brand marketing campaign an evaluation of lipice sheer color brand in 2015

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MMCOM9 NGUYEN BA NHAT TAN TRUONG TUYET HONG BRAND MARKETING CAMPAIGN: AN EVALUATION OF LIPICE SHEER COLOR BRAND IN 2015 MASTE

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MMCOM9

NGUYEN BA NHAT TAN TRUONG TUYET HONG

BRAND MARKETING CAMPAIGN:

AN EVALUATION OF LIPICE SHEER COLOR

BRAND IN 2015

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Ho Chi Minh City (2016)

Some information from the product is non-disclose due to the strict requirement from the manufacturer, however we commit that with the information provided will be sufficient to

the thesis for this project

ACKNOWLEDGEMENTS

Firstly, We would like to send my great thanks to all professors of Solvay Brussels School and the Ho Chi Minh City Open University for the useful marketing knowledge

in the Master In Marketing & Communication Management course year 2014 – 2016

Trung and Mr Ho Cong Hoai Phuong, who have show us a lot experience in guidance,

advices and comments on how to build up an effective brand analysis framework

We also want to say thanks to ROHTO-MENTHOLATUM VIET NAM team members who have supported us in providing market information, segment and even share the

time in working during our studying

We also want to show our gratitude to our family who have always trust, support and

also be a source of stimulation during our course

TUTORS COMMENT

TUTORS COMMENT

ABBRIVEATIONS

THE TABLE OF FIGURES

FIGURE 1.0: ROHTO LIPS PRODUCTS RANGE

FIGURE 1.1: THE 5 LAYERS OF PRODUCT

FIGURE 1.2: IMC

FIGURE 1.3: GDP GROWTH OF VIETNAM

FIGURE 1.4: MARKET SHARE OF LIPS MAKE-UP PRODUCT 2014-2015

FIGURE 1.5: PERSONAL CARE MASS MARKET IN ASIA

FIGURE 1.6: VIETNAM CARE MASS MARKET SITUATION

FIGURE 1.7: BUYER BASE

FIGURE 1.8: MARKET SHARE OF LIPS MAKE-UP PRODUCT 2014-2015

FIGURE 1.9: THE GROWTH DRIVER OF LIP MAKE-UP PRODUCT

FIGURE 2.0: MEDIA SPENDING ON TV & PRINT FOR MAKE-UP LIP SEGMENT 2014

-ROHTO

FIGURE 2.1: MEDIA SPENDING ON TV & PRINT FOR MAKE-UP LIP SEGMENT 2014

-ROHTO

FIGURE 2.2: DISTRIBUTION CHANNEL

FIGURE 2.3: THE PORTER’S 5 FORCES MODEL

FIGURE 2.4: BCG MATRIX MODEL

FIGURE 2.5: THE 7PS MARKETING MIX MODEL

FIGURE 2.6: ROHTO LIS SPENDING 2014 - 2015

FIGURE 2.7: ROHTO LIPICE SHEER COLOR SALES 2014 - 2015

FIGURE 2.8: SHARE OF SALES ROHTO LIPS PRODUCTS 2014 - 2015

THE TABLE OF CONTENTS

EXECUTIVE SUMMARY 8

CHAPTER I: INTRODUCTION 9

1.1 Project rationale 9

1.2 The company 10

1.3 The marketing mix review 12

1.3.1 Product and Price 12

1.3.2 Place 13

1.3.2 Promotion 14

CHAPTER II: MARKET ANALYSIS 15

2.1 Market overview 15

2.1.1 PESTEL analysis 15

2.1.2 Competitor analysis 17

2.1.3 Market research 19

2.1.4 The SWOT analysis 25

2.1.5 The Porter's 5 forces analysis 26

2.1.6 The BCG Matrix 27

2.2 The marketing plan in 2015 28

2.3 The marketing plan analysis 40

2.3.1 The 7Ps Marketing Mix 40

CHAPTER III: RECOMMENDATION 47

3.1 Recommendation 47

3.2 Action plan 48

3.3 Road map 49

REFERRENCES 50

EXECUTIVE SUMMARY

Niche market is a small segment but high profit It pros is the brand trust and loyalty you will build up over time Those years of trust then turn into legacy, which sells your events and ideas to newer party goers entering your niche

The color lip balm segment with the brand LipIce Sheer Color is an obvious example for the niche market The brand penetrate in the segment for many years that create a legacy

in loyalty and strong relationship with end-user and positioning as a market leader with a high investment from marketing campaign

