tiểu luận REPORT INTERNATIONAL MARKETING FOR RED BULL

UNIVERSITY OF ECONOMICS AND FINANCE • ⎯ • ⎯ ❀☀❀ • ⎯ • REPORT INTERNATIONAL MARKETING FOR RED BULL INSTRUCTOR Lê Nguyên Hoàng SUBJECT International marketing CLASS B09E Team NGUYỄN KIM NGÂN 185040256 NGUYỄN THỊ HỒNG NGỌC 185040327 NGÔ THỊ THÙY DƯƠNG 185040548 TRẦN THỊ KIM NGÂN 195041990 PHAN PHÚC HẢI 195041706 Ho Chi Minh City, January 10, 2021 TABLE OF CONTENTS EXECUTIVE SUMMARY .3 INTRODUCTION TO RED BULL CULTURAL ANALYSIS 3.1 Geographical setting 3.2 Social institutions 3.3 Living conditions 3.4 Executive summary - ECONOMIC ANALYSIS 4.1 Population 4.2 Economics statistics and activity - 4.3 Developments in science and technology - 4.4 Channels of distribution (macro analysis) - 4.5 Media 11 4.6 Executive summary 13 MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS 13 5.1 The product 13 5.2 The market - 14 5.3 Executive summary - 15 PRELIMINARY MARKETING PLAN .15 6.1 The marketing plans - 15 6.2 Proforma financial statements and budgets - 21 SOURCES OF INFORMATION 21 TEAM - 2 EXECUTIVE SUMMARY Based on the analysis of culture, economy and also market audit and competitive market analysis, from there, the team came up with a marketing plan for red bull when entering the vietnamese market as follows: According to Numerator, the target audience of Red Bull is mainly between the ages of 15 to 45 year old, both male and female, who have an average to high income, likes sports, extreme sports and athletic events Red Bull's customers can be defined as young, independent professional with big dreams and aspirations Sales and profit forecast years 1-5 Year Sell out in value Profit YEARS PROFIT FORECAST 1,850,238,720,000 1,896,494,688,000 1,942,750,656,000 1,989,006,624,000 2,035,262,592,000 925,119,360,000 948,247,344,000 971,375,328,000 994,503,312,000 1,017,631,296,000 SWOT analysis: Red Bull's business strengths include a powerful brand and a unique, sports-based marketing strategy The company does suffer from two weaknesses; specifically, a limited product range and the high price tag for their primary offering Opportunities for Red Bull include emerging markets, new product lines, and healthy alternatives As in all industries, a major threat for Red Bull is competition Other threats include product staleness and health-related regulation About marketing mix: For products, focus on energy drinks product line to bring to Vietnam market Regarding the price, there are two types of prices: retail Price: 10,000 – 12,000 VND / a can and wholesale Price: 200,000 VND / pack of 24 cans Regarding distribution, our team recommends the safest way to enter into a new market for Red Bull by using a relevant low risk entry mode: Licensing or Joint Ventures For promotion, we mainly use two tools (advertising, sales promotion) to help to improve the product's image, credibility, and visibility - uses all accessible media outlets via which it communicates with its core target market-young people Activities Costs Details Social media Event and Sports Sponsoring Method Sampling Coupon online Facebook, Instagram 220,000,000 600,000 people reachable on Facebook and Instagram in months YouTube Tiktok Sponsoring 270,000,000 300,000 viewers (900đ/1views) 138,000,000 600,000 viewers (230đ/1 views) 1,500,000,000 Sports Event Red bull’s Event 2,000,000,000 Music festival, Speed Cycling Vietnam Championship Cost (VNĐ) 250,000,000 500,000,000 Note 20 universities, 100 high school, 10 densely areas 500.000 coupons for 500.000 target customers on Momo, Zalopay Each coupon is worth 10,000 VND when customers buy a pack of Redbull (6 cans) Additionally, in some countries, Red Bull's success story is remarkable as the soft drink industry is one with high barriers to entry and soft drink companies have to deal with high buyer power of distribution and retailers This is all due to the dominant brands like Coca Cola and Pepsi having a tight grip on the retailers and their shelf space However, Red Bull has been able to enter the Vietnamese market successfully by innovating in a variety of ways:  Product innovation: Red Bull creates a product that fills the gap in consumer needs for a cold drink that gives mental energy  Market segmentation innovation: Red Bull used a very targeted approach compared to the mass marketing approach of the incumbents  Channel innovation: Red Bull used a “pull” strategy in order to gain shelf space in the retail channel Pull is created by offering gain among the consumers by products in alternative channels, for example bars and health clubs  Marketing innovation: Red Bull has used creative onsite promotions instead of mass marketing approach of the incumbents TEAM - INTRODUCTION TO RED BULL 2.1 The Birth of Red Bull Many great ideas are born in a bar, and Red Bull is no exception In 1982, Dietrich Mateschitz—an Austrian native and an employee of Unilever—was sitting in a bar of the Mandarin Hotel in Hong Kong on one of his many business trips to Asia As he sipped on his drinks, he came up with the idea to commercialize energy potions— highly caffeinated drinks that enjoyed wide popularity in Asia—to the western markets Dietrich approached TC Pharmaceuticals of Thailand and asked for the foreign licensing rights of Krating Daeng — the original “Red Bull '' energy potion The Original Red Bull is quite different from the western version as it came in a glass bottle, syrupy (like a cough syrup), and non-carbonated It also catered to blue-collar workers, and had an image of being the drinks for truck drivers The owners of TC Pharmaceuticals agreed to the offer in return for 51% stake in Dietrich’s new company, which was later founded in 1984 as Red Bull GmbH in Austria Unlike the original Red Bull, Dietrich did not pursue the blue-collar market He decided to cater to a younger and more active segment that enjoyed night-clubbing and extreme sports In short, his strategy was to convert a “blue collar” drink of Asia into a “hip” brand in the west In order to fit European tastes, the original formula was refined by making it less syrupy and by adding a “fizzy” touch through carbonation After three years of preparatory work, Dietrich launched the Red Bull Energy Drinking Austria in 1987, and sold million cans in the Austrian domestic market in the first year 2.2 Phenomenal Growth through Global Expansion Red Bull followed a “start small, grow big” strategy, which lead to its sustained growth over eighteen years Their growth was triggered in 1992, when Red Bull began its international expansion to Hungary After that, Red Bull engaged in a series of aggressive international expansion, with significant moves being 1994 (UK, Germany, Netherlands and Switzerland), 1995 (Eastern European countries, Brazil and Australia), and 1997 (USA) As a result, Red Bull is now available in over 100countries world-wide Today, what began as an idea in a bar became a phenomenally successful venture with reported annual sales of 1.5 billion cans or $1.55 billion in 2003 The company remains private under the same ownership With essentially one product from Asia, Dietrich became one of the most successful business persons in the world, which is exemplified by his recent addition to the Forbes’ “List of Billionaires” 2.3 The Product Red Bull is characterized by two elements in its formula—caffeine and energy-enhancing ingredients - which the company claims to make it the perfect drink to energize the body before strenuous activities such as extreme sports and all-nightclubbing Red Bull contains 80 \mg of caffeine, which is almost twice that of a can of Coca Cola or Pepsi, or an equivalent to a cup of filtered coffee Energy-enhancing ingredients include Taurine (amino acid), Glucuronolactone (carbohydrate), and several other sugars and vitamins The drink is available only in a 250ml can In 2003, another product line “Red Bull Sugar Free '', was added to the portfolio Red Bull was invented based on the inspiration of Thailand's Krating Daeng energy drink This is a cheap drink that is very popular with long-distance drivers in Thailand Based on this water Dietrich Mateschitz has changed some flavours suitable for Westerners And in fact, Red Bull is the English name of Krating Daeng which means red bull The product has yellow water, the consistency is better than other types of water, the strong taste makes the mind alert, reduces stress and fatigue 2.4 Red Bull in Vietnam market Constantly affirming its reputation, helping to increase energy for the body and mind, Red Bull was officially present in the Vietnamese market in 1999 For nearly 20 years "supplying energy" to Vietnamese users with international quality products, Red Bull constantly inspires Vietnamese young people to discover their own potential, overcome all challenges to achieve their goals, with the spirit of "the bravery to conquer the goal" The ingredients in Red Bull energy drinks completely meet Vietnamese standards and are non-toxic to consumers, certified by the Department of Food Hygiene and Safety under the Ministry of Health Red Bull in Vietnam has always kept its traditional taste until now In the international market, Red Bull has main products: Red Bull energy drink, Red Bull Sugar free, Red Bull energy shot and Red Bull cola However, on the Vietnamese market, there is only one Red Bull label with the identity of a copper-yellow can with two red bulls butting each other, and the bottom has the Thai name: Krating Daeng At the end of 2018, TCP