Svedka Vodka (C): Marketing Mix in the Vodka Industry
UVA-M-0803
Sept. 2, 2011
SVEDKA VODKA (C): MARKETING MIX IN THE VODKA INDUSTRY
Associated with sophistication ever since James Bond first ordered a vodka martini “shaken, not stirred,” vodka has enjoyed tremendous success over the decades leading up to SVEDKA’s debut. The vodka-enthusiast women of the hit HBO series Sex and the City provided renewed energy for vodka in early 2000, just as the more-than-40-year bump Mr. Bond had provided was losing luster. In 2007, Smirnoff was the highest-selling spirit brand worldwide (25.7 million cases) and in the United States (9 million cases). U.S. vodka sales topped $7 billion in 2007, and two spots in the top five spirit brands worldwide belonged to vodka brands Smirnoff and Absolut.1
Product Between 2000 and 2007, the number of vodka brands increased from 14 to 26. Flavors and packaging were the more popular product variations introduced. Absolut was the first to introduce flavored vodka in 1986, using three types of peppers. The company called it Absolut Peppar (peh-PAR) and proclaimed it to be perfect for a Bloody Mary. Smirnoff and Absolut introduced the most flavors, and by 2007, Smirnoff’s product line included 20 different flavors while Absolut had more than 10. Innovative packaging evolved, starting with Absolut’s recognizable shape, inspired by a vintage Swedish apothecary bottle. By 2011, brands such as Vox and Ciroc were bottled in elegant frosted glass. Price In 1997, Grey Goose invented the super-premium category, marketing a 750-ml bottle of vodka priced above $30. Vodka retail prices varied across states because of taxes and the regulation of distributors. The wholesale price of a 9L cases of vodka was above $200 for the super-premium brands such as Chopin, Belvedere, Grey Goose, and Level, whereas the prices of 1
Drinks International, “Millionaires Club Supplement,” July 2009.
-2-
UVA-M-0803
some value brands such as
Sept. 2, 2011
SVEDKA VODKA (C): MARKETING MIX IN THE VODKA INDUSTRY
Associated with sophistication ever since James Bond first ordered a vodka martini “shaken, not stirred,” vodka has enjoyed tremendous success over the decades leading up to SVEDKA’s debut. The vodka-enthusiast women of the hit HBO series Sex and the City provided renewed energy for vodka in early 2000, just as the more-than-40-year bump Mr. Bond had provided was losing luster. In 2007, Smirnoff was the highest-selling spirit brand worldwide (25.7 million cases) and in the United States (9 million cases). U.S. vodka sales topped $7 billion in 2007, and two spots in the top five spirit brands worldwide belonged to vodka brands Smirnoff and Absolut.1
Product Between 2000 and 2007, the number of vodka brands increased from 14 to 26. Flavors and packaging were the more popular product variations introduced. Absolut was the first to introduce flavored vodka in 1986, using three types of peppers. The company called it Absolut Peppar (peh-PAR) and proclaimed it to be perfect for a Bloody Mary. Smirnoff and Absolut introduced the most flavors, and by 2007, Smirnoff’s product line included 20 different flavors while Absolut had more than 10. Innovative packaging evolved, starting with Absolut’s recognizable shape, inspired by a vintage Swedish apothecary bottle. By 2011, brands such as Vox and Ciroc were bottled in elegant frosted glass. Price In 1997, Grey Goose invented the super-premium category, marketing a 750-ml bottle of vodka priced above $30. Vodka retail prices varied across states because of taxes and the regulation of distributors. The wholesale price of a 9L cases of vodka was above $200 for the super-premium brands such as Chopin, Belvedere, Grey Goose, and Level, whereas the prices of 1
Drinks International, “Millionaires Club Supplement,” July 2009.
-2-
UVA-M-0803
some value brands such as