Case

Absolut Vodka: Absolutely Successful

Pontus Alenroth, Robert Hjornstrom, Joakim Eriksson and Thomas Helgesson*

The bottle continues to be the ce/itnipiecu in recent campaigns like 'Absolut Magic'. This ad ran/orccs the vodka's aura of ex<,'!.u sivenexs, rimelessness and slifcr magic:

Little did Lars Olsson Smith know, when he introduced a new kind of vodka called 'Absolutely Pure Vodka' in 1879, that his unique concept would become the world's leading premium vodka a century later. Lars Olsson Smith, whose portrait embellishes every Absolut Vodka bottle, was a self-made spirits tycoon in nineteenth-century Sweden. He introduced :i revolutionary new distillation method - the rectincation/eontinuous distillation mediod - which is still used today when producing Absolut Vodka. The result was a clear high-quality vodka, free from dangerous and bad-tasting by-products. As its label shows, Absolut Vodka trades on its heritage:

' Halmstad University, Sweden.

ABSOLUT

WO' if-iof g o^Stv&d/'gk Conditio/!, (Ad£ti ¿Mi soid,md&r- the. name

Despite its long traditions, Absolut Vodka is a modern success. Tn 1979, when the 100th anniversary of Absolutely Pure Vodka was approaching, Vin & Sprit, the Swedish state-owned alcohol monopoly, decided to start exporting the vodka to the United States. After objections from American authorities, the name Absolutely Pure Vodka was changed to Absolut Vodka. American consultants had surveyed the US spirits market and found 'a clearly discernible consumer trend towards "white spirits" [such as vodka, gin and white rum] as opposed to "brown spirits" [brandy, whiskey and dark rum]; white spirits are seen as being purer and healthier'. Vin & Sprit had no marketing or product design experience, so it employed outside teams of marketing and management experts to create an adequate product for the newly discovered market.

The design of the bottle was recognized at an early stage as crucial to success. The final result is almost entirely the result of the persistence of one man, Gunnar Broman. Ounnar Broman got the idea when he saw some eighteenth-century medicine bottles in the window of an antique shop in the Old Town in Stockholm. The bottles were elegant, different, simple and very Swedish. Actually vodka was sold as a medicine in not dissimilar bottles during the eighteenth and nineteenth centuries. Broman had to argue his case for more than a year until the bottle was finally approved and the manufacturing problems were overcome. The resulting Absolut bottle was very different from competitors' bottles. The new version of an old medicine bottle was considered a masterpiece in glass design. The timeless shape, the fine lines and the exceptionally clear glass distinguish Absolut from other premium vodka brands.

Independently of each other, the marketing team in Sweden and Carillon, their L'S distributors, came up with marketing strategies that were almost identical. 'All advertising should centre around the bottle, the product should not be identified with any particular lifestyle, and the approach should have a timeless yet contemporary feel to it.' Every advertisement has two features in common: the depiction of an Absolut bottle and a two- or three-word caption beginning with the word 'Absolut'. It hit the US market in 1979 and became the biggest-selling imported vodka brand. In 1997 Vin & Sprit shipped 5,5 million nine-litre cases worldwide.

The innovative way of marketing Absolut contrasted directly with that of the established brands. As David Wachsman points out, the advertising of spirits in the United States used 'one of three formats: a roomful of exceedingly happy people, a celebrity holding a glass or old-fashioned settled family life'. Then came 'Absolut Perfection' and hundreds of different ads.

Absolut Vodka is a highly priced premium vodka and therefore has an aura of up-market exelusiveness. Considering the target market and the early magazine ads (Absolut Perfection, etc.), a tie-up with the arts world was inevitable. The first step in this direction was taken in 1985 when the New York cult pop artist Andy Warhol was commissioned to paint the Absolut Vodka bottle. Today Absolut co-operates with artists and designers in all the contemporary arts. 'The purity and clarity' of the product, says Goran Lundquist, President, The Absolut Company a part of the Vin & Spirit Group, is a 'timeless source of inspiration'. There are now over 3,000 works in the Absolut collection, all featuring some aspect of the bottle or label. Like other very successful campaigns the marketing is so sensational that the product receives a huge amount of free media exposure. In Absolut's case this has even occurred in markets that did not allow alcohol advertising.

Due to the fame that Absolut's unconventional marketing has generated, the advertising agency receives thousands of requests for ad reprints of the product, which has become a modern icon. In 1993, besides having won the Effie and the Kelly awards, Absolut was honoured with an induction into the Marketing Hall of Fame. That seal of approval confirmed Absolut's success and impact on the American lifestyle, especially since the only other brands that have received such an honour are Coke and Nike. 'Absolut Art' is also achieving international recognition. Warhol's and other key US works, together with others specially commissioned from French artists Bosser and Delprat, were shown at Paris's prestigious Lavignes-Bastille Gallery in late 1994. From there, the exhibition mewed to London's Royal College of Art, where new works by British artists, including Peter Blake, were added. The exhibition then travelled in turn to Berlin, Munich and Milan.

