situation analysis report durex analysis marketing

Product descriptionDurex Vietnam has 3 product lines, the condoms, Massage & Lube Lubricant and Sex Toy Durexvietnam,2019.The condoms are mainly used to prevent impregnation and transmis

Lecturer: Le Phuong Chi

Course name: Marketing PrinciplesClass group: MKTG1205

Group member:

Tran Thi Van Anh - s3689040 Nguyen Duc Thanh - s3715175 Pham Thuy Linh - s3754493 Nguyen Yen Trang - s3753365 Nguyen Tran Khanh Van – s3757959 Tran Huu Hoang Ninh -s3794484

Situation Analysis Report

A Situation Analysis I C

any descYription

Durex brand was first registered by The London Rubber in 1929; nowadays the Durex brand has been producing condoms with multiples types and worldwide spread for over 80 years (Durexuk, 2019) The brand Durex is representing three standards: durability, reliability, and excellence aiming for experience, safe sex and fun, not just condoms (Will Smale, 2010).

Durex first release was the lubricated condom in the 1950s and the first brand to use the electrical testing technology for their condoms in 1953 (Durexuk,2019) During 1970, Durex commercially advertised in multiple countries, including the Formula One Racing Tournament (Durexuk,2019) Once again, Durex was the earliest in the history of the condom industry to gain Global “Shield of Quality” (Durexuk,2019)

Till 2010, a remarkable date for Durex when its former parent corporation SSL International to announce the agreement of selling Durex to Anglo-Dutch consumer goods company Reckitt Benckiser for £2.54 billion (Will Smale, 2010) Durex entered Vietnam’s market in 2005, and it is growth rises year by year till now, reaching 16% of the market shares.

II Product description

Durex Vietnam has 3 product lines, the condoms, Massage & Lube (Lubricant) and Sex Toy (Durexvietnam,2019).

The condoms are mainly used to prevent impregnation and transmissive diseases through sexual intercourse, each Durex condom holds about 40 liters of air, twice the international standards for the burst test (Durexuk,2019) From ribbed and dotted to flavored, extra thin, and extended pleasure, discover our skillfully designed range of condoms that will boost the sexual experience

The Durex product variant in Vietnam is limited compared to the UK market Durex in Vietnam's market has around 16 types of condoms with different thicknesses, textures, occasional use and materials (Durexvietnam,2019) According to Durex UK website, it has 85 products in condoms, featuring the diversity of Ribbed & Dotted condoms and the Comfort XL, the evidence has shown the diversity of taste and choices (Durexuk,2019).

Currently, Durex is the biggest seller of condoms in the UK market In the matter the fact that it holds a 26% global market share and distributes over one billion goods every year (Leonie Roderick, 2016) In Vietnam, Durex occupied 16% in the condom market, with the usage of over 4 million condoms in 2018 (Laodong,2018) The brand awareness is undeniably well known due to its strategies in the digital media It is quality standards remain more than 80 years till today.

B Marketing Environment I Micro environment

The microenvironment of Durex Vietnam consists of six factors close to the company that influence its potentiality to serve its customers These elements are the suppliers, marketing intermediaries, customers, competitors and publics (Histech Bhasin,2018).

Most of the Durex products namely condom and lube available on Vietnam market are imported from Thailand from RB Bangpakhong (SSL Manufacturing (Thailand) Ltd.) (TimGiaNgon) Since it only takes one hour for a cargo flight from Vietnam to Thailand, which could be counted as a rather fast delivery, there is little likelihood that the products’ quality would be affected Other suppliers from Vietnam might include companies like Healthy Life Co.,Ltd and shopthehetre (Supplierss, 2019).

Starting with the opportunity, as mentioned above the time to deliver goods between the two countries is quite fast so the quality would not be affected much Furthermore, the close distance means shipping can be done regularly, Vietnamese importers can calculate the amount of import based on the market, limiting the amount of unsold goods Another advantage would be the price Since Thailand is an ASEAN member, there will be some benefits on tariff when exporting to Vietnam and this might contribute to a lower price in general, compared to products from European countries for instance

