Formulating branding development strategy strategy for developing a new brand sunfly trendy for fashion company minh huong p n d

Strategy for developing a new brand – Sunfly Trendy - for fashion company Minh Huong P.N.D PROJECT:FORMULATING BRANDING DEVELOPMENT STRATEGY Strategy for developing a new brand – Sunfl

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Strategy for developing a new brand – Sunfly Trendy - for fashion company Minh Huong P.N.D

PROJECT:FORMULATING BRANDING

DEVELOPMENT STRATEGY

Student: Nguyen Thi Tu Anh

Advisor: Dr Do Thi Binh

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TABLE OF INDEX

APPENDIX OF TABLE 3

TABLE OF FIGURE 3

SUMMARY 5

ACKNOWLEDGEMENT 6

PROJECT ‘S TARGET AUDIENCES: 6

CHAPTER 1: PROJECT INTRODUTION: 7

1.1 OVERVIEW ABOUT VIETNAM HOME-WEAR MARKET 7

1.2 INTRODUTION OF MINH HUONG P.N.D AND SUNFLY BRAND 10

1.3 PROBLEMS STATEMENT: 12

1.4 OBJECTIVES OF PROJECT: 13

CHAPTER 2: RESEARCH METHODOLOGY 14

2.1 DATA GATHERING METHODS 14

2.2 DATA ANALYSIS METHODS 15

2.2.1 PEST MODEL ANALYSIS: 15

2.2.2.EFE MATRIX: 16

2.2.3 STRATEGIC GROUP ANALYSIS 17

2.2.4 VALUE CHAIN ANALYSIS: 17

2.2.5 IFE MATRIX 18

2.2.6 BOSTON MATRIX 19

2.2.7 STRATEGIC ANALYSIS MATCHING STAGE 21

2.3 PROCESS OF MAKING STRATEGY 23

CHAPTER 3: PROJECT ANALYSIS RESULTS AND SUGGESTIONS 24

3.1 EXTERNAL ENVIRONMENT ANALYSIS 24

3.1.1 PEST Analysis: 24

3.1.2 EFE MATRIX 27

3.1.3 C ONCLUSIONS : 31

3.2 SUNFLY POSITIONING ANALYSIS 32

3.2.1 STRATEGIC ANALYSIS: 32

3.2.2 Conclusions: 35

3.3 INTERNAL ENVIRONMENT ANALYSIS 36

3.3.1 BOSTON MATRIX: 36

3.3.2 VALUE CHAIN ANALYSIS: 42

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3.3.3 IFE MATRIX 43

3.3.4 Conclusions: 47

3.4 CHOOSING STRATEGY AND MAKING IMPLEMENTATION PLAN 47

3.4.1 STRATEGIC MATCHING ANALYSIS: 48

3.4.2 IMPEMENTATION PLAN: 49

3.4.2.1 TARGETED CUSTOMER: 49

3.4.2.2 MARKETING MIX: 50

REFERENCE 59

ANNEX: 60

1.ONLINEQUESTIONAIREABOUTCUSTOMER‟SOPINIONOFSUNFLY PRODUCT: 60

2 QUESTIONAREABOUTINTERNALANDEXTERNAL‟SFACTORS IMPORTANCETOMINHHUONGP.N.DANDSUNFLYBRAND 60

APPENDIX OF TABLE Table 1:PEST analysis for Minh Huong P.N.D 25

Table 2: EFE Matrix of Minh Huong P.N.D 27

Table 3: Mainly home-wear fashion brands in Viẹtnam 32

Table 4: Characteristic of Vietnam domestic home-wear brands 33

Table 5: Minh Huong’s brands list 36

Table 6: 2017 Minh Huong’s performance 37

Table 7: 2014 – 2017 Minh Huong brands’ growth 39

Table 8: Minh Huong Value chain analysis 42

Table 9: Table 9: Minh Huong IFE Matrix 43

Table 10:Average Price by product catergory in 2017 51

TABLE OF FIGURE

Figure 1: Revenue of Apparels in Vietnam fashion market up to 2022 7 Figure 2: Revenue growth of Vietnam fashion market up to 2022 _ 8 Figure 3: Vietnamese customer’s opinion about domestic fashion brands 9 Figure 4 Steps to conduct PEST analysis 15 Figure 5 Steps to conduct the strategic group analysis 17 Figure 6 value chain model 18 Figure 7 Boston Matrix _ 20

