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: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro.
The Economy
Germany has a very strong economy. It is in fact the 5th largest economy in the world. The future German economy does not look as bright as it once did. The finances of eastern Germany and western are very different, in the last year the western German economy has ‘off loaded’ almost 70 billion dollars to the east. This is due to the east requiring much more investment to bring the living, working and economic standards to the same level across the nation. Germany also has an aging population, high unemployment rates and strict regulations when laying off workers. The German government are currently putting into place structural reforms that will revitalise the German economy as a whole.
Statistics on Germany*
Population and cultural factors
Germanys culture is a very advanced culture. There is a very high exporting industry and financial sector. It offers companies to import into Germany with minimal restrictions. There is already a genuine interest in alcohol and brewing and famous grouse can offer a traditional scotch that should be well received by a very diverse German population.
Technological Factors
Technologically, Germany is market leader. It has a thriving motor industry and an impressive financial market. Although the German economy may be slowing down it is a world leader in having a stable economy. This is important for famous grouse when importing, if there is a major downturn in their market then sales may be seriously reduced.
Opportunities
The opportunities in Germany are massive in terms of interest in spirits. As is the very stable German economy and relatively high income for the average population. Once again the only method of getting famous grouse into the German market place is through direct importing (shipping). This is because of the ‘one of a kind’ image that famous grouse is trying to develop with the foreign markets. Also the nature of sales for famous grouse means that the sales levels are not sufficient with creating an entire distillery for the production in one country alone. Should the level of sales seriously increase and there is interest in other EU countries then there is the option of brewing in Germany for shipping to other countries.
The United States of America
President: George W Bush
Capital: Washington D.C
Population: 293,027,571 (July 2004 est.)
US History
Britain's American colonies broke with the mother country in 1776 and were recognized as the new nation of the United States of America following the Treaty of Paris in 1783. During the 19th and 20th centuries, 37 new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. The two most traumatic experiences in the nation's history were the Civil War (1861-65) and the Great Depression of the 1930s. Buoyed by victories in World Wars I and II and the end of the Cold War in 1991, the US remains the world's most powerful nation state. The economy is marked by steady growth, low unemployment and inflation, and rapid advances in technology.
US Economy
The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $37,800. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to entry in their rivals' home markets than the barriers to entry of foreign firms in US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The response to the terrorist attacks of 11 September 2001 showed the remarkable resilience of the economy. Moderate recovery took place in 2002 with the GDP growth rate rising to 2.4%. A major short-term problem in first half 2002 was a sharp decline in the stock market, fuelled in part by the exposure of dubious accounting practices in some major corporations. The war in March/April 2003 between a US-led coalition and Iraq shifted resources to the military. In 2003, growth in output and productivity and the recovery of the stock market to above 10,000 for the Dow Jones Industrial Average were promising signs. Unemployment stayed at the 6% level, however, and began to decline only at the end of the year. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic
Statistics on USA*
Population and Cultural factors
The US population is probably the most diverse population in the world, it originally being populated by immigrants from Europe. There is also a very large African American community; this shows the diversity of the American culture. The culture itself is very developed technologically in the heavily populated areas. Specifically focusing on either the west coast or east coast may lower any non-predicted problems that may arise. There is relatively low import cost to get into the US and defiantly a market for spirits in the market.
Technological Factors
Technologically the US is one of the most advanced countries in the world. It has a very stable economy even after the 9/11 attacks that focused on the financial headquarters of the country and continues to advance on every technological front.
My Recommendation
In the more short term branching out of Famous Grouse the best option would be through shipping to the USA. The US has an almost exponentially bigger market for spirits and has a very stable economy, which is very open to imports. Any product that is being entered into the USA market will encounter stiff competition, but I feel that initially entering the market in the west coast where there is already popularity for traditional “Scotch” whiskeys. In the longer term the famous grouse will then have the opportunities to spread across the US and possibly be a national success. I therefore recommend the USA to be the best country to export into due the bigger market size, stability and opportunities that can arise from an initially small release in the USA.
Outcome 2 – Distribution Techniques
Now that the market has been established it is now time to choose which method of entry into the US market is best suited. Firstly the nature of the product must be taken into account and the needs for safe transportation, be that through shipping or through specific mail order direct to the customers. The choices are vast and the implications of choosing the correct option are very real. So, the decision of how to get the goods to customers in foreign market is vital to the success of this branching out strategy being under taken. The famous grouse recognises this and I will research exactly what is the best option for distributing The Famous Grouse abroad.