However, in the need market, we have to face disadvantages such as less opportunities in market base expand, easy to be attacked by the rivals, effect of the technology, therefore

we choose this case for our project to prove that the niche market is still potential and can survive in a long time with an appropriate segmentation and positioning strategy

CHAPTER I: INTRODUCTION

1.1 Project rationale

A strong brand is able to help a company differentiate itself from its competitors, stand out

build customer loyalty and boost the company’s financial performance

Brand management strategy is essential when a firm wants to achieve sustained success, especially when competition is increasingly intense and product differentiation becomes unclear So that, building a clear strategy is an important role in the marketing plan for a company when develop its business in market

The Lip Balm Color - Non Color segment was invented by Rohto-Mentholatum Viet Nam since 1996 and followed by Daily Lip Make up segment in 2003 These are also the first

“made-in Viet Nam” cosmetic products that customize for Vietnam market and export to Japan and ASEAN countries While other import products communicated as non-season product, Rohto Lip Care Products is segmented as the product of winter and festive season These are the first cosmetic segments make the explosion of mass media channels with the locals advertising talents come along with big end-user promotion campaign that pushing the growth of Daily Lip Care and Lip Make up share speedily The distribution channels also spread out from the General Trade channel to the Modern Trade channel to increasing product coverage Both segments has expand gradually and became popular and high potential to having line-extension on next market stage within the key target consumer is Female 15-35 ABCD ~ 10 mils people by Y 2015

In 2015, Make-up segment take 5.3% in Personal Care category The Make-up for Lip also take 38% in total Make-up segment Rohto Lip Care still being the king in the micro-niche

Daily Lip Care and Lip Make Up “emirates” thanks for its integrated activities and product

innovation constantly Lip Ice Sheer Color - the market leader in Lip Balm Color segment with 11 years in Vietnam market has an outstanding sale performance in Y 2015 thanks to strong mass end-user promotion and product renovation “Lip Ice Sheer Color Q” after 2 previous struggle years However, Lip Ice Sheer Color brand has facing serious obstacle: the scale down of market size and even market share [9] Besides, new rival came from portable and black market also challenge this made-in Viet Nam brand for a quick and thoroughly MKT strategy to revitalize the brands as the sale turnover is still

micro-under expectation

Project objective

The project aims to:

 Evaluate the 2015 Marketing plan of Lip Ice Sheer Color brand

 Building up the framework for key activities for the brand in 3 years (2016 – 2018) to

be the No 1 preference Lips Balm Color brand for young female target audience

Project structure

This project includes three Chapters and Reference

 Chapter I: Introduction

 Chapter II: Market Analysis

 Chapter III: Recommendation

 References

1.2 The company

Rohto Japan is a pharmaceutical company, established in 1899 in Osaka, Japan In 1970, Rohto Acquired the Mentholatum trademark right from the US Company, the Mentholatum Co., Inc This acquisition provided Rohto with a foothold in entering the skincare market in

a bid to make the Mentholatum brand into a third pillar of business and also becoming a global company.[1]

Rohto-Mentholatum Vietnam was established in 1996, with the vision is to bring the health care to Vietnamese consumer, Rohto-Mentholatum Vietnam put the first milestone in Vietnam market with 2-product range: Eye-drop (VROHTO) and Lips make-up (LIPICE) Since then till now, after 20 years operation, Rohto-Mentholatum Vietnam become the heart of Vietnam FMCG market with a wide product range that serves for the benefit of Vietnamese consumer [1]

Vision:

Rohto, A Pharmaceutical Company Pledged to Bring You Happy Surprise!

Mission:

+ Listening to customers' views, we give material shape to "that little extra detail"

+ We handle flexible production in our "Evolving Plants"

+ We make proposals to customers through meticulously organized sales promotion activities and information input [2]

About ROHTO LIP MAKE-UP AND LIP CARE brands

Established in Vietnam since year 1996, LipIce brand open a new segment: Lip care with SPF ingredient with tasty fruity flavors It’s also educate consumer for new habit: nourish the lip skin with or without make up

By time, in YEAR 2003, the daily make-up lip stick Lip on Lip brand is born, contribute to Vietnamese ladies a habit: caring while make-up

In Y 2005, the hero product in-line appear: Lip Ice Sheer Color- the natural and unique colors lip stick that bringing the ultimate caring benefit with the lovely natural colors

