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ABSOLUT: Brand Extension
Case Study Competition 2012
Emerging Leaders Programme
Client Services
2
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Background
ABSOLUT is one of the world's best-selling international premium spirits and India's largest- selling imported vodka
ABSOLUT is now a part of Pernod Ricard, well-known for high quality spirits like Chivas Regal, The Glenlivet, Ballantine's, Blenders Pride and Royal Stag
ABSOLUT values are ‘Perfection’ , ‘Purity’ and ‘Choice’
Unique branding elements – shape of bottle, spelling of variants : Citron, Mandrin, Raspberri, Vanilia, Kurant, Peppar
HYPOTHETICAL
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Background
ABSOLUT, hypothetically, are considering brand extensions.
Some of the categories considered are :
Premium whiskeyMusical Instruments Premium ChocolateMale FragranceRetailing ( ABSOLUT Stores a la Diesel, FCUK)Accessories – belts, shades, handbagsHandcrafted exclusive 22K Gold JewelleryClubs
HYPOTHETICAL
4
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Business Question
Which 2 categories can be shortlisted for further exploration for extension?
HYPOTHETICAL
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Research Considerations
Opportunities in Indian market for potential categories
Use Secondary and Primary Sources
Primary – Quantitative and Qualitative
HYPOTHETICAL
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
TO BE KEPT IN MIND
Target group congruence
Category construct and competition
ABSOLUT values and category values
Identity vs Diversity
HYPOTHETICAL
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
A little Background Information..
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The Indian Landscape
Population: ~1.2 bln (2nd largest country in
terms of population)
Largest democracy in the world
Median age: 25 years
Urban population: 29% of total population
There are 14 official languages apart from
Hindi, which is the national language.
Demographics
The Indian economy is the eleventh largest economy
in the world by nominal GDP and the fourth largest by
purchasing power parity (PPP)
The country has successfully overcome the effect of
the global economic slowdown and the GDP is expected
to grow at 8.5% during fiscal 2010-11
Economy
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
India – A huge business opportunity
India represents a large business opportunity in the alcoholic beverages market, as
it has one of the lowest per capita consumptions relative to other developing
markets.
– Per Capita beer consumption of India is 2.3 Litres; compared to China which is 30 Litres
– For spirits, the per capita consumption is 0.05 litres, compared to China which is 2.51 litres
This low per capita consumption is expected to increase as
– Disposable income complemented by absorption of western ideologies increases
– Reduced negative perception towards alcohol consumption, at least in the context of social
drinking
– Presence of various pubs, discos and restaurants which are not solely andocentric spaces.
– Declining average age of initiation to alcohol
Source: McKinsey Quarterly
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
India’s share-of-wallet is shifting from basic necessities to discretionary items
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The Indian alcoholic beverages
Source: Datamonitor Market Data Analytics
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Although market value and per capita spend in India is very low, it is the fastest growing market…
Source: Datamonitor Market Data Analytics
13
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
A SNAPSHOT White Spirits Market in India was valued at INR 46 bn in 2009 and is expected to grow at 6.6%
over 2009-14 The market primarily includes – Vodka and Gin with white rum and tequila accounting for a
small share Changing profile of consumers and their propensity to experiment with premium brands and
varieties of spirits has fueled growth potential in the market
Rising income levels Changing lifestyles & higher acceptance Huge market potential Entry of International brands Growth in Organized retail
High tax structure and Regulations Advertising ban on alcohol
Innovative packaging and flavours Increasing joint ventures Rising mergers and acquisitions Promotional activities Launch of flavoured energy drinks
The market has a huge influx of foreign players who have either set up joint ventures or have set up subsidiaries to capitalize on the potential in the market
Market entry has barriers owing to the stringent regulations and tax structure of Indiangovernment
MARKET
DRIVERS
CHALLENGES
TRENDS
COMPETITION