Kinh Do Corporation

Sales Strategy

Prepared by:
Trần Phương Nam
Nguyễn Thái Khánh Ngọc
Trần Thị Ngọc Quý
Trương Thị Thu Thảo
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TABLE OF CONTENTS

1 EXECUTIVE SUMMARY...............................................3

1.1 Background......................................................................................................4

1.2 Objectives.........................................................................................................4

1.3 Overview..........................................................................................................5

2 REASONS OF PLANNING FOR THE YEAR 2015.................6

3 CUSTOMER SEGMENTATION.....................................................................6

4 SWOT........................................................................................7

2 BIBLIOGRAPHY............................................................................................24

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 1 EXECUTIVE SUMMARY
Domestic confectionery industry condition:
Confectionery is known as one of the sectors growth and stability in
Vietnam. The role of confectionery industry is increasingly asserted while
holding a large proportion of the food industry (up from 20% to 40% in 10
years).

Vietnam currently has 30 manufacturing enterprise scales. This is about

1,000 small manufacturing base and a number of companies are importing
foreign candy. The local firms dominate the market, in which the market
now accounts for a large proportion (Kinh Do Corporation, Hai Ha
Confectionery JSC, JSC BIBICA) is 42%, other 38% now. Goods imports
accounted for only 20%.

Kinh Do corporation try to make some strategic for sales marketing:

• Promotional activities increase in packaged food due to the poor
economy

• Health awareness continues to influence new product development and

marketing campaigns

• Tougher competition encourages local manufacturers to make more

efforts to remain competitive

• Private label becomes more popular in packaged food

• A positive outlook for packaged food over the forecast period

Recognizing consumers are increasing for health problems related to sugar

intake, so obesity, diabetes or high blood pressure are considered to be a
major problem for manufacturer’s cake candy. Therefore, to meet the
diverse needs of different customer groups, the company is moving in the
direction of investment products and confectionery functional health
benefits.

Moreover, after a long time stable operation in the confectionery industry,

KDC is making an important turning point in deciding deeper into fast
moving consumer goods (FMCG) sectors such as food and beverages.
Specifically, Kinh boost investment in three items: noodles
(comprehensive cooperation with Saigon Vewong), vegetable oil (24% of
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the shares purchased Vocarimex, towards raising the level of investment

up 51%).

1.1 Background
In the long term, the confectionery industry continues to be identified with
strong growth potential due to factors such as young generation, healthy
awareness of the increasing, along with the investment in the sector is
growing.

Kinh Do Corporation is a business group of Vietnam with an emphasis

on food production, including baked goods, confections, snacks and soft
drinks. Kinh Do is operating with a range of Strategic Business Units,
including the brand names of Merino, Celano, Solite, AFC, Cosy, Slide, Sachi and so on.
Each of these SBUs has particular mission and goal, which can be planned
independently towards others.

The corporate group also includes companies in the fields of financial

services, real estate and a retail bakery chain. Kinh Do Corporation manages
a wide range of brand names like buns, cookies, crackers, snacks, cakes, ice
creams, moon-cakes. And instant noodles, cooking oil are the two new
products that come onto the market in 2015.

Kinh Do is a well-known brand in Vietnam, it was confirmed by the heart of

the founders, quality products and the trust of consumers. In 1993, Kinh Do
was found by Tran Kim Thanh with net income 14 billion VDN and 6000
labors. Now, Kinh Do Corp. is developing many stores at HCM city and
spread out 64 provinces with more 150 distributors.

1.2 Objectives

In FMCG, noodles are suitable for stepping into other business areas of
staple foods. According to Nielsen, the noodles outlets across the country
more than the confectionery outlets. If business success noodles, then from
the distribution point is, sold more other essential foods with wheat will
come easier. There are specific essential food items, we will soon be
announced to the market. The goal of the business is aimed at the family
kitchen Vietnam, so instant noodles, cooking oil, sauces, etc. will be the

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main products in 2015. Besides, there are many other products launched in
the near future.