Through indirect exporting the famous grouse can make use of companies already in these markets. One of these examples is Export Merchants.
Export Merchants are a completely different company operating by buying from the Famous Grouse and then selling the goods onto the chosen country. They would buy the goods from The Famous Grouse and using all of their experience in foreign export, they could arrange both the method of distribution but also what retailers are the most appropriate for selling in the Famous Grouses target market. This method of international distribution has many other advantages on top of their knowledge of the international markets. Export merchants take care of any finance or credit problems that can develop between the buyers and them selves. This is because the export merchants’ act as a go-between for the company and their desired market, any customers would be buying from the export merchant and so the Famous Grouse would not have to deal with collecting bad debt in a country where the laws could be different. This method of arranging the exporting of goods fast once established, the costs are minimal as the product is bought from the export merchant who also takes care of the credit and finance. The payback period is immediate as the merchant is buying the Famous Grouse directly and from then on the merchant will deal with any loss of sales. The Export Merchant will also deal with any documentation when it comes to transporting the goods into the USA. Whether it is customs declarations or other documentation that must be passed to sell the goods. The export merchants make their money from the difference in price that they pay to the Famous Grouse for the goods and the selling price that they put on it abroad. Unfortunately, through this method of selling in the USA the Famous Grouse will not have any means of researching the USA market, this will mean limited opportunities for branching out. Which would not feature in the plans of the Famous Grouse and its plans for branching out in North America. But there are other methods of distribution in another country that may suit the Famous Grouse and the business plan that they want to implement.
Another method of indirect exporting into a foreign market would be through Confirming/Buying houses. Generally confirming/buying houses act on behalf of the buyers in foreign markets. Using this method of distribution there is a limited amount of work done buy the Famous Grouse, the confirming/buying houses will find out that the famous grouse is in the market for branching out to the North American consumer. Should there be an interest in the product in the USA then there will be action taken from a buyer who will look getting the confirming/buying houses to arrange for the goods to be shipped. In terms of cost the confirming/buying houses work on the same principle as the merchants where the goods are simply bought and then sold on, all the Famous Grouse has to do is increase production to keep up with the demand from the confirming/buying houses and their buyers. The confirming/buying houses will take care of the export finance and any credit risks that may come from any buyers in the US market. They will also handle any of the documentation for transporting the goods, much like the export merchant, but will be paid on a commission basis from the foreign buyer that has shown an interest in the product. As was the case with using an export merchant the Famous Grouse will learn very little about the American market, this could become a hindrance, should the Famous Grouse be looking to branching out across the US as was the intension depending on how well the product is received on the west coast.
These two examples of indirect exporting into a foreign market are very limited in what the Famous Grouse can learn about the market in the USA. There are other methods of entry that can offer opportunities to learn about the market they may be entering into.
Of all of these methods available to the Famous Grouse direct exporting would be the best option, this can help in the further branching out of the product across the US in the longer term. There is, however, more than one method of direct exporting, personal selling direct to the end user is one of the routes taken for selling abroad. Direct selling to the end user is an option that would generally benefit the sale of specialist goods; this could be one of the decisions taken for the marketing of the image of the Famous Grouse. So, should we be looking to sell the Famous Grouse as a specialist whiskey this would influence the selling price of the Famous Grouse in the USA. The sales department having to be very specialised in their knowledge of the Famous Grouse would cause this, as the customer would be looking for an experienced person to inform them of what it can offer. The target customers would be easily identified in this market because they would be of a sufficiently high profile and they would be in an easily identifiable group, in this case the older citizen would be the natural choice. If this approach were to be taken then the Famous Grouse would fit the profile as a high-value and, because of the specialist nature of the product, high-margin product attributes normally recognised in the personal direct selling method of sales. Initially the insertion into the USA market will be on the west coast were there is a genuine interest in the Famous Grouse as it is already a popular spirit in the region with limited competitors that have an image of vintage whiskey brewing. The sales staffs that are employed must have cultural adaptability and have a competent linguistic ability. Direct selling to US customers would take a longer to do than the other options; sales staff would have to be recruited/flown into the country that would also raise the overheads on the Famous Grouses budget. It may require a greater payback period in the long term. There is, however, increased flexibility when it comes to where the sales can take place. Direct selling could provide us important information when it comes to branching out across America.
