Luận văn thạc sĩ: A marketing plan for la mer products through the corporate sales channel

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY

DANG VINH HIEN

A MARKETING PLAN FOR LA MER PRODUCTS THROUGH THE CORPORATE SALES CHANNEL

Major: Business Administration Major code: 8340101

MASTER’S THESIS

HO CHI MINH CITY, January 2024

THIS THESIS IS COMPLETED AT

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY – VNU-HCM Supervisor: Dr Pham Ngoc Tram Anh

Examiner 1: Dr Phan Trieu Anh Examiner 2: Dr Do Khac Xuan Diem

Approval of the Chair of Master’s Thesis Committee and Dean of Faculty of Industrial Management after the thesis being corrected (If any)

CHAIR OF THESIS COMMITTEE DEAN OF FACULTY OF INDUSTRIAL MANAGEMENT

VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITY

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY

SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom - Happiness

THE TASK SHEET OF MASTER’S THESIS

I THESIS TITLE (In Vietnamese): KẾ HOẠCH TIẾP THỊ CHO DÒNG SẢN PHẨM LA MER THÔNG QUA KÊNH PHÂN PHỐI CHO DOANH NGHIỆP

II THESIS TITLE (In English): A MARKETING PLAN FOR LA MER PRODUCTS THROUGH THE CORPORATE SALES CHANNEL.III TASKS AND CONTENTS:

In this thesis, tasks include:

 Theoretical foundation for building marketing plan

 Current situation of Estee Lauder Companies Vietnam and overview of Vietnam prestige cosmetic market based on internal data

 Targets and Goals for La Mer through corporate sales channel

 Application 4Ps in building marketing plan for La Mer through corporate sales channel

 Execution plan, tracking performance and risk management

IV THESIS START DAY: 09/04/2023

V THESIS COMPLETION DAY: 12/20/2023VI SUPERVISOR: Dr Pham Ngoc Tram Anh

Ho Chi Minh City, date 03/06/2024

SUPERVISOR

(Full name and signature)

HEAD OF DEPARTMENT

(Full name and signature)

DEAN OF FACULTY OF INDUSTRIAL MANAGEMENT

(Full name and signature)

ACKNOWLEDGEMENTS

First of all, I would like to send my sincerest and deepest thanks to Dr Pham Ngoc Tram Anh - who has always enthusiastically advised and guided me throughout thesis implementation process My instructor gave extremely useful comments and suggestions that helped my essay become more and more perfect

Sincere thanks to our colleagues at Estee Lauder Companies who are always ready to help support as well as contribute ideas and create the most favorable conditions for me while I am doing thesis

Sincerely thank the Teachers and Faculty of Industrial Management for their dedicated guidance and imparted extremely valuable knowledge to me throughout the course

Sincerely thank you K2021 - those who have always been by my side helping, sharing useful information and knowledge to me and encouraging me during my study process Finally, I would like to express my deep gratitude to my parents who created the conditions that allowed me to participate and complete the course and helped me make the progress I have today

Ho Chi Minh City, December 2023

Dang Vinh Hien

ABSTRACT

Prestige or luxury cosmetic industry is growing very quickly in Vietnam as people's living standards and consumption levels are improving.Estee Lauder Companies is a corporation that owns many famous cosmetic brands such as Estee Lauder, Clinique, M.A.C, Bobbi Brown etc Among the currently owned brands, La Mer is the most high-end cosmetics brand and will be launched in Vietnam in early 2024 This is the second time La Mer products are officially distributed in Vietnam and with experience from the first failure, the company has proposed specific strategies to build up La Mer to become the No 1 skincare brand in the high-end cosmetics market in Vietnam within the next 2 years Corporate sales is one of the three main distribution channels of Estee Lauder Companies Vietnam and the channel lead will build a complete marketing plan based on Alexander Chernev's theory of The Organization of the Marketing Plan and includes the following parts:

THE COMMITMENT OF THE THESIS’ AUTHOR

I declare that this is my research work The data and research results in this thesis are truthful and have never been used to defend any academic degree

I hereby declare that all help in carrying out this thesis has been gratefully received and that all information in this thesis has been clearly cited

Ho Chi Minh City, December 2023

Dang Vinh Hien

2.2 How to build a marketing plan 8

2.3 The G-STIC approach to action planning 11

Table of figures

Figure 2.1 The Organization of the Marketing Plan Source: adapted from Alexander Chernev, The Marketing Plan Handbook, 6th ed (Chicago, IL: Cerebellum Press, 2020) 10Figure 2.2 The G-STIC Action-Planning Flowchart Source: adapted from Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL: Cerebellum Press, 2019) 13Figure 2.3 BCG Matrix Source: adapted from Boston Consulting Group (2023) 18Figure 3.1 Organizational chart of ELCVN 25Figure 3.2 The market share of ELCVN from FY20 Q3 (January 2020) to FY23 Q3 (March 2023) 26Figure 3.3 Contribution of each category for ELCVN market share from FY20 Q3 (January 2020) to FY23 Q3 (March 2023) 27Figure 4.1 Brand portfolio of ELC in 2022 Source: THE ESTÉE LAUDER COMPANIES FISCAL 2023 FORM 10-K 32Figure 4.2 Work stream of organizing partnership with new corporate partner 78Figure 4.3 Work stream of sourcing vendor for workshop 79

