Absolut Vodka Brand Positioning

Absolut Vodka Brand Positioning Absolut Vodka is one of the worlds selling premium spirits brands and achieved sales of 10.7 million nine-liter cases in 2007. Every bottle of Absolut Vodka is produced in Ahus, southern Sweden. Although the brand is the largest premium vodka selling in 126 countries, its market share is threatened by the constant growth of Bacardi and Smirnoff. In the turbulent environment Absolut Vodka facing nowadays, the organization needs to constantly search for ways to innovate and to meet the changing customer demands in order to maintain or strengthen the position of their products. Absolut Vodka, one of the most popular super-premium brands in the world, is the strongest brand for VS Spirits. Now, the company seeks to maximize its brands market share through constant innovation and adopting new marketing and distribution strategies. 2. Product Every bottle of Absolut Vodka is produced in Ahus, in southern Sweden where the wheat that gives Absolut Vodka its smooth grain character grows. Absolut Vodka is produced from winter wheat, a hardy wheat grain that centuries of experience have shown to produce superior vodka. Absolut Vodka uses a process called continuous distillation, introduced in Sweden in 1879 by The Vodka King Lars Olsson Smith (Pernod Ricard, 2009). The water it uses comes from our own deep well. Producing its vodka in one location using local raw materials gives VS Absolut Spirits complete control of all stages of production and ensures that every drop meets the companys high quality standard. Unlike other vodkas, the Absolut Vodka flavors are made by blending the vodka with only natural flavors and no sugar is added. In fact, Absolut is as pure as vodka can be. Still, that purity has a certain taste; rich, full-bodied and complex, yet smooth and mellow with a distinct character of grain, followed by a hint of dried fruit (2009). Absolut Vodka currently comprises its products within many flavors, such as vanilia, raspberri, apeach, ruby red, pears, and mango. All Absolut Vodka products can also be enjoyed neat or mixed in drinks. In addition, the shape of the Absolut Vodka bottle has made it one of the worlds most iconic products reinforces the brands strong design heritage. The bottle shape of the Absolut Vodka bottle has made it one of the worlds most iconic products reinforces the brands strong design heritage. It looked elegant, different, simple and very Swedish, and was decided that there should be no label not to hide the crystal clear liquid. Blue was decided upon as the most visible and elegant color for the Absolut Vodka logo. The flavor comes in a transparent bottle in order to show how pure and clear its vodka is. The brand values of Absolut are defined as Clarity, Simplicity and Perfection. All three are there, visible on the bottle. Absolut Vodka currently comprises the following products within the same quality framework: Year Product 1979 Absolut Vodka 1986 Absolut Pepper 1988 Absolut Citron 1992 Absolut Kurant 1999 Absolut Mandrin 2003 Absolut Vanilla 2004 Absolut Raspberri 2005 Absolut Apeach 2006 Absolut Ruby Red 2007 Absolut Pears, Absolut 100, Absolut Mango 2008 Absolut Los Angeles 2009 Absolut Boston 2010 Absolut Berri Acai, Absolut Brooklyn, 2011 Absolut Wild Tea, Absolut San Francisco Source: http://en.wikipedia.org/wiki/Absolut_Vodka Creativity is what drives Absolut brand forward. That applies not only to the marketing and design, but also to the product development. When launching a flavour, the Absolut Company wants to make room for new cocktail experiences. 3. Brand Positioning Absolut Vodka is positioned as premium brand in the minds of the target consumers. The price of the product is high. Absolut is one of the expensive brands among the leading brands in the U.S. as illustrated in Exhibit 4. The company also tried to feature the product as a high end product. For example, Absolut had an identity campaign termed Smart, showy, sassy, sophisticated and stylish. By this kind of brand personality statement, the brand was associated with the fashion conscious, rich, desperate and dynamic lifestyle-namely the Absolut Lifestyle. Absolut entered Glamour world and tried to relate the brand with fashion world. In the Lifestyle magazines, the glimpse of a trendy tanned fashionable girl posing and wearing Absolut Vodka marked attire became widely visible. The brand personality of Absolut was communicated successfully with the help of a series of aesthetically designed advertisement campaigns both in print and in electronic media. The word Absolut was punned in conjunction with creative images of the bottle and with strong positive feeling awakening words or phrases. Absolut went for simple, but sophisticated ads a classy picture of the bottle accompanied by a witty caption (Facts Abusolut Ads, 2009). Those advertisements have not only broken advertising records year after year but also have captured the eyeball alongside the imagination of the general public. The advertisement campaigns were nice to look at, easy to understand yet had the spark of intelligence and smartness. The modes featuring in the advertisement had a tanned skin most of the times thus the brand tried to relate itself with a sense of sunny, urban and dynamic lifestyle. The brand was more inclined to lay emphasis on girls. Because vodka is an odorless drink and do esnt give any quirky sensation while drinking, this was assumed that girls would love this kind of product features. Absolut Vodka soon became news. The latest ads often started getting journalistic coverage in magazines and on TV. Everybody talked about Absolut campaigns be it the Absolut Manhattan ad portraying an aerial view of New Yorks Central Park in the shape of an Absolut Vodka bottle or 26 Russian painters creating their own most personal impressions of the bottle. Over the years Absolut has commissioned not only over 300 painters, but also leading artists in all fields like sculptors, glass designers, musicians and fashion designers. The main strategy of the brand was to avoid relating the product with only one particular lifestyle and the ads were to have a timeless but contemporary theme. Absolut Vodka can be proud of its ads in crossing the line between advertising and art using different medians such as paintings, limited edition bottles, shirts, and sculpture (Brand Spotlight: Absolut Vodka, 2010). Many famous artists worked for the company, including Andy Warhol and Keith Harris. TBWAs branding campaign for Absolut Vodka was listed as one of the top ten campaigns of the last century by Advertising Age and the campaign won many awards including an Effie and Kelly awards which are probably the most prestigious awards in the advertising industry (2010). Those highly accepted and widely popular advertisements campaigns could successfully