PEST Analysis (government intervention)

Political

Smirnoff is manufactured by Diageo which is operating in India, Ireland, Italy, the United Kingdom and the United States.

Diageo’s Plainfield facility is located in Plainfield, Indiana, 36 miles southwest of Chicago, and is Diageo North America’s largest bottling facility. The facility’s grand opening was in August 2013, following a more than $120m investment to transform the site, including the installation of new high-speed bottling lines and enhancements to other key areas to grow production capabilities and efficiency

The tax policy of Liquor in Indiana is $2.68 per gallon. Charged at $0.47/gallon if under 15%.

Trade restrictions in Singapore. Singapore is generally a free port and an open economy. More than 99% of all imports into Singapore enter the country duty-free.

Tax policy in Singapore.
(All goods including alcohol is subjected to 7% GST unless granted duty-free concession .)

political stability
Source : http://www.theglobaleconomy.com/Singapore/wb_political_stability/

Singapore Political stability index (-2.5 weak; 2.5 strong): For that indicator, The World Bank (govindicators.org) provides data for Singapore from 1996 to 2014. The average value for Singapore during that period was 1.14 points with a minumum of 0.83 points in 1998 and a maximum of 1.34 points in 2012.

Demerit good ( merit bads )
Generally regarded as demerit good, thus high excise taxes imposed in Singapore.
For social and/or environmental reasons, Singapore levies high excise taxes on beer, wine and liquor, tobacco products, motor vehicles and petroleum products.

References :

http://www.export.gov/ http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=349 link

Economical

International economic growth
Source : http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries?display=map

A rapid increase in GDP growth can be seen from the map above, just in a short period of 5 years a global increase of GDP by 104% can be seen, stating that the economy is doing well and growing rapidly.

Many corporations have taken advantage of the low rate environment to borrow money via the bond markets. Most companies say they are relaxed about the impact of a small rate hike, believing the market has already priced their bonds or such an event. However, some economists say the interest payments for companies who have issued low-grade debt could rise more quickly.

Other factors that could affect Interest rates:
-exchange rates
-inflation rates

References : http://ig.ft.com/sites/when-rates-rise/#faq

Social
Smirnoff products targets the consumers who are looking for high quality vodka and they portray themselves to be the best among its competitors by boldly emphasizing on the purity of its content as compared to its competitors.

Smirnoff's target audience are the 21 – 34 year old younger adults. Demographically this group of younger adults are 138% more likely than the average american to drink shots of spirits, 34% more likely to drink spirits on the rocks, and 29% more likely to drink mixed drinks.
Source: Gfk MRI's Survey of the American Consumer, Fall 2010(Adults 21+)

Smirnoff also built its branding by adopting cultural movement marketing. By posting an ad on its Facebook page to show its support for gay rights, it aligns with the rising idea of gay rights, hence further establishing Smirnoff's target audience of young adults who are more open to the idea of gay rights.
Smirnoff has a solid presence in the social media. With over 9.4 million likes and 226,000+ people talking about its brand on Facebook. Its twitter account has over 13,500 followers and has about 4000+ tweets which are updated daily despite its audience on twitter not being very engaged.
Smirnoff focuses on the social media campaign to showcase its products and the different ways in which they can be used to engage its audience. And in return, its success can be seen in the form of views, shares and comments on the photos posted by Smirnoff or retweets of its tweets on twitter.

Technological
Smirnoff offers premium vodka for a decent price. It is a reliable and trusted product and brand. The production uses a unique triple distillation process which leads to a cleaner and purer taste. The Smirnoff brand is a global organisation which supports having fun, being young at heart, being unique, special and different, and also supports quality and gay rights. Its brand values are originality, boldness, individuality and freedom.

Smirnoff brand owner only use the highest quality raw materials in its production process. The rpocess includes a triple distillation, which is a filtration process that lasts a minimum of eight hours and 47 individual quality control checks. This is the process that has set Smirnoff apart from other vodkas, securing and maintaining the customer confidence in its brand and premium quality vodka.

Although Smirnoff 'Red' is the world's leading international premium vodka, Smirnoff continues to develop many variations on the vodka theme to ensure that it is leading, rather than just merely keeping up with the competitive pace of the market.

Flavoured vodkas has been available for a long time, but were confined to specialist outlets and aimed at very small niche markets. Smirnoff then took the opportunity to introduce a varied range of flavoured vodka into the mainstream. Hence by putting Smirnoff onto the supermarket shelves, it exposes all vodka drinkers to a concept that entices them to experiment with the new types of vodka.

References: http://www.brandrepublic.com/article/159590/superbrands-case-studies-smirnoff http://www.scribd.com/doc/224767351/Smirnoff-Vodka-Brand-Analysis#scribd