sabeco saigon beer alcohol beverage corporation one of vietnams leading

To analyze SABECO’s the effectiveness of SABECO’s marketing strategies, the report base on its situation to conduct a SWOT analysis and then find out the issues SABECO faces.. findings i

Table of Contents

1 Summary Executive 2 Company Introduction 3 Current Marketing Situation

3.1 Internal Environment 3.1.1 Current business performance 3.1.2 The exiting 4Ps

3.2 Micro Environment 3.2.1 Customer Analysis 3.2.2 Supplier Relationships 3.2.3.Competitors

3.2.4 Intermediaries

6 Marketing Objectives 7 Marketing Strategies

7.1 Product 7.2 Price

7.2.1 Pricing strategy

7.2.3 Price adjustment strategy 7.3 Place

7.3.1 Marketing Channel 7.3.2 Channel Structure: System of vertical marketing 7.4 Promotion

8 Action Plan: From 2024 January - 2024 December REFERENCES

With 148 years of establishment and development, SABECO's effort to convert from as French-owned brewery to Vietnam's leading beverage company is a testament to its resilie adaptability, and commitment to quality The company has weathered numerous challe throughout its history, emerging stronger and more successful each time Formulating applying its clear and comprehensive marketing strategy has contributed significantly SABECO’s success

To analyze SABECO’s the effectiveness of SABECO’s marketing strategies, the report base on its situation to conduct a SWOT analysis and then find out the issues SABECO faces findings indicate that despite owning certain strengths such as the numerous product port and strong supplier relationships, SABECO deals with dramatic threats from an unstable gl economy, government regulations, and other factors Based on SWOT analysis, it ca concluded that SABECO faces three main issues related to the change in govern regulations, the increase in raw material price due to an unstable global economy and si competitors These issues mostly belong to the product in the 4Ps, the important factor the needs to find out immediate solution The report recommends a new strategy and relevant a plan related to releasing a new product that meets the requirements of the new situation

SABECO, Saigon Beer — Alcohol — Beverage Corporation, one of Vietnam’s leading manufacturing and trading of beer and alcoholic and non-alcoholic beverages corporati@hs

with five core values of the company, with traditional brand,

social responsibility, cooperation for mutual benefits, sticking, and continuous improvement (SABECO, 2023)

SABECO’s product portfolio includes beer, alcoholic drinks, and non-alcoholic drinks, in which beer is considered the main target

product line of the company, with three crucial products: Saigon

Beer, Beer333, and

BeerLac Viet Through 26 subsidiaries and 18 associates and joint ventures, SABECO’s products are distributed to 63 cities in

Vietnam and 38 countries such as the USA, Canada, Chile,

Đã uống rượu bio - Không lái xo

3.1 Internal Environment 3.1.1 Current business performance SABECO’s organizational structure includes departments such as the internal audit department, BOD office, Each department has its own function and contributes to SABECO’s operations

and success

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rroeer

QUAUTY CONTROL serr

Figure 1: SABECO's Organizational Chart

According to the annual report 2022, SABECO achieved net revenue of 34,979 billion VNDga

profit after tax of 5,500 billion VND, an increase of 32% and 40% compared to 2021 Thisiis

SABECO’s excellent recovery after profit decrease due to COVID-19

Billion VND) iiion VND) 97.099,

aseao

h +32.6% +20.1% +40.0%

Figure 2: Net sales and Profit after tax of SABECO

However, in the first half of 2023, both net sales and profits of SABECO (14,526 billion VN

and 2,214 billion VND) were lower than in 2022 due to the high input costs and other expernges

2

uncertainties and the government’s regulations 3.1.2 The exiting 4Ps

a Product SABECO provides many leading product portfolios with affordable prices and fit wit customers' tastes in Vietnam's beer market Saigon Export, Saigon Lager, Beer 333, are the most common products, which can be easily bought at supermarkets or any stores

SAIGO"

b Price

To determine prices, SABECO used a cost-based calculation framework They initially cre

the product, decide on costs, then set prices based on costs, and finally convince custo

