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Branding plan - Bijiu

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Branding plan for Baijiu - Chinese Wine in USA

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Branding plan - Bijiu

  1. 1. BRAND DETAILS • NAME OF BRAND IS REDSTAR ERGOUTOU: ERGOUTOU IS TYPE OF BAI JIU LITERALLY MEANING TWICE DISTILLED – PROCESS WISE. REDSTAR IS ONE OF THE BIGGEST PRODUCER OF THIS TYPE OF BAIJIU (CHINESE WHITE WINE) • TARGET MARKET IS CHINESE EXPATS IN SAN FRANCISCO, MAINLY IN CHINATOWN
  2. 2. EXECUTIVE SUMMARY • • • • THE STRATEGIC PROBLEM IS EXPAT CHINESE ARE AWARE OF THE BRAND BUT NOT AWARE OF THE AVAILABILITY OF THE BRAND OVERSEAS. THERE IS LOTS OF OPPORTUNITY OUT SIDE CHINA AS CHINESE POPULATION IS INCREASING OUTSIDE CHINA THIS OPPORTUNITY ARISE BECAUSE REDSTAR CORPORATION DECIDED TO GO ABROAD TO TARGET THIS MARKET BY REDEFINING THEIR VISION BUT MARKETING DEPARTMENT IS FAILING TO TAKE THIS OUT OF CHINA DUE TO REGULARIZATION AND WEAK DISTRIBUTION CHANNEL OUTSIDE CHINA THE STRATEGIC ALTERNATIVES ARE TO STAY AS IS OR TO GO WITH THE NEW MARKET THE RECOMMENDATION IS TO GO ABROAD AND START WITH CHINA TOWN IN SAN FRANCISCO, EVEN IF WITH CONSERVATIVE MARKET ASSUMPTION IT HAS A POTENTIAL OF THE $1.4M PROFIT ONLY IN ONE YEAR.
  3. 3. MARKET ATTRACTIVENESS Power of Supplier • • THE WESTERNIZATION IS CAUSING PEOPLE TO HAVE OTHER SPIRITS LIKE VODKA, WISKY THAN THEIR TRADITIONAL WINE PRICE IS ONE OF THE KEY FACTOR THAT INFLUENCES THE CHOICE OF THE CUSTOMER • Supply chain plays the key role in distributing the products in foreign countries Threat of Substitutes • Westernization causing Chinese people to consume other spirits Medium Entry Barriers Rivalry High • Competition is Based is Awareness, price and quality High Power of Buyers • Income is still low comparing to Americans Medium • Regulations in USA • Import regulations High
  4. 4. COMPETITION Relative Strength • • WE ARE A LOW PRICE BRAND AND ALWAYS CONSIDERED AS WORKER’S BRAND LOOKING AT THE NUMBER OF CUSTOMERS THERE SEEM TO BE HUGE OPPORTUNITY TO START TO MAKE PROFIT ON MARGIN #2 brand in BaiJiu category Low price, perceived as worker’s brand Well established distribution n/w 800 years of history Threats Import rules and regulations Cost of import and placing the product in market Relative Weakness No export experience Distributors in USA Awareness about availability Opportunity San Francisco has 0.6M Chinese population China town in SF has 0.3M Chinese population
  5. 5. OTHER PLAYERS IN FIELD • • • THERE ARE MANY OTHER PRODUCTS WITH ALMOST SAME ALCOHOL CONTENT(40%-55%) ARE HAVING SAME QUALITY Qualit y HIG H Moutai Whiskey Red Star MOUTAI IS PREMIUM BAIJIU Wine Vodka RED STAR CAN BE PLACED AS HIGH QUALITY BUT CHEAPER PRICED Rice Wine Price LOW HIG H
  6. 6. CONSUMER PERCEPTION Functional: Social drink, Functional: Social drink, Post business meetings, Cultural celebrations, Low price High quality Post business meetings, Cultural celebrations, Low price High quality Red Star’s Current perception in China Red Star will be perceived in USA Emotions: Rich History, Going back to the roots Experience: Exotic Culture Authentic culture Emotions: Rich History, Going back to the roots Experience: Exotic Cu Authentic culture
