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International Marketing CourseA.Y. 2012/13 Professors: Cantone & HollensenGuinness Case StudyGroup 1Carotenuto MarcoCasale...
AgendaPART 1:• Beer market: an overview• Guinness think globally, act locally• Focus on Nigeria marketPART 2 :• Case quest...
GUINNESS History: time lineInIreland, Arthur Guinnesscreated oneof the mostimportantBeer of theworld17591769The firstexpor...
Beer & Stout market: an overview1%99%Stout market is only 1% ofbeer marketStout volume sales (million litres)Lagers volume...
Porter 5 forces model : which are the main forces that determine theintensity of rivalry in beer industry.Source: Porter, ...
Guinness Stout Market Share all over the worldWesternEurope:80%EasternEurope:12%NorthAmerica:86%LatinAmerica:5%AsiaPacific...
Firm Strategy, structureand rivalryRelating and supportingindustriesGovernmentDemandconditionsFactorconditionsChanceAfrica...
International market screnning process to produce in Nigeria1820Asia AustraliaRegional Macroscreening:• Market size.• Stou...
Source: Our adaptation from Diageo.com and Hollensen, S. (2012).Legend: Upstream DownstreamStrategic Alliances withFosters...
How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductA...
How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductA...
How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductA...
How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductA...
How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductA...
Social media Communication“One of the most important strategicconsideration is whether to standardizeworldwide or to adapt...
US Guinness social communication on FacebookUS Guinness target: 25-34 years oldDay of max popularity: March 10thWHY?St. Pa...
What are the differences ?Nigeria commercial US CommercialInternational Marketing Course A.Y. 2012/13 Professors: Cantone/...
Product/communication modeProductStandard Adapt NewSTRAIGHTEXTENSIONPRODUCTADAPTATIONPROMOTIONADAPTATIONDUALADAPTATIONProm...
Case questions1. How would you explain the Guinness pricingstrategy and the underlying assumptions aboutconsumer behaviour...
STRENGTHS WEAKNESSESinternalexternalTHREATS OPPORTUNITIES• market knowledge• brand image and brand awareness• quality and ...
Guinness pricing strategy• Guinness is sold with premium price because it gives to its consumersmore than a product, it de...
Rigidity of Guinness demandεp = -0,43QUANTITYPRICEp = + 7%q = - 3%International Marketing Course A.Y. 2012/13 Professors: ...
Consumer BrandresonanceBrandImageryBrandPerformanceBrand salienceSource: Keller K.L. , 2008Consumer Brandresonance:-loyal ...
3. In Choueke (2006), an anonymous beer retailer buyer commentson Guinness’ decreasing sales volume: “Guinness has an olde...
INTRODUCTION GROWTH MATURITY DECLINE RE-CYCLESALESSTAGE OF THE PRODUCT LIFE CYCLEProduct life cycle:Guinness strategic mar...
ENACTED: focus on what itmeans rather than what it can doFUNCTIONAL: focus on what it cando rather than what it meansREIFI...
How to revitalize the brand?• CO-BRANDING :Limited edition collection +• SPONSORSHIP :International Guinnesspoker tour• “G...
The 6C model of social media:“Guinness Mix&Match App”Company ContentPUSHControlCommunityCustomersPUSHPULL Conversationsonl...
Sources:• Hollensen, S., (2012), Essentials of Global Marketing, UK, PearsonEducation.• Keller, K.L. (2008), Strategic Bra...
Thank for your attentionInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
Guinnes Case Study
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Guinnes Case Study

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Guinnes Case Study

  1. 1. International Marketing CourseA.Y. 2012/13 Professors: Cantone & HollensenGuinness Case StudyGroup 1Carotenuto MarcoCasale DarioCascarino SalvioD’Ambrosio GennaroSangiovanni AndreaSorrentino Maria LauraN27/1145N27/1307N27/1157N27/1484N27/1133N27/1181International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  2. 2. AgendaPART 1:• Beer market: an overview• Guinness think globally, act locally• Focus on Nigeria marketPART 2 :• Case questionsInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  3. 3. GUINNESS History: time lineInIreland, Arthur Guinnesscreated oneof the mostimportantBeer of theworld17591769The firstexportshipment ofGUINNESSto England.Shipments ofGUINNESS toGuernsey, Barbados, Trinidad. 18201840Shipment ofGUINNESS toNew York.50% of allGUINNESSsold in U.S.A.is now bottledlocally andtotal foreignsales reach100.000.19141949Guinnessstarts toimport inNigeriaGUINNESS isexported inGhana, Nigeria,Malaysia,Indonesia.1959 – 731985GUINNESSnow sold in120Countriesand brewedin 25.Diageois formed.19972008Guinness ison FBInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  4. 4. Beer & Stout market: an overview1%99%Stout market is only 1% ofbeer marketStout volume sales (million litres)Lagers volume sales (million litres)Guinness(Diageo)60%Murphys/Legend(Heineken)8%Zywiec Porter(Heineken)2%Beamish(Heineken)3%Castle MilkStout (SABMiller)12%Others15%Stout market: who is the leader?International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  5. 