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Week 5 Case Study Analysis

Case Study A

Q The following template is an example template which has to be strictly followed for completing the Week 5 Case Study Analysis (Case # 9-Absolut Vodka) [Please note that the headings from 1 to 19 will be exactly the same as provided in the template]: EXAMPLE of CASA Application Case Analysis Study Approach (CASA) 1. Industry & Market – the Alcoholic Beverage Industry enjoys a Global Market 2. External Environment – the industry is highly regulated and taxed on the state level in the United States, meaning, each state regulates how the industry may operate within its boundaries. 3. Internal Environment – The industry classification breaks down the distilled-spirit group into three categories, (1) brown goods, (2) white goods, which includes the case study subject, Absolut Vodka, and (3) specialties. 4. Financial Analyses – the Imported Vodka industry sales were on an upward trend, opposite the distilled-spirits and domestic vodka sales history in that period. 5. Economic Condition for Industry – by 1986, the distilled-spirits industry was on a downward slide for about five years. 6. Key Trending Factors – • Demographic – Those having attended college, single with household incomes of $50K or more in the Middle Atlantic region. • Social – promoting the brand to specific consumer groups and looking at market trends. • Economic – sales growth was on the upswing for imported vodka • Environmental - Another consideration is the industry’s effects on society. The influence on alcohol abuse and drunk driving. 7. SWOT Analysis – • Strength: in 1979, the U.S. was an open market for Absolut. They were looking for a distributor in a field where they did not currently have one. Strong leader in Mr. Roux. • Weakness: Costly advertising methodology, and distributor’s concentration on another brand than Absolut. Also odd-shaped bottle. • Opportunity: Niche marketing to expand market share, and flavored Vodka market • Threat: International political and industry regulatory impacts. Also odd-shaped bottle 8. Key Issues of the case – Marketing and advertising efforts to increase market share. 9. Critical Issue of the case that needs attention first – mismatch between traditional market-research techniques and the Absolut marketing strategy 10. Assumptions in the recognition of this critical issue – • The Swedish government was looking for a U.S. importer for Absolut • Stoli’s enjoyed an 80%share of the imported vodka sales • U.S. Vodka sales were rising. Foreign vodkas’ 22 percent growth attracted a rush of new importers 11. Two to three alternatives to address this critical issue – • Capturing the “Youth” markets • Capturing specific ethnic markets • Focusing on “Super Premium” products 12. Choose one of the alternatives to implement – focusing on its being a “Super Premium” product 13. Describe the overshadowing strategy you propose and within which this alternative fits – Target market for Absolut would be anyone over the age of 21 with the ability 14. Explain your plan to implement this alternative – • Advertise stressing Absolut’s Swedish origins • Target upper income trend-setting, artsy crowd • Market Absolut as a luxury item • Market to the “ferociously hip” crowd 15. Identify the critical organizational functions of the organization needed for implementation – • Copy and Media • Special Events and Promotion • Budget • Production 16. Identify the processes needed from each of these critical functions for implementation – • Copy and Media: punning on “absolute” using the superlative. Expanding media outlets beyond the standard weekly news, emphasizing the medium but focusing on the bottle. • Special Events and Promotion: Themes of music, art and fashion • Budget: increasing budget for advertising to reverse declining sales. • Production: ads were costly though generating huge media coverage, especially the much anticipated Christmas special ads. 17. Describe the Balance Scorecard metrics to measure the success of this implementation – (These Four Measures must be shown each with quantitative target goals to measure strategic success) • Financial: Set goals to increase gross sales by 20% and market share by 5% • Customer: Absolut enjoyed between 51 and 56 percent of the imported vodka market in the U.S. Survey the customer base to measure current satisfaction and then aim to increase this by 20% over the upcoming year. • Internal business processes: Measure initial social media hits and challenge the team to increase this by 30% within the first quarter of the new ad campaign. Set a goal to enter 2 new social media avenues in the upcoming year • Learning: Train employees in the new social media tools and require passage of a subsequent test by 75% with a maximum of 2 attempts to pass. 18. Describe any actual or hypothetical ethical concerns with this critical issue and plan implementation – the causal link between advertising and alcohol abuse and drunk driving. Alcohol should not be marketed towards those under the legal drinking age in any country. In the case of a country where no minimum age for consumption or purchase exists, beverage alcohol should not be marketed to those under the age of majority, as defined in that country. (consider this preventive maintenance planning) 19. Describe any actual or hypothetical environmental concerns with this critical issue and plan implementation – increase in excise taxes, governmental restrictions placed on advertising adult beverages and political fallout from the Russia boycott. U.S. Surgeon General Taskforce recommendation to raise excise taxes, reduce tax deductions for advertising allowances, placement of warnings and restricting advertising. (consider this preventive maintenance planning) 20. Describe any actual or hypothetical social concerns with this critical issue and plan implementation – effects of alcohol on society and the role of advertising in consumption, its influence in general, and on “abuse” versus “use”. (consider this preventive maintenance planning) I recommend continuing marketing Absolut as a “Super Premium” product, a luxury item. This focus has proven to have provided positive results growing its market share to the current respectable levels that it enjoys. Absolut is now recognized as leader in creative yet unconventional advertising. The partnership with its advertising firm has been quite a successful venture resulting in the Absolut seasonal campaigns as a yardstick of great advertising, as well as being one of the most anticipated advertising campaigns in the industry. Including messages of consumer responsibility and assimilating a similar emphasis as Anheuser-Busch’s “Know When to Say When” campaign would be very advisable as well.

