final report marketing plan for cocoons vegan sheet masks

Vegan cosmetic brands are increasingly present in the Vietnamese market, and Cocoon Vietnam is one of them.. According to Market segmentation, the target market for Cocoon vegan sheet ma

THE MINISTRY OF FINANCE

FACULTY OF MARKETING

- -

Class: CLC_19DMA04 Course code: 2021702006004

FINAL REPORT

MARKETING PLAN FOR COCOON’S VEGAN SHEET MASKS

Major: MARKETING

Specialized: MARKETING MANAGEMENT

Ho Chi Minh city, July 3rd 2021

THE MINISTRY OF FINANCE

FACULTY OF MARKETING

- -Class: CLC_19DMA04 Course code: 2021702006004

Ho Chi Minh city, July 3rd 2021

i

CONTENTS

List of Figures iii

List of Tables iii

Executive Summary iv

3.3 Positioning & Estimate market share 5

4 Marketing Mix Strategies 6

iii

LIST OF FIGURES

Figure 1: Conceptual map for vegan sheet masks in Vietnam skincare industry 6 Figure 2: Packing of Cocoon’s vegan sheet masks 7 Figure 3: Elastic demand of Cocoon vegan sheet masks 9 ’s Figure 4: Timeline summarizing marketing activities 2022 10 Figure 5: Budget for promotion activities of the first year i

LIST OF TABLES

Table 1: SWOT analysis for Cocoon Vietnam 3 Table 2: Market segmentation of Cocoon’s vegan sheet mask 4 Table 3: Analyze competitors price 8

iv

EXECUTIVE SUMMARY

The purpose of this report is to provide a marketing plan for the launch of Cocoon's vegan sheet masks in the Vietnamese market We implemented an online survey with 30 samples to make the plan more objective Vegan cosmetic brands are increasingly present in the Vietnamese market, and Cocoon Vietnam is one of them Cocoon is the first Vietnamese cosmetic brand approved by Leaping Bunny - Cruelty Free International to commit to not testing on animals The SWOT analysis shows that Cocoon is also a formidable competitor compared to the long-standing and famous vegan cosmetic brands in the Vietnamese market Next, we can compete effectively with other sheet masks because we save on raw materials and research on essence by inheriting the formula from the jar masks that the company has launched before But in terms of sheet mask production, Cocoon is still quite young compared to other brands because this is our first time launching this product Besides, because of the impact of the COVID-19 pandemic, it will cause difficulties in the product production process, as well as the pandemic making people not interested in beauty needs In terms of market segmentation, 17-24 years old women and men are selected for our targeting market, to take advantage of young people's growing interest in environmental protection lifestyles This target group has average disposable income and their lifestyle and behavior that they are increasingly concerned about social issues such as the state of the environment According to the positioning map, Cocoon will position itself at a lower price than other brands to gain a competitive advantage as well as match the company's target segment Marketing goal: 35% of brand awareness will be achieved Gross Profit Margin 2% will be achieved in 1-year period The financial goals are to achieve the

company's first year revenue of 6 billion VND, keep the break even in the first year and

-increase the profit margin to 10% by the beginning of the second year To achieve the desired, strategies include product & brand strategy, service, pricing, distribution and communication To achieve the desired, strategies including product and brand strategy, service, pricing, distribution and communication are implemented and controlled strictly and correlated with each other.

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1 INTRODUCTION

Cocoon is a 100% pure cosmetic product with a clear source, safe for the skin, absolutely not tested on animals and vegan registered by The Vegan Society - a long-standing educational charity around the world, providing information and guidance on various aspects of vegan living Brand's desire is always to bring nutritious and useful cosmetics from nature to their customers So, to take a new step forward and create a new opportunity for Cocoon, the brand will launch Cocoon's vegan sheet masks The scope of this report is based on research on the skin care and face mask industry in Vietnam

Mission: “Bringing you healthy, youthful and vibrant skin from simple and

close ingredients that you eat every day.” Marketing Objectives:

- Coverage at more than 300 current retail stores of Cocoon

- When mentioning Cocoon, customers will immediately think of the leading number of vegan cosmetics in Vietnam

