July 14, 2014

Ho Chi Minh, Vietnam

EXECUTIVE SUMMARY

Kinh Do bakery is one of the most famous company about product cookies at Vietnam. Company has a lot of kinds of products like snack, plan, noodles, oil, etc. in 1993, kinh do was found by Tran Kim Thanh with net income 14 billion VDN and 6000 labor. Now, kinh do company is developing many stores at HCM city and spread out 64 provinces with 150 distributors. 40.000 stores and export 20 countries in the world like American, Singapore, Taiwan, etc. kinh do company mobilizes more stockholders to maintain and expand market at each provinces. Kinh do bakery was set up with the aim bring the best quality to customers, make sure health and help customers enjoy.

And then, we will present more details about a lot of problems of Kinh do company.

(Taken charge by Thu Thao)

PROBLEMS

Binary with the strategies and measures of 4P (product, pricing, place and promotion) The company began participating in the business sectors with each sector very large scale the company to reorganize business operations of confectionary segment oriented management separation between the plates together to ensure monitoring and evaluating the performance of each segment is best.

KDC reorganization is collecting same items together. Specifically:

Transfer of all assets, interests, rights and obligations related to the confectionery business from KDC to Binh Duong Kinh Do Corporation (BKD).

BKD will issue shares to increase charter capital to accept the transfer of all assets, interests, rights and obligations of residential investment in value NKD. KDC will contribute capital to BKD by transferring operations of confectionary business and residential investment in value NKD for BKD.

After the restructuring, the KDC will have the specialized industry including: Confectionery, Dairy Cream, Instant noodles, cooking oil, coffee, Retail.

(Taken charge by Thu Thao)

OBJECTIVES

2013, net revenue KDC is 4,561 billion. Profit after tax 493 billion. The dividend is 20% / par value in cash - equivalent KDC spent 378.8 billion as dividends.

2014, KDC plans to 5.150 billion in net revenue, up 12.9%. Profit before tax 660 billion, up 6.6%. Plans 20% dividend / par value in cash

Recently completed new capital issued 40 million shares to strategic investors, earning more than 1,700 billion. This activity is located in the capital calling plans to develop new industry leading company set out from the end of 2013.

To implement this strategy the next 10 years, KDC cooperation link to Vewong Saigon with famous brand MSG instant noodles and A-One. KDC does not disclose specific figures on estimated sales from wheat fields to bring the package, but executives revealed KDC expects revenue from instant noodles will equal the current business confectionary KDC.

KDC will also become a strategic shareholder of the Company Vocarimex cooking oil - a business is owned and managed by the Ministry of Industry and Trade, the current KDC has signed initial cooperation with Vocarimex Company.

KDC involved in the coffee sector through partnerships with Phin Deli Coffee Company. Expect this collaboration, two sides can better exploit the domestic market, and exports coffee to the United States.

(Taken charge by Thu Thao)

Purpose of SWOT :

The purpose of making SWOT is to analyze strength , weakness as well as opportunities to prepare suitable marketing strategy for Kinh Đô Corporation in the long run . The micro environment : STRENGTHS

Kinh Đô Corporation is well known for its professional leaders in the risky world of stocks that requires good vision and strategic planning .

Moreover, the company has overcome the economic crisis in the past five years which proved that the leaders are able to forecast the risk and create appropriate strategic planning as well as exit strategy for the company to ensure the sustainable development .

Modern production line was invested . Production technology was overestimated in compared to the peers . Specifically:

- The Europe production line for Crackers worth 2 million USD with a capacity of 20 tons / day was put into production in 2000 .

- The Denmark production line for Cookie worth 2 million USD with a capacity of 10 tons / day was put into production in 1996.

The huge sale department was trained by the company . Kinh Đô Corporation also implements new policies to main human resources and attract talent . Besides , the company builds up human resource management team to keep up with the growth and expansion of the company in the future .

WEAKNESSES 

Kinh Đô Corporation are focusing on business sector like financial investment , real estate , stocks which affects confectionary business .

A global development requires high qualified human resources . A family business will prevent the promotion of good workers .

 The macro environment : OPPORTUNITIES

Trend in international economic integration and export promotion policies .

Science and technology increases enables developers to create application of modern technology in order to meet the criteria of the domestic and export market .

The increasing in income represents for a potential domestic market . The export market has great potential as trade barriers (tariff ) are

abolished . The local competitors are small and weak .