Table of Tables

Table 4.1 Customer segmentation 38

Table 4.2 Goals of Corporate Sales channel for La Mer in FY24 43

Table 4.3 Selling price of La Mer products in Vietnam 55

Table 4.4 Approval levels for discount levels for La Mer 56

Table 4.5 Discount level for each partner for La Mer 57

Table 4.6 Target of finding new partners for La Mer 58

Table 4.7 Marketing calendar for La Mer in FY24 60

Table 4.8 Marketing calendar for La Mer in FY25 61

Table 4.9 Targets for marketing campaigns for La Mer in FY24 63

Table 4.10 Communication guideline of corporate sales channel 65

Table 4.11 Corporate partner evaluation form 69

Table 4.12 Process of organizing partnership with a new corporate partner 71

Table 4.13 Vendor sourcing criteria 74

Table 4.14 Process of sourcing vendor for workshop 76

Table 4.15 P&L simulation for a workshop at a luxury venue for 4 days 83

Table 5.1 Risk assessment of corporate sales activities for La Mer 85

CHAPTER 1: INTRODUCTION

1.1 Rationale of thesis

In recent years, the cosmetics market has become much more vibrant with many famous brands coming from abroad Not only that, the "made in Vietnam" brands have also made significant changes to "tear apart the cake" of this lucrative market Especially during the Covid-19 pandemic, while most other businesses have difficulty, cosmetics companies have made remarkable developments As customers spend more time at home, they begin to care for and learn about how to take care of their skin (VTV, 2021) Therefore, the sales of the total cosmetics industry in Vietnam increased significantly While small and medium-sized companies are competing fiercely in the mid-range and low-range market segments, in the prestige beauty segment, famous foreign companies are dominating the market like Estée Lauder Companies Inc (ELC), L'Oréal S.A., and Shiseido

According to a report from Beauté Research, a leading provider of prestige beauty market data in Asia, ELC is the third highest-grossing cosmetics group with $17.7 billion in annual sales in 2022, behind Unilever ($25 billion) and L'Oréal ($37 billion) Following ELC are two other large corporations, Procter & Gamble ($14.4 billion) and Shiseido ($9 billion) Competitors always try to launch new product lines with outstanding features At the same time, they also expand the distribution of products through different channels such as distribution through retailers (Takashimaya, Cresent, Lotte, etc.), distribution through retail chains (Hasaki, Guardian, Watsons, etc.), distribution through e-commerce channels (Lazada, Shopee, TikTok Shop, etc.), distribution through flagship stores or distribution through corporate sales channel

Corporate sales channel is a distribution channel that, although not new, ELC has not yet paid attention to The feature of this distribution channel is that it aims directly at the target audience who are employees of other corporations, communicating commercial information through the partners' internal departments such as human resources department, employee engagement department or marketing department One of the corporations that has successfully used this distribution channel is Samsung Electronics Co., Ltd when sales from this distribution channel account for about 14 - 17% of this business's revenue for 5 years1 Realizing that the demand for prestige cosmetics by corporate employees is great, ELC decided to join the corporate sales distribution channel By September 2021, ELCVN started to build a corporate sales channel, starting with the website "The Company Store" (shop.thecompanystore.vn) The product portfolio at the time consisted mainly of several hero products from Estee Lauder, Clinique, Bobbi Brown, MAC and Jo Malone London By the end of 2023, ELCVN will officially distribute La Mer products, a high-end cosmetic brand trusted by many customers around the world La Mer products will be distributed through all distribution channels in Vietnam, including the corporate sales channel

In the kickoff meeting at the end of 2022, the country manager of ELCVN, Ms Tran Diep Lam Giang, set out strategies and goals for each department and distribution channel in 2023 For corporate sales, there are 2 strategies, and 3 main targets need to be implemented in 2023 Regarding the strategy for the corporate sales distribution channel, Ms Giang emphasized two things Firstly, corporate sales channel must approach customers in tier 2 cities with dense population and strong economic development such as Can Tho, Binh Duong, Dong Nai etc through pop-up events or clearance sales parties Next, the corporate sales channel must make La

Mer products become more popular through continuous branding through activities such as giving out samples, free gifts or organizing minigames The 3 targets that the corporate sales distribution channel needs to achieve include: (1) Net profit is within 15% of sales, (2) Revenue contribution is 15% of total company revenue and (3) Market share of La Mer is 39% and become top 1 in skincare category

Against the aforementioned backdrop, this thesis aims to develop "A marketing plan for La Mer products through the corporate sales channel" to achieve those targets

1.2 Objective of thesis

In order to develop a marketing plan for La Mer products through the corporate sales channel, the thesis seeks to address 3 main objectives The first is to consolidate the relevant marketing knowledge as a foundation to build a marketing plan for the business Second, this thesis helps to assess the competition landscape of the prestigious cosmetics industry Third, from the knowledge of marketing and research results of La Mer brand team, this thesis proposes a complete marketing plan for La Mer products through the corporate sales distribution channel

