International marketing ananas international marketing plan in thailand market

MINISTRY OF FINANCE UNIVERSITY OF FINANCE AND MARKETING INTERNATIONAL MARKETING ANANAS INTERNATIONAL MARKETING PLAN IN THAILAND MARKET Lecturer: Ngô Minh Trang Group : Lê Nguyễn Mai Anh Nghiêm Thị Thanh Phương Nguyễn Thị Thu Phương Nguyễn Ngọc Thu Phương Vũ Trung Anh Sang TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES Introduction 1.1 Brief overview of the company Ananas was first launched in 2012, is a brand belonging to Footwear Corporation Dong Hung Group - the "big man" in the shoemaking industry However, the company's marketing strategy at that time was not effective, causing the brand to fail for the first time It was not until 2017 that Ananas finally turned the tables, started to be recognized and held its position among the young generations As Ananas's target customers aging from 18 to 25 who are energetic, dynamic and always in motion, Ananas brand’s top priority is customer's convenience and comfort when wearing our shoes but still trendy and being able to reflect their own personalities Hence, "high quality" and "reasonable price" are core values that we offer to our dear customers With the message DiscoverYOU, Ananas wants to remind everyone that "Whatever you do, you need to know yourself and know what you want" The more you understand who you are, the easier life will be Ananas is also on the journey to discovering the brand itself, finding our originalities, and building our own path 1.2 Company’s main product Ananas product's are vulcanized shoes and sneakers Vulcanized is a longstanding shoe manufacturing method, reflected in vintage shoes with rubber soles and minimalist designs such as Converse Chuck Taylor All Star, Vans Old Skool This type of shoes is considered an everyday sneakers for its basic design and concept Customers can wear it to school, to work, friends meetings or even their skateboard practices By using this material and design, Ananas wants to integrate sustainability into our products, focusing on the original attributes of a shoe but still keeping up with the current fashion trends, as it is the brand lifestyle that we are aiming for All of Ananas products are manufactured by our parent brand Dong Hung Group and directly distributed at Ananas stores in Ho Chi Minh City In addition to the main shoe lines currently available in stores which are Basas, Vintas, Urbas and Pattas, Ananas also sells other clothing products 1.3 Target country: Thailand According to the ASEAN Consumer Survey conducted by HKTDC Research, ASEAN consumers, including those in Thailand, are willing to spend more on better quality products and have a strong sense of personal style For international brands, Thailand is a key market among the developing Asian countries, not only because of its growing demand from the emerging middle-income class, but also the country’s flourishing tourism sector Also, Thailand is a South East Asian country with close proximity to Vietnam Hence, the two countries partly share different things in common including climate characteristics, genetic traits, religions and most importantly, culture 2.Research Methodology Secondary data resources on Internet 3.Situational Analysis 3.1 Company analysis Ananas was founded in 2012 under Dong Hung Footwear Group Dong Hung Footwear Joint Stock Company was established on October 1, 1992 with the mission to provide Vietnamese and international consumers with high-quality footwear products at reasonable prices With our modern factories and advanced shoe production process, Dong Hung Footwear Group aspires to be a companion of consumers around the world in their journey of discovering life Moreover, Dong Hung Footwear Group has more than 20 years of experience in manufacturing vulcanized shoes and being the main manufacturer for not only domestic but also foreign major brands such as Puma, Reebok and Burberry Over nearly 30 years of development, Dong Hung is in the top 30 Vietnamese leather shoe manufacturing enterprises, with a total annual export turnover of more than 150 million USD and more than 10 million pairs of shoes Therefore, we are confident that Ananas possesses the ability to provide customers with high-quality products which absolutely not inferior to any other brands 3.2 Organization Assets and Skills ❖ Assets: Over the past years, Ananas has stores in Ho Chi Minh City Customers in other cities and provinces could also purchase our product through Ananas's website and Facebook fanpage All Ananas products are made by parent brand Dong Hung footwear - with more than 20 years of experience in footwear manufacturing and have cooperated with many large and small, both domestic and