 

THREATS 

Competitors appear more and more when Vietnam joined World Trade Organization

Intensity of competition will be higher . Substitute products appear . The export market gets more difficult due to high standard of food safety . Brain drain ( Talent works for international companies )

(Taken charge by Quynh Mai)

COMPETITIVE ANALYSIS 

Kinh Đô BibicaABC

(Asia Bakery & Confectionery)

Leaders

1. Tran Kim Thanh: CEO, Chairman of the Board.

2. Tran Le Nguyen: Vice Chairman, General Manager.

3. Vuong Ngoc Xiem, V ng ươBuu Linh: Vice President.

1. Jung Woo Lee: Chairman of the Board

2. Truong Phu Chien: Vice Chairman, General Manager

3. Phan Van Thien-Nguyen Quoc Hoang: Vice President

1. Kao Sieu Luc: Chairman of the board, CEO

HeadquarterThu Duc District, Ho

Chi Minh cityTan Binh District, Ho Chi Minh city

Binh Tan District, Ho Chi Minh city

Revenue

4600 Billions: Before tax: 612

billions After tax: 500

billions

1052.8 Biillions: Before tax: 57.58

billions After tax: 44.94

billions

Type of companyJoint-stock company

Joint-stock company

Family company

Strengths High product quality

Consumer gained trust

High product quality

Well trained staff

Popular leaders Strong

brand/Well known

Price segmentation (suitable to all people)

Big market High technology

Vietnam honor of high quality 1997-2006

One of 100 Vietnam strongest brands

The Company's products are sold primarily in domestic market

Revenue from domestic consumption accounts for 96% - 97% of total company revenue

Sales in the Mekong Delta, 42 distributors in the Southeast region, 23 distributors in Central Region and 30 distributors in Northern areas

Production from exports accounted for only 3% - 4% of total revenue

The majority of products are malt products.

108 distributors, including 13 distributors have been sold company’s products all over the country

Well known brand

Consumer gained trust

Product price target to medium-high class cunsumer

More than 400 types of cakes

Weakness Family business

style, talent limitted

Confectionaries are not necessities, not

Talent limitted Lack of new,

dynamic leaders

Lack of new, dynamic leaders

Focus on business besides confectionary sach as real estate, stock, and bond

cater to the essential needs of human beings, and there are many other products to replace. Thus, reducing the purchasing power will lead to lower impacts of company's revenue

Exchange rate fluctuations lead to changes in input costs and impacts on the company

Not joint stock

Operating Model Retailer, Bakery RetailerRetailer, Bakery,

Workshop

Price MechanismHigh, Price

competitionMedium-high,

Price competitionMedium, Price

competition

Marketing

Gather feedback through marketers and distributions,

Through professional consulting companies to conduct surveys-market demand

Media Etc.

Gather feedback through marketers and distributions

Media Tasting products Etc.

Media Gather feedback

direct from customers

Etc.

Product Sources

Domestic supplies

Bidding type Binh Dong flour

company Vinamilk Etc.

Domestic supplies

Fixed contract Bien Hoa sugar

company Etc.

Domestic supplies

Developing/Reduce Scale

DevelopingDeveloping-Internal contradiction with

LottleDeveloping

(Taken charge by Trung Tin)

BUYERS/CUSTOMERS

A. BUYER’S FEEDBACK:

Data of this table based on the opinions of 68 customers when asked about Kinh Do.

AssessmentTotally agree Agree No opinion Disagree Totally

disagreeNumber of people

% Number of people

% Number of people

% Number of people

% Number of people

%

Reasonable price

2 2.9 39 57.4

11 16.2

16 23.5 0 0

Good quality 16 23.5 44 64.7

6 8.8 2 3 0 0

Eye-catching colors

2 3 39 57.4

24 35.3

2 3 1 1.3

Very fragrant smell

3 4.4 38 55.9

26 38.4

1 1.3 0 0

Diverse products

3 4.4 46 67.6

17 25 2 3 0 0

Want to eat once again

7 10.3 23 33.8

29 42.7

4 5,9 5 7.3

Table: Assessment of customers about Kinh Do

Source: http://luanvan.net.vn/luan-van/de-tai-danh-gia-cua-khach-hang-ve-he-thong-cua-hang-kinh-do-bakery-tai-thi-truong-ha-noi-8911/

Data of table based on 49 answers of customers when asked “which is the most delicious brand’s birth cake in Ho Chi Minh”.

