Study of Market Size of Semi Premium Whisky and to Study the Marketing Strategy of the Leaders in That Segment and How to Promote the New Brand

“A case study on behalf of  Simbhaoli sugars limited”  A dissertation submitted in partial fulfillment of the requirements for the award  Degree In

MASTER OF BUSINESS ADMINISTRATION  From

SUBMITTED BY Mr. Nilesh Chamoli Under the Guidance Of  Prof. A.V.RAO

National school of Business www.nsbindia.org , [email protected] #33, 1 ST CROSS, 22ND MAIN, MARENAHALLI, PHASE 2, J P NAGAR, BANGALORE, KARNATAKA, INDIA 560078

“Study of Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand”

 A PROJECT REPORT  Under the guidance Of 

 ___Prof. A.V.RAO___  Submitted by 

 _____NILESH CHAMOLI_____  in partial fulfillment o f the requirement  for the award of the degree

Of 

MBA IN 

Marketing

SEPTEMBER-DECEMBER & 2009

EXAMINER CERTIFICATION The project report on

“Study of Market of Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand ” Of  NILESH CHAMOLI Is approved and is acceptable in quality and form.

Internal Examiner

External Examiner 

DECLARATION

I hereby declare that this project entitled “ Study of Market of Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand”

Is an original work carried out by me under the direct supervision and guidance of Prof. A.V.Rao, faculty at National School of Business, Bangalore. This project report has

been submitted to Sikkim Manipal University as a part of par tial fulfillment for the award of the degree of Master of Business Administration. I also declare that no part of this presentation had ever been published or submitted as a project representation for any degree of NATIONAL SCHOOL OF BUSINESS. DATE: Nilesh Chamoli MBA 3RD SEMESTER SMU REG. NO: 520852590 NATIONAL SCHOOL OF BUSINESS, BANGALORE

ACKNOWLEDGEMENT

Few months of learning and gaining valuable knowledge in Simbhaoli Sugars would not have been possible without the constant guidance and support of certain key people. We would like to thank them in true sincerity. I want to express my heartfelt gratitude to Mr. S.K.Sinha (Sales & distribution manager) for being guiding force throughout my project. Without his constant support and encouragement this project would not have been a success. I am really grateful to him for giving me the opportunity to do my summer internship project at SIMBHAOLI SUGARS. I would also like to thank Mr. SAMIRUM AGNIHOTRI (Brand Development manager) for  extending his support whenever the need came up. I would also like to thank Prof. A.V.RAO for his invaluable support and guidance. He has been the motivating power for us to do well in our project and to reestablish confidence in us at all those times wherever I felt low. Our heartfelt thanks to Mr. AMITABH ANAND (ASSISTANT DIRECTOR- CORPORATE RELATIONS), NATIONAL SCHOOL OF BUSINESS Bangalore, for the constant guidance, encouragement and motivation he extended through out the project study. I take this opportunity to thank all other faculty members of NATIONAL SCHOOL OF BUSINESS Bangalore and every associate of SIMBHAOLI SUGARS, Delhi without whose co-operation, I would not have been bee n able to complete this project work successfully. Date: Place: Bangalore Mr. NILESH CHAMOLI

PREFACE

Indian Liquor industries share common characteristics arising form a similar policy framew framework. ork. Country Country liquor liquor,, Indian Indian made made Foreign Foreign Liquor Liquor (IMFL) (IMFL) and beer are state state subject, with each state controlling the duty structure and distribution. Incidence of  import and export duties results in high cost of interstate movements which has resulted in each state having attributes of a separate market. This Market research has been done for Simbhaoli sugar Limited for its distillery unit as the company is going to launch a new brand of whisky in its semi premium range. For  that I have to study the “ Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand”. For this purpose the market of Delhi and Gurgaon has been covered for  differentiating the behavior of consumers in this market and the role of retailers in promoting promoting the new brand. brand. Survey has been been conducted conducted through questionn questionnaires aires and responses responses of consumers and and retailers retailers have been recorded. recorded. The results results may not be in accordance to the actual situation in the market because of small sample size and the limitation of area, but serious efforts have been put into get the best results.

Table of Contents INTRODUCTION AND OVERVIEW OF MARKETING………………… MARKETING………………………………..1-1 ……………..1-10 0

MARKET……………………………………………………… MARKET………………………… ……………………………………………………… ……………………………3 …3 MARKETING……………………………………………………………………………………..4 B2C & B2B MARKETING……………………………………………………………………….5 DIFFERENCE BETWEEN B2C & B2B MARKETING………………………… MARKETING……………………………………….8 …………….8 INDUSTRIAL REVOLUTION…………………………………………………………………..9 INDUSTRIALIZATION IN INDIA………………………………………………………………10

RESEARCH OBJECTIVE…………… OBJECTIVE………………………………………… …………………………………………………11 ……………………11-15 -15

OBJECTIVE………………………………………………… OBJECTIVE…………………… ……………………………………………………… …………………………..11 ..11 STATEMENT OF THE PROBLEM…………………………………………………………….11

RESEARCH METHODOLOGY………………… METHODOLOGY……………………………………………… …………………………………….12 ……….12 SOURCES OF DATA………………………… DATA……………………………………………………… ………………………………………..13 …………..13 LIMITATION………………………………………… LIMITATION…………… ………………………………………………………… …………………………………..15 ……..15 INTRODUCTION ABOUT LIQUOR INDUSTRY………………………………………………16-41

LIQUOR INDUSTRY IN INDIA…………………………………………………………16 INDIA…………………………………………………………16 HISTORY OF WHISKY…………………… WHISKY……………………………………………… ……………………………………………18 …………………18 INDUSTRY STRUCTURE…………………… STRUCTURE………………………………………………… …………………………………………21 ……………21 RESTRICTIONS…………………………………………… RESTRICTIONS………………… ……………………………………………………… ……………………………32 32 IMFL SALES IN DIFFERENT STATES………………………… STATES……………………………………………….34 …………………….34 RECENT TRENDS……………………… TRENDS…………………………………………………… ………………………………………………36 …………………36 COMMON TERMS……………………… TERMS………………………………………………… ………………………………………………38 ……………………38 DIFFERENT ALCOHOLIC DRINK……………………… DRINK…………………………………………………… …………………………….41 .41 INTRODUCTION ABOUT COMPANY………………… COMPANY……………………………………………… ………………………………42-58 …42-58 ORIGIN…………………………………………………………………………………..42 VISION…………………………………………………………………………………...43 OPERATING SEGMENTS……………………… SEGMENTS………………………………………………… …………………………………….43 ………….43 PRESENT ACTIVITIES……………… ACTIVITIES…………………………………………… ………………………………………………..48 …………………..48 TECHNOLOGY INITIATIVE……………… INITIATIVE…………………………………………… …………………………………………...51 ……………...51 BRAND BUILDING…………………… BUILDING……………………………………………… ……………………………………………….. ……………………..52 52 MANAGEMENT TEAM……………………… TEAM…………………………………………………… ………………………………………...54 …………...54 COMPETITORS……………………………………………………………………… COMPETITORS………………………………………… ………………………………..59-70 …..59-70 RADICO KHAITAN…………………… KHAITAN………………………………………………… ………………………………………………..59 …………………..59 UB GROUP……………………… GROUP…………………………………………………… ……………………………………………………. ………………………...62 ..62 MOHAN MEAKINS…………………… MEAKINS……………………………………………… ……………………………………………….. ……………………..64 64 SHAW WALLACE……………………… WALLACE…………………………………………………… …………………………………………….... ………………....65 65 SEAGRAMS………………………………………………… SEAGRAMS……………………… ……………………………………………………. …………………………..66 .66 AMRUT DISTILLERIES………………… DISTILLERIES……………………………………………… ……………………………………………..68 ………………..68 DIAGEO………………………………………………………………………………….70

METHODS FOR PROMOTING A NEW BRAND……………………… BRAND……………………………………..71……………..71-92 92 SALES PROMOTION………………… PROMOTION…………………………………………… ……………………………………………….. ……………………...71 .71 PUBLIC RELATION………………… RELATION……………………………………………… ………………………………………………….. ……………………..72 72 DISTRIBUTION CHANNEL……………………… CHANNEL…………………………………………………… …………………………………….73 ……….73 PROMOTIONAL STRATEGY…………………… STRATEGY………………………………………………… …………………………………….76 ……….76 MARKETING MIX FOR SUCCESFUL PRODUCT LAUNCHING………………….77 TOOLS OF ADVERTISING LIQUOR………………………………………………….78 LIQUOR………………………………………………….78 FACTOR AFFECTING COMPANY MARKETING STRATEGY…………………… STRATEGY…………………….79 .79 RELATIONSHIP BETWEEN PRODUCT LIFE CYCLE & MARKETING STRATEGY………………………………………………… STRATEGY…………………… ………………………………………………….. …………………….. …….80 LIMITATION……………………………………… LIMITATION…………… ……………………………………………………… ……………………………………....83 ………....83 RECOMMENDATION FOR THE COMPANY………………………………………...84 COMPANY………………………………………...84 QUESTIONNAIRE FOR CONSUMER……………………… CONSUMER………………………………………………. ………………………...86 ..86 OUTCOMES……………………………………………… OUTCOMES…………………… ……………………………………………………… ……………………………...88 ...88 QUESTIONNAIRE FOR RETAILER………………………… RETAILER………………………………………………….. ………………………...90 .90 OUTCOMES……………………………………………… OUTCOMES…………………… ……………………………………………………… ………………………………92 …92

PROJECT TITLE

I have undertaken a project titled “ Study of Market of Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand ”

OBJECTIVES The study has been done by undertaking following objective: 

 

To find out the leader in semi premium range of whisky To understand the actual market size of the industry specially in the particular  segment and the growth factor  To make a strategy for developing a new liquor brand To provide suggestion to overcome the adversity

Now as the objective of the study is clear now, let us talk about the finding and conclusion of the project. But first go through the whole study and understand different product in liquor and the industry type.

EXECUTIVE SUMMARY

Perhaps the most distinctive skill of professional marketers is their ability to create, mainta mai ntain, in, protect protect,, and enhance enhance brands. brands.

Brandi Bra nding ng is the art and cor corner nersto stone ne of 

marketing. The American American Marketing Association defines a brand as: a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or  services of one seller or group of sellers and to differentiate them from those of  competitors. Thus a brand denitrifies denitrifies the seller or maker. maker. “What distinguished a brand from its unbranded commodity counterparts is the consumer’s perceptions and feelings about the product’s commodity counterparts is the consumer’s perceptions and feelings about the product’s attributed and how they perform. Ultimately Ultimately,, a brand resides in the minds of consumers. A brand can be better positioned by a asso ciating its name with desirable benefits. A brand is much more more than a name, name, logo, colors, a tagline, tagline, or symbol.

These are

marketing market ing tools tactics. tactics. A brand brand is essentially essentially a market marketer’s er’s promise to deliver deliver a specif spe cific ic set of feature, feature, benefit benefits s and services services consiste consistentl ntly y to the buy buyers ers..

The

marketer must establish a mission for the brand and a vision of what the brand must be and do. Brand nodding occurs when customers experience the company as delivering on its benefit promise. The fact is that brands are not built by advertising but by the the brand exper ex perie ienc nce. e.

Bran Br ands ds vary in th the e am amou ount nt of po powe werr an and d va valu lue e th they ey have in th the e

marketplace. market place. At one extreme extreme are brands that are not known buy must buyers buyers then there are brands for which buyers have a fairly high degree of brand awareness. Beyond this are brands with a high degree of brand acceptability acceptability..

We define brand equity as the positive differential effect that knowing the brand name has on customer customer response to the product or service. service. Brand equity equity results results in cust cu stom omers ers sho showi wing ng a pr pref efer eren ence ce fo forr on one e pr produ oduct ct ov over er an anot othe herr wh when en th they ey are basically basica lly identical. identical. The extent to which customers customers are willing willing to pay more for the particular brand is measure of brand equity. equity. A brand needs to be carefully managed a so that its equity does not depreciate. This Thi s requ require ires s mai mainta ntaini ining ng or imp improv roving ing bra brand nd awa awaren reness ess,, perc perceiv eived ed qua qualit lity y and functional funct ionality ity,, and posit positive ive associations associations.. These tasks require require continuous continuous R and D investment, skillful advertising, and excellent trade and consumer service.

“Study of Market of Market size of semi premium whisky and to study the marketing strategy of the leaders in that segment and how to promote the new brand ”

INTRODUCTION This modern era of liberalization and globalization has opened a broad scope for  conducting marketing of products in business. To -day; marketing management has become more challenging and exciting than ever before. Generally a group customer  who heavily shares a common a group of customers who heavily share a common need constitute the market. Now days, market has turned from seller’s market to buyer’s market. Every market plan depends upon the nature and size of the market. The word marketing means the act of selling and buying in the market. Marketing involves meeting traders, merchants, dealer’s retailers and many a time the consumers directly through media. But it all depends upon the factors, conditions, characteristic of the producer’s product, middlemen and the consumers. Hence, the marketing manager and sales executives are also required to be more and more consumer oriented. Today, profit rather than sales volume is given priority. To achieve goal the proper marketing strategy is needed. A successful strategy man oeuvre for obtaining specific goals can be possible ply by building a high committed and motivated sales team of area managers, sales officers, dealers and officers. Strategy of marketing depends upon the nature of products, quantity of production, consumers, views and awareness overall demand, capacity of product circulation and existence of middleman. A new product may have to be promoted by door to door selling, selling shops and through media like T.V. or through advertisements. If a product is to be exported, the marketing has to be done within the framework of policies and procedures set up by the govt. The middlemen under strict price and control policy of the Ministry of Home Affairs especially Food and Civil Supply Department. For successful marketing of its products, a company may have sales persons, area sales manager, regional sales manager, zonal sales manager marketing professionals, depot communication manager, product manager media assistant, public relation officer and managing director depending upon the size of the company. For the successful career in marketing a person must have certain basic skills like a degree in an area of thrust related to the type of company, ability to formulate and implement

sales, distributional sales, distributional and promotional strategies and exceptional skills to motivate and effectively manage the sales force. In addition, the attitude and talent for innovation, good knowledge of designing and preparing various inputs including visual aid folder is needed. Besides this, involvement in marketing research for  launching new products and in training sales force is must for a successful marketing manager. The above qualifications are must because the role of marketing manager in the organization has also changed with requirement of the hour. Today, marketing manager has become the integral part of business and involves all the activities that take place in an enterprise. As a good marketing manager  one has to train the staff. Therefore the sound knowledge of marketing activities, marketing strategies and legal aspects is needed. Not only this, there many other things which pave the way for promoting sales. Good contacts in corporate sectors, knowledge of controlling activities up to grass-root level, interacting with concer ned departments and sales regulatory authorities are also required for a successful marketing manager. Four Ps namely product, price, place and promotion are the most vital areas of  marketing management. Fifth P added is pace. Without these the marketing objectives of organization cannot be fulfilled. Channel distribution system may get affected by the product factor, market factor and institutional or organizational factors and the vital decisions has to be taken with regard to internal sales promotion in the light of channels of  distribution. The marketing division should see that brand identification is must for the producers to exercise maximum control over the demand for its products. Branding of products is necessary for administration of warranty, guarantee and service policies. The branding is also necessary from companies share point of view and for export purpose. Overall marketing manager must use management science and decisions making technology to the fullest while understanding the limitations of these tools. He should also provide guidelines, stimulations and encouragement for the fullest and rich use of inspiration talents, inventiveness and judgment.

