STRONGBOW

CIDER
-

Group 9
Ofonime Eshiet 6104719
Jia Qian 5871748
Manjunath Habib 6003238
Zhenguo Zhang 5916382

- Table of Contents
SECTION 1 - Company Situation Analysis
SECTION 2 - Global Market Screening
SECTION 3 - In Depth Market Analysis
SECTION 4 - Entry Strategy and Market Plan
SECTION 5 Rationale for the specific
internationalization modality selected for
company

- Strongbow Company
Background
Strongbow cider was launched by HP Bulmers in England since 1962.
Strongbow manufactures cider that are made from a blend of bitter sweet cider &
culinary apples. It is available at 5% ABV as a draught product and at 4.8% ABV
as a packaged product. There are variety of flavors in Strongbow.
Strongbow is manufactured by HP Bulmers located in Herefordshire in England.
HP Bulmer is a subsidiary of Heineken international .
Strongbow is Largest selling cider in Australia and second largest selling cider in
US.

Financial statement for Heineken

Year

Sales
(millions)

Profit
(millions)

Heineken does not disclose the financial statements for each

2014

19,257

1,758

company, we have analyzed the Financial Statement for the Heineken

2013

19,203

1,585

group.

2012

18,383

1,661

Strongbow belongs to the division of Heineken International. Because

Products Offerings

Target market profile

Income

Middle Class $2000 annually

Age

18 65 years olds

Consumer Buying criteria

Education
Work

(Tertiary) education,
professionals

Lifestyle

Excessive

Taste
Country of origin
Service
High quality
Recommendations

Countries selection
China
Indonesia
South Korea
Thailand
India

Main reasons:
Emerging economies
Totally untapped market
High level of alcohol consumption
Existing operations

The Best Target Market Country

25
20
15
10
5
0

India

South Korea

- The target market - INDIA

Demography
Population

Age
(0-18)

Age
(18-65)

Age
(over 65)

Target Age
(18-65 )

1,210,193,422

39.7%

55%

5.3%

55%

High market potential

a = Number of potential (eligible/qualified) consumers: 360,000,000
b = Frequency of purchase on an annual basis:

c = Selling price of the product ($)

1.2

=Total market potential (TMP):

5,342,400,000

Market Conditions
Corporate tax rate

34.61%

Current account balance (millions US$)

-31288

GDP per capita (PPP)

1630.8

Imports of goods and services (% of GDP)

Currency Stability
Import tariffs
Easy to establish presence or a business
Member of WTO

26%
Stable
high tax for alcoholic drinks
free trade area
since 1995

Infrastructure Situation
With more than 300 million internet users, India has the
second largest internet user base in the world.
There are 13 major ports & about 200 minor and
intermediate ports in India.
India has one of the largest road networks in the world,
aggregating to about 3.3 million kilometers at present.
There are 329 international & domestic airports in India.

- Global Market of Cider

- SWOT Analysis
STRENGTHS
Brand already well
established in western
countries such as UK & US.
Brand positioning strategies
can be replicated.
Has experience in entering
new markets such as
Australia.
Strong backing of the parent
company

WEAKNESSES
Developing a taste in a new
market takes time and is a
formidable task
Creating awareness about
cider in a new market is a
huge task

OPPORTUNITIES

THREATS

Asian and south American

markets are still untapped

Its hard to make a transition

of consumer from their loyal
brand

Low alcohol content drinks

with a sweeter taste do
appeal women

Negative image associated

with drinking

PESTLE Analysis
Political: Different states have different rules of liquor, time limits
& drinking age.
Economic: Disposable of average middle class increasing at an
alarming rate.
Social: Pubs and discotheque culture on rise.
Technological: Advanced brewing technology can be used later
for production strategies.
Legal: Alcohol market controlled by state government. Fully
banned in states like Gujrat , Kerala and Nagaland.
Environmental: Restrictions on carbon footprint that needs to be
considered for later production strategies.

