(TIỂU LUẬN) MARKETING PLANNING FOR NEW PRODUCTS NESCAFES CHOCOLATE BUBBLE BY NESTLÉ VIETNAM COMPANY

EXECUTIVE SUMMARY

Nescafe is a famous coffee brand created by Nestle Nescafe has an extraordinary market development opportunity when today, in a world that is constantly moving, busy work is easy to distract our minds, pressure, stress, a cup of coffee can help them start a new working day full of excitement

Nescafe is preparing to launch a new instant coffee product line, chocolate bubble coffee - that combines the bitterness of coffee with a little sweetness of chocolate and the chewy of bubble We can effectively compete with many types of instant coffee because the product offers a unique combination of taste and convenience We are targeting specific segments in the consumer market, taking advantage of the growing interest in food taste and quality yet affordable The main marketing objective is to increase the target audience's acceptance of chocolate bubble coffee by 25% The main financial goals are to increase Nescafe's first-year sales by5%, reduce advertising costs, but still retain potential customers.

INTRODUCTION

MISSION STATEMENT

With the mission: Bringing a completely new coffee product of Nescafe,consumers will feel the delicious taste of coffee along with a special chocolate taste that is drunk with bubble, everyone can enjoy and creating inspiration for every day to become more complete.

Strategic objectives for the first year

- Wide coverage at most supermarkets and convenience stores nationwide

- Increase the first 25% awareness of the target customer's product within 1 year from 1/2022 to 12/2022, along with that will increase the awareness level by 2% every month.

- When customers mention to Nescafe Chocolate Bubble Coffee, they will immediately think of novel products, a product that is associated with a dynamic, youthful image that impress personality of customer when using it.

Financial Objectives

- 5% increase revenue in the first year for Nescafe

- Reduce advertising costs but still retain potential customers

SITUATION ANALYSIS

MARKET SUMMARY

According to Statista, In 2018, Coffee consumption in Viet Nam reached 28,8 million packages and in 2019, the number Increased to 30,4 million packages Coffee consumption in 2020 is 29 million packages, reduced 1.4 million packages because of Covid 19.

In the market, manufacturers are introducing new coffee flavors in order to expand their consumer base because there are more and more types of customers in Vietnam Based on their behavior and lifestyle, Coffee manufacturers focus on making coffee more affordable and convenient like selling coffee cans in convenience stores. Thus, the population who started to drink coffee is anticipated to grow in the future.

So our prediction is that the coffee market can be strongly increased during 2021-2025 with a growth rate of 8,3% Based on 2020 with 29 million, the following years will be 30.8 million in 2020, 31 million in 2022, and 34 million in 2023.

According to Viracresearch, Nescafe was the market leader in instant coffee consumption in 2019, account for 46.5%, thanks to modern technology, large production scale and 75 years of experience in the industry.With 3 dominant brands in the market - Nescafe, Trung Nguyen, and Vinacafe with a combined 75% market share Experts said that the war of market share between Trung Nguyen, Nescafe, and Vinacafe never end in Vietnam instant coffee market.

MACRO ENVIRONMENT

Young people today have many different interests and habits than previous generations Especially they have a preference to buy and try many trending products.

In particular, socola coffee with bubble is a drink that is very popular at milk tea store today, neither too bitter nor too sweet, bringing a completely different and unique taste to black coffee Understanding that trend, Nescafe will create a soluble product that is not only convenient but also as delicious as the socola coffee in the store.

Vietnam has long been known for its stable political and security climate, which has attracted many global investors, including Nestlé

Our state's rights and brands preserve coffee, while also supporting product pricing, facilitating exports to other countries, and providing several tax and land rental incentives In addition, the government founded the Vietnam Coffee and Cocoa Association, or VICOFA, to operate and develop coffee, as well as the state's policy lines, monopolies to avoid monopoly power, market disputes, and the scope of interests of enterprises In the coffee market, Vietnamese coffee's rights and interests are protected.

Figure 2: Vietnam Coffee - Cocoa Association

With many new chances for cooperation and integration, Vietnam is on the rise The steady and consistent growth of the Vietnamese economy over the last 30 years is extraordinary The market's development is heavily influenced by the economic climate GDP per capita increased 2.7 times between 2002 and 2020, reaching roughly

2800 USD With more than 45 million individuals exiting poverty, the poverty rate has dramatically increased from 32% in 2011 to under 2% now Vietnam's economy has been heavily damaged by the COVID-19 epidemic as a result of its deep economic integration, but it has demonstrated remarkable resilience The Delta virus variation, on the other hand, comes as a shock to Vietnam, with GDP growth forecasted at 2-2.5 percent in 2021.

