Absolute Vodka: Defending A1.0-Executive Summary V&S Group, a Swedish Company Owned by the Government Created V&S Spirits to Produce Market and Sell Absolut Vodka Which Is the Company’S Strongest Brand (Created in

Topics: Brand, Absolut Vodka, Marketing Pages: 13 (5048 words) Published: August 29, 2010
Absolute Vodka: Defending a1.0-Executive Summary V&S group, a Swedish company owned by the government created V&S Spirits to produce market and sell Absolut Vodka which is the company’s strongest brand (created in 1979). To maximise the brand’s market share and strengthen its competitive position, the company established a jointed venture called Future Brands LLC to distribute its products more effectively strictly in the USA, which is Absolut’s strongest market. Although the brand is the second largest premium vodka, its market share is threatened by the constant growth of the market leader Smirnoff. Therefore, V&S Spirits need to take further measures to ensure its brand’s image and market share is protected and advanced. V&S’s strategic step of establishment Future Brands LLC in the USA yielded several advantages and disadvantages. On the one hand, main advantages are avoiding profit margins from intermediaries, maximization of sales, having more control over the value chain, and obtaining better market feedback. On the other hand, disadvantages are concluded to be potential drop in profits at the beginning, risking technology flow, having a high level of commitment, and suffering cultural differences. The market position in major markets for Absolut Vodka was identified and marketing strategies were proposed. In the US, the brand’s position was classified as ‘’Challenger’’ and a strategy of product differentiation of luxurious products was proposed. In Eastern Europe, the position is classified as ‘’Follower’’ while a Flanking attack strategy and intensive advertising were proposed to break customer loyalty to domestic brands. In Australia, Africa and the Middle East, the brand was classified as a ‘’Follower’’ and a Focused strategy on FABs was proposed. Finally, in Asia Specific, the brand was identified as a ‘’Challenger’’ and a differentiation/Focused strategy was proposed. In terms the branding strategies employed by both organizations, and on the one hand, Smirnoff standardizes ‘Globalization’ as a genuine heritage of Russian Vodka and ‘Brand Optimization’ as their means of building and communicating Brand Value. On the other hand, Absolut Vodka use ‘Global Platform Local Adaptation’ by adapting the iconic Bottle with a particular Historical Landmark, culture etc.. The effect of Country of origin of these 2 brands is missing! 2.0-Introduction In the turbulent environment we are facing nowadays, organizations need to constantly search for ways to innovate and to meet the changing customer demands in order to maintain or strengthen the position of their products. Absolut Vodka, one of the most popular super-premium brands in the world, is the strongest brand for V&S Spirits. Further, the company seeks to maximize its brand’s market share through constant innovation and adopting new marketing/distribution strategies. This report will provide further insight on Absolut Vodka’s position by addressing five points. First, the acquisition of Future Brands LLC which was considered to be a strategic step will be tackled and its advantages and disadvantages will be elaborated on through relating it to existing literature. Subsequently, Absolut Vodka’s international marketing strategies will be assessed and alternative strategies will be proposed in different regions to increase the brand’s market share. As will follow, research conducted on two major vodka markets will be illustrated, based on which one of them will be proposed as a strong target for V&S Spirits to invest marketing resources in. Finally, marketing strategies for Absolut Vodka and Smirnoff will be contrasted, including the degree to which each brand is associated with the heritage of its country of origin. 3.0-Background V&S Spirits, a subdivision of the Swedish government-owned company called V&S group, is responsible for the marketing, production, and distribution of the organization’s...
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