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					          McDowell’s Vintage Premium Malt Whisky
              Integrating the Marketing Mix
                         XMBA 206.1
                        Summer 2008




Ganesh Iyer
                                                   1
                  Iyer’s Framework for Marketing Analysis

     First mover advantages                          Company Analysis                       Perceptual mapping
                                                     Marketing Myopia
              Competitor                                                                       Customer Analysis
               Analysis
                                   Positioning                          Segmentation



                                                                                            Marketing Orientation
                                            Marketing Strategy
                                                                        Branding
                                                          Product       Intel Inside
                              Pricing process (ODI)
                              Pricing and innovation       Price

      Non Traditional advertising and promotions         Promotion       Traditional Advertising Planning Process
                       BMW Z3
                                                           Place        Going to market
                                 Direct marketing
                                                                        Goodyear
                                 Calyx and Corolla



                                                          Market
Ganesh Iyer
                                                                                                                    2
                                 1. Consumer Analysis
                                  Demographic Profile


             India’s GDP per-capita was < $1500 p.a. in 1996…($3300 in 2005,
              $4182 in 2006).
               » Approximately 5 mn. upper-upper class, many of then “nouveau riche” with
                 per capita of > $100,000 p.a.
               » Adopting the life styles of the old money group is an aspiration for the
                 nouveau riche.

             A growing middle class - 200MM ($4000 p.a. in 1996), but in 2006
              about 300MM with over $6000 p.a.

             Adoption of Western lifestyles is an established trend among the
              middle and upper-middle classes, particularly in big cities such as
              Mumbai and Delhi.



Ganesh Iyer
                                                                                            3
                           Demographic Profile (cont..)


             Automobile ownership in 1996: confined to less than 5% of the
              population (the upper-upper class).
              » Actual ownership may be less than 2%.
              » An automobile is a luxury product.
             Changing trends…$2500 car
              » Tata_Nano
              » Nano_IHT
              » Tata_Jaguar
             Membership in 1) gymkhana clubs 2) racing associations etc.
              » prestigious institutions which exist from the colonial era.
              » Membership connotes “old money,” westernization and social
                elitism.
              » part of the social life of the establishment and is aspirational for the
                nouveau riche
Ganesh Iyer
                                                                                           4
                     Consumer Behavior & Segmentation
                    Cultural Dimensions of Serving Scotch


      Two Segments
       A small group of “old money” and establishment types, with
        Western lifestyles and with Scotch as the preferred drink.
               » Why scotch?...a carry-over from British colonial days.


             Scotch is therefore a status symbol and an aspirational product
              for the nouveau riche.
               » This group serves and consumes Scotch in a conspicuous, public
                 manner to make a statement:
                   – you have arrived, you have class
                   – you can afford it




Ganesh Iyer
                                                                                  5
                                   Social Constraints


             Despite the allure of Scotch, Indian society as a whole is still
              quite conservative and there are many social and religious
              barriers to consuming alcohol. Consequently:

               » drinking alcohol has a “forbidden pleasure” element to it for many
                 middle-class families.

               » Barriers rapidly dissolving during the past decade.




Ganesh Iyer
                                                                                      6
                               Marketing Environment
                                Availability of Scotch


             At the time of this case, import of Scotch was tightly regulated.
               » Permit based system.
               » Primary recipients were government organizations, five star hotels,
                 and exclusive clubs (e.g., gymkhana clubs).


             This promoted an active market for “bootleg” Scotch which was
              readily available, but whose quality was highly variable.




Ganesh Iyer
                                                                                       7
                        Legal Constraints on Marketing


             Mass media advertising of alcoholic beverages is prohibited by
              law.

             Distillers have devised many ingenious ways to circumvent this
              law:
               » setting up companies or using distributors to sell “proxy”
                 products (decanters, salt and pepper shakers) which mimic
                 the brand name and other brand properties of a particular
                 brand e.g., Diplomat Mens Accessories, McDowells Club
                 Soda.

               » Event marketing e.g., the No. 1 McDowell’s Derby,
               » http://www.clubmcdowell.com/org/events.html
               » http://www.clubmcdowell.com/brands/mc_main.htm
               » http://www.theubgroup.com/events.html
Ganesh Iyer
                                                                               8
                        Premium Whisky Market in India


             Locally manufactured Premium Indian Whisky (PIW) is an
              alternative to Scotch. It is a blend of 5% -10% imported Scotch
              and good quality ethyl alcohol.

             Appropriate blending, flavoring and color are used to give it the
              appearance, taste and flavor of Scotch whisky

             Sales are as follows:
               » Scotch Whisky (permits + bootleg) - 200,000 cases per year
               » Premium Indian Whisky - 200,000 cases per year.




