TRƯỜNG ĐẠI HỌC MỞ TP.HCM HO CHI MINH CITY OPEN UNIVERSITY Tai Lieu Chat Luong UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL MBAVB4 TRAN MINH THU MARKET PENETRATION STRATEGY FOR "KIDDY" BRAND IN CAMBODIA (PHNOM PENH CITY) FROM 2011 TO 2015 MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART – TIME) Tutor’s name: Dr Trinh Thuy Anh Student’s Name: Tran Minh Thu Ho Chi Minh City (2011) ACKNOWLEDGEMENT OF THE COMMITMENT It is to confirm that the final project for the MBA program is my original work The theory framework in the literature review is built up base on marketing management of Philip Kotler and teaching material of professor Jean Pierre Baeyens and Marianne Claes Some information is base on internal data of company and internet source I am confident to submit this project to the professors of the MBA program Tran Minh Thu ACKNOWLEDGE I cannot finish this project if without the help from many people I would like to express my deepest gratitude to following persons: First of all I would like to express my sincere appreciation to Dr Trinh Thuy Anh for her valuable comment and input I would like to thank to Professors of Solvay Business School who provide the knowledge and practical experience about the marketing and management which help me a lot to complete this project I acknowledge the great help from Mr Van Sok Heng – Business Development Manager and marketing team in Cambodia market for their help on collecting the data, doing market survey and providing information Finally, I would like to express love to my parents and wife who have encouraged and motivated me during the program With my best regards, Ho Chi Minh City, December 2011 Tran Minh Thu TUTOR’S COMMENT Project: Market Penetration Strategy For "Kiddy" Brand In Cambodia (Phnom Penh City) From 2011 to 2015 This project satisfies the requirement for a business project at the Master's level It is recommended that Tran Minh Thu presents his business project to the committee Ho Chi Minh City, December 2011 Tutor’s Signature: Dr Trinh Thuy Anh ABSTRACT “Kiddy” oil brand was distributed in Cambodia from January 2011 but the sale is not good as expectation and on the decreasing trend The project has carried out the study with the marketing team in Cambodia and found out that the reason of decreasing in sale are price of product higher compare to the other cooking oil, product knowledge of sale force is low and product is too new for Cambodia market The market survey in Phnom Penh City showed out that the consumers have a demand for using cooking for kids but currently in the market don’t have any specific product which designed for kids so mainly people use the olive oil which recommended by the doctors, nutritionist for their kids Through analyzing the market survey data and secondary data from internal and external source, the project have set out the market penetration strategy for “Kiddy” oil brand in Cambodia market from year 2011 to 2015 The market penetration strategies for “kiddy” oil brand are the combination of: + Branding and promotion strategy: which build up the brand awareness of product and encourage consumers to buy through promotion campaign + Pricing and distribution strateggies: which use the market penetration pricing to attract new customers and encourage the existing customers who using Olive Oil to switch to “Kiddy” oil Beside that, instead of distribute through traditional channel (wet market), the new channels like supermarket, Health Care/Clinic center and baby shop are also explored TABLE OF CONTENTS ABBREVIATIONS ················································································································· i LIST OF FIGURES··············································································································· ii CHAPTER I: INTRODUCTION 1 1.1 COMPANY INTRODUCTION 2 1.2 PROBLEM IDENTIFICATION 2 1.3 RESEARCH OBJECTIVES . 3 1.4 RESEARCH METHOD 4 1.4.1 At Desk research (Secondary Data) 4 1.4.2 Quantitative Research (Primary Data) . 4 1.5 SCOPE OF RESEARCH . 5 1.6 THESIS STRUCTURE 5 CHAPTER II: LITERATURE REVIEW 7 2.1 ANSOFF GROWTH STRATEGY MATRIXES . 8 2.2 UNDERSTANDING CONSUMER BEHAVIOUS 10 2.3 THE BUYING DECISION-PROCESS: THE FIVE – STAGE MODEL 13 2.4 THE MARKETING MIX STRATEGY . 16 2.4.1 Product 17 2.4.2 Price . 19 2.4.3 Place 24 2.4.4 Promotion 28 2.5 ADVERSTING 29 CHAPTER III: CURRENT SALE STATUS OF “KIDDY” OIL BRAND AT CAMBODIA 33 3.1 CAMBODIA AT A GLANCE 34 3.2 CAMBODIA COOKING OIL MARKET OVERVIEW 35 3.3 PRODUCT OVERVIEW 38 3.4 CURRENT SALE STATUS OF “KIDDY” OIL BRAND AT CAMBODIA 39 3.5 KIDDY OIL’S SWOT ANALYSIS 41 3.6 ANALYZING THE MARKET SURVEY’S RESULT 42 CHAPTER VI: MARKET PENETRATION STRATEGY . 