10 Step Marketing Plan for

Mark Angelo ReyesNovember 2012

Step 1: Primary Target Market

Primary Target Market for Absolut

• Men and Women between 21 – 35

• Urban-based individuals who hail from AB and Upper C socio-economic classes, employed or has sources for funds

• Individuals conscious of success, social standing, style and trends, and their circle of friends

• Groups of those who go out during the weekends or have nightcaps after a workday

Step 2: Needs, Wants, Demands

I want to be with friends and have a fun time with them.

I am happy when I am acknowledged and accepted by friends while we share the same fun activities

The party is ABSOLUT fun!

Step 2: Needs, Wants, Demands

Needs• PTM needs to belong to a group or social circle and

gain self esteem with the confirmation these friendsWants• PTM prefer a brand that’s popular, affordable and

known for its position in the market (prestige levels)• PTM prefers a nice looking and exclusive bottle with

great contentDemands• PTM demands premium quality for their money• PTM demands that that they will be acknowledged /

bonded when friends all go out, have fun, and drink together.

Step 3: Competition / Competitive Position

Competition:Direct• Belvedere, Grey Goose, Smirnoff, Stolichnaya,

Skyy

Indirect• Beer, Wine, Whisky, Rhum, Tequila

Variables• Price, Packaging, Availability, Brand Promise of

Quality, Number of options to use mixers

Step 3: Competition / Competitive Position

Price / Age Matrix

Price / Age Matrix 18-20 20-25 26-30 31-35

High Price

Mid Price

Low Price

Absolut

Belvedere

Grey Goose

Skyy

Stolichnayya

Step 3: Competition / Competitive Position

Functional Benefits vs. BrandsFunctional Benefit Absolut Grey

GooseStolichna

yaBelvedere Skyy

Brand Appeal X X

Appealing Price X X X

Odorless & Tasteless X X X X

Alcohol Content X X X X

Party Appeal X X

Ready Availability XThe Absolut brand due to its popularity (price and availability) makes it a standout among competition.

Note: Vodka should naturally be odorless, colorless and tasteless. Flavors are added to make it acquire flavors.

Step 4: Gap / Opportunity / Position

Where is the marketing opportunity?

- Absolut is the leading brand in the market already and the opportunity lies in gaining or increasing its market foothold. (Maintaining Market Share)

- The Vodka Industry is already considered in its mature phase with a high brand loyalty so gaining new patrons would be in the brands best interest.

- There are too many competitors in the market but the population is growing at a steady pace and Absolut has to capture the new potential patrons year on year. (Extending Volume Growth)

Step 4: Gap / Opportunity / Position

What Need Wants Desires are not being addressed?

- The needs and wants not being addressed are those that pertain to self-actualization

- rather than focus on that, the brand must focus instead on its key strengths where they are able to answer the needs in the social / esteem areas.

What can be the unique selling proposition for the new product

- The brand is popular and on its own, it is its own USP and has the innate capacity to attract new customers provided it maintains the same or even greater level of marketing campaigns towards the fulfillment of the same.

Step 5: Market Size

Market Size

• US and European data suggests that the Philippines has a $3 billion market for liquor. • WTO rulings will force Philippines to lower the duties and taxes levied on all imported spirits

• Total recorded per capita consumption of Filipinos is 3.75 litres of pure alcohol for those 15 years and above and increases by 10% every year (Filipinos only third to Thailand and Japan)

• Local manufacturer Emperador sold 96 million bottles when the Philippine population was only less than 90 million a couple of years back.

Step 5: Market Size

Market Size

• Liquor is one of the most profitable industries in the Philippines

• Middle & Upper Class spend more money on alcohol (higher discretionary income)

• More Filipinos expected to move to urban settings

• Philippine alcohol sales were stable in 2011

• 1997 Family income expenditure shows they spend approximately 1% of their income on alcohol. Filipinos drink more than their South East Asian counterparts.

Step 5: Market Size

• 1994 UP studies indicate that 60% of Filipino youths drink alcohol (legal age)

• Philippine growth is 2% per year, thus there is a compounding effect on the demand for this beverage product

• Total volume and sales is expected to record and drive stable growth from 2012 – 2016

• Even with economic downturn, consumption of alcohol remained constant because they were driven by more affluent customers

• Filipinos drink to socialize (45%) to remove stress(24%) and to just be happy (18%)

Step 6: Product

Product Info and Variants• Vodka is the most popular drink with countless number of brands

• Absolut is the 4th largest international premium spirit producer in the world

• Manufactured in Sweden in 1897 and made available globally in 1979

• Available in 126 countries and is ranked among the top 10 premium spirits since 1994

Step 6: Product

Product Info and Variants•Variants available in the Philippines:Original Ruby Red

Step 6: Product

Product Info and Variants•Variants available in the Philippines:Raspberri Vanilia

Step 6: Product

Product Info and Variants•Variants available in the Philippines:Citron Mandarin

Step 6: Product

Product Info and Variants•Variants available in the Philippines:Kurant Pears

Step 6: Product

Product Info and Variants•Variants available in the Philippines:Apeach Mango

Step 6: Product - Competitors

Stolichnaya Skyy Belvedere Grey Goose Smirnoff

Step 6: Product

Product Look vs. Competitors

• Absolut is has a bold and high recall name - From the word Absolute – dropped final E to avoid legal complications and denote the purity in vodka •An iconic bottle - Shaped like a Swedish medicine bottle