Ganesh Iyer
                                                                                  9
                     Interaction between PIW and Scotch


             None of the Premium Whiskies are able to make a dent in the
              Scotch market due to
              » Lack of consistent blend quality
              » The aura and the image of Scotch


             Thus PIW cannot satisfy the aspirational needs which the
              serving and consumption of Scotch fulfills.




Ganesh Iyer
                                                                            10
                                 The New Product


             A premium whisky containing > 15% Scotch blended with high
              proof ethyl alcohol and flavoring and color to approximate the
              taste and flavor of an imported Scotch.

             Manufacturing Cost (Including packaging and overheads): Rs.
              25/- per bottle as opposed to Rs. 15/- for a Premium Indian
              whisky.

             Proposed name: McDowell’s Vintage Premium Malt Whisky




Ganesh Iyer
                                                                               11
                   Iyer’s Framework for Marketing Analysis

     First mover advantages                         2. Company Analysis                       Perceptual mapping
                                                      Marketing Myopia
              3. Competitor                                                                    1. Customer Analysis
                Analysis
                                   Positioning                        Segmentation



                                                                                              Marketing Orientation
                                            Marketing Strategy
                                                                          Branding
                                                          Product
                              Pricing process (ODI)
                              Pricing and innovation        Price

      Non Traditional advertising and promotions         Promotion        Traditional Advertising
                       BMW Z3
                                                            Place         Going to market
                                 Direct marketing
                                                                          Goodyear



                                                          Market
Ganesh Iyer
                                                                                                                      12
                                2. Competitive Analysis
                               Brand Pricing Information


              Scotch                   Price ($ equiv)

              Chivas Regal             Rs. 820/- ($23)
              Johnny Walker Red        Rs. 740/- ($21)
              Cutty Sark               Rs. 640/- ($18)
              Vat 69                   Rs. 640/- ($18)

              Indian Premium
              Peter Scot               Rs. 430/- ($12)
              Royal Challenge
              McDowells Premium




Ganesh Iyer
                                                           13
                       Competitive Positioning Analysis
                           Positioning Decision




          Position as a superior PIW, or as an alternative to
          Scotch? At what price


     Premium
     Indian Whisky                                        Scotch

              Rs 400                                       Rs 750



                         ??                          ??


Ganesh Iyer
                                                                    14
              What did they do?




Ganesh Iyer
                                  15
                           Positioning: Why buy me?
               Why Should the Consumer Buy McDowell’s Vintage?


      1.      Because it will offer a blend quality equal to a regular Scotch
              (Johnnie Walker Red, Vat 69) and distinctly superior to all
              Indian Premium Whiskies.

      2.      Because it will have an image/aura which will satisfy the
              aspirational needs which serving and drinking Scotch satisfies.

      3.      Because most Scotch whiskies available locally (from
              bootleggers) are spurious.

      Support for creative.



Ganesh Iyer
                                                                                17
                               Marketing Objectives


             To launch McDowell’s Vintage Premium Malt Whisky and sell
              30,000 cases in the first year. (in 4 metros)

             To provide a direct alternative to Scotch whisky drinkers.

             To capture and upgrade drinkers of premium whisky segment
              from competing brands.




Ganesh Iyer
                                                                           18
                   Iyer’s Framework for Marketing Analysis

     First mover advantages                         Company Analysis                        Perceptual mapping
                                                    Marketing Myopia
              2. Competitor                                                                  1. Customer Analysis
                Analysis
                                   Positioning                         Segmentation



                                                                                            Marketing Orientation
                                           3.Marketing Strategy
                                                                       Branding
                                                         Product
                              Pricing process (ODI)
                              Pricing and innovation      Price

      Non Traditional advertising and promotions        Promotion       Traditional Advertising
                       BMW Z3
                                                          Place        Going to market
                                 Direct marketing
                                                                       Goodyear



                                                        Market
Ganesh Iyer
                                                                                                                    19
                              3. Marketing Strategy


      Product Strategy
       Launch a blend distinctly superior to any PIW and a taste and
        appearance similar to Vat 69. The brand name connotes
        something rare and precious to support the alternative to Scotch
        claim

             The package design the like of which has not been seen in the
              country and of truly international class.

             Launch in Quart (750ml) and Pint (375ml) (and no Nip (180ml)).

             Why not launch the Nip…(Exclusion)


Ganesh Iyer
                                                                               20
                                        Pricing


             Price McDowell’s Vintage as the most expensive product in the
              (PIW) market to complement its image.

             Need to achieve substantial distance from other premium Indian
              whisky prices.

             Retail Price chosen is Rs. 550 - 560.




Ganesh Iyer
                                                                               21
                    Advertising and Promotional Strategy


             How do we develop brand image for this “status” product in an
              environment where mass media communication is illegal?




Ganesh Iyer
                                                                              22
                               Direct Marketing Strategy


             A direct mail campaign, addressed to the “old money” and
              establishment group as well as the nouveau riche as identified
              from: (200,000 mail ins)
               »   gymkhana clubs
               »   racing associations
               »   lists of guests from 5-star hotels
               »   automobile associations


             What was the rationale for using direct marketing in a mass
              market consumer product category?
               » Direct marketing in the 1980’s and 90’s was rare in India…only
                 done by a few industrial and durables sellers.


