(Tiểu luận) topic analyzing strategy of saigon beer alcohol andbeverage joint stock corporation (sabeco)

Trang 1 FOREIGN TRADE UNIVERSITYFACULTY OF INTERNATIONAL EDUCATIONFinal Report Topic: Analyzing strategy of Saigon Beer Alcohol andBeverage Joint Stock Corporation Sabeco Class: F – UOB

FOREIGN TRADE UNIVERSITY

FACULTY OF INTERNATIONAL EDUCATION

Final Report Topic: Analyzing strategy of Saigon Beer Alcohol and

Beverage Joint Stock Corporation (Sabeco)

Class: F – UOB – 13A Subject teacher: Nguyen Hai Ninh

Student name:

Pham Viet BachTrinh Tien VietNguyen Minh HieuNguyen Bao NgocCao Minh Hoang

First and foremost, we would like to express my sincere gratitude to our SubjectTeacher – Assoc Prof Dr Nguyen Hai Ninh, for his continuous support duringour report in terms of his patience, motivation and vast knowledge We havereceived great help through his guidance and we could not have asked for a betterteacher for our report

We would also like to thank my family and friends for always supporting,believing in us and actually took the time out to read this lengthy report!

TABLE OF CONTENT

1 INTRODUCTION

Beer is one of the most potential markets and shows extremely positive changesand development after the Covid-19 pandemic Government policies as well asaltering in consumer buying habits are factors which force beverage tradingcompanies in general and alcoholic beverages in particular must come up withspecific strategies to catch up with the consumer market This report will point outthe internal and external influences of one of the largest beer business in Vietnam -Saigon Beer Alcohol and Beverage Joint Stock Corporation (Sabeco) before andafter the Covid-19 pandemic From there, some specific recommendation areproposed

2 BEER INDUSTRY BACKGROUND

2.1 World beer market

2.1.1 Overview

The global market for beer is an extremely competitive and dynamic business that

is driven by a variety of variables including the preferences of consumers, theshifting demographics of the population, and the conditions of the economy Themarket has seen tremendous expansion over the past few years, driven by theincreasing popularity of craft beer and changing consumer preferences towardspremium and low-calorie beverages This growth has been driven by the increasingpopularity of craft beer

The market for beer may be broken down into several distinct submarketsaccording to the product type, packaging, distribution channel, and geographicregion Lager, ale, stout, and porter, as well as other types of beers, make up theproduct type section Lager beer is the most common style of beer consumed allover the world and accounts for a major portion of the market Cans, bottles, anddraught beer all fall under the category of packaging The on-trade and off-tradechannels are also included in the category pertaining to distribution channels.The global market for beer may be broken down into the following regions based

on geography: North America, Europe, Asia Pacific, Latin America, and the

Middle East and Africa Germany is both the greatest producer and consumer ofbeer in Europe, making it the largest beer market in the world The beer market inEurope is the largest market overall The Asia-Pacific area is anticipated toexperience the greatest rate of growth over the next few years This is due to theregion's rapidly expanding population, rising per capita earnings, and shiftingpreferences among

2.1.2 Revenue

According to Statista, revenue in the Beer segment amounts to US$610.00bn in

2023 The market is expected to grow annually by 5.44% (CAGR 2023-2027) [6]

Alcoholic Beer and Non – Alcoholic Beer revenue from 2014 to Jan 2022, predicted from 2023 to 2027

(In billion USD)The Alcoholic beer revenue witnessed a downward trend in the period of 2014 to

2016 before slightly increased by 35 billion USD in the next 4 years However,with the disadvantageous affect of the Covid 19 – pandemic which limitcustomer’s demand as well as mobility, the data plummeted from 613.50 to 509.90

in 2020 The sign of the beer market recovery can be seen with a gradual increaseuntil 2022 and it is expected to rocket in the following 5 years [7]

The demand for these products across the globe has increased rapidly, eliciting acorresponding increase in the overall market for flavored beer Furthermore, theemergence of new brewing technologies in developing economies has alsocontributed to increased consumption patterns in subsequent generations Due tothis, there has been an increase in overall sales growth in the market.

2.1.3 Sale channel

Percentage of two beer sale channel from 2017 to 2022, predicted from 2023 to 2025 [8]

As can be seen, offline channel was the always the preferable choice by themajority of customers with the account for more than 90% in the whole period.However, online channel witnessed a gradual increasing trend Starting at thelowest point with 2.3% in the first year of data collection, this data reached its peakwith 6.9% in 2021, which is the most affected year by Covid – 19 pandemic Due tothe social distancing policies as well as the mobility limitation, it is understandablefor the growing trend of using online channel for buying beer Nevertheless, thepercentage of online channel after Covid – 19 are approximately two times higherthan before the pandemic and it is expected to remain unchanged until 2025 The market grew exponentially post the COVID-19 pandemic due to the opening ofnew bars, pubs, and restaurants and increased in-home consumption Similarly,

Pauline cullen the key

to ielts writing task 2International

32

cans and pint beer sales have witnessed an overwhelming demand due to theirconvenience Over the medium term, changing lifestyles, the increasingconsumption rate of alcoholic drinks, rapid urbanization, and high disposableincomes are expected to drive the global beer market Introducing new ingredientsand innovative combinations combining salty, fruity, and tart flavors in craft beershave increased its appeal among the millennial crowd.