0

5

10

15

20

25

30

4

1

5

8

5

26

number of votes for THE MOST DELICIOUS BRANDS' BIRTH CAKE IN HCMC

Sources:https://vn.answers.yahoo.com/question/index?qid=20090428104431AA5KDvo

http://vozforums.com/showthread.php?t=355644

(Taken charge by Khanh Ngoc)

B. CUSTOMER SEGMENTATION:

Customer segment of Kinh Do was constituted by North Kinh Do Food Joint Stock Company (NKD) and Kinh Do corporation (KDC). Kinh Do’s customers are quite diverse, range from popular customers to premier customers.

1. NKD’s customer segmentation:

ProductsSegment

Children

Teenagers

Workers

Entrepreneurs/ organizations

Privates

Snack Mooncake

2. KDC’s customer segmentation:

Products

SegmentChildren

Teenagers

Workers

Entrepreneurs/ organizations

Privates

Cracker

3. Other Kinh Do products’ customer segmentation:

ProductsSegment

Children

Dieters/Diabetics

Workers

Entrepreneurs/ organizations

Privates

All ages

Cream desserts

(Wel, Wel yo kidz)

Biscuits (Cosy)

Biscuits (Yelo)

4. Within 68 people who have bought Kinh Do products, female accounted for 75% who aged from 18 to 35 and income above 4 million VND per month.

(Taken charge by Khanh Ngoc)

ALTERNATIVE EVALUATION INCLUDING CRITERIA

Alternative 1 for Product:

From information of Product, candy product line accounted for 2% revenue (the lowest revenue). If the revenue still remain the same in 2014, the company should stop running that product line.Kinh Do should sell all product line systems related to candy to create new investment. This investment will invest in online selling. As is known, online selling is a trend in modern life. Internet takes much time of people every day. Considering the top bakery companies at the present, no companies have online selling service. If Kinh Do invests in that service, it can be an important turning point of Kinh Do. Kinh Do not only takes the first advantage of pioneer but also could gain potential positive outcomes from that investment; for example: push sales, make customers feel more convenient, make a big hit in bakery field, gain more revenue if that service work etc. The company should keep candy workers who are young and be able to access the internet and then training them to become online administrators. The remaining workers will be delivery people. However, workers who are nearly retired or have poor performance Kinh Do cannot keep them. Instead, the company will compensate for them by give them amount of satisfied salary.

Alternative 2 for P romotion :

From the information that within 68 people who have bought Kinh Do products, female accounted for 75% who aged from 18 to 35 and income above 4 million Vietnam dong/month, we can make assumption that young female is the major customer. If Kinh Do invites famous celebrities in TV commercial, it is a good idea however the cost for payment is extremely high. Thanks to young female customer as we assume, the company can invite hot vloggersor comedy groupssuch as Jvevermind, Toanshinoda, Huyme, Pho, Damtv, BB&BG etc. to make TV commercial. They are very popular in social network and have large fandom, especially netizens (online users). The cost to invite them is much cheaper than celebrities such as actors, singer etc. In addition, effects it brings are very huge. If Kinh Do can run that project

combined with online selling services, it seems to be possible for the company to gain much more revenue and new customers. Besides, it also might maintain the loyal customers.

(Taken charge by Khanh Ngoc)

PRODUCT

By the name of “The King of confectionery”, Kinh Do has introduced many product lines to serve the diverse needs of Vietnamese consumers with the best quality.

Two of the products made the reputation of Kinh Do are the two brands: COSY and exclusive mooncakes product line.

For the COSY product line, it has many choices namely COSY Marie Biscuits, COSY Cream Sandwich Biscuits, COSY Coconut Butter Biscuits, etc. They are very crisp cakes, soft and sweet taste to satisfy a large number of consumers in Ho Chi Minh in particular and Vietnam in general.

The mooncake product line also is a typical and indispensable product on every Mid-Autumn Festival. There is no denying the fact that not only quality products, but also nice, luxurious and subtle packaging, Kinh Do’s mooncakes are always one of the top choices of consumers confidence. Indeed, according to the report of Kinh Do, “in 2011, mooncakes brought a turnover of 650 billion VND, increased by 743 billion VND in 2012, respectively accounted for 15% and 17% yearly turnover. In 2013, according to estimate of the HSC, the vast sales of mooncakes reached at 800 billion VND up 7.7%.” Apparently, Kinh Do has brought the product line of compassion, integral and meaningful gifts to families, friendship and partners.

