Brand building and communication strategy for colokit, thien long group

While Colokit aspires to be the Number 1 Top of mind brand of Art Supply in Vietnam | local market by 2018, the brand awareness is low under 10% and it does not have clear › brand vision

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES

SOLVAY BRUSSELS SCHOOL OF | ECONOMICS & MANAGEMENT | MMCoM8

TRAN THI MINH HAI NGUYEN THI BICH THUAN

+

BRAND BUILDING & COMMUNICATION STRATEGY FOR COLOKIT, THIEN LONG GROUP

MASTER IN MARKETING AND COMMUNICATION MANAGEMENT

TRƯỜNG ĐẠI HỌC MỦ TP.HCM THƯ VIỆN

Academic Tutor: Prof Hoang Thi Phuong Thao |

Practicing tutor: Mr Huynh Minh Nhut 2

Acknowledgements

First of all, we, would like to express our gratitude to Prof Marianne Claes for her first

guideline of the structure of this project :

And then, we also give special note of thanks to Mr Huynh Minh Nhut for his practical | guidance and Prof Hoang Thi Phuong Thao for her academic guidance on this paper

We are indebted to Mr Trinh Van Hao, Communications Manager of Hoan Cau Company, —

a subsidiary of Thien Long Group Corporation for his valued strong support and the | courtesy of facts and figures presented in this project ,

We would like to take this opportunity to send our special thanks to all professor and staff |

of Solvay Vietnam-Belgium and Open University, our families & friends, who have | brought us invaluable support throughout

Commitments

We, Tran Thi Minh Hai and Nguyen Thi Bich Thuan commit that we have written the ị project by ourselves based on the information collected from Thien Long Group - Corporation and electronic sources

This project is designed only for the academic purpose of the completion of our Master in - Marketing and Communication Management We agree that it is freely available for | reference and study It is unexpected for copying and publication or any other uses.

Executive Summary

Colokit is an Art Supply product brand belonging to Thien Long Group (TLG) -the | Number 1 Company in the field of manufacturing pens and other office products in | Vietnam in terms of revenue and production volume

While Colokit aspires to be the Number 1 Top of mind brand of Art Supply in Vietnam | local market by 2018, the brand awareness is low (under 10%) and it does not have clear › brand vision and brand identity to achieve that goal (TLG Marketing Department, 2014)

TLG’s Development Strategy Orientation (2014-2016) has outlined domestic market share ị expansion as their strategic growth strategy for Colokit With the increasing cpmpetition ị from foreign imported brand and local counterparts, a strong brand is essential for Colokit | -to be outstanding among others and win customer loyalty It is also critical that Colokit creates a brand relationship with target customers and end users to maintain re-purchase - and create word of mouth to attract new customers Hence, without a complete branding strategy to be developed and executed, Colokit is challenged to maintain and grow market share in domestic market

With the aforesaid reasons, brand building therefore becomes a critical issue for Colokit to close the gap between current situation and their marketing objective

This thesis aims to assist Colokit to achieve top of mind brand awareness by 2018 by providing theoretical framework and applicable approach to build its brand in Vietnam Therefore, the author deals with different stages in the branding process: segmentation, targeting, positioning, brand identity, and communication strategy

The author starts with External analysis of stationery and art supply industry overview, art supply competitors’ analysis, customer behavior insights; and Internal analysis of the Colokit’s revenue, marketing mix; followed by a critical review of Brand strategies and Brand communication Data is collected from published materials, market research reports | and the authors’ mystery shopping observations

By critical reviewing aforesaid dimensions, backed by relevant theoretical frameworks, the | author outlines the critical issues of Colokit brand Currently, Colokit brand does not have |

a clear brand vision and brand awareness is very low although the brand was launched in |

2001 and re-launched in 2011 The brand identity is not fully developed, still generic and - indistinctive to local counterparts Since there is no established guideline, there is inconsistent branding across product portfolio packaging Brand communication activities | are campaign basis The brand awareness is low and not yet met the rising expectation of ị middle class on high quality product in terms of packaging, pricing and brand image On | the organization perspective, Thien Long Group also faces challenges in current product :

oriented KPI system, short-term focus communication strategies and unspecialized ! marketing team that hinder the Colokit brand development

Finally, the author provides recommendations and action plans for Colokit to achieve No.1 | top of mind brand of art supply in Vietnam by 2018 through: Proposing a formal Brand | identity platform and direction to re-design packaging; Proposing brand strategy roadmap ¿ and communications strategy to drive brand awareness and brand affinity Colokit is also | suggested to cooperate with advertising and media agencies in a further idea generation process to activate communication campaigns

Table of Contents

Acknowledgements ¬ ¬ SE 3 CommitmeniS -sss<esseseerrrtserrrrre TL .LÔ 111 4 : Executive SUmiMAFV . 22555°2++ttttttrtttirtirrrirtrirtrrrrrtftttrrrrllfftrtfffnttffffttftffffTf 5 List Of FÏBUT€S -c ottttttnt112221022220211.000.0720000011100077700110111TT1T0TTTT07777T77 9 Liist of TabÏ€S ¿- 5° ©2s+SSs2tEE+tt.Etrrtrrrirr.0001101110010111171010n11010111nn100000777777000177 9 CHAPTER I- INTRODUCTIƠN -. -+ +>++teeertetrttrtrtrtrtr mm — 10

