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Solene Fraioli

on 16 January 2013

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A presentation by João Santos & Solène Fraioli AGENDA Company overview Product line World Market
for Beer & Stout Stout beer market Stout Market (Sales Volume) Main Competitors: Advertisement Local adaptation of advertisement History of the company 1759 Creation
of a legend First export
England Opening
of Guinness Storehouse 2000 Guinness Draught in
Bottle launched 1999 1769 + = 1997 Creation
Diageo AFRICA UK & IRELAND 1988 Advanced technology
miniaturizes pub 1st overseas brewery in
Nigeria 1962 1929 First
advertisement Company
overview How would you explain the Guinness pricing strategy and the underlying assumptions about consumer behaviour when Diageo reports for 2005 that in the United Kingdom and Ireland the Guinness sales volume fell by 3 per cent, but a value growth of 4 per cent was achieved in both markets, mainly due to price increases? QUESTION #1
Mask results of volume decline
Increased margin by reducing marketing
costs and increased prices

Large market share
No real competitor
Introduction of new products (extend PLC)

Distinctive product
Greater perceived quality of products
Consumers less aware of substitutes Skimming Strategy used: Factors that allowed pricing strategy: Price sensitivity reduced (Nagle): QUESTION #2 Motivated by the success of this pricing strategy, should Diageo continue to increase the price of Guinness? Guinness should not continue increasing the price of its products Changing profile of beer consumer:
Bars, pubs retailers
Domestic beers less expensive foreign brands
Older consumers younger consumers
Beers Spirits Loyal consumers may feel betrayed

Possible loss of market share in the long run Company overview History of the company Questions Answers Product line World Market for Beer & Stout How can the iconic Irish beer brand compensate for declining sales in the home market ? QUESTION #3 What elements of the Guinness international marketing strategy would you focus on in order to increase both global sales volume, value and profits? QUESTION #4 P
N Continue to form partnerships with local breweries in countries where Guinness has a low market share

Develop Irish-theme pub : trendy place to attract new customers, especially in big european cities Guinness should avoid price increases to appeal younger customers and make them purchase the product Continue to make creative advertisements

With a focus on brand loyalty

And try to appeal to a newer audience :
-Young people : social media, advertisements on Youtube, sponsorship of student events in universities, sponsorship in music festivals & sport events

-Women : Attract them with more contemporary, ligher and cleaner Irish-pub, Guinness better than lagers

Continue to invest in development and promotion of off-trade products to recreate the ‘pub experience’ in consumers’ own homes

ex : Guinness pack : Beers + Guinness Surger + a little book with the main facts about Guinness, The Guinness Good Food Cookbook or small Guinness Book

Limited editions for Christmas, St Patrick's Day - Brewhouse Series with packaging designed by artists In Choueke (2006) an anonymous beer retail buyer comments on Guinness’ decreasing sales volume:

“Guinness has an older profile of drinker and with an ever-increasing availability of continental lagers and a fast growing range of alcopops, the younger generation of drinkers simply haven’t bought into it. Innovation – widgets and gadgets – will keep the brand alive for a while but where else can Diageo go? Flavored Guinness? No thanks. It is in decline and Diageo’s best minds can’t do much about it. The brand may have only a couple decades worth of life in it and I would milk it for everything before getting rid of it and concentrating on spirits.”

Dou you agree with this statement? Explain your reasons. NO, Guinness can last because it is ... 250 years of brewing experience, a strong and unique character in terms of tatste and aesthetics. Brand image associated with values of strenght, patience, and well-being. National symbol of Ireland which generates tourism An iconic brand : In a powerful group : older profile, poor level of new adopters ==> need for a broader focus- men and women AND make the young discover the pleasure of a real alcoholic experience Various resources : finance, publicans, people... able to launch innovations : Product line extensions and to make efficient and large advertising campaigns, sponsorship etc
In order to extend the scope of its drinker profile : THANKS FOR YOUR ATTENTION ANY QUESTIONS ?
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