March 2014

Canadian Club

Stromi Lof

How can we get women (LDA - 30 years) in Asia (especially India and

China) to try Canadian Club ?

The brief

Process

Gather insights into both Chinese and Indian cultures to find out if Canadian Club’s approach should be tailored to

each market or generic ?

Uncover the idiosyncrasies of each culture to better inform the

marketing/communication strategy

Chinese

Market

CONSUMER INSIGHTS

Regulation

18Legal drinking

ageSale of alcohol to

minors was banned in 2006

Source: http://www.chinadaily.com.cn/english/doc/2006-01/06/content_510002.htmhttp://www.who.int/bulletin/volumes/91/4/12-107318/en/#R10http://apapaonline.org/APAPAnetwork/Meeting_Reports/files/Auckland_Sept04/Alcohol_Marketing_China.pdf

Since 1995Advertising on alcohol is restricted but seemed weakly

enforced according to the World Health Organization

“Violations are commonplace, alcohol commercials are still aired during prime time television programmes and misleading and sensational advertising content is

common.”

Regulation

Instead it seems that Chinese government

and the alcoholic

beverages industry chose self-regulation

Source: http://www.eucam.info/eucam/home/news.html/1881/1195/self-regulation-announced-for-advertising-in-chinahttp://vimeo.com/69868746

Chinese drinking culture seems dominated by men

Source: http://www.who.int/bulletin/volumes/91/4/12-107318/en//http://www.interfaceasia.com/i-news/news_58.htmlhttp://thinkingchinese.com/alcohol-culture-jiu-wenhua-drinking-as-a-currency-converted-to-friendship-and-successful-business

•15% of Chinese women declared drinking

alcohol vs. 55% for their men counterparts’

• Female respondents in China seem to drink less

frequently than the same gender groups in

other countries; more than 40% of female

respondents in these countries claim that they

drink once every few months.

• Traditionally, it seems that alcohol consumption

is mainly used to strengthen social/business

relationships amongst men/business partners

during business banquets where men are

encouraged to show their drinking skills ‘ganbei or

gambei’.

•During these functions, Chinese women are not

expected to drink like men…

“Alcohol means business and

power, but more directly, alcohol

equals emotions (ganqing) and an

informal (yet formal) long

standing masculine social

tradition of softening social

barriers.”

Women are not expected to drink but if they chose to do so

they have to drink like men…

“The social expectation for women to drink

is a lot less. Although women will

sometimes be made (or even teased) to

drink a bit, it’s much less of an obligation

than it is for men.”

http://jennyzhu.com/2010/02/08/drinking-

culture-in-china/

“Chinese women and, by extension, all

women are not required to drink as much.

Or if you remember to pretend from the

beginning that you “just don’t drink” — but

then you you have to stick to it til the end,

so make your choice wisely.”

http://matadornetwork.com/nights/a-

westerners-guide-to-chinese-drinking-culture/

“Generally speaking, when toasted in China men

are always supposed to drink.

Women, on the other hand, have a privilege to miss

a round (or even ask someone to drink instead of

her).

But don’t be deceived by slender looks of Chinese

girls. You might be surprised to reveal that some of

them can make a tough competition to guys in

drinking alcohol.”

http://www.lovelovechina.com/entertainment/chinese-

drinking-habits/

“Though it is socially acceptable for men to

consume high-strength alcohol, the concept of

women consuming high-strength alcohol such as

baijiu is still not fully accepted in Chinese culture.”

http://www.chinabusinessreview.com/opportunities-in-

chinas-alcoholic-beverage-market/

There exist opportunities to reach out Chinese women

Source:http://www.chinabusinessreview.com/opportunities-in-chinas-alcoholic-beverage-market/http://newzealandtochina.wordpress.com/2011/04/17/wine-and-chinese-women/

• Rise of alcohol consumption in the past five years: Fuelled

by their financial independence, female consumers tend

to consume more alcohol

• According to China Business Review, Wine appears to be

their favourite drink because of its:

• Aspirational lifestyle image. As wine is widely

consumed by western consumers, drinking wine

appears to be a sign of identification and

sophistication/social success among Chinese

women

• Claimed health benefits: “Many consumers believe

that drinking wine is good for one’s health and that

it promotes beautiful skin”

Taste /preference and Alcohol

percentage were the most

important factors

when Chinese consumers,

regardless of gender were asked

what were the important factors

they were paying attention to at

the moment of choosing an

alcohol

Taste and Alcohol percentage are important criteria

when choosing an alcohol

Source: http://www.interfaceasia.com/i-news/news_58.html

As a result, Chinese consumers tend to choose lower-

strength alcohol

“More consumers are choosing lower-strength alcohol

following:

• Increased taxes on spirits and high-strength alcohol

• Media and industry promotions on healthier drinking

habits”

Source: http://www.chinabusinessreview.com/opportunities-in-chinas-alcoholic-beverage-market

Further, mixing whisky and green tea seems popular in

China

“Observing that Chinese like green tea as a

mixer in their spirits, Chivas Regal began

promoting canned green tea as a mixer

with its whiskey products instead of

encouraging Chinese consumers to drink

Scotch neat, straight up, or on the rocks.”

