L2Case study kido icecream marketing strategy final to student

1

MARKETING STRATEGY FOR

KIDO’S ICE CREAM

Writen by Asso.Prof. Dr. Le Thi My Linh

1 Introduction

KIDO foods (KIDO foods) has marked an important milestone in the history of

Vietnam's ice cream industry with the fact that a domestic company bought the manufacturing

and production line of a multinational company Wall's from Unilever in 2003. KIDO was

established and quickly developed to become one of the leading companies in the ice cream

market in Vietnam with two famous ice cream brands including Merino and Celano. In 2019 it

accounts for 41.4% market share (Euromonitor, 2019). KDF(Kido Frozen Food, one company of

KIDO group) has chain factories system located from the North to the South being considered

the most modern in Asia. With its products and distribution systems, KDF is deemed the “King

of the frozon food industry” in Vietnam (kidofoods.vn).

According to KDF's 2019 financial statements, KDF's revenue from sales and service

provision and profit in 2019 reached VND 1,432 billion and VND 143 billion, respectively.

KDF's revenue accounted for 19.5% of total revenue, but profit after tax accounts for 71.5% of

total interest of Kido. In other words, the gross profit margin that ice cream, yogurt, and frozen

products dominated in comparison to other segments of Kido. KDF's gross profit margin is 60%,

while that of Kido is only 23.9% in 2019 (Ngoc Lam, 2020).

Recently, KIDO has informed a new development strategy in June 2020. KIDO Group

(KDC) and Vietnam Dairy Products Joint Stock Company (VNM) signed a memorandum of

understanding regarding the establishment of a joint venture in the beverage and ice cream

sector, in which VNM's capital contribution is 51%, while KDC is 49%. VNM is the leading

brand in the dairy industry, while KDC is currently the leading ice cream brand in Vietnam. This

combination of two domestic companies is aiming to build the brand of Vietnamese drinking

water - Vibev. The joint venture of the two sides is the production and trading of beverages,

(including healthy drinks, tea, milk tea ... excluding carbonated drinks), production and trading

of all kinds ice cream and frozen foods (Tri Tuc, 2020).

Nguyen Van Phong*- probationary staff of Marketing department of KDF will finish his

probation (trial job) in two weeks. By that time, he has to submit a marketing strategy for KDF’s

ice cream to be selected as a full-time staff. His outline report includes: Marketing environment

analysis (external environment, internal environment- included current marketing mix strategy,

target market, marketing mix strategy). He wonders if this structure is fine and reads again some

parts that he has written as below.

2. Ice cream Market share in Vietnam

The competition in ice cream and frozen dessert market in Vietnam become more intense

because of high growth rate and big potential market of young population. Over the past time,

the ice cream market has received more and more foreign brands investing in Vietnam. Big

international brands have entered the market and increased brand awareness through the