Brand strategies for piattos potato snack in 2012 2019

23 Figure 4.2 Current packaging of potato snack product in Vietnam market .... Based on the findings of low brand awareness, weak brand image, ineffective promotion activities and weak d

MBMM5

TRAN CAM LOAN

BRAND STRATEGIES FOR PIATTOS

POTATO SNACK IN 2012-2015

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s Name: Dr Tran Ha Minh Quan

Ho Chi Minh City

(2012)

COMMITMENT

I hereby, Tran Cam Loan, commit that the study is my own work with information

retrieved and obtained from reliable sources which has been acknowledged in the reference page This work has not been submitted for a degree or diploma in any university To the best of my knowledge and belief, the project contains no materials previously published or written by another person except where due reference is made in the project itself

HCM City, Feb 19th, 2012

Tran Cam Loan (Ms)

ACKNOWLEDGEMENT

Firstly, I wish to express my deep gratitude to Professor Tran Ha Minh Quan for his strategic advises and involvement in my final project for the program of Master in Business and Marketing Management His continuous guidance and insightful comments has motivated my successful completion of the research paper

Secondly, I am also greatly indebted to respectful professors of the MBMM program They have lifted up me to a new level of profession in marketing career thanks to their advanced marketing knowledge and useful experience sharing during the course

Thirdly, I would like to express great gratitude to Ms Ruby Dela Cruz, Marketing Manager

of URC Vietnam Company who has provided me the data and has input a lot in my project, as well as Mr Serge Bywalski and Ms Nguyen Thi Mong Thuy of the Postgraduate Office of Open University HMC and Solvay Brussels School for their assistance and coordination for my due completion of this thesis

Finally, I would like to thank all of MBMM5 classmates for their sharing of experience and knowledge during the course and my family for their encouragement during my study and thesis completion

COMMITMENT i

ACKNOWLEDGEMENT ii

TUTOR’S COMMENTS iii

TABLE OF CONTENTS iv

LIST OF ABBREVIATIONS vi

LIST OF FIGURES vii

LIST OF TABLES viii

EXECUTIVE SUMMARY vix

CHAPTER 1: GENERAL INTRODUCTION 1

1.1 Company introduction 1

1.2 Problem statement 1

1.3 Project Objective 2

1.4 Scope and limitation 2

1.5 Structure of the Project 2

CHAPTER 2: LITERATURE REVIEW 4

2.1 Theoretical knowledge of brand 4

2.1.1 Brand 4

2.1.2 Brand equity 4

2.1.3 Brand identity 4

2.1.4 Brand image 5

2.1.5 Brand personality 5

2.1.6 Brand positioning 6

2.2 Brand strategies 6

2.2.1 Pioneering strategy 6

2.2.2 Late -Entry Strategies 7

CHAPTER 3: RESEARCH & ANALYSIS 8

3.1 Desk research 8

3.1.1 Market analysis 8

3.1.2 Competitor analysis 8

3.1.2.1 Poca competitor - market pioneer 9

3.1.2.2 O’star competitor - early follower 10

3.1.2.3 Tatos competitor - late entrant 12

3.1.3 Brand analysis 13

3.1.4 Consumer analysis 14

3.1.4.1 Consumer insights 14

3.1.4.2 Consumer behavior and attitude 15

3.2 Primary research- Brand health survey 17

3.2.1 Research design and methodology 17

3.2.2 Research results and findings 17

3.3 SWOT analysis 20

CHAPTER 4: RECOMMENDATIONS FOR BRAND STRATEGIES IN 2012-2015 4.1 Brand re-targeting and re-positioning 22

4.2 New brand identity 22

4.3 Recommendation of brand strategies in 2012-2015 23

4.3.1 Differentiate product strategy 23

4.3.2 Value for money pricing strategy 25

4.3.3 Expansion distribution plan with exclusive sales team development 25

4.3.4 Integrated communication plan in non-traditional channels 26

4.3.4.1 Concentrated communication objectives 27

4.3.4.2 Consistent communication message 27

4.3.4.3 Aggressive communication activities on various digital means 28

4.3.4.4 Teenager channels with celebrity endorsement 29

4.3.4.5 Long-standing school advertising 29

4.3.4.6 Long-term cinema advertising and trading 29

4.3.4.7 Visibility campaign and cross merchandising programs 30

4.3.4.8 Co-branding with new on-premises customers 30

REFERENCE i

APPENDIX iii

Appendix 1: Quantitative questionnaire ix

Appendix 2: Main analysis charts of quantitative research xii

Appendix 3: Pictures of Piattos and competitors’ communication activities in 2011 xv

