Developing Guerrilla Marketing Strategy Marketing Essay

Published Date: 23 Mar 2015

INTRODUCTION

According to Vietnam General Tax Office, every year, there are roughly 50 thousands of companies entering Vietnamese market. Even in a hard year when the market has experienced continuous fluctuations like 2012, it is counted that only within the first 7 months of 2012, the number of Vietnamese newly established enterprises amounted to 46,818, in which the non-state-owned sector includes 42,349 new enterprises. On the other hand, almost half of that figure represents the number of enterprises declared bankruptcy or cessation. Statistics also showed that by the end of the 7th month of 2012, the number of enterprises that cease their operation are 20,741 (insert footnote: source - Tax Office). Which means quite obviously that, when the economy does not show positive signs and competitions remain harsh, immature enterprises may easily fail the market.

So the issue addressed is that, with limited resources both in terms of capital and personnel, how can a new business, with an unfamiliar product or service overcome such challenges and prevail in the market?

The Company chosen for study and analysis is Belgium Chocolate JSC (also referred to as Belcholat). Belcholat JSC. is a Vietnamese company, which was establish in 2000 and specialized in chocolate products. The taste of chocolate which comes from Belgium is probably better than any other country in the world thanks to its special combination of gifted geographical, soil, and weather conditions which cannot be found elsewhere and which provides best cocoa for making chocolate. Aiming at bringing real, tasteful, and high quality Belgium chocolate to Vietnamese people, Belcholat's products are made from 100% cocoa butter, following strict storing, warehousing and manufacturing standards. The name of the Company are also named accordingly as "Belcholat".

Like any other SME, Belcholate had to operate with a comparatively small budget. To cover all the costs to keep the business running, the Company has been trying hard to boost up the sales volume. Belcholat is no exception. To stay firm in the market and optimize the profit, producing high quality and tasteful chocolates are not enough, and hence, a sound marketing strategy is compulsory to ensure its success.

This dissertation is thus dedicated to the analysis on how a cost-efficient marketing strategy has been applied and monitored by Becholat to sustain the Company's existence and make its products well-recognized. Throughout the research, the marketing strategy chosen

Imperativeness of the research

When high quality real chocolate is not defined or positioned as a mass product, Belcholat would apparently not adopt a cost-volume strategy. With limited resources (in the year 2000 when the Company was established, Belcholate only has 3 people sharing the common ambition to bring real Belgium chocolate to Vietnamese people and a relatively small starting capital of USD 20,000) at the early stage of development, Becholat might not either set a huge budget for advertising or distribution channels. After first 7 years very successful with very high grown every year, in 2008, Belcholat has first time faced with the go down growth and it happened again in 2009, 2010. By early 2011, Belcholat has come to realized better than ever the need to change the marketing strategy for better fit for some new market condition. And by the consulting, they decided to apply the Guerrilla Marketing strategy.

Detailed definition on the Guerrilla Marketing strategy as well as in-depth explanations on Guerrilla Marketing tactics and approaches would be given in the following chapter. Still, it can be briefed as: in adopting the Guerrilla Marketing strategy to reach target customers, with limited resources both in terms of finance and personnel, Belcholat has put huge efforts in designing smart and influential campaigns. Designing intelligent and inspirational campaigns are crucial for every pro-Guerrilla Marketing business; monitoring costs and choosing the right time to deliver such campaigns are also major concerns in Guerrilla Marketing. Belcholat's marketing team has also focused on developing suitable plans with profound impacts on their customers and gradually won a considerable market share. However, to generate strong impacts on customers and achieve a desirable sales volume each year with a limited annual marketing budget of VND 500,000,000, Belcholat has to deal with very tough calculations and adjustments.

After one year applying Guerrilla Marketing strategy, by the end of 2011, Belcholat has made an increase of almost nearly 30% in sales volume compared to that of 2010.

Along with some considerable achievements when adopting Guerrilla Marketing approaches, Belcholat has to cope with several difficulties, including unstable market conditions, increasing signs of economic downturn, as well as the emergence of huge competitors in the market over the past few years such as: Chocolate Graphics, D'art Chocolate, Guylian, etc.

Therefore, it is of high urgency to develop a fit and sustainable marketing strategy for the Company to survive in Vietnamese market, and later on may penetrate foreign markets. This dissertation is also for such purpose.

Problem statement

As addressed above on the imperativeness of the research, the dissertation seeks to figure out a sustainable roadmap for Belcholat in applying Guerrilla Marketing strategy.

In doing such, it is necessary to look at Belcholat's current status and existing conditions, which can be briefed as:

Belcholat is categorized in Small and Medium Enterprises (SMEs) according to Vietnam's standards and definitions. The Company has totally 12 years of experience in manufacturing and delivering chocolate products in Vietnam. Currently, Belcholat has acquired a remarkable market share in chocolate ingredients to hotels, resorts and bakery companies. On the other hand, its retail market has not been very lucrative. Retail sales volume peaks at Valentine's period (40-50% of total retail sales volume for the whole year) even though Belcholat does not position its products as seasonal products. Moreover, recently several foreign competitors have penetrated Vietnam's chocolate market via import channels and hence, the Company has to cope with increasingly fierce competitions.

In terms of marketing plans and approaches, Belcholat has conducted some certain marketing activities yet achievements were rather modest, and the Company is still struggling in figuring out an overall, long-term and suitable marketing strategy to boost up sales volume and promoting Belcholat brand in the market.

So what are the solutions for Belcholat?

Throughout the dissertation, the author will try to provide the answers and explanations to the following questions:

How to develop suitable marketing strategies to better deliver the products to customers and enhance the Belcholat brand, at affordable costs?

How to push forward the retail market for Belcholat?

How to raise customers' awareness on the qualities and benefits that chocolate would bring them and how to have a positive influence on their consumption habit?

How to sustain effective Guerrilla Marketing approaches within the context of increasing market fluctuations and harsh competitions?

How are costs controlled during the implementation of Belcholat's marketing strategy?

And the answer to all those above, is found in a marketing strategy, called "Guerrilla Marketing"

Research objectives

Aiming at seeking the answer to the questions of how to extend the retail market for Belcholat's products as well as how to develop suitable and affordable marketing strategy for the Company, the dissertation is aimed as:

Evaluating the suitability of the Guerrilla Marketing strategy for such companies as Belcholat;

Highlighting the differences in Belcholat's performance in the pre-guerrilla and post-Guerrilla Marketing application, and evaluating achievements gained by Belcholat after one year of Guerrilla Marketing application; and

Providing some recommendations for improvements and better control over the implementation of Guerrilla Marketing strategy for other Vietnamese firms.

