Visa Malay inducted professional management and implement different methods and theories to develop the company to globalize the company.Since then Kingfisher has gone on to become the undisputed ‘king’ in the Indian beer market.Kingfisher today has impressive spread of manufacturing facilities throughout the whole country.
Quality and hygiene are the key elements for its marketing philosophy success. Its flagship brand ‘Kingfisher’, has achieved international recognition consistently, and has won many awards in International Beer Festivals. Kingfisher
Premium Lager beer is currently available in 52 countries and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the I-J. Today each one of the 32,000 Beer outlets in India sells one brand or the other from United Breweries. United Breweries limited has a 48% share in the Indian beer market. S. W. O. T (Strength, Weaknesses, Opportunities and Threats) Analysis A SOOT analysis is a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats.
It provides a simple method of synthesizing the results of the marketing audit. Strength Kingfisher is a true global Indian icon and is also known today as a premium worldwide brand. It has the strongest worldwide distribution system and is available in 52 countries worldwide. It is a worldwide known brand with sponsorship in Formulae, Indian Premier League and title sponsors of England and Wales Cricket Board’s National Championship knock out competition due to this it has excellent brand visibility. It also has huge financial backing from PUB Group. Weakness
Kingfisher usually focuses on strong beer market as it is mostly favored in India but not in other countries and thus market growth is slow. Due to the current high demand and worldwide distribution system many opportunities are lost as there is less availability. Opportunity Due to the current trend of beer among the young people Kingfisher has a lot of benefit by global market expansion. The changing culture and lifestyle of Indian people has also increased the beer consumption. Threats The alcohol industry is highly taxed and has certain regulations thus has a lot of impact on Kingfisher.
Advertising for alcohol has been banned in India as it is considered to be a taboo. Negative perceptions about alcoholic beverages are widely common. Kingfisher faces huge competition from international companies like Heinlein, Scrabbles and Budweiser. P. E. S. T. L. E Analysts 2 PESTLE stands for political, economic, social, technological, legal and environmental. PESTLE analysis is a process, to help understand the overall market environment for a particular industry, business, product, or project. It is often a key part of strategic marketing and business planning.
PESTLE allows an organization to go in depth into heir current status and weaknesses. Political factors:- Minimum drinking age The minimum drinking age in India is 21 years whereas in European countries is 18 thus minimum drinking age affects the alcohol business in an important way. People below the permitted age cannot consume alcohol even if they want to. Kingfisher beer is adversely affected in terms of sales. Banned advertisements India is a youth country thus advertising of alcohol products has been a subject of continuous debate between the government, the alcohol industry, health groups, policy makers and the public.
Advertising in alcohol industry is done for brand choice and also it is a fair tool but banning advertising reduces market entry of new firms and thus also reduces awareness among the consumers about the product. Economic factors:- Taxation and Policies India has a very large youth population and strong beer is mostly favored but still growth of beer has some restrictions and complications which are in the form of taxes and policies implemented by the state governments.
Taxes and policies are different from state to state and some states do not allow alcoholic products brewed and manufactured from other states. The highest taxes are mostly levied by northern states such as Attar Pradesh, Punjab, Maharajah’s and Delhi. All of this has a great impact on the sales of United Breweries and other brands but there are also many obstacles such as the government has banned the advertisements of any sorts for alcoholic products. Economic growth and per capita income With more than 60% of Indians younger than age 25 consumption of alcohol is likely to increase in the coming years.
Due to continuous growth rate and growing economy people are getting richer day by day and also are their preferences as more people re drinking beers and spirits which is a very good sign for the growing alcohol industry. With the growing middle class and modern retail formats, taxation policies adopted by the state governments will act in favor of the growing beer industry in the coming future which will help united breweries and other brands in achieving their desired goals. Socio-cultural factors:- Cultural restriction India is a country with many religions and some of the religions prohibit drinking alcohol.
This has a huge impact on the sales of alcohol brands. Violence through alcohol There is strong association between violence and drinking. Violent behavior is occurred in all communities it is caused mainly due to over consumption of alcohol. Alcohol abuse and violence is caused mainly due to poor parental modeling and mental stress. Drunken driving cases are some of the main causes of highway accidents. But through proper social norms and public education, violence and alcohol abuse can be tackled. Individual factors also play a very important role.
Population India is the second largest country in terms of population and PUB group has a unique rand name thus people tend to consume their products. PUB group has a 48% share in the beer market that’s why it is known as the king of beer market in India. Technological factors:- Scientific studies In a recent scientific research it has been confirmed that people who drink moderately have a lower risk of premature death as compared to people who do not drink at all.Consumption of alcohol moderately leads to a reduced risk of cardiovascular diseases and obesity whereas people who drink in excess have a negative impact on their health. Distillery effluent treatment Compared to western countries where concentration of spent wash and its usage as an animal additive is a common practice, this process is not followed in India because Indian spent wash contains a higher level of inorganic substances which are found to produce a laxative effect if the consumption of feed is not monitored. Environmental factors:- Pollution A lot of water pollution is caused when the beer is made, the manufacturing of beer consists of three processes namely preparation of malt, beer worth and fermentation.
