Export Strategy

International Marketing
Table of Content
1 Introduction....................................................................................................................................5
2 Methodology...................................................................................................................................6
3 Executive Summary.......................................................................................................................7
3.1 Marketing plan...............................................................................................7
3.2 Market segmentation......................................................................................7
3.3 Positioning......................................................................................................7
3.4 Market mix.....................................................................................................7
3.5 Product adaptation..........................................................................................7
3.6 Promotional mix.............................................................................................8
3.7 Distribution/distribution channels..................................................................8
3.8 Pricing............................................................................................................8
3.9 Financial statements and budgets...................................................................8
4 Mission Statement..........................................................................................................................9
5 The Marketing Plan.......................................................................................................................9
5.1 Marketing Objectives.....................................................................................9
5.1.1 Target Market.......................................................................................10
5.1.2 Positioning............................................................................................12
5.1.3 Market Penetration and Coverage........................................................12
5.1.4 Expected Sales.....................................................................................15
5.1.5 Profit Expectations...............................................................................15
5.2 Product Adaptation.......................................................................................16
5.2.1 Core component description................................................................16
5.2.2 Packaging.............................................................................................16
5.2.3 Services................................................................................................17
6 Promotion mix..............................................................................................................................19
6.1 Advertising...................................................................................................19
6.1.1 Objectives.............................................................................................19
6.1.2 Promotional Goal.................................................................................20
6.1.3 Detailed promotional strategy for our test market...............................21
6.1.4 Conclusion............................................................................................31
7 Distribution from Ireland to the USA........................................................................................32
7.1 Mode selection.............................................................................................32
7.1.1 Transportation within Ireland...............................................................32
7.1.2 Transportation to the USA...................................................................32
7.1.3 Transportation within the USA............................................................32
7.2 Selection of ports..........................................................................................33
7.2.1 Port in Ireland.......................................................................................33
7.2.2 Port in the USA....................................................................................33
7.3 Packing.........................................................................................................33
7.3.1 Coding and labeling regulations...........................................................33
7.3.2 Packaging of our product.....................................................................34
7.4 Documentation required...............................................................................35
7.4.1 Transportation documents:...................................................................35
7.4.2 Commercial documents:.......................................................................36
7.4.3 Government documents:......................................................................37
7.4.4 Other important documents:.................................................................38
8 Channels of Distribution..............................................................................................................40
8.1 Introduction..................................................................................................40
8.2 Foreign market entry....................................................................................40

8.3 Foreign Manufacturing.................................................................................40
8.3.1 Production and exporting.....................................................................40
8.3.2 Bottling in the US.................................................................................40
8.4 Joint Venture................................................................................................41
8.4.1 Explanation..........................................................................................41
8.4.2 Diageo..................................................................................................41
8.4.3 Implications & Benefits.......................................................................41
8.5 Wholesalers..................................................................................................42
8.5.1 Functions..............................................................................................42
8.5.2 Mark-up................................................................................................43
8.5.3 Methods of operation...........................................................................43
8.5.4 Scale of operation.................................................................................43
8.6 Retailers........................................................................................................43
8.6.1 Type & number....................................................................................43
8.6.2 Retail mark-up......................................................................................44
8.6.3 Methods of operation...........................................................................44
8.6.4 Scale of operation.................................................................................44
8.7 Conclusion....................................................................................................45
9 PRICING......................................................................................................................................46
9.1 Cost Determinants........................................................................................46
9.2 Conclusion....................................................................................................48
10 Budgets..........................................................................................................................................50
11 Conclusion.....................................................................................................................................51
12 Bibliography.................................................................................................................................52
12.1 Books............................................................................................................52
12.2 Internet.........................................................................................................52
13 Appendices....................................................................................................................................56
13.1 Certificate of Origin.....................................................................................56
13.2 APPLICATION FOR EXPORT CERTIFICATE........................................59
13.3 Importers/ Exporters packing declaration....................................................61
13.4 Example of an Acceptable Combined FCL/LCL Annual Packing
Declaration...............................................................................................................62
13.5 PACKING LIST...........................................................................................63
1 Introduction
Several hundreds of years ago our company was founded by a purely Irish man who
was keen on Irish whiskey. He named the company Green Valley Distillery because
the distillery was situated in one of the most beautiful valleys of Mayo. For many
years the company was famous for producing high quality, real Irish whiskey called
Green Heritage. For its pure, unique taste the whiskey was known far beyond Ireland.
Years passed. Hundred of years ago the company decided to capture Europe. In the
first years of going abroad, Green Heritage discovered many people who liked the
taste of the pure Irish drink. Years later, Green Heritage won many awards, including
The highest quality whiskey and The favourite trademark.
Nowadays it is not enough for the company to be known merely in Europe. Therefore
the team of six people - Thomas van Helvoort, Konstantin Ignatov, Rosemary
Landeweerd, Irena Lityanska, Daniela Naydenova and Hannah van der Stok were
chosen to participate in a venture of penetrating the American market.
Succeeding and bringing to every American the image of Ireland and the finest taste,
as well as the high quality, which can be experienced with every sip of Green
Heritage, became the major priority for Green valley distillery.
-5-
2 Methodology
Our methodology is simple, yet effective. When we first joined together as a group,
we realized that the best way to start working together was by getting to know one
another. A group dinner was an informal setting to discuss ideas, different opinions
and previous experience with group work.
From the start we set up clear time oriented goals, in order to give ourselves enough
time to finish every part sufficiently. We had two meetings per week and kept in
contact via e-mail, phone and MSN messenger.
Our assignment for Marketing was to successfully implement a new whisky brand on
the US market. Before we could start with our marketing plan, we first had to conduct
a lot of research. We had to find out who our target group would be and what kind of
whisky we would produce to introduce on the US market. We divided the research
and after analyzing the findings we came to the conclusion, of producing a triple
blended Irish whisky.
After we decided on the type of whisky, we had to choose in which state we wanted to
implement our brand. By looking at our target group, people between 25- 40 and
people with an Irish background, we decided to target the state of Pennsylvania. We
do not want to target the whole state immediately, but we want to first start with
targeting the three biggest cities in Pennsylvania: Harrisburg, Pittsburg and
Philadelphia. If our brand becomes a success we can expand to other cities, even to
other states.
As we have representatives of four nationalities (Dutch, Ukraine, Bulgarian and South

African) we were able to benefit from this by combining the different views, opinions,
backgrounds and the ways we approach new markets, to many areas of this report.
The main objective of this project is to construct a good marketing plan, which gives
us the opportunity to successfully implement our whisky brand on the US market.
For the structure of our marketing plan we used the marketing mix strategy: place,
product, price and promotion. We divided all the work and with help of the marketing
textbook and by conducting research, we found enough information to write a well-
structured marketing plan. The marketing plan deals with all the critical points, before
one can introduce a new product on a new market.
All the collected information originated from secondary data. This secondary data was
based on the main textbook of the course and to a large extend with use of the Internet
As a conclusion we would like to state that we strongly believe this marketing plan
would help us to reach our main objective. We feel that by the intensive research we
have conducted, we will not have to deal with unexpected surprises, when entering
the US market in real life.
-6-
For more detailed information on the sources used, we refer to the bibliography at the
end of this report.
3 Executive Summary
Within this international marketing project we have created a marketing plan that will
facilitate the market entry of a top-selling European Irish whiskey into the United
States. Our product is a high quality blended whiskey called Green Heritage.
Specifically, we will target the state of Pennsylvania initially focusing our efforts on
three major cities – Pennsylvania, Pittsburgh and Harrisburg.
This report consists of several main sections:
3.1 Marketing plan

To initiate our marketing plan we have formulated a mission statement and long and
short term marketing objectives. Theses objectives are concerned with expected sales,
market share, penetration of the market, market coverage and expected profits.
3.2 Market segmentation

With the intention of precisely determining our target group, we have performed
various market segmentations. These were conducted on the basis of geographic,
demographic and psychographic segmentation. This provided us with a clear
customer profile of our potential end-users. An extensive analysis of competition was
conducted thus enabling us to make an effective positioning of our brand.
3.3 Positioning
Green Heritage will be positioned as a qualitative Irish whiskey, yet at an acceptable
price. We have positioned ourselves strategically with regard to our competitors
generating a competitive advantage.
3.4 Market mix

Most vital to the success of Green Heritage is the market mix. This consists of the
following:
3.5 Product adaptation

The core product we will market is a12-18 year old, blended, Irish whiskey with
alcohol strength 40%.
Packaging, bottling and labelling will all be matched with our projected image and
aim to reach our target group. These aspects will also comply with the numerous legal
requirements.
Sales support services will consists of an official website and an office in Philadelphia
which performs multiple functions, such as market research, customer support, and
others.
-7-
3.6 Promotional mix

In order to promote Green Heritage to our target market, our company will engage in
various advertising campaigns ranging from advertisements in magazines,
newspapers, on posters and billboards to advertisements on buses. This, in
combination, with our sales promotion and PR activities will inform, attract and
persuade people to purchase our product. All promotional activities will also be varied
with the different (seasonal) holidays and occasions.
3.7 Distribution/distribution channels

Green Heritage has to be distributed from the manufacturer in Ireland to the end-user
in Pennsylvania. Hereby we have considered the different channels of distribution.
We will export unbottled whiskey in bulk from Ireland and import this into the States.
The whiskey will first travel in bulk by truck from the distillery to the port in Dublin.
Consequently a shipping service will transport the bulk containers to the port of
Philadelphia.
All further distribution will take place by truck. The successive stages entail the
passage through wholesaler and retailers.
Vital is the joint venture that Green Valley will create with Diageo to allow us to use
existing relationships of their established distribution network.
With this distribution process we have come across various legal aspects that have to
be taken into account. These include packaging and labelling requirements, as well as
transportation, commercial, government and other documentation for export and
import.
3.8 Pricing
A retail price for Green heritage was calculated by adding all associated costs
including cost of production, bottling, packaging, labelling, insurance, transportation,
export fees, harmonized tariffs, distribution mark-ups, excise tax, value added tax,
promotion costs, and our own profit margin. Also considered within this section are
terms of sale and methods of payment.
3.9 Financial statements and budgets

To calculate whether our planned activities and actions would be feasible, we have
made several financial statements and budgets. Within this section we have
considered all expenses associated with our plan, as well as expected sales and profits.
These have revealed the potential for introducing Green Heritage into the
Pennsylvanian market.
Overall, integrating our recommended strategies will ensure the successful entry of
Green Heritage into the United States whiskey market.
-8-
4 Mission Statement
For a lot of people tradition is something valuable. The whisky from our Green Valley
Distillery is full of Irish history, culture and tradition. We feel that this history is so
rich, that we want to share it with other people.
It is our mission to let people all around the world enjoy the pure richness of our triple
distilled blended whisky. We want to offer them a whisky that tastes trusty and gives
them the feeling they are appreciated.
We will deliver a positive and luxury experience to all our customers, because we
believe our product has a unique character, which distinguishes itself from the
competition; today and tomorrow.
We will start by introducing our whisky only in one state of the USA, but soon we
will expand because everybody deserves a little tradition.
5 The Marketing Plan

