Principle of marketing HAIHACO marketing plan for candy product line

Summary executive During 50 years of establishment and development from 1960 to present, from a small confectionery company, producing a small amount of products per year to a large and

HANOI UNIVERSITY FACULTY OF MANAGEMENT AND TOURISM

Principle of Marketing

HAIHACO

Marketing plan for candy product line

Tutorial 1

Lecturer: Phan Thi Kim Ngan

Tutor: Nguyen Minh Duong

Table of Contents

Summary executive 3

I, Company introduction 4

II, Current marketing situation 4

1 Internal environment 4

2 Micro environment 7

3 Macro environment 13

III SWOT analysis 15

IV, Main issues 18

V, Marketing objectives 20

VI, Marketing strategies (4Ps) 20

1) Products 20

2) Place 22

3) Price 23

4) Promotion 23

VII, Action program 25

References 26

Summary executive

During 50 years of establishment and development from 1960 to present, from a small confectionery company, producing a small amount of products per year to a large and long- standing confectionery company with a large number of products distributed across the world distribution not only in Vietnam, but also in other countries Hai Ha confectionery company has built itself a strong position in the domestic confectionery market And with its quality products such as: marshmallows, jams, etc Additionally, with competitive prices in the market, Hai Ha company has easily approached and met the needs of the Vietnamese market, bringing the taste in each product and suitable for all ages So what makes the products of Hai Ha confectionery company so easily accessible to customers? And how can they do that? This report, based on secondary research, discusses the marketing research of one of Haihacos’ products – candy product line First of all, the research gives you information about the current marketing situation (internal environment, micro one, and macro one) of Hai Ha Second, a SWOT analysis of the product will be presented clearly in the paper Following SWOT analysis, we will state the important problems related to the products Thirdly, it is very important that marketing strategies and marketing objectives should be analyzed to solve the mentioned issues and achieve these objectives The last thing indispensable for this marketing research is to propose an action program and illustrating products, posters, TVC, etc so that all staff in the company can follow and run the whole plan to improve current major problems

I, Company introduction

One of Vietnam's top confectionery businesses is Hai Ha Confectionery Joint Stock Company (HAIHACO) Haihaco under the Ministry of Light Industry was established with the function of producing confectionery for all classes of people

and partly for export The firm was founded in

1960 and has gone through more than 50 years of

struggling and growing It was once a tiny factory

with a capacity of 2,000 tons per year Today, the

firm has grown into Hai Ha Confectionery Joint

Stock Company, which can produce up to 20,000

tons of confectionery each year The company has

expanded steadily over the years, gaining valuable

production and commercial expertise Hai Ha

Confectionery Joint Stock Company has steadily

progressed and developed continuous development to maintain the reputation and quality worthy

of the belief and support of consumers, thanks to a team of experienced leaders, a good business strategy, a team of professionally trained engineers, and a skilled workforce Products of Hai Ha Confectionery Joint Stock Company have been awarded many Gold and Silver Medals in the exhibitions of the Vietnam International Industrial Fair, the National Economic Achievement Fair, the economic exhibition- Technical - Vietnam and the Capital as well as continuously believed by consumers and voted as "Vietnamese High Quality Goods"

II, Current marketing situation

1 Internal environment

1.1 Human resources:

At that time, Hai Ha confectionery company

was a long tradition with over 1200 employees

and all of them were well-trained, highly

skilled, responsible with high-qualified, kind

staff who make their employees feel mostly

comfortable and impassioned to make qualified

products

1.2 Marketing:

In recent years, the company has introduced to the market many new types of confectionery such

as crackers, marshmallows, sponge candies the diversification of the company's products is carried out regularly Moreover, the company improves and perfects traditional candy products by changing the flavors and designs At the same time, with the company's innovation policy, the pricing has changed in a positive direction and is more suitable for consumers across the country Not at all, Hai Ha company also organizes and participates in fairs to make the product closer to customers with lots of ways such as: game, redemption program, discount, etc That makes the company one of the companies with the longest tradition in Vietnam

1.3 Financial

Hai Ha Company has made important strides, bringing the company's revenue to more than 1100 billion VND in 2019, and 1500 billion VND in 2020, 150 times higher than in 2018 and ~ 180 times in 2017 That makes the company surpass its competitors in the same industry, and at the same time, the company also continuously invests in foreign markets such as Laos, Cambodia, Thailand, etc, making a significant contribution to the development in GDP of the country

