Skyy Vodka
Introduction
As the #1 domestically made US vodka, Skyy Vodka’s mission is to provide a premium vodka with the purest, smoothest taste with less impurities than any other vodka. Skyy Vodka is the number one choice of bartenders for the ultimate mix of style and taste. While Smirnoff and Absolut continue to lead in market share, we want to differentiate Skyy among these competitors by emphasizing both of these attributes. We plan to reposition the brand as a “step up” from all other vodka. We aim to highlight the smooth, stylish, and sophisticated features of Skyy Vodka and make it the spirit-of-choice among young professionals.
In its distinctive blue bottle, Skyy comes in six different vodka flavors, offering a taste to satisfy every …show more content…
vodka drinker. With this all-embracing product line, we will introduce Skyy as the vodka-of-choice for martini drinkers. Our goal is to change the consumer’s perception of the brand by repositioning it as a “step up” for the young professional. We aim to increase trial among this new target market, and increase purchase intent through product differentiation. We ultimately strive to increase sales and awareness and gain market share in the vodka category.
Situational Analysis
I. Environment Analysis
1. Economic forces
Overall the amount of disposable income has been increasing over past couple years. According to Bureau of Economic Analysis, Real Personal Disposable Income per Capita is generally increasing since 2005. On August 2005, the income per capita was little over $26,750 and on September 2007 the number reached $28,750, more than $2000 increase in two years. Personal Income and Personal Consumption Expenditure has also increased over last several months in 2007, average of .4 points increase each month.
2. Legal and Regulatory forces
Due to the rising criticism on advertising exposure of Alcohol Beverages to underage, Federal Trade Commission (FTC) has set ALCOHOL INDUSTRY ADVERTISING CODES. The codes are set so that alcohol beverage companies are responsible for placements and contents of their brand advertising and marketing promotions, such as that all marketing materials are intended for adults of legal purchase age of beverage alcohol, and that at least fifty percent of the audience is expected to be above legal drinking age of beverage alcohol. There are also other restrictions such as that the codes “prohibit the use of certain characters or people in alcohol ads: actors under 25 (Beer(21)); children (Spirits(22)); Santa Claus (Beer and Spirits(23)); actors who appear to be under 21 (Beer and Spirits(24)); actors who appear to be under 25 (Wine(25)); and sports celebrities or ‘current or traditional heroes of the young’ (Wine(26)).” FTC also has conducted a series of studies on Alcohol Advertising and Marketing. The study focuses on self-regulation practices in alcohol industry. Two studies has been released in past (1999 and 2003), and currently FTC is working on the third study.
Distilled Spirits Council of the United States (DISCUS) also set Codes of Responsible Practices for Beverage Alcohol Advertising and Marketing. The codes are developed by DISCUS member companies (including SKYY Spirits Inc.) in order to “provide guidance to all those involved in the promotion of their respective brands” DISCUS releases Code Report twice a year. Even though there are minor differences between the codes set by DISCUS and FTC (such that DISCUS expects seventy percentage of the audience to be legal purchasing age), those follow similar regulatory principles; mainly focus on Advertising Placement and Content.
3. Cultural forces
According to the poll conducted by Monmouth University Polling Institute in 2007, 87% out of 801 samples think that alcohol is a major factor of youth violence.
II. Product Analysis
1. Overview
Founded in 1992, Skyy Spirits has the top domestically made US vodka. Skyy employs the technology of quadruple distillation and triple filtration in order to achieve “ultimate smoothness” (www.shopping.com). Skyy Spirits claims that “the distilling process eliminates toxins, results in cleaner vodka that makes the morning after less painful.”
