Aba-report - Assignment 2, group work PDF

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SITUATION ANALYSISREPORTRMIT University - Marketing Principles - Phung Thanh Phuong Team 2 - Group 8ABA POWDER DETERGENTTran Ngoc Mai s3618956 - Phan Thuy Linh s3681376 - Nguyen Hoang Hien Nhi s Woo Jong Hoen s3836531 - Nguyen Thi Kieu Duyen 3836298CONTENTSSITUATION ANALYSIS 3####### Company 3######...

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RMIT University - Marketing Principles - Phung Thanh Phuong

Team 2 - Group 8

SITUATION ANALYSIS REPORT ABA POWDER DETERGENT

Tran Ngoc Mai s3618956 - Phan Thuy Linh s3681376 - Nguyen Hoang Hien Nhi s3698416 Woo Jong Hoen s3836531 - Nguyen Thi Kieu Duyen 3836298

CONTENTS (interactive) SITUATION ANALYSIS ............................................................................................. 3 Company ....................................................................................................................3 Product

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MARKETING ENVIRONMENT ........................................................................... 4 Micro Environment

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Macro Environment

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SWOT ANALYSIS ........................................................................................................ 6 Strengths

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Weaknesses

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Opportunities

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Threats

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STDP .................................................................................................................................... 8 Segmentation

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Targeting

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Differientation

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Positioning

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CONCLUSIONS ......................................................................................................... 12 REFERENCES ............................................................................................................. 13 APPENDICES .............................................................................................................. 14 2

SITUATION ANALYSIS Company History Dai Viet Huong, also known as VIETCOS, was originally founded in 2003 by a group of chemical engineers and medical doctors at Can Tho University, Vietnam. Before it was renamed to Dai Viet Huong, it was known as Viet Huong Cosmetics (Brands Vietnam 2013). Dai Viet Huong has had more than 15 years of experience in developing and retailing high-quality products and establishing well-known brands like Biona, E100 and Doreen (Yellow Pages n.d.).

CEO The CEO of Dai Viet Huong is Mr. Ngo Trung Quan (Yellow Pages n.d.). He was born in 1960 and is also the head of the management board of Dai Viet Huong Limited Liability Company (Ministry of Home Affairs of The Socialist Republic of Vietnam 2016).

Mission statement Dai Viet Huong is committed to pursuing good quality, adhering to ethical principles and reinforcing values set and followed by the company in their more than 15 years of operation (Bot Giat Aba n.d.)

Product Functions Aba’s main function as a powder detergent is washing clothes, with a focus on whitening and stain-removing (Bot Giat Aba n.d.).

Features ABA powder detergent features enzymes, a special formula named Thermoactiva and cellulose. Enzymes, with the aid of Thermoactiva to enhance to hydrolysis process, efficiently and quickly removes stains from fabric by breaking down fat, oil and protein chains and dissolving them into water. Cellulose is used to improve the soil suspension profile and minimize future stains. The product is advertised to have high whitening power while keeping the fabric colors fresh (Bot Giat Aba n.d.).

Design Brewer (2016) suggested that people develop color preferences based on the colors they are often exposed to in their culture and these subconscious preferences affect their choices of products. Red and blue are two commonly used colors in street signs in Vietnam, from traffic signs to store signs, especially in the rural areas. Aba powder detergent’s packaging is designed using these two primary colors: red and blue. The powder detergent comes in a variety of sizes, from 400g to 6kg, in plastic packages.

Market share & Brand awareness Aba is reported to be the third most commonly used laundry detergent, accounting for 7%, after OMO and Ariel (Q & Me n.d.). Only one year after their launch in 2012, Aba’s market share was up to 6-8% all over the country and 10% in the Mekong Delta region (Nhip Cau Dau Tu 2013). This rate corresponds to about 35 to 45 billion VND per month. In addition, focusing on rural areas in the Southeast and the Mekong Delta are households living in rural areas of the West, which helped Aba’s revenue increase rapidly around 400- 500 million dollars a year on average (Marketing Chien Luoc 2013).

