Fall
2010
MARKET ANALYSIS & CONSUMER BEHAVIOR REPORT M.H. • Maj Kristensen • F.R. • D.V. • N.Z. MKTG 341 – Consumer Behavior – Dr. Yam Limbu
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TABLE OF CONTENTS Table of Contents ................................................................................................................................................. 2 1. Introduction ..................................................................................................................................................... 3 1.1 Introduction ..................................................................................................................................................................................... 3 1.2 Objective of Study .......................................................................................................................................................................... 3 2. Methodology for Study .................................................................................................................................... 4 2.1 Secondary Data Collection Procedures................................................................................................................................. 4 2.2 Primary Data Collection Method ............................................................................................................................................. 4 2.4 Plans for Primary Data Analysis .............................................................................................................................................. 4 3. Market Analysis................................................................................................................................................ 5 3.1 Overview of Industry and Growth .......................................................................................................................................... 5 3.2 Diageo Company Profile.............................................................................................................................................................. 6 3.2.1 Diageo............................................................................................................................................................................................6 3.2.2 Cîroc ...............................................................................................................................................................................................7 3.3 Diageo SWOT Analysis ................................................................................................................................................................. 8 3.3.1 Strengths ......................................................................................................................................................................................9 3.3.2 Weaknesses .................................................................................................................................................................................9 3.3.3 Opportunities ..........................................................................................................................................................................10 3.3.4 Threats .......................................................................................................................................................................................10 3.4 Competition and Market Share ............................................................................................................................................. 10 3.5 Industry Conditions ................................................................................................................................................................... 11 3.6 Diageo Marketing Strategies .................................................................................................................................................. 13 4. Consumer Behavior ........................................................................................................................................ 15 4.1 Data Analysis................................................................................................................................................................................. 15 4.1.1 Study Sample Description..................................................................................................................................................15 4.2 Influences ....................................................................................................................................................................................... 16 4.2.1 External Influences ...............................................................................................................................................................16 4.2.2 Internal Influences ................................................................................................................................................................18 4.3 Decision Process.......................................................................................................................................................................... 19 4.3.1 Problem Recognition............................................................................................................................................................20 4.3.2 Information Search...............................................................................................................................................................20 4.3.3 Selection and Purchase .......................................................................................................................................................20 4.3.4 Post-purchase Evaluation..................................................................................................................................................21 5. Findings and Recommendations ..................................................................................................................... 22 5.1 Summary of Key Findings........................................................................................................................................................ 22 5.2 Recommendations for Managerial Implications ........................................................................................................... 23 6. Conclusion...................................................................................................................................................... 25 7. Appendix........................................................................................................................................................ 26 7.1 Complete Primary Data Results............................................................................................................................................ 26 7.1.1 Demographics .........................................................................................................................................................................26 7.1.2 Lifestyle & Attitudes .............................................................................................................................................................28 7.1.3 Satisfaction...............................................................................................................................................................................29 7.1.4 Information Search, Influences & Decision-Making...............................................................................................30 8. References ..................................................................................................................................................... 32
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1. INTRODUCTION 1.1 Introduction The vodka segment of the United States spirits industry is the second largest segment, accounting for 23.6% of the market. In 2009, sales of vodka generated over $40 billion in revenues, about 18.3% of the market’s aggregate revenues. Additionally, while the spirits market saw a slow in growth in recent years due to the recession, vodka grew 4.1% compared to the 1.6% total spirits growth. The leading player in the global spirits market is Diageo PLC, generating a 5.1% share of the market’s volume. Diageo PLC produces and distributes a wide variety of premium spirits, beer and wine. This analysis examines one of Diageo PLC’s premium spirits brands – Cîroc – launched by the company in 2003.
1.2 Objective of Study This report aims to examine the market strategies of the Cîroc vodka brand and consumer response to the brand. Specific strategies of marketing will be examined, including luxury and class as the appeal for this premium vodka, as well as endorsement and cooperation from celebrity Sean “Diddy” Combs. Secondary research will be collected for further analysis, and primary research will be conducted to assess the consumer behaviors of targeted markets.
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2. METHODOLOGY FOR STUDY 2.1 Secondary Data Collection Procedures We collected secondary data from various sources, including news sources, company websites, and thirdparty company profiles and industry analyses. Combined with results from our primary research, we will be able to generate a profile of the average consumer to determine whether market strategies are being successfully received and what changes can be made to better promote the brand.
2.2 Primary Data Collection Method To understand the influences of consumers during their decision process, we conducted a survey of local college students. Through a series of closed format questions, consumers relayed their perceptions of the spirits industry, preferences in brand and category choices, as well as factors they consider when making a decision to consume alcoholic beverages (Cîroc vodka or otherwise). Questions were presented in various formats, including qualitative multi-point rating (e.g. Strongly Agree to Strongly Disagree), multiple choices (e.g. What do you look for in a brand? – select all that apply), and quantitative numeric prompts (e.g. How many times a week do you consume alcoholic beverages?). Additionally, a taste test was conducted after subsequent analysis from the survey in order to test a recommendation for improvement (which will be discussed further in later sections).
2.4 Plans for Primary Data Analysis Data collected from the survey was analyzed to ascertain the implications of consumer behavior. By comparing secondary data research and primary data collection, we drew conclusions about the success of the brand, as well as the effectiveness of the marketing strategies employed by the company. With careful analysis of the research findings, it will be possible to make recommendations for further improvement of the Cîroc brand.
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3. MARKET ANALYSIS 3.1 Overview of Industry and Growth The spirits market consists of the sale of brandy, gin, liqueurs, rum, specialty spirits, tequila, vodka, and whiskey. The spirits industry has been considered “recession proof,” but the recession of recent years has shown that the industry is not in fact “recession proof,” though it has proved to be somewhat “recession resistant”. In recent years, there was a noticeable “softening” of revenues, and a shift of spending away from bars and restaurants. Despite economic conditions, the global spirits market saw steady growth between 2005 and 2009, largely due to growth in the whiskey and vodka categories. Furthermore, growth in this market is expected to accelerate in the coming years. The United States, which this analysis will focus more specifically on, accounts for 20.2% of the global spirits market value. To clarify, the alcohol beverage industry refers to liquor, beer, and wine, while the spirits industry refers to liquor alone. In 2007, the United States beverage alcohol industry contributed $382 billion to the economy, and 30% of this came from distilled spirits alone, amounting to $113 billion. Furthermore, there are over 3.9 million jobs available for U.S. workers in the spirits industry and wages for these workers generated $89 billion. This large industry also significantly helps our government and country as a whole. In 2007, the alcohol industry contributed more than $40 billion to local and state revenues; from this, $20 billion of revenue was received indirectly from taxes such as personal income, corporate, property, and other taxes generated from the alcohol industry. Another $8.2 million or 40% of total revenues were from the distilled spirits alone. Also, distilled spirits accounted for 36% of total beverage alcohol revenue or $14.6 billion. According to DISCUS research, in 2008 the revenue of the spirits market slowed to 2.8% and volume dropped to 1.6%, perhaps due to the drop in on-premise spirit sales. The typical top buyers of vodka (and other spirits for that matter) are retailers, supermarket chains, alcoholic beverage wholesalers, as well as companies in the hospitality industry (such as bars and clubs). However, these buyers respond to end-consumer demand, stocking primarily the most popular brands. Therefore, it would provide a considerable advantage for the marketers of a brand to target consumers, as it is ultimately their perceptions and preferences that determine the success of a brand.
