Guinness: Bottling the Perfect Brand (Group Project)

NEEDS ANALYSIS

The consumption of beer and alcohol is interwoven throughout human history. Beer has been produced almost as long as bread has been. In Europe, during the Middle Ages, it was a good alternative to unsanitary drinking water because of the boiling process during brewing which eliminated most germs. Beer was also a good source of nutrients and food value (Yenne, 2007). The consumption of beer was not simply pleasurable, but was a necessary part of an individual’s diet. This notion of the nutritional benefits of beer is prevalent in the needs of the consumer until as late as the twentieth century. During the eighteenth century, many brewers including Arthur Guinness, the founder of Guinness, found that a new style of beer, porter, was growing in popularity due to its perceived nutritional values.

Porter originated in England in 1722. Porter is a dark, sweet style beer that is brewed in a manner similar to ale; except, it was blended with other types of beer. This darker and richer style beer became very popular at the time with the working class people especially the porters who worked on the Thames River docks from which the style of beer was named (Yenne, 2007). Consumer demand for porter was growing because of its affordability and perceived nutritional value. According to historians, “the thicker beer gave the porters a sense of extra strength to cope with their exhausting, dehydrating daily rounds, and it became an instant success” (Guinness, 2008, p. 111). Due to the strenuously daily routines of much of the working class, a strong and hearty beverage was necessary in order to provide energy, and its popularity continued to grow.

In addition, a heavier, thicker beer was desirable in Ireland during this time period because there were often occasions when alcohol was substituted for food. Some of the factors that contributed to the substitute of food for alcohol included periodic famines and fasting due to their religious beliefs (Pittman, 1962). The Irish working class needed a nutritional beverage that could provide similar nutrition as basic food. This illustrates another example of the necessity of a thick, cheap beverage among the working class.

It is also important to highlight that in the Irish culture at the time, it was believed that certain alcoholic beverages had medicinal value. It states, “Aqua vitae (distilled spirits) was first used in Ireland only as a medicine, considered a panacea for all disorders, and the physicians recommended it to patients indiscriminately for preserving health, dissipating humours, strengthening the heart…” (Pittman, 1962, p. 177). This notion of medicinal benefits extended into certain styles of beer including Guinness which was illustrated in one of the most famous slogans of the brand, “Guinness is Good for You.” (See Exhibit 2) “The slogan came against the backdrop of much anecdotal and media dialogue of implicit health benefits of Guinness stout, which is, in fact, high in iron and various other nutrients” (Yenne, 2007, p. 93). Irish citizens perceived that certain beverages provided a number of nutritional and medicinal benefits. Beer is a natural, filling, body-warming product that seemed to provide daily nutrition and perhaps medicinal value as well. Guinness capitalized on the real and perceived needs of the Irish citizens in order to establish itself as a leader in the porter category; however, in order to produce its product it would have to work at repealing the heavy taxation burden instituted by England first.

During this time period, porter was the most popular style of beer; however, local Irish breweries were not producing it. England dominated Ireland politically and economically. There were many tariffs in Parliament that favored English exporters which greatly disadvantaged local Irish businesses. For example, English revenue laws allowed English beer to be imported into Ireland on such favorable terms that it could be sold at a lower price than Irish brewers who had to charge more. This forced many local brewers to brew brown ales instead of competing with the popular English porters at the time. This caused the Irish brewing industry to suffer (Yenne, 2007, p. 11). This taxation resulted in forcing Irish brewers out of the competition because consumers were unlikely to pay a higher price for locally brewed porters. Consumers would benefit from locally brewed porters because the cost would be even lower; however, first Arthur Guinness would need to convince Parliament that repealing the taxation policy was in their best interest.

The taxation policy also resulted in bars more willing to serve English imported porter instead of Irish porter. “A new competitive product, porter beer, had arrived from England. From the Dublin brewers’ perspective, ‘if they raised the price of their ale, in the smallest degree, the Publicans would sell nothing but porter…The publicans were the brewers’ marketplace, of course, and porter was what they wanted; in turn, it was what their customers preferred. The demand was there, yet nobody was brewing porter beer in Dublin” (Guinness, 2008, p. 101). Bar owners needed to sell the product that was in high demand and would give them the most return on their investment; and unfortunately, due to the taxation policy it was English imported porter.

Another issue affecting affordability for the beer consumer was the access to and tax on water, an essential ingredient for the brewer. During 1773 to 1775, Arthur Guinness was in a dispute regarding water rights. The Dublin City Corporation (DCC) claimed that Guinness was using more water than which he was entitled. Guinness disagreed and pointed out that according to his lease, he was to be granted water “free of tax or pipe money.” In 1775, the sheriff and other parties attempted to physically cut off the St. James’s Gate water entirely. However, the story claims that Arthur Guinness entered the scene brandishing a pick axe which caused the sheriff and others to back down. The disagreement was settled 10 years later with Guinness leasing the needed water from the City of Dublin for £10 annually (Yenne, 2007, p. 20). Arthur Guinness was able to secure more water for free unlike other local breweries. Without Arthur Guinness bold standoff with local authorities, he would not have been able to provide his product at lower competitive prices which benefited the working class consumers.

Consumer needs during the eighteenth century were defined by function and affordability especially for the working class in Ireland. Beer consumption has a long history, but during the eighteenth century, consumer demand was shifting from general beer consumption to more specified needs including a more hearty and nutritional alcoholic beverage that could be a substitute for food when necessary and was perceived to provide medicinal value.     Guinness would capitalize on the consumer needs at the time of its introduction and remain a leader in its product category for the next 250 years by recognize and adapting to the changing needs of its consumers while maintaining its inherit strong, hearty and thick qualities.

