mid term report bath body works candles

Free testers are always available in both stores and online.Dependence on trendy scents: Bath and Body Works'''' business model relies onconsistently introducing new and trendy scents, whic

VIETNAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

MID-TERM REPORT:

BATH & BODY WORKS CANDLES

Lecturer: Trần Thị Thanh VânGroup: 704014 – Shift: 1 (Monday)

HO CHI MINH CITY, 2023

LIST OF GROUP MEMBERS

1.1 Internal Analysis 5

1.1.1 Company Background 5

1.1.2 Company SWOT Analysis 5

1.2 External Analysis 7

1.2.1 Global Market Analysis 7

1.2.2 Vietnam Market Analysis 8

1.3 International SWOT Analysis 11

1.4 Preliminary Assessment 12

II Market Selection 14

2.1 Concentration versus Diversification 14

2.2 Best trade areas 15

2.3 Target Market Identification 16

2.4 Selection of target market 17

III Market Entry 18

3.1 Market entry strategies 18

3.2 Choosing a method of market entry 19

3.3 Selection of clients, distributors and partners 20

3.4 Negotiating conditions 22

IV Product and price strategy 23

4.1 Product & service selection for target market 23

4.2 Standardization and Adaptation 24

Bath & Body Works has been dedicated to providing customers with fragrances they loveand products they can rely on for over 30 years As our products evolve in response to ourcustomers' preferences, we ensure that they contain more of the ingredients they preferand less of those they don't And we will continue to prioritize and apply a disciplinedapproach to ensuring quality and safety.

Bath & Body Works has over 1,900 outlets and produces the vast majority of its goods inthe United States Vendors are chosen based on their capacity and willingness to achieveour safety and quality standards, as well as our labor and environmental ethics Our ownexperts collaborate with our contracted manufacturers to ensure that our quality standardsand sourcing regulations are followed.

1.1.2 Company SWOT Analysis

Products: Offers a wide range of scents which change based on each season of theyear Free testers are always available in both stores and online.

Dependence on trendy scents: Bath and Body Works' business model relies onconsistently introducing new and trendy scents, which can make it challenging toretain customers who are loyal to specific fragrances.

Limited international presence: While Bath and Body Works has a significantpresence in the United States, the company has limited international exposure,which can limit its growth potential in other markets.

High prices: Some customers may find Bath and Body Works' products to be tooexpensive, particularly when compared to other candle brands

Expansion into International Markets: Bath and Body Works has an opportunity toexpand its presence in international markets, where there may be a high demandfor its products.

E-commerce Growth: The company can leverage its strong online presence andinvest in e-commerce to reach a broader customer base.

Personalization: Bath and Body Works can offer personalized scent profiles tocustomers, allowing them to create custom fragrances tailored to their preferences.

Products: New products every season in the year: Releasing new products on aregular basis can help BBW build customer loyalty Customers who are fans of thebrand may look forward to each new product launch and become repeat customers.By releasing new products, BBW can attract customers who are interested in tryingout new scents and product lines This can lead to an increase in sales and revenuefor the company.

Environmental Concerns: Growing awareness of environmental concerns may leadconsumers to choose more sustainable and eco-friendly products over traditionalscented candles, since the products are concerned to be harmful to allergicconsumers as well as the environment.

I.2External Analysis

1.2.1 Global Market Analysis

The global scented candles market size was valued at USD 533.5 million in 2020 and isexpected to expand at a compound annual growth rate (CAGR) of 3.3% from 2021 to2028.

Figure 1 North America Scented Candles Market from 2018-2028 (USD Million)

This market has been consistently developing over the years and is projected to do so inthe future Scented candles are a popular product used to create a calm and soothingambiance all over the world Manufacturers from nations such as the United States, theUnited Kingdom, France, and Germany dominate the market However, manufacturers inAsia, particularly China, have increased manufacturing and exports of this commodity inrecent years.

The scented candle industry is separated into several product categories, including waxcandles, oil candles, and essential oil candles The most popular product is wax candles,which are created from natural components such as beeswax, soy wax, and vegetable oil.Scented candles are extensively used in shops, restaurants, hotels, and other public areasfor a variety of reasons.

