A leading Western producer of tobacco products wanted to enter the Vietnamese market. The opportunity represented an addressable market of roughly 50 million customers, growing fast, undergoing liberalization from central government planning, and with increased preference for Western “premium” brands. Market distribution was controlled by state-owned channels, private channels, and unauthorized channels smuggling products from Laos and Cambodia. The client’s objective was to enter and establish a leading market share position.
- The company entered the market at once
- It established distribution through recommended public and private channels
- It was able to gain the leading market share position within 24 months
We performed a comprehensive analysis of the market, channels and the competition as follows:
- Sized regional and local markets, along with market growth projections on a regional and country- wide level
- Scoped the various distribution channel participants throughout the country, including every major city and urban center and select rural areas
- Measured distribution volumes, geographic reach, product supply sources, margins, channel relationships, and overall distribution infrastructure and capabilities
- Analyzed the competition by channel within each region
- Recommended channel partners for positioning on a regional and country-wide basis
- Proposed two joint ventures, one with a select government-owned distributor and one with a select private distribution company
- Identified four logistics locations, including Ho Chi Minh City, Hanoi, Hue, and Da Nang
- Estimated required resources
- Supported client in negotiating formal distribution partnerships with the selected participants
Because the company was the market leader in Laos and Cambodia, it decreased sales of products in those countries because they were being diverted into Vietnam through illegal channels.