BRANDING AND OWN LABEL

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Marketing and Brand management
MS50001E
Karen Kalantari

London
March 2014

Table of Contents
1

Introduction...................................................................................................................................3
1.1

Smirnoff.................................................................................................................................3

Branding........................................................................................................................................3
2.1

Smirnoff as a brand................................................................................................................3

Smirnoff and success....................................................................................................................4

Brand leveraging...........................................................................................................................4

4.1

Line extension........................................................................................................................4

4.2

Brand stretching.....................................................................................................................4

4.3

Brand extensions....................................................................................................................4

4.4

Co-branding...........................................................................................................................5

Own label competition..................................................................................................................5

5.1

Impact of own label...............................................................................................................5

References.....................................................................................................................................6

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1 Introduction
The purpose of this report is to analyse and evaluate the Smirnoff brand. This report
focuses on the branding concept, Smirnoffs success as a brand and the effects of own
label competitors.

1.1 Smirnoff
Smirnoff is a brand of vodka that originated from Russia over 100 years ago. Currently the
brand belongs to a British company Diageo who markets 38 different brands of spirits,
beers and wines. Its strategic brand Smirnoff vodka is sold in over 130 countries worldwide
and Smirnoff Red in UK alone exceeded sales over 351million in 2010, having a market
share of 18.5% (Mintel, 2011a) from a total vodka market of 2.27bn (Mintel, 2011b).

2 Branding
Branding is a way of distinctively identifying a product that is different from its competitors.
It is more than just a name that produces personalities about product attributes in
consumer's mind. Besides the name it may also include a design, term, symbol or any
other feature that represents a product or service. Buyers expect promises from
companies about the unchanged product attributes and quality. It also helps buyers to
distinct between similar products and builds loyalty by reducing risk. Being exposed to
brands makes them more familiar to us.

2.1 Smirnoff as a brand

Smirnoff as a brand has been on the market since 1934 (Diageo, 2014).
Brand name is vital for the identity of Smirnoff. It refers to its Russian origin and Russians
are known as vodka experts.
There is no distinctive difference in shape or design of the product but Smirnoff has a
recognisable red logo that encapsulates the values of Smirnoff and provides a reminder to
customers.
The brand is associated with night clubs and wild parties as it is heavily marketed as a part
of social night life. The advertising is giving the impression of a fun and adventurous
personality. Smirnoff mainly targets customers aged 21 to 34 (Centaur Communications,
2001) who are still active clubbers.

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3 Smirnoff and success

Smirnoff is the best-selling spirit in the world (Smith, 2013). Success can be measured
with key characteristics (Hollis, 2008):
Quality product continuous innovation, triple distilled, ten times filtered but still
rated average (Brodrecht, 2008).
Being first and unique positioning the only vodka available for 30 years outside
Soviet Union after WW II (Mind Advertising, 2014) and exceptional lifestyle
positioning (Parsons, 2009).
Strong communication exclusive advertising and publicity are backed by clear
branding messages.
Time and consistency produced for decades and maintaining the quality of
product. Smirnoff vodka is in maturity stage in its product life cycle.
According to Mintel (2011c) Smirnoff is the most trusted (50%) brand in spirits market. It is
easily recognised; most experienced (75%); has a high recommendation score with brand
index and associated with fun and vibrant personality. In 2008 Smirnoff brand ranked 89
globally and valued at 2,2bn (Bloomberg, 2008).
There is a fierce competition on the vodka market. Dozens of different brands can be
found in supermarkets. Smirnoff distributes vodka worldwide and can be found in almost
every shop, bar and club. Aldi is an exception who focuses only on its own brands to keep
the prices low.
On the other hand, Smirnoff faces many ethical issues, advertising alcohol is highly
regulated and exessive use may cause unwanted consequences. Also the customers have
to pay a small premium because all the marketing needs funding. This premium is also
keeping up the brands equity.

4 Brand leveraging
4.1 Line extension
Besides the most popular Smirnoff Red there are different variations available: Blue, Black,
Blueberry, Lime, Green Apple, Vanilla and many others, giving variety for customers and
covering the areas competitors are heading.

4.2 Brand stretching

Smirnoff has not stretched its products downward, probably in fear of losing customers
due to quality perception. However, Smirnoff Gold is positioned as a premium product
(Mintel, 2014).

4.3 Brand extensions

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Smirnoff produces only alcoholic drinks and no ad hoc extensions can be found. In order
to compete with Bacardi Breezer, in 1999 Smirnoff started manufacturing a selection of
ready-to-drink cocktails like Smirnoff Ice (Solley, 2005). Smirnoff Ice and other beverages
are an alternative for beer category. There are 9 different RTD products produced but
nearly 100 recipes are available online that could be sold as vodka cocktails in shops.

4.4 Co-branding
Even though Madonna has been featured in Smirnoff Nightlife Exchange Project and
celebrities like Amber Rose and Pharrell Williams have done commercials with Smirnoff
(Djuric, 2011; Wong, 2011), the only brand Smirnoff has ever been advertised together is
Red Bull energy drink. This was not done by Diageo but night club party promoters.
However, there is no product on the shelf that has both brands combined as one product.
This is an area where Smirnoff could improve itself and leverage the brand even further.
Perhaps a limited edition wooden crafted gift baskets with Smirnoff, Monster energy drink
and O2 concert tickets.

5 Own label competition

Own label products are carrying the name of the retailer rather that the manufacturer. In
pursuit for a higher margin retailers are marketing their own label products that are
manufactured elsewhere. This gives the customer a wider choice and price difference.