 Nescafe, which belongs to the food and beverage business and has a significant impact on people's income, is still affected by the pandemic due to shifting customer’s consumption needs.

Coffee has been a popular beverage in Vietnam for a long time Vietnamese people have made coffee a habit, and it has become an indispensible part of daily life, contributing to the development of a distinct coffee culture They compete with one another to learn and share a variety of coffee-making techniques so that they can taste more flavors from the West or local coffee Nescafe has a long history in the coffee industry, and its quality and reputation are well-known among consumers.

 Nescafe has a good chance of breaking into the Vietnamese beverage market, especially with the debut of Chocolate Bubble Coffee.

Currently, the Swiss Nestlé Organization has established and operates six plants in Vietnam, all of which were planned and built to fulfill the highest quality standards across the group and to comply with Vietnamese environmental laws Nestlé Vietnam has committed to investing US$132 million to double the capacity of high-quality coffee production at the Nestlé Tri An factory in Dong Nai province, with the goal of transforming Vietnam into a production hub and submitting high-value approved coffee to domestic and international markets.

The latest technology will be used to process coffee to produce excellent, safe, and hygienic coffee on a production line with a capacity of 20,000 tons per year.

Figure 4: Inside the decaffeinated instant coffee production area in Dong Nai

Nestlé is always concerned about the problem environment and is committed to implementing environments that protect operations, as well as pursuing continuous improvement goals to meet the School of Systems Management Environment's criteria.

To reduce environmental effect, all Nestlé servers in Vietnam fulfill environmental pollution regulations, use cutting-edge technology in production and execution, and rely on renewable energy Nescafe is also a co-founder of the Vietnam Packaging Recycling Organization and a member of the Ministry of Natural Resources and Environment's Alliance Against Plastic Umbrellas.

=> Nescafe not only offer high-quality coffee but also made Vietnam's environment green

Nowaday, only Phindeli coffee and Mac Coffee has instant chocolate coffee on the market, so it can be said that Phindeli is an industry competitor for Socola Bubble Cofffee of Nescafe.

Socola instant coffee – Mac Coffee

Strenghts - Abundant supply of - A large corporation in

SWOT

Nescafe is preparing to launch a new instant coffee product line, chocolate bubble coffee - that combines the bitterness of coffee with a little sweetness of chocolate and the chewy of bubble We can effectively compete with many types of instant coffee because the product offers a unique combination of taste and convenience We are targeting specific segments in the consumer market, taking advantage of the growing interest in food taste and quality yet affordable The main marketing objective is to increase the target audience's acceptance of chocolate bubble coffee by 25% The main financial goals are to increase Nescafe's first-year sales by 5%, reduce advertising costs, but still retain potential customers.

With the mission: Bringing a completely new coffee product of Nescafe, consumers will feel the delicious taste of coffee along with a special chocolate taste that is drunk with bubble, everyone can enjoy and creating inspiration for every day to become more complete.

2 Strategic objectives for the first year:

- When customers mention to Nescafe Chocolate Bubble Coffee, they will immediately think of novel products, a product that is associated with a dynamic, youthful image that impress personality of customer when using it.

According to Viracresearch, Nescafe was the market leader in instant coffee consumption in 2019, account for 46.5%, thanks to modern technology, large production scale and 75 years of experience in the industry.With 3 dominant brands in the market - Nescafe, Trung Nguyen, and Vinacafe with a combined 75% market share Experts said that the war of market share between Trung Nguyen, Nescafe, and Vinacafe never end in Vietnam instant coffee market.

Figure 1: Market of instant coffe in Vietnam

Vietnam has long been known for its stable political and security climate, which has attracted many global investors, including Nestlé

2800 USD With more than 45 million individuals exiting poverty, the poverty rate has dramatically increased from 32% in 2011 to under 2% now Vietnam's economy has been heavily damaged by the COVID-19 epidemic as a result of its deep economic integration, but it has demonstrated remarkable resilience The Delta virus variation, on the other hand, comes as a shock to Vietnam, with GDP growth forecasted at 2-2.5 percent in 2021.

MARKETING MIX STRATEGIES

Nescafe is preparing to launch a new instant coffee product line, chocolate bubble coffee - that combines the bitterness of coffee with a little sweetness of chocolate and the chewy of bubble We can effectively compete with many types of instant coffee because the product offers a unique combination of taste and convenience We are targeting specific segments in the consumer market, taking advantage of the growing interest in food taste and quality yet affordable The main marketing objective is to increase the target audience's acceptance of chocolate bubble coffee by 25% The main financial goals are to increase Nescafe's first-year sales by 5%, reduce advertising costs, but still retain potential customers.

