Marketing and communication plan for G7 2 in 1 instant coffee

dfdfdf TRNG I HOC M TP. HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL ECONOMICS & MANAGEMENT TA THI NINH THU - BIEN THI HANG NGA MARKETING & COMMUNICATION PLAN For G7 2 in1 Instant Coffee MASTER PROJECT MASTER IN MARKETING & ADVERTISING Ho Chi Minh City (2013) 2 dfdfdf TRNG I HOC M TP. HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL ECONOMICS & MANAGEMENT TA THI NINH THU - BIEN THI HANG NGA MARKETING & COMMUNICATION PLAN For G7 2 in1 Instant Coffee MASTER PROJECT MASTER IN MARKETING & ADVERTISING Tutor’s name: SERGE BYWALSKI Ho Chi Minh City (2013) 3 DISCLAIMER Final thesis on “Marketing & Communication Plan for G7 2in1 Instant coffee” is our research & insight with reference from the sources that was indicated in this thesis. In present this thesis in partial fulfillment of the requirement for an Master of Marketing and Advertising at the Solvay Business School Economics and Management, we agree that this material shall make it freely available for reference and study. It is understood that copying or publication of this thesis for financial gain shall not be allowed. 4 ACKNOWLEDGMENT This final thesis was completed with the guidance of Mr. Serge Bywalski, thank you very much for your time and enthusiasm to give us comment and direction. Take this opportunity, we would like to send our special thanks to family, our friends for support and dedicated to help we complete this project. The result and the feasibility of this project in reality are motivating us for knowledge that we gain during the course. 5 TABLE OF CONTENT Executive summary 1. Environment & Business context 1.1. Environment 1.1.1. Vietnam’s Gross Domestic Product (GDP) 1.1.2. Economic outlook 1.1.3. Regulatory 1.1.4. Political 1.2. Business context 2. Market Assessment 2.1. Our competitors 2.2. Market overview for instant coffee 2in1 3. Product overview 3.1. About product 3.2. Sales revenue 3.3. Market share 4. Marketing Activities since G7 2in1 (4) was launch in 2008 5. SWOT Analysis of G7 2in1 6. Strategy plan for G7 2in1 to 2015 6 EXECUTIVE SUMMARY This project was written after review and analyze the instant coffee market was carried out in Ho Chi Minh City, Viet Nam by the end of February 2013. The overall objective of this project was to evaluate the market potential and to determine success factors to re launch our product, a G7 2in1 instant coffee. In doing this we would like to achieve the following sub-objectives: To determine why G7 2in1 is not successful when first launch in 2008, to determine the success factor of the biggest competitors of Nescafe Cafeviet 2in1 and to recommend the strategy in marketing and communication plan to positioning G7 2in1 instant coffee in Vietnam market. With the growth of 12,7% in consumption of instant coffee to 2015, there is a potential market as consumers who tend to find the convenient things. There are currently 2 big brands for instant coffee in the market that include Nescafe (Nestlé); G7 (Trung Nguyên) which have 2in1 sub brand (coffee and sugar only) Nielsen Vietnam release the research in 2011 that G7 instant coffee place the 1 st ranking of Vietnam market with 38% market share, second is Vinacafe with 31% and third is Nescafe 27% and other research of Kantar World panel on consumer buying behavior showed that G7 is the most like and buy brand. Average 10 people drink instant coffee using G7. However under G7 brand there are G7 3ín and G7 2ín in which The G7 2in1 is nearly don’t have strong awareness of consumer, because the lack of investment in to the marketing activities, the taste of the product is not match with consumer and face with a very strong competitors is Nescafe with sub brand is Nescafe CafeViet. In exploring the weakness point of the product, we have given some recommendations to GROW MARKET SHARE & MARKET SIZE BY INVESTMENT INTO SALES, MARKETING AND PR ACTIVITIES. PRIORITIZE PROMOTION ACTIVITIES TO CREATE CONSUMER NEED. 1. Review by categorize and solidify and professional sales system with coverage from city to urban area 2. Focus to build G7 2in1 with consistent message, firstly, it’s the real and strong coffee and then it’s your right style 3. Prioritize to research and develop the