Launching a new sport drink product

MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM LE THANH HANG LAUNCHING A NEW SPORT DRINK PRODUCT FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Counsellor: DR. TRAN XUAN KIEM Ho Chi Minh City (2007) ACKNOWLEDGEMENT First of all, I would like to express my heart-felt thanks to HoChiMinh Open University and Solvey Business School to organize this great MBMM course. And it’s my honor to be a member of the first course in Vietnam. This project is completely difficult to me because it’s a quite new idea and different from my knowledge and experience. Finally, I have finished it thanks to the following talented people who spent their valuable time to help me complete this project. • Doctorate Tran Xuan Kiem, a great counsellor that I’ve met before. My project is fully made regarding to his wide knowledge and experience. This respectable professor spent a lot of time with my project and gave me really useful advices to finish it effectively. • I am truly indebted to Mr. Ngo Minh Viet, my mentor, for his valuable advices and support in improving the project quality. • Ms. Bui Thi My Chau, a talented designer, who helps to bring my idea into real layout. • Ms. Bui Phan Bao Tran and Mr. Serge Bywalski, program coordinators, who gave me and my classmates many useful information and documents to write the project in the right way. • My colleges for their sharing and understanding due to my hard time to finish this project. • My company, NUTIFOOD, for their promising of bringing my project in reality if it is valuable project. • My family, for their deep understanding, patience and moral support during my studying time. CONTENTS INTRODUCTION CHAPTER 1. SCOPE OF PROJECT 1 2. LIMITATION 8 3. METHOD OF RESEARCH 8 a. Observation 8 b. In-Depth Interview 9 CHAPTER 1: THE DEMAND OF SPORT DRINK 1.1 WHY DO WE HAVE THE DEMAND OF SPORT DINK? 11 1.2 WHAT IS A SPORT DRINK? 12 1.3 THE MAIN BENEFITS OF SPORT DRINK 13 1.4 WHY SPORT DRINKS BUT NOT OTHER DRINKS? 14 1.4.1 Water 14 1.4.2 Sport drinks 14 1.4.3 Energy drinks 15 1.4.4 Juice 15 1.4.5 Carbonated Soft Drinks 15 CHAPTER 2: BEVERAGE MARKET ANALYSIS 2.1 OVERVIEW BEVERAGE MARKET SHARE 16 2.2 PRODUCT FLAVOR OVERVIEW 17 2.3 PRICE OVERVIEW 18 2.4 DISTRIBUTION OVERVIEW 19 2.5 MARKETING ACTIVITIES OVERVIEW 20 CHAPTER 3: LAUNCHING ACTIVITIES FOR NEW PRODUCT 3.1 SPORT DRINK CATEGORY SWOT ANALYSIS 22 3.1.1 Strengths 22 3.1.2 Weaknesses 22 3.1.3 Opportunities 22 3.1.4 Threats 22 3.2 COMPETITION REVIEW 22 SWOT analysis of Active brand of TanHiepPhat brewery 22 3.2.1 Strengths 22 3.2.2 Weaknesses 23 3.2.3 Opportunities 23 3.2.4 Threats 23 3.3 NEW PRODUCT CONCEPT 23 3.3.1 Product concept 23 3.3.2 Technology scanning 24 3.3.3 Business scanning 24 3.3.4 Economic scanning 24 3.4 BRAND STRATEGY 24 3.4.1 Product and Packaging strategy 24 3.4.2 Pricing strategy 25 3.4.3 Place strategy 25 3.4.4 Promotion strategy 25 3.5 BRAND POSITIONING 25 3.5.1 Competitive environment 25 3.5.2 Target customers 26 3.5.3 Customer insight 26 3.5.4 Product benefits 26 3.5.5 Values and personality 26 3.5.6 Reasons to believe 26 3.5.7 Discriminator 27 3.5.8 Essence 27 3.5.9 Positioning map 27 CHAPTER 4: LAUNCHING ACTIVITIES FOR NEW PRODUCT 4.1 PRE-LAUNCHING CAMPAIGN 28 4.1.1 PR campaign 28 4.1.2 On-street teaser 28 4.2 LAUNCHINGCAMPAIGN 29 4.2.1 Above the line activities 29 4.2.2 Below the line activities 29 CONCLUSION CHAPTER 30 APPENDIX 1 APPENDIX 2 APPENDIX 3 REFERENCE BOOKS AND DOCUMENTS Vietnamese: 1. Trang web Bộ Ngoại Giao Việt Nam, 11/04/2007, “Những thông tin chung về kinh tế Việt Nam”. 2. Trang web Cục thống kê TP. HCM, “Bảng tổng mức bán lẻ hàng hóa và doanh thu dòch vụ từ 1990– 2005”. 3. PGS-TS. Dương Nghiệp Chí, TS. Nguyễn Ngọc Cừ (2000), “Mệt mỏi, hồi phục và dinh dưỡng của vận động viên. Thiếu máu do mệt mỏi trong luyện tập, huấn luyện quá sức và biện pháp hồi phục”, Hà Nội, Viện Khoa Học Thể Dục Thể Thao, trang 20 – 26. 4. BS. Nguyễn Lân Đính (2002), “n và uống như thế nào khi tập thể thao?”, tạp chí Sức Khỏe & Đời sống. 5. BS. Nguyễn Thò Kim Hưng – BS. Bùi Thò Hoàng Mai (2002), “Dinh Dưỡng để thành công trong thể thao”, NXB Phụ Nữ, TP. HCM, trang 11- 23, trang 109-110. 