Exec. VP (Sales & Marketing) | 23 Feb 2004
“I’m not saying that we are doing sponsorships in lieu of advertising. We would have added this dimension to our advertising to support our brand building.”
A product of IIM Calcutta, Shekhar Ramamurthy began his career with Lintas in 1987. Two years later he joined the UB Group. Over the years he had held various positions at McDowell’s and Herbertsons. Currently, Executive VP--Sales & Marketing with UB’s brewery division, Ramamurthy counts his ability to work with diverse teams in leadership and peer roles as his core expertise. In conversation with Shubha Kumble of exchange4media.com, he discusses the Kingfisher winner formula, problems and prospects of the emerging beer industry and more.
Q. Where do you stand in the beer industry?
We are the market leaders in India with well over 40% share. In addition, the single largest beer brand in the country belongs to us. We have a national presence and are the market leaders in the mild beer segment with Kingfisher, which is the largest selling beer brand in the country.
We also have the fastest growing beer brand in our portfolio, which is Kingfisher Strong.
More than anything else, if you ask someone in India to name a beer, I’m sure they will come up with the brandname Kingfisher.
Q. Tell us about the various brands in your division?
We have Kingfisher Lager beer which is the single largest brand in the country. Then we have a brand in the strong beer category called Kingfisher Strong, which is a relatively young brand that was launched only four years ago. It is the fastest growing beer brand in the country. In its category, it is the second biggest brand. Apart from that, we have a number of brands that have regional strengths. One of them is UB Export, a popular brand in Karnataka. Kalyani Black Label is popular in the eastern section, Delhi and Tamil Nadu. We also have a brand called London Pilsner which was acquired when we took over Associated Breweries. London Pilsner is popular among a certain section of population in Mumbai. We also have a niche brand called UB Ice, launched a few years ago.
Q. How has the positioning of Kingfisher evolved since its launch?
The positioning began some 10-15 years when we decided to make it a national brand. Before that, there were several brands available in different parts of the country; not all were necessarily from UB. I think the defining moment for Kingfisher came about when we decided to sponsor the West Indies cricket team in 1996, the year the World Cup was hosted in India, Pakistan and Sri Lanka. West Indies was then a force to reckon with and Kingfisher was the worldwide sponsor of the team. They played good cricket but we believed that it was not necessary to link the success of the brand with the success of the team. It was important to link the brand with the spirit of the team. People from the Caribbean were always known to have a free spirit which reflects in their approach to life and the game. That is exactly the kind of spirit we wanted to be associated with. West Indies did not win the World Cup that year but brand association was a big success.
We have also built the brand on various other platforms. For instance, we have been associated with Formula 1 racing. We are one of the sponsors of the Bennetton F1 team. We have also been supporting India’s racers, first Narain Kartikeyan and now Arun Chandok who is racing in the F3 category. This gives the brand a sense of excitement, a sense of thrill as beer is a youth brand and we need to be associated with people and activities that appeal to the youth.
We have also been sponsors of two iconic cricketers, Saurav Ganguly and Ajay Jadeja.
Football too has been high on our agenda. The game is growing in stature and it enjoys fanatical following in some parts of the country. We are associated with East Bengal, which is undoubtedly the top team in the country. We have received a fantastic rub on to the brand because of the game they play, the fantastic fan following they have and because of the image and spirit they have brought to football in the country.
Q. Any other activity Kingfisher has been associated with?
Fashion. It has an intangible edge that appeals to the youth. Not everybody can wear fashionable clothes and not everybody can be a fashion model but everyone aspires to have that kind of image. Kingfisher is firmly entrenched in that kind of environment. We have instituted the fashion awards, the first of its kind in the country.
In terms of brand building, we have associated ourselves with a property that appeals to the youth. Apart from this, we have time to time advertised in a way that we communicate the youthful, fun and free spirited image that Kingfisher is about.
Q. Has the prohibition on advertising alcohol affected UB?
It has affected not just UB but the entire industry. But having said that it is important to realize that it is the law of the land and we need to follow it. Apart from that, we have realized that we can’t sit back and stop the brand building process. Hence, our advertising and brand building continues. While we cannot advertise alcohol, we have successfully built our brand through our associations. A lot of companies, I don’t want to name them, do this by using things like branded glasses, which is not truly credible. But we, on the other hand, do fashion. We do sports. In fact, our water is a very successful brand in its segment. We actually sell a lot of water in this country. We are, in fact, the fourth or fifth largest water brand in India. In the recently held marathon in Mumbai, Kingfisher was the official water sponsor. We make large quantities of water, we have an organisation that does water, and obviously we use that to build our brand.
