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Marketing Case Study: Diageo Branding Strategy In Africa

Decent Essays
Case Study Diageo Branding Strategy in Africa Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer – a business built on the principles and foundations laid by the giants of the industry. Diageo picked Africa as a potential market using Global Branding strategies. I am going to explain their strategies and early mistakes and their success in this essay (Trefis Team, 2015)
4P Marketing mix Diageo product.
Product.
Diageo offers scotch whiskey, other whisk(e)y, vodka, rum, liqueur, tequila, gin, local spirits and beer and brandy; Diageo has the market leading whisky (Johnnie Walker), Vodka (Smirnoff 1818) and rum (Captain Morgan) brands and four out of the top ten RTD brands (Smirnoff
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Therefore, Diageo fails to apply global marketing techniques to its African spirits brands (premiumization and total focus on the brand)” (Evans, 2015).
2. Wrong Price position
Most of African are poor and living in poverty, most of them have less buying power. Therefore, they can’t compete with Chang’a. It’s a locally distilled whiskey sells for roughly $1 for half litre bottle (Evans, 2015).
3. Distribution issue.
Africa has many distribution issues from underdeveloped infrastructure, a disorganized and fragmented retail landscape, which make Diageo product not widely available in the remote area. (Insights, 2012).
What has the company done to change its marketing strategies?
Diageo changes their approach from premium approach to mass quantity approach.
1. Localize Diageo products
Knowing the population in African market is not that affluent and most of the Africa is poor. The company expanded their product with low-cost branding for widening their customer's segmentation. The company came up with new low price product to suit African taste and pocket such as Jebel Gold and Orijin bitters (it a mix between herbs, fruit and alcohol, will low price ($2 per 750 ml)) (Evans,
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What are the social implications of Diageo’s actions?
For social implication of Diageo’s action, I want to capitalize SCAD officer statement.
“In our society, drinking is a big problem,” said William Ntakuka, program officer for SCAD, a Kenya-based nonprofit organization that campaigns against alcohol and drug abuse. “It’s bad, and it’s getting worse” (Evans, 2015)
Diageo aggressive sales using billboard advertising of Diageo brands directly outside schools and radio has to increase African alcohol consumption. As a matter of fact “In Nigeria, FABs are forecast to reach 70m litres in 2020 from 11m litres in 2015” (Toesland, 2016)
Conclusion
In conclusion, Diageo had successfully adapted to African buyer behavior, but at the other hand they aggressive approach has eminent risk cannibalize their Guinness (beer) products. Although Diageo, Pernod Ricard and other international spirits companies operating in Africa all run responsible-drinking programs and say their products should be consumed in moderation. We all know the risks are high in Alcohol abuse and its negative
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