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PER CAPITA PURE ALCOHOL CONSUMPTION(LITERS/ANNUM)OF BEER,WINE,SPIRITS

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SALES VOLUME OF THE ALCOHOLIC BEVERAGES IN WORLD MARKET

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THE ALCOHOLIC BEVERAGE MARKET OF INDIA

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1) This is a ‘regulated’ industry - movement, prices of intermediate goods (molasses, alcohol) tightly      controlled - state governments exert considerable influence .

2) Yet this is well developed 8200 corer (us $ 1907 million) industry in India.

3) Major players in the alcoholic beverages market - United Breweries (UB) Group( Bangalore), Shaw      Wallace (Calcutta), Jagajit Industries (Kapurthala, Punjab), Mohan Meakins(Sloan, Himachal    Pradesh), Associated Breweries &  Distilleries (Mumbai) .

4) Per capita beer consumption in India - 0.5 liters'; as against 20 liters' in China, 100 liters each in USA  & Germany , annually

The alcoholic beverage market

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BEER MARKET: SIZE AND STRUCTURE

Market Size:

1) A 70 million cases market .

2) Market growing at  10-12 % per annum. 3) South and west zones account for bulk (> 75 %)  of this market. 4) Major beer consuming centers - Maharashtra (Mumbai) .

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STRUCTURE OF BEER MARKET:-

1) Minimum economic size : 5000 kilo litres; 15000 kilo liters for NRI proposals.

2) Around 40 units in organised sector, mostly regional players .

3) Four large breweries have 84% of the market share. 4) Major beer brands (manufacturers) - King Fisher, Kalyani Black

Label (UB Group),     Golden Eagle (Mohan Meakins), Haywards (Shaw Wallace), London Pilsner      (Associated Breweries and Distilleries).

5) Foreign brands - Stroh’s, Fosters .

6) Licensing required except for smaller units employing under 50 persons or not using power.

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THE BEER MARKET:- FEATURES TRADE AND REGULATIONS

Market Characteristics 1) Beer packed in  650,750 & 1000 ml glass  bottles; usage of (330 ml) cans minimal.  2) Preference in the Indian market for strong beer .

3)  Promotions and sponsorships (sports,     musical events) to promote brands.

TRADE:- 1) States’ prohibition policies govern trade sales for beer. 2) Multi layer trade channel structure  .

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LIQUOR MARKET :- SIZE AND STRUCTURE

SIZE:-

1) Past growth 15 % CAGR per annum Brown spirits - particularly whisky, rum & brandy account for  

over 75 % of this market South and North share 60% of market 

INDUSTRY STRUCTURE

1) Major brands (manufacturers) : Signature, Blue Riband (UB Group), Aristocrat  (Jagajit Industries), Smirnoff, Gilbeys Green Label, Malibu, Archer’s Peach  Schnapps(International Distilleries India), Passport (Seagrams), VAT 69, Black & White, Black Dog (United Distillers India).

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2) There are over 22000 liquor retail outlets spread across the country .

3)In states of MAHRASHTRA,GOA,JAMMU AND KASHMIR and ORRISA the trade is operational in open market.

4) In states of PUNJAB, BIHAR,UTTAR PRADESH,MADHYA PRADESH and RAJASTHAN ,the trade is operational in auction market.

5)The trade is under strict government control in states of TAMIL NADU, KERALA, KARNATAKA AND DELHI.

6)The trade of liquor is prohibited in the states of GUJRAT, MIZORUM, NAGALAND and MANIPUR.

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CHARACTERISTICS OF LIQUOR MARKET IN INDIA:-

1) Preference for brown spirits (molasses flavor) in Indian market .

2) Liquor is packed in 180, 375, 500, 750 and 1000 ML bottles - glass and plastic bottles. 180 ML and 750 ML are fast moving  .

3) Guala caps is put on bottles to prevent bootlegging .

4) Brand building very important for this market.

