79197032 clothing-and-footwear-diesel-fashion-company-premium-report
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7 June, 2009 VNMARKETRESEARCH
Author: Huynh Anh Thu
Tang Thi Thanh Ha
Nguyen Manh Luan
Diesel Fashion Company
Executive Summary
Since the economics growing, the demands of customers are also higher; for instance,
customer in the past they only need foods and clothes, but now, they require cuisine and
couture. That is why many services along with products in high quality were born. And
Diesel is among of those new brands, a strictly high fashion label for designing and
manufacturing jeans. Today, Diesel has also expanded its design in bags, watches, footwear,
sunglasses, fragrances, a special fashion channel for kid, brings more options to the
customers.
Late of year 2007, DAFC Group chose Diesel to be a new branch of it distribution channel
for luxury goods in Vietnam, and locate in Diamond Plaza. It has been almost two years since
Diesel has came to Vietnam, but the sales volume in this market is not as much as the
expectation. However the reason is not because consumers saturated with luxury brands or
foreign brands regardless its reputation, it is due to the inefficient marketing strategy. Take a
look at other competitors of Diesel such as CK jeans, Guess, or Levi‟s who target the same
market with Diesel, they are still expanding their branches simultaneously with building close
relationship with customers, Diesel seems to be quiet and stay outside this severse
marketplace.
Although Diesel is one of the worlds‟ most well-known design and fashion companies, it also
need a marketing plan to raise people awareness about it reputation, as well as its style and its
design. This marketing plan therefore made to meet the need of Diesel company, it includes
three main parts:
- Situation analysis: Using Porter‟s Five Forces theory to point out the threats of new
entrants, buyers, substitutes, suppliers and industry competitors. Besides that, it also
has a SWOT analysis to figure out strengths and weakness of this business.
- Marketing strategy: describe some strategies such as product strategy, pricing strategy,
or promotional strategy which can approve to Diesel Company.
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- Financial Analysis: which provide more details about the marketing plan for
implementing.
In comparing to other high label brands who are present in Vietnam longer than Diesel, the
amount of money that Diesel spend for marketing investment are just modest. The financial
statement supports a positive view for this business through the net profit, ROI figures, and
the cash flow.
With the marketing plan, the business needs only three months to achieve positive cash flow.
And after six months, the cumulative cash will also out of negative. Especially, the ROI after
one year is 21%, this is accepted number when operating a business.
Despite the founder of Diesel brand – Renzo Rosso said that “It‟s really not that important to
me to make a big sales”, it in fact has brought 3 million Euro in 1985 to 1 billion Euro in
2007 (Grosvenor, C. 2008). Surprisingly, the founder of this brand whose knew little about
advertising and business still can make Diesel become one of the most influential and
fashionable clothing manufacturers that its reputation widespread all over the word.
Here we have a specific marketing plan, combine with the Diesel fame, perhaps it enhance
the development of this business faster than any one can.
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Table of Contents I. Introduction ........................................................................................................................ 4
II. Management Team ............................................................................................................. 4
III. Situation Analysis .............................................................................................................. 5
Threat of New Entry: ............................................................................................................. 5
Threats of Substitute Products: .............................................................................................. 6
Power of Customers ............................................................................................................... 6
Power of Suppliers ................................................................................................................. 7
The intensity of competitive rivalry....................................................................................... 7
IV. SWOT Analysis.................................................................................................................. 9
V. Marketing Strategy........................................................................................................... 10
Product Strategy ................................................................................................................... 10
Pricing Strategy.................................................................................................................... 11
Promotion Strategy .............................................................................................................. 13
Customer Strategy................................................................................................................ 16
Distribution Strategy ............................................................................................................ 18
VI. Financial analysis ............................................................................................................. 19
Sales Forecast:...................................................................................................................... 19
Net profit prediction:............................................................................................................ 19
Financial Implementation: ................................................................................................... 21
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VII. CONCLUSION ................................................................................................................ 22
VIII.References ........................................................................................................................ 23
IX. Appendices....................................................................................................................... 24
I. Introduction
The aim of this marketing plan is to indicate the current situation of Diesel Company in the
Vietnam apparel market through industry overview, competitors, substitute products,
customers and suppliers. Besides that, it also provides some probable strategies which will
help the company to gain market share as well as increase the number of customers. The last
part is financial analysis which shows in detail the implementation of this plan.
