FINAL REPORT - GROUP 2

Vietnamese usually drink for two main reasons, one is forrelaxing and another is for business purposes.When conducting a survey on a group of people aged 22-40 about using alcoholicbever

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS AND FINANCE HO CHI MINH CITY

- -COUNTRY NOTEBOOK

FINAL ASSIGNMENT Lecturer: Dr Le Nguyen Hoang Subject: International Marketing - MKT1106E.B10E

Ho Chi Minh City, January 10 th , 2022

TEAM MEMBERS

TABLE OF CONTENTS

I Overview 1

II Cultural analysis 2

1 History 2

2 Climate 2

3 Family 2

4 Political 2

5 Legal 3

6 Group behavior 3

7 Conclusion 4

III Economic analysis 4

1 Introduction 4

2 Population 4

3 Income 5

4 Communication system 6

5 Channels of distribution 6

6 Media 7

IV Market audit and competitive market analysis 7

1 Evaluation of the product by the intended market 7

2 Evaluation of the target market 8

V Preliminary marketing plan 10

1 Targeted market 10

2 Targeted customer 10

3 SWOT analysis: 11

3.1 Strengths 11

3.2 Weaknesses 12

3.3 Opportunities in the Vietnam market: 12

3.4 Threats in the Vietnam market: 12

3.5 Recommending a SWOT solution: 13

4 Marketing Plan - Mix: 14

4.1 Product strategy: 14

4.2 Cost strategy 14

4.3 Distribution channel strategy: 15

4.4 Promotion strategy: 16

5 Financial projection for implementing the marketing plan 18

I Overview

Heineken International is a Dutch brewing company, founded in 1864, with headquarters

in Amsterdam Heineken is the third-largest brewer in the world Originating in theNetherlands, HEINEKEN is a family company with more than 150 years of history,producing and distributing over 300 brands of beer and fermented apple juice in more than

190 countries And the market that we choose to plan international marketing is Vietnam InVietnam, HEINEKEN produces and distributes beer brands: Heineken, Tiger, Amstel,Larue, BIVINA, Sol, Desperados, Affligem, and Strongbow fermented apple juice And theproduct here we choose to plan international marketing is Heineken beer

From the beginning with around 20 employees, today Heineken Vietnam has more than3,000 employees and become the second largest brewery in Vietnam Every year, HeinekenVietnam contributes significantly to the Vietnamese economy, accounting for 0.88% ofnational GDP

Logo:

Slogan: “It could only be Heineken”

II Cultural analysis

1 History

In the past, when the society was not as developed as it is now, the Vietnamese hadknown how to combine rice with many different fruits for fermentation to create alcoholicbeverages In addition, Vietnam is an agricultural country, the leading food is rice, so usingrice to ferment into alcoholic beverages has been popular a long time ago For that reason,the culture of using alcoholic beverages has also appeared for a long time in Vietnam Inmany traditional rituals of 54 ethnic groups in Vietnam, such as festivals, weddings, andfunerals, alcoholic beverages are indispensable drinks

According to the old concept, the culture of drinking alcoholic beverages of theVietnamese people has differences in each social class Farmers have a habit of drinkingalcohol with meals or at meetings with friends As for business people, they offer alcoholicdrinks to each other in discussions with partners to understand each other In particular, thealcoholic culture of the intelligentsia has a fascinating point They often drink alcohol toinspire composing literature, poetry, and science

2 Climate

Vietnam is a country with a tropical monsoon climate Therefore, Vietnam's climate istypical of the tropics The weather all around the year is in high temperatures and humidity.The average temperature of Vietnam ranges from 23°C to 32°C and increases from theNorth to the South The climate is a tropical monsoon climate in the North and has fourdistinct seasons: spring, summer, autumn, and winter The temperature in the South isrelatively stable and remains high all year round

