Svedka Case Study Analysis Essay
1850 WordsNov 4th, 20138 Pages
Case Study Analysis
Summary In 1998, entrepreneur and MBA Guillaume Cuvelier was preparing for the launch of his new distilled spirit, Svedka Vodka. Cuvelier has decided to start a vodka company after working many years in the spirits industry. Vodka makes up a large share of the spirits American’s drink at 24% of all alcohol consumed (Zuckerman). Vodka consumption is also rising across the US. Svedka is going to be a newcomer in the vodka marketplace going up against many big opponents in products such as Smirnoff, Grey Goose, Stolichnya and Absolut. Cuvelier’s Svedka has gotten rave reviews from many critics for its quality, so a successful marketing campaign will not depend much…show more content…
The risks associated with this pricing option are heavily outweighed by the benefits that can be found with establishing a new market and, therefore, this option should be pursued. This strategy matches the pricing objective Cuvelier had in mind; to optimize market share (Module 8A). However, it is critical to the success of the establishment of this new market segment that Svedka successfully brand themselves.
Promotion Options and Solution Branding is critical to a successful new product launch because brands better allow a customer to identify a firm and judge the product’s quality. Brands benefit the firm in that they secure competitive advantage, allow for a price premium over competitors and create strong brand loyalty (module 7A). All of these factors are critical to a product’s final identity and the connections that consumers will associate with it. Consumers also tend to associate an added benefit with successful brands. This is known as brand equity (module 7A). Svedka had established their brand identity early on. They wanted to be known as high quality vodka at a relatively inexpensive cost.
A successful branding technique that Svedka could employ would involve piggy backing off of the success of one of their main competitors: Absolut vodka. Prior to this time, Absolut has been the sole distiller of Vodka that is exported from Sweden, and is considered to be extremely high in quality. By branding themselves as the other Swedish vodka, Svedka
Svedka Vodka – Case AnalysisSvedka Vodka is a very young and promising brand in the adult beverageindustry. Cuvelier believed that there was a lot of room to compete in the inthe vodka industry by oFering a new twist on the concept of name-brandvodka. As per him, the customers were willing to stretch their wallets. Vodka came to Unites States in 1965 with imported Stolichnaya followed bySmirnoF. Premium brands were also introduced by Grey Goose, Absolut andAmerican Skyy. As seen, this increase in Vodka brands increases thedesirability for high priced liquor and awareness of the quality of Vodka.Based on the information provided in the Svedka vodka case, I believe thatmid-pricing of Svedka vodka can capture some good volume under $10.Below is the reason on why I believe that this is possible:Large target market – Vodka consumption represents 24% of all totalspirits and target market is estimated to represent 40% of vodkamarket.80% of the market volume (also known as the “standard” vodkasegment, it ranged from $5 to $9 for 750 mL).Less competition in the mid-range pricing.Absolut is one brand which I believe has incorporated similar strategy asSvedka. Its target group was mainly Youth and working people. Similar to