The document provides an analysis of Pernod Ricard's spirits portfolio and marketing strategy in Taiwan. It outlines key brands such as Chivas Regal, Martell cognac, and Royal Salute scotch. It then analyzes the Taiwanese market, noting opportunities and threats. Alternative strategies are evaluated, including distribution channels, pricing with duty changes, and promotional schemes. The marketing strategies section outlines plans for distribution, pricing, and promotional campaigns to introduce a new standard scotch product and target various consumer groups.

1. Marketing Strategy
Seagram in Taiwan
Melissa Fegarido
Raphael Foglio
Cory Larson
Joseph Lin

2. Company Background

3. Pernod Ricard
 Founded 1975
 Worldwide operator in spirits and
wines
 Corporate strategy:
– Concentrate on key brands
– Develop strong local or regional brands
and wholly-owned distribution networks
– Motivate employees through highly
decentralized organization
 Acquired Seagram in 2002

4. Pernod Ricard
KEY BRANDS
 Chivas Regal  Pastis 51
 Clan Campbell  Ricard
 Havana Club  Ramazzotti
 Jacob's Creek  Seagram's Gin
 Jameson  The Glenlivet
 Martell  Wild Turkey

5. Chivas (12- and 18-year)
 Globally
recognized
 Premium blended
scotch whisky
 2.9 million cases in
2003
 Key markets
Pour two shots of include Japan,
Chivas Regal 12 over Korea, China,
fresh ice cubes Travel retail
channel

6. Martell (cognac)
 Since 1715
 Blended from rare
eaux-de-vie
(distilled light white
wine)
 Aged in private
cellars 15 years
 1.1 million cases in
Tango a Paris: In a long 2003
glass, pour Martell over
ice, top with fresh  Key markets include
pineapple juice, splash of Duty Free China,
tonic, and a cherry Singapore, Malaysia

7. Martell range
 Martell VSOP (s)
 Martell Cordon Bleu (p)
 Martell XO Suprême (p)
 Martell Noblige
 Martell VS
 Médaillon
 Martell Extra
 Classique de Martell
 L'Or de J&F Martell
 Martell Creation

8. Royal Salute (21 years)
 First produced in 1953
 World’s leading super
premium scotch
 Malt and grain from
Scotland
 76,000 cases in 2003
 Key Markets: Taiwan,
Korea, China, Japan,
Best enjoyed neat Travel retail channel
and unmixed

9. Market Analysis

10. Impact of Duties
Super Premium Premium Premium Standard
Other
Scotch Scotch Cognac Cognac
Royal J.W. Chivas J.W. Seagram UD/Henn Seagram UD/Hen Japan
Cost per Bottle NT$ Salute Premier Regal Black XO XO VSOP VSOP Whisky
CIF Costs 832 832 272 272 976 976 464 464 180
Current Duty 330 330 330 330 750 750 750 750 149
Total Current Costs 1162 1162 602 602 1726 1726 1214 1214 329
Current Target Price 2170 2300 680 650 2080 2200 1100 1100 480
Current Target Margin 1008 1138 78 48 354 474 (114) (114) 151
Proposed Duty
CIF Costs x 12.5% 104 104 34 34 122 122 58 58 23
+NT $170 x *.75 128 128 128 128 128 128 128 128 128
+5% VAT 12 12 8 8 13 13 9 9 8
Proposed Duty 244 244 170 170 263 263 195 195 158
Potential Savings NT$ 86 86 160 160 488 488 555 555 (9)
Potential Savings US$ 2.61 2.61 4.82 4.82 14.7 14.7 16.7 16.7 (0.3)

11. Strengths
 Globally recognized brand
 Range of product line
 Highly decentralized organization
 Wholly owned distribution networks

12. Weaknesses
 No product in the standard
category
 Prestige brand name limits their
pricing strategy

13. Opportunities
 No brand extension in standard category
 Brand consciousness is high
 Consumers more price conscious
 Decrease in “on-premise” sales
 Duty regime changes
 Recent one yr ban on all U/D Hennessy product

14. Threats
 Low brand loyalty
 Competitors spend more on promotions
 Traders and brokers - “unauthorized
commercial activity”
 Domestic lower-priced “look-alikes”
 Entrance of Japanese whisky

15. Alternative Evaluation

16. Distribution Channels
 Develop private distribution channel
– Cuts costs down in long-run
– Initial startup costs are substantially high
 Build plants to produce in Taiwan
– Avoids tariffs and duties altogether
 Focus on hypermarket distribution
– Growing trend shows increasing hypermarket preference
 Introduce direct distribution from internet selling
– Reduce costs by cutting middlemen

17. Duty Regime
 Two options are available
– Reduce pricing accordingly to increase sales volume
– Hold pricing strategy to capitalize on duty savings
 Ensure brand prestige image
 Adapt accordingly to environmental changes
– React to competitors’ actions toward situation
– Government regulations may change as political status varies

18. Promotional Scheme
 Increase mass media advertising
– TV, radio, industry related magazines
– Outdoor ads such as billboards within airports & subways
 Design promotional packages to induce trial
– Develop strategic alliance with different venues
– Promote newly introduced revolutionary product

19. MARKETING
STRATEGIES

20. Distribution Strategy
 Maintain relationship with exclusive distributor
– Formosa Trading Ltd.
 Develop compensation programs
– Prevent “unauthorized activity”
 Focus on hypermarket distribution
– Trend displays drinking at luxury of own home
– Coordinate with introduction of new product
 Direct distribution through new channels
– Internet selling, mail-in catalogues
– Cheaper pricing due to loss of middlemen

21. Pricing Strategy
 Concentrate on “HOLD” pricing strategy reacting to duties
– Ensures prestige brand image
– Capitalize on duty reductions to increase profit
 Focus on selective pricing scheme
 Undermine competitors with new standard product
 New product prices stay competitive within its category
 Existing products’ prices will remain relatively constant

22. Promotional Strategy
 Focus mainly on chain of referrals & word of mouth
 Launch promotional packages within different venues
– Executive suite gift packages within high-end hotels
– Duty-free premium packages within airlines
 Mass customization towards major consumers
– Applies only to newly introduced standard product

23. Promotional Strategy
 Alpha Campaign
– Promotional packages consist of high-end products
– Form strategic alliance with major hotels
– Targets commercial meetings & professional luncheons
 Beta Campaign
– Economical combinations including all category goods
– Promote through airlines & new internet distribution
– Targets home consumers & small businesses

24. Product Assessment
 Introduce new line of product within standard Scotch
whisky category
– High growth rate market
– Unexplored territory
 Pricing of new product will remain competitive
 Unique design of packaging to prevent duplications
 Target urban lifestyle consumers
– Young adult businessmen
– Home owners

25. Chivas Revolve