Modern Marketing

Diageo lauds marketing performance after £1,787m spend delivers five per cent increase in net sales

By Stephen Lepitak | -

July 31, 2013 | 3 min read

Diageo has revealed a marketing spend of £1,787m for the last year, which helped generate a five per cent increase in net sales to £11,433m and an increase of eight per cent reported profit of £3,530m.

The company increased its marketing spend by 5 per cent in its last financial year, ending 30 June 2013 across its brands, including Johnny Walker, Captain Morgan, Baileys and Guinness.

The company described Western Europe to be "a challenging trading environment" with net sales declining by 11 per cent, however North America, which made up 40 per cent of the reported profit figure, saw sales grow by five per cent, with Johnnie Walker sales increasing by 14 per cent in the region.

In Asia Pacific, net sales increased by 3 per cent, with Scotch Whisky accounting for over 50 per cent of the top line growth. Latin America saw Diageo sales grow by 15 per cent.

The company explained the thinking behind its marketing strategy, having focused on strategic brands, which through marketing it claims has "extended the leadership of our brands in many markets."

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In offering more detail on its annual figures, Diageo continued to elaborate on its marketing strategy, saying that it had aimed to change the way in engaged with consumers in digital and entertainment, while using "inclusive" messaging to reach out to new consumers, including multicultural populations, women and the 50+ sector.

Ivan Menzies, CEO of Diageo, said that the five per cent net sales growth reflected the strength of the company's US spirits business alongside double digital growth in emerging markets.

"The effectiveness if out marketing campaigns remains a competitive advantage for us and this year we have seen these campaigns extend the leadership of our brands in many markets during the year. This has been a key driver in our performance in scotch, our biggest and most profitable category, especially for Johnny Walker which is now a 20m case brand," he added.

In June the company announced the promotion of Syl Saller to chief marketing officer,taking over from Andy Fennell.

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