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3.2 Diageo Company Profile 3.2.1 Diageo The leading player in the global spirits market is Diageo PLC, generating a 5.1% share of the market’s volume. Diageo is the world’s largest alcohol group. Diageo produces and distributes a wide variety of premium spirits, beer and wine. This analysis examines one of Diageo’s premium spirits brands, Cîroc, launched by the company in 2003. The top markets for this brand include the United States and Brazil. However, Diageo operates heavily around the world. Diageo performs a variety of operations including producing, distilling, brewing, bottling and packaging, distributing, developing and marketing several brands. The company has operations in over 180 markets around the world. Diageo has been largely successful in all of these areas and has become the leader of the industry. In fact, seventeen of Diageo’s brands were listed on the top 100 premium distilled spirits brands worldwide in 2006. Diageo has eight global priority brands, which accounted for 59% of total volume and contributed net sales of £4,283 million in 2007. Diageo split the remaining brands into two different segments, local priority brands and category brands. Local priority brands make the greatest contribution in one geographic area rather than globally. Diageo has twenty-six local priority brands, which contributed 18% of volume or 25.6 million units, and net sales of £1,641 million in 2007 as well. Smirnoff is Diageo’s most successful brand when considering volume and sold 28.1 million units in 2007. Diageo is a publicly traded company and was the 17th largest publicly quoted company in the United Kingdom in August 2007, with a market capital of approximately £26.7 billion. Diageo is completely owned by Large Block Holders, made up of 506 Institutions and 296 Mutual Funds. The top ten Institutional holders are: Barrow, Henley, Mewhinney, & Strauss LLC; Harris Associates LP, Dodge & Cox, Davis Selected Advisers LP, Metropolitan West Capital Management, LLC, Schafer Cullen Capital Management, Inc, Fiduciary Management, Inc., Brown Brothers Harriman & Company, Wentworth, Hauser, & Violich, Inc., and Fidelity Management & Research. The top ten Mutual Fund holders are Vanguard Windsor II Fund, Tweedy Browne Global Value Fund, Oakmark Equity and Income Fund, Dodge & Cox International Stock Fund, Dodge & Cox Stock Fund, Pioneer Cullen Value Fund, FMI Large Cap Fund, American Beacon Large Cap Value Fund, BlackRock Global Allocation Fund, Inc., and Oakmark Fund. In 2007 Diageo’s revenue increased by 2.2% from 2006 to £9,917 million. Diageo attributes this growth to the expansion of Johnnie Walker, Smirnoff, Baileys and Captain Morgan brands to other global markets, which
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have been quite successful. In 2007 their operating profit grew 5.6% from 2006 to £2,159 million during the fiscal year. Also, Diageo’s net profit did decrease by 22% from 2006 to 2007 to £1,489 million in the fiscal year of 2007. Diageo’s top three competitors are Pernod Ricard SA located in Paris, France; Beam Global Spirits & Wine Inc located in Deerfield, Illinois; and the SABMiller PLC in London. Diageo PLC had 22,086 employees as of 2007 and has a revenue/turnover rate of 9,917. Diageo produces and distributes several premium spirit brands, beers, and wines. Their collection of premium global brands includes Johnnie Walker (Red Label, Black Label, and other variants), Smirnoff Vodka and Smirnoff (Ice, Black Ice, Twisted V, Mule, Spin, Storm, Caesar, Signatures, Source, Fire, Raw Tea, and Caipiroska), Bailey’s Irish Cream Liqueur, Guinness, Tanqueray, José Cuervo, Captain Morgan, and J&B. However, Diageo also has a number of local priority brands located in regions around the world such as Crown Royal Canadian whisky in North America, Windsor Premier whisky in Asia Pacific, Buchanan’s De Luxe whisky in International, Gordon’s gin in Europe, Cacique rum in Europe, Bundaberg rum in Asia Pacific, Seagram’s VO whisky and Seagram’s 7 Crown whiskey in North America, Bell’s Extra Special whisky in Europe, Malta Guinness nonalcoholic malt in International and Sterling Vineyards wines in North America. Diageo also has category brands including beer, wine and spirits, which accounted for 23% of total volume in 2007 or 32 million units and net sales of £1,550 million. Some of these category spirit brands are Gordon’s gin, Gordon’s vodka, The Classic Malt whiskies and White Horse whisky. Category wine brands include Beaulieu Vineyard, Sterling Vineyards and Chalone Vineyards in the United States, Blossom Hill in the United Kingdom, and finally Barton & Guestier and Piat d’Or in Europe. Diageo also owns several brands that they either brew or sell under licensing agreements. Diageo owns Guinness, Red Stripe, Pilsner, Tusker, and Harp lager. Diageo also sells under license Tiger beer in Malaysia and Heineken lager in Jamaica. Excluding Guinness, Diageo sold 12.4 million units of beer, which accounted for £673 million in net sales in 2007.
3.2.2 Cîroc Cîroc is unique from other vodkas because its composition is grape, unlike most brands which use potato. Cîroc also uses innovative cold fermentation and maceration techniques, which make Cîroc an extremely smooth vodka. The name "Cîroc" comes from the combination of two French words: Cime and Roche. Cime means peak or summit-top and Roche meaning rock. Cîroc’s name references the vineyards where
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the Mauzac Blanc grapes are grown, and the village walls of the famous medieval Cordes-sur-Ciel near the vineyard. Cîroc Ultra-Premium Vodka prides itself on not having the “alcohol burn” that is found when tasting any other vodka, and is one of the few types of vodka that is made entirely from grapes. Cîroc is made from top quality "snap frost" grapes – Mauzac Blanc grapes grown in Gaillac, one of the oldest and highest elevation vineyard areas in France. Grapes do not need heat to release their sugars like grain, which allows Cîroc to use cold maceration, cold fermentation, and cold storage processes. These processes extract more flavor than other commonly used practices. The Cîroc fermentation process lasts for two weeks to ensure the best possible flavor. While all vodka is distilled, Cîroc Vodka is distilled five times. The Mauzac Blanc ‘heart’ is distilled four times before being blended with the Ugni Blanc grape spirit from Cognac, which is also then distilled four times. The last distillation takes place in a custom-made Armagnac style copper pot, giving it an incredibly smooth texture. Since October 2007, sales of Cîroc have jumped from 60,000 cases to 400,000 cases. After Sean Combs signed on in 2007 as 50% owner of the brand, Diageo sold $2 billion in sales in 2008. The brand also surpassed Belvedere as the second highest ranked vodka in the “ultra-premium” category. Cîroc came in third as the best Vodka of 2010 according to a blind taste conducted involving hundreds of brands of vodkas, where the fifty best were ranked. Also, in 2009 the brand grew 41.7% to 350,000 cases, and just released two new variations: Cîroc Red Berry and Cîroc Coconut.
