Scotch Whisky Industry in the UK - Essay Example

?WILLIAM GRANT & SONS College: Executive Summary. International marketing is has become more and more popular among companies around the world. International marketing has also been in the light for debate on an agenda of homogeneity. The concept of trading internationally is highlighted as a means of unifying the differences of countries then bringing together their similarities (Stanat et al 1998). It is contended that, since homogeneity of the markets is becoming relevant for trade then international differences are not useful in creating a better market that caters for the needs of global consumption. Homogeneity in the needs of the market therefore is the unifying factor in creating better international markets. This argument is contended by others that believe an international market is impossible to exist since there are several dynamic differences in the trends of various nations. The growth of trading agreements in certain regions has constantly developed and become a source of interaction in business and marketing strategies creating trading relationships between countries (Stalk et al 1980). 2.0 Balvenie in the UK. Such bodies as the North American Free Trade Arrangement, the European Union and others are forms of regional trade agreements that have been formed over the years of international marketing development. These bodies work on eliminating region trade barriers to allow other organizations without those regions trade freely within each other’s borders. These relationships are advantageous in allowing the companies engaged in international trade to obtain economies of scale while consumers of their goods enjoy low prices and access to a variety of products. These trading regions create free movement of labor and resources among other advantages. Engagement in international trade is therefore more of an advantageous venture for greater success in companies and have more advantages to disadvantages. Organizations like Grant and Sons are among the firms involved in the free international trade operations that are an expansion to the business in the long run. The firms gain in advantage from free movement and labor. The firms as well engage themselves in further customization of the products that creates better quality in the products sold such as the whisky distilled by Grant and Sons organization in the various outlets of the company’s distilling plants (Zuckerman et al 1998). The extensions of the Grant company into the international market is a cause for the exciting entrepreneurial environment created by interactions in joint ventures with companies such as Remy Cointreau and third party agreements in UK Portugal. This kind of ventures have also given motivation and confidence to the organization from acceptance by the market outside their own country. 2.1 The Scotch whisky industry in the UK. Scotch whisky has over the years only been matured and distilled in one country which is Scotland. This brand has grown from a simple cottage industry to being the sole global supplier in over 210 countries. Changes created in bid to make international ventures include complete changes or adjustments in the administration and organizational structure. The management approach incorporated involves the geocentric approach suggested by Permulter (1969) that brings about a more globally integrated management system. Despite the successes of Scotch whisky, the industry requires methods that grow every day to maintain the position of top quality as an unchallenged player. This will involve customization of the brands by seeking customer response to quality. It is important that the industry carries out an area study of the people it supplies with whisky in order to realize options of expansion. 2.2 William Grant and Sons in the UK. William Grant and Sons is a great contributor to the whisky industry in the UK. It is characterized by authenticity in its production. William Grant and Sons utilizes its own water from springs in production process and its own grown barley in some of the plants such as Balvenie. The firm’s use of other resource in coppersmith skill is another way of improving its brands. In a matter of venturing the global market, the organization should come up with an advertising plan that will appeal to the needs of the people on the brand. William Grant and Sons ought to introduce the product to create an awareness and popularize it amongst the population of potential consumers. A marketing plan inculcates political stability of target regions. The area intended for plant building is especially important in establishing extension. Government policy is relevant to enhance processes that allow for international trade. Government policies revolve around, favorable legal requirement terms, the process of obtaining legal documents and the taxation process that is not based on restrictive and harsh terms. Ideology driven economy, infrastructure and colonialism along with the dichotomy policies of the United Kingdom. 2.3 Strategic options for the Balvenie brand in theUK. The marketing project of Balvenie brand is determined by factors as entry barring policies of other countries in the United Kingdom (Becker et al 1980). An expansion will therefore require analysis of trading policies of these countries where it intends to establish the Balvenie plant. The plant is expected to present a marketing strategy in addition to analysis of potential areas for easier connection to consumers of the Balvenie brand. William Grant and Sons having established public image for relations purpose, should in turn develop political related establishments that ensure safety of the plant against political violations. The brand is also dependent on joint ventures along with investments for good public image. To create more relations with firms like the Remy Cointreau is therefore a step in establishing better ground for the new plant. 