This might be something that Canadian Club can

explore/utilize when developing

marketing/communications campaigns for the

Chinese target audience

Source: http://www.chinabusinessreview.com/opportunities-in-chinas-alcoholic-beverage-markethttp://the-fuqua-experience.com/blog/shanghai-day-7-chivas-regal-china-marketing-strategy/

MARKET INSIGHTS

Baijiu, the traditional Chinese spirit is losing its lusters

Source: http://www.jingdaily.com/chinese-drinkers-turning-to-imported-spirits-but-baijiu-still-king/17948/http://www.reuters.com/article/2013/09/10/us-china-baijiu-idUSBRE9891C920130910

"Baijiu is popular among mid- and elder-

aged consumers, but the younger

generations don't show strong interest"

Baijiu still largely dominates the Chinese

liquor market with 900 million cases sold

each year…

but Market leaders, Moutai and Wuliangye

saw weakest sales performances since,

2001 and 2005, respectively.

Meanwhile imported spirits are rapidly gaining market share

Source: http://www.ipsos.com/sites/ipsos.com/files/Drinking-to-the-Future-Trends-in-the-Spirits-Industry.pdfhttp://www.chinadaily.com.cn/china/2013-03/05/content_16275613.htm

• Imported spirits

grew by 16% in

China between

2010 and 2011

• Cognac & blended

scotch are the

biggest selling

imported spirits

• Diageo whisky brands grew by

59%

• Pernod Ricard liquor sales growth

reached 18%

Premiumisation seems key to succeed in this market

Source: http://www.ipsos.com/sites/ipsos.com/files/Drinking-to-the-Future-Trends-in-the-Spirits-Industry.pdf

Top 3 imported spirits brands in China:

• Hennessey Cognac

• Martell Cognac

• Chivas Whisky

CONNECTION

MOMENTS

Most popular places to

drink outside of home:

1. Restaurants

2. Friend’s houses

3. Pubs

Not surprisingly, this

leads to believe that the

alcohol consumption is

collective

Restaurants seem to be the favourite places to enjoy a

drink

Source: http://www.interfaceasia.com/i-news/news_58.html

WRAP-UP

CULTURAL INSIGHT Historically, Chinese alcohol culture has been driven

by business banquets where men used to cement their business relationships. Hence, until today, it

seems that women are not expected to drink ‘like men’

CONSUMER INSIGHTAs Chinese female consumers become more independent, they tend to enjoy drinking alcohol without any inhibitions.

They favour wine above any other alcohol for its aspirational aspects and pre-supposed health benefits

PRODUCT INSIGHT Positive sales growth indicates high enthusiasm for imported spirits in China, which represents an opportunity for Canadian Club. But it seems essential to adapt to local tastes and highlight the premium aspect of CC Whisky to be successful

Indian

Market

CONSUMER INSIGHTS

India has one of the highest legal drinking age in the

world…

Source: http://www.icap.org/Table/MinimumAgeLimitsWorldwide / http://en.wikipedia.org/wiki/Alcohol_laws_of_India

http://articles.timesofindia.indiatimes.com/2011-06-24/mumbai/29698621_1_drinking-age-drinking-age-alcohol

Legal Drinking age: 18-25 years depending on the

stateIt’s one of the highest in

the world

Drinking age sits at 25 years old in Maharashtra, the state of Mumbai, the financial and

economic center and the most populous city in India

as well as the toughest advertising regulation

Source:http://apapaonline.org/data/National_Data/India/Alcohol_Policy_India.pdf / https://www.alcoholwebindia.in/content/regulation-legislation

http://www.ias.org.uk/What-we-do/Publication-archive/The-Globe/Issue-4-2001-3-2001/Alcohol-in-India.aspx

Advertising alcohol drinks is prohibited across all communications channels (TV, radio, print…)

This law is enforced based on The Cable Television Network (Regulation) Amendment Bill dated from September 2000

Restrictions on

Alcoholic beverages advertising

But there exists a grey area around surrogate

advertising

Source: http://www.freestyle-marketing.co.uk/advertising/what-is-surrogate-advertising.html

Most brands use surrogate ads to bypass these restrictions.

What is surrogate advertising?

Surrogate advertising consists in associating its brand to a product (soda, mineral water,

CD…) with the intention of promoting a product subjected to

advertisement restrictions (e.g.

