NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES DEPARTMENT OF BUSINESS ENGLISHPHAM THI TUE MINH BUSINESS ENGLISH SOME SUGGESTIONS FOR MARKETING ACTIVITIES TO LAUNCH ECOSTORE B
INTRODUCTION OF THE ORGANIZATION
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The marketing department is the largest department of Le May Headed by Mr Nguyen Le Minh, the Marketing manager, the department is divided into six categories: Food, Health and beauty, Homecare and personal care, Paper, Digital marketing and Support team Each category is responsible by a brand manager. Under the brand manager is assistant brand manager (ABM), except Digital and Support team One ABM may in charge of one or two brands One assistant brand manager will have one assistant So far, there have been over 10 brands successfully launching in Viet Nam market Ecostore is the very first brand that comes from another country, beside Japan The brand belongs to Home care and personal care category.
Figure 1.1: Structure of Ecostore team
The marketing team is responsible for planning strategy to launch the products into the market For a successful launching process, they have to deeply understand the product features and the market From the knowledge through market research, they can find the best route to market for the brand, with the support of other teams and department in the company, to achieve the goals
Last year, the company decided to cooperate to Ecostore from New Zealand, preparing to launch new product rage into market This is a huge step of the company because from the beginning, Le May aimed at Japanese products, with the commitment of bringing satisfaction to the service and quality of Japanese products to both Vietnamese distributors and consumers However, this cooperation is necessary for both parties Le May understands that the market needs Ecostore Vietnam economy is developing fast and parents are more concerned about products for their kids Besides, global warming and climate change make customer want to use ecofriendly products in order to protect environment Ecostore wants to expand to a new market and reach new customers to gain more profits Marketing team needs to help Ecostore build brand awareness and images in Viet Nam market Although there is increasing trend of using natural product, Ecostore is not the pioneer in Viet Nam market They aimed to launching products to all distribution network in 2020 To achieve this goal, a detail marketing strategy needs to be developed, based on the competitive features of the brand and market understanding.
Le May does not distribute all products of Ecostore There are four product ranges with over 70 SKU: baby care, personal care, home care and ultrasensitive First,the marketing team aimed to launch baby range in market.
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Chapter 2 will provide the basic understanding about the launching process, especially the USP and market understanding.
USP is sustainable advantages of a product with the purpose of making a clear difference that customers decide to choose this product instead of other products. USP has to highlight unique benefits for customers, give them what other competitors do not have or cannot copy, and it must be engaging to attract new customers (Ly Ha Thu, 2017) USP can be the lowest price, the highest quality, the best accompanying service, the first product on the market or simply a commitment that other competitors do not have Product or service has to be one of a kind to create its own position in the market This is the key for effective selling, the special feature that makes the company succeed in the market. Focusing on USP also helps businesses improve the effectiveness of promotion and sales activities Therefore, identifying unique selling points is extremely important for any business when developing a business plan For example, Domino’s Pizza is committed to delivery within 30 minutes, if not then customer gets a free pizza M & M said that their candy only melted in the mouth, not on the hands.
The majority of businesses make the mistake of trying to locate everything instead of a certain advantage when they start a business or launch a new product They want everything to be perfect, and they want all information to reach their customers There is simple technique that businesses can use to define USP for their products or services The first step is walking in customer’s shoes Marketers have to understand customer’s needs and satisfy that needs They might be quality,convenience, reliability, ecofriendly or customer experience After that, business needs to analyze customer behavior to find out factors that motivate them purchase product Beside customer demographics, entrepreneurs need to know customer’s insight, concern and purchase behavior.
Customer insight is the aspirations and tastes of customer, some of them take place in a manner that customer do not realize, such as customers tend to choose to buy the medium size option if there are 3 size options (Dang Phuong, 2016) Good marketers will be able to understand this behavior and apply it to their marketing campaigns to increase sales for the product Businesses need to ask “why” related to customer needs to approach the root causes and fine solutions If the businesses understand what drives consumer behavior, they will surely have strategies to better meet the needs of customers.