A&P Advertising & PromotionBTL Below-the-line

FMCG Fast Moving Consuming Goods

GT Traditional Trade ChannelHCM Ho Chi Minh

MT Modern Trade Channel

OOH Out of Home

POSM Points of Selling Materials

SKU Stock Keeping UnitTVC Television Commercial

VND Vietnam Dong

U&A Usage & Attitude

URC Universal Robina Corporation

LIST OF FIGURES Figure 2.1 Identity Structure 5

Figure 3.1 Brand penetration level 17

Figure 3.2 Key message take-out of Piattos 18

Figure 3.3 Brand image associations 19

Figure 3.3 Brand associations chart 19

Figure 4.1 New flavor ideas from new product launch in Asian countries 23

Figure 4.2 Current packaging of potato snack product in Vietnam market 24

Figure 4.3 Packaging options for Piattos potato snack 24

Figure 4.4 Snack shape options for Piattos potato snack 24

Figure 4.5 Bulky transportation for a food salesman to carry 4 cases of snack daily… 26

Figure 4.6 Proposed communication models 27

LIST OF TABLES

Table 3.1 Market share review based on Nielsen audit of six key cities (Nov 2011) 8

Table 3.2 Snack moments 16

Table 3.3 SWOT analysis 20

Table 4.1 Proposed quantity of exclusive snack salesmen for South market 25

The strategic marketing knowledge gained from this Master course and marketing theories combined with the practice of research and analysis skills of secondary data and primary data will be used in this project to find out and solve brand issues, strengths, opportunities and threats Based on the findings of low brand awareness, weak brand image, ineffective promotion activities and weak distribution which are main challenges for Piattos, the proposal is to apply the positioning model of Keller (2002) with the concept

of Frame of reference, Points of Parity, Points of Difference; the Value Proposition model

of Aaker (1996) and the theoretical competitive strategies for late-entry brands of Gregory

S Carpenter and Kent Nakamoto (2005) to solve those brand issues Self-expression positioning with the consistent communication message “Stand out and win the crowd” throughout four years’ marketing plan will be the main recommendations for Piattos to be more differentiate compared with current competitors The consumer trend of “hyper digitalization” and “search for role models” combined with the findings of snack consumption habit and source of awareness information are the foundation for the proposal

of new brand strategies for Piattos to explore the brand building programs in traditional or less-cluttered advertising channels such as digital, school, cinema and POSM with long term and integrated plan

CHAPTER 1: GENERAL INTRODUCTION

1.1 Company introduction

1.2 Problem statement

1.3 Project Objective

1.4 Scope and limitation

1.5 Structure of the Project

In Philippines and other Asian subsidy, URC succeed in food products, under the

“Jack ’n Jill” megabrand, which are widely available in most trade channels in Thailand, Malaysia, Singapore, Indonesia, China, and Hong Kong In contrary, URC Vietnam succeeds in beverage brand (C2 Green Tea) In the effort of building food industry, during recent years, URC Vietnam has started to invest and build successfully some leading brands under “Jack’n Jill” mega brand such as Cream O and Dynamite in Biscuit and Candy category

One of the key strategies of URC Vietnam during 2010-2015 is to build successful snack category by focusing in developing different snack segments, in which the most important segment is potato snack with Piattos brand- the leading potato snack brand in URC Philippines

1.2 Problem statement

Potato snack segment is potential market and fast growth industry but highly competitive, especially for new players because the market is now cluttered with many players: Poca (Pepsi), O’star (Orion), Tatos (Oishi), Swing (Orion), Slide (Kinh Do), Pringles (P&G), etc Among those, Poca and O’star are the two biggest players with 66% share of the potato snack business The late entry Piattos was launched by URC Company

in Dec 2010 to compete directly to Poca and O’star Piattos was positioning as a fun and innovative snack with unique hexagon shape and targeted in teenagers who are open to try new things Besides unique shape, Piattos was differentiated from its competitors with non-greasy and crispier product quality with more acceptable price (4,000 VND/pack in comparison with Poca and O’star at 6,000 VND) Despite a high A&P investment of around US $700,000 for marketing launching activities, sales growth after one year has been very modest and market share in terms of sales volume is at 5% only

1.3 Project Objective

Through this project, the strategic marketing knowledge gained from this Master course and marketing theories will be applied to solve a real marketing problem The positioning framework of Keller (2002) with the concept of Frame of reference, Points of Parity, Points of Difference; the Self-Expressive benefit model of Aaker (1996) and the theoretical competitive strategies for late-entry brands of Gregory S Carpenter and Kent Nakamoto (2005) will be used to solve the current brand issues Moreover, the study of secondary data and the analysis of a self-conducted quantitative survey will provide the detailed customer analysis, competitor analysis and brand analysis to identify brand issues and recommend efficient strategies to increase brand positioning and performance in the following years

