SVEDKA

VODKA

NISARGA C
A M A N A G A RWA L –
ANVITH PRAKASH - 20071
Case Facts
Svedka Vodka is a very young and promising brand in the adult beverage industry

Vodka came to Unites States in 1965 with imported Stolichnaya followed by Smirnoff

Based on the information provided in the Svedka vodka case, We believe that mid-
pricing of Svedka vodka can capture some good volume under $10

Absolut is one brand which I believe has incorporated similar strategy as Svedka

Cuvelier has estimated approximately $350,000 to spend in his first year on marketing

He promoted his brands in prints (magazines as dominant medium), outdoor, broadcast

and electronic media

Svedka hosted various sampling event

Competitor
review
Absolut and Smirnoff occupy most of the market share from
1995-2007 it stands at 12.06% and 21.69 % respectively in
2007

Chopin and Pravda introduced in later years have the least

market share 0.15% and 0.22%

Belvedere, Ketel One and grey goose are the premium brands
have shown an increasing market share growth over the years

Although Absolut’s market share is more and stands 2nd in

the market, they are seeing a declining growth
Marketing
Campaign
Trade press and PR
Point of sales
Trade shows
Creative
Sampling
Marketing medium
significance
Objective: Run a regression of total sales on the natural log of marketing
expenditures on print, outdoor, news, magazine and broadcasting.

Analysis: R2 is 0.81 which is fairly good. It means that 81% of our values fit the
regression analysis model.

f-test: The p-value for the overall F-test is 1.09E-91.We can conclude that our
regression model as a whole is statistically significant.

Conclusion: Natural log of marketing expenditure on broadcasting and outdoor

and dollar sales significant variable’ and likely to impacts total sales

But the marketing expenditure spent on print and magazine might also have
impact on total sales in reality
 Sum of TotalSales Years
Trend Line
Vodka Brand 1995 1996 19971998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Aristocrat 590 600 605 615 620 630 640 650 660 680 700 710 720
Barton 1205 1187 12791276 1315 1383 1459 1483 1496 1614 1546 1584 1653

Sales Trend Burnett

Crystal Palac
Fleischmann's
485
530
496
260
502
595
310
568
597
325
585
648
440
620
685
435
602
763
455
592
748
485
634
780
510
620
842
545
595
861
625
575
864
735
601
941

of Vodka Gilbey's
Gordon's
Kamchatka
965
1860
1235
858
2025
1135
777
1955
1080
732
2155
725
699
1973
757
684
1750
1061
680
1592
787
690
1528
800
641
1480
818
614
1496
918
565
1448
871
567
1413
902
553
1300
915

Brands McCormick
Popov
Skol
2870
810 928 924
1418
2805 2577 2230
959
1479
2070
1012
1595
1910
1108
1701
1797
1157
1744
1710
1183
1746
1815
1206
1869
1852
1366
1906
1789
1387
2001
1753
1470
1795
1764
1591
Grand Total 10550 10034 10554 11585 11483 11866 11613 11583 11761 12381 12213 12464 12568

