Diageo creating ‘route to consumer’ with promotional push
Diageo is ramping up promotions both in stores and behind bars in a bid to compliment its renewed focus on distribution and help kickstart stuttering sales worldwide.
The Smirnoff maker is bolstering its promotional strategy after seeing efforts from its Middle East, Latin American and African businesses lift demand in 2014. While the strategy stems from a greater reliance on sales and distribution to forge routes to consumers, Diageo’s marketing is also changing to accommodate the more performance-led approach.
Activation standards in the on and off-trade are to be raised next year, claimed the business, with the emphasis on fewer but larger creative ideas that resonate in several markets instead of hundreds of localised variations on the same concept.
It means future point-of-sale promotions for brands such as Bailey’s, Guinness and Captain Morgan will be more prominent behind bars and on shelves through bigger displays and merchandising programmes.
Diageo brands will also feature more in ads for retailers as well as appear on promotions outside of the spirits aisle in supermarkets.
The approach also extends to the company’s digital offering, particularly its TMW-created Bar.com site. The cocktail portal launched last year and lets visitors purchase spirits brands such as Gordon’s Gin and Smirnoff from their preferred retailer as well as hosting cocktail recipes and tips.
It is understood that Diageo wants to talk about the service in-stores in the coming months in the hope of creating a more tangible link between its virtual and bricks and mortar channels.
Integrating sales and marketing is a key priority for the business, underpinning most of the internal changes it has made this year. From the creation of a commercial planning and activation division to realigning its regional teams in emerging markets, Diageo has spent the last 18 months trying to organise its marketing and sales around the same customer objectives.
Diageo’s shift toward bigger promotional initiatives has already been applied to the company’s creative work, most recently through the media planning for its “The Gentleman’s Wager” Johnnie Walker film which starred Jude Law earlier this year.
The drinks giant backed the launch with coordinated paid advertising on channels such as YouTube and Facebook alongside media tie-ups with companies such as Mr Porter, which it has claimed helped generate 28 million views in its first two weeks.
The promotional push is a key part of chief executive Ivan Menezes attempt to operate more like an FMCG company as he looks to stabilise stuttering sales and drive media efficiencies in all markets.
Since replacing Paul Walsh last year, he, alongside chief marketing officer Syl Saller, have introduced an approach that tries to better balance on-the-ground promotions with brand building campaigns in order to foster more loyalty in a market focused on younger drinkers.
Globally sales fell 1.5 per cent in the three months to September due to losses in Asia Pacific, which was down 7.4 per cent