Seagram in taiwan
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Transcript of Seagram in taiwan
Marketing StrategyMarketing StrategySeagram in TaiwanSeagram in Taiwan
Melissa FegaridoMelissa Fegarido
Raphael FoglioRaphael Foglio
Cory LarsonCory Larson
Joseph LinJoseph Lin
Company BackgroundCompany Background
Pernod RicardPernod Ricard
Founded 1975Founded 1975 Worldwide operator in spirits and winesWorldwide operator in spirits and wines Corporate strategy:Corporate strategy:
– Concentrate on key brandsConcentrate on key brands– Develop strong local or regional brands and Develop strong local or regional brands and
wholly-owned distribution networkswholly-owned distribution networks– Motivate employees through highly Motivate employees through highly
decentralized organizationdecentralized organization Acquired Seagram in 2002Acquired Seagram in 2002
Pernod RicardPernod Ricard
Chivas RegalChivas Regal Clan CampbellClan Campbell Havana ClubHavana Club Jacob's CreekJacob's Creek JamesonJameson MartellMartell
Pastis 51Pastis 51 RicardRicard RamazzottiRamazzotti Seagram's GinSeagram's Gin The GlenlivetThe Glenlivet Wild TurkeyWild Turkey
KEY BRANDSKEY BRANDS
Chivas (12- and 18-year)Chivas (12- and 18-year)
Globally recognizedGlobally recognized Premium blended Premium blended
scotch whiskyscotch whisky 2.9 million cases in 2.9 million cases in
20032003 Key markets include Key markets include
Japan, Korea, China, Japan, Korea, China, Travel retail channelTravel retail channelPour two shots of Pour two shots of
Chivas Regal 12 over Chivas Regal 12 over fresh ice cubesfresh ice cubes
Martell (cognac)Martell (cognac) Since 1715Since 1715 Blended from rare Blended from rare
eaux-de-vie (distilled eaux-de-vie (distilled light white wine)light white wine)
Aged in private cellars Aged in private cellars 15 years15 years
1.1 million cases in 1.1 million cases in 20032003
Key markets include Key markets include Duty Free China, Duty Free China, Singapore, MalaysiaSingapore, Malaysia
Tango a Paris: In a long Tango a Paris: In a long glass, pour Martell over ice, glass, pour Martell over ice, top with fresh pineapple top with fresh pineapple juice, splash of tonic, and a juice, splash of tonic, and a cherrycherry
Martell rangeMartell range
Martell VSOP (s)Martell VSOP (s) Martell Cordon Bleu (p)Martell Cordon Bleu (p) Martell XO Suprême (p)Martell XO Suprême (p) Martell NobligeMartell Noblige Martell VSMartell VS MédaillonMédaillon Martell ExtraMartell Extra Classique de MartellClassique de Martell L'Or de J&F MartellL'Or de J&F Martell Martell CreationMartell Creation
Royal Salute (21 years)Royal Salute (21 years)
First produced in 1953First produced in 1953 World’s leading super World’s leading super
premium scotchpremium scotch Malt and grain from Malt and grain from
ScotlandScotland 76,000 cases in 200376,000 cases in 2003 Key Markets: Taiwan, Key Markets: Taiwan,
Korea, China, Japan, Korea, China, Japan, Travel retail channelTravel retail channelBest enjoyed neat Best enjoyed neat
and unmixedand unmixed
Market AnalysisMarket Analysis
Impact of DutiesImpact of DutiesSuper Premium Super Premium
ScotchScotchPremium Premium
ScotchScotchPremium Premium CognacCognac
Standard Standard CognacCognac
OtherOther
Cost per Bottle NT$Cost per Bottle NT$ Royal Royal SaluteSalute
J.W.J.W.
PremierPremier
ChivasChivas
RegalRegal
J.W.J.W.
BlackBlack
SeagramSeagram
XOXO
UD/HennUD/Henn
XOXO
SeagramSeagram
VSOPVSOP
UD/HenUD/Hen
VSOPVSOP
JapanJapan
WhiskyWhisky
CIF CostsCIF Costs 832832 832832 272272 272272 976976 976976 464464 464464 180180
Current DutyCurrent Duty 330330 330330 330330 330330 750750 750750 750750 750750 149149
Total Current CostsTotal Current Costs 11621162 11621162 602602 602602 17261726 17261726 12141214 12141214 329329
Current Target PriceCurrent Target Price 21702170 23002300 680680 650650 20802080 22002200 11001100 11001100 480480
Current Target MarginCurrent Target Margin 10081008 11381138 7878 4848 354354 474474 (114)(114) (114)(114) 151151
Proposed DutyProposed Duty
CIF Costs x 12.5%CIF Costs x 12.5% 104104 104104 3434 3434 122122 122122 5858 5858 2323
+NT $170 x *.75+NT $170 x *.75 128128 128128 128128 128128 128128 128128 128128 128128 128128
+5% VAT+5% VAT 1212 1212 88 88 1313 1313 99 99 88
Proposed DutyProposed Duty 244244 244244 170170 170170 263263 263263 195195 195195 158158
Potential Savings NT$Potential Savings NT$ 8686 8686 160160 160160 488488 488488 555555 555555 (9)(9)
Potential Savings US$Potential Savings US$ 2.612.61 2.612.61 4.824.82 4.824.82 14.714.7 14.714.7 16.716.7 16.716.7 (0.3)(0.3)
StrengthsStrengths
Globally recognized brandGlobally recognized brand
Range of product lineRange of product line
Highly decentralized organizationHighly decentralized organization
Wholly owned distribution networksWholly owned distribution networks
WeaknessesWeaknesses
No product in the standard categoryNo product in the standard category
Prestige brand name limits their Prestige brand name limits their pricing strategypricing strategy
OpportunitiesOpportunities No brand extension in standard categoryNo brand extension in standard category
Brand consciousness is highBrand consciousness is high
Consumers more price consciousConsumers more price conscious
Decrease in “on-premise” salesDecrease in “on-premise” sales
Duty regime changesDuty regime changes
Recent one yr ban on all U/D Hennessy productRecent one yr ban on all U/D Hennessy product
ThreatsThreats
Low brand loyaltyLow brand loyalty
Competitors spend more on promotionsCompetitors spend more on promotions
Traders and brokers - “unauthorized Traders and brokers - “unauthorized commercial activity”commercial activity”
