Transcript What is McDowell`s Vintage? - Faculty Directory | Berkeley-Haas

McDowell’s Vintage Premium Malt Whisky
Integrating the Marketing Mix
EWMBA 206.1
Fall 2009
Ganesh Iyer
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Agenda

Administrative stuff, presentations and exam.

Integrating the marketing mix…McDowells Vintage
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Course Wrap up

Questions, Evaluations
Ganesh Iyer
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Presentations

Remember presentation format handout.

Please email to presentations to Houman by say 2.00 pm on the
10th Thursday. Please name your powerpoint file as Group
#.ppt
[email protected]


I am hoping that each group finishes in approx 8-9 mins. which
will help entertain 1-2 questions or comments from the class.
Ganesh Iyer
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Exam

Second help session Saturday December 5th, 10.30 am to 12
noon.
» “Ask Iyer” any question on the course materials

Third help session Saturday 10.30 to 12 noon December 12th
» Solution to sample exam.

Final will be easy, but…

Any questions
Ganesh Iyer
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Iyer’s Framework for Marketing Analysis
Perceptual mapping
Company Analysis
Marketing Myopia
First mover advantages
Customer Analysis
Competitor
Analysis
Positioning
Segmentation
Marketing Strategy
Pricing process (ODI)
Pricing and innovation
Non Traditional advertising and promotions
BMW Z3
Direct marketing
Calyx and Corolla
Product
Marketing Orientation
Branding
Intel Inside
Price
Promotion
Place
Traditional Advertising Planning Process
Going to market
Goodyear
Market
Ganesh Iyer
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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.
Ganesh Iyer
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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
Ganesh Iyer
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Consumer Behavior & Segmentation
Cultural 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
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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.
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Marketing Environment
Availability 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.
Ganesh Iyer
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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,
Ganesh Iyer
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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.
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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.
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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
Ganesh Iyer
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Iyer’s Framework for Marketing Analysis
Perceptual mapping
2. Company Analysis
Marketing Myopia
First mover advantages
1. Customer Analysis
3. Competitor
Analysis
Positioning
Segmentation
Marketing Strategy
Pricing process (ODI)
Pricing and innovation
Non Traditional advertising and promotions
BMW Z3
Direct marketing
Product
Marketing Orientation
Branding
Price
Promotion
Place
Traditional Advertising
Going to market
Goodyear
Market
Ganesh Iyer
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2. Competitive Analysis
Brand Pricing Information
Scotch
Price ($ equiv)
Chivas Regal
Johnny Walker Red
Cutty Sark
Vat 69
Rs. 820/- ($23)
Rs. 740/- ($21)
Rs. 640/- ($18)
Rs. 640/- ($18)
Indian Premium
Peter Scot
Royal Challenge
McDowells Premium
Rs. 430/- ($12)
Ganesh Iyer
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Competitive Positioning Analysis
Positioning Decision
Position as a superior PIW, or as an alternative to
Scotch? At what price
Premium
Indian Whisky
Scotch
Rs 750
Rs 400
??
??
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What did they do?
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Competitive Positioning
Who am I?
What is McDowell’s Vintage?

A whisky which is an alternative to Scotch.
» The meaning of “Scotch” ???

A high quality whisky which will be the aspirational brand for
current Premium Indian Whisky consumers.

Research
» Blind test and “as brand” test.
» Test whether scotch claim will be accepted as brand.

Real market was
» nouveau riche + special occasions drink for current PIW drinkers
» but to be able to sell-in as the aspirational brand to these
consumers you need to be perceived as a credible alternative to
scotch.
Ganesh Iyer
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Positioning: Why buy me?
Why Should the Consumer Buy McDowell’s Vintage?
1.
Because it will offer a blend quality equal to a regular Scotch
(Johnnie Walker Red, Vat 69) and distinctly superior to all
Indian Premium Whiskies.
2.
Because it will have an image/aura which will satisfy the
aspirational needs which serving and drinking Scotch satisfies.
3.
Because most Scotch whiskies available locally (from
bootleggers) are spurious.
Support for creative.
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Marketing Objectives

To launch McDowell’s Vintage Premium Malt Whisky and sell
30,000 cases in the first year. (in 4 metros)

To provide a direct alternative to Scotch whisky drinkers.

To capture and upgrade drinkers of premium whisky segment
from competing brands.
Ganesh Iyer
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Iyer’s Framework for Marketing Analysis
Perceptual mapping
Company Analysis
Marketing Myopia
First mover advantages
1. Customer Analysis
2. Competitor
Analysis
Positioning
Segmentation
3.Marketing Strategy
Pricing process (ODI)
Pricing and innovation
Non Traditional advertising and promotions
BMW Z3
Direct marketing
Product
Marketing Orientation
Branding
Price
Promotion
Place
Traditional Advertising
Going to market
Goodyear
Market
Ganesh Iyer
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3. Marketing Strategy
Product Strategy
 Launch a blend distinctly superior to any PIW and a taste and
appearance similar to Vat 69. The brand name connotes
something rare and precious to support the alternative to Scotch
claim
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The package design the like of which has not been seen in the
country and of truly international class.
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Launch in Quart (750ml) and Pint (375ml) (and no Nip (180ml)).
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Why not launch the Nip…(Exclusion)
Ganesh Iyer
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Pricing

Price McDowell’s Vintage as the most expensive product in the
(PIW) market to complement its image.