5.1 Marketing Objectives
At the starting point of setting up a new product on an unfamiliar market, it is crucial
to define the goals and objectives that should be met by our company in the future.
When the goals are reachable and clear there is a higher probability of a future
successful performance of our company.
The product that we want to introduce on the American market is a blended triple
distilled whisky, which will be 12-18 years old.
We, as an already long existing and successful company, selected the following
objectives that we plan to achieve through the process of hard and efficient work and
detailed research of the market that we are going to enter.
The primary objective for us at this point is to first establish a reasonable market share
in the State Pennsylvania that would fit into the current market and as a result be
profitable. From there we can expand to other States.
We have divided our objectives into short-term and long-term objectives.
Short-Term Objectives
 Ensure a strong start for Green Heritage on the Irish whiskey market in
Pennsylvania by making the customers aware of the existence of our product in
advance with a successful promotional campaign.
 Effectively position Green Heritage as a semi-exclusive quality product at a
reasonable price.
 Reach a 10% market share within the Irish whiskey category in Pennsylvania at
the end of the first year.
 Continuously increase customer awareness by using promotional campaigns.
Long-Term Objectives
 Establish a firm position on the market in Pennsylvania and become the number 2
selling whiskey in the 3rd year after the introduction of Green Heritage.
 Reach a 30% market share at the end of the 5th year and maintain continuous
growth
 Develop a strategy for expansion to other States’ markets
-9-
 Make more sales as a result of an expansion to other States and increase the net
profit.
5.1.1 Target Market

In order to determine the exact characteristics of our target market we performed a
careful marketing segmentation using different bases. These segmentations will
provide us with a target group that is substantial, accessible, identifiable and
measurable.
5.1.1.1 Geographic segmentation

Geographic segmentation determines the location chosen for development of a
market.
Based upon current national consumption patterns of Irish whiskey, as well as general
population figures and incomes per state, we have determined to target Pennsylvania.
It is very important that Pennsylvania has the biggest consumption of Irish whiskey
from all the government controlled states and is also home to a relatively large
population with Irish ancestry. The other major reasons for targeting Pennsylvania
are: relative proximity from the port of origin in Ireland with respect to the whole
territory of USA, easy accessibility from big sea ports, location that gives possibility
for market expansion throughout the whole Eastern coast and other close inner states
with promising spirits markets. The capital of Philadelphia is Harrisburg and the other
two biggest and most famous cities are Philadelphia and Pittsburgh. These will be the
chief cities for our promotional campaign.
- 10 -
5.1.1.2 Demographic Segmentation

Demographic segmentation is an important basis related to consumers’ behavior and
can be divided into several sub-bases. The sub-bases we have used for segmenting the
market are age, gender and income.
5.1.1.3 Age and Gender

Our target group encompasses the male population between 25 and 45 years of age.
The lower limit will imply relatively young people who have just started working or
are in their final years of university/college. We have selected the upper limit of 45
years of age because we believe higher aged categories will increasingly value more
exclusive whiskeys and they are more brand loyal than the younger generation.
The whole population of Pennsylvania according to the data that we have obtained
from the U.S. Bureau of the Census (Profile of General Demographic Characteristics:
2000) is 12,281,054. The people living in metro areas are 84.3% of the whole
population, which is favorable for our product because we will target the cities. The
whole legal drinking age population of Pennsylvania for distilled spirits, male and
female from 21 to 85 and more years of age, is 8 352 000.
The number of people in our target group (25-45 year old men) is approximately
2,000,000. A big advantage for the popularity of our Irish product is that 18 % of the
whole population of the state, and we assume from our target group also, has Irish
ancestry.
We can expect people that do not belong to our initial target group to be our potential
customers as well. However lowering or increasing the age limits will imply the need
for different promotional strategies (different advertising campaigns etc) making this
aspect more costly and complex. The currently selected age category will allow us to
follow single promotional strategies adequate for all ages involved.
5.1.1.4 Income
The statistics shows that the median family income in the state of Pennsylvania is
about $49 184. In relation to our pricing strategies, we aim to reach the middle class
to upper-middle class of the population because in general spirits are not cheap
alcohols and even though Green Heritage is not a super-premium whiskey, it is still a
higher-end quality product.
In combination with the selected age category, we believe this market segment
according to income, to be most appropriate.
5.1.1.5 Psychographic Segmentation

Psychographic segmentation is important because it explains the psychological
motives for buying. The sub-variable of psychographic segmentation that is of
significance for our product is lifestyle segmentation.
Green Heritage Irish whiskey is designed for people belonging primarily to the middle
and upper middle class, who can appreciate a good quality whiskey. At the same time,
however, they are not willing to pay extreme prices, as is the case with exclusive
whiskeys. Green Heritage is a higher-end quality product but not an ultra-premium
product and is therefore more affordable so it can reach larger masses of people with
various drinking habits. Our strategy is to target from young adventurous just-starting
drinkers to more educated drinkers with a built taste for high quality products. Green
Heritage is suitable for diverse drinking occasions at home or when going out, it also
makes a perfect present for friends or family. Green Heritage should be the brand of
- 11 -
choice for the younger crowd who attend pubs and bars more often and would like to
become acquainted with the unique taste of Irish whiskey at a reasonable price. Our
target group will not purchase alcohol for the sake of drinking alcohol nor will they be
completely brand loyal.
Green Heritage’s potential as a cocktail ingredient makes it sellable even to people
who are not particularly whiskey drinkers but like to experiment with different tastes.
As a cocktail drink Green Heritage can earn female fans as well, for whom we can
especially develop promotional campaigns in the future.
In conclusion we can say that we aim to introduce our product to people with a
particular lifestyle corresponding to the whiskey itself and seeking for such benefits:
namely a good blended whiskey at a reasonable price.
5.1.2 Positioning
Positioning is a process that influences the customer’s perception of a brand – how the
customer qualifies a brand in comparison with the brands offering similar
services/products. We would like to position our brand just below Jameson in terms of
price but the quality perceived by the customers should be on an equal level with the
most selling Jameson brand. This will give Green Heritage a competitive advantage
especially after the customers discover its genuine quality. We will not allow the
image of our product to be impaired due to the slight price difference. Our
promotional campaign will strongly stress on the quality and the Irish heritage that
our whiskey embodies.
High price
Premium single
malt Irish whiskies
Jameson
WHISKEY X
Low High
quality
Blended Young
Irish Whiskies
Low price
5.1.3 Market Penetration and Coverage

As we have stated in our short-term objectives we have decided to first concentrate on
introducing our product in the state of Pennsylvania and after the 5th year we would
like to develop expansion strategies for the other states on the Eastern coast of the
USA. In order to make a realistic estimation about the future market coverage of our
product we have conducted a research and calculated the market shares in
- 12 -
Pennsylvania of the whole whiskey category followed by segmentation of the

Imported whiskey category and current market shares of the four most selling Irish
whiskey brands. The pie charts below are prepared on the basis of the National
Alcohol Beverage Control Association annual economic reports, providing figures
about the case sales of distilled spirits by category and brands per state.
Chart 2 - Pennsylvania distilled spirits market shares per 2002
Tequilla Domestic Whiskey

Cordials 3% 11%
17%
Imported w hiskey
Brandy 13%
3%
Gin
Rum
7%
15%
Vodka
31%
Chart 3 - Pennsylvania Imported whiskey market

shares per 2002
Irish
3%
Scotch
34%
Canadian
63%
- 13 -
Chart 4 - Pennsylvania Irish Whiskey Category Market Shares per 2002
John Pow er Others

4% 5%
Bushmills
14%
Tullamore Dew Jameson

16% 61%
Pennsylvania has the biggest alcohol consumption among all the government-
controlled states. According to the NABCA controlled state statistics “Apparent
consumption of distilled spirits by state in wine gallons for 2002” Pennsylvania’s
consumption from January to December 2002 was 12 096 028 gallons which equals to
45 788 450 liters, respectively 5 087 605 nine liter cases. In comparison with the
annual consumption for 2001 there was a growth of 2.6%. This figures combines dark
and white spirits consumption. According to the NABCA report the total consumption
of whiskey in the Irish category for 2002 was 21 000 nine liter cases. This means that
the Irish whiskey category is a very small fraction of the total consumption of distilled
spirits but this is not a worrying factor because the trend since the beginning of the
90’s is towards continuous growth in all the USA states. It is actually the fastest
growing category due to the perceived high quality of most of the Irish whiskey
brands and the growing popularity of “all things Irish”. This is also reflected in the
Pennsylvania case sales of Irish whiskey, growing with approximately 7% per year.
Chart 4 - Pennsylvania Irish Whiskey Case sales
21000
19543
17990
16309
Year 1999 Year 2000 Year 2001 Year 2002
- 14 -
5.1.4 Expected Sales

As stated in our objectives, we expect to reach a 10% market share within the Irish
whiskey category at the end of the first year. We expect an initial boom of sales due to
our strong promotional campaign, which should ensure good awareness among our
target group before the release of the product and thus built curiosity and desire in the
people to be among the first to try the new whiskey. The sales should grow gradually
and double in the second year after our customers become familiar with the quality of
the product and start recognizing it as their preferred whiskey. In the third year we
already expect to outsell Tullamore Dew and Bushmills, thus becoming the second
selling brand after Jameson. As our sales grow parallel with the growth of the entire
Irish whiskey segment we recognize this as more potential for expansion of our
product market share. In the 4th and 5th year Green Heritage should already have
firmly established its positions on the Pennsylvanian market and naturally the %
annual sales growth will be declining because the sales volumes will be much bigger.
We expect that after the 5th year the sales annual growth should stabilize at 30-35%.
Table 1 - Green Heritage Expected Sales and Market Share
Expected
Total sales
Green Green for the Expected Green
Heritage Heritage Irish Total sales Heritage
Green Heritage Expected Expected category growth for Expected
Expected sales sales (750 sales (in 9 liter the Irish Market
Period (9 liter cases) ml bottles) growth % cases) category % Share %
Year 1 (2005) 2000 24000 0 21000 0 10
Year 2 (2006) 3000 36000 50 22260 6 13
Year 3 (2007) 4350 52200 45 23596 6 18
Year 4 (2008) 5873 70470 35 25011 6 23
Year 5 (2009) 7928 95135 35 26512 6 30
5.1.5 Profit Expectations
We expect a net profit of $3 per bottle so the expected profit for the first 5 years
should be as follows:
Table 2 – Profit Expectations
Year Expected sales in Retail Price in Project Expected Net
750ml Bottles US dollars Revenues in US Profit in US
dollars dollars
1 24,000 26.96 647,064 72000
2 36,000 26.96 970,596 108000
3 52,000 26.96 1,401,972 156000
4 70,470 26.96 1,899,942 211410
5 95,135 26.96 2,564,935 285405
Tota
l 277,605 7,484,508 832815
- 15 -
5.2 Product Adaptation

