MGM Southern Agrifurance Industries limited had recorded its best sales figures since its
inception under the flagship of MGM. Mr. Maran was appreciated by Mr.MG Muthu who is
chairman for the same. The sales is achieved because of their know-how leader ship and the
Indian people change of perspective towards drinking alcohol. The population in India is no
more considering, drinking of alcohol is not as a social taboo.
M/s SAFL is producing 3 million IMFL cases from its Tamil Nadu plant which is well
equipped with atomized machines and technically skilled resources.
Vodka is a distilled spirit with a high alcohol content that can be produced from several
different material and processes different characteristics depending on the creator. Most of
vodka produced these days is made from a grain, though some made form potatoes.
MGM is producing it’s IMFL premium vodka from its plant in Thailand, by utilizing
premium ingredients in international standard and using their innovative skills for different
flavours and maintain high class quality and packaging of the product by anticipating the
consumers’ choice of taste and perspective and to meet their acceptable criteria and
expectations.
MGM SAFL popular products in the market are Apple Vodka, Orange vodka, Krystal Vodka,
Royal hawk, Best choice whisky in the medium segment, Super Atar whisky, Diamond
Whisky, and brady and rum in ordinary segment. SAFL has its good market share in
Southern states and eastern states with good number of personnel to meet the company’s
mission and target. And also, M/S SAFL is producing it’s premium brands “sutra”, “Heavy
Water Vodka” to serve the palatability and expectations of European and American markets.
These premium brands are produced in Norway.
SAFL Claimed major market share in liquor business in Tamil Nadu, where it is started its
operation since 2003-2004. And slowly expanded its market since 2007-2008, to West
Bengal, Bihar, Orissa, Assam, Meghalaya, Jharkhand, Tamilnadu, Pondicherry, Kerala,
Karnataka and Maharashtra. And also, it has planned to enter into the central and western
states of India from 2010-2015.
SAFL has acquired Shaw Wallace bottling unit, which helped them to have a better technical
know-how leadership. They have pioneered in ushering the flavoured vodka trend in India
and hence already had an established distribution network in Tamilnadu.
India is having INR 340 billion market for vodka with the sale of 5 million cases
approximately according to the Industry sales figure estimates. And it is having a growth rate
of 35-40 percent every year. From the total amount of vodka sold, 90% is belongs to the
normal brands and 10% belongs to Premium brands. Though the entire vodka market is very
small compared with other liquors in the segments, it has future in its segment.
As the Indian liquor industry, had been evolving at every stage, these prospects were already
bright enough to woo many organizations. Liquor market in India initially targeted as one
large demographic island, having got fragmented into distinct psychographics’ groups. And
now the industry changed from seller’s market to a buyer’s market to a consumer groups.
The country had undergone a sea change Indian people life styles had changed drastically
from thinking that alcohol consumption is a social taboo to drinking the same with families
and its pears. Social drinking among women also became passion and familiar due to its
increase in urbanisation and globalisation. Since India is fast emerging towards the
developed country in the world people’s mild has broadened and perspective of thinking has
changed. Peoples taste has become choosy in flavour substitution depending on consumption
occasion. This development in the culture has wooed similar organisation in Indian liquor
Industry.
People’s perception on Vodka, they are seeing it as discrete drink. If you drink vodka nobody
will know that you drank. Even females are opting to drink. Drinking vodka is initiating step
before getting introduced to hard drinks. vodka is mild so lot of people will choose to drink.
vodka is considered as a unisex drink. people in India started drinking vodka with family
members.
The Indian liquor industry was estimated at a value of INR 340 billion, growing annually
12-15%. The Industry sold an estimated 115 m cases if IMFL in the year 2008-09 and the
sector expected to maintained its CAGR of 15% while the wine and vodka were expected to
bro at a higher rate the major competitors in the Indian IMFL market were united spirits with
a market share of 60%, Radico Khaitan with 12%, Mohan Meakin having 9% and Jagajith
governing with 8.5% market share.
SAFL is selling its products in Tamil Nadu through TASMAC outlets and 500 institutions.
Companies presents in Tamil Nadu was mainly depending on TASMAC sales on its product
sales to TASMAC. Which is operating by government in 29 districts 41 TASMAC before
with 6645 retail outlets. The Company is having 9 distilleries with total capacity of
producing 35 to 40 lakhs cases for year in Tamil Nadu.