With the objectives as above, the dissertation shall be structured as following:

Structure of the research

Closely connecting with the introduction, the body of the research is about to answer the big question of how Guerilla marketing strategy has been developed in Belcholat. Jsc. The structure of the research has 4 chapters that are followed with details and illustrations.

Chapter 1 is the literature review on marketing concept and Guerrilla Marketing theory. The concept of Guerrilla Marketing is expressed theoretically and is compared with class marketing ideation. Based on that framework, the success of Guerilla marketing is showcased in various companies worldwide and in Belcholat., Jsc. - a 100% Vietnamese company in particular. This chapter will also list major elements of a powerful and effective Guerilla marketing strategy.

Chapter 2 draws attention to the specific case of Belcholat, Jsc. First of all, this chapter will talk about chocolate and its products and its demand worldwide and in Vietnam. Then, it talks about benefits of chocolate to consumers. Vietnamese market has been receiving a number of chocolate producers and suppliers. The final part of the chapter will be the appearance of Belcholat., Jsc in Vietnam. It will present elaborate introduction, history and culture, economic market share, its competitors and its success in Vietnam. These facts and figures will be later analyzed with details and graphs in Chapter 3.

Chapter 3, the following chapter digs deeper into the facts and figures of the Company's marketing plans. The author will evaluate the company's current marketing plans, its competitive market position and SWOT analysis. In between, the author has done a survey on habit and demand for chocolate in Vietnam market and how much information chocolate consumers know about Belcholat brand-name. From analyzing data of the survey and applying Five Forces analysis formula, the author will reveal pros and cons of different keting strategies the Company has been developing recently, yet, the main issues go parallel. The success of Belcholat becomes real only when Guerrilla marketing concept is applied.

Chapter 4, the final chapter is entirely about how Guerrilla Marketing has solved Belcholat Sale and Marketing plan and the outcomes of this development. The development of this strategy including marketing segmentation, market targeting, market positioning and market mix of 4 P elements will be presented in this chapter. The author will also lay out monthly action and budget plan that has been applied in Belcholat. The outcomes will prove the effectiveness of Guerrilla Marketing concept in a Vietnamese company, thus, expected bring success to plenty more companies worldwide.

The relevance of the research

With an analysis on the specific case of Belcholat in applying the Guerrilla Marketing strategy to chocolate products, the research is dedicated to visualize marketing theories and effectuate marketing models which have been learned from the MBA course and figure out how those theories and knowledge are applied in empirical cases.

Scope and limitation

Scope: Vietnam market will be the focal point of the analysis.

Limitation: by focusing on designing a suitable and effective Guerrilla Marketing strategy, discussing pros and cons of this strategy, and suggesting helpful control mechanisms for Belcholat, this dissertation draws greater attention on marketing plans and tactics, rather than on analysing the R&D process although the innovations made to the chocolate products are vital to the success of Belcholat.

Research methodology

The dissertation is a combination of qualitative and quantitative research and analysis

Surveys and in-depth interviews with Belcholat's huge customers are also conducted to evaluate the effectiveness of the marketing strategy applied.

Sources of information:

Mostly uses secondary data from confectionery market statistics and reports.

Pressed reports, journals and e-journals relevant to the topic are also used for analyses throughout the dissertation.

CHAPTER 1: LITERATURE REVIEW ON GUERRILLA MARKETING STRATEGY

1. What is Guerrilla Marketing?

There are several approaches marketers may think of when targeting their customers, positioning their products and services in the market or determining distribution channels. There would be several times as much issues that marketers should be concerned about when developing a fit strategy to reach a desirable number of customers and an optimal amount of orders.

Ever from the very early stage of marketing history, people are well aware that a very good product or service by itself may hardly win the market, whereas a brilliant sales strategy or an innovative marketing idea may bring astonishing outcomes for the product or service. The ideology of "good wine needs no bush" has become obsolete.

It is another case when considering small businesses. A common sense is that brilliant marketing strategies often go with huge budgets. So the question is how can small and newly established business can set a huge budget for marketing to gain desirable effects? The most suitable answer and probably the best remedy for small business can be sought in a strategy called "Guerrilla Marketing".

Guerrilla Marketing, as defined,is an advertising strategy that focuses on low-cost unconventional marketing tactics that yield maximum results. The term was originally initiated by Jay Conrad Levinson in book "Guerrilla Advertising" published for the first time in 1984, which then became one of the best-seller marketing book and treated as the savior of small businesses. Most of analyses made in this dissertation shall also be based on Levinson's school of thought.

The terminology of "Guerrilla Marketing" was inspired by guerrilla warfare - a form of unconventional warfare relating to the small and clever tactics used by armed civilians. These pretty much remind us of the memorable Vietnam - America war during the 1945 - 1975 period. It was immensely unbelievable to the American people, as well as the rest of the world that such a small and seem-fragile country like Vietnam did ultimately gain victory in that war. Frankly speaking, America may without any struggle crush a nation three times bigger than Vietnam with his strong, astonishing and heavy weapons. Vietnamese leaders at the war, by that time, were highly aware that their army forces as well as weapons were far behind those of the American and a straight war might be hugely devastated and painful to the country. They decided to apply a very clever strategy called "guerrilla war", which was a set of tactics including ambushes, raids, sabotage and surprising elements. And they were successful, Vietnam finally, got their independence after several decades of fighting against the American.

Much like guerrilla warfare, Guerrilla Marketing uses the same sort of tactics in the marketing industry. This alternative advertising style calls for an irregular marketing strategy, with emphasis on dynamic ideas, high energy and imagination. Guerrilla Marketing is about taking the consumer by surprise, make an indelible impression and create copious amounts of social buzz. Guerrilla Marketing is said to make a far more valuable impression with consumers in comparison to more traditional forms of advertising and marketing. This is due to the fact that most Guerrilla Marketing campaigns aim to strike the consumer at a more personal and memorable level.

Guerrilla Marketing is often ideal for small businesses that need to reach a large audience without breaking the bank. It also is used by big companies in grassroots campaigns to compliment on-going mass media campaigns. Individuals have also adopted this marketing style as a way to find a job or more work.

