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Audit Campari

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Clémentine Zezioli

on 10 January 2013

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Transcript of Audit Campari

Evolution :
Rise of Spirit (Flavoured, whisky and vodka)Still light wine & ciderVolume:Beer Gruppo Campari Key fact 6th ranked groupe in beverage industry
Present in 190 country
3 products range : spirits, wine, and soft drinks
1st presence in US, Germany, Switzerland
Has 5 of the top 100 premium spirit (campari, camparisoda, SKYY vodka, Aperol, Wild Turkey ) Figures Total Net Sales 2011 € 1,274.2 million
9 months 2012 € 931.6 millions
Gross profit € 546.8 million Mission Unique
Fast growing
Highly profitable
Lifestyle brand Value Integrity
Performance orientation Vision Leader in the fast-growing and profitable spirits industry by combining a passion for brand building with business and functional excellence.
Combines both an approach to external growth through acquisitions and new distribution agreements and parallel organic growth Main competitors Competitors Source: IMPACT DATABANK Competitors Profile Competitors Market position  Strategies
Agressive acquisitions strategy
Focusing on emerging Market
Tends to manage the market from local offices
Eco-friendly trends Value Chain Analysis Core competencies Competitive advantage Coherence in portofolio range and image
Strong values
Well implemented in historical market for flagship brand brand maker
logistic and distribution External analysis : PESTEL Political Many restriction for sales – governments pressure
« Responsible Marketing Pact »
Prevention campaigns
High protection of under age
Pressure from association
=>Control mainly over prices, hour and places of distribution and advertisments
Relatively strong lobbying Economic Decrease of the purchasing power in Western countries ( decrease of on trade sales)
Strong growth in BRICS countries, incline to westerners lifestyle.
Premium products not affected by the crisis
Emerging market are maturing Sociological Healthier lifestyle
Associated with social process
At home consumption-More off trade
Rise of women alcohol consumption
General morosity
Strongly part of the culture - High loyalty sociological New technologies available in fabrication process
Strong R&D investment
Internet through Social Network offer new advertising support
« Anti hangover » medication Co2 emission during the fabrication process,
Use of fertilizer
Willing to change this methode for more eco-friendly ones Environmental PESTEL CONCLUSION Strong legal/regulatory barriers (legislation, advertising, image)
everyone is performing Implementation in the emerging countries (BRICs)
CSR: more eco-friendly process
Reinforce the loyalty and habits towards westernes lifestyle
Rise of the fruity and sweet flavored alcohol, such as flavoured vodka or cider,
feminisation and premiumisation of the consumption
Innovation and brand image in mature market
Local based distribution and education for emerging countries Focus on the market The alcoholic beverage industry : highly regulated,
Concentrated and innovative market
Pricing power industry & brand maker market
3 sectors: beer, spirit and wine.
process: producers ->wholesalers/distributors->point-of-sale operators (whether licensed or not) hotels and cafés
various strict alcohol policies on taxes, communication and consumption.
recognised as dangerous for the health“reduce the negative health and social consequences of harmful use of alcohol" 2005 Wordl Health Assembly. + 25% 2002 vs 2011 of thetotal consumption
6 litres / person older than 15
28% of total production made illegaly
Strongest growth : Beer : 20 million 9L in 2012 World wide consumption fact Operating
environnment Porter matrix External environment Russia Hostile demography: Expected loss of 4m people for 2016
60% of the spirit consumption is Vodka
70% of the wine consumption is local wines
High number of alcohol-related deaths => strong regulation in terms of advertising (transport, internet … )

Disposable income growing
On trade culture of youth increasing
rise of demand for Rum and Whiskies
=>Low pricing purchase ultra premium purchases UK High taxation : 57% price of an average bottle for wine and 82 %for spirits
Morose economy ( rising inflation, exports rely on the strength of the Euro)
Strong off-premise : Strong reaction to promotion
Vodka and Scotch category : 70% of volume in promotion
Cannibalisation of the premium toward the standard brands
Return growth of on-premise: 2014, with smaller bottle size
Wine sales +10% vs 2010 => premium brand ( unreliable, because of tax maximisation) 2004: specific tax for “alcopops”
2007 1st to forbid open bar : Germany
2010: UK forbid open bar, free drink for ladies night
2011: Medvenev wants to *4 taxes on vodka

strong prevention politics
strict advertising legislation
Limited selling time per week

Structure created:

 EU Alcohol and Health Forum-NGOs and economic operators.
Committee for national alcohol policy and action-national governments sharing information
Committee on data collection, indicators and definitions-key indicators( fight: no under age use, reduce death due to alcohol, reduce impact of families with alcoholics reduces mental and physical arms due to alcohol, provide information)

