Developing marketing strategy for Jemma

TRNG I HC M TP. HCM UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBAVB2 NGUYEN THI HONG THU DEVELOPING MARKETING STRATEGY FOR JEMMA MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART – TIME) Tutor’s name: Dr. Nguyen Dinh Tho Ho Chi Minh City (2011) MBAVB2 NGUYEN THI HONG THU 2011 ACKNOWLEDGEMENT OF COMMITMENT It is to confirm that I conducted this final project for the MBA program with the acknowledgment of the management of Jemma brand. This is my original work. Marketing literature from training courses of Professor Jean-Pierre BAEYENS and professor Claes are keys to build up my theory framework A lot of information extracted from books, public sources, news and internet are mentioned in the reference sources. For some cases, I have been unable to trace the owners of copyright material, and I would appreciate any information that would enable me to do so. Besides of the above reference sources, all data and information are true. I am confident to submit this project to the professors of the MBA program. Nguyen Thi Hong Thu MBAVB2 NGUYEN THI HONG THU 2011 ACKNOWLEDGE First of all, I would like to express my deepest acknowledge to my supervisors, Dr. Nguyen Dinh Tho and Dr. Nguyen Thi Mai Trang – professors at University of Economics, for their valuable, sharp comment and inputs. I would like to express my sincere appreciation to Professors of Solvay Business School who provide the academic background and practical experience about Marketing and business management that I can write and complete this thesis. I acknowledge Mrs. Pham Thi My Hanh from Jemma board of management allow me investigate Jemma business performance and she also spent a lot of time to provide industry market insights that establish my argument to write this thesis. Finally, I would like to thank Ms. Dang Thi Thu Ha and my classmates in MBAVB2 who always support and encourage me to fulfill this thesis With my best regards, Ho Chi Minh City, March 2011 Nguyen Thi Hong Thu MBAVB2 NGUYEN THI HONG THU 2011 ABSTRACT Jemma is a new born local brand in fashion jewelry and accessories industry in December 2009. Building brand image and increasing turnover are Jemma priority objectives in the first three years To build brand image, Jemma invests on one flagship store located in the center of shopping district in Hochiminh city. To quickly boost up for sales, Jemma apply shops-in-shop and shops-in-store models in which Jemma rend two counter booths in big shopping malls like Parkson, Vicom, … and other four selling booths through existing PNJ shopping center By December 2010, Jemma launch its website with the aim to expand its coverage attracting more customers as well as build online experience to be ready for the future market growth. Jemma short-term objective are to build traffic into its new website and increase online turnover Jemma target customers are female office workers, 25 -40 years old, high income class (SEC ABC), love jewelry and metropolitan life style whose potentially familiar with internet application. Online therefore could be one of their favorite shopping channels For developing countries and low-income households in developed countries, adoption of internet shopping but the conversion rate is small due to a lack of affordable internet access. Develop online shopping channel is a long term strategy of company as its key benefits are clearly defined: cost saving, marketing combination, customer relationship development, and competitive advantage enhancement, especially when market moving toward technology blooming decade The project is designed with the aim to help Jemma promote its internet shopping channel building on insights of Jemma target customers. The outcome will be a marketing strategy proposal cover 7Ps of marketing mix activities for Jemma internet shopping channel in 3 years time MBAVB2 NGUYEN THI HONG THU 2011 TABLE OF CONTENTS ABBREVIATIONS i LIST OF FIGURES ii LIST OF TABLES, PICTURES iii 1. CHAPTER 1: INTRODUCTION 1 1.1 STRATEMENT OF THE PROBLEM 2 1.2 QUESTIONS AND OBJECTIVES 3 1.2.1 Questions 3 1.2.2 Objectives 3 1.3 RESEARCH DESIGN 4 1.3.1 Desk research (secondary data) 4 1.3.2 Quantitative research (primary data) 4 1.4 SCOPE OF THE STUDY 4 1.5 STRUCTURE OF THE STUDY 5 1.6 SIGNIFICANCE OF STUDY 6 2. CHAPTER 2 LITERATEUR REVIEW 7 2.1 INTERNET MARKETING STRATEGY 7 2.1.1 Marketing strategy 8 2.1.2 Marketing mix 10 2.1.3 Internet marketing