International marketing plan project for cholimex namnueng of cholimex food joint stock company (cholimex food jsc) in thailand market

THE FINANCIAL

UNIVERSITY OF FINANCE – MARKETING

FINAL REPORT

ESSAY ON INTERNATIONAL MARKETING

INTERNATIONAL MARKETING PLAN PROJECT FOR CHOLIMEX NAMNUENG OF CHOLIMEX FOOD

JOINT STOCK COMPANY (CHOLIMEX FOOD JSC) IN THAILAND MARKET

HCMC, Month 08/ 2021

THE FINANCIAL

UNIVERSITY OF FINANCE – MARKETING

FINAL REPORT

ESSAY ON INTERNATIONAL MARKETING

INTERNATIONAL MARKETING PLAN PROJECT FOR CHOLIMEX NAMNUENG OF CHOLIMEX FOOD

JOINT STOCK COMPANY (CHOLIMEX FOOD JSC) IN THAILAND MARKET

Implementation group:

- Bui Thi My Diep - 1921005389 - Lam My Duyen - 1921005403 - Nguyen Thu Trang - 1921005730 - Nguyen Cat Tuong Vy - 1921005790

TABLE OF CONTENTS

LIST OF FIGURES iii

LIST OF TABLES iv

1.EXECUTIVE SUMMARY 1

Brief overview of the company 1

Company’s main product 1

Target country: Thailand 1

Size and Extent of demand 11

Product category Stage of product life cycle 13

Structure of the industry 13

Market Entry Strategy 19

6.INTERNATIONAL MARKETING GOALS AND OBJECTIVES 19

7.1.2 Type of product 21

7.1.3 Product Dimensions 21

7.1.4 Branding approach: Product line extension 22

7.1.5 Develop new products: 22

Price 23

Place 24

7.3.1 Define distribution goals 24

7.3.2 Channel and marketing decisions: 24

LIST OF FIGURES

Figure 3.1 The Gross Domestic Product per capita in Thailand 7

Figure 3.2 Current competitors in Thailand 10

Figure 7.1 Positioning map between Cholimex Namnueng and the opponent 20

Figure 7.2 Packaging design of Cholimex Namnueng 21

Figure 7.3 Consumer structure 24

Figure 7.4 Business to Business Channels 25 APPENDIX 2

Figure 1 Product packaging design image e

LIST OF TABLES

Table 3.1 Cost statistics used in a year 13

Table 3.2 Competitor Analysis 15

Table 4.1 Swot Analysis of Cholimex Namnueng 16

Table 5.1 Market Segmentation of Cholimex Namnueng 17

Table 7.1 Ingredients information of the product 22

Table 7.2 Competitor's Grilled Pork Sausage Price 23

Table 7.3 Cost of means of transportation of of goods from Vietnam to Thailand 25

Table 7.4 Advertising channels 26

Table 7.5 Promotional budget of Cholimex Namnueng 28

Table 8.1 Expenses of product 29

Table 8.2 Expenses of place 29

Table 8.3 Promotional budget of Cholimex Namnueng 30 APPENDIX 1

Table 1 Cost statistics used in a year a Table 2 Expected sales table in the first year of Cholimex Namnueng b Table 3 Expenses of product c Table 4 Expenses of place c Table 5 Promotional budget of Cholimex Namnueng d APPENDIX 3

Table 1 Member’s group work assessment f

1 EXECUTIVE SUMMARY

Brief overview of the company

Cholimex Food Joint Stock Company is one of the leading companies in the industry of spices, frozen seafood in the domestic and international market, which has been established for a long time (1981) Cholimex is well known for its products such as chili sauce, ketchup, instant fish sauce, spring rolls, dumplings, seafood hotpot and so on

Cholimex Food considers comprehensive quality and sustainable development as the main goals for the company's activities Continuous improvement and constant development in turning ideas into effective solutions in the business Moreover, the company is constantly developing and nurturing the trust of society in the company's brand

Currently, Cholimex Food branded products are present in more than 30 countries in Asia, Europe, and America with processed products with added value and penetrated into leading supermarket systems in the world

Cholimex has become one of the reputable brands in the domestic and international market with quality products, ensuring food safety and hygiene