- Product Life Cycle

Introduction

Growth

Maturity

Decline

Objective

Educate the
customers

Build brand
identity

Hold market
share

reduce cost

Buyers

Few

Growing

Saturation

Declining

Pricing strategy

Marketing price
penetration

Continue strategy

Match best
competitor

Price reduce

Promotion
strategy

Introduce the
product with low
price and gain
more customers

Increase
consumer
awareness

To improve the
marketing level

Maintain loyal
customers

14

Porters Generic Strategies

Threat of new entrants:

Since the untapped markets are ripe, there are chances of other cider brands entering those
markets.
Threat of substitute:
very heavy because of the established markets of other alcoholic beverages such as beer
and wine.
Determinants of supplier power:
Not a significant concern because Heineken has existing alliance with leading liquor
companies around the world. The Heineken products are sold via their distribution networks
at present.
Determinants of competitive rivalry:
Once Strongbow enters the new market there may be competition by the existing
international cider brands such as magners, Aspall & Stella Artois.
Bargaining power of the buyer:
Significant because of the significantly established market of the product substitutes and the

Competitive Analysis
Somersby Cider belongs to the Danish
brewing companyCarlsberg group.
It is one of the top cider brands in the
world.
It is Financially strong and has a capture
over 46 markets worldwide.
Strong backing of the Company that is
Carlsberg.
This might be the strongest competitor
to strongbow cider in future.

Indirect Competitors in India

Bacardi Breezer for short is a fruit based wine,
ABV ranging from 4.4% to 6.6%.
Well established international brand.
Bacardi Breezer is currently a market leader in
its segment.
Strong backing of the parent company.
Very strong existing distribution network,
Marketing capabilities, and production
facilities.

Entry Mode selection Criteria

Entry Mode (Joint Venture)

Heineken sets up new breweries in foreign markets, with
the assistance from local government and financial
institutions.
Heineken has set up breweries in countries of different
regions (Ireland, Italy) so as to exploit location
advantages (relative wage rates, production capacity,
R&D facilities, market potential).
Heineken buys over local existing breweries in foreign
country, thereby having access to new markets,
technology, trained and skilled employees, and product
distribution systems.

Distribution Strategy
Take advantage of existing Strategic Alliance with UB
(United Breweries) group.
UB is the official Distributor of Heineken products in
India.
Heinekens stake in UB group India stands for 42.1%.
UB has contacts with reputed hotel chains such as Taj
hotel group, Oberoi, JW Marriot, ITC Hotels, Sheraton &
Radisson.
Strong Distribution network to wholesalers and Liquor
Retail Outlets/Bars and Pubs.
Utilize the same distribution channels as Heineken
beer products.
Most distributors have been loyal UB group partners for
multiple decades.

Segmentation, Target, positioning

Which Segment: Metro cities in India ( expand later to
other urban areas in north and southern India).
Who are we targeting: Young and middle aged
population of the metropolitan cities. No specific gender
preferences as the ciders are equally acceptable by
both males and females.
Where are we positioning it: Product will be
positioned as a premium beverage brand in the country.
First and foremost, a place for cider needs to be created
in the Indian alcohol market.

Positioning Map

High quality

Heinek
en Beer
Strongb
ow Cider
bBacar
di
Breeze
r

Royal
Low price Challeng
e beer
High
price

Magnu
m Beer
Somers
by Cider

Pricing Strategy
Based on our marketing goals & objectives the best
pricing strategy for this product is Penetration pricing.
The selling price of the product will be lower in India
when compared to Home country.
Our Aim is to introduce the product at low price than the
subsidiary products in order to gain market share & build
customer loyalty.

People & physical evidence

Brand Management
Team

Cider Tasting Events

Distribution
Partners

Road Shows

Advertising
Partners

Sales Team

Strongbow India Website

Customer support
Team

Import Partners

Promotion Strategy

Sponsoring a cricket team

in IPL

Billboards &
Hoardings

Social Media

Direct
Marketing(EmailHarvesting)

Brochures

Marketing Cost Assumptions

Figure in INR Mn
Action/Tool

Who/When

2015

2016

2017

2018

Surrogate advertising using print

media & fashion magazines.

