# data[].attributes.body
Industry Environment: The market for premium spirits in the UK is promising. Penetration levels are high despite the fact the alcohol consumption in the UK is slowly but steadily declined and any permanent shift will be short, which is a double-edged sword to newcomers. On one hand, the new brand can be easily introduced to the market; on the other hand, the advantages won’t be permanent if the company cannot respond fast to the market. In addition, the current trend in the UK spirits market is influenced by the constant move to higher price segments and rapidly increased interest in imported brands. However, cheaper brands have suffered the most in the recession; British consumers who have cut down the amount of alcohol they drink are still willing to pay more for premium quality drinks.

# data[].attributes.headline
Fierce Competition among Premium Alcohol Industries in the UK

# data[].attributes.subject
Fierce Competition among Premium Alcohol Industries in the UK

# data[].attributes.body
UK spirits market category segmentation: $ billon, 2012

In terms of the UK spirits market category segmentation, whiskey and vodka constitute the most, with 39.4% and 25.5% respectively. The figure for other spirits remains lower than 10%. Therefore, Maotai has opportunity to increase market share.

# data[].attributes.headline
UK Retail Market Size for Alcoholic Beverages, 12 months to December 9, 2015

# data[].attributes.subject
UK Retail Market Size for Alcoholic Beverages, 12 months to December 9, 2015

# data[].attributes.headline
The External Environment (PESTLE analysis) 

# data[].attributes.subject
The External Environment (PESTLE analysis) 

# data[].attributes.body
Political Factors that Impact Moutai

The political factors that may impact the profitability or chances of survival of the company are quite diverse. The political risks vary from sudden changes in existing political regimes to civil unrest to major decisions taken by the government. In cases of possible multinationals, one may also include political factors that take place/ affect not only the host country but also all countries that contain business operations, or that may engage in trade with Moutai.

1. The level of political stability that the country has in recent years.

2. The integrity of the politicians and their likelihood to take part in acts of corruption, as the resulting repercussions may lead to possible impeachments or resignations of high-level government employees.

3. The laws that the country enforces, especially with regards to business, such as contract law, as they dictate what Moutai is and is not allowed to do. Some countries, for example, prohibit alcohol or have certain conditions that must be fulfilled, while some government systems have inefficient amounts of red tape that discourage business.

4. The trade barriers that the host country has would protect Moutai; however, trade barriers that countries with potential trade partners would harm companies by preventing potential exports.

5. A high level of taxation would demotivate companies like Moutai from maximizing their profits.

Moutai has been used on official occasions in feasts with foreign heads of state and distinguished guests visiting China. It is the only alcoholic beverage presented as an official gift by Chinese embassies in foreign countries and regions. As the Chinese government has been started a movement that encourages consumers to save more and fight against waste, the sales of Chinese spirits have dropped off in domestic markets.

# data[].attributes.body
Target Market:

1.  EU/UK
2. Target customers as people who have high social status
3. Age 35-64
4. Highly educated
5. Successful entrepreneurs

(They drink the most in terms of premium alcohol and have more experience with different styles of alcohol and therefore they have the confidence to customise. They are highly educated, better travelled and more adventurous and prefer world-class brands with complex tastes and a greater story.) (Therefore, Moutai is the symbol of success in Chinese culture and Moutai Group sets their target customers as people who have high social status.Therefore, the characteristics behind Moutai can cater for the demand of those who are aged 35 - 64 and are prepared to pay a premium for quality and a product with a long history in the UK market.)

Segments:

Age 30-40: As a gift for elders and managers

Age 40-55: Show they successful and at high social status

Age 55-65: love spirit, also care about heath

Different drinking culture in the UK

In comparison with British drinking culture, the aim of China’s drinking culture is not to get people drunk as soon as possible. People tend to drink small amounts of alcohol over a long period of time. Once people start drinking, it is not considered socially acceptable to stop until everybody else has, the consequence of doing so would be to lose “face”. This is due to the fact that “face” can be viewed as one’s public self-image and people from low uncertainty avoidance countries like China are afraid of losing face, which also means losing reputation. An important part of Chinese drinking culture is the business banquet; people drink baijiu in order to communicate with representatives from other companies. Additionally you are there to represent your company, if one were to back out, the boss and whole company will lose face.However, there is no “losing face” in British drinking culture. Moutai therefore cannot instil the concept of “face” into British drinking culture. The British drinking culture can be seen to be too excessive, which shows 50% of consumers drink alcohol “once a week” or “at least twice a week or more”. Traditionally, alcohol has been used as a stress reliever to relax and unwind after a tough day’s work, which has particularly been the case during the recessions.However, the drinking culture has experienced some recent changes; consumers drink at home more frequently and less than one fifth of consumers drink to get drunk. British alcoholic consumption has declined since 2004 as consumers cut down their drinking amount for the sake of health or economic or lifestyle changes. In addition, societal changes have caused the UK pub industry to become establishments that are more suitable for families, women and casual dining in order to stop the shift to drinking at home (30%).