2. Product Line
Skyy offers a different taste for every vodka drinker. There are six vodka flavors including the original Skyy Vodka, Skyy Melon, Skyy Citrus, Skyy Vanilla, Skyy Orange, Skyy 90, and Skyy Berry. For a blend of lemon, lime, and all-things citrus, the refreshing Skyy Citrus Vodka is perfect for crisp and delicious cocktails. Skyy Vanilla adds a perfect touch of spiciness and sweetness for a more exotic cocktail. Or, there is Skyy Berry for a scrumptious blend of berry flavors. For a light flavor, Skyy Melon has a unique mix of mouthwatering sweetness. Skyy Orange gives a burst of succulent flavor. Skyy90 is an exceptionally luxurious, using the finest ingredients to deliver superior taste in the most modern design.
3. Pricing & Distribution
A 375ML bottle of Skyy Vodka usually averages between $15 to $25 in the United States. Company distributes Skyy Vodka nationally and in more than 100 markets outside of the United States. Skyy Spirits also distributes outside brands. Skyy is the exclusive US importer for Campari, Cutty Sark Scotch Whisky, Cinzano vermouths, and other spirits. As of May 20, 2007, Skyy Vodka sales reached 61.2 million dollars, about 6.4 points increase from prior year.
III. Industry Analysis
The Alcohol Industry has been a thriving part of global culture for decades, vital to this nation’s economy and a significant part of its history. Currently, Skyy Vodka’s direct industry – distilled and blended liquors – is valued at approximately $95 billion. Furthermore, the industry continues to grow in America, as seen in the 3.1% increased consumption between 2003 and 2004. Vodka sales rose 4% over the year as well. Unfortunately, global sales appear to be falling at a very similar rate, with Tequila being the only category to rise in the last 10 years. Vodka has been the most stable, losing only 0.7% of sales over the 10-year period. The Alcoholic Beverage industry is currently dominated by a few very large companies, which in turn branch off and offer a variety of subsidiaries and products. However, unlike the brewing industry where there is an emerging duopoly, the Distilled liquors industry has a wider spread of companies. As a result, each of these companies can produce the various distilled liquors – Vodka, Gin, Whiskey, Tequila, and Rum – to sell to different markets. Furthermore, the various classes and qualities of these liquors allows for a discrepancy in pricing.
The current fad for businesses in the Alcohol industry has been to infuse foreign substances and flavors to improve the taste or effect of their product. For instance, emerging P.I.N.K. Spirits are infused with caffeine and Ginseng to improve their effects. Whether this trend will remain is questionable, but Skyy has steered clear from the trend so far, their only exception being Skyy Citrus.
VI. Consumer Analysis
1. Marketing and Geographic Segmentation
Based out of San Fransisco, Skyy Vodka began targeting in that area, went on to market to The United States, and now is a global phenomenon.
The Company forged a partnership with Gruppo Campari, one of the top ten spirit companies in the world, which helped expand the brand name and its future success.
2. Targeting
Skyy Vodka is known as a “brand high above others” It is stylish and fashionable. Targets young professionals and studies also show that 40% of the total sales are from underage drinkers.
3. Demographic Profile
The age band that Skyy Vodka targets is easily shown in its ads. Skyy vodka uses a distilling process that eliminates toxins, which results in a cleaner vodka that makes the morning after hangover less painful. This appeals to the demographic of the young male or female, looking to go out and have a good time, but will not have to worry about the morning after. Popular in high end, hip clubs in cities that attract the young night partier. Social class would entail a large age group. The advertisements provide a fresh sexy look to vodka, with a futuristic look, which Skyy is trying to show. The Ultra-premium vodka has a commitment to move forward into the future. The ultimate vodka and the perfect mixer. Hosts parties with celebrities such as Justin Timberlake, Alyssa Milano, and Eva Longoria. Themed parties such as Playboy, Maxim, The MLB All-Star game, InStyle, and ESPN. These attract the young jetsetter and trendy club …show more content…
enthusiast
4. Cosumers Motivations
To find the perfect high end vodka that tastes good and is enjoyable. One of the most expensive vodkas on the market, consumers want the best, and this is the best. An overnight phenomenon in the United States in 1992, it has maintained its reputation for amazing quality. It is a learned motivation, from either seeing others use this product or advertised on television, they are usually driven to buy Skyy Vodka from these influences.
