MBMM
DAO THIEN KHIEM
STRATEGY TO EXPAND THE BLUE SKY BRANDNAME TO THE SOUTHERN VIET NAM MARKET
PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT
Tutor: Dr Tran Xuan Kiem
Trang 21,3 PTOJ€Cf SCODE: HH0 HH TA T110 011 Tg TH TT nghe sereze 3 1.4, Study methodology: .cssssssssssccssscssssscsssessecssssesssssssssssncesesessecsseseescesavonscsseeavennererseas 3
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Trang 34.3 Customer relation management (CRM|) -. -eneenhheHieeiiriie 20 4.4 Marketing strat€gy che 21 4.4.1 PTOUC: << nen H11181 1112001110113 Te000100101101140101270110 21
Trang 4Table 2: Turnover of the South branch in the pas{ 2 y€ATS co ii 9
Table 3: Viet Nam GDP, 2003-201(0 - sen re 15 Table 4: Population, Viet Nam 2003-20 1 HH H910 43212141 1116 15
Figure l: The five loyalfy prOfie «Án TH nghe 6
Trang 5
1, EXECUTIVE SUMMARY
1.1 Introduction:
In recent years, together with a rapid economic growth in Viet Nam, the living standard of Vietnamese people has increased The customers have a tendency to enjoy their lives and to spend money on premium goods especially in bedding products In the past, with the conception of “only feed and clothe properly”, the customers have often utilized the cheap price and low quality items to decorate their bedroom for many years ago At present, they have changed this consumed habit by using better quality products with higher price to satisfy their lives more
and more
To seize these demands from customers in Viet Nam, in 1999, Han Viet
Company was founded in Ha Noi city, a northern city and a capital of Viet Nam This is one of the famous enterprises specialized in manufacturing and selling premium bedding products The ranges of products are mattress, blanket, drap and pillow under a Blue Sky brand name The end-users who buy these products from HanViet Company are hotels and householders
Trang 6From the start, Han Viet Company has to cope with many difficulties and challenges like the way to seize market share or how to compete with the rivals There were a lot of competitors in the northern market at that time They had run the business for a long time and get leading the market Meanwhile, Hanvico is just a new player in the market
After coming into operation for four years, Han Viet had put its footprint in the northern market and achieved great success there More and more customers know Blue Sky brand name with a slogan “As warm as mother’ heart” The annual turnover has continuously increased for years
In 2006, Han Viet decides to expand the market to the South by establishing a branch in Ho Chi Minh City It was located at 110A Cach Mang Thang Tam Street, Ward 7, District 3, HCM city At the beginning, the aim for opening a branch is to explore the Southern market and to introduce products to the customers Currently, all sales activities were conducted by consigning goods in retail shops and it was still selling together with other bedding product from
many competitors there
1.2 Project Objective:
The objective of the project is to make a strategy for expanding the Blue Sky brand name to the Southern market of Viet Nam Currently, this brand is very well known in the North but still being a strange one in the South The Board of
Directors also found that building Blue Sky to become a strong brand is one of
Trang 7other competitors and to strengthen their image in the customers’ mind Naturally, having a strong brand, they will be a strong business in the market
1.3 Project scope:
This project will be carried out in southern Viet Nam market By applying lessons from MBMM program, I draw a plan to make Blue Sky become a strong
brand in the South
1.4, Study methodology:
In this project, I use the information resource from both primary and secondary
research
In primary research, I conduct a survey of market about the brand name recognition through questionnaire with retailers, end users and relevant people To do this, I directly go to every retail shops to interview the buyers, shop owners or any other consumers with given form The interview with company Director about the commitment of execution for expanding Blue Sky to the South is also performed in this field research
:
Trang 82 THEORY OF BRAND BUILDING
2.1 What is a brand?
A brand is a symbolic embodiment of all the information connected to a company, product, or service A brand is a collection of images and ideas representing an economic producer; more specifically, it refers to the descriptive
verbal attributes and concrete symbols such as a name, logo, slogan, and design
scheme that convey the essence of a company, product or service Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design and media commentary
This is also a crucial difference between a brand and a name A name is merely
a name For instant, Coca-Cola is a brand with a symbolic embodiment of cola,
soft drink, red color when we talk about Dom Perignon or Tiffany, we instantaneously think of delicious champagne bottles or luxury diamond beads A brand serves to create associations and expectations among products made by
a producer A brand often includes an explicit logo, fonts, color schemes,
symbols and sound which may be developed to represent implicit values, ideas, and even personality The key objective is to create a relationship of trust
The brand, and "branding" and brand equity have become increasingly important components of culture and the economy, now being described as “cultural accessories and personal philosophies"
Trang 92.2 What is brand equity?
Brand equity as a set of assets linked to a brand’s name and symbol that adds to the value provided by a product or service to a firm and customers There are four major asset categories These are Brand awareness, Brand loyalty, Perceive quality and Brand association
2.2.1 Brand awareness:
Awareness refers to the image of brand in the consumers’ mind If consumers’ minds are full of mental billboards- each one depicting a single brand- then a brand’ awareness would be reflecting in the size of its billboard Awareness is measured according to the different way in which consumers can remember a certain brand name In other words, Brand awareness can be measured by showing a consumer the brand and asking whether or not they knew of it beforehand It can be ranged from recognition, recall, top of mind to dominant
brand
2.2.2 Perceived quality:
Perceived quality is a key strategic variable for many enterprises Total quality management (TQM) or one of its relatives has been central to many firms for the past decades and perceived quality is usually the end goal of TQM programs Many firms explicitly consider quality to be one of their primary values and include it in their mission statement Perceived quality is often the key positioning dimension for corporate brands and other brands that range over
product classes Because these brands span product classes, they are less likely
to be driven by function benefits, and perceived quality is likely to play a large
Trang 102.2.3 Brand loyalty:
Trang 11At the bottom of the pyramid are the consumers who exhibit no loyalty at all, the promiscuous switchers For various reasons they regularly switch between a wide range of brands Perhaps they purchase solely on the basic of price, choosing the best brand offer at the time or perhaps they are convenient shoppers, buying on the basis of availability The later could, of course, look like brand loyalty, if the customers always buy from the same store In reality, it would be store loyalty
The second level of loyalty is represented by the constrained switchers These are the consumers who have limited set brands from which they will choose depending upon circumstances and the occasion
The next level up are the consumers who buy the same brand out of habit and have no reason to change- the habitual buyers These are, of course, vulnerable consumers from the company’s point of view, as they have no reason for their loyalty; it is passive rather than active
The fourth level is active loyalist These consumers have a reason to be loyalty The reason may be economic, in, so far as they can not afford the more expensive brands, or it may be functional, in so far as no other brand offers the same function benefit, or it may be emotional, in so far as the brand offers the symbolic values that match the customers’ own profile
The top level of loyalty is the committed These consumers will buy no other
brand They are, if you like, the extreme activist But they are also very rare
Trang 12ha
am
no
2.2.4 Brand association:
Brand equity is supported in great part by the associations that consumers make with a brand These associations might conclude a product attribute, a celebrity spokesperson or a particular symbol Brand association are driven by the brand identity- a key factor in brand building strategy ( David A Asker (1996), Building
strong brand, Free press business, page 8 — 25)
3 PRESENT SITUATION ANALYSIS 3.1 Company Analysis: 3.1.1, Company Structure: HEAD QUARTER NORTHERN ‘ SOUTHERN BRANCH BRANCH
At the present, Han Viet has a head quarter in the North and one branch in the South which are operating in finance independently The head quarter was established for many years ago but the South branch has opened nearly two years Company has one factory locating in Ha Noi city All products are
