Guinness - Product

As stereotypical as it is, Ireland is known for its apparent large consumption of alcohol. There is a wide variation of alcoholic beverages sold in Ireland of course, but without a doubt, Ireland is primarily associated with Guinness.

Lets begin with product. As obvious as it may be, Guinness is evidentally a product. A product is "everything, both favourable and unfavourable, tangiable and intangible, received in an exchange of an idea, service or good" (Dibb, Simkin, Pride and Ferrell, 2012). To be more specific, Guinness is a good, which is defined as "a tangible physical entity" (Dibb, Simkin, Pride and Ferrell, 2012). However, as it is consumed by drinking, it is a non-durable goods.

Guinness is a dry Irish stout, founded by Arthur Guinness at St.James' Gate in Dublin in 1759. The product mix, "the total number of product lines that a company offers to its customers" (Suttle, 2016), is appropriate for Guinness as it includes stouts, ales and lagers. All of these three brands are sold in draught, bottled and canned form. There are a wide number of variations of Guinness, which in return adds the depth element of the product mix to the company - "the total number of variations for each product" (Suttle, 2016). 

Figure 1.0

Variations include: (see figure 1.0)

Africa Special Stout

Blonde American Lager

West Indies Porter

Foreign Extra Stout

Dublin Porter

Original

Golden Ale

Harp Lager

Kilkenny Draught Irish Cream

Product life cycle:

A product's life cycle includes four main stages: introduction, growth, maturity and decline. Like every other product, Guinness has went through this cycle. 

Introduction Stage: 

This is when a product first appears in the marketplace before profit or sales are made (Dibb, Simkin, Pride and Ferrell, 2012). In it's introductory stage, Guinness wanted to raise product awareness and also create a market for the product. Quickly Guinness established branding, a quality level and obtained intellectual property protection including patents and trademarks. As the popularity of Guinness increased, the founder wanted to ensure that the average person could afford the product over other competitors' alcoholic beverages. This price comparison has remained throughout the years and today it is in line or below its competitors with regards to price.

Growth Stage:

"The stage at which a product's sales rise rapidly and profits reach a peak, before levelling off into maturity" (Dibb, Simkin, Pride and Ferrell, 2012). Acceptance of Guinness as a product, a good, was quickly shown by customers. Initially it was only sold in Ireland. However, come 1769, Guinness exported its first barrel to England, showing its popularity. It is clear that Guinness was growing in demand as by the early 1800's, it became popular amongst many European countries and even reached Barbados, Africa, America and India. To reduce shipping costs, Guinness smartly set up bottling factories worldwide.

Maturity Stage:

This is the stage of the product life cycle where "a product's sales curve peaks and starts to decline, and profits continue to decline" (Dibb, Simkin, Pride and Ferrell, 2012). Unlike many other alcoholic products, Guinness has been around for over 250 years, which in turn makes it difficult to pinpoint an accurate maturity stage. However, from the 1800's onwards, it is clear that Guinness is still a top selling alcoholic beverage worldwide.

Decline Stage:

The decline stage occurs when sales rapidly fall (Dibb, Simkin, Pride and Ferrell, 2012). For the first time, the sales of Guinness dropped in Ireland and the U.K. in 2001. This was due to consumers choosing to drink at home and since Guinness from a pint is different from a can, many chose to buy other forms of beer. Sales could most definitely be better and maybe perhaps we could see a re-cycle or revitalisation of Guinness.

Conclusion:

Based on the product life cycle of Guinness, two diverse observations can be made. 

Guinness is in the maturity/decline stages in Europe due to the drop in sales. However, in foreign African and Asian markets, Guinness’ market share is still growing even as competitor brands emerge. Brand preference in such markets is continuingly being built by project Guinness’ uniqueness.

Due to competition, Guinness has had to become innovative in extending their sales stability and maximising profits. An example of how they have successfully achieved this was by introducing Guinness Red, which further retained customers and brand loyalty - ("the extent of consumer faithfulness towards a specific brand and this faithfulness is expressed through repeat purchases and other positive behaviours such as word of mouth advocacy, irrespective of the marketing pressures generated by the other competing brands" - Kotler & Keller, 2006).

