elp2012 cs case study

ABSOLUT: Brand Extension

Case Study Competition 2012

Emerging Leaders Programme

Client Services

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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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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

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Business Question

Which 2 categories can be shortlisted for further exploration for extension?

HYPOTHETICAL

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Research Considerations

Opportunities in Indian market for potential categories

Use Secondary and Primary Sources

Primary – Quantitative and Qualitative

HYPOTHETICAL

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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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A little Background Information..

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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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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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India’s share-of-wallet is shifting from basic necessities to discretionary items

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The Indian alcoholic beverages

Source: Datamonitor Market Data Analytics

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Although market value and per capita spend in India is very low, it is the fastest growing market…

Source: Datamonitor Market Data Analytics

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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

elp2012 cs case study

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