EIM1 Group 7 Bitis - khu hguv hfuv jfjfyfi PDF

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ER PROJECT– TEAM ASSIGNMENT COVER SHEET STUDENT DETAILS Student name: Nguyễn Đăng Hoàng Long Student name: Tôn Thị Diễm Hằng Student name: Ngô Ngọc Quỳnh Tâm Student name: Nguyễn Phước Quý Minh Student name: Trần Lê Diễm My Student name: Trần Trịnh Vương Kim

Student ID number:

20447885

Student ID number:

20448804

Student ID number:

20448820

Student ID number:

20448703

Student ID number:

20448686

Student ID number:

20448950

UNIT AND TUTORIAL DETAILS Unit name:

Enterprise Innovations and Markets

Campus & Day:

Campus V; Thursday class

Tutor’s name:

Dr. Huỳnh Quang Minh

Unit number: Tutorial time:

ASSIGNMENT DETAILS ER Report title: Biti’s Morsol: The shoe-replaceable sneakers Due Date submitted: Word count: 4,476 date: 11/04/2021 Brand name & Product category:

200911 3:30pm

11/04/2021

Bitis; Sneakers.

DECLARATION We hold a copy of this assignment if the original is lost or damaged. We hereby certify that no part of this assignment or product has been copied from any other student’s work or from any other source except where due acknowledgement is made in the assignment. We hereby certify that no part of this assignment or product has been submitted by us in another (previous or current) assessment, except where appropriately referenced, and with prior permission from the Tutor / Unit Coordinator for this unit. No part of the assignment/product has been written/produced for us/me by any other person except where collaboration has been authorised by the Tutor /Unit Coordinator concerned.

2 We are aware that this work will be reproduced and submitted to plagiarism detection software programs for the purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism checking).

Student’s signature: __ Hoàng Long, Quỳnh Tâm, Diễm Hằng, Vương Kim, Diễm My, Quý Minh_____ Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been signed.

Contents I.

Introduction…………………………………………………………………….……........3

II.

Current Innovation………………………………………………………………………..3 A. Biti’s Hunter………………………………………………………………….….……3 B. Biti’s Hunter x Marvel…………..……………………………………………………6 C. Innovation Insights……………………………………………………………………8

III.

Current Marketing Environment………………………………………………………….9 A. PESTEL Analysis……………………………………………………………………..9 B. Competitors Analysis………………………………………………………………...10

IV.

Current Microeconomics Environment……………………………...…………………...17 A. Current Market Structure………………..…………………………………………...17 B. Supply And Demand…………………...…………………………………………….17

V.

Problem Identification………………………..………………………………………….20

VI.

New Innovation…………………………………………………………………………..21

VII.

Target Market…………...………………………………………………………………..21

VIII.

New Marketing Mix……………...………………………………………………………21 A. Product…………………...…………………………………………………………..21 B. Price………...………………………………………………………………………..22 C. Place………………………………………………………………………………….22 D. Promotion…………...………………………………………………………………..23

3 References…………………………….………………………………………………….27 Appendices……………………………….………………………………………………34

I.

Introduction: According to Biti’s website (Câu chuyệ n, n.d.), Bình Tiên Imex Corporation (or more

commonly known by consumers as Biti’s), is a shoe-making company originated in Vietnam and has since become one of the most popular consumer goods producers in the nation. Established in 1982, Biti’s now boasts over 1,500 stores in Vietnam, having exported to 40 countries, 8,500 customers, and 25,000,000 products manufactured per year. Its vision is to become a strong competitor on consumer products in Asia and its mission is to continuously innovate and improve the product quality to always satisfy its customers. II.

