Aquafina Marketing-analysis- Pmk PDF

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Marketing Principles Assessment

Contents A. SITUATION ANALYSIS............................................................................................................3 I.

Company description................................................................................................................3 a)

History...................................................................................................................................3

b)

Mission Statement.................................................................................................................3

c)

CEO.......................................................................................................................................3

II. Product description (Aquafina Bottle Water)...........................................................................3 a) Introduction...........................................................................................................................3 b)

Features.................................................................................................................................3

B. MARKETING ENVIRONMENT.............................................................................................4 I.

Micro Environment...................................................................................................................4 a) The company.........................................................................................................................4 b) Suppliers................................................................................................................................4 c)

Marketing intermediaries......................................................................................................5

d)

Customers..............................................................................................................................5

e)

Competitors...........................................................................................................................5

f)

Public....................................................................................................................................6

II. Macro Environment..................................................................................................................7 a)

Demographic environment....................................................................................................7

b)

Economic environment.........................................................................................................7

c)

Political environment............................................................................................................7

d)

Natural environment.............................................................................................................7

e)

Cultural environment............................................................................................................8

f)

Technological environment...................................................................................................8

C. SWOT ANALYSIS.....................................................................................................................8 D. STDP............................................................................................................................................9 I.

Segmentation............................................................................................................................9

II. Targeting strategy...................................................................................................................10 a)

Current target:.....................................................................................................................10

b)

Reason makes SPV choose these segments:.......................................................................11

c)

Targeting strategy:..............................................................................................................11

E. DIFFERENTIATED................................................................................................................11 I.

Product differentiation............................................................................................................11 RMIT University | MKT1205-MARKETING PRINCIPLES 15

II. Channel differentiation...........................................................................................................12 III.

Image differentiation...........................................................................................................12

IV.

People differentiation..........................................................................................................12

F. POSITIONING.........................................................................................................................12 I. Positioning maps.....................................................................................................................12 II. Value proposition....................................................................................................................13 G. CONCLUSION.........................................................................................................................13 H. REFERENCES.........................................................................................................................13 I. APPENDIX...............................................................................................................................16

A. SITUATION ANALYSIS I.

Company description

a) History Suntory PepsiCo Vietnam (SPV) is one of the fastest growing soft drink and beverage supplier in the world. According to Suntory PepsiCo Vietnam (2014), SPV is in the partnership with IBC Company to form a franchise, joined the Vietnamese market in 1994 with two first brands: Pepsi and 7UP. In 2003, the company was renamed PepsiCo Beverages International - Vietnam. In the same year it launched Sting, Twister, Lipton Ice Tea and Aquafina. Two years later, SPV officially became one of the largest beverage companies in Vietnam. SPV currently has 5 factories have been built in the provinces of Vietnam, which included Ho Chi Minh (1992), Quang Nam (2004), Binh Duong (2008-2009), Can Tho (2010) and Bac Ninh (2012). After nearly 20 years of development, SPV was honored to receive a lot of rewards and recognitions from 2012 to 2015 such as Pepsi Brand in the top 100 of “Believe & Use” Program, Vietnam High Quality Goods Certificate, Beverage Quality Excellence Award and many others. b) Mission Statement Becoming a leading company manufacturing consumer products, focusing primarily in food and beverage convenience. SPV is constantly searching and generating healthy financial performance to investors, creating development opportunities and bring economic benefits to employees, business partners and the communities where we activity. We always strive to operate on the basis of honesty, fairness and integrity in all their actions. c) CEO Mr. Katsuyasu Kato joined Pepsi Bottling Ventures (PBV) in April 2010. He was the primary liaison between Suntory Limited and PBV. Now, Mr. Katsuyasu Kato is an Executive Chairman of Suntory Pepsico Vietnam Beverage. II.

Product description (Aquafina Bottle Water)

a) Introduction Aquafina was available in Vietnam in May 4th 2002; it aims to become a pure water brand premium in this market. It is mined from underground water sources, ensuring purity thanks processed through reverse osmosis system and ozone and UV sterilization. Nowadays, Aquafina has truly become a brand of purified water by consumers appreciate. b) Features  The bottles are packaged in convenient packaging.  Many different volumes that bring the diverse choices to customers: Pet 500ml (VND 5.000), Pet 355ml (VND 4.000), Pet 1500ml (VND 8.000), Pet 5000ml (VND 22.000). The prices are based on the research at CoOpmart supermarket and BigC supermarket in Vietnam  The bottles are friendly to the environment and natural.  Providing water for the body with a stable mineral content  Having the high nutritional value for the skin. RMIT University | MKT1205-MARKETING PRINCIPLES 15

B. MARKETING ENVIRONMENT I.

Micro Environment

a) The company  Board of Director: SPV offerings include PepsiCo brand carbonated beverages Pepsi and 7Up, the energy drink Sting, along with Suntory brand TEA+ Oolong Tea, C.C.Lemon and Aquafina bottled mineral water. SPV has an established record of successfully working together in Vietnam beverage market. This success is gained by a Board of Director, including:  Katsuyasu Kato: Executive Chairman of Suntory PepsiCo Vietnam. He is the primary liaison between Suntory Limited and Pepsi Bottling Ventures  Chandra Shekhar A.Mundlay: CEO and General Director  Huynh Thi Xuan Lien: Vice President Marketing of Suntory PepsiCo Vietnam  Financing: According to Suntory Beverage & Food Annual Report 2014, Suntory global net sales has reached ¥1.257.280 million, slightly increase nearly ¥136 million. While in Vietnam, SPV sale is VND 41,473 billion (about over ¥732 million) and the net sales is increasing every year. These figures prove that Suntory has a right strategic planning in developing the financial statement annually.

