MKT10007 Assignment 2 example of an HD student assignment S1,20 PDF

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Semester 1 2021...

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Summary In this assignment I chose to focus on Vodka Cruiser, due to my other teammates choosing Canadian Club, Smirnoff and Bundaberg Rum as I thought none of these were firstly targeted at women, nor the extremely young age group Vodka Cruiser targets. I firstly will analyse it’s ownership by Asahi Holdings and current financial status. Next I shall cover Vodka Cruiser’s market mix, and its three levels of its products offered. I will then discuss the threat of competitors in the microenvironment and risks they pose, as well as opportunities to overcome this threat. I will then show the damage of the political environment intervention in the macro environment. Finally, I will identify Vodka Cruiser’s target consumer persona including their geographic, demographics, behaviours, psychographic as well as socioeconomic state. This persona will have set goals, motivations and frustrations that lead it to purchasing Vodka Cruiser products.

Vodka Cruiser Vodka Cruiser is a well-known ready-to-drink beverage known for being bright and colourful, and often criticised ‘no alcohol’ taste. It has been proven to be a hit with young girls, unfortunately even those being of under the age of 18. However, it requires strategic marketing after a decline in sales for being seen as immature and irrelevant. It is regained strong loyal fans with is Facebook Business page and notorious competitions for users to vote for and create new flavours to be released. It is part of the Asahi Holding (Australia) Pty Ltd but has recently been underperforming in the industry with up and coming mixed spirits such as Canadian club.

Vodka Cruiser’s Brand and History “Vodka Cruiser is a favourite ready-to-drink vodka brand. With fruit-inspired colours, the Vodka Cruiser range comes with strong flavour credentials and the ‘Premium Triple Distilled Vodka’ signature...” (Asahi Beverages, 2019) Established in New Zealand in 2000, and then purchased along with Woodstock in a deal worth $1.19 Billion Dollars by Asahi Holdings (Australia) Pty Ltd (owned by Japan-based Asahi Group Holdings Limited) in September 2011 to enter the market of Ready-to-drink beverages. Asahi Holdings (Australia) Pty Ltd also runs other brands in sperate markets than RTD Mixed spirits. Due to the Japanese Brewing Company origins, many are in the Beer Manufacturing Industry, where each brand is purposefully purchased to meet the needs or different consumer. They enter the premium international beers market with Grolsch, Peroni Nastro Azzurro, Asahi, Budweiser and Estrella Damm. They also target the craft beer market with Cricketers Arm. They also have Goat beer as their insert into the modern beer market. They also have a stake in the cider market with ownership of Somersby Cider. And also the Spirit manufacturing industry with Vodka O and UNTOLD, however Vodka O has now also released flavoured drinks thus entering the RTD market. Ashai’s Vodka Cruiser and Woodstock, having 14.9% market share of the Ready-to-drink sector in 2017, to 15% as of November 2018 (Ashahi Group Holdings, 2018), and now 15.5% as of February 2019. It has been observed however, that Asahi Holdings is under performing in the RTD industry so much so they are suing previous owners Pacific Equity Partners for misrepresentation of company’s profitability due to an expected 1.3% annual decline in revenue(Reeves, 2019).

Vodka Cruiser’s marketing mix Product: Vodka cruiser has their product, being a choice of eight permanent fruity flavours, and three different Mudshake flavours ready to drink 275ml mixed vodka drinks available as a single, four pack or case of 10. They also offer a sugar free range of five different flavours. They also offer their premium Vodka Cruiser Black range in 275 ml bottles or 375ml Cans. Place: Vodka Cruiser has four predominant distribution channels, firstly being independent alcohol stores such as Dan Murphy’s and First Choice Liquor, secondly Supermarket channels of Woolworths’ BWS or Coles’ Liquorland, thirdly the opportunity to purchase single bottles at clubs, and finally availability at assorted pubs.

Promotion: With a media budget of up to $500,000 (Brumley, Martin & Lyon 2015), Vodka Cruiser utilises promotion through both email marketing and social media. Vodka Cruiser utilises it 7,340 followers on Instagram, and Instagram Page with 105,372 likes. To remain in touch with customers, Vodka Cruiser utilised Facebook’s live TV platform to create Vodka Cruiser TV(VCTV) to create a 6 part weekly series with endorsed influencers SketchShe (online comedian team with 1.9 Million followers) gathering over 213,000 views in just their first episode (Hasan, 2017) and overall reached 1.35 million Facebook users(Cameron, 2017) Vodka Cruiser continues to utilise the Facebook Live platform as well as holding online competitions and polls to engage with its customers.

Price: Vodka Cruiser charges $16.99 per pack of four of their traditional range and $19.99 per pack of four for their premium black range. Compared to their competitors such as Smirnoff Double Blacks at $26.49 per four pack, Midori Illusion $18.99 per four pack, Ruskis are $16.99 per four pack, and UDL $23.99 per 6 pack, Vodka Cruiser is a mid-point price range, slightly on the lower end thus appealing to the hip pocket of a customer.