II. Management Team
Mission:
Enhance the reputation of Diesel among the Vietnamese consumers as well as
increase the sales volume of Diesel Company by the end of year 2010.
Goals & Objectives:
- Lead Diesel to become a premier of jeans and fashion brand in Ho Chi Minh city, and
Hanoi.
- Expand the market share to 15% among the luxury brands such as CK jeans, Guess,
or Levi‟s.
- Increase the sales volume to 20% compare to the last year.
- Retain at least 90% of first time customer to be back, along with improve the loyal
customers‟ satisfaction.
Roles & Responsibilities:
- Choose appropriate communication tools such as magazines, website or hold events in
order to raise awareness about Diesel brand in consumers as well as spread out the
Diesel reputation through the market.
- Maintain close relationship with current customers along with attract new ones by the
promotion strategy. In addition, conducting a customer satisfaction surveys to
improve in service quality.
- Follow the marketing plan but being flexible to operate it in a proper way.
- Manage not only advertising and promotion campaign but also customer information.
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Communication:
- Mobile phone is a primary tool to contact among team members.
- Any official document is sent by email throughout the team.
- Conference is held at least twice a month to update information from every single
department.
Key Performance Indicators
- Percentage of new customers come to the store
- Percentage of customer loyalty
- Brand awareness in market as well as in customers‟ perception.
- The number of complaints.
III. Situation Analysis
By using the Porter‟s five forces, we will analyse this business contrast in a competitive
environment.
Threat of New Entry:
Barrier to entry: Due to the numerous of stores along with fashion company opening, Diesel
are currently in monopolistic market structure which is low concentration and low barrier to
entry.
Economics of scale: As long as Diesel belongs to DAFC group, its imported products
therefore are always bulk purchased and charged at lower tax rate, it is an advantage of
Source: Porter, M. E. 1979, „How competitive forces shape strategy‟, Harvard Business Review
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authentic Diesel products sold in Diesel Store which are diversified in style, and variety in
size compare to the small retail shops.
Distribution channel: Although choosing the same distribution channel with our competitors
such as CK jeans, Levi‟s, or Guess will increase our disadvantages, yet this is the shortest
way to communicate with our target customers. Therefore, we will distribute the products
only in huge plaza or central street such as Dong Khoi or Nguyen Hue due to the reason that
it is first place where people come to find a luxury brands, and the potential of customer
willing to spend money is higher than any other places.
Differentiation: Always fresh and creative, Diesel promise to bring new air to the fashion
industry in Vietnam through its products including jeans and casual clothing as well as
accessories.
Threats of Substitute Products:
Indeed, there are may be a thousand substitute products for casual clothing or accessories,
and may be nothing is substitute for it. For instances, people can pay millions VND for a
meal instead of buying a pair of jeans, so meals become substitute for clothing. However,
when you do need something to dress, you must buy clothing, not a meal anymore, and it
seems like nothing can replace clothing.
To simplify the confusedness, we look at the price of Diesel products which is usually cost
around two to three millions VND for a pair, thus there are a thousand of substitutes for it.
Hence, we have to convince customers that they are not buying just a jeans or an accessories,
but they are joining the group of stylish worldwide, and they are unique in that.
Power of Customers
Look at the figure from Consumer Confidence Survey conducted by Nielsen Company (
October 2009) stated that Vietnam is the fourth most confident country in the world which
confidence index jumped from 85 in April to 109 in October, while the global average just
raised 9 points and stands at 86. Especially, from the General Statistics Office of Vietnam,
they reported that textile, hats, footgear increase by 0.32%, rank number 5 among consumer
price index.
The most shocking news is from Ben Stocking (2007), the article concluded that “Vietnam
develops taste for Luxury goods” and it describes the Vietnam consumers spent a thousand of
dollar for their favourite things which is usually foreign brands. “Member s of the new
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generation want to enjoy life and pamper themselves with luxurious things”, said Van, who
has purchased five $ 1000 handbags at Louis Vuitton.
These all are perfect indicators to believe that Vietnam is a potential market for developing
luxurious brands like Diesel Company.
