TABLE OF CONTENT

1.0 INTRODUCTION.....................................................................................................................1

2.0 PRODUCT DESCRIPTION......................................................................................................2

3.0 PRODUCT MARKETING MIX (4Ps) – VALUE & SATISFACTION..................................5

3.1 PRODUCT........................................................................................................................8

3.2 PRICE.............................................................................................................................12

3.3 PLACE............................................................................................................................13

3.4 PROMOTION.................................................................................................................15

4.0 CONCLUSION........................................................................................................................17

REFERENCES..............................................................................................................................18

1.0 INTRODUCTION

Marketing needs to be consider as a critical issue of companies whether they’re big or

small, for –profit or not-for-profit, domestic or global. Marketing mix which is an important

concept of the company’s marketing process includes four factors: Product, Price, Place and

Promotion (well-known as 4Ps). It is always a difficult problem with the questions “How to

create right product, sell at righ price, in the right place and use the suitable promotion” for the

firm to implement successfully its performance.

To have a deep understand of this marketing concept, the essay will concentrate on

analizing 4Ps in the Tan Hiep Phat Beverage Group’s marketing campaign of Zero Degree Green

Tea during launching and developing period in Vietnam. With the huge potential ready to drink

(RTD) tea market and high consistent growing (more than 34%), we believe that this case will be

typical for getting more knowledge about marketing mix strategies.

2.0 PRODUCT DESCRIPTION

Official website of Tan Hiep Phat shows that:

Tea is a traditional raw material made into a typical and popular drink in the whole world

especially in Asia. Positioning in the part of refreshment need and paying attention to the

health benefit of the people, in early 2006, Tan Hiep Phat launched ready to drink tea

trade mark named Zero Degree Green Tea to the market, a breakthrough introducing a

convenient drink in 500ml PET bottle with green colour and trade mark logo (two circles)

to the dynamic pace of life, and successfully sent the message “an outstanding drink

compared with ordinary refreshment drinks on account of its nutritious value and health

benefit. Green Tea bears the strong trend of the modern time and is a wise choice in the

taste of enjoying tea of the Vietnamese people”.

The picture of Zero Degree Green Tea

In 2007, Zero Degree Green Tea immediately became one of the fastest growing brands

in Vietnam. The research of Neilsen company in 2007 indicated that its Brand Equity Index is

6.4, one of highest in Vietnam (only 8% of all Fast Moving Comsumer Good brands have scores

of 5.5% and above). In 2008, Zero Degree Green Tea achieved year 5 sales target of US$16

million in year 3. The Economist (April 26th – May 2nd 2008) stated that Zero Degree Green Tea

is thought to be the country’s fastest growing brand, with sales almost doubling last year. It also

maintained market leadership and an average share 51.5% in the last 3 years (from 2007 to

2009). In 2010, Zero Degree Green Tea received the Vietnam National Brand award.

Thanks to huge success of Zero Degree Green Tea and green tea products of other

competitors, RTD tea consistently recorded the fastest total volume growth in soft drinks in 2009

and 2010 in Vietnam. RTD tea sales increased by 34% in total volume sales in 2010.

According to the report titled Soft Drinks in Vietnam (2011), Tan Hiep Phat (THP)

Group was formerly known as Ben Thanh Beer & Beverages Co Ltd, and founded on 15 October

1994. At the beginning, it focused on producing and trading beer and alcoholic drinks. The

company has continued to improve its product quality by upgrading to new manufacturing

technology and applying ISO standards. “It is one of few local producers willing to invest in

Rearch and Development (R&D) and branding activities to increase volume and value sales” the

report stated.

In 2004, Ben Thanh Beer & Beverages Co Ltd changed its name to Tan Hiep Phat

Manufacturing and Trading Co Ltd. The “Soft drinks in Vietnam” report (2011) also shows that:

Tan Hiep Phat’s head office and factory are located in Thuan An district (Binh Duong

Province), spanning over 110,000 sq m. The factory exploits a chain of fully automatic

production systems to ensure hygiene and product quality. In particular, Tan Hiep Phat

invested heavily in launching the Enterprise Resource Planning system from SAP in

April 2010. This step expressed the ambition of the company to boost its production rate

and to reduce waste in order to enhance efficiency and product quality.