Appendix 1: Performance Highlights Suntory Beverage & Food Limited and Consolidated Subsidiaries (Source: Suntory Beverage & Food Annual Report 2014) b) Suppliers Purchasing at SPV is governed by strict guidelines, SPV encourages their suppliers to join Sedex (the Supplier Ethical Data Exchange). Furthermore, SPV cooperates with key suppliers on business improvements, such as the introduction of lighter weight PET bottles. (© Suntory Holdings Limited) SPV has signed the commitments to promote environmental management and contribute to the formation of sustainable society. SPV follows a strict Code of Conduct and Anti-Bribery Policy. SPV has owned totally 5 factories in Can Tho, Dong Nai, Hoc Mon, Quang Nam and Bac Ninh. Currently, SPV has 2.300 direct labours and tens of thousands direct employees together were honored to archive the Vietnam High Quality Goods Certificate 2013. (© Suntory PepsiCo Vietnam Beverage 2014) Oragina Schweppes Group: acquired by Suntory in 2009, only uses 100% recyclable packaging based on the 3Rs (reduce, reuse, recycle) to support SPV develop the environmentally friendly containers and packaging materials. (Suntory annual report 2014, p.37)

c) Marketing intermediaries  Marketing service agencies: FPT is the leading Information Communication Technology Company in Vietnam. SPV has collaborated with FPT to implement the DMS-Lite (Distribution Management System) on Mobility platform. The system not only helps SPV manage better its distribution system, the crucial part in introducing new products to the market, improving management, sales efficiency but also helps distributor manage their finance status, services, promotion programs, warehouse, communication and business reporting. (FPT Corporation). This transaction between FPT and SPV would guarantee the managing and working process of SPV always in professional environment. FPT proudly cooperating with smart strategic vision of SPV and its professional sales force, this project would be a great success.  Physical distribution firms: Thacotrucks is a company provides the production and sales commercial vehicles (trucks and buses). On October 27th 2014, Thaco held the 3rd ceremony vehicle handover with contracts worth more than VND 6.5 billion. Totally, SPV has bought 62 vehicles in 2014 and has invested nearly 900 Thaco vehicles since 2005 (Thaco - Trường Hải Auto). The cooperation with Thacotrucks demonstrates that SPV not only a strategic partnership but also a loyal customer of Thacotrucks. Therefore, SPV should continue signing a long term contract to select Thacotrucks as their goods shipping service product supplier in the future. d) Customers According to Ms. Hoang Hai Yen (Marketing Director), Aquafina has targeted to customers who have a middle-class income and young people (Minh Dan,TBKTSG). Furthermore, Pepsi aims to expand wider target market for Aquafina (Richard, 2015), such as fashionable, active and busy people. In addition, Aquafina image always available to many reseller customers such as luxury hotels, stunning restaurants, summit meetings and Aquafina is also known as a Gold Sponsor for many sports tournaments, fashion show, high-class events, including Aquafina Pure Fashion show and Heineken Tennis Tournament. Attractive images of Aquafina bottled mineral water at those events are an evidence of a successful marketing campaign helped Aquafina affirm its position in the marketplace. e) Competitors In 2009, Nielsen Vietnam has announced a bottled water market survey report and made headlines with La Vie brand accounted for 31% market share, PepsiCo's Aquafina behind with almost 30% .In total,4 major brands are Lavie, Aquafina, Vinh Hao and Joy (now is Coca- Cola’s Dasani Vietnam ) accounts for about 80% market share. Mr. Tran Ngoc Binh, director of private enterprise Hoang Tran Commerce - one of the distributors of bottled water in city leading, analysis: if ranked by the business situation at Hoang Tran system, currently headed by Vinh Hao (120,000 products/ year), the second is LaVie (60,000 products/ year), Wami (45,000 products/ year) and the last ranked is Aquafina (because Aquafina not providing the 19L bottled water product). (Dien Dan Doanh Nghiep, 2012) Direct competitors are the most effect to the trading market with competitive prices and most attracted the retailers of Aquafina, including Dasani, Lavie and Vinh Hao. Indirect competitors are weaker, less available and the consumption are more limited on the market than Aquafina, including Evian,Sapuwa. RMIT University | MKT1205-MARKETING PRINCIPLES 15

PRODUCT BRAND DASANI

AND PACKAGE AND PRICE

Pet 500ml- VND 3.420 Pet 1500ml- VND 6.745

COCA-COLA LAVIE

DIRECT COMPETITORS NESTLÉ VĨNH HẢO

EVIAN

INDIRECT COMPETITORS SAPUWA

DESCRIPTION Participating Vietnamese Market: 2011 Dasani with empty unique plastic bottles lightweight, environmentally friendly and easy compact twisted palms after use.