foreign shoe brands Currently, Dong Hung Group has member companies, affiliated branches, and a joint venture company associated with business components, including: shoe production, shoe sole production , shoe production supporting stages, logistic activities, footwear supply and distribution on ecommerce channels, retail stores etc ❖ Skills: Ananas and parent firm - Dong Hung Footwear Group has constantly researched and updated the latest technology, manufacturing methods With factories meeting international standards, modern production processes, product safety are guaranteed by limiting chemicals used in production in accordance with EC 1907/2006 (REACH) Dong Hung Group also has long experience in the field of footwear production and excellent human resources with professional skills Before being delivered to consumers, each Ananas product has to go through a lot of meticulous steps from product design, stitching and evaluation to create perfect shoes with the best quality All manufacturing factories are equipped with professional wastewater treatment systems in compliance with the Vietnam laws and regulations 3.3 Market Analysis 3.3.1 Business Environment Analysis 3.3.1.1 Political and Legal Environments Thailand is one of almost 40 constitutional monarchies that exist in the world today Normally, an elected Prime Minister heads the government, while the head of state is the hereditary monarch.Thailand is one of almost 40 constitutional monarchies that exist in the world today Normally, an elected Prime Minister heads the government, while the head of state is the hereditary monarch In Thailand, the King exercises his legislative power through the Parliament, executive power through Cabinet and judicial power through the courts Thailand is now facing continuous anti-government protests by students demanding political reforms that also include the role of the monarchy in politics The protests were initially triggered by the dissolution of the Future Party (FFP) in late February 2020, which criticized Prayut, changes to the Thai constitution Persistent political tensions can undermine the credibility and effectiveness of the institutional framework, especially if they hinder the ability of authorities to effectively enforce macroeconomic policy such as support finance during the Covid-19 epidemic From there, it could undermine the interest of foreign investors and cause difficulties for businesses to thrive in Thailand The Foreign and Commonwealth Office (FCO) assesses that terrorists are very likely to try to carry out attacks in Thailand Since 2004, there have been almost daily attacks in Thailand’s deep south, including arson, bombings and shootings Targets have included civilians and members of the security forces, government offices, tourist hotels, discos, bars, shops, marketplaces, supermarkets, schools, transport infrastructure and trains Corruption hinders economic and social development also needs to be taken seriously Thailand ranked 99th with the Philippines (out of 180 countries and regions) in the Corruption Perceptions Index 2018 of Transparency International on Corruption 2018 (Bangkok Post, 2019) Most sectors in Thailand are at high risk of corruption, and as a result, a lot of work is needed to deal with it However, Thailand’s periodic political volatility tends not to affect day-to-day business operations Although Thai politics is sometimes unstable, the administration of the country is very sound and all political parties in Thailand, without exception, are pro-business *Legal Consumer Protection Act (1979) The right to be informed Goods, domestic and imported, must bear appropriate labels description, name or trademark of manufacturer, location of manufacturer, information of the goods, and marks indicating countries of origin (imports) Labels are to be accurate and not misleading Advertisement must be truthful, honest, decent.[5] Unfair Contract Term Act (1997) Protects consumers with little ability to negotiate or negotiate Commercial Competition Law (1999) Maintaining free and fair competition of markets and discouraging business operators from engaging in anti-competition activities 3.3.1.2 Regulatory Environments Thailand belongs to the 10-member Association of Southeast Asian Nations (ASEAN), a regional free-trade and economic bloc comprising a total population of 600 million Thailand remains an attractive destination for foreign investors and business owners seeking out new markets to open a new or expand an existing business Nevertheless, those who wish to establish majority or wholly foreign-owned business entities need to be aware of Thailand’s laws and regulations regarding foreign investment ● Limits on Foreign Control