Solutions to develop Sweet fashion products utill 2010

1 MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITE’ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MBMM PROGRAM NGUYEN THI HONG MAI Solutions to develop Sweet fashion products till 2010 FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT TUTOR: Prof.PhD NGUYỄN THỊ LIEÂN DIỆP Ho Chi Minh City 2007 COMMITMENT I assure this is a project of mine All data, results mentioned in project are righteous NGUYEN THI HONG MAI ACKNOWLEDGEMENTS I am grateful for being with MBMM program I would like to thank Solvay University and Ho chi minh Open University co-organizers this program and their professors who gave me updated knowledge and experiences on modern marketing in practice I would like to thank professor Nguyen Thi Lien Diep – my tutor who enthusiastically helps me in orientation, finding the objectives and instructs me in project realization process I would like to thank Ms Do Thi To Nga – S-fashion General manager for her direction and experimental advices Many other colleagues and friends made significant contributions on this project Extra special thanks are due to preparers of ancillary materials I would also like to thank the good people who spent time on answering my questionnaire Their contributions have particular role in success of this project Last but not least, I would like to thank my family and friends for sticking by me during this project Hochiminh City May/2007 Nguyen Thi Hong Mai TUTOR’S COMMENTS Ms Nguyen Thi Hong Mai has proved her business analysis capacity in scrutinizing the status-quo of Sweet brand products in the market Objective assessments on environmental impacts on the products, together with particular collection of customer information are crucial for a business to see the solutions to develop its products and widen the market share Ms Hong Mai was successful to so Feasible solutions, therefore, have been recommended by her to build up strategy for Sweet branding With neat and concise structure, diversified data inputs and in-depth analyses, the project is graded 36/40 Ms Hong Mai is recommended to defend her Final Project of “Solutions to develop Sweet Fashion Products till 2010” before the Committee HCMC, May 21, 2007 Prof PhD Nguyen Thi Lien Diep MENTOR’S COMMENTS S-Fashion Corporation appreciates what Ms Nguyen Thi Hong Mai is contributing in the strategy building of the company till 2010 As a start-up company, it is a rare opportunity that S-fashion receives such in-depth analysis of its products status in the market The possible environmental impacts on the products are also pointed out, which helps the company see its strengths and weaknesses At the same time, very effective solutions have been suggested by Ms Mai that helps our company develop our products in the market We wish her all the best and success in her study and career Ho Chi Minh City, May 23, 2007 Do Thi To Nga CONTENT EXECUTIVE SUMMARY INTRODUTION CHAPTER 1: S-FASHION 1.1 Establishment 1.2 Business Scope 1.3 Legal capital 1.4 Organization 1.5 Marketing mix 1.5.1 Product 1.5.1.1 Sorts 1.5.1.2 Style 1.5.1.3 Designs 1.5.2 Price 1.5.3 Promotion 1.5.4 Distribution 1.6 Production 1.7 R&D 1.8 Customers 1.9 P&L the last months 1.10 The Strengths and weaknesses of S-Fashion CHAPTER 2: STATUS- QUO ANALYSIS 2.1 The Macro Environments 7 2.1.1 Demand and demand trends 2.1.2 Economic environments 2.1.3 Political environments 2.1.4 Social and culture factors 2.1.5 Demographic 10 2.1.6 Natural environments 11 2.1.7 State of technology 11 The micro environments 12 2.2.1 Customers 12 2.2.2 Competitors 14 2.2.2.1 Nem 14 2.2.2.2 Xinh 14 2.2.2.3 Pierre Cardin 15 2.2.3 Alternatives 16 2.2.4 Suppliers 16 Opportunities and threats 17 CHAPTER 3: SOLUTIONS 18 2.2 2.3 3.1 Goals and missions 18 3.2 Some proposal solutions 18 3.2.1 Build a appropriate organization structure 18 3.2.1.1 Set up marketing department 18 3.2.1.2 Build up organization culture 19 Consolidate marketing mix strategy 20 3.2.2.1 Products 20 3.2.2.2 Branding 21 3.2.2 3.2.2.3 Services 22 3.2.2.4 Price 23 3.2.2.5 Promotion 23 3.2.2.6 Distribution 23 Find stable material sources 24 CONCLUSION AND RECOMMENDATIONS 25 3.2.3 REFERENCES TABLES FIGURES PICTURES APPENDIX ABBRIEVIATIONS CEO CMO EDI GDP HCMC PC POS R&D Savico SKU SME SWOT TQM VAL VND WTO chief executive officer chief marketing officer electronic data interchange Gross domestic product Ho Chi Minh city Pierre Cardin point of sale research and development Saigon General Service Corporation stock