Strategy to expand the blue sky brandname to the southern vietnam market

Board of Directors in Han Viet Company has determination to build Blue Sky as a strong brand name supplying the best quality items in bedding area.. Project Objective: The objective of t

MBMM

DAO THIEN KHIEM

STRATEGY TO EXPAND THE BLUE SKY BRANDNAME TO

THE SOUTHERN VIET NAM MARKET

PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor: Dr Tran Xuan Kiem

Ho Chi Minh City

(2008)

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Table 2: Turnover of the South branch in the pas{ 2 y€ATS co ii 9

Table 3: Viet Nam GDP, 2003-201(0 - sen re 15 Table 4: Population, Viet Nam 2003-20 1 HH H910 43212141 1116 15

Figure 2: Main distribution channels of bedding products

1, EXECUTIVE SUMMARY

1.1 Introduction:

In recent years, together with a rapid economic growth in Viet Nam, the living standard of Vietnamese people has increased The customers have a tendency to enjoy their lives and to spend money on premium goods especially in bedding products In the past, with the conception of “only feed and clothe properly”, the customers have often utilized the cheap price and low quality items to decorate their bedroom for many years ago At present, they have changed this consumed habit by using better quality products with higher price to satisfy their lives more

and more

To seize these demands from customers in Viet Nam, in 1999, Han Viet

Company was founded in Ha Noi city, a northern city and a capital of Viet Nam This is one of the famous enterprises specialized in manufacturing and selling premium bedding products The ranges of products are mattress, blanket, drap and pillow under a Blue Sky brand name The end-users who buy these products from HanViet Company are hotels and householders

With all machines in production line and material, fabric imported from foreign countries such as Korea, France Board of Directors in Han Viet Company has determination to build Blue Sky as a strong brand name supplying the best quality items in bedding area The segment for its market is also clear, that is the customers who are in middle and high class

From the start, Han Viet Company has to cope with many difficulties and challenges like the way to seize market share or how to compete with the rivals There were a lot of competitors in the northern market at that time They had run the business for a long time and get leading the market Meanwhile, Hanvico is just a new player in the market

After coming into operation for four years, Han Viet had put its footprint in the northern market and achieved great success there More and more customers know Blue Sky brand name with a slogan “As warm as mother’ heart” The annual turnover has continuously increased for years

In 2006, Han Viet decides to expand the market to the South by establishing a branch in Ho Chi Minh City It was located at 110A Cach Mang Thang Tam Street, Ward 7, District 3, HCM city At the beginning, the aim for opening a branch is to explore the Southern market and to introduce products to the customers Currently, all sales activities were conducted by consigning goods in retail shops and it was still selling together with other bedding product from

many competitors there

1.2 Project Objective:

The objective of the project is to make a strategy for expanding the Blue Sky brand name to the Southern market of Viet Nam Currently, this brand is very well known in the North but still being a strange one in the South The Board of

Directors also found that building Blue Sky to become a strong brand is one of

the long term strategies in their business It is just because building brand is the most important mission in every enterprise if they want to predominate over

other competitors and to strengthen their image in the customers’ mind Naturally, having a strong brand, they will be a strong business in the market

:

In secondary research, I collect the existing data regarding to brand building through printed sources such as press articles, preference books, government source and electronics sources like internet, CD_ Rom Many updated practical lessons in specialist magazines will also be utilized in this desk research

2 THEORY OF BRAND BUILDING

2.1 What is a brand?

A brand is a symbolic embodiment of all the information connected to a company, product, or service A brand is a collection of images and ideas representing an economic producer; more specifically, it refers to the descriptive

verbal attributes and concrete symbols such as a name, logo, slogan, and design

scheme that convey the essence of a company, product or service Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design and media commentary

This is also a crucial difference between a brand and a name A name is merely

a name For instant, Coca-Cola is a brand with a symbolic embodiment of cola,

soft drink, red color when we talk about Dom Perignon or Tiffany, we instantaneously think of delicious champagne bottles or luxury diamond beads

A brand serves to create associations and expectations among products made by

a producer A brand often includes an explicit logo, fonts, color schemes,

symbols and sound which may be developed to represent implicit values, ideas, and even personality The key objective is to create a relationship of trust

The brand, and "branding" and brand equity have become increasingly important components of culture and the economy, now being described as “cultural accessories and personal philosophies"

(Philip Kotler, Gary Armstrong, John Saunders, Veronica (1999), Principle of Marketing, Prentice Hail Europe, page 469)

2.2 What is brand equity?

Brand equity as a set of assets linked to a brand’s name and symbol that adds to the value provided by a product or service to a firm and customers There are four major asset categories These are Brand awareness, Brand loyalty, Perceive quality and Brand association

2.2.1 Brand awareness:

Awareness refers to the image of brand in the consumers’ mind If consumers’ minds are full of mental billboards- each one depicting a single brand- then a brand’ awareness would be reflecting in the size of its billboard Awareness is measured according to the different way in which consumers can remember a certain brand name In other words, Brand awareness can be measured by showing a consumer the brand and asking whether or not they knew of it beforehand It can be ranged from recognition, recall, top of mind to dominant

brand

2.2.2 Perceived quality:

Perceived quality is a key strategic variable for many enterprises Total quality management (TQM) or one of its relatives has been central to many firms for the past decades and perceived quality is usually the end goal of TQM programs Many firms explicitly consider quality to be one of their primary values and include it in their mission statement Perceived quality is often the key positioning dimension for corporate brands and other brands that range over

product classes Because these brands span product classes, they are less likely

to be driven by function benefits, and perceived quality is likely to play a large

role.