1.4 Production facility

Hai Ha confectionery company has the most advanced and quality equipment imported from European countries, built and manufactured to meet food hygiene and safety standards, and the environment At the same time, the company is spacious and clean, to ensure the progress and health of the workers and the best product quality Haihaco is the first enterprise in the confectionery industry to be certified for the "Hazard analysis and critical control points" system

in Vietnam This shows the commitment of business leaders to ensure food safety for consumers' health

1.5 4Ps Review

1.5.1 Product

Portfolio: Haihaco develops a wide range of

products: producing in large quantities every year,

many product categories and each product category

are launched into the market with many different

flavors to meet the diverse tastes of customers

Packaging: mainly in the form of folding packages,

twisted packages, sealed pillow packages…with

colorful appearance

Quality standard: HAIHACO has been granted ISO

22000 Certificate of food safety management system This shows the commitment of the business

leadership to ensure food safety for the health of consumers

 Agents, retailers: if you buy regularly in large quantities, you will receive many incentives

1.5.4 Promotion: The company regularly participates in fairs and exhibitions, organizes

gratitude programs, promotions and collects customer opinions…

Central  Moderate-sweet, spicy

 Focus on product shape rather than packaging

 affordable prices

Southern  Sweet, fruit-flavored candy

products

 products for holidays: Tet, Valentine's Day

Psychology Tradition Traditional products

Modern Products for weight loss, low-sugar, and high-fiber

Behavioral

Buying habit

Gift Focus on product packaging with

luxurious, eye-catching designs, branded, high-end products Consumption Focus on price, quality of products

b) Targeting

Haihaco focuses on three segments including demographic, geographic and behavioral

Firstly, in terms of demographic, their targeting customers are low and middle income people With a production scale of up to 20,000 tons over 1 year, the variety of designs, types, flavors as well as reasonable prices, stable quality meet the requirements about needs, wants and demands of this customer group Moreover, the income of the majority of Vietnam residents is at the medium level; therefore, concentrating on this group helps Haihaco attract the biggest extent of the populace

Secondly, Haihaco still chose the North as its primary market although the company has also opened many branches across the country The evidence is that the company's market share in this market is very large, approximately 60% The reasons are that Haihaco have advantages of credibility, wide distribution system, large scale and low price - suit tastes and meticulousness in spending of the North residents

Thirdly, with behavioral aspects, Haihaco’s target in buying habits of consumers is consumption focusing on price as well as the quality of products This emphasizes more the reason for choosing the targeting consumers of Haihaco On the other hand, Haihaco is the first enterprise in the confectionery industry to be certified for the Hazard Analysis and Critical Control Points (HACCP) system in Vietnam Haihaco has been granted ISO 22000 Certification - food safety management system This shows the commitment of the business leadership to ensure food safety for the health of consumers In conclusion, its strategy is making an impression for customers about the low price but they are still assured about the quality

c) Positioning (candy product line)

Positioning map 1: Variety of flavor and price

This positioning map 1 shows two characteristics: flavor content and price, reflecting the position

of Haiha in the candy market of Vietnam As can be seen that, at lower prices (6.5-30 thousand VND), Haihaco produces many kinds of candy with a variety of flavors compared to Kinh Do, Huu Nghi In order to do this, as in Haihaco’ report at the end of 2020, they always try to continue research to rationalize the production process, reduce consumption costs of materials and increase energy labor rate Haihaco is catching up with Bibica about flavor closely

Positioning map 2: Brand image and price

In the candy product line, with higher prices and no diversification, of course, the brand image of Kinh Do and Huu Nghi is undervalued compared to Bibica, Hai Ha Hai Ha ranked second in the candy market share with 14% (after Bibica) and occupied the leading position in the segment of chew, Jelly and sponge products Those are shown clearly in the positioning map 2

