Executive Summary 2
Current Market Situation 3
Micro environment: 3
Marketing intermediaries: 3
BCG Matrix 4
Macro environment: 5
SWOT Analysis: 5
SWOT Matrix: 6
SEGMENTATION, TARGETING AND POSITIONING 8
Market segmentation: 8
Target Marketing: 9
Marketing Mix strategies: 12
I. Product Strategy: 12
II. Pricing Strategy: 13
1. Product line strategy: 13
2. Product Bundle Pricing: 13
3. Segmented Pricing: 14
4. Price Adjustment Strategy - Discounts: 14
III. Place – Distribution 14
IV. Promotion 15
1/ Advertising 15
2/Personal Selling 17
3/ Sales Promotion 17
4/ Public relation 17
VII. Action Program: 18
Rohto Mentholatum Company is a big company with a long history from the year 1899 in Japan. With more than 100 years of operation and development in five continents, Rohto Mentholatum Company’s products have sold widely in more than 120 countries. There have been 11 branches which are scattered all over the world such as Rohto Pharmaceutical Company Ltd. (Parent Company) in Japan, Mentholatum Australia Pty, the Mentholatum Pharmaceutical in China, and the Mentholatum Company in USA, UK, Canada and Hong Kong.
Occurring in Vietnamese market for 12 years, the product line for skin protected is one of the key businesses of the Mentholatum Company. OXY is a new product line only for men of Rohto Mentholatum Company which has just been presented in August of 2006. OXY used to a famous brand of GlaxoSmithKline, and then was bought by the Group Rohto – Mentholatum in April 2006. With the slogan “Pull handsomeness back”, OXY Vietnam has born two lotion products OXY Deep Wash and OXY Perfect Wash which have face cleaning and reducing acnes effect. Bring a very fashionable feature, OXY aims to target the male customers from 17 to 25 years old.
Because this brand has just gone into Vietnamese market, in two big cities such as Hanoi and HCMC, then, it has not made up a large market share yet. However, OXY is targeting new customer segmentation, male customers. New market, so, there are not too many competitors. We completely have chances to bring OXY lotion to one of the most famous cosmetic for men in Vietnam.
At the beginning of 2007; Rohto introduced the new kind or cosmetic product for male named Oxy. This brand is still too new with customer. This purpose of this marketing plan is developing the customer’s recognition of this brand, building strong image of Oxy brand in customer’s mind and helps them to realize the importance of using skin care products for men.
Firstly, this plan will show some research about the current situation of Oxy products in Vietnam. Some main factors will be concerned about is BCG matrix and microenvironment such as suppliers, market intermediaries, customers and competitors. In addition, this plan also mention about economic and demographic factor of macro environment. Moreover, SWOT analysis and SWOT matrix will be also identified to help the company improve its market policies. Realizing the company objectives is the next important steps to set a right and suitable strategies for company. There will be also a positioning map of the company comparing with other competitors in Vietnam market such as Nivea for men and Biore for men. Marketing mix will be 4P including: price, place, product and promotion. In the product part, 3 level of product include core benefit, actual product and augmented product will be identified to help company to realize the advantages and develop them. Next, a plan about promotion will be set to attract more customers. For example, the company will choose some main types of advertisings such as: magazines, newspapers, TV, websites, buses and bus stops. Besides that, public relation is also one of the important steps for promotion parts. The company aim to put 5% of revenue to spend on this to develop the customers’ awareness. For sale promotion, Oxy will have some discount or rewards for some special events or give the customers some free goods such as clothes. In addition, the company set strategies about personal selling. For instance, the employees will be sent to the supermarkets or shops to promote the products. Oxy still had narrow distribution so in the place section, the company plan to provide for more shops and supermarkets, selling products through internet and telephones. The final “P” mention about is price. The price will reduced to satisfy customers through discount in some special events such as Rohto Mentholatum anniversary each year. Plus, an action program will be set to ensure that all strategies will flow in the right direction and also calculate the budget for the whole plan.
Current Market Situation
When OXY face wash was introduced in Vietnam 2 years ago, it was immediately distributed through the pharmacy and shops that have sold anti acnes cream “ OXY 5” and “OXY 10”. However, until now, the distribution channel of OXY is still uncompleted, sometime customers cannot found it in supermarket and hard to buy from small shops.
As other convenience goods, the customers of OXY are retailer and end-customers. The product used to be sold in 2 types of customer markets which are consumer markets and reseller market.
