Marketing and communication plan for G7 2 in 1 instant coffee

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TRNG I HOC M TP. HCM UNIVERSITE LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

ECONOMICS & MANAGEMENT
TA THI NINH THU - BIEN THI HANG NGA


MARKETING & COMMUNICATION PLAN
For
G7 2 in1 Instant Coffee




MASTER PROJECT
MASTER IN MARKETING & ADVERTISING


Ho Chi Minh City
(2013)
2

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TRNG I HOC M TP. HCM UNIVERSITE LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL
ECONOMICS & MANAGEMENT
TA THI NINH THU - BIEN THI HANG NGA


MARKETING & COMMUNICATION PLAN
For
G7 2 in1 Instant Coffee

MASTER PROJECT
MASTER IN MARKETING & ADVERTISING

Tutor’s name: SERGE BYWALSKI


Ho Chi Minh City
(2013)
3



DISCLAIMER
Final thesis on “Marketing & Communication Plan for G7 2in1 Instant coffee”
is our research & insight with reference from the sources that was indicated in this
thesis. In present this thesis in partial fulfillment of the requirement for an Master of
Marketing and Advertising at the Solvay Business School Economics and
Management, we agree that this material shall make it freely available for
reference and study. It is understood that copying or publication of this thesis for
financial gain shall not be allowed.

4


ACKNOWLEDGMENT
This final thesis was completed with the guidance of Mr. Serge Bywalski, thank
you very much for your time and enthusiasm to give us comment and direction.
Take this opportunity, we would like to send our special thanks to family, our
friends for support and dedicated to help we complete this project. The result and
the feasibility of this project in reality are motivating us for knowledge that we gain
during the course.

5



TABLE OF CONTENT

Executive summary
1. Environment & Business context
1.1. Environment
1.1.1. Vietnam’s Gross Domestic Product (GDP)
1.1.2. Economic outlook
1.1.3. Regulatory
1.1.4. Political
1.2. Business context
2. Market Assessment
2.1. Our competitors
2.2. Market overview for instant coffee 2in1
3. Product overview
3.1. About product
3.2. Sales revenue
3.3. Market share
4. Marketing Activities since G7 2in1
(4)
was launch in 2008

5. SWOT Analysis of G7 2in1
6. Strategy plan for G7 2in1 to 2015



6


EXECUTIVE SUMMARY
This project was written after review and analyze the instant coffee market
was carried out in Ho Chi Minh City, Viet Nam by the end of February 2013.
The overall objective of this project was to evaluate the market potential and
to determine success factors to re launch our product, a G7 2in1 instant
coffee. In doing this we would like to achieve the following sub-objectives:
To determine why G7 2in1 is not successful when first launch in 2008, to
determine the success factor of the biggest competitors of Nescafe Cafeviet
2in1 and to recommend the strategy in marketing and communication plan
to positioning G7 2in1 instant coffee in Vietnam market. With the growth of
12,7% in consumption of instant coffee to 2015, there is a potential market
as consumers who tend to find the convenient things. There are currently 2
big brands for instant coffee in the market that include Nescafe (Nestlé); G7
(Trung Nguyên) which have 2in1 sub brand (coffee and sugar only)
Nielsen Vietnam release the research in 2011 that G7 instant coffee place
the 1
st
ranking of Vietnam market with 38% market share, second is
Vinacafe with 31% and third is Nescafe 27% and other research of Kantar
World panel on consumer buying behavior showed that G7 is the most like
and buy brand. Average 10 people drink instant coffee using G7.
However under G7 brand there are G7 3ín and G7 2ín in which The G7 2in1

is nearly don’t have strong awareness of consumer, because the lack of
investment in to the marketing activities, the taste of the product is not
match with consumer and face with a very strong competitors is Nescafe
with sub brand is Nescafe CafeViet.
In exploring the weakness point of the product, we have given some
recommendations to
GROW MARKET SHARE & MARKET SIZE BY
INVESTMENT INTO SALES, MARKETING AND PR ACTIVITIES. PRIORITIZE
PROMOTION ACTIVITIES TO CREATE CONSUMER NEED.