1.3 Scope of thesis

With the ambition to build La Mer into the No 1 skincare brand in Vietnam in terms of market share as well as brand awareness, corporate sales will be one of ELCVN's three main distribution channels in the next three years to realize the above ambition This thesis will build a marketing plan for the luxury cosmetics brand La Mer over the next 2 years, divided in the phase of Build-up, one of three main phases including Build-up, Accelerate and Sustain With the Build-up phase, the plan will focus on setting up the distribution system, running tests with a number of partners and optimizing operating processes for the corporate sales channel In the Accelerate phase, we

will focus on promotional campaigns and sales campaigns to boost sales as well as strengthen customer relationship management (CRM) programs to increase retention rate The final phase - Sustain - will focus on maintaining close relationships with customers who have made purchases, thereby building customer trust in product quality and after-sales service From there, old customers will help bring traffic to the corporate sales channel through marketing forms such as word-of-mouth or referral This thesis will focus on using data and insights from other departments within ELC, thereby building an effective marketing plan focused on taking full advantage of the power of corporate sales distribution channel as well as reputation of the La Mer brand

1.4 Significance of thesis

Expected to contribute 15% of the company's total revenue in FY24, corporate sales channel is a strategic distribution channel alongside B&M and Online channels Therefore, leveraging most of the resources of the corporate sales channel to help deliver La Mer products to end consumers is one of the critical targets of this distribution channel This thesis will focus on carefully analyzing the factors that are affecting the performance of this distribution channel as well as proposing a marketing plan to realize the set goals

1.5 Structure of thesis

This thesis will include 6 main parts

Chapter 1: Introduction

Chapter 2: Theoretical foundation of a marketing plan

Chapter 3: Industry and company overview

Chapter 4: Marketing plan for La Mer products through corporate sales channel

Chapter 5: Risk assessment

Chapter 6: Conclusion

CHAPTER 2: THEORETICAL FOUNDATION OF A MARKETING PLAN

2.1 Definition of marketing

Despite the fact that marketing has been around for a while, marketing principles have only been around since the turn of the twentieth century There are numerous ways to define marketing, some of which are as follows: In order to manage customer connections for the benefit of the business and its stakeholders, marketing is a function of the organization It consists of a collection of processes for producing, conveying, and providing value to customers (American Marketing Association, 2017) Marketing is a social process in which individuals and groups obtain what they need by creating, offering, and exchanging products and services of equal value with individuals and other organizations (Kotler & Keller, 2016) It is defined as the process of performing activities to achieve organizational goals by anticipating customer needs to direct the flow of goods from producer to customer (Jerome Mccarthy et al., 1960/2011) According to the definition proposed by American Marketing Association (2017), “marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”

2.1.2 Function of marketing

Forecasting, product planning, and promotion planning are examples of fundamental marketing operations based on environmental analysis marketing Environmental analysis and marketing research aid in forecasting the variables influencing a company's success so that it may make adjustments and gather the data required to address marketing issues Businesses can grow their markets by entering new ones with the aid of marketing Marketing enables companies to research

and assess consumer behavior, demands, and purchasing patterns in order to identify target markets and formulate effective marketing strategies Businesses will have (1) product planning more logically by generating and sustaining any products, designing images, product brands, and items that need to be deleted as a result of better knowing the market and client needs; (2) better promotion planning through advertising, public relations, and promotions; (3) better distribution planning by establishing relationships with distribution intermediaries; (4) more appropriate pricing through pricing techniques from which there is rational price adjustment and use of price as a positive or negative factor Businesses can evaluate the risks and advantages of decisions with the aid of the planning, execution, and control of marketing operations To effectively create and trade, boost the company's competitiveness, and optimize profits, businesses need to understand the wants of the consumers for the goods they manufacture or trade Each fundamental marketing plan must be based on the target audience and their demands; the company will then concentrate on actions to address those needs By developing a marketing strategy, a company can carry out its marketing efforts in a methodical manner with a clear goal that is in line with the market features of the company According to Kotler and Keller (2016) “A marketing strategy is a logical and rational system of arguments as a basis for guiding an organization, calculating how to solve its marketing tasks It includes strategies specific to target markets and levels of marketing spending” It comprises spending amounts on marketing as well as target market-specific methods An endeavor to reach a desired position in light of the competitive landscape and the evolving business environment is represented by marketing strategy As a functional strategy, marketing strategy serves as a basis upon which other functional business strategies are built An organization's marketing activities are broken down into key components in a marketing strategy, outlining how a business unit plans to accomplish its marketing goals

2.2 How to build a marketing plan

There are many guides on how to build a marketing plan In this thesis I will use the process proposed by Chernev (2020) because this is a process highly appreciated by ELC's marketing team for its practicality and effectiveness Generally, the 7 factors proposed by Chernev (2020), including product, service, brand, price, incentives, communication, distribution aspect, capture the traditional 4Ps, including price, product, place, and promotion For simplicity, this thesis will apply the 4Ps which allows a sufficient coverage of several elements of the marketing plan while at the same time give more space to discuss the Place element in greater details

