels and reveal the general trend.

Epistemology has many different vies and paradigms. Some of them has contrasting view, for example positivism and social constructionism. Positivism claims that the social world exists externally, hence it can be measured through the objective methods (Easterby-Smith et al., 2015). On contrary, the key idea of social constructivism that “the reality” is only defined by people’s perception, influenced by their experience (Easterby-Smith et al., 2015).

The advertising perception is different for every person. People like different things and pay attention to different factors. However, there exists the common patterns of consumer behavior. Since the purpose of this study is to analyze the perception of Russian consumers of marketing tools and analyze their influence on buying process, the positivism approach

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has been chosen. This approach allows to identify the casual consumers’ attitude towards promotion tools and their response to them. Therefore, the common trends in consumer behavior were investigated.

Considering that the reality cannot be accessed directly, the quantitative survey of big sample was conducted. In general, the aim of quantitative research is to test a theory or collect a representative data about phenomenon or population. Therefore, according to the purpose of this study, the quantitative approach is used to compile data about advertising perception and response in Russia. Russian consumers were asked about their perception of promotion and their reaction to this. This allows to analyze big number of responders in a short time and measure the links between tools and purchasing stages. The disadvantage of this method is its inflexibility, since it is not possible to ask additional questions after conducting a survey.

3.2 Method

The first part of this research focuses on the definition and classification of marketing instruments that are used in the Russian alcohol market. For this purpose, a preliminary qualitative study was conducted. An individual interview approach has been chosen for this part of this paper. Individual interviews are an effective method of studying a person's thought processes, his or her reaction to various stimuli and motivation to act. The interviews can be either structured, semi-structured or non-structured (Unger & Chandler, 2012). The type of an interview depends on openness of questions. – depending on the chosen openness of questions (Armbruster & Knutson, 2013). A semi-structured interview is an interview approach that combines predetermined questions with more open-ended questions and is based on the choice of any of these qualitative or quantitative data (Unger & Chandler, 2012). A hypothetical interview scenario is prepared for the interview, but this may vary depending on the course of the conversation. This approach allows for better disclosure of the interviewee, adapting the topic of the interview to the goal, and obtaining the necessary insight (Toye et al., 2016). Individual interviews also have their disadvantages. In this way, the interviewer can unconsciously influence the respondent's answers by asking specific questions. The interviewer can force the respondent's desired answer. Another disadvantage is uncertainty about the integrity of the interviewee. A person may be shy about telling the truth or giving the answer they think is expected (Unger & Chandler, 2012).

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The first part of this study is dedicated to discussion of marketing tools used in the dark market. For this purpose, the alcohol market in Russia was analyzed. The following chapters contains information about the structure of consumption and analysis of regulation of Russian market.

Russia is a vivid example of the "dark market". In this market, any outdoor advertising, advertising on television and radio is prohibited. Other means of communication with the consumer are also regulated by Roskomnadzor, FAS and other government services. At first, the trends and regulations of dark market were analyzed. Secondly, to correctly identify the marketing communication tools used in the alcohol market, an individual interview was conducted with a representative of Company A, a major player in the Russian and international alcohol market. The interviewee is a brand manager of a well-known brand of whiskey. During the interview, marketing tools used for marketing campaigns were identified and discussed. The guide for this interview is presented in Appendix 2.

The second part of the study is devoted to the impact of marketing tools on consumer behavior. Since this is a very wide topic, it has been decided to narrow it down to Russian consumers. Moreover, as it has already been said, the alcohol market is very diverse. Promotion and consumer behavior are very different in these 3 segments (beer, wine and strong liquor). Considering these reasons, the strong liquor market was analyzed. This market is not very big in volumes what makes the sample more representative. For this part the qualitative and quantitative approaches were used. The consumers have filled a survey about their purchase behavior (Appendix 1).

Quantitative research allows to collect and process a lot of information about different population groups, analyze them from different angles, and identify patterns and trends. Considering that the purpose of the study is to understand the perception of Russian of alcohol promotion, the analysis of a big amount of data is necessary. This makes the study trustful and representative. A questionnaire has been developed to correlate advertising methods with the stages of the AIDA model. It consists of 5 parts:

• Demography screening • Off-trade marketing • On-trade marketing

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• Event and Online Marketing • Ethical perception

The full questionnaire for quantitative survey is presented in Appendix 1.

3.3 Data collection

It is very important for the research to choose a sample correctly. If a sample is not representative, the results may be skewed, biased or inconsistent. These characteristics may be caused by too similar study participants. To avoid this, quotas should be set for different demographic groups depending on the purpose of the study (Toye et al., 2016). For a wide audience, defining group characteristics is an important factor. This can be demographics as well as consumer behavior and needs (Easterby-Smith et al., 2015). Since this study examines consumer behavior on the alcohol market, groups may be divided in terms of demographic factors as well as frequency of alcohol consumption.

To analyze the interaction and reaction of consumers to marketing tools in the dark market, a survey was conducted among consumers of spirits. The sample comprised 210 people: 143 women and 67 men aged 18 years and over. The questionnaire has been made in Google Forms and spread through the social media. Therefore, all answers have been collected in one system and protected by Google privacy policies.

3.4 Data analysis

The responses from Google questionnaire were downloaded as an exel file. After it was uploaded to SPSS program. Using this software, the significant differences between groups were analyzed.

For the analysis, the respondents were divided into 2 groups. The first group: people who drink spirits once a month and more often; the second group: people who drink alcohol rarely (once in 3 months or less). The first group comprises 62% of the sample (130 people) and the second 38% (80 people). Based on the respondents' answers, a comparison was made of the reaction of alcohol consumers and seldom drinkers to alcohol advertising. The survey was divided into four parts (excluding demographic screening) : off-trade, on-trade, events and online, and ethical aspects. The structure and questions of the survey are presented in Appendix 1. The survey asked respondents to choose how certain tools influence their

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buying process: attract attention, arouse interest, arouse desire to buy a product, or provide an incentive to buy. Also, some questions included the answer choice: "I only study the offer if I already know the brand". This answer was counted as additional interest.

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4. Description of the research field

______

The purpose of this chapter is to analyze the alcohol market in Russia. The world trends and local trends of alcohol consumption is discussed and overview of market is presented. The history of alcohol promotion regulations in Russia is discussed in this chapter.

______

4.1 Global trends in alcohol consumption

According to the Nielsen study (2020), global alcohol consumption is at a growth stage. Despite the current popular trend towards a healthy lifestyle, people still consume alcoholic beverages. However, changes in consumption of categories and growth drivers are inevitable. Because of the trend towards a healthier lifestyle, consumers prefer alcohol with lower alcohol content (alcohol by volume - ABV), alternative drinks with low sugar and carbohydrate content, as well as low-calorie beverages and non-alcoholic Kraft beer (Nielsen, 2020). Whisky, tequila and cognac categories will show the greatest growth in the alcoholic beverage segment. According to Nielsen (2020), the beer segment will see growth in flavored beverages, while the higher alcoholic beverages segment will see growth in drinks with healthier ingredients and innovations in production processes. Wine consumption will also increase due to new packaging formats, wine-based cocktails and wine biodynamics (Nielsen, 2020). In conclusion, the alcohol industry has a rapid growth and complex structure. Companies are creating new products in line with consumer trends and desires. In addition, they are developing and inventing new ways of communicating that meet the restrictions on advertising.

In Russia, alcoholic products are food products produced using ethyl alcohol derived from food raw materials with an ethyl alcohol content of more than 1.5 vol. % of the finished product. Alcoholic products include drinking ethyl alcohol, vodka, liqueur, cognac, brandy, Calvados, whisky, wine drinks, low-alcohol products, grape and fruit wines and other food products with ethyl alcohol content of more than 1.5 vol. % of alcohol production (Eriviashvili et al., 2007). The alcohol market can be divided into 3 main parts: beer and drinks with a low alcohol content, champagne and wines, and spirits (Nielsen, 2020).

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Different segments of the market are regulated by different regulations. The most regulated segment is the strong alcoholic beverage market.

