Marketing Principles Assignment 1: A REPORT ON MARKETING STRATEGIES OF GATORADE IN VIETNAM

The report aims to find the business environment of Vietnam that affects the development of Gatorade so that Gatorade can prepare and bring the efficient strategies and plans to introduce and sell the products of Gatorade such as G2, G Powder, 01 Prime… in order to satisfy Vietnam customers. Bài assginment 1 môn Nguyên lý Marketing (Marketing principles) BTEC

BANKING ACADEMY, HANOI

BTEC HND IN BUSINESS (FINANCE)

ASSIGNMENT COVER SHEET

NAME OF STUDENT Trần Quyết Thắng - Joe

REGISTRATION NO ITP-F05 - 194

UNIT TITLE Marketing Principles

ASSIGNMENT TITLE Assignment 1

ASSIGNMENT NO 1 of 2

NAME OF ASSESSOR Doti Chee

SUBMISSION DEADLINE 19th November 2012

I, hereby confirm that this assignment is my own work and notcopied or plagiarized from any source I have referenced the sources from which information isobtained by me for this assignment.

_ Signature Date

FOR OFFICIAL USE (Course Administrator)

Unit Outcomes

OutcomeEvidence for the

Re-Understandthe concept

andprocess of

Explain thevarious elements

of the marketingprocess

Evaluate thebenefits andcosts of amarketingorientation for a

Be able to usethe concepts

Show macro andmicroenvironmental

factors whichinfluencemarketingdecisions

criteria to beused for products

in differentmarkets

Choose atargeting strategy

for a selectedproduct / service

Demonstratehow buyerbehaviour affects

marketingactivities indifferent buying

Propose newpositioning for aselected product/

2.5

OutcomeEvidence for the

( ) Well-structured; Reference is done properly / is not done properly /should be done (if any)Overall, you’ve passed / referral………outcomes

Areas for improvement:

 To achieve a pass, you must meet all the requirements defined in the assessment criteria.

 To achieve a merit, you must identify and apply strategies to find appropriate solutions and appropriate methods/techniques as well as to present and communicate appropriate findings. To achieve a distinction, you must use critical reflection to evaluate own work and justify

valid conclusions as well as to take responsibility for managing and organizing activities

ASSESSOR SIGNATURE DATE / 11 / 2012 NAME:

(Oral feedback was also provided)

STUDENT SIGNATURE DATE / /

NAME : FOR INTERNAL USE ONLY

VERIFIED YES NO

DATE : VERIFIED BY : NAME :

A REPORT ON MARKETING STRATEGIES OF GATORADE IN VIETNAM

Title Page

Prepared for: Professor Doti CheeMarketing PrinciplesBTEC HND in Business (Finance)

Banking Academy, Hanoi

A REPORT ON MARKETING STRATEGIES OF GATORADE IN VIETNAM

Executive summary

The report aims to find the business environment of Vietnam that affects the development ofGatorade so that Gatorade can prepare and bring the efficient strategies and plans to introduceand sell the products of Gatorade such as G2, G Powder, 01 Prime… in order to satisfyVietnam customers.

This report shows the factors which influence the marketing decisions of Gatorade inVietnam market It includes several analyses about sources of PepsiCo, the competitors ofGatorade in Vietnam market, especially Vietnam customers to find out what they want andneed in order to delight them Additionally, this report presents some Vietnam policies,economy, society and technologies which affect Gatorade directly Furthermore, thesegments, targeting strategy and the new positioning of Gatorade also are introduced andevaluated

It is clear that Vietnam market is a potential market, especially after Vietnam joined WTO in2007 and opens the market for foreign companies like PepsiCo There are many attractivepolicies and chances for Gatorade to grow and dominate Vietnam market

The following recommendations have been made:

 Changing the flavors of Gatorade to suit to Vietnam customers’ taste Making the product prices become lower

