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In recent years, the food and beverage industry in Vietnam has always had a high growth rate and is considered one of the most attractive industries The market is increasingly competing with many big names Nestlé Vietnam Ltd has many years of development and is a leading company in food and beverage in Vietnam To continue developing stronger and more sustainable in the coming time, Nestlé Vietnam Ltd needs to develop a development strategy, especially a marketing strategy Nestlé Vietnam Ltd was established in 1995, is a 100% foreign-invested company, belonging to Nestlé SA Group - is the largest food and beverage group in the world currently present in 191 countries with 328,000 employees worldwide, based in Vevey - Switzerland Nestlé is committed to improving the quality of life and contributing to a healthier future for consumers around the world With a commitment to make long-term investments in Vietnam, in recent years, Nestlé Vietnam Ltd has continuously invested in building, expanding production lines at factories and diversifying products to meet the needs of food, nutrition and healthy living for Vietnamese consumers Currently, Nestlé Vietnam Ltd operates four factories producing food and beverage products All Nestlé factories in Vietnam are designed and built to meet the highest standards of unified quality throughout the Group, while always complying with Vietnam's laws on environmental protection, pollution prevention and application of initiatives to reduce emissions into the environment, save water, aiming to Zero on waste to the environment in production (Path to Zero) With a total investment capital of more than US $ 520 million, Nestlé Vietnam Ltd has become one of the leading successful foreign-invested companies in Vietnam, with remarkable contributions for the social and economic development of the country Nestlé Vietnam Ltd always maintains double-digit growth, receives certificates of merit for contributing to the State budget, active in the field of sustainable agricultural development, environmental protection and nutrition education, physical, healthy and happy life in Vietnam (About Nestle Vietnam Ltd, [online] Available at: http://vnr500.com.vn/Thong-tin-doanhnghiep/CONG-TY-TNHH-NESTLE-VIET-NAM-Chart 271-2015.html) Figure 1: Nestle’s company branding recognition Figure 2: Some product brands of Nestle Vietnam Ltd According to Euromonitor’s report, the instant coffee market share of Viet Nam in 2014 and the finacial indicators of top key diary players in 2016 are shown below Figure 3: Instant coffee market share in 2014, Source: Niesel Vietnam Figure 4: The finacial indicators of top key diary players in 2016 (Vietnam dairy market 2018, [online] Available at: https://www.slideshare.net/StoxPlusCorporation/vietnam-dairy-market-2018) To analyze current status of the company, we use SWOT analysis SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning It is intended to specify the objectives of the business venture or project and identify the internal and external factors that are favorable and unfavorable to achieving those objectives Users of a SWOT analysis often ask and answer questions to generate meaningful information for each category to make the tool useful and identify their competitive advantage SWOT has been described as the tried-and-true tool of strategic analysis, but has also been criticized for its limitations(Wikipedia, 2018) Strengths and weakness are frequently internally-related, while opportunities and threats commonly focus on the external environment The name is an acronym for the four parameters the technique examines: Strengths: characteristics of the business or project that give it an advantage over others Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to others Opportunities: elements in the environment that the business or project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project The degree to which the company's internal environment matches the external environment is represented by strategic fit Identifying SWOTs is critical because they can advise later planning steps to achieve the goal First, decisionmakers should determine whether the SWOT target is achievable If the goal is not attainable, they must choose another goal and repeat the process Applying this model in to the case study of Nestle Vietnam Ltd, the analysis below will point out more detail Figure 5: SWOT analysis of Nestle Vietnam Ltd Strengths of Nestle Vietnam Ltd (STRENGTHS) Famous brand - Nestle is the most famous brand in the world It has developed a respectable reputation in the field of food and beverage providing high quality products for daily use around the globe Globally Recognized Brand - Through effective branding and advertising strategies, it has created significant awareness and successfully developed