MARKETING & COMMUNICATION PLAN For G7 2in1 Instant Coffee

dfdfdf TR NG I HOC M TP HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL ECONOMICS & MANAGEMENT TA THI NINH THU - BIEN THI HANG NGA MARKETING & COMMUNICATION PLAN For G7 in1 Instant Coffee MASTER PROJECT MASTER IN MARKETING & ADVERTISING Ho Chi Minh City (2013) dfdfdf TR NG I HOC M TP HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL ECONOMICS & MANAGEMENT TA THI NINH THU - BIEN THI HANG NGA MARKETING & COMMUNICATION PLAN For G7 in1 Instant Coffee MASTER PROJECT MASTER IN MARKETING & ADVERTISING Tutor’s name: SERGE BYWALSKI Ho Chi Minh City (2013) DISCLAIMER Final thesis on “Marketing & Communication Plan for G7 2in1 Instant coffee” is our research & insight with reference from the sources that was indicated in this thesis In present this thesis in partial fulfillment of the requirement for an Master of Marketing and Advertising at the Solvay Business School Economics and Management, we agree that this material shall make it freely available for reference and study It is understood that copying or publication of this thesis for financial gain shall not be allowed ACKNOWLEDGMENT This final thesis was completed with the guidance of Mr Serge Bywalski, thank you very much for your time and enthusiasm to give us comment and direction Take this opportunity, we would like to send our special thanks to family, our friends for support and dedicated to help we complete this project The result and the feasibility of this project in reality are motivating us for knowledge that we gain during the course TABLE OF CONTENT Executive summary Environment & Business context 1.1 Environment 1.1.1 Vietnam’s Gross Domestic Product (GDP) 1.1.2 Economic outlook 1.1.3 Regulatory 1.1.4 Political 1.2 Business context Market Assessment 2.1 Our competitors 2.2 Market overview for instant coffee 2in1 Product overview 3.1 About product 3.2 Sales revenue 3.3 Market share Marketing Activities since G7 2in1(4) was launch in 2008 SWOT Analysis of G7 2in1 Strategy plan for G7 2in1 to 2015 EXECUTIVE SUMMARY This project was written after review and analyze the instant coffee market was carried out in Ho Chi Minh City, Viet Nam by the end of February 2013 The overall objective of this project was to evaluate the market potential and to determine success factors to re launch our product, a G7 2in1 instant coffee In doing this we would like to achieve the following sub-objectives: To determine why G7 2in1 is not successful when first launch in 2008, to determine the success factor of the biggest competitors of Nescafe Cafeviet 2in1 and to recommend the strategy in marketing and communication plan to positioning G7 2in1 instant coffee in Vietnam market With the growth of 12,7% in consumption of instant coffee to 2015, there is a potential market as consumers who tend to find the convenient things There are currently big brands for instant coffee in the market that include Nescafe (Nestlé); G7 (Trung Nguyên) which have 2in1 sub brand (coffee and sugar only) Nielsen Vietnam release the research in 2011 that G7 instant coffee place the 1st ranking of Vietnam market with 38% market share, second is Vinacafe with 31% and third is Nescafe 27% and other research of Kantar World panel on consumer buying behavior showed that G7 is the most like and buy brand Average 10 people drink instant coffee using G7 However under G7 brand there are G7 3ín and G7 2ín in which The G7 2in1 is nearly don’t have strong awareness of consumer, because the lack of investment in to the marketing activities, the taste of the product is not match with consumer and face with a very strong competitors is Nescafe with sub brand is Nescafe CafeViet In exploring the weakness point of the product, we have given some recommendations to GROW MARKET SHARE & MARKET SIZE BY INVESTMENT INTO SALES, MARKETING AND PR ACTIVITIES PRIORITIZE PROMOTION ACTIVITIES TO CREATE CONSUMER NEED Review by categorize and solidify