McDowell’s Vintage Premium Malt Whisky Integrating the Marketing Mix

1. McDowell’s Vintage Premium Malt WhiskyIntegrating the Marketing Mix EWMBA 206.1 Fall 2009

2. Iyer’s Framework for Marketing Analysis Perceptual mapping First mover advantages Company Analysis Marketing Myopia Customer Analysis Competitor Analysis Positioning Segmentation Marketing Orientation Marketing Strategy Branding Intel Inside Product Pricing process (ODI) Pricing and innovation Price Traditional Advertising Planning Process Promotion Non Traditional advertising and promotions BMW Z3 Place Going to market Goodyear Direct marketing Calyx and Corolla Market

3. 1. Consumer Analysis Demographic Profile • India’s GDP per-capita PPP was < $1500 p.a. in 1996…($2800 in 2008). • Approximately 5 mn. upper-upper class, many of then “nouveau riche” with per capita of > $100,000 p.a. • Adopting the life styles of the old money group is an aspiration for the nouveau riche. • A growing middle class - 200MM ($4000 p.a. in 1996), but in 2006 about 300MM with over $8000 p.a. • Adoption of Western lifestyles is an established trend among the middle and upper-middle classes, particularly in big cities such as Mumbai and Delhi.

4. Demographic Profile (cont..) • Automobile ownership in 1996: confined to less than 5% of the population (the upper-upper class). • Actual ownership may be less than 2%. • An automobile is a luxury product. • Changing trends…$2500 car • Tata_Nano • Nano_IHT • Tata_Jaguar • Membership in 1) gymkhana clubs 2) racing associations etc. • prestigious institutions which exist from the colonial era. • Membership connotes “old money,” westernization and social elitism. • part of the social life of the establishment and is aspirational for the nouveau riche

5. Consumer Behavior & SegmentationCultural Dimensions of Serving Scotch Two Segments • A small group of “old money” and establishment types, with Western lifestyles and with Scotch as the preferred drink. • Why scotch?...a carry-over from British colonial days. • Scotch is therefore a status symbol and an aspirational product for the nouveau riche. • This group serves and consumes Scotch in a conspicuous, public manner to make a statement: • you have arrived, you have class • you can afford it

6. Social Constraints • Despite the allure of Scotch, Indian society as a whole is still quite conservative and there are many social and religious barriers to consuming alcohol. Consequently: • drinking alcohol has a “forbidden pleasure” element to it for many middle-class families. • Barriers rapidly dissolving during the past decade.

7. Marketing EnvironmentAvailability of Scotch • At the time of this case, import of Scotch was tightly regulated. • Permit based system. • Primary recipients were government organizations, five star hotels, and exclusive clubs (e.g., gymkhana clubs). • This promoted an active market for “bootleg” Scotch which was readily available, but whose quality was highly variable.

8. Legal Constraints on Marketing • Mass media advertising of alcoholic beverages is prohibited by law. • Distillers have devised many ingenious ways to circumvent this law: • setting up companies or using distributors to sell “proxy” products (decanters, salt and pepper shakers) which mimic the brand name and other brand properties of a particular brand e.g., Diplomat Mens Accessories, McDowells Club Soda. • Event marketing e.g., the No. 1 McDowell’s Derby,

9. Premium Whisky Market in India • Locally manufactured Premium Indian Whisky (PIW) is an alternative to Scotch. It is a blend of 5% -10% imported Scotch and good quality ethyl alcohol. • Appropriate blending, flavoring and color are used to give it the appearance, taste and flavor of Scotch whisky • Sales are as follows: • Scotch Whisky (permits + bootleg) - 200,000 cases per year • Premium Indian Whisky - 200,000 cases per year.

10. Interaction between PIW and Scotch • None of the Premium Whiskies are able to make a dent in the Scotch market due to • Lack of consistent blend quality • The aura and the image of Scotch • Thus PIW cannot satisfy the aspirational needs which the serving and consumption of Scotch fulfills.

11. The New Product • A premium whisky containing > 15% Scotch blended with high proof ethyl alcohol and flavoring and color to approximate the taste and flavor of an imported Scotch. • Manufacturing Cost (Including packaging and overheads): Rs. 25/- per bottle as opposed to Rs. 15/- for a Premium Indian whisky. • Proposed name: McDowell’s Vintage Premium Malt Whisky

12. Iyer’s Framework for Marketing Analysis Perceptual mapping First mover advantages 2. Company Analysis Marketing Myopia 1. Customer Analysis 3. Competitor Analysis Positioning Segmentation Marketing Orientation Marketing Strategy Branding Product Pricing process (ODI) Pricing and innovation Price Traditional Advertising Promotion Non Traditional advertising and promotions BMW Z3 Place Going to market Goodyear Direct marketing Market

13. 2. Competitive Analysis Brand Pricing Information

14. Competitive Positioning AnalysisPositioning Decision Position as a superior PIW, or as an alternative to Scotch? At what price Premium Indian Whisky Scotch Rs 750 Rs 400 ?? ??