Corona Marketing Plan PDF

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2016 Corona Marketing Plan

Prepared by Wael Khaled Hussien Abd-Allah Farahat Islam Hamid Noha Sarwat Mohamed Shehab Supervised by Dr. Ashraf Talaat

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Executive summary

C

orona chocolate, is a heritage in Egypt, has seen major success in its first 50 years due to the company's unique business model of immersing guests in a cultural experience and social hub. Lately the company suffers from quality, marketing problems that affects its financial position.

External factors -macro and micro factors- to take into consideration during expansion include, most significantly, the economy and resection in foreign tourism, the regulations on new tariffs on imports, and a city culture that relates to the brand image and culture. The main competitors are few but well established, though te3ypically higher in price. Further important factors to combat include low brand awareness and infrequency of purchase. Communication objectives Corona's IMC strategy in Egypt over the next 12 months are as follows: 1. Build brand awareness to 30% of the national target market by using print, digital, and social mediums. 2. Build brand awareness to 70% of the Cairo and Alexandrina target market. This will be hastened through word of mouth generated by students. 3. To maintain a constant frequency with 4% of the national target market, social media will be used on a weekly basis to reinforce brand awareness and interest. 4. To reach 50% of the national target market with at least three exposures, advertising in print and digital mediums will be used, specifically around the times of events such as corona football cup for schools In order to reach Corona's target market youth, males and females, 6-20 years old, and located in capital cities, corona will implement a number of media strategies, including the use of: print media (newspapers: AL-AHARAM, magazines: MIKEY and SAMIR , ALSHBAB and NOS ALDONAI), and social media (Facebook and Youtube).This varied media mix will allow corona to obtain synergy, with broad reach and constant frequency on different platforms, reinforcing brand awareness and influencing interest and opinion. An initial budget of 20,000,000 EGP, or 15% of yearly projected revenue, will be necessary for initial brand building, but will be slashed to an estimated 5% in subsequent years with an emphasis on social media use. Monitoring effectiveness will involve primarily measuring receipt of promotional offers, inventory, and monitoring guest reviews and comments on networking sites.

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HISTORY

The Alexandria confectionery & chocolate company – Corona was established year 1919 by Tommy Khresto, to become the first Confectionary & Chocolate Company in the Egyptian market. The company was nationalized in 1963 & become the icon of the public sector in sweet snacks and soon it became close to all Egyptian consumers' hearts triggering desire. Throughout the years, Corona established for itself a solid platform becoming the "Quality Manufacturer since 1919". Corona then was privatized in 2000, bought by one of the leading private holdings that have diversity within the Egyptian Market & Beyond. Now, Corona Company is known with its nostalgic portfolio within many snacking categories with famous brand names like: Chocolate Rocket, Bimbo, Cocoa, Wafers, Biscuits, Candies, and Toffees & Gum. Portfolio 

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Chocolate:  Milk Chocolate And Hazelnut  Cooking Chocolate  Dark  Lite  Napolitan  Pocket  Rocket Biscuits:  Bimbo  Coconut Biscuits  Mary  Negrita  Vanilia Biscuits Cocoa Powder. Wafers:  Trick-Trak  Pocket Toffees and Gums.

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External analysis Macro analysis- PESTEL Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia, via a land bridge formed by the Sinai Peninsula. Most of its territory of 390,000 square miles lies within the Nile Valley of North Africa and is bordered by the Mediterranean Sea to the north, the Gaza Strip and Israel to the northeast, the Gulf of Aqaba to the east, the Red Sea to the east and south, Sudan to the south and Libya to the west. With over 84 million inhabitants, Egypt is one of the most populous countries in Africa and the Middle East, and the 15th most populated in the world. The large regions of the Sahara Desert, which constitute most of Egypt's territory, are sparsely inhabited. About half of Egypt's residents live in urban areas, with most spread across the densely populated centers of greater Cairo, Alexandria and other major cities in the Nile Delta. Key Features and benefits of Egypt  Understand how Egypt can be used to plan business investments or market entry through a holistic view of the country.  Gain an understanding of the political situation in Egypt, including key figures in the country and governance indicators.  Understand customer demographics in Egypt through analysis of income distribution and the rural-urban split, as well as healthcare and education.