1.4 Scope and limitation

This project is concentrated in recommending brand strategies for Piattos to compete successfully in the tough competitive market with giant brands like Poca (Pepsi) and O’star (Orion) As Piattos is potato snack product, the market analysis hereinafter is only potato snack, not the whole snack market Due to the constraint of time and geography, the primary research of brand health check in this thesis is conducted in Ho Chi Minh only because this is the key market in South area where Piattos was launch However, the sample size of one hundred random respondents is qualified for reliable data in quantitative research

1.5 Structure of the Project

Chapter 1 provides general introduction about company background, problem statement, project objective, project scope and limitation as well as the structure of the project

Theoretical knowledge of brand and brand strategies will be introduced in Chapter

2 The chapter will explain briefly the basic terms related to brand concept and aspects Then, it will explore the value proposition model of Aaker (1996) for brand position and some competitive brand strategies of Gregory S Carpenter and Kent Nakamoto (2005:74-77) which is applied for late-entry brands in the highly competitive market

Chapter 3 will concentrate on research and analysis which is divided into two parts The first is secondary research with available company data and research to under to have basic understanding about Piattos and competitor’s portfolio, positioning, pricing strategies

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and marketing activities, consumer usage and attitude The second is primary research with

a quantitative survey of brand health check to evaluate current brand association, brand image, brand performance and brand choice factors

Based on the findings on Chapter 3, the final chapter -chapter 4- will summary the conclusion and will provide the recommendation for brand strategies in 2012-2015 It will include 4P’s strategies with detailed concept for marketing plan

Last but not least, the appendix section consists of all research data, research questionnaire, important analysis charts and pictures of previous communication activities

CHAPTER 2: LITERATURE REVIEW

2.1 Theoretical knowledge of brand

2.1.1 Brand 2.1.2 Brand equity 2.1.3 Brand identity 2.1.4 Brand image 2.1.5 Brand Personality 2.1.6 Brand positioning 2.2 Brand strategies

2.2.1 Pioneering strategy 2.2.2 Late-Entry Strategies

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CHAPTER 2: LITERATURE REVIEW

2.1 Theoretical knowledge of brand

2.1.1 Brand

According to the American Marketing Association (AMA), a brand was defined as

“a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” With same viewpoint, Kotler (2000: 396) also believed that a brand was “the name, associated with one or more items in the product line, which is used to identify the source of character of the item(s)” Later, Kotler (2005: 232) recognized that brands are more than just names and symbols He admitted that “brands represent consumer’s perception and feelings about a product and its performance - everything that the product

or service means to consumers” James C Anderson and Gregory S Carpenter (2005:180) contended that “brands are intellectual assets-the thoughts, feelings, and images that a brand evokes in customer’s mind” And Kapferer (2008:28) mentioned that “the brand is a sign - therefore external - whose function is to disclose the hidden qualities of the product which are inaccessible to contact” Therefore, the brand served to identify a product and to distinguish it from the competition

2.1.2 Brand equity

Aaker (1996: 7) defined brand equity as a set of assets (and liabilities) linked to a brand‘s name and symbol that adds to (or subtracts from) the value provided by a product

or service to a firm and/or that firm’s customers Then, Kotler (2005: 232) contributed a

new aspect for brand equity, he believed that “brand equity is the positive differential effect

that knowing the brand name has on customer response to the product or service” Viewing

in this way, the Marketing Science Institute defined brand equity as the set of associations and behaviors on the part of the brand’s customers, channel members and parent corporation that permits the brand to earn greater volume or greater margins than it could

without the brand name and that gives a brand a strong, sustainable and differentiated

advantage over competitors This implies that any brand which aims to be the powerful

brand should try to build high brand equity with strong associations

2.1.3 Brand identity

In 1992, Kapferer claimed that brand identity comes from the company’s side; its aim is to specify the meaning, intention and vocation of the brand Identity precedes image

(p.35) Then, in 1995, he pointed out that brand identity lies in the brand’s individuality, goals, consistency, values and vision Later, Aaker (1996:68) explained further that the brand identity system is a unique set of brand associations that a brand stands for and implies a promise to customers from organization’s members He proposed that brand identity consists of a core identity and an extended identity, in which core identity represent for the timeless essence of the brand and the extended identity included elements that provide texture and completeness to the picture, adding details that help the brand stands for

Figure 2.1 Identity Structure

2.1.4 Brand image

Kapferer (1992:35) stated that brand image centres upon the way a certain public imagines a product service, a brand etc Brand image succeeds brand identity Aaker (1996:68) just summary a simple distinction between brand identity and brand image in which brand identity is how the company want the brand to be perceived and brand image

is how the brand now perceived by consumers Hereafter, Keller (2008:51) postulated brand image as the consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory Generally, brand image is the brand perception from the consumer’s side And the implications for Piattos brand is to ensure that brand image is same or of minor gap compared with the brand identity set by the company This will be figured out through the frequent brand health check survey with target consumers