On the road ahead, Kinh Do Company has 3 main objectives in the future
plan:

• First, KDC will focus on the some areas of business strategy "Food &
products essential" to bring "happiness" to everyone.

• KDC focus on supermarkets and schools by directive and in-directive

way.

• Expanding the joint venture, association, cooperation with partners,

bringing the brand grows economic.
KDC will continue to seek investment opportunities in companies consistent
with the strategy of food and essential products (food & flavor).

1.3 Overview
Kinh Do’s strength:During 1994-2012, Kinh Do has launched one after
another: snack (1994), cookie (1996), bakerycake (1997), moon cake (1998),
chocolate (1998), Solite soft cake (2005), Wei Yo yogurt (2007) andSachi
rice snack (2012). Therefore, Kinh Do workforce acquired professional skills
and tactics in promoting new product to their customers, dealers, and
intermediaries. And on strategic scope, Kinh Do Directorsand senior
managers also acquired experience inmanaging resources forpromotional
campaigns, and inamplifying their reputation advantages for instant noodle:
• Kinh Do’s experience in launching new products

• Expansive distribution network

• Food safety production system

• Long-established relationship between

• Stable financial situation

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2 REASONS OF PLANNING FOR

THE YEAR 2015
Kinh Do Corp. wants to achieve more and more in the future:
• Gaining the high consumption amount of instant noodle

• Becoming the 4th rank on instant noodle consumption in Vietnam market

• Social tendency fast-moving lifestyle like people spend more on packaged food

• To impulse the expansion in untapped rural areas

3 CUSTOMER SEGMENTATION

• Current: Kinh Do has 200 distributors, 200.000 retailers over the domestic
and international markets. The table below lists some the main wholesalers/
retailers/ distributors of Kinh Do Coperation in Viet Nam.

Wholesalers/Retailers/Distributors Contact
230 Nguyen Trai Street, District 1,
Nguyen Cu Trinh Ward, HCMC
Tel: 08.38370799-38379088
Fax: 08.39256788
Email:
donghung@aeoncittimart.vn

119-205 Nguyen Thai Hoc, District 1,

Pham Ngu Lao Ward, HCMC
Tel: (84-8) 38.360.143
Fax: (84-8) 36.370.560
Email:
chamsockhachhang@coopmart.vn

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Email: customer-service@bigc-
vietnam.com or dichvu-
khachhang@bigc-vietnam.com.
Ms. Lien/ Ms. Thao
Tel: 3775-1888(ext. 307, 303)
Email:
lottevietnamshopping1@gmail.com
An Phu – An Khanh new
residence, District 2, An Phu
Ward, HCMC
Tel: + 84(0) 8 3 5190 390
Fax: + 84(0) 8 3 5190 373
Email: contactus@metro.com.vn

• In 2015: Kinh Do will launch new products, there are cooking oil and instant noodles.
Kinh Do has to have the places to market, promote and sell them and make them become
well-known to the end users so the best place is supermarkets and groceries. Hence, Kinh
Do absolutely needs to focus more on those places and maintains the business with them.
Besides, Kinh Do still has to maintain the partnership with other distributors and
retailers/wholesalers to gain profit.

4 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

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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
.
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 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 )

5 COMPETITORS ANALYSIS

ABC
(Asia Bakery
Kinh Đô Bibica
&
Confectionery)
Leaders 1. Tran Kim 1. Jung Woo Lee: 1. Kao Sieu Luc:
Thanh: CEO, Chairman of the Chairman of the
Chairman of Board board, CEO
the Board. 2. Truong Phu
2. Tran Le Chien: Vice
Nguyen: Vice Chairman,
Chairman, General
General Manager
Manager. 3. Phan Van
3. Vuong Ngoc Thien-Nguyen
Xiem, Vương Quoc Hoang:
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Buu Linh: Vice Vice President

President.

