Page 9 - Drambuie Teaching Note

the customer, selling them the line that the customer

who drinks Drambuie is rediscovering a lost treasure.

Getting distributors such as Bacardi and Suntory on

board was crucial as they contributed to the marketing

plans, checking out local do's and don'ts and sending out

their own "recon teams" to assess the market.

Additionally, Parnell attacked operating profits by better

stock management. An operating profit of £5m which

would represent a return on net sales of about 20% was

boosted by this better stock management.

In the past, Drambuie always looked at shipment sales. If

the distributor contracted for a certain number of cases

and hadn't sold all that stock, Drambuie would say, well,

you contracted for these cases. The distributor would

react by simply not reordering.

With better stock management the by-product was that

Drambuie could now separate trading profit from

operating profit which in turn meant that all the

incentives were now linked to case sales of Drambuie

worldwide – a strong incentive to push and sell stocks.

Parnell cleared Drambuie of its debt, returned the

company to profit and oversaw the reinvigorated growth

in the United States where he had halted a 4% fall in sales

and turned it into a 2% per annum growth.