Alcoholic Beverages

Segmentation and Buying Behavior

30th July, 2010

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

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

Alcoholic Beverages.................................................................................................. 5

IMFL (India Made Foreign Liquor)...........................................................................5

Country Liquor....................................................................................................... 7

Beer....................................................................................................................... 7

Wine .................................................................................................................... 10

Associations & Groups ............................................................................................12

Confederation of Indian Alcoholic Beverage Companies (CIABC) (Delhi, India)....12

All India Distillers’ Association (AIDA)...................................................................12

All India Brewers’ Association (AIBA)....................................................................12

All India Wine Producers’ Association ..................................................................13

Indian Government Regulation in the Sector ..........................................................14

Segmentation for Alcoholic Beverages....................................................................15

Rising Income Levels............................................................................................15

Changing Age Profile ...........................................................................................15

Changing Lifestyles..............................................................................................15

Price vs. Kick Factor.............................................................................................16

Drinking Habits.....................................................................................................16

Segmentation of Alcoholic Beverages..................................................................16

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

Problem Recognition: ..........................................................................................20

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

Wine shops........................................................................................................20

Word of mouth..................................................................................................21

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

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

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 Experience-....................................................................................................... 21

International Brand Pull.....................................................................................21

Advertisement- ................................................................................................21

Evaluation............................................................................................................22

Comparative evaluation ...................................................................................22

Purchase and Decision Process............................................................................23

................................................................................................................................ 25

Advertisement of Alcoholic Beverages....................................................................25

Surrogate Advertisement.....................................................................................25

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

Major Players........................................................................................................... 31

References..............................................................................................................34

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

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Introduction to Alcoholic Beverages Sector

Alcoholic beverages in the India appeared in the Chalcolithic Era. These

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

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

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

Liquor industry is today exporting a sizable quantity of India Liquor products

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

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

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Alcoholic Beverages

IMFL (India Made Foreign Liquor)

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

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

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 Number of cases in millions

Source- IWSR Report

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

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Country Liquor
India’s country liquor industry, a commoditised and often chaotic business,
is estimated at Rs 22,000 crore, with annualised volume sales of over 200
million cases. At one point, the country liquor market was projected at 2.5
times that of the more visible and heavily branded Indian Made Foreign
Liquor (IMFL) industry, but has been loosing ground rapidly in recent years.

Country liquor, however, has remained almost stagnant in absolute size as

consumers upgrade to IMFL on the back of economic expansion, and with
more States banning the segment citing social risk.

The standard characteristics of country liquor vary with the States, with its
alcohol strength in Maharashtra at 42.8% like IMFL, but 36% in Uttar
Pradesh where the purchasing power of the mass consumer is believed to
be lower.
Not only the changing skyline, but also the changing lifestyle and habits of
people are causing the slump in country liquor sales. The demographic
profile of the area has seen a sea change in the past few years.

Several big markets, especially those down south, have banned country
liquor immensely benefiting the IMFL sales. Country liquor was wiped out of
the southern markets when Karnataka became the last State to ban it..
However, country liquor continues to go strong in northern States like Uttar
Pradesh, Haryana and Punjab, while Maharashtra is one of the bigger States
in the west.

A.P., Karnataka and Tamil Nadu have abolished RS based CL in favour of

cheap ENA based IMFL. UP (19.5), Maharashtra (19.3), Karnataka (13.6),
Punjab (10.2) & Haryana (9.4) consume 63% of the total CL.

Beer
Beer is traditionally associated with young age consumption and often
considered as an urban socializing phenomenon. With the advent and
availability of more number of Western premium brands of beers in India,
the younger generation is also considering beer as an option to ‘hang-out’
with. The staid image of earlier generations’ at-home whisky or rum drinking
habits are mostly being replaced by a more jazzy ‘club drinking’ culture in
India.

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 Number of cases

Source- Times of India

Youthful exuberance, rapid growth in disposable income and urbanization

are the biggest selling points for the brewers to enter India.

