marketing plan for winter melon sunscreen of cocoon tiểu luận cuối kỳ

Cocoon claimed that this product is a good choice for oily-acne skin, which contains winter melon extracts and antioxidant ingredients and advanced and effective broad-spectrum UVB and U

THANG LONG UNIVERSITY

FACULTY OF ECONOMICS AND MANAGEMENT

-*** -MARKETING PLAN FORWINTER MELON SUNSCREEN

OF COCOON

STUDENT’S NAME: ĐỖ THỊ NGỌC ANH - A40445LÊ THỊ THÙY DƯƠNG - A39070CLASS: NMMARKETING.2

LECTURER: NGUYỄN TƯỜNG MINH

Cocoon is a trendy cosmetics brand from Vietnam In response to inadequate domestic products and a large number of overseas competitors, Cocoon officially introduced its first products to the market in 2016 Since then, Cocoon has been actively working to research and enhance its products to offer a new, higher-quality look to the Vietnamese beauty market, bringing profound value to Vietnamese customers Cocoon's cosmetics are not only hygienic but also effective for all types of skin, thanks to the combination of Vietnamese botanical ingredients and scientific knowledge Additionally, Cocoon constantly strives to convey a message about the environment and Vietnamese traditional values in its packaging which is environmentally friendly paper and recyclable

“Winter Melon Sunscreen” was launched on September 3rd, 2022 Cocoon claimed

that this product is a good choice for oily-acne skin, which contains winter melon extracts and antioxidant ingredients and advanced and effective broad-spectrum UVB and UVA protection filters, which provide comprehensive protection from UV damage such as burns, sunburn, and pigmentation

However, there were many controversies after the brand’s sunscreen was launched, such as the product price being even higher than other famous products but the quality was under expectation, or the finish after applying on the face was not smooth or matte as Cocoon claimed

Furthermore, even though it received a lot of attention when first launched, the company's revenue in October 2022 after selling this product did not increase according to the public report of Metric.vn It also means that the sales of this sunscreen are not as high as expected Besides, the “Winter Melon Sunscreen” is not as popular as the previous or existing products, for example, Dak Lak coffee body polish, or Pomelo hair tonic

For the aforementioned reasons, this thesis will analyze the current marketing strategy including the recent marketing environment and the real situation Afterwards, it would present a fresh and effective marketing plan to enhance a more positive perception of the customer to the new product - “Winter Melon Sunscreen” and raise its revenue.

TABLE OF CONTENTS

INTRODUCTIONTABLE OF CONTENTS

LIST OF FIGURES AND TABLES

1/ MARKETING SITUATION ANALYSIS1

2.1 Marketing research (market research) 10 2.2 Targeting market activities (STP) 13

3.2 Taking marketing actions 28 3.3 Timetable for the marketing action plan 32

LIST OF FIGURES AND TABLES

Picture 1.1 PETA congratulated Cocoon on joining Leaping Bunny 4

Picture 1.2 Suppliers of Cocoon 6

Picture 1.3 Packaging of La Roche-Posay, Vichy, MartiDerm, and Cocoon 8

Picture 2.1 Summary mindmap of Cocoon’s market segmentation 14

Picture 2.2 Cocoon’s [BUY 1 GET 1 FREE] Vegan Treatment - Buy Hung Yen Turmeric serum, get “Winter Melon Sunscreen” 21

Picture 2.3 Cocoon x Nha Trang Institute of Oceanography - Conservation, restoration and propagation of soft corals ” 21

Picture 2.4 Cocoon’s opinion and replies to the questions and recommendations of customers 23

Picture 2.5 Cocoon’s website with high-quality images taken from many angles 26

Table 3.1 Timetable for the marketing action plan 32

1/ MARKETING SITUATION ANALYSIS1.1 Macro-environment components1.1.1 Demographic forces

- According to danso.org in 2020, the main population of Vietnam is between the ages of 15-64, accounting for 69.3% of the population, the birth rate is 2.06%, while the average birth rate in the world is 1.25% Moreover, according to a survey by Q & Me (2020) on the consumption and trends of Vietnam's cosmetics market in 2020, cosmetic use habits have differences between age, income and region More than 86% of respondents regularly use skin care products, and 40% of women over 23 take care of their skin daily Women between the ages of 15 and 39 are about 11 million people, accounting for 40% of the female population, so this market segment is very fertile and full of potential According to the poll, women in big cities also spend more on makeup or skin care products The 23-29 age group spends the most on skin care This implies that the best ages for Cocoon's segment are Generation Y and Generation Z - those who are young and have a great interest in beauty products Therefore, the larger population at this age shows the possibility for Cocoon to grow rapidly and achieve large revenue.