4.2 Trends in alcohol consumption in Russia

The alcohol industry, according to Nielsen (2020), accounts for one-fifth of the FMCG market in Russia, which represents a significant share of household consumption. This segment is very conservative in many ways, but currently it is subject to significant changes. The Russian alcohol market has undergone tremendous changes in recent years, and most of these changes are related to the weakening of the country's policy towards alcohol market participants. The reasons for the tight control over the alcohol sector are the huge share of illegal products and the fight against excessive alcohol consumption. Today, the government's policy is to reduce the amount of alcohol consumed. Moreover, the behavior of Russian consumers has also changed. They are more open to exploring new beverages and alcoholic beverages and are trying new formats, categories, and tastes (Nielsen, 2020). The average price per liter of alcohol rose slightly in 2019, but this is largely due to changes in consumption patterns. Buyers are increasingly trying new beverage categories, which tend to be more expensive. And this trend does not bypass even the largest segment of the alcohol market, beer, where price increases are mainly due to increased demand for imported beer that is unfiltered and produced by small players.

The Russian alcohol market is usually divided into 4 segments: strong alcoholic products except for vodka, vodka, wine and champagne, beer and drinks with low ABV content. The largest segment is beer and drinks with low ABV content. In 2018 its market share was 82.5% by volume (Nielsen, 2019). Second place went to vodka: 11% of volumes. Wine and spirits occupied only 6.5% of the market by volume. Alcohol consumption in Russia is on the rise. In 2018, total growth was 5.5%. The main drivers were champagne, alcoholic beverages and gin. More detailed statistics is shown in Fig. 2.

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Figure 2 The growth drivers 2018

In Russia, alcoholic beverages can be sold at any point of sale that has a license for sale. The legal age for buying alcohol is 18 years both in off-trade and on-trade establishments. There are several different types of outlets where you can buy alcoholic beverages: wholesale stores (METRO), hypermarkets, supermarkets, superettes.

Wholesale retailers are represented by the METRO network in Russia. It is a shop for small wholesale trade (Metro-cc.ru). This retailer offers some of the lowest prices in the Russian market. In addition, in 2019 METRO launched a personal program for individuals: anyone can get a METRO card and become a member of the METRO network. Thus, METRO network is one of the most important off-trade channels for alcohol sales.

Hypermarkets, supermarkets and superettes are regular retail stores. They differ in size of shops and wide choice of goods.

Hypermarkets are the biggest stores. They have a sales area of more than 4000 sq.m., wide and diverse assortment. Such shops are usually located in a place with busy traffic, with a large car park, with a relatively small area of utility rooms (GOST R 51773-2009). Hypermarkets are also characterized by a low level of service, as a large area has a small

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number of sales assistants. Thus, buyers independently search for goods, and also experience difficulties if they need to ask for help.

Supermarkets are shops with retail area from 600 sq.m. to 5000 sq.m. The shop has quite a wide range of goods, located in a place with a busy pedestrian and vehicular traffic (GOST R 51773-2009). The main differences from the hypermarket are: a smaller share of non-food products than in the hypermarket, a higher markup, a higher level of service, a smaller amount of the average check.

Superettes are small shops. This group is also divided into several parts. The first group: mini-markets and convenience stores. These shops have a small commercial area (40-80 sq.m.) and a narrow assortment (GOST R 51773-2009). The second group: specialized shops and boutiques are shops with the trading area from 18 sq.m. to 200 sq.m. which have wide assortment of one category (GOST R 51773- 2009). In boutiques there are more luxury goods and a high range of rare goods.

Nowadays, the popularity of hypermarkets in Russia has greatly decreased (Nielsen, 2019). Previously people preferred to go to hypermarkets every weekend and buy food until the end of the week. However, consumer behavior has changed. There is a growing trend in Russia to go to supermarkets or superstores every 2-3 days instead of spending hours in hypermarkets on weekends. As a consequence, supermarkets and superettes are the main drivers of alcohol sales growth in 2018 (Nielsen, 2019).

4.3 Legal regulation of alcohol advertising in Russia

For the first time in Russia, television advertising of alcohol products was legally restricted on July 18, 1995, when the first version of the federal law "On Advertising" came into force. It was prohibited to advertise alcoholic beverages on television and radio from 7 a.m. to 10 p.m. local time, and to show these commercials in programs for minors. Restrictions were also imposed on the content of the commercials: in particular, they could not criticize a sober lifestyle and create an image of alcohol contributing to personal or sports success. On 1 January 1996, article 33 of the Act came into force, completely prohibiting television advertising of strong alcohol, but many alcohol producers continued to advertise brands rather than their products on television until 1997-1998. This practice was discontinued after numerous legal proceedings (TASS.ru, 2014).

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On September 5, 2004, amendments to the Law "On Advertising" limited advertising of beer and drinks based on it: their advertising on TV was allowed only from 10 p.m. to 7 a.m., it was prohibited to use images of people and animals in advertising spots. Subsequently, additional restrictions were imposed on the content of television commercials for beer products (TASS.ru, 2014).

The new law "On Advertising" of March 13, 2006 banned the advertising of alcoholic products on the radio. On July 14, 2011 Russian President Dmitry Medvedev signed a law equating beer with other alcoholic beverages. On July 23, 2012 a ban on beer advertising on television and radio was introduced.

On 21 July 2014, amendments to the Law on Advertising temporarily, until 31 December 2018, made it possible to advertise beer during TV broadcasts of sports competitions. This was done at the request of the International Football Federation in connection with the 2018 World Cup in Russia (TASS.ru, 2014).

On December 31, 2014, Russian President Vladimir Putin signed a law authorizing television and radio advertisements of wines (including champagne) produced in Russia from grapes grown on its territory. This is reported on the official website of the Kremlin. Such advertising is allowed from 23 to 7 local time on TV and radio programs, except live or on recordings of children's and youth sports competitions (TASS.ru, 2014).

The Russian government is actively fighting against alcohol consumption in Russia. In this regard, the State Duma often considers new restrictions in alcohol advertising. In particular, the following restrictions have recently been proposed.

In 2017, a restriction on the production and sale of beer in plastic containers exceeding 1.5 liters came into effect (dp.ru, 2017). An explanatory note to the bill notes that the cheapness of such packaging contributes to the availability of alcohol to the population, and its volume leads to increased alcohol consumption. In July 2017, the Ministry of Health suggested limiting hidden advertising of alcohol in movies, TV programs, and printed materials. In particular, it is proposed to abandon imitation products where the products displayed are not alcoholic but are associated with it, and to ban the placement of products (dp.ru, 2017). References to the quality of beverages are also subject to restrictions. However, this law has not been passed.

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Legislative restrictions apply to two areas: "implementation" and "promotion". The Federal Service for Regulation of the Alcohol Market (Rosalkogolregulirovanie) is a federal body of executive power, which carries out functions on development and implementation of state policy and normative-legal regulation in the sphere of production and turnover of ethyl alcohol, alcoholic and alcohol-containing products, as well as functions on control over production and turnover of ethyl alcohol, alcoholic and alcohol-containing products, supervision and rendering services in this sphere (Snegireva, 2017).

In addition, legislative aspects and rules have been developed, which set out the basic requirements for the production process that ensures the quality and safety of products. At the same time, modern Russian rules of alcohol production are becoming increasingly close to the requirements of the international legal framework (Rumyantseva, 2017).

Legislative restrictions have been introduced by the Federal Law "On State Regulation of Production and Turnover", which prohibits retail outlets from selling alcoholic beverages between 23 and 8 o'clock. In addition, a ban has been introduced on the sale of beer products in kiosks and markets. Alcohol sales of up to 16.5% may be made only in the restaurant business, as well as in shops. Drinking alcohol in public places may by law be subject to fines by the offender.

Legislative restrictions on the promotion of alcoholic beverages are reflected in the federal law "On Advertising". The Federal Advertising Act states that alcohol advertising shall not contain statements that the consumption of alcoholic beverages is essential to public recognition, professional, sporting or personal success, or that it promotes physical or emotional well-being. All alcoholic beverage advertising should contain a warning text.