The cult images of brands such as Carlsberg, Tuborg, Heineken, Tiger,

Cobra, Budweiser, etc. are further helping the cause as more number of
young Indians is influenced by Western cultures and customs. With India
expected to remain the youngest among all the bigger economies even in
2030 across the globe, the outlook for the beer market is definitely much
more than just bright.

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In India the future of beer industry is very much optimistic because:

1. India has predominantly a warm/hot climate

2. The beer-drinkers in the country are much younger than the average
beer-drinker elsewhere in the world. This makes them more likely to carry
the brand with them for a lifetime.
3. Increasing exposure to beer and wine drinking, mainly due to media and
consumer mobility.

All these factors combined make the scenario very promising for beer
industry and are 'in sync' with their strategy for India.

The beer-drinkers in the country are much younger than the average beer-
drinker elsewhere in the world. This makes them more likely to carry the
brand with them for a lifetime. Also, as the target audience becomes
younger, a light beer is expected to attract first-time drinkers, since it is
much milder than any of the other beers in the country.

United Breweries and SAB Miller together, sweep close to 80% of the Indian
beer market. Individual state oriented excise structure has further allowed
these two companies to develop a near duopoly in the market, since
differentiated alcohol policy in different states, localized distribution
monopolies and state excise on imports and exports of alcoholic drinks
make distribution and logistics of beer almost economically futile for most of
the new entrants.

UB (United Breweries Ltd.) is the market leader in the Indian beer market
with a 40% market share. Its flagship Kingfisher brand alone commands
25% market share. The company has however been focusing on strong
beer, which has driven growth. The company introduced its strong beer,
Kingfisher Strong during the year 2000 in the selected market of
Maharashtra and Karnataka. The market is now skewed towards strong beer
with more than 60% of the market being strong beer market.

Apart from Kingfisher, and Foster's Beer, the other brands in the Indian
market are Carling Black Label, Carlsberg, Dansberg, Golden Eagle, Guru,
Maharaja Premium Lager, Haake Beck, Haywards 2000 Beer, Haywards
5000, Haywards skol, Flying Horse Royal Lager, Taj Mahal, Heinekin, Hi-Five,
Ice, Kingfisher Diet, Kingfisher Strong, Kirin, Knockout, Legend, London Diet,
London Draft, London Pilsner, Royal Challenge, San Miguel Lager, Sand
Piper, Strohs and Zingaro.

The major brands which belong to large groups in the industry (apart from
UB) are – Shaw Wallace - Royal Challenge Premium Lager, Haywards 2000
Premium Lager, Haywards 5000 Super Strong, Hi-Five and Lal Toofan.

A lot of new variants promise to gain prominence, but mainly in niche urban
segments. The sophisticated consumer who drinks beer for the experience

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and not to get drunk will lap up ice beer or light beer. In urban centres,
apart from first time users companies are also targeting women, who as 'the
times they are a changing,' are entering the market for beer. Essentially,
women shy away from beer consumption because it is associated with
calories, and has traditionally been a buddy drink, associated with pot-
bellied men sitting at bars and shooting darts.

Wine
Wine is an alcoholic beverage made by fermentation of grapes or grape
juice. Global market for wine is estimated at well over 25 billion litres.
Compared to other countries, wine manufacture and consumption in India is
insignificant. This is attributed to earlier period of prohibition in the country
and higher price compared to spirits like whisky and brandy manufactured
in the country, referred to as Indian Made Foreign Liquors (IMFL).
Challenge for industry is maintaining lower costs to control the cost of
expensive packaging inputs. Another challenge for the company was to
manage the distribution of the finished goods. Eighty per cent of wine
consumption in the country is confined in major cities such as Mumbai
(39%), Delhi (23%), Bangalore (9%) and Goa (9%)

There are new players entering the Wine playing field and India can now
boast 3-4 large Wine manufacturers with capacity of about a million cases
per year. 2008 has been great year for Indian Wine manufacturers as Indian
Wines have won awards and acclaim in Europe and U.S. Indian Wines
however still are not very well accepted and there is still a resistance to
“Made in India” label.

