Course marketing channels (704113) design an optimal marketing channel strategy of co mem homelab

Market overview The health and beauty industry has been witnessing growth in recent years, driven by increased awareness of health and beauty and the increase in income of Vietnamese peo

VIET NAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

ĐẠI HỌC TÔN ĐỨC THẮNG

COURSE: MARKETING CHANNELS (704113)

DESIGN AN OPTIMAL MARKETING CHANNEL

STRATEGY OF CO MEM - HOMELAB

Instructing lecturer: Pham Van Phat Major: Marketing

Group: SOMEWAYS

No Name ID student

1 Nguyễn Ngọc Hải Yến 721H0687 Leader

3 Từ Tú Anh 721H0008 Member

6 Võ Thị Thanh Tâm 721H0673 Member

Ho Chi Minh City, 24%, December, 2023

LECTURER’S COMMENTS

ACKNOWLEDGEMENT

Before starting the assignment, we would like to express our sincere gratitude to the Faculty of Business Administration at Ton Duc Thang University for providing the conditions of knowledge and skills that enabled our group to complete this essay We especially extend our thanks to Mr Pham Van Phat, who has been a source of motivation, support, and dedicated guidance throughout our research process His patience and profound knowledge have helped us overcome challenges, develop research skills, and ultimately complete this final report for the Marketing Channel

course

We also want to express our appreciation to all the other teachers at the Faculty of Business Administration who have shared valuable knowledge and experiences, creating a positive learning environment

Lastly, we want to express gratitude to our family and friends, who have consistently encouraged and supported our group throughout the learning process This essay could not have been completed without the help and encouragement of these individuals We deeply appreciate everyone who has been involved and supported us on this journey While we have completed this report to the best of our abilities, we are certainly not immune to shortcomings We hope to receive feedback from our professors, which will not only help us supplement our knowledge but also provide an opportunity to strengthen and consolidate our foundational understanding

Thank you!

CONTENTS ACKNOWLEDGEMENT .cccccceccccecccceecececneeeeceneeeeeeeaeeeeecaeeececeeeeeecseeeeeststeeeseeeees 3 MEMBERSHIP ASSESSMENT TABLE L Q1 L1 nn SH He 6 IIESNS)iic 6i -aă 8

| MARKET BACKGROUND AND CONTEXT ẶẶẶ 2c neie 10

NA n - na 4 10 1.2 Manufacturer/producer & products” OV€TVICW ào con nhe 10 1.3 Environmental ÍaCẦOr§ - Q2 HH TH TH HH HT TT HE KH 13 1.3.1 ECONOMY 13 1.3.2 TECHNOlOGY 00 ccccccccccccccccececeeeeeees cece cess eseseesesseeaseessaeesaeeeeeeeeeeeeceeeeeeees 14 1.3.3 Competition - nạ .- 15 1.3.4 Social-CUẦUF@ - - 2L 001111111121 HT TT TT TH TK KT TK KT Th 18

co ào nh ae ê£(aiA 18

lÍ NEEDS AND PROBLEMS IDENTIFICATION àằcSese 19

2.1 Needs identificafion c Sc cnn HT n HH TT HH TK KT TK KT TH kt 19 2.1.1 From manufacturer / producer”s D€TSD€CfIV€S QQQQ sàng 19 2.1.2 From the Intermedlaries” perSD€CfIV€S QQnSnnH S HT kg 19 2.1.3 From the customers” p€TSD€CẨIVCS Sàn nn HT nhe hay 19 2.2 Problem lIdentificafionsS . -L TT 2n n TT TH HH TT TH kp 20 2.2.1 From channels member Q22 11 S ST KH TT khe key 20 2.2.2 Conflicts between channelS -. QL Q HT SH HT HT kệt 22

Ill HOW TO APPROACH THE NEEDS AND PROBLEMS 25

IV KEY FINDINGS / RESULTS 2 2002212211 1111221 1111111111118 11 1n key 26 '*9 9n 9n n6 ai á ằốẳốẮ ae 37