1. Review by categorize and solidify and professional sales system with
coverage from city to urban area

2. Focus to build G7 2in1 with consistent message, firstly, it’s the real and
strong coffee and then it’s your right style
3. Prioritize to research and develop the new taste of G7 2in1 with “great taste
and differentiated”
7



4. Explore current need and define the important period of day when
consumer need coffee to develop new need for each segment and each
market

5. Focus on the strong point of product is “the real coffee of Vietnam” to
arouse the Vietnamese spirit. Vietnamese people using Vietnamese
Product

8


1. Environment & Business Context
1.1. Environment
1.1.1. Vietnam’s Gross Domestic Product (GDP
(2)
)


Table 1.1: Annual growth rate of Vietnam’s GDP - Source: Nhan Dan Online

1.1.2. Economic Outlook
The Asian Development Bank (ADB
(3)
) has revised down the Vietnamese growth
forecast for 2012 from 5.7% to 5.1% amid gloomy global economic outlook and
domestic vulnerabilities.

The country’s economic output is predicted to quicken to 5.7% in 2013 but still
lower than the ADB’s earlier forecast of 6.2% growth in April the lender reported.
The inflation rate is projected to be 7% by the end of 2012 and then accelerate to
9.4% by the end of 2013, due to higher global food prices and growing domestic
demand.
Official data released by the statistics office show that the Vietnamese economy
grew 5.4% in the third quarter, higher than the 4.0% and 4.7% expansion in the
first and second quarters.
1.1.3. Regulatory

Vietnam National Assembly review and approved Food Safety Law of:
55/2010/QH12 on 17/06/2010 and effective on 01/7/2011 that required
all
Ordinance on Food Hygiene and Safety No. 12/2003/PL-UBTVQH11 July
26, 2003 will expire after the Law on Food Safety in effect.
9




1.1.4. Political

The Eleventh Congress of the Communist Party of Vietnam in January 2011
called for a more comprehensive approach to the country's renovation,
decided to promote greater citizens' participation and unity within Vietnam, and to
engage proactively in international integration. The Congress re-affirmed
Vietnam's approach to state-led development, but also revised key policy
documents to place greater emphasis on market processes and non-state
ownership of economic assets.

1.2. BUSINESS CONTEXT
The Vietnam coffee market includes 2 segments: instant coffee and ground coffee.
From 2007-2010, total coffee consumption increased with a CAGR
(1)
of 8.9%.
Instant coffee sales volume - CAGR 2007-2010: 26.2%
Instant coffee has become highly popular in Vietnam as it offers a high level of
convenience and acceptable taste.

Table 1.2: Production and consumption of instant coffee in Vietnam from 2007 – 2010 Source- GSO – Unit: tonnes


Ground coffee sales volume - CAGR
(1)
2007 – 2010: -1.1%
18,739
28,141
31,400
44,660
16,330
23,549
30,627

32,825
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2007 2008 2009 2010
Production volume Consumption volume
Production vs consumption volume of instant coffee in Vietnam
10


The market for branded ground coffee witnessed small decline in the last three
years, mainly due to increasing competition from cheap unbranded products.

Table 1.3: Forecast consumption volume of ground coffee in Vietnam 2010-2015
Source: GSO – Unit: tones


Coffee consumption volume is projected to grow at a CAGR
(1)
of 8.4% for the next
5 years. In which, instant coffee is expected to grow faster than ground coffee to
meet the fast-moving needs of modern lifestyles. In 2015, the proportion of instant
coffee is forecasted at 58.8% of total coffee consumption

Instant coffee market - CAGR
(1)
2010-2015: 12.7%
The instant coffee will lead growth over next 5 years due to rising demand for
convenience. In addition, the taste of products in this segment now closely ambles
that of ground coffee.
35,353
44,252
39,214
33,360
36,267
29,361
38,486
35,065
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2007 2008 2009 2010
Production volume Consumption volume
Production vs consumption volume of ground coffee in
Vietnam
11

Table 1.4: Forecast consumption volume of instant coffee in Vietnam 2010-2015
Source: GSO, HSC estimates – Unit: tonnes

32,825
37,257
42,100
47,363
53,283
59,677
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 2011 2012 2013 2014 2015

Consumption
Consumption volume of instant coffee in Vietnam
12


2. MARKET ASSESMENT

Product portfolio of G7 instant coffee

G7 is the master Brand of Trung Nguyen Coffee. With sub-brand is G7, G7
Passiona, G7 ice back coffee. Under G7 there are G7 3in1 (Coffee, milk,
sugar) and G7 2in1 (coffee, sugar).

Picture 2.1: Product portfolio of G7 2in1

In analyzing the product category in both market size and growth, G7 2in1 instant
coffee at the Stars cycle that we decide to Prioritize to rebuild this product.


