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Market
Potential
Study
Opening beverages retail
outlet in Delhi

MBA-Marketing Project Report

 Chapter 1

Introduction
1.1 Introduction to Problem

This thesis work introduces the bigger challenge of opening a wine retail outlet in Delhi.
This chapter discusses the basic nature of product ,the complexities in the retail of specific
product and the related aspects of successful implementation of such an outlet in Indian
Context .

This chapter defines the liquor and the place of wines in liquor hierarchy .Then it elaborates
on the retail and import of such products to a protected nascent market like India. It furthers
the focus on the retail aspects of wine marketing in India . The report contains the
relationship between the changing consumer prospects and the emerging option of opening
up a wine retail in India with focus on Imported wines .

1.2 The Product - Wine

The Wikipedia defines liqueur is an alcoholic beverage that has been flavored with fruit,
herbs, nuts, spices, flowers, or cream and bottled with added sugar. Liqueurs are typically
quite sweet; they are usually not aged for long but may have resting periods during their
production to allow flavors to marry. Liqueurs are mixtures of spirits, sweeteners, and
flavorings like herbs, fruits, nuts, and flowers. They're sometimes served as after-dinner
drinks, but they're more often poured on desserts or mixed into cocktails, milk, or coffee.

According to food subs. com, Wine is an alcoholic beverage made from the fermented juice
of fruit, usually grapes. There are four broad categories: table wines, sparkling wines,
fortified wines, and fruit wines. Table wines are the most common, and they're grouped by
color--red, white, and blush, which is sometimes called rosé. A red wine should be served at
room temperature, and it goes well with hearty, meat-based dishes like steak and
spaghetti. White and blush wines should be served chilled, and they go best with lighter fare,
like fish and chicken. Many wines, called varietals, are named after the variety of grape used
to make them. Cabernet Sauvignon, Zinfandel, and Pinot Noir are popular red varietals,
while Chardonnay, Chenin Blanc, and Johannesburg Riesling are popular white ones.

1.3 Background

The Indian retail sector is experiencing fastest growth than any other sector in Indian
Economy. Globally , India and China are among the fastest growing economies in the
aftermath of the global financial recession. Since 1992, when Indian government liberalized
Indian economy ,the passage for integration of Indian economy into world economy got
clear. The major macro economic reforms and export import de controls along with changes
in exchange rate determination mechanism has created opportunities for the Indians and the
world community to prosper together.

The organized retail still constitute a marginal segment of larger retail sector here in India.
The un organized retail has been a result of political bargaining as well as economic
compulsions. The changing Indian consumer with surging purchasing power is knocking at
the doors of change. Market deregulation and surging purchasing power of Indian consumers
has made India the darling of foreign direct investments in processing as well as retail sectors
of economy.

The upbeat national economy is attracting substantial investments in the value addition
networks as well as supply chains. The increasing awareness, influx of western culture and
media is constantly shaping the consumer’s behavior and lifestyle practices . The consumer’s
surplus and lifestyle expenditures are on the rise.

This research seeks to discover the scope for retail of imported wine products here in Delhi
region –one of the most competitive markets for wines and related products.
This research focuses on the feasibility of opening a wine retail with strategies to drive and
benefit from the changing market trends and expectations.

1.4 Research Objectives and Methods

The major research questions are :

 What are the prospects for the retail of imported wines in National Capital Region of
Delhi ?

 What can be the major challenges before the import and marketing of wines products?

 How the possible solutions can be devised for the successful implementation of such
a retail venture in this part of India?

 What can be the obvious strategies to maneuver the business in current business
environments?

Sub questions are :

 How the consumer behavior is undergoing transformation and how can we be in

competition and even ahead of it?

 How the markets can saturate and how to re invent product life cycle ?

 What can be the short and long term consequences and trends affecting the
market?

 How the strategies can be blended in local flavor to successfully benefit from on
going consumer revolution in India ?

The focus of this work is on the evaluation of various direct and lateral factors behind the
success of imported wines retail in Delhi . This elaborates on the business feasibility
evaluation of opening up such a venture in Delhi
This research was carried out by collecting data from secondary data sources, such as the
Internet, articles, publications, etc., and conducting a survey of people in Delhi and regions
of Gurgaon and Noida-in vicinity of Delhi .

Since the retail itself is a vast sector and lots of research has been conducted on these aspect ,
we choose to focus and drive our research only in tune with our objectives as determined
previously .

The research work has its limitations:

 The small shop owners, food retail outlets ,Canteen Stores Department –where
subsidized good are available ; have been kept out of the research.