2.1.5 Brand personality

Aaker (1996: 141) and Martin Roll (2006: 102) all defined brand personality as the set of human characteristics associated with a given brand Aaker (1996:141) maintained that brand personality includes such characteristics as gender, age, and socioeconomic class, as well as such classic human personality traits as warmth, concern, and

EXTENDED IDENTITY

CORE IDENTITY

2.1.6 Brand positioning

Martin Roll (2006: 102) asserted that brand positioning is the place that every brand strives to occupy in customers’ minds and positioning is all about the perception of the brand And Kotler (2005: 233) categorized positioning into three levels as product attributes, desirable benefits, belief and value positioning which touch on emotional aspect Keller (2002:3-8) introduced the framework of positioning based on three points: frame of reference (FOR) being the market segment that is targeted; point of parity (POP) describing the basic functions and benefits to the needs that are already exist; and point of difference (POD) referring to the differentiations that a product or a brand make to be a part from the competitors Points of difference may take the form of functional or emotional benefits Supporting evidence for claims related to the frame of reference and

point of difference, referred to as reasons to believe (attribute, image that is represented by

the people, occasion of use, feeling experience of brand user or attitude information) Aaker (1996: 176) defined brand position is the part of brand identity and value proposition Besides functional and emotional benefits, he also introduced the new concept

of self-expressive benefits in value proposition of brand position in which brand become

vehicle to express a part of consumer’s self-identity or an ideal self that they might aspire Thus, the knowledge of brand positioning guidelines Piattos to frame its target market properly and thereafter strive to figure out the point of difference with strong associations

to position its brand so that it can occupy a unique position in their customers’ mind

2.2 Brand strategies:

Golder and Tellis (1999), categorized the brands based on their timing of entry as the market pioneer (the first to market the product), early followers (those that entered soon after the market pioneer), and later entrants And Gregory S Carpenter and Kent Nakamoto (2005:74-77) analyzed main competitive Brand Strategies for different players

in the market such as pioneering strategy and late-entry strategies

2.2.1 Pioneering strategy:

To apply this strategy, the brand should be the first to market the product This pioneer position will allow the brand the chance to establish the category and become the

standard for later entry competitive brands, to establish the rule of the game and gain unique role in defining the dimensions on which brands compete, and in influencing the important buyer attach to perceived differences Other advantages for the pioneer are high brand awareness, strong association and wide distribution

2.2.2 Late-Entry Strategies:

The new comer in the mature market with an established set of players can select among the following late entry strategies to compete with the pioneer:

- A fast-following strategy relies on playing the game the pioneer has created, but

doing so better or with more resources than the pioneer By fast following, an entrant can exploit the innovation of the pioneer and its lack of relative resources Fast followers do not challenge the logic of the pioneer’s efforts to create the market In fact, they embrace that logic and seek to capture the profits associated with it (p.81-82)

- A differentiation strategy recognizes the power of the pioneer and seeks to define the late entrant as fundamentally different from the powerful pioneer By differentiating, a

later entrant can exploit the pioneer’s relative inflexibility Differentiation seeks to offer value on a dimension that is inventive or unconventional, but is nonetheless valuable to target customers The challenge in differentiating from a pioneer is that greater differentiation increases market share But a product can also run the risk of being so different as to be irrelevant Being too close to the pioneer runs the risk of being overshadowed- or worse yet, copied- by the pioneer The degree of differentiation chosen

by the late entrant depends on the power of the pioneer In some cases, the pioneer is strongly associated with the category, so the late entrant can move in closer to the pioneer’s original position If the pioneer is weaker, it can reach further afield, so a late entrant needs to position further from the pioneer to be safe from the competitive imitation (p.83-85)

- An innovation strategy seeks to redefine what buyers know or perceive about the

established brand and the market This strategy renders obsolete knowledge created through the interaction between buyers and the pioneer, allowing the innovative later

entrant to redefine the nature of the competitive game Innovative late entrants can restart

the learning process and use it to their own advantage, overtaking the pioneer and placing

it in the role of follower (p86-87)

CHAPTER 3: RESEARCH & ANALYSIS

3.1 Desk research

3.1.1 Market analysis 3.1.2 Competitor analysis 3.1.3 Brand analysis

3.1.4 Consumer analysis 3.2 Primary research- Brand health survey

3.2.1 Research design and methodology 3.2.2 Research results and findings 3.3 SWOT analysis

CHAPTER 3: RESEARCH & ANALYSIS

3.1 Desk research:

3.1.1 Market analysis:

According to Nielsen retail audit data of six key cities in Nov 2011 provided by URC Marketing department, potato snack market in Vietnam is a very potential FMCG industry with total market value of US $9.15 million and the growth rate of 27% in terms

of sales volume However, the market is now cluttered with many players: Poca (Pepsi), O’star (Orion), Tatos (Oishi), Swing (Orion), Slide ( Kinh Do), Pringles (P&G), etc Among those, Pepsi and Orion are the two biggest players with 66% share of the potato chips business in term of sales volume by kilo In this market, the sale volume by kilo is main criteria to review market share because different snack product are sold at different price which makes the analysis in sale value less accurate and meaningful than sales volume

