When Market Research Isn’t the “Absolut”

Author: Michelle Burtt

There’s no doubt that market research can provide firms with vital information, but how sacred are these results? Should companies rely solely on this information to make executive decisions?

Prior to launching the Absolut Vodka brand in the US in 1979, the American importers conducted a $64,000 research survey gauging consumer interest. The results indicated the brand would likely fall flat in the spirit market [1], thus the super-premium priced product should have stopped right then and there.

The spirit market is one of the most competitive in the world; who would buy an unknown premium priced vodka from Sweden?  Consumers generally place emphasize for superior vodka on the quality of the alcohol and the connection to the traditional vodka culture- the usual selling proposition being of Russian origin.

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The survey revealed three factors working against the brand:

  • A gimmicky name
  • An unrecognizable bottle with no paper label, and
  • A country of origin (Sweden) not known to consumers to produce high quality spirits.

Although research warned that importing a vodka would be “a risky venture”, the importing company, Carillion, had already invested significantly in the venture.  “We wanted to recoup what we had spent“ said Roux, president-chief executive officer.

During the first year on American market, only 10,000 nine-liter cases of vodka were sold.  Being unable to call on their Swedish origins, Absolute Vodka employed a strategy of focusing on the local culture when entering new markets, thus creating brand relevance and differentiating itself in an already cluttered vodka market [2].

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The bottle, as it turned out, was a key selling point. Modelled on a popular antique Swedish medicine bottle, the design was purposefully elegant, different, simple and very Swedish. There was to be no label to hide the purity of the contents, and blue colored writing to identify the brand. This time it was the marketing department that returned the negative feedback- the short neck made the bottle hard to pour from, and there was no actual label on the bottle [3].

Despite this disapproval, the design went ahead.  It proved a hit. A combination of dynamic imagery, contemporary packaging, strong links to fashion/ artists/ designers, off beat advertising and clever promotions helped build their image.  Hundreds of limited edition bottles with second skins have since been produced.

Absolut3           Absolut-Unique-Ardagh-Group-WINNER_dnm_gallery

Absolut has won over 350 awards in recent years for its “bottle ad campaign” and is now the most famous bottle of Sweden. In 2013, Absolut launched its brand localization strategy in China, launching the brands first limited edition bottle in China [4].

Absolut2

Today, Absolute is present and available for purchase in more than 80 counties around the world, and is the number one selling imported vodka in Canada, the USA, Finland and many other counties.  Few consumers ever stop to consider why they prefer to drink a Swedish vodka rather than a Russian one. “We think this is all `smart` marketing“ declares Roux, who had enough foresight at one time not to give into research [2].

The gamble certainly paid off for Absolut, but how many other brands ignored the same advice and lost?

 

 

References:

[1] http://articles.chicagotribune.com/1988-11-16/business/8802160825_1_absolut-vodka-market-brand

[2] http://customwriting.co/samples/181-absolut-marketing-communications

[3] http://www.examiner.com/article/bartending-101-what-is-absolut

[4] http://www.labbrand.com/brand-source/absolut-vodka-brand-localization-strategy-china

 

 

 

 

 

 

 

 

 

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12 thoughts on “When Market Research Isn’t the “Absolut”

  1. It’s a very interesting topic you brought up! True, Absolut Vodka took the risk and ignored some of the market research suggestions (such as the unconventionally short-necked bottle design) which with the help of clever promotions turned out to be perhaps their most distinguishing feature.

    Nevertheless, they also extensively used market research in other aspects of marketing mix. Their strategy, “continuity combined with variety” is an example of adherence to extensive marketing research, enabling Absolut Vodka to be one of the most diverse vodkas on the market. As you mentioned, it sometimes IS a gamble, where smart marketing comes in.

    Old Spice also made some radical decisions which were unconventional to their previous brand promises and turned out to be a winner. Initially introduced as a serious brand targeted towards middle-aged men, Old Spice took a different direction with quirky and unexpected adds that went viral around the world. The new Old Spice – targeted towards younger generation of customers – used clever campaigns that were rewarded with an immediate and unforeseen return on investment and resulted in a 107% sale increase. [1]

    [1] http://www.mycustomer.com/feature/marketing/how-make-marketing-gamble-and-win/165100

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    • Thanks for the comment. Yes, Absolut seem to have turned their weaknesses into points of strengths and differentiation. A very smart move, and quite similar to how Old Spice played up their serious/ old man perception in a jokingly mocking way which is now a point of differentiation for them.