5) Yet avenues limited as advertising of liquor banned in most medias sopromotions, sponsorships and surrogate advertising (sometimes) done to build brands

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THE COMPANY HISTORY

-) Cobra Beer was founded in 1989 by Arjun Reddy and Karan Bilimoria.-)The brand was originally named “PANTHER”, but Then the name was changed to COBRA.-)The founders were introduced to Mysore breweries who were the actual brewers of this beer.-)The beer was first brewed in b’lore and exported to UK for seven years.-) Currently, Cobra Beer is stocked in over 6,000 restaurants ,supermarkets and off licence chains in the UK. -) It has increased its presence in retail outlets and is available in 6,000 pubs, style bars &clubs. &is exported to more than 45 countries worldwidewith subsidiaries in INDIA, SA and USA.

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THE BRANDS OF COBRA BEER:-

Cobra 5.0% PremiumWhen we started out in 1989, this was the beer. Almost 20 years later, it still is. Still specially brewed to be smoother and less gassy than regular lagers. Still brewed to our original Indian recipe with only the finest natural ingredient.

King CobraThere's an American lager that lays claim to the "King of Beers" title.

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Cobra Light is brewed to have all the smoothness and flavour of a regular Cobra, but with less than half the carbs and calories.

=

Cobra Light

Cobra Zero%

It's brewed to have all the rich flavour and smoothness of a regular Cobra, but with less alcohol than a glass of orange juice.

Cobra Bite

Cobra Bite is an exotic range of naturally flavoured premium beers. The range includes Lemongrass, Blood Orange, Sweet Lime and Fresh Ginger flavours, each with is own zesty and distinctive characteristics.

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Cobra is the proud new sponsor of primetime shows between 9.00pm and 11.40pm, 7-nights a week on UKTV's Dave.

Dave

BFICobra is the official beer of the British Film Institute (BFI), an arrangement which means Cobra is the exclusive beer at events such as The Times BFI London Film Festival.04/08/23 41

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Cobra Makes First Facebook ForayBeer Brand Links with Thresher for ’Get them In! PromotionLondon, UK – Cobra Beer has announced that it has teamed up with off-licence group Thresher on their Facebook ’Get Them In!’ activity. This is an application which gives Facebook users the chance to buy a Cobra Beer voucher, which they can send to other Facebook users as gifts. It launches on the site in November and will run for three months.Cobra’s involvement in the promotion marks its first marketing involvement with Facebook. The vouchers can be printed and then redeemed in exchange for 4 x 330ml pack of Cobra 5% Premium Beer in all Thresher Group fascias - Wine Rack, Thresher, The Local, and Haddows in Scotland. Each voucher has a unique barcode which is scanned at point of purchase in the outlets.Will Ghali, Marketing Director of Cobra Beer, comments: "This is a really innovative and fun way for us to engage with our target audience, who we know are heavy users of Facebook.“

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Cobra adds Bite to Flavoured Lager RangeNew Fresh Ginger variant and packaging re-design for female-targeted Cobra Bite rangeLondon, UK – Cobra Beer has freshened up Cobra Bite, the brand’s naturally flavoured premium lagers with the launch of a new variant and packaging re-design across the range. The latest addition is Cobra Bite with Fresh Ginger, which is currently rolling out exclusively in 400 Tesco stores nationwide. The launch will be supported by a ’season of sampling,’ including a partnership with Original Speed Dating, across their events, online advertising on women’s websites and consumer PR activity.As part of the brand’s innovation platform, the new flavour joins the successful premium lager range which launched in May 2007 in the UK market. With an ABV of 4.1% and distinctive 250ml bottles, Cobra Bite broke new ground in the beer industry by becoming the only lagers in the UK market with 100% natural extracts added after brewing, making them less challenging than traditional Belgian fruit beers.The full range features Cobra Bite with Sweet Lime, Blood Orange, Lemongrass and the newest flavour, Fresh Ginger. The products are aimed at female drinkers between 25 and 35 years of age.

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At the retail front, Cobra has sales of 177.6 million pounds.

The brand has grown by 28 per cent in the last year.

according to the data research firm AC Nielsen, and analysts suggested the company could be worth around 200 million pounds.

Cobra's largest shareholder is Bilimoria, who owns about two-thirds of the shares. The remaining stock is held by hedge funds, business-angel investors and the company's own employees.

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DIAGEO

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The HistoryDiageo is a relatively new company, formed in 1997 with a merger between Guinness plc and Grand Metropolitan plc.