mix 11 2.2 UNDERSTANDING CONSUMER BEHAVIOR 16 2.2.1 Factors affect consumer behavior 16 2.2.2 Consumer decision process 18 2.2.3 Consumer decision on new products or services 20 3. CHAPTER 3: FASHION JEWELRY MARKET, INTERNET CHANNEL LANDSCAPE, AND JEMMA INTRODUCTION 23 MBAVB2 NGUYEN THI HONG THU 2011 3.1 FASHION JEWELRY MARKET 24 3.1.1 Definition of fashion jewelry 24 3.1.2 World fashion jewelry industry 24 3.1.3 Fashion jewelry in Vietnam 27 3.1.4 Vietnam internet market opportunity 30 3.2 JEMMA INTRODUCTION 33 3.2.1. Jemma business overview 33 3.2.2. Business objectives 34 3.2.3.Jemma brand propositioning 35 3.2.4.Jemma marketing mix 35 3.2.5.Jemma SWOT analysis 36 4. CHAPTER 4: SITUATIONAL ANALYSIS 37 4.1 JEMMA ONLINE CHANNEL AND ITS COMPETITORS 38 4.1.1 Jemma situation analysis 38 4.1.1.1 Assessing the current contribution of the internet to the organization 38 4.1.1.2 Product analysis 40 4.1.1.3 Pricing analysis 45 4.1.1.4 Place analysis 46 4.1.1.5 Promotion analysis 47 4.1.1.6 People, process and physical evidence 47 4.1.2 Competitors analysis 47 4.2 DEFINING CONSUMER DECISION BEHAVIOR 52 4.2.1 Factors affect consumer behavior 52 4.2.2 Consumer decision process 54 4.2.3 Consumer decision on new products or services 61 5. CHAPTER 5: RECOMMENDATIONS 64 5.1 PROPOSED JEMMA MARKETING STRATEGY 65 MBAVB2 NGUYEN THI HONG THU 2011 5.2 MARKETING MIX FOR JEMMA ONLINE CHANNEL 66 5.2.1 Product 67 5.2.2 Pricing 68 5.2.3 Place 68 5.2.4 Promotion 69 5.2.5 People, process and physical evidence 70 6. CHAPTER 6: CONCLUSION 71 REFERENCE 75 APPENDIX 76 i MBAVB2 NGUYEN THI HONG THU 2011 ABBREVIATIONS 4Ps : Product, Price, Place and Promotion 7Ps : Product, Price, Place, Promotion, People, Process and Physical Evidence B2B : Business to Business B2C : Business to Consumer CAGR : Compounded Annual Growth Rate FMCG : Fast Moving Consumer Goods GDP : Gross Domestic Product HCMC : Hochiminh city HN : Hanoi KPIs : Key Performance Indicators OECD : Organization for Economic Corporation and Development PESTL : Political Economic Social Technical and Legal PNJ : Phu Nhuan Jewelry Co. SEC : Social Economic Class SME : Small and Medium Enterprise SBJ : Saigon Bank Jewelry SJC : Saigon Jewelry Company SWOT : Strengths, Weaknesses, Opportunities and Threats USD : United States Dollars ii MBAVB2 NGUYEN THI HONG THU 2011 LIST OF FIGURES Figure 2.1 : Internet support growth strategy 8 Figure 2.2 : Maslow hierarchy of needs 17 Figure 3.1 : Global fashion jewelry sales (2001-2006), USD billion 25 Figure 3.2 : Geographic share of the global fashion jewelry consumption 26 Figure 3.3 : Market Trends in 2006 26 Figure 3.4 : Projected global fashion jewelry sales (2010,2015), USD billion 27 Figure 4.1 : Jemma online purchase order 39 Figure 4.2 : Jemma online turnover 39 Figure 4.3 : Jemma web visitors 40 Figure 4.4 : Jemma online product assortment 45 Figure 4.5 : Products portfolio by price range 45 Figure 4.6 : Consumer income in key cities 52 Figure 4.7 : Contribution of income group in key cities 52 Figure 4.8 : Online user profile 53 Figure 4.9 : Demographic of internet users –HN&HMC 53 Figure 4.10 : Bank account ownership – HN &HCMC 53 Figure 4.11 : Consumer behavior - choices of information sources 59 Figure 4.12 : Buying occasions 59 iii MBAVB2 NGUYEN THI HONG THU 2011 LIST OF TABLES Table 2.1 : Four marketing mix at consumer point of view 10 Table 3.1 : Fashion jewelry market structured by pricing and material of products 28 Table 3.2 : Jemma SWOT analysis 36 Table 4.1 : Operation cost estimated by shop type 38 Table 4.2 : Jemma online turnover 39 Table 4.3 : Jemma online marketing strengths and weaknesses 43 Table 4.4 : List of fashion jewelry website (products selling in Vietnam market) 48 Table 4.5 : Stage of model of internet marketing of fashion jewelry website 49 Table 4.6 : Important level of purchase KPIs 60 Table 4.7 : Barriers to prevent online purchase 60 Table 4.8 : Jemma and consumer behavior summary 61 LIST OF PICTURES Picture 4.1 : Jemma online product presentation 41 Picture 4.2 : Jemma web image 41 Picture 4.3 : Example of Jemma traditional store list and store images 43 Picture 4.4 : Jemma and its competitors – pricing segmentation 50 Picture 4.5 : Vietnamese urban consumer perception about brand 54 [...]