MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM DOAN THI THU THUY MARKETING STRATEGIES FOR ROMANO SHAMPOO IN VIETNAM FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Project Mentor: Professor Dang Ngoc Dai, PhD Ho Chi Minh City 2007 WARRANT STATEMENT This is my original work. Any data result or quote in the work is clearly identified. ACKNOWLEDGEMENT I would like to thank Dr. Dang Ngoc Dai for his supports, valuable suggestions, and guidance in my project. I would like to express my sincere gratitude to all the professors of the MBMM program who have brought me valuable knowledge during the past two years. I would like to thank the managers of Unza Vietnam who has provided me the data and has input a lot in my project. Last but not least, I would like to thank Mr. Serge Bywalski, Ms Bui Phan Bao Tran and the postgraduate office who have kept an eye on the progress of our last two years work. I also would like to thank the organizer of this fruitful course. TABLE OF CONTENT Page Chapter 1. Introduction 1 1.1 Rational of Study 1 1.2 Problem statement 1 1.3 Research objectives 1 1.4 Scope of research and data collection 2 1.5 Organization of the research report 3 Chapter 2. Shampoo for men market in Vietnam 4 2.1 PEST Analysis 4 2.1.1 Political factors 4 2.1.2 Economic factors 4 2.1.3 Social factors 6 2.1.4 Technology 7 2.2 Competitive analysis (five forces) 8 2.2.1 Threat of new entrants 8 2.2.2 Threat of substitute products 9 2.2.3 Bargaining power of customer 9 2.2.4 Bargaining power of supplier 10 2.2.5 Intensity of rivalry 10 2.3 Major competitor analysis 11 2.3.1 Product competition analysis 12 2.3.2 Price competition analysis 13 2.3.3 Place competition analysis 15 2.3.4 Advertising and Promotion competition analysis 16 2.4 Opportunities and Threats 18 2.4.1 Opportunities 18 2.4.2 Threats 19 Chapter 3. Internal Analysis 20 3.1 Overview of Unza Company 20 3.2 Romano brand 21 3.3 Romano shampoo sales performance 24 Chapter 4. Results of the research 25 4.1 Objectives of the market research 25 4.2 Research approach and methodology 25 4.3 Results of the survey and discussion on findings 26 4.3.1 Main findings on usage and attitudes 26 4.3.2 Brand health 27 4.3.3 Key purchase drivers and brand association 28 4.3.4 Consumer assessment upon product performance 29 4.3.5 Consumer general assessments on the two brands 29 4.3.6 Findings on price and purchase intention 30 4.4 Romano strengths and weaknesses 32 4.4.1 Strengths 32 4.4.2 Weaknesses 32 Chapter 5. Key issues and recommended strategies and tactics to address key issues 33 5.1 Brand objectives 33 5.2 Brand positioning 33 5.3 Segmentation 33 5.4 Marketing mix (4Ps) strategy 34 5.4.1 Product strategy 34 5.4.2 Pricing strategy 36 5.4.3 Place 38 5.4.4 Advertising and Promotion 39 5.5 Recommendations for further research 41 Reference Annexes EXECUTIVE SUMMARY Shampoo is one of the most attractive businesses in which many competitors are likely to invest and expand their business. With a population of over eighty one million people, Vietnam has a great potential for investors in the personal care industry. At present in Vietnam personal care product market, there are about ten players including foreign invested companies such as Unilever, Procter and Gamble (P&G), Colgate Palmolive, Kao Corporation, Unza Vietnam, Johnson & Johnson, ICC and local companies as International Consumer Products (ICP), Sai Gon Cosmetic,…While the shampoo in general has been penetrated 100%, the penetration of shampoo- for-men has just been 69%. Therefore, this market is expected to grow in the coming three years. Until now, there are only two companies who are the main players in the shampoo- for-men segment (Unza Vietnam with Romano brand and ICP with X-Men brand). It is expected that more companies will enter this market segment in the near future and the competition is getting fiercer. The research’s objective is to examine the competitive marketing strategies of Romano brand in Vietnam, to identify Romano’s strengths, weaknesses, opportunities and threats and based on the research results to find out the aspects that would help Romano improve its marketing strategies. The research has found out the four key issues that Romano has to solve, those are i) packaging and product portfolio ii) unaffordable price iii) poor distribution in and iv) low brand awareness in the South of Vietnam. The research has proposed an implementation plan to improved marketing strategies of Romano to gain growth for the coming years. - 1 Chapter 1 INTRODUCTION 1.1 Rationale of Study Before 2001, there was no notion of personal care product for men in Vietnam. Since Unza Vietnam’s launched Romano personal care brand in May 2001, the market of personal care product for men has developed and grown until today. At present, while in the female shampoo market of Vietnam has become saturated with a lot of players, the