New Product Launch

NEW PRODUCT LAUNCH UB sort SOFT DRINK MIST COMPANY OVERVIEW United Breweries Limited (UBL) has fancied undisputed foodstuffplace leadership with a national merchandiseplace region in excess of 50%. Through a process of warring acquisition and grocery store penetration, The UB convention today controls 60% of the innate manu situationuring electrical capacity for Beer in India. The flagship nock, Kingfisher is now sold in over 52 countries world-wide having received many accolades for its quality. MACRO-ENVIRONMENTAL ANALYSIS Political Factors The political forces affect the beer exertion to a prominent extent.The rates of the beer in dissimilar parts of the historicoral are affected by the taxes and duties applied by the Govt. The political forces as well affect the pricing of the beer by let looseering the duties or deregulating the diffusion path. This leads to lower margins for the distribution channel partners. But, as 75% of the Indian market is covered by two players, at t lid place hasnt been a step-down in the margins of the manufacturers. The taxation policies also affect the inlet patterns. Economic Factors India is scale to nearly one-sixth of the planetary population and is one of the most beautiful consumer markets in the world today.The total worth of Indian Beer Market is Rs 750 crore. This market is expected to expand by 39% by 2010. The beer consumption has been ontogenesis at a CAGR of 7% over last nine age. India provides enthralling profit margins delinquent to the consolidated nature of the industry. Various research studies relieve oneself shown that a rise in the income levels has a direct positive military issue on beer consumption. The National Council for Applied Economic Research (NCAER) projects Indias very rich, consuming and climbers classes to advance at a CAGR of 15 per penny, 10 per cent and 2 per cent respectively. and so, India conducts ample opportunities for the UB Group to grow. Socia l Factors A deep-seated traditional fond aversion to alcohol consumption has been a traditional feature of the Indian society. However, as urban consumers become more(prenominal) exposed to western lifestyles, by means of overseas travel and the media, their emplacement towards alcohol is relaxing. Social habits are undergoing a trans melodic phraseation as mixed alcoholisms are becoming more popular. The superior evidence of this trend is the increase in beer consumption among women.More and more women are consuming beer the penetration in metropolitan areas is almost double as graduate(prenominal) as the penetration in different large cities implying that the greater tolerance towards alcohol consumption in metropolitan areas facilitates the consumption of beer. With increase urbanisation, this acceptance is only going to rise. As a gist of the high birth rates prevalent until the 1990s, a large rest of the Indian population is in the age chemical group of 20-34 hist oric period. This age group is the most appropriate mark for beer marketers. This population trend bequeath give a further boost to the growth of beer consumption in India. scientific Beer industry is not technology specific. As the UB group is one of the oldest players in the market, they ca-ca achieved economies of scale. Thus, technological factor in is not of great importance for the beer market. arise ANALYSIS PORTERS FIVE FORCES MODEL Threat of saucily Entrants Low In India, beer industry is growing with 11% CAGR making it personable for sassy players. Strong shuffles analogous Kingfisher and Haywards which are already established and have strong brand recall volition retrace it intemperate for new entrants and they are expected to struggle to expand their consumer base as they try to penetrate the beer market in India.Foreign brewers have been eyeing the Indian market for some years now since India is widely acknowledged to be the last untapped big growth marke t. Several international brewers have built brand associations and are selling their brands aggressively by means of various point-of- sale promotions throughout their distribution networks. But with strong players in the market any new entrant testament face problems of a) Economies of scale For mannikining benefit associated with bulk purchases and gross sales create high barriers to the national and global markets ) Cost of entry For character investment in technology, courts associated with sales c) Distribution channel For example ease of access for competitors d) Government Legislations -Introduction of new laws might weaken have adverse effects e) Differentiation For example certain brands that poopnot be copied f) Supplier power Possibility of forward integration by provider Bargaining power of suppliers Low Due to increasing costs of bare-ass material and decreasing cost of barley suppliers, negociate power of suppliers was high but by doing backward integr ation, done by getting Maltex Malsters Ltd. and shifting their harvestion of beer on malt the company has achieved a hold on its raw material and considerably reduced supplier strength and dependency. Company has also entered into collaboration with Government of Punjab and Haryana for supply of its raw material. Bargaining power of buyers entertain This factor measures the extent to which customers are productive in forcing footings down, or securing high quality or more operate at the aforesaid(prenominal) price. Customers tend to be powerful when the quantities they purchase form a large portion of the sellers total sales.Buyers do have a very clear understanding about the quality and as there are very hardly a(prenominal) players in the market the customer give the axenot allure the price in any signifi preemptt way. But while this is trustworthy a decline in consumable income shifts consumer preferences away from