Goods• Smirnoff offers goods toits customers because itsproducts are tangible.• Originally produced inMoscow, the now Britishowned company (Diageo)produces Smirnoffproducts in severalcountries includingIndia, Ireland, Italy, theUnited Kingdom, and theUnited Stated.
Branding• Smirnoff has successfulbranding because: it’sproduct is easy to identify, itstill maintains a lower pricethan most competitorswithout losing quality, it iswidespread throughoutover 130 countries, demandfor vodka will always bestrong as long as highereducation exists, and ittakes up a good chunk ofthe alcohol aisle with itsvarious productassortments.
Brand Familiarity• Those who purchasealcohol will have brandrecognition for Smirnoffproducts because of itsaffordable prices.• Many have brandpreference becauseSmirnoff productsaverage $11 less than itscompetitors.• Brand Insistence dependson the customers wantsand bank account.
Branding• Diageo uses individualbrands with Smirnoffbeing one of them. Afew other well knownindividual brands underDiageo include, butaren’t limited to:Guinness, JoseCuervo, CrownRoyal, Baileys.
Consumer Product Classes• Smirnoff best falls under the group of ShoppingProducts, specifically homogenous shoppingproducts. Unless one is a vodka expert, mostcustomers see vodka as similar and want the lowestprice.• However, the cheapest vodka on the market is sureto have further unwanted after effects, so Smirnoffoffers a great balance between quality andaffordability.
Product Life CycleMarket Introduction (1860)• Pyotr Smirnov founded adistillery in Moscow. Hiscompany was the first oneto take advantage ofnewspaper ads to promote.Market Growth (1886)• In 1886, Smirnov was ableto capture two-thirds of themarket.
Product Life CyclesMarket Maturity( 1930-Today)• By the 1930, Smirnoff wasexported to most Europeancountries and productionbegan in NorthAmerica, though not assuccessful as hoped inAmerica.• By the 1990, the fall of BerlinWall marked a pivotal momentin the companies dynasty.Troops turned to the vodkaand it’s popularity grew.Sales Decline (TBA)• Today, Smirnoff is stillthriving as competition getstougher, so they have notseen the sales decline stageyet.
New-Product ProcessIdea Generation• Smirnoff wanted a productto compete with thegrowing market RTD (Readyto Drink) and provide analternative to the beermarket.Screening• It was imperative thatSmirnoff could create afresh new look for theproduct that also gaveinstant recognition to theSmirnoff brand name.
New-Product ProcessIdea Evaluation• Watching the success of“Mike’s Hard Lemonade”further encouraged thelaunch of this productDevelopment• The last stage before theproduct hits the market isimperative. This is wheremarketers should runmarket test to see thepotential of the product.
New-Product ProcessCommercialization• Since its launch inJanuary of2001, Smirnoff Ice hasbeen one of the mostsuccessful alcoholicbeverage launces inhistory. It is reported tohave already captured2% of the beer market.
Smirnoff- PLACE• 1860’s Piotr ArsenieyevichSmirnov started the legacy ofSmirnoff by creating their veryfirst beverage in Russia.• Over it time the companystarted to outsource andopen new distilleries in othercountries like France, England,and United states.• Today the companydistributes its productthroughout 130 countries
• The Diageo company who is a merchant wholesalernow owns Smirnoff as well as other major brands likebaileys, Jose Cuervo, and Captain Morgan.• Diageo have contractual channel systems with many ofits distributors in order to make Smirnoff convenientlyavailable to its consumers.• Depending on the size of the general stores, Smirnoffintensively distributes their sorted bottles.
•Smirnoff marketing penetration has been verysuccessful in countries like UnitedStates, England, South Africa, Canada, and Ireland.•At times Smirnoff chooses countries to sampleseasonal products to determine if they would besuccessful or not.
Smirnoff providesdifferent events toreach differenttarget marketsUSA RussiaIndia Brazil
Price Flexibility Policies• One-Price Policy is used by Convenience storeswho only offer Smirnoff at one price for allshoppers.• Flexible-price policy is used by Smirnoffretailers to offer different pricing to customerswho are enrolled in loyalty programs or whopurchase in bulk.Databases have made flexible pricing eveneasier for retailers.
Discounts• Club card members are offered extra saving as partof a supermarket loyalty program• Non-cumulative quantity discounts are offered byretailers to allow customers a one time price breakfor purchasing a certain quantity• Coupons are used by consumers to receive an extradiscount off the list price of Smirnoff• Sale prices are used to advertise Smirnoff at atemporary discount to encourage purchasing of theproduct
Allowances• Damaged bottles are credited back to the retailersfor accepting less sellable product that was damagedduring the shipment of Smirnoff• Smirnoff can offer retailers stocking allowances toget attention and space for their new products• Push money is sometimes used by Smirnoff toencourage sales teams and retailers to sell theirnewer products aggressively
Profit Maximization• Lower prices expands the market size andexceeds customers reference price• This leads to greater sales and profits• Manufacturers and retailers are able toreceive a rapid return on investment
Demand Approach to Setting Prices• Smirnoff offers customers a product that exceeds theirreference price with its high quality taste at a low price• Odd-even pricing is used by retailers who sell Smirnoff toinfluence their customers psychological process ofpurchasing• Prestige Pricing-Diageo uses prestige pricing to separateits ultra premium vodkas. Smirnoff’s price is set lower tohelp place a higher status on Diageo’s ultra-premiumvodkas
Personal Selling• Smirnoff brings theirproduct straight to theircustomers by samplingthere brand at variousevents and clubs• Often they will use theirSmirnoff girls to distributetheir samples and sell theproduct to variouscustomers.• These events gain Smirnoffpublicity, which is an unpaidform of presenting theirproducts.
Mass Selling• Advertising: Smirnoffuses many forms ofmedia to advertise theirproduct including theirwebsite, commercials ontelevision, magazine printand billboards.• This is Smirnoff’s paidway of presenting theirproduct.
Mass selling cont.• Sponsorships andMaster of the Mix :Smirnoff will oftensponsor various eventsincluding the VH1 showSmirnoff’s Master ofthe Mix; which is a DJcompetition in whichthe winner receives acash prize.
Integrated Marketing communications• Smirnoff’s coordination of all of their promotionmethods seeks to convey the same consistentmessage.• Their message is that they have the most popularpremium spirits with a wide variety of uniqueflavors• These promotion methods follow the AIDAmodel, which is to get attention, hold interest,arouse desire, to obtain action or to buy theproduct.
Product Demand• Vodka and other spiritsare typically a productwith a primarydemand, customers wantthe product but not aspecific brand• Smirnoff has created aselective demand fortheir product with thereunique flavors such asiced cake flavored vodka.
Yours for the making campaign• Smirnoff is the numberone selling vodka byvolume in the world• They focus on reminderadvertising with theiroriginal vodka, which isan already establishedproduct.• With their flavoredvodkas, Smirnoff uses amore competitiveadvertising• They seek to push theirnew and unique vodkaflavors.
Yours for the making cont.• Smirnoff’s latest ad campaign, yours for themaking, focuses on the unique and widevariety of drinks you can create with theflavored spirits• They have many different recipes accessibleon their website for free.