Egypt Country Information Population

91.72 million (2016)

GDP

$330.78 billion (2015)

GDP growth

4.5% (2015)

Exports

$9920.88 billion (2015)

External debt

84.39 billion (31 December 2014)

Public debt

88% of GDP

Credit rating

B-

Life Expectancy

71

Income Level

Lower Middle

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Political environment The Egyptian Constitution provides for a strong executive. Authority is vested in an elected president who can appoint one or more vice presidents, a prime minister, and a cabinet. The president's term runs for 6 years. Egypt's legislative body, the People's Assembly, has 454 members, 444 popularly elected and 10 appointed by the president. The constitution reserves 50% of the assembly seats for workers and peasants. The assembly sits for a 5-year term but can be dissolved earlier by the President. There also is a 264-member Shura, which is consultative, Council, in which 88 members are appointed and 174 elected for 6-year terms. Below the national level, authority is exercised by and through governors and mayors appointed by the central government and by popularly elected local councils. In March 2007, Mubarak introduced several constitutional amendments that would increase presidential powers and, more significantly, ban any political parties based on religion, race, or ethnicity. The amendments were put to a popular referendum and, despite low voter turnout and boycotts by opposition groups, passed with 75.9% approval. The external financial situation remains healthy amid the good trend on foreign currency earnings and the increase in foreign direct investment fuelled by the privatizations. Debt service is low and Egypt is building up foreign exchange reserves. However, the fiscal deficit and public sector debt remain a source of concern. Controlling public spending and reducing the debt necessitates a spending overhaul that will take time. Regional conflicts and poverty have strengthened Islamist opposition movements. In this context social climate is tense and officials have exercised caution in pursuing reforms. The biggest and strongest aspects and plans include: The business climate has benefited from an active reform program and a regional economic boom. Egypt boasts diversified sources of foreign exchange (the Suez Canal, tourism, private transfers, and oil and gas exports). Foreign exchange reserves are high. The country enjoys the political and financial support of Western countries. Economical Environment In the past year, the cabinet economic team has simplified and reduced tariffs and taxes, improved the transparency of the national budget, revived stalled privatizations of public enterprises and implemented economic legislation designed to foster private sector-driven economic growth and improve Egypt's competitiveness. Despite these achievements, the economy is still hampered by government intervention, substantial subsidies for food, housing, and energy, and bloated public sector payrolls. Moreover, the public sector still controls most heavy industry. Tourism has become the single biggest foreign exchange earner. However, there is some concern that current unrest will impact tourism. The interim government announced an economic stimulus package amounting to $3.22 billion in August 2013. In October 2013, it was increased Page | 6

to $4.27 billion. The international economic downturn slowed Egypt's GDP growth to 4.5% in 2009, predominately affecting export-oriented sectors, including manufacturing and tourism. Unemployment is rising. In 2009 the government implemented a $2.7 billion stimulus package favoring infrastructure projects and export subsidies, and is considering up to $3.3 billion in additional stimulus spending in 2010 to mitigate the slowdown in economic growth. In September 2009 - Egypt was ranked among the world’s 10 most active reformers for the fourth time. Egypt made business start-up less costly, expedited the construction permit process, expanded the information available from the private credit bureau, and created commercial courts to speed up contract dispute settlements. Social Environment Egypt’s total population stood at approximately 80 million. Out of this approximately 90% are Muslims while the remaining are Christians. Most of the population inhabits the area near the NileRiver and almost half of Egypt’s population is urban, living in the densely populated cities such as Cairo and Alexandria. One of Egypt’s biggest socio-economic problems is the high unemployment rate which has been growing over the years. The unemployment rate, which has averaged more than 10% over a decade, increased to over 12% in 2005–06. With the population growing at 1.8% per annum, the economic growth of 4.4% is not enough to curb the unemployment rate. While the average growth in employed population during the last five-year period stood at 2.3%, the rise in unemployed population has been much higher during the same period averaging around 8%. The high rates of unemployment and population growth coupled with meager wages in most of the public sector companies contribute to the poverty levels, with close to 20% of Egypt’s population below the poverty line. A big challenge for Egypt in the near future will be to create jobs, as the population within the 20–45 age-group constitutes around 65% of the total population. The education indicators of Egypt project a poor image of the education system. Only about 58% of the population is literate and there is a big difference in the literacy rates for males and females. Male literacy rate is around 68%, while female literacy rate is just about 47%, indicative of gender disparity. The National Council for Women, a nodal government agency that works for the welfare of women in Egypt, aims to completely eradicate illiteracy among females. Technological Environment Egypt's IT spending is expected to increase from US$1.3bn in 2010 to US$2.1bn by 2014 and the Egyptian IT market growth is forecasted to remain below pre-economic crisis levels in 2010, but economic recovery, tenders delayed from 2009 and higher incomes boosted by pay raises for civil servants and other groups should help to keep sales on an upwards trajectory. A number of policies have been implemented to attract foreign investment in IT outsourcing, including local employment subsidies, lower corporate taxes and deductions for training costs. The Egyptian minister of state for administrative development has said that 200 government services will soon be available online through a new e-government portal. The portal will offer 70 services Page | 7

