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The Situation Analysis

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The Situation Analysis - Absolut Vodka
Introduction
This report will investigate the current marketing environment of Absolut Vodka brand (Pernod Ricard Group) within the wine and spirits industry by combining a SWOT and TOWS analysis to identify and explore key matters surrounding strategic marketing internally and externally of this brand within the UK market.
SWOT Analysis – Pernod Ricard SA
Pernod Ricard is globally known worldwide for their contribution in manufacturing and supplying spirits and wines. The company’s business model is a decentralized design which is a fundamental principle to their management and control of their business activities. This enhances a platform of competitive advantages. Due to regulations in relations to advertising of alcohol may lead to an impact and reduction of premium brand products and affected sales. Strengths (S) | Weaknesses (W) | * Decentralized business model * Diversified operations reduce business risks * Top 14 brands offer leadership positions to Pernod Ricard * Global status – Abslout | * Decline on advertising affecting the driving force of Absolut (Mintel, 2014) * Lack of brand awareness/brand equity (Mintel, 2014) * High debt burden * Lack of interaction with consumers- detached and no interaction (Graham, 2015) |

Opportunities (O) | Threats (T) | * Positive outlook for global spirits market * Premium brands promoting neat drinks – combination of mixability (Mintel, 2014) * Unique identity in niche clientele - adjusting to change within the consumer trends through customer relationships (Marketline, 2014) * Digital Transformation – digital creativities and the competences to the main core of the business transformational change to drive results (Marketline, 2014) | * Premium vodka competition e.g. Grey Goose(Mintel, 2014) | (Marketline, 2014)

TOWS Analysis Internal FactorsExternal Factors | Strengths (S) | Weakness (W) | Opportunities (O) | S/O -Strategies that use strengths to maximise opportunities * Absolut - Strong global reputation to build and increase strong visibility for brand awareness through different platforms of advertising and marketing e.g. social media and digital age to reach target audience * Develop a unique branding to differentiated niche groups/clientele * Expanding operations to creating innovative distinguished and unique mixability drinks within a niche clientele or attracting new consumers to the brand still promoting exclusivity | W/OStrategies that minimise weaknesses by taking advantages of opportunities * Free advertisement – celebrity endorsements * Target market audience to increase brand awareness by adopting a relationship with the consumers * Use revenue from other production lines to push Absolut distribution | Threats (T) | S/TStrategies that use strengths to minimise threats * Prioritise and implement strategies to tacklecompetitive brands by vulnerability/strengths to enhance competitive advantages - Absolut * Upsurge efficiency to production * Research and Development to indicate any gaps within the market to generate a competitive edge | W/TStrategies that minimise weaknesses * Promote creative and innovative ways to advertise Absolut * Engage in consumers experience with branding awareness |

Pernod Ricard Key Strategic Issues - Absolut
Absolut (premium vodka) positioning is a reputable and iconic brand with globalise status. However, within the growth of spirits on the rise in the UK market segmentation the brand has been experiencing adversity in performance relating to competitive premium vodka competition from other niche brands e.g. Glen Vodka and Grey Goose.
The brand highlights elements of weaknesses resulting in the depreciation of expenditure that has affected advertising support creating a downturn in brand awareness through lack of communication with target audiences/consumers which is relevant to brand experience. Branding is the fundamental core to business needs that correlates capabilities of consumers’ needs and expectations.
Growth Opportunities * Premiumisation: of premium to super premium brands has evolutionised making the spirit industry a competitive platform driven by new markets, new brands, quality, luxury and innovation to attract consumers. Absolut will need a competitive advantage to face challenges amongst existing and emerging brands.

* Branding: For absolut to grow profitable sales to gain a competitive advantage, Pernod Ricard will need to focus on the importance of branding and promoting to engage consumers’ interest by doing so reinvest using other production lines revenues to implement and drive Absolut distributions, increase brand awareness to target market audiences and new consumers - building relationships with the brand to enhance customer experience.