As a strategy to entry the VN snack market, URC Vietnam has launched the Piattos which competes directly to Poca and O’star, Swing since Dec 2010 Piattos is differentiated from competitors by its unique hexagon shape with more acceptable price (4,000 VND/pack in comparison with Poca/ O’star at 6,000 VND) Piattos is also crispier, non-greasy than the others Although the company invested a big advertising budget of around US$ 600,000 equal with Poca and O’star to do advertising both in traditional channel (TV) and non-traditional channel (cinema, digital) combined with many BTL activities, sales growth has been very modest and market share is at only 5% in term of sales volume

Table 3.1 Market share review based on Nielsen audit of six key cities (Nov 2011)

Sales volume (kg) Market share (%)

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3.1.2.1 Poca competitor_ market pioneer:

According to internal competitive profile tracking of URC marketing department, it’s Pepsi Corporation who created the “natural potato” market with its Poca Lays brand since 2007 via its well established distribution and huge media spending Poca is positioned as premium and tasty natural potato snack with brand personality of young, dynamite and sporty Its target consumers are adolescent at the age of 15 to 24 As the leader of the market, it always spices up the market by its regular launching of new products every year Currently, Poca has the most crowded portfolio with eight flavors at two pack sizes of 27gram and 60gram which makes the total portfolio of 16 SKUs The eight flavors of Poca snack are Natural Classic, Manhattan Rib-Eye Steak, Grilled Lobster Mornay, Nori Seaweed, Grilled meat Valencia tomato sauce, Perigold pate, and Napoli pizza The pricing strategy is premium price at 6,000 VND for small pack and 12,000 VND for big pack However, the retailer margin is just at lowest level of the snack industry- 11%

Through five years of presenting in the market, this brand is consistent with the slogan of “Irresistibly Delicious” Thanks to the strength of a giant global corporation, Poca has a huge A&P budget to support marketing activities every year In the first four years of launching, Poca has very strong media investment with the annual budget of around US$ 600,000 for television advertising using different famous celebrities as talents

in their different TVC version through the years Poca also frequently invests huge merchandising campaign with many various POSM tools such as display racks, hangers, posters, wobblers, signboards and wall boards to support both traditional and modern trade

It pays a big amount incentive for retailer to display their products in the eye-catching position in the store Poca has exclusive sales team to focus to sell snack product only and its distribution coverage is nationwide with wide network for on-premise and off-premise channel

In 2011, Poca launched a huge consumer promotion toward football fan with the theme of “Poca- Super fan promotion” supported by an integrated communication

campaign in TV, print, Out of Home (OOH) advertising, Internet and Below-the-line (BTL) activities mainly focus in Ho chi minh and Hanoi market The Match Attax card with picture of one from 54 famous football players was inserted into Poca product for the consumers to make the collection which can be used for a game 8 lucky consumers who received the golden tickets in the pack will win a trip to Great Britain to watch the final match of Manchester United Club On digital, Poca launched promotion website with forum discussion to create two-way conversation with consumer in order to create dynamic social community For Out of Home, Poca decorated supermarket welcome gate to recall brand awareness and campaign reminder In terms of print ads, besides teenager magazines (Hoa Hoc Tro, Muc Tim), Poca also expanded their target audience by investing in social news in mass favorite newspaper and magazines of Ho Chi Minh and Ha noi such as Thanh Nien, Tuoi Tre, Tiep Thi Gia Dinh, An Ninh Thu Do and The Thao Van Hoa

In summary, the successful story for Poca brand is its pioneer, variety of flavors with fancy name, huge A&P budget for marketing activities, excellent merchandising and exclusive snack sales team with well-established distribution network on nationwide for on-premise and off-premise channel

3.1.2.2 O’star competitor - early follower:

Based on URC marketing information, O’star brand of Orion Company (a leading branded Korean food Corporation) entered the potato snack market some months after Poca In the first three years, it didn’t work very well to compete with the pioneer position

and huge marketing budget of Poca However, since 2010, it started to adapt the

fast-following strategy to compete with Poca by fast-following the rules of Poca but trying to do it

better than Poca O’star positions as Tasty & Crunchy natural potato snack, similar with Poca with brand personality of youthful and elegant Its target consumers are same as Poca, but O’star calls them teenagers in all of their communication materials O’star just has three flavors with normal name such as Salted flavor, seaweed flavor and Korean Kimchee flavor at two pack sizes of 30gram and 62 gram Although O’star has fewer flavors than Poca, the consumers highly prefer its taste than Poca’s It follows the premium pricing of

