Brand building and communication strategy for colokit, thien long group

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HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF |

ECONOMICS & MANAGEMENT | MMCoM8

TRAN THI MINH HAI NGUYEN THI BICH THUAN

+

BRAND BUILDING & COMMUNICATION STRATEGY FOR COLOKIT, THIEN LONG GROUP

| MASTER FINAL PROJECT

MASTER IN MARKETING AND COMMUNICATION MANAGEMENT

TRƯỜNG ĐẠI HỌC MỦ TP.HCM THƯ VIỆN

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Acknowledgements

First of all, we, would like to express our gratitude to Prof Marianne Claes for her first

guideline of the structure of this project :

And then, we also give special note of thanks to Mr Huynh Minh Nhut for his practical | guidance and Prof Hoang Thi Phuong Thao for her academic guidance on this paper

We are indebted to Mr Trinh Van Hao, Communications Manager of Hoan Cau Company, — a subsidiary of Thien Long Group Corporation for his valued strong support and the | courtesy of facts and figures presented in this project ,

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Commitments

We, Tran Thi Minh Hai and Nguyen Thi Bich Thuan commit that we have written the ị project by ourselves based on the information collected from Thien Long Group - Corporation and electronic sources

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Executive Summary

Colokit is an Art Supply product brand belonging to Thien Long Group (TLG) -the | Number 1 Company in the field of manufacturing pens and other office products in | Vietnam in terms of revenue and production volume

While Colokit aspires to be the Number 1 Top of mind brand of Art Supply in Vietnam | local market by 2018, the brand awareness is low (under 10%) and it does not have clear › brand vision and brand identity to achieve that goal (TLG Marketing Department, 2014) TLG’s Development Strategy Orientation (2014-2016) has outlined domestic market share ị

expansion as their strategic growth strategy for Colokit With the increasing cpmpetition ị from foreign imported brand and local counterparts, a strong brand is essential for Colokit | -to be outstanding among others and win customer loyalty It is also critical that Colokit creates a brand relationship with target customers and end users to maintain re-purchase - and create word of mouth to attract new customers Hence, without a complete branding strategy to be developed and executed, Colokit is challenged to maintain and grow market share in domestic market

With the aforesaid reasons, brand building therefore becomes a critical issue for Colokit to close the gap between current situation and their marketing objective

This thesis aims to assist Colokit to achieve top of mind brand awareness by 2018 by providing theoretical framework and applicable approach to build its brand in Vietnam Therefore, the author deals with different stages in the branding process: segmentation, targeting, positioning, brand identity, and communication strategy

The author starts with External analysis of stationery and art supply industry overview, art supply competitors’ analysis, customer behavior insights; and Internal analysis of the Colokit’s revenue, marketing mix; followed by a critical review of Brand strategies and Brand communication Data is collected from published materials, market research reports | and the authors’ mystery shopping observations

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oriented KPI system, short-term focus communication strategies and unspecialized ! marketing team that hinder the Colokit brand development

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Table of Contents

Acknowledgements ¬ ¬ SE 3 CommitmeniS -sss<esseseerrrtserrrrre TL .LƠ 111 4 : Executive SUmiMAFV . 22555°2++ttttttrtttirtirrrirtrirtrrrrrtftttrrrrllfftrtfffnttffffttftffffTf 5

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1 Segmentation —Targeting ~Positioning s-eerxseesererrterr2.0.1101100nn1nnT0 15 1.1 SegmentatÏOn -eeexseerrerreririrrittrrrriiiiirrtrrriiiilirrrntnrit0tfffrlntttffffffffftrrr 15 1.2 TargetÏng -ccessserrereerrtririiriterrrrriiiirrirrrtrritnrdrrrriirr 16 1.3 Positioning -eeseeerxrrrttrritrrriiiirrriiiirrriiiiriittrrriittttttrrffftffnntftffftfftffftrf 18 2 Defining Brand and Brand Idenfity -seeeererrreeetrrtetrrtrtrtrrrtrrrrtrrrtrtrnrrltfrrtrff 18 PnN: n - 1Ơ ẽ “xxx 18 2.2 Brand identify -cssserrretetriitreirrrri.erritrrritrtrttnrtrtrnltrnrttfnnrftrntttrff1TTP 19 3 Models of Brand Identity . -s -5°°csttrrtetrtterrttrrtrrrrrrrerrtrrrrrrrrrtrirtenrtrrttrnttltrnttnnf 20 3.1 Kapferer’s (2004) Hexagonal Identity Prism Model -‹ eee-seerrretrrrterttrrtrirre 20

3.2 Unilever’s (2005) Brand key model — 11 21

4 SUHINAFY .c -55secSSzxtttrrrtttttrrrrrrrtrrtrrirrr110111n1101001n0018nTTTnREETETRETTTTEP 23 CHAPTER III- EXTERNAL AND INTERNAL ENVIRONMENT ANALYSIS -‹ - 24

