chiến lược thâm nhập thị trường hàn quốc của CTY bitis hadi green

TABLE OF CONTENT I INTRODUCTION .1 II SWOT & MACRO – ENVIRONMENT ANALYSIS .2 SWOT of the company 2 The Macro – environment .3 2.1 Economic environment a) Overview b) Human Development Progress for South Korea c) Government size and Tax’s policy .5 d) Open market ( Open economy) e) Labor Features and Structure .6 2.2 Political and legal environment .6 a) Political .6 b) Legal 2.3 Social environment a) Advantages b) Challenges 2.4 Demographic environment 10 2.5 Natural environment 10 2.6 Technological environment 11 a) The development of Internet and Ecommerce in Korea .11 b) The impacts of technological factors on Biti’s company 15 III Competitors 18 3.1 Shoopen 18 3.2 ABC MART(Japan ) 18 3.3 KOLCA( Korea ) 18 3.4 T hud .19 3.5 FILA 19 MARKET ENTRY STRATEGY 20 Biti’s entry mode 20 Targeted market 21 IV MARKETING MIX STRATEGY( 7Ps ) 21 Product 21 Place .24 Price .25 Promotion 26 People 27 Process 27 Physical aspects 28 V VI CONCLUSION 29 REFERENCES 30 I INTRODUCTION  Company: Biti's (full name: Binh Tien consumer goods manufacturing company) is a brand specializing in shoes and sandals manufacturing in Vietnam, established in District 6, Ho Chi Minh City in 1982 Biti’s accounted for 15% of the domestic footwear market in 2016 Biti’s products have a renowned reputation of being extraordinarily long lasting  A business leader has a great influence on the operation and regulations of the marketing department must work closely with other functions in the company such as finance-accounting, materials - production, succession planning, upgrading and development, design department, human resources department These units must be closely coordinated within the Company to accomplish the plan set forth in the company  The company now has relationships with hundreds of companies in the country and abroad The company imported raw materials for the production of footwear from Korea, Taiwan, and China  Bitis is rated one of the companies with a large distribution network with branch centers, 156 marketing outlets, more than 1500 retail distribution intermediaries  Biti’s Hunter is the new line of products added to the company’s portfolio, since its release in early 2016, it has become the most sought after the products of a wide range of products that the company has to offer and become the company’s most efficient line of products thus far  With sudden burst popularity in the company after the release of this line of products, we believe that this particular line has a lot of potential  Biti’s Mission: Today, Biti's has not only stopped in the domestic and regional markets but also brought the Vietnamese brand into the international market And from So Biti's affirmed the brand name of Vietnam and Vietnamese high-quality products in the international market  Mission statement: “ Tender care of your feet” II SWOT & MACRO – ENVIRONMENT ANALYSIS SWOT of the company Strength Weakness -High-quality products, wide range, low -Financial problems: Preparing to penetrate price, suitable for wearing -Strong reputation in new market costs Vietnam and -Lack of reputation: Company faces a international market problem of creating a new perception of Biti’s -Physical resources: modern machine, -HR is not really good, need to be trained to technology for manufacturing shoes be more professional -Used Son Tung MTP (he has lots of fans in Korea) as a KOL, Biti’s shoes appeared in his music video for promotion Opportunity   Korea is a potential market with  Have to compete purchasing power of consumers is manufacturer quite good products are favorable thanks to Korean are interested in fashion quickly in catching trends, various in and this country is the origin of designs, and especially low in price so many trendy styles, having a huge that it can meet the demand of people impact on the fashion industry in in all income level in is the the Chinese products  China with large scale, high growth and the the world  Threat largest world Its Need to produce more attractive Products made in Vietnam are now designs, compared to others shoes more and more favorable thanks to brand in the world (Adidas, Nike, ) low in price but good in quality and and in Korea(Fila, ) design, compared to products from China, India, The Macro – environment 2.1 Economic environment a) Overview The economy of South Korea is the 4th largest in Asia and the 11th largest in the world South Korea has experienced one of the largest economic transformations of the past 60 years Given its limited geographical size, natural resources and population size (a labor force of almost 28 million people out of its 51.2 million population), the country has devoted special attention to technology development and innovation to promote growth, growing from a predominantly rural, agricultural nation into an urban, industrialized country Industry represents 35.9% of the GDP and employs 24.8% of the workforce Year GDP GDP (in Bil US$ PPP) capita (in per GDP growth US$ (real) PPP) Inflation rate Unemployment Government (in Percent) (in debt (in % of GDP) Percent) 2016 1,933.5 37,730 2.8 % 1.0 % 3.7 % 40.0 % 2017 2,029.0 39,434 3.1 % 1.9 % 3.7 % 39.8 % South Korea Consumer: =>> All the index of the whole economy of Korea is proving that they are developing dramatically, the standard of living is more and more higher In Korea, people in young age are quite interested in the entertainment, accessories, clothes, because they have enough income to afford the daily living standard, spend, and the left money is spent on making their appearance Nowadays, the market of shoes, clothes, accessories increases sharply, the total sales of these items are rasing up, it creates the opportunities for all sellers from local brands to foreign brands b) Human Development Progress for South Korea  South Korea is ranked 15th in the latest Human Development Index  Life expectancy is high (80.6) and public expenditure on education and training high (>4% of GDP)  The country is highly urbanised (83% of the population)  Income and wealth inequality is low but it has been increasing in recent years  Number of people uses Internet: 81,5% population (2011) =>> The young population, the high quality of education, and the life expectancy is high is creating the potential customers for the shoe’s market, especially sneaker, and Bitis The urbanization is developing and number of people uses internet is high help brands to increase the effective of digital marketing and build up the location of showrooms c) Government size and Tax’s policy The top personal income tax rate has been raised to 42 percent, and the top corporate tax rate has been raised to 25 percent Both rates are subject to a 10 percent surtax The overall tax burden equals 26.3 percent of total domestic income Over the past three years, government spending has amounted to 32.4 percent of the country’s output (GDP), and budget surpluses have averaged 1.4 percent of GDP Public debt is equivalent to 39.8 percent of GDP d) Open market ( Open economy) The combined value of exports and imports is equal to 80.8 percent of GDP The average applied tariff rate is 4.8 percent In 2018, according to the WTO, South Korea had 394 nontariff measures in force Foreign investment in some sectors remains restricted, and decisive policy reforms to facilitate greater investment flows have been absent The financial sector is competitive, but business start-ups still struggle to obtain financing Regarding South Korea's commitment to reduce import tax for Vietnam, South Korea has completed the elimination of import tax as committed in the AKFTA Agreement from 2010 Accordingly, up to now, 90.9% of goods Vietnam's goods exported to South Korea will enjoy 0% tax rate if they have a certificate of origin =>> This advantage of tariff give a big chance for Bitis to penetrate into the shoe’s market of Korea, the competitive cost with other foreign brand like Adidas, Nike, e) Labor Features and Structure Growth and changes in the structure and ownership pattern of the economy also have changed the labor force By 1958, individual private farmers: >70% of the labor force, had been transformed into or replaced by state or collective farmers Labor force (12.6 million)—by occupation:  Agricultural: 35%  Industry and services: 65% =>> The restructuring of economy in Korea drags on the standard of people is higher than before Contemporaneously, this makes the urbanizations develop faster, improve the income of people which creates the potential customers for shoe brands like Bitis 2.2 Political and legal environment a) Political South Korea is a democratic country, in which maximum power is vested in the president After the financial crisis in 1997, This country was willing to undertake strong across the provinces of Korea, thereby help increase the number of customers and increase sales In addition, with effective utilities and tools of e-commerce, businesses will no longer passively wait for customers to come but will be proactive in finding customers thereby contributing to accelerating sales of businesses - Creating a competitive advantage of Biti’s company: Without e-commerce, medium-sized businesses will have difficulty competing with big fashion brands in the world (such as Adidas, Nike, ) because of the gap in capital, market, human resources, and customer When e-commerce applications, this gap will be narrowed because Biti’s company itself can cut many costs Moreover, with the advantage of online sales, Biti’s will create its own identity about a new business method which is different from traditional business It is these things that will create a competitive advantage for businesses, help businesses compete with their competitors So today, Biti’s with e-commerce has an intimate relationship related to the survival of the business However, to apply e-commerce for the long-term development of Biti’s, it is necessary to consider and pay attention to many factors and have