Current Innovations: A. Biti’s Hunter: During the 1990s, Biti’s – with high quality and durability products - was among the most popular brands out there. However, when the 2000s came with various foreign competitors fighting over Vietnamese shoe markets due to our post-1986 diplomatic policies to open the nation (Anh, 2020), Biti’s started losing its ground. Foreign competitors came with various colorful and stylish shoe models that got favored over Biti’s simple design. Biti’s since have started to be known as the old fashioned brand that the older generations used to have (Kiên, 2018). According to Brands Vietnam (2018), in 2017, Biti’s has started a new campaign to recapture its lost market and appeal to a new generation - the youth: Biti’s Hunter. It

4 came up with a different product line called Biti’s Hunter and collaborated with some of the most popular Vietnamese idols (Sơn Tùng MTP and Soobin Hoàng Sơn) to advertise the new products. The most notable campaign was the “Đi để trở về” (translated as “Going far to return home”) Music Video where a heartwarming story about “Going home” and “Family values” was released during Tet Holidays. It was a massive success that brought the company a 300% sale target within the next week. There are many aspects of innovation that apply to Biti’s Hunter. First, Biti’s Hunter is an innovative move in the fact that they quickly identify, grow, and seize the opportunity (Garline et al, 2018). According to Ng, 2021, Biti’s managers realized amidst the shoe market, the price segmentation from 500,000VND - 1,000,000VND was lacking, which is why Biti’s Hunter products were priced accordingly. Their PR through music videos by celebrity singers was also unique (which was not common at the time). Second, Biti’s Hunter is Biti’s serving the shoe market still, but using a different way, a different image, which is also an aspect of innovation (Garline et al, 2018). The changes in the industry, the market, and consumer perception towards what makes a good pair of shoes forced Biti’s to re-position: Creating a new youth-centered designfocused sub-brand (Biti’s Hunter) to step away from its quality-focused generic footwear image (Biti’s). Biti’s innovation can be both incremental and disruptive in some ways. It is incremental because it was a duplication of other youth-focused foreign shoe brands. It could also be seen as a disruptive innovation as it is a bottleneck breaker, which means it introduces an old product (youth-centered fashion-focused sneakers) to a once limited

5 market (Garline et al, 2018). This limitation is the price of foreign brands, where Biti’s Hunter’s lower price made it much more accessible. In the 4P of Innovation, Biti’s Hunter campaign is an innovation in their positioning and product. Their positioning used to be a generic quality shoe brand. Their products used to be about low price and durability. Now, it is about unique design, youthful aesthetics, and the meaningful messages it conveys, which are patriotism, youthfulness, and fashionability.

6 Figure A. Son Tung x Biti’s Hunter

Figure B. Biti’s “Đi để trở v ề”

Source: Google

Source: Google

B. Biti’s Hunter x Marvel: Early 2018, Biti’s launched the collaboration with Marvel and sneakers started to fly off the stock shelves as they were officially opened for sales later the same month. Biti’s stepped in the right direction by using social networks and online channels extensively to reach out to their customers and built up the hype; with forums discussing the new lines from before the release until after the launch. These forums hosted conversations interviewing lucky customers that got to buy the sneakers early.

7 Biti’s got this success partly from partnering up with TIKI.VN, an online retailer and CGV, the biggest cinema chain in Vietnam; and Biti’s used both of these channels as a means to deliver their core messages and marketed their new products. By using scarcity tactics, only sold in limited numbers and very specific periods, they encouraged their customers to act immediately or miss out. This prompted the products to sell out instantaneously with a record of 2 minutes on TIKI. Biti’s also heavily emphasized their collaboration with Marvel by modeled three different designs based on the three superheroes Thor, Ironman, and Captain America with each respective model being tailored to showcase the traits and features of the heroes they were representing. Other than that, Biti’s also rallied their supporters to post, share and tag their friends on social media sites in giveaways programs partnered with CGV. Alongside sponsoring celebrities to endorse and advertise Biti’s new shoes in their outfits; gave Biti’s a huge online presence. The Biti’s Hunter x Marvel innovation is an incremental one in the process dimension, where Biti’s step up its marketing and advertising method. Biti’s became more aggressive and more confident in how it approached its customers, compared to its older marketing campaign.

8

Figure C. Biti’s Hunter x Marvel

Source: Google

C. Innovation Insights: There are a few factors that contributed to some of Biti’s successful innovations. First, collaboration with influential names and engaging in celebrity endorsement. Biti’s cooperated with Son Tung MTP, Soobin Hoang Son, and Marvel - which were popular among youngsters - to advertise their products to this exact segment. Second, great timing on trends. The two chosen singers were the most popular idols in Vietnam at that time. “Đi để trở về ” was also released right before Tet Holidays to be more effective. The same went to Marvel where the collaboration happened right after it released Avengers: Endgame and caught the attention of the entire world. Third, elaborated social media marketing strategy. Both Biti’s campaigns were greatly advertised on social media especially Biti’s Hunter Đi Để Trở Về campaign where it integrated with different user-engaging PR campaigns (giveaway, image

9 posting, post sharing, etc) not only to promote the shoes but also to share its message and raise awareness on the brand. III.