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Picture 2.2: BCG Matrix of G7 2in1 instant coffee

2.1. Our competitors

Question Marks


1. RTD Ca phe Tuoi 500ml
2. Legendee
Stars

1. G7 2in1 instant coffee
2. G7 Cappuccino instant
coffee
3. Passiona – Coffee for ladies

Dogs
1. Consider to kill or push

10 SKUs of ground bean
coffee
2. Consider to kill or push
10 SKUs of instant
coffee

Cash Cows
1. G7 3in1 instant coffee
2. Trung Nguyen ground bean
coffee

Strong coffee for bold
men
2 SKUs: 2in1 and 3in1
- Black iced instant coffee
with sugar
- Iced milk coffee
More delicious, stronger
coffee taste
3 flavors:
- Strong flavor: balance
between coffee &
milk.
- Stronger flavor : more
coffee, less milk, for
those who love real
coffee.
- Bold flavor: real
Black instant coffee
(no sugar, no milk) from

100% roasted coffee in
Vietnam, for people who
want to enjoy coffee in
their own taste: black or
milk coffee.
High
Low
Growth
Market share
High
Kill
Divest
Prioritize
in
v
e
st
14


Nescafe Cafeviet 2in1 is the biggest competitor of G7 2in1 for the time being.
Main target customers are young people. Nationwide distribution network.
Global marketing strategy.

The market is fairly concentrated as the 3 largest producers (now hold 93% of
market share.

Both Nestcafe Café Viet 2 in 1 and G7 2in1 all focus on the same market
segment. The difference between their product price is quite small at only 1-2%

No Company Brand Category
1 Vinacafé Biên Hòa
Vinacafé
Black coffee, white coffee (3 in 1) and
ginseng coffee (4 in 1)
2

Nestlé

Café Vit Black coffee (2 in 1)
Nescafé White coffee (3 in 1)
3

Trung Nguyen

G7
Black coffee (2 in 1)
,
white coffee (3 in 1) and Cappuccino
Passiona Coffee for ladies
4
Food Empire -
Singapore MacCoffee White coffee (3 in 1)
5
Green Highland
International Rock Café White coffee (3 in 1)

Table 2.1: top 5 competitors in the market

2.2. Market overview of instant coffee 2in1

Nescafe – Café Viet is place the biggest market size of café 2 in 1 with the
revenue in 2011 is 1,300 billion Vietnam Dong while G7 2 in 1 – Trung Nguyen
Coffee is only 18 billion Vietnam Dong. Currently, Nescafe is the leader of the
market with 49% market share (with sales revenue of 2,404 billion dong), second
15



is G7 with 26% (1,296 billion dong) and third is Vinacafe with 25% (1,200 billion
dong). There is a closed gap of G7 – Trung Nguyen and Vinacafe.


Chart 2.1: Market share of Instant coffee in the market


3. Product overview
3.1. About G7 2in1 vs Nescafe Café Viet 2in1

Picture 3.1: Product packaging of Instant coffee of Nescafe café

26%
49%
25%
Market share
G7 Nescafe Vinacafe
vs.
16




Criteria

G7 2in1

Nescafe Café Viet
Key message
Not only strong but also style
(Mnh cha đ, phi đúng gu)
Strong coffee for strong men
(Cà phê mnh cho phái mnh)
Product
features
Should be improved about coffee

taste
Strong coffee taste that won’t expect
in an instant coffee  Quite delicious
Product
diversity
1 SKU:
- Black coffee with sugar
2in1

2 SKUs:
- Black coffee with sugar 2in1
- Milk coffee with ice 3in1
Distribution
channels
High coverage Take advantage of huge business with
many brand name, thus Nestle had
high coverage, flexible policy
Brand
advantage
Great desire & passion Be famous in the world
Media
Still not focus on mass media,
follow to mother brand: Trung
Nguyen
Mass media, high frequency, young
images.
 Marketing campaign: Lowe
agency
 Pakaging design: Cowan
Promotion

activities
Less More

Table 3.1: Overview G7 2in1 and Nescafe Café Viet in the market







17




Table 3.2: Product price and packaging of G7 2in1 and Nescafe Caféviet 2in1



3.2. Sales revenue

Sales contribution of G7 2in1 in 2010 & 2011:
- In 2010: 1,4% of total instant coffee of Trung Nguyen
- In 2011: 1,08% of total instant coffee of Trung Nguyen

Year 2010 Year 2011

Chart 3.2: Sales contribution of F7 in 2010 and 2011



Category

Brand

Product
name

Quantity
Net
weight /
Box
Consumer
price /
Box (VND)
Consumer
price per
gr
Index
vs. G7
2in1