40
35
30
25 Mumbai
20 Delhi
15 Bangalore
10 Goa

5
0
Wine Consumptionin%

Source-Report by Indian Wines

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

Confederation of Indian Alcoholic Beverage Companies (CIABC)

(Delhi, India)

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

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

All India Distillers’ Association (AIDA)

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

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

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

All India Brewers’ Association (AIBA)

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

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

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

The principal functions of AIBA can be summarised as follows:

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

All India Wine Producers’ Association

All Indian Wine producers association established their association in the

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

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Indian Government Regulation in the Sector

Indian Government heavily regulates this industry by influencing the

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

Gujarat, Manipur, Mizoram, Nagaland has imposed total prohibition on

alcoholic products.

The general policy is to discourage the consumption of alcoholic beverages

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

1) The Cable Television Network (Regulation) Amendment Bill, in force

September 8, 2000, completely prohibits alcohol advertisements.

2) Regulatory laws pertaining to hours of sale of alcohol, sale to minors and

drunken driving are observed. Implementation of a nationwide legal drinking
age of 21 years have achieved about 50-60 per cent cut in the consumption
of alcohol

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

4) The Government has funded 483 detoxification and 90 counselling

centres country-wide, under National Drug De-addiction Program, to treat
people with substance abuse disorders. 45% of people seeking treatment in
these centres are for alcohol dependence.

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

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Segmentation for Alcoholic Beverages

There is significant latent demand and vast scope for growth in liquor
consumption, both in the urban and prosperous rural areas of India. Drinking
liquor has rapidly gained acceptance and is no more considered as taboo -
even among the conservative middle-class whose attitudes have changed
with improved standard of living. Alcohol companies have been quick to
cash on to this trend. In fact, the youth, women and middle-class – and
many other overlapping segments – are being targeted by the liquor
companies looking for growth.

But the emerging trends are interesting. Strong beer (alcohol content in
excess of 5 per cent), a category non-existent in developed countries, has
been growing at about 15 per cent in India and already accounts for more
than 55 per cent of beer consumption. This trend is slated to continue.

The Indian alcohol market has been growing rapidly over the last 10 years,
due to the positive impact of demographic trends and expected changes,
like:

Rising Income Levels

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

Changing Age Profile

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

Changing Lifestyles
A deep-seated traditional social aversion to alcohol consumption has been a
traditional feature of the Indian society. However, as urban consumers
become more exposed to western lifestyles, through overseas travel and
the media, their attitude towards alcohol is relaxing. Social habits are
undergoing a transformation as mixed drinks are becoming more popular.
The greatest evidence of this trend is the increase in beer consumption
among women. More and more women are consuming beer – the
penetration in metropolitan areas is almost twice as high as the penetration
in other large cities – implying that the greater tolerance towards alcohol
consumption in metropolitan areas with increasing urbanization, this
acceptance is only going to rise.

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Price vs. Kick Factor
The Indian consumer typically values an alcoholic beverage on the basis of
its 'kick' factor versus its price. The following two factors therefore, affect
the market for alcoholic beverages.

Drinking Habits
Drinking habits will differ across various segments and will range from first
time experience drinkers to habitual ones. Normally binge drinking is more
popular amongst youth segment while middle age group segment will prefer
drinking within limits due to family. Senior drinkers will be more limited due
to their old health and will prefer drinking only on special occasions like
family and friends gatherings. But we can always find habitual drinkers
present across all segments for whom drinking is a way of life and they have
to drink as per their daily body requirement.
Off late drinkers catering to segments like Page-3, Image seekers, Globe
travellers, seasonal, loyal ones are seen increasing.