If talking about the age of product in Vietnam, X-Men and Romano have a longer time. However, OXY still have competitive advantages since it was the first brand and the company indicate their profession by offering a set of skin protect, not just a lotion.
One Company’s rival Oriflame would launch onto the market 28% cosmetics products for men of all ages, from young to middle-aged men, which will be priced between VND45,000 ($2.81) and VND349,000 ($21.8).
Besides several well known brands in Vietnam such as Double-Rich, Biore and Nivea is start producing male cosmetic, OXY also should pay attention at new brands or famous international brands that will come due to the integration of Vietnam.
Currently, OXY is still in the process of changing from Question marks to Star. The fact is that OXY is trying to spread brand name and boost sale by using many kinds of promotions from advertisement on TV, newspaper, websites to the recent road show and “ OXY festival” in Hanoi and Saigon.
The geographicis shifting in Vietnam is from rural area to urban area. In 1990, there is only 19% of Vietnamese lived in cities, however in 2007 the number has increased to 27%. The population in Hanoi and HCMC reached to 2,541 and 5,545 million people in 2007. Based on the population structure, there is 20% of them are young male, from 15 to 24 years old. For this reason, the number of targeted consumers also is expanding.
Urban Vietnamese people have higher monthly income per person, from VND 622,000 in 2002 to VND 840,000 in 2004 and predicted to reach VND 1,200,000 in 2008. (General Statistic Office, 2008) However, Vietnam’s inflation rate hits 25.2% in May 2008, highest on a decade. This will lead to a significant decrease in demand of cosmetic.
Cooperate Objectives: Continue being the leading brand in Vietnam male’s cosmetic market,
Marketing Objective: We plan to start the new marketing plan in summer 2009 and end at autumn 2010. OXY is expected to be in mind of at least 70% customers and obtain 20 - 25% market share by applying a VND 3 billion massive promotion plan aiming at young, stylist and trendy Vietnamese.
Finance Objective: Targeting at upper class customers in urban area, OXY hope to achieve over VND 50 billion sales from 1,2 million phials and approximately VND 20 billion profit autumn 2010. The profits before taxes are also expected to increase 15% at the end of plan.
SEGMENTATION, TARGETING AND POSITIONING
To achieve the product objectives, we should make the decision about segmentation, targeting and positioning
+ City or metro size: over 4,000,000
+ Density: urban
+ Age: 15-24
+ Gender: male
+ Income: average VND 3 million per months and more
+ Occupation: student, young, white-collar worker
+ Generation: Digital generation
+ Social class: upper middles and over
+ Personality: gregarious
+ Occasions: regular occasion and special occasion
+ Benefit: easy to use, suitable price
+ User status: potential user and regular user
• Firstly, we should go to evaluate the market segments base on three factor: segment size and grow, segment structural attractiveness and company objectiveness and resources
- Segment size and grow: Recently, OXY has a significant increase in Viet Nam market. According to Taylor Nelson, the cosmetic for men is 2% of cosmetic market in 2004, 2.5% in 2005. In the middle of 2006, with the appearing of OXY, it dominated the cosmetic market for men. From there until now, OXY has a significant growth in Vietnam because Vietnam has the large number of young population, therefore, OXY’s segment is large size and fast-growth which is approximately 1.21% in 2007 (General Statistic Office 2007).
- Segment structural attractiveness:
+ Level of competition: Medium level of competition, Oxy has 4 main competitors which are Romano, Biore, Nivea and Oriflame. However, as an expert in anti acnes and men-focus product line, OXY have more advantages than rivals.
+ Power of buyers: Since OXY is convenience products and can be found easily, buyers do not have much power with company.
+ Although Rohto, the owner of OXY brand do not mention about their suppliers, we believe that the global scale economic crisis may lead to a significant increase in cost of raw material for OXY.
• After evaluating the difference segments, we go to decide which and how many segment it can serve best. In general, we carry out 2 different levels of segments:
- Differentiated marketing: we will produce several kind of OXY for each different group of customers. Now, we have Oxy Perfect Wash, Oxy Perfect Clean Pad, Oxy 5, Oxy 10, and Oxy Perfect Facial Sheet. Also, we will examine to design OXY cream after shaving, shampoo OXY for man Therefore, the customers can choose which one is the best suitable for them.
