Absolut: Killing their partners off, one by one

Absolut Rockstar launched yesterday in Lisboa, to the masses offering free entry, top DJs and an open bar – who could resist that?

The more I work in the entertainment/nightclub Industry in Portugal, the more I wonder who really consumes all the drugs – the ravers or the drinks companies? A decade ago, Lisboa was considered the ultimate Movida with its savvy clubs and over the top lighting and sound investments. But something along the way went a miss.

As more clubs emerged, the competition began to erode the pornographic returns the owners received for their investments, some of which, and in some cases most of which, was subsidised by contracts with drinks companies such as Unicer and Centralcer (beer), Pernod Ricard, Diageo and Bacardi. It was after all a gold mine. Great opportunities bring new players and the market was soon invaded by a severe lack of entrepreneurship and solid management.

Clubs reacted bringing international djs often at inflated prices killing off any chance of a return. The consensus was that the PR from that evening would help to position the club for the coming months. However, most consumers saw the event as just that – an isolated event. Instead of working their brands, owners promoted the Dj as THE brand begging the questions – after Erick Morillo, who do we bring next? What stops my competitor from doing the same? Well, nothing. And they did.

Other clubs went one (very large) step forward and embarked on the biggest lunacy ever committed in this industry – the ladies night. Simple concept based on the most outrageous of preconceptions – free drinks for women all night long and the men will follow and consume. The single most important rule of marketing was brushed aside with the conviction of someone who had invented the next big thing – never give away what you sell or you’ll be left with nothing.

Fast forward to the year 2009 and the Movida has moved elsewhere. Where? Who cares, it isn’t in Lisboa anymore and that’s what matters to us. The market has taken a huge hit, not only from the impact of the recession but also from direct and indirect alternatives ranging from restaurants, niche bars, cable tv and anything else that keeps people from leaving their homes at night.

It is no surprise that drinks companies have been hit hard with the market shrinking over 30% in the last year alone, but what have they done to invert this tendency. You’d think the obvious solution would be to work alongside the bars and clubs in order to work towards a better understanding of the shift in consumer spend, hence co-developing new strategies to minimise the pain and increase the value curve of those that sell directly to the consumer. Though I understand that the night market is only part of the sales channels, it continues, nevertheless, to dictate a degree of persuasion in the purchasing habits of the consumer.

So it appals me (and leaves me confused) to see Pernod Ricard, one of three brand power houses in the drinks category, destroy in one night, the little that subsides from the once so vibrant Movida. Last night, Absolut launched its Absolut Rockstar with an open bar for the masses. Needless to say, that it was full. What wasn’t full, and in most cases verging on empty, were clubs and bars that sell Absolut all year long and contribute to the budget spent on that one event. It’s an example of the mindless, nano-mini-micro-short term, short sighted, ill informed strategies that some marketers continue to embark on. Could this not have been done any other way so as not to harm Absolut’s loyal partners? The short answer is yes but it’s too much hard work.

Obviously the easy way out is to offer everything for free, send an email out the day before!, have cohorts of happy to drink for free punters and claim an extraordinary result. Its times like these that I’m happy to be on the other side with Bacardi who invest in events but in the clubs that help them sell all year round. Who will kill this Rockstar?

Tagged as: absolut, Killer, Lisboa, Pernod Ricard, poor marketing, portugal