Russian Standard Vodka

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Russian Standard Vodka: Strategies for Global Branding and Expansion into the US Market Case Study By CHEN Mengjie Marguerite Summary Given the success of Russian Standard Vodka in the Russian and European Market, following the global branding vision, expansion strategy for US market needs to be defined. This case study will provide in-depth analysis to focus on evaluating expansion strategies and offering market entry recommendations.

1. Russian Standard 1. 1 Overview Russian Standard was launched by Roust Holdings, a company driven by an unusual mix of quality orientation and Russian pride.

In launching the Russian Standard brand, the ambition of Roustam Tariko, founder and main owner of Roust Holdings, was to set a new standard of world-class quality for a new breed of global Russian brands. The first category to which Tariko decided to apply his Russian Standard concept was vodka – born in Russia and strongly associated with the country.

The next big move was the creation of the Russian Standard Bank, aiming to serve foreign trade companies, small businesses and individual customers, with a main focus on retail banking.

Apart from the two mainstream businesses, Roust also launched B2B and B2C e-commerce portal. 1. 2 Visions Tariko had two ambitious goals for Russian Standard brand: (1) to develop a line of original products and services in multiple categories which would meet international quality requirements, and (2) to create a brand that would set new Russian standards and improve the image of Russia both at home and abroad.

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1. 3 Brand Identity Tariko’s personal affinity for luxury goods and his ambition to create the first truly premium Russian brand determined to a large extent the identity of Russian Standard.

What Is Russian Standard Vodka Made From

The brand has the mission to re-establish something that will be a standard for Russians. The essence of the brand and the overall brand strategy was born as “embraced the past, and inspired progress” after brand research. This theme is the main identity and positioning of the brand. 2. Russian Standard Vodka 2. 1 Overview Roustam Tariko introduced Russian Standard in 1998 as the first authentic Russian premium vodka. Russian Standard vodkas are made with only the finest Russian ingredients, uniquely conforming to the formula for vodka established in 1894 by famed Russian scientist Dimitri Mendeleev for Russia’s Czars.

Two years after launch, sales of Russian Standard surpassed all imported premium vodkas on the Russian market. 2. 2 Success Factors The success of Russian Standard can be attributed to its high and consistent product quality, its distinctive premium packaging, its strong distribution and merchandising, and its Russian heritage. 1) True Russian Spirit: There was a clear niche in the Russian market for a premium brand that was genuinely Russian, with a link to Russia’s rich past. No competitors could qualify for this definition. ) Market Uniqueness: Russian Standard vodka was the first domestic brand to create a rich mosaic of imagery (product, packaging, pricing, merchandising, media communications). 3) Strong merchandising skills and relationships with off-trade and on-trade: This allowed Russian Standard to secure privileged shelf space and promotion by supermarkets, and access to the bars of the most prestigious and fashionable clubs and restaurants in Moscow and St Petersburg. Encouraged by its rapid success at home, management aimed to make Russian Standard the number one Russian vodka in the world.

After launching the brand in 10 European countries, the founder wondered which expansion strategy to follow for Russian Standard vodka to be launched in the US, the biggest premium vodka market in the world. 3. Global Branding Strategies 3. 1 Expansion Strategies Options The management defined three expansion strategies: 1) Directly apply the successful positioning of the brand and marketing mix used for Russia to the US market. 2) Pursue a global branding strategy – one that preserves the key sources of equity of a potentially global brand but also included local market adaptations. ) Use a customized approach to the US market be used to win the key market, regardless of the implications for the brand in other global markets. The following analysis will give a profound basis for choosing the expansion strategy for Russian Standard Vodka. 3. 2 Vodka Markets Analysis – Russian and US [pic] Based on the market analysis, we can find the substantial market potential in US market. US market is the biggest premium vodka market and super-premium is growing very fast, and there’s market niche for products with subtle distinctions in taste and heritage to join.