Positioning:

Premium, high quality spirit and less harmful substances

# data[].attributes.body
Price:

Not reduce its products’ price as it has a long brand history of nearly 100 years and can provide quality liquor to satisfy consumers. The pricing strategy Moutai should adopt is to use its outstanding quality of products and services to differentiate from products from other brands. This is also due to the fact that even the British economy has experienced a downturn and consumers drink less alcohol than they used to be; however, they are still increasingly willing to pay more for the quality of alcohol. It is also interesting to note that it is the cheaper brands that have suffered the most in the economic recession.

Place:

make consumers have easy access to its products and adopt effective distribution channels to sell. First, Moutai should put priority to supermarkets because supermarkets have the highest exposure rate to consumers and consumers purchase most alcohols in supermarkets as well.

Promotion:

Change the packages in terms of different usage of its products in order to rebuild its profile and attract more consumers. This is due to the fact that consumers nowadays are more likely to adopt immediate and tangible factors such as stylish packaging that are eye-catching and attractive to define a premium spirit.

Product:

Creating a new Moutai that are able to adapt to the British drinking culture and add more traditional Chinese herbs.

# data[].attributes.body
Attending the global alcohol exhibition to exhibit their products in order to increase exposure. Therefore, more consumers who are interested in alcohol can have a clear idea of Moutai’s products.

it is recommended for Moutai to adapt online platforms to find opportunities and markets for its products.

Adopting celebrity endorsement strategies to enhance Moutai’s brand image.

free educational activities can be hold to teach people from the UK of Moutai’s history and how to taste Maotai’s products.

Moutai should hire professional team to make a short video that introduces Moutai and its products’ differentiation from other spirits through social media in order to establish its own value and improve brand recall in the UK alcohol market.

As a new entry enterprise in the UK spirits market, a conceptual store is strongly recommended to open as to provide a place where people can have easy access to Moutai’s products and culture. Trial products are provided in the store for consumers who show great interests on them. This is the same with the conceptual store of digital brands that arouse many people’s interests and help increase the sales as well.

Moutai group could cooperate with famous corporations who have strong influence and know what British people attitudes toward drinking is and how to propose effective promotion activities.

As a premium liquor brand, Moutai could cooperate with famous transportation companies, such as Virgin, then Moutai should provide their products in the first class in order to match a high-end definition and tap into use of resources of people who enjoy the first-class service.

Moutai could cooperate with high-end restaurants and pubs which are still the main consuming places of alcohol. This can improve its coverage over the drinking market.

# data[].attributes.body
Identify competitor:
Diageo plcaccounts for the largest UK spirits market share at 26.6% whereas other operators constitute lower than 10%. It is important to note that Diageo plc has taken full control of Chinese luxury baijiu brand-shuijingfang and sells it to European countries. Therefore, Moutai has to face competitive competitors who occupy a majority market share and have an abundance of experience of how to manage premium brands in the UK market.

Diageo plcaccounts for the largest UK spirits market share at 26.6% whereas other operators constitute lower than 10%. It is important to note that Diageo plc has taken full control of Chinese luxury baijiu brand-shuijingfang and sells it to European countries. Therefore, Moutai has to face competitive competitors who occupy a majority market share and have an abundance of experience of how to manage premium brands in the UK market.

UK spirits market share: % share, by volume,2012

# data[].attributes.headline
Strategy from Annual report 2017 of Diageo plc.

# data[].attributes.subject
Strategy from Annual report 2017 of Diageo plc.

# data[].attributes.body
We aim to grow our participation in international premium spirits.

Our strategy is to support premiumisation in developed markets and increase our spirits participation in emerging markets through categories that give us access to the growing middle class consumer.

To support this, we participate in both beer and mainstream spirits selectively where it delivers organisational scale and distribution reach, allows consumers to access our brands at affordable price points and to shape responsible drinking trends in markets where international premium spirits is an emerging category. Our broad portfolio means we have leading positions across many of our markets, enabling us to serve consumer occasions with our brands, across price points. Everywhere we operate, we do so in a responsible and sustainable way.

# data[].attributes.body
Create a new product line for Moutai that is suitable to the British drinking culture. A niche market will be captured with the integration of traditional Chinese herbs. The gold is to increase the Moutai market share in the UK.