STOLICHNAYA VODKA

1
STOLICHNAYA VODKA

• US Rebranding Strategy

Brand Management 10 November 2004 Suraj
Basnet Edward Boon Jack Chang Mike Khalili Ken
Kodaka Weiming Li Weifeng Zhang
2
I?T?ODUCTIO?
Stoli is genuine Russian vodka (). The product's
unique taste results from its time-honored recipe
and distillation process. The brand also is the
originator of flavored vodkas, and offers one of
the widest portfolios of flavors. All Stoli
flavored vodka is made using a natural infusion
process (). "The result is that Stoli is vodka
with flavor, not flavors with vodka," Allied
Domecq, 2002

• Stolichnaya in figures
• The worlds no. 1 top selling vodka brand
• Russia primary market (50 million cases / year)
• 3rd in the US, after Smirnoff (US) and Absolut
  (Sweden)

3
P?ODUCT ?A?GE

• Stolichnaya

Flavored vodkas strawberry, peach, coffee,
vanilla, cinnamon, raspberry, orange, citrus,
cranberry, pepper and honey
Stolichnaya Gold
4
HISTO?Y
5
P?OBLEMS

• Low sales
• Highest global sales among Vodkas, but is beaten
  by Smirnoff and Absolut in the United States
• Weak image
• Market share went down in late 1980s as result of
  Absolut launch and anti-Russia opinion. Never
  recovered.
• New brands replace Stolichnaya as most premium
  brand on offer at many bars.
• Change to Stoli did not improve brand performance
• CEO concedes Stoli needs a face lift

6
VODKA ESSE?TIALS

• Commodity Product - just fermented grain and
  water.
• Differentiation based on brand image /
  personality
• Bottle design
• Advertising
• Pricing
• Distribution
• Brand equity very important
• Private label vodkas 3-5
• Premium vodkas 20-30
• Super-premium vodkas 60

7
THE US VODKA MA?KET

• US vodka market 385 million liters, USD 9,8
  billion (2003)
• C4 index 35
• Annual growth 6-7 (2001-2003)
• Shift to premium vodka brands (e.g. Ketel One,
  Grey Goose)
• Mixed drinks and flavored vodkas more popular

17
Smirnoff
C4 35
Other 65
11
Absolut
4
Stolichnaya
3
Finlandia
8
COMPETITIO? WITH P?ICES
8 11 17 18 20
21 25 30
9
COMPETITO?S (low end)

• Gordons (8), US
• Cheapest Branded Vodka
• Gets you drunk for little money
• Personality A drunk fraternity boy or sorority
  girl. Just
• looking to get drunk for
  cheap. Has no money.
• Smirnoff (11), US
• Old, well established brand
• Cheap but socially acceptable
• New premixed drinks are reviving the brand
• Personality The person you meet in a dive bar.
  Hope you
• dont regret it when you
  wake up next to them
• the next morning. Not a
  total disaster, but kind
• of low class.

10
COMPETITO?S (Mid Range)

• Finlandia (17), Finland
• Pure.
• A reasonable mid-range product.
• The choice of James Bond
• Personality Honest and refreshing. Not trying
  to pull
• anything over on you.
• Absolut (20), Sweden
• Heavily marketed brand.
• Safe but still kind of hip.
• A little cliché. A lot of other people are
  drinking it.
• Personality The charmer at the bar. Looks good,
  but not all
• that interesting anymore.
  Youve met him before.

11
COMPETITO?S (High End)

• Ketel One (21), The Netherlands
• High Quality.
• Hand crafted and traditional.
• Introduced much like Red Bull, starting in San
  Francisco
• bars. Created a buzz.
• Personality Self assured. Fashionable, but not
  trying too
• hard. Honest.
• Grey Goose (25), France
• High Quality.
• Swanky.
• Personality Like a jazz musician.
  Sophisticated. Cool. A
• bit arty.

12
COMPETITO?S (Top End)

• Belvedere (30), Poland
• Exclusive Image.
• Not widely available at bars. Usually sold at
  places
• specializing in vodka, not normal clubs and
  bars.
• Personality Exclusive. Hoity-toity. Snobby.
  A little
• out of your league. If a
  Vodka could live on the
• Upper East Side, this one
  would.

Where does Stolichnaya fit in this hierarchy of
brands? What is its personality? Where is it
positioned now?
13
CU??E?T MA?KETI?G MIX

• Product
• High-quality product
• Simple bottle label
• Renamed Stoli, to avoid association with Russia
• Flavored vodkas
• Price
• Medium
• Distribution
• Clubs / restaurants
• Liquor stores
• Communication
• Real Russian imported (inconsistent)

RateItAll.com
1. Charodei 2. Grey Goose 3. Titos 4. Ikon 5.
Stolichnaya 6. Ketel One 12. Finlandia 17.
Smirnoff 19. Absolut 28. Belvedere 38. Gordons
14
EA?LY ADVE?TISI?G

• Print advertising around 1990
• Message Original, Russian vodka

15
ADVE?TISI?G - 2002

• See what unfolds (origami)
• Print advertising in lifestyle, travel, and
  gourmet publications
• Imitation of Absolut ads

16
ADVE?TISI?G - 2004

• Frozen - print advertising (October 2004)
• Message Cool, Russian?

17
P?OBLEMS IN B?A?DI?G

• Inconsistent Message Changing name and image.
• Bottle Design indicates poor quality
• Playing to Absoluts strengths Mimicking
  instead of defining itself uniquely
• Ignoring attractive and growing higher end market
• Trying to cover up Russian roots

18
EFFECTS OF CU??E?T ST?ATEGY

• Too low of an image to compete in growing
  up-market segments.
• Ketel One and Grey Goose are growing.
  Stolichnaya is shrinking despite comparable
  quality.

• Stolichnaya is chasing Absolut, even though
  Absolut is in decline.
• Bacardi purchased Grey Goose for 2bn (highest
  price for single liquor brand ever). Stolichnaya
  is being left behind.

19
?EB?A?DI?G ST?ATEGY

• Emphasize Russian heritage and quality.
• Reposition brand around being an authentic
  Russian vodka
• Use strength of Russian associations
• Return to the name Stolichnaya, not just Stoli

• Redesign package to illustrate this (backward N,
  pictures of Moscow, etc.)
• Raise price to be higher than Absolut, lower than
  Grey Goose and on par with Ketel One
• Out-tradition Ketel One

20
?EB?A?DI?G ST?ATEGY

• Tie in with retro-Soviet bars. Emphasize Russian
  authenticity with trend-setters at these bars.

Pravda Bar in Soho (New York)
KGB Bar in the East Village (New York)
Peoples Republik near Harvard (Boston)
Red Square in Las Vegas
21
?EB?A?DI?G THE ?EW PE?SO?ALITY

• Stolichnaya
• A premium vodka. High Quality. Expensive. 100
  Russian. Authentic. Traditional. Real.
  Trendy, but not overly snobby.
• A better known, more authentic and more genuine
  vodka than Ketel One (who drinks Dutch vodka?).
• Much more elite, and up-market than Absolut and
  the middle tier.

22
STOLICH?AYA THE B?A?D MESSAGE

• To convince Increasingly selective and
  sophisticated US vodka drinkers,
• That Stolichnaya is the best vodka to buy,
• Because It is a genuine, original, traditional
  quality vodka from Russia, the land that invented
  vodka.
• Stolichnaya 100 Pure Russian Vodka
• Stolichnaya The original. The best.

23
Q A