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KAZIAN GLOBAL SCHOOL OF BUSINESS MANAGEMENT
MARKS: 80
COURSE: EMBA Sem- I
SUBJECT: Marketing Management
N.B: 1} Attempt all questions
Name: Sushant Chawla Reference Number: KP-00611-2010188
____________________________________________________________________________________
Case 1 Marks-16
1997 saw the US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks
company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most
profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s
most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland,
Nigeria, the USA and Cameroon.
However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo.
In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh
announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent
in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets,
Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and
tradition?
The changing face of the Irish beer market
The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each
year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer
consumption, ahead of the Czech Republic and Germany.
Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and
accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in Dublin by Arthur Guinness,
enjoyed legendary Status in Ireland, a national symbol as respected as the green, white and gold flag. It was
by far the most popular alcoholic drink in the Ireland, accounting for nearly one of every two points of beer
sold. Its nearest competitors were Budweiser and Heineken, which held 13 per cent and 12 per cent of the
market respectively.
However, the spectacular economic growth of the Irish economy since the mid-1990s had opened up the
traditional drinking market to new cultures and influences, and encouraged the travel-friendly Irish to try other
drinks. Beer and in particular stout were gradually losing popularity compared with wine or the recently
launched RTDs (ready-to-drinks) or FABs (flavored alcoholic beverages), which the younger generation of
drinkers considers trendier and ‘healthier. As a Euromonitor report explained:
Younger consumers consider dark beers and stout to be old fashioned drinks, with the perceived stout or ale
drinker being an old, slightly overweight man and thus not in tune with image conscious youth culture.1
Beers sales, which once accounted for 75 per cent of all alcohol bought in Ireland, were expected to drop to
close to 50 per cent by 2006, while stout sales were forecast to decrease by 12 per cent between 2002 and
2006.

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 KAZIAN GLOBAL SCHOOL OF BUSINESS MANAGEMENT MARKS: 80 COURSE: EMBA Sem- I SUBJECT: Marketing Management N.B: 1} Attempt all questions Name: Sushant Chawla Reference Number: KP-00611-2010188 ____________________________________________________________________________________ Case 1 Marks-16 1997 saw the US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equival ...
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