5. Porter 5 forces model : which are the main forces that determine theintensity of rivalry in beer industry.Source: Porter, M.E. (2004)Meal occasion(indoor&outdoor):WineAmusement occasion(outdoor): cocktails, spirits,Happy hour: analcoholicThreat of Substituteproducts or servicesBargaining powerof buyersRivalry amongExisting competitorsBargaining powerof supplierThreat of New EntrantsOn trade: pub&bar havelow bargaining powerOff trade:Retailers have highbargaining powerCR4 in 2010 =46%(AbinBev, Sab Miller,Heineken, Carlsberg)International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  6. 6. Guinness Stout Market Share all over the worldWesternEurope:80%EasternEurope:12%NorthAmerica:86%LatinAmerica:5%AsiaPacific:64%Australiaand Asia:66%Africa:45%International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  7. 7. Firm Strategy, structureand rivalryRelating and supportingindustriesGovernmentDemandconditionsFactorconditionsChanceAfrica is the first Region interms of stout volume sales(720 million).Guinness has 45% marketshare in this market, thismeans 324 million litressold in this area.For Guinness is the secondmarket after WesternEurope (510 million litres).Why Africa is so importantfor Guinness, what werethe conditions that helpedGuinness to build hissuccess?Focus on Africa The Porter DiamondDemand Condition:• Africans are beerdrinkers since 1820s.• 7,2% of beer market isstout (vs. 1% in world)• Market sizeRelated supportingindustries:• Strong presence of rowmaterial producers andexporter.Factor Condition:• The basic rawmaterialsmaize, sorghummalt, hops and watersourced locally.• Low cost employees.International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  8. 8. International market screnning process to produce in Nigeria1820Asia AustraliaRegional Macroscreening:• Market size.• Stout Beerculture.AfricaEasternAfricaWesternAfricaNorthenAfricaCentralAfrica1962 Angola Nigeria Congo SenegalPreliminaryscreening:• Raw materialavailability.Specific market criteria:• Most populatedcountry.• 50% christianpopulation.• Relatively politics calmafter 1960 , comparedother countries.Kano;KadunaLagos ;Benincity abaIbadanSpecific city/area criteria:• Overlooking the ocean.• Most cosmopolitan city.• Low degree of tribalculture.• Good industrial area.International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  9. 9. Source: Our adaptation from Diageo.com and Hollensen, S. (2012).Legend: Upstream DownstreamStrategic Alliances withFosters for productionStrategic AlliancesWith SapporoStrategic Alliancewith RetailersContractmanufacturing (i.e.East AfricanBreweries for Kenya)Hierarchical modewith sales andproductionsubsidiary (Nigeria)Guinness: Think globallySource: Ouradaptationfrom:Guinness.com
  10. 10. How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductAustraliaandAsiaU.S.Guinness Draught & Guinness Draught Extra ColdGuinness extra stoutMalta GuinnessGuinness Foreign ExtrastoutInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  11. 11. How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductAustraliaandAsiaU.S.Guinness Draught & Guinness Draught Extra ColdGuinness extra stoutMalta GuinnessGuinness Foreign ExtrastoutGuinnes creates arelationship amongdrinkers (on-trade)International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  12. 12. How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductAustraliaandAsiaU.S.Guinness Draught & Guinness Draught Extra ColdGuinness extra stoutMalta GuinnessGuinness Foreign ExtrastoutMainly used asdrink after meal(78% sold offtrade)International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  13. 13. How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductAustraliaandAsiaU.S.Guinness Draught & Guinness Draught ExtraColdGuinness extra stoutMalta GuinnessGuinness Foreign ExtrastoutProvide to give a producteasy to drink (MaltaGuinness is a free alcoholdrink), and a strong drinkrelated to viral sexuality andpowerInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  14. 14. How Guinness competes in the international market:act locally AreaCustomersolutionWesternEuropeEasternEuropeAfricaProductAustraliaandAsiaU.S.Guinness DraughtGuinness extra stoutMalta GuinnessGuinness Foreign ExtrastoutGuinness Draughtreproduces Irishculture overseasInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  15. 15. Social media Communication“One of the most important strategicconsideration is whether to standardizeworldwide or to adapt the promotion mixto the environment of each country”Social media: the way to understandyoung drinker needs and expectationswith GLOCAL APPROACHSource: Our adaptation from Facebook.com
