Positioning of Absolut Vodka

Absolut Positioning. This report will describe the concept of positioning, effective positioning and its relation to segmentation. It will analyse the positioning of Absolut vodka in its market share. In this report the relevant positioning criteria will be identified and appropriate positioning maps to support the analysis will be used. In addition, suggestions on how to improve and develop the Absolut’s positioning will be given as well. In order to apply the relevant academic theory to the positioning of Absolut Vodka brand the definition and idea of positioning concept needs to be identified.

Adcock, Halborg and Ross (2001) provide the positioning definition made by Ries and Trout that say that it is ‘what happens in the mind of customers. ’ Brassington and Pettitt (2003) write that positioning ‘means thinking about a product in the context of the competitive space it occupies in its market, defined in terms of attributes that matter to the target market. ’ It is possible to state that positioning is the identification of position of certain brand and its total image among different other brands in the minds of target audience.

Positioning includes the evaluation of competitive advantages and brand’s niche. The main purpose of positioning is to achieve sustainable view in the minds of consumers about the brand as the best one in particular sphere. It is known that all offered services and products are taking their place with main goal to satisfy customer’s wants and needs. Consequently, in case with effective positioning goods and services have to ‘promise the benefit the customer will receive, create the expectation, and offer a solution to the customer’s problem’, according to http://www. marketing91. com.

Effective positioning needs to be unique and realistic, it has to be related to current position, should be long term and yet updated and improved during the time period. Also, product needs to be in the mind of customers’. According to Wind (1980), there are six principles for product positioning. Firstly, positioning can be based on product one and only feature. Also, positioning may be related to product’s benefit that may satisfy consumer’s wants and needs. Besides, positioning can be based according to usage and/or occasion. Additionally, products can be based on competitors and on product class.

Another principle that company can use to position product is to base it on user category. Segmentation In order to run business successfully it is essential to understand the concept of market segmentation. Backer (2003) argues that ‘positioning is easy. Market segmentation is difficult. Positioning problems stem from poor segmentation’. Company needs to work only with segment that has been chosen. Absolut Facts (Appendix 1) Speaking about Absolut Vodka, the first question that comes up is: “Why such unsophisticated drink has become so successful and popular? when Russian vodka was the most recognised product, occupying the whole niche in industry, when Absolut’s bottleneck was too short for barman to handle and the whole bottle caused the negative associations with pharmacy jars. The answer to the question is: an excellent positioning strategies and advertising actions. Position Absolut possess itself as premium vodka that is not just an alcoholic drink, but lifestyle. It is shown as a beverage for the sophisticated and upper-end people; it is ‘for status buyers who are not open to snob appeal, but open to wit’. Absolut targets people ‘under 35’, those who are ‘ferociously hip’.

Absolut has created the conditions, when people are ready to pay premium price (price is 15% higher than most expensive vodka brands) to join the ‘bohemian’ coterie that appreciates the high quality vodka. Due to great positioning and advertising actions the brand itself is now associated with art, music and singers, luxurious clubs that represent the Absolut diction. ‘Once marketers identify the position they would like to occupy in the market, they design a unique marketing mix that will support that position by reaching that target market and meeting its needs’ –Bovee, Houston, Thill (1995).

The combination of promotion, product, price and place will assist in the brand’s positioning in order to distinguish it from competitive companies. Marketing mix in case with Absolut: Promotion is the ‘business of communicating with customers’ – The Times 100. In order to promote the brand Absolut releases the limited bottle editions, creative ads etc. Product One of the famous brand’s features is bottle’s shape that is shown in creative, humorous and trendy manner. Also, there is much attention paid to Sweden culture, history and background of vodka.

Additionally, there is no doubt that company emphasises on quality of Absolut using high technologies, sources and products in order to maintain its status of super premium spirit. Price As it was mentioned, price is very high compared to other vodka manufacturers. However, Absolut is targeting the certain segment of people that are willing and ready to pay more for status drink. Place The Times 100 explains that ‘place is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. According to www. absolut. com there are famous Ice bars in London, Stockholm, Copenhagen and Tokyo under Absolut brand. This fact again supports the idea that Absolut is not a drink but lifestyle. Positioning map ‘Once the positioning has been completed for all the relevant attributes, it is useful to be able to visualise the complete picture graphically, by creating a perceptual map of the market’ as Brassington and Pettitt (2003) explain. Using http://oliver. efri. hr/~medmark/dokumenti/absolute_vodka. pdf and Mintel’s Vodka – UK – March 2009 report the positioning map for vodka brands may be structured as following:

Platinum vodka – the price is higher than ? 40 for 70cl (Mintel) Super premium vodka – is ? 25 or more for 70cl (Mintel) Premium – ? 14. 94-? 24. 99 for 70cl (Mintel) Own-label – ? 4. 82-? 21. 83 according to http://www. supermarketownbrandguide. co. uk Mintel provides the diagram (Appendix 2) that shows the UK market share of vodka, 2008. According to that, it is possible to state that Absolut competes with Smirnoff Red which ‘in the UK is the brand leader ‘the sophisticated one’ the establishment’ – Adcock, Halborg, Ross (2001). Smirnoff is less expensive and yet quality (around ? 1 per bottle) and is famous because of its ‘Russia-ness’ (however, it is known Smirnoff comes from Connecticut, USA). Suggestions For Absolut it is important to continue its development researching its competitors and stick with its target market. Company has to be very sensitive to its customers’ demand changes and actions of competitors (direct and potential) – their profitability, weaknesses and strengths. Absoult needs to understand and know competitors as much as it is possible. Company ‘should not be surprised if it falls to stay ahead’ as Backer (2003) states. Bibliography

Adcock, D, Halborg, A, Ross, C (2001). Marketing principles and practice. 4th ed. Essex: Financial Times Management. p172-177. Backer, M (2003). The Marketing Book. 5th ed. Oxford: Butterworth Heinemann. p106. Brassington, F, Pettitt, S (2003). Principles of Marketing. Essex: Financial Times. p116-197. Courtland, B, Houston, M, Thill, J (1995). Marketing. 2nd ed. NY: McGraw-Hill. p202 Kotler, P, G Armstrong, J Saunders and V Wong, 1999, Principles of Marketing, second European edition, (Upper Saddle River: Prentice Hall) Wind, Y, 1980, Going to Market: new twists for some old tricks, Wharton Magazine, 4

Absolut. (2012). Absolut Vodka. Available: www. absolut. com. Last accessed 16th Apr 2012. Bhasin, H. (2010). Effective positioning. Available: http://www. marketing91. com/effective-positioning/. Last accessed 15th Apr 2012. Oliver, E. (2010). Absolut Vodka. Available: http://oliver. efri. hr/~medmark/dokumenti/absolute_vodka. pdf. Last accessed 16th Apr 2012. Supermarket own brand guide. (2012). Spirits. Available: http://www. supermarketownbrandguide. co. uk/search. php? SearchString=vodka;Search. x=69;Search. y=18;score;price=0;pricevalue=0. 0;table=spirits. The Times 100 ; Wilson and Wilson Publishing Ltd. (2011). Marketing mix. Available: http://businesscasestudies. co. uk/business-theory/marketing/marketing-mix-price-place-promotion-product. html#ixzz1s6QeVriC. Last accessed 15th Apr 2012. Mintel Vodka, UK, March (2009). Vodka – can fashion last forever. [Online] Available at: http://academic. mintel. com/sinatra/oxygen_academic/search_results/show;/display/id=393884 [Accessed: April 2012]. White Spirits and RTDs, UK, March (2011). Competitive Context. [Online]. Available at: http://academic. mintel. om/sinatra/oxygen_academic/search_results/show;/display/id=545336/display/id=569847 [Accessed: April 2012]. Appendices 1. ABSOLUT VODKA, introduced in the US in 1979, is the fourth largest international premium spirit in the world and is available in more than 150 markets. ABSOLUT VODKA is the number two brand of premium vodka worldwide. (Source: Impact International) Since its launch in 1979, ABSOLUT VODKA has achieved significant worldwide sales growth, from 10,000 nine-liter cases (90,000 liters) to 11. 0 million nine-liter cases in 2010 (99. 0 millions of liters).

Every bottle of ABSOLUTVODKA is produced in Ahus, in southern Sweden. ABSOLUT VODKA is produced from winter wheat, a hardy wheat grain that gives ABSOLUT VODKA its smooth grain character. Every year approximately 80,000 tons are used to produce ABSOLUT VODKA. Over one kilo (two pounds) of grain is used for every one-liter bottle. ABSOLUT VODKA uses a unique process called continuous distillation, introduced in the nineteenth century by ‘‘The Vodka King’’, Lars Olsson Smith. ABSOLUT VODKA is distilled hundreds of times until all impurities have been removed 2.