January 15, 2016

Beluga Vodka Proposed Research, Development & Execution of Marketing Strategy

Beluga Vodka is a premium Russian vodka that wants to expand its presence and sales in the U.S. and the U.K.

In order to grow in these markets, Beluga must identify two territories as well as craft an appropriate on-brand style and tone based on:

•Profiles and trends of premium consumers in the U.S. and U.K.

•Trends in the spirits industry in both markets

Challenge

The project is built around four core areas of scope and high-level activity:

•Conduct a gap analysis and competitive analysis between Beluga and competitor brands Belvedere, Grey Goose and Ciroc

•Collect stakeholder and customer insights by applying qualitative research techniques, including in-depth interviews, in-situ observations, and contextual inquiry – as appropriate

•Develop user stories and personas

•Create a marketing strategy roadmap built around the style and tone providing the greatest opportunity to delight customers (based upon customer insights)

Scope

Understand - Audience preferences - Competitive landscape - Market trends

1Analyze - Customer and market behaviours

- Potential marketing and engagement strategies

- Data and survey results to reveal insights and opportunities

Create - Personas and customer

journeys - Marketing strategies - Customer engagement

roadmap - Recommendations on launch,

execution, and timeline

2 3

Approach

Determine baseline Conduct user and demographic research by interviewing consumers who drink Belvedere, Grey Goose and Ciroc. Interview Beluga stakeholders. Interview consumers, suppliers, service industry workers, non-Vodka drinkers, and luxury good purchasers to better understand Beluga opportunities, perceptions, and brand strength.*

Conduct gap and competitive analysesUnderstand market position, brand recognition, and customer profiles amongst Beluga, Belvedere, Grey Goose and, Ciroc.

Review trends in U.S. and U.K. alcohol markets. Conduct secondary research of alcohol markets in U.S. and U.K to identify opportunities to inform market strategy.

* See notes

UnderstandThe Current Situation

Analyze

Develop personas and customer journeysSynthesize stakeholder and customer interviews, analyze insights and market data, and understand unique markets to create personas specific to the U.S. and U.K.

Create initial conceptual marketing strategy options Identify ways to create an emotional connection between Beluga and its customers through workshopping possible behaviours, habits, and desires customers might have that would inspire them to drink Beluga. Incorporate insights from gap and competitive analysis results.

Our Customers and Competitors

Create

Present findingsValidated personas and relevant results. Customer journey to identify points along purchase path to influence potential customers, create loyalty, and enhance reputation.

Deliver strategy Based on quantitative and qualitative research according to parameters identified by stakeholders, present a customized strategy to make Beluga synonymous with luxury and pride.

Present recommendations Present roadmaps to engage customers in different markets, as well as road maps that provide step-by-step guidance on how to launch and execute strategy.

Value, Loyalty, and Prestige

Understand

• Customers praised the taste and quality of Beluga.

Beluga is a premium vodka

How Customers Perceive Beluga Vodka

• Customers often enjoyed pairing Beluga with other luxury items, such as caviar or cigars.

Beluga is a luxury item

• The volume of social mentions of Beluga compared to competitors Belvedere, Grey Goose and Ciroc was low. However, there is opportunity to gain new customers.

• Customers mentioned the brand with Russian activities or food.

• Americans have cultural stereotypes of Russians which Beluga could use to its advantage.*

Beluga Vodka is very much Russian

* See notes

Beluga has low international brand visibility

Understand

U.S. clubs frequently offer these brands as bottle service.* Belvedere and Grey Goose in particular, signify high status. However, there is also a negative perception due to this reputation.

Belvedere, Grey Goose & Ciroc are prestigiousU.S. consumer behaviour tends to drink vodka in mixed drinks, often with the intent to get drunk. This is in contrast to Russian consumer behaviour where drinking vodka straight is steeped in tradition and has its own etiquette.

Vodka is consumed in mixed drinks

* See notes

“We got a bottle of Beluga which was £££. However, I like to think of it as more economical because a cocktail in there was 24 francs, which is about 18 quid. So even though getting a bottle of vodka with sparklers on a) seems loads shelling out hundreds and b) makes you look like a Grey Goose Wanker, it probs is more economical. And i'm an accountant which means it must be true. Also, you can only get a table if you get a bottle, soz peasants having to stand.”

