The Lao American College

Strategic Marketing

Final Report

Instructor : Vannaseng Ounalom

Prepared by : Ms. King Sivongsay ID: 090328

Ms. ID:Ms. ID:Ms. ID:Mr. ID:

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Executive Summary

Lao Tobacco Limited (LTL) is the joint venture of State Lao Tobacco and Imperial Tobacco Group, the 4th largest international tobacco company, after the State Lao Tobacco had operated under no profit for long period. Imperial Tobacco Group hold 57% share equaled to the amount of investment of $12 million and State Lao Tobacco holds 43% (seatca.org website). Since new reform of Lao Tobacco Limited (LTL), number of the company’s products has introduced to the markets such as A1, A2, A3, A Menthol, A Premium, A Spearmint, A1 Menthol, Yasoub Lao Red, Yasoub Lao Menthol, and another 2 foreign licensing brands, Bastos and West (Lao Tobacco Limited).

According the National Institute of Statistics report on National Adult Tobacco survey of Cambodia on 2011, the adult smokers are increasing every year (who.int website). Phnom Penh is a highest population density province with population of more than 2,000,000 people. On the next few years the number of smokers in Cambodia is expected to increase as the current biggest group of age is between 15 to 19 years old (tourismcambodia.com website). People are having more money as they are starting to have fewer babies. The market shares of high price cigarettes are growing which show a high capacity of people using more luxury products (HIL).

Cigarette market in Cambodia is currently not having any good mid-price brand to fulfill the need of the mid-price segment (HIL). When the consumers have more money and want to swap to a better quality brand, they go directly to the high price brand because there are no other options for them. Therefore, bringing A3 to Cambodia market during this period will have a high chance to be successful.

Currently there are 3 major competitors that are providing cigarette in Cambodia such as: British American Tobacco (BAT), Japan Tobacco International, Viniton Group Co., Ltd. with other import cigarettes. Some of their brands are very famous and well known such as: Lucky Strike, 555, Winston, Mild Seven, Camel, and etc. Although, they are very successful in delivering high quality product to consumers but they don’t have any good product at the mid-price.

Cambodia is focusing on encouraging foreign investor to invest in their county as the main engine for economic growth. This policy had allowed us to have a great opportunity to generate the production of A3 in Cambodia in the future. The free trade agreement will allow the price of cigarette to be lower. There will be more tobacco consumption leads to an increase in cigarette demand. The tobacco tax in Cambodia is lower if compare to the other Southeast Asia countries. The tobacco tax of retail price in Cambodia is only 20% while Vietnam is 36%, and Thailand is 62% (tobaccoevidence.net website).

Exporting A3 to Cambodia will have a high chance to extent the volume of A-brand and gain market share of the mid-price brand from ITG competitors. Adult population whose are in the working age and university student and having a middle income from 200 USD to 1,000 USD per month is the main target consumer for our product. We are expected to be a brand leadership on the mid-price segmentation within two years. To achieve this objective, we will focus on two main groups of people in Phnom Penh, college students and office workers with the age of 20 to 50 years old, who have a middle income. These groups of people are more sociable, having more responsibility and more purchasing power on luxury product. We plan to enter our product in Cambodia market on October, 2014 since it is the starting of the high season and it is the first quarter of the year.

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The marketing target for the first year is to get 100% of product availability in 15 wholesalers, 80% of 1,000 semi wholesalers, and 70% of 26,000 retailers, and 5% of market share. The sales volume of A3 for the first year is targeted at 5,040 master cases, with the revenue of 1,612,800 USD; the net profit will be 60% of the total revenue. To achieve this objective we will provide approximately 363,530 USD for the first year marketing plan.

On the production the new packaging design will be developed to make it more unique and for value adding to consumer and enhancing the brand perceptions. The test of A3 is already unique as we are using a high technology machine into our production process and produce from a high quality Virginia tobacco.

For measuring and monitoring the Marketing planning process, the marketing control will be a process of monitoring the proposed plans and adjusting the necessary things. We will have our own objective in controlling target.