5.2.1 Core component description
Name: Green Heritage Irish whiskey
Age: GH is a blend of malt and grain whiskeys, triple

distilled and aged between 12 and 18 years, in oak and
sherry casks.
Alcohol Strength The alcohol strength of Green Heritage is 40%
Nose: Deep aroma of refined honey scented maltiness
Taste: Light and smooth at first. Possessing a full malty and

rich middle and a delightful honeyed sweetness, which
rolls around the palate, filling the mouth. It glides over
the taste buds with the well-balanced smoothness of oak
wood overtones.
Finish: The powerful blended maltiness leaves a lingering

sensation of the first grain pleasing the palate and
stimulating the desire for more.
5.2.2 Packaging
5.2.2.1 Bottling
To package our 0.75 liter( 25.4 ounces) bottle we have chosen for a bottle with white
glass. Through white glass the pure, true color of our blended whisky will be more
accentuated. For the size of the bottle we believe that the following size is the most
suitable: 300 x 85 x 85 mm. This size is best for us with regard to the efficiency of
packaging of our product in boxes, pallets and containers.
5.2.2.2 Labeling
Labeling is used for distinguishing all the different brands and is a source of useful
information about the content. All kinds of information can be found on the label,
depending on the seller.
Information found on the label:
 Origin
 Where the whiskey is made
 Content and alcohol percentage
We have chosen to put two labels on our product: a front label and a back label. For
our blended Irish whisky we have chosen for the following things to be on the label:
5.2.2.2.1 Front Label

Name/ type - For the name of our blended whisky we have chosen ‘Green Heritage’.
The logo of our whisky will be placed under the name. Under the logo we will put the
whisky type of our product, which is Irish whisky. Because we believe that our
- 16 -
product is more exclusive than most of our competitors we will write ‘Finest Irish
Whisky’ under our logo. This will be written in a different kind of writing than the
real name of the whisky.
Age - Under the type of whisky we will write the age of our product. We will write
‘Aged 12 Years’ under the type of whisky, since for blended whiskey it is required to
mention the youngest aged whiskey on the label. The number twelve should be
highlighted in a way that it will catch the consumers’ eye.
Origin - Under the age should be written where it is bottled. For our Irish whisky we
will put the text ‘Produced in Ireland, bottled in the United States’.
Bottle Content - Also the contents of the bottle should be on the label. We have
decided to bottle our whisky in 0.75 liter bottles, which equals to 25.4 ounces. For the
place on the label we have chosen left-under. Because the label should be designed
for the US customer it will be written on it ’25.4 Oz ℮’. The letter '℮' behind the
volume indication refers to the measurement of the volume. '℮' stands for filled in. If
you empty the bottle, you get out somewhat less, since the bottle inside remains wet.
Alcohol Strength - We will write our alcohol strength right at the bottom of our label
on the same height as the bottle content. Since strength of our whisky is 40 percent,
we will write ‘40% vol.’ on our bottle.
5.2.2.2.2 Back Label

Name - Again we will put the name and the type of our whisky at the top center of
the back label. For the name and the type we will use different kinds of writing styles.
Background - Under the name and type we will write a little bit about the
background of our product. Where does it come from and in what special way is it
distilled. We will do this in a way that it looks as if it is been written by the president
of our business. This will be done to make it more personal towards the customers.
First a small text of the background is displayed, followed by the signature of the
president.
Address - On the bottom left of the label we will give the consumer information of
how to reach us and where we are located. A free phone number can be found here for
further questions or remarks.
Barcode - A barcode will be placed on every bottle so that we can trace every bottle
anytime, anywhere. It is important for us to be able to know which bottles have gone
where and if there is a problem with one of the bottles, it can be checked if the bottles
made at the same time have the same problems. We will put this barcode on the right
bottom of the back label.
5.2.3 Services
We will have an office situated in Philadelphia- Pennsylvania.
5.2.3.1 Office
This office will provide the following services:
- 17 -
 A team of people will be responsible for tracking the progress and

performance of Green Heritage in the United States.
 They will do market research, while identifying the changing trends and
preferences of the target market.
 There will also be a call center that will answer any enquiries, comments
and/or complaints, handle warranty issues, etc.
5.2.3.2 Website
Green Heritage will have a formal website where customers can find information on
the company, product and other interesting facts about Irish whiskey.
- 18 -
6 Promotion mix
Today’s America is involved in a serious love affair with all things Irish. The Irish
culture has invaded the United States. Americans are flocking to stage productions
such as “River Dance”, there are best sellers and box office hits out of books and
films such as “Angela’s Ashes”, “My Left Foot” and “Michael Collins”. The U-2 rock
band and superstar singing ensembles like The Irish Tenors draw sell-out audiences
wherever they perform. Irish pubs and restaurant drinking establishments are opening
every two weeks somewhere in America. All of these, among many other examples,
have done wonders for the growth and future outlook of Irish whiskey, which is the
true, original “uisge beatha” or “usquebaugh,” the Gaelic water-of-life, the oldest
whiskey in the world.
Therefore, Green Valley plans to use several promotional strategies to efficiently

penetrate the Pennsylvania, in particularly, Philadelphia whisky market. These
strategies will include a media mix such as in-store advertising, advertising through
magazines, posters, posters on buses and/or taxies, billboards, newspapers and PR
activities. Green Valley will enter the Philadelphia, Harrisburg, and Pittsburgh market
by March 2005, just in time for the annual Philadelphia St. Patrick’s Day parade.
Then also using the same promotional strategy for Pittsburgh and Harrisburg.
The Irish whiskey market may still be the smallest distilled spirits category in the
industry, with a total annual sales volume in the US that is under half a million cases.
But it is also the fastest-growing category of them all, as well as a category
predominately made up of higher-end premium, super-premium and ultra-premium
brands.1 Therefore Green Valley will be positioned at the upper- middle end of the
market, demanding a reasonable price for high quality.
6.1 Advertising
6.1.1 Objectives
Our main objective is to inform create awareness among our target group, 25 to 45
year old middle to upper class, male population of Pennsylvania, about the experience
and benefits of drinking our Green Heritage blended Irish whiskey. We will be using
a pull strategy, which includes stimulating customer demand in order to enhance
product distribution.
In order to achieve our advertising objectives we will divide it into four different time
periods, because these objectives will change as our product moves through the
product life cycle. These are as follows:
Pre-introduction: In January of 2005, we will implement light advertising to bring

general awareness in the form of in-store advertisements at liquor stores around
Philadelphia, Pittsburgh, Harrisburg and Irish pubs and bars. About 180 pubs, bars
and clubs, will be targeted, of which 17 are Irish pubs or restaurants in Philadelphia.
In Harrisburg we will target 42 bars of which 4 are Irish. Pittsburgh has 184 bars,
1
Website
- 19 -
pubs and clubs that we will target. The liquor stores will begin to display posters for
Green Heritage. Billboards and buses (transit cars) etc. will also display eye-catching
posters. Taste promotions in liquors stores etc.
Short term: First year: Gain up to 40% of brand awareness within the target market
and sell 24,000 bottles of GH (Green Heritage) for the first year. These objectives will
be accomplished through heavy advertising and brand building procedures.
Mid term: Second and third year: To gain a rise of at least 5-10% of brand awareness
within the target market annually. The second year we aim to sell 36,000 bottles.
Third year will also increase the number of bottles sold and that would be 52,200.
Long term: Fourth year until the fifth year: To gain at least 5% of brand awareness
within the target market annually. Our optimal goal is to sale more than 95,000 bottles
per year.
Underneath is a table indicating the advertising objectives for Green Valley’s Green
Heritage Irish whiskey:
Goals for Bottles Pre- Year 1 Year 2 Year 3 Year 4

introduction
Sold - 24,000 36,000 52,200 70,470+
Brand Awareness 15% 40% 50% 60% 65%
6.1.2 Promotional Goal
Our promotional goal will include a universal promotional strategy that will be
focusing on the whole of Pennsylvania. Underneath we have outlined our goals for the
first to fifth year of introducing GH into the US market.
First year: In the first year we will start to implement our promotional strategy in the
three big cities, Pennsylvania, Harrisburg and Pittsburgh. We will use advertising
media such as Magazines, Billboards, Posters, Newspapers and advertising in bars
and pubs.
Second and third year: We will expand our promotional strategy to at least a quarter
to a half of the state Pennsylvania.
Forth and Fifth year: Our aim here is to spread our campaign to three quarters and
eventually the whole of Pennsylvania after five years. In this way we will reach total
coverage of the whole state. We will then be aiming at cities ranging from the eastern
side of Pennsylvania such as Easton to Lancaster and other cities such as
Chambersburg to Baldwin. (Please see the map of Pennsylvania below.)
- 20 -
6.1.3 Detailed promotional strategy for our

test market
6.1.3.1 Media Mix
The following promotional strategy is focusing on Philadelphia, because that will be

our test market, but it is applicable to the rest of the state as well. We will then be able
to change, add or improve our strategy before we apply this to the whole state.
There are various media options available to introduce Green Heritage to our target
market. Our target market being 25 to 45 year old, middle to high-class whiskey
drinkers want an exclusive, qualitative, yet not too expensive drinking experience.
Due to the concentrated city areas nature of this target market, advertising through
mainstream media such as television will not make a significant impact in reaching
the market. It can also be seen as unconventional in terms of cost.
We will focus on specific media advertising, but we have thought of using some of
these options during our pre-introduction phase and right through the product life
cycle. Various options are available: Transit advertising, Airports, 30 sheet posters,
Panels, 8 sheet posters, 1 sheet posters, Premier panels, Spectaculars, Aerial
advertising, Inner city or regional advertising, Mobile billboards, Painted walls and
murals, Sailing ads, Television billboards, Subways, Sports areas, Sports cars,
Sponsorships, Bus shelters, Bathrooms.
We have decided on using the following media advertising:
Magazines
Posters
Billboards
- 21 -
News papers
The following promotional strategy focuses on Philadelphia, but we have only

focused on one city in our report to show how we intend to apply this strategy to
Pittsburgh, Harrisburg and the rest of the major cities within the state. We will start
our campaign in the other two cities on exactly the same date and also in the same
manner.
Magazines
We can list various reasons for choosing magazines as a form of advertising rather
than television. Magazines provide reach faster than TV. The top 25 magazines in the
US reach more adults than the top 25 prime time TV programs. Magazines engage:
90% of readers pay full and complete attention when reading magazines. Consumers
also refer to magazines multiple times -, even saving them, giving advertisers the
opportunity for added exposure.2
According to our research the top six magazines read by our target group in
Pennsylvania men are as follows3:
Men 25 – 45
Sports Illustrated
TV guide
Readers Digest
People Magazine
News Week
Playboy
As we have already mentioned, we would like to project an image of sophistication,