It can be said that with every kind of products, Kinh Do is non-stop creativity in tasty, nutritious ingredients and design that aims to be suitable for all Vietnamese consumers.

Besides these advantages, Kinh Do still have much disadvantages should be changed as follows. Packaging should be replaced entirely with paper bags instead of plastic bags. This not only protects the environment but create sympathy for shoppers as well. For shaping the cakes, Kinh Do should also be considered, instead of using round, square, rectangular or simple flowers in shape of the cakes, they need to substitute it for animal crackers or more unique shapes to attract more consumers’ attention. The mooncakes should also be

more creative in making more novel products than before. Another article must be improved that is candy. According to Kinh Do’s report, “candy product line always occupied the lowest revenue (2%) in 2012.” It is essential for Kinh Do to create a variety in candies, no longer are traditional round chocolate candies as now.

PRICING

Developing and managing the right pricing strategy is a vital condition to ensure business operations are highly effective. As far as I am concerned, pricing strategy should be conducted the following 3 criterions: time- based pricing, bundle pricing and personalized pricing.

1st. Time-based pricing:

As mentioned above, mooncake is a typical product line of Kinh Do, and an indispensable product in every Mid-Autumn Festival season. Time before and between season are considered a peak period for both sellers and buyers. From 3 years onwards, because more and more demand for donating, the price should slightly increase, which is totally reasonable. Nevertheless, after this period, reducing costs is a critical thing. To do this for another distinctive products on Father’s Day, Mother’s Day, Valentine’s Day, Women’s Day, etc. similar to mooncake product line.

2nd. Bundle pricing:

Kinh do should restrict cut the price directly in promotion programs because it can lead customers to negative sentiments when the price rises again. Instead, making product packs from different cakes with attractive prices, or carrying out the strategy “Buy 2 get 3”, “Buy 2 get 1“ in order to stimulate purchasing power and increase revenue. This project should be applied to all products.

3rd. Personalized pricing:

Kinh Do must be more creative in shaping of birth cakes, should not only used the samples in the catalog. Allowing customers to print their images onto the birth cakes or following the customers’ requirements. The flavor also needs to be replaced with more diverse savors like corn, mango or green tea, and should substitute entire traditional sponge cakes for ice-creams. Obviously, depending upon the season and the level of difficulty, or be easy and much, or less customers’ requests, the price will be high or low.

PLACE

Kinh Do’s products should be sold at almost convenient locations of districts in HCMC. A nice view on a popular road and near school, dormitory, residential area, even places attracts many tourists like stations or airports are a great advantage to hope for bringing a large number of potential customers to store. Besides, products should also need to sell online, in this way, customers simply go to the website, click on the product purchased and complete contact information, will be immediately referred to staff to confirm orders. To do this, Kinh Do must design an informative and lively website with full of all the products, prices and the list for ordering. Going into details, on webstie, Facebook; Kinh Do needs to organize and maintain events, mini games with the prizes are Kinh Do’s products for winners. Moreover, to continuously update products’ information, 30-seconds commercial or promotional programs on the website, Facebook, Twitter, Youtube, and blog that is a crucial mission for Kinh Do. Sms / email marketing for consumers when having promotional programs as well as a good way to caring for customers. Kinh Do also needs to introduce products in supermarkets (markets) 3 times per month, and make sure that PGs always help shoppers to choose the appropriate products. Displaying eye-catching products and advertising near the counters, or at gate of supermarkets (markets) and allowing consumers to sample. This leads to stimulate purchasing power, and at once, the brand will be widely promoted thanks to the customers who tried the product and narrate their relatives or friends. In addition, wholesale distribution is also one of important issues, in particular, on holidays, or meetings, customers demand a large number of cakes, they should pre-order for store. More importantly, in the long run, Kinh Do needs to concentrate on researching a strategy to expand distribution, exporting the products to foreign markets rather than just the stores in Viet Nam.

PROMOTION

Promotion is an instrumental factor for any corporation to create excitement for customers, to assert the quality and unique flavor of the product. Additionally, the purpose of promotion is to let more customers know and maintain brand and stores.