TIMELY AND TIMELESSNESS ANALYSIS

During the eighteenth century in Ireland, there was a growing concern over the unhealthy levels of alcohol consumption. Spirits became very popular among the Irish poor, causing public drunkenness. During the 1790s, there began a political anti-spirits campaign which brewers including Arthur Guinness took advantage of. According to politicians at the time, “spirits were the destructive poison of the people and higher duties were essential to put them out of the reach of the mechanic and the labourer…By contrast, beer was ‘the natural nurse of the people entitled to every encouragement” (Guinness, 2008). This new anti-alcohol campaign was illustrated in more detail through the art of William Hogarth. In 1751, William Hogarth engraved two works of art, Beer Street and Gin Lane, in order to portrait the negative and problematic effects of the gin epidemic at the time and the alternative healthy pleasures of beer consumption (Nicholls, 2003). Beer with its perceived nutritional benefits and lower alcohol content was positioned as a healthy alternative to the evil effects of hard liquor. “In Beer Street and Gin Lane, drink and drunkenness reflect both the utopian conception of the city as the convivial hub of social and commercial life, and the dystopian vision of it as the irrational site of swarming humanity at its most excessive and degraded” (Nicholls, 2003). This shift in public perception of the benefits of drinking beer would extend well into the twentieth century. In 1794, the first advertisement of Guinness’s porter appears in the English Gentleman’s Magazine and depicts a working class man about to enjoy a pint of Guinness with the caption underneath which read, “Health, Peace and Prosperity” (Guinness, 2008). (See Exhibit 1) This helps to represent the timely shift towards a more favorable view of beer compared with hard liquor.

Despite the gin epidemic during the eighteenth century, drinking alcohol has always been closely associated with the sense of camaraderie and social connection especially in a pub environment. “Historically, in a proper pub everyone there is potentially, if not a lifelong friend… Camaraderie is expected. Alcohol builds a bridge between strangers” (Holland, 2007, p. 23). This was especially true in Irish culture and in Irish pubs. “What the individual does express and communicate to others by acts of convivial drinking in the Irish culture is his solidarity with certain groups within the social system” (Pittman, 1962, p. 184). Drinking alcohol and beer in a social environment provide a timeless sense of friendship and peace.

The term used to describe the unique and timeless spirit associated with the Irish way of social interaction is referred to as the “Craic.” “Within an essentialist vision of ‘Irishness,’ the ‘Craic’ became a form of social behavior that could (under certain circumstances and for certain groups of people) be admired and desired. It could also be seen to involve an identifiable series of social activities (music, song, talk), taking place in a particular place (the pub) and involving a particular product (alcohol)” (McGovern, 2002). It was this essence and sense of camaraderie that the Guinness brand wished to instill upon its drinkers around the world. Guinness has created a global Irish pub through their brand so that no individual drinking Guinness Stout can feel lonely. “The brand has been fundamentally associated with Ireland since 1759…as Irish people have traveled around the world, they want to hold onto that piece of Ireland, they want to hold onto something tangible. Guinness is a great connection with home. When an Irishman travels, he’ll always sniff out an Irish bar somewhere” (Yenne, 2007, p. xx). The “Craic” is a timeless sense of camaraderie and social connection for the Irish people, however, through its association with Guinness the brand it has been able to encompass anyone who enjoys the beverage.

At the time of the introduction of Guinness, its founder, Arthur Guinness, recognized the timeless values of drinking beer. This is clearly represented in the 9,000 year lease he signed for the brewery at St. James Gate in Dublin, Ireland which has remained in effect almost 250 years later (Yenne, 2007). Despite instances of social backlash against drinking which exists even today, drinking Guinness still represents a pleasurable connection with old and new friends.

SOLUTION

Since its beginning in 1759, Guinness has managed to be successful by growing and adapting to the changing needs of  its consumers. Arthur Guinness was able to pinpoint the  need of a beer much like the famous English porter for Irish consumers. Even though you could get porter in Ireland, the English porter dominated the Irish market while the Irish brewing industry suffered (Yenne, 2007). Convinced with the idea that he could offer a better beer, Arthur Guinness, an experienced brewer, came up with the solution of brewing an original Irish porter for the Irish working class.

At first he was only able to make ales due to English taxation policies; however, after they were repealed he was allowed to develop his own style of porter which eventually was renamed to a stout.  “The term stout was initially used to describe a strong porter or one with a high level of alcohol. A strong porter, thus, was a stout porter. It was later abbreviated to just stout” (Jorgensen, 1994, p. 231). The porter, developed first in London, “became instantly popular with working class people, especially the porters who worked on the Thames River docks” (Yenne, 2007, p. 12). What differentiated this new drink from the London beers was the use of unmalted roasted barley; this allowed Guinness to avoid taxes while making the stout taste more bitter (Jorgensen, 1994).

By 1799 the Irish porter became so popular that Arthur Guinness made the decision to completely discontinue the brewing of ale focusing only on porter (Yenne, 2007). Eventually, the Irish brewer was able to steal popularity from a category that he did not introduce. The way in which Arthur Guinness was able to improve popularity of his version of the porter was by highlighting the attributes that were important to the consumer at the time. First, he had been able to cut taxes that were prejudicial to the brewing industry, making the Irish beer a sought after product not only in its home country but in England as well. The middle class was also growing, thus increasing the size of Guinness’ target market. As mentioned before, the nutritive value of beer was recognized by “many people in the Irish society of the day, who saw [it] as a healthy alternative to higher alcohol (…) spirits such as whiskey” (Yenne, 2007, p. 23). Arthur Guinness provided a low cost, high in nutrition beer to the Irish working class.

In the subsequent years, Guinness was propelled by a power that would be hard to stop; after the founder passed away the family kept the brand growing and evolving. They imported the beer to more places, making it available in countries like Barbados, Canada and South Africa. In order to let consumers in other markets taste the Guinness as it was intended, they had to do changes to the product so the taste did not change with the many miles it had to travel to get there.