Direct Marketing in the area is another method of raising awareness in the whiskey community about the Famous Grouse and its availability in the area. Direct marketing uses mail order; telephone marketing, television marketing and internet marketing. There has been a huge upsurge in the number of companies using this method to raise awareness of their product in foreign markets. Depending on the laws that govern direct marketing in this area steps would have to be taken to ensure that no problems arise from the mailing that would be carried out. Direct Marketing would be a quick way of generally spreading the word about the Famous Grouse and its availability, but getting in contact with the consumers interested may be harder. With the increase in popularity of the Internet and many other methods of direct marketing, people have become more reserved about giving their details away, but by using recognised whiskey appreciation societies and details from other associated companies contact could be made.
While using Direct and indirect exporting may seem like the obvious and only option for distributing goods abroad but there are still more options to take up when branching out into foreign markets. Another of these options is called the Joint Venture. Joint Ventures are where a company develops a plan to expand globally, this is not in the Famous Grouse’s initial plan but should circumstances change where there is a genuine opportunity to expand globally then this option could be suitable. The venture itself is, as it sounds a partnership between two businesses one of which is looking to establish them in a foreign market. Generally speaking the join venture option is relatively lost cost to set up as the foreign company makes a lot of the initial investment. What the Famous Grouse would be required to do would be to allow the foreign company access to the patents/recipes that are used to create the Famous Grouse and the traditional packaging method. One of the more specific methods of a joint venture would be through franchising.
Franchising basically allows the franchisee the right to use the company name, trademark and technology. The franchisor along with allowing the franchisee to use the company image, it offers them organisation, marketing and general management under and arrangement intended to be permanent. The cost to the Famous Grouse in the short term could be high in the short term but they would basically gain an established foothold in the USA market providing it succeeds. Franchising has a greater degree of control when it comes to the ingredients or components. It also offers the possibility of revenue from a product that is not patent able. Through the licensing of the product for the use of the franchisee royalties can be paid which can supply a steady income in the long term, meaning the payback period would be more long term than other arrangements. In terms of risk, using a franchise as an entry method to a foreign market spreads the risk between the two of more companies that want a part of the franchise, but being tied into these companies can limit the flexibility for movement in the market, as the Famous Grouse would be working from a solid basis. Franchising operations tend to be smaller than the other industry leaders the Famous Grouse wants to compete with in the west coast region of the USA. Should a franchise be a success in the west coast USA then the longer-term objectives are definitely achievable. Establishing this franchise in the USA would take a lot longer than other options when franchising. One option would be to gain recognition through limited direct selling in the country then to create a franchise. Through franchising the company would be run in the USA by parties interested in the opportunities they could gain by selling the Famous Grouse the western USA. One of the other options would be through Direct Investment.
Direct Investment is only undertaken when there is guaranteed interest in the market, so that the extremely high cost that is incurred in the preliminary stages can be recouped in the long run. There are two methods of direct investment; one of these is through wholly owned/subsidiaries and also through the acquisition method of establishing itself in the USA market. Depending on the commitment to operate in the USA this could be a worthwhile venture as long as the interest in the product is guaranteed. The acquisition method of entry into the market has several advantages. This method requires for the Famous Grouse to buy out and already existing whiskey company/brewer. Although, to bring forward the Famous Grouse brand and the taste that is the most attractive quality of the Famous Grouse, along with the originality. It would be best that the distillery be in the original mould of the distilleries back in Scotland. So, acquisition would be not the best way to enter into the market, as it would influence the taste too much. Even though it is not the ideal option using wholly owned companies is another method of entering the USA market it would require a massive initial investment into an area that would have to have a trained work force, good transportation links, etc. There would be massive investment that would require substantial research before entering the country. It would be a high-risk strategy where all of the risk would be on the Famous Grouse and it would have to be requiring very high sales to get the investment back. Over the long term the Famous Grouse would have the opportunity to branch out across the USA and should there be limited success with this venture than the west coast of the US has very active trade channels with Japan, Australia and one of my possible choices earlier in this report, New Zealand. This flexibility is very useful in the long term should the decision to become a global competitor be taken there is active production in optimum positions in the world for distribution.