6. Sở Thể Dục Thể Thao TP.HCM (2004), “Bảng tổng hợp số liệu khảo sát thế mạnh của các quận- huyện”. 7. Quyết đònh của Thủ tướng chính phủ, 10/05/2005 “Phê duyệt Chương trình phát triển thể dục thể thao ở xã, phường, thò trấn đến năm 2010”. 8. Trang web VietNamNet, 13/06/2006, “10 xu hướng tiêu dùng mới tại Việt Nam”. English 9. About: Chemistry website, 2007, “Effectiveness of Sport drinks” 10. Prof. Baeyens Jean-Pierre (2005), “Lecture in Vietnam: Strategic and Operational Marketing” 11. Clark’s Nancy “Sports Nutrition Guidebook, Supplemental Strategies”, USA, Human Kinetics, page 213 – 215. 12. PhD. Cohen. W. A. (2001), “The Marketing Plan – Third edition”, published by John Wiley & Son, Inc., page 41 – 61, page 96 – 115. 13. Prof. Decroix Eric (2006), “Lecture in Vietnam: Marketing and Business Communication” 14. Food and Beverage Reports.com, 2007/02, “Market research reports: Functional food & drink Consumption Trends”. 15. Food for sports performance, Iron, page 52-53. 16. Gatorade – Wekipedia, the free encyclopedia. 17. Ries Al and Ries Laura (2002), “The Fall of Advertising and the rise of PR”, Harper Collins Publishers Inc., page 49 – 59, page 97 – 105. 18. Sport drinks website. 19. Trout Jack with Rivkin Steve (2000), published by John Wiley & Sons Inc., “Differentiate or Die”, page 73–81. 20. VietNamNet, 17 th March 2007, “Consumption demands and habits in 2006 – 2010”. STUDENT DECLARATION I certify that the attached project is my own work. The information and material contained from other sources had been acknowledged according to unit-specific requirements for referencing. LIST OF TABLES AND PICTURES Pictures and tables Content Picture 1 Vietnamese FDI Picture 2 Vietnamese GDP Picture 3 Vietnamese income group Picture 4 Vietnamese household income Picture 5 National fmcg retail market structure Picture 6 Vietnamese population Picture 7 Total 6 cities metro volume share Picture 8 Value share of beverage market Picture 9 Energy drink volume % share by flavors Pitcture 10 Fruit juice volume % share by flavors Picture 11 Bevarage category sales volume by channel Picture 12 Positioning map Table 1 Body fluid effects Table 2 Type of sport drinks Table 3 Body situations and substances Table 4 Price analysis 1 SPORT DRINK PRODUCT INTRODUCTION CHAPTER 1. SCOPE OF PROJECT: a. Vietnam economy overview: - Vietnam is a young developing country. Economic growth speed is actually boomed in the last 10 years. There are huge of evaluations and considers from many economic specialists and journals regarding to this issue such as “Vietnam is a young Tiger” – Mr. Bush, the US President, Nov 06; “Forget China: Businesses flock to Vietnam”, The New York Times, Oct 06; “Vietnam is set for rapid urbanization and prosperity in the next few years” – Vietnam News quoting AC Nielsen survey, Nov 06; “The new tiger is roaming” – Vietnam investment review, Oct 06; “Asia’s second fastest – growing economy takes the global stage” - Fortune, Nov 06; “An economic boom is accompanied by remarkable success in getting rid off poverty and raising life expectancy” – The Economist, Aug 06, etc,… - By Ministry of Foreign Affair updating, tremendous economic reforms taking place over nearly two decades of Doi Moi have yielded encouraging results. Vietnam has created an ever more competitive and dynamic economic environment. The private-sector economy has been encouraged to develop, thus mobilizing effectively all social resources for economic growth. External economic relations have been expanded and the flow of foreign direct investment increased. Export of goods and labor, tourism industry and remittances from overseas Vietnamese have been strongly promoted to generate increasing foreign earnings for Vietnam. [...]