4Ps, STP and PESTEL analysis of Carlsberg India

Marketing Project Report for Term I 4 P’s, STP and PESTEL Analysis on Carlsberg

Indian Beer Market is expanding like never before. While the world market has almost stagnated, Beer consumption in India is growing at a rate of almost 12%. Major international players have ventured into the Indian scenario. Carlsberg is one of them. We have tried to understand the strategy adopted by The Carlsberg Group by 4P’s, STP and PESTEL analysis.

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CONTENTS

EXECUTIVE SUMMARY  

3

ABOUT THE COMPANY

4

BEER CULTURE IN INDIA

4

4 P’s ANALYSIS

6

STP ANALYSIS

8

PESTEL ANALYSIS

10

REFRENCES

12

Executive Summary: Danish brewer Carlsberg Carlsberg entered into the Indian market in 2006 and operates here through a  joint venture named South Asia Breweries. Carlsberg has positioned itself as a premium mild beer. With the launch of its flagship brand, the company is trying to create a premium, all-malt beer category. category. They have positioned their their product in all the metros and the major cities of  India.

4P’s: Products: Three product have been launched in India Carlsberg, Okocim Palone and Tuborg. Price: Different variants have different price, Carlsberg Pint (330ml) costs Rs. 40, Tuborg Rs. 30

whereas the bottle (650ml) of Okocim Palone will cost us Rs. 50. Place: All the metros and major cities especially north and west India. Promotion: Targeting the youth with their mild section, have a variant for strong section, free

sample, social networking.

STP: Segmentation: Carlsberg group has tried to segment the market on the basis of urban and rural

population moreover they have also tried to segment on the basis of geography concentrating concentrating more to the northern and the western region of the country. Target Market: The Carlsberg group has majorly tried to cater to the younger consumer consumer and

with its product Okocim Palone it has targeted the section who likes to have a stronger beer. Positioning: It has positioned itself as a premium mild beer. Carlsberg as compared to its

counter-part counter-part is costlier and with the launch of its flagship brand, the company company is trying to create a premium, all-malt beer category. Moreover STP and 4P’s analysis show that Indian breweries market is open for international international players and they can very well cash-in on their international brand recognition.

About the Company:

The company was formed in 1847 by J.C. Jacobsen outside Copenhagen, Denmark, and named after his son Carl. Exportation of Carlsberg Beer Beer began in 1868; foreign brewing began in 1968 with the opening of a Carlsberg brewery. The company's main brand is Carlsberg Beer, but it also brews Tuborg as well as local beers. After merging with the brewery assets of Norwegian conglomerate conglomerate Orkla ASA in January 2001, Carlsberg became the 5th largest brewery group in the world. In 2009 Carlsberg is the 4th largest brewery group in the world employing employing around 45,000 4 5,000 people. Carlsberg India Pvt. Ltd. headquartered in Gurgaon, National Capital Region and India is a foreign direct investment company formed to brew and market Carlsberg beer in India. Carlsberg operates operates in India through a joint venture named South Asia Breweries, in which it has a 45 per cent stake. Carlsberg India Pvt. Ltd. currently employs over 200 professionals and is headed by Pradeep Gidwani as of May 2009. Carlsberg Group has ventured into the Indian market with its three brands Okocim Palone, a strong beer, Tuborg and Carlsberg, in the mild beer section.

Beer Culture in India

Indians love their booze, but beer, it seems, leaves them cold. The country ranks tops globally in consumption of whisky, but it's somewhere near the bottom in beer drinking. Today the two major players in the Indian beer market are The UB Group and SAB Miller. While the share of  the UB Group ( Kingfisher, Kalyani Black, Sand Piper etc.) accounts for 48% of the total market, SAB Miller ( Fosters, Hayward’s, Royal Challenge etc. ) is at comfortable 30%. Today the markets around the world have stagnated but the beer consumption in India has been growing at a rate

of around 6% and is predicted to grow at the rate of 11.5% by 2011. Five States, Andhra Pradesh (18.3), Maharashtra (16.2), Tamil Nadu (9.0), Karnataka (9.0), & Rajasthan (5.6) account for 63% of total beer consumption and top 10 States for 85%. Apart from providing strong growth, India also provides attractive profit margins due to the consolidated nature of  the industry – a comparison between China and India, for example, reveals that the Chinese beer market is marked by intense competition, with several players being marginalized. In China there are about 400 brewers, of which the top 10 account for only 45 per cent of the market. This has resulted in low profit margins fo r the Chinese beer players. In short, The Indian beer market has been growing rapidly over the last 10 years, due to the positive impact of demographic trends, rising disposable income, changing age profile and changing lifestyles.