- Moreover, more than 12 million VND per family was used for medical care and this is expected to reach about 24 million VND in the next 10 years The COVID-19 pandemic has also just ended after 2 years since 2020, which implies that consumers can have more freedom in purchasing non-essential items for themselves, just because it relates to beauty and healthcare The growing interest in health and beauty is a good sign for Cocoon to work on its pricing plan.

1.1.2 Technological forces

- Today, after more than 2 years of suffering from the COVID-19 epidemic, no one can deny the importance of technology in people's lives Technology also plays an essential role in the cosmetic industry The more advanced the technology, the better the product quality, and the more reputation and revenue the business will receive That's why so many large businesses have spent huge amounts of money on proprietary technologies, such as Foreo's proprietary

T-sonic technology Besides, the development of distribution channels such as Shopee, Lazada or Tiktok - a new social networking platform is also a great opportunity for businesses.

- Cocoon is a cosmetic brand of NATURE STORY company, which specializes in providing beauty products that are produced and extracted from 100% nature Cocoon products have been tested and certified for safety by the Pasteur Research Institute in Ho Chi Minh City, in addition, the company is also certified vegan by international organizations such as Cruelty-Free Inc., The Vegan Society and PETA Moreover, with modern production lines and techniques, based on GMP standards of Vietnam’s Ministry of Health as well as meticulousness and closeness from the stage of selecting, preserving, and transporting raw materials to the manufacturing process, or experimenting from 6 to 12 months for each product, Cocoon shows us that it is very careful in the production process, simultaneously, this cosmetic brand is always up to date with new trends, most advanced ingredients and formulas in the world to improve its products.

- Cocoon's broad-spectrum “Winter Melon Sunscreen” is an example With a breakthrough formula that combines next-generation filters, winter melon extract and antioxidant ingredients, the “Winter Melon Sunscreen” provides broad-spectrum protection against UVA and UVB radiation that causes skin cancer or skin damage such as sunburn, irritation, ageing and skin cell damage The 5 advanced filters included in the product are:

+ Tinosorb A2B: a new generation filter that provides the most effective protection in the UVB/UVA2 range with an absorption peak of 310 nm and enhances the UVA1 range simultaneously

+ Tinosorb S: a new generation broad-spectrum filter with a very broad protection spectrum covering from UVB, UVA2 to UVA1 with 2 peaks against UV 310nm and 345nm

+ Uvinul T150: a new generation filter that offers the highest stable absorption of UVB among all UVB filters.

+ Uvinul A Plus: is a new generation filter against very strong UVA2/UVA1 with the protection of up to 354nm, with excellent protection against radicals.

+ Parsol 1789: is considered the most powerful anti-UVA filter nowadays and is also the one and only filter globally recognized to have a wide absorption range and a very high absorption peak of 357 nm - Moreover, all Cocoon products say no to hundreds of harmful ingredients The

airline regularly updates this list according to the regulations of the Ministry of Health The brand is committed to containing reef-friendly ingredients, no "addictive" corticosteroids, no mineral oils, sulfates, Oxybenzone & Octinoxate, alcohol, preservatives, hydrogen peroxide, luminescent agents

1.1.3 Cultural forces

- To take part in a market, each business needs to understand the social culture of the target market Part of Cocoon's success in the domestic market is due to its appreciation and understanding of culture Each Cocoon product is made from ingredients from Vietnam's nature, for example, Daklak coffee, Hung Yen turmeric, Cao Bang rose, or Ben Tre coconut oil Containing traditional, natural and healthy elements, Cocoon's products easily meet Vietnamese consumers' needs For example, in Vietnamese culture, people often use essential oil from grapefruit peel to wash and grow hair, as well as avoid scalp irritation, use palmyra palm sugar to remove dead cells, turmeric to reduce acne or dark spots, and use coconut oil to nourish their lips Realizing that fact, Cocoon has applied and launched a line of hair care products with grapefruit and inca inchi essences, serums and turmeric masks, Cao Bang rose cleanser, toner, serum, An Giang palmyra palm sugar body polish, or Ben Tre coconut lip balms, This strategy is Cocoon's strength, helping Cocoon's products gain more and more market share in Vietnam.

