Introduction
ALLUVIA is a premium Vietnamese chocolate brand crafted from high-quality cocoa beans sourced from Tien Giang and Ben Tre, renowned for producing some of the finest nuts globally Established in 2014, Xuan Ron Cho Gao Cocoa Co., Ltd is the parent company of ALLUVIA, with its headquarters located at No 5, Hoang Dieu Street, Ward 13, District 4, Ho Chi Minh City.
The company has actively engaged in international brand promotion, participating in notable events such as the chocolate exhibition in Paris, exporting its chocolate products to Japan, and serving as a chocolate supplier for Jetstar airline.
Alluvia’s vision is to promote Mekong Delta chocolate and cocoa, with local natural origins, designed with respect for the environment and fair trade.
Alluvia aims to connect Vietnamese and global food enthusiasts with exquisite artisanal chocolates sourced from the Mekong River region Local farmers cultivate and nurture cocoa trees following international standards, ensuring quality and sustainability through UTZ certification.
Alluvia's products include bean chocolates, bars, pellets and ice cream, in a variety of flavors such as 70% cocoa, 80% cocoa, cashews, almonds, coconut, coffee, chili peppers and more.
Home country (Vietnam) situation
Political Stability
Vietnam's stable political environment offers a favorable context for Small and Medium-sized Enterprises (SMEs) aiming to engage in international exports With a government that maintains significant control, businesses can benefit from a predictable landscape, enabling SMEs to develop long-term strategies and invest in market growth effectively.
Vietnam's engagement in international trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the ASEAN-India Free Trade Agreement (AIFTA), has created substantial opportunities for small and medium-sized enterprises (SMEs) to export their goods and services to global markets.
International organizations have raised concerns about human rights issues, particularly regarding freedom of speech and religion, which could impact the nation's reputation and create apprehensions for businesses As a result, companies must carefully evaluate these factors before expanding into the global market.
The Vietnamese government's potential changes to regulations and policies highlight the necessity for ongoing monitoring of relevant information and active collaboration with governmental bodies to ensure compliance and seize new opportunities.
Vietnam's political landscape is favorable for SMEs looking to expand into foreign exports, provided they conduct a comprehensive assessment of the business environment and grasp the existing political and legal challenges and opportunities Engaging with the Vietnamese market requires informed decision-making and a proactive approach to adapt to changing dynamics.
Promotional Activities
In recent years, the Vietnamese government has implemented various initiatives to enhance the export of agricultural processing products, aiming to revitalize and advance the export sector in the wake of the COVID pandemic.
On August 11, 2023, the Ministry of Industry and Trade hosted a seminar aimed at assisting export businesses in overcoming challenges and enhancing their participation in the global supply chain The event brought together Vietnamese companies from the textile, agricultural, and processed food sectors, along with domestic and international experts, to discuss strategies for accessing international distribution and procurement channels.
● The Ministry of Industry and Trade of Vietnam provides market information, trade policies, and export incentives to Vietnamese enterprises that want to enter the Indian market.
● The Vietnam Trade Promotion Agency (VIETRADE) facilitates trade promotion activities such as trade missions, trade shows, and online platforms forVietnamese exporters and Indian importers
Export Experience of Alluvia Chocolate Company
Alluvia Chocolate, an experienced SME, has successfully entered the Japanese market and participated in food exhibitions in France, showcasing their ability to navigate international markets To further enhance growth and global recognition for their premium chocolate products, it is advisable for Alluvia to strategically expand its export efforts to additional countries beyond Japan and France, leveraging their established track record and expertise.
Alluvia Chocolate’s SWOT Analysis
Standard and Safe Ingredients for
Alluvia is known as a chocolate brand using 100% pure cocoa from the fertile
Mekong Delta region, cultivated according to international standards and
UTZ certified Additionally, Alluvia openly shares its ingredient processing procedures on its official website and emphasizes meticulous handmade processing at each stage This ensures the product's quality and safety.
Unique and Diverse Product Lines
In addition to products like
Single-Origin Chocolate, filled chocolates, and fruit-covered chocolates,
Alluvia offers a diverse selection of products, including cocoa powder, cocoa beans, and an array of chocolate gift boxes Their unique chocolates, featuring flavors like ginger and chili, cater to a broad spectrum of tastes With options ranging from mildly sweet to intensely bitter, customers can easily find chocolates that match their preferences in various sizes.
Alluvia stands out for its affordable pricing, providing high-quality and delicious products crafted from pure ingredients The brand's prices are relatively reasonable, typically ranging from 80,000 to 100,000, making it accessible to a wide range of customers.
Varied Chocolate Flavors May Not Suit Everyone's Taste:
Alluvia is renowned for its delectable chocolate offerings, but some unconventional flavors, like chili and ginger, may not appeal to all consumers This could present a challenge for those who favor more traditional chocolate tastes.
Alluvia entered the Vietnamese chocolate market in 2014, positioning itself as a newcomer amidst fierce competition The brand contends with the challenge of standing out against well-established names like Legendary Chocolatier, which have a longer history and stronger market presence.
Despite having opportunities to collaborate with major partners, the Alluvia brand struggles to achieve significant recognition in the chocolate market, both locally and globally This lack of visibility presents a challenge for the brand as it seeks to expand internationally.
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Entering new markets offers the potential for significant growth, especially in regions with a growing appetite for chocolate products.
