Marketing and communication plan for G7 2 in 1 instant coffee

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

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)

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)

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

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

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

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 1st 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

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”

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

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

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

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%

Production volume Consumption volume

Production vs consumption volume of instant coffee in Vietnam

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

Production volume Consumption volume

Production vs consumption volume of ground coffee in

Vietnam

Table 1.4: Forecast consumption volume of instant coffee in Vietnam 2010-2015

Source: GSO, HSC estimates – Unit: tonnes

2 MARKET ASSESMENT

Product portfolio of G7 instant coffee

G7 is the master Brand of Trung 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

Picture 2.2: BCG Matrix of G7 2in1 instant coffee

1 Consider to kill or push

10 SKUs of ground bean coffee

2 Consider to kill or push

10 SKUs of instant coffee

Cash Cows

1 G7 3in1 instant coffee

2 Trung Nguyen ground bean coffee

Strong coffee for bold

men

2 SKUs: 2in1 and 3in1

- Black iced instant coffee with sugar

- Iced milk coffee

More delicious, stronger

coffee taste

3 flavors:

- Strong flavor: balance

between coffee &

milk

- Stronger flavor : more

coffee, less milk, for

those who love real

coffee

- Bold flavor: real

Black instant coffee

(no sugar, no milk) from 100% roasted coffee in Vietnam, for people who want to enjoy coffee in their own taste: black or milk coffee

Nescafe Cafeviet 2in1 is the biggest competitor of G7 2in1 for the time being Main target customers are young people Nationwide distribution network Global marketing strategy

The market is fairly concentrated as the 3 largest producers (now hold 93% of market share

Both Nestcafe Café Viet 2 in 1 and G7 2in1 all focus on the same market segment The difference between their product price is quite small at only 1-2%

Black coffee, white coffee (3 in 1) and

ginseng coffee (4 in 1)

G7

Black coffee (2 in 1), white coffee (3 in 1) and Cappuccino

Table 2.1: top 5 competitors in the market

2.2 Market overview of instant coffee 2in1

Nescafe – Café Viet is place the biggest market size of café 2 in 1 with the revenue in 2011 is 1,300 billion Vietnam Dong while G7 2 in 1 – Trung Nguyen Coffee is only 18 billion Vietnam Dong Currently, Nescafe is the leader of the market with 49% market share (with sales revenue of 2,404 billion dong), second

is G7 with 26% (1,296 billion dong) and third is Vinacafe with 25% (1,200 billion dong) There is a closed gap of G7 – Trung Nguyen and Vinacafe

Chart 2.1: Market share of Instant coffee in the market

Criteria G7 2in1 Nescafe Café Viet

Key message Not only strong but also style

(M nh ch a đ , ph i đúng gu)

Strong coffee for strong men

(Cà phê m nh cho phái m nh)

Product

features

Should be improved about coffee taste

Strong coffee taste that won’t expect

in an instant coffee  Quite delicious

- Black coffee with sugar 2in1

- Milk coffee with ice 3in1

Distribution

channels

many brand name, thus Nestle had high coverage, flexible policy

Brand

advantage

Media Still not focus on mass media,

follow to mother brand: Trung Nguyen

Mass media, high frequency, young images

 Marketing campaign: Lowe agency

 Pakaging design: Cowan

Table 3.2: Product price and packaging of G7 2in1 and Nescafe Caféviet 2in1

3.2 Sales revenue

Sales contribution of G7 2in1 in 2010 & 2011:

- In 2010: 1,4% of total instant coffee of Trung Nguyen

- In 2011: 1,08% of total instant coffee of Trung Nguyen

Chart 3.2: Sales contribution of F7 in 2010 and 2011

name

Quantity

Net weight / Box

Consumer price / Box (VND)

Consumer price per

gr

Index

vs G7 2in1

15 sachets

x 16g

Iced coffee milk

12 sticks x 25g

Chart 3.1: Sales revenue of G2 2in1 instant coffee and Nescafe Cafeviet 2in1

3.3 Market share of 2in1 instant coffee

G7 2in1 Nescafe Café Viet 2in1 Others

in billion Vietnam Dong

4 Marketing Activities of G7 2in1 when first launch in 2008 till now vs Nescafe Café Viet 2in1

Café Viet 2in1

ATL BILL BOARD

2.Sub message:

No one understand Vietnamese as Vietnamese people

Vi t )

From 2009 to 2012 Message:

Strong Coffee for Bold Men

3D breaking surface by Café Viet coffee glass on the most heavy traffic street in HCMC

1st TVC which mentioned a break through taste you won’t expect in an instant coffee, its taste will make you surprise strong! Key message:

“Strong coffee for bold men” –

“Are you bold enough for it?”