Need to achieve substantial distance from other premium Indian
whisky prices.
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Retail Price chosen is Rs. 550 - 560.
Ganesh Iyer
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Advertising and Promotional Strategy

How do we develop brand image for this “status” product in an
environment where mass media communication is illegal?
Ganesh Iyer
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Direct Marketing Strategy

A direct mail campaign, addressed to the “old money” and
establishment group as well as the nouveau riche as identified
from: (200,000 mail ins)
»
»
»
»

gymkhana clubs
racing associations
lists of guests from 5-star hotels
automobile associations
What was the rationale for using direct marketing in a mass
market consumer product category?
» Direct marketing in the 1980’s and 90’s was rare in India…only
done by a few industrial and durables sellers.
Ganesh Iyer
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Direct Marketing Strategy

Tightly defined market in terms of geography
» 6 major metros (with population of around 55 mn) are the major
markets.
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p.u. contribution very high

Using DM for an image product. This is different from the U.S.
experience.
» The direct marketing campaign itself became a social thing
Ganesh Iyer
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Direct Marketing Strategy

Use direct mail to:
» create launch awareness and excitement. (because of social
dimensions of direct marketing in India)
» build a core group of vintage consumers.
» maintain a continuing “dialogue” with this group and track
their behavior
» Focus on lifetime consumer value.
Ganesh Iyer
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Teaser Mailers…Pre-Launch

A sequence of 2 provocative teaser mailers to generate awareness and
interest 2 weeks before physical launch.
» teaser 1: “take a walk johnnie”
» teaser 2: “what an answer for 69”
» teaser 3: “she was regal” (not chosen)

The mailers will introduce McDowell’s Vintage as an alternative to
Scotch.

Teasers have a response device built in (invitations for complimentary
drinks at five star hotels) to identify “prospects” from “suspects”
Ganesh Iyer
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Launch Mailer


McDowell’s Brings You a Rare Classic
To all prospects:
» Introduced McDowell’s vintage premium malt whisky as an
alternative to Scotch
» Presented the total product package, together a response device.
Response to a questionnaire earns privilege coupons for
complimentary Vintage drinks at 5 star hotels. (9% response
obtained).
Ganesh Iyer
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Theme Mailers…Post launch
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3 theme mailers.
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Build around antique/priceless/rare items and subjects and relate it to
Vintage.
» “the what is what of crystalware”
» “distinguished decanters”
» “vintage time pieces”

The mailers give prospects the expertise to talk about the fine things in
life and to contemplate purchases in exclusive and expensive product
categories. (making DM a social phenomenon...small company
executives solicitation)

Communicated that this will be an ongoing relationship.
Ganesh Iyer
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Media Advertising

McDowell’s Vintage page:
» a regular & standard feature column in leading national
dailies and newsmagazines. Feeds off the information on
vintage subjects in the theme mailers.
» to break 3 months after brand launch.
» Note the coordination between direct mail and media
advertising
Ganesh Iyer
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Consumer Promotions

To 350 selected opinion leaders:
» a velvet wrapped bottle hand delivered to the individual.
» tied to the direct mail campaign.

Tie ups with all five-star bars for a special “vintage weeks” when
“privilege drinks” can be served (sampling related to the
response device).

Note the coordination between direct marketing and salesforce
activity.
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Trade Promotion

Brand image window display
» display in all Class A outlets

In-shop activity:
» 300,000 coasters with the teaser campaign design given to bars
and pubs for in-shop distribution.
» In store merchandising materials which introduced the brand and
also linked to the launch mailers.
Ganesh Iyer
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Trade Promotion

Dealer detailer:
» dealer detailer developed to aid the salesmen during launch
distribution.

Other giveaways:
» playing cards
» clocks
Other Activities
Event Marketing
 McDowell’s Vintage Car Rallies.
 McDowell’s Vintage Jazz.
Ganesh Iyer
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Learning

Marketing strategy for the launch of an image product in a
developing market from the perspective of a domestic firm.

Launching an image product requires an integrated strategy with
every element of the marketing mix should working together.

Tactics and execution matter a lot.
Ganesh Iyer
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Postscript

Vintage created the super premium segment in India.

The super premium market has exploded.
» Consumers wanted even more distance from the PIW and were even more
willing to pay for Scotch quality

McDowell and other firms started pushing up this ladder and McDowell
launched Signature and Single malt

The presence of Vintage constraining the super premium brands and
Vintage phased out.

The entire direct marketing database asset and the Vintage strategy
transported to Signature.
» http://www.signature.indiatimes.com/
» http://www.clubmcdowell.com/brands/signature_main.htm
Ganesh Iyer
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Postscript
Evolution of a Product Manager
Evolution of a Product Manager
Grass does not grow on busy sidewalks
Ganesh Iyer
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