With such a hot and humid climate all year, Vietnam's beverage consumption isenormous.According to the survey, soft drinks, especially beer, and alcoholic beverages inthe summer months or months with high temperatures, increase 2-3 times compared to theremaining months It can be seen that, with the hot and humid weather and hightemperature, Vietnamese people often have the habit of consuming soft drinks and beer tocool off

3 Family

Relationships in Vietnamese families are more complicated than those in Westerncountries The majority of families in Vietnam are extended families as many generationsco-live to take care of each other Family in Vietnam looks similar to a system of mini-society with the most elderly having the most vital voice and taking charge of mostactivities in the house Each family has its own rules and values that members shouldconform to The younger generation shows respect for the older generation and vice versa,and the old generation tolerates the young

In Vietnamese extended families, every weekend usually has a culture that all generations

in the family will gather together, eat together, and share funny stories that happened duringthe week Women and children often drink soft drinks in these gatherings, and men usuallyuse beer and other alcoholic beverages with their meals

4 Political

Vietnam is one of the more politically stable countries in South East Asia Vietnam’sleadership does not welcome political dissent Internal conflict is strictly controlled, andlarge-scale and politically sensitive protests are quelled Political Stability and Absence ofViolence/Terrorism: Percentile Rank in Vietnam was reported at 44.81 % in 2020,according to The World Bank collection of development indicators, compiled fromofficially recognized sources Vietnam has benefited from its stable government and socialstructure, making it ideal for capital investment

Political stability is one factor that makes Vietnam an attractive market, attracting foreigninvestors to invest in Vietnam In addition, it also promotes business development.Enterprises investing in Vietnam do not have to worry too much about political instability,they can focus on their business activities Moreover, political stability also increases theconsumer’s consumption

5 Legal

According to Vietnamese law, alcoholic beverages are goods had to pay specialconsumption tax Special consumption taxpayers are organizations or individuals thatproduce or import those goods Currently, the tax on alcohol and beer in Vietnam is 65%and accounts for about 30% of the retail price, while in many other countries, the tax rangesfrom 40% to 85% of the retail price The Government of Vietnam is currently proposing toincrease the special consumption tax on alcohol, beer, and tobacco products to protectpeople's health and increase the government's budget

6 Group behavior

Drinking alcohol baverages has been a great culture of Vietnamese people for a longtime It is said that “Betel is the beginning of the story, the cup of wine or beer is thebeginning of the fun.” This cultural feature is also evidence for the potential consumption ofbeer in Vietnam

As reported by a survey of the Ho Chi Minh University of Education, most young people

in Ho Chi Minh city agree that drinking beer is a common way to build and maintainrelationships in Vietnamese culture In Vietnamese culture, when you have just madefriends with someone, then going out to drink beer with that person will be one of the ways

to make that relationship closer Or when they meet an old friend Vietnamese people oftenchoose to drink beer together to reconnect that relationship Beer gradually becomes anindispensable drink in meetings with friends In Vietnam, drinking beer has become a way

of communication for modern young people, a feature when socializing, not just a beverageanymore

In addition, Vietnamese people often drink beer on special occasions such as weddings,birthdays, holidays, vacations, weekends, or whenever they have time to gather It isbelieved that drinking beer on these occasions is the best way to express their happiness.Not only on special occasions, it is not difficult to see that Vietnamese people drink beerboth when they are happy and when they are sad A group of people sitting on a plasticchair with a bottle of beer in their hand and along with it is the unique culture slogan “Mot,

hai, ba, do! has become a familiar image in foreigners' minds whenever they visit localbistro in Vietnam Vietnamese usually drink for two main reasons, one is forrelaxing and another is for business purposes.

