Absolut Vodka

Submitted To Submitted By
Group-8
Dr M.R. Suresh
SOWMYA S 18083
NIKHILESH MAHESH 18159
NUNNA SAI SRINIVAS 18161
SHIVALI M 18167
SANDRA K MENON 18165
Case Facts
• Absolut Vodka was launched in US in 1979.
• It is a subsidiary of Vins&Spirits (V&S) Sweden.
• In 1983 Absolut registered a sales of 6 million litres per
annum.
• By 1986 Absolut was exported to 16 countries.
• Sales rose to 20 million litres in 1987.
• From 1999 to 2003 was expansion phase.
• Absolute vodka was made of high-quality grain.
• Launched Absolut Vanilla in 2003.
• V&S well known for its contemporary themes used in
the advertisements.
• Total sales of V&S in 2002 was SEK 9093 million, of
which 61% came from Vodka
Competitors

• Smirnoff
• Wyborowa
• Finlandia
• Cossak, Puschkin ,
Stolichanaya Russia
• Other locally manufactured
vodka like Viin and Sochu
 Xavier’s framework
Environment analysis
• In 1957, V&S launched a vodka brand in the
domestic market of Sweden under the name
‘Explorer Vodka’. Later it decide to diversify its
market to US that was the time when ‘Absolut
Vodka’ gave birth
• The government introduced ‘Alcohol ration system’
• The tax on alcoholic beverages was calculated based
on the percentage of alcohol content in it
• V&S became the largest spirits company in Sweden
and divided its operation into 3 parts namely - V&S
Distillers, V&S Wine and V&S Absolut Spirits
Market Analysis
• In 1985 Absolut was exported to 16 countries and in 2
years its sales grew up to 20 million liters and became
the second largest importer of vodka in U.S
• In 1993 the exports increased by 18% and became the
tenth largest selling premium spirit brand in the world
• In early 2000, the company acquired two spirit
company and diversified the market in countries like
Norway, Chile, U.S, and Poland in order to establish
its import and marketing subsidiaries
• By 2003, the company earned total of 61% from vodka
were the major revenue were from North America,
Asia, European countries and Nordic countries.
• In U.S marketing efforts were concentrated in and
around- New York, Los Angeles, San Francisco and
Boston.
Customer Analysis
• Vodka being a fashionable liquor in U.S, it attracted
women and younger people apart from older men
• When ‘Absolut Cameron’ was launched in 1988, 5000
women called TBWA wanting to buy the dress shown
in the ad

Competitor Analysis
• The Russian vodka brand ‘Smirnoff’ was very popular
in U.S market
• Other vodka brands emerged from U.S, U.K, and West
Germany
• Also, locally manufactured vodka from Estonia, Japan,
Sweden, Russia, Poland
Company analysis

• In 1917 government established AB Vin & Sprit

Centralen
• V&S enjoyed monopoly in alcoholic beverage
business in Sweden
• Apart from launching of ‘Absolut Vodka’, V&S
also launched Spanish, French and Italian alcoholic
beverage in the country
• The company changed its name from AB Vin &
Sprit Centralen to V&S Vin and Spirit AB
• In late 2000 the company acquired many leading
spirit companies in Europe and Nordic countries
Marketing Mix Analysis
•Product
• Absolut vodka was the 3rd largest premium
selling brand
• The vodka bottle carried a brand name directly
printed on it
• The Absolut vodka was produced from pure
Swedish grains
• Evidently all parameters of the product
concerned to Absolut vodka are unique

•Price
• Even though the govt imposed high tax on
vodka, Absolut enjoyed healthy sales growth.
● Place
• Apart from Sweden, Absolut Vodka today is
present is 126 countries
• V&S signed Jim Beam, Branda and Maxxium as
worldwide distribution of Absolut
•Promotion
• Their main promotion strategy of Absolut was
advertising in various ways such as media
advertising, print media, online campaign
Dixit’s framework
Definition of capability- V&S capabilities can be
multidimensional
• Innovation
• Diversified business
• Branding
• Global distribution - 126 countries worldwide
Portfolio - V&S had sustainable skills such as
• Creative and innovative methods of advertising
• Skills pertaining to R&D
• Multiple flavors in Vodka and acquisition of
various wine businesses
Utilization - to become a largest supplier of of vodka
and to increase customer base compared to its
competitors
Dixit’s framework
Characterization
● The product development capabilities are
substitutable, but ads were not suitable
Demonstration
● Introducing new product that stayed ahead of
others
Lifecycle
● Using of premium quality of grains
● Distillation of about 10 times
Stages of Industry Maturity
COMPETITIVE POSITION - STRONG
Embryonic stage
1. In 1957, V&S launched a vodka brand named
'Explorer vodka' which exported to US market
and it was not successful
2. In 1979, Absolut vodka brand and in 1983
launched Spanish, French, Italian alcoholic
beverages.
•Growth Stage
•In 1992, large scale tax reforms were introduced
by the government where taxes were imposed
based on percentage of alcohol content.
•Due to this sales of absolute was triggered and
exports increased by 18%
•At this stage, the brand was 10th largest
premium selling brand in the world and
competition is also increased.
•They acquired many companies from 1999 to
2002 and in 2003 V&S acquired 85% stake in
polmos gora in Poland and V&S Denmark AS
Maturity Stage
V&S divided its operations into 3 business
areas:
a) V&S Distillers : Sweden, Finland,
Denmark, Germany, Poland, Czeh
Republic
b) V&S Wine : Sweden, Finland,
Denmark, Norway Estonia, France
c) V&S Absolut Sprites : U.S, Sweden,
Denmark, Chile, U.K
Suresh Sir
Framework
•FIRM / ENTERPRISE RELATED VARIABLES
• Firm resources, capabilities, Competencies
• Absolut Vodka is a subsidiary of the company
V&N, that gives the upper hand is resources and
becomes to position in the market
• They had various distilleries spread across the
country
• Absolut was their leading brand
• Had a huge consumer base.
• Nature of product, business
• V & S was founded in 1917
• They launched Absolut into US by 1958 from
which it started to grow into success now
enjoying the maturity stage
• They have launched varieties of brand and
entered many other markets.
Country screening approaches
• They chose USA, as they had a potential
consumer base and chose as their lead
market