5.1 Eulli-cn:iđđiliíitiặẳặẳấẩễfiỎẩỎỪồễẳễaaiiiiiiiiiiiiẳŸäĂ4 37

- Ta n:ăaă.ẽẽ 37

" n›:- - -“ ằ.ằằaea aa aaÍaÍ 37 5.2.2 ExclUSiV@ SỈOF@S HH HT nnn TH TT TH 37 1690 se 8n n6 e6 3 -‹iI 1 37 5.2.4 Official Markefplace - - - L1 S112 1212 1n TT TH ng KH key 37

©Í90 on eae a aa 6 (4 37

4

VI RECOMMENDATIONS FOR OPTIMIZING THE MARKETING

CHANNELS SYSTEM 14 38

200i 0 bo eo na 44 38 6.1.1 Channel Distribution Conflict Resolution - 2 SH ke 38 6.1.2 Distribution channel management T222 2n nnnSn HH re 38 6.2 Optimal marketing/distribution channel - -c TS n ST S2 nhe 39 6.2.1 Co Mem’s Products Characteristics base on Color Seale 39 6.2.2 Select the Optimal Channel Distribufion -L TS SH Hee 41 6.2.3 Channel Motivation for Members . L TS SH nhe 43 6.3 Marketing Mix Strafegies LH ST TT TK TT He 44 2S ni.) dai 44 S22 ni ::dqtdqaiiI_— ằ 45

2 chon 5 se .aajịl 45

VII LIMITS AND CAVEATS Q.00 HH HH ng TT kh KH tk nen 46

7.1 LIMITATIONS «22 a.a.a.a.a.r.a a1 46 HƯU Can (dd Ả 46

REFERENCES QQ 2L HT nàng Tn KHE TK kEEt 47

150195 22222 ai ă 48

5

MEMBERSHIP ASSESSMENT TABLE

Key findings/ results Conclusions Recommendations for optimizing the marketing channels system (part 6.1) Task divider

Key findings/Result Conclusions Recommendations for optimizing the marketing channels system (part 6.2) Word format

100%

Tu Tu Anh 721H0008 Market background and

context (part 1.2) Needs and Problems identification (part 2.2) Key findings/ results Conclusions Recommendations for optimizing the marketing channels system (part 6.2)

Key findings/ results Conclusions Recommendations for optimizing the marketing channels system (part 6.3)

LIST OF FIGURES

Figure 1: Logo Of Co Mem - Home Lab cece cecececececeeceeeeeeeneeeeeeeeeeeeeneaeeeeeneees 11 Figure 2: Revenue of the cosmetics retail market in Vietnam in the period 2018 - 2027 (expected) (Source: Statista - Doanh Chinh compiled) cài 14 Figure 3: The most important factors when choosing beauty products for Vietnamese users (Source: Q&Me - compiled by Doanh Chinh) - - (Seo 15

Figure 4: Gather lists of ingredients for each product of Co Mem 18

Figure 5: Co Mem Homelab’s promotion program for reselÏers - ‹-‹‹ - 21

Figure 6: Official stores and Unauthorized resellers have high sales of Co Mem 23

Figure 7: Proportion of sales between mall shop and regular shop of Co Mem (Source: Metric.vn - Market data analysis platform) .c ccc cccccccccccseceeeeceeeceeeeeeeceseeeeeeeneeeea 24 Figure 8:Diagram of reasons why customers choose not to buy Co Mem products 26

Figure 9:Diagram of service Improvement proposals cà sàn 27 Figure 10:Diagram of reasons not to buy rice lip balm -c + csccSS S2 27 Figure 11: Diagram of service improvement proposals 2 200.0 ccccccccccceceececeseeeeees 28 Figure 12: Diagram of customer purchasing channels - +2 + <<<<+ 28 Figure 13: Diagram of customer satisfaction level at the Exclusive store 29

Figure 14: Diagram of why customers feel satisfied at the Exclusive store 29

Figure 15: Diagram of why customers are not satisfied at the Exclusive store 30

Figure 16: Diagram of customer satisfaction level at the Resellers - 30

Figure 17: Diagram of why customers feel satisfied at the Resellers 31

Figure 18:Diagram of why customers feel dissatisfied at the Resellers 31

Figure 19: Diagram of customer satisfaction level at the Official Webstores 32

Figure 20: Diagram of why customers feel satisfied at the Official Webstores 32

Figure 21: Diagram of why customers feel dissatisfied at the Official Webstores 33