When conducting a survey on a group of people aged 22-40 about using alcoholicbeverages, nearly 80% of the survey group drank beer and other alcoholic drinks, and thepercentage drank only beer was 75% More than 1/4 drink beer at least once a week, andmore than 20% drink more than once a week That is a reason why Vietnam is one of thelargest beer markets in the world When the world beer market is relatively saturated withconsumption growth of about 1% per year, the Vietnam beer market has nearly tripled in theperiod 2010 – 2019

7 Conclusion

We can see that using beer and other alcoholic beverages has appeared for a long time inVietnam Gradually drinking beer has become a typical culture of Vietnam on specialoccasions such as holidays, new year, weddings, birthdays, or every weekend In addition,with high temperatures and hot climate all year round, beer is also used as a commonbeverage to cool off Sometimes people drink beer just because they feel thirsty or tired, anddrinking beer makes their spirit more energetic Although beer is a relatively high taxeditem in Vietnam, this does not impact beer consumption in the Vietnamese market.According to data released by the Ministry of Health, the percentage of Vietnamese peoplewho drink beer and other alcoholic beverages is among the highest in the world, with morethan 80% of men and nearly 12% of women The rate of beer and alcoholic beverageconsumption in Vietnam increased beyond all expectations when in 2018, it reached nearly4.7 billion liters of beer In addition to the enormous annual beer consumption, politicalstability is also one of the factors increasing this consumption Thereby, we can see that thealcoholic beverages market in Vietnam is very potential

III Economic analysis

1 Introduction

Some brief information about Vietnam's economy Thanks to economic reforms in 1986,combined with favorable global trends, Vietnam has rapidly grown from one of the poorestcountries in the world to a lower middle-income country within a short time From 2002 to

2020, GDP per capita increased by 2.7 times, reaching nearly 2,800 USD Also, during thisperiod, the poverty rate (according to the standard of 1.9 USD/day) dropped sharply frommore than 32% in 2011 to less than 2% Thanks to a solid foundation, Vietnam's economyhas shown remarkable resilience in times of crisis, most recently the COVID-19 pandemic

In 2020, Vietnam is one of the few countries that recorded positive GDP growth when thepandemic broke out Vietnam's shift from a centrally planned to a market economy hastransformed the country from one of the poorest in the world into a lower middle-incomecountry Vietnam now is one of the most dynamic emerging countries in East Asia region.Vietnam is setting more ambitious development visions, aiming to become a high-incomecountry by 2045

2 Population

According to the latest figures from the United Nations, the current population ofVietnam is 98,580,201 people on January 8, 2022.

In 1999-2009, the average annual population growth rate was 1.2%/year, a decrease of0.5%/year compared to 10 years ago and the lowest rate of increase in the past 50 years Inthe 2011-2013 period, the average annual population growth rate, although decreased, wasstill at a high level of 1.05% With a large population size and high population growthmomentum, our population will continue to increase until the middle of the 21st century,with more than 100 million people It will be in the group of 10 countries with the largestpopulation in the world

As of early 2022, Vietnam has the following age distribution:

-The number of people under 15 years old accounts for 25.2%

-The number of people between 15 and 64 years accounts for 69.3%

-The number of people over 64 years old accounts for 5, 5%

 Vietnam is one of the 15 most populated countries in the world, large population canincrease the consumption of goods in the market, especially in the field of FMCG (Fastmoving consumer goods) and F&B (Food and Beverages) In addition, Vietnam is in theperiod of “golden population” A prominent feature in the "golden population" period is thatthe population from 15 to 64 years old accounts for a high proportion, currently accountingfor about 69.3% of the total population In which, the number of people between the ages of20-50 years old accounts for more than 50% of the population, this is the age group thatregularly uses alcoholic beverages  Segmentation of potential customers for Heinekenbeer products

3 Income

The average income in 2020 will reach about 4.23 million VND/person/month, downabout 2% compared to 2019 However, in the period 2016-2020, the average income percapita/month increased by 8, first% By region, the average income in urban areas is 5,538million VND/person/month, nearly 1.6 times higher than in rural areas

