topic the problem of my hao cosmetic chemical joint stock company losing its market in vietnam

In the early 1990s, My Hao dishwashing liquid was a familiar brand to most housewives; it once dominated and accounted for 50% of the domestic market share.. In 1997, Unilever Group laun

NATIONAL ECONOMICS UNIVERSITY

BUSINESS SCHOOL

CRITICAL THINKING

GROUP 7 - EBDB2 RESEARCH PROPOSAL

Topic: The Problem of My Hao Cosmetic Chemical Joint

Stock Company Losing its market in Vietnam

Instructor: Prof Soren R Kirchner

Group 7: Nguyen Mai Anh — 1120024

Luong Ngoc Anh — 11204583 Nguyen Thuy Trang —

School year: 2022-2023

Table of contents

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| COMPANY DESCRIPTION

Introduction

Founded in 1978 as a small production business, My Hao Cosmetic Chemical Joint Stock Company has constantly tried and gradually built a brand name in the dishwashing liquid market

In the early 1990s, My Hao dishwashing liquid was a familiar brand to most

housewives; it once dominated and accounted for 50% of the domestic market share

In 1997, Unilever Group launched Sunlight dishwashing liquid products to the market

at a double selling price with the aim of creating a high-end but unsuccessful segment, and My Hao continued to lead the domestic market

The high-price strategy failed, but Unilever was not resigned to failure and launched a new product to protect the skin of consumers The price was slightly higher than My Hao, and with massive advertising campaigns on major media, its previous distribution channels were used as the basis for Sunlight to go to market

A short time later, Sunlight usurped the top spot from My Hao and has continuously led the market share to this day

Not only is the market share narrowing, but when doing a survey on the level of understanding of the dishwasher brand Vinaresearch, it shows that the first occurrence rate in consumers’ thoughts for Sunlight dishwashing liquid is 85%, while with My Hao it is only 11.3% It is an effective marketing strategy that makes consumers put Sunlight in their minds when shopping

Mission statement

With the motto "Prestige - Quality,” My Hao Company is committed to bringing consumers the most complete and best-quality products with its own respect, love, and high level of responsibility for human life and society

Vision statement

‘Become a symbol of ‘every family's belief’ in skin care products, personal care, family health care, and serving the public benefit

Core competencies

@ Integrity: Honesty in behavior and in all transactions

@ Respect: Self-respect, respect colleagues Respect the Company and the

company’s partner Cooperation in expectation

@ Fairness: Treat employees, customers, and suppliers equally and transparently with other stakeholders

@ Compliance: Comply with the Law, Code of Conduct and regulations, policies, and regulations of the Company

@ Ethics: Respect established standards and act ethically Perfecting a pure culture

@ Community: Care about the environment, health, and safety

Il MY HAO COMPANY’S PROBLEM ANALYSIS

PEST ANALYSIS

1 Economic

- Changing the mechanism is one of the reasons why businesses do it inefficiently

The policy still has many shortcomings, has not closely followed the new arisings

of the market mechanism, has not been handled in time, has not been included in the law, etc

2 Cultural

*Insensitive to customer consumption behavior

Leading the domestic market share for a long time from 1990 to 1997 but not developing business methods, not catching up with consumer behavior, and sleeping in victory is the first cause of My Hao losing market share

There is no determined retail price, making the price each time and place consumers buy different so that consumers feel like buying expensive and cheap ones Agent care is not good

There is no methodical strategy, misjudging consumer needs and tastes Always making cheap goods, serving an easy market, while consumers are becoming more and more wise and fastidious, but businesses refuse to improve designs, and product quality and accidentally lose their existing advantages Meanwhile, foreign corporations when entering the Vietnam market often focus

on bringing goods into modern distribution channels, strongly hitting health- safety products - food safety and constantly changing designs, creating a new engaging product

* Missing distribution channels

When delivering to retailers, not directly checking price and after-sales, so goods are difficult to reach consumers stably

* Retail care is not good

In the past, My Hao did not have to sell goods, but the retailers themselves would

go to the factory to pick up the goods When entering Vietnam, multinational enterprises quickly built a distribution system at My Hao's own agents Gradually losing the agent, My Hao immediately encountered difficulties

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* Put multiple products with the same name

Most of the products of My Hao company from dishwashing liquid, cleaning liquid, laundry detergent, etc, are generally named My Hao This is an absolute thing to avoid because it will be affected by the line When a product is not good

or customers have a bad impression of one of My Hao's products, it will be easy

to confuse or suspect all other products

3 Technology

* Products lack innovation

Not investing much in advertising, while Sunlight is constantly launching new designs and new formulas They have had a spectacular comeback with a dishwashing liquid product containing vitamin E to help protect the skin of the hands for users

Not upgrading packaging and design My Hao is quite loyal to the classic yellow round bottle and blue cap

In a market where the demand for new aesthetics is as high as it is today, this way

of My Hao seems to be old-fashioned and no longer suitable

FIVE FORCES

1 Supplier competitive pressure

My Hao is less competitive in terms of suppliers because My Hao's main ingredients are extracted from natural Green Tea, which is a product that is 2 times denser than ordinary dishwashing liquid, less weary, clean quickly,

economical, and effective

Other ingredients extracted from essential oils from lemon peel combine bactericidal features in dishwashing liquid, making dishes always clean and fragrant when used