All firm marketing initiatives are guided and coordinated by the marketing plan It's a concrete result of a company's strategic planning process that outlines the organization's ultimate objective and the methods by which it intends to attain it The marketing strategy must successfully convey the firm's aim and its suggested course of action to the appropriate stakeholders, including corporate employees, collaborators, shareholders, and investors, in order to fulfill its primary function of directing a company's operations (Kotler & Keller, 2016) The marketing plan's scope is smaller than the business plan's because it only addresses one area of a company's operations Business plans for organizations also cover the company's finances, operations, human resources, and technology issues in addition to the marketing-related aspects of their operations Other parts of the business plan may be briefly discussed in the marketing plan, but only if they are pertinent to the marketing strategy and methods The marketing strategy has three basic purposes: It outlines the company's objective and suggested course of action, notifies the pertinent parties about the objective and proposed course of action, and persuades the pertinent decision-makers of the viability of the objective and suggested course of action

A situation overview is often included after an executive summary in marketing strategy The plan then outlines the company's objectives, the value-creation strategy it has developed, the offering's tactical components, and its strategy for putting those components into action The plan is concluded with a list of pertinent exhibits after defining a series of control measures that will track the company's progress toward its objectives The major choices that underlie each of the marketing plan's constituent parts are shown in the Figure 2.1

Figure 2.1 The Organization of the Marketing Plan Source: adapted from Alexander Chernev, The Marketing Plan Handbook, 6th ed (Chicago, IL: Cerebellum Press, 2020)

As the "elevator pitch" for the marketing strategy, the executive summary might be viewed as such It gives a focused and brief review of the company's objective and suggested plan of action The executive summary typically consists of one or two pages that list the important challenges the organization is currently dealing with, such as an opportunity, a danger, or a performance gap, as well as the suggested course of action

What value does the offering create for target customers, collaborators, and company stakeholders?

The situation overview of the business' operating environment and the markets in which it currently competes or plans to participate is given in the scenario overview As a result, the situation overview is divided into two sections: the company overview, which provides an overview of the company's background, culture, resources (competencies, assets, and offerings), and the market overview, which provides an overview of the markets that the company currently manages offerings in as well as those that it may target in the future

The marketing plan's G-STIC section serves as its central component It consists of (1) the Goal the company aims to achieve; (2) the Strategy, which defines the offering’s target market and value proposition; (3) the Tactics defining the product, service, brand, price, incentives, communication, and distribution aspects of the offering; (4) the Implementation, which lays out the aspects of executing an offering’s strategy and tactics; and (5) Control procedures that evaluate the performance of the company’s offering and analyze the environment in which the company operates

By separating the less significant and/or more technical components of the plan from the crucial information, exhibits streamline the marketing strategy by keeping tables, charts, and appendices in a separate area.

2.3 The G-STIC approach to action planning

The foundation of marketing planning is the action plan, which states the company's objective and specifies a course of action to achieve it The creation of an action plan is guided by these five major processes: Setting a goal, creating a strategy, creating the tactics, creating an implementation plan, and choosing a set of control measures to gauge the effectiveness of the suggested action are some of these processes These five tasks make up the G-STIC framework, which serves as the

foundation for marketing planning and analysis The business model built on the offering's strategy and tactics forms the basis of the action plan

The following are the specific elements that make up the G-STIC method to marketing planning and management:

 The goal identifies the end outcome that the company hopes to attain and describes the

company's ultimate criterion for success The emphasis of the objective, which specifies the metric (like net income) used to measure the desired outcome of the company's actions, and the performance benchmarks, which indicate progress toward the goal and provide the timeline for reaching it, are its two main components

 By identifying the company's target market and describing the offering's value proposition

in this market, the strategy serves as the foundation for the business model of the company

 The major components of the company's offering are defined in tactics, which implement

the strategy The company's chosen market is where these seven tactics—product, service, brand, price, incentives, communication, and distribution—are leveraged to provide value

 The implementation to make the company's offering ready for purchase are referred to as

implementation The process of implementation involves creating the offering and introducing it to the target market

 By tracking the company's performance and changes to the market environment in which

the company works, control evaluates the effectiveness of the company's operations over

time

Figure 2.2 lists the essential elements of the marketing plan, along with the main characteristics that best describe each element The following sections go into greater detail about each element

Figure 2.2 The G-STIC Action-Planning Flowchart Source: adapted from Alexander Chernev, Strategic Marketing Management: Theory and Practice (Chicago, IL: Cerebellum Press, 2019)

2.3.1 Setting a goal

Setting the company's goal into clear terms launches the marketing strategy The objective may be thought of as the lighthouse that directs all business activity Setting a goal involves making two crucial choices: (1) Focus – deciding on the direction of the organization's operations and (2) Benchmarks – outlining the performance standards that must be met

ControlImplementation

(1) Goal focus – The emphasis of the aim establishes the intended result of company operations,

which is a crucial factor in determining a company's success Goals can be either monetary or

strategic depending on their focus

Monetary goals are based on things like return on investment, earnings per share, net

income, and profit margins Financial targets are the key performance metric used by profit businesses

for-Strategic goals are focused on non-financial results that are crucial to the company's

strategy Increasing sales volume, brand awareness, and social welfare are some of the most typical strategic aims Other common objectives include improving company culture and making it easier to hire and keep employees Strategic goals serve as the primary performance metric for nonprofit organizations and for-profit businesses striving to support offerings that generate more money than the focus product

