Management 478 Presentation


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Mgmt 478 - Strategic Management. Group project.

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  • Alyssa
  • Alyssa What the problem is, what the solution is Slide showing who we are (what are brands are) – these are the 15 key brands Just to remind you of our company, these are our 15 key brands Absolut is an important brand that was recently acquired by Pernod Ricard, but since we have 15 other key brands that are displayed here, we wanted you all to get in the mindset of what our company is about by giving you a sampling of our brands. Show video We hope you enjoyed that samply of our products. We have analyzed the history and strategy of Pernod Ricard, their key brands, and growth. We have identified a key issue as Pernod Ricard faces a threatening economical environment.
  • Alyssa Today we are going to talk to you about the company and their history. We will then discuss the key problem facing the company, and finally we will address our recommended strategy for growth (recovery) Before we start, we would like to briefly state the problem facing Pernod, and our strategy to overcome it.
  • Alyssa Our strategy for change is to focus on depth rather than breadth as we have in the past.
  • Alyssa Historically Pernod Ricard has focused on growth through acquisitions of external brands rather than developing their existing brands. As a new co-leader in the industry we see this as an issue as we go head to head with Diageo (INSERT SLIDE OF DIAGEOS BRANDS).
  • Mat French Company – US subsidiary Pernod Ricard is a large company with 19,000 employees in 70 countries. Something else? I don’t know... In 1975 Pernod Ricard was formed through the merger of the Pernod and Ricard companies, two of France's largest suppliers and distributors of aniseed beverages. Frequent acquisitions include: Austin Nichols (Wild Turkey), Irish Distillers (Jameson), Orlando Wyndham (Jacob’s Creek), 39.1% of the Seagram distilled Spirits and Wine, Allied Domecq (Malibu and Kahlua), and Vin & Spirit (Absolut) (list all of these?) How many acquisitions have there been?
  • Mat We have a 2 part problem including recovering premium paid for our recent acquisition and our strategy for growth. Pernod Ricard was previously the 4 th largest wine and spirits group in the U.S. but with the purchase of Absolut we are tied for 1 st We also have more of the world’s top brands than Diageo, as we have 19 and they have 18 A focus on growth of brands was appropriate previously, but now we need to pay attention to brand awareness and developing the products we have
  • Mat Increase awareness of our key brands and, in turn, increase market share Recover the premium paid for absolut (how does that fit with the above?)
  • Mat State of the industry – alcohol sales stay high during a recession (benefit), (disadvantage) but Pernod sales have slipped because of their placement among competition, if you look at alcohol with 4 tiers with the lowest being low quality and low price and the top being high quality and expensive, Pernod is the 3 rd tier and many of their consumers have started purchasing 2 nd tier products to save money so are sales have suffered during the global recession (disadvantage) Right before the recession we paid a premium for absolute (how much?), then the recession hit and absolute sales dropped, this is a key component of our problem as we need to recover the money spent on purchasing absolute. By increasing awareness of our brands we can do so without spending money on additional acquisitions. Pernod Ricard is in a threatened environment and needs to focus on maintaining and increasing sales of key brands in order to remain the co-leader
  • Brant
  • Brant Limited edition packaging has been successful in the past and appeals to our target market. We will consider these techniques in the future Does not contradict our sustainability initiative because they are collected and we use sustainable methods of production using minimal toxicity dyes, biodegradable and recycled fibers Increase POP sales Include examples Past: Examples.... Future: Limited edition Earth Day bottle 2 part series: Make your own ship-in-a-bottle Letter in a bottle
