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Sabeco corporation
- 1. SABECO CORPORATION Internet MarketingFinal Project Group: Memorable Nguyen Ngoc Tuyen (Leader) Thai Thi My Trinh Ho Thi Da Thao Cong Thi Nhu Nguyen Lecturer: Pham Toan Thang
- 2. BACKGROUND The historical developmentof Sabeco Corporation is linked to the process of the powerful and unshakeable development of Saigon beer’s trademark which leads the trademark of beer in Vietnam. Since June 01, 1977, South Beer Corporation absorbed and managed Cho Lon Beer Factory from BGI manufacturer, which was established Saigon Factory. Now it becomes Beer- Wine-NGK Saigon Sabeco Corporation and gets a lot of new members such as Wine Binh Tay Company, Chuong Duong Beverage Company, Crystal Phu Tho Company, and Commercial and Service beer-wine NGK Saigon Corporation, which are distributed in all over Vietnam. The primary factory is located in Ho Chi Minh City. MICRO ENVIRONMENT STRENGTHS With more than 37 years of industry experience and trademark promotion, Sabeco Corporation has become the biggest player in Vietnamese Beer Market, whose capacity is more than 3 billion liters of beer last year, according to the report from Vietnamnews.vn published on Thursday, 10 July 2014. As a result, the market share of Sabeco leads in Vietnamese Beer Market by 51.4 per cent in 2014. In addition, Sabeco has 15 branches in all over Vietnam. This reduces sharply the transportation’s costs so that this also would lead to the prices of Sabeco Beer to be cheaper than any competitive brands. Moreover, Sabeco collaborates with 9 companies, which produce essential materials that are used for Sabeco’s manufactories. This represents that Sabeco always has suppliers source stably. All these followed above are the
- 3. reasons why theprices of Sabeco’s products are quite cheaper than others. This is also strength of Sabeco Corporation. In fact, consumer are extreme flexible with the price of products. Market share in Vietnam’s beer market in 2014 Source: Brands Vietnam Therefore, they will be interested and choose Sabeco’s products. Furthermore, Sabeco has many kinks of products with different prices that would give their customers flexible choices in use. To make less severe in costing of transportation and expand the market, Sabeco has established a department in Phnompenh-Campuchia. It is a potential market of beer in South-East-Asia.
- 4. WEAKNESSES Beside the numberof strengths, Sabeco also has some weaknesses, which must be improved to compete with others. One is the taste of beer is not delicious compared to competitive brands. In specifically, Heineken and Tiger are more delicious than some kinks of Sabeco’s products. The second one is the design of package is not attractive in comparison to Heineken and Tiger. Additionally, the most important weakness is behind in e-presence, which would miss the amount of opportunities in sale and promotion. MACRO ENVIRONMENT OPPORTUNITIES In recent years, consumer has become heavy internet-users. This is an opportunity for Sabeco Corporation to promote their brand and their products to customers also. At present, Sabeco lunched website www.sabeco.com.vn and Bia Saigon fanpage to promote their products and make a forum for their customer’s interaction. These are the very important thing for receiving feedback from their customers so that they will have changes to adopt customer demands. More importantly, Sabeco is the leader in Vietnamese Beer market with its population of 80 million people consumed 2.9 billion liters of beer in 2013. It is a very big market that would provide potential opportunities for Sabeco in increasing sales and profits as well. Moreover, according to Ms. Vu Thi Minh Hanh – deputy chief of the Health Strategy and Policy Institute under the Ministry of Health, there are ‘80 percent of young people in Vietnam drink beer or alcohol, with women accounting for 36 percent.’ This represents that there are a large amount of
- 5. people using beerand this is also an essential opportunity for developing some new kinds of beer for women. Additionally, the amount of beer used in foreign market is increasing highly. In fact, according to website www.statista.com, there are ‘about 42 percent of the sales of the bar and nightclub industry is made up of beer and ale sales’ and ‘according to Scarborough Research, more than 24 million people in the U.S. bought beer at a nightclub or bar, while wine was bought by around 7.5 million customers.’ With the performance of export to more than 15 countries around the world, Sabeco will have an increase in exporting beer so that they could raise their sales. These would lead to the increase in revenues and profits as well. All in all, there are so many advantages opportunities to be successful in doing business for Sabeco Corporation because of the significant development of technology, the large amount of recent customers, the dramatically development of population, and the increasing of people using beer in the world. THREAT Firstly, the unstable laws and policies in Vietnam could affect on the costs of producing products. In specially, in 2005 the Government taxed at a rate of 75 percent just for alcoholic drink but in 2010 they not only taxed on drinks but also taxed on the packages. This makes a difficulty to control the changing prices to adopt the satisfaction of customers. Moreover, the taxation costs too much as the table followed below:
- 6. Secondly, because ofthe characteristic of doing fuel business is a monopoly so that the price of fuel is always increasing. Thus, the costs of deliveries for beer are also increasing. This is a disadvantage effect on strategy business campaigns. Thirdly, Vietnam has joined to WTO so that Sabeco have to compete with many international competitive companies such as Budweiser. This could make a decrease in prices or an increase in expenses of advertisement. Fourthly, if there were natural disasters taken place, the raw materials would be affected by increasing the prices. Lastly, in recent years, the level of knowledgeable people has increased. They already have known that drinking too much beer could make the disadvantages for their health. Additionally, people are now taking care strongly on their health. Therefore, the perception of people tends to use healthy products such as green tea, bird nest, fruit juice, etc. This could make a decrease in sales of beer. This also would lead to a falling in revenues.