2. The History of Guerrilla Marketing

Advertising can be dated back to 4000 BC where the early Egyptians used papyrus to make sales messages and wall posters. What we consider traditional advertising and marketing slowly developed over the centuries but never really boomed until the early 1900s. It was at this time that the main goal of advertisements were to educate the consumer on the product or service rather than to entertain and engage them.

In 1960, campaigns focus on heavy advertising spending in different mass media channels such as radio and print. It wasn't till the late 1980s and early 1990s that cable television started seeing advertising messages. The most memorable pioneer during this time was MTV where they focused on getting the consumer to tune in for the advertising message rather than it being the by-product of a featured show. Agencies struggled to make an impression on consumers and consumers were tired of being marketed to. It was time for a change.

In 1984, marketer Jay Conrad Levinson introduced the formal term in his book called "Guerrilla Marketing." Levinson comes from a background as the Senior Vice-President at J. Walter Thompson and Creative Director and Board Member at Leo Burnett Advertising. In Levinson's book, he proposes unique ways of approaching and combating traditional forms of advertising. The goal of Guerrilla Marketing was to use unconventional tactics to advertise on a small budget. During this time, radio, television and print were on the rise, but consumers were growing tired. Levinson suggests that campaigns need to be shocking, unique, outrageous and clever. It needs to create buzz. Small businesses started changing their ways of thinking and approached marketing in a brand new way. The concept of Guerrilla Marketing continues to develop and grow organically.

3. What are the differences between conventional marketing (or traditional marketing) and Guerrilla Marketing?

Simply looking at the definition of Guerrilla Marketing, we can be sure that it has a lot to do with creativeness and a lot of innovations should be made to traditional way of thinking that has been applied to marketing. Differences from traditional marketing and Guerrilla Marketing are several-fold. Within the context of this dissertation, however, only some remarkable differences are chosen for analysis and illustrated with simple examples for better comparison.

Let's start analyzing the differences of traditional marketing from Guerrilla Marketing by a funny bookstores story, which is as following: A small bookstore was located on a beautiful street with quite a lot of pedestrians, commuters, and other people crossing the street every day. Unfortunately, that small big store, "Books For Every One" - that's how it was named, was positioned right in the middle of the two other huge stores which were also selling books. Bad enough, the bookstore on the on the left hand side of "Books For Every One" hanged a huge banner saying that "Shocking sale off 50%". And even worse, the bookstore on the right hand side also hanged a giant banner, which as almost bigger than the surface of "Books For Every One", saying "Special sale, discount up to 70%". In that case, every one might got freaked out and frustrated. However, the owner of "Books For Every One" did not give up that easily. The next day he hanged a board in front of the store with just two simple words: "Main Entrance". Apparently, customers were easily trapped to enter "Books For Every One" at their first step. That cunning man has applied a very low-cost, surprising, and highly effective way to win the customers. And to some extend, he has practiced a Guerrilla Marketing approach.

So the first difference we may realize through the story above between traditional marketing and Guerrilla Marketing is the way of thinking, or in other words, the idea. If not for such idea, the man in the above story could hardly save the situation and he could do nothing but watching and waiting to loose the customers in despair. Guerrilla marketers do not, and somehow cannot, rely on huge budgets or financial capacity to develop their marketing plans. They rather base on their creative thinking and surprising, dynamic ways to reach their target customers.

In traditional marketing, product diversification is encouraged to satisfy several groups of customers. This is, however, more suitable for big firms than for small businesses and this may cause the business at risk for extending too much and not focusing to develop the most competitive product. Guerrilla Marketing advises people to expand the business only to a sustainable extend and focus on their key product since the key product contributes the most to the return of the business.

Traditional marketing uses mass media and several advertising channels to attract the attention of as many people as possible, whereas Guerrilla Marketing focuses on reaching the right group of customers. In other words, traditional marketing tries to broadcast while Guerrilla Marketing puts efforts to effectively narrowcast. Because it is very time-consuming and costly when trying to talk to every person about your product, yet it would be much more efficient if you talk to people who may care about the product. Let's take a women's shaping underwear brand for example. When an advertisement about the product is run on VTV3, it may be caught by many people yet might slip away easily from their mind for the first few times. Attention might be achieved when the advertisement is repeatedly broadcast and that would be so costly. There would be an alternative when a short introductory commercial about the shaping underwear is made on Shopping TV, which has become the favourite channels for several housewives. With this choice, the number of audience may declines yet the impact is more profound. However, such approach is still costly and unfocused. Guerrilla Marketers, in stead, would choose to reach even smaller group of customers by very a more concentrated and low-cost channel which is women magazine.

In terms of investment, traditional marketing often assimilated investment with money whereas Guerrilla Marketing suggests that when you do not have much money to invest, you may invest idea, time, imagination, creativeness, and information. And such investment should be made in a very smart manner. Let's listen to another story: There was a young lady owning a small flower shop. Her budget for marketing and advertising was also small as her flower shop and she could not afford to advertise for her artistic flowers on expensive media. She decided to, on a beautiful Sunday morning where many people would love to hang out at the central park, place a very charming and beautiful basket of flowers in a very eye-catching corner where everyone can see as they walk into the park. People in the park began to wonder who made such beautiful flowers and they got close to the flower basket to find a small handmade tag attached to the basket introducing about the owner with her contact detail. Amazing enough, the next day the number of visitors to the flower shop rose suddenly and after a month, the quantity of orders almost doubled.

Sure enough, Guerrilla Marketing is not a matter of luck yet a matter of creativeness and timing.

4. Majors attributes to a powerful and effective Guerrilla Marketing Strategy

In order to reach desirable outcomes, Jay Conrad Levison has figured out 16 attributes to a successful marketing strategy, which can be listed as: commitment, investment, consistent, confidence, patience, assortment weapons, subsequence, convenience, amazement, measurement, involvement, dependence, armament, consent, content, and augment.

A successful GuMa strategy must be fully aware of these 16 factors as a whole and negligence to any of them is not allowed. However, within the context of this dissertation, we shall only discuss the first five leading attributes as follows:

Commitment

Apparently, when setting any plan, you cannot fulfill it if not stick to it until the end with full commitment. For Guerrilla Marketing, it is even far more important to stay focused at every stage of the marketing plan to reach your goals. Of course the plan may be subject to some certain adjustments from time to time during the implementation process for improvement and fitness in line with the market conditions. Still, the overall target outcomes and commitment must be maintained from the beginning until the end to accomplish goals as set in the plan. You cannot convince customers that your product is what they need and good for them when you do not focus in the conversation, you cannot win customers' loyalty if you miss the date of delivery or do not carry out any follow-up act.