They did not begin wholly alcohol based, before 2002 Diageo also owned Burger King which was sold to the American based company Texas Pacific.Also they sold Pillsbury, a baking company, to General Mills in 2000

Diageo is a global company It has180 markets globally

The world's leading premium drinks business Headquarters- London

Industry- beverages

Product- Alcoholic beverages: Beer, Wine, Spirits

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Manufacturing facilities -Great Britain, Ireland, United States, Canada, Spain, Italy, Africa, Latin America, Australia, India and the Caribbean.

Diageo’s size provides for economies of scale in production, selling and marketing..

PositioningMiddleclass and upper middleclassUpper-class

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GLOBAL BRANDS

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Diageo Structure

– 4 Regions– Meet specific demands

North America-most developed and most lucrative.markets. Very complex cultures and demographics

International-Includes Latin America, Middle East, and Africa..Difficult and undeveloped markets. Heavy marketing and advertising.

Asia Pacific-immeasurable population size. Growing GDP, growing demand for alcoholic products.

Europe-Includes Russia. Poses as the most Competitive and dynamic.

– Government regulations– Exchange rates

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Sales:£8bn

North America

Net sales£2.5bn

0.9bn Operating profit

Europe

Net sales£2.6bn

0.7bnOperating profit

Asia Pacific

Net sales£0.9bn

0.2bnOperating profit

International

Net sales£2.0bn£

0.6bnOperating profit

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TARGET AGE GROUP

Age

80%

13%

6%

1%

0%

21-30

31-40

41-50

51-60

61 +

Conducted at local bars and an online polling site

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Diageo’s vision is “Celebrating life every day, everywhere

We are passionate about consumers We value each other We give ourselves the freedom to succeed We are proud of what we do and how we do it We strive to be the best 

VISION AND VALUES

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 Brand growth  Priority brands Invest more resources  Opportunities in emerging markets   Selective acquisitions  Skimming pricing strategy Using global and local marketing campaigns to build our brand positions

STRATEGY

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Total Value Creation

Price

Value

Cost

• Higher value placed on premium drinks– Consumer will pay premium price

• Creates brand awareness• Strong brand loyalty• Brand equity

Utility

Marketing & Sales

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Smirnoff No 21 Vodka: The world's leading vodka.Results 2007

23.2 million 9-litre cases6% volume growth

9% net sales growthTop five markets

USGreat Britain

CanadaBrazil

South Africa

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Johnnie Walker is the world's leading scotch whiskyResults 2007

15.4 million 9-litre cases14% volume growth

16% net sales growthTop 5 markets

USGlobal Travel 

GreeceMiddle East

Thailand

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3 4

28

21

9 96 6 6 5

3

0

5

10

15

20

25

30

DISTRIBUTION OF TOTAL SALES

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Innovative Global Marketing

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Diageo’s approach is based on two principles:

Set world-class standards for responsible marketing and Innovation and to promote a shared understanding of what responsible drinking means to reduce alcohol related harm.

Diageo - Drink Sensibly 

The two ‘Don’t see a great night wasted’ campaigns achieved the required balance, communicating that, for many people, alcohol consumption is a great part of a great night out, but that excessive consumption can destroy a great night out.

One of the ways that Diageo is promoting responsible drinking and combating misuse is through, DRINKiQ.com.

It promotes through sports like racing, golf etc

PROMOTION STRATEGY

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The ‘Many Me’ advertisement “Don’t see a Great Night Wasted”.

The ‘Mirror’ advertisement “Make sure you like what you see”.

PROMOTION STRATEGY

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 Partnership with Sirius satellite radio at Christmastime and came out with our own music CD. The creativity of the agency and our brand group working together has lead to very strong business results for our brand.

Although with the recession and credit crunch Diageo’s share prices continue to rise with no real sign of stopping.

In conclusion, they’re doing pretty well for themselves

PROMOTION STRATEGY

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Recommendations

• Uniquely associate “Diageo” with its products• Small logo on all products• Tagline at the end of television ads.....