In addition, Guinness was even distributed to soldiers during times of war in order to improve troop morale. “Beer was considered valuable in keeping up the spirits of the troops, as well as those of the people on the home front” (Yenne, 2007, p. 112), and therefore the government allowed the stout to be sold at a discount or even free to soldiers. With just a pint of Guinness, soldiers could feel a little connection to friends and family back home.

After many years a new need arose: people wanted to be able to enjoy the Guinness experience everywhere. Due to this issue, Master Brewers for Guinness started working on a way to enable consumers to enjoy the experience not only in bars but in their houses; thus the Guinness Widget was born. The process of nitrogenation, created in the 1950s to solve the problem of slow sales, revolutionized the industry but was still hard to produce at any common pub or at consumers’ houses and in 1985 the In-Can System (ICS) was created. Through this new process “Guinness lovers at home could replicate the pub experience (…). To call the reception enthusiastic would be an understatement” (Yenne, 2007, p.189).  The Guinness widget, a unique new invention, demonstrates the lengths Guinness will go to in order to provide effective and relevant solutions to the ever-changing needs of their most loyal consumers.

Over the years, Guinness has demonstrated its ability of listening to its consumers, catching their insight, and helping them fulfill the needs they are experiencing at that point in time. Because of these efforts, the Guinness brand has been able to occupy an important position in the consumers’ mind 250 years after its inception.

POINTS OF PARITY AND POINTS OF DIFFERENCE

Although many elements differentiate Guinness from other beer brands, there are many attributes that make them comparable.  The product that Arthur Guinness decided to brew during the eighteenth century was a porter that comparable in taste and price to the English porters being brewed and imported to Dublin at the time.  “Like other porters, as well as ales, Guinness stout was brewed with malted barley, hops, and top-fermenting yeasts (…) giving the beer a roasted flavor. Appearing virtually black in normal settings, it was a deep, ruby red when held to a bright light” (Jorgensen, 1994, p. 231).

Additionally, like many beer brands today Guinness advertises the element of camaraderie surrounding the experience of the brand and it is one of the most important elements that people look for when having a drink and sharing it with friends.

The bottling process can also be considered another point of parity. In the early years of the Guinness brewery, the company produced the beer in barrels and distributed them to bottlers afterwards, outsourcing that part of the process. This made most of the beers from this time period packaged in a similar look; however, this did eventually create a problem for the Guinness brand since it did not control the labeling of its beer. Guinness would soon realize the need to establish its own labels and brand posititioning in order to create a lasting impression on the minds of the consumers.

“A pint of Guinness is a magic thing that rewards the palate as no other beer on earth” (Yenne, 2007, p. xiii); it is normal to hear such emotional comments when it comes to the black beer. Since its foundation, the Guinness brand has been intertwined with the Irish life and customs, making it different from other beers. The “Craic” way of life that the Irish so happily promote is one of the ideas that separate the Guinness brand from other beers.

The process of serving the beer is also an important differentiator of the brand. “The ceremony behind pouring a pint is essential to the consumer’s requirement for a perfect pint of Guinness” (Yenne, 2007, p. xv). This signature two-part pour is reason enough for the Guinness drinker to wait for his beer; although it takes more time the result will be more rewarding. The time it takes a bartender to serve a pint of Guinness is the same as serving 3 to 4 regular beers. The brand takes pride in the 119.5 seconds needed to pour the “perfect pint,” illustrated through the current well-known tagline, “Good Things Come to Those Who Wait” (Yenne, 2007). (See Exhibit 3) The serving of the beer is designed to be a ceremony bringing an element of uniqueness to it. The two-part pour creates a little ceremony for the Guinness drinker and helps establish a strong connection to the Guinness brand.

The bicentenary celebration of the Guinness brand marked a new moment of differentiation from other beer brands. People wanted a more consistent and long-tasting head on the beer and Guinness made it possible. By adding nitrogen to the beer, the company was able to create a thicker, creamier head at the top of the pint; at the same time an effect of bubbles coming from the top down amassed many consumers. The company wanted to alleviate the problem of serving the draught, which until the late 1950s was done by “mixing beer from two casks, a high cask above the bar and a low cask beneath the bar” (Yenne, 2007, p. 147) and which made the perfect pint difficult to achieve. Michael Ash led the “Draught Project”. And in 1959 the “Easy Serve” was launched, making the process of serving the perfect pint easier. Technical elements were revised and today the process is done in a single-part keg. “The nitrogen produces tiny bubbles that form the head when they are trapped by the surface tension of the beer…For Guinness, nitrogenation was the revitalization that contributed to the achievement of legendary status for the world’s greatest beer”(Yenne, 2007, p.150). The thicker, creamier head of a pint of Guinness demonstrates that Guinness the brand strives for perfection in each pint.

POSITIONING

One need not search long to discover the inordinate amount of passion that the Guinness brand has garnered over the years. This may be due in large part to its steadfast positioning. Much has happened since Arthur Guinness signed the 9000 year lease at St. James’s Gate; innovations have been made, and ad campaigns have come and gone, but little has changed in the beer itself and “even as other stouts rose to be successful, the taste of Guinness remained unique” (Haig, 2004, p. 204). The same is true for its brand positioning. It is this consistency that is reflected in the brand’s strong personality of Irish history and its positioning over the years.