2 Marketing Intermediaries

Durex is known for their good marketing as their product is widely known and can be found nearly every shop Their wholesale market in Vietnam includes retail stores,

supermarkets and convenience stores, which Durex has the strength of 90 to 95% by retail

stores and supermarkets in the entire country have Durex products on their shelves, although the consuming percentage was just around 16% (Laodong,2018) Other data might include: 4.16 million condoms were consumed, the revenue in 2012 was 20,408,000 USD, annual growth is around 10 to 15% and 2013 saw an impressive growth of 30%(Laodong,2018) As for convenience stores, Circle K, Family Mart and Mini Stops are the most popular and widespread ones in Vietnam Since they open 24/7, meaning customers can buy the products at any time, Durex would have better selling opportunity there (Bích Lan, 2017)

Durex use exclusive distributor and their only distributor in Vietnam is DKSH Vietnam, wholesalers must cooperate with them to have the brand’s condom, this is the

strength for Durex to only take an eye on one distributor, easier control over the quality

(Ngọc Trang, 2017) Certain products like Durex Red are also available on eCommerce platforms such as Tiki, Lazada and Shopee Younger generation is more likely to approach the products in this way (Lao Dong Tre,2018).

Their main marketing strategy is using digital media The company advertises by using amusing online games and articles about sex This turned out to be effective considering Durex sales increased threefold in China from 2010 to 2013 (Angela Doland, 2015) An explanation could be that these kinds of content are sensitive and nowadays people use the internet more than watching traditional TV Durex also knows how to advertise through anticipated event As Vietnam won the AFF Suzuki Cup 2018 championship, they made a poster having the condom twisted like an eight number, corresponding to the year 2008 and 2018-ten years of waiting to be a champion again, this movement attracted many Vietnamese attention (infonet, 2018)

3 Customer

Customer Market: Durex is well-known, and their products are used in many parts

of the world However, their consumer appears to be highly focused on certain demographic groups According to the data on Numerator, Durex’s primary customers are from the under 24 age group, followed by the 25 to 34 and then come the 35 to 44 group (Numerator,2019)

Region-wise, Asian, the category which Vietnamese fall into, are their main consumers (Numerator,2019).

Reseller market: Reseller market of Durex in Vietnam, as mentioned in the

Marketing Intermediaries section, is large, both on traditional and digital platform They can be found in supermarkets, convenience stores and even pharmacies, though people are recommended to buy from those with well-reputed ones to avoid counterfeit Durex products can also be found on nearly every online shopping websites, a notable mention is http://durex.com.vn/, which content can be easily guessed by the name, is a Durex product only website targeting Vietnamese.

4 Competitor

The Vietnam’s condom market has been competitive by several foreign brands aside Durex Sagami & Okamoto are the Japanese brands which have great impact into the condom market Most interestingly, according to a domestic retailer in Ho Chi Minh city, Durex was place first at 16%, then Sagami was placed second after Durex for the overall buying rates at 12,7% and then the domestic brand “Ok” at 8% (Laodong,2018) The domestic brands are Ok and Happy, especially Ok was the first Vietnamese brand in 1993 which conquered the market way before foreign brands due to its affordable price and well known for middle age men (Vinaresearch,2017)

However, upon all these brands, Durex seems to be the biggest guy in the market with competitive pricing over the Japanese’s brands from 30,000 VND – 80,000 VND (Durex) and 23,000 VND-70,000 VND (Sagami), (Tuyet Hong ,2017) Even though the competition against Japanese brands has taken place for several years, Durex has been successfully

dominating the Digital Media using outstanding and creative posters which is its opportunity

in customers embracement During the USA - North Korea Summit occasion, "Ngăn đạn lạc Vì hòa bình", the Facebook post had gathered attention of 30 thousand people during day 1 (Bong Mai, 2019)

In 2014, British company Crown Agent has conducted that 26% of over 170 million condoms failed he standards of ISO, WHO and UNFPA, this was a direct threat to Durex and the condom industry (Vietnamnews,2015) Therefore, the Birth Control pills manufacturers became Durex’s indirect competitor, approximately about 73-75% of consumption by Vietnamese women (Gynopedia) NewChoice, Regulon, Diane 35 and Marvelon are the big names in the market for daily uses type (Anh Duong, 2011) Moreover, the birth control pills are only be sold through pharmacies and hospitals, they are easily access without any prescription needed (Vietnamnews, 2015).