Customer insight is present at every stage, from when the business comes up with the idea of product development to when the product is marketed At each stage, the task and the goal of understanding the customer will be different, along with the different questions that need to be answered In the process of developing product development ideas, businesses need to understand who their potential customers are, what products they need, what benefits they can bring, etc At the launching stage, businesses need to understand which message will be received the most by customers, how the brand will be recognized and remembered Such insights always help businesses read customer’ mind and persuade them to buy products As long as businesses research appropriately, they can improve product quality, enhance brand image and have effective launching strategies (Dr Neil Kemp)
Figure 2.1: Five stages of buying decision
Buying behavior of consumers is the entire action that consumers disclose during the exchange of products, including: investigating, purchasing, using, evaluating and spending on goods and services to satisfy their needs It can also be considered that consumer behavior is the way that consumers will make decisions to use their assets (money, time, effort) related to shopping and using goods and services to meet personal needs (Prof Tran Minh Dao, 2013)
Customers are often divided into two models: buying by emotion and buying after studying the product For the first model customers, For the first model customers. Therefore, sales people need to seize this opportunity to guide customers to the products of the business within the framework of appropriate customer psychological preferences For customers of the second model, they usually will be quite wary of "offers" Therefore, in order to understand customers in this case and receive the trust and decision to buy from customers, the seller needs to make convincing evidence to ensure your products are truly superior.
Customers want the seller to understand and absorb their ideas However, not every customer has the ability to communicate clearly and fluently what they want to say, so the seller needs to be a smart listener.
Through market research, businesses know the consumer trends, the actual experience of customers with the product and identify competitors.
Competitors are people (individuals, businesses) who do business in the same segment, have the same customers, similar prices and are competitive in the same market (Xuan Hong, 2019).
Competitors understanding means analyzing weaknesses and strengths of them so that businesses can have strategies to promote product or service better than the opponent The analysis also helps businesses identify their strengths and weaknesses compared to competitors, combining macro factors such as economics,culture, law, environment to identify opportunities and challenges, thereby they can form, implement and adjust the most effective business strategy, aiming at the goal of sustainable and stable development in the future Understanding competitors can guide businesses to set competitive prices, deal with competitors’ marketing campaigns with initiatives and make marketing strategy stand out in the market The knowledge also helps businesses improve products performance and aware of any threats on time, including new entrants and current competitors (Sandra Cuellar-Healey & Charles S Dyson, 2013).
To analyze competitors, the first thing to do is to determine who competitors are, what businesses they compete with There are four types of competition First is brand competition, these are the companies that provide website design services, SEO keywords, advertise with similar prices in order to target a customer, the seller Next is industry competition, businesses and competitors are in the same field For example, L’Oréal and Klairs are competitors in cosmetic industry The third is usage competition Products having the same uses compete to each other. The last one is general competition, all businesses are making money from their target audience of competitors Businesses also can use SWOT model to analyze, including Strength, Weakness, Opportunity and Threat (Xuan Hong, 2019).
Furthermore, three factors need to be considered carefully, which are market share, mind and heart Market share is the volume of sales sold by competitors in the target market Mind is the percentage of customers naming competitors when answering the question "Please name the first business that comes to mind when you think of this industry" Heart is the percentage of customers naming competitors when answering the question "Please name the business you like to buy their product in this industry" Through these factors, businesses can identify the leading brand in the segment of the market.
Because competitors and businesses meet the same needs of the target customer segment, the products and services that meet those needs of customers are the decisive factor for competitiveness.
RTM is the process of planning, building, organizing and operating a product distribution system from the manufacturer to the consumer in an optimal way to meet the needs of development and market expansion (Tomorrow Marketers, 2020).
RTM provides solutions and synchronizes all departments from Planning - Brand
- Trade - Sales - Finance, as well as cost optimization in each of these parts. Particularly, in Planning - Strategy Department, RTM is the input source for
10 building market access capacity, as well as monitoring and evaluating the effectiveness of business goals In Brand, RTM provides data on coverage and brand positioning in the market, which is the foundation for above the line and below the line strategy Next, RTM provides input for determining the distribution channel of the Trade Marketing department Then Trade Marketing department can prioritize investment in specific activities at the point of sale For Sales, RTM establishes mechanisms of operation, testing, tracking, evaluating distribution and sales activities as well as developing business skills Finally, thanks to RTM, Finance is able to evaluate and analyze the investment efficiency of sales activities. From that, businesses can optimize the cost and profit model of the distributor (Bob Dackiw, 2017).
There are four subjects involving in the RTM decision of company The first is the manufacturer, providing products and deciding on distribution policies and pricing policies Following up is distributor, responsible for location, capital, sales team management and logistics in the distribution area The most important one is sales team, because they work directly to the retailer and sometimes directly delivery and sales on the spot The sales team will decide whether or not the company will win the market The last but not least is retailer, the agents only carry out sales, direct consulting, bringing products to consumers (Rachel Bridge, 2019).
