Guinness presentation team

1
Guinness presentation team

• Edward Doherty
• Conor OKane
• Elaine Craig
• Ross Telford
• Brendan Gallen

2
Contents

• Market background factors and trends
• Competitor analysis
• Guinness strategy
• Product
• Positioning
• Promotion
• Place Supply and Distribution
• Price
• People
• Stakeholder analysis
• Conclusion and Key Learnings

3
Market factors
Demographics 18-24s key age group, population
expected to be skewed towards older age
groups Taxation duties Increases determine
price Effect of fluctuations in other alcoholic
drinks? Legislation Smoking ban Potential ban and
limits on alcohol advertising in RoI Tourism
Tourists contributed almost 300 million through
their expenditure in 2003. Opportunities -
Giants Causeway, W5 and Belfast Zoological gardens
4
Market Factors (continued)
Social trends Women, style and image, binge
drinking, demand for increased scope of services
from pubs. Distribution UK multiples (off trade),
decline in on-trade premises (from 5,500 on-trade
licences in 1950 to 2,600 licences) Economy Rising
disposable income Substitute products RTDs,
Premium-Packaged-Lagers advertising and
promotion Consumer More discerning tastes -
demand for foreign imported beers and interest in
micro-breweries
5
Market trends

• Declining popularity of Alcopops
• Increasing wine consumption sauvignon rather
  than a six pack
• Increase in drinking at home before going out
• Off-trade picking up at expense of on-trade

6
Market trends

• Extra cold
• Opportunities for premium drinks and niche brands
• Increasing restaurant attendance providing threat
  to beer sales
• Bottled lager and cider increase in popularity
• Draught still dominates stout consumption
• Targeting new consumers women and health
  conscious

7
Competitor Analysis

• Threat of new entrants Low market contested by
  long-established players Guinness (1759),
  Beamish (1825) and Murphys (1792)
• Threat of substitutes High increased awareness
  of harmful effects of alcohol, other alcoholic
  drinks
• The power of buyers Low distribution can
  restrict choice
• The power of suppliers Relatively high
  Greencore no 1 barley supplier in Ireland, UK and
  Belgium, 6th Globally
• Competitive Rivalry Low in Stout, high in Beer

8
Key Players and brand shares
The Beer market

• Diageo
• Stout Guinness
• Primary lager brand Budweiser, Harp, Carlsberg
• Foreign brand / PPL - Warsteiner

Source Mintel / Sunday Tribune

• Heineken
• Stout Murphys
• Primary lager brand Heineken
• Foreign brand / PPL - Amstel

The Stout market

• Beamish Crawford
• Stout Beamish
• Primary lager brands Miller, Fosters
• Foreign brand / PPL Fosters Ice, Kronenburg

9
History of Guinness

• 1759 Arthur Guinness set up his business
• 1883 St Jamess Gate became largest brewery in
  world
• 1886 Guinness became a public company
• 1959 Guinness Draught launched
• 1989 Guinness Draught in cans launched
• 1990 Guinness Widget won Queens Award
• 1997 Guinness and Grand Met merged to become
  Diageo
• 1998 Guinness Extra Cold was launched
• 2000 Almost 2 billion pints of Guinness a year
  sold around world 1 million pints a day were
  sold in UK

10
The Guinness consumer

• 87 of Guinness drinkers are male
• 54 of Guinness drinkers are 25-44
• Guinness Extra Cold drinkers are 119 more likely
  to be 25-34
• Guinness drinkers were 89 more likely to have
  watched rugby
• 52 of Guinness drinkers watched football last
  year - 61 above population average
• (Source TGI 2004, BMRB)

11
Promotion
Product
Guinness Strategy
People
Price
Place
12
Product portfolio

• Guinness Extra Stout launched in 1820
• Guinness Draught original and largest variant
• Guinness Extra Cold launched in 1998 and
  chilled to 3.5C by special cooler
• Guinness Draught cans relaunched with smoother
  and creamier formula and supported by package
  design
• Guinness Draught bottles Rocket Widget

13
Positioning and strategy

• Guinness has traditionally appealed to the older
  man
• New generation of younger drinkers
• New ad campaign in 2004 to directly target the
  younger market
• Out of Darkness comes Light strap-line
• Desire to change perceptions of the brand
• Hence introduction of Guinness Extra Cold

14
Promotion

• Advertising
• Clear metrics and clear deliverables
• Sponsorship
• Rugby / hurling / music
• Direct Mail
• Beer vouchers
• Point of Sale activity
• Beer mats / drip mats / livery signs
• Reflect above the line advertising

15
Advertising
Rugby association - Strong link between Rugby
and Guinness. Promotion geared towards
development of Guinness in cans
Mustang - Aimed at 18-40-year-olds
Something to Complain About - Aimed at 34
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Place Supply Issues
Alcoholic Drinks distribution network in Ireland
is well established, well developed and extremely
competitive Breweries must enter into deals and
use offers to reach outlets that provide volume,
high visibility and an element of exclusivity
(Guinness has an distinct exclusivity
advantage) Breweries compete aggressively with
each other in providing POS materials, in pub
décor items and in running promotions - beer
promotions are ubiquitous throughout the trade
17
Place - Distribution
On-trade 18,250 on-trade, pubs, hotels and clubs
in Ireland

• Off-trade
• Total of 1,462 off-trade licences in Ireland
• Supermarket multiples are increasing their share
  off the off-licence trade in both NI and ROI

18
Guinness Distribution Facts

• Guinness is sold in 150 countries around the
  world
• Guinness is served in over 80 000 establishments
• On average one Irish pub a day opens around the
  world
• Over 10, 000, 000 pints of Guinness are sold each
  day
• Approx 2 billion pints of Guinness are sold each
  year

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Guinness - 100 distribution in Ireland

• Were 100 distribution in Ireland, so theres
  nowhere to go in terms of traditional trade like
  pubs and off-licences. Were focusing on home
  penetrationthese are mature markets but I just
  cant accept there wont be growth
  there (Source Brian Duffy, Global Brand
  Manager for Diageo, 2005)

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Price

• On-trade Price raised to increase profitability
  and contributed to growth in net sales
• (Source Licensing World, Jan 2005)

• Off trade promotions
• - 12 for the price of 8
• - - Seasonal promotions
• Dont compete on price

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People

• Diageo Way of Brand Building - build a
  sustainable marketing discipline into the whole
  corporation
• 6,000 people, 5 full days interactive training,
  35 million investment, from top to bottom
• Co-operation of agencies and joint venture
  partners.
• As a result
• It has become the day job and has permeated the
  language and approach to the business in every
  function and in every level of the company.
• (Source Rob Malcolm, President of Global
  Marketing Sales and Innovation, Diageo)

22
Stakeholders and KPIs
23
Stakeholders and KPIs
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Conclusions and Key Learnings

• Best known of all consumer goods in Ireland
• Guinness believes that initiatives geared towards
  developing the brand are showing success
• Major strength for the brand that it is
  synonymous with Ireland
• Another strength is the companys approach to
  marketing it permeates the whole company,
  providing clear focus on goals and objectives and
  how to achieve them
• Behind a great marketing and promotional campaign
  there are great people
• Profit and sales are the main benchmarks and
  KPIs, but size will dictate that additional
  stakeholders needs must be addressed
• Difficult to meet needs of all stakeholders
  Guinness suppliers and distributors