Russia has recently seen a decline in vodka sales. For Beluga Vodka Company, this is the right time to consider expanding to another region where they can enter the premium market to sell their luxury brand of Vodka. Beluga Vodka is the top vodka producer in Russia, with only one existing direct competitor in the UK. Their super premium brand has been highly successful in Russia and it is now the right time to expand the brand geographically. The UK is the target region for this report as there has been increase in premium brand spirits following the recession. This report will cover a brief situation analysis followed by a strategic marketing plan that will aim to introduce a BELUGA Vodka into the market.
Industry and market overview
For the macro-level analysis, we used PESTEL framework with help to analyze the many different factors in a company's macro environment (oup.com, 2010). Figure 1. (Shkurenko, 2010)
Summary of PESTEL analysis
Growth in the UK spirits market is beginning to slow or is even declining in some categories. Heavy taxes, the unstable economic situation, failing consumption and health concerns are driving this stagnation. However, new opportunities exist, for example through expansion development in healthy and premium spirits (Shkurenko, 2010) Micro level Analysis
According to the Datamonitor (2010) the spirits market consists of the sale of brandy, gin and genever, liqueurs, rum, specialty spirits, tequila and mezcal, vodka and whisky (Shkurenko, 2010). Whisky is the largest segment of the spirits market in the United Kingdom, accounting for 36.9% of the market's total value followed by vodka 26,3%. (Shkurenko, 2010). Datamonitor report (2010) indicates that the United Kingdom spirits market shrank by 0.5% in 2009 to reach a value of $15,631.5 million but forecast to increase by 8.7% during the period 2009-2014 to reach a value of $16,993.4 million. In terms of market volume the UK spirits market shrank by 1% in 2009 to reach a volume of 260.2 million liters and forecast to have a volume of 268.5 million liters in 2014 with 3,2% increase (Datamonitor, 2010). The diagram below reveals the spirits market analysis based on Porter’s Five Forces framework.
Figure 2. Porter’s Five Forces for UK spirits market (Shkurenko, 2010)
Product and Company overview
The product which is planned to promote to the UK market is vodka BELUGA this brand belongs to the Russian privately-held company Synergy (Shkurenko, 2010). JSC ‘Synergy’ is one of the leading producers of distilled spirits in Russia based on production volume (sygroup.ru, 2010) with company share in Russian spirits market 5,4% (Euromonitor, 2010). Synergy operates 7 distilleries strategically dispersed across Russia with altogether produce about 50 types of vodka of different quality and price groups, two dozens of different bitters and sweet liqueur made on the basis of plants and berries, several types of balsams (sygroup.ru, 2010). Synergy has taken 31st position in the TOP-50 fastest growing companies in Russia according to the business magazine ‘RBC’ it is the only representative of the "Spirits manufacturing" sector in the rating. In addition ‘EXPERT’ magazine included the Company to the list of TOP-200 of the largest Russian companies by capitalization and synergy shares were rated class A (high liquidity) (Shkurenko, 2010). Besides that, the Company was included in the list of TOP-400 largest Russian companies by sales volume (sygroup.ru, 2010). BELUGA vodka is made only at the ‘Mariinsky’ distillery. This plant with 100-year history, located in a region of Siberia, where for 200 miles in any direction there is no any industry, so vodka BELUGA - an environmentally friendly product (Shkurenko, 2010). Beluga is not just vodka, but designer’s exclusive product produced completely manually, in accordance with unique recipes, one of the most important distinctive...