Examining the Vodka
Industry:
Smirnoff vs. Absolut
BIA Presentation
By Blair Coward and Mollie Jo Holman
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Company and Product
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Owned and produced by
Diageo, a British company.
Brand began with a vodka
distillery founded in
Moscow.
It is now distributed in 130
countries.
Smirnoff products include
vodka, flavored vodka, and
malt beverages.
Smirnoff No 21 Vodka:
The world's leading vodka.
Results 2008
-25.1 million 9-litre cases
-8% volume growth
-12% net sales growth
Top five markets
1.US
2.Great Britain
3.Canada
4.Brazil
5.South Africa
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Situational Analysis
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In 2006, vodka was the largest growth category of any major
international spirits sector.
Total global consumption in 2006 increased 1.6%, or over 8m
cases, to top 513.5m cases, according to the International Wine
and Spirit Record estimates.
Recession-weary U.S. vodka drinkers are switching to lower-priced
rivals such as Smirnoff, Skyy and Svedka, this has hurt Absolut.
• Smirnoff is the largest vodka in
the U.S. by volume Absolut is the
second-largest, according to
research firm Beverage
Information Group.
Competition Analysis
Brand
Smirnoff
Absolut
Grey Goose
Svedka
Skyy
Producer
Diageo
Ad Campaign Summary
Used to emphasize purity and its premium-status, now
markets interactive “Be There” campaign focusing on
sharing special moments in life.
Long running ad campaign based on the distinctive
Pernod Ricard bottle shape and the phrase “Absolut_____.” Currently
“In an Absolut World.”
Bacardi
Marketed as a premium brand vodka and has luxurious
lifestyle brand to correspond, for those who value
refined subtleties in all aspects of life.
History of overt sexual ads, newest campaign set in
Constellation
2033: introduces futuristic, party-going fembot
Brands
Svedka_Grl, “Voted #1 vodka of 2033.”
Focused on Skyy Infusions with bold ads highlighting
SKYY Spirits
the blue bottle and the colors of the infusion and
LLC
sexualized art.
Competition Analysis
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“Diageo's Smirnoff -also lower-priced than Absolut- has
been outperforming its rival.”
◦(David Kesmodel. (2009, September 4). Corporate News: Absolut's U.S. Sales Fall, Pressuring Its New Parent --- Pernod Ricard Bet Big on
Brand Last Year, but Recess.ion Has Led Some Americans to Turn to Less Expensive Vodkas. Wall Street Journal)
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Smirnoff's volume in North America rose 1% in Diageo's
fiscal year ended June 30. The company has been
offering mail-in rebates for Smirnoff and other brands this
year in U.S. newspaper ads.
It also for the first time rolled out new flavors of Popov,
one of its discount vodkas, whose sales have risen in the
economic slump.
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Smirnoff Campaign Objectives
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To provide a platform for brand and
consumer content around “Be There,”
while using an engaging interface to
communicate the brand’s tone.
“Be There” Positioning
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“The campaign marks a shift away from a traditional
marketing approach and aims to inspire consumers to
experience and create exceptional, unexpected and
inexplicable there moments for themselves,” said Anita
Robinson, marketing director for Smirnoff.
“Be There” Messaging Strategies
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Focus on being there in the moment
Emphasizes having fun and sharing it with friends
Focus on being social , friendly, and lifestyle based, as
opposed to previous positioning emphasizing purity and
its premium-status
Target Audience Segmentation
Smirnoff “Be There”
New campaign focuses on men
and women 18-35.
Looking for a cheaper option but
still high quality.
Found mostly on the web.
Enjoy having a good time, good
sense of humor.
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“In an Absolut World”
Messaging Strategies
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New take on and
continuation of “In
an Absolut World”
Recovery from
Spring campaign.
Emphasis on
tradition, creativity,
being genuine,
classic yet modern
and ready for the
future.
Target Audience Segmentation
In An Absolut World
Men and women 21–50.
Looking for a high-quality,
reasonable vodka
Wish to savor and enjoy
beverage
Enjoy perception of class
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Smirnoff’s Tactics
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“Be There” Campaign (7/13/09)
Commercials and online videos
Promotional Parties
Contest: suggest moment
Interactive Website
Media Tie-in
Facebook
Print and interactive ads (which
have not been released yet)
Absolut’s Tactics
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First TV spot
Making of TV spot
Print Ads
Interactive Website
Online Ads
Utilization of Facebook and
Youtube
Share your inspiration
feature
iphone application
Results of Smirnoff’s “Be There”
Campaign
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Smirnoff sales are increasing due to the economy
Too early to tell direct impact from campaign
Mixed reviews from Critics
Success to be based on level of interaction and
response from possible consumers
Suggested Ways to Improve Smirnoff’s
IBP
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Clean up the
website and make
it more navigable,
since so much is
website-based.
Tie back in the
purity factor.
Suggested Ways to Improve
Absolut’s IBP
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Stick to the classic Absolut
values
Emphasize clarity and purity
- “classic yet modern” nature
of the brand
Tie commercial to print
endeavors as part of more
cohesive campaign
Reincorporate the bottle
Smirnoff Weaknesses that Suggest
Opportunity for Absolut
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Website hard to navigate
Approach is very different from
previous efforts-will it resonate?
Isolate part of market?
Difference between being in the
moment and sharing the moment.
Very reliant on online media/events
Emphasis on social media, yet no
visuals of phones, cameras, etc.
Campaign grows out of smaller
marketing project in 07-08-will
consumers find it hackneyed?
Suggestions for Absolut
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The U.S. accounts for more than half of the brand's
retail revenue and the majority of its profits, according to
the industry journal Impact and analysts.
Restoring volume growth in the U.S. will be "key," even
though Absolut enjoys healthy growth in countries like
Brazil and Mexico, said Laetitia Delaye, an analyst with
Kepler Capital Markets in Paris.
Conclusions
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Absolut should stay the course
Smirnoff campaign great concept but
flawed in its deviation from its core
values and a
poor execution
• Absolut can take advantage of Smirnoff’s
deviation to present itself as the pure,
classic, and innovative choice for
consumers