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5. Marketing communication in dark markets

______

The purpose of this chapter is to introduce the marketing tool which are allowed to use in the conditions of dark markets. The tools are divided in 3 main groups: off-trade, on-trade and marketing.

______

5.1 Marketing instruments for promoting alcoholic beverages

The first part of this research focuses on the definition and classification of marketing instruments that are used in the Russian alcohol market. Russian market is a vivid example of a dark market. The outdoor, TV and radio promotion of strong liquor is prohibited. The following marketing tools were presented and discussed during the interview with a representative of alcohol company A in Russia. After discussion the classification of tools where made.

Table 1 Classification of tools for communication with consumers on the alcohol market

Trade Marketing Event and Online Marketing Off-trade On-trade

Merchandising Shelf-stoppers or other Venue branding

shelf decorations Multifacing Customized pallets Menu

Packaging Promo staff

Collaboration with Exclusive contracts nonalcoholic brands with venues Neck-hangers

Multifacing

Sales Consultants

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Online Retail

Pricing instruments Pricing instruments

Sales Incentives Tastings Tastings

Chat-bot Promo staff

Influencers and social media

Own events

PR, image Collaboration with Events creation nonalcoholic brands Sponsorship

Collaborations with celebrities and other brands

CRM Advertising Influencers and social media

Bartenders and brand Special events ambassadors Meetings with bloggers

5.2 Off-trade

The off-trade channel occupies a significant share in the trade marketing budget. Since 70 percent of Russian alcohol consumption is off-trade (according to Company A research), this channel requires a lot of attention and investment. It should also be noted that in Russia, alcohol can be sold anywhere with a license to sell. Therefore, off-trade establishments have a great influence on consumer behavior and are an important point of contact. This channel mainly uses tools that influence the interest of the buyer and his desire to buy the goods, and

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can also motivate action. Due to the seasonality of alcohol demand, different brands are activated at different times of the year, depending on the frequency of consumption. There are several tools that can be used in off-trade establishments.

5.2.1 Pricing instruments

This is one of the most widely used tools in the off-trade channel. Usually, this instrument is represented by a price reduction, 1+1 shares or a limited product offer. According to Company A research, Russian consumers are very sensitive to the price of the product. Therefore, this instrument is perceived as one of the most effective. However, according to a study by Nielsen (2019), the alcohol market in Russia is highly prone to discounts. Buyers are so accustomed to looking for favorable price offers that producers are forced to reduce the price or increase the depth of the discount. This has a negative impact on profitability of sales.

Superettes and the METRO network are known for their low prices. Therefore, they become the main stores using this tool, which leads to high sales volumes.

5.2.2 Shelf-stoppers and other shelf decorations

Shelf-stoppers are distinguished objects attached to or on a shelf, which separates the brand from the rest of the category. Shelf-stoppers and other shelf decorations are traditional visual marketing tools.

The main purpose of this tool is to draw consumers' attention to the brand. These objects, in addition to the image of the brand or other relevant images, may also contain information about a special offer, limited offer or information about the action (gift giving, party announcement, etc.). Shelf decoration is usually used in large stores to make the brand more visible.

5.2.3 Customized pallets

Pallet is a construction intended for a lining of the goods. This tool is used to attract the attention of customers, because it is concentrated on a separate brand. This tool is used more often in discounter stores (METRO, hypermarkets), as it saves space in the sales area and 28

distinguishes the brand among a wide range of other products. Separate pallets are also used during promotions and increase the share of impulse purchases.

Companies also use this tool to convey the main message of the marketing campaign, as pallets can be made in any form and contain any decorations that conform to the current advertising regulations. However, it is quite expensive to create separate pallets for each campaign because pallets are an expensive tool that can be used for a long period of time.

5.2.4 Packaging (gift wrapping, special editions, new products, small size bottles)

Packaging is an important part of the product and plays a big role in marketing. It not only contains important information for the customer, but also determines the attractiveness of the product (Kucuk, 2017). A company can change the brand packaging to refresh the look of a product, attract a new audience or as part of a campaign.

Gift wrapping - packages containing the product itself and a gift. As a rule, in the alcohol industry such gifts are glasses, flasks and the like. Such gift wrapping stimulates the buyer to buy goods for a gift, but also stimulates his desire to pamper himself.

Special editions - packages or products created in collaboration with an artist, artist or event. For example, the Spanish-Argentinean street artist Philippe Panton created exclusive packages for Ballantine's Finest and Hennessy brands. Armenian cognac Ararat has released a product created jointly with Charles Aznavour - French chansonnier, actor, poet, writer and composer of Armenian origin. Aznavour personally selected the alcohols for the future cognac and participated in the creation of the packaging for the limited-edition line. Limited product offer and beautiful unusual packages are also aimed at increasing consumer interest, his desire to buy this product as a gift or to add to the collection of exclusive bottles (if available).

New products are a tool aimed at attracting a new audience and expanding the brand line. As there is now a trend among consumers to discover new products and experiment with taste, alcohol companies are beginning to expand their product lines to maintain interest in their brands. On the other hand, there is competition for consumers on the market. Therefore, if the lineup is expanded by one brand, its competitor is also likely to take measures to expand its audience. For example, in 2018, Gordon's Pink berry gin appeared on the Russian market. Next year, the strawberry gin Beefeater Pink will be

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released. Low (for this gin) alcohol content, strawberry taste and pink color were supposed to make it attractive for girls. The additional flavors of spirits also stimulate the creation of new cocktails for bartenders and on-trade establishments.

According to a study by Nielsen (2019), the format of small volume bottles is gaining popularity on the Russian market. This format is suitable for people who want to buy goods for personal consumption, but do not want to spend money on large bottles, which cannot be consumed at once. This format first appeared among brandies, but soon spread to other categories such as vodka, whiskey, wine and others. Such bottles are most commonly found in supersets (convenience stores and mini-markets), as these stores are the place to buy goods every day.

5.2.5 Collaboration with non-alcoholic brands

Collaboration with non-alcoholic brands such as beverages or food products is a tool for promoting not only alcoholic but also non-alcoholic brands. Such packages are already a ready-made solution for creating a home mix/shake drink or can be used as a gift. This tool is also used to present a new product to consumers. For example, in 2019 the Bacardi Martini company introduced a new product: Martini Fiero. Among other promotional tools, there was launched a collaboration with the brand Schweppes. These products were sold in joint packaging at a special price. This stimulated the buyer not only to buy both products at a good price, but also to try a new mix and get acquainted with a new brand or type of brand.

5.2.6 Neck-hangers

Neck-hangers are additional objects which are put on the "neck" of the bottle. These objects may be a label with additional information (e.g. cocktail recipes, draw information or an upcoming party). They may also be a decorative part that simply serves as an ornament to the bottle. This tool aims not only to draw attention to the brand, but also to communicate with the consumer. This communication can have educational or entertainment purposes. In this way the neck-hanger can contain information about the history and use of the product. Moreover, this information cannot be applied to the packaging.

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5.2.7 Multifacing

Multifacing is a tool for laying out goods on the shelves in stores, a traditional tool of merchandising. It is assumed that the higher the percentage of the shelf is occupied by the brand, the more likely it is to buy this product (Kucuk, 2017). This tool is especially often used in Metro or hypermarkets, as there is a large selection of goods, but also a lot of space on the shelves. Thus, the task of each sales representative is to increase the number of bottles presented on the shelf.

5.2.8 Sales Consultants

Sales consultants are people who help you decide on the choice of goods. Some alcoholic companies invest in the staff of the store. This makes consultants to recommend brands of this particular company. Consultants in the METRO network are especially effective, as this network is characterized by high sales volume and low prices. Taking into account the seasonality of demand for alcohol, the peak of sales and efficiency of sales consultants is on New Year holidays. At this time, it is especially important to have a representative at the point of sale, as there is an increase in demand for alcohol products for personal consumption or buying as a gift

5.2.9 Tastings

Tastings are a way of presenting the product to consumers. However, this tool has some limitations as consumers must be over 18 y.o. and the venue must have a license for alcohol sale. On the other hand, tasting the product creates experience for the consumer. If the person was not familiar with the brand, after consumption he or she will start to pay attention to the presented brand or, on the contrary, in case of unsuccessful experience, will be sure that it is the product they will not buy.

