Pernod Ricard to spend €50m on ‘strategic’ marketing initiatives

Pernod Ricard is to spend an additional €50m (£39m) on “strategic” marketing projects over the next two years in a bid to strengthen key disciplines and markets following a corporate-wide restructure.

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Pernod Ricard plots marketing drives for luxury brands.

Speaking to Marketing Week at an event in London today (3 September), the company’s chief executive Pierre Priguet, said the planned outlay would amount to a third of the €150m (£118m) savings it expects to generate between now and 2016.

“The reinvestment of the savings we’re making will not be across the board. It will be on a limited number of strategy projects that have been identified but are too sensitive to go into further detail at this moment”, adds Pringuet.

Pringuet hinted that upcoming investments would back the company’s unified marketing and sales team. The group-wide division launches next February with a remit to refocus the company around luxury, digital acceleration, on and off-trade development, innovation and shopper experiences.

Pringuet pointed to future investments for the company’s Chivas Regal division as an example of where the group will look to drive growth. Investments are being spread across improved localisation of campaigns, acceleration of digital content, product innovation and internal efficiencies. The luxury category will also be a key focus for the company’s strategic growth in the immediate future.

The drinks maker is spending more on marketing projects it believes can target high-net worth individuals who lead “global lifestyles”. A full-scale roll out of an advertising platform that serves targeted offers to consumers when they book flights with select travel agents is set for the coming months following successful trials earlier this year. Additionally, the business will ramp up support for its Royal Salute Scotch Whisky brand further through its international polo sponsorship roster. 

Plans are also underway to extend Ballantine’s Kickstarter-style crowdfunding initiative, which localises global marketing ideas, to other brands in the business. It launched earlier this year and Pernod Ricard is understood to be pleased with how the internal initiative has brought its marketers closer together.

The investment plan comes as the company boosts its global marketing outlay, which will account for 19 per cent of sales in its 2014/15 financial year.

In the UK, the company said the shift would push more media spend into  “non-traditional” channels, spanning experiential and digital campaigns. Activity will prioritise brands such as Jameson, which saw sales volumes climb 5 per cent in the year to June, and Malibu after it sold over 3 million cans of its pre-mixed drinks in the period.

Speaking at the same event, Denis O’Flynn, managing director of Pernod Ricard UK, said: “There’s a definite commercial link between what we’re doing in these direct-to-consumers channel.

“Our media spend in the UK is increasingly shifting toward ‘non-traditional’ media sources and therefore if you look at things like the ‘Streets of Spain’ [experiential initiative] and our innovation with Ibiza Rocks around social platforms, then I think more and more of our activations are going to be in this space.”

Pernod Ricard is reconnecting its brand and local marketing teams to bolster the renewed focus on marketing. The wholesale changes could stretch to the company’s advertising roster after it refused to rule out shaking up accounts to support the new approach.

Pringuet said: “Change [to our advertising roster] is inevitable. Providing our agencies do not digitise themselves then they will be dinosaurs [to the business]. They need to evolve as well.”

Upcoming decisions on agencies are to be made on a market-by-market basis rather than at group level, the company added.  

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