Regardless of products, understanding the different types of distribution on the market is always the first step in the RTM development process Businesses should take a deeper look to the largest and fastest growing retail channel, and also understand the channels where consumers will buy the product Channel analysis will help better understanding of how channels work, their potential and market reactions This is an intermediary step, playing a fundamental role in making decisions about the priority of distribution channels, sales goals and different operational strategies The company needs to study four factors: (1) with a specific channel, which SKU should be prioritized for investment, for businesses with a diverse product portfolio, (2) Which channels are contributing a large volume and value This can be determined by the total sales volume of each channel and their brand market share in each of those channels, (3) What is the profit from each channel, and (4) what is the growth trend of each channel in the future After understanding the distribution channels, it is time for businesses to decide the retail stores or partners in the future (Ho Minh Chinh, 2018).
Building a complete RTM is a challenging for Trade Marketing Managers There is a lot of work to be done from understanding Brand, identifying the right segment and position, listing activities at the point of sale, measuring KPIs, working with the relevant departments and so on The most important thing is to present all of these tasks in detail and possible strategy.
3.1 Strengths and weaknesses of products
Back to 1993, when Malcolm and Melanie founded Ecostore, they want to make their home as pure as Northland coast - the land that housed them.
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Weaknesses
There is no doubt that Ecostore is a new brand in Vietnam market This may come with opportunity, but also come with challenge Brand origin is New Zealand, which is thousand kilometers from Vietnam and not familiar to Vietnamese As a result, Ecostore does not have brand awareness and image in the market Marketing team has lots of work to do to ensure launching successfully Do researches is a must to understand the market, including customer behavior and competitor analysis Besides, they have to develop a master plan in 2020 to have clear view about agenda.
Although buying decision is not always based on price, price is an important factor that needs to be considered The price of baby wash is 158,000 VND for a bottle of 200ml, which means 790 VND/ml This is not a competitive price compared to current competitors in the market The company can adjust the price for stores and end-users by promotion campaign; however, it will depend on policy of brand and company.
According to Market Pulse report of Nielsen Vietnam, by Q2/2018, baby care category saw the biggest growth of 12%, which was the most significant in many quarters Furthermore, in sustainable segment, there are few organic products, making it a potential market however, there are leading brands with high commitment and awareness for customer, Ecostore is no longer the pioneer in Vietnam market It has to face with strong competitors existing in the market As a new brand, it will take time to gain trust from customers and find its position in the market, and this process can take months or years.
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The survey results illustrate the customer insight as well as their behavior.
After collecting data, researcher has summarized the filtered dataset for analysis. There are 416 women who had answered the survey Of which, 356 people have children and 60 people do not have children.
The pie below shows the age range of the joining participants.
From the sample of 416 participants, there are 63 participants under 18 accounting for 15%, 80 females from 18 to 24 making up 19,2%, 158 people from
25 to 34 making up 38% and 115 women from 35 to 44, which is 27,7% There are no females over 45 Most of women that have children are mainly from 25 to
44, so this is the age range of target customer.
3.2.1.1.2 Average income by age range.
After identify the age range, the next question about income will show their purchase ability The higher income, the more they are willing to pay for products.
Vietnam’s middle and rich class segment is predicted to grow by 88% between
2010 — 2020, allowing them to have high-quality life This is opportunity for the brand.
The chart below shows the average income of participants, and we will focus on the income of target customer, women have babies from 25 to 44.
Chart 3.2: Average income in each age range
It can be seen that the women from 24 to 44 have the higher income than other age ranges There are 87 females in 25-34 and 42 females in 35-44 earn 10-15 million/month With higher income, they do not have financial pressure and are easier to make buying decision, even if the price is quite high compared to others, as long as they think it is worth.
To understand more about the psychology of customer, question 4 to question 11 are developed to analyze their concern and behavior The more marketers understand customer, the more they sell, because they know how to persuade customer to buy their products Ecostore is new player in market, therefore customer understanding is the most significant step in terms of market research.
Question 4 to 6 are developed to find out the reasons why customer choose a product instead of others and whether they have conscious of some environment issues or not.
When it comes to buying decision, up to 320 people are driven by good for health (77%) and the same number for organic or natural products This result is predictable because everyone wants the best for them and their family They know that chemicals in household products can be toxic and not good for health, as well as the environment 312 females buy because of brand trust (75%) This result has showed the important role of building brand image when planning marketing strategy 291 females frequently explore in depth about products on internet, through family, colleagues and friends about the quality, the experience, post-purchase, etc Because they are smart consumers, they will consider and evaluate products before purchasing This is a normal and common psychology 270 people have good experiment and they will buy the product again (65%) 258 people will buy if product is environment friendly (62%), showing the raising tendency of go green to make impact on the environment. These number has showed that Ecostore is suitable for the trend in Vietnam market.