V. Competition Analysis
The three main competitors are Smirnoff Vodka (Diageo), Absolut Vodka (V&S), and Grey Goose (Bacardi).
1. Smirnoff
Smirnoff vodka is currently the #1 selling vodka in the US and the world and the brand is distributed in 130 different countries. The vodka itself is made with grain and de-mineralized water and filtered through charcoal and therefore has a dry crisp/clean taste. Smirnoff’s strength is the varieties of vodka and malt beverage they produce. They currently sell 13 flavors of vodka (ex. Cranberry, Lime, Orange, etc.) and 8 flavors of malt beverages (ex. Watermelon, Wild Berry, Raspberry, etc.). The price of the original Smirnoff (750ml bottle) is about $17. Since the release of malt beverages (Smirnoff Ice), Smirnoff has increased its growth and according to Hoovers’ company database, their recent 1-year sales growth was 19.5%, $15,760.7(mil.) in sales and they currently have 21% in the market share.
2. Absolut
Absolut Vodka is a Swedish brand owned by Vin&Spirit Group.
The vodka itself is made from locally grain wheat and well water from Athens. It has a smooth, light licorice taste. Absolut currently sells 14 different kinds of flavors including vanilla, citron, ruby red, etc and the price of a 750ml bottle is about $30. Their most power strength is the creativities and ideas put into the design of the bottles. Absolut’s popularity is mostly derived from its ad campaign, using the famous Absolut bottle. Since the 1980s, Absolut has come up with more than 1500 ads and bottle designs, using modern art, and increased its awareness as a “modern drink”. According to Reuters, Absolut Vodka has increased growth by 7% and now holds 11% of market share in the
US.
3. Grey Goose
Grey Goose is a vodka brand originated in France but was recently acquired by Bacardi & Company Limited in 2004. Bacardi & Company Limited currently have 40% of share in the sprit market in the US. Grey Goose vodka is made from French wheat from the south of Paris and spring water from Gensac that is naturally filtered through champagne limestone. The strength of Grey Goose is price ($37 for a 750ml bottle). Grey Goose priced its product high above other competitors (Smirnoff, Absolut, Skyy), and this high price gained high-class consumers through creating a perception of high quality.
SWOT Analysis
Strength
• Fashionable, stylish
• Triple distilled, high quality product
• Not much hang over
• Well-known
• Number one "domestically" made
• Attainable price Weakness
• Struggling to differenciate from other competitors
• Sales
• SKYY BLUE (malt beverage) failed
• Expensive compare to Sminoff (NO1 selling brand in the U.S and world)
Opportunities
• Growing Industry in the United States
• More than 200 new product/line extention in last five years
• Underage drinkers (recent study shows that about 40% of total sales is from underage drinkers)
• 33% global share in Bottled Vodka Market
• Super-premium vodka sales is increasing more than 10 points (SKYY launched SKYY 90 in 2007) Threats
• Alcohol beverage is generally a shrinking market worldwide
• Vodka is too commodified
• Backfire/criticism from underage drinking
• more than 200 new product/line extension in last five years, high competition
• Overall alcohol consumption declines
SWOT Strategies
While SKYY brand is somewhat find its position industry, as "better-than-value," it is not strong enough to draw attention from the audience. While Smirnoff continues top the industry, premium vodka such as Grey Goose is also increasing their sales with the growth of premium and super-premium vodka market. Compared to those products, the brand image of SKYY seems little bit weak, doesn't really succeed to differentiate SKYY products from competitors. Thus, SKYY Spirits need to be re-positioned. One of the strengths is pricing, as it is not cheap yet still affordable for most people, including college students and young professionals. Thus, we believe that by building emotional ties to these strengths, we will be able to position the product as “professional yet attainable” vodka, which is ideal for all young professionals who are seeking a great social life.