A clear argument to this effect is simply the title of Mark Griffiths’s book about the Guinness brand: Guinness is Guinness. Such a title implies a question: what else could it be? This question is implicit throughout many writers’ perspectives on the brand. Griffiths writes about the ten steps Guinness took to “take its beer … out into the world [in] a battle for the very brand itself” (Griffiths, 2005), but Step 1 makes clear the strength of the Guinness brand: “Make One Thing Well.”And this is just what Guinness did. Stumbling upon the ingrained notion that “Guinness is Good for You” as it prepared to advertise for the first time in the late 1920s, it found something to hang onto. While the slogan did not last past 1937, an element of vitality and strength remains at the core of Guinness’s positioning today (Griffiths, 2005). Not only do advertising campaigns touch upon the theme of strength in some way, the tagline in current advertisements, “Good Things Come to Those Who Wait,” signifies the depth of the Guinness brand, a brand that has been around for almost a quarter of a millennium (and is still brewed at St. James’s Gate in Dublin), and the internal strength of a Guinness drinker at the same time.

As Guinness carries its long history on its shoulders, it carries its heritage. As Mark Ritson, a marketing professional and obvious Guinness devotee, summed up Guinness’s essence and positioning: “Guinness is, and always will be, the ultimate Irish stout” (Ritson, 2006).  The inherit link to Ireland is another key aspect to Guinness’s brand positioning. This is clearly reflected in the Guinness logo of the Irish harp. In 1862, the Guinness trademark label was introduced – a buff oval label with the harp and Arthur Guinness’ signature (Guinness & Co, 2008). The political symbol for Ireland is also the harp; however, the Guinness harp is displayed in the reverse. (See Exhibit 4). Perhaps this is signifies Guinness the brand as a mirror image to Ireland.  The symbol linked Guinness with Ireland, anchoring the brand to its Irish roots (Yenne, 2007).

Ireland and the Irish approach to socializing or the “Craic” is perhaps the most significant element to the brand positioning. According the Guinness website, “The Craic. It’s a spirit. An essence you can sense in a buzzing room, especially if that room is in a local pub in the heart of Ireland. The Craic is a GUINNESS® Draught, you and a few friends. The Craic is difficult to bottle, but somehow we’ve managed it” (Guinness website, 2008). No matter where you are in the world, a pint of Guinness will help give you the sense of camaraderie and close friends like no other beer can.

PUBLIC MESSAGES

On November 14, 2007, Mark Ritson wrote in Marketing magazine, “Guinness has become tragically enraptured in the whole business of advertising…Guinness is no longer a great Irish stout. It is a brand famed for its advertising.” He supported the claim with the assertion that in the last decade, Guinness “has suffered the worst sales slump in British history,” (Ritson, 2007) despite a critically-successful array of advertising campaigns. It is necessary, then, to determine what happened to Guinness’s public message since the company began advertising in 1929, and even before that, which might have caused the brand to “leave the rails.”

Before 1928, Guinness did not advertise largely because it was perceived that sales growth was sufficient and therefore advertising was not necessary. In fact, its brand was hardly coherent for over a century, with bottlers placing their own, little-regulated labels on bottles of Guinness. After London established a trademark registry in the 1860s, Guinness registered its harp logo and trademark label. In the 1890s, it imposed its trademark label on the entire Foreign Extra Stout trade.

Having found its way onto four continents as a popular stout through careful management of its production and distribution, Guinness decided to begin advertising in 1928 in order to increase brand awareness and brand equity. When its first advertising agency, S.H. Benson, toured Dublin to ask why people drank Guinness, they discovered a unanimous answer: “Because Guinness is good for you.” They then wrote to thousands of doctors in the United Kingdom for their thoughts on the matter, and discovered that the stout was prescribed for a large variety of ailments. Upon this news, Guinness “ran a furious campaign in Britain (one of its largest markets) with the slogan [Guinness is Good for You]… For many years a large portion of the British public took Guinness for medicinal purposes” (Haig, 2004, p. 201). This first message helped to reinforce the brand positioning of Guinness by adhering to the strength to be found in drinking a Guinness.

The illustrator John Gilroy created a number of posters with slogans such as “Guinness for Strength,” which depicted a man carrying an iron girder (See Exhibit 5), and “My Goodness My Guinness,” a series that included numerous whimsically-drawn animals, such as a toucan and a sea lion, making off with zoo-keepers’ glasses of Guinness (See Exhibit 6). The characters were incredibly popular, and not only can the posters be found in bars and on Guinness merchandise, but the toucan was reintroduced on posters for a brief period starting in 1979 (Griffiths, 2005). The campaign continued into World War II, with a press ad depicting British soldiers and a sign that read “Thousands are turning to Guinness for strength” (Guinness & Co, 2008). Newspaper ads of the time reflected this whimsical approach to advertisements and, like the posters, treated the Guinness brand as something wholly unique (Guinness & Co, 2008). This helped to cement the brand positioning of frivolity and strength.

Building on the popularity of Gilroy’s whimsical animal cartoons, Guinness ran a number of television ads in the 1950’s based upon the same premise. Some were live-action and featured re-enactments of scenes from the posters, and some were cartoons – each was laden with slapstick charm and goofy sound effects, but these ads departed from the core established value of strength inherent in the Guinness brand. As the years progressed, however, television spots became more intricate, maintaining their whimsy but reinserting the brand’s vitality. Noticing a discrepancy in ad messages – appealing in an inconsistent manner – brought about the “Pure Genius” campaign and the introduction of Rutger Hauer as John Priest, a character in a number if 1980s Guinness television spots. The John Priest ads were inspired by “The Death of a Salesman” and the Twilight Zone and took whimsy to a new level, creating surreal environments in which Priest spoke directly to the viewer. Between 1987 and 1994, these ads boosted Guinness’s share of the market to its highest in 20 years (Griffiths, 2005). The “Brilliant” campaign likely stemmed from this same concept and humorously touted Guinness’s unique traits.

