Diageo is a firm that owns more than a quarter of the world’s leading brands of spirits, for example Smirnoff vodka, Johnnie Walker whisky and Guinness, which is a leading global beer brand. In addition, Diageo also owns local brands, which are used to broaden market penetration in parts of the world. For Diageo, growth opportunities are in new markets in Asia Pacific, Latin America and Africa, and the firm is making acquisitions of strong local brands that appeal to its target customers. 

Diageo’s strategies for winning market share make use of the firm’s marketing knowledge and expertise. Elements of the marketing mix are used innovatively to differentiate its brands, for example the global Johnnie Walker ‘Keep walking’ marketing communications campaign, which has increased sales and market share for over a decade. This creative idea has grown and been reinvented for a new generation of digital consumers. Products also undergo regular reinvention, and new flavours, packaging and formats are introduced to ensure the interest of new and existing customers, for example the ‘From the bar’ premixed drinks range using Gordon’s, Pimm’s and Smirnoff. 

Collaboration with partners is another method used by Diageo to build market share. The firm’s ‘Diageo way of selling’ programme aims to help retailers and other trade partners achieve high levels of sales through education and sharing best practices, which creates value for all involved in the collaboration. Diageo has made a significant investment in facilitating partnerships. Its European Customer Collaboration Centre provides a state-of-the-art facility for Diageo to bring together customers, retailers, trade partners and distributors to aid brand development, integrated planning and R&D for new products and services. This investment not only helps Diageo show support to its business partners and customers, but also to foster constant brand development and innovation, which ultimately increases sales and growth of market share.

Questions:

1. Explain the actions Diageo has used to build market share. 

2. Discuss the difference between strategic thrust and strategic objectives, using examples from Diageo. 

3. Discuss the importance of setting marketing objectives as part of the marketing planning process.  

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SMIRNOFF