... current biggest and strategic issue of Jemma that is building marketing strategy for online marketing channel Marketing mix activities proposed help to build Jemma online channel not only in short term but also in long term MBAVB2 NGUYEN THI HONG THU 2011 7 CHAPTER II: LITERATEUR REVIEW 2.1 INTERNET MARKETING STRATEGY 1 Marketing strategy 2 Marketing mix 3 Internet marketing mix 2.2 UNDERSTANDING CONSUMER... NGUYEN THI HONG THU 2011 4 (3) Identify marketing strategy for Jemma online marketing channels and propose marketing mix for Jemma promote its online marketing channel 1.3 RESEARCH DESIGN 1.3.1 Desk research (secondary data) Jewelry fashion is a new product category in Vietnam which has no official market record The data uses for this thesis is collected from Jemma information source, public announcements,... strategy and develop marketing activities to improve online penetration The problem statement therefore is to develop Jemma online marketing strategy to meet penetration objective and boost sales This final project is designed to help Jemma develop its marketing activities for online distribution channel from studying fashion jewelry buying behaviors of Jemma target customers The proposed marketing mix activities... competitive marketing strategy, it is ready to begin planning the details of the marketing mix The marketing mix is set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market 2.1.2 Marketing stimuli and marketing mix: Marketing stimuli (marketing mix) consist of the four Ps: product, price, place and promotion Other stimuli include significant forces... consumers In 2010, Jemma achieve 3 billion vnd turnover (approximate 200 thousands USD) MBAVB2 NGUYEN THI HONG THU 2011 3 After 3 months operate, Jemma online marketing did not achieve its set target which caused by no marketing strategy specific for online marketing channel To growth this channel in long-term and meet break-even target, Jemma must re-visit its business situation, define internet strategy and... process 3 Consumer decision on new products or services MBAVB2 NGUYEN THI HONG THU 2011 8 2.1 INTERNET MARKETING STRATEGY 2.1.1 Marketing strategy: The strategic plan defines the company's overall mission and objectives Marketing strategy is the marketing logic by which the business focus to achieve its marketing objectives and help accomplish the overall strategic objectives Fundamentally, the market... referring to this study Theory about marketing strategy and marketing mix, marketing for internet channel is also mentioned in this chapter As consumer behavior is a core of marketing activities, consumer decision process is followed to help identify insights to boost up Jemma online penetration CHAPTER 3: FASHION JEWELRY MARKET, INTERNET CHANNEL LANDSCAPE, AND JEMMA INTRODUCTION In this chapter, we... but this strategy will only be possible for retail products that need limited pre-sales and after-sales support For existing geographical markets in which a company already has a mechanism for distribution in the form of agents and distributors, the situation is more complex, and there is the threat of channel conflict 2.1.3.4 Promotion: The promotion element of the marketing mix refers to how marketing. .. marketing theory, p.111) MBAVB2 NGUYEN THI HONG THU 2011 11 2.1.3 Internet marketing mix: Given the potential implications of internet on marketing mix, theory of internet marketing extents key elements of the marketing mix to 7Ps (2006, Internet marketing Third Edition, Prentice Hall, p.215) By which, the selection of the marketing mix is developed base on detailed knowledge of buyer behavior collected... the survey developed for this research CHAPTER 5: RECOMMENDATION Basing on the situational analysis, marketing activities (marketing mix-7Ps) to promote Jemma online marketing channel will be proposed CHAPTER 6: CONCLUSION This chapter summarizes the previous chapters and evaluates the recommended solutions 6 SIGNIFICANCE OF THE STUDY This research has a practical contribution to Jemma business improvement . MBAVB2 NGUYEN THI HONG THU 2011 (3) Identify marketing strategy for Jemma online marketing channels and propose marketing mix for Jemma promote its online marketing channel 1.3 RESEARCH DESIGN 1.3.1. help Jemma promote its internet shopping channel building on insights of Jemma target customers. The outcome will be a marketing strategy proposal cover 7Ps of marketing mix activities for Jemma. contribution to Jemma business improvement. It helps to solve current biggest and strategic issue of Jemma that is building marketing strategy for online marketing channel. Marketing mix activities