With the mission: Bringing a completely new coffee product of Nescafe, consumers will feel the delicious taste of coffee along with a special chocolate taste that is drunk with bubble, everyone can enjoy and creating inspiration for every day to become more complete.

2 Strategic objectives for the first year:

- When customers mention to Nescafe Chocolate Bubble Coffee, they will immediately think of novel products, a product that is associated with a dynamic,youthful image that impress personality of customer when using it.

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Product

Levels of products will be identified to satisfy customers’ needs

- Increase focus and alertness at work

- Professional attitude Professionals who have a "gout" to enjoy coffee

- Bringing people together who have similar interests and passions

Mission : "In the simplest way, bring a cup of chocolate bubbles coffee with the most real sensation."

Quality: Chocolate pearl coffee is made from 100% high-quality Vietnamese Robusta coffee beans, and is a bitter blend of coffee and cocoa with the sweetness of milk and the softness, toughness from bubbles

The danger of being substituted will be minimized because this is the first instant chocolate bubbles coffee product in Vietnam and the globe market

The reason for the distinction is due to Nescafe's proprietary technology: To generate a thin coating of roasted coffee, the product is treated using modern technology - proprietary Micronized Roasted Coffee (MRC) technology.

Preparation is made easier with the help of suitable packing.

Style and design: a rich brown hue reminiscent of coffee beans and chocolate, with black bubbles embellishments

Figure 6: Design of Egg Coffee product

Brand mane : NesCafé is a well-known coffee brand that holds the world's top spot in instant coffee

Slogan: Nescafe is the top unit, providing "global coffee flavor" to Vietnamese people with the worldwide tagline "A New Day Begins."

Chocolate Bubbles Coffee, Nescafe's newest product, debuted with the phrase

"Chocolate Bubble Coffee – Double your sweetness" offers customers a distinctive flavor together with alertness, attention, and concentration attention, stress reduction, and increased multi-productivity at work

Packaging : Packed with 6 x 12g boxes Chocolate bubbles coffee's exterior package is eye-catching, including pictures of pure ingredients like chocolate and Vietnamese coffee customers will readily sense the Vietnamese essence via the package, which features an image of a coffee grove in the highlands of Vietnam The Nescafe logo appears at the upper center of the box.

Labeling: ingredients, directions for use, expiration date, and manufacturing location are all included on the label.

 The chemical composition of the product

Table 5: Chemical composition of Chocolate Bubble coffee

Life: 18 months from the date of production

Use immediately after opening the package

When customers have any questions about the product, the environment, health, and the company or have suggestions for the business, Nescafe provides multi- channel support: Different communication channels can assist customers who have busy schedules or want flexibility in how they connect with the business Nescafe staff is available to support via email, phone, and social networks such as https://www.nestle.com.vn/ , fan page on Facebook, Gmail, or Twitter Nescafe will respond within 1 hour.

Figure 7: Fanpage of Nescafe (source: facebook.com)

Figure 8: Website of Nescafe (source: nescafe.com.vn)

Nescafe proposed the pricing objective of building a leading image in terms of quality and average price.

Name of cost type New product rate

- Price of a box Chocolate Bubble Coffee: 49.000VNĐ / 10 packs / 20 gram

- Selling price difference: From 1.000VNĐ to 5.000VNĐ

6.2.2 Pricing method: based on production costs

Expected price = Cost per unit + Expected profit

Cost of production 1 unit = Variable costs + Total fixed costs Fixed/Total Units of Product

Expected profit is the portion of pre-taxable income

It's simple and easy to calculate Wholesalers and retailers often use this pricing model.

This method is fair to both you and your client The seller has a reasonable profit It is easy for buyers to accept when knowing the reasonable profit of the seller. The selling price is kept stable, not fluctuating erratically

New product pricing strategy: Penetration strategy

Pricing is lower than the average of other coffee brands, targeting customers' consumption by making the most of production capacity and cutting production and marketing costs The goal of the market penetration pricing strategy is to entice customers to try new egg coffee products and consolidate market share in the hope of retaining customers when prices rise back to normal This is a group of customers who can easily influence buying decisions at a good price without carefully considering the goods Since Nescafe is a business with a strong production capacity, the profit earned from a unit of product will be low but compensated by the large volume of sales.

Psychological pricing: Psychological pricing strategy Customers are considered a form of "magic", Marketers use this strategy to hit the emotional side of the customer rather than the logical one When Nescafe sets the price of the Nescafe egg coffee box at 49,000 VND proving to attract more consumers than the fake setting of 50,000 VND, even the real difference here is very small The explanation for this is quite simple because most of the customer psychology will rely on the first numbers of the fake to come to a buying decision The goal of following pricing is to further increase demand by creating an illusion of added value for the consumer.

