Market Research Project Report Group 9 17-19

Online liquor market

Topic:
To study customer perception and expectation for online portal dedicated to the delivery of
alcoholic beverages at their door step.

Objective of Research:
To understand consumer perception about buying liquor online.

Literature Review:
India is one of the fastest growing alcohol markets in the world. Rapid increase in urban
population, sizable middle class population with rising spending power, and a sound
economy, liberalisation and rapid globalisation are certain significant reasons behind increase
in consumption of alcohol in India.

Alcohol Consumption - The Changing Behavior provides a comprehensive analysis of the

market size of alcohol industry on the basis of type of products, consumption in different
states, retail channel and imported and domestic. The Indian alcohol industry is segmented
into IMFL (Indian made foreign liquor), IMIL (Indian made Indian liquor), Wine, Beer and
imported alcohol. Imported alcohol has a meager share of around 0.8% in the Indian market.
The heavy import duty and taxes levied raise the price of imported alcohol to a large extent.
Alcohol is exempted from the taxation scheme of GST.

India is the third-largest and fastest-growing liquor market in the world. Alcoholic beverages
is considered a sunrise industry owing to its high-growth potential and increasing social
acceptance. According to our research, the alcoholic beverages market in India is expected to
grow at a CAGR of around 7.72% over a 10 year period to reach a value of INR 5.3 trillion
inFY2026.

An average Indian male drinker consumes three times more alcohol than an average female
drinker each year. Region wise, south Indian states constitute the highest alcohol consuming
region in the country. There are various types of alcoholic beverages available in India, but
beer is the fastest-growing segment in the country. It is expected to grow at a CAGR of 7.5%
betweenFY2017andFY2021.

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Key growth factors

Growing urbanization has introduced a larger consumer group, mainly young men and
women to alcoholic beverages and has resulted in more consumers willing to try new
products.

Increased consumption of liquor in rural areas is another major reason for the growth in the
market. Furthermore, the easy availability and accessibility of alcohol in rural and urban
areas is an important factor in determining the growth of the alcoholic beverages market in
India.

Factors such as rise in income and increasing social acceptance are expected to support the
growth of alcoholic beverages market in India.

Threats and key players

Although alcoholic beverages have been kept out of the purview of the Goods and Services
Tax (GST), it may impact the sector negatively. The input materials, at present, attract excise
duty, sales tax, and VAT at 12 percent to 15 percent, whereas under GST, this is likely to be
at 18 percent. So, there is a clear increase in tax on most input materials by 3 percent to 6
percent. Additionally, the ban on alcohol in some states in India, such as Bihar, Kerala, and
Gujarat, has adversely affected the sales of alcoholic beverages. Some of the major players in
the alcohol beverage market are Allied Blenders and Distillers Pvt. Ltd., Carlsberg India Pvt.
Ltd., John Distilleries Ltd., Mohan Meakin Ltd. and Pernod Ricard India Pvt. Ltd

Variables Defined:
v1 Acceptable norm
v2 Buy Online
v3 Social stigma in online shopping
v4 Ease of availability
v5 Price
v6 Variety
v7 Quality Assurance
v8 Discounted Rates on Bulk orders
v9 Low delivery charges
v10 Ease of purchase
v11 Authenticity
v12 Delivery Time
v13 Late night delivery
v14 Premium charges for delivery

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Questionnaire
Age

A. 21-25
B. 26-30
C. 31-35
D. 36 or older

Gender

1. Male

2. Female

3. Others

1. What is your favourite drink?

A. Whiskey

B. Rum

C. Vodka

D. Beer

E. Tequilla

F. Other

2. How often do you drink?

A. Rarely (once in 2 months)

B. once in a month

C. more than once in a month

D. once in a week

E. more than once in a week

3. Social Drinking is an acceptable norm*

1 - Strongly disagree

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5 - Strongly agree

4. How likely will you by liquor online?

1 - Strongly disagree

5 - Strongly agree

5. Rate the following attributes on the basis of how they would affect your offline purchase?

a. Social stigma

b. Ease of availability

c. Money

d. Variety

e. Quality assurance

6. What's your poison (type of drink)?

A. Whiskey

B. Rum

C. Vodka

D. Beer

E. Tequilla

F. Other

7. What all assortments would you prefer while buying online?

a. Salted peanuts

b. Boiled peanuts

c. Masala peanuts

d. Bhujiya

e. Potato chips

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f. Nachos

g. Cheese balls

h. Boiled corn

8. What mixers do you prefer while buying online?

1. Soda

2. Sprite

3. Thumps up

4. 7 up

5. Pepsi

6. Coke

7. Fanta

9. Rate the following factors on how they influence you to buy alcohol online.

a. Discounted rated on bulk orders

b. Low delivery charges

c. Ease of purchase

d. Variety

e. Authenticity

f. Delivery time

g. Extended delivery time

10. Would you pay extra for late night home delivery?

1 - Strongly disagree

5 - Strongly agree

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Analysis:

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Factor Analysis
Results:

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .821

Bartlett's Test of Sphericity Approx. Chi-Square 645.430

df 105

Sig. .000

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

% of Cumulative % of Cumulative % of Cumulative

Component Total Variance % Total Variance % Total Variance %

1 6.365 42.436 42.436 6.365 42.436 42.436 4.057 27.047 27.047

2 1.548 10.321 52.757 1.548 10.321 52.757 3.156 21.037 48.084

3 1.353 9.020 61.777 1.353 9.020 61.777 1.608 10.719 58.803

4 1.108 7.389 69.166 1.108 7.389 69.166 1.554 10.363 69.166

5 .940 6.264 75.430

6 .778 5.189 80.619

7 .657 4.380 84.999

8 .539 3.596 88.594

9 .410 2.730 91.325

10 .361 2.406 93.730

11 .301 2.004 95.734

12 .195 1.301 97.035

13 .180 1.203 98.239

14 .156 1.039 99.278

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15 .108 .722 100.000

Extraction Method: Principal Component Analysis.

