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Internationally renowned luxury brand for premium vodka, Grey Goose was the brainchild of Sidney Frank, who even started the marketing of the product in the markets even before it hit the production line. (Grey Goose Heritage, 2009) Grey Goose is a premium vodka made in France, the place of haute cuisine, fashion and luxury and is bottled in a white frosted glass with the silhouette of flying geese, a sign associated to French people. It was awarded the name of “The Best Tasting Vodka” in 1998 by the Beverage Testing Institute due to its smooth finish, light palate and subtle notes. (Branca, 2009)
Marketing, or rather strategic marketing can be defined in many ways possible but the core output of the definition is to provide not just the product, but a service to customer so that they keep coming back again, basically meaning to make selling unnecessary according to Peter Drucker. (Kotler, Gary, Trifts, & Cunningham, 2013). A company, to make their marketing successful must identify certain different marketing channels and use certain different marketing mix to reach to the desired target markets. But identification of the target market is also crucial and hence various factors must be considered as follows:
- Economical (Zaichkowsky, 2010)
SWOT Analysis for Grey Goose
Sidney Frank first marketed this product in the US market where he identified that there was a gap in the luxury market and the distillate spirits available. He had a simple strategy, to brand the product as an elegant, luxurious, tasteful brand with high quality. This Vodka came from the home of luxury products, France and was created by French masters using the exceptional winter wheat, naturally filtered spring water from Champagne through its limestone properties and then distilled in a five step process in the Cognac region. Also, unlike other brands, this spirit was shipped in wooden crates in a frosted bottle, so that it caught the eye of the bartenders as well. This is was influencing the influencers, or simply to put in marketing terms, trading up. Hence the following points were covered:
- Brand perception
- Unique Manufacturing process
- Brand loyalty from luxury market
- Premium quality vodka
- High Productivity in market (Prentice & Handsjuk, 2016)
Another great example of trading up for this company was that the famous movie, Sex and the City, called for Cosmopolitans to be made by Grey Goose, hence ending the competition for this brand and it soared in the US and the global market. (Lyoen, 2014)
- Limited options
Although Sidney Frank, and later Bacardi, who bought the brand created a huge brand loyalty from the prestigious market, there are certain limitations, for example there are only seven different options of Grey Goose as compared to fifteen plus options provided by Absolut. (Venkatesan, Raggio, & Noel, 2017)
- Higher prices as compared to other brands
Another factor to consider is the price mark-up on the brand, it’s higher than the other luxury spirits in the market. Although it is beneficial for the brand and the product can be termed as a Puzzle or the Cash Cow, it provides high profitability but is low in sales by Volume.
- Major market share in US
The major Market share for Grey Goose is the US market whereas considering Absolut as its major competitor, they have an even share in their global market. Although the US market is highly influential globally it still does not rectify the loss of growth for this brand in other countries, for example, Canada has seen a growth in the sales of spirits by 14% but Grey Goose has only increased 12% in sales, majorly in the Ontario region.
- Can enter a new market
Since Grey Goose is majorly associated to the US market, it has the opportunity for targeting other markets in the global scenario. Taking an example of the Canadian Market, where for e.g., Tim Hortons was taken over the Starbucks corporation because consumers considered the Starbucks Frappuccino’s to be small daily luxuries, markets are growing where people want daily luxuries, spending more money on a single cup of coffee. Similar it can be said the same for the spirits where Absolut, although costs $15 CAD less than Grey Goose, was taken over by this giant because the idea of getting a super premium product, had by the stars of the media industry was the selling point to the consumers.