When being asked whether or not concerned about environment, 85% choose Yes and 15% answer No The column below shows the answer of people choosing Yes.
Pollution Global warming Disease Glasshouse Clean water sustainable effect shortage development
Chart 3.4: Awareness about environment problems
Among those answering Yes is 58% of ensuring the sustainability of the environment, 60% about water shortage, 60% about disease and 52% to improve public sanitation Although other issues have smaller number of concerns, it can be said that most of target customer have conscious about the environment and the society, aware of the responsibility of protecting environment More than half have conscious of sustainable development of environment, enables Ecostore approach them easier.
The last question is designed to evaluate the important of criteria when buying products for children Customer was asked to rate from 1 to 5, with 1 is Not important and 5 is Very important As parents, they tend to be more careful when choosing product for their child This question helps the marketing team understand their concern and come up with effective marketing strategy.
All parents want the best for their child The figure shows that over 90% people marked Safe for children is Important and Very important This is the biggest reason why they choose a product Ranked second is Good experience (84%). Customers want to buy product that they already knew and trusted They have used or tested the product so they are certain about its quality The next factor is Famous brand, with 80% (332 people) Customer would rather choose a reliable and familiar brand than a new brand/product, which is a challenge for Ecostore team.
270 people rated Natural ingredients as Important and Very important Better awareness of healthy living drives demand for clean/ organic products Customer more and more realized the benefits of green products Coming next is Ecofriendly, with 57% House glass effect and other issues raise a great concern about the environment for future generation As parents, they want their child to grow up in a safe environment and society and have not only physically but also emotionally good life standard Therefore, they constantly look for products or services that not only is safe for the child but also help make the world a better place for them to live in Review of family and friends also important, because over 50% participants will consider about this before buying For other criteria, such as Consulting of
23 seller and good packaging, has more rate in Neutral than Important and Very Important Customer may think about these factors, but these do not affect their buying decision much.
Question 12 to question 14 help to sort out competitors in the market, question 13 is to find out the channels that customer usually buy, therefore the team can have proper strategy for these channels.
The chart below shows the brands that participants choose for their babies
Jonhson's Arau Chicco Ecos Just Gentle Dalin baby
The most famous brand in the market is Johnson’s Baby accounting about 47%. Johnson’s Baby continues to lead baby and child-specific products Next is Chicco, origin from Italy, with 31,4% Arau ranked third, taking up 21.4%. Just Gentle is slightly behind, about 22% With the purpose of launching baby range in natural product segment, the current direct competitors of Ecostore are Arau, Just Gentle and Babyganics.
Origin from Japan, Arau Baby has high brand awareness and good coverage in the market They have covered all baby shops chains and E-Commerce Exchange in Viet Nam market The brand guarantees the product specially developed to be ecofriendly and harmless to our sensitive environment The distributor is SNB, one of the leading distributors with over 30 famous brands in the world With the
24 competitive price, about 210,000 VND/450ml for body wash, there is no doubt that Arau is the biggest competitors in baby segment However, the brand has weak values communication The Arau Baby Vietnam page was established in 2014, but until now it only has over 18,000 likes and over 19,000 followers.
Just Gentle is in top 3 most popular organic baby skin care products in Thailand. They ensure the product clean from raw materials to the process of cultivation, safe because contain no chemical components harmful to baby's skin and health and nourish and protect the baby's skin in the most natural way The price for infant body wash is 275,000/250ml, relatively high but stable The distributor helped Just Gentle launch in E-Commerce Exchange yet again, the marketing online activities are not invested Moreover, they do not have any retailer in market Established in
2016 but the page only has over 8,100 likes and 8,200 followers Therefore, the brand has low brand awareness in Viet Nam market.
Ecos is a famous brand from USA, with most category: Baby bath, baby diapering, baby laundry, baby skincare, baby outdoors, baby home and hand hygiene It has highest price, 325,000 VND/475ml for infant body wash Although they are well- known in USA, they have low brand awareness in Vietnam market The distributor has failed to build brand image in the market because they low investment on marketing, only launching product in some E-Commerce Exchange (Tiki and Shopee) and not creating Facebook page.
= Baby shops (Bibo mart, Kidsplaza, Tuticare )
The figure clearly points out that 56,8% participant chose baby shop chains as place to buy products for their children Therefore, marketing team needs to focus on baby shop chains to approach to customer Next is online channels, including Tiki, Shopee, Lazada The team can use these channels to help raise brand awareness and build brand image.
After understanding about the USP of product range and analyzing market situation, the marketing strategy should be planned for the launching of product in 2020.