HD Assignment 1 Kit kat PDF

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MKTG1205 – Marketing Principles MARKETING REPORT Subject Code

MKTG1205

Subject Name

Marketing Principles

Product

Green tea (Matcha) Kit Kat

Group members-StudentID

Pham Viet Hung-s3713453 Pham Thuy Vy-s3712628 Nguyen Huu Phan Trung Nghia-s3740867 Bui Tuong Van-s3740888 Le Hong Uyen-s3740992 Nong Tuan Vinh-s3740891 Thai Nguyen Hong Ngoc-s34740868

SGS- MKTG1205- Group 7- Marketing Report

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TABLE OF CONTENTS I.

II.

III.

IV. V. VI. VII.

SITUATION ANALYSIST__________________________________________3-4  About the company  Nestl- comes to Vietnam  Products MARKETING ENVIRONMENT_____________________________________5-7  Micro environment Customer Reseller Public Competitor  Macro environment  Demographic environment  Economic environment  Technological environment  Natural environment  Political/ Legal environment SWOT_____________________________________________________________8  Segmentation  Targeting  Differentiation  Positioning STDP___________________________________________________________9-12 CONCLUSION____________________________________________________12 REFERENCES__________________________________________________13-14 APPENDICES___________________________________________________15-16

SGS- MKTG1205- Group 7- Marketing Report

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I.

SITUATION ANALYSIST

1.ABOUT THE COMPANY Nestl- S.A was established in 1866 by a Swiss pharmacist Henri Nestl- with the headquaters located in Vevey, Switzerland. During the time from 1947 to 2010 Nestl- carried out many risky business investments and company mergers with other large companies to develop and expand the market, the most representatives are the investments in L’Or-al (1974) and the acquisition of Alcon Laboratories Inc. (1977). Currently, Nestl-- is the world leader company in nutrition, health and wellness with 418 factories located in 86 countries, 323.000 staffs in more than 189 countries, and 40 D&R centers across the globe. Nestl- owns about 2000 favorited brands whose extent from local to global and a very diversified business portifolio included Nestl- Waters, Nestl- Nespresso, Nestl- Health Science, Nestl- Skin Care, Nestl- Purina PetCare, Cereal Partners Worldwide, Baby foods, Chocolate & confectionary, Frozen food, Diary, Drinks, Food service and Ice cream (Nestl-). Nestl- also have strong supply chains from about 165,000 direct suppliers and 695,000 individual farmers around the world which can create plentiful of outstanding competitive advantages in the market. 2.NESTL8 COMES TO VIETNAM Nestl- the first time came to Vietnam in 1912 to open business office in HCM city and then, 80 years later Nestl- officially opened representative office in HCM city. Up to date, Nestl- is generating 6 eco-friendly and no-waste factories which own 2000 staffs across the country , representative offices in both Ha Noi capital and HCM city, and also own bottled water company La Vie under co-business form with the total amount of investment up to $520 million. The presence of Nestl- in Vietnam contributes many positive improvement for the community such as nutrition education for primary school students, encourages dynamic lifestyle especially for children from 6-17 years old, distributes more than 20.000.000 seedings, re-farmings in 20.000 HA of coffee plantations, trains for about 200.000 farmers and help them to improve their income 30%. September 2014, Nestl- Vietnam was recognized as eco-friendly business and sustainable business(2017) arcoding to Vietnam Chamber of Commerce and Industry and Vietnam environment association. 3.PRODUCTS Chocolate & confectionery is a large and favourited brand of Nestl- not only in Vietnam but also entire the world which includes many confectioneries made from chocolate mainly. Matcha Kitkat or Green tea flavour Kikat is a product line of this brand, and 2004 is the year that Matcha Kitkat was first introduced to the Japan market, then in Vietnam and many other countries later. Matcha Kitkat is a square milk chocolate bar covered by crispy wafer with green tea flavour, the basis Matcha Kitkat bar comprises of 2 or 4 smaller vertical bars with the first layer of matcha flavour, 2 layers of wafer and 1 of chocolate, and these small bars can be easily seperated just by a slightly break. Kitkat has a very cool and appealing package which is covered mainly by light green color and the image of sweet chocolate bar on it, moreover this type of package is also clean, glossy and easily to be opened. Thanks to the harmonious texture of Kitkat, eaters can enjoy the entire of taste included from matcha layer, wafer into chocolate layers. Kitkat has more than 200 flavours just only in Japan, and more than 300 flavours in the whole world, and Matcha Kitkat is one of the most special flavours. More than that, It also has a resonable nutrition ingredient which can help people to balance their daily meals. Matcha Kitkat is sold by single bar, 4 bar-package, 6 bar-package and 12 bar-packge.