Segmentation of Alcoholic Beverages

Segmentation for Alcoholic Beverages

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

awareness,
Availability is not
a major issue, Weekend Semi-Premium brands
Tier-II Social acceptance drinkers, Power, of Beer(mild &
Cities showing upward leisure, Status, Just strong),Wine, Whisky,
(Class B) trend celebrations to get drunk Rum, Vodka, Gin
Low level Mostly Lower and local
awareness, getting Power, brands of Strong
availability is a drunk for Rebel, To beer, Country liquors
challenge, kick factor, quench daily (licensed &
Rural Drinking socially Habitual thirst, cost illicit),Low-priced
Areas unacceptable drinkers conscious whisky & rum

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 Celebrations
Mostly will prefer , daily,
dark spirits in weekend &
good packaging, social
Drinkers will be drinkers,
from entire leisure, To
spectrum of taste and
casual, variety experiment
seeking to with Power,
habitual in nature, different Rebel, Cost
Will prefer brands, To conscious, All brands of Beers,
Gender

drinking in both relieve flamboyant, whisky, Rum, vodka,

Male good or bad mood stress status Gin
Mostly will drink
where drinking is
not considered as
taboo, Low
alcohol content Premium and Semi-
drinkers, will Premium brands of
prefer white, Curiosity, Lager, mild beers,
citrus based Celebrations Breezers, Vodka, Gin,
spirits which look , Tequila shots,
fresh, modern & Social Glamorous, Different Cocktails
Female colorful outings, Status and Wines.

First time drinkers Curiosity,

to get experience celebrations,
to regular ones, Show-off, To
will regularly try give
different brands company for
and types of drinking, To
beverages as per simply get
their drunk, high
convenience, addiction Power, rebel, Beers, Breezers,
Youths(18 Normally they are seen in this Casanova, Whisky, Vodka, Rum,
-30) Binge drinkers age group Flamboyant, Gin, Wine
matured drinkers,
social drinkers, Relaxation,
Age

major chunk will Weekend

drink within limits celebrations,
because of Friend Taste
Middle marriage, gatherings, conscious, Deluxe and Premium
aged(31- Preferably home medium Brand Scotch whisky, beers,
50) drinkers addiction Specific Vodka, Rum, Wine
Body
requirement,
Relaxation,
low
addiction, Cost
low to high social & conscious, Premium and Semi-
Senior(ab quantity habitual family Brand premium whisky,
ove 50) drinkers gatherings loyalty Wine, Rum

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 drinking by
contributing
earned/pocket Power,
money within Rebel,
friend circle, Show-off, Casanova, Strong Beer ,Whisky,
trying different Friend To simply Cocktails, Rum,
Students beverages outings get drunk Vodka
Considers
Working drinking as a kind Relaxation,
Executive of stress buster Friend Rebel, cost Whisky, Rum, Vodka,
s after hard work. gatherings conscious Beers,
Middle
level
Occupation

profession
als across To give
IT Considers company,
Sector,Airl drinking as a Heavy Leisure, lager & Strong beer,
ines,Banki regular weekly weekend Celebrations Premium whisky,
ng etc activity drinkers , Vodka, rum
Business
Elite Class
(Top Business
Notch dealings,
managers Social Status Deluxe Scotch
) esteem drinkers, outings conscious Whiskies, Wine
Relaxation,
Team
Drinking after bonding
Defence office hours sessions, To Deluxe & Premium
Profession considered as a relieve Power, Taste Scotch whiskies &
als norm, stress conscious, rums, Brandy

To celebrate
Psychographic

Launch of any Leisure,

event, success of Celebrations Power,
any movie. , To increase Celebrations
Party Basically they acquaintanc , Status Premium Scotch
Lovers/Pa need reasons to es, to give conscious, whisky, Wine, Vodka,
ge-3 party. company Glamorous cocktails, mocktails
Will consume To project
certain type of certain
product and personality
brand which will at social Power, Deluxe imported
Image reflect their gatherings & Image Scotch whisky, Wine,
Seekers personality events conscious Vodka
Globe Managers/Professi To Taste Deluxe and Premium
Travellers onals on frequent experience experience, scotch whisky, Wine,
overseas travel international Enjoyment Vodka
always purchase brand which
different brands are
from duty-free generally
shop at airports, not available
First time and
experience manufacture
drinkers d in India.