In the year 2008-09 the Chennai Vodka market has sold 1.92 lakhs cases out of rich MGM
has sold 1.25 lakh cases. MGM Vodka was holding 65% Market shares with an average
monthly share of 10000 cases per month. But the sales are dipping from quarter one to
quarter 4. It has sold 12000 cases in quarter 1 and manage to sold 5000 cases in its last
quarter. MGM growth shrinking in width of the distribution but also the length of the
distribution. Quarts size shrunk from 150 cases per month to 17 cases per month. Nips size
shrunk from 9000 cases per month to 4500 cases per month.
When MGM has realised its decline in sales percentage it has started analysing the market. It
has traced back to the Pallavaram and Ambattur depots, which had well established elite
clubs, bars and institutions where MGM had no brand presence. Demand for the MGMs
quarts and nips has declined because of poor visibility and availability resulting in constant
poor performance. MGM has faced shortage in supply of quarts’ bottles from December to
February 2009.
MGM had very less brand value in terms of popularity and less preimmunises in its products.
Peoples perspective in choosing the brands has mainly depended on the brand popularity and
brand preimmunises it has been set in the mind of consumers a good level of packaged
product with a higher value we give the best taste and the quality of the product will meet the
satisfaction level. The lakh of above said qualities in MGM brand has resulted in decline of
it’s a sales and market share and compared with other competitors.
MGM has faced its very high level competition from Romanov, white mischief, Smirnoff,
Magic movement, fuel, Gary Goose, shark tooth since MGM Vodka availability is absent in
the premium brands people are not interested by from its welled established sales channel
TASMAC.
People liked the writing on the bottles and each brand suggested an element of youthful ness
and had created aspirational value among the consumers. MGM has failed to do the same.
Other brands are managed to have a strong legacy for themselves, where MGM settled as a
normal level brand. The competitor brands are mentioning the process of the manufacturing
Romanov is producing its Vodka to a world class tripled distilled blend also maintaining high
level clarity and purity with high level packaging. White Mischief and magic movements are
also maintaining the same level of production and packaging qual
ity. Which is giving them
the premium brand look. The same was missed by MGM brand.
Though compare to other brands are MGM as a brand name offered comfort, but they did not
translate to aspiration. Even though if MGM managed to evoke aspiration on a brand name
level, its packaging and retailer push is effected it’s a brand aspiration. When compare to
consumer expectations, which asked for high level brand quality and for peer group
acceptability and a royal status and the more publicity created a large gap because of which
MGM clearly fell short compared with its competitors. The name of the brand and the
manufacturing location of the product has not allowed MGM Vodka to give a premium brand
look also the limitations in taste also contributed the down fall of MGM brand.
Since the change in consumer’s perspective vodka market share in liquor segment increased
drastically. the increase in market has been captured by the competitors with their premium in
brand, high class quality, attractive packaging of the product. The newly evolved consumer
market has attracted towards the premium brands. MGM has failed to penetrate or create the
preimmunises in its product. Unavailability of the product at the premium outlets and the
premium demography markets caused damage to the market share. Lagging in above
mentioned qualities of the product contributed MGM to decline their market share.
The later analysis of the market has given very clear indications that vodka was something
that consumers would like to drink it as a discreet drink because of its niche characteristics
and its image in the peer group. Hence it is obvious that designing of the brand to be done in
such a way that the product would have a flamboyant and loud image. MGM’s product is
lacking in the brand designing and product appeal in the market.
Restrictions from the Indian excise and regulatory norms will not allow the product to go for
direct advertisements. Publicity of the brand is missing, Since MGM doesn’t have any brand
products like stirrers, which can be used for advertising the brand.
Price of the product which made available for the masses, caused the brand image in lower
level brand. Which has not attracted the premium or below premium consumers. As the
masses, will change their consuming behaviour every time from brand to brand. Whereas
premium consumers will have their constant behaviour in choosing the brands. Lack of
distribution and retail channels in premium outlets also contributed market share decline
product.
Label Quote also contributes the consumers in attracting the consumers. Where other
competitors are giving very attractive quotes. Such As White Mischief is giving the quote as
“ever youthful” which will attract the consumers in choosing the brand.
Well designed and well packaged product will give an image of royal appeal in the brand and
will attract the consumers view. By maintaining the above said qualities will place the
product in premium appeal which will affect in increase of market share.
Distribution of the product only in in TASMAC retailers has given an ordinary level appeal
of the product. products are not available in premium stores and institutions. Which created
lower visibility of the product in Class’A’ and class ‘B’. Also, lack of distribution channel
which caused in unavailability in the major 17 vodka depots where 75% of vodka products
are sold.