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Contents

1. Introduction..................................................................................................................................4

2. Current Market Assessment.......................................................................................................4

2.1. Market Definition................................................................................................................4

2.2. Market Forecast...................................................................................................................4

2.3. Consumer Analysis..............................................................................................................5

2.4. Competitor Analysis............................................................................................................6

2.5. Macro Environment Scanning (PESTLE).........................................................................7

2.6. Micro Environment Scanning (SWOT).............................................................................9

3. The Future Marketing Vision and Mission..............................................................................11

3.1. Market Vision....................................................................................................................11

3.2. Market Mission..................................................................................................................12

3.3. Financial Objective............................................................................................................12

4. Marketing Strategy (STP).........................................................................................................12

4.1. Market Segment.................................................................................................................12

4.2. Target Market....................................................................................................................13

4.3. Market Positioning............................................................................................................14

4.4. Product Strategy................................................................................................................15

4.5. Pricing Strategy.................................................................................................................15

4.6. Distribution Strategy.........................................................................................................16

4.7. Distribution Target and Revenue.....................................................................................16

4.8. Promotional and Marketing Communication Activities.....................................................17

5. Budget Requirement..................................................................................................................19

6. Key Success and Factor of Business.........................................................................................20

6.1. Key Success........................................................................................................................20

6.2. Factor of Business...............................................................................................................21

7. Control........................................................................................................................................21

References..........................................................................................................................................23

Appendix.............................................................................................................................................25

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1. Introduction

Lao Tobacco Limited (LTL) is the joint venture of State Lao Tobacco and Imperial

Tobacco Group (ITG), the 4th largest international tobacco company, after the State Lao

Tobacco had operated under no profit for long period. Imperial Tobacco Group hold 57%

share and State Lao Tobacco holds 43%. Since new reform of Lao Tobacco Limited, number

of the company’s products has introduced to the markets such as A1, A2, A3, A Menthol, A

Premium, A Spearmint, A1 Menthol, Yasoub Lao, and another one foreign licensing brand,

Bastos. “A-brands” are the mid-price and the value brands of the Lao Tobacco Limited; after

the joint venture of the Lao Tobacco Company and the Imperial Tobacco on December 2001,

the sales volume of A-brands are constantly grow and become the value brand for LTL. A-

brands are best-selling in the Laos market in nationwide. The main consumers of A-brands

are the middle income people who earn between 1,500,000 to 5,000,000 kip per month with

the age of 18 to 50 years old (LTL).

2. Current Market Assessment

2.1. Market Definition

There is a high possibility in export our product in South East Asia where there are

more people with the middle income and prefer a full flavor and mid-price brand. According

the National Institute of Statistics report on National Adult Tobacco survey of Cambodia on

2011, the adult smokers are increasing every year. The number of smokers is approximately

2,000,000 people between adolescence and middle age and 70% of them smoke cigarettes

while other 30% smoke hand-role and pipe (who.int website).

2.2. Market Forecast

Phnom Penh, a highest population density province in Cambodia with the population

of more than 2,000,000 people (tourismcambodia.com website). When we look at the age

pyramid of Cambodia in 2010, the highest group is between 15 to 19 years old, this group of

people will start smoking in next few years (populationpyramid.net). Which mean on the next

3 to 5 years the number of smoker will be increased. In addition, people start having fewer

babies which means people will have more money to spend on the luxury product like

cigarette. Therefore, if we introduce our brand during this period to people who will start

smoking soon, it is the good opportunity for us to create brand awareness and brand image to

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this group of people because they will become our main customers in the next few years. If

we are success it will lead to the great sales volume and market share future.

When we compare to China, Vietnam, and Thailand, the inflation rate of Cambodia is

lower and the tobacco tax also lower. Also the trend of cigarette market in Cambodia is

projected to keep growing, people started to smoke a high price brand which means people

have more money to spend on luxury items. Therefore, Cambodia is the best place for us to

bring our product in (HIL).

If we decide to launch A3 in this city there will be a high change to increase the sales

volume. In addition, Huotraco International Limited is also a subsidiary company of Imperial

Tobacco Group (ITG). They are operating business by producing and selling cigarette in

nationwide in Cambodia. They are currently had only high price and low price brands and

doesn’t have any mid-price brand available in the market to fulfill the need of this market

segment (HIL). As we have a business partner in the area, we might design to produce A3 in

local and not need to pay for any import fee.

