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International and indian beer culture

A comparative study of international and Indian beer culture and its implications on the marketing and communications strategy for the Indian market

Introduction

The study will start with looking at the evolution of beer as a social drink and its subsequent acceptance across the globe. The study will also investigate how different brands came in to channelize communication of beer and incorporated community activities like football, rugby and food as moments for beer consumption to increase product acceptance.

We will also look at various international festivals like the Oktoberfest and the Great British Beer festival in UK which have developed as a part of beer culture and helped in the spread of the product through replicated festivals in various parts of the world. Primary research will be done through online surveys and interviews with respondents across Europe, North and South America, and Asia to understand consumer attitudes towards beer in these regions and a comparative analysis will be done on their responses.

Based on the insights, the study will investigate whether a similar model can be replicated in India for the nascent beer industry under the following heads:

Literature Review

A preliminary study of literature on beer industry globally and consumer behaviour revealed the following salient points:

When it comes to different brands of beer, it is important for them to focus on positioning and consumer engagement. Beer has slowly become more fashionable to drink with its association with activities like football, rugby and rock music.

Dark beer is heavy

Ale is stronger than lager

Stout is a "meal in a glass"

Imported beer is better than domestic beer

Wine is more complex than beer

Fruit beers are "girly beers"

All beer is best served ice-cold

Beer and fine dining don't mix

Beer was the fourth largest in terms of US dollar sales in edible grocery supermarket category.

37% of US adults are regular beer consumers

52% of total beer drinkers are age 28 to 49, but versus their size in the beer-consuming population, 41% of beer volume is consumed by 21 to 27 year olds

32% of beer drinkers shop for beer one to three times each week

47% of beer shoppers buy wine in addition to beer; 41% add spirits

70% are male

84% are White, 10% Latino, 6% African American

59% have an income above $59,000

Grocery is the most common beer channel choice at 46%

When available, shoppers overwhelmingly prefer to buy cold beer

Mind over Matter

The Functional over the Ornamental

Fear of Tomorrow

Enjoying the Ordinary

The Desire to Fit In

Australia - convenience and health, mature market needing to add value. Alcohol part of the culture

Brazil - status, sociability and convenience, developing market with opportunities for growth and adding value. Market vulnerable to economic volatility, beer and football key to national culture

China - affordability, convenience and status in cities, developing market with huge urban potential, rural areas remain largely unchanged

France - convenience, sociability and status, traditional drinking culture being eroded by changing demands and globalisation

Germany - price, convenience and health, mature market opportunities to add value. Interest in discounters among affluent and poor

Italy - sociability, status and health, mature market adapting to changes but traditional infrastructure

Japan - convenience, status and health, mature market, highly fragmented and source of innovation

Russia - affordability, convenience, status, high consumption of locally produced spirits as well as increasing presence of global brands in the cities, high beer and vodka consumption. Alcohol dependence an issue among rural male Russians

Spain - status, sociability and health, directional market in terms of youth drinking trends older drinkers stick to traditional drinking, young driving the post-modern

UK - convenience, sociability and health, mature market adding value through novelty concentrated retail infrastructure

US - convenience, sociability and health, mature market adding value through segmentation and premiumisation

Finally, the major beer manufacturers will have to compete for an expanding but challenging global market, which will ask hard questions of the positions that global players occupy by category, price point and geography. India will form a major part of this strategy shift and it is already visible with the number of beer brands that have entered the Indian market in the past 2 years. All the research done above talks about beer as a part of the popular culture in developed markets. The challenge is to try and suggest a workable strategy for India based on consumer insight to tap the enormous potential that it offers. India today stands at the forefront of this opportunity and hence it is important for these international players to understand the cultural nuances of the Indian consumer before formulating their strategies for the market.

Conceptual Framework/Problem Definition

India has one of the lowest annual per capita consumption levels of beer in the world, at 1 litre. The biggest international names like InBev/Anheuser-Busch, Heineken and Carlsberg have already started making investments in the market. Carlsberg has already invested close to $ 200 milion in production facilities in the country. The other companies are also entering the market through tie-ups with local players or setting up their own breweries. The growing affluence and increased disposable incomes along with the low average age of Indians presents a huge potential waiting to be tapped by these players. The increased global travel and exposure to western media has led to changing attitudes towards alcohol. This is expected to boost beer sales, while shifting government policy regarding alcohol and reductions in taxes and duties present interesting opportunities for large domestic and multinational players alike. Some of the states have already allowed beer to be sold in supermarket formats thus increasing penetration of beer substantially.

For international players, the race is on to establish local manufacturing facilities and distribution networks, in order to gain first-mover advantage over other entrants. Currently the Indian market is dominated by local players but lack of other options has a major role to play in this. Curiosity and aspirational value attached to imported beer presents a unique market for these international players. Clear opportunities exist for those companies which are partnering with local companies or setting up their own breweries to get a head start in this dynamic market. At this juncture it is of paramount importance for these companies to get their marketing and communication strategy right. This is all the more important because the Indian market and consumer presents a challenge which is different from any other country in the world. Even within India, the cultural diversity is such that different strategies might be needed for different parts of the country.

The current literature reviewed primarily consists of work which has been done in the developed beer markets or talks about projected figures based on empirical data. The biggest gap in such projections is the lack of understanding of the Indian consumer. Launches of a number of successful international products in India backed by such research have failed because of this.

This research will try and understand the cultural differences between the Indian beer drinker and the western beer drinker and do a comparative analysis to gain insights which can be used to design the marketing and communications strategy for these international companies. Beer as a product has been successful in developed countries because of the community culture they have created amongst the consumers. The research will help determine key drivers and key characteristics of the Indian beer market.