1.2 Micro-environment components1.2.1 The company (MOST analysis)

- According to Cocoon's statement, their mission is “Mỹ phẩm thuần chay – cho vẻ đẹp thuần Việt” (“Vegan cosmetics - preserve true Vietnamese beauty”)

The company has always had a single goal in mind: to make safe and efficient cosmetic products for everyone by combining familiar traditional nutrient-rich elements such as Pomello, Winter Melon, and Roses, with the most up-to-date scientific knowledge They promised not to formulate any ingredients such as alcohol, parabens, or formaldehyde.

- “Beauty without cruelty” is always Cocoon’s objective The brand not only

focuses on producing organic products but also takes responsibility for protecting nature, especially animals Furthermore, Cocoon is the first Vietnamese cosmetic brand ever to be certified as "not tested on animals" by PETA (People for the Ethical Treatment of Animals).

Picture 1.1 PETA congratulated Cocoon on joining Leaping Bunny via Instagram post.

- Having ample, creative, and vigorous human resources, together with the development of digital technologies, Cocoon’s marketing strategy attends to approach and understand the customers’ needs via social network platforms - To enact those strategies, the company has utilized paid online advertisements

and influencers’ impact; or promotion events For instance, in March 2022, Cocoon ran a campaign called “Yêu từ lần đầu tiên” (“Love from first sight”) on the main Facebook Fanpage, with simple game rules, to introduce and review products Since then, its fanpage has successfully increased interaction

and virality, while also attracting new customers and showing gratitude to the existing ones.

1.2.2 Suppliers

- Cocoon only uses plant extracts purchased directly from local farms or farmers in Vietnam, where they are famous for local specialities to ensure high-quality inputs Cocoon, for example, typically purchases coffee from Dak Lak province, turmeric from Hung Yen province, and roses from Cao Bang province

- Besides using Vietnamese ingredients, the company also imports vitamins and nourishing ingredients from France, Japan, Germany, and other foreign countries.

- Furthermore, Cocoon only collaborates with prestigious or renowned suppliers who comply with their productivity as well as the standards suppliers, to name a few, Kewpie, Ajinomoto, Nikkol Group, etc (The others can be seen in the below picture.)

Picture 1.2 Suppliers of Cocoon

1.2.3 Competitors

- With the price of 395,000 VND (announced officially on the Cocoon website),

“Winter Melon Sunscreen” has to compete in budget with many products or

services in a similar price segment It can be a set of clothes, full series of books, or a few tickets to watch movies at the cinema.

- For Generic Competition, there is an influx of alternatives for sunscreen, to name a few, wearing protective clothing, using an umbrella, and natural sunblock (sesame oil, coconut oil, aloe vera, ).

Although compared to those substitutes, “Winter Melon Sunscreen” is higher in price, it is immediately effective in protecting the skin for many hours against the harmful effects of UVA or UVB rays and air pollution; providing moisture, and nutrients to glow up and prevent the ageing process of the skin Stated by CDC (Centers for Disease Control and Prevention), “Your best bet to protect your skin is to use sunscreen or wear protective clothing when you’re outside - even when you’re in the shade.”

- Analyzing Product Category Competition, a wide range of sunscreen can be easily found with differences in sizes, scents, and forms of application (spray, cream, and balm).

However, sunscreen in form of a spray is not ideal, as people may inhale some of the sunscreen ingredients which may trigger asthma in susceptible men or its propellant As well as balm is formed as a solid bar so it would be quite difficult for customers to apply it on the niche body parts like between fingers - In Product - Form Competition, currently in the market of sunscreen products,

there are many international brands namely La Roche-Posay, Vichy, and MartiDerm, they also offer high-quality products at affordable prices (over

400,000 VND/ 50 ml) The products directly competing with “Cocoon Winter Melon Sunscreen” mentioned above all have quite similar functions of skin

protection against UV rays; and eye-catching and attractive packaging that shows the cohesion and message of the brand (Pictures below)

Picture 1.3 Packaging of La Roche-Posay, Vichy, MartiDerm, and Cocoon - However, the “Winter Melon Sunscreen” of Cocoon becomes outstanding in

Vietnam being the only vegan sunscreen product which can be used for even the most sensitive skin.