2.3. Consumer Analysis

The cigarette consumers are always looking for a high quality product that produce

from a high quality tobacco leaf with a reasonable price, they want a product that make them

feel relax, look smart, can smoke longer, and make them feel full after smoking. The smokers

are always looking for is a high quality cigarette which will create their high image in the

society. The price is not a factor for their chosen brand. They just need a brand that makes

them feel smart and relax when smoking.

Profile of smokers in Cambodia: people start to have more money to spend on the

luxury product because the inflation rate is low (bles.dole.gov.ph website). Since 2005 the

high price brads are significantly growth while low and mid-price brand are constantly

decreasing (HIL). One reason that makes the volume of mid-price cigarette reduces because

there are no good mid-price brands in the market. Therefore, when the consumers have more

money and want to swap to a better quality brand, they go directly to the high price brand

because there are no other options for them. At the mean time if the country faces a financial

crisis A3 will be the first choice for the high price brand to trade down. The highest number

of smoking group in Cambodia is between adolescence and middle age from15 to 64 years

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old. And the average cigarette smoking per day is 20 sticks and usually by the daily purchase

(Who.int website)

In addition to the above analysis, a brand research and the consumer research are highly

required in order to have more understanding about the consumers’ behavior and have ideas

for the brand innovation in the future. Dealing with the marketing team of Huotraco

International Limited is another choice for gathering information about the distribution

channel in Cambodia market and to export the product to their countries. Also we have to

deal with the logistic company and the taxation department in Cambodia to gain information

about their import tax and other necessary information.

2.4. Competitor Analysis

The Huotraco International Limited is currently having 3 major competitors that are

providing cigarette throughout the country such as British American Tobacco (BAT), Japan

Tobacco International, Viniton Group Co., Ltd. and other import cigarettes. Each company

has different strength and weakness. The British American Tobacco is a leading company

that successful in the worldwide. Their brands are very famous and being used by millions of

consumers such as Lucky Strike and 555, National, and etc. (Bat.com website). The Japan

Tobacco International is the international tobacco division of Japan tobacco a leading

international tobacco product manufacturer. The company is headquartered in Geneva and

sells its brands in 120 countries. They employ about 25,000 people with 90 offices around the

world. Their brands are Winston, Mild Seven, Camel, Liberation, and etc. that been selling in

the worldwide (jti.com website). The Viniton Group Co., Ltd. is the Cambodia’s largest

tobacco company, it is an international standard investment company established between

China and Cambodian. The company has been in Cambodia since 1993.Their products are

Angkor special, Luxury, and Cambo that are mostly provided for premium, high price, and

low price customers (Viniton.com website). Although, they are very successful in delivering

high quality product to consumers but they don’t have any good product at the mid-price.A3

will be one of the high quality products to fulfill the need of smokers who prefer to enjoy a

mid-price product.

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2.5. Macro Environment Scanning (PESTLE)

PESTLE Description

Political Investment policy: Foreign investment or private sector

investment is becoming increasingly important for

Cambodia as the private sector assumes its position as the

main engine for economic growth. This policy had allowed

us to have a great opportunity to generate the production of

A3 in Cambodia in the future.

Unstable political: this issue is becoming a serious cause to

the investor; whenever the political system is changed the

policy might also be changed.

Political conflict: if there is a conflict among a country, this

factor will cause low income of people in that country and

the purchasing power of people will low because they have

to save money for the unstable political situation.

Economical An international trade agreement also has an important role

to Lao Tobacco Limited. The free trade will allow the price

of cigarette to be lower. There will be more tobacco

consumption leads to an increase in cigarette demand. In

general favor imported cigarettes and this will eventually

results in greater market share for imported cigarettes in the

domestic markets.

Low inflation rate: having a low inflation rate means

people having more money and more purchasing power on

luxury products.

Constantly growth of GDP: GDP amount has been steadily

grown and per capita GDP has also steadily increased means

people have more income.

Legal Tobacco tax and policy: tobacco tax in Cambodia is lower

if compare to the other Southeast Asia countries. The

tobacco tax of retail price in Cambodia is only 20% while

Vietnam is 36%, and Thailand is 62%. This means we will

pay less tax, so that it is a good opportunity for making a

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high profit on selling A3 in Cambodia (tobaccoevidence.net

website)

Income tax: if the government increases the income tax, it

will be lessening consumer’s income; people will spend less

money on luxury product or cigarette. On the other hand, if

income tax is decreasing, consumers will have more money

to purchase our product and will be lead to our high revenue

and more profit.