49 4.1 BRADING AND PROMOTION STRATEGY 50 4.2 PRICING AND DISTRIBUTION STRATEGGIES 54 CHAPTER V: CONCLUSION 56 REFERENCES 59 APPENDIX 60 i ABBREVIATION P’S Product, Price, Place and Promotion CALOFIC Cai Lan Oils & Fats Industries Company Limited DHA Docosahexaenoic Acid EPA Eicosapentaenoic Acid FDI Foreign Direct Investment GDP Gross Domestic Product RBD PALM OLEIN Refined, Bleached and Deodorized Palm Olein SWOT Strengths, Weaknesses, Opportunities and Threats USD United States Dollars VOCARIMEX Vietnam Vegetable Oils Industry Corporation WTO World Trade Organization ii LIST OF FIGURES Figure 2.1: Ansoff Growth Strategy Matrixes ·································································· Figure 2.2: Maslow's hierarchy of needs ······································································· 12 Figure 2.3: The Five – Stage Model ············································································· 13 Figure 2.4: The Marketing Mix Strategy ········································································ 16 Figure 2.5: The product life cycle ·················································································· 17 Figure 2.6: Internal/ External Factors Affecting Pricing Decisions ······························· 19 Figure 2.7: Distribution Channel Levels ······································································· 25 Figure 2.8: The five M's of Advertising ········································································· 30 Figure 3.1: market share by sources ············································································ 35 Figure 3.2: Market share by Packaging size ································································ 36 Figure 3.3: Brands share total market ·········································································· 37 Figure 3.4: type of oil in the Cambodia market ······························································ 38 Figure 3.5: Kiddy Oil sale ······························································································ 39 Figure 3.6 Education back groud of interviewee ·························································· 42 Figure 3.7 Estimate income of interviewee ·································································· 43 Figure 3.8 person involve in purchase nutritious food for kids ····································· 43 Figure 3.9 nutritious food supplies to kids ···································································· 44 Figure 3.10 where consumers get consultant/ reference before deciding to buy ········· 45 Figure 3.11 advices from the doctor and nutritionist on using oil for kids ····················· 45 Figure 3.12 Kinds of oil which advised from the doctor and nutritionist for kids ··········· 46 Figure 3.13 Nutritions which good for kids as per Cambodia consumers····················· 46 Figure 3.14 where the consumers purchased nutritious food for kids ·························· 47 Figure 3.15 Factors which affected to buying decision of consumers ·························· 48 iii Figure 4.11: Television viewing frequency ··································································· 53 Figure 4.12: Channels watched most often ·································································· 54 Figure 4.13: Usual viewing hours ················································································· 54 50 Base on the data from market survey, just around 12.30% use the cooking oil for their kiddy As per the General population census of Cambodia 2008, the children who age less than years old are accounted for 21.3% of the total population of Cambodia The total population of Cambodia in year 2008 is 13,395,682 people, and the population in Phnom Penh city is 1,325,681 so the children who age less than years old in Phnom Penh city will around 282,370 people, just assume that 30% can afford to use bottle “kiddy” oil brand per month with price at USD3/bottle, the market value per month will be USD254,133 and market value per month will be around USD3 million (for Phnom Penh city) At the moment the percentage of people who use the oil for their kids just around 12.3% but from above number we can see that the market is very potential In order “Kiddy” oil can penetrate into the Cambodia market deeply and base on the analysis of the market survey data, the market penetration strategies for “kiddy” oil as following: 4.1 BRADING AND PROMOTION STRATEGY Even through the market survey we can see that just 54% of consumers pay attention about the brand of product but building the strong brand still important for the consumers’ product, especially when the knowledge of consumers is growing and the most important thing is at the moment just only healthy chef brand (soyabean oil) doing the branding activities for cooking oil in Cambodia so it will be a great advantage if we can build a strong brand in Cambodia market for Kiddy Oil The branding strategy for kiddy oil from year 2011 – 2015 will use the following activities: A) TV Advertising As per research of Indochina Research about “Media Consumption Habits” in Cambodia, the top favorite leisure activities of Cambodian people (aged 15 to 50) are visiting traditional markets (58%), Hanging out in the parks (53%), watching TV 51 (48%) So advertising in TV is the good way to promote Kiddy brand to comsumers Nearly 98% of household owns a TV screen, the television viewing frequency as below chart: Figure 4.11: Television viewing frequency (source: Indochina Research) The channel which watched most often in Cambodia are CTN (TV21) which accounted for 55%, Khemarak Phomin TV (TV5) accounted for 13%, MyTV accounted for 11% (Figure 4.12) Base on the above information, we will air the Kiddy advertising on CTN and Khemarak Phomin TV television channel day will air four times: at 7:00 Am one time, at 12:00 noon one time and at 8:00 – 9:00 