The worldwide shift towards premium and artisanal chocolates presents an opportunity for the company to showcase its quality products.
The growth of online shopping provides a platform for reaching international customers without the need for physical stores in every market.
Established competitors in the target markets may pose a challenge in terms of market share and customer loyalty.
Complying with different international regulations, including import/export requirements and food safety standards, can be cumbersome.
Exchange rate fluctuations can impact pricing and profitability.
To enhance its export strategy for chocolate products, the company should implement key actions derived from a SWOT analysis: leveraging its strengths, addressing weaknesses, capitalizing on market opportunities, and mitigating potential threats.
QualityAssuranceandCompliance: Ensure stringent quality control and compliance with international regulations and food safety standards This includes maintaining certifications and adapting product labeling and packaging as required by each market.
Cultural Adaptation: Customize marketing and branding strategies to resonate with the local culture and values This may involve adapting advertising campaigns and product messaging.
Economic Monitoring: Keep a close eye on economic conditions in target markets and be prepared to adjust pricing and marketing strategies accordingly during economic downturns or upturns.
To establish a robust presence in the premium chocolate market, develop an effective international marketing strategy that emphasizes the brand's quality and uniqueness Leverage digital marketing and social media platforms to engage and connect with a global audience.
TradeShowsandExhibitions: Continue participation in international exhibitions and trade shows to showcase products, build brand awareness, and connect with potential partners and distributors.
E-commerce Expansion: Embrace e-commerce as a platform for international sales, ensuring a user-friendly online shopping experience, secure payment options, and efficient logistics.
To achieve successful international expansion, the company must embrace a flexible, market-specific approach, acknowledging that each target market necessitates tailored strategies Key factors for success include adaptability, commitment to quality assurance, and the establishment of strategic partnerships, all while effectively addressing potential challenges.
International Market Selection (IMS)
Criterias and Developing Segments
Our research team conducted an investigation into the Asia-Pacific region's chocolate market growth potential, utilizing data from reputable market research companies According to Mordor Intelligence, six countries stand out for their promising prospects in the chocolate product category: Australia, Japan, Indonesia, India, China, and South Korea.
Alluvia, a small business aiming to enter a new market, will strategically focus on identifying a niche to minimize competition As a result, countries actively engaged in cocoa cultivation and chocolate exports will be excluded from consideration Specifically, Japan will be removed from the list due to its established market presence, and Indonesia will also be eliminated for its involvement in cocoa production and chocolate exports.
Market segmentation relies heavily on key factors from the market potential group, including economic, political, and linguistic elements To effectively categorize these factors, specific criteria will be established, drawing insights from Svend Hollensen's Global Marketing textbook.
Preliminary Screening
This section evaluates India, China, Australia, and South Korea through political, economic, and linguistic factors, employing a rating scale from 1 to 5 The assessment's total weight is 1, with a maximum achievable score of 5.
The table below illustrates how the scoring is calculated for each factor.
Average percentage of growth of GDP in
0.25 Very Low Moderate Very High Key word + country
After collecting the data, our group has obtained the following assessment results:
Weight India China Korea Australia
Average percentage of growth of GDP in
The evaluation will focus on countries that achieved scores above 2, while South Korea has been excluded from consideration due to its score being below this threshold.
Fined - grained Screening
This section evaluates the market potential and trade barriers of four countries—India, China, and Australia—using a rating scale from 1 to 5 Each country is assessed based on these factors, with a total weight of 1 and a maximum score of 5.
The table below illustrates how the scoring is calculated for each factor.
Consumption of chocolate per capita (kg)
After collecting the data, the group has obtained the following assessment results:
Consumption of 0.15 0.45 0.15 0.75 chocolate per capita
Based on the assessment, India appears to be a potential market for Alluvia Chocolate.
Host country (India) Situation
Political Environment
India's political landscape features a multi-party system, prominently led by the Bharatiya Janata Party (BJP), which has recently achieved significant victories in local elections, bolstering its prospects for the upcoming 2024 general elections The country functions as a federal union, comprising 28 states and 7 union territories, and operates under a parliamentary democracy with a bicameral federal parliament While individual states possess legislative authority, national laws hold supremacy Political parties in India are classified into two categories: national parties, recognized at the federal level, and state parties, acknowledged within individual states.
1.2 Import situation of food in India
On March 31, 2023, India’s Directorate General of Foreign Trade announced the Foreign Trade Policy 2023, replacing the previous policy from 2015 This new policy marks a shift from direct support to a focus on tariff reduction Additionally, the Foreign Trade Policy 2023 aligns with India’s initiatives to enhance business operations by implementing online management systems, streamlining licensing and document approvals, and reducing administrative costs for businesses.
India's Foreign Trade Policy 2023 introduces significant reforms aimed at simplifying business operations and reducing administrative burdens, creating a favorable environment for businesses seeking to export to India These changes facilitate easier market entry for foreign companies and promote international trade However, it remains essential for businesses to conduct comprehensive market research, comprehend regulatory requirements, and adapt their strategies to maximize these new opportunities effectively.
In 2023, Vietnam, as a partner of India in the ASEAN-India Free Trade Area (AIFTA), benefits from significantly reduced customs duties on exports, with most goods, including chocolate products, facing tariffs between 0% and 5% This substantial reduction from the standard non-preferential tariff rate of 35% provides Vietnamese goods a competitive edge in the Indian market.