new taste of G7 2in1 with “great taste and differentiated” 7 4. Explore current need and define the important period of day when consumer need coffee to develop new need for each segment and each market 5. Focus on the strong point of product is “the real coffee of Vietnam” to arouse the Vietnamese spirit. Vietnamese people using Vietnamese Product 8 1. Environment & Business Context 1.1. Environment 1.1.1. Vietnam’s Gross Domestic Product (GDP (2) ) Table 1.1: Annual growth rate of Vietnam’s GDP - Source: Nhan Dan Online 1.1.2. Economic Outlook The Asian Development Bank (ADB (3) ) has revised down the Vietnamese growth forecast for 2012 from 5.7% to 5.1% amid gloomy global economic outlook and domestic vulnerabilities. The country’s economic output is predicted to quicken to 5.7% in 2013 but still lower than the ADB’s earlier forecast of 6.2% growth in April the lender reported. The inflation rate is projected to be 7% by the end of 2012 and then accelerate to 9.4% by the end of 2013, due to higher global food prices and growing domestic demand. Official data released by the statistics office show that the Vietnamese economy grew 5.4% in the third quarter, higher than the 4.0% and 4.7% expansion in the first and second quarters. 1.1.3. Regulatory Vietnam National Assembly review and approved Food Safety Law of: 55/2010/QH12 on 17/06/2010 and effective on 01/7/2011 that required all Ordinance on Food Hygiene and Safety No. 12/2003/PL-UBTVQH11 July 26, 2003 will expire after the Law on Food Safety in effect. 9 1.1.4. Political The Eleventh Congress of the Communist Party of Vietnam in January 2011 called for a more comprehensive approach to the country's renovation, decided to promote greater citizens' participation and unity within Vietnam, and to engage proactively in international integration. The Congress re-affirmed Vietnam's approach to state-led development, but also revised key policy documents to place greater emphasis on market processes and non-state ownership of economic assets. 1.2. BUSINESS CONTEXT The Vietnam coffee market includes 2 segments: instant coffee and ground coffee. From 2007-2010, total coffee consumption increased with a CAGR (1) of 8.9%. Instant coffee sales volume - CAGR 2007-2010: 26.2% Instant coffee has become highly popular in Vietnam as it offers a high level of convenience and acceptable taste. Table 1.2: Production and consumption of instant coffee in Vietnam from 2007 – 2010 Source- GSO – Unit: tonnes Ground coffee sales volume - CAGR (1) 2007 – 2010: -1.1% 18,739 28,141 31,400 44,660 16,330 23,549 30,627 32,825 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2007 2008 2009 2010 Production volume Consumption volume Production vs consumption volume of instant coffee in Vietnam 10 The market for branded ground coffee witnessed small decline in the last three years, mainly due to increasing competition from cheap unbranded products. Table 1.3: Forecast consumption volume of ground coffee in Vietnam 2010-2015 Source: GSO – Unit: tones Coffee consumption volume is projected to grow at a CAGR (1) of 8.4% for the next 5 years. In which, instant coffee is expected to grow faster than ground coffee to meet the fast-moving needs of modern lifestyles. In 2015, the proportion of instant coffee is forecasted at 58.8% of total coffee consumption Instant coffee market - CAGR (1) 2010-2015: 12.7% The instant coffee will lead growth over next 5 years due to rising demand for convenience. In addition, the taste of products in this segment now closely ambles that of ground coffee. 35,353 44,252 39,214 33,360 36,267 29,361 38,486 35,065 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2007 2008 2009 2010 Production volume Consumption volume Production vs consumption volume of ground coffee in Vietnam [...]