The process of identifying the best route for branching out into a foreign market depends greatly on the aims of the expansion. Should the Famous Grouse be looking to branch out to the USA initially then to develop globally then I recommend a strategy where the company is designed to cope with a greatly increased level of production. What it would be coping with would be the increase in demand coming to the distillery in Scotland or through any production ventures established in the continental US.
My Recommendation
The previously mentioned options for the branching out the product of The Famous Grouse all have their benefits and all have resulting negative features. A lot of the risks are not all that necessary for The Famous Grouse to take as the branching out is not going to be at the scale of a lot of exporting operations require to make the desired impact on the foreign market. The Famous Grouse is looking to gain a means of increasing the sales figures that it has reached in the UK. The reason being that if The Famous Grouse tries to simply retain the number of customers that it currently has in the UK it will become stagnant in the market and eventually start to decline.
The Famous Grouse has a product that is bought for its originality and creating production lines in the USA is not what the customer would be buying The Famous Grouse for. The recommendation for branching out The Famous Grouse would be through directly selling to the customer, whether that is through business-to-business or direct to the customer. Either means of getting the product to the customer through specialised scotch/whiskey sellers in the USA or appreciation societies can give customers the opportunity to get a taste of the product first hand. This would be with the aid of trained sales staff in the region that has the necessary knowledge on the product. One of the advantages of the direct selling to the customer is that should there be success for the product than it would be possible to move those sales people in the area to other parts of the USA which could possibly mean further sales increases in the long term and a USA-wide sales team could eventually be in operation.
In the short term this method of exporting is the most beneficial and it also give the genuine prospect of increasing the level of sales in the USA in the long-term.
Outcome 3
The Famous Grouse is a name that is synonymous in whisky circles as a traditional scotch whisky. It has a heritage that other brands struggle to beat, the previous brief on the history of The Famous Grouse indicates that it was previously targeted at sports enthusiasts that visited the highlands of Scotland. The sponsorship deal that The Famous Grouse has with the Scottish rugby team also adds to the idea that it can target the sales at the more young and active audience. A favourite when drinking spirits is by mixing them with a soft drink, this market could be targeted as mixing drinks is a lot more prominent within the younger consumers. Ideally the best product strategy would be through both product extension and product invention.
The brand of The Famous Grouse is already a globally recognised product and it can use this to attract a more senior buyer that would be buying it for its image, heritage and its unique taste.
Product
The Famous Grouse is a product that I have already mentioned that it is seen throughout the world as a product that has a long and distinguished heritage. The product strategy that I would recommend would be the standardisation method of marketing. Standardisation is when the product is marketed globally as ‘The Famous Grouse’, this method creates a universal appeal and leads to customers recognising the product as The Famous Grouse from country to country. The standardisation strategy creates a very high level of global brand power, which is good for the company when branching out to a country after the USA, as The Famous Grouse is already recognisable. To create this level of awareness on a global scale requires a substantial level of investment, which could be problematic for a company smaller than The Famous Grouse. The Famous Grouse is a product that is a consumer non-durable because it is used regularly but requires replacing after a period of time. It would be need a relatively medium degree level of standardisation as it is a consumable that is not used/needs replaced as regularly as coffee or milk, but not as durable as clothing.
Having considered the strategy for The Famous Grouse there are other product aspects that should be taken into account for entry into a foreign market, for example the branding of the product. In some cases when a brand is introduced into a foreign market the ability for the consumer to identify and pronounce a product and to identify what it means. The Famous Grouse would use an individual product branding, this would be required because of it currently being the only product in The Famous Grouse distilleries range and should the range be branched out through product invention then it would be introduced with the company trade name combined with an individual product name, but this is just speculating as to whether a new product will even be introduced. Branding for the individual product would be the best option for The Famous Grouse because the initial marketing of the product would be for The Famous Grouse to be a one of a kind whisky.
The name of The Famous Grouse is one of the major drawing points of the product. As previously mentioned it carries with it a tradition that is hard to find with a lot of other products. The brand name is evocative of the history and tradition of distilling, and this type of tradition would speak volumes in the whiskey market in the USA as it shows a level of experience that is sought after by whisk drinkers. Having a global branding goal will facilitate the company in any additional expansion into other foreign markets should it be deemed necessary in the future. The name has no words that can be misconstrued in different dialects to cause offence or confusion. Therefore, global branding would be the best option for The Famous Grouse in the long run as it offers an easily administrated method of branding, facilitates global advertising and promotion and with it being an individual product it would be suitable for the global branding strategy.