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3.2 Primary Data ecccerrreersrterrrrriirtirriiirrrrriiittrinrtrrrirtttrrtfnlntftttnltftfffftfttfTTf 36 4 Colokit OverVieW eceeerrerrrrrrrrrriirrrririrrrrrtrrtitrririlrriillttnnrlllttrftftfff1777 37 4.1 R€V€RUE c 225<2scsvsetrkertr.Erktrrr1171.0110001010010100010101n11n000000071007071070707 37 4.2 Marketing MÌX -cseeseererrerterrrrteirrrtrrririirtrrrrilttrrtrffnnttftnfnftfffrfftftrrf 38 5, SUmHAFY « -ccccs<cccevzxtrtttttrrirrrtrr 1010 0001001n101011n11100nTPnTTTRROETOTEHETTTTE 40 CHAPTER IV- COLOKIT BRAND ANALYSIS -eeerrerereeerrerrrrrtrrttrrrrrrrrrrrrrrner 41 1 Marketing ObjeCtiVe -cccesseeeeerrrrretiiiirrriiiirriitnrrttrtrrilrrttnnrtttrttftfttftn111m07 41 2 Marketing Strafegy -ee-secserrriirrrrriiiirerrrrrreiiirreiiirrrrrrirrtrrrnnitrrrnnnrtttftttfffffTDA7 41 2.1 Segmenfation -«-e.eeeee T.0011101111131.1 1 E1111112 1 10010 001-010010000018nTT00000011TTPPnTnm 41 2.2 TargetÏng ceccceerernrreirttrriiiiirtiiiiiiiiiriiiitrrttrnlltntftfttftfffffffftffftff đe 42 2.3 Posifioning -c‹esseetxtrrterrrirritririrrriiirtrriiltnlttttrltftrntffnnftfttnnttffttf11fffrfff 43 3, Brand StrafegY -cccssrtrtriiirteeriiiiririiiiiiiiriinintnnnnttrrnnnttrnntnttnlttftrttffffgff 44 3.1 Brand Identtity -. c-xeteerxettsrrrrtrrrireirrerritriirrrtrrrrrnrrtrrtrtrltrnnttfftntfffrftfffrfgf 44 3.2 Packagingg -.-c-ceeeseterrrriiirtsriiiiiiiiiriiiinriiril00tnn10010t0101ftfnTERRREI 46 3.4 Brand EvaluatiOn . ses++xte+xerrtertrtrrtrieiieiir100001001001000110nn0000000000000007 48 3.5 Current Challefige . -5+-5+++°++x+ev22ttrrttetrtetrttrrtrrtrtttr1ttrmtfrrnttrntrrltre 49 4 SUAFY e-ccccscccceetrttrrrttttrtirtrrtrrrrittiirtrtrriirrriinrtrrtnnrttrtrrtrtnlltfffnntftffffttfTTEf 49 CHAPTER V- CONCLUSION & RECOMMENDATION ON BRAND BUILDING AND

COMMUNICATION STRA TEGIES -+°°+++°sseennhetrtterrtttrtttrrrrrrrrertrtrrtrrritrtrttrer 51 1 Analysis mm ,ƠỎ — 11 51 2 Proposed Brand Idenfity ceeseserrrrrrrirrirrrrrrrrrrrtrrrirrrtrrrrrtttirrtrnillttftrtfffftffr 52 2.1 Colokit Brand PlatfOrmm s c5sssssetentetttrtierieierierrrerrrrirrrrnrtnrenntrtptterf 52 2.2 Re-design Packaging ecerreteeriirrriiriiirriiirrnirrrirtenittnnntrttntt11000710 55 3 Brand Communications Strategy . -eeseerierterrterrrirtrrrrirrrtrirrrrrrrrtetrnttnrttrttr 56 3.1 Colokit Brand Strategy Road Map 2015-20 18 -eeeeererrerreirterrtrreremtrmrrertre 56 3.2 Proposed Communication Strafegy -eeererreenrrrtrrtrrrtrrrrtrrrrrerrrrrrtrtrnrrrtrrrerid 57 4 Evaluation cccceertrerrrttrrrttrrtrrrirrrtritrirtrrirtrtrrrtirrrttrtrtrtttltllliliiintfi.0000107 59 REFEREENCCE ¿2-2 xe HE 103101.2.111202120171101000001111011001000010000100100101101000T710 60

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List of Figures

Figure 1- ATL Advertising Spending, 2010-2013 -ersererrrttrrtrrrtrrrrrrrrrrrrttfrf Figure 2- Research methodology sassecseesssssssssssscececersnssnsnnnnnnasssnnnnnnnnnnnen ene ee 7 Figure 3- Targeting strategy TẠp ceeeneereerrtrrtrerrerrerrrrrrgrrrrg 0U) Figure 4- Integrating positioning strategy to marketing mix Thy ng 2138389110331 Figure 5- A Taxonomy for Brand PerspecfÏV€S -eerttrrrertetrrrtrrerrrrtrrtrttitttttf1777 Figure 6- Hexagonal Jdentity Prism Model rreeseeerrtrtrrrttrtrrrrtrrrrrrii111717 Figure 7- Brand personality sCaÏ€ eererrrrrrrrtrrtrrrrerrerrrmnrttrtir117777772// 7 Figure 8- Brand Key Vision Templafe ‹-c-sssc+tntttttttttttttrrrrtrtrtrrrrrrrmrrnrtnltff017777777777 Figure 9- Viet Nam Stationery market size 2007-2013 - -ecserteeertrrteirrrterrrrrrerrrrrrnrrrrtrret Figure 10-Proportion of Art supplies in stationery consumption, 2007 «-eeeeerrterrterrttrrrtrt Figure 11- Vietnam GDP annual growth rate 2012-2014 ¬— Figure 12- Vietnam GDP Per Capital PPP period 2007-2014 .e-erereeerrrrrettrnrrrrrrrrrirre Figure 13- Total pupils from kindergarten to lower secondary in education SECtOF +-ssseiersereers Figure 14- Colokit's Marketshare, Production Capacity and Distribution Network, 2013 _—_ Figure 15- Colokit Market Share 2009 -sceeeettrrttrrnrrrrrrrrtrrrrtrrttnnttdttft2177777777 Figure 16 “International School Research 2010 -. reeerrrrrrrrmrmrrerrrrrrrrrrTTD Figure 17 - Emerging Middle Class .ssssssssssssssssssessescensssssesesennennanevsscnnennnnsnssss en nee et se Figure 18 - Purchase driver Of art produCfS -cesseererirrrrrrrrrrrrtrtrrrrrtttrtrtftftfftftfff177777 77 Eigure 19 - Source of reference on art products by 4g6 -e-eeererererrrrrrerrrtrretrnnttrtr1172TT77 Figure 20 - Role of Advertising on consumer's purchasing decision -eeeeeerrrrrrrrrrrrrnrerree Figure 21 - Average spending on stationery and art products projected in 2013 eereeterrrrte Figure 22- Colokit average price per product type in 2013 (Unit: VND) eeererrsertrrrrtrree Figure 23- TUG Distribution netWOFk « c-cccreneetrtrrrrrrrrrtrrrtrtrtrrtmrmrftfrttffft7717777777 Figure 24- Colokit positioning integrated to marketing TIX , va Figure 25- Colokit Brand Key Model .ssssssssssssssssssssnssnnnesesssscnnennnnsssensnssg nett ee iS