1 Backpround -. -e-ssseeeset++ pessseenesennsennneunnnennneesnseennennnee eee eee eee 10

2 Objectives and Research QuestÏOnS eeeeeeerrrerrrrrrrrrrrrertrrrrrrrtrrrnnnnir — 12

3 Scope and LimitatiOnt -rttttttttttrttttttttr1trrrrrtttrttrrrrrnrtrrnnnnrrnntrif 12

4 Research MethodolOgy -¿ s++sxsestesetntrttttrrtrrreirrriirnrnirrrrtnnltnnrtrrlttttrttnfTE 13

5 'Thesis S†rUCfUF€ s cs+ecxteEvttexrterttrtttrirrrirrrirriirriretrrrtnrtritrtfnttfnttfnntffttfrftnfff 14 CHAPTER II- LITERA TURE REVIEỆW -ceceeeseeeeerrrtrrrttrrrttrrrrrtrrrrrrrrrrrrtrrnrrnrtterrrrr 15

1 Segmentation —Targeting ~Positioning s-eerxseesererrterr2.0.1101100nn1nnT0 15 1.1 SegmentatÏOn -eeexseerrerreririrrittrrrriiiiirrtrrriiiilirrrntnrit0tfffrlntttffffffffftrrr 15 1.2 TargetÏng -ccessserrereerrtririiriterrrrriiiirrirrrtrritnrdrrrriirr 16 1.3 Positioning -eeseeerxrrrttrritrrriiiirrriiiirrriiiiriittrrriittttttrrffftffnntftffftfftffftrf 18

2 Defining Brand and Brand Idenfity -seeeererrreeetrrtetrrtrtrtrrrtrrrrtrrrtrtrnrrltfrrtrff 18 PnN: n - 1Ô ẽ “xxx 18 2.2 Brand identify -cssserrretetriitreirrrri.erritrrritrtrttnrtrtrnltrnrttfnnrftrntttrff1TTP 19

3 Models of Brand Identity . -s -5°°csttrrtetrtterrttrrtrrrrrrrerrtrrrrrrrrrtrirtenrtrrttrnttltrnttnnf 20 3.1 Kapferer’s (2004) Hexagonal Identity Prism Model -‹ eee-seerrretrrrterttrrtrirre 20

3.2 Unilever’s (2005) Brand key model — 11 21

4 SUHINAFY .c -55secSSzxtttrrrtttttrrrrrrrtrrtrrirrr110111n1101001n0018nTTTnREETETRETTTTEP 23 CHAPTER III- EXTERNAL AND INTERNAL ENVIRONMENT ANALYSIS -‹ - 24

1 Market OVerVi@W set 11202.01000101010001000000000101011001011000100100001000 24

1 L1 Marlket SÏZ€ .ccc-5ccccxeeeeterrrkrrrirrtirtrrirtirrriiiirrii.i.100111.100.011/.110100110000001011nn000n1Tf 24

1.2 Marlket GrowWtfh - s- 5-5-2 °<2E2EtStErtetrer011110010211111002010010100010101000000100001TP 25

2 Competitive AnalÏySÌS -cceeeerrrerrirrtttrrrrrirrirrrrriirrrtrrrrtrriintrttiniltttttftttnttftftfr 28 2.1 Colokit°s CompetÏtOTS -eceeererrrrtrrrrrte ` 28 2.2 Marlket SÌiare + s52 set tE.1102111100012.01021110000110010n00000000007070 31

3 Customer BelaViOFS -:.s-esseeeeerrrrerrrrrriirerrrrernni TT 11 33

3.2 Primary Data ecccerrreersrterrrrriirtirriiirrrrriiittrinrtrrrirtttrrtfnlntftttnltftfffftfttfTTf 36

4 Colokit OverVieW eceeerrerrrrrrrrrriirrrririrrrrrtrrtitrririlrriillttnnrlllttrftftfff1777 37 4.1 R€V€RUE c 225<2scsvsetrkertr.Erktrrr1171.0110001010010100010101n11n000000071007071070707 37 4.2 Marketing MÌX -cseeseererrerterrrrteirrrtrrririirtrrrrilttrrtrffnnttftnfnftfffrfftftrrf 38

5, SUmHAFY « -ccccs<cccevzxtrtttttrrirrrtrr 1010 0001001n101011n11100nTPnTTTRROETOTEHETTTTE 40 CHAPTER IV- COLOKIT BRAND ANALYSIS -eeerrerereeerrerrrrrtrrttrrrrrrrrrrrrrrner 41