5 Publics

Besides the popularity of Durex in Digital Media segment which they critically dominated The media publics such as domestic news always talk about Durex’s creative in every significant event, the World Cup posters by Durex had been used for several digital news (Vietnammoi,2018) The use of News had promoted the digital community into Durex’s official fan page on Facebook for years which shows an opportunity in customers attraction especially in the young generation, currently the fan page has reached 11 million subscribers over 90 million in national population (DurexVietnam, 2019)

Durex also launch campaign about AIDS awareness by partnering with (RED), the campaign benefits from the general public The #DUREXRED had been spreading in Vietnam and e-commerce retailers as Tiki, Lazada & Shopee are the exclusive seller to the

market (Laodongtre, 2018) The use of both the campaign and e-commerce retailers had showed an opportunity for Durex to embrace the younger customers with mobile-first region market (Laodongtre,2018).

II Macro Environment1 Demographic

In 2019, the population of Vietnam has a total of over 97,1 million which makes up 1,26% of the population worldwide and ranked 15th in terms of the level of population in the world (world meters 2019) Dense population lead to high in customers demand This is a golden opportunity for Durex for market expansion as well as gaining a large number of potential customers In addition, Vietnam is a country with a young population, there are nearly 67,3 million people aged between 15 and 64, making up 69,3% of Vietnam population (countrymeters 2019) Because condoms are the most commonly used product for people in early adulthood and married people, based on a survey of W&S market research company Therefore, Durex company have a large a number of customers However, according to nhandan (2017) Vietnam has a fast aging population Nowadays, on average, 9 people will have 1 people aged 60+ and this ratio is predicted 5:1 in 2050.

This will be a significant disadvantage for durex because older people often do not use their products.

Moreover, there is growing trend in male population, Vietnam's excess population of males might reach between 2.3 and 4.3 million by 2050 (vnexpress 2016) This will be an opportunity for the company to increase revenue because man is main consumers of durex manufactures.

2 Economic

According to IPC South Vietnam, economic growth is very fast, the reason for this phenomenon is industrialization and modernization, economic development is accelerating Vietnam GDP has increased sharply over the last decade, from 6,28% in 2008 to 8,46% in 2018(trending economic) Thanks to the outstanding economic development, people living standard were also significantly increased which lead to an increase in the amount of money spent on items Additionally, consumer confidence index is on record growth, making at 129 point in Q3 2018(Nielsen 2018) It means that purchasing power is also high for companies including durex In Nielsen report, consumers always put health and life balance issues first, around 40 to 45% for 2 patterns Durex products can meet both the essential needs of consumers Therefore, this economic development will be an opportunity for durex to increase sales and earn more profits.

3 Natural

According to the 9th grade geography textbook, Vietnam has large area of badan land, and the climate is hot and humid all year round, the weather is less volatile, less windy Thanks to these favorable conditions, rubber production in Vietnam ranks third in the world (tapchicaosuvn 2018) This is an advantage of durex if they want to open a factory in Vietnam because they will have abundant and cheap rubber However, condom brings negative consequences into environment The condom is made from rubber latex which is

indestructible and is not recyclable (ecosalon 2010) Thus, nature will have both disadvantages and advantages for opening durex condom production facilities.

In technological area, Vietnam is a country that tends to catch up with the trend of the world Data from Nielsen report that user-rate mobile accounts occupied 84% and this proportion still has a tendency to increase steadily in the following year Furthermore, more than 70% of Vietnamese people use phones only to social media and surfing Facebook (Soha 2018) This is an opportunity for durex company to promote the image and quality of the products through mass media which results in reaching more potential customers and increase their sales.

5 Political

Political factors have some effect on the operation of Durex in Vietnam, for example: the government in Vietnam continued to associate with Asian UNPF and Pacific Ocean UNPF (United Nations Population Fund) on 11/7/2018 (UNFPA Viet Nam, 2018) and launched national programs (path, 2018) to promote family planning or HIV/AIDS prevention programs which are becoming stronger in Vietnam, so it is an advantage for Durex to gain more profits from selling its condom which is used as a basic solution to prevent sexual diseases or unwanted pregnancy or increasing the amount of customers.

On the other hand, Ministry of Health in Vietnam undirected strengthening the campaigns which distributing free-condoms to the citizens for HIV/AID or sexual prevention (luatvietnam,2018) so it can affect the vending of Durex

Political factors are seen as an opportunity for Durex to lift its revenue up or attract more buyers, but it is also a threat for Durex to face up with free-condoms program from the government.

