Combine 1 cup cranberries, 2 tablespoon sugar, and 2 tablespoon water in a saucepan. Simmer the cranberries over medium heat for about 10 minutes, or until they burst and soften.
Remove from heat and blend using a hand blender until smooth.
Strain through a fine mesh sieve to remove the skins.
Let the puree cool completely before using.
Make the Cranberry Buttercream
Beat butter until smooth and creamy (about 3 minutes).
Add cranberry puree and vanilla extract. Mix until combined.
Slowly add powdered sugar, one cup at a time, mixing between each addition.
Dice the fresh cranberries finely.
Fold them gently into the buttercream with a silicone spatula.
Transfer the buttercream into a piping bag fitted with a metal tip.