del iver the main brand positioning ideas of Absolut Vodka, i.e. premium product, high quality and association with art and a good life. 4. Competitors and their Campaigns In addition to Absolut Vodka, there are over other 30 vodka brands in the U.S. market as shown in Exhibit 2. Those brands are original from nine countries such as Belgium, Britain, Denmark, France, Finland, the Netherlands, Poland, Russia (Latvia and Estonia), and Sweden. Apart from American made brands existing in the market such as Popov, Gordon, etc. there was the emergence of new American made vodka brands in the past several year such as Skyy, a lovely San Francisco spirit, the newly arrived Teton Glacier, unique vodka made in Idaho, etc (Department of Liquor Control, 2009). In 2007, there were seven leading vodka brand in the U.S. market including Smirnoff, Absolut, Grey Goose, Skyy, Stolichnaya, Ketel One, and Svedka respectively as shown in Exhibit 3. These brands are made in different countries. However, the American made brand like Smirnoff was ranked the number one U.S. market share in 2007, followed by Absolut Vokda. A brief profile of five leading brands that were Absoluts competitors and their campaigns in 2007 will be discussed in next session. 4.1 Smirnoff Smirnoff is the #1 selling vodka in the U.S and the world. It had a 17.2% share in 2007. It is originally produced in Russia, the recipe found its way to America in the early 1900s. Smirnoff is one of alcohol brands of Diageo (Dee-AH-Gee-O), the worlds leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines, and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, JB, Baileys, Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines. In November, 2006, Smirnoff renewed its alliance with James Bond in the film Casino Royale. The alliance involved a multi-million dollar media campaign, which was activated in the U.S. and around the world. The campaign included a broadcast advertising campaign; on- and off-premise promotions and sweepstakes; a global public relations campaign; and a fully interactive Casino Royale microsite (Zydel, 2006). Smirnoff had the close partnership with Bond in 1962à ¢Ã¢â€š ¬Ã‚ ²s Dr. No. In a scene when the villain hands Sean Connery a Martini, shaken not stirred made with Smirnoff Vodka. This monumental moment in film made some impact on the way martini drinkers made their cocktails, shifting from the traditional gin to a vodka-based drink and popularizing the vodka martini the world over (2006). Exhibit 5 shows a cross-promotional ad for James Bond Casino Royale and Smirnoff Vodka and some scenes in James Bonds movie in 1962s. In August, 2007, Smirnoff launched its largest ever marketing campaign ( £5M) which was named Sea to promote the brand. It centers around a 60-second commercial created by JWT, which premiered on 17 August 2007 in showings of The Bourne Ultimatum at selected cinemas across the United Kingdom. There were various tie-ins launched, including the Smirnoff Purifier, an online game, point of sale Smirnoff purity kits, and a tour of a custom-built Smirnoff Purification Installation used to make drinkable samples of water taken from saline or otherwise undrinkable water at selected sites (Sea: Advertisement, 2010). 4.2 Grey Goose Grey Goose was imported to the United States by the Sidney Frank Importing Company which is located in New Rochelle New York. In 1997, the brand became national prominence when it was awarded substantially for its quality in the U.S. In 2004, Sidney Frank then sold the right of manufacturing to Bacardi. Grey Goose was the first prominent French vodka but has seen some competition from Nuage, Ciroc and Idol which are now on the market. Each of these vodka brands are premium brands sold in North America (Grey Goose Vodka, 2007). In 2007, it held a 6.3% share of the U.S. Market. In 2007, claiming itself to be the Worlds Best Tasting Vodka, Grey Goose launched its new Discerning Taste advertising campaign which was produced by New York-based @radical.media. The campaign was the brands first major advertising effort since its acquisition by Bacardi Limited in 2004. It consisted of four different print advertisements and three broadcast spots. Creative elements of the campaign capture particular moments, people, places, and events in the lives of Grey Goose consumers revealing their unyielding lifestyle of discerning taste. The theme of the advertising platform supports the brands commitment to represent more than just a spirit, but a luxurious lifestyle brand. The print composites reveals the back stories of Grey Goose drinkers by portraying images ranging from playing golf to a spontaneous late night dinner with friends. These snapshot moments suggest that a Grey Goose drinkers inherent eye for detail leads them to seek refined subtleties in more than just th eir vodka but in all aspects of life (Grey Goose Vodka 2007 Advertising Campaign, 2007). The advertising campaign commenced in conjunction with the U.S. Open Tennis Championships in which Grey Goose was the Proud Promotional Partner of the tournament. The advertisements surrounded broadcast coverage on the USA Network and appeared on target outlets such as the Golf Channel, ESPN, and HD Networks and in print outlets such as BlackBook, Departures, GQ, Golf Digest, Travel + Leisure, Vanity Fair and Wine Spectator (Grey Goose Vodka 2007 Advertising Campaign, 2007). 4.3 SKYY SKYY is one of the fastest growing spirits globally and the leading domestic super premium vodka in the United States (Baker Hearn, 2005). The brand was launched in 1992 by Skyy Spirits, LLC who is the US-based wholly owned subsidiary of Gruppo Campari (Milan: CPR.MI) and the definitive marketer and distributor of super-premium and luxury spirits brands in North America. It had 4.6% U.S. share. Skyy vodkas highest quality and ultimate smoothness are perceived by consumers due to the state-of-the-art process of quadruple distillation and triple filtration (2005). According to the good design of its distinctive cobalt blue bottle and award-winning marketing communications, SKYY is synonymous with quality, sophistication, and style (2005). SKYY Vodka let the worlds most accomplished and controversial photographers interpret the brands sexy image in bold and daring fashion (Press Release: Skyy Spirits Unveils Sexiest Ad Campaign in Skyy  ® Vodka History, 2010). In 2007, SKYY looked to acclaimed photographer and independent filmmaker David LaChapelle to shoot the powerful, tantalizing images that captured the essence of cocktail glamour and the jet set lifestyle which would constitute its third campaign. The national campaign was named Cocktail Moments and was available for national outdoor, print, and online. Exhibit 6 shows some ads for this campaign. The creative was launched outdoors beginning January 2007 in LA, Chicago, Miami and San Francisco (2010). Magazine insertions start in February of 2007 in men and womens entertainment and lifestyle publications, including ESPN, InStyle, US Weekly and People, as well as on www.SKYY.com. The ads also ran as banner ads on selected websites including ESPN.com, Evite.com, an d Gay.com, starting in mid-February. Due to its bold, sexy imagery, SKYYs ads have become collectible pieces of artwork (2010). 