an appropriate roadmap for the path of brand development and market expansion in Korea Competitors 3.1 Shoopen SHOOPEN can be found almost everywhere in metropolitan cities SHOOPEN shoes are sold at extremely cheap prices This brand also provides a versatile range of styles that suit everyone: from the elderly to children Both women and men can shop at SHOOPEN together You can find all kinds of shoes at SHOOPEN; you will be able to find many canvas shoes, sports sneakers, leather dress shoes, snow boots, and many more at SHOOPEN 22 3.2 ABC MART(Japan ) ABC Mart is a great place for shopping for sports sneakers in Korea ABC Mart does not make their own shoes This brand is more like a retailer that sells a selection of famous sports sneakers like Adidas, Nike, and Puma You can see the trendiest brands and shoes by visiting this store ABC MART brings together all the latest, popular sneakers in one place All the brands that we are already familiar with, such as NIKE, ADIDAS, REEBOK, VANS, CONVERSE (ALL STAR), TOMMY, PUMA, etc can all be found at ABC Mart A total of 150 brands are represented in every ABC Mart store 3.3 KOLCA( Korea ) This brand resembles VANS, an American sports casual brand Anyway, this brand is now super popular among teenagers and college students in Korea KOLCA's design is centered around simplicity KOLCA does not use multiple colors That's why these sneakers are perfect for daily uses These sneakers are sporty and cute KOLCA is not so cheap when you compare this brand to other SPA brands like SHOOPEN However, this brand is growing big in Korea and many Korean youngsters became loyal fans This brand is expanding its product lines every season, and now consumers can choose from an extensive collection of sneakers and clothing 3.4 T hud Other authentic Korean sneakers brand, T hud, became famous in recent years Korean youngsters usually prefer sporty sneakers over dress shoes Some guys purposefully match a pair of sports sneakers to a formal outfit This Korean sneakers brand also plays with simple color coordination Unlike KOLCA, T Hud always has some accentuating features and is a bit more stylish than the former one You can now bid a farewell to the expensive, fancy sports brands.T.Hud can pull a style at an inexpensive price 23 3.5 FILA I see a lot of young people wearing FILA sneakers, bags, and clothes on the streets in Korea My theory behind FILA's explosive growth in the Korean market is the price FILA set its price range much lower than other major sportswear brands like Nike and Puma They recently hired a new design director, and was able to improve the quality and style is almost compatible with the mainstream brands In Korea society, group thinking exists everywhere Korean people have a social tendency to pursuing popular culture and trends Once a particular brand became a mainstream trend, everybody jumps in Therefore, it is not difficult to find a trending style on the streets when you are in Korea because people tend to dress in similar styles FILA recently became a trend among young people Their low-price policy attracted many youngsters Now FILA is one of the leading sportswear in Korea In addition to the simplicity of FILA's designs, both men and women can wear their clothes and sneakers III.MARKET ENTRY STRATEGY Biti’s entry mode Vietnam - Korea Free Trade Agreement (VKFTA) was signed on 5/5/2015 and officially came into effect on 12/20/2015 Compared to the ASEAN - Korea FTA (AKFTA), VKFTA in Vietnam and South Korea give more incentives to each other in the fields of goods, services and investment With this advantage, Biti's has chosen to penetrate the export market to optimize costs and offer competitive prices for its products Biti's method of entering the Korean market is exporting in the form of setting up sales representative offices and branches owned by the company to run sales and distribution agents , promotion activities and customer care services in the Korean market In this manner, Biti's will undertake key tasks in the Korean market such as participating in trade fairs, conducting market research, finding distributors, finding and serving customers, etc Biti's will 24 choose this route because Korea is a potential market and has the potential to generate high sales and strategic importance Biti's will gradually establish national headquarters and distribution centers At the highest level, Biti's will build a fully functional sales and hire staff in Korea + Advantages: With the method of exporting through establishing a sales representative office and branches owned by the enterprise, Biti's will have many advantages due to the saving of intermediary and maximum costs Minimize risk and maximize flexibility Moreover, dealing directly with foreign units, businesses can accurately grasp the changing needs and tastes of customers, thereby offering solutions to adapt products and business activities mine In addition, with this form, enterprises can control their prices and products in