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Product:

Nutrition ingredient facts per single bar:

Package:

Per: 100g Energy: 526kca/2209Kj Fat: 31.4g Protein: 6.2g Carbohydrates: 54.7g Total Sugars: 42.9g Sodium: 88mg

Per Serving: 17g Single bar

Energy: 90kca/376k Fat: 5.3g Protein: 1.1g Carbonhydrates: 9.3g Total Sugars: 7.3g Sodium: 15mg

8 bar-package

SGS- MKTG1205- Group 7- Marketing Report

12 bar-package

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II.

MARKETING ENVIRONMENT 1.MICRO-ENVIRONMENT  Customer

Vietnamese consumers has become more familiar with chocolate confectionery. As the strong spread of Western culture across Southeast Asia, Vietnamese consumers purchase chocolate products more frequently, especially on special occasions such as Valentine’s Day and International Women’s day. Moreover, according to Pham (2017), Lunar New Year and Valentine’s Days are the peak period for selling chocolate confectionery, because many consumers tend to purchase chocolate products as a gifts. Also, since more foreign brands accessed Vietnam, buyers’ awareness of global brands has also increasing [ CITATION Smi17 \l 1033 ] .As the result, in 2017, statistic shows that there is a growth of approximately 10% in the retail value of chocolate confectionery compare with prior year [ CITATION Pha17 \l 1033 ], meaning the great potential for chocolate products consumption. In addition, between the period 2015-2018, green tea flavor has become more and more popular in Vietnamese snack, chiefly in sugar confectionery. As the rising influence of Japanese cuisine, a lot of Vietnamese customers started to fond of this bittersweet flavor. Besides that, major population of Vietnam believed that green tea is a healthy ingredient which contains powerful antioxidant may lower the risk of cancer. Consequently, at the end of 2015, Nestl- Vietnam launched KitKat green tea to meet the market demand and immediately captured customer’s attention. This was a good signal for Nestl- to penetrate into Vietnamese confectionery market as its offering satisfied customer’s needs.  Reseller (marketing intermediaries) The rapid growth of convenience stores in Vietnam, especially in Ho Chi Minh city and Hanoi, have contributed to the greater performance of chocolate confectionery. Indeed, in 2016, more than 1600 convenience stores had been operating, giving Vietnamese customer a change to easily reach grocery food, including chocolate products (Pham, 2017). However, almost 70% of convenience stores’ owner are from overseas companies and they also introduce a wide range of international food brands into Vietnamese market. Therefore, Nestl- will face the threat of increasing the number of dreaded competitors.

[ CITATION Ema \l 1033 ] 

Public

Nestl are providing more nutritious foods and beverages for their customers, decreasing harmful ingredients and eliminating artificial colors (Nestl 2017-p30). In their 2017 annual report, Nestl stated that the company aims to improving the quality of life by researching and offering healthier food. In reality, by increasing the amount of cocoa and milk, Nestl tempted to reduce 7% in sugar level of KitKat without altering on taste. Moreover, the company set their goal by the end of 2020 to even reduce sodium level in their pro ducts by 10%. These changing efforts will also create an advantage for Nestl because people stop using high sugar level products which may lead to fatal diseases. 

Competitor

According to Vietnam News (2017), the Vietnam’s confectionery industry is forecast to earn an interest of 40 trillion VND (1.8 billion USD) in the next year. As a large company in Vietnam, Nestlcurrently has lots of opportunities and also face dread competitors including Mars and Hershey’s. Based on its tagline “Good Food, Good Life”, it can be said that the main goal of Nestl- is to bring

