final cobra

7/28/2019 Final Cobra

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AN OVERVIEW

Cobra Beer is one of the fastest growing beer brands in the UK, with acurrent turnover of 56.9 million at retail value.

It has been exported to over 30 countries worldwide, and is availablenationwide in more than 5,000 Indian restaurants and in majorsupermarkets and off-licenses

Cobra Beer has been awarded Gold for three successive years atthe 2003,2002 and 2001 for Quality, presented with the Monde SelectionInternational High Quality Trophy in 2003 for its achievements, and listedon the 1999 Virgin Fast Track 100 list of the fastest growing, privatelyowned companies in the UK.

Founder and Chief Executive, Karan F. Bilimoria, was honored as2003London Entrepreneur of the Year (Consumer Products)

2003,Entrepreneur of the Year 2003 by the Asian Achievers Awards, Asianof the Year 2002, and is co-Chairman of the Indo-British partnership.

Cobra was recently recognized as Business of the Year by the AsianBusiness Awards. Headquartered in London, UK, Cobra Beer has officesthroughout the world, including India, South Africa, and the USA.


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KARAN BILIMORIA


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THE STARTING

The inspiration came with analysis of the eatinghabits of the people in U.K. where the people used todrinking beer along with the food.

The Indian curry-houses were popular among the

people for the Indian cuisine & they used to servelocally available beer to accompany Indian dishes.

But Karan found that the local beer would left theperson gassy &bloated & with not enough room forfood.

From here he developed an idea to produce apremium, high quality lager which would complementrather than fight against the food.


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Portraying idea into reality

The result was COBRA a premium beer, using

best quality natural ingredients, a unique

blend of barely malt &yeast with maize, hops

& rice.

Cobra beer is extra smooth &less glassy,

retaining a premium strength of 5%


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VISION

To brew the finest Indian beer & to make it a

global beer brand


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USP

The Cobra USP is that the beer is the ideal

accompaniment to spicy Indian food


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Problems faced

Bilimoria could hardly raised funds by getting a bank loanof just30,000 euro to begin its operation.

Bilimoria was operating in a highly competitive market withthe presence of all global brands & locally brewed beer.

Moreover, 1990, the year Cobra launched its operations inthe UK ,saw the beginning of a recession.

The brand & the quality were both unknown to the people.

The cobra beer was large in bottle size wherethe customers were accustomed to small bottle size, suited

for individual consumption. Logistics was the major threat to profitability & eating time

up to50% of management in managing & organising


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Strategies Adopted

Created a strong USP for a niche market segment.

Targeted growing no. of restaurants serving Indian cuisine.

Developed personal relationships, by making cold calls, with theSouth Asian curry houses.

Convinced the customers with the benefits of sharing one bottle &two glasses, which worked.

Started to brew its beer with Charles Wells UK largestindependent brewery under license.

Creative advertising & premium quality helped achieve Cobra avery successful penetration of the Indian restaurants sale of beer.

Availability in super markets & can be ordered through net. Going & diversifying into new markets by offering a full range of

packaging formats, including cans & multipacks


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Going global

Commenced brewing with Brower Belgia inPoland to serve European as well as othermarkets.

Introduced wine & goes for expansion from southof France.

Added various South African & Spanish range.

Major initiative to make cobra a global brand wastaken in 2004 by launching the Krait, the exportbrand of Cobra in the US.


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Entering Indian market

Launched its beer in one city at a time.

Tie-up with Mount Shivalik Group, Indias largestindependent brewery in 2004 to brew it inRajasthan, Punjab & Maharashtra.

Marketed its beer in metros like Delhi, Mumbai,Goa, Pune, Kolkata, Hyderabad & Bangalore.

Launched at competitive prices but it were higherthen the competitors due to taxes.


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Feeling the heat

Consumption of beer in India is one of the lowest in the world.

The price of the beer was somewhat higher then the competitors.

Drinking of beer is quite often an independent entertainmentactivity.

Unlike the UK people, Indians dont have the habit to take beer withtheir food.

Licenses are required to serve beer along with food in the Indianrestaurants, resulting in expensive affair & restriction up to smallerno. of restaurants.

Advertisement of beverage in India is prohibited & illegal, there fore

restricted to make people aware of the Cobra brand. Sponsoring various events will lead to further expense which it

cant weigh because of low initial sale & limited resource base


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CONTD

State level regulations on sale of alcoholic beverages.

Transport & infrastructure issues.

The Indian market is highly regulated.

Effective duopoly exists in the form of SAB Miller &the United Breweries.

Customer base is also very small.

Some market experts say that the market growth at adouble digit level is highly exaggerated as the real

growth is only 2-3% during last2-3 years.


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QUESTIONS?

1.Analyze Cobra beers decision to enter the

Indian market& evaluate the possibility of its

success.

2.What should be Cobra

beers marketing strategy in the face of

Kingfishers well established product

positioning &marketing strategy?


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Analyzing Cobra beers decision to enter Indian

market & possibility of its success

DECISION PARAMETERS:

As the Indian market is one of the largest beer market so thedecision is viable & sound.