shampoo for men market has been growing rapidly and still expected to grow in the next five years. At present, in Vietnam market, there are 2 main brands presently playing in this sector: Romano of Unza Vietnam Company and X-Men of International Consumer Product Company (ICP). However, it is expected that more players will enter this market in the near future and the competition become fiercer as it has taken place in the female hair-care market. To prepare for the increasingly competition in the near future, Unza Vietnam needs to develop marketing strategy for Romano brand in order to consolidate its position in the market of personal care products for men. The purpose of this study is to analyze Romano’s competitive situation and to propose a marketing strategy for Romano. 1.2 Problem statement Romano was the first brand of shampoo for men in Vietnam market. It was launched into Vietnam market in 2001 while the market was still very small and there was no notion of shampoo for men at that time. It has gradually built up its name as a premium brand of shampoo for men in the upper mass market. Having recognized that the male shampoo market was a very potential market, ICP launched X-Men in 2004. With proper marketing strategies and skillful tactics, - 2 X-Men quickly built up its name and gained market shares from Romano. Although the sale of Romano has grown year by year, its market share has declined over the years since 2004 until now. It also lost the position of the market leader in this segment. It is also foreseen that more competitors will enter this market soon, especially two giants P&G and Unilever. Therefore, this research aims at finding out the key issues and recommendation of the marketing strategies to address those issues in order that Romano can achieve its growth objective. 1.3 Research objectives - To examine the competitive marketing strategies of Romano in Vietnam - To identify the strengths, weaknesses, opportunities, threats of Romano. - To evaluate the consumers’ perception and assessment towards Romano brand. - To find out the aspects that would help Romano improve its marketing strategies. 1.4 Scope of research and data collection Scope of research - Due to limited time, the research was done in Ho Chi Minh City and Hanoi only. Ho Chi Minh City and Hanoi are the two biggest cities of Vietnam which have the biggest consumption of shampoo-for-men. Therefore, in this research, HCMC can be used to represent for South Vietnam and Hanoi represents for North Vietnam and sum of HCMC and Hanoi represents for total Vietnam. - 3 - The research’s scope is to identify the SWOT, to analyze the current marketing mix situation of Romano brand and to improve marketing mix strategies to achieve the brand’s objectives in the period 2007-2010. Data collection: - Data are collected through Unza Vietnam’s marketing report, company’s profile, and some available documents. - Research findings are collected by discussing with the managers of the company and by conducting market surveys including focus group and face- to-face interview. 1.5 Organization of the research report The research consists of five chapters and is structured as follows. Chapter 1: Introduction This chapter explains the rational of study, research background, objectives, problems, scope and limitations, and the methodology. Chapter 2: Overview of Vietnam Male Shampoo Market This chapter introduces the Vietnam market of shampoo for men by using the PEST (political, economic, social and technology) and Competitive analysis (Five forces framework), withdraws Romano’s opportunities and threats. Chapter 3: Internal analysis This chapter analyses the internal factors and describes the brand’s strategies. Chapter 4: Result of the market research The significant survey results are presented along with discussion. From the internal analysis and results of the market research, the strengths and weaknesses of the brand are identified. Chapter 5: Key issues and Recommendations This chapter summarizes the key issues that Romano brand is facing and recommends the strategies to address those issues. - 4 Chapter 2 SHAMPOO-FOR-MEN MARKET IN VIETNAM 2.1 PEST Analysis 2.1.1 Political factors Vietnam is the most politically stable in the region and the country leaders have been younger and higher education than that in the past. This new generation of country leader will move country toward the modernization, industrialization speedily and more effectively but less corruption. Vietnam political environment is favorable for investment project in term of capital security and long run business. 2.1.2 Economic factors Vietnam has the population of over 80 million of which half are men with the annual population growth rate of about 1.3%. Besides, the GDP of Vietnam has increased over the past years and expected to continue to grow at the rate of 8% until 2010. Therefore, Vietnam is considered as an attractive market for many companies especially personal care products which were in the past considered as “luxury” products. Chart 2.1, 2.2 and 2.3 show the forecasted population, GDP growth and GDP per capital of Vietnam. [...]