MARKETING ENVIRONMENT Micro Environment Marketing Intermediaries Lazada, Shopee, Sendo and Tiki are reported to be the most popular E-commerce platforms in 2019 (Appendix 1) (Q & Me 2020). Due to the development of E-commerce, Aba’s products can be seen on these platforms. The powder detergents are also sold at supermarkets namely Big C, Co.opmart, Lotte Mart, Metro and Aeon mall, as well as the convenient stores: Vinmart, Bach Hoa Xanh and Circle-k (Bot Giat Aba, n.d.). Additionally, Aba has Sovina online supermarket and street vendors as their distributors (SOVINA, 2020).

Customer: Thanks to the improved living standards and income, Vietnamese can now afford and demand higherquality and eco-friendly products (Euromonitor International 2020). To be specific, urban dwellers show a high consumption of quality products with more concerns for how their choices affects their health and the environment. The demand for fabric softeners and concentrated liquid detergents is slowly increasing in spite of its higher prices, which indicates a transparent switch from inexpensive products with compromised quality to higher-priced and guaranteed quality. Conversely, competitive price is still the top priority to buyers in rural areas, especially household products which are consumed on a daily basis. Detergent is a good case in point of high price sensitivity. People prefer to use the liquid product rather than powder because of its convenience and efficiency. However, rural areas people still prefer big pack sizes of powder products due to its cheap price.

Competitors Direct competitors: It is reported that OMO takes up to 34% of the laundry brand . Omo stood in the first place from 2017 to 2019, while Aba took the third position from 2017 to 2018 and the 2nd place in 2019 (Euromonitor International 2020). The report also shows that Aba is most popular in rural areas owing to its affordable price, good-quality and strong investment in distribution and marketing. However, recently, Surf from Unilever and Tide from Procter & Gamble are also sold well in the Mekong Delta areas. These companies have started to promote their products at a low price to rural communities. The rural areas’ price sensitivity appeals to many companies, including several imported products from Thailand. The other competitors are Comfort, Downy and Ariel. Comfort shows similar market share. Comfort’s share is slightly higher than Aba’s share from 2017 to 2018, but in 2019, they almost have the same rate. On the other hand, Downy and Ariel’s rate has noticeably lower value compared to Aba’s (Appendix 2) (Euromonitor International 2020). Indirect competitors: Fabric softeners can be considered as an indirect competitor. Fabric softeners protect the fabric by reducing friction and discoloration while processing the laundry (Downy fabric softener Vietnam Wholesale 2020). It can be estimated that Aba powder detergent can be affected by fabric softener since 2-in-1 laundry detergents with fabric softener, such as Downy and Comfort, are more prefered than those that don’t, such as Aba. According to a survey from Q&ME, households that own washing machines use fabric softener more often than households that wash by hand by 33%.

Public Sustainability: Dai Viet Huong believes that a company achieves sustainable growth when environmental activities are durable. The company always pays attention to comply with the requirements about producing products that are environmentally friendly. In addition, the manufacturing plants are equipped with modern waste treatment systems. At the same time, the employees are well-trained in awareness of protecting the environment. Therefore, the organization ensures that no materials from animals are used and only chooses environmentally friendly materials (VIETCOS 2017).

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Media public: Media public is the most fundamental tool to deliver the brand’s value and their information. Aba brands are mostly promoting their products through social media such as facebook, instagram and Youtube. Among them is Youtube, which is the detergent company’s main way to advertise. One of the bigger problems is that most people, not including those in rural areas that are addicted to the advertising and enjoy the way its advertised, dislike the advertising on Television (Staduoc, 2019)and youtube which have been described as very bad as well as inspired, insignificant and illogical the premise of the advertisement isn’t well connected to the product along with bad quality and the main idea of the advertising has been described as ‘bad’ gaining around 2,000,000 dislikes but despite this they have gain just over 30,000,000 likes with a total of almost 300k subscribers (YouTube 2020) Social activities contribution: Thanks to the social contribution to the community and society, the company is widely well-known. The most famous activity is the marathon competition. Participants enjoy and immerse themselves in unique culture and sports activities. The event was organized by Aba detergent brand (Dai Viet Huong Co., Ltd.). As an organizer of “Olympic Day”, Aba desires people to improve their health and get a healthy lifestyle. At the same time, meaningful sports activities contribute to continue developing mental and physical training for the community (VIETCOS 2017).