Personal Income and Outlays. Bureau of Economic Analysis. November 1, 2007. November 6, 2007 <http://www.bea.gov/newsreleases/national/pi/2007/pdf/pi0907.pdf> A Review of Industry Efforts to Avoid Promoting Alcohol to Underage Consumers. Federal Trade Commission. 1999. 15 Oct. 2007 <http://www.ftc.gov/reports/alcohol/alcoholreport.shtm> Alcohol Advertising and Marketing Report to Congress. Federal Trade Commission. 2003. 1-74. 14 Oct. 2007 <http://www.ftc.gov/os/2003/09/alcohol08report.pdf>. "Discus." Distilled Spirits Council of the United States. 2007. 17 Oct. 2007 <http://www.discus.org/responsibility/code/read.asp>. "A Review of Industry Efforts to Avoid Promoting Alcohol to Underage Consumers." Federal Trade Commission. 1999. 18 Oct. 2007 <http://www.ftc.gov/reports/alcohol/alcoholreport.shtm>. Poll. Monmouth University Polling Institute. Polling the Nation, 2007. 18 Oct. 2007 <Monmouth University Polling Institute>. Murray, Barbara. "Sky Spirits, LLC." Hoovers. 2007. 13 Oct. 2007 <www.hoovers.com>. Skyy." Skyy Vodka. 10 Oct. 2007 <www.skyy.com>. United States Top 10 Spirits Brands Ranked by Dollar Sales and Percent Change for Year Ending May 20, 2007. Beverage Industry. Stagnito Company, 2007. 18 Oct. 2007 <http://search.rdsinc.com.proxy.emerson.edu/texis/rds/suite2/+zce2uvherxbtqA6sWs8xK9WxxFqrnMnG5dD/full.html> Distilled and Blended Liquors." Encyclopedia of American
Industries. Online Edition. Thomson Gale, 2006. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale Group. 2007. http://galenet.galegroup.com/servlet/BCRC Baar, Aaron. "Miller, Molson Coors Merge Ops." AdWeek 9 Oct. 2007. 17 Oct. 2007 <http://www.adweek.com/aw/national/article_display.jsp?vnu_content_id=1003655709>. "Alcoholic Beverages." Encyclopedia of Global Industries.
Online Edition. Thomson Gale, 2007. Reproduced in Business and Company
Resource Center. Farmington Hills, Mich.:Gale Group. 2007. "Skyy." Skyy Vodka. 10 Oct. 2007 <www.skyy.com>. Perner, Lars. "Consumer Psychologist." The Psychology of Consumer. University of Southern California. 06 Oct. 2007 <www.consumerpsychologist.com>. Murray, Barbara. "Diageo Plc." Hoovers. 15 Oct. 2007 <http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=hhrxrtrfrtsthf>. Smirnoff Ice. 15 Oct. 2007 <http://us.smirnoffice.com/>. Spain, William. "Diageo Driven by Sales, Market Growth." Market Watch. 16 Feb. 2006. 15 Oct. 2007 <http://www.marketwatch.com/News/Story/Story.aspx?guid={B7C84175-AB45-49FF-871B-659825F54D02}&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo>. Murray, Barbara. "V&S Vin & Sprit AB." Hoovers. 15 Oct. 2007 <http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=stfxyyhyshjfjy>. "Absolut Vodka Gaining U.S. Market Share." Flexnews. 14 Mar. 2007. Reuters. 16 Oct. 2007 <http://www.flexnews.com/pages/7743/Spirits/Sweden/absolut_vodka_gaining_us_market_share.html>. Absolut Vodka. 15 Oct. 2007 <http://absolut.com/>. Murray, Barbara. "Bacardi & Company Limited." Hoovers. 7 Nov. 2007
<http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=stfxyyhyshjfjy>.