1 Marketing ObjeCtiVe -cccesseeeeerrrrretiiiirrriiiirriitnrrttrtrrilrrttnnrtttrttftfttftn111m07 41

2 Marketing Strafegy -ee-secserrriirrrrriiiirerrrrrreiiirreiiirrrrrrirrtrrrnnitrrrnnnrtttftttfffffTDA7 41

2.1 Segmenfation -«-e.eeeee T.0011101111131.1 1 E1111112 1 10010 001-010010000018nTT00000011TTPPnTnm 41

2.2 TargetÏng ceccceerernrreirttrriiiiirtiiiiiiiiiriiiitrrttrnlltntftfttftfffffffftffftff đe 42 2.3 Posifioning -c‹esseetxtrrterrrirritririrrriiirtrriiltnlttttrltftrntffnnftfttnnttffttf11fffrfff 43

3, Brand StrafegY -cccssrtrtriiirteeriiiiririiiiiiiiriinintnnnnttrrnnnttrnntnttnlttftrttffffgff 44 3.1 Brand Identtity -. c-xeteerxettsrrrrtrrrireirrerritriirrrtrrrrrnrrtrrtrtrltrnnttfftntfffrftfffrfgf 44 3.2 Packagingg -.-c-ceeeseterrrriiirtsriiiiiiiiiriiiinriiril00tnn10010t0101ftfnTERRREI 46 3.4 Brand EvaluatiOn . ses++xte+xerrtertrtrrtrieiieiir100001001001000110nn0000000000000007 48 3.5 Current Challefige . -5+-5+++°++x+ev22ttrrttetrtetrttrrtrrtrtttr1ttrmtfrrnttrntrrltre 49

4 SUAFY e-ccccscccceetrttrrrttttrtirtrrtrrrrittiirtrtrriirrriinrtrrtnnrttrtrrtrtnlltfffnntftffffttfTTEf 49 CHAPTER V- CONCLUSION & RECOMMENDATION ON BRAND BUILDING AND

COMMUNICATION STRA TEGIES -+°°+++°sseennhetrtterrtttrtttrrrrrrrrertrtrrtrrritrtrttrer 51

1 Analysis mm ,ÔỎ — 11 51

2 Proposed Brand Idenfity ceeseserrrrrrrirrirrrrrrrrrrrtrrrirrrtrrrrrtttirrtrnillttftrtfffftffr 52 2.1 Colokit Brand PlatfOrmm s c5sssssetentetttrtierieierierrrerrrrirrrrnrtnrenntrtptterf 52 2.2 Re-design Packaging ecerreteeriirrriiriiirriiirrnirrrirtenittnnntrttntt11000710 55

3 Brand Communications Strategy . -eeseerierterrterrrirtrrrrirrrtrirrrrrrrrtetrnttnrttrttr 56 3.1 Colokit Brand Strategy Road Map 2015-20 18 -eeeeererrerreirterrtrreremtrmrrertre 56 3.2 Proposed Communication Strafegy -eeererreenrrrtrrtrrrtrrrrtrrrrrerrrrrrtrtrnrrrtrrrerid 57

4 Evaluation cccceertrerrrttrrrttrrtrrrirrrtritrirtrrirtrtrrrtirrrttrtrtrtttltllliliiintfi.0000107 59 REFEREENCCE ¿2-2 xe HE 103101.2.111202120171101000001111011001000010000100100101101000T710 60

APPENDIX e kHhtggtgrrrrrriririrtitrrtrirrrtrtrtrtrrnrtnil 62

List of Figures

Figure 1- ATL Advertising Spending, 2010-2013 -ersererrrttrrtrrrtrrrrrrrrrrrrttfrf Figure 2- Research methodology sassecseesssssssssssscececersnssnsnnnnnnasssnnnnnnnnnnnen ene ee 7 Figure 3- Targeting strategy TẠp ceeeneereerrtrrtrerrerrerrrrrrgrrrrg 0U) Figure 4- Integrating positioning strategy to marketing mix Thy ng 2138389110331 Figure 5- A Taxonomy for Brand PerspecfÏV€S -eerttrrrertetrrrtrrerrrrtrrtrttitttttf1777 Figure 6- Hexagonal Jdentity Prism Model rreeseeerrtrtrrrttrtrrrrtrrrrrrii111717 Figure 7- Brand personality sCaÏ€ eererrrrrrrrtrrtrrrrerrerrrmnrttrtir117777772//

