Diageo Marketing Paper

by Flexremovalists1 | studymode.com

Maintaining Market Leader Status in the AusTRALIAN

PRE-MIX market

PREPARED BY: Michael York Head oF Innovation and NPD

Prepared For: Executive Management

1.0Executive Summary3

1.1 Introduction to the Firm3

2.0Product Selection4

2.1Product Innovation Charter (PIC)4

2.2 Phase 1-3: New Product Development Process5

3.0Market Analysis7

4.0Phase 4: Development9

4.1Full Product Protocol Statement9

4.2Design and Development11

4.2.1Technical Tasks11

4.2.2Marketing Tasks11

4.3Product and Market Testing12

4.3.1Recommendations13

5.0Phase 5: Launch and Commercialisation14

6.0Reference List17
Alcopop tax increased drink sales: distillers17

7.0Appendices18

7.1Appendix A Survey18

7.2Appendix B Stage Gate Process19

7.3AppendiX C Product Benefit Layers20

Executive Summary

1.1 Introduction to the Firm

Diageo is the world's leading premium drinks business with an outstanding collection of
beverage alcohol brands across spirits, wine and beer categories. These brands include:
Smirnoff, Johnnie Walker, Captain Morgan, Baileys and Jos Cuervo.[1]

Here at Diageo we hold an enviable position of market leader for a variety of spirits and
ready-to-drink (RTD) beverages. This market leader status has been earned through our
strong corporate values of:

- Passion for our consumers: This is in a truly global sense as we produce products for over
180 countries around the world.[2]

- Valuing each other: It has been vital to ensure strong loyaltys and relationships amongst
all stakeholders.

- Allowing ourselves the freedom to succeed: We trust each other, we are open and seek
challenge, and we respond quickly to the opportunities this creates.[3]

- Pride in what we do

- Striving to be the best

These corporate values provide the blueprint from which the company has grown and from
which our corporate strategies have been formulated. Our values summarise our mission in
business; to ensure that from innovation and continual improvement we continue to provide
value for our customers and stakeholders.

Our corporate strategy is the communication of these values and are summarised in four key
areas:
- Driving brand growth: By diversifying across all product opportunities within specific
categories

- Focusing on priority brands: These global trademarks assist in driving brand growth during
other areas of diversification and innovation.

- Investing more resources into opportunities in emerging markets: This is vital in ensuring
Diageo maintains its market leader status into the future.

- Seeking out selective acquisitions: Those of which will assist in innovation, building brand
equity and add value for stakeholders.

From extensive market tracking of the Asia-Pacific region, the following concerns have been
raised regarding the Australian market:

The current period of economic downturn[4], depicted by low consumer confidence is

predicted to potentially worsen and must be monitored closely.

The new Rudd Government has also introduced a 70% tax increase on pre-mixed alcoholic
drinks.[5]

It is understood that competitors Independent Distillers are currently developing a sweet

RTD to combat our Smirnoff pre-mix range, utilising an alternative beer-extract ethanol, to
avoid the higher taxation rates.

Product Selection

2.1Product Innovation Charter (PIC)

The PIC (below) developed by Diageo senior management is a guide for all core business
units on the expectations and nature of innovation within the business.

|Background |Diageo is committed to consistent investment of resources in terms of

developing innovative alcoholic | | |beverages.[6] This PIC has been developed because of
taxation reform and economic uncertainty which has placed | | |market share in the RTD
industry at risk. | |Focus |As market leader in both spirit and RTD beverages in the Australian
market, Diageo has a continuing innovation | | |schedule to ensure market leader status is
retained. Diageo seeks to fill the gap in the market created by | | |environmental changes by
focusing on: | | |1) Renowned production technologies across several spirit and RTD
categories, with R&D skills to produce | | |slightly modified products of the existing superior
quality. | | |2) Brand equity and loyalty established over many years as well as the ability to
extend upon existing product | | |lines and processes to meet an increasingly price sensitive
market. | |Goals/Objectives |This project aims to achieve one main objective: | | |1) Fill a gap
in the market generated by taxation increases on RTD drinks to immediately increase market
share | | |by 10% in the RTD market. | | |With the long term goal of: | | |2) Becoming a clear
market leader in purchases made by 18-25 year old females, maintaining 25% market share
for| | |the duration of this alcohol taxation scheme. | |Guidelines |As with all new
technologies, efforts will be made to gain patent protection over new processes. While it is | |
|pivotal with all trend-specific innovation to minimise development time and time to market,
the products | | |quality must be of equal standing to current brands. |

