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Reputation – A Critical Driver of Business Value, by Ian Wright MPRCA, Corporate Relations Director, Diageo

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Reputation – A Critical Driver of Business Value, by Ian Wright MPRCA, Corporate Relations Director, Diageo

  1. 1. Selling the world’s best known brands in 180 markets WORLD CLASS MARKETING
  2. 2. 25,000talented employees in around 80countries Over £10bnturnover Over £1bnoperating profit Diageo invests over £1.5bn in marketing and promotion each year 42%of business in fastest growing markets – accounting for 21%of operating profit growth 50%of net sales in fast growing markets expected from 2015
  3. 3. 1986 Distillers Company Limited taken over by Guinness and renamed United Distillers 1884 James Buchanan establishes his business 1877 DCL established by John Haig of Cameronbridge distillery and others 1871 James & Samuel Greenlees, of Old Parr, establish their business 1863 William Sanderson, creator of Vat 69 establishes his business 1825 Thomas Sandeman starts trading & Arthur Bell joins business in 1845 1820 John Walker opens for business 1749 Justerini & Brooks founded 1627 Haig family start distilling 1890 White Horse trademark registered 1997 Diageo formed 2001 Seagram aquisition
  4. 4. Trust in Business Trust in Business Leaders to tell the truth 50% 18% Global -32
  5. 5. …loss of trust is the new media narrative
  6. 6. EU calling for greater corporate accountability Top companies in India must spend 2% of profit on CSR RSA requires firms to have Social & Ethics Committees China is toughening environmental legislation Elsewhere sustainable reporting requirements are in place MNCs to protect human rights along whole supply chain
  7. 7. 66% consumers expect brands to be sustainable* 46% consumers are prepared to pay a premium for brands seen as sustainable* Expectations are particularly strong among millennials and consumers in high growth markets** *Source: ACNielsen 2012 ** Futures Group 2013 CONSUMERS: CUSTOMERS: Walmart to disclose sustainability scores on shelf labels for 70% of products Safeway wine suppliers rejected on environmental grounds Sainsbury’s and Marks & Spencer to reduce abv of alcohol products and increase fair trade sales
  8. 8. Reputation Trackers 2012 Ireland: 4.2 GB: 4.1 Scotland: 4.4 marked / 5 scores > 3 +ve Diageo Hellas Platinum CSR award (90% + score) Ranked 2nd in food and beverage, scored 4.8/5 • Ireland & Nigeria No. 1 • Portugal 3rd • Mexico 4th • Germany & Venezuela 7th • Greece top ten
  9. 9. CELEBRATING LIFE EVERYDAY EVERYWHERE
  10. 10. To create the best performing, most trusted and respected consumer company in the world
  11. 11. To transform our reputation in every market
  12. 12. Ambition: To create the best performing, most trusted and respected consumer company in the world WHAT WE WILL ACHIEVE FOCUS AREA Transform reputation in every market KEY PRIORITIES Build Brand Diageo Broaden accountability to 21 GMs + teams Lead on Alcohol in Society Other S&R standards and programmes Win the War for Talent KEY ENABLERS Build and Measure Accountability and Capability Equity + Price + Share growth in every priority brand market unit Annual operating margin expansion across every activity Transformed reputation in every market through enduring stakeholder partnerships and exemplary conduct Super-engaged people everywhere
  13. 13. LEADERSHIP ALCOHOL IN SOCIETY Advocacy | Enduring partnerships | Ambitious global targets CRITICAL BUSINESS FOUNDATION People, Parity and Sustainable Sourcing: Health and safety, health and wellness, human rights, diversity, fair wages, fair tax, carbon, waste, packaging, water, local investment, sustainable agriculture. Underpinned by core values, ethics, exemplary conduct, governance and compliance. SKILLS & EMPOWERMENT • Total supply chain approach • Focus on customers and farmers • Apply gender lens • Partnership approach • Demonstrate strong ROI WATER STEWARDSHIP • We care about water • Specific interventions in challenged markets or crisis situations • Advocacy and partnership approach BEST PRACTICE PROGRAMMES
  14. 14. • Investors • Employees • Government and NGOs • Commercial Partners (Customers, Suppliers, Partners…) • Community and Special Interest Groups • Media • Consumers of our brands