yet humorous, to be taken seriously, but with a tongue in the check wittiness.
Therefore we have decided to target Sports Illustrated and News Week, which would
be aimed at men. For added exposure we aim at the Readers Digest and TV guide.
In the future, we will also target Airport magazines, which would be an ideal form of
introducing our product to travellers departing or coming into Pennsylvania.
Consumers can also buy our product on the plane or in duty free shops.
Poster Advertising
There are different forms of poster advertising, consisting of street posters of different
sizes, posters on the sides of buses (transit cars), smaller posters inside bars or inside
airport transit halls etc.
Posters – 30 sheets
High Impact
30-sheets are effective landmarks on the road that people notice and remember. Using
eye catching colors will make our posters stand out, thereby, bringing our company
name and image into the minds of our audience.
2
www.Bigresearch.com
3
Source: MRI Spring 1997; Nielsen, Sept. 1996 - May 1997
- 22 -
T a r g e t a b i l i t y
One of the main advantages 30-sheets provide is geographic targeting, thereby honing
into a specific demographic audience. 30-sheets often penetrate densely urban areas
and secondary streets where you will not find larger traditional billboards. This
medium also works extremely well in residential and commuter traffic locations.
R e a c h
30-sheets will reach an incredible number of people. Because they are relatively
inexpensive, we can afford to buy many boards, reaching hundreds of thousands of
people every day. That is a lot of different people gaining exposure to our ad. A
portion of cars driving by our 30-sheet will be new and different people from
yesterday, consequently, increasing the total number of people who see our ad
everyday!
A Reminder
With more of our competitors around, it is vital to stay at the top of our audience’s
mind.
We need to remind them who we are continuously.
Seasonal Usage
Because 30 sheets are typically bought in one-month showings, they are an effective
medium to use for short-term messages such as seasonal ads and product promotions.
Since the paper must be changed about every 30 days anyway, it is also easy to
change our message every 30 days. 4
Posters that light up during evenings and are at consumers’ eye levels will also be
used. These can be placed strategically near high-class bars and Irish pubs.
Another form of poster advertising will be created at the Philadelphia International
Airport (from which high-income business professionals depart and arrive) in the
form of wall advertising inside various terminals and first class lounges. Airport
advertising offers an innovative and flexible range of media opportunities, ranging
from long-term to short-term, indoor to outdoor advertising panels. Advertising
4
http://www.billboards.com/30_sheets.html
- 23 -
availabilities include dramatic backlit signage along each of the airport’s concourses.
We will also have introductory promotions at Duty Free shops. In May 2003,
(Philadelphia International Airport) PHL celebrated the opening of its expansive new
$550 million international terminal, A-West.
Combined with existing Terminal A, the new International Terminal complex
accommodates PHL’s growing number of international passengers and flights.
PHL accommodated 24.7 million passengers in 2003 and is the country’s second
largest Caribbean hub with 19 destinations.66% of PHL’s passengers are from the
local market (67% PA, 21% NJ, 12% DE). Finally, there are seven terminals offering
120 boarding gates.5Therefore we believe that if we put posters in Terminals A and A-
west and the busy Terminal T we will reach a considerable high percentage of our
target group. Posters are placed horizontally and measure 10 meters to 20 meters.
Another form of poster advertising that will be used will also be within the city’s bus
system, displaying posters at bus shelters. Advertising within the city centre’s bus
shelters will create strong awareness amongst the upper classes as well as business
professionals who catch the bus into the Philadelphia Central Business District.
Posters on buses
People notice moving objects when they are driving. Bus ads are eye-catching, unique
and therefore memorable. There is no clutter or other advertising distractions,
especially at traffic lights where cars get stuck right behind or beside ads for several
minutes. Full wrap and tail wrap buses. Buses have the incredible capability of
reaching a wide variety of people. The broad reach comes from the mobility of the ad.
Buses, unlike traditional billboards, are able to reach. The mobility of transit
advertising allows the message to cover many different angles.
When the advertisement is a full wrap, it can be viewed from ongoing and oncoming
traffic, as well as, panoramically from all directions. All types of people and vehicles
can also view it. Most major cities divide their markets geographically, allowing
advertisers to buy buses that travel in targeted demographic areas. This cuts down the
number of buses needed to ensure a high showing. Bus advertising also avoids zoning
restrictions, which prohibit advertising from appearing in selected areas; this enables
us to penetrate areas that are otherwise impossible to reach!
Therefore the third form of poster advertising that can be used will be within the
city’s bus system, displaying posters on the back of buses that run to and from
Philadelphia city centre. These buses will display advertisements for Green Heritage,
and the bus route through Philadelphia city will see this form of advertising. The
population of Philadelphia county is roughly around 1.5 million people. Of these
people 71.2% are high school graduates aged 25 and over. About 62% of people are
still living in the same area. We can conclude from these statistics that there are still a
large percentage of people who commute to and from the city of Philadelphia.
Billboard advertising
Normal Billboards
5
http://www.phl.org/fast_facts.html
- 24 -
High Impact
Billboards are huge landmarks on the road that people notice, remember, and talk
about. Using eye-catching colors and copy can make our Billboards memorable,
burning our company name and image into the minds of our audience.
Frequency
Many people drive to and from work or other places by the same route everyday. That
means, conservatively, they will drive by our billboard ad every workday 20 to 25
times per month! That is a lot of frequency and is why billboards are the very best
medium for generating exposure.
Implementation
We will position these posters on certain roads and areas where traffic is usually very
high, such as Belnmount avenue exit 31 and exit 38 going to the city center and
Manayunk train station in Philadelphia. Also roads going to and from the waterfront.
Manayunk is just minutes from Center City and is easily accessible by car, taxi, bike
or public transportation.
Therefore we will advertise on normal as well as electronic billboards.
Implementation
We aim to advertise on billboards on the way to and from the Philadelphia Central
Business District, waterfront, and railway station and on billboards at Philadelphia’s
downtown restaurant and pub district. By putting up these billboards alongside these
highways and roads, it will be clearly visible by motorists, pedestrians and public
transport passengers. The billboards are ten meters by twenty-five meters and usually
sit at the side of highways and at busy intersections.
Newspaper advertising
Newspapers represent a form of media that covers a very wide scope both
geographically and demographically. According to a survey of the Top 100 Daily
Newspapers in the United States, Philadelphia Inquirer is ranked 17 th, Post Gazette
39th with a circulation of 400 000 and 250 000 respectively. 6 In order to advertise
effectively within Philadelphia, newspapers such as the Philadelphia Inquirer will be
used as another advertisement medium. Advertisements for GH must be strategically
placed such as within the business section, which focuses on personal finance for
middle to upper-income individuals.
Advertising within newspapers however, can be quite limited in terms of size and
colours, but do offer daily advertising and by strategically placing adds, we will be
able to reach our target market.
Internet advertising
We will also advertise on the internet, because we will have a website
www.GreenHeritage.com, where customers can find out more about our company,
exciting promotions, competitions and news of sponsorship etc. Customers will also
be able to take part in polls and surveys and leave suggestions. There will be recipes
for cocktails, which include our whiskey. We will also have other interesting stories
about Ireland and the history of our company.
6
Source: Audit Bureau of Circulations, tabulated by Magazine Publishers of America.
- 25 -
6.1.3.2 Message
Green Valley’s target market as we have already stated, are of middle to upper class
25 to 45 year olds.
We therefore try to portray GH (Green Heritage) as an exclusive yet young vibrant

whiskey. Although not too exclusive, GH will be a new brand that states quality with
a witty classy image.
The advertising of the Pre-Introduction of GH will be different than the ongoing ad

campaign after the launch.
Pre-Introduction Message:
Because we want to make consumers aware of a new Irish whiskey on the market, we
will already start advertising three months ahead of the actual launch. Selected
magazines, billboards and posters in bars and on buses will grab the attention of the
upcoming launch. It will consist of a green background that is eye catching with big
black letters stating:” It’s coming…are you ready?” and through different medias we
will portray different messages in black still keeping to the bright green background
and theme. With other slogans as:” The green invasion countdown has begun!” or
“The time is near…get ready!” By using these messages we spur anticipation and
curiosity in consumers.
After launch Message:
Here we will build on the classy yet witty and humorous image of our whiskey in
order to reach our market. Because we have already spurred on a lot of anticipation in
our consumers, making them wonder what the new product can be, we want to be
creative.
Firstly, we will have a new advertisement with a picture of an alien ship, which
landed on earth, very classy butler type aliens carrying GH Irish whiskey. The slogan
stating: “The universe has made their choice, what will you choose?” and other adds
which will link the pre-introduction ad campaign such as “The Green invasion has
begun…”
Afterwards the whole theme of GH will be “Get your priorities right!” For example an
ad where the background will be the cliffs of Ireland and a man hanging from the
cliff, his girlfriend or wife standing nearby with a glass of GH, having to decide on
rescuing him or finishing her drink. Slogan at the bottom: ”Get your priorities right!”
or another alien butler advertisement where the aliens are sitting in their space ship
watching earth and the one says: ”Henry, shall we invade earth today?” other one
answering: “Yes, James, everything but Ireland!”…Get your priorities right!”
We will have different advertisements according to the public holidays or days such
as Valentine’s Day or Father’s day.
- 26 -
6.1.3.3 Promotional Calendar – table

As we have mentioned above, we will start our pre- introduction about 3 months
prior, Jan 2005, to launching Green Heritage in March 2005. There are, of course,
also special holidays, which we have listed underneath to indicate special promotions
and advertising campaigns aimed at those dates.
Super Bowl
Valentine’s Day
St. Patrick’s Day
Spring
Memorial Day
Father’s Day
Summer
July 4th
Labor Day
Fall
Thanksgiving
Christmas
Easter
Following is the Promotional Calendar for the first year:
Timeline Media Used Scope of Advertising

Jan – March 2005 Posters Posters displayed in 30% of targeted liquor
Pre-Introduction (3 stores and 60% of pubs.
months prior to Posters displayed in 4 different street
introduction) locations around Philadelphia Central
business district.
Posters on buses also taking major routes in
and around Philadelphia and in some bus
shelters.
One billboard next to busy highway coming
into Philadelphia.
March –May 2005 Billboards Two billboards and one electronic billboard
alternating in location for a period of 12
weeks each. Each occupying a different
location next to a busy highway.
March 2005 – Posters Poster displays continued in all targeted
March 2006 liquor stores and pubs.
May- Nov 2005 We will reduce the number of posters around
Philadelphia streets to 3, each staying on for 6
Dec-2005- months.
Feb 2006 The last 3 months will see 2 GH posters on
the back of buses.
We will also put 4 posters on bus shelters in
and around PA for 4 months.
We will place 3 posters within Philadelphia
- 27 -
March 2005 – News International Airport for 10 months each.

March 2006 paper We aim to advertise in the Business sections
Magazines of the Philadelphia Inquirer for editions
Monday-Friday for the first year.
One page advertisement for March 2005 issue
in Sports Illustrated and Glamour Magazine
for St Patrick’s Day.
One page advertisement for April 2005 issue
in News week and People magazine.
One page advertisement for 10 monthly
issues of Readers digest starting from April
2005 issue.
One page advertisement, skipping one month
in between of TV guide.
Of course, the above promotional calendar is only for the first year of introducing GH
to the US. The promotional ad campaign will change as the customer gets to know our
product better, we will change our strategy according to the response of our target
market. Our advertisements will also be aimed at the holiday dates mentioned above.
As we have mentioned before, these advertisement strategies also count for
Pittsburgh, Harrisburg and the other major cities.
6.1.3.4 Costs
The approximate total cost of the advertising decisions is shown below.

