Global Marketing

Absolut Vodka Defining and attacking for a better position

in the global vodka market

Global Marketing

Table of Contents
Introduction to Absolut Vodkas History............................................2
Introduction to Absolut Vodka..........................................................2
The Brand of Absolut Vodka.............................................................3
Target Group................................................................................... 4
Marketing Methods.......................................................................... 4
Absolut Vodkas Campaigns..............................................................5
Absolut Vodka in the Global Market..................................................6
Absolut Vodkas Competition.............................................................6
Absolut Vodka SWOT- analysis..........................................................7
Strengths of Absolut Vodka.....................................................................7
Weaknesses of Absolut Vodka.................................................................8
Opportunities of Absolut Vodka...............................................................8
Threats of Absolut Vodka........................................................................9

Absolut Vodka Case Study..............................................................11

Question
Question
Question
Question

1............................................................................................11
2............................................................................................11
4............................................................................................12
5............................................................................................12

Bibliography.................................................................................. 12

Global Marketing

Introduction to Absolut Vodkas History

Absolut Vodka is a Swedish Vodka brand established by Lars Olsson Smith in
1879. When Smith first introduced fractional distillation, which means it
produces liquor without fusel alcohol, it was called Absolut Rent Brnnvin
(means Absolutely Pure Vodka). It was and still is produced in hus, Sweden.
Around this time, nowadays the very famous, shape of the bottle got its design.
The Absolut Vodka bottle got its inspiration from a traditional Swedish
pharmacy bottle design, which dates back to the sixteenth century. Lars Olsson
Smith challenged Stockholms liquor monopoly, and sold it outside the city
border for a lower price, which he was very successful in. In year 1917,
Swedens alcohol industry was monopolized, and the Absolut Rent Brnnvin
was now owned by Vin & Spirit AB, and started selling all over the country.
In year 1979, Absolut Rent Brnnvin became upper-price range vodka, and
then also the name was changed to Absolut Vodka. Also in 1979 Absolut Vodka
was introduced to the international market and started to sell in the U.S. Their
first shipment 90,000 liters and after that they have been growing all around
the world.
In 2008, a French company, Pernod Richard, bought the Absolut Company for
5.63 billion. The acquisition led Pernod Richard to become the second largest
vodka producer, and to catch up with the sales of their biggest rival Diageo
(Hollesen 2014).

Introduction to Absolut Vodka

Absolut Vodka, as I already earlier told is a Swedish Vodka brand, now owned
by the French spirit company Pernod Richard. Absolut Vodka is known all over
the world, and has become to be called as a somewhat icon in the vodka
industry.

Global Marketing

Absolut Vodka is premium vodka, which means it is basically more filtrated and
distilled. It also leads it to be a more upper-price ranged vodka. It has 17
different permanent flavors, which included for example, the basic Absolut
Vodka, Absolut Peppar, Absolut Citron, and Absolut Kurant etc. It also has a lot
of limited edition bottles and different bottle campaigns, which I will tell more
about later. Absolut Vodka also has one super premium vodka, called Absolut
Elyx. Absolut Vodka tried to launch a new product in the FAB market in 2004,
called Absolut Cut, which would have been a ready mixed drink that consumers
could have drank straight our of the bottle. They launched it in Canada,
Australia and U.K, but they failed with their attempt.
Since Absolut Vodka became a part of Pernod Richard, their revenue increased
to 8.2 billion. Other known brands that Pernod Richard owns are: Havana Club,
Jameson Irish Whiskey, Kahlua, Malibu and Beefeater. Absolut Vodka is sold in
around 130 countries, and sold about 100 million liters in 2011-12. This also
comprises to Pernod Richards largest share of all their products and also
accounts for more then half of the imported vodka sales in the U.S (Hollesen
2014).