In recent times, Guinness has won many awards for its television advertisements, which have become more extravagant, more whimsical, and less about the product. Yet many of these ads have been clearly aligned with the positioning of the Guinness brand. The posters, more heavily designed, less cartoony, have shown a wide array of styles and images, but their slogans, 70 years after Guinness first began advertising, are distinctly on-message with taglines like “A strength that speaks for itself,” “Cool. Calm. Collected.”, “Strength of Character,” and, most recently, “Guinness refreshes your spirit,” which shares a clear connection to the original Guinness slogan, “Guinness is Good For You.” And reflects the spirit of the “Craic.”

It is these ads, however, that led Mr. Ritson to accuse Guinness of departing from its brand and getting lost in its own advertising. Yet if one examines the television advertisement, “noitulovE,” for example, in which three friends take a sip from their pints of Guinness and then proceed to rewind out the bar and into a backwards-moving, abridged version of the history of the planet, devolving into cavemen, surviving an ice age, and eventually turning into lizards who sip mud-water before the tagline “Good Things Come to Those Who Wait” appears on the screen, one will notice several things consistent with the image. The first is the extravagance of concept for which Guinness has developed a reputation, and the fancifulness that it displays has been inherent since Guinness first began advertising. Strength, a part of Guinness’s core positioning, has developed over the years and is clear in this ad as strength of character, or endurance. Guinness customers, the advertisement implies, are the kind of people who know what they want and are willing to endure what they must to achieve it. Interwoven with this concept of waiting is Guinness’s long history – not only is the drink one that must be poured slowly, but it has literally been hundreds of years in coming. This also can be linked to Irish history with the Irish people having to wait for their independence until as late as the twentieth century.

Mr. Ritson seems to have been distracted by the extravagance of the latest Guinness ads. Here is not the place to criticize the artistic direction of an advertisement, but based on its content and style it would appear that Mr. Ritson is overreacting – a brand as unique as Guinness may deserve advertisements just as unique, if they convey the brand properly. Ads like “noitulovE” enhance the Guinness brand instead of eroding it.

DISTRIBUTION ANALYSIS

While it was not until 1756 that Arthur Guinness became a commercial brewer, just a few years later in 1759, the Guinness brand was able to attract international consumers. Since, the brand has gained consumer recognition through a vast number of distribution channels, brewing in nearly fifty countries and exporting to 150 countries (See Tables 1 & 2). With global brand awareness, the Guinness beer is recognized as the number one stout in the world (Diageo, 2008).

Although it is evident that the Guinness brand is presently an iconic symbol in the beer industry, it is important to address how the distribution has influenced its current position and brand value. Prior to the acquisition of the brewery at St. James Gate in Dublin, construction began that would ultimately connect Dublin with the River Shannon as well as the city of Limerick. Subsequently, Guinness was able to be easily transferred across Ireland, setting the scene for exportation in the 250 years to come (Yenne, 2007).

In regard to raising awareness outside of Ireland, “[e]xpansion into foreign markets was spearheaded under the guidance of Arthur’s three sons who succeeded him in the family business” (Diageo, 2008). Notably while under Arthur’s son’s leadership after 1803, as early as 1816 in London, bottled Guinness became competitive with domestic English brews; Arthur’s son is also attributed with increasing the breadth of distribution to consumers anywhere from the Caribbean Islands to Sierra Leone (Yenne, 2007). In 1886 while under the management of third generation of Guinnesses, Guinness went public as a London-based firm (Hoovers, 2008). By the end of the 1800s, Guinness was recognized as the largest brewery in the world and appeared on the London Stock Exchange. At this point, exporting and licensing enabled the distribution of Guinness to spread into markets beyond Europe including America, Australia and Africa (Diageo, 2008).

The early labeling and bottling methods used by Guinness impacted the brand’s awareness or lack thereof. Surprisingly, Guinness was not responsible for bottling its own beer until the mid-twentieth century, as it was typical for brewers in Ireland and the United Kingdom to ship their beers to independent bottlers. After packaging, the bottlers often would take on the role of exporting or distributing the finished product. Although this method was efficient for Guinness, most bottling firms were using their own separate trademark brand on the Guinness brew. “Though Guinness adopted a label design in 1862, most of the Guinness sold in bottles for nearly a century thereafter was sold under other labels” (Yenne, 2007, p. 44). Although many bottlers’ labels recognized the Guinness brand somewhere on their label, this was not mandatory. Naturally, without crediting Guinness, customers may not have associated the brand as their favorite stout (Yenne, 2007).

By 1962, in an effort to maintain a consistent product and brand image across foreign markets, Guinness created a secret ingredient called the Essence. “Imagine it as the concentrated spirit of Guinness. It amounts to just 2% of what makes it into the bottle, but enables [Guinness] to reproduce the unique flavor and absolute quality of Guinness Foreign Extra Stout right around the globe (Guinness Web site, 2008).” Throughout this decade, the company shifted its goals for the brand; instead of brewing the perfect pint, Guinness sought to extend its distribution further around the globe in order to increase awareness of the “essence” of the brand. Breweries were being established and licensing agreements were being made in an attempt to achieve the goal of increased distribution.

During the 1970s, Guinness was shaping into what appeared to be a global corporation (Yenne, 2007). Guinness acquired over 200 companies during this decade; although extending the brand portfolio was opportunistic, the focus on revenue over brand value presented high risks (Hoovers, 2008). Acknowledging these risks, in the 1980s Guinness focused exclusively on brewing and distilling, selling acquired but unrelated companies (Hoovers, 2008).

In 1997 at $19 billion, Guinness merged with Grand Metropolitan to form Diageo (Hoovers, 2008). Upon the establishment of Diageo, the major companies and brands among the two global giants were divided into four isolated categories: The Pillsbury Company, Burger King, Guinness, and United Distillers & Vintners (Hoovers, 2008). As Guinness learned prior to the merge with GrandMet, while increasing product categories may generate a greater profit, the ultimate goal is to add brand value. Noticing the lack of congruence among food and alcoholic beverage brands, Diageo sold highly valued food brands such as Burger King and Pillsbury in an effort to add value to the alcohol brands including Guinness (Hoovers, 2008).