- Concentrated Marketing: instead of producing many kind of cream for every one, OXY just focus on treatment the pimple for men and all other products are for men only. Therefore, we will dominate the market, get the high market share and have much profit.
In “OXY festival day” which was celebrated in 2006, OXY found that approximately 75% of users said that they saw clearly the effect after using OXY; the acne was cured by OXY. Moreover, the price at 40,000vnd per phial is affordable with many people in Vietnam. There fore, we identify that our products stand at position which have high quality and medium price.
After that, we choose a positioning strategy which is the most suitable with current situation of our company:
• Identify possible competitive advantages: after finding and compete with other competitor, the company identify the competitive advantages:
- Product differentiation: Biore has one kind of face-washing for man whereas we produce more kind of OXY for man. We will examine to decide which kind of product the consumers want more. To illustrate, our company will produce the specific product for each kind of group customer: Oxy Perfect Wash, Oxy Perfect Clean Pad, Oxy 5, Oxy 10, and Oxy Perfect Facial Sheet
- Service differentiation:
+ Our targeted customers are young males, who usually hate shopping. At this time, OXY can only deliver to distributors and retailers, however, we will create a delivery system which will deliver fast and efficiently. Thus, consumers will get our product without shopping and OXY will get customer information for direct marketing.
+ Also, when the customer buy product, we have the advising-service, the staff will advise which product is the best with them.
- Channel differentiation:
+ With a set of skin care products, OXY can open OXY shop to sell all products of OXY only
+ OXY is also being sold in pharmacies who are company’s old retailers while other products can not be sold here.
+ Until now, OXY has connected and are connecting with super markets such as: FiviMart, BigC, Vincom Tower, etc to convince them become our intermediaries
- People differentiation: in each quarter, we will open the training program to improve the skill of our staff. Also, we will award worthy for the employee that work effectively
• Choose the right competitive advantages:
+ Distinctive: Instead of offering single lotion like other competitors, OXY provide a set of skin care that help customers gain the best efficiency of the product
+ Profitable: In the parallel with making skin smoothly and whitely like other competitors, OXY also focus on helping customers to eliminate acne, help them to protect the face and create a fashionable and manly style.
+ Affordable: As a famous anti acnes brand, the additional feature of OXY face wash which is anti acnes cost less than other company, lead to an affordable and reasonable price.
+ Preemptive: we will register the copyright and design with the specific term such as guarantee stamp to avoid other company copy as well as expand distribution channel which help customers to buy our real product easier.
• Selecting an overall positioning strategy:
Comparing the price of OXY with other competitor, the average price of cream for men vary from 30,000 to 50,000vnd while the OXY’s price is around 40,000vnd. Further more, OXY product has some specific feature such as treatment acnes effective for man and easy to use. Therefore, our company applies the “More for the same” for our products which is high quality and medium price.
Marketing Mix strategies:
I. Product Strategy:
II. Pricing Strategy:
1. Product line strategy:
A new type of anti-acne provided by Oxy is face wash, which has been divided into two products: Oxy Perfect Wash and Oxy Deep Wash. The main differentiation between these two products is:
2. Product Bundle Pricing:
We plan to provide a set of anti-acne products which include Oxy Perfect Wash or Oxy Deep Wash and other Oxy products which leads to a 10% decrease in each product price in the parallel with selling each product separately. As a result of that, the company will not only get more sales and more profit but also make the customers feel good by decrease the price.
3. Segmented Pricing:
This program focuses on students who can get 10% discount when they have their student cards. The reason that student will be the target customers for discount is that student is the most sensitive type with acnes and most of them not have much money to spend on cosmetic. However, the demand for this product from this segment is still high. Therefore, the company can get more profit by encouraging sales for students.
4. Price Adjustment Strategy - Discounts:
o Cash discounts:
Apply for Oxy marketing intermediaries including supermarkets and pharmacies. Especially, for each 100 products purchased, the retailers will get 10% discount. This discount strategy will encourage the retailers and become our competitive advantage with other cosmetic companies, therefore increase the company total sales.
o Quantity discounts:
In order to not only encourage consumers to buy more but also promote other products, at every first week of months start June 2009 to September 2009, by purchasing each of Oxy products, customers will get a free Oxy Perfect Clear Pad and Oxy Perfect Facial Sheet. This program will not only promote other Oxy products but also boost sales for the main products, Oxy Perfect Wash and Oxy Deep Wash.
