26-06-2012, 05:46 PM
CONSUMER BUYING BEHAVIOUR TOWARDS BEER BRANDS
CONSUMER BUYING BEHAVIOUR TOWARDS BEER BRANDS.docx (Size: 1.21 MB / Downloads: 188)
Executive Summary
As the beer market in India is growing at the rate of 30% approximate. The competition is getting tougher day by day. The beverage industry is extremely competitive, with private labels greatly influencing the environment. A few global “beverage giants” produce many brands, but those brands fall into self contained categories as well. Thus, the “beverage” market is not really one market; it is a collection of markets with many different types of products, processes and requirements. The alcohol industry is very important for the government. It generates an estimated Rs. 16,000crore per annum. Beer as a category is growing at a good rate as it is been marketed for the youth with 60% of the population under the age group of 30 years and the growing spending power of the middle class the opportunities are huge. A few Indian brands like Kingfisher and Hayward dominate the market in this category. But India is seen as a market with exponential growth due to which a lot of Global beer brands are coming to India with its established brands giving the Indian consumer a wider and better bouquet of offerings. This situation of tough competition and entry of global beer companies in India had prompted a comparative study between the Indian Beer Brands and the Global brands. The study tried to cover various factors that affect the consumer and the preference of the target audience with the different beer brands available, Indian as well as Global. It tried understanding the changing pattern of consumption level as well as the reasons for the shift in brand loyalty. The primary reason to conduct this survey was to find out consumer’s awareness & behavior towards global beer brands in India. The factors affecting buying behavior of beer. The consumption pattern and the alternative ways of product promotion. The survey was conducted in the western suburbs of Mumbai, as it covered the target audience. The survey was conducted by speaking to different people who covered the target audience. The sample size of the study was 100. The survey was conducted with the help of the questionnaire by asking people their favorite beer brand and what the factors that influence are then to shift
from one brand to another, the awareness level of the Global beer as well as Indian brands and the factors influencing the changing consumption patterns. The survey threw up some interesting facts about the different beer brands available in the market. It found that Kingfisher was the favorite Indian brand & Tuborg was the favorite Global brand. Both Kingfisher as well as Tuborg scored on different parameters. Both have their distinct strength and weakness. The research also showed that other brands are not far behind and if worked accordingly the scenario of the beer industry would change in the coming years. The present study was conducted with a view to understand beer market in India, emphasis in Mumbai. Undoubtedly the markets are undergoing rapid and wrenching transformation. Various studies conducted in the past have strengthened the above mentioned view. The change in the scenario beer market is governed by two forces:-one is globalization, the extensive growth of global trade and international competition. In the present economic scenario of country, howsoever developed it may be it can ever think of isolating itself from world economy. If any country closes its market, its citizen will pay for inferior quality of goods. But if it opens its market, it will have to confront severe competition and many of its internal business will suffer. The other force is changing life style of consumers in ever- growing market like Mumbai, this force has a definite say. The paradox is that the globalization and changing life style of consumers open up new opportunities even as the threaten the status quo. Globalization is made it possible for Fosters, Carlesberg, Budweiser, Tuborg, Heineken etc. to sell their beers all across the world. Changing lifestyle provoked the Shaw Wallace and Company and united Breweries to come out with a number of brands (kingfisher, Royal Challenge, Hayward 5000, Kalyani Black Label etc.) to cater to the needs of consumers having different life style.
Today’s market is changing at an incredible pace. In addition to globalization and changing life style, we are witnessing new retail forms (e.g. bars, bistors, pubs etc.) and disconcerting erosion of brand loyalty. These changes have created confusion in the mind of companies regarding use of strategies. There are some recommendations given so as how other brands can create a niche for themselves and compete in this market.
Introduction to Beverage Industry
The beverage industry is extremely competitive, with private labels greatly influencing the environment. A few global “beverage giants” produce many brands, but those brands fall into self contained categories as well. Thus, the “beverage” market is not really one market; it is a collection of markets with many different types of products, processes and requirements. The beverage market includes several different products that can be grouped into two main categories: alcoholic (beer, wine, and spirits) and non alcoholic (carbonated soft drinks, juice, water, sports drinks, etc.). Each category, and often each type, of beverage have its unique issues and needs.