- http://bit.ly/1Q3zxej

UnderstandHow U.S. Customers Perceive, Consume Vodka

U.S. consumer behaviour tends to drink vodka because it doesn’t taste alcoholic. This behaviour contrasts with vodka aficionados who appreciate the characteristics of the base mash, aromatics and oils.

Good vodka has no taste

• U.S. vodka sales are declining as millennials’ tastes are shifting from vodka to whiskey.

• Vladimir Putin’s tax and minimum pricing regime has significantly impacted domestic Russian vodka revenue

• Quirky vodka flavours are declining due to “flavour fatigue”

Vodka is out, whiskey is in*

“Sales in the vodka category have cooled as flavors have gotten a little too wacky (think cotton candy and birthday cake as some of the more notable offenders).

Pernod Ricard may have learned a lesson from vodka’s flavor fatigue. Two of the French beverage giant’s best-known brands, Jameson whiskey and Absolut vodka, are getting new additions to their product lines, and for both, Pernod Ricard isn’t relying on flavors.”

- http://for.tn/1P51rJQ

* See notes

UnderstandVodka Global Market Trends

Analyze

AnalyzeCompetitive Landscape

Competitive position (returns compared to industry average)

Low High

Market attractiveness

(industry average returns above cost of capital)

High

Low

Competitive Analysis

Belvedere Ciroc Beluga Grey Goose

ILLUSTRATIVE

Analyze

Thomas considers himself a connoisseur of quality.

He currently enjoys drinking whiskey and Scotch. The trendsetter and taste master amongst his friends, Thomas’ deep knowledge of the different taste profiles gives him credibility and influence.

Background▪ Cares about quality and taste ▪ Stays up-to-date on reviews and

excellent tastes ▪ Demonstrates passion and deep

knowledge, which makes him an influencer among his friends

▪ Seeks the finest things and unique experiences

Goals and AttitudesThomas could become interested in vodka if he knew it had the depth of flavour and unique production process that Scotch has.

Opportunity

Matt

Thomas

Taste Maker

SocialiteMatt enjoys going to the club with his friends.

He drinks to get drunk. He is status-driven and has bought into the marketing from brands that promise prestige. He buys top shelf liquor because he believes the taste and potency are superior. He does not have a deep knowledge of vodka.

Background▪ Cares about status,

appearances, and perception ▪ Wants to get drunk and will pay

a premium to do so in style

Goals and AttitudesMatt would order Beluga vodka if he felt the prestige and recognition of the brand would provide superior taste and earn him credibility.

Opportunity

Beluga’s opportunity is to highlight its unique taste and its strength.

Target Market

Create

• American cultural stereotypes of Russians are that they love vodka, that President Vladimir Putin is an audacious man (and so are Russians), and that Moscow is (or was) a city of wealth and opulence.

• Beluga can capitalize on these stereotypes by crafting a narrative around how strong, bold and opulent its vodka and clientele is.

• The traditional consumption of vodka in Russia is served in special glasses, straight and chilled. Beluga should create special glassware in which to serve the vodka, similar to the glassware that accompanies Stella Artois. The glassware should be required to accompany the sale of a bottle at a club for bottle service.

Heritage-forward, authentic, strong

• Russian train station. Opulent.Inspiration board

• Vladimir Putin. Bold, strong.

• Russian’s love vodka. Experts.

• Russian vodka drinking tradition.

Personas to target• Matt

Russians Know Best

• Beluga prides itself on its unique production, formula and high quality ingredients. There is a growing market of consumers in America who appreciate these artisanal details in their food and drink. In order for Beluga to differentiate itself from its competitors, I suggest playing up the production and unique tasting notes.

• American tastes are turning to whiskey because it is perceived as having a greater depth of flavour. However, high-quality vodka can be enjoyed for its variety of different tasting notes as well. Beluga needs to launch an educational campaign paired with tastings and pairings to expand peoples awareness of vodka as a flavorful spirit.

• Create a culture around drinking vodka like a fine Scotch or wine.

Unique, engineered, artisanal

• Pappy Van Winkle. Craft.Inspiration board

• Tastings and pairings. Classy.

• Beluga is truly “made with pride.”

Personas to target• Thomas

• Russian vodka drinking etiquette.

Vodka Is The New Whiskey

Thank you!