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    Market structure of Absolute vodka in Nepal

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    Market structure of Absolute vodka in Nepal


    Market structure of Absolute vodka in Nepal 

    Executive summary

    Absolut a company opens their business from Sweden in the year of 1879 and later they planned to spread their business globally and now the status hit almost 126 countries across the globe. Presently they focus to hit the market of few developing countries as well so they have chosen Nepal as their next market to go with a fast strategy with proper plan for that the SWOT and Marketing Mix is needed as per the nation mentioned and the product. Everything is mentioned in the bottom part with briefs discussion about the total subjects. Not only that even the company background also mentioned with their orthodox strategies and in the last the recommendations also mentioned what is majorly required for growing their business in the market of Nepal.

    Background to the company/product

    In 1879, Absolute was founded by Lars Olsson smith. It is produced in Sweden at Ahus. Before absolute vodka was launched, the market was controlled Stockholm’s liquor. After the foundation of absolute vodka, Smith challenged Stockholm’s liquor and its marketing monopoly (Okada, 2017). Absolute vodka was sold at comparatively lower price out of the city border. Absolute vodka was sold at a lower price than the monopoly product. Smith had a good strategy for promoting his product. He offered free boat riding to distillery and rent brannvin. This changed the fortune of smith and he established himself in the business chain. After the monopolization of the country alcohol by the Swedish government, at that time the vodka was sold nationally in different name. It was named as absolute rent brannvin at that time. In 1979, absolute vodka was introduced with a higher price to the global market (Bukhari, 2016). After it was marketed globally, the sell of vodka increased and it was sold 90 million litres annually in 2008. The vodka is made of wheat rather of winter wheat. Annually, 80,000 metric tons of wheat are used to produce absolute vodka. There is a ratio of using the wheat and grain in absolute vodka. In every one litre of vodka, there is a use of 1 kilogram of grain that means one bottle of absolute vodka contains one kilogram of grain.

    Situation analysis

    Political analysis:According to the law of Nepal, there are several ethics that the business organization should follow.There is a total ban of advertisements for any type of alcohol products. No promotions even the sponsorships also cannot be done by the alcohol brand. 

    Economic analysis:Though there are various economic challenges, externally and internally, still Nepal has managed to maintain the macroeconomic stability through the monetary and the fiscal policies.This is resulting in the slow structural transformation (Wang & Spence, 2015). the fiscal performance is stable and the budget deficit is low though they are facing some challenges related to the increasing subsides, recurrent expenditure etc. The revenue mobilization is relatively strong though there is a challenging field in political environment. 

    Socio-cultural analysis:Beside agriculture, Nepal is fully dependent on the tourism. There are more tourism developments and destinations than the industrial business. Therefore hotel chains, restaurants, tourist markets are seen more than industries. This means there are more business on guides, hotel business, foods, and other related works. 

    Technological analysis:However, when discussed about the technology of Nepal, then it can be said that Nepal is a late starter or late comer in modern technology and the science (Haffner, 2015).  It developed its technological prospects in limited fields such as civil engineering, architecture, agriculture, medicine, textile, water management, paper manufacturer, food technology, and dyeing. 

    Environmental and legal:Air and water are the most significant problems that can be seen in Nepal. The reforestation of Nepal done is minimal. Nepal mainly suffer the effects of deforestation, erosion, agricultural encroachment etc. now, talking about the legal causes, there are patent rights, some application for acquiring right over the patent, some circumstances in which the patents cannot be registered, some terms are there that will give an impact on the business establishment (Kuan, 2018). The absolute vodka has to focus on these legal rights in order to establish the business in Nepal. 

    Now, if the micro environmental factors are explained in details then it includes the competitors, suppliers, distributers, customers, publics, and the company. The competitors are the other business partners or houses who are competing with absolute alcohol in the same field. Then suppliers are those who are supplying the wheat and the grains and other ingredients that are mainly the raw materials that are needed to manufacture alcohol (Vannini& Williams, 2016). The distributers are those who are distributing the bottles of the absolute alcohol in the shops in the market places. Now, coming to the customers, who are buying the alcohol from the shops, consuming it and buying it. Publics are the mass who belong to the locality and the company is the manufacturer house who is the resource of the absolute alcohol.