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 Drinks as per the Beers when feeling
changing weather hot, Brandy-rum,
Seasonal conditions which Convenience Leisure, whisky when feeling
Drinkers suits their body , Relaxation, Enjoyment cold.
Drinking is a way To quench
of life for them. their thirst Cost
They drink nearly /addiction, conscious,
Habitual/ every day either Relaxation, To quench Semi-premium
Daily with meals or Body their daily whisky, rum, vodka,
Drinkers after work requirement thirst Country Liquor

Will stick to their Taste

brands as per Relaxation, conscious, Deluxe, Premium and
Loyalty their taste and Convenience Brand semi-Premium Scotch
Behavioral

Status experience , conscious Whisky, Rum, Vodka

All possible
Consumption can mentioned All different brands
be in Bars, All possible Image and types of Beers,
restaurants, pubs, mentioned requirement Scotch Whisky, Rum,
Where clubs, Friends purpose as as above as Vodka, Gin, Cocktails,
Consume house, private above as per per Country Liquor as per
d parties, home applicability applicability consumer suitability

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Buying behaviour for Alcoholic beverages

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

1. Leisure, Celebration and Social outings

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

Also there is always a search of varieties amongst drinkers, trying newer

options, and various influences that indirect advertisements etc try to
create. For e.g.-Projecting a more flamboyant, glamorous image will create
a pull towards a particular brand and type of drink.

Information search / identifying alternatives:

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

Wine shops
More than half of purchase decisions are made and changed at wine outlets.
Factors like attractive display, recommendation from the shop owner about
a particular brand and drink heavily influences a buyer’s decision process. A
habitual drinker will only ask for his particular brand in wine shop due to his
loyalty and the taste preferences which he has developed towards a
particular brand over years. A new or a more youthful drinker will get
attracted due to fancy packaging and the exuberance which a particular
drink is trying to project. Wine shops also offer free glasses, supplementary
drink like soda, soft drink to attract customer especially during festive
season on a particular type and brand of drink which also leads to change in
buyer’s decision. The only gap here is buyer may not be able to get any
information w.r.t. technical parameter of different brands as these shops are
being run with intention of maximizing sales which in turn may sometimes
lead to dissonance amongst buyer.

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Word of mouth
Word of mouth publicity from friends, peers and others whom you always
tend to rely leads to buying and trying out a particular type and brand of
alcoholic beverage.
In gathering of working professionals and day to day activities, people
exchange each other’s opinions on different type of alcoholic beverages.
These opinions are shared by individual who had prior experience or have a
loyalty to one brand or company.

Restaurants/bars/discotheque
A large percentage of buyer prefer drinking at various restaurants, bars,
pubs as they are away from social gaze, ambience which a person gets
attracted to and feels comfortable with, service offered to customers and
quality and variety of food which it offers. Indians love to have variety of
spicy snacks with their alcoholic beverages. The young crowd would
preferably drink in a particular club due to its nightlife and the various types
of cocktails and mocktails it offers. Buyer again tends to go with the
availability of particular type and brand of drink in his favourite bar, pub just
changing his decision process. Most of the bars, restaurants have started
Happy Hours concept which offers popular brand of alcoholic drinks at lower
prices at odd hours which in turn leads to increase in consumption and in a
way changing buyers decision who are heavily addicted and can’t resist the
idea of simply getting drunk at their favourite joints.

Experience-
It also happens many a times that you try out different drinks in all your
various social outings with friends, parties, celebrations, corporate meet
that you develop a liking to particular type and brand of alcohol beverage.
Factors like taste preferences, hangover effect play a major role in decision
making process.

International Brand Pull

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

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

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During any global sporting series e.g. football world cup, cricket world cup
etc, liquor companies sponsor the event to underline and showcase their
brand. These events are a perfect platform to enter into any buyers
consideration set easily and quickly. Studies have shown that buyers end up
buying the particular brand which gets projected heavily and regularly.

Evaluation
When the required information had been collected and consolidated, buyer
will make a comparison between the available brands. Also this process and
criteria of evaluation will vary at different stages of the life cycle of the
product.