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nutritious, health and wellness to their customer. Also, Nestl- has more advantages than its competitors which helps the company to dominate Vietnamese market in the future. Competitor Mars Inc. Hershey’s -American brand - American brand -Family owned -Wide range of chocolate product Strength -Focus on nutritious product -Strong name and brand image -Strong name and brand image -Strong partnership (Starbucks, Coca-Cola) -Recalls chocolate bars in 55 countries -Has multiple long-term debts after plastic found in this product (in -Fake products, especially in developing countries like Vietnam 2016) Weaknesses - Using animal rennet in their products  Damage company image -Increasing market share -Products cocoa beans in new area -Growing pet food industry (India) Opportunitie -Expand dark chocolate products field for health benefit s -Create environment friendly packaging -Face intense competition -Tough competitors (Mars and -Stop creating new chocolate bars Nestle) -Most Hershey’s material come from since released Twix in 1979 Threats -Health awareness: people avoid local markets -High cost of material (sugar, milk, consuming sugar products cocoa bean) -Health awareness: people avoid consuming sugar products 2.MACRO-ENVIRONMENT  Demographic Environment The population density population is one of the crucial elements to defined the market. Large and increasing population creates a huge potential market for many businesses. Vietnam is known as one of the developing countries in Southeast Asia with the current population of approximately 96 million people and ranked 15th in the world (Worldometers, 2018). That would be an appealing and potential market for Nestle company in developing business and expanding sales market. Moreover, KitKat is a confectionery product of the Nestle company created for customers of all ages, but KitKat is most consumed by young customers(infoscout.co,2108). According to the population pyramid of Vietnam in 2018, more than a haft of Vietnam's population is working age from 19 to 60 years old. The increasing number of working age population also helps to expand the market. It is a golden opportunity for KitKat to increase product consumption level. More especially, shopping behavior and consumption of customers depend on the educated level. In Vietnam, the quality of education has been more advanced so that today's people have become highly educated. They tend to choose highquality goods and beneficial for health. Over 70 years of trying to eliminate illiteracy, Vietnam has become a highly educated country and health consciousness. PISA (Programme for International Student Assessment) in 2015 has declared the conclusion that Vietnam ranked 8th out of 65 countries.  Economic Environment Because of economic and political reforms under renovation, the economy of Vietnam has evolved. Since 1986, Vietnam's economy has posted (GDP) annual per capita growth of 5.6 percent faster than any other Asian economy apart from China thought war severely devastated it (McKinsey & Company, 2108). Vietnam's GDP in 2017 considered at 6.8 percent - fastest extension in the past ten years (World Bank, 2018). Vietnam's GDP growth rate has been rebounding and proves to be the more promising market for confectionery product such as KitKat as Nestle intends to sell. However, Nestl-

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has been facing a high market because Vietnam is an attractive market for many international companies come to invest. Furthermore, income can strongly affect the purchasing power of customers. According to Trading Economics, the average income for each person in Vietnam in 2017 was VND 4.12 per month. When the customer has a stable income, they tend to choose high-quality goods.  Technological Environment In the technological era, Vietnam is one of the countries in Southeast Asia have more than a haft of the population (81%) using social media for daily news (Saigoneer, 2018). That would be good news for Nestle company when they want to advertise their products such as KitKat in Vietnam. According to VnExpress International Vietnam has the seventh large number of Facebook user in the world. Moreover, the Nestle company have improved technology to reduce the amount of sugar in chocolate of KitKat (BBC News, 2018).  Natural Environment Vietnam's natural conditions are relatively good, at least the disaster occurred. State policies and local constraints on the environment is still at a low level, conducive to the use of the technology to bring high economic efficiency. Vietnam is an advantaged place for building the factory to manufacture products and also decreasing the import tax.  Political/ Legal Environment. Vietnam is tightening diplomatic relations with countries around the world (Hays, 2018). In economic reform efforts, the normalized of diplomatic relations with the United States and establish diplomatic relations with many countries has created more favorable requirements for foreign businesses. With a stable political environment would be an advantage to the Board of Directors of Nestle global investment review extends to Nestle Vietnam. Business laws against counterfeit production and trafficking are still feeble in Vietnam. That will cause a severe impact to the company when faced with the phenomenon of people selling the same products but cheaper.