Current Marketing Environment: A. PESTEL Analysis: 1. Political and Economic: Vietnam is considered to be politically stable among countries in South East Asia (Department for International Trade, 2021). Along with other factors, Vietnam attracts a lot of FDI inflows, especially in the footwear manufacturing sector (Atharva, 2021). Although Vietnam now ranks second in the world of footwear exports, most of the export turnovers are in the hands of foreign direct investment (FDI) enterprises (Minh Hue, 2020). Although this action contributes a lot to the country’s economic growth, it creates pressures for local firms. The only way to compete with these foreign enterprises is to join the global supply chain. This goal can be achieved by having these 3 things done: build a network of raw materials and products, focus on training human resources, and maintain a professional R&D team throughout the operation (Cường, n.d). 2. Sociocultural: The demand for the domestic footwear market is over 1.5 billion USD each year. However, domestic enterprises only meet about 40% (Lefaso, 2020). Both the strong competitiveness of foreign goods and the “xenophilia” attitude of Vietnamese people are the reasons why the domestic market is being overwhelmed (Trà, 2020).

10 However, the campaign "Vietnamese people give priority to using Vietnamese goods" has motivated consumers as well as many Vietnamese footwear enterprises to change (VIA, 2016). Another positive sign is that the Vietnamese young generation now starts selecting local shoe brands actively (Trà, 2020). It is during these opportunistic times where Biti’s can achieve the most out of their innovations and campaigns and it will be even better if we can strengthen this trust in the Vietnamese goods by being innovative to prove to the domestic customers that a Vietnamese can be a strong contender even for a foreign competitor. 3. Technological: Most of the technology and 80% of raw materials are imported which implies a lack of technical capacity, design capacity in businesses (Lefaso, 2020), and underdeveloped supporting industries (Tân, 2019). Due to this, Biti’s production costs are kept at the most minimal level which gives it at least the same footing as brands such as Nike and Adidas in terms of production. Biti’s must invest more in R&D, technology, and innovations to get ahead of those foreign competitors as well as keeping local brands such as Ananas in check. 4. Legal: Different FTAs have been signed which will allow the tariff rates to decrease to 0% according to the roadmap and eliminate trade barriers in the coming years (Ministry of Industry and Trade, n.d.).

11 Although this has a lot of benefits, it is also a challenge for domestic brands. The more FDI coming to Vietnam, the more competitive pressure domestic businesses have to face due to lack of investment capital, production premises manufacturing, and outdated technology (Lefaso, 2020). All of these require Vietnamese brands to think forward and have an innovative mindset to win over customers and compete equally with competitors now more than ever. 5. Environmental: The rapid growth of shoe factories can worsen environmental pollution, which can directly affect living conditions as well as human health (Tú, 2017). Sustainability is now one of the first concerns for both businesses and customers (Viet Nam News, 2020). The Ministry of Industry and Trade for the past years has always tried to support businesses in developing environmentally friendly production technologies as well as advanced waste treatment technologies (My, 2020). This situation implies that businesses should care more about sustainability because it is both favorable by consumers and the government. It would send an even better message if Biti’s, a large brand, can pioneer a meaningful move towards to issue. B. Competitors Analysis: 1. Target markets and Marketing Mixes: 1.1. Ananas:

12 In the domestic market, Ananas is the direct local competitor of Biti’s. Established in 2010 but started to become popular with the community in 2017 the same period when Biti’s Hunter was born. The brand image that Ananas wants to deliver to their customers is a fashion sneaker brand offering classic but youthful shoe models with diverse colors and materials at a reasonable price for Vietnamese people, especially students. Target market: Ananas also targets the same market as Biti’s since young people have become a potential market - they influence different fields in the society, their consumption rate affects people’s income. Gen Z has also made up an incremental amount in the population (Francis & Hoefel, 2020). Product: Fashionable, minimalistic, youthful vulcanized-soled sneakers with diverse colors and materials at a reasonable price. Price: With the 400.000 VND - 1 million VND price range. Place: Until now, this firm has 10 stores with different formats such as standard, flagship, pop-up, outlet in Ho Chi Minh city. In general, their product is distributed directly to their stores, not through any intermediaries. Promotion: Apart from the social media channels, Ananas has no promotion campaign yet. Sometimes, limited-edition sneakers are released to stimulate demands. 1.2. Nike: Another direct foreign competitor of Biti’s is Nike. The main reason from which we choose this brand is that it is, in global consumer minds, the No. 1 shoe brand for innovation, style, and purchase intention (Danziger, 2019). Nike

13 is the global leader in the sporting goods industry and has established itself in a strong position as a premium brand. Target Market: Nike mostly refers to people from 15 to 40 years old of both gender: men and women. Teenagers are preferred to build long-term brand loyalty. In this segment, people tend to engage in sports and athlete activities who are largely living in urban areas with high market densities. Product: About Nike, they offer a wide range of products including shoes, clothing, accessories, and equipment. Yet, sneakers still carry the most profit. Nike even creates distinguished shoes for each sporting activity. Nike By You is another exclusive product feature of this company. Price: Nike utilized a value-based pricing strategy (Haque, 2020) which ultimately put the average price of Nike products at 2,145,000VND ($93). This price is quite high since the average income of Vietnamese people is only $287/month (CEICdata.com, 2018). Place: With the headquarter in America, Nike has operated their business globally by selling shoes through their official website and offline stores on the street or in the shopping malls. Promotion: Nike has made use of all marketing channels to promote its products. To be specific, social media channels, online campaigns, and exhaustive promotions. Inviting sports stars to be their ambassadors, sponsoring for marathons or international events also drive them to the customer’s mind. 1.3. Biti’s:

14 Target Market: The new Bitis Hunter targets the 15-25 market segment. This generation is also known as Generation Z which we will further discuss their characteristics along the way (refer to part VII. Target Market). Product: Although generating many types of footwear such as ballet flats, sandals, or even slippers, Biti’s derives its maximum revenue from the sale of sports shoes. There is also Gosto product line for women, offering sandals, highheels, and handbags. Price: Biti’s uses the market skimming pricing strategy, gradually reducing the price over time for a product. At a competitive price compared with the foreign brands, for about 500.000VND to over 1 million VND, Biti’s allows students to own a high-quality sneaker. Place: They operate both online and offline product distribution. For the online channels, the sneakers are published through their official company’s website, their Facebook fanpage, and some e-commerce platforms. Biti’s are distributed directly to the firm’s branch centers, intermediaries, supermarkets/shopping malls, or some marketing stores throughout the country. Promotion: Biti’s promotions are usually very unique, in form of collaborations with artists, and always intertwined with a meaningful narrative and storytelling. It is told by the Marketing Director of Biti’s, Mr. Nguyễn Phú C ường (CAM, 2020), that Biti’s is currently trying to project meaningful marketing campaigns with a real story behind, little commercial integration, and show that it cares about the consumers. The values it currently prioritizes are uniqueness, empathy, warmth, and being realistic.

15 2. Brands’ Perceptual Positions: Besides the secondary research, our group has also conducted a questionnaire survey for the three brand’s perceptual position in reality. From the results obtained, the perceptual maps regarding “Price vs Quality” and “Price vs Aesthetics” by people from 18 - 25 years old are illustrated below:

Price vs Quality

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Pricevs Aesthetics

3. SWOT Analysis: Please refer to Appendix A for a detailed version.

Strengths -

BITI’S

Strong reputation Strong distribution system Product quality Marketing expertise

Weaknesses -

Opportunities -

Local product endorsement Having a professional R&D team

Lack of local suppliers Too much emphasis on appearance can decrease part of durability Threats

-

Chinese low-cost shoe brands Fake products Losing market share

17

-

Strengths Strong reputation Strong distribution system Innovative products Low-cost due to outsourcing

NIKE

Weaknesses -

Opportunities -

Strengths -

Affordable price Great am...