 Expanding the distribution network to make products always available

 Creating exciting advertisements and bringing the attractive promotions to Vietnamcustomers

Introduction

1 Background

PepsiCo is the second biggest beverage company in the world and it has many known brands One of them is Gatorade that is the famous sport drink brand Gatoradealso is the official sports drink of the NBA and WNBA, Major League Baseball,Major League Soccer, more than 70 Division I colleges, and numerous other elite andprofessional organizations and teams (Brands, n.d.) Gatorade was born in the lab tohelp Gator players add the water, sugar, electrolyte… so that they can improve thehealth and have good result.

well-Now, Gatorade is available in more than 80 countries and has many series such as GSeries 01 Prime, G Series 02 Perform, G Series 03 Cover… with various flavors likeorange, berry, etc However, Gatorade is still a new brand in Vietnam market.

2 Aims

The purpose of this report is to find out the factors which influence marketingdecisions and bring the segment, targeting strategy and positioning strategy forGatorade to be able to develop in Vietnam market

3 Scope of this report

This report finds out the advantages which Gatorade has to grow in Vietnamespecially the big cities like Hanoi, Ho Chi Minh City, and Da Nang…

Outcome 1.1: Explain the various elements of the marketing process1.1.1 The various elements of marketing process

1.1.2 Situation analysis

Situation analysis is the first step of marketing process It is the way that company useto find out what they do and what could make customers satisfied Besides, based onthis analysis the companies would understand their abilities to operate The situationanalysis focuses on the board trend, micro and macro environment.

1.1.2.1 Company

PepsiCo is the world’s second largest food and beverage business so it hasmany experiences and the knowledge to prepare the marketing projects andstrategies to develop the new products in the new market like Gatorade inVietnam Besides, PepsiCo has a significant scale It means that to conduct themarketing plans for Gatorade in Vietnam is not difficult.

PepsiCo penetrated Vietnam market early so PepsiCo can find out the flavorsof Gatorade that satisfy Vietnam customers Additionally, PepsiCo has a hugedistribution from south to north

PepsiCo has the firm infrastructure with six plants across Vietnam This is anadvantage for Gatorade to manufacture products, design the styles…which suitto Vietnam customers.

Situation analysis

Situation analysis

Marketing strategy

Marketing strategy

Marketing mix and dicision

Marketing mix and dicision

Implementation & Control

Implementation & Control

1.1.2.2 Customers

Gatorade has to find out the hobbies, behavior, lifestyle, characters… ofVietnam customers to design its products with different styles, flavors andgive the reasonable promotions and advertisements to them

Vietnamese has medium income so Gatorade has to expand the distribution tomake products available and decrease the product prices.

1.1.2.3 Competitors

There are some Vietnam brands that make energy drinks like Number 1 of TanHiep Phat, Rong Do of URC but Vietnam market have not has specificproducts to help athletes rehydrate nutrition like Gatorade Gatorade focuseson advertising the functions to show people what Gatorade’s products couldhelp customers.

There is no Vietnam brands produce sport drinks

Vietnam customers do not distinguish sport drinks and energy drinks

Table 1: The SWOT analysis1.1.3 Marketing strategy

1.1.3.1 Marketing segmentation

Classify the market into different groups of customers to find out what theyneed and want in order to provide customers specific products and applyingparticular marketing mix The main aim of it is attracting more customers.1.1.3.2 Target market selection

Gatorade has to choose the target marketing to focus on producing the variousproducts or distributing them to customers effectively such as athletes,students, sport players…

1.1.4 Marketing mix decision1.1.4.1 Product

Core product: Sport drinks

Actual product: flavors, styles and functions

Augmented product: transferring products to retail stores 1.1.4.2 Price

Fixed cost: building plants, purchasing equipment, salariesVariable cost: VND 37,000/a 335ml bottle

Competitor price: VND 8 – 15,000Customers’ perception: VND 10 – 12,0001.1.4.3 Place

Distribute the products to retail stores, supermarkets… 1.1.4.4 Promotion

Advertising: mass media, internet, newspapers

Promotion: discount, give gifts or free equipment like shelve, fridges

1.1.5 Implementation & Control

Gatorade conducts some programs to introduce products or finance for the sporttournaments.

