BACARDI

Introduction

Cuba, bats, and rum – with which brand would you associate these three items? Everyone would answer to this question with BACARDI.

This essay wants to give an insight on the global strategy of this famous brand. First, I will give you some facts about the historic development of Bacardi and about its current situation. The next part will deal with the general strategy: The formerly single brand strategy as well as the global strategy, which the company pursues today will be described. Furthermore, it is essential to have a short look on the alcohol industry as a whole to understand the actions Bacardi has taken and respectively takes today. I also put an emphasis on the marketing mix, by investigating Bacardi’s activities concerning each of the four Ps.

When we hear, “150 Years of Great Parties” we think of Bacardi. Bacardi Limited emphasizes on building an enduring legacy of a family. Bacardi is a family-owned company developed by seven generations of the Bacardi family. Bacardi has become the third largest spirits company in the world. Over the years they have built a legacy focused on perseverance, quality, prestige, innovation and creativity. Bacardi was founded in Santiago de Cuba on February 4, 1862, by Don Facundo Bacardi Massó who was inspired to create rum. The company owns more than 200 brands; some examples are Bombay Sapphire gin, Martini & Rossi Vermouth, Cazadores, and Grey Goose vodka. Only rums are sold under the Bacardi brand name though. Bacardi also focuses on social responsibility and as part of their sales and marketing activities. All of the Bacardi products are recognize by the black bat on the label. Don Facundo chose the black bat because it symbolizes good health, good fortune and family unity. Later on it became known as "the rum of the bat."

A Little History

Bacardi’s successful campaign to conquer the world of rum started in 1862 when Don Facundo Bacardi Massó decided to acquire a small distillery in Santiago, Cuba. Due to his ambition for science and his other various skills he found a way to revolutionize Cuba’s national drink, the dark rum, into the today so well known white version.

In 1944 Bacardi launched its first U.S. subsidiary in New York City vastly expanding its business and by 1987 it became the number one in the spirits brand sector.

While in 1960 the Bacardi family fled from Cuba to the Bahamas, after the regime confiscated the local subsidiaries, it took along the world famous brand, showing a flying fruit bat – which is considered as an omen of good luck in Cuba – originating from a bat colony in their rafters. During its exile Bacardi continued to grow and became one of the largest spirits selling companies in the world.

Until today Bacardi still refuses to agree on a settlement with Cuba, in contrast to other companies, seeking to overthrow the existing regime to be able to return to its homeland.

In 1999 the management proposed to transform the company into a publicly held enterprise, which was rejected by the majority of the company’s shareholders – many of them being family members.

Bacardi Today

Today Bacardi’s product line includes various brand extensions, for instance Bacardi Breezer, Bacardi Razz, Bacardi Cóco as well as the well known brands like Martini & Rossi vermouth, Dewar’s Scotch whisky and Bombay Sapphire gin, all of them contributing to Bacardi’s average rate of growth of about 2% a year.

Being the fourth largest spirit company after Diageo, Allied Domecq and Pernod Richard, Bacardi holds 5000 employees in offices distributed all over the five continents and another 100 employees in the company’s headquarter in Hamilton, Bermuda.

Its annual sales are estimated at 2.8 billion a year with more than 240 million bottles sold in 170 countries. This makes especially Bacardi’s white rum the largest premium spirit brand in the world.

General Strategy

Looking at the general strategy of Bacardi we have to distinguish between two different time periods. From the beginning on – and for quite a long time – Bacardi focused on the well- known Bacardi Rum. However, in the early 1990s the economic environment changed and so did the strategy of Bacardi. Nowadays it holds an extensive portfolio of diverse brands and products. The changes also had a tremendous influence on the corporate strategy and the business of the company.

The Single Brand Company

As a single brand company Bacardi focused on selling and positioning its rum in the premium segment throughout the world. Its corporate strategy was “to be in the ‘light spirits’ business” whereas its business strategy concentrated on “becoming the number-one-selling spirits brand in the world” (Bourgeois, 1997).

Bacardi has always been a company entirely controlled by members of the extended Bacardi family. Before the strategy changed in the 1990s, the Bacardi empire comprised 5 more or less independent companies servicing North and Latin America, most parts of Europe, Australia, Japan, and some other Asian countries: Bacardi International Ltd. (operating from Bermuda), Bacardi Imports (Miami), Bacardi Corp. (headquarters in Puerto Rico), Bacardi & Company Ltd. (Bahamas) and Bacardi Mexico. This loose cooperation with no central control or coordination perfectly fitted the economic situation of those days. It allowed Bacardi to market its product locally and to customize its strategy according to the regional needs.

The Global Company

In the early 1990s the economic situation changed: Global competition and the number of mergers and acquisitions increased while consumer consumption stagnated moreover respectively declined. This was inducement enough for Bacardi to undertake some fundamental internal modifications. The former five independently operating companies were reorganized into a single one, named Bacardi Limited, with its headquarters in Hamilton, Bermuda. Furthermore the single brand strategy became abolished by the merger with Martini & Rossi (which is well-known for its vermouth but actually had more than 100 brands and products) and the acquisitions of Dewar, Bombay and Grey Goose.

The company’s mission therefore has changed from the focus on one single brand to a focus on the sale of a variety of alcoholic beverages. The corporate strategy is now to manage a diverse portfolio of brands and products instead of only one.

But how does a company whose identity was so defined by one brand for so many years, assimilate a new family of brands?

Bacardi’s marketing strategy is partially integrated and due to the recent changes in advertising policy with regard as how to canvass juveniles and young adults, Bacardi

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