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Figure 8 Strategic Matching Matrix 22 Figure 9: Vietnam consumer confidence index in Q1/2018 _ 26 Figure 10 Spending habit of vietnamese consumers 27 Figure 11 Strategic group map by market share _ 35 Figure 12 Minh Huong product category in 2017 _ 38 Figure 13 Minh Huong revenue by product in 2017 38 Figure 14 Boston matrix of product category of Minh Huong _ 40 Figure 15 Relationship between Product Life Cycle and Boston Matrix 41 Figure 16 Sunfly Trendy Strategic matching matrix 48

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This project has studied the internal and external environment of Minh Huong Company

as a premise for the new Sunfly Trendy brand As a result of the research, Minh Huong's external response rate and Sunfly Trendy's brand score is 2.6: in average position, and could use the opportunity to overcome the challenges Minh Huong's Competitive Advantage and Health Indicator score is 3.11: the company has good organization and resources that are capable of further developing its Sunfly Trendy brand Through the study of clothing market in Vietnam has also positioned Minh Huong's position on the market is in the top 2 and have direct competitors is the Jubbies brand Afterconsidering the internal and external factors, the strategy chosen for developing the Sunfly Trendy brand is Building and Growth

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ACKNOWLEDGEMENT

For the project to be completed, I sincerely thank the support of resources and market information, internal information from Marketing and Sales Department of Minh Huong P.N.D At the same time, I would also like to thank the guidance, comments and modifications made by Dr Do Thi Binh for further enhancing the academic credibility of the project objectives

I would also like to thank the University of Nantes, France and the International School, Vietnam National University for giving me the opportunity to apply and present the knowledge I have learned in the course into this project

This project would be implemented in marketing plan of Minh Huong P.N.D company in

2 months from May 2018 to July 2018 All analysis results about Minh Huong P.N.D would be considered by Board of Directors to choosing a right way development for Sunfly in general and for Sunfly Trendy in detail

All analysis and recommendations of this project also would be used to references for other thesis in the same industry or the same branding development making process

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CHAPTER 1: PROJECT INTRODUTION:

1.1 OVERVIEW ABOUT VIETNAM HOME-WEAR MARKET

The market's largest segment is the segment "Apparel" with a market volume of US$313m in 2018.”1

As shown in the table below, the profit of Apparel in Vietnam fashion market has increased steadily over the years

However, in terms of profit growth, the situation is quite contradictory

Figure 1: Revenue of Apparels in Vietnam fashion market up to 2022

Source: https://www.statista.com/outlook/244/127/fashion/vietnam#market-global

1

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Figure 2: Revenue growth of Vietnam fashion market up to 2022

“According to a recent study conducted by Mely Communication, in more than 100 random women: 55% of 25-60 years old are interested in a well-dressed, home-based products; 28% are preferred fashionable clothes but also can be worn at home (such as shorts and t-shirts); 10% are interested in traditional home-wear clothes

According to regional analysis, 35% of rural women prefer to wear clothes at home separately from to go out; while in the city only 12% prefer home and streetwear (the reason are streetwear clothes dusty, and not suitable for indoor using), the rest are usually used for both at home or go out

Despite this difference, more than 80% of respondents are concerned about home wear because they prefer to look beautiful in the eyes of their relatives and friends

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That shows, consumers are very interested in fashion home wear With over 40 million women consumers, the tendency to wear nice in the home is gradually forming and creating a potential market for textile companies

Vietnamese women are more and more active; then the designs are young, creative, suitable for the natural conditions, but no less feminine, comfortable to wear will be the preferred choice”2

Vietnamese customers are also high appreciate about domestic brands:

Figure 3: Vietnamese customer‟s opinion about domestic fashion brands3

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Proportion of domestic production: 90% are domestic brands The rest is imported 4

In the domestic segment, brands with reputable brands account for only 10%

Tastes of consumers:

Divide into 3 main sections:

→ Ordinary customers: buy home-made products without brand name, most interested in price instead of quality, style

→ Intermediate customer: buy brand name clothing, still sensitive to price but not much attention to style

→ Luxury customers: buy branded clothing and have gout / personality combinations; Interested in material more than price.5