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Case Study Analysis : Absolut Vodka 1. Industry & Market – It is a British alcoholic-beverage marketing firm and was owned and developed by the Swedish government and later on introduced by the U.S. government in 1979. After the 21st Amendment, the U.S government had allowed regulation of the sale of alcoholic beverages which led to an increase in retail outlets for the sale of alcohol. 2. External Environment – A three-tier system of distribution of alcoholic beverages was regulated in the state. In this situation, the sale of alcohol was regulated and taxed highly. Wholesalers are restricted to operate only in one state. All the licensed retailers were required to buy from the wholesalers (Kenyon et al., 2007). 3. Internal Environment – The Company’s products were segregated into three kinds of distilled spirit groups of brown goods, white goods, and specialties. Brown goods consist of whiskeys, white goods contain gin, vodka, rum, and tequila and specialties involve brandy, liquors, and cocktails. 4. Financial Analyses – The alcoholic beverage industry showed an upward trend in imported Vodka sales showing an increase in 17% of sales. This was opposite to the sales in domestic and distilled-spirits vodka sales in the past. Domestic vodka players had sales down by 8 to 10%. 5. Economic Conditions – During the 1982-86 periods, there was a downward trend in vodka sales. In such a scenario, despite the increase in domestic vodka sales of 17%, the total vodka sales reduced to 3.8%. Amongst the domestic vodka sellers, Smirnoff and Wolfschmidt had a decrease of 8 to 10% in vodka sales (Musonera et al., 2008). 6. Key Trending Factors • Demographic – The firm targeted the women as the rising consumer group and also the younger group in the age range of 18 to 21 years. Thus, they were targeting people who were below 35 years and above the age of 21 years and has the urge to drink (Cheung, M. 2012). • Social – Absolut Vodka targeted the specific consumer group consisting of women and children in a way that maintains the market trends. • Economic – There has been an increase of 17% in imported vodka sales which has been able to sustain the decrease in domestic vodka sales. • Environmental – The increase in the sale of Absolut Vodka has affected society leading to issues of alcohol abuse and drunk driving situations. 7. SWOT analysis – • Strength – Absolut Vodka started to operate in an open market in 1979 when there was a need for a distributor of vodka. With the strategies enacted by Mr. Roux, Absolut vodka was able to flourish in the market. • Weakness – The main demerits were strong competition from the rise of other alcoholic beverages in the market. Moreover, the promotional cost was also expensive. The sale also decreased due to its uneven shape of the bottle (Fugate, D. L. 1993).