Paddle pop marketing plan 2014

Within the scope of this Thesis, Wall’s health will be analyzed under the model 6P’s of Unilever with 6 levers as Price, Product, Proposition, Pack, Place and Promotion to give the brand

VU THI NGUYET QUE

LO DANG MY VAN

PADDLE POP MARKETING PLAN 2014

MASTER PROJECT MASTER IN MARKETING AND ADVERTISING

Tutor’s name: HUYNH BA CHAN NHU

Ho Chi Minh City (2014)

ECONOMICS & MANAGEMENT

MMA7

COMMITMENT

We, Vu Thi Nguyet Que and Lo Dang My Van, commit that this project has been

accomplished by ourselves based on fact and figure collected from the public and Unilever Vietnam

This project is done for the completion of Master Marketing and Advertising MMA 7 course only and will not be used for other purposes

In addition, we would like to express our appreciation to great support of Wall’s Vietnam marketing team as well as the encouragement of Class Administrator (Ms Le Thi Ngoc Hien) and all members of MMA7 course

Last but not least, our deep gratitude is given to our beloved families, friends and colleagues, who have always inspired and motivated us during the course

TABLE OF CONTENT

Executive summary ……… ………7

I BRAND OVERVIEW 1 About Unilever ………8

2 About Wall’s ice cream ………8

3 Market situation analysis ……….9

3.1 Macro environment analysis ……… 9

3.2 Ice cream industry analysis ………11

3.3 Competitors analysis ………… ………12

II BRAND ANALYSIS 1 Business performance ……….15

2 Brand marketing activities in 2013 ……….16

3 6 P’s Analysis 3.1 Proposition ………17

3.2 Promotion………21

3.3 Place…… ……… ……… 22

3.4 Packaging ……… 24

3.5 Price ……….……… 25

3.6 Product… ….……… 26

III “PADDLE POP ADVENTURE FRAMEWORK” CAMPAIGN ANALYSIS 1 Campaign overview ……….29

2 6P’s Deep Dive ………30

2.1 Place ……… 31

2.2 Promotion ……… 32

IV RECOMMENDATION 1 Place ………35

2 Promotion ………36

REFERENCE……….39

APPENDIX APPENDIX A: STORY - DIAGRAM ………41

APPENDIX B: PHOTOS ………43

APPENDIX C: QUESTIONAIRE SAMPLE OF SURVEY ……… ………47

GLOSSARY

A&P advertising & promotion

According to Euromonitor report, Vietnam ice cream industry is really potential to invest with the expected volume CAGR growth will be up to 7% and value CAGR growth will be even higher with 10% at the end of 2017 The better standard living and changing in behavior of consumers from cheaper, poor quality to medium high and branded ice creams are also some main reasons that facilitate for the positive growth of this industry However, along with the attractive of market, surely the competitiveness will be also very harsh with strong players that Wall’s has to face such as Kinh Do, Trang Tien, Thuy Ta and some imported brands like Baskin Robins, Swensen’s and Hagen Dazz.

Within the scope of this Thesis, Wall’s health will be analyzed under the model 6P’s of Unilever with 6 levers as Price, Product, Proposition, Pack, Place and Promotion to give the brand overview Then, Paddle Pop – the biggest contributor in TO of Wall’s – with its main campaign “Adventure Framework” will be chosen to analyze deeper Continue to follow the 6P’s Model but in the deeper layer as 6P’s Detective Worksheet, the surface issue “weak proposition towards consumers’ minds” will be investigated into each P lever and then define the root cause According to this exercise, Place and Promotion are picked up to dig dive and based on that to offer some relative recommendations that Wall’s can apply to improve Paddle Pop marketing activities next year

Specifically, the recommendation of Place will be focused on howto strengthen its visibility in street shops and increase availability in modern trade Meanwhile, the recommendation of Promotion will be allocate the A&P split to be more appropriate and effective, pilot the testimonial communication approach to promote innovative products and change the way to

implement the promotion burst currently

I BRAND OVERVIEW

1 About Unilever:

Unilever is an Anglo – Dutch multinational consumer goods company founded in 1930 producing food, home care and personal care products It is the world’s largest consumer goods company and the world’s largest manufacturer of ice cream Unilever has operations

in over 100 countries and owing 400 brands with 25 of its largest brands accounting for over 70% of total sales The company structure is dual listed company based in Rotterdam, Netherland and London UK which have the same directors but operates as a single business