Proposed Research Design

The research will be carried out through administering questionnaires to the beer drinking community in urban India as well as respondents in USA, Canada, Germany, UK, Columbia, Brazil, China, France, Poland, Finland, Slovakia, Lithuania and Korea. Detailed interviews will be carried out with some respondents in all these locations through telephonic interview/online interaction to understand the culture of beer consumption there. An analysis will also be done to compare the communication of the top 3 brands of the world in all these countries to see the differences and similarities and how these consumers absorb it.

The Indian respondents will then be shown the communication used in all these countries and insights will be taken on their response to each communication. This will give us insights on the cultural differences and similarities between the Indian consumer and their international counterparts.

The sample size will consist of at least 10 detailed interviews of international respondents and 10 in depth interviews on Indian consumers. The questionnaires will be administered to 150 beer drinkers in India and 50 based abroad. The sample size of the questionnaire might increase based on the response of the target group.

Expected Contribution

The study as earlier mentioned will give a deep insight into the mindset of the urban Indian consumer with respect to beer. It will also look at what are the associations that the Indian consumer has with the alcohol industry in terms of perceptions and specifically with beer. Their responses to international communication will be recorded and analysed to define the key drivers and the key characteristics of the Indian market. The final output as mentioned in the introduction would address at the following heads:

References

1. Global Alcoholic Drinks: Beer -Opportunities in Niche Categories. (2009, April). Retrieved November 25, 2009, from Euromonitor.

2. Pettigrew, S., & Charters, S. (2006). Consumers' expectations of food and alcohol pairing [Electronic version]. British Food Journal, 8(3), 169-180. doi:10.1108/00070700610650990

3. Allio, D.J., Allio, R.J. (2002), "Coors Light in Puerto Rico: battling for local dominance in a global market", Strategy & Leadership, Vol. 30 No.3, pp.13-17.

4. Vrontis, D., & Vignali, C. (1999). Bass plc An assessment, evaluation and recommendations for their strategic approach in entering foreign beer markets. International Marketing Review, 16(4/5), 391-405. Retrieved November 25, 2009, from Emerald Library.

5. Caillat, Z., & Mueller, B. (1996). OBSERVATIONS: The Influence of Culture on American and British Advertising: An Exploratory Comparison of Beer Advertising. Journal of Advertising Research, 36(3). Retrieved November 25, 2009, from WARC.

6. Krass, P. (2005, January). Happy Hour Wisdom [Electronic version]. Across the Board.

7. VINE [Arts & Entertainment] [Electronic version]. (2009, September). COLORADOBIZ, 64.

8. Culinary Currents, Beer, Wine and Spirits. (2008, September 15). Nation's Restaurant News, p. 44. Retrieved November 25, 2009, from EBSCO

9. Beer and Food: Trend and Tradition. (2008, May). Restaurant Hospitality, 98-102. Retrieved November 25, 2009, from Emerald Library

10. Category Insight, Beverage: Beer Demographics. (2008, April). RETAIL MERCHANDISER, 10. Retrieved November 25, 2009, from EBSCO.

11. Lewis, C., & Vickerstaff , A. (2001). Beer branding in British and Czech companies: a comparative study. Marketing Intelligence & Planning, 19(5), 341-350. Retrieved November 25, 2009, from Emerald Library.

12. Beer economics rule at Germany's Oktoberfest. (2004, September 18). Business Report. Retrieved November 25, 2009, from EBSCO.

13. Lane, M. (2007). Encyclopedia of Major Marketing Campaigns (Vol. 2). Retrieved November 25, 2009, from WARC.

14. Desai, S. (2000, November). Understanding Consumption As A Culture Mapping the Indian consumption culture. ESOMAR. Retrieved November 25, 2009, from WARC.

15. Dargan, B. & Brook, J. (2006, June). Oxygen must be more than publicity. ADMap Magazine. Retrieved November 25, 2009, from WARC.

16. Tearno, D. (2002, June). Forging a Global Strategy for a Global Brand How the principles of excellence and responsibility play out around the world. The Advertiser. Retrieved November 25, 2009, from WARC.

17. James, L. (2008, February). The Tippling Points: past and future trends in worldwide alcoholic drink consumption. WARC. Retrieved November 25, 2009, from WARC.

18. Global Drinking Habits (2006, July 11). Retrieved November 25, 2009, from Euromonitor.

19. Beer - Germany, Euromonitor International: Country Sector Briefing (2009, June). Retrieved November 25, 2009, from Euromonitor.

20. Dowding, P., Gaunt, S., & Walters, P. (1999, March). Drinking it in. Admap Magazine. Retrieved November 25, 2009, from WARC.

21. Wilcox, G. B. (2001). Beer brand advertising and market share in the United States: 1977 to 1998. International Journal of Advertising, 20(2). Retrieved November 25, 2009, from WARC.

22. Luik, J. C. (2004). Dispelling the myth: advertising bans and alcohol consumption. Warc Monograph. Retrieved November 25, 2009, from WARC.

23. Opportunities in India (2005, February 15). Retrieved November 25, 2009, from Euromonitor International.

Demographics

 Brand choices

Monthly expenditure on outings and other entertainment options

Monthly expenditure on alcohol and then on beer

Preferred drink at home and at pubs/clubs/social gatherings

Percentage share of beer in this expenditure

Average amount of beer drunk in one sitting

Preferred brand of beer and why

Recall of any particular ad or activity by a beer brand

Perception of beer as a drink in terms of:

What factors are considered while buying the beer of choice at supermarket

Same as above for consumption at a pub

With whom do you drink

When do you drink beer

Top three beer brands, why?

Is there a difference in how u perceived beer drinking earlier and now

Lifestyle, trend in alcohol preference, alcohol consumption habit, do they see beer culture changing in india, then ask about brands,

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