SenSitive group

Sandra Betancourt S11005904Tahmeena Bukhari S11005969Dipendra Pal S11005806Nileshkumar Christian S11006054Muhammad Rajib Rahman S11005817Vyacheslav Alexandrov S11005932

Parliament Vodka is an alcoholic drink that is produce by

CEDC (Central European Distribution Corporation)

using spring water and is purified with clean milk which ensures the highest

purity and unique taste.

INTRODUCTION CEDC (Central European Distribution Corporation) is one of

the world’s largest vodka producer from Russia with leading position in Russia, Poland and in Hungary.

CEDC’s mission is to deliver highest quality product with consumers’ recognition to achieve leading position in Vodka market.

CEDC decided to extend its market through entering in Spain and Turkey to maximize its profit and to extend the life of its products.

Spain show a great market opportunity as it has a record number of 8.3 million tourist coming for their holidays.

Turkey show the future market for vodka business as the economy of Turkey is growing by 4.3% with biggest middle income partner.

Pestle analysis Spain

Excise duty is 550 euro per hectolitre per degree of

alcohol in the finished product.

The Spanish Ministry of Health is the entity

responsible for the preventive alcohol policies in

Spain.

TV alcohol commercials above 20 degrees of volume

is forbidden. Labelling must show the alcohol

strength volume.

According to Baines et al., (2011), PESTLE is one of the easiest frameworks to examine the external environment. PESTLE includes the Political, Economic,

Socio-cultural, Technological, Legal and Ecological environment.

Marketing communications, distribution and

marketing research.

CEDC must focus on the health of their customers.

The trade volume reaches 11 billion euro. Spain GDP of 1.349

trillion which expanded 0.60 percent in the second quarter of

2014.

Alcoholic drinks in Spain can be more affordable by 50% of

the price.

Alcohol is traditionally an accepted and morally neutral

element of everyday life in Spain and is well under control.

The consumption of alcohol is integrated into a common

behaviour, such as eating or sleeping.

PESTLE ANALYSIS TURKEY 1

The duty rates apply in turkey to import products is 6.2%

and the standard rates of VAT is 18%.

Tourism ministry also signed a joint action plan contract

with Russian to run join projects for two years.

New law has been imposed by the government to restrict

late night sale of alcohol.

GDP of 820.2 billion, GDP annual growth rate is 4.3% and

inflation rate in turkey is 7.5%.

Turkey is a cultural sensitive product because it is a Muslim country.

Due to some cultural impacts government ban to sale alcohol within 100 meters of schools and mosques.

Turkish law does not allow promoting alcohol through advertisements of television or any other means like billboards.

Protect environment will be one of the important concern while importing alcohol in turkey including safe drinking alcohol considering packaging, sizing and material usage.

PESTLE ANALYSIS TURKEY 2

Rivalry among existing firmsTurkey• Raki vodka is a domestic competitor.• Other competitors: Bong vodka, Zernoff vodka, Absolute vodka, Ciroc vodka, Tekel, Mey-Icki,

Binboa Satsuma.Spain • Verlof vodka and Yurinka vodka are domestic.• Other competitors: Platinum vodka and caviar, Avatar-blue, vodka prince Igor, Virtuous vodka,

vodka Caramel, original-Absolut.

Threat of new entrants and entry barriersTurkey• Alcohol companies which does not exist yet in the market like vodka, caramel.• Government regulation on alcohol is one of the barrier entries.Spain • Government regulation on alcohol can be barriers to entry like licencing and taxes. • Binboa Satsuma Company can be considered as a new entrant for Spain. • Alcohol companies which does not exist yet in the market.

PORTER’S FIVE FORCESgives better understanding of the buyers, suppliers and competitors, which is the main aspect of any

business to consider before entering new market (Hooley, et. al., 2008 and Hollensen 2011).

Bargaining power of suppliers If the bargaining power of suppliers is higher, then it can influence on the manufacturing industry

(Hollensen, 2011).

Turkey and Spain The bargaining power of suppliers will be low.

Bargaining power of buyersIf the bargaining power of buyers is higher, then they have power to counter sellers attempts to

increase prices (Johansson, 2003).

Turkey The bargaining power of the buyers will be relatively low. Spain The bargaining power of the buyers will be relatively high.

Threat of substitutesTurkey Threat of substitutes in the vodka industry is very high. Threats of substitute could be beer, whisky, wine,

brandy, rum and cocktails.Spain Whisky, brandy, beer, cocktails, wine and rum can be

considered as a threat of substitute in Spain Cocktails can be main threat of substitute in Spain

market.

HELPFUL HARMFUL

INTERNAL

STRENGTHS Quality product that offers unique

taste Brand name as it is famous in

Russia Experienced distributor channel

WEAKNESSES Mainly appear to young generations High price which might impact on

buying decision for low income customers

Limited access to other corporate owned bars and clubs

EXTERNAL

OPPORTUNITIES Great opportunity for the brand to

growth due to the increase of alcohol consumption

Decrease in excise taxes

THREATS Strong government (advertisement)

regulations Additional cost with overseas

distribution Competition can be a concern

S W O T

SPAIN

CEDC can use third party like Pernod Richmond to distribute their product.

