Marketing Idea No. 230 – How to attack an established brand with a price fighter brand

One of the finest strategy ever created was done by Al Ries and Jack Trout some 30 years ago when they advised brands to create a new category/sub category and be the first in it. 30 Years down the line we are still practising it. And some guerilla vodka companies are showing the world how to get it done. Smirnoffs and Absoluts of the world are suddenly very very scared.

You may not have gone ga-ga over Vodka brand names like Sobieski, Wodka etc. but these brands are starting up a storm in liquor category. Now, Vodka being a colorless, odorless, tasteless and highly mixable drink; you need a strong image like the one Smirnoff and Absolut have done over the years. There is just not enough value in the product, so the value should come from image or packaging (i.e. Absolut).

But noticing the opportunity and a customer insight that there is just not enough difference between a super-premium Vodka and a regular Vodka, brands like Wodka and Sobieski has created a value/low price line of Vodka category. The strategy is simple. Charge it below $20, put “Super-premium or Ultra-premium” in the label to boost image and target restaurant owners. And by targetting the restaurant owners (who loved the idea of higher margins as his purchasing price for vodka going down but the selling price to consumers staying high) rather quickly they are eating into the market share of Absolut and Smirnoff. 

This is a lesson that through diligent trend and insight hunting, it is possible to understand that some of the products and brands may be over priced as per the differentiating value they deliver. Simply speaking, they thrive on hype rather than customer value. By attacking them head on and creating enough value at a significantly lower price without hurting image; you can hurt some of these so called giant brands.

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