Diageo Marketing Strategy
Diageo’s Marketing Strategy
Diageo is the world’s leading premium drinks company. It has more category leading brands than any other drinks company and market leadership in many of the major growth markets around the world. Diageo’s unique STP strategy has allowed it develop into a globally renowned brand with an operating profit of over £2 billion in 2005. With its headquarters in London, Diageo has experienced rapid expansion with over 80 offices worldwide employing around 20,000 workers. The firm’s recent success can be largely attributed to its efficient market segmentation and product diversification that have allowed it to meet the specific demands of its global consumer base.
The Alcoholic Beverage industry is one of the largest in the world and is estimated to be comprised of 26 public companies and around 200 private companies, the industry is dominated by five large players. In 2005 Inbev recorded the highest revenue ($13.81 billion) followed by Haniken ($12.79 billion) and Anheuser-Busch ($12.01 billion). Diageo was ranked 4th with annual revenue of $10.9 billion and return on invested capital up 4.4% from the previous year to 14.9%. The global volume of sales of beverage alcohol in 2004 was 182.9 billion litres with a stable 1-2% growth in the previous five years. The market is made up of 3 distinct categories: beer, wine and spirits with branded beers sales accounting for 76% of total branded alcohol sales. These statistics illustrate the huge competition firms face within the industry highlighting the importance of a well defined and aggressive marketing strategy.
Diageo was formed in 1997, through the merger of GrandMet and Guinness and at the time was a consumer goods company with food and drink at its core. However, by 2000 Diageo had realigned its business to focus on its premium drinks. With 76% of alcohol sales comprised from branded beer sales it is no surprise that eight out the top nine global alcohol companies are primarily breweries.
Diageo is the world’s leading premium drinks company. It has more category leading brands than any other drinks company and market leadership in many of the major growth markets around the world. Diageo’s unique STP strategy has allowed it develop into a globally renowned brand with an operating profit of over £2 billion in 2005. With its headquarters in London, Diageo has experienced rapid expansion with over 80 offices worldwide employing around 20,000 workers. The firm’s recent success can be largely attributed to its efficient market segmentation and product diversification that have allowed it to meet the specific demands of its global consumer base.
The Alcoholic Beverage industry is one of the largest in the world and is estimated to be comprised of 26 public companies and around 200 private companies, the industry is dominated by five large players. In 2005 Inbev recorded the highest revenue ($13.81 billion) followed by Haniken ($12.79 billion) and Anheuser-Busch ($12.01 billion). Diageo was ranked 4th with annual revenue of $10.9 billion and return on invested capital up 4.4% from the previous year to 14.9%. The global volume of sales of beverage alcohol in 2004 was 182.9 billion litres with a stable 1-2% growth in the previous five years. The market is made up of 3 distinct categories: beer, wine and spirits with branded beers sales accounting for 76% of total branded alcohol sales. These statistics illustrate the huge competition firms face within the industry highlighting the importance of a well defined and aggressive marketing strategy.
Diageo was formed in 1997, through the merger of GrandMet and Guinness and at the time was a consumer goods company with food and drink at its core. However, by 2000 Diageo had realigned its business to focus on its premium drinks. With 76% of alcohol sales comprised from branded beer sales it is no surprise that eight out the top nine global alcohol companies are primarily breweries.
Bibliography: Hill and Bakke (2005), Global alcohol corporations: What they tell us about themselves and why it’s a worry. Icap Report 17 (2006), The Structure of the Alcohol Beverage Industry. Diageo Marketing Presentation (2009) www.Diageo.com accessed on 7th December 2009 www.businessweek.com accessed on 7th December 2009 www.marketresearch.com - Alcoholic Drinks - BRIC (Brazil, Russia, India, China) Industry Guide.