Market

A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things. Markets vary in size, range, geographic scale, location, types and variety of human communities, as well as the types of goods and services traded. Some examples include local farmers’ markets held in town squares or parking lots, shopping centers and shopping malls, international currency and commodity markets, legally created markets such as for pollution permits, and illegal markets such as the market for illicit drugs. If we go in the deep we found that the world MARKET comes form a Latin world “MERCARUS” which means TRADE. Marketing

Marketing is everywhere. Formally or informally, people and organizations engage in a vast number of activities that we could call marketing. Good marketing has become an increasing vital ingredient for business success. And marketing profoundly affect our  day – to – day lives. It is embedded in everything we do – from the clothes we wear, to the web sites we clicks on, to ads we see. Many people think that marketing means “selling or advertising”. It’s It’s true that these are the part of the marketing. But marketing is much more then the selling and advertising. Marketing is about indentifying and meeting human and social needs. One of the shortest definitions of the “marketing is meeting needs pr ofitably”.

The American Marketing Association offers the following formal definition – Marketing is an organizational function and set of process for creating, communicating and delivering value to customer and for managing customer relationship in a way the benefits the organization and its stake holders. The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably”.

We can define marketing as – It is the performance of activities that seeks to accomplish an organization’s objective by anticipating customer or client needs and directing a flow of need – satisfying goods and services from the producer to the customer or clients. OR Marketing is the process associated with promoting for sale goods or services. It is

considered a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Business Marketing is the practice of individuals, or organizations, including

commercial businesses, governments and institutions, facilitating the sale of their  products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their  operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. (Note that while marketing to government entities shares some of the same dynamics d ynamics of organizational marketing, B2G Marketing is meaningfully different.)

B2C and B2B Marketing

Many might say that marketing means marketing no matter to whom or through which medium company want to market its product and services and to some extant they are true but not always. We can differentiate here marketing on the basis of to whom the company market its product whether it’s to final consumer or to some other company which will then modify the product and the market to the final consumer. So, here we have two type of marketing – Business – to – consumer market and Business – to – business market

Business – to – consumer market (B2C Market)

When any firm direct market its products and services to the final consumers then it is called Business - to – Consumer marketing. So we can say that Business-to-consumer (B2C) describes activities of businesses serving end consumers with products and/or services Examples of the B2C market

1. A family family is at home home on a Sunday Sunday night and and is watching watching televisi television. on. An advertisement appears that advertises home delivered pizza. The family decides to order a pizza. 2. Walking Walking down a supermarke supermarkett aisle, aisle, a single single man aged in in his early 30's sees a hair care product that claims to reduce dandruff. He pick's the product and adds it to his shopping cart.

3. A pensioner pensioner visits visits her local local shopping shopping mall. mall. She purchases purchases a number number of items items including her favorite brand of tea. She has bought the same brand of tea for the last 18 years.

The main features of the B2C Market–

1. Marketing Marketing is one-to-many one-to-many in nature. nature. It is is not practical practical for sellers sellers to individual individually ly identify the prospective customers or meet them face-to-face. 2. Lower Lower valu value e of purc purchas hase e 3. Decision Decision making making is quite quite often impuls impulsive ive (spur of the moment) moment) in nature nature 4. Greater Greater reliance reliance on distribut distribution ion (getting (getting into retail retail outlets outlets)) 5.

More effort put into mass marketing (One to many)

6.

More reliance on branding branding..

7.

Higher use of main of main media (television, radio, print media) advertising to build the brand and to achieve top of mind awareness

Business – to- Business Market (Industrial Market)

Here one organization produce the goods for for some other organization organization which then will use those product and services and then will provide final product or service to the consumer. So we can say that Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Typical examples of a B2B Market

1. An organizatio organization n is seeking seeking to build build a new warehouse warehouse building building.. After After carefully carefully documenting their requirements, it obtains three proposals from suitable construction firms and after a long process of evaluation and negotiation it places an order with the organization that it believes has h as offered the best value for  money. 2. An organization organization has signif significant icant need need for legal services services and obtains obtains submission submissions s from two law firms. Analysis of the proposals and subsequent discussions determines that there is no price advantage advan tage to placing all of the work with one firm and the decision is made to split the work between the two firms based on an evaluation of each firm's capabilities. 3. A sales represent representative ative makes makes an appointm appointment ent with with a small organization organization that that employs 22 people. He demonstrates a photocopier/fax/printer to the office administrator. After discussing the proposal with the business owner it is decided to sign a contract to obtain the machine on a fully maintained rental and consumables basis with an upgrade after 2 years.

The main features of the B2B Market

1. Marketing Marketing is one-to-one one-to-one in nature. nature. It is relativel relatively y easy for the seller seller to identify identify prospective customers and to build a face-to-face relationship. 2. Highly profess professional ional and and Trained Trained people in in Buying processes processes are involved. involved. In In many cases two or three decision makers have to be considered in purchasing industrial products. 3.

High value considered purchase. purchase.

•

Purchase decision is typically made by a group of people ("buying team") not one person.

4. Often the the buying/sell buying/selling ing process process is complex complex and includes includes many stages stages (for  example; request for expression of interest, request for tender, selection process, awarding of tender, contract negotiations, and signing of final contract)

5. Selling Selling activities activities involve involve long long processes of prospect prospecting, ing, qualifying qualifying,, wooing, making representations, preparing tenders, developing strategies and contract negotiations.

Main difference between B2C (consumer) market and B2B (Business) market

CONSUMER MARKET

BUSINESS MARKET

Every customer has equal value and

There are a small number of big customers

represents a small % of revenue

that account for a large % of revenue

Sales are made remotely, the

Sales are made personally, the

manufacturer doesn't meet the customer 

manufacturer gets to know the customer 

Products are the same for all customers.

Products are customized for different

The service element is low

customers. Service is highly valued

Purchases are made for personal use -

Purchases are made for others to use -

image is important for its own sake

image is important where it adds value to customers

The pu purchaser is is no normally th the us user

The pu purchaser is is no normally an an in integrator; someone down the supply chain is the

user. Cost Co sts s are are re rest stri rict cted ed to pu purc rcha hase se co cost sts s

Purc Pu rcha hase se co cost sts s may may be a sma smallll pa part rt of th the e total costs of use

The purchase event is not subject to

The purchase event is conducted

tender and negotiation

professionally and includes tender and negotiation.

The exchange is one of transaction. There

The exchange is often one of strategic

is no long-time view (financial services

intent. There is the potential for long term

differ)

value

Industrial Revolution

The Industrial Revolution was a period from the 18th to the 19th century where major  changes in agriculture, manufacturing, mining, and transport had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom, then subsequently spreading throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. Starting in the later part of the 18th century there began a transition in parts of Great Britain's previously manual labor and draft-animal–based economy towards machinebased manufacturing. It started with the mechanization of the textile industries, the development of iron-making techniques and the increased use of refined coal. Trade expansion was enabled by the introduction of canals, improved roads and railways. The introduction of steam power fuelled primarily by coal, wider utilization of water wheels and powered machinery (mainly in textile manufacturing) underpinned the dramatic increases in production capacity. The development of all-metal machine tools in the first two decades of the 19th century facilitated the manufacture of more production machines for manufacturing in other industries. The effects spread throughout Western Europe and North America during the 19th century, eventually affecting most of the

world, a process that continues as industrialization. indus trialization. The impact of this change on society was enormous.

INDUSTRIALIZATION IN INDIA India opens the gate for industrialization and globalization in 1991. Since then Indian economy has increased many folded. The economy of India is as diverse as it is large, with a number of major sectors including manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a major component of the Indian economy, as over 66% of the Indian population earns its livelihood from this area. However, the service sector is greatly expanding and has started to assume an increasingly important role. The fact that the Indian speaking population in India is growing by the day means that India has become a hub of outsourcing activities for  some of the major economies of the world including the United Kingdom and the United States. Outsourcing to India has been primarily in the areas of technical support and customer services. In Purchasing Power Parity GDP, the figure for India was 1.5 trillion US Dollars in 2008. The per capita income of India is 4,542 US Dollars in the context of Purchasing Power  Parity. This is primarily due to the 1.1 billion population of India, the second largest in the world after China. In nominal terms, the figure comes down to 1,089 US Dollars, based on 2007 figures. According to the World Bank, India is classed as a low-income economy. Other areas where India is expected to make progress include manufacturing, construction of ships, pharmaceuticals, aviation, biotechnology, tourism,

nanotechnology, retailing and telecommunications. Growth rates in these sectors are expected to increase dramatically. Today India’s GDP ( PPP) is $2600 with the export of $126 Billion and Import of $ 187.9 Billion. If we take the main manufacturing industry it include:Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and services. services.

RESEARCH OBJECTIVE The study has been done by undertaking following objective: 

 

To find out the leader in semi premium range of whisky To understand the actual market size of the industry specially in the particular  segment and the growth factor  To make a strategy for developing a new liquor brand To provide suggestion to overcome the adversity

Now as the objective of the study is clear now, let us talk about the finding and conclusion of the project. But first go through the whole study and understand different product in liquor and the industry type.

RESEARCH METHDOLOGY Research  – Research is common parlance refers to a search for knowledge. The Advanced Learner’s Dictionary of Current English lays down the meaning of research or  inquiry specially through search for new facts in any as “A careful investigation or inquiry branch of knowledge” of knowledge” According to Redman & Mory “A systematized effort to gain new knowledge.” Research Methodology- It is the way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher  in studying his research problem along with the logic behind them.

Types of research Design:1. Descriptive Research Design – Descriptive research studies are those studies which are concerned with describing the characteristics of a particular individual, or of a group.

2. Hypothesis Research Design – Hypothesis testing research studies (generally known as experimental studies) are those where researcher tests the hypotheses of  causal relationship between variables. 3. Exploratory Research Design - Exploratory research studies are also termed as formulative Research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of o f developing the working hypothesis from and operational point of view. The major emphasis in such studies is on the discovery of  idea and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of problem under  studies.

Sampling- Sampling may be defined as the selection of some part of an aggregate or  totality on the basis of which a judgment about the aggregate is made. In other words, process of obtaining information about an entire population by examining only a part of it. In most of the research.

Types of sampling:1. Systematic Sampling- The most practical way of sampling is to select every ith item on a list. This kind of sampling is known as systematic sampling. 2. Stratified Sampling- If a population from which a sample is to be drawn does not constitute a homogeneous group, stratified sampling technique is applied in order to obtain representative sample. 3. Cluster Sampling- If the total area of interest happens to be big one, a convenient way in which is sample can be taken is to be divided into smaller non-overlapping areas a reas called cluster known as cluster sampling. 4. Non probability sampling- In case of non probability sampling it is considered appropriate to use a random selection process where the probability of each cluster  being included in the sample is proportional to size of the cluster. VARIOUS PARAMETER USED IN RESEARCH Research Design – Descriptive Data Source - Primary & Secondary data Research Instrument – Questionnaire Types of Questionnaire - Structure and non-disguised Sample Plan – Delhi, NCR Sample Size – 100 Sampling Procedure - Non Probability sampling(Judgment sampling)       



Sampling method - Personal survey method through Preparation of  questionnaire

SOURCES OF DATA PRIMARY DATA The primary data consists of original information for the specific purpose at hand. It is first hand information for the direct users of respondents. The tool used to collect the data may vary and was collected through various methods like questionnaire, personal interview etc. The sources from where and from whom I have collected my primary data are:•

Direct interview of retailers and distributors

•

Direct interview of consumer of alcohol

•

Through questionnaire

•

Through observation

SECONDARY DATA Secondary data is the data which has already been collected and assembled. This data was available with the companies or firms and it was collected from news papers, periodicals, magazines, websites etc There are various sources from where I have collected the secondary data are:-

•

Website

•

Liquor journals like AMBROSIA

•

Newspaper 

•

Articles

•

From company data warehouse

LIMITATIONS During the process of a research a person comes across certain restrictions certain limitations. Some of these limitations are overcome while come have to be overlooked for the smooth conducting of the research. Some of these restrictions are: 





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Liquor is such a product that the wholesaler, retailers and consumer fear to come out with information. Due to the wide area of the markets, it was impossible to cover each and every retail shop, hence only few shops were covered. The project has to be completed in 8-10 8 -10 weeks, which is not enough time to cover the market. So time was the major constraints in conducting the study.

In this study it is not possible to collect the opinion of all customers owing to personal constraints. So the assumptions are drawn on the basis of the information given by the respondents.

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The study needs to complete within a specified time and in restricted areas. So the findings cannot be generalized as a whole

INTRODUCTION TO LIQUOR INDUSTRY THE LIQUOR INDUSTRY IN INDIA

In India, ‘drinking’ has remained a bad word, clubbed with the other vices. While the beer and liquor market continues to grow at an impressive rate even against ag ainst an economic recession, the social stigma remains in place , which manifests itself in antigrowth state policies. Domestic Industry

However, the Rs. 60.0 Billion organized beer and liquor industry has been growing at an impressive rate. In sharp contrast to the trend the world over, beer is losing ground to hard liquor in India. Amidst beers, the current trend is that lager beer is giving way to strong beer. Even as the liquor manufacturers could hope to garner the people who are shifting from beer to liquor, there is a vast country liquor market and a sizable grey market to contend with. United Breweries (UB), Shaw Wallace and McDowell (part of the UB Group) presently dominate the liquor and beer market. The market on its part is set to undergo a sea change with the arrival of MNCs. The removal of quantitative restrictions (QRs) on the impo import rt of bott bottle led d alco alcoho holilic c beve bevera rage ges s only only make makes s the the comp compet etit itio ion n toug toughe her. r. The The MNCs MNCs look looked ed forw forwar ard d to good good busi busine ness ss afte afterr the the remo remova vall of QRs QRs but but the the

Government nullified it by slapping new taxes. The foreign bottle, therefore, remains as costly as ever. LatestTrends

To survive in the highly competitive environment, the MNCs as well as the domestic majors are coming up with various strategies. Acquisitions and alliances appear to be the order of the day. Several such deals are already underway while more are in the offing. The domestic majors are also reorganizing their operations so that they can forge a deal with an MNC if the need arises. For instance, UB, which recently took up a major  revamp, has said it is willing to offer a 25.0 percent stake to multinational multinational liquor major. Another trend that seem to be catching up is the consumption of “Coolers” by the discerning connoisseurs. “Coolers” is typically a cold drink (or cocktail), which is often a mixture of white wine and fruit juice. As of now there is no definitive data available on the consumption front for “coolers” either globally or locally. But the fact that this finds mention in most of the wine and recipe related sites helps us to arrive at the conclusion that the trend of consuming “coolers” in its various combinations is indeed catching up.

