Case 7_ Absolut Vodka_ The Spirit of a Brand-2

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Makenna Nicholas Case 7: Absolut Vodka: The Spirit of a Brand 1. How do consumers choose vodka? What is important: image, price, taste, other? a. Consumers choose vodka by thinking about a variety of criteria. Things like taste and price in my opinion are what matters most to people and usually you will find a balance in between the 2 when making your decision. More specifically, when you are a college kid you will handle something that tastes worse as it has a cheaper price tag on it. As when you get older you might decide your taste buds are more refined now and pay a steeper wage for the more smooth flavor that it comes with. To put this into perspective in terms of brands, as a college student kids will drink things like Smirnoff, Svedka, and when they are feeling more inclined to pay a higher price they will go for an Absolut or Stoli. As for my mom, she can be seen drinking Absolut, Skyy, Stoli, and will even go for a Grey Goose, Titos, and Ketel One. She will never be seen drinking a Smirnoff or anything in that category as it is too bad for her. It all depends on the customer and their preferences. 2. What has made Absolut successful? How does Absolut's product line strategy compare with other brands in the industry? a. Absolut became so successful as it was seen as a product where you could get a lot of bang for your buck and was really about the quality of the vodka that you are getting. When it came into the market, Absolut positioned themselves in a way where they became a very middle of the road competitor. This allowed them to create competition from the more premium brands as well as the cheaper brands. But what this did very well for their company was show that they are better than the cheap cheap but they are basically just as good as the more expensive and in turn this creates business and customers coming back. Absolute also created a fun image for themselves with their commercials and made people want to try their vodka which ultimately made them shoot up with sales. When it came to their product line Absolut, they thrived in the ability to create fun, new product lines for customers to try with all the new flavors that would come out. They would do special tributes and bottles that would make people want to buy it for the packaging alone which also set them apart from other brands as well, even through economic crises. 3. What is the situation facing Absolut in 2008? What aspects of Absolut's current situation are likely to persist beyond the current economic crisis? a. Absolut is currently dealing with the potential for a loss of consumers. This is due to people trading down to a more mid-priced brand during the recession and Absolut needs to be prepared with the idea that these consumers will not come back just because it is over. This is due to the problem of consumers starting to

shift in their consumer behavior toward value and frugality and away from perceived status and quality, specifically in the food and drink industry. This is something that could persist beyond the economic crisis as although people may make the switch in the recession, if people find they are just as happy once it is over and they have more coin in their pocket, there is no reason to switch back. It is an overall shift in thinking, not just an economic situation that will come and go. As a result of this Absolut must be prepared and come up with a solution to how to fix this and how to pivot accordingly. 4. Three options are offered in the case. Which option do you choose and why? (Consider what you believe might have been the best course of action, rather than focusing on the company's actual decisions at that time) a. In my opinion, Absolut should pick the option to go with the “good-better-best” product line up. This is because although going with the first option of creating a basic vodka that is priced competitively, this does not make sense as it can ruin Absolut’s image and reputation that they have worked very hard to build. Not only this but it would be hard to position, brand, and promote since it is such an alienated line extension. Furthermore, the 2nd option is not good as it can take away from Absolut and can even take sales from them and it does not take the pressure off from Absolut either. Finally, the last option, I feel this is best as it gives everyone an option that is best accustomed to their needs, preferences, and price point. Absolut does not need to try to promote something that feels inauthentic or go against what they have built just to make sales. Ultimately this is the best as it works “regardless of the economic circumstances and provides economies of sales with respect to ads and promotional efforts” as well.

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