Group announced to invest billion baht (about 2,800 billion VND) in the Vietnamese market, towards energy drink product lines Red Bull is also known as an energy drink brand that supports activities TEAM - connecting different social classes in Vietnam, with the aim of arousing the spirit of Vietnamese consumers who are always full of positive energy during the past CULTURAL ANALYSIS 3.1 Geographical setting Vietnam - a country located on the eastern edge of the Indochinese peninsula, the centre of Southeast Asia The shape of Vietnam on the map is S- shaped, the distance from north to south is 1,650 km and the narrowest position in the east to west direction is located in Dong Hoi with less than 50 km Vietnam is a tropical country Along the stretched territory, Vietnam's climate is distributed into regions: the north has a humid subtropical climate, the central region has a tropical monsoon climate, while the south is located in the savanna tropics Vietnam have terrain is mostly hills and mountains (representing 3/4 of the territory), mainly low hills, plains account for only 1/4 of the area The topographical structure is quite diverse thanks to the rejuvenation of the Neo-tectonic movement, creating a clear hierarchy according to altitude, descending from the northwest to the southeast As a country with a tropical monsoon climate, Vietnam is considered a place with strong growth potential in the beverage market in the coming time and in the world In Vietnam, the main types of beverages include: soft drinks, energy drinks, carbonated and non-carbonated mineral water, instant tea, purified water and fruit juices According to data from vtown.vn, energy drinks account for 18.28% of Vietnam's beverage market share, second only to tea market share In addition, the beverage service industry often serves ice to drink in hot weather Contributed to an increase in the demand for soft drinks in general and energy drinks in particular Especially in the energy drink industry in Vietnam, Red Bull is one of the typical beverage brands that have received a lot of sympathy from consumers over the past two decades 3.2 Social institutions ▪ Family The Vietnamese family now exists in two major forms: nuclear families (two generations) and extended families (from three generations upwards) The nuclear family is the most common According to findings of a survey of three regions including cities, plain and midland-highland: nuclear families account for 78% (cities, 65%; plain, 81.7% and midland - highland areas, 80.6%) The nuclear family does not stand on its own but always receives support and assistance from wider families (parents, brothers and wider kin) Three-generation families account for a small percentage: 18.2% (cities, 35%; plain, 13%; and midland-highland, 18%) Meanwhile, four-generation families are very few (0.5%) Vietnamese association is increasing with single people and nuclear families, families consisting of a pair of parents and children They will prefer and give preference to small-sized drinks Instead of too large size and canned form, which is currently being used by many people Like a can of Red Bull with a compact size (40x30x12cm), suitable for almost any family ▪ Political system According to the provisions of Circular 219/2013/TT-BTC, the value-added tax rate of 10% is applied to goods and services not belonging to the categories of goods not subject to value-added tax Goods subject to value-added tax rate of 0% and 5% specified in Articles 4, and 10 of Circular 219/2013/TT-BTC have been amended and supplemented by many other legal provisions involve Thereby, it can be determined that beverage products are subject to the value-added tax rate of 10% Previously, in August 2017, the Ministry of Finance announced a proposal to apply a special consumption tax (SCT) of 10% on sugary soft drinks, except for dairy products, to limit the consumption of these products and contribute part to protect consumers' health, reduce the proportion of overweight, obese and diabetic people in Vietnam, and at the same time increase revenue for the budget The above tax rate applies to all types of sugary soft drinks, regardless of carbonated or non-carbonated fruit juices or energy drinks Thus, according to the proposal of the Ministry of Finance, each can of soft drink will be subject to an additional 12% tax, the actual price will also increase by about 12% This tax rate may not have much impact on urban families, but will have a significant impact on the spending ability of many families in rural, remote and isolated areas This, soft drinks in general and Red Bull in particular will face many difficulties in consuming 3.3 Living conditions ▪ Diet and nutrition According to the National Nutrition Census (2018-2020), about people's diets in 2020: The average energy in the diet reaches 2023kcal/person/day, a slight increase compared to the energy level of 1925kcal/person/day 2010 The structure of energy generation from protein, lipid, and glucid (2020) is: 15.8%: 20.2%: 64.0% (% of total energy intake), this structure is considered is balanced according to recommendations for Vietnamese people (2016) People's fruit and vegetable consumption has increased per capita from 190.4g of vegetables/person/day; 60.9g of TEAM - ripe fruit/person/day (2010) to 231.0g of vegetables/person/day; 140.7g ripe fruit/person/day (2020); The consumption of vegetables and fruits only reached about 66.4% - 77.4% of the recommended needs of the Nutrition Tower for adults Meat consumption increased rapidly; from 84.0g/person/day (which is the national average meat consumption in 2010) to 136.4g/person/day (in 2020); consumption in urban areas is higher, at 155.3g/person/day (in 2020) Rice consumption tends to decrease In urban schools, there is a tendency to increase consumption of soft drinks and fast food According to the Worldpanel Division's report in 2019, Vietnamese people have needs when using drinking water In which, beverage demand accounts for the highest proportion with 25% and is the most basic need In addition, other needs are also quite common such as: Supplementing energy (16%), cheering up the day (15%), improving health (11%), family gathering (14%), drinking with meals (11%), chatting with friends (8%) At the same time, the food culture in Vietnam is diverse Everyone can use soft drinks as the main drink in parties In particular, Red Bull products are the best choice and top priority for drivers in Vietnam to help them stay awake and energetic on long journeys ▪ Recreation, sports, and other leisure activities Sports spirit of Vietnamese people is increasing day by day According to a survey by Q&ME in 2015, 60% of people exercise at least once a week Sport Marketing, thereby becoming a topic of great interest to the Marketing world and finding ways to include in communication campaigns Recognizing that opportunity, Red Bull, the world's leading energy drink brand, which is associated with many unique adventure sports activities, has launched an interesting Sport Marketing campaign and caused a stir among the youth community Vietnamese Red Bull is known as the "Golden face of sports village" Because Red Bull energy drinks contain performance-benefiting ingredients such as caffeine and a vitamin blend that provide instant energy and boost alertness and focus, the product is widely used Sports athletes around the world choose and trust before important matches, especially in sports such as racing, skiing, football, skateboarding, boxing, swimming, track and field… In addition, Red Bull energy drink is also widely used by office workers and drivers who drive long distances at night because this type of water helps them improve memory, mental alertness, and repels distractions ▪ Healthcare Vietnam has made impressive progress toward improving the health status of the population, with progress that equals or surpasses that of many neighbouring countries Life expectancy in Vietnam is 72.8 years (70.2 for men and 75.6 for women), a level that is considerably higher than that in many countries with similar levels of GDP per capita From 1990 to 2009, the infant mortality rate fell from 44.4% to 16.0%, the under-five mortality rate dropped from 58.0% to 24.5%, and the maternal mortality ratio declined from 233 to 69 maternal deaths per 100,000 live births Estimated to be around 18% in 2010, the rate of under-five malnutrition has also fallen dramatically 3.4 Executive summary Located in the cradle of Southeast Asia, Vietnam's favourable geographical position with a long coastline, many seas and ports, can act as a launching pad when exporting goods to Vietnam At the same time, the tropical climate creates favourable conditions for people to consume more and more soft drinks With geographical location plus human culture, Vietnam is a potential market for Red Bull to penetrate Vietnam is a developing country with strong growth potential in the future and is a market targeted by multinational companies in recent times Has a long history of development along with a unique culture according to each ethnic group and region The middle class is emerging and accounts for the majority of the population and its consumption trends are challenging for many industries such as: healthcare, education, etc ECONOMIC ANALYSIS 4.1 Population ▪ Total population: 98.550.357 people (WTO - 25/12/2021) ▪ Urban population: 37,34% ~ 36.346.227 people ▪ Rural population: 62,66% ~ 