FINAL ASSIGNMENT OPTIMAL MARKETING CHANNEL SYSTEM DESIGN FOR INNISFREE MEN FACIAL CLEANSER

Innisfree is popular for its affordability and brand concept, which emphasizes healthy, environmentally friendly, reasonably priced beauty products with ingredients responsibly sourced f

VIETNAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

FINAL ASSIGNMENT OPTIMAL MARKETING CHANNEL SYSTEM DESIGN

FOR INNISFREE MEN FACIAL CLEANSER

Huỳnh Vĩnh2

Marketing Channel System719H0938 Of Innisfree

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Chapter 2: MarketOverview

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Chapter 3: Brand Key

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Chapter 8: Optimal Marketing Channel SystemDesign Suggestions

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Chapter 1: Amorepacific Vietnam Company LimitedIntroduction

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LECTURER'S COMMENTS

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 1

1.1 AmorePacific Vietnam Company Limited 1

1.2 Innisfree 2

1.3 Innisfree Forest For Men Cleansing Foam 4

1.3.1Innisfree Forest For Men Shaving & Cleansing Foam 4

1.3.2Innisfree Forest For Men Oil Control Cleansing Foam 6

1.3.3Innisfree Forest For Men Fresh Cleansing Foam 6

CHAPTER 2 MARKET OVERVIEW 8

2.1 The cosmetics and facial cleansers market in Vietnam 8

2.2 Men's facial cleanser market in Vietnam 10

2.3 Male cleanser competitor analysis 12

2.3.1 Lower price range competitors of Innisfree’s male facial cleanser 12

2.3.2 Same price range competitors of Innisfree’s male facial cleanser 12

CHAPTER 3 BRAND KEY 14

3.1 Root strength: 14

3.2 Competitive environment: 15

3.3 Target customers 15

3.4 Insight 16

3.5 Benefit 17

3.6 Values, beliefs and personality 18

3.7 Reasons to believe 18

3.8 Discriminator 18

3.9 Essence 19

CHAPTER 4 APPROACHING NEEDS AND PROBLEMS 20

4.1 Primary data 20

4.2 Secondary data 25

CHAPTER 5 MARKETING MIX PROBLEMS AND SUGGESTIONS 29

5.1 Product 29

5.2 5.2 Price 29

5.3 Promotion 30

5.3.1 Digital marketing: 30

5.3.2 Communication: 30

5.3.3 Promotion: 31

5.4 Place 31

CHAPTER 6 CURRENT MARKETING CHANNEL SYSTEM OF INNISFREE 33 6.1 Distribution structure 33

6.2 Marketing channel flows 34

CHAPTER 7 FINDINGS ABOUT CHANNEL SYSTEM OF INNISFREE 37

7.1 Strengths 37

7.2 Weaknesses/ Problems 37

CHAPTER 8 OPTIMAL MARKETING CHANNEL SYSTEM DESIGN SUGGESTIONS 39

8.1 Solutions to optimize the current system 39

8.2 New channel structure 40

8.2.1 Traditional distribution channel 40

8.2.2 Electronic distribution channel: 41

8.2.3 Optimal distribution channel 42

8.3 Limitations & caveats 44 CONCLUSION 45 REFERENCES 47

TABLE OF IMAGES

Image 1-1: Innisfree logo 2

Image 1-2: Innisfree Forest For Men Cleansing Foam 4

Image 1-3: Innisfree Forest For Men Shaving & Cleansing Foam 5

Image 1-4: Innisfree Forest For Men Oil Control Cleansing Foam 6

Image 1-5: Innisfree Forest For Men Fresh Cleansing Foam 7

Image 2-1: Online brand association 9

Image 2-2: Google Trend 10

Image 2-3: Google Trend 11

TABLE OF TABLES

Table 3-1: Innisfree target customers 15Table 4-1: Survey questions 20Table 8-1: Advantages and disadvantages of new distribution channel 42

