Absolut was established in 1879 by Lars Oisson Smith and is produced in Ahus, Sweden, and was bought by French group Pernod Ricard in 2008. Absolut is the third largest brand of alcoholic spirits in the world after Bacardi and Smiroff, and is sold in 126 countries. However, with more and more vodka brands entering into the US and European marketing, The Absolut Vodka is suffering from fierce competition. This article will discuss which alternative marketing strategies should The Absolut Vodka have to increase its market share in the US, in Europe and in other parts of the world, and whether Absolut Vodka have the right competences for achieving international success for its Absolut Cut. Absolut Vodka in the US
Absolut Vodka’s first shipment was to the US market, Boston, even though no one would buy Swedish vodka at that time in 1979. Surprisingly, it was a big success to Absolut Vodka with nearly 50 per cent of the total sale was exported to the US. This market skimming strategy earned Absolut the maximum revenue. However, after many years with only increasing market shares, Absolut Vodka is under fierce attack from other super-premium vodka brands such as Smirnoff, Grey Goose and Finlandia. Also, suffering from the ‘health trend’, the total consumption of alcohol has decreased by 20 per cent in the last 20 years. Under such market conditions, licensing would be a better alternative marketing strategy for Absolute Vodka to continue its penetration in the US market with low financial risks and costs, for the market share in the US has already reached saturation point among super-premium vodka, it is not a wise decision for Absolut Vodka to invest more money to promote its product into Platinum standard, which is the most expensive category with around US$25 per bottle. In addition, consumers’ tastes in American market are so volatile, which would put Absolut Vodka into a dangerous position to increase its cost to produce a product,...
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