  15. 15. US SPIRITS AND WINE OPEN STATES NAM US SPIRITS AND WINE CONTROL STATES DIAGEO GUINNESS USA (DGUSA) CANADA VENEZUELA COLOMBIA ANDEAN FREE TRADE ZONE WEST LAC MEXICO BRAZIL PUB URUGUAY PARAGUAY GB WESTERN EUROPE GERMANY IBERIA IRELAND ITALY BENELUX NORDICS GREECE MHD RUSSIA POLAND RUSSIA & E EE PARTNER MARKETS KENYA EAST AFRICA RWANDA BURUNDI SOUTH SUDAN TANZANIA UGANDA GHANA AFRICA REGIONAL MARKETS DISA CAMEROON HUB CHINA GREATER CHINA AUSTRALASIA HONG KONG TAIWAN VIETNAM THAILAND SOUTH EAST ASIA INDONESIA KOREA JAPAN NORTH ASIA PHILIPPINES MALAYSIA ETHIOPIA NIGERIA SOUTH AFRICA GTME INDIA TURKEY ESTABLISHED MARKETS EMERGING MARKETS STRONG REPUTATION CRITICAL OPPORTUNITY RESERVE DGCE WINES JAMAICA SOUTH LAC CENTRAL KEY CENTRAL VENTURE SINGAPORE
  16. 16. Lack of economic growth and unemployment Increasing competition for raw materials and need for sustainable supply chain Alcohol-related health issues Regulation and taxation of alcohol Changing consumer consumption patterns Increasing competition concentration of businesses
  17. 17. SETS A COMPELLING VISION SEE RESPONSIBILITY AND SUSTAINABILITY AND CENTRAL TO A HEALTHY BUSINESS STRONG INFLUENCING & NETWORKING SKILLS RADAR FOR FORESIGHT/ RISK AND INSIGHT GREAT STORY TELLERS UNDERSTAND SOCIAL MEDIA AGENDA & REAL TIME COMMUNICATIONS COALITION BUILDERs AND GOOD NEGOTIATORs ACCOUNTABLE ON TOP OF THE NEWS AGENDA CONSISTENTLY SETS AND ARTICULATES A COMPELLING VISION RADAR FOR RISK AND INSIGHT
  18. 18. Keymodules ESSENTIALS OF REPUTATION MANAGEMENT MESSAGING & NARRATIVE INTERNAL LEADERSHIP THE WAR FOR TALENT CSR & SUSTAINABILITY ALCOHOL & SOCIETY PUBLIC POLICY & COALITION- BUILDING ENGAGING EXPERTS & SEEKING ENDORSEMENT LIVING & LEADING DIAGEO’S VALUES BUILDING BRAND DIAGEO Live!Challenges SALES AND MARKETING FREEDOMS A NEW TAX NEW PRODUCT INNOVATION DEEP DISCOUNTING Attendees 21 General Managers Local management teams Local Corporate Relations teams (induction) What? The Diageo Reputation Master Class FACTORY OPENING/ CLOSING PRODUCT RECALL
  19. 19. US SPIRITS AND WINE OPEN STATES US SPIRITS AND WINE CONTROL STATES DIAGEO GUINNESS USA (DGUSA) CANADA VENEZUELA COLOMBIA FREE TRADE ZONE MEXICO BRAZIL URUGUAY PARAGUAY GB GERMANY IBERIA IRELAND ITALY BENELUX NORDICS GREECE MHD RUSSIA POLAND PARTNER MARKETS KENYA RWANDA BURUNDI SOUTH SUDAN TANZANIA UGANDA GHANA DISA CAMEROON HUB CHINA AUSTRALASIA HONG KONG TAIWAN VIETNAM THAILAND INDONESIA KOREA JAPAN PHILIPPINES MALAYSIA ETHIOPIA NIGERIA SOUTH AFRICA GTME INDIA TURKEY ESTABLISHED MARKETS EMERGING MARKETS STRONG REPUTATION CRITICAL OPPORTUNITY RESERVE DGCE WINES JAMAICA SOUTH LAC CENTRAL KEY CENTRAL VENTURE SINGAPORE 1. NAM 2. WE 3. Russia & E EE 4. Greater China & NA 5. SE Asia 6. SA & Africa regional 8. East Africa 9. WLAT & MEXICO10. PUB & ANDEAN 7. GTME, IN, AUS Ten, 2-day regional Master Class sessions will immerse 80+ Diageo leaders in reputation capability
  20. 20. Diageo reputation attributes and local market attributes to be defined
  21. 21. Behavioural intentions & trust Materiality, Foresight Competitor benchmark Source rankingReputation metrics Engagement preferences Media monitoring and message output tracking Integrated with Values Survey TAG and other stakeholder feedback mechanisms 1. Roll out Diageo global reputation tracker model 2. 2013 benchmark study in 21 markets supply and demand 3. Representative sample of respondents agreed per market across our main stakeholder groups – qualitative and quantitative approach, interviews and online 4. Integrate existing key research 5. Develop functional and leadership performance scorecards 6. Performance tracking and incentives – development towards achieving our 2017 reputation and business goals 7. Tailor research to individual market needs 8. Comprehensive research every 2 years and deep dives and pulse survey every other year
  22. 22. Brand Diageo 21 GMs as CEOs Lead on Alcohol in Society Water of Life Learning for Life The world’s most trusted and respected consumer company Reputation management embedded across our business Diageo and our industry are trusted partners in the alcohol debate We care about the safety and quality of life of people and communities… …and we empower them to celebrate life every day, everywhere Trust (Tax) We are trusted to lead by the spirit as well as the letter of the law
  23. 23. Reputation is becoming a critical business driver Reputation strategies are more robust and thoughtful Leadership expect-ations are increasing Leadership engagement is increasing Leadership reputation capability is required Leadership account-ability is increasing - KPIs & scorecards
  24. 24. Reputation capability Reputation Forecasting Reputation Tracking and Insights Reputation Workshops Functional Planning Conversations Changing infrastructure and skillsets Changing ways of working Resource where needed Big bets from the centre Delivered for leaders Delivered for functions Cascading and impact Comprehensive & tailored

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