Donna MoultonInternational MarketingProfessor MendozaWriting Assignment 4Due: 4/25/2016

Scotch Whisky in China

1.- Why are Diageo, Pernod Ricard, and other marketers of global spirits brands localizing advertising campaigns in emerging markets?

In the article they described how they localized advertising campaigns in China, “the

company did this by creating ad’s that depict two golfers hitting increasingly extreme shots,

which included teeing off from the roof of the gold cart and a ball that is hit from underneath a

crocodile. The campaign coincided with the rapid market growth; after China joined the World

Trade Organization (WTO) in 2001.” (keegan, Green, 2015) By creating ad campaigns that

appeal more markets there is a higher chance for profit growth. If you only made one ad

campaign for the entire market the product wouldn’t be desirable to all consumer demographics.

By widening the design of the ad and offering more ad campaigns there is a greater probability

of reaching a higher number of potential consumers that would be engaged by the ads and

potentially purchase the product, by not localizing your ad campaigns you would be losing out

on sales you would have made if you did localize.

2.-. How do consumption habits for products such as Scotch Whisky vary from country to country? Could you provide examples for China and South America?

“The size of the market and the complex demographic composition leads to totally

different consumption habits and patterns in different parts of China. The first segment, Guanxi

men, are status-driven businessmen ages 35 to 45 who spend a great deal of time networking and

trying to set up business deals. The second segment is “strong independent women,” also in the

35- to 45-age bracket. A third segment is composed of upwardly mobile men and women ages

25-35 who want to be seen as cutting-edge. Finally, “the choice generation” consists of those in

their twenties who seek new experience.” (keegan, Green, 2015) What we can see from this is

that many different consumer segments have different consumption habits, above we see the

consumption habits for the Chinese market of consumers. After looking for consumption habits

for South America I came across this article that stated this: “Alcohol consumption in Latin

America is low compared to Europe and the US and averages 5.5 liters of pure alcohol per year

per capita, although with marked differences between countries and gender. In Europe

consumption is estimated at 13 liters of pure alcohol while in the US the average in 9.8 liters.”

The report that came out includes these countries: El Salvador, Dominican Republic, Costa Rica,

Peru, Nicaragua, Venezuela, Mexico, Colombia and Brazil. It then said that the reports showed

that “six out of ten people consumed alcohol at least once in the last twelve months before the

survey which covered an age span from 18 to 65.” It also stated that 15% of the population in

each of those countries had never drank in their lives.

"Alcohol Consumption in Latin America Is Considerably Less than in Europe and US." MercoPress. N.p., 25 May 2012. Web. 24 Apr. 2016.

3.- Why are some spirits products and brands strictly local - pastis in France, bourbon in the United States, mezcal in Mexico - whereas others have global potential?

When it comes to globalizing products some companies do not expand their globalization

because they simply do not have the skills to do so. For example in the book it was stated that

“When Frances Pernod Ricard SA acquired the Chivas Regal brand from Seagram between

2000-2002 , Chivas experienced a 10 percent decline in sales volume.” Just because a brand has

been acquired or has acquired another brans and then is marketed and sold in another market

segment does not mean that that product will become successful in another country. Also if the

product doesn’t have a market demand or a market demand is not being created than is it not a

garenty that the product will do well. For example, from question 2 about South America

consumption habits the article also stated “The report shows that 60% of the population on

average in the last twelve months has consumed alcohol, however this ranges from 30% in El

Salvador to 83% in Venezuela. Another interesting discovery is that the great majority (75%)

does not consume alcohol or does so in volumes below the risk level recommended by the World

Health Organization, WHO. The WHO level risk is 40 grams of alcohol for women and 60

grams for men (approx 4 and 5 glasses).” Globalizing a product greatly depends on the market

demand for a product and if the region or area that a brand potentially would want to expand to

does not consume or have a need for the product then the product will not see an increase in

annual revenue.

4.- Why Scotch Whisky has such an element of premium-ness over Irish Whiskey, Canadian Whiskey or Japanese Whiskey? 

When consumers think about the word and or the product “Whiskey” the product that

comes to mind is “Scotch” or Scottish Whiskey. A BBC article on Scottish whiskey stated this

“This is in an industry struggling to distil enough to meet global demand now, let alone its

projections of where the market will be within five to 12 years when much of its output will be

ready for the market.” Basically scotch whiskey is a drink that can only be distilled and matured

in one country – Scotland, Scotch whiskies are usually distilled twice and then some are even

distilled a third time while others can be distilled up to twenty times. Scotch whisky regulations

state that any Scottish whiskey that is labeled “Scotch” must be distilled in Scotland and then

matured for a minimum of three years in oak casks. I believe that Scottish Whisky has such an

element of premium-ness because when consumers think whiskey again they think “Scotch”

Fraser, Douglas. "How Scotch Whisky Conquered the World." BBC News. N.p., 3 Jan. 2013. Web. 24 Apr. 2016.

5.- What strategies such as Diageo, Pernod-Ricard, Bacardi, Beam, and other Western Spirits brands pursue in China?

These companies have developed localized marketing strategies to become successful in

other markets. For instance, Pernod Ricard had the skills to succeed in the global market and

their decentralized strategy was well matched for the industry at the time to compete against the

giants of the market such as Diageo. The marketing chief of Ricard Martin Riley stated that

“when you get to a lot of countries that are not primarily English-speaking, like those in Asia or

South America, they would like you to fill in the dots.” What Martin Riley was saying is that in

order to be successful in a new market segment you have to adapt and localize your brand to the

new market, whether that means changing your slogan like Ricard did or creating custom

advertisements like BBH did for their Chinese market. Also some advertisements may translate

differently in other countries and take on a completely different meaning than the way it is

perceived in the country of origin. For instance, Apple had an iPhone commercial that played in

the US but was then translated into multiple languages to fit with their other market segments in

other countries thus improving their product reach and product revenue. This is why having a

localized strategy is so important to to the globalization of a brand.

6.- What localization strategies for your communication (see Briefing in page 409 in your book) could you use for brands such as Smirnoff and Absolut over Chinese brands such as Maotai, Wuliangye and Luzhou Laojiao, in the Chinese market?

After reading the article on emerging markets briefing book there were multiple strageies

that were mentioned. The one part that stood out was the part where the head of McDonalds

Chinese operations explained “Our customers are young, modern, and bilingual. If we’re not

edgy in communications, out front in technology, this consumer is going to blow right by us.”

(keegan- Green). Some strategies that Smirnoff and Absolut can try to do to localize their

advertising would be to improve their creative strategy, for instance, changing what the message

would say, and what type of appeal would be appropriate to the new Chinese market. They both

could even adopt the strategy of slice- of life and fantasy executions which could then be injected

with an element of fun and or humor. The two companies could even showcase famous athletes

or celebrities that are legendary for their inspirational appeals, or they could adapt the strategy of

sex appeal to market their product to the new market segment in China. Each of these localized

strategy options would need to be researched thoroughly as to not insult Chinese market. The

Chinese culture, colors, and language nuances among other variables would need to be

researched so that the localized strategies would be perceived well in the new market.