2.2 Vietnamese beer market

2.2.1 Overview of Vietnamese beer market

Beer is among the most popular beverages in Vietnam Enjoying a cold glass of

“bia hoi", a type of draught beer, on the street stalls has become an iconic andcommunal part of the Vietnamese drinking culture, especially in summer Thepopularity of this beverage in Vietnam has made the country one of the largest beer-consuming nations worldwide Besides, Vietnam also is among the top ten beerproducers globally

Fierce competition between domestic and foreign brands

Bia hoi – fresh beer, often brewed informally and privately, is a very affordabledrink On the other hand, thanks to increasing disposable income, branded bottledand draft beer has become more common among Vietnamese for both out-of-homeand in-home consumption despite the higher price tags The market for brandedbeer in Vietnam has seen fierce competition among both international and localbreweries In 2021, the Dutch brewing company Heineken ousted ThaiBev’sSabeco to become the leading beer brand by market share after years of being insecond place Although Heineken’s market share was only two percent higher thanthat of Sabeco, its distributor, Heineken Trading, recorded significantly higherrevenue than its largest competitor Noticeably, the popularity of beer brands inVietnam varies from region to region In that year, the Ha Noi-based breweryHabeco held around 11 percent of the total share of the market, as the most popularbeer choice in northern Vietnam

Báo cáo thực tập giữakhóa - sv Nguyễn Min…International

27

2.2.2 The recovery of Vietnames market after Covid – 19

Growth in retail goods from January to July in 2022 (in thousand billion VND)

According to the General Statistics Office [9], the total retail sales of consumergoods and services in July in 2022 was estimated at VND 486,000 billion, up 2.4%over the previous month and up 42.6% over the same period last year - 2021 Thisscale and growth rate is even higher than the same period in the years before theCovid-19 epidemic

In the first 7 months of 2022, total retail sales of consumer goods and services wasestimated at VND 3,205 billion, up 16% over the same period

According to the General Statistics Office, the accumulated domestic beer output

in the first five months of 2022 has reached 2.03 billion liters, an increase of nearly19% compared to the same period of 2021 and an increase of 6% compared to thesame period in 2019 before the epidemic

With the above trend, a series of enterprises in this industry have recorded highgrowth in revenue and profit in the first half of 2022 Even, the business results ofmany brewers have increased beyond the pre-epidemic period

2.2.3 The Recovery of Vietnamese beer market

The COVID-19 pandemic has hit the beer industry in Vietnam hard As the sales ofthis beverage rely heavily on out-of-home consumption, the revenue of the beermarket has suffered during the imposed lockdowns in the country In the first year

of the pandemic, the average beer consumption per capita went down by overseven liters compared to the year before As a result, in the second quarter of 2021,although most listed beer producers recorded positive revenues, many of them had

no profit or even faced losses Due to the prolonged impact of the pandemic in thecountry, even some of the largest beer brewers suffered a reduction in their sales in

2021, such as in the case of Sabeco On the other hand, as Vietnam has removedmost of its COVID-19 restrictions from the beginning of 2022, the food andbeverages industry has been slowly returning to its pre-pandemic level, signalingrecovery for the beer industry

Revenue of the beer market in Vietnam from 2012 to 2022, predicted from 2023 to 2025 [10]With a large coverage and specific industry, the food and beverage (F&B) industry

in general and the beer sector in particular are very sensitive to wide-ranging impacts of the Covid-19 epidemic

In 2020, this market will be affected by the double impact of regulations onprevention of harmful effects of alcohol under Decree 100/2019 (effective fromJanuary 1, 2020) and the Covid-19 epidemic Along with products in the F&Bindustry, beer consumption demand was negatively affected with consumptionvolume in the first 3 quarters decreasing by 3.6% respectively; 22.9% and 11.9%over the same period last year

By 2021, in the third quarter, General Statistics Office [11] shows that total beerproduction has decreased by 33% over the same period, with nearly 100% of beerbeing restricted for distribution in August-September in Ho Chi Minh City and HaNoi, both inner and southern provinces Meanwhile, Nielsen estimates beerdemand fell 42% this quarter this quarter compared to the same period last year

It was not until the fourth quarter of 2021, when the basic epidemic was controlledand domestic consumption activities recovered, that the beer industry recordedpositive growth again.

2.2.4 How 100/2019 Decree affect the Vietnamese beer market

Decree 100/2019/ND-CP implemented by the Vietnamese Government to applysevere punishment to the drunk driver, followed by COVID-19 pandemic, hascaused a devastating impact on the beer industry The fine for car owners can be up

to 40 million VND and the license is revoked for 24 months, the highest fine formotorbikes can be up to 8 million VND and stripped of the license for 6 months

Ratio of penalty to average Vietnamese person’s monthly income (According to KPMG) [12]Because the government has such a high level of punishment, people's psychology have been affected, leading to the trend of drinking beer outside is gradually decreasing, strongly affecting beer consumption in Vietnam

2.2.5 Beer distribution trends change after the Covid-19 pandemic

The distribution of beer and alcoholic beverages is divided into 2 main channels: on-trade and off-trade In particular, off-trade includes modern channels such as supermarkets, convenience stores, minimarts, e-commerce sites and traditional channels such as groceries while on-trade are channels that customers come to buy and use on the spot

The dual impact of the Covid pandemic and Decree 100 has caused the trend of beer consumption from on-trade to off-trade, Heineken, Sabeco, Habeco, Carlsbergand foreign breweries all promote sales through e-commerce channels such as Tiki,Lazada, Shopee with many attractive incentives During that period, Heineken launched 2 new products to catch up with consumer trends, the first was Heineken 0.0 – non-alcoholic, low-calorie beer, advertised as a product that can be enjoyed

at all times of the day without worrying about laws banning alcohol in traffic.Next, Vietnamese beer products in the popular segment were born to hit the Vietnamese national spirit, becoming a representative brand for sponsorship of SeaGames 31 and directly competing with Sabeco's familiar popular products The beer market is predicted to only be able to return to the consumption volume of thepre-Covid-19 epidemic (in 2019) starting from 2023, because the economy has not fully recovered, putting pressure on people's incomes Regarding the outlook of thebeer industry, Euromonitor is still optimistic when forecasting the CAGR of Vietnam's beer industry in the period of 2021-2026 to reach 10%