Participating Vietnamese Market: 1994 Fresh and vital. Contains low-content minerals such as Natrium, Kalium and 500ml Bottle- VND 4.000 Calcium. Lavie is bottled directly at the 1500ml Bottle- VND source by modern technology of Nestle 7.500 Waters without using any chemicals, and complied with Vietnam’s quality standards. Participating Vietnamese Market: 1928. Differences create the personalities of 500ml Bottle- VND 5.000 Vinh Hao Mineral Water is containing 1500ml Bottle- VND high levels of bicarbonate (HCO3-)7.500 Antacids, reduces the acidity of the stomach, reducing gastric stock mercy and flatulence Made in: France A pure water discharged from Alpes mountain. Experiencing 15 years, the Pet 500ml- VND 27.000 Evian making process is due to the Pet 1500ml- VND 54.000 moisture from the melting of mountain glaciers and the rain dripping at Alpes mountain. Participating Vietnamese Market: 1990 Pure Clean Water 500ml Bottle- VND 3.500 1500ml Bottle- VND 7.000

f) Public In March 28th 2015, SPV has sponsored for free treatment for poor people program held by Alobacsi group in Ba To,Quang Ngai province. Alobacsi group is a non-profit organisation of medical human resource belongs to Hanh Phuc Communication JSC, including many doctors, nurses, physicians who are concern to the health of Vietnamese people. SPV uses their Aquafina product to serve the breakfast for all patients and Alobacsi group throughout the program (Alobacsi, 2015). This activity proves that SPV concerns to the community and always try to contribute as much as possible.

II.

Macro Environment

a) Demographic environment The Worldometers (2014) reports that the population in Vietnam is nearly 93 million in 2014 and this number is forecasted to rise stably annually. Being ranked the 14th most populous country in the world, Vietnam is a strong human resource with the young median age. The percentage of urban people grew steadily from 1% to 2% every year so Vietnamese cities are big market of convenient daily used items, such as wise bottled mineral water. Bottled mineral water brands are targeted to young people, with active and modern life in Vietnam cities and be aware the importance of using clean water. It occurs gradually in daily life activities of Vietnamese such as playing sports, travelling and enjoying in conferences. In these brands, Aquafina of SPV is building a reputation by the intelligence in making sure the product quality and choosing well-designed packaging to attract their customers. b) Economic environment Pham Gia Khiem (2009), Chairman of the National Committee for International Economic Cooperation of Vietnam emphasized that accessing international economic organizations such as WTO, ASEAN, APEC and ASEM has removed the trade barriers and reduced duty quotas. As a result of attracting foreign corporations and getting more FDI, Vietnam has become a high competitive market between companies in the same production field. To illustrate, market research analysis of Nielsen company (2012) reports that 70-80% of bottled water market is of foreign manufacturers that reflect severe competition between foreign and local companies (Brands Vietnam 2012). Furthermore, because of distribution capital ineffectively, inflations that affect negatively to investing and accounting activities in Vietnam, are big threats to foreign company such as SPV (Ling, F. and Hoang, V. (2010). c) Political environment Vietnamese government encourages free trade to develop economy. The rapid development that results from free trade in Vietnam not only change the living standard of Vietnamese, but also change the legal system of economy and trading to adapt to the moving of global economy (Pham Thi Hong Diep 2013). New changing in tax and corporation regulations will impact on business activities of local and foreign companies, include SPV, so companies requires the flexibility in finding appropriate operation methods to local legal conditions and their development direction. d) Natural environment Vietnam locates on Southeast Asia within the tropical belt of half-bridge. The tropical weather in Vietnam is high temperature and humid that is favourable condition to develop bottled water brands. Especially in hot seasons, consumption volume of bottled mineral water increased significantly from 30-40% (Baobinhdinh 2015). Furthermore, global pollution affects negatively to Vietnamese natural environment is essential to be mentioned. Vietnam has a long coastline but the mainland is encroached seriously by global warming and there is a gradually rise in temperature annually. Hence, Vietnamese people very focus on brands that have environmental sustainability strategy (Trinh NT, 2014). PepsiCo is one of the most famous companies in this area because of for many environmental achievement such as Eco-Fina bottle that was introduced in USA in 2009 which has 50% less plastic and 100% recyclable, and plant-based bottle called PET that is fully renewable resources (PepsiCo 2011). RMIT University | MKT1205-MARKETING PRINCIPLES 15

e) Cultural environment There is not any abstention in open ideological culture in Vietnam about foreign bottled water products. Additionally, there are many Western cu...