• Ex. “brought to you be Diageo” or “another Diageo product”• Follow the lead of such brand association leaders as Sony, Coca-

cola, BMW, and Apple

• Nutritional Labeling• Growing trend in health-conscious consumers• Currently use www.KnowYourDrink.com

• Does not target non-internet users• Provide pamphlet on in-store displays

• More informed decisions

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BARCADI

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MISSION

• Mission is to distribute its expanding portfolio of international brand to trade clients and consumer around the world.

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• Vision was to create a refined drink from rum that could be served in any environment.

VISION

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• Bacardi limited is an international firm that is one of the largest most competitive alcohol producers in the world.

• In America 26.6% of all distilled liquors sold in the US is Vodka.

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PROMOTION• Code Of Ethics• Bacardi lumps together social

responsibility and ethics.• Bacardi is vehement in it

opposition to the illegal purchase on consumption of alcohol & does it best to promote.

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SALES

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UB Group (India)

• The UB Group, is the market leader in both

Spirits & Beer business in the country

• The Group has a turnover of Rs 3700 crores

• The core Beverage Alcohol business account

for 80% of the group turnover

• Other interests include Fertilizer,

Engineering , Life Science, Infrastructure

development & Media

• The Group is professionally managed and is

headed by Dr Vijay Mallya, the Group

Chairman

The UB Group- An introduction

The UB Group was founded by a Scotsman, Thomas Leishman in 1857..

At the age of 22, Vittal Mallya was elected as the company's first Indian director.

First was the addition of McDowell as one of the Group subsidiaries, a move which helped United Breweries to extend its portfolio to wines and spirits business.

Headquarters– BANGALORE

Industry- Beverages

HISTORY

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• To be the most admired global leader in the spirits industry by

creating unique high-quality brands for consumers, driven by

highly motivated employees and supported by best-in-class

processes and continued innovations.

• United Spirits is and will continue to be responsible towards its

stakeholders and the society."

MISSION

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Brand Performance

UB Group (India)

Brand FY’07 FY’08 % Grwth

Bagpiper Whisky 3.49 5.45 56%

McDowell’s No.1 Whisky 2.56 3.02 18%

McDowell’s No.1 Brandy 2.32 2.80 21%

McDowell’s Celebration Rum 2.03 2.18 7%

McDowell’s Signature Whisky 1.48 2.04 38%

Old Cask Rum 0.82 0.82 1%

Gilbey’s Green Label Whisky 1.15 1.11 (4%)

Blue Riband Gin Series 0.56 0.56 1%

Gold Riband Whisky 0.46 1.04 127%

Antiquity Rare Whisky 0.04 0.06 53%

Royal Challenge Whisky 0.44 0.46 6%

Director’s Special Black Whisky 2.27 3.49 54%

Director’s Special Whisky 1.93 2.38 18%

White Mischief Vodka 2.78 4.20 51%04/08/23 84

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EXPECTED SALES

• Sales of the United Spirits Ltd. are expected to exceed 66 million cases during 2008-09 with turnover of sales Rs.14000crores. the company has 17 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market

share for its first line brands in India.

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UB Group (India)

• The UB Group, is the market leader in both Spirits & Beer

business in the country

• The Group has a turnover of Rs 3700 crores

• The core Beverage Alcohol business account for 80% of

the group turnover

• Other interests include Fertilizer, Engineering , Life

Science, Infrastructure development & Media

• The Group is professionally managed and is headed by

Dr Vijay Mallya, the Group Chairman

The UB Group- An introduction

UB Group (India)

Market Share Movements

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SALES OF USL

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UB Group (India)

GLOBAL BRNDS

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Royal Challenge Finest Premium Whisky

Brand Highlights

• Synonymous with the finest Indian Whisky

• Largest selling Premium whisky of India

• 24-year Heritage brand with sales of over 1 million cases per annum

• Market leader with 40% market share

• Won awards at ITQI, Brussels and World Beverage Competition, USA.