4.4 Stolichnaya Stolichnaya has its origins in the Moscow State Wine Warehouse No. 1 which was opened in 1901 by the authorities to ensure higher quality vodka production (Stolichnaya, 2010). It was the first vodka to be introduced and imported into the USA, in 1972. Stolichnaya was at this time a good choice to the USA-produced vodka brands as it tasted milder due to a more refined distilling process (2010). However, Stolichnayas popularity has been dependent on the political climate between the U.S. and the former USSR. In 2005, Stolichnaya was included in the Pernod Ricard portfolio. Pierre Pringuet, Managing Director of Pernod Ricard said We needed a major vodka to boost and balance our product range. Stolichnaya signalled our first step in the vodka market and we are proud of our achievements in developing this fine brand. But with ABSOLUT, we have now made a giant leap forward! (Pernod Ricard, 2008). Since 2005, sales of Stolichnaya grew up from 2.1 million to 3.4 million cases and it had a 4.2% share. In 2007, the brand received several awards including Best New Product in the U.S. and Best New Event in the UK. Additionally, its benchmark Ultra Premium Stolichnaya Elit also got the highest rating by the U.S. Beverage Tasting Institute (2008). While renovating the brand, Pernod Ricard launched a new advertising campaign for the Stoli family in order to remind consumers to Choose Authenticity on April 9, 2007 (Pernod Ricard USA, LLC., 2007). Exhibit 7 presents ads of this campaign. The campaign debuted in leading U.S. magazines as In Style, Rolling Stone, and GQ in May, 2007. The new campaign was in a visual style and based on a Russian artistic movement called constructivism, that celebrated the strong industrial structures of the early 20th century when there was the creation of Stolichnaya (2007). The campaign depicted positive Russian icons in a proud tone and humorous way. One of the first ad executions headlines was The Mother of all Vodkas, from the Motherland of Vodka. The new campaign was developed according to two findings of research that: first, that the remarkable history of Stoli hadnt been fully told; and second, that authenticity was a critical consideration in the purchasing decisions of sophisticated, young adult consumers at that time (2007). Patrick Piana, Senior Vice President, Marketing, Pernod Ricard USA said: Pernod Ricard has consistently demonstrated its ability to drive brands to achieve their potential, and we are confident that this new Stolichnaya campaign will resonate with the brands core consumers and build on our overall track record of success(2007). However, after the purchase of Absolut was completed, Pernod Ricard ended its agreement with Stoli. William Grant Sons USA signed an agreement to distribute Stolichnaya in the U.S. in 2009. 5. Consumer Behavior The comprehensive analysis of vodka by the Beverage Information Group and research by Simmons Market Research Bureau reveal consumer behavior of vodka as follows: Vodka is unlike any other spirit category. The proportion between male vodka consumers and female consumers are fairly equal. Furthermore, it is consumed by all adult age groups (Simmons Market Research Bureau, 2007). Due to universal appeal of vodka coupled with its versatility as a mixer and the cachet high end products, it has continued to attract adult consumers (Beverage Information Group, 2008). Females favor flavored vodkas while males take the lead among several brands-Absolut Kurant, Stoli Citros, Stoli Ohranj and Stoli Cranberi (Simmons Market Research Bureau, 2007). According to Simmons (2007), the older the brand the older the consumer. Stolichnaya drinkers tend to be older than Absolut drinkers. Also, Absolut drinkers tend to be slightly older than Grey Goose consumers. Belvedere scores highest in the 21-to-24 age group among unflavored vodkas. Younger adult consumers tend to be attracted by somewhat sweet flavors-vanilla and raspberry. Whereas older consumers prefer classic cocktails that are savory in nature (Beverage Information Group, 2008). All vodka consumers are moving toward a healthier lifestyle and a greener planet. (Beverage Information Group, 2008). It was found that several marketers are incorporating natural and green elements in their products. This is a trend that is expected to continue (Beverage Information Group, 2008).. Limited edition products that benefit local causes such as Absolut New Orleans and Absolut Los Angeles are another trend that is expected to gain a following (Beverage Information Group, 2008).. Overall, consumers are moving away from sweet cocktails into the savory area. This may not bode well for several flavored vodkas (Beverage Information Group, 2008). Review of publications about vodka brands uncovers that there are some significant factors that enhance customer decision making process when buying vodka as follows: Luxury: By definition, vodka is a clear, tasteless, odourless liquid-meaning that a basic level of quality distilling yields vodka on par with any other. Yet through clever ads and higher pricing, Absolut vodka became the premium vodka over Smirnoff in the 1980s. Then, i n the 1990s, Sidney Frank consciously decided to introduce Grey Goose vodka, which costs 50 percent more than Absolut, with reasoning that people would pay more for a brand they saw as more exclusive, just as they did with Absolut over Smirnoff. Since vodka is one of premium alcoholic drinks, it is considered a kind of luxury items (Rothbaum, 2009). Flavors: Several companies keep introducing more varieties for customers to choose from, this strategy has proven to be quite successful. Also, the U.S. is the worlds biggest market for flavored vodka and a new flavour can drive sales. For example, in the summer of 2007, Finlandia introduced grapefruit flavored vodka. The vodkas popularity has been so great that it has increased the brands overall sales of flavored vodkas by almost 10% (2009). Thus, there are still room for competition in the vodka category. Store shelves are now packed with new flavours and brand extensions from numerous well-established brands (2009). Price: Setting an inviting price to attract consumers seems to be successful for some brand vodkas like Smirnoff. For example, Smirnoff posted a 4.0% gain in 2008 and making it the top-selling spirit in the U.S., leveraging its rainbow of flavors as well as its inviting price (2009). This pricing strategy must be employed