Unilever started its operation in Vietnam since 1995 with total investment up to date is USD 300 million, specializing in Home and Personal Care brands, Oral Care products, Foods and Tea-based Beverages Unilever Vietnam is currently operating a factory in Cu Chi while maintaining contract manufacturing relationship with various local SMEs Many

of Unilever Vietnam’s brands have become #1 household brands in Vietnam, including Omo, Sunlight, Dove, Sunsilk, Clear, Lux, Close-up, Lipton, Knorr, Viso, Vaseline, P/S and Surf

2 About Wall’s ice cream:

In 1922, Thomas Walls & Sons, originally a sausage company, began making ice cream in London, same year the company was acquired by Lever brothers Today Wall’s is part of Unilever’s ‘Heartbrand’, sold in more than forty countries Each country has its own brand name but the heart logo is universal

Wall’s ice cream entered Vietnam market since 1997 and Wall’s was the first brand had heavy investment in production and professional branding activities in local ice cream market After 6 years, Wall’s has become a strong brand with 20% - 30% growth per annum, 50% market share and built up a wide distribution network with 115 distributors and 4000 cabinets in main cities However, the result was not as Unilever expectation due

to low income of consumers while the price of Wall’s ice cream was at premium level As

a consequence, in 2003, Unilever sold the entire production facilities and technology of Wall’s to Kinh Do, a big local confectionery producer and the product name was changed

to Kido ice cream During 2003 to 2004, Kinh Do ran campaigns with both Wall’s and Kido’s logos to gradually converted consumers awareness to new brand In 2005, Kido was the dominant player in ice cream market Since 2006, Metro Cash & Carry imported Wall’s from Thailand and distributed through their channels as other commodities Until August 2009, Unilever has stepped up the investment in Wall’s ice cream in Vietnam through import from Thailand when positive growth has been foreseen in local ice cream market

With belief that people need small moment of pleasure in lives, Wall’s ice cream has the vision to create 100 million smiles every day by bringing joy and happiness to every home

in Vietnam

3 Market Situation Analysis:

3.1 Macro Environment Analysis:

3.1.1 Political:

Recently, Vietnam has good opportunity to develop its export market when going to sign some Free Trade Agreements such as TPP (Trans-Pacific Strategic Economic Partnership Agreement) or European Agreements In vice versa, Vietnam also has to open to welcome more world-class brands into the domestic market which specifically belongs to Food & Refreshment industry can be named as Burger King, Mc Donald’s, Popeye, Subway, Hagen Dazz, Baskin Robins, Diary Queen and so on

3.1.2 Economic:

Based on Vietnam Food & Drink Report (BMI, 2013), in 2013, per capita food consumption growth is 6.4% and forecast to 2017, the compound annual growth rate (CAGR) will be 8.39% The healthy increase in food expenditure is a good signal for Food & Drink business to invest more strongly

Source: General Statistics Office of Vietnam, BMI, 2013

3.1.3 Social:

According to the research of US Department of Agriculture in their Retails Food Report 2013, in recent years, Vietnam is witnessing some new trends in society that are:

- More consumers have western-minded, especially the large number of youngsters who live in urban areas

- More middle-class families which parents are busy with working and do not have much time for food shopping

- Modern retailers (super markets, hyper markets, convenient stores) offer the wider range of product from low tier to premium that can attract even low income consumers

- More women join the workforce and therefore, disposable family income also increase that will be spent for higher-value food products

- More concern about and willingness to pay for nutrition, quality, hygiene, and food safety

- More loyal to brands but also willing to discover new products

- Shop for food in both modern retailers (weekly) and traditional markers (daily)

3.1.4 Technology:

Though government has focused to build, agriculture sector is still blamed to be too slow to adapt new technology that is globally competitive in the long term However, thanks to the penetration of world-class food & refreshment brands, the know-how technology is also coming to Vietnam and expected to be the motive for agriculture sector to push its technology development

3.1.5 Legal:

Owing to some scandals related to Food Hygiene in previous years, since 2013, Ministry of Health started to tighten the regulatory, especially in the additive products, dietary supplements and food advertisement in general This authority’s movement causes a considerable difficulty for food & refreshment businesses when making decision to import or produce new products that might face low chance to be censored

or promoted later on

3.2 Ice-cream Industry Analysis:

3.2.1 Market analysis:

Ice cream market is regarded as a Blue Ocean which is very potential to grow but quite not harsh competitive yet In 2012, Euromonitor International informed that the market sees the 6% growth in volume and 19% growth in value to achieve 72 million Euro equals to 2 thousand tons ice cream Similar to total food market trend, the improvement in economic situation and disposable income create the growing demand for ice cream in both impulse and take-home Up to 2017 (5 years forecast period), ice cream category in Vietnam is supposed to grow 7% in volume CAGR and 10% in constant value CAGR to reach 113 million Euro or equivalent to 32.5 thousand tons