The Brand of Absolut Vodka

Absolut Vodka has become icon in the vodka market and the marketing world.
They have a clear brand image that revolves around three basic words; clarity,
simplicity and perfection. The brand image has always been a main focus for
the

company,

and

they

have

absolutely

succeeded.

They

have very

successfully combined creativity and persistency, with different campaigns and

still keeping the base of the bottle always the same. You can see aspects of
persistency through their logo design, personal graphic design and visual
image. Absolut Vodka has managed to keep their image young and hip, still not
too young to fit a lower middle-age target group. Absolut Vodka has genius
brand management and creative marketing campaigns for example in an

Global Marketing

absolute world. They have managed to create brand awareness around the
world trough fashion, art, music and sponsoring events etc. (Alvesson 2013)

Global Marketing

Target Group
Absolut Vodkas target group basically about men and women in the age range
between 25 to 40 year olds. The target group is value-driven shoppers and
they usually also has some kind of brand loyalty to Absolut Vodka. Their
marketing methods are fitting for consumers who dont respond to traditional
luxury marketing, but more to a creative kind. This is also very good way to
target urbanites, who also belong to their target group and enjoy the
perception of the brand. An urbanite is person who inhabits a major city. They
are affluent consumers that have an optimistic outlook of life that differ a lot
from life in small towns or rural areas. Their main characteristics are city-proud,
time-poor, brand-centric, trend-sensitive, media-literate and culturally aware.
These characteristics fit well with Absolut Vodkas brand, and reacts especially
to their marketing methods and campaigns (Krashinsky 2013) (Elliott 2007).
I think Absolut Vodka has found a way to create a very good and strong target
group for them to aim for. Because Absolut Vodka differs from the rest of its
rivals, it has found a good group that I dont think that many companies target
or succeed in targeting.

Marketing Methods
Absolut Vodka has a strong use of campaigns in their marketing methods. They
differ the campaigns fit different events or situations, and by this way they
reach a lot of customers with their advertisement. The bottle itself is also used
as a marketing method. The shape is so known that consumers can connect it
to the brand itself. This gives Absolut Vodka more freedom in their
advertisement, and takes away the need to have the bottle in the ad itself,
even

though

they

still

use

the

shape

in

most

of

the

ads.

Absolut Vodka has done world of content-based marketing, by having their

bottles shown in a series of TV-shows, movies and music videos. For example

Global Marketing

Swedish House Mafias song Greyhound, was a big hit, but Absolut Vodka wasnt
really satisfied still with the result. Jonas Thlin, Absolut Vodkas Vice-President
of Global Marketing stated that video didnt really tell much about the brand
(Greenfield 2014). They have also done a lot of collaboration with known artists.
Absolut Vodka has a good PR and media recognition, through influential people
like Andy Warhol and Lenny Kravitz, who are well known around the art and
music scene. Absolut Vodka launched a campaign with both off them and with
this got a lot of media recognition. Absolut Vodka wants to create experiences
through living art projects, like what Absolut Vodka calls Art Bars. In these Art
Bars they organize events, which draw people to, and interesting experience
and people remember an eventful night forever. Absolut Vodkas website is full
of inspiring pictures from past events and cocktail recopies, that has gotten a
good response from the consumers (Greenfield 2014).

Absolut Vodkas Campaigns

Absolut Vodka has done a lot of different campaigns since 1980. The most
significant have been Absolut Perfection in 1980, Absolut Art in 1985, Absolut
Statehood in 1991, Absolut Cities of Europe, In an Absolut World in 2007 and
Absolut Unique in 2013. The bottle has been the fundamental concept in all the
campaigns for over 25 years.
The campaign Absolut Perfection has been the most used one for a long time. It
was the first campaign and determined the way the rest of the campaigns
would go for a long time.
The campaign Absolut Art was their first camping working with a lot of
influencal artist like Andy Warhol and Keith Harring. Absolut Statehood was a
campaign spanning for to years in the U.S. The campaign focused of art from
local artist from the 50 states of America and the District of Columbia. Absolut
Vodka had different art works appear in magazine USA Today every other week.
After this campaign 300 lithographs were sold, and the money gathered from