• The brand is known for its quality taste and unique advertisements

Step 7: Price

Vodka Brand (750ml) Price Point Vodka Brand (750ml) Price Point

Absolut (Blue) 750.00 Belvedere 2,200.00

Absolut Citron 840.00 Grey Goose 2,400.00

Absolut Kurant 840.00 Skyy Classic 470.00

Absolut Mandarin 840.00 Skyy Infusions 550.00

Absolut Vanilia 840.00 Smirnoff 580.00

Absolut Pear 840.00 Stolichnaya 650.00

Absolut Raspberri 840.00

Absolut Ruby Red 840.00

Absolut Apeach 840.00

Step 7: Price

Absolut’s price is up to 65% lower than the high end brands and up to 40% higher than the lower end vodka competitors.

It has a value based pricing scheme since the primary price is based on the consumers thoughts on its value. Absolut offers consumers a premium feel with a cost that’s not going to hurt their wallets.

Step 8: Promo

Mass Oriented:

1. Advertising – Print Ads

Step 8: Promo

Mass Oriented:

1. Advertising – Print Ads

Step 8: Promo

Mass Oriented:

1. Advertising – Print Ads

Step 8: Promo

Mass Oriented:

1. Advertising – Unique Bottle Designs

Step 8: Promo

Mass Oriented:

1. Advertising – Event Sponsorships

Step 8: Promo

Mass Oriented:

2. Public Relations – Society Parties

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Unique Bars (Ice Bar)

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Television Shows

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Online Video Ads

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Video Ads

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Art Events and Awards

Step 8: Promo

Mass Oriented:

3. Events & Experiences – Celebrity Endorsements

Step 8: Promo

Personal:

1. Interactive Marketing

- Drinkspiration Phone App

2. Word of Mouth

Step 8: Promo

Personal:

3. Interactive Marketing

- Sharing Pitchers

Step 8: Promo

Competitor Ads

Step 8: Promo

Competitor Ads

Step 8: Promo

POD (points of difference)

- Absolut offers more flavors

- Absolut has an iconic bottle design

- Absolut stretches creativity when it comes to advertising material

POP (points of parity)

- Brands are clear and true to form when it comes to vodka

- Brands can all be incorporated with the same mixers

- All brand almost share the same alcohol content

Step 9: Place

Easily distributed and readily available in almost all bars and restaurants in all urban environments

Widely distributed from duty free shops to liquor and convenience stores (with or without licenses)

Also available at non-traditional outlets like hotels, gas stations and the like.

Step 9: Place

Philippine retail channel for liquor is highly fragmented but among all vodka brands, Absolut is the one present in majority of the retailers.

Key points of sale remains to be bars, supermarket and convenience store chains.

Step 10: Generic Winning Strategy

Which of the 4 strategies are being used? (bold and underline to most dominant strategy)Low Cost ProducerSupply and Distribution LeverageDifferentiationNiche

Step 10: Generic Winning Strategy

Differentiation- The brand itself, its ads, the bottle

and the premium quality liquor inside

represents a unique selling proposition already.

- Absolut brand reputation and the customer value it delivers, is perceived to be better than the 2 spectrums of competition either in price or in quality.

- Most vodka manufacturers try to differentiate their products by offering line extensions – Absolut has done so better than its contemporaries.

SummaryPrimary Target Market

1. Target Market: Men/Women 21-35 years who have the flair for having stylish fun together.

2. NWD: The need to be accepted and acknowledged by the social circles and the need to be with people / friends in similar activities

3. Choices: There are varied vodka alternatives but the price point and the value delivered by the Absolut brand is the best option the PTM has.

4. Opportunity: Year on year, there are new potential clients entering the market. As the population grows, Absolut should make sure it gains a foothold on these individuals through increased marketing efforts.

5. Market Size: The Philippines has a sizable market for liquor sales. With a projected growth from 2012-2016, and with new “drinkers” year on year, there is no chance for a downtrend in terms of the potential market.

SummaryMarketing Mix & Strategy

6. Product: The product is widely known the world over with its distinctive brand name, their iconic bottle and the premium quality vodka housed inside it. This differentiates it from the rest of the other vodka alternatives.

7. Price: Absolut is competitively priced offering the best value for money the PTM can afford.

8. Promo: Marketing campaigns that span a variety of mediums are utilized in order to maintain brand loyalty and to gain new customers. In the liquor industry, brand loyalty is constant and does not easily change.

9. Place: Absolut and its variants are readily available in almost all distribution channels for liquor. They are present in both traditional outlets and non traditional ones.

10. Generic Winning Strategy: Differentiation is the winning strategy here. With such a broad market and a product that is marketed to be unique, the Absolut brand will surely stand out among the rest of the competition.

References

http://www.ias.org.uk/resources/publications/theglobe/globe200103-04/gl200103-04_p12.html

http://www.euromonitor.com/alcoholic-drinks-in-the-philippines/report

 http://www.ats-sea.agr.gc.ca/ase/5884-eng.htm

 http://bestvodka.net/top-10-vodka-brands/

 http://bworldonline.com/weekender/content.php?id=5742

10 Step Marketing Plan for

Mark Angelo ReyesNovember 2012