62.204.130 people TEAM - ▪ Population density of Vietnam: The population density of Vietnam is 318 persons per square kilometer as of December 25, 2021 ▪ Growth rate: Vietnam's population growth rate was quite high in the period 1951-2000 From 2000 onwards, thanks to family planning measures and people's awareness of having children, the population growth rate increased numbers were gradually under control From 2019 to 2020, the population growth rate is 0.98% ▪ Birth rate: 4,234 children are born every day on average ▪ Average age: 32.9 The dependent population ratio is the ratio of the unable to work (dependents) to the labor force of a country The dependent portion includes the population under 15 years of age and people aged 65 and over The labor force consists of the population aged 15 to 64 years The total dependent population rate in Vietnam in 2019 was 45.1% This is also the target age of Red Bull's customers ▪ Population forecast for the period 2019-2069: The population of Vietnam is forecasted to be 104.5 million in 2029, 110.8 million in 2039 and 116.9 million in 2069 In the first years of the forecast period, 2019-2024, the annual population growth rate of our country is 0.93% In the future, it is forecast that the population growth rate will continue to decrease and reach a "stop" state at the end of the forecast period, the period 2064-2069 The sex ratio will increase rapidly in the period 2019-2029 It is forecasted that by 2026 the male population will equal the female population (the sex ratio will reach 100 males/100 females); By 2069, the sex ratio of Vietnam will be 101.4 men/100 women The population is large, increasing steadily over the years, the majority of the population is aged betwee n 1564 years old At the same time, this is the target customer group of Redbull, so the Vietnamese market promises to be a potential market for Redbull's products ▪ Ethnic origins: Vietnam has a total of 54 ethnic groups Kinh people are the majority ethnic group, living all over the territory but mainly in the plains, islands and urban areas This is the main ethnic group that will consume redbull products Most of the ethnic minority groups (except the Chinese, Khmer, and Cham) live in the midland and m ountainous areas And the majority of other ethnic groups live in the mountainous provinces of Vietnam This target group mostly lives in high mountain areas, it is quite difficult to reach these customers But with the growing traffic infrastructure in Vietnam, this also facilitates Redbull's products to reach this customer group ▪ Migration rates and patterns: According to statistics, the whole country has 6.4 million people aged and over as migrants, this number accounts for about 7.3% of the total population However, the proportion of female migrants is still higher than that of men in the total number of migrants, but this disparity is gradually shifting towards an equilibrium The majority of migrants are in the 20-39 age group (accounting for 61.8% of the total number of migrants) The Red River Delta and the Southeast are the two regions with the highest immigration rates in the country Especially, the Southeast region is an economic development area with large industrial zones , which still attracts a large number of migrant workers, with 1.3 million immigrants With the population tending to migrate to big cities, this makes it easier for Red Bull products to reach audiences in rural areas 4.2 Economics statistics and activity ▪ Economic system: TEAM - The Vietnamese government self-identifies that the Vietnamese economy is an economy operating under the market mechanism, and many countries and economic blocs, including some advanced market economies, also recognize Vietnam as a market economy market economy However, so far the US, EU and Japan have not recognized Vietnam's economy as a market economy The World Trade Organization recognizes Vietnam as a low-level developing economy and in transition ▪ Economic Indicators: From 1986 to 2016, after 30 years, Vietnam's economy achieved the following results: • During the past 30 years, Vietnam's economy has achieved a relatively high growth rate In the period 1986-1990, the average GDP growth rate reached 4.4%/year, in the period 1991-1995 GDP averaged 8.2%/year; in the period 1996-2000 average GDP increased by 7.6%/year; in the 2001-2005 period, GDP increased by an average of 7.34%/year; in the period 2006-2010, due to the world economic slowdown, Vietnam still achieved an average GDP growth rate of 6.32%/year In the 2011-2015 period, Vietnam's GDP growth slowed down but still reached 5.9% per year, a high level in the region and the world • The scale of the economy increased rapidly: GDP per capita in 1991 was only 188 USD/year By 2003, GDP per capita reached 471 USD/year and by 2017 GDP per capita reached nearly 2,985 USD/year The production force has made many advances in both quantity and quality • The poverty rate decreased from 58% in 1992 to 7.6% at the end of 2013 • Vietnam's economic structure initially shifted towards modernity, reducing the agricultural sector, increasing the service and industrial sectors • Foreign trade turnover in 1991 was USD 5,156.4 million, of which export was USD 2,087.1 million, in 2016 the figures were USD 333 billion and USD 167.83 billion respectively, up 60.4 times and 80 times respectively ,4 times compared to 1991 • In 30 years, Vietnam has attracted 310 billion USD of foreign investors, this capital has contributed greatly to the growth of Vietnam's economy ▪ Integration economics: Vietnam advocates active and proactive participation in the process of international economic integration Vietnam's economic relations with other countries and international organizations are increasingly expanding Up to now, Vietnam has established diplomatic relations with 185 countries, promoting economic, trade and investment relations with 224 markets on all continents Vietnam currently participates in many economic linkages at all three levels, bilateral, regional and global It is a member of the United Nations, the World Trade Organization, ASEAN, ASEM, APEC, and the World Bank World Monetary Fund, Asian Development Bank and many other international and regional organizations Vietnam's economic cooperation with major economies such as the US, EU, Japan, Russia, China, India is increasingly consolidated and expanded As of May 2016, Vietnam has signed 11 bilateral and multilateral FTAs (including the TPP, AFTA and FTA between ASEAN and partners China, Japan, Korea, India, and Australia) ▪ Average income and average household expenditure: On average per year in the period 2016-2020, income per capita per month in the whole country increased by 8.2% on average person month of 2020 in urban areas reached 5.6 million VND, nearly 1.6 times higher than rural areas (3.5 million VND) The richest group of households (the group consisting of the richest 20% of the population - group 5) has a natural income of person in month of 2020 reaching 9.1 million VND, times higher than that of the poorest group (group of 20% of the poor population) group – group 1), with an income of 1.1 million VND The region with the highest natural reserve per capita is the Southeast region (6.0 million VND per person per month), 2.2 times higher than the region with the lowest landscape landscape per capita, which is the Northern Midlands and Mountains (2.7 million USD) million VND per person per month) In 2020, the average household expenditure of the whole country is 2.89 million VND/person/month, up 13% compared to 2018 2020 is a year that people are severely affected by the Covid-19 epidemic -19, it can be seen that spending this year increased slower than the previous period (average spending in 2018 increased by 18% compared to 2016) Urban households have an average monthly expenditure of approximately 3.8 million VND, while rural households are only 2.4 million VND, the difference between the two areas is 1.6 times The Southeast region always ranks first in the country with the highest household spending (more than 3.9 million VND/person/month) The Northern Midlands and Mountainous region has the lowest expenditure (equivalent to 2.1 million VND/person/month) In addition, the increase in per capita spending per month in the Northern Midlands and TEAM - Mountains region in 2020 increased by only 5% compared to 2018 while the Southeast region increased by 17.3% compared to 2018 Average income and average household expenditure has continuously increased from 2016 to now, which encourages Vietnamese people to increase consumption This is a great opportunity for Redbull to increase revenue ▪ Statistics on beverage consumption in Vietnam: In Vietnam, the average Vietnamese consumes more than 23 liters of soft drinks/person/year According to the Association of Beer, Alcohol and Beverages, these product lines account for up to 85% of the country's production and consumption In the first half of 2015, the beverage industry grew by 6.3% year-onyear By 2020, this number will continue to grow strongly, reaching about 8.3-9.2 billion liters per year BMI (British Market Survey Group) forecasts that overall beverage sales will grow at an average rate of 14.2%, reaching VND 136,000 billion next year In particular, the consumption of non-alcoholic beverages in Vietnam will increase to 2.7 billion liters in 2017, corresponding to an average growth rate of 7% Energy drink market share in