  7. 7. CENTERS OF INFLUENCE • • • DISTRIBUTORS: IN USA PEOPLE MAINLY BUY FROM LIQUOR STORE OR GROCERY SORES SO POSITIONING OF THE BRANDS IN THESE PLACES INFLUENCES THE CUSTOMER BUYING ABILITY BARS TENDERS AND WAITERS: THERE ARE MANY BARS, RESTAURANT AND KARAOKE CENTERS IN AND AROUND CHINA TOWN. CHINESE PEOPLE MAINLY HANG OUT THESE PLACES. SO THE BAR TENDERS AND WAITERS ARE ANOTHER KEY INFLUENCERS. PARENTS: YOUNG GENERATION IN CHINA LEARN ABOUT THE CULTURE FROM THEIR PARENTS. SO THEY ARE ALSO PART OF INFLUENCERS AS DRINKING BAIJIU WHILE EATING FOOD IS IN THE CHINESE CULTURE.
  8. 8. WHAT IS RED STAR • • • • VISION: VISION OF RED STAR TO BRING IN MORE PRODUCTS AND SPREAD THE HERITAGE OBJECTIVE: TECHNOLOGICAL INNOVATION, MARKETING INNOVATION TO BRING IN NEW PRODUCTS AND SPREAD ACROSS THE WORLD GOALS: TO DISTRIBUTE THE PRODUCTS ACROSS THE WORLD TO SPREAD THE TRADITION AND IMPROVE CUSTOMER BASE PS: THERE IS NO CLEAR INDICATION IN THEIR CHINESE WEBSITE, THESE ARE TRANSLATED FROM THEIR PROFILE PAGE.
  9. 9. STRATEGIC ALTERNATIVES Stay As is Save $20000 0 cost 0 Revenu e Red Star Ergou tou Go for the Market $20000 0 Cost $1.4M profit with small market
  10. 10. STRATEGIC ALTERNATIVES Stay as Is Export products in SF starting with Chinatown • Pros: Saving of Cost, Administrative expenses and marketing expenses, No hurdle with import facilities with USA • Cons: Loosing out on the huge market of about 0.3 million people, eventually on revenue of around $1.4M (Exhibit 1), Not aligning with Vision statement • Pros: It’s a good opportunity to make people aware about the availability of the brand, capture market and earn more revenue, achieve the goal • Cons: Cost of export is more, the process of finding and setting up distributors is challenging being in country like USA, Need to follow the rules and regulation
  11. 11. RECOMMONDATION • • • • Fine quality products at cheaper rates MY RECOMMENDATION TO REDSTAR IS TO INVEST IN MARKETING AND EXPORT AND GO ABROAD THERE IS A HUGE MARKET AVAILABLE IN THE USA AS USA HAS HUGE POPULATION OF CHINESE EXPATS. IN SF ITSELF THEY ARE AROUND 20%. THEY CAN INVEST IN $2000000 AMOUNT OF MONEY FOR IMPROVISING SUPPLY CHAIN AND MARKETING PURPOSE AND WITH FOLLOWING STRATEGY THEY CAN POSITION THEMSELVES IN THE MARKET THEY CAN EARN REVENUE OF AROUND $1.4M ONLY IN CHINA TOWN CONSIDERING INDUSTRY AVERAGE CONSUMPTION RATE PER ADULT PER YEAR Make products easily available to the customer through different channels Create customer relationship by arranging events
  12. 12. TACTICAL PLAN SOLUTION: • • • Red Star ergoutou production facility THEY ARE WELL SPREADED ACROSS CHINA, CAN USE THIRD PARTY PARTNERS WHO HAS KNOWLEDGE OF EXPORTS TO USA Third party supply chain management TRANSPORTATION TO BE DONE BY WATER TO SAVE THE COST AND EXPORT HUGE QUANTITY TO SATISFY DEMANDS IDENTIFY STRONG DISTRIBUTORS WHO KNOWS THE MARKET WELL, HIRE AND INCENTIVIZE LOCAL WHOLESALERS AND DISTRIBUTORS West coast wholesalers Liquor Store Bars, Karaoke Restaur ants Super markets