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White Mischief Vodka

USP: Brand name, Frosted bottle, Blue and white color, Sharp and edgy communicationExcellent for preparation of cocktails

Brand Highlights

• Market leader with 43% market share

• Fastest growing vodka

• 5 year CAGR of 50%

• Sales of 1.1 million cases p.a

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McDowell’s Blue Riband Gin

USP: Blend, Heritage, Wide acceptability and brand loyalty

Brand Highlights

• Market leader with 52% market share

• Sales of 4,80,000 cases p.a

• Has been delighting consumers for 47 years

• Recently launched in new and contemporary packaging

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McDowell’s No1 Celebration Rum

USP: Unique blend that is widely accepted, McDowell’s lineage

Brand Highlights

• 4th largest rum in the world with sales of 6.6 million cases p.a

• Market leader in India with 40% market share

• Won The Superior Taste Award 2006 with 2 Stars from ITQI, Brussels, and also the Silver award at the International Wine and Spirits competition 2005 for its superior blend

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McDowell’s No1 Brandy

USP: Popular and widely accepted, McDowell’s lineage, Consistent quality

Brand Highlights

• World’s largest selling Brandy with sales of 6.8 million cases p.a

• 51% market share in India

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HISTORY

Kingfisher is largest selling Indian Beer .

Kingfisher is enjoyed in over 55 countries world wide. From the USA in the West, to Japan in the East. And from Norway in the North to New Zealand way down under!

It has 24% of the market share.

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KINGFISHER BEER BRANDS

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HISTORYThis history begins in December 1974 when Pernod and Ricard were still long-standing competitors in the French anise-based spirits market. Nevertheless, they decided to join forces to win foreign markets.

From 1975 to 1984, the Group begins its international development. 

From 1985 to 1993, Pernod Ricard builds a global network (Italy, Ireland, Cuba, Australia, Asia). Then, from 1997 to 1999, the time comes to reorganise before the 2000-2008 era of major acquisitions and reorientation around the core business: wines and spirits.

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Acquisitions and growth

Over the last 30 years, Pernod Ricard has acquired:

• Campbell Distillers in 1975, • Austin Nichols Ltd in 1980, • SIAS MPA (the world’s n°1 producer of fruit preparations for the dairy industry) in 1982,

sold in 2002,  • Orangina in 1984, sold in 2001, • Ramazotti in 1985, • Irish Distillers in 1988, • BWG (subsidiary of Irish Distillers, wholesale distributor) in 1988, sold in 2002 • Orlando Wyndham in 1989, • Larios in 1997, sold in 2005, • Agros et Yerevan Brandy Company in 1999, • 38% of Seagram’s Wines and Spirits business in 2001, • Allied Domecq in 2005. • V&S in 2008

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VALUESPernod Ricard’s strategy and ambitions are founded on 4 key values that have guided its development since the beginning :

• conviviality,• entrepreneurship,• integrity,• commitment. These key values express the identity of the Group and

underpin its business culture. They are its strength and originality.

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STRUCTURE

Pernard Ricard has a decentralized management structure and is building on its portfolio of Premium brands.

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Pernod Ricard has 19,300 employees in 70 countries worldwide. 56% of Group sales are generated outside Europe and more than 89% outside France. It has a turnover of 7.7 billion euros consolidated sales. Pernod Ricard is:

• n°1 in Europe: - n°1 in Ireland, France, Russia, Central Europe and Nordic Countries- n°2 in Spain, Greece, the United Kingdom and Italy

• n°1 in Asia-Pacific: - n°1 in Japan, China, India - n°1 ex-aequo in South Korea

• n°2 in the Americas: - n°1 in Argentina and Mexico- n°2 in Canada and Brazil - n°2 in the United States.

PRESENCE IN THE WORLD

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GROWTH

GROWTH

Pernod Ricard has implemented a policy of business development through external growth. In 1975, the Group had only 2 subsidiaries, in Switzerland and in Spain. The principle of regionalisation came into being in 1996 with the creation of Pernod Ricard Europe, Pernod Ricard Asia and Pernod Ricard Americas.

Growth in %

Sales volume in 9L cases

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STRATEGY

FOUR STRATEGIC PRIORITIESPernod Ricard’s success can be credited to its highly effective strategy which is based on four top priorities :

• concentrated investment in 15 key brands sold around the world,

• Premiumization of its brand portfolio,• reinforced positioning in emerging

markets with high growth potential• continued focus on external growth.