These ingredients are all available domestically and cost quite low

Raw materials for the same source: such as products of ABS Factory are supplied

to most washing powder and detergent production companies in Vietnam such as

Unilever, P&G, LIX, NET, My Hao, etc., and exported to ASEAN countries

2 Customer’s bargain power

Customers are a competitive pressure that can directly affect the entire production and business activities of the industry

Customers are divided into 2 groups: Retail Customers and Distributors These two groups both put pressure on businesses in terms of price, product quality and accompanying services and they are the ones who control competition in the industry through the decision to buy or not to buy

For My Hao, bringing products into the distribution system of supermarkets is always difficult because of price and quality pressures So the prerequisite is that the distribution strategy of production enterprises must be methodically built from the team of retailers, to supply agents, regional agents, etc Accompanied by seller care policies, organization of marketing staff, delivery, and business supervision teams In the field of shampoo, soap, and dishwashing liquid This battle for the market mainly takes place at each point of sale

3 Competitive pressure from potential competitors

With so much potential, Unilever VN, a company that is said to have asked the issue of acquiring My Hao 5-6 years ago with a huge number: 30 million USD

4 Internal competitive pressure on the industry

Sunlight is the leading competitor in the domestic market

- My Hao's direct competitor is still Sunlight These two brands are having similar dishwashing liquid products in terms of color and product quality However, due

to limited financial investment in product research and development, My Hao is always one step behind Sunlight in promoting new products

SWOT

Strengths:

- Along-standing brand that has dominated the market

- The company's leadership is enthusiastic, going to survey the market every month

source of retail orders for distributors

Weaknesses:

short term

- There has not been a breakthrough or improvement in customer interest in product quality

Opportunities:

- Already have a reputable brand in the market, just change the model, invest more

in advertising

- State policy to support "Vietnamese people use Vietnamese goods"

Threats:

- Competitors with strong potential and large scale

- Consumer tastes change constantly

- Customers have more and more choices and are willing to spend more money on foreign products than on domestic products

of high competition and declining purchasing power

- Another difficulty that My Hao and other domestic cosmetic companies are facing

is that Chinese imitations of Vietnamese brands are rampant in markets, making

it difficult for Vietnamese goods to survive

Conclusion of MY HAO Company’s Problem:

It is a fact that many Vietnamese enterprises enter the business profession with zero management knowledge, follow emotions, and have short-term visions Even with the product pricing, they only know how to add a few dollars compared to the original price

to make a profit, but they have never thought about the costs of advertising, marketing, warehousing, etc My Hao company is one good example of this

My Hao's race with other dishwasher companies and especially Sunlight is still a long way off, and there will be many challenges for this company to have a "reverse flow" in the dishwashing liquid market

Once a market leader in dishwashing liquid and the number 1 brand of Vietnamese people, now My Hao has been quickly dethroned by a multinational company and forgotten by the people Even though the company still makes a profit every year, it won't be very difficult to get back to the 1st position in the past

There are two factors for My Hao's inability to "beat" Unilever's Sunlight:

In terms of quality, many consumers think that My Hao has not yet made a creative breakthrough like Sunlight; when using the product, it still dries hands and produces little foam; and the product packaging has little innovation or improvement

My Hao has never appeared on major TV channels, and up until now, consumers knew this product with the image of a yellow dishwashing bottle that was "too old" My Hao's marketing team is considered to be weak without the proper training and market experience of Unilever One of the investment activities for the brand is participating in social work My Hao is not a name mentioned much Or the company's website is still too sketchy, with not much promotional information Meanwhile, Sunlight still regularly broadcasts on television, and Unilever's products are displayed on every corner, from rural to urban areas, when the company has a sales team with 7,000 employees in all

provinces and cities

Therefore, the two most urgent problems facing My Hao’s company are marketing and innovation Currently, My Hao only spends 3% of its revenue on advertising and marketing, and with a poor advertising and management team, Therefore, it is difficult for the company to build a breakthrough and impressive image with customers

Ill SOLUTION

Better tap into an existing market with existing product

1 Market penetration: product growth

The company's motto is "Prestige - Quality", so it is always committed to meeting the

needs of consumers

In addition to My Hao dishwashing liquid, there are many other products such as bleach, soap, fabric softener, etc However, My Hao dishwashing liquid is still the company's main product, accounting for 45% of the market share and 65% of the company's

revenue

In contrast to products of equivalent quality but high cost and focusing on high-income customers like Unilever's Sunlight, My Hao should target all customers with lower income in the countryside to avoid fierce competition in the city market

2 Market development: penetrating new markets

¢ Building a distribution system and targeting the rural market segment

When the State opened up, the competition began to become fierce, the agency business model was not good because agents not only sold My Hao’s products but they sold many other products, and the company could not interfere deeply

in the way of sales The agency's business model is not good To survive, the company must have a strong distribution system

Therefore, My Hao should have relationships with agents who are still selling their products, offering them preferential policies such as discounting commissions on larger production values than before

Moreover, My Hao should more focus resources on building a distribution and marketing system targeting the rural market segment so that the product could spread everywhere This model helps the company deliver fast, and save on warehousing and transportation costs

With little capital, and little experience, Director My Hao had to go to each region

to build a distribution system by himself, and he had to go down to check every month to see where he was doing well and where he was not It is laborious and quite manual, the company should also hire and train an experienced

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