carefully for luxury goods like vodka, since consumers still perceive that Vodka should not be cheap. It is not a product of first necessity. Even though higher-priced brands are seeing slower growth, consumers are still spending a lot of money to purchase these prestigious brands. Reference Group: Vodka consumers use reference groups such as co-workers, friends, and family as a guide to select a brand, since vodka is a product that can be shared in social occasions and consumers tend to please all of those groups when they gather. Thus, group situations constitute their purchase decisions. Packaging: Packaging has always played an important role in developing brand image, and the vodka industry is not exceptional. According to Adam Rosen, the brand manager of Wyborowa Vodka, the vodka industry is much more image conscious than other liquors (Labbrand Consulting Co., Ltd., 2009). In addition to ingredients and taste, packing is another factor influencing vodka drinkers buying decision- the vodka they choose should make a statement to others. Thus, the bottle design should display sophistication and class. For example, Svedkas new bottle reflects their cheap chic positioning, allowing consumers to purchase a premium vodka at a competitive price (2009). This should appeal to hip night life lovers, but not older customers accustomed to having a casual drink at home. It was found that the older audience will appreciate a classic bottle design that looks nice in their alcohol cabinet (2009). As Svedka hasnt redesigned their bottle for over 10 years, the repeat customers like ly have a strong connection to the old brand image (2009). In short, packing can influence decisions made through constructive process at the time of purchase. 6. History of Brand Advertising Absolut Vodka has become famous mainly due to its advertising campaigns. The shape of the bottle of Absolut vodka is very unique and is emphasized in all their advertisements. For about 25 years, the focus on the product has been the main theme in advertisements for Absolut Vodka. They ran campaigns of humor featuring their unique bottle. It is the unique advertising campaigns that have made Absolut a popular brand going up to the heights of Coke and Nike. In 1981 they started the Absolut ________ campaign. Absolut Perfection which was created in 1981 was the first advertisement and it is still popular today. They had clever concepts like Absolut L.A. which showed a swimming pool shaped like a bottle or Absolut Warhol which showed the painting of a bottle by the artist. One of their popular ads is the Absolut London', which shows the door of 10 Downing Street resembling an Absolut bottle. In a 1988 feature of a playboy magazine they showed a bottle like a model and this ad was called Absolut Centerfold. Then there were issues Absolut Disco (2007) related to dance music in 2008 Absolut Masquerade under the theme Every night is a masquerade and in 2009 the Absolut Rock Edition as a tribute to rock and roll. They wanted to end this campaign in 1997 with the launch of an offbeat bottle campaign on April fools day and it was very popular. But it took 9 more years to come up with a different campaign due to its limited advertising budget. Th e Absolut ____ campaign enabled the brand to become the best-selling imported vodka in the United States as sales rose from 20,000 cases in 1981 to almost 5 million in 2007. In January 2006 they started a campaign called The Absolut Vodka which had a theme on the pun between the brand name and the word absolute. This multimedia campaign demonstrates the headship of Absolut Vodka as The Absolut Vodka and observes other classics that are absolutes in our culture. This campaign is an evolution of the brands iconic, 25-year-old advertising and one that underscores the brands marketing ingenuity and continuous creativity. This campaign was broadcasted on television in the United States. The campaign also featured online and print executions. The new execution was built on the brands existing campaigns. The broadcast depicts a collage of absolute moments and icons that bases modern culture. Pictures include The Absolut Morale Booster (Marilyn Monroe singing for U.S. troops) and The Absolut Road Trip (first manned trip to the moon). The print advertisement features an Absolut Vodka bottle levitating over a color-block table with copy that reads The Absolut Vodk a the image connotes an exclamation point. The print ad shows the genuinity of Absolut Vodka and conveys only one message that Absolut is The Absolut Vodka. The Absolut Vodka campaign targeted a new and increasing group of vodka drinkers in the United States. The broadcast is very interactive and is aimed at capturing in-the-know customers. The Absolut Vodka campaign was created by TBWA/Chiat/Day, the advertising agency of record for Absolut VODKA. 7. The In an Absolut World Campaign In 2007, Absolut Vodka began its In An Absolut World campaign in which the company posted various, often fanciful scenarios of what the target audience might think would constitute a perfect, or Absolut, reality. The campaign was handled by TBWA/Chiat/Day, part of the TBWA Worldwide division of the Omnicom Group. The In An Absolut World would elicit varying opinions and points of view of customers. It is designed to be an inspiring, humorous, and thought-provoking integrated campaign about what an Absolut World might look like and to initiate a discussion about both universal and everyday subjects, as well as to challenge consumers to express their own visions of the world. Its advertising campaign invites consumers to visualize a world that appeals to them one they feel may be more idealized or one that may be a bit fantastic. The campaign includes commercials and video clips as well as online ads, print ads, billboards and event marketing. Drinkers were invited to imbibe In An Absolut World, a fanciful, even surreal, place where common sense prevails and just deserts are always on the menu. For example, on planet Absolut, men can get pregnant, and lying leaders are exposed by their Pinocchio noses. In fact, Absolut was confronting the same problems as other market-leading brands in that everybody knows who they are, but what are they known for? Thus, The goal is to encourage a dialogue between customers and the brand. The ads proclaim, This is Absoluts view of the world; you respond, you react. Absolut ads aimed at minority consumers will also begin to feature the Absolut World theme. 7.1 Probable Marketing Objectives Since from 2003 to 2007 over 240 new brands of vodka came and many companies started focusing on the ultra-premium category, the marketing objectives of the In an Absolut World include robusting sales growth and re-establishing and re-cementing the Absoluts position in the vodka category in an extremely competitive environment. 