Focusing on salespeople to find the demands of customers

Outcome 1.2: Evaluate the costs and benefits of marketing

1.2.2 Marketing orientation for PepsiCo

One of the guiding principles of PepsiCo is to care for their customers, consumers andthe world we live PepsiCo said that “Our success depends on a thoroughunderstanding of our customers, consumers and communities.” (PepsiCo, n.d)Therefore, marketing concept is chosen for analyzing for PepsiCo.

Doing asurvey

Preparing and sending surveys to customersCollecting information

With the new market like Vietnam, based on the result of surveys Gatorade could providethe products which are suit and satisfy Vietnam customersFinding out where people usually buy drinks after playingsports and building reasonable distribution channels

Find out what Vietnam

customers want and need

Contracting to retail stores

Transferring products

Make Gatorade’s products become more popular in Vietnam

Delivery products directly to customers

Customers can purchase easily because of the availability of Gatorade

Customers loyalty

Building helpdesksTraining employees Promoting customers with gifts or

preferential cards

Make customers become loyalty and save the costs to attract new customers

Cut down the costs for attracting new customers (high 7-times compare to retain

customers)R&D Training employees

with different skills Researching new products

Discovering and innovate new technologies

Delighted customers with high quality good

Accommodating products of Gatorade to customers such as Vietnam like sweet drinks so Gatorade will supply sweeter products in Vietnam than others

Customers will bedelighted and purchase Gatorade

Advertising Designing the contentsand hiring the well-known peopleIntroducing the advertisements on TV,newspapers or other media mass

Preparing colorful posters with illustrative pictures

Make Gatorade brand more popular in Vietnam

Introducing the functions of products

Attractive customers with fun, action video about products

Give customers the basic

information aboutGatorade to interest its

Table 2: The marketing concepts analysis

Outcome 2.1: Show the micro and macro environment factors that influence marketing decisions.

2.1.1 The definition of macro and micro environment

2.1.1.1 Macro environment is concerned with broad trends and patterns in society as awhole which may affect all markets, but will be more relevant to some thanothers (Couse book, p 83)

2.1.1.2 Micro environment includes all factors which impact directly on a firm and itsactivities in relation to a particular market in which it operates, and also anyinternal aspects of organization which influence the development of amarketing strategy (Couse book, p 83)

2.1.2 Micro environment 2.1.2.1 Factors

Internal stakeholders

Managers Vietnam managers will

understand the tastes, behavior, the interest and the demands of vietnam customers

Gatorade produces the styles, flavors and colors which Vietnam customersprefer

Employees The salaries for vietnam workers are cheaper than other countries like Europe, USA…

The price will be decreased

Connected stakeholders

Customers Vietnam customers like sweet flavors and colorful bottles.

Gatorade designs the colorful plastic bottles with many flavors and make itsweeter

External stakeholders

Community Do not allow Gatorade harm or damage the environment Gatorade helps vietnam turn over the difficulty

Gatorade uses the recycle plastic to protect

Table 3: The internal factors

Strength Weakness Gatorade has a lot of different flavors

 change the flavors of products in vietnam so it can suit to customers PepsiCo has large distribution network

 Gatorade is the not well-known brand invietnam market

 Gatorade needs to advertisements and hold more promotion for customers The price of Gatorade is higher than

other energy drinks

 using vietnam ingredients to reduce the price

 The distribution of Gatorade is very small

 The price of Gatorade is very high

Table 4: The SW analysis

2.1.3 Macro environment 2.1.3.1 Factors

A tax increase

Customers have less money to consumeso Gatorade need to cut down the pricesand give more promotion to encouragecustomers purchase goods

The minimum wage increase

Customers will have more money tospend so Gatorade needs to makeproducts available to supply the demandof customers

The tight fiscal and monetarypolicy

With these policies, Gatorade can havedifficulty because it makes thecustomers’ expenditure smaller.Gatorade needs to give some discount,promotion…to encourage customers buyproducts

Economical High unemployment rate Customers do not have money to use sothe demands for consuming fall.

sell products

Low inflation rate

The real price will reduce and theexpenditure on consuming product willalso increase Gatorade deliveries moreproducts to customers and holdpromotion programs to interestcustomers.