Growth in Premium segment of Vodka Brand 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Trend Line
Absolut 3000 3340 3440 3630 4050 4605 4379 4475 4488 4640 4636 4847 5013
Vodka Belvedere 273 306 339 369 365 381 410
Chopin 42 47 59 65 61 61 61
Major players are Absolut and Grey Goose 100 275 600 1150 1400 1650 2075 2660 3325
Ketel One 750 953 1054 1243 1438 1593 1753 1858
Smirnoff Stolicnaya 980 1055 1130 1100 1231 1350 1490 1640 1855 1935 1985 2090 2185
Grand Total 3980 4395 4570 4730 5381 6980 7737 8672 9384 10097 10715 11792 12852
Total sales of few companies in
Vodka Brand 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Trend Line
the value segment are Finlandia 240 220 183 248 252 275 342 319 327 357 365 381 362
decreasing Fris 80 83 90 123 152 195 233 275 166 192
Seagram's 890
Sky 702 820 1090 1295 1495 1694 1880 2065 2270 2390
Smirnoff 5500 5951 5565 6720 6133 5783 6298 6933 7523 7487 8149 8505 9015
Tanqueray 150 165 165 160 170 175 185 190 176
Three Olives 85 175 350 475 630 850
Tier 0 Value Segment
Grand Total 5890 6416 5996 7830 7375 7413 8243 9174 10090 10307 11329 11952 13699
Tier 1 Premium Segment
Tier 2 Standard
 Performance from
Vodka Brands 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
1995-2006
Smirnoff 24.55% 25.30% 23.74% 27.05% 24.42% 21.77% 22.66% 23.30% 23.34% 21.68% 22.40% 21.83% 21.69%
Absolut 13.39% 14.20% 14.68% 14.61% 16.13% 17.34% 15.75% 15.04% 13.92% 13.44% 12.74% 12.44% 12.06%
Grey Goose 0.40% 1.04% 2.16% 3.87% 4.34% 4.78% 5.70% 6.83% 8.00%
Sky 2.83% 3.27% 4.10% 4.66% 5.03% 5.26% 5.44% 5.68% 5.83% 5.75%
Stolicnaya 4.37% 4.49% 4.82% 4.43% 4.90% 5.08% 5.36% 5.51% 5.76% 5.60% 5.46% 5.36% 5.26%
Ketel One 2.82% 3.43% 3.54% 3.86% 4.16% 4.38% 4.50% 4.47%
McCormick 5.71% 5.89% 6.00% 6.12% 5.86% 5.42% 5.41% 5.24% 5.14% 4.32%
Popov 12.81% 11.93% 10.99% 8.98% 8.24% 7.19% 6.47% 5.75% 5.63% 5.36% 4.92% 4.50% 4.24%
Barton 5.38% 5.05% 5.46% 5.14% 5.24% 5.21% 5.25% 4.99% 4.64% 4.67% 4.25% 4.07% 3.98%
Skol 3.62% 3.95% 3.94% 3.86% 4.03% 4.17% 4.16% 3.98% 3.74% 3.96% 3.81% 3.77% 3.83%
Gordon's 8.30% 8.61% 8.34% 8.67% 7.86% 6.59% 5.73% 5.14% 4.59% 4.33% 3.98% 3.63% 3.13%
Fleischmann's 2.37% 2.54% 2.40% 2.58% 2.58% 2.75% 2.51% 2.42% 2.44% 2.37% 2.22% 2.26%
Kamchatka 5.51% 4.83% 4.61% 2.92% 3.01% 3.99% 2.83% 2.69% 2.54% 2.66% 2.39% 2.32% 2.20%
Three Olives 0.29% 0.54% 1.01% 1.31% 1.62% 2.04%
Burnett 1.11% 1.25% 1.29% 1.66% 1.57% 1.53% 1.50% 1.48% 1.50% 1.60% 1.77%
Aristocrat 2.63% 2.55% 2.58% 2.48% 2.47% 2.37% 2.30% 2.18% 2.05% 1.97% 1.92% 1.82% 1.73%
Crystal Palac 2.17% 2.11% 2.14% 2.29% 2.33% 2.33% 2.17% 1.99% 1.97% 1.80% 1.64% 1.48% 1.45%
Gilbey's 4.31% 3.65% 3.31% 2.95% 2.78% 2.58% 2.45% 2.32% 1.99% 1.78% 1.55% 1.46% 1.33%
Belvedere 0.98% 1.03% 1.05% 1.07% 1.00% 0.98% 0.99%
Finlandia 1.07% 0.94% 0.78% 1.00% 1.00% 1.04% 1.23% 1.07% 1.01% 1.03% 1.00% 0.98% 0.87% Tier 0 Value Segment
Fris 0.34% 0.35% 0.34% 0.44% 0.51% 0.61% 0.67% 0.76% 0.43% 0.46%
Tier 1 Premium Segment
Polar Ice 0.18% 0.22% 0.18%
Chopin 0.15% 0.16% 0.18% 0.19% 0.17% 0.16% 0.15%
Tier 2 Standard
Tanqueray 0.67% 0.70% 0.70% 0.64% 0.68% 0.66% 0.67% 0.64% 0.55%
Grand Total 91.16% 88.63% 90.10% 97.18% 96.53% 98.86% 99.27% 98.92% 96.91% 94.93% 94.35% 93.15% 92.15%

Market Share
Market share of Smirnoff and Absolut seem to decline as
new players enter the market segment

Analysis Growth in premium segment

 Type of Policy Sales in $Millions Count of State
Control 1301 6
Open 4641 19

Type of Policy
Top 3 states account for 24.3% of
the Distilled spirit share

All top 3 states have open policy

Svedka can target on-premise stores

in open states

With props in POS

Market Mix
• New Packaging SIMPLE AND UNCLUTTERED SHOT GLASS AND
PRODUCT GAUGE
• Emphasis on PREMIUM SWEDISH VODKA

PRICE
• Young adults who want premium quality at an affordable price
• Premium positioning, low price.

PLACEMENT • Can be a nightlife staple

PROMOTION • Seasonally appropriate, integrated with everyday life.

• Good enough for the Club. Cheap enough for a hostel.

Category 21–24 25–34 35–44 45–54 55–64 65+

Vodka 30.4 29.6 25.5 24.5 21.8 15.4

Conclusion
The company should rely most heavily on the price elasticity of demand of
the vodka market

Brand loyalty can be created with target market based on their price
sensitivity with a high-quality product

The 93-rating given is the quantitative proof that their product matches up
to the luxury brands in quality, yet multiple times less expensive

They should keep an eye out on the price sensitivity of consumers and how
consumers continue to view whichever category Svedka enters

Price skimming can be used in later stages if value for budget is not
entertained by the customers

SVEDKA should be given premium positioning and priced low