Company’s main product

Currently, the company has three main product lines: sauce - condiments, sauce - dipping sauce, and frozen food

Sauce - Condiments: chili sauce, ketchup, sweet and sour chili sauce, instant fish sauce,

shrimp satay, seafood sour hot pot, fish sauce marinated, seasoning with pepper, various kinds of soup powder, etc

Sauce - Dipping sauce: Huong Viet soy sauce, Huong Viet fish sauce, ready-made fish sauce,

etc

Frozen food, including 2 groups:

The first group - Frozen seafood: frozen shrimp, frozen crab, frozen fish, frozen squid, frozen crab, Amaebi shrimp

The second group - Value-added refined foods: spring rolls, grilled shrimp on sugarcane, dumplings, wontons, little bare cakes, breaded shrimp, fish sauce hot pot, seafood hot pot, squash stuffed with meat, shumai, banh khot, banh nam, fish cakes, shrimp cakes

Target country: Thailand

According to the ITPC, Thailand is currently Vietnam's largest trading partner in ASEAN Vietnam's goods export turnover to Thailand always accounts for about 1/5 of the total export

turnover to ASEAN Thailand has always maintained its position as the number 1 export market of Vietnam in ASEAN (Nhan Dan newspaper, 2020) The tastes of Vietnamese and Thai people have some similarities (due to their proximity to each other and similar soil) Most of the restaurants in Thailand are praised for their dishes with lots of fresh vegetables such as spring rolls, mixed salads, grilled pork sausage, etc (Kenh14.vn, 2019) Therefore, grilled pork sausage that Thai people call "namnueng1" is one of the favorite dishes from Vietnam that has become a familiar and very popular dish in this country Therefore, Thailand is the ideal country for Cholimex to export grilled pork sausage (Vien Dong Daily News, 2019)

2 SITUATION ANALYSIS Company Analysis

Cholimex Food also modernizes the production process, builds a closed supply chain from raw materials to processing, provides high-quality food, ensures monitoring and traceability

Enterprises invest in automatic machinery and equipment at stages to increase labor productivity and save labor such as shrink wrapping machines, automatic cartoning machines, and freezing machines Sauce - condiment factory has a production capacity of 500 million bottles per year, frozen food factory has a production capacity of 5,000 tons per year At the same time, applying DMS technology to product distribution management systems

The company is also equipped with a freezing system and modern machinery to replace manual processes, both ensuring quality and bringing high economic value to products, gradually improving the brand competitiveness on the global market

Core activities: Producing, processing and trading food products, industrial meals, frozen foods, seafood of all kinds for domestic market and export

With the goal of prestige and quality, the company force all processes to be strictly controlled to ensure quality and delivery on time

Organization Assets and Skills

- The enterprise is certified to meet the quality management standard ISO 9001:2000 - Products meet food hygiene and safety standards such as BRC, ASC

- Received a certificate of food safety for export to the European Union (EU)

- The company develops HALAL standards for Muslim countries and Kosher for Jews to diversify export markets

1 Namnueng: This dish is "Grilled pork sausage" In the Vietnamese sense it means "Nem Nuong"

- Cholimex's products do not use synthetic colorants or additives outside the permitted list of the Ministry of Health, meeting the strict demands on food safety and hygiene of the international market and so on

3 MARKET ANALYSIS

Analysis of the Internal Environment 3.1.1 Human Resources

Cholimex has attracted, created jobs and stable income for more than 1,500 employees Re-training existing and experienced staff In additon, the company always focusing on improving professional knowledge and skills for managers and professional staff

The company focuses on training to improve skills for employees through promotion exams and knowledge tests on food safety Therefore, Cholimex has a team of young, qualified, and skilled workers combined with a team of experienced technicians with a high sense of responsibility

Cholimex has labor policies such as ensuring the health, safety, and welfare of employees In addition, the company also has reasonable rewards, support policies and creates a friendly working environment to attract employees to stick with the company

3.1.2 Material Resources

Constantly investing in new machinery and equipment in parallel with improving existing ones to increase labor productivity and product quality Many savings programs have been applied to reduce the amount of labor used and the norm of packaging materials, contributing much to the increase in profits

With an area of 3.7 hectares, the Company has built 5 production workshops with a capacity of 400 million bottles of sauces, spices, and 5,000 tons of frozen food per year