2.2 Phase 1-3: New Product Development Process

|Phase 1 Opportunity Identification, Evaluation and Selection | |While in past competition in

the RTD market has been based primarily upon taste, reputation, alcoholic content and
price, due to the external | |mandate of taxation reform, all players in the market will have
lost significant market share to other alcoholic categories. This taxation reform | |has
effectively pushed many RTD beverages out of reach of our target demographic of 18-25
year old women due to greatly increased cost. From this | |external change in taxation a
need has arisen for a replica sweet RTD beverage at a significantly lower pricing point either
through lower cost | |structures or avoiding the new tax scheme. | | | |Diageos ongoing
corporate planning incorporates a strategy of new product development or line extension
every year. In recent times that strategy | |has been based on expanding profitable lines with
established brand equity in to new areas or exploiting new trends and opportunities in the |
|market, such as that created by the recent taxation reform. | |Due to the serious implication
of this taxation reform on RTD sales[7], it has been decided as a matter of urgency that a
substitute product is | |developed to regain lost market share and sales. | |Phase 2
Concept Generation and Evaluation | |Due to Diageos extensive experience in the alcoholic
industry, it already has many well developed processes, technologies and personnel to |
|facilitate problem based ideation[8]. To ascertain what particular problems customers were
facing in the market both internal expertise from | |employees was sought as well as through
interview, focus groups and observation of those in the target market[9]. From these various
forms of | |ideation a pool of the key issues were established: | |- Obvious issue of price: The
target market of 18-25 year old women is extremely price sensitive due to relatively low |
|disposable incomes | |- Some reluctant to simply convert to full sized spirit bottles and mix
own drinks as enjoyed the convenience of pre-mix beverages | |- Lack of a beer equivalent
for women in terms of price | | | |From this refined pool of problems it was necessitated that a
new product similar in description to RTDs needed to be produced at either a | |drastically
reduced price (which would cut into profit margins), or in such a manner as to avoid the new
tax regulations. | | | |Based upon the requirement of avoiding the pre-mix spirit tax, R&D
began work on possible applications of new or modified production processes, so | |as too
differentiate the type of alcohol produced. It was decided that a process being trialed in
Europe, which stripped many of the beer tasting| |characteristics from beer in the
production process, provided a neutral canvas from which to build flavoured RTD me-too
products, the only | |difference being they would be taxed at the far lower tax rate for
beer.[10] |
[pic][11]

|Phase 3 Project Evaluation and Product Description | |The decided product range will be
known as Fusion, the concept based upon fusing a new production method with the same
great flavor ranges of | |other Diageo pre-mix spirits, but priced at the same pricing point as
premium beers; $40-50 per carton. | |The Fusion range will rival what is known to be a
similar type product; Bolt currently awaiting launch from Independent Distillers. The Fusion |
|product range will include five flavours; raspberry, passionfruit, pineapple, melon and guava
and will retail for $40-$50 per carton of 330ml | |bottles, above is a sample of what the
Fusion bottles will look like. |

Figure 2.1 Sample Product Design

These initial three phases of the NPD process are known as the fuzzy front end, in that
specific technical details are scarce, which minimizes the accuracy of evaluation. At this
point there is an evaluation point or gate as it is known in the Stage-Gate process (see
Appendix A), from here the decision has been made to undergo Market Analysis.

3.0Market Analysis

In justifying the existence of a potential market for this product, market analysis has been
undertaken to ascertain the total consumption figures of RTD beverages prior to and after
the taxation reform. This justification of the potential market is essential before proceeding
with the NPD process.

