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Diageo Company in the Indian Liquor Market Case Study

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Updated: Jan 27th, 2021

What attempts has Diageo made in the past 15 years to enter the Indian liquor market? How successful was each of these attempts before the current one?

Diageo PLC has tried to enter the Indian scotch and whiskey market twice. On the first occasion, Diageo introduced Gilbeys Green Label into the Indian market in 2002. The main target group for this brand was middle-income drinkers who cannot afford expensive liquor but have a desirable disposable income to afford the drink. Gilbeys Green Label was a local brand. Due to its slow pick, Diageo felt that it was wise to concentrate more on international brands than local brands.

Diageo, in a joint venture with Ridaco Khaitan, an Indian based company launched Masterstroke into the Indian market. This brand did not take off. This may have been because the Indian liquor market was already flooded with several brands some of which may have strong brand names and huge market shares. All these attempts were not successful.

What have they learned from their past failures? or less-than-desirable-results’? What do they plan to continue doing, or discontinue doing this time? What else do you recommend them to do, or not to do?

Diageo has learned a lot from its past failures. First, they have learned that packaging is an essential aspect of marketing. Due to this fact, the packaging of their new brand, Rowsons Reserve is better than that of Masterstroke. Diageo also realized that it is essential for this product to meet the tastes and preferences of the local consumers. With this regard, Rowsons Reserve is much sweeter than Masterstroke. Furthermore, it is of higher quality.

Thus, the new brand is a better whisky with superior packaging. However, the company has still maintained its target group; middle-income drinkers. Target market identification is essential, especially when entering a new market (Gaillard 45). I would, however, advise the company to ensure that the taste, quality, and packaging of this new product conforms to the culture of the Indian market. Recognition of the local culture is essential especially when entering a new market with a different culture, morals, and beliefs (Keegan and Mark 122).

What would be their reasonable goal of market share in that “crowded market” in the next five years? Explain why you think this market share goal is realistic and achievable.

At the present moment, UB Group, an Indian based company dominates the scotch and whisky industry of India by having a 48.3% market share. It is followed by Pernod Ricard SA that has a 13.3% market share. However, this industry has a lot of potentials. Between 2005 and 2010 the consumption of whisky doubled to 1.2 billion liters. Therefore, with the use of viable strategic plans, maintenance of the brand quality, and price, Diageo, stands a high chance of success (Egan 17). I, therefore, project that Diageo may have a 5% market share within the next 5 years.

What would you recommend Diageo to do to advertise Rowson’s Residence to its target customers provided that there are stringent advertising rules in India’?

In India, there are stringent barriers to alcohol advertisement. Thus, as a new brand, Diageo can advertise Rowsons Reserve at its selling point. At the present moment, Diageo has access to 83% of the licensed that sell liquor between 600 and 900 rupees. The company can use these outlets as one of its major advertising zones. Consequently, the company should fund an activity or sponsor an event using Rowsons Reserve name. Finally, the company can use e-marketing strategies such as online brand communities and social networks. In this way, they will be able to capture the emerging market of young adults (Cross 140).

Although Diageo has decided to “localize” the product in this attempt, i.e., locally producing the liquor that is ”crafted for the expectations of the India palate,” it is not clear how Diageo is going to “localize” or ”globalize“ other components of its marketing mix. Please identify three (3) areas where Diageo can “globalize.” Explain how such global—ness or foreign» ness may help gain a competitive advantage over local rivals.

After they failed in 2002, Diageo decided to concentrate on its globalized products such as VAT 69, Johnnie Walker, and Talisker. Despite the high rates of importation tax that is levied on these products, the company can globalize on these products. These products are highly renowned for their quality and fineness. Their identification with the high-income earners will not only boost their sales in the Indian market but will also boost the sales of Rowsons Reserve through brand identification (Baker 65).

Works Cited

Baker, James. The Strategic Marketing Plan Audit. New York: Pearson, 2008. Print.

Cross, Richards. Revenue Management: Hard-Core Tactics for Market Domination. Washington: Broadway Books, 2009. Print.

Egan, Jacob. Relationship Marketing. ã Harlow: Financial Times Prentice Hall, 2000. Print.

Gaillard, Ellen. Brand Distinctiveness. London: Pearson, 2008. Print.

Keegan, Warren, and Mark, Green. Global Marketing. New York: Pearson Prentice Hall, 2010.

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