Source: Michael Porter, “Competitive Strategy”, 1980

As for consumers, there’s a trend to switch from cheaper water ice cream to better quality dairy ice cream and premium fresh ice cream Amongst ice cream categories, consumers skew to purchase single proportion dairy ice cream with the insight that it is the most convenient and versatile type with variety and rich taste Besides that, within impulse ice cream, owing to widely availability and affordable price, stick is still more popular than cones and cups Although ice cream flavors in Vietnam is becoming variable with either import or local production, chocolate still remains the most

favorite one following by strawberry and vanilla Consumers just accept to try the new flavors if being strongly recommended by friends or relatives and attracted by very well advertisement

3.2.2 Competitor analysis:

Direct competitor:

During 2012 and 2013, there were some international newcomers joining the playground who are very expertise in product innovation such as Baskin Robins, Swensen’s and Hagen Dazz However, the market share pie is still own by local brands with more than 60% with the leading one is Kinh Do Kinh Do possesses 28% share and maintained its position through 5 years continually, followed by Vietnam Diary

Supplier Power

- Multi choices of material sources with

different quality and cost

- Huge capital investment to build factory

and manufacture locally

- Goverment opens to welcome more

volume

-Significant product difference in terms

of taste & price

-Few but diversified players from low tiers to high end

Product JSC (Vinamilk) with 17% share The success of Kinh Do can be explained by the acquisition they made with Unilever in 2003 At that time, Unilever intended to invest seriously to the ice cream market of Vietnam so they founded the factory as well

as the workforce, technology, distribution channels, etc… up to 14 million Euro However, even though how hard Unilever tried to do marketing and create remarkable and beautiful image of Wall’s ice cream in consumers’ mind, the demand was not high enough to sustain the business longer As the result, Kinh Do had chance to get nearly all property from Wall’s with only 0.7 million Euro including know-how technology, product formulation, high-skill workforce and distribution channels (130 distributors and 4000 retail shops) within 18 months After more than one year using Wall’s brand name, at the end of 2004, Kinh Do started to build its own kingdom and easily maintained its share through the year due to low competitive Nevertheless, in previous 2-3 years, Kinh Do’s throne seems to be shaken many times with the coming back of Wall’s and then the visit of some international newcomers Unless having breakthrough innovation in product and marketing, Kinh Do will be very soon taken out its position

The market share from 2008 to 2012 based on Euromonitor showed that:

Source: Euromonitor International from office statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

In terms of brand, Merino of Kinh Do is also the leading brand with 1/5 total share:

Source: Euromonitor International from office statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Key players can be mapped to see the difference in market position as below:

Corporation 2009 2010 2011 2012

Vinamilk Vietnam Diary Products JSC

(Vinamilk)

13.2 14.2 15.4 16.5

Trang Tien Trang Tien Service & Trading Co

Ltd

Monterosa Phan Nam Monterosa Trading JSC 2.7 2.4 2.2 1.9

Swensen’s CoolBrands International Inc 0.2 0.2 0.2 0.2

Indirect competitor:

In addition to direct opponents like above ice cream brands, Wall’s ice cream is also facing with the attack from other drinks and junk food such as Tea RTD, Soft Drinks, Yoghurt and Snack However, this competitive pressure is quite tender compared to the real battle within ice cream players

II BRAND ANALYSIS:

1 Business Performance:

Ending 2013, Wall’s exited with 6 million Euros in Turn Over which is 10% growth versus last year This was in-line with 5 years growing plan of Wall’s in Vietnam that is going to end up 2015 at 10 million Euros

Source: Internal Data

Regarding to profitability, Wall’s is sustaining its healthy growth due to moderate Gross Margin around 44% However, the current 0.5 mil Euros of Profit Before Indirect does not reach its optimum number yet due to the high expenditure accounts up to 36% Turn Over

of Advertising & Promotion equivalent to around 2.3 mil Euros This expenditure is

necessary to review to either reduce or re-allocate the portion between 2 pools Advertising and Promotion to effectively gain more Turn Over