Macro Environment Demographic: According to the newest update by the United nation population funds, the population of Vietnam currently stands for more than 97 million people, with 65.6% rate of residents in rural areas (2019). It means that Aba focuses on a big targeted market, drawing a lot of competition from other companies. The fact that the rate of female residents accounts for more than half of the total population comes with a lot more demand from this market share. Women pay more attention to the supplementary features of the products such as washing powder for color maintenance or for baby care. Aba is anticipated to develop their products and reach novel requirements from the market.

Economic: In general, Vietnam’s GDP witnesses an upward trend every year, climbing from under 2,030USD to 2,564USD from 2014 to 2018 (Appendix 3) (The World Bank 2019). Along with that growth is a promising signal that citizens are willing to spend money for better products. Moreover, “Vietnamese people prioritise using Vietnamese goods” campaign is being widespread in many media channels (Ministry of industry and trade 2013). Taking advantage of that trend, Aba can promote their products to a larger market share.

Technological: Technology is the company’s primary concern as the product is manufactured with advanced technology and lines production that meet international standards but still adapt to the Vietnamese people’s needs. To prove it, Dai Viet Huong applied the integration of enzyme hydrolysis technology, heat generation technology to create fabric bleaching products which still protect customers. In recent years, with the increasing use of smartphones (Appota 2018), accompanied by the developing digital online shopping platform, 30% Vietnamese consumers have switched from traditional to online purchasing channels (Accenture n.d).

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Natural Vietnam is a country with the monsoon tropical climate and high levels of humidity; thus, the clothes in this season are often difficult to dry. Especially, there are two distinct seasons which are the rainy season and dry season in the Southwest; their targeted market share. As a result, it significantly positively impacts on the firm’s decision for operation when the rainy season is usually longer than the dry season. Moreover, the level of air pollution in Vietnam is high owing to the increasing number of motorbikes and cars (Mai 2020). Hence, this is one of the causes that seriously affect the retention of clothing’s scents. This calls for novel development in Aba’s products to adapt to the needs of the market.

Political Vietnamese politics is considered to bring many advantages for economic growth in recent years. Specifically, Vietnam joins many organizations not only in the region but also globally such as TTP (2015), WTO(2007). The opening of the economy is good news for the development of foreign investment in Vietnamese market and vice versa. It cannot be denied that the competitive market will be a challenge for local brands to develop their potentials in production, operation and marketing. Besides the efforts to attract foreign firms, the government has launched a campaign “Vietnamese people prioritize using Vietnamese goods” as an action to motivate Vietnamese consumption habits and promote the development of domestic companies as well. According to Trading Economics (2020), the corporate tax rate decreased to 20% in 2016 and remained unchanged for a long time to encourage business development and expansion (Appendix 4). Otherwise, the Vietnamese government has reduced the personal income tax to 35% and has kept it at that level until now (Appendix 5). From mixed activities from the authorities, Aba is now facing an unpredictable changing market.

Cultural Associated with frequent needs, washing powder has become an essential and indispensable item in households when there are 65% Vietnamese who wash their clothes every day (Tran 2015). As it is an everyday task, the consumers expect it to be as convenient as possible. To illustrate, the washing powder is anticipated to have at least 3 factors: hand skin safety, bleaching and fragrance. Besides, the Vietnamese have a xenophile mentality because of not only the quality of the designs but also foreign brands reputation. The local residents have an original belief that “imported goods are better than domestic goods”. Aba seems to be on the disadvantaged side when competing to the international brands.

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SWOT ANALYSIS Strengths • Strong distribution network established throughout Vietnam, especially in rural areas of the Southeast and Mekong Delta (Marketing Chien Luoc 2020). • Operational and efficient production with low costs. There is also an extensive network of partnerships with product suppliers and marketing intermediaries (Brand Vietnam 2013). • Good grasp of customers psychology with an understanding of cultural preferences and values in meeting consumers expectations through product quality and price (Camnest 2020). • Define the target market to deliver the right marketing strategy and know the way to create special advertising content that attracts millions of views (Camnest 2020). • Effective brand positioning in the market, especially in rural areas (Misa 2013).