TABLE OF FIGURES

Figure 2-1 Popular skin care items 8

Figure 2-2: Brand in use 8

Figure 2-3 Favorite brands - skincare 9

Figure 2-4: Survey conducted by Rakuten Insight 11

Figure 3-1: Brand key model 14

Figure 4-1: How do you know Innisfree 21

Figure 4-2: Why would you choose Innisfree? 21

Figure 4-3: How much money can you spend a month on skincare products? 22

Figure 4-4: Are you satisfied with the cosmetics you are using? 22

Figure 4-5: Do you think the price is reasonable? 23

Figure 4-6: Where do you usually buy cosmetics? 23

Figure 4-7: Did you have any problems while buying? 24

Figure 4-8: In addition to Innisfree, which brands will you buy? 24

Figure 4-9: Please describe Innisfree with one word 25

Figure 4-10: Will you introduce Innisfree to your friends? 25

Figure 4-11: Skincare frequency 26

Figure 4-12: Reasons not to skin care 27

Figure 4-13: Information source 28

Figure 4-14: Popular purchase locations 28

Figure 6-1: Distribution structure 33

Figure 6-2: Three levels of distribution channel 33

Figure 6-3: Innisfree marketing channels flow 35

Figure 8-1: Proposed distribution system 39

Figure 8-2: Popularity of cosmetics selling point 40

Figure 8-3: Traditional distribution channel 41

Figure 8-4: Higher usage of online shopping 42

CHAPTER 1 INTRODUCTION 1.1 AmorePacific Vietnam Company Limited

Korea is one of the leading countries in the world in the beauty industry When it comes to Korean cosmetics, it is impossible not to mention AmorePacific, which owns nearly 30 sub-brands in cosmetics, beauty, health care such as

Sulwhasoo, Hera, Laneige, IOPE, Innisfree, Etude, Mamamode, Happy Bath According to early 2018 estimates, with a domestic market share of up to 35.1% and annual revenue of about $6 billion, AmorePacific is the oldest cosmetics

business and the largest in Korea The media gave AmorePacific the nickname

"cosmetic giant"

To have growth today, AmorePacific has always been a pioneer in the

activities of the beauty industry To serve the quality reform year by year, the

company soon opened its laboratory in August 1954 This is also the first cosmetic laboratory in Korea

AmorePacific has created its history for the beauty industry in Korea During the years of establishment and development, the "cosmetic giant" is always

committed to bringing new beauty values to customers worldwide This is also a guideline that helps the corporation constantly strive to pioneer product

improvement, bringing diverse beauty values to consumers

Founded in 1945, AmorePacific increasingly asserts its position as Korean beauty care "giant" In early 2017, based on 2016 financial revenue, AmorePacific jumped from 12th place to 7th place in the Top 100 of Women's Wear Daily's

Beauty Since 2007, AmorePacific has risen 13 locations in 10 years, with product sales quadrupling and operating profit fivefold This growth results from three critical differentiating strategies: brand differentiation, commitment to innovation, and market diversity

1.2 Innisfree

Image 1-1: Innisfree logo

Innisfree is a South Korean cosmetics brand owned and founded by the largest skincare and Cosmetics Company named AmorePacific in 2000 Innisfree is popular for its affordability and brand concept, which emphasizes healthy,

environmentally friendly, reasonably priced beauty products with ingredients

responsibly sourced from Jeju Island, South Korea

With the tagline “Natural Benefits from JEJU Island”, Innisfree wants to express the rich and beautiful nature of Jeju Island while pursuing healthy beauty

It is established in 2000, Innisfree has proven to succeed with 1500 stores spread across 15 countries Not only is it famous for its outstanding quality product lines, Innisfree also scores well with environmental protection when it has quietly maintained its sustainable green color for the past 20 years

Innisfree always cares deeply about each skin and is committed to conscious beauty values Innisfree is always interested in the typical home of the Earth and represents the beauty of the environment and the natural ecosystem They are taking

action every day, not only working for customer skin, but they are also working to bring sustainable beauty values to the environment.

Growing from nature, Innisfree also repays Mother Nature with the promise of:Keeping the environment green: contributing to reducing carbon emissions into the environment

Natural ingredients: 70% natural extracts in skincare products

Charity: giving at least 1% of annual benefits to neighboring countries

Innisfree's commitment to customers:

Committed to natural ingredients of all products, always going in the

direction of developing skin health and beauty with natural ingredients

Committed to ethics and brand reputation The products have the best quality and the right price

Always invest extensively in research and development in life in beauty Realize an environmentally friendly green life to protect nature

Provide experience through five senses with the diversity of green nature

Innisfree was officially present in Vietnam in October 2016 with the first store

in District 3, HCMC From the first store, after nearly 5 years of accompanying theVietnamese beauty community, Innisfree now has 21 stores in six major cities: HoChi Minh City, Hanoi, Da Nang, Hai Phong, Nha Trang, Binh Duong The brandreceives support from a large number of young people and consumers who lovecosmetics nationwide

In addition to connecting with users by opening many stores or launchingimpressive product lines, Innisfree also attracts much attention from beauty followersacross Vietnam with global events performance Not only that, Innisfree always wishes

to contribute more to social organizations, spread messages of love, and warm the hearts

of all underprivileged children in each country that Innisfree presents During the threeyears in Vietnam, Innisfree has accompanied the Heartbeat Vietnam

Foundation (Heartbeat Vietnam), contributing 10% of the Holiday Limited EditionCollection revenue and 100% of the income of the handmade set DIY, offering 24free heart surgeries for children.

