Vietnam Beer Essay

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PRODUCT EXTENSION: THE CASE OF BIVINA BEER IN VIETNAM ABSTRACT There is a strong link between the growth of market share and the profitability of a company with the power of its brand. Like other emerging economies, in Vietnam, the domestic companies have been facing tough competition brought about by multinational corporations (MNCs) with their well-established brands from all over the world. More often than not, the Vietnamese companies seem to neglect the issues of branding in positioning their products. This study analyzes the importance of brands and the process of branding management in a newly opened-up market like Vietnam. To illustrate the issue, we will examine the case of BIVINA –a newly introduced beer brand—of Vietnam Brewery Limited (VBL). Interviews with managers and a consumer survey are carried out to investigate the competitor’s reaction and consumers’ perception toward this new brand. At the end, some recommendations are proposed for the domestic companies to manage their brands successfully. INTRODUCTION Investors should consider Vietnam a potential marketplace for beer consumption. With a population of 78 million people in 1997, Vietnam is one of the most populated countries in the world. The increase in income and improvement in the people’s living standard, brought about by a more liberalized economic policy since 1987, have triggered increased beer demand and consumption. Currently, Vietnamese consumes eight liters of beer on the average per year. While this is still low in comparison with Asian consumption level of 17 liters per head per year, brewers and distillers consider Vietnam a growing market for beer industry (VIR, June 1997). According to an estimate, Vietnam’s beer consumption has grown from 12 to 20 % a year (Chinh, 1997). The main 3 drinkers are in the age group between 25 and 45 years old, which are

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