The modest sales during the first years contrast with the current situation, where Absolut Vodka is recognized as the leading premium vodka and the second-largest vodka brand overall. Absolut Vodka gave Vin & Sprit a lifeline amidst declining Swedish demand for spirits. Siiles grow continuously over the years. Absolut is today the no. 6 bestselling spirit brand in the world with a sales volume of almost 50 million litres.

An ingenious bottle and creative marketing played a crucial part in the Absolut saga, but Vin & Sprit's distribution partnership was also crucial to its success. Recently, however, Absolut hid farewell to Carillon, its international distributor. After a long and fruitful relationship, Absolut has outgrown Carillon. The new choice is the Canadian company Seagram, the world's leading alcohol distributor with an international distribution network spanning 150 countries. With Seagram's help the Absolut Company intends to reinforce Absolut's presence in new markets, notably in Russia and Europe. It also hopes to increase its penetration in the more than 100 countries where Absolut is already present.

The Absolut Akademi aims to create 'a competitive edge through people'. 'The goal is to build a quality culture around a quality product.' Another tool in marketing is the Absolut Reflexions magazine, which is distributed in all markets. Used as a PR tool, Absolut Reflexions spreads news of the brand, its advertising and activities to consumers all over the world.

Despite Absolut's success, Vin & Sprit's profits were less than 1 per cent of turnover in 1993. At the end of 1994 Vin & Sprit lost its monopoly status in Sweden. Other producers were allowed and the company no longer had exclusive rights regarding wholesale sales to the state retail company, System-Bolaget. Vin & Sprit is tackling the problem by economizing and expanding. Its Stockholm distillery closed in 1995 to concentrate production in three remaining plants. The total number of employees was also reduced by a third.

While economizing at home Vin & Sprit aims to follow Absolut's success in the United States with an attack on the European, Asian and Pacific markets. Compared with the United States, the European market is slow growing, fragmented and conservative. Europe has many leisure drinking cultures, but these vary from region to region and there are well-established traditions everywhere. Except for countries where vodka is the national drink, the European vodka market is underdeveloped. Vodka is drunk by only 4 per cent of consumers in Europe, compared to 21 per cent of Americans. To repeat its American success, Absolut will need clever and innovative strategies tailored specifically for each of Europe's submarkets. Vin & Sprit is bullish about Absolut's chances in Europe. We have built up a wide experience of operating abroad and we are confident we can meet the competition,' says Vin & Sprit's Margareta Nystrom. The company believes that wherever there is a demand for premium vodka, Absolut Vodka is the optimal choice. 'Absolut Vodka proves itself time and time again as more than just a fine vodka: it's an idea. And nothing can stop an idea whose time has come.'

QUESTIONS

1. What is the foundation of Absolut Vodka's success? Is it the vodka, the bottle, the distribution or the promotion?

2. How does Absolut's marketing build upon American trends in the late 1980s and early 1990s? Is Absolut a fashion product that will decline with the trends?

3. Do you believe that Absolut Vodka 'is an idea whose time has come' and that nothing can stop its success?

4. Vin & Sprit's European campaign uses ads in the same style that has been so successful in the United States. Do you think the US approach will work in other regions?

5. Since Absolut Vodka is such a lifestyle product, would you recommend that Vin & Sprit should extend the brand into other markets in the same way as Virgin has extended into video games, PCs, cola and vodka?

6. Absolut's successful advertising has benefited greatly from the publicity it generated. Can advertising campaigns be designed to create such media attention or is the success of Wonderbra, Benetton and their like, just good fortune?

SOURCES: The leading article in Marketing Business (November 1992), p. 1; Absolut Reflections (July 1992, April and October 1993, February |§94); Afionbladet (10 September, 1994); Mánadens Affärer (August 1994); Gustavsson Tegnérlunden, Ilaggblom Tegnérlunden and Arne Lovgren, The Storey (Stockholm: Vin & Sprit, 1994); Greg Melvor 'Nordic drink groups shaken by changes', The European (16-22 September, 1994), p. 19; 'IPA Advertising Effectiveness Awards' (London: Marketing, 1994); Henry Sutton, 'Absolutely in the spirit of art's sake', The European (23 Oetober-3 November 1994), p. 21.

Mass Communications: Advertising ^ Sales Promotion and Public Relations

GILAPTKR OBJECTIVES

After reading this chapter, you should be able to:

Detine the roles of advertising, sales promotion and public relations in the promotion mix.

Describe the main decisions involved in developing an advertising programme.

Explain how sales promotion campaigns are developed and implemented.

Explain how companies use public relations to communicate with their publics.

Salehoo Secrets and Tips

Salehoo Secrets and Tips

As with any web site, SaleHoo has a number of features that will help you in buying products from around the world. Once you have an account on SaleHoo, which only costs a one-time fee, you can establish up to twenty named searches for products. After that, any time those items become available, you’ll be alerted.

Get My Free Ebook


Post a comment