- Increase 35% brand awareness among target customers

2.1.1 Analysis of vegan skincare industry in Vietnam

Industry revenue and growth

Vietnam skin care products market size reached $854.3 million in 2019 and is expected to reach $1,922.4 million by 2027, achieving a CAGR of 11.7% from 2021 to 2027 The skin care products market has an opportunity to increase revenue by $1,154.25 million between 2020 and 2027 (Kale & Deshmukh, 2020) Rising disposable income and growing young population are the key factors driving the product market Vietnamese skincare products grow In which, the most potential customer segment in the future is Generation Z, accounting for 39.08% of the total population Overall, these factors have increased the demand for skincare products by domestic consumers

Industry Attractiveness

Porter’s five forces model is applied to analyze the sheet masks industry’s attractiveness in Vietnam Appendix 1, it shows that the nature of competition in sheet masks industry contributes to a fast pace movement in Vietnam Hence, the sheet masks industry is considered to be attractive as the industry is expected to continually grow

2 2.1.2 Industry trends

First, cosmetic and skincare industry has been growing significantly along with the rapid improvement in living standards in Vietnam Consumer tastes and preferences with growing disposable income raise the level of sophistication towards premium skincare products Premium brands become more attractive, while mass skin care products decline Skincare producers have to increase their production volume to serve the demand (Euro monitor International, 2018) The key success factors (KSF) for sheet masks industry in Vietnam is provided in Appendix 2

Social Analysis

In general, Vietnamese people have the psychology of buying foreign goods not only because of the quality and design but also the brand reputation of foreign businesses, and at the same time, Vietnamese goods have not yet created trust among consumers for many reasons In the minds of young people of the 9x, 10x generation, Vietnamese cosmetics are images of poorly advertised cream mixes, and cosmetics of unknown origin widely sold on the market This has greatly affected the confidence of Vietnamese consumers This is a concept that adversely affects Cocoon, especially those directly related to skin care products

Technological Analysis

Elements of advanced and modern cosmetic production lines will be an important basis to help cosmetic manufacturing and processing units get the best quality products, bringing high efficiency to consumers Cocoon products are born in a modern, closed line, meeting the standards according to cGMP of the Ministry of Health of Vietnam

Environmental Analysis

Vietnam's climate is hot and humid, with monsoon natural disasters frequently occurring This greatly affects the preservation and transportation of Cocoon's products

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On the other hand, air pollution in Vietnam is quite serious and working outdoors or in front of a computer for a long time, ultraviolet rays and computer radiation are very harmful to the skin Therefore, it is very important to take care of the skin to protect the skin

Legal Analysis

Decree 93/2016/ND-CP stipulating conditions for cosmetic production This is considered an advantage for the pharmaceutical-cosmetic business in general and Cocoon in particular, when meeting the Government's regulations, consumers will trust the products produced by Cocoon

Decree 98/2020/ND-CP stipulating penalties for administrative violations in commercial activities, production and trading of counterfeit and banned goods and protection of consumers' interests This is both beneficial for consumers to avoid counterfeiting and to avoid losses to Cocoon

2.3 Competitors

Appendix 3 details a description of Cocoon's direct competitors Cocoon's indirect competitors are mask brands that, although not vegan, still meet the skincare needs of customers 4 brand well-known competitors in the Vietnamese market are Vedette, The Face Shop, Naruko, and Mediheal

2.4 SWOT Analysis

SWOT analysis is indicating the combination of Market strength, weakness of the company and opportunity, threat of the competitors in the competitive market of the world Details of the product's SWOT will be mentioned in Appendix 4

Table 1: SWOT analysis for Cocoon Vietnam

- Cocoon is also considerable competition compared to other celebrated and long - standing vegan cosmetic brands in Vietnam market

- Cocoon’s products gain cGMP standards of the Ministry of Health of Vietnam and certified “Animal test-free & Vegan” by PETA

- Cocoon is the first Vietnamese cosmetic brand to be approved by Leaping Bunny - Cruelty Free International's

commitment to not testing on animals - Dense distribution network with up to

300 sales points at Watson, Guardian,

- New brand, unfamiliar with some customer parts

- Have not advertised the product widely

4 Hasaki website, even e-commerce platforms, etc

- Cocoon was born in the era of increasingly advanced technology to ensure product safety and cost savings - The 9x and 10x generations in Vietnam are increasingly leading a more active and modern lifestyle, easily accepting new things as well as new brands like Cocoon