Last member, Miracle Apo came in year 2010 with fashion, trendy and catchy SKUs Miracle Lip Crayon became the hero product among the line

By year 2015, Rohto Lip Products family have 58 members All started from the concept

“caring and nourish for the lip, brilliant but safety colors and flavors” Rohto Lip Products are the best friend of many young ladies generations in Viet Nam through 20 years

Figure: 1.0 Rohto Lips Products range

1.3 The marketing mix review

1.3.1 Product & Price

In this thesis, we only focus on Lips Balm products with color (LipIce Sheer Color), this is

the hero product from Rohto, driven good sales revenue and gross margin

The available products for this brand are LipIce Sheer Color Regular (LIS R) and LipIce Sheer Color Q (LIS Q)

a LipIce Sheer Color Regular (LIS R):

The LIS R is basic products for starter user with natural color and light flavor The product feature is to raise the natural beauty and protect the lip under the UV

The product aim to the target of young females from 15 to 22 years old (Teenager and Students)

Price: 59,000 VND/Pcs

b LipIce Sheer Color Q (LIS Q):

The LIS Q is an line-extension product from LIS R, launched from beginning of 2015, LIS

Q inherit all the attributed of LIS R plus strong shade and flavor This offer a variety range

of product for consumer to choose

The product cover the same target segment with LIS R with price higher the regular product around 3%

a General Trade Channel: wet market, pharmaceutical store, cosmetic shop…

c Online Channel: E-commerce site,TV Homeshopping, … (in development)

1.3.3 Promotion

Promotion for LipIce brand is fully intergrated communication campaign in whole year We will go into detail in the marketing campaign review

Figure: 1.2 IMC

CHAPTER II: MARKET ANALYSIS 2.1 Market overview:

2.1.1 PESTEL Analysis

a 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 [3] This new generation of country leader will move country toward the modernization, industrialization rapidly and more effectively but less corruption

The Vietnamese government has shown their commitment to economic liberalization and international integration In January 2007, by the strong efforts from the government, Vietnam joined the WTO Vietnam political environment is favorable for investment project

in terms of capital security and long run business

In 2015, Vietnam had the first entry into the TPP (Trans-Pacific Strategic Economic Partnership Agreement) which is effective in 2017, this will create more chance for Vietnam in economic development

b Economic factors

According to the Vietnam General Statistic Organization announce on 17/12/2014, Vietnam population is estimated to be around 90.5 million of which 51% is women The annual population growth rate of Vietnam is about 1.06% [4] Besides, the GDP of Vietnam has increased over the past years A sustained growth rate of around 8% for over 15 years shows great progression and is one of many reasons for the increasing number of foreign investors Vietnam received over US$20 billion of foreign direct investment in 2007, a record amount with an increase of 70% on 2006 figures, and saw almost 1,500 new projects licensed in the same year Although the economy is developing at a rapid rate, entry costs for investors are still low, and cheap labor costs coupled with a young, literate workforce make business investment a very attractive and lucrative prospect

The Vietnamese government has shown their commitment to economic liberalization and international integration Structural reforms needed to modernize the economy have been implemented, helping to produce more competitive, export-driven industries Vietnam joined the WTO in January 2007 This gives a major boost to Vietnam's export led economy and spur on the country's economic liberalizing reforms including cultural exchange With above reasons, Vietnam is considered as an attractive market for many

companies especially personal care products which were in the past considered as “luxury” products

F IGURE 1.3: GDP GROWTH OF V IETNAM

(Source: Nhip Cau Dau Tu – Magazine - 2015) [5]

c Social factors

Social environment

According to Nielsen Vietnam Of all the Asian countries is getting richer and Vietnam market is part of the story [6] In Vietnam there are more than 400 brand of cosmetic available and Vietnam is still the potential market for cosmetic The sales revenue total for Cosmetic market is estimated to be around 15,000,000,000 VND (around 700 million USD)

in 2014 [7] The consumer base in Vietnam for consuming product (include of cosmetic) is shift to younger base, General Z which age is under 20 and Millennials (age from 21 – 31) are the core shopper These ground is shaping the new purchasing behavior They are easily to be affected by online sales, willing to pay for product on online channel (the decision making rate is more than 50%) and the time they spend for internet is around 15.5 hours per week