Three Levels analysis of your brand’s P for Product. Vodka Cruiser’s Core Product is not the drink itself, but rather the experience it creates. It is marketed as a way to have a good time with your friends. They offer a tasty way to consume alcohol thus creating a memorable night with others. This is apparent through Vodka Cruiser’s value proposition statement of “We all know that sometimes the best memories are made before the night even starts, so grab your friends, pump your favourite tunes and get the party started at your place” (Vodka Cruiser, 2020). Vodka Cruiser’s advertising aims to for their customers to envision drinking their product will result in fun, friendship and positivity.

Vodka Cruiser’s Actual Product is a household known brand and name known for its youthful, vibrant coloured drinks in classic beer shaped glass bottles with sweet, lolly like flavoured mixers making it tasty and easy to drink on less mature taste pallets compared to other spirits, beers and wines. Vodka Cruiser’s Augmented Product is included in their packaging, especially on those bought in a case or four pack with competitions to enter such as the current “buy two four packs and win a ModelCo Voucher’ or “buy any two four packs and enter a draw to win 1 million dollars”, as well as any other current competitions and vouchers relevant to timing. There is also a money back guarantee if the customer is not satisfied, and Drink.Wise.org.au referenced for those needing support.

Microenvironment Competitors pose the biggest risk to Vodka Cruiser as “Over the past five years, an influx of new products, flavours and brands have entered the industry, increasing competition for the well-known Vodka Cruiser. This reduced the firm's market share over the three years to December 2016” (Reeves, 2019). Vodka Cruiser was a finalist in the 2019 Australian Liquor Industry Awards for Light Ready To Drink beverages, identifying the other finalists of Bacardi Breezer, Gordons Gin and Tonic, Midori Illusion, Pimm’s No1 Cup, Ruski, Smirnoff Ice Double Black, Smirnoff Ice Red, and UDL, being the biggest competition of Vodka Cruiser within their industry (Australian Liquor Industry, 2019) However, as of October 2019, the Australia Bureau of Statistics identified consistency in all alcoholic drinks, but a rise in spirit consumption, potentially making straight spirits, and handmade mixed drinks a bigger competitor to the industry (Australian Liquor Industry, 2019). However, after the Alcopops tax in 2008 and retail price rise in the RTD industry, “Cider is seen as a strong substitute for RTDs as it is sweet and favoured by younger demographics” (Reeves, 2019) Most of Vodka Cruiser’s competitors share a similar price point, if one however was to choose a differentiation strategy and start charging a premium price that could create a competitive advantage and sense of sophistication over Vodka Cruiser after reports that the “Ready to Drink category was in decline and fraught with negative perceptions of immaturity”(Hasan, 2017). One of the brands could also do the opposite and become a loss leader by lowering prices and appeal to low income earners over the Vodka Cruiser products to gain a competitive advantage. Vodka Cruiser also has external competition from non-alcoholic beverages such as the soft drink industry. This is prevalent especially with JWT’s top trends for 2020, trend 48 being sober bars, with more Australians embracing a healthier lifestyle and alcohol consumption in “Australia has reached its lowest point since the early 1960s, having declined steadily since the mid-2000s’ (Ketchell, 2015). As a result of this trend, it would be proactive for Vodka Cruiser to follow in the footsteps of Beer Brands and coming out with zero alcohol alternatives such as Heineken 0.0 and Carlton Zero; Vodka Cruiser could release a zero alcohol version of their drinks to provide an option for those in this sober trend of 2020 but enjoy the taste still of a Vodka Cruiser. Vodka Cruiser could gain a competitive advantage over their competitors with the advancement in health awareness of sugar, artificial colouring and calories contained in most ready-to-drink beverages, to which Vodka Cruiser can promote their sugar free range and be an industry leader and customer preference.

Macro environment The political environment poses major risks to the stability of Vodka Cruiser, due to governing body regulations on alcohol availability, supply and tax intervention. Vodka Cruiser saw the brunt of this in the 2008 Alcopops tax (the federal government imposes a 70% tax increase on pre-mixed alcoholic drinks) causing last year for the Light RTD category falling by 11.4%, and Vodka Cruiser’s sales declining at an annualised rate of 5.5% (Reeves, 2019). This Alcopops tax has since been largely critiqued as not being effective in its attempt to decline teenage drinking and binge drinking which could mean further intervention on the industry thus once again damaging Vodka Cruiser’s revenue. However, there have been some statistics showing that drinkers are since substituting RTD beverages with other drinks not affected by the tax, such as cider. If a tax was imposed on ciders and beer, it could make the RTD market once again more appealing to shoppers.