Focusing strictly on the beer, wine and spirits industries proved to be a wise move for Diageo, as it became a leader of premium beverage distribution worldwide. “The company produces eight of the world’s top 20 spirits brands. It is also one of the few international beverage companies that spans the entire alcoholic drinks sector, offering beer, wine, and spirits” (Hoovers, 2008).

The distribution of a brand requires careful consideration; the product needs to be in harmony with the place. Premium beverages like Guinness need to meet the needs of the consumers in that location. Today, the extensive distribution of the beer itself has enabled the brand to gain attention from markets worldwide. In addition to purchasing the perfect pint at a pub, or buying Guinness bottled or canned, the brand also has gained distribution through direct channels such as the internet store or the St. James Gate Brewery Storehouse, where Guinness branded merchandise is sold. At the present Guinness’s top five ranked global markets include the following, in descending order: Great Britain, Nigeria, Ireland, United States, Cameroon (Diageo, 2008). Although geographically the top markets that Guinness reaches are quite scattered, the appreciation for the consistent taste and value of the brand is common.

PROMOTIONS AND MERCHANDISING STRATEGIES

As time goes by, Guinness geniuses have created many famous promotion and merchandising campaigns that not only add value to the brand positioning but also support delivery of the brand’s public messages.

Supplementing the advertising efforts, Guinness Festival Clocks with Gilroy’s animal characters were constructed for Guinness to contribute to the Festival of Britain in 1951. The characters became a hit upon introduction and were borrowed for retail promotions; they toured across continents until 1966, providing customers worldwide with knowledge of the Guinness brand (Yenne, 2007).

Arthur Fawcett created great publicity for Guinness, which helped promote the brand. The most outstanding achievement was his ambitious “Bottledrops” of 1954 and 1959, described as “the world’s longest running advertising promotion” (Yenne, 2007). He put messages from a Guinness booklet into 50,000 bottles and cast them into the ocean, which flooded to the Philippines, South America and the West Indies. The numerous discoveries made headlines around the world, certainly underscoring the Guinness brand name (Yenne, 2007). This supported the Guinness brand positioning of connecting individuals and socializing even across vast oceans.

Fawcett implemented a number of quirky promotional activities during the 1950s which created publicity for the Guinness brand at the time. In 1956 when gasoline rationing was introduced in England during the Suez Crisis, Fawcett bought a horse and cart, which soon became popular with the media (Yenne, 2007). In 1958, he acquired 250 surplus gas street light posts from the Liverpool city council and gave them away to residents of Liverpool living abroad who suggested ways to expand sales of Guinness (Yenne, 2007). In time, more people abroad were becoming familiar with Guinness, eager to buy Guinness beer and enjoy the unique Guinness experience.

The Guinness Book of Records inadvertently turned into a brand-building campaign of unprecedented proportions during the 1950s. The idea came from Sir Hugh Beaver, the Managing Director of Guinness, who discussed with friends which game bird flew the fastest. This gave him the idea of compiling a “fact” book (Guinness & Co, 2008). Originally conceived of as an inexpensive giveaway item in pubs and first published in 1954, The Guinness Book of Records reached the top of the British best-seller lists by the Christmas after publishing, impressively being published in August 1954 (Yenne, 2007). The biggest selling copyrighted book in history, it brings the Guinness brand name all over the world, drawing attention from Guinness lovers. By introducing this booklet to solve basic questions that arise during pub conversations, Guinness was further cementing their brand as a provider of solutions for pub goers and beer drinkers.

In 1984, the Guinness Hop Store, the old hop storage warehouse at St. James’s Gate, was restored and opened as the visitor center (Yenne, 2007). Since the turn of the 21st century, Guinness aficionados who have made the pilgrimage to St. James’s Gate have been welcomed at the Guinness Storehouse, the home of Guinness. The storehouse is Ireland’s biggest visitor attraction now, serving three million visitors in its first five years (Yenne, 2007). Here, visitors learn about the four ingredients to make a perfect pint, the brewing process, the history of the company, and the advertising campaigns while enjoying a free perfect pint of Guinness at their infamous gravity bar which overlooks the city of Dublin. The spectacular sights and fantastic experiences bring Guinness lovers closer to the core value of the Guinness brand. It represents a single place for Guinness drinkers to come home to where they can immerse themselves in the camaraderie and history of the brand.

Guinness also developed several historically important and memorable consumer relations programs. In 1994, Guinness launched the Perfect Pint Initiative, consistently conveying the brand’s theme that the consumer should get a perfect pint every time. The “trade and bar staff education” program was launched, aiming to correctly serve every pint. The Guinness Guild direct mail service brought technical and promotional information in five languages to the owners of 1,500 establishments serving Guinness (Yenne, 2007). Informed and satisfied beer servers would then be involved to satisfy consumers’ needs, trying all means to add brand value to consumers. The Irish Pubs Initiative helped people open Irish pubs around the world, successfully meeting consumer awareness initiatives (Yenne, 2007). These various initiatives remained in line with Guinness’s core brand value of providing the perfect pint to their consumer and creating enjoyable, welcoming pub environments around the world.

EXTENSIONS

Out of the 250 years of Guinness history, there have emerged several product and brand variants. Yet, the core value of the Guinness brand remains consistent. “Guinness is, and always will be, the ultimate Irish stout” (Ritson, 2006).

The Guinness brand has three principal product variants – Guinness Foreign Extra Stout, Guinness Extra Stout and Guinness Draught – and several product extensions targeting specific segments. There have also been several product variants under new brand names. Moreover, the Guinness brand itself has also extended into fields besides beer. These extensions have enhances the brand because they remain true Guinness’s core brand values.

