Diageo made 1 entry attempt prior to Rowson’s Reserve. In Diageo’s first attempt to enter the market they had a joint venture with home a company, Radico Khaitan. Unfortunately, Diageo and Radico Khaitan’s partnership was unsuccessful and they were only able to release one whisky, Masterstroke, which was deemed a failure. Judging by the Diageo president’s emphasis of the new taste, packaging and unique synchrony to the Indian palate it is clear that Dieageo’s previous attempt with Masterstroke did not identify with the Indian demographic. The new president constantly wanted to remind the consumers that this was a new product, with new taste and packaging was crafted to the Indian preferences.
2. What entry mode does this Rowson’s Reserve attempt represent? Comparing with previous entry modes, what specific benefits/advantages does this latest entry mode bring to Diageo this time? In order to achieve such benefits/advantages, what additional resources, monetary and non-monetary, does Diageo have to invest? Rowsons Reserve is an equity stake entry process. As stated previously, Diageo attempted to enter India with the assistance of Radico Khaitan and failed, but this time Diageo will be in complete control of their own fate. They will be selling their whisky through 350 exclusive distributers. While it is true that joint ventures are less risky, require less investment and require less involvement than solo market entry attempts, studies have shown that full ownership strategies leads to faster expansion, greater control and higher profits. How Diageo responds to the initial consumer response will be key. As Diageo has proclaimed, their Whisky is crafted to the palate of the Indian consumers; it will be imperative that Diageo monitor their first quarter responses through research and development. 3. …show more content…
Suppose Diageo’s objective is to achieve 3% market share in volume (measured in liters) in the Indian spirits market by 2015, how many bottles of Rowson’s Reserve does it have to sell? How much revenue does that sales volume represent? What percentage does that Indian revenue represent in Diageo’s global sales (you may use Diageo’s 2013 or 2014 global sales to do this calculation, but you need to cite where that figure comes from)? Do you think this 3% objective is realistic for 2015? Please explain why or why not.
With a total market of 2 billion, 3% of the market we be a command of 60,000,000 liters of spirits consumed. Each bottle of Rowson’s Reserve is 750 ml, which equals .75 liters so it will require 80,000,000 bottles sold to achieve a 3% market share. At $13.10 per bottle, 80,000,000 bottles comes to career revenue of $1,048,000,000. As a company entering a foreign market after a previously failed attempt, I believe Diageo is setting too lofty expectations. As mentioned in the article by the senior analyst at International Win and Spirits Research, it is tough for a new company to enter. UB Group has essentially monopolized the market with their 43% percent control. The difficulty to obtain market share is further shown through the distance between industry leader UB Group and the number two brand, Pernod Reicard, which holds a market share of 13.3% 4. As Rowson’s Reserve is uniquely produced for the Indian market, there must be some degree of “localization.” Please identify three (3) product attributes that they have purposefully “localized” to suit the needs and/or preferences of Indian consumers. Rowson’s Reserve has been crafted to the specific preferences of the Indian consumers. The first product attribute is the slightly
2. What entry mode does this Rowson’s Reserve attempt represent? Comparing with previous entry modes, what specific benefits/advantages does this latest entry mode bring to Diageo this time? In order to achieve such benefits/advantages, what additional resources, monetary and non-monetary, does Diageo have to invest? Rowsons Reserve is an equity stake entry process. As stated previously, Diageo attempted to enter India with the assistance of Radico Khaitan and failed, but this time Diageo will be in complete control of their own fate. They will be selling their whisky through 350 exclusive distributers. While it is true that joint ventures are less risky, require less investment and require less involvement than solo market entry attempts, studies have shown that full ownership strategies leads to faster expansion, greater control and higher profits. How Diageo responds to the initial consumer response will be key. As Diageo has proclaimed, their Whisky is crafted to the palate of the Indian consumers; it will be imperative that Diageo monitor their first quarter responses through research and development. 3. …show more content…
Suppose Diageo’s objective is to achieve 3% market share in volume (measured in liters) in the Indian spirits market by 2015, how many bottles of Rowson’s Reserve does it have to sell? How much revenue does that sales volume represent? What percentage does that Indian revenue represent in Diageo’s global sales (you may use Diageo’s 2013 or 2014 global sales to do this calculation, but you need to cite where that figure comes from)? Do you think this 3% objective is realistic for 2015? Please explain why or why not.
With a total market of 2 billion, 3% of the market we be a command of 60,000,000 liters of spirits consumed. Each bottle of Rowson’s Reserve is 750 ml, which equals .75 liters so it will require 80,000,000 bottles sold to achieve a 3% market share. At $13.10 per bottle, 80,000,000 bottles comes to career revenue of $1,048,000,000. As a company entering a foreign market after a previously failed attempt, I believe Diageo is setting too lofty expectations. As mentioned in the article by the senior analyst at International Win and Spirits Research, it is tough for a new company to enter. UB Group has essentially monopolized the market with their 43% percent control. The difficulty to obtain market share is further shown through the distance between industry leader UB Group and the number two brand, Pernod Reicard, which holds a market share of 13.3% 4. As Rowson’s Reserve is uniquely produced for the Indian market, there must be some degree of “localization.” Please identify three (3) product attributes that they have purposefully “localized” to suit the needs and/or preferences of Indian consumers. Rowson’s Reserve has been crafted to the specific preferences of the Indian consumers. The first product attribute is the slightly