Mia Agnes M.

Tacoloy Entrepreneurship and Innovation

15-0598 September 20, 2019
Selling C2 in Vietnam: A Case Analysis
I. Point of View
The perspective that this analysis will attempt to orient itself in is that of Mr. John Gokongwei and
his top management team at Universal Robina Corporation (URC), who have plans for expanding the
C2 brand into a neighboring country, Vietnam. Buoyed by C2’s initial success in the Philippines,
Gokongwei is very confident that there is great potential for a market for C2 in the neighboring Southeast
Asian country.

II. Statement of the Problem

C2 was successfully launched in the Philippines in October of 2004. Filipinos were immediately
endeared by the product, especially because of the flavor variants it came with and taking part in the
concept of a healthier alternative to carbonated soft drinks. An indicator of this success is the fact that
100,000 bottles were sold in the first month of its release. In 2007, 30 million bottles of C2 per month
were being consumed by Filipinos. Gokongwei has now seen an opportunity to replicate this success in
Vietnam, whose tea market is in many ways similar to that of the Philippines’ but also nuanced in
differences. The main problem now of URC is how exactly to go about this and what will be the most
feasible manner of entering the Vietnam RTD tea market.

III. Objectives/Goals of the Case

This paper aims to:
 Provide a comprehensive outline of the case;
 Identify alternative courses of action with which to manage the launching and
marketing of the new product in a local setting using the 4P’s model

IV. Key Facts

a. The success of C2 in the Philippines
 C2 was launched in October 2004, and positioned as a healthier alternative to
carbonated soft drinks rather than as a new type of iced tea drink
 The product shared supermarket shelf-space, packaging and pricing similarities
with Coca-Cola and Pepsi, rather than with existing tea products
 C2’s brand name reflected the ‘cool’ and ‘clean’ nature of the product
 Advertisements touted the health benefits of C2
 The product came in apple, lemon and peach variants, mimicking its Western
counterparts
 It was manufactured to be significantly sweeter than similar Asian tea products
 Packaging emphasized Chinese roots, demonstrated by inclusion of Chinese
characters and calligraphy
b. The Vietnamese Beverage Market
 Relatively small compared to the Philippine market
 Widely considered one of the most attractive markets because consumption per
capita was much lower than in many other Asia-Pacific countries
 Demand for soft drinks predicted to rise significantly
  Top-selling drinks in Vietnam were carbonated soft drinks
 Sports and energy drinks sold reasonably well while juice from concentrate did
not register as strongly as in the Philippines
 Vietnamese consumers are avid tea drinkers
 Market for RTD tea is still in its infancy
 Hot tea is consumed for both cooling effects in the summer and warmth for cold
weather
 Tea is very much involved in ceremonies and ritualistic occasions
 Varieties of tea include green, black, jasmine and oolong
 Packaged and instant teas were becoming increasingly popular as rising incomes
and busier schedules were becoming more prevalent
 Green tea was the most popular variant
 Tea specialty shops were growing in abundance, providing exposure to different
varieties and mixes of tea
 Like in China, Vietnamese consumers preferred their tea strong with a slightly
bitter taste

V. 4 P’s Strategy for RTD Tea

Product
- Ready-To-Drink Tea
Price
- Numerous health benefits
- Medium-cost pricing to enter the
- To refresh and revitalize market
- Safe to consume - Pricing to offset marketing efforts
- Convenient packaging (fit for needed
lifestyle)
- Flavors include green tea, lemon,
jasmine and honey
C2 in Vietnam

Promotion
Place
- Print advertisements in billboards
- Sell in retail beverage outlets
- Radio and TV announcements
nationwide
- In-store displays
- Big and small convenience stores and
grocery chains - Price incentives
- Emphasize safety in process of
manufacturing

1. What recommendations would you offer to Gokongwei regarding URC’s expansion into Vietnam?
 My recommendations to Gokongwei regarding URC’s expansion would be to position C2 as a
premium product that not only contains health benefits and involves “real” tea but is suited to adapt to the
fast-paced lifestyle of the consumer, as a “personalized” touch. Much emphasis should also be placed on
attributing the quality of the product to its safe manufacturing process and that this process directly produces
the real and authentic flavors that consumers enjoy in their product. Therefore, as Vietnamese consume the
product, they drink C2 not only with the intended health benefits in mind but also are aware and can rest in
the fact that it is indeed consumer-friendly and does not bring any dangers with it. This can probably be
associated with a ‘premium’ branding of the product in Vietnam. Moreover, the product itself can retain its
very convenient packaging such that consumers who are on-the-go can simply drop by into a retail outlet
that sells the product, grab a C2, and consume it on the way to their destination. Flavor variant should also
include the topmost currently preferred tea flavors in Vietnam such as lemon, jasmine and honey. Growing
segments in the country which include infusions of ginger and chrysanthemum might also be introduced to
the market so as to maybe boost its growing popularity, which in turn can increase brand image and equity.
Furthermore, the product can be marketed as a “drink for all seasons”, further adapting to the needs of
Vietnamese consumers: it is perfectly safe and beneficial to consume it during the hot climate and during
cooler weather. Packaging should also include Vietnamese characters so as to connect more with consumers,
and perhaps it can also be marketed and associated with the snack food line of URC once it is finally
produced. This way, URC will be building its brand even more.

2. In terms of expanding the brand into Vietnam, what advantages and disadvantages does URC have that
its Vietnamese competitors do not have?

URC has the advantage of the lessons that it has learned from launching an RTD tea product in a
market where RTD teas were very low in popularity and did not gain much traction yet. Therefore, it has
outsider experience as to the whole process of marketing and producing a product with very big odds against
success. It has the disadvantage of entering a very new market, which is similar in some ways to the
Philippines yet also differentiated. It would have to consistently learn the nuances of the Vietnamese
beverage market and the culture and traditions that affect consumer behavior.

3. Compare and contrast the Vietnamese and Philippine beverage markets, particularly in terms of the
market for ready-to-drink teas.

Similar to its Chinese counterpart, the Vietnamese beverage market has had a longstanding
relationship with tea; tea is already considered part of the country’s culture and is especially used in many
occasions. The market also prefers their tea strong with a slightly bitter taste, unlike in the Philippines where
slightly sweetened RTD teas work best. Preferences in flavor variants also differ between the two markets,
with Vietnamese consumers preferring more local sources while Filipinos are very comfortable with
Western flavors such as apple, lemon and peach.

4. What changes, if any, would you make to C2 in order to make them more appealing to the average
Vietnamese consumer? Which characteristics of the Filipino C2 would you retain?

I would strengthen the taste of the C2 so as to make it more appealing to the Vietnamese market, in
that it has a slightly bitter taste and it is not that sweetened. I would also employ various flavors that are
currently most preferred in Vietnam, unlike the Western flavors that Filipinos are very fond of. Lastly, I
would retain the health benefits and ‘safe’ perception of the product.