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Svedka Vodka Strategy - Article Example

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Svedka Vodka Strategy Introduction: Vodka is a distilled beverage that is popular all around the world. It is composed primarily of water and ethanol having traces of impurities and flavorings. Normally it is made from fermented grain and potatoes. The US government has defined vodka as a neutral spirit without having distinct character, taste, aroma and color…
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Svedka Vodka Strategy
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Download file to see previous pages However there was a gap in between the high end and the low end, i.e. there was no mid sized segment in the market as of now. In this scenario there was a chance of launching a new product into the vacuum mid sized segment with suitable marketing strategies and outlook. “Svedka” the to be launched mid segment vodka had many obstacles to encounter for entering into the already established vodka market. Since it was new, new techniques both in the production and marketing levels have to be adopted. The product should be of high drinking quality and should be distinguished for its soft silky drinkability. 1. Branded vodka has its mark in US market. International brands like Smirnoff, Absolut etc have created brand awareness in the market. The prices offered by both these leading brands were in between $20 and $25. Svedka was planned to introduce in the mid sized segment because there were no real competitors in the offing. Moreover cost reduction techniques like outsourcing of production which was a major strength of Svedka enabled the product to be sold on a lower price. The under $10 market of vodka was nearly 80% of the total market share of the spirit therefore the chances of success of Svedka is bright provided it be introduced in a planned way. A competitive pricing strategy should be adopted for this purpose, may be market oriented pricing or penetrating pricing(Kotler,Keller,Brady,Goodman&Hansen). The real competitor for Svedka would be from Smirnoff which was selling vodka a price of $10 per bottle, Smirnoff enjoyed a huge 19.7% share in the market. However by the entrance of Absolut, Smirnoff was under pressure. Therefore if Svedka was introduced properly in the mid tier segment, it could really tap the potential and give a real time competition to Smirnoff. The other brands which are under $10 per bottle are Gordon and Popov, which have only a very little market share. Another important aspect in this scenario is that Svedka due to its cost effective strategy is able to offer of 25% to wholesaler and 30% to 35% to retailers. This is considerably high according to normal industrial standards hence it could provide a boost to wholesalers and retailers to sell Svedka. 2. Marketing strategy is a process by which an organization concentrates on its limited resources and cashes on its greatest opportunities in order to increase sales and achieve a sustainable and competitive advantage. The marketing strategy should be centered on customer satisfaction (Kotler,Keller,Brady,Goodman&Hansen). Customers are more aware of prices of the products they buy along with the quality. Of course, Svedka has quality because it is manufactured raw. Therefore the price segment should be given much importance. The market share of low priced vodka is around 80% therefore Svedka if priced less, I.e, below $10 could command greater respect from its customers. Another important aspect that has to be considered is the reach of the product to the customers. For this purpose a brand image has to be created just like Smirnoff used to do. Svedka should appeal to new vodka drinkers along with up graders. It should be a choice for both price driven groups. Target customers who are not brand loyal but young should be tapped and developed. Advertising should be cost effective and appealing like eye shelf ...Download file to see next pagesRead More
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