IRISH CASE STUDY:
Chapter 6: The Theory of Consumer Choice

Murphy's 'Law' means it's the Axe for the Samurai
by Richard O'Sullivan, Department of Economics, University College Cork.

The following case illustrates how one Irish company used informative and persuasive advertising as a tool to increase demand for its product. In employing an extensive national advertising campaign, the company was effectively attempting to manipulate the shape of the consumer's indifference curve by appealing to the individual's tastes and preferences - a key factor in the consumer's demand function.

The case is based on an article in the Sunday Tribune, November 30th 1997. Ireland's enduring love affair with the 'pint of plain' has proved more than a match for Murphy's marketing gurus. After 18 months and in excess of IR£0.5m in advertising expenditures, Murphy's have apparently decided to abandon its attempts to convince Irish people to drink stout instantly from the bottle. Over the last 18 months, a series of original advertisements featuring Japanese Samurai warriors have regularly played on television screens across the nation. As well as reminding existing customers of the manifest pleasures of 'the one from the south', the Murphy's Stout Instantly campaign was also used as a vehicle to make inroads into the more lucrative 18-21 year-old market by using the campaign to alert entry-level drinkers. In offering consumers the chance to enjoy their stout instantly in a bottle, the company were actively promoting an alternative to the popular lower temperature bottled beers.

Despite their attempts to develop a stronger awareness of Murphy's stout, many industry experts believe that the marketing men had got it wrong from the start. A rival source reflected the general feeling of scepticism among Irish stout producers by stating that bottled stout 'would never be a big seller in this market'. As if to echo industry sentiments, the recent market swing towards premium bottled beers does not appear to have happened in the Irish stout market. This has apparently been because customers traditionally prefer guarantees of product quality and value for their money - both thought to be key attributes of the pint from the consumer's point of view. A combination of slow sales, spiralling advertising expenditures and growing outside financial commitments (including agreed funding of the Irish Open golf tournament and the Cat Laughs festival in Kilkenny) appear to have forced Murphy's to finally call time on their efforts to convince people to drink stout by the neck.

Parent company Heineken have invested some £60m to date building up the Cork plant and developing Murphy's profile and market share. Murphy's currently have a reputed 6% share of the Irish stout market (some industry experts put it at about 4-5%) but are eclipsed by the Guinness corporation who command 87% of the Irish market. Unlike any other industry, the obvious business strategy of going for a share of the international market is effectively prohibited by the dominant position of Guinness abroad. Murphy's had hoped that the Samurai advertising campaign would at least contribute in some way to stealing ground on rivals Beamish, who also hold a modest share of the market of about 7%.

Although the costly Samurai adverts will be withdrawn, Murphy's remained upbeat about their success insisting they were more than satisfied with the response from the key target audience of 18-21 year olds. The marketing personnel dismissed rival claims that the campaign had failed adding that deciding to axe the Samurai adverts was a natural evolution away from the bottle and back to the pint. It is somewhat ironic then, that one of the more successful advertisements in the Samurai campaign featured four warriors drinking Murphy's bottled stout by the neck while a Guinness drinker drummed his fingers on the bar, anxiously waiting for his pint to settle!

Murphy's have since strengthened their senior management team by appointing a seasoned marketing and advertising expert to its Cork plant. The new campaign manager Peter Bray, brings with him extensive marketing experience from his time in the United States with the Pepsi Corporation and Murphy's parent company, Heineken US. In a candid swipe at the advertising muscle and superior financial resources available to Guinness, Bray insisted that this would only serve to make his new job easier to do. "I've got one competitor, I know where I can mobilise my team and direct all my armour against" he said.