1.2.4 Marketing Intermediaries

- Cocoon has no retail brick-and-mortar store The products are mainly sold through resellers on both online and offline platforms, including the Guardian retail chain, Skinfood World, Garden Lixibox Watsons, and Hasaki This not only helps the brand have no difficulty with renting space, especially during the

COVID-19 epidemic but also reaches more target customers thanks to the contribution from the agencies.

- Cocoon also has its official stores on popular online shopping platforms such as Shopee, Lazada, Tiki, and Sendo According to the data from Q&Me's "Cosmetic Distribution Market Report 2022," the E-commerce distribution channel is rapidly growing, with an average of 44% of consumers in the 25-32 age group using it.

1.2.5 Customers

- Personal factor:

+ Age:

● 15-22 years old: Mostly students Currently enrolled in high school or college They like discovering and experimenting with many cosmetics.

● 22-30 years old: Already have a job or have been admitted to a university program or higher High demand for beauty for the requirements of work and social relationships.

● Over 30 years old: They had a stable job They can be businessmen or office workers They are always busy and have many problems to solve every day, so the need for the beauty of this group is less than the other 2 groups.

+ Income:

● Under 5,000,000 VND per month: most of them are students and they still depend on their families Because of the average income, they will use cheap or drugstore products As a result, this group of people is likely to use Cocoon’s products for their appropriate prices following high quality such as Daklak Coffee Body Polish (under 130,000 VND), and Ben Tre Coconut Lip Balms (about 30,000 VND).

● 5,000,000-10,000,000 VND per month: Financially stable, so there is a high demand for beauty to work and for social relations This group of people tends to choose good products with mid-range prices which Cocoon’s fit for.

● Over 10,000,000 VND per month: Their income is high, so they will prioritize choosing high-quality, expensive products, for example, Cocoon Winter Melon Sunscreen.

- Geographical factor:

+ There are different demands for beauty products in different areas The demands mostly concentrate on big, developed cities in Vietnam such as Ho Chi Minh City, Hanoi, Hue, Da Nang, Binh Duong, which are densely populated Moreover, people in these cities are energetic and new-fashioned, and they also have more demands in upgrading their appearance than in other areas

- Social factor:

+ For work needs: people need effective and safe skin protection products because they often have to work in front of blue-light computer screens, or are exposed to a lot of sunlight every day.

+ Because of vegan products: Awareness of environmental protection and animal protection has led to changes in consumer behaviour They increasingly want to use green, clean, environmentally friendly products which are not tested on animals.

+ Because of KOL’s (key opinion leader) recommendation: Customers believe referrals from KOLs is a good product, or they just want to use the same products as KOLs.

- Cultural factor:

+ Vietnam is an agricultural country with a tropical climate Therefore, many years ago, Vietnamese people thought that what is natural is the best, and they used natural products that they can grow or find in nature Nowadays, Vietnamese people also prefer skin protection products that are extracted from familiar natural ingredients, which are skin-friendly and do not cause skin irritation.

+ “Vietnamese people use Vietnamese goods” Since 10 years ago, the government and people have called for Vietnamese people to support Vietnamese goods when imported products are taking a big part of the market, causing difficulties for local people and businesses.

1.2.6 General Publics

- Cocoon has appeared in numerous newspapers and digital magazines, including Elle.vn, vtv.vn, etc The majority of the articles written about Cocoon mention its cosmetic revolution in vegan and eco-friendly production processes This is significant in terms of the Cocoon brand's influence on the media public - By understanding the impact of KOLs, celebrities, and influencers on social

networks, Cocoon has also partnered with many famous beauty experts, mentioning rapper Suboi, and beauty bloggers Dao Ba Loc, Trinh Pham - To the citizen-action public, Cocoon has built a beautiful image in their minds

through a series of actions: signing with social organisations such as AAF (Animals Asia Foundation), participating in humanistic programs (Leaping Bunny - a commitment to not testing on animals of Cruelty-Free International), and participating in the "Plastic Beast" campaign (to reduce single-use plastic waste).