Figure 22: Diagram of customer satisfaction level at the Official Marketplace 33

Figure 23: Diagram of why customers feel satisfied at the Official Marketplace 34

Figure 24: Diagram of why customers feel dissatisfied at the Official Marketplace 34

Figure 25: Diagram of awareness level of Co Mem's rice lip balm product 35

Figure 26: Diagram of reasons for lack of awareness about Co Mem's rice lip balm 5/5900 SU 1äa 35 Figure 27: Diagram of proposed improvements to increase awareness 36

LIST OF TABLES

Table 1: Co Mem Rice Lip Balm has three main categories Table 2: Evaluate the pros and cons of a few typical competitors Table 3: Co Mems Products CharacferIstIC§ .-cc << <+

| MARKET BACKGROUND AND CONTEXT

1.1 Market overview

The health and beauty industry has been witnessing growth in recent years, driven by increased awareness of health and beauty and the increase in income of Vietnamese people has fueled demand for cosmetics and personal care products According to Tuoi Tre Newspaper, the proportion of Vietnamese women regularly using beauty products increased from 76% to 86% in the period 2018 - 2022 Also according to research by Euromonitor International, the Vietnamese cosmetics market reache d high value 2.3 billion USD in 2022 and expected to reach 3.2 billion USD in 2027

With such strong growth, this has led to the development of the cosmetic industry's distribution channel system both directly and online According to Statista research, the growth rate of the number of cosmetic stores nationwide increases by 40%, from 87 in

2021 to 124 in 2022 The majority of stores are concentrated in two major economic centers, Hanoi and Ho Chi Minh City Noi and Ho Chi Minh City This is a market that experts assess as having a lot of potential and good growth

In the Vietnamese cosmetics market, this is also a vibrant market with the appearance

of imported brands, domestic brands and homemade and handmade brands In particular, the vegan cosmetics market has also gradually created strong impressions, gradually occupying every percentage of the cosmetics market share According to Nhip Cau Dau Tu Newspaper, in the past 10 years, along with the green cosmetics trend, the domestic market has also appeared many new brands, with vegan principles that are popular with users, creating a vibrant in the domestic cosmetics market

Besides, according to VIRAC, Vietnam's beauty & personal care market is forecast to continue its growth momentum in 2023 However, after overcoming the COVID-19 pandemic and the volatile situation of a With a number of major events in the world affecting the global and macro economy, the awareness of cosmetic consumption among users in the world and Vietnam has also undergone profound changes According to VNEconomic, users tend to switch to a minimalist, green, and environmentally friendly lifestyle, and changes in consumer preferences and beauty habits during the pandemic have also led to a search for healthier cosmetic options 1.2 Manufacturer/producer & products’ overview

Co Mem HomeLab is a natural cosmetics brand was founded in 2015 by pharmacist Trinh Dang Thuan Thao, who has 10 years of experience as a lecturer at Hanoi University of Pharmacy and graduated with a Master of Pharmacy in France All products from Co are made with natural, limiting the use of preservatives, chemical fragrances, and other residual substances that are difficult to decompose and harmful to the environment Co Mem HomeLab's products are currently distributed through two

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channels: direct distribution at exclusive stores and online distribution through the brand's website

- In 2018, Co Mem began its journey to spread the brand through its first store

in Hoang Cau, Hanoi

- In 2021, Co Mem was awarded the "Inspirational Brand Category" at APEA (Asia Pacific Entrepreneurship Awards)

- In 2023, Co Mem won the "Vietnamese Identity Brand Positioning Global Values" award

- To date, Co Mem has owned a chain of 43 exclusive stores, mainly concentrated in major cities such as Hanoi, Hai Phong, Da Nang, Nghe An,

Ho Chi Minh City, Binh Duong, Can Tho, becoming a reputable and familiar destination for Vietnamese consumers to shop for natural cosmetics

e Mission:

Co Mem was founded and dedicated to the mission of bringing safe products from natural herbs to replace harmful chemicals that are being used daily, towards the habit of using pure products, reducing chemical ingredients and bringing a better environment with difficult-to-decompose residues being limited