3.3 Diageo SWOT Analysis Strengths
Weaknesses
Wide portfolio of products Market leadership Acquisitions and disposals
Low average revenue growth rate Contingent liability and litigations
Opportunities
Threats
Enhanced operations in the Asia Pacific Positive outlook for global spirits market Growing wine market Industry consolidation
Rising raw material prices Changing consumer preferences
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3.3.1 Strengths Diageo is the leading premium spirits business in the world by volume, by net sales and by operating profit. Furthermore, the company manages eight of the world’s top twenty spirits brands. Diageo has operations in several different aspects of the alcoholic beverage industry in over 180 markets globally. These activities include producing, distilling, brewing, bottling and packaging, distributing, developing and marketing a number of extremely popular brands such as Smirnoff, Jose Cuervo, Bailey’s Irish Cream, Guinness, Captain Morgan, and Tanqueray. Also, Diageo has licensing agreements with other companies, which allows them to brew and sell other beer brands including Budweiser. These brands have been extremely successful, especially in recent years. For instance, seventeen of Diageo’s brands were included in the top 100 best premium distilled spirits brands worldwide in 2006. Among these exceptional brands, José Cuervo has remained Diageo’s most successful in North America and many of their other markets and Diageo will continue to have exclusive distribution rights of José Cuervo through 2013. Beyond this, Diageo has used exceptional tactics to eliminate competition. The company has acquired and then disposed of a number of different business shares including The Old Bushmills Distillery Company Limited, Sichuan Chengdu Quanxing Group Co., Ltd, and even General Mills. These acquisitions allowed their business to grow substantially in revenue and efficiencies.
3.3.2 Weaknesses On the other hand, in comparison to its competitors Diageo has a low average revenue growth rate. The company’s growth rate from 2003 to 2007 was only 3%, yet during this period Pernod Ricard had a growth rate of 16% and Heineken’s was 9%. This shows that Diageo’s growth rate is substantially lower than its two greatest competitors which could lead to a decrease in market share. Also, Diageo has caused a great amount of debt for a third party to the amount of about $200 million after the disposal of Pillsbury which will affect Diageo’s performance financially. Moreover, there is ongoing litigation in Turkey regarding one of Diageo’s subsidiary’s, and involves the importation value and duty payable on some of their products. If found guilty Diageo may be responsible for a great amount of fines, and this would naturally have a huge negative impact on their profits.
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3.3.3 Opportunities Diageo is focusing in on the Asia Pacific market, due to the fact that this market accounts for 60% of the world’s spirits consumption and is still rapidly growing. Revenues from the Asia Pacific market reached over $1,839 million in 2007, which was an increase of 8.7% from 2006. The company has also embarked on a joint venture with Radico Khaitan in India to expand brand marketing and distribution. Also, in early 2007 invested £100 million to expand its Scotch whisky operations in Scotland. Furthermore, the international spirits market is continuing to grow, especially in the wine market. Also, not only are US consumers drinking more wine, but they also tend to pay more than Europeans. Diageo has the following premium wine brands Beaulieu Vineyard wine, Sterling Vineyards wine, Chalone Vineyards wine, Blossom Hill wine and Piat d’Or wine.
3.3.4 Threats Due to the newly successful ethanol market, the prices of two primary ingredients used to produce alcohol have gone up: barley and molasses. As a result of this, transportation and supply costs increased. Also, energy costs have increased manufacturing costs significantly. But, various other costs have increased such as grains, glass, cardboard, and labor, which could negatively affect a company’s margins. Consumer preferences are ever-changing as well. For instance, consumers have become more concerned about the negative health impacts of beer and have begun to choose wine or other spirits instead. Lastly, due to the consolidation going on in the spirits industry competition is increasing and companies are more at risk of losing market share.
3.4 Competition and Market Share The vodka segment of the United States spirits industry is the second largest segment, accounting for 23.6% of the market. In 2009, sales of vodka generated over $40 billion in revenues, about 18.3% of the market’s aggregate revenues. Additionally, while the spirits market saw a slow in growth in recent years due to the recession, vodka grew 4.1% compared to the 1.6% total spirits growth. Diageo categorizes its brands into three different groups: premium global priority brands, local priority brands, and category brands. Diageo has eight different premium global priority brands including Smirnoff Vodka and Smirnoff,
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Captain Morgan, J&B, Johnnie Walker, Guinness, Tanqueray, Baileys Original Irish Cream liqueur, and José Cuervo. These brands accounted for 83.3 million units or 59% of total volume in 2007. Local priority brands accounted for 25.6 million units or 18% of total volume, and category brands sold 32 million units or 23% of total volume. Among these brands Smirnoff has been most successful in terms of volume, and in 2007 was ranked the number one premium vodka and the number one premium spirit brand in the world. Another largely successful Diageo brand is Johnnie Walker which ranks number three on the list of premium spirit brands in the world, holds the number one rank for Premium Scotch whisky in the world, and J&B ranks number two. Bailey’s Irish Cream liqueur sold 7.4 million units in 2007 and is the number one liqueur in the world. Captain Morgan was also ranked as the number two premium rum brand in the world and sold 7.8 million units in 2007. Other Diageo successes in 2007 are Tanqueray which ranked number five among premium gin brands in the world and José Cuervo was the number one premium tequila in the world. Aside from spirit rankings, Diageo also has one booming global priority beer brand, Guinness, which sold 11.3 million units in 2007. In 2009 the market share for the alcohol industry as a whole was as follows: 55.4% beer, 14.4% wine, and 30.2% spirits. However, in 2010 the market share of beer decreased by 4.5%, wine increased by 1.7%, and spirits increased by 2.8%. Vodka alone increased by 1.7%.
3.5 Industry Conditions Expanding to the Asian market and conquering it is now the goal of many companies within the spirits industry. Even though this market already nearly consumes 60% of the world’s spirits this segment is still growing and at rapid rates. Both North and South America are expected to grow moderately in consumption. Vodka accounts for 18% of the world spirit consumption and is expected to continuously grow and remain as the most consumed spirit. Wine is also growing greatly in the US market, far past even Italy, France, and Spain. This means great things for the revenues gained from wine since the average US retail price of a bottle of wine is twice more than bottles sold in France, and more than three times the average in Italy. Wine consumption is growing fast in the United Kingdom, Australia, Canada, Germany, Russia, Scandinavia, and Asia. Diageo is also in the process of creating other beverages in response to an increased demand for healthier drinks and non-alcoholic beverages globally. Diageo can boost revenues if they respond to these consumer changes and launch products to increase its revenue and market share.