=>UE alcohol strategy end in 2012. Conclusion
market concentrated on 5 main actors, with wide range of products and usually based on innovation and quality.
Strong brand image is needed to attract customers ( choices made either on loyalty on prices)
Important growth in emerging countries, european lifestyle is fashionable.
Americas is a key drivers for spirits
difficulties with morose european market.
strict regulations in terms of advertising possibilities.
Newly use of Twitter
beer is the most sold, spirit has the strongest growth forecasted.
Rise, feminisation and premiumisation of consumption trends. Matrices History
Strong brand mission and values
Distribution facilities
World Wide implantation
Strong product brand portofolio
Key spirit in dynamic market
Key brands in local marketProduction site in strategic place
Marketing oriented strategy Strengths: Core market is Europe
Medium size portofolio in term of categories
Same range product
Restricted visibility of the Group, more based on brand visilibity. Weaknesses: Crisis in developed country
Growth in emerging economies
Rise of consumption
Rise of off-trade
Upgrading range consumption Opportunities Rise cost raw materialfall of day time consumption in bars
strong laws against alcohol advertisement Threaths South america Product International/local/regional
Spirits, Wines, Soda
Regional & international : Premium
Local : Based on historical back ground and culture.
Product line appropriate to the premiumisation strategy Place Strong local key market,
Distribution well settled (core competencies Price Value Price Strategy Example of developed and emerging country Promotion Relates to local laws
Goodies: drinks related objects, usb key…
Established communication tradition: Yearly calendar Market insights North America Europe Asia Pacifique Mix Evolution: spirit evolution
(especially for vodka)Wine
sparkling and still lightBeer
expansion(3millions in Volume) CSI Evolution:Spirit
(W, V, R, T)
Sparkling wine In over 180 other countries Gruppo Campari co-ordinates marketing anddistribution through Campari International S.A.M.
allows marketing strategies to be closely coordinated,
ensuring a consistent global image conveying the brands' strengths,
dynamism and prestige. Evolution : Rise of Spirit
(Flavoured, whisky and vodka)
Still light wine & ciderVolume:Beer
Best volume for vodka
Positive evolution for Beers Sparkling wine,Spirit :
W, V, R (1%) . Strong investments in our brands

• Pursuing premiumisation of our brand portfolio

• Reinforce positions in key local markets

• Strategic acquisitions & distribution agreements while maintaining a solid financial position

• Maintain a business mix that is well balanced in geographical and segment terms Key strategic
objectives unique market type Consumption per range good evolution
for all sectors
( best volume in
Beer and Whisky) consumption per category SWOT General:Younger consumer with high consumption : rise of off-trade Europe:
-low consumption off trade
-Feminisation : sweeter and colorful product
-Premiumisation: less quantity better quality
-Non-traditional spirits trend in Eastern Europe Eastern Europe:
Non-traditional spirits trend in Eastern Europe
strong consumption of vodka Asia Pacific:
- strong potential for Spirits whiskies
-great consumption of ultra premium wines- cultural use of Beers Africa:
-ultra premium spirits or low range
- great consumption of beer
- emergence of cider in South Africa GE BCG Americas:
north, a strong market
feminisation of consumption
bresil fast growing market a competitive environment Attractiveness of the market Develop worldwide, with local contacts

Stick to a strong identity,
values and brand image

Key acquisition of well known brands,
diversified brands

Focus on emerging market, women and youth

Shrink wine line (protect key products)

Get ride of some dogs product

Medium range purchase in emerging country ?
Beer ? Strategy Nine Months Results
Net Sales :
931,6 (organic growth 2,2%
(6% in America, 13% RoW GTR))
Favourable forex impact
EBITDA: 236.1
EBIT: 211.6 Performance Analysis
Key Performance Indicators source: Nielsen Product line Let's see ... High competition between the leading group
No real danger in terms of substitute
A strong range of regulation (taxation, time of sell, advertisment regulation, limited actions ) limiting distribution actions Porter analysis Portofolio analysis The company External analysis Brand acquisition Internal analysis the mix marketing How should they do? what they are doing Campari strategy Is the strategy in accordance
with the findings of our analysis? Strong investments in our brands
Pursuing premiumisation of our brand portfolio
Reinforce positions in key local markets
Strategic acquisitions & distribution agreements
maintaining a solid financial position
Maintain a business mix that is well balanced in geographical and segment term Menu : Strategy for Growth
Go/ reinforce position in the “ Emerging” countries” and transfer the core market:
Firm factors: international team, international brand, strong values, local B.
Industry factors: Abroad: market attractiveness, high competition => development and growth stage.
Local factors: Brics strong development.

Communicate on values
reinforce consumption trends
Invest in market with strong organic growth

Reinforce its position as an international competitors:
Acquisition of different products,
Communicate on brand spirit Increase sales Consolidate brands image in mature market: Reduce costs In mature market:
Review distribution agreement Where should they go? from 2008 untill now : Acquisition :Wild Turkey 2009, Lascelle de Mercado & co. Ltd 2012
Extension :South America: Brazil Asia Pacific (Australia/ China/ India)South Africa

Renegociation of distribution agreement How did they perform? There is no impact on the
Premium alcohols segment

The premiumisation trends still stands
Has generated a growth of the
retailers brands

Actions => Acquisition of new markets
in emerging country (to balanced the
fall in Europe and America) Crisis impact CSI :Fall of Spirit consumption what are our worth? South America :
growth in wine
(but good volume) Internal et external environements Europe :Still Wine and Beer
Italy and Germany
disturbed Thank you Julie Aujay Manon Laforet Clémentine Zezioli The product line
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