External research has indicated that sales of RTD drinks have dropped significantly
compared to the same period last year[12]. Figures released in regards to RTD and spirit
sales since the taxs introduction have been indicating the expected trend away from RTDs
to hard spirits[13], while this is steering market share from one of our brand categories to
another, it is one in which we have far lower profit margins.

It has been shown that there has been a mass exodus in terms of RTD purchases[14] since
the tax increase. In terms of the potential market for Fusion beverages, 2007 ABS
figures[15] show there are approximately 1.2m women aged 18-25, which is the primary
demographic for Fusion beverages and also approximately 1.2m males aged 18-25, which is
the second target demographic.

The ATAR (Awareness-Trial-Availability-Repeat) model was used to assist in sales and profit
forecasts based upon the potential market figures. The ATAR model is a basic framework for
forecasting and while vulnerable to fluctuations in the numerous variables, it is based upon
solid assumptions and hence valuable as an indicative guide.
Before using the ATAR model (over the page) the potential market was more accurately
defined[16]:

1. Approximately 80% of the 1.2m females in the primary demographic are potential RTD
drinkers 1.2m x .80 = .96m

2. Approximately 35% of the 1.2m males in the primary demographic are potential RTD
drinkers 1.2 x .35 = .42m

3. Total potential market (P) = .96m + .42m = 1.38m

|ATAR Stage |Measure |Proportion of Population | |Awareness (AW) |Percentage of potential

pre-mix drinkers Diageo can make aware of |85% | | |Fusion within the first year after release
| | |Availability (AV) |Percentage of aware market which will have Fusion be made available
to|90% | | |them | | |Trial (T) |Percentage of aware market who will then trial Fusion |40% |
|Repeat (R) |Percentage of repeat users |80% | |Margin (M) |Selling price unit cost (at
intended volume) |$36-$8 = $28 | |Profit Contribution = P x AW x AV x T x R x M = 1.38m x
.85 x .90 x .40 x .90 x 28 | |= $10,641,456 |

Figure 3.1 ATAR Model

4.0Phase 4: Development

This fourth phase of the NPD process is where the main body of effort is commenced, after
deciding to develop the product discussed in the first three phases or fuzzy front end, more
concrete research is undertaken as technical teams commence prototype development,
early financial plans are developed and marketing begins the extensive marketing plan for
the new product.

4.1Full Product Protocol Statement

|Target Market | |Ultimate: Females aged 18-25 | |Intermediate: Males aged 18-25, switch
from beer or hard spirits | |Product Positioning | |Convenient, standardized alcoholic content
at premium beer prices (hence undercutting current RTD prices). | |Product Attributes | |-
Taste characteristics of existing pre-mix vodka varieties, to target the lolly water[17] market,
fruity flavoured beer alternative | |- Variable alcoholic content to target both responsible
drinkers and those looking for higher alcoholic content[18] | |Competitive Comparison |
|Intense: | |- Beer for male drinkers | |- Existing RTDs, although a higher price, they have
existing brand loyalty | |- Wine based alcopops which also avoid spirit tax rate[19] |

Diageos product protocol statement is a description of how each key functional area of the
business will interact in order to deliver both the core benefits and augmented attributes
expected by consumers in the formal product. The product protocol statement assisted in
identifying these augmented attributes as depicted in Appendix A: Layered Product
Offerings. The protocol is vital in ensuring all functional areas of the business are aware of
their part in the product development process, this will facilitate the integration of all business
areas and a more complete understanding of the specific product deliverables. The Fusion
product protocol statement can be seen below:

|Augmentation Dimensions | |- Convenience; easy to drink, no mixing required | |- Value;