6 Culture

Culture forces are essential factors that any company must concentrate on to achieve its goal In Vietnam, football is the most popular sport, the fans of football are really huge, Durex understands that and according to a report called “Cách tiếp thị sáng tạo của hãng bao cao su Durex trong mùa World Cup" from Vietnambiz.vn, in the 2018 World Cup season, the brand created some funny and noticeable World Cup advertising campaigns such as “tắt trận này, bày trận khác", “càng vào sâu, càng gay cấn”, “trước phạt sau đền đưa “anh" tới bến" and it attracted 11,6 millions of likes from Vietnamese on Facebook, a very famous social network in the world.

However, the amount of using condoms of people in Vietnam is increasing (laodong, 2018), so it means that Vietnamese are raising awareness of sexual-self-protection day by day, therefore, it is a great sign for Durex to sale more its products.

On the other hand, Vietnam is one of traditional countries so there are still a lot of parents, especially the ones in rural area, are reluctant to share sensitive themes such as sex with children because they suppose it will cause soon sexual curiosity in children (giaoducthoidai,2018) Sex education programs are quite weak in Vietnamese schools, teachers are shy to carefully teach students about this field, hence it the reason why a lot of

young people in Vietnam still lack the knowledges of sex education as well as the methods of sexual self-protection (PetroTimes,2017), (dtinews,2013) So Asian ideas are one of factors could cause trouble for Durex operation in Vietnam.

In addiction, Vietnamese often favor buying foreign commodities (Zing.vn, 2018), especially the commodities from developed countries such as United Kingdom, the US or Korea, therefore, Durex could attract more attention from Vietnamese customers than local condom brands and gain more profits

Cultural factors could be considered as threats when it might affect the sale of Durex bases on Asian ideas But culture influences are also opportunities for Durex when the Vietnamese often favor foreign brands when shopping.

C SWOT Analysis

Deep knowledges of Vietnamese cultures through creating suitable advertising campaigns which could attract a lot of Vietnamese attention Strong coverage when Durex products are available in most of retail stores and websites in Vietnam, especially the ones are well-known such as Circle K, Family Mart, Lazada and Tiki.

Durex with the highest sales in Vietnam to compare with the company's competitors

Smart marketing when Durex has created more attractive and noticeable digital advertises than its competitors.

The types of Durex condom are more diverse than the condom brands from Thai Lan, Turkey and Vietnam

The product packaging is unique and appealing.

The quality is highly accessed Strong reputation when rated as one of the leading condom brands in the world (Technavio blog, 2018)

The price of condoms is high and not suitable with average income of Vietnamese.

The main raw- material of Durex condom production is rubber latex which causes environmental pollution.

Durex’s television advertisements often face with political

Family planning or HIV/AIDS prevention programs from the government is stronger and more popular over the years.

Vietnamese are raising awareness of

There are still a lot of young people in Vietnam lack the knowledges of sex education as well as sexual-self-protection, especially young people in rural area, based on Asian culture.

sex education which includes the methods of sexual self-protection

Vietnamese people favor foreign commodities than local ones

The number of male populations is on the rise

The economic in Vietnam is growing fast so it means purchasing power is stronger.

Social media is popular in Vietnam so Durex could be more convenient to advertise its products on social networks

Higher demand for condom and raising brand-awareness so bringing more profit.

Natural factors in Vietnam could bring cheap and abundant raw-materials for condom productions.

Opening opportunities for Durex to reduce the cost of condom production when locating manufacturing factory in Vietnam.

It is a phenomenon of fast aging population in Vietnam

The percentage of customer buying is still low to compare with the other countries such as Thailand.

Free-condom program from the government is strengthening.

Affecting negatively Durex revenue and not much brand-awareness

Condoms are made by rubber latex are indestructible and not recyclable, so it causes environmental pollution Durex might face up to the rules of environmental protection from the government when using rubber latex to produce its condoms

British company Crown Agent has conducted that 26% of overb170 millions of condoms failed the standards of ISO, WHO and UNFPA.

Customers could suspect about the quality of Durex, hence, Durex reputation would be decreased.

D STDP

I Segmentation

More than 150 countries in the world (include Vietnam) The main markets are Europe, American and Asian.

Distributing also in shopping online webs with authentic copyright such as Shoppe, Lazada, Amazon, etc.

Almost people in cities who have sex education knowledge can access the product It satisfies requirement of both Easterners and Westerners with a variety of sizes and types such as Durex Kingtex for most of Asian size.

