Foreign market analysis and the marketing strategies to launch cocoon pomelo hair care products in the thailand market

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS & INTERNATIONAL BUSINESS DEPARTMENT OF MARKETING & COMMUNICATION ki 3É SE MID — TERM EXAMINATION REPORT FOREIGN MARKET ANALYSIS AND THE M

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS & INTERNATIONAL BUSINESS DEPARTMENT OF MARKETING & COMMUNICATION

ki 3É SE

MID — TERM EXAMINATION REPORT

FOREIGN MARKET ANALYSIS AND THE MARKETING STRATEGIES TO LAUNCH COCOON POMELO HAIR CARE PRODUCTS

IN THE THAILAND MARKET

Group number 11

1 Nguyễn Minh Hién (leader) 2112250033

Class: MKTE401(HK 1-2324)1.2

Instructor: Dr Trần Thu Trang

Hà Nội - 9/2023

TABLE OF CONTENTS IV.1:)05100069)6105 1111155 2

PART2 SCREENING FOREIGN MARKETS S222 nhe 6

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` ) .n e 19 PART4 MARKET ENTRY STRATEGY Ă 2S nhe 21

2 e 21 4.2 _ Market entry mode selecfIOn óc 2201211211101 1111111111151111 11112112112 111111 rkg 26 PART 5 MARKETING MIX STRATEGIES cà nhe 31 31 daaầaàadiiẳiiiẦẢ 33

ằ 34 CONCLUSION ooo 36 REFERENCES LIST oo 37

INTRODUCTION With the advancement of society, people are increasingly focused on health and favoring plant-based beauty products Vegan cosmetics have also become a popular trend among individuals adopting a green lifestyle

Cocoon, as a leading brand in the Vietnamese market, aims to expand its production efficiency, scale, and business activities while reducing risks associated with operating in a single market

One potential market for expansion is Thailand, known for its thriving cosmetics and beauty industry, particularly for products derived from nature This market presents both opportunities and challenges for Cocoon

This report will develop an international plan for Cocoon's pomelo hair care products in the Thailand market, including the exporting potentiality, market choosing and suggested marketing mix

1.1 About Cocoon

Cocoon, founded in 2013, is a Vietnamese pioneering vegan and cruelty-free cosmetics brand using natural ingredients sourced from Vietnam's diverse ecosystem It is also the first Vietnamese brand to receive certifications for being "cruelty-free" by PETA and vegan by The Vegan Society Cocoon utilizes natural ingredients from Vietnam, such

as Dak Lak coffee, Ben Tre coconut oil, and Cao Bang roses, to create safe and effective

skincare and haircare products

Cocoon offers a wide range of products for the skin, hair, and body, including a rose mask, Dak Lak coffee body scrub, Grapefruit perfume, and Ben Tre coconut lip balm These products aim to provide nourishment and care while utilizing the rich natural

resources of Vietnam

1.2 About Cocoon haircare products

Cocoon specializes in creating vegan and cruelty-free haircare products with natural ingredients from Vietnam, like pomelo peel oil and brown algae extract These products

address issues like hair loss, dryness, and damage, while nourishing the scalp and roots They

leave your hair with a refreshing citrus scent and a healthy shine Cocoon offers a diverse range of hair care products, including pomelo shampoo, pomelo conditioner, pomelo hair tonic and more They have achieved significant recognition in the industry

1.3 Export potentiality of Cocoon’s Pomelo hair care products

Cocoon's Pomelo hair care line product is known for its cruelty-free, environmentally friendly and effectiveness This not only attracts customers interested in ethical and natural hair care but also showcases a competitive advantage and distinctive value proposition With

an affordable price and ease of use, they can reach a diverse market, boosting brand

awareness

Positive customer feedback, like the 4.5-star rating on Amazon, demonstrates high

satisfaction and loyalty, enhancing the brand's reputation in the global market

Reviewed in the United States on June 16, 2023

Size: 4.73 FlOz (Pack of 1) | Vine Customer Review of Free Product (What's this?)

| have been using this off and on for the last couple weeks, and while I'm not 100% sure if it's doing much for shedding, | will say that it makes my scalp happy, and it smells SO GOOD Like orange peel, but not too strong The dripper bottle works well to get it onto your scalp and not your hair | mostly use it the day or 6) Kristina Howden VINE VOICE

Yet’ Cocoon Pomelo Hair Scalp treatment to promote growth and healing of daily damage Reviewed in the United States on June 4, 2023