Vietnam accounts for about 18%, behind carbonated soft drinks and teas To be able to compete with other countries in the market, Redbull needs strategies to capture a larger market share in a potential market like Vietnam 4.3 Developments in science and technology In recent years, Vietnam's e-commerce market has been increasingly expanded and has now become a popular business method known to businesses and people The diversity of operating models, participants, operating processes and supply chains of goods and services with the support of Internet infrastructure and the application of modern technology has made e-commerce a pillar of the world important pillar in the development of the country's digital economy In the context of the COVID-19 epidemic, the e-commerce market has become more and more exciting, and the application of digital technology and building new distribution channels is becoming an effective solution for Vietnamese businesses to overcome difficulties brings new opportunities from the emerging market needs The buying habits of Vietnamese consumers in the domestic market are also gradually shifting from traditional purchases to online purchases through electronic means The results of the survey and survey by the Ministry of Industry and Trade show that, by 2020, Vietnam has 49.3 million people participating in online shopping (this data in 2016 only recorded 32.7 million people) The fact that people tend to switch to online shopping also creates a great opportunity and challenge for Redbull Require Redbull to increase investment and develop online sales channels to take advantage of this opportunity 4.4 Channels of distribution (macro analysis) While Viet Nam is an ideal place for manufacturing to many foreign companies, it is also a complicated market In fact, Vietnamese goods still dominate the retail system According to the report summarizing 10 years of implementation of the campaign "Vietnamese people give priority to Vietnamese goods' ' by the Ministry of Industry and Trade, the proportion of Vietnamese goods in domestic supermarkets has remained high, mostly over 80% Since the first COVID-19 infection recorded in early 2020, Vietnam has gone through several national and regional lockdowns Many retail outlets were closed except for grocers during these periods Therefore, instead of traditional retailers, consumers often opted for modern trade channels or e-commerce when shopping due to their concerns for hygiene and safety At the same time, the spending intention among consumers decreased considerably in many product categories apart from food and beverages and healthcare items ▪ Retailers The total retail sales of consumer goods and services over 2021 is estimated at VND 6,330 billion, achieved 100% of the plan and increased 11.7% compared to 2020 Generally, Vietnam does flaunt a wide array of retail formats, each at a different level of evolution and development, which follows main structures: TEAM - • Number of retailers The pandemic has not recovered to pre-epidemic levels in 2021 due to psychology People are still afraid of outside consumption, thereby affecting FMCG consumers and physical retail stores However, retail channels are still affirming an important role in the distribution of goods, the connection between production and consumption In Vietnam, foreign brands had a larger share of convenient stores while domestic brands dominated the commercial centres, supermarkets, and minimarkets sector Modern retailers have become more important in the overall retail landscape of Vietnam In recent years, the number of modern retail channels, such as supermarkets and convenience stores, has been increasing and dominating the country • Typical size of retail outlets The dominant group of fast-moving consumer goods and supermarkets honoured companies named: - Central Retail Vietnam Group, - Vincommerce General Trading Service Joint Stock Company, - Ho Chi Minh City Trade Cooperative Union, - MM Mega Market (Vietnam), - Aeon Vietnam Co., - Lotte Vietnam Trade Centre Joint Stock Company, - Saigon Trade Corporation - TNHH MTV, - Tan Son Nhat Airport Services Joint Stock Company (SASCO), - Lien Pacific Import-Export Co - Hanoi Trade Corporation Analysts predict that, by 2030, large-scale retail, especially such "all-in-one" destination shopping malls, will dominate Vietnam’s market • Methods of operation (cash/credit) The vast majority of transactions in Vietnam are conducted in cash at present, though there is a strong ongoing push towards cashless payment methods An estimated 30% of the Vietnamese population currently have formal bank accounts Credit and debit cards transactions have increased greatly in recent years, but still constitute a minority of transactions While smartphone penetration is high, mobile payment systems are not currently popular For business to business payments, bank drafts of electronic fund transfers are often the easiest option as companies may be reluctant to use letters of credit due to collateral requirements and additional costs • Scale of operation (large/small) The Vietnamese government continues to encourage the formation of large-scale corporations in retail, aiming to strengthen the linkage between production zones and consumer markets Total revenue from retail sales and services would average 13-13.5% By 2030, revenue from e-commerce is set to make up 10.5-11% of total retail sales and services of the economy, or an expansion of 20-21%; 40-45% of small and medium enterprises operating in trade would take part in major domestic and foreign e-commerce platforms ▪ Wholesale middlemen In Viet Nam,the wholesale middlemen will buy the products from the retail company and then sell them to customers through a third party or directly They earn their profits from the difference between the buying and selling prices A distributor is a cost-effective method and one of the easiest ways to enter a market However, for a market like Vietnam's major retail markets to spread across the country, a retail company has to engage with multiple distributors or with one distributor having a national presence • Number and size At present, Viet Nam has 83 wholesale markets They account for almost per cent of all Vietnamese markets On average, wholesale markets saw average development of about 4.5 per cent between 2016 and 2019 Some of them have been built well and modernly refurbished like the Bình Điền and Hóc Mơn markets in HCM City TEAM - 10 Most wholesale markets are located in the countryside’s rural areas, heavily populated areas, transport focal points and other concentrated agriculture production areas However, the main products sold in wholesale markets are farm products There aren’t many wholesale markets in Việt Nam and their quality is not up to demands Most of the markets are small and outdated, and lacking accompanying services like financial services, ensuring food safety, origin tracing or fire safety According to the Ministry of Industry and Trade, the construction of a market in Việt Nam costs around VNĐ 40 billion (US$1.8 million) Such a sum is high, that’s why it is not easy to mobilize the investment from either the State budget or private companies To encourage private engagement in the development of markets, policies such as tax or credit incentives or land preferential policies are certainly needed • Method of operation (cash/credit) In Vietnam, distributors receive money mostly through the banking system In some places, they use unstable formulas such as 60% on order confirmation and 40% on completion of shipping procedures and submission of shipping documents Besides, distributors in Vietnam now place more emphasis on the use of trade credit to maintain their competitiveness and gain market share This is a logical reaction to the current more challenging business and trade environment • Import/export agents A Vietnamese agent sells a foreign supplier’s goods in Vietnam for commission The specific responsibilities of a Vietnamese agent depend on the agency agreement between the agent and the foreign supplier The risk of nonpayment rests with the foreign supplier Vietnam’s Trade Law recognizes the right of foreign companies to appoint agents if the Vietnamese agent’s registered scope of business includes such activities • Warehousing Following Decree No.163/ND-CP, foreign investors will now be allowed to set up logistics services companies from February 20, 2018, in Vietnam The establishment of new companies will be subjected to conditions on ownership and services The services under the decree have been divided into 16 types, including Wholesale and retail support services (including the management of warehousing, collection, assembly, sorting and delivery), delivery services, and Warehousing services (all modes of transport) • Penetration of urban and rural markets It is estimated that the monthly cost of fast moving consumer goods (FMCG) in rural areas will increase by per cent on average annually from 2020-2025, faster than in class-1 urban areas (4 percent) Compared to class-1 urban areas, over 70 per cent of industries still have the opportunity to boost the number of consumers Consumers in rural areas are very proficient in using technology products and digital services Up to 92 per cent of rural residents have used smartphones, a sharp increase compared to years ago with 84 per cent Not only the number of people, daily internet usage continues to increase (149 minutes) and nearly double TV time (87 minutes) Among consumers watching TV, up to 47 per cent use phones in parallel to chat or access social networks Nevertheless, according to a consumer survey conducted in Vietnam in 2021, 51 percent of respondents living in urban cities indicated that they preferred modern trade channels Meanwhile, 11 percent of them stated their preferences for e-Commerce and online channels Vietnam e-commerce specifically, is expected to expand from 0.5 percent to 2.2 percent share in 2025 coupled with the rise of digitization 4.5 Media As of September 2018, the total online media advertising spending amounted to approximately 1.2 billion U.S dollars in Vietnam Vietnam's advertising market accounted for a small share in Asia compared to other markets, given that the ad spending in the Asia Pacific region reached about 194.48 billion U.S dollars in the same year For the past years, advertising spending in Vietnam has been highest for television and newspapers Television advertising is highly used by consumer goods brands In comparison to other Asia Pacific countries, the cost of a 30-second commercial during primetime in Vietnam is relatively low TV advertising has been growing constantly in Vietnam although TV ad spend growth in the Asia Pacific region has decreased overall However, newspaper and magazine advertising spending remained stagnant Notably, outdoor and internet advertising have increased significantly TEAM - 11 Despite the strong digital presence, the popularity of traditional media has not diminished in Vietnam With stiff competition from social media in the advertising sector, traditional media outlets in Vietnam have seen a decline in ad revenue in 2021 This is compounded by the economic difficulties due to the impact of COVID-19 At the National Press Conference in December 2021, some print media outlets reported a 70% drop in revenue, while the overall profits of the broadcast sector saw an 8% dip Media revenues, which include state funding, donations, advertising and publication, are falling, requiring news agencies to adapt to the situation ▪ Costs Television: television remains a powerful form of mass media – the number of television channels increased by 18% to 87 channels last year and more than in 10 people watch television daily, based on figures in the Kantar Media TNS Media Vietnam Report The average cost to send an advertising message on television to 1,000 viewers in Vietnam's six main cities, including HCMC, Hanoi, Danang, Haiphong, Nha Trang and Can Tho, is US$15 Radio: the average radio ad expenditure is approximately million dong per minute according to website radiovietnam.com.vn Vietnam's national radio station, now called the Voice of Vietnam, strives to offer diverse, high-quality programming in every aspect of mass media It broadcasts on many channels, repeated on medium wave (MW) AM, FM and shortwave (SW) AM bands throughout Vietnam and the rest of the world: - VOV1 (MW, SW and FM) - news, current affairs and music - VOV2 (MW, SW and FM) - cultural and social programs - VOV3 (MW, SW and FM) - music & entertainment - … Print: Vietnamese people spend a daily average of more than hours on the internet, while more than out of 10 internet users read a print newspaper or magazine in the prior month The respective costs for print newspapers and magazines are US$18 and US$36 Newspaper: more than 350 newspapers, magazines, and journals are printed in Vietnam VNexpress.net ranked number and is the most visited News and Media website in Vietnam in November 2021, followed by 24h.com.vn as the runner up, and kenh14.vn ranking at 3rd place as the leaders of the News and Media websites in Vietnam Closing off the top News and Media websites ranking list in Vietnam are zingnews.vn ranked in 4th place, and tuoitre.vn at the last position for November 2021 Magazines and journals: the estimated rate for ads in the magazine is $3,875.00 In Vietnam's media landscape, printed newspaper circulation has fallen steadily since the advent of the news portals Online newspapers must change their mindset and methods to catch up with the readers’ demand, Lu Pho An said in an article posted on the online Nguoi Lam Bao newspaper He believed that the paid content will help readers become more serious and demanding, therefore, forming a new reading culture - Press Popular press releases in Viet Nam include: - Nhan Dan - Communist Party daily, English-language pages - Vietnam News - state-run, English-language daily - Tuoi Tre - daily, published by Communist Youth Union, English-language website - Thanh Nien - daily, published by Vietnam Youth Federation - VTV - Vietnam Television Internet: According to the Vietnam Digital Report 2021 by London-based media firm WeAreSocial released earlier this year, the total online advertising spending in Vietnam in 2020 reached $290 million, including more than $115 million on digital search ads In a country of 96.9 million people, there is a 70% internet penetration rate – the number of internet users in the country increased by 10% last year There are also 145.8 million mobile phone connections and 65 million active social media users as of January 2020, according to the We Are Social Vietnam Report Additionally, the Vietnamese government’s new initiative on cross-border advertisement on digital platforms like YouTube, Google, and Facebook is deemed a step up from previous legislation, particularly regarding censorship and tax obligations ▪ Agency assistance Mainstream ad agencies in Viet Nam • Leading.vn What they - Leading is a Ho Chi Minh City-based professional Digital Marketing Agency We specialize in SEO, PPC, Social Media Marketing, and Content Marketing: Digital strategy, Web design, Web development, SEO (Search Engine Optimization), Paid media, Copywriting TEAM - 12 Their focus: - The agency mainly works with SMEs companies and focus mostly on Consumer products & services (40%), next is arts, entertainment & music accounts for 20%, the others segment is business services - Competitive advantages: Awards: Best in Search - TopSEOs 2020, Best Digital Marketing Agency Vietnam; Partner of high-traffic websites and press sites in various fields; Agencies partnered: Primal Thailand, First Page Digital Singapore, Remodify • Graphic wise What they - Branding and design (Logo design, Packaging design, Website design), Digital marketing (UI/UX SEO), Research and analysis (in-depth research), Strategize and plan (roadmap for successful branding and marketing campaigns.) What they focus: Hospitality, Retail goods, Entertainment, medical, professional, financial • Influencer & Digital Marketing in Asia What they - Influencer Marketing, Digital Marketing, Models and Celebrities Their focus - International companies from a wide range of industries: applications, games, e-commerce, beauty, music, electronics, sports, food, blockchain - The competitive advantages: Creative Agency, Top Influencers, Global Team - Local Resources, Flexibility, Experience 4.6 Executive summary The share of foreign invested enterprises in Vietnam’s economy has rapidly grown in the last decade Investor friendly policies have led to the easing of business conditions and entry of foreign players especially from Southeast Asia, Japan, and South Korea This has allowed foreign firms to flourish in Vietnam in almost all major sectors including retail, where most domestic firms and State owned enterprises continue to suffer from mismanagement, lack of funds, and access to global supply chains In addition to the entry of foreign players in retail sector, the rise in consumer spending, lifestyle changes and urbanization has made Vietnam one of the most attractive retail markets in the world Retail spending continues to grow not only in the traditional and modern retail segments, but also in ecommerce, which is largely driven by the rise in the number of smartphone users as well as internet penetration The fast food and apparel sector has attracted major international retailers in the last 10 years The sector has also seen the emergence of domestic players that are vying for a share in the consumer market Going forward, as the market gets more competitive, existing brands in the market will continue to expand, while late entrants will find it hard to establish a presence MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS 5.1 The product ▪ Evaluate the product as an innovation as it is perceived by the intended market • Relative advantage: Red Bull when entering the Vietnam market will be the first product of the energy drink market Because it is an energy drink product, Red Bull offers products that are completely different from those already present in Vietnam, they provide energy and help users become more spiritual Red Bull brought a completely new look with the main yellow tone and cows rushing into each other, making the product more attractive to users at that time • Compatibility: Red Bull was originally inspired by Thai street drinks Vietnam and Thailand both have the same geographical area as a Southeast Asian country, so they are compatible with each other in terms of taste and preferences • Trialability: Vietnamese consumers are quite fond of imported products because they have a foreigner mentality ▪ Major problems and resistances to product acceptance based on the preceding evaluation: Red Bull's entry into the Vietnamese market will have advantages because: it will be a pioneer