Alcohol, cigarettes) Example of surrogate ad

for Kingfisher

A widespread practice that seems closely monitored by

the government

Source: http://adage.com/article/global-news/advertising-india-s-marketers-evade-alcohol-ad-ban/140509/

http://www.thehindu.com/news/cities/Thiruvananthapuram/liquor-companies-warned-against-surrogate-ads/article5055497.ece

In 2009, surrogate advertising accounted for 5% of the total ad spending in India, which represents about $4.5

billion

But this common practice has also been under scrutiny of the Indian government, which regularly releases warnings

to liquor companies

Similarly to China, traditions still have a strong impact

on drinking patterns

Source: http://www.ias.org.uk/What-we-do/Publication-archive/The-Globe/Issue-2-2008/Indian-Alcohol-Atlas.aspx

http://www.ias.org.uk/What-we-do/Publication-archive/The-Globe/Issue-2-2005/India-Alcohol-and-public-health.aspx

http://www.theguardian.com/commentisfree/2012/aug/22/letter-from-india-women-drink

http://meerareflections.blogspot.com.au/2012/10/wine-and-women.html

Low consumer base

‘’India is generally regarded as a traditional ‘dry’ or ‘abstaining’ culture”

Less than 5% of Indian women are consuming alcohol whilst one in five men (21%) regularly drinks alcoholic

beverages

Public opinion seems judgemental on women who drink, particularly in public

“Indian girls might drink alcohol, but they cannot be seen in public buying it.”

“Yes I know times are changing but generally, in India, women who drink are

viewed in the most suspicious way!”

But there is a significant opportunity among the female

market

Source: http://www.indianalcoholpolicy.org/images/alcohol_atlas/F-Current%20Patterns%20and%20Trends.pdf

http://www.reuters.com/article/2013/03/17/us-india-liquor-women-idUSBRE92G0IF20130317

Existing women drinkers drink almost as

frequently as their male counterparts

“While almost 70% of the

male drinkers drink daily or almost

daily, 55 % of women drinkers also

drink at the same frequency”

Consumption among female drinkers is on the

rise

“This segment is growing more than twice as fast than the

overall market”

Little information exists into female drinking

preferences

Source: http://www.eucam.info/eucam/home/news.html/1881/2310/india-female-alcohol-consumption-on-the-rise

http://www.reuters.com/article/2013/03/17/us-india-liquor-women-idUSBRE92G0IF20130317

Women appear to drive cocktail consumption "There is a rise in the cocktail culture and a significant part of that is because of

women"

Restaurants and bars proved to be their favourite places to

have drink

Women who drink in public would typically do so in high-end restaurants or bars in

upscale sections of cities such as Mumbai, New Delhi and Bangalore.

Brands have started to tailor their NPD* and Communications to the female market

Source: http://www.eucam.info/eucam/home/news.html/1881/2310/india-female-alcohol-consumption-on-the-rise

http://sulawines.com/Newscategory/Newsdetails/Taboo-broken-as-Indian-women-get-taste-for-drink/1/233/

Low-strength & flavoured alcohol drinks and specific

events

• Remy Cointreau launched the orange liqueur in India three years ago to tap the burgeoning women's market.

• Sula Wines developed a wine for women with low alcohol, slightly sweeter and sparkling

• Several brands/bars regularly host event exclusively dedicated to women:

•“Sensing the shifting culture, big city bars

and clubs are promoting ladies’ nights, with free cocktails for women and incentives to

wear high heels.”

*NPD: New Product Development

MARKET INSIGHTS

Spirits lead alcohol consumption

Source: Drinking-to-the-Future-Trends-in-the-Spirits-Industry - IPSOS

…and Whisky is King

Source: Financial Times - The Business of whisky

World Leader

India is the world largest Whisky market (in terms of volume)

Indians consume

150M nine litre cases of Whisky each

year

This represents half of the spirit market

Yet, imported genuine bottled whisky consumption remains low

Source: Financial Times - The Business of whisky

Local Indian Whiskies make the majority of the whisky consumed in India while Imported Whisky represents

a mere 1%

These whiskies, named IMFL (Indian Made Foreign Liquor) differ from the Scotch; they are made from a blend of distilled molasses and imported Scotch whisky

Taxes represent the main barrier to entry for foreign companies

The low consumption of foreign brands is mainly due to a hefty price of entry to Indian liquor market, driven by high taxes on imported alcohol.

150% Import tariff on foreign spirits

The biggest players in the Indian Whisky market

Source: http://www.euromonitor.com/alcoholic-drinks-in-india/reporthttp://articles.economictimes.indiatimes.com/2013-03-05/news/37470124_1_pernod-ricard-net-profit-higher-profit

• United Spirits is the largest liquor company in India.