5.2.10 Online Retail

Despite the fact that online sale of alcohol products is officially prohibited, this channel is also actively developing. Many alcohol shops have websites that contain information about alcoholic beverages (Yandex.Market, Winestyle, Red and White), it is possible to compare prices and quality of goods, as well as make a preorder. In the latter case, the buyer reserves a bottle in a certain store, which can then be picked up personally. In this case, payment is

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made at the venue (at the point of sale). These services are convenient for consumers because they may contain additional information about the product, which may also affect the decisions of the consumer. For example, if the customer does not know which brand to choose, he or she may pay attention to the country of production, the shades of taste that are present in the product, or focus on the price of the product. Moreover, the government is considering the legalization of online sale of alcoholic beverages. However, the decision to pass it is often postponed due to complaints and requests from the Ministry of Health.

5.3 On-trade

On-trade consumption of strong alcoholic beverages accounts for 30% of total consumption. Such a small percentage of consumption in bars, nightclubs and restaurants may be associated with low incomes of the Russian population. However, this channel is an important point of contact between the buyer and the brand, as it is possible to create a unique experience of consumption, which will strengthen relationships and possibly brand loyalty. Moreover, it is also the place where direct consumption of alcohol products takes place. Thus, it uses tools that not only influence the consumer's knowledge and desire, but also motivate them to buy the product.

5.3.1 Venue branding

Branding is a visual marketing tool. Brand name and logo images can be used to decorate on-trade venues. Branding can be present on signboards, mats for bar racks, pillows, blankets, glasses, special machines for making cocktails etc. Uniform of staff can also be branded. Special branded photo zones and points with entertainment can be created in on- trade venues. Thus, for example, in Moscow bar Chesterfield the attraction was installed by vodka brand Husky, which imitated a ride on a dog sled.

Decorations of on-trade venues are aimed to interest the buyer and attract his attention to the brand. If the consumer did not know the brand but noticed it, he can try to find the drink in the menu or ask the waiter. If the consumer already knows the brand, mentioning it may lead to a desire to taste the product.

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5.3.2 Multifacing

As in off-trade, multifacing is a communication tool in on-trade venues. Here this tool is used on the shelves behind the bar. A large number of identical bottles attracts the consumer's attention. This tool can also interest him in purchase or awake a desire to try this product.

5.3.3 Menu

The menu is another visual marketing tool in the on-trade channel. It can be applied in several ways. Firstly, the menu may contain a branded section (e.g. Ballantine's whisky cocktails; Chivas whisky and others). The menu may also include the brand logo. Secondly, the number of items on the menu varies from a venue to venue. For example, there may not be some variations of the brand, cocktails based on the brand, etc. Some on-trade positions in the menu do not specify the name of the brand, which is used to make a cocktail. Others may only spell the names of certain brands.

5.3.4 Pricing instruments

As in the off-trade channel, on-trade venues use a lot of tools focused on special price offers. In this channel such tools as 1+1, happy hours, discounts, daily offers and others are used. As a rule, such offers attract the buyer's attention. Moreover, since the Russian consumer is highly price-oriented, these tools allow increasing sales of brands.

5.3.5 Promo staff

Promotional staff is widely used in bars and nightclubs. Often these are girls offering to drink a shot of a certain brand. The promo staff can be dressed in a specialized branded uniform or just to promote a certain brand. Such a tool increases product consumption, creates an interesting experience for visitors.

5.3.6 Exclusive contracts with venues

Many alcohol brands have special contracts with on-trade venues. Such places become key points for communication between the brand and the consumer. The institution is decorated with a brand theme and also has an idea that is embedded in the concept of brand marketing. Moreover, such on-trade venues has an extended menu, which allows the consumer to try unexpected combinations and discover the brand in a new way. Places with exclusive 33

contracts are also used for brand events. For example, the premium gin Monkey 47 is widely represented in the bar "Dictatura" in Moscow. This bar has a chamber atmosphere and also offers visitors to enjoy live performances by jazz musicians. This bar is also interesting because it has no cocktail menu. The barman creates a drink according to the customer's preferences: fortress, shades of taste, the basis of the drink. Another institution "Zavarka" is an exclusive point for tequila brand "Olmeca". The bar has corresponding branding, and is also a place for many events of the brand (parties, meetings with bloggers, etc.).

5.4 Event and online marketing

Events and online marketing are aimed at increasing consumer loyalty to the brand, increasing among consumers and broadcasting key brand values. In general, the two channels are strongly interconnected: some events attract visitors through online channels (since advertising on TV and radio is prohibited), and aim to ensure that visitors share their impressions and information about the brand through social networks. Thus, consumers receive information not from the advertiser, but from their friends or influencers (opinion leaders – people who have a significant audience and whose opinion is authoritative), which makes the information more reliable. The effectiveness of online tools is also easy to assess as information is available on coverage, audience, clicking on links and so on. It should be mentioned that event marketing requires a lot of investment. Depending on the nature of the event, money is spent to rent a place, promotion, decorations, drinks, staff, etc. Thus, the success of an event is very important for alcohol companies.

5.4.1 CRM

Each brand has its own target audience. CRM (Customer Relationship Management) bases allow you to maintain relationships with the consumer and transfer relevant information and product news. This communication tool is especially important in the alcohol business, as it is one of the fastest approaches of communication with consumers. Subscribers receive information about brand news, upcoming events and special offers. Online tools also allow quicker and more accurate assessment of consumer involvement, as the number of open messages, clicking on links and others is tracked. This helps keep the database updated, assess the number of inactive users and the level of interest in the content.

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5.4.2 Influencers and social media

Influencers, or opinion leaders, are another tool for online communication with the target audience. People who subscribe to blogger pages trust their opinions and can follow their advice. Influencers can also create lively and unusual content that not only fits the values and idea of the brand, but is also designed in the blogger's , what is making the integration more interesting and livelier. With the help of bloggers, companies increase their knowledge and trust in the brand. Many announcements of events are made through online channels due to legal restrictions.

It is important for brands to build relationships and maintain the loyalty not only of consumers, but also of opinion leaders. For this purpose, some brands hold meetings with bloggers, arrange trips to other countries and cities for them, invite to events. This not only increases the level of loyalty of influencers to the brand, but also allows them to create "live" and natural content. Natural content increases consumer confidence and attracts more attention.

In addition to working with influencers, many brands also have their own social media pages. Different brands adhere to different strategies of page maintenance in social networks: some publish cocktail recipes, posts about the history of the brand, its features, announcements of events, news. By contrast, the Macallan whisky brand page is dedicated to interesting facts "from a different angle", which corresponds to the key concept of the marketing campaign.

Another interesting way of communication with consumer are chat bots in the Telegram and Vkontakte networks. This tool offers many opportunities: consumers can play games, register checks to receive prizes, learn about brand news and more. Chat bots are easy to use and available for every user. However, to start using them, users must register to confirm their age and provide personal information. These channels are also used for lotteries of gifts for consumers. However, according to the law, alcohol products cannot be a gift. Therefore, most often branded products are drawn: clothes, bags, glasses and so on. Sometimes alcohol companies organize trips to other countries (usually to distilleries and other places where the brand is produced). These marketing campaigns aim to increase product sales as well as loyalty and brand awareness.

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5.4.3 Own events

Some brands have theme parties. Such events are aimed at full immersion in the mood and communication of the brand, and focus on creating an exclusive experience for visitors. The venue is fully branded with party themes and brand colors. The uniform of the staff is also branded, and the brand is the basis for all drinks and cocktails. Sometimes there are entertainment zones with games, photo zones, etc.

Since these events are aimed at increasing consumer knowledge about the brand, the main purpose of the event is to create a big noise in social networks. At the beginning of the campaign to attract attention to the event: there is a mailing list on CRM databases, announcements at bloggers, influencers and relevant media. These influencers must have an audience similar to the brand's consumers. For some events it is possible to win invitations: thus, consumers become not only recipients of information, but also direct participants in the event. Moreover, when applications for invitation tickets are received, the CRM base of the brand is replenished, which allows to improve communication with consumers.