III. Place – Distribution
Based on the market analysis and market segmentation, it can be seen that OXY is a convenience product, moreover, OXY aim to attract young, stylist and fashionable customers from upper medium class and over who require a wide spread and dynamic distribution channel. For this reason, hybrid marketing channel and intensive distribution strategy is quite appropriate with our product. We determine to sell the product through 3 main channels to customers and business.
Multichannel Distribution system, adopted from “Principle of Marketing, Kotler et al, pp 334, 2008
As other cosmetic product, OXY is being sold to customers through the retailers such as super market or small shops and even the medicine shops that have sold the anti acne cream tube “OXY’ before. Until now, male cosmetic is still a new segment in Vietnam’s cosmetic market. Due to the culture barrier, and natural behaviour not many male know or go shopping for a cosmetic product. In order to exploit these potential customers, in the parallel with the intermediaries system, we decide to sell OXY via internet and phone also .With only click or a phone call, customers in Hanoi and Hochiminh city can buy their product with exactly the same price as it is in the shop.
Furthermore, we also want to spread our product and brand name further, male barber shop is a good place for us to expand the market. At first, OXY will be provided freely to some big barber shops in Hanoi and Hochiminh city. Customers will get free face wash before or after cutting hair in these shops. After that, if there are positive feedbacks from customers, we will start selling OXY to these barber shops, the owner will probably get 5 to 10 commission percentage on each products they sell.
As a leading brand in Vietnam’s male cosmetic market, OXY look forward to hold and strengthen the brand’s position in the next year by a massive promote strategy aiming at young Vietnamese people. Since customers of OXY are mostly student in High schools and Universities, our promotion also needs to be dynamic, creative and trendy.
1/ Advertising: At this time, OXY is still trying to be a star in the cosmetic market. For this reason, our advertisement need to be informative which will tell customers about our products as well as build the company image in customer’s mind by emphasizing the lifestyle via personality symbol of handsome and famous Vietnamese actors and singers.
- OXY now rarely advertise on VTV3, and major local channels such as HTV 9 or Hanoi TV. However, to attract more teenage, we plan to expand the advertisement to VTV6, which is new channel for teenage only, 2 times a day, from 5 pm to 6pm, before and after the programs. At that time, most of teenage have finished their class and go home so they will have time to watch the TV as well as our advertisement.
- Although magazine and newspaper is a good tool for promotion, based on the technology trend, youth tend to read news on website instate of printed newspaper, for this reason, we only corporate with a few famous teenage magazines such as hoahoctro, 2!, or Sinhvien Vietnam. On the other hand, OXY will increase and start advertising on common website such as vnexpress.net, dantri.com, free download music and teen designed webs like kenh14.com.
- Finally, instead of using billboard, we plan to use Bus stop and buses as one of the major media vehicles. The fact is that more and more young people are using buses, buses and bus stops become the best place for us to promote the products. The average time bus users see our advertisement is at least 15 minutes, longer than every other kind of advertises. Moreover, the cost for it is much cheaper than other types, from $4000 to $8000 per year for a bus stop depend on the location and $2500 for a bus compare with $2000 for 30 seconds advertise on TV.
2/Personal Selling: As we have mentioned in the distribution strategy, OXY will start selling face wash cream in the barber shop. Because personal selling is costly, we plan to send the employees to some big shop for introducing the products as well as give advice to customers. It can be seen that the customers in these shop are usually fashionable, trendy and can afford our product well. The action can also be considered as pull strategy since it can build up the image of product and company in customers’ mind and change the perception about male cosmetic as well.
3/ Sales Promotion: OXY plan to introduce the discount campaign in the summer and special event such as Rohto Vietnam anniversary each year. In the program, customers have chance to get stylist items such as Ipods, Oxy style clothes as well as free product from the company. Moreover, OXY also provide free additional items with to every products. For example, when customers buy 1 OXY perfect wash they will get 2 free OXY facial sheet and 2 OXY perfect clean pads which cost around VND 4,000, equal with 10% of product price.
4/ Public relation: Aiming at young Vietnamese people who are mostly still students, we plan to establish a scholarship for poor students in Vietnam. 5% of the revenue on each product will be saved for the purpose. Each year when the new semester begin, OXY will give the scholarship to poor students and each months, VND 500,000 will be given to crippled students and orphans who study in school. All information of this charity program will be published and transparent on public media and common website.