List of Tables

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CHAPTER I- INTRODUCTION

In this chapter, the author starts with an overview of branding in Vietnam and Art Supply ' context, followed by an introduction to Thien Long Corporation (TLG) and statement of | Colokit’s branding problem In subsequent parts, the author deals with Research © objectives, Research questions, Scope and Limitation, Research methodology and Thesis

structure

1 Background

a Branding in Vietnam Context

Brands are an important aspect of everyday life Brands help consumers to exercise their _ preferences in the marketplace For companies, in turn, brands are valuable strategic as a — source of competitive advantage A large volume of academic studies across a variety of | disciplines offer many insights into successful branding practices Branding strategies have evolved at fast pace and become more sophisticated, which require branding experts to — have a keen sense of market trend, creativity and strategic vision of an entrepreneur

In Vietnam domestic market, expenditure on advertising channels continues to grow at — 15% in 2013 even in the economic downturn of the year 2013 (Kantar Media Report, 2013) However, Vietnamese businessmen have not paid adequate investment on : intangible assets, including brand development, intellectual property, technology and | product ownership (Dr Phan, 2010) This shortcoming makes a substantial disadvantage since companies lack strong brand image and clear branding strategy to compete on | product value and product differentiation

(US Million} 900M

7 Figure 1- ATL Advertising Spending, 2010-2013

M

Advertising spend looks to grow at a healthy 15% & 4-5% on inflation and free ad space largely driven by TV

Source: Kantar Media, 2013

2010 2011 2012 2013 Q3

b Branding in Art Supply Context *

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respectively (Tiep Thi Gia Dinh consumer research, 2007) Hence, brand is essential for — every product to be outstanding among others and win customer loyalty

In addition, for art products targeted at pupils of pre-school, elementary and lower : secondary school, the main source of reference is the user’s own experience of the product and friend and relatives’ referral (Tiep Thi Gia Dinh magazine research, 2007) Hence, it : is critical to create a brand relationship with target customers and end users to maintain re- © purchase and attract new customers via word of mouth

c Introduction to Thien Long Group and Colokit

Established since 1985, Thien Long’Group (TLG) is considered as the No.1 Company in | the field of manufacturing pens and other office products in Vietnam in terms ef revenue © and production volume It visionizes “to serve study and conquer the peak of knowledge as

‘a supplier of writing instruments and stationery" |

Moving forward, TLG aspires to become a market leader in Asia in general and Southeast | Asia in particular It orientates to continue fostering domestic market share expansion and expanding export capacity for Flexoffice & Colokit, as outlined in Development Strategy Orientation, period 2014-2016 (Source: TLG)

Colokit is art supply product brand belonging to TLG In 2001, Colokit first appeared in | the market as the brand name for crayons After that, Colokit has been used for expanded products beyond crayons (crayons, plastic crayons, oil plasters) In 2011, Colokit was - officially named for Art Supplies category products

Colokit developed a wide range of product lines, with 8 different categories, including: —

Crayons, Color Pencils, Fiber Pens, Markers, Water Colors, Oil Pastels, Modeling Clay |

and Coloring Notebooks In terms of revenue contribution, Crayons, Color pencils and ị Fiber pens are the most important growth engines, contributing up to 80% of revenue as " 2013 (Source: TLG, Marketing Department)

d Colokit’s Branding Problems

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With the aforesaid reasons, brand building therefore becomes a critical issue for Colokit to | meet their marketing objective A complete branding strategy needs to be developed and | executed for Colokit to reach top of mind brand awareness and to maintain and expand — domestic market share as outlined in Development Strategy Orientation (2004-2016)

2 Objectives and Research Questions

a Objectives

-To analyze the external and internal environment of Colokit brand -To evaluate Colokit’s branding strategy

-To propose brand identity framework, brand building strategy and communication strategy for Colokit brand

b Research Questions

The thesis aims to find answers for this question: “What is the ideal branding strategy to _ leverage Colokit brand of Thien Long Group Corporation in Vietnam?

It will be addressed through the following sub-questions: 1 Are there unmet needs and rising trends in art supply market?

2 What are brand positioning of Colokit’s competitors in the art supply category? 3 What are strengths and weaknesses of Colokit brand?

4 What is the status quo of Colokit brand awareness?

5 What are brand key core values, brand positioning and distinctive brand equity to be |

built for Colokit brand? |

6 What is the brand strategy road map and communication strategy to become No.1 top of : mind brand of art supply in Vietnam by 2018?

