SUSTANING HP MOMEMTUM IN CROWDED STANDARD

SCOTH MARKET OF KARNATAKA

Back ground
Karnataka has seen steady rise of HP In last three years ., Three year back ( 2010-11)it was
very fragmented market with no clear leader, Teachers was market leader with 24 %
,HP 20 % VAT 69 18% ,BDC 12%, B &W 14% ,so no clear leadership, New Team of
Avinash, Sandeep & Inder ,took over reins of business. Team decided to gain & consolidated
leadership in category,
Key steps taken in last 3 years

Increased focus on Bangalore which contributed 67% of Industry

With in Bangalore Ratilonlized spends on Key accounts & Increase investment in
emerging Modern trade, which mean reduce key account-tie ups & Increase rentals
visibility & promotions in Modern Trade
Introduction of smaller SKU for HP ,Mini was launched in NOV 10 & subsequently
NOV 11 was launch of Pints & NIPS,
Increase distribution of new SKU in Region
Extensive Brand Building efforts i.e Tribute Amplification, every year, India Music
week, Bangalore Music week, Mlange concerts, Fusion music concerts
Continuous sampling at key occasions to youngsters throughout the year
Festive packs during peak season in MOT /PR outlets

Other factors /Changes

Break in Teachers operations for 8 months
Change in Packaging of HP & TEACHERS
NEW ATL /Change communication from True music to True legends
Focus approach to target youngsters by sponsoring events with younger audience
28-35

As result of above changes/interventions , HP today is clear market leader in volumes

& shares FY 13- 14 exit volume 56000 cases & share 37%
HP has also consolidated image leadership in the sense that it is seen as most premium
Brand in category
One can conclude HP in Karnataka as success story & All right initiatives were timely taken
in market
Current Situation & Challenges

Status
Signage's

Selectively Inshop with no Bottle shots

Promotion

Allowed with Promoters , Issue with Usage of POS in

Certain Markets

Displays

Yes

Events

Yes with Surrogate Branding

HP is clear market leader at across geographies & channels in region

Bangalore is biggest market for segment with two third of Industry
Mangalore & Davangere are two biggest market in ROK
37% of Bangalore volume comes from 200 outlets of MOT/KA

With an annual target of 1.7 Million cases, KTK is naturally, one of the most important
states for PRIPL. Traditionally, KTK has been divided into 2 Rate Areas : BANGALORE
constituting the Bangalore metro city and Bangalore Rural..other rate area is REST OF
KARNATAKA Market includes remaining markets of KTK
YTD FEB 14

Volume Snap shot KTK( YTD FEB 14)

BRAND

A 12-13'

YTD'13

YTD'14

CHANGE

THC

17,017

13,439

10,165

(3,274)

HP

49,016

32,838

36,332

3,493

BDC

18,449

12,960

13,548

588

VAT 69

26,433

17,745

20,031

2,286

B&W

16,647

10,049

16,056

6,008

OLD SMUG

147

143

(138)

HAIG

79

42

35

(7)

PP

123

106

39

(67)

OTHERS

3,234

2,580

1,098

(1,482)

TOTAL

131,146

89,902

97,309

7,407

B& W took advantages of stock outs in Q 1

TCH continue to loose, they fail to recover

Market Share snapshot EXIT VS YTD 14

BRAND

MS 12-13'

MS 13-14'

CHANGE

THC

13.0%

10.4%

-2.5%

HP

37.4%

37.3%

0.0%

BDC

14.1%

13.9%

-0.1%

VAT 69

20.2%

20.6%

0.4%

B&W

12.7%

16.5%

3.8%

OLD SMUG

0.1%

0.0%

-0.1%

HAIG

0.1%

0.0%

0.0%

PP

0.1%

0.0%

-0.1%

OTHERS

2.5%

1.1%

-1.3%

TOTAL

100%

100%

HP continue to hold shares & maintain leadership

B&W is only brand gaining significant shares

On/Off Outlet split is 54% & 46%

Vol. Contribution of ON/OFF premise is Equal
HP Market Shares are low in A class outlets & MOT which contribute 64% of region
industry Majority of A Class outlets concentrated in Bangalore
DATA is for YTD FEB 14
NO OF OUTLETS : UNIVERSE (SEGMENT)
Market