The company offers a wide product portfolio of non-alcoholic drinks in Vietnam,

including bottled water, RTD tea, and sports and energy drinks. Zero Degree, Dr Thanh

and Number 1 are the manufacturer’s most popular brands. Tan Hiep Phat appears to be

most active in RTD tea. It offers many RTD tea flavours, such as: sugared or sugar-free

green tea, herbal tea, and winter melon tea. The leading player’s products are aimed at

more health conscious consumers, for example, females and the elderly.

The segmentation of Zero Degree Green Tea is consumers that has already drunk

carbonates, mineral water and even purified water because of its superior healthy, cooling

benefits with the previous essences of green tea. Zero Degree Green Tea target market is

vietnamese young adults who’re suffering the negative impact of fast-paced lifestyle such as

pollution, great pressure at school and work, etc and raise awareness of healthy drinks use (Best

Sustained Success, 2011). We can see obviously that young Vietnamese people under 30 years

old account for 56% in total 86 millions (Statistical handbook of Vietnam 2009, 2009), which

becomes wide potential market for Zero Degree Green Tea.

3.0 PRODUCT MARKETING MIX (4Ps) – VALUE & SATISFACTION

Marketing mix which is third four steps of creating value for customers and building

customer relationchips consists of a blend of the four marketing mix elements (Product, Price,

Place, Promotion) that transforms the marketing strategy into real value for customers.

Marketing mix is ‘the set of controllale, tactical marketing tools that the firm blends to produce

the response it wants in the target market’ (Armstrong & Kotler, 2010). Figure 3.2 shows the

marketing tools under each P.

Figure 3.1. An Expanded Model of the Marketing Process

Figure 3.2. The Four Ps of Marketing Mix

Amongst the other marketing mix models have been developed over the years is Boom

and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus

people, processes and physical layout decisions.

Another marketing mix approach is Lauterborn's 4Cs, which presents the elements of the

marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer

needs and wants (the equivalent of product), Cost (price), Convenience (place) and

Communication (promotion).

Figure 3.3. Four Ps versus Four Cs

Product Customer solution

Price

Place

Promotion

Customer cost

Convenience

Communication

‘Customers see themselves as buying value or solutions to their problems’ (Armstrong &

Kotler, 2010). They see themselves as capturing value when total benefits received are more than

total costs of searching, buying, using, maintaining & disposing the product. They want to be

satisfied through getting the product value that helps them to solve their needs & wants as

efficiently, effectively and competitively as possible. ‘The twofold goal of marketing is to attract

new customers by promising superior value and to keep and grow current customers by

delivering satisfaction’ (Armstrong & Kotler, 2010). Therefore, ‘marketers would do well to

think through the four Cs first and then build the four Ps on that platform’ (Armstrong & Kotler,

2010).

3.1 PRODUCT

Official website of Tan Hiep Phat shows that:

Produced on modern Japanese technological production line with selected verdant leaves

plucked out of tea plants on plains, green tea is able to keep its natural and pure flavor.

Green tea is mad through hot extraction process in order to insure food safety and

hygiene standard and to detain precious essences of green tea. With the use of heat-

resisting 500ml PET bottle, the choice of trade mark logo (two circles), and the shape in

green color friendly to the eyes which creates a feeling of becoming attached to nature,

green tea bears high aesthetic value under the sponsorship of Number One trademark.

Zero Degree Green Tea has two original flavors: sugar-free green and green tea with

lemon flavor. With nutritious element such as vitamins E, C, and especially EGCG, a

strong anti-dioxide element, green tea helps you reduce stress, reinforce resistance,

prevent skin ageing and cancer in order to cool down your body and spirit after a

hardworking day or after a long trip. It is very convenient to bring along Zero Degree

Green Tea on trips, picnics, or in conferences… and sometimes simply drink it at home

instead of purified water.

Now Tan Hiep Phat also provides a variety of green tea products such as lemon green tea

with honey in PET bottle, honey tea in glass bottle and even prepare to launch green tea in box.

It has divesified the containers of original flavours such as producing lemon green tea in glass

bottle, PET bottle and can to satisfy customer needs and wants.