The consumption level is lower at present but in future it willincrease like other nations (China, South Africa, UK & Czech

Republic ) i.e. from 0.5 litre per year per person to somewhat 5-15litre per year per person or even more.

The Indian market is growing @ 7-8% & is valued at Rs. 4500-5000crores, therefore, turning into an altogether profitable scenario.

The attitude of the consumers are also changing with respect to

drinking mild intoxicants including beer. Large no. of department. stores are also retailing beer.


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Contd

Many classy up-markets & stylish bars & lounges are opening up inthe metros.

The beer more-or-less is becoming a life-styleproduct as the experience of purchasing & its consumption ischanging.

POSSIBILITY OF SUCCESS: As the Indian market consumes 85 million cases per year & Cobra

see it growing 30-35 times in the next 25 years, so more scope isthere to establish& position itself & snare a huge market share.

If the market continues to open up then there are more chances to

succeed. If the customers are provided with greater choices then they dorespond, hence possibility is there to penetrate into the market.


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Contd..

As the economy grow also grow the consumption pattern ofthe consumers which may lead to higher demand.

A slight relaxation in the govt. norms & tax would lead to access tomore markets & lowering of price of beer, thus leading to moregrowth prospect &sales.

By looking at the potential of Indian markets Cobra like to makeIndia a production hub for the entire South Asia which would resultin more access better management.

By joining the hands with Greenfield's brewery in Andhra Pradeshthe company is looking for gaining market share as A.P. is thebiggest consuming state with 16 million cases out of the national

total of over 80 million cases. Moreover by producing in A.P. the company will be publicized easily

& be better known by the citizens of the state


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Cobra Beer marketing strategy in the face of

Kingfishers product positioning & marketing

strategy PRODUCT POSITIONING STRATEGY:

Cobra Beer should position himself as a brand that enhances brandimagery and creates awareness about the brand in India as a brandthat was born in India, went to UK, became successful there andhas come back to India now.

It should carry on with the same USP the beer is the idealaccompaniment to spicy Indian food.

The company should go for product adaptation at regional, country,city & retailer level.

The company should build brand form bottom-up bothstrategically(building awareness before brand-image) &tactically (creating sources of brand equity in the market)


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Contd..

The non-gassy feature of the beer should be highlighted as itwont create any bottleneck problem & its smooth also.

The beer can also be associated with the changing attitude of theconsumers in India w.r.t. drinking beer as it can be highlighted as100% natural beer with no added flavors & helps in digestion &

dont do any harm. The company should position himself as first company to produce

100%alcohol free beverage.

The company can also present its product more of ageneral/normal need product instead of a luxury need product.

As it had already tied up with so many Indian breweries, so itcan present himself as original Indian brand serving its people withfinest of quality


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Contd..

MARKETING STRATEGY

The company can focus on the 30% remaining portion in AndhraPradesh where 64% is with SAB Miller & 6% is with UB.

The company should do surrogate advertisement like Kingfisher &others top remote their brand & product.

The company should target it more as a youth product bysponsoring various events like sports (ICL tournament), fashionshows, concerts etc.

Apart from using only few forms of advertisement means (TV ad,hoardings, sponsoring ) the company should spread positive WOM& can go for developing relationship with the local retailers as theydid in UK to serve their beer to the consumers & potentialconsumers.


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Contd..

Kingfisher is having strength in national& regional products. So the company can also look fordeveloping strength in city & some retailer products apartfrom having strength in national & regional product.

Kingfisher has projected its product as a life-style productwhereas Cobra can project it as a life-style as well as ageneral product which everyone can have.

Cobra can highlight its 0.0% alcohol free beer & candevelop a niche market for those who earlier were nottaking beer because they think that it contain alcohol.

Cobra can also project its low calorie lower carb beerfor those who are health conscious & want to take a lowcalorie fat free drink.


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Contd

The Cobra beer can also promote its brandby teeing up the various airlines companieswhere the passengers being provided with the

cobra beer. The company also can back-up its brand by

highlighting the various awards won by it indifferent-2 categories. Thus creating a brand

image & a type of impression in the minds ofconsumers & potential consumers to shift fromthe existing brand & to start taking Cobra beer.


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Updates

The founder of Cobra beer, Lord Karan Bilimoria,has put the brand up for sale at around GBP200million. Lord Bilimoria said he was looking eitherfor a strategic partnership for the brand or a sale

in order to fully achieve sales potential. In October 2008, Cobra announced year-on-year

volume growth of 37% and retail sales of GBP178million, both in line with analyst expectations.

That said, the company has still never recordedan annual profit during almost 20 yearsof existence


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Updates

Lord Bilimoria aims to hold 10% of the Indian beermarket by 2012,but does not feel the company canrealistically expect to achieve this in its currentincarnation.

Likely suitors for Cobra could include Diageo, whichwas previously linked with acquiring a stake in Cobra inJuly 2008.

Diageo is understood to be in advanced talks withCobra Beer for purchasing a 30% stake in the company

Cobra Beer, which is seeking a valuation of about $400million, the stake in Cobra Beer is being valued at $100million

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