PM two time As per research of Indochina Research the about timing is the usual viewing hour (Figure 4.13) And the estimated cost for airing on CTN and Khemarak Phomin TV television channel which have high rate viewer is around 70-130usd/30sec day time and 220usd/30sec for evening time (prime time, 7:00-10:00pm) For low rate viewer channel is around 70-120usd/30sec day time and 160usd/30sec for evening time (prime time, 7:00-10:00pm) 52 Figure 4.12: Channels watched most often (source: Indochina Research) Figure 4.13: Usual viewing hours (source: Indochina Research) B) Using Billboard, Poster and Leaflet: 58% Cambodian people visiting traditional markets as leisure activities and nearly 95.30% Cambodian people purchased the nutritious food for the kiddy at wet market (result from market survey) so organize the branding activities in wet market is necessary and the cost is cheaper a lot then organize events and TV advertising 53 Big billboard and poster will be placed in some big wet market in Phnom Pend like: Aureussey market, Olympic market, Central Market, Deumkor Market, Chbar Ampov market, Toul Tom Poung Market to attract the consumers, beside that promoter man/girl and sale staff will distribute the Leaflet at these big markets and answer the questions of consumer related to product Besides that, in Cambodia there is one kind famous transportation vehicle which call “Tuk Tuk”, is some thing the same with “Xe Om” in Vietname We also can place advertising of Kiddy brand on Tuk Tuk The cost is very cheap compare to the other kind of adviertising, it is around USD12/Tuk tuk/month C) Organizing some events and activities at some big kid’s garden As per survey, there are 84.30% get consultancies from specialist before deciding to purchase the nutritious product for their kiddy Since kiddy oil product still new to the consumers so it will be useful to organize a seminar which will invite the famous doctor, nutritionist to talk about nutritions for the kids, answer the questions from attendances about the nutrition issues and through them to promote the kiddy brand as premium product for kids The attendances will be parents who have children from month to years old Beside that, also carry the activities at some big kid’s garden, supermarket, baby shop and pharmacy like give free balloons, leaflet and free sample also useful to get consumers aware about the product, attending Vietnam high quality trade fair in Cambodia also a good chance to promote the product to consumers D) Promotion activities To encourage consumers to buy chase product we can conduct some promotion like give some gift (like food tray for kids with Kiddy Brand, spoon), scratch and win: the gift can be food tray for kids, spoon, bowl…) 54 4.2 PRICING AND DISTRIBUTION STRATEGGIES A) Pricing strategy Price is the most sensitive issue in Cambodia, as survey 87.30% interviewees consider price is the important factor which affected to their buying decision Beside strong branding activities, in order to increase market share, company has to set out the new pricing strategy The oil which used by most consumers to their Kids is Olive Oil, as checking the market price for this kind of oil is around USD5.70/0.5L bottle, so it will be around USD2.85/0.25ml bottle, compare to current price of Kiddy which USD3/0.25ml bottle, our price is higher USD0.15 In order to compete with Olive Oil, company need to reduce the selling price of Kiddy oil For the short period which from to years, market-Penetration pricing strategy will be applied The new selling price of kiddy oil will be set at USD2.83/0.25ml bottle which lower compare to the selling price of olive oil With the strong support from markting campaign plus competitve price we will encourage consumers who using olive oil to change to use kiddy oil and attract more new buyers For the long term, when the market share and brand awareness of kiddy oil is high, the pricing strategy of the product will be adjusted in order kiddy oil brand will be become the premium brand in Cambodia B) Distribution and sale force strategy As per survey, beside wet market which so call (95.30%) where consumers mostly purchase the product for their Kids, the consumers also pur chase the product for their kids at Pharmacy (89.30%), Supermarket (43.70%), Health Care/Clinic center for Kids (36.70%) and baby shop (28.30%) 55 In order to increase more market share, the company has to performe the following strategies: + Wet Market: expand coverage in current channel, + developing new channels: distribute Kiddy product to new channel like Pharmacy, supermarket, Health Care/Clinic center and baby shop to increase more sale The sale force for Kiddy product at the moment just two persons who handling the sale of Kiddy oil in wet market Since company develop new channels so the sale forces have to increase to meet the requirement, estimate will need more persons: person in charge of Pharmacy, person in charge of supermarket, person in charge of Health Care/Clinic center and baby shop Beside that, the company needs to organize the training class to train the sale staffs to improve the product knowledge and selling skill of the sale staffs 56 CHAPTER V: CONCLUSION 57 The objective of this project is built up a market penetration strategy for “kiddy” oil brand in Cambodia from