3.0 How to research the Indian market as a future opportunity for growth and expansion. To expand into other new regions for the Balvenie brand such as India in the international market requires more analyzed strategy on investment as a whole. The industry in India has generally been recorded as insignificant in consumption and numbers (Kotabe et al 1998). The research has also proved the challenges posed to the industry are those toward matters concerning storage of inventory and transportation of the products to the Indian market population as well as unfavorable taxation policies, poor advertising, marketing and promotional skills. The demand has however grown from the association of drinking, both wine and whisky from an undesirable act to as a social statement of well-being. The venture therefore by the William Grant and Sons, Balvenie brand would be a prevalent one. The marketing strategies developed consider both the availability of the market in general and the actual customization of the brands. The market evaluation goes further to look into factors as regional integration and technological aid in expansion strategies by the companies planning to go into the international market like the Indian venture (Newfarmer et al 2009). The market entry strategy comprises of the method involved in an already identified market, the Indian market for Scotch whisky. The firm should realize any form of competition and strive to be the best among the players in the industry by incorporating technology in the methods of advertising and marketing (Kahler et al 1977). William Grant and Sons should consider the possibilities of barley farming in India or resort to bringing the barley in from the Balvenie plant in United Kingdom. Uniqueness in brand and originality from the barley farming project increase the competitive advantage of the brand in India over the existing players and those to come. The organization should look to compete with both the local market and the foreign market as other western firms will target to enter the Scotch whisky industry, this is due to the perspective of the Indian population toward alcohol and whisky changing with time. The firm’s use of third parties and distributors is also useful in creating the link between the whisky production in the UK and the market India. The organization should develop a well-structured and efficient exportation plan for the product, ensuring good storage process and transportation. The management of the firm should be committed to the process by providing both human resource and monitoring the exportation process from the arrangement process to the tactual transit and the delivery of the inventory. The management selects the most convenient method of transportation between air and water, shipping (Thompson, H 2001). 3.2 Issues and challenges to launch Balvenie in the Indian market. The organization finds a useful and affordable method of marketing by other means apart from direct exportation which involve indirect exportation and use of agents to distribute their products. Indirect exporting involves use of domestic purchase services where an organization exports its product to a different organization that again exports the product to another country. This method is however limiting for firms like the Grant and Sons since the knowledge of the product is limited to a second party and faces second hand limitations of information before it reaches the final destination (Thorelli et al 1980). Lack of product knowledge limits the use of the products and lowers the consumer loyalty toward the organization creating it. This intermediary increases the chain of information that leads to late or no feedback from the consumers of the product and the response from the company to the consumer. Export management houses are another useful means of indirect exportation. They involve exportation firms that engage the exporting firms in the transfer of goods to foreign companies, these departments aid in the government regulation and documentation processes of an organization’s export process and monitors inventory and storage of the same. In exportation process, it is therefore important to find the suitable agent for the activity to India. The agents should be firms or individuals with a good customer base for whisky sales in India to increase the sales by making use of a good public image (Johansson, J.K 2006). They should be financially stable to ensure convenience in the process of exportation, the company should have the financial capacity to obtain the inventory and store it in sufficient conditions as well as cater for the suitable secure transportation during sale, the equipment available for use in handling the inventory and certain activities such as bottling are useful in finding a convenient agent to the distribution of the whisky (Hess et al 1966). When finding an agent, it is necessary to keep them motivated for better output in the marketing in the foreign countries. Motivation is created by economies of scale for the distributors and other incentives as creating opportunities for them to visit the Balvenie plant in the UK and come into contact with the actual production process. Such motivation provides the distributors with confidence and faith in the product that he in turn imparts on the consumers of the product. An Indian agent for Balvenie who visits the plant is able to create such testimonials of the production process and its quality to the consumers, promoting it as a high quality and the best whisky made through the finest process and own company grown and managed barley. It is important as the actual plant for the Scotch Company to provide the agent with enough support for overall ease in running. (Frieden J.A 2006). Such support could be in sponsoring or creating joint activities with the agent to enhance popularity in other fields where consumers are, the firm should support decisions to market and distribute made by the agent in India for better functioning. As part of the process of finding a good agent, the firm should put effort in resources and time to find the best agent and the most suitable that they possibly can. A good agent and a good relationship with the agent for the whisky company is useful in efficient and in future expansions. 