1.2 INTRODUTION OF MINH HUONG P.N.D AND SUNFLY BRAND

Sunfly fashion brand is born from the desire to rise, the will and trust of the founding members and associates of Minh Huong PND Co., Ltd In the desire to build a fashion brand specifically for Vietnamese women, Sunfly has a diverse and young design, professional service and reasonable price With strong belief, Sunfly always want to affirm the prestige and aspirations of raising the Vietnamese brand, proud to be 100% product which is developed by the hands and mind of the Vietnamese people

Founded in 2005, over 10 years of establishment and development; up to now, Sunfly is proud to be the top brand in the field of high fashion home-wear in Vietnam with distribution system over80 showrooms and official agents throughout the North and Middle area of country

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Built on the mission to honor the beauty of Vietnamese women, each of Sunfly products are blazing soul charm, fresh young, confident, full of vitality Main material is Cotton + High Quality Spandex which ordered from the leading suppliers in Vietnam, and the closed process from design - production - distribution is invested more and more professionally and following quality management system ISO 9001-2008 Human resources at the company are always selected carefully with high capacity, enthusiasm characteristic They always research and explore new solutions and technologies to improve the product, overcome all challenges reaching out to new heights, horizons

Sunfly „s business point of view is focusing on the customer; for all business and production activities Sunfly always put myself at the position of consumers to understand and anticipate the needs and expectations of customers to create a variety of products, specialized and suitable for each target group

We hope, with unremitting efforts, Sunfly brand will always have a place in the hearts of customers who are - and will love the fashion brand Sunfly6

Since 2015, Sunfly with new strategy, inherit the value has, expanding into the field of fashion with modern style, youthful, personality without sweet parts The entire Sunfly logo changes to fit the new criteria:

66

http://sunfly.com.vn/gioi-thieu.html

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Vision of company

With a desire to reach out and aim to bring customers freshness, confidence, modernity and the highest satisfaction through fashion design updated trends, quality assurance and suit tastes; Minh Huong P.N.D strives to become a leading manufacturer and distributor

of home-wear fashion products in Vietnam and to integrate into the international market.7

As 2017‟s customer report, portion of 45 – 54 years old is 53%, increased 15% compare

to 2016

Meanwhile, the age range 25 – 34 years old – which considered the main targeted group

of Minh Huong in general and Sunfly brand in particular,was only 7%, and had a little growth at 1,5% compare to 2016

This is a bad signal for the company because 45 – 54 years old customer group‟sdemand has shaped, difficult to stimulate change leads to low demand for goods

On the other hand, through anonline survey of 726 answers who used Sunfly‟s products/1500customers in Sunfly‟s fanpageon 15/09/2017 – 25/09/2017 about Sunfly's image, the results show that customers see Sunfly as a low-cost brand:

In 726 answers for the question:

“What do you think about Sunfly’s products?” with 4 choices:

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- Nice design

There were 253 customers chose “Cheap price” to describe about Sunfly‟s products

There were 187 customers chose “Comfortable” as the characteristic of Sunfly‟s products

Only 121 people thought Sunfly‟s products have a “Nice design”

And 165 correspondents ticked to “Long- lasting material” in this question

This is contrary to the vision of the company on the development direction is to become ahigh-end brand with dynamic designs, catch up the most trend

Therefore, the biggest problem of Minh Huong P.N.D is the need to have a new brand – Sunfly Trendy - with the purpose of rejuvenating the image, and exploring the source of younger customers

This project will carry out a general analytical works to find out the development strategy for the new Sunfly Trendy brand of Minh Huong company by finding a direct competitor, analyzing the required resources of the company and realize the implementation of the strategy

- Strategic group analysis to find out direct competitors of Sunfly Trendy

- Study the factors inside Minh Huong P.N.D to determine the direction of development for Sunfly Trendy

-Choosing a strategy and developing an implication strategy for Sunfly Trendy

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CHAPTER 2: RESEARCH METHODOLOGY

2.1 DATA GATHERING METHODS

The data used in the project was obtained from two sources:

 Primary data:is collected on the survey in Minh Huong‟s employees to find out what is the importance to Minh Huong and Sunfly brand to develop

This survey is conducted in the end of fiscal year 2017, from 05/03/2018 – 17/03/2018 at all over the 47/78employees exclude workers from cutting and logistic department

All employees were asked to rate the external factors and internal factors which could be affect to Minh Huong in general and Sunfly brand in particular