Profit after tax: 178,626,329,079 (VND) Net profit/sales ratio: 7.9%

Analysis of the External Environment 3.2.1 Macro environment

❖ Political and Legal Environments

Thailand is a constitutional monarchy combined with direct democracy The current political situation in Thailand is unstable, which makes it difficult for investors to do business in this country

The Foreign Investment Law in Thailand stipulates limited business activities for foreigners (unless obtaining an operating license from the relevant ministries) Companies incorporated in Thailand are also governed by this act if they have foreigners or foreign legal entities owning half or more than 50% of the shares are also governed by this act Foreign investors cannot buy property or real estate in Thailand According to current law, there is no specific charter capital, but at least 3 shareholders are required to establish a company Foreign investors can still set up a company with 100% foreign ownership, but the procedure will be very difficult and the outcome is uncertain However, under the current new preferential policy package, foreign businesses investing in Thailand will receive an additional 50% reduction in corporate income tax for 5 years, doubling the discount for expenses for foreign investors for training, and corporate tax exemption for 5 years upon establishment of skills development facilities

❖ Regulatory Environments

Harmonized Tariff Schedule of Thailand

Thai Customs Tariff Decree B.E 2530 states that “goods imported or brought into, exported, or taken out of the Kingdom shall be chargeable with and liable to duty” For dutiable goods, payment can be made at the Customs Department of the port of entry or via the Payment section of the e-Customs system

The Tariff Schedule of Thailand can be searched both by HS Code and by Thailand agreements with other countries

Prior notice of imported foods

The laws and regulations governing the Thai food industry are confined to the scope of the Food Act B.E 2522 The Food Act authorizes the Ministry of Public Health’s Food and Drug Administration (FDA) to implement and administer the Food Act

Under the Act, all establishments producing food for sale or importing food for sale must be licensed by the Food Bureau of the FDA The application and granting of licenses must be complied with the principles, procedures, or conditions prescribed in the Ministerial Regulations, which are periodically elaborated, modified, and issued by the FDA’s Food Bureau

Imported frozen products must be certified to one of the following standards to be sold in Thailand

Attention should be paid to regulations on packaging, labeling, import certificates, and import permits For products imported into Thailand, the Thai government has very strict regulations

As a rule, the packaging of products should be made of safe materials and are resistant to heat and moisture Exporters should also pay attention to the possibility that the goods will be stored in open warehouses, so the packaging should use waterproof materials The use of hay and straw should be avoided for packaging

Import certificates and import permits are also necessary conditions for Vietnamese goods to be circulated on the Thai market Import certificates include certificates of origin and special certificates These types of documents must be issued from competent authorities For certificates of origin, in some cases, if two countries have signed a Free Trade Agreement, goods with a certificate of origin will enjoy a preferential tax rate

Frozen foods must be registered with the Food and Drug Administration, Ministry of Health before being imported When carrying out the registration procedure, the importer must submit 2 samples for each type of goods, accurate information on the composition in percentages, along with six product labels

Supporting policies

ASEAN Trade in Goods Agreement (ATIGA)

Countries in ASEAN including Thailand signed the ASEAN Trade in Goods Agreement (ATIGA) In addition to tariff commitments, ATIGA also includes many other commitments such as elimination of non-tariff barriers, rules of origin, trade facilitation, customs, standards and conformity, sanitary measures Most of the products in the tariff schedule will be eliminated or reduced by countries to less than 5%, except for some sensitive products such as unprocessed agricultural products, sensitive products such as firearms and ammunition, explosives, garbage, etc

❖ Economic Environments

GDP growth rate: The BoT's Monetary Policy Committee (MPC) decided to cut the GDP

growth forecast for 2021 to 0.7% from 1.8% last month In addition, the Thai economy for 2022 was

projected to expand 3.7%, a decline from its previous forecast of 3.9% (Bangkok Post, 2021)

Inflation rate: The annual inflation rate in Thailand fell to 0.45 percent in July 2021 from

1.25 percent a month earlier and compared with the market consensus of 0.97 percent This was the lowest reading in four months, amid coronavirus-related restrictions, with food prices falling for the first time in four months (-0.47 percent vs 0.29 percent) (Trading Economics, 2021)

