Academic journal article Journal of Case Studies

Absolut Vodka's First Limited Edition for Chinese Consumers

Academic journal article Journal of Case Studies

Absolut Vodka's First Limited Edition for Chinese Consumers

Article excerpt

Introduction

In 2010, vodka was not favored by Chinese consumers. Chinese consumers were more likely to purchase other imported spirits like whisky or cognac, which entered the market earlier and have come to represent the aspirational ideal of foreign luxury consumption.

The sales of vodka in China grew from 1.3 million liters in 2004 to 2.4 million liters in 2007, but since that time, vodka sales had declined and remained flat. See Table 1.

This downward trend was impacting the Pernod-Ricard Company, the importer of Absolut Vodka in China. The company faced a unique and difficult marketing challenge. The most critical challenge was that of consumer perception. The Chinese thought that great vodka came from Russia not from Sweden. Why would they consider Absolut Vodka when it came from a country not known for vodka?

Penrod-Ricard executives and the Absolute brand team had to address this consumer issue head on in order to reverse the downward trend of vodka sales (Labbrand, 2010). How could executives develop a brand strategy that would be welcomed by Chinese consumers?

Penrod-Ricard Holdings & the Absolut Company

The Absolut Company was owned by Pernod-Ricard, the world's second largest wine and spirits marketer. Pernod-Ricard was the number one company in the premium spirit segment and the largest imported spirit firm in China (Pernod-Ricard, 2013). Its portfolio included leading spirit brands like Martell, Chivas, Glenlivet, and Ballentine.

Pernod-Ricard Holdings was headquartered in Paris, France, and it was organized by brand companies and marketing companies throughout the world. Brand companies were located in their home countries and were responsible for the management of production and brand development strategies. Marketing companies were located not in the home countries but in different countries and were responsible for growing markets and generating local profits.

In 2008, Pernod-Ricard acquired the Swedish Absolut Company in Sweden for $8.3 billion dollars (Lagorce & Spain, 2008). The Absolut trademark was registered in 1879, and one hundred years later, in 1979, the first modern Absolut vodka with its signature classic bottle shape was launched in the United States. One year later in 1980, the Absolut Vodka Company and TBWA\Chiat\Day/New York, firms advertising agency, launched the first Absolut Vodka ad that featured the bottle and the headline, "Absolut perfection." This launch landmarked its journey as the world's leading vodka brand with one of the most famous advertising campaigns in the beverage category.

At the time, adman Geoff Hays of TBWA in New York was asked to come up with a campaign for Absolut vodka. Absolute executives set up specific guidelines--all advertising should center on the bottle. The product should not be identified with a particular lifestyle. The creative should have a timeless yet contemporary feel.

Since its launch, the Absolut brand became a success due to its consistent messaging and pricing strategy. Famous advertising campaigns included the Absolut Statehood campaign in 1991, the Absolut Tracks campaign in 2005, and the In An Absolut World campaign in 2009. Every campaign highlighted its link to the creative community. Throughout history, Absolut Vodka had collaborated with famous artists like Andy Warhol, and musician Spike Jones (Absolut Company, 2012).

Absolut vodka had a tradition of creating special edition products for selected markets and occasions. For example, it created seven city editions for the U.S. market and six city editions for foreign markets (Wikipedia, 2013).

Context

Absolut vodka was famous throughout the world due to its fashionable brand image. However, like other imported spirits, vodka was not yet an established product in China. China's total consumption for imported spirits was much smaller than local liquors. …

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