  • Brant SUSTAINABILITY “ Green movement” is an important trend Consumers are becoming more conscious of environment impacts A large focus for PR is sustainability, a decent portion of the web site is dedicated to their environmentally friendly processes and internal Green Movement is an important trend and our consumers are specifically susceptible as they are a market who follows trends and likes the newest “hottest” thing Consumer are becoming more aware of environmental impact and advertising the sustainable initiatives we already have in place will create a positive association with our brand to consumers We are not using much additional material, ink is already used. We will use additional ink for a sustainability seal, but this will be contrasted by donated __% of sales to an environmental organization such as STATE ORGANIZATION (each one will plant a tree?) Additional money spent on donating and sustainability advertising will be evened out through the minimal investment required for other methods such as guerrilla marketing
  • Brant SUSTAINABILITY “ Green movement” is an important trend Consumers are becoming more conscious of environment impacts
  • Danielle The next marketing technique we will be using is family branding. The packaging and sustainability marketing will increase awareness of specific brands and increase POP sales, but family branding will increase awareness of our company as a whole and encourage purchasing multiple Pernod brands. If one of our customers who normally drinks Malibu is having a party, when she goes to the liquor store we want her impulse to be purchasing other Pernod brands such as Absolut, Kalhua, Jameson, and Beefeaters. We will do this by creating characters for each of our key brands that either associate with the beverage or the consumer who typically drinks it. This has been successful for some of our competitors such as Captain Morgan. But we will than take the characters and incorporate them as a family. We will advertise the family through commercials and print ads that display several of the brands or their characters. We will also have an internactive website that will allow consumers to tour the Pernod Ricard home. On the website they will be able to tour each of the brands’ rooms. This will increase awareness of the company overall and also increase multiple brand purchases.
  • Danielle We are also going to use guerrilla marketing to attract and maintain customers. Here we have some examples of guerrilla marketing campaigns. Guerrilla marketing is basically any type of non-traditional marketing. It is often less expensive than normal advertisement, but this is not always the case.
  • Danielle Guerrilla marketing makes sense for Pernod Ricard because it appeals to creative customers who are sensitive to trends and pop culture. This is the target market of Pernod Ricard. As you can see in the traditional ad in the center of the new Absolut campaing featuring Kate Beckingsale, and through the non-traditonal Ballentine bottle on the left. This is a bottle that not sold in retail but is currently being distributed to clubs throughout Europe to increase awareness of their brand. The bottle features an equalizer that moves to the beat of the music. As you can see through this ads, non-traditional creative advertising fits the Pernod Ricard brand, and that is an attribute that will be carried through in Guerrilla marketing.,
  • Danielle Our guerrilla marketing will take place in large cities Such as Manhattan, Los Angeles, Chicago Some of the things we will do include wrapping a large fountain outside of an event such as fashion week in New York to look like a bottle of Absolut Handing out bottle sweaters, while people wait in line at clubs, Having taste test of Pernod Ricard brands versus competitors, And hanging cut-outs of Pernod Ricard bottles from trees to promote our sustainability initiative
  • Danielle Here we have the time line of our role out. 1 – Sustainability, continue packaging, family 2 – guerrilla (after sustainability and family established) 3 - continue 4 – sponsorships (fashion week, celebrity parties
  • Kaleb I didn’t include everything from the outline so refer to it when you plan what to say What it is going to take to do it Financial input Advertising expense is $0.14 on the dollar Profit is $0.18 on the dollar We will increase spending on advertising over 5 years by $296 million to increase net sales 5%, which equates to $2.1 billion. This is realistic because with the purchase of absolute they increased $1.3 billion and the year previously they increased $600 million These figures are based 2009 sales figures and will be re-evaluated annually to maintain our growth goal This will increase profit by $390 million This will not break down evenly over the 5 years because some of our marketing techniques, such as guerilla marketing, are less expensive than other techniques while still increasing sales significantly. We will likely spend more than 1/5 th of this during the first year to start our new campaigns strong Access to fountains and stuff?
