Marketing

2071 words 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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Innovation – widgets and gadgets – will keep the brand alive for a while but where else can Diageo go? Flavoured Guinness? No thanks. It is in decline and Diageo’s best mind can’t do much about it. The brand may have only a couple of decades worth of life in it and I would milk it for everything before getting rid of it and concentrating on spirits.”

Do you agree with this statement? Explain your reasons.

In order to answer correctly at this question, we will start to analyse the different environments of the market (macro and micro) where Guinness beer compete.

The Macro-Environment - PESTEL

|Political |Control of the advertising in some countries |
| |Forbid to smoke in public space ( decrease the on-trade consumption |
|Economical |The third beverage after water and tea |
| |Decrease in volume and value between 2007 and 2009 but an

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