Currently, SABECO faces big products such as HEINEKEN, and Budweiser ; therefore, competitive pricing is considered an important method of discussion

Besides cost-based pricing, SABECO practiced other pricing techniques such as bundle pri which provided product bundles at discounted prices for specific occasions, and promoti pricing with discounts and promotions offered in the year so as to attract and retain custo They also use discriminatory pricing, where they charge more for products in tourist a compared to local markets (SABECO, 2022)

c Promotion SABECO’s market strategy is implemented in many different aspects, along with many different creative ideas SABECO spends hundreds of millions of revenue per year

3 resulting from the increased competition among international brewers, global economic

ers.

advertising The cost is about 50,000 - 70,000 USD for each advertising video and 1000 to 4g00

USD for a slogan Over four years from 2019 to 2023, SABECO launched a lot of promotion programs in ters of traditional spirits with the aim of attracting more customers and expanding its market shgre

Culinary and Cultural Festival in Quang Tri in April 2023 in collaboration with the Ministry F

of Culture - Sports - Tourism,

the 10th Southern Folk Cake Festival in Can Tho aims tol introduce and bring folk disheg of the Southern region to tourists from all over the

country

d Place

than 200,000 outlets and 11 regional and nationwide trading companies (Annual report, 202) Moreover, SABECO distributes products through many different channels such as Faceb@®k, and SABECO’s mobile applications A large compatible commercial channel distribution system can be seen Thanks to the extensive distribution channel system, customerggican conveniently buy the brand's products Besides, it also helps increase brand awarenesggjand strength

Micro-environment factors impact significantly on SABECO's success and failure Most of tie factors like customers, suppliers are considered SABECO’s strengths thanks to positive contributions such as ensuring quality products, promoting consumption,

3.2.1 Customer Analysis a Segmenting

holidays

User status Ex-users, regular users, | Ex-users, regular user

potential users, new users potential users, new users

b Targeting SABECO’s target customer segment is Premium-Class Customers because it brings highe profits than Middle-Class Customers To compete with international brands like Asahi Heineken, targeting Premium-Class Customers is the chance for SABECO to sell Vietnamese-branded goods to numerous other nations

According to its annual report for 2022, SABECO realized that focusing on strengthening vital market segment, the famous and sub-premium product lines, will create momentum reaching the goals of targeting the premium segment

c Positioning By pricing its higher-quality, more distinctively flavoured products lower than those of its riva SABECO has been able to establish a competitive edge in the target market Specific SABECO consistently varies the form and quality of its products The business consiste upgrades the look, runs media advertisements, and runs promotions with high-value prese

win over customers

3.2.2 Supplier Relationships SABECO has built sustainable and long-term relations with numerous suppliers, both local non-local such as Cargill, Malteurop, and Soufflet for malting barley, BarthHaas, Hops Unic¢ and Yakima Chief Hops for hops, These long-term relations provide steady, affordable and quality inputs of ingredients and packing materials which generate SABECO’s consistent product quality, competitive pricing and security of supply

3.2.3.Competitors With a large population and young base, the consumption needs of the Vietnamese peoplÑare relatively large Therefore, in the domestic beer market SABECO faces many strdÑo competitors However, it is successful for SABECO to maintain a high position in t

the second rank in the market It can be seen that Heineken, with 44.4% of the market shaiie in

2021, a higher 10.6% than the figure of SABECO (VIRAC, 2023)

2023, the first phase of the project was completed and marked the first milestone of SABECO’s success in building strong intermediary relationships (SABECO, 2022)

3.3 Macro Environment

Macro-environment forces generate both negative and positive impacts on SABECO’s development The growth of Vietnam's economy and modern technology brings consideraple opportunities for SABECO; however, SABECO also faces threats caused by other forces ike political and social

3.3.1 Political Forces On December 30, 2019, the Government issued Decree No.100 (No 100/2019/ND-Cl™® -

including the Law on Alcohol Harm Prevention which resulted in a long-term impact c SABECO Imposing higher fines to objectives violating the law such as from VND 6,000,008

