Kinh do’s entrepreneurship report international school of business busm1006 enterprise, innovation and markets

--- Page 1 --- --- Page 2 --- Kinh Do’s Entrepreneurship Report International School of Business BUSM1006: Enterprise, Innovation and Markets Ms. Nguyen Thi Phuong July 21, 2024 Tran Le Thien Vuong Vuong My Chau Luu Hong Phuc Tran Do Phuong Anh --- Page 3 --- Table of contents: I. EXECUTIVE SUMMARY 4 II. EVALUA TION OF CURRENT INNOV ATIONS 5 Innovation 1: Cage-free eggs 5 Innovation 2: Sustainable packaging 5 III. CURRENT MARKETING ANAL YSIS: 7 1. Marketing environment 7 2. Kinh Do Mondelez SWOT analysis (see Bibica and Kido SWOT in appendix) 7 3. Target market 8 4. Marketing mix 9 5. Perceptual Positioning Map 10 IV. CURRENT MICROECONOMICS ANAL YSIS 13 1. Demand analysis 13 2. Supply analysis 13 3. Price elasticity of demand 15 4. Market structure 15 V. PROBLEM IDENTIFICA TION 17 VI. THE NEW INNOV ATION & TARGET MARKET PROFILE 19 1. Innovation 19 2. Target Market Profile 19 VII. THE NEW MARKETING MIX STRA TEGY 20 1. Product 20 2. Price 20 3. Place 20 4. Promotion 21 References 22 Appendices 23 1. Bibica SWOT analysis 23 2. Kido SWOT analysis 23 --- Page 4 --- I. EXECUTIVE SUMMARY This entrepreneurship report aims to provide a thorough analysis of Mondelez Kinh Do''''s innovations, marketing environment, and microeconomic factors based on the current context within the Vietnamese bakery industry . Two prominent innovations—cage-free eggs and sustainable packaging—showcase Kinh Do’s environmental awareness and its capture of sustainable trends. The marketing analysis depicts a detailed comparison between Kinh Do and its two competitors, Bibica and KIDO, regarding the marketing environment, SWOT , target market, marketing mix, and perceptual positions. In addition, demand and supply patterns, as well as price elasticity and market structure, contribute to the identification of Kinh Do’s problem, which is the gap in the desire of customers to relish mooncakes more frequently . Seizing this opportunity , the "Golden Moon" Homemade Mooncake Kit has been proposed to meet diverse customer preferences and improve Kinh Do’s revenue. Furthermore, a new target market profile and marketing mix convincingly demonstrate the feasibility of this innovation. --- Page 5 --- II. EVALUATION OF CURRENT INNOVATIONS Innovation 1: Cage-free eggs Cage-free eggs are an important innovation in the bakery industry , inspired largely by the need to satisfy changing social demands for better animal care. This idea was motivated by process need to change egg production processes to reduce the use of traditional battery cages since battery cages are some of the worst types of confinement any animal faces on factory farms (Waxman, 2022). The aspect of this innovation is meeting social needs , which means altering the way eggs are produced to enhance animal welfare and match customer expectations. This innovation not only solves social issues but also allows manufacturers to better match legal trends and market desires for ethically produced food items. This invention may be identified as duplication since it duplicates an existing product while improving the manufacturing process to meet ethical standards. The essential dimension of this innovation is process innovation, which means changing the way eggs are produced to enhance animal welfare and match customer expectations. Innovation 2: Sustainable packaging Mondelez Kinh Do''''s shift towards sustainable packaging in the Vietnamese marketplace represents a noteworthy innovation that addresses environmental concerns and positions the company for future growth. Mondelez Kinh Do has implemented a multi-pronged approach: – Material change: By 2021, they achieved 95% packaging recyclability (The Saigon Times, 2021), switching from plastic to recyclable materials like paper and cardboard. – Packaging optimization: The organization works towards reducing the amount of packaging material by 20% for all new product development and re-innovation initiatives (The Saigon Times, 2021). – Consumer awareness: Partnering with PRO Vietnam, Kinh Do is implementing educational programs to raise consumer awareness about recycling habits and the advantages of sustainable packaging (Hoai, 2022). Type of innovation: Sustainable packaging combines existing ideas and technologies in a novel way. Mondelez Kinh Do isn''''t inventing entirely new materials, but rather synthesizing existing recyclable and reusable materials with established production processes to create a more sustainable packaging solution. Source of innovation:

Kinh Do’s Entrepreneurship

Table of contents:

Innovation 2: Sustainable packaging 5

2 Kinh Do Mondelez SWOT analysis (see Bibica and Kido SWOT in appendix) 7

I EXECUTIVE SUMMARY

This entrepreneurship report aims to provide a thorough analysis of Mondelez KinhDo's innovations, marketing environment, and microeconomic factors based on thecurrent context within the Vietnamese bakery industry Two prominentinnovations—cage-free eggs and sustainable packaging—showcase Kinh Do’senvironmental awareness and its capture of sustainable trends The marketinganalysis depicts a detailed comparison between Kinh Do and its two competitors,Bibica and KIDO, regarding the marketing environment, SWOT, target market,marketing mix, and perceptual positions In addition, demand and supply patterns, aswell as price elasticity and market structure, contribute to the identification of KinhDo’s problem, which is the gap in the desire of customers to relish mooncakes morefrequently Seizing this opportunity, the "Golden Moon" Homemade Mooncake Kithas been proposed to meet diverse customer preferences and improve Kinh Do’srevenue Furthermore, a new target market profile and marketing mix convincinglydemonstrate the feasibility of this innovation

II EVALUATION OF CURRENT INNOVATIONS

Innovation 1: Cage-free eggs

Cage-free eggs are an important innovation in the bakery industry, inspired largely

by the need to satisfy changing social demands for better animal care This idea was

motivated by process need to change egg production processes to reduce the use

of traditional battery cages since battery cages are some of the worst types ofconfinement any animal faces on factory farms (Waxman, 2022) The aspect of this

innovation is meeting social needs, which means altering the way eggs are

produced to enhance animal welfare and match customer expectations Thisinnovation not only solves social issues but also allows manufacturers to bettermatch legal trends and market desires for ethically produced food items This

invention may be identified as duplication since it duplicates an existing product

while improving the manufacturing process to meet ethical standards The essential

dimension of this innovation is process innovation, which means changing the way

eggs are produced to enhance animal welfare and match customer expectations

Innovation 2: Sustainable packaging

Mondelez Kinh Do's shift towards sustainable packaging in the Vietnamesemarketplace represents a noteworthy innovation that addresses environmentalconcerns and positions the company for future growth

Mondelez Kinh Do has implemented a multi-pronged approach:

– Material change: By 2021, they achieved 95% packaging recyclability (The

Saigon Times, 2021), switching from plastic to recyclable materials like paper andcardboard

– Packaging optimization: The organization works towards reducing the amount

of packaging material by 20% for all new product development and re-innovationinitiatives (The Saigon Times, 2021)

– Consumer awareness: Partnering with PRO Vietnam, Kinh Do is implementing

educational programs to raise consumer awareness about recycling habits andthe advantages of sustainable packaging (Hoai, 2022)

Type of innovation: Sustainable packaging combines existing ideas and

technologies in a novel way Mondelez Kinh Do isn't inventing entirely new materials,

but rather synthesizing existing recyclable and reusable materials with established

production processes to create a more sustainable packaging solution

Source of innovation:

– Plastic pollution crisis: Plastic waste is a major environmental concern in

Vietnam According to the World Bank (2022), Vietnam discharges an estimated3.1 million metric tons of plastic waste annually

– Shifting consumer preferences: Vietnamese consumers are increasingly

environmentally conscious and demand sustainable products 84% ofVietnamese consumers are willing to pay more for sustainable packaging(Nguyen, 2024)

Dimensions of Innovation:

– Product: Create a slight impact on the core product, but significant changes

to the packaging materials and design

– Process: Significant transformation in production processes to accommodate

new materials, reduce waste, and optimize packaging design

Evaluation of the innovation:

Strengths: This innovation has contributed to solving an urgent environmental

problem since plastic waste is a major concern in Vietnam Additionally, asconsumers increasingly value sustainability, this innovation could significantlyimprove Mondelez Kinh Do's brand image as a responsible organization andencourage other companies in the same industry to adopt sustainable packagingmeasures

Weaknesses: Initial investment in sustainable materials can be relatively high, which

can be a challenge for Kinh Do to consider the weights between prices andsustainability Also, only about 11-12% of plastic waste gets recycled in Vietnam(Nam, 2024), which indicates an inadequate recycling infrastructure in Vietnam

III CURRENT MARKETING ANALYSIS:

1 Marketing environment

Micro environment:

● Customers: Middle to high-income, 23 to 55 years old

● Competitors: Bibica, Kido

Macro environment:

● Politics: Kinh Do Bakery capitalizes on Vietnam's stable political situation andfavorable food sector regulations The Vietnamese government is dedicated toassisting investors in overcoming difficulties, transforming threats intoopportunities, and attaining fast and durable growth (Mai, 2024)

● Economics: Vietnam's emerging economy enhances consumer buying powerboosting sales A favorable forecast for Vietnam's consumption in 2024 will beinfluenced by stable economic development translating into greater financialflexibility, with the impacts of the epidemic progressively diminishing (VietNamNetNews, 2024)

