The main motive for Pernod Ricard (PR) to acquire V&S is market expansion to US market as acquisition is the direct and fastest way to get access to the target market. Since V&S had already access into US market since 1980s and more than 50% of its sales are exported to US before acquired by PR. Secondly, such acquisition could obtain the inherent reputation of V&S from 20th ranking to 2nd of the world’s vodka brand and leading premium vodka manufacturer of the world. By acquiring business, PR could expand their vodka business to world easily (especially US market) for the reason that it had a well-established brand name and consumers were familiar with such brand name. Further, financial objective was another motive for such acquisition since it offered PR a viable option to broaden their vodka portfolio to Ready To Drink (RTD) and Flavoured Alcoholic Beverages (FAB) markets. Last but not least, Poland or Russia are always come with a positive COO (country of origin) of vodka (Musonera and Hemley, 2007), and Absolut Vodka (AV) is an associate product with positive COO image as it has been exported to eastern European countries for 15 years history, PR could expand all the major vodka markets across the world with a positive connation image by acquiring AV.
For US market, vodka industry is design driven among consumers’ trends. (Food Manufacturing, 2013) Hence, Absolut Vodka (AV) could emphasis the ‘Absolute Unique (AU)’ line as each of them has different design of coating and pattern. Also, it won the packaging design awarded by FAB (see below figure). It definitely could grab consumer’s attention on self and make gimmick among customers’ eyes. Thus, ‘word of mouth’ and ‘market voice’ are created which benefit to the marketing promotion. On the other hands, as importer/ agent play an important role in the distribution system in US, it is suggested that providing petro vouchers as an extra commission to salespersons if they reach certain amount of sales target in order to motivate their sales works. If possible, it is suggested AV entered US market by piggybacking on a confectionery firm, which could set up an own distribution organisation with lesser recourses. Apart from it, brand positioning is another topic to boost US market shares. The majority of AV loyalty consumers are among the aged of 35 and older. For such age group, AV could use foreign consumer culture positioning (FCCP) to build up a brand mystique around a Russian vodka image as it is perceived as a Russian related brand with a long history export. Further, AV’s product segment could be used as another driven since AV has a wide range of vodka categories, from Platinum to Popular priced, that satisfy universal needs of the mature drinkers. In contrast, AV must consider splitting demographics group to 21-34 millennial drinkers. To achieve such goal, AV could use celebrity endorsement to promote their products and then become an ‘opinion leader’ among youngsters. For instances, appears their FAB products in music clips or sponsorship of sporting and cultural events. At last, as the consumers’ tastes are very volatile in American market, AV could try to release a new flavour every season and each of them are limited editions which could fly consumers’ kites. If such product is attractive, AV could consider produce it as a permanent line.
Source: International Food and Beverage
For European market, AV facing two major challenges, competitive rival brands and weak Country-of-origin (COO). The primarily strategy to increase market share is “above the line” marketing strategy. However, EU legislation has restrictions on alcohol industry in respect of advertisement and marketing. “For instance, Ireland, Austria and France have legally banned spirits advertising on television and radio. In Portugal, advertising spirits is not allowed in cinemas and on billboards. In Sweden, Slovenia, Poland and Finland advertising of spirits is almost...
References: Ernst and Young (2009) The contribution of the spirits industry to the EU economy. [Online]. Available at http://spirits.eu/files/59/december-2010-thecontribution-of-spirits-industry-to-the-eu-economy-summary.pdf [Accessed 8 February 2014]
Food Manufacturing (2013). Consumer Trends: Design Important in Vodka Industry. [Online]. Available at http://www.foodmanufacturing.com/news/2013/09/consumer-trends-design-important-vodka-industry [Accessed 8 February 2014]
International Food and Beverage (2013) [Online]. Available at http://marketingmagazine.com.my/images/stories/pdf/FAB_winners_2013.pdf [Accessed 8 February 2014]
Musonera, E. and Hemley, D. (2013). Analysis of Global Marketing Strategies in Distilled Spirits Industry: Absolut Vodka. [Online]. Available at http://www.jgbm.org/page/9%20Etienne%20Musonera%20.pdf [Accessed 8 February 2014]
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