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  2. The research conducted was of primary nature. May be the research over-looked some facts which were not recognizable at the time of research such as marketing strategies, which positioned the brand differently among other spirits. Success of the Absolut Vodka went against the conclusion of the market research but facts provided by the research was absolutely true, name must have been gimmicky, the bottle was unrecognizable. It can be said that research will not tell us about the success or failure of a product but rather will give us the facts which can be challenges for the marketer or the company to overcome which will ultimately lead to brand’s success.

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    • Thanks for the comment Davin. Yes, it would be interesting to see exactly what questions were asked in the survey as I’m sure they wouldnt have considered the types of effective marketing strategies that Absolut employ today.

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  3. I think Absolut was successful because of the research it did. Just because they didn’t follow the recommendations of the research doesn’t mean that they ignored the advice – they just took another way around it to mitigate the risks that the research showed.

    If they had done no research, would they have know to invest so much in focusing on the local culture, and trying to create a point of difference with their bottle designs?

    Just an alternative point of view to think about!

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    • yes I agree totally, the research was still valuable. Had there been no research the company would not have known what obstacles they were up against in the first place. Perhaps they didn’t “ignore” the advice so much as they accepted the challenges that it identified.

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  4. Sometimes it’s about having the right gimicky angle and funky look that sells, not just the product itself. As you stated, when Absolut first entered the Vodka market, their sales figures weren’t high but, as a result of the data, they focused on then creating local brand relevance to differentiate themselves in the niche market internationally. They also looked to set themselves apart from traditional Vodka products by having no label and a unique bottle shape. The fact is that they took risks, and clearly those risks paid off, but I would still presume that they were heavily investing in reviewing the data to help guide their marketing strategic direction, even if they didn’t always follow the conventional line. I’m not sure how many other companies have taken a risk like that and been successful, but well done to Absolut!

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  5. I suppose a number of questions arise in this scenario. How good was the research? Was it relevant? How much did Absolut believe in their product?

    For many of us, I would imagine that the premise for doing market research is to provide answers. In this case, should Absolut Vodka enter the US market? If the research that was conducted suggested that it shouldn’t, then why did they?

    Did they have total faith in their product? Why conduct the research if you were going to go against it?

    I find this situation quite interesting. It obviously worked well in this situation but I would imagine there are many more products that have been released, just on belief that they will do well, that we have never heard of and probably never will.

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    • thanks for the comment, and yes it goes to show market research will not predict the success of a product 100% of the time. im sure there are numerous examples of product lines that were a hit in the testing phase, but failed in the market upon release.

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  6. This is an interesting example of market research. It would be fascinating to review the original questions in the survey and the target market sectors that they were distributed to. Assuming the market research followed good principles, then we can say market research is one point of reference, but not definitive.

    All the feedback from the survey: ”a no-go for these reasons: a gimmicky name; a bottle that would be lost on retail shelves, especially because it had no paper label to showcase it; and that the country of origin (Sweden in this instance) would prove meaningless to consumers”.

    What the market research analysis excluded was the not extraordinary creative expertise and trendy advertising. Local brand relevance, in one case inspired by an ancient Chinese fable, so the new market can relate.

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  7. Absolut won hundreds of awards in the past years for its Bottle Ad Campaign, the bottle shape and its unique design should be unforgettable. Absolut uses several methods to support the brand, examples are long marketing campaigns, many different flavours, hundreds of different limited edition bottles, and cooperation with artists and musicians. These make Absolut in line with ‘fashion’ and many bottles are purchased by fans all over the world. And the most important part is the overexposure of Absolut in the media, magazines and bars. The success of Absolut tells us that no matter the product, there will always be many and varied ways to market it.

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  8. Very interesting and informative blog. Absolut and its research is a primary example of marketing research at it’s finest. The way that they’ve incorporated the trusted Swedish medicine bottle into the design is so subtle yet genius. The bottle and the advertising campaign has been overexposed all over the world with the company willing to pay the big bucks to get the iconic bottle onto movies, series and tv shows including the simpsons.

    It’s all paid off though, Absolut’s volume of sales just keep rising.

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