ABSOLUT: Brand Extension

Case Study Competition 2012

Emerging Leaders Programme Client Services

Background
ABSOLUT is one of the world's best-selling international premium spirits and India's largest- selling imported vodka
ABSOLUT is now a part of Pernod Ricard, well-known for high quality spirits like Chivas Regal, The Glenlivet, Ballantine's, Blenders Pride and Royal Stag ABSOLUT values are Perfection , Purity and Choice Unique branding elements shape of bottle, spelling of variants : Citron, Mandrin, Raspberri, Vanilia, Kurant, Peppar

HYPOTHETICAL
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Background
ABSOLUT, hypothetically, are considering brand extensions.
Some of the categories considered are : Premium whiskey Musical Instruments Premium Chocolate Male Fragrance Retailing ( ABSOLUT Stores a la Diesel, FCUK) Accessories belts, shades, handbags Handcrafted exclusive 22K Gold Jewellery Clubs

HYPOTHETICAL
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Business Question

Which 2 categories can be shortlisted for further exploration for extension?

HYPOTHETICAL
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Research Considerations
Opportunities in Indian market for potential categories
Use Secondary and Primary Sources

Primary Quantitative and Qualitative

HYPOTHETICAL
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TO BE KEPT IN MIND
Target group congruence
Category construct and competition

ABSOLUT values and category values

Identity vs Diversity

HYPOTHETICAL
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A little Background Information..

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The Indian Landscape

Demographics
Population: ~1.2 bln (2nd largest country in terms of population) Largest democracy in the world Median age: 25 years Urban population: 29% of total population There are 14 official languages apart from Hindi, which is the national language.

Economy
The Indian economy is the eleventh largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP) The country has successfully overcome the effect of the global economic slowdown and the GDP is expected to grow at 8.5% during fiscal 2010-11

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India A huge business opportunity

India represents a large business opportunity in the alcoholic beverages market, as it has one of the lowest per capita consumptions relative to other developing markets.
Per Capita beer consumption of India is 2.3 Litres; compared to China which is 30 Litres
For spirits, the per capita consumption is 0.05 litres, compared to China which is 2.51 litres

This low per capita consumption is expected to increase as

Disposable income complemented by absorption of western ideologies increases

Reduced negative perception towards alcohol consumption, at least in the context of social
drinking Presence of various pubs, discos and restaurants which are not solely andocentric spaces. Declining average age of initiation to alcohol

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Source: McKinsey Quarterly
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Indias share-of-wallet is shifting from basic necessities to discretionary items

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The Indian alcoholic beverages

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Source: Datamonitor Market Data Analytics
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Although market value and per capita spend in India is very low, it is the fastest growing market

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Source: Datamonitor Market Data Analytics
Copyright 2012 The Nielsen Company. Confidential and proprietary.

A SNAPSHOT
MARKET White Spirits Market in India was valued at INR 46 bn in 2009 and is expected to grow at 6.6% over 2009-14 The market primarily includes Vodka and Gin with white rum and tequila accounting for a small share Changing profile of consumers and their propensity to experiment with premium brands and varieties of spirits has fueled growth potential in the market Rising income levels Changing lifestyles & higher acceptance Huge market potential Entry of International brands Growth in Organized retail

DRIVERS

CHALLENGES

High tax structure and Regulations Advertising ban on alcohol Innovative packaging and flavours Increasing joint ventures Rising mergers and acquisitions Promotional activities Launch of flavoured energy drinks

TRENDS

COMPETITION

The market has a huge influx of foreign players who have either set up joint ventures or have set up subsidiaries to capitalize on the potential in the market Market entry has barriers owing to the stringent regulations and tax structure of Indian 13 government

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