Domestic lower-priced “look-alikes”Domestic lower-priced “look-alikes”
Entrance of Japanese whisky Entrance of Japanese whisky
Alternative EvaluationAlternative Evaluation
Distribution ChannelsDistribution Channels
Develop private distribution channelDevelop private distribution channel– Cuts costs down in long-runCuts costs down in long-run
– Initial startup costs are substantially highInitial startup costs are substantially high
Build plants to produce in TaiwanBuild plants to produce in Taiwan– Avoids tariffs and duties altogetherAvoids tariffs and duties altogether
Focus on hypermarket distributionFocus on hypermarket distribution– Growing trend shows increasing hypermarket preferenceGrowing trend shows increasing hypermarket preference
Introduce direct distribution from internet sellingIntroduce direct distribution from internet selling– Reduce costs by cutting middlemenReduce costs by cutting middlemen
Duty RegimeDuty Regime
Two options are availableTwo options are available
– Reduce pricing accordingly to increase sales volumeReduce pricing accordingly to increase sales volume
– Hold pricing strategy to capitalize on duty savingsHold pricing strategy to capitalize on duty savings
Ensure brand prestige imageEnsure brand prestige image
Adapt accordingly to environmental changesAdapt accordingly to environmental changes– React to competitors’ actions toward situationReact to competitors’ actions toward situation– Government regulations may change as political status variesGovernment regulations may change as political status varies
Promotional SchemePromotional Scheme
Increase mass media advertisingIncrease mass media advertising
– TV, radio, industry related magazinesTV, radio, industry related magazines
– Outdoor ads such as billboards within airports & subwaysOutdoor ads such as billboards within airports & subways
Design promotional packages to induce trialDesign promotional packages to induce trial
– Develop strategic alliance with different venuesDevelop strategic alliance with different venues
– Promote newly introduced revolutionary productPromote newly introduced revolutionary product
MARKETING STRATEGIESMARKETING STRATEGIES
Distribution StrategyDistribution Strategy Maintain relationship with exclusive distributorMaintain relationship with exclusive distributor
– Formosa Trading Ltd.Formosa Trading Ltd.
Develop compensation programsDevelop compensation programs
– Prevent “unauthorized activity”Prevent “unauthorized activity”
Focus on hypermarket distributionFocus on hypermarket distribution
– Trend displays drinking at luxury of own homeTrend displays drinking at luxury of own home
– Coordinate with introduction of new productCoordinate with introduction of new product
Direct distribution through new channelsDirect distribution through new channels
– Internet selling, mail-in cataloguesInternet selling, mail-in catalogues
– Cheaper pricing due to loss of middlemenCheaper pricing due to loss of middlemen
Pricing StrategyPricing Strategy Concentrate on “HOLD” pricing strategy reacting to dutiesConcentrate on “HOLD” pricing strategy reacting to duties
– Ensures prestige brand imageEnsures prestige brand image
– Capitalize on duty reductions to increase profitCapitalize on duty reductions to increase profit
Focus on selective pricing schemeFocus on selective pricing scheme
Undermine competitors with new standard productUndermine competitors with new standard product
New product prices stay competitive within its categoryNew product prices stay competitive within its category
Existing products’ prices will remain relatively constantExisting products’ prices will remain relatively constant
Promotional StrategyPromotional Strategy
Focus mainly on chain of referrals & word of mouthFocus mainly on chain of referrals & word of mouth
Launch promotional packages within different venuesLaunch promotional packages within different venues
– Executive suite gift packages within high-end hotelsExecutive suite gift packages within high-end hotels
– Duty-free premium packages within airlinesDuty-free premium packages within airlines
Mass customization towards major consumersMass customization towards major consumers
– Applies only to newly introduced standard productApplies only to newly introduced standard product
Promotional StrategyPromotional Strategy Alpha CampaignAlpha Campaign
– Promotional packages consist of high-end productsPromotional packages consist of high-end products
– Form strategic alliance with major hotelsForm strategic alliance with major hotels
– Targets commercial meetings & professional luncheonsTargets commercial meetings & professional luncheons
Beta CampaignBeta Campaign
– Economical combinations including all category goodsEconomical combinations including all category goods
– Promote through airlines & new internet distributionPromote through airlines & new internet distribution
– Targets home consumers & small businesses Targets home consumers & small businesses
Product AssessmentProduct Assessment Introduce new line of product within standard Scotch Introduce new line of product within standard Scotch
whisky categorywhisky category
– High growth rate marketHigh growth rate market
– Unexplored territoryUnexplored territory
Pricing of new product will remain competitivePricing of new product will remain competitive
Unique design of packaging to prevent duplicationsUnique design of packaging to prevent duplications
Target urban lifestyle consumersTarget urban lifestyle consumers
– Young adult businessmenYoung adult businessmen
– Home ownersHome owners
Chivas RevolveChivas Revolve