Investment

Any business cannot survive and make profit without investment. The phrase "no investment, no return" has become an inarguable idiom. It is not to say, however, that return would come right after investment, especially in marketing. It might take several months for a marketing plan to work out after the implementation and sometimes it even takes years for a business to cover their invested capital. In Guerrilla Marketing, appropriate investment is also one of the milestones to success. For Guerrilla marketers, profit is their major concern. They will not give up a buck today if they are not sure to gain twice or several times as much in the future. So it is of important to set an affordable marketing budget and make cautious and low-risk investment to sustain the business.

Consistence

A Guerrilla Marketing strategy also needs to be consistent in order to reach desirable outcomes. You should be consistent with your marketing plan to avoid undesirable costs. You should not change your media, you should not change your message as these may change the essence of your product as well. In marketing, identity is important. Once you loose your identity, you cannot be recognized or chosen. As guided by Levison, consistency leads to familiarity, familiarity leads to confidence, and confidence promotes sales.

Let's look at the case of Nhu Lan Bread. Many people may not remember since when the brand appeared in the market. But the popularity of the brand, as well as the number of Nhu Lan Bread's loyal customers are the dream for any bread makers. However, in 2005, the Brand was, for some reasons, renamed as "Huong Lan". The changed name, for whatever reason, then did not ring any bell to customers as they are too familiar with the original name of Nhu Lan. Some even doubt: "Is that the same tasteful bread that we used to buy? What happened to our favourite Nhu Lan Bread?".

It takes a time for a marketing strategy to work out, and it takes years for a brand to be widely recognized. Nhu Lan is just a small example of consistency in marketing. The brand image is an unvaluable asset, you can never know what you may loose when your recognized image is changed. Therefore, it is concluded that if you are setting a marketing plan, be consistent and firmed to reach the target outcome.

Confidence

Confidence plays a vital role in a marketing strategy. You cannot attract customers if you are not confident about your product and your strategy. You will not want to put your time and effort in a plan that you are uncertain of its return, and so, such plan would never work. Only confidence will keep you until the end of the road to reach your goals.

Patience

A long with commitment, Guerrilla Marketing also requires patiences. As previously noted, you cannot expect a sudden increase in the revenue for you product after a short period of time. So once you have put your commitment, investment in your plan, kept it consistent and you are confidence with the plan, just be patent until your plan works out.

5. Emperical cases of Guerrilla Marketing application

A Rumanian retail shop doing e-commerce RuComp.ru after 3 months of operation has make a very amazing promotion: 3% discount if raining outside, and with a dull day, they discount 1%. And everybody announce to their friend, their family by email, internet, and the receiver their promotion also spread their promotion to their relationships. By this way, the advertising cost is very low but the consumers like the idea very much. And after this promotion, Rucomp.ru not only sell much the in stock goods, but also, sales increase 15%

Rayban, very famous name in sun-glasses manufactor, operated a guerrilla marketing at Mahattan with a team wear Rayban sun-glasses, stand and keep seeing the sky outside the Rayban building. That is a virus marketing, a type of guerrilla marketing. By this way, not only the people see the activity, but also, they become the reporter, when they post this to YouTube, to social network… and of course, Rayban no need to pay for them but after that, a huge consumers let Rayban go directly into their mind.

Guerrilla Marketing originally was a concept aimed towards small businesses with a small budget, but this did not stop big businesses from adopting the same ideology. Larger companies have been using unconventional marketing to compliment their advertising campaigns. Some marketers argue that when big businesses utilize Guerrilla Marketing tactics, it is not true guerrilla. Bigger companies have much larger budgets and their brands are usually already well established.

One major brand that has been doing a wonderful job is Coca-Cola. In January 2010, The Coca-Cola Company created the "Happiness Machine" video with the help of interactive marketing agency. The video featured a Coca-Cola vending machine that dispensed a lot more than just a cold beverage. The film was shop at St. John's University in Queens, New York, using 5 strategically placed hidden cameras. The reactions from the students were completely unscripted. The video went viral and now has over 4.5 million views on YouTube. In May 2010, it won a prestigious CLIO Gold Interactive Award. The film had the highest penetration in Brazil, Mexico, Japan and Russia. After seeing the amazing ROI on this video, Coca-Cola decided to continue the 'Happiness' theme by releasing several other videos using the same concept.

CHAPTER 2: ABOUT BELCHOLAT

Chocolate story and its demand worldwide and in Vietnam

If you ever questioned what chocolate is made of, the answer is very interesting to know. Chocolate comes from cocoa beans. Chocolate is in actuality a raw or processed food type that is produced from the seed of the tropical cacao tree. Interestingly, history of chocolate dated back years ago.

It is documented that the Mesoamerican people made chocolate beverages which at that time was called "bitter water" around 1100 B.C. It is known that the Aztecs and Mayans of Central and South America began cultivating cocoa trees 2000 years ago. The cocoa tree's scientific name is "Theo Broma cocoa" meaning "fruit of the gods". The cocoa beans were so sacred that they were only used to serve the kings. From the little flowers, the cocoa beans grow to the beans. And when their colors changed to yellow, they are ready to be cultivated. Depend on the geographic conditions, the beans can produce 400 different flavors and will have different colors like green, yellow, orange, purple, etc.…

The Spanish explorer, Cortes, had learned about the existence of this "fruit of the gods" when he came to Mexico and was invited for the drink from the king of Mexico, who was a chocoholic. And soon after that, the cocoa beans had been brought to Europe. The drink with the bitterness taste was soon widely enjoyed among the royal courts and wealthy people but remained expensive for the commoners.

Dorchester, Massachusetts was the location of the first North American chocolate manufacturer in 1765. In 1847 Fry and Sons of England took cocoa butter and mixed it with chocolate liquor and sugar and produced the first eating chocolate. By 1876 a Swiss process added dry milk to the normally dark chocolate to create milk chocolate, a treat that became immensely popular. Continuing manufacturing innovations soon helped the price of chocolate to drop. By the end of the 1800's chocolate was available to everyone, not just the rich.

