Russian Standard Vodka Case

Introduction:

Roust holding launched the Russian Standard Vodka in 1998. the main goal on launched the Russian Standard Vodka was to set a new standard of world class quality for a new breed of global Russian brands.

Brand identity and Strategy:

The strategy of creating an Russian Standard brand started with two goal 1- Russian Standard to become a global umbrella brand by having different categories with the same brand . 2- Russian Standard to become the first premium quality brand from Russia.

Additionally to create the brand identity, the management team decided to carry out a survey with the consumers and also to have some advices from international advertising experts and brand identity agencies.

Expanding Decision:

In 2002, Russian Standard Vodka sales achieved the number one position in the premium segment with a 27% market shares. This successful inside Russia encourage the Management to expand externally trying to make Russian Standard Vodka in the first position in the world. The first step was in 10 European Countries such as UK, Greece and Hungary. There was no change in the product or the way of introducing the product in the market.
The next step was USA which considered as the biggest premium vodka market in the world. There were three ways to expand. First way is to introduce it with the same product and marketing. Another option is to introduce a global brand which suits the local market. Third option is to have a custom approach to the US market.

The Strategy was to succeed in expanding in the USA market which will have an positive effect in the product and the equity of the Russian Standard Bank who owns quarter of the Roust Holding.

Analysis of Vodka Market:

The Vodka market divided into four price segments, Low, Standard, premium and super premium. The reason behind that was to provide each market with product suitable for each market condition.

The Russian market was controlled by low-cost local brands and the black market. Imported vodkas briefly rose in Russia in 1990s, but the economy was geared toward cheap vodka consumption

Vodka in Russia was became part of Russian table and tradition. Also Vodka was mainly for men because the Russian women prefer lighter drinks.

The popularity of Vodka in the US market was based in two factors: 1- It is refreshing and easy to drink alcoholic drinks which can be consumed in many places 2- It can be mix with other drinks which is a common in US to drink cocktails.

Evaluation of Russian Standard Vodka Marketing Strategy :

1- the target customers in Russian Market was the male in 30s or 40s with medium to high income which the emerging middle east class.

2- Roustam main concern was to have outstanding quality, therefore in 1998 he hired the services of major Russian scientific institution specialized in food research to work on the product formula.

3- the RH management focused on particular detail on the packaging of Russian Standard Vodka during the design stage. Their main target was to develop a bottle that would explicitly reflect the super premium nature of the product and to ordered most packaging components form leading manufactures in Europe.

4- Russian Standard was one of the most expensive brand among locally produced Vodkas . Russian Standard was cheaper that imported Vodkas, such AS Finlandia and Absolut.

5- From advertising point of view, the first advertising campaign for the brand was in 1999 by the UK-based agency Seigel & Gale. The Russian Standard campaign was rolled out in glossy magazines aimed primarily at a medium-high income audience, such as GQ, Vouge, Harpers Bazaar or Marie Claire as well as some outdoor. Billboards advertising the campaign were set up in places where potential consumer movement was high, such as Moscow Sheremetiyevo international airport. In addition to this advertising campaign, functional adverts and promotional articles were placed in magazines, depicting the bottle and describing product benefits, such as Mendeleev’s original formula and taste.

6- Sponsoring a nightclub parties to increase brand awareness, encourage sampling and enhance product merchandising.

7- The company also developed an incentive system motivating supermarket staff to promote the brand

Analysis & Recommendation:

The marketing strategy of Russian Standard Vodka was in different directions. The first direction was focusing in the local market where they started to develop the brand name and to make it the number one drink in the country. second direction was the expansion process when they started with the 10 European countries with the same product and strategy . After they succeed in distribute the product in Europe they moved to USA with new strategy and product with same brand name.

Another important part of the marketing strategy was the distribution process where they sponsored a nightclub parties in order to increase the awareness of the brand. Additionally the company developed an incentive system motivating for the distributors in order to promote the brand.

Advertising is another component of their marketing strategy therefore the company focused in doing a dvertising campaign. Also functional adverts and promotional articles were placed in magazines, depicting the bottle and describing product benefits.