The 4 Steps Diageo's Top Marketer Is Taking to Reposition Portfolio for Growth

Cristina Diezhandino, Chief Marketing Officer at Diageo, began her Capital Markets Day presentation by saying that value optimization is not changing. Premiumization remains integral to the company's strategy. and will not change. It is a value creator, she said.

But there are four things that are different from what Diageo has done in the past.

• The first is an ability to map each category not only by pricing but also by the drivers of choice.
• The second is that each product has a clear role in its category.
• The third point, "very important and actually very new, is we are including RTDs are part of the trademark strategy" That means there is an end-to-end approach to this trademark and to the category, and what we are then looking at is how do we serve consumers across different occasions, across different price points, to satisfy the needs of that particular consumer?
• The fourth point: Each market will have "that particular category strategy in practice, in source with the data points that are particular to that location."

Target Portfolio Repositioning Delivers Growth. By mapping the consumer landscape and the competitive context, Diageo found "there were a number of consumers and occasions that were being underserved and, in particular, an opportunity for our value whiskies which hadn’t been activated in that manner in the past, Diezhandino said.

So, Diezhandino and her marketing team created a wider spread of pricing opportunities and created different choices for brands including Black & White, VAT 69, and J&B.

The result: "A wider spread of pricing opportunities and different brand choices for various consumer groups that in the Middle East had
some knowledge of these brands in different stages in perhaps some of their home countries."

In doing this, she said, "we allowed those brands to grow" and Diageo had the opportunity to fill in some spaces with innovations such as Johnnie Walker Red Soul, or to launch Black Ruby or Bulleit Bourbon. The result: Diageo's whiskey portfolio occupies more consumer spaces and price points.

Price Repositioning Drives Value. Diageo then took the results of those tests and tested them in more places. In EMEA, they ran 80 interventions in all. In Latin America, about 20. The results? "The aggregate of these interventions was a 26% increase in volume in EMEA and 25% America. The total aggregate gross profit dollar was superior to the year before.