Rotated Component Matrixa

Component

1 2 3 4

Acceptable Norm .203 .041 -.648 .569

Buy Online .018 -.014 .044 .841

Social Stigma in Offline.186 .186 .676 .050

Shopping

Ease of Availability .788 .196 -.002 -.106

Price .721 .256 -.205 -.285

Variety .365 .719 -.018 -.220

Quality Assurance .305 .811 -.023 -.059

Discounted Rate on Bulk Orders .724 .231 .186 .258

Low Delivery Charges .740 .245 .321 .118

Ease of Purchase .621 .358 .422 .133

Variety .342 .707 .293 .346

Authenticity .233 .839 .151 .105

Delivery Time .646 .482 .082 .214

Late night Delivery .702 .257 .352 .297

Premium charges for Delivery .274 -.310 .361 .120

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 18 iterations.

Component Transformation Matrix

Component 1 2 3 4

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1 .747 .601 .244 .149

2 .182 -.541 .309 .761

3 -.102 .302 -.770 .553

4 .631 -.505 -.502 -.307

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

Analysis

F1-Convenience and Low Prices

Customers are looking for value for money and are price sensitive to purchase. They are not willing to
pay a premium for the online service. They are looking for convenience in purchase.

F2- Quality and variety

The customer wants a brand that they can trust and are looking for authenticity in the products.

F3- Social stigma

For offline purchase, customers still consider social stigma a driving factor in purchasing.

F4- Ready for online liquor store

The analysis gives us the result that the customers are ready for an online liquor market.

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Cluster Analysis
Results:

Final Cluster Centers

Cluster

1 2

Acceptable_Norm 3.68 3.87

Buy_Online 3.13 3.04
Social_Stigma_In_Ofline_Shopping 2.06 2.70
Ease_of_Availability 2.77 4.17
Price 2.77 3.91
Variety_Offline 2.77 4.30
Quality_Assurance 2.45 4.41
Discount_Rate_on_bulk_orders 3.00 4.35
Low_delivery_charges 3.10 4.48
Ease_of_purchase 3.29 4.50
Variety_Online 2.97 4.30
Authenticity 2.74 4.59
Delivery_Time 3.16 4.50
Late_night_delivery 3.29 4.63
Premium_charges_for_delivery 3.26 3.35

Cluster 1
Acceptable norm: The people are having a neutral to slightly contradictory point of view for
consumption of liquor as an acceptable norm.

Buy Online: The people are having a neutral to slightly contradictory point of view for online
ordering of liquor as an acceptable norm.

Social Stigma in offline shopping: There exists social stigma towards buying liquor offline.

Ease of availability: People are moderately affected by this factor

Price: This is an important factor that affects the decision of purchase.

Offline Variety of liquors: People are moderately affected by this factor.

Quality Assurance: One of the most important factors. People naturally look for quality
products.

Discount Rate on Bulk Orders: Not one of the defining factor. More of an additional service
than an essential one.

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Low Delivery Charges: People would rather pay on delivery charges than going themselves
to buy the liquor.

Ease of Purchase: One of the less important factors, not forming a necessary pillar of
customer decision making process.

Variety Online: Availability and ease of access are more important than variants in the
product category. People can compromise and buy other types if the desired variant is
unavailable.

Authenticity: People want to be assured of the quality of the product before they buy.

Delivery Time: People can wait for their drink to arrive.

Late Night Delivery: Constraints on late night delivery are acceptable.

Premium charges on delivery: People are not against paying more for the liquor delivery.

Cluster 2
Acceptable norm: The people are having a neutral to slightly contradictory point of view for
consumption of liquor as an acceptable norm.

Buy Online: The people are having a neutral to slightly contradictory point of view for online
ordering of liquor as an acceptable norm.

Social Stigma in offline shopping: There exists social stigma towards buying liquor offline.

Ease of availability: People want their liquor to be easily available.

Price: People are ready to pay more and are indifferent to high prices.

Offline Variety of liquors: People are specific about their preferences and hence this is an
important factor.

Quality Assurance: Quality of the product is not important according to the buyers.

Discount Rate on Bulk Orders: People normally prefer if significant discounts on bulk orders
are provided.

Low Delivery Charges: People are reluctant to pay more on delivery.

Ease of Purchase: Customers want the ordering process to be smooth and hassle free.

Variety Online: People aren’t willing to compromise and buy other types if the desired
variant is unavailable.

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Authenticity: People are less particular of the quality of the product.

Delivery Time: In time delivery is always preferred.

Late Night Delivery: Customers would be delighted if late night deliveries are made
available.

Premium charges on delivery: People are not against paying more for the liquor delivery.

IMC Campaign:
Campaign for cluster 1:

The Customers are willing to buy alcohol online and the service is viable in the cluster 1
segment.

The customers need value for money product and are particular about quality of the product.

They are less affected by the delight services and can be considered to be becoming one of
the regular buyers and consumers.

They should be targeted by concentrating on Value for money services and the Authenticity
of the product.

Campaign for cluster 2:

The Customers are willing to buy alcohol online and the service is viable in the cluster 2
segment as well.

This segment is also reluctant to purchase alcohol from offline stores, and are willing to pay
for online services.

They are less affected by the prices or quality of the product, and more particular about hassle
free services and ease of purchase and in time delivery.

This customer segment is to be targeted by emphasizing on the Service and Premium Product
Service Packaging than just the Value for money services.

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