Marketing Plan
Marketing Plan
2012
2012
Vu Phuong Anh – s3325156
Nguyen Thi Van Chi - s3373465
Nguyen Bao Hung – s3393103
Le Minh Thu - s3357569
Vu Phuong Anh – s3325156
Nguyen Thi Van Chi - s3373465
Nguyen Bao Hung – s3393103
Le Minh Thu - s3357569
Group 3 – Kieran Tierney
Group 3 – Kieran Tierney
TABLE OF CONTENTS
EXECUTIVE SUMMARY 1 SITUATION ANALYSIS 2 I Introduction 2 1 Company description 2 2 Product description 2 II Marketing environment 2 1 Microenvironment 2 a Customer market 2 b Competitors analysis 3 c Publics 4 2 Macro environment 4 a Demographic environment 4 b Economic environment 5 c Natural environment 6 d Technological environment 6 SWOT ANALYSIS 8 OBJECTIVES 9 SEGMENTATION, TARGETING & POSITIONING 10 I Segmentation 10 II Targeting strategy 10 1 Segment size and growth 10 2 Segment structural attractiveness 10 3 Market targeting strategy 11 III Positioning strategy 11 1 Positioning map 11 2 Possible value differentiation 12 a Product differentiation 12 b Service differentiation 12 c Channel differentiation 12 d People differentiation 12 e Image differentiation 12 3 Chosen competitive advantages 12 4 Positioning statement 12 MARKETING MIX STRATEGIES 13 I Product strategy 13 1 Levels of product 13 2 Product life cycle 14 3 Brand development strategy 14 II Price strategy 15 1 General pricing approaches 15 2 New-product pricing strategies 15 3 Product-mix price strategies 15 a Product line pricing 15 b Product bundling pricing 15 c Optional-product pricing 15 d By-product pricing 15 4 Price adjustment Strategies 16 a Promotional pricing 16 b Psychological pricing 16 III Place strategy 16 1 Marketing channel 16 2 Channel organization 16 a Vertical marketing system 16 b Horizontal marketing system 17 3 Marketing intermediaries 17 IV Promotion strategy 17 1 Promotion mix strategies 17 a Push strategy 17 b Pull strategy 17 2 Promotion tools 18 a Advertising 18 b Public relations 19 c Personal selling 19 d Sales promotion 19 e Direct marketing 20 ACTION PROGRAM 21 CONTROL PROGRAM 23 REFERENCES 24
EXECUTIVE SUMMARY
V
ietMac is a short established company, which has gained popularity among Vietnamese people, especially in Hanoi and Ho Chi Minh City. VietMac is famous for fast-fresh and also unique food called “rice burger”, which combines rice patties, meat such as pork and ostrich and seafood. Also by understanding that customers tend to consume the healthy food, VietMac’s products have a lot of vegetable. They target people with slogan “Live FAST - eat FRESH”. After a year launched, VietMac has developed 6 outlets in Hanoi and 2 in Ho Chi Minh City and was reported to have the sales volume of VND4,155,600,000 (Duc 2011, p.52). This can be considered as a rapid development of a new brand in Vietnam.
VietMac’s targeted customers are white-collars in Hanoi and Ho Chi Minh City, specifically officers at the age from 25 to 44 having salary more than VND5,000,000 per month, who work for 8 hours a day and have only 1 hour for lunch with sufficient financial capacity to afford VietMac’s products every day.
For 2013, this marketing plan is going to aim VietMac to get the total sales revenue of VND9 billion; of which, the net profit is expected to be 20%. Also, the project aims to raise the awareness of officers in Hanoi and Ho Chi Minh City about VietMac to 70% of officers. Moreover, 10 more outlets in Hanoi and Ho Chi Minh City as well as 5 outlets in 3 big major cities – Hai Phong, Da Nang and Can Tho – are planned to open next year.
In order to accomplish these objectives, the 4 marketing mix strategies: product, price, place and promotion strategies would be applied.
Regarding product strategy, the line extension should be adopted as creating additions of features in term of favors, size and kinds of drinks as well as improving the current delivery services.
Besides, with respect to price strategy, by setting the low price, VietMac is currently adopting competition-based pricing for the purpose of overcoming their big competitors. Furthermore, product-mix price strategies such as optional as well as by-product strategy and price adjustment strategies which are promotional and psychological pricing are used in the plan in an attempt to attract more consumers.
Furthermore, the indirect marketing channel should be established together with both vertical and horizontal marketing systems consisting of opening VietMac’s outlets and franchised restaurants in several trade centers like Vincom or BigC.
