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SABECO has been on beer market for more than 35 years with the first product, Saigon
Export, and later on they developed Saigon 333, Saigon Lager, and lately in 2000 Saigon
Special. There are many internal and external forces that influence SABECO strategies on their
developing way. These factors includes negative and positive effects such as the increase in
taxation rate, higher cost of raw material, technology break out, the opportunities from the join of
Vietnam to WTO. Therefore, SABECO has to take the advantages to overcome all the negative
effects and become bigger and stronger in Vietnamese market as well as international market.
Problems indentified:
• Saigon Export design is not up to the current trends.
• High inflation rate.
• Poor quality franchise and services providing.
• Tougher competition.
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TABLE OF CONTENTS
A. CURRENT MARKET SITUATION:.................................................................................. 3
1. Company background information: ..................................................................................... 3
B. SWOT ANALYSIS:............................................................................................................. 12
1. SWOT Analysis: ................................................................................................................ 12
C. OBJECTIVES:..................................................................................................................... 15
1. Product objective: .............................................................................................................. 15
3. Marketing objectives:......................................................................................................... 16
2. Price: .................................................................................................................................. 22
3. Place: .................................................................................................................................. 23
4. Promotion:.......................................................................................................................... 24
5. People:................................................................................................................................ 29
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A. CURRENT MARKET SITUATION:
With more than 35 years of industry experience, SABECO has become the
‘biggest player’ in Vietnamese Beer Market whose capacity is around 645mn litters a
year. SABECO are producing 4 different beer key brands: 333, Saigon Export,
Saigon Lager, and Saigon Special. At the end of financial year 2007, Saigon Beer was
having 1.599 labors. Applying societal marketing concepts, SABECO has raised
funds for Vietnamese Children, for the poor, etc. from parts of its earnings.
2. Situation Analysis:
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Micro environment:
a. Supplier:
Saigon Beer is made of water, malt, rice, houlon flower. We can notice that
the main ingredients such as malt and houlon flower must be imported
which cause a higher cost for material. Furthermore, there was a slightly
increase in malt and houlon price which lead to a fall in profit compared to
last year in 2007 (SABECO ban cong bo thong tin 020108 2008, p.40).
b. Competitor:
Saigon Beer is in the category of beverage; therefore it cannot stay away from
the competition of other kinds of drinks. Other kind of drinks such as homemade
juice, soft drink, nutrition drink, etc. will then be Saigon Beer indirect competitors.
Furthermore, in the completion of alcoholic drink, here we are talking about beer,
Saigon beer has to compete with other old and strong brands such as Heineken and
Tiger beer, and also some others local beer, as well as international imported beer.
23.60%
SABECO
31.40%
Vietnam Brewery Limited
HABECO
3.00% San Miguel
5.40% SEAB_Halida, Carlsberg
HBL_Huda, Festival
7.00%
Others
20.10%
9.50%
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c. Intermediaries:
d. Customer:
• Customer market: Saigon beer focuses mostly in domestic market,
especially in Ho Chi Minh City. Male with the age of 18 to 50 who are in
middle class, and has medium of disposable income is Saigon beer’s target
market. Male with the age below 30 drink Saigon Export as they have not
been successful, they do not have high income that will be spent on higher
standard beer like Tiger or Heineken. Otherwise, male above 30 year old
tend to drink Saigon Export as they have been used to it.
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Figure 5: SABECO domestic distribution system
<http://www.SABECO.com.vn/map.aspx>
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Macro environment:
The policies however are very complex at this time because by 2010 some
new policies for beer taxation will be applied for not only beer itself but also the
packages. It means that businesses must pay 55% for taxes; however, the bottle beer
will be eliminated the tax for bottle consumption as it will be used repeatedly, but can
beer will not. As the result, the price of beer in cans can be higher than beer in
bottles.
