Product diversification is a strategy employed by Liquor Supplier Philippines on the grounds of increasing their offerings, appealing to different market segments, and remaining relevant in the industry. It entails introducing new products, new categories, or new brands into the suppliers’ array of goods to satisfy the consumer’s changing demands and even explore more markets.
Concerning the competitive liquor business in the Philippines, diversification is a necessity because there are different preferences, cultures, and trends that affect purchase decision-making. This article discusses the need for product diversification, its most widely practiced approaches, and factors influencing liquor suppliers in the Philippines.
Table of Contents
Why Product Diversification Matters
The liquor industry in the Philippines has a mixed bag of consumers from those looking for affordable products to those who don’t mind paying for high-end and rare drinks. Diversifying a product enables liquor suppliers to:
Increase Market Reach
The additional stock allows the providers to target various gender classifications, age brackets, and diverse ways of living.
Reduce Risk
In case of shifting market conditions, it can be perilous to depend solely on a single product or a particular product category. This is because diversification mitigates the effect of such market changes by enabling the business to range over several products.
Adapt to Consumer Trends
These days, the inclinations of Filipino consumers are on the rise, with changes in how people consume alcohol, premium products, and craft drinks becoming trends. These changes are enhanced by the expansion of the product portfolio by the suppliers.
Maximize Revenue Opportunities
At many different levels and about all segments, liquor vendors tend to maximize their revenue and profitability.
Popular Product Diversification Strategies for Liquor Suppliers
There are ways in which liquor suppliers in the Philippines can expand their product range. These strategies can be modified according to different target audience preferences, market developments, and competition. Here are some of the most common diversification approaches:
Expanding Product Categories
One of the easiest and most obvious approaches to diversification is to increase the number of product lines. It is another good idea to offer sales of different types of beer, including local craft beers, as well as class members which are spirit drinks. The category of wine is worth considering due to the ever-increasing consumption of wine, especially by middle-income earners and above. Suppliers can offer red, white, and sweet dessert wines from various regions as well as fortified sweet wines.
Spirits suppliers can also offer other drinks under the spirits range such as rum, gin, vodka, whiskey, brandy, and tequila. Local drinks such as lambanog which is a coconut-based drink can also be marketed. The popularity of this category is largely due to the hectic lifestyles of most customers and partygoers who find the idea of pre-mixed cocktails and ready-to-drink alcoholic beverages more convenient.
Offering Local and International Brands
Another way of increasing the portfolio of the organization and providing additional markets is to provide both domestic and import brands. This permits the different tastes of consumers, that is, those who want to buy goods from other countries and those who like the products produced in their country. It helps revive the trend of supporting local businesses by marketing native spirits like lambanog, tuba, and rice wine.
By extending the portfolio and offering foreign labels, the supplier is addressing markets that want to buy premium or famous international liquor brands. This might even mean bringing in spirits from such countries associated with spirits as Scotland for scotch whisky or Mexico for tequila.
Producing Premium and Craft Products
More and more consumers are willing to spend extra for better and more distinct offerings which has fueled the trend towards premiumization in the liquor sector within the Philippines. Consumers who appreciate art and individuality can be wooed by venturing into these premium and craft segments.
There is a growing trend within the Filipino market for craft spirits, wines, and beers. Oftentimes, these products tend to have distinct flavors, are made in small volumes, and produce artistic quality appealing.
Selling premium and niche liquor products like aged whiskey, fine cognac, or even luxury gin is only targeting a small section of the market’s wealthy consumers. This segment is advantageous due to the nature of its positioning stressing elements such as quality, scarcity, and heritage.
Non-Alcoholic and Low-Alcohol Options
With health and wellness becoming ever more of a mainstream trend, the demand for non-alcoholic or low-alcohol drinks is also on the rise. By expanding the product range with the addition of such drinks, the health-conscious, designated drivers, or those who want a milder drink can be catered to.
They help the consumers to experience the flavors attributed to spirits and wines without necessarily the presence of alcohol. Such people can also be offered low-ABV beverages such as light beers or low-alcohol cocktails for people who like to drink but do not necessarily get drunk.
Specialty and Seasonal Products
The launch of limited period offerings, seasonal offerings, special products, or introducing such novelty, especially during certain seasons can help in creating excitement and encouraging purchase. This kind of diversification enables liquor suppliers to take advantage of public holidays, cultural participation, and any particular practice of people.
Offering seasonal flavors, like drinks for specific holidays, may appeal to customers who are interested in different experiences. Providing Filipino-style offerings purchased in off-seasons such as Christmas lambanog and fiesta specialty cocktails can increase revenues and brand recognition.
Considerations for Implementing Product Diversification
Understanding Consumer Preferences
It is critical to sketch a market for any potential new products before launching them. For instance, assessing what the consumers like and how much will they buy. Questionnaires, Even how relevant are the products to the market. Analysis of those trends can also determine which products are likely to work and which segment is not worth pursuing any further.
Regulatory Compliance
The alcohol industry in the Philippines is heavily restricted when it comes to the import, distribution, as well as the sale of alcoholic beverages. As liquor suppliers, one of their responsibilities is to make sure that any new product that is launched in the particular market adheres to all local requirements including licensing, labeling, and even taxation.
Supply Chain and Distribution
Product diversification could necessitate a change in supply chain management and distribution strategies. Suppliers of liquor must liaise with decent manufacturers, importers, and distributors to ensure that the presence of diversified products is always felt in the market.
Marketing and Promotion
To achieve success, the launching of new goods into the market requires a lot of marketing and promotion effort. The liquor suppliers need to create campaigns that communicate the distinct features of the various product offerings and use other methods to reach the target consumers. This may include in-store displays, advertisements, and events.
Brand Alignment
When broadening the scope of the product mix it is important to remain on image for the brand. Every additional product for that matter should also respect the values and the image of the brand as a whole. For example, when a spirit brand is famous for high-end products, it would not be wise to launch cheap spirits to avoid hurting its image.
Key Takeaway
For liquor suppliers in the Philippines, product diversification is a critical approach especially in response to the market variations, targeting new consumer segments and increasing profits. Suppliers can address new market challenges by widening the product categories, carrying both local and international brands, introducing premium and craft volumes, and embracing health trends, among others.
However, the challenge is that all these motives should properly be based on the target audience which calls for research, compliance with the law, and non-standard marketing focus so that the investments into diversification would not be wasted and would suit the brand’s philosophy.