An interest rate decrease

PepsiCo would borrow more to improvethe product, distribution and makingadvertising

Customers care more about health soGatorade provide more low sugarproducts

Leisure interests

Vietnamese like doing outside activitiesso Gatorade provides specific productsfor different functions

Young Vietnamese prefer to eat fastfood and carbonated drinks, PepsiCocreate more flavor to satisfy customers

Cost structure decrease Produce more products and reduce thecosts of Gatorade in vietnam Recent technological

Gatorade need to change technology tosuit to quality requirements for its

productsTechnology's impact on product

PepsiCo update the new technologyfrequently to have healthier products for

customersTable 4: PEST analysis

2.1.1.1 SWOT analysis

Vietnam joined WTO in 2007 so there areseveral preference and supportive policiesfor foreign companies like PepsiCo These

The whole economy has gone down andPepsiCo is no exception Thus Gatorade hasto decrease the price and promote more

Vietnam market do not have the specificproducts for athletes and sport players soGatorade could intensify advertising aboutits functions or give people trial

Vietnam has young general population withhigh percentage of male from 15 to 30 Thisis an active group so Gatorade needs to focuson this group by advertising more for it,giving the suitable promotion, distributingproducts near schools, stadiums…

Table 5: OT analysis

Appendices – Micro and macro environment 1 Managers

95% of management positions are held by Vietnamese employees (PepsiCo, 2011).Vietnam managers can understand what Vietnam customers want and need wieldierthan other types of managers As the result, Vietnam customers can be easy to satisfywith the styles, flavors … of Gatorade.

2 Employees

From October 1 to the end of December 31, 2012, minimum wage rises to VND 1.4-2million (approximately $70-100) (anon, 2012) Although it increases, it is very smallcompare to other countries This is the reason explain why PepsiCo invests more toVietnam to build strong infrastructures in Vietnam to manufacture If Gatorade cantake advantage of this chance, it can improve the productivity and reduce the price 3 Community

In 2010, PepsiCo invested $250 million in Vietnam over the next three years to createjobs (PepsiCo, 2010) This helps Vietnam decrease the unemployment rate

4 Gatorade has many kinds of flavors like lemon, orange, berry… It makes Gatoradebecome various and give customers a lot of choices

5 PepsiCo appeared in Vietnam early in 1994 so they built the distribution networkacross Vietnam so Gatorade can use this distribution to delivery its products tocustomers and make it is always available in Vietnam market.

6 PepsiCo has 6 plants in Vietnam with high capacity and Gatorade can apply this toproduce products in Vietnam It is easier for Gatorade to have more kinds and transferto the retail stores Besides, Gatorade cut down the product prices because of importtax.

7 Gatorade has been in Vietnam market but it is still a new name Vietnamesecustomers seem not to realize the existence of Gatorade It means that the chances forVietnam customers purchase Gatorade is very low To solute this problem, Gatoradehas to expand the distribution networks for its products lager and make customershave the information about Gatorade

8 Gatorade has a high price than other energy companies One bottle/ 335ml has theprice is VND 37,000 (nearly $2) while others fluctuates from VND 8-10,000(approximately $0.5) It is nearly one-fourth Additionally, the average income perperson is not high; it is only about 3.2 million ($150) so it is very difficult for them topurchase a high price product like Gatorade Gatorade needs to find the ways to cut