Influencers and celebrities who have a relevant audience and will share their experience of visiting the event on social media are also invited to the event. To create content, the event can be complemented by interesting musicians, photo zones, interesting decorations, delicious cocktails, entertainment, promotions and other details. Special VIP-zones can also be created for influencers, which can be distinguished by the scenery or offered drinks. All elements of the event are aimed at increasing attention to the brand and broadcasting its main ideas to social networks. After the party, users continue to share their impressions for some time, posted photos, videos, announced winners of drawings (if any). In this way, a flow of information is created in the online channel.

An example of such events is the Olmeca Fiesta Muerte party dedicated to celebrating the Day of the Dead. The target audience of this brand is young people. The main channel for promotional event was the online channel: , Vkontakte. However, the party announcements could also be seen on neckhangers and pallets in the off-trade channel. The site of the event was made in blue and yellow colors of the brand, several photo zones were set up and a promo staff was invited, who offered guests to decorate themselves with glitter. In this way the mood of the brand was transmitted: a crazy party and fun. Tommy Cash, a popular Estonian artist among young people, was invited to the event. As a result, the event

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received a huge response in social media, as many young people wanted to get to the concert, and those who received invitations published a lot of content.

Besides parties, there are also dinners, championships and tastings. Such events are usually aimed at a more serious audience, which corresponds to the more status-minded mood of the brand. For example, Scotch Whisky Chivas Regal holds a business project competition among young whisky business people at Chivas Challenge. Influential businessmen were invited to the final of the event as judges and a dinner party was also arranged. As the marketing of the Chivas Regal brand is focused on success and business, the event also broadcasts this mood.

5.4.4 Event Sponsorship

In addition to their own parties, brands can support existing events. Thus, not only the audience of the brand is attracted, but also potential consumers. The promotion of these events reaches a wider audience, as advertising regulation is not so strict. However, the larger the event, the wider the audience, i.e. less brand relevant visitors. An example of such collaborations is Johnnie Walker whiskey and music festival held in Gorky Park “Park Live”, rum Capitan Morgan and winter ski festival Winter Fest in Sochi. These festivals have a large audience, which allows to increase knowledge about the brand. However, it is possible that the brand will be lost among other sponsors.

5.4.5 Collaborations with celebrities and other brands

A widely used method of communication with consumers is collaboration with a celebrity or a non-alcoholic brand. Such methods allow to attract new consumers, expand the audience, increase knowledge about the brand and convey the main idea of the brand more correctly. Collaborations with non-alcoholic brands can be presented in the form of exclusive clothes collections (Havana Club and Faces & Places), off-trade offers (Martini and Schweppes), creation of new products (Jameson and Volkov Brewery). The last collaboration was also widely supported in the online channel: consumers were invited to create their own version of the label for the new product. The winner was chosen by voting among users.

Many brands invite celebrities to be the face of the product (a ). The cooperation with the celebrity usually lasts for some period of time. During this period, the celebrity publishes posts about the brand in his or her social networks. For example, the

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famous journalist Ksenia Sobchak cooperated with Beluga vodka brand. It is also possible to advertise alcohol in YouTube videos. Since celebrities and bloggers are the authorities for their audience, this tool is an effective way of presenting the brand, increasing its recognition.

A popular type of collaboration with influencers is collaboration with musicians. Together with the brand, the musician writes a song mentioning the brand, and also integrates the brand into music videos. However, this instrument is difficult to use due to legal restrictions. Created video and music content must meet legal requirements, otherwise it will be exempt from public access. A vivid example of such a marketing campaign is the Bacardi Rom campaign "Be on the move". During the campaign, Bacardi brand has worked with the stars of the dance program "Dance on TNT", popular among young people musicians Feduk, Eldjey and others.

Another interesting approaches of working with the music industry is creating a music platform and supporting young artists. For example, the Jägermeister brand has created its own JagerVibes platform, which gives young artists a chance to promote themselves. It also holds an annual competition for young artists in various categories. It is interesting that many of today's popular artists, such as Monetochka, Pasosh and others, have passed through this platform. Thus, attention to the brand is drawn to music and artists, and artists in turn become more loyal to the brand and also transmit its values to their subscribers.

5.4.6 Bartenders and brand ambassadors

On-Trade is a very important of contact between consumer and brand. If a visitor is not sure about the choice of a drink, they can ask their companions or bartenders for advice. Bartenders are opinion leaders for visitors. The success of their sales of the particular brand in venues depends on their opinion and loyalty to the brand. Therefore, it is important to build good relationships between brands and the bar industry.

For this purpose, many brands are developing a brand ambassadors program. These people work with a particular brand. They travel around the country and give master classes for bartenders. At the workshops, ambassadors talk about the history of the brand, the shades of taste and the cocktails it is based on. There is also a practical part where recipes for beverages are demonstrated and a tasting is also held. This program is aimed at training barmen, increasing their loyalty and knowledge about the brand. In this way, bartenders will be able to convey brand values to visitors and create a unique experience for them. 38

Another tool for working with bartenders is the organization of championships. A competition can be based on one or more brands. Thus, bartenders are offered to create cocktails, which include a certain brand. The prize for such competitions may be a monetary reward, a trip to the distillery and so on. In the process of creating a cocktail, bartenders become more familiar with the brand and its taste, which allows them to increase their knowledge about the brand. Moreover, after the final, a party is organized. Consequently, a pleasant experience is created from communication with the brand, which leads to an increase in loyalty to the brand.

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6. Analysis of consumer interactions with marketing tools

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The purpose of this chapter is to introduce and to interpret the results of quantitative research. The analysis of respondents’ answers was made from off-trade, on-trade, marketing and ethical perspective. The outcomes of the research are discussed.

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6.1 The link between communication channels and the purchase process

To analyze the interaction and reaction of consumers to marketing tools in the "dark market", a survey was conducted among consumers of spirits. The results were used to plot the impact of consumer communication tools on their purchasing process (Figure 3).

Figure 3 Influence of communication channels on the purchase process

As can be seen from the survey results, the most effective channel for attracting the consumer's attention is on-trade channel. Visitors of on-trade venues pay attention to menus, decorations of the place, which leads to increased knowledge and recognition of brands. Moreover, 18% of respondents are ready to order drinks even if they are not familiar with the brand, if promotions and discounts are available.

The second strongest channel at the stage of knowledge and attention to the brand is online and event channel. Even though there was a large percentage of young people in the sample, only 25% of respondents attended brand events and 50% attended festivals. However, only

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half of those who attended the festival (i.e. 25% of the entire sample) pay attention to brands sponsoring events. also attracts only 50% of those surveyed. The other half prefers to miss out on advertising or have not noticed the advertising of alcoholic beverages in influencers.

The lowest percentage of influence on the first stage of the purchasing process in the off- trade channel can be explained by the fact that buyers come to the outlets with already planned brand and do not pay attention to other offers, especially if they are not familiar with this brand. In Figure 4 we can notice a significant increase in interest in a product in the off-trade channel, if a buyer already knows this brand.

Figure 4 Influence of communication channels on the purchasing process (with knowledge of the brand)

Thus, we can conclude that the tools of communication with the consumer in the off-trade channel work more effectively for consumers who are familiar with a brand. Therefore, this channel should not be used to attract a new audience, but to communicate brand values and educate consumers.

Significant differences between channels are also visible at the action stage, i.e. purchase. The most effective is the on-trade channel. As mentioned earlier, on-trade is a place where alcoholic beverages are consumed. This explains that the percentage of influence on buying marketing instruments is higher than in other channels. The main objectives of the online and event channel are to increase brand recognition and attention, create noise in social media, and broadcast brand values. Therefore, the effectiveness of these tools at the last stage of the buying process is quite low.

