DOING BUSINESS IN INDIA
Michał Kowalczyk
Josia Mayeur
Nina Alot
SOPLICA
Submission date: 09.04.2023
Table of contents
1.
Introduction ........................................................................................................................ 4
2.
Identifying a product and obtaining a proper selling price ................................................. 7
2.1
Product ........................................................................................................................ 7
2.2
Price............................................................................................................................. 8
3.
Penetrating into Indian market with Soplica ...................................................................... 8
4.
Entry marketing strategy .................................................................................................. 10
5.
Marketing during selling .................................................................................................. 12
6.
Exit strategy ...................................................................................................................... 13
1. Introduction
According to Statista (Kunst, 2023), Google was the most-used search engine in India in 2022.
We can assume that the Silicon Valley giant is also leading in this ranking currently. Therefore,
approaching the Indian market, we have started with exploring Google Trends in India, in 2022.
In the pictures below, we can see that the most trending searches for ‘recipes’, are drinks made
with vodka: Sex on the Beach (vodka, peach schnapps, and more than one fruit juice (usually
orange and cranberry), and Pornstar Martini (vodka, lime juice, and passion fruit puree). Also,
we can see the query “How to drink Pornstar martini” in the third position in ‘How to’ searches.
Trending in Google search, India, 2022 (Google, n.d.)
This information made us think that drinking, therefore buying vodka, is becoming a trend in
India. To check it, we have also used Google Trends. On the screenshot below, we can see that
vodka has indeed been a growing trend since 2004. (Google, n.d.)
Additionally, in the picture below, we can see most preferred alcoholic beverages in India as
of February 2022, by Statista (Statista, 2022)
We can see that vodka is in 4th place with 11% of Indian market share. However, none of the
other alcoholic beverages are visible in Google Trends, as vodka, which is an ingredient of
previously
mentioned
Sex
on
the
Beach,
and
Pornstar
Martini.
Assuming that most of the Google users are the younger population segment, we can predict
that vodka is going to be more popular in the future, if the trend will not stop. To ensure drinks
stay on the top of the searches, there must be good marketing, which we can provide.
Unfortunately, most of the data is paid, so inaccessible for students. However, we can have a
look at Statista predictions, in the picture below. It says that the market collapsed because of
the covid but now it’s growing, and trusting the predictions, will grow at least until 2027.
(Statista, 2023)
2. Identifying a product and obtaining a proper selling price
2.1 Product
Google search insights make it certain that there is an opportunity for approaching its market
with one of the solid European manufacturers, which already have good brand recognition,
legitimate production processes, and taste. As some of our group members are from Poland,
which is popularly associated with drinking vodka, we would choose the Polish Soplica, to
approach the Indian market. Thanks to this choice communication with the supplier can be
easy, without language or cultural barriers, which is key to a good business.
We would sell the basic vodka, without any additives, which you can make drinks with. Also,
there are many different flavours of Soplica that may have potential in the Indian market though
that should be planned in the future, if the trend for flavoured vodka will be increasing, and the
brand will be more recognizable in the country. In this project, we are going to focus on pure
vodka.
Soplica Szlachetna (Noble Soplica):
2.2 Price
According to the article (Banerjee, 2023), the prices of 750ml of vodka on the Indian market
are from 400 INR (4,46EUR) to 8000 INR (89,22 EUR). The price in Poland is about 10
EUR, which is not expensive.
One of the best selling vodkas are Magic Moments, Romanov and Smirnoff. Their prices are
about 600 INR, about 700 INR, and about 1400 INR per 750ml bottle. (Amirt, 2022)
To be competitive, Soplica in the beginning should be sold for 800 INR(8,92 EUR) per
bottle, to keep the “nobility”, used in the name, and still be affordable by most of the target
audience.
3. Penetrating into Indian market with Soplica
Penetrating the Indian market with vodka can be challenging due to various cultural and
regulatory factors. The factors worth considering are: in-depth market research, choosing
right distribution channels, developing effective marketing strategy, focus on high quality of
the product, awareness of cultural sensitivities and differences, partnering with local
companies, patience and persistence.
The market research begins with estimating the target group. The legal age of drinking in
India differs depending on the state (India: Alcohol Legal Drinking Age by State 2021, 2022).