and Right to Private Ownership and Establishment A foreign entity seeking to engage in any of these business activities must first obtain a Foreign Business License (FBL) from the Foreign Business Committee and the Director-General of the Department of Business Development (DBD) There are also cases for exemptions or special permissions from the Board of Investment or Industrial Estate Authority of Thailand, as well as through free-trade agreements and treaties between Thailand and certain nations The FBA details the types of business activities reserved for Thai nationals Foreign investment in those businesses must comprise less than 50 percent of share capital, unless specially permitted or otherwise exempt Restricted businesses in this list include: accounting, legal, architectural, and engineering services; retail and wholesale; advertising businesses; hotels; guided touring; selling food and beverages; and other service-sector businesses A foreign company can engage in List activities if a majority of the limited company’s shares are held by Thai nationals Any company with a majority of foreign shareholders (more than 50 percent) cannot engage in List activities unless it receives an exception from the Ministry of Commerce under its Foreign Business License (FBL) application Aside from these general categories, Thailand does not maintain a national security screening mechanism for investment, and investors can receive additional incentives/privileges if they invest in priority areas, such as high-technology industries ● Laws and Regulations on Foreign Direct Investment The Foreign Business Act (described in detail above) governs most investment activity by non-Thai nationals Other key laws governing foreign investment are the Alien Employment Act (1978) and the Investment Promotion Act (1977) ● Competition and Anti-Trust Laws The Office of Trade Competition Commission (OTCC) is an independent agency and the main enforcer of the Trade Competition Act B.E 2560 (2018) The OTCC comprises seven members nominated by a selection committee and endorsed by the Cabinet The government has authority to control the price of specific products and services under the Price of Goods and Services Act The MOC’s Department of Internal Trade administers the law and interacts with affected companies 3.3.1.3 Economic Environments Thailand is the second largest economy in Southeast Asia after Indonesia According to IMF, it is expected that growth will be at a moderate rate, accepting all stable values in the country Investment firms are forecast to remain the main driver of growth over the next few years, in line with the host company's infrastructure plan to attract private individuals The capital Bangkok has become the centre of economic activity and the most prosperous part of the country, accounting for about 60% of national GDP Thanks to its good infrastructure, the city is competing with Singapore to become a regional hub for air travel within Southeast Asia The relationship between Vietnam and Thailand is constantly developing steadily and well in all fields, especially in the economic and commercial sectors Vietnam - Thailand is a member of many regional and international forums, such as: ASEAN, ASEAN Economic Community (AEC), Asia-Pacific Economic Cooperation (APEC) According to ITPC, Thailand is currently the largest trading partner of Vietnam in ASEAN Particularly, Vietnam's merchandise exports to Thailand account for about a fifth of the total exports to ASEAN Inflation drops to 0.7% in 2019 and is estimated to drop to -1.1% in 2020 and will reach 0.6% by 2021 (IMF forecasts the World Economy in April 2020) Public debt remains relatively stable in 2019, according to IMF estimates of 42.4%, although it is expected to increase in 2020 and 2021 to 43% and 43.8%, respectively Despite high debt, household use standards, amounting to 49% of GDP in 2019 (Central Bank of Thailand), is still forecast to be high, reflecting real income levels The National Strategic Plan (2017-2036) focuses on improving the business environment, enhancing the country's competitiveness and long-term economic efficiency TABLE 3.1- GDP Thailand https://www.nordeatrade.com/en/explore-new-market/thailand/economical-context ● Income distribution Although wealth has increased in Thailand, not everyone has received a share of this growth Specifically, 91.7% of adults are in the group of assets below $ 10,000, 7.5% in the group from $ 10,000 to $ 100,000, and 0.7% in the group from $ 100,000 to $ million Only 0.1% are members of the wealth group over $ million Thailand's middle class is emerging and is expected to make up about 13% of all 10 FIGURE 7.2 - Poster ● Packaging Carton box: Length: 