Off trade

According to a report by Euromonitor International, the beer market in Vietnam has experienced significant growth in the off-trade (retail) sector in 2020, due to the impact of the COVID-19 pandemic It is the beer industry's most extensive sales channel, which includes grocery stores, supermarkets and e-commerce websites

According to Euromonitor International, in 2020, the beer off-trade market in Vietnam reached a value of 18.3 billion USD, up 8.3% compared to 2019 Meanwhile, the on-trade market fell 37.2% as bars, restaurants and other entertainment venues were closed for months to reduce the spread of COVID-19

In the off-trade sector, SABECO and Heineken remain the two largest beer brands,accounting for about 80% of the beer market share in Vietnam However, international beer brands such as Carlsberg, Asahi and Budweiser have also experienced growth in the beer market in Vietnam in 2020.

According to a Nielsen report [14], beer retail sales in Vietnam increased by 10.1%

in Q2 2020, reaching 131 million liters, of which SABECO and Heineken accounted for about 80% of the market share In particular, SABECO achieved a year-on-year growth of 10.4%, while Heineken grew 4.4%

This shows that, although the COVID-19 pandemic has affected many industries globally, the beer off-trade market in Vietnam still has significant growth SABECO and Heineken remain the two largest beer brands in Vietnam and continue to compete fiercely for their market share

2.2.6 Sabeco's revenue

Record revenue in 2022

In 2022, Sabeco achieved a revenue of VND 35,235 billion, equivalent to anaverage of more than VND 96.5 billion per day, up 33% compared to 2021 [15]According to the newly released financial report, Saigon Beer - Alcohol - BeverageJoint Stock Corporation (Sabeco) recorded a revenue of more than 10,100 billionVND in the fourth quarter of 2022, a sharp increase compared to the first threequarters of the year As a result, the accumulated annual revenue of the owner ofthe Saigon beer brand reached more than VND 35,325 billion

This figure is superior to the previous two years and is equal to about 92% of thepre-epidemic level (in 2019) Revenue increased by 33% compared to 2021, butCOGS only increased by 29%, causing Sabeco's gross profit to increase sharply,from 7,600 billion VND to over 10,770 billion VND

Sabeco’s revenue before and after taxes recored from 2018 to 2022

"The company has improved production efficiency, implemented cost-savingmeasures, helping to reduce the impact of higher input costs At the same time,many support and marketing programs also help promote the business numbers forbrands," said Sabeco Last year, Sabeco spent more than 3,000 billion VND onadvertising and promotions, an increase of about 870 billion compared to theprevious year and doubled in 2019

After deducting expenses, the enterprise holding 40% of the beer market inVietnam has a profit after tax of approximately VND 5,500 billion This is thehighest level since Sabeco returned to Thai people at the end of 2017

Decline in revenue in 2023

The consolidated financial statements for the first quarter of 2023 have just beenannounced by Sabeco, showing that the net revenue of the beer giant decreased by15% over the same period, reaching more than VND 6,200 billion After deductingthe cost of goods sold, SAB's gross profit was more than 1,900 billion dong, 12%lower than the same period last year [16]

Sabeco's revenue recorded quarterlyThe main reason for lower Q1/2023 business results came from the weakeningmarket after the Lunar New Year period In particular, in the context of Decree100/CP on penalties for motorbike drivers who use alcohol, beer are tightened inkey cities, leading to people going out to drink beer less.

Beside, Financial income of Sabeco increased by 57%, reaching more than VND

358 billion, financial expenses nearly doubled In addition, selling andadministrative expenses increased In which, spending on advertising andpromotion accounted for more than half of the financial cost structure, recordingmore than VND 479 billion, up 22% over the same period last year

Instability in the price of input materials of key ingredients for beer making such asmalt, or an increase in prices in transportation and logistics services due to theimpact of the conflict between Russia and Ukraine are also considered as animportant factor of the causes leading to the higher input cost

According to the newly published by CafeF [13], it is expected that some key rawmaterials for beer production will continue to increase in 2023 such as the price offilter aid powder increasing by about 25%, the price of Houblon flowers by about

10%, the price of rice increased by about 4%, sugar prices increased by about 8%.Particularly for Malt, which is an input material that accounts for a largeproportion of production costs, world Malt remains high, the input Malt price in

2023 will increase by about 60% compared to the average purchase price in 2022

At the end of the first quarter, SAB's net profit was more than 967 billion dong,down 17% over the same period This is also the first quarter after 5 consecutivequarters (since the fourth quarter of 2021), SAB has a net profit of less than trilliondong

3 BUSINESS INSIDER ANALYSIS 3.1 Overview:

3.1.1 History of the company SABECO:

Starting from a small-scale brewery founded by Mr Victor Larue, a Frenchman inSaigon in 1875, which is now the Saigon Brewery, this place is still anarchitectural icon unique, existing in the heart of the most modern city inVietnam This small brewery after the reunification of the country was renamed bythe government to Saigon Brewery [1]

3.1.2 Development process of SABECO company:

Overcoming many difficulties, the company has continuously launched a series ofbrands that are loved by consumers SABECO 's memorable milestones can bementioned such as in 1985, Saigon Brewery officially installed the first canningline in Vietnam and launched canned beer with the brand name Saigon PremiumExport Since then, until 2017, SABECO has continuously launched high-qualityproducts such as Beer Saigon Export, Beer Saigon Lager, Beer 333, Beer SaigonSpecial