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6.2 Off-trade channel

In this block consumers were asked questions about pricing tools, pallets, gift wrapping, decorations (shelf-stoppers, neck-hangers, drawings on the floor, etc.) and online channels. According to the answers of respondents, the most effective off-trade tools are at the stage of interest and desire. Thus, most consumers pay attention to advertising of already familiar brands. It should also be noted that the additional interest is higher among people who rarely drink alcohol. This segment gives preference to already proven brands and does not want to try something new. Attracting attention to new products in this channel is quite difficult. On the other hand, all communication tools have on average a greater influence on the group of frequent users because they are looking for new offers or are more open to a variety of brands and categories.

Figure 5 The influence of off-trade instruments on the buying process

Figure 5 shows the impact of different instruments in the off-trade channel on consumer behavior. One of the most effective tools for attracting attention is pallets. These large and expensive objects attract equal attention of frequent and rare consumers, and thus are a universal means of communication with the audience. If consumers are already familiar with the brand, pallets attract an additional 33% of interest. Moreover, this tool also shows the greatest result at the desire stage. In other words, consumers evaluate their opportunities to purchase this brand. However, pallets do not directly affect the purchase of goods.

Shelf-stoppers, neck-hangers and other tools for decorating shelves and bottles are the medium efficiency tools. They mainly work for people who are frequent drinkers, i.e. already familiar with categories and brands and have a wider choice of planned brands.

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Sales consultants are very effective at the purchasing stage, as 74% of shop visitors follow their advice. On the other hand, only 26% of those surveyed turn to them for help. Young people, however, prefer not to communicate with consultants. People who seldom drink alcohol tend the most to ask for advice: they ask to describe different brands, show new products. Consultant are thus an effective tool of communicating with consumers: they have a lot of knowledge to draw the consumer's attention to a particular brand and convince them to buy it. On the other hand, due to the Russian mentality, shop visitors prefer to avoid contact with other people and make choices according to their own preferences.

Gift wrapping is a weak incentive to buy goods. 34% of respondents believe that gift wrapping is not a reason to buy a brand. 25% are ready to buy goods in gift wrapping if they know the brand. At the same time, representatives of the second group of respondents (rare consumers) are more inclined to buy a brand in gift wrapping if they already know the brand. On the other hand, frequent consumers buy brands in gift wrapping even if they are not familiar with them. It should be said that there are often cases when gifts (flasks, glasses, etc.) are stolen from stores. Thus, gift wrapping contains only a bottle and no additional object. This also affects the merchantability of such goods.

Pricing tools are one of the most effective tools for attracting consumer interest and buying goods. 44% of respondents prefer to buy brands at a discount, while 54% stick to their original choice. These tools are also universal, as they work with equal efficiency for both the first and second group of respondents.

Only 38% of those surveyed use online alcohol search and purchase platforms (Yandex. market, winestyle). Only 26% of consumers have never heard of this possibility. Therefore, it can be concluded that this channel is quite developed, however, due to the ban on selling alcohol products through online intermediaries, does not bring additional value to consumers. However, there are no differences in use by gender or age. This resource is used more often by frequent alcohol consumers. Of these, only 16% are for purchase, while 73% and 53% are for searching for information and comparing prices respectively. Therefore, this tool is more effective at the first stages of the consumer purchase process, as are other online and event tools. On the other hand, it has been placed in the off-trade section because it is directly related to sales in retail stores and the intention to purchase products.

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6.3 On-trade channel

The on-trade channel has shown high efficiency in attracting attention to the brand and alcohol sales. Indeed, this channel has many tools for interacting with consumers. It should also be noted that there are no significant differences in the impact on the buying process of frequent and rare consumers. Differences can be seen in the stages of desire and purchase. At the desire stage, a stronger influence of marketing tools is observed on the frequently used segment, as they study different offers and compare opportunities to purchase a particular brand. At the buying stage, seldom users have a higher percentage of brand exposure to communication tools. However, these differences are not significant, so this channel is equally effective for both segments.

Figure 6 Influence of on-trade instruments on the buying process

The first tool for communication with visitors is the setting of the place. Young people are more inclined to pay attention to interior elements. Only 75% of respondents pay attention to the decorations of the venue. Of these, only 42% notice the brand on the decorations. Despite the fact that it is 31% of the sample, this percentage is higher than any indicator in off-trade.

The second element of communication in on-trade channel is the menu. 66% of respondents notice special sections in the menu (dedicated to certain brands). At the same time 47% of them pay special attention to the brand they will order. It should be said that a brand is

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important for a group that often consumes alcohol. Thus, menus also have an impact on consumers' attention to the brand and their desire to buy it.

The on-trade channel has a wide variety of pricing instruments (discounts, happy hours, 1+1 and so on). These tools are a determining factor in the choice of beverage for most visitors. 76% of respondents prefer to order alcohol at discounts. Among them 18% may try a new brand. Thus, these tools have a direct impact on the purchase of brands. The highest percentage of consumption at discounts was found in the group of frequent consumers. They tend more to try new brands and look for more advantageous offers.

One of the most effective tools in this channel is bartenders. In contrast to communication with off-trade consultants, people are more inclined to go to bartenders for advice (60% of respondents). At the same time, only 5.2% of all respondents are asked about a certain brand. The rest tend more to follow bartender's advice. This makes bartenders the main influencers in on-trade channel. Bartenders are more popular among people who often drink alcohol. They tend to be interested in new offers and cocktails. Women also often ask bartenders for advice, but they are interested in taste, but not brand. For middle-aged men, the brand they are offered is important; they prefer to know what is the basis of the cocktail or what whisky they have been given. Rare consumers prefer to order familiar brands. They are not prepared to take risks and order the drinks they do not know.

6.4 Event and online channel

Event and online marketing aim to increase brand awareness, create noise in social networks and broadcast brand values. For these reasons this channel has a high rate of influence on brand attention. As can be seen in Figure 7, a rare consumers group is more attentive to the advertised brands: this is how they get information about new products. On the other hand, these tools are more relevant to frequent users because they tend more to study the advertised product.

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Figure 7 The impact of event and online channel tools on the purchasing process

As mentioned above, parties and festivals were not popular among the respondents. 66% of respondents have never heard that brands hold their own events. These are mostly people over 35 years old. The main visitors of parties and brand events are people who often drink alcohol. Moreover, most people are between 25 and 34 years old. Considering the fact that events are held for the target audience of brands and influencers, visitors must be loyal to the brand and be a consumer. This explains why knowledge about brand events is of low importance among the seldom consuming group.

On the other hand, sponsored events and festivals are more popular among those interviewed. According to respondents' answers, festivals increase brand awareness and interest in the brand, but consumers still remain in their choice. In other words, there is no impact on the last stage: purchase. The greatest influence on attention and knowledge of the brand was found in people who rarely use it. In contrast, the group that consumes the most often pays little attention to the sponsor's brand.

Advertising among the influencers causes some reaction in 53% of the respondents, 83% of whom are people between 18 and 34 years of age. Thus, the online channel is a more relevant tool for young audiences. After seeing the advertising, 54% of people start to pay attention to the goods in the store, notice the price and consider buying. Consequently, the influencers

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influence consumers behavior at the stages of attention, interest and desire. However, in 41% of cases, consumers stay loyal to their original choice of brand when buying.

The majority of respondents are not subscribed to any social media pages or newsletters with brand news (83%). 55% of people who use this channel are party and festival visitors. Another 30% follow news about events, but do not attend them. It should be noted that this channel is in little demand, but has great potential. 14% respondents use this tool for entertainment, so appropriate content should be created. On the other hand, social pages and brand mailings are not so popular among the respondents, as knowledge about them is also low. Respondents prefer to follow bloggers, celebrities and media in social media.

6.5 Ethical aspect

For most respondents, the ethical aspect of promoting alcoholic beverages was insignificant. Respondents do not pay much attention to market regulation, and are loyal to the brands they consume. Only 21% of respondents believe that regulation of alcohol advertising should be tightened. 14% believe that the current regulation may be weakened. Figure 4.6 present respondents' answers. As can be seen in the figure 8, rare consumers of alcoholic beverages advocate tougher regulation of alcohol advertising. 18% of frequent alcohol consumers believe that the regulation of alcohol advertising can be weakened. However, most consumers in both the first and second groups are satisfied with the current regulation.