As the #1 domestically made US vodka, Skyy Vodka’s mission is to provide a premium vodka with the purest, smoothest taste with less impurities than any other vodka. Skyy Vodka is the number one choice of bartenders for the ultimate mix of style and taste. While Smirnoff and Absolut continue to lead in market share, we want to differentiate Skyy among these competitors by emphasizing both of these attributes. We plan to reposition the brand as a “step up” from all other vodka. We aim to highlight the smooth, stylish, and sophisticated features of Skyy Vodka and make it the spirit-of-choice among young professionals.
In its distinctive blue bottle, Skyy comes in six different vodka flavors, offering a taste to satisfy every …show more content…
vodka drinker. With this all-embracing product line, we will introduce Skyy as the vodka-of-choice for martini drinkers. Our goal is to change the consumer’s perception of the brand by repositioning it as a “step up” for the young professional. We aim to increase trial among this new target market, and increase purchase intent through product differentiation. We ultimately strive to increase sales and awareness and gain market share in the vodka category.
Situational Analysis
I. Environment Analysis
1. Economic forces
Overall the amount of disposable income has been increasing over past couple years. According to Bureau of Economic Analysis, Real Personal Disposable Income per Capita is generally increasing since 2005. On August 2005, the income per capita was little over $26,750 and on September 2007 the number reached $28,750, more than $2000 increase in two years. Personal Income and Personal Consumption Expenditure has also increased over last several months in 2007, average of .4 points increase each month.
2. Legal and Regulatory forces
Due to the rising criticism on advertising exposure of Alcohol Beverages to underage, Federal Trade Commission (FTC) has set ALCOHOL INDUSTRY ADVERTISING CODES. The codes are set so that alcohol beverage companies are responsible for placements and contents of their brand advertising and marketing promotions, such as that all marketing materials are intended for adults of legal purchase age of beverage alcohol, and that at least fifty percent of the audience is expected to be above legal drinking age of beverage alcohol. There are also other restrictions such as that the codes “prohibit the use of certain characters or people in alcohol ads: actors under 25 (Beer(21)); children (Spirits(22)); Santa Claus (Beer and Spirits(23)); actors who appear to be under 21 (Beer and Spirits(24)); actors who appear to be under 25 (Wine(25)); and sports celebrities or ‘current or traditional heroes of the young’ (Wine(26)).” FTC also has conducted a series of studies on Alcohol Advertising and Marketing. The study focuses on self-regulation practices in alcohol industry. Two studies has been released in past (1999 and 2003), and currently FTC is working on the third study.
Distilled Spirits Council of the United States (DISCUS) also set Codes of Responsible Practices for Beverage Alcohol Advertising and Marketing. The codes are developed by DISCUS member companies (including SKYY Spirits Inc.) in order to “provide guidance to all those involved in the promotion of their respective brands” DISCUS releases Code Report twice a year. Even though there are minor differences between the codes set by DISCUS and FTC (such that DISCUS expects seventy percentage of the audience to be legal purchasing age), those follow similar regulatory principles; mainly focus on Advertising Placement and Content.
3. Cultural forces
According to the poll conducted by Monmouth University Polling Institute in 2007, 87% out of 801 samples think that alcohol is a major factor of youth violence.
II. Product Analysis
1. Overview
Founded in 1992, Skyy Spirits has the top domestically made US vodka. Skyy employs the technology of quadruple distillation and triple filtration in order to achieve “ultimate smoothness” (www.shopping.com). Skyy Spirits claims that “the distilling process eliminates toxins, results in cleaner vodka that makes the morning after less painful.”