    SWOT analysis

    Now, discussing about the strength, the absolute alcohol has a good review in the whole market and has a good competition field where absolute alcohol is giving a tight competition to its competitors. If talking about the weakness, though the external power of the company is strong enough to compete with the other organizations in the same field, but comparing to the internal power, absolute alcohol is relatively week in respect of the other companies. This can be a weak point of the company and can create a huge problem in future market. Opportunities of the absolute alcohol are well established as they have a good survey on political, economic, socio cultural, technological, environmental and legal fields. It is very mandatory to have a good knowledge about the market of the area where the company is trying to make a field and trying to capture it (De, 2018). Some micro environmental factors like suppliers, distributors should have a good business relation with the company. They should represent them in such a way with the price and quality that the consumer can be satisfied with its product. Lastly, coming to the threats, as it is known, all the positive impacts have a negative side. The vodka company has rivals in the same fields. They can also raise some problems in the future market of the absolute vodka.

    Target market and positioning

    Every company has to target a certain group to establish themselves in the market. Absolut vodka has a good market in the places where it is cold in the whole year. The Absolut vodka basically targeting the teenagers and the middle aged person (Moreyet al., 2017 ). Among 15 to approximately 45 or 50 years aged person are the main target group of Absolut alcohol. These are consumed just as a purpose of enjoyment, entertainment. People who love to go out with their friends, families and the special loved ones love to consume this Absolut vodka or prefer this brand more than other brand (Hanssens, Wang & Zhang, 2016). Though rising of health issue, climate condition, drinking habits, consciousness towards health are some threat towards the company. Absolute vodka is considered as the premium brand.

    The target consumer thinks that this brand is a premium brand. According to the demographical thinking, it is sophisticated, showy element, stylish towards the consumers. It is a witty brand, which is of superior quality, with stylish as well as unexpected position in the market. The word “absolut” has a fanciful target audience and they think they have a perfect or rather “absolute” world. It is primarily made for urbanites and most of the people use it as their main brand. They belonging with this kind value their orientation. It has a psychological thinking that it is considered as vodka of superior taste, price and quality and having different design. It comes under premium vodka segment.  According to the behavioral thinking, they use their brand name by removing the word vodka and printwith colors that refer to the flavors or the aroma. It is simple but very sophisticated. According to customer review, they spend less money to experience the best they can ever have.

    Marketing mix analysis

    The brand is absolute Vodka, which is founded in the year of 1879 and now it is a symbol of status throughout the globe. Actually, it hits almost 126 country’s market with full of their brand value and all. The taste and the standard is enough maintained as per the market demand. Now it is focusing the market of Nepal for a better flourishment (Tuten& Solomon, 2017). Although it is already an established company but still looking for the growth in some developing country as well, so they have chosen the market of Nepal and as the matter is quite clear that the marketing mix part is must be highlighted and under focus by the in-house policies before taking any step based on any nation as per the brand value of their product.

     Product 

    There are so many other companies in the market as per the brand and the product concerned especially as pert the market of Nepal it is hard to grab the market of that particular place where the domestic alcohol also treated as an tradition by the country men. Still the mentioned product brings the pleasure in giving the assurance for an unique experience for the entire customer for the particular product (Baryshnikova, 2017). The extended range of the same product includes Vodka made out of apple, grapes, cherries and some other flavours as well and as a proof of the of being versatile brand Absolute Vodka stands there with full of their value.

    Recommendations

    As per the market concerned of Nepal there are so many things what the particular company has to keep in their mind for their marketing strategy to grow their business in the market of Nepal.The norms of the nation is actually against of the promotion of any alcohol related product but in the other side the domestic alcohol product from the particular nation is in a high popularity to the countrymen, so few thing they have to maintain while the company is about to promote an alcohol product to a nation like Nepal.

    a Market survey is needed from angle to angle

    b Legal part should be in the file of the company

    c Sales part must reach the total area of entertainment and the core market

    d Must attract the eye of tourist

    e Brand quality and cost must be there in a balanced way

    Conclusion

    From the above descriptive discussion, this can be concluded that when evaluating market structure, the mentioned aspects are very much important to consider for the better effective approaches in terms of organizational achievements. According to present contexts, Absolut Vodka is trying to make business in Nepal, where they can have a successful market position by maintaining some essential necessities. In visitor’s view, Nepal is a well place to attract eyes. By this aspect, they can have more customers. By making some good advertisements, they can have more customer engagements for their products. As per this present context, the presentation of 7P’s analysis is having an additional important role in this report. Apart from that, the assessment has the recommending aspects that are effective for Absolut Vodka in order to their betterment regarding their organizational growth in Nepal. However, the present report is profitable whether there is the need of providing awareness about Market Structure.

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