Developing a global pricing strategy

Date of publication: June 15, 1991

Abstract:

In 1986 a new Company appeared on the World Stage, United Distillers, the spirits Company of Guinness PLC. The company was formed as a result of the highly publicised takeover of the Distillers Company Limited by Guinness and was primarily a combination of the Distillers Company Limited and Arthur Bell which had been bought by Guinness in 1984. The major part of the new company's portfolio was made up of leading brands of Scotch Whisky and Gin including such names as Johnnie Walker, Bells, Dewars, White Horse, VAT 69 Haig, Gordons, Tanqueray and Booths. These and others from over 150 brands were sold in every country in the world where commercial access was possible. In the four years of its existence United Distillers has been successful. In 1986 turnover was £2,747 million with pre-tax profits of £375 million. In 1990 turnover was £3511 million pre-tax profit £965 million making United Distillers not only one of the biggest but also one of the most profitable spirits companies in the world. Many factors have contributed to this success. The understanding and management of the price dynamic has been important among these. This paper describes the way in which United Distillers has set out to understand the effect of price in its various markets and how this understanding has been incorporated into the management decision process.

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