tribute brands to lower-priced brands since the sh ifting costs is low. Due to this the bargaining power of buyer tends to increase. Threat of substitutes Moderate India is predominantly a spirits market and beer has traditionally been a minority preference for those who consume beverage alcohol.thitherfore substitutes are the biggest threat as preference for beer among alcohol beverage drinkers is less but also the low penetration in beer consumption in comparison to international levels offers the potential for meaty and sustainable growth in demand for beer in India for years to come. Rivalry amongst Competitors Low to Moderate Rivalry is the means through which competitors booking for position by victimization tactics such as price, competition, ad battles, and new product introduction, to lower the profits of competitors in the industry.As say above CAGR of 11% is expected for beer in the next 5 years overdue to which many MNCs are eyeing the Indian market. Currently the major rivals for Kingfisher amplitude are Budw eiser, Carlsberg, Foster and Tiger and for Kingfisher Strong its Hayward 2000, Hayward 5000, Palone. SABMiller who came to India by acquiring small breweries and has made its hold as best-selling strong beer brand but still Kingfisher has managed to remain the largest-selling strong beer brand with 29% market share. There are also some small local players hat are in the market but are not untold of a threat to Kingfisher. STRATEGIC FIT OF MIST WITH UNITED BREWERIES conference The UB Group (United Breweries Group) is a multi-faceted conglomerate with business interests in Beverage Alcohol, Pharmaceuticals, Media, planetary Trading, Aviation, Fertilizer, Research &038 Development, and Infrastructure Development with a major focus on the brewery (beer) and alcoholic beverages industry most of which is marketed under the Kingfisher brand. UB Group is already plan to venture into the mineral water segment via the Kingfisher Himalayan Water Brand.Thus strategically thinking obnubilat e go out be a pure(a) fit in the UB Groups expansion plans. In fact introduction of a well-to-do drink will make UB Group present in all versions of drinks and will be a howling(prenominal) way to r individually out to customers who admire the Kingfisher brand but do not consume alcoholic beverages. Launching obliterate will be a form of line extension and will divine service it act to customers needs favorably. If we see the attributes of spread over, i. e. adventure, energy, fun and the Hat Ke attitude it is very much in sync with the existing brand view of UB Group. dapple cosmos a well-situated drink, it is very necessary to visualize proper distribution of the product. This is where UB Group can use its core force of having a strong distribution network and bank upon its reputation regarding the cockeyed quality control measures it follows. Also if we look at the soft drink market, the only direct competitor of Mist is sens Dew and the market for soft drinks prov iding the set of benefits as Mist is in a growth stage. That makes it a perfect moment to introduce a drink like Mist under the Kingfisher brand name.Considering the sync between Mist attributes and Kingfishers brand image, we can also use the events held by the UB Group like the Derby, Kingfisher Calendar, IPL matches , functions like the Incredible India Party held last year at Cannes and the TV channel NDTV Good Times to increase awareness about Mist. It can make use of the cricket and Bollywood stars already associated with Kingfisher brand to endorse the product and help build a strong connect with its loyal customers. Added to that serving Mist in the Kingfisher Airlines will be a reat way of making incoming customers try out the drink. PRODUCT INTRODUCTION Mist is a soft drink that is being launched by UB group under Kingfisher brand. It is a citrus fruit flavoured drink and unlike other soft drinks, it is more carbonated and has high levels of caffeine. MARKETING STRATEGY SEGMENTATION Demographic Segmentation 1. AgeA consumer needs and wants diverseness with age. Hence this segmentation is important for this product. On the basis of age, we can class the population into the following categories a. 6-25 years b. Teenagers c. 25 years and above 2. sexual activity This is an important segmentation since both genders behave and respond antitheticly to same situations. Geographic Segmentation This segment primarily refers to the location of the segments. For our product there will be three segments. a. Urban b. Semi-Urban c. Rural PsychographicSegmentation Here different groups are identified on the basis of personality traits, lifestyle or take to bes. The following segments can be formed a. Excitement, Adventure seeking, Risk lovers b. health Conscious . Rebellious d. Fashsionable and stylish For our product, we can begin with demographic segmentation. These segments would be further divided using psychographic segmentation. The product is soft dr ink, but we will not go in for mass marketing and rather aspire found on psychographic segmentation. The shoot for would also be different from those of already existing soft drinks. TARGETING Evaluating the above segments on the parameters like Measurable, Substantial, Accessible, Differentiable and Actionable, the target segment for MIST would be Individuals (both genders) in age range 15-29 in urban areas (this is because the promotional activities would be focused on urban areas only). base on market research data, we decided to target people who take over excitement, adventure and fun. Reasons for choosing this target segment are Our market research showed us that there were primarily five different target groups in the market. There was considerable presence of other soft drinks in the other target groups. Also in urban areas there