In India, the total tariff for imported goods is determined by the formula: IGST + basic customs duty + any applicable protective duties The Integrated Goods and Services Tax (IGST) is levied on goods and services that are transported between states, as well as on imports and exports entering the country.
For chocolate products imported from Vietnam, the IGST rate is specified as 18%.Therefore, the total tariff on this item in India will be 23%.
Economic Environment
2.1 Exchange rate of Indian rupee (INR) and Vietnam dong (VND)
Over the past five years, the exchange rate of the Indian Rupee (INR) to the Vietnamese Dong (VND) has shown significant fluctuations, generally trending downward, indicating a depreciation of the INR Key factors contributing to this decline include the US-China trade war, political tensions between India and Pakistan, the Covid-19 pandemic, and economic measures from central banks, alongside the oil price crisis This depreciation presents an opportunity for Vietnamese companies to export goods to India at a favorable exchange rate Given the current macroeconomic context, this low exchange rate is expected to persist in the medium term.
The ASEAN-India Free Trade Area (AIFTA) is a significant trade agreement established between India and the ten member countries of the Association of Southeast Asian Nations (ASEAN) Signed in 2009, AIFTA officially took effect in 2010, aiming to enhance economic cooperation and trade relations in the region.
The AIFTA seeks to eliminate tariffs on the majority of goods exchanged between India and ASEAN while also aiming to reduce non-tariff barriers Additionally, it encompasses provisions related to investment, intellectual property, and services.
Under this agreement, India pledges to eliminate 80% of tariff lines by 2016, increasing to 100% by 2023, thereby facilitating trade between Vietnam and India through AIFTA This commitment enhances trade and exchanges between the two nations, allowing businesses from AIFTA member countries to expand their markets and gain a competitive price advantage.
Social Environment
Sense of self and space minimize body contact, respect other’s personal space
Dress and appearance quite simple and typically untailored, religious rule Food and eating habits eating is a social event
Family and friends extended family, loyalty and responsibility, respect for old age
Values and norms group conformity, harmony, hospitality, religion and spirituality
Beliefs and attitudes individuals accept fate, believe in astrology, gender roles Mental process and learning creativity, problem-solving
Business/work habits relationship-oriented, rewards based on seniority, work is a necessity
India is a multilingual nation with 22 recognized languages; however, not all 22 languages are widely used throughout the country Instead, different regions will utilize different regional languages.
After gaining independence, India established its state boundaries based on regional languages, with Northern India known as the "Hindi belt," where Hindi is predominantly spoken In contrast, Southern India showcases significant linguistic diversity, featuring languages such as Telugu, Marathi, and Odia Although Hindi was designated as the national language, its rejection in some regions allowed English to emerge as a vital communication bridge in this multilingual country English is extensively used across India and holds a dominant position in business and education sectors.
English serves as India's second language, crucial for uniting its diverse regions and facilitating communication in multicultural settings It positions India as an attractive destination for international companies, allowing foreign managers to effectively engage with Indian staff despite language barriers The widespread use of English enables employers to tap into a broader labor pool across the country Furthermore, access to English varies significantly by socioeconomic status, linking proficiency in the language to opportunities in business, education, and media, thereby enhancing individuals' economic and social mobility.
Regional languages in India play a crucial role in influencing state policies, laws, and the daily lives of their populations Promoting multilingualism is essential for preserving regional identities and significantly enhances interactions among Indians and with the global community.
In India, the principle of "Atithi Devo Bhavah," meaning "The guest is God," underscores the cultural significance of hospitality Originating from Sanskrit texts, this phrase has become a fundamental aspect of Hindu societal values, emphasizing the paramount importance of guests in Indian culture.
In India, pursuing higher education is a common aspiration, regardless of one's financial background The country excels in technology education, and obtaining a university degree is essential for securing high-paying job opportunities.
In Indian culture, public displays of affection are often met with curiosity or disapproval, reflecting a preference for modesty in communal settings However, this emphasis on community also fosters a strong willingness to assist others, as Indians frequently engage in social and charitable activities to support those in need.
Religion significantly shapes the daily lives of Indians, impacting festivals, rituals, and personal life choices It fosters a sense of belief and respect for traditions, ensuring that these values are passed down to future generations, thereby strengthening the foundation of faith.
In India, family structures can be either patriarchal or mother-centric, with a strong emphasis on respecting elder family members It is regarded as the highest duty for sons and daughters to care for their parents as they age.
India's culture deeply embodies the law of karma, emphasizing the principle of "as you sow, so shall you reap." From a young age, individuals are taught the importance of caring for their aging parents, as neglecting this duty could lead to loneliness in their own later years This practice not only reinforces familial bonds but also serves as a profound expression of gratitude for the sacrifices parents make during their children's upbringing.
Indians prioritize harmony and unity, fostering strong connections with their community and relatives This interdependent network serves as a vital support system that individuals can depend on every day.
A typical Indians can be described as:
In Indian culture, family holds a significant place, often prioritized above all else Caring for parents and elderly relatives is viewed as a sacred duty, reflecting deep respect and devotion to familial bonds.
In India, religion and beliefs play a crucial role in daily life, with many individuals practicing their faith through regular attendance at temples, churches, and sacred sites They actively engage in religious ceremonies and rituals, reflecting their deep commitment to their spiritual traditions.
In India, pursuing higher education is a common aspiration, even among those from less affluent backgrounds, as education is viewed as a pathway to upward social mobility Many Indians strive for excellence in their studies and career growth, with popular fields including information technology, engineering, medicine, and business.