ON

OFF

MOT

Bangalore Urban

1,937

965

101

Bangalore Rural

399

530

Hubli

664

Davangere

TOTAL

472

439

635

1,289

2,902

97

129

233

461

929

781

103

155

251

895

1,445

467

647

140

167

255

546

1,114

Gulbarga

303

459

138

152

192

274

762

Mysore

543

491

61

66

143

759

1,034

Mangalore

691

523

67

146

294

711

1,214

5,004

4,396

1,078

1,254

2,003

4,935

9,400

Total

101

VOLUME Scotch Segment

Market

ON

OFF

Bangalore Urban

25,628

31,352

Bangalore Rural

2,757

2,764

Hubli

2,983

Davangere

MOT

TOTAL

40,408

6,560

3,941

5,889

56,980

2,775

1,094

925

710

5,522

2,454

2,358

1,074

967

1,060

5,437

4,149

4,149

4,762

1,846

980

706

8,298

Gulbarga

3,132

2,524

3,628

1,042

596

388

5,656

Mysore

4,939

2,427

3,858

1,063

653

1,852

7,366

Mangalore

4,530

3,343

3,961

1,264

1,378

1,317

7,873

48,118

49,014

61,750

13,942

9,441

11,923

97,132

Total

Contribution
Market

50%
ON

50%
OFF

15,923

15,923

16%
64%
VOLUME 100 Pipers
MOT

Bangalore Urban

8,992

9,770

4,672

Bangalore Rural

1,123

1,174

Hubli

1,467

Davangere

14%
B

10%
C

12%
D

100%
TOTAL

12,868

2,277

1,330

2,234

18,762

1,164

460

370

294

2,297

1,188

1,195

539

470

451

2,654

1,807

1,776

2,120

748

391

321

3,583

Gulbarga

1,908

1,591

2,227

678

386

207

3,498

Mysore

1,631

932

1,190

406

259

704

2,563

Mangalore

1,861

1,100

1,191

585

601

592

2,961

18,787

17,530

21,955

5,693

3,806

4,802

36,317

Total

Contribution
Channel Market
Shares HP

4,672

52%

48%

13%

60%

16%

10%

13%

100%

39%

36%

29%

36%

41%

40%

40%

37.4%

Bangalore Volume YTD FEB 14

BRAND

A 12-13'

YTD'13

YTD'14

CHANGE

THC

13,446

10,278

7,577

(2,702)

HP

28,509

19,429

21,058

1,629

BDC

13,035

9,264

9,630

366

VAT 69

15,766

10,588

12,754

2,166

B&W

11,078

6,788

10,559

3,771

OLD SMUG

147

143

(138)

HAIG

68

35

35

(0)

PP

64

50

19

(32)

OTHERS

2,717

2,173

869

(1,304)

TOTAL

84,830

58,748

62,506

3,757

B & W & VAT 69 both saw significant growth primarily driven by Stock out of competition
Brands in Q1.
Growth is also attributed to Increased spends in KA/MOT Channels.
Pipers holding onto it position while Teachers failed at their comeback

MARKET SHARE BANGALORE EXIT VS YTD FEB 14

BRAND

MS 12-13'

MS 13-14'

CHANGE

THC

15.9%

12.1%

-3.7%

HP

33.6%

33.7%

0.1%

BDC

15.4%

15.4%

0.0%

VAT 69

18.6%

20.4%

1.8%

B&W

13.1%

16.9%

3.8%

OLD SMUG

0.2%

0.0%

-0.2%

HAIG

0.1%

0.1%

0.0%

PP

0.1%

0.0%

0.0%

OTHERS

3.2%

1.4%

-1.8%

TOTAL

100%

100%

HP remains leader but shares are lower than region share

B & W & VAT 60 are the main gainers

CHANNEL ANALYSIS BANGALORE METROAS ON YTD FEB 14

HP is loosing share in MOT/KA Channels to B & W & VAT 69 owing to high Spends by USLDiageo Refer Bar chart above
Industry growth is stagnant in MOT & whereas growing by 5.5 % in MMR & 14.4 % in KA (
Driven by B &W & VAT 69) Refer pie chart above
KEY COMPETITION ACTIVITIES & SPENDS CHANNEL WISE
Key Accounts

MOT/PR

BDC Sold 1600 cases under

2+1 from August- December

B & W sold 1500 cases at Rs

25 Peg off period AugustDecember
Vat 69 Sold 770 cases at Rs
25 peg off Period AugustDecember
BD 12 sold 714 cases with
2+1 offer period august
December
Total New year sponsorship
given by USL on BD ,BDC,
VAT 69 & B& W is estimated
to be Rs 14600,000
( Outlet wise details & some proofs are
attached as reference)
Total estimated marketing spend Rs
24600,000

Vat 69 did Special festive

offer GWP with Glass 1000
cases cover
B &W did Special festive
offer GWP with Glass 900
cases cover