1.3 Innisfree Forest For Men Cleansing Foam

Image 1-2: Innisfree Forest For Men Cleansing Foam

Innisfree Forest For Men Cleansing Foam is a line of facial cleansersmanufactured by Innisfree specifically for men with three types of products with threedifferent functions These product functions are all specific to common male facial skinproblems, so they are quite popular, including Innisfree Forest For Men Shaving

& Cleansing Foam, Innisfree Forest For Men Oil Control Cleansing Foam, and Innisfree Forest For Men Fresh Cleansing Foam

1.3.1 Innisfree Forest For Men Shaving & Cleansing Foam

Image 1-3: Innisfree Forest For Men Shaving & Cleansing Foam

Innisfree Forest For Men Shaving & Cleansing Foam is a product specificallyfor men, with a "2 in 1" function: both daily cleansing and can be used as anextremely convenient shaving foam

The product contains extracts of pine trees, cedar trees grown on Jeju Island,containing Phytoncide compounds to help soothe skin and reduce any stress At thesame time, the product also helps strengthen the skin's resistance to avoid the harmfuleffects of external pollution

1.3.2 Innisfree Forest For Men Oil Control Cleansing Foam

Image 1-4: Innisfree Forest For Men Oil Control Cleansing Foam

Innisfree Forest For Men Oil Control Cleansing Foam exclusively for men,oily skin extracted from pine trees, cedar trees are grown on Jeju Island of Korea hasthe effect of cleaning dirt and impurities on the skin to bring smooth and soft skin,and natural white

With a creamy texture, easy to foam, while helping to control excess oil andsebum on the skin, making men's skin firmer, stronger and smoother, Phytoncidenutrients, from pine trees, trees Jeju Island's cedar and Tinospora help to relax theskin and relieve stress The ingredients are completely natural, benign, do not causeskin irritation, and do not contain chemical ingredients such as mineral oil, parabens,imidazolidinyl urea, raw materials of animal origin

1.3.3 Innisfree Forest For Men Fresh Cleansing Foam

Image 1-5: Innisfree Forest For Men Fresh Cleansing Foam

Innisfree Forest For Men Fresh Cleansing Foam with moisturizing JejuPhytoncide complex helps to protect men's skin optimally Phytoncide nutrientsfound in pine, cedar, and Tinospora trees typical of Jeju Island help men's skinsmooth, clean, and prevent acne

With small particles of scrub, it helps to exfoliate dead skin cells to revealsmoother, younger-looking skin The product helps to deeply wash away dirt, sebumaccumulated inside the pores to help men's skin clear, reduce the possibility ofcausing acne, the skin is smooth and bright

CHAPTER 2 MARKET OVERVIEW 2.1 The cosmetics and facial cleansers market in Vietnam

Figure 2-1 Popular skin care items

The most used brands are Nivea, Pond's, The Face Shop and Innisfree Inparticular, users with high income often prefer to use more high-end brands such asThe Face Shop, Innisfree, Vichy and Shiseido

Figure 2-2: Brand in use

As for skincare products, Innisfree is the most loved by high earners.

Figure 2-3 Favorite brands - skincare

Image 2-1: Online brand association

Innisfree is the brand that is rated as having the strongest online image Then came Pond's and The Face Shop

Similarly, Shopee, Tiki and Lazada are the first three e-commerce names that pop up when users remember an online cosmetic shopping platform

2.2 Men's facial cleanser market in Vietnam

Men's grooming products are very diverse and plentiful in the world today Inrecent years, Vietnamese men have approached the beauty trend; the old conception

of beauty is also fighting changing

The demand for male beauty in Vietnam in recent years indicates men'sawareness of beauty products The potential for grooming products for men inVietnam is huge