and professional sales system with coverage from city to urban area Focus to build G7 2in1 with consistent message, firstly, it’s the real and strong coffee and then it’s your right style Prioritize to research and develop the new taste of G7 2in1 with “great taste and differentiated” Explore current need and define the important period of day when consumer need coffee to develop new need for each segment and each market Focus on the strong point of product is “the real coffee of Vietnam” to arouse the Vietnamese spirit Vietnamese people using Vietnamese Product Environment & Business Context 1.1 Environment 1.1.1 Vietnam’s Gross Domestic Product (GDP(2)) Table 1.1: Annual growth rate of Vietnam’s GDP - Source: Nhan Dan Online 1.1.2 Economic Outlook The Asian Development Bank (ADB(3)) has revised down the Vietnamese growth forecast for 2012 from 5.7% to 5.1% amid gloomy global economic outlook and domestic vulnerabilities The country’s economic output is predicted to quicken to 5.7% in 2013 but still lower than the ADB’s earlier forecast of 6.2% growth in April the lender reported The inflation rate is projected to be 7% by the end of 2012 and then accelerate to 9.4% by the end of 2013, due to higher global food prices and growing domestic demand Official data released by the statistics office show that the Vietnamese economy grew 5.4% in the third quarter, higher than the 4.0% and 4.7% expansion in the first and second quarters 1.1.3 Regulatory Vietnam National Assembly review and approved Food Safety Law of: 55/2010/QH12 on 17/06/2010 and effective on 01/7/2011 that required all Ordinance on Food Hygiene and Safety No 12/2003/PL-UBTVQH11 July 26, 2003 will expire after the Law on Food Safety in effect 1.1.4 Political The Eleventh Congress of the Communist Party of Vietnam in January 2011 called for a more comprehensive approach to the country's renovation, decided to promote greater citizens' participation and unity within Vietnam, and to engage proactively in international integration The Congress re-affirmed Vietnam's approach to state-led development, but also revised key policy documents to place greater emphasis on market processes and non-state ownership of economic assets 1.2 BUSINESS CONTEXT The Vietnam coffee market includes segments: instant coffee and ground coffee From 2007-2010, total coffee consumption increased with a CAGR(1) of 8.9% Instant coffee sales volume - CAGR 2007-2010: 26.2% Instant coffee has become highly popular in Vietnam as it offers a high level of convenience and acceptable taste Production vs consumption volume of instant coffee in Vietnam 44,660 45,000 40,000 35,000 32,825 31,400 28,141 30,000 30,627 25,000 20,000 23,549 18,739 16,330 15,000 10,000 5,000 2007 2008 Production volume 2009 2010 Consumption volume Table 1.2: Production and consumption of instant coffee in Vietnam from 2007 – 2010 Source- GSO – Unit: tonnes Ground coffee sales volume - CAGR(1) 2007 – 2010: -1.1% 10 The market for branded ground coffee witnessed small decline in the last three years, mainly due to increasing competition from cheap unbranded products 50,000 45,000 40,000 Production vs consumption volume of ground coffee in Vietnam 44,252 39,214 35,353 33,360 36,267 35,000 35,065 38,486 30,000 29,361 25,000 20,000 15,000 10,000 5,000 2007 2008 Production volume 2009 2010 Consumption volume Table 1.3: Forecast consumption volume of ground coffee in Vietnam 2010-2015 Source: GSO – Unit: tones Coffee consumption volume is projected to grow at a CAGR(1) of 8.4% for the next years In which, instant coffee is expected to grow faster than ground coffee to meet the fast-moving needs of modern lifestyles In 2015, the proportion of instant coffee is forecasted at 58.8% of total coffee consumption Instant coffee market - CAGR(1) 2010-2015: 12.7% The instant coffee will lead growth over next years due to rising demand for convenience In addition, the taste of products in this segment now closely ambles