- The environmental situation is increasingly alarming, so the eco-friendly lifestyle is on the throne - Air pollution, ultraviolet rays and

computer radiation motivate people to put more effort in taking care of their skin

- The negative impact of the 19 pandemic will make some people no longer interested in skinning care

Covid Because of incalculable appearance of unknown origin skin care products from Vietnamese businesses, Cocoon will be equated with those brands

- Vietnam's climate is hot and humid, and monsoon disasters often occur that significantly affects the preservation and transportation of Cocoon's products

3 SEGMENTATION & POSITIONING STRATEGY 3.1 Market segmentation

Market segmentation could be classified by four segmentation variables; geographic, demographic, psychographic and behavioural segmentations

Table 2: Market segmentation of Cocoon’s vegan sheet mask

Demographic

Life-Cycle stage

Young, high school kids and university students

Single, in labour force or/and newlyweds

Mature women and men with family and children

Income Limited income High disposable income

Higher disposable income and wealthy

5 Concerns and

consciousness social problems Eco-friendly lifestyle Highly influenced by trends, family and friends’ opinion and media

younger and healthier looks Prefer products with natural ingredient

knowledge of skincare, especially in terms of restorative properties Likely to stick with used products for a period of time

Behavioural Benefit

sought

Skin beauty, relaxation, more confidence

Skin maitain, relaxation, more confidence

Skin improvement, anti aging- , more confidence

Loyalty Tend to switch to

cheaper products

Loyal to one or several brands that served their satisfactory and used

Loyal to one specific brand that served their satisfactory and used for over a period of time

Price sensitivity

High Seeking for the products with low prices that suitable with their incomes

Medium Seeking for premium products than mass products

Low Seeking for an optimal and high-end product

3.2 Target Market

Market targeting strategy: Differentiated marketing This allows the company to consider and focus on a certain segment for greater efficiency According to Market segmentation, the target market for Cocoon vegan sheet masks is “Segment A” or 17 to 24-year-old females and males who have low to medium disposable income With pure Vietnamese ingredients from nature combined with a unique formula, Cocoon stands out in the market and has a lower price than competitors Especially, these people are interested in social and environmental problems That suggests that they are willing to spend money on vegan masks that will suit their pocket They can be influencers or people who are easily influenced by influencers So, their spending decisions will be heavily influenced by the mode of communication Hence, the evidence above illustrates that the target segment chosen for Cocoon's vegan sheet masks will be the best suitable and attractive for this target audience

3.3 Positioning & Estimate market share

These days, there are several vegan cosmetics brands already existing in the Vietnam market But only Klairs, Innisfree and The body shop have produced vegan sheet masks Based on the primary data source (30 samples online survey), the position of Cocoon’s vegan sheet mask in the skincare industry will be discussed by using the perceptual map as shown in Figure 1

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Figure 1: Conceptual map for vegan sheet masks in Vietnam skincare industry

According to Figure 1, we will price Cocoon's sheet masks lower than other brands to match our targeting segment Customers will benefit from purchasing high quality Cocoon’s sheet masks at reasonable price, whereas other brands offer customers with quality products but may be higher price Cocoon's vegan sheet masks will be able to compete in the industry by positioning itself as a niche market to gain a competitive advantage through its strong belief and value in the benefits of natural ingredients that do not contain any ingredients partly from animals and not tested on animals

Positioning Statement

"From familiar natural ingredients that are carefully cultivated and harvested by the hands of Vietnamese farmers, Cocoon creates and develops 100% vegan skin care products."

4 MARKETING MIX STRATEGIES

Cocoon aims to focus on both women and men's beauty and improvement of their skin In the marketing strategies, Cocoon’s vegan sheet masks that will enter vegan skincare market in Vietnam will be analyzed

4.1 Product strategy

4.1.1 Five product levels

Five products level (provided in Appendix 5) will be identified to satisfy customer’s needs The core benefit of Cocoon’s sheet masks is improving human beings’ quality of skin and more beauty, and its basic product is its natural ingredient with 100% vegan skincare products With the mission: “Bringing you a healthy, youthful and vibrant skin from simple and close ingredients that you eat every day.” 4.1.2 Product’s attributes

Product quality

Using natural cellulose masks as raw masks: is a line of masks made from cellulose material With the orientation to create environmentally friendly products, the cellulose