Indians hold a deep respect for their traditions and festivals, which often intertwine elements of religion, culture, and history This reverence is reflected in the way people honor and adhere to the customs and rules associated with these traditional celebrations.
Indians are renowned for their exceptional hospitality, treating guests with utmost respect and generosity This cultural value is prominently displayed in their warm welcome of tourists from around the globe With a sociable and friendly demeanor, many Indians readily open their homes to friends and visitors alike, embodying a spirit of kindness and enthusiasm.
Indian aesthetics can exhibit a wide range of diversity among individuals in India, just like other cultures However, these are some key features about the Indian aesthetics.
Competitors Analysis
Dark Chocolate Single Origin Chocolate with Spicy Gift Collection
Cadbury Dairy Milk Cadbury 5Star Cadbury Dairy Milk Silk
Alluvia Chocolate Vietnam emphasizes the use of premium cocoa beans and cutting-edge technology in crafting its chocolate bars, ensuring top-notch quality Similarly, industry leaders like Nestle and Mondelez also focus on quality, earning multiple awards for their exceptional chocolates.
Nestlé aims to achieve a deforestation-free supply chain by 2022, while Mondelez is dedicated to sourcing 100% sustainable cocoa by 2025 Additionally, Alluvia Chocolate Vietnam collaborates with local farmers to enhance sustainable farming practices and elevate the livelihoods of those in the Mekong Delta region.
Alluvia Chocolate Vietnam is a bean-to-bar chocolate manufacturer that uses cocoa beans
Nestle and Mondelez are global chocolate manufacturers that source cocoa beans from diverse countries, including the Mekong Delta region of Vietnam, to create their chocolate bars.
Alluvia Chocolate focuses on creating unique flavors that pay homage to Vietnamese farmers and the country’s varied terroir-driven cocoa beans.
Nestle claims to be guided by science when setting nutrition guidelines for its confections.
Mondelez takes into account multiple factors but says consumer preference and taste is key
Despite offering high-quality and delicious products made from pure ingredients, the brand is known for its relatively reasonable prices, ranging from 80,000 to 100,000 VND per product.
Nestle’s products are more frequently available in stores than their competitors
Mondelez boasts a portfolio of popular brands such as Cadbury, Oreo, Toblerone, and Ritz, which enjoy significant consumer recognition and loyalty, giving the company a competitive edge in the market.
Mason & Co Paul and Mike
Dark Chocolate Single Origin Chocolate with Spicy Gift Collection
Organic - Single - Origin - Vegan - Dark Chocolate Bars Cacao Powder/Nibs/Butter Giftset
Liquor Chocolate Award-winning Chocolates Giftboxes Snacking Milk Chocolate
Market positioning:All 3 firms position themselves as premium chocolate brands, targeting customers willing to pay a premium for high-quality, artisanal chocolate.
Distribution channels:Use a combination of offline and online distribution channels (sell their products through their websites, physical stores, or through select retailers)
Differences Each firm offers unique flavor profiles and types of chocolate products (taste, ingredients, and recipes).
Chocolate Vietnam's competitive edge lies in its commitment to ethically sourced and high-quality cocoa beans, which appeals to customers looking for sustainable and premium chocolate products.
Mason & Co's wide variety of chocolate types, such as single-origin, dark,and milk chocolates,caters to different consumer preferences, making them versatile and appealing to a broader customer base.
Targeted Customer
India, a rapidly developing nation with a large youth demographic, presents a unique opportunity for Alluvia The primary target audience consists of two key segments: teenagers aged 15-20 and young professionals aged 22-27, including both genders This diverse customer base allows Alluvia to customize its products and services to meet the specific needs and preferences of these age groups in India.
Alluvia is focusing on a medium-income customer base, specifically individuals earning between INR 20,000 and 30,000 per month This strategic targeting allows Alluvia to customize its products and services to align with the unique needs and financial capabilities of this relatively affluent segment compared to other regions in the state.
India's strong preference for high-quality chocolates is a key factor in Alluvia's marketing strategy, especially as the chocolate market is projected to grow from $2.07 billion in 2023 to $2.86 billion by 2028, with a CAGR of 6.64% This growth presents a significant business opportunity, particularly as premium chocolates are increasingly viewed as desirable gifts for friends and family Many Indian consumers associate higher-end chocolate options with better hygiene, durability, and overall value, further driving the trend of gifting chocolates domestically.
The rising health consciousness among Indian consumers, particularly in urban areas and increasingly in rural regions, presents a significant opportunity for Alluvia There is a growing preference for premium chocolates that are health-focused, featuring low or no sugar options, with a particular interest in dark chocolate, reflecting the global trend towards health and wellness Additionally, the demand for sustainable and eco-friendly packaging is on the rise, as consumers prioritize environmentally conscious choices Alluvia can capitalize on this trend by launching a line of dark chocolate products and gift packages that cater to health-conscious and eco-aware consumers By emphasizing high-quality, health-oriented offerings and elegant packaging, Alluvia can position itself as a premium brand in the market This strategy will allow Alluvia to differentiate itself through a diverse range of dark chocolates and gift items that not only satisfy taste preferences but also align with the health and wellness values of Indian consumers, creating a competitive advantage in the industry.