(2) Performance benchmarks – Together, quantitative, and temporal performance standards

offer the measurements that chart the company's progress toward achieving its predetermined goal

Quantitative benchmarks outlined the precise benchmarks that must be met as the

business advances toward its end objective These metrics quantify the company's primary objective, which can be, for instance, a 5% increase in market share, a 15% increase in retention rates, or a 10% increase in revenue Quantitative benchmarks can be expressed in absolute terms, such as wanting to reach sales of one million units annually, or in relative terms, such as intending to expand market share by 20%

Temporal benchmarks specifies a deadline for reaching a particular quantitative or

qualitative goal, such as updating the corporate website by the end of the first quarter

Setting a deadline for attaining a goal is an important choice that may have an impact on the method of implementation, the number of participants, and even expenditures For instance, achieving the aim of long-term profitability is likely to involve a different approach and set of methods than maximizing profits for the upcoming quarter

2.3.2 Developing strategy

This section just briefly discusses strategy in connection to the G-STIC framework because the procedures needed in creating an effective marketing strategy were previously addressed in length

in this chapter The company's target market and value proposition for this market are included

in the strategy, which indicates the value that the company aims to create in that market

Target market is determined by five factors: the customers whose needs the offering will

satisfy, the competitors whose offerings aim to satisfy the same target customers' needs, the partners who assist the company in meeting the needs of target customers, the company managing the offering, and the environment in which the company operates

Value proposition outlines the advantages and disadvantages of the market product with

which the company intends to satisfy the needs of its target market Customer value, collaborator value, and company value are the three pillars of the value proposition A positioning statement that highlights the primary advantages of the company's offering in

a market context is frequently used in conjunction with the value proposition

2.3.3 Designing tactics

There is no denying that the marketing mix is a useful tool for helping to transition between marketing objectives A lot of articles discuss concepts from the marketing mix, like the 4Ps, 7Ps, or 4Cs Still, a lot of academics agree that the 4Ps are the theory that is used the most frequently

Borden (1965) asserts that he coined the phrase "marketing mix," citing Culliton's (1948) suggestion as his source McCarthy (1964) proposed the marketing mix, sometimes known as the 4Ps, as a way to put marketing strategy into reality (Bennett, 1997) The single P (price) of microeconomic theory is the source of the marketing mix (Chong, 2003)

In order to survive in a highly competitive climate, new Ps were brought into the marketing landscape (Low and Tan, 1995) By examining scholarly perspectives from five marketing management sub-disciplines-consumer, relationship, services, retail, and industrial marketing-as well as an emerging marketing field (e-commerce), Möller (2006) even provides an up-to-date picture of the current standing in the debate around the Mix as marketing paradigm and predominant marketing management tool Numerous studies have criticized the 4Ps approach, including Lauterborn (1990), Möller (2006), Popovic (2006), and Fakeideas (2008) Nevertheless, despite its shortcomings, the 4Ps are still an essential component of the marketing mix There is still disagreement regarding the practical use and eligibility among the following Ps (Kent and Brown, 2006)

2.3.3.1 Product

According to Kotler & Armstrong (2017), anything that may be provided to the market for consideration, reception, use, or consumption as a product and has the potential to meet one or more needs and requirements is a product Products comprise both material and immaterial aspects, as well as tangible and intangible objects (services)

The thesis will apply the Boston consulting group (BCG) matrix to define product strategies The Boston Consulting Group, an American consulting business, first created the BCG matrix in the 1970s Businesses have used the matrix extensively as a portfolio management tool to identify

priorities in optimizing their product portfolios and to help allocate resources effectively (ALL

about BCG Matrix - 12manage, n.d.) Strategic business units or markets are categorized using the

matrix based on two dimensions: market growth and market share The concept claims that market growth represents the level of sector attractiveness and market share serves as a stand-in for competitive advantage (VTV, 2021) The BCG matrix's vertical axis represents the rate of market growth, while the horizontal axis displays the relative market share By making use of the market's biggest rival, relative market share is determined Strategic business units or markets are categorized as cash cows, stars, dogs, or question marks based on these two factors Strategic business units that have a high return on assets and produce a lot of cash are referred to as cash cows These companies provide a sizable source of funding for the company Concentric diversification and product development are two of the strategy alternatives Stars have a large relative market share, a rapid rate of market expansion, and they are also very profitable If stars can hold onto their market share, they will be cash cows, but with time, the growth rate will slow Market penetration, market development, product development, and joint collaborations are among the strategic alternatives available to stars Dogs don't earn a lot of money, have a tiny market share, and have a poor growth rate They also demand less capital input Dogs are frequently referred to as "cash traps" since they drain resources from the company and may need to be sold Retrenchment (if it is thought that it could be reinvigorated), liquidation, and divestment (if you can find someone to buy) are all examples of strategic options Question marks are expanding quickly and will need more money invested in them than they can produce Due to their low market share, question marks have significant cash requirements and produce minimal returns Market penetration, market expansion, and product creation are all viable strategic alternatives for question marks Following classification, a corporation has four strategic management options: harvest (from cash cows), divest (from dogs and question marks), maintain, and invest (in cash

