Senator Keg – Diageo’s Answer to Illicit Brews in Kenya





Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

Abstract

This case is about East African Breweries Limited (EABL), the Kenyan subsidiary of UK-based Diageo plc (Diageo), and its unique product targeted at low income consumers — Senator Keg. In Kenya, as in many African countries, the per capita consumption of alcohol was high, but most of it was illicitly brewed. With 46% of the people earning less than US$ 2 a day, the mainstream drinks priced at US$ 0.60 to 0.85 were unaffordable to them.

The locally brewed and homemade drinks were, however, not very hygienic and posed a health risk. To make matters worse, chemicals like methanol were often added to the brew. Often, they were fortified with toxic substances, which made the resulting drink unsafe. However, the high prices of commercially produced alcoholic beverages ensured that this kind of liquor brewed locally from finger millet malt (Busaa) and a corn-meal based drink (Chang’aa) continued to be popular with the people, as it was available at around one tenth of the price of commercial beer.

Business Strategy Case Studies | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies
or
Business Strategy Case Studies | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies
or
PayPal (11 USD)

Issues

The case is structured to achieve the following teaching objectives:

  • Introduce how to market products to low income consumers.
  • Understand the importance of quality, affordability, and access for low income consumers.
  • Understand the product functionality needed for BoP markets
  • Understand how price performance of products can be maintained
  • Study Distribution models to ensure easy availability of products
  • Analyze the importance of conserving resources to reduce price and also reduce impact on the environment.
  • Study how stakeholders can be made a part of the business through inclusive business models
  • Understand how the pricing policy differs for a product when addressing BoP customers
  • Understand the impact of political and economic environment on business decisions

Contents
Introduction
About Diageo
Diageo In Kenya
Proliferation Of Illicit Brews
The Solution Is Cheap Beer
Senator Keg
Opportunities And Challenges
Exhibit

Keywords

Senator Keg, Kenya,Bottom of the Pyramid, Diageo, East African Breweries, Tusker, Spurious liquor, Illicit liquor, Low income consumers Keg, Distribution ,Low cost beer, Kenyan Revenue Authority, Emerging markets, Fermented drinks

Introduction - Next Page>>