  16. 16. US Guinness social communication on FacebookUS Guinness target: 25-34 years oldDay of max popularity: March 10thWHY?St. Patrick’s day periodSource: Our adaptationfrom Facebook.comInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  17. 17. What are the differences ?Nigeria commercial US CommercialInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  18. 18. Product/communication modeProductStandard Adapt NewSTRAIGHTEXTENSIONPRODUCTADAPTATIONPROMOTIONADAPTATIONDUALADAPTATIONPromotionStandardAdaptProductinventionInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  19. 19. Case questions1. How would you explain the Guinness pricingstrategy and the underlying assumptions aboutconsumer behaviour when Diageo reports for2005 that in the UK and Ireland Guinness salesvolume fell by 3%, but a value growth of 4% wasachieved in both markets, mainly due to priceincreases?2. Motivated by the success of this pricingstrategy, should Diageo continue to increase theprice of Guinness?International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  20. 20. STRENGTHS WEAKNESSESinternalexternalTHREATS OPPORTUNITIES• market knowledge• brand image and brand awareness• quality and uniqueness of taste• little market• complexity of taste andresistance of potential customers• strategic alliances• social media strategy• customers switch market( from stout to lager )• alcohol regulation(tax and prohibitions)Guinness Swot analysisInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  21. 21. Guinness pricing strategy• Guinness is sold with premium price because it gives to its consumersmore than a product, it delivers an experience, a lifestyle model ect.• That’s why in 2005 in the UK and Ireland, with an increasing pricestrategy, Guinness was able to achieve a value growth of its sales of 4percent. How we can explain this phenomena?Value growth of sales: 4%Volume fall: 3%What was the price increase?7%εp= %ΔQ / %ΔP εp = -3% / +7% = -0,43International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  22. 22. Rigidity of Guinness demandεp = -0,43QUANTITYPRICEp = + 7%q = - 3%International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  23. 23. Consumer BrandresonanceBrandImageryBrandPerformanceBrand salienceSource: Keller K.L. , 2008Consumer Brandresonance:-loyal consumers-high repeat purchaserateCustomerJudgements:- high quality- Superiority anduniqueness ofthe brandBrand Imagery:- mostly male adults > 25– Supporters of the strong taste withdecisive personality- A 250 years old brand- Strong experience-Share moments with other people duringsport occasions, eventsBrand Performance:-Irish beer with coffee taste, 5-6%alcohol- Aggressive price- increase policy- A typical “on trade” consumptionCustomer feelings:-fun (feel playful)- excitement( feel energized)- social approvalBrand salience:- high awareness: most commonly recalled alcoholic dark beerCBBEKeller’s ModelInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  24. 24. 3. In Choueke (2006), an anonymous beer retailer buyer commentson Guinness’ decreasing sales volume: “Guinness has an olderprofile of drinker and with an ever-increasing availibility ofcontinental lagers and a fast growing range of alcopops, theyounger generation of drinkers simply haven’t bought into it.Innovation – widgets and gadgets – will keep the brand alive for awhile but where else can Diageo go? Flavoured Guinness? Nothanks. It is in decline and Diageo’s best minds can’t do muchabout it. The brand may have only a couple of decades worth oflife in it and I would milk it for everything before getting rid of itand concentrating on spirits. Do you agree with this statement?Explain your reasons.4. What elements of the Guinness international marketing strategywould you focus on in order to increase global salesvolume, value and profits?Case questionsInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  25. 25. INTRODUCTION GROWTH MATURITY DECLINE RE-CYCLESALESSTAGE OF THE PRODUCT LIFE CYCLEProduct life cycle:Guinness strategic marketing choicesMilk strategy?Revitalize thebrandInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  26. 26. ENACTED: focus on what itmeans rather than what it can doFUNCTIONAL: focus on what it cando rather than what it meansREIFIED:brand closelyidentifiedwith productABSTRACT:brand almostproduct-independentManage the brand space conceptGUINNESSCONSUMERSYOUNGDRINKERSInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  27. 27. How to revitalize the brand?• CO-BRANDING :Limited edition collection +• SPONSORSHIP :International Guinnesspoker tour• “GUINNESS MIX&MATCH APP ”:An application with the list ofrecipts, for cocktails and dishesGuinness based with theopportunity for the customers toenrich the library with theircreations.International Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  28. 28. The 6C model of social media:“Guinness Mix&Match App”Company ContentPUSHControlCommunityCustomersPUSHPULL Conversationsonline (wom)Company’s border of control over contentDiageoGuinness Mix&MatchApp available free onFB and Apps storePublishing the bestrecipt and cocktail FB and YoutubeusersInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study
  29. 29. Sources:• Hollensen, S., (2012), Essentials of Global Marketing, UK, PearsonEducation.• Keller, K.L. (2008), Strategic Brand management, NJ, PearsonInternational Edition.• Porter, M.E. (2004), Il vantaggio competitivo, Einaudi Editore, p. 13.www.facebook.comwww.guinness.comhttp://www.diageo.com/en-row/Pages/default.aspxhttp://www.guinness-nigeria.com/http://visual.ly/global-beer-consumption-statistics-and-trends
  30. 30. Thank for your attentionInternational Marketing Course A.Y. 2012/13 Professors: Cantone/Hollensen - Guinness Case Study

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