Diageo is a global spirits and beer company formed through mergers in 1997. It focuses on premium brands and has a diverse portfolio including Johnnie Walker, Smirnoff, Guinness, and others. Diageo uses acquisitions, geographic segmentation, complete category participation, and priority brand marketing to grow globally. It targets high-growth markets and categories. Diageo tailors its marketing strategies to different regions, emphasizing sponsorship and relationships in North America and sports in Australia.

2. Celebrating life every day,
everywhere…
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3. INTRODUCTION
Diageo was formed in 1997, through the merger of Grand
Met and Guinness. At that time Diageo was consumer
goods company.
By 2000, Diageo had realigned its business to focus on its
premium drink.
The alcohol industry is subdivided into three major
categories: beer, wine and spirit.
Beer sales accounted for 76% of total alcohol sales- So,
global players concentrated on this.
The only exception was Diageo. Leader in Global spirit
Market And had presence in all three categories.
It followed unique STP strategies to succeed.

4. Diageo consists of: 8 Global priority brands, 30 local
Priority brands, and some other category brands.
Global priority brands were Diageo’s primary growth
drivers across markets, and accounted for about 60% of
its total sales volume.
In 2005, its return on capital increased from 10.5% in
2000 to 14.9% in 2005.

5. Diageo was engaged in a broad range of activities within
the beverage alcohol industry.
17 of the brands owned by the group were among 100
premium spirits brand world wide.
Diageo also brewed and sold other companies beer
brands, including Budweiser, Carlsberg, Heineken and
Tiger Beer.

6. ALCOHOL INDUSTRY: OVERVIEW
Alcoholic Beverages industry comprised of 26 public
companies and over 200 private companies. But the
industry was dominated by selected few.

7. During 1999-2000, alcohol consumption patterns
changed a lot.
Consumers were shifting interests from discounted
products to more expensive premium brands.
Companies introduced premium brands with higher price
tags.
In low and middle-income countries, consumers shifted
from locally produced beer to commercial, regional
brands.
To acquire a range of regional brands and sales network,
consolidation was the main feature.

9. Strategic plan “go” Diageo
Mergers & Acquisitions
 One of Diageo’s key growth strategies has been to make
acquisitions in high-growth markets as well as product categories.
 Key Acquisitions:
 2001: Diageo acquired Seagram’s spirits and wine business.
 2011: Diageo agreed to acquire the Turkish liquor company Mey
Icki for US$2.1 billion.
 2012: Diageo agreed to acquire a 53.4% stake in the Indian
spirits company United Spirits for £1.28 billion.

10.  2014: Diageo agreed to sell Bush mills Irish whiskey in
exchange for $408 million and full ownership of tequila
brand Don Julio.
Through this acquisition, the company further expanded in the
more profitable ultra-premium tequila category.
In June 2012 Diageo announced a £1 billion investment in
Scotch whisky production over the following five years.
-For expansion of several facilities.
-To increase its production capacity by 30-40%.

11. Segmenting
 Diageo’s Global business was managed through three regions:
North America, Europe, and International.
 Its geographic segmentation was quite different from usual
continent wise segmentation. Its segmentation was based on same
physiographic characteristics.
 For ex: North America contained only U.S and Canada, while
Central American and Caribbean nations were grouped together
with Latin America.
 The Asian Island nations in the Arabian Sea were Grouped with
South and Central Africa. The rest of Asia were grouped separately.

12. North America Accounted for the largest
amount of Diageo’s sales (29%) as well as
operating profit (41%)

13. TARGETING
 Follows four fold strategies – complete category
participation, growth of global priority trademarks, investment in
BRIC economies and selective acquisitions.
 Diageo intended to have complete category participation, rather
than solely focusing on individual brands and categories
-Key categories included-Scotch Whisky, Vodka and Rum.
 In Russia Diageo introduced a range of vodkas, while it focused
more on Rum in RTD(ready to drink) for the Australian market.

15. POSITIONING
 Diageo established very aggressive positioning statements for 4
Global trademarks, which were highest sellers in their respective
category:
-Johnnie Walker(scotch)
-Smirnoff(vodka)
-Baileys original Irish Cream(Liqueur)
-Guinness Stout (Beer)
 The Positioning statements were:
-Smirnoff: “Liberation, boldness, versatility”
-Guinness: “Guinness reflects your inner strength”
-Johnnie Walker:
 Black label: “power, complexity and depth”
 Green Label: “ The spirit of the Highlands”
 Gold label & Blue label: “The Centenary blend” and “Ultimate
connoisseurship”

16. Diageo had 9 of the world’s top 20 premium distilled spirits
brands. Each priority brand was marketed consistently around
the world and therefore had the scale benefits.
Smirnoff was Diageo’s highest volume brand. Achieved sales
of 25.2million equivalent units during fiscal year 2005.
-Ranked as No.1 premium vodka
-Ranked as No.2 premium spirit
Johnnie Walker Red Label sold 7.7 million eq. units and was
ranked number one premium scotch whisky.
Guinness achieved a volume of 11.4 million eq. units and was
only global priority beer brand.

17. Marketing Mix
 Diageo’s marketing and investment strategies also differed
in different geographical segments.
 Marketing through sponsorship and customer relationship were the
key investment in North America and Australia.
 In North America Diageo made a big investment on brand
campaigning, like the “ Tony Sinclair- Ready to Tanqueray’’ campaign,
Smirnoff’s “Neat’’ Campaign, Johnnie Walker Black Label’s Mentor
Program.
 Diageo had introduced marketing campaign focused on African
American and Mexican American consumers. In these community the
company sponsored comedy serials ‘Barbershop’ and ‘Latin Kings of
Comedy’.

18.  In Australia, Diageo invested more on sports and sponsored
Johnnie Walker super series Cricket, Johnnie Walker Golf
Classic, etc.
 Acquisition and Brand positioning were the priority in BRIC
economies, whereas, innovation and market development were
the main drivers in Africa.
 Diageo also introduced the Business Reporting Awards scheme to
create awareness about market condition and investment in Africa.
 Local priority brands like Chequers, Don Julio, Ye Monks, etc. were
also in demand in Latin America.

19. CONCLUSION
 Diageo had always stressed on brand building, sale execution and
innovation.
 Diageo’s marketing campaigns were aimed at brand building.
 It also had a strong sale execution and superior relationships with its
customers.
 The company needed to focus on building relationship with its three
largest global customer – Wal-Mart, Tesco and Carrefour.
 Diageo’s presence in all the sub sector of alcohol throughout the world
could be a core competence to the firm.
 Still Diageo needed to invest more and acquire a larger market share
in the beer market, because of the volume of market.
 The company needed to concentrate more on high beer consuming
markets like China, Germany, Brazil, Japan, etc.