ProblemAreas

What plagues the industry most is a very complicated set of laws and taxes. Each state has a different excise duty structure, import and export levies and other regulations regarding licensing fees and sales of new brands. This puts tremendous pressure on the industry players. They cannot transport their products from a market that has excess capacity to one where there is a short supply. The taxes on alcoholic beverages are some of the highest in the world. In some states it works out to as high as 200%. The brewers argue that subjecting beer to the same level of taxing, as hard liquor is uncalled for, since the alcohol content in beer is very low. They are lobbying to have beer  delinked from Imfl so that the taxes will fall, prices will plunge and consumption rise. CrystalGazing

Amidst all the competition and tough laws, the industry sees vast potential in the market. Consumption is set to rise with higher disposable incomes and standard of  living. While the beer market is expected to expand rapidly, hard liquor is not seen losing much market share, either. The alcohol industry is very important for the government. It generates an estimated Rs. 16,000 crore per annum in spite of the fact that the per capita consumption of liquor in India is the lowest in the world. The total liquor industry is worth Rs. 2,000 crore. IMFL accounts for only a third of the total liquor consumption in India. Most IMFLs are cheap and are priced below Rs. 200 per bottle. Alcohol sales proceeds account for 45% of the

total revenue collection in the country. Whiskey accounts for 60% of the liquor sales while rum; brandy any vodka account for 17% 18% and 6% respectively. MNC’s share is only 10% and they have been successful only in the premium and super premium ranges. Post WTO the government may have opened India to foreign distilleries, but the duty has been increased from 222% to 464-706%. This is due to the fact that there is a 100% customs duty, 150% contravening duty, local taxes, distributor’s margin, retailers margin and publicity charges. The cost is finally borne by the consumer. The government claims that this is being done to protect the domestic liquor industry, the domestic industry accounts for  99% of the market share. This protectionist policy could prove to be counterproductive and lead to smuggling. As of now, only 45% of the sales are through legal channels and only 25% of this is duty paid for. Within India itself, the policy of alcohol retail differs form state to state. While some states like Maharashtra. Uttar Pradesh, and Tamil-Nadu have a liberal policy, come states like Haryana and Andhra Pradesh have had very bitter experience in trying to make these states dry and have eventually had to withdraw the policy.

Whisky History - The beginning of o f Whisky What a lot of people do not know is probably that alcohol was first invented in the 10th Century by Arab alchemists. This technique was found when trying to make cosmetics and perfume as Arabs do not really have the need to drink alcohol. But soon the techniques where taken to Spain and then spread throughout Europe. Two Century later farmers, monks and university scholars where making alcohol from grape and grain or really any produced produ ced that were available to them with ease. Over in Ireland at this time monks really became the first to distil what we know as whisky when they used fermented barley. The timing of this was very vague and is believed to be around the middle of the 11th Century. Over this time with the travellers going between Ireland and Scotland this process spread quickly and whisky was starting to be produced by all the local farmers. farmer s. This is when I would say whisky finally came to Scotland.

Other facts regarding the history of whisky. People will always argue about where whisky was invented. Scotland or Ireland? Well distilling was brought to Ireland by St. Patrick in 432AD, but the first written recording of  it being sold was in Scotland 1494 and it soon became widespread as knowledge spread on how to distil whisky and soon afterwards nearly every farmer in Scotland became a maker of whisky. As you can see there is a lot of time between the two dates. The Celts could be the first to produced whisky as they named their liquid usquebaugh

which means ‘water of life’ and the word whisky also comes from the gaelic word 'Uisga'. In the early years of whisky there was no period of ageing and after a fter the whisky was distilled it was consumed. So the whisky had a raw taste. It was then discovered by accident when a cask was forgotten about in the mid 18th century and when the owner  of the cask tasted the whisky he found that the whisky mellowed after ageing thus the process of ageing began and why we have whisky maturing now for years just to have the correct taste that we all love. At the start of the 17th Century whisky distilling in the Scottish Highlands was massive with nearly every farmer joining in with the making of whisky. This was because the crop was easy to produce (barley and oats). This was when whisky became massive in Scotland, but really was only sold to local people in each of the farming communities. But then came the Act of Union. In 1707 and the Act of Union, Scotland and England En gland join parliaments and soon after  taxes were introduced on distilleries and malts. Of course this did not go down well and a lot of illegal whisky was beginning to be produced. But more penalties were brought in to reduce this illegal trade and smuggling of whisky. whisky . The penalties where very steep and in a very short space of time this practice nearly disappeared. It was not until the late 1700’s when whisky became very profitable because of the improving farming methods. So with all the distilleries at this time present in the Highlands of Scotland and the main population in Scotland being in the Glasgow and Edinburgh area, distilleries began to be built within this area. This would help get the whisky to the marker quicker as the transport network was very poor in these days. But with taxes very high still and so many costs involved it was hard to keep this as a profitable business. So illegal distilling was still happening and with the government really cracking down on this production the ‘smugglers’ tended to move all there distilling production to small islands around Scotland where they were wer e very unlikely to be discovered. discovered . It was not until excise act of 1823 when taxes fell with the reducing of duty was reduced by 50%. This cut down massively the operations by smugglers and the whisky industry became legal once again. Generally whisky was really only sold within Britain, but as time when on it spread around the world and is sold in most countries. Also with it being sold worldwide other  countries producing there own whisky. Hence why this website is about all the whiskies in the world and not just relating to whisky in Scotland and Ireland. With the history of whisky very vague it really has been adopted by Scotland and is one of Scotland biggest export with it being comsumed in nearly every country in the world. Over the coming years the whisky industry will keep growing and the making of this site all help the process.

With regards to Irish whisky they have some amazing brands and deserve so much credit. There exports are always growing, and the merging of certain distilleries this will keep growing also. There is such a large market place for whisky that there is enough room for everyone to take a slice of the action. My own thoughts are Scotland and Ireland are both massive within the whisky industry and both have to keep growing

Indian whisky and Scotch whisky The drinking of Scotch whisky was introduced into India during the nineteenth century, during the period of the British Raj. Scotch style whisky is the most popular sort of  distilled alcoholic beverage in India, though India has traditionally been thought to lack a domestic drinking culture. Whisky, however, has become fashionable for wealthier  Indians, and as such the market for whisky among affluent Indians is one of the largest in the world. 90% of the "whisky" consumed in India is molasses based, although India has begun to distil whisky from malt and other grains. Brand names of Indian molasses whisky, including "Bagpiper", "McDowell's No. 1", and the partially malt based "MaQintosh" suggest that the inspiration behind the Indian whiskies is Scotch whisky, despite these products being chiefly made from molasses.

Indian Whisky Brands • • • • • • • • • • • • • • • • • • • •

Mcdowell's No.1 Signature Bagpiper  Seagrams Blender's Pride Royal Stag Imperial Blue Royal Challenge Director's special Colonel's Special Officer's Choice Solan No. 1 Black Knight Red Knight Aristocrat Binnie's Fine Whisky Green Label Senate Diplomat Delight Fine Whisky Malabar Malt Whisky

•

Cosmopolitan

THE INDUSTRY STRUCTURE With a size of over 159million cases in fiscal year 2009(each case has 12 bottles, each containing 750 ml of liquor), the IMFL industry can be broadly classified into products based on Extra Neutral Alcohol (ENA) and Rectified Spirit (RS). ENA-based products, which are of better quality and have a longer shelf life, are the focus of main players like the UB Group and Shaw Wallace. The low-priced RS segment is quite price-sensitive and characterized by the presence of a number of small players. The IMFL market is categorized primarily into whisky, brandy, rum, vodka and gin, with market share heavily skewed towards whisky. DIFFERENT LIQUOR WHISKY BRANDY RUM WHITE SPIRIT

PERCENTAGE% 58 17 20 5

The industry has been witnessing an annual growth rate of around 10-12% over the past five years. Last year (2009), the market grew at the rate of 10-12%.

Key drivers for growth of liquor consumption in India

Economic expansion and increasing urbanization is driving the emergence of a larger  middle class that increasingly appreciates premium goods and services, including high end spirits, and is willing to pay for it.

INCOME GROWTH 

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India is one of the fastest growing economies in the world with GDP growth of  9% & 6.8% over the last two years. Per capita income has increased from US$ 450 in FY01 to an estimated US$ 781 in FY09 Growth in per capita income to drive drive discretionary income growth at much higher  pace than the GDP growth, boosting demand for lifestyle products including clcholic beverages Rural economy is likely to see big upsurge in income levels due to various government initiatives

INCOME DISTRIBUTION MILLION HOUSEHOLD

 YOUNG DEMOGRAPHICS DEMOGRAPHICS   

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More than 60% of India’s population is in the age group of 15-64 Nearly 485 million people in the drinking age Another 150 million are likely to be added to this target population in the next 5 years Following these favorable demographics, demand for alcoholic beverages is set to rise

UNDERPENETRATED MARKET SPELLING HUGE GROWTH POTENTIAL 

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India’s per capita consumption of alcoholic beverages is among the lowest in the world A small increase in per capita consumption to significantly alter industry growth, given the large population base

REGION WISE CAGR ALCOHOL SALES GROWTH FOR LAST 10 YEARS

India is the fastest growing liquor consuming market in the world and offers tremendous growth potential in future

GROWTH IN IMFL CATEGORIES

The whisky market is further classified into categories like medium (cheap), regular, prestige, premium, super deluxe whiskies, and Scotch whisky. The regular segment is the largest, constituting nearly half the volume of the total whisky market.

The Indian liquor industry can be analyzed by segmenting into 3 parts: 1. Country Spirit 2. Indian Made foreign liquor  3. Foreign Liquor  1. COUNTRY SPIRIT: This is the unorganized sector occupying about 70% of the liquor market. Country spirits are distilled spirits mixed or unmixed with spices or other ingredients in small quantities to import taste and aroma. This spirit is most common among the lower class; it is manufactured by local methods and has local loca l names the most common being Tharra. 2. INDIAN MADE FOREIGN LIQUOR: This liquor is not the contemporary Indian liquor. In these category products like whisky, rum, brandy and vodka are there. British’s had brought in this liquor to India later they set up distilleries and brewery to manufacturer it in India. In post independence period there were 28 distilleries and 5-6 breweries. Today there are 233 distilleries and 75 breweries in India. This shows the tremendous growth and acceptance of IMFL brands in India. 3. FOREIGN LIQUOR: This is the imported liquor includes Beer and IMFL brands but the most common is scotch. Imported scotch is in great demand in India but the Indian. Govt. bans the import of bottled scotch whisky, though a limited quantity can be brought in for duty free shops, five star’s hotels and in bulk for local bottling by joint ventures.

SUBCATEGORIES WITHIN WHISKY MEDIUM REGULAR

GROWTH RATE

KEY BRAND

46 -3

PRESTIGE

11

PREMIUM

18

DELUX SCOTCH

65 -15

HAYWARDS WHISKY DIRECTOR’S SPECIAL,GILBEYS GREEN/WHITE,BAGPIPER McDOWELL No.1,ROYAL STAG WHISKY,BAGPIPER GOLD WHISKY PETER SCOT, ROYAL CHALLENGE ANTIQUITY,SINGLE MALT BLACK DOG, 100 PIPERS, LONG JOHN, JOHNIEE WALKER

The Scotch segment consists of two categories - Bottled in India (BI) and Bottled in place of Origin (BO). Bottled imports of Scotch are still not permitted, but bulk imports are allowed, at import duties of approximately 240%. The official figure of the number of  BO Scotch sold is 85,000 cases per annum. While estimates for the BO Scotch sold through legal channels stood at 110,000, smuggled imports have been estimated at between 300,000 and 500,000 cases per annum. Having signed the WTO agreement, India will have to allow bottled imports of Scotch and reduce duties to around 150%, in a couple of years.

The liquor industry in India is constrained by a multitude of factors: Capacity Restrictions The industry is not allowed to expand without the prior approval of the Central government, as it among the few industries still under the licensing policy. In a liberalized scenario, when molasses have been decontrolled and for the brewery sector  too, there is no shortage of domestically available hops, restrictions on new capacities make little sense. State governments have a part to play as well, since companies have to get their approval too before commissioning a unit. u nit. However, the situation has changed with the Supreme Court ruling designating alcohol as a State subject. It is expected that companies will no longer face problems on fresh capacity creation.

High Duty Structure The manufacture of IMFL is subject to government licensing, while levies on sales are a State subject. The States earn a significant portion of the revenues from liquor. In some States, the duty is as high as 200%. The duty structure varies so much with each State that for a company operating at the national level, it is like dealing with 28 countries. Such duties (including special levies on inter-State sales) have resulted in a distributed manufacturing base and unique market characteristics for each State. Market sources feel that since States are strapped for funds, adverse changes in policies for the alcohol industry are unlikely to happen.

Prohibition Another problem that the industry faces is that of prohibition. Being a major votecatching weapon, prohibition has played havoc with the profitability of many breweries and distilleries. Examples of States clamping prohibition in the past are An dhra Pradesh and Haryana. Gujarat is another total dry State.

Ban on Advertising One major restriction throttling the industry is the ban on advertising. Some States have banned even surrogate advertising of, say, sodas and lemonades. With none of the State-run television and radio networks accepting liquor advertisements, advertising is done through private TV channels. Other media have been sponsorship of sports events, and contests. Recently, advertising on private/cable television channels has also been banned.

The Black Market In any industry where there are restrictions, prohibitions and controls, a black market thrives. So too, in the liquor business.

Fragmented Structure One fallout of the various restrictions is that, except for a few brands, the liquor market is fragmented. Nearly 40% of it is serviced largely by regional players. In the case of  beer industry, where volume matters more than price, a mere regional presence is a disadvantage. Regional presence and the consumer aversion to new brands have resulted in most companies avoiding the risk of introducing new brands. Instead, they concentrate on brand extension, trying to build upon existing brand values. Brand extensions in the Shaw Wallace stable include Haywards, Haywards 2000 and 5000 beer. Similar are the brands Kalyani Black Label and Kalyani Strong in the UB Group’s stable. Beer sales are also affected by seasonality, with the offtake being generally higher in summer. Also, the restrictions on production capacity and inter-State movement usually cause supply to fall short of demand.