... total instant coffee of Trung Nguyen - In 20 11 : 1, 08% of total instant coffee of Trung Nguyen Year 20 10 Chart 3 .2: Sales contribution of F7 in 20 10 and 20 11 Year 20 11 18 18 00 16 90 16 00 14 00 13 00 12 0 0 10 00 800 600 400 in billion Vietnam Dong 20 0 12 3 1 12 25 18 0 G7 2in1 Nescafe CafeViet 20 10 Khác 20 11 Chart 3 .1: Sales revenue of G2 2in1 instant coffee and Nescafe Cafeviet 2in1 3.3 Market share of 2in1 instant. .. vs G7 Box Box (VND) gr 2in1 G7 2in1 Instant coffee Black coffee 15 sachets with sugar x 16 g 24 0g 45,700 19 0 10 0% Nescafe Café Viet Black coffee 15 sachets with sugar x 16 g 24 0g 47,000 19 6 10 3% Iced coffee 12 sticks x 300g milk 25 g 50,000 16 7 88% Table 3 .2: Product price and packaging of G7 2in1 and Nescafe Caféviet 2in1 3 .2 Sales revenue Sales contribution of G7 2in1 in 20 10 & 20 11 : - In 20 10 : 1, 4%... instant coffee G7 2in1 Nescafe Café Viet 2in1 Others 1% 8% 91% Chart 3 .1: Market share of 2in1 instant coffee in 20 11 19 4 Marketing Activities of G7 2in1 when first launch in 20 08 till now vs Nescafe Café Viet 2in1 Marketing Activities ATL G7 2in1 BILL BOARD Nescafe Café Viet 2in1 In 20 09 From 20 09 to 20 12 Message: Message: 1 Key message: Strong Coffee for Bold Men Strong is not enough, it’s 3D breaking.. .11 Consumption volume of instant coffee in Vietnam 70,000 59,677 60,000 53 ,28 3 47,363 50,000 42, 10 0 37 ,25 7 40,000 32, 825 30,000 20 ,000 10 ,000 20 10 20 11 20 12 2 013 20 14 Consumption Table 1. 4: Forecast consumption volume of instant coffee in Vietnam 20 10 -20 15 Source: GSO, HSC estimates – Unit: tonnes 20 15 12 2 MARKET ASSESMENT Product portfolio of G7 instant coffee G7 is the master Brand of Trung... Tuoi 500ml 2 Legendee Growth Low Dogs 1 Consider to kill or push 10 SKUs of ground bean coffee 2 Consider to kill or push Divest 10 SKUs of instant coffee 1 G7 2in1 instant coffee 2 G7 Cappuccino instant coffee 3 Passiona – Coffee for ladies Cash Cows 1 G7 3in1 instant coffee 2 Trung Nguyen ground bean coffee Market share in v e st High Picture 2. 2: BCG Matrix of G7 2in1 instant coffee 2. 1 Our competitors... small at only 1 -2% No Company Brand Category 1 Vinacafé Biên Hòa Vinacafé Black coffee, white coffee (3 in 1) and ginseng coffee (4 in 1) 2 Nestlé Café Vi t Black coffee (2 in 1) Nescafé White coffee (3 in 1) Black coffee (2 in 1) , 3 Trung Nguyen G7 white coffee (3 in 1) and Cappuccino Passiona Coffee for ladies 4 Food Empire Singapore MacCoffee White coffee (3 in 1) 5 Green Highland International... second 15 is G7 with 26 % (1 ,29 6 billion dong) and third is Vinacafe with 25 % (1 ,20 0 billion dong) There is a closed gap of G7 – Trung Nguyen and Vinacafe Market share G7 Nescafe Vinacafe 25 % 26 % 49% Chart 2. 1: Market share of Instant coffee in the market 3 Product overview 3 .1 About G7 2in1 vs Nescafe Café Viet 2in1 vs Picture 3 .1: Product packaging of Instant coffee of Nescafe café 16 Criteria G7 2in1 ... Nguyen Coffee With sub-brand is G7, G7 Passiona, G7 ice back coffee Under G7 there are G7 3in1 (Coffee, milk, sugar) and G7 2in1 (coffee, sugar) Picture 2. 1: Product portfolio of G7 2in1 In analyzing the product category in both market size and growth, G7 2in1 instant coffee at the Stars cycle that we decide to Prioritize to rebuild this product 13 High Question Marks Stars Prioritize Kill 1 RTD Ca... (Bil vnd) ATL 13 ,10 0 Production + on air on VTV/HTV/VL On newspaper which got the target audience 1. 1 TVC 1 .2 Printad 1. 3 Digital 10 ,000 1, 500 Rich banner, banner… 300 1. 4 PR 300 Change billboard of G7 3in1 into G7 2in1 1. 5 Outdoor billboard 2 1, 000 BTL Dry sampling 2. 1 retailers 3,930 for 13 0,000 2. 2 Wet sampling Office building, wet market 500 60,000 1, 000 Promotion gift at MT Free 01 glass when customer... Understanding about coffee High understanding about coffee Legendee Trung Nguyen ground bean coffee Tran Quang Son Tung Ground bean coffee VIA Ca phe Tuoi G7 2in1 Nescafe Café Viet without brand name G7 3in1 Vina cafe Low understanding about coffee Nescafe 3in1 Low convenience High convenience In this above chart, segmentation of 2in1 instant coffee are belong to high convenience & high understanting . Chart 3 .1: Market share of 2in1 instant coffee in 20 11 18 13 00 1 12 25 16 90 12 3 0 20 0 400 600 800 10 00 12 0 0 14 00 16 00 18 00 G7 2in1 Nescafe CafeViet Khác 20 10 20 11 1% 91% 8% G7 2in1 Nescafe. contribution of G7 2in1 in 20 10 & 20 11 : - In 20 10 : 1, 4% of total instant coffee of Trung Nguyen - In 20 11 : 1, 08% of total instant coffee of Trung Nguyen Year 20 10 Year 20 11 . 70,000 20 10 20 11 20 12 2 013 20 14 20 15 Consumption Consumption volume of instant coffee in Vietnam 12 2. MARKET ASSESMENT Product portfolio of G7 instant coffee G7 is the master Brand