Young and inexperienced consumers Older and experienced consumers - Age: 16-24 years old

- Gender: both gender

- Age: over 25 years old - Gender: both gender

- Generation: Y, Z

- Income: working to middle class - Education: high school, university

- Generation: Y

- Income: working to upper class - Occupation: post-graduated, workers

Young and inexperienced consumers Older and experienced consumers - Aware of love as well as sex education.

- Be influenced by advertisement, creative design, etc.

- Open mind.

- There is a tendency to participate in parties or events which have alcohol and sex.

- Price considering.

- Aware of sex life, feeling and health - Having experiences in sex and wanting to try new different feeling - Less price considering.

- Caring about quality and feeling.

Young and inexperienced consumers Older and experienced consumers - Occasion:

+ Normal day.

+ In the time when have high sexual needs (Winter holidays in Western or Valentine’s day etc.).

- Benefit:

+ Avoiding unwanted pregnant.

+ Avoiding social diseases like genital herpes, HIV/AIDS, etc.

- User status: potential/ regular/ first time users - Usage rate: light to medium users.

- Loyalty status: Low to medium because they can be appealed by other products.

- Benefit:

+ Avoiding unwanted pregnant + Avoiding social diseases like genital herpes, HIV/AIDS, etc.

+ Providing many types of products which support users to have good sex life.

- User status: potential/ regular - Usage rate: medium to heavy users - Loyalty status: medium to high.

II Targeting

Following the segmentation table above, Durex offers many types of products with

many different prices for all the customers Thus, “Differentiated Segmented MarketingStrategy” is what Durex chose to develop their own brand Durex attract more customers

than other condom brands because of their diversified products (14 main products) For example, Olo with only 6 products or OK of Turkey with 6 products Moreover, Durex also offers many choices of sizes and scents for customers to freely choose according to their preferences That is the reason why this strategy has helped Durex become the most famous condom company in the world which sold products in more than 150 countries Durex also leads in the manufacturing modern condoms industry That are some main products of Durex which serve both kinds of customers.

Durex Extra Safe is suitable for customers who want to make sure their condom is safe Although it has special design to ensure absolute safety for users, it make customers feel comfortable Durex Extra Safe targets to young and inexperienced customers because they need absolute safety in their sex life.

Durex Invisible with the slogan “Our thinnest ever condom” attracts many customers because of its thin design which gives true feeling for users Durex Invisible also ensure the safety for them That is why it is a good choice for all type of customers Durex now considers Vietnam as a potential market because of a large population and particularly, the number of people in the regular age of sexual activity accounts for 29% of the total population However, Vietnamese Durex utilization rate is only 16% lower than the global figure This is a big challenge

III Differentiation1 Promotion

The biggest difference of Durex compared to other companies is the product promotion strategy by offering Content Publics Relation (Content PR) Durex Vietnam have attracted the attention of thousands of people about the products because of the idea of each advertising as well as post on TV or social media The brand tagline is "Feeling is everything" that is always included in each advertising product The PR team of Durex Vietnam successfully completed their mission and that is evidenced by the way they not only take advantage of special occasion but also include trends on social media For example, in 2019 Hanoi Summit, based on conference’s peace message, Durex marketing team in Vietnam created an advertisement on social media which attracted many people With image of two condoms covering the barrel of the guns, Durex made a trend by the slogan “Prevent stray bullet For peace.”

2 Product

Not only strong in advertising strategy, Durex also pays great attention to their products about high quality Their modern technology production is the reason why the average price of Durex is higher than local condom brand like Thailand or Japan Although the price is quite high, consumers still trust Durex because of Durex’s reputation and quality Durex always tends to go for quality before the quantity Just once in 2018, Durex have their retrieval team revoked the below standard batch It was also proved through proceeds of them in Vietnamese market According to Laodong.vn, total revenue of Durex condoms in Vietnam in 2012 is 20,408,000 USD In 2013, this rate has increased significantly by 30% The total number of condoms Durex consumed in Vietnam market last year reached 4.16 million

3 Packaging

According to The ODM Group, comparing with other condoms brand, packaging is the strength of Durex that appeal as well as absorb their customers In fact, when buying any products, customers always pay attention to the products’ packaging firstly To verify this factor, we made a survey taking opinions from people of all ages The results show that the majority of customers, especially people who at young age, choose packaging as the reason why they are attracted by Durex.