Another aspect is the power of customers in this business is strong due to the numerous of
suppliers existing. They have a variety of brands to choose, and it becomes a disadvantage for
the company to compete with others. However, the advantage of Diesel is that jeans is
general fashion for all ages and genders, it seems like the first choice of casual dress from
children to adult, sometime in middle-ages and elders. Like Cameron Diaz – famous actress
said “I‟m like every other woman: a closet full of clothes, but nothing to wear. So I wear
jeans”. Therefore, people still buy a pair of jeans even when they have dozen of it. As the
result, the demands for this kind of clothes are huge and uncountable.
Power of Suppliers
Because most of Diesel products are imported from overseas through an intermediaries
DAFC group, a company which has responsibility for importing and distributing for majority
of high-standard products like Burberry, or Diesel. Therefore, the suppliers of our company
are from overseas such as China, Hong Kong, Italia, or the U.S. In short, this company does
not have any supplier who takes the most powerful.
The intensity of competitive rivalry
This is the key factor of the competiveness of the industry, therefore, it is always place in the
center of the diagram. Take a general view at Vietnam market, sumptuous fashion brands
such as Louis Vuitton, Gucci, or CK jeans already have an official store in Vietnam, and
some other famous brands like Salvatore Ferragamo, Roberto Cavalli are present in luxurious
plaza, Diamond, Parkson for example. Those brands are direct rival to Diesel due to the same
target market that they attract. As a market research and market development (2008) cited that
in order to capture that attention of Vietnam‟s nouveux riche, the luxury brands almost spent
millions of marketing dollar (billions of VND) on this promising market. And there are still a
lot of foreign manufacturers tend to expand their market in Vietnam due to its recovery
economics and the power of consumer here.
Besides that, some Vietnam high quality brands like N&M, Gosto, An Phuoc, Vietten are also
indirect competitor of Diesel. Although their target customers are a little bit different from
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Diesel, these are potential consumer who easily switch to the foreign brands when their
income higher.
This table below will provide a broad of view to the fashion brands in Vietnam from the
domestic brands to the foreign one.
Brands Target customer
Price Ages Income
18 – 50 Low
Medium
100,000 – 300,000
VND
13 – 25 Medium
200,000 – 500,000
VND
25 - 50 Medium
High
600,000 – 1,000,000
VND
22 - 40 Medium
High
600, 000 – 1,500, 000
VND
18 – 35 Medium - High 500,000 – 5,000,000
VND
18 – 35 Medium – High
1,000,000 – 5,000,000
VND
18 – 35 Medium – High
High 1,000,000 – 5,000,000
30 -50 Medium – High
High
2,000,000 –
10,000,000 VND
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Above 25 High
Above 10,000,000
VND
Above 30 High Above 15,000,000
VND
IV. SWOT Analysis
SWOT Matrix
STRENGTHS
WEAKNESSES
OPPORTUNITIES
SO strategies:
Reinforce the strong brand
image among consumers.
Expanding outlet to meet the
demands of customers.
WO strategies:
Flexible with the marketing plan
Quickly respond to the changes
of environment as well as
customers‟ behaviors.
SFamous brand
name
Well-located
Professional management team
Close relationship with mass
communication tools
WLack of marketing
plan
High cost of structure
No factory in Vietnam
Slow respond to customer behavior
OFashion industry in
Vietnam is growing fast
Vietnam consumers are willing to spend
money prove their class
Jeans is demands for unlimited ages
and genders
TCompetitive
environment with a numberous of
rival
Counterfeit products in
Vietnam market
Tax on imported products is still
high
Brand loyalty of customers
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Raise people brand awareness.
THREATS
ST strategies:
Using mass media to raise
people loyalty.
Keep fresh and creative to
attract customer.
WT strategies:
Analyse the problem from inside
to outside.
Following but be flexible with
the marketing plan.
V. Marketing Strategy
Product Strategy
- Product attributes:
o Quality: Diesel is famous for its high fashion label in manufacturing jeans as well as
accessories. Although being born after Levi‟s, it quickly became one of the world‟s most
well-known design and fashion companies, indeed, it outsold Levi‟s in the U.S for the
“couture jeans” section of fashion in recent years (eSsortment 2007)
o Differentiation: “We don‟t sell clothes, we sell life style”, said Renzo Rosso. It usually
releases a striking though with its ad campaigns which is creative, mischievous, and
sometime controversial. Due to the reason that Diesel want to capture people attention,
curious and then desire for the products.
o Design: Unique style, distinction, creativity, and functionality are features that make
Diesel bold and daring besides practical and versatile
- Branding: Short and memorable, the name Diesel was chosen very carefully by Ranzo Rosso
– the CEO, and also the founder, because it is pronounced the same in every language.