In 1993, Saigon Brewery was renamed Saigon Beer Company, and in 2008 thecompany was transformed into a co-business model SABECOwas officially established After that, Saigon - Cu Chi Brewery was officiallyinaugurated and this was considered the most modern factory in Southeast Asia atthat time

SABECO has been constantly growing and at present has a total of 44 subsidiariesand affiliated companies which include 26 factories and 10 regional tradingcompanies The whole system of companies has created stable jobs for the number

of 10 thousand direct workers and 4-6 times indirect workers

Up to now, the total system capacity of SABECO has reached 2 billion liters ofbeer/per year along with an extensive distribution system withover 145,000 consumption channels nationwide SABECO 's product portfolio iscurrently quite rich, meeting the extremely diverse needs of domestic and foreigncustomers

Currently, all products of SABECO are present in all provinces and cities of ourcountry and are exported to 38 countries and territories around the world Based onthe extremely unique taste and excellent quality, SABECO 's products are alwaysthe first choice of consumers, as well as reaping many prestigious awards in bothcountries: domestically and internationally

3.2 Brand evaluation method:

Fulfill obligations to the State based on transparency in business.

Actively participate in community activities

Ensure the development of international integration

Sticking: Sticking to a friendly, sharing environment Where people areempowered to learn, create and contribute to the joy of success

Continuous improvement: We are not satisfied with the present and arealways dreaming of rising, learning, creating, and innovating to meet

constantly changing needs Continuous learning, creativity, and innovationare our styles.

3.3 Marketing Strategy Analysis (4P):

3.3.1 Product:

Premium quality:

For more than 35 years, Saigon Beer - Alcohol - Beverage Corporation (SABECO) has dominated the beer industry Since launching Saigon Export

in 1983, they have expanded to 333 and most recently, Saigon Special in

2000 Additionally, the newest product, Saigon Gold, is causing a stir in the market with exquisite tastes as of January 2018 Despite having unique qualities, each brand has a well-known flavor all its own

Products are the main objective that Sabeco always strives to maintain market share and avoid being eliminated Towards good quality and healthful ingredients above everything The design is intended to be practical, fit in the hand, and be enjoyable Unique design with opulent white, sophisticated silver, delicate gold, and red hues Beautiful design is therefore a significant competitive advantage

An indispensable drink in meetings with business partners, and friends, and even in each family meal The element "Premium" is included in Sabeco's marketing strategy when attaching high-end elements to products to meet theneeds and tastes of customers

Saigon Export, Saigon Lager, 333, Saigon Special, and Saigon Gold are the most popular products, which can be easily purchased at supermarkets and convenience stores or distributors

Rigorous testing and manufacturing procedures

Grinding: The malt grains are ground to make it simpler to dissolve the mixture in water Enzymes are simultaneously released to catalyze hydrolysis

Malt crucible: macromolecules are hydrolyzed into fermentable molecules The sweetness produced thereby is known as saccharification

Pot wort filter: The sugar solution and malt grain husk will be separated

Boiling pot: To get the distinctive bitter flavor, sugar, and hops are cooked together Precipitation or evaporation will eliminate unwanted pollutants from the environment and then sterilize the fluid.

Sedimentation pot: Take out the petals of the precipitated hop from the previous step

Quick cooling: After boiling, the wort is brought to the right temperature for yeast to work

Fermentation tank: Cold wort along with yeast is put into the tank for fermentation From there, create alcohol, CO2 gas, and aromatic

compounds When finished, the yeast is recovered from the tank for reuse The beer juice will be sub-fermented in the brewing tank

Tank brewing beer: Metabolizing, removing unwanted compounds such as diacetyl When the substance decreases to a certain content and reaches a certain time, the incubation ends

Long cooling: Deep cooling down to a negative temperature to create cold residue

Filtration in beer: Yeast, cold residue, … will be removed to make beer transparent

Clear beer tank: Beer after filtering is placed in a clear beer tank

Extraction of beer: Beer is extracted into packages by the volume of each type, market strategy, and consumer tastes in each place

3.3.2 Price:

Penetration Pricing Strategy:

Price has a significant role in influencing customer purchases It is a strongsource of market competition for companies, particularly Sabeco Fromthere, help businesses break through revenue According to McKinsey, a 1%price improvement increases profits by 6% [3]

Sabeco has used the Penetration Pricing Strategy to fight with the myriadrivals it faces today and hold onto the top market share Specifically, whenlaunching new products and services to the market, brands will offer lowprices in the first offering to attract customers to experience At the sametime, attempt to retain customers when prices return to normal

Sabeco's valuation is based on market and price discrimination strategy:

To determine the price, SABECO used a cost-based estimation frameworkfor Saigon Lager They first create the product, determine the cost, then setthe price based on the cost, and finally convince the customer of the value ofSaigon Lager Currently, Saigon Lager is facing big competition with bigcompetitors such as HEINEKEN, Budweiser, and others, hence the productpricing is set at the same level as the competition Because the cost can not

be either low or too high relative to the value that rivals are offering, marketpricing is a component that cannot be overlooked if you want to determinethe proper price

Sabeco also uses a Price Discrimination strategy, as they have differentprices when selling via various channels Products are more expensive whenthey are delivered to clients due to the several tiers of distribution Indirectsales are used to market Saigon Lager Saigon Lager is sold through indirectsales They have wholesalers, retailers, and agents covering all regions toassure customers of Saigon Lager's availability

