PROJECTON

“Study of the Consumer Attitude towards ‘Wine’ as a product category

vis-à-vis other liquor categories”

Submitted to:Prof.Ajeet Sharma

Submitted by: Abhishek

Swami Gaurav Yadav

Nehal Mittal Rashi Dawar

1 | P a g e

Rini Bhattacharya Sagnik Ghoshal

1). ACKNOWLEDGEMENT Pg.3

2). INTRODUCTIONPg.4-5

3).OBJECCTIVE OF THE STUDY Pg.6

4).RESEARCH METHODOLGY Pg.7-8

5).RESEARCH DESIGN Pg.9

6). CONSUMER BEHAVIOUR AND ANALYSIS

Pg.10-15

7).CURRENT SENARIO Pg.16-18

2 | P a g e

8).EXECUTIVE SUMMARY Pg.19

9).CONCLUSION Pg.20

10).BIBLIOGRAPHY Pg.21

Acknowledgement

A task or project cannot be completed alone. It requires the effort of many individuals. WE take this opportunity to thank all those who helped me complete this project.

We express my sincere gratitude to Prof. Ajeet Sharma for giving us the opportunity to undergo this project. We further thank his for lending a helping hand when it came to solving my problems related to the project. This project would not have been possible without his valuable time and support.

We also thank IILM Graduate School of Management for an opportunity to undertake a Marketing Management project at the start of our PGDM course which helped us to understand deeply for those topics which are untouched.

3 | P a g e

This project is an attempt to talk about the marketing strategies of the growing sector of malted health drinks and the response of the consumers using them.

Introduction

Wine, although perceived as the elite drink and an essential part of a meal in many cultures, continues to be by and large a tabooed product category in India. Efforts however are being made to bestow Wines with its rightful glory. Recently Karnataka state has declared that Wine would not be counted as a variant of Alcohol. The Wine Club continues to organize Wine tasting parties to make Wine all the more popular among countrymen

WINE

Wine is produced from grapes, and fruit wine is produced from fruits such as plums, cherries, or apples. Wine involves a longer (complete) fermentation process and a long aging process (months or years) that results in an alcohol content of 9%–16% ABV.

There are basically three types of wine: 1. Premium Wines (Still wines) 2. Sparkling Wines 3. Fortified wines

In the Still wine or premium wine category the Indian market is divided mainly into two major categories:

4 | P a g e

White wines Red wines.

This report primarily focuses on Premium wine vis-à-vis other liquor categories, and, the attitude of Indian consumers towards Wine.

Indian Wine Industry

Around 4000 acres of land in India is under vines, about 3000 of which is in Maharashtra alone. Karnataka and Andhra are the two other states producing grapes for wines, the former producing premium varietals. These may not necessarily be the best wine grape growing regions. There are several unexplored areas, more importantly on the foothills of Himalayas in Himachal, Uttaranchal and Kashmir where wine grapes were grown before Phylloxera hit in late 1800s and the political situation precludes any fresh initiative. Two crops of grapes are possible due to tropical weather but only one crop is harvested in February-April, as in Southern Hemisphere though India is in the Northern Hemisphere, Nasik the wine capital, being at around 13° latitude.

Indigo has been a pioneer and the biggest producer since its inception in 1984 with Sulfa growing fast and overtaking Grover a few years ago. Recession hit Indigo severely and the expansionist policies and the improper gauging of the market caused its downfall last year. It is currently in dire financial strait, with the very existence in doubt, making Sulfa the number one producer with around 250,000 cases sold last year. It is targeting 350,000 cases sales this year and will certainly cross this mark. Grover sold around 70- 80,000 cases and is targeting 110,000 cases, an ambitious target.

Several new wineries have come up during the last few years-notable among them being The Four Seasons Winery- a subsidiary of the liquor king Vijay Mallya-owned United Spirits Ltd, the biggest Indian wine and liquor company in India. This Maharashtra winery selling around 40,000 cases last year is tipped to be the fastest growing winery during the next five years and is expected to overtake Grover. Period

5 | P a g e

Ricardo started making Seagram’s Nine Hills 4 years ago and is consistently inching forward while the other multi-national Diageo failed to make progress with its ‘Malaya’ label and discontinued last year, at least for the moment.

Vintage Wines, Mercury Wines, York Winery, Ventura, Chateau dory, Indus, Globes, Miasma, Big Banyan and Zama are a few of the wineries which have established themselves as the second wave that produce quality wines, but their sales levels are still small-less than 20,000 cases a year.