Raising tax on tobacco: WHO has called on countries to

raise taxes on tobacco. If Cambodia implements the tax

policy as the WHO advising the number of tobacco

consumption will reduce as an increasing of the tax will

directly force the tobacco company to raise the price of

cigarette.

Technological High technology: is allowing us for using a high technology

into our manufacturing process and the product innovation

in order of having a great output and high quality cigarette

such as: automated machine (from processing of tobacco to

cutting cigarette and packaging.

Social network: technology is enabling people to have new

ways of learning, gathering information, and business

communication through mobile applications, social media,

and online collaboration. This allows us for having a new

ways of communication with our partner in Cambodia for

importing and transporting our product to their office.

Laser technology in advertising: implications for inserting

or deleting tobacco advertising in television broadcasts of

tobacco-sponsored events, as it is a harmful product for

people health. This cause is a big trouble for Tobacco

Company for communicating information on brand

knowledge and brand awareness to consumers.

Sociological Family member is one factor that causes effect to the

cigarette smoker to quit smoking: as many people are

aware of the danger of using cigarette. Tobacco use leads

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most commonly to diseases affecting the heart, liver and

lungs, with smoking being a major risk factor for heart

attacks, strokes, chronic obstructive pulmonary disease

(COPD) (including emphysema and chronic bronchitis), and

cancer (particularly lung cancer, cancers of the larynx and

mouth, and pancreatic cancer). It also causes peripheral

vascular disease and hypertension.

Friends are the reason for people to start smoking: if one

of the groups most likely to begin smoking, young teenager

is also one of the most susceptible to peer pressure. Quite

often, this is the time of life when young people rely most

heavily on friends of the same age for social support and

affirmation. If a child in a social circle starts experimenting

with tobacco, it's all too easy for him or her to lead peers

into smoking as well

Family issue: is another factor that causes people to smoke.

The awkward years between pure, dependent-on-parents

childhood and independent young adulthood. If they see the

family member smoke it will pursue them to smoke as well.

Environmental Tobacco consumption control: the smoke-free area policy

is widely implemented in the world such as indoor

workplaces, public transport, indoor public places, other

public places, and also builds cigarette bins. This will cause

people to smoke less, causing the low volume.

Tobacco smoke emission: when a cigarette is smoked from

burning tobacco product, carbon monoxide is created and

released to the air and health effect for people around.

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2.6. Micro Environment Scanning (SWOT)

SWOT Description

Strengths Strong and outstanding brand image: A3 is created great

perception to Lao people, because of its high quality tobacco

and beautiful packaging that could easily catch people eyes.

Also “A” is the first letter in English alphabet and also

means the excellent for the grading at school, therefore if

people see an “A” they will think that it is the number on

product.

High Technology: the Lao Tobacco Limited has used only

the high quality and modern machine into the production

process which help to create the high value of the company

product.

Different and unique product: A3 is unlike any other

cigarette, because it has been produced from the Virginia

tobacco leaf that are growing by the Lao farmers and not

using chemicals into the tobacco farm, so that there are no

poisonous substance in the tobacco leaf. The filter is shorter

when compare to the other competitive brands which mean

more tobacco inside the stick and can smoke longer (LTL).

Weaknesses High cost: cost structure of A3 will be a bit higher than the

cost of any other mid-price brands of another tobacco

manufactures in Cambodia. Because the import tax will be

add in and will cause the price higher.

Packaging: it doesn’t have a barcode on the A3 pack and

carton which cause inconvenience for the supermarket or the

other retail big shop that use price scanning machine.

Unfamiliarity: A3 will be new to the tobacco consumers in

Cambodia, it would take some time to get consumer

intention and feel familiar on it.

Opportunities Lacking of good mid-price product: there are no good

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cigarette from the other tobacco manufactures on the mid-

price segment. Therefore, A3 will be the only high quality

cigarette for the mid-price segment.

Increasing of the number of smokers: according to the age

pyramid of Cambodia on 2008. The highest group is

between the age of 15 to 19 years old and these people will

start smoking soon. It means that the number of smoker will

be increase in the next few years.