Various products in green tea product line of Tan Hiep Phat

As we mentioned above, Zero Degree Green Tea success has already been actualized. It

sustained market leadership and an average share 51.5% in the last 3 years (from 2007 to 2009).

In 2010, Zero Degree Green Tea received the Vietnam National Brand award. Thanks to huge

success of Zero Degree Green Tea, Tan Hiep Phat continues to lead RTD tea with a 41% share

of off-trade value sales in 2010. Other competitors such as C2 of URC Vietnam, Green tea 100

of Tribeco (Saigon Beverages), Lipton Pure Green tea of PepsiCo Vietnam, etc account for 59%

share of off-trade value sales in 2010.

“Soft drinks in Vietnam” report (2011) identified:

In Asia, RTD tea is the core product type of most of the leading companies. RTD tea

sales are expected to grow by a 22% off-trade volume Compound Annual Growth Rate

(CAGR) over the forecast period. This is much slower than the review period CAGR as

the category approaches maturity. Nonetheless, the fast rate of innovation in RTD tea

might see stronger growth if players capture the consumers’ attention by launching more

interesting products.

This means green tea has became core product type of the leading beverage companies

and green tea product line is in the ongoing to maturity but it still has strong possibilities to

develop if the producers pay attention to research and development for product diversification. It

also means that green tea product life cycle is at the stage between growth and maturity. In this

stage, companies try to divesify their green tea products with various flavours or containers to

utilize their profitability and defend their market share like the same way Tan Hiep Phat has been

doing.

3.2 PRICE

Tan Hiep Phat enjoyed the advantage of the “first-mover” in RTD tea market in Vietnam.

“Although RTD tea was present in the country long before the 2000s, it only started to develop

fast from 2006 when Tan Hiep Phat launched Zero Degree Green Tea” (Soft Drinks in Vietnam,

2011). Thus, Tan Hiep Phat applied the “new product pricing” strategy to enjoy the advantage of

market-skimming through charging higher price to get more profits. In early 2006, Zero Degree

Green Tea was positioned at the higher price (approximately 20% more than the other beverage)

but it was still preferred because of its health benefit (Hoang, 2007). The evidence is that Zero

Degree Green Tea immediately ranked atop of the fastest growing brands in 2007 in Vietnam.

Its success inspired more than 20 competitors such as C2 of URC Vietnam, Green tea 100

of Tribeco, Lipton Pure Green Tea of PepsiCo Vietnam, Queen Tea, etc and even illegal copycat

competitors (Best Sustained Success, 2011). There’re now not much difference in the price of

RTD tea in terms of retail format (Soft Drinks in Vietnam, 2011). Figure below proves this.

Figure 3.2.1. Retail price comparison of RTD green tea in 2011 in Vietnam

PET

bottle

Zero Degree Green Tea C2 Green Tea 100 Lipton Pure Green Tea

500ml VND 7,500 VND 6,800

360ml VND 5,500

450ml VND 6,000

As we already analized the product level and product life cycle, Tan Hiep Phat applies

the going – rate pricing policy to defend their market share along with insuring their profitability.

3.3 PLACE

Zero Degree Green Tea inherited total distribution channels including 300,000 outlets

with more than 200 distributors in all the 64 provinces and cities that Tan Hiep Phat has built

(Kotler, Kartajaya, & Hooi, 2008). Tan Hiep Phat applied intensive distribution which means

“consumers can easily purchase its products in supermarkets/hypermarkets, food/drink/tobacco

specialists, independent small grocers, and even street vendors” (Soft Drinks in Vietnam, 2011).

By this way, consumers get product value and satisfaction. This distribution power forces small

beverage producers to stop their manufacturing or become copycat companies. The recent

evidence is that the trademark O2 and Omega of Viet My and Quang Minh companies litigated

by Tan Hiep Phat because of trademark infringement.

Zero Degree Green Tea is popular in many supermarkets, hypermarkets…

… and independent small grocers

Both Tan Hiep Phat and Pepsico Vietnam have the strong nationwide distribution

network to establish a presence in the market. Third giant Saigon Beverages is considered

weaker in distribution but now continues to invest in upgrades to machinery and improved

distribution through cooperating with retailers to promote its products within, for example,

supermarkets and hypermarkets, using billboard and in-store posters or discounting.