7.2 Probable Communication/ Advertising Objectives The main communication of the In an Absolut World campaign is to provide the customers with an opportunity to interact, get involved and associated with the brand, since its customer survey found that the previous one never provided the opportunities for customers to interact and get involved with the brand. Furthermore, the campaign aimed at depicting that Absolut Vodka has a class of its own or a world of its own implicating that it is different and better than other brands. The idea is that Absolut Vodka is the quintessential vodka, the true vodka, and the standard by which you judge other things. 7.3 Target Market The target audience is 23 34 year urbanites. 7.4 Positioning Statement To inform urbanites that Absolut Vodka is the quintessential vodka, the true vodka, the standard by which consumers judge other Vodkas. 7.5 Creative Strategy The In an Absolut World advertising campaign requires that consumers imagine a world that appeals to them, something like a perfect world or a fantastic world, thus bringing about different opinions and points of view. Also it needs to these ads in countries worldwide with varying themes relevant to their region. 7.6 Creative Execution To achieve the creative strategy, they decided not only to show what an ABSOLUT WORLD looks like, but also to give consumers the chance to experience it in their daily lives. The idea was to publish the perfect newspaper and distribute it for free, with real editorial content that was entirely positive and interesting to read. Another idea was to perfect a taxi ride by supplying a fleet of free-of-charge Porsche taxis. The next idea was to make a unique experience at the nearest ATM cash machine by introducing the Happy Hour. 7.7 Media Strategy The campaign would be put in print ads, billboards, TV commercials, video clips as well as online ads (at absolut.com), and event marketing. Absolut turned its website into an online community where visitors can share and discuss their visions of an Absolut World, create and upload images, films, worlds, and sounds, create personal profiles; browse, comment, and develop the visions of others. 8. Evaluation of the In an Absolut World The campaign uses a combination of approaches in the major selling idea between creating a brand image, positioning and inherent drama. Absolut developed its strong, memorable identity through image advertising and positioned itself as the quintessential vodka in the consumers mind. The creative approach used in the campaign is appropriate for the target audience who is 25 34 year urbanites. The message can delivered to the target audience and executed in a combination of imagery and humor. For example, one of the ads shows an expectant couple and the husband is pregnant. Additionally, even though Absolut came up with many ads with different pictures, those ads were able to convey the message to the target audience effectively by using indirect headlines In an Absolut World as creative tactics for printing ads and TV commercials. Also, the message is short, clear, novel, and creative as well as provokes their thoughts. Most of the ads in the campaign use emotional appeal to attract the target audience while others create excitement and provoke thoughts. The ads and some TV commercials try to communicate with the target audience that people wish to see the world in a different manner according what an Absolut World means to them or their perceptions. For example, a TV commercial portrays a h

Moroccan Family Values

Moroccan Family Values .  The family is the most significant unit of Moroccan life and plays an important role in all social relations. .  The individual is always subordinate to the family or group. .  Nepotism is viewed positively, since it indicates patronage of one's family. .  The family consists of both the nuclear and the extended family. .  The elderly are revered and respected and often exert a great influence on the rest of the family. Gift Giving Etiquette .  If you are invited to a Moroccan's home bring sweet pastries, nuts, figs, dates or flowers to the hostess.   A small gift for the children is seen as a token of affection. .  Do not bring alcohol unless you know that your host drinks. .  Gifts are not opened when received. Dining Etiquette If you are invited to a Moroccan's house: .  You should remove your shoes. .  Dress smartly. Doing so demonstrates respect towards your hosts. .  Check to see if your spouse is included in the invitation. Con servative Moroccans may not entertain mixed-sex groups. .  Shake everyone's hand individually. Greetings|   | Man greeting Man  Ã¢â‚¬â€œ Men shake hands when greeting one another and usually kiss once on each cheek.Handshakes tend to be on the loose side. Woman greeting Woman- Women usually greet each other with kisses on the cheek. This can range from one to five (alternating cheeks) depending on the situation and relationship. Man greeting Woman-   A simple handshake or hand grasp while simultaneously kissing both cheeks is common. It is best to allow the woman to extend her hand or offer her cheek first. If the hand is not extended, than a slight bow or nod is the polite thing for men to do. Note:  It is taboo for religiously observant men to touch women and vice-versa. | | Gender Issues|   | In general, the world of men consists of the whole outside world, while that of women consists of the world inside the home. Cafes are in the male domain and are an intersection between private life and the public life found in the street. * Women are expected to cook and clean and raise the children. In big cities they enjoy much more freedom in dress, behavior and activities; however, it is still not common to find a woman out alone or in sidewalk cafes. * It is unacceptable for a woman to be in bar that serves alcohol, otherwise she is likely to be seen as a prostitute.Because Islam forbids alcohol, most bars have a seedy and unwholesome atmosphere. * As a general rule of thumb, foreigners can get away with drinking and cafe sitting, however, be sure to carefully select the bar or cafe. * Men will often try to pick-up girls along the street. Do not react in any way or they will not leave you alone. In Morocco, it must be the boy who makes the advances, otherwise the girl is seen as easy. The girls is expected to be so lovely and magnetic that the boy comes to her without any prompting. | | |Views Of Time|   | * Punctuality is not usually a virtue in Mo rocco, although some things do function on a strict time table, such as public schools. * Time works differently in Morocco; as long as one does not expect punctuality to be high the list of enviable qualities for a Moroccan and can learn to go with the flow of things, traveling is lots less stressful. * Trains are more or less on time while buses usually have no posted times