Generic evaluation
At this stage, product may be competing with other products satisfying
same need level. Hence consumer may have a little knowledge on the
optimum parameter of the product. At this stage a drinker just need
availability of alcoholic beverages whenever he has urge to have some
drinks.

Comparative evaluation
At this stage consumer will compare standard product available with the
newer products available. Hence customer may compare standard set by
generic brand with the offer of newer entrants. E.g., any new beer brand
available is compare with the existing brands of beer, still there is no brand
loyalty from a consumer. Hence this type of evaluation has higher chances
of shift.

Attribute based evaluation

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

• Technical performance; This criteria uses the effectiveness of the

product during evaluation. Hence taste, percentage alcohol, smell,
after drink smell, kick etc shall be deciding factor.

• Generated functions: These incorporate additional costs and

benefits generated even the psychological ones. Hence going to a
expensive bar/restaurant will be status symbol. Also having expensive
brands/foreign brands gives a feeling of socially upper class.

• Economic criteria: Economic criteria use information on price or cost

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

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 • Adaptive: The criteria used under this head are: trial, guarantees,
and so on. Hence its brand image and value which plays a role. E.g.
having consumed some quantity of a reputed brand, one will be sure
on the purity and quality of the product.

• Integrative: Under the consumer buying situation the integrative

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

Purchase and Decision Process

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

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

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 Willing to travel to
favorite pubs, bars, Brand ->
Loyalty wine outlets for Habitual Product-
Status Can Wait particular brand Buying >Store
Behavioral Store ->
Product
-> No
Where Immedia Brand
Consumed te Convenience-bars Picking Decision

Advertisement of Alcoholic Beverages

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

Surrogate Advertisement
As a reaction to the directive of Government, the liquor & tobacco majors
sought other ways of endorsing their products. They have found an
alternative path of advertising through which they can keep on reminding
their liquor brands to their customers. They have introduced various other
products with the same brand name. Launching new products with common

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brand name is known as brand extension, which can be carried out for
related products (e.g.: Kingfisher Airlines and Kingfisher Beer). In this case,
the companies launch other products with the same brand name for the
purpose of reminding their old customers. Heavy advertising is done so
that the customers do not forget their liquor & tobacco brands, for which
advertisements are banned. The advertisements for such new products are
placed under the category of "Surrogate Advertisements". Their only
objective is to compensate the losses arising out of the ban on
advertisements of one particular product (i.e. liquor). This is a loophole
challenging the Government's action.

Surrogate Advertisements Promoted by Liquor Industries

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

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

LEGITIMATE BUSINESS SURROGATE

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

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Royal Challenger whisky Royal Challenger golf accessories &
mineral water & cricket team
White Mischief Liquor White Mischief holidays
Smirnoff Vodka Smirnoff cassettes & CDs

Sponsoring for any highly watched sporting event like IPL in form of
apparels for Bangalore-Royal Challengers, Cricket and Football events,
Sports accessories appeals the sensibilities of consumer and creates a pull
effect towards their brand. Liquor companies won’t mind getting into any
low cost surrogate products like CD’s cassettes, supplementary drinks -
Soda, soft drinks as long as customers choose their brands and increases
their profitability and market share.

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Major Players
IMFL
Major Players operating in the India include United Spirits, Diageo (Smirnoff
& Johnnie Walker brands), Seagram, Jagatjit Industries, Tilak nagar, Radico
Khaitan.

DIAGEO

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TilakNagar Industries Radico
Khaitan Ltd

BEER
Major Players operating in the India include United Breweries in form of
Kingfisher Brand, and SAB Miller. Knock Out, Carlsberg; Fosters are some of
popular brands.

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References
Marketing Management –Pingali Venugopal
http://www.aidaindia.org
http://www.theubgroup.com/beveragealcohol.html
http://www.vogaitalia.com
http://economictimes.indiatimes.com
http://www.hindustantimes.com
http://www.timesofindia.com
http://mofpi.nic.in

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