undercuts direct competitors prices | |Timing | |- Window of opportunity is only open as long
as tax remains unchanged, but due to mounting pressure from lobby and other political |
|groups[20] the window of opportunity for introduction would only be within the next 3-6
months. | |- Strong urgency to get the product to market immediately | |Marketing
Requirements | |- Series of press releases advocating new product | |- In club promotions at
nightclubs in all major cities | |- Dedicated marketing team to ensure the product launch
receives maximum exposure | |Financial Requirements | |- Range expected to break-even
within first six months after launch as product line will be operating on the same profit
margins as other | |RTD lines prior to the new tax, those of which will not affect Fusion | |-
Generate 10% net profit by the end of first full year on the market. | |Production
Requirements | |- Quality standards of existing brand lines must be met | |- Speed to market
is key and must be the central focus in all production processes | |Regulatory Requirements |
|- Alcoholic content must be under 7% to ensure no additional alarm bells are triggered in
regards to dangerous alcohol levels. | |- Source of alcohol must be purely from un-hopped
beer in order to avoid spirit tax. | |Corporate Strategy Requirements | |Corporate strategy
and executive management are the driving forces behind the Fusion project and are
ultimately responsible for reclaiming| |market share in the RTD market from losses to beer,
wine and hard spirit categories. We seek to regain market share in this beverage | |category
due to the higher profitability margins associated with RTD beverages. |

|Potholes | |There are numerous potential potholes, the most worrisome being: | |Changes to
taxation legislation prior to the products launch. | |Economic recession, forcing disposable
incomes lower and potential customers directly to hard spirits | |If any production or launch
delays are experienced, Diageo may lose first to market advantages |

2 Design and Development

There are two vital components to the success of this product and both of these relate to
developmental stages, it is of primary concern that the technical aspects relating specifically
to the final product characteristics are of equal taste and quality to the products we are
attempting to duplicate. In achieving this it is also of equal importance that this promise of
the same taste and quality at a greatly reduced price is communicated effectively from a
marketing perspective to overcome any issues of perceptions that the product will taste like
beer.

1 Technical Tasks
The technical aspects which must be addressed in order to ensure success are:

- Ensuring that product quality is equal to or better than key competitors; UDLs and Vodka
Cruisers.

- Producing product in a timely fashion, so as too minimise time to market.

- Keeping production process costs to a minimum so as too ensure the competitive

advantage of low- price is maintained.

These vital tasks will be facilitated through the use of computer aided design (CAD) and
computer aided manufacture (CAM) which allow for multiple revisions in terms of production
techniques and will ultimately produce superior prototypes for testing and ultimately will
result in the most cost-effective production process and final product.

These technical tasks are a rolling evolution[21] of prototypes, testing and revision and the
main concern is attempting to come to a final prototype which tests well in a short time
frame.

2 Marketing Tasks

In terms of marketing it is vital that all function areas are aware of a clearly defined target
market and the subsequent positioning of the product which will meet the needs of the
market.

Target Market: The primary demographic for Fusion beverages are 18-25 year old women,
with a secondary focus upon converting male beer and pre-mix drinkers also in the 18-25
year old bracket.

Product Positioning Statement: Buyers in our target market should purchase Fusion
beverages rather than competitors products because Fusion will be of an equally high quality
as competitors products at a far lower cost.

Other marketing tasks to be commenced include establishing elements of the marketing mix
and distribution strategy, which will be discussed in further detail in Section 5.0: Launch and
Commercialisation.

3 Product and Market Testing

|Scenario Number |Scenario Purpose |Results |Recommendations | |1) Blind Taste

compared to|To ascertain without any |Best Taste: |Based on these findings it appears that
Fusions flavor| |competitors |prejudice which product had the|1) Vodka Cruiser |is of a very
high quality and placed well from a taste | | |most appealing taste. |2) Fusion |perspective in
the current market. | | | |3) UDL | | |2) Explanation of product |To establish whether
customers |Best Taste: |It appears that subconsciously some group members were | |(beer
extract technology) |taste for the product would be |1) Vodka Cruiser |unable to overcome
the beer essence of the product. | |and Taste Test |affected, knowing that in |2) UDL |This
will be an issue for marketing to overcome. | | |essence it is a beer. |3) Fusion | | |3)
Purchase decision at |To determine if customers will |80%: Yes |This justifies the product
development process selected| |$45 per carton |be interested in buying Fusion |15%: No but
yes at a |and establishes that consumers are willing to purchase | | |at the current price.
|lower price |the product at a far lower pricing point and are happy | | | |5%: No, prefer to pay
|with its quality. | | | |premium | |