2 Brand Marketing Activities in 2013:

In 2013, Wall’s had total 6 marketing campaigns with 3 product innovations, 2 promotions and 1 activation with total Advertising & Promotion expenditure was 2,2 mil Euro which

is equivalent to 37% Turn Over of Wall’s Compared to the norm around 25% of FMCG market, this is quite a much higher number but in fact, when translating back to absolute amount 2,2 mil Euro is appropriate to invest for an emerging brand like Wall’s In order to grow business further, gain share and build the category, Wall’s need to be invested consistently and continually to promote in marketing activities

Jan Feb Mar Apr May Jun Jul

Aug

Sep Oct Nov Dec

Campaign Paddle Pop

MOO

Cornetto VALENTINE

Cornetto MINI

Paddle Pop

DINO

Paddle Pop SUMMER

Paddle Pop YEAR END

Type Product Inno Activation Product Inno Promotion Promotion

-Gifts

-POSM -Gifts

Cost 10,000 € 42,000 € 18,000 € 560,000 € 618,000 €

Total Cost 167,000 € 312,000 € 218,000 € 685,000 € 818,000 €

2,200,000 €

3 6P’s Analysis:

The Unilever 6P’s Analysis is a marketing model applied for global Unilever This model helps marketers to have rounded view of the brand they are managing and deep dive the root cause of what happen to the brand

6P’s or 6 Levers include:

3.1 Proposition

Paddle Pop - “Thrilling & Exciting Adventures” vs Merino – “Unending joy”

In the segmentation to kids from 6 to 12 years old, Paddle Pop of Wall’s has different proposition than competitor, Merino of Kido Understanding the insight of kids who love to play and explore the world with limitless imagination, Paddle Pop is formulated as the ice cream for fun and play so its icon, Paddle Pop Lion is designed as a friend to bring kids to a mysterious and magical world Paddle Pop Lion and adventure have been the heart of Paddle Pop ice cream and consistently conveyed in product packaging, POSM, advertising, cartoon, games and promotional campaigns

This consistency in proposition has contributed to the success of Wall’s when re-entering Vietnam market since the past consumers (7x and 8x generation) who are parents now will soon recognize their favorite product during childhoods and hence will be willing to buy for their kids or influencing them

In order to differentiate from Paddle Pop after the acquisition, Kido created Merino Cutie Bear as core character representing joy seeker with the message “Unending joy” reflected

in advertising, POSM and packaging However, according to the survey, Paddle Pop has stronger position in customer mind about ice cream for kids and Paddle Pop Lion becomes more popular than Merino cutie bear

Packaging TVC

POSM

Cornetto - “The Expression Of Love” vs Celano – Premium Ice cream For Teen”

For teen and young consumers who love to socialize and hang out with friends, Cornetto and Celano are two popular products with similar size, premium packaging, core flavors but totally different proposition

For long, Cornetto has been known as the expression of love and this proposition is conveyed in all aspects to create the chance for people to show their love, to express their feeling to their crushes The first aspect can be seen in the way they name the product, for example five flavors of Cornetto Royale reflect sweet message as Chocoluv, Backforest blossom, Luv You Berry Much, Cookies & Sweet Dream, Tiramissyou The second aspect

is heart icon in the packaging which can be seen from any angle The last but not least is promotion campaigns, all detail from the theme as “Road to love”, “Show your love”,

“iLove Cornetto” , TVC to fan page have closely linked to core message of Cornetto For example, the recent campaign “Cornetto - Turn Up The Love” on Valentine Day 2014 has seen the storm of respondent on social media and the participation of 1,000 couples in the event to show their love

TVC Packaging

POSM

If Cornetto is perceived more relevant to couple, love and connection, Celano is propositioned as premium ice cream for teen with the message “Being Cool” or “Cool Style” is conveyed with the image of hot boys, hot girls in all advertising

Event

Digital marketing

TVCPOSM

Digital marketing

Taking all parameters into consideration, the proposition of Wall’s ice cream is more consistent and unambiguous than competitors That is the reason why Wall’s ice cream has remained strong position in consumers’ mind until now

3.2 Promotion:

When talking about promotion, Wall’s separate it clearly into ATL and BTL activities Up

to now, all marketing activities are used to promote sub brand (either Paddle Pop or Cornetto) rather than promote mother brand in umbrella way

Above The Line:

ATL or so-called Traditional Marketing is airing TVC on TV channels where Wall’s usually invest up to 44% in their total Marketing Budget Thematic TVCs are 100% adapted from relative countries in same South East Asia region such as Singapore, Thailand and Indonesia Towards Promotional TVCs, Wall’s will also use regional on-hand materials but plug in some new scenes that illustrate local promotional messages and gifts This action helps Wall’s to save cost a lot in terms of TVC production As for TV channels, it depends on the sub brand to decide which and how many channels to go but VTV (or national channels) is always the MUST due to its huge coverage Media budget for VTV channels is usually account 60% total budget of TV airing to ensure the effective reach and frequency

Below The Line:

Meanwhile, BTL are activities that support the campaign via different media channels besides TV, for example POSM, PR, Digital, Event and so on It is up to the target audiences of each sub brand then Wall’s will combine multiple channels at once to approach in the appropriate way For instance, with Cornetto, which target audiences are lifestyle youngster, the integration of TVC – POSM – PR – Digital – Event should be necessary to build awareness as well as engagement of any campaign However, with Paddle Pop, a brand for kids who love fun and adventure, the channel mix can be simpler with TVC – POSM – Gifts only

Source: Internal Data

3.3 Place

The distribution strategy of Wall’s to end consumers since the re-launch has focused on the growth of cabinet and expansion of distribution network to main diverse channels in both general trade and modern trade such as supermarkets, convenient stores, street shops, entertainment centers Up to end of 2013, Wall’s cabinets have been expanded to 7,200 in Hochiminh city and nearby cities as Binh Duong/ Dong Nai/ Phan Thiet/ Vung Tau/ Tay Ninh/ My Tho/ Long An in comparison to 4,000 Kido’s cabinets in respective regions In term of channels, street shop is the dominant with 5,617 cabinets (Appendix 4)

Source: Internal Data

PR (print + digital) Gifts

In term of geography, Wall’s cabinets have exceeded Kido’s in the Southern area but in nationwide, Kido’s expanded its presence to the Central and Northern provinces

Source: Internal Data

As other impulse products, Wall’s has classified display criteria for each distribution channel to meet the demand and nature of target customers That is the reason why Paddle Pop standees are seen at street shops and kid school’s canteens while Cornetto standees at convenient stores and entertainment centers

- Canteen in kid schools and nearby shops (within the radius of 100 meters)

- Kid entertainment places (leisure parks, kids yard, circus, kids cultural centers, book stores)

- Product assortment: 5 Paddle Pop, 2 Cornetto, 1 Taro and 2 Wall’s cup

- Product display: Paddle Pop is in center position, within the reach

of kids

- Cabinet display: cabinet in center position/ main entrance/ front position Attach price tag, product map, new product poster

- POSM: Paddle Pop standee/

poster/ promotional ice cream, signboard, flyer, umbrella Teenager (13

– 22 years

old) & Young

- Canteen in high school/

colleges/ universities and nearby shops (within the

- Product assortment: 2 Paddle Pop, 3 Cornetto, 1 Taro, 2 Topten, 1 cup, 1 classic

60%

30%

10%

Cabinet ratio per regions

HCMC South East Provinces Mekong Delta

consumers

(15 – 25

years old)

radius of 100 meters)

- Convenient stores, mini marts

- Shopping malls, sport centers, theater, cinema, park

signboard, flyer, umbrella

- Other display: Wall’s table & chair in food corner area (See Appendix 5 & 6)

3.4 Packaging:

Packaging of Wall’s Ice Cream is very diversified with Stick, Cup, Cone and also Tub Towards pack size, there are not much differences between Wall’s and Kinh Do products Besides single pack, in Modern Trade, both brands also offer bundle packs for wholsaler

or end users with big consumption

In terms of pack design, in order to high light the premiumness more and also, to strengthen the branding, Wall’s is non-stop innovating to create the differentation in all segments with Kinh Do products For example, in the past, consumers are usually confused of Cornetto and Celano due to the weak branding of Cornetto Hence, to improve this point, Wall’s relaunch Cornetto in 2011 with rennovated pack design:

3.4 Price:

With direct competitors:

The price ladder below shows that most of Wall’s products are defined the more premium proposition than its main competitors from Kinh Do Corporation in all segments premium, main stream and low tier Specifically, besides Top Ten/ Wall’s Cup with 25% higher price than Yeah/ Merino’s Cup, the price gap between Wall’s and Kido in the same range

is usually 9-10% However, in premium and low tier segments, Wall’s also offer products that are very price competitive to ensure the fair share with Kinh Do

Source: Internal Data