  13. 13. BRANDING Product: Better quality, Cheaper, Chinese working class spirit, rich in history Emotional: reminds to Chinese cultural roots, feels like home. 25-55 year old Chinese male & females Functional: Post business meetings, social events, celebrations Experience: Exotic, Authentic, Strong, Ritual, Cultural traditional, communal We will promote the products as an experience and connection with the heritage culture. Red star can implement their entertainment by event strategy in USA also by arranging events in Chinese new year
  14. 14. INCENTIVES • • • • WE NEED TO INCENTIVIZE ALL THE INFLUENCERS OF THE MARKET. BAR TENDERS: INCENTIVIZE BAR TENDERS WORKING IN BARS, KARAOKE IN CHINA TOWN, TO PROMOTE OUR PRODUCTS TO CHINESE PEOPLE, HIRE RELATIONSHIP MANAGERS TO CHECK THE CUSTOMER RESPONSE AND POSITIONING PRODUCTS IN THE BAR DISTRIBUTORS: POSITION THE PRODUCTS IN THE STORES SO THAT THEY ARE EASILY VISIBLE OR CATCH THE EYE PARENTS: REMIND THEM ABOUT THE VALUES AND TRADITION OF CHINA THROUGH ARRANGING SOME CULTURAL EVENTS SPONSORED AND HOSTED BY REDSTAR
  15. 15. VALUE AND ACCESS • By bringing their bai jiu in their home which away from their native we are spreading the culture • It feels like home away from home • Keeping the traditions and culture alive even while living in other countries • A nice opportunity for foreigners to learn more about the culture Bars/ Karaoke • • • Compete with other baijiu and foreign brands Karaoke is traditional place for Chinese to hangout One of the most crowded place and well perceived by Americans also Liquor and local Stores Restaurants • • • • Baijiu is meant to drink with the food while in restaurants Good place to serve the baijiu as a traditional drink Number of restaurants are increasing with the Chinese population Americans are also trying different cuisines • • • Normally in USA all products are accessible through these stores Make it available in different size of packaging like 150ml, 250ml etc. Incentivize store owners to spread word of mouth about availability
  16. 16. DISTRIBUTION AND PACKAGING Distribution Change the color of bottle to transparent white to compete with foreign brands Change the seal to standard, Logo trademark and quality certificate Bars karaoke Liquor stores Super markets
  17. 17. ADVERTISING BUDGET I recommend to spend minimum $200000 USD divided equally into two sections 1) For improvising distribution and implementing the export facility 2) Advertisement Advertisement budget will be divided as follows
  18. 18. THANK YOU
  19. 19. EXHIBIT 1 Profit potential depending on the individual bottle sell Bottle 150ml 500ml 750ml Price in US D Price in Retailers Price to Promotiona tar's Margin Promotion Red S RMB Margin % Retailers l Margin % $4-$5 21-26 CNY 33% 13-16 CNY 10% 11-13 CNY 51% 8-9 CNY $10-$12 61-66 CNY 45% 40-45 CNY 10% 37-41 CNY 54% 23-28 CNY $15-$17 91-96 CNY 58% 55-60 CNY 10% 50-55 CNY 60% 32-35 CNY Total initial investment Net Profit earned Profit potential for first year average consumptio n of the spirits per Average adult per margin per year litre 6000ml $3 $ Profit per adult 18 Chinese assuming population adults in China consuming Town baijiu as 30% 300000 90000 $ Total profit earned per year 1,620,000 $ 200,000 $ 1,420,000

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