From then, different variance of chocolate had been invented. And people who love chocolate drinks and original chocolate taste now once again fall in love with chocolate products like chocolate bars, milk chocolate, etc.Gradually, chocolate goes to the whole world and satisfies most demanding customers thanks to its sweet-bitter taste and various chocolate products. Chocolate does not stop its journey but also travels to Vietnam.

Chocolate has become one of the most popular food types and flavors in Vietnam. When asked "What is your favorite food/drink", 90 out of 100 people answered "Chocolate". Another question is "What flavor of ice-cream do you like?" 80% of the answer is "Chocolate" followed with 10% enjoying vanilla flavor or 10% choosing fruit flavor. Children of all ages love chocolate or chocolate-covered products, adults love chocolate because of its taste and because they can offer as gifts to friends, families or colleagues.

It is obvious nowadays people enjoy chocolate products more. As food, chocolate is known as chocolate bars, chocolate balls, chocolate candies or hot chocolate as beverage or by-name chocolate flavor of ice-cream, candy and cake. As gifts, chocolate is molded into various shapes for certain holidays: chocolate eggs on Easter, chocolate coins or trees for Christmas, chocolate hearts for Valentine's Day, or Wedding day, chocolate stars for Lunar year holidays. Amazingly, the high technology development has inspired invention of chocolate bar-shaped USB key which we can seek and purchase on some websites.

Chocolate appears in different colors and different tastes which bring more food choices for consumers. Putting more milk powder into the process, we now have brown or white chocolate adding to the original dark brown color. Taste of chocolate can be sweet, bitter, buttery and fruit flavors.

Chocolate and its benefits to consumers

It is undeniable that the exposure of Western culture in Vietnam through in-country expatriates, overseas students, culture exchange, commercial trading and media channels has brought chocolate to Vietnamese people. Gradually, Vietnamese consumers are more familiar with chocolate and the consumption of chocolate confectionery products. Moreover, people learn about the great benefits of chocolate and the practice of giving chocolate as gifts on special occasions.

Some tend not to purchase chocolate because it is very expensive product or chocolate products taste bitter sometimes. Chocolate should be kept in cool temperature, thus people do not offer chocolate as gifts because it may melt down on the way. People used to think eating chocolate is a bad habit and that it will make them gain more weight the more they eat chocolate. In a small in-house survey about Vietnamese people's consuming habit of chocolate, data graphed below, 100 people were asked, and checked on their choices about bad sides of chocolate, 59% of the answers said "eating chocolate leads to gaining weight", 49% said "chocolate products are expensive" and 39% thought "chocolate causes constipation".

Figure : Consumers think of bad side of chocolate

The truth is chocolate brings more benefits to life than anyone would ever think of. In a recent online article of a trustworthy site, the author Jake Heller has named 11 reasons why chocolate is good for health. In other article, author Stefan Anitei wrote about "13 reasons why chocolate is good for your health and sexuality".

A Swedish study found that eating more than 45 grams of chocolate per week led to a 20 percent decrease in stroke risk among women. Eating chocolate prevents blood clots, in fact in turn reduces the risk of heart attacks. While people think eating chocolate brings weight, the Italians know a thing or two about good eating. A small study from the University of L'Aquila, in Italy, found that eating chocolate reduces the risk of having diabetes.

The flavonoids dilate the blood vessels in the brain, allowing a larger blood flow (implicit of oxygen). This way, the brain fights off exhaustion, insomnia and aging, improving memory and learning. Chocolate contains iron so it is also recommended for pregnant women. Harvard researchers found that eating chocolate actually adds two years to one's life expectancy which can be found in the case of Jeanne Louise Calment who lived to the age of 122 and who ate two and a half pounds of dark chocolate weekly.

Acknowledging the benefits that chocolate brings to life, the author of "11 reasons- Chocolate is good for your health" recommended people eat and enjoy more of chocolate. However, he also cautiously suggested that we should not cling on chocolate just yet! Most of the chocolate we buy in the grocery store is heavily processed, which means that it has lost many of its healthy chemicals. We might not gain benefits from chocolate if the producers prioritize their financial benefits on top of consumers' value. This similarly means people can only have the joy of eating chocolate and its benefits when the chocolate manufacturers are chocolate eaters who understands to what extend and with which ingredients that chocolate is good for health.

3. Chocolate producers and suppliers in Vietnam

Previously, chocolate confectionery products were usually considered a luxury locally. Vietnamese consumers purchased chocolate confectionery as a gift on special occasions such as Valentine's Day or Lunar New Year holidays. Over the review period, chocolate confectionery has become more and more popular among Vietnamese consumers. The increasing average household income, together with the influence of Western culture on consumers' lifestyles, created a good opportunity for the strong growth of chocolate confectionery in Vietnam. Consumers started to buy chocolate confectionery as a daily snack.

As a result, the number of chocolate producers and suppliers is increasing such as Belcholat, Grand Place, D'art chocolate, Chocolate Graphics, Lai Phu, Milka, Snickers. Among these producers, Grand Place, D'art chocolate, Chocolate Graphics and Belcholat are four big names in Vietnam market.

Grand-Place®, or "Gardener of Chocolate", is a unique multicultural company producing a complete range of Couverture Chocolate and Confectioner's Coating in three locations which are Belgium, Japan and Vietnam.

Vertically integrated, Grand-Place® has a full team dedicated to overseeing the drying and fermentation of cocoa beans in Vietnam. They work hand in hand with local farmers, developing new techniques in response to local characteristics. Grand-Place® chocolate products are different in original lines where products are categorized by percentage of chocolate raw ingredients to other ingredients such as sugar, milk solids. Grand-Place® also supplies cocoa powder for bakery lines and other coating and decorations product range.    

Chocolate Graphics is receiving attention for its applying designs and inspiring graphics on their products and packaging. In July 1999 the patents, applications and manufacturing rights were purchased by John Taylor, an experienced international entrepreneur. At that time, the business was ailing and needed experienced expertise to develop the original concepts into a marketable product. Along with a strategic focus and innovative marketing strategies, the process has been significantly upgraded to incorporate state of the art laser and automated technology, raising the production capability of an automated Manufacturing Kitchen to 150,000 pieces per day.