Through five years of competing with Poca, this brand is consistent with the slogan

of “The best natural potato” For the investment of this brand, O’star also has a big A&P budget to support marketing activities every year In the first three years of launching, O’star has a strong media investment with the annual budget of around US$ 400,000 for television advertising O’star also invests various merchandising materials such as display racks, hangers, posters and wobblers combined with display incentive as Poca competitor

to support sales Like Poca, O’star has exclusive sales team to sell snack product only and its distribution coverage is nationwide with wide network for on-premise and off-premise channel

In 2011, O’star refreshed it image with teenage association by launching the promotion “O’star farm” since 18th Sep and cooperate with teenager channel (Yan TV) to attract teenagers to offline events with teenager celebrities O’star offered in-pack promotion with scratch tickets to win free product or free travel trip to O’star farm in Da Lat with total promotion budget of one million free O’star pack and one hundred free trips

to O’star farm which valued more than US$300,000 Besides TV channel, O’star also communicates their promotion on varied media vehicles (print, digital and cinema) to get touch of their target consumers Unlike Poca, O’star concentrates all their resources in teenager channels and link it together into 360o communication campaign such as advertising on teenager television with video of different teenager celebrities to join O’star farm trip together with teenager consumers, sponsorship teenager games show named Rung Chuong Vang in VTV3 for Hanoi market and print ads in teenager magazines of HCM and Hanoi market (Hoa Hoc Tro and Muc Tim) Regarding digital activities, while Poca invests for short term with promotion website maintaining for about three months, O’star aims at long term digital strategy with the launching of their official website for the brand (ostar.com.vn) with forum discussions, direct link with video clips of O’tar farm trips on Youtube and other social network As the time of launching the promotion is summer period, O’star also airs its 60-second-advertising film of O’star farm in Megastar and Cinebox cinemas combined with brand activation at the booth outside cinema entrance

to recall teenager awareness in their school-off time

In summary, the successful story of O’star is its fast-following strategy, good taste, clever spending of limited marketing budget in less cluttered media channels in an integrated communication campaign (teenager TV channel, teenager magazine and digital cinema), celebrities endorsers, good merchandising campaign and exclusive snack sales team with nationwide coverage for on-premise and off-premise channel

3.1.2.3 Tatos competitor - late entrant:

Liwayway is a big Philippines food corporation who is very successful in extruded snack for kid consumer with the leading brand Oishi In the beginning of 2011, this company decided to enter the potato snack market with new brand Tatos and switch whole Oishi media spending to support the launch of Tatos Tatos positions as fun natural potato snack targeted at teen and young adults with brand personality of youthful and rebellious Tatos has three flavors of Natural, Kimchee, Cheese and Onion at the pack size of 30 gram Tatos is sold at 5,000 VND, cheaper than the current Poca and O’star With the cheap pricing strategy, Tatos tries to converted current consumer of Poca and O’star to switch to their product It also provides a higher retailer margin of 16%, than current offer of Poca and O’star in order to encourage retailer to sell more Tatos snack

According to the media report of URC marketing department, total media spending for launching Tatos is about US$ 740,000 for airing TVC in three markets (HCM, Hanoi and Danang TV channels) Tatos alternates their TVC with three different versions of funny moments in Fountain, Salon and Karaoke, using consistent communication tagline

of “Real potato – Truly funny moment” Besides TV channel, Tatos also invests in print ads and OOH to support Regarding print ads, Tatos concentrates in Women & Lifestyle magazines For OOH advertising, Tatos invest in the billboards at central and high traffic zones in HCM market Inherited from well-established distribution network of the current Oishi snack, Tatos also has exclusive sales team to sell snack product only and its distribution coverage is nationwide with wide network for on-premise and off-premise channel

3.1.3 Brand analysis:

Recognized the tough competition of potato snack, when URC Vietnam launched Piattos, it applies to follow the differentiate strategy by making the snack shape in hexagon shape which is totally different from the traditional round shape of all current competitors Brand positioning is also similar as other current competitors – Fun and crispy natural potato with brand personality of fun, innovative and daring Its target consumers are teenagers at the age of 13 to 17 who is keen to try new things Its product portfolio has three flavors of Roasted Beef, Korean Kimchee and Grilled Rib at the pack size of 25gram Piattos is sold at 4,000 VND, the cheapest price compared with all current competitors To support the distribution, besides merchandising tools (display rack and hangers), it also offer the highest retailer margin of 21% compared with all current competitors