BDC
did Special festive
offer GWP with Glass 1500
cases cover
About 200 cases of BDC
were sold on special price Rs
100 off during new year
Trip to Scotland offer
Portfolio offer on all scotches
Top 50 outlets ,they have
send 3 consumers to
Scotland Approx spend on
promo Rs 850,000
BDC wall units/BDC 12
Pedestals in MT outlets & 20
no of manpower in MT
outlets in Sept- Dec
Total estimated Marketing spend- Rs
8400,000

Mass Market Retail

BDC did display contest at

top 300 retail outlets they
paid Rentals to tune of
average of Rs 3000 per
outlet for 2 months
BDC did glass offer in MMR
giving cover of 2000 cases,
Glass cost was about Rs 70
Portfolio offer on all Brands
of USL Rs 2000000 was
spend on gifts
Retail Rentals at 100 outlets
i.e. Rs 2500,000
Fabrication cost for retail
visibility - Rs 10000,00
Total estimated Marketing
spend- Rs 1000,0000

COMPETITION SPENDS

Manpower

Consumer Promo Sponsorships

Rentals
Visibility
Total
Channel
Rs
Rs
Rs
Rs
th
MOT Erstwhile1,000,000
6,400,000
Andhra Pradesh, is the
5 largest State (by area) in India with a1,000,000
total population 8,400,000
50 million14,600,000
IMFL case industry size. The PRIPL operative24,600,000
Clubs of 84.7 million and an estimated
10,000,000
cases and PRIs enjoys a volume
market share
of 39%. The10,000,000
MMR segment is close to 11.3 million4,700,000
4,300,000
1,000,000
Imperial Blue with upward of 2.5 million cases is by far the largest state in the country and 43,000,000

MARKET PRIORTISATION
Bangalore is biggest market for
scotch with 64% of Industry
Refer Bubble chart
HP MS

Davangere ,Mysore & Mangalore

are 3 top upcountry markets &
also growing faster than
Bangalore Refer Bubble Chart
Share loss in growing Mangalore
Market is concern Refer Bar
chart

HP GROWTH

ANALYSIS TOP OUTLETS

Very high Contribution of Competition volumes comes from TOP 200 outlets due to Higher
Trade scheme & Spends in these outlets
40% of Segment concentrated in Top 200 outlets, 85% of them
Bangalore/Mangalore

MONTH ON MONTH WOD

HP way ahead in WOD across all packs Refer Line chart

August 13 HP faced stock issues as result B & W /VAT 69 took advantage

located in

SKU WISE WOD

SKU

HP

B&W

BDC

TCH

VAT 69

3679

2279

1253

2557

3566

1837

941

962

1406

1186

457

825

1131

5141

3019

2766

3099

4205

371

82

267

187

2L

230

Route to Market
Corporation Market
The KTK liquor industry is controlled by Karnataka State Beverages Corporation Limited
(KSBCL)
KSBCL Operations
The Corporation procures liquor and beer from Distilleries and Breweries at
particular prices ,Company are free to price their product but they need to take cost
card approval at beginning of year
There are 53 IMFL depots spread over KTK
Liquor License Policy
No new licenses have been issued for last 15 years but existing license holders can sell
& transfer their license to another party, Every year licenses needs to renewed by
paying fees to excise
Promoter in KTK
Classing Alcobev in KTK has been promoter for PRIPL for the last 15 years. They played a
major role in laying the foundation for the company in the region. They helped build a
strong association with retailers using his strong interpersonal and PR skills.

Group is required to analyze following Problems & address some challenges relate to these
problems

Key Problem areas

Key Challenges

Category growth in Bangalore

has slowed down to 6.4%

Prices have increased by 18% , i.e.

from 1208 to 1420 Prices in
segment likely to go up further
due to increase in scotch malts.

HP Loosing Shares in Key

Accounts/MOT channels in
Bangalore to B & W & VAT 69,
These outlets have High
contribution of volumes for Vat
69, B & W & BDC. These are Top
200 outlets for the segment in
terms of volume

MOT and KA are High Spend

channels in terms of (MOT rentals/
Club Peg offers & KA tie
ups).Increased spend s in channel
have direct impact on shares.
Consolidation of USL Diageo
Spends in these outlets, they have
spend close to 4 CR in first half in
these channels

Teachers continue to enjoy strong

equity among consumers

Mangalore losing 3.5% shares

If they come back properly ,they

can regain shares
Key syndicates driving shares in
segment

Avinash, Sandeep & Inder are sitting & discussing how do they defend HP share against
onslaught of spends from competition especially in Bangalore Metro? ,How to counter threat of
Teachers come back ? & How to grow category to gain volumes? These 3 have great
performance record for 3 years would like to maintain their credibility before they are
transferred to other geographies ,Please suggest them way forward to tackle these issues, your
inputs are valuable