It can be said that Kinh Do has done quite good in marketing of products on channels like television, TV commercials, newspapers, websites, Facebook;

however, everything was sill misty. It is necessary for Kinh Do to intensify more their marketing strategies. There are a wide range forms of advertising should be implemented.

Firstly, nowadays, a large number of people who use television and internet that is a vital facet to help owners focus on creating video clip 30-second commercial. One distinctive advertisement’s idea together with celebrities (without any scandals) would make a strong impression on viewers (customers).

Secondly, Kinh Do should keep up strategic discount, promotion on holidays. When buying in bulk, consumers or companies will receive a 3%-5% discount (the more the customers buy, the more reduction they get) or free gifts from Kinh Do.

Thirdly, a plan of accumulating points and membership cards should be conducted. Its purpose is to build customer loyalty to the brand. More specifically, basing on this strategy, each time customers buy cakes at the store with the value from 80.000VND, they will collect 1 point. Moreover, gathering 15 points, 30 points and 45 points, customers will get 5% discount and Silver card, 10% discount and Gold card, 15% discount and Diamond card respectively.

Fourthly, Kinh Do should also propose practical programs for community such as giving candidates cakes or breads on university entrance examination seasons, financing charities fund and television programs or campaigns help the poor and underprivileged children, families. This is a fully-humane plan with the aim of creating a great consumers’ sympathy for Kinh Do’s brand.

Finally, offering products for sale with preferential prices and good services to boarding-schools, companies, conferences or events is a task worth doing due to its large and stable source of profits will brings to store.

(Taken charge by Ngoc Quy)

REFERENCES

http://doc.edu.vn/tai-lieu/de-tai-xay-dung-chien-luoc-cho-cong-ty-kinh-do-giai-doan-2010-2015-18508/http://www.kinhdo.vn/#/vn/nhan-hang/than-tinh-ngay-le

http://luanvan.net.vn/luan-van/de-tai-danh-gia-cua-khach-hang-ve-he-thong-cua-hang-kinh-do-bakery-tai-thi-truong-ha-noi-8911/

http://gafin.vn/2013100205292032p0c36/kinh-do-lai-200-ty-dong-voi-banh-trung-thu.htm

http://123doc.vn/document/851080-phan-tich-swot-kinh-do.htm

http://www.misa.com.vn/tabid/91/newsid/11475/Phan-Tich-SWOT-trong-kinh-doanh.aspx

http://www.stoxplus.com/download.asp?id=2151

http://luanvanbaocao.net/tai-lieu/31645-chien-luoc-marketing-cho-banh-trung-thu-kinh-do-docx.html

http://kinhdo.vn/

http://m.gafin.vn/20140630020537519p0c36/dhcd-kinh-do-xac-dinh-dau-tu-vao-cac-nganh-giup-kdc-dat-vi-tri-top-3-tro-len.htm

http://kinhdoanh.vnexpress.net/tin-tuc/doanh-nghiep/kinh-do-se-chuyen-het-mang-banh-keo-cho-cong-ty-con-3008166.html

http://luanvan.net.vn/luan-van/de-tai-danh-gia-cua-khach-hang-ve-he-thong-cua-hang-kinh-do-bakery-tai-thi-truong-%20%20ha-noi-8911/http://gafin.vn/2013100205292032p0c36/kinh-do-lai-200-ty-dong-voi-banh-trung-thu.htm

http://123doc.vn/document/851080-phan-tich-swot-kinh-do.htm

http://www.misa.com.vn/tabid/91/newsid/11475/Phan-Tich-SWOT-trong-kinh-doanh.aspx

http://www.stoxplus.com/download.asp?id=2151

http://luanvanbaocao.net/tai-lieu/31645-chien-luoc-marketing-cho-banh-trung-thu-kinh-do-docx.html

NOTES

Members take charge parts as follows:

1. Tr ng Th Thu Th o (1258072)ươ ị ả

-Executive Summary

-Problems/Objectives

2. Nguy n Th Quỳnh Mai ễ ị

-SWOT (Macro-Environment & Micro-Environment)

3. Tri u Trung Tín (1258079) ệ

-Competitive Analysis

4. Nguy n Thái Khánh Ng c (1258041)ễ ọ

-Buyers/Customers

- Alternative Evaluation Including Criteria

5. Tr n Th Ng c Quý (1258061)ầ ị ọ

- 4P (Product, Pricing, Place & Promotion)

- Format all typescript