tiểu luận urniture products exporting planfor viet hoang company

Finally, the company''''s mission is toprovide high-quality furniture goods that match the demands and preferences of the target market,while also achieving long-term growth and profitabili

FURNITURE PRODUCTS EXPORTING PLAN

FOR VIET HOANG COMPANY

Group 2 Nguyen Vu Thang

Vu Le Nguyen Chuong

IB3004E_46KQT: Import Export Business

Nguyen Thi Phuong Thao, MSc

The University of Danang, University of Economics

Danang, Vietnam April 26, 2023

TABLE OF CONTENTS

1 OVERVIEW OF VIET HOANG 3

1.1 Viet Hoang’s main business activities 3

1.2 Short term goals 3

2 PRODUCT AND MARKET SELECTION 3

2.1 Product selection 3

2.2 Market selection 4

2.3 Target customer group 6

3 PRODUCT ADAPTION 6

3.1 Voluntary adaption 6

3.2 Mandatory adaption 6

4 EXPORT CHANNELS OF DISTRIBUTION 7

5 EXPORT PROMOTION 7

5.1 Export Promotion 7

5.2 Plan to contact buyers 8

6 PRODUCT PRICING 9

REFERENCES 10

LIST OF FIGURES Figure 1| Average tariff applied by selected markets on imports from Vietnam for product 940360 5 LIST OF TABLES Table 1|Top 3 product related to furniture with the highest value imported in 2021 3

Table 2|Top countries exporting product 940360 in 2021 4

Table 3| Importers of product 940360 from Vietnam 4

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1.1 Viet Hoang’s main business activities

Viet Nam is one of the world's top furniture exporters, having a reputation for manufacturing high-quality goods at reasonable rates Despite a challenging last year due to the pandemic, the country's exports of wood and non-timber forest products reached US$15.6 billion in 2021, an increase of 18% over 2020 In that year, wood and product exports were $14.5 billion, a 17.2 percent increase over 2020 To capitalize on the chance for growth in the sphere of furniture export, our objective is to deliver high-quality, creative furniture solutions to clients globally while adhering to environmental and social responsibility standards Viet Hoang‘s core products are wooden chairs, wooden tables, wooden beds, Upholstered sofas, and wooden cabinets

1.2 Short term goals

Viet Hoang Corporation establish a short-term aim of extending their product offerings by inventing new plastic items that are in great demand in the market or enhancing existing products to fulfill the demands and preferences of customers Furthermore, our company also set short-term export goals such as conducting market research to identify potential new markets, developing export partnerships, ensuring compliance with export regulations and standards, increasing brand awareness, enhancing logistics capabilities, and providing excellent customer service in export markets to build customer loyalty and satisfaction By fulfilling these objectives, the firm will be able to construct a solid platform for exporting its goods to new and existing countries, optimize logistics for timely and effective delivery, and expand its reputation and client base in the worldwide market

2.1 Product selection

As can be seen from the table below, product with HS code 940360 accounted for the highest importing value in 2021, at 30,362,936 USD, however, of the three selected categories, 940320 has the biggest annual growth in value during 2017-2021 and 2020-2021, accounting for 8% and 34%, respectively When it comes to exporting, 940360 and 940320 are two items with a lot of promise

imported

in 2021 (USD thousand)

Annual growth

in value between 2017-2021 (%, p.a.)

Annual growth in quantity between 2017-2021 (%, p.a.)

Annual growth in value between 2020-2021 (%, p.a.)

940360 Wooden furniture

(excluding for offices,

kitchens and bedrooms, and

seats)

Import Export Business - 46KQT - Group 1

940320 Metal furniture (excluding

for offices, seats and

medical, surgical, dental or

veterinary

940390 Parts of furniture, n.e.s

(excluding of seats and

medical, surgical, dental or

veterinary

Source: (Trade Map, n.d.) Furthermore, Vietnam placed third in the world in terms of export value in 2021, with 2,477,698 USD sold, accounting for 7.4% of global exports Wooden furniture (excluding for offices, kitchens, and bedrooms, and seats) was the principal product exported by Vietnam in the HS code 9403 product category (Trade Map, n.d.)

Rank Exporters Value exported in 2021 (USD thousand) Share in world exports

(%)

Source: (Trade Map, n.d.)