Currency: Thai Baht is the currency in circulation in Thailand (symbol THB - read as Baht)

Thailand circulates both banknotes and coins Banknotes in Thailand have the following denominations: 20฿, 50฿, 100฿, 500฿, and 1000฿ Coins with denominations of 10฿ or less Besides, compared to Vietnamese Dong, the conversion rate between the two currencies of the two countries is 1 Thai Baht (THB) = 684.62 VND (The Bank, 2021)

Economic relations between Vietnam and Thailand: According to a reporter of TTXVN

newspaper in Bangkok, Deputy Prime Minister and Minister of Commerce of Thailand Jurin Laksana Wisit on June 7 affirmed that the cooperation in the field of the economy - trade - investment between Thailand and Vietnam is getting better Bilateral trade turnover in the first 4 months of 2021 increased by 20% over the same period last year The two countries have signed agreements and arrangements such as the Agreement on Avoiding Double Taxation between Vietnam and Thailand, the Agreement between Vietnam and Thailand on the Promotion and Protection of Mutual Investment, etc (TTXVN newspaper, 2021)

❖ Social and Cultural Environments ➢ LANGUAGE

The primary language spoken in Thailand is Thai or “Phasa Thai” meaning “language of the free” Over 80% of Thailand’s population speaks Thai as their primary language and almost everyone else speaks it as a second language But Thai is not the only language spoken in Thailand where at least 62 local languages from 5 language families exist (Autolingual, 2020)

The Thai language is a language from the Kra-Dai family of languages and the Tai subbranch It’s spoken by close to 35 million people as a first language and more than 45 million as a second language (Autolingual, 2020)

English is the most common second language, and many Thais have studied some level of English either at school or through practice with foreign friends In Bangkok, where the major business and commercial transactions are held, English is widely spoken, written, and understood Further, in most hotels, shops, and restaurants of major tourist destinations, English and some European Languages are spoken, written, and understood

❖ Demographic Environments Population: (Worldometer, 2021)

- The current population of Thailand is 69,993,027 as in 2021, based on Worldometer elaboration of the latest United Nations data

- Thailand's population is equivalent to 0.9% of the total world population

- Thailand ranks number 20 in the list of countries (and dependencies) by population - The population density in Thailand is 137 per Km2 (354 people per mi2)

- The total land area is 510,890 Km2 (197,256 sq miles)

- 51.1 % of the population is urban (35,698,325 people in 2020)

Age: The median age in Thailand is 40.1 years (Worldometer, 2021)

Per capita income: The Gross Domestic Product per capita in Thailand was last recorded at

6094.43 US dollars in 2020 The GDP per Capita in Thailand is equivalent to 48 percent of the world's average (Trading Economics, 2021)

Figure 3.1 The Gross Domestic Product per capita in Thailand

(Source: Tradingeconomics.com/ World Bank)

Urbanization: In 2020, 51.43 percent of Thailand's total population lived in urban areas and

cities Between 2010 and 2020, the country has shifted from 36 percent urban to almost 50 percent urban, which means that half of the population now lives in cities and urban areas While Thailand's urbanization rates are still low compared to other developed nations - which can reach levels of 80-90 percent, this transformation in Thailand is still significant, especially as most of this growth occurs which is expected to occur in the Krung Thep area, better known as Bangkok, capital and largest city

in Thailand (Statista, 2021)

❖ Technological Environments

Thailand has spent billions of dollars on building infrastructure, upgrading transport as well as Internet and telecommunications networks to meet the needs of technology development:

Traffic infrastructure: Thailand is widely acknowledged as having the most extensive road

transportation network in all of Southeast Asia with more than 390,026 kilometers, of which 384,176, or 98.5%, is concrete or asphalt paved, and 66,266 km forming a national highway network

connecting each region of the country (Thailand Board of Investment, 2019)

Internet system: Among the more than 69 million people in Thailand, the internet access rate

is very high, up to 75% From there, it can be seen that people here have easy access to the Internet, creating favorable conditions for consumers to access new information as well as update information

(Asia1ac, 2020)

Thailand ranks fifth in e-commerce in the world with 80% of internet users goods online through any device This shows that online shopping is very developed in Thailand