  • Kaleb – this part will be yours so we will let you put in key points you want to address
  • Kaleb
  • Management 478 Presentation

    1. 1. Team Members Alyssa Bergman Brant Bumgarner Danielle Sponder Kaleb Boyer Mat Gross
    2. 2. INTRODUCTION 15 Key Brands
    3. 3. <ul><li>Part 1: Brief History </li></ul><ul><li>Part 2: Problem, Goal, Conditions </li></ul><ul><li>Part 3: Strategy and Evaluation </li></ul>AGENDA
    4. 4. INTRODUCTION Goal: Develop depth rather than focusing on breadth Outcome: Increase market share and consumer awareness
    5. 5. INTRODUCTION Co-Leader in Wine & Spirits KEY BRANDS Smirnoff, Ciroc, Guinness, Ketel One, Captain Morgan, Jose Cuervo, Crown Royal, Hennessy, Dom Perignon, Tanqueray, Baileys, Goldschlager
    6. 6. BRIEF HISTORY <ul><li>French Company with U.S. Subsidiary </li></ul><ul><li>Formed in 1975 through merger of Pernod and Ricard </li></ul><ul><li>Large company with 19,000 employes </li></ul><ul><li>In 70 countries </li></ul><ul><li>Frequent acquisitions including: </li></ul><ul><ul><li>Austin Nichols Wild Turkey, Jameson, Jacob’s Creek, Seagram, Malibu, Kahlua, Absolut </li></ul></ul>
    7. 7. PROBLEM <ul><li>Price paid for Absolut </li></ul><ul><ul><li>Absolut is the top premium vodka worldwide based on volume </li></ul></ul><ul><ul><li>Paid premium of $8.34 billion </li></ul></ul><ul><ul><li>Sales slipped immediately after acquisition due to economic slump </li></ul></ul><ul><li>Strategy has focused on expanding breadth of brands, need to focus on awareness of key brands </li></ul>
    8. 8. SOLUTION <ul><li>Will increase awareness of our key brands </li></ul><ul><li>Position us as the industry leader </li></ul>In order to recover the premium paid for Absolut and increase awareness of our key brands, our goal is to increase market share 5% over 5 years.
    9. 9. CONDITIONS <ul><li>Alcohol industry thought to be recession proof, but sales declined with the current recession </li></ul><ul><li>Absolut sales slipped significantly as consumers switched to cheaper vodka brands </li></ul><ul><li>4 tiers of alcohol industry </li></ul><ul><ul><li>Low price, low quality (Ex: Hawkeye vodka) </li></ul></ul><ul><ul><li>Mid price, mid quality (Ex: Smirnoff) </li></ul></ul><ul><ul><li>Upper-mid price, high quality (Ex: Absolut) </li></ul></ul><ul><ul><li>Premium price, premium quality (Ex: Grey Goose) </li></ul></ul>
    10. 10. STRATEGY <ul><li>What didn’t work: </li></ul><ul><ul><li>Improving efficiency of production </li></ul></ul><ul><ul><li>Reducing logistical costs </li></ul></ul><ul><ul><li>The industry is already efficient in these manners </li></ul></ul><ul><li>What will work: </li></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><ul><li>Creative packaging </li></ul></ul></ul><ul><ul><ul><li>Sustainability </li></ul></ul></ul><ul><ul><ul><li>Family branding </li></ul></ul></ul><ul><ul><ul><li>Guerrilla marketing </li></ul></ul></ul>
    11. 11. CREATIVE PACKAGING <ul><li>Limited Edition packaging has been very successful </li></ul><ul><li>Collectables </li></ul><ul><li>Encourages point-of-purchase sales by new customers and repeat purchasing by collectors </li></ul>
    12. 12. SUSTAINABILITY <ul><li>Why? </li></ul><ul><ul><li>Company already has focus on sustainability </li></ul></ul><ul><ul><li>A growing trend with consumers </li></ul></ul><ul><ul><li>Growing awareness of environmental impact </li></ul></ul><ul><ul><li>Our market is specifically susceptible to new trends </li></ul></ul><ul><li>How? </li></ul><ul><ul><li>Redirection of materials, no additional waste </li></ul></ul><ul><ul><li>Tie in with advertising and creative packaging </li></ul></ul>