The consumer group is more balanced and energetic in US including men and women and targeting young generation. The consumption was in groups and on-premise, which is a different business model from domestic market and a good opportunity for expansion. 3. 3 Criteria for Global Branding Strategies 1) Intended brand meaning of the organization It’s natural for Russia to enjoy such a renaissance in premium vodka production. Russian Standard Vodka is to assure Russia’s place as the birthplace of vodka and to be the world’s first premium Russian vodka made according to the standards of Mendeleev’s 1894 formula to reveal brand authenticity. ) Fundamentals the firm plans to compete on Russian Standard Vodka’s statement is very clear and loud: to be the number one Russian vodka in the world. The first fundamentals will be to keep the true Russian spirit. Russian Standard also have a ambitious goal which is to set new standard for Russia. Russia standard also need to balance the business portfolio between Vodka and Bank. It’s essential to protect the equity of the brand in Russia. 3) Main benefits to be provided to the customers Russian heritage dream factor: Russian Standard Vodka reflects Russia’s vodka-producing heritage.

It’s also a symbol of the essence of Russian’s modern society, Russian vodka premium quality: It’s a brand new premium vodka distilled and bottled exclusively in Russia using only the finest Russian ingredients with a passionate attention to detail and state-of-the-art distilling techniques. 3. 4 Expansion Strategy Decision According to the analysis given above, the second option will be suggested as the most practical strategy for Russian Standard Vodka to enter US market: Pursue a global branding strategy – one that preserves the key sources of equity of a potentially global brand but also included local market adaptations.

The first alternative will be very risky given the differences in US market. Market adaptions will be needed to certain extent. The third alternative cannot be chosen in the sense that the management needs to keep the brand image consistent and maintain the brand identity. This approach tends to dilute the brand authenticity. 4. Expansion into US Market Recommendations 4. 1 Target customers The international product manager must know how similar/different potential customers are in the market to serve. The US customers will be younger and more diversified.

And they are very cultural sensitive and looking for something different with heritage and taste. The connoisseurs and strivers categories can also be applied to US market since they also appreciate high quality and prestige of the brand. 4. 2 Country of origin Russian Standard Vodka will fit in perfectly with the country of origin concept to win US customers. The Russian origin of vodka has symbolic value associated with the brand. It’s also about attraction by cultural difference. The product can be marketed on the basis of its specific Russian cultural background.

It is precisely the difference in culture that makes it desirable. 4. 3 Product / Brand positioning Functionally, the brand shall emphasize the authentic quality from Russia, the purity of vodka, its neutral taste and superior aroma. Emotionally, the brand was meant to serve as a source of Russian identification, belonging and validation. Russian Standard shall also be positioned as a luxury brand to create an aura of prestige for users, to make them believe no other vodka brand in the world could bring such an authentic Russian experience to US consumers. . 4 Market communication Russian Standard Vodka and Russian Standard Bank will be linked together once the communication message is consistent in transferrin the message of Russian Standard offers more than products or services, it provides Russians with a sense of pride and personal freedom. The market communication will be key to keep the real essence of the brand across international markets. The concept could be that it embodies the true Russian spirit of generosity, and the traditional Russian passion for vodka.

In-store marketing, on- and off-premise promotions, local events hosted / sponsored by Russian Standard Vodka or even television program can be marketing approaches to fit in different purposes. 4. 5 Pricing decisions In Russia, Russian Standard was one of the most expensive brands among locally produced vodkas. The price gap that the brand maintained vis-a-vis standard segment vodkas clearly demonstrated its premium position. The premium positioning of the brand was emphasized to foreigners. In US market, given the fast growing of super-premiums, pricing can target premium and super-premium segments.

New product development can also be considered in a latter stage to expand the product portfolio. Conclusion Reeling Russian culture far into the future meant taking a novel look at the treasures of its past. Russia has undergone a true renaissance and Russian Standard has played a pivotal role, providing Russians from all walks of life the opportunity to realize their dreams. Named the number one premium vodka in Russia and ranked one of the fasted growing brands in the world, Russian Standard is well on its way to achieving its long-term vision as the international leader in premium and luxury spirits.