International Telecommunication Union (ITU) and the National Broadcasting and Telecommunications Commission (NBTC) of Thailand have established more than 20 rural internet hubs across the country The centers, located in 16 provinces across the country, strengthen information and communication technology (ICT) skills that are helping to drive economic and social development in some of the country's most remote regions

❖ Natural Environments

As a country with a long coastline of 3,219 km, it is convenient for sea transportation Thailand's territorial waters in the southeast border with Vietnam's territorial waters in the Gulf of Thailand, which has a geographically close position and is convenient for trade and commerce

However, Thailand's dramatic economic growth has caused many environmental problems The average temperature of Thailand's weather is higher than that of Vietnam, usually from 32 degrees Celsius in December and up to 35 degrees Celsius The rainy season usually takes place from June to October, of which August, September, and October often occur with storms and floods This will cause changes and delay in delivery schedule, cause accidents for shipping vessels, damage to ships easily leading to capital loss These factors can pose a major threat to the shipping process as well as the quality of products being stored in some areas

Thereby, it can see the temperature in Thailand is often very high, so the company needs to invest in equipment such as trucks and containers for transporting frozen goods to better preserve products Regarding the rainy and stormy seasons, to avoid damage to shipments, the company should

export before Thailand's rainy season, or carefully study the weather condition to deal with bad cases to minimize the damage loss for the company's products

❖ Physical Environments

Traffic system: Transport in Thailand is varied For long-distance travel, bus transport

dominates Low-speed rail travel has long been a rural long-distance transport mechanism, though plans are underway to expand services with high-speed rail lines extending to several major regions of Thailand Road transportation is the primary form of freight transport across the country

Transportation system:

Thailand's transportation system is quite diverse and convenient

Road system - transport of goods and travel by road through various connections The Thai government is investing to improve transport infrastructure across the country with the development of economic corridors and highways

Air transport - Currently, Thailand has about 5 busiest cargo airports: Suvarnabhumi International Airport, Don Mueang International Airport, Phuket International Airport, Chiang Mai International Airport, Koh Samui International Airport

Sea transport - still a very popular mode of freight transport in Thailand The main Thai seaports for importing goods are Bangkok Port, Laem Chabang Port, and Songkhla Port

3.2.2 Microenvironment ❖ Customers

Cholimex's customers include:

Customers are Thai people with needs and preferences for Vietnamese culinary dishes, especially grilled pork sausage Thai people especially love grilled pork sausage with rich flavor and especially love the dipping sauces and fresh vegetables served with them Thai people want reasonable food prices and guaranteed food quality

Distribution intermediaries in Thailand: convenience store system 7-Eleven, Makro Sathorn supermarket, Big C Go supermarket In addition, there are other retail outlets in the local area to cater to neighboring households

❖ Suppliers

Finding the source of raw materials and checking the quality of imported raw materials are carried out by the Company under a very strict process First, the Company must determine the farming area and survey of the production process of these material areas, check with equipment to ensure the production process is safe, and ensure the right quality as required The Company then

signs a long-term contract and regularly inspects their production process, checks the input materials of the suppliers, and determines the origin of the breeding stock Therefore, the Company's source of raw materials is always stable, ensuring to meet the required quality and ensure the traceability of products

The Company's raw materials are mainly aquatic products, agricultural products, and meat The company mainly imports from aquaculture areas in Ho Chi Minh City, Bac Lieu, Ca Mau, Soc Trang provinces

The agricultural products the company imports from the northern provinces, the central provinces are mainly chili, garlic, especially the provinces: Hai Duong, Hung Yen, Thai Binh, Quang Binh, Quang Tri, Thua Thien Hue, Lam Dong, and the southwestern provinces

● List of main raw material suppliers:

Packaging: Ngoc Nghia Plastic Joint Stock Company; Malaysia Glass Company Limited

Agricultural products: Phuoc Thanh Da Lat Cooperative (Da Lat Coop)

Accessories: Brenntag Vietnam Co., Ltd; Thanh Thanh Cong Tay Ninh Sugar Company Limited; Tuong An Vegetable Oil Joint Stock Company

❖ Substitutes

Products that can replace grilled pork sausage such as spring rolls, grilled chopped fish, surimi, etc., these products can pose a threat to businesses