Trang 13Here is the operational structure of Southern branch DIRECTOR SALES AND WAREHOUSE DEPARTMENT ACCOUTING DEPARTMENT MARKETING
The operation of Southern branch is quite simple
purchasing order based on sales every month will make order to the factory and products deliver to the warehouse in the South within 2 weeks Then it is distributed to agents All sales activities like balance, stock enter to the account independently
Here is a turnover of two branches in the past:
Trang 143.1.2 Brand name:
—¬
As a company specialized in bedding products with a brand name Blue Sky, Han Viet wants to introduce the consumers the brand name which is easy to remember, stand for an immense sky The meaning of brand implies to create a well sleep to everyone in infinite universe 3.1.3 Logo: CD FANVICO 3.1.4 Slogan: warm As “4 Mother heart
Trang 153.1.5 Products: Company has a wide range of products as below: Mattress Bed cover Bed sheet Pillow case Pillow normal Blanket
(See more in Appendix 6&7)
All these items are manufactured with imported material It comes from many other countries like Korea, France Main fabrics in Blue Sky products are cotton in order to be suitable for climate in Viet Nam Other fabrics are polyester; linen Compared with other products from other competitors, Blue Sky has some advantages like more skilful quilting or flatter mattress Especially, Blue Sky mattress are made by dedicated fiber on the surface that can create infrared rays which are very good for health of users A flat mattress makes vertebral column of users to be straight all the time as lying in it The colors of products have also been designed to be suitable with every season For instant, more elegant colors
Trang 163.1.6 SWOT analysis in the South: Strength Weakness *, + Famous brand in the North Warehouse is too far from factory
s* Good quality products “+ Long time to deliver items from * Color of items are change the factory to warehouse
continuously ** Agent network is not sufficient to ** Flexible policy to agents introduce items to consumers “ Well experienced staff in this] A few consumers know Blue Sky
industry brand name in the South Opportunity Threat
“+ High income people has increased| “ Many international bedding
* Well support from headquarter for recent years
Consumed habit in bedding products has changed
Less competitors in the South region
Trang 173.2 Competitors Analysis:
Currently, there are a lot of manufacturers operating their business in this field in the South Some brands presenting in the market are Kim Dan, Nghi Khang My, Ha Ty A My, Everon, Edena, Thanh Thuy, Ngoc Dung Besides that, there are many small garment companies with no name products also joining the -
market
Among them, Nghi Khang My and Ha Ty A My are two brands importing products from foreign countries thus the price are very high Thanh Thuy and Ngoc Dung are junior brands serving for low income customers Kim Dan just produces mattress only so it is indirect competitor
In the meanwhile, Blue Sky is a premium product therefore the potential customers are high class people Main direct competitors are Everon, Edena Everon was present in the market for one decade ago This is a most well known brand and captures a biggest market share in this industry Edena has recently participated for 2 years and also has some remarkable marketing campaigns for popularizing its brand in the southern market
From competitor’s analysis, they can be divided into five groups as follow:
* Foreign products: they are imported from other countries like Taiwan, Korea and distributed by Vietnamese exclusive agents Their prices are very high and displayed in big cities only These brands are Ha Ty A My, Nghi Khang My, My Home
Trang 18are quite reasonable to high income consumers Thee brands are Blue
Sky, Everon, Edena, Hestia
«* Domestic products: these products are manufactured with inferior quality and their prices naturally are cheaper These brands are Thanh Thuy, Ngoc Dung, Duc Thien
“* No name products: they are mainly sold in rural area serving for low income consumers
“+ Substitute’s products: they are made by different material like rubber, spring Manufacturers producing these products often made mattress
only These brands are Kim Dan, Van Thanh, Uu Viet
Among five groups of competition, company defined that Eeron, Edena, Hestia are direct competitors because of the same segmentation
3.3, Market analysis:
According to geography, Viet Nam was divided into two regions: the North and the South The North having four seasons separately with the cool winter is a lucrative market for bedding products For this reason, almost well known
domestic and abroad brands are presented there While the South region with ‘
two seasons only and hot climate all year round is less profitable This is the reason why there are a few bedding company running their business here
Trang 19must use bedding products as indispensable things in their life Furthermore, the
more the higher living standard, the more needed premium bedding items
Table 3: Viet Nam GDP, 2003 — 2010 Year 2003 | 2004 | 2005 | 2006 | 2007 | 2008° | 2009" | 2010° GDP per capita 484.2 [528 | 587.6 |617.3 | 667.4 | 730 805.6 | 880 Real GDP (growth) | 7.3 7.7 §.4 8.1 1.7 8.2 8.7 8.5