To fulfill that mission, the entire Co Mem team commits to being transparent and honest with what has been announced, ensuring that the products meet the quality standards

The company has set a goal of becoming the leading trusted natural cosmetics production and distribution unit in Vietnam by 2025

e Core values:

The core values that Co Mem strives for and throughout the journey of building and developing are “Lanh & That" "Lanh" comes from ingredients that have been used daily and essential in life since ancient times but have gradually been forgotten, namely herbs: rice, eucalyptus, green tea, fennel seeds, Produced

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using modern technology but brings purity because it does not contain harmful chemicals, chemical additives, That is the “7Adr" factor of Co Mem products Corporate culture:

The working environment at Co Mem is oriented towards professionalism, friendliness, and openness The company's staff are all comprehensively and deeply trained, understanding the products and the good messages sent to customers Not only about knowledge, the company also provides the necessary skills for each individual to gradually improve themselves, take care of customers in the best way, and bring customers perfect experiences In addition, the company always encourages employees to maximize their potential, contribute their best, and effectively collaborate with the team to complete tasks excellently

Co Mem Homelab’s Target customer:

- Age: 25-40 years old

- Gender: Female

- Occupation: Office worker, housewife, nursing mother

- Location: Big cities (Hanoi, Ho Chi Minh City, )

- Psychology:

- Concerned about health and beauty

- Prefer natural, safe, and gentle products

- Behavior:

- Frequently use gentle, safe products for health

- Often shop at exclusive stores or online

Product Overview:

Co Mem specializes in providing natural, gentle, and safe cosmetics products, formulated with natural ingredients, including: herbs, fruits, nuts, Co Mem Homelab's products are divided into the following main categories:

- Skincare: A line of skin care products, including cleansers, moisturizers, sunscreens, acne treatments, and whitening products, etc

- Haircare: Aline of hair care products, including shampoos, conditioners, hair masks, and hair oils, etc

- Bodycare: A line of body care products, including body washes, moisturizers, and body scrubs, etc

- Makeup: A line of makeup products, including eyeliners, lipsticks, and foundations, etc

Co Mem Homelab's products are highly rated for their quality, safety, and efficacy

Rice Lip Balm is a best seller product of Co Mem that is trusted by many women

on the market today It helps to keep lips soft, smooth, prevent chapping, and reduce dark lips effectively The product contains ingredients such as rice bran oil, avocado oil, shea butter, beeswax, and almond oil, which are effective in softening lips and providing nutrients to keep lips soft Using Rice Lip Balm also helps to reduce dark lips and is safe for health

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Table 1: Co Mem Rice Lip Balm has three main categories

to help reduce dark lips] mineral oil to give lips q contains natural miner:

fresh pink tint pigment to give lips a fres

Vietnamese cosmetics brands have demonstrated their position in the domestic market According to the Vietnam Household Perso nal Care Association (VHPA), the total value of cosmetic production in Vietnam reached approximately 2.4 billion USD in

2021 and is projected to continue growing With improving product quality and competitive pricing, Vietnamese cos metics brands are garnering more attention and capturing an increasing market share

Data from Statista indicates that the retail cosmetics market revenue in Vietnam reached 2.2 billion USD in 2022, with an expected increase to 2.69 billion USD by 2027 It is predicted that the revenue in 2023 will reach 2.36 billion USD, with a Compound Annual Growth Rate (CAGR) estimated at 3.32% for the period 2023-2027 This reflects the stability and sustainable development potential of the cosmetics market in Vietnam

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Doanh thu dự kiến của thị trường bán lẻ mỹ phẩm Việt Nam giai đoạn 2018 - 2027 (Đơn vị: Tỷ đồng)

Figure 2: Revenue of the cosmetics retail market in Vietnam in the period 2018 - 2027

(expected) (Source: Statista - Doanh Chinh compiled)

In 2023, the trend of using organic and natural cosmetics is expected to continue to rise Consumers are increasingly concerned about the natural ingredients and safety of cosmetic products According to a report by Nielsen, Vietnam is one of the fastest- growing vegan cosmetics markets globally, with an average annual growth rate of 30% This creates significant opportunities for cosmetic companies committed to organic and natural products to develop and expand their market

