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MINISTRY OF FINANCE UNIVERSITY OF FINACE – MARKETING FACULITY OF MARKETING

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FINAL REPORT MARKETING MANAGEMENT MARKETING PLANNING FOR KITKAT SAKURA CHERRY BLOSSOM OF NESTLE COMPANY GROUP: SUPREME

Teacher: Mr. Dang Huynh Phuong Class: CLC_20DMA03 Student’s name: Huỳnh Thị Yến Nhi

2021001763

Trần Xuân Thống

2021001509

Nguyễn Đông Bảo Châu

2021006465

Nguyễn Văn Lắm

2021001609

Hồ Chí Minh City - 2021

EVALUATION BOARD NAME

MSSV

LEVELS OF COMPLETION

Huỳnh Thị Yến Nhi

2021001763

100%

Nguyễn Đông Bảo Châu

2021006465

100%

Nguyễn Văn Lắm

2021001609

100%

Trần Xuân Thống

2021001509

100%

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TABLE OF CONTENTS

EVALUATION BOARD .................................................................................................... i! TABLE OF CONTENTS .................................................................................................. ii! LIST OF FIGURES .......................................................................................................... iv! LIST OF TABLES ............................................................................................................. v! SECTION 1: EXCUTIVE SUMMARY .......................................................................... 1! SECTION2: SITUATION ANALYSIS ........................................................................... 2! 2.1 MARKET SUMMARY ............................................................................................. 2! 2.1.1 Market Demographics ........................................................................................ 2! 2.1.2 Market Needs ...................................................................................................... 3! 2.1.3 Market Trend ...................................................................................................... 3! 2.1.4 Market Growth ................................................................................................... 3! 2.2 SWOT ANALYSIS (NESTLE) ................................................................................. 3! 2.2.1 Strengths: ............................................................................................................ 3! 2.2.2 Weaknesses: ........................................................................................................ 4! 2.2.3 Opportunities: ..................................................................................................... 4! 2.2.4 Threats: ............................................................................................................... 4! 2.3 SWOT Analysis (KitKat) ......................................................................................... 5! 2.3.1 Strengths ............................................................................................................. 5! 2.3.2 Weaknesses ......................................................................................................... 6! 2.3.3 Opportunities ...................................................................................................... 6! 2.3.4 Threats ................................................................................................................ 6! 2.4 PRODUCT OFFERINGS .......................................................................................... 7! 2.5 KEYS TO SUCCESS: ............................................................................................... 7! SECTION 3: MARKETING STRATEGY ..................................................................... 8! 3.1. MISSION .................................................................................................................. 8! 3.2 MARKETING OBJECTIVE ..................................................................................... 8! 3.3 FINANCIAL OBJECTIVE ....................................................................................... 8! 3.4 SEGMENTATION .................................................................................................... 9! 3.5 TARGETING ............................................................................................................ 9! 3.6 POSITIONING ........................................................................................................ 10! ii

3.7 4P’s STRATEGY .................................................................................................... 10! 3.8 MARKETING PROGRAM .................................................................................... 14! 3.9 MARKETING RESEARCH ................................................................................... 15! SECTION 4: FINANCIALS ........................................................................................... 16! 4.1. BREAK- EVEN ANALYSIS: ................................................................................ 16! 4.2 EXPENSE FORECAST: ......................................................................................... 17! SECTION 5: CONTROLS ............................................................................................. 19! 5.1. IMPLEMENTATION: ........................................................................................... 19! 5.2. MARKETING ORGANIZATION ......................................................................... 19! 5.3. CONTINGENCY PLANNING .............................................................................. 20! 5.3.1. Difficulties and risks........................................................................................ 20! 5.3.2. Worst-case risks ............................................................................................... 20! REFERENCES ................................................................................................................ 21!

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LIST OF FIGURES Figure 1: Segmentation of the Kitkat cherry blossom ......................................................... 9! Figure 2: Kitkat cherry blossom in Japan .......................................................................... 11! Figure 3: Kitkat Cherry Blossom bar ................................................................................ 11! Figure 4: Packing of Kitkat Cherry Blossom in Japan ...................................................... 12!

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LIST OF TABLES Table 1: Break - even analysis........................................................................................... 16! Table 2: Expense forecast .................................................................................................. 17! Table 3: Action plan .......................................................................................................... 19!