Chocolate Graphics has expanded around the world with licenses already sold within the United Kingdom, Australia, New Zealand, Malaysia, Singapore, China, Denmark, Hong Kong, Taiwan, Middle East, Russia, Romania, Sweden USA and Vietnam

Maple Leaf Trading Co. Ltd has been appointed as Chocolate Graphics' exclusive master license for Vietnam and sells its products under Chocolate Graphics brand name. Chocolate Graphics products are placed in different collections depends on special events or seasons. A wide range of chocolate products are also categorized by specific occasions according to Vietnamese solar and lunar calendar: Father's day, Mother's day, Teacher's day, New Year, etc.

Chocolate continues to grow popular everywhere in the world not only because of their delicious taste but also because of their highly intrinsic value. It helps the loved ones get close through each other. With D'art Chocolate, they wish to bring a unique message together with the sweetness and luxury of chocolate.

The quality of cocoa beans is carefully managed to make sure that D'art Chocolate will use the only best cocoa that comes from Barry Callebaut- the world's biggest supplier of high quality cocoa. From the color to the design, we carefully choose high quality materials that give our packages and products the luxurious and sophisticated looks. D'art Chocolate products is the embodiment of art, creativeness and luxury.

It is the tendency that local manufacturers try to improve their production technology to manufacture chocolate confectionery that has a lower price and good quality in order to satisfy increasing local demand in the market.

4. Belcholat- the biggest chocolate producer in Vietnam

If, rose is as the sight of love, everlasting love songs are as the voices of Eros then Chocolate is well-known as "the flavor of love". The pleasures when enjoying Chocolate is comparable to our delight of a passionate sweetly love with a little bitterness of life. Chocolate is a forever source of human passion and inspiration. Belgian and Swiss Chocolate are the most famous worldwide. Even chocolate is the nation symbol of Belgium which is renowned as a "Chocolate Kingdom".

Mastering the production technology from Belgium and deeply understanding the joy of chocolate in life, Belgian Chocolate JSC started the business in 2000 and determined to bring quality Belgium chocolate to serve Vietnamese people.

Belcholat is an establishment of traditional Belgian Chocolate, who has primarily transmitted "Chocolate tasting art" into Vietnamese's culture.People love Chocolate not only because of its savor but Chocolate is also a magical medicine. The scientist has proven that 75% fat in Chocolate is active fat which contribute to human health and help to reduce Low-density lipoprotein (or LDL) cholesterol, a bad type of cholesterol that is most likely to block blood vessels and increasing your risk for heart disease. Therefore, Chocolate production and process require a higher quality standard than other foodstuffs in the sector.

However, modern and specialized machineries, finest selected pure cocoa butter ingredients are not sufficient to create unique taste of Belcholat Chocolate without the traditional know-how from the well-known Chocolate experts, coming from Belgium and the Netherlands, who have handed on their experience and continuously work side by side with the skilled, enthusiastic Belcholat team. All together with our strictly controlled production process and storage condition has made up Belcholat Brand. Belcholat selections are finest, fragrant, full of flavor and deliciously distinctive with other Chocolates.

Belcholat is the only chocolate brand in Vietnam, certified by Barry Callebaut group - The world's leading manufacturer of high quality cocoa and chocolate products - to carry its reputable logo, a guarantee of specially selected quality, on Belcholat's packaging. People talk about Belcholate, they talk about chocolate that is produced with 100% pure cocoa butter.

Belcholat is not just making chocolate but a work of art from chocolate with romantic and elegant style, special made for great occasions such as Christmas, Saint Valentine, etc with the under message"Bring in premium Belgian Chocolate to Vietnamese consumers right in Vietnam". Belcholat chocolate has been the first favorite choice of young Vietnamese in those meaningful events.

4.1. Belcholat foundation and general business review

Belgium Chocolate JSC or Belcholat JSC. is a well-known chocolate manufacturer which is located in Hanoi, Vietnam. Having 12 year experience manufacturing and supplying quality chocolate in Vietnam, Belcholat is known and remembered for its unique chocolate products, excellent quality, beautiful packaging… Famous names of hotels, restaurants and resorts such as Sofitel Metropole, Intercontinental, Hanoi Daewoo Hotel, Sofitel Plaza, Melia Hanoi Hotel, Sheraton Hanoi, Hilton Hanoi Opera Hotel, VinPearl Resort & Spa, etc have been fidelities of Belcholat JSC.  

With the production technology transferred from Belgium, under the careful supervision of the production process, storage conditions of the leading chocolate experts from Belgium and The Netherlands, Belcholat satisfies even the most demanding customers. Belcholat assorted chocolate box, bar, chocolate gifts for special occasions like Christmas, Valentines, Easter, birthday ... have been trusted and loved by the youth of Vietnam. Couverture chocolate of all kinds: Dark, Milk, white, stick ... with different levels of cocoa is always the first choice of 5 star hotel chefs and European bakeries. Chocolate Products such as Goodnight, Turndown, truffle, Praline, gift ... of Belcholat are also available in most hotels, resorts, restaurants and high standard cafés in Vietnam.

Belcholat is also recognized by Vietnamese Consumer as one of 500 most well-known brands in Vietnam in 2006 (the survey as a part of the well-known 2006 trademark program by VCCI and AC Niesel),  500 leading brands in Vietnam in 2008 and 2009; Gold Cup Top ten industries Vietnamese brand reputation - Agent volume in 2006 and 2007.

4.2. Belcholat market share and its competitors

In 2010, Belcholat JSC held the leading position accounting for a 13% value share thanks to its diversified product range. The company mainly focused on tablets and standard boxed assortments. Its products had superior quality and appealing packaging considered to be an ideal gift for business partners, friends and family members on special occasions. Some of its popular brands were Belcholat and Wonderland. Belcholat appeared to have a stronger performance in northern parts of Vietnam. For example, its products were present in popular supermarkets in Hanoi. Furthermore, the company also had showrooms in the most northern cities and provinces such as Hai Phong, Vinh, Hai Duong, Thanh Hoa, Nam Dinh, Son La, Quang Tri, among others.

Belcholat is proud to bring culinary essence of Belgium to Vietnam. Having the heartfelt inner wishes to the Vietnamese people, "Sharing savory things" was completed quietly with so much sweat and effort of the board of management and staff. With the title, the Gold Cup on merit and quality, Belcholat deserve a golden brand in Vietnam, but perhaps the noblest titles for the company is the friendly name that customers have placed in favor for.

