INNOVATIONS TO LEAD MARKET
Consistent with its strategy to invest selectively in categories and areas where the Company can exert its competitive advantages and grow sustainably, Kinh Do in 2010 continued to invest in infrastructural activities, laying foundation for future growth. A number of strategic marketing initiatives were launched and brought bore positive results for the Company. In particular, R&D was the special focus to ensure a continued stream of new products being introduced to the market in many years to come. In the buns category, our specialists succeeded in developing a formula for super-soft bread with fillings made with fresh milk. The new products were launched in June 2010 and became an immediate hit, capturing 15% of the market share and accounting for 1/3 of the category sales!
Kinh Do moon cakes, despite having been the unchallenged market leaders for years, received significant improvements: better, with 30% lower sugar content, especially a new line of vegetarian moon cakes. In the cookies category, a new, state-of -the-art, world-class production line was commissioned to produce Korento, on time for Tet. All in all, in addition to best meet consumers’ demands, Kinh Do was also shifting its product portfolio to higher prices segments with better profit margins.
BUILDING ICONIC BRANDS THAT ENDURE
With an eye to the future, the Company in 2010 invested heavily in brand building activities, and reaped notable achievements. Kinh Do as a brand was ranked #4 in the Top 10 best known brands in Vietnam (source: ACNielsen 2009). Kinh Do continued to build on its iconic status during Mid-Autumn and Tet to become a symbol for gift of love and affection. The Tet campaign with 360 degree communication plan delivering the brand message to consumers via mass media including TV, prints, newspapers, magazines, etc. and culminated in the activation event Garden of Compassion at Nguyen Hue Flower Festival, receiving praises from the media as well as public. The brand message “See Kinh Do, Feel Tet” reached far and wide to Vietnamese consumers, who responded positively to it. Other major brands such as AFC (crackers), COSY (sweet biscuits), GOOD CHOICE (wafers), and ALOHA (buns and sandwiches) all took leadership positions in their categories with market shares of 25%, 22%, 33%, and 55%, respectively, according to ACNielsen’s monthly tracking of retail sales of consumer products (Retail Audit). Most notably was market research by BMI in October 2010 showing Kinh Do moon cakes dominated the category with almost 80% share of the market.
Top brands in Vietnam (source: ACNielsen)
SYSTEM & PROCESS STANDARDIZATION
In 2010, both above- and below-the-line activities were more focused and effective, thanks to the newly-commissioned Business Intelligence system, which collects and helps analyze, detect trends and patterns, from sales data from hundreds of distributors). Kinh Do also invested in purchasing market data and researches from top international research companies. Armed with sufficient and accurate data, Kinh Do’s managers now could have a more holistic view of the market, competition, and consumers/shoppers, which enabled them to better evaluate program effectiveness and ROIs, and make timely and proper business decisions. During the year, to be ready to integrate new business acquired through M&A, Kinh Do’s Marketing Department reviewed and standardized its operating processes to ensure compatibility and scalability. New and improved processes implemented in 2010 were SBU’s annual planning process (AP), sales and operations planning process (S&OP), new product development process (NPD), etc. Gradually, they have been helping departments and functions at Kinh Do work better and more smoothly with each other. To operate those processes successfully, it is of critical importance to form teams by objectives with clearly defined and communicated roles and responsibilities for each participating team member. This also helps improve overall working environment and relations amongst members.
RESTRUCTURING THE ORGANIZATION, ATTRACTING AND RETAINING TALENTS, BUILDING CULTURE OF PROFESSIONALISM
2010 marked fundamental changes in Kinh Do’s organization, particularly in the Marketing Department. Operating the new structure requires new people in senior and middle management, whom Kinh Do was able to recruit from both MNCs and top local companies such as Unilever, Wrigley, Dumex, Vinamilk, VBL, ACNielsen, etc. The new breed of high caliber managers have been assimilating well to Kinh Do’s culture, working hands in hands with the existing team to transform Kinh Do. The new VPs, Directors, Managers at Kinh Do, with their professionalism, their energy, creativity and discipline, have brought fresh air to the organization.