Small family: people are starting to have fewer babies. This

means more money in each house, because they don’t have

to responsible for a big family and spend less money on their

children.

Threats Economic recession: it could be a great factor to the

business as it will lessen the purchasing power of the

consumers.

Fewer margins for retailers: since the other local mid-

price product are selling in the cheaper price than A3. So

that, we could not set a retails price, therefore many retailers

will not support our product.

The competitor products are more flesh: since they

produce their product in the local, there will be more

freshness and better smell.

3. The Future Marketing Vision and Mission

3.1. Market Vision

We will export our brand which is A3 to a South East Asia where there are more

people with the middle income and prefer a full flavor and mid-price brand. We will use this

place to extent the volume of A-brand and gain market share of the mid-price brand from ITG

competitors. Adult population whose are in the working age and university student and

having a middle income from 200 USD to 1,000 USD per month is the main target consumer

for our product.

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Our expectation is to be a leadership on the mid-price segmentation in two years. To

achieve this objective, we will focus on two main groups of people in Phnom Penh a capital

city of Cambodia, college students and office workers with the age of 20 to 50 years old.

These groups of people are more sociable, having more responsibility and more purchasing

power on luxury product.

Currently performance of the mid-price brands in Cambodia is very poor as it doesn’t

have a high quality brands available in the market. We plan to enter our product in Cambodia

market on October, 2014 since it is the starting of the high season and it is the first quarter of

the year. The launching party will be organized in Phnom Penh city follow by distributing the

product to wholesalers, semi wholesalers, and retailers respectively.

3.2. Market Mission

We will provide our product to 15 wholesalers, 1,000 semi wholesalers, and 26,000

retailers throughout the 12 district in Phnom Penh city (HIL). Our target for the first year is to

get 100% of product availability in wholesaler outlet, 80% for semi wholesalers, and 70% for

retail outlet. We are expecting for the market share of A3 for the first year is 5% and 10% for

the following year. The volume of A3 for the first year target is 5,040 master cases. Target

for the first quarter is 1,008 master cases, second quarter 1,512 master cases, thirst quarter

1,512, and the fourth quarter 1,008 master cases.

3.3. Financial Objective

We will provide approximately 363,530 USD for the first year marketing plan. This

budget will be breaking down in to 5 Projects for 4 quarters such as: grand opening, event in

the restaurant and café, even at night club, wholesaler incentive program, and retailer

incentive program.

Following are the key success for the above program objective for the first year:

- To have high brand image of A3 after the grand opening within 3 months.

- To gain 100% of distribution in wholesales outlet, 80% in semi wholesales outlet, and

70% at the retail outlet on last quarter of the first year.

- To gain 5% of market share on the first quarter and constantly growth for the

following quarters.

- To achieve the sales volume of 178,856 master cases on the first year.

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4. Marketing Strategy (STP)

4.1. Market Segment

For our target customers in Cambodia we will focus on two big groups of people. We

will target on the male university students and the office workers with the age between 20 to

50 years old. People who are on the average of middle income because this group of people

has high responsible for their own decision and has enough capability to pay for things. The

high income group will go for another international premium brands like 555, Marlboro, and

etc. While the low income people will smoke another low price brand like Cambo, National,

Liberation, and etc. we will also target on the people who live in Phnom Penh city and a

sociable people who are looking for a high class brand for creating their image in the society.

We will focus on group of people who are smoking and prefer a high quality mid-

price brand. We identify on three group of market segment demographic, geographic, and

psychographic behavioral.

We are targeting on male college students and office workers with the age of 20 to 50 years

old, who are on the average of middle income from 200 USD to 1,000 USD. We will also

target on the people who live in Phnom Penh city and a sociable people who are looking for a

high quality brand for creating their image in the society. These groups of people are more

sociable and have capability to by our product. They also have a high responsible for the

society and having capability on making decision on their own. We will satisfy these groups

of people by offering a high quality of product with the reasonable price.

4.2. Target Market

In order to have out product matching with the target market and customers, the new

packaging design will be developed to make it more unique in order add the value to

consumer and enhancing the brand perceptions. The test of A3 is already unique as we are

using a high technology machine into our production process and produce from a high quality

Virginia tobacco that grows by Lao farmer and not using any chemical substance into the

tobacco farming.