The spread of J-POP and K-POP boys makes many men want to be like them,these images become a phenomenon and grooming products are indispensableproducts for men As a result, the need to use grooming products has been constantlygrowing in Vietnam More and more customers need to buy those products,becoming a new niche for businesses

The beauty trend in general in Vietnam has recently been on the rise,especially among men They did not simply choose everyday bathing products butalso wanted more care from perfumes, deodorants, to lotions

Image 2-2: Google Trend

According to Google Trend (14/11/2021), the keyword “Male cleanser” (Sữa

rửa mặt cho nam) was most searched in Gia Lai, Da Nang, Dong Nai, Ho Chi Minhand Binh Duong

Image 2-3: Google Trend

The related queries for that keyword are “Acne treatment cleanser for male”, “Cleanser for Oily skin Male”

In addition, for those who searched for that keyword, they also care about topics like Cleanser, Face, Man, etc

Figure 2-4: Survey conducted by Rakuten Insight

According to a survey conducted by Rakuten Insight in July 2021, 38 percent

of male Vietnamese respondents stated that they used Korean skincare products,

followed by 22 percent of the respondents who claimed to use Japanese skincareproducts Most of the respondents felt that K-beauty products were more effectiveand produced better results.

2.3 Male cleanser competitor analysis

Currently, the male cleanser market in Vietnam is having the presence of hugeplayers in the cosmetics industry such as Nivea Men, OXY, Men’s Biore and somany other competitors

2.3.1 Lower price range competitors of Innisfree’s male facial cleanser

Competitors of male facial cleansers at a lower price range than Innisfreeinclude OXY, Biore, Nivea men The common points between these competitors arethe design and their slogan/tagline These products have the same way of packagingdesign - strong, manly, with a catchy phrase of deep clean, remove oil, anti-acne, ormultiple features Some men still believe that skincare is only for women, so they areafraid to buy products with colorful designs Such designs hit the psyche of men; donot like the color, like to clean excess oil, many uses

In terms of price, the above competitors have low prices (45,000-70,000 VND) These products can be easily found in stores and supermarkets

These cleansers focus on men who are not so knowledgeable about facial care.They do not accept investing too much money in skincare products

2.3.2 Same price range competitors of Innisfree’s male facial cleanser

Competitors of male facial cleansers at the same price range as Innisfree include

La Roche Posay, SVR, and Cerave These are competitors in the same price range Thesefacial cleanser brands have target customers who have a certain amount of knowledgeabout facial care At this price range, there are not only competitors specializing inmaking face cleansers for men but also regular facial cleanser products of other brands.Because with such a knowledge of skincare, they already know that, not only men canuse face washes for men, but also it is important that the ingredients

of the cleanser are suitable for their facial skin They understand that they can use other common female cleansers as well.

CHAPTER 3 BRAND KEY

Figure 3-1: Brand key model

3.1 Root strength:

The first “naturalist brand” in Korea, Innisfree's fundamental strength lies in

the fact that “natural beauty products”, “green cosmetics”, originated from Jeju Island

- known as the "pearl island" of Korea with fresh air, gentle sunshine, clean andunpolluted water These highlights are the root strength of Innisfree The purpose of sharingbenefits from pure nature and towards true healthy beauty

The original selection path brand in the five set of criteria did not offer: "Norecommended oils - no artificial colors - no animal ingredients - no quality parabens

- no ethanol"

3.2 Competitive environment:

Innisfree competes with famous brands that also have products for men but at higher prices than Innisfree such as Laneige, The Face Shop, and The Body Shop

The Face Shop: has more than 2300 stores in 29 countries

The Body Shop: variety of products with more than 1200 in 2500 franchised stores in 61 countries

Laneige: Famous brand with positioning for high-end customers

In terms of market penetration in Vietnam, where competitors position theirtarget customers as middle- and high-income people, Innisfree competes with thesebrands and positions themselves as mid-range products

3.3 Target customers

Table 3-1: Innisfree target customers

Density: urban and big cities

Income: average - good income from 5 million upwardOccupation: high school students, college students,commuters, office workers

Race: AsianGeneration: Gen X, Millennials (Gen Y)Nationality: Vietnamese

Social class: educated and middle class

Psychographic Personality: Diligent, multi-tasking, busy,

professional, well-groomedBehavioral segmentation: often exposed totechnology, doing jobs with a high degree ofinternet use, they care about appearanceNeed and benefits: needs facial care and appearance care These customers are looking for

a product with good quality and a reliable brand Their facial cleanser needs are usually skin-cleansing, acne-fighting and skin-lightening products