Maharashtra winery Rona Wines went into partnership with an Italian winery last year. Vintage Wines which produces Reveille label has ventured into wines with Sangiovese grape with the help of their Italian consultant from Friuli.

OBJECTIVES OF THE STUDY

Main Objective

The main objective of this study is to “Understand Attitude of various sections of Indian consumers towards wine as a product category”.

Sub Objective

To study consumers brand preference of wine in Delhi &nearby areas.

To study consumption pattern of wine.

To study the factors affecting buying behaviour of wine.

Differentiating between perceptions towards wine vis-à-vis other liquor categories.

Analyzing the change in perception with time.

Scope for wines in India.

6 | P a g e

Research MethodologyResearch methodology is considered as the nerve of the project. Without a proper well-organized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of survey was to collect appropriate data, which work as a base for drawing conclusion and getting result.

Questions and deciding the types of data to be collected and the procedure to be used in this purpose

1. Descriptive Research:

The objective of such study is to answer the “who, what, when, where and how” of the subject under targeting the wine consumers.

2). Data collection methods:

After the research problem, we have to identify and select which type of data is to research. At this stage; we have to organize a field survey to collect the data. One of the important tools for conducting market research is the availability of necessary and useful data.

Questionnaires:

7 | P a g e

This is the most popular tool for the data collection. A questionnaire contains question that the researcher wishes to ask his respondents which is always guided by the objective of the survey.

Primary questionnaire based survey ofo Consumerso Bars and Pubso Wine Shops

Analysis of secondary data obtained from magazines and internet.

Pie chart:

This is very useful diagram to represent data, which are divided into a number of categories. This diagram consists of a circle of divided into a number of sectors, which are proportional to the values they represent. The total value is represented by the full create. The diagram bar chart can make comparison among the various components or between a part and a whole of data.

Bar chart:

This is another way of representing data graphically. As the name implies, it consist of a number of whispered bar, which originate from a common base line and are equal widths. The lengths of the bards are proportional to the value they represent.

3.Sampling Methodology:

Details of the sampling methodology, we have made questionnaire. The one is made for the Consumers

No. of questions in questionnaires for customer: 11

Sample size : 50

8 | P a g e

RESEARCH DESIGNThe design of research project is the plan that ties the data collected to questions, thereby linking the data to the conclusions to be drawn.Marketing research projects are either exploratory or conclusive in nature depending on the objectives.

Data Collection sources

Gathering the data from primary as well as secondary sources has completed the data collection process.

PRIMARY SOURCES

Primary data collection process was carried out personally through filling questionnaire

SECONDARY SOURCES

The collection of secondary data on liquor is a very tedious.However, secondary data are collected through following sources

EXTERNAL SOURCES

Business Magazines Newspapers ( Economic Times, Business Standard)

9 | P a g e

CONSUMER BEHAVIOURThis is the most effective tool in marketing. In liquor industry advertising isnot allowed by the Indian Government therefore they are indulged insurrogate advertising Products with similar brand name: - This is verycommon method used in the liquor industry, here companies introduced anon-alcoholic product with similar brand name and advertise it in fullswing. Financially sound players use this tool.

As per the analysis done of the consumption of wine. Red wine has the largest share in terms of percentage consumption i.e. 55% whereas white wine has a share of 45%. The above represent the pie chart of total consumption.

In order to better understand how and why consumer make consumption pattern in the wine category. When we analyse the

10 | P a g e

45%

55%

Percentage Consumption

White wine

Red wine

information from the questionnaire the factor that effect the consumer buying process we found out that 5% of the consumers are the one who consume wine daily and 15% are the one who consume once in a week. 30% of the consumer are the one who consume rarely. And 50% of the consumers are the one who consume wine only for

tasting.

Once considering the principal attributes of the purchased wines, we found that 40% of the consumers buy the wine only for their taste. 30% of the consumers buy wine according to the quality of the wine whereas 10% buy the wine according to the price and availablility and 5% buy according to the brand name and aroma.