In this context, Co Mem - HomeLab in Vietnam has ample development opportunities Seizing the trends and expectations of customers is crucial to optimizing these opportunities Despite the typically higher prices of vegan cosmetics, the health and environmental benefits they offer have established a solid foundation for success in the market

1.3.2 Technology

The cosmetics industry and technology are two closely correlated fields Technological advancement is essential in the cosmetics industry to meet market and customer demands In recent years, technological development has brought significant improvements to the cosmetics industry, making the production and marketing of cosmetic products more efficient New technologies contribute to enhancing product quality and enriching the shopping experience for customers Moreover, the use of advanced technologies helps cosmetic manufacturers save costs and improve production efficiency

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thân/bạn bè

Figure 3: The most important factors when choosing beauty products for Vietnamese

users (Source: Q&Me - compiled by Doanh Chinh) Vietnamese consumers place a high emphasis on the quality and safety of products Therefore, advanced technology in the cosmetics industry helps enhance product quality, improve efficiency, and ensure safety for users Products undergo manufacturing and quality testing before being introduced to the market, providing consumers with confidence in the safety and effectiveness of the products

Facing the development of technology and the integration of technology into the production process, Co Mem - HomeLab excels in technology In addition to Co Mem's cosmetics manufacturing plant meeting CGMP standards, 100% of Co Mem's products undergo 4 testing steps conducted in a testing room that meets ISO 17025 GLP standards before they are launched into the market

1.3.3 Competition

In recent years, the number of vegan cosmetic brands in Vietnam has been increasing These brands come from many different countries, from domestic brands such as Cocoon, Bare Soul, Naunau, to international brands such as Innisfree, The Body Shop, Sukin, The increase of vegan cosmetic brands has created a more competitive environment Therefore, Co Mem - Homlab needs to promote research and innovation

to provide quality and diverse products to survive and grow in this competitive environment

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Table 2: Evaluate the pros and cons of a few typical competitors

- Cocoon is a famous Vietnamese vegan cosmetics leading brand, established in 2013)

- Take advantage of the abundant source

- BareSoul is a vegan cosmetics brand in Vietnam, founded in 2015

- Currently, BareSoul has 2 mai lines of lip balm

- Innisfree is a cosmetic brand established in 2000 under the Korean Amore Pacific

Product of lauric acid with | - The product high moisturizing includes 3 bright Cosmetics Group - The brand has a

ability in Ben Tre colors, suitable for | variety of product coconut oil the skin of Asian lines, including lip

- However, Cocoon | women including care products

is limited in product] wine red, earth diversity (only 1 orange and velvet type of lip balm) pink

Cocoon sells at a BareSoul sells ata Innisfree sells ata cheaper price than MOFe EXPENSIVE price than Co Mem.| more expensive Co Mem | Specifically, a 10g price than Co Mem Price Specifically, a 5g lip balm retails for , Specifically, a box

32,000 VND - 50,000 VND box of lip balm

retails for 120,000 VND - 170,000 VND of 5g lip balm retails}

for 140,000 VND - 200,000 VND

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- The brand currently has 2 mair distribution channels: Traditiona channel and moderr channel

+Traditional channels:

Wholesalers (distributors);

Retailers (small points of sale or grocery stores) and

- BareSoul has launched many forms to distribute its products such as|

social networks, stores, official distributors, retail chains (Sammi, Hasaki, Guardian, Watson )

- Sell directly on the website

- Distributing to e-

- The brand currently has 2 main distribution channels: Traditiona channel, modern channel +Traditional channels:

Wholesalers (distributors); Retailers (small points of sale or grocery stores) and

Place consumers commerce websites} consumers

+ Modern such as lazada, + Modern distribution shoppe, tiki distribution channels: - Hard to find in channels: Vincom supermarket system) modern channels | supermarket system Vinmart, Vinmart +, | such as convenienci Aeon Mall, SC B's Mart, Big C, stores or shopping | Vivocity, e- Co.op Mart, ; and | centers commerce platforms convenience store (Shopee, Lazada, chains such as Circl

K or Family mart; e- commerce platforms (Shopee, Lazada |

- Choose effective | - BareSoul does not} - Promotion, strategies to help | focus on trends and] communication and strengthen user trus does notrush out | product promotion and promote the mass products that | activities of the brand cause more company are always

