For every business in the world, the main aim is to make profit. For spirit brands, this means improving strategies on how to leverage more consumers and make more sales which will in turn bring more money into the business. But how does this come to be?
Fortunately, research by Kasi Insight identified five considerations that spirit brands need to take as they work towards improving their sales.
1. Is there demand for the product? (Readily available market)
The pandemic had a great effect on consumer habits. Demand for certain products like spirits which are considered luxury goods, dropped drastically. For spirit brands, how have these habits impacted on their sales?
Kasi retail category demand index, a measure of consumer demand for retail category provides insights on how consumer habits impacted demand for various categories. The index ranges from + 0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase while an index level close to -0.25 means demand is low. This measure is an effective tool for demand planning.
The demand for spirits in Kenya is quite low (below +0.10), with the new normal, better results are expected. Averagely, demand for Whisky (0.067) is greater than that of the other spirit brands which made it the most preferred spirit in Kenya during the period. Interestingly, demand for Brandy has been increasing gradually from April 2021 (0.045), reaching its peak in February 2022 (0.065). Moving into the mid-year, will this trend continue? Though low, there exists a spirit market in the country that spirit brands can leverage.
2. What consumer segment drives the demand? (Who is the target market?)
After establishing that there is a ready market for spirits, brands should narrow down to which consumer segment drives this demand. Our Kasi Insight data enables one to group consumers into a few segments based on economic conditions, age-group, gender, income level, education level and marital status. In this case, we used age-group segmentation.
The consumer segment for spirit brands to target are Millennials. Currently, Millennials are the leading consumers of spirits across the board (Vodka, Brandy, and Whisky). They have an average demand level of 0.067. They are followed by Gen Zers with an average demand level of 0.049, Baby Boomers come in third with 0.048. Intriguingly, Gen Xers are lagging at 0.034, which is quite unexpected. We expect Baby Boomers to lag due to health issues that come with age.
3. Creating Brand Awareness - Marketing Strategies (What advertising channels do Millennials and Gen Zers prefer?)
After establishing the consumer segment to target, spirit brands should consider adopting relevant marketing strategies that would create awareness of their brand in the consumer segment. Now that the younger generations in Kenya drive spirit demand, what advertising channels do they prefer?
For these generations, communication with brands is still significantly preferred through traditional channels such as TV and Radio Ads; they rank 1 and 2 respectively. 57% of Gen Z and 53% of Millennial respondents prefer TV ads, while 46% of Gen Z and 43% of Millennials prefer Radio ads. Social media posts are growing in popularity amongst Gen Z, however, it is still overtaken by the traditional media channels. Brands should be on the lookout to see whether this trend continues.
4. Distribution Channels available (What delivery options does the targeted consumer segment prefer?)
After establishing what brand awareness channels work for their target market, brands should consider how they distribute their products. This entails having information on how Gen Zers and Millennials like their spirits delivered. This goes a long way in building brand-customer relationships as far as customer satisfaction is concerned.
In an era where e-commerce is expected to be picking up, instore shopping still thrives. Distribution of alcoholic beverages should be centered around specialist stores as 72% of Gen Z and 53% of millennials purchase items through this channel. Only 8% of both these age groups are using online retailers to purchase products therefore, even with the growth of e-commerce spirit brands should still consider specialist stores as a primary distribution channel.
5. Leverage consumer behavior data (Comparative advantage over competitors)
Ideally, this should be the first step. Knowing what to expect from consumers given the ever-changing market trends enables the spirit brand to plan and strategize on how to improve their sales. Additionally, obtaining data on how consumer habits change over time gives the spirit brand a comparative advantage over competitors in the same industry.
Our data intelligence platform can help you track these trends in consumer behaviors in Africa over time. This provides you with valuable insights that can help you or your business make fast data-driven decisions.
Contact our team today to explore how our brand intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehub
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