Brand Position
In the competitive landscape of the Indian chocolate market, particularly within the handmade segment, Alluvia has strategically positioned itself by offering high-quality handmade chocolates with a cocoa content of 70% or more Catering to the Indian preference for less sweet options, Alluvia also features unique flavors infused with spices like ginger and orange peel, all at more affordable prices than other handmade chocolates This strategic positioning has enabled Alluvia to quickly achieve significant revenue and attract a diverse customer base in the Indian market.
Marketing Objectives
Quantitative Objectives
- Revenue Target: Generate 700 millions VND in revenue from the Indian market within the first year of market entry, and 800 millions VND in the second year.
- Distribution Expansion: Establish partnerships with at least 1 key distributors or retailers in major Indian cities within the first six months, at least 3 key distributors/ retailers within 2 years.
Qualitative Objectives
- Brand Recognition: Raise brand awareness among the Indian consumer base through effective marketing and promotional efforts.
- Customer Loyalty: Build a loyal customer base by fostering positive brand experiences and gaining repeat customers.
- Product Adaptation: Successfully adapt products to cater to Indian tastes and preferences while maintaining the company's premium image.
- Partnership Building: Develop strong relationships with distributors and retailers inIndia to secure long-term partnerships.
Entry Mode
Firm size
Alluvia Chocolate, a Vietnamese company, specializes in crafting chocolate bars from cocoa beans sourced from the Mekong Delta region As reported by Glints, a career platform, Alluvia Chocolate Vietnam employs between 201 and 500 individuals, classifying it as a small to medium-sized enterprise (SME).
International experience
Alluvia has successfully exported its products to international markets, including Japan and Hong Kong, showcasing its experience in global trade, although the extent of this experience remains limited.
Product characteristic
Alluvia chocolate is not a mass fast-moving product Alluvia is a niche market product
- a smaller target customer group within the confectionery industry Therefore,business and marketing activities need to be customized with the product.
Product differentiation advantage
Alluvia chocolate's competitive could stem from factors such as
- High-quality ingredients: Alluvia Chocolate is 100% pure cocoa, grown in the fertile soil of the Mekong Delta region.
Alluvia specializes in unique recipes and a meticulous chocolate-making process, ensuring the production of high-quality chocolate The delicate alchemy of chocolate begins with the harvesting of cacao beans, which are then fermented, dried, and roasted Xuan Ron, the business owner, personally oversees the plantation and expertly transforms cacao beans into original, ready-to-eat creations.
ALLUVIA is a renowned Vietnamese chocolate brand that stands out for its strong brand image, crafted from high-quality cocoa beans sourced from Tien Giang and Ben Tre, regions celebrated for producing some of the world's most exquisite nuts.
Transaction specific factors
Tacit nature of know-how
Alluvia Chocolatier reveals its intricate chocolate-making processes, highlighting the use of advanced European technology Despite being a newer brand, Alluvia has gained valuable experience as a chocolate supplier for Jetstar Airlines The combination of modern techniques and meticulous attention to detail from the beginning stages enables Alluvia Chocolatier to produce high-quality chocolate products.
Alluvia Chocolatier specializes in crafting premium chocolates from 100% pure cocoa beans sourced from the fertile Mekong River delta in Vietnam The brand is transparent about its chocolate production processes and boasts a robust distribution network, partnering with esteemed clients like JW Marriott hotels This strong clientele reflects Alluvia's reputation as a trustworthy business, minimizing the chances of opportunistic behavior for profit.
Cultural distance
Chocolate is a popular gift choice in both Vietnam and India, though the occasions for gifting vary In Vietnam, it is commonly presented during Lunar New Year, Valentine's Day, and various special events Conversely, in India, chocolate is frequently exchanged during festive celebrations such as Diwali and Holi.
In Vietnam, chocolate symbolizes love, romance, and luxury, while in India, it represents happiness, joy, and prosperity.
Chocolate consumption is on the rise in both Vietnam and India, but Vietnam is experiencing a faster growth rate This trend can be attributed to Vietnam's younger demographic and the expansion of its middle class, which is driving increased demand for chocolate products.
Chocolate advertising in Vietnam and India leverages distinct cultural elements to resonate with consumers In Vietnam, advertisements frequently feature couples and families, portraying chocolate as a symbol of love and togetherness Conversely, in India, chocolate promotions highlight festivals and celebrations, positioning chocolate as a representation of happiness and prosperity.
In recent years, Vietnam and India have embraced the "bean to bar" chocolate movement, prioritizing this artisanal method over traditional industrial chocolate production This approach focuses on creating premium chocolate with pure cocoa content, appealing to consumers with its naturally smooth and subtle bitter flavor, free from industrial additives.
In general, there are lots of differences between Vietnamese culture and Indian culture, reflected in chocolate products.
Country risk
Vietnam has seen an increase in the availability of imported chocolate brands due to the government's support for free trade In contrast, India imposes more restrictions on imported chocolate, reflecting a protective stance towards its domestic businesses.
Vietnam's government is inclined to offer subsidies to chocolate producers, resulting in lower prices for consumers In contrast, India is less likely to provide such financial support, leading to higher chocolate prices As a result, Vietnamese consumers can more easily afford imported chocolate, while Indian consumers tend to be more price-sensitive, often opting for domestic chocolate brands.
India's rapidly growing economy faces challenges due to its underdeveloped status, which poses risks of economic shocks that may negatively impact consumer spending Additionally, persistent inflation in India threatens to erode purchasing power, potentially resulting in decreased demand for discretionary items like chocolate.