Valuation based on perceived value:

Depending on the buyer's perception of value, the brand has an appropriatevaluation Sabeco intends to join the market at a low price rather than setting ahigh price to filter the market

For consumers: Sabeco targets middle and low prices to accommodate themajority of Vietnamese residents Currently, Sabeco's products are pricedfrom 10,000 VND / 330ml can to 255,000 VND / carton of 24 330ml cans

In addition, there are also some segmented products such as Saigon Specialfor middle-class customers and Red Saigon for average customers

For agents and stores:

o Discount pricing: Sabeco will adjust a preferential discount price forcustomers who pay ahead of time in large volumes

o Differentiated pricing by product type: Each Sabeco product is priceddifferently with corresponding costs.

o Pricing by product type: Depending on the brand, form, size, features,etc., there will be different pricing

The distribution network may be viewed as a bridge that connects theproduction and consumption of beer About 700 million liters of beer areproduced by Sabeco annually, and their goods are distributed via 40,000routes The Saigon Beer Transport Joint Stock Company is a key player inthe effort to deliver goods to customers throughout Vietnam in the safestmanner possible while preserving the standard of the goods With 39 storesand warehouses spread across several sites, the shipping process will beimpacted by the weather and roads, which might lower the quality of thegoods The beer bottle must maintain its form without shattering for thefinest beer quality, which is a challenging procedure to achieve

The San Miguel Glass Company consistently produces high-quality bottles,and they are also committed to transporting the bottles The San MiguelCompany's slogan is "Trucks are like Kids," and as a result, they constantlymaintain their trucks clean The floor and trunk are always thoroughlyexamined to guarantee that the transportation process is always clean.Nothing negative will occur Trucks that transport alcohol are prohibitedfrom transporting other goods Once the truck has been transported, cautionshould always be taken to ensure that the product within is not impacted bythe elements or other factors that might reduce the product's quality

Saigon Beer's commitment to bringing customers the highest quality beer products

is in line with Sabeco's quality standards The indirect marketing channels are used

to arrange Sabeco's distribution channels With a system of breweries inwarehouses across Vietnam, Sabeco's products are delivered to consumers throughintermediaries and retailers across the country such as restaurants, bars, and shops.convenience goods etc, thereby, increasing the ability to attract customers andcoverage in the market Sabeco has invested in factories in Song Lam, QuangNgai, Cu Chi, Vinh Long, and Bac Lieu to build a stronger business that can notonly meet domestic demand but also foreign markets such as America, Europe,Australia, Africa, and Asia

On the other hand, in 2012, when things became more difficult compared to 2011,besides the increase in competition between domestic and international beerbrands, the trend of decreasing consumer purchasing rate may affect powerconsumption Therefore, in the first half of the year, Sabeco focused onovercoming obstacles by implementing a variety of effective marketing strategies

In particular, Sabeco has implemented programs to support petroleum suppliers,create a second distribution channel, support traditional channels, take care ofpoints of sale and other trade promotion programs, etc

Distribution value

With a strong domestic and international distribution network led by Sabeco'sBoard of Directors, they are focusing on 4 key values:

Run expansion strategy

Improve the distribution system to penetrate deeper into the domestic market

by coming up with a brand development strategy in line with its strongbusiness and marketing strategy Investment costs for building and branding

up to hundreds of billions annually The distribution system was rebuiltbased on modern models of leading beer corporations Nine tradingcompanies have been established and developed sustainably to stabilize andexpand the nationwide distribution network

Developing export markets: Sabeco is interested in expanding domestic andforeign markets However, Saigon Beer first focuses on satisfying domesticconsumers, so the number of exports in previous years was quite low On the

other hand, Sabeco has built an export marketing plan, in which it takesabout VND 10 billion to build a brand overseas, starting from the SoutheastAsian market - a potential market with Saigon beer consumption as high asLaos and Cambodia.

Consolidate and maintain brand image: To keep the existence anddevelopment of the company, and maintain the trust and support ofcustomers

The program " Bật nắp bia chai Saigon Lager năm 2015"

With the program “Open Lager – your life better” on August 27, 2011, theprogram was present in 19 provinces of South Central and CentralHighlands The prize of this program is up to 40 billion VND Including 20

SH 150 scooters, 350 32-inch Samsung LCD TVs, 5000 cash prizes, and 5.1million bottles of beer

At events "Saigon Night", Sabeco offers many promotions for everyone Inthe spirit of the more the merrier, just order 4 bottles of Saigon Beer Cool,and everyone will be given a dish The more beer, the more incentives, themore fun the meal, very suitable for groups of friends.

Mini-game "Lên Như Rồng - Lên giọng trổ tài ca hát” from October 20 toOctober 30, 2019, took place singing contest with Saigon beer With prizesbeing:

o 5 First Prizes: 1 box of Saigon Beer each + 1 Headphone Headphoneworth more than 1 million VND

o 10 Consolation prizes: 1 box of Saigon Beer each prize

Minigame: “Lên Như Rồng - Sáng tạo như Rồng” from 09/25/2019 to08/20/2019 With the content: complete the following sentence to create acool catchphrase: "Lên Như Rồng - Sáng tạo như Rồng" 10 gifts for 10creative and lucky comments

During the season of Seagame 30, there are many other attractivepromotions, and rewards for everyone when comes to Bia Saigon's shopswhen watching Seagame 30, cheering for the home team to participate in thecompetition

Lucky scratch card program "Lên như Rồng, chiến thắng như Rồng", buySaigon beer 100% win the prize The promotion period is from November 8,