foreign markets + Disadvantages: Because of export organization, Biti's must invest new capital to research the market, build offices, representative agencies and find customers Especially businesses must be financially autonomous Initially, there will also be difficulties in competing with big brands and building trust with customers Targeted market South Korea, an East Asian nation on the southern half of the Korean Peninsula The country is known for the popular K-pop industry, high-tech cities such as Seoul, Busan, where people wear fashionable clothes and luxurious accessories The footwear market is growing fast, and shoemakers see the opportunity when selling their products in this potentially developing market With the population of 52 million, Biti’s should invest in this market to expand their business Young and dynamic generation in big metropolises, along with the development of technology, infrastructure and traffic in Korea, it would be a great place to settle down new branch Biti’s intention to open new shops in in high population density area: Busan, Andong, Seoul, then spread to nearby area to promote the products and brand 25 IV MARKETING MIX STRATEGY( 7Ps ) Product 26  Levels of product:  Core product: Bitis can protect customers’s feet from being injured and coldness 27  Actual product: Design: Modern, trendy design Because Koreans often pay a lot of attention to beautiful and trendy design Material: Layered, open-weave, antibacterial Liteknit fabric brings breathable comfort and a sock-like fit Koreans prefer stylish and comfortable sneakers because of dynamic lifestyle Color: Black, White, Pink, Grey and Orange These colors are easy to mix with clothes They are also loved by young people Height: Insole height reaches 5cm => Easy to outside activities  Expected product: It can protect people from coldness and harmful objects It is also stylish and comfortable, suitable for people to wear in many conditions: going to school, going outside, travelling, playing sports,  Augmented product: Bitis is one of the most famous shoes brand in Vietnam Their products are famous for high tensile strength When launching South Korean market, Bitis will focus more on the design-which is very important to South Korean customers Bitis also have after-sale service and customer programs, which will increase loyalty customers  Potential product: In the future, Bitis can launch some customized products: waterproof sneakers, personalized sneakers which designed by customers’s preference using high technology advancements or product line inspired by a famous idol 28  Product strategy: Bitis uses global localization strategy  Product image: Dynamic, Comfortable and Trendy  Place Direct distribution: Through Bitis’s stores, in early stage it will focus more on rural areas to avoid  the competency with other brands in South Korea Ecommerce: South Korean consumers have shown a willingness to make on-  line purchases direct from a company's non-South Korean website in order to save money Therefore, Bitis can sell products on their website, social media  Indirect distribution: Bitis can sell on some popular e-commerce sites such as: Gmarket.co.kr,  11street, Coupang, Ecommerce is big in South Korea due to many tech-savy consumers and well-developed internet infrastructure Bitis can sell products in some supermarkets, superstores in South Korea such  as: ABC mart, LesMore, Price First, because Bitis is new brand and also the foreign sneaker brand to come in Korea market where many big brands like Fila, Nike, Adidas are trying to gain the market share and dominate the market in Korea To compete with them, Bitis have to apply the penetration pricing strategy to gain faster and faster each share in the market Price is one of the easiest ways to differentiate new entrants among existing market players The overarching goal of the pricing strategy is to capture market share, switch customers from competitors To detail: Advantages of Using Penetration Pricing Strategy when implementing to Korea Market:  High adoption and diffusion: Penetration pricing allows a Bitis to be quickly accepted and adopted by customers 29  Marketplace dominance: Other Brands are typically caught off guard in a penetration pricing strategy and are afforded little time to react Bitis is able to utilize the opportunity to switch over as many customers as possible  Economies of scale: The pricing strategy generates high sales quantity that allows a firm to realize economies of scale and lower marginal cost  Increased goodwill: Customers that are able to find a bargain in a product or service are likely to return to the firm in the future In addition, the increased goodwill creates positive word of mouth  High turnover: Penetration pricing results in an increased turnover rate, making vertical supply chain partners such as retailers and distributors happy Promotion Run a social media competition: Bitis can use the media competition with trending problems like the strategy they