Source: BMI, HCM City Statistical Yearbook Besides that, with a large population, Viet Nam is a potential market for ‘
Trang 203.4 Main distribution channels oƒ bedding products: Figure 2: Main distribution channels of bedding products Furniture shops Exclusive shops Manufacture Super market End users Curtain and Fabric Mattress shops
Furniture shops are the places which are sold many products like bed, mattress,
table, chair It is also called “mixture” shop
Exclusive shops sell only one brand of bedding product In this shop, consumers are easy to choose their favorite items by professional design and display In addition, consumers will be advised about products clearly by sales persons there
Super market: Instead of selling on the street shop, agents hire a stall in super market and sell their product there
Curtain and fabric shops: shop owners want to sell bedding items together with
curtain and fabric
Mattress shops: these are shops specializing in mattress They sell all brands of
Trang 213.5 Distribution network of Blue Sky in the South:
At present, Blue Sky products are distributed through thirty shops in the South These shops are located in cities and almost provinces These are furniture, mattress or curtain shops in the street It is sold together with other products in the shops
As mentioned above, Blue Sky is a high level brand therefore the potential consumers are medium and high income people Mainly they are women with the age from over thirty who often decide to buy bedding products or not In the Northern market, company has created a good image of Blue Sky In customers’ mind, this is a brand with color diversifying, durable and good quality Moreover, this brand was presented in the market nearly ten years But in the South, it is also a strange brand to almost consumers Consumption rate of products has unchanged for two years of running
The reason for unchanged turnover by years is, according to company’ Director, not to pay attention to building brand name as well as not to popularize Blue Sky image to the customers in the South
Trang 223.6 Blue Sky in the North and the South:
In order to know the customers’ recognition about Blue Sky as well as the market share in two regions, I conduct a survey to get information from consumers who have ever utilized bedding products
The aim of the survey is to identity the need of the target market that are relevant to products as well as the perception of customers on bedding competitive brands in order to valuate the position of Blue Sky brand in the market
I have sent four hundreds printed questionnaires to customers in two regions
Two hundreds are executed in Ha Noi city (standing for the Northern market)
and a half of them are in HCM city (standing for Southern market), After that, I got back one hundred and sixty feedbacks in each region (the valid yield is 80%)
From the data of survey feedback, I found that the numbers of consumers in the
North experiencing Blue Sky brand are bigger in the South many times (see appendix III), And from survey, I gather necessary information as well as customer’ behaviors for making a plan to expand Blue Sky brand to the South
market,
Besides, I also do a short interview with Company’ Director regarding to situation after two years of running and the objective ahead as well Through this interview, he expresses the commitment to make Blue Sky become a strong
Trang 234 STRATEGY TO EXPAND BLUE SKY BRAND NAME TO THE SOUTH
In the fierce competitive environment today, every enterprise has to work hard to find out the right strategy for firm position in the market Han Viet Company had done this mission well in the North and put their footprint in the South But they have a lot of things to do if they want to increase the market share and Blue Sky image in the customers’ mind as well With some above analysis and real situation of this industry, I would like to suggest a strategy to expand their
business in the Southern market as follow:
4.1, Building identity brand system:
In stead of selling Blue Sky products in many types of street shops together with
other brands such as Everon or Edena, we should establish for chain of its outlets
a united “model” and apply it to everywhere in the region Outlets here, means exclusive shops not “mixture” brand shops, will be appeared more and more in the future It will represent Blue Sky brand and sell the items of this brand only According to survey feedback, almost customers have a tendency to enter the exclusive shop to buy premium bedding products These exclusive shops are designed and decorated with the same model including signboard, displayed shelves By this way, customers will be easy to recognize as they go through
Trang 244.2 Effectively Advertising:
Company should choose a suitable way to advertise and introduce products to customers effectively
With a given budget for annual advertising, Han Viet should not popularize their image in television, Moreover, it is no longer an attractive media to customers today We should place an advertisement in women’ magazine as the hot season is coming The readers of these magazines are also potential customers of company in the future