- Always convey confusion for users.| carried out on a meaningful - Focus more on large scale and messages through | community methodically Promotion products activities - Choose

- Collaborate with | - However, representative faces

influencers, beauty

bloggers and industry influencers]

- Regularly organize promotions, discounts and offers advertising methods

are not attractive enough to customers who are famous

people

- Many programs to

preserve nature and

support environmental protection activities

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1.3.4 Social-culture

In Vietnam, this trend becomes even more pronounced as consumers are not only concerned about the effectiveness of products but also prioritize vegan cosmetic products The selection of products that not only exclude animal ingredients but also refrain from animal testing while being environmentally friendly has become a significant criterion in consumer purchasing decisions

Noteworthy is the resurgence of traditional beauty methods, where herbal plants such

as rose, rice water, green tea, or various waxes and essential oils are favored The combination of tradition and modernity results in unique cosmetic products that not only enhance beauty but also provide care for both health and the environment

Thao Méc Duge Liệu Dấu, Sáp Tỉnh Dấu

Figure 4: Gather lists of ingredients for each product of Co Mem Capturing this trend, nearly 100% of Co Mem products are declared for quality and tested according to the standards of the Ministry of Health before being circulated in the market The transparent dataset is where Co Mem honestly discloses every ingredient in the product, along with its origin, role, function, and safety ratio This Transparent Ingredients Compilation not only helps customers better understand Co Mem products but also serves as a foundation for users to selectively choose safer personal care products

1.3.5 Government

The Vietnamese government is also implementing various environmental protection policies, including policies that encourage the use of environmentally friendly products These policies have contributed to raising consumer awareness about the importance of using environmentally friendly products This has created opportunities for vegan cosmetics manufacturers to reach a wider customer base

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ll NEEDS AND PROBLEMS IDENTIFICATION 2.1 Needs identification

2.1.1, From manufacturer / producer's perspectives

Manufacturers are the cradle of all businesses The level of perfection of an enterprise's products directly affects its success or failure From a Company perspective, it is a company specializing in providing clean products The role of the manufacturer has become more important than ever

In order to create increasingly perfect products, there are some need which need to be put in concern

¢ Improve brand’s identification: Building a brand's image will never be stopped because it is an important part of running a brand brand identity will help us find more customers and also intermediaries

« Materials always have to be ready: It is important to have a long live supplier for the needed ingredients It will help control the price and also the quality of materials

« Great procedure for controlling the quality of clean cosmetics: This is a very important process By checking hard the outsource of the product will create a good base for the company getting far away from some scandal which isn’t

necessary

2.1.2 From the intermediaries’ perspectives

Intermediaries are the link between the customer and the manufacturer, they include all individuals and organizations that act as a bridge to deliver products and services to customers at the same time with less cost and risk For Co Mem Homelab, they prioritize the quality of products and the customer experience so most of their intermediaries are exclusive retail stores to ensure that they are giving the customer the best service possible

From intermediaries’ perspectives, they will have some specific needs for their channels including:

« Increase customer acquisition and retention: Co Mem Homelab’s

intermediaries want to attract new customers and make old or existed customer

to come back In order to do this, Co Mem Homelab need to provide their intermediaries with supports such as product supports, advertising and sales promotion support and management support

« Enhanced profitability: The final goal of Intermediaries is creating profit and how to maximize it Co Mem Homelab’s intermediaries want to have products,

pricing strategy that can maximize their margins

« Adaptability to market changes: Co Mem Homelab’s intermediaries need to

have the ability to adapt to the changing market including trends, technologies and economic conditions that are constantly evolving They need to be flexible

in their strategies so that they can be relevant and competitive

2.1.3 From the customers’ perspectives

Customers need to find a product that takes good care of their lips Therefore, distribution channels need to focus on providing high quality lip balm, with natural ingredients and at the same time providing special lip care

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In addition, shopping experience also plays an important role in attracting customers Customers expect convenience when searching for products, from cosmetic stores to supermarkets and online

Before making a purchasing decision, customers need detailed and clear information about the product Therefore, they look for distribution channels that provide complete information on product packaging, at the point of sale or online and receive support from sales staff with strong product knowledge

