Executive Director | 08 Jul 2002
"Surrogate advertising ban would not hamper our plans to a large extent because there are a number of alternative media through which you can always address your consumer."
Radico Khaitan Limited's Marketing Division was formed under the supervision of Abhishek Khaitan in 1997.Today the brand portfolio comprises the finest brands that cater to a diversified taste and preference. Under his leadership the Defence Marketing division was formed which has created Contessa rum - the most admired brand in the defence sector with almost 25% share in CSD. In an exhaustive interaction with Neha Pant of exchange4media Abhishek Khaitan shares the strategies that have helped him create power brands like 8PM and Contessa and the branding pecularities in the liquor business
Q. How is liquor advertising and marketing different as compared to other products especially in the Indian market scenario? Does it need a special kind of branding and positioning?
Liquor advertising is certainly different from advertising in any other categories because there is no ban on direct advertising in any other category. Apart from liquor and tobacco, no other product advertising is under such sharp restrictions. Despite being one of the highest revenue earners for the government, the liquor industry has to face a lot of constraints as far as advertising and brand popularization is concerned. Branding and positioning which is not category specific but is a subject that is product specific and therefore it depends on the target audience that it is addressing. So it all depends on the product that we have to offer and the target audience we are aiming at and the price at which we will offer it to them.
Q. Radico Khaitan's power brands are Contessa Rum and 8 PM Whisky, which are regular segment drinks. . How have you positioned them vis-Ã -vis other brands in the same category?
We believe that 8 PM and Contessa are highly successful brands and they have already established their brand identity. They are brands that are highly popular and whose sales are growing steadily 8 PM is a brand that has been positioned as one that initiates a bondage or results in culmination of friendship as against the brands in the same category which are directed towards celebration or rejoicing. 8 PM is not perceived by the people as just another regular whisky. Contessa on the other hand has been positioned as an aspirational brand in the Rum category. Designed to be a winner, 8 PM comes in a distinguished packaging, a sophisticated and elegant bottle in brand colors of black and gold. The Unique name of 8 PM supported by an equally strong positioning of "A Time for Friends" has ensured a distinctive identity for the brand. It is available in 750 ml; 375 ml and 180 ml pack sizes and is the only blend in the segment, which contains Scotch. Contessa XXX Rum brand has won the gold medal at the Monde Selection at Brussels in 1973 for its overall quality and is one of the finest and fastest growing rum in India. The popularity of the brand has enabled the company to successfully launch a variant called Contessa Select. Packaging plays a very important role in liquor business. The product should look attractive enough for the customer to buy. For example The Conessa Gin packaging consciously departs from the base hierarchy of colors used by competition viz. Black, Red & Gold. The colors Black & Blue and layout configuration has been designed to catch attention at the point of purchase by making the packaging stand out against its competitive set. This kind of innovative packaging also helps in providing the consumer with a refreshingly different presentation. Similarly the Contessa Brandy packaging consciously departs from the base hierarchy of colours used by competition viz. Black & Burgundy. The colours Mauve & Black and layout configuration has been designed to catch attention at the point of purchase by making the packaging stand out against its competitive brands.
Q. Can you tell us something about the positioning of your company?
We have positioned our company Radico Khaitan as a world of great brands, great financials and above all great friends. Others make wine, spirits and beer but we also make friends. Our positioning revolves around 'friendship and bonding'. Over 50 years ago, Radico Khaitan Ltd. made its debut in the liquor market under the name of Rampur Distillery. It mastered the art as it supplied quality spirits to leading liquor companies. The experience it garnered encouraged it to take a spirited decision to market own brands in the domestic and international market. Today, it is one of the leading manufacturers of rectified spirit and extra neutral alcohol in addition to its superior quality bottled liquor. Its exhaustive product portfolio covers almost every segment, starting with a range of country liquor and going up to the most expensive super premium Scotches available in India. It also includes Rum, Gin, Brandy and Vodka. Of these, a large number of brands have proved to be bestsellers in the market
Q. With international brands gradually seeping into the Indian market after the lifting of quantative restrictions, how do you plan to tackle competition? What would be your brand strategy?
The international brands currently being rolled in Indian market do not pose much of threat to the IMFL segment due to higher price segment. These international brands, which are gradually coming in, are in the premium segment, and products like a Johnny Walker or a Chivas Regal will not be competing with IMFL brands because of the price difference. These premium brands have their own positioning while IMFL brands like ours have their own positioning and brand equity. The cheaper foreign brands have not really come in so there is no real competition. The IMFL brands will be competing with each other and our promotions will be aimed at exploiting this. Radico Khaitan has registered the highest growth among the liquor companies. We registered 80% growth on top-lines and 40% in bottomlines. So there is no doubt that our products are growing. Our quality policy is "we are committed to delight our customers through continual improvement process, systems and services for constant quality product". This philosophy is what has catapulted Radico Khaitan to a position of eminence is the power of excellent brands. For us success is a journey not a destination.