 The consumer behavior on its part is ever evolving and is subject to change every
time. The existing and future research about the consumer perceptions always focus
on one aspect of the issue and even neglects the other half.

 The other limitations are the genuineness of the data provided by the respondents

1.5 Structure of the Report

Chapter two focuses on the theoretical aspects of the issue .The chapter involves cross
examination of market forces with emphasis on the Michael Porter’s five forces model.
Further porter’s industry analysis techniques would be utilized for evaluating the strengths
,weakness , options as well as threats to launch of such a venture in Delhi region .Various
aspects regarding the consumer decision making ,consumer behavior management would be
incorporated here. Literature review will be carried out to cross examine some of relevant
existing research publications regarding this field.

Chapter three details regarding the research methodology and the related aspects of data
collection and compilation

Chapter four incorporates the data analysis ,which is in fact the situation analysis component
of this research thesis.

Chapter five concludes with the findings and the recommendations

 Chapter2

Theoretical Framework
This chapter discusses the theoretical context of our exercise and intentions to open up the
wine retail shop / outlet in Delhi. The chapter discusses the Michael Porter’s five forces and
various other models to evaluate the current and probable industry structure in the context of
wine marketing and wine retail industry. Porter’s five forces develops the foundation for
industry analysis .It leads the way in developing insights into how the interplay between the
buyers and the sellers as well as the barriers ,together distinctively shape the industry.

2.1 Porter’s Five Forces Model and Competitive Positioning Rationale

Porter, M.E. (1979) illustrated the presence of five forces that drive the industry structure
through the various stages.

The threat of the entry of new competitors

Profitable markets that yield high returns will certainly attract new firms. This results in
many new entrants, which eventually will decrease profitability for all firms in the industry.
Unless the entry of new firms can be blocked by incumbents, the profit rate will fall towards
zero .

 The existence of barriers to entry The most attractive segment is one in which entry
barriers are high and exit barriers are low. Few new firms can enter and non-
performing firms can exit easily.

 Economies of product differences

 Brand equity

 Switching costs or sunk costs

 Capital requirements

 Access to distribution
 Customer loyalty to established brands

 Absolute cost advantages

 Learning curve advantages

 Expected retaliation by incumbents

 Government policies

 Industry profitability; the more profitable the industry the more attractive it will be to
new competitors
Conclusions
The largest market for imported wine is “on-premise”, at top-end hotels, restaurants, bars and
nightclubs. Four and five-star hotels, Western restaurants and upscale local chain restaurants
generally carry a selection of imported wines, alongside local offerings.

The retail market for imported wines is also growing. Foreign supermarket chains normally
have a wine corner at outlets located in middle to high income districts. High-end domestic
department stores also carry imported wine, as do independent wine shops.

 Knowledge of wine producing countries and varieties at consumer, and in many cases
trade, level is limited. France and Italy have enjoyed higher recognition due to their
inherent image and higher levels of promotion, but some blind tastings have shown
that consumers often prefer the fruitier and fuller flavors of New World wines.

Findings suggest however that more than 70 percent of the wine consumed a is red. Its
popularity is linked to perceived health benefits and the fact that red is a color traditionally
linked to festivals and gift giving.

Growth is being driven by continued increases in disposable income among middle-income

consumers with a propensity to spend on luxury products such as wine.

Recommendations

Increase the Level of Consumer Awareness

tasting events and links to wineries. Try to promote on-line sales.

tasting rooms in wineries. They are the most successful instruments promoting
wines in the Front Range.

was observed in the in-store coupon experiment.

- maintain relations with local food column journalists.

Additionally, articles about wineries in business sections will help increase

awareness.

i.e. Events, festivals, marathons, or other events which promote luxury life
style and Glamour

Increase the Retailing Volume and In-Store Presentation

Customers are frequently not aware what wines are sold at the stores they are visiting. Some
stores have wines presented in awkward places (i.e. among imported wines) where customers
would not look for them.

Educate retail staff on wines. Uninformed consumers rely highly on retail staff
recommendations. Retail staff is the third most important source of information mentioned by
wine consumers.

attention and educate customers.

 specialty

and provide information such as type of wine grown in region, special growing

conditions, etc.

recommended side dishes, and information on any prizes and positive reviews from the wine
media. Label wines showing awards and prizes. This will increase the perceived quality of
wines.

Support in-store wine tasting (if legalized) and promotions.

Increase market penetration

should be priced competitively with other wines available at retail levels.

Increase the image of Wines

Use additional tags such as “Proud to be Wine Drinker” or any local identification sign.
Consumers are willing to support local products.