Distribution and Trading Restrictions The distribution of liquor is controlled in many States, except in Maharashtra, West Bengal and Assam, where companies can sell their products freely in the open market. Distribution controls take various forms like auctions, open-market system, government--controlled markets and the Army’s Canteen Stores Department. Under the auction system, the government fixes a floor price for the shops and the bidders have to quote prices. The licence would go to the highest bidder, and the bid price would have to be paid in equated monthly installments. This system operates in Punjab, Rajasthan, Bihar, Orissa, Uttar Pradesh and Madhya Pradesh. States following the open-market mode gives substantial leverage to the IMFL marketing company to choose its distributor and to determine pricing and discounts. In the case of distribution through government channels ch annels and distribution rights through the auction mechanism, strong distributors exert influence on the margins of the IMFL manufacturer. In the government-controlled system, the distribution of liquor is done through State agencies such as TASMAC in Tamil Nadu, BEVCO in Kerala, the Andhra Pradesh Beverage Corporation in AP, the DSIDC In Delhi, and so on. Since these agencies are sole wholesalers, they also have the ultimate say in deciding on the entry of a brand into the State. These restrictions seriously ser iously limit the free availability and marketability of a company's products.

IMFL sales in different States, classified on the basis of the distribution channel accessible to the manufacturer, are given below: OPEN MARKET AUCTION MARKET GOVERNMENT CONTROL PROHIBITION STATES

MAHARASTRA,WEST BENGAL,J&K,GOA,ASSAM,MEGHALYA,TRIPURA,ARUNACHAL PRADESH UP,RAJASTHAN,MP,BIHAR,PUNJAB,CHANDIGARH,HARYANA TAMILNADU,DELHI,KERALA,ANDHRA PRADESH GUJARAT,MANIPUR,MIZORAM,NAGALAND

South India is the largest consumer in the Indian liquor market, with Andhra Pradesh showing the highest consumption, at 15 mn cases, and a growth rate of 100%. In Kerala too, the consumption of liquor is high. Consumption in South India has been growing at a very high rate, compared to North India, which grew at 2% last year. The respective growth rates for different regions are:

The State-wise consumption of liquor is : Andhra Pradesh (15 mn cases), Bengal (1.7 mn), Assam (1.5 mn), Bihar (2 mn), Mumbai (2 mn), Maharashtra (2 mn), Delhi (2 mn), Haryana (2 mn), Punjab (2 mn) and Rajasthan (3 mn).

Retailers' Grip There are an estimated 25-27,000 licensed retail sales outlets in the country for  alcoholic beverages. Retailers have a major role in popularizing and making available a brand, as they have a virtual monopoly over the distribution of liquor in each State. The absence of self-service counters also limits customer choice. There are also restrictions on the business hours of these outlets as also their location vis-à-vis schools, colleges and so on, apart from where they can procure their requirements. There are restrictions in selling through restaurants and hotels too.

RECENT TRENDS Of the few industries that have seen a no-holds-barred entry of MNCs, the alcoholic beverages industry perhaps tops the list. Most global liquor majors have set up shop in India, over the past five years, and have actively pursued market opportunities, despite debilitating constraints. This is because the liquor industry, witnessing a declining trend worldwide, has shown robust growth in India, bucking the recessionary trends in the economy and the anti-growth liquor industry policy. Another advantage is that India offers enough raw materials like molasses, barley, barley , maize, potatoes, grapes, yeast and hops. MNCs face numerous hurdles. They have been hampered by the regulatory framework and distribution hurdles. Most of the MNCs are confined to the premium segment and denied a level playing field. The Foreign Investment Promotion Board (FIPB) subjects the MNCs to a capacity ceiling of 10,000 kl (kilolitres). Some companies, like the International Distillers India (IDI), have cleverly sidestepped this, by contract manufacture, since there is no ban on outsourcing. MNCs also face the problem of  unfulfilled export obligations arising from the imposition of the foreign exchange neutrality norm at the time of the FIPB approval. They are lobbying to get the condition relaxed. The WTO-mandated removal of import restrictions by April 2001 will permit easy availability of premium brands. Further, custom duties on alcoholic beverages have come down rapidly in the last few years, from 400% to 230%. As per the WTO commitments, duties have to be phased out to 150% by 2003. This is likely to open the floodgates for alcoholic beverages produced in other countries, particularly so in case of  Scotch whiskies, the consumption of which has decreased substantially globally due to a growing apathy to hard liquor. The Scotch MNCs are anxious to locate new markets for their surplus whiskies, and they seem to be eyeing the only positive growth market, India. But India's custom duties are still quite high and would ensure that the MNC products are priced out of the market. India is seeing an increasing trend of white spirits being adopted over brown spirits. Though key brands in the white spirits segment have been growing at a healthy rate of  20-30%, their total size is small, compared to the overall liquor market. Exports have been minimal because of the vast market potential within the country. Shaw Wallace accounts for the largest share in the liquor export market (around 50%). Companies have been trying to boost exports through technological tie-ups.

PLAYERS IN THE LIQUOR MARKET The UB group, operating through McDowell & Co. and Herbertsons, are the leaders in the IMFL market, followed by Shaw Wallace. Mohan Meakin and Jagatjit Industries (both located in the North) are the other important domestic companies, though both are considered to be relatively passive. COMPANY HERBERTSONS Mc DOWELL & CO.

MARKET SIZE (MN CASES) 8 17

SHAW WALLACE UDV

9 3

BACARDI SEAGRAM

0.8 4

BRANDS BAGPIPERS Mc DOWELL No. 1, DIPLOMAT DIRECTORS SPECIAL GREEN LABEL, SMRINOFF BACARDI RUM ROYAL STAG

COMMON TERMS IN ALCOHOL Ageing Process where a whisky spends time in oak barrels to become the whisky flavour we know. Very important part of the whisky making process. The whisky stays in the barrels till it has reached the correct age the distillery requires to receive the best taste. Time in the bottle does not count to the age of the whisky.

Alcohol The amount of ethyl alcohol obtained by fermentation. The strength of the alcohol changes depending how long the it has been distilled. Normally distilled spirits are sold with an alcoholic strength of 40 percent alcohol.

Blended Whisky Mixing different grains to produce the whisky taste.

Cask A barrel which is usually made of oak, used for the ageing of whisky.

Charring Charring(firing the barrel) the inside of a new barrel to give the whisky flavour as the whisky ages. This can also be called "toasting".

Distillation This is done under heat where the alcohol can be collecting after vaporizing because water will vaporize at a higher temperature when heat is used. The alcohol is then condensed back to liquid form.

Fermentation Yeast consuming sugars and converting them into alcohol & carbon dioxide.

Grist Ground grains used for whisky making.

Malt The name given to a grain which is usually barley germinate by steeping it in cold water. In the end more alcohol will be producted because the grain is high in sugar. suga r.

Marrying Allowing a blended whisky time in large containers which can be oak or stainless steel. This happens before the bottle of the Whisky

Mashing Cooking grains to release the starch content.

Mouth Feel The effect that a whisky has on the palate of the mouth. Lingering is just one effect whisky can have when your are tasting

Neat A whisky served neat is when no water or other liquid is added and that includes no ice.

Nose The aroma of the whisky

Oak The wood used to make barrels for ageing whisky. This is how the whickey receive it's flavours and develops it's smoothness, finesse, colour and tannin.

Pot Still The traditional style of still used for distilling whisky. The Pot Still operates in a batch distillation process.

Rocks A whisky served "on the rocks" is not diluted, and served over ice cubes.

Tails This is low in alcohol and is the "tail end" of the distillation. Can be known as feints.

 Yeast This is a living organism that is vital for the fermentation process. It feeds on sugar, and produces alcohol and carbon dioxide as by-products, but is so important to the whisky making process.

DIFFERENT ALCOHOLIC DRINKS 1. WHISKY Whisky is amongst the most popular distilled liquor known all over the world. It is made of malt and molasses spirit, which is obtained by distillation of mash or c ereal grains like maize, rice barley malt. Better the malt better the whisky. Large quantities of IMFL are manufactured in India and is the maximum sold alcohol. The content is whisky is 42.8%.

2. RUM Rum is a distillate from the fermented juice of sugarcane of molasses. RUM is characterized with its taste and aroma. Best rums are known to come from Jamaica, West Indies etc. The alcohol content of Rum is 42.8%.

3. BRANDY Brandy is generally obtained from fruits, thought the most commonly used fruit is grapes. The best quality of brandy is cognac, which is made in France.

4. VODKA Vodka is a sprit resulting out of distillation at very high proof. This results in virtual NPN existence of flavor in the resulting sprit,. This is neutral, even after dilution required for  palpability. The traditional source of making vodka has been potatoes. potatoes.

5. BEER Beer is not a distillate like the drinks mentioned above but it is a beverage made by fermentation of malt obtained form carbohydrate rich material barley. Hops are used to add taste while yeast is used to ferment the beer. Beer is to two types: 1. Pilsner or Lager  2. Draught Lager Beer is the most common bottled Beer found in almost all the retail shops in the country. This Beer is served chilled and is of two types. Mild Beer alcohol content 6.75%. Strong Strong Beer alcohol content 8.75%. Draught Beer is served chilled in mugs and is generally available in Pubs only. It can be stored for 72 hours only and does not have any brand name. Mohan Meakins supports Draught Beer.

6. GIN: It is sweetened or unsweetened grain spirit flavored with essential oil juniper  berries and some other product prod uct including angelica roots, orange peel, cardamom, bitter  almonds give it a kick and taste.

INTRODUCTION ABOUT COMPANY

Simbhaoli Sugars Limited (SSL), formerly known as The Simbhaoli Sugar Mills Limited (SSML), a 75 years old company is reinventing itself as a growth oriented, innovative and customer facing enterprise. A culmination of a process that started at the turn of the century, SSL has transformed itself into a leaner, fitter and stronger corporation. The Company has evolved a de- risked growth model that mitigates the volatility of the commodity market by investing in the diversified revenue streams, stringent quality and branding, in a cost effective manner. Origin

Simbhaoli Sugars Limited (SSL) was established as a partnership firm in 1933 with a 400 TCD (tones of sugarcane crushed per day) sugar unit at Simbhaoli in Western Uttar Pradesh region of India. It was incorporated in 1936 as a private limited company. The company went public in 1989 and has followed a stable growth strategy in its business. In the year 1992 it acquired a distillery and converted its Simbhaoli sugar plant into a sugar complex.

As we celebrate the 75th birthday of our Simbhaoli Sugar plant, its matter of great pride to look back on the defining de fining milestones in our seven decades plus existence. e xistence. Established by Sardar Raghbir Singh Sandhanwalia in the village that goes by its name, Simbhaoli was one of the earliest sugar plants to be set up in western Uttar  Pradesh. Over the years, SSL set industry trends for technology, professional management, product quality, research and innovation efforts, and covenant with

farmers, corporate social responsibility initiatives and welfare schemes for  employees. Vision

"To be an environment friendly, stakeholder centric, innovative, professionally managed, integrated sugar refining company with low cost global technologies producing range of value added products."

Operating Segments Sugar 

SSL has three sugar plants (Simbhaoli and Brijnathpur, western UP and Chilwaria, eastern UP) with a combined, crushing capacity c apacity of 20,100 TCD. It is capable of  producing a wide range of world-class sugars i.e. white crystal refined sugar, pharmaceutical grade sugar, EU grade sugar (foe exports), superfine sugars, sugar  cubes and candy sugar. Distillery

SSL has three alcohol distilleries (at Simbhaoli, Chilwaria and Brijnathpur) with a combined capacity of 210 kilo liters of alcohol/ ethanol per day (KLD). It includes 180 KLD of ethanol/ rectified spirits/ extra neutral alcohol (ENA) capacities. Simbhaoli distillery is a potable distillery capable of producing a million cases of quality potable spirits. Cogenerated Power 

Simbhaoli and Chilwaria sugar complexes house bagasse based surplus cogeneration facility of 30 MW/ hour. Biomass-based co-generation co-gene ration projects are accredited by UNFCCC under the Clean Development Mechanism programme. Bio-Manure

Each of the sugar complexes house bio-manure facilites with aggregate capacity of  44,000 MTPA. The bio-manure is distributed both to farmers and domestic consumers across northern India. The Company's research has shown that the use of organic manure increases crop yields. Further, the Company distributes the organic manure to its cane farmers at cost or below, for increasing the farm productivity.

ALCOHOL

Background of Alcohol Business

The first alcohol distillery of SSL was established in 1943 by the same promoters as an independent company in the name of Simbhaoli Industries Pvt. Ltd. It was merged with SSL in 1992. This became the foundation of the new line of business for the Company.

AGRI INITIATIVES

The Company has an over 75-year track record of engaging with the rural communities in improving their quality of life. During this period, It has made purposeful interventions in infrastructure development, education, healthcare and in generating employment opportunities, specially in the vicinity of its sugar plants and sugarcane catchments. Computerization of the cane procurement and payments system commenced way back in 1988. Company's Farmers Service Center, cane purchasing centres and offices have direct connectivity with farmers, thereby delivering services at their door-step. SSl has over seven decades track record of agri- initiatives in the fields of education, healthcare and infrastructure development in rural areas in the vicinity of Simbhaoli sugar plant. Improvement in the sugarcane yields is being emphasized by improved agri practices and seed replacements. This will benefit both the farmer and the Company. Schemes are implemented alongwith banks having presence in the area to facilitate credit to farmers for meeting their credit requirements for these purposes. SSL is already acting as a catalyst to rural growth through channel partners with various banks in its cane areas. SSL is proposing multi cropping of a number of crops including oil seeds with sugarcane cultivation in an area of over 10,000 hectares which will result in an increase in the earnings of farmers by 50 to 75% in its reserved cane area. The Company is leveraging its strong relationship with over 1,20,000 growers to develop various Agri products in fertile areas of all the three sugar units. With the growing urbanization and increase in personal house hold earnings, Agri initiatives are in sync with the present retail and farming revolution in the country.

Empowering Farmers through Technology Simbhaoli Sugars's aim is to elevate crop quality and productivity by empowering farmers to adopt the best agricultural practices. The sugar units are working closely with their farmers, providing them with valuable advice on each facet of the crop cycle including agricultural advice on soil and seed management, fertilizer and insecticide uses, ratoon management, selection of agri inputs, maintaining the proper balance between the early, mid and late ripening varieties and harvesting cycles. In order to improve the earnings of the farmers, the Company has initiated intercropping of various other agri products along with sugarcane in the command area of it's Brijnathpur sugar  plant on pilot basis.

