Case:  Irish Cream O'Darby

   Irish Cream is a typically Irish liqueur, prepared from a mix of whisky and cream, with a dash
   of chocolate. Irish Cream is very popular in Ireland. It conquered the US market in the 1960s
   and 1970s. Its success abroad has been so great that it is now no longer a negligible portion
   of total Irish exports.

               The most famous brand is Bailey's. It holds a dominating market share, and the
   brand name tends to be used as a noun. People speak of drinking Bailey's rather than Irish
   Cream. O'Darby is a challenger to Bailey's, and it competes for the second market share with
   Carolan's. A fourth brand, Royal Tara, and two small competitors, Waterford Cream and Emmets,
   share the rest of the market.

               O'Darby, whose factory and headquarters are located in Cork, in the southern part
   of Ireland, was taken over at the beginning of the 1980s by Bacardi Rum, a leading
   multinational company in the spirits industry. Just a few months after the take-over, Bacardi
   undertook a large market survey, in the whole of the United States, to investigate how
   consumers perceived the generic product Irish Cream, and especially the O'Darby brand. It
   appeared that the green-coloured bottle was largely rejected by potential customers. A new
   packaging was designed, where brown colour dominated, for the bottle as well as the label. It
   led to an astonishing growth of sales, not only in the United State, but also in other
   national markets.

               At the beginning of 1991, the director for the marketing of O'Darby hired a young
   junior marketing executive, Peter Finch, to be in charge of promoting Irish Cream O'Darby in
   France. Peter Finch, who had just graduated from a continuing education programme for training
   young export executives, travelled to France to see what could be done to increase sales. The
   exclusive distributor of Irish Cream O'Darby was the Benedictine Group, a large liquor
   producer, which sold on the French market through a network of non-exclusive sales agents.

               O'Darby was not the first company producing Irish Cream to try to penetrate the
   French market. In 1982 and 1983, Bailey's had spent a lot of money, especially on
   advertising,to launch the Irish Cream. The results had been disappointing and sales margins
   had not been large enough to cover the marketing expenses. Bailey's had not withdrawn, but it
   had discontinued its costly marketing expenses. Bailey's had concentrated its sales coverage
   on Paris, the northern part of France, Normandy and Brittany. It appeared that Bailey's was
   unsuccessful in selling to customers in the southern part of France. When trying to explain
   this relative failure, sales agents had mainly questioned the price level which according to
   them, was too high.

               During his first stay in France from March to May 1990, Peter Finch had been
   involved in sales promotion operations, with the help of the Benedictine network. Shoppers in
   hypermarkets were asked to taste Irish Cream by giving them miniature bottles of O'Darby. It
   seemed to be difficult even to induce people to try the liquor.

               However, this product was very popular in other developed markets under a variety
   of uses. For instance, in the United States consumers mixed it with Coca-Cola or orange juice,
   in cocktails. O'Darby was well placed for use in cocktails, compared to its competitors,
   because of a special formula that made it easy to mix with other beverages. In many markets,
   consumers used Irish Cream to coat ice-creams, cakes or strawberries. In Spain, where Irish
   Cream has achieved a good deal of product knowledge, Spanish consumers tend to call it
   Bailey's O'Darby.

               In September 1991 the situation for Irish Cream O'Darby was as follows:

   1. It was sold almost exclusively in very large food stores (hypermarkets); it achieved a low
   penetration rate as a bar drink; it was rarely to be found in restaurants.

   2. The retail price was in the range of 45–50 francs for a bottle of 75 centilitres, compared
   to Bailey's which was priced in the bracket of 55–60 francs for a bottle of 70 centilitres.

   3. The annual sales for 1990 were 24,000 boxes of 12 bottles.

   4. Sales coverage was limited to Paris, the northern part of France, Normandy and Brittany.
   The best-selling area was the département  of Finistere (Brest, Quimper), which is located in
   the most western part of France (a département  is a French territorial unit where there are
   generally between half a million and one million inhabitants). Finistere is linked by ferries
   to Ireland. There, per capita consumption of Irish Cream was three times as much as in the
   Paris region.

   5. There was no advertising. Sales promotion was done mostly by means of free sampling, in
   hypermarkets, disco bars or night clubs ('O'Darby party nights').

   6. The promotional budget, which was 300,000 francs in 1989, was more than doubled in 1990 to
   700,000 francs.

   

   Questions

   

   1. Discuss and, possibly, criticize the marketing strategy which was adopted by Irish Cream
   O'Darby in order to enter the French market. In doing this you should, in particular, take
   care to examine what kind of market research should have been undertaken (a) prior to entering
   the market, and (b) after results had been achieved, and to question the coherence of the
   marketing mix. (You are not asked to prepare a marketing strategy as a whole, since the
   information available in this short case is not sufficient.)

   

   2. Irish Cream O'Darby has to decide on the allocation of its total marketing budget to its
   various national markets. You are asked to outline the criteria and design of such an
   allocation method. The problem is allocation between national markets, not between
   local/regional markets within a particular country.