Its results used in the EFE and IFE matrix by calculate the average of rate

 Secondary data:is collected from:

- financial status reports,

- business performance reports,

- market research results available

of Minh Huong company and brands are doing business and

- the overall economy of competitorsabout market range, product ranges, target customers, etc…

which is compiled from sources popular on the internet, including information from official websites of competing brands, market economy report and overview reports

All secondary data is citation specific

Its results used to analysis in PEST model, Value Chain model and Boston matrix

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2.2 DATA ANALYSIS METHODS

After collecting the data, the project uses the following methods to study in order to find

suitable development strategies:

2.2.1 PEST MODEL ANALYSIS:

A PEST analysis is an acronym for a tool used to identify the macro (external) forcesfacing an organisation The letters stand for Political, Economic, Social, Technological

In marketing, before any kind of strategy or tactical plan can be implemented, it is fundamental to conduct a situational analysis Organisations that successfully monitor and respond to changes in the macro-environment are able to differentiate from the competition and create a competitive advantage.8

Steps to conduct PEST analysis:

Figure 4 Steps to conduct PEST analysis

8

https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-analysis/

Understand PEST factors

Gather relevant datas

Identify the Opportunities

Identify the Threaths

Take action

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STEPS IN DEVELOPING THE EFE MATRIX:

1 Identify a list of KEY external factors (critical success factors)

2 Assign a weight to each factor, ranging from 0 (not important) to 1.0 (very important)

3 Assign a 1-4 rating to each critical success factor to indicate how effectively the firm‟s current strategies respond to the factor (1 = response is poor, 4 = response is extremely good)

4 Multiply each factor‟s weight by its rating to determine a weighted score

5 Sum the weighted scores.9

The ratings in external matrix refer to how effectively company‟s current strategy

responds to the opportunities and threats The numbers range from 4 to 1, where 4 means

a superior response, 3 – above average response, 2 – average response and 1 – poor

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The sum of all weighted score is equal to the total weighted score, final value of total weighted score should be between range 1.0 (low) to 4.0(high) The average weighted score for EFE matrix is 2.5 any company total weighted score felt below 2.5 consider as weak The company total weighted score higher than 2.5 is consider as strong in position.11

2.2.3 STRATEGIC GROUP ANALYSIS

Strategic group analysis considers the characteristics of firms as the basis for distinction

A strategic group is a group of firms within a specific industry which follow the same or

a similar strategy.12

Use of Strategic Group Analysis is to understanding who are the most direct competitors

of company The result of analysis also establishing the different bases of competitive rivalry within and between the strategic groups

Steps to conduct the strategic group analysis:

Figure 5 Steps to conduct the strategic group analysis

Source: http://st.merig.eu/index.php?id=90

2.2.4 VALUE CHAIN ANALYSIS:

Value chain analysis is a strategy tool used to analyze internal firm activities Its goal is

to recognize, which activities are the most valuable (i.e are the source of cost or differentiation advantage) to the firm and which ones could be improved to provide

Evaluate group mobility and direction

Evaluate the strategic intent of individual companies

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competitive advantage In other words, by looking into internal activities, the analysis reveals where a firm‟s competitive advantages or disadvantages are.13

Figure 6value chain model

STEPS TO DEVELOP IFE MATRIX

1 List key internal factors as identified in the internal audit process

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2 Assign a weight to each factor The sum of all weights must equal 1.0

3 Assign 1 to 4 rating to each factor to indicate whether that factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4)

4 Multiply each factor‟s weight by its rating to determine a weighted score for each variable

5 Sum the weighted scores for each variable to determine the total weighted score for the organization.16

Overall evaluation - resulting weighted ratio evaluates the internal position of the organization or strategic intent The best possible score is 4, the worst is 1 Average values are around 2.5.17

2.2.6 BOSTON MATRIX

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share) These two dimensions reveal likely profitability of the business portfolio in terms of cash needed to support that unit and cash generated by it The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.18

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Figure 7Boston Matrix

Source: https://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-matrix/

Bruce D Henderson - Boston Consulting Group (1970)

1 Dogs: These are products with low growth or market share

2 Question marks or Problem Child: Products in high growth markets with low market share

3 Stars: Products in high growth markets with high market share

4 Cash cows: Products in low growth markets with high market share19

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view it is better to distribute the assortment over all four categories Some strategic choices that are in conformity with the BCG matrix could be:

Make as much money as possible with the product by means of the Cash Cow This can

be achieved by improving or renewing the product or by manufacturing by-products

4 Divest strategy

Abandon the investment in the product by means of a Dog; the market is saturated or there is no or little interest in the product.20

STEPS TO DRAW BCG MATRIX:

Step 1 Choose the unit

Step 2 Define the market

Step 3 Calculate relative market share

Step 4 Find out market growth rate

Step 5 Draw the circles on a matrix21

2.2.7 STRATEGIC ANALYSIS MATCHING STAGE

This is the final step to integrate all of the above research results from the brand's ability

to respond to the outside environment, to the position of the company in the strategic group; to the internal force as a factor to compete with the direct opponent

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Use this matrix to evaluate and select the direction of the development strategy that will

be deployed for the new Sunfly Trendy brand

This will also serve as a benchmark for evaluation after the actual deployment time

Figure 8Strategic Matching Matrix

Source:http://www.agr.unizg.hr/multimedia/pdf/strategic_mgmt_4.pdf

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2.3 PROCESS OF MAKING STRATEGY

Analyze the external competitive

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CHAPTER 3: PROJECT ANALYSIS RESULTS AND SUGGESTIONS

3.1 EXTERNAL ENVIRONMENT ANALYSIS

The first objective of the project is to study the external environment of Minh Huong in order to understand the market trend and to consider whether the brand extension at the moment is the right decision

In order to determine that, secondary data collection method is using to create a basic picture of the current business environment in Vietnam - where Minh Huong developed itself

The method chosen to perform is the PEST model to study the four components of the market, including Political, Economic, Social and Technical

For the project, Minh Huong would like to have an overview of the entire Vietnamese

consumer market to answer the question "What is the current situation?"rather than

focusing on the situation of the market garment school in general

Factors to choose from are issues that may affect Minh Huong Company in particular and

to the Vietnamese textile industry in general

Next, categorize these sources based on either the Opportunity or the Challenge for Minh Huong P.N.D

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Finally, synthesizing the information obtained, we have the following analysis:

Table 1:PEST analysis for Minh Huong P.N.D

Oppotunitie

s

The government insists on no change

in economic and financial policies in

201822

1 Real GDP rose by 7.4% in the first quarter of 2018 comparing with 5,1%

at the same period last year

2.Exchange rates remained relatively stable.23

3 Total retail sales of consumer goods and services in the first quarter were estimated at 1.048 trillion VND, up 9.9%, include apparel increased by 12.4%

comparing at the same period last

year 24

1 Nearly half of consumers were willing to spend their spare cash to buy new clothes 51% '

2 Vietnam consumer

confidence index reached the highest score in the quater 1/2018 - which helped Vietnam remain the fourth most optimistic country in the world.25

3 Population under 30s now at 46%.26

The Internet play a key role in the consumer journey for many product catergories

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Threaths

In order to create a competitive

advantage, the government has also signed up to free trade agreements, the latest being the CPTPP and the EVFTA, with a number of conditions on facilities and conditions of commodity origin It takes time for businesses to perfect and deploy

Vietnam's consumer price index (CPI) rose slightly at 2.8% (over the same period last year).27

1 Birth rate falls

(females 15-49) in

2018 and dropping fast

2 Life stages are maturing.28

In the long term, the textile and garment industry still has many problems

Specifically, cutting, sewing is still the most developed part of the industry; production of materials, designs and distribution systems are less developed, while this is the stage to bring the highest added value.29

Figure 9: Vietnam consumer confidence index in Q1/2018

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At the same time, we can answer the question “How does Minh Huong adapt to this environment?”

Table 2: EFE Matrix of Minh Huong P.N.D

Score

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1.The government insists on no change in

economic and financial policies in 2018 0.05 2 0.1

2 Real GDP rose by 7.4% in the first

quarter of 2018 comparing with 5,1% at the

same period last year

3 Total retail sales of consumer goods and

services in the first quarter were estimated

at 1.048 trillion VND, up 9.9%, include

apparel increased by 12.4% comparing at

the same period last year

4 Exchange rates remained relatively stable 0.08 2 0.16

5 Nearly half of consumers were willing to

spend their spare cash to buy new clothes

51%

6 Vietnam consumer confidence index

reached the highest score in the quarter

1/2018

8 The Internet play a key role in the

consumer journey for many product

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