management 478 presentation

Team Members Alyssa Bergman

Brant Bumgarner Danielle Sponder

Kaleb Boyer Mat Gross

INTRODUCTION

15 Key Brands

AGENDA

Part 1: Brief History

Part 2: Problem, Goal, Conditions

Part 3: Strategy and Evaluation

INTRODUCTION

Goal: Develop depth rather than focusing on breadth

Outcome: Increase market share and consumer awareness

INTRODUCTION

Co-Leader in Wine & Spirits

KEY BRANDS Smirnoff, Ciroc, Guinness, Ketel One, Captain Morgan, Jose Cuervo, Crown Royal, Hennessy, Dom Perignon, Tanqueray, Baileys, Goldschlager

BRIEF HISTORY

• French Company with U.S. Subsidiary

• Formed in 1975 through merger of Pernod and Ricard

• Large company with 19,000 employes

• In 70 countries

• Frequent acquisitions including:

• Austin Nichols Wild Turkey, Jameson, Jacob’s Creek, Seagram, Malibu, Kahlua, Absolut

PROBLEM

• Price paid for Absolut

• Absolut is the top premium vodka worldwide based on volume

• Paid premium of $8.34 billion

• Sales slipped immediately after acquisition due to economic slump

• Strategy has focused on expanding breadth of brands, need to focus on awareness of key brands

SOLUTION

• Will increase awareness of our key brands

• Position us as the industry leader

In order to recover the premium paid for Absolut and increase awareness of our

key brands, our goal is to increase market share 5% over 5 years.

CONDITIONS

• Alcohol industry thought to be recession proof, but sales declined with the current recession

• Absolut sales slipped significantly as consumers switched to cheaper vodka brands

• 4 tiers of alcohol industry

• Low price, low quality (Ex: Hawkeye vodka)

• Mid price, mid quality (Ex: Smirnoff)

• Upper-mid price, high quality (Ex: Absolut)

• Premium price, premium quality (Ex: Grey Goose)

STRATEGY

• What didn’t work:

• Improving efficiency of production

• Reducing logistical costs

• The industry is already efficient in these manners

• What will work:

• Marketing

• Creative packaging

• Sustainability

• Family branding

• Guerrilla marketing

CREATIVE PACKAGING

• Limited Edition packaging has been very successful

• Collectables

• Encourages point-of-purchase sales by new customers and repeat purchasing by collectors

SUSTAINABILITY

• Why?

• Company already has focus on sustainability

• A growing trend with consumers

• Growing awareness of environmental impact

• Our market is specifically susceptible to new trends

• How?

• Redirection of materials, no additional waste

• Tie in with advertising and creative packaging

SUSTAINABILITY

• How (continued)?

• Bottle alteration

• Earth Day packaging for month of April

• New bottle and biodegradable bag – plant it to grow flowers

• Include sustainability logo on top 15 brands

FAMILY BRANDING

• Why?

• Increase consumer awareness of Pernod Ricard and key brands

• How?

• Advertise 15 key brands as a family

• Give each brand its own character

• Use for commercials and print advertisements

• Pernod Ricard house online

• Tour each brands’ room

GUERRILLA MARKETING

• What is guerrilla marketing?

GUERRILLA MARKETING

Pop Culture: Trend Forward Marketing

GUERRILLA MARKETING

• Why?• Increase customer base• Discern Pernod Ricard as trendy

• Where?• Large cities such as Manhattan, Chicago,

Los Angeles, Boston• How?

• Fountain wrapped as a bottle• Give out bottle sweaters at night clubs• Taste tests at sponsored events• Growing green alcohol in trees

TIMELINE

• First year• Introduce Earth Day marketing, creative

packaging and family branding• Second year

• Introduce guerrilla marketing• Third year

• Continue four marketing techniques discussed

• Fourth year• Start large sponsorships to reach more

people than our targeted campaigns• Fifth year

• Continue strategies

RESOURCES

• Financial Input• Advertising expense: $0.14 on the dollar• Profit:$0.18 on the dollar• Increase spending on advertising by $296

million over 5 years• Increases net sales 5% (equal to $2.1

billion)• Re-evaluate annually, expense may

change as net sales change• This will increase profit by $390 million• Marketing expenses will not be even year

to year• Different methods require different

expense

CONCLUSION

• Evaluation• Market share growth• Increased profits

• Problem: Focus on growth through acquisitions of external brands rather than developing existing brands

• Solution: Refocus marketing strategy and grow market share

• Strategy: Marketing plan• Creative packaging• Sustainability• Family branding• Guerrilla marketing

QUESTIONS?