Innisfree Klairs

Cocoon

Low price Low brand

awareness The body

shop High price

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material that Cocoon uses this time creates a line of Cocoon vegan sheet masks that are biodegradable when buried in the soil The product does not use parabens and "addictive" corticosteroids, does not use mineral oil, hydrogen peroxide, triclosan, phthalate, luminescent substances 100% of products before being put on the market have to go through a process of 12-24 months of testing by tests in the laboratory (in-Vitro test) or on volunteers (in-Vivo test)

Product Features

The difference from UNIQUE DESIGN: strong mask structure, 3 layers of

ultra-thin, close to the face This is also an innovative design that can hold more solution than a regular sheet mask

The difference from superb AFFECT: 80-100 nm diameter biocell fiber should

be easy to apply to the skin without much manipulation, comfortable movement during use

The difference from SUPPLYING SUPPLY: natural bio-nano structure should

be able to retain 10 times more nutrients than conventional fiber/sheet 4.1.3 Value propositions product

Differences from the old products of the enterprise:

With Cocoon's product line, this new product collection: "Sheet Mask - Cocoon" that our brand has not released to customers Adding a new product that enriches the product line of the business

Differentiate from other competitors' products:

Cocoon initially conquered customers thanks to the Vietnamese spirit in each product The brand continuously launches 100% vegan products that take advantage of available ingredients natural from Vietnam such as squash, Dak Lak coffee, Ben Tre coconut oil, Cao Bang rose, etc This has created a very "Vietnamese" Cocoon, not confused with any other brands on the market

4.1.4 Packaging product

Figure 2: Packing of Cocoon’s vegan sheet masks

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Packaging: The outer packaging of the Cocoon sheet masks has a minimalist

design, using images of pure Vietnamese ingredients such as green squash, rose petals, and turmeric Users will easily feel the Vietnamese soul through the packaging On the top left of the packaging is the Cocoon logo

Color: Gold color represents luxury, creativity and belief in a bright future of Vietnamese cosmetics

Labeling: provide complete information about ingredients, instructions for use,

expiry date as well as the place of manufacture 4.1.5 Product support services

Fresh customers' service

Staff will be allocated in Cocoon shop to help them get to know about the product and to understand how to use the product When purchasing over 3,000,000 VND or US$160.42, customers will become Cocoon’s VIP own special right to get loyal service

Loyal customers' service

Loyal customers can get a loyal card in order to collect points annually Cocoon will provide a free facial treatment course for a certain point with specific staffs In addition, if it got customers’ permission, Cocoon’s staffs could get their email addresses or mobile phone number Then they can follow up on customers’ satisfaction after using Cocoon’s vegan sheet masks Especially, the company will send the products as gifts on loyal customers’ birthday

4.2 Pricing strategies

Our goal is to maximize market share and be the product-quality leader in the vegan sheet masks market So, we choose penetration pricing strategy to produce sheet masks at a cheaper price than similar products in the market

4.2.1 Penetration pricing

Table 3: Analyze competitors price

We will choose going-rate pricing to pricing method The firm bases its price largely on competitors’ prices (Table 1) So we decide to choose the price for a new product:

Retail price: 31,000 VND/ masks

This strategy helps Cocoon find new customer segments and identify potential future customers If a higher sales volume will lead to lower unit costs and higher long-run profit Besides, a low price will discourage actual and potential competition After a long time, the market accepts and gets used to the new product, Cocoon will start to raise the price to increase its position and profit, but still at a mid-range price to confirm the image orientation of Cocoon with target audiences - brand dedicated to providing the best quality vegan products at a mid-range price point

9 4.2.2 Bundle Pricing

Using mixed product bundle pricing, we combine several products and sell them at a lower price than if the products were purchased individually We will use this pricing strategy for mixed combos – 5 products combos and Tet combos

4.2.3 Promotional Pricing

Figure 3: Elastic demand of Cocoon’s vegan sheet masks

After the product launches, Cocoon uses this strategy to stimulate customers to buy the product For example, 10% off, buy one gets one free, gift cards; 5% paying by e-wallet

4.3 Distribution strategy

Cocoon uses push strategies to promote products to increase recognition as well as help customers find Cocoon products easier Our channel strategy is to use selective distribution, marketing Cocoon's vegan sheet masks through well-known stores and online retailers During the first year, we will add channel partners until we have coverage in all Vietnam markets

