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Communications mix

 Both questions in the brief were assessed using the Kashani “6 C” system as it became clear that Absolut is in a buyers market and the Kashani system is more suitable for this (see Appendix A for an analysis of the Kashani system). Other methods of analysis such as PEST and the 4 P? s for example can provide a basic analysis however this is not as comprehensive as the Kashani system and results may be rather dated (reference to other systems is made in Appendix A).

The United States, as Absolut? s largest market in both terms of volume and revenue can be seen as its domestic market (although it is in fact a Swedish state owned firm). Integrated marketing communications mix (IMCM) is, as defined by American Marketing Association is “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time. ” IMCM involves the incorporation of a wide array of marketing and communications tools within the firm in such a ways as to have an overall strategic mix in placefor the product that enables the most efficient and effective marketing communications.

This differs from non integrated approaches where all marketing may for instance be focused through one medium such as print advertising. Modern IMCM will include tools such as e-marketing and CRM solutions which allows for a greater market penetration and a greater degree of personalised and targeted advertising and communications with the whole array of stakeholders, including customers. The goal of IMCM should always be to increase the value perception of the product in question by the customer.

Regulations in the United States specify that Vodka has to be clear and have no distinctive taste1. Although flavourings can be added post production the vast majority of Vodka does not have added flavourings and even those that do typically use basic fruits or chemical alternatives that are easy to copy. It has been argued that this lowers the barriers to entry for new firms/products to enter the market2, and so firms must differentiate their products by selling the brand image.

Using the value circles system (Appendix C) it can be seen that the tangible product of Absolut is that of a Swedish grain vodka packaged in glass bottles. The second circle shows the basic brand, which includes its name, the stylised and minimal glass bottle packaging and the good standard of its vodka. However it is circle 3, the augmented product which differentiates Absolute from the many other Vodka brands available. These intangible qualities included Absolut? s association with the arts through links with artists3 who have designed special edition bottles and musicians/bands who are showcased on its website which gives it an appealing and trendy image.

In addition it? s range of adverts developed since it? s first distribution in the United States, starting with “Absolut Perfection” soon became classics of there time – to such an extent that there were reports of children collecting them4. However Absolute lost market share and sales dropped as it had not kept up with its competitors with its growth being the slowest out of the top 60 spirit brands between 2000 and 2005 (and 2% less than Smirnoff? s)5 and growth in the United States had been even slower.

Absolut seemingly ignored the developing superpremium vodka market even though as one executive said “They saw the superpremiums coming from a mile away, but they didn’t do anything about it,” 5. In addition Absolut had for many years ignored new forms of marketing such as the internet and cable TV which had been used by other spirits firms to great success in the United States. Previously print based advertising comprised Absolut? s entire budget, however after their shift to an IMCM their print budget will be reduced to “25% of Absolut’s media spending going forward, with digital, outdoor and TV each getting between 20% and 30%”5. This can be seen as the firm moving further into a fully integrated marketing mix in order to achieve both efficiency and effectiveness in its marketing communications.

In Absolut? s pursuit of market perceived value this integrated approach should lead to contact with a higher number of potential customers and so allow it to market to a broader range of market segments. This is furthered by its move into the superpremium market which has seen rapid growth in the United States market.

The launch of Level, its new superpremium brand should allow it too compete with the likes of Grey Goose and Belvedere who have taken hold of the high priced superpremium segmentation of the vodka market5. Indeed as previously noted blind taste tests of vodka have shown no difference and the like of Grey Goose have simply cornered the superpremium niche by specific marketing to its core high end audience. Indeed Grey Goose did this in part by simply raising its price to give a perception of quality and exclusivity to the customer (in economics terms a Veblen good). It can be seen that Absolut has since its first launch in the American market been away that the issue of brand image is of vital importance and has also tailored its marketing approach to the American market.

It is now regrouped after losing ground at the start of the millennium and has invested in a new IMCM which should bring rewards through targeted and efficient marketing that seeks to play up its core values of purity and quality whilst retaining its connections with the trendy world of the American arts scene. This should lead to success in its pursuit of market perceived value and so increase sales as customers will form a personal relationship with the brand.

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