According to Boston Consulting Group, reports Nikkei Asian Review, Vietnam currentlyhas the fastest-growing middle class population in Southeast Asia With 56 million people

in the middle class, Vietnam is forecast to jump up from the current 26th position to 18th inthe global ranking of 30 economies with the largest middle-class populations A WorldBank report recently released shows that the Vietnamese middle class has been expandingrapidly with 1.5 million people each year in recent years Market research firm Nielsen hasestimated that the number of middle class Vietnamese will reach 95 million by 2030

 Vietnam's fast-growing middle class is an important indicator for Heineken beerproducts Because Heineken beer is a product of the high-end segment, the customersegment that Heineken Vietnam wants to target is the middle and upper class in Vietnam.With the rapid growth of the middle class in Vietnam, it can be seen that Heineken beerproducts will have many opportunities to develop in this market

4 Communication system

Common communication systems in Vietnam include: internet, wireless networks,electronic mail, smart phones, social networks

There are 68.17 million people are using internet services in Vietnam

There are 65 million Vietnamese are using social networks in 2020

There are more than 145.8 million mobile data network connections in Vietnam

 The communication system in Vietnam is quite developed, with more than 70% of thepopulation in Vietnam using the Internet and popular social networks This creates favorableconditions for marketing activities in Vietnam We can leverage the communication system

to create messages that are shared with a target market, create effective marketingcampaigns, resonate with target audiences and persuade people to make a purchase, buildand maintain relationships with customers

5 Channels of distribution

There exist many different retail channels in Vietnam They are traditional distributionchannels including markets and grocery stores and modern distribution channels includingsupermarkets and convenience stores, and e-commerce channel

According to statistics of the Domestic Market Department (Ministry of Industry andTrade), there are about 8,660 markets, 800 supermarkets, 168 trade centers of all kinds andmore than 1 million household grocery stores in Vietnam

The number of mini supermarkets and convenience stores is constantly increasing.Currently there are more than 1,000 convenience stores The model of convenience storesand mini supermarkets has undergone significant changes over time First appeared in theVietnamese market about a decade ago, this model has really attracted the attention ofconsumers and is gradually replacing the traditional type of grocery

Due to the impact of the Covid-19 pandemic, e-commerce has experienced dramaticgrowth However, modern retail channels only meet 25% of the needs of people, while thetraditional distribution channels are responsible for the other 75% And also due to theimpact of the Covid-19 pandemic, consumers are changing their behavior, which isswitching from shopping at traditional markets to e-commerce Although the traditionalretail channel accounts for 74%, the growth rate is only 1%, while the modern retail channelaccounts for 26% of the market share but is growing in double digits at 11.8% per year

 Retail channels in Vietnam are very developed The number of retail channelsavailable in the market is very large, including traditional distribution channels and moderndistribution channels Retailers serve as an important distribution channel for goods fromproducers The more retail channels, the easier for consumers to get the product With alarge number of distribution channels available in the market, it’s will not be too difficult tobring the product to consumers In addition, having many distribution channels will createprice competition Retailers will compete with each other to offer the best price to theircustomers so that customers can buy your products at the best price In addition, you can use

these retail channels as an marketing channel by using right placement, banners,advertisements, offers, and other strategies to increase sales in these retail stores.

According to statistics in June 2021 of NapoleonCat (a tool to measure social networkindicators), the total number of Facebook users in Vietnam is nearly 76 million people,accounting for more than 70% of the national population, increased by 31 million userscompared to 2019 and still leads the list of popular social networks in Vietnam

According to the latest report published in October 2021 by We Are Social, the number

of TikTok app users over 18 years old in Vietnam is 39.65 million people, accounting for40% of the national population, which has increased by more than 5.4 million users in ashort time.The age of tiktok users is mostly young generation who from 18-35 years old

 These figures can prove that social media has developed very strongly in Vietnam inrecent years This will be an opportunity for Heineken Vietnam to take advantage of thesepopular social media channels to carry out marketing campaigns with various purposes such

as increase brand awareness, reach target customers, enhance brand loyalty, increase sales,directly interact with customers and also enables them to directly interact again In addition,

if taking full advantage of social media, we can have a lot of data about customers and wecan use this information to make more marketing ideas