6

to VND 8,000,000 toward those who “operated a vehicle while BAC exceeds 50 - 80 mg pe 100 ml of blood or BrAC exceeds 0.25 - 0.4 mg per litre of breath” (No 100/2019/ND-CP) leads to a decrease in residents’ beer consumption

Moreover, another Decree about the restriction of alcohol advertising issued on Februa

2020, influenced SABECO's performance (annual report of SABECO 2022) Decree No.24 Government controlled advertising for alcohol under 15% and beers, drinking alcohol television series or movies, (No 24/2020/ND-CP)

Another crucial point that impacts SABECO’s producing and trading process is a hike 1n excise tax on alcohol and beer According to VNA (2023), tax rates applied for alcohol and bee Vietnam now are 35-65% and 65%, respectively Although these figures are still low compa to other countries, it has a certain impact on the production of alcoholic goods and bee corporations in Vietnam like SABECO

3.3.2 Economic Forces Vietnam's economy has significantly recovered in a three-year period after the COVID pandemic Like other countries, the GDP of Vietnam also plummeted in 2019 due to the img of the COVID-19 pandemic The figure decreased from 7.15% in 2019 to 2.94% in 2020 ¢ continues declining to 2.58% in 2021 and after that, leaped to 7.00% in 2022 (Schrage, 2d Although the GDP of Vietnam decreased as that of other Asian countries, the figures of Viet have been higher, which shows Vietnam’s good performance during both COVID-19 and the following three years

Regarding the global economy, the conflict between Ukraine and Russia has been particu disruptive to global trading The IMF also attributed some of the global inflation to higher fos and energy prices; inflation in 2022 was projected to rise 6.6% in developed countries and 9 in emerging markets (SABECO, 2022) These economic instabilities are also highly releva

SABECO's activities, for example, the increased cost of raw materials The war could

protracted, upsetting the supply-demand balance and causing cost-push inflation 3.3.3 Social Forces

In a three-year period after the COVID-19 pandemic, most residents were aware of the hẻ importance That led to a decrease in the number of visitors to restaurants and a tende switch to other types of drinks such as spring water, and non-alcoholic drinks Since 2¢

food products to increase resistance and immune system , up to 63.7% of customers cut on spending on beer and wine (Giang, 2021)

3.3.4 Technology Forces SABECO is utilizing various technology forces, such as big data analytics, cloud computiflig and social media platforms, among others, to improve its operational efficiency Automa filling and packaging lines have been introduced in breweries which has led to great « reductions (SABECO, 2023) SABECO also has been exploring the potential use of blockc to improve supply chain management and product tracing and the application of robots i warehouses and production areas to undertake simple duties, including picking and packagi goods This is intended to simplify warehouse operations and enhance efficacy

- Many leading product portfolios witl - The firm’s unstable performance with

customers’ tastes in Vietnam's beer.| tax due to increased expenses

ingredients inputs, packing materia) SABECO target national cultural a and goods thanks to strong suppli spiritual values, which reduces reach

- A wide distribution and large

advertising to make more custome approach the firm’s product

- Application of high technology sucl as big data analytics, cloud computin

efficiency

Opportunities

External - The recovery of Vietnam’s economy

COVID-19 and the rapic adoption of SABECO to the nev situation helped improve the loss in tl

after

pandemic period and continuous improve to achieve other goals - Increase productivity and loads <« work based on the application

- Decree 100/CP on penalties

No.24 regulation on alcohol advertising a

alcohol drinkers, on th

excise tax payment obligation: Leadi

to a decrease in residents’ b

consumption - Global price inflation, particularly ra materials for the beverage industry s

conflict between Russia and Ukraine as malt, aluminium,

- Strong domestic competitors li

Heneiken, Habeco - An increase in residents’ awarenes healthcare after Covid-19: Limit t

consumption of alcoholic drinks