Q. Radico Khaitan has tied up with Interbrew and launched Beck Beer. You have recently launched 'Special Appointment'- a premium whisky, what would be your media and marketing strategy for them to combat an overcrowded market where advertising is banned?
As we have launched "Special Appointment", American wines and Beck's beer, we are focusing on innovative on-premise consume centric activity promotions for creating awareness and generate trials. After making some of the best brands in the domestic market we are looking at importing and marketing international brands here. We would be concentrating on the consumer-oriented activities and would thus be doing more of below the line activities. As far as above the line activities are concerned, all the media that are available such as outdoors and print would be addressed to generating a share of voice. And as far as wines are concerned, we are one of the first companies to foray into wines. We tied up with American company Earnst & Julio Gallo- the largest wine maker in the world for their wines. The Indian wine market is still a nascent market and we will have to make the extra effort of educating the consumer on wines. We have wines for all pockets. But the Indian market is opening up and it will grow. With more and more wine brands entering the country there will be competition and the market will grow. Every player who has entered the wine segment is working on promoting and branding his product
Q. With advertising banned in liquor industry what is the strategy that you have adopted for promoting your brands?
We are initially targeting star hotels, bars and clubs and an innovative marketing mix and usage of media in order to create imagery. We would also look at promotions at point of sale and various on premise activities. Most of our products are already well established and have a strong growing consumer base. As far as the new brands are concerned, we have to work on promoting and establishing them as a brand. But we are confident our promotion strategy will help us establish our new product line and increase the consumer base for our existing products.
Q. Can advertising affect the sales of liquor? How important is advertising to the liquor industry?
Advertising plays the role of creating awareness and delivering imagery. So it is more important for a new brand rather than a brand that has already created its place in the market. For such a brand there are lot of other factors as sales is not directly hooked to advertising as it is dependent on lot many factors like product quality, support to the trade, offers to the consumers etc. We have ensured that we don't lose our focus on these aspects. As I said earlier most our products are well established and ban on advertising will not affect their sales and for new products, their quality and our marketing will help build them into strong brands
Q. Like all other players you have also taken to surrogate advertising by launching 8 PM apple juice. How successful has this been in terms of brand awareness of 8 PM whisky?
8 PM advertisement has always been admired by the consumer therefore the recall that we have or enjoy with our consumer base is phenomenal as compared to other brands. Apple Juice was an extension to this only and therefore has helped us in retaining the same. I would not say 8 PM Apple juice is a surrogate product. It is just an extension of our business and this sector has been doing well and contributing to our revenues. We are looking at other flavours of juice. 8 PM is our brand extension and a legitimate product. Rather, the image of 8 PM whisky helped us sell the apple juice.
Q. With surrogate advertising also on in danger of being banned what do you plan to do? What will happen to your surrogate products? What is the media strategy that you would adopt?
Surrogate advertising ban would not hamper our plans to a large extent because there are a number of alternative media through which you can always address your consumer. As far as our strategy on this account is concerned, we would not like to reveal that at this juncture.
Q. What is the level of brand consciousness and brand loyalty of the Indian liquor consumer? Does advertising play a role in influencing his decision
Advertising as already as indicated played a role in creating awareness and delivering an imagery cue. Therefore, it can translate into trials but retention is not the function that it can address. In today's arena the consumer is well informed and so he is brand conscious but loyalty is always an issue .To create a die hard fan is not an easy task in any of the categories.
Q. The new trend is a shift from dark spirits to white spirits. Why this shift especially among the younger crowd? Is it more of a lifestyle statement? Or has it got to do with taste? How do you plan to tackle this shift?
It is a result of the growing impact of western world in our society and otherwise also nothing remains constant, things change with time. But dark spirits have it own charm and loyal customers. White spirits has come up as something new to customers, who are traditionally, used to dark spirits hence the attraction but it has not in any way affected the sales of dark spirits.
Q. What is the medium of communication that you would use to reach out to the consumers in the rural segment?
The most effective ones are wall paintings, tin boards, glow signs apart from posters, danglers and other point of sale material. We extensively use all of them. The rural market is also a big market and the consumers there also need to be educated about the brand offerings that are available. The rest is all about product really.