Cultural environment

With the GDP growth as shown in the figure 1.3, the living standard of Vietnamese is getting better and better Therefore, the purchasing habits of Vietnamese consumers are also changing: they spend on personal care products and they are more and more demanding for sophisticated products

d Technology factors

The evolution of internet in Vietnam in the recent years and the increasing numbers of people using mobile phone creates new medium for marketing activities The purchasing

on online is a trend

e Environment factors

The climate: Vietnam is a tropical country, the environment is hot and moisture, high UV

affect The demand for using lips make-up product is high Especially, on the central and north area of Vietnam the climate is cold in year-end so the demand of non-color lips is also good compare to other period

f Consumer environment

The Vietnamese youth nowadays see themselves as a new generation who enjoy much

policy applied since 1986 of the country and Vietnam has been being integrated into international community which brings much the influx of foreign culture to Vietnam It is also supported by the high tech development, blooming of internet and cable TV to improve living condition for everyone especially the young generation

The biggest different from the past in terms of attitude is in fact the optimistic vision of life Youth nowadays look forward to the bright future They welcome challenges to build experiences and knowledge instead of avoiding or being afraid of

The slogan is “Living for today as tomorrow will have other opportunities” rather than

“saving for rainy days”

This optimistic vision could be explained as these youngsters have never lived in a difficult days with war and hungers like the previous generation

 The Vietnamese young target is the @ generation

2.1.2 Competitor analysis

Lips make-up product is a must have in women bag in urban area, so that the competition

is very harsh The playground up-till-now is shared by foreign brands such as: Maybeline, NYX, Revlon, Nivea …

Key competitor: [8]

a Maybelline:

Maybelline is a USA company in cosmetic industry Headquarter is in New York In 1991,

Maybelline.”which is still used today The company was acquired byL'Oréalin 1996 Acquiring Maybelline gave L'Oréal access to mass markets in cosmetics

Maybelline cover the full range make up which focus the urban ladies The target audience

is the same Maybelline position in the mass market with professional image

b NYX:

NYX is a US-Based full range make-up company, established in 1999, the company focus

on mass market with reasonable price

The company offer a full range make-up product with trendy and fashionable style They focus on online channel and flagship store In Vietnam, the HQ of NYX is in Hanoi, so their operation is strong in Hanoi and medium in HCM city and others

c Revlon

Revlon was founded in 1932 in US, by Charles Revson and his brother Joseph, along with

a chemist, Charles Lachman, who contributed the "L" in the REVLON name Starting with

a single product - a nail enamel unlike any before it - the three founders pooled their meager resources and developed a unique manufacturing process

Revlon is a worldwide brand, they offer full range make-up product The company cover in mid segment which is sales channel focus in department store

d Nivea

Nivea is a brand belong to Beiersdorf corporation, Germany The company in which focus

on skin care product for both male and female Lips make-up product is secondary focus

e Tony Moly

Tony Moly is a Korean brand cover in full-range make-up product Established in Vietnam around 10 year, with the business strategy focus on mass segment and direct sales, Tony Moly gain a decent market share in Vietnam cosmetic industry

Figure: 1.4 Market share among competitors period 2014 - 2015

Source: Surf the growth opportunity in personal care

Kantar World Panel 2015 (8) 2.1.3 Market research

Market Research results and findings:

From Kantar World Panel research about Personal Care segment (Surf the growth

opportunity in personal care in 2015) [9], we find some key point as follow:

 About the mass market:

a Personal care still prove their potential in the context of FMCG growth slowing down

in Asia

a The leading brands in MU segment is Maybelline, NYX and Revlon

b In the Lip Balm Color segment: LipIce is market leader, Maybelline, Nivea, Revlon are following:

Figure 1.8

a Challenges: Among 4 key segment, the MU segment has strong price value

changes thank to average price change rather than volume change  decrease market share & frequency usage

b However, MU segment have the stable penetration as other category except the new protection  the company itself can’t expand the customer base on total

c In the other hand, in Lips Balm segment, Rohto are the leader with less competition

 possible to be a chance for promoting products in this segment

Figure 1.9

d Increase in Average price

e Rohto is dominant on share of voice on mass market

Figure: 2.0: Rohto Lip Non Color Lip Ice and Rohto Lip Make Up Lip On Lip are key players on mass market with 528,000 USD budget on 545,000 USD market spend in 2014

Figure 2.1: Rohto Lip Balm Color Lip Ice Sheer Color and Lip Make up Miracle Apo take over SOS of Non Color and Lip on Lip with double budget vs Y 2014: 1 mils USD on 1.1

mils USD market spend