The Famous Grouse - company profile and exports

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The Famous Grouse

Introduction

        I have been hired by The Famous Grouse, a whiskey brewer as the international marketing consultant.  The Famous Grouse is currently considering the option of selling their whiskey out with the UK.   What is required of me in this post is to research and evaluate the various markets around the world, the research will assess the viability of selling in a different country.  The research will take into account the current buyers of famous grouse in the UK, their characteristics and find the best foreign market that will be interested this product.  I will evaluate three countries, New Zealand, Germany and USA. From these countries I will find the market that would be the most receptive of the Famous Grouse whiskey.

Introduction to the Famous Grouse

        Named after the Red Grouse, Scotland's national game bird, The Famous Grouse was born in the late 1800's. Matthew Gloag, while running his family's grocery and wine business, hatched the idea to meet the demand for house-labelled blended whisky and thus created the Grouse Brand. So close to home was the brand, that Matthew's daughter, Philippa, actually created the original sketch for its renowned trademark. The Grouse Brand became so sought after that it was soon renamed The Famous Grouse.

        The Famous Grouse distilleries are currently owned by the Edrington Group.  This group manages the distilleries and all of the Famous Grouse sales national and international.  The group also manage a number of other distilleries namely Cutty Sark, The MacAllan and Highland Park.  The Edrington Group is based in Scotland but trade to all over the world with their large selection of whiskey.

Who Buys Famous Grouse?

        The Famous Grouse has long been established as a sportspersons drink.  It is not the obvious option for a target market but it has been the preferred scotch of sports people since the initial creation of the famous grouse scotch in 1896.  It was traditionally drunk by sports enthusiasts that visited the highlands.  In the present day famous grouse is a whiskey that has a much more modern image.  The famous grouse is one of the finest whiskeys that are on offer to the public and has various strengths to it both through the image that it has and the wide appeal of whiskey as a drink for a special occasion.

        The Famous Grouse has to identify the strengths and weaknesses that is has when entering it in a foreign market.  As has been mentioned Famous Grouse has been a well-established product in the UK market since 1896.  This can work well as traditional Scottish whiskies are bought as souvenirs and said to be a "Taste of Scotland".  The Famous Grouse is operating in the very stable British economy; it also holds a segment of the UK market that has been stable for a number of years.  The image of The Famous Grouse is also spread through its partnership with the Scottish rugby team, a partnership that has been operating for much of the last decade.  Geographically Scotland is very central to any form of distribution whether that be to the USA or the continent it has well established sea distribution services and the air travel/distribution industry in Scotland is on the rise through the massive investment in both Glasgow and Edinburgh airport.  With reference to shipping of the goods then the newly ferry link between Rosyth and the continent would mean less cost on road transportation if by land and sea is the chosen means of transportation, this ferry link would reduce costs substantially.  The shipping of the bottles of Famous Grouse would require for a large amount of packaging for the movement of the goods and also the costs of insuring the shipments as the goods would be in transit for much longer periods than if it were to be transported by air.  The sales of alcoholic drinks may have heavier restrictions in other countries and levels of sales may be limited to a certain extent by this.  In France, for example, there are restrictions on the advertising of alcohol in sports venues, on the field or at the ground.  These restrictions should not disrupt the sales of Famous Grouse as the product may be sold in another country as a specialized drink.  

        With the strengths and weaknesses identified in expanding abroad, it is safe for Famous Grouse to take the next step in the process that would be to establish where would be the best foreign market to enter.

         

Why Expand Internationally?

There are numerous reasons for the famous grouse to expand to foreign markets.  Further expansion would give the whiskey itself a longer lifecycle than it would have being sold in the same country.  It could be said that famous grouse has reached a peak in its lifecycle in the UK and so to further increase the revenue that this product can offer; taking it abroad is the best option.  Competition between whiskey/scotch distilleries may necessitate the expansion of famous grouse to foreign markets, brands such as Bells, Glenmorangie, etc.  

This expansion of famous grouse will hopefully maintain the market share and profits, which is very beneficial in the long-term.  Along with increasing the profits and the market share of famous grouse it will raise the international profile of famous grouse.  It will then become established as an international image that will become renowned as a quality scotch.  Another reason for international expansion is almost an alternative option to changing the product itself.  Changing the product lifecycle by altering the product is a method of keeping the product new to the customer.  But this change may not be a change for the good in the customers’ eyes and sales may actually decrease instead of increase.  Keeping with the same product will allow economies of scale to be reached in terms of production costs.  

In some countries there are lower restrictions on advertising of alcohol.  This could be key when trying to create awareness of the famous grouse being sold in their country.  

New Zealand

Political

Prime Minister- Helen Clark

Capital: Wellington                

Population: 3,993,817 (July 2004 est.)

New Zealand History

The Polynesian Maori reached New Zealand in about A.D. 800. In 1840, their chieftains entered into a compact with Britain, the Treaty of Waitangi, in which they ceded sovereignty to Queen Victoria while retaining territorial rights. In that same year, the British began the first organized colonial settlement. A series of land wars between 1843 and 1872 ended with the defeat of the native peoples. The British colony of New Zealand became an independent dominion in 1907 and supported the UK militarily in both World Wars. New Zealand's full participation in a number of defence alliances lapsed by the 1980s. In recent years, the government has sought to address longstanding Maori grievances.

Economy

Over the past 20 years the government has transformed New Zealand from an agrarian economy dependent on concessionary British market access to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes (but left behind many at the bottom of the ladder), broadened and deepened the technological capabilities of the industrial sector, and contained inflationary pressures. Per capita income has been rising and is now 80% of the level of the four largest EU economies. New Zealand is heavily dependent on trade - particularly in agricultural products - to drive growth, and it has been affected by the global economic slowdown and the slump in commodity prices. Thus far the economy has been resilient, and growth should continue at the same level in 2004. Expenditures on health, education, and pensions will increase proportionately.

Statistics on New Zealand*

Population and Cultural Factors

New Zealand has a large population that has descended from Europe.  Around the South island and Otago region of the country there is a large European and more specifically people of Scottish ancestry.  This is a major benefit on the communication front when trying to market a product in New Zealand.  New Zealand is a socially developed country and relies on its agricultural sector to provide an income to the economy through export.  

Technological Factors

New Zealand is not a fully develop country when it comes to the electronics industry.  The society itself is developed in terms of use of these products, but, the production of these goods is very low in New Zealand as it primarily gets its income from the agriculture industry.  The technological sector is on the increase however.

Opportunities

The opportunities that are available in New Zealand are mostly found from the high number of people of European/British emigration.  This offers a lot of guarantees regarding the tastes and how famous grouse is received.  The relatively low income per house hold (Average 80% lower than the European average.) may cause concern for exporting to New Zealand.  Famous grouse is thought of as a luxury product as opposed to a necessity and there may be lower sales than in other nations.  The costs incurred when exporting to New Zealand would be higher than in other countries due to it being so far away from the original production source.  Problems may arise from transporting such a far distance.

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Germany

Head of Government: Chancellor Gerhard Schroeder

Capital: Berlin

Population: 82,424, 609

German History

As Europe's largest economy and most populous nation, Germany remains a key member of the continent's economic, political, and defence organizations. European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. With the advent of the Cold War, two German states were formed in 1949: ...

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