have applied successful in vietnam Running a competition on your social media pages and accounts is a great way to garner customer attention and engage existing followers The way to a successful social media content is offering desirable prizes that are in line with Bitis like pairs of sneaker, new sneaker or limited products And most importantly, make it simple, fun, and easy to join Using KOL/ Influencer to promote brand: Using right KOL, Influencer like BlackPink, BTS, the famous singer in Korea to become ambassador and use their influences to promote Bitis to target customer The effective using of KOL makes first attraction to the image of brand, encourage the curiosity about the brand Beside running campaign with KOL, Bitis shoul develop the community of reviewer in Korea because: 30 Before buying, customers tend to look for reviews online as part of their decision-making process Blogs, Vlogs from reviewers have become a common source for unbiased product information Utilise social platform advertisement like Facebook, Instagram, Google, Kakao, The target customers of Bitis are priority to young genaration, with the mindset of being cool, street style 90% of them are using at least one social platform, and this is the reason why Bitis has to focus on utilising social advertisement to utilise the leading action, gain more interest of customer Bitis can apply strategy: “ Too more, too less" means high demand of customer is higher, the low volume of products will be sold, create the mindset of trying to desire to own the products more People People are the most important element of any service or experience Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the individual needs of the person consuming it Any element of the marketing mix will also have its impact on other elements of a business, but the people element is one where the importance of regarding marketing as an integral part of the way you business is crystal clear Since people are the most crucial determination of one successful business, Bitis’s try to recruit the right talent in all parts of the organization These employees, and also the branch general manager are Korean, who thoroughly understand the cultural context, customer behaviour or customs and practices of the country They will be trained by Bitis’s skilled and experienced professionals to become qualified staff in their own field Training courses will focus on the high quality standards of customer services, bring due care to all the employee’s activities, especially those which are directly related to customer’s experiences The staff also acts as a medium to show the company’s image to all the customers 31 Moreover, the employees are more than a ‘mean’ that Bitis’s uses to get things done By creating a competitive working environment, our staff would face great challenges day by day, enhancing their competences and bring benefits not only to our stakeholders, including those employees, but also to the society as a whole Whether they are C - suite employees or shop staff, Bitis’s would seriously take into account and value their ideas Process Process refers to the processes involved in delivering your products and services to the customer It is also about being 'easy to business with' As the delivery of your service is usually done with the customer presence so how the service is delivered is once again part of what the consumer is paying for About technology process, Bitis’s develops a friendly-user web presence, which could be handled by just a few seconds with some clicks All the products are listed and presented clearly in order to easily access by the customers The buying process will be streamlined with a little steps and fast delivery will become one of the key competitive advantages in comparison to other rivals In offline process, Bitis’s focus on customer services, from welcoming them in a hospitality way, advising them for choosing and helping them to trying our products, even after finishing their purchases, our customer will receive the insurance and return policy, and become a member of Bitis’s community with a variety of benefits to maintain the long lasting relationship between them and our company Physical aspects Physical Evidence is an important factor affecting customer expectations and perceptions of service quality Once an enterprise understands its importance, it is possible to plan effectively to promote its advantages Strategies for establishing a physical environment must be aligned with the overall goals and vision of the business This planner should be knowledgeable about the goals of the business and able to use physical evidence elements to implement it effectively 32 Understanding the importance of Physical Evidence, Biti's will focus from product packaging, equipment supply, external relations to making a difference Service Physical Evidence setting plays an important role, is an intuitive factor affecting customers Biti's will focus on building the service to bring real