Instant
coffee
G7 2in1 Black coffee
with sugar
15 sachets
x 16g
240g 45,700 190 100%
Nescafe
Café Viet
Black coffee
with sugar
15 sachets
x 16g
240g 47,000 196 103%
Iced coffee
milk
12 sticks x
25g
300g 50,000 167 88%
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Chart 3.1: Sales revenue of G2 2in1 instant coffee and Nescafe Cafeviet 2in1


3.3. Market share of 2in1 instant coffee

Chart 3.1: Market share of 2in1 instant coffee in 2011

18
1300
112
25
1690
123
0
200
400
600
800
1000
1200
1400
1600
1800
G7 2in1 Nescafe CafeViet Khác
2010 2011
1%
91%
8%
G7 2in1 Nescafe Café Viet 2in1 Others
in billion Vietnam Dong
19

4. Marketing Activities of G7 2in1 when first launch in 2008 till now vs.
Nescafe Café Viet 2in1

Marketing Activities G7 2in1 Nescafe
Café Viet 2in1
ATL BILL BOARD


In 2009
Message:
1. Key message:
Strong is not enough, it’s
style (Mnh cha đ phi
đúng gu)

2.Sub message:
No one understand
Vietnamese as
Vietnamese people
(Không ai “Vit” hn ngi
Vit )



From 2009 to 2012
Message:
Strong Coffee for Bold Men

3D breaking surface by Café Viet
coffee glass on the most heavy
traffic street in HCMC

TVC None

1st TVC which mentioned a break
through taste you won’t expect in an
instant coffee, its taste will make
you surprise strong! Key message:

“Strong coffee for bold men” –
“Are you bold enough for it?”

After launching 2 years, the 2nd
TVC on air about the convenience
feature of instant coffee & key
message “Strong coffee for bold
men”. -
“Coffee so strong it will blow you
away”



PR

Short news + photo of new
product with key message:
"NOT ONLY STRONG
BUT STYLE"

- Angles: PR articles focus
on the advantages of G7

20


2in1 vs. Nescafe Viet


BTL



POSM for retailers
Training materials
T-shirt G7 2in1
Gift pack of G7 2in1 in Tet
2009



Visibility drive: on MT
channels, Nescafe Café Viet used
to many POSM in order to make
their product outstanding on
shelves. On GT channels, there
were many display campaign.
 Sales brief: they organized a
very big sales conference for sales
team.

 Sampling + Activation:
Nescafe Café Viet conducted many
wet samling to introduce the new
taste of a kind of instant coffee.

Tray & Bus sampling:

They created a world of the brand
experience in which men have to
complete ‘bold tasks’ to earn Café
Viet. Café Viet bus stopped at key
cities (HCM, Hanoi, Da Nang). Men
were invited to prove their strength
and earn a cup of coffee.
Activation booth at Malls:
The booth had games of strength
which men needed to win in and
earn samples for their In 2008, in
order to localized with Vietnamese
tastes & compete with R&G coffee,
Nescafe has been launched new
brand name – Nescafe Café Viet
with new flavor: Black coffee with
sugar.
Nescafe Café Viet is the only local
brand of Nestle group which is
localized specific for Vietnam
market
- Positioning: “Cà phê mnh cho
phái mnh” (Strong coffee for strong

men)
- Key message: “Bn đã đ mnh
đ th?” (Are you bold enough for
21



this?)
- Target consumer: Male, 18-30
years old, urban, ABC class,
dynamic, modern.
- Marketing activities: spend a lots of
money on TV channels, activation
activities in the supermarket, office
building, crowded area…group


5. SWOT Analysis of G7 2in1

 Low Product awareness of G7 2in1 is the “close point” of consumer
development, G7 2in1 need to increase the product awareness by
prioritizes to push up product consumption



Strengths

- Ready for challenge with any brand in the
pro-active position
- Vietnamese brand, thus understand

Vietnamese consumer deeply with our own
culture
- Good quality
- Strong distribution channel of Trung
Nguyen coffee ‘s image as pride of
Vietnamese to build up sub brand G7.

Weaknesses
- Product positioning is not strong
enough that cannot make the
differentiated
- Taste does not touch the consumer
- Lack investment for marketing
activities


Opportunities
- Big population in Vietnam, coffee
consumption can be consumed up to
90,000 ton/year that can help G7 to
increase numeric distribution
- Vietnamese product is supported by
Vietnamese people-
- Consumer habit: 68% of drink people
choose is coffee/ week
- 2in1 Category don’t have a lot of
competitors beside Nestcafe CafeViet 2in1


Threats

- Product awareness is very low
- Growing competitive pressure in
Vietnam coffee market, especially in
instant coffee category.