Finally, for promotion strategies, both push and pull strategies are adopted in this plan. In detail, advertisements would be placed on media for example on television and popular websites such as DanTri or Facebook. VietMac’s employees would be train to satisfy and maintain customers relationship. Also, in order to spread and strengthen VietMac’s image to public, social campaigns such as charity and environmental protection should be implemented.
SITUATION ANALYSIS
Introduction
Company description
Though VietMac was launched in late 2010, it has achieved high position among the fast food industry in Vietnam. Despite only established 2 years ago, VietMac has received a lot of positive feedbacks not only from Vietnamese customers but also foreigners. At the moment, there are 8 restaurants in the chain of VietMac, 6 in Hanoi and 2 in Ho Chi Minh City (BaoMoi 2012). In addition, VietMac also cooperates with several shopping malls in Vietnam such as Parkson and The Garden and sign a franchise contract with a partner in Berlin in order to spread its brand in both Vietnam and overseas (The West Australian 2012). For 2012, VietMac aims to develop 40 franchised restaurants in Ho Chi Minh City and gradually expands the market in big cities in Vietnam, for instance Da Nang and Hai Phong (Nhi 2012). Although being a highly emerging phenomenon in the fast food industry in Vietnam, VietMac still have some big competitors which are KFC, Lotteria or BBQ.
Product description
With its slogan “Live FAST - eat FRESH”, VietMac’s rice burger not only bring to its customers the same convenience as the popular brands of fast food do like KFC or BBQ, but also drives customers in the fresh-oriented way with low-fat ingredients, which are good for health. Additionally, with rice patties instead of bread, VietMac desires to make customers feel familiar as they are enjoying the Vietnamese traditional food and unique as they have not seen rice burger before in any fast food restaurant. VietMac’s products limit the usage of grilled, fried ingredients. Moreover, the complementary products of rice burger are only chosen for sale if they are really good for health. Currently, there are many combos of rice burger which are combination of rice and seafood, chicken, beef or ostrich combo and various types of vegetable such as salad, tomato or bean coming along with tea and orange juice as drinks (VietMac n.d.).
Marketing environment
Microenvironment
Customer market
Consumer market: VietMac now has more customer. The annual growth rate of VietMac’s customers every month is more than 20%, even 40% per month (EQVN 2012). VietMac’s main buyers are teenagers, single professionals and young families.
International markets: VietMac now has two more restaurant in Berlin (Germany) and London (England). Their customers are Vietnamese people and students who want to eat traditional food and do not have enough time to cook.
According to Nielsen’s Vietnam Grocery Report 2011 (p. 40), 95% of Vietnamese consumers list health as their top priority. Thus, one of the competitive advantages of VietMac is the fresh and less-cholesterol ingredients of their food.
Strengths:
* Various types of customers bring more profits to VietMac; * Raise attention to foreigners and attract them by new kinds of food.
Weaknesses: VietMac may face problem of pricing or environmental policy by governments in foreign countries.
Competitors analysis
VietMac is now competing with many giant brands in the highly competitive fast food market in Vietnam. There are 2 notable competitors of VietMac: KFC (Kentucky Fried Chicken) and Lotteria. Phuong, CEO of VietMac, mentioned in an article of Vietnam Investment Review (2012), stated that KFC accounted for 60 percent of fried chicken market share, while Lotteria occupied 60-70 percent of hamburger market share. Those figures indicate that the 2 competitors all have high market share. Phuong further pointed out that the remaining market share was divided among other pizza and spaghetti brands.
KFC – Kentucky Fried Chicken: In 1997, KFC was the first fast food brand emerging in Vietnam. Until now, KFC Vietnam has expanded their business with a large number of restaurants - up to 125. In addition, according to Nam, KFC Vietnam’s marketing director, cited in the same article on Vietnam Investment Review website mentioned above (2012), their growth rate per restaurants is from 20 to 30 percent. Moreover, they open many restaurants in the very competitive location, such as in Parkson, Vincom and the Garden. However, KFC food has the quite high prices that not everyone can afford it.
Lotteria: One of KFC Vietnam’s main competitors, which also has a lot of fast food restaurants, up to more than 120, according to Lotteria Vietnam’s sale manager Tam (2012), cited in the same article on Vietnam Investment Review website above. The frequency of appearing on Korean dramas accompanies with the rapid growth of Lotteria in Vietnam. Compared to KFC, Lotteria’s food price is at the same level, which means it is quite high.
While international fast food brands have become familiar to Vietnamese customers, the local fast food producers are expected to be rearranged as more players jump in the game.