3.3 Balvenie in India. The trade agreement and venture in India by the Scotch whisky Company involves bringing together resources from the two parties, the firm and the Indian agent and market. (Dahringer et al 1991). Resources vary in the East from the West. While the west provides financial managements, technology and information systems, production processes for the whisky, Indian agent provides with human resource, land and infrastructures along with political stabilities and connections with the market. The organization after identifying an agent and establishing the process of production and distribution must also address issues of risk and insurance, licensing and other activities that are involved in effective running of the brand Balvenie in India. Licensing should be made as clear as possible while outlining all the necessary requirements. (Czinkota et al 1995). Useful licenses should be picked and addressed to regularly when their period of functionality has come to an end in order to be renewed. Some important documents in this process involve patents relating to the process of Scotch whisky production and know how. Licensing statement addresses market description and the name of the organization in use during transactions. William Grant and Sons is the name whose good image could be used by other organizations for profit. The organization is also a legal person with liabilities to the nation and can answer in a court of law for any activities carried out in its name. (Agtmael et al 2007). The license therefore also addresses specific trade activities that the organization can be involved in and specific market the trade engages in. For better running of an international venture and market, it is important to use copyrights and trademarks as these to obtain for organization rights to keep their secrecy and security in competition. 4.0 Conclusion. After gaining entry into the international market, maintenance and management is useful in order to retain competitive advantage that Scotch whisky has in the UK well enough in India. The organization may result to creating barriers for other organizations coming in due to low resources for example barley plantations in India (Craig et al 2007). The organization creates its own source from home to be used in production. This denies other organizations fair access to the same resources gaining a competitive advantage for the Scotch whisky Company. The organization goes further into gaining control of resources like the barley plantation and provides for other firms coming in, to create an opportunity of growth ahead of other incoming organizations into the market. The organization by expanding itself in India and gaining part in licensing activity is also able to control the territory. William Grant and Sons whisky in the international market and specifically in India is an opportunity to grow into the East. To gain control of the market gradually leads to further expansion into neighboring companies (Albaum, G.S 1989). This, from the quality of whisky provided and the effort put in business as well as the third parties and joint ventures created into further integration of a global market are accomplishments of globalization. The licensing process allows licensed firms to later venture into larger markets, it allows for political relations to happen. Political relations are useful for the good of the company and society all together, it increases their capacity to produce and give back to society. It allows for production of quality goods for consumption in order to stay at the top of the competition pyramid. This happens to the advantage of consumers and that of the government. The government gains in trades of different organizations through taxation. Organizational overall improvement in is notable in quality of incorporated technology. Growth is also evident in diffusion of production, distribution, communication and promotional prospects. The trend of global marketing has generally been beneficial to the society for example William and Sons would avail good quality of whisky in India with that venture while providing other goods and services that may arise in the process. 5. 0 Bibliography. Albaum, G. S. (1989). International marketing and export management. Wokingham, England, Addison-Wesley. Agtmael, A. W. V. (2007). The emerging markets century: how a new breed of world-class companies is overtaking the world. New York, Free Press Craig, C. S., & Douglas, S. P. (2000). International marketing research. Chichester [England], Wiley Czinkota, M. R., Ronkainen, I. A., & Tarrant, J. J. (1995). The global marketing imperative. Lincolnwood, Ill., USA, NTC Business Books Dahringer, L., & Mu?Hlbacher, H. (1991). International marketing: a global perspective. Reading, Mass, Addison-Wesley. J. A Frieden,. (2006). Global capitalism: its fall and rise in the twentieth century. New York, W.W. Norton Hess, J. M., & Cateora, P. R. (1966). International marketing. Johansson, J. K. (2006). Global marketing: foreign entry, local marketing & global management. Boston, McGraw-Hill Irwin Kahler, R., & Kramer, R. L. (1977). International marketing. Cincinnati, South-Western Pub. Co Kotabe, M., & Helsen, K. (1998). Global marketing management. New York, J. Wiley. Newfarmer, R. S., Shaw, W., & Walkenhorst, P. (2009). Breaking into new markets: emerging lessons for export diversification. Washington, D.C., World Bank. R.D. Irwin. Thorelli, H. B., & Becker, H. (1980). International marketing strategy. New York, Pergamon Press. Stalk, G., & Hout, T. M. (1990). Competing against time: how time-based competition is reshaping global markets. New York, Free Press. Stanat, R. (1998). Global gold panning for profits in foreign markets. New York, N.Y., Amacom. Thompson, H. (2001). International economics global markets and international competition. Singapore, World Scientific. Thorelli, H. B., & Becker, H. (1980). International marketing strategy. New York, Pergamon Press. (1995). Global management 1995. Vol. I. Brussels, Management Centre Europe. Zuckerman, A., Biederman, D., & Zuckerman, A. (1998). Exporting and importing negotiating global markets. New York, Amacom. Read More