We have found that advertising costs are very difficult to obtain as
only advertising agencies are allowed to place advertisements in the
various media. They are thus the only people with access to our
required data. Therefore, for the purposes of our report we decided
to allocate about 15-20% of our projected revenues to the advertising
budget and then we split this budget between the various media that
we aim to use.
Year Bottles Retail Price Project Revenues

1 24,000 26.96 647,040
2 36,000 26.96 970,560
3 52,000 26.96 1,401,920
4 70,470 26.96 1,899,871
5 95,135 26.96 2,564,840
Year Projected % Allocated to Total

Revenue Promotions
1 647,040 0.2 129408
2 970,560 0.1 97056
3 1,401,920 0.07 98134.4
4 1,899,871 0.05 94993.55
5 2,564,840 0.05 128242
- 28 -
Media % of rev. 1 2 3 4 5 Total

Media 0.32 41410.56 21352.32 31403.008 30397.936 41037.44 165601.264
Magazine 0.22 28469.76 21352.32 21589.568 20898.581 28213.24 120523.469
Posters 0.2 25881.6 19411.2 19626.88 18998.71 25648.4 109566.79
Billboards 0.04 5176.32 3882.24 3925.376 3799.742 5129.68 21913.358
Newspaper 0.07 9058.56 6793.92 6869.408 9023774542 8976.94 9023806240
We have decided to allocate between 5 to 32 % of our projected

revenue to the advertising budget for every year, as indicated in the
above tables.
Sales Promotion
Objectives
The objectives of the sales promotions for Green Heritage will be achieved through
both the customer and the efficient use of advertising media. In order to gain sales of
GH, we will stimulate our target market by sales promotions to ensure higher demand
and consumption of GH. Furthermore, Green Valley would like to create a form of
competition amongst the liquor retailers and promote the sales of GH within these
stores.
Promotional Calendar – table
Timeline Promotion method Objective

Pre- introduction –Jan – In store promotions, Introducing GH to our
March 2005 demonstrations, samples- target market.
taste tests of GH and in
bars, pubs a girl walking
around selling small shots
of GH.
March 2005 Party packs will be sold in Further introduction of
liquor stores- consisting of GH, focusing on
classy whiskey glasses, a St.Patrick’s day.
small bottle of GH, t-shirts
etc. aiming at St.Patrick’s
day.
June 2005 Special gift packs for Aiming at special holidays
Father’s day and another we will reach a higher %
taste testing. of our target market.
- 29 -
July and August 2005 Promotions in bars, pubs By giving the customer a
clubs for the summer chance to win prizes we
season. If you buy a will further enhance our
certain amount of GH sales and penetrate the
whiskey in the summer market even more.
season you will get a
beach umbrella or frisbee,
t-shirts for free. A card
will be stamped every time
you buy a glass of GH.
We will also start with

competitions, where
customers can win a trip to
Ireland and stay in a castle.
Nov-Dec 2005 Special Christmas gift sets Around Christmas and
will be promoted in liquor Thanksgiving time a lot of
stores. people want to buy special
gifts that are exclusive.
Jan – Feb 2006 Special New years GH By introducing a limited
bottles with different edition bottle combined
shapes will be sold as a with other advertising
limited edition, smaller media it will spur on
bottles as well. curiosity within our target
market and increase our
We will sell special sales.
Valentine’s gift sets.
Costs
The costs for implementing our sales promotional strategy will not be high, as the in-
store promotions and taste testing will not be a huge cost for a company such as Green
Valley. Although the major competitions, sponsorship will cost more. We have
therefore also allocated a percentage of projected revenue to these activities, which is
15% and 7% respectively.
6.1.3.5 PR activities
St.Patrick’s day parade

Philadelphia's St. Patrick's Day Parade is a long-standing event of great civic pride in
Pennsylvania. The Annual Parade takes place, on or before March 17th. This
Delaware Valley event is the largest Philadelphia Parade by number of participants,
approximately 20,000. More than 150 groups are represented in the parade including:
Marching bands, dance groups, youth groups and Irish associations. Thousands of
spectators line the Parkway to enjoy the Parade each year. 7 Thus by participating in
7
www.stpatriksdayparadephila.com
- 30 -
this parade we will also receive recognition quickly.
Spirits competition in San Francisco

Every year a world spirits competition is held in San Francisco, and next year it is
expected to attract more than 1,000 spirit brands from around the world. The judges
are all well known spirit experts and in the judging there will be 30 distinguished
spirit mavens selected from sommeliers, restaurateurs, spirits retailers and journalists
who will be looking for the best in 11 white spirit categories, 10 brown spirits
categories, 13 for brandies, nine for cordials and liqueurs and one miscellaneous
division. Taking part in such an event will definitely increase awareness of GH and
may also take a few titles while it is there!!
Other competitions
As we have mentioned previously in the sales promotional calendar, we also aim to
have a competition of some sort every 1 to 2 years. Small competitions will be more
frequent of course. A great prize would be to win a trip to Ireland and stay in one of
the magnificent castles for a week. This will definitely boost sales and encourage
consumers to try our whiskey.
6.1.4 Conclusion
To conclude we would like to state that we believe that by using our promotional
strategy in the most efficient way possible, we will achieve our entire objective and
exceed our expectations.
We have used Magazines, Posters, Billboards, Newspapers, and competitions as our

adverting media to reach our target market. We will also take part in the hugely
popular annual Spirit competition in San Francisco. By having a diverse selection of
advertising media to our disposal we know that we will be able to reach our market in
a creative manner, while increasing our competitive advantage at the same time.
Our promotional and sales promotional calendar will give us clear time goals and our
advertising budget meets the requirements to these goals well ahead of time.
Not only will the other whiskey and spirits in the US have to watch out for our
innovative ideas and imagination, but other leading Irish whiskey brands will also
have to compete with the very best
- 31 -
7 Distribution from Ireland to the

USA
7.1 Mode selection
Before we can sell our product in the USA, we first have to find a cost effective and
relatively fast way to transport our product from our distillery in Balbriggan to our
distribution points in the USA. We have to think of transportation from Balbriggan to
a port, the shipment over the ocean to the USA and finally from the port in the USA
to our distribution points. After conducting some research we have chosen to use
different companies to organize the transport from Balbriggan to our selling points.
Below we have described the three transportation routes that our product has to
undertake before it has reached our distribution points.
7.1.1 Transportation within Ireland

For the transport from our distillery to the Dublin Port, we have chosen a well-
recognized transportation company called Campbell Freight. Campbell Freight
provides worldwide transport solutions in partnership with world leaders in the
various fields of International Transportation.
We will distill our whisky in our distillery in Balbriggan, a little village near Dublin.
From there we need to transport it to the Dublin Port, from where we will ship it to
the USA. Balbriggan is located near the N1, a highway that goes straight to the center,
where the Dublin Port is located. This transport will be carried out by a truck of
Campbell Freight, which has an office in Dublin. The distance between our distillery
in Balbriggan and the Dublin Port is 19.4 miles and it will take 34 minutes to get there
by truck.
7.1.2 Transportation to the USA
Our aim is to find the easiest and cheapest way of transportation for us. We have two
possible ways of transporting our product overseas: by airplane or by boat. Both of
them have advantages and disadvantages. Transportation by airplane, for example, is
a lot faster and more reliable than transportation by boat, but it is also very expensive.
Transportation by boat is a lot slower than by airplane but it is reliable enough and
relatively cheap. In the stage of introducing our new product into the USA market, we
have chosen to transport our product by boat. We will do this because of the fact that
our distillery is located nearby Dublin, which has a large international port that we
can use. Also the big city Philadelphia in the State Pennsylvania has a large port, by
using the Delaware River, with good distribution opportunities to the cities in which
we want to initially launch our product. This over-seas transportation will be carried
out by ‘American Baggage Inc.’, which is a big international and domestic shipping
service.
- 32 -
7.1.3 Transportation within the USA
Once our product has arrived in Philadelphia, we will first have to bottle our blended
whisky. We will do this in a bottling company that is strategically located at the port.
From there, again our retailers are responsible for the transporting of our product to its
selling points. This will be done by the use of trucks.
7.2 Selection of ports
7.2.1 Port in Ireland
As we have decided to use transport by boat, we need to find a big international port.
From the Dublin Port a boat will bring our product to the Port of Philadelphia. Dublin
Port is the principal port in the Republic of Ireland. It is a self-financing, semi-state
organisation whose business is to facilitate the flow of goods, passengers and
attendant tracking information through the Port.
7.2.2 Port in the USA
For our transportation to the main cities of Pennsylvania, we feel that is important to
transport our product from Dublin to an international port that is first of all connected
in some way to the Atlantic Ocean. Secondly, we have to have good transportation
channels to our distribution center.
The Port of Philadelphia is strategically located at the centre of the Northeast corridor,
the country's largest and richest marketplace. The Port is directly accessible to more
major cities by rail and truck than any other port in the country, ensuring that our
deliveries are timely and cost effective.
The port of Philadelphia also has the opportunity to handle liquid bulk, an advantage
for us because we want to bottle our whisky in the USA. We will do this in the Port of
Philadelphia, also the location of a bottling company.
7.3 Packing
The real packaging of our whisky product will be done in the US. Before we can sell
our product on the US market we have to deal with many rules and regulations,
regarding the packaging and labeling. Below we expand in dept on all these
regulations and show what we need to do before we can legally transport and sell our
product on the US market. We will also explain how we will package our product.
7.3.1 Coding and labeling regulations
- 33 -
Normally labels affixed to bottles of imported distilled spirits and wine must be
covered by certificates of label approval, issued to the importer by the Bureau of
Alcohol, Tobacco and Firearms. Certificates of label approval or photo-static copies
must be filed with Customs before the goods may be released for sale in the United
States.
An importer must obtain a Certificate of Label Approval prior to importation. For