7 Figure 8- Brand Key Vision Templafe ‹-c-sssc+tntttttttttttttrrrrtrtrtrrrrrrrmrrnrtnltff017777777777 Figure 9- Viet Nam Stationery market size 2007-2013 - -ecserteeertrrteirrrterrrrrrerrrrrrnrrrrtrret Figure 10-Proportion of Art supplies in stationery consumption, 2007 «-eeeeerrterrterrttrrrtrt Figure 11- Vietnam GDP annual growth rate 2012-2014 ¬— Figure 12- Vietnam GDP Per Capital PPP period 2007-2014 .e-erereeerrrrrettrnrrrrrrrrrirre Figure 13- Total pupils from kindergarten to lower secondary in education SECtOF +-ssseiersereers Figure 14- Colokit's Marketshare, Production Capacity and Distribution Network, 2013 _—_ Figure 15- Colokit Market Share 2009 -sceeeettrrttrrnrrrrrrrrtrrrrtrrttnnttdttft2177777777 Figure 16 “International School Research 2010 -. reeerrrrrrrrmrmrrerrrrrrrrrrTTD Figure 17 - Emerging Middle Class .ssssssssssssssssssessescensssssesesennennanevsscnnennnnsnssss en nee et se Figure 18 - Purchase driver Of art produCfS -cesseererirrrrrrrrrrrrtrtrrrrrtttrtrtftftfftftfff177777 77 Eigure 19 - Source of reference on art products by 4g6 -e-eeererererrrrrrerrrtrretrnnttrtr1172TT77 Figure 20 - Role of Advertising on consumer's purchasing decision -eeeeeerrrrrrrrrrrrrnrerree Figure 21 - Average spending on stationery and art products projected in 2013 eereeterrrrte Figure 22- Colokit average price per product type in 2013 (Unit: VND) eeererrsertrrrrtrree Figure 23- TUG Distribution netWOFk « c-cccreneetrtrrrrrrrrrtrrrtrtrtrrtmrmrftfrttffft7717777777 Figure 24- Colokit positioning integrated to marketing TIX , va Figure 25- Colokit Brand Key Model .ssssssssssssssssssssnssnnnesesssscnnennnnsssensnssg nett ee iS

List of Tables

Table 1- Colokit competitors’ product portfolio, price and brand straf€BV -ssrrertrtrrrrertrte Table 2 -Colokit competitors' brand communication channelS -ssrttsrrrrerrrtrrttrtrrtrrtrrrrtrer Table 3- Colokit and competitors” market share for Art Supply product Caf€gOTÏ€S «-.ssesereer

CHAPTER I- INTRODUCTION

In this chapter, the author starts with an overview of branding in Vietnam and Art Supply ' context, followed by an introduction to Thien Long Corporation (TLG) and statement of | Colokit’s branding problem In subsequent parts, the author deals with Research © objectives, Research questions, Scope and Limitation, Research methodology and Thesis

structure

1 Background

a Branding in Vietnam Context

Brands are an important aspect of everyday life Brands help consumers to exercise their _ preferences in the marketplace For companies, in turn, brands are valuable strategic as a — source of competitive advantage A large volume of academic studies across a variety of | disciplines offer many insights into successful branding practices Branding strategies have evolved at fast pace and become more sophisticated, which require branding experts to — have a keen sense of market trend, creativity and strategic vision of an entrepreneur

In Vietnam domestic market, expenditure on advertising channels continues to grow at — 15% in 2013 even in the economic downturn of the year 2013 (Kantar Media Report, 2013) However, Vietnamese businessmen have not paid adequate investment on : intangible assets, including brand development, intellectual property, technology and | product ownership (Dr Phan, 2010) This shortcoming makes a substantial disadvantage since companies lack strong brand image and clear branding strategy to compete on | product value and product differentiation

(US Million} 900M

M

Advertising spend looks to grow at a healthy 15%

& 4-5% on inflation and free ad space largely driven by TV

Source: Kantar Media, 2013

2010 2011 2012 2013 Q3

In the art supply industry, the purchase decision process is not complex, and the key | purchase driver is price and brand, which is mentioned by 56 % and 49.2% of respondents _

respectively (Tiep Thi Gia Dinh consumer research, 2007) Hence, brand is essential for — every product to be outstanding among others and win customer loyalty

In addition, for art products targeted at pupils of pre-school, elementary and lower : secondary school, the main source of reference is the user’s own experience of the product and friend and relatives’ referral (Tiep Thi Gia Dinh magazine research, 2007) Hence, it :

is critical to create a brand relationship with target customers and end users to maintain re- © purchase and attract new customers via word of mouth

c Introduction to Thien Long Group and Colokit

Established since 1985, Thien Long’Group (TLG) is considered as the No.1 Company in | the field of manufacturing pens and other office products in Vietnam in terms ef revenue © and production volume It visionizes “to serve study and conquer the peak of knowledge as

Moving forward, TLG aspires to become a market leader in Asia in general and Southeast | Asia in particular It orientates to continue fostering domestic market share expansion and expanding export capacity for Flexoffice & Colokit, as outlined in Development Strategy Orientation, period 2014-2016 (Source: TLG)

Colokit is art supply product brand belonging to TLG In 2001, Colokit first appeared in | the market as the brand name for crayons After that, Colokit has been used for expanded products beyond crayons (crayons, plastic crayons, oil plasters) In 2011, Colokit was - officially named for Art Supplies category products

Colokit developed a wide range of product lines, with 8 different categories, including: —

Crayons, Color Pencils, Fiber Pens, Markers, Water Colors, Oil Pastels, Modeling Clay |

and Coloring Notebooks In terms of revenue contribution, Crayons, Color pencils and ị Fiber pens are the most important growth engines, contributing up to 80% of revenue as "

2013 (Source: TLG, Marketing Department)

d Colokit’s Branding Problems

There is a big gap between Colokit’s marketing objectives and current situation While — Colokit aspires to be the Number 1 Top of mind brand of art supply in Vietnam market by _

2018, the brand awareness is very low (under 10%) and it does not have clear brand vision - and brand identity to achieve that goal (Source: TLG, Marketing Department) With the | increasing competition from foreign imported brands and local counterparts, a strong | trusted brand is essential for Colokit to be outstanding among others and win customer loyalty It is also critical that Colokit creates a brand relationship with target customers and ' end users to maintain re-purchase and create word of mouth to attract new customers.