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Our product will be focusing on the growth market strategy. We are focusing on a

main group of middle income people, who are during their college and who are working in

office, as these groups of people have a high buying power on the luxury products. However,

to catch their attention on our brand, we will focus on the product differentiation both

packaging and test of the cigarette. We will make our product to be more unique and different

from the other mid-price products that are available in the market.

As there are not many mid prices cigarette available in Cambodia market and most of

them are not as high quality as A3. This means less mid-price cigarette competitor in the

market, which will lead to a high change to be successful on introducing A3 to this market.

However, focusing on research and development will be the key success of A3.

Another key success of the brand is to have a good communication both for dealers

and consumers. We will transfer our brand information through the printing materials such as

poster, sticker, and leaflet will pay an important part of our communication. A product

website will be created for group of people who are always rely on the digital technology.

4.3. Market Positioning

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A3 (LTL) $0.75

According to the graph above, A3 has three main competitive brands from three

different companies. Lao Tobacco Limited is providing a highest quality cigarette in the

market, although the price is higher than the other companies brand but it is not a big

different. Another three main competitor set themselves as a good price but the qualities of

their products are a lot lower than A3 and the lowest price is Winston from BAT.

Base on the brands positioning showing in the graph, LTL trend to serve a high

quality mid-price product to the customer with a reasonable price.

Value Proposition to Customer

Both perceptual value and physical value are providing to A3 consumers:

- Perceptual Value: A3 giving a high quality tobacco on the reasonable price with

a modern and well-known brand name cigarette to consumers.

- Physical Value: a beautiful and modern packaging is added to the physical value

of the A3. The filter is shorter than the competitive cigarette which means more

tobacco on a cigarette stick.

4.4. Product Strategy

Design: A3 is an original design of A-brand; it is a king size tobacco filters cigarettes

made of Virginia tobacco that growth by Lao farmers. The pack of A3 has four colors

blue pantone 273C, gold pantone 871C, red pantone 187C2X, and black K100. All

color and design specification have to be approved by the marketing department.

Health warning is placed at the bottom front and back of pack in black letter on white

background. The health warning will be placed in a box which is coved 30% of the

pack the font type in Lao text is Saysettha Lao and Tahoma in English text. It has

three stages of packaging master case, carton, and pack. There are 50 cartons in a

master case, 10 packs in a carton, and 20 cigarette sticks in a pack.

The Size of Packaging:

- Master case 292mm height, 485mm width, and 460mm depth

- Carton 89mm height, 276mm width, and 46mm depth

- Pack 88mm height, 55mm width, and 22mm depth and using the flip-open

type (google.la website).

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The dimension of cigarette:

- Stick 83mm length and diameter8mm, length of filter 20mm and total cigarette

weight 1.2 gm, tobacco weight 0.9 gm, it has 20 stick in one pack(google.la

website).

4.5. Pricing Strategy

As our product is an import product therefore our price of cigarette

consists of the production cost, imported price, import tariff, also the cost

of insurance and freight will be added in. The pricing strategy of our

product is dividing into 3 stages, factory price, wholesale price, retail

price.

The factory price is the price that the company sells to our

wholesalers in master case; we set the price at 320 USD.

The wholesale price is the price that wholesalers sell to the retailers

in carton; the price is being set at 6.8 USD.

The retail price is the price for consumers; the price is in pack at

0.75 USD per pack.

4.6. Distribution Strategy

On placing strategy we will focus on 3 groups of people as on the following diagram:

As we mention at the beginning that both Lao Tobacco Limited and Huotraco

International is a joint venture company of Imperial Tobacco Group (ITG). Therefore we will

export our A3 to Huotraco International. A3 will be delivered to wholesalers by their sales

team, retailers could either buy form the sales team or wholesalers on their area.

4.7. Distribution Target and Revenue

The distribution target will be set year by year according to the trend of the market,

for the first year target 5,040 master cases or 50.4 million sticks and will be breaking into

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ConsumerRetailerWholesalerProduct

four quarters. The sales revenue is targeting at 1,612,800 USD and the profit of 60% of the

total revenue

Quarters

First quarter 1,008 320 322,560

Second quarter 1,512 320 483,840

Third quarter 1,512 320 483,840

Fourh quarter 1,008 320 322,560

Total: 5,040 1,612,800

Sales Volume in Master case

Unit Price per Master cases in USD

Total Revenuein USD

4.8. Promotional and Marketing Communication Activities

To achieve the above distribution target promotional and marketing activities should

be implemented for supporting the sales volume on every quarter.