There are 27 states, where in 5 of them drinking is allowed from the age of 18 and 18 states
where drinking is allowed from 21 years old (India: Alcohol Legal Drinking Age by State
2021, 2022). According to studies done by WHO (World Health Organization), 32% of men
and 11% of women in India consume alcohol over the age of 15. An average Indian male
drinker consumes 33 litres of alcohol per year, while for a female drinker it is 11 l (Average
Indian Male Consumes 33 Litres of Alcohol /Year: WHO | India News, 2014). Those studies
also found out, that 93% of Indian drinkers consumes hard liquor such as vodka or whiskey,
while only 7% beer, and wine even less - 1%. Based on the research, the target audience
should be consisted of both men and women (more focused on men) above 21 years old.
(India: Alcohol Legal Drinking Age by State 2021, 2022)
The consumption of alcohol in India can be also distinguished by the states. Based on the
NFHS5 (National Family Health Survey 5), the state with the highest percentage of alcohol
consumption is Arunachal Paradesh with 52,6%, following Telangana with 43,4% and
Sikkim with 39,9% on the third place (Statewise Alcohol Consumption in India, NFHS 5 and
CRISIL Report, 2022). According to this research, we can assume that those areas will be of
the biggest focus while entering India with vodka. Even though in the last state Lakshadweep
only 0,4% of men are drinking alcohol, this area should be taken into consideration while
entering India as well as all the other states. Hence the promotion can be more and less
developed and adjusted according to the percentage of consumption in states, however, we
should introduce Soplica to the whole country.
(Statewise Alcohol Consumption in India, NFHS 5 and CRISIL Report, 2022)
Another type of segmentation of a target group is price and distribution channel. Based on the
description above, the price will be 8,92 EUR, which compared to the competition, is an
affordable, value vodka segment. With that, a distribution channel can be both on-trade
(served in bars and restaurants) and off-trade (sold in retail stores). In bars and restaurants it
can be served as an ingredient in drinks or as shots. As mentioned before, if the
internationalisation to India goes well, the company can expand the product portfolio in this
country for flavoured vodka. This would not only diversify the portfolio of drinks in
restaurants, but also increase the sales in retail stores, by expanding to a target group that
prefers flavoured alcohol over pure vodka. Therefore, if that happens, the segment of the
brand would be expanded to not only a brand selling pure vodka, but also segmented by
flavour.
4. Entry marketing strategy
Marketing a new vodka brand in India can be a challenging task due to cultural, social, and
religious reasons. However, with the right strategy and execution, it is possible to establish a
successful vodka brand in the Indian market. Therefore some steps need to be taken.
When creating an entry marketing strategy for vodka in India, and before launching a new
vodka brand in India, it is essential to understand the market and the target audience. In depth
research of the demand for vodka in different regions of India needs to be done, the
competition, the cultural factors that may influence the consumption of alcohol, and the
pricing strategies of the competitors. This research helps to understand how to position vodka
brand in the market. Based on our research, we decided to enter the market state by state from
the one with the highest percentage of people drinking, to the lowest, while learning on the
way about Indian market. The pricing strategy has been decided for 8,92 EUR per bottle,
affordable for an average citizen, as well as the competition, that is value segmented vodka
brands such as Magic Moments, Romanov and Smirnoff.
After conducting market research, identifying the target audience is necessary. It is essential
to know the age group, gender, and location of the target audience. A buyer persona can be
created based on the research, which will help to create marketing messages that resonate
with the target audience. According to research, the target audience is both genders: male and
female drinkers (firstly) in following states: Arunachal Paradesh, Telangana and Sikkim,
above 21 years old.
The brand image of vodka plays a vital role in attracting customers in India. The brand image
reflects the quality of vodka, its unique selling proposition, and its appeal to the aimed target
audience. In case of India, considering such high cultural and language difference, the name
of the brand can be either translated, or adapted to the Indian market. Therefore, people will
be able to pronounce the name of the brand and the company will adjust to the customers.
In India, social media platforms such as Instagram and YouTube are becoming increasingly
popular. Partnering with local influencers who have a significant following on social media
can be an effective way to promote Soplica. These influencers can create sponsored content
that showcases your vodka and its unique features, which can help reach a wider audience.
This idea also helps the company dealing with the prohibition of advertising of production,
sales or consumption of alcohol in India. Furthermore, creating engaging content that
educates and entertains the target audience is crucial to building a strong brand in India.
Soplica can create blog posts, videos, social media posts, and other types of content that
highlight the history, production, and unique aspects of the product. This content can also
help to establish the Soplica brand as an authority in the Indian vodka market. The content
can be used both by influencers and by the brand itself on social media platforms.