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SECTION 1: EXCUTIVE SUMMARY Nestlé Vietnam Co., Ltd. was established in 1995, is a 100% foreign-invested company, under the Nestlé S.A Group. – is the world's largest food and beverage group, present in 191 countries with 328,000 employees globally, headquartered in Vevey Switzerland. Currently, Nestlé Vietnam is operating 04 factories producing food and beverage products located in Dong Nai and Hung Yen and employs more than 2,000 employees nationwide. All Nestlé factories in Vietnam are designed and built to meet the highest standards of quality consistent throughout the group, while always complying with Vietnamese laws on environmental protection, prevent pollution and applying initiatives to reduce emissions to the environment, save water, and aim at Zero waste in production (Path to Zero). In addition to the four factories mentioned above, Nestlé Group also has 02 La Vie mineral water factories located in Long An and Hung Yen, under the direct management of La Vie Vietnam Co., Ltd., a joint venture between Pierre Vittel of Neslté and Long An Trading Company. Kit Kat was first introduced as a new cake specifically for afternoon tea parties in England in 1935 by Rowntree. However, it was not until 1937 that people named this new product line Kit Kat . In 1973, Kit Kat first set foot in Japan. However, the initial impression of Japanese people about this confectionery product was not very successful. It was only at the beginning of the 1990s that Kit Kat suddenly became a "phenomenon" when it was chosen as a souvenir on the island of Hokkaido. And surprisingly, this cake is very popular with customers. In 1988, Kit Kat was acquired by the confectionery giant Nestle. Kit Kat realizes that the Japanese people are very fond of variety in flavors as well as respecting the traditional culture of the nation. This is the reason why after 2000, Kit Kat planned to "localize" its products to exploit the characteristics of each region. Up to now, Japan has had over 300 different Kit Kat flavors, this is a huge number showing the variety of flavors as well as the brand's influence throughout Japan. Recognizing the desire and need to enjoy more new Kit Kat flavors from Japan, Nestle Vietnam is about to bring a new product from Japan, the Cherry Blossom Kit Kat (Hạnh, 2020), (VietNamReport).

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SECTION2: SITUATION ANALYSIS Nestle is the world’s largest food and beverage company. Because they have more than 2000 brands and are present in 191 countries around the world. In Particular, Nestle has built 6 factories and had about 2000 employees in Vietnam.With a total investment of 520 million USD, Nestle not only represents long-term development in Vietnam but also wishes to improve the quality of life for generations of Vietnamese families.Although many brands have an negative effect of the Covid-19 pandemic, Nestle is again the world’s largest food company, holding onto the top seat in the industry as sales of its frozen staples like Hot Pockets, Stouffer’s and DiGiorno surge alongside coffee brands like Nespresso. Besides, Full-year revenue including currency fluctuations, acquisitions and divestments, grew 3.6% in 2020, ahead of Nestle's own guidance of "about 3%" and underlying sales growth of 1.9 % of Unilever. Moreover, they were voted as the top 03 Most Sustainable Enterprises in Vietnam in the field of manufacturing in 2019 and 2020 respectively. (About us, n.d.) (The World’s Largest Food And Restaurant Companies In 2020, n.d.) 2.1 MARKET SUMMARY In the context of the Covid-19 pandemic, Vietnam is one of the few countries in the world with positive economic growth (+2,91%). According to Phu Hung securities report, total revenue of food and beverage products reached VND 975,867 billion (+3.8% YoY) in 2020. And the contribution of the food and beverage industry to GDP was approximately 15.8%. Food and beverage spending currently accounts for the highest proportion in the monthly expenditure structure of consumers (about 35% of spending) (FOOD AND BEVERAGE INDUSTRY) 2.1.1 Market Demographics -

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Geographics Vietnam has a total area of 331,212 km2. Vietnam is a tropical country with steep terrain covering 3/4 of the land, low hills covering the rest, and the plain covering barely 1/4 of the land. Vietnam is divided into 3 regions: North, Central and Southern. Demographics According to the results of the 2019 Vietnam Census, 55.5 percent of the population is under the age of 35, and the average life expectancy is about 76 years, which is greater than other nations in the region with similar income. However, the population is increasingly aging. The middle class is forming; it presently accounts for 13% of the population and is predicted to grow to 26% by 2026. Vietnamese people have a per capita income of around 3,000 USD per year.

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2.1.2 Market Needs Convenience, ease of use, and purchase: Due to their busy lives, consumers desire a product that is simple to use and purchase. Vietnamese consumers like new cakes with attractive flavors, rarely appearing in the Vietnamese market: KitKat cherry blossoms have a unique and delicious flavor that is hard for anyone to surpass because of the strong sweet and sour strawberry flavor. strong. This is a breakthrough, and the flavor combination of strawberry, mochi cream and sakura sensation in every bite is also very delicate. 2.1.3 Market Trend In the Vietnamese market, young people often tend to buy Kit Kat as a present on Tet and Valentine's Day. Red is a symbol of good luck, so Kit Kat is an appropriate gift to pray for luck for friends and family. And on Valentine's Day, chocolate is a gift to show love to your lover, so Kit Kat is a perfect one. Vietnamese people's curiosity about new flavors of Kit Kat is also what has created a trend to seek out new flavors even if it has not been sold in Vietnam yet. 2.1.4 Market Growth Vietnam's economy is one of the world's fastest growing. The confectionery sector in Vietnam now has a significant market size and is growing at a rate of over 15% per year. Kit Kat has an opportunity to grow its market and revenues by expanding in emerging countries like Russia, China, or Brazil. Additionally, establishing companies in countries like China, India or Vietnam will provide the brand with cheap labor. 2.2 SWOT ANALYSIS (NESTLE) 2.2.1 Strengths: World Renowned brand: It is fortune 500 Company and is world’s largest food company measured by revenues (2014). Nestle does individual branding of their different food brands which help them in creating awareness about their various food brands. This also helps them because if a brand like Maggi is affected, it does not affect the sale of Coffee (Bhasin) Extensive distribution system: With its diversified product portfolio Nestle has been successful in penetrating Urban as well as rural markets. Locally adapted distribution methods & decentralization in supply chain, including street markets, mobile street vendors, door-to-door distributors & Medical outlets has helped the company in making its products visible in the market. If you just look at the Broad Product portfolio: Nestle has more than 8000 brands / products under its name which ranges from beverages like Coffee & Mineral water, Breakfast cereals, Soups & sauces etc. Under each product category Nestle has deep assortments to satisfy different needs and wants of the consumers. 3