Bui Tang from the University of Hawaii stated that VietMac food is a combination of traditional tastes and Western food (The West Australian 2012). It is a creative idea to make new food with familiar Vietnamese ingredients with new recipes and new eating habits. In addition, hamburgers are usually pre-made and pre-packed that are not fresh from the oven, thus lack of customization.
Moreover, VietMac has the competitive level of price: paying from VND27,000, customers can have a fresh and healthy meal with rice-burger, while they have to pay around VND45,000 for a meal in KFC or Lotteria.
Strengths:
* Products with familiar tastes with Vietnamese people; * More hygienic and healthy with less fat and less calories ingredients; * Lower price than other fast food brands.
Weaknesses:
* VietMac has to make great efforts to compete with existing leaders in Vietnamese fast food market; * They own few outlets, while other brands have many restaurants near schools and offices.
Publics
A number of articles introducing VietMac’s products and their services are placed on several popular online newspapers websites such as Kenh14, BaoMoi and 24h.
Strengths: Being the new fast food brand that gets much attention from publics, more people will have awareness about VietMac. Thus, this may bring more customers to VietMac’s business.
Weaknesses: If any scandals happen, a lot of people may know and the possibility is that they stop buying VietMac’s food. As a consequence, VietMac may lose reputation and profits.
Macro environment
Demographic environment
There are approximately 32% (27,460,000 out of 86,927,700) people aged 25 to 44 among the urban area in Vietnam (Nielsen 2012, p. 41). Additionally, as estimated by Nielsen in the same report (p. 38), about 35% of the urban population in Hanoi and Ho Chi Minh City has the income of VND4.5 million to VND7.5 million (class C) per month. Therefore, about 1 million people between the age of 25 and 44 of the urban population with this amount of income in two biggest cities in Vietnam are able to access to VietMac’s products.
On the other hand, the data of average urban population by province which was collected by General Statistics Office of Vietnam (GSO) in 2011 illustrates an upward trend in the urban population in Hanoi and Ho Chi Minh City - where VietMac’s stores are located.
Figure 1. Adapted from: GSO 2011
Opportunities: VietMac has potential to increase the number of customers in two biggest cities.
GSO (2011) also recorded an increase in urban population of Hai Phong, Da Nang and Can Tho, the other 3 major cities in Vietnam. Nielsen (2012, p. 38) reported that the household income band class C among this population is about more than 40%: Cities | Urban population (2007 – 2010) | Household income band class C | Hai Phong | 784,000 – 870,700 | 52% | Da Nang | 590,600 – 791,800 | 45% | Can Tho | 723,000 – 828,700 | 39% |
Opportunities: expand brand to other cities.
Economic environment
According to GSO (2012), the average income of Vietnamese people increase significantly from 1999 to 2010, especially in the urban areas.
Figure 2. Reproduced from: GSO 2012
Opportunities: The higher income means the more purchasing power, the customer are easier to afford our products.
VietNamNet (2012) points out that although the inflation rate of Vietnam are increasing recently, but actually people still keep the spending level of more than a half of their income (52.9% in 2010) for food.
Opportunities: Food industry still has chance to grow despite of the crisis economy in Vietnam.
Natural environment
The main materials for rice burger are rice, meat and vegetables. Therefore, the weather or the skills of farmers directly affect the quality of products. Any change in the weather and the method of growing plants and animals are highly important.
Opportunities: Agriculture still plays an important role in Vietnamese economy, so it is easy to purchase the necessary ingredients.
Threats: If there are problems occur to agriculture such as flood or drought, VietMac may suffer from the shortage of materials.
The raising of petrol’s price pushes all the prices of other products increase. That means the prices of materials also increase, such as rice (Food and Agriculture Organization (FAO) 2012).
Figure 3. Reproduced from: FAO 2012
Threats: The cost of producing will absolutely increase if all material’s prices rise.
It is clearly to see that the pollution is one of the most concerned issues in Vietnam.
Opportunities: If VietMac has the sustainable strategies, they may increases their reputations and public images.
Technological environment
As estimated by the General Statistics Office (GSO) at the end of May, 2012, about 32.3 million people – approximately one-third of the Vietnamese population – are Internet users, which marked the increase by 13% from the same period in 2011. According to a 2012 report of TNS Vietnam, 67% of them go online daily and 80% research brands through the Internet.
Figure 4. Reproduced from: TNS Vietnam 2012
In fact, VietMac is currently using a website for the purpose of presenting their products as well as giving information about their contact details (address, telephone) and allowing customers to order online. Additionally, the website is established in dual languages – Vietnamese and English – it therefore be able for foreign customers in Vietnam to order VietMac’s food easily.
