Svedka Vodka Strategy - Article Example

?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. It is believed that good vodka is one which does not have harsh rubbing fumes of ethanol. In the US during 1998, Vodka was the top selling spirit. It represented nearly 24% of the total spirit consumption. And the sales prospects were looking bright. The branded vodka in the US market has tough competitors with high end and low end products competing in the marker. 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 positioning, floor displays and spontaneous retailers’ recommendations. 3. A brand positioning statement is something like a succinct description that is prepared by the marketer for the core target audience to whom a brand is directed as well as a compelling picture of how the marketer wants his customers to view the brand. The marketing success of the product depends on the wellness of the brand positioning statement including brand name, product, packaging, advertising, sales promotions etc(Kotler,Keller,Brady,Goodman&Hansen). the brand positioning statement of Svedka should be prepared in such a manner that it suites and digests well with the core audience. In making an effective brand positioning statement for Svedka, first of all the plus points of the product like low and affordable price, good taste, better quality etc should be highlighted. Since the core customers of the product are young and up graders in the mid segment, advertisements should be made to appeal them. It is advisable to avoid costly advertisements and to rely on other types like shop exhibits, trader recommendations etc. the product should have a distinctive aroma and an appealing brand symbol that lasts long in the customers minds should be used. The recommended statement that can be used should be “Svedka, the common mans choice”. Brand positioning and product positioning should be expr4essed in many ways. It can be a simple slogan as mentioned above to an entire campaign. It should be expressed in every ad the company makes. The slogan should be expressed as a tagline or as a brand characters with some attractive sounds attached to it. The recommended slogan is simple and memorable. It makes a superlative comparison to competitors. 4. Marketing communications are messages that are used to communicate with the market. Marketing communications are associated with the media. It is the promoting part of the marketing mix. Marketing communications that is adopted here should have a mix. The elements of the mix should be blended properly in different quantities (Kotler,Keller,Brady,Goodman&Hansen). Svedka mainly targets mid level customers particularly the new drinkers and up graders. Marketing communications should aim to appeal these core customers. Communications should be effective so that the brand “Svedka” had to mean more than a product to its core audience. It should be an experience or a lifestyle and above all a fun brand. Moreover the brand should be highlighted as a challenger brand, an inexpensive chic alternative. The communications should state that the product creates a different choice for the customer where there wasn’t much discrepancy among the products in the category. Since the product was new, messages should not be based on tradition which makes no sense. The product should be positioned itself as a high quality imported vodka. It should be promoted as an rational and aspirational product. It is also wise to associate the product itself with festive occasions because the customers really enjoy it while using. The communications should contain words like freedom, fresh thinking and flirtatious since these resemble the essence of the brand. Svedka customers should be presented in sophisticated, casual cool, iconoclastic and authentic styles. The marketing communications should be used mainly in the print media initially because the core customers are from the mid segment. Until the sales reach key markets, the media should be upgraded into outdoor broadcast and electronic ways. 5. A roll out is an opportunity that arises when a new product is launched (Kotler,Keller,Brady,Goodman&Hansen). In a roll out, the emphasis should be on figuring out what the customer is anticipating and what it will take in order to achieve success. The top priority should seek the essence of the product from reliable sources, maybe the core customers. This should be done to attempt to find some consensus regarding what it actually means. The very next priority should be the roll out figure out what should drive successful performance or what should get in the way. A roll out plan is about tactical execution. It contains plans for each step of action. The sales of vodka in US are high in the state of California and Florida. Moreover the target customers are young and new drinkers. The very background of the drink is benchmarked upon a festive mood with lots of fun. All these aspects have to be incorporated when a roll out strategy is planned. The roll out strategy should make an impact in the exceptionally competitive market. The Svedka brand should bring its brand offering to the next level; it should launch a brand new packaging design and cutting edge marketing strategy. It is advisable to get support from life style partnerships. Micro targeting of its customers should be undertaken. The very heritage of the product should be given due importance when it is marketed. Svedka is the only distinguished Swedish brand vodka that is sold in the US. More over it is an imported quality drink; these factors should be given importance in the roll out strategy. Reference: Kotler.P, Keller.K, Brady.M,Goodman.M& Hansen.T. Marketing management. New Jersey: Pearson Prentice Hall, 2009 Read More