Nescafe 3in1 Nescafe Café Viet Nescafe Chocolate

Table 7: Product’s price of Nescafe

Firstly, we will employ mass distribution channels for chocolate bubbles coffee, focusing on contemporary and traditional channels, because it is an FMCG product.

We will deal with channel partners in the first year until we have covered all Vietnamese markets.

According to data from the Vietnam retail industry trends report for 2020, the convenience store, supermarket, or tiny store model offers a number of advantages that make it a popular company This is not only a location with a wide range of product models, quality, and origin, but it is also a place where contemporary payment and spending methods may be integrated Non-cash payment technology, such as QR codes, cards, and food services, are additional elements that are growing the popularity of models among young people.

Figure 10: convenience/mini store quantity in Vietnam (source: damac.com.vn)

 Places that attract a lot of young people, suitable for targeting, that’s why we develop partnerships and promote items in major supermarkets like as Aeon Mall, Co-op Mart, and others There are also convenience stores like Circle K, GS25, and others

Figure 11: ranking of the leading e-commerce enterprises in Vietnam (source: iprice.vn)

 With the Covid-19 pandemic's unpredictability, Chocolate bubbles Coffee items on Shopee, Lazada, and Tiki are critical for reaching male and female audiences aged 18 to 30.

Figure 12: Channel structure of Chocolate Bubbles Coffee

 Channel width: in Ho Chi Minh City

Traditional channel: retail points in the city, wholesale agents

Modern channel: convenience stores, supermarkets market, shopping websites online

Type of intermediaries: wholesale intermediaries, retail intermediaries

As previously mentioned, because this is an FMCG product, we will utilize a push approach to assist customers find our items more readily using the strategies listed below.

CONTROLS

According to Viracresearch, Nescafe was the market leader in instant coffee consumption in 2019, account for 46.5%, thanks to modern technology, large production scale and 75 years of experience in the industry.With 3 dominant brands in the market - Nescafe, Trung Nguyen, and Vinacafe with a combined 75% market share Experts said that the war of market share between Trung Nguyen, Nescafe, andVinacafe never end in Vietnam instant coffee market.

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Figure 1: Market of instant coffe in Vietnam

Vietnam has long been known for its stable political and security climate, which has attracted many global investors, including Nestlé.

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2800 USD With more than 45 million individuals exiting poverty, the poverty rate has dramatically increased from 32% in 2011 to under 2% now Vietnam's economy has been heavily damaged by the COVID-19 epidemic as a result of its deep economic integration, but it has demonstrated remarkable resilience The Delta virus variation, on the other hand, comes as a shock to Vietnam, with GDP growth forecasted at 2-2.5 percent in2021.

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To reduce environmental effect, all Nestlé servers in Vietnam fulfill environmental pollution regulations, use cutting-edge technology in production and execution, and rely on renewable energy Nescafe is also a co-founder of the Vietnam Packaging Recycling Organization and a member of the Ministry of Natural Resources and Environment's Alliance Against Plastic Umbrellas.

=> Nescafe not only offer high-quality coffee but also made Vietnam's environment green

Nowaday, only Phindeli coffee and Mac Coffee has instant chocolate coffee on the market, so it can be said that Phindeli is an industry competitor for Socola Bubble Cofffee of Nescafe.

Socola instant coffee – Mac Coffee

Strenghts - Abundant supply of - A large corporation in

- Having a good reputation in the US, creating an advantage to impress customers.

- Top quality coffee the world

- Technology and capital are strongly supported

- There is no place in the hearts of customers because the price is a bit expensive

- Not much experience in doing business in Vietnam market

- The consumption habits of customers are becoming more and more modern and demanding.

- Many strong competitors in the market

Besides, there is competition from famous coffee shop chains such as Phuc Long, Starbuck, The coffe house.

STRENG - Vinacafe is the most chosen by

- Trung Nguyen's instant coffee products are ranked first in t f di it

WEAKN - The product line is not diverse

- The packaging is not eye-

- The constant change of signs, colors, packaging, and designs k it i ibl f t

Table 2: Nescafe's competitors in terms of brand

Competitors in the same industry: all manufacturers of instant beverage products such as Milo, Dutch Lady instant milk powder, Cozy….

Competitors for use are all kinds of beverage and beverage products such as LaVie, C2, Sting, Red Bull… And other caffeinated drinks such as green tea, black tea, Espresso, Cappuccino, Macchiato, etc.