11 | P a g e

Daily

Once a week

Rarely

Only at Wine Tastings

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Consumption Pattern

Taste Quality Price Brand Name Availability Aroma0%

5%

10%

15%

20%

25%

30%

35%

40%

45% 40%

30%

10%5%

10%5%

Buying Behaviour

Alcohol is a product which is not evaluated on functional features, it is a product which is subjectively evaluated and hence branding is essential. Both the price and the brand might considered as the two key factors influencing the final purchasing decision. Brand loyalty is one of the attribute which leads to the ultimate reason of consumption of wine. This behaviour based data enables us to interpret that most people are actually brand conscious and loyal to the specific product and brand then a comparison is made between those who are brand loyal and the others.

12 | P a g e

YES NO0%

20%40%60%80%

Brand Loyalty

When we interpret the wine consumption according to the gender, we found out that female consumption of wine is less i.e 30% in comparison with male because women use packaging cues to define product quality more frequently because they are less knowledgeable about wine. Also in this case the gender based value consumption of wine is relatively even.

13 | P a g e

Red Wine White Wine0%

5%

10%

15%

20%

25%

30%

35%

35%

30%

20%

15%

Gender Consumptions

Male 65%Female 35%

The Indian beer Industry has been witnessing a steady growth rate of 9-10 per cent per year for the last five years The alcoholic drinks market is broadly classified into five classes, starting from beers, wines, hard liquors, and others. The Indian alcoholic market has been growing rapidly for the last five years, due to the positive impact of demographic trends and expected changes like rising income levels, changing age profile, changing lifestyles and reduction in beverages prices. Beer and wine are perhaps the oldest and most popular of all alcoholic beverages in the world.

Alcoholic beverages are divided into three general classes: beers, wines, and spirits. Among the three the beer is the most preferred one ie 55%.this is because In pub, bar or restaurant, it is observed that beer is the most favoured drink by Indians across all age groups, but spirits/liquor is most favoured while partying at home. This is a result of the beer brands’ marketing efforts to promote beer drinking as part of social interactions in the context of sports, music, etc.

14 | P a g e

This Table shows the number of people who want to change brands and the reason why they choose to change.

For example:-

Consumers are likely to switch from Sula Sauvignon Blanc because of its price while it quality is something which pulls consumers towards it. There are 4 consumers who would like to switch due to its price whereas 2 consumers would like to stick to the brand due to its Quality.

From this table we understand the specific reasons why a consumer wants to switch brand.

15 | P a g e

Current Scenario

The industry was hit badly because of recession. In fact, prior to the onset, there was a terrorist attack in Mumbai in November 2008, killing many people. This meant a disruption of the international tourist and business traffic, making the business conditions tough overnight. Not only did the consumption go down, the hoteliers clamped on the inventories and decided not to order wine until the existing stocks were liquidated, even at a loss.

Moreover, the industry had been over- producing for the last three years in anticipation of a higher demand the level of which was not commensurate with their expectations. With concessions like zero excise duty, the number of producers had increased-even the farmers with no experience of marketing or production got into the fray. In Maharashtra, half the wineries are either shut down or have stopped fresh wine production due to the glut that has seen their tanks still full of wine. The farmers are not getting paid for their previous supplies for months and many have been forced to let the grapes drop. Last November, the unexpected rains destroyed about 40% of the crops, bringing some equilibrium though it meant losses to the growers.

The importers have been signing up with new foreign producers -sometimes without evaluating the market requirements. Adding each such label means extra inventory and money tied up in label registration costs which are substantial and different for each of the 28 states (actually 33, if you consider ‘states’ like Delhi); every state requires them to be registered and the annual license fees have to be paid in advance to sell wine.

In the absence of any wine laws the quality is not consistent and varies widely from producer to producer. Joining OIV might help formulate laws that would make them achieve consistency and improve quality. Just as in the case of consumers, the producers and the whole supply chain in fact, generally lack wine knowledge and the end quality remains circumspect, though it has been improving consistently with the new passionate suppliers coming in the fray.

16 | P a g e

Future Trends

Although the growth rate has been monumental, it has been on a very small base. It is highly dependent upon the government policies. Wine is still viewed as liquor and the policies are tightly controlled. It is not considered a food or lifestyle product. Of course, the education and the non monetary trade barriers like cumbersome documentation and procedures, allowing sale throughout India in the super-markets making them more easily available, are important factors which when addressed will improve consumption.

India has recently started making concerted efforts for exports which will help it expand and improve quality. Indian Grape Processing Board was formed a year ago to help promote Indian wines. For the first time, exhibitors took take part in Wines for Asia, Singapore in 2006 under the Indian banner due to the efforts of Indian Wine Academy, a private initiative, to promote Brand India. The Board followed it up last year with a joint participation at the Hong Kong Trade Show and the London International Wine Fair in May, with encouraging response.