2. Product Line
Skyy offers a different taste for every vodka drinker. There are six vodka flavors including the original Skyy Vodka, Skyy Melon, Skyy Citrus, Skyy Vanilla, Skyy Orange, Skyy 90, and Skyy Berry. For a blend of lemon, lime, and all-things citrus, the refreshing Skyy Citrus Vodka is perfect for crisp and delicious cocktails. Skyy Vanilla adds a perfect touch of spiciness and sweetness for a more exotic cocktail. Or, there is Skyy Berry for a scrumptious blend of berry flavors. For a light flavor, Skyy Melon has a unique mix of mouthwatering sweetness. Skyy Orange gives a burst of succulent flavor. Skyy90 is an exceptionally luxurious, using the finest ingredients to deliver superior taste in the most modern design.
3. Pricing & Distribution
A 375ML bottle of Skyy Vodka usually averages between $15 to $25 in the United States. Company distributes Skyy Vodka nationally and in more than 100 markets outside of the United States. Skyy Spirits also distributes outside brands. Skyy is the exclusive US importer for Campari, Cutty Sark Scotch Whisky, Cinzano vermouths, and other spirits. As of May 20, 2007, Skyy Vodka sales reached 61.2 million dollars, about 6.4 points increase from prior year.
III. Industry Analysis
The Alcohol Industry has been a thriving part of global culture for decades, vital to this nation’s economy and a significant part of its history. Currently, Skyy Vodka’s direct industry – distilled and blended liquors – is valued at approximately $95 billion. Furthermore, the industry continues to grow in America, as seen in the 3.1% increased consumption between 2003 and 2004. Vodka sales rose 4% over the year as well. Unfortunately, global sales appear to be falling at a very similar rate, with Tequila being the only category to rise in the last 10 years. Vodka has been the most stable, losing only 0.7% of sales over the 10-year period. The Alcoholic Beverage industry is currently dominated by a few very large companies, which in turn branch off and offer a variety of subsidiaries and products. However, unlike the brewing industry where there is an emerging duopoly, the Distilled liquors industry has a wider spread of companies. As a result, each of these companies can produce the various distilled liquors – Vodka, Gin, Whiskey, Tequila, and Rum – to sell to different markets. Furthermore, the various classes and qualities of these liquors allows for a discrepancy in pricing.
The current fad for businesses in the Alcohol industry has been to infuse foreign substances and flavors to improve the taste or effect of their product. For instance, emerging P.I.N.K. Spirits are infused with caffeine and Ginseng to improve their effects. Whether this trend will remain is questionable, but Skyy has steered clear from the trend so far, their only exception being Skyy Citrus.
VI. Consumer Analysis
1. Marketing and Geographic Segmentation
Based out of San Fransisco, Skyy Vodka began targeting in that area, went on to market to The United States, and now is a global phenomenon.
The Company forged a partnership with Gruppo Campari, one of the top ten spirit companies in the world, which helped expand the brand name and its future success.
2. Targeting
Skyy Vodka is known as a “brand high above others” It is stylish and fashionable. Targets young professionals and studies also show that 40% of the total sales are from underage drinkers.
3. Demographic Profile
The age band that Skyy Vodka targets is easily shown in its ads. Skyy vodka uses a distilling process that eliminates toxins, which results in a cleaner vodka that makes the morning after hangover less painful. This appeals to the demographic of the young male or female, looking to go out and have a good time, but will not have to worry about the morning after. Popular in high end, hip clubs in cities that attract the young night partier. Social class would entail a large age group. The advertisements provide a fresh sexy look to vodka, with a futuristic look, which Skyy is trying to show. The Ultra-premium vodka has a commitment to move forward into the future. The ultimate vodka and the perfect mixer. Hosts parties with celebrities such as Justin Timberlake, Alyssa Milano, and Eva Longoria. Themed parties such as Playboy, Maxim, The MLB All-Star game, InStyle, and ESPN. These attract the young jetsetter and trendy club …show more content…
enthusiast
4. Cosumers Motivations
To find the perfect high end vodka that tastes good and is enjoyable. One of the most expensive vodkas on the market, consumers want the best, and this is the best. An overnight phenomenon in the United States in 1992, it has maintained its reputation for amazing quality. It is a learned motivation, from either seeing others use this product or advertised on television, they are usually driven to buy Skyy Vodka from these influences.