After the technical department has provided the marketing department a final prototype it is
ready for product use testing[22]. In this case potential customers were provided samples of
the product in focus group rooms, the scenarios, results and subsequent product
amendments are detailed below in Figure 4.3.1:

Figure 4.3.1 Product Usage Test Scenarios

4.3.1Recommendations

From the product use testing phase this urgent recommendation has been made:

1) The product is a success from a physical standpoint, respondents rated the product highly
as a stand-alone product and also in blind-taste tests relative to main competitors. However
when given a full explanation and introduction to the product, some respondents rated the
product lower in terms of both taste and likelihood to purchase. This indicates that the
product specifics will be an issue for marketing from both a positioning and promotion
standpoint. It would be recommended that research into product labeling is undertaken in
order to produce the most effective manner of marketing Fusion.

5.0Phase 5: Launch and Commercialisation

In this launch phase the decision to market the Fusion beverage line has been confirmed in
the final go decision after the product trialled well and both marketing and technical
departments impressed top-level management.

Because of the extremely positive feedback for the product in the product usage testing
phase, the decision has been made not to undergo market testing, but instead launch the
product nationally with a full-scale national promotional campaign, which is detailed in the
marketing mix below:

|ELEMENT |LAUNCH PHASE |6 MONTHS POST LAUNCH | |Product |- The product will be
launched in a range of five |- Desire to extend the product range, providing | | |flavours;
raspberry, passionfruit, pineapple, melon and |taxation scheme is still the same, this would | |
|guava |include juice based flavours. | | |- The product will be sold in both four packs and
cartons |- Extension of the product line into a higher | | |of 330ml bottles |alcohol version of
Fusion Plus. | | |- Product positioned as Alcoholic Soda. | | |Price |4-Pack: $8.99 RRP
|Maintain current pricing schedule for both Fusion| | |Carton: $44.50 RRP |and new juice
range, but also introduce Fusion | | | |Plus range: | | | |6-Pack: $14.99 RRP | | | |Carton:
$59.99 RRP | |Promotion |- National TV and Print campaign (advertising) |- National TV and
Print campaign (advertising) | | |- Guest appearances by CEO, due to public comment and |-
Lots of signage, promotion and specials from | | |focus on Alcopop Tax (publicity) |key
distributor chains e.g. 1st Choice, Dan | | |- Strong night-club presence, with free product
samples |Murphys, BWS. | | |(sales promotion) | | |Place |Intensive distribution strategy, all
major liquor |Expand reach of the product by offering it at | | |retailers in Australia and a vast
majority of night clubs |smaller bottle shops as well as continuing to | | |through partnerships.
|push promotional dels with nightclubs. |

Figure 5.1 Marketing Mix

These elements of the marketing mix and also the decision to implement an aggressive
rollout schedule as opposed to undertaking test marketing have been decided on the basis,
that the product should receive trial relatively easily. This presumption is based upon the
product characteristics, of which there are five that influence how quickly a product will
receive trial[23]:

|Product Characteristic |Characteristics of Fusion | |1) Relative Advantage of the product |-

Same taste/high quality of competitors | |to competition |- Priced around 30% cheaper than
competition | |2) Compatibility with current product |- Users who enjoy both competitors and
our own lines of sweet RTDs will notice similarities in| |usage |flavour | | |- Because of this it
is incredibly easy for consumers to simply switch to Fusion due to price | | |sensitivity and
low brand loyalty | |3) Complexity: how easy is the product|- The product by its nature is a
one-time use consumer product, it is extremely easy to use for | |to enjoy? |anyone over the
age of 18 | |4) Divisibility: how easily can the |- Due to in-club sales promotion, 70% of our
target market who frequent nightclubs will have the| |product be trialled? |opportunity to
sample Fusion, within the first 3 months after launch. | |5) Communicability: how likely is the
|- Due to the very public and social drinking culture in Australia, Fusion will receive a high |
|product to be seen by potential users |level of exposure in public places to potential users |
|in public? |- This is combined with the strong sales promotion presence in night-clubs, will
allow potential| | |users to not only see, but trial the product also |