that of ground coffee 17 Category Brand Instant coffee Product name Quantity Net Consumer Consumer Index weight / price / price per vs G7 Box Box (VND) gr 2in1 G7 2in1 Black coffee 15 sachets with sugar x 16g 240g 45,700 190 100% Nescafe Café Viet Black coffee 15 sachets with sugar x 16g 240g 47,000 196 103% Iced coffee 12 sticks x 300g milk 25g 50,000 167 88% Table 3.2: Product price and packaging of G7 2in1 and Nescafe Caféviet 2in1 3.2 Sales revenue Sales contribution of G7 2in1 in 2010 & 2011: - In 2010: 1,4% of total instant coffee of Trung Nguyen - In 2011: 1,08% of total instant coffee of Trung Nguyen Year 2010 Chart 3.2: Sales contribution of F7 in 2010 and 2011 Year 2011 18 1800 1690 1600 1400 1300 1200 1000 800 600 400 in billion Vietnam Dong 200 123 112 25 18 G7 2in1 Nescafe CafeViet 2010 Khác 2011 Chart 3.1: Sales revenue of G2 2in1 instant coffee and Nescafe Cafeviet 2in1 3.3 Market share of 2in1 instant coffee G7 2in1 Nescafe Café Viet 2in1 Others 1% 8% 91% Chart 3.1: Market share of 2in1 instant coffee in 2011 19 Marketing Activities of G7 2in1 when first launch in 2008 till now vs Nescafe Café Viet 2in1 Marketing Activities ATL G7 2in1 BILL BOARD Nescafe Café Viet 2in1 In 2009 From 2009 to 2012 Message: Message: Key message: Strong Coffee for Bold Men Strong is not enough, it’s 3D breaking surface by Café Viet style (M nh ch a đ ph i coffee glass on the most heavy traffic street in HCMC gu) 2.Sub message: No one understand Vietnamese as Vietnamese people (Không “Vi t” h n ng i Vi t ) TVC None 1st TVC which mentioned a break through taste you won’t expect in an instant coffee, its taste will make you surprise strong! Key message: “Strong coffee for bold men” – “Are you bold enough for it?” After launching years, the 2nd TVC on air about the convenience feature of instant coffee & key message “Strong coffee for bold men” “Coffee so strong it will blow you away” PR Short news + photo of new product with key message: "NOT ONLY STRONG BUT STYLE" - Angles: PR articles focus on the advantages of G7 20 2in1 vs Nescafe Viet BTL POSM for retailers Training materials T-shirt G7 2in1 Gift pack of G7 2in1 in Tet 2009  Visibility drive: on MT channels, Nescafe Café Viet used to many POSM in order to make their product outstanding on shelves On GT channels, there were many display campaign  Sales brief: they organized a very big sales conference for sales team  Sampling + Activation: Nescafe Café Viet conducted many wet samling to introduce the new taste of a kind of instant coffee Tray & Bus sampling: They created a world of the brand experience in which men have to complete ‘bold tasks’ to earn Café Viet Café Viet bus stopped at key cities (HCM, Hanoi, Da Nang) Men were invited to prove their strength and earn a cup of coffee Activation booth at Malls: The booth had games of strength which men needed to win in and earn samples for their In 2008, in order to localized with Vietnamese tastes & compete with R&G coffee, Nescafe has been launched new brand name – Nescafe Café Viet with new flavor: Black coffee with sugar Nescafe Café Viet is the only local brand of Nestle group which is localized specific for Vietnam market - Positioning: “Cà phê m nh cho phái m nh” (Strong coffee for strong men) - Key message: “B n đ m nh đ th ?” (Are you bold enough for 21 this?) - Target consumer: Male, 18-30 years old, urban, ABC class, dynamic, modern - Marketing activities: spend a lots of money on TV channels, activation activities in the supermarket, office building, crowded area…group SWOT Analysis of G7 2in1 Strengths Weaknesses - Ready for challenge with any brand in the pro-active position - Vietnamese brand, thus understand Vietnamese consumer deeply with our own culture - Good quality - Strong distribution channel of Trung Nguyen coffee ‘s image as pride of Vietnamese to build up sub brand G7 - Product positioning is not strong enough that cannot make the differentiated - Taste does not touch the consumer - Lack investment for marketing activities Opportunities Threats - Product awareness is very low - Growing competitive pressure in Vietnam coffee market, especially in instant coffee category - Big population in Vietnam, coffee consumption can be consumed up to 90,000 ton/year that can help G7 to increase numeric distribution - Vietnamese product is supported by Vietnamese people- Consumer habit: 68% of drink people choose is coffee/ week - 2in1 Category don’t have a lot of competitors beside Nestcafe CafeViet 2in1  Low Product awareness of G7 2in1 is the “close point” of consumer development, G7 2in1 need to increase the product awareness by prioritizes to push up product consumption 22 N=245 Total Awareness: 17% Unwareness: 83% Consideration: 9% Chart Source: Household Purchase Panel for In-home regular consumption Strategy for G7 in in 2013-2015 Thúc đ y Objective: GROW 120% REVENUE TO ACHIEVE, 2% MARKET SHARE BY INVESTMENT INTO SALES, MARKETING AND PR ACTIVITIES PRIORITIZE PROMOTION ACTIVITIES TO CREATE CONSUMER NEED Review by categorize and solidify and professional sales system with coverage from city to urban area - Increase the coverage and product availability in whole system - Display following standard, premium care service Focus to build G7 2in1 with consistant message, firstly, it’s the real and strong coffee and then it’s your right style - PR the consistent message and print ad - Maximizing the activities, festival occasion to promote the value of Brand - Exploring image, story of influence people “Real man & style” Prioritize to research and develop the new taste of G7 2in1 with “great taste and differentiated” - Research the current trend and future trend of consumer in drinking instant black coffee - Attractive packaging Explore current need and define the important period of day when consumer need coffee to develop new need for each segment and each market - Access to young generation: Students… to build the loyalty customer for the future - PR campaign to educate consumer with new style of drinking coffee - PR the benefit and advance (health ….) when using product as compare to other product 23 Focus on the strong point of product is “the real coffee of Vietnam” to arouse the Vietnamese spirit Vietnamese people using Vietnamese Product - Target Audience and segmentation Man, from 18 – 35 years old Drink coffee daily Who want convenient coffee but still strong taste to keep them a full day of energy Urban area Segmentation: Demand of Convenience & Understanding about coffee High understanding about coffee Legendee Trung Nguyen ground bean coffee Tran Quang Son Tung Ground bean coffee VIA Ca phe Tuoi G7 2in1 Nescafe Café Viet without brand name G7 3in1 Vina cafe Low understanding about coffee Nescafe 3in1 Low convenience High convenience  In this above chart, segmentation of 2in1 instant coffee are belong to high convenience & high understanting about coffee We position our product G7 2in1 more modern which is suitable for young generation need convenient coffee & have the same taste with ground bean coffee 24 Market and distribution channels - Market: Vietnam - Distribution channels:  GT (General Trade)  MT (Modern Trade)  Key Account  Anywhere got Nescafe Café Viet and G7 3in1, there got G7 2in1 instant coffee - Planning of product coverage: 100% point of sale of Nescafe Café Viet and G7 3in1 will sell G7 2in1 Key message G7 2in1 is the Real and Strong Coffee match with consumer style Social context: - In the current development, to sell the product, the research agency has to work so hard to find the need of customer and develop a product that can sell to them By that reason, lot’s of instant coffee in the market was made by mixing coffee with other cereal or event chemical - A lot of Big & famous brand come to Vietnam with impressive PR campaign like Starbucks, Coffee Bean, Gloria Jean ’s… that create the new trend and influent young generation, they believed it’s can set their own