Ganesh Iyer
                                                                                  23
                             Direct Marketing Strategy


             Tightly defined market in terms of geography
               » 6 major metros (with population of around 55 mn) are the major
                 markets.


             p.u. contribution very high

             Using DM for an image product. This is different from the U.S.
              experience.
               » The direct marketing campaign itself became a social thing




Ganesh Iyer
                                                                                  24
                           Direct Marketing Strategy


             Use direct mail to:
               » create launch awareness and excitement. (because of social
                 dimensions of direct marketing in India)

              » build a core group of vintage consumers.

              » maintain a continuing dialogue with this group and track their
                behavior

              » Focus on lifetime consumer value.



Ganesh Iyer
                                                                                 25
                            Teaser Mailers…Pre-Launch


             A sequence of 2 provocative teaser mailers to generate awareness and
              interest 2 weeks before physical launch.
               » teaser 1: “take a walk johnnie”
               » teaser 2: “what an answer for 69”
               » teaser 3: “she was regal” (not chosen)


             The mailers will introduce McDowell’s Vintage as an alternative to
              Scotch.

             Teasers have a response device built in (coupons for free drinks at a
              five star hotel) to identify “prospects” from a “suspects”




Ganesh Iyer
                                                                                      26
                                    Launch Mailer


             McDowell’s Brings You a Rare Classic
             To all prospects:
              » Introduced McDowell’s vintage premium malt whisky as an
                alternative to Scotch

              » Presented the total product package, together a response device.
                Response to a questionnaire earns privilege coupons for free
                Vintage drinks at 5 star hotels. (12% response obtained).




Ganesh Iyer
                                                                                   27
                            Theme Mailers…Post launch


             3 theme mailers.

             Build around antique/priceless/rare items and subjects and relate it to
              Vintage.
               » “the what is what of crystalware”
               » “distinguished decanters”
               » “vintage time pieces”


             The mailers give prospects the expertise to talk about the fine things in
              life and to contemplate purchases in exclusive and expensive product
              categories. (making DM a social phenomenon...small company
              executives solicitation)

             Communicated that this will be an ongoing relationship.

Ganesh Iyer
                                                                                          28
                                Media Advertising


             McDowell’s Vintage page:
               » a regular & standard feature column in leading national
                 dailies and newsmagazines . Feeds off the information on
                 vintage subjects in the theme mailers.

              » to break 3 months after brand launch.

              » Note the coordination between direct mail and media
                advertising




Ganesh Iyer
                                                                            29
                              Consumer Promotions


             To 350 selected opinion leaders:
               » a velvet wrapped bottle hand delivered to the individual.
               » tied to the direct mail campaign.


             Tie ups with all five-star bars for a special “vintage weeks” when
              “privilege drinks” can be served (sampling related to the
              response device).

             Note the coordination between direct marketing and salesforce
              activity.



Ganesh Iyer
                                                                                   30
                                    Trade Promotion


             Brand image window display
               » display in all Class A outlets to contain Vintage

             In-shop activity:
               » 300,000 coasters with the teaser campaign design given to bars
                 and pubs for in-shop distribution.

               » In store merchandising materials which introduced the brand and
                 also linked to the launch mailers.




Ganesh Iyer
                                                                                   31
                                 Trade Promotion


             Dealer detailer:
               » dealer detailer developed to aid the salesmen during launch
                 distribution.

             Other giveaways:
               » playing cards
               » clocks

      Other Activities
      Event Marketing
       McDowell’s Vintage Car Rallies.
       McDowell’s Vintage Jazz.


Ganesh Iyer
                                                                               32
                                    Key Learning


             Marketing strategy for the launch of an image product in a
              developing market from the perspective of a domestic firm.

             Launching an image product requires an integrated strategy with
              every element of the marketing mix should working together.

             Tactics and execution matter a lot.




Ganesh Iyer
                                                                                33
                                         Postscript


             Vintage created the super premium segment in India.

             The super premium market has exploded.
               » Consumers wanted even more distance from the PIW and were even more
                 willing to pay for Scotch quality

             McDowell and other firms started pushing up this ladder and McDowell
              launched Signature and Single malt

             The presence of Vintage constraining the super premium brands and
              Vintage phased out.

             The entire direct marketing database asset and the Vintage strategy
              transported to Signature.
               » http://www.signature.indiatimes.com/
               » http://www.clubmcdowell.com/brands/signature_main.htm


Ganesh Iyer
                                                                                       34
                         Postscript
               Evolution of a Product Manager




 Evolution of a Product Manager

 Grass does not grow on busy sidewalks


Ganesh Iyer
                                                35

				
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