Sugarcane Management At SSL sugar factories, the entire system of field survey planning, bonding, scheduling of supply tickets, procurement and delivery of the harvested crop and payments has been made systematic, transparent and computerized. Payment Pa yment is credited directly in the bank accounts of farmers, thereby ensuring a speedy and fair settlement of dues. SSL is also engaged in promoting new technologies amongst cane growers. Radio base station is deployed for providing connectivity at all the divisional offices in the cane areas. This network provides all information regarding farmers at farmer service

centers. It will also help farmers to get their land holding, cane variety wise area, supply ticket details, payments and loan adjustment details. This avoids waiting in the long queues at factory gate and all the information is at the click of finger. Sugarcane Development Activities SSL sugarcane development activities include: a) Programme for Varietal Balance •

•

Switch over the area under early ripening high sugared varieties with incentives schemes on the propagation of desired varieties. Organizing programme under Institute-Industry-Interface.

b) Programme for Increasing the Yield • • • • • •

Encourage farmers for achieving higher productivity Ratoon Management in cane crop. Organising Demonstration trials at farmers’ fields. Organise training program to farmers. Arranging the facilities for soil testing, setting up mobile soil testing labs. Organising the trials on the application of micro nutrients/ bio manure.

c) Programme for Selection of High Quality Clones • •

Check the suitability of high sugared clones in the local environment. Organizing the varietals trials with variety-wise cane growth observations.

d) Effective Control Measures of Insect-Pest and Diseases Through insecticides and pesticides • • •

Arranging insecticides and pesticides to farmers at subsidized rates. Conducting various campaign time to time for effective control. Giving cash subsidy to Cane Development Council for distribution of insecticides, pesticides and agriculture equipment.

Through Biological Control e) Research and Development Programme •

Establishment of biological lab for rearing the parasite / fungal to control various borers and diseases.

f) Other Rural Development Initiatives •

Regular cleaning of drains (100 kms) at Simbhaoli sugar plant area to over come the water logging problem in the command area.

•

• • • •

Laying of Hume pipes for the repair and constructions of passage / culvert on village roads. Constructions of approach link roads. Family health camps and providing drinking water. Working towards providing micro credit to the farmers. Running a school at beginning level.

Present Activities: The Simbhaoli facility houses a distillery with a capacity of 90 kilo-litres p er day (KLD), which is capable of producing up to 60 KLD of ethanol and 45 KLD of extra neutral alcohol (ENA). The plant has a capacity to produce 1 million cases of the potable spirits. In addition, 30 MT per day of carbon dioxide is also recovered and sold. ENA is a raw material used for  manufacturing manufacturing high quality potable liquor, including whisky, rum, and gin. This potable liquor is sold in northern India under the brand names, Hunters/Simbhaoli XXX (rum), Seven Knights (Whisky), Seven Knights Lemon flavour  dry Gin, Gorki (Premium Vodka) and Ice Blue Tango. These brands have been developed after extensive research (product and packaging) and as per the choice and taste of consumers. Under the country liquor category the Company is creating brand awareness of its 'Dildar' brand for sale in the state of Uttar Pradesh. Raw material used in distillation process is molasses from the sugar mill and balance requirement is procured from the nearby sugar mills. Quality of the spirits is excellent as it is distilled from four columns distillation process. The Simbhaoli distillery is supplier of  bulk sprits to most of the market leaders of IMFL products in India. The technologically advanced ethanol plant is fully automated and employs the new generation molecular de-hydration sieve technology. The Chilwaria and Brijnathpur  distilleries have a capacity to produce 60 KLPD of fuel ethanol with an optionality to produce high quality spirit of same quantity. Simbhaoli distillery has a maturation capacity of 6 lakh liters of spirits for manufacturing of premium bottled liquor. Presently, it is selling the potable liquor in the states o f Uttar  Pradesh, Rajasthan, Haryana, Kerala, West Bengal, Nagaland, Punjab, Delhi etc. It is also catering to the requirements of paramilitary forces. The market acceptability of the SSL spirit brands is encouraging. Now planning to re- enter the market with premium brands and also propose to introduce White Rum, Dark Rum in semi premium segments.

FUEL ETHANOL ETHANOL- AN EMERGING DIVERSIFICATION Ethyl alcohol is one of the co- products of the sugar industry. It is either made directly from sugarcane or from Molasses, which still contain some sugar, but this sugar cannot be extracted using current technologies. These Molasses are fermented with yeast to give ethyl alcohol. The mixture is then distilled to separate the alcohol from the mixture. Thus separated alcohol is about 95% pure and finds uses in pharmaceuticals, potable uses, industrial uses, and it can be further purified to about 99.5% purity to give Fuel Ethanol

Fuel Ethanol SSL has three fuel ethanol plants having an aggregate capacity of 180 KLD. The technologically advanced ethanol plants are fully automated and employ the new generation molecular de-hydration sieve process. These plants have the option to produce ENA with minor modifications, if desired. The fuel ethanol is supplied to petroleum marketing companies in India. The ethanol-blending program announced by the Government of India in December 2002 has opened an additional revenue stream s tream for the sugar industry in India. Currently, Curre ntly, only 5% ethanol-blending of fuel is mandated by the central government in entire country (other than North Eastern States), which would be increased to 10% from October, 2008. This presents a large potential demand for ethanol in India The Ministry of Petroleum has estimated demand for ethanol-blended fuel to be approximately 1.2 billion litres at 10% blending in the year 2008-09.Presently, at 5% blending the ethanol demand is estimated at 600 mn ltr per annum.

Global Scenario: Various Governments are providing incentives to expand Ethanol production and use. Brazil and United States use large quantities of Ethanol as a fuel. Some Canadian provinces promote Ethanol use as a fuel by offering subsidies of up to 45 cents per gallon of Ethanol. In France, Ethanol is produced from grapes that are of inferior quality for wine production. Prompted by the increase in oil prices in the 1970s, Brazil introduced a program to produce Ethanol for use in automobiles in order to reduce oil imports. Brazilian Ethanol is made from sugar cane. Pure Ethanol (100% Ethanol) is used in approximately 40 percent of the cars in Brazil. These cars are known as Flex Fuel cars since they provide an option of using petrol or Fuel Ethanol or both in any proportion. The remaining vehicles use blends upto 24 percent Ethanol with 76 percent gasoline. Brazil consumes nearly 4 billion gallons of Ethanol annually. In add ition to consumption, Brazil also exports Ethanol to other countries. Brazil and the United States are the largest ethanol producers, accounting for roughly

38% and 29% of the world market, respectively. In the United States , over 3.6 billion gallons of ethanol are blended with gasoline every year. On January 31, 2006 in his policy statement the US President recognized the future of ethanol as not only a blending component, but as a mixture of 85% ethanol and 15% gasoline.

Indian Scenario: The ethanol-blending program announced by the Government of India in December 2002 has opened an additional revenue stream s tream for the sugar industry in India. Currently, Curre ntly, only 5% ethanol-blending of fuel is mandated by the central government in entire country (other than North Eastern States). It is believed that they may increase this to 10% in entire Country by next year. This presents a large potential demand for ethanol in India. This, coupled with the additional demand for industrial and potable alcohol, will require sugarcane production to grow at 8-10% annually during fiscal 2005-08. The sugarcane production has grown by only 1.5% annually during fiscal 1999-2004. The Indian government has recommended that approximately 10% of all total energy produced should come from renewable sources and has made sale of ethanol-blended unleaded petrol recommendatory. The Ministry of Petroleum has estimated demand for  ethanol-blended fuel to be approximately 12 billion litres by 2007-08, which would mean an ethanol requirement of approximately 600 million litres (at 5% blending) or 1.2 billion litres (at 10% blending).

Simbhaoli Sugars foray into fuel Ethanol: The SSL has two Fuel ethanol plants having an aggregate capacity of 120 KLD. This will further go up to 180 KLD by March 2007 with the commencement of Brijnathpur Distillery. The technologically advanced ethanol plants are fully automated and employ the new generation molecular de-hydration sieve process. These plants have the optionalty to produce ENA with minor modifications, if desired, meeting the international standards. The Fuel Ethanol is to be supplied to petroleum companies in India.

TECHNOLOGY INITIATIVE DRPIE Technology In the year 2003, SSL successfully replaced rep laced the conventional double sulphitation manufacturing process at its Simbhaoli sugar plant with the revolutionary Defeco Remelt Phosphatation and Ion Exchange (DRPIE) technology. DRPIE is an internationally accepted refinery process that eliminates the use of sulphur and other  harmful chemicals. DRPIE Sugar is 100 per cent pure, refined and sparkling white totally free from suspended solids and impurities. The Company has adopted various energy economy measures, which have led to reduction in the steam consumption. Simbhaoli Distillery Division has also expanded its rectified spirit capacity to 90 Kl/day and ethanol capacity to 60 Kl/day without spending major amounts on steam generation equipments.

QUALITY CONTROL Our quality control systems extend from the laboratory to the farmland and on to the manufacturing floor. Research farms at Simbhaoli and Chilwaria gr ow specifically approved cane varieties, which are closely monitored for disease and pest resistance. The results are regularly communicated to farmers. On the shop floor, we conduct detailed analysis to measure the colour, sediment level, ash content, particle size distribution and bacteria levels in the sugar. The aim? To produce 100 per cent pure, sparkling white sugar. That’s why Simbhaoli Sugar  conforms to the European quality standards with an ICUMSA of less than 45.

INTERNATIONAL QUALITY CERTIFICATION Simbhaoli Sugars has adopted integrated management system comprising of ISO 9001: 2000 for Quality Management System, 14001:2004 for Environmen t Management System and HACCP for food safety for its Simbhaoli sugar and distillery complex. ISO 9001: 2000 is the international quality management system standard to improve customer orientation and overall quality system, ISO 14001:2004 certifies that the Company is a responsible corporate entity and respects the environmental issues, and the HACCP Certificate ensures highest product quality to all the c ustomers. It is the only sugar company in India having all the three international quality certificates in a single year. During the year 2008, the Company has got status of "Start Trading House" from the Ministry of Commerce for performing excellence in international trading.

BRAND BUILDING Trust Sugar  SSL was amongst the first to introduce branded sugar in Indian markets during the year 1994. The product brand was introduced under the name of `TRUST` in 1 Kg. and 5 Kgs consumer packs. The product is different from the other ordinary sugar in the following respect:

• • • • • • •

Sparkling white Uniform grain size Un-touched by human hands Free flowing Pure and Hygienic. Certified by FDA No sulphur is added in the processing Meets European standard of refined sugars ( can be exported to any country including European Union)

The strategy behind introduction of Trust brand br and is to offer a product to the consumer, consu mer, which meets stringent standards of hygiene, convenience and quality. The research showed that the branded sugar has a good market potential. Keeping this in view SSL introduced other sugar related products like sugar cubes, sugar sachets, icing sugar, golden brown, breakfast sugar and specialty sugars. Potable Liquor 

A comprehensive marketing policy is being pursued to mark a space in the premium potable liquor market. SSL alcohol division is taking steps to promote branding activities to strengthen its presence in the states of Uttar Pradesh, Kerala, Delhi, Punjab, Rajasthan, Uttaranchal and West Bengal. It has also entered into new markets of North Eastern States of India. SSL has a brand portfolio comprising six brands of liquor. It has added four new brands to its IMFL product basket in theyear 2007- Gorki Vodka, Seven Knights Whiskey, Seven Knights Dry Gin and Blue Tango, making the total number of brands equal to ten. Following are the premium brands under the potable liquor segment: Ice Blue Tango - This splendid Gin is mixture of high of high quality smooth spirits, natural herbal extracts and the purest pure st from of sugar syrup. This gives a youthful effect with sweet taste of orange flavour in Gin.

CORPORATE CITIZENSHIP SSL has developed the practices to fulfill its corporate and social responsibilities to various stakeholders and believes in adopting good governance, which is founded upon the principles of transparency, monitoring, accountability, growth-oriented approach, trusteeship, corporate citizenship and environmental consciousness. The corporate governance process consists of various business practices, which not only results in working towards sustainable and least risk earning model and enhancing shareholders wealth but also enables the Company to fulfill its obligations towards its suppliers, customers, employees, lenders and to the society in general. SSL corporate governance norms fulfill business ethics as an enabling and facilitating process encompassing all its functions at different levels. The management follows the policies of compliance, protection of the rights and interests, equality in dealing with all the shareholders, act as a trustee of shareholders capital, transparency in business dealings, timely disclosures, effective internal and external communication, strategic guidance and monitoring and the accountability to the Company and its shareholders.

MANAGEMENT MANAGEMENT TEAM T EAM AT SIMBHAOLI The Board of Directors of SSL is responsible for overall management, control and supervision. The Chairman and Managing director (CMD) is assisted by the Deputy Managing director (DMD), Executive Director (ED) and Director Finance (DF) for  carrying out day-to-day management under the supervision, direction and control of the Board. The Company has employed a number of professionals in various areas of  management. Mr. Gurmit Singh Mann, Chairman and Managing Director 

Mr. Mann is a member of the promoter group. gro up. He has over 42 years of experience including 34 years with Simbhaoli Sugars Limited and 8 years with the marketing department of M/s Smithkline Beecham Consumer Healthcare Limited (formerly HMM Ltd.). He has been the President of the Indian Sugar Mills Association, and Chairman of  the Indian Sugar & General Export Corporation Limited. He has been the Managing Director of Simbhaoli Sugars Limited since 1972 and became Chairman of the Company in the year 1989.

Mr. Gurpal Singh, Deputy Managing Director 

Mr. Gurpal Singh is a member of the promoter pro moter group. He has over 22 years yea rs of  experience in the management of the various functional areas of the Company and its divisions. He joined the Board in the year 1986.

Dr. G.S.C.Rao, Executive Director 

Dr. Rao, a professional, is the Executive Director of the Company. He has 29 years of  experience at senior levels. He joined the Board in 2000. He has a Masters degree in Science and a Doctorate degree in the field of sugarcane physiology and biochemistry breeding. He also holds a postgraduate diploma in management. He is a member of  sugar technology mission advisory committee and a special invitee to the governing body of the Uttar Pradesh council of sugarcane research.

Mr. Sanjay Tapriya, Director (Finance) & Company Secretary

Mr Tapriya is the Director (Finance) & Company Secretary of the Company. He has over 20 years of experience in the fields of secretarial, legal, commercial, accounts and finance with Simbhaoli Sugars Ltd. He joined the Board in 2003. He is a member of The Institute of Chartered Accountants of India and The Institute of Company Secretaries of  India. Experienced Management Team (As on December 31, 2009)

The Company is led by an experienced management team under the guidance of its Chairman and Managing Director, Mr. Gurmit Singh Mann, who has over 30 years experience in the Indian sugar industry, is ably supported by his talented executive team.