Weaknesses • Similar types of products can be easily found in the market. Even aba detergent is sold at a low price but there are cheaper products than aba detergent (Nhip Cau Dau Tu 2016). • The market is almost in the hand of transnational companies, so they can be barriers for Aba to expand its market (Sea Times 2013). • Social media activities to attract customers have not been invested ( Misa 2013)

Opportunities With higher income and better education, Vietnamese people have shown more concerns for their health, living standards and the environment. As a result, there has been a growing demand for organic, natural and sustainable products. Laundry detergent with less chemicals and are more gentle on the skin and the fabric, like baby laundry detergent, are highly prefered. There is room for Aba to expand to this market as Aba’s range of products is rather limited. The trend is most popular among urban dwellers with higher incomes, therefore, this could also be an opportunity for Aba to widen their range of customers. (Euromonitor International 2020). Another trend that could offer opportunities for Aba is the rising popularity of liquid detergent. Liquid detergents are slowly becoming more favorable due to its convenience and the many added features. While Aba has launched their liquid detergents, they still haven’t done much to advertise and popularize these products.

Threats When it comes to elements threatening Aba’s development, the first to come in mind is the original belief that “imported goods are better than domestic goods”. That traditional belief has long stood in the way of Aba’s future growth and expansion. Along with the growing awareness of the environment, consumers are now searching for products that are friendly to the environment. Recyclable bottles and packages are now one of the demanding elements of the consumers. Moreover, the targeted market of Aba is currently narrowed down due to the immigration to the city of the rural residents. As the rural population is reported to account for 65.6%,of total population, outnumbering the number of residents in urban areas (United nation population funds 2019). Yet, that number is also witnessed to fall every year, even at a high speed in recent years owing to the trend of pursuing careers in big cities of youngsters. Contributing to that loss of market share, big brands (Unilever and P&G) are recently noticed to expanding their target market to the rural areas by offering cheaper prices for them (Laundry care in Vietnam 2020). This act of Aba’s counterparts seems to lower the market share of the company, igniting the firm to find a way to expand their customer circle.

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STDP Segmentation According to the Laundry Care in Vietnam report (Euromonitor International, page 3, 2020), consumers prefer powder detergent to liquid detergent due to their old habits and its multi-purposes. However, due to the rising popularity of washing machines, liquid detergents are seen to be more prefered in the future because of their convenience and saving ability. Since the income level and living standards of Vietnamese in 2020 have risen 6.7% compared to the GDP in 2019, along with increased education levels, urban and suburban dwellers are willing to spend more on FMCG products for added-value, higher quality and natural ingredients. Vietnamese consumers are also concerned about the eco-friendly element of products due to their increased awareness of environmental issues. Meanwhile, rural dwellers are more price-sensitive when buying detergent products. This leads to the huge consumption of larger-sized packages in rural areas. In recent years, thanks to promotion/ discount programs, free deliveries and more payment options, online shopping has been more popular in Vietnam. This accounts for over 50% of transactions via e-commerce websites (Tiki, Sendo, Lazada, Shopee), especially on mobile devices in urban and suburban areas while offline distributors are the main sale channel in rural areas (Homecare in Vietnam, 2020). • Segment 1: Rural housewives, especially in Mekong delta river. They tend to buy larger-sized packages to save money. They look for a washing products with decent quality and affordable price. • Segment 2: Urban housewives. Due to higher education levels, they love eco-friendly washing products with reasonable prices. They are willing to pay more. Products with these qualities are likely to be their choice. • Segment 3: Urban office workers. Most of them have middle income or high income. They are in the selfdevelopment stage so they tend to save money as much as possible in preparation for their future. They only care about the laundry products having standard quality and cheap price like rural housewives.

Segments

Rural Housewives

Demographic characteristics

Psychological characteristics

Behavioural characteristics

Geographic characteristics

• Age: 18 - 60 • Gender: Female • Occupatio...