Brand management practice by Pernod Ricard Italia presented at the Master of Science in Marketing Management @ Università Bocconi, Milan - 2018

1. hob, maestria, abs
portfolio management –
the Pernod Ricard Italia case
MILANO, May 7th 2018

2. bocconi
hec paris

3. cleacc
mm-ls
mktg

5. the union of
2 pastis
a lot of M&A
conviviality
decentralization

6. conviviality1.
“Make one new friend
every day” Paul Ricard

7. decentralization2.

8. a valorized niche..
spirits
3%
9,5%
43% 54%
39% 51%
>
Source: IWSR - International Wine and Spirits Record, ITA, CY16, Value data rielaborated on Nielsen prices

9. ..composed by + categories
spirits
38 20
00 10 20 30 40 50 60 70 80 90 100
Brandy
& Grappa
Bitters (Aperitives + Amari) Gin Vodka
Scotch
Whisky
US
Whisky
Rum
Liquors
(others)
Aniseed
5 7 8 7 292
Source: IWSR - International Wine and Spirits Record, ITA, CY16

10. spirits
38 20
00 10 20 30 40 50 60 70 80 90 100
Brandy
& Grappa
Bitters (Aperitivi + Amari) Gin Vodka
Scotch
Whisky
US
Whisky
Rum
Liquors
(others)
Aniseed
5 7 8 7 292
Source: IWSR - International Wine and Spirits Record, ITA, CY16
..composed by + categories

11. competitors
Goliath vs. more David(s)
20
8 7 6 5 4 4 3
Leader Int.l Challengers Nat.l Challengers
Source: IWSR - International Wine and Spirits Record, ITA, CY16 – perimeter Spirits+Champagne+Vermouth+Port

12. 900(43 + 103 + 71 + 81 + ..]Fonte: IWSR, ITA, CY16

13. pernod ricard
81 refs, 29 brands (as per today)..
> how to select priorities?

14. house of brands
..let’s start from the end
/ Clusters
International vs. local
/ RUOLI
Stars, Growth Relays,
Bastions, Maintenance
/ Extra
Luxury, Innovation

15. Seeds
(40-100)
Maintainance
(5-10)
Growth Relays
(20-40)
Bastions
(10-15)
Stars
(20-30)
Make or
Break
Trade
/ Tactical
house of brands
..role = investment profiles
/ RUOLI
Screening further all
little ones
/ beware
Brands vs. B.Qualities..
ΔMarginediContribuzione(crescita)
Margine di Contribuzione attuale
/ [X – Y]
Investment
”recommendations”

16. house of brands
3 criteria for positioning
1.financials
parameters
2.competitive
intensity
3.consumer
potential

17. financials parameters
/ levels check
Net Sales, A&P, CAAP
/ rilutive vs. dilutive p&L
NS/Lt, CM/Lt, (and evo) vs. total
/ A&P
A&P/NS, evo vs. NS
1.

18. 2.
competitive intensity_1
> ON+OFF – IWSR (MS Vol, 1990)
> OFF + C&C – Nielsen (Ita, MS Val/Vol, WD, Promo, Cut Price..)
Source: Nielsen – OFF, P1.18, tot ITA

19. 2.
competitive intensity_2
> Riccardo Pernoddo review (Trad. media vs. Digital ed Eventi)
> HoB competitors (e.g. )
> WTU vs. JKD, BDG minaccia vs. JAG.. CYN? Ciao.