● Social: Demand for easy and packaged food and baked items is increasing due

to urbanization and people's busy lifestyles

● Technology: Machinery and technological advancements can potentially increaseefficiency and quality

● Environment: Kinh Do Bakery needs an eco-friendly approach implementation,such as green supply and waste elimination, to meet rising customer trends andregulations for environmental sustainability

● Legal: Kinh Do must comply with Vietnamese laws and regulations regardingenvironmental protection, labor, and privacy

2 Kinh Do Mondelez SWOT analysis (see Bibica and Kido SWOT in appendix)

Kinh Do is well recognized Kinh Do

Mooncake has been a favorite brand

among Vietnamese customers for

Mid-Autumn Festival Delights for the

Kinh Do relies on the national market.Kinh Do Bakery concentrates on thelocal market, which may posechallenges when dealing with

last 22 years (VietNamNet News,

2020)

Kinh Do Bakery is one of the leading

brands among Vietnamese

The Vietnamese market for sweets and

confectionery is predicted to grow

shortly

E-commerce and social platforms help

reach out to more consumers

More people enjoy the sense of baking

homemade mooncakes and giving

friends and others as gifts Baking is an

amazing experience in that stress can

be relieved and creativity can be

promoted Joining workshop sessions

helps kids and parents enjoy the

moment of fun and relief (Tham Gia

Workshop Làm Bánh Trung Thu, Hoạt

Động Ý Nghĩa Dịp Tết Đoàn Viên,

3 Target market

Demographic Families with

childrenMainly children andyoung adult

Low tomiddle-income

Both individualsand familiesWide range fromchildren to adultLow to

middle-income

Families with kidsMostly children andyoung adult

Low tomiddle-income

Geographic Urban areas across

VietnamTropical climate

Urban areasacross VietnamTropical climate

Strong in urbanareas, growing inrural

4 Marketing mix

Product

Kinh Do Mondelezmanufactures andprocesses

confectionary withmultiple local brandsincluding Solitesnack cakes, Kinh

Do mooncakes,AFC crackers, andCosy biscuits

Kido Bakeryproduces anddistributes a widerange of products of

4 main lines: FreshCake, Moon Cake,Snack Popcorn,Potato Chips, andEnnak (spicednoodle crisps)

Bibica concentrates

on its manufacturingexpertise inconfectionery

product lines, whilecontinually

expanding anddiversifying itsproduct offering tofulfill all clientdemands

Price

According to KinhDo’s 2024 pricequote (Bánh TrungThu Kinh Đô, 2024),Golden Moon MoonCake is pricedbetween 570,000VND and 1,300,000VND Black & GoldKinh Do Moon Cakecosts between640,000 VND and5,000,000 VND

is priced between50,000 and 135,000VND

According toBibica’s mooncake

up to 148,000 VND

Psychographic Enjoy sweet and

baked goodsEmphasize quality,taste, and brandreputation

Enjoy conveniencefoods

Emphasize health,tradition, andinnovation

Enjoy snacks andsweets

Emphasize qualityand health

Behavior Everyday snack,

gift-givingTaste, conveniencesnack, affordability

Daily meals, casualsnack

Nutritional value,convenience, taste,affordability

Regular snacking,gifting

Taste, quality,affordability

Single items costbetween 55,000 and171,000 VND.

Place

Distributedthroughout 64provinces and citieswith more than 300distributors and200,000 retail pointsExported to morethan 30 countriesaround the world,including the US,Japan, Thailand,Korea, Singapore…

(Bánh Trung ThuKinh Đô, 2020)

More than 200strong distributors, achain of 30 Kinh DoBakery stores,nearly 120,000points of sale(KIDO, 2024)

3,000 supermarkets,convenience storechains, anddistribution systemswith more than140,000 stores fromSouth to North (Vy,n.d)

Promotion

Promotecampaigns, andadvertising throughsocial media such

as Facebook, andYoutube

Launch specialproject forMid-autumn festival

Promoted throughTVC, large creativedesigned billboards

Usingword-of-mouth,TVC, Facebook, andMusic Marketing.(Vy, n.d)

5 Perceptual Positioning Map

The price and market share matrix shows that Mondelez Kinh Đô maintains a highmarket share with medium prices, reflecting a strategy centered on affordability andwide consumer acceptance KIDO, with a large market share and lower prices,targets consumers focused on strong brand loyalty or perceived value Bibica, givenits low market share and low prices, appears to be a smaller competitor in theindustry, appealing to a more price-sensitive demographic (VIETDATA, 2023) Tobetter their competitive positions, Mondelez Kinh Đô should continue to innovate tomaintain their pricing, KIDO could try improving perceived value to justify highercosts and Bibica might focus on growing brand awareness and attractiveness toboost market share