some specific alcohol beverages, a sample must be submitted to ATF for laboratory
analysis prior to importation. Certificate of Age and/or Origin are required in the U.S.
only if the country of origin for the specific product requires them.
Since we bottle our product in the Port of Philadelphia, we do not have to deal with
the Certificate of Label Approval prior to importation.
7.3.2 Packaging of our product
Our transportation company Campbell Freight has special trucks, which are able to
transport our whisky in unbottled form. On arrival at the port our whisky will be
transported onto a ship of American Baggage Inc.
Our target is to sell 65 bottles per day in the first year and expand this every year.
This means that we want to sell 65 * 365 = 23,725 bottles in the first year, which
means 23,725 * 0.75 = 17,793.75 liter in the first year. We want to ship once a year,
because it saves us transportation cost. Off course we will not distribute everything all
at once, but will store it at the bottling plant. If during the year sales run so well that
we have to transport more whisky to Philadelphia that year, we can always do so.
Our first shipment will contain ± 17,800 liters, which will be transported in bulk. A
ship from Dublin Port will have to travel around two weeks before arriving at the Port
of Philadelphia.
After arriving at the bottling company in the Port of Philadelphia we will bottle our
bottle-blended whisky in the following way before distributing it to our selling points.
 First we will have to put our bottles in carton boxes. The size of one bottle is
300x85x85 mm. We will use ordinary 9-liter crates, which can fit 12 bottles.
We have chosen to use a carton box with the size 400x350x300 mm. The
bottles will be placed in the box per four, so it will contain three floors of four
bottles. There will still be some space in de box, and we want to use this space
to fill the box with wood-wool. This way the bottles will be well protected and
is there almost no chance of damage.
 Before we will put the boxes in the container on the truck, we will first place
the boxes on pallets, which makes it easy to move them. The pallets have the
following size: 1200x1000x125 mm. On one pallet we will place 18 wooden
boxes, nine on the floor and nine on top. One pallet will now consist of 216
- 34 -
bottles of Green Heritage. We will bottle everything at once, but we will not
have to distribute everything. In the first 2 months we need 3,640 bottles, the
rest will be stored. We will change this figure in 3,648, because then we do not
have to deal with half-full boxes. If we look at the amount of 3,648 bottles we
have to transport 304 boxes, which means ± 17 pallets. The last pallet will not
be completely full.
 To put all these 17 pallets in one container, we have chosen for a standard 40
foot container. This container can be carried by a truck. The container has a
size of 11330x2280x2190 mm. The entrance is located on the side that is
2280mm long. All the pallets fit in this container easily and from there the
truck, which will be taken care of by our retailer Diageo, will distribute our
product to the selling points. They are responsible for the distribution in the
USA on behalf of us and we are confident that they will deliver a good job.
7.4 Documentation required
At the present time there is a great amount of paperwork needed to complete an

export transaction. Below the most important documents can be found, that we need
to transport our product from Balbriggan overseas to Philadelphia. The documents are
subdivided into groups. All these documents are mandatory before we can import our
whisky product into the US market.
7.4.1 Transportation documents:
 Bill of Lading
A bill of lading is a document which is issued by the transportation carrier to the

shipper, acknowledging that they have received the shipment of goods and that they
have been placed on board a particular vessel, which is bound for a particular
destination and states the terms in which these goods received are to be carried.
Separate bills of lading are issued for the inland or domestic portion of the
transportation and the ocean or air transportation, or a through bill of lading can be
obtained covering all modes of transporting goods to their destination.
Bills of lading, whether inland or ocean, can be issued in either non-negotiable

(straight) form or in a negotiable form. If the bill of lading is specified as being non-
negotiable, the transportation carrier must deliver it only to the consignee named in
the bill of lading, thus the bill of lading acts both as a receipt of goods and as an
agreement to transport these goods to a specific destination and consignee in return
for payment of the transportation charges. If the bill of lading is specifically labelled
as being negotiable, ownership to the goods and the right to re-route the shipment are
with the person who has ownership of the bill of lading properly issued or negotiated
to it. Such bills of lading are issued to shipper's order, rather than to a specific, named
consignee. Where collection and payment is through banking channels, such as under
a letter of credit or documentary collection, negotiable bills of lading are required
- 35 -
(except for air shipments). The exporter must endorse the bill of lading and deliver it
to the bank in order to receive payment.
There are four types of bills of lading: inland, ocean, through, and airway bill.
Because we want to use an ocean shipment for our transport, we require both an
inland bill of lading, for domestic transport, and an ocean bill of lading, for
international transport. We do not need the others. Below are the ones we do need
with a short description.
Inland Bill of Lading - this is a contract between a shipper and transportation

company used when transporting goods overland to an exporter's international carrier.
Ocean Bill of Lading - this is a contract between an exporter and an international

carrier for transport of merchandise to a specified foreign market overseas.
 Insurance certificate
This certificate is evidence that our cargo is insured against losses or damage, while it
is being transported. This is, of course, is a very important document because our
product needs to be well insured in case something happens on the way.
7.4.2 Commercial documents:
 Commercial invoice
In exporting, the bill that the exporter or consignor sends to the importer or consignee
is called a commercial invoice. This invoice lists full particulars of the shipment. The
marks, the number of packages, an accurate packing list and a full description of the
merchandise, in our case whisky, should appear on the commercial invoice. It should
state the name of the ship, the name and address of the consignee, the contract
number, the code word for the contract if one is used, the price per unit of the
merchandise and the total price of the shipment.
Various countries differ widely in the number of copies of the commercial invoice
required with each shipment. The general practice is to send at least two copies to the
bank with the other shipping documents and with the draft drawn either against letters
of credit or filed with the bank for collection.
The commercial invoice is also important in connection with insurance claims and is
frequently filed with underwriters and surveyors when claims for damages are made.
 Packing list
The packing list is an extension of the commercial invoice; as such it looks like a
commercial invoice. We, as the exporter of whisky, have to reserve a shipping space
based on the gross weight or the measurement of the amount that we want to
export/import shown in the packing list.
Customs uses the packing list as a checklist to verify the outgoing cargo (in exporting)
and the incoming cargo (in importing). The importer uses the packing list to inventory
the incoming consignment.
- 36 -
The packing list has to contain a few subjects. Below are shown what the most
important ones are that can be on the packing list. An example can be found in the
appendices.
Package No.
The entries preferably arranged in sequence from the lowest number to the highest,
that is, from package No. 1 and up.
Item No.
Description of Goods
The description of the goods in the packing list can be in general terms, provided it is
not inconsistent with the description in the Letter of credit (L/C).
Quantity
This shows the total quantity within a stated range of the package number and the
breakdown in each package.
Weight
This shows the total weight within a stated range of the package number and the
weight of each package. As far as the carrier is concerned, the gross weight or
measurement of a consignment is needed to calculate the freight. In case the goods are
assessed in the importing country or exported on the net weight basis, it is necessary
to show the net weight and gross weight in the packing list.
Measurement
Ocean shipments are most often charged by the cubic meter (CBM or cbm).
Sometimes, it is necessary to include the size or dimensions (length-width-height) of
the master package.
Some carriers may calculate the freight on a cubic feet (cft. or cu. ft.) basis. In case of
an irregular shaped cargo, the three widest dimensions that describe the smallest cubic
space enclosing the cargo are taken to determine the measurement.
Signature and/or stamp
The packing list and commercial invoice need not be signed, unless otherwise
stipulated in the letter of credit (L/C). In practice, the original and the copy of the
packing list and commercial invoice are often signed.
Any visible corrections or changes made in the packing list must be initialled, as in
the commercial invoice and all other export documents, by their respective issuers. In
practice, the initial is usually made by using a rubber stamp saying "CORRECTION".
7.4.3 Government documents:
 Export Declaration
On exportation of goods from Ireland to countries outside the European Union,

customs entry formalities must be completed by our company. The appropriate
customs entry form is the Single Administrative Document (S.A.D.). The completed
- 37 -
S.A.D. must be presented to Customs and export duty (if any) paid to effect release of
the goods by Customs. All necessary documents required to clear the goods through
Customs must accompany the S.A.D. declaration form (i.e. invoices).
Export declarations may also be made electronically by approved traders under the
Paperless Declaration system.
 Certificate of Origin
The Certificate of Origin is a document certifying the place of origin of the

merchandise. The format of this form can change from country to country, but all ask
for essentially the same types of information. The certificate of origin is not treated,
generally, like the formality of the consular invoice.
The form is generally filled out by the exporter and is then certified by officers of a
local commercial organisation, not consular officials. In some cases a consular has to
authorize the signature of the local commercial organization person.
We need to fill out an original certificate of origin as a condition of entry to the US
market. An example can be found in the appendices.
7.4.4 Other important documents:
 Packing Declaration
Packing declarations are an essential tool for sourcing barrier information in relation
to imported containerized cargo consignments. Packing declarations have replaced the
requirements for shipping companies to provide quarantine codes on manifests and/or
bills of lading. We must ensure that correct and concise barrier information is
provided for all containerized cargo consignments. This barrier information is usually
presented in a packing declaration. An example can be found in the appendices.
To be valid, a packing declaration must meet the following requirements:
1. All critical fields must be complete

2. All critical fields must be readable
3. Critical fields (other than letterhead) must be in English, unless
otherwise stated
4. The document must be free from erasures and non-certified alterations
5. Letterhead/company stamp
6. Container number of direct numerical link to the
container/consignment
7. Straw packing statement
8. Timber/bark packing statement
9. Dated or vessel/voyage number
10. Signature
- 38 -
 Health Inspection Certificate
Certain plant materials, when used for bottle jackets for wine or other liquids, are
subject to special restrictions under plant quarantine regulations of the Animal and
Plant Health Inspection Service. All bottle jackets made of dried or unprocessed plant
materials are subject to inspection upon arrival and are referred to the Department of
Agriculture. We have to have a certificate of the Health Inspection, which states that
we have followed all the regulations, required by the Animal and plant Health
Inspection Service.
- 39 -
8 Channels of Distribution
8.1 Introduction
The process of distribution refers to the physical handling and distribution of goods,
the passage of ownership (title), and –most important from the standpoint of
marketing strategy- the buying and selling negotiations between producers and
middlemen and between middlemen and customers.8
The product, in our case Irish whiskey, has to pass from producer to end-user in the
most effective and efficient manner. This will make the product accessible to the
target market while also giving Green Valley a competitive advantage. To achieve
this, middlemen will be used in the form of an importer, wholesaler and retailers and
we will create a joint venture with the worlds largest drinks business – Diageo.
8.2 Foreign market entry

Since Green Heritage is currently sold on the European market and based in Ireland,
the company will be required to make a foreign market entry to sell the Irish whiskey
in the United States.
8.3 Foreign Manufacturing

8.3.1 Production and exporting
In order to produce original Irish whiskey, the whiskey has to be produced in Ireland.
Producing the whiskey in the States will not allow us to sell the resulting product as
an Irish whiskey. Therefore, truly Irish whiskey will be manufactured in Balbriggan
and will be sent in bulk to the United States. (See transportation section)
After production the first link in the distribution chain refers to transferring the
whiskey out of Ireland i.e. the exporting process. Green Valley could outsource the
exporting task. This means an agency will provide the company with expert assistance
on the exporting. We have chosen not to follow this procedure, but to hire
experienced staff for this purpose. This staff will be adequately skilled to guide the
whole process including relevant documents, licenses, quotas and other barriers.
In the long run this will be more cost effective, especially with increasing quantities,
since agencies work on commission basis and this will be more expensive with larger
amounts exported. Green Valley will also retain full control. Eliminating an official
exporter shortens the distribution chain and thus reduces costs.
8.3.2 Bottling in the US