In 1799, when Irish porter became popular, Guinness discontinued ale production to brew porter exclusively. The types of porter included Town Porter, Country Porter, Keeping Porter, and Superior Porter (Yenne, 2007). In 1801 Guinness began to brew West Indies Porter, a true precursor to Guinness Foreign Extra Stout. In 1821, Guinness Extra Superior Porter, the antecedent of today’s Guinness Extra Stout, came into being. Foreign Extra Stout was for distant markets, and Guinness Extra Stout was for domestic markets in Ireland and Great Britain (Yenne, 2007). Both Guinness Foreign Extra Stout and Guinness Extra Stout are currently brewed; this illustrates the consistency of the Guinness brand, but also presenting the undiminished preference from Guinness lovers.

In 1959, Guinness Draught was introduced for the first time (Guinness & Co, 2008), benefiting from the invention of the nitrogenation process, which revolutionized the Guinness brand and made the elusive perfect pint more attainable at local pubs (Yenne, 2007). It takes 119.5 seconds to pour the perfect pint, with a bit of craft, and a bit of theater. Bartenders do this in a passionate way, delivering an extraordinary experience to the customer. “Good Things Come to Those who Wait”, and it worth the wait. Guinness will drink with eyes first, and the bonus is in the complexity and balance of the flavor. Later Guinness Draught in Cans and Guinness Draught in Bottles were introduced, bringing the extraordinary experience to home.

In 1960, Guinness began to brew lager because the popularity of lager was growing rapidly. On deciding the brand name, Guinness references its own logo and named its lager “Harp” (Yenne, 2007). From this, customers can easily associate the lager brand with Guinness, as opposed to just a new lager in the Irish market. Yet the company did not name it “Guinness Lager,” as the principal products of Guinness are the ultimate Irish stouts. This added to the unique positioning of the brand, thus strengthening it. The Guinness stouts are variations on a single brand, while Harp Lager, Smithwick’s Ale, and Kilkenny Irish Cream Ale are separate brands that are under the same umbrella (Yenne, 2007). Guinness does not dilute its brand through these extensions because of its careful consideration of the Guinness name not being associated with these different styles of beer.

Several product variants were introduced to target specific segments. A sweeter type of stout was designed for the Belgian market and was sold in most European countries. In Africa, Guinness Flavor Extract was brewed to reproduce the exact flavor of Dublin-brewed Foreign Extra Stout. In 1968, Guinness Malaysia began brewing a lager called Gold Harp—known locally as “Goldie.” During 1983, Guinness responded to a trend within the brewing industry toward low-alcohol and non-alcohol products by launching its Kaliber. In 2007 Guinness Red, a more ale-like product was test-marketed (Yenne, 2007). These variants added flavor and satisfaction that consumers could not find in existing beers. This also represents Guinness’s ability to respond to the changing preferences of the consumers while maintain their core brand values.

The Guinness brand has also extended into other fields besides beer. Guinness Apparel (menswear, headwear, footwear and accessories), Guinness Bar (barware and accessories), Guinness Gear (collectables, kitchen stuff, bags and travel gear), Guinness Sports (golf, rugby, soccer, and darts accessories), and Guinness Prints (Guinness & Co, 2008) are developing prosperously. These extensions help Guinness in a variety of ways including the following: they allow non-beer drinkers access and association with the essence of the Guinness brand; they add brand value for Guinness lovers by providing new experiences and choices; extensions increase brand awareness by publicizing the Guinness brand through new channels; extensions create favorable brand associations by extending the extraordinary experience and service; and lastly, brand extensions create new cash flows, which build assets that may help Guinness stimulate its future brand development. However, it is important to caution against the dangers to the brand with these types of extensions. Brand extensions into categories that do not relate to the core of the Guinness brand may in the near future dilute the Guinness brand.

MANAGING OVER TIME

Before the Declaration of Independence, the French Revolution, and the telegram—there was Guinness. Established in 1759, Guinness has been a global brand for nearly 250 years, surviving world wars, atomic bombs, and every financial crisis to date. Why? Guinness has been positioned as a brand that emulates camaraderie and a sense of Irish pride, two timeless attributes. Since its beginnings, Guinness has remained a solution in the minds of countless consumers because of its impeccable response to changes in the worldwide market. Today, 1,883,200,000 pints of Guinness are served yearly (The Wall Street Journal, 2002); the rate of Guinness consumption demonstrates that what they sell is not just a beer—it is an experience. Everything from the pouring technique to the thick body and foamed top of the beer differentiates it from others in its product category. Guinness has created a brand identity that successfully communicates the core elements product: the taste, the look, the connection to Ireland, and now—a rich history. In essence, Guinness was founded when Arthur Guinness did the unimaginable—he recognized the uniqueness of [Irish] pub life and found a way to bottle it.

In terms of management, Guinness is a brand that has never strayed from its humble beginnings. In the eighteenth century, Guinness capitalized heavily on the changing environment of the beer and alcohol industry. Towards the end of the eighteenth century (1790s) the alcohol industry faced heavy adversity due to “anti-spirit” campaigning (Guinness, 2008). This was a positive environmental change for Guinness, since in the midst of these campaigns they promoted themselves as the leading and healthy alternative. Guinness was also able to gain market share and increase brand awareness at this time. As exemplified in this situation, Guinness has been swift in its reaction to social and political pressures it has faced over time, which have helped the brand be stable in a changing environment.