31.5cm Width: 18cm Height: 11cm Box: 230g Box + shoes: 820g All the information on the box will be translated to Thai except for the brand name 26 FIGURE 7.3-Ananas box 27 FIGURE 7.4- Ananas box FIGURE 7.5- Ananas box 28 ● Labeling There is no adjustment for the heel stamp (Hình 7.2 Price With the goal to maintain Vietnam's current price range in Thailand market, after considering all production costs, Ananas decides that the product will be priced according to cost-based pricing strategy In order to secure the company's profitability, Ananas will follow cost - plus pricing strategy In addition, all Ananas product lines are priced evenly, so that customers will perceive the company’s product as high-quality products, which is what the company wants to focus on Price for each line: Line product Price in Thai market Basas ฿760 Vintas ฿900 Urbas ฿950 Mulas ฿1000 Pattas ฿1450 TABLE 7.1- Price for each line Term of sale The company’s delivery condition is CIF ( Cost, Insurance, Freight ) The company will buy insurance for the order Specifically, we’ll sign the contract with Export Insurance services to ensure that if there’s an incident during the transporting process, the insurance company will have to deal with the customer Term of payment ● Customers can pay in many different forms such as cash, credit cards, COD (cash of delivery), etc ● At the store, the main forms of cash or credit card payment are ● As for online, COD will apply, and delivery within 2-3 days depending on the region (may take longer) 29 7.3 Place Analyzing the consumers: Ananas’s target customers are young, dynamic, trendy and diverse (aged 1825) They often prefer the trend and creativity in each product as well as distribution channels According to surveys, consumers tend to get products at sports goods stores in shopping centres In addition, 69% shop online on mobile devices, while 34% on computers Number of online shoppers 34.8 million people, market size 1.33 billion baht The average amount of shopping per person is 3844 baht per year (equal to Thailand's GDP of 22,600 baht or 7,273.56 USD for online shopping is approximately 1.7%) Objective: ● Ensure product flow and product availability ● Product protection (for indirect channels) ● Reduce costs and maximize profits (for direct channels) Selecting channels Ananas applies a selective distribution strategy and uses channel level or level - only sells Ananas’s products through direct channels (Facebook, Instagram, LAZADA and Shopee) and indirect, retailer channels in Bangkok (Carnival Store and Outcast Store) During two years, we will focus mainly on online channels and intermediaries to minimize costs, risks and increase brand awareness INDIRECT CHANNEL CHANNEL LOCATION CARNIVAL Siam Square Soi Pathum Wan District Siam Square Soi Pathum Wan District Central Ladprao Chatuchak District 332,877 Sukhumvit Soi 55 Wattana District 24,877 KNOCK BKK DISTRICT DIRECT CHANNEL 30 POPULATION 84,356 Fanpage (for Thailand): Facebook, Instagram LAZADA Shopee TABLE 7.2- Channel 7.4 Promotion ● Message: “DiscoverYou” - Via this message Ananas wants to remind everyone, especially young people, that "Whatever you do, you need to understand yourself and what you want" The more you understand who you are, the more accurate the decision will be The company applies Push Strategy to promote the product ● Objectives: - Inform the customer about the brand and product and create brand awareness by 30% target audience in Bangkok in the 1st year - Stimulate customers to purchase products through customer promotion activities and increase the number of products distributed by retailers via the trade promotion activities 7.4.1 Advertising Objectives: - Create brand awareness by 30% target audience in Bangkok in the 1st year - Inform the customer about the product and persuade them to try it 7.4.1.1 Social Media: We choose Facebook and Instagram to be our platform because of those wide accessibility and strong effect on young people Content, images and tvc about are designed and conceptualized to suit the trends and preferences of the Thai market The TVC’s message strategies will include both rational and emotional message strategies Not only show customers the quality of products through TVC about the meticulous production process from factories in Vietnam, but also express the spirit of Ananas - a shoe that inspires young people through the TVC advertises a product and source is active young people Facebook ads and instagram Ads are used to run the advertisement Execution techniques: Combination: Personality symbol and imagery 7.4.1.2 Support media: In Thailand, MRT (subway) is the common public transportation so posting posters at crowded subway stations may