keeping unit small to medium –sized enterprise Strengths, weaknesses, opportunities, and threats Total quality management Value and Lifestyle Vietnamese dong World Trade Organization 10 LIST OF TABLES, FIGURES, PICTURES, APPENDIXES TABLES Table 1: Table 2: Table 3: Table 4: Table 5: Balance Sheet P&L Monthly Average Income Per Capita National Statistics Socio-Economic Classification Female employees in enterprises FIGURES Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Level of Needs in The Maslow Hierarchy In urban Vietnam, Income is Sharply Raising Young population Potential Consumers per age Group VALS Segmentation System Organization Culture Types Creating a Relationship Web PICTURES Pictures 1-5 Pictures 6-10 Pictures 1-5 Example of Nem Products Example of Pierre Cardin Products Example of Sweet Products APPENDIXES Appendixes 1: Appendixes 2: Appendixes 3: Appendixes 4: Theoretic Questionnaire The survey results The main target of HCMC 27 • Income: 90 mil and over annually • Sex: female • Education: College graduates and post graduates • Occupation: White- collar workers • Vals Scale: Achievers or Fulfilled (CB, Michael R.Solomon, Sixth edition, p208) • Benefits sought: Prestige, quality and service • Location HCMC, Hanoi, Danang, Vungtau 2.2.2 Competitors: in segment of office apparel there are three main competitors: Nem, Xinh, and Pierre Cardin 2.2.2.1 Nem is a fashion brand that was built in 2004 Nem produces products for both men and women It products are of many styles and designs Nem career – oriented apparel line have French, youngish style with well blend colors and details; Nem products are manufactures Materials mainly come from china so it is easily to be familiar to or confused with other’s products Nem positions at upper – medium level It price is acceptable for office workers with monthly income is around millions VND ($ 4000/ year) Nem benefits sought are youth and motivation Promotion: Nem is clothing sponsor for many televisions MC, especially entertainment programs Nem has a website to business online Nem not use direct marketing yet Nem has two shops in HCMC and one shop in Hanoi (see pictures – 5: examples of Nem products) 2.2.2.2 Xinh: Customers remember Xinh thank to its service quality Xinh’s sale staffs are very easygoing thank to their friendly and enthusiastic manners Xinh has produced office apparel for 10 years 28 Xinh products are manufactures and vary in style, sizes Xinh designed on domestic materials so it is very easy “to be familiars” with others Xinh positions at medium income level that is lower than Nem’s, so price is accordingly lower The most important notice is that in office apparel line, middle age, although they have upper income level have to buy Xinh’s because is the only manufactures that has suitable products for them Xinh has no advertisings, no website Xinh benefits sought are good service and easy usage Xinh have shops in HCMC 2.2.2.3 Pierre Cardin (PC) is a global famous brand PC products for men have been introduced in Vietnam market for 10 years PC products for women just appeared in Vietnam since 2005 Licensee is a state – owned company named Savico PC products are mostly high quality office apparels that have very specific characteristics of PC designs Production process was strictly controlled by Pierre Cardin Vietnam Ltd But unfortunately PC production criterion did not meet Vietnamese tastes The typical example is that nearly all designs granted by Pierre Cardin by himself and his designer that come from Italia were totally not sold even a unit in Vietnam market Consequently, PC Vietnam Ltd has to loose its rule such as: may use flowery materials or may change some design details In 2006 and 2007 Pierre Cardin turnover remarkably increased but did not reach profitable stage PC prices are high since it is famous foreign brand but top leaders can afford it PC benefits sought are luxurious and showing wearer status There are only three PC fashion show in television, including the show that organized when Pierre Cardin came to Vietnam PC has 02 shops in HCMC (see pictures –10: examples of PC products) 29 The thing is that, producer for PC since 2005 is S – fashion Entered joint stock market, Savico was leading re-structure process and it does not want to develop fashion line which is essentially not Savico’s strong points Therefore, since the first of June 2007, PC for women products will disappear in Vietnam market Who will be next licensee is still in mystery 2.2.3 Alternatives: There are many