 As a brand of Nestle, it also has strong financial backing and available resources.

 Highly invested in advertising and marketing

 Diverse product portfolio This gives them a large variety of products to suit the different tastes of their customers.

 Having a nationwide distribution channel system

 Abundant coffee sources with reputable suppliers - quality and available in the country

 Striving for a green industry (using recycled materials and choosing materials from renewable sources whenever possible)

 Experience in the coffee industry

 Products have so many types that it is difficult for first-time consumers to choose.

 Nescafe is a brand originating from abroad, so it is not possible to deeply understand the coffee taste of Vietnamese people.

 Marketing efforts have not yielded high results.

 There is no experience in combining coffee with socola and bubble.

 Cooperation: It can link up with various companies, educational institutes, and other public enterprises to gain market share and drive profits.

 Consumers who are more concerned about their health tend to stay away from beverages with caffeine content.

 In fact, recently, the area of aging

 Society is increasingly modern, life is busy, everyone's pace of life is faster, so instant coffee and canned coffee are considered a convenient product, so they easily accept unique products and as fresh as instant socola bubble coffee

 The market growth rate and the growing demand for coffee create profitable opportunities for Nestle to market a more ready-to-drink coffee market.

 Vietnam is a potential market and

Vietnam joins the WTO to ensure product quality

 The instant coffee market is saturated, lack difference in taste

 Nescafe launches new products, creating competitive advantages coffee has increased in the Central Highlands provinces, the yield has decreased by up to 50%, negatively affecting the output as well as the quality of coffee beans in the country and for export.

 The impact of covid 19 has led to an increase in the price of raw materials, leading to difficulties in the production

 There are many competitors, from big manufacturers: Trung

Nguyen, Vinacafe, to coffee shop chains such as Phuc Long, Starbuck, The Coffee House, etc.

 Customer needs are complex and affected by many factors

 A wide variety of alternative products are increasingly gaining the trust of customers

Region : focus on big cities, near buildings, downtown, etc.

Family life cycle: independence, coupling stage

Occupation: College students, part-time employees, employees,

Income: low to medium income or only pocket money

Social class: low to middle.

Family life cycle: independence, coupling stage, newly married couple

Income: medium to high income

Social class : middle to upper.

Psychographic Personality attributes : busy, ambitious, hustle and bustle, time and sanity needed.

Personality attributes : busy, stable, responsible, hustle and bustle, coffee drinking habit

Lifestyles : Sensitive to technology, advertising, youthful, pursue new trends, experiences Ask for friend's advice convenience, habit

Lifestyles : hard working, gourmet coffee drinkers, pursue new trends, experiences selectively, personal opinions Ask for friend's advice

Usage rate : low to heavy product users

Benefit expectation: coffee product that suits their taste, convenient, helps them stay awake

Price sensitive : growing money awareness, limited budget.

Loyalty status : low loyalty, always look for new things.

Usage rate : medium to heavy product users

Benefit expectation: convenience, sanity, tasty coffee budget

Price sensitive: management for other purposes like family, etc medium

Loyalty status: loyalty, may consider other

Nescafe will focus on two main customer groups including 18-22, 23-30 because Nescafe's Chocolate Bubble Coffee meets most of the needs for taste, convenience, and mental alertness…

Besides, Nescafe intends to use a variety of social media such as TV advertising, magazine advertising, online advertising, etc Thanks to those means, the product information will be disseminated to customers target customers and create motivation to buy On Vietnam's most popular social networking platform, Facebook, Nescafe is strongly promoting its youthful products such as Nescafé Cappuccino, Nescafé Latte, and now Chocolate Bubble Coffee suitable for young customers who spend a lot of time using social networks Thus, it is easy to see that Nescafé is applying a very effective marketing strategy to differentiate its products

Nescafe uses a differentiated marketing strategy for all of its products by creating a wide variety of products to suit the different tastes of its customers And probably, Socola Bubble Coffee was created with this spirit Socola Bubble Coffee is suitable for all ages and genders Those who especially like the aroma of coffee along with the bitter taste of chocolate and the chewiness of bubble

With the mission of creating high-quality coffee cups for everyone to enjoy, Nescafe’s socola bubble coffee prioritizes building strong coffee flavor, made from pure Vietnamese instant coffee blended with quality bubble and chocolate flavor and reasonable price to make its products competitive compared to other products on the market Therefore, Socola bubble coffee product always bears in mind because of high quality, and seductive aroma not only through TVCs but also throu of consumers.

"Chocolate Bubble C ble Sweatn evoke creative emotio m the first s