Global Marketing

these art works was donated to the national US organization Design Industries
Foundation for AIDS (DIFFA) (Absolut Ad ei pvm).
Absolut Cities of Europe is one of the most visible campaigns of Absolut Vodka
in the past 5 years. The ad was published in Newsweek, and with it came an
article about the city with information about the citys bars and restaurants.
The campaign In an Absolut World, was tried to launch before in 1997, but was
premature. In this campaign Absolut Vodka introduces a Planet Absolut where
things are different. In this world you can pay with love, men can get pregnant
and you can get a Pinocchio nose of lying (Elliott 2007).
The Absolut Unique is a product and a marketing campaign, that they say its
the brand itself is creating the product. Absolut Vodka maybe the production
line to create variation and randomness to get 4 million unique bottles. They
bottles where numbered and randomized and shipped all around the world
(Tepper 2012)

Absolut Vodka in the Global Market

Absolut Vodka is known worldwide and is sold in 130 different countries. It
started first its export to U.S in 1979. Absolut Vodka sold around 100 million
liters of Absolut in 2011. Absolut Vodka tried to explore the FAB (flavored
alcoholic beverages) market in 2004, but failed. Absolut Vodkas standings are
the strongest compered with total volume distribution 9.7% in North America,
with a market share of 10.3% and the weakest in Eastern Europe with a market
share of 1.3%. Eastern Europe would be a very important market for Absolut
Vodka to increase their market share in, because the volume share of
distribution of vodka is 80.9%. In Asia-Pacific, where the market is growing but
the total distribution is only 1.4% of the total volume in the world, Absolut
Vodkas share is a good 10.9% (Hollesen 2014).

7
Figure 1: Distribution of world vodka sales by volume and value. (2011)
(Hollesen 2014)

Global Marketing

Absolut Vodkas Competition

Absolut Vodkas biggest competitors are Smirnoff, Stolichnaya, Finlandia and
Grey Goose. Smirnoff is the biggest vodka manufacturer in the world (2011)
and has double the sales as Absolut Vodka. Grey Goose is a newcomer in the
premium vodka market, and shows a lot of potential, and that is why it is one of
the competitors.

We made a small price and quality comparison with the

different brands (Hollesen 2014) (Under the Label 2014) (Wine Enthusiast 2014).

8
Figure 2: Vodka compersion

Global Marketing

Absolut Vodka SWOT- analysis

SWO
T
THREATS
Grey Goose & Smirnoff
Alcohol & Marketing Law
Politics
Religion
Healthy Lifestyle

STRENGHTS
Unique marketing
Brand image & story
Leading posoition
Variation of flavours
Visuality & Awards
OPPORTUNITIES
Largen target group
Brand loyalty
Growing vodka market
Trade barriers

WEAKNESSES
Price
Same styled campaigns
Narrow target market
Weak position in East Europe

Figure 3: SWOT-analysis of Absolut Vodka

Strengths of Absolut Vodka

One of the strengths of Absolut Vodka is unique marketing, their brand image
and story. Absolut Vodka has a different way to do marketing, and they are very
creative about it. Their ads are often connected to them automatically. Absolut
Vodka also has a lot of different campaigns that reach a lot of different
campaigns that reach a lot of different people. Absolut Vodka has a strong
brand image already and they have found their way to separate themselves
from their rivals. I think this is actually one of their strongest strengths. Absolut
Vodkas background story is really different from their rivals; they could use this
more for their advantage.

Global Marketing

Their leading position is already strong, but they still have to try to increase
sales to go past Smirnoff Vodka in sales (Hollesen 2014). Absolut Vodka has a lot
of variation in flavors and in their bottle designs. This is a good strength,
because the consumer can keep buying the same product without getting
frustrated non-existing variation. Todays trends and ins and outs change very
quickly, which often makes it hard for one product to stay in a high position for
really long. This wont be a problem to Absolut Vodka with all their variation in
flavor and bottle design.