The table below shows how much money businesses must pay for taxes when
the new policies are applied
Draft Policies
Current Policies – 75% for all Beer 55% for all Beer & Taxes for
Content Cans
(Applying since 2005 until now) (Discussing now by National
Assembly)
(http://www.vibonline.com.vn/vi-VN/Forum/TopicDetail.aspx?TopicID=2066)
It may be a good sound for bottle beer industry because of a decrease of 20%
for taxes whereas the can beer industry must pay more taxes by 12% increase.
Customers as the result may change their mind to drink bottle beer more which can
push the demand in Saigon Beer increase steeply as most of SABECO beer products
are in bottle form.
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b. Economic:
The Economy Crisis and then the inflation seem not to be much affected to the
consumption of beer. In fact, Vietnam has a very high the inflation rate compared
with other countries and regions and it grew up really quickly over seven years ago.
However, the consumption rate for beer still increases and the development of Beer
Industry has grown up from 12% to 14% in 2008 (Phuoc, H 2008). Due to the effect
of inflation, the price of many raw materials increase significantly which pushed the
price of beer increase dramatically, there is a strong line up-slopping steeply in the
consumptions.
Figure 6: Inflation rate in Vietnam and comparator countries, regions from 2000 2007
(http://www.census.gov/ipc/www/idb/country/vmportal.html)
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The GDP per capital of Vietnamese had increased in last 10 years. As the
information above about inflation, beer is a convenience goods so when the income
increase, the demand for beer also grow up. As people have more disposal income,
they will spend more on beer or other alcoholic drinks. Moreover, the proportion of
spending on alcoholic drink is a small amount; therefore it will not affect the demand
as little changes in price.
Figure 7: GDP Growth and GDP per capital from 1998 to 2007
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c. Social:
The culture in Vietnam also affect to the consumption of beer. First of all, the
habit of Vietnamese people has changed for the kind of drinks. For along time ago,
they drunk wine which they made but now, they change to drink beer because of
several reasons as health (beer has less alcohol than wine), convenience, standard,
life-style, etc. Therefore, drinking beer is one of the habits of many Vietnamese
families. These graphs show the change quickly in current time.
<>
According to dantri.com, Vietnamese drinks average 18 liter per year in 2008 and can be
increase to 28 liter in this year. Secondly, in some traditional holidays, especial in Tet’s
holiday, the consumption increases steeply. Government estimates that consumers spent
approximately 7.000 billion VND for buying beer in Tet’s holiday in 2009 (7000 ty dong
uong bia Tet 2004). Moreover, Vietnamese likes to drink beer when they do the business.
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B. SWOT ANALYSIS:
1. SWOT Analysis:
Strengths Weaknesses
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Opportunities Threats
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2. SWOT Matrix illustration:
Strength Weaknesses
• Develop online Business to • Organize training courses to get
Business transaction, between skilled local employees in lower
supplier and company, or between cost.
company and whole sellers/ shops.
• Based on the belief of Vietnamese
• Expand exportation to more people, develop contests or
Opportunities
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C. OBJECTIVES:
PRODUCT
EXISTING NEW
EXISTING
NEW
These objectives are setting for one year from May 2009 to April 2010.
1. Product objective:
• Market penetration:
o Introduce new size e.g. 1liter for use in party. New logo and package
design.
o Create new flavors by combining the taste of other food and drinks
such as fruit beer, milk beer, coffee beer and hamburger beer.
• Market development: Expand exportation to 5 more countries in Europe
such as Netherland, Portugal, Hungary, Estonia, and Latvia.
• Diversification: Developing light beer for female and younger people
2. Financial objectives:
• Revenue increase to 14,230 billion VND which is 40% increase (In 2008,
total revenue was 10,159 billion VND which rising 46% compared to 2007).
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3. Marketing objectives:
1. Marketing segmentation:
d. Behavioral • Occasions: any kinds of party especially on Tet holiday and “after
business meeting/ contract”
• Loyalty status: medium and strong
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2. Target market:
SABECO original strategy was mass marketing. Even though, there are some
changes, and SABECO has developed Saigon Special as an application of
differentiate marketing to serve a different segment that include higher middle
income men, as can seen by Saigon Special for higher income male.