4,3 Customer relation management (CRM)
To expand the brand to customer means that company has to open more and more exclusive shops in the future Therefore, the relationship between company and shops owners is very important It is just because that these people are the intermediate from company to end users All information that company want to convey to customers through them like product property, new launched products thus we should maintain a strong relation with them as much as possible We should treat them as a member of company and combine all shops owners becoming one family Parallel that, some actions must be conduct to encourage them such as:
- Presenting gift on their birthday or special occasions
- Call them at least twice a week
Trang 254.4, Marketing strategy
Together with some above suggestions for enhance Blue Sky brand, we should do apply marketing strategy (based on 4P’s model from economist Philip Kotler) to expand business to the South region:
4.4.1 Product:
Being position a high level brand, Han Viet must produce high quality products It is the vital ingredient of a good brand
In order to manufacture good quality products, Han Viet has to follow the system of Total Quality Management (TQM) That is a synchronic process of commitment executing quality from all departments in the company Entire people must participate in this process from R&D, KCS or packaging to delivery and warranty
Moreover, in highly competitive market today, there are no bad quality products anymore thus we do not compete with competitors only in quality of product but in quality of service Salespersons in every exclusive shops has to consult customers about all products property, warranty clearly and enthusiasm By this way, customers will have a strong impression with Blue Sky products and it is a part of process making Blue Sky becomes a strong brand name
4.4.2 Price:
Trang 26customers feel more trustful in Blue Sky brand Besides that, we should offer more discount rate for shop owners who sell over the target for encouraging
them to introduce items to customers
4.4.3, Place:
As mention above, to get the attention of customers by identity brand system, we should open exclusive shops only It will be a place to sell Blue Sky to end users in the future For this reason, we should encourage agents who desire to open exclusive shop go around and look for houses placing in good location in the
street
We should consider a good location because it is also a tool of direct marketing for building a brand
In Ho Chi Minh City, we should open around 15 shops We avoid opening shops excessively because they will operate overlap each other affecting its business
In provinces, we maintain a system of only one exclusive shop in every province This is also a distributor in this province There are thirty provinces in the South region That means we will open thirty shops together fifteen shops in HCMC Totally we will reach around forty five exclusive shops in the Southern market, This is an ideal numbers of shops to popularize and sell Blue Sky products
Trang 274.4.4, Promotion:
Trang 285 IMPLEMENTATION PLAN
To build the Blue Sky brand as well as expand the business to the South, Han Viet Company has to act many things from now and it will be undertaken lasting to the end of next year
Here are specific main actions and time as follow:
- Action I: from now to end of year 2009: opening exclusive shops in HCMC and provinces
Choosing a house to open shop have to being executed strictly We must select a good location This action will be in charged by marketer, house owner and real
estate agent (to introduce a good location on the street),
- Action 2: in March to April, 2009: posting in women’ magazines under article like “introduce itself” or a piece of advertisement
We had a number of exclusive shops in the region It is the time we have to
inform our presence
:
- Action 3: in August, 2009: launching promotion campaign
Trang 296 CONCLUSION
In economic market with fierce competition today, choosing a right strategy to expand the market and enhance a brand image in customers’ mind is a vital factor in every enterprise
During the time executing this project, I collected relevant data to analyze and give some suggestions to expand the market of Han Viet Company to the South Among them, establishing a brand identity system is a core element to help Blue Sky become closer to customers Besides that, positioning Blue Sky as a symbol of high level brand will help company to be easy in planning business strategy in the future Together with implementation plan above, I believe that Blue Sky brand name will be popular in the Southern market
Trang 30Blois Keith, (2000), The oxford Textbook of Marketing, Oxford university press Jean Pierre Baeyens (2005), An introduction to Marketing
Kotler Philip, Gary Armstrong, John Saunders, Veronica(1999), Principle of Marketing, Prentice Hall Europe
Alice M Tybout & Tim Calkins,(2005), Kellogg on Branding, John Wiley & Cons.Inc