5.1 Impact of own label

Tesco and Asda locate their products in the same area as branded vodkas. They are
priced cheaper but do not necessarily mean lower quality. Nowadays the technology of
producing spirits is standardised and triple-distillation technique is used on all production.
Targeting same customers opposes risk to brands. It comes down to taste and preference
when choosing either Smirnoff or an own label vodka.
Asda
18.0 15.1
0 7
Smirn
Asda
of
vodka

Table 1.

Tesco
21.30 15.5
0
Smirn
Tesco
of
Imperi
al

Morrisons
15.00 15.49
*
Smirn
Morriso
of
ns
Imperial

Sainsbury
20.50 16.00
Smirn
of

Sainsbu
rys
vodka

Supermarkets own label prices with comparison to Smirnoff Red 1L in March 2014. *On promotion, otherwise 21.00

Smirnoff always has a promotion in one or two of the top supermarkets in UK and often
this is made by the retailer. Big supermarkets advertise special offers on Smirnoff to invite
potential buyers but actually undercut them with price to win customers. Tesco Imperial,
Morrisons Triple Distilled Imperial, Sainsburys and Asda vodka all have red labels and red
cap and somewhat mimic Smirnoff.
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Smirnoff and other brands are investing heavily in promotion and shelf space to protect
their market share and brand. Own label vodkas produced 760million in 2010 (Mintel,
2010). Supermarkets are dominating the grocery market in UK.

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6 References
Bloomberg (2011) The 100 Top Brands. Bloomberg Businessweek. Available at:
http://images.businessweek.com/ss/08/09/0918_best_brands/90.htm [Accessed 18 March 2014].
Bouckley, B. (2011) Smaller food brands face increased own-label threat. Available at:
http://www.foodmanufacture.co.uk/Business-News/Smaller-food-brands-face-increased-own-label-threat
[Accessed 18 March 2014].
Brassington, F and Pettitt, S. (2005) Essentials of marketing. Harlow: Pearson Education Limited.
Brodrecht, R. (2008) Smirnoff. VodkaBuzz. Available at: http://vodkabuzz.com/vodkas/smirnoff [Accessed 20
March 2014].
Centaur Communications (2001) Smirnoff Ad campaign. Marketing Week, p.9. Retrieved from
http://ezproxy.uwl.ac.uk/login?url=http://search.proquest.com/docview/228095424?accountid=14769
[Accessed 17 March 2014].
Davis, J. (2010) Competitive success: how branding adds value. N.J : Wiley.
Davis, M. (2009) The Fundamentals of Branding. Singapore: Ava Publishing.
Diageo (2014) Vodka. Available at: http://www.diageo.com/enrow/ourbrands/categories/spirits/Pages/Vodka.aspx [Accessed 17 March 2014].
Djuric, A. (2011) Smirnoff ad with Pharrell Williams. Branding Magazine. Available at:
http://www.brandingmagazine.com/2011/08/28/smirnoff-ad-with-pharrell-williams [Accessed 17 March
2014].
Hollis, N. (2008) The global brand. US: Palgrave Macmillian.
Mind Advertising Ltd (2014) Smirnoff Vodka: Brand Profile. Available at:
http://www.adbrands.net/uk/smirnoff_uk.htm [Accessed 19 March 2014].
Mintel (2010) Sales of own-label spirits take a big hit. Retrieved from
http://academic.mintel.com/sinatra/oxygen_academic/display/id=553989 [Accessed 17 March 2014].
Mintel (2011a) White Spirits and RTDs - UK - March 2011. Retrieved from
http://academic.mintel.com/display/569851 [Accessed 17 March 2014].
Mintel (2011b) White Spirits and RTDs - UK - March 2011. Retrieved from
http://academic.mintel.com/display/569850 [Accessed 17 March 2014].
Mintel (2011c) White Spirits and RTDs - UK - March 2011. Retrieved from
http://academic.mintel.com/display/569853 [Accessed 17 March 2014].
Mintel (2014) Alcoholic Drink Packaging Trends - UK - February 2014. Retrieved from
http://academic.mintel.com/display/696261 [Accessed 17 March 2014].
Mullen, K. (2011) Amber Rose In Smirnoff Vodka Commercial. The Huffington Post. Available at:
http://www.huffingtonpost.com/2011/11/14/amber-rose-smirnoff-vodka-commercial_n_1093574.html
[Accessed 17 March 2014].
Palmer, A. (2009) Introduction to marketing. Theory and practice. 2nd Edition. Oxford: Oxford University
Press.
Parsons, R. (2009) Smirnoff to launch new global positioning. MarketingWeek. Available at:
http://www.marketingweek.co.uk/smirnoff-to-launch-new-global-positioning/3001869.article [Accessed 20
March 2014].

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Smith, H. (2013) Smirnoff tops top ten vodka brands. Drinks International. Available at:
http://www.drinksint.com/news/fullstory.php/aid/4022/Smirnoff_tops_top_ten_vodka_brands.html
[Accessed 18 March 2014].
Solley, S. (2005) Smirnoff Ice. Marketing, p.22. Retrieved from
http://search.proquest.com.ezproxy.uwl.ac.uk/docview/214961562 [Accessed 17 March 2014].
Wong, C.M. (2011) Madonna At Smirnoff Nightlife Exchange Project: Pop Diva Picks New Dancer At
Roseland Ballroom. The Huffington Post. Available at:
http://www.huffingtonpost.com/2011/11/13/madonna-smirnoff-nightlife-exchange-roseland-ballroom_n_1091682.html [Accessed 17 March 2014].

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