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Many companies have begun to join together and consolidate in order to decrease competition and take over the market. International brewers have been investing in other countries such as China, Latin America, and Russia to try to penetrate new markets. Diageo has some strong competitors hoping to accomplish these same goals including Bacardi, Heineken, Carlsberg, Brown Forman, Molson Coors, and Pernod Ricard. These other companies along with Diageo account for 60% of global volume sales. Many of these companies have formed alliances with brewers in foreign countries such as Brazil, India, Russia, and China because they can offer a broader possibility of sales and marketing techniques these manufacturers lack. These processes are especially taking place in the FABS industry, which includes beer, cider, and other flavored alcoholic beverages. However, there are some limits to growth. Tastings are a key way to market new brands in order to ensure products meet the consumers since there are approximately 5,000 brands currently in the US market and hundreds added every year, yet there have been several new restrictions placed on tastings with only fortythree states allowing some sort of tasting. Also, companies believe that their impulse buying sales and convenience purchases are going down because many states do not allow spirits purchases on Sundays. Furthermore, alcoholic beverages are the most taxed items in the US and distilled spirit taxes were recently increased which led to thousands of workers losing their jobs. It is important to note that an increase in these taxes do not further benefit the state either. Next, there are further national restrictions on spirits sales. Beer items may be transferred in bulk or in cases from brewery to brewery as long as they are owned by the same company, but this is not true for spirits, which can negatively affect their sales when trying to provide wholesalers and retailers with an assortment of their goods in one shipment. In addition to this, distilleries may begin to be taxed further or have their production cut down due to the Clean Air Act. This Act states that the Environmental Protection Agency (EPA) can regulate the ethanol (alcohol) emissions released in their processes because ethanol is a volatile organic compound that destroys the ozone. On the other hand, many companies within the alcohol beverage industry are trying to fight this because their profits will drop dramatically if their production decreases and they also claim that ethanol is “not very reactive and plays an insignificant role in the formation of ozone” (Discus).
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Aside from these restrictions growth for the vodka market looks promising with sales rising each year. Also, Diageo’s innovative use of technology in their fermentation and distillation processes leaves them ahead of their competitors.
3.6 Diageo Marketing Strategies Originally when Cîroc first launched in 2003, the target segment was towards “urban clienteles” yet over the successful years the segmentation has changed. In order to create better exposure of the brand, Diageo introduced the Cîroc brand to assorted audiences at nightclubs as well as different venues throughout the United States. The positioning strategy that Diageo chose to use in order to successfully position the Cîroc brand was a rather brilliant decision. The Diageo company considers the Cîroc brand to provide consumers with “an exquisitely smooth, fresh, and innovative vodka experience.” Diageo created such an upscale identity for the Cîroc brand that creates nothing less than a luxurious and high-class image. Diageo differentiates its product by making Cîroc from grapes, unlike other types of vodka, which gives Cîroc a distinct taste. Additionally, the Cîroc brand is also 96% distilled and is not aged, which gives the brand a sense of uniqueness from contrasting vodkas. Because the spirits market is relatively mature, it is important for spirits producers to differentiate their products. Such product differentiation is relatively difficult, as brands compete within each spirit category as well as with other spirit categories, alcoholic beverages, and alternative beverage choices. To achieve such differentiation, Cîroc was marketed as the world’s “most sophisticated vodka.” The vodka market is such a competitive environment the pricing strategy it is very important for the companies. Most brands are becoming very creative when it comes to the pricing of various brands. Brands such as Smirnoff and Svedka have set their product prices at approximately $11.99 and $13.99 respectively for a 750 ml bottle. Cîroc on the other hand offers a maximum price of roughly $30.00 for a 750 ml bottle. Diageo offers a rather pricey rate for the Cîroc brand primarily because of its high quality contents.
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Five years after the launch of Cîroc, Diageo teamed up with hip-hop mogul and entrepreneur Sean “Diddy” Combs in 2007 promote the brand. Combs became the celebrity endorser for the Cîroc brand and caused an immediate effect to the sales. According Diageo, “the brand grew 552% from 2007 to 2010 and has replaced Belvedere as the second-ranked vodka in the "ultra-premium" category.” Combs’ developed such an exposure of the brand by using different celebrity events to successfully promote the brand. For example, Cîroc has been promoted at major events such as the Grammys, the Oscars, basketball’s ALLSTAR weekend in Dallas, Texas and even Fashion Week in New York City. With the many sponsorships and red-carpet appearances, the brand was titled “Official Vodka of New Year’s Eve.” As half owner of the brand Sean Combs agreed to manage all branding and marketing initiatives for Cîroc Vodka as well. Combs said he agreed to the deal because the company realized that "I'm not just a celebrity endorser, I'm a brand builder. I'm a luxury brand builder." "They're looking for something that tastes like their lifestyle," he said. "It's that trendsetter, that hipster, someone who's looking for luxury and looking for something better." The brand began focusing on key influential people and ran commercials on the Bravo and E! networks and print ads such as Vibe and Hip Hop Weekly. Recently they have broadened their target market to other more traditional upscale audiences, and ran commercials on a resort network called Plum TV, that is shown in Aspen, Nantucket, the Hamptons and Miami Beach, which strives to target a more “active, influential and educated” demographic. Lastly, by Sean Combs joining the brand Diageo hoped to capitalize on his popularity in both the entertainment business and the African American community.
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4. CONSUMER BEHAVIOR 4.1 Data Analysis The results of our primary data collection produced a thorough look into the behavior of college students as consumers of alcoholic beverages. By analyzing these results, our group was able to develop profiles of college student consumers to better understand the external and internal influences which affect their lifestyles, as well as the process by which they purchase alcohol. The complete results of our primary data can be found in the Appendix. This section will examine the results of our primary research, but first, we will describe the nature of the study sample.
4.1.1 Study Sample Description To conduct our primary research, we surveyed twenty-eight college students. Thirteen respondents were female, and 15 respondents were male (46.4% and 53.6%, respectively). The age range of the respondents was from 20 years old to 25 and older, with the majority (25%) being 21 years old. The students were all sophomores and older, with the majority in their junior and senior year of college (39.3% and 42.9%, respectively). The majority of the respondents were Caucasian (78.6%), but other ethnicities included Hispanic and African American. Of the students surveyed, 100% responded that they drink alcohol. While all respondents reported drinking, their frequency and volume of drinking varied. The results were bimodal – the majority drank either once or twice a month, or 5 to 8 times a month. During each drinking session, the majority drank 3 to 5 drinks each time they engaged in drinking. The vast majority of respondents reported drinking socially (96.4%) and at parties or in clubs (78.6%), while 32.1% said they drink with meals. The alcoholic beverage of choice was beer (57.1%), followed closely by a 42.9% preference for vodka. However, respondents were neither likely nor unlikely to choose vodka over other spirits (mean of 3.32 ± 1.36 out of 5), and only 14.3% claimed to be loyal to a brand of vodka. These results suggest that the average college student prefers beer or vodka, but is not strongly brand loyal.
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4.2 Influences Consumer purchase decisions and behavior are influenced by many factors. These factors can be external influences based on interactions with others, such as cultural tendencies and demographic attitudes, or internal influences, which incorporate perception, learning, motivation, and attitudes. These factors are examined in the following sections.