style - The world needs to research for a new philosophy with the concept of sustainable development, human orientation to the prosperity, happiness and longevity, and coffee can fully become a means and method of transportation concepts sustainable development become a reality, will encourage, honor and development of human creativity HOW WILL WE DELIVER TO CONSUMER ? G7 2in1 is the real coffee, not only strong and great in taste but also match your style Product: 25 G7 2in1 is unique and delicious instant coffee from the coffee beans are selected carefully, filtered by talented hands under experience of coffee artists and processed under Eastern mystical secrets Production technology Modern machinery with producing secret formula from Vietnam and Eastern Packaging G7 2in1 was pack in stylist and environmental – friendly packaging Material resources Number material from Highland city of Vietnam, the land of Bazan with standard UTZ, 4C CORE VALUE OF G7 2in1 Product quality that include the material, manufacturing process, and secret formula Life style: Harmony with nature, Harmony with personality Development of Vietnamese product: Good taste, unique flavor, a product of Vietnam and “Vietnamese people, using Vietnamese product” COMMUNICATION CHANEL Communication tools 26 OOH  Road show  Event & activations & promotion Advertising  TVC on TV  Print ad PR  Advertorials  Editorials Digital & Social Media  Interactive microsite (online order/online sales)  Banner  Forum seeding  Fan page POSM  Eye-catching design No Items ATL 1.1 TVC 1.2 Printad 1.3 1.4 1.5 2.1 2.2 Digital PR Outdoor billboard BTL Dry sampling for retailers Wet sampling Detailed Production + on air on VTV/HTV/VL On newspaper which got the audience Rich banner, banner… target Change billboard of G7 3in1 into G7 2in1 Office building, wet market Free 01 glass when customer buy a box of 2.3 Promotion gift at MT channels G7 2in1 Display program at the store Combine with current program of "G7 2.4 which belong to "G7 Family" family" 2.5 Poster At wet markets, retailer store 2.6 Leaflet Deliver to consumers & retailer owner 2.7 Sales toolkits For training sales man At key cities: HCMC, Ha Noi, Da Nang, 2.8 Roadshow by Mercedes cars Can Tho, Hai Phong, Bien Hoa TIMELINE 27 Jan TVC Print ad Digital PR Event Outdoor billboard Dry /Wet sampling Promotion Display program at MT & GT Roadshow Feb Mar Apr June July Aug Sep Oct Nov Dec 28 BUDGET No Items Detailed Budget Quantity (Bil vnd) ATL 13,100 Production + on air on VTV/HTV/VL On newspaper which got the target audience 1.1 TVC 1.2 Printad 1.3 Digital 10,000 1,500 Rich banner, banner… 300 1.4 PR 300 Change billboard of G7 3in1 into G7 2in1 1.5 Outdoor billboard 1,000 BTL Dry sampling 2.1 retailers 3,930 for 2.2 Wet sampling Office building, wet market 130,000 500 60,000 1,000 Promotion gift at MT Free 01 glass when customer channels buy a box of G7 2in1 Display program at the store Combine with current program of 2.4 which belong to "G7 "G7 family" Family" 2.3 1,000 1,000 2.5 Poster At wet markets, retailer store 20,000 200 2.6 Leaflet Deliver to consumers & retailer owner 20,000 120 2.7 Sales toolkits For sales man 2.8 Roadshow Mercedes cars by At key cities Total 1,000 10 100 17,030 29 Information Sources http://nhipcaudautu.vn/article.aspx?id=4776-thi-truong-ca-phe-hoa-tannong-tung-cen-ti-met http://www.baomoi.com/Ca-phe-hoa-tan-G7-dung-dau-thitruong/45/8826129.epi http://www.behance.net/gallery/NESCAFE-CAFE-VIET-STRONG-COFFEE-FOR-STRONGMEN/2115884 http://www.youtube.com/watch?v=ipKCsW6fNFA http://www.youtube.com/watch?v=RApVIqZHb_E www.trungnguyen.vn Marketing management 13th edition – Philips Kotler 30 APPENDIX Picture 1: Print ad of Nestcafe Cafeviet 2in1since 2009 with message “Strong coffee for bold man” Picture 2: G7 2in1 with message “Strong is not enough but match your style” Picture3: Mercedes road show for G7 products 31 APPENDIX Picture 4: Display on MT chanel Picture 5: Retailer signage