3. Positioning map:
Figure 10
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Figure 11: Positioning map on Price compared with Quality
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Figure 13: Positioning map on Price compared with Amount of sale
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Positioning Statement
For most of Vietnamese people and foreigners who want to taste a real
Vietnamese favor beer, Saigon beer brings customers the Asian lifestyles, the
understanding without levels or standards among people and unlimited fun, as the
slogan of Saigon Export is to bib to be understood.
1. Product:
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Level of Product Current Improvement
The core value of Saigon beer is
Core Benefit thirsty satisfaction, enjoying and
getting happiness.
Actual Product
In 2008, Saigon beer has By doing more promotion,
continued to reinforce its brand improve brand name in other
Brand Name name like a Vietnamese product such as Cambodia, Laos,
with high quality and best choice Malaysia and Indonesia, UK,
for every occasion. Thailand, etc.
Saigon beer’s product which are • Finding and research
produced by innovative for some new tastes.
Quality technology and natural • Apply update quality
agriculture products to making management system
healthy products for customers. like ISO 9001:2008.
• Logo: golden dragon.
• Represent a traditional, • Modern logo which
powerful symbol which represent the active,
Style Design
carried out an Eastern elegant, and strength
South Asian sign of feudal sign.
society.
• Capacity: 355 ml
• Introduce new size:
1liter.
• New package design
Packaging with more twist on
bottle.
• New color of the
package: green, blue.
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Augmented Product
Phone number printed on product Should have email, website and
Service for further information. office for customer to come
and find information.
If there is anything wrong with
the product due to production or
Guarantee
storage mistake, customer can
exchange for another new one.
2. Price:
5,000VND 9,000VND
b. Pricing strategies:
Saigon export’s price is set based on:
• Pricing Objectives: maintain and improve market share leadership
• Marketing mix strategies:
o Value based pricing: Saigon export price relies on customer’s belief. As it
has been on market since 1996 and it has been success in some cases,
more and more people are buying it; SABECO can set a higher price for
Saigon Export than other local beers.
o Competition based pricing: As beer is a monopolistic market, there are
many brands competing with others for a high market share. Saigon
Export price has to depend on its competitors’ price; here it is Hanoi Beer,
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Halida, Ben Thanh beer, Hue beer etc. SABECO has to set an equivalent
price with others.
o Discount and allowance: SABECO set a lower price for whole box and
volume purchase.
o Psychological strategies: As current price of Saigon export is a full, round,
and even number, SABECO should set it as an odder number such as
4,800 VND, or 8,500 VND. Therefore, their customer might think it is
cheaper, and SABECO can increase their sales.
• Cost: SABECO has a low average cost as they produce a huge quantity. This
can help Saigon Export to have a lower price compared to other local beers
with the same quality.
3. Place:
a. Location:
• Shops selling Saigon Export are allocated not only in most of cities in
Vietnam such as Hanoi, Da Nang and Ho Chi Minh but also in foreign
countries such as Canada, United Stated, Russia, etc.
• It is recommended that SABECO should have more warehouses for different
location i.e. in each city or province to reduce the distribution cost.
• The shops are not tidy enough, sale assistants are not trained in selling and
promoting techniques/ skills. Therefore, SABECO need to invest more on
point of purchase to improve the shop image as well as SABECO image.
b. Marketing channel:
• As beer is a fast moving consumer goods, beer is sold in many places such as
shops, bars, supermarkets, markets, etc. SABECO may apply the intensive
pattern of distribution.
• Until now, SABECO already has more than 1,200 distribution channels
throughout Vietnam.
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• SABECO should do the administered vertical marketing system, and they also
have wholesaler franchises that are sponsored by the factory for banner,
billboards, etc.
4. Promotion:
a. Advertising:
• Reminder advertising should be taken for Saigon Export and other current beer
produced by SABECO, as it help customer to remember about Saigon Export, what kind
of promotion is being used, and other information.
• Informative advertising will need to be used when introducing the new products with
strange flavors that have not been on market.