shops in HCMC as Mocmien, Nha Uyen, Zip Fashion, Centimet, Senti; Designer Thuy Vu, Thuy Nga, and so on At these places, a customer can ask for and get the most suitable size they want to have There are many catalogues they can choose from Textiles are of many kinds and available to be used Customers get advices from the designers 2.2.4 Suppliers generally have a symbiotic relationship with an organization They are major stakeholders who help in production processes by supplying components or systems The way in which a supplier can affect an organization’s wellbeing is dependent on its power S-fashion as a clothing manufacturing company is dependent on electricity company (there is the only one), machine suppliers, textile and accessories suppliers The latest are the most important suppliers But unfortunately, they are not strong enough suppliers For many reasons, all items are imported in small volume and nobody knows what will happen and when to receive the lots So it limits S-fashion ability in its creation aspect 30 2.3 Opportunities and Threats Opportunities The Threats consumption trend is positively Limitations of developed along with the fast economic source of materials growth The population becomes older and accessories; A strong office attire brand tends to be Continuously raising withdrawing from the market in some price of house rent uncertain coming time in HCMC; No existing high-end brands target middleage and high income group Counterfeit and copyright infringement; No office apparel brands pay attention to embellish the attractive curves in a traditional Many alternatives in the market; and semi-classic beauty of Vietnamese women The existing brands don’t edge the vest details with silk of the same color line in stead of overcastting, which can bring in a graceful look for the product from different angles The existing brands don’t pay enough attention to building relationship with and provide over expectation services to customers in a way that they become longterm friends and loyal customers Entry of competitors; new 31 Chapter 3: SOLUTIONS TO IMPROVE SWEET PRODUCTS 3.1 GOALS AND MISSIONS Based on situational analysis, company’s environments, its strengths and weaknesses, opportunities and threats, I would like to propose the goals and missions for S-fashion in the next time as follows: S-fashion should: ¬ Improve production in both size and capacity; ¬ Expand market to Hanoi and Vungtau in 2007; ¬ To set up marketing department ; ¬ Improve and diversify products; ¬ Build strong brand; ¬ Set up CRM system; ¬ Build up culture of customer service and improve service quality; ¬ Build stable material sources 3.2 SOME PROPOSAL SOLUTIONS TO CARRY OUT THE MISSIONS Through investigation, assessment the situations as well as consultation with experienced experts, I would like to propose some solutions for S-fashion to carry out its business fashion as follows: 3.2.1 Build appropriate organization structure: 3.2.1.1 S-fashion should set up Marketing department which directed by vice director in order to carry out market researches, implement marketing strategy The department has two divisions with 5-7 persons There is marketing department manager, two division managers Proposed structure is as follows: 32 MARKETING MANAGER MARKET RESEARCHES MARKETER MARKETER IMPLEMENT MKTG PROGRAMS MARKETER MARKETER 3.2.1.2 S-fashion should build up it own organizational culture It is defined that the pattern of shared values and beliefs that help individuals understand organizational functioning and provide them with the norms for behavior in that organization.’ (Deshpande and Webster,1989) A model of culture type can be derived for S-fashion with market orientation This type exhibits competitiveness and goal achievement with a decisive, achievement-oriented leadership, creates bonds through goal orientation, production and competition The strategies adopted are towards competitive advantage and market superiority (See Figure 6: Organizational culture type) • Production sector should be reconstructed Manufacturing chains should be used • Build R&D department to examine market trends and information in order to predict and design appropriate products for every season and market segment • Build up IT division to establish and manage the company’s database system, particularly a web-site (See figure 7: Creating a relationship webpage) • Build up an appropriate treatment policy for staffs that can motivate them to business at higher accountability 33 3.2.2 Consolidate