Re-branding of the product:

Rebranding "is the process of changing the corporate image of an organisation. It is a market strategy of giving a new name, symbol, or change in design for an already-established brand. The idea behind rebranding is to create a different identity for a brand, from its competitors, in the market." (Bennett, 2016). 

In 1997, Guinness rebranded itself to Diageo plc. It became the world's largest beer, wine and spirits company when it later merged with Grand Metropolitan. However despite this, the names "Diageo" and "Grand Metropolitan" are still nowhere near as popular as the name "Guinness".

Within the last year, Guinness has introduced their new logo (as seen in figure 2.0). A logo gives a company an easily recognisable visual symbol, in Guinness' case, the harp. By having a logo, people are given consistent exposure to brands. The more that people are exposed to that logo, the more synonymous the logo becomes with the name and brand. 

Guinness is no exception to this. As seen in figure 2.0, there is not much of a difference with the new logo apart from a new font and more detail in the harp. However, the logo still remains classic, reminding consumers of the classic colour and the classic texture of Guinness. Even though the new logo is hand-crafted, the new look does not say "artisan" but says "classic", which makes sense. Despite the changes, the designers have kept the well-conceived logo which has been instrumental in building and maintaining their brand imagine whilst still remembering what Guinness is about.

Figure 2.0 Before (left) and After (right)

Brand Equity:

Since rebranding to Diaego plc and merging with Grand Metropolitan, the brand of Guinness has become an asset to the organisation. Brand equity refers to the "marketing and financial value associated with a brand's strength in the market, which is a function of goodwill and positive brand recognition built up over time, underpinning the brand's sales volumes and financial returns." (Dibb, Simkin, Pride and Ferrell, 2012). Brand equity is associated with four major elements, all of which Guinness has (see figure 3.0).

Figure 3.0

Brand awareness has led to Guinness being familiar, not only in Ireland, or Europe, but worldwide. Due to the increase in awareness of the brand, the Guinness Storehouse in Dublin has become an internationally recognised tourist attraction. As a result, they now run a Guinness Storehouse tour, which generates sales and profits from tickets and the Guinness Storehouse gift shop. Guinness is seen as reliable and like no other brand and for this reason people choose to visit places such as the Guinness Storehouse, as the myth is, Guinness tastes its best from Ireland.

Brand loyalty is an important element of Guinness' brand equity. Brand loyalty reduces Guinness' vulnerability to competitors' actions. It allows the organisation to retain their existing customers without having to spend enormous amounts of finance on gaining new ones. Loyal customers provide brand visibility and reassurance to potential new customers, which again means Guinness does not have to use huge amounts of resources to get new customers. This is much a benefit to Guinness.

The perceived brand quality of Guinness' name itself stands for a certain level of quality in the customers mind. In cases such as with Guinness, customers cannot physically try the brand therefore make purchase judgements based on the brands reliability and perceived quality. As aforementioned, the myth is that Guinness tastes best from Ireland therefore when tourists visit Ireland, their perceived quality of Guinness increases as they are led to believe it tastes better in Ireland. There is no evidence of this being true, it is merely just opinion. However, until it is tried and tested by the consumer, they rely on other people's opinions. 

Brand associations significantly contribute to a brand's equity. The purpose of this is to connect a brand with a lifestyle, or in some cases a personality type. For example, Guinness beer is associated with having a bitter taste with a barely/malt flavour whilst being heavy and creamy. It is also one of the main things associated with Ireland. This sets it apart from competitors' products

References:
1) Bennett (2016) Definition of ‘Rebranding’ - the economic times. Available at:      http://economictimes.indiatimes.com/definition/rebranding (Accessed: 10 November 2016).
2) Dibb, Sally; Simkin, Lyndon; Pride, William M. and Ferrell, O. C. (2012). Marketing: Concepts and Strategies (6th ed.).London: Cengage.

3) Guinness® – beer made of More™ Available at: https://www.guinness.com/en-gb/ (Accessed: 11 November 2016)
4) Suttle, R. (2016) "What is a product mix?", Small Business Chron