But yes, coming back to your original question, if direct advertising was allowed, it would definitely help! Then you could talk to your consumers directly saying that Kingfisher beer stands for all the values we are talking about, that it is fashionable, trendy and exciting. We may still continue all our sponsorships. A lot of big brands, take Budweiser for example, do a lot of advertising and undertake sponsorships. So, I’m not saying that we are doing sponsorships in lieu of advertising. We would have added this dimension to our advertising to support our brand building.
Q. To what extent does advertising have a direct bearing on sales?
Advertising has a direct impact on any business. The only difference between the conventional advertising of a soft drink, garment or soap and us is that while they can communicate directly about their brand and talk about its virtue, brand and benefits, we can’t. We have to do it through associations and events. When we advertise that Kingfisher West Bengal is India’s best football club, and a winner of many tournaments, I’m also saying that Kingfisher is the best beer in the country. Of course, if I did direct advertising I would have said that Kingfisher beer is the most exciting beer in the country. We have to work much harder to get to the same place that others reach through direct advertising.
Q. Several new players are expected to enter the Indian beer market.
Well, there are not too many new players. A couple of new international companies have come in. First, there was Fosters, but they are essentially a regional company with only a marginal presence outside Maharashtra. The bigger entrant is South African Breweries (SAB), which is now the second largest player in the domestic beer market by virtue of the acquisition of Shaw Wallace’s beer business. There has not been any other significant entrant in the beer business in recent times. Today, beer business in most parts of the country is being dominated by two players: UB, and Shaw Wallace–SAB combine.
Q. What about Cobra?
To put the facts straight, Cobra is available mainly in the UK. There it competes directly with Kingfisher. Kingfisher is the largest Indian beer in the UK and Cobra is number two. Cobra has been making news in India in the last year or two. They have done this to establish themselves in the UK as an Indian brand. However, while they are popular in the Indian restaurants, they cannot claim to be an Indian brand. On the other hand, Kingfisher can rightfully claim to be the largest Indian beer brand in the world. I wouldn’t consider Cobra as an entrant.
Q. Is there a change in consumer preference?
For one, the consumer has a wider choice today. There are lots of activities, and lots of products have been launched in the youth category, like Breezers. Our own spirits division has launched its range of RTD products. Steadily, more and more people have been coming into the beer-drinking fold. The consumer is a lot more aware because of the media vehicles, and not necessarily by way of advertising. By this, I mean the magazines and portals that may not be directly associated with beer but carry a lot of lifestyle features. They influence consumer behaviour and preferences. Having said that, beer consumption in India is still very very low; there is a long way to go.
Q. How big is the beer market in India?
The beer industry is valued at Rs 4,500-5,000 crore at the retail level with a business of 80-85 million cases. This is nothing much for a large country as ours.
Q. What share of this does UB hold?
Q. Over the next five years how do you see this industry grow?
The industry will grow 8-10% per annum. This year it hasn’t grown, but the last few years saw 7-8% growth.
Q. Why was there no growth this year?
This year we’ve had very heavy and prolonged monsoons. Monsoon time is when consumption comes down, just like in the soft drink business. Last year the sales were up because of poor monsoons and an extended summer.
Q. Has the image of beer changed in India in recent times?
I would say it is changing. It is a reflection of the changes that are taking place within our society. As I mentioned earlier, because of the media, we are exposed to a lot more influences and a lot more stimuli than we have had earlier. Basically, attitudes towards beer, beer consumption and mild intoxicants are becoming more liberal.
Q. What kind of changes will the front-end see?
It is changing, but the change is slow. There are a number of large department stores like FoodWorld that retail beer. The shopping experience in say a FoodWorld is far superior to going to a regular liquor store. So, I would think that going forward there will a number of such shops coming up. Also, there are a number of very classy, up-market and stylish bars and lounges opening up, particularly in the larger cities and that will also accelerate as we go forward. The whole experience of purchasing and consumption of beer is going to improve.
Q. How important is point of purchase advertising for beer?
Very important. Since direct advertising is limited, the point of sale can make a difference. When a consumer walks into a store, he comes with a basket of brands in his mind. Not everyone walks in thinking I want brand XYZ. In such a situation, good quality as also visibility of the item could make him change his mind.
Q. What are the growth plans of UB breweries division?
We have outperformed the industry over the last few years. We have added on 1-2% marketshare, which means we have grown ahead of the industry. We plan to continue this growth.