Figure 8 Comparison of the attitude of groups of respondents to the current regulation of alcohol products promotion

Interestingly, 63% are in favor of reducing advertising on the , while only half of all respondents somehow respond to it. The main reason for such a high percentage is the

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reluctance of parents to advertise alcohol products among children. According to the answers of the respondents, alcoholism is one of the main problems of Russians. Thus, the image of alcohol products and their popularity among the population is created at an early stage, in adolescence. Moreover, the more information consumers have, the more likely it is that they are willing to try a new product.

"Because in our country, unlike other (countries), there is no drinking culture, where people are calm about alcohol. We already have too high percentage of people suffering from alcoholism, so on top of that, bloggers start advertising alcohol to an audience that includes children and teenagers, which is incomprehensible to the mind. Totally banning alcohol is also an extreme, but at least we can make it worse by tightening the regulation of advertising.

Figure 9 Rating of channels for stricter regulation of alcohol promotion

The second most popular channel for tougher regulation is off-trade. Respondents believe that it is worth reducing the visual presence of brand advertising in retail outlets. According to the respondents' answers, the more visual presence of mentions of alcohol products in stores, the more likely it is that consumers will want to try something new and buy a product.

On-Trade is the last channel to tighten regulation of the promotion of alcoholic beverages. In an open survey, consumers also did not mention advertising in on-trade establishments. This may be due to the fact that the percentage of consumption in clubs, bars and restaurants is not very high. Moreover, this channel may be seen as a direct place to get acquainted with new brands and their consumption. Thus, brand communication with consumers is certainly present.

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Respondents were also asked how they think alcohol advertising affects the consumer. The most popular answers were those related to the image characteristics of the brand. The third place is occupied by the option "increases knowledge". Thus, it can be concluded that for many consumers, alcohol advertising is a tool for obtaining information about new brands. At the same time, 43% of respondents also believe that advertising increases the amount of goods they buy.

Figure 10 Influence of marketing tools on the consumer

If we compare the answers in the first and second groups, we can notice a significant difference in some statements. The group of seldom-users is more concerned about the impact of advertising on the consumption of minors, compared to frequent users (46% vs. 26%), and on the problem of alcoholism in the country (36% vs. 23%). However, people who frequently drink alcohol are more likely to believe that advertising increases brand awareness (47% vs. 38%) and educates people (27% vs. 10%).

The last question in this block was about the impact of brand involvement in ethical conflict on consumer perceptions. According to the survey results, 70% of respondents will not react

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in any way to the news about brand involvement in ethical conflict. Only 14% of respondents will stop using this brand. Now let's look at the differences between groups.

Figure 11 Comparison of consumer groups' attitude towards a brand involved in ethical conflict

Figure 11 shows that frequent alcohol consumers are very loyal to their brands. More than half of the group will not change their attitude towards their favorite brand in any way, even if they are involved in some ethical conflict. On the other hand, 63% of seldom consuming people will not react to this news either, but the percentage of consumers who will take action is higher among this group. Thus, we can conclude that regardless of the frequency of consumption, the alcohol industry has a very loyal audience in Russia.

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7. Discussion

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This chapter is devoted to discussing and summarizing the results of the research. The limitations of the research are also discussed.

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7.1 Key findings

The study identified four main channels of communication with consumers: off-trade, on- trade, event, and online. At the same time, events and internet marketing are closely connected, so these channels were considered together. A survey of strong alcohol consumers was conducted to assess the impact of each channel on the buying process within the AIDA model. To measure the impact of the tools, the respondents were divided into two groups: frequent users (once a month and more frequently) and infrequent users (once every three months or less). According to the respondents' responses, one group of consumers showed a higher level of response to marketing tools. Frequent users therefore have a higher level of knowledge of the products they consume and therefore a wider range of preferences. On the other hand, group 2 showed a low propensity to experiment and a desire to try unknown brands. These people are also attentive to brands and their promotion methods. This segment showed a more critical position on the ethical aspect of promotion and advertising of alcohol.

According to the survey results, the first hypothesis was confirmed: marketing price instruments (discounts, promotions) used in off-trade (shops) and on-trade (bars, nightclubs and restaurants) channels have the greatest impact on the buyer at the action (purchase) stage. Indeed, Russian buyers tend to buy products with special offers and discounts, and are very sensitive to the price of the product. 44% of respondents would prefer the goods at a discount to the planned goods. In the on-trade special offers are an excuse to try a new brand even for a group of rarely used people. On the other hand, sales assistants in the off-trade channel and bartenders in the on-trade channel also showed a high level of influence on the consumer at the purchase stage. Despite the high percentage of incentives to buy a certain brand, buyers prefer to avoid communication with sales consultants, which significantly

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reduces their level of influence. On the contrary, bartenders are more popular among visitors and have more influence on consumers' choice.

The second hypothesis was also confirmed: online marketing tools (social media, online resources) are the most effective in the 1st stage (attracting attention to the brand). Thus, this channel performs its main function: increasing the number of mentions in social media. However, this resource is unpopular among the respondents: consumers do not follow the news of brands, as well as rarely notice the advertising from the influencers. According to the survey, this channel is more popular among young audiences under 35. Therefore, it can be used to attract new consumers, as well as to educate the audience. Moreover, online retailers' websites are also in most cases used to find information about brands and their prices. Thus, this channel shows good results at the stage of attention and interest to the brand. However, in the ethics block, many respondents expressed concern about online marketing of beverages. The online channel received a majority of the votes to tighten the regulation of promotion. With a high percentage of young people online, including those under 18 years of age, there is a likelihood that young people will be influenced and their consumption will increase. Thus, despite the great potential and possibilities of online tools, online marketing is not the most effective means of communication with the consumer.

It should also be noted that the online trading channel showed good results at the stage of attracting attention to the brand. Despite the fact that consumption of alcoholic beverages in on-trade institutions accounts for only 30% of total consumption, this channel is an important point of contact between brands and consumers. Visitors to bars, clubs and restaurants take advantage of opportunities to discover a new brand or explore offers. Moreover, the group of rare consumers is more open to new things at these venues, which means that marketing tools can be aimed at attracting new audiences and communicating brand values.

Consumers in Russia are loyal to advertising alcoholic beverages and do not pay much attention to the ethical aspect. The majority of respondents did not express a desire to change the government regulation of alcohol promotion in any way. According to some survey respondents, additional information on alcohol brands and their consumption will help to increase knowledge about products and consumption of quality goods. Indeed, one of the

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problems on the Russian alcohol market is the consumption of a large number of homemade liquors and samogon (home-made strong beverage), as well as poor quality counterfeit products. Moreover, many customers are afraid to buy imported goods in stores because they often encounter counterfeits. This reduces brand credibility and creates a negative image for the category as a whole.

Another feature of the alcohol market is the high level of consumer loyalty to their brands. This is expressed both in terms of reactions to marketing tools and in terms of ethics. Consumers initially plan for the brand they will buy. Thus, many do not pay attention to the advertising of other products. On the other hand, if the consumer is already familiar with the brand, the probability of attracting his attention and interest is significantly increased. In all channels there is a high level of trust and loyalty to their brand. Moreover, when it comes to ethical conflict, consumers have also shown the importance of the brand for them. This shows that Russian consumers are consistent in their choice of alcoholic beverages and do not pay much attention to the ethical issue.

7.2 Limitations

The results of the study, as well as its methods, have limitations. This block presents a discussion of them.

First, despite the fact that the quantitative research method is an objective reflection of reality (Easterby-Smith et al., 2015), its results still depend on the sample of respondents. Thus, the results may vary from the region in which the survey was conducted, the gender and age distribution of respondents. Moreover, the quantitative method does not give deep understanding of the reasons for perception of advertising in one way or another. Consequently, one can only make assumptions about the reasons for the low effectiveness of some tools based on the author's experience.

The second limitation of this research is the sample. The survey involved a large number of young people (under 30 years), which could affect the results of the study. Moreover, the majority of those surveyed are Moscow residents. Given the fact that living standards in Moscow are very different from other regions of Russia, the survey results should be adapted to other regions according to their specifics.

