KINGFISHER BLUE

This summer promises to be very exciting for all beer drinkers. With a number of international & domestic players having already launched or planning to launch their products in the market this category is all set for some high intensity fireworks.

The Major players in the domestic Beer market are United Breweries ltd. (Kingfisher, Kalyani, Zingaro, Sand Piper, and London pisner.) and Sab Miller (Haywards series, Fosters, Royal Challenge, Knockout, and Castle Lager). The rest are brands by foreign majors like Carlsberg and Heineken.

Kingfisher blue is a premium, high end beer launched by UB (United Breweries) to combat the threat posed by new entrants in the category like Carlsberg, Anheuser-Busch, InBev and Asia pacific breweries.

Beer sales in India are primarily driven by premium and standard products. There are hardly any economy brands available due to the heavy duties and taxes on beer. The premium brands are growing faster than standard or economy brands as consumers are trading up to better-quality strong beer. Urban consumers increasingly prefer to buy well-known premium brands such as Kingfisher or Foster’s rather than standard brands such as Knock Out, despite the higher prices.

The upsurge in consumerism has been a result of changing demographics. Changing consumer perceptions, lifestyles, media coverage and high-profile promotions have prompted the strong growth in beer sales.

Domestically produced beer is the dominant force in the Indian beer market, with a volume share of more than 99% in 2007. Restricted advertising, high prices and the limited distribution reach of beer make it difficult for foreign players with an imported brand to create brand awareness and loyalty. Moreover, archaic legislation and high import duties lend a helping hand to domestic manufacturers. This is mainly the reason why many foreign players have started domestic production.

Major brands that are either already launched or about to be launched are Carlsberg, Löwenbräu, Heineken, Tiger and Stella Artois. Domestic brands also tend to have a higher alcohol content compared to imports, and consumers prefer strong beer due to its faster intoxication effect.

Positioning Kingfisher Blue

With a positioning stability achieved in the mainstream segment of premium and strong beer in the Indian market between the two major rivals UB and SM. Major clashes are expected to happen in the high end segment for beer (Rs.80 and upwards for a 700/500 ml bottle) where new foreign entrants are positioning themselves. The Launch of Kingfisher Blue by UB (and INDUS PRIDE by Sab MIller)is a response to this new development in the market .

Kingfisher blue is positioned as fresh and easy to drink beer with a strong kick (the alcohol quotient is upwards of 8%). Undoubtedly the company is targeting the youth concentrated in the major cities and having high income levels along with a hip and happening lifestyle. There is also an attempt made in the communication to make a connect with the highly adventurous personality of the present day youth. Though the texture has been kept smooth to appeal to this segment (sensation of sophistication) the alcohol quotient has been kept at a high level of 8%. This is logical because typically Indian customers want to experience a quick high.

The packaging bears a sophisticated look which goes well with the positioning but it remains to be seen how all this actually plays out in the market place. My own personal take is, the upper end of the market is comprised of highly informed and sophisticated customers who are more likely to form association with a prominent international brand rather than an extension from a domestic brand which generally caters to the masses.

To tap this segment the better strategy would have been to bring in some international brand either through tie up or through acquisition and play on the relevant plank. It’s worth mentioning here that the positioning “fresh and easy to drink” might be quite relevant for a beer but it’s just that the brand behind the positioning doesn’t quite have the stature to convince the target audience.

The move in fact can prove counterproductive with the possible negative connotations from the extension seeping into the parent brand and thereby creating negative associations with the Kingfisher brand. The brand accounts for most of the 50%+ share of the company in the Indian Beer market. Certainly UB would have analyzed all possible outcomes before making the move. As far as I am concerned for me it’s a “not so good” move.

But not to worry there are going to be plenty of brands to gurge. This summer’s really going to be great fun. CHEERS !!!