Finally, customers also care about added value and incentives Distribution channels can take advantage of pricing strategies and promotions to create additional value for customers and stimulate them to shop at the right distribution channel

e Wants:

Firstly, customers expect a product with strong moisturizing capabilities, helping to maintain lip hydration over an extended period This not only provides comfort but also contributes to the softness and smoothness of the lips

The next desire is efficacy in reducing lip pigmentation Customers anticipate that the product not only moisturizes but also helps diminish darkening and cracks on the lip surface, promoting a healthy and natural appearance

Customers also anticipate a product with subtle and natural colors The choice of color not only reflects creativity and personal style but also fulfills the desire for confidence Light and natural shades are highly appreciated, especially when they create a natural and non-heavy look

Lastly, the desire for health safety is undeniable Customers expect that the product not only enhances beauty but is also crafted from natural ingredients, free from harmful chemicals, and adheres to health safety standards This instills trust and satisfaction among consumers, adding further value to the natural lip care product

Co Mem Home Lab relies on customer expectations to offer Rice Lip Balm that fully integrates the customer's basic wants And that is also the reason for customers to choose Rice Lip Balm

2.2 Problem Identifications

2.2.1 From channels member

e Manufacturer

For the manufacturer - Co Mem Homelab, one of the factors that ensures the success

of the business lies in the distribution channel management process, especially in nowadays competitive business environments However, Co Mem may encounter some problems in its current distribution & supply chain, including:

- Inventory management: Excess inventory can have Co Mem Homelab spend

on warehousing and preservation costs, increase the risk of product obsolescence, damage and pressure on working capital Besides, inventory loss can also affect the profits, causing difficulties in controlling and managing distribution channels, affecting the reputation of the business

Distribution partner management: As Co Mem Homelab, in addition to the exclusive store system, also has a number of reseller (buy and resell channels), not accompanied with the supply and management of Co Mem Homelab, this may cause difficulties in ensuring that the goods entering the market are genuine, leading to the risk of counterfeit, counterfeit, and poor quality goods appearing

on the market, affecting brand reputation Beside that, Price management is also

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difficult when resellers can arbitrarily set their own prices, leading to price differences between distribution channels, affecting customer choices In addition, the recall of defective, damaged or inventory goods can also face many obstacles because the reseller may not cooperate, leading to affecting brand reputation if the product is sold on the market

Marketing strategy threats: With the current positioning of Co Mem Homelab,

if it isn’t any effective marketing strategy, it may lead to not reaching the right target customers, wasting marketing budget, and does not have the desired business results Failure to update market trends can also cause marketing strategies to be inconsistent with customer tastes, reducing a business's competitiveness

Changing in customers’ demand and markets: The trend and changing in customer needs make it difficult for Co Mem to predict market trends, easily leading to producing products that do not the market demand Also, fierce competition from competitors in the same industry can also affect Co Mem Homelab's market share

ch Các đơn hàng lớn này được miễn phí ship đến 01 địa chỉ của khách hàng

Figure 5: Co Mem Homelab 's promotion program ƒor resellers Resellers are the units that buy and sell again Co Mem provides products in large quantities, along with promotional programs for Resellers Co Mem HomeLab only focuses on selling large quantities with promotional policies and does not have a clear distribution policy, which comes with some risks such as:

- Loss of control over prices, non-uniformity in distribution: If there is no price policy or retail price control, Resellers can freely reduce prices to compete, resulting in the situation where products appear at many locations with different prices and promotions, creating a market disparity, causing profit losses for the manufacturer, exclusive stores and e-commerce channels of Co Mem HomeLab The person most affected is the customer

- Product quality risks: If Resellers are not closely controlled or do not have a quality assurance policy, there may be cases where products sold do not meet the quality standards of the manufacturer

- Loss of brand control: For Resellers who are only interested in low prices and have no commitment to quality This can reduce the brand's reputation with customers If there is no distribution policy, Resellers will not be responsible for maintaining and protecting the brand image, which can lead to loss of brand control and inconsistent brand image Customer relationships are also not maintained

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e Exclusive stores

Co Mem Homelab focuses primarily on building and developing its own exclusive stores On the other hand, most customers tend to buy cosmetics at reputable retail stores such as Hasaki, Guardian, etc This has led to some limitations in Co Mem's distribution channel:

Limited customer reach: Reputable cosmetics retail stores are often conveniently located and trusted by many customers However, Co Mem only chooses to distribute exclusively and does not distribute through these retail channels This makes it difficult for Co Mem to reach a wider range of potential customers

High distribution costs: Building exclusive stores requires Co Mem to invest a large amount of money to select a location and build a store This will increase

Co Mem's distribution costs

e Official webstore

Co Mem has a good website which contains all the customer’s needs It is well- groomed from outlook to feature which helps customers a lot in buying products in the other hand, there are a weak feature made Co Mem’s website can not approach new customers, which is:

Weak SEO performance: Domain of Co Mem has a weak rank in every

product’s name In order to compete with other brands, Co Mem has to

increase SEO’s performance to reach plenty of new customers The ranking of

brand’s domains seem not to be invested well while they use lots of money on

opening Exclusive stores

- Customer experience has not been invested in: Although the store space is invested in by Co Mém Homelab, it is very neat and eye-catching But some products do not have test products, so even if customers come directly to the store to buy, they still cannot evaluate the product quality Customers decide to buy longer and not be completely confident in the quality of the product

2.2.2 Conflicts between channels

e Exclusive stores >< Official webstore

The cause may come from the following factors:

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- Price Conflict! Co Mem applies a consistent pricing policy across all distribution channels, including the Official Webstore and Exclusive stores However, in reality, product prices at Exclusive stores are often slightly higher than those on the Official Webstore The reason is that the transportation and storage costs at Exclusive stores are higher This price difference can lead to conflicts between the two distribution channels Consumers may feel "ripped off" when purchasing products from Exclusive stores This could potentially impact the reputation of the Co Mem brand

- Quantity Conflict: Due to transportation and storage costs, Exclusive stores often have a lower quantity of products compared to the Official Webstore This may prevent customers from obtaining the desired products or require them to wait longer to receive their purchases The difference in product quantity can lead to dissatisfaction among customers Customers may feel "neglected" or not prioritized when buying products from Exclusive stores

- Customer Service Conflict: Both the Official Webstore and Exclusive stores provide good customer service However, due to different scales and operational methods, customer service at the two distribution channels may have some differences For example, the Official Webstore may offer 24/7 customer support, while Exclusive stores can only provide customer service during business hours This difference may leave customers feeling dissatisfied when purchasing products from Exclusive stores

- Sales Policy Conflict: The Official Webstore and Exclusive stores may implement different sales policies For instance, the Official Webstore may frequently run promotional programs, while Exclusive stores may only offer promotions on special occasions This difference may make customers feel

“unfairly treated" when buying products from Exclusive stores

e Exclusive store/website >< Unauthorized reseller

Các shop phổ biến trong nhóm hàng Cỏ mềm

>>

gow

es : 9 l (- - Phorme+ wt eA Sy

Figure 6: Official stores and Unauthorized resellers have high sales of Co Mem

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In addition to official online stores, Co Mem still has unauthorized resellers to distribute products However, Co Mem - Homelab's revenue comes from Exclusive store/website and Shop Mall accounting for 99.3% and more than unauthorized resellers accounting for 0,7% of sales Reporting on Co Mem - Homelab of the top 10 best-selling shops, Co Mem Official Store has the highest revenue proportion, accounting for 72.17% of sales Next are the shops Co Mem Official, Co Mem Saigon, Therefore, it can be seen that

Co Mem's revenue mainly comes from stores on official online stores and revenue from resellers is very low (0,7%)

Tỉ trọng doanh số Shop Mall va Shop thudn

Shop thường: 0,73%

|

` Shop chính hãng: 99,31

Figure 7: Proportion of sales between mall shop and regular shop of Co Mem

(Source: Metric.vn - Market data analysis platform) The cause may come from the following factors:

- Policy conflict: creating motivation for unauthorized sellers is a must in order

to raise the revenue of this channel promotion, target, need to be added into the policy to promote sellers to sell products

- Misunderstand about brand value: understanding the value of the brand will help a seller know how to treat customers There is a lack of training classes for sellers to have a chance to understand the vision of the brand

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