ORION’S FAILURE IN OSTAR SONTUNG CAMPAIGN BECAUSE OF THE

UNAPPROPRIATED DESIGN OF PAKAGING

Orion is a big company in Vietnam confectionary market. Currently, it is well known

for diversified products such as: sponge cake, biscuit and snack. The sponge cake, Orion now
is dominating the market with the market share of 70% and well known for its Chocopie brand,
Custas Brand, Fresh Berry Bran. For the Biscuit, it also accounted for 20% of market share and
the key brand of Biscuit category is Goute. For the snack market. It now accounted for
approximately 27% rank No.2 in the market after Liwayway and followed by Pepsico. The key
brand of this Category is Ostar (potato based), Toonies (Powder based), Marine Boy (Powder
based)

For snack market, the main competitors are Liwayway (Oishi) and Pepsico. Orion
Ostar is the potato brands having the largest market share in the market at that time with the
M/S was around 40% and the coverage rate is around 80,000 (Total point of sales: 120,000).

For Potato based products, the main competitor of Orion is Pepsi POCA. And both
companies compete with each other strongly to capture the larger market share because the
market of potato snack potential. In late July and early August, to enhance the competitive
capability compared with Pepsi, Orion also executed the marketing campaign for Ostar (key
brand of potato-based category) “OSTAR SON TUNG”. Contemporarily, Son Tung are
famous to the group of young generation in the age between 15-22-year-old, high school
students and university students who are also the targeted customer of Ostar brand. Orion
would like to cooperate with Son Tung to increase the popularity of products, sales as well as
consolidate the brand reputation in Vietnam Potato snack market

This campaign included such activities as below:

 Use image of Son Tung on the packaging of Ostar, together with media viral
through Facebook and some TVC on Yoututbe, Fanmeeting activation
 Purpose: The image of Son Tung on the packaging will increase the interaction
between the products and consumer.
 Consumer took the photo with the snack and then posted it on Facebook as
below:
 Using this campaign as a pull factor with the support carefully of Orion ‘s strong
distribution network with strong sales promotion, Orion expected to make a bigger gap with
Pepsi POCA in terms of potato-based products.

However, the problems happened just after 1 months launching this campaign, the sales
of this brand suddenly experienced a remarkably decline, the quantity of shop making the order
for both direct and indirect channel, especially in the traditional channel also decreased
remarkably.

The sales of Ostar decreased from: 70,000 boxes (35 Million VND) in Jun to 51,000
boxes (22,5 Billion VND) in late of Jul

Most salesmen complained a lot about this problem to the company

Problems:

The channel of distribution of Vietnam market mainly traditional shops and the shop owner
mostly women and in the age between 30-50. Vietnam peoples on a whole and Vietnam women
in specific follows the Buddhism and have many rituals relating to this religion.

So, for such kind of products with the dark image which is totally different from the products
that the shop owner had ever known before. When the products appear at their shop, they
wonder, what is this brand? Is it exactly Ostar?

When the products are displayed on the standee and hanger rack, with the big and dark face of
Son Tung, they also did not know who he was and this was the same products as Ostar before.
So, they claim that:
“This is the “GHOST SNACK” - and in their opinion, it is not good. Besides, the time for
launching Ostar Son Tung also near July (in Lunar Calendar)*, Shop owners think this kind of
products might bring something unlucky to them. So, many of them refused to order this
product. (For many people, July is called: “Tháng cô hồn”)

General version New Version

Additionally, this design seems to be totally different from the previous traditional
design. Even though, Son Tung is very famous in Vietnam, but actually there are not many
shop owners knowing who this guy is. Additionally, the way to display the face of Son Tung
also made the face recognition become difficult

In Vietnam, in general, at least, twice a month, Vietnam people often have the habit that
going to pagoda or “Thắp Hương” in 15th and 30th (lunar calendar). Besides the big amount of
consumer who buying products for eating, many people (older female as mother and gran
mother) often buys for going pagoda to pray and “Thắp Hương”. Thus, Orion also loss in this
market

After 1.5 months launching, even the negative signal about the predicted failure of the
campaign appeared, however, because the film for packaging was produced with big quantity
and cost a lot of expense. Orion still decided to follow the campaign with the hope that
influence from the other media channel will lead to the positive impact on consumer behavior
and change the behavior of shop owner. However, after 3 months, the sales were not
prospective. The impact from media channel was not big enough and canot change the
perception of the shop owner. Finally, the campaign totally failed.

What was the loss?

The sales of Ostar decreased by almost 30 %, the coverage of brand also decrease remarkably
from 80,000 shop to almost 69,000 shop. Furthermore, instead of purchasing products of Orion,
shop owners tend to buy products of competitor (PepsiCo). As a result, market share of Orion
in terms of Potato- based products also decreased which caused the decrease in the total market
share of Orion snack category.

Orion faced to problems to recover the sales and coverage they ever had before, but it became
more diffficult

In shop, dealer and factory, level of inventory products remains high level because of the big
difference between the estimation and the actual sales.

The lifetime of a snack products is only 7 months). With big amount of Ostar unsold and
expired, after that, the quantity products Orion had to take back from market, dealer. Clearly,
it caused lots of expense

In conclusion, one of the risks of company in doing business is the culture risk. This risk can
harm the cost of operation business and can’t achieve competitive advantage. Thus, it is
important to carefully to check the issues relating to culture before making important business
strategy. The unappropriated design can convey a wrong message, so the initial message can’t
be delivered to the customer. Currently, the market is becoming more and more competitive
especially in fast moving consumption goods, so if you make the mistake, the competitor will
replace your position quickly. And the effort to reach your position in the market seems to be
more difficult.