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The following is media types that Saigon beer has used and may use to advertise their products:
TARGET
Current Improvement
AUDIENCE
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• Internet (having a website with Internet (Estimate to reach 8%
enough information about customers)
company as well as products) Advertising on some famous
www.SABECO.com.vn website with big number of visitors
such as Yahoo, or some smaller
cheaper one such as
www.yeucahat.com
b. Sales Promotion:
In the current time, SABECO seems not to have many promotions in media tools.
People know and drink Saigon beer through the introduction from their friends
and families. On the other hand, the company has some billboards at the
countryside and promotion girls on shops and supermarkets.
It is recommended that SABECO should get more attractive promotions for
Saigon beer to pull the customers buy it. Moreover, some events should be
established to get more people concern on Saigon beer.
• “Who drink beer faster?” contest, giving free sample beer and prizes for
winners.
• Contact with some newspapers and magazines for giving small discount of
coupons to promote people buy beer.
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• Establish booths in front of some big super market from 7pm to 9pm to
give out free sample for people to try. This should be applied especially
for new products such as fruit beer.
c. Public Relation:
As it is a trend in marketing now, every company has to apply societal marketing
concepts. By showing that they are society friendly, many newspaper and
magazine will write about them that will not cost the company to pay for
advertising.
• Doing charity works: SABECO has done many charity works to
improve their society friendly. This should be done more in the future to
improve SABECO position.
• Sponsor for game show, movie, national football match
• Invite nutritionist: It is recommended that SABECO should invite
nutritionists to establish some new conferences and talk about the benefits
of drinking beer. It is not only increase the sale volume but also put the
negative perception away from Vietnamese.
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d. Personal Selling:
Personal Selling is a very important part, but also a very expensive one. Because
the company must train sale people, give them compensation that support them in
their work, and motivate them through incentives. Sale people employed by
SABECO are responsible not only for sending information about the company, the
products to customer, but also to receive feedback from customer.
• Recommended compensation:
o Motorbike.
o Holiday trip.
• Recommended incentives:
o Commission
o Recognition and honors.
o Cash awards.
e. Direct Marketing:
Direct marketing which has a low cost is an efficient way to promote for the
company. It is also part of customer relationship management which can help the
company to improve their relationship with customers.
a. Worker:
• Academic and skill training courses: to improve labor knowledge
and quality to catch up with the labor needed in the company with lower
cost compared to recruit new high-skilled employee.
• Cooperate with vocational college: to have sources of skilled labor
meet company requirements.
b. Sale representative:
• Goal: customer satisfaction, and company benefits.
• Training course: selling, communication, listening, and feedback skills.
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F. ACTION PROGRAM:
commission million
franchise
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*Advertising on Advertising 230
T.V: million
HTV7, HTV9,
VTC5 (Sports
channel), THVL,
VTV3 at different
time in day (20s per
ads).
PROMOTION
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*Advertising on Advertising 400
Bill board: million
Put bill board in
front of impressive
places: Parkson
plaza, Benthanh
market, Winsor
plaza, buildings.
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*Personal selling: Sales 300
• Train sale million
representatives.
• Employ more
sale
representative.
• Provide more
compensation
and incentive.
*Sale promotion: Sales 500
Free sample booth, million
drinking contest,
designing contest,
“Open lid winning”
events.
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Public Relation Public Relation 700
Celebrate and million
sponsor for some
social activities
such as: fund for
dioxin people and
orphanage kids.
Invite nutritionist.
Sponsor game show
on TV, national
football match,
movies.
4,180
Total million
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G. CONTROL PROGRAM:
purchase).
Increase quality of Online surveys and Customer satisfaction on Redesign franchise, make
franchise. questionnaire. the service and at the contract with shops on training
shops promotion girls. Provide more
information to shops.
Increase customer Number of customer More than 1,000 visit to Changing and creating new
awareness. visit shops and websites. website in 1 week, and advertising.
to shops in 2 week
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Q2 – End of October 2009
Introduce new
products.