nor routes, so it is necessary to ask the bus driver or local riders where and when the bus comes. When inviting people over, never expect them to arrive on time. It's best for example to invite people over at 9pm for dinner, fully expecting people to arrive after 10pm. | | Introductions, Greetings and Public Behaviour Moroccans are very hospitable and friendly people. When introductions are made, it is quite customary to ask about your counterpart’s family or friends. The most common way to greet a person in Morocco is to either offer a handshake to a person of the same gender.You may find that the hand shake in Morocco is gentler than in ‘Western’ countries – it is not proper etiquette to firmly grip and enthusiastically shake another person’s hand. Men and women greet in a slightly different way. The woman should always offer her hand first to initiate a handshake. Women who wear a full veil will often refrain from any physical contact, so in these instances it is customary for the man to simply give a slight bow and allow the woman to retain some personal space.If you have become well acquainted with your Moroccan counterparts, the proper greeting etiquette is to initiate a handshake whilst simultaneously kissing both cheeks, kissing the left cheek first. This should only be done with a person of the same gender. In public, you should be aware that it is considered good manners for men and women to leave space in between one another. Handholding is only usually seen as a platonic gesture between the same sexes. Public displays of affection are not real ly tolerated, and certainly homosexuality is still relatively taboo in Morocco.In some instances, it is considered quite uncouth for a woman to be seen alone at a bar or cafe, especially if she is young and unmarried. Although this is not the case with many ‘Western’ women, if female and planning to venture out to such a place, it is best to attempt to go out in a group or be accompanied by a man. Social Events and Dining Etiquette You may find that during your stay in Morocco, you will be invited into the family home for a meal. It is always customary for a Moroccan to offer food whenever you visit, and it would be seen as quite rude to refuse this offer.Likewise, if you are offered a present when invited into the home, you should always graciously accept. You do not have to open your gift in front of your host – equally you shouldn’t expect your host to open your present either. Gifts should be relatively small – sweets, pastries or flowers are al l popular gifts. Bringing a small gift for any children in the home would also be well received. In more conservative households, men and women will dine separately, so if planning on bringing a spouse or partner, you should always find out beforehand if this is the case.In Morocco, it is proper etiquette to dress conservatively, removing your shoes and cleaning your hands before each meal. Because eating is often done with your right hand (although bread can be taken with the left), a small basin will usually be provided before the meal. You will be expected to hold your hands out whilst a jug full of water, often scented, is poured over them. Dry your hands and wait for your host to invite you to begin eating. This ritual is also performed at the end of the meal.

Net Present Value/Present Value Index

Net Present Value/Present Value Index The management team at Savage Corporation is evaluating two alternative capital investment opportunities. The first alternative, modernizing the company’s current machinery, costs $45,000. Management estimates the modernization project will reduce annual net cash outflows by $12,500 per year for the next five years. The second alternative, purchasing a new machine, costs $56,500. The new machine is expected to have a five-year useful life and a $4,000 salvage value. Management estimates the new machine will generate cash inflows of $15,000 per year.Savage’s cost of capital is 10%. Required a. Determine the present value of the cash flow savings expected from the modernization program. Using the data from Appendix on page 1169 of our text 15000*3. 790787 = 47,385, which should be the PV cash flow savings expected from the first option of modernization program. b. Determine the net present value of the modernization project. I believe the NPV of the 1st project is calculated by subtracting current machinery, costs $45,000 from the figure above which equals 2,385. 00 c. Determine the net present value of investing in the new machine.This is determined by valuing the future cash flows. Using the same appendix in table 2 data, annual cash flow of 15,000 * 3. 790787 =56862. 00 Salvage cost of 4,000 * . 620921 (table 3 on page 523) = 2484. 00 Total=59,346. 00 less the cost of machinery 56,500 = 2486. 00 as the NPV d. Use a present value index to determine which investment alternative will yield the higher rate of return. PI= $15,000*. 620921/56,500 = . 16 This investment is not acceptable because it has a PI of less than 1. 0 therefore the modernization project or the first alternative will have higher rate of return.Exercise 24-4A Determining the present value of an annuity The dean of the School of Social Science is trying to decide whether to purchase a copy machine to place in the lobby of the building. The machi ne would add to student convenience, but the dean feels compelled to earn an 8 percent return on the investment of funds. Estimates of cash inflows from copy machines that have been placed in other university buildings indicate that the copy machine would probably produce incremental cash inflows of approximately $8,000 per year.The machine is expected to have a three-year useful life with a zero salvage value. Required a. Use Present Value Table 1 in Appendix A to determine the maximum amount of cash the dean should be willing to pay for a copy machine. Years 1 – 3; where N = 1 r at 8%, N =2, [email  protected] 8%, N = 3 r @ 8% 8000*. 925926 = 7,407. 41 8000*. 857339 = 6,858. 71 8000*. 793832 = 6,350. 66 Present Value / Ordinary Annuity = ($) 20,617. 00 Present Value / Annuity-Due = ($) 22,266 b. Use Present Value Table 2 in Appendix A to determine the maximum amount of cash the dean should be willing to pay for a copy machine.Based on table 2 in appendix a, the maximum am ount of cash the Dean should be willing to pay for a copy machine is ($) 20,617. 00 c. Explain the consistency or lack of consistency in the answers to Requirements a & b. The consistency in the answers are so seeing that table 2 in appendix A appears to be the sum of the PV for each of the 3 years in table 1. Exercise 24-8A Determining the internal rate of return Medina Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company’s cash outflow for operating expenses by $1,280,000 per year.The cost of the equipment is $6,186,530. 