cows) (Kotler & Armstrong, 2017) The BCG matrix has drawn criticism despite its usefulness for a number of reasons, including the fact that market share and growth rate are not the only factors used to determine an industry's attractiveness, the lack of a clear definition of what a market is, and difficulties in obtaining data on market share and growth These flaws have led to the use of more thorough models by businesses, particularly in industrialized nations McKinsey, the General Electric model, and the Shell Directional Policy Model are some further modern marketing models that are employed These models, however, require more data and might not be applicable in circumstances when the amount of data available to researchers is constrained

By taking into account the pace of market growth and relative market share, the BCG matrix is employed in this thesis to examine the potential of the various market segmentations to which La Mer products will be sold

Figure 2.3 BCG Matrix Source: adapted from Boston Consulting Group (2023)

2.3.3.2 Price

In the Vietnamese market, retail price (RP) setting has been planned by La Mer's brand team All distribution channels will use the same retail price to avoid channel conflict and to easily manage retail sales for the entire company However, each channel will have its own commercial offers to promote sales and those offers will be explained in the Promotion section

2.3.3.3 Promotion

ELC always focuses on customer satisfaction with the products and services that ELC is providing Therefore, ELC's promotion programs will always encourage customers to experience many product lines and build close relationships with customers Following ELC's guidelines, ELCVN's promotion programs will not focus on direct discounts, ; instead, ELCVN will offer additional gifts, mini sets, trial sets or samples so customers can experience more products For customers who have purchased from ELCVN at least once, they will often be offered redeem promotions such as loyalty programs, friend referral programs, etc

2.3.3.4 Place

The majority of manufacturers sell their products through intermediaries who perform a range of tasks between them and the ultimate consumers These middlemen make up a marketing channel, which is sometimes referred to as a commerce channel or distribution route Sets of interconnected businesses that take part in the process of making a good or service available for use or consumption are known as distribution channels They are the series of steps a good or service takes after it is created, leading up to the customer's eventual purchase and consumption (Kotler & Armstrong, 2017)

Depending on the target audience of each distribution channel, designing and managing distribution channels will be different For example, with the E-commerce distribution channel,

they target the end consumer, so this is a D2C (direct to consumer) channel The e-commerce channel will only have to go through one intermediary, which is the e-commerce platform, to distribute products to their target audience For B&M (brick and mortar) distribution channel, their audience target is also end consumer; however the process will be a bit more complicated as they will have to go through retailers (like Lotte, Takashimaya, Vincom etc.) to distribute products Each retailer will have its own forms of cooperation with ELCVN, of which the two most common ways are outride and consignment With outride form, ELCVN will sell products to retailers, retailers will pay 100% of the product value as soon as ELCVN creates a purchase order With consignment, ELCVN will sell products to retailers, but retailers will not pay 100% of the value of the goods They will pay in installments based on their sales ability They will pay the value of the product to ELCVN after they sell the product to customers

With the corporate sales distribution channel, marketing offers will be sent out to corporate partners, who are business partners operating in Vietnam, and the partners will communicate ELCVN's marketing program to their employees This is a B2B2C (Business to business to consumer) form After employees of corporate partners purchase goods, the order will be shipped directly to the customer All operations take place on an ELCVN website and are completely automatic The purchasing experience on this website will be similar to purchasing on Shopee or Lazada

2.3.4 Identifying controls

Companies need to be flexible in order to regularly realign their operations with current market realities because the business environment is constantly changing Controls drive an organization toward its ultimate objective by ensuring that its actions are consistent with its strategy and tactics Controls also improve the effectiveness and cost-effectiveness of marketing operations and enable

a better evaluation of the return on marketing investment by assisting businesses in determining if they are on the right path to achieving their objectives

Controls serve one basic purpose: to advise the organization on whether to continue on its existing course of action, alter the underlying strategy and tactics, or altogether renounce it in favor of

creating an offering that more accurately reflects the reality of the market Evaluating

performance and monitoring the environment are the two main parts of controls

Evaluating performance – When assessing a company's performance, benchmarks are used

to monitor the company's advancement toward its objective For instance, comparing expected and actual sales revenue results or comparing expected and actual net income to spot operational inefficiencies are two ways to examine a company's financial performance Here are a few typical performance indicators:

 Sales measures including volume of sales, increase in sales, and market share

 Customers' awareness, preferences, buying intent, trial rate, and repurchase rate are examples of customer readiness-to-buy KPIs

 Metrics of customer value such customer happiness, cost of client acquisition, churn, customer lifetime value, and return on customer

 Metrics for distribution such the number of outlets, the average stock volume, the frequency of out-of-stocks, the percentage of shelf space, and the average sales per channel

 Brand awareness, gross rating points (GRP), and response rate are examples of communication metrics

A performance gap between desired and actual performance can be found by evaluating the company's performance, depending on whether it is making sufficient progress toward its goal