in both English and Arabic. According to the Ministry for Administrative Development, more than 20 government agencies currently offer services and licenses online. Egypt's computer hardware sales are projected at US$821mn in 2010 and are forecast to reach around US$1.3bn in 2014. Egypt's IT market will stay hardware dominated, with spending on PCs sustained by initiatives like the 'Computer for Every Student' and 'PC for Every Home' programs. Hardware accounted for an estimated 62% of Egypt's IT spending last year. Households account for 20-25% of unit sales, with almost 1-1.5mn households said to possess a computer at present. Overall spending on software remains rather low, which reflects the relative immaturity of Egypt's IT market. One market driver has been a significant fall in software piracy, with the illegal software usage rate, as measured by the Business Software Association, falling a further 1% to 59% in 2008. Table 1: PESTEL analysis Implications and importance Potential Relative impact Time Type Impact Frame Importance

PESTLE

Notes

Political

The recent direction of the government toward protecting the Egyptian production

Medium

Foreign trade regulations

Medium

24+

Positive Unchanged Important

Devaluation of the Egyptian pound gives the company an opportunity to Medium export

24+

Positive Increasing

Economic

Important

Important

Currency exchange problems

High

12 - 24 Negative Decreasing month

Critical

Hyper inflation

High

12 - 24 Negative Unchanged month

Critical

The change in life style toward more Medium healthy and green Socio-cultural

Technological

12-24 Positive Increasing month

The increase of birthrates last years in Egypt

High

Low R&D expenditure

Medium

0-6

Positive Increasing

Important

24+

Positive Unchanged Important

24+ Negative Unchanged Important

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Social media Egypt environment is not suitable for cultivating the coco beans which Environmental will lead to importing the raw material

High

12-24 Positive Increasing months

High

24+ Negative Unchanged months

Important

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Micro Analysis The market analysis The Middle East is one of the Top 10 largest confectionary markets in the world, in Egypt Chocolate sales have steadily grown, with a rate of 2.5 percent annually since 2001, with the market now 2015 valued at $382 million, $ 372.45 million in 2014, $ 363.14 million in 2013, $ 354.06 million in 2012 and $ 345.21 million in 2011 with the same proportion. Egyptian Chocolate market sales have steadily grown, with a rate of 2.5% annually since 2001, with the market now valued at $382 million.

Market Growth 390 382

380 372.45

370 363.14

360 354.06 350 345.21 340 330 320

2015

2014

2013

2012

2011

According to the chocolate Market studies in Egypt we found that: 

kraft owns 47% market size, Mars owns 26%, Nestle owns 10% and others including Corona owns 17%.

