(TIỂU LUẬN) MARKETING PLANNING FOR KITKAT SAKURA CHERRY BLOSSOM OF NESTLE COMPANY

MARKETING PLANNING FOR KITKAT SAKURA CHERRY BLOSSOM OF NESTLE COMPANY... Recognizing the desire and need to enjoy more new Kit Kat flavors from Japan, Nestle Vietnam is about to bring a

MARKETING PLANNING FOR KITKAT SAKURA CHERRY BLOSSOM OF NESTLE COMPANY

EVALUATION BOARD

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!

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!

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!

LIST OF TABLES

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

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)

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

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

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

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

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

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

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

Corporate Social Responsibility: Kit Kat has been known for its weak implementation of

corporate social responsibility programs and, thus, received a lot of criticism for this However, it did start making efforts by changing to a reusable packaging by 2025

2.3.3 Opportunities

Expansion – For any FMCG company, more expansion means more revenue which in turn

means more profit The same is applicable for Kitkat The more it expands in developing economies the better it would be for the brand

Rural penetration – In India, China or other such Asian countries, rural penetration is yet to

be achieved and that is where Kitkat can do wonders by using its deep pockets and establishing itself in rural areas

Increasing chocolate contribution – Kitkat can launch more variants wherein the chocolate

contribution to the wafer chocolate combination is even higher thereby giving a richer taste

Healthy Snacks: Since the world is moving towards a more health-conscious society, Kit Kat

can introduce healthier options like low-calorie chocolate bars

2.3.4 Threats

Kit Kat prices have increased as a result of rising raw material, fuel, and dairy expenses,

as well as rising packaging and manufacturing costs The corporation shifts the pricing burden

to the consumers by downsizing packages in an imperceptible way, so consumers pay the same amount for less stuff

Contamination of the product will result in the brand being recalled This is due to the

weather or the workers' reckless attitude, as well as a quality check

Health Awareness: One threat that Kit Kat is facing is about increased health consciousness

among people Since Kit Kat has no healthy options to attract the health-conscious crowd, this remains an issue for the company

Competition: There is massive competition with established brands like Twix, Mars, and

Snickers in the market Additionally, new entrants to the market also cause a threat to the brand To remain the absolute favorite candy snack and remain an established brand, Kit Kat has to keep up with the competition

2.4 PRODUCT OFFERINGS

Packaging

Kitkat's packaging is a pastel pink with cherry blossoms printed on top In addition, the packaging design is also very unique with the shape of a large cylinder which represents the diploma in Japan Because this product is only available for sale during the cherry blossom season in March, April, which coincides with the graduation ceremony of students Inside the product, you'll find 5 Sakura Kitkat kits, vacuum sealed to keep all the delicate flavors sealed and fresh Included in each pack is a special KitKat in the shape of

a full bloom cherry blossom and a special cherry blossom keychain made from cherry blossom wood However, in Viet Nam, cherry blossoms bloom in the spring season including January or February So, we can sell it on Tet holiday in order that customers can give as gifts for their families

Taste

KitKat cherry blossoms have a distinct strawberry flavor Besides, it also has a very subtle taste of sakura ice cream, similar to the taste for sakura mochi, a sweet traditional Japanese dish made from glutinous rice and wrapped in a pickled cherry leaf Specially, cherry blossom KitKat also contains sakura leaves, which make them more unique than other Kitkat By using leaves instead of flowers actually creates a better taste of sakura, but this Kitkat has a special taste that is surpassed by their strong sweet and sour strawberry flavor, which can be considered a breakthrough

Production

Kitkat cherry blossoms have just been sold in some KitKat Chocolatory stores in Japan This shows that these items are limited, and special for those who want to collect

or give a gift for somebody on holidays In Viet Nam, this will be an outstanding product

in customer’s mind With the curiosity of Vietnamese people, they will want to try this limited KitKat or use it as a gift on New Year’s Eve (Monnhatban, 2018)

2.5 KEYS TO SUCCESS:

The keys to success are designing and producing products that meet market demand Because Kitkat cherry blossoms are not produced in Vietnam, it will attract Vietnamese people's attention In addition, Kitkat must ensure total customer satisfaction with the taste

of the product when they have their first taste of Kitkat cherry blossom that is made in Vietnam Besides, Kitkat should target to display or sell it on special holidays such as Tet Holiday If these keys to success are achieved, it will become a profitable, sustainable company