•• In 2012, Diageo agreed to

acquire United Spirits

• The company holds 43% of the spirits market (in terms of volume)

• Pernod Ricard is currently the most profitable spirits firm in India

This is mainly due to the strong performance of local brands (e.g. Royal Stag and Blenders Pride) owned by Pernod Ricard

WRAP-UP

CULTURAL INSIGHT There seems to exist an ‘untold prohibition culture’ that restrains women to buy and drink alcohol in

public. This is driven by archaic ideas combined with strong stereotypes (e.g. ‘If she drinks that means she

is ‘loose’ woman) . As a result, women choose carefully with whom and where they consume

alcohol.

CONSUMER INSIGHTAvailable data indicates that alcohol drinking patterns are marginal among Indian women. However, female urban consumers fuel the rise in alcohol consumption. Upmarket bars and restaurants are their favourite places to have a

drink; cocktails also seem very popular. Aware of this trend, companies designed special drinks for women as well as

events

PRODUCT INSIGHT Whisky consumption is already well established in India and the market is highly competitive with strong local brands some of which backed by international groups.

However, there exists an opportunity to educate consumers to differentiate CC Whisky from local brands.

Further, beyond the product attributes, CC Whisky will need to promote its brand while respecting the tough restrictions on advertising in order to prevail in this market

RECOMMENDATIONS

STRATEGYBased on cultural,

consumer and product insights, the following

themes should feature in CC communications in

order to successfully encourage trial of CC whisky among LDA-30

years Chinese and Indian consumers

Leisure drink

Present CC whisky as a leisure drink to differentiate itself from the traditional Chinese business culture, which is strongly linked to the male drinking culture.

Data suggests that restaurants, friend’s houses and bars are the favouriteplaces for both Indian and Chinese women to have a drink.

Explore further, which times, places and surroundings that can feature in communications

Sophisticated brand

Research indicates that Chinese female consumers prefers wine as it reflects their social status goal.

Meanwhile research suggests that affluent women living in Indian capital cities boost the female alcohol consumption

There is an opportunity to educate female consumers about whisky history and culture via whisky tasting, teach them how to create whisky cocktails and pair whisky with food

Easy to Drink

Take into consideration the low-strength/ mixer trend and health concerns in China and the rise in cocktail drinking among women in India, It is not suggested to encourage drinking CC whisky straight or on the rocks.

However, CC could be the perfect base for cocktails and could set apart the brand from the competition by introducing new flavours to mix with its whisky

Empowerment

Given the stereotypes of Indian and Chinese societies on women who drink, the communications must represent Chinese and Indian women drinking without inhibitions. The CC woman does not fear what the public opinion will think.

• Messaging should be narrated from a female point of view to be able to have an impact on the target audience.

• Positioning suggestion: CC whisky is a drink that women will drink their own way.

• Key message: There is nothing wrong with a woman who drinks

Commonalities: Communication pillars

STRATEGY

How CC can connect with the target audience ?

The bar counter

Due to the restrictions on advertising, CC cannot use mass communication (TV,radio, print, Internet) to promote its whisky.

Although, surrogate advertising is common in India, it’s not legal and we would not advise CC to use this practice.

This might conflicts with the Premium character of the brand. Moreover, these ads/products could be banned under the Indian laws.

Instead, CC could showcase its whisky during relevant events (fashion week…) or create its own events in bars and restaurants.

This second option will enable the brand to connect directly with its target audience in an environment where they are in the mindset to enjoy a drink and open to discover new drinks too

Mass media + the bar counter

In China, CC can use all communications channels to connect with its target audience.

Explore further what are the media consumption behaviours among LDA-30 years Chinese women.

However, we would recommend to create special events in restaurants and bars where Chinese women can discover the brand

Differences:

Key touch points

STRATEGY

How CC can connect with the target audience ?

One to one communication with messaging apps

Rationale: Given that CC Whiskey cannot use mass media in India, there is an opportunity to use messaging apps (e.g. whatsapp, viber, line, hike or nimbuzz) to engage with the target audience.

Activation idea: Seed invitations to private parties and encourage audience to share with their girl friends for a free girl night out organized by CC Whisky

Differences:

Key touch points

Messaging aps in India – Numbers of

active users:

• Whatsapp: 30M

• Viber: 15M

• Line: 10M

• Hike: 5M

Source: The Growth Of Mobile Messaging Apps in India: Numbers, Marketing And Challenges - http://lighthouseinsights.in/the-growth-of-mobile-messaging-apps-in-india-numbers-marketing-and-challenges.html

APPENDIX

Example of surrogate products

Source: http://blogs.welingkar.org/index.php/campus-corner/implicit-positioning-and-surrogate-advertising