Vodka Cruiser’s target consumer persona

Geographic

Vodka Cruiser sells best in warmer weather, seen in 186% more Vodka Cruiser was consumed in summer 2013 compared to winter 2014 (Brumley, Martin & Lyon, 2016), therefore in Australia, Queenslanders are more avid Cruiser drinkers due to their warmer climate year-round. As Vodka Cruiser is often associated with clubbing, the target customer lives in larger cities with more nightlife, such as Melbourne compared to Sydney due to their lock down rules

demographics

Vodka Cruiser has identified their target consumer being between the ages of 1824(Dawson, 2017). Although men may enjoy vodka cruisers, the target persona is female, seen by their 2014 official slogan of “fashionable, spontaneous, flirtatious and empowered” catering much more to young females. The target consumer due to the price range being relatively low, would have a low income who is price sensitive to more expensive options, however, due to the age range having a possibility for living at home and not having long term payment commitments, their income would be relatively disposable. The target consumer is likely to be socialable, bubbly and enjoy going out and being with friends, and potentially drinking cruisers to fill a need of belonging and confidence. The target consumer is likely to be social and enjoy outing events such as clubbing where they will drink beforehand with friends, and/or order at the bar. Due to Vodka Cruiser’s strong online presence, it is likely that the target consumer also spends significant time on social media. Due to the current positioning of Vodka Cruiser to be associated with Festivals, seen by the Summer 2020 #cruisersstaycolourful competition to win “the ultimate festival experience” (Oddo, 2020); the target consumer may also attend festivals.

Socio-economic

Psychographic

behavioural

The persona I have chosen is motivated by multiple factors; Due to the age range, it is unlikely that they have a high income and therefore are likely to be very price conscious of what they can afford and what is best value. They are motivated to not spend too much money on a night out, yet still be able to have a good time. They may utilise alcohol stores such as Dan Murphy’s or BWS instead of the club bars themselves to avoid paying a higher price. They may also research these stores and apply a ‘low to high’ price setting to select their desired drink. They are motivated to find a drink that is palatable, sweet and easy to drink due to an unmatured taste in more sophisticated drinks such as whiskey or wine. They may also be motivated to find a brand that is considered “cool” in their age group and would be motivated by celebrity endorsements with Vodka Cruisers as well as Vodka Cruiser’s social media presence and sponsorships. The persona is likely to want to go out to dress up to impress others, especially if not in a relationship, and therefore is influenced by other fashion and popular trends. The persona may be frustrated by raised prices due to the alcopops tax as well as restrictions on alcohol purchases such as “limited to two cases per person”. The life goals of the persona would be to be able to have fun and enjoy social outing while they are still young. Vodka Cruiser tries to understand the need for their persona to want to go out and socialise and drink, and what triggers this need. This need may be triggered by a want to fit in and be accepted by other. To do this, Vodka Cruiser using marketing that focuses on “a fear of missing out” by posting people engaging in priceless experiences and conveniently using product placement to associate this experience with drinking Vodka Cruisers. Conclusion In conclusion, I do believe that Vodka Cruiser appeals to quite a large range of customers with their target persona. After negative backlash from 2013-15, they made a strong comeback from being labelled as “uncool” by utilising Facebook Live and increasing their use on social media. I do think however their strict persona creates a bias that the drink is only for young girls and therefore excludes all other possible purchasers. I therefore think they would benefit largely from creating multiple personas such as a target at those who drank Vodka Cruisers when they were younger but “outgrew” them, to have a return loyal customer. I also think they could target an older audience with their sugar free range as those who are potentially less active due to full time jobs, and due to a natural aging metabolism would be more health conscious and appreciate a sugar free beverage marketed towards them. Finally, I think the premium Black range, especially those that are sold in a Vodka Cruiser first in tin cans could be marketed towards younger males in the clubbing, festivals and bar scenes. Vodka Cruiser has been suffering with a lack of market share due to so many new flavours becoming available on the market and need to meet current trends and taste, I do believe their strategy of allowing open polls on their social media for customers to vote for their next desired flavour is a good first step to regaining their market share and generating revenue.

Resources Asahi Beverages 2019, Vodka Cruiser, viewed 15 April 2020, < https://asahi.com.au/brands/spirits/30-vodka-cruiser> Asahi Gorup Holdings 2018, Year End Factbook, viewed 15 April 2020,

Reeves, M 2019, RTD Mixed Spirits Production in Australia, viewed April 10

Brumley, L, Martin, Z & Lyon, C 2015, Likes into litres: How Vodka Cruiser used social to drive sales, viewed 16 April 2020, Hasan, A 2017, Vodka Cruiser: TV Live on Facebook, viewed April 16 2020, Cameron, N 2017, Vodka Cruiser reconnects with younger consumers via category-first Facebook Live campaign, viewed April 16 2020,

Vodka Cruiser 2020, Home- Vodka Cruiser, viewed April 10 2020,< http://www.vodkacruiser.com.au/>

Australian Liquor Industry 2019, National Liquor News October 2019, viewed 20 April 2020, Ketchell, M 2015, Don’t believe the hype, teens are drinking less than they used to, viewed 22 April 2020, Dawson, A 2017, Vodka Cruiser found to be targeting children on Instagram by ad watchdog, viewed 22 April 2020, Oddo, S 2020, Everything you need to know about the ‘grammable mural popping up in Brisbane, viewed 15 April 2020,...