Their last strength is their visuality and the

recognition they have gotten from that. You can be able to see Absolut Vodka in
movies, TV-series, art and your also able to hear them in music. They have had
a major influence especially in the art section. They have been helping young
artist with letting them design bottles for them and do artwork for Absolut Art,
which is a website where you can buy art made by these artist. It has gotten
many awards for their inspiring and different ads (AbsolutArt 2015). Also they
have done a lot of work with well-known artist, like Andy Warhol, which has
given Absolut Vodka a lot of media recognition (Absolut Ad ei pvm).

Weaknesses of Absolut Vodka

Absolut Vodkas weaknesses might be their price.

Many consumers dont

maybe want to spend that much money on alcohol, which is not a problem
now, but might at some point turn in to that if things changes. Absolut Vodkas
campaigns often follows a same patter, they all have the bottle or at least the
shape of the bottle in the ad, which could get too repetitive for some
consumers (Pernod Richard 2015).
Absolut Vodkas target group is a little bit narrow, and concentrates on a really
specific group of people. The price could be a problem here. If the young target
group stops being so value driven, they might not want to buy a more
expensive alcoholic beverages. Absolut Vodkas target group doesnt really fit
the older middle-age people, which are a big group and a big part of Smirnoffs
target group (Hollesen 2014).

10

Global Marketing

Absolut Vodkas positioning in the European market has always been lower
compered to the U.S market, especially in Eastern Europe and Russia where the
vodka consumption is one of the largest in the world (Hollesen 2014). If Absolut
Vodkas rival companies get a hold of this market area, it would grow their sales
and Absolut Vodka could loose their current position in the global vodka
market. In this area especially, it is hard for Absolut Vodka to compete with all
the local vodka brands with much lower prices. Also Eastern European and
Russian areas doesnt really fit to Absolut Vodkas target group directly.

Opportunities of Absolut Vodka

As I describe in the weaknesses a narrow target group could become a
problem. Absolut Vodka still has the opportunity to expand their target group
through for example campaigns, and get to advance closer to their biggest
rival Smirnoff on the level of sales. Brand loyalty is an opportunity to Absolut
Vodka. They could somehow take more advantage of brand loyalty, by
organizing some events for loyal customers or etc. and which this get
consumers to be more loyal to the brand, instead of buying the brand now and
then.
The growing vodka market is growing all over the world. This is a great
opportunity for Absolut Vodka to expand their market share. In the last ten
years the U.S vodka market itself has grown around 65% in volume. The article
in Gin & Vodka states that premium vodkas have a bigger demand than earlier,
it has increased in the last year by 7.6% (Gin & Vodka 2015).
Trade barriers are disappearing and its getting cheaper and easier to export
around the world, especially in Europe. This helps Absolut Vodka to explore new
markets easier and lower expenses in exporting (Froman 2014).

Threats of Absolut Vodka

Absolut Vodka already has a threat from Smirnoff Vodka, owned by Diageo, and
they could have a possible threat from the newer vodka brand Grey Goose,
11

Global Marketing

owned by Bacardi (Bacardi 2012) (Diageo 2015). Smirnoff is already in a leading

position in the vodka market in U.S, with double the sales as Absolut Vodka. It
has been really hard for Absolut Vodka to try to come out of this situation, and
their situation hasnt really changed. Now the newcomer in the vodka market,
Grey Goose, has started to grow in the U.S market too. If they keep growing,
they could harm Absolut Vodkas current position.
The laws about alcohol and marketing are getting stricter in a lot of parts of the
world, especially in Scandinavia.