Put more on advertising and
Achieve at least
Sales, Marketing Summary promotion.
5.000 bottles sold
for new products
Q3 – End of January 2010
Maintain selling Marketing, sells Number of sells Similar amount to Spend more on discount and
rate as second previous quarter advertising.
quarter for new
products and also
existing products
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Q4 – End of April 2010
Selling for all Sell, and promotion Number of sells 30% increase compared Redesign promotion campaign
products increase to other previous and selling technique.
by 30% compared quarters
to other previous
quarters
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H. CONCLUSION:
Saigon Export has been on Vietnamese market since 1977, and is being consumed by the majority of Vietnamese people. This,
in part, brings to the success of SABECO with 35% of Vietnamese market share in 2008. However, with the society trends, people
are getting richer and richer; international beer is more favored, and Saigon Beer will be declined in the future if SABECO do not
take any further action.
From the SWOT analysis, and current situation analysis, to improve the situation and to maintain the market leadership,
SABECO further action should be concentrated on research for new products, promotion, and improving the quality of services
providing by the company.
I. REFERENCES:
• ‘7000 ty dong uong bia Tet’ 2004, VnExpress News, 27 November, viewed 25 Apr 2009, <http://www.vnexpress.net/GL/Kinh-
doanh/2004/11/3B9D8FB2/>.
• ‘Tet nay do uong van len ngoi’ 2008, Dantri News, 26 Dec, viewed 25 April 2009, <http://dantri.com.vn/c76/s83-300149/tet-
nay-do-uong-van-len-ngoi.htm>.
• ‘Vietnam's 2nd largest brewer Habeco to equitize’ 2007, Thanh Nien news, 24 January, viewed 25 Apr 2009,
<http://www.thanhniennews.com/print.php?catid=2&newsid=24601>.
Page 38 of 40
• Chu, M 2009, ‘Hon 1/3 so nguoi uong ruou bia tu truoc 20 tuoi’, Gia Dinh, 22 March, viewed 25 Apr 2009,
<http://giadinh.net.vn/home/20090320091159400p0c1011/hon-13-so-nguoi-uong-ruou-bia-tu-truoc-20-tuoi.htm>.
• Hue, M 2007, ‘Sabeco thuc hien muc tieu sau co phan hoa – phat trien thuong hieu tren thi truong quoc te’, Sai Gon Giai
Phong news, 24 Dec, viewed 25 April 2009, <http://www.sggp.org.vn/kinhte/2007/12/137014/>.
• Kolter, P, Armstrong, G, Ang, S H, Leong, S M, Tan, C T and Yau, O H 2009, Principles of marketing a global perspective,
12th edn, Pearson, Singapore.
• Luong, K & Hai, P 2008, ‘Bia Saigon ket tua va bao dam tieu chuan?’, Lao Dong News, 21 July, viewed 25 Apr 2009,
<http://www.laodong.com.vn/Home/Bia-Sai-Gon-ket-tua-van-dam-bao-tieu-chuan/20087/98410.laodong>.
• Minh, A B 2009, ‘SABECO anh hung, tren da phat trien’, Thuong Hieu Viet magazine, 7 April, viewed 23 Apr 2009,
<http://thv.vn/News/Detail/?gID=4&tID=1&cID=14936>.
• Phuoc, H 2008, ‘Sua thue TTDB: tang thue oto va bia hoi’, Tin247, 2 August, viewed 25 April 2009,
<http://www.tin247.com/sua_thue_ttdb_tang_thue_o_to_va_bia_hoi-3-50644.html>.
• SABECO 2008, Saigon Beer – Alcohol – Beverage Joint Stock Company, Mekong Securities, viewed 3 April 2009,
<www.mekongsecurities.com>.
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• SABECO n.d., viewed 23 Apr 2009, <http://www.sabeco.com.vn>.
• Thi, N B & Minh, N Q 2008, SABECO ban cong bo thong tin 020108, viewed 29 April 2009,
<http://vietcurrency.com/discussion/attachment.php?attachmentid=170&d=1199596780>.
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