After launching 2 years, the 2nd TVC on air about the convenience feature of instant coffee & key

message “Strong coffee for bold

men” -

“Coffee so strong it will blow you away”

PR

Short news + photo of new

product with key message:

"NOT ONLY STRONG BUT STYLE"

- Angles: PR articles focus

on the advantages of G7

2in1 vs Nescafe Viet

BTL

POSM for retailers Training materials T-shirt G7 2in1 Gift pack of G7 2in1 in Tet

2009

 Visibility drive: on MT channels, Nescafe Café Viet used

to many POSM in order to make their product outstanding on shelves On GT channels, there were many display campaign

very big sales conference for sales team

 Sampling + Activation: Nescafe Café Viet conducted many wet samling to introduce the new taste of a kind of instant coffee

Tray & Bus sampling:

They created a world of the brand experience in which men have to complete ‘bold tasks’ to earn Café Viet Café Viet bus stopped at key cities (HCM, Hanoi, Da Nang) Men were invited to prove their strength and earn a cup of coffee

Activation booth at Malls:

The booth had games of strength which men needed to win in and earn samples for their In 2008, in order to localized with Vietnamese tastes & compete with R&G coffee, Nescafe has been launched new brand name – Nescafe Café Viet with new flavor: Black coffee with sugar

Nescafe Café Viet is the only local brand of Nestle group which is localized specific for Vietnam market

- Positioning: “Cà phê m nh cho phái m nh” (Strong coffee for strong men)

đ th ?” (Are you bold enough for

this?)

- Target consumer: Male, 18-30 years old, urban, ABC class, dynamic, modern

- Marketing activities: spend a lots of money on TV channels, activation activities in the supermarket, office building, crowded area…group

5 SWOT Analysis of G7 2in1

 Low Product awareness of G7 2in1 is the “close point” of consumer development, G7 2in1 need to increase the product awareness by prioritizes to push up product consumption

Strengths

- Ready for challenge with any brand in the

pro-active position

- Vietnamese brand, thus understand

Vietnamese consumer deeply with our own

culture

- Good quality

- Strong distribution channel of Trung

Nguyen coffee ‘s image as pride of

Vietnamese to build up sub brand G7

Weaknesses

- Product positioning is not strong enough that cannot make the differentiated

- Taste does not touch the consumer

- Lack investment for marketing activities

Opportunities

- Big population in Vietnam, coffee

consumption can be consumed up to

90,000 ton/year that can help G7 to

increase numeric distribution

- Vietnamese product is supported by

- Consumer habit: 68% of drink people

choose is coffee/ week

- 2in1 Category don’t have a lot of

competitors beside Nestcafe CafeViet 2in1

Threats

- Product awareness is very low

- Growing competitive pressure in Vietnam coffee market, especially in instant coffee category

Chart Source: Household Purchase Panel for In-home regular consumption

1 Review by categorize and solidify and professional sales system with coverage from city to urban area

- Increase the coverage and product availability in whole system

- Display following standard, premium care service

2 Focus to build G7 2in1 with consistant message, firstly, it’s the real and strong coffee and then it’s your right style

- PR the consistent message and print ad

- Maximizing the activities, festival occasion to promote the value of Brand

- Exploring image, story of influence people “Real man & style”

3 Prioritize to research and develop the new taste of G7 2in1 with “great taste and differentiated”

- Research the current trend and future trend of consumer in drinking instant black coffee

- Attractive packaging

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

- Access to young generation: Students… to build the loyalty customer for the future

- PR campaign to educate consumer with new style of drinking coffee

- PR the benefit and advance (health ….) when using product as compare to other product

N=245

Total Awareness: 17%

Consideration: 9%

Unwareness: 83%