Intensely for three months &

consistently over four years
(less aggressive)

15

15

15

15

Advertising contracts for jingle

creation

During the launch of the

product

Sponsorship in sporting events

Owned by UB group for first 4

years

4.0

4.0

4.4

4.8

Billboards & Hoardings near areas

with heavy pub culture

During the launch for 2

weeks

Banners, signages & video

advertisements in bars, pubs &
restaurants in reputed hotel chains

6 months

0.6

0.6

0.6

0.6

Promotional offers and cider

tasting events

During launch for one month

0.5

Fliers & catalogue distributions

6 months

0.50

0.50

0.50

0.50

Road shows

4 times for first month

1.2

0.025

0.025

0.025

0.025

Website creation & maintenance

- Goals

GOALS

Create brand awareness of Strongbow as well

as cider in general
Using early mover advantage and capture a
significant market share
Attract new customers and build brand equity
Achieve a significant and consistent growth in
sales
Keep our marketing costs and budgets in
control to help boost our profitability
Build a strong network with the major
stakeholders in the alcohol industry

Objectives
Objectives
Reach out at least 50% of target segments by the
end of twelve months.
Develop a social Media plan for building and maintaining an
online presence. Number of hits and likes will be used to
measure the effectiveness of our objective.

We target to reach sales of cider in bars, pubs and

restaurants in reputed hotel chains to at least 10%
of the sales of conventional drinks.
Increase customer retention and satisfaction of our
customers which can be measured by taking timely
feedbacks and surveys from them.
Increase brand recall of the company/product. It will
be measured by conducting surveys. We target a
brand recall survey response rate of at least 60%.

Export-Import Strategy
Free carrier

Who pays?

Export Packing
Marking & Labeling
Export Clearance (License,EEI/AES)
Freight Forwarder Documentation fees
Inland Freight to Main Carrier
Origin Terminal Charges
Vessel Loading Charges
Ocean Freight / Air Freight
Nominate Export Forwarder
Marine Insurance
Unload Main Carrier Charges
Destination Terminal Charges
Nominate On-Carrier
Security Information
Requirements
Customs Broker Clearence Fees
Duty, Customs Fees, Taxes
Delivery to Buyer Destination
Delivering Carrier Unloading

Seller
Seller
Buyer
Buyer
Seller
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer
Buyer

Documents required for the operations

A commercial invoice
An export-packing list
Insurance policy
Letter of credit
Declaration of value
A bill of lading
An airway bill specific to the carrier
GR/SDF form prescribed by Reserve Bank of India in
duplicate
A certificate of origin
An export licence
An Export insurance
Incoterms

Taxes Involved

Type of Tax

VAT

14.5

Retailer

15.0

Distributor

5.0

Excise

40.0

Manufacturer

25.5

TOTAL

ource: Euromonitor International

100.0

Mode of payments(LOC)
1) Sale Contract

5) Deliver
Goods

Buyer
(importer)
8)Docume
nts

Seller
(exporter)
4)Deliver
letter of
credit

2)Reque
st for
credit

6)Documen
ts

3)Send credit

Bank of
Importer

7)Documen
ts

Bank of
Exporter

Recommendations & Conclusions

Recommendations
Should Enter the Indian Market as trading partner with UB.
Take early mover advantage and obtain significant market share in Indian cider
market.
Create awareness about Strongbow cider brand and cider as an alcoholic
beverage drink.
Use positioning & promotional activities to pull audiences from traditional
alcoholic beverages.
Risks
High tax rate
Laws and regulations in various Indian states. Some of them dont even allow
alcohol.
Different states have different rules of liquor, time limits & drinking age.

Thank You
Any Questions..?

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