marketing mix strategy There are many changes in market views when it comes to twenty-first century S-fashion should periodically carry out market researches in order to catch up with the market changes and to build up or maintain marketing strategy in coherence with the situations 3.2.2.1 Products The results of customer survey (See Appendix 3, results) showed that Sweet customers pay most attention on style than designs They are fashion with French style Bright colors and black and white are the most favorite Sweet customers like to wear costume with skirt or with pants The survey results also show that the most expectation from a customer to pick up a fashion product is to become unique, then to be more attractive as second wish Therefore, S-fashion should continue producing products with small quantity for each design Office apparel is still the main product line of S-fashion Product designed should be improved in order to match with the women of 30 and over appearance and characteristics The product line for U40 and U50 with appropriate materials and design should also be improved More attention should be paid to design products that can hide body’s shortcomings • At the moment, S-fashion should try to implement some designs of 70s of the last century in a way that can create modern beauty with waft traditional and/or classical sense of fashion • Another aspect that needs to be considered is to create one more upper product line with better materials and styles for tailored clients that come from Pierre Cardin’s 34 • Produce collections of 5-7 elements with suitable colors and designs so as to associate each with others to create new costumes for the week days • Since at the age of 30 and over most of females already have babies, their body shape is not well built as it was before Thus, S-Fashion should produce clothes that may hide their body shortcomings For example, for a plump, there is blouse or coat with large hips so it can make the waist look smaller in comparison with her hips; or for a slim body, to drape their hips in fabrics in order to give a swollen appearance in buttock In short, Sweet products aim to create female beauty with it own nature and attractive feminine curves that much differ from old office uniforms • Put up uniqueness and individuality to products by using hand made embroidering, crotchet details; • Apply line production to increase productivity and product equality • Each design are produced in as small quantity as possible • Increase design in number and quality Continuously change designs in order to shorten product life cycle to prevent counterfeiting • Diversify products, produce products relevant to seasons and market segments; • Widen product ranges such as casual wear, dresses and accessories like hats, handbags to progressively satisfy customer needs • Add belts, bracelets, necklaces in business to create perfect collection with clothing 3.2.2.2 Branding: Sweet seeks for solutions for its female customer to be attractive and motivated with a sense of fashion; continuously improved customer 35 services Increased brand awareness by using Word of Mouth Sweet slogan is the beauty is yours 3.2.2.3 Services: In order to make customers extra satisfied, S-fashion should create customer service culture that every enterprise’s members should be aware and implement I would like to suggest some actions that S-fashion should take to achieve this goal: • To set up new business situation: move from reaction to pro-action; from deal to relation; from preferential treatments to customer centralized services; from satisfied customers to extremely satisfied customers • To build up customer centralized structure: personalize relationship between marketers and customers It means that all company’s members should carefully listen to customers and try to understand them, i.e you need to sell to customers what they want to have but not what you want to sell, i.e you have to understand customers carefully and catch their needs and at the same time to predict what they want to • The golden rule is that every company’s members have to go to point of sale since there they can easiest look at, contact and experience real customers • Find and hold key customers, give them extra services Try to make friend with them Some specific actions S-fashion should take up: ♣ Accept priority order is people, services and products, i.e the first is staffs, second is customers and third is products; ♣ Train employees carefully and then give them appropriate power