Figure 5.2 Product Characteristics

Due to the relative ease with which Fusion is expected to receive trial, it is anticipated
demand for the product will be self-driving, with an incredibly price sensitive market seeing
little or no difference between Fusion and the more expensive offerings of competitors.

It is vital to track product process, competitors challenges and environmental changes post-
launch and develop contingency plans to ensure Diageo is ready to face any potential
problems which may arise. Figure 5.3, over the page outlines some possible problems (and
their weighted importance) which may arise in the first 12 months after launch, the tracking
method designed to monitor those developments and the contingency plan in place in the
event they do occur.

|Potential Problem |(Likelihood/10) x (Severity/10) |Tracking Method |Contingency Plan | | |=

Importance/100 | | | |Taxation reform banning beer |L = 7/10, S = 10/10 |Environmental
scans and dedicated |Extension into wine based RTD products | |derived RTDs |I = 70/100
|external analysis team to monitor |through acquisition of low cost winery and | | | |political
environment. |vineyards in Australia or offshore. | |Competitor launches product |L = 9/10, S
= 7/10 |Environmental scans and close |Cut production costs by producing at larger| |at
lower cost |I = 63/100 |relationships with distributors to be|quantities, look at re-sizing bottle
and | | | |immediately informed when competitors|alcohol content so as too position the | | |
|products are launched |product at a lower price | |Fusion doesnt sell as well |L = 4/10, S =
7/10 |Distributor inventory levels and |Increase marketing effort by ramping up | |as
anticipated |I = 28/100 |sales analysis |sales promotion and advertising nationally |

Figure 5.3 Tracking Methods and Contingency Plans

6.0Reference List

Alcopop tax increased drink sales: distillers

Jessica Irvine Economics Correspondent

July 28, 2008

http://www.smh.com.au/news/national/alcopop-tax-increased-drink-sales-
distillers/2008/07/27/1217097059729.html

7.0Appendices

7.1Appendix A Survey

Interview e-mailed to 2000 university students (enticed with chance to win one of 10, $100
Myers vouchers), of which 800 responded.

Dear Students,
We are currently developing a new alcoholic beverage and would be interested in your
feedback as to which alcoholic drinks you usually consume. The survey should only take a
minute of your time and you have the chance to win one of 10 $100 Myers Vouchers. Your
feedback is greatly appreciated and all of your responses are completely confidential.

1) What is your age? 18-2021-2324-26

2) What is your sex?M/F

3) Do you drink any form of alcoholic beverages? YES/NO

4) If yes, do you generally drink:BEERWINESPIRITS PRE-MIX DRINKS

5) If no what do the majority of your friends consume? BEERWINESPIRITS PRE-MIX

DRINKS

From these surveys the following was ascertained:

97% of respondents aged 18-26 drink alcohol

90% of females prefer drinking spirits or pre-mix drinks

40% of males prefer drinking spirits or pre-mix drinks

These results were the basis from which the potential market was defined for ATAR
calculations.

7.2Appendix B Stage Gate Process

[pic]

The stage-gate process is closely aligned with the NPD process utilised during this report,
after each stage in the NPD process, there is an evaluation point, or a GO/NO GO decision
point which is identical to the gate in between each stage in the above process. It is timely to
remember that in reading and understanding this report, that while all phases are integrated
to an extent in order to advance the product development process, there are discrete stages
which require a decision to be made of whether to proceed or abandon the project.