The business can continue with its existing action plan if the progress is judged to be sufficient However, the firm's action plan needs to be reevaluated and amended to put the company back on a course that will allow it to reach its goal when performance evaluation exposes a discrepancy and demonstrates a gap between corporate performance and the benchmarks set

Monitoring the environment – It enables early detection of alterations in the market setting

that could have an impact on the business It enables the business to seize possibilities like advantageous government legislation, lessened rivalry, or rising consumer demand Additionally, it warns a business of incoming dangers like adverse government legislation, an increase in rivalry, or a fall in client desire A firm can adjust its present action plan in a timely manner by taking corrective action, allowing it to take advantage of existing chances and counteract looming risks This is possible when the organization is alert about seeing possibilities and threats Keeping a careful eye on the market environment improves business agility, which is necessary for the sustainability of the company's value-creation strategy It also helps companies align their actions with market conditions The fundamental market changes brought on by technological improvements may be the best example of the significance of controls in marketing management and, specifically, the importance of monitoring the environment in which the company operates

CHAPTER 3: COMPANY OVERVIEW

3.1 Overview of ELCVN

3.1.1 General information

The Estee Lauder Companies Inc is one of the top producers and marketers of high-quality skin care, cosmetics, fragrance, and most recently, hair care products worldwide More than 120 nations and territories sell the company's goods under well-known brand names like jane, Donna Karan, Aveda, Stila, Jo Malone London, Bumble and bumble, Estee Lauder, Aramis, Clinique, Prescriptives, Origins, MAC, La Mer, Bobbi Brown, Tommy Hilfiger, and Bumble and Bumble

ELC officially established ELCVN on March 5, 2009 with the mission of spreading ELC's core values, "every woman can be beautiful", to all Vietnamese women Up to now, ELCVN is distributing genuine products under the following brand names: Estee Lauder, Clinique, Jo Malone London, MAC and Bobbi Brown It is expected that in November 2023, ELCVN will continue to introduce La Mer brand to the Vietnamese market After 5 generations of country managers, ELCVN is currently led by Ms TRAN DIEP LAM GIANG for 5 years, a Vietnamese who graduated with a major in Marketing from the University of Economics Ho Chi Minh and has worked for more than 15 years at Unilever with many positions related to Marketing

3.1.2 Cosmetics industry in Vietnam

According to results of Beauté Research, the high-end cosmetics market in Vietnam reached about 8 billion USD in 2022 More than 60% of customers use skin care products on a daily basis, making them the most well-liked category in particular In a similar vein, Statista's study demonstrates that the growth rate of cosmetics stores in Vietnam has grown by 40%, from 87% in 2021 to 124% in

2022 Hanoi and Ho Chi Minh City, two significant commercial centers, are home to the majority of the stores

Nielsen claims that Vietnamese consumers do not spend much money on makeup In reality, Vietnamese women spend between VND 300,000 and VND 500,000 on makeup per month, more than they do on skin care The most recent trend in skin care is multi-step washing to address issues including acne, clogged pores, and under-eye dark circles Consumers spend more on skin care services (spa, dermatology clinic) and beauty items as appearance becomes more important to them Lipstick makes up the greatest portion of the Vietnamese cosmetics market, according to the Insight Handbook 2021 analysis from Kantar Worldpanel

Vietnamese consumers' buying habits have been impacted by the proliferation of e-commerce platforms In particular, compared to 2018, sales of personal care items have risen by 63%, those of skin care and makeup by 55% and 25%, respectively Vietnamese cosmetic companies are attempting to recapture this lucrative market, however they now only retain 10% of the industry Vietnamese cosmetic companies can only currently operate in the low-end market and export to a few nearby markets In addition, 90% of Vietnamese cosmetic companies work as distributors for foreign cosmetics producers Vietnamese business districts are dominated by cosmetics from abroad

3.1.3 Organizational structure

At ELCVN there will be 6 main departments including Finance, Marketing, Corporate Sales, B&M, Online and Human Resources At the head of each department there will be a manager Below Manager there will be other positions such as Lead or Executive All Managers will report directly to the Country Manager, Ms Tran Diep Lam Giang Organization chart will be shown in the figure below

Figure 3.4 Organizational chart of ELCVN

3.1.4 Current business situation

Under Ms GIANG’ leadership, ELCVN has achieved many proud milestones, and 2022-2023 is a boom year for ELCVN after a long period of gloom due to the impact of the Covid-19 epidemic Currently, ELCVN is contributing in 3 main categories of beauty market including Skincare, Make-up and Fragrances The following pictures will show the market share of ELCVN from FY20 Q3 (January 2020) to FY23 Q3 (March 2023)

Figure 3.5 The market share of ELCVN from FY20 Q3 (January 2020) to FY23 Q3 (March 2023)

It can be seen that from FY20 Q3 ELCVN ranks 5th in the market with a contribution rate of 12% while ELC's biggest competitor in the international market, L'Oreal, leads the market with 22% market share However, with the leadership of Ms Giang, ELC rose to market leader for the first time in FY23 Q3 with 21% market share, 2% more than L'Oreal It is worth noting here that at the time of the Covid-19 epidemic, while other competitors such as Chanel, Coty Luxury and Clarins all saw a serious decline in sales, ELCVN experienced sudden growth, accounting for 2nd place in the market just behind L'Oreal