Growth factors

Although the growth of wine consumption is highly dependent upon the government policies, both at the central (Federal) as well as the state levels, there are various sociological factors on which it is dependent. Religion plays a role but not directly and only to some extent. Social mores are more influential.

The wine consumption has increased due to higher availably of Indian wines but it is also been a result of the changing life-style, especially of the young and women. The health benefits of wine have been exposed enough for many liquor drinkers to switch or at least shift partly to wine. International travel and growth of business and interaction with foreign businesses has also helped. Significant migration of Indians to countries where wine is an integral part of food and life-style in general induces the visiting friends and relatives to consume wine.

17 | P a g e

Doing Business with India

Though in the long term this industry has a bright future due to the huge potential demand, it is a difficult and long term market with many speed breakers and bumps–not for the faint hearted or smaller pockets. It needs constant nurturing in terms of support and visits by the foreign producers and has to be with good understanding of partnership with the importer. The Indian producers have to constantly improve quality, maintain consistency and use marketing skills which include opening new markets and ingenious sales policies. Collaborations in technology, equipment and foreign equity participation will be extremely rewarding. Export markets have to be conquered at competitive prices even though it is a niche market.

A lot will depend upon the government policies but the role of educators, importers, producers and the supply chain cannot be undermined.

18 | P a g e

EXECUTIVE SUMMARY

This report traces the growth and development of the Indian wine industry from its inception to the present day and examines the scale and turnover of India’s wine industry, its exports, promotional ventures, best-known brands etc. It maps the locations of vineyards, identifies the leading players, and provides their annual turnover. The report compares the Indian and global wine markets, and the attempts made by the Indian wine industry to become a global entity. It analyzes the Indian government’s initiatives, at both the Central and State levels to support this effort, and the promotional ventures taken up by the leading players to establish themselves in the global market.

The report also studies consumer trends, the changing perception about wine in the country, and the factors fuelling this change. Identifying opportunities for growth, the report analyses the steps that are being proposed (new vineyards, joint ventures, branding, pricing etc.), and their implementation.

Exhibit I: Growth of wine consumption in Indiain 2004 (in Mn litres)

19 | P a g e

CONCLUSIONEven as the wine industry in India exhibits a surge in production, it will take both, time and significant effort, to challenge the established wine producing nations. Industry observers believe that the burgeoning growth of new wineries needs a strong marketing plan, and the industry has to unite for the promotion of wine both, as a product and as a lifestyle statement..

Marketing and wine industry experts are detecting long term interest in wine consumption that spills over into merchandising, marketing, high medium and low tier brands and coordinating accessories for the home. Luxury wine accessories come at every price level.

The target growth rate will be attainable only if the major grape producing states like Karnataka, Andhra Pradesh and Punjab follow the Maharashtra model of liberalizing rules regarding production and marketing of wine. Apart from the policy changes to increase production, the quality of Indian wines also has to be constantly upgraded to meet international standards.

Besides legal constraints, there is still a need to develop a market, as there is no indigenous, grassroots wine culture in India. Wine consumption is primarily still restricted to the affluent, and what is commonly referred to as the “westernized” segments of the population.This will greatly benefit consumers at the two ends of the market spectrum: at the top end, where sophisticated consumers will start accepting domestic produce as premium wines; and at the bottom end where new and price sensitive consumers will try the product and thus support the small, emerging wineries. The figure has been growing at an annual rate of over 9% is expecting a 15% rise in its overseas sales this year and so are the other major wineries. While the foundation for a world-class wine industry now exists in India, for the country to become a major player on the world stage will require sustained and concerted efforts by both, the industry and the government.

Indian wine market has entered a phase of rapid growth. This is fuelled by the entry of major companies and professionals that are well funded and know the Indian spirits market well. All that is needed now is that the Indian retail market should measure up to the challenge. Wine enthusiasts would certainly raise a toast to that.20 | P a g e

BIBLIOGRAPHY

1.) http://www.indianwineacademy.com/item_10_400.aspx

2.) Multiple aspects of Indian Wine Industry -Karnika Seth

3.) academyofwinebusiness.com/wp-content/uploads/2010/05/Casini.pdf

21 | P a g e