To lessen negative environmental impacts, certain new trends in the scented candlemarket are emerging, such as the production of candles from organic components and theusage of candle lamps instead of traditional candles.

To summarize, the global scented candle market is expanding rapidly, and there issignificant room for expansion in the future Candlemakers should capitalize on thisopportunity by enhancing their products and utilizing new marketing channels, such asonline channels, to reach potential clients.

1.2.2 Vietnam Market Analysis

The scented candle market in Vietnam is showing positive development trends with avariety of unique and diverse products Scented candles have become a popular productnot only for creating a relaxing atmosphere but also for beautifying interior spaces.Beeswax and soy wax candles are the most popular and are made from natural ingredientslike beeswax, soy wax, and vegetable oil.

Customers in Vietnam are trending towards seeking scented candle products made fromnatural and health-safe ingredients, especially those using natural essential oils This is inline with the current trend of using safe and environmentally-friendly products.

In addition to health safety factors, price and product quality are also important factorsthat customers are concerned about Therefore, scented candle brands need to meet theserequirements to attract customers and retain their loyalty.However, the scented candlemarket in Vietnam is still small compared to other developed markets This requiresbusinesses to find ways to strengthen promotion and reach customers to promote growthand market development.

Although the potential for development in the scented candle market in Vietnam is great,businesses still face many trade barriers and challenges Regulations and standards forsafety and the environment are mandatory requirements that imported scented candleproducts must comply with This can make it difficult for foreign companies to enter themarket and increase production and distribution costs Therefore, to succeed in thismarket, businesses need to develop unique and high-quality products while alsodeveloping effective marketing strategies to reach customers.

In addition, the scented candle market in Vietnam also faces many other challenges.Competition between brands is fierce, with many domestic and foreign brands offeringsimilar products Businesses need to find ways to develop unique products that meetcustomer needs and improve product quality to beat their competitive rivals.

Overall, with the increasing demand for natural and health-safe scented candle products,the scented candle market in Vietnam has strong potential for future development.However, to succeed in this industry, businesses need to face many trade barriers andchallenges and develop unique products and effective marketing strategies to reachcustomers and differentiate themselves from their competitors.

In January, 2023, the revenue report for the candle market on ecommerce platforms likeShopee, Lazada, Tiki, etc reached around 54 billion vnd in 12 months and compared withthe latest quarter, there is an increase of 18% In the Candle scent market, the store cansell the product with the price range from 600.000-700.000 VND.

Macro Environment:

Economy: From 2016 to 2020, Vietnam's GDP grew by an average of 6.8% peryear This growth rate along with the development of big cities has createdfavorable conditions for the development of the scented candle manufacturingindustry.

Culture: Vietnam is a country with a long tradition of using candles forneurological purposes, including prayer, religious, spiritual However, scentedcandles are new to most Vietnamese Their purposes of usage are more modernsuch as home decoration and relaxation Therefore, it will take some time toeducate and spread the new perspective of candles usage to Vietnamese.

Policy: The Vietnamese government is focusing on economic development,improving the business environment and attracting investors This also createsmany opportunities for scented candle manufacturers and brands to expand theirbusinesses.

Micro Environment:

Market: The scented candle market in Vietnam is growing steadily and haspotential for growth This is because consumer demand is increasing for thebenefits that scented candles offer, such as cleansing the air, creating a feeling ofrelaxation, and reducing stress.

Target customers: Potential customers for the scented candle market in Vietnam arepeople with average incomes and above and have high aesthetic taste Thesecustomers are often looking for innovative and high-quality products.

Competition: The scented candle market in Vietnam has a lot of competition,including well-known brands and local manufacturers To be able to compete inthis market, businesses need to focus on improving product quality, creatingunique products and having effective marketing strategies.

Price: The price of scented candles in Vietnam is quite diverse, from cheapproducts to high-end products Often customers will be looking for qualityproducts at reasonable prices and within their budget.

Distribution channels: The distribution channel of the scented candle market inVietnam includes both traditional retail stores and online channels In particular,online channels are becoming a popular trend with consumers, so businesses needto invest in online distribution channels to increase customer reach.

I.3 International SWOT Analysis

Scent Diversification: Many candle producers are expanding their scent offerings toinclude natural and eco-friendly scents that can appeal to a wide spectrum of consumers.

