Our group decided to export the American Mountain Dew to Vietnam. Vietnam has a tropical climate with high rainings seasons from may to september. The country also have dry season from october until march. Because of the weather there is a need for refrechments in Vietnam. The Mountain Dew which is owned and produced by PepsiCo is a corbonated soft drink with a fresch citrusflavour. The Moutain Dew has a green color that is characteristic for the product. We found out from vietnamese friends that lotus green tea and lotus is a appreciated flavour in Vietnam so we want to satisfy this demand with and adapt mountain Dew to the markets needs and wants.
The mountain dew and vietnam
The 2011 GDP of Vietnam is $299.2 billion, which ranked 43 in the world. (CIA) The food and beverage retail sector is estimated to be worth US$33.7 billion for 2011.(Enterprise)
There is still big market potential of Vietnam soft drinks market. In the next few years, carbonates are expected to see a moderate growth rate with a total volume compound annual growth rate CAGR of 2%. (Euromonitor) In Vietnam, carbonates continued to enjoy stable growth rates in term of total volume sales. Although consumers may felt that it’s not so healthy to have carbonates but they still liked to consume these drinks when they had the chance. (Euromonitor) Also Vietnam has a young population that is growing rapidly; according to the CIA world factbook, in 2012, the age structure of Vietnam is as following: 0-14 years:25.2%, 15-64years:69.3% ,65 years and over: 5.5%. The generation aged between 15 and 64 is more likely to buy soft drinks like Mountain Dew, which means there is a big market and will be an increasing demand of the product.
- the potential competitors
Mountain Dew is produced and owned by PepsiCo. In Vietnam, international companies that had long dominated sales, the leading players in the Vietnamese soft drinks market include PepsiCo, Inc., Coca-Cola Company and Nestle S.A. (Datamonitor) The main competitor of Mountain Dew will be Sprite from Coca-Cola.
- type of Market (monopoly, oligopoly, monopolistic competition, or perfect competition) The market type of Vietnam soft drink market is oligopoly competition market. The competition of soft drinks in Vietnam is very intense. As was mentioned above, international companies such as PepsiCo, Coca-Cola, and Nestle had long dominated sales. In 2011, PepsiCo Vietnam continued to lead carbonates with 41% share of off-trade value sales, following by Coca-Cola Beverages Vietnam with 33% off-trade value share. (Euromonitor) In addition to these big international companies, there are numerous domestic and local manufacturers. Among them, Tan Hiep Phat Group is in the leading position in retail volume and value sales terms in 2011, followed by tribecco and vinamilk.
There are a great number of carbonate soft drinks suppliers in Vietnam, which means PepsiCo has a lot of choices and can lower the cost.
Vietnamese consumers are price sensitive and have little brand loyalty. However, with rising incomes and westernization, this is starting to change. Vietnam is split into three distinct regions, North, Central, and South. Each of these regions has a central urban hub. Consumers in each region have different purchasing habits and considerations, so PepsiCo should be aware of the differences when entering the market. (Enterprise)
1 Political information about Vietnam
According to Constitution1 of the year 1992 The Socialist Republic of Vietnam is an independent and sovereign country. The President of the country is the Head of the State. President is elected by the National Assembly for 5 year term. By the way the National Assembly consist of 500 members, each of them are elected by population vote (popular vote) for four year term. The Supreme Court is the highest juridical power in Vietnam. There are other specialized courts in...
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