The branding of the product is necessary to enhance its appeal to the consumers in the USA. However, should the person get to the sales point and the products packaging resembles something found at a car boot sale then there is not much chance of the person buying it. This is why the packaging of the product must be of the highest standard, and not only presentation. The protection of the goods during the transportation process is very important so as it reaches its sales point in a condition that is presentable. In the case of The Famous Grouse the packaging of the bottles would mean that the bottles are held secure to prevent any shaking or breakages, this may involve elaborate packaging to ensure that it is sufficiently protected. This method can be quite expensive but it is necessary because if it is not correctly packaged either the goods will not reach their location or when they do they will be in a state that no one will buy them.
Price
The pricing of a product can be seen as fundamental in the marketing mix. It is often the difference between success and failure. Before specifying a price for a bottle of The Famous Grouse, the factors that influence the pricing decisions must be calculated and added to the pricing strategy. The price of The Famous Grouse will be vital to the successful introduction into the USA market. The price of the goods will essentially be the guiding factor when it comes to the customers’ final decision to buy or not as this is where they decide if this price is the correct value for the product that they are buying.
However, to reach these final figures the factors that influence the price of the product must be taken into account. As previously mentioned the consumers expectations of the value of the product is vital to the success, so measuring the customers expectations of what the product should cost through Marketing Research is needed. Increase in demand can also raise the price should there be no significant rivals this market. In the case of The Famous Grouse there are whisky producers I this market but most are distilled in the US itself so the product that they offer is the same but the markets are marginally different. The customers in the whisky market would be considered not overly price sensitive due to the way that The Famous Grouse is going to be marketed as very high quality whisky that comes with a name that has been in the whisky industry for a number of years. It is also tends not to be bought regularly, perhaps if it were bought for sales in an establishment i.e. Hotels, Bars and clubs the price could reduced for buying such bulk. The quality of the product will reflect this, as will the packaging of the goods show the traditional values that are still met in the production stage. So this will add costs to production to give it the sort of presentation that would attract a customer away from the competitors. The corporate objectives of the company would be to establish itself as the market leader for quality whisky. The Famous Grouse will be coming into the US whisky market at a stage where the UK market has reached a saturation point. There is a very high percentage of imports coming from the USA e.g. Jack Daniels, Southern Comfort. However the type of image that they are to trying to create is for a drink that is there for a party and avoids the image that it can be associated with the ‘oldies’ that enjoy whisky for its taste and the traditions that go with it.
When pricing The Famous Grouse the way that we enter the market is vital to the success of the product. To find the appropriate price for market entry we have to establish on what fronts that The Famous Grouse will be seen as being ahead of the other competitors. To establish them in the market a strategy of penetration pricing to initially bring them into the market and then alter the pricing to reflect the value of the product more so than when The Famous Grouse was initially being entered into the US market. The Famous Grouse would require limited price lining as it is not a product bought as regularly as other shopping produce, it would probably fit the Prestige/Volume zone where the goods are necessarily bought everyday but are often purchased as presents and special occasions.
When exporting to the USA there are other considerations to be made. Because it is a different country it operates with a different exchange rate, the Dollar. Should the exchange rate change it would require for the selling price in the USA to change. Because The Famous Grouse would be exporting from the UK economy, which is currently going very strong, it would be beneficial to reduce the costs and/or increase the productivity. Invoices would have to be created with the calculated rate of exchange; the company would also have to compete on any of the non-price factors like delivery and other services that are needed to sell the goods in the USA. The Famous Grouse currently retails in the UK for £13.99 for a 70cl bottle, so taking into account all of the costs of sales persons in the USA delivery costs. The costs that are incurred through exporting can be spread across the production of The Famous Grouse so there will be a increase in price so the selling price will be between $30-40.