Thu Duc
Tan Binh Binh Tan
District, Ho
Headquarter District, Ho District, Ho
Chi Minh
Chi Minh city Chi Minh city
city
4600 1052.8
Billions: Biillions:
• Before tax: 612 • Before tax:
Revenue
billions 57.58 billions
• After tax: 500 • After tax: 44.94
billions billions

Joint-stock Joint-stock Family

Type of company
company company company

Strengths • High product • Consumer • High product

quality gained trust quality
• Well trained • Vietnam honor • Well known
staff of high quality brand
• Popular leaders 1997-2006 • Consumer gained
• Strong • One of 100 trust
brand/Well Vietnam • Product price
known strongest brands target to
• Price • The Company's medium-high
segmentation products are class cunsumer
(suitable to all sold primarily in • More than 400
people) domestic market types of cakes
• Big market • Revenue from
• High domestic
technology consumption
accounts for
96% - 97% of
total company
revenue
• Sales in the
Mekong Delta,
42 distributors
in the Southeast
region, 23
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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
Weakness • Family • Confectionaries • Talent limitted
business style, are not • Lack of new,
talent limitted necessities, not dynamic leaders
• Lack of new, cater to the • Not joint stock
dynamic essential needs
leaders of human
• Focus on beings, and
business there are many
besides other products
confectionary to replace. Thus,
sach as real reducing the
estate, stock, purchasing
and bond power will lead
to lower impacts
of company's
revenue
• Exchange rate
fluctuations lead
to changes in
input costs and
impacts on the
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company

Retailer,
Retailer,
Operating Model Retailer Bakery,
Bakery
Workshop
Medium-
High, Price Medium, Price
Price Mechanism high, Price
competition competition
competition
• Gather • Gather feedback • Media
feedback through • Gather feedback
through marketers and direct from
marketers and distributions customers
distributions, • Media • Etc.
• Through • Tasting products
professional • Etc.
Marketing
consulting
companies to
conduct
surveys-market
demand
• Media
• Etc.
• Domestic • Domestic • Domestic
supplies supplies supplies
• Bidding type • Fixed contract
Product Sources • Binh Dong • Bien Hoa sugar
flour company company
• Vinamilk • Etc.
• Etc.
Developing-
Developing/Reduce Internal
Developing Developing
Scale contradiction
with Lottle

6 MARKETING MIX
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6.1 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 such as bread, cakes, mooncakes, cookie, salty biscuits, sweet
biscuits, etc.

Among of them, the 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.

Notably, in 2015, Kinh Do will focus on a new product line, which is instant
noodles and cooking oil.

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.

6.2 Pricing
Developing and managing the right pricing strategy is a vital condition to
ensure business operations are highly effective. Kinh Do is always able to set
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and maintain a competitive market price. By comparison, Kinh Do’s

products are cheaper than other foreign brands three times.

In 2015, pricing strategy is still conducted by the following 3 criterions:

time- based pricing, bundle pricing and personalized pricing.

1. 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 will 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.

2. Bundle pricing:

Kinh do still maintains strategy that does not 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 will be applied to all products.

3. Personalized pricing:

Kinh Do is considering the project that more creative in shaping of birth cakes, no
longer use the samples in the catalog. Allowing customers to print their images
onto the birth cakes or following the customers’ requirements. The flavors are also
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.

6.3 Place

Kinh Do’s products are sold at almost convenient locations of districts in HCMC.
Kinh Do not only sells directly to customers but also distributors or sales teams. A
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nice view on a popular road, or the canteens in schools (primary schools,

secondary schools), universities, colleges, dormitories; retailers near 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.

Kinh Do also introduces products in supermarkets (markets), and 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. More
importantly, in the long run, Kinh Do concentrates on researching a strategy to
expand distributions, exporting the products to foreign markets rather than just the
stores in Viet Nam.