Market Share 17 47

10

26

Kraft 47

Mars 26

Nestle 10

Others 17

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Chocolate market in Egypt is divided into two types and produces high quality cocoa and chocolate regular distributed in weddings and produced from imported cocoa butter substitutes. The average daily price of the cocoa trade to 2.819$ per ton in January 2014 compared to 2.825$ per Ton in the forthcoming December 2013 to decline by $ 6, according to the report of the International Cocoa Organization for the month of January. According to Chairman of the Export Council regular chocolate get a larger percentage of sales, due to the weddings use because they are inexpensive compared to the luxury chocolate. "Covertina" chocolate company acquires 40% of regular chocolate produced from cocoa butter substitute sales, in addition to other companies such as Al-Horya, AlHorya 2000 and Soiza as best seller in terms of quantity. Chocolate importing volume is weak, because the imported items, especially from Switzerland, very expensive. According to the head of the Division of sweets Chambers of Commerce Federation Salah Abed, no accurate data on the Egyptian market Cadbury" and "Mars." sales acquires the largest volume of sales in the Egyptian market compare to local brands The head of sweets Division of the Chamber of Food Industries Federation of Industries Hassan Fundy, said that "Cadbury" and "March" dominate more than 95% of chocolate sales of high-quality, ranging prices of the piece between 2 to 5 pounds, and own a higher level of efficiency, technical and size great publicity, is not available in local companies.

Competitor analysis Kraft foods Kraft Foods Egypt is part of Mondelēz International group of companies. Its presence in Egypt dates back to 1998 as an importer of global products. The company globally and locally grew through strong acquisitions. The big acquisition came in the year of 2010 when Kraft Foods globally acquired Cadbury to be part of the Kraft Foods family all around the world. Currently, we have in Egypt 4 state-of-the art production factories; with operation focus on 4 categories and 9 brands. Kraft Foods Egypt is the market leader in Chocolate, Gum, Candy, Powdered Beverages, and one of the major players in Biscuits. Their local world-class manufacturing capabilities and local market expertise produce Egypt’s favorite and leading snack foods.

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Kraft Foods net revenues rise from $11.5bn to $13.2bn worldwide.Kraft Foods Egypt joins 30,000 employees from 60 countries in volunteering to fight hunger. Products          

Cadbury Dairy Milk. Flake. SMS. Moro. Lunch Bar. Trident. Tuc. Tang. Halls and Clorets. Cadbury Hot Choco.

The resellers -distributors- analysis 

13 Show rooms 1- El-Giza Showroom Address: Commercial Passage, Misr Insurance buildings Beside Gize post office- Giza Square. 2-El-Alfy Showroom Address: 14, saray El-AzbakiaSt.El-Alfy, Down Town - Cairo 3-Roxy Showroom Address: 21, El-Sheikh AbulNourSt.Manshyet El-Bakry- Heliopolis. 4- Samcrete Showroom Address: 8, El-MansouriaRoadHaram- Giza 5-Assuit Showroom Address: YousryRagheb St. El-Awqaf Buildings, Assuit. 6-El-Hadra Show Room Address: 373, Canal El-MahmoudiaSt.ElHadra – Alexandria. 7-Camp Cezar Showroom Address:34, Memphis St., off Abdel MoneimSanadSt.Campcezar, Alexandria. 8-El-Manshia Showroom Address: 5, Elsahafast. Opposite to Medical Complex, Elmanshia- Alexandria. 9-Roushdy Showroom Page | 12

Address: 421, El-HorryaRoad,Roushdy- Alexandria. 10- El-Ma'moura Showroom Address:Commercial Market, beside Menosh Restaurant, Ma'mouraAlexandria. 11-Tanta Showroom Address: 17, Saeed St., beside Orphans House,Tanta. 12- Zakazik Showroom Address: Opposite to Faculty of Agriculture,Beside Youth Housing ComplexZakazik. 13-Suez Showroom Address: El-Sabah Valley,El-Gomhouria St., Suez 

7 Distributor o El Hurghada o Aswan o Quana o Sohag o Assuit o El Mania o El Baheraa

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Export

In the last 3 years, it expands new markets in Africa & in the Middle east. Participating in the international & local fairs opens new opportunities for buyers to explore the confectionaries products.

The customer analysis   

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32.7

All segments are fond of chocolate products specially kids & Females People seeks diversified portfolio of products to fit each taste. Most of Egyptian society segments are in need for a good quality of chocolate but with affordable price due to economic status (local brands are poor quality but cheap pric...