4.3.1 Online shopping website & Cocoon Vietnam official website

First, some well-known cosmetics’ website such as Watson, Guardian, Beauty garden and Hasaki are perfect places to send free samples to customers It is also good to develop a phenomenon where supply is far away less than demand

4.3.2 Agency

Take advantage of Cocoon's distribution system at more than 300 points of sale at cosmetic distribution systems nationwide In addition, we need alliances or cooperation with agents such as beauty salons, spas and health centers Placing and selling face masks in these locations will be a good opportunity to expand the sales channel 4.3.3 E-commerce

With the unpredictable situation of the Covid-19 pandemic, it is very necessary to put sheet masks products on Shopee, Lazada, Tiki, Sendo to reach our target group of men and women from 17 to 24 years old

10 4.3.4 Marketing communications strategy

To promote the sheet mask products, Cocoon will use Integrated Marketing Communications (IMC) to combine a variety of promotional methods to strengthen the position of the new product and increase product awareness to the optimum level 4.3.5 Advertising

Advertising on traditional channels will mostly be a waste of money, because most messages have to be paid if businesses want to reach consumers directly on a large scale, so Cocoon chooses this type of advertising newer, focusing on social networking sites such as social networks including Facebook, Instagram and YouTube With the mission of saving costs compared to traditional methods and maintaining brand awareness and communicating messages, images, upcoming promotions in Cocoon's In this way, Cocoon can bring new products to consumers fastest and increase coverage in the market

4.3.6 Sales promotion

Thanks to modern advertising campaigns, consumers can stay up to date with this year's promotions from businesses With promotions, Cocoon will focus mainly on major holidays such as Lunar New Year, National Day, Labor Day, etc or reduce prices by time frame and collect feedback from customers This will both promote new product images to customers, increase recognition, and continuously repair, improve and bring the most perfect model that customers want

4.3.7 Public Relations

The selection and evaluation of influencers and KOLs match the criteria oriented towards the future image of the new product Cocoon makes a list of influencers or KOLs that match the brand image to send Cocoon gifts and masks, and then implements a plan to help celebrities understand exactly the features and benefits Benefits and great advantages of Cocoon masks Using the popularity of KOLs or Influencers, turn them into "living proof", creating a viral effect, helping to increase customer interest Next, Cocoon will combine with e-commerce channels such as Shopee, Hasaki, etc to have them run promotions according to their plan This will increase coverage throughout the branches that offer Cocoon products

In addition, Cocoon intends to sponsor gifts for participants of some special events such as webinars With the goal of attracting people with skin care and aesthetic needs through events, seminars, etc

4.3.8 Direct marketing

Use email, phone, direct messaging or social networking platforms to communicate directly with potential customers Making a list of potential customers to reach them easily is a way for Cocoon to save cost on direct marketing

5 ACTION PLAN

Figure 4: Timeline summarizing marketing activities 2022

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Time

Activity Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Run post ads on social networks Product launch Promotions Run ads on e-commerce platforms Give away KOLs, Micro-influencers "Review Cocoon's sheet masks - draw to receive attractive gifts"

Target sales at each branch Sponsor a gift for an event "Year-end gift giving"

FIRST QUARTER: Apply attractive promotions aiming to appear more on

e-commerce platforms, social networks to increase awareness for Cocoon's new sheet mask products and spread all over the country

January: We launch a communication campaign to promote the process of introducing products (about uses, features, advantages, ) to customers through modern communication channels such as Facebook, Instagram, YouTube, etc by run advertising with high price on the newsfeed of potential customers Start officially launched on January 6, 2022 Applying the promotion: "Buy 3 masks get 1", "Bill from 200,000 -get 1 mask immediately" Besides, close to Tet holiday, there will be a promotion for mixed combos such as buying 5 paper masks for 135,000 VND (save 20,000 VND)

February: We run promotions at more than 300 stores selling exclusive products of Cocoon and reputable e-commerce: Lazada, Shopee, Hasaki, Beauty Garden for e-commerce platforms to push Cocoon sheet mask products to the top of websites, on fan pages of e-commerce platforms Combine with promotions to attract customers: Hourly promotion for sheet mask products (flash sale), free shipping for bills over 5 masks