Classification of Beverages
Non-alcoholic beverages are broadly classified as carbonated drinks, non-carbonated drinks and hot beverages. India’s non-alcoholic drinks market to grow at 15% CAGR. The fruit juices and fruit-based drinks market is close to Rs 5,000 crores ($1.13 billion), growing at 35-40 per cent annually. The carbonated drinks market is close to Rs 6,000 crores ($1.36 billion) with growth at 10-12 per cent annually.
Within the hot beverages category, India is the largest producer of tea and accounts for 28 per cent of the global production at 956 million kilograms annually. The total turnover of the tea industry is over Rs 8,000 crores ($ 1.8 billion), growing at a rate of 1.2 per cent annually. India is the world’s 5th largest producer of coffee, accounting for 4 per cent of the world’s production.
India has witnessed radical shift in consumption of non-alcoholic drinks over the recent past.
Fast expanding middle class population that is currently around 350 million increased urbanization and rising disposable income are some of the major reasons contributing to this change. Indian non-alcoholic drinks market was estimated at around Rs 216 billion in 2008 and is forecast to grow at a CAGR of around 15% during 2009-2012.
Growing health consciousness among India’s young population has brought about a revolution in the Indian non-alcoholic drinks market. It has been seen that cola sales have fallen dramatically due to rising health concerns and this seems to have benefited the country’s non-carbonated drinks market such as energy drinks and juices.
According to the segment level analysis, the highest growth will be seen in the fruit/vegetable juice market which is forecast to grow at a CAGR of around 30% in value terms during 2009-
2012. It will be closely followed by the energy drinks segment at a CAGR of around 29% during the same period. There is a greater awareness of the ‘functional’ benefits of health beverages and a greater willingness to pay a premium for such beverages. With these strong drivers of growth, it is not surprising that the beverage industry in India has begun responding with products that are marketed clearly on a health and wellness platform.
In India, the Coca-Cola and Pepsi soft drink brands suffered a setback in August of last year due to a product contamination scare. Both have cut profit margins to the bone in order to fend off competition from low-priced local fruit drinks.
Indian consumers are accustomed to drinking a variety of locally-produced soft drinks that are sold in small stands throughout the country. Rural India is still a highly price-sensitive marketplace, so the major soft drink companies are forced to cut profit margins in order to compete there.
India's purchasing power parity per capita of US$2,850 is representative of a nation in which the average consumer has insufficient income to engage in discretionary spending. Nevertheless, during the hot season, spur-of-the-moment beverage sales are commonplace.
Beverage companies cannot afford to ignore India's rural consumers if they wish to expand market share. According to data release by the PRB, only 28 percent of India's population lived in urban areas in 2003. On average, rural consumers have a lower income level than their urban counterparts and demand lower-cost beverage options.
In order to remain cost competitive, soft drink companies have to contain the transportation costs involved in expanding their distribution network into widespread towns and villages. Faced with high fuel and vehicle costs, companies are turning to less expensive means of transportation including ox carts and rickshaws.
Another challenge facing the major soft drink companies is regaining consumer confidence in the aftermath of a well- publicized scandal over the presence of pesticides in some soft-drink products. A major publicity campaign aimed at regaining consumer confidence seems to be working, but bottlers need to avoid any more issues that would throw product safety into doubt.
Recovering and maintaining an image of quality will be a key weapon in the struggle to take market share away from locally produced fruit beverages. Indian consumers are ready to opt for soft drinks, but not at a premium price.
Alcoholic Beverages
The alcohol industry is very important for the government. It generates an estimated Rs. 16,000
crores per annum in spite of the fact that the per capita consumption of liquor in India is the lowest in the world. The total liquor industry is worth Rs. 2,000 crores. IMFL accounts for only a third of the total liquor consumption in India. Most IMFLs are cheap and are priced below Rs. 200 per bottle. Alcohol sales proceeds account for 45% of the total revenue collection in the country. Whiskey accounts for 60% of the liquor sales while rum; brandy and vodka account for 17%, 18% and 6% respectively. MNC’s share is only 10% and they have been successful only in the premium and super premium ranges.