Opportunities:
* Faster and more flexible in transactions for customers; * VietMac might be known faster through people spreading its website to the others.
Threats:
* Elderly people might face difficulty in using the online payment method; * Rumors or untrue information could be spread easier.
SWOT ANALYSIS INTERNAL
FACTORS
INTERNAL
FACTORS
EXTERNAL
FACTORS
EXTERNAL
FACTORS
| Strengths:- Various types of customers - New kinds of food- More hygienic and healthy with less fat and less calories ingredients- Familiar tastes of Vietnamese traditional food- Lower price than other fast food brands- Gets much attention from publics, more customers to VietMac’s business | Weaknesses:- Facing problems of pricing or environmental policy by governments in foreign countries- Needs more efforts to compete with existing leaders in Vietnamese fast food market- Few outlets, while other brands have many restaurants near schools and offices.- May lose attention and profits if any scandals happen because many people know this brand | Opportunities:- More customers in 2 Vietnam’s biggest cities. - Potential to expand business to other cities;- Food industry still has chance to grow despite of the crisis economy in Vietnam; - Agriculture plays an important role in Vietnamese economy, so it is easy to purchase the necessary ingredients;- Faster and more flexible in transactions for customers- VietMac might be known faster through their websites | SO strategies:- Taking part in sponsored events to create awareness among people (P4)- Charging for products in combo sets no more than competitors (P2)- Making discounts in weekend nights to attract more customers because these nights people often go out with their friends or family to relax (P2)- Opening several outlets in Big C in big cities such as, Hanoi and Ho Chi Minh City in order to seek more customers (P3) | WO strategies:- Open outlets near offices or big buildings to directly sell VietMac’s food for officers - the target customer of VietMac (P3)- Make an advertising for the process cooking VietMac’s food to stress that the company cares about environment (P4) | Threats: - The cost of producing will absolutely increase if all material’s prices rise - Rumors or untrue information could be spread easier | ST strategies:- Public the reliable suppliers of healthy food on the official VietMac’s website (P4)- Make an agreement with the suppliers to have a stable price for ingredients in a long term to limit the price change too many times (P1) | WT strategies:- Develop new sizes, new tatses or ingredients for products (P1)- Paying appropriate amount of salaries for managers to limit scandals in terms of serving and cooking |
OBJECTIVES Types | Time frame | Description | Financial | Revenue | By the end of 2013 | Get VND9 billion in sales volume (about doubled comparing to 2011’s) | | Profit | By the end of 2013 | 20% net profit margin | Marketing | Image | By June 2013 | Raise awareness to 70% of officers in Hanoi and Ho Chi Minh City about VietMac’s brand | | Growth | By the end of 2013 | - Open 5 restaurants in 3 big cities Hai Phong, Da Nang and Can Tho- Develop 10 more outlets in Hanoi and Ho Chi Minh City |
SEGMENTATION, TARGETING & POSITIONING I Segmentation Geographic segmentation | Country | Vietnam | Density | Urban | Region | Hanoi and Ho Chi Minh City | Demographic segmentation | Age | 25-44 | Gender | Both | Income | More than VND5,000,000 per month | Occupation | Officers in Hanoi and Ho Chi Minh City | Education | College graduate | Generation | Y (born between 1977 and 1994) | Psychographic segmentation | Social class | Middle class | Lifestyle | Active and busy | Personality traits | Taking care of health | Behavioral segmentation | Occasion | Regular occasion | Benefit soughts | Quality, service, economy, convenience, speed | Usage rate | Medium user | Loyal status | Medium |
Targeting strategy
Segment size and growth
As mentioned above in the demographic environment part: City | Urban population | Percentage aged 25 to 44 | Percentage income VND4.500.000 – VND7.500.000 | Targeted segment size | Hanoi | 2,709,900 | 32% | 37% | 320,850 | HCMC | 6,157,600 | | 34% | 669,950 | TOTAL | | | | 990,800 |
Segment structural attractiveness
As analyzed before in the competitors analysis part, KFC and Lotteria are the two strongest fast food brands in Vietnam at the moment. In addition, foreign fast food brands are holding a controlling interest rate around 60 to 80 percent in Vietnamese market shares. Therefore, VietMac needs to put more effort to compete with these large existing competitors.
Market targeting strategy
Due to smaller market shares compared to the competitor’s ones, concentrated marketing (niche marketing) seems the most appropriate for VietMac to adopt in order to avoid direct competing with their big competitors.