Events:

Launching event of A3 at “Raffles Hotels Le Royal” (50,000 USD)

- Attendances: special guest from government sector, Imperial, Lao Tobacco,

Huotraco International management’s team, wholesalers, retailers, and some

business people from Phnom Penh capital city.

- Activities: providing brand information them information about A3, selling the

brand at the event, enjoy dinner, and getting free gilt.

Event at the restaurants, beer gardens, and coffee shops (38,400 USD)

- The event will be organize four days a week

- Hiring promotion girls to invite for offering sampling cigarette to smokers.

- Having interesting games for getting people attention and having the customers to

get involve to get free gift such as: T-Shirt, keychain, coupon for free dinner, and

etc.

Event at night club (24,000 USD)

- The event will be organize on twice a month

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- Invite celebrities, famous singer, and DJ

- Hiring promotion girls to invite for offering sampling cigarette to smokers.

- Having interesting games for getting people attention and having the customers to

get involve to get free gift such as: T-Shirt, keychain, coupon for free dinner, and

etc.

Trade Offer Program:

Wholesaler Incentive Program (4,480 USD)

- Buy 1 master case get free 2 cartons at the end of every quarter (December,

March, June, and September)

Retailer Incentive Program (246,650 USD)

The different program will be providing in each quarter:

- Quarter 1: “Brand awareness and brand education program”:(184,250 USD)

o Giving parasols to 3,000 outlets (75,000 USD)

o cigarette showcases to 3,000 outlets (93,750 USD)

o putting stickers and posters in 18,000 outlets (9,000 USD)

o Providing a brand education to the shop owner by using leaflet (6,500

USD)

- Quarter 2: “Retailer Incentive Program” (18,400 USD)

Providing incentive to the retailers who sell A3 most and giving those A-brand

lighters, T-Shirt, and polo shirt.

o Lighter 28,000 pcs (7,000 USD)

o T-shirt 2,700 pcs (6,000 USD)

o Polo shirt 900 pcs (5,400 USD)

- Quarter 3: “Buy 10 get 1 free” (32,000 USD)

Having a trade program for retailer to return the profit to the customers, for those

retailers who would buy 10 cartons of A3 will get free 1 carton.

o Sales target for two month 1,000 MC x 5 cartons = 5,000 cartons =

100MC = 32,000 USD

- Quarter 4: “Exclusive Retailer Program” (12,000 USD)

For the exclusive retail outlet who sales only A3 and Huotraco International

brands will get a coupon to win the lucky draw price such as: refrigerator,

television, rice cooker, and etc.

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5. Budget Requirement

CATALOG DETAILS TIMESPRICE

USD

ESTIMATED BUDGET ANNUALLY

USDGrand opening

of A3 at

“Raffles Hotels

Le Loyal”

Invite celebrities

Invite wholesalers and retailers

Invite business people

Invite dealers

1 day event 50, 000 50,000

Event at Night

Club

Invite celebrities

Invite famous DJ

Having PGs for A3 sampling

Having game for getting

customers attention and

involving

Giving A&P Material for the

game winners

24 events 1,000 24,000

HORECA

activities at

restaurants,

beer gardens

and coffee

shops

Having PGs for A3 sampling

Having game for getting

customers attention and

involving

Giving A&P Material for the

game winners

192 days 200 38,400

Wholesaler

Incentive

Program

Buy 1 master case free 2 carton

(350 MC x 2 Cartons = 700

cartons = 14 MC x 320 = 4,480

USD)

Only for

first month

of the

launching

320 4,480

Retailer

Incentive

Program

Brand awareness and brand

education program

Retailer Incentive Program

Buy 10 get 1 free

4Program 246,650

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Exclusive Retailer Program

TOTAL MARKETING BUDGET: 363,530 USD

6. Key Success and Factor of Business

6.1. Key Success

Strong and outstanding brand image:

A3 has a very strong brand image in Lao; it’s a very popular brand for Lao people and also

the best-selling brand in Lao.