Board of Directors Name of Director

Directorship

Mr. Gurmit Singh Mann Mr. Gurpal Singh Dr. G.S.C. Rao Mr. Sanjay Tapriya Mr. S. K. Ganguli Mr. S. C. Kumar Mr. Yashwant Varma

Chairman and Managing Director/ Promoter  Executive/ Promoter  Executive, Chief Operating Officer  Executive, Cheif Financial Officer  Independent Independent/ Non-Executive Independent

Key Managerial Personnel

The Board of Directors is responsible for overall management, control and supervision. The Chairman and Managing director is assisted by the Deputy Managing director, Executive Director and Director Finance for carrying out day-to-day management under  the supervision, direction and control of the Board. The Company has employed a number of professionals in various areas of management:

Name

Functional Role

Dr. G. S. C. Rao Mr. Sanjay Tapriya Mr. Indeep Singh Bhatia Mr. Naveen Tyagi Mr. Ajay Verma Mr. R. K. Singh Mr. A. K. Srivastava Mr. S. C. Reddy Mr. Sunil K. Gupta Mr. A. P. Singh Mr. Shiv Sinha Mr. Rajiv Bhatia Mr. Dilip Jain Ms. Gursimran Kaur Mann Mr. Kamal Samtani

Chief Operating Officer  Chief Financial Officer  Unit head Simbhaoli Sugar Plant Unit head Brijnathpur Plant Unit Head, Chilwaria Plant Unit head Simbhaoli Distillery Corporate head, Technical Corporate head, Agriculture and sugar cane Corporate Head Accounts and Finance Corporate head, Cogeneration Head Marketing (Premium Spirits) Head Marketing (Sugar) Head Project Development Head Business Promotion Company Secretary

Share Holders Information Listing on Stock Exchanges Equity shares National Stock Exchange of India Ltd.

Plot no. C/1, G Block, Bandra-Kurla Complex Mumbai - 400 051. Web site: www.nseindia.com Tel No: 91-022 26598100 - 8114

ISIN Code: 270C01017 Scrip Code: SIMBHSUGAR

Fax No: 91-022 26598120 E-mail : [email protected] Bombay Stock Exchange Limited

Scrip Code: 507446

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai. Web site: www.bseindia.com Tel: 91-22 2272 1234 /33, Fax: 91-22 2272 3677 Foreign Currency Convertible Bonds Singapore Exchange Limited

ISIN Code: XS0246465560

2, Shenton Way, # 19-00,SGX Centre, 1, Singapore 068804 Web site: www.sgx.com Tel (65) 6236 8888 Fax (65) 6535 6994

Depositories

i)

National Securities Depository Limited Trade World, 4 th Floor, Kamla Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013.

Tele. Nos.:022-24994200 Fax No. 022-24972993/ 2497 Email : [email protected] Website : www.nsdl.co.in

ii)

Central Depository Services ( India) Limited: Phiroze Jeejeebhoy Towers, 28 th Floor, Dalal Street, Mumbai – 400 023.

Tele. Nos:022-2272333 Fax No.:022-22723199 Email: [email protected] Website: www.cdslindia.com

International Securities Identification Number is ISIN- INE 270C01017

COMPETITIORS PROFILE Today’s world is the competition. competition. In every filed there is competition competition and the success of  any company or product largely depends upon competition. Competition provides a good quality of product to the customer. If a company has to survive in the market, then it has to face throughout competition. In liquor industry too the competition is there. The increasing awareness and exposure to beer among consumers and the removal of  quantitative restrictions gives big boost to the beer industry. It saw the emergence of  new companies like future wine and spirit brand (P) Ltd (FWSB), set up recently by two NonNon-Res Resid iden entt Indi Indian ans s (NRI (NRI’s ’s)) from from USA. USA. ‘WHI ‘WHISK SKY’ Y’ consu consump mpti tion on in the the coun countr try y increased 12-14 % per year 

The major player in alcohol market and the competitors of Simbhaoli are as follows:-

Radico khaitan:- Radico Khaitan is one of India's oldest and largest liquor  manufacturers. Formerly known as Rampur Distillery which was established in 1943. It was only in 1999, that Radico decided to launch and market its own brands, thereby embarking on a period of phenomenal growth. To further boost its production capacity of bottled and branded products, the company co mpany has tied up with bottling units in various parts of the country.

The Brand Story Radico Khaitan Ltd today has three millionaire brands in its portfolio. Radico's flagship brand, 8 PM Whisky, launched in 1999, was a runaway success. In the first year alone, it sold one million cases - a record for any Indian or foreign brand operating in India. This also made it the first brand in the liquor industry indus try to make it to the Limca Book of  Records. The other millionaire brands are: Contessa Rum has won the prestigious Monde Selection award for its overall quality for the past p ast three executive years. It has a large market share in the defense market. Old Admiral Brandy has also won the Monde Selection award for its overall quality in 2008. Today, Radico Khaitan has brands that straddle almost every market segment - whisky, rum, brandy, vodka & gin - and price category. Our fine blends, consistent quality, distinctive

Rampur Distillery Rampur Distillery is one of the largest distilleries in India and a leading manufacturer of  Extra Neutral Alcohol (used in manufacturing Indian Made foreign Liquor) it also manufacturers Rectified Spirit (used in manufacturing of lower  segments Country Liquor) and manufacturing of Anhydrous Alcohol or Ethanol or  Gasohol (used in Petrol Mixing) and the recent addition of grain distillery . Today with a production capacity of 60 million liters p. a and with the recent addition of the grain distillery which has taken the capacity upto 90 million lit p.a it is one of the largest distilleries in the country The Unit has a series of firsts to its credit: • • •

It is the first Indian distillery to obtain ISO 9001:2000 certification t has achieved capacity utilization of over 100% in the alcohol plant It is the first environment-friendly distillery in the country

Capacity Molasses Distillery 60 million litres per annum Grain Distillery 30 million litres per annum Malt Distillery 460 thousands liters per annum The overall licensed capacity has been increased to 125 million liters per annum

Effluent Treatment Plant

The effluent Treatment Facility in Rampur Distillery is unique in nature when compared among and in the Industry. The Distillery complies with Zero Discharge concept set up by CPCB. The treatment has varied by products, which not only improves operational stability of the plants but also adds on to company's profitability. Primary Treatment of  the Effluent yields Bio Gas, which is used as fuel in Cogen Boiler to generate steam and then Power through a backpressure Turbine. The backpressure steam is used again in the Distillation Plant to produce Extra Neutral Alcohol and Rectified Spirit.

Environmentally Friendly Meeting out 100% Pollution Control norms, the Treated Effluent is not discharge d outside and in turn is mixed and cured with organic mass like Press Mud of Sugar Mills and suitable organic manures to manufacture Bio Manure or Bio Compost, a bio fertilizer used successfully in growing the crop of sugar canes etc.

Cogeneration Plant The cogeneration plant of Rampur Distillery consist of 26 MT capacity India's first stand alone Bio Gas fired steam boiler and 2 MW Turbine Generator in tandem to make Radico Khaitan self reliant on its requirement for power for its normal operation.

Backward Integration The very first backward integration project has come in the form of setting up a fully automatic 750 ml Kidney shape PET bottle manufacturing plant in low cost and tax benefited area like Uttranchal. The unit started with production rate of 85 lacs bottle per  year in October 2004 and is now geared up to produce 255 lacs PET bottles to cater  Radico's own captive consumption of approx. 150 lacs bottle per year and rest is being sold to outside clients in similar businesses. The unit has not only eliminated the pressure of PET bottle suppliers but has also provided a kind of diversified manufacturing base for future business exploration.

Major brands of RADICO KHAITAN 2007-08 13.07 million cases 2006-07 13.05 million cases 2005-06 12.00 million cases 2004-05 10.00 million cases 2003-04 06.30 million cases 2002-03 04.70 million cases 2001-02 03.6 0million cases

UB GROUPS:GROUPS:- United Spirits Limited Limited (USL) - the INR 5700 crore spirits arm of the UB Group – is India’s largest and the world’s third largest spirits company. USL was earlier McDowell and Company Limited. USL has a portfolio of more than 140 brands, of which 19 are millionaire brands* (selling more than a million cases a year) and enjoys a strong 59% market share for its first line brands in India. United Spirits recorded global sales of 90 million cases for the fiscal year that ended on March 31, 2009. United Spirits’ brands have won the most prestigious of awards across flavors, ranging from the Mondial to International Wine and Spirit Competition (IWSC) to International Taste and Quality Institute (ITQI); a total of 108 awards and certificates (as of June 2009). The company is known to be an innovator in the industry and has several firsts to its credit such as the first pre-mixed gin, the first Tetrapack in the spirits industry in India, the first single malt manufactured in Asia and the first diet whisky in the world. USL has constantly revamped itself and its brands to keep pace with the changing busin business ess dynam dynamic ics s and and globa globall compet competit itio ion. n. The comp compan any's y's ulti ultima mate te obje object ctiv ive e of  becoming the largest spirits company in the world received a major shot in the arm during 2007 with the acquisition of internationally renowned brands (companies) such as Whyte & Mackay, Bouvet Ladubay and PinkyVodka. And yes. with such a head start, the excitement continues as USL is geared for an action-packed year, which will drive it further closer to becoming the No. 1 spirits company in the world. Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 19 millionaire brands (selling more than a million cases a year) in its

portfolio and enjoys a strong 59% market share for its first line brands in India. United Spirits' Spirits' brands have won the most prestigious awards for flavors, ranging from Mondial to International Wine and Spirit Competition (IWSC) to International Taste & Quality Institute (ITQI); more than 99 awards & certificates. The Company is known to be an innovator in the industry and has several firsts to its credit like the first pre-mixed gin, the first Tetrapack in the spirits industry in India, first single malt manufactured in Asia and the first diet versions of whisky and vodka in India. USL has a global footprint with exports to over 18 countries. It has a sizeable presence in India with distilleries and sales offices all across the country, and a committed team of  over over 7500 7500 peop people le dedi dedicat cated ed to the the fulf fulfilillm lment ent of the the compa company' ny's s miss mission ion.. It has established manufacturing and bottling plants in every state of India. In addition, to deliver its products to customers located anywhere in India, USL has established a robust distribution network covering the whole country.

USL Millionaire Brands (Those that sell more than a million cases per annum) Particulars

Total Number

Comments

Brands

140

SKUs

2992

19 of these are millionaire brands and there are about 151 brand variants Distillery-State-Brand-Pack Distillery-State-Brand-P ack combinations

Distilleries / Bottling Units

74

27 Owned Manufacturing facilities;40 contract manufacturing units

Depots

48

Break-bulk points for finished goods distribution

Retail Outlets

64000

Inclusive of both on and off premise outlets

Whisky • Bagpiper • McDowell’s No.1 • Director’s Special • Old Tavern • Haywards • McDowell’s Green Label • Gold Riband • Royal Challenge • DSP Black • Signature

Brandy

Rum

Vodka & Gin

• McDowell’s No.1 • Honey Bee • John Ex-Shaw

• Celebration Rum • Old Cask Rum • Old Adventurer Rum

• White Mischief • Romanov • Blue Riband

MOHAN MEAKIN;- A saga that began over a century and a half ago, continues on its path of service to the world with dedication, courage and an unflinching commitment to qualit quality. y. Over Over the years the Company Company has embraced embraced moderni modernity ty and adapte adapted d to changing times. Yet, its basic values remain the same--Integrity, Craftsmanship, and Tradition. From old tradition sprang Mohan Meakin where the sanctity of ancient culture, technological development and craving for quality are artfully blended into the products. The origin of Mohan Meakin traces back to Edward Dyer from United Kingdom who set up the first-ever brewery and made indigenous beer available available to the Indians as well as Britons. Britons. He set up more Breweries at Solan, Simla, Murree, Rawalpindi Rawalpindi and Mandalay. Mandalay. Another entrepreneur entrepreneur H G Meakin Meakin came to India from Britain and bought the old Simla and Solan Solan Brewerie Breweries s from from Edward Edward Dyer and added added more at Ranikh Ranikhet, et, Dalhousie Dalhousie,, Chakrata, Darjeeling and Kirkee. A distillery was then set up at Kasauli instead. Another distillery was set up in the historic city of Lucknow. In addition to meet the increased demand of Mohan Meakin Products an Industcrial Complex on 150 acres of land was set up in the year 1960 near  Dehl Dehlii in Ghaz Ghazia iaba bad d Dist Distt. t. of Utta Uttarr Pares Paresh. h. Moha Mohan n Meak Meakin in have have esta establ blis ishe hed d full fully y equipped labratories at its various manufacturing centers manned by highly qualified and experienced technical technical persons to ensure the maintenance maintenance of high standard standard quality quality products.

MAJOR BRANDS OF MOHAN MEAKINS: Solan No. 1 Malt Whisky Summer Hall Colonel’s Special Malt Whisky Golden Eagle Diplomat Deluxe Malt Whisky Black Knight Malt Whisky King Castle Celaar 117 M.M.B. Whisky Old Monk Supreme

Old Monk Gold Reserve Old Monk White Rum Black Beauty Old Monk XXX Rum

SHAW WALLACE:- Established in Calcutta in 1886, Shaw Wallace bears a legacy that is drenched in the spirit of India for the last 116 years. The company came into existence at a time when the country was in the thick of its struggle for freedom against colonialism. It was an era of cataclysmic change, powered by the crystallization of the social, political, cultural and economic ideologies that would define the very future of  India. The Indian Nationalist movement came to the fore under the leadership lead ership of W. C. Bannered in Bombay barely a few days after Shaw Wallace was founded. If 1886 marked the inception of the remarkable Rama Krishna Mission by Swami Vivekananda following the demise of one of the greatest Indian saints, Ramakrishna Paramhansa it also witnessed the release of Rabindranath Tagore's literary masterpiece Kari-o-Cool. Set against a backdrop of changing ideas and structures that governed India's germination into an independent entity, Shaw Wallace after a modest beginning blossomed into one of the forerunners in the alcohol and beverage industry. Throughout its long and rich journey, Shaw Wallace has had many a first to its credit. The company was one of the first importers of motor cars in India during the beginning of the 20th century. Shaw Wallace was also the first agent age nt in India of a wireless company- Marconi's Wireless Telegraph. In 1926, 192 6, it acted as an agent of an airline, the 'Imperial Airways'. Shaw Wallace marked another milestone in 1987, when the company came under the dynamic leadership of the Jumbo Group, spearheaded by the late Mr. M R Charier. His boundless vision and business acumen has further cemented the position of the company, taking it to dizzying heights of success. The Shaw Wallace motto has been to live and breathe innovation with the consistent launch of new products and variants to cater to emerging needs of its consumers. In the last century, the company has risen consistently to the challenges that have come its way establishing a niche that cleverly captures the varied and ever-changing taste of  alcohol consumers the world over. Today Shaw Wallace has a host of liquor and beer  brands that have become synonymous with the highest quality and the best of times .