in the energy drink segment, providing a new solution for consumers about non-alcoholic beverages, even though it is a brand name foreign countries, but with the flavor of the same country and region, there will be a certain compatibility Along with that is the TEAM - 13 difficulty in terms of use when having to educate customers that their products are really different and superior to other products 5.2 The market ▪ Describe the market(s) in which the product is to be sold: • Geographical region(s): Red Bull will be distributed nationwide because the product itself is in the FMCG segment with low and affordable prices for consumers It will be divided into main areas: city and countryside • Forms of transportation and communication available in that (those) region(s): In urban or rural areas, the main form of delivery is still by truck In specific areas such as mountainous areas, motorbikes will be used to bring products from agents to retailers, this also applies to western provinces with many canals, the form of transportation is boat • Consumer buying habits: There are many factors affecting their consumption such as: habits, popularity of brands, designs, advertising, Vietnamese people often buy products according to their habits or products that they buy already experienced rather than new products Regarding brands, large companies as well as multinational corporations are always the first choice of Vietnamese users Products with eye-catching colors are often favored by Vietnamese users along with beautiful designs Vietnamese users are also easily influenced by media and advertising channels, which drives their buying behavior greatly • Distribution of the product: Red bull has distribution channels that are: traditional, modern, e-commerce In which, the main distribution channel is: traditional marketing channel - products will be delivered to consumers through sales intermediaries, i.e retailers and agents The modern Red Bull channel is currently appearing in big supermarkets in Vietnam along with convenience store chains, besides it also appears at restaurants, bars, The E-commerce channel in Vietnam was gradually developed during the Covid-19 pandemic • Advertising and promotion − Advertising media usually used to reach your target market(s): In Vietnam, the FMCG industry mainly uses TVCs to advertise on television, along with sponsoring television programs Recently, brands with young consumer groups are gradually turning to social networking sites with short videos with content that attracts at first sight − Sales promotions customarily used (sampling, coupons, etc.): Sales promotions that the FMCG industry often uses in Vietnam are: giving free samples of new products when selling old products, gifts in kind (erasers, pens, backpacks, ), coupons buy products, discount products when there is an event • Pricing strategy: FMCG companies in Vietnam all use penetration pricing strategy to be able to reach customer groups on a daily basis from the very beginning In their distribution channel, they also have separate prices for each channel and channel members For wholesalers, modern channels, and B2B partners they often have a wholesale pricing policy and have a discount for each channel ▪ Compare and contrast your product and the competition's product(s) • Competitors' product(s) − Brand name: In Vietnam, the two big rivals that Red Bull has to face are Sting of Pepsi and Number One of Tan Hiep Phat Company − Features o Sting energy drink gives you an energy boost to charge-up and keep you going It also invigorates your taste buds with its refreshingly delicious flavor Sting has the kick of Caffeine, Ginseng and B Vitamins with amazingly refreshing flavors o Number energy drink is made from a combination of vitamin B3, taurine, inositol and caffeine to help the consumer quickly increase their energy levels and continue to perform at the highest levels − Package: o Number energy drink has a packaging with mainly yellow tones and stands out as number in pouring color to be able to enhance its leading position, the images on the packaging are also images of motorsports that make up the brand look at strength and energy It comes in 350ml PET bottles, 240ml glass bottles and 240ml cans giving consumers maximum choice TEAM - 14 o The brand also applies a strategy of “extending the line” to packaging with distinct flavors Sting's three popular packaging types are glass bottles, tall plastic bottles, and in the form of tin cans for convenient use The packaging is mainly red corrugated iron to highlight the product • Competitors' prices: FMCG companies in Vietnam all have the same pricing strategy, which is penetration pricing, in addition, they all have different price lists for each member for the distribution channel The price of Sting to consumers is 11,000 VND, while Number One is 10,000 VND • Competitors' promotion and advertising methods:As mentioned above, the FMCG industry is still relying on television ads, with the current trend of brands looking to other social platforms − The most prominent programs of Sting's communication strategy are the MV "Vietnam will win" and the creative photo contest "Trust to win" with limited edition cans In the New Year 2021, Sting collaborated with Karik and Phan Manh Quynh to release the music video advertising Tet "Men don't talk" Overcoming other brands, this music video of Sting brought in an impressive number of 13 million views after just over half a month of its release − Number One's promotional videos are currently at a stable level and have not yet made a breakthrough However, the promotional videos all focus on the content given from the beginning as "increasing strength, instant alertness" to make consumers have a unified view of the brand • Competitors' distribution channels: Similar to Red Bull, the distribution channels of Sting and Number One both have channels such as: traditional, modern, direct Details will be provided in the following section ▪ Market size • Estimated industry sales for the planning year: It is estimated that by 2022, the entire energy drinks market in Vietnam has a capacity of 4,111,641,600,000 VND with an average growth rate of 4% per year • Estimated sales for your company for the planning year: With an estimate of 45% market share for the desired market, the revenue will be 1,850,238,720,000 VND 5.3 Executive summary Vietnam's energy drink market has still had many new competitors entering the industry in the past few years, proving that this is still a market with great potential for exploitation However, making you stand out is one of the challenges when you are still in this industry In addition, Vietnamese consumers are increasingly interested in health and nutrition issues, so the use of products containing a lot of sugar is being considered PRELIMINARY MARKETING PLAN 6.1 The marketing plans ▪ Marketing objectives: • Target market Target customers: Red Bull target customer segment represent busy individuals who are overly active in their personal and professional lives and who have are fascinated by extreme sports Demographic AGE From 15 to 45 GENDER All gender INCOME Middle class to High Class FAMYLY LIFE CYCLE Single, Honeymooners, Parenthood Geographic LOCATION Major provinces throughout Vietnam DENSITY Urban and Rural Behavior USER STATUS First User, Regular User, Ex-User BENEFIT SOUGHT Enhanced performance, Sense of belonging TEAM - 15 LOYAL STATUS Hard-core loyal, Split loyal Psychographic LIFE STYLE Active, sporting, Explorer, Reformer PERSONALITIES Positive attitude • Sales and profit forecast years 1-5 Year Projection Potential customer Vietnam Population 100% 97,340,000 Population 15-45 40% 38,936,000 Product penetration 20% 7,787,200 Potential market size Frequency/year 48 Market size 373,785,600 (units) Potential Market share & Sales Market share 45% Unit price VND 11,000 Potential sales Sell out in unit 168,203,520 Sell out in value VND 1,850,238,720,000 $ 80,445,162 YEAR MARKET PROJECTION Year Market size 373,785,600 388,737,024 4% 404,286,505 4% Market growth Year Market share Sell out in unit Sell out in value 45.0% ▪ 420,457,965 4% YEAR BUSINESS AMBITION 47.5% 50.0% 437,276,284 4% 52.5% 55.0% 168,203,520 172,408,608 176,613,696 180,818,784 185,023,872 1,850,238,720,000 1,896,494,688,00 6% 1,942,750,656,000 1,989,006,624,000 2,035,262,592,000 5% 5% 5% Growth Year Sell out in value Profit YEARS PROFIT FORECAST 1,850,238,720,000 1,896,494,688,000 1,942,750,656,000 1,989,006,624,000 2,035,262,592,000 925,119,360,000 948,247,344,000 971,375,328,000 994,503,312,000 1,017,631,296,000 Swot analysis STRENGTHS Red Bull’s biggest asset is its powerful brand The name “Red Bull” is synonymous with energy drinks the world around Have a steady customer base Strong financial resource OPPORTUNITIES WEAKNESSES Limited product range High price tag Focused only on one market THREATS TEAM - 16 The trend of consumers switching to using energy drinks and tea instead of carbonated soft drinks With the development of new flavors, the corporation can maintain or increase its market share ▪ More and more low-priced competitors appear The adoption of new health restrictions that prohibit the sale of energy drinks or dramatically diminish their profitability is perhaps the most frightening threat to Red Bull Tendency to switch for a healthier lifestyle Product • Core component − Product Platform: Energy Drinks − Design features: − Functional Features: Drinks for refreshment, awake and boas energy of the consumer • Packaging component: − Trademark: Red Bull’s iconic symmetrical image of fighting bulls suggests power and endurance and is now often identified with extreme sports Indeed, the product is marketed towards young athletes in need of extra energy while practicing their sport − Brand name: Red Bull - The red bull, such as, energy drinks enjoy a strong imagery and appeal amongst consumers, name symbolizes quality, health and great taste − Price: o Retail Price: 10.000 – 12.000 VNĐ / a can o Wholesale Price: 200.000 VNĐ/ pack of 24 cans − Package: Red Bull Energy Drink is filled into 100% recyclable aluminum cans Support services component − Warranty: 100% of products are checked for quality, size and color − Repair and Maintenance: Return and receive a new product if the product has a defect from the manufacturer ▪ Promotion mix • Advertising Objectives: helps to improve the product's image, credibility, and visibility Red Bull uses all accessible media outlets, including social media television, radio, print, and the internet In other words, the corporation concentrates on the media channels via which it communicates with its core target marketyoung people Through all activities below, we want customers to recall their brand every time they see or hear energy drink thus increasing their customer base Hence, this covers the marketing mix of Red Bull − Social media o Facebook: Red Bull's Facebook and Instagram posts are a mix of video and images However, behind every image, there is a story to be told, and customers can always expect something really interesting and exciting from Red Bull when it comes to digital content o Youtube: This is the social media channel where Red Bull has something really special to share with their fans Currently more than 20 thousand subscribers are enjoying daily uploads o Tiktok: Channel for short videos that make customers remember RedBull’s brand − Event and sport Sponsoring: sponsoring is also incorporated into the company's marketing mix Sponsorship helps to improve the product's image, credibility, and visibility On the one side, Red Bull sponsors the athlete target market in the activities like free climbing, jogging, cycling and motorsports or fun sports, but always where Red Bull is required This method helps Red Bull by increasing the visibility of the brand (logos and stickers) and narrowing the product's target market • Red Bull, on the other hand, sponsors events The corporation either creates its own events (for example, Red Bull Music Festival ), where the entire event is sponsored by Red Bull, or promotes other events (i.e Speed Cycling Vietnam Championship) Event sponsorship draws people's attention to the product and bonds them with it Message: that this energy drink helps you to escape by “giving you wings” Activities Costs Details Facebook, Instagram 600,000 people reachable on Facebook 220,000,000 and Instagram in months Social media YouTube 270,000,000 300,000 viewers (900đ/1views) Tiktok 138,000,000 600,000 viewers (230đ/1 views) Sponsoring 1,500,000,000 Sports Event TEAM - 17 Event and Sports Sponsoring Red bull’s Event 2,000,000,000 Music festival, Speed Cycling Vietnam Championship • Sales Promotion: − Sampling: this approaches have been well tested and proven in various markets Red Bull's main goal is to energize the Redbull’s samples at the right place and right moment, where it finds its target market (High School, University, Office, Stadium,…) Driving, studying, working night shifts, and playing sports are all examples of how it is used Red Bull adheres to the basic sample rules, which are as follows: ✓ Always explain the benefits of the product ✓ It must always be cooled ✓ Giving the sample to right target customer − Selling two or more products at a special price: Draws consumers to a specific retail stores and influences them to purchase more product to get a special price This method used to entice customers to purchase more product than they really want − Coupon online: a certain code of several characters (alphanumeric, or both) used in both online and offline payments When buying online, you use this code in the discount code area (if any) Link with Momo wallet, ZaloPay to give customers coupon when paying via their e-wallet Method Sampling Coupon online Cost (VNĐ) Note 250,000,000 20 universities, 100 high school, 10 densely areas 500,000,000 500.000 coupons for 500.000 target customers on Momo, Zalopay Each coupon is worth 10,000 VND when customers buy a pack of Redbull (6 cans) ▪ Distribution: • Port selection − Due to extensive coastline, long and thin shape and three different regions of the country, the combination of shipping to the hubs in each region and road transport are the most commonly used logistical methods: − North region: Hai Phong, under 100km from Hanoi A deep-water container terminal opened at the port in 2018, hence avoiding the need for transhipment via Hong Kong or Singapore − Central region: Da Nang, Quy Nhon and Vung Tau − South region: the network of ports around Ho Chi Minh City, which together create the 5th largest port in ASEAN, and account for around 2/3 of port shipments in Vietnam Notably ports include Cai Mep (deep water) and Cat Lai • Mode selection: Advantages/disadvantages of each mode − Railroads: Vietnam’s rail network is limited – just 200km at present – and hence accounts for only a very small proportion of freight transport The Viet Nam Railway Cooperation is the sole operator of services in the country There are plans to further develop the rail network; but at present is generally not interesting due to its small size and slow travel times − Air carriers: Air freight accounts for around ¼ of the value of goods traded into and out of Vietnam, though air freight is growing at around 9% per year While Vietnam has over 20 airports, only half of these are international The main airports for air cargo freight are: o Noi Bai International Airport, Hanoi o Tan Son Nhat International Airport, Ho Chi Minh City − There are also various plans for further developing airports in the country Most notably, the above two airports are being expanded, and a new airport Long Thanh International Airport is being built 30km from Ho Chi Minh City Vietnam has over 42,000 km of inland waterways, mostly in the Mekong and Red River deltas, which have the potential to increase connectivity and reduce costs for the transportation sector Waterway transport therefore accounts for around 1/5 of freight transport However, a limited percentage of the waterway network is under formal management; and transport down waterways is very dependent on climatic conditions • Road Freight: road freight is the most important method of transporting goods in Vietnam, accounting for around ¾ of all freight transport The road network is extensive – over 250 000 km – however, under 1/5 of this is paved, and 2/5 can be considered to be in poor condition The poor condition of the road network can create challenges with freight transport ▪ Channels of distribution (micro analysis) TEAM - 18 First of all, our team recommends the safest way to enter into a new market for Red Bull by using a relevant low risk entry mode: Licensing or Joint Ventures However, after becoming familiar with the local situation in Vietnam and with the long-term experiences, the company should try high risk entry mode Specifically, Red Bull should mainly take the way of investing directly in the foreign markets, just in order to have a tight control on every store According to Hill (2007), this is the so-called “wholly owned subsidiary” entry mode In Hill’s opinion, such entry mode cannot help a firm reduce the risk of losing control over the competence, but also can make it have tight control over operations Some other entry modes for Red Bull are licensing and joint ventures • The channels According to EVBN – The retail channel report in Vietnam, the distribution of imported products in Vietnam generally follows one of the four models below: Exporters => Importers/Distributors => Big Modern Retailers Exporters => Importers/Distributors => Wholesalers => Retailers Exporters => Local Agent => Importers/Distributors/Wholesalers => Retailers Exporters => Big Modern Retailers From our team’s personal perspective, Red Bull should follow the first two models because they involve fewer intermediaries Indeed, relying on importers/distributors presents two more advantages for overseas exporters: They not need to be concerned with the import procedures, and they can rely on the network of their Vietnamese partners Two pictures below can express our team’s designs for Red Bull’s possible distribution channel in Viet Nam • Retailers Red Bull should invest in an Intensive distribution channel, which can cover all these types of retailers: Types of retailers Reasons to choose Small grocery the most popular in Vietnam for the purchase of F&B products - key importance in rural areas Supermarkets hypermarkets & During covid 19, the popularity of these channels in urban areas has been driven by the need for convenience and increased interest in food safety There are a large number of super/hypermarket chains in Vietnam – both local and foreign => A high level of fragmentation Big chains: Big C, Co.opmart, Auchan, Vingroup and AEON Convenience stores Foreign chains hold a high market share amongst convenience stores Big chains: Bach Hoa Xanh, Circle