brand image around the world According to Fortune Global 500, Nestle are among the largest corporations in the world and is ranked in position 69 in the list in 2018 3 Highly diversified company - Nestle sells its products in 189 countries Instead of relying on a few markets, the company has captured a large market in many developed and developing countries to make the most of its revenue Its top markets include the US, China, France and Brazil In 2017, it generated CHF 26.7 billion from the US market alone The most valuable brand in the world - According to Forbes Global 2018 , Nestle is one of the world's most valuable companies in terms of revenue, profit, assets and the highest market value Extensive product portfolio - Nestle owns more than 2000 brands globally and innovates more than 8000 products to consider nutrition and health, according to 2017 annual reviews It is one of the largest companies in the world with the widest product portfolio Strong relationship and famous brands - Nestle has some of the most recognized brands in the world under its names such as Nescafe , Kit Kat , Gerber , Milo and Maggi Besides, it has strong relationships with other reliable and strong brands such as Colgate Palmolive, Coca Cola , General Mills and L'Oréal Effective R&D system - Nestle has the world's largest food and nutrition research organization with 21 R&D centers Research and development is one of its main competitive advantages More than 5000 employees are involved in R&D activities It spent nearly 1.72 billion Swiss Francs on R&D in 2017 Environmental sustainability practices - Nestle makes significant efforts in environmental sustainability practices and implements innovative initiatives to improve product quality It optimizes advanced solutions to reduce waste, use water, use non-renewable energy and use packaging materials In 2017, 253 of the Nestle factory reached zero waste To convey sustainable benefits to customers and keep the environment clean, Nestle has launched a free mobile application that helps people recycle packaging waste correctly Large distribution network - Nestle owns a large and diversified distribution system, not only penetrating into urban areas but also rural areas It has adapted local delivery methods and decentralized approaches to run businesses effectively in their respective countries Nestle has close relationships with suppliers, retailers, suppliers and distributors Weaknesses of Nestle Vietnam Ltd (WEAKNESSES) Price fluctuations of retail giants - Nestlé's grocery sales are achieved mainly through giant retail giants such as Walmart , Tesco and Kroger Any decrease or increase in prices of these retailers may affect Nestlé sales About controlling and structural organization - A large number of brands belonging to the same group of cells, which makes it difficult to manage Governance large, a large number of brand individual can often lead to discord and conflict of interest Water controversy - Recently , Nestle was accused of illegally pumping millions of liters of water in countries where residents were short of drinking water Social criticism has become the target of media attention many times Requiring privatization of water, misleading labeling and a lawsuit on chocolate production using child and slave labor are some examples that undermine its market reputation Maggi noodles controversy - In 2017, Nestle failed to delete a lab test in India This created a public hype when people boycotted Nestle, resulting in an 80% loss of domestic market share Nestle declares ' No more MSG' in Noodles packages However, 1,000 times lead was found in the product after testing Opportunity of Nestle Vietnam Ltd Venture into a small food startup - Nestle has a great opportunity to grow the number of small food startups under its popular brand Nestle can also partner with startups to promote their brands Online shopping - Nestle has a remarkable opportunity to promote its ecommerce websites and online shopping platforms Very few CPGs are providing online services to make the shopping experience more comfortable and pleasant Although Nestle has online stores in a number of countries, expanding its online services into more areas will prove a rewarding decision for the company 3 Market penetration for breakfast cereal - Nestlé 's cereal and oat market has shown rapid growth in recent years Therefore, more market penetration will bring high profits to the company Expanding the market for ready- made tea and coffee - The demand for tea and coffee is constantly increasing, creating a lucrative opportunity for Nestle to market this market more Partnership - Strategic alliances with other food and beverage giants are also a great opportunity for the company to increase sales and profits Authentic labeling - Nestle has been criticized for providing false nutritional information on its label