Guinness’s likeability among consumers further increased throughout the nineteenth century. When Guinness was first established it produced mainly porter. Though, in 1821 when they created “Extra Superior Porter” (now referred to as “stout”) they saw a shift in consumer demand. In 1821, 4 percent of Guinness sales went to “Extra Superior Porter,” and by 1840 it accounted for 82 percent of their sales (Hoover’s, 2008). Guinness made the imperative move of reacting quickly to local consumer demand, which enabled them to expand their product globally. Thus, with talk of global expansion came a need to promote the Guinness brand name. In response, Guinness created its first label in 1862 (Business 2000, 2008). Not only was this a differentiating tactic, but as demand from other countries increased, Guinness saw their label as a way to protect their product and brand name (which was mainly in U.S. and Australia at the time). In a sense, it was the first time Guinness recognized the importance of the brand and the profound impact it had on the beer industry. By 1870, 10 percent of Guinness was being sold overseas, making it a major competitor in the global market (Hoover’s, 2008).

The twentieth century was a turning point for brand management. No longer were brands being kept locally; as international expansion became popularized, the need for different marketing techniques surfaced. In Guinness’s case, the turn of the twentieth century meant more competition, hence the need to advertise. When the time came to advertise, Guinness emphasized promoting the product in a contemporary way without leaving devoted/traditional drinkers behind. To achieve this, Guinness refused to adjust the product itself, rather they appealed to consumers by promoting the quality and authenticity of the brand. In terms of the labeling—a major form of their advertising, the harp symbol, the Arthur Guinness signature, and the “GUINNESS” lettering and typeface are the most important elements of the brand identity. Few alterations have been made to these symbols, and most have gone fairly unnoticed. Aside from the labeling, Guinness did attempt to change one very important element of Guinness beer without success: the pour. In 2002, Guinness noticed that younger consumers [in Ireland] became impatient when it came to waiting for a Guinness beer to be poured (a lengthy process that usually requires over 2 minutes between filling the glass and serving). In response, Guinness introduced the “quick pour;” a 15-second pour. However, Guinness soon realized that the “slow-pour” was something consumers saw as a valuable association with the brand—what differentiated Guinness from other beers. One customer reported, “[t]he slow pull is part of the Irish identity. Take that away and then it’s just another beer” (The Wall Street Journal, 2002, p. 4). Needless to say, Guinness quickly retorted this process.

A new trend for Guinness in the twentieth century was finding different ways to promote the brand name. One example of this notion was in the creation of The Guinness Book of World Records in 1955, which still considered the best selling book of all time (Hoover’s, 2008). Apart from name usage, one of the most important differentiating approaches used was in the opening of the Guinness Storehouse in 2000. The storehouse has proved to be a strong move for the brand, as it officially reached 2 million visitors in 2001—after only one year of being opened (Hoover’s, 2008).

At the present, Guinness in countless countries throughout the world, a clear indication that the brand is doing well. The dispersed nature of the Guinness brand today demonstrates how the company has significantly developed as an international leader in the beer and alcohol industry. Guinness has long been a chief competitor within its industry because it has always relied on its core brand values to guide it through history.

APPENDIX

Exhibit 1: First Guinness Advertisement from 1794

(Guinness Web site, 2008)

Exhibit 2: “Guinness is good for you” Advertisement

(Guinness Web site, 2008)

Exhibit 3: “Good Things Come to Those Who Wait” Advertisement

(Guinness Web site, 2008)

Exhibit 4: Guinness Harp compared with Ireland’s harp.

vs.

(Guinness Web site, 2008)

Exhibit 5: “Guinness for Strength” Advertisement

(Guinness Web site, 2008)

Exhibit 6: “My Goodness, My Guinness” Advertisement

(Guinness Web site, 2008)

Exhibit 7: Guinness Breweries or Licensed Breweries Worldwide

(Guinness Web site, 2008)

Exhibit 8: International Distribution Regions of Guinness

(Guinness Web site, 2008)

WORK CITED

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     http://www.diageo.com/en-row/ourbrands/ourglobalbrands/guinness/

Guinness (2008). The History [of Guinness]. Retrieved November 4, 2008 from the Guinness
     Web site: http://www.guinness.com/us_en/story/history/.

Guinness & Co. (2008). The Guinness Storehouse Fact Sheet. Retrieved from the     Guinness Storehouse Web site: http://www.guinness-storehouse.com/en/PressFactsheets.aspx.

Guinness & Co. (2008). Guinness Website. Retrieved December 4, 2008, from        http://www.guinness.com

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     2008, from http://www.guinness.com/us_en/story/world/

Guinness, P. (2008). Arthur’s Round: The Life and Times of Brewing Legend Arthur Guinness. London: Peter Owen Publishers.

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Hoovers Inc. (2008). Diageo plc. In Hoovers [Company records]. Retrieved November 
24, 2008, from http://premium.hoovers.com.proxy.emerson.edu/global/hoov/

Hoovers Inc. (2008). Diageo plc. Fact Sheet. Retrieved November 9, 2008 from Hoover’s online database. companies/index.xhtml?pageid=16189

LexisNexus (2008). Diageo PLC Snapshot. Retrieved November 4, 2008 from the LexisNexus online database.

Jorgensen, J. (1994). Encyclopedia of Consumer Brands. Detroit: St. James Press

McGovern, M. (2002). The ‘Craic’ Market. Irish Journal of Sociology .

Nicholls, J. (2003). Gin Lane Revisited. Journal of Cultural Research .

Pittman, D. (1962). Societ, Culture, and Drinking Patterns. New York: John Wiley & Sons, Inc.

Ritson, M. (2006, September 6). Banal at Home, Extraordinary Abroad. Marketing , 19.

Ritson, M. (2007). The Day Guinness Finally Lost its Way. Marketing , 19.

The Irish Times (2000). The Evolution of One of the World’s Greatest Brands. Retrieved November 4, 2008 from the Business 2000 Web site: http://www.business2000.ie/images/pdfs/guinness_2nd_ed.pdf.

Yenne, B. (2007). Guinness: The 250-year Quest for the Perfect Pint. New Jersey: John Wiley & Sons, Inc.

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