IV Market audit and competitive market analysis

1 Evaluation of the product by the intended market

In term of product quality, the key factor that makes Heineken's success worldwide is thesuperior and consistent quality of the products in any country To do this, Heineken alwaysadheres to a series of strict regulations on pure water, premium ingredients, productpackaging… Along with that, quality assurance processes are applied at all Heinekenfactories worldwide In Vietnam, Heineken beer is produced with the best ingredients fromEurope under the strict supervision of quality and technology by the global Heinekencorporation The Heineken brewery of Vietnam Brewery Co., Ltd operates underinternational quality standards ISO 9001, ISO 14001 and ISO 22000, ensuring that each can

of Heineken beer delivered to consumers is strictly controlled from the production of cans

to the final product

 Heineken's quality criteria are completely consistent with the quality criteria inVietnam

Regarding the taste of Heineken beer, Heineken beer has a mild sour taste, a little sweetand has a characteristic aroma In general, the taste of Heineken beer is not too differentfrom other beers in Vietnam So Heineknen beer tastes quite suitable for the taste of

Vietnamese people However, the ingredient that creates the unique taste of Heinekne beer

is A-Yeast, which is an exclusive yeast found only in Heineken beer This yeast that makesHeineken beer different from other beer And when launched in Vietnam market, thisunique taste has made a strong impression on Vietnamese consumers

Vietnamese market consumers quite like the typical taste of Heineken beer

Beers in Vietnam have an alcohol level about 1% to 8% The alcohol level of Heinekenbeer is 4% to 5% depending on the type of beer This is also quite consistent with the beermarket in Vietnam

Regarding product packaging, when developing in Vietnam market, Heineken keeps itsproduct packaging design Heineken beer products in Vietnam market have the samepackaging as Heineken beer products in the international market This not only does not loseHeineken's competitive advantage, but also makes a strong impression in the minds ofconsumers by green bottle with red star

The price of Heineken beer on the international market is $0.817/can When developing

in Vietnam market, Heineken still maintains the same price, Heineken beer in Vietnammarket is priced at 18,000 VND/can Since Heineken beer is a high-end beer, Heineken'starget customer segment in Vietnam is middle-class and upper-class in Vietnam, so despitethe high price compared to other beers, This also does not affect the sales of Heineken beer

in Vietnam market, because middle and upper-income people in Vietnam are willing tospend a higher amount than usual to own Heineken beer products

In the international market, Heineken focuses on distribution to retail channels such assupermarkets and retail stores And this is completely suitable for the Vietnamese marketwhen retail channels in Vietnam market account for more than 75% of the distributionchannels in the market However, in order to match the consumption habits of Vietnamesepeople, we will need to have more development strategies in terms of distribution channels

as well as appropriate distribution channel management, such as focusing more ontraditional retail channels rather than modern retail channels and expand distribution on e-commerce channels, because e-commerce is rapidly developed in the Vietnamese market inrecents year

2 Evaluation of the target market

With business culture on the drinking table, Vietnam is one of the largest beer markets inthe world When the world beer market is relatively saturated with consumption growth ofabout 1% per year, the Vietnam beer market has nearly tripled in the period 2005 – 2019.According to Euromonitor data, in 2005, the total beer consumption in Vietnam was justover 1.2 billion liters with the average consumption volume of 14.74 liters / person / year In

2019, beer consumption was 4.9 billion liters, growth rate made up for 18% compared tothose of 2015, with an average consumption of 50.88 liters / person / year

The beer brands’ coverage and consumption tended to be divided by region Specifically,Sabeco dominates the South, Carlsberg mostly presence in the Central region, Habeco is themarket leader in the North and Heineken has wide coverage in the Central and South