India's political landscape is characterized by a multitude of political parties, contributing to potential instability and uncertainty This political complexity can adversely affect the economy and dampen consumer spending.
Conclusion
Alluvia Chocolate, a small and medium-sized enterprise (SME), has some export experience in Japan and Hong Kong, but lacks extensive international market expertise Given the significant cultural, economic, and political differences between India and Vietnam, it is advisable for Alluvia to adopt a direct export mode entry strategy to mitigate risks.
Programme Strategy
Product
Indians have a deep appreciation for sweets, especially chocolate, but they prefer treats that are mildly sweet or naturally sweetened rather than overly sugary Their health-conscious mindset drives them to choose premium chocolate with a cocoa content of 70% or higher Additionally, India’s diverse array of spices and flavors influences the chocolate market, leading to unique offerings like Alluvia's export portfolio, which features chocolate products infused with distinctive flavors.
Indians tend to prefer premium chocolates for gifting, reflecting a sense of sophistication As a result, our export product range will feature a dedicated line of chocolates specifically designed for gifting purposes.
Dark Chocolate Single Origin Product Line
● Dark Chocolate 85% cacao less sugar 30g/ 80g
Chocolate with Spicy Product Line
● Dark Chocolate with Orange Peel 30g/80g
● Mystery Mekong Box Alluvia Chocolate - 18 pcs
● Napolitan Chocolate Box Alluvia - 10 pcs
Alluvia Chocolate is a fast-moving consumer goods (FMCG) product known for its delightful taste, texture, and overall sensory experience The brand’s commitment to quality and its strong brand identity serve as significant competitive advantages in the chocolate industry To maintain its exceptional flavor and high standards, Alluvia Chocolate closely standardizes the key elements that contribute to the quality of its products.
When sourcing ingredients, it is essential to ensure they come from government-regulated agricultural regions Furthermore, these products must be cultivated in accordance with international standards and hold UTZ quality certification.
● Finished Product Quality:The chocolate must exhibit a glossy appearance, carry the subtle bitter fragrance of roasted cocoa beans, provide a smooth and rich mouthfeel, and offer a delightful taste when sampled.
● Country of Origin: All ingredients must originate from Vietnam, a region known for producing some of the world's finest cocoa beans.
● Production Process: Alluvia Chocolate must be handcrafted with rigorous oversight by skilled artisans at every stage of the chocolate production process within the factory.
When competitive advantages retain customers, product attributes become essential in attracting customers to make a purchase These attributes can be adjusted to align with the preferences of Indian consumers:
Indians are drawn to vibrant and visually appealing packaging, making it crucial for products to stand out Alluvia Chocolate's intricately designed and aesthetically pleasing packaging aligns perfectly with this preference By maintaining the same eye-catching design as its domestic counterpart, the product ensures it captures consumer attention effectively.
Indians have a strong preference for sweet flavors and enjoy chocolate products infused with additional tastes such as orange, cinnamon, and ginger To effectively appeal to Indian consumers, it is essential to adapt these offerings to align with their unique taste preferences.
Founded in 2013, Alluvia Chocolatier has established itself in the competitive chocolate industry, particularly through its successful exports to Japan, one of the most discerning consumer markets globally Leveraging its experience and strong brand identity, Alluvia is committed to maintaining brand ownership and expanding its presence in international markets.
Alluvia aims to position Vietnamese chocolate on the global stage by establishing a strong brand presence through the ownership of retail stores in international markets By directly managing its brand identity from the outset, Alluvia is committed to building recognition and fostering a unique image for Vietnamese chocolate worldwide.
Price
India's homegrown chocolate brands, such as Paul and Mike, Anuttama, Mason & Co, and Nalluvia, have gained international recognition for their exceptional quality and sustainable sourcing practices These brands have earned prestigious awards and established a strong presence in the global chocolate market.
Alluvia's bean-to-bar products offer a competitive price range of ₹55 to ₹148 (16,000 to 44,000 VND), making them more affordable than other Indian chocolate brands Additionally, the reduction of export taxes to 5% under the AIFTA agreement, compared to the previous 18%, further enhances their pricing advantage With the Indian exchange rate being 295.97 higher than Vietnam's, Alluvia's penetration pricing strategy is a strategic choice to attract consumers and boost market presence.
Alluvia's bean-to-bar products will be priced 20,000 VND higher in the Indian market than in Vietnam, yet they remain more affordable than competitor brands This price increase will help cover export costs and support marketing efforts in India According to Entrepreneur magazine, building brand trust takes about three years, and economic fluctuations could pose challenges for Alluvia's exports To foster consumer trust during this critical period, Alluvia should implement a penetration pricing strategy in its first three years of exporting.
Indians have a preference for dark chocolate with 70% cocoa content or higher, often enjoying it with added spices and flavorings To gauge customer reactions and encourage increased purchases, Alluvia plans to introduce a bean-to-bar dark chocolate with spices as part of a promotional combo during its first year of export to India.
● Single Dark Chocolate Origin 70%/ 85% 80g + Flavoured Chocolate 30g (ginger, orange peel, pepper, green tea, coffee): save 10% compared to buy single product.
● Single Dark Chocolate Origin 70%/ 85% 80g + 80g ( other taste): save 15% compared to buy single product.