4.2.1 External Influences CULTURE. Culture can greatly influence a consumer’s decision-making and behavior. Cultures within ethnicity can dictate social norms and expectations, thereby leading a consumer to make decision based on what “one should do,” sometimes without considering individual motivations. Three prominent categories of ethnicities were reported from respondents to our survey: Caucasian, Hispanic, and African American. We examined the drinking behaviors of these three ethnicities by comparing the frequency, volume, and context of drinking, as well as any alcoholic preference and loyalty. Caucasian and Hispanic respondents drank more frequently than African American respondents, reporting five to eight times compared to three to four times. However, all three groups reported the same volume of drinking (3 to 5 drinks) per drinking session. The most popular context of drinking was socially, with 100% of all respondents reporting they drink socially. Over 60% of all respondents in each group also reported drinking at parties and clubs. Alcoholic preference varied significantly between ethnic groups – Caucasian and Hispanic students mostly preferred beer (63.6% and 100% respectively) while 0% of African American respondents preferred beer. One hundred percent of African American and Hispanic students preferred vodka, while only 18.2% of Caucasians preferred vodka to other spirits. Furthermore, African Americans reported being somewhat likely to choose vodka over other spirits (4.00 out of 5), while Caucasians were neither likely nor unlikely to choose vodka (3.23 of 5) and Hispanics were somewhat unlikely to choose vodka (2.00 of 5). Finally, 66.7% of African American students and 27.3% of Caucasians students had previously purchased Cîroc, yet 0% of Hispanic students had purchased Cîroc, though very few claimed to be loyal to a brand of vodka. DEMOGRAPHICS. Demographics can also influence consumer behavior. Demographics include the age, gender, and social class (often determined by income level). We examined the drinking behaviors of these
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demographics to compare the frequency, volume, and context of drinking, and alcoholic preference and loyalty. Male and female students showed somewhat varied preferences and behaviors. Male students drink five to eight times per month, and female students drink 3 to 4 times per month – but both genders reported drinking 3 to 5 drinks per drinking session. Both genders also claimed to drink mostly at parties and in clubs, and almost all drink socially. However, females much preferred vodka – 53.8% of female students prefer vodka, compared to 33.3% of male students. Sixty percent of male students preferred beer, while 53.8% of female students also preferred beer. Both male and female students were slightly likely to choose vodka over others, but not much (only 3.47 and 3.15 on a scale of 1 to 5). More male students than female students had previously purchased Cîroc – 40% of male students compared to 28.6% of female students – but again, only a very small percentage were loyal to a brand of vodka. Differences in social status also showed variances in behavior. Students who make less than $10,000 a year drank more frequently than those who reported making more than $10,000 a year – five to eight times a month rather than three to four times a month. Those who made less also reported drinking more per session, claiming to drink 6 to 8 drinks per session, compared to 3 to 5 drinks of those who made more. However, students of both income levels drank equally at parties/in clubs and socially. Preferences also varied, as 50% of those who made more preferred vodka, while 68.8% of those who made less preferred beer. Students who made more than $10,000 a year were also more likely to choose vodka over other spirits than those who made less. Finally, over 30% of those who made less had previously purchased Cîroc, and over 40% of those who made more had purchased Cîroc, though still very few were loyal to a brand of vodka. Age is often a distinguishing demographic and influence in consumer behavior, but not much variation was present between the ages of students surveyed. This is because our survey focused primarily on college students, whose ages don’t vary much beyond 20 to 25 years old. This may also be the reason that not much difference is observed between other demographics; age is a large influence on consumer behavior. Thus, because the sample surveyed was within the same age range, they tended to show a somewhat similar range of behaviors related to alcohol purchase and consumption. REFERENCE GROUS. Our survey showed that word of mouth (which will be discussed in more detail in the Decision Process section) was a main source of information search for student consumers. This would suggest that consumers depend on reference groups as a source of recommendation and frame of
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reference for purchases. However, respondents claimed that they would not be influenced by a celebrity endorsement in their decision to purchase alcohol. On a scale from 1 to 5 (one being very unlikely and five being very likely), the average was 2.75 with a standard deviation of .89. This shows that consumers are not affected by celebrity endorsement of this specific product range. Likewise, students reported little influence from family members; 71.4% said that family had no influence on their purchase decisions, and another 25% indicated that family only somewhat influenced decisions. Friends, however, did seem to have some influence – 67.9% reported that friends somewhat influenced their purchases, though only 3.6 percent felt a strong influence from friends make specific purchases. Thus, it seems that consumers are influenced not so much by personal contacts to make purchases, but rather the overall reputation of a brand. Other contributing factors are examined in the Internal Influences section.
4.2.2 Internal Influences Internal influences on consumer behavior are based on an individual’s perception of a brand, what they’ve learned about the brand, as well as purchase motivations and overall attitudes towards products and product features. These influences are further examined in the following section. PERCEPTION. Perception of a brand encompasses how a consumer sees the brand, regardless of whether or not these perceptions are accurate. Our survey asked respondents to comment on the influence a brand’s image and popularity had on their decision to make a purchase on a scale from 1 to 3 (one meaning no influence and three denoting strong influence). Brand influence had a mean of 1.71 with a standard deviation of 0.66, and popularity 1.61 with a standard deviation of 0.74. Both results suggested that while brand image and popularity influence purchases, the influence is not very strong. This lack of influence could indicate that consumer awareness of or exposure to a brand’s image are not very high, or that consumers simply do not place much attention on image or popularity, but rather other attributes which they interpret to have more importance and influence on purchase behavior. LEARNING & MEMORY. Learning is defined as a change in content or organization of long-term memory or behavior. As such, memory of a brand cannot be changed until new information is learned and processed by consumers. Thus, influences from learning and memory are based on vicarious or physical trial of the product – either from learning information about the brand from others, or from personally experiencing the use of the product (in this case, trying Cîroc). According to the results of our survey, 46% of consumers had heard of Cîroc, but never tried it. However, 36% of respondents had both heard of and
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tried Cîroc, with impressive results in perception and attitudes as a result of trying the product. These changes in learning and memory are examined in more detail in the Post-Purchase Evaluation portion of the Decision Process section. MOTIVES, PERSONALITY & EMOTIONS. Consumer behavior is based on individual motives for purchase. Thus, we assessed influencing motives of students to purchase alcohol. One strong influence is brand personality, which is the set of characteristics that a consumer associates with the brand. This can be achieved through celebrity endorsement (though as previously mentioned, consumers did not respond strongly to celebrity endorsement) or promotion of key attributes. These attributes lead to an emotional response in consumers. Emotions are characterized by positive or negative evaluations – thus, we focus on attributes that trigger a positive evaluation of the brand. ATTITUDES. Product development is primarily based on consumers’ ideal levels of performance on key product attributes. Thus, certain attributes of a product will produce the strongest influence on consumer purchases. Based on the results of our survey, the most influential attributes of an alcoholic brand are price, quality, and taste. Again on a scale of 1 to 3 (one denoting no influence and three marking strong influence), consumers indicated price had an influence of 2.00 ± 0.67, indicating somewhat of an influence. To clarify, low price was not the primary influence on purchases. Rather, price seemed to be an indicator of product quality: 75% of respondents were willing to pay between $20 and $60 for a bottle of luxury vodka. Quality had a mean of 2.39 ± 0.69, indicating an even stronger influence. Finally, taste had an impressive mean of 2.71 ± 0.6, indicating a very strong influence – 78.6% of respondents claimed that taste strongly influenced their decision to purchase a brand of alcohol. This was clearly the most important attribute, and thus the most influential factor in purchase decisions. These three attributes indicate that consumers are most influenced by taste and quality, as well as perceived quality from the price of the brand of vodka.