Spain premium vodka Verlof and Yurinka have higher cost so CEDC can charge cheaper price to get the market.

Attractive packaging for the new market

TURKEY

CEDC should use e-commerce for the distribution of their product.

Price need to be more or less same as Russian market.

Packaging need to put harm sign by law.

MARKET DEVELOPMENT A market development strategy involves selling existing product into new market possible ways of approaching this strategy, includes geographic market, new distribution channel, different pricing

police, packaging (Lee & Carter, 2009).

Spain Age group between 18-48, because it is most active and dynamic group Sea side consumer like Ibiza beach, because it attract young peopleTurkey Tourists because Turkey is popular touristic destination City like Istanbul, because it attract many tourists

TARGETING “there are three general strategies for selecting target market” (Baines et al., 2011).

Spain & Turkey Both country should consider multi-segment target approach. POSITIONING “Positioning can be defined as how a product or a company’s offer appears in the mind of the target customer with respect to other brands” (Hollensen, 2011).

Spain & Turkey Need to be cheaper than other premium vodka No compromise about the quality Service and distribution should in premium label Attractive packaging

SEGMENTATION “means categorizing consumers into similar sets, where each group consists of consumers who are

similar to each other in some way”(Kotler et al., 2011).

Join Venture in Spain

CEDC will do Joint venture with Pernod Ricard.

CEDC will use the expertise of the partner to get the market share.

Pernod Ricard is working closely local public authority who is responsible of legal action.

This will protect parliament vodka from any legal changes.

Using Pernod Ricard marketing expertise, Parliament vodka will target its potential customers.

MARKET ENTRY STRATEGY

“The choice of global market entry depends on several conflicting forces which makes the entry mode decision complex but any choice of entry mode

should be based on expected profit contribution” (Hollensen, 2011).

Indirect Export in Turkey

CEDC will do indirect export in Turkey because of marketing environment.

CEDC will export to independent exporter to minimize the risk.

The amount of the risk is low.

However, CEDC will have lack of control in marketing strategies.

TURKEY Positioned as luxury with Gold Flakes

in it Soft shape design with gold plated

label Access code for VIP features on APP

and Website Target tourists and high income

people Included translation and recipes

SPAIN Positioned as a drink to begin

adventure Soft elegant shape for comfortable

handing in a hand Access code to get discount entry in

Night Clubs and Festivals Target tourists and active young

people Included translation and recipes

To satisfy customer and business needs and deliver the right product in the right place, at the price place and at right time will be used Marketing Mix (CIM, 2014).

MARKETING MIX

Product

- Average price is 18 pounds- Many wealthy tourists- High tax on alcohol- Alcohol is a part of dinner etiquette- Parliament is 29 pounds for 700ml

- Average price is 8 pounds- Very low tax on alcohol- Many young drinking people- Alcohol often drunk outside- Parliament set at 8 pounds for 700ml

Turkey Spain

PROMOTION

- Seller can collect point to redeem goods- Email and phone marketing- In-house promotion in hotels and restaurants and

Online- Free bottle and promotions to sellers- Tour guide App for tourists- Codes for buyers to win trip or get premium app and

website futures

- Online, bars, clubs, restaurants, hotels, festivals, Open Ait, seaside

- Seller can collect point to redeem goods- Email and phone marketing- Free bottle and promotions to sellers- Tour guide App for tourists- Bundle with non-alcoholic spirit to mix, free fridge bag

or condoms.- Codes to get discount entry to clubs and festivals

- Sponsoring big adventurous events for young generation

- Van to give full experience to make personal cocktail

TURKEY SPAIN

“Parliament- Enjoy your high quality lifestyle!” “New adventure should begin from pure good feelings!”

PLACE

- Expensive shops, supermarkets, Hotels, Restaurants

- Space on shelf will be decorated in gold and black to highlight exclusivity

- Website will also be reflection of luxury lifestyle with access to related news

- Local shops, supermarkets, Nightclubs, restaurants, hostels

- Street van on the open air party decorated to give full experience of designing personal drink

TURKEY SPAIN

- Website will reflect young lifestyle, provide opportunity to design drink and purchase all component for it.

- Places will be decorated to make experience of buying vodka more interactive and enjoyable

REFERENCES

Baines, P, Fill, C & Page, K. (2011), Marketing (2nd Edition). New York: US, Oxford University Press.

Hollensen, S. (2011), Global Marketing A Decision-Oriented Approach (5th Edition). Harlow, England: Pearson Education Limited.

Hooley, G., Piercy, N. and Nicoulaud, B. (2008), Marketing Strategy and Competitive Positioning (4th Edition). Harlow, England: Pearson Education Limited.

Johansson, J. K. (2003), Global Marketing: foreign entry, local marketing &global management (3rd Edition). New York, USA: McGraw-Hill Higher Education.

Kotler, P. and Keller, K.L.(2011). A framework for marketing management. (5th Edition). Harlow: Pearson Education Ltd.

Lee, K & Carter, S. (2009). Global Marketing Management (2nd Edition). New York: US, Oxford University Press.

Marketing and the 7Ps. (2014). 1st ed. [ebook] London: CIM. Available at: http://www.cim.co.uk/files/7ps.pdf [Accessed 15 Aug. 2014].