Positioning strategy
Positioning map
By evaluating positioning map, we can state that VietMac use the value proposition of “more for the same”. With the similar price of about VND70,000 per combo, VietMac brings better quality for their clients. Firstly, the rice in rice burger is more suitable for Vietnamese’s eating habit than KFC’s hamburger. Secondly, VietMac’s products also involve less oil than fried chicken, so it’s good for people health. In order to extend product lines to give customers more such as more choices of flavors, attractive designs, combos, VietMac offers about 7 flavors, 8 side orders, 41 combos and variety kinds of drinks for choice:
Figure 5. Adapted from: VietMac, KFC, Lotteria & BBQ 2012
Possible value differentiation
Product differentiation
Unlike other fast food companies, VietMac uses rice instead of bread to build up the product “rice burger”. Their company also provides the combo having much vegetable such as tomato and salad. Thus, VietMac produces better fast food with high level of freshness and nutrition.
Service differentiation * Clients can order food online via VietMac’s official website and rice burgers are delivered directly to customer’s homes. Also, they can give any feedbacks and complaints for the services; * The hotline number for consultant services is allowed.
Channel differentiation
Currently, all 8 VietMac chain stores in Hanoi and Ho Chi Minh City provide home-delivery services which supports customer to order their products from their home – by online or on phone. This can be compared strongly with other competitors having no delivery service.
People differentiation * Feedbacks from customers that are published on social networking website like homepage or Facebook indicate that VietMac’s employees are friendly and enthusiastic; * The employees working in stores are participated in a training course, where they learn how to serve customers with the best services and attitudes.
Image differentiation
With the image of a penguin in their logo, VietMac wants their customers can perceive their products in the same way when they think about Antarctica, where is the freshest place in the world with no pollution.
Chosen competitive advantages
Based on the five criteria of differentiation, VietMac has potential competitive advantages comparing to their competitors, in relation to: * Product differentiation; * Service differentiation; * Image differentiation.
Positioning statement
To officers, who are in the age of between 25 and 44 having a busy life and only have 1 hour to have lunch but still care about their health, VietMac is one of the best choice that brings the perfect nutrition fitting the common favorite taste of Vietnamese people accompanying with the professional services. VietMac is deserved with their image of “Live Fast - Eat Fresh”.
MARKETING MIX STRATEGIES I Product strategy
Levels of product Levels of product | Details of product | Product improvement | Core benefits | “Live FAST - eat FRESH” | | | Convenience and fresh-oriented food | | Actual product | Brand name | VietMac with “Mac” - ”Meal is Absolutely Convenient” | | | Features | - Less cholesterol ingredients, more vegetable- 7 flavors, 8 side orders, 41 combos and variety kinds of drinks | - Include new flavors and broth- Offering more kinds of drinks | | Design | - Consisting of cooked rice patties and ground meat, vegetables (salad and tomato) and spices (onion, mustard and ketchup) placed inside a sliced rice roll- Variety of rice burgers’ size to serve different demands | | | Packaging | - Liner paper for people who holding food by hands to eat- Serve with dishes for people who use spoon and knife- Plastic box including spoon if customers buy to use at home | | Augmented product | Installation | - Ordering online via website (with both Vietnamese and English language)- Ordering via telephone- Free caramel and yoghurt for customers ordering via those two methods above | Hotline for customers to report late delivery or spoiled food | | Delivering | Free delivery with orders over VND100,000 | Free delivery with orders under VND100,000 within a range of 2 kilometers |
Product life cycle
The following graph illustrates the increase in sales of VietMac in 2011 (after a year launched):
Figure 6. Adapted from: Duc 2011
Since VietMac was only recently established, there is not much financial information about it. After the trial period from December, 2010 to June, 2011, there is a significant growth in sales of VietMac by the following month (about 250%) and after several months of official launching, VietMac’s sales volume increase regularly; in October, 2011, the firm reached the break-even point. In the early 2012, VietMac raise attention among public as this young brand is valued 2.5 million dollars - a figure that 10 times higher than the initial investment value. In other words, after a year established, VietMac has undergone the introduction stage and they are currently experiencing the introduction stage.
As a result of being in the introduction stage, VietMac main objective in the upcoming years is building awareness and attract more customers. Therefore, line extension is the most appropriate brand development strategy for VietMac to adopt.