20. 3.
consumer potential

21. 3.
consumer potential

22. 3.
U&A – Usage & attitudes_1

23. 3.
U&A – Usage & attitudes_2

24. 3.
U&A – Usage & attitudes_3

25. 3.
U&A – Usage & attitudes_4

26. 3.
U&A – Usage & attitudes_4

27. 3.
U&A – Usage & attitudes_4

28. 3.
U&A – Usage & attitudes_5

29. 3.
consumer potential_CDM

30. 3.
NEEDs
PICS
consumer potential_CDM

31. drinkers’ clusters
pics

32. pics
age gender, and going out freq.cy
Source: GFK, Consumer Segmentation study, Jan.18, ITA

33. what leads you to a drink
needs

34. needs
..in the end, why would you drink?
relax reward bond &
connect
impress night
out

35. 3.
CDM_heatmap
Heatmaps
for every category, price band, brand
for heads, volumes (Lt.), value (CM, €)

36. 3.
consumer potential_CDM

37. Absolut:
come
la
valu/amo
sui
3
criteri..
>
star

38. absolut_a star ranking
..how does the brand scores
1.financials
parameters
2.competitive
intensity
3.consumer
potential
/ NS/lt dilutive yet CM/lt rilutive
/ investments OK, still J (A&P/NS 28% > 26%)
/ on a virtuous spiral (NS evo > vol evo)
>> positive mix effect (ON faster vs. OFF)
/ Smirnoff silent
/ Russian Std company in financial issues
/ Velier: Stoli over Mosko (yet Stoli on LEB..)
/ Approx. 20% MS Val >> still room for growth
/ Vodka faster vs. avg Spirits (not battling Gin)
/ Stoli over Mosko for Velier

39. absolut_a star ranking
..how does the brand scores
1.financials
parameters
2.competitive
intensity
3.consumer
potential
/ NS/lt dilutive yet CM/lt rilutive
/ investments OK, still J (A&P/NS 28% > 26%)
/ on a virtuous spiral (NS evo > vol evo)
>> positive mix effect (ON faster vs. OFF)
/ Smirnoff silent
/ Russian Std company in financial issues
/ Velier: Stoli over Mosko (yet Stoli on LEB..)
/ Approx. 20% MS Val >> still room for growth
/ Vodka faster vs. avg Spirits (not battling Gin)
/ Stoli over Mosko for Velier

40. absolut_the night is ours
..which game will we play
/ During the weekend 81%
/ In the evening 30%, or late night 46%
/ 80% ON vs. 20% OFF trade
> of which 58% NC+HEB, 30% LEB (+18%..)
/ PICs: YO,PP,AsS à 50% 18-24, 40% 25-34yo
Source: GFK, Consumer Segmentation study, Jan.18, ITA

41. abs_brand equity check.1
..what’s our image today?
awareness..
..and beyond
Source: GFK, BEM study, Mar.16, ITA
consumers: solid brand, still one step to leadership
spontaneous TOM
total spontaneous
total spont + prompted

42. The image cannot be displayed. Your computer may not have enough memory to open the image, or the
image may have been corrupted. Restart your computer, and then open the file again. If the red x still
appears, you may have to delete the image and then insert it again.
abs_brand equity check.2
..what’s our image today?
Source: GFK, Bartender barometer, Apr.15, ITA
69
62
49
65
70
48
72
71
61
52
67
72
40
73
38
67
41
53
43
16
58
High quality
Too
commercial
Involves
bartenders in
events
Has a great
equity among
consumers
It's authentic, it
has never
changed
It's hard to
replace it with
another brand
It is a versatile
brand
Average score on agreement scale (0-100)
Mainstream – N=58
Premium – N=50
Leading – N=24*
0-60 = Disagree
61-70 = Neutral
71-100 = Agree
LEB
bartenders:
historical success
+ wide distribution =
too commercial
>> quality doubts (!)
+ substitutability..

43. abs_brand equity check.3
..wrapping up..
1.consumer equity is a solid #2.. obj #1
> increase consumer reach (events, media)
2.warning on high-end LEB + bartenders
3.structural substitutability
> ambassadors to educate & engage + Elyx
> stand up for something + drinking strategy

44. #absolutnights

45. ABSOLUT SYMPOSIUM
ABSOLUT NIGHTS
ABSOLUT
IN THE CLUB
ABSOLUT
SPONSORSHIPs
EVENTs people
30k
10k
40k
50k50
50
1
8
3 days disco hotel
with secret rooms
Themed events in
transformative locations
Ad-hoc branded nights
within partners night clubs
Brand visibility & trial
in pre-existing events
abs_#absolutnights

46. video _ absolut sponsorships

47. video _ #absolutnights Genova

48. video _ #absolutsymposium

50. ..focus on indirect reach!