❖ Current competitors

- Current competitors in Thailand are brands specializing in selling grilled pork sausage such as Daeng Namnuang and VT Namnueng, ตรา สุทธิลักษณ์ (Suthiluck)

- Grilled pork sausage is sold at traditional Thai markets

Figure 3.2 Current competitors in Thailand

❖ Potential competitors

Frozen food manufacturers in Thailand may launch grilled pork sausage to compete with such products as บริษัท นายฮั่ง อินเตอร ์ฟู้ดส ์ (Mr Hang Interfoods Co., Ltd.), เจริญโภคภัณฑ ์อาหาร (Charoen Pokphand Foods Public Company Limited) and so on

Large frozen food company in Vietnam such as Vissan, CP, Cau Tre, etc., which have a lot of experience in production as well as a large capital, can easily enter the market and become potential competitors with business

Nature of Demand

Cholimex Namnueng is one of the frozen foods loved and accepted by Thai and Vietnamese According to the latest report by market research agency Technavio, the global frozen food market size is forecasted to grow at a record CAGR (Compound Annual Growth Rate) of around 11% in the period 2020-2024 In addition, according to a report from Mordor Intelligence, the market is primarily driven by rising disposable income, the introduction of longer shelf-life products, increasing impulse purchasing, and huge demand for frozen food products, due to the lack of time (Mordor Intelligence, 2020)

Size and Extent of demand

Thais spend 25% of their total spending on food and beverages, and about 38 million middle- and upper-income consumers are eager to buy imported food products (Food Export, 2020)

Opportunities in Thailand's food processing sector continue to grow as domestic processed food sales increase due to a major shift in consumption patterns towards convenience foods With the increasing demand for processed foods, Thai food processors have to import a large amount of food ingredients that are not available domestically

The Thai frozen food market is expected to reach a CAGR of 5.9% during the forecast period 2017-2022 (Cision PR Newswire, 2018) The market is expected to continue to be driven by the increasing use of canned food and online retail in Thailand As a result, it has boosted demand for Thai frozen products globally and will continue to do so in the long term

● Influence Factor:

The capacity of grilled pork sausage in the current market: Currently, large stores are

specializing in producing and selling famous grilled pork sausage in Thailand, which proves that the large market capacity will attract many competitors and it is difficult to attract the attention of

customers

Price fluctuation: Like other items, grilled pork sausage is also affected by supply and

demand factors Moreover, the price of a grilled pork sausage product is a composite price from many costs such as transportation costs, packaging, purchasing raw materials, etc., so just one of the above

changes will lead to a change in the product cost

Import and export policies: Management mechanisms, economic policies and external

partnerships directly affect the export of grilled pork sausage Especially in Thailand, there are many strict regulations in the selection of goods to import such as regulations on quality, packaging, labels,

import certificates and import permits

Exchange rate: Encouraging imports opens up export opportunities for Vietnam Although

Thailand's exchange rate fluctuated significantly in recent years, it tended to increase during 1971-2020 (Knoema, 1971-2020) Therefore, the appreciation of Thailand's domestic currency makes domestic goods more expensive relative to foreign goods, which will encourage the import of foreign goods and limit the export of domestic goods This country leads to a decrease in net exports Based on these

conditions, export opportunities for Cholimex Namnueng products are opened

Quality: Grilled pork sausage quality is one of the determinants of competition in the market

and also improves export efficiency Moreover, Thai do not like products containing preservatives

● Consumer Trend

Global Frozen Food Market is valued approximately USD 214.03 billion in 2019 and is anticipated to grow with a healthy growth rate of more than 5.3 % over the forecast period 2020-2027 (Icrowdnewswire, 2021)

Furthermore, according to research by real estate firm Coldwell Banker Richard Ellis (CBRE) and Forrester, e-commerce demand for cold foods currently outpaces nearly every other product for home delivery in terms of growth In addition, higher consumer demand for cold foods, combined with growing e-commerce options (Refrigerated & Frozen Foods, 2021) As for Thailand, the results of the EDTA survey in March 2020 show that nearly 35% of Thai consumers surveyed are increasingly ordering food online (Marketingoops, 2020)