Dependence on Trends: Because the scented candle business is largely impacted bytrends, manufacturers face difficulties in retaining customers who are devoted to specificscents.

Fragrance Sensitivity: Some consumers may be allergic to scented candles, restrictingproducers' potential customer base.

Seasonal Demand: Because scented candles are frequently connected with seasonalholidays and events, demand varies throughout the year.

Opportunities:

Growth of E-commerce: The expansion of e-commerce is a big potential for scentedcandle manufacturers to access a larger worldwide customer base.

Manufacturers can increase their presence in new foreign markets by capitalizing on theexpanding global demand for scented candles.

To appeal to environmentally concerned consumers, businesses might invest in innovativetechnologies and materials such as natural and eco-friendly smells.

I.4Preliminary Assessment

Bath & Body Works, LLC is an American retail store chain that has sold soaps, lotions,fragrances, and candles since 1990 The brand was founded in New Albany, Ohio and hasalready expanded around the globe.

Figure 2 The growth of interests in scented candles among Vietnamese

The graph above shows the increase of people who are interested in scent candles inVietnam within a year from 2021-2022 The potential market of scent candles is rising inVietnam and it was a good sign to enter the Vietnam market.

Beside the use of lighting, one of the emerging trends in the market is the production andconsumption of scented candles These are candles that have different colors andfragrances that can create a relaxing and soothing atmosphere for the consumers Scentedcandles have gained popularity among a lot of people, especially the younger generation,who are looking for ways to enhance their mood and well-being The current trend ofscented candles is a combination of dedicated design, aesthetically pleasing and qualityassurance as well as health safety for the users

The demand for Scent candles is increasing therefore, it’s necessary to continuouslyinnovate new products to meet the expectation and compete with other brands on themarket In Vietnam, the industry related to aroma products, especially scented candles, isstill in its growing stage and has a lot of potential to develop This is because there are notmany famous foreign brands that have entered the Vietnamese market that create a bigimpact and the competition is low Additionally, the improving economic conditions and

living standards of the Vietnamese people have increased their disposable income andwillingness to spend on luxury and lifestyle products, such as scented candles.

Brand positioning:

II.Market Selection

II.1Concentration versus Diversification

We have chosen to concentratedly invest in one unique store in Ho Chi Minh City,Vietnam This will be the only one store that is official in distributing Bath & Body Worksscented candles.

As Bath & Body Works candles’ target market focuses on urban population, the physicalstore will be opened in Ho Chi Minh City With a population of over 9 million people, HoChi Minh City has the most busy office workers, also known as the middle to high class,living in the area This implies that the launch of the scented candles business can reachmost of its target market as the demand for scented candles is higher than other areas.Another factor that has led us to make our selection on concentrating in only Ho ChiMinh City, Vietnam is that this area is an attractive travel destination for visitors The city

is reported to have over 30 million visitors in 2022, including both domestic andinternational travelers.

The risks that go with concentration investment is such a fast-developing city is that thefixed costs might be higher, including rent and depreciation, and variable costs, such assalary and transportation, Additionally, Ho Chi Minh City is an attractive and potentialmarket, it is certain that many businesses choose to invest in the market, raising thecompetitive level and many challenges for the business to face with.

II.2Best trade areas

Ho Chi Minh City is an attractive destination for global businesses to invest in With ahigh percentage of population in the area, the busy city has several districts It is reportedthat District 1 and District 3 are very busy People often gather in these areas to shop forhigh-end goods Therefore, many luxury brands focus on these areas in order to increasetheir brand awareness This also means that the rent is ranked as the highest within thecity Bath and Body Works’ goal is also to increase their brand awareness, but there arehigh risks for the business’ survival if it rents in the center of the city.

Meanwhile, we have found that District 10, with a lower rent, is also an area where manymiddle to upper-middle shops launch their businesses It is potential for Bath and BodyWorks to spread their brand awareness as well as generating sales in District 10 due to thefact that this is also an area where a lot of middle to upper-middle income people, whichare included in our target customers, come to hang out and shop.

From the information above, we have made our decision to launch a Bath and BodyWorks shop in District 10 as our first step For our long-term goal, the business willquantitatively expand to the center of the city to further spread the brand awareness andreach higher income target customers.