3.4 PROMOTION

At the beginning, Tan Hiep Phat chose boosting communication solution with advertising

on televisions (high frequent broadcasting spots on TV), in printed and electronic newspapers

and cooperating with the below the line activities (Hoang, 2007). The marketing campaign has

transferred successfully the message: “an outstanding drink compared with ordinary refreshment

drinks on account of its nutritious value and health benefit”. Green Tea bears the strong trend of

the modern time and is a wise choice in the taste of enjoying tea of the Vietnamese people. Its

success is partly advantage of first mover in the market, the first firm offered customers the

choice for nutritious and healthy product in tradditional green tea flavour instead of carbonates

and purified water.

Zero Degree Green Tea’s poster emphasizes natural freshness, cooling body and other

nutritious value

Tan Hiep Phat chose two circle logo for Zero Degree Green Tea which symbolize the

balance of cooling body and soothing mind aimed to raise customer awareness of its major

health benefits. Zero Degree Green Tea was also sponsored by NumberOne, a successful

trademark before according to the assessment of Kotler et al. (2008), which gained customer

reliability. Each advertisement reflected the company’s knowledge of the market and the

behaviour of local consumers. Zero Degree Green Tea’s advertisements during its launch period

focused on the natural freshness of the product on hot days. This advertising quickly captured the

attention of consumers as few other brands offered similar themes. For example, C2 was

launched right after Zero Degree Green Tea but it is rapidly in the passive state because it chose

similar slogan “cool and clean” as Zero Degree Green Tea which couldn’t create the difference

with the product launched before. Although C2 applied penetration pricing policy and strongly

invested in advertisement on TV and other mass media methods, it accidentally restricted its

segmentation because it tried to persuade the consumers who already drunk carbornates (not

wide beverage market) to drink it. Accompanied with its unavailability for sales, the launching of

C2 initially supported the strong growth of Zero Degree Green Tea.

In 2010, the leading player launched a new advertising campaign for Zero Degree Green

Tea, which focused on its relaxation and stress-relieving effects.

4.0 CONCLUSION

In summary, Tan Hiep Phat chose the wise step when it has invested in research and

development to become the first – mover in competitive green tea market with Zero Degree

Green Tea trade mark. The right message “an outstanding drink compared with ordinary

refreshment drinks on account of its nutritious value and health benefit” with suitable logo and

green shape color that create comfort feeling and freshness for customers raise successfully

awareness of nutritious and healthy drink for customers. Lauching Zero Degree Green Tea offers

customers the choice for nutritious and healthy drink instead of carbonates and ordinary purified

water. Along with distribution power, a strong nationwide distribution network, Tan Hiep Phat

makes customers easily purchase the product everywhere and close or restrict the competitive

chance of both small and even multinational competitors. Zero Degree Green Tea has combined

the boosting media communication with advertising on TV, in printed and electronic newspapers

and other below the line activities and therefore, supported effectively the strong trademark

growing and off-trade volume sales. These activities provide customer sastifaction of finding,

purchasing, using and two way communication, which means delivering product value and

satisfaction to the customers.

REFERENCES

Statistical handbook of Vietnam 2009. (2009).

(2011). Best Sustained Success. Zero Degrees Green Tea Campaign, Tan Hiep Phat Beverage

Group.

Soft Drinks in Vietnam. (2011, March). Retrieved June 2011, from Euromonitor International

Web site: http://www.euromonitor.com

Armstrong, G., & Kotler, P. (2010). Marketing: An Introduction Global Edition (10th ed.). New

Jersey: Pearson Higher Education.

Hoai, T. (n.d.). Product & Health: Zero-degree green tea - a shower. Retrieved June 2011, from

Tan Hiep Phat Group Web site: http://thp.com.vn/

Hoang, D. D. (2007, 12). The case of Zero Degree Green Tea and C2. Success Magazine.

Kotler, P., Kartajaya, H., & Hooi, D. H. (2008). Think ASEAN! Havard Business School Press.