Diageo Marketing Paper

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[pic]Maintaining Market Leader Status in the AusTRALIAN
PRE-MIX market

PREPARED BY: Michael York Head oF Innovation and NPD

Prepared For: Executive Management

1.0Executive Summary3

1.1 Introduction to the Firm3

2.0Product Selection4

2.1Product Innovation Charter (PIC)4

2.2 Phase 1-3: New Product Development Process5

3.0Market Analysis7

4.0Phase 4: Development9

4.1Full Product Protocol Statement9

4.2Design and Development11

4.2.1Technical Tasks11

4.2.2Marketing Tasks11

4.3Product and Market Testing12

4.3.1Recommendations13

5.0Phase 5: Launch and Commercialisation14

6.0Reference List17

Alcopop tax increased drink sales: distillers17

7.0Appendices18

7.1Appendix A – Survey18

7.2Appendix B – Stage Gate Process19

7.3AppendiX C – Product Benefit Layers20

Executive Summary

1.1 Introduction to the Firm

‘Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wine and beer categories.  These brands include: Smirnoff, Johnnie Walker, Captain Morgan, Baileys and José Cuervo.’[1]

Here at Diageo we hold an enviable position of market leader for a variety of spirits and ready-to-drink (RTD) beverages. This market leader status has been earned through our strong corporate values of:

- Passion for our consumers: This is in a truly global sense as we produce products for over 180 countries around the world.[2]

- Valuing each other: It has been vital to ensure strong loyalty’s and relationships amongst all stakeholders.

- Allowing ourselves the freedom to succeed: ‘We trust each other, we are open and seek challenge, and we respond quickly to the opportunities this creates.’[3]

- Pride in what we do

- Striving to be the best

These corporate values provide the blueprint from which the company has grown and from which our corporate strategies have been formulated. Our values summarise our mission in business; to ensure that from innovation and continual improvement we continue to provide value for our customers and stakeholders.

Our corporate strategy is the communication of these values and are summarised in four key areas:

- Driving brand growth: By diversifying across all product opportunities within specific categories

- Focusing on priority brands: These global trademarks assist in driving brand growth during other areas of diversification and innovation.

- Investing more resources into opportunities in emerging markets: This is vital in ensuring Diageo maintains its market leader status into the future.

- Seeking out selective acquisitions: Those of which will assist in innovation, building brand equity and add value for stakeholders.

From extensive market tracking of the Asia-Pacific region, the following concerns have been raised regarding the Australian market:

• The current period of economic downturn[4], depicted by low consumer confidence is predicted to potentially worsen and must be monitored closely.

• The new Rudd Government has also introduced a 70% tax increase on pre-mixed alcoholic drinks.[5]

• It is understood that competitor’s Independent Distillers are currently developing a sweet RTD to combat our Smirnoff pre-mix range, utilising an alternative beer-extract ethanol, to avoid the higher taxation rates.

Product Selection

2.1Product Innovation Charter (PIC)

The PIC (below) developed by Diageo senior management is a guide for all core business units on the expectations and nature of innovation within the business.

|Background |Diageo is committed to consistent investment of resources in terms of developing...
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