Large workforce: Nestle has engaged 340000 odd global workforce who are continuously working to make its products available in every nook & corner of the world. R & D centers: Nestle has the world’s largest food & nutrition research organization, with about 5000 people involved in R & D, as well as corporate venture funds and research partnerships with business partners and universities. It has 21 research centers globally. Brand equity – As of 2016, it is the 37th highest rank brand in the world which says a lot about its brand equity. 2.2.2 Weaknesses: Brand structure: It has many brands under the same umbrella group so managing such large number of individual brands can create conflict Legal & consumer issues: Although Nestle is a global food giant it got into controversies over the years like Nestle baby formula boycott. Child labor by suppliers, Chocolate price fixing etc. which resulted in negative word of mouth. 2.2.3 Opportunities: Healthy breakfast – Maggi oats or other such healthy breakfast alternatives have a big future as most breakfast alternatives are heavy and people are becoming more health conscious. Nestle needs to do more market penetration with regards to its Cereals. Expanding market: Entering into other markets and penetrating more & more in the rural markets through its robust supply chain and transition of spots of unorganized business to organized one will lead to further expansion of the company’s business. Increasing Income levels: Due to stable political scenario, improved literacy rate & controlled inflation, disposable income of the people is increasing thereby resulting in upsurge in demand and changing their lifestyle. Strategic Alliances: Nestle is already engaged in partnerships with a number of major companies, such as Coca-Cola, and several others, opening doors of opportunities for the company. It is one of the main shareholders of L’Oreal, the world’s largest cosmetics company, so partnering with other food giants will help the company in further growth. 2.2.4 Threats: Competition in the market: With an increasing number of local and national players it’s becoming very hard for the companies to differentiate themselves from others. There is also a threat from counterfeit products destroying its brand image in the market.

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Price of commodities: Increasing price of commodities will result in further increase in the price. Further increase in price will result in decrease in sales, margins and brand switching. Buyers power: With a highly diversified consumer goods market where there are lots of brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a particular brand & hence results in brand switching where consumers get power to select a brand based on several factors like availability, reference group recommendation, preference & price. 2.3 SWOT Analysis (KitKat) 2.3.1 Strengths Unique offering: One of Kit Kat’s primary competitive advantages is its unique product. The chocolate-covered wafer is one of its kind and is loved by many. By the product that Kit Kat offers, it differentiates itself from notable brands like Dairy Milk (DARBINYAN) Unique way to open the chocolate – There have been campaigns which have been dedicated to opening the wrapper of a Kitkat chocolate and the sweet sound it makes. We are doubtful any chocolate has ever done that. This again created an excellent brand retention in the minds of the consumer Massive distribution – You cannot survive in the FMCG market without having a massive distribution. Kitkat has production in 16 countries and it has distribution in more than 100 countries across the world. Because it comes from the house of Nestle, which also has Maggi and Nescafe, the distribution receives a boost because of the sales channel already present for the other brands. Excellent tagline – “Have a break, have a Kitkat” is one of the most famous taglines a brand has ever had and Kitkat has owned it for several years. Kitkat even had a website where you could have a break by hitting mosquitoes and relaxing. Or it has images on its website which shows people just chilling out. The brand has evolved its marketing strategy around the tagline – That you should take regular breaks during the break, and you can have a Kitkat at such times. Quality management – Hardly will you hear any complaints about the quality of Kitkat Chocolates. The quality management is superior and the same quality is distributed across the globe making people fall in love with the taste and consistency of Kitkat chocolate. Deep pockets – Nestle has very deep pockets because of Nescafe and Maggi being cash cows in their arenas. You will not find a larger sold noodles brand than maggi and neither will there be a higher sold coffee brand. Thus, because of these deep pockets a lot of revenue is available for Kitkat to remain a star in the ever growing chocolate segment.

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2.3.2 Weaknesses Kit Kat's popularity has grown dramatically in Europe, but it is still relatively unknown in Asia, particularly in Malaysia's tiny towns and villages. As a result, Kit Kat's distribution plan to reach small towns and villages is weak, and pricing should be reduced because the residents are typically low-income earners. Packaging: For about sixty years, Kit Kat has not changed its packaging. Only some minor changes have been made to the red packaging, merchandising, and sales promotion of the chocolate. In order to keep customers interested all the time, it is crucial to come up with innovative ideas and go for what’s new and trendy. Breakage: Since Kit Kats are made of wafers, it breaks easily, so a lot of times, the consumer receives a broken chocolate Kit Kat bar. This leads to dissatisfied customers, thus, a decrease in sales....