Belcholat has been proving a successful business in Vietnam through time thanks to its excellent products and services. However, increasing demand of locals has driven the increasing supply of a number of chocolate producers and suppliers worldwide. Along with Belcholat, Grand Place, Chocolate Graphics and D'art Chocolate are among the biggest producers and suppliers in Vietnam.

While many local chocolate manufacturers and suppliers release collections of chocolate products, creative designs and arts, and luxurious packaging, Belcholat holds its competitiveness in Vietnam's chocolate market because its chocolate and products are produced with 100% cocoa butter. Not every chocolate consumer knows about the fact that Belcholat produces chocolate with 100% cocoa butter. In another in-house survey which was carried out 2010 about whether chocolate consumers know about this uniqueness of Belcholat, consumers were asked "Do you understand the message 100% cocoa butter in Belcholat products?" These questioned people were able to choose different choices at the same time. There was a relatively high percentage of people who had no idea about the message, who never saw the message or thought otherwise. The bar chart below will present the case of Belcholat's 100% cocoa butter message in 2010

Figure : Consumers know about the message "100% cocoa butter"

It is a different story now when Belcholat is becoming more well-known in Vietnam's chocolate market. The years 2011 and 2012 has seen a popular Belcholat in its product range, production message and sales and marketing strategies.

Like all other businesses, Belcholat trusts in its uniqueness in chocolate production and Belcholat enthusiastic team. Simultaneously, the development of sales and marketing tools has played a vital part. Belcholate has been utilizing plenty of sales and marketing strategies to help the business grow and stand competitive in the market. Acknowledging increasing demand of chocolate in domestic market and rising numbers of big competitors, Belcholat has chosen its own marketing plan, succeeded with it and stayed unique. Guerrilla marketing theory is the answer to the success of Belcholat in Vietnam's competitive market of high quality chocolate.

CHAPTER 3: EVALUATING THE MARKETING STRATEGY CURRENTLY APPLIED IN BELCHOLAT

Marketing strategy recently applied in Belcholat

Since the company was established in 2000, Belcholat has directed its marketing plan towards wholesale activities. The main business activities are raw ingredients merchant, partnership building with luxurious hotels, or well-known bakeries in Vietnam. Sofitel Metropole, Intercontinental, Hanoi Daewoo Hotel, Sofitel Plaza, Melia Hanoi Hotel, Sheraton Hanoi, Hilton Hanoi Opera Hotel, VinPearl Resort & Spa or Thu Huong bakery, Anh Hoa bakery have been target customers of Belcholat since the start. Retails channels are designed introductive so as to get customers know about the brand-name and products. And for that, retails only bring benefits on some special occasions such as Lunar's holidays or Valentine's day.

Belcholat revenue has drastically increased during the first years after the establishment. However, since 2009, the revenue has only increased 20% per year. This increase does not show the revenue as it has been analyzed brought about by inflation or increase of market price. It has not been for the productivity or sales.

In a recent and direct interview with Ms. Nguyen Thi Du- Director of Belcholat JSC, she admitted before 2009 Belcholat has seen a continuous growth thanks to its big part of market share in chocolate market. There had been so competitors. Belcholat partnered with a number of premium hotels and spas and bakeries. Belcholat was known for its expertise in chocolate products and ingredients. Belcholat, therefore, grew dramatically, quickly and sufficiently. Yet, since 2009, when chocolate market is becoming more attractive, it is then becoming more competitive. The whole market undergoes vigorous change, as a consequence, growth rate of 9-10% does not indicate benefits; it is a step backward in actuality. It is time to review the present marketing strategy since it becomes ineffective and unsuitable. What is needed for the moment is a new strategic marketing tool and an approach to retails market.

Chocolate ingredients have been distributed to a number of 5* hotels in the country. Even though marketing expense is relatively low, this product type is still receiving high demand. This product type continues to stay competitive in domestic chocolate market for its excellent quality, small production cost, and great raw cocoa butter. More especially, Belcholat's co-founder, Mr. Dirk Nollet has very intimate relationships with 5* hotels in Vietnam with which it helps promote Belcholat barnd-name and products. Belcholat, starting from that successful ground, continues expanding sales and production and growing business at the time when marketing tool is fairly inexpensive to afford.

In retails market, Belcholat has not seen such impressive development and growth, which in fact a not-yet-solved question to Belcholat and the board. Belcholat itself has not developed much in retail market. Marketing tools are poor. Sales kit is poor. Budget is low. Attention is low. The biggest success that Belcholat has made in retails market is to create a popular practice of offering chocolate products on Valentine's Day in Vietnam. We have seen a trend that the young love chocolate products, heart-shaped chocolate or rose-shaped chocolate on Valentine's Day- a special day for lovers. The young people tend to prepare very carefully these beautiful little gifts to their beloved and send to the recipients beautiful message of love, sweetness and care.

Talking about marketing approach, besides minimizing retail market, Belcholat has also met with difficulty in directing to other potential marketing channels. Belcholat has not offered chocolate products and gifts on weddings, or for coffee shops or on birthday occasions or special events of individuals or organizations. While in fact, there are uncountable events and holidays and special days within a year.

Belcholat always commit to produce high quality chocolate products at fair prices to satisfy consumers. Both people with average monthly income and high monthly income and enjoy the products similarly. However, the actual state of Belcholat's marketing strategy has some big issues that need solving. In recent years, budget spared for marketing only accounts for 1.2% of the revenue. There has not a separate sales and marketing department in its administrative structure. Business plan is ready but marketing plan is never ready. Marketing always stays inactive since there is no plan for months and for the entire year and they take up marketing plan that is offered by other partner.

Survey background

Aim of the survey is to assess how Belcholat brand name is recognized in domestic chocolate market and Vietnamese consumers' habit of enjoying chocolate products in general.

Questionnaire: Most of the questions are multiple choice questions. Some are open questions for interviewees to express their own ideas and feeling about Belcholat.

The survey is one of the developments of Guerrilla marketing. In one hand, the survey contributes to the dissertation. On the other hand, it introduces to consumers about Belcholat, its brand, its unique feature and its products. Sometimes, the decision of purchasing one item or one product depends on emotion and the like or dislike, therefore, some questions tend to identify this behavior. Along with the questions and interviews, I have been "taking the advantage of the chance" and providing interviewees with valuable information about Belcholat and observing their responses. For instance, I phrased that "Belcholat is the biggest chocolate supplier to 4* and 5* hotels in Vietnam".

