Developing Guerrilla Marketing Strategy Marketing Essay

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 th