The following picture will show the contribution of each category for ELCVN market share from FY20 Q3 (January 2020) to FY23 Q3 (March 2023)

Figure 3.6 Contribution of each category for ELCVN market share from FY20 Q3 (January 2020) to FY23 Q3 (March 2023)

From the figure above it can be seen that skincare products are contributing more than 50% of total sales for ELCVN with day and night intensive skin care products from the Estee Lauder brand Make-up products account for 20-31% of ELCVN's total sales with matte lipstick and cream lipstick lines from MAC Sales of fragrances are currently being largely contributed by the Jo Malone London label and are expected to increase further as Jo Malone London develops more stores in other regions

3.2 Market research

At ELC, the Enterprise Marketing and Data (EM&D) team will be in charge of market analysis At ELCVN, the full function of the EM&D department has not yet been established and is being built based on the current marketing department Therefore, ELCVN's marketing team will work with ELC APAC's EM&D team to carry out market research campaigns, providing necessary information for distribution channel teams and brand teams Every quarter, they will synthesize, research, and analyze data from many different sources to provide market insights, shopping trends or predictions about competitors' strategies The information they analyze will be uploaded publicly to Tableau, an American interactive data visualization software that can help anyone see and understand their data Only levels from Lead and above have access to Tableau because this is the company's data warehouse, very in-depth and confidential Tableau will be linked directly to the SAP system, this helps sales performance, campaign performance and marketing performance to be continuously updated All information about historical performance is updated

and visualized on Tableau In addition, users can view the predicted data that the EM&D team has analyzed to have reasonable strategies for their work This is also where the La Mer brand team updates necessary information about the market, customers, products, strategies, etc so that distribution channel leads can learn and adapt to the strategies of each channel In general, with the channel lead's scope of work, they will be interested in metrics such as: average annual spend for each customer segmentation, average order value of La Mer's customer, expected spent for La Mer product, conversion rate from traffic to reach , conversion rate from reach to lead, etc

CHAPTER 4: A MARKETING PLAN FOR LA MER PRODUCTS THROUGH CORPORATE SALES CHANNEL

4.1 Executive summary

In recent years, many important events have occurred that directly affect the fluctuations of the consumer market in particular and especially the high-end cosmetics market During nearly 3 years affected by the Covid-19 pandemic, the high-end cosmetics market was almost frozen and fell behind On the contrary, more affordable cosmetic brands from Asian countries such as Korea and China are popular because consumers tend to tighten their spending compared to previous periods Furthermore, consumers increasingly favor products derived from nature and boycott products with plastic packaging The wave of anti-plastic packaging is so severe that many brands have had to completely switch to using glass or recycled plastic for their products Most serious of all is the outcry against testing cosmetics on animals such as rats, dogs, cats or rabbits in 2021 The most famous cosmetic brands in the world such as Chanel, L'oreal, Lancôme, Dior, Estee Lauder etc are all involved in this scandal, forcing them to stop testing on animals and make speeches aimed at immediately reassuring public opinion

With the above disadvantages and advantages, ELC decided to bring the high-end cosmetics brand La Mer to Vietnam in early 2024 In addition to this being a high-end cosmetics brand, which will make La Mer difficult in reaching customers because the price is too high, this is a brand that uses natural ingredients - fermented seaweed, does not use plastic packaging and does not test products on animals With the above factors suitable for market tastes, ELC believes that La Mer will become the number one cosmetics brand in Vietnam within the next 3-5 years with at least 39% market share of high-end cosmetics market

In the high-end cosmetics market in Vietnam, the market share is led by Christian Dior (20.78%), YSL (11.96%), Estee Lauder (9.40%), Kiehl's (9.11%), Lancôme (8.26%), Shiseido (6.69%), Cle De Peau (5.13%) etc2 To be able to win against the above competitors, La Mer needs to differentiate itself The marketing plan for La Mer will include dimensions such as product, price, promotion and place (distribution) In particular, optimizing the strengths of the distribution through the corporate sales channel will be the top priority of the marketing plan presented in this thesis

Firstly, the corporate sales channel will focus on promoting the worldwide best-selling products and derived from fermented seaweed such as creams and serums These will be the two key products of the corporate sales distribution channel In addition, other products will also be on sale to create more choices for customers such as cleansing foam, treatment lotion and eye concentrate

Secondly, the selling price will be based on instructions from brand team La Mer Vietnam, which has been aligned by regional and global brand teams The distribution channel team will not determine the selling price for La Mer products as this will be researched and proposed by the regional and global brand team However, the distribution channel team will make specific promotional decision to for each customer group For corporate sales channels, promotions will be designed based on factors such as: marketing calendar for special events (Christmas, Tet, Black Friday, Women’s Day etc.), total number of partners' employees, average income and ad hoc requests from partners

Thirdly, the distribution system for customers of the corporate sales channel will be designed and adjusted based on the existing process This helps customers' shopping experience to be upgraded