6.4 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.

Besides, Kinh Do still keeps 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.

A plan of accumulating points and membership cards is still consideration in

2015. 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.

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Kinh Do also has charity funds and campaigns to offer their products that
help the poor and underprivileged children, families in hospitals, orphanages,
etc. This is a fully-humane plan with the aim of creating a great consumers’
sympathy for Kinh Do’s brand.

Last but not least, offering products for sale with preferential prices and good
services to boarding-schools, companies, conferences or events is a task
which is implementing due to its large and stable source of profits will brings
to store.

7 CHANNELS ASSESSMENT

7.1 Channels Available

Direct Marketing

Paid Advertising
o Radio
o Television
o Internet
Print
o Newspapers
o Magazines
o Billboards
Direct Mail
o Letters
o Coupon

Telemarketing
o Customer service
o Direct marketing
o Inquiry handling

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One-on-One Selling
o Presentation materials

8 SALES FORECAST

Estimated Expense

September October November December

37,860 40,135 41,450

50,430 52,240 52,680 53,370

87,630 90,100 92,815 94,820

2.12 2.13 2.14 2.17

0.33 0.34 0.36 0.40

78,864 80,642 85,889 89,947

16,642 17,762 18,965 21,348
95,506 98,404 104,854 111,295
S TOTAL $954,925

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ADVERTISING $103,200

PRODUCING $315,000

TRANSPORTING $50,000

PACKAGING $50,000

TOTAL $518,200

Because two products are newly launched to the market so our team is unable to
predict all the components needed in sales forecast. We just can estimate the total
sales and expense. The amount of both products is quite low because it is new and
hard to compete with other popular cooking oil brands in Viet Nam such as Tuong
An, Meizan, Neptune, Simply, Marvela, Cai Lan. The graph below demonstrates
the proportion of consumers used cooking oil brands in Hanoi and HCMC.

Soure: Vinaresearch,Vietnamese cooking oil market 9/2012,.

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The Market Share of Instant Noodle Companies in Vietnam

COMPANY MARKET SHARE

VINA ACECOOK 51,5%

MASAN CONSUMER 16,5%

ASIA FOOD 12,1%

OTHERS (MILIKET-COSULA, 20%

VIFON,…)
Source: VTC/2014

9 COMMUNICATION PLAN

 Training sale team the differences between our products and others brands
about price, the quality of products thereby they will persuade the retailers.

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 Training sale team the way to communicate with customers, retailers

effectively, make sure customers understand well the differences about our
products compare to others brands.

 Training them to build trust and maintain long-term good rapport with both
customers and retailers.

-With customers, sale team should make a call to ask he/she about their
satisfactory to our service and products, they also text sms, email marketing for
consumers when having promotional programs as well as frequently visit them.
It’s a good way to caring for customers.

-With retailers, sale team ask them about which products get high/low revenue;
customers’ feedback on products, service.

 Finding out new customers.

9 ATTACHMENT
9.1 SALE DEMONSTRATION (Training):

After new sales-staffs are hired, they have to take part in sales training. The
company will assign them to play role playing with the artificial situation: some of
them will be customers (entrepreneurs, corporations, retailers, wholesalers), others
will be salespeople. Salespeople’s task is meeting the customer, have a
conversation with the customers to introduce products, convince them to buy and
make a deal with customers. This training will create the opportunity for them to
practice selling skills as well as build experience and confidence in each
salesperson when facing real meeting with customers. There are 6 example
questions (open and close questions) for those staff to refer:
• Why should I choose your company?

• What kinds of products you can supply or us?

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• Do you have any promotion or benefit for us?

• Have you ever cooperated with any food supplier?

• Why don’t you cooperate with it anymore?

• Do you guarantee those problems will not repeat?