56. Medina expects it to have a 10-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. Required a. Calculate the internal rate of return of the investment opportunity. YearExplanationCash FlowDiscount Factor 1 (hurdle rate of 15)DiscountDiscount Factor 2Cash Flow @Disc ount 0Cost to purchase some technologically advanced equipment(6,186,530. 56)(6,186,530. 56) 1,280,0005. 01877$6,424,0264. 6565,959,680Net present value$$237,495($226,851) b. Indicate whether the investment opportunity should be accepted. The Internal Rate of Return appears to be higher than the established investment opportunity hurdle rate of 15 percent therefore it would be a good idea to accept this investment opportunity. Exercise 24-6A Determining net present value Travis Vintor is seeking part-time employment while he attends school. He is considering purchasing technical equipment that will enable him to start a small training services company that will offer tutorial services over the Internet.Travis expects demand for the service to grow rapidly in the first two years of operation as customers learn about the availability of the Internet assistance. Thereafter, he expects demand to stabilize. The following table presents the expected cash flows. Year of Operation Cash Infl ow Cash Outflow 2006 $5,400 $3,600 2007 7,800 4,800 2008 8,400 5,040 2009 8,400 5,040In addition to these cash flows, Mr. Vintor expects to pay $8,400 for the equipment. He also expects to pay $1,440 for a major overhaul and updating of the equipment at the end of the second year of operation. The equipment is expected to have a $600 salvage value and a four-year useful life. Mr. Vintor desires to earn a rate of return of 8 percent. Year ExplanationinflowsoutflowsNet Discount @8%Discounted 2006 beginningCost of equipment $ – $ 8,400 $ (8,400)1 $ (8,400) 2006Operational cash flows $ 5,400 $ 3,600 $ 1,800 0. 925926 $ 1,667 007Operational cash flows $ 7,800 $ 4,800 $ 3,000 0. 857339 $ 2,572 2007Major overhaul $ – $ 1,440 $ (1,440)0. 857339 $ (1,235) 2008Operational cash flows $ 8,400 $ 5,040 $ 3,360 0. 793832 $ 2,667 2009Operational cash flows $ 8,400 $ 5,040 $ 3,360 0. 73503 $ 2,470 2009Salvage value of equipment $ 600 $ – $ 600 0. 73503 $ 441 Net present value of Investment Opportunity $ 182 Required (Round computations to the nearest whole penny. ) a. Calculate the net present value of the investment opportunity. . Indicate whether the investment opportunity is expected to earn a return that is above or below the desired rate of return and whether it should be accepted. General rule with NPV is that if NPV of a prospective project is positive, it should be accepted. However, if NPV is negative it should not be accepted. The calculations, If correct present a positive NPV therefore the investment opportunity should be accepted. Problem 19-24A Assessing simultaneous changes in CVP relationships Green Shades Inc. (GSI) sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each.GSI incurs $250,000 of fixed operating expenses annually. Required a. Determine the sales volume in units and dollars required to attain a $50,000 profit. Sales = Contribution Margin per Unit = Revenues per Unit – Variable Expenses per U nit = 250,000 + 50,000/125 – 75= 6,000 in units Verify your answer by preparing an income statement using the contribution margin format. Break-even Sales Dollars = Sales Price per Unit ? Break-even Sales Units Break-even Point in Sales Dollars = 125 * 6000 = 750,000 Income Statement Green Shades Inc. As of October 17, 2012 Sales750,000 Variable Costs(450,000)Contribution Margin300, 000 Fixed Costs250,000 Net Income 50,000 b. GSI is considering implementing a quality improvement program. The program will require a $10 increase in the variable cost per unit. To inform its customers of the quality improvements, the company plans to spend an additional $20,000 for advertising. Assuming that the improvement program will increase sales to a level that is 3,000 units above the amount computed in Requirement a, should GSI proceed with plans to improve product quality? Support your answer by preparing a budgeted income statement. Income Statement Green Shades Inc. As of October 17, 2 012Sales1,125,000 Variable Costs(765,000) Contribution Margin360, 000 Fixed Costs(270,000) Net Income 90,000 The company might want to consider going forward seeing the likelihood of profitability. c. Determine the new break-even point in units and sales dollars as well as the margin of safety percentage, assuming that the quality improvement program is implemented. Fixed Costs/Contribution Margin per Unit = 270,000/ 125-85 = 6750 Break-even Sales Dollars = Sales Price per Unit ? Break-even Sales Units Break-even Point in Sales Dollars = 125 * 6750= 843,750 Margin of SafetyMeasured in UnitsMeasured in DollarsSales @ Budged 90001125000 Break Even6750843,750 Margin2250281,250 281250/1125000 =. 25 or 25% Problem 18-17B Process cost system cost of production report At the beginning of 2004, Dozier Company had 1,800 units of product in its work in process inventory, and it started 19,200 additional units of product during the year. At the end of the year, 6,000 units of product were in t he work in process inventory. The ending work in process inventory was estimated to be 50 percent complete. The cost of work in process inventory at the beginning of the period was $9,000, and $108,000 of product costs was added during the period.Required Prepare a cost of production report showing the following. a. The number of equivalent units of production. Equivalent units of production ACTUALEquivalent Beginning 1,800 Additional units of product19,200 Total21,000 Ending6,000 @50%3,000 To be transferred15,000 @100%15,000 Total21,00018,000 b. The product cost per equivalent unit. Beginning is 9,000 added to production of 108,000 to total 117,000 c. The total cost allocated between the ending Work in Process Inventory and Finished Goods Inventory accounts. 117,000/18,000 = 6. 50 cost per unit 15000*6. 50 = 97,500 finished goods 000 of equivalent units above*6. 