Bhavesh Somaya, Marketing and Innovation Director, Diageo India deconstructs marketing sans advertising, and says bringing to the fold new consumers who attain legal drinking age and fine-tuning the brand message to target the rising number of women consumers are key aspects of Diageo’s marketing strategy, besides cashing in on the current premiumization trend
By Saloni Dutta
Q] What defines marketing at Diageo?
Given the fact that we operate in an industry where there is no freedom to advertise our brands and products, there has been a specific shift in the way we market to our consumers, and also in consumer behaviour. Compared to a normal FMCG organization where attitude drives behaviour, in the alcobev industry it is the other way round - behaviour drives attitude. So you experience the brand for the first time when you are either consuming it or buying it. You try the brand and then change your perception or attitude towards it. Penetration, going after light buyers and reach - these are the core principles that drive our marketing strategy. We have experienced the leaky bucket phenomenon - the more you fill in from the top, about 30-40% falls out from the bottom. So you need to continuously re-recruit consumers. Earlier, even in a media strategy, it was important to have a certain amount of frequency to drive recall. Reach builds brand salience, so it is very critical.
Q] Can you give us an estimate of your marketing spends over the last year?
As compared to last year, our spends will definitely go up by 20% this year. The focus will be on driving efficiencies in these marketing spends. So even though at an absolute level, the spends are going up, as a percentage of reinvestment, the reinvestment rates are coming down.
Q] With a ban on advertising, what are some of the brand extensions that the company has engineered and how have they worked out?
Brand extensions are treated as per government regulations, as a separate business model, and our marketing efforts on brand extensions versus that on our alcohol brands are completely separate. We launched three brand extensions over the last two years - Johnnie Walker, The Journey, a multi-cultural themed event in Mumbai to bring alive the journey of progress that some acclaimed artistes have gone through; the Smirnoff Experience in Bangalore, a mash-up of tech and music, and a gaming portal called the Vat 69 den.com to leverage the whole wave of online gaming.
Q] What are you doing in the digital space to connect with your consumer? For example, we recently saw your #datewithdad activity engineered for Twitter - how has it fared in terms of reaching out to people?
Our brand extension platforms essentially do the job of engaging with consumers through a variety of initiatives. One of those was #datewithdad, in collaboration with Johnnie Walker Blue Label. Then there was an activity at the beginning of the year, to celebrate this famous personality called Jason Lewis, the only guy to have circumnavigated the globe on human power alone. The association was with Johnnie Walker Blue Label. With Johnnie Walker Red Label, we have an F1 association on YouTube and it turned out to be a big success, positioning the brand as a very stylish and sophisticated one, and also encouraging consumers to step up to that brand.
Q] What are some of the interesting BTL activities, sales promotions that you have engineered to increase consumer engagement?
We try to attempt a through the line communication for a unique brand platform. We ensure that whatever activity we do is celebrated or reflected as a theme across ATL and BTL. So for Vat 69, for example, our platform is essentially about driving quality and our heritage credentials and that is something we drive across ATL and BTL. If Smirnoff is about real people having real fun, that is something that we drive through our BTL activities also.
Q] What’s the USP of the brand? What differentiates you from your competition?
At Diageo, we put consumers at the heart of everything we do. It is understanding that sweet spot of the consumer context, the cultural context, and what the brand brings to the table… and how we can leverage it to differentiate ourselves versus the competition… that is what really sets Diageo brands apart from all the rest.
Q] Which markets have been contributing greatly to the growth of the brand?
North is a very big Scotch market for us and it continues to grow. West and South are very big vodka markets. Recently, there were pressures on the vodka category, but now it is finally turning around with Smirnoff leading category growth. West and South both seem to be showing gains in that category.
Q] How does the brand approach Tier II and Tier III markets?
The idea is to continuously expand, and penetration is very critical. Ensuring success for all our brands and taking them to Tier II and Tier III cities is very critical for us to be able to drive that objective. Over the last few years, we know that our width of distribution, access and route to market have strengthened and we are gaining advantage.
Q] What are your views on premiumization in the liquor market? Do you think it would work in Indian market conditions?
Consumers in every single category are premiumizing, and that applies to our category as well. Internal research substantiates this, as we see more than 18-20% of regular consumers every year choosing more premium brands in every single category that we operate in. The idea is that as disposable incomes rise and savings rates go down, people want to grab the opportunity and upgrade their lifestyles. That is what is driving this premiumization trend, and within our portfolio too, the more premium brands are contributing to value business compared to less premium brands. This trend is getting stronger and stronger.
Q] With India being touted as one of the largest markets for liquor, what are the emerging consumer trends and future opportunities looking ahead? What are the trends that you predict in the liquor market in the coming year?
We need to understand the contribution of Gen Y or LDA+ (legal drinking age +) consumers entering into the category at a much faster pace than earlier. While almost 19-20 million consumers attain legal drinking age every year, the percentage of them coming into the category has risen to almost 35-40%, in comparison to only 30% earlier. We need to ensure that our brand programmes are continuously recruiting those new consumers into our fold. The second important trend is premiumization - even within the category, consumers clearly want to premiumize, i.e., choose more high lifestyle brands, show off either their status or different motivation states that we analyse and understand. We are continuing to leverage this. Third is the rise of women consumers, and that is again something that offers a great opportunity for us to grow in the future. That is a target segment we need to keep in mind and ensure that our brands get more bilingual and speak to both sets of audiences, not just be male-centric.
ABOUT THE BRAND
Diageo is the world’s leading premium alcoholic drinks business. Its brands include Johnnie Walker, Crown Royal, J?B, Windsor, Buchanan’s and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Bailey’s, Captain Morgan, Tanqueray and Guinness. These products are sold in more than 180 countries around the world. Diageo India Pvt Ltd, a subsidiary of Diageo Plc, markets its liquor brands in India. Its portfolio of products includes Smirnoff Vodka, Johnnie Walker Whisky, VAT 69, J&B and Black & White. The company, formerly known as UDV India, was founded in 1994 and is based in Mumbai.
CMO FILE
Bhavesh Somaya, Marketing Director of Diageo India, heads the company’s marketing. Prior to this, he was Head of Strategy at Diageo India, having joined the company in August 2008 as Marketing Manager, Portfolio Scotches. Before joining Diageo India, he was AVP, Corporate Brand Management & Marketing at Fullerton India Credit Company. He began his career with Cadbury. He is an alumnus of IIM, Lucknow and a university topper and gold medallist from Maharaja Sayajirao University, Baroda, where he majored in Economics.
MARKETING TIP
Beware of armchair marketing. As you spend more time in offices, the consumer has already moved on, especially in India when consumers’ behaviour and attitudes change not every year, but possibly every month.
FACTS
CREATIVE AGENCY: BBH, MCCANN INDIA
MEDIA AGENCY: MINDSHARE
SOCIAL AND DIGITAL MEDIA MARKETING AGENCY: OGILVY ONE
BTL/ACTIVATION AGENCY: ORANJUICE, FOUNTAINHEAD, TRINITY, SOHO SQUARE, SHAAN ADMARK, SPARKLES
PR AGENCY: EDELMAN