Therefore, there is an opportunity to improve its practices by providing reliable information and accurate labeling for its products Nestle Vietnam Ltd Threat (THREATS) Controversy over illegal destruction of tropical forests - In 2017, Nestle was accused of being involved in the destruction of the last Sumatra rainforest It faces heavy criticism from NGOs and environmentalists on this issue Water scarcity - Nestlé production is highly dependent on water use Access to clean water through less expensive sources has become difficult for the company for many reasons These include population growth, climate change, increased demand for food and water, increased pollution, water waste and overexploitation of resources Increased competition - Many CPG companies such as Mondelez and Unilever offer similar food and beverage products It is difficult for Nestle to compete in such a situation that alternative products are easily accessible Government regulations and prices - Government regulations can affect Nestle's business In addition, increasing commodity prices forced the company to increase product prices It will lead to a reduction in sales as consumers may switch to other brands available at low cost (Tam Tran, What is Nestlé? SWOT Analysis Nestle 2019, [online] Available at: https://atpsoftware.vn/nestle-la-gi-phan-tichswot-nestle-2019.html, Accessed Aug 20, 2019) In order to build marketing strategies for Nestle Vietnam Ltd., we study marketing tactics – the 4ps marketing mix strategy Marketing mix is a conceptual framework that is used commonly in doing marketing activities for all lines of businesses nowadays It is a major concept in modern marketing, according to Kotler and Armstrong (2014).It is “a set of tactical marketing tools that the firm blends to produce the response it want in the target market” (Kotler and Armstrong, 2014) The mean and idea of marketing mix is not surrounding a scientific theory/concept, but it helps to transforming marketing ideas to implementation and is a critical tool for decision makers to make principal strategies in providing a goods/service that can adapt with customer’s needs, according to a research by Goi, C.L (2009) There are two suggested theories which are mostly known and developedin businesses in coming up with marketing mix strategies The first model is the introduction of 4Ps strategies studied and introduced by E Jerome McCarthy in late 1940s, which is a total strategic package for Product, Price, Place and Promotion Then later on in 1990s, the 4Cs model was proposed and become the definition of the marketing mix For this 4C models, customer-driven is taken into account when conducting marketing strategy, and there are marketers having different theories on the 4Cs, including Lauteborn’s model (consumer, cost, communication, convenience) and Shimizu’s model (commodity, cost, communication, channel) In this report, the authors would like to use the 4Ps model to suggest Nestle Vietnam Ltd to attain its objectives Products : Nestle’s quality policy is: "Good food, good life" Nestle reaches the needs of customers, thereby creating products that best meet the needs of consumers To survive and grow, contentment Customers are the focus of Nestle In order to effectively implement and implement quality policies, Nestle builds a quality management system that meets the requirements of international standards ISO 22000 and HACCP With good quality, Nestle products are continuously ranked in the top of instant coffee business in Vietnam and in the world Price: In terms of price, Nestle's products are rated by consumers as popular, affordable for everyone Places: There are more than 200 distributors nationwide, along with more than 2000 level agents and retail outlets Promotions and related services: In recent years, Nestle has little advertising activities on the mass media, promotions and organizations are not regular Nestle only focuses on organizing events so consumers are less aware of new products The company also has a customer service department, specializing in resolving consumer complaints, answering customer questions To build the marketing strategy for Nestlé Vietnam in the coming time, we also need to consider some typical product marketing strategies of the Nestlé Group Research and develop new products: Researching and developing new products is the foundation for business success Grasping the bottom line, Nestle has continuously focused on developing new breakthrough products to market to meet different tastes of consumers For example, Nescafé in helps users save time on the preparation and also meet the familiar taste for difficult customers to enjoy homemade coffee, with a combination of coffee and milk and road Besides, to satisfy Italian customers, Nestle produces Cappuccino coffee with the familiar aroma of the type of coffee that is only available