3 Scope and Limitations a Scope

This research paper is limited to the scope of brand building and communication strategy The implementation plan for branding Colokit is examined from the branding perspective — Therefore, product, pricing and distribution strategies will not be addressed

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Due to the limited time and resources, the author only conducts four Colokit brand observations in Ho Chi Minh City However, to ensure relevance of data supporting branding, the author also studies market research reports on target consumer behaviors in both Ho Chi Minh City and Hanoi, the two biggest markets of Colokit Furthermore, data

collection is limited to retail customers only

Market research for art supplies industry is very limited Whilst trying to source for latest data available, the author has utilized Tiep Thi Gia Dinh Consumer Research for TLG dated 2007 and AC Nielsen Market Research for TLG dated 2009 for research purpose in viewing that such research dedicated for TLG is very unique and information is still

applicable in current context

* 4 Research Methodology

Research is different from common sense because it is done to achieve specific goals, relies on specific methods and is done systematically (Ghauri, 2002) Indeed, conclusion in a research should be able to convince others by soundly based reasoning, systematic data collection without influenced by common sense or non-conscious ideology

Following graph gives an overview of research methodology applied in this thesis

Figure 2- Research methodology

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Data collection- Action research depends mainly on observation and behavioral data (Walliman 2011, 12) In theoretical framework, published data are mainly used such as

books, business journals, articles, prior studies

When it comes to the empirical part, secondary and primary data are collected

Secondary data are taken from Thien Long research agencies (Nielsen Research 2009, Tiep Thi Gia Dinh consumer research 2007), published sources (books, newspapers

articles, company’s reports, demographic reports, websites ) and commercial source (AC -

Nielsen, TNS, Cimigo, Kantar World Panel reports) :

Besides, our primary data is from the author’s observational trips in natural settings at 8 stationery shops, bookstores and supermarkets in Ho Chi Minh City (Fahasa, Lotte Mart, — Ton Duc Thang street stationery shops) in December 2014 The observation targets are : behaviors of shoppers and stationery retailers, how Colokit and other brands are displayed

on shelf

5 Thesis Structure

This thesis is structured into 2 main parts: the theoretical framework and the empirical _ part

Theoretical framework is handled in Chapter II, where all important theories necessary to tackle empirical issues about Colokit brand are reviewed within the scope of art supply — industry These theories are: Segmentation, Targeting, Positioning, Perceptual map, Prism - model, Brand Key Vision model, as well as basic concepts in defining Brand and Brand Ị Identity

Chapters II, IV and V make up the empirical part Chapter III provides analysis on | External and Internal environments On the one hand, it provides information on the - Market Overview, the Competitor Analysis, and Customer Insights On the other hand, it | zooms in Colokit’s market share and marketing mix to examine the Internal environment Chapter IV takes a closer look on Colokit’s marketing strategy, in term of marketing | objectives, marketing strategy and branding strategy Where branding is concerned, an analysis of current situation of brand identity, packaging, brand communication and brand awareness status is provided

Finally, Chapter V provides a SWOT analysis before concluding critical issues and | proposing solutions for brand identity framework, brand building and communication —

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CHAPTER II- LITERATURE REVIEW

This chapter provides background

for Critical review and Recommen:

information of theoretical frameworks that will be used dation in subsequent chapters The specific problems areas are: STP (Segmentation, Targeting, and Positioning), Brand Identity and Brand Communications 1 Segmentation —Targeting -Posiftioning 1.1 Segmentation a Definition „ *

Market segmentation is the process of dividing a market into meaningful groups that are

relatively similar and identifiable (Kotler et al., 2009) : b Segmentation Criteria Market can be divided i nto various segments based on different segmentation bases:

Segmentation Segmentation Common criteria applied for Art supplies

base variables industry '

Geographic Nations, regions, “International vs domestic market segment states, cities, neighborhoods or - Urban vs Rural areas climate Demographic Age, gender, income, -Age: Market segments for: kindergarten (4-5

ethnic background and family life cycle

years old), primary school (6-10 years old), lower secondary school (11-12 years old) kids, - higher secondary school (13-14 years old) kids, | high school pupils (15-17 years old), art students: (18-21 years old), and art hobby adults :

- Sex: male and female

-Income: Market segments for kids whose parents are class ABCDEF income

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Psychographic Personality, motives, | ~ Motivations: visual art as a hobby (amateurs), lifestyle and social for career (architect, designers, painters), to class develop aesthetic sense (public schools), to be

creative (international and private schools), to

have basic knowledge for food decoration,

flower arranging, embroider and home 2 decoration (professionals), art for psychological

and healing purposes

- Personality: professional, fun, creative, artistic, |

health concerned

, - Lifestyle: active, curious and keen to learn kids

via discovering the world; creative, grtistic and

professional trendsetter in art

Behavioral Occasions, benefits -Benefit sought: high/good/acceptable quality, sought, applications, rich color, variety choice, safe to young kids, usage rate, user status, | easy to blend and reproduce new color, good | brand loyalty grip pen, premium vs affordable price,

environment friendly

-Brand loyalty: non-users, ex-users, potential users, first-time users and regular users

Source: Kotler, 2012 j.2 Targeting

a Definition Ị

Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter (Kotler et al., 2009)

b Targeting Strategies

There are three basic categories of targeting strategies: undifferentiated marketing, differentiated marketing and concentrated marekting as shown below

Undifferentiat -Also known as mass marketing

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-Ignores market segment differences and target the whole market with

one offer Focuses on what is common in the needs of consumers rather than on what is different

Differentiated | -Also known as segmented marketing

Marketing -Targets two or more distinct market segments with different marketing mixes and design separate offers for each segments

Concentrated | -Also known as niche marketing Marketing

- Focuses limited resources on serving niches that may be unimportant to or overlooked by larger competitor

- Applicable for small companies ; Uadiferentialed marketing ˆ Differentiated marketing Figure 3- Targeting strategy map Source: Kotler, 2012

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Y Colokit targets parents and educators of pre-school and school aged kids from 3-12 years old and amateur hobbyists, aged 17-22, but provides same marketing mix for all segments