K, Co-op, Family Mart and B’s Mart eCommerce 30% of consumers purchase grocery shopping through e-commerce channels at least once a week Hotels, restaurants, There has been increasing interest in restaurants serving food from specific foreign countries cafés and Gyms (e.g., Korea and Japan) The chain for food and beverage imports intended for food service passes through importers and/or wholesalers before reaching the food service industry itself That said, Red Bull TEAM - 19 should have a direct tie up with larger food service operators such as Lotteria, Jollibee and King BBQ • Import/export agents Importers generally play an important role in helping imported foods reach shop shelves in Vietnam, as they will deal with distribution to wholesalers and retailers That said, some supermarket chains indeed a tie-up with larger, more prestigious retailers can be a good way of entering the market While it may be possible to find importers with a strong network throughout the whole country, many importers are based in either Hanoi or Ho Chi Minh City, and will focus primarily on the north or south geographical regions respectively Among these two, Ho Chi Minh City may show slightly more potential due to the slightly greater presence of modern retails stores and the larger foreign population Alternatively, it may be possible to find an importer to work within one of the major cities and appoint a local agent for other major cities (including e.g., the third largest city, Da Nang) ▪ Price determination Cost of goods sold – COGS: Original cost = Product cost + Other incurred costs (if any) Currently, the original price of a shipment or a can of Red Bull is not known exactly But the team will assume based on the retail price in the Vietnamese market and the following formula: Retail price = [Original price/capital + (Original price X% desired profit)] For example, a Red Bull product has a retail price of 10,000 VND at grocery stores, we want to make a profit of 100%, then we will have the original price: 5,000 VND In addition, the combination of different modes of transport (multimodal transport) to combine the advantages of each mode of transport is also not common in Vietnam For these reasons, it is natural that the total logistics costs (mostly transportation costs) are very high This situation results in very different retail prices across the country Currently the price of a Red Bull varies from country to country In Vietnam, a can of Red Bull costs about 10,000 VND However, a remarkable information shared on social networks, citing the Vietnam Sales and Marketing Congress, will surprise many people Accordingly, in each can of Red Bull, the most expensive cost is advertising, accounting for 59.8%; distribution and display costs accounted for 15%; transportation and collection costs accounted for 10.5%; The cost of human resource management accounted for 10.4% and the smallest cost of materials was only 4.3% Although the above information is for reference only, these figures are completely understandable for the FMCG industry in general and for a well-known company that spends on marketing and brand promotion like Red Bull in particular Logistics costs in Vietnam are much higher than in the world In the ASEAN region, some countries such as Thailand, Singapore, etc have reduced logistics costs, while Vietnam's costs are still high, a barrier to competitiveness According to data of the World Bank (WB), logistics costs (transportation, storage, customs clearance…) in Vietnam are about 20.9-25% of GDP Meanwhile, the average cost accounts for 12% of the world's gross domestic product In which, transportation costs account for about 60%, a high cost compared to developed countries This cost is higher than Thailand 6%, Malaysia 12%, and times higher than Singapore According to the International Monetary Fund (IMF) In the US economy, logistics costs account for 9.9% of the country's GDP ($921 billion in 2000) Regarding the targe of customs fees, fees of goods and vehicles in transit specifically as follows: (Attached to Circular No 274/2016/TT-BTC dated November 14, 2016 of the Minister of Finance) • Customs fee for declaration registration: 20,000 VND/declaration • Customs fee for inspection, supervision or suspension of customs procedures for exported and imported goods with claims for protection of intellectual property rights: 200,000 VND / 01 application • Transit fee for goods: 200,000 VND/declaration • Fees for vehicles in transit by road (including: cars, tractors, tractors): 200,000 VND/vehicle • Fees for means of transit by waterway (including: ships, canoes, tractors, barges): 500,000 VND/vehicle TEAM - 20 Accordingly, the fee to be paid when declaring the customs declaration for customs clearance is 200,000 VND / declaration, on the other hand, Vietnam's law does not have a regulation on customs tax, maybe this is an import tax, value added tax on goods In addition, in Vietnam, last year, the Ministry of Finance announced a draft amendment to the Law on Special Consumption Tax (SCT), which proposed to impose a 10% SCT on sugary soft drinks, exclude dairy products to protect public health and increase the budget It is the policies on taxes and costs that are still shifting that have had a strong impact on the energy drink industry in general and Red Bull products in particular Consumers when buying a can of Red Bull have to pay much higher than the actual value, because those are brand fees, marketing costs, shipping costs, export taxes,… 6.1 Methods of payment The language used in international payments is mainly English and dispute settlement is mainly by international law In international payments, cash is almost never used directly, but rather by means of payment We will recommend the following payment methods: 6.2 Proforma financial statements and budgets Activities Social media Event and Sports Sponsoring Method Sampling Coupon online Facebook, Instagram Costs 220,000,000 Details 600,000 people reachable on Facebook and Instagram in months YouTube Tiktok Sponsoring 270,000,000 300,000 viewers (900đ/1views) 138,000,000 600,000 viewers (230đ/1 views) 1,500,000,000 Sports Event Red bull’s Event 2,000,000,000 Music festival, Speed Cycling Vietnam Championship Cost (VNĐ) 250,000,000 500,000,000 Note 20 universities, 100 high school, 10 densely areas 500.000 coupons for 500.000 target customers on Momo, Zalopay Each coupon is worth 10,000 VND when customers buy a pack of Redbull (6 cans) 4,878,000,000 VNĐ Total cost SOURCES OF INFORMATION https://vietnamembassy-usa.org/vi/node/1886 https://vi.wikipedia.org/wiki/L%E1%BB%8Bch_s%E1%BB%AD_Vi%E1%BB%87t_Nam https://en.wikipedia.org/wiki/Culture_of_Vietnam#Language https://vi.wikipedia.org/wiki/V%C4%83n_h%C3%B3a_Vi%E1%BB%87t_Nam https://ethnomed.org/culture/vietnamese/ https://www.macrotrends.net/countries/VNM/vietnam/literacy-rate https://tapchikhplvn.hcmulaw.edu.vn/ https://giaoduc.net.vn/giao-duc-24h/giao-duc-tieu-hoc-viet-nam-dung-dau-cac-nuoc-dong-nam-a-post214485.gd https://nhandan.vn/giaoduc-infographic/infographic-nam-hoc-2018-2019-ca-nuoc-co-hon-23-5-trieu-hoc-sinh-sinhvien-334679/ https://www.ilo.org/hanoi/Areasofwork/social-security/lang en/index.htm https://danso.org/viet-nam/ TEAM - 21 http://www.dankinhte.vn/thuc-trang-khoa-hoc-cong-nghe-viet-nam/ https://en.wikipedia.org/wiki/Television_and_mass_media_in_Vietnam https://www.trade.gov/country-commercial-guides/vietnam-distribution-and-sales-channels https://tradingeconomics.com/vietnam/consumer-spending https://thoibaotaichinhvietnam.vn/tong-muc-ban-le-hang-hoa-va-doanh-thu-dich-vu-tieu-dung-11-thang-nam-202196312.html https://www.slideshare.net/asiaplus_inc/vietnam-retail-store-statistic-2021 https://thanhnien.vn/tp-hcm-co-dien-tich-ban-le-nhieu-nhat-viet-nam-post865764.html https://www.ifc.org/wps/wcm/connect/ba7e2158-1a68-4838-8146763b24fea333/EMcommerce.pdf?MOD=AJPERES&CVID=kOyOayz https://www.slideshare.net/SrikiranCRai1/economic-analysis-of-peoples-republic-of-china-for-the-sale-of-tendercoconut-water https://radiovietnam.com.vn/bang-gia.html https://www.vietnam-briefing.com/news/port-infrastructure-vietnam-3-hubs-for-importers-exporters.html/ https://www.netherlandsworldwide.nl/countries/vietnam/doing-business/key-sectors/logistics https://www.statista.com/outlook/cmo/non-alcoholic-drinks/soft-drinks/vietnam#revenue https://www.diva-portal.org/smash/g https://www2.deloitte.com/content/dam/Deloitte/vn/Documents/consumerbusiness/vn-cb-vietnam-consumer-retail2019.pd https://a4nh.cgiar.org/2018/05/09/markets-in-vietnam-asnapshot-of-transforming-food-systems https://link.springer.com/article/10.1007/s10460-015-9645-4 https://journals.sagepub.com/doi/full/10.1177/0956247819858019 https://www.dhl-eucustoms.com/vi-VN/duty-and-tax-fundamentals.html https://vi.wikipedia.org/wiki/Thu%E1%BA%BF_nh%E1%BA%ADp_kh%E1%BA%A9u TEAM - 22 ... Bull in Vietnam has always kept its traditional taste until now In the international market, Red Bull has main products: Red Bull energy drink, Red Bull Sugar free, Red Bull energy shot and Red. .. channels, for example bars and health clubs  Marketing innovation: Red Bull has used creative onsite promotions instead of mass marketing approach of the incumbents TEAM - INTRODUCTION TO RED BULL. .. high price tag for their primary offering Opportunities for Red Bull include emerging markets, new product lines, and healthy alternatives As in all industries, a major threat for Red Bull is competition