Every employee should be learnt by hearts these five basic issues: 36 ♣ Think of customers first; ♣ Enthusiastically communications; ♣ Set up customers records ♣ Make use of general knowledge In general, for the best effect of services three ‘E’ are needed: Energy, enthusiasm and execution Sum of them equals excellence 3.2.2.4 Price: The survey shows that 21% of Sweet customers choose a fashion apparel just because of it price So S-fashion should build price policy in that clearly distinguishes two product lines: one for Sweet traditional clients, other for clients came from Pierre Cardin’s Proposal price difference level is about 20%; and price policy for big orders 3.2.2.5 Promotion Appendix show that Sweet customers mostly (59%) prefer reduced price in compare with other promotion types So S-fashion should have special price reduction for key customers such as leaders or initiators The maximum reduction level may reaches 50% if she has strong influence on other customers S-fashion should concentrate in exploitation Words of mouth and in building introductive website and business online 3.2.2.6 Distribution: S-fashion should start to develop distribution system in Hanoi, Danang, Vungtau, Haiphong A standard layout should be created for their chains of shops In every shop, there should be a computer so that a client can revise all of patterns event if it is sold out Models are client who tries these costumes It is comfortable for customers to order what they like or they can create new designs for themselves 37 3.2.3 Find stable material sources Since there are not adequate material sources so S-fashion should join with material producers to produce exclusive materials At the same time, they should find other suppliers to diversify accessories sources 38 CONCLUSION The need for fashion in a developing economy is increasing Sweet Fashion Corporation was established to meet this need The company specializes in office outfit production and sales The in-depth analysis of environmental impacts on fashion products development, as well as SWOT analysis of the company, enables the writer to recommend some short-term solutions to develop and promote Sweet brand and products The writer hopes that such solutions will soon be applied in the company and bring in expected results for the business: strong Sweet brand and firm position in this severe competitive market RECOMMENDATIONS Due to limited time line, this report cannot elaborate an action plan for such solutions A detail plan should be developed as soon as possible to realize the business ideas The diversification of product lines to sport wear and socks is not yet elaborated However these product lines are potential in this dynamic life Another important aspect that needs further development is capacity building Human capital is crucial for a business It needs professional and skillful staffs as well as incentive system to exploit the capacity of the staff Such issues should be further studied to find out solutions On behalf of the company, the writer would like to propose that: ♣ The Government should build up a legal framework and enforcement mechanism to prevent counterfeit and copyright infringement, particularly in the fashion industry ♣ The electricity provider should announce clearly their provision and cut-out plan to enable the manufacturers to ensure their production plan 39 40 REFERENCES Ashok Ranchhod, Marketing strategies: a twenty-first Century Approach, Prentice Hall F.Khrouz, lesson on financial statement analysis, HCMC (2005) Keith Blois, The oxford textbook of marketing, Oxford University Press, (2000) Micheal R.Solomon , Consumer behavior Buying, Having and Being – Sixth edition Nick Ramley-Sturgeon 2006, Small business big profit, Pearson Education limited Philip Kotler, Marketing Insights from A to Z, 80 Concepts Every manager needs to know, (2000) Philip Kotler -Principle of marketing –Third European edition William A Cohen, The marketing plan, Third edition In Vietnamese Al Ries and jack Trout, 22 luật tiếp thị không đổi, ECO Press Jack Trout, Khác biệt chết, để thiết lập, xây dựng bảo vệ thương hiệu vững mạnh, NXB Trẻ (2004) Mike Merrill, Dare to lead, top 50 CEO of the world’s valued experiences and ideas, First new, (2006) Tùng Linh, Nghệ thuật chăm sóc khách hàng, NXB Từ điển bách khoa, (2005) Web sites http://www.pso.hochiminhcity.gov.vn http://www.newnem.com http://www.sgtt.com.vn http://www.netmode.com http://www.thoitrang.com http://www.thoitrangtre.com.vn http://www.vnexpress.com.vn 41