UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ TRAN BA KHOI ENHANCING BANQUET PROGRAM PERFORMANCE A CASE OF: HEINEKEN VIETNAM BREWERY MASTER OF BUSINESS Ho Chi Minh City – Year 2019 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ TRAN BA KHOI ENHANCING BANQUET PROGRAM PERFORMANCE A CASE OF: HEINEKEN VIETNAM BREWERY MASTER OF BUSINESS SUPERVISOR: NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2019 TIEU LUAN MOI download : skknchat@gmail.com EXECUTIVE SUMMARY According to the development plan until 2020, the Vietnamese beer industry will reach an output about 4.1 billion liters by 2025 to 4.6 billion liters and 5.5 billion liters by 2035. However, beer consumption already reached more than 4 billion liters by the end of 2018. Vietnamese beer industry has been maintaining a growth rate of over 5% per year while many other markets have moved sideways or negative growth in recent years. Vietnam is becoming an attractive beer market that makes both domestic and international beverage businesses stand to fight.
Winning in the beer industry mainly depends on marketing technique secrets more than finance and product recipe. Businesses seize market share by unique marketing strategy from advertising, communication to promotion in all channel such as on premise, off premise, modern on premise, modern off premise and brand building right at the initial customer level. Mention about the communication and promotion in beer market. Many customers and consumers always save an affection for many activations of Heineken Vietnam Brewery such as Heineken formula 1, Tiger street football, Trade loyalty, Fridge, Banquet ect.
From 2016, HVB discorvered that Banquet catering is a popular segment and had strongly impact to beer market share but HVB have not much focused on this channel before. That is the main reason Banquet promotion program was piloted from 2016. With the successful of the first year ran promotion in small scope only two provinces, HVB continued to expand program with more than 30 provinces (in P3. When expand the program so quick in the short time like that, it led to there was many problems and issuses that effected to performance of program and not adapt to the management’s expectation.
The research will explore the cause’s Banquet P3.2019 had not meet KPI. The finding of study revealed that lack of RTMK to manage, deploy, push, check and support ST which played the most important role on poor performance of Banquet P3.2018 which compaired to other factors. Moreover, some reasonable solutions would be recommended to improve performance of Banquet in the future. TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT With out the extremely enthusiastic encouragement, guidance and support of Associate Professor Nguyen Thi Mai Trang and orther teachers in ISB (International School of Business), the entire master-level project would not be completed with the highest qualified research.
I would like to say thank and appreciate to my advisors. It has been a pleasure working with you on this project. I also would like to thank my family, colleagues, classmates who have supported me while I have been studying in ISB and working on my research. Your patience, understanding and respecting greatly appreciated.
TIEU LUAN MOI download : skknchat@gmail.com CONTENTS EXECUTIVE SUMMARY ACKNOWLEDGEMENT LIST OF TABLES. 1 LIST OF FIGURES. Heineken performance in 2018. Competitors of Heineken Vietnam Brewery in 2019.
Objectives and targets for Heineken Vietnam Brewery portfolio brands in 2019. Trade marketing plan in 2019. Commercial department structure. Introduction about Banquet program in traditional off trade marketing.
History of Banquet program. The Banquet program performance pilot phase in 2016. The Banquet program performance in 2017. The Banquet program performance phase 1.
The Banquet program performance phase 2. The Banquet program performance phase 3. Distraction of sales team to Banquet program. Unqualified agency service.
Unattractive mechanism Banquet program. Unpredictable market factors. 38 TIEU LUAN MOI download : skknchat@gmail. Eliminating agency, mechanism, and market factors as the main problems.
Illuminating distraction of sales team to Banquet program as the main problem. Potential cause’s distraction of sales team to Banquet program. Lack of regional trade marketing to manage, deploy, push, check and support sales team. Sales team overloads with many activations.
Sales team only focuses on sales volume and excellent outlet execution. Sales team misunderstands the role of related parties in Banquet program. Cause - effect tree. ALTERNATIVE SOLUTIONS AND JUSTIFICATION.
Recruite regional trade marketing for regions. Develop the application management for Banquet program. 97 Appendix 1: Roles and responsibilities of related departments in Banquet program. 97 Appendix 2: Communication material Banquet program phase 3.
99 Appendix 3: Regional trade marketing – Job description. 100 Appendix 4: Proposal the application management for Banquet program. 122 TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 1: The BP performance pilot phase in 2016 Table 2: The BP performance in 2017 Table 3: The BP performance phase 1.2018 Table 4: The BP performance phase 2.2018 Table 5: The proposal budget for BP phase 3.2018 Table 6: The BP performance phase 3.2018 Table 7: Satistics performance per region in BP phase 3.2018 Table 8: Estimating the expense for five RTMK per year Table 9: Estimating the cost of application for Banquet per project Table 10: Action plan LIST OF FIGURES Figure 1: Organization HVB Figure 2: Commercial department structure Figure 3: Trade marketing roles in HVB Figure 4: The interaction structure between TMK and ST Figure 5: Sales department structure Figure 6: Banquet promotion program process Figure 7: The interaction of related parties in Banquet program Figure 8 : Satistics performance per region in BP P3. Figure 9: Satistics percentage of outlet types and party by outlet types in BP P3.2018 Figure 10: The initial cause - effect map Figure 11: Updated cause - effect map Figure 12: Workflows for related parties in Banquet program Figure 13: The final cause - effect map Figure 14: Cause - effect tree Figure 15: The recommended effectively structure with RTMK roles 1 TIEU LUAN MOI download : skknchat@gmail.com ABBREVIATION ASM: Area Sales Manager BP: Banquet Program HVB: Heineken Vietnam Brewery Limited Company.