With the aforesaid reasons, brand building therefore becomes a critical issue for Colokit to | meet their marketing objective A complete branding strategy needs to be developed and | executed for Colokit to reach top of mind brand awareness and to maintain and expand — domestic market share as outlined in Development Strategy Orientation (2004-2016)

2 Objectives and Research Questions

a Objectives

-To analyze the external and internal environment of Colokit brand

-To evaluate Colokit’s branding strategy

-To propose brand identity framework, brand building strategy and communication strategy for Colokit brand

b Research Questions

The thesis aims to find answers for this question: “What is the ideal branding strategy to _ leverage Colokit brand of Thien Long Group Corporation in Vietnam?

It will be addressed through the following sub-questions:

1 Are there unmet needs and rising trends in art supply market?

2 What are brand positioning of Colokit’s competitors in the art supply category?

3 What are strengths and weaknesses of Colokit brand?

4 What is the status quo of Colokit brand awareness?

5 What are brand key core values, brand positioning and distinctive brand equity to be |

6 What is the brand strategy road map and communication strategy to become No.1 top of : mind brand of art supply in Vietnam by 2018?

3 Scope and Limitations

a Scope

This research paper is limited to the scope of brand building and communication strategy The implementation plan for branding Colokit is examined from the branding perspective — Therefore, product, pricing and distribution strategies will not be addressed

b Limitation

Due to the limited time and resources, the author only conducts four Colokit brand observations in Ho Chi Minh City However, to ensure relevance of data supporting branding, the author also studies market research reports on target consumer behaviors in both Ho Chi Minh City and Hanoi, the two biggest markets of Colokit Furthermore, data collection is limited to retail customers only

Market research for art supplies industry is very limited Whilst trying to source for latest data available, the author has utilized Tiep Thi Gia Dinh Consumer Research for TLG dated 2007 and AC Nielsen Market Research for TLG dated 2009 for research purpose in viewing that such research dedicated for TLG is very unique and information is still applicable in current context

Figure 2- Research methodology

Research design- In this thesis, branding strategies are studied in the context of art supply industry Furthermore, building Colokit brand is not isolated from its art supply industry and competitive environment The action plan for Colokit brand is realistic to be implemented and should be measureable, controllable and further developed in long run Research method- This thesis aims at improving branding strategy in the long-term for Colokit brand and developing a persuasive advertising message, therefore, qualitative and quantitative research will be collected In addition, -qualitative and quantitative research helps identify disadvantages and opportunities Colokit brand is facing.

Data collection- Action research depends mainly on observation and behavioral data (Walliman 2011, 12) In theoretical framework, published data are mainly used such as

books, business journals, articles, prior studies

When it comes to the empirical part, secondary and primary data are collected

Secondary data are taken from Thien Long research agencies (Nielsen Research 2009, Tiep Thi Gia Dinh consumer research 2007), published sources (books, newspapers articles, company’s reports, demographic reports, websites ) and commercial source (AC -

Nielsen, TNS, Cimigo, Kantar World Panel reports) :

Besides, our primary data is from the author’s observational trips in natural settings at 8 stationery shops, bookstores and supermarkets in Ho Chi Minh City (Fahasa, Lotte Mart, — Ton Duc Thang street stationery shops) in December 2014 The observation targets are : behaviors of shoppers and stationery retailers, how Colokit and other brands are displayed

Chapters II, IV and V make up the empirical part Chapter III provides analysis on | External and Internal environments On the one hand, it provides information on the - Market Overview, the Competitor Analysis, and Customer Insights On the other hand, it | zooms in Colokit’s market share and marketing mix to examine the Internal environment Chapter IV takes a closer look on Colokit’s marketing strategy, in term of marketing | objectives, marketing strategy and branding strategy Where branding is concerned, an analysis of current situation of brand identity, packaging, brand communication and brand awareness status is provided

Finally, Chapter V provides a SWOT analysis before concluding critical issues and | proposing solutions for brand identity framework, brand building and communication —

CHAPTER II- LITERATURE REVIEW

This chapter provides background

for Critical review and Recommen:

information of theoretical frameworks that will be used dation in subsequent chapters The specific problems areas are: STP (Segmentation, Targeting, and Positioning), Brand Identity and Brand

Market segmentation is the process of dividing a market into meaningful groups that are

base variables industry '

Geographic Nations, regions, “International vs domestic market segment

- Sex: male and female

-Income: Market segments for kids whose parents are class ABCDEF income

Psychographic Personality, motives, | ~ Motivations: visual art as a hobby (amateurs),

lifestyle and social for career (architect, designers, painters), to class develop aesthetic sense (public schools), to be

creative (international and private schools), to

have basic knowledge for food decoration,

flower arranging, embroider and home 2 decoration (professionals), art for psychological

and healing purposes

- Personality: professional, fun, creative, artistic, |

health concerned

, - Lifestyle: active, curious and keen to learn kids

via discovering the world; creative, grtistic and

professional trendsetter in art

Behavioral Occasions, benefits -Benefit sought: high/good/acceptable quality,

sought, applications, rich color, variety choice, safe to young kids, usage rate, user status, | easy to blend and reproduce new color, good | brand loyalty grip pen, premium vs affordable price,

