Absolut Vodka

Absolut 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...