V. Competition Analysis
The three main competitors are Smirnoff Vodka (Diageo), Absolut Vodka (V&S), and Grey Goose (Bacardi).
1. Smirnoff
Smirnoff vodka is currently the #1 selling vodka in the US and the world and the brand is distributed in 130 different countries. The vodka itself is made with grain and de-mineralized water and filtered through charcoal and therefore has a dry crisp/clean taste. Smirnoff’s strength is the varieties of vodka and malt beverage they produce. They currently sell 13 flavors of vodka (ex. Cranberry, Lime, Orange, etc.) and 8 flavors of malt beverages (ex. Watermelon, Wild Berry, Raspberry, etc.). The price of the original Smirnoff (750ml bottle) is about $17. Since the release of malt beverages (Smirnoff Ice), Smirnoff has increased its growth and according to Hoovers’ company database, their recent 1-year sales growth was 19.5%, $15,760.7(mil.) in sales and they currently have 21% in the market share.
2. Absolut
Absolut Vodka is a Swedish brand owned by Vin&Spirit Group.
The vodka itself is made from locally grain wheat and well water from Athens. It has a smooth, light licorice taste. Absolut currently sells 14 different kinds of flavors including vanilla, citron, ruby red, etc and the price of a 750ml bottle is about $30. Their most power strength is the creativities and ideas put into the design of the bottles. Absolut’s popularity is mostly derived from its ad campaign, using the famous Absolut bottle. Since the 1980s, Absolut has come up with more than 1500 ads and bottle designs, using modern art, and increased its awareness as a “modern drink”. According to Reuters, Absolut Vodka has increased growth by 7% and now holds 11% of market share in the
US.
3. Grey Goose
Grey Goose is a vodka brand originated in France but was recently acquired by Bacardi & Company Limited in 2004. Bacardi & Company Limited currently have 40% of share in the sprit market in the US. Grey Goose vodka is made from French wheat from the south of Paris and spring water from Gensac that is naturally filtered through champagne limestone. The strength of Grey Goose is price ($37 for a 750ml bottle). Grey Goose priced its product high above other competitors (Smirnoff, Absolut, Skyy), and this high price gained high-class consumers through creating a perception of high quality.
SWOT Analysis
Strength
• Fashionable, stylish
• Triple distilled, high quality product
• Not much hang over
• Well-known
• Number one "domestically" made
• Attainable price Weakness
• Struggling to differenciate from other competitors
• Sales
• SKYY BLUE (malt beverage) failed
• Expensive compare to Sminoff (NO1 selling brand in the U.S and world)
Opportunities
• Growing Industry in the United States
• More than 200 new product/line extention in last five years
• Underage drinkers (recent study shows that about 40% of total sales is from underage drinkers)
• 33% global share in Bottled Vodka Market
• Super-premium vodka sales is increasing more than 10 points (SKYY launched SKYY 90 in 2007) Threats
• Alcohol beverage is generally a shrinking market worldwide
• Vodka is too commodified
• Backfire/criticism from underage drinking
• more than 200 new product/line extension in last five years, high competition
• Overall alcohol consumption declines
SWOT Strategies
While SKYY brand is somewhat find its position industry, as "better-than-value," it is not strong enough to draw attention from the audience. While Smirnoff continues top the industry, premium vodka such as Grey Goose is also increasing their sales with the growth of premium and super-premium vodka market. Compared to those products, the brand image of SKYY seems little bit weak, doesn't really succeed to differentiate SKYY products from competitors. Thus, SKYY Spirits need to be re-positioned. One of the strengths is pricing, as it is not cheap yet still affordable for most people, including college students and young professionals. Thus, we believe that by building emotional ties to these strengths, we will be able to position the product as “professional yet attainable” vodka, which is ideal for all young professionals who are seeking a great social life.