- In addition, Cocoon has also by far organised different events for their employees to both raise the internal publics’ interest and loyalty to the brand.

2/ MARKETING SITUATION OF “COCOON WINTER MELON SUNSCREEN” (7/2022 – 12/2022)

2.1 Marketing research (market research)

a Define the problem and set research objectives

- The issue with “Cocoon Winter Melon Sunscreen”'s current marketing strategy is that there was limited information available on its target market since then the customers were concentrating on price rather than its other extraordinary benefits.

- The research objectives for this marketing campaign should be to identify the target market for the product, understand their preferences and motives for purchasing the product, and develop strategies to effectively reach the target market The last and most important goal is to raise the attention of the public to “Winter Melon Sunscreen” as well as its revenue.

b Develop the research plan

- Marketing data resources were mainly secondary Taking advantage of the convenience of social networks and available reputable data sources such as the General Statistics Office of Vietnam (GSO), the external information was collected quickly and economically while the internal one was gathered from the company’s financial report and revenue in the first half of 2022 Most of Cocoon’s budget and time was spent on studying and upgrading the product so the primary data was not highly recommended even though it is much more efficient.

- Cocoon approached two methods to conduct marketing research for “Winter Melon Sunscreen”:

+ Surveys: are used to assess consumer knowledge and attitudes towards vegan sunscreen, their preferences for certain products and brands whether they are brand switchers or not, and their current sunscreen purchasing habits Cocoon has outsourced online survey platforms such as YouGov and LifePoints to conduct questionnaires with close questions for users to easily select opt These websites are gaining more popularity for offering the users earnings after finishing a survey However, it would become a disadvantage of this method as some users may randomly and superficially answer the questions giving

undiscerning insights.

+ Customer observation through purchasing activities of customers via online shopping platform: One of the main advantages of this method is that it allows customers to provide feedback on the product, allowing the

company to improve the usability and effectiveness of the “Winter Melon Sunscreen” This feedback can also provide valuable insights on

how to better market the product Additionally, it can also provide a way to measure customer satisfaction, as customers are more likely to provide honest feedback when it is anonymous.

However, Cocoon had difficulty in targeting certain customer demographics, as the online shopping platform did not offer enough information on the user’s background or preferences.

- Both males and females at the age of 22-40 were the samples to be interviewed with a number of 400 people in total The ratio of men and women was

150:250 as the women have more interest in cosmetics than men, and they are

much more meticulous The possibility to buy products at a price like "Winter Melon Sunscreen" of the above-mentioned age is higher because they often

have a stable income, a more positive mindset about organic products and are likely to be willing to pay for them The sample was chosen based on the demographics (age and gender) and using non-probability sampling.

- Cocoon used 15% of their revenue in the period of 1/2022-6/2022 to budget for the marketing activities of "Winter Melon Sunscreen", even though as a rule of thumb (experience-based rule): in general, consumer goods businesses should spend 6-12% of their revenue on marketing As the brand has still been new to the market and already introduced a totally brand new product to a niche market, that amount of budget was moderately adequate.

- The time to conduct and process surveys lasted for six months and until now, the brand still continues to gather and update the information, and feedback of the customers every day to enhance the marketing plan.

c Collect relevant data/ information

- The internal information was gathered from sales breakdown, and customers’ inquiries or complaints via emails, hotlines, and social network platforms (Zalo, Facebook) while the external data was reviews and feedback on private groups and online shopping platforms; or census from GSO.

- The disadvantage of secondary data is that it was not detailed and did not meet the requirements of the research plan which is targeting a customer group Some surveyees might give a biased answer, or the data collector himself took notes insufficiently, possibly biased, and was being untruthful for several personal reasons.

d Analyze findings

- With the support of statistical software such as SAS, and Microsoft Excel, Cocoon’s marketing department rapidly edited, encrypted and analyzed the data; then interpreted those thoroughly and comprehensibly in a marketing research plan.

e Implement and evaluate marketing actions