This is absolutely a big threat for Absolut

Vodka. For example in Finland, the strong alcohol is sold as a monopoly only in
a state owned liquor store (Alko 2013). Also in the last couple years the alcohol
taxes have been rising, which raises prices of the products. Also in 2015,
Finland passed a new law about marketing of alcoholic products, which
prevents companies to advertise alcoholic products. This harms Absolut Vodka;
because they cant do advertising. There are some loopholes in this law, for
example, a company can sponsor an event and through that have their logo
showing in banners or flyers etc. (Finlex 2015). If this law starts being more
common, it could harm Absolut Vodka and other companies in the alcohol
industry.
Politics affect trade barriers and that can make it difficult to export alcohol to
some countries. Sometimes it can even put a company to a situation where
there is suspicion of bribery and that gives the company a bad image. One
other subject that can be a threat for Absolut Vodka is religion. For example in
the Arabic countries it is prohibited to drink alcohol as a Muslim, and this
lowers the level of alcohol consumption in these countries. It can be hard or
even pointless to try to export products to these countries. It can increase
expenses and not be worth it in value.

12

Global Marketing

Absolut Vodka Case Study

Question 1
What was the main motive for Pernod Richards acquisition of V&S (including
Absolut Vodka) in 2008?

The main goal for the acquisition with V&S was to get Absolut Vodka as a
product.

It

gave

Pernod

Richard

an

opportunity

to

grow

as

manufacturer, as they did. Before the acquisition Pernod Richard was

only among the worlds 20th leading vodka manufacturers, when Absolut
Vodka was a part of their products, they became the 2 nd leading vodka
manufacturer. They got the opportunity to expand their market, both
geographically and with sales, and this grew their companys revenue to
8.2 billion (2011). The deal increased Pernod Richards sales to a closer
to Diageos level, which was the global spirit leader (Hollesen 2014).

Question 2

13

Global Marketing

Which alternative marketing strategies should the Absolut Company have to

increase its market share for Absolut Vodka in US?

I would keep going to the same direction; the past proves that has
worked well. The marketing strategies could some more outbound
marketing to reach new customers. This way you would get as much as
possible potential consumers to see the advertisement.

Also for this

Absolut Vodka could launch a new and different campaign to reach a

larger target market, his would lead to increase on the market share. Do
more collaboration with influencers and that way Absolut Vodka might
get a bigger market share. If it wouldnt be too expensive, Absolut Vodka
could create a campaign that consumers could create their own Absolut
bottle. This could reach loyal customers. Absolut Vodka should also invest
more in digital marketing, e.g. create a cocktail app or a social media
contest (Hollesen 2014).

Which alternative marketing strategies should the Absolut Company have to

increase its market share for Absolut Vodka in Europe (incl. Eastern
Europe)?

To increase marketing shares in Europe, I would recommend doing some

guerilla marketing in festivals and more visibility in nightlife. In Europe it
would be a good idea to launch the FAB market again. I think the FAB
market would be popular in Europe, for example in Spain. Digital
marketing with social media contest would be popular in Europe, if the
legislation does not cause problems.

For the Eastern European part I

would conduct a research for doing the segmentation and seeing what
gets them to buy the product (Hollesen 2014).
Which alternative marketing strategies should the Absolut Company have to
increase its market share for Absolut Vodka in other parts of the World?

14

Global Marketing

In China Absolut Vodka already has a high position in the vodka market,
which is continually growing. In rest of Asia Absolut Vodka could try to do
a charity campaign, which could be attractive to Asians. Otherwise just
put more recourse to outbound marketing (Hollesen 2014).

In Australia it could be good to create more local campaigns, invest more

in outbound and digital marketing. Also trying to relaunch the FAB market
could be a good investment. I would say the earlier try to launch it was
premature (Hollesen 2014).

In Arabic countries, investment to airport areas and more visibility in

events. Also investing to have more visibility in large hotel chains and try
to do a wider segmentation.