4 P’s Analysis of 

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Product: Carlsberg Lager:

The most common product of The

Carlsberg Group and was the first one to be launched in the Indian market. Carlsberg Pilsner is the flagship in the Carlsberg Group's portfolio of beers. With the alcohol content at 3.8% - 4.6% it is being marketed in the mild beer segment.

Tuborg: Tuborg's USP is its innovative packaging in the form of  a unique pull-off cap, which does not need a bottle opener, something that the beer market in India hasn't seen until now. It was launched in the Indian market this summer. The alcohol content is at 4.6 %, it is again targeting the premium mild beer segment.

Okocim Palone: The strong beer from Carlsberg from Poland has alcohol concentration at 5.6% and above, remains widely available at all the major outlets because of its demand in the traditional section of beer consumers.

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Place Danish brewer Carlsberg has begun nation-wide distribution of its flagship brand Carlsberg beer. Carlsberg, which has four breweries in Rajasthan, Maharashtra, Himachal Pradesh and West Bengal, has consciously chosen the north, east and west regions of the country to set up its breweries when it saw its competitors focusing on the southern region. Though south India is the biggest market in the country for liquor, Carlsberg has targeted majorly north and west India to enter into into the market. Pradeep Gidwani, managing director, South Asia Breweries, said: "We are targeting the top-20 key metros and cities for distribution because Carlsberg will be positioned as a premium mild beer.” In Delhi, where it is distributing in 150 outlets, it has already gained 4.5 per cent share in volumes in the beer market.

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Price The pricing of Carlsberg has been kept on a bit higher side as compared to the existing domestic beers. The bottle( 650ml) of Carlsberg lager is priced at Rs. 70 as compared to general pricing of Rs. 45- 50 in the mild beer segment. Tuborg is also priced with the same price tag. Okocim Palone the strong beer from The Group has again priced it higher in its segment at Rs. 60. The Carlsberg group is cashing in on its international image and with its higher pricing policy it is targeting niche segment of the market.

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Promotion Since The Carlsberg Group has entered the Indian scenario at a time when there were two major players, UB Group and SAB Miller enjoying at a comfortable 75% share of the market, the promotional strategy had to be different. Carlsberg has adopted somewhat aggressive promotion for its brands. Carlsberg has understood the growing demand of beer in Indian market, and is using its international brand image to penetrate into the market. With the introduction of its first brand Carlsberg Pilsner its stormed every outlet with it, the only thing that you could see when you go out to buy beers was Carlsberg Lager. With the introduction of Tuborg, it organized Tuborg Nights in all the major parts of the metro, wherein free samples were

distributed. It capitalized on its USP, the cap, which was a new concept in India and that attracted many consumers. For a complete month they were distributing free beer in all the parts of the capital.

STP Analysis of   Segmentation International beer companies have a good enough reason to tap markets like India. That their main markets, North America and Europe, are either flat or in a state of decline is no secret. The recently introduced international brand is priced at a premium to other local offerings. But that does not deter middleclass customers. Carlsberg has segmented the Indian market in following ways: GeographicalGeographical- The major consumer for alcoholic beverages is Southern India. Carlsberg has consciously chosen the north, east and west regions of the country to set up its breweries when it saw its competitors focusing on the southern region. The strategy adopted by Carlsberg is to concentrate on to the untapped market of north and west India in the initial stage of the production. Moreover, since it has positioned itself as a premium product, it is only catering to the urban cities of India. DemographicDemographic- The age of India is changing. India is becoming younger. The population of youth is high in India. With its international image as the sponsor of a football team, it has created an impression in young ones’ mind. The rise in disposable income of the urban middle class is also a point. PsychographicPsychographic- The culture, the lifestyle, the personality of an Indian is changing which is good for international brands like Carlsberg.