Y Crayola targets little artists who want to get to grips with a pen for the first time, pre- school kids and schoolchildren who love drawing and experimenting, and all those | whose creativity knows no bounds and provides four different sub-brands: My First Crayola, Color Wonder, Model Magic, Silly Putty to tailor for each segment :

1.3 Positioning

a Definition

Positioning is defined as the location of your product in the mind of your customer Kotler (1994) refers positioning as “the unique selling proposition”

b Positioning and Marketing Mix

“As mentioned by Kotler (2012), positioning is not an isolated strategy It should be well- integrated with marketing mix (Product, Price, Place and Promotion) Both position and all elements of marketing mix should convey the same brand image to selected segmentation Figure 4- Integrating positioning strategy to marketing mix Source: Kotler, 2012 2 Defining Brand and Brand Identity 2.1 Brand

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Input Perspective Output Perspective Evolutionary Perspective Legal instrument Image Evolving entity Logo Personality Company Relationship Identity Adding value

Figure 5- A Taxonomy for Brand Perspectives

For the purpose of the thesis, the authors decided to use Keller’s (1998) definition of | brand, which consider brand from “output” perspective It is important to select customer’s | view point of brand for a consumable products like Colokit

From an ‘output’ perspective (consumer’s view point), a brand is considered as: the image | in the consumers’ minds; a personality where the brand is perceived as having human j qualities; a relationship between the consumer and the brand; and as a way of adding value |

to the purchase (De Chernatony and Dall'Olmo Riley, 1997) |

“A Brand is a set of mental associations, held by the consumer, which add the perceived : value of a product or service” (Keller, 1998)

2.2 Brand Identity

Kapferer first mentioned the concept of Brand identity in 1986 and since then there have been many discussions of its definition For examples:

“Brand identity includes everything that makes the brand meaningful and unique.” |

(Janonis et al, 2007) |

“Brand identity includes values, aim and moral image that together constitute the essence | of individuality that differentiate the brand Brand identity offers a possibility to position a brand and encourages strategic approach while managing it.” (Chernatony and Harris, - 2001)

“Brand identity involves many dimensions and any communication from the brand; |

whether it is formal or informal, verbal or non-verbal, should be syne with its brand -

identity.” (Kapferer, 2008)

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3 Models of Brand Identity

3.1 Kapferer’s (2004) Hexagonal Identity Prism Model

a What is Identity Prism?

Kapferer’s (2004) Hexagonal Identity Prism model conceptualizes brand identity along six — facets These are physique, personality, relationships, culture, self- image and reflection Picture of sender Prive ¬~ may ễ = = ã ‘ 2 ¬ 5 & _ Relationship Culture = ủ = x g kẻ = Reflection Self-image Picture of recipient Figure 6- Hexagonal Identity Prism Model Source: Kapferer, 2004

Physique relates to the concrete, tangible or objective features of the brand encompassing |

product features, symbols and attributes

Personality considers how brands can be ‘humanized’ through ‘traits’ and so reveals the | brand’s character and attitude in a more emotionally orientated manner

Culture relates to the fundamental values the brand and / or organization stand for in ' addition to the norms that guide employees’ behavior to facilitate brand identity building Relationship: Considering identity in terms of a relationship takes a brand beyond a purely functional domain given that emotions are an intricate part of any relationship A relationship could be characterized as caring e.g Fairy or as providing status e.g

American Express |

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Self-image relates to how the personal brand evaluation

The “personality” facet of Kapferer’s

brand is viewed introspectively by the customer in terms of a

(2004) model draws heavily on Aaker’s (1997) brand personality work Brand personality Cr I Ì I ] Sincerity Excitement Competence Sophistication Ruggedness Down-to-earth Daring Reliable Upper class Outdoorsy

«family-oriented «trendy «reliable ~ upper-class «outdoorsy

small-town + daring + hard-working « glamorous «masculine -down-to-carth «exciting «secure ~ good-looking = western

Honest Spirited Intelligent Charming Tough

« sincere «cool «intelligent «charming tough

~honest + spirited «technical «feminine ~rugged «real ~ young - corporate «smooth

Wholesome Imaginative Successfal

+ original = unique «successful « wholesome «imaginative «leader - confident Cheerful Up-to-date -cheerful ~ up-to-date ~ sentimental - independent ~ friendly «contemporary Figure 7- Brand personality scale Source: (Aeker.J.,1997)

Maehle, Otnes & Supphellen, (2011) evaluated that specific brand personalities are often associated with particular product categories For example, sincere brands are commonly associated with morals and family-values product categories, competent brands are associated with products of quality and expertise For stationery products, competent and sincere brands are commonly applied

b Evaluation

While Kapferer’s (2004) Hexagonal Identity Prism Model is a useful analytic tool in detecting elements forming parts of brand identity, it is too abstract for external communication and execution of brand strategy

Unilever (2005)’s brand key model, as introduced in the next section, is a good strategic framework for brand planning and execution

3.2 Unilever’s (2005) Brand key model

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A Brand Key establishes a framework and most importantly a common language for a brand

Since 1999, Unilever has used the Brand Key tool to capture brand positioning globally The Brand Key Vision is how the Brand Director captures the desired brand positioning

and makes clear inside the business what the brand stands for, what it will do, and how it

should be done in the next three to five years It helps ensure that all internal actions (HR management, recruitment & training, corporate communication ) and external executions (products, packs and promotions) are guided by the extent to which they contribute to the

desired brand positioning

In their Brand Planning Toolset, the marketing experts of Unilever explained elements of

Brand Key Vision model as below: , Figure 8- Brand Key Vision Template Source: Unilever, 2005 b Evaluation

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by determine the essence of the brand (who you are, your values, personality, your USP, customer promise, etc.)