NoP: Number of Party PO: Party Owner RTMK: Regional Trade Marketing ST: Sales Team SV: Sales Volume ToffT: Traditional Off Premise Trade Channel TMK: Trade Marketing 2 TIEU LUAN MOI download : skknchat@gmail. Overview Vietnam economy Vietnam’s GDP has positively increasing trend from 2016 until now: GDP in 2016 (+6.7%) and estimated in 2019 (7. In other way, the low inflation rate also has derease trend from 2016 (4.7%) and stable in 2017 (3. Beer industry In recently, Vietnamese beer industry which is evaluated as a highly potential market when income increase year by year as well as beer consumption go up sharply from 2010 until now.
Beer industry growth rate in Vietnam increases always over 5% per year while almost market over the world went through and get lower rate in recent years. Beer consumption in Vietnam get over 4 billion liters in 2018, and is forecasted get over 4.6 billion liters in 2019. (Internal report HVB 2018) HVB product portfolio HVB own many favorite brands beer in Vietnam such as: Heineken, Heineken Silver, Tiger, Tiger Crystal, Strongbow, Desperados, Amstel, Afligem, Larue, Larue Special, Bivina, and Bivina Export. HVB also has planned to release unique strategic actions to recover the SV of Heineken brand as well as increase the innovation with Heineken Silver for new targeting young, dynamic, high-income consumers who mainly live and works in big cities in 2019.
About the implementation, two strategic plans recommended is upgrading Heineken brand (Heineken Silver) and creating a new brand (Amstel) for economy beer segment. To implementing strategic actions, HVB will face to some potential challenges, as the attack from rivals, losing profits by increasing investment cost for new products, cannot gain the expected SV, or the higher tax from government. HVB target customers Target customer: people aged from 20-50 with medium or high income, potential customers mainly live in urban or city. They may be a professionals, employers, senior managers and employees.
3 TIEU LUAN MOI download : skknchat@gmail.com Customer relationships: engagement by brand awareness, advertising, innovation. HVB value proposition Key resources: Heineken have more than 165 breweries in more 65 contries, distribution networks, intellectual property. Value proposition: HVB strategy concentrates on to achieve determined objectives Win in premium price led by Heineken Shape the cider category Lead in marketing and innovation Be commercially assertive Improve the productivity Maintain a better brewing in a world Channel activation: modern On, modern Off, traditional On, traditional Off Cost structure: raw material, production, distribution, quality control and assurance, tax Revenue streams: sales of products, distribution agreements, Heineken experience. Key partners: investors, raw materials suppliers, distribution networks, technology suppliers, sponsorships Key activities: marketing and sales, distribution, production, quality control.
Figure 1: Organization HVB Source: internal oganization HVB 2019 Heineken Vietnam is corporated company with 60% from Heineken Asia Pacific and 40% from Satra. 4 TIEU LUAN MOI download : skknchat@gmail.com Vision, mission and core value of HVB Target: a better Vietnam by creating good value for peole, planet and prospery. Vision and Values: HVB’s vision is to be the leading, proud and responsible brewer in Vietnam, guided by values: “Respect for People & Planet, Enjoyment, Quality and Passion for Winning” Missions: HVB delight consumers, day in day out, with perfect cider and beer brand experiences. Slogan in 2019: Winning, Faster, Together.
With new way of working: (1) Effective workflow, (2) Assigning rights for each region, (3) Focus in efficiency. The standard behavior: (1) Safety first, (2) Act as an entrepreneur, (3) Corporate with trust, (4) Keep in simple, (5) Always learning to development. Ambition to 2021: Become the number one in terms market share, profit and sustainable developments. With priority: Become a market share leader in both Urban and Rural.
Be a beer leader in both premium and mainstream segmentation. Continue keep moment growth of Heineken and Tiger. Develop Apple Cider brand. Increase revenue and manage efficiency expense.
Attract develop and significant advantage talents. Lead sustainable development strategy. Drink responsible policy in 2019: (1) Responsibly in consumption and behave, (2) To be an ambassador to drink responsibly, (3) Do not drink in working hour, (4) Drink do not drive. Heineken performance in 2018 Heineken Global performance in 2018 Generally, Heineken Global had one very successful year in 2018 with all good indicators (SV, net revenue, and profit).
Leo Evers (HVB Managing Director) reported in national commercial conference in Da Nang on 21 March 2019. Consolidated SV in 2018 increased +4. With Heineken brand, SV significantly grew +7. It is the strongest performance in more than a decade.
Net revenue (β) also increased +6.1% organic growth and it led to the increasing on operating profit (β) went up +6. 5 TIEU LUAN MOI download : skknchat@gmail.com Net profit (β) was so good with the absolute number €2.424 billion, increased approximately 12. So, the distributed earning (β) per share €4. Heineken Vietnam performance in 2018 Mr.
Alexander Koch (HVB Commercial Director) also shared the performance of HVB in 2018 with over 1,800 employees in commercial meeting. HVB had a very successful year in winning about SV with total HVB SV in 2018 achieved 15 million hectl liters, increase 13. In detail: sold out 14.1 million hectl liters (increased 13.8% compared to 2017) by HVB sold out and 0.9 million-hectl liters (increased 24.2%) by Heineken Hanoi. Regional sales performance: Regions had fast growth versus last year (>14%): most of region of HVB in the North, Central (Da Nang, Quang Nam), South East (Binh Duong, Binh Phuoc), Mekong 1 (Tay Ninh, Long An, Tien Giang, Ben Tre, Vinh Long, Dong Thap, Tra Vinh), Mekong 2 (Can Tho, Hau Giang, Soc Trang, Ca Mau, Ba Lieu, An Giang, Kien Giang).