7.3AppendiX C Product Benefit Layers

[pic]

-----------------------
[1] http://www.diageo.com/en-row/AboutDiageo/Diageoataglance/ (accessed June 12, 2008).
[2] http://www.diageo.com/en-row/AboutDiageo/Diageoataglance/ (accessed June 12, 2008).
[3] http://www.diageo.com/en-row/AboutDiageo/OurValues/ (accessed June 12, 2008). [4]
http://www.radioaustralia.net.au/news/stories/200805/s2251882.htm (accessed May 21,
2008). [5] Booze blitz: alcopop tax lifted by 70%,
http://www.theage.com.au/articles/2008/04/27/1208743339515.html (accessed [6] Diageo
has consistently released new product offerings, especially in the RTD category. In late 2007
the following launches were made; Smirnoff Raw Tea brand launching nationwide
including a new Green Tea flavor, Smirnoff Ice, Captain Morgan Parrot Bay portfolios,
Pomegranate Fusion and Pineapple Colada (http://www.diageo.com/en-
row/NewsAndMedia/PressReleases/2007/Press+Release+19April2007NewBrands.htm)
accessed June 22, 2008). [7] The figures released today compare monthly sales in April,
before the tax was introduced, and last month. The number of standard drinks of alcopops
sold slumped 30 per cent in that time. REFERENCE INFO IS REFERENCE NUMBER 1. [8]
Problem based ideation is .. seeking to solve the problem of .. [9] Crawford and Di
Bendetto (2008, 110).

[10] Packaged beer is taxed at $39.40 a litre of pure alcohol while ready-to-drink beverages
carry an impost of $66.70 a litre of pure alcohol.
(http://www.brisbanetimes.com.au/news/national/beerbased-alcopop-
launched/2008/09/15/1221330777809.html). [11]
http://img.alibaba.com/photo/10872450/Krueger_Ice_Pre_mix_Aclopop_Beverage.jpg [12]
Fairfax newspapers are reporting research that shows the number of premixed standard
drinks being consumed between May and July dropped by 7 million compared to the same
period last year. (http://www.abc.net.au/news/stories/2008/09/16/2365768.htm) [13] The tax
on alcopops is being defended, after the release of sales figures that appear to indicate
drinkers are being pushed toward hard spirits. Since the April tax hike alcopop sales have
fallen by 30 per cent - but bottled spirits have increased by 50 per cent.
(http://www.livenews.com.au/Articles/2008/07/28/Alcopop_sales_down_spirits_up_but_Roxo
n_says_its_all_in_the_seasons). [14] The number of standard drinks consumed each week
has fallen by 3 million since the alcopop tax rise, says a confidential report sent this week to
key players in the alcohol industry by the research group Nielsen.
(http://www.brisbanetimes.com.au/news/national/beerbased-alcopop-
launched/2008/09/15/1221330777809.html). [15]
http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/3201.0Jun%202002%20to%20Ju
n%202007?OpenDocument [16] Findings based on survey results (see appendix B)

[17] Lolly water refers to alcoholic beverages, specifically the type young women prefer to
drink, it is sweet so one can barely taste the alcohol content. [18] An equivalent to Smirnoff
Double Black which contains 7% alcohol or 1.9 standard drinks per bottle. [19] The Distilled
Spirits Industry Council predicted a new wave of ready-to-drink products would soon hit the
market, taking advantage of low wine taxes.
(http://www.news.com.au/heraldsun/story/0,21985,23636817-662,00.html). [20] Coalition
and five Greens members of parliament are threatening to block the tax being passed in the
Senate, as of yet it has not been formally approved. [21] Even when early prototypes look
good, they must then be tested, processed, have a pilot produced from that process and
finally the production scaled-up to the marketed product (Crawford and Di Bendetto 2008,
286).

[22] This is an essential part of the marketing ramp-up process as it assesses the physical
product amongst real customers, to ascertain if customers like the beverage and ultimately if
they would purchase it (Crawford and Di Bendetto 2008, 348).

[23] Crawford and Di Bendetto (2008).

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Core Benefit

Formal Product

Augmentation

- Convenience
- Value

- Ready-to-drink beverage

- Refreshment
- Intoxicant
- Flavour