Question 3
In which region (country) of the world would you recommend Absolut Vodka to
allocate more marketing resources?

I would recommend Absolut Vodka to I allocate more marketing resources

in Russia and in Eastern Europe. The total volume of vodka sales is
largest in this part of the world with 80.9%. Absolut Vodkas market share
is low in this area (1.3%). If Absolut Vodka would succeed to do a
attractive marketing campaign in Eastern Europe and Russia, they could
increase their market share and maybe pass Smirnoffs positioning in this
area (Hollesen 2014).

15

Global Marketing

Question 4
Did Absolut Vodka have the right competences for achieving international
success for its Absolut Cut?

For achieving success for Absolut Cut, I think Absolut Vodka had the
wrong competences. I think the marketing for this new product was
lacking and not effective enough. I also think Absolut Vodka should have
bind the marketing and the product more to the image and brand of the
company. Absolut Vodka tried to launch it in Canada, Australia and the
U.K, of which I dont think Canada is a suiting country. I think the product
was prematurely launched and felt a little bit forced. Absolut Vodka
should have done it by their own conditions and not just attempt to reach
competitors, with products like Bacardi Breezer and Smirnoff Ice (Hollesen
2014).

Question 5
Should Absolut Vodka relaunch a mixer product in the global FAB market?

I think Absolut Vodka should relaunch Absolut Cut. I think it has good
potential to succeed the second time. They could launch the same
product or change it a little. But they should change it to a drink with a
fresh and urban image. Also this time around they could try to connect it
more to the Absolut Vodka image, and maybe even get loyal consumers
to favor this drink as well. It would be good to connect the drink to
nightlife, festivals and vacation spots, where you can relax and enjoy the

16

Global Marketing

drink. The name was good, but the cut the crap campaign was a failure
from my viewing point (Hollesen 2014).

Bibliography
2014. http://www.winemag.com.
Absolut Ad.
http://www.absolutad.com/absolut_about/history/advertising/#absolut_statehoo
d.
"AbsolutArt." 2015. http://www.absolutart.com/eu/?
gclid=CLDD04blgsYCFSrJtAod5HQAIg.
Alko. 2013. http://www.alko.fi/alko-oy/yritys/hallinto-ja-johto/.
Alvesson, Mats. The Triumph of Emptiness: Consumption, Higher Education,
and Work Organization. Oxford Univeristy Press, 2013.
Bacardi. 2012. http://qa.bacardi.com/de2/start.
Diageo. 2015. http://www.diageo.com/en-row/Pages/default.aspx.
Elliott, Stuart. The New York Times. 2007.
http://www.nytimes.com/2007/04/27/business/media/27adco.html?_r=0.
Finlex. 2015. http://www.finlex.fi/fi/laki/alkup/2014/20140152.
Froman, Michael. "National Trade Esitmate Report on Forgein Trade Barriers."
ustr.gov. 2014. https://ustr.gov/sites/default/files/2014%20NTE%20Report
%20on%20FTB.pdf.
Gin & Vodka. 2015.
http://www.ginvodka.org/factsheets/Vodka_Market_Global_Picture.asp.
Greenfield, Rebecca. Fast Comapny. 2014.
http://www.fastcompany.com/3032598/most-creative-people/the-evolution-ofabsolut-vodkas-advertising-strategy.
Hollesen, Svend. Global Marketing. Sixth Edition. Pearson, 2014.
Krashinsky, Susan. 2013. http://www.theglobeandmail.com/report-onbusiness/industry-news/marketing/absolut-vodka-strives-for-authenticity-in-adsaimed-at-millennials/article14205567/.
Pernod Richard. 2015. http://pernod-ricard.com.
Tepper, Rachel. The Huffington Post. 2012.
http://www.huffingtonpost.com/2012/09/13/absolut-unique-vodkabottles_n_1882025.html.
17

Global Marketing

Under the Label. 2014. http://vodka.underthelabel.com.