- Product level:
o Core benefit: Meet a demand of dressing.
o Basic Product: jeans and casual clothes
o Expected product: Fashionable and high quality
o Augmented product: Free repairing services, free gift on birthday, or discount for regular
consumers.
o Potential Product: Create an unpredictable design is Diesel‟s forte. Maybe an astronautical
costume in the near future.
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- Product life cycle: Although Diesel are present in Vietnam long time ago in many retail
stores, it official store just opened for less than two years. Hence, we can conclude that Diesel
Vietnam is on the growth stage.
- Product diversification:
o Jeans and Casual wear: Including Diesel for Men, Diesel for Woman and Diesel for Kid.,
mainly focus on these products because these are the core products to attract consumer.
Especially, Diesel Black Gold, the new type of couture jeans from Diesel which makes it
differentiated from other casual fashion brands such as Gucci or CK jeans.
o Accessories: Also concentrate on these products because it is complimentary goods of
Diesel which also contribute to the sales volume of the store.
- Product classification: Currently, Diesel belongs to shopping product category which is
infrequently purchased and usually compared in price, quality, and style. The most intensive
rivals place in same category with Diesel are Gucci and CK jeans which charge the same
price and target the same type of customers.
- Packaging: Paper is encouraged to use rather than plastic, because most of customers are
from high- income and well-educated, therefore they will concentrate on every social aspect,
particularly on environment protection, the hot topic recently. In addition, free wrapping gift
service should be implemented, due to its small effort but unimaginably enhance customer
loyalty.
Pricing Strategy
There are two factor need to consider when setting price:
Source: Kotler et al 2005, „Pricing
Considerations and Approaches‟,
Principles of Marketing an Asia
perspective, Prentice Hall,
Singapore
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Internal Factors :
- Marketing Objectives:
o Become a leading of high fashion jeans brands particularly in Ho Chi Minh,
and Hanoi, and generally in Vietnam.
o High quality products with the high price
o Not only sell clothes, but sell life style.
- Marketing Mix Strategy:
Product: Besides provide tangible products to the customer, Diesel also provide
intangible product such as Fashion shows, Music Concerts, and some other branding
activities through year in order to keep close relationship with current customer as well as
expand Diesel reputation to the new one.
Price: Diesel already chose to develop in the high fashion label zone since the beginning
of opening. However, there will be some sale-off seasons for those whose has smaller
pocketbook to have the opportunity to experience the world coveted denim.
Place: Diesel will place only in luxury plazas such as Diamond, Parkson, or Paragon, and
central streets like Dong Khoi, Nguyen Hue where most of people from high-class usually
come to show off their wealthy.
Promotion: Using as much as mass communication to spread out Diesel reputation such
as advertising on newspapers, magazines, or websites, or public relations (Fashion show,
Music Concerts, Sponsors, Events). More details will be discussed later in the next part.
- Cost-based pricing: This tool will help Diesel calculate the number of units needs to sell
in order to cover all the cost.
For example:
Fixed Cost: 50,000,000 VND
Price per unit: 2,000,000 VND Break-Even Point = 50,000,000
= 33.33 units
Variable cost: 500,000 VND 2,000,000 – 500,000
External Factors:
- Competition-based pricing:
According to Kotler et all (2005), even the company set price to make profit, it must
consider the price elasticity and competitor‟s price. Therefore, the prices of Diesel
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product have to base on the common price of general high fashion brands. If the price set
too high, it is hard to attract customers. On the other hand, if the price set too low, Diesel
will lose its value in customer‟s mind. In short, price setting depends not only on the cost
of goods sold, but also on the competitor‟s price.
- Position map of Price level and Customer segmentation:
Based on the customer segmentation and the different price charge on customer from
variety competitors, currently Diesel place in fashion market as the graph shows below.
Promotion Strategy
- Personal Selling:
o Training course for shop-assistants to enhance their knowledge in dealing and
communicating with customers.