Size: 4.73 Fl Oz (Pack of 1) Vine Customer Review of Free Product ( What's this? ) Smells like a pomelo or citrus fruit, with quite a pleasant aroma It is thin like water so you do have to use the tip down on the scalp but I think you could put this in a spray bottle to do similar and less waste of product Which you could spray very short hair and rub it in easily if you did this As for any restoration and growth, only time will tell Any amount of extra stimulation to the scalp with oil or tonic may be beneficial

1.4 Objectives for exporting

Cocoon's objective is to increase revenue through exports By expanding their reach beyond domestic markets, Cocoon has chance to penetrate into international opportunities and grow their customer base and drive revenue growth through export sales

PART 2 SCREENING FOREIGN MARKETS

2.1 Market overview

Global Vegan Cosmetics Market size was valued at $16.45 Billion in 2021 and is projected to reach $25.85 Billion by 2028, growing ata CAGR of 6.89% from 2021 to 2028 according to a new report by Intellectual Market Insights Research

Figure 1 Global Vegan Cosmetics Market Revenue Share (%), By Region, 2021

see

North America Latin America Europe Asia Pacific Middle East &

Africa

Source: Coherent Market Insights

Among region, Europe held a dominant position in the global vegan cosmetics market in 2021, accounting for 37.6% market revenue share, followed by North America and Asia Pacific

Among regions, Europe held a dominant position in the global vegan cosmetics market in 2021, accounting for 37.6% market revenue share The following position is North America with CAGR of 6.5% from 2022 to 2030 Asia-Pacific is expected to be the fastest- growing regional segment witnessing a CAGR of 7.4% from 2022 to 2030 Rising awareness regarding the mistreatment of animals has resulted in the rising demand for vegan cosmetics

in countries such as India, Australia, and others

Therefore, the three mentioned regions are likely to present enormous growth opportunities during the forecast period

2.2 Selecting potential markets

2.2.1 Criteria for market selection

For the purpose of expanding export markets, the selected criterias will put an emphasis

on economic and social elements to increase export markets, since they have an impact on the long-term, stable expansion of Cocoon into international markets

e Population: at least 5 million; The population of a country has an impact on how much merchandise is consumed there

e GDP Per Capita: assess the cost of living and living standards in that nation

e Economic and Political Stability: Economic and political stability will create conditions for foreign businesses to participate and grow in that country's market

e Psychic Distance: less than 3500 kilometers; the short geographical distance reduces transportation costs and risks of lost or damaged goods

e Market Value: The value of the vegan cosmetics industry increases along with consumer interest and purchasing power

2.2.2 Groups of potential markets

Beside having sizable total populations (Europe is close to 512 million; North America is close to 542 million) and average GDP per capita levels of about $36,000, there

are other factors to consider

The most prominent issue is political and economic stability All nations, including Vietnam, have been impacted by the political and economic tensions brought on by Britain's impending exit from the European Union in 2020 In addition, because the US is a multi-party country and the polarization between parties is growing, making the political situation always tense and prone to conflict Additionally, significant issues like the public debt crisis, immigration, terrorism, etc constantly put the economic and political situation

in European and North American nations in danger

In terms of distance, Vietnam is 11,751 km from North America and 8,926 km

from Europe by bird flight, 2-5 times higher than other countries in the Asia Pacific region

The following nations in the Asia-Pacific region qualify as they have a population

of 5 million or more and are located less than 3500 kilometers from Vietnam's flight path:

Cambodia, China, Hong Kong, Taiwan, Laos, Korea, Malaysia, Myanmar, Philippines,

Singapore, Thailand, and Japan

However, only 4 countries have a large cosmetic industry value: Thailand ($9.6 billion), South Korea ($15.71 billion), Japan ($16.5 billion), China ($21 billion) The growth of vegan cosmetics may be restricted in China since as per rules cosmetics being sold in the country must be first tested on animals

2.3 Market Evaluation and Selection

2.3.1 Market Attractiveness Assessment

a Review of market indicators table

Criteria Thailand Korea Japan

b Market Attractiveness Assessment Table

Market evaluation scales:

2.3.2 Competitive Strength Assessment table

Market evaluation scales:

1 Products fit to 0.2 4 4 4 market demand

2 Prices and 0.2 5 4 3 conditions

5 Communication 0.1 4 3 3

6 Obtainable 0.15 3 4 4 market share

7 Quality of 0.05 3 3 3 distributors and

service

8 Financial resources 0.1 4 2 2 Total score 1 4 3.55 3.35

PART 3 MARKET ANALYSIS

Polarization: caused by a division between two worldviews: the royal nationalist, which regards the Thai king as the country’s legitimate ruler, and the democratic, which contends that sovereignty resides with the Thai people This conflict has split Thai society and fueled tensions, even during crises like the coronavirus pandemic