Decision roles: This is a product for personal use,

so they often research information on social networking sites, the internet, read product reviews, watch videos about skin care

Loyalty status: They are men, so when making a purchase decision, think carefully and decide quickly Their loyalty to their products is also relatively high and they usually do not change brands if there is no major problem with the product they are using

Attitude to be receptive to new knowledge, no aversion to men but knowing how to take care of their bodies and lifestyle

Needs: Clean skin; take care of their bodies and appearances

Researching information on social networking sites, the internet, reading product reviews, watching skincare videos

Buy mainly through e-commerce platforms, the brand's genuine website, or directly to the brand's genuine store

Today the world is developing faster and more modernly Everyone needs tolook professional when going out to study and work, with such a vibrant and bustlingenvironment, it is more and more important for men to be good-looking as well.Therefore, it is not too strange for men to take care of their skin However, this newtrend is still confusing and difficult for some men who have not caught up with thetrend, finding information about products for men is also somewhat more difficult formen They are not used to learning about cosmetics and encounter some difficulties

in this process From the past to now, they have not had this habit and because men'spersonalities do not care too much about their appearance, they often look for

cleansers that can integrate many uses They also often listen to advice from

consultants and when they use a good quality cleanser for their needs, they are oftenloyal and do not change to another brand

3.5 Benefit

Features, values as well as special points that Innisfree brings to customerscan be mentioned, as Innisfree is a reputable brand from reliable ingredients, 100%natural, no toxic substances:

Organic green tea: meticulously grown and cared for from organic soil inSeongwang Kingdom for 3 years, creating a line of green tea rich in nutrients for theskin

Abundant natural resources such as volcanic ash, camellia, mandarin, olive Modern machinery, 99% clean ingredients & on time harvest

Effective and quality products for men's cleansing and skin care needs at anaverage and economical price

Quality is strictly controlled: Every laboratory where production must meetthe most stringent requirements, every production technology is processed on themost advanced equipment; strict control procedures strictly enforced at all stages toproduce a high-quality cosmetic product that combines methods that do not pollutethe environment

Innisfree has also implemented many meaningful social activities Some ofInnisfree's outstanding social activities include:

Empty bottle recycling campaign: Customers can earn 300 bonus points foreach empty bottle by returning the container of Innisfree products to the store Thenumber of empty bottles collected in 2020 is about 30,000 bottles

Global forest protection activities: The Green Forest campaign was initiatedfrom the trees planted on Jeju Island to preserve Gotjawal forest, and then this greenpatch was spread to many countries such as China, Hong Kong or Thailand as a way

of gratitude Innisfree wants life to continue

Play Green 2018 event with the statement "Less Plastic, It's Fantastic":Through many interesting activities such as cycling with VR glasses, drawingpictures on glasses, ball houses or making handmade items by hand, they conveymany meaningful messages about environmental protection issues: join hands toreduce Use products made from plastic

3.6 Values, beliefs and personality

With the motto "Natural Benefits from JEJU Island", the brand was born to sharethe benefits from the rich nature of Jeju Island to the skin Referring to Innisfree,customers always remember good-priced products from the island of good quality andpurity, high popularity, a clean skin care product from nature without chemicals

If we consider Innisfree as a person, we can mention such as high quality,popular, beautiful in appearance and inside, delicate, and clean and purity

3.7 Reasons to believe

Innisfree products always give customers the best experience from the outsideimage, to the inner packaging, the feeling when using, and the scent of the product.Always make customers feel satisfied in every step of buying to using Innisfreecooperates with famous Korean singers and actors to improve brand awareness andattract customers, such as Song Hye-kyo, Yoona Products for men only cooperatewith Lee Min Ho

3.8 Discriminator

Extracted from nature with almost 100% absolute content (depending on eachbrand line, natural ingredients can range from over 98% - 99.8%) Organic productswith extremely strict standards for ecology and quality of herbs included in theingredients

Moreover, choosing cosmetics of natural origin will help protect the skin andunharmed by cosmetic ingredients such as itching, redness, irritation, skin allergies but Innisfree natural cosmetics also honor the inherent natural beauty

3.9 Essence

Innisfree is emphasized by product variety, quality, innovation, future trends,customer experience, and eye-catching appearance Each product is carefullychecked, carefully packed, qualified and creates a certain trust for customers