4.3 Decision Process All consumer decisions are made by the consumer decision process, which involves problem recognition, information search, selection and purchase, and post-purchase evaluation. This decision process plays an important part in understanding the internal and external influence consumers consider when purchasing Cîroc.
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4.3.1 Problem Recognition When respondents to our survey were asked what brands of vodka they had purchased, Cîroc received the least amount of responses. This shows that Cîroc is not often selected for purchase, which leads to the question, why do consumers not choose to purchase Cîroc? Do they select competitors more often, or is Cîroc not included in their consideration set? To better understand why Cîroc was not purchased as commonly as other brands of vodka, we examine the problem recognition process. Though over 80% of students surveyed had heard of Cîroc, only 35.7% had actually tried Cîroc. Thus, consumers’ feelings towards Cîroc were not strong enough to choose it over other brands of vodka. Therefore, we concluded that Cîroc is a part of consumers’ consideration set, but it is not always the ultimately selected brand. It is interesting to note, however, that the most important influences on consumer purchase – taste, quality, and price – as indicated by our survey results are all attributes which Cîroc vodka possesses. Consequently, it would be of value for Diageo to focus more attention of conveying these attributes through advertising and promotion campaigns.
4.3.2 Information Search Our survey of college students asked what brands of vodka consumers had previously purchased. Grey Goose was the most popular choice, with 75% of respondents indicating they had previously purchased the brand. Smirnoff (67.9%), Absolut (57.1%), and SKYY vodka (50%) were also popular choices. Only 35.7% of respondents indicated having purchased Cîroc vodka, which again leads to concerns about positioning Cîroc in their consideration set to yield selection. We also asked respondents how they research alcohol to buy. A remarkable 60.7% reported primarily relying on word-of-mouth. Additionally, 10.7% of consumers researched online, and 3.6% considered information from print and television advertisement. Yet another 28.6% of respondents reported not using any pre-purchase research, and simply choose a brand randomly.
4.3.3 Selection and Purchase As previously discussed, the most important product attributes that influence purchase are taste, quality, and price. Over 90% of consumers consider taste to be somewhat or a strong influence on their decision to select and purchase a brand of vodka. As for the physical selection of alcohol, our survey showed that
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71.4% of consumers purchase alcohol in specialty liquor stores. Such a high concentration of selection and purchase suggests a possibility of a point-of-purchase marketing strategy. Since taste and quality is of such high importance to consumers, Cîroc could implement strategies to make this attribute tangible to consumers, while also increasing divisibility. Divisibility is the extent to which a product can be tested before purchase – by increasing this ability to try the product before making the decision to purchase it, Cîroc would be able to more easily overcome the perceived risk of purchasing a new and unfamiliar product. Moreover, as will be discussed in the following section, being able to taste the difference in quality of Cîroc compared to other brands has a significant effect on purchasing decisions.
4.3.4 Post-purchase Evaluation The post-purchase evaluation process for those individuals who have tried Cîroc is quire remarkable. Of the 32% of respondents who reported having tried Cîroc, an astounding 100% said they would buy Cîroc again. This group also preferred vodka to other spirits by 66.7%. When asked how much they enjoyed Cîroc (on a scale of 1 to 5, one indicating strongly disliked and 5 denoting strongly enjoyed), respondents gave Cîroc an average rating of 4.67 with a standard deviation of 0.71. We asked if they would recommend Cîroc to a friend, and yet again the response was an impressive 4.44 ± 0.88 of 5 (5 meaning they were very likely to recommend it). Such a positive response after trying Cîroc shows that the product itself is of high quality, and seemingly meets or exceeds consumer expectations. Diageo should accordingly use this result to develop brand loyalty. Currently, only 14.3% of respondents claimed to be loyal to a brand of vodka, indicating that choice of vodka is not a permanent commitment and could easily be changed. Cîroc could exploit this lack of commitment to a particular brand, and attempt to foster loyalty of consumers to Cîroc vodka in the future.
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5. FINDINGS AND RECOMMENDATIONS 5.1 Summary of Key Findings Our primary research study was a survey of college students. The group was fairly equally male and female students, mostly juniors and seniors of Caucasian ethnicity. All of the respondents claimed to drink, most either once or twice a month or five to eight times a month, consuming about three to five drinks per session. The majority preferred beer, but vodka followed closely as the second most preferred type of alcohol. This shows that vodka does indeed have a presence in this market segment, though students reported being neither likely nor unlikely to choose vodka over other brands, and there was little brand loyalty within the group. Caucasian and Hispanic respondents reported drinking more frequently than African American respondents, but they all consumed the same volume per drinking session. Students of all ethnicities also reported drinking socially, and over half at parties and in clubs. Caucasians and Hispanics preferred beer, while African American students preferred vodka. African American respondents were somewhat likely to choose vodka over other spirits, Caucasian students were neither, and Hispanic students were somewhat unlikely to choose vodka. Over half of African Americans reported having previously purchased Cîroc, while only about a third of Caucasians had purchased Cîroc. The survey showed that male students drink more frequently than female students, but both drink the same amount per session. Females much preferred vodka (over half reported preferring vodka) while males preferred beer. Almost half of males had previously purchased Cîroc, while only about a half of females reported having purchased Cîroc. Students who reported lower incomes drank more frequently and more volume per session than those who reported higher incomes. Those who make less than $10,000 prefer beer, while those who make over $10,000 preferred vodka to other spirits. Because our survey focused primarily on college students, ages did not vary much. This could be the reason there were no drastic differences between other demographics, because age is a stronger influence than other factors. This is especially apparent in their behavior of drinking socially, which can be attributed to a college lifestyle. World of mouth was a main source of information search for student consumers, which suggests they depend on reference groups as a frame of reference for their purchases. However, students were not very influenced by celebrity endorsement, and family members were not very influential either. Friends did have
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more of an influence, but it seems that other factors are more influential, like overall brand reputation as well as consumer knowledge of brands. Brand image and popularity were not a very strong influence, likely because consumers placed more influence on actual product attributes. Price, as an indicator of product quality was strong influence. Quality was an even stronger influence, and taste was the strongest influence, with over three-fourths of respondents claiming that taste was a strong influence on their purchases. Over 60% of respondents rely on word-of-mouth to research which alcoholic brands to buy, and over 70% purchase alcohol in specialty liquor stores. Students purchase mostly Grey Goose, as well as Smirnoff, Absolut and SKYY vodka. Only about a third reported having purchased Cîroc, despite over 80% having heard of it. This means that Cîroc is often considered by consumers, but not often selected for purchase. However, 100% of those who reported having tried Cîroc would buy it again. These respondents claimed to have strongly enjoyed it, and would be very likely to recommend Cîroc to a friend, indicating that the product does meet or exceed consumer expectations.