Building strong relationships with distributors is essential to ensuring the brand is available in
multiple stores across the country. Reputable distributors need to be found who have a good
track record of selling alcoholic beverages. Additionally, the competitive pricing strategy of
vodka needs to be established and that the packaging appeals to customers. With the
competitive pricing strategy based on competition factor mentioned before, and the
outstanding design of the bottles (picture in introduction), Soplica can assure to be appealing
for distributors.
5. Marketing during selling
The advertising of alcoholic products in India was prohibited in 1994 through the Cable
television network rules. Rule 7 of the Cable television network rules prohibits the
advertising which directly or indirectly promotes the production, sale or consumption of
alcoholic beverages. One idea that came up on how we could advertise our product was
through sponsorships of events. However this is seen as indirect marketing and also isn’t
allowed. Since products that are banned from advertising may not be used to provide any
kind of sponsorship. (Prohibited and controlled advertising in India, 2019) As you can see, it
is quite difficult to market our Vodka in India. However, we have come up with a few
possibilities that could work but will require a lot of effort
Our first strategy that we would invest in is building a loyal community on our social media
channels. We would do this by creating engaging content that is appealing to our followers..
The content that will be created can be funny short videos or challenges that aren’t linked to
our product. We could also invite some influencers to work together with us to create this
content. We believe that creating fun content isn’t advertising our product but could still be an
excellent way of creating more brand awareness.
Apart from that, we will work on our relations with our distributors, retailers and so forth.
Having good relationships with them could have a positive influence on our sales. One of the
ways we could do this is by negotiating a lot of shelf space with our distributors. Another option
is to negotiate better placements of our products, for example placing them in a more visible
location in the shops, bars… We would also attend relevant trade events. This would be a good
way to showcase our product and to establish connections with possible customers and
partners.
We would provide bars, pubs and clubs with glasses that have our logo on it. Our drink would
be served in these special glasses for our Vodka. Next to that, we would provide them with
some tents if it is suitable for their business with our logos on it. We don’t know how strict
these rules are and if this is considered as indirect marketing. We do assume this would be
conform to the rules and regulations and would help us get some more brand awareness that
would lead to more sales.
Another way of marketing is through word of mouth. Although we cannot really control that,
we can make sure that our products conform to the promised quality. Next to that we can make
sure that the customers have a good buying experience. If the customers have good experiences
with our Vodka, they will be more likely to talk about it and promote it through word of mouth.
Search engine optimization could also be a good tool to increase the sales of our product.
Search engine optimization is a way of getting your page to rank higher in search engines such
as google. When people search Vodka for example, we will make sure that our webpage is the
first one to show up on the google search page.
Cocktails are a rising trend in India. We could use this trend as an opportunity for us. To create
more awareness for our product, we could give workshops on how to make well known
cocktails such as: ‘sex on the beach’ or ‘pornstar Martini’. Of Course we would use our Vodka
as an ingredient for these cocktails. This could help us create more awareness for our product
without advertising it.
6. Exit strategy
An exit strategy is a plan to limit losses in case the business isn’t successful and not making
enough profits. This is very important since you will never know if your business idea or
product will be profitable when expanding to a new country. Of course, we are positive that
our Polish Vodka will be a success in India especially considering the latest trends of more
consumption of alcoholic beverages. However, we do still want to have a well-developed exit
strategy
1. In case we see that our product isn’t as successful as planned and hoped for, we will
try to find the reason for the problem. To do this we would keep track of all our data
and importantly our KPI’s. However, we should also consider that maybe the problem
isn’t an internal problem, but external factors could affect our business. This is why
we need to listen to consumer feedback, perform market studies and so forth.
2. In case we can’t define the problem in the previous step, it seems that our product is
hopeless. we will need to take further action. The first thing we would do is try to
decrease our losses and stop investing in the product. We would do this by stopping
the production, stop the marketing expenses and just try to limit all the expenses
related to our Vodka.
3. After stopping all the expenses, we would still need to sell all our inventory. To do
this, we would offer special discount prices and promotions. We would also sell all
the other assets located in Inda such as storage facilities and so forth.
4. Last but not least, we would definitely look back and see what valuable lessons could
be learned from our entry in the Indian market. Although it might not be a success, we
do believe that there are still some valuable lessons that can be learned from whatever
the reason might be that the product wasn’t successful. We believe that every failure
is a learning path and a step towards success.
Of course, we do believe that our Vodka will be a success and that we will not have the need
to implement our exit strategy.
References
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Banerjee, S. (2023, March 28). 31 Best Vodka Brands In India 2023: Key Ingredient To Many Cocktails.
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