50= 19,500 Total 117,000 Problem 15-17A Identifying cost behavior Required Identify the following costs as fixed or varia ble. Costs related to plane trips between San Diego, California, and Orlando, Florida, follow. Pilots are paid on a per trip basis. a. Pilots’ salaries relative to the number of trips flown. variable b. Depreciation relative to the number of planes in service. variable c. Cost of refreshments relative to the number of passengers. variable d. Pilots’ salaries relative to the number of passengers on a particular trip. ixed e. Cost of a maintenance check relative to the number of passengers on a particular trip. fixed f. Fuel costs relative to the number of trips. variable National Union Bank operates several branch offices in grocery stores. Each branch employs a supervisor and two tellers. g. Tellers’ salaries relative to the number of tellers in a particular district. variable h. Supplies cost relative to the number of transactions processed in a particular branch. variable i. Tellers’ salaries relative to the number of customers served at a particular br anch. Fixed j.Supervisors’ salaries relative to the number of branches operated. Fixed k. Supervisors’ salaries relative to the number of customers served in a particular branch. Fixed l. Facility rental costs relative to the size of customer deposits. Fixed Costs related to operating a fast-food restaurant follow. m. Depreciation of equipment relative to the number of restaurants. variable n. Building rental cost relative to the number of customers served in a particular restaurant. Fixed o. Manager’s salary of a particular restaurant relative to the number of employees.Fixed p. Food cost relative to the number of customers. variable q. Utility cost relative to the number of restaurants in operation. variable r. Company president’s salary relative to the number of restaurants in operation. Fixed s. Land costs relative to the number of hamburgers sold at a particular restaurant. Fixed t. Depreciation of equipment relative to the number of customers served at a particular restaurant. fixed Exercise 15-6B Fixed versus variable cost behavior Professional Chairs Corporation produces ergonomically designed chairs favored by architects.The company normally produces and sells from 5,000 to 8,000 chairs per year. The following cost data apply to various productions activity levels. Number of Chairs5,0006,0007,0008,000 Total costs incurred Fixed$ 84,000 Variable 60,000 Total costs$144,000 Per unit chair cost Fixed$16. 80 Variable12. 00 Total cost per chair$28. 80 Required a. Complete the preceding table by filling in the missing amounts for the levels of activity shown in the first row of the table. b. Explain why the total cost per chair decreases as the number of chairs increases.Exercise 15-12B Effect of cost structure on projected profits Logan and Martin compete in the same market. The following budgeted income statements illustrate their cost structures. Income Statements Company Logan Martin Number of Customers (a) 160 160 Sales Reven ue (n x $75) $12,000 $ 12,000 Variable Cost (n x $0) 12,800 Contribution Margin 12,000 (800) Fixed Cost (6,400) 0 Net Income (Loss) $ 5,600 $ (800) Required a. Assume that Logan can lure all 80 customers away from Martin by lowering its sales price to $75 per customer.Reconstruct Logan’s income statement based on 160 customers. b. Assume that Martin can lure all 80 customers away from Logan by lowering its sales price to $75 per customer. Reconstruct Martin’s income statement based on 160 customers. c. Why does the price-cutting strategy increase Logan’s profits but result in a net loss for Martin? This is so in that when sales to 160 clients at 75 (12,000), more revenue is produced as opposed to sales to a lesser amount (80 clients) at 125 (10,000). Fixed costs contributes to Logans increases in sales revenue. Exercise 16-9A Allocating overhead cost to accomplish smoothingMimosa Corporation expects to incur indirect overhead costs of $72,000 per month and direc t manufacturing costs of $11 per unit. The expected production activity for the first four months of 2007 is as follows. January February March April Estimated production in units 4,000 7,000 3,000 6,000 Required a. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. MonthJanuaryFebruaryMarchApriltotalEstimated production in units 400070003000600020000 72000*4/20,000=14. 40 per unit b. Allocate overhead costs to each month using the overhead rate computed in Requirement a. MonthJanFebMarchAprilTotal Rate14. 4014. 4014. 4014. 40 Base4,0007,0003,0006,000 Cost57,600100,80043,20086,400288,000 c. Calculate the total cost per unit for each month using the overhead allocated in Requirement b. MonthUnits (A)Overhead (B)Cost (A*11)TotalCost Per Unit (d/a) Jan4000576004400010160025. 40 Feb70001008007700017780025. 40 March300043200330007620025. 40 April6000864006600015240025. 40

The Outbreak of the Spanish Civil War Essay - 1619 Words

The Outbreak of the Spanish Civil War To this day the Spanish Civil War is still remembered as the single most pivotal moment in the history of Spanish politics. The only way of understanding how 600,000 Spaniards were killed between 1936 and 1939 is to ask ourselves why the civil war broke out in Spain in 1936. There were a number of reasons which led to the civil war in Spain. The main and most significant being the increased political polarization between the left and right wing parties. This polarization primarily began within Spanish society, which had been characterized by its strong religious beliefs and conservative values, as it remained a strict Roman Catholic country for many†¦show more content†¦On the other hand, was the conservative nationalists represented by the Church, the army and many large landowners and industrialists. Most of which wanted Spain to return to the Golden Ages of sixteenth century Catholic Spain and were in favour of the Monarchy in order to remain an authoritarian state. This division was highlighted further by a number of pronunciamientos[6] and uprisings between the two sides adding to the increased political tension. For the right, ‘they saw the defence of religious interests as their fundamental political task.’[7] Whereas, the liberals reflected the increasingly anti-Catholic feeling throughout Spain. Therefore, it can be understood why the liberal views on the Church, and its policies within the second republic to reduce the Church’s power, angered the right wing parties enough for them to retaliate through a number of uprisings throughout Spain. Especially during the declaration of the second republic stating that Spain no longer possessed an official religion. During the constitutional monarchy of Alfonso CIII, the left was frustrated by the farce of the electoral system[8], which up until the second republic was formed on the 14th April 1931, remained in favour of local bosses, also givenShow MoreRelatedThe Outbreak of the Spanish Civil War1087 Words   |  5 Pagesbe to describe the Republican and Nationalist forces as being evenly balanced at the outbreak of Civil War in 1936? The outbreak of Civil War, in July 1936, was due to the murder of Sotelo by a PSOE supporter on the 13th of July. Sotelo was murdered in retribution of the armed action taken against the Asturias rising in which 3,000 miners were killed and another 35,000 were taken prisoner. At the outbreak of war both the Republicans and the Nationalists were fairly evenly balanced, however takingRead MoreHistory Essay Spanish Civil War957 Words   |  4 PagesWhat were the key effects of the Spanish Civil War? Spanish Civil War was war which lasted from 1936 to 1939. 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