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III. SWOT STRENGHT _ Good quality and trustworthy raw material sources, such as cocoa from Ivory and Malaysia (theguardian.com, 2013) _ Create by Nestle, a strong brand which is famous for its food’s quality and has high demand all around the world (Haseeb, 2015) _ Different flavors of Kit Kat in Vietnam. Green tea Kit Kat is the most popular one (Haseeb, 2015) _ Nestle has new products every year. In 2017, Nestle cut down sugar in their products and created the new “healthier” Kit Kat, which contains less calories than the original one (Katie, 2017) _ Easily be found from supermarkets (Coopmart, Lotte mart, etc.) to convenient store (Circle K, Big C, Ministop) _ Large market potential, especially in remote and rural areas (Pham, 2017) _ Vietnamese love to eat chocolate products, moreover, they love green tea flavor as they think it is good for their health (Pham, 2017) WEAKNESS _ Nestle Kit Kat has limited shelf live and cannot be stored for a long time (Haseeb, 2015) _ Kit Kat chocolate bars cannot be carried for a long time during hot days because their cover will melt, which cause differences for the customer. _ In remote areas there are still fake products that can strongly damage to the reputation of Nestle companies in Vietnam (Haseeb, 2015) _ Packaging of Kit Kat in Vietnam is not perfect because sometimes water comes into the Kit Kat and breaks the wafer (Hitesh Bhasin, 2018)

SGS- MKTG1205- Group 7- Marketing Report

OPPORTUNITIES _ Since 2000s, the green tea flavor has come to Vietnam’s market as a new trend and soon become more and more popular. The influences of Japanese culture and cuisine have had a substantial effect on supporting this trend. _ Vietnamese people believe that green tea is good for their health (Pham, 2017) _ Vietnamese consumers really enjoy sweet and chocolate products. The chocolate confectionery in 2017 recorded to raise up 10% compare to 2016 (Pham, 2017) _ In 2015, following the trend, green tea Kit Kat appeared and soon dominated the Vietnamese chocolate market by its tastiness and the rising preference of green tea flavor (Pham, 2017) _ At that moment, Nestl- catches the trend and provided green tea Kit Kat for Vietnamese people, which their competitors such as Dove and Mars have not done. _ Decreasing import tax (Pham, 2017) _ Abundant labor force (Pham, 2017)

THREATS _ Mars, Dove are some infernal competitors of Nestle in Vietnam _ Because raw materials that use for making Kit Kat in Vietnam is mainly taken from Malaysia (Cacao), so if there are natural disasters such as storm, it will cause a negative effect on Vietnamese Kit Kat market. _ Mars is performing a special plan to conduct seasonal products that can only buy on Christmas, such as Holiday Minis Mix Tree Gift Box and M&M’S Milk Chocolate Candies Yard. These products can become problems if Nestle does not have countermeasures for Vietnam (marspresskit.com)

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IV.

STDP

1.SEGMENTATION:

Geographic

Demographi c

Population density

high

low

Youngster (60)

Occupation

students/working

Working

retired

Income

pocket money/lowmedium income

Lifestyle



Eating out Shopping Like eating snack Interested in sweet taste and different flavor

Occasion

Behavioral

Rural

Age

   Psychological

Urban

·

Low-medium income

 

Eating at home Usually visit family and friends on special occasion

 

Eating at home Concerning more about healthcare

Holidays (Tet, Christmas, Valentine, etc.)

User status

Regular

potential

potential

Loyalty status

Medium

Low-medium

Low

Usage rate

Medium-Heavy

Less- medium

Less

Benefits sought

 

As ingredients, green tea KitKat is able to be added to the beverage Dessert decoration

2.TARGETING

 In Vietnam, nestle divides the customers into 2 groups: Business to consumers:

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The company aims at young people (under 30) with the low to medium income and are interested in green tea-flavored in the urban areas. Business to business The company decides to supply the product to the retailers, including convenient stores, grocery stores and supermarket.  Demographic - geographic segments are mainly implemented by Nestle in Vietnam in the current: Demographic segment Green tea Kitkat is served people of all the ages. However, the company aims to the youngsters (under 30) who have snack-eating habit (Vinaresearch, 2012). There is always a huge demand of eating snack for this group of people. Geographic segment The company attempts to distribute the product nationally. Yet it focuses on the urban areas because cities have the large population density. In the other words, the higher population density is, the higher products consumption is. Additionally, people living in the urban areas have a tendency to concern more their personal preference than those living in rural areas so that they are available to purchase what they l...