5.2 Recommendations for Managerial Implications The first area in which Diageo can improve is the problem recognition and alternatives search section of the consumer decision process. It is interesting to note that the two most influential factors in consumer purchases are taste and quality – attributes in which Cîroc excels. Yet Cîroc was far behind other brands of vodka in terms of percentage of students who reported having purchased various brands of vodka. By analyzing the current advertisement of Cîroc, it seems Diageo focuses on emphasizing the high quality of its product, but does not successfully connect this quality to its stellar taste. This is a key goal, as over 90% of consumers surveyed consider taste to be somewhat or a strong influence on their purchase decisions. Consequently, it would be of value for Diageo to focus more attention on conveying this attribute to its consumers, essentially attracting customers who value taste and high quality. This would allow Cîroc to achieve recognition as a solution to the desired state of a lifestyle high quality and class – as Sean Combs puts it, “looking for something that tastes like their lifestyle.” Since consumers clearly value taste as an important feature of vodka purchases, our recommendation to Diageo is to help convey to consumers that
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Cîroc is a solution to their recognized need of a brand of alcohol high in taste, quality and priced right – all features which Cîroc possesses. Another area for improvement is the physical selection and purchase process. Our survey showed that 71.4% of consumers purchase alcohol in specialty liquor stores, which suggests a possibility for a point-ofpurchase marketing strategy. Since taste is so important to consumers, Diageo could implement strategies to make the taste attribute of Cîroc tangible to consumers by increasing divisibility – allowing consumers to test the product before purchasing it. We believe that being able to taste the difference between Cîroc and its competitor brands will have a significant effect on purchasing decisions. In fact, the post-purchase evaluation of Cîroc is quite remarkable; as previously explained, those survey respondents who had tried Cîroc thoroughly enjoyed it, and would purchase it again and recommend it to others. This positive response shows that the product sells it self, and emphasizes the positive impact a taste test can have on purchases. To illustrate this theory, we conducted a taste test. Five participants were given three samples of vodka – one of Cîroc, one of Ketel One, and one of Svedka. Each participant tasted the samples separate from the others (so their responses were not influenced by previous results), then chose his or her favorite and discussed the reasons for their choice. Four of the five participants chose Cîroc as their first choice. Their reasons were, not surprisingly, that Cîroc had the best taste and highest quality. One participant stated that Cîroc is “nice and smooth, it’s the best. The other ones taste like nail polish remover.” Another claimed it had a “better aftertaste.” When asked if they would purchase Cîroc, participants replied that Cîroc was “the smoothest, absolutely. And best quality. Right now that might be the only one I’d buy,” and “I would definitely buy it, and recommend it.” The results of this taste test bring forth a third area for improvement. Consumers reported not being likely or unlikely to choose vodka over other brands, and had no strong brand loyalty. Cîroc could exploit the positive results of the taste test and responses from survey respondents to develop brand loyalty. Because there is a lack of commitment to a particular brand, Cîroc could easily foster loyalty in its consumers, and ensure consumers will make future purchases as well as recommend the product to others.
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6. CONCLUSION It is important to acknowledge that consumers are human, and as such have human behaviors, opinions, and actions. The data collected does not hold enough detail to fully predict particular behavior, but reflects a general understanding on the nature of consumer behavior. Furthermore, this consumer behavior report shows only a snapshot of consumers – companies must always be aware of changes to consumer tastes and behaviors, and prepare to make adjustments based on the needs and desires of their targeted consumers. Our secondary research of the condition of the spirits industry and Diageo’s current marketing strategies, as well as the primary research from our consumer survey and taste test experiment allowed us to apply concepts and theories of consumer behavior to a real-life situation, and subsequently develop recommendations for improvement. After analysis of our research, we concluded that Diageo has been marketing its Cîroc brand well, but could make improvements to better convey its ability to meet the needs and preferences of consumers. No product changes are required – rather, the company should focus more on developing a marketing strategy to help consumers recognize Cîroc’s ability to meet (and exceed) their expectations for a brand of vodka, as well as cultivate a relationship with its consumers to ensure brand loyalty and continued repeat purchases.
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7. APPENDIX 7.1 Complete Primary Data Results 7.1.1 Demographics Q1: Gender Female Male
# 13 15
% 46.4 53.6
Q4: Income Less than 1,000 1,000 - 10,000
# 6 10
% 21.4 35.7
10,000 - 30,000
7
25
Q2: Age 20 and under
# 4
% 14.3
More than 30,000
5
17.9
21 22 23 24 25 and older
7 4 6 3 4
25 14.3 21.4 10.7 14.3
Q5: Ethnic Background Caucasian Native American Hispanic Asian
# 22 0 1 0
% 78.6 0 3.6 0
African American
3
10.7
Other
2
7.1
Q3: Class Rank Freshman Sophomore Junior Senior Graduate
# 0 1 11 12 4
% 0 3.6 39.3 42.9 14.3
Ethnicity Drink Frequency Volume Drink at Parties/club Drink Socially Prefer Vodka Prefer Beer Likely to choose vodka over others Purchased Cîroc Loyal to a brand of vodka?
Caucasian 100% 5 to 8 times 3 to 5 drinks 77.3% 100% 18.2% 63.6% 3.23 of 5 27.3% 3 of 22 loyal
Hispanic 100% 5 to 8 times 3 to 5 drinks 100% 100% 100% 100% 2 of 5 0% None loyal
African Am. 100% 3 to 4 times 3 to 5 drinks 66.7% 100% 100% 0% 4 of 5 66.7% 1 of 3 loyal
Market Analysis & Consumer Behavior Report | 27
Gender Drink Frequency Volume Drink at Parties/club Drink Socially Prefer Vodka Prefer Beer Likely to choose vodka over others Purchased Cîroc Loyal to a brand of vodka?
Male 100% 5 to 8 times 3 to 5 drinks 85.7% 93.3% 33.3% 60% 3.47 of 5 40% 1 of 15 loyal
Female 100% 3 to 4 times 3 to 5 drinks 76.9% 100% 53.8% 53.8% 3.15 of 5 28.6% 3 of 12 loyal
Income Drink Frequency Volume Drink at Parties/club Drink Socially Prefer Vodka Prefer Beer Likely to choose vodka over others Purchased Cîroc Loyal to a brand of vodka?
Less than 10 100% 5 to 8 times 6 to 8 drinks 75% 93.8% 68.8% 3.1 of 5 31.3% 3 of 16 loyal
More than 10 100% 3 to 4 times 3 to 5 drinks 83.3% 100 % 50 % 3.7 of 5 41.7% 1 of 12 loyal
Class Drink Frequency Volume Drink at Parties/club Drink Socially Prefer Vodka Prefer Beer Likely to choose vodka over others Purchased Cîroc Loyal to a brand of vodka?