* Advertising: plays a key role in communication for interacting with consumers. Therefore absolut needs to use different innovative avenues of social media and digital application as we live in a world of digital age and we are users. This allows a platform for brand visibility on massive scale e.g. social influencers (bloggers) who interact with users on brands/products, free advertisements with celebrity endorsement – generating sales.

* Innovative Products: Development of creative uniqueness in branding of Absolut (new products) to identify niche groups/clientele by producing neat drinks – mixability (cocktails).
Threats & Weaknesses
Placing Absolut on a UK spectrum in relation to Smirnoff: Absolut is internationally recognised as a premium brand and known for creative flavours and artistic designs and limited editions. (ireadfaux.com) * Absolut’s threat is the well-established Smirnoff, which is recognised within the UK as the number one recognised brand.

* .Another threat is that competition such as Smirnoff, have more capital to invest and get their product advertised in all media sections.

* Lack of innovation to flavours, they need to find flavours that the competition has not yet introduced.

* A weakness is that it is aimed at affluent buyers, yet should reach out to all consumers to boost sales

* Being expensive means that many consumers on budgets will not purchase this on a regular basis.
Market Mix
Absolut is an iconic brand and as the market growth increases so does opportunities. The group organisation’s business model is decentralised co-operating all areas of the business with strategic core driven values, culture and strong ethics that combines growth in brands, premiumisation and innovation. (Pernod-Ricard.com)
Innovation and premiumisation are the foundation of branding in Pernard Ricard’s strategic capabilities by using these elements to prioritise and implement strategies to tackle competitive brands by looking at competitors positioning and their impact within the market. Use research and development to distinguish gaps in the market to increase profitability. * High end brand extension: can help consumers to recognise the brands quality * Capitalise on popular flavours: Innovate flavours to attract all genders and taste buds * Celebrity endorsements to increase brand equity: can help consumers recognise the brand * Promotion offers: may attract consumers to buy more in order to receive promotional gifts.

1019 Word Count

Reference
Graham, C. (2015) Absolut Case Study. Marketing Management & Strategy module, B.A. Business Studies, intake 2/14. London South Bank University. 31st January 2015. http://0-academic.mintel.com.lispac.lsbu.ac.uk/display/679759/ (Accessed 14-16 February 2015) http://0-advantage.marketline.com.lispac.lsbu.ac.uk/Product?pid=7B9A1890-2C43-4D38-B65B-C16EEAD53D7A (Accessed 14-15 February 2015) http://www.businesswire.com/news/home/20090507005577/en/Key-Challenges-Issues-Facing-Top-10-Spirits#.VOUAOvmsWSo (Accessed 17 February 2015) file:///C:/Users/LO/Downloads/7B9A1890-2C43-4D38-B65B-C16EEAD53D7A.pdf - Pernod Ricard SA, Company Profile (Accessed 14-15 February 2015) http://www.carat.co.uk/blog/bloggers-vloggers-and-influencers-the-evolution-of-brand-endorsement-261114/ (Accessed 14-15 February 2015) http://en.wikipedia.org/wiki/Digital_transformation (Accessed 15-16 February 2015) http://www.hugeinc.com/ideas/report/brand-capabilities (Accessed 16 February 2015) http://ireadfaux.com/2012/07/top-10-vodkas-in-the-world/ (Accessed 17 February 2015) file:///C:/Users/LO/Downloads/Absolut_Plan_Demirkan%20(1).pdf (Accessed 15 February 2015) http://www.carat.co.uk/blog/bloggers-vloggers-and-influencers-the-evolution-of-brand-endorsement-261114/ (Accessed 14-15 February 2015) http://pernod-ricard.com/2013-14annualreport/Pernod-Ricard_AR-13-14.pdf (Accessed 14-15 February 2015) http://pernod-ricard.com/2013-14annualreport/#markets (Accessed 14-15 February 2015) https://uwemarketeers.files.wordpress.com/2014/10/tows.png (Accessed 17 February 2015)

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