Brand development strategy Strategy | Line extension | Brand | Existing | Product category | Existing | Implementation | Addition of favors, kinds of drinks, sizes and current delivery services:- New kinds of meat and vegetables to put inside the sliced rice; also offer free broth- New kinds of dessert drinks such as cocktails and fruit-juices- Makes more different sizes to serve more different customers (small size ones for child, large size ones for adults) - Free delivery for customers who buy little but within a close range to VietMac’s outlets |
Price strategy
General pricing approaches
Based on the positioning, the price of VietMac’s products is slightly similar to other competitors. When others offer the price of more than VND70,000, VietMac gives the competitive price of VND69,000 per combo. Therefore, they adopt Competition-Based Pricing.
New-product pricing strategies
By setting a low initial price, VietMac applies Market-Penetration. They keeps lower price than competitors to attract a huge number of customers. They should continue this strategy by reducing the cost of production, such as using additional strategy of price is By-product Pricing or lower cost of logistic.
Product-mix price strategies
Product line pricing
Now, VietMac has about seven flavors, including chicken, pork, beef, ostrich, seafood, shrimp and broken rice burger. The difference in price is caused by these flavors. The special taste of ostrich pushes the price of rice burger a little bit higher than others. The price of pork rice burger is the cheapest.
Besides that, VietMac also offer some side products, such as chicken wing, yam fries, ribs, caramel flan, chicken salad, fruit salad and many kinds of beverages with various price.
Product bundling pricing
To promote for other products beside the main product of rice burger, VietMac offer combo by combining several kinds of products with a lower price. VietMac has been successful in applying Product bundle pricing strategy.
Optional-product pricing
In the near future, VietMac can apply this strategy for higher profit and maximum the satisfaction of customers. By offering the additional choices for their products basing on the main original one, they will charge with various prices. For example, the customers, who willing to pay higher price, VietMac can satisfy them by putting double the amount of meat or they prefer to put some cheese in their rice burger if they want.
By-product pricing
Using this strategy might help VietMac reduce the cost of production. The excess rice burger, which cannot sold in this day, they can sell them for farms to feed animal with cheap price. It is much saving than throw them away as the waste.
Price adjustment Strategies
Promotional pricing
In order to increase sales, VietMac offers discount in cash for their clients. They introduced the vouchers via muachung.vn, which discounted about 40% of price for a combo for two people. Also, they apply the promotion by when delivering rice burger, customers can get one more caramel or yogurt for free.
In addition, like some other pizza store, VietMac can follow them in terms of they offer a day, that clients can buy one get one free, or discount on some special day, such as on the October for the world Food Day.
Psychological pricing
The most of combo’s price is VND69,000 instead of VND70,000. Using that price can make customers feel much cheaper when purchasing products.
Place strategy
Marketing channel
Levels of intermediaries: VietMac should use indirect marketing channel to bring their products to customers by implementing franchise system. Sofia, cited in Business Times (2010), stated that there are a huge benefits that franchise business can bring to Vietnamese firms. In addition, she pointed out that implementing franchise system can grow revenue for businesses in Vietnam up to 50 percent annually. Therefore, using franchising can support VietMac to afford the high sale revenues. However, they have too small number of outlets compared to their existing competitors, such as KFC and Lotteria. Thus, to serve more customers, this brand needs to open more outlets as many as possible to make their food more available for customers.
Channel organization
Vertical marketing system
By having its independent franchised restaurants joining together to obtain the common goal of increasing sales, VietMac adopts Contractual Vertical Marketing systems.
According to BaoMoi (2012), VietMac service firm sponsored retailer franchise system is valued at more than $2.25 billion. VietMac now has 7 outlets in Hanoi located at some trade centers such as Parkson and The Garden and on popular streets such as Bui Thi Xuan and Ly Thuong Kiet, while in Ho Chi Minh City, there are 2 outlets at Phu Nhuan and Go Vap District. It indicates that this marketing system can grow VietMac’s profits and values dramatically after only 10 months. However, Nhi (2012) states that the cost of owning rice burger franchise is not expensive, but it is difficult to ensure the original good taste of rice. Therefore, this system may bring some trouble for VietMac in managing the activities of their franchises.
Horizontal marketing system
VietMac places their franchises at some shopping centers, such as Grand Plaza, The Garden and Parkson, where a lot of people go shopping. This is a strategy to have more opportunities to attract more customers.
Marketing intermediaries
VietMac chooses intensive distribution which they sell their products in as many outlets as possible. Fast food is a kind of convenience products and using common raw materials, such as rice, meat and vegetables. This brand puts their outlets in some addresses located in city centers and some shopping malls, where customers can find VietMac food easily when they have demands. This distribution brings VietMac food more opportunities to become a customer’s favorite dishes. If VietMac can develop their outlet system to become the most popular fast food brand in Vietnam, they may increase customer satisfaction and receive the good reputation. Additionally, this strategy can help VietMac create the good image in their stakeholder minds.