MAJOR BRANDS OF SHAW WALLACE:-

ROYAL CHALLENGE DIRECTOR SPECIAL DIRECTOR SPECIAL BLACK ANTIQUITY PREMIUM WHISKY

SEAGRAMS:- Seagram India, a Pernod Ricard Group Company, the world's second largest wine and spirits conglomerate, the name that's synonymous with world renowned wine brands such as Jacob's Creek ( Australia), Montana (New Zealand) & Mumms Champagne, and the finest spirit brands like Royal Salute, Chivas Regal, The Glenlivet & 100 Pipers. Royal Stag is an Indian-made foreign liquor. It is a blended whisky and is a blend of  imported Scotch Malts and selected Indian Grain Sprits. Seagram’s markets it in India. It is produced in several distilleries, some are company-owned and others bottler-owned. One of the key reasons for the brand’s success is its quality that is always same. Seagram has launched this brand especially for Indian market and it’s a big hit. The Royal Stag (RS) is one of the species of deer that is famous for its antlers soaring over  all other species of deer. Like the deer this blended whiskey has emerged as one of the major players in Indian alcoholic beverage market.

It is a blend of the best scotches malts from Scotland and Indian grain spirits. ROYAL STAG Deluxe whisky is a full-bodied whisky. Seagram is now part of Pernod Ricard due to worldwide takeover. Pernod Ricard produces and distributes many prestigious brands in many categories of alcoholic beverage. Some of world famous brands of this group are: Ricard, Seagram’s Gin, Chivas Regal, Royal Salute, Larios, Clan Campbell, Havana Club, Jameson, Martell, Ramazzotti, Wyborowa, Wild Turkey, Jacob’s Creek and Wyndham Estate. These brands are either global glob al leader or one of the top selling brands bran ds of a select market. This list is from their website, I have tested only the highlighted one . Pernod Ricard group is marketing more than 100 famous brands around the globe. Royal Stag is one such brand being marketed in India and Nepal as per requirement of  these markets Market Scenario

Royal Stag is the leading whisky in the Indian market. It is placed in prestige category and priced to target the common man. As per p er their website it enjoys 27% of Indian

market. Reasons behind its fast growth are Price Pr ice and Quality. It is a Herculean task to match its price and quality. It seems to be the fastest growing brand in Indian market. Annual sales of Seagram’s Royal Stag whisky have crossed over one million cases. Royal Stag is the only second brand from a multinational liquor house, after Green Label whisky, to achieve the `Millionaire’ status in Indian market for whiskey. It has made rapid progress in the Indian market in the last five years and pulled up its sales from around four lakh cases in 1997 to the present ‘Millionaire’ status.

MAJOR BRANDS OF SEAGRAMS:-

ROYAL STAG IMPERIAL BLUE BLENDERS PRIDE 100 PIPERS CHIVAS REGAL PASSPORT GOLD CLASSIC BOSTON CLUB MASTER BLEND CROWN ROYAL

AMRUT DISTILLERIES:- The history of Amrut Distilleries is as old as the history of  independent India itself. Indeed, just as India itself, after six decades of notable progress, is now noted as among the global economic leaders, so too has Amrut Distilleries grown both in stature and in size. Among the earliest to enter the then arcane field of liquor making, Amrut Distilleries Limited began in 1948 under the name and style of Amrut Laboratories, with an initial investment of barely a few lakhs. The founder was the late Shri J.N. Radhakrishna, J.N.R as he is fondly called to this day. Much of this fascinating story was made possible by the resolve of successive generations of the Jagdale family to embrace value and to discount form for substance. Under the leadership of the founder, Amrut Distilleries made rapid strides to entrench itself as a significant, for many the preferred, supplier of Indian Made Liquor (IML) in the Defence Market. In its state of origin, Karnataka, too, Amrut Distilleries grew to be one of the dominant suppliers, especially in the old Mysore area. After the untimely demise of J.N. Radhakrishna Rao Jagdale in 1976, the mantle devolved on his son, Shri Neelakanta Neelakanta Rao , the present Chairman and Managing Director. Building on the solid foundations laid by his later father, his stewardship has seen Amrut Distilleries blossom into a multi-national brand respected as much for the superlative quality of its products as his campaign for transparent practices by the IML industry. His penchant for innovation and technology-upgrade has been the ideal foil for the timetested traditions enshrined by the founder. From its beginning as single bottling unit catering primarily to the Canteen Stores of the Ministry of Defence and to local customers in and around Bangalore, Amrut Distilleries has now grown into a transnational player with:a) A re-distillation plant to produce superior extra neutral alcohol for captive consumption. b) Two bottling units – 1 each in Karnataka and the neighboring state of Kerala. c) Local bottling arrangements with know-how provided by Amrut Distilleries in five other 

states of India. d) A portfolio of dozens of products including several that are appreciated by the connoisseurs across the world. e) An established market spanning the length and width of the country,and f) A nascent but burgeoning market across the European Union. Growth in the product portfolio and in its market size has brought concomitant growth in the financials too. With a paid-up share capital of Rs. 20 million, the company sports a financially healthy look with accumulated reserves exceeding Rs. 250 millions. Turnover  has grown astronomically from a mere few lakhs to Rs. 1500 millions a year today. To manage and deliver on its present status as noteworthy national player, the company has also taken on board external talent in substantial numbers and boasts today of a more than thousand-strong workforce of professionals and skilled staff at its various units.

MAJOR BRANDS OF AMRUT:AMRUT INDIAN SINGLE MALT WHISKY AMRUT INDIAN SINGLE MALT WHISKY (cask strength) AMRUT PEATED INDIAN SINGLE MALT WHISKY AMRUT FUSION SINGLE MALT WHISKY AMRUT TWO CONTINENT SINGLE MALT WHISKY AMRUT PEATED INDIAN SINGLE MALT WHISKY (cask strength) MAQINTOSH WHISKY MAQINTOSH PREMIUM WHISKY MAQINTOSH SCOTCH WHISKY

DIAGEO Diageo is the world's leading premium drinks business with an outstanding collection of  beverage alcohol brands across spirits,wine and beer categories. These brands include: Smirnoff, Johnnie Walker, Captain Morgan, Baileys, J&B, José Cuervo, Tanqueray, Guinness, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines, and Bushmills Irish whiskey. Diageo is a global company, company, trading in over 180 markets around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). We employ over 22,000 talented people worldwide with offices in around 80 countries. We have manufacturing facilities across the globe including Great Britain, Ireland, United States, Canada, Spain, Italy, Africa, Latin America, Australia, India and the Caribbean. Diageo was formed in 1997, following the merger of GrandMet and Guinness, and is headquartered in London. The word Diageo comes from the the Latin for day (dia) and the Greek for world (geo). We take this to to mean every day, everywhere, people celebrate with our brands.

MAJOR BRANDS OF DIAGEO:JOHNNIE WALKER SMIRNOFF CAPTAIN MORGAN J&B

BAILEYS BLACK & WHITE VAT 69

How SIMBHAOLI can launch its new brand in semi premium range of  whisky? As we have seen there are various competitors of SIMBHAOLI in the market, so for  launching a new brand in the market in semi-premium range of whisky, company have to work extensively in forming marketing strategy for launching a new brand. There are various mode of promoting a new brand for that company has to form a good sales promotion technique.

Sales Promotion: Definition: It covers marketing activities other then advertising, publicity and personal selling that stimulate consumer purchasing and dealer effectiveness. Such activities are displays, shows, exhibitions, demonstrations and many other non routine selling efforts like spot selling. Sales promotion tries to complement the other means of promotion given above. All kinds of promotion play the role of communication channels between the marketer  and the consumer. Promotion as on element of marketing mix has three broad objectives: (a) Information, (b) persuasion, (c) reminding. The overall objective of promotion is, of course, influencing the buyer behavior and his predispositions (needs, attitudes, goals, beliefs, values and preferences). According to the American Marketing Association, the sales promotion can be defined as “Those marketing activities other then personnel selling advertising and publicity, that stimulate consumer purchasing and dealer effectiveness, such as displays, show and exhibition, demonstration and various non-current efforts not in the ordinary routine”.

Objectives of the Sales Promotion:

There are many ways by which sales can be increased and more orders can be obtained. This can be done by increasing advertising publicity and market research. The major objective of sales promotion are :To increase the sales. To make the customer aware of the product. To persuade non-users to try it once. To sell the new product. • • • •

Advertising : “Any paid form of non-personal personal presentation and promotion of ideas, goods or  services by an identified sponsor.” It is paid communication because the advertising appears. Advertising appears in magazines, radio, TV, film and transit (car cards). According to Russel and Veril “Advertising is a message paid for by an identified sponsor and delivered through some medium of mass communication”

Classifications Classifications of Advertising : They can be classified as : (1)Audiences, (2) Types of Advertisers and (3) Media

Marketing Activities: Sales: • • • • • •

Making personal calls to concerned agents. Generating orders for products. Reporting on product movements or problems. Obtained special displays, features etc. Gaining new accounts. Checking of pricing, material and product availability in stores.

Publicity: Publicity can be defined as the activity of “Securing editorial space, as divorced from paid space, in all media which are read or heard by the company’s customers or  prospects, for the specific purpose of assisting in the meeting of sales goals. In other  words, publicity refers to an appeal made to a mass of people publicity in making goods,

“Publicity known”. It constitutes a mass approach. Publicity can also defined as the first communication about the product and its detailed history through the media, radio and so on before the actual manufacture and launching of the product to get the response of  the users or consumers. Usually Sugar Industry requires no advertising publicity.

Marketing Activities of Public Relation: • • • • •

•

Generation news, features about the business, its people and its products. Handing press inquiries and interviews. Preparing statement and releases. Helping counter in-favorable publicity. Preparing and distributing communications to special interested groups such as stock-holders suppliers. Handling product and regularly public

Distribution Channels: Distributional channels those systems of economic institutions through which a producer  of goods delivers them into the hands of their users. As society shifted from producing things in the home to buying goods manufactured in centralized locations, there arose a need for some means to distribute the products pro ducts from the central points of production to the dispersed populace. Channels of distribution furnish this bridge between the producer and the consumer. Tremendous amount of time and money would be expended in just acquiring the minimum amount of goods one would need for survival. Marketing channels funnels the goods demanded by the consumer to the place where he wishes to purchase them, and create three basic utilities, viz. 1. Place 2. Ownership, and 3. Time Marketing institutions must move the goods from point of production to the point of  purchase i.e. consumption. This creates place utility, because goods will have no value to the buyer If they are still in hands of manufacturer Marketing channels arrange for the transfer of title of the goods from the manufacturer to the buyer. This creates ownership utility. Marketing channels must have arranged goods available to the user when he wants them, this creates time utility. In great part of US bathing suits gave little value to the consumer in the month of January, in fact, the manufacturer Of swimming apparel must make them during the winter because a substantial amount of lead time is necessary to ensure that ample merchandise is on hand at that time is demanded. Channels of  distribution frequently absorb much of this difference in time between production and consumption. This statement does not imply that all marketing activities do not have a bearing on the creation of these utilities. Although advertising may stimulate ownership utility by making a person want something, the actual ownership utility is created on the

transfer of title from the retailer to the individual The title does not always automatically follow the actual trail of the merchandise.

Channel Originated Behavior: It should not be assumed that marketing channels are passive institutions moving only at the order of manufactures. Most aggressive middleman will institute the economic behavior of their own when they see a need for it market place. Many retailers and wholesalers have originated their own brands with which they compete in the market place side by side. Often in conflict with the promotional program of the manufacturers with whom middleman deal they originate promotions of their own. A food manufacturer have a certain promotion under way which requires a man floor display in super market, but the super market owner may have promotional plan of this own that do not provide for such display. In fact middlemen have learned through their bitter experiences of business that the interests of the manufacturer are not always identical with theirs. Often middlemen modify a manufacturer product in an attempt to make it more appealing to the consumer. Ready-to-wear stores will frequently change the labels and alter some of  accessories of the apparel they sell. Intact, middlemen are influential in determining the actual location at which the merchandise will be delivered to the customers. Although manufacturers have some degree of control over location through their selection of  outlets but in fact, it is the dealer who will make the final decision concerning where the merchandise should be sold to customer .

Channel Arrangement: Four major alternative channel arrangement have been described below which differ  significantly in their capability for creating sales, in their costs of operation and their  susceptibility to control. Once they are choose, the firm must adhere to them for a substantial period of time. • •

•

•

The first channel consist of direct sales of goods by producer to ultimate The seconds marketing channel shows one selling intermediates between the producer and the ultimate consumer. If the middlemen is retailer, his function is to purchase the producer’s goods and resale them at a profit. They deal with many producers. P-R-C The third marketing channel shows two different selling intermediaries. The most common example consists of wholesaler and retailer. This is known as the linkage. P-W-R-C The last channel consists of three selling intermediaries inter mediaries where a jobber usually intervenes between the wholesalers and the retailers. The linkage is P-W-J-R-C. The jobber buys from wholesalers and sells to small retailers, who generally are

not serviced by the large wholesalers P = PRODUCER, W=WHOLESALER, J=JOBBER, R=RETAILER, C=CUSTOMER Sales promotion is a tool used to achieve most of the five major promotional objectives discussed in the Promotion Decisions tutorial: Building Product Awareness – Several sales promotion techniques are highly effective in exposing customers to products for the first time and can serve as key promotional components in the early stages of new product introduction. Additionally, as part of the effort to build product awareness, several sales promotion techniques possess the added advantage of capturing customer information at the time of exposure to the promotion. In this way sales promotion can act as an a n effective customer information gathering tool (i.e., sales lead generation), which can then be used as part of follow-up marketing efforts. Creating Interest – Marketers find that sales promotions are very effective in creating interest in a product. In fact, creating interest is often considered the most important use of sales promotion. In the retail industry an appealing sales promotions can significantly increase customer traffic to retail outlets. Internet marketers can use similar approaches to bolster the number of website visitors. Another important way to create interest is to move customers to experience a product. Several sales promotion techniques offer the opportunity for customers to try products for free or at low cost. Providing Information – Generally sales promotion techniques are designed to move customers to some action and are rarely simply informational in nature. However, some sales promotions do offer  customers access to product information. For instance, a promotion may allow customers to try a fee-based online service for free for several days. This free access may include receiving product information via email. Stimulating Demand – Next to building initial product awareness, the most important use of sales promotion is to build demand by convincing customers to make a purchase. Special promotions, especially those that lower the cost of ownership to the customer (e.g., price reduction), can be employed to stimulate sales. Reinforcing the Brand – Once customers have made a purchase sales promotion can be used to both encourage additional purchasing and also as a reward for purchase loyalty.