“First rule: Customer is never wrong
Second rule: If customer is wrong, look at the first rule.”
o Minimize complaints from customers in purchase as well as postpurchase.
Ages
Middle - ages
Price
Medium high
High
Teenagers
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o Assure the diversification in designs, and variety in size.
o Be a friendly and wise advisor for customers.
o Shop-assistants is also the representative for Diesel Company, keep good company
image in customer‟s mind, protect the reputation of company.
o Keep smiling and being friendly with customer all the time.
- Packaging:
o Professional design, simple but style.
o Using paper instead of plastic.
o Display appropriate information about the brand, the products as well as the branches
on it.
- Advertising:
This determinant is very important to be successful in the competitive environment. As
the report in Asia Market research conducted that luxury brands such as designer jewelry,
designer luggage, and other world class fashion brand are spending millions of marketing
dollars in Vietnam market to capture attention of nouveux riche. Fortunately, there are a
plentiful of ways to send a message to customer such as Newspapers, magazines, or
Internet (see more detail in an Appendix)
- Sales Promotion tools:
o Coupons:
Give a coupon to customer for the first time purchase at store in order
to encourage they come back.
Cooperating with magazines such as Stylish, Beauty, WomanWorld to
distribute coupons to further customers.
o Point-of-purchase promotions: is an effective way to keep customer loyal to the
brand. The customer‟s spending will be recorded in the computer system and they will
receive a V.I.P card when their score reach two 30 million VND, and Gold V.I.P card
when they reach to 50 million VND
o Contest: An approach to retain the customer relationship. In the contest, the sales
manager will have a communication with regular customer, listen to their opinion to
improve customer‟s services better simultaneously decrease the number of
complaints. Moreover, the contest is not only a chance to meet among company and
customers but also the opportunity for customer to have a new relationship with each
others such as sharing their product experience.
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o Advertising specialties: take a picture of celebrities using Diesel brand to convince the
customers that they are using the same brand as famous people do. Furthermore, using
striking ad campaigns to impress customer such as “How sexy you are?”, “Dare you
to do it”, or “Are you ready rock your life”.
o Premium: Give customer a small souvenir in addition to their main purchase, valuable
present depends on the amount of customer‟s spending.
Voucher for two persons at Sheraton buffet
Voucher for skin care at Shiseido Spa
Little ear-rings
Glass souvenirs, ect.
- Public Relations tools:
o Special events: In order to spread out brand awareness among customer in a short but
effective way is hold an event such as Fashion show, Music Contest. (See more detail
in Appendix)
o Mobile marketing: Inform customers when new items arrive or any event held in the
next month.
o Public service activities: such as sponsor for a charity program.
- Budget for Promotion: (see more detail in Appendix)
Promotional Mix Unit Cost Units/year Total Cost
Print Advertising (thousand VND)
(Thousand VND)
Beauty Magazine 40,000 2 80,000
Stylish Magazine 35,000 2 70,000
Saigon Entrepreneur Weekend 15,000 6 90,000
Heriatage Fashion 30,000 4 120,000
Total Print Advertising
360,000
Promotional Campaign
Coupons Distribution 500 200 100,000
V.I.P Card 10 100 1,000
Contest helding 5,000 12 60,000
Premiums 1,000 100 100,000
Total Promotional Campaign
261,000
Public Relation
Fashion show 300,000 2 600,000
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Music Contest 800,000 1 800,000
Sponsor 200,000 2 400,000
Total Samples
1,800,000
Other
mobile marketing 0.50 20,000 10,000
Total Promotional Costs 2,431,000
Customer Strategy
- Customer Behavior
Diesel target market is for young people included Vietnamese, foreigner and tourists.
Understanding the customers‟ needs is very important to provide them the best service
and the final result is sales volume will increase. There are four factor affect the customer
behavior such as culture, society, personal and psychological.
Factors Effect customers’ behavior
Culture: Vietnam is still a traditional country where many people have not accepted the
Diesel design – especially street style. However, the new generation, the target customers
are more open-minded to the new fashion trend, and easy to adopt it.
Society: this factor has important impact on the sales, especially in the group. People in
the group or in a family usually influence each other. Besides that, celebrities also has a
deep influence on the fashion, some people love to imitate the same as their idol or try to
look similar to someone. Understanding about this, Diesel asks some celebrities to
endorse their products.
