Marketing

2050 Words Mar 1st, 2011 9 Pages
1°) How would you explain the Guinness pricing strategy and the underlying assumptions about consumer behavior when Diageo reports for 2005 that in the UK and Ireland the Guinness sales volume fell by 3 per cent, but a value growth of 4 per cent was achieved in both markets, mainly due to price increases?

2°) Motivated by the success of this pricing strategy, should Diageo continue to increase the price of Guinness?

HOW TO EXPLAIN GUINNESS PRICING STRATEGY ?
- Pricing: Not just a financial and commercialization part => belongs to marketing and sales strategy
- Pricing affects : - sales - market share - revenue - profit => Right pricing : a direct implication to the product success in the market => The
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|Pro’s |Con’s |
|• rapid turnover growth |• A short-term solution |
|=> Reinvestment in marketing, advertising, development strategy and | |
|product development |• Loss of their youth market share. |
| | |
|• enable them to become a premium brand |• Damaged brand image |
|=> Regarding the consumers | |
|=> Regarding the competitors |• High risk of losing their consumers to competition |

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