Promotional Strategy 1. Deciding Promotional Mix Personal selling, advertisement and sales promotion are some of the promotional methods. During most of the situations two or more promotional methods are to be used for each campaign. Generally with the help of a single method it is not possible to succeed. Advertising needs the support of personal selling or display to increase the sales. Sometimes even the personal selling alone cannot be successful without the support of advertisement. An ideal promotion mix is that situation where the total expenditure incurred for various promotion methods is minimum and sales by such mix is maximum. Promotion mix means finding out the proper ratio of usage of different methods of  promotion. The management must find out, how much amount should be spent on each promotional activity. Promotional mix is influenced by the following factors .

(a) Nature of the product Nature of the product will be decide the promotional mix. For consumer goods advertisement and dealer display will have more effect. Industrial goods with high technology will need much of personal selling and cosmetics, blades etc, will require more of advertisement than personal selling and display

(b) Nature of the Customer  If the communications are mostly to middlemen, then personal selling will be more effective and very little spending on advertisement will do. If information are to be passed to consumers and when the number of consumers is large, it is better to advertise. Especially if customers are scattered, then advertisement alone can be successful.

(c) Nature of the Market If market for a product is only local then personal selling alone will be sufficient .

The Marketing MIX: Ingredients for Success The marketing mix, earlier known as the 4 P’s,(but now has a few more),is a vital part of  any marketing strategy. This is a tool whereby the marketer takes decisions on what and how a product should be, where it can be sold, how it should be priced, how it will be promoted, how to equip the people who are responsible for selling the product…and so on. Getting the marketing mix right is equally important for the large corporation and the small business owner. One of the most critical marketing management decisions is that decision of setting the marketing mix values, and selecting and employing strategy that periodically change that marketing mixes in response to changing business environment.

Product 1. No.1 selling product in its segment. 2. Good quality raw material is used to maintain the quality standa rds. 3. Consistency of product quality is high. 4. Always tastes fresh due to good quality and an d well developed distribution network.

Place1. 2. 3. 4.

It is is avail availabl able e in many many state states. s. Comp Compan any y loca locati tion on Transp Transport ortat atio ion n faci facilility ty Availabi Availabilit lity y of raw materia materiall

PricePricing strategy should be of such type, that it gives a strong competition to the existing leader in the market. Pricing should be favorable for the consumer. Pricing plays an important role in promoting a new product in the market. In the initial stage price should be low and as the product gains reputation in the market the price should be hike a little.

Pricing always should attract the customer and customer should never feel cheated by the price, customer should feel happy for the price he have paid fro the product.

Promotion Promotion includes advertising and other forms of sales presentations, designed to encourage fast consumer or trade up-take of a product or service. The form of any promotion depends on the product, the marketing plan and its objectives, and on the imagination of the product management team. It can vary from a simple in-store demonstration, or sampling, or a tie-in with on premises. A range of promotional tools, techniques and activities are mixed and matched to meet the needs of individual marketing campaigns.

Major Tools in Marketing LIQUOR Publications: Companies rely extensively on published materials to reach and influence target markets, including annual reports, brochures, articles, printed and online newsletters and magazines, and audiovisual materials .

Events: Companies can draw attention to new products or other company activities by arranging special events like news conferences, on-line chats, contests and competitions, and sport and cultural sponsorships that will reach the target publics.

News: One of the major tasks of PR professionals is to find or create favorable news about the company, its products, and its people. The next step is getting the media to accept press releases and attend press conferences.

Websites: Website is a major tool of advertising as it is free from any kind of  restriction in posting ads and any type of content. A company can post its ad in any website for promotion. A massive group uses internet and by posting ads on website company can easily communicate with the customer and can promote a new brand.

On premise advertising: On premise advertising is also a good mode of  promoting a brand, as all the customers purchase liquor from the retail outlet only, so company can post there hoardings hoarding s and banners in the retail outlets.

Factors Influencing Company Marketing Strategy

There are various forms of marketing which are used for promoting the product in market.

Marketing Activities Brand Advertising Promotional Activities in on & off trade Experiential marketing Consumer planning Relationship marketing Consumer PR Brand Website & online activities Packaging

Relationship between PLC & Marketing Strategies Product life cycle management is the succession of strategies used by management and as a product goes through its product life cycle. The conditions in which a product is sold changes over time and must be managed as it moves through its succession of  stages.

The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect re spect to business/commercial costs and sales measures; whereas product life cycle management (PLM) has more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view. To say that a product has a life cycle is to assert four things: • •

• •

that products have a limited life, product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, profits rise and fall at different stages of product life cycle, and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Like human beings, products also have life cycles. That is, they're born, and then over  time—their sales grow, mature, and finally decline. The strategies with which you market a product need to change with each of these life-cycle phases. The table below shows a few examples of how this might work:

PLC STAGE PROD PRODUC UCT T INT INTRO RODU DUCT CTIO ION N Product Growth Product Maturity Product Decline

CHARACTERSTICS Low Low sal sales es,, high high cost cost per  per  customer, no profits, few competitors Rising sales and profits, more and more competitors Peaking sales and profits, stable or declining number of  competitors Declining sales, profits, and number of competitors

MARKETING OBJECTIVE Create product awareness and trial Maximize market share Maximize profit while defending market share Reduce expenditure and "milk" the brand

MARKET STRATEGIES Offer a basic product, Use heavy promotions to entice trial Offer product Extensions Diversify brands Intensify promotion to encourage switching to new brands Phase out weak Products, Cut price; Reduce promotion

Request for Deviation In the process of building a product produc t following defined procedure, an RFD is a request reque st for  authorization, granted prior to the manufacture of an item, to depart from a particular  performance or design requirement requiremen t of a specification, drawing or other document, for a specific number of units or a specific period of time.

Market Identification A "micro-market" can be used to describe a Walkman, more portable, as well as individually and privately recordable; and then Compact Discs ("CDs") brought increased capacity and CD-R offered individual private recording...and so the process goes. The below section on the "technology lifecycle" is a most appropriate concept in this context In short, termination is not always the end of the cycle; cyc le; it can be the end of a microentrant within the grander scope of a macro-environment. The auto industry, fast-food industry, petro-chemical industry, are just a few that demonstrate a macro-environment

that overall has not terminated even while micro-entrants over time have come and gone.

Lessons of the product life cycle (PLC) It is claimed that every product has a life period, It is launched, it grows, and at some point, may die. A fair comment is that - at least in the short term - not all products or  services die. Jeans may die, but clothes probably will not. Legal services or medical services may die, but depending on the social and political climate, probably will not. Even though its validity is questionable, it can offer a useful 'model' for managers to keep at the back of their mind. Indeed, if their products pro ducts are in the introductory or growth gr owth phases, or in that of decline, it perhaps should be at the front of their mind; for the predominant features of these phases may be those revolving around such life and death. Between these two extremes, it is salutary for them to have that vision of  mortality in front of them. However, the most important aspect of product life-cycles is that, even under normal conditions, to all practical intents and purposes they often do not exist (hence, there needs to be more emphasis on model/reality mappings). In most markets the majority of  the major brands have held their position for at least two decades. The dominant product life-cycle, that of the brand leaders which almost monopolize many markets, is therefore one of continuity. In the criticism of the product life cycle, Dhalla & Yuspeh state: Clearly, the PLC is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand's life cycle. Thus, the life cycle may be useful as a description, but not as a predictor; and usually should be firmly under the control of the marketer. The important point is that in many markets the product or brand life cycle is significantly longer than the planning cycle of  the organizations involved. Thus, it offers little practical value for most marketers. Even if the PLC (and the related PLM support) exists for them, their plans will be based just upon that piece of the curve where they currently reside (most probably in the 'mature' stage); and their view of that part of it will almost certainly be 'linear ' (and limited), and will not encompass the whole range from growth to decline.

Limitations The PLC model is of some degree of usefulness to marketing managers, in that it is based on factual assumptions. Nevertheless, it is difficult for marketing management to gauge accurately where a product is on its PLC graph. A rise in sales  per se is not necessarily evidence of growth. A fall in sales  per se does not typify decline. Furthermore, some products do not (and to date, at the least, have not) experienced a decline. Coca Cola and Pepsi are examples of two products that have existed for many decades, but are still popular products all over the world. Both modes of cola have been in maturity for some years. Another factor is that differing products would possess different PLC "shapes". A fad product would hold a steep sloped growth stage, a short maturity stage, and a steep sloped decline stage. A product such as Coca Cola and Pepsi would experience growth, but also a constant level of sales over a number of decades. It can probably be said that a given product (or products collectively within an industry) may hold a unique PLC shape, and the typical PLC model can only be used as a rough guide for marketing management. This is why it’s called the product life cycle.

RECOMMENDATION From the survey of retailer and wholesaler who lesaler it is clear that not only brand positioning, pos itioning, brand image and consumer demands demand s are the not only controlling factors of the sale s ale of  product of the company but the wholesaler and a nd the retailer also play a major role. SIMBHAOLI should thus focus on the following points.

AVAILABILITY It is necessary for the company to maintain a regular supply of its products and brands, They should fulfill the demand of the wholesaler so that product can be available in the retail market. The consumer should get the brand he demands otherwise he shifts to other brands and frequent shifting affect the sales of company and the consumer could even change the preference of his brand.

PROFITABILITY As we have seen form the wholesalers and retailers view that they sell those products which earn them greater profit margins. Therefore the company should give the wholesaler greater profit. Margins so that has more profit and in turn retailer also gets a greater profit margin.

EXTRA BENEFITS Since there are many firms operate in the market it is essential for the company to give extra benefits and gift to the wholesaler and salesman sales man at retail outlets to maintain good relation with them. The company can offer them free gift like playing cards, Key-Rings, Wine, glasses and T-Shrits. In return the salesman at the retail outlet creates the demand of the company’s brand. The company co mpany should send its marketing team into the market regularly so that the performance of the company’s different brands could be studies and a follow through action plan be developed. This will also help the company to maintain good relation with Beer & Hotels and the wholesalers wholes alers and retailers.

Steps undertaken in launching new brand • • • • •

Detailed analysis of market conditions Brand sales analysis and interpretation Category analysis and development Distribution objectives and sales targets Competitive review and analysis

• • • •

Pricing efficiencies and options Advertising and promotion strategies Product packaging examination Recommendation and action plan

QUESTIONNAIRE FOR CONSUMER

Ques.1- Do you drink liquor? a) Yes b) No Ques. 2- You take liquor in form of... a) Beer b) Whisky c) Rum Ques. 3- Your age is……… a) 15-25 yrs. b) 25-35yrs. c) 35-45yrs. d) 45 & above Ques. 4- Who introduced you to drink Whisky? a) friends b) Advertising Ques. 5- You consume Whisky……. a) Once a week b) 3-4 times in a week c) Every day d) occasionally Ques. 6- How often do you drink Whisky? a) Occasionally b) Regularly Ques. 7- Which type of Whisky do you prefer? a) Cheap b) Semi premium c) Deluxe d) Scotch Ques. 8- How much quantity of Whisky is consumed by you at one time?

a) 1 quarter b) 2 quarter c) 90ml d) 60ml Ques. 9- You drink usually at? a) Home b) Restaurant c) Bar d) Open space Ques. 10- What are the key factors that affect your purchasing decision? a) Price b) Brand c) Taste d) Status Ques. 11- How was it, as compared to other existing brands? a) Good b) Poor c) Satisfactory d) Equivalent Ques. 12- You feel after drink……… a) Relaxed b) Happy c) Tensed d) Angry Ques. 13- Your preference for packaging? a) Glass Bottle b) Plastic Bottle c) Tetra packing Ques. 14- Are you brand loyal? a) Loyal b) Switcher  Ques. 15- Any suggestions for SSL? ……………………………………………………………………… ……………………………………………………………………… Personal information Name-……………………………. Address-...………………………………………………………….. ……………………………………………………………………… ……………………………………………………………………… Gender-……………………………… Age-………………………………….. This questionnaire has given an insight about the taste and preferences of the customer  ranging from high class to low working class. It helps me to understand the market size of various whiskies and other alcoholic drink. I sincerely thank the entire person who helps me by filling up the questionnaire. The conclusions of the questionnaire are as follows

QUESTIONNAIRE FOR RETAILER

Ques.1- What different types of liquor are sold by you? a) Beer b) Whisky c) Rum d) Other  Ques.2- Which type of Whisky is mostly demanded? a) Regular b) Semi premium c) Deluxe Ques.3- In semi premium range Whisky, what are the different brands available with you? a) Royal stag b) Mc Dowell No. 1 c) Directors special d) Aristocrat e) Any other……………… Ques.4- Which brand of SSL is mostly demanded? a) Hunter Rum b) Xing vodka c) Old tavern d) Any other. Ques.5- How much quantity of SSL whisky is sold daily? a) 10 Cases b) 10-20 Cases c) > 20 Cases

Ques.6- Do you agree with advertising program of Whisky? a) Yes b) No Ques.7-Are you satisfied with the distribution system of SSL? a) Yes b) No Ques.8- Do you think that sale can be increased by providing scheme to retailer and consumers? a) Yes b) No Ques.9- Who is the biggest competitor of SSL in the market? ………………………………………………………… Ques.10- Would you like to give some suggestions to SSL for improvement? ……………………………………………………………………… ………………………………………………………………………

Personal information Name-……………………………………….. Name of the shop-……………………………………………………. shop-……………………………………………………. ………………………………………………………………………… Address of retailing-……………………… re tailing-…………………………………………………. …………………………... …………………………………………………………………………

The retailers have also give a helpful insight of the product and also help me to adjudged the consumption pattern of the various product of alcohol. During the interview of retailers and distributor I have made various facts and finding about the liquor and its consumption.

BIBLIOGRAPHY:

TEXTBOOKS REFERRED

Marketing Marketing Management, Management, 13th Editio Edition n Research, 3rd Edition. AMBROSIA WEBSITES REFERRED

www.google.com www.vikipedia.com www.economicwatch.com www.reportliker.com www.amrutdistilleries.com www.simbhaolisugars.com www.segramsindia.com www.radicokhaitan.com www.mohanmeakin.com www.scribd.com www.usl.com

Philip Philip Kotler Kotler,, Kevin Kevin Lane Lane Kell Keller er Market Marketing ing