The Role of Communication and Loyalty Marketing, Impacting Alcohol Consumption in India

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THE ROLE OF COMMUNICATION AND LOYALTY MARKETING, IMPACTING ALCOHOL CONSUMPTION IN INDIA

A dissertation submitted in partial fulfilment
of the requirements for the degree of
Master of Business Administration (International Business)
In the University of East London
29th August, 2012

Abstract
In this research I have chosen to identify the impact of communication and loyalty marketing in the Indian liquor industry. As in the Indian market, no direct advertisements are allowed, companies use surrogate ads and promotional events to lure and retain their customers. During this research I also analysed what influences alcohol consumption, at what age people are introduced to alcohol and where do the consumers get the information on alcoholic products. I have used the quantitative approach in this research by distributing questionnaires and gathering necessary information. I have also read various journal articles, online gateways and databases, online journals, Government and other regulatory body publications, books in the context of the alcohol industry and reference texts. From all the knowledge and data that I have gathered during this research I have noticed that there has been steady growth in the alcohol industry in India. All the restrictions, taxations, media restrictions and policies introduced by the government have still not been able to hinder the growth of this industry. At the end of this paper, I have been able to suggest a few recommendations on how the Indian government can reduce the exposure of youth to alcoholic products and also some means to control the impact of advertising by the liquor Industry.

Table of Contents
Introduction……………………………………………………………….……1 History of liquor in colonial India………………………………………………3 The Indian liquor industry prohibition story………………………………..…4 Indian breweries…………………………………………………………..…….6 Review of literature………………………………………………..……….…9 Onset of drinking among youth…………………………….……….…..……10 Alcohol advertising appeal…………………………………….……………...10 Advertising ethics……………………………………………………………...11 India –trends in alcohol advertising…………………………………….…….12 Key Success Factors – Indian spirits industry……………………………...13 Demographic differences in exposure to alcohol advertising……………………………………………………………………….14 Brand and customer loyalty…………………………………………..………..15 Dynamic model of customer loyalty…………………..………………………17 Six principles of loyalty……………………………………………….………...21 Indian study……………………………………………………………….….….25 Study objectives and methodology………………………………………..27 Research philosophy……………………………………………………….…..28 Research approaches………………………………………………………….28 Questionnaire development process………………………………………….30 Study methodology and sample……………………………………………….32 Analysis and findings…………………………………………………………36 Alcohol consumption habit among friends……………………………..…….38 Sources of influence for alcohol consumption…………………………….…40 Sources of information on alcoholic products………………………………..45 Summary of findings…………………………………………………………….49 Discussion and conclusion…………………………………………………..50 Recommendations……………………………………………………………....52 Appendix - 1…………………………………………………….……………….54 Bibliography………………………………………………………………..……61

List of Tables Pg No. Table 1 India spirits market value: $million, 2006-10……………………2 Table 2 India spirits market share: Percentage share by volume, 2010..........................................................................................8 Table 3 Sample description ……………………………………………… 36 Table 4 Gender based alcohol consumption..………………….……….38 Table 5 Alcohol consumption habit among friends………………..…….39 Table 6 Sources of influence by gender…………………….……………40 Table 7 Regularity of alcohol consumption by gender …………….…...41 Table 8 Extent of consumption by gender……………..…………..……..42 Table 9 Venue of alcohol consumption...
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