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The author's interpretation of the results can be considered another limitation of this research. Since the author was an employee of an alcohol company for some time and worked with advertising on the dark market from the inside, she has a wider knowledge of the means of promoting alcoholic products. Thus, her professional experience could have influenced the perception of the survey results.

The last limitation is the set of marketing tools that appear in the questionnaire. First, despite the strict regulation of advertising in the alcohol market, there are many tools for communicating with consumers. Thus, not all tools may have been discussed in an individual interview with the representative of the alcohol company. Moreover, in order to reduce the number of questions in the questionnaire and increase the reliability of respondents' answers, the survey tested key tools in all channels. Future studies may focus on only one channel in more detail, leading to more reliable results.

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8. Conclusion

This paper looks at the impact of marketing communications used in the alcohol market on consumer buying. Due to current restrictions, the alcohol market has a limited number of tools for communicating with consumers, which characterizes the Russian market as a "Dark market" or "dark market. The "dark market" is a market where outdoor advertising and advertising on TV and radio is prohibited. Consequently, the marketing campaign of each brand is adapted to the local market, using the tools that are available and following the established norms. Thus, despite the government's strict regulation of alcohol promotion, alcohol brands have a relatively wide range of tools for communicating with consumers. Moreover, existing restrictions create new opportunities: for marketing campaigns, brand managers are quicker to adopt new technologies and tools to promote their brand.

This study confirmed the hypotheses being tested. As expected, Russian buyers are sensitive to price instruments. This, in turn, shows the high efficiency of communication tools in the on-trade channel. On the other hand, an online channel shows high efficiency to train buyers, broadcast brand values and increase brand awareness. This method is especially popular among young people, which is an advantage in the first two stages of the AIDA model. This channel shows a trend of development and growth, which will increase its effectiveness in the future.

The second part of the study focuses on the attitude of Russian consumers to alcohol advertising. As the test results showed, Russian consumers are loyal to both alcohol in general and their preferred brands. On the one hand, this has a positive impact on the effectiveness of alcohol advertising. On the other hand, the open questions of the study showed that the level of knowledge about the culture of consumption of different categories of beverages in Russia is low. This also explains the high level of sensitivity of Russian consumers to prices and the effectiveness of price instruments.

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Appendix 1

Questionnaire

Demography + frequency of consumption

1. Gender • Male • Female • Other 2. Age • 18-24 • 25-34 • 35-44 • 45+ • Other 3. Income: • We don't always have enough money even for food. • There's enough money for food, but cant buying clothes is difficult. • Enough money for food and clothing, but buying a new TV, fridge or washing machine would be difficult. • Enough money for large HH appliances, but we can't buy a new car. • Enough money for everything except things like apartments, houses, cottages. • We don't have any financial problems 4. How often do you consume strong liquor? • Once a week • Several times per month • Once per month • Once in 3 months • Less often than 1 in 3 month

Questions about marketing tools Off trade:

5. Do you pay attention to alcohol advertisements on shelves, bottles, floors? • Yes • No • Never noticed 6. If yes, what is your attitude towards it? • I investigate new brand • I compare it with my planned brand (by features) • I check the price and the possibility to buy • I buy it 7. Do you pay attention to individual stands of brands (pallets)?

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• Yes • No • Never noticed 8. If yes, can it consider you to buy that brand? • I investigate new brand • I compare it with my planned brand (by features) • I check the price and the possibility to buy • I buy it 9. Will you prefer a brand on sale rather than planned brand? • Yes • No • Never buy alco on sale 10. If you see an offer with discount, action you will • I investigate new brand • I compare it with my planned brand (by features) • I check the price and the possibility to buy • I buy it

11. Do you ask consultants for help to choose liquor? • Yes • No 12. If yes, do you follow their advices? • Yes, even if I’ve never tried this brand before • Yes, if I knew this brand already but had hesitations • No • Only if opinion is the same as mine 13. If yes, what do you ask them about? • Show me a new good brand • Help with a choice between my options • Tell me more about each brand • Show me the most profitable offer 14. Can gift pack (with flask, glass, shots) or special edition pack be a reason to buy that product? • Yes, if it is my planned brand • Yes, if I know this brand • Yes, even if I didn’t know this brand before • No • Never noticed 15. Do you use any on-line platforms (Yandex market, winestyle) to find information, buy alcohol products? • Yes, I read about brands • Yes, I compare prices • Yes, I order products • I heard about this, but never used

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• Didn’t know about this opportunity

On-trade

16. Do you prefer to order drinks with special offers, discounts? • Yes, if I like this brand • Yes, if I know this brand but never tried • Yes, even if I don’t know this brand • Yes, even if I don’t like this brand • No • Never noticed 17. Do you pay attention to venue decorations (bar carpets, blankets, pillows, other visuals)? • Yes, always notice branding • Yes, but don’t pay attention to brands • Never noticed 18. Do you pay attention to special sections in menus (Irish whiskey, Martini cocktails, Bacardi cocktail etc)? • Yes • No • Never noticed 19. Do you ask bartenders for advice about your drink? • Yes • No 20. If yes, do you pay attention to the brand in your drink? • Yes • No • Always ask for specific brand

Marketing

21. Do you attend special brand events/parties (Jameson Irishhood, Bacardi midsummer) • Yes • I heard about this, but have never been there • No • Never heard 22. Do you pay attention to alcohol sponsors at the festivals/events (Johnnie walker and park life, Capitan Morgan and Winter fest)? • Yes • Never pay attention • I don’t go to these events 23. If yes, what is your attitude towards this brand after events?

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• Become more loyal, buy it in stores • Look for it in stores to check price and options • Always notice it in stores but stay with my choice • Start to recognize a brand • Nothing changes 24. Do you pay attention to alcohol promotions of bloggers and celebrities? • Yes, follow their advices • Yes, take part in giveaways • Yes, look for these brands in stores • Yes, but stay with my choice of brands • No, don’t pay attention to any promotion • Never noticed 25. Do you receive e-mails from brands or follow the chat-bots in telegram? • Yes, I receive e-mails • Yes, I use chat-bots • Never heard about this option 26. If you use chat-bots, please, specify what for: • Participate in special offers • To read news • For fun • For prices (giveaways)

Ethics:

27. Do you think that existing limitations of alcohol promotion is well developed? • No, I think the advertisement of alcohol should be more limited (1) • Yes, I satisfied with current situation (2) • No, I think the alcohol promotion should be more visible (3) 28. a. If (1), how do you think it should be limited (multiple choice) • less price promotion • less online promotion • less visible promotion in stores • less tasting promotions • less promotion in on-trade venues

29.b. If (2, 3), do you think it can be promoted more? If yes, then how? (multiple choice) • No • Yes, TV promotion • Yes, more open events for publics • Yes, articles in journals • yes, no restrictions 29. How do you think alcohol promotion affects consumers? (multiple choice) • It increases purchases

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• It increases awareness about alcohol brands • It educates people • It increases consumption of alcohol • It affects under-age consumption • If has a bad influence on alcoholism situation in a country • It creates links between having fun and drinking alcohol • It makes alcohol the necessary part of human’s everyday life • Other (specify) 30. If you know that the brand is involved in ethical conflict, will it change your attitude towards it? • No, if I like it • Yes, I’ll stop to buy it • No, even if I don’t drink it • Yes, even if I don’t drink it, I’ll share this information with others

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Appendix 2

Individual interview questions

1. How do you define the alcohol market in Russia? Do you use the term "Dark market" or "Dark market"?

2. What regulatory conditions do you have to deal with when creating marketing campaigns?

3. What methods of communication with consumers are used in an off-trade channel? Are there differences in the tools used depending on the classification of the point of sale?

4. What methods of communication with consumers are used in on-trade channel? What limitations are present in it?

5. What methods of communication with consumers are used in the online channel?

6. What methods of communication with consumers are used in the event channel? How is this channel closely connected to an online channel? How do these tools attract consumers and influence their purchasing process?

7. Do you use CRM databases and mailings? For what?

8. Do you work with bartenders and the bar industry? Do you hold any events for them?

9. How do you feel about the ethical issue of promoting alcohol?

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