Diageo targets new consumers

13 February 2012

LONDON: Diageo, the spirits group, is aiming to attract luxury consumers, the middle classes in emerging markets and more female customers, and has launched over 80 products for these groups in just six months.

To better serve affluent customers, Diageo recently introduced a "super premium" vodka, called Cîroc. It also derived nearly 20% of the growth for its most expensive Johnnie Walker lines via special gift packs made for events like Diwali and Chinese New Year.

"We are premiumising our brands through innovations," Paul Walsh, the company's chief executive, said on a conference call. "Understanding consumer motivations in this luxury space is key to success."

Female shoppers are another key target audience for Diageo, and it has rolled out products including Smirnoff Whipped Cream and Fluffed Marshmallow flavours in the US, and Baileys Biscotti in Europe.

"We also believe there is a significant opportunity to unlock growth from exclusively targeting female consumers. We are doing this across all markets," said Walsh.

Another core demographic attracting Diageo's attention is the expanding middle class in developing nations, in the first instance by pushing "heritage" brands like Haig whisky in Latin America.

More specifically, Diageo boosted its marketing spend by 10% in the last six months, with fast-growth economies taking 70% of this incremental expenditure, although North America also logged an 8% uplift.

"In addition to increasing spend, the range of our brands gives us enormous scope to reach consumers over a number of platforms," said Walsh. "So while marketing was up, our marketing impact increased by even more."

He cited examples including the development of an ecommerce partnership for Baileys in China, which has given it the opportunity to reach 190m female online shoppers in a "cost effective" way.

By contrast, the "Time to Share" campaign for Buchanan's in Columbia and Mexico combined TV and word of mouth around a volunteering scheme, and offered free tickets to an exclusive pop concert.

Elsewhere, when launching Johnnie Walker Blue Label, exclusive tastings with "local relevance" were held in China, India, Thailand, Vietnam, Brazil and Mexico, coupled with social media activity yielding some $30m in coverage.

In Nigeria, Diageo also generated £2m in earned media by organising a match between the country's football team and Argentina. "In Africa, we are now filming our ads in the region in several local dialects and featuring the local community," Walsh added.

Data sourced from Diageo; additional content by Warc staff