attract the attention of the target audience 31 Carnival and Knock Bkk retail stores are located in major department stores such as Siam Square Soi 1, Siam Square Soi 7, Central Ladprao and Sukhumvit Soi 55.So we’ll display our poster in space where many people pass by and are easy to see 32 FIGURE 7.6 – Poster Subway FIGURE 7.7- Poster subway 33 7.4.2 Sale promotion Objectives: Encourage customers to buy and drive sales ● Consumer - oriented: - Price-off deals: In the first week of product launching, we’ll discount 20% for customers who purchase in both e-commerce (Shopee, Lazada) or in retail stores In the annual discount festival in Thailand from June 15 to August 15, all products will be discounted up to 50% in both retail stores and online - Premiums: There will be premiums in year In June 2021, Ananas will launch a new product named Mulas - shoes without back or constraint around the foot's heel Customers who purchase this product will be given a Summer Ananas face-mask This program will last until the end of June FIGURE 7.8 – Ananas Mask A week before Christmas, when buying a shoe product the customer will be given a pair of plain colored socks ● Trade - oriented: - Dealer incentives: When each price-off deal happens, if the retail stores reach the revenue target set by the company, we will deduct an amount as commission to divide to the retailer 7.4.3 Public Relation: Objectives: Create a good image in customers and increase the brand awareness - Tham gia dựng booth bán hàng quảng bá sản phẩm hội chợ Thái Lan 34 - Donating 100 pairs of shoes for poor students in Bangkok city in back-toschool season 7.4.4 Promotion budget Promotion Expenditures (in year) Advertising Soci Othe Sale promotion Price Prem Public Relation Trad Spon Total : 2440000 baht TABLE 7.3- Promotion Budget Planning Budget COST In Vietnam 35 Shipping Warehouse - Cat Lai Port 3,000,000 VND Raw material 3.657.500.000 3.491.000 Transport fee(O/F) Document fee 931.000 Seal fee 233.000 Telex 698.000 Ask for paper C/O 582.000 1.164.000 Export customs services 1.862.000 Shipment Insurance Fees In Thailand Workers (5 people) 1.200.000.000 Warehouse 236.864.000 Transportation 15.550.000 Electron and water power 140.000.000 Marketing 2.000.000.000 Costs Incurred (10%) 611.394.000 Total 7.873.269.000 TABLE 8.1 - Budget Revenue Mulas: 10,000 x ฿1000 = ฿10.000.000 Basas: 12,000 x ฿760 = ฿9.120.000 Vintas: 8000 x ฿900 = ฿7.200.000 Urbas: 4000 x ฿950 = ฿3.800.000 Pattas: 1000 x ฿1450 = ฿1.450.000 Total ฿ 31570.000 approximately 24.178.368.952 VND 36 Profits: 16.305.099.952 Implementation and Control CONTROL Criteria Product Financial Distribution 37 Marketing Strategires Natural environment Politics TABLE 9.1- Control 38 10 Reference [1] Reaching the Thai consumer - Santandertrade.com (n.d.) https://santandertrade.com/en/portal/analyse-markets/thailand/reaching-the-consumers [2] Dong Hung footwear group https://www.donghungfootwear.com/ [3] Thai protests (2020), Wikipedia https://en.wikipedia.org/wiki/2020_Thai_protests [4] Thailand travel advice, GOV.UK 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Future of ASEAN-Time to Act (2018) https://www.pwc.com/sg/en/publications/assets/healthcare-future-asean-2018.pdf [13] THAILAND NATIONAL PROFILE http://infofile.pcd.go.th/haz/en_haz_POPs.pdf [14] The State of Fashion 2020 https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/the%20state %20of%20fashion%202020%20navigating%20uncertainty/the-state-of-fashion-2020-final.ashx [15] Thai economy outlook https://res.scbsonline.com/stocks/extra/35386_20190125143913.pdf 39 [16] A global country study report on “ PESTEL ananlysis and study of various sectors of Thailand (2013) https://www.gtu.ac.in/ABP/GCSR%20PDF%202013/799%20Thailand%20-%2011-.pdf [17] ASEAN in Focus: The Thai Consumer Market http://www.iberglobal.com/files/2017/tailandia_consumer_market.pdf [18] The Thai Apparel and Accessories’ Market: Entry Strategies and Potential Partners, Hong Kong Business https://hkmb.hktdc.com/en/NTE2OTczMjQy/hktdc-research/The-Thai-Apparel-andAccessories%E2%80%99-Market-Entry-Strategies-and-Potential-Partners 40 ... using the internet in footwear in Thailand This is either as an alternative shopping channel for digital-minded consumers, or the use of digital marketing strategies with the purpose of getting... styles (11) Lining: also known as the body lining - the inner lining of the shoe body In item number (12) Insock: the first layer that your foot touches when you wear the shoes Insock in some shoe... comprising a total population of 600 million Thailand remains an attractive destination for foreign investors and business owners seeking out new markets to open a new or expand an existing business