- Demographics (Canada)
The demographics of Canada have been seen to change drastically over the past 50 years due to their open immigration laws which allowed a lot of people to immigrate to Canada, in the age groups between 20s-40s for education or work. This in return increased the economy of Canada by 17% in the past twenty years and indirectly sales went up in the hospitality sector. The beverage industry also grew as more Millennials came in the general population of Canada and demanded for healthier, sustainable options and were prepared to try new products and since the US market has a major influence over its Canadian counterpart, old fashioned cocktails came back into beings, that included Cosmos with Grey Goose back in the bars. Graphs are provided for the same:
- Build on current market – SUSTAINABILITY
Talking about the current market of grey goose, that includes the prestigious, the one who want to enjoy luxury and the millennials who appreciate the finer things for life, these markets now demand brands that are sustainable and care about the environment, hence Bacardi, the owner of Grey Goose and other respectable brands set out a Good Spirited environmental sustainability initiative with specific goals from 2017 to 2022. They reduced their GHG Emissions, reduced their water usage by nearly 50%, source 86.3% of their materials from Bonsucro certified suppliers, and also sent only 0.2% of their waste to landfills as rest was diverted back to be recycled, for example, the vinyl made by Bacardi now are made of straws. However, they were not able to meet their goal of reducing packaging by 10% due to new packaging design implications. (Arthur, 2018) (Arthur, 2018)
- Association with events, holidays and luxury
Grey Goose has long been associated with events, it started with a pop-up Boulangerie Francois to explain the wheat used in the grain-distilled spirit to the current US Open in Tennis and the new campaign of ‘Live Victoriously’. (Simpson, Feburary)
- Technological trends
According to spirit business, certain boundaries are being broken in the market in terms of alcohol with new transgressive spirits joining the market. Also, the upcoming discussion about cannabis infused drinks, that is soon to be launched will increase the competition for all brands. Although technology helps to decipher the need of the market, however it cannot be the ultimate decision maker in terms of the beverage industry as changing political situations, economies, affect the consumption of liquor. Taking the example of Dry January or Sober October, only certain places were following these trends and barely affected the rate of alcohol consumption. Social media plays an important role mostly for campaigns of company that meet their customers demands (Lachenmeier, 2008).
- Increasing competition
Due to it’s heightened price, grey goose has a limited market share in the bell curve and now many vodka brands, such as Absolut or Smirnoff are coming up with new brand recognitions for the customer while providing over-the beyond quality to consumers in terms of taste, which is ironic as vodka is a neutral, flavorless spirit in the market.
- Increasing costs – Import/Export and government taxes and regulations
(Statista, 2019) According to the graph there was a decline in sales volume of Grey Goose due to the changing regulations of Import and Export globally. Taking the example of the Canadian Market where alcohol can only be brought in through liquor license control boards, who have different sets of regulations in each province, it is tough to enter the Canadian market. However the federal government is discerning lifting the tax applied to inter-provincial trading which will be beneficial for grey goose to enter other markets, such as British Columbia where majority of the alcohol consumed is wine.
- Affect of cultural and religious motives in alcohol intake
According to the 2011 Census, carried out by the Canadian Government only two-thirds of the population identifies themselves as Christians and rest belonged to minority groups such as Jewish, Sikh, Hindu or other traditional minorities. Religious affiliations also affect the consumer or the target market as these consumers, according to their own religion will not partake in alcohol consumption. Recently as Immigration in Canada has increased by 7.2%, the graph has shifted and only three-fifth of the population identifies themselves as Christians and the minorities have increased, hence indirectly affecting sales of alcohol by volume. (Demography Division, 2016)
- Changing dynamics in politics
Due to the current ongoing elections in Canada (2019), there have been certain new prohibitions in the import and export laws overall. The government increased taxes and levies for imports to promote their local, organic products from their own homeland. Globally also there was a slowdown in the global economic growth due to economic and political issues in countries such as Hong Kong, Venezuela, but apart from that the spirits industry still a small, steady, optimistic growth. (Morris, 2019)
- Other Threats
- Changing buyer’s taste
- Increased knowledge about spirits in Consumers
Federal Agencies influences
Grey Goose Vodka in order to meet regulation established from Health Canada, Canadian Food Inspection Agency, and Industry Canada presents toke several measures established from Safe Food for Canadians Act (SFCA), Safe Food for Canadians Regulations (SFCR), as well as Food and Drugs Act (FDA) and Food and Drug Regulations (FDR) (Canadian Food Inspection Agency, 2019). According to Canadian Food Inspection Agency label requirements, “all alcoholic beverages containing 1.1% or more alcohol by volume must declare the percentage by volume of alcohol contained in the product”; The bottle of Grey Goose in fact presents the alcohol by volume (40%) in the bottom left corner of the front (Canadian Food Inspection Agency, 2019). The bottle also states “Imported” and “distilled and bottled in France” to clarify origin, respecting the Government warning on imported alcoholic beverages regulation (Canadian Food Inspection Agency, 2019). Also, even if it is an alcoholic beverage with more than 0.5% alcohol so the Nutritional Facts timetable is not required, the Grey Goose bottle declare “distilled from French wheat” as a gluten source of 10ppm or more that must be declared when present in alcoholic beverages (Canadian Food Inspection Agency, 2019).