Junior & under 100% 3 to 4 times 6 to 8 drinks 83.3% 83.3% 41.7% 50% 3.33 of 5 41.7 % 3 of 12 are loyal
Senior & up 100% 5 to 8 times 3 to 5 drinks 75 % 100 % 43.8 % 62.5 % 3.31 of 5 31.3 % 1 of 16 loyal
Market Analysis & Consumer Behavior Report | 28
7.1.2 Lifestyle & Attitudes Q6: Do you drink?
#
%
Drink
28
100%
Don't Drink
0
0
Q7: how often do you drink per month?
#
%
Once or twice
8
28.6
3 - 4 times
5
17.9
5 - 8 times
8
28.6
More than 8 times
7
25
Q8: On average how many alcoholic beverages do you consume each time you are drinking? 1–2
#
%
6
21.4
3–5
12
42.9
6–8
5
17.9
9 or more
5
17.9
Q9: In what context do you drink?
#
%
Parties/clubs
22
78.6
Socially
27
96.4
With Meals
9
32.1
Alone
1
3.6
Other
1
3.6
Q10: Do you have an alcoholic preference?
#
%
Vodka
12
42.9
Tequila
7
25
Gin
1
3.6
Rum
6
21.4
Beer
16
57.1
No preference
1
3.6
Other
4
14.3
Market Analysis & Consumer Behavior Report | 29
Q11: How likely are you to choose vodka over other spirits?
#
%
Very Unlikely (1)
4
14.3
Somewhat Unlikely (2)
3
10.7
Neither Likely nor Unlikely (3)
8
28.6
Somewhat Likely (4)
6
21.4
Very Likely (5)
7
25
Mean: 3.32 (standard deviation 1.362) Q12: What brands of vodka have you purchased or would you consider purchasing? Cîroc
#
%
10
35.7
Grey Goose
21
75
Absolut
16
57.1
Smirnoff
19
67.9
SKYY
14
50
None of these
2
7.1
Other
2
7.1
Q13: Are you loyal to a certain brand of vodka?
#
%
No
24
85.7
Yes
4
14.3
Q14: Have you ever heard of or tried Cîroc?
#
%
Heard of and Tried
10
35.7
Heard of but not Tried
13
46.4
Neither Heard of nor Tried
5
17.9
Q15: If so, did you enjoy it?
#
%
Strongly Disliked (1)
0
0
Somewhat Disliked (2)
0
0
Neither Disliked nor Enjoyed (3)
1
11.1%
Somewhat Enjoyed (4)
1
11.1%
Strongly Enjoyed (5)
7
77.8%
7.1.3 Satisfaction
Mean 4.67 (standard deviation 0.71)
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Q16: If you have previously purchased Cîroc, would you purchase it again? Yes
#
%
9
100%
No
0
0
Q18: How likely are you to recommend Cîroc to someone else? Mean 4.444 (standard deviation 0.88)
7.1.4 Information Search, Influences & Decision-Making Do your friends influence what alcohol you purchase? No Influence
#
%
#
%
28.6
Does your family influence what alcohol you purchase? No Influence
8
20
71.4
Somewhat Influence Strongly Influence
19 1
67.9 3.6
Somewhat Influence Strongly Influence
7 1
25 3.6
Does taste influence your decision to purchase alcohol?
#
%
No Influence Somewhat Influence
2 4
Strongly Influence
#
%
7.1 14.3
Does brand image influence your decision to purchase alcohol? No Influence Somewhat Influence
11 14
39.3 50
22
78.6
Strongly Influence
3
10.7
Does quality influence your decision to purchase alcohol? No Influence
#
%
#
%
10.7
Does popularity influence your decision to purchase alcohol? No Influence
3
1
3.6
Somewhat Influence
11
39.3
Somewhat Influence
12
42.9
Strongly Influence
14
50
Strongly Influence
12
42.9
Influences Compared
Mean
Standard Deviation
Taste
2.71
0.60
Quality
2.39
0.69
Price
2.00
0.67
Friends
1.75
0.52
Brand
1.71
0.66
Popularity
1.61
0.74
Family
1.32
0.55
Market Analysis & Consumer Behavior Report | 31
Does price influence your decision to purchase alcohol?
#
%
No Influence
6
21.4
Somewhat Influence
16
57.1
Strongly Influence
6
21.4
What price range would you be willing to pay for a luxury vodka? Under $20
#
%
1
3.6
$21 to $40
11
39.3
$41 to $60
10
35.7
$61 to $80
3
10.7
Over $80
2
7.1
Would you be more likely to buy a product endorsed by a celebrity? Very Unlikely (1)
#
%
4
14.3
Somewhat Unlikely (2)
3
10.7
Neither Likely nor Unlikely (3)
17
60.7
Somewhat Likely (4)
4
14.3
Very Likely (5)
0
0
#
%
Online
3.6
1
Specialty liquor stores
71.4
20
Supermarkets
7.1
2
No preference
25
7
Other
7.1
2
#
%
Online
10.7
3
Print/TV Ads
3.6
1
Word of Mouth
60.7
17
Randomly choose
28.6
8
None
7.1
2
Other
3.6
1
Mean 2.75 (standard deviation 0.887) Where do you purchase alcohol?
How do you research brands of alcohol?
Market Analysis & Consumer Behavior Report | 32
8. REFERENCES Schultz, E.J. "Cîroc." Advertising Age. 15 Nov. 2010. Web. 4 Dec. 2010. <http://adage.com/article?article_id=147036>. Brandes, Richard. “Growth Brands 2010.” Beverage Dynamics. 25 Mar. 2010. Web. 4 Dec. 2010. <http://www.bevinfogroup.com/ME2/Audiences/dirmod.asp>. Goliath Business News. "Diageo to Implement "consumer Focused" Marketing Strategy." Goliath: Business Knowledge On Demand. 6 May 2002. Web. 05 Dec. 2010. <http://goliath.ecnext.com/coms2/gi_0199-1753889/Diageo-to-implement-consumer-focused.html>. The Fifty Best. “Best Premium Imported Vodka – 2010.” The Fifty Best. Web. 4 Dec. 2010. <http://www.thefiftybest.com/spirits/best_vodka/>. Cîroc. “About the Brand.” Cîroc. Web. 4 Dec. 2010. <http://www.cirocvodka.com/abouts/view/1>. Arshad, Sana. “Cîroc Vodka Sales Through The Roof.” Examiner. 3 Nov. 2010. Web. 4 Dec. 2010. <http://www.examiner.com/rap-music-in-new-york/ciroc-vodka-sales-through-the-roof-thanks-todiddy>. Hoovers. “Diageo PLC.” Hoovers. Web. 4 Dec. 2010. <http://www.hoovers.com/company/Diageo_plc/hhrxri-11njea3.html?serv=SEMGGLCCM23754094-530799394-3491092354-12703572941&wf=70130000000KoKNAA0&ch=70130000000KhjR&num=8664733932>. Daily Finance. “Diageo PLC.” Daily Finance. Web. 4 Dec. 2010. <http://www.dailyfinance.com/company/diageo-p-l-c/deo/nys/institutional-ownership>. Diageo. “Our Brands.” Diageo. Web. 4 Dec. 2010. <http://www.diageo.com/enrow/OurBrands/Pages/default.aspx>.