To qualify for the foreign manufacture category, we have decided to bottle our
whiskey in the United States. This will enable cheaper bulk transportation of the
whiskey to the States (no fragile and difficult packaging yet and therefore reductions
in insurance and other costs). Since the value of the unbottled whiskey will be lower
than after it is bottled, taxes, shipment costs etc. (calculated as a percentage of total
value) will also be lower. An additional advantage is the utilization of a bottling plant
in the United States allowing us to purchase materials, packaging, labor and overhead
costs (electricity etc) on the local US market, thus at lower prices. These cost
8
International Marketing p. 402
- 40 -
advantages will imply higher profit margin for Green Valley and a resulting lower
retail price will give us a competitive advantage against the competitors as this will
mean increased value for our end-users.
When entering our foreign market, is it of vital importance to select an appropriate

and feasible market entry strategy. Our intention is to shorten the distribution chain as
much as possible in order to minimize costly mark-ups, which imply higher costs to
the end-user or lower profit margins for Green Valley. Therefore we aim for a chain
of distribution with merely two links or chain members.
8.4 Joint Venture

8.4.1 Explanation
Given the fact that the Irish whiskey market in the United States is competitive, we
have to adjust our market entry strategy accordingly. Large wholesalers and retailers
will be in strong negotiating positions as they are already selling competitive brands.
In addition there is the risk of competition pressuring their wholesalers and retailers to
refrain from selling Green Heritage if it is too similar or threatening to their products.
In accordance we have decided to apply the foreign manufacture approach and will
enter the market through a joint venture.
A joint venture is defined as a partnership of two or more participating companies that
have joined forces to create a separate legal entity9.
A joint venture thus implies a mutual agreement with two or more parties. The joining
parties have the same target group and can offer each other benefits which, when co-
operating/ working as one will induce further benefits. Control is shared by both
parties since the management of the joint venture is shared and equity positions are
held by each of the members.
8.4.2 Diageo
Diageo is ‘the world’s leading premium drinks business with an outstanding
collection of beverage alcohol brands across spirits, wine and beer categories’. 10
Diageo operates in 180 territories around the world with markets ranging from
Antigua, Asia, and Cameroon to New Zealand, South Africa, Vietnam and many
more. Included within the business are 150 brands of which eight are global priority
brands. (Smirnoff, Guinness, Baileys, Johnnie Walker, J&B, Jose Cuervo, Tangueray
and Captain Morgan.) Of all markets 14% are venture markets.
8.4.3 Implications & Benefits

As our partner, Diageo will guide the importing process appropriately with formal
documents and procedures (see distribution section). They will take care of the
distribution because they are a licensed by the government vendor in Pennsylvania.
Diageo, in the role of an importer and wholesaler, will guide the whiskey from
arriving at the port in Pennsylvania, to bottling, storing and distributing it to the
9
International Marketing p. 262
10
www.diageo.com
- 41 -
retailers. Diageo will receive a mark-up percentage of 30% and they will also have the
right to take title to the product.
The advantage for us is that Diageo can provide us with a well-established local
distribution network. In other words, Diageo can ensure that Green Heritage can be
bought by the end users at the most convenient and obvious locations.
This big chain of retailers, with their well-established relationships with Diageo, will
permit us to offer Green Heritage at all relevant establishments.
A joint venture will also seem less ‘threatening’ to the competition and the US
domestic market and implies less risk for us. Since Diageo is well established in the
States they will be more experienced locally and can also, for instance, guide us
through legal procedures more easily.
Diageo should be interested in such a joint venture because looking at their top selling
brands, Diageo’s brand collection does not include any Irish whiskey brands. Baileys
is Irish whiskey but in combination with cream and thus very different from Green
Heritage. Scotch whiskey and Canadian whiskey are included, and it would broaden
their range of products (brands) to also include an Irish whiskey.
With Green Heritage Diageo would gain an Irish whiskey brand that is top-selling in
Europe, contributing to its global image.
In order to make this agreement a proper joint venture, we have the future intention of
purchasing the bottling plant in Philadelphia harbor. Both parties, Diageo and Green
Valley will invest in this property and this will occur after our initial establishment in
the Pennsylvanian market. This future plan will include various expansion
possibilities for this bottling plant.
As mentioned above, Diageo is already involved in venture markets (14%) and is thus
aware of the advantages and is willing to engage in them.
Overall, considering the above-mentioned benefits and advantages for both parties,
we believe a joint venture would be feasible and will be the best option to enter the
American whiskey market.
8.5 Wholesalers
8.5.1 Functions
Green Valley does not yet have a distribution network in the United States. Through
the joint venture with Diageo, Green Heritage will be able to use their currently and
extensively established distribution network.
Diageo will take care of the whiskey from arrival at the port in Philadelphia onwards.
From this harbor the whiskey will go to the bottling plant, which is located directly at
the selected port, preventing the need for further transportation and adjoining
transportation costs. Green Valley will make a contract with this bottling company.
After it is bottled, the whiskey will be stored at the bottling plant, eliminating the need
for an additional warehouse. Green Heritage will be bottled, packaged and stored for
$2 per bottle.
Consequently Diageo will distribute the bottled whiskey to the different retailers. (See
distribution section for more detail)
- 42 -
8.5.2 Mark-up
Obviously each link in the distribution chain will imply a mark-up on the initial
production cost per bottle.
After conducting large amounts of research and comparing the distribution mark-ups
of other companies, we have discovered a mark-up percentage of 30% net to be a
conventional percentage to offer to Diageo as a wholesaler.
8.5.3 Methods of operation

With the wholesaler we will work on a credit basis. Hereby the invoice is required to
be paid within one month of receipt of the goods. In other words, within one month of
picking up the whiskey at the port in Philadelphia.
8.5.4 Scale of operation

We will work with Diageo as our wholesaler, operating from the port. This wholesaler
will be responsible for distributing the whiskey to the retailers in Pennsylvania. With
increasing sales and expansion within the state of Pennsylvania, Diageo is still
available to act as our wholesaler at different locations and we will not have to use
additional wholesalers with future expansion.
8.6 Retailers
8.6.1 Type & number
Green Heritage will become available in a large number and different types of retail
outlets. Amongst others, these include liquor stores, bars, pubs and clubs, with the
emphasis on Irish pubs, but also restaurants. In addition we will sell our Irish whiskey
at several large hotels. This means the whiskey can be sold at the hotels restaurant(s)
and bar(s). In the future we will consider the option of selling Green Heritage in the
mini-bars of hotel rooms.
Although we will target the whole state of Pennsylvania, we initially focus our efforts
on the three major cities – Pennsylvania, Pittsburgh and Harrisburg.
Specifically related to the three targeted cities we have collected the following facts in
our research:
Philadelphia Pittsburgh Harrisburg

Population 1 517 550 334 563 48 950
Median age 34 36 33
Irish pubs & 17 6 4
restaurants
Bars, pubs & 163 178 38
clubs
Hotels 248 209 88
Liquor stores 38 9 3
Restaurants 3000 1696 323
We have decided, however, to make a selection within these available establishments.

The hotel and restaurant categories also include establishments that are not suitable
- 43 -
for selling Green Heritage. This includes for instance; (youth) hostels, in the hotel
category and fast food restaurants, pizzerias and sandwich bars in the restaurant
category. Also the large number of establishments will require us to make a smaller
selection. As a result we will aim to use the following number (%) of retailers in each
category:
Philadelphia Pittsburgh Harrisburg

Irish pubs & 17 (all) 6 (all) 4(all)
restaurants
Bars, pubs & clubs 163(all) 178(all) 38(all)
Hotels 62 (25%) 52 (25%) 22 (25%)
Liquor stores 38 (all) 9 (all) 3 (all)
Restaurants 300 (10%) 170 (10%) 32 (10%)
In addition, we consider direct selling through the Internet. This immensely popular
media is currently also used by our competitors to sell their products and we would
not want to withhold such convenience from our customers. Since these customers
will receive their orders directly from the wholesaler we cut out the retailer and thus
our product will be offered at a lower price on the Internet.
8.6.2 Retail mark-up

Again, our retailers will require us to mark up the price per bottle, in order to reach
the final retail price. As previously mentioned we have performed various research
and comparisons prior to selecting our mark-up figures. Ultimately we have decided
on a retail mark-up of 40%
net. Due to the well-established relationships created by Diageo with the various
retailers, we believe this figure is appropriate considering the conventional mark-up of
50% or higher. The selected mark-up percentage is applicable for each type of
retailer.
8.6.3 Methods of operation

With all the retailers we will work on a credit basis. Hereby they are required to pay
the invoice within one month of delivery by the wholesalers.
8.6.4 Scale of operation

As can be seen from the number and types of retailers we have chosen to include in
our network, our scale of operation will be large. Obviously the size of each (different
type of) retailer varies greatly, from large clubs to small restaurants. Overall, we want
our product to reach the consumer from many different angles and want to allow our
customers to have access to Green Heritage whenever they desire.
After our initial introduction into the three largest cities in Pennsylvania, we will
expand further within the state, targeting, among other establishments, all 290 liquor
stores within the state. Also the possibility for expansion into other states remains
open.
8.7 Conclusion
- 44 -
Overall we aim to introduce our Irish whiskey to the United States market using the
shortest possible distribution structure. Especially with our initial introduction into the
three cities in Pennsylvania this should be attainable. Perhaps with the expansion to
other states and cities in the United States the channels of distribution will increase in
length and complexity. At this stage however, we wish to use only a wholesaler and
retailers. The selected channels will provide us with the aspired coverage, reaching
exactly the retailers where we aim to be selling our product to the end user. The joint
venture will imply a large amount of control remains with our company and
continuity is more secure. Lastly, this method of foreign market entry will limit costs
and capital requirements. With the co-operation of Diageo we will be able to
successfully present Green Heritage to our target market.
- 45 -
9 PRICING
9.1 Cost Determinants
Positioning our product on the market was determined by a couple of factors. First of
all, these are production costs and costs for registration and licensing. Secondly, by
the transportation costs and different foreign duties and taxes. Calculating all these
costs and adding them together will help to determine eventually the end-user price.
Production costs
Determining our final price starts from the production costs. We produce our whiskey
at a cost of $ 4 per bottle. This includes wages/salaries, registrations, licensing and
other costs.
Transportation Costs (include land and sea transportation price per

container, handling - loading, unloading, harbor fees, etc)
As was mentioned above, the whiskey will be produced in the county of Dublin, in
Ireland. Afterwards it will be loaded into containers in order to be shipped to
Philadelphia – one of the biggest cities in the state Pennsylvania. Transportation in
containers would be the safest. If we decided to bottle Green Heritage in Ireland and
transport it in bottles, it would bring more risk that bottles might be broken and
whiskey spilled.
For the transportation we will use a company called American Baggage & Box
Transport, Inc11 . They will provide the container, of a size to which we will agree
earlier. After loading we will be provided with the costs of container rental. As stated
in the contract, we will be offered three free hours of loading (in Ireland) and two free
hours of unloading (in the USA). Each extra hour will be charged by $55 more.
Before loading the goods on the ship, a deposit of $1000 must be paid. However, in
case of canceling the loading later than four days before shipment date, deposit is not
refundable.
Costs of the transportation itself will depend on the size of the freight. For using a 20
Foot container, we will be charged a $ 3150 bill. Transportation in a 40 Foot container
will cost $ 3900. The company also will make a discount of 25% if we make a
contract for 5 years. As we are planning slowly penetrating of the Philadelphia as a
start for 5 years, it will be very convenient for us to make a contract.
Insurance and other costs
Another important aspect, which should be covered, is insurance. Insurance will