Promotion strategy
Promotion mix strategies
Since having numerous outlets in 2 big cities in Vietnam, both Push and Pull Strategy are applicable.
Push strategy
Because of being a new brand in Vietnamese fast food market, coming along with the fact that VietMac’s food has reached only 2 big cities in Vietnam, the firm need to push their products through the marketing intermediaries, specifically its outlets. To illustrate, VietMac can adopt trade promotion to encourage their marketing channels like Parkson and The Garden or their franchises to give them more sales space as well as advertise for them and promote their products to consumers. For instance, a price-off can be offered to promote franchised restaurants that achieve the target sales of VietMac.
Pull strategy
VietMac was established in late 2010, while their competitors such as KFC and Lotteria were launched in 1997 and 2004 respectively. As a matter of time, VietMac’s competitors have strong brand recognition. Thus, several marketing strategies are necessary to convince customers to consume VietMac’s food. To begin with, VietMac can adopt advertising strategy for example contacting with some popular news websites such as DanTri and VnExpress to place their banners on these sites, or pay the Vietnam Television to put their advertisement before news program at 7 PM and after 8 PM every evening (golden hours) to raise attention to more people. Additionally, VietMac can take part in some public events such as charity or environmental protection campaigns in order to strengthen their image.
Promotion tools
Advertising
* Setting the advertising objectives: Because VietMac is in a highly competitive market with many giant brands, coming along with the adoption of the new product line strategy, the firm should encourage customers switching to their brands as well as convincing consumers to purchase. VietMac can launch this strategy by place advertisements on some popular websites and TV programs or indirectly compare their products with others’ in term of price and fresh ingredients. Therefore, both persuasive and comparative advertising should be used. * Setting the advertising budget: Since being a new and low-share brand, VietMac need more advertising as well as large advertising budgets to build awareness. Additionally, being in a high competitive environment requires VietMac to advertise more heavily to be noticed. Thus, Objective-and-Task is the most suitable approach to set the advertising budget for VietMac. By this method, a specific amount of money is carefully considered and allocated to specific levels of planning. Consequently, at the end of the period, VietMac can find out whether their money has been distributed appropriately for each task. * Selecting advertisement media: According to the 2012 Recession and Growth Opportunity report of TNS, television and internet are the 2 media that have the highest daily user rate. Therefore these media are the 2 most appropriate types for VietMac to spread their image: Medium | Media Vehicles | Frequency | Description | Television | VTV1, VTV3 | 6:30 PM – 7 PM and after 8 PM every night (golden hours) | Middle-aged people watch TV the most between 6:30 PM and 8 PM; VietMac’s advertisement will be shown right before the News and before the game show or Vietnamese drama program, the 3 most anticipated programs | | StarMovies, HBO, MTV | | After 8 hours working day, people tend to relax at home by watching films or music; VietMac’s advertisement should also be placed at the period of time between 2 different programs are broadcasted | Internet | VietMac’s website | Every day | VietMac can actively update their most up-to-date information about new flavors, new combos or contact details. In addition, images about their fresh ingredients being posted on the website could create trust in customers’ perception | | VnExpress, DanTri | During the advertising rental period | VnExpress and DanTri is the 2 most popular and frequently visited electronic newspapers in Vietnam. Thus, an advertising banner should be placed at the homepage to raise attention to officers who visit these websites everyday |
Public relations
To build a strong image of VietMac in the customer’s perceive, they should introduce some social campaigns in order to enhance the people awareness about VietMac’s product.
Initially, VietMac should have some programs of giving free rice burger for people suffering from disaster. Or, they can share about VND2,000 sale revenues of each burger as a donation for helping poor people in remote areas.
They can also organize the conferences where the invited nutritionists inform VietMac’s clients about how to keep their health.
Some policies should be implement to support farmers, who is the main supplier for VietMac, in terms of how to grow rice and animals freshly.
Environmental protecting campaign should be established by using one-time-used packaging paper and fresh materials in producing food.
All these activities should be public on the official website, newspaper to make VietMac be more well-known.
Personal selling
Training employees with emotional labor to satisfy the demand of customers, selling come along with explaining the benefits to health when using VietMac’s food. Salesperson at the outlets also need to persuade customers by introducing the new sizes and new flavors of rice burger available for specific demand of different customers, as well as presenting discount and gifts that customers can get when eating at VietMac. Thus, because of being informative and friendly, VietMac’s employees could create the positive attitude of customers towards the firm.