IV CURRENT MICROECONOMICS ANALYSIS

1 Demand analysis

The Mid-Autumn Festival is expected to have a beneficial impact on fresh cakeproduction in the third quarter, raising the revenue of the third quarter revenue threetimes as much as the first and second ones (VIRAC, 2023) According to aninvestigation from the Ministry of Industry and Trade, the confectionery productcategory's sales rise is around 15% annually, with global industry revenues projected

to be 51 trillion VND (Antv, 2023) While confectionery goods from ASEAN nationshave their tariffs on entry eliminated and are expanding in volume in Vietnam, localproducts continue to dominate the market, accounting for more than ninety percent

of the market share (Tran, 2023)

According to a firm with 18 years of experience producing and marketing sweets inVietnam, opulent and original designs are hardly a "monopoly" of items abroad (Antv,2023) Various local confectionery companies have courageously ventured andevolved technology to enhance product quality, resulting in market dominanceacross all sectors, from ordinary to high-end The Vietnamese confectionary marketpresently sees fierce competition from both domestic and foreign enterprises

Factors that cause the demand curve to:

– Increased income: People are willing to pay more for mooncakes to serve them

as gifts for friends and family

2 Supply analysis

The Vietnamese bakery industry is expected to hold high growth potential Over theyears, the bread sector has witnessed a production volume of over 2.5 billionkilograms annually from 2019-2023 (Statista Market Insights, 2024) and is expected

to experience gradual growth in the next 5 years (see Appendix )

To improve operational efficiency and product quality, Mondelez Kinh Do is making atransition to digitalization and technological innovation The major show-stopper isthe implementation of an automated sales system (Lan, 2023), which helps optimizethe processing process and customer interaction In addition, the company alsoapplies automation software to ensure strict product quality.

Factors that cause the supply curve to shift:

Shift left:

● Increased price of wheat: The Russian-Ukrainian conflict is one of the reasons forthe increase in bread production costs, with the average wheat price in Vietnamrising by over 6% since July 2023 (“Giá Lúa Mì Tăng Cao Nhất Trong 10 ThángTrở Lại Đây,” 2024) Besides, 43.8% of Vietnam's wheat imports are fromAustralia in 2023 (Thời Báo Ngân Hàng, 2023) (see Appendix )

● Floods and droughts caused by climate change affect agricultural production,leading to a shortage of inputs such as wheat, sugar, etc., which may affectbaking production.

Shift right:

● Many businesses apply automation technology and modern production lines tohelp enhance labor productivity, reduce production costs, and hence increase thesupply of baked goods

● Lower oil prices reduce transportation and production costs, leading to a likelyincrease in baked goods supply, with a 20% decrease in 2023 compared to 2022(Tuan, 2024)

3 Price elasticity of demand

Mondelez Kinh Đô has observed a shift in consumer behavior in Vietnam, withconsumers becoming more price-sensitive and seeking value and promotions Thissuggests that price elasticity of demand may vary across different product categoriesand consumer segments Inelastic products, such as Cosy Biscuits, have strongbrand loyalty and may exhibit inelastic demand, while more commoditized productsmay show higher elasticity To capitalize on this, Mondelez Kinh Đô shouldimplement a dynamic pricing strategy, offer promotional discounts and value packs,and tailor marketing strategies to different consumer segments Investing in productdifferentiation and conducting regular market research can help guide strategicdecisions and predict market reactions to price changes Lastly, enhancingoperational efficiency through technology and data-driven decision-making can helpbetter serve consumers and manage inventory

4 Market structure

The Vietnam bakery sector is growing rapidly, and it is expected to grow even fasterand increase the range of products offered due to changing consumer tastestowards immediate, multiple bakery items, increased incomes, and modification ofliving standards The bakery sector is set for continued expansion and is ready forenhanced variety (6Wresearch, 2022)

The bakery industry in Vietnam can be considered as a monopolistic structure because of:

● Several bakery firms exist in the Vietnamese market nowadays Besides severalsmall enterprises, this industry has some significant and well-established bakerychains and brands, such as ABC Bakery, Kinh Do Bakery, and Tous Les Jours.These brands have an enormous market share, huge distribution networks, andlarge marketing expenditures

● When compared to industries such as manufacturing or technology, entering thebakery industry needs less money Many bakeries begin as small, localcompanies, making it relatively easy for beginners to enter the market

● Vietnam's bakeries provide a diverse range of items, including traditionalVietnamese baked foods as well as Western-style pastries and bread However,there is no huge difference between each bakery firm