As a result, Viet Hoang's chooses to export product 940360 Wooden furniture (except for offices, kitchens, bedrooms, and seats)

2.2 Market selection

Company's objective is to optimize profitability and development by focusing on regions with strong demand for their products, attractive economic circumstances, and a legislative framework that promotes international commerce The company's goal is to establish a strong market presence

in the target market by cultivating a loyal client base and streamlining logistics and distribution methods to assure timely and cost-effective product delivery Finally, the company's mission is to provide high-quality furniture goods that match the demands and preferences of the target market, while also achieving long-term growth and profitability in the global furniture industry

Imported Value and Quantity

The United States is the world's biggest market for Vietnamese wooden furniture, with an import value growth rate of 17% in the 2020-2021 period, a relatively low growth rate when compared to the United Kingdom and Canada, which have growth rates of 29 and 35%,

respectively According to the chart below, the United States has the highest growth numbers in import value and volume in 2021, however the unit value is the lowest compared to the other nations in the table, at just 95 USD/Unit Because of the negative decline in import value in the year 2020-2021, Japan is not a prospective market for Vietnamese wood furniture The growth rate of export value to the United States and Canada in the years 2017-2021 and 2020-2021 is higher and more positive than in other markets As a result, the US and Canada are prospective markets for Vietnamese wood furniture

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Importers Value

imported

in 2021

(USD

thousand)

Unit value (USD/

Unit)

Growth in imported value between 2017-2021 (%, p.a.)

Growth in imported quantity between 2017-2021 (%, p.a.)

Growth in imported value between 2020-2021 (%, p.a.)

Ranking of partner countries

in world imports

United States

of America

United

Kingdom

Source: (Trade Map, n.d.)

Tariffs

Source: (Market Access Map, n.d.) Only the Canadian market has a 4.7% MFN tariffs, and the remaining four markets all have an effectively applied tariffs rate of 0% and a 0% MFN tariffs

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2.3 Target customer group

For the US, UK, France, Canada and Japan markets, our company mainly targets the following:

Homeowners: Many people in these nations take pleasure in their houses and are

ready to spend in high-quality, long-lasting furniture

Interior designers: These nations have thriving interior design industries, and

designers frequently deal with high-end clientele searching for one-of-a-kind and customized furnishings

Retailers: Countries such as the United States, the United Kingdom, France, and

Canada have extensive retail markets that include big-box chains, specialist stores, and online marketplaces that are always looking for new and innovative furniture goods to give their consumers

Hospitality industry: The tourist industries in the United States, Canada, and the

United Kingdom are all substantial, and hotels and resorts are always in need of excellent furnishings for their establishments Japan and France both have booming tourist industries, and there is a considerable demand for high-end hotel and resort furnishings

3.1 Voluntary adaption

Following market research in the United States, Unite Kingdom, France, Canada, and Japan, The company identified a point of convergence between these local markets in that they have a significant preference for furniture made with sustainable and eco-friendly procedures They also favor furniture designs that are one-of-a-kind and have a rustic vibe to them In addition, in order to meet the expectations of these markets, the furniture manufacturer decided to make voluntary changes to its products They begin by utilizing sustainably sourced wood and environmentally friendly coatings on their furniture They also change their designs to create a more rustic and unusual appeal, which is increasingly popular in all of the mentioned markets The furniture manufacturer is able to offer its items to the markets and suit the distinctive wants of local consumers by making these voluntary adjustments

3.2 Mandatory adaption

In order to avoid the spread of pests and illnesses transmitted by wood items, the United States has strict laws in place for importing wooden furniture The United States Department of Agriculture (USDA) and the Animal and Plant Health Inspection Service (APHIS) enforce these restrictions

In terms of Packaging requirements Wooden furniture products must be packaged in a way that prevents any pests or diseases from entering the US This may include fumigation or heat treatment of the packaging materials

About Documentation requirements: Importers must provide documentation that shows that the wooden furniture products meet the US regulations, including proof of treatment and packaging For example: phytosanitary certificate, treatment certificate, customs declaration

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Viet Hoang Company uses indirect channels of distribution for exporting wooden furniture to the US market by the following reasons:

Our company choose partnering with an export management firm and trading organization, because they would use the intermediary's existing infrastructure and skills to handle the majority of the sales and marketing efforts The intermediary can utilize their own sales team to advertise the wooden furniture goods to potential consumers in the United States, while also handling the majority of customer support enquiries on behalf of the firm This means that the Viet Hoang will not need to hire as many more employees, if any at all, saving them a substantial amount of time and money

The US market can be complex and challenging for foreign companies to navigate due to different regulations, cultural differences, and competition By working with an intermediary, the wooden furniture exporter can benefit from their expertise in the local market, established relationships with customers and suppliers, and their logistical capabilities

Additionally, an export management company or trading company can help the wooden furniture exporter to manage the risks associated with exporting, such as non-payment, shipping delays, or quality issues They can also provide valuable services such as market research, product localization, and marketing support to help the wooden furniture exporter to effectively compete in the US market

Using indirect channels of distribution can also be more cost-effective for the wooden furniture exporter since the intermediary can offer economies of scale and reduced transaction costs owing to their existing infrastructure and market knowledge