Personal Income and Outlays. Bureau of Economic Analysis. November 1, 2007. November 6, 2007 <http://www.bea.gov/newsreleases/national/pi/2007/pdf/pi0907.pdf> A Review of Industry Efforts to Avoid Promoting Alcohol to Underage Consumers. Federal Trade Commission. 1999. 15 Oct. 2007 <http://www.ftc.gov/reports/alcohol/alcoholreport.shtm> Alcohol Advertising and Marketing Report to Congress. Federal Trade Commission. 2003. 1-74. 14 Oct. 2007 <http://www.ftc.gov/os/2003/09/alcohol08report.pdf>. "Discus." Distilled Spirits Council of the United States. 2007. 17 Oct. 2007 <http://www.discus.org/responsibility/code/read.asp>. "A Review of Industry Efforts to Avoid Promoting Alcohol to Underage Consumers." Federal Trade Commission. 1999. 18 Oct. 2007 <http://www.ftc.gov/reports/alcohol/alcoholreport.shtm>. Poll. Monmouth University Polling Institute. Polling the Nation, 2007. 18 Oct. 2007 <Monmouth University Polling Institute>. Murray, Barbara. "Sky Spirits, LLC." Hoovers. 2007. 13 Oct. 2007 <www.hoovers.com>. Skyy." Skyy Vodka. 10 Oct. 2007 <www.skyy.com>. United States Top 10 Spirits Brands Ranked by Dollar Sales and Percent Change for Year Ending May 20, 2007. Beverage Industry. Stagnito Company, 2007. 18 Oct. 2007 <http://search.rdsinc.com.proxy.emerson.edu/texis/rds/suite2/+zce2uvherxbtqA6sWs8xK9WxxFqrnMnG5dD/full.html> Distilled and Blended Liquors." Encyclopedia of American
Industries. Online Edition. Thomson Gale, 2006. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale Group. 2007. http://galenet.galegroup.com/servlet/BCRC Baar, Aaron. "Miller, Molson Coors Merge Ops." AdWeek 9 Oct. 2007. 17 Oct. 2007 <http://www.adweek.com/aw/national/article_display.jsp?vnu_content_id=1003655709>. "Alcoholic Beverages." Encyclopedia of Global Industries.
Online Edition. Thomson Gale, 2007. Reproduced in Business and Company
Resource Center. Farmington Hills, Mich.:Gale Group. 2007. "Skyy." Skyy Vodka. 10 Oct. 2007 <www.skyy.com>. Perner, Lars. "Consumer Psychologist." The Psychology of Consumer. University of Southern California. 06 Oct. 2007 <www.consumerpsychologist.com>. Murray, Barbara. "Diageo Plc." Hoovers. 15 Oct. 2007 <http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=hhrxrtrfrtsthf>. Smirnoff Ice. 15 Oct. 2007 <http://us.smirnoffice.com/>. Spain, William. "Diageo Driven by Sales, Market Growth." Market Watch. 16 Feb. 2006. 15 Oct. 2007 <http://www.marketwatch.com/News/Story/Story.aspx?guid={B7C84175-AB45-49FF-871B-659825F54D02}&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo>. Murray, Barbara. "V&S Vin & Sprit AB." Hoovers. 15 Oct. 2007 <http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=stfxyyhyshjfjy>. "Absolut Vodka Gaining U.S. Market Share." Flexnews. 14 Mar. 2007. Reuters. 16 Oct. 2007 <http://www.flexnews.com/pages/7743/Spirits/Sweden/absolut_vodka_gaining_us_market_share.html>. Absolut Vodka. 15 Oct. 2007 <http://absolut.com/>. Murray, Barbara. "Bacardi & Company Limited." Hoovers. 7 Nov. 2007
<http://premium.hoovers.com.proxy.emerson.edu/subscribe/co/factsheet.xhtml?ID=stfxyyhyshjfjy>.