These processes involve a lot of rinsing and cleaning as beer is made of barley and alt is prepared from it for brewing. The wastewater contains a lot of solids, detergents, soluble and insoluble organic materials. The wastewater is almost three times more concentrated than sewage but there are no toxic contaminants and most of the water is biodegradable. To meet the quality of discharge standards anaerobic biological treatment is done so that the organic concentration of wastewater is reduced.
Legal environment:- Age factor In most European countries the age of drinking is 18 but in India where people are allowed to vote at this age are not permitted to drink. In India the alcohol consumption is allowed after 21 years but in some states it is 25. Despite the number of people who are below the ages of 25 years the beer industry has a huge potential if the current drinking age is lowered. Alcohol is considered a taboo in India as the culture and traditions are different than that of western countries. 5 Market Analysis:- The beer industry is still growing in India and it is estimated to be over 30 billion (in rupees).
Overall annual consumption of beer is around 23000 million elites (fugues of 2011) the beer industry is growing at a yearly rate of 7% to 9%. The major players of beer industry are Gabrielle and United Breweries. The beer industry is likely to face more competition from foreign brands such as Scrabbles, Heinlein, Budweiser and Corona. Beer markets like USA and Europe have seen a flat growth whereas consumption in the Indian market has increased tremendously. In India beer sales have seen a rapid increase as compared to other alcoholic drinks.
International beer companies like Budweiser, Scrabbles and Heinlein are well established in western countries but are still facing tough competition from Kingfisher which is the king in he beer industry of India with a 48% share. With more than 80% of market controlled by united breweries and Gabrielle, foreign brands are yet to find their feet on the ground. Kingfisher posted a profit before tax of RSI. 1475 million in the first quarter of this year ending on 30th June 2012. Strong beer continued to dominate with a growth of 23% in sales volume.
Intensity of rivalry The intensity of rivalry competitors is quite moderate as in case there is quite a rise in regulatory and legal burdens, manufacturers get together so that competition between them is lowered as they have to ensure their profit. Threat of new competitors The Indian beer industry is currently growing thus it is attractive for new players but with the dominant force of United breweries and Gabrielle already established it has been very difficult for foreign brewers to expand and overthrow Kingfisher which is currently leading in beer consumption.
Threat of substitute Brands like Kingfisher face further competition from substitutes like wine, vodka and whiskey, which are mostly favored in India as beer industry is still developing, it still has to get a bigger consumer base which spirits do have but due to the changing rend and growing Indian youth population beer industry best is yet to come.
Suppliers bargaining power Barley which is the most important product for brewing is quite cheaper and available in plenty and other inputs used to brew are also cheaper as there is a huge number of suppliers thus suppliers have less bargaining power. 6 Customers bargaining power It has been seen that customers are more powerful when their purchases form a large portion of seller’s sales but if there are less number of players in the market people don’t look at the quality but the product and thus they have less control over rice.
Classification of beer Lager Ale Stout Creamy Ale Malt Plainer Porter Age Kingfisher mild For young people Just for fun People who drink for the first time mainly for experience Kingfisher strong People who drink regularly Those who want beer to be stronger mostly favored by people 25 and above ‘THE KING OF GOOD TIMES’ As the punch line suggests Kingfisher has positioned its brand for people who want to socialize, party or have fun. 7 Customer Analysis:- The beer industry in India has a wide consumer base and people rink alcoholic beverages mostly for celebrating an event or socializing.
Unlike western countries people in India are allowed to consume alcohol after the age of 21 in most states and spirits are given more preference. United breweries have a strong base in spirit and beer industries. Kingfisher is at the top of the list in consumption of beer. Consumer behavior India is a developing country with a large population of middle-class people thus people tend to consume beer occasionally. Whiskey, vodka and wine were given more preference but the beer industry is yet to reach its potential and is growing at a very cast rate.
Products like Kingfisher and Harvard’s 5000 have shown excellent progress so far as they are already established in the beer industry. International brands like Budweiser, Heinlein and Scrabbles are still struggling to establish their brand among the people as they are expensive than Kingfisher and Harvard’s products, this is mainly due to taxes and regulations by the state governments which usually are hard on alcoholic companies. In a recent survey it was shown that one in three beers drunk in India were of Kingfisher’s. Consumers always prefer the cheapest product ND good value which Kingfisher effectively delivers.
Recommendations:- Kingfisher is famous for its marketing and sponsorships in major sporting events and spends a lot of money on it per year. It should concentrate on innovation and development of new products which will help it increase its brand value in other western countries where there is even a larger market for its product and there are no restrictions on advertising. Retailing its beers with more number of large departmental stores. Advertising its brand ‘Kingfisher’ by entering into different industries like water, soda of which advertising is allowed. This will lead to more brand awareness.
Developing innovative and new packaging for its beer. It should concentrate on innovation of a new product which has elements of a spirit and a beer. 8 Conclusion:- Kingfisher has a huge potential of expanding the beer market in India as the per capita income of the people is rising and so is the consumption. Kingfisher also has a kind of monopoly over other brands as it is already well established and sells its product at a cheaper rate than the new competitors entering the Indian beer industry. The negative perceptions about alcohol consumption have gone down and he beer industry will definitely show a lot of growth in the coming years.