experience from customers so that it can build a unique brand image of Biti's for its customers The logical layout from Physical Evidence will boost productivity Each element of the service environment provides an opportunity for both employees and customers to deliver accurate messages In addition to focusing on products and services, Biti's also has to build a showroom with colors, decorate, layout, music, fragrance, signage, seating area and fast delivery Can be used in resonance with market segments to deliver the best customer experience 33 V CONCLUSION After nearly 40 years established, failures and successes have gone down in the history of Bitis, all of which helped Bitis to have more precious lessons and experiences The factors that support Bitis to ensure a strong position in customer’s minds are focusing on building án developing a strong brand image, have the ability to create differentiated products, and have a strong sales and distribution system Despite a great failure in the past for lacking in updating new trends in the market, Bitis has come back with a totally new product made in Vietnam “Bitis Hunter” This product has helped Bitis to turn over a new leaf in Vietnam, making a deep impression in domestic consumers and promising to reach international markets in following years We chose Korea as a potential market for Bitis to set its footprint Korean society is quick in updating new trends, from which many fashionable trends are originated and spread all over the world Targeting in young people in the age group of 15 -30, we believe that these are our potential customers who are looking for new brands with a demand of showing their own identities Moreover, Vietnam - Korea Free Trade Agreement (VKFTA) was signed on 5/5/2015 and officially came into effect on 12/20/2015 Compared to the ASEAN - Korea FTA (AKFTA), VKFTA in Vietnam and South Korea give more incentives to each other in the fields of goods, services and investment With this advantage, Biti's has chosen to penetrate the export market to optimize costs and offer competitive prices for its products However, there are still some challenges that Bitis have to face when entry to Korea, such as: invest new capital to research the market, compete with other products from Korea (Fila, KOLCA, ), from Asian companies like China or Japan, and from international companies (Adidas, Puma, ), and improving new designs to meet the demand and catch the insight of foreign customers Bitis needs to invest more time, effort, capital to build a completed strategy based on 7Ps principle to ready to entry a new market 34 VI REFERENCES Toc.123doc.org (2019) Phân tích SWOT Biti’s - Tài liệu text [online] Available at: https://toc.123doc.org/document/257971-phan-tich-swot-cua-biti-s.htm Globalization Partners International (2019) South Korea: Culture and Tradition Globalization Partners International [online] Available at: https://www.globalizationpartners.com/2017/10/09/south-korea-culture-and-tradition/ Wadolowska, A (2019) South Korea eCommerce Insights | 31.8 Million eCommerce Users By 2021 - eShopWorld Blog [online] eShopWorld Blog Available at: https://learning.eshopworld.com/cross-border-ecommerce-blog/south-korea-ecommerceinsights-2017/ Mehra, G (2019) Ecommerce in South Korea: Aggressive Discounting, Rewards | Practical Ecommerce [online] Practical Ecommerce Available at: https://www.practicalecommerce.com/Ecommerce-in-South-Korea-Aggressive-DiscountingRewards Marketing Admicro (2019) Marketing strategy: Biti's won big thanks to clever viral tactics [online] Available at: https://marketingai.admicro.vn/chien-luoc-marketing-bitis/ Doc.edu.vn (2019) Đề tài Chiến lược thâm nhập thị trường Trung Quốc công ty bitis Tài liệu, ebook, giáo trình [online] Available at: http://doc.edu.vn/tai-lieu/de-tai-chien-luoctham-nhap-thi-truong-trung-quoc-cua-cong-ty-bitis-86422/ Globalization Partners International (2019) South Korea: Culture and Tradition Globalization Partners International [online] Available at: https://www.globalizationpartners.com/2017/10/09/south-korea-culture-and-tradition/ SOUTH KOREA: REACHING THE CONSUMER 35 https://en.portal.santandertrade.com/analyse-markets/south-korea/reaching-the-consumers The Natural Environment https://www.lonelyplanet.com/south-korea/background/other-features/1568c4fe-bfa2-4e9d9411-0b542ad1a4ac/a/nar/1568c4fe-bfa2-4e9d-9411-0b542ad1a4ac/357351 36 ... at: https://marketingai.admicro.vn/chien-luoc-marketing -bitis/ Doc.edu.vn (2019) Đề tài Chiến lược thâm nhập thị trường Trung Quốc công ty bitis Tài liệu, ebook, giáo trình [online] Available at:... lacking in updating new trends in the market, Bitis has come back with a totally new product made in Vietnam ? ?Bitis Hunter” This product has helped Bitis to turn over a new leaf in Vietnam, making... successes have gone down in the history of Bitis, all of which helped Bitis to have more precious lessons and experiences The factors that support Bitis to ensure a strong position in customer’s