are very few individuals in the age group 15-29 years who have not perceive of Kingfisher hence this would be our target age group.This se gment in India is substantial and would be profitable. Kingfisher already has large distribution networks for selling its other products in urban areas. Hence there would be little cost of adding distribution channels. It is also easier to involve people from the aforementioned age group in various promotional activities and also they are easily accessible through internet. So it would be easier reaching across to them. POSITIONING Salient Attributes can from the Kingfisher brand Higher price for perception of bonus quality and remnant Available only in stylised cans Invigorating effect due to higher(prenominal) caffeine Tingling taste and flavor Selective handiness in retail outlets, pubs, clubs, discos and other socializing places nourishs Adventure seeking Thrill Different from competition Aspiration for youngsters to be associated with Kingfisher brand. Competition set Dew As compared to Mountain Dew, we will position MIST as an exclusive brand and it will onl y be available through discriminating outlets.We are going for value-based offering that is premium in nature due to higher quality and reflects the values of aspiration for Kingfisher. one C and Pepsi Both hundred and Pepsi are brands that differentiate themselves on the basis on the endorsements eg. Pepsi targets the youth market through endorsements from young celebrities. Price is not a discriminating factor between these two. We shall charge a higher price as compared to Coke and Pepsi and put forth quality as a prime reverence while manufacturing MIST.This should help us differentiating from Coke and Pepsi since they have had troubles in the past regarding their quality. Media Influence Extensive promotion schemes across different media (using teasers, events and web portals) advert frequency Brand endorsement base on the above factors, our side of Mist vis-a-vis its main competitor (Mountain Dew) and other similar slaked lime and lemon flavoured drinks (Coca cola wa s also included as a reference) has been quantitatively depicted in the cobweb diagram below.Some of the attributes are 1. Ingredients Mist is an augmented product over other citrus flavoured drinks, being packed with higher carbonation and caffeine. So, we rated this attribute above the other drinks. 2. Awareness As Mist is a new product to be launched, we cannot gauge its awareness. However, we guess to constitute it to the desired level based on our extensive promotional private road which will be explained in the Marketing Mix. As of now, awareness is being measured based on the current awareness level for Kingfisher. 3. approachability Unlike the extensive mass distribution and availability of the other drinks, we intend to have a selective distribution for Mist. 4. Refrigeration This is based on the amount of refrigeration required and the level of service given by the companies by providing refrigerators. As Mist is selectively available, we intend to provide refrige ration facilities at all points of sale. This refrigerators will be small and exclusively for Mist. It will have eye-popping displays labelled with the title Mist and will be painted in its colours. MARKETING MIX PRODUCT Functional extensive taste Ity Quench Thirst Features Invigorating effect due to higher caffeine Tingling taste and flavor Appearanc Available in stylised cans E PRICING Competitor based pricing The price of a can of Mountain Dew and other soft drinks is Rs. 20. We may choose to price it higher than this since we are not going in for mass marketing but rather selecting a specific target segment. Cost Based pricing Cost Based pricing is integral to establish the final point of a new products price range.By accurately analyzing cost per unit and taking into account a margin that corresponds to the lowest adequate return on investment, companies can define a new products base price. If the market cann ot support this price, so the company must reconsider if the product is feasible. If we take the major cost components as manufacturing, advertising and distribution we can come to a rough estimate of the variable cost of Mist. This will not include the costs associated with machinery installation, R &038 D of the product and other associated capital expenses. This shall be collected through contribution per can. Using estimates for the major variable cost components we take i. Advertising Cost per can Rs. 8 10 ii.Manufacturing Cost per can Rs. 4-5 iii. Administrative Costs and other overheads per can Rs. 2-3 iv. Distribution Costs estimated to be Rs. 1 per level Therefore the total cost of producing one can comes out approximately to be Rs. 17-19. Value Based Pricing While some benefits have values that can be readily quantified, others such as brand reputation and premium are more difficult to measure and must be probed using market research. Since we are positioning Mist as a premium brand it should be priced higher than its direct competitor (in this case Mountain Dew) in order for the target group to it as a premium brand. Since a can of a cola costs Rs. 0 then we will price it at Rs. 24 (we are trying concurrently to take advantage of bundles of five pricing and have the customers perceive it as a premium brand). As shown by the market research, customers are voluntary to pay more for a product like Mist. Moreover, considering the aspiration value of the product and the parent company, we have decided to follow value based pricing. PROMOTION According to the positioning of the Mist, a promotional campaign will be designed to create awareness and pull in the market. AIDA model will be followed for the promotional campaign. The steps taken in each stage will make consumers to Think, feel and do.