Grey Goose Vodka entered the marketplace since the beginning with strong classification: as a luxury product. All the marketing and advertising during the years only made the need of the product stronger for their target market. Millennials and older people with moderate to high income, looking for a premium drink would be Grey Goose target market. Thanks to the concept of luxury behind the Vodka established since the beginning, because of the quality of the grain, the water, the process, and the place of origin; the sustainability campaigns that they hold targeting goals in reducing GHG emissions, water usage, materials, and waste; and the association with famous movies as Sex and the City, and special events, Grey Goose vodka perfectly gets to it’s target market.
- Arthur, R. (2018, October 19). Bacardi on Sustainability in Packaging. Retrieved from Beverage Daily: https://www.beveragedaily.com/Article/2018/10/19/Bacardi-on-sustainability-We-ve-learned-a-lot-about-the-importance-of-addressing-more-than-just-weight-in-packaging
- Branca, J. H. (2009). The Cocktail Creationist. New York Finance, 1-5.
- Demography Division. (2016). Canadian Demographics at a Glance. Statistics Canada, 1-81.
- Grey Goose Heritage. (2009). Retrieved from Grey Goose: https://www.greygoose.com/en-ca/heritage.html
- Kotler, P. T., Gary, A., Trifts, V., & Cunningham, P. H. (2013). Principles of Marketing. Chicago: Pearson Canada.
- Lachenmeier, D. S. (2008). Rapid and mobile brand authentication of vodka using conductivity measurement. Spreinger-Verlag.
- Lyoen, A. (2014, December qq). Absolut Vs Grey Goose. Retrieved from Vodka Vision Weebly: https://vodka-vision.weebly.com/analysis/swot-analysis
- Morris, R. (2019, October 11). pirits Market 2024 Emergent Technology Advancement in Coming Year | Diageo, Pernod Ricard, Brown Forman, Bacardi Limited. Retrieved from Online News Guru: https://onlinenewsguru.com/2019/10/17/spirits-market-2024-emergent-technology-advancement-in-coming-year-diageo-pernod-ricard-brown-forman-bacardi-limited/
- Prentice, C., & Handsjuk, N. (2016). Insights into Vodka consumer attitude and purchasing behaviors. Journal of Retailing and Consumer Services, 7-14.
- Simpson, J. (Feburary, 10 2016). How Grey Goose used experiential marketing to tell its luxury story. Retrieved from E-consultancy: https://econsultancy.com/how-grey-goose-used-experiential-marketing-to-tell-its-luxury-story/
- Statista. (2019, January 10). Statista. Retrieved from https://www.statista.com/statistics/308798/grey-goose-vodka-global-sales-volume/
- Venkatesan, R., Raggio, R. D., & Noel, K. (2017). Absolut Vodka: The Spirit of a Brand. Darden Business Publishing Cases, 1-14.
- Zaichkowsky, J. J. (2010). Strategies for distinctive brands. Journal of Brand Management, 548-560.
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