- 7. COMPETITIVE ANALYSIS BEER SAIGON HA NOI HEINEKEN( VIETNAM) PRODUCT Saigon Larger Saigon Export 333 Cans Saigon Special 330ml /450ml Bottle Lager beer Steam beer Truc Bach Classic Beer Bottle 33CL Can 33CL STR Bottle PRICE Saigon Larger : 195,000VND (Bottle) / 295,000VND (Can) 333Cans: 215,000VND 330ml : 210,000VND (24 cans/ bin) 330ml/bottle: 8,000VND 330ml/can: 16,500VND 500ml/can: 28,000VND Bottle : 15,500VND SEGMENTATION In domestic distribution systems: 10 systems stretching from South to North. In the world: distributed in many different countries. Product distribution system concentrated largely in northern markets. Marketing mix Focus on the premium market: those with high income Marketing mix MARKETING ONLINE Website Website Y!M Skype Email Website Facebook Twitter Apps PROMOTION There are many different promotions for each kind of beer. Ex: Buy 333 beer win million money. Cover bottle on now- receive money with Saigon Beer. Promotions from time to time Ex: Passionate football - Discover unexpected. Buy small bottles win big bottle Heineken is not focused on the specific promotions, just focus on creating sequence of events in each period and region.
- 8. PRODUCT 333 Premiums andSaigon Special Beer: Advantage: 333 Premium is a long traditional product which is not only loved by domestic customers but also the international ones. Beer 333 Premium is exported to more than 17 countries in the world such as America, Australia and so on. This product is made with all fine ingredients: Water, Malt, Rice, Hops. Saigon Special is a product which has 100% Malt ingredient (no rice); it is produced on the most advanced and modern technology line. This product has a unique flavor which is different from all others on the market. It’s also loved by international customers. Disadvantage: The outlook of these products is the biggest problem. The packages are not fit with the quality of the products. They are too casual, not so special and can’t catch lots of attentions. Way to improve this product: Change the outlook of the product by adding more interesting and attractive colors and reducing the white color. Moreover, changing the logo to make it looks more powerful and expensive is also a great way to capture the attentions of high class people. New plan for the company: Create new product: Saigon Glamour:
- 9. This is theproduct which is made for women. It is made with the low degree of alcohol and won’t make lady to get drunk easily. The flavor is not so different from other beers. Moreover, the beer has a pleasant smell which will make women feel comfortable. The package for this bottle will use tender colors such as pink and golden. The shape of the bottle will be thinner and taller. PROMOTION Company often gives out promotions to different kinds of beer in some special occasions such as Tet, Company’s foundation day, World Cup, etc. Company uses many different ways to attract customers: give free gift when buying product, price discount, give out chances to win valuable prize such as cars, gold... Here are some promotion campaigns from the company: “MUA 333 CÀO RA TIỀN TRIỆU” this promotion is for 333 premium cans and applied in more than 35 cities in Vietnam. All the winners will receive valuable prize: 100 first prizes, each prize equals 33 million VND; 333 second prizes, each prize equals 1 LCD TV and thousand of third prizes, each prize will be a free 333 premium can. Way of improvement: Promotion is a good way to capture customers. However, lots of companies also use this as the way to have more customers. Therefore, Sabeco should choose the best way of promotion to become stand out in the market. The company should give higher value of the prizes and always combine their products in every prize. Moreover, they should allow everyone who buys their product can win a prize (a prize can be a can of beer) so that people will be more attractive to their products.