Product differentiation and unique:

A3 is produced from high quality tobacco leaves that grow by Lao farmer and not using

chemical on the tobacco farm.

Use of high technology

The Lao Tobacco Limited is using a high technology on the production process which makes

our product differ from the others.

Modern packaging design

We are currently developing a new packaging design for A3 to make it more beautiful and

modern in order to create value to consumer.

High quality test

A3 has provided its high quality test to the consumer as it is produce from high quality local

tobacco leaves which make the test of cigarette constantly and smooth.

High quality mid-price product

A3 is a high quality product with the reasonable price. If we compare to others mid-price

brands in Cambodia market, A3 is providing a highest quality cigarette.

Competitors

As others competitors are not providing as high quality product as A3 in a mid-price segment.

A3 will have a high completive for other brands with a high chance of being successful.

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Number of consumers

In the next few years the number of cigarette consumer will be increasing as the great number

of the population on 2010 is between the ages of 15 to 19 years old, this group of people will

start smoking in next few years (populationpyramid.net)

Running business in Cambodia it is good way because it has more the demand of

purchasing of the consumers.

The sales volumes of high price cigarettes are increasing which mean people are having more

money and more demand of cigarette product.

Royalty of customer

Having numbers of A3 royalty consumers will be a great successful of the business. Since A3

is providing a high quality cigarette for the consumers, it will be able to create great royalty

consumers.

6.2. Factor of Business

Short term factor

As A3 is new to the Cambodian smokers, they might not be familiar with the brand and the

sales performance of the first year might not rich the target. This factor will lead to not

achieving another objective as well.

Long term factor

The declining of economy will cause deducing of the number of smoker and will lead to

decreasing of A3 sales volume as well.

In the future, the competitor might have another high quality mid-price brad to complete with

A3 and we might loss its consumers to competitive brand. Therefore, another plan needs to

be setting to have a solution for this situation.

7. Control

For measuring and monitoring the Marketing planning process, the marketing control will be

a process of monitoring the proposed plans and adjusting the necessary things. We will have

22

our own objective in controlling target; the right controlling will be resulted in project

successful.

The controlling process is involved estimation, evaluation, and monitoring. To make

sure that all marketing processes are implemented in the right direction, the A Brand

Manager has to check and compare every process and the result with the marketing plan and

objective setting.

We will have many approach of controlling such as: sales analysis, quality controls,

budgets control, customer relationship management (CRM) systems, activities of competitor

to aspects of our plan, performance of any promotional activities, market response or

acceptance to the pricing policies and service levels. In addition, the controlling of sales

performance of A3 is also need to be taken for example: sales performance by segment,

location, by consumers. Those key factors will improve selling of A3. If our plan doesn’t

work, another plan needs to be done according to the evaluation of the first plan.

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References

http://www.who.int/fctc/reporting/Cambodia_annex1_National_Adult_Tobacco_Survey_2011_final_report.pdf

http://www.seatca.org/dmdocuments/13_tax_policies_for_tobacco_industry_in_lao_pdr Lao Tobacco Limited http://www.tourismcambodia.com/travelguides/provinces/phnom-penh/population .htm http://www.workinasia.net/recruiters/lao-tobacco-limited-14587.html Huotraco International Limited http://populationpyramid.net/cambodia/ http://www.bles.dole.gov.ph/PUBLICATIONS/Current%20Labor%20Statistics/

STATISTICAL%20TABLES/PDF/Tab75.pdf http://cambodiacalling.blogspot.com/2009/06/cigarettes-in-cambodia.html http://www.cambodiainvestment.gov.kh/investment-enviroment/economic-trend.html http://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO52AD6X?

opendocument&SKN=1 http://www.jti.com/ http://www.viniton.com/plus/list.php?tid=8 http://www.tobaccoevidence.net/pdf/sea_activities/Hanoi_Ross.pdf https://www.google.la/search?q=Lao+Tobacco+limited+brands&hl=th-LA&gbv=2&

prmd=ivns&source=lnms&tbm=isch&sa=X&ei=DytnU-qSK4iPkwWaiIHQCg&ved=0 CAUQ_AU

http://www.who.int/campaigns/no-tobacco-day/2014/event/en/

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Appendix

25