2.2.3 Brand loyalty:

Brand loyalty consists of a consumer's commitment to repurchase the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy True brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand Brand loyalty has been proclaimed by some to be the ultimate goal of marketing However, brand loyalty is more than simple repurchasing Customers may repurchase a brand due to situational constraints, a lack of viable alternatives, or out of convenience Such loyalty is referred to as

"spurious loyalty" True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm

Figure 1: The five loyalty profile

At the bottom of the pyramid are the consumers who exhibit no loyalty at all, the promiscuous switchers For various reasons they regularly switch between a wide range of brands Perhaps they purchase solely on the basic of price, choosing the best brand offer at the time or perhaps they are convenient shoppers, buying on the basis of availability The later could, of course, look like brand loyalty, if the customers always buy from the same store In reality, it would be store loyalty

The second level of loyalty is represented by the constrained switchers These are the consumers who have limited set brands from which they will choose depending upon circumstances and the occasion

The next level up are the consumers who buy the same brand out of habit and have no reason to change- the habitual buyers These are, of course, vulnerable consumers from the company’s point of view, as they have no reason for their loyalty; it is passive rather than active

The fourth level is active loyalist These consumers have a reason to be loyalty The reason may be economic, in, so far as they can not afford the more expensive brands, or it may be functional, in so far as no other brand offers the same function benefit, or it may be emotional, in so far as the brand offers the symbolic values that match the customers’ own profile

The top level of loyalty is the committed These consumers will buy no other

brand They are, if you like, the extreme activist But they are also very rare

(Blois Keith, (2000), The oxford Textbook of Marketing, Oxford university press, page 484 - 485)

strong brand, Free press business, page 8 — 25)

3 PRESENT SITUATION ANALYSIS

manufactured here and distributed to the South branch.

Here is the operational structure of Southern branch

The operation of Southern branch is quite simple

purchasing order based on sales every month will make order to the factory and products deliver to the warehouse in the South within 2 weeks Then it is distributed to agents All sales activities like balance, stock enter to the account independently

Here is a turnover of two branches in the past:

Table 1: Turnover of the North branch in the past 3 years

3.1.2 Brand name:

—¬

As a company specialized in bedding products with a brand name Blue Sky, Han Viet wants to introduce the consumers the brand name which is easy to remember, stand for an immense sky The meaning of brand implies to create a well sleep to everyone in infinite universe

(See more in Appendix 6&7)

All these items are manufactured with imported material It comes from many other countries like Korea, France Main fabrics in Blue Sky products are cotton

in order to be suitable for climate in Viet Nam Other fabrics are polyester; linen Compared with other products from other competitors, Blue Sky has some advantages like more skilful quilting or flatter mattress Especially, Blue Sky mattress are made by dedicated fiber on the surface that can create infrared rays which are very good for health of users A flat mattress makes vertebral column

of users to be straight all the time as lying in it The colors of products have also been designed to be suitable with every season For instant, more elegant colors

are manufactured for hot climate in the South.

3.1.6 SWOT analysis in the South:

s* Good quality products “+ Long time to deliver items from

* Color of items are change the factory to warehouse

continuously ** Agent network is not sufficient to

** Flexible policy to agents introduce items to consumers

“ Well experienced staff in this] A few consumers know Blue Sky industry brand name in the South

Opportunity Threat

“+ High income people has increased| “ Many international bedding

* Well support from headquarter

for recent years

Consumed habit in bedding products

has changed

Less competitors in the South region

Capability of product diversifying brands enter to Viet Nam as WTO

agreement come into force

In the meanwhile, Blue Sky is a premium product therefore the potential customers are high class people Main direct competitors are Everon, Edena Everon was present in the market for one decade ago This is a most well known brand and captures a biggest market share in this industry Edena has recently participated for 2 years and also has some remarkable marketing campaigns for popularizing its brand in the southern market

From competitor’s analysis, they can be divided into five groups as follow:

* Foreign products: they are imported from other countries like Taiwan, Korea and distributed by Vietnamese exclusive agents Their prices are very high and displayed in big cities only These brands are Ha Ty A My, Nghi Khang My, My Home

“+ Premium domestic products: they are made in Viet Nam but all material, fabric and machine are imported from foreign countries thus their price