Undifferentiat -Also known as mass marketing

ed Marketing -Creates the same marketing mix for broad market of potential buyers

-Ignores market segment differences and target the whole market with

one offer Focuses on what is common in the needs of consumers rather than on what is different

Differentiated | -Also known as segmented marketing

Marketing -Targets two or more distinct market segments with different

marketing mixes and design separate offers for each segments

Concentrated | -Also known as niche marketing

Marketing

- Focuses limited resources on serving niches that may be unimportant

to or overlooked by larger competitor

Y Colokit targets parents and educators of pre-school and school aged kids from 3-12 years old and amateur hobbyists, aged 17-22, but provides same marketing mix for all segments

Y Crayola targets little artists who want to get to grips with a pen for the first time, pre- school kids and schoolchildren who love drawing and experimenting, and all those | whose creativity knows no bounds and provides four different sub-brands: My First Crayola, Color Wonder, Model Magic, Silly Putty to tailor for each segment :

1.3 Positioning

a Definition

Positioning is defined as the location of your product in the mind of your customer Kotler (1994) refers positioning as “the unique selling proposition”

b Positioning and Marketing Mix

“As mentioned by Kotler (2012), positioning is not an isolated strategy It should be well- integrated with marketing mix (Product, Price, Place and Promotion) Both position and all elements of marketing mix should convey the same brand image to selected segmentation

Figure 5- A Taxonomy for Brand Perspectives

For the purpose of the thesis, the authors decided to use Keller’s (1998) definition of | brand, which consider brand from “output” perspective It is important to select customer’s | view point of brand for a consumable products like Colokit

From an ‘output’ perspective (consumer’s view point), a brand is considered as: the image |

in the consumers’ minds; a personality where the brand is perceived as having human j qualities; a relationship between the consumer and the brand; and as a way of adding value |

“A Brand is a set of mental associations, held by the consumer, which add the perceived : value of a product or service” (Keller, 1998)

“Brand identity includes values, aim and moral image that together constitute the essence |

of individuality that differentiate the brand Brand identity offers a possibility to position a brand and encourages strategic approach while managing it.” (Chernatony and Harris, - 2001)

“Brand identity involves many dimensions and any communication from the brand; |

whether it is formal or informal, verbal or non-verbal, should be syne with its brand -

identity.” (Kapferer, 2008)

For the purpose of this thesis, Brand identity is defined as “a set of distinct characteristics, applied in brand communication, making the brand meaningful and unique” In later section, Brand identity models will be reviewed to provide a holistic picture of | components forming part of brand identity

3 Models of Brand Identity

3.1 Kapferer’s (2004) Hexagonal Identity Prism Model

a What is Identity Prism?

Kapferer’s (2004) Hexagonal Identity Prism model conceptualizes brand identity along six — facets These are physique, personality, relationships, culture, self- image and reflection

Physique relates to the concrete, tangible or objective features of the brand encompassing |

product features, symbols and attributes

Personality considers how brands can be ‘humanized’ through ‘traits’ and so reveals the | brand’s character and attitude in a more emotionally orientated manner

Culture relates to the fundamental values the brand and / or organization stand for in ' addition to the norms that guide employees’ behavior to facilitate brand identity building Relationship: Considering identity in terms of a relationship takes a brand beyond a purely functional domain given that emotions are an intricate part of any relationship A relationship could be characterized as caring e.g Fairy or as providing status e.g

Reflection relates to the brand being an instrument for the individual to make a statement | about their actual or desired self Consequently, marketing communications reflecting the brand being used by a certain type of individual in a certain way plays a particularly important role The reason being such communications allow customers to imagine themselves using the good or service in a particular way or at a particular time |

Self-image relates to how the

personal brand evaluation

The “personality” facet of Kapferer’s

brand is viewed introspectively by the customer in terms of a

(2004) model draws heavily on Aaker’s (1997) brand

Sincerity Excitement Competence Sophistication Ruggedness

Down-to-earth Daring Reliable Upper class Outdoorsy

«family-oriented «trendy «reliable ~ upper-class «outdoorsy

small-town + daring + hard-working « glamorous «masculine

-down-to-carth «exciting «secure ~ good-looking = western

Honest Spirited Intelligent Charming Tough

« sincere «cool «intelligent «charming tough

~honest + spirited «technical «feminine ~rugged

«real ~ young - corporate «smooth

Wholesome Imaginative Successfal

+ original = unique «successful

« wholesome «imaginative «leader

- confident Cheerful Up-to-date

b Evaluation

While Kapferer’s (2004) Hexagonal Identity Prism Model is a useful analytic tool in detecting elements forming parts of brand identity, it is too abstract for external communication and execution of brand strategy

