Svedka Vodka (a)

Suitable for both MBA- and undergraduate-level courses such as “Integrated Marketing Communications,” this case series traces a product from idea to established, successful brand. In this A case, a spirits industry executive perceives a gap between the under-$10 and the $25-and-up vodkas. Could a midpriced vodka capture some volume from each of those markets? Decisions on pricing, target, distribution, branding, and promotion are considered. Excerpt UVA-M-0774 Rev. Jun. 10, 2016 SVEDKA Vodka (A) As he waited for his wife to meet him, Guillaume Cuvelier sat in a downtown Manhattan restaurant sipping vodka straight up. As founder and managing director of Spirits Marque One, a liquor importer, Cuvelier wondered if patrons of such an upscale bar would soon be ordering his new vodka by its name: SVEDKA. It was mid-1998, and the product was set to launch in just a few months. Scanning the bar for the competition's vodka bottles, Cuvelier ran through the marketing campaign in his head. The U.S. government defined vodka as a neutral spirit “without distinctive character, aroma, taste, or color.” As one food and beverage writer explained, “Good vodka is considered to be one without the harsh, rubbing-alcohol fumes of ethanol.” The now-popular liquor originated in the 14th century in either Russia or Poland (depending on which history you believe) as a spirit distilled from rye or wheat. In the early 1800s, the introduction of filtration and dilution techniques allowed vodka to evolve into something more refined but no less potent. As Cuvelier enjoyed his drink, the image of James Bond came to mind—described years earlier by an industry observer as “the first upscale vodka drinker.” Consumers were increasingly imitating Bond's discerning taste for high-priced vodka. In this climate, Cuvelier reviewed his own pricing, distribution, and positioning one last time. He hoped he was right that the vodka market was ready for a midpriced option. He wondered if there really was an opportunity below the Bond tier and above the very low-priced products. With a small marketing budget, Cuvelier had to be correct in his efforts to position his brand as he created a new segment. . . .