2019, to December 15, 2019 Promotion of change in nature in the form ofwinning scratch

o First Prize: Jacket

o Second prize: T-shirt

Promotion in the form of gifts and products related to Saigon Beer for institutionalcustomers: this form mainly targets distribution channels, especially traditionalchannels that sell beer directly to customers on-site such as bars, restaurants,hotels, beer gardens, etc

3.4 Strategies:

3.4.1 Sustainable development strategy:

Sabeco has the advantage of having a long history of formation and developmentover a hundred years, traditional beer brands for Vietnamese people such as 333,Red SaiGon, and SaiGon Special, especially people in the South Sabeco is one

of the leading beer companies in Vietnam, the business with the largest marketshare is the only domestic producer with a positive output growth in 2016 at a rate

of 9%

Sabeco owns a large number of beer factories with 24 modern factories, anextremely large capacity of about 1.8 billion liters of beer/per year Currentlyranked 17th in the world's leading brewing groups and 3rd in Southeast Asia.Sabeco owns a wide distribution system, with thousands of distributors across thecountry Sabeco's subsidiaries, joint ventures, and associates have beenlisted/traded on the exchange, bringing good business and production results,revenue, and profit growth Beer quality has won many awards from domestic andforeign organizations

Sabeco sponsors charitable and social events as part of its marketing plan toestablish a positive reputation with the general public In order to assist those inneed, Sabeco has instructed units to implement many projects totaling more than 7billion VND in practical social charity Additionally, Sabeco is determined tosupport the Leicester City squad as a sponsor The English Premier League ispopular across the world With such resonance, the corporation generates a sizableamount of cash from fans as a beer brand

3.4.2 Long-term development strategy

To be successful in a business development strategy depends on many factors and

so does Sabeco After more than a century of establishment and development,Sabeco has produced goods that have made a lasting impression on both local andinternational consumers as well as Vietnamese people

Sabeco must now create development plans appropriate for its situation As aresult, over the years Sabeco has continuously innovated and concentrated on long-term investment operations in the industries supported by the consistency of itsstrategy Activities that coordinate supply, transportation, warehousing,manufacturing, and consumption demonstrate civic responsibility

Prominent brands such as SaiGon Special, SaiGon Export, SaiGon Larger, and 333Export have long been trusted by consumers Not content with that, Sabecocontinuously innovates by enhancing the perceptions of its brands and productsthrough a strategy aimed at forging closer ties with customers and constantlyperfecting the distribution system in a professional and modern direction Sabecowill continue to launch new products to broaden its line and meet the demands ofits clients.

Additionally, Sabeco is researching and developing new goods for the wine, softdrink, and beer industries, as well as modernizing product branding and packaging

to distribute items ranging from low-cost to high-end and conducting research.Sabeco focuses extensively on excellent brand and product marketing strategybased on the solid financial foundation and outstanding brand value, reorganizingthe system towards

3.4.3 Competitive Strategy

Along with the "continuous development of product quality" associated with themarketing strategy, promoting the sale of draft beer, rationalizing production,implementing a strategy of saving production costs to lower costs, and improvingthe quality of the beer product competition Sabeco has arranged to produce 3continuous incinerator operations, so the average production of each million liters

of beer saves 6 tons of incinerators Or with automatic brewing for beer to a highconcentration, both contributing to saving electricity, and saving water, includingwages

The goal that companies aim at is product differentiation or, in other words,creating exclusivity in their products to enhance the competition with rivals.Implementation requirements: “Must have strong marketing and R&B humanresources with innovative, creative, and dynamic capabilities In the direction ofSabeco's activities in 2019, the Corporation will focus on promoting the BiaSaigon brand and internationalizing the Bia Saigon brand” Sabeco's Marketingprogram has at least 30 major activities, which are carefully invested by purchasingbeer openers, and glass cups, recruiting 500 female beer marketers, and sewing

uniforms for marketing staff ; sponsor mini football tournaments and hereSabeco will sponsor more sports activities in the community; cultural programs

3.5 Communication Model:

Sabeco always builds a good relationship with the public by using the media sothat the public can better access Sabeco's products Sabeco has earned the trust ofcustomers, achieving the title of "Trusted Brand" for 22 years Saigon beerproducts have been voted by consumers as Vietnamese Goods - High Qualitycontinuously for several years

Sabeco used four main communication tools: advertisement, public relations,promotions (part 2.3.4), and personal selling

Promote new image:

Media campaign “Lên Như Rồng” – change the new look of Saigon-2019 beer

On August 6, 2019, in Ho Chi Minh City, Saigon Beer - Alcohol - NGK JointStock Corporation (SABECO) officially announced the re-launch of the BeerSaigon brand This is an important milestone in the history of the Bia Saigon

brand, kicking off SABECO's strategy of refreshing its image, aiming for optimismfor the future, and being ready to take on new heights.