Besides, the improving living of standard of Thai people and their preferences towards the convenience foods and easy to cook as it take less time and effort to cook the food indirectly drives the demand of frozen food in the market (Icrowdnewswire, 2021) Thai people are starting to know and accept frozen food widely In addition, the diverse menu of flavors of frozen food, the nutritional value, cleanliness and safety standards of the production process are also things that consumers care about

Thereby, it can be clearly seen that the trend of consuming frozen food, especially fast food, among global people in general and Thai people in particular is growing Therefore, this is an opportunity for Cholimex to export Cholimex Namnueng products to this market

Product category Stage of product life cycle

Because this is a new product introduced to foreign markets, it is still in the introduction stage At this stage, very few consumers know about the product's presence, so Cholimex Food needs to introduce this new product to target customers That job is to create a marketing strategy for the product during the implementation phase, including investing in advertising and marketing campaigns focused on creating awareness for users about the product and its benefits

Structure of the industry ❖ The cost structure of the industry

Table 3.1 Cost statistics used in a year

(Unit: VND)

❖ Competitive structure of the industry

The threat of new entrants: In Thailand, there are currently two famous Vietnamese

restaurant brands, Daeng Namnuang and VT Namnueng For VT Namnueng, there are more than 30 stores At the same time, it owns 4 main production bases located in Udon Thani and Chiang Mai with a capacity of 50 tons of grilled pork sausage per day For Daeng Namnuang developed into a restaurant chain with 3 locations in Nongkhai, Udon and Chiang Mai Her chain of grilled pork sausage restaurants was honored by the Thai press as the most successful restaurant of Vietnamese

people in Thailand This restaurant serves thousands of guests to enjoy grilled pork sausage The

number of restaurant staff is more than 400 people to be able to meet the needs of customers

The threat of substitute products: Thai people often have the habit of eating at home, so

they can choose traditional local dishes, or more popular frozen foods such as fish cakes, surimi,

sausages as substitutes rather than choosing grilled pork sausage

Bargaining power of suppliers: Cholimex is more likely to negotiate with suppliers Because

there are many safe pig slaughterhouses, food hygiene and safety are higher This shows that the process of slaughterhouses has been focused on, so the quantity and quality are stable, increasing the possibility of negotiating with production companies Moreover, the company often signs a long-term contract and regularly inspects their production process, checks the input materials of the suppliers, and determines the origin of the breeding stock Therefore, the company's supply of raw materials is

always stable, ensuring that the required quality is met and the product traceability is guaranteed

Bargaining power of buyers: Thai consumers are very strict in choosing reputable brands,

clear labels and origins, and products must meet food safety and hygiene standards Therefore, the

company needs to focus on the production and processing stages to demand the needs of customers

Besides, Thai people have average or higher incomes, they are price sensitive, so when there is a

competitor with a lower price, consumers will easily switch to another brand for consumption

Competitive Rivalry: Cholimex will likely be under a lot of pressure from big competitors

when exportting Cholimex Namnueng to Thailand These competitors have been in the market for a long time and have earned the trust of customers Moreover, competitors from Thailand pay a great attention to product packaging Products of these competitors are securely packaged and the packaging is printed in Thai with easy-to-remember branding Besides packaging and label design, product quality standards are always set very strictly The products of Thai competitors are highly appreciated for their quality and taste, always meeting the evaluation criteria of Thailand

Competitor Analysis

Table 3.2 Competitor Analysis

Daeng Namnuang

- The Daeng Namnuang restaurant chain was honored as one of the most successful Vietnamese restaurants in Thailand

- Daeng Namnuang is appreciated by Thai people as a delicious, attractive dish that does not contain preservatives and additives that affect consumers' health, so it is highly appreciated by Thai people - Moreover, with the addition of vegetables, the spice

recipe is praised by the locals as being suitable for taste

- The delivery system is still slow, and lack of products for customers

- The price is still high compared to other brands of grilled pork sausage

VT Namnueng

(1992)

- 30 stores under the VT Namnueng brand are widespread and develop the most successful delivery system in Thailand

- The restaurant is strict in the process of selecting ingredients, from meat that must be sourced from famous large companies to set up a team specializing in growing clean vegetables

- VT Namnueng is loved by Thai people because of the delicious taste combined with the dipping sauce of this dish, contributing to creating more attraction for diners