However it also has limitation The model overemphasizes the outside-in approach when | “values and personality” features rather late in the model (stage 5) Hence, the model is - less suitable for brands where the in-side-out approach is relevant (such as service „ providers) as values and personality tend to serve as the basic principle of positioning 2 4, Summary

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CHAPTER HI- EXTERNAL AND INTERNAL ENVIRONMENT ANALYSIS This chapter provides an analysis on External and Internal environments On the one hand, - it provides information on Market Overview, Competitor Analysis, and Customer Insights - On the other hand, it zooms in Colokit’s market share and marketing mix to examine the - Internal environment 1 Market Overview 1.1 Market Size , The Vietnam stationery market size in 2013 is approximately VND4,054 billion (or | USD202millions) with a ‘2007-2013? CAGR of 12%

YN stationery market grew at CAGR 12% 2007-2013 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 wVN Stationery market (Bn VND) CAGR 12% 2007 2008 $2009 2010 2011 2012 2013 Source: TLG

Figure 9- Viet Nam Stationery market size 2007-2013

Source: Thien Viet Security Research, 2013

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Percentage of stationery product categories

Ink pens, ball pens, fine point pens:

School and Education Tools

Coloring, drawing pens, crayons Ink pens, water colors White disks and tapes

Figure 10- Proportion of Art supplies in stationery consumption, 2007 Source: Tiep Thi Gia Dinh Consumer Research, 2007

1.2 Market Growth

According to Thien Viet Research 2013, the stationery market is forecasted to enjoy double digit growth in the next 5 years (2014-2019)

The growth is backed by the following drivers: a The macro-economic shows slight recovery

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VIETNAM GOP ANNUAL GROWTH RATE Percent change in Gross Domestic Product a 5,5 e1 2012 2012 2013 2013 2014 2014 2015

Figure 11 - Vietnam GDP annual growth rate 2012-2014 Source: World Bank, 2014

In addition, Vietnam economy also witnesses subsequent rise in GDP per capital, adjusted by Purchasing Power Parity (PPP)', reaching an all-time high of 5124.64 USD in 2014 (Source: World Bank, 2014) Growing trend of GDP per capital will support consumers to increase their spending budget on products in general and stationery products in particular

VIETNAM GOP PER CAPITA PPP

5200

2006 — 2688 2010 2012 2014

Figure 12- Vietnam GDP Per Capital PPP period 2007-2014

Source: World Bank, 2014

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b Growing number of pupils from kindergarten to lower secondary in education sector In the education sector, total pupils from kindergarten to lower secondary has started to increase in 2009 (increased by 0.04%) and witnessed stable growth from 2011 -2014 | (increased from 1.98% to 2.29% each year) (Source: General Statistic Office, 2014) This - uptrend underpins growing demand for stationery industry in general and art supplies in | particular (Thousand pupils) 2007-2014 16200 16,000 ° 15,582 15,800 15,600

wauma Total pupils

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2 Competitive Analysis

2.1 Colokit’s Competitors

Colokit’s direct competitors are identified in both low cost segment (i.e China products, Mic) and value for money segment (i.e Hong Ha, Hong An) Similar to Colokit, competitors focus on price penetration and product development with less investment on branding activities Except for Colokit and Hong Ha, the rest of counterparts does not provide any key branding messages Brand positioning is rather generic and focusing on

functionality aspects, pricing ˆ

In addition, foreign imported brand like Stabilo, Crayola and Maped are identified as Colokit’s indirect competitors Unlike local counterparts, these brands are positioned in premium segment with clear brand positioning and distinctive key communication messages

Below are summary of Colokit’s main competitors in terms of Product category, Price strategy and Brand strategy (Brand positioning, Key messages)

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1 | Colokit | | -Crayon/ Plastic Crayon -Color pencil -Fiber pen/ Washable Marker -Modeling clay -Crayon/ Plastic Valued for money a

“Valued for money art supply product for kids Low cost art supply “Paint your fascinating dreams” “Unleash your creativity” No key messages crayon price product for kids -Color pencil -Fiber pen -Modeling clay

3 | Mic -Crayon Low Low cost art supply | No key messages -Color pencil price product for kids

-Fiber pen -Modeling clay

4 | Hong -Crayon Valued Valued for money “Preserve tradition, Ha -Color pencil for art supply product write the future”

-Fiber pen money for kids -Modeling clay

5 | Hong -Crayon Valued Valued for money No key messages An -Color pencil for art supply product

money for kids

Stabilo | -*3 in 1 “pencil -Fiber pen Premium | “Ergonomic creative children “Stripe up your

color, water color, products which life”

crayon” make it easier for -Color pencil kindergarten and - Oil Pastels school children to

learn hew to write”

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who will grow to be inspired, original

adults.”

8 |Maped | Crayon Premium | “World leader of “Design, value,

Colored pencils office supplies and innovation."

school supplies”

Table 1-Colokit competitors’ product portfolio, price and brand strategy

In view of brand communication channels, Colokit and its competitors do not invest in above the line channels (TVCs, Print Ads) Most of them have utilized website and social media in their communication efforts’? While foreign imported brands actively roll out below the line activities (i.e promotion, activation, sponsorship, PR), local counterparts have little investment in these channels

Below table summarizes Colokit and its competitors’ communication activities 2013-2014 Channels | Colokit Stabilo Crayola

Social https://ww https://ww | hdlps/www.E https://www face

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Activatio | ¥ v v v ns/ Events Sponsors | ¥ hips PR\|Y v v v Table 2 - Colokit competitors’ brand communication channels 9.2 Market Share `

TLG is a market leader (35% market share) in Vietnam Stationery industry in 2013 followed by Hong Ha, Ben Nghe and Chinese imports Furthermore, the firm also outnumbered Hong Ha, the 2nd largest players, in terms of capacity and distribution network in 2013 (Source: Thien Viet Security Research, 2014)