... industry in Vietnam has great potential to grow in the near future - The growing of AB economic class in Vietnam plus the increase of male consumer base due to population growth Consumers are moving “upper market” and preparing to pay for premium brands like Romano - The revolution of metro sexual in Vietnam Taking their cue from Vietnamese women and the increasing influx of Western marketing campaigns, Vietnamese... threats for Romano in the coming years as follows 2.4.1 Opportunities: - Average annual growth rate of the market size of shampoo for men in Vietnam is about 40%-50% in the past 3 years, and the industry is expected to reach 25 million US dollars in 2009 The penetration rate of shampoo for men now is 69% while the penetration rate of shampoo for women is 100% This implies that the shampoo for men industry... size is big enough So the competition is foreseen to be fiercer In general, rivalry among competitors is high The chart 2.6 summarizes the five-force analysis of shampoo -for- men industry Chart 2.6: Five forces analysis of the shampoo for men industry in Vietnam Threat of new entrants High Bargaining Power Suppliers Middle Rivalry among Existing firms High Bargaining Power Buyers Low Threat of substitute... set up in 1997; its factory is in Vietnam – Singapore Industrial Park Until now the company has 7 brands including Romano (personal care products for men), Enchanteur (personal care products for women – upper mass), Eversoft (skincare for women), Gervenne (personal care products for women – low income), Izzi (splash de cologne for female teens), Bat and Shinyo (household) in which the two most important... of Romano UNZA VIETNAM General trade Sub- distributor Franchises 9 key cities - Modern trade North MT Wholesalers Retailers END CONSUMERS (Source: Sales report, Unza Vietnam) South MT - 24 3.3 Romano shampoo sales performance During the last three years, the data of the Romano shampoo sales performance are reflected in the table 3.1 Table 3.1 Performance of Romano brand during 2003-2006 Shampoo for. .. the survey and discussion on findings 4.3.1 Main findings on usage and attitudes - Penetration As shown in annex 1, in total Vietnam, the penetration of male shampoo has grown from 33% in 2005, to 51% in 2006 and 69% in 2007 (annex 1) While the penetration of shampoo in general (either for women or for men) has reached 100%, the penetration of shampoo for men has grown very fast over the past three... room for men’ shampoo penetration This implies that the market is still growing - Reasons for not buying shampoo for men The figures in annex 2 shows that among the male consumers who do not use shampoo for men 44% says that they don’t buy shampoo for themselves, so they do not differentiate which one is for men or for women So Unza has to take this into account to switch these 31% consumers into users... annex 7 that: - In term of being a brand recommended for the other persons to use, Romano is lower than X-Men in HCMC but better than X Men in Hanoi In total country, Romano is on par with X-Men We can conclude that Romano is preferred in Hanoi and X-Men is preferred in HCMC - Most often used brand/ Regular used brand: Romano is lower than Xmen in HCMC but higher in Hanoi In total country, Romano is lower... 2.2.5 Intensity of rivalry Since the past 2-3 years, we have seen the hair care war in the sector of hair care for female Most of the players spent a huge budget for advertising and promotion, resulting in less profit Some brands of female shampoo have had to depart the playground In the sector of male shampoo, in 2004 and 2005, there were 4 players: Romano, X-Men, Racing and Komachi But Racing and... modernity and masculinity Using Romano enhances men’s self-confidence and people view him with respect and believe in his abilities - 23 - Pricing Pricing will be at premium end in male personal care sector in line with the brand’s high quality image - Packaging The range of male toiletry products is presented in packaging with caps in solid black color and the bottle body is in solid, masculine and modern . and to propose a marketing strategy for Romano. 1.2 Problem statement Romano was the first brand of shampoo for men in Vietnam market. It was launched into Vietnam market in 2001 while the. STRATEGIES FOR ROMANO SHAMPOO IN VIETNAM FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Project Mentor: Professor Dang Ngoc Dai, PhD Ho Chi Minh City 2007. distribution in and iv) low brand awareness in the South of Vietnam. The research has proposed an implementation plan to improved marketing strategies of Romano to gain growth for the coming years.