Promotion
The Famous Grouse is a product that has been established in the UK since the start of 1900’s. It has been bought by the British public throughout the 20th century as a gift, for a special occasion or for personal consumption. This makes promoting The Famous Grouse both hard due to the fact that we have to specify a group that is going to be initially targeted as the biggest consumer of The Famous Grouse and what types of promotion are most likely to attract their attention. There are many types of ‘above the line’ advertising, all of which are types of media or display that is seen by the desired customer. The media used are TV, Press (including any magazines), Posters/Billboards Radio and cinema. The aim of this above the line advertising is to first and foremost introduce a new product and secondly increase sales. Advertising can also be used to regain any lost customers and create awareness to the customer about any sort of modification to the product. It also plays a huge part in creating a corporate image that customers feel comfortable buying from. The Famous Grouse is a product that can be subject to restrictions on its advertising because it is not to be promoted to young children. So when advertising it the first option would be to advertise through magazines (Retailer magazines, food and drink magazines, etc.) that the majority of the readers are going to have an interest in whisky. Advertising through press enables us to get across a lot of information in an advertisement, it can be very suitable for regional advertising and is cheaper than television. It does not in all cases get the full number of consumers that The Famous Grouse is looking to try to reach. Television is the most attractive media as it is very persuasive, it reaches a wide audience at one time, and it can build and image that is very important when introducing a new product. TV advertising can be very expensive compared to press advertising. Billboard advertising is a method that is often used to create a simple awareness for a new product; they give a large visual impact and cover an audience that includes anyone who passes the billboard. Billboards can be positioned as a reminder medium like outside a shopping store to remind the customer to buy it for whatever reason. I feel that advertising through these select media will create awareness that is necessary to make a running entry into the Western USA market.
When arranging advertising in another country there is considerations that have to be made. Whether to use an international agency or an agency local to the region that The Famous Grouse is importing into, the two options both have their advantages and disadvantages. When using an international advertising agency they bring a lot to the table, they have a prior knowledge of foreign markets through previous market research. International agencies also offer all of the required services from one body, enhanced knowledge on how much more effective some types of advertisements than others. Within these companies there is a low level of continuity caused by high turnover rate within these companies. If using a local agency in the USA they would offer The Famous Grouse a company with a local brand image. The local agency could have close and effective communication with the local distributors. Unfortunately, when deciding on a suitable local agency it can be very time consuming to decide on one and should The Famous Grouse want to eventually branch out from this local area it will need to establish another agency in another area. This can create a very complicated structure where every agency is communicated with separately. I believe that The Famous Grouse would be best to use an international agency, so that it advertising campaign can stay constant and not have a complicated communication process between the company and agency.
The Famous Grouse is very keen on public relations; it sponsors the Scottish Rugby team and also sponsors various other events and sporting teams. PR is a good means of creating a good corporate image though appearing to encourage the local community. A sponsorship deal could be arranged for an established event in the USA. Sponsorship and any other of these events can be very expensive for it to be sufficiently exposed. But, the exposure is massive as the name is used in relation with the event through many different types of media with limited or not extra cost as it is word of mouth in a lot of cases.
Sales promotion is another means of encouraging a customer to buy The Famous Grouse. This can take the form of reduced prices, Coupons, Competitions and gifts with purchases. Products that are already established in the market use a lot of these methods of sales promotion. Reducing the price when introducing the product is a form of sales promotion but when the product is brand new is also called penetration pricing which was agreed previously in this report that is not the chosen method of entry into the USA market.
Place
When talking about place in the marketing it encompasses the transportation of the goods, purchasing of the goods, holding the goods and promoting the stock. This process is the distribution system, which is described by The American Marketing Association as “an organised network of agencies and institutions which in combination perform all activities required to link produces with users to accomplish the marketing task.” This description shows how all of the necessary movements of the goods are measured to provide a smooth and cost efficient transportation process.
When selling The Famous Grouse it has been decided that there will be a sales force supplied by the company to sell on to retailers throughout the USA. This structure of getting the product to the customer is not the shortest channel to use but it uses a sales force that is well versed in the production values, quality and the criteria that The Famous Grouse is able to meet when it comes to supplying the retailer with the product. The use of these trained sales people can contribute to the efficiency of the process because they report back to the company and removes the companies need to contact every retailer that it deals with. Working with this conventional marketing channel means that each of these parties work to provide an effective means of getting the goods to the customer, often autonomously they form a business unit which operates without one having greater control over the other, the retailer sells The Famous Grouses product. Should the arrangement become less beneficial to one of the parties it can be closed without having contractual obligations to closed, except the exchange of the individual goods with would have to be taken care of before any termination of business. The intermediaries in this structure will give their own specific benefits to the structure, the sales person supplied by The Famous Grouse will have the expertise and organisational skills to sell and arrange delivery to each retailer. The retailers will provide the property to store and sales people that are necessary to selling The Famous Grouse to the customer.
*All statistics courtesy of Scott Watson