TLG captures the llon’s share in Vietnam stationery market

Overall Market share 2013 20 million SKUs/year 70 distributors 9,000 POS te ; tien A Cus Tien, Foreign 75 million SKUs/year 4 135 distributors 46,000 POS

cas 14- Colokit's Market share, Production Capacity and Distribution Network,

Source: Thien Viet Security Research, 2014

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Unit: Billions VND 12000 ¬ 11,063 100% 90% 10000 80% 70% 8000 60% 6090 50% 40% 4000 30% 20% 2000 19% 10% 424 0 0% Total Pens Office Suppl! Art Suppil „, Market Share

Figure 15- Colokit Market Share 2009 Source: AC Nielsen Research for TLG (2009)

Below are summary of Colokit’s market share for each category based on AC Nielsen Report, 2009 By using Relative market share ratio’, the author identify fiber pen captures a strong market position, while the rest of product lines only capture weak or medium market position Hence, there is still room for Colokit to grow and develop in order to meet the market share objective

Category Colokit’s Largest Relative Market

market share | competitor’s market share position market share

Crayon/ Plastic 8% 19% 42% Medium

Crayon

Color pencil 7% 21% 33% Weak

Fiber pen/ 21% 24% 88% Strong

Washable Marker

Modeling clay 4% 33% 12% Weak

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Source: Compiled from AC Nielsen Research for TLG, 2009

3 Customer Behaviors

3.1 Secondary Data

Studied from relevant market research, the authors have concluded the key customers insights and behaviors in the context of Art supply products as below

Firstly, Education maintains the top priority investment among Vietnamese households with the belief that it is the ticket to successful future with well-paid jobs (TNS :Report 2012) More affluent parents enroll their kids to premium international schools with extra- curricular activities with the aspiration to have a well-rounded child in the future (Figure 16) The trend will support demand for Art supply products as it helps to develop well- rounded individuals through arts activities

Figure 16 -International School Research 2010 Source: Cimigo international school research, 2010

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brands coming to Vietnam in recent years, thus the competition between domestic and foreign brands is getting more intense

Thirdly, there is enormous rise in Vietnam’s middle class segment and spending, estimated to be 44 million people with consumption value of USD$310 billion in 2020 (Figure 17) 90% are willing to buy brands of high quality with higher price The growing segment also demands more from a brand in terms of quality, service and brand image 54% believes that high price is an indication of high quality (Kantar World Panel, 2012) Consumoltion Cast f Sepees HEE Miter date CANN Ole eee #3010 W2011 M2012 š8

Figure 17 — Emerging Middle Class

Source: Nielsen Report Q4, 2013

Fourthly, for art products, key purchase driver is price and brand as indicated by 56% and 49% of respondents in Tiep Thi Gia Dinh Consumer Research 2007 respectively (Figure 18) The main source of reference is the user experience of the product as this product has frequent purchase throughout the year and other sources of reference are not facilitated in 2007 where the communications channels are still limited (Figure 19) This trend emphasizes the important of branding in driving sales and maintaining customers’ loyalty

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Figure 18 - Purchase driver of art products

Source: Tiep Thi Gia Dinh Consumer Research, 2007 0.0% 09% + ak

vế Seller Friends/ Press

Other info Relatives Experience source

17-22 a 23-35 E136 ~§5 E Above 56 Figure 19 - Source of reference on art products by age

Source: Tiep Thi Gia Dinh magazine research 2007

Lastly but not the least, advertising plays a key role in the consumer’s purchasing decision | (Figure 20) Internet is research tool before buying a product with 92% more likely to trust | recommendations from people they know and 63% more likely more to trust consumer

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Z< ADVERTISING - A KEY ROLE ROLE IN CONSUMIER'S PURCHASING

Commercials will Increase my preference for brand

Sof repondonts who strongh// semeahat agree KH 3 011100000000 FE 2 * * ` DECISION as a WLM EER NES eae : và A2210 11% suse i 1 kè AS SAAR NN ENE ERESAAS ES THEE EERIE DATES EN ERE NES % a? f : ¡ Everyday : i ị i i i More than 3 * :

Swit Nahin Gist hav đỆCd4rot Wiggin XikếixG7 34 ? anee a ony :

Se A Space hor Gh oik orate BE ị % once a day fs 3 2 š = % % %, & me 9 98 ERNE EAE EEE EEE EE EEE

Figure 20 - Role of Advertising on consumer's purchasing decision

Source: 2013 VN Pocket reference book Nielsen

3.2 Primary Data

From our observation at stationery shops, bookstores and supermarkets, the authors have found out as the following customer behaviors and insights:

v Customers are parents of kids from 6-12 years old for learning art subject at school and for pre-school kids to play as a toy

Quality features are defined as bright and smooth color, easy to grip, non-toxic and safe for young kids

Key purchase drivers at modern trade are creative packaging design, affordable price and quality product evaluation based on the non-toxic and safe for young kid remarks on packaging At stationery shops, key purchase drivers are retailer recommendation and price as the space for product display is very limited for customers to select by themselves

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Y Crayons are more cost effective than colored pencils as crayons are cheaper and not easy to break like colored pencils

Y Depending on the skills and needs of drawing, parents will buy crayons for first users and coloring, colored pencils for sketch drawing, modeling clay for craft skills

Re-purchase is based on customer’s own experience and price

Purchase occasions: for usage and for birthday gifting to kid’s friends Influencers: end users (kids) and retailers

SAAN

4 Colokit Overview 4.1 Revenue

a

Data from TLG shows that Colokit’ revenue in 2013 reached 117.72 billion VND, which