51. ..focus on indirect reach!

52. a.team

53. CLAUDIO ZERILLI MARVIN DONDOSSOLA
BRAND EXPERT
MARCO PAOLETTI
FIELD EXPERT / SOUTHFIELD EXPERT / NORth
abs_a.team

54. abs_a.team
MI
TO
BO
FI
RM
NA
6 CITIES
ICONIC
LEADING
PREMIUM
MAINSTREAM
RES LEB HEB NC
Focus on trendy LEBs (and alike)

55. abs_a.team
MI
TO
BO
FI
RM
NA
6 CITIES
STEP 1: SURVEY & MAPPING
Understand bartenders brand and product
perception as well as enrich PRI database
STEP 2: EDUCATIONAL & MASTERCLASS
Involve bartenders in brand storytelling, leveraging
on product tasting as well as educational
experiences
STEP 3: SALES SUPPORT
In collaboration with Sales Managers, push “educated”
bartenders to buy Absolut
STEP 4: pushing BRAND activations
Collaborate with trendy outlets, setting up guest shifts leading
to small consumer activation creating dedicated drink lists

56. abs_a.team
MI
TO
BO
FI
RM
NA
6 CITIES
STEP 1: SURVEY & MAPPING
Understand bartenders brand and product
perception as well as enrich PRI database
STEP 2: EDUCATIONAL & MASTERCLASS
Involve bartenders in brand storytelling, leveraging
on product tasting as well as educational
experiences
STEP 3: SALES SUPPORT
In collaboration with Sales Managers, push “educated”
bartenders to buy Absolut
STEP 4: pushing BRAND activations
Collaborate with trendy outlets, setting up guest shifts leading
to small consumer activation creating dedicated drink lists
..an example..

57. video _ nothing to hide

59. abs_a.team
MI
TO
BO
FI
RM
NA
6 CITIES
STEP 1: SURVEY & MAPPING
Understand bartenders brand and product
perception as well as enrich PRI database
STEP 2: EDUCATIONAL & MASTERCLASS
Involve bartenders in brand storytelling, leveraging
on product tasting as well as educational
experiences
STEP 3: SALES SUPPORT
In collaboration with Sales Managers, push “educated”
bartenders to buy Absolut
STEP 4: pushing BRAND activations
Collaborate with trendy outlets, setting up guest shifts
leading to small consumer activation w/ dedicated drinklists
..as well as..

60. ELYX
INTRODUCING
ABSOLUT
ELYX

61. ELYX
INTRODUCING
ABSOLUT
ELYX [ not today ]

62. abs_brand equity check.3
..wrapping up (again).
1.consumer equity is a solid #2.. obj #1
> increase consumer reach (events, media)
2.warning on high-end LEB + bartenders
3.structural substitutability
> ambassadors to educate & engage + Elyx
> stand up for something + drinking strategy

63. ALL
GENDERs
ARE
EQUAL
PEOPLE
SHOULD BE
FREE TO LOVE
WHO THEY
CHOOSE
EVERYONE
SHOULD BE
FREE TO
EXPRESS
THEMSELVES
NO MATTER
WHERE WE
ARE FROM,
WE ARE ALL
HUMAN
PRODUCERS
SHOULD BE
TRANSPARENT
ABOUT THEIR
PRODUCTION
5 BELIEFS

64. video _ vodka soda

67. abs_drinking strategy
..nothing to hide (again)
/ mixed drinking = risk of being substituted
>>
..unless you pick a neutral mixer, that
exhalts the spirit subtle flavour
/ easy to replicate @ home >> OFF distribution..