Description
This case traces a product from idea to established, successful brand. A spirits industry executive perceives a gap between the under-$10 and the $25-and-up "prestige" vodkas. Could a mid-priced vodka capture some volume from each of those markets? Decisions on pricing, target, distribution, branding, and promotion are considered in the case.
Assumptions and Question to Consider
Assumptions
* Assume the landed cost to distributors ranged from $6.00 to $6.50 per 0.75 L bottle of SVEDKA. This includes federal and state excise taxes and all freight costs to its warehouses. Further assume that, at this price, the manufacturer will earn a 30% contribution margin of the selling price to distributors and that the average retail selling price to consumers will be $12.00 to $13.00 per bottle. Comparatively, the price to distributors of a 0.75 L bottle of domestic, generic vodka would range from $4.00 to $4.50. * Assume that Guillaume Cuvelier is a one-man sales force at the time of the case. His first task is to convince distributors to take on the product and help push it to and through retailers.
Questions
These questions are intended to help you inform your conclusion, make your case, and frame your action plan. You do not have to answer them directly in your assignment, but they may help you as you work on the case. 1. What gave Cuvelier the idea that there was a market for $10.00 vodka? 2. Are there brands you can point to (in any industry) that have used strategies similar to those employed by SVEDKA? Can you learn anything from their strategy that might help you with developing one for SVEDKA? 3. What is a brand positioning statement that might guide integrated marketing communications (IMC)? IMC considers how all elements of the communications mix work together to support each other and deliver the desired outcomes. 4. What