Alliances: Thailand is a member of different world’s leading alliances like the Association of Southeast Asian Nations (ASEAN), United Nations (UN), and World Trade Organization (WTO) Bangkok is also the capital of ASEAN

b Economical factors

The GDP value of Thailand represents 0.22 percent of the world economy According

to a report of the World Bank, Thailand has recently shifted into upper-income countries

About import and export, The World Bank labeled the country as the 8th largest and most booming economy in Asia Its economic growth is largely dependent on exports accounting for 60% of its GDP Important commerce growth contributors are manufacturing

and agricultural sectors, tourism, automotive, and the food industry

had dropped off However, while spending priorities have changed somewhat, self-care portion of the industry is largely unaffected

c Socio-cultural factors

Demography: the total population of Thailand is 72 million people The country does not have any official religion, but approximately 94.50% follow Buddhism The average lifespan

is 71 to 79 years old Thai is the country’s official language

Attitude: The Thai beauty consumer is known for their openness and willingness to try new innovations in the ever-evolving industry Their curiosity and enthusiasm have created

a culture of experimentation, resulting in a dynamic market

d Technological factors

Thailand’s e-commerce market is one of the fastest growing in Southeast Asia where gross online merchandise value grew by 68% in 2021 and is expected to expand by 14% between 2021 and 2025

Thai people are highly active on social media platforms such as Twitter, Instagram, Line, YouTube, and Facebook Bangkok is the hub of many tech developments such as IBM,

Apple, Shopee, Amazon, Google, Microsoft, TikTok, Grab, Agoda, Traveloka, Tencent

e Legal factors

Labelling Requirements: All cosmetic products must have Thai legal labeling within

30 days after importation date before launching on the market, and list all required information: Product name and trade name, type, full ingredient list,

Product Safe Issues: There are five listings of cosmetic ingredients designated,

namely prohibited substances, restricted substances, preservatives, colorants and sunscreens

f Environmental factors

Thailand is a large country with over 10,000 species of plants It’s also home to monsoon

forests, mangrove forests, and rain-forests In these areas, there’s a high amount of

biodiversity, but it’s threatened by environmental issues The government is putting more

effort into protecting the land and wildlife, but the natural resources are still in plenty of danger

3.1.2 Micro environment (Porter 5 Forces)

a Industry Competitors

3.2 Internal environment

The firm’s internal environment will be analyzed based on Value chain analysis method

Before distribution, all products needed to be studied for 12 to 24 months, passed the

tests of microbiology, pH, stability over time, according to temperature, irritation

(according to the standards of the Japanese DRC center with branch in Thailand) and regulations of the Ministry of Health of Vietnam

The packaging is made of fnendly paper or recyclable plastic The company also offers refill bags that reduce plastic by 65% compared to bottle shapes

On the product packaging and website, there is also full information such as product use, origin, frequently asked questions, customer reviews

To test the products’ quality, Cocoon commits to use alternative methods to animal testing Cocoon is the first Vietnamese cosmetic company to be certified 100% vegan,

“Cruelty-free” by PETA, The Vegan Society They are also approved by the Pasteur Institute in Ho Chi Minh City

c) Outbound logistics:

Products are distributed to customers by shipping partners Giaohangtietkiem and Netpost to optimize costs, compared to building its own logistics system Customers can easily check order information and status through Fanpage or Hotline number

d) Marketing and sales:

About Marketing activities, Cocoon leverages many social media platforms such as Facebook and Instagram, with interesting content and attracting images Cocoon also use marketing through famous influencers

There are Corporate Social Responsible (CSR) campaigns such as "Exchange old bottles for new products", "Join hands to protect bears", that bring good value to the society

About sales activities, their online distribution channel provide customers with easy, time-saving purchasing process, with specific instructions and diversified payment

methods

In addition to the online platforms, products are also sold by cosmetic retail stores

such as Waston, Guardian, Hasaki.vn, SammiShop

Regarding prices, COCOON products are marketed at quite affordable prices, each single product/set of products range from 35,000 VND — 650,000 VND

e) Customer service:

Diverse communication channels include Zalo, Facebook, Email, Hotline and sales

channels (Shoppee, Tiki .) always ready to help customers with any questions or order-

Cocoon also invested in modern technology lines, ensuring GMP standards of the

Ministry of Health of Vietnam

The company recruits employees who require work experience and expertise for each suitable job position, with a specialized knowledge in cosmetics

3.3 SWOT conclusion