outside the store or it takes a lot of labor to prepare at home Not stopping there, with the help of scientists, technicians of prestigious universities, in 2010, Nestle of its Thai subsidiary launched the Nescafé Protect Proslim product market This production strategy made a strong impression and brought great buzz to Nescafé This product takes advantage of the social and psychological development trend of overweight women without training time, launched products are warmly welcomed not only in Thailand but also in the Vietnam market Two large coffee producers in Vietnam, Vinacafe and Trung Nguyen, seem to have to surrender to Nescafe in this global strategy With such a wide range of different products, Nestle helps customers transition from pragmatic consumption to enjoyment spending as it begins to grow and transform, creating a wide range of blends with different recipe and ingredients Nestle has global standards and is available in all markets it enters There are also subproducts / sub-products that may be available in this market, but not in other markets that suit the tastes of domestic consumers Because Nestle trades in food products, consumer tastes change, so must products For example, Vietnam has Nescafé Vietnam, Mexico likes cinnamon-flavored coffee, Philippines tends to choose chocolate-flavored coffee The German-speaking region prefers light-colored milk coffee and the French-speaking part is extremely fond of black coffee The nature of products is closely associated with customers and accompanied by customers from one country to another, so the research and production strategy must also be globalized Production linkage and acquisition: As a large group of branches spanning the whole world, that success of Nestlé must be linked to the strategy of acquisition and acquisition in research and development and production, which does not require much human resources and capital for research and development and production In the early 1990s, Nestlé partnered with Coca Cola in teas and coffees ready to benefit from Coca-Cola's worldwide bottling system and blended beverage expertise In Asia, Nestlé's strategy is to gather local companies to form a group of autonomous regional managers who know the culture of the local market more than Americans or Europeans Recently, Nestlé bought Indofood, Indonesia's largest noodle maker The main focus is on expanding sales in the Indonesian market, and in the near future will seek to export Indonesian food products to other countries Nestlé has used a broad-based strategy for Asia that involves producing different products in each country to give the region a certain product from one country For example: Nestlé produces soy milk in Indonesia, coffee makers in Thailand, soy flour in Singapore, candies in Malaysia and cereals in the Philippines, all of which are distributed in the region Associated with General Mills in the 1990s, launching breakfast cereal is a creative idea of Nestlé, because this is a large corporation, experienced in the production of cereal products and especially have a stable number of customers In 2010, Nestlé had a 29.7% stake in LOreal - a strategic alliance to create facial creams, open up a new market, hit a new market segment and simultaneously create customers new products In general, Nestlé not only develops in terms of self-production, but also in relationships with other corporations to make the "basket" of products more diverse and suitable for consumer tastes and that This is also the reason why over the past 20 years, Nestle has been constantly growing and reaching out to the world, crushing many competitors Besides the connection of Nestlé, Nescafé also cooperated with Krups to research and develop an automatic coffee machine called Nescafé Dolce Gusto This is a unique design, versatile drinking system that provides customers with diverse beverages of high quality Although Nescafé could not meet the exact taste of the product, when it launched, Nescafé quickly gained the popularity of consumers thanks to its time-saving feature Craft brewing, moreover, can be mixed with typical flavors: Cappuccino, Ice Cappuccino, Latte Macchiato and Hot Chocolate Research and develop packaging: Depending on the market, Nestle has a suitable penetration strategy, not only must have a suitable product line, but also must have because of proportionality For example, in the Vietnamese market, during the war on packaging with G7, Nestle launched a type of packaging that hit Vietnamese consumers using Vietnamese goods, product labels with the seal "100% Vietnamese coffee ” In addition, Café Vietnamese's slogan of using the slogan "strong coffee for men" also partly helps Nestle to narrow customers and focus on a more specialized group of customers Only in the research of product packaging can distinguish Nestle and competitors in the industry