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PREMIUMIZATION

Pernod Ricard ranks number one in the segment for Premium and high-quality spirits. The Group’s strategy consists of prioritising top-of-the-line products with a high profit margin.

The main Objectives are :

• to meet consumers’ rising standards in both developed and emerging countries,

• to reduce the Group’s exposure to fluctuations in the world economy: Premium brands have proven less vulnerable.

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Pernod Ricard’s Premiumisation approach is based on actions taken in three areas :

• a continuous improvement in quality, • strong communications: the Group focuses on flagship,

prestige brands of global stature, widely acclaimed by the market. Its image and culture are those of a luxury market player,

• an emphasis on innovation.

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MARKETING STRATEGIES

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Implementing ethical marketing strategies• The Group took an important step when it adopted the Pernod Ricard Code for commercial

communications in 2007.

This Code establishes rules for ethics and advertising. It applies to the Group’s employees all around the world. Adapted from the European Forum for Responsible Drinking (EFRD) Code, the Pernod Ricard Code includes specific provisions that make it a strict professional code :

• a message on moderation is required on all Group advertisements, • a pictogram informing pregnant women of the dangers of alcohol appears on all bottles in

European Union countries, • no images representing any Group brand should appear at motor sports race tracks, on

motorised sports vehicles, or on racing competitors’ uniforms, • obscenity and gratuitous nudity in advertising is strictly prohibited, • Pernod Ricard is responsible for informing its suppliers of the code and for ensuring its

enforcement.

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PERNOD RICARD SPONSORSHIP PROGRAMME: A SOCIALLY-RESPONSIBLE COMMITMENT

• Helping the maximum number of people to experience the arts

• Supporting creativity and entrepreneurship• Promoting local skills and respecting tradition• Supporting major long-term projects

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In order for the sales and marketing teams to fully absorb the luxury brand culture and master the industry’s regulations, Pernod Ricard has instituted a dedicated training programme offered through the Pernod Ricard professional Training Centre (CFPR)

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34%

19%18%

9%

10%7% 3%

White spirits & Rums

Scotchs

Other whiskies

Aniseed

Liqueurs:

Cognacs & Brandies

Bitters:

SPIRITS VOLUME SPLIT BY CATEGORY

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Sales volume in 000’s 9L cases

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GLOBAL PREMIUM VODKA MARKET SHARE

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A GLOBAL INNOVATION PROCESS

This company-wide initiative aims to give new impetus to the Group’s innovation strategy. It allows Pernod Ricard not only to respond to changes in the market, but also to anticipate them.

• Innovation is present in products (new textures, new tastes, etc.),

• packaging (innovative design for packaging and bottles) and

• consumption methods (suggestions for new recipes, etc.).

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MAJOR PLAYERS

34%

28%

16%

11%

5%6%

Other, 34%

Diageo, 28%

PernodRicard,16%

Bacardi,11%

Brown-Forman,5%

Fortune Brands,6%

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Liquor Surrogate Advertising

"It's difficult to digest that an industry which is allowed to sell its products, is banned from advertising the same products, despite the fact that the commercials carry health warning, advising the customers to use the product in temperance."

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Surrogate Advertising

Surrogate advertising is done when the original product is not allowed to advertise itself on mass media. In India, alcohol brands are not allowed to give advertisements on television, so alcohol marketing firms use surrogate products like mineral water, soda, juice to hit consumers with the brand name. The brand name of the alcohol product is the same as the surrogate product. For e.g. Kingfisher soda.

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The surrogates used by these advertisements ranged

from audiocassettes, CDs and perfumes to golf

accessories and mineral water.

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Some companies also promoted their products through corporate advertising, distributing free gifts like caps and T-shirts with the brand name and using glow-signs outside the retail outlets.

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Due to the ban, liquor companies focused more on promotions for brand building. They started sponsoring events that projected the 'glamour' of the brands, like track racing, car rallies etc.

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Some of the major domestic companies use Internet as an effective marketing medium.

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HUNGRY KYA?

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BLENDED TO PERFECTION

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MERA CHOICE, NO:1 CHOICE

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Communication 04/08/23 151

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DRINKING IS INJURIOUS TO HEALTH04/08/23 153