Unilever (2005)’s brand key model, as introduced in the next section, is a good strategic framework for brand planning and execution

3.2 Unilever’s (2005) Brand key model

a What is a Brand Key

A Brand Key establishes a framework and most importantly a common language for a brand

Since 1999, Unilever has used the Brand Key tool to capture brand positioning globally The Brand Key Vision is how the Brand Director captures the desired brand positioning

and makes clear inside the business what the brand stands for, what it will do, and how it

should be done in the next three to five years It helps ensure that all internal actions (HR management, recruitment & training, corporate communication ) and external executions (products, packs and promotions) are guided by the extent to which they contribute to the

desired brand positioning

In their Brand Planning Toolset, the marketing experts of Unilever explained elements of

by determine the essence of the brand (who you are, your values, personality, your USP, customer promise, etc.)

However it also has limitation The model overemphasizes the outside-in approach when |

“values and personality” features rather late in the model (stage 5) Hence, the model is - less suitable for brands where the in-side-out approach is relevant (such as service „ providers) as values and personality tend to serve as the basic principle of positioning 2

4, Summary

In this chapter, the author has reviewed theory frameworks that are necessary for analyzing ị and tackling empirical issues of Colokit brand These theories include: Segmentation, — Targeting, Positioning, Prism model, Brand Key Vision model, as well as basic cgncepts in | defining Brand and Brand Identity Under the light of theoretical frameworks, a critical — review of current situation of Colokit shall be furnished in the subsequent chapters III & — IV

CHAPTER HI- EXTERNAL AND INTERNAL ENVIRONMENT

YN stationery market grew at CAGR 12% 2007-2013

Figure 9- Viet Nam Stationery market size 2007-2013

Source: Thien Viet Security Research, 2013

According to Tiep Thi Gia Dinh Consumer Research 2007, art supplies products contribute

up to 18.8% of total spending for stationery products Using this relative proportion, market size of art supplies market in 2013 is estimated at VND 762 billion.

Percentage of stationery product categories

Ink pens, ball pens, fine point pens:

School and Education Tools

Coloring, drawing pens, crayons

Ink pens, water colors

White disks and tapes

Figure 10- Proportion of Art supplies in stationery consumption, 2007

Source: Tiep Thi Gia Dinh Consumer Research, 2007

1.2 Market Growth

According to Thien Viet Research 2013, the stationery market is forecasted to enjoy double digit growth in the next 5 years (2014-2019)

The growth is backed by the following drivers:

a The macro-economic shows slight recovery

The Gross Domestic Product (GDP) of Vietnam increases stable from 2007 up to now and — forecasted to increase 6.5% in 2015 (World Bank, 2014) This is a healthy indicator of | growth for all industries and especially for consumption products like stationery industry —

As basis needs items, TLG’s products in general and Colokit in particular are less likely be exposed to economic downturn than other sectors, hence it will enjoy relatively stable demand

VIETNAM GOP ANNUAL GROWTH RATE Percent change in Gross Domestic Product

2012 2012 2013 2013 2014 2014 2015

Figure 11 - Vietnam GDP annual growth rate 2012-2014

Source: World Bank, 2014

In addition, Vietnam economy also witnesses subsequent rise in GDP per capital, adjusted

by Purchasing Power Parity (PPP)', reaching an all-time high of 5124.64 USD in 2014 (Source: World Bank, 2014) Growing trend of GDP per capital will support consumers to increase their spending budget on products in general and stationery products in particular

VIETNAM GOP PER CAPITA PPP

5200

Figure 12- Vietnam GDP Per Capital PPP period 2007-2014

Source: World Bank, 2014

1 (The GDP per capita PPP is obtained by dividing the country’s gross domestic product, adjusted by purchasing power parity, by the total population).

b Growing number of pupils from kindergarten to lower secondary in education

wauma Total pupils

———Expon (Total pupils)

2 Competitive Analysis

2.1 Colokit’s Competitors

Colokit’s direct competitors are identified in both low cost segment (i.e China products, Mic) and value for money segment (i.e Hong Ha, Hong An) Similar to Colokit, competitors focus on price penetration and product development with less investment on branding activities Except for Colokit and Hong Ha, the rest of counterparts does not provide any key branding messages Brand positioning is rather generic and focusing on

In addition, foreign imported brand like Stabilo, Crayola and Maped are identified as Colokit’s indirect competitors Unlike local counterparts, these brands are positioned in premium segment with clear brand positioning and distinctive key communication messages

Below are summary of Colokit’s main competitors in terms of Product category, Price strategy and Brand strategy (Brand positioning, Key messages)

-Color pencil -Fiber pen/ Washable Marker

-Modeling clay -Crayon/ Plastic

Valued for money

a

“Valued for money art supply product for kids

Low cost art supply

“Paint your fascinating dreams”

“Unleash your creativity”

3 | Mic -Crayon Low Low cost art supply | No key messages

-Color pencil price product for kids -Fiber pen

-Modeling clay

4 | Hong -Crayon Valued Valued for money “Preserve tradition,

Ha -Color pencil for art supply product write the future”

-Fiber pen money for kids -Modeling clay

5 | Hong -Crayon Valued Valued for money No key messages

An -Color pencil for art supply product

money for kids

Stabilo | -*3 in 1 “pencil -Fiber pen Premium | “Ergonomic creative children “Stripe up your

color, water color, products which life”

crayon” make it easier for -Color pencil kindergarten and

- Oil Pastels school children to

learn hew to write”

7 | Crayola | -Crayon Premium | “Helping parents “Jump start your

-Color pencil and educators raise | creativity”

who will grow to be

inspired, original

adults.”