2.2 Competitors

Currently, there are more than 30 known confectionery manufacturers participating in the market Haihaco's direct competitors are Bibica, Kinh Do, Huu Nghi, Hai Chau with similar scale in terms of production capacity and technology These are companies with a wealth of experience, new products as well as good prices and branding - a formidable competitor of Haihaco There are also foreign joint venture companies that have just entered the confectionery industry such as Orion Food, Perfetti Van Melle which have also confirmed their position

well-2.3 Company

Haihaco's organizational structure has made an important contribution to ensuring the company operates in a systematic and efficient manner Haihaco operates under the model of a joint stock company, with an organizational structure including: General Meeting of Shareholders, Board of Directors, Board of Supervisors, Board of Directors and functional departments By administering this company, the divisions within Haihaco are properly divided with a hierarchy of responsibilities conducive to inter-departmental cooperation

2.4 Suppliers

As a confectionery company, the main raw materials that the company uses for production are sugar, milk, fruit juice, rice flour these materials are mainly purchased from domestic companies such as Lam Son, Quang Ngai, Cai Lan sugar factories.etc In addition, there are some imported materials such as cocoa, butter, flavorings, food additives.etc from the US, Europe, etc The sources of these materials chosen by the company to sign are usually companies with large, reputable suppliers in the country and abroad

3 Macro environment

3.1 Natural force

Confectionery products are greatly influenced by hot and humid climates as in Vietnam From there, affecting the quality and productivity of labor, difficulties in product preservation and transportation However, this is also an advantage because of the variety of tropical ingredients In addition, there are imports of European flavors such as chocolate, cocoa, etc in order to diversify product categories 2020 is a difficult year for all economic sectors due to the Covid epidemic with consecutive natural disasters and floods in the central region Raw materials for confectionery production are derived from agricultural products, adverse weather conditions and epidemics will directly affect the production and business activities of the commodity industry: circulation of goods is limited more limited, product consumption decreases because of limited income sources, customers tend to save and limit spending on non-essential products such as confectionery Profits

thereby decrease when costs increase, demand decreases, but prices must remain stable

3.2 Economic force

The Government and all levels, ministries, departments and branches of Vietnam are trying their best to stabilize the macroeconomy, control inflation, and ensure great balances of the economy Import and export continued to be developed, thereby keeping the balance of trade harmonious and sustainable As a result, the burden of the confectionery industry in particular has been minimized

According to Minister Nguyen Chi Dung speaking at the 75th anniversary of the establishment of the Ministry of Planning and Investment on December 31, 2020, the size of Vietnam's economy will reach about 343 billion USD in 2020, ranking in the top 40 economies The largest economy

in the world and ranked fourth in ASEAN, GDP per capita reached 3,521 USD, ranked 6th in ASEAN Despite the Covid-19 pandemic, Vietnam's economy still grew bravely Regarding Vietnam's economic outlook in 2021, there are many indicators that the GDP of the economy can reach 500 billion USD by the end of 2021 This shows that the living conditions of Vietnamese people have become better Therefore, the demand for products such as confectionery also showed more positive signs

3.3 Social and culture force

The confectionery industry is gradually dominating the domestic market A representative of the BigC supermarket system said that Vietnamese confectionery accounts for about 90% of the total amount of confectionery sold here Firstly, although confectionery is not an essential human need,

it inherits the culinary tradition of Vietnam in general and each region in particular Secondly, consumers increasingly prefer Vietnamese confectionery thanks to its improved quality, more eye-catching designs and packaging with reasonable prices - in line with the gifting culture of Vietnamese people Many Vietnamese brands also do well in promoting their brands, making it easy for consumers to choose

However, in the segment of consumers with higher incomes, they still tend to prefer foreign products and suppose that the quality of foreign products is higher than the domestic’s At Lotte Mart, the percentage of Vietnamese confectionery accounts for approximately that of foreign goods This is really an obstacle for the company to penetrate the luxury goods market

3.4 Technology

Compared with other countries in the region and the world, our country's research, deployment and technology transfer capacity is still very weak Especially biotechnology, mechanical technology, processing technology and automation The technology level in general of our country

is even more backward than the world by several decades This is a huge limitation for Vietnamese businesses in general and Hai Ha in particular in renewing equipment, technological lines, and deploying new products to compete with the confectionery industry foreign Although the market for buying, selling and transferring technology has developed, it only creates favorable conditions for investment companies to compete with domestic enterprises, but also to compete with foreign confectionery companies In addition, the company has to bear a great pressure on the purchase price and technology transfer