- 10. PLACE Offline channel Sabeco hasestablished stores not only in Vietnamese Market such as Ho chi Minh, Hanoi, Can Tho, Da Nang and so on but also in foreign market with over 15 countries such as US, Kampuchea, Canada, etc to sell their products. However, it is not enough condition to improve their sales. Therefore, in recommendation, Sabeco should have more warehouses not only reducing their costs but also promote their image. Additionally, Sabeco should build more billboards on the street corners and restaurants as well. More importantly, Sabeco should give PG teams to the restaurants to sell products and promote their brands. Online channel Firstly, Sabeco should create a forum on their website to motivate their customers interacted with company so that they could receive customers’ feedback. For instant, Sabeco should make weekly event to provide information about their products and their image also. Moreover, Sabeco should collaborate with some famous websites, which have a strong traffic to put their banner to get impressions from customers. Secondly, Sabeco should post more information about their products on their fan page to give their customers are well known about the benefits of using their products such as customers can win the game with very high value so that they would buy more products. Additionally, Sabeco should use more social network technique such as Twitter, Zalo, Line, Viber etc to advertise their promotion.
- 11. Lastly, there isa new method to promote products recently. It is the Social-Wifi-Marketing, which will develop rapidly in few months. Sabeco should update this method to keep up with the development of marketing campaign. Vietnam has some places using Social Wifi free such as Da Nang, Hai Phong. Therefore, Sabeco should use this method on these places to promote marketing campaign. PRICE The company chooses the suitable price for its product. The prices are around: Package of 24 cans (330ml): 333: 215,000VND Saigon Special: 280,000VND Package of 20 bottles (330ml): 333 Premiums: 130,000 VND Saigon Special: 190,000 VND Way of improvement: Lots of people are using Saigon Beer. Therefore, the increasing price is not become a normal thing. However, the price shouldn’t raise so much. It should increase only 1%-2% from the current price so that the customers still please to buy the product. BUYERS/CUSTOMER Vietnam is a country with a population of nearly 40 million young people ages 20 to 40, the age of the consumption rate of the highest beer products. Production of beer consumption in Vietnam
- 12. is forecast tocontinue growing in the coming years. In this intermediate beer market is forecast to achieve the fastest growth. Segmentation by geographic area: the domestic market and overseas markets. • Larger Saigon: Saigon Beer bottles were produced and widely distributed throughout the country. • Export Saigon: Saigon Beer bottles were produced and widely distributed throughout the country, especially from South Central back on. • 333 Can: 333 Beer cans were produced and widely distributed throughout the country. • Saigon Special: Special Saigon Beer bottles were produced and widely distributed throughout the country, especially in big cities like Ho Chi Minh, Hanoi, Da Nang, Can Tho and Nha Trang. Segmentation by income: the beer company's products SABECO segmented into three main markets • Bia Hoi: focus on ordinary class with affordable price. • Segment pasteurized beer cans or bottles: focus on the middle class, currently, is gradually extending in economic growth. • The smallest segment is a premium beer with a relatively high price: This product line focuses on wealthier and upper class.
- 13. ALTERNATIVE EVALUATION INCLUDINGCRITERIA Alternative 1 for PRICE: Increase price up to 10% (more than 10,000VND) for special occasions such as Tet holiday, Wedding season, etc. because lots of people will drink beer during these occasions. Decrease the price from 2% when buying more than 1 package, 5% when buying more than 4 packages. With this plan, people will buy more and the company still can make profit. Alternative 2 for PROMOTION: On the market today there are many brands of beer, from popular to luxury, they offer many attractive promotions. To compete, Saigon beer should have more specific plans and more consistent. Saigon beer market focused on the lower and middle class (people with low incomes and average), so to increase product sales, the company needs to offer promotions tied to life people. For example, the upcoming World Cup will take place; most of the beer brand will simultaneously offer different promotions. If there is not anything special, Saigon beer may be blurred. Make a huge promotion for World Cup “Enjoy World Cup 2014 with Saigon Beer”. The rules for this campaign are: 10 special prizes: each winner will receive a vacation trip to Brazil for 2 people and 2 tickets to the stadium to watch the final match + one package of Saigon beer, 300 second prizes: each winner will receive 50 million VND + one package of Saigon beer. There are also thousands of third prizes with lots of interesting gifts (one package of 12 cans Saigon of beer or T-shirt with logo of Saigon beer…) The total of the prize will be more than 20 billion VND.
- 14.