    13. 13. SUSTAINABILITY <ul><li>How (continued)? </li></ul><ul><ul><li>Bottle alteration </li></ul></ul><ul><ul><ul><li>Earth Day packaging for month of April </li></ul></ul></ul><ul><ul><ul><li>New bottle and biodegradable bag – plant it to grow flowers </li></ul></ul></ul><ul><ul><li>Include sustainability logo on top 15 brands </li></ul></ul>
    14. 14. FAMILY BRANDING <ul><li>Why? </li></ul><ul><ul><li>Increase consumer awareness of Pernod Ricard and key brands </li></ul></ul><ul><li>How? </li></ul><ul><ul><li>Advertise 15 key brands as a family </li></ul></ul><ul><ul><li>Give each brand its own character </li></ul></ul><ul><ul><ul><li>Use for commercials and print advertisements </li></ul></ul></ul><ul><ul><li>Pernod Ricard house online </li></ul></ul><ul><ul><ul><li>Tour each brands’ room </li></ul></ul></ul>
    15. 15. GUERRILLA MARKETING <ul><li>What is guerrilla marketing? </li></ul>
    16. 16. GUERRILLA MARKETING Pop Culture: Trend Forward Marketing
    17. 17. GUERRILLA MARKETING <ul><li>Why? </li></ul><ul><ul><li>Increase customer base </li></ul></ul><ul><ul><li>Discern Pernod Ricard as trendy </li></ul></ul><ul><li>Where? </li></ul><ul><ul><li>Large cities such as Manhattan, Chicago, Los Angeles, Boston </li></ul></ul><ul><li>How? </li></ul><ul><ul><li>Fountain wrapped as a bottle </li></ul></ul><ul><ul><li>Give out bottle sweaters at night clubs </li></ul></ul><ul><ul><li>Taste tests at sponsored events </li></ul></ul><ul><ul><li>Growing green alcohol in trees </li></ul></ul>
    18. 18. TIMELINE <ul><li>First year </li></ul><ul><ul><li>Introduce Earth Day marketing, creative packaging and family branding </li></ul></ul><ul><li>Second year </li></ul><ul><ul><li>Introduce guerrilla marketing </li></ul></ul><ul><li>Third year </li></ul><ul><ul><li>Continue four marketing techniques discussed </li></ul></ul><ul><li>Fourth year </li></ul><ul><ul><li>Start large sponsorships to reach more people than our targeted campaigns </li></ul></ul><ul><li>Fifth year </li></ul><ul><ul><li>Continue strategies </li></ul></ul>
    19. 19. RESOURCES <ul><li>Financial Input </li></ul><ul><ul><li>Advertising expense: $0.14 on the dollar </li></ul></ul><ul><ul><li>Profit:$0.18 on the dollar </li></ul></ul><ul><ul><li>Increase spending on advertising by $296 million over 5 years </li></ul></ul><ul><ul><ul><li>Increases net sales 5% (equal to $2.1 billion) </li></ul></ul></ul><ul><ul><ul><li>Re-evaluate annually, expense may change as net sales change </li></ul></ul></ul><ul><ul><li>This will increase profit by $390 million </li></ul></ul><ul><ul><li>Marketing expenses will not be even year to year </li></ul></ul><ul><ul><ul><li>Different methods require different expense </li></ul></ul></ul>
    20. 20. CONCLUSION <ul><li>Evaluation </li></ul><ul><ul><li>Market share growth </li></ul></ul><ul><ul><li>Increased profits </li></ul></ul><ul><ul><li>Problem: Focus on growth through acquisitions of external brands rather than developing existing brands </li></ul></ul><ul><li>Solution: Refocus marketing strategy and grow market share </li></ul><ul><li>Strategy: Marketing plan </li></ul><ul><ul><li>Creative packaging </li></ul></ul><ul><ul><li>Sustainability </li></ul></ul><ul><ul><li>Family branding </li></ul></ul><ul><ul><li>Guerrilla marketing </li></ul></ul>
    21. 21. QUESTIONS?