Place
3.1 Direct - selling to big retailer
Criteria for evaluating and selecting major retailers to partner with Alluvia Chocolate:
The number of stores operated by a distributor is vital for effective market coverage A distributor with an extensive network can enhance a company's reach across broader geographical areas, thereby boosting brand visibility and improving consumer accessibility.
● Geographical Location:This factor indicates how many strategic locations with high concentration of target consumers that the distributor can access.
● Product Range: The diversity of products sold is also an important factor A wide product range helps attract different types of customers and increases sales.
The scale for evaluating potential distributors is presented as the following:
After collecting the data, our group has obtained the following assessment results:
Alluvia Chocolate should select Reliance Retail as its retail partner due to its extensive store network, which provides broad market access This partnership will enable Alluvia Chocolate to connect with a larger customer base and boost sales Additionally, Reliance Retail aligns well with premium chocolate offerings, allowing Alluvia Chocolate to effectively differentiate and enhance the uniqueness of its products.
Alluvia Chocolate aims to enhance its global brand presence by establishing representative offices in India, which will facilitate promotional efforts, manage export activities, and prepare for market expansion If business conditions remain favorable, the company plans to open its first office in India within two years of starting exports.
After launching a representative office, Alluvia can explore selling products through diverse online channels, including websites, apps, and e-commerce platforms With the significant growth of e-commerce in India, this strategy will enable Alluvia to capitalize on the expanding online market and connect with a broader customer base.
Promotion
A recent report by The Hindu reveals that 52% of Indians engage with news online daily, highlighting a significant shift towards digital media consumption Furthermore, 71% of the population expresses a keen interest in staying informed about national, state, and local events.
Alluvia plans to promote its brand through prominent online newspapers like Aajtak, The Hindu, and Times of India within the next three months by commissioning articles and covering the associated costs This strategy mirrors successful approaches taken by well-known homegrown chocolate brands, including Paul and Mike and Soklet.
Point-of-sale displays serve as a powerful marketing tool that captivates customers and enhances brand visibility, making them a popular choice among major brands In a competitive market, utilizing eye-catching point-of-sale displays can help Alluvia distinguish itself as it enters supermarkets for the first time.
Alluvia will have a dedicated booth in the supermarket's confectionery section, staffed by a trained employee knowledgeable about the products This booth will operate for one month, open two days a week on Fridays and Sundays, to engage customers and encourage them to sample Alluvia products.
The Alluvia divider effectively distinguishes its products from competitors when positioned centrally on the counter, enhancing their visibility and appeal Additionally, the storage of dividers will occur within six months from the initial shelf placement of the products.
Alluvia products will be strategically positioned at checkout counters, ensuring that customers notice them as they approach the register This initiative will take effect within three months of the product's initial launch on store shelves.
Alluvia Vietnam plans to engage with supermarket managers to install POS displays and negotiate competitive pricing for long-term placement.
Create a responsive and user-friendly website that highlights your chocolate products through high-quality images and comprehensive descriptions Incorporate Indian payment methods and secure the site with SSL to ensure safe online transactions.
Optimize your website for Indian search engines and keywords related to chocolate and confectionery This will improve your visibility and organic traffic from India.
To enhance your social media presence in India, establish and actively manage profiles on popular platforms such as Facebook, Instagram, and Twitter Regularly share attractive images of your chocolates, engage with your audience, and post content that resonates with Indian culture and festive occasions.
Paid Advertising: Run targeted social media ad campaigns in India to reach a broader audience Use demographic and interest-based targeting to reach potential customers interested in chocolate and sweets.
Hire or partner with local sales representatives in India who understand the market and can personally introduce your products to potential distributors, retailers, and clients.
Participation: Identify relevant trade fairs and exhibitions in India, such as the annual India International Chocolate Festival Reserve a booth and prepare an attractive display of your chocolate products.
Product Sampling: Offer product samples and tastings to visitors at these events.Engage with potential distributors and retailers to discuss partnerships.
Control Marketing Programme
Budget
Allowances (2% total revenue) 14 millions 16 millions
Alluvia Chocolate is poised to launch in the Indian market, aiming for a revenue of 700 million VND in its first year and 800 million VND in the second year With a projected return rate of 2% due to high-quality craftsmanship and effective logistics, the anticipated net revenue after returns would be 686 million VND in the first year and 784 million VND in the second year.
Alluvia Chocolate is projected to achieve a gross profit margin of 5% in its inaugural year and 8% in the second year, leveraging its product characteristics and competitive advantages Consequently, the operational funds for Alluvia will amount to 95% of the net revenue, totaling 651.7 million VND in the first year, and 92% of the net revenue, reaching 721.28 million VND in the subsequent year.
Alluvia's chocolate products are crafted from pure cocoa, leading to high raw material costs Furthermore, exporting to India involves additional expenses, including import duties.
Total cost (% of net sales) 95% 92%
Sale cost (commissions for retailer, salaries, training, conferences…)
Consumer marketing cost (social media, online newspapers, other internet costs…)
Trade marketing cost (trade fairs, exhibitions) 15% 5% transportation costs Therefore, the variable cost of the product can account for up to 40% of the total revenue.
Alluvia's estimated sales cost is 30% due to its partnership with a large retailer in India, which enhances customer access but typically demands higher commissions Consequently, the brand anticipates retaining only 5% of its profit, necessitating a robust sales strategy to counterbalance the elevated costs If Alluvia can negotiate a fair commission with the retailer and boost its sales volume, the 30% sales cost may be manageable.