year 2011 to 2015 Base on the study and market survey, the result show out that the consumers in Cambodia have the requirement to use the cooking oil for their kids, mainly the people who used the oil for their kids are taken advices from the doctor, the nutritionist, their family members and from the other source like retailer, TV Advertising… Anyway, there still not many consumers use oil for their kids, they got the advices from the doctor and the nutritionist to use the olive oil or salmon oil But currently in the Cambodia market, there aren’t have any oil made from salmon so mainly the consumers use the olive oil for their kids Besides that, the price of the product is the most important thing which affected to the buying decision of consumers “Kiddy” oil is a new product, at the moment it is distributed through the traditional channel (wet market), with few marketing activities to support, high selling price and weak sale force which cause the sale of kiddy oil is low In order to help the product penetrate into market, the project must find the answers for the following questions: + How to make people aware about our product? + What distribution channels we need to expand to increase the sale volumn + What is the pricing strategy for “kiddy” oil we should use to attract more buyers? Base on the analysis of the survey result, the detail market penetration strategies have been set out and briefed in the below: + Branding: using above the line and below the line marketing activities like TV advertising, event, promotion, poster, banned…are applied to build up the awareness of the consumers for kiddy oil 58 + Pricing: at the first stage, market-Penetration pricing strategy will be applied to encourage consumers who use olive oil to switch to Kiddy oil and encourage new consumers to buy + Distribution channels: beside use the traditional channels (wet market), the new channels like supermarket, baby shop, pharmacy will be applied Together with the expansion of the channels the sale forces also increase to meet the requirement, besides that, training the sale forces also important element to archive the sale target Cambodia is a new market for cooking oil which for kids with a huge potential growth Due to the first mover in the market, so Calofic has a lot of opportunities to gain the market share if it can define a clear strategy With the experience in cooking oil field, strong finance and human resource, Calofic’s ambition is to become the leading company in the Cambodia for cooking oil business 59 REFERENCES Philip Kotler (2006) , Marketing Management 12th Edition, Publisher: Prentice Hall; 12 Edition (January 1, 2006) Philip Kotler (2005), Principles of Marketing 4th European Edition, Publisher: Pearson Education Limited 2001 Lecture and slides from the course J.P.Beayerns, Marketing M Claes, Applied Marketing M Claes, International Marketing Website: National Institute of Statistics of Cambodia: http://www.nis.gov.kh/ Indochina Research: http://www.indochinaresearch.com/Default.aspx Viet Nam - Lao - Cambodia Association for Economic Cooperation Development: http://www.vilacaed.org.vn/home/ 60 APPENDIX QUESTIONNAIRE (ENGLISH VERSION) Respondent Information Name: Address: Tel: Sex: Male Age < 25 years old Educational Back Ground Secondary and Below Above University Female 25 – 45 years old High school Estimate total income of family (s) 900USD >40 years olds University 500 - 700USD 700 - 900USD Q1 Have you ever provided Nutritious food to your kid? (S) (If choose “Ever” then go from Q5 to Q9, if “Never” then go to Q2, Q3,Q4) Ever Never Q2 Why you never provide nutritious food to your kid? (M) No reason to provide Not aware of Nutritious food Don’t know place to buy Don’t trust nutritious food Nutritious food not available Cannot afford to buy Others…… Q3 Do you think it is important or not to provide Nutritious food to your Kid? (S) Not Important Important Very Important Q4 Do you want to provide Nutritious food to your Kid in the future or not? (S) (If yes then go from Q7 to Q9, if no than finish interview) Yes No Q5 In your family, who make decision to buy nutritious food for your Kid? (M) 61 Husband Wife Brother/Sister Other… Q6 What Kinds of nutritious foods you provide to your Kids? (select what you use to provide) (M) Milk Powder Fresh Milk Nutritious Cereal Yoghurt Cheese Oil for Children Enhance vitamin food Other…… Q7 What kind of below Nutrition you think it good for your kid? (M) DHA Omega 3 EPA Vitamin A Calcium Other… Vitamin E Q8 Where you get consultant, recommendation or reference before you decide to buy (or if you want to buy)? (M) Family/Friend Specialist (Doctor, Nutritionist…) Retailer 4.Print Ad (Magazine, newspaper, Poster … ) TVC airing/ TV program others…… Q9 Do they recommend you to provide cooking oil to your Kid? (S) (If “Yes” go from Q10 to Q13, if ”No” go from Q12 to Q13) Yes No Q10 What kind of Oil they recommend you? (M) Olive Oil Canola Oil Sesames Oil Rice bran Oil Others… Salmon Oil Q11 What Brand you are using now: Q12 Where you buy Nutritious food for your Kid? (M) Wet Market Supermarket Baby shop Hospital/healthCare center/Clinic for Kids Others… Pharmacy Q13 What are the major factors below which important to you to decide buying Nutritious product? 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