- The restaurant was established a long time ago (1992), so it has a lot of experience in production and is loved by many Thai people

- Community mall of VT Namnueng has a modern restaurant system serving grilled pork sausage to 1000 seats with more than 1,200 employees

- The packaging of VT Namnueng is considered by many to be not eye-catching compared to the price as well as other grilled pork sausage brands - Vegetables that come with grilled pork

sausage are often judged as not fresh during transportation

Suthiluck

- The taste of grilled pork sausage is delicious, suitable for the taste of Thai people

- In particular, each of Suthiluck's Namnueng has greater net weight compared to other brands' grilled pork sausage

- Dishes are carefully packaged, and when received, diners can use them immediately without complicated processing

- The restaurant has discount promotions for grilled pork sausage

- The delivery system is still slow - Suthiluck Namnueng is a brand

established by Thai people, so it still faces a lot of competition compared to Vietnamese Namnueng

4 SWOT ANALYSIS

Table 4.1 Swot Analysis of Cholimex Namnueng

- Input materials are available, regularly checked to ensure that they demand the required quality and ensure product traceability

- The workforce is highly skilled and regularly trained to adapt to the changing environment

- Products with guaranteed quality and reasonable prices come from a brand that has a long-standing reputation in the Vietnamese market

- The company has experience in making dipping sauces suitable for Thai people's preference for grilled pork sausage with dipping sauce and vegetables Delicious dipping sauces can give a company a competitive advantage

- The company has no experience in producing grilled pork sausage

- The shelf life of the product is short

- There is no reputation for grilled pork sausage in Thailand

- The product is difficult to store at normal temperature because it is a frozen product

- The product is not too different from the competitors

- The trend of consuming convenient frozen food is increasing, because it helps to save time, is convenient and quick to use by Thai people

- According to Cision PR Newswire, Thailand's frozen foods market is expected to register a positive CAGR of 5.9% during the forecast period to 2022

- Grilled pork sausage is a favorite dish which is chosen by many Thai families and people

- Grilled pork sausage originates from Vietnam and has been present in Thailand, so this is an opportunity when Cholimex exports Vietnamese products to Thailand

- The taste of Thai people is quite similar to that of Vietnamese people

- Vietnam has been participating in the ASEAN which has opened up a lot of opportunities for businesses in the food industry to develop and increase export opportunities

- The company has to compete with famous brands of grilled pork sausage in Thailand

- Thai consumers are price sensitive, so they often compare prices with other brands

- There are many substitute products for Thai consumers to choose from

- There are two seasons in Thailand: the dry season, and the rainy season, with frequent storms and floods, which can pose challenges for transportation and storage

- This is the first time Cholimex has exported to Thailand, so understanding the culture here is also a challenge

- The market has many cases of making low quality grilled pork sausage, counterfeiting products will cause loss of trust for consumers when using new products

- Ensuring supply is difficult if there is a case of African swine fever or other diseases

5 TARGET MARKET DESCRIPTION Market Segments

Table 5.1 Market Segmentation of Cholimex Namnueng Thailand, but a lot more people in urban areas and large cities

Anywhere in Thailand, but a lot more people in urban areas and large cities

Anywhere in Thailand, but a lot more people in urban areas and large cities

Anywhere in Thailand, but a lot more people in urban areas and large cities

PSYCHOGRAPHIC

Lifestyle

Actives, Participate and express their opinion, like to play

Mature, pay a lot of attention to the price and taste of the product and work hard

Need respect, grumpy/ pay attention to health imitating their friends

Suitable for their interest, new product, famous product

Suitable for appetite, family, and children

Suitable for appetite, family, and children

Target Marketing Identification and Segmentation Strategy

Target Customer: Segment 3

• Demographics:

- Status: Single, married, married with one or two kids

- Social class: Working class, middle class, upper class

• Geographics: Anywhere in Thailand, but a lot more people in urban areas and large cities are

willing to buy the product

• Psychologics:

- Personality: Mature, pay a lot of attention to the price and taste of the product and work hard

- Perception: Prioritize delicious, convenience, fast, ensure food safety, and cheap

price-sensitive

- Motivation: Suitable for appetite, family, and children