Preparing a questionnaire follows these steps:

Build up the questionnaire

Determine the information requirements and especially factor maybe affect the use of chocolate from consumers.

Choose the type of questions

Wording

Numbers and sequence

Test before administering on a large scale and revising (if any)

Sample: the survey sample size is of 100 respondents in Hanoi. The data is limited; still it is quality for analyzed.

Contact method: direct personal interviewing is applied for this survey.

Method of analyzing the information:

Analyzing collected information

With Guerrilla marketing, market database play a very important role in evaluating the success and hereby bringing about possible solutions in which emotion factor is fairly vital.

Chocolate is an imported product from foreign countries. I choose an open research methodology and use surveys to assess Vietnamese consumers' habit of chocolate products and then a market research about Belcholat brand name.

3.1. The Vietnamese consumers' habit of eating chocolate confectionery

The first factor that attracts my attention is how often a person consumes chocolate. As a result, only 59% of 100 questioned people said "Yes, they buy chocolate home for eating". Only 6% out of this figure purchases chocolate monthly.

From this figure, if we wish to improve sales in chocolate retails market, we need to encourage the remaining 31% of consumers eat more chocolate. In fact, this number is still low because sample group mostly have fairly high monthly income. To every consumer, price is one of the decisive factors that gets them buy chocolate. Besides, we also need to get frequent chocolate buyers become more often chocolate buyers. The same denominator for these two possible solutions is to train consumers about benefits of chocolate to life.

The next part of the survey is about what consumers think of benefits of chocolate. It will also show which good side of chocolate that people are about. The outcome turns out interesting. 87% of the answers think chocolate tastes delicious and 40% say chocolate helps them stay young since chocolate contains anti-oxidization substance. Provided the benefits of chocolate, consumers were asked to rate how much these benefits affect their purchase behavior, the answers are 69% and 50% successively.

On contrary with benefits of chocolate, I would like to understand what people think of bad side of chocolate or in the other hand what stops people from consuming chocolate. And if people's awareness about bad effect of chocolate is not accurate, we should communicate and utilize media channels to educate and prove the opposite. From the result summary, we can see 59% of consumers are afraid of gaining more weight if they eat chocolate. 41% think chocolate products are luxuries and that they cost money. 39% does not eat chocolate because they think it causes constipation.

It is obvious to see the importance of having media communication involved and educating people about eating chocolate scientifically which will neither lead to gaining weight nor suffering from constipation. In fact, eating chocolate in a good way will help people stay fit and healthy. At a marketing point, there should be images of well-built body and highlight of "no fat" factor. If the consumers realize how many benefits chocolate bring to them, they will consider how much it should be paid for such great value.

In my survey, interviewees are asked whether they behave differently toward domestic chocolate and imported chocolate. 44% of the consumers agree that domestic chocolate is fairly cheap and quality is low. The fact is they should know local manufacturers also seek for advanced production technology so as to reduce cost and prices of final products. It is vital to inform and educate people about the production process and every step that Belcholat take to form a beautiful and tasty chocolate bar.

3.2. Consumers' opinion about Belcholat brand

I divided my survey into two different pages, one of which directs the chocolate consumers who have not heard of Belcholat. For the other subject, I tend to ask more detailed questions. I wish to see their personal opinion about each element, for example, about Belcholat position in customers' heart, about Belcholat website, packaging or its showroom decoration and product representation.

According to Guerrilla marketing theory, the most vital element in a marketing plan is brand-name and how it places in customer's mind and heart. The next page of survey question starts with a question about Belcholat brand and how much people know about it. The answer should be obtained in first place in order not to create conflict with their opinion about the next questions. 25% of the answers think Belcholat is an average quality chocolate and 16% say Belcholat chocolate is delicious and fairly inexpensive. While 37% guess Belcholat is a kind of Belgium chocolate.

To compare this figure with the percentage of 43% customers subjectively think only imported chocolate is good quality. Answers of this question has shown clearly an opportunity as well as a challenge in training and drawing consumers' awareness towards what really makes a good quality product. People should acknowledge that local producers are capable of producing good quality chocolate as much as foreign manufacturers

The following part of the survey is to get consumers' opinion about Belcholat website, packaging and showroom presentation. The majority of the answers evaluate Belcholate website, packaging and showrooms at average rate. The highest point is 3/5; there is even not a single highest point of 5 for those questions. Applying Guerrilla marketing concept into this case, the taste factor is the very final factor to affirm consumers' loyalty to a brand. In actuality, the factor of "emotional feeling" or "experience" plays a tens fold more important, thus, direct contact with customers is marketing and to certain extend it should be taken into account

In my survey, I similarly pay attention to Belcholat message of "chocolate produced 100% cocoa butter". Therefore, I have put the question in the survey. However, the outcome is not very promising. Only 50% of the consumers understand the message correctly.

Five forces analysis

4.1. Industry competitors

Established in 2010, its products are art chocolates that emphasize its brand and lofo of the company.

In the future, D'art chocolate will invest into coffee/chocolate shops, which is a very potential approach. Belcholat also wishes to invest in this model.

Grand Place is a Belgium chocolate corporation that was established in 1985. Chocolate factory was built in Vietnam in 2001. Grand-Place is ambitious to produce chocolate locally in a closed production process where cocoa trees are planted locally.

July 2009, Maple Leaf Co. Ltd., bought franchise patent of Chocolat Graphics for producing and trading chocolate. Chocolate Graphics have a wide range of products whose decorations and designs are done with laser technology. Chocolate Graphics is a multi-national company that is present in many countries worldwide.

The competitors headquarter are situated in Ho Chi Minh city, therefore, the expansion to Northern market is certainly not at ease. It is especially the case of new businesses that do not have frequent customers. Chocolate products are special confectionery that requires strict storage condition, which is a weakness point that the competitors face with in the Northern market.

4.2. Substitutes

Substitutes for chocolate products are bakery products such as cookies, candies that contain chocolate ingredient. Until now, chocolate production is relative small therefore it is listed as confectionary industry. In the chocolate market, there are as a consequence several candy factory that produce chocolate products.

4.3. Suppliers

Suppliers in chocolate production are known as suppliers of ingredients and suppliers of packaging, transportation service or design, etc.

About ingredient, the major supplier of Belcholat ingredient is Barry Callebaut- the world's leading supplier of chocolate ingredient for many chocolate producers in the world. That