“Introducing the new look of Bia Saigon is part of an integrated media campaign tore-launch the representative and beloved Vietnamese brand This activity is alsoone of the steps on the strong transformation journey of SABECO” At the sametime, the campaign also reaffirms SABECO's commitment to continue investing inthe Saigon Beer brand, continuing to maintain its position as the pride of Vietnam.Perhaps for Vietnamese people, Bia Saigon has been a name that is no longerstrange, bringing a sense of closeness and familiarity in taste for many generations.This is one of the oldest brands, leading the beer industry in the Vietnam marketwith more than 144 years of history of origin and 43 years of brand building anddevelopment

During that long journey, Saigon Beer - Alcohol - Beverage Corporation(SABECO) has constantly strived to bring to consumers every drop of the freshestand most delicious beer, with traditional values, associated with the history andpeople of Vietnam Recently, SABECO is embarking on a plan to change its brandidentity, as an important milestone in a new phase, a breakthrough phase, andtaking on challenges

Advertising message: "Lên Như Rồng” - Aspiration for the spirit of a young andprogressive Vietnam" The "dragon" symbol in the new image of Bia Saigon Thefocus of the change is on the dragon symbol and Bia Saigon With the optimizedlink between the powerful image of the dragon and the Bia Saigon logo, the newlook brings the spirit and temperament of pride to Vietnam Along with refreshingthe image, Bia Saigon's product portfolio includes:

Beer Saigon Special, Beer Saigon Export, and Beer Saigon Lager also put on anew look

After that, the corporation had 4 TVCs 07s "Saigon Beer Relays Sea Games 30"for football, weightlifting, boxing, and 100% winning Saigon beer Reach from 2.7thousand to 5.6 thousand views on youtube

Every year, Sabeco spends hundreds of millions of revenue on advertising Thecost is about 50,000 - 70,000 USD for each promotional video and 1000 to 2000USD for a slogan Sabeco has promoted its prestige and brand coverage whenadvertising its products on major TV channels such as VTV1, VTV3, ,advertising on billboards on the street, and banners on websites

Besides, recently we can see Saigon Beer billboards appearing on No Trang LongStreet, Hanoi - Ho Chi Minh highway, etc This is how Sabeco used advertisingand branded Saigon Beer

a chilled beer, End beer with ice" on how to properly drink wonderful Saigon beer,etc Therefore, instructions on how to send presents to others via messages orcomments on a fan page are also provided

Website:

On the company's official website is a redesigned dragon logo, a product catalogwith new product designs, regularly updated news- events, Vietnamese- cuisine,

and short promotional films that have been posted Attached is a way to contact viaemail, or electronic office, ask and answer questions to the company Through theWebsite, the business's message recipients are not only individual customers butalso a channel to provide information to institutional customers.

Campaign:

Some successful campaigns with slogans became hot trends, and viral

The campaign "Về nhà ăn Tết" with the desire to bring difficult but willed workers back to their hometowns to reunite with their families Thebrand has partnered with many famous KOLs and influencers At the sametime, marking the association with the band The Wall With an unexpectedsuccess effect, the brand has achieved: Top 4 interactions in the Beerindustry, the top 7 interactions in the whole market, 7.7 million people haveaccess to the campaign, 245,412 people interact with the campaign,

strong-$304,000 media value and 2,000 workers reunited with their families

Few years ago, an incredibly effective Saigon Beer advertisement with the

unique slogan "Có thể bạn không cao, nhưng người khác cũng phải ngước nhìn" could still be recalled by TV watchers The short design

element of Saigon beer bottles has been accentuated by this marketingstrategy While users frequently believe that the lower bottle will containless beer, which appears to be this beer's drawback, the short bottle ofSaigon beer has a strong flavor, thus, the amount of beer is still high.Moreover, the important thing still lies in the taste and quality of the beer.Focusing on product features has helped that slogan become viral for a longtime, the above Saigon Beer advertising campaign has brought Sabeco brandrecognition extremely successfully.

On December 29 and December 30, 2012, Saigon Beer organized theprogram "Bia Sài Gòn – tri ân khách hàng" in Dak Lak, Gia Lai To connectwith distributors and special customers in these two provinces In addition,gather regional business information and create trade support programs.Besides, with the slogan "Chung sức vì cộng đồng", Saigon Beer has left adeep impression in the hearts of Vietnamese customers because of thepracticality and humanity in Sabeco's activities

3.5.2 Public Relations:

Event organization:

An event was held at hall 10.03, Buon Ma Thuot on 10/11/2012 To supportthe program "Người Việt Nam ưu tiên dùng hàng Việt Nam", Saigon Beerorganized a Festival program called "Tôi yêu Bia Sài Gòn" to exchange andconnect

On August 21, 2019, Beer Saigon opened the first series of unique nightlifeevents called "Đêm Sài Gòn" in Ho Chi Minh City to spread the beauty ofstreet culture to young people and create an interesting meeting place.Launching a new brand identity to the community Street parade with uniquecarnival costumes, mixed with DJ music and banners such as “Uống nhưRồng”, “Lên như Rồng”, “Sống chất như Rồng”, which makes Bui Vien'satmosphere even more exciting Programs for live music performances

including singers and bands from both the mainstream and the undergrounddeliver dynamic entertainment and rich musical hues.

Blogger Khoai Lang Thang and VJ Thuy Minh were encouraged tocoordinate together flawlessly when chanting the new slogan of BeerSaigon: "1, 2, 3 lên!" full of excitement while attending the inaugural night

of Saigon Night at the Bui Vien pedestrian area With this tagline, BiaSaigon has updated its appeal to customers and expressed its desire for abetter living

As part of a series of promotional activities for the re-launch of the BeerSaigon brand, “Saigon Night” offers a full beer experience space forconsumers This network of street events will also be present in seven othersignificant cities around the nation: Hanoi, Ha Long, Da Nang, Nha Trang,

Da Lat, Phu Quoc, and Ca Mau Beginning on August 10, Saigon Night withlively events will take place continuously every Saturday from August toSeptember at 2,500 Saigon Beer stores Saigon Night promises to become afamiliar playground at night for young and modern urban youth

Charity activities:

In 2009, many social and charity activities in Sabeco's communication strategywere implemented to build a good image in the public's eyes More than 7 billionVND worth of social activities, including several appreciation campaigns, havebeen conducted by Sabeco's subsidiaries; the main business alone has spent close

to 2.6 billion VND on such initiatives During customer conferences, Sabeco hasraised more than 1.6 billion VND to timely support people in Da Nangexperiencing storm No 6 with 20 houses of Great Solidarity, and 25 houses inQuang Ngai and 20 houses in Quang Nam In addition, Sabeco donated 1.5 billionVND to flood victims in the Central region, the Fund "Chung tay vì cộng đồng",the program "Mang xuân đến với người nghèo" nearly 3 billion VND Sabeco isalso the sponsor of the charity program "Nối vòng tay lớn", joining hands with thewhole community to help and share the poor and needy people across the country.All above show Sabeco's desire to build sympathy in the eyes of end-consumers.Sabeco has been proving that building an image is extremely necessary forbusinesses in the industry

Saigon Beer - Alcohol - Beverage Corporation (SABECO) officially announcedthe Saigon Beer brand as the Official Sponsor of the Vietnamese Sports Delegationattending the 30th SEA Games in the Philippines Sharing about this sponsorship,

Mr Bennett Neo - General Director of SABECO proudly said "Saigon Beer is thepride of Vietnam and always accompanies the Vietnamese people on their journey

to glory It is also our honor to stand side by side with athletes on the way toconquering their dreams and reaching for success, not only at this year's SEAGames but also in other international arenas"

Going back to Soc Trang with SABECO to welcome the vibrant Khmer festival Oc

- Om - Boc - Ngo boat racing was attended by many people In particular, animportant contribution to the success of the Festival is the great support fromSaigon Beer - Alcohol - Beverage Corporation (SABECO), the diamond sponsorwho is also the unit that has agreed to participate in the festival accompany theFestival After the daytime festival rituals, residents and visitors to Soc Trang willenjoy special music shows, street magic performances, and many interesting gamesfrom high-quality Vietnamese brands like Bia Saigon

Mr Bennett Neo - General Director of SABECO - shared his desire to contribute

to the development of local culture: “An important part of SABECO's sustainabledevelopment strategy is the commitment to preserve and promote the culture.traditions of the country In the past 10 years, SABECO and the Saigon Beer brandhave always accompanied the people of Soc Trang province to promote the Oc-om-boc Festival, to honor the cultural identity of the Mekong Delta region inparticular and promote the image of Vietnam in general"

Besides, Sabeco's marketing strategy is very strong when cooperating with SaigonBeer as a sponsor of Leicester The English Premier League is a tournament thatattracts a large number of fans around the world This will help the beer brand earn

a lot of revenue from the number of fans coming to the field to use its products.This strong partnership of Sabeco with a club playing in the English Premier

League is an ambition to penetrate the international market and increase strongcustomer coverage.

Sabeco's communication strategy – Sabeco's current type of competitive strategy

Press Conference

On August 19, 2019, Sabeco held a press conference in Ho Chi Minh City tolaunch the new look of the brand, communication programs also reaffirm Sabeco'scommitment in

Continuing to invest in the Beer Saigon brand, and continuing to maintain itsposition is a pride

Vietnam's trenches

The event not only attracted many famous artists such as Truong The Vinh, TrinhThang Binh, Phan Manh Quynh, etc but also brought together journalists andmedia units to welcome and admire the dragon's appearance of Beer Saigon,inspired by the rising spirit of Vietnamese people

News:

Continuously for 3 months, information about the campaign was widely shared inmajor newspapers such as VnExpress, Tuoi Tre, Thanh Nien, Vietnamnet, Nguoi

Lao Dong, Lao Dong, and VietnamPlus, The information flow revolved aroundthe main purpose:

Disseminate information on social activities to enhance resonance from mediaplatforms

Bringing a deeper perspective on the image of a transforming Sabeco - SaigonBeer, following the success of each individual to contribute to the success andprosperity of the whole country

3.5.3 Trade fairs:

Sabeco participated in the fair "Culinary Festival of Delicacies from othercountries" in November at the Youth Culture House - Ho Chi Minh City Here, notonly Vietnamese but also foreign diners will have the opportunity to enjoy beerfrom Vietnam, a cross-border food festival with more than 50,000 attendees

3.5.4 Personal selling:

Sabeco posted a recruitment advertisement for PG to work for the company

in big cities such as Hanoi, Ho Chi Minh, Da Nang, etc Aged 18 to 26 yearsold, female, and taller than 1.58 will work at restaurants in the area 6 days/aweek, or work Friday, Saturday, and Sunday at supermarkets The jobdescription is to promote products to customers while shopping or havingfun

Maintain a good relationship with their current institutional customers,promote offers to hotels, large restaurants, bars, etc in the campaign "Lênnhư rồng" to change new clothes for beer products of the company.Keep a positive connection with their present institutional clients andadvertise offers to hotels, sizable eateries, pubs, etc for the "Lên như rồng"campaign to redesign beer goods of the business

3.6 Epilogue:

Marketing strategy of Saigon Beer Company: Established, built, and developed tobecome the pride of Vietnamese people, SABECO always preserves the identityvalues of the Saigon beer brand, and at the same time does not stop changing andadapting to the modern business environment Not only bringing economic value,but above all, SABECO also wishes to accompany Vietnam's ups and downs ineach development stage, contributing to the country's sustainable development.Furthermore, Sabeco has a good reputation as the most popular brewer in Vietnam.Therefore, having dominated the mid-priced beer segment in Vietnam with brandssuch as Saigon Export, Saigon Special, and Beer 333 With the appropriateapproach taken with the Saigon beer brand, Sabeco will further solidify its position

in the mid-priced beer sector and maintain its competitive edge going forward

3.7 Competitors

3.7.1 Positioning map