Mode of entry
•Business Acquisition Model was used

•They had competition and there was brands

existing in the market
•HOST COUNTRY/ HOST MARKET RELATED
Sophistication of Legal system and implementation of law

•The US market was favorable

Role of govt in host country/ market

•They had low level of intervention

Cultural dimensions
• In many cities of The US, the drinking culture was
prevalent
• Started targeting all the classes such as sports fans,
professional, artists
• Intensity of local competition
 Mapping the advertising
Brand Name
• Different names proposed
• The Blonde Swede
• Royal Court Vodka
• Absolute Pure Vodka
• Absolute Pure Vodka was liked except for the word pure
in it
• Decided on removing ‘e’ from absolute- following
Swedish counterpart
•Final name was “Absolut Country of Sweden Vodka

•Later changed to Absolut Vodka and with its two word

slogan
•Designing Label
● Research conducted on what the market trend is

● Decided not to put any label

● Later realized the consumers were not happy with
the invisibility and decided to add text
● Thought of writing explanation of the process but
was rejected.
● In the end the name Absolut Vodka was chosen

Ad Campaign
● 5 different ad

● They mainly try to concentrate on association building

Brand architecture as a
Strategic Marketing
• Competition

• Smirnoff established that, advertising on the origin wouldn’t

impact the mind of people

• Customer

• People choosing white liquor over brown liquor

• Considered fashionable
• Company

• Sticking to the traditional central theme

 MARKETING MIX
• Promotion
• Advertised on the origin factor
• Two word Text - Absolut Perfection
• Association with Art, Fashion

• Product
• Stood for simplicity and perfection

• Price
• Premium

• Place
• Theme based advertisement for different cities
1.What were the various issues that V&S had to keep
in mind before coming up with appropriate brand
name and brand image, Given the fact that Swedish
vodka was not expected to find ready acceptance in
the target market, the U.S?
● Issues faced by V&S while coming up with
appropriate brand name and brand image
• Vodka origin issue
• The Russian vodka ‘Smirnoff’ held more that
20% of the market share in U.S
• Competition with locally manufactured
vodka.

•V&S management roped in Gunner Broman,

owner of Carlsson & Broman advertising agency
to build very strong image for itself
 2. Discuss the role of advertising plays in increasing brand
awareness and brand loyalty among customers, especially for
products which have very subtle differential attributes? In the
above context examine the impact Absolut advertisements had
on its target audience. Do you think the advertisements
fulfilled their purpose?
• Initially five different advertisements were
developed
• Fist ad theme depicted the history of Swedish
Vodka in the text
• Second theme centered around depicting spirit
of Sweden
• Third theme used a verbal attack on Russians
(Political relationship between Russia and US
at that time)
• Fourth theme “while rest of world was
making absolute war, we were making
Absolut Vodka”
• Combining adjectives with missing letters
Contd..
• Yes, Absolut advertisements had an impact on target audience in
increasing brand awareness and brand loyalty.
• The consumer study revealed by V&S revealed that consumers do not
drink a particular brand of vodka for its taste, but they drank for the
image associated with it.
• The five ad Champaign’s and Absolut’s association with art and
fashion increased brand awareness and brand loyalty among the target
audience of different groups in the market.
 3) ‘The Absolut advertising campaign is
successful because it is contemporary.’ How did
TBWA maintain the ‘freshness’ of the Absolut
campaign? Discuss with respect to the brand’s
association with different media, art, fashion,
technology and music.
 Artists like Keith Haring, Kenny Scharf,
Stephen Sprouse, Edward Ruscha, Arman,
Britto made their own interpretation of the
Absolut bottle.
 Assigned David Cameron to design a dress
with the Absolut vodka.
 Absolut fashion, Absolut style, Absolut
menswear, Absolut symbol, Absolut deign,
Absolut artist of the nineties
 Absolut Statehood, Absolut Cities, Absolut
LA, Absolut Manhattan
 Advertisements for every season of the year,
festivals, holidays
4.Even though Absolut ads have been depicted in different
media, the central theme of the campaign has remained
unchanged ( the bottle and the two-word slogan) over the
years. In light of the above statement, do you think that the
campaign will manage to hold its sway or lose its impact in
the near future? Give reasons to support your arguments.
• Yes, We think that the Absolut Vodka campaign will
manage to hold its sway in the future.
• The ads of Absolut Vodka create curiosity among the
customers
• Advertising experts tout Absolut ads are brilliant
• The contents of the ads gets updated when a product is
launched.
Absolut Thank