8 |Maped | Crayon Premium | “World leader of “Design, value,

Colored pencils office supplies and innovation."

school supplies”

Table 1-Colokit competitors’ product portfolio, price and brand strategy

In view of brand communication channels, Colokit and its competitors do not invest in above the line channels (TVCs, Print Ads) Most of them have utilized website and social media in their communication efforts’? While foreign imported brands actively roll out below the line activities (i.e promotion, activation, sponsorship, PR), local counterparts have little investment in these channels

Below table summarizes Colokit and its competitors’ communication activities 2013-2014

Social https://ww https://ww | hdlps/www.E https://www face

: w.facebook wfaccbook | acebook.com/

book.com/Maped media .com/Congt com/STAB | crayolavietna

World? fref=ts yCPVanPh ILO.VietNa | m/info (global) ongPhamH m.Official/ : ongHa

Website http//thie htp// | http//www hitp/Awww | www.crayola

www.maped.com

nlonggrou bgdpha | vpphongha stabilocom | com (global

(global website) p.com/san nmic.v } com.vn/ vol website)

: n/vi/pt pham/the- oducts/ http://www.m loai/dung- cat/dun ykingdom.co cu-my- cum m.vn/thuong- thuat.10.h huat hieu- tmi?lang= crayola.5.2110

vi - html?f=0 (partner e-

commerce)

n

TLG captures the llon’s share in Vietnam stationery market

Overall Market share 2013

Tien, Foreign 75 million SKUs/year

4 135 distributors 46,000 POS

cas 14- Colokit's Market share, Production Capacity and Distribution Network,

Source: Thien Viet Security Research, 2014

According to AC Nielsen Research for TLG (2009), Colokit captured 14 % market share

in year 2009 as shown in below figure

Figure 15- Colokit Market Share 2009

Source: AC Nielsen Research for TLG (2009)

Below are summary of Colokit’s market share for each category based on AC Nielsen Report, 2009 By using Relative market share ratio’, the author identify fiber pen captures

a strong market position, while the rest of product lines only capture weak or medium market position Hence, there is still room for Colokit to grow and develop in order to meet the market share objective

market share | competitor’s market share position

market share

Crayon

Washable Marker

Source: Compiled from AC Nielsen Research for TLG, 2009

Figure 16 -International School Research 2010

Source: Cimigo international school research, 2010

Secondly, the increasing concerns on quality and safety make customers more aware of choosing a trusted brand for their children (89% customer respondents according to Kantar World Panel, 2012)This attracts new market entrance, especially international

brands coming to Vietnam in recent years, thus the competition between domestic and foreign brands is getting more intense

Thirdly, there is enormous rise in Vietnam’s middle class segment and spending, estimated

to be 44 million people with consumption value of USD$310 billion in 2020 (Figure 17) 90% are willing to buy brands of high quality with higher price The growing segment also demands more from a brand in terms of quality, service and brand image 54% believes that high price is an indication of high quality (Kantar World Panel, 2012)

Figure 17 — Emerging Middle Class

Source: Nielsen Report Q4, 2013

Fourthly, for art products, key purchase driver is price and brand as indicated by 56% and 49% of respondents in Tiep Thi Gia Dinh Consumer Research 2007 respectively (Figure 18) The main source of reference is the user experience of the product as this product has frequent purchase throughout the year and other sources of reference are not facilitated in

2007 where the communications channels are still limited (Figure 19) This trend emphasizes the important of branding in driving sales and maintaining customers’ loyalty

6.8%

Figure 18 - Purchase driver of art products

Source: Tiep Thi Gia Dinh Consumer Research, 2007

Other info Relatives Experience source

17-22 a 23-35 E136 ~§5 E Above 56

Figure 19 - Source of reference on art products by age

Source: Tiep Thi Gia Dinh magazine research 2007

Lastly but not the least, advertising plays a key role in the consumer’s purchasing decision | (Figure 20) Internet is research tool before buying a product with 92% more likely to trust | recommendations from people they know and 63% more likely more to trust consumer

Z< ADVERTISING - A KEY ROLE ROLE IN CONSUMIER'S PURCHASING

Commercials will Increase my preference for brand

Sof repondonts who strongh// semeahat agree

Swit Nahin Gist hav đỆCd4rot Wiggin XikeáixG7 34 ? anee a ony :

Se A Space hor Gh oik orate BE ị % once a day fs

Figure 20 - Role of Advertising on consumer's purchasing decision

Source: 2013 VN Pocket reference book Nielsen

Purchase frequency is average 1 — 3 months depending on product durability (not easy

to break), usage frequency and orderliness of kids