9.2 Job Description

AREA SALES MANAGER JOB DESCRIPTION

KINH DO COPORATION
Quantity 10

Salary Negotiation

Job Description
I. Responsibilities:

• Managing and operating from the business/sale in each area and develop it
through recruiting and training salespeople.

• Become a representative of Kinh Do Coporation to customers and partners.

II. Duties:

1. Identifying, building up department goals and managing the

implementation of the business action plan.

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• Sets out clear objectives consistent with the objectives and strategies
of the company for each member of the sales team in their localities
(Distributor / Sales Supervisor / sales and services staff).

• Reviewing and assessing implementation progress in comparison to

the objectives of the weekly/monthly meeting and finding solution
for each problem promptly and efficiently.

2. Supervising and reporting

• Conveying information about the job instructions, procedures and

company policies to the sales team in each region; ensuring
information clearly communicated and linked to the objectives,
strategies and corporate policies.

• Monitoring the distributors and ensuring they comply with

commitment between them and our company about orientation,
policies, resources and delivery.

• Implementing the inspection and supervising to ensure the

compliance of sales teams, sales services staffs, delivery staffs, sales
coordinators.

• Supervising the activities of the sales team through monitoring tools

and provide feedback/recognition and reward staff’s achievement.

• Each sales manager propose sales solutions for their area and those
solution must be based on the principles: logic, benefit, and no
conflict with general market.

3. Training

• Solving problems that arise in the area, guiding salespeople solve

problems in their daily work.

• Rating and providing feedback on the progress of the work of the

sales team through the Sales Training Test and The Personal
Consultation

• Training salespeople how to work in group

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III. Job Requirement

• Male
• Holding Bachelor’s degree or higher degree
• At least 2 years of experience works in area sales manager position or fast-
moving consumer goods field Candidates who have worked in the food/
drinking/ confectionary industry will be prioritized
• Be able to communicate, negotiate, persuade well
• Having good analytical skills and problem solving skills
• Leadership skills and training staff skills
• Specialist knowledge about goods distribution system.

IV. Other information

• Trial period: 2 months are maximum
• Working hours: 48 hours/week and depend on work/job

• Training opportunities: many training and development opportunities, high

inside promotion.
• Co-worker: Friendly, cooperative, professional

• Day off: depends on the government’s law

• Welfare : attractive and cooperative

• Other bonus: depends on the corporation’s policy

V. Workplace (Viet Nam):

Central region/ West Highland region / Southeast region / Ho Chi Minh

City/ Mekong Delta

VI. Contact:
Mr. Phạm Thạch Văn
Email: vanpt@kinhdo.vn hoặc tuyendung@kinhdo.vn
(Candidates must write down the vacancy/position and region that you
would like to apply for )

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10 BIBLIOGRAPHY

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 Sales Strategy

Vu, N. A. (2014, 7). Ngành Bánh Kẹo Việt Nam. Retrieved 12 30, 2014, from vietbanksc:
http://www.vietinbanksc.com.vn/News/2014/7/28/319212.aspx

Unit sales
Cooking oil (1litter/bottle)

Instant noodle (package)

Total unit sale
Unit price
Cooking oil
Instant noodle

Sales
Cooking oil
Instant noodle
Unit sales January February March April June July August
Cooking oil 29,550 30,215 30,690 32,78 33,21 34,88 36,500
(1litter/bottle) 0 0 0
Instant 36,720 38,870 40,560 43,70 44,66 47,83 48,235
noodle 0 0 0
(package)

Unit price
Cooking oil $1.90 2.00 2.02 2.05 2.07 2.08 2.10
Instant $0.22 0.24 0.25 0.27 0.28 0.30 0.31
noodle

Sales
Cooking oil $56,145 60,430 61,994 67,19 68,74 72,5525 76,650
9 5 0
Instant $8,078 9,329 10,140 11,79 12,50 14,34 14,953
noodle 9 5 9
Total sales 64,223 69,759 72,134 78,99 81,25 86,89 91,603
8 0 9
STotal sales