About advertising, Piattos invested in HCM market and Cantho market with

“Hexagon” TVC in Mar 2011 and “Crispier” TVC in Oct 2011 to emphasize the unique hexagon shape and the crispier benefit with the total media spending of US$ 400,000 Besides TV channel, it also invests in Digital activities by launching a fan page in Face book and posting TVC in YouTube In Jun 2011, it ran a photo contest named “Piattos moment” to call for consumers to take picture with Piattos product and invites their friends

to join Piattos Face book to vote for their picture Then in Aug 2011, it started the new video contest named “I love Piattos” to call for the fans to make video to promote Piattos and ask their friend to join to vote for their video clip At the end of the year Dec 2011, Piattos Face book implemented another third contest named “Love Wishes to Your Beloved People” that request the users to send their do-it-yourself card with new year wishes to their beloved people via Face book fan page After half year of implementing digital activities on Face book, Piattos attracts about 15,000 fans to join in the community

Besides digital activities, Piattos also invests in cinema advertising in summer

season and BTL activities in South area because the distribution just covered HCM city and Southern provinces only Regarding cinema, Piattos aired 15-second-advertising film

in Megastar, Galaxy and Cinebox cinema during Jul-Sep 2011 in HCM city However, because O’star also invests in cinema during that period with longer advertising film of 60 second and aggressive brand activations, the effect of Piattos advertising was much diluted

In terms of BTL activities, Piattos did product sampling in school channel with total quantity of 200 schools in HCM and major Southern provinces in Mar and Oct 2011

As the new product with small volume, Piattos just pilots to sell in South area and makes use of the current sales force of biscuit and candy to sell snack However, due to the low value of snack product and the difficulty of selling new brand, Sales people tend to focus to sell the current biscuit and candy product of established brands (Cream O and Dynamite) to achieve their sales target

In general, as late entry, Piattos tries to differentiate from the giant competitors by its unique hexagon shape, more crispier, non-greasy and more acceptable consumer price with higher profit for retailer Although the A&P investment for the first year of launching

is up to US $600,000, Piattos sales volume achievement is still very low One assumption

of low sales performance is the ineffective marketing activities due to their separate implementation in different media channels, not link together in one holistic integrated campaign as Poca and O’star Another assumption is the loose focus of food sales force and the limited distribution coverage in South area

3.1.4 Consumer analysis:

3.1.4.1 Consumer insights:

Based on the public research report of Cimingo Research Company named has

“Millennium Gen Z” report on their website (www.cimingo.com) in Apr 2011, there are four among six key insights of teenagers and young adults from 15 to 24 years old which can provide important implications for Piattos snack product

a) Hyper-individualism/ Self-definition/ Self assertion:

- I should be recognized for my talents

- I am me I don’t want to be mistaken with some one else

- I know I’m not the smartest or the best looking but I still wish to be popular and admired

by my peers

The implications for Piattos are to become enablers of self-expression for personal talent and keep evolving with their consumers with new product introductions through variants For the communication, it should develop emotional message on claiming and defining their self-ego

b) Hyper digitalization:

95% of urban teenagers are online frequently to search information and entertainment with music, blog, email, chat, etc The top three favorite websites they visited weekly are Zing (55%), Google (53%) and Face book (24%) Internet is the medium for them to show their self-expression through forum, social network and blogs

The implication here is to encourage consumer participant through digital means and to maintain strong, active, relevant presence online with two-way discussion with consumer

c) Search for role models:

Teenagers need to be enabled to dare and enact their dream, so they need expertise

to establish a mix of both offline and online “news” about a role model’s success Therefore, there is the rise of new local influencers of celebrities and hot bloggers such as Gao blogger for lifestyle focus; Robey blogger for entertainment experience and Meo Ac blogger for food focus and their network are more than 9,000 friends

Based on this information, there is opportunity for brand to influence consumer behavior and attitudes by selecting the right brand ambassadors and develop advocacy amongst well-chosen blogger

d) Experience Seeking:

Teenagers are open to trying new things, out-of-ordinary and out-of category experience They love to maximize their experience at all times This encourages Piattos to continue its innovation to offer new experience which hexagon snack may be the good start and Piattos can take advantage of this trend to test new product ideas through actual consumer experience

the-3.1.4.2 Consumer behavior and attitude:

According to U&A report of potato snack users conducted by Insight work

Research agency in June 2010, there are some main findings about teenager consumer

purchasing habit, decision making pattern and consumption habit

a) Purchasing habit and decision making pattern:

Most of consumers often purchase potato snack by themselves and purchase at

“Small grocery store, near home” and “Canteen in school” They have low considerations

when choosing brands and their decision is impulse purchase (i.e see and buy) There is

low brand loyalty for this product category because 94% consumer will convert to buy

another brand if their current brand is not available Therefore, the availability and

visibility is very critical for snack brand to be in hand of consumers

b) Consumption habit:

Most of consumers often eat potato snack “at home” and “at school” that are

relevant with place of purchasing Usage frequency: three to four times per week They

often use “Pure water & soft drink” with potato snack

From the consumption habit, it’s advisable to do advertising or sampling at school

channel and cross-merchandising with beverage product

c) Snack moments:

Table 3.2 Snack moments:

When Where Why Frequency

Concentrate, something to savor, tasty, keep from falling asleep

Most often moments

School break School Kill the hunger, eat fast, can share with

classmates

Most often moments

Watching TV or

movies

Home, Cinema

Oral enjoyment, convenient, fun, clean and dry, can share or can eat alone

Quite often moments

Studying (in

classroom)

School Quiet, easy to hide, easy to eat, clean and

dry, kill bothersome, fun, exciting, mischievous

Quite often moments

Oral enjoyment, sharing, triggering the conversation, adds fun

Quite often moments

Snack time

(between 2 meals)

Home Sometimes teen eat snack to kill the

hunger However, snack is not a TOP consideration compared cakes or biscuits due to lacking nutritional values

Less often moments

From the above information, the key motivators to encourage consumption are fun, crispy, tasty and convenient Home, Out of Home, School and Cinema are some important places for snack moments, so Piattos can consider an integrated marketing plan to maintain their presence in these places for long-term

3.2 Primary research- Brand health survey:

3.2.1 Research design and methodology:

This is a quantitative research with the samples of 100 snack users in HCM City, at the age of 15 to 24 years old The methodology is random samples interviewed at crowded Galaxy cinema locations from Oct to mid Dec 2011 when Galaxy already stop Piattos and O’star advertising film in order to avoid the bias in measuring advertising awareness The screening criteria for snack user is potato snack users at least the past two weeks and have the habit of consuming potato snack at least three times per week

3.2.2 Research results and findings:

Figure 3.1 Brand penetration level

* Notes: brand conversion index reveals the quantity of the consumers among whoever

knew the brand is willing to try the brand Brand retention index shows the quantity of the consumers among whoever tried the brand is willing to buy and use it most often

As shown in above figure 3.1, Piattos still has quite low brand awareness of 33% versus Poca and O’star with awareness of 98% and 96% respectively However, Piattos has

good conversion of 45% which is higher than Tatos and good repeat purchase expressed through high brand retention of 40% while the bench mark retention of Poca is 59% and others at 33%-36% only This is quite match with the fact that Piattos received quite high product satisfaction which is nearly high as two big competitors (88%) Tatos is still a small and unimportant competitor with the same awareness level despite its aggressive TV advertising spending From these data, we can be confident that Piattos has good product quality as leading competitive brands

The survey data also shown that two important sources of information that consumers aware of all current snack brands are TVC (60-90%) and POSM (40-73%) which can be good direction for marketing budget investment in branding activities However, the key messages taken-out from different sources of advertising are different, which expressed that Piattos brand image is inconsistent to target consumers because many characteristics such as creative, youthful, exciting, stand out of the crowd, extremely crispy and natural potato are perceived at the similar ratio ranging from 40 % to 67% Among these messages, there is no outstanding characteristic that makes biggest impression in the mind of most of target consumers

Figure 3.2 Key messages taken-out of Piattos

Further more, in the brand association chart in below figure 3.3, it is clear that brand image of Piattos is very weak and was perceived through factors irrelevant or less important to customers such as hexagon shape which is one unique selling point for Piattos, eye-catching pack, brand can show my style All important factors influencing brand choice were perceived by Poca and O’star such as flavor variety, good flavor, good

Figure 3.3 Brand image associations

Figure 3.4: Brand association chart

Piattos consumers also mention the reason they used Piattos most often are due to its natural potato taste (59%), crunchiness (41%) and affordable price (17%) This implies that the product quality and current pricing strategy is good motivators for this brand And Piattos lapsed users also shared their key reasons for not using Piattos most often used as unavailability or distribution (50%), not familiar with the brand (30%), not real potato feeling (10%) This shows that the brand issues now are less effective branding activities and low distribution coverage even in HCM city For the ideal potato snack, they are willing to try different shape and new flavors that are not available in potato snack now such as pungent flavor, vegetable flavors, etc

About the pricing perception, the price range for potato snack of pack 25gram is

4000 VND-5,500 VND The pricing below 4,000 VND will be considered is very cheap and unreliable quality The pricing above 5,500 VND is considered as expensive price for potato snack of pack 25gram, except it is of famous brand name Therefore, the current pricing of Piattos at 4,000 VND is suitable, not very cheap positioning which can cause the consumers confuse of product quality

3.3 SWOT analysis:

Table 3.3: SWOT analysis

STRENGTHS

- Price: the most competitive pricing strategy

with best value for money to consumer and

highest retailer margin

- Product: high product satisfaction and high

brand retention

WEAKNESSES

- Promotion: new brand and low brand awareness; weak brand images and associations Currently brand positioning of fun and crispier is not strong and not well-perceived because hexagon unique shape seems irrelevant to consumers and the flavors we offered also similar with competitors

-Distribution: limited distribution network (South only, still weak in on-premise channel), no exclusive sales team for snack