... it’s also used as a springboard on others categories 3.4 BRAND STRATEGY: 3.4.1 Product and packaging strategy - Product name: Sport Power - Net weight: PET bottle 500ml - Packed in cartons of 24, wrapped 6 - Launching new Sport Power with Orange flavor as base flavor After that introduce Strawberry and Lemon flavors 25 - Formula: use natural sugar and fructose, added with Sodium, Potassium and Vitamin... Sport drinks: 15 - Sports drinks don't hydrate better than water, but people are more likely to drink larger volumes, which leads to better hydration The typical sweettart taste combination doesn't quench thirst, so you will keep drinking a sports drink long after water has lost its appeal An attractive array of colors and flavors are available Carbohydrate boost should get from sports drinks, in addition... However, Sport Drink still from a low base (0.6% of total Carbonate Soft Drinks) in the market - Sport drink is quite a small market this time but it is a promising growth segment in the near future by economic booming and changing healthcare 17 habits According to ABC news, the Americans spent over $5.4 billion on sport drink product last year Picture 8: VALUE SHARE OF BAVARAGE MARKET 2,400,000 TOTAL BEV... Physiological Effect Impaired performance Capacity for muscular work declines Heat exhaustion Hallucinations Circulatory collapse and heat stroke Besides, it may loss much water and essential minerals such as Sodium, Potassium, Calcium, Magnesium, Chloride, Bicarbonate, Phosphate, and Sulphate Sodium, Potassium and Chloride are the best important minerals to help body balanced of water 12 - Generally 1... delicious food and good cloth Consumption and buying behavior are changing day-to-day, particularly in young people Attending to themselves and family health is became essential demands How to maintain a good habitués and good strength for working, studying or relaxing are the first concerned issue That’s mean retail market in general or specialty products for a good health in particularly have a plentiful... line activities on 2006 (Source: TKL – media agency 2007) There are lots of local and foreign companies enter this market Two of the biggest players are Pepsi Co and Coca Cola The local company TanHiepPhat brewery is extremely potential player They’re not only the market leaders but also create the new trend of consumption Their marketing activities are always heavy and attractive enough to have the large... 0 AS ON DJ FM AM JJ AS ON DJ FM AM JJ AS 04 04 05 05 05 05 05 05 06 06 06 06 06 0 MAT LY MAT TY - Source: AC Neilsen Retail audit, AS 2006 There is lack of brands which joined into sport drink segment There are nearly new launch brand Active of TanHiepPhat and Gatorade of Pepsi Co in this segment 2.2 PRODUCT FLAVOR OVERVIEW: - The sport drink is still a small market Lemon flavor is the most popular... categories such as packaged water, Carbonate soft drink, ready to drink milk, fruit juice, and ready to drink tea, energy drink and even beer The most common drink brands are Coca Cola, Pepsi Cola, Twister, Lavie, Aquafina, Red Bull, Number 1, Sting, Samurai, Oo, Lipton Ice tea, Heineken beer Furthermore “Vietnamese ice tea” which served at exercising places is the most challenging competitor - The table 4... that point of view, product is appropriate to launch 3.3.4 Business scanning: - This product concept is feasible on reality because the market is growth 25% every year Market size is approximately 10.9 ml USD - The living standard of people is also increasing so that they need to have more healthy foods and drinks To launch a sport drink product would help company to expand the product portfolio and... osmolarity of a fluid among the inside parts of the body and metabolism process o Helping to keep the balance of acid base for cell operation o Increasing body water absorption 1.4 WHY SPORT DRINKS BUT NOT OTHER DRINKS? - What drink is best for getting and staying hydrated during exercise? Should water or sports drinks are best? What about juice or carbonated soft drinks? Coffee or tea? Beer? 1.4.1 Water: . and buying behavior are changing day-to-day, particularly in young people. Attending to themselves and family health is became essential demands. How to maintain a good habitués and good strength. great landmark for Vietnam to join in 3 the world economic integrating and open a way for Vietnam to be on equal terms with globalization regulations. - Over the past years, Vietnam attracted. comes along with technology transfer and advanced managerial skills. FDI helps better tap national potential, creates tens of thousands of jobs and raises professional skills for Vietnamese