In India, the relatively low usage of social media among the population is anticipated to lead to reduced consumer marketing expenses, which are projected to represent around 10% of the company's overall revenue, contrasting with higher sales costs.
Sponsoring events, training sales personnel, and providing sales support generally account for a minor fraction of total marketing costs For companies that rely on retailers for product distribution, such as Alluvia, a 15% budget allocation is viewed as a sensible estimate.
Variable costs can remain at 40% for several reasons:
● The cost of raw materials is already high, it may remain relatively stable unless there are significant fluctuations in cocoa prices or other cost drivers.
● Alluvia continues to source raw materials from the same suppliers and follows consistent quality and cost-effective sourcing practices, which can lead to stable variable costs.
Exporting to India involves additional expenses, including transportation costs and import duties However, these costs tend to be relatively predictable and stable, barring any significant changes in trade regulations or logistics.
In Year 2, the business strategy has evolved with the introduction of a new product line, a revised pricing strategy, the potential establishment of a representative office, and an exploration of e-commerce platforms alongside other retail partnerships.
Therefore, sales costs in year 2 is likely to decrease to 25% due to these following reasons:
In Year 2, the launch of the new product line, including Dark Chocolate with Spicy and the Gift Collection, shows strong market performance, resulting in increased sales volume This success may help offset sales costs, enhancing overall profitability and market acceptance.
Implementing an effective pricing strategy, like bundle pricing, can lead to increased average order values and profit margins, which may offset the effects of elevated commission rates imposed by major retailers.
● The opening of a representative office can lead to greater efficiency in reaching customers and driving sales, and then lead to cost savings.
Alluvia is exploring the option of selling on e-commerce platforms and revising its promotional strategy, including SEO, website enhancements, and social media engagement, which will increase marketing expenses It is projected that consumer marketing costs will account for 22% of the total revenue for the year.
In its second year, Alluvia will prioritize enhancing its digital presence, leading to a potential reduction in trade marketing expenses like fairs, exhibitions, and in-store promotions Consequently, the recommended budget allocation for trade marketing in year 2 is set at 5%.
Control Activities
Designing effective control activities for a Vietnamese chocolate manufacturer exporting to India, while leveraging their experience in Japan and participation in French trade shows, requires a strategic focus on compliance, operational efficiency, and overall success Key control activities should include rigorous compliance checks, streamlined logistics management, and targeted market research to navigate the Indian market effectively.
● Establish a dedicated compliance team to stay updated with Indian import regulations, including customs, labeling, and food safety standards.
● Implement a compliance checklist for all exported products to ensure they meet Indian standards.
● Maintain strict quality control procedures in line with international standards to ensure that products meet customer expectations.
● Conduct regular quality audits and inspections of the production process.
● Implement an efficient supply chain management system to monitor the movement of goods from the manufacturing facility to the Indian market.
● Establish a reliable and transparent logistics partner for timely delivery.
● Conduct thorough market research in India to understand consumer preferences and cultural nuances.
● Modify product offerings and packaging to suit the Indian market.
● Build relationships with distributors, retailers, and sales agents in India who understand local markets.
● Regularly assess distributor performance and ensure adherence to company standards.
● Implement inventory management systems to track stock levels in India.
● Develop reorder points and safety stock levels to avoid stockouts.
● Regularly review pricing strategies to remain competitive while maintaining profitability.
● Monitor currency exchange rates for potential impacts on pricing.
● Create a system for gathering feedback from Indian customers to identify areas for improvement.
● Act on feedback promptly to enhance product quality and customer satisfaction.
● Review marketing materials and campaigns to ensure they are culturally sensitive and align with the Indian market.
● Monitor the effectiveness of marketing campaigns in India through key performance indicators (KPIs).
● Evaluate the ROI (Return on Investment) for participation in Indian trade shows and exhibitions.
● Establish clear goals for each event, including lead generation and brand visibility.
Implementing effective control activities is crucial for ensuring smooth and compliant export operations to India These measures will uphold quality standards and tailor offerings to meet local market demands Ongoing monitoring and adjustments are vital for successfully exporting chocolate to India, allowing for effective risk management and the maximization of opportunities.
The Indian market presents a significant opportunity for Alluvia Chocolate, as highlighted by our in-depth analysis Our marketing strategy is designed to effectively introduce the value of Alluvia Chocolate's offerings to this culturally diverse and experience-seeking nation With a steadfast commitment to our core values, Alluvia Chocolate is poised to provide not only premium chocolate products but also a memorable cultural experience that resonates with consumers over time.
Our strategy focuses on deeply engaging with the local culture, monitoring emerging trends, valuing customer feedback, and consistently innovating new chocolate lines tailored to Indian tastes The 4Ps Programme—Product, Price, Place, and Promotion—demonstrates our thorough market analysis and dedication to understanding the distinctiveness of the Indian market as we make our entry.
To successfully expand internationally, particularly into the Indian market, Alluvia Chocolate must combine enthusiasm and expertise with a deep understanding of competitors and market dynamics While entering this market is a viable strategy, achieving sustainable, long-term success will hinge on our capacity to adapt, innovate, and maintain flexibility.
In summary, Alluvia Chocolate is set to make a notable entrance into the Indian market By aligning with our core values, understanding local trends, and embracing Indian culture, we are dedicated to creating a successful footprint in this dynamic market While challenges may arise, our adaptability and determination will enable us to flourish and build a lasting legacy in India.
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