 Targeting The target market for Carlsberg as discussed earlier is the changing Indian which is the only reason it has targeted all the urban cities of India. It may not 

be called a niche marketing because of the nature of the product but yes the product is placed at a higher price because of the image of the brand it wants to cash on. Outside India they have associated themselves with football and has created an impression of a young drink which they have brought to India as well. Though the Indian scenario doesn’t allow them to advertise openly, Carlsberg has successfully associated itself with the t he young and changing Indian. Now to overcome this challenge and at the same time to target young consumers, Carlsberg Carlsberg India has converted its website into a social networking website so that more and more people get to know about the product. A break  through marketing! 

 Positioning Carlsberg has positioned itself as a premium pre mium beer in the Indian market. Carlsberg is the most expensive beer compared with its competitors Budweiser, the UB Group's Kingfisher and Tiger beer by Asia A sia Pacific Breweries (a joint venture of Dutch brewer Heineken) in the Indian India n market. The company is betting on the shift in urban consumers to spend on quality. Carlsberg is also under the process of test-marketing its strong beer brand Okocim Palone from Poland. As its long-term strategy for the Indian I ndian market, it  plans to deploy a portfolio with brands in new beer segments s egments and at several price points.

PESTEL Analysis PESTEL  Analysis of  Political The scenario of India is very different from rest of the world. Any company venturing into the Indian market will have to study the political environment  here. Different states have different diff erent rules for liquor. Some states like Gujrat  are Dry states where the sales of liquor are completely banned. Some states have time limits i.e., after 9 the sales of liquor are prohibited. Even the age limit for drinking drinking in India is under under discussion. Right now it is 25, so Carlsberg Carlsberg has to be very specific when targeting its consumer. As the advertisement of liquor is banned in India, Carlsberg has cashed its international image to boost its sales in the domestic market. They have targeted the public houses and discotheques for f or their promotion which is very apt. Economic The economy of India is changing. There is a rise in per p er capita income and as a result the disposable income of people specially living in urban cities is also increasing rapidly. The Carlsberg group has realized this potential pote ntial and thus has targeted only the urban cities of india in their early stage to penetrate the market. According to the MD of the Carlsberg Group, Mr. Gidwani, Carlsberg has aimed to grab a market market share of approx. 10 % by next 2 years, once that  target is achieved, they will expand their base to other cities and rest of the country. Social As India is said to be the land of diverse culture, we can’t categorize India under one segment. The northern part is completely different from f rom the southern part. Per capita income is rising, but at the same time the gap ga p between the haves and have-nots is also widening. Though we hope that this gap will be narrowing in the near future, but the scenario is a bit bitter right  now. There is a school of thought thought against the so called pub culture and then there are rest, but as they say change is inevitable that’s why The Carlsberg

Group is relying on the change and has targeted the new Indian who is open to change. Technological Importing beer attracted heavy taxes from the government resulting in higher prices of the same. Therefore to increase the base in the Indian market, it was advisable to set up plant in India itself. With the joint venture with South Asia Breweries, Carlsberg has set up four breweries in Rajasthan, Raj asthan, Maharashtra, Himachal Pradesh and West Bengal to reduce the t he cost. According to the company sources, it is using an advanced technology to ensure that the beer that gets out is of better quality and great taste.

Environmental Environmental factors include the weather and climate change. As the climate here is generally warm, Carlsberg increases the promotions during summer time. As the company is new, we yet have h ave to see its effect on environment and vice versa. Legal Again The Carlsberg Group is very careful about the steps it takes because of  the political environment which could land it in trouble. As the laws are different for different states, Carlsberg India has played smart in making a social networking website so that its purpose of marketing is also solved and it didn’t cross the line of the law as well.

REFRENCES

GOOGLE.COM CARLSBERG.COM TUBORG.COM WIKIPEDIA.COM CARLSBERG.IN HINDUSTANTIMES.COM CARLSBERG (INDIA), GURGAON THE POCKET BAR, VASANT KUNJ.