CAGR ‘2008-2013’ is 31% 2010 to 2012 is growing period (revenue growing at 48.99%, 35.92% and 95.58% in 2010, 2011 and 2012 respectively), while year 2013 experienced downturn (revenue growing at 10.81%, which is much lower than CAGR 31% of the entire period).The sales growth was not achieved the set target of 15% in 2013

In term of revenue contribution in Thien Long portfolio, Colokit is a developing category, which has substantially expanded its contribution since 2012 and reached 8.37% in 2013

Table 4 Colokit Revenue 2008-2013 Revenue(Billions VND) 27.12 40.40 54.32 106.24 117.72 Revenue Growth rate -3.20% 12.06% 48.99% 35.92% 95.58% 10.81% 4.85% 4.28% 4.92% 5.20% 8.73% 8.37% Art supplies revenue contribution

Source: Compiled from TLG Annual Report 2010 -2013

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2012 In 2013, the revenue growth plunges from 95.58% to 10.81% as TLG seized down - marketing activities with the purpose of maintaining the brand only

4.2 Marketing mix 4.2.1 Product

Colokit developed a wide range of product line, with 8 different categories, including:

Crayons, Color Pencils, Fiber Pens, Markers, Water Colors, Oil Pastels, Modeling Clay

and Coloring Notebooks In terms of revenue contribution, crayon, color pencil and fiber pen are the most important growth engine, contributing up to 80% of revenue as 2013

(Source: TLG, Marketing Department) :

Colokit is good quality product that is non-toxic and safe for children Colokit has got 5 international certificates on systematic management and a child safety certificate awarded by ICTI Care Foundation Besides the basic art product line, Colokit also has washable —

fiber pens and plastic crayons The product has bright, durable and smooth color However, Colokit product color palette does not meet the international color standards and company is taking action to improve it

4.2.2 Price

Colokit’s pricing strategy is penetration The price is affordable for most parents to buy for their children to learn art at school Based on the research of art product spending in 2007, the author calculates average spending on art product in 2013 as shown in Figure 21 (see | more at Appendix 5), and finds that Colokit price matches with the household spending budget on art product (Figure 22)

Average spending on stationery and art product (VND/household/ month) projected In 2013 35,000.00 30,000.00 25,000.00 20,000.00 * 45,000.00 10,000.00 $000.00 - 16220035 #2013 Ink Pen, Crayons, School ink, water

ballpoint pen, colored pencil, supplies color Roller point — fiber pen

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Figure 21 -Average spending on stationery and art products projected in 2013

Source: projected from Tiep Thi Gia Dinh Consumer Research, 2007 by using CPI growth rate 2007-2013 60,000 50,000 40,000 30,000 20,000 7 10,000 4

Figure 22- Colokit average price per product type in 2013 (Unit: VND)

Source: Thien Long Group, Marketing Department

4.2.3 Place

In Vietnam, TLG distribution network covers 64/64 provinces across the country with over | 135 distributors and over 45,000 points of sale and 2 depots in the South and the North In addition to the traditional distribution channels, TLG has established and implemented :

modern trade channels like Metro, Big C, Lotte Mart, Maximart, chain bookstores, etc In —

2013, apart from reinforcing traditional distribution channels, supermarkets and bookstores, Thien Long Group continued to develop the business-to-business (B2B) sales : channels and retail sales channel nationwide in order to grasp all identified opportunities of |

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Ƒ————————_——_ m | t TLG distribution channel Distributors, Stationery shops

Figure 23- TLG Distribution network Source: TLG Annual Report 2013

Colokit also relies on existing TLG distribution network Colokit sells their products to retail stores (stationery stores and wet market stalls) through 135 provincial distributors It also supplies products directly to schools, online and offline office supply retailers and modern trade channels (supermarkets, bookstores, Flexoffice chain store, and convenience store) Though Colokit has an advantage of wide distribution channels, it does not invest in product display on shelf The products are not well displayed at gondola end

4.2.4, Promotion

In Vietnam, Colokit has released several online and print PR articles and done trade marketing promotion and product display in 6 months with 2 bursts of 3 months at retail

stores in summer before back to school time and after Tet At bookstores, Colokit has done

store activations Colokit has sponsored Green Painting Contest for kids In Learn & Play with Thien Long — Colokit program, it has organized color guide workshop for teachers at public schools and school event for pupils

5 Summary

In this chapter, the author has provided an analysis on External and Internal Environment of Colokit Brand In the next chapter, the focus of analysis will zoom into the marketing

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-CHAPTER IV- COLOKIT BRAND ANALYSIS

1 Marketing Objective

- To raise brand-awareness of Colokit as art products for pupils and Colokit is a product of | Thien Long among target audience

- To become top of mind brand name in art product in Vietnam in 2018 -To increase sales revenue in 2013 15% higher than 2012

2 Marketing Strategy

2.1 Segmentation

„,

Currently, Colokit have not build up formal documents on marketing strategies.’ Hence, | market segmentation is not yet addressed Based on segmentation criteria drawn from Section II —Literature review, the author has decided to apply Age, Income and Benefits '

sought for Art supply market segmentation i B2C

Parents Aged 23-55 years old, Urban & ABCD Look for low cost/

Parents of kindergarten, Rural class value for money elementary and lower products secondary kids aged 4-12

years old

Pupils Aged 13-17 years old, Urban & ABC class | Look for value for upper secondary kids and Rural money products high school kids

Amateur Aged 18-22 Urban & ABC Look for value for

artists Rural class money products

Professional | Aged 23-45 Urban AB class | Look for high quality,

artists specialized products

B2B

Kid playing | N/A Urban N/A Look for good quality

centers and safe for kid products

Art Aged 23-55 Urban& | ABC | Look for value for

Teachers Rural class money products