protect the inventory from loss, damage or pilferage. The cost of the insurance will be
2% of the value of exported whiskey.
11
http://www.discount-shipping.net/
- 46 -
Besides all the above-mentioned costs, there will be some other costs involved. They
are terminal fees and export document fees. Terminal fees may vary from $300 until
$450, which depends on the container size. They should be paid at the port of
destination( Philadelphia). Export document fees will cost approximately $100.
Harmonized Tariff schedule
Harmonized Tariff Schedule (HTSA) is based on the global Harmonized System; it

provides all applicable tariffs on merchandise imported into the States. Before
importing any goods into the USA, an importer should find out a Harmonized System
(HS) or Schedule B number, which is unique for every product. Afterwards, with the
help of this number it is very easy to search for duties, which should be paid while
entering the country.
For the whiskey, such a number is 220830. Irish whiskey is generally subjected to the
duty of $ 1.99 proof litre12. Proof litre means a litre of liquid at 15.56 ºC, which
contains 50% (100 proof) of ethyl alcohol.
Value Added Tax
After delivering whiskey to the United States, it will be subjected to the VAT (value
added tax). Value added tax is generally applied on duty-paid value.13 In the United
States value added tax is 17.5% of the product value.
Whiskey excise tax
Philadelphia is a state where all the sales are controlled by the government. This
implies that the government creates a monopoly and acts as the only distributor. In
licensed states the government simply issues a license to private citizens and
companies, which act as manufactures, importers, wholesalers or retailers. The
network-distribution company - Diageo, which we are planning to use for making
connections with middlemen and customers, has all the required licences, so we need
to think only about taxes.
In the current situation, alcohol is one of the most taxable products in the United
States14. Approximately 51% of the final price is accountable for taxes. However,
whiskey excise tax is 34% of the above-mentioned 51%.
In comparison to other beverages such as beer or wine, distilled spirits are charged
two times more than beer and three times more than wine. Importers are obligated to
pay tax price per gallon of whiskey $13.50 and per bottle of 750 ml - $2.1415.
Calculation of Retail price

Our price depends on production, transportation and other costs. After adding them
together we will know the price of one bottle.
12
http://hotdocs.usitc.gov/tariff_chapters_current/0400C22.pdf
13
http://www.trade.gov/td/tic/tariff/trade_terms.htm
14
http://www.discus.org/taxes/
15
http://www.atf.gov/alcohol/info/faq/subpages/atftaxes.htm#Distilled
- 47 -
Production costs – $4 per bottle

Transportation – $11.700( for 5 years)* 25% discount =$ 8.775
Insurance – 2% of the value of the product
Export fees – $500
Harmonized Tariff – $1.99 per litre
Distribution - approximately 70%
Excise Tax - $ 2.14 per bottle
VAT - 17.5% per bottle sold
Promotion - 1$ per bottle
Labeling, packaging - $1 per bottle
Bottling, storing - $1per bottle
Additional cost - $1per bottle
Profit - $3per bottle
Adding up all these costs and dividing them by the amount of bottles, we have receive
an approximate figure of $ 26.96 per bottle. After adding VAT tax in the end we will
get to the price of $ 31 per bottle.
Terms of Sale
Terms of sales were designed to create a guideline for buyers and sellers who will be
responsible for the fees associated with the foreign trade. There is no rule, which says
who should pay what in this or that situation. Mostly it depends on negotiation
between two parties. Sometimes seller and buyer divide those costs, sometimes buyer
or seller pays for everything. It is very important to make clear who is going to pay
what.
We assume that we will use CIF trade terms. CIF stands for cost, insurance, and
freight. On the whole, this means that exporter has to pay all the transportation cost,
insurance costs and all the costs of goods.
Methods of payment
As was already mentioned above, our company will be responsible for the
transportation costs. Therefore, Diageo (the company we are planning to have a joint
venture with- for details see channels of distribution section) will have to pay only the
cost of the product.
Cash in advance is the safest method of payment but it is mostly used when there are
doubts on the buyer’s credit. Therefore, the safest method of payment for us is the
letter of credit. The procedure starts after making a contract with our middlemen. The
middlemen go to their bank and are issued a letter of credit. Then his bank informs
our bank that the letter of a credit has been issued. After the middlemen have received
the goods, we will be able to go to our bank and receive the money.
9.2 Conclusion
With launching a new product on the USA market, we are planning to achieve a sales
volume of 270 bottles per day until the end of the fifth year. On average, we will sell
65 bottles per day in the first year of entering the market.
- 48 -
Our price will be $31 per bottle. This includes production and transportation costs,
insurance, import duties, distribution costs, bottling, promotion and VAT.
In order to keep a track of our product, we decided that it would be best if our terms
of sale will be CIF. It adds more costs to the product, but in the end we will have a
possibility to control the final price.
The most preferable method of payment for us is the letter of credit. However, this
question stays open because we have to negotiate about this with our buyer.
- 49 -
10 Budgets
Selling Expenses Budget
Green Valley Distillery
2005 2006 2007 2008
Budgeted sales (cases) 2000 3000 4350 5873
Sales - determining expenses:
A
dvertising 129412.8 97059.6 98138.04 94997.0835
Sales - determined expenses:
S
hipping (variable at case sold) 75609.60 113414.40 164450.88 222008.69
P
roduction cost per case 96000.00 144000.00 208800.00 281880.00
I
nsurance per case 480.00 720.00 1044.00 1409.40
E
xcise Tax per case 51360.00 77040.00 111708.00 150805.80
H
armonized Tariff 35820.00 53730.00 77908.50 105176.48
Total selling expenses 259269.60 388904.40 563911.38 761280.36

Cash payments for selling expenses 259269.6 388904.4 563911.38 761280.363

Sale's Budget
2005 2006 2007 2008
Budgeted sales (cases) 2000 3000 4350 5873
Budgeted selling price per case 323.532 323.532 323.532 323.532
Budgeted sales revenue 647064 970596 1407364.2 1899941.67
Cash Budget
2005 2006 2007 2008
Budgeted sales 647064 970596 1407364 1899942
Budgeted expenses 259269.60 388904.40 563911.38 761280.36
Budgeted NET income (incl. Tax, excl
VAT) 387794.4 581691.6 843452.8 1138661.3
- 50 -
11 Conclusion
Within this marketing plan we have covered various subjects to enable the entry of
Green Heritage Irish Whiskey onto the United States market.
In the main sections of our report we have aimed to cover our entry from all different
angles including promotion, distribution, pricing, product, positioning and budgeting
issues.
A foreign market entry is usually paired with different financial and legal aspects that
have to be taken into account.
Green Heritage will enter the market as a 12-18 year old, blended Irish whiskey,
targeted at Pennsylvanian, middle to upper income, male, population, aged between
25-45 and with a particular lifestyle. Our product will be positioned as a high-quality
whiskey at a reasonable price.
We will make use of the foreign manufacture approach, by creating a joint venture
with drinks business Diageo. Green heritage will be distributed from the distillery in
Balbriggan to the United States using different transportation media and using Diageo
as an importer. Consequently the whiskey will be bottled, packaged, stored and
distributed in Philadelphia by our wholesaler, also Diageo. Finally the product will
become available to our end-users through the use of various retailers.
Our promotional efforts will initially focus on Philadelphia, Harrisburg and Pittsburgh
but will be applicable to the entire state Pennsylvania. Carefully thought-out
advertising, sales promotion and public relations strategies will stimulate our target
group population to purchase our product.
The retail price of $26,96 is reached after detailed calculation of all associated costs.
Overall, we believe our marketing plan for entry into the United States whiskey
market will be a successful expansion of our company. Green Valley will increase
their global image and at the same time make a more than satisfactory profit.
- 51 -

Export Strategy

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Export Strategy

Hochgeladen von

Copyright:

Verfügbare Formate

International Marketing

8.2 Foreign market entry....................................................................................40

As we have representatives of four nationalities (Dutch, Ukraine, Bulgarian and South

3.1 Marketing plan

3.2 Market segmentation

3.4 Market mix

3.5 Product adaptation

3.6 Promotional mix

3.7 Distribution/distribution channels

3.9 Financial statements and budgets

5 The Marketing Plan

5.1.1 Target Market

5.1.1.1 Geographic segmentation

5.1.1.2 Demographic Segmentation

5.1.1.3 Age and Gender

5.1.1.5 Psychographic Segmentation

5.1.3 Market Penetration and Coverage

Pennsylvania of the whole whiskey category followed by segmentation of the

Chart 2 - Pennsylvania distilled spirits market shares per 2002

Tequilla Domestic Whiskey

Chart 3 - Pennsylvania Imported whiskey market

Chart 4 - Pennsylvania Irish Whiskey Category Market Shares per 2002

John Pow er Others

Tullamore Dew Jameson

Chart 4 - Pennsylvania Irish Whiskey Case sales

Year 1999 Year 2000 Year 2001 Year 2002

5.1.4 Expected Sales

Table 1 - Green Heritage Expected Sales and Market Share

5.1.5 Profit Expectations

5.2 Product Adaptation

Name: Green Heritage Irish whiskey

Age: GH is a blend of malt and grain whiskeys, triple

Alcohol Strength The alcohol strength of Green Heritage is 40%

Nose: Deep aroma of refined honey scented maltiness

Taste: Light and smooth at first. Possessing a full malty and

Finish: The powerful blended maltiness leaves a lingering

5.2.2.2.1 Front Label

5.2.2.2.2 Back Label

We will have an office situated in Philadelphia- Pennsylvania.

This office will provide the following services:

 A team of people will be responsible for tracking the progress and

Therefore, Green Valley plans to use several promotional strategies to efficiently

Pre-introduction: In January of 2005, we will implement light advertising to bring

Goals for Bottles Pre- Year 1 Year 2 Year 3 Year 4

6.1.2 Promotional Goal

6.1.3 Detailed promotional strategy for our

6.1.3.1 Media Mix

The following promotional strategy is focusing on Philadelphia, because that will be

We have decided on using the following media advertising:

The following promotional strategy focuses on Philadelphia, but we have only

As we have already mentioned, we would like to project an image of sophistication,

We therefore try to portray GH (Green Heritage) as an exclusive yet young vibrant

The advertising of the Pre-Introduction of GH will be different than the ongoing ad

After launch Message:

6.1.3.3 Promotional Calendar – table

Following is the Promotional Calendar for the first year:

Timeline Media Used Scope of Advertising

March 2005 – News International Airport for 10 months each.

The approximate total cost of the advertising decisions is shown below.

Year Bottles Retail Price Project Revenues

Year Projected % Allocated to Total

Media % of rev. 1 2 3 4 5 Total

We have decided to allocate between 5 to 32 % of our projected

Promotional Calendar – table