Stoli and the Vodka Distilled Spirits Industry
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Understanding Consumer Behavior Project - JHU Carey School of Business
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Stoli and the Vodka Distilled Spirits Industry
- 1. Understanding Consumer Behavior Distilled Spirits Industry- VODKA Janessa Shaikun, Allison Amrhein, Kristin Hanley Tianyue Zhu, Emilie Bonano
- 2. • Problem and Objective • Overview of Vodka Industry • Industry Regulations • Market analysis • Consumer Analysis • Summary of Research • Strategy & Execution for Stoli Agenda
- 3. Stoli's Problem- How can Stoli stand out as a premium brand? • Stoli's quality is perceived to be in the middle of industry • Price between premium and basic vodka • Gray Goose and Belvedere are considered more desirable • Absolute and Smirnoff are considered less but compete for flavors
- 4. Consumer Analysis Objectives • Allow Stoli to compete with high-end premium brands • Market share increase 7-8% in two years • Increase the brand awareness
- 5. • Nicknamed “Bread Wine” and first distilled in 1174 • Thought to protect against harsh climate • Banned on and off to control alcoholism • 1972 Russia declares Stolichnaya only vodka for export History of Vodka
- 6. History of Stoli • 1950s and 60s first luxury Vodka imported to UK and US • 1986 First flavored vodka introduced to US- Lemon • 1996 Flavor Portfolio increases (photo of different bottles) • 2004 Stoli Elit is launched
- 7. Industry Regulations • Underage drinking and targeting teens • Taxes • Bans – Sunday Sales – Product Sampling – EPA
- 8. (Source: Adams Liquor Handbook 2004) • Premium Vodka is the most profitable category in the spirit world Market Segmentation
- 9. Market Analysis Competitors Market Share Bottled Supplier Grey Goose 19% Grey Goose Smirinoff 17.3% US bottled Diageo Absolut 10.8% Foreign Bottled(Sweden) Absolut Spirits Stolichnaya 4.5% Foreign Bottled (Russia) Allied Domecq McCormick Vodka 4.4% US bottled McCormick Distilling Popov Vodka 4.3% US bottled Diageo Skyy 4.1% US bottled USA Skyy Spirits Barton Vodka 3.6% US bottled Brands Constellation (Source: The US Spirits Market by International Wine center, 2004)
- 10. – More women consumers – Vodka appeals to younger/hipper consumers that have disposable income and more purchase power – Sunday Sales- distributors – Industry commitment to social responsibility – Consumers are becoming increasingly experimental – Growing social acceptability of spirits & Increased appreciation of moderate drinking Factors Contributing to Growth of Industry
- 11. Health Trends Organic and Ethical Functional and fortified Premium Brand Cocktail culture Consumer Trends
- 12. • Age • Men v. women • Income • Social status Consumer Demographics
- 14. Brand Loyalty
- 17. What does this mean to Stolichnaya?
- 18. • Grey Goose valued as #1 • Grey Goose consumed straight up vs. mixed • Stoli viewed as middle brand • Flavored vodkas are increasing trend • Stoli flavored line is popular Summary of Research
- 19. Smoothly distinctive bottle High price line Original from France- Luxury Scents of smoke, vanilla, alcohlo unrivaled quality shipped in wood crates-attract bartender’s What make Grey Goose #1 named the best-tasting vodka in the world by BTI Event marketing in hottest clubs on the hottest nights, in the hands of the hottest people Ads on WSJ consumer demand for “everyday luxuries,” super premium category Why Grey Goose?
- 20. Stoli vs. Others
- 21. •Clearly define standing amongst competitors •Play up strong points •Bottle redesign •Create Apps •Calorie Counter •“Keep it safe” Strategy & Execution for Stoli
Editor's Notes
- Problem and Objective Overview of Vodka Industry Industry Regulations Market analysis Consumer Analysis Summary of Research Strategy & Execution for Stoli
- Within our vodka industry analysis we have chosen to focus on Stoli. Stoli is “stuck in the middle” of the vodkas in the industry. You have rail, well, top shelf and reserved - priced in between well vodka and top shelf vodka, their level even differs by bar which is not all that common An issue is the price/quality ratio– like Stoli a little more than a top selling (well) brand such as absolute, but they don’t like it enough more to spend the $ than more money. Furthermore, if they are going to spend additional money or drink something on the rocks they are going to go with grey goose or another premium vodka
- Kristen
- Kristen
- Teens make up 23% of alcohol market (according to USA today) Alcohol advertising does not increase brand sales, does increase underage drinking Much speculation, especially distilled spirits on if its intentional? American Journal of Public Health is among the vast number of credible sources that have done studies to indicate it does -line about targeting anyone, and 21. FTC has government and health agencies support in saying it at least doesn’t START it Finding a concrete answer is difficult because (i) minors don’t buy their own alcohol, making it difficult to observe their purchasing behavior and (ii) you can’t prove that their attitude or opinion directly affects a single behavior like drinking effective social norms marketing technique – think peers drink more than they actually do – use facts to prove otherwise Taxes –- DISCUS (distilled spirits industry council of the US) always a danger of being raised, especially as a means to reduce underage drinking, would be best for the industry to get on board with a government induced mktg campaign such as the social norms mentioned earlier Product samplings - ethical and effective technique, banning keeps brands from being able to have a direct consumption experience. EPA – old warehouses causing dangerous ethonol emissions, which gets more attention as the country goes more green
- Clora Trading down but, but vodka category revenue up $75m
- Clora
- Clora
- ALLI Need recognition Motivation- maslow Perception Learning personality
- ALLI Young Educcated city dwellers w/ disposible income 80%men 20”women single
- Alli Distributors Bars Public Consumers effected by bar tenders recommendations Peers Word of mouth Distributors affected by consumers buyig habits
- ALLI Brand loyalty- younger generation more experimental Going out culture, wants what is in “fashion” Very persuaded by peers
- ALLI Advertisements bar promotions bottle designed store promotions special events Celebrity endorsements word of mouth Based on these consumer demographics and trends it is clear why vodka companies advertise the way they do
- ALLI High involvement- end caps Stoli grils- high invovement Bilboard ads- low involvement Leverage point- sex appeal Celebrities Fasion Maslow-esteem Music/festivals
- Emilie
- Emilie
- Emilie
- Emilie
- ALLI People want a premium vodka for a good price