5.1 Export Promotion

Customers who purchase a significant amount of wooden furniture goods would be offered discounts by our firm The discount rate may vary based on the order volume

Trade exhibitions allow the company to display your items to potential clients, connect with purchasers, and network with other industry professionals Participating in relevant trade fairs in key export countries may aid in the promotion of wooden furniture items and raise brand recognition

Customizing items to match the individual demands and preferences of clients in target export

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countries may help distinguish wooden furniture from competitors and boost customer loyalty

A solid online presence is crucial in today's digital world Exporters can develop a website to exhibit their products, communicate with potential consumers and advertise their products on social media, and participate in online marketplaces to reach a larger audience

5.2 Plan to contact buyers.

The company looks into the US market for potential customers, such as furniture retailers, wholesalers, and distributors We also find potential customers through online marketplaces and directories

Gather potential consumers' contact information, such as email addresses, phone numbers, and postal addresses, once you've found them We may also connect with potential clients through social media and internet channels

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The company compiles a list of possible clients and stores our contact information in a database or spreadsheet This will make tracking outreach activities and following up with clients easier

We send them an introduction email that introduces the firm and our wooden furniture goods The business highlights the unique features and advantages of your goods, as well as any applicable certifications or accolades, in the email

Follow up with a phone call to the consumer after sending the initial email Introduce our company, we also remind them about the email, and ask if they have any questions or want to learn more about firm’s goods

If the consumer is interested in learning more about wooden furniture, we will set up a meeting or provide a product demonstration This can be accomplished in person, over the phone, or through video conferencing

If the client expresses an interest in making an order, we will provide a proposal or quote explaining the purchase's specifics, such as pricing, shipping, and delivery

Follow up with the customer after receiving the proposal or estimate to see if they have any questions or concerns This is also an excellent time to discuss any possible customisation or special requests

We must carefully analyze product price based on the variables stated below, as this is an incredibly critical problem that directly influences the firm's success or failure of the company, because it lacks expertise in the overseas market In addition, we must constantly change the product's pricing depending on consumer input and report on the quality and quantity of items supplied to customers Factors for product pricing:

Seasonal demand: Our company can choose to raise prices during the peak season for

outdoor furniture to capitalize on increasing demand During the off-season for outdoor furniture, manufacturers may opt to decrease prices to encourage sales and clear inventory However, seasonal demand can fluctuate depending on a variety of factors, including geography, temperature, and consumer trends As a result, we must continuously watch market changes and alter their pricing plans as needed to maintain competitiveness and profitability

Brand image: We concentrate on manufacturing high-quality hardwood furniture that is

sturdy, beautiful, and practical This will assist the organization establish itself as a credible and trustworthy producer of high-quality items Additionally, the firm creates an efficient marketing and branding plan for the US market that successfully conveys the company's beliefs, mission, and unique selling factors to customers

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Target market: Consider the purchasing power of potential market clients This can aid in

identifying the target market that is most able and willing to pay for wooden furniture

Market trends: The firm exporting wooden furniture might uncover chances for creating

and marketing items that are in line with the current demand and preferences of clients in the target market by carefully examining market trends To maintain sustained success in the export market, it

is critical to keep current on industry developments and change marketing and sales strategy accordingly

Competitive Advantage: Our firm could separate itself from rivals and boost its chances of

success in the target market by concentrating on these criteria and developing a distinctive competitive advantage It is critical to undertake market research and competitive analysis to discover areas where the firm may differentiate itself and provide value to customers

Production cost: ($ 50,000/tons x 15

tons/container)

$ 750,000

REFERENCES

Market Access Map (n.d.) Retrieved April 26, 2023, from

https://www.macmap.org/en/query/compare-market?reporter=All&partner=704&product=940360

Trade Map (n.d.)

Retrieved April 10, 2023, from

https://www.trademap.org/Country_SelProduct.aspx?nvpm=1%7c%7c%7c%7c%7c940360%7c%7c

%7c6%7c1%7c1%7c2%7c1%7c1%7c2%7c1%7c1%7c1

Trade Map (n.d.)

Retrieved April 10, 2023, from

https://www.trademap.org/Country_SelProductCountry.aspx?nvpm=1%7c704%7c%7c%7c%7c940360%7c

%7c%7c6%7c1%7c2%7c2%7c1%7c%7c2%7c1%7c1%7c1

Trade Map (n.d.)

Retrieved April 10, 2023, from

https://www.trademap.org/Product_SelProductCountry.aspx?nvpm=1%7c704%7c%7c%7c%7c9403%7c%7c

%7c6%7c1%7c1%7c2%7c1%7c1%7c1%7c1%7c1%7c1