Figure 1: Absolut Vodka shape (variety: pears), (AbsolutVodka, 2012).
Absolut vodka is distilled according to the Swedish tradition reputed to be 400 years old. The distillation process was invented by Olsson Smith. Until today, the same process is retained which has been refined only to enhance the taste and purity of ‘Absolut Vodka’. In addition, the product ingredients are all obtained from local raw materials in Åhus, Sweden which is the reason why the products have been consistently maintaining their taste and quality. Customers rate Absolut vodka as having a “super smooth” taste (Clow & Baack, 2004). The bottles are available in a variety of designs which also distinguish Absolut from its counterparts.
‘Absolut’ Pricing
Pricing within the marketing mix is an important element that impacts the purchase decisions of customers and their brand choice (Kotler & Armstrong, 2012). Prior to pricing, it is important to articulate on who a brand’s target audience is (Barwise & Meehan, 2010), in this light let us examine the case of ‘Absolut’. The price variation of ‘Absolut vodka’ ranges from $30-$45 depending on the customer’s choice.
The pricing strategy of Absolut clearly indicates that it follows the skimming of price strategy to set market leadership to entice the aristocrat customer group (Hamilton, 2000). By price skimming, a brand tries to stay at the top of its market by pricing its product higher than its competitors (Kotler & Armstrong, 2012). Absolut had done something very similar; it set its pricing higher than its market equivalents such as Smirnoff which is much lesser in price. In addition, (Lewis, 1996) observed that by pricing higher than its competitors, Absolut had attracted the wealthy customers. Following Absolut’s pricing strategy; Grey Goose placed its pricing higher than Absolut thus becoming a tough competitor (Lewis, 1996). However, Absolut began producing another variety of vodka of higher quality with advanced distillation such as continuous coupled with batch distilling process. Hence, the higher price of Absolut vodka was justified given the innovative distillation adopted for high quality and taste. The above discussed aspects place the pricing aspect of Absolut in the luxury segment of spirits market.
‘Absolut’ Distribution
Integration of distribution channels is a strategic decision that can enhance the marketing attributes of a brand (Ries & Trout, 1986). Absolut had done something similar by integrating its distribution networks with those of its international distributing partners to form the Absolut Spirits Co. which handles all Absolut import and marketing activities the world over and with special focus on distribution within the US (Clow & Baack, 2004).
‘Absolut’ Promotion
The promotional element plays a vital role and is more strategic than rest of the marketing mix elements (Aaker, 2003). For almost 20 years, Absolut had been maintaining the reputation of being actively engaged in promotional activities especially through its distinctive advertising campaigns. As a brand endorsing a demerit product such as vodka (being an alcoholic drink), Absolut promoted its products strategically without having to deal with the common issues (Lewis, 1996). In fact, the brand had been promoting its drinks only to the adult audience who are off the official age for consuming alcohol in their respective nations. The website of Absolut vodka also allows only adult users to browse through its products. The brand had not been heavily marketing its products; rather it was just informing the targeted customer group of the existence of its products.
Beginning with its entry into the US market 1979, Absolut Vodka through its advertising campaigns had experienced a sales increment of 14,900 per cent, reports (Lewis, 1996). The author further observed that the advertising of Absolut begins right from the bottle design; its unique shape attributing to product differentiation. Differentiation is also the key element of the advertising campaigns of Absolut.
Aaker (2003) stated that a brand can achieve the desired differentiation and positioning through unique advertising campaigns conveyed through the techniques of narrowcast communication in advertisements. The above technique had been utilised by Absolut wherein the messages within its advertisements were carefully penned down in order that they incorporate certain codes which can be deciphered only by the targeted audiences. To this day, Absolut had created more than 1500 advertisements and the ads also won about 30 awards (Lewis, 1996). Absolut’s website is another crucial element in its promotional kit; the website () is user-friendly and has been developed with advanced web technologies such as java encryption (Porter, 2001). Although its competitors have been using television and other media means heavily to advertise their products, Absolut had been restraining itself to limits being a demerit good and that shows its adherence to business ethics.
Although Absolut carries some elements of being a prestigious brand and with its unique appeal, it cannot be considered a fashion product that will decline with the trend. The fact that the brand had been sustaining in international market for more than a century, tells us that Absolut is not a victim of changing trends.
Furthermore, whenever there is a change causing fluctuations in its trade, Absolut had been responding to such change. For instance, in order to retain its status in the luxury market, the batch and continuous distilling process was introduced which made a surge back to the top of the American luxury market. Moreover, the brand relies on the quality of Vodka in the bottle and not entirely on the appearance of the bottle as such. The unique appearance of the bottle is just the ‘icing on the cake’ for the quality vodka in it. Hence, the reporter negates the possibility of Absolut’s business fading with changing trends similar to fashion goods.
Given similar trends and globalization, there is not much difference between the markets within Europe and the US, hence, the advertising campaign of Absolut need not change to suit differential needs of both the markets. Moreover, choosing the same advertising campaigns for Europe and the US will save costs for Absolut. Hence, the reporter is of the view that the brand need not adopt different advertising strategies for Europe and US.
Recommendations & Conclusions
Every business sustains on its ability to grow and expand into new markets and hence it is recommended that Absolut can expand to new markets given that a market such as the US is being crowded with new competitors. The brand can also initiate production of non-alcoholic drinks where there is vast scope for differentiation. The reporter also recommends that Absolut should strengthen its corporate social responsibility as it is a market leader and should set example for several others.
In conclusion, it can be said that Absolut had come a long way in the spirits market and has potential to explore into new markets. Differentiation strategy through advertising has been a critical success factor given that differentiation within the liquor industry is hard to achieve as there is narrow opportunity to differentiate quality as also observed by (Lewis, 1996).
References
Aaker, D., 2003. Building strong brands. New York: The Free Press.
AbsolutVodka, 2012. About Absolut. [Online] (electronic (video)) Available at: [Accessed 29 May 2012].
Barwise, P. & Meehan, S., 2010. The One Thing You Must Get Right When Building a Brand. Harvard Business Review.
Clow, K. & Baack, D., 2004. Integrated advertising, promotion, & marketing communications. 2nd ed. New Jersey: Prentice Hall.
Hamilton, C., 2000. 'A Visual Analysis of the Absolut Vodka Advertising Campaign'. [Online] South-Western University (electronic) Available at: [Accessed 19 May 2012].
Kotler, P., Armstrong, G., 2012. Principles of marketing. 14th ed. Upper Saddle River, New Jersey, 07458: Pearson Education Ltd.
Lewis, R.W., 1996. Absolut Book. Boston: Journey Editions.
Porter, M.E., 2001. Strategy and the Internet. Harvard Business Review, (March), pp.63-78.
Ries, A. & Trout, J., 1986. Positioning: The battle for your mind. New York: McGraw-Hill Book Co.
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