Sales promotion Price packs | Imprint the reduced price on the menu that if customers buy one combo with one potato and one drink, they have 20% discount | Premiums | Offer free potato, caramel and drink when customers buy one combo at a certain day each week (like Al Fresco Pizza) | Advertising specialties | Offer free office requisites such as ball point pens or notebooks that have the logo of VietMac on them | Patronage rewards | A frequent shopper card should be established. If a customer has 10 ticks in his/her card, he/she can have a free combo chosen by his/her own |
Direct marketing
By using Patronage Rewards and delivering products to customer’s houses, VietMac can gather a lot of demographic and geographic of their clients. The essential information they can get should be the telephone numbers and the emails. As a result, VietMac can inform their new products, new favors and new incentives to their existing customers via email or texting messages.
Currently, VietMac is applying viral marketing. They have the page in some social networking websites, such as Facebook, where the picture or promotional news can be share by anyone reading this. This method helps them increase the number of people knowing about their brand.
Finally, the location of VietMac stores can be put in the vending tourist information machines around Hanoi and Ho Chi Minh City for foreigners to search, which is called Kiosk Marketing.
ACTION PROGRAM | Task | Responsibility | Timeline (from January to December 2013) | Cost | | | | Jan | Feb | Mar | Apr | May | June | July | Aug | Sep | Oct | Nov | Dec | | Product | New kinds of vegetables and drinks (e.g: frappe) | R&DManufacturingPurchasingMarketingSale | | | | | | | x | x | x | x | x | x | 40 mil VND | | More different size of products (e.g: for children/adults) | | | | | | | | x | x | x | x | x | x | 20 mil VND | Price | Make optional price for customers (eg. Adding cheese or double meat) | R&DSale ManufacturingPurchasingMarketing | | | | | x | x | x | x | x | x | x | x | 30 million VND | | By-product pricing: sell waste to needed farmers for production | | | | | | | | | | | x | x | x | 50 mil VND | | Discount in special occasions such as Christmas and Woman Day | | x | | x | | | | | | | x | | x | 20 mil VND | Place | Open more outlets in more shopping malls such as BigC and Vincom | R & DSale & Distribution Business Development & Finance Accounting | | | | | | x | | | | | | x | 1 bil VND | | Expand the total area of restaurants | | | | | | | | x | x | | | | | 100 mil VND | | Expand to other major cities (Da Nang, Hai Phong) | | | | | | | | | x | | | | x | 1.5bil VND | Promotion | Place advertisements on TV and popular websites | IT, Marketing & PR, Finance & AccountingR&D | x | x | x | x | x | x | x | x | x | x | x | x | 80 mil VND | | Training salesperson with emotional labour | | | x | x | | | x | x | | | x | x | | 20 mil VND | | Charity campaigns | | | | | | | x | | | | | | x | 40 mil VND | | Advertising specialties: make pen and notebook | | | | | | | | | | x | x | x | x | 10 mil VND | | Direct marketing through Kiosk Marketing | | | | | | | | | | | | | x | 10 mil VND | | Upgrade official Website with more information | | x | x | x | x | x | x | x | x | x | x | x | x | 10mil VND |
CONTROL PROGRAM Goals | Measure performance | Action | How to control | Profit and sales growth | By the end of 2013:- Get VND9 billion in sales volume (about doubled comparing to 2011’s)- 20% net profit margin | - Contact sale department to know how fast the new products are sold- Short surveys about which taste customers do like most and collect feedbacks- Ask R&D to base on customer feedbacks about products to improve the quality of food- Contact with Purchasing, Manufacturing and Sale department to know about how fast the products are sold after a price strategy is done | Based on products, prices, placesand promotion strategies | Market share growth rate | By the end of 2013:- Open 5 restaurants in 3 big cities Hai Phong, Da Nang and Can Tho- Develop 10 more outlets in Hanoi and Ho Chi Minh City | - Monthly have meetings with the new franchisors to know about how these franchises is doing - Analyze the statistics that collect from Finance & Accounting Department to - Training staff to improve the customer services | Place strategies | Customer awareness | By June 2013:Raise awareness to 70% of officers in Hanoi and Ho Chi Minh City about VietMac’s brand | - Short survey on website about the new updated version of VietMac website to know how customers think about its information and designs.- Ask people who go to some shopping centres or supermarket where VietMac’s restaurants are located to use their trials- Ask Finance& Accounting Department to analyze how much revenue is growing after a promotion- Ask Marketing& PR Department to base on Sale and revenue statistics to indicate strengths and weaknesses | Promotion strategies |
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