Week 2 Case Analysis – SVEDKA Vodka
Is there a market for $10.00 vodka？
Industry background:
Vodka was created in Russia in 1860’s with the demand of Smirnoff; Vodka came to the US
in 1965 with the imported Stolichnaya followed by Smirnoff. In the 1990s, premium vodkas
were introduced into the market such as Grey Goose, Absolut, & American Skyy.
The desire for high priced liquor and also awareness of the quality and appeal of Vodka
increased, so the expansion of vodka brands increased too. There have been mainly high
end products that are over $25 or cheap market products priced at single digit level. But
there are groups of customers who have some financial capability that look for a lifestyle to
represent their social image, who likes vodka. Apparently there are not many options for the
mid-priced vodka available on the market.
So I believe that a mid-priced ($10~$15) vodka will be able to capture some volume from
$25 plus and $10 below markets. Here we come with Svedka Vodka. Decisions on pricing,
target, distribution, branding, and promotion are considered in further details as follows.