22







Chart Source: Household Purchase Panel for In-home regular consumption
6. Strategy for G7 2 in 1 in 2013-2015
Thúc đy
Objective:

GROW 120% REVENUE TO ACHIEVE, 2% MARKET SHARE BY INVESTMENT
INTO SALES, MARKETING AND PR ACTIVITIES. PRIORITIZE PROMOTION
ACTIVITIES TO CREATE CONSUMER NEED.

1. Review by categorize and solidify and professional sales system with
coverage from city to urban area
- Increase the coverage and product availability in whole system
- Display following standard, premium care service

2. Focus to build G7 2in1 with consistant message, firstly, it’s the real
and strong coffee and then it’s your right style
- PR the consistent message and print ad

- Maximizing the activities, festival occasion to promote the value of Brand
- Exploring image, story of influence people “Real man & style”

3. Prioritize to research and develop the new taste of G7 2in1 with “great
taste and differentiated”
- Research the current trend and future trend of consumer in drinking instant
black coffee
- Attractive packaging

4. Explore current need and define the important period of day when
consumer need coffee to develop new need for each segment and
each market
- Access to young generation: Students… to build the loyalty customer for
the future
- PR campaign to educate consumer with new style of drinking coffee
- PR the benefit and advance (health ….) when using product as compare to
other product

N=245
Total Awareness: 17%
Consideration: 9%
Unwareness: 83%
23



5. Focus on the strong point of product is “the real coffee of Vietnam” to
arouse the Vietnamese spirit. Vietnamese people using Vietnamese
Product

6. Target Audience and segmentation
- Man, from 18 – 35 years old
- Drink coffee daily
- Who want convenient coffee but still strong taste to keep them a full day of
energy
- Urban area

Segmentation: Demand of Convenience & Understanding about coffee

 In this above chart, segmentation of 2in1 instant coffee are belong to high
convenience & high understanting about coffee. We position our product G7 2in1
more modern which is suitable for young generation need convenient coffee &
have the same taste with ground bean coffee.
Trung Nguyen
ground bean coffee
Legendee
Tran Quang
Son Tung
Ground bean coffee
without brand name
G7 3in1
Nescafe 3in1
Vina cafe
Nescafe Café Viet
Ca phe
Tuoi
VIA
G7 2in1
High understanding
about coffee
Low understanding
about coffee
Low convenience

High convenience

24



7. Market and distribution channels
- Market: Vietnam
- Distribution channels:
 GT (General Trade)
 MT (Modern Trade)
 Key Account
 Anywhere got Nescafe Café Viet and G7 3in1, there got G7 2in1
instant coffee.
- Planning of product coverage: 100% point of sale of Nescafe Café Viet and
G7 3in1 will sell G7 2in1.


Key message


G7 2in1 is the Real and Strong Coffee match with consumer style

Social context:

- In the current development, to sell the product, the research agency has to
work so hard to find the need of customer and develop a product that can
sell to them. By that reason, lot’s of instant coffee in the market was made
by mixing coffee with other cereal or event chemical.

- A lot of Big & famous brand come to Vietnam with impressive PR campaign
like Starbucks, Coffee Bean, Gloria Jean ’s… that create the new trend and
influent young generation, they believed it’s can set their own style.

- The world needs to research for a new philosophy with the concept of
sustainable development, human orientation to the prosperity, happiness
and longevity, and coffee can fully become a means and method of
transportation concepts sustainable development become a reality, will
encourage, honor and development of human creativity.


HOW WILL WE DELIVER TO CONSUMER ?

G7 2in1 is the real coffee, not only strong and great in taste but also match
your style

1. Product:
25



G7 2in1 is unique and delicious instant coffee from the coffee beans are
selected carefully, filtered by talented hands under experience of coffee artists
and processed under Eastern mystical secrets
2. Production technology

Modern machinery with producing secret formula from Vietnam and Eastern

3. Packaging

G7 2in1 was pack in stylist and environmental – friendly packaging

4. Material resources

Number 1 material from Highland city of Vietnam, the land of Bazan with
standard UTZ, 4C

CORE VALUE OF G7 2in1

1. Product quality that include the material, manufacturing process, and
secret formula
2. Life style: Harmony with nature, Harmony with personality
3. Development of Vietnamese product: Good taste, unique flavor, a
product of Vietnam and “Vietnamese people, using Vietnamese product”

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