Extremely diverse and profound strategies in design help retain fastidious customers and especially know how to strike into the psychology of consumers Society grows faster and more precious time than gold, modern life is always busy giving rise to new ideas On November 3, 2009, Nestle launched a new packaging design suitable to the circumstances, tastes and consumer trends of Nescafé lon Although this is not a strange product, it is the first canned coffee appearing on the Vietnamese market without having to import Nestle prides itself on being a pioneer to bring Vietnamese coffee a new form of convenience and style of developed countries Moreover, the convenient design that can be taken anywhere and enjoyed anytime is the most important highlight of this product This is the first step to explore a very new market segment for young and dynamic Vietnamese while also revitalizing the Vietnamese coffee bean (Nguyet Le Thi, Nestlé Group's product marketing strategy and lessons learned for Vietnamese dairy businesses, [online] • • • • Available at: http://tapchicongthuong.vn/bai-viet/chien-luoc-maketing-san-phamcua-tap-doan-nestle-va-bai-hoc-kinh-nghiem-cho-cac-doanh-nghiep-sua-viet-nam47378.htm, Accessed Apr 28, 2017) Products "covering" the market: Nestle is a company specializing in FMCG industry, this is considered as a key group of the company related to food, everyday utensils for each family member Nestle's marketing strategy is to "bring each product to each family," each product the company creates to meet the needs of each person in a family, such as: Dairy products: There are many nourished dairy products like Nestle, Nestle slim and Nestle everyday Chocolate: One of the most dominant segments for Nestle is chocolate It has popular products like Kitkat, Munch, Éclairs, Polo and Milky Bar It also comes with Alpino chocolate to target the gift segment Drinks: You all know about Nescafe This is the largest coffee brand in the world It is owned by Nestle It has worldwide distribution channels Ready to cook foods: Nestle has launched many ready to cook foods along with cooking products like Maggi masala Ready to cook noodles - Maggi one of the biggest hits for Nestle has become a brand of its own with various products like Maggi Pasta, Maggi sauce and more Nestle is the largest food company in the world, it has about 8,000 brands with a variety of products on the market, forming the backbone of Nestle's marketing strategy The biggest strength of the company is its advantage of having a huge "ecosystem" of products for each product group, giving customers many choices Notice, there must be at least one item from this Swiss brand in your home! Nestle is famous for the quality and taste of its products Nestle believes that “Success is built on quality.” This demonstrates that Nestle carefully researches the usage habits of each market, and creates many products that attack customers, this strategy of Nestle achieved great success with the number of people using its products at a very high level (Source: Nestle Family) • • Clear market segmentation The majority of Nestle's revenue and revenue come from European countries, and the Americas This has led Nestle to collect nearly 90% of its total revenue for many years Typically, they follow an FMCG distribution channel Bulk products are shipped and delivered to C&F It is a kind of warehouse where these products are stored From there, it is sent to distributors and then to retailers Consumers can now buy products through retailers Therefore, distributors can easily get discounts on stronger products, if they buy some weaker products One thing that makes Nestle successful all over the world is thanks to its incredibly clever market segmentation The company has penetrated a lot of markets, Nestle's marketing strategy is to create a large coverage in the market in many countries and areas they target Asia is a potential market of Nestle and in recent years the company has many activities here to increase the "reach" to consumers Nestle's market share has increased significantly, and since then it has benefited greatly from the clear segmentation of the potential of the Asian market (Source: estrategiaynegocios.net) • • Communication is always associated with brand products Nestle's marketing strategy is very successful in terms of communicating the message to its customers This is the calculation of Nestle when advertising each product individually, can make customers remember about each product line they have on the market Remember the Nescafe appeared on the market they brought Nescafe melody with "bold" ads, along with the red cup of coffee on hand with the scent always makes the user remember forever Because of the communication factor associated with each of these individual products, Nescafe's awareness is extremely large, even in Vietnam, despite having to "fight" with many domestic rivals, but Nescafe still has The market share is quite good with the right communication strategy Moreover, Maggi is a product worth mentioning that they combine with 2minute snacks that can easily be prepared by mothers This makes it quite impressive and imprinted on the minds of mothers and children They always focus on the quality and nutritional value of the product In the Indian market, Maggi is a phenomenon and the product is "divine" when the amount of people using instant noodles with this product accounts for more than 50% of the market share This is thanks to Nestle's marketing strategy hitting advertising based on product brand factors The strong presence of Maggi and Nescafe at a very high level has led them to boost sales and promotions Nestle uses all media such as TV, print, online advertising (Thang Nguyen, Nestle Marketing Strategy: Rich product ecosystem, [online] Available at: https://marketingai.admicro.vn/chien-luoc-marketing-cuanestle-he-sinh-thai-san-pham-phong-phu/, Accessed Dec 03, 2018) To turn those strategies into implementation, we make an estimated budget planning for Nestle Vietnam Ltd in years – 2020 and 2021 In which, almost of the budget may be attributed to advertisement and R&D costs, because they are two core activities of product marketing The budget planning for 2020 and 2021 business cycle is expressed as below 2020 2021 Total sales (expected) (VND billion) Total marketing budget (VND billion) Marketing as a Percentage of Sales )%) ROI (return on investment) Table 1: Sales forcast in 2020-2022 period The ROI (return on investment), in this case, is an increasing portion The company is currently having business expansion, and sales of Nestle Vietnam Ltd is intend to increase, so it is neccessary to agline such ROI value in light of predict business sale results The budget planning for 2020 and 2021 marketing activities is expressed as below 2020 Advertisemen t R&D TVs, digital applications Prints (newspaper, newsletter, standees, brochures,etc.) Online kiosks Social network Surveying Sampling and Quality Assurance Testing Human resources - headhunt Total marketing budget 2021 Table 2: Marketing budget for 2-year period Media schedule Advertisement on multi-media will concentrate on January to August in order to boost car sales during this period From September to December, there will be no advertisement on print media and TV media or OOH The reason is that this time is near season so people seek more for discounts and car deals than buy a new car Nestle Vietnam Ltd.'s marketing strategy has many similarities with many other FMCG brands in the market But, with the differences, Nestle Vietnam Ltd has created a certain position in the hearts of Vietnamese consumers Referring to the names of fast-moving consumer goods industry in the world, Nestle is a brand that cannot be ignored at the present time With the intensive, careful marketing plan, we believe that Nestle Vietnam Ltd will have a strong and sustainable development in the future References Kotler, P and Armstrong, G (2014) Principles of Marketing: global edition 15th ed Pearson Education Limited Goi, C.L (2009) A review of marketing mix: 4Ps or more? International journal of marketing studies, 1(1), p.2 About Nestle Vietnam Ltd, [online] Available at: http://vnr500.com.vn/Thong-tin-doanh-nghiep/CONG-TY-TNHH-NESTLE-VIETNAM-Chart 271-2015.html Vietnam dairy market 2018, [online] Available at: https://www.slideshare.net/StoxPlusCorporation/vietnam-dairy-market-2018 Tam Tran, What is Nestlé? SWOT Analysis Nestle 2019, [online] Available at: https://atpsoftware.vn/nestle-la-gi-phan-tich-swot-nestle-2019.html, Accessed Aug 20, 2019 Nguyet Le Thi, Nestlé Group's product marketing strategy and lessons learned for Vietnamese dairy businesses, [online] Available at: http://tapchicongthuong.vn/bai-viet/chien-luoc-maketing-san-pham-cua-tap-doannestle-va-bai-hoc-kinh-nghiem-cho-cac-doanh-nghiep-sua-viet-nam-47378.htm, Accessed Apr 28, 2017 Thang Nguyen, Nestle Marketing Strategy: Rich product ecosystem, [online] Available at: https://marketingai.admicro.vn/chien-luoc-marketing-cuanestle-he-sinh-thai-san-pham-phong-phu/, Accessed Dec 03, 2018 ... because of proportionality For example, in the Vietnamese market, during the war on packaging with G7, Nestle launched a type of packaging that hit Vietnamese consumers using Vietnamese goods, product... segment for young and dynamic Vietnamese while also revitalizing the Vietnamese coffee bean (Nguyet Le Thi, Nestlé Group's product marketing strategy and lessons learned for Vietnamese dairy businesses,... studies, 1(1), p.2 About Nestle Vietnam Ltd, [online] Available at: http://vnr500.com.vn/Thong-tin -doanh- nghiep/CONG -TY- TNHH-NESTLE-VIETNAM-Chart 271-2015.html Vietnam dairy market 2018, [online]
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