7 June, 2009 VNMARKETRESEARCH
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Personal: The fashionable people mostly purchase clothes depends on their life style and
characteristic; this is the reason why every Diesel products has different designs and
colors. Actually, everyone has different taste of fashion, some like simple design while
the other like colourful with special feature designs. Diesel‟s design has both line of the
product, simple but different, classical but fashionable.
On the other hand, people have good occupation with high salary will be able to spend
more money for satisfying themselves. They do not care much about the price but the
service is required in perfectly.
Psychological: When walking into a store, being treated as a Very Important Person, the
customers find hard to leave without buying any stuff. Realizing this fact, the sale-
assistants should have some skills to convince people that they are important to the shop,
and they are truly important if they become a consumer of this brand. Besides that, with
some type of customers, who seek for a free gift or high brand product with a cheaper
price, the sale-assistant have to introduce a suitable one for them. Because selling
something is better than selling nothing. By understanding the customers‟ psychology,
customer‟s service will be improve much.
- Customer’s buying decision process
Need Recognition Information Search Evaluation of Alternatives Purchase
Decision Post Purchase Evaluation (Adopted from Kotler et al 2005)
Step 1: Need Recognition: Fashion is a huge topic and there is always a need for clothes.
The most important is how the brand can get the most attention from the customer and
build up a good image in the customers‟ mind. Diesel focus on advertising to get the
customer‟s attention and maintaining the quality to get the customers‟ loyalty after using
the product to assure that they will come back. On another hand, Diesel has already built
a strong reputation in the fashion industry, people come to Diesel‟s shop not just because
the product but also because the Diesel Brand.
Step 2: Information Search : Diesel is very popular and famous on over the world, and
the information is available in internet, magazines, therefore customers can easy search
for the product that they want. Moreover, they can ask experience from friends, colleges,
or shop assistant before buying items.
- Step 3: Evaluation of Alternatives: There are many fashion brands available in the
market, so the customers have many choices to purchase what they want. We build up our
image in the customer‟s mind as the high quality product, fashionable and high special
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feature design. Diesel provides variety products in order to satisfy the customer‟s
demands.
- Step 4: Purchase decision: There are other factors can affect customer‟s decision, beside
the brand and the products, is the service. Diesel will provide the best service during the
customer‟s purchasing to make the customer feel the most comfortable.
- Step 5: Post Purchase Evaluation: In case of the product and service of Diesel do not
meet the customer‟s needs and expectations. This may cause a negative effect to the sale
of Diesel and the brand. Diesel keep doing survey and market search to minimize this risk
and maintaining the quality and service.
Distribution Strategy
- Distribution Channel
According to the chart above, Diesel‟s products are imported from Hongkong and Italy
usually by ship and plane. In Vietnam, transportation is mostly by truck from port to the
warehouse, and then from warehouse, it distribute to the department stores and outlets. Diesel
Company has two warehouse located in Hanoi and Ho Chi Minh city.
- Warehouse
In HCMC: 143 Tran Nao, Dict 2, HCMC, Vietnam
Customer
Distributon
Department Stores Diesel outlets
Warehouse
Hanoi Warehouse Ho Chi Minh Warehouse
Imported products
Diesel factory in HongKong Diesel factory in Italy
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In Hanoi: 49 Quang Trung, Ba Dinh, Hanoi
Diesel Company currently has 6 stores in the main area in Ho Chi Minh city and Ha Noi.
o Ho Chi Minh is included Diamond Department Store, Parkson Saigon Tourist Plaza,
Parkson Hung Vuong Plaza
o Ha Noi such as Parkson Viet Tower, Trang Tien Plaza, Vincom Tower. In addtion,
Diesel should hire a store in main streets such as Dong Khoi, Nguyen Hue, or Le Loi. In fact,
location is one of the most important element and difficulty for every brand now because the
renting cost in the centre is very expensive and sacred to find.
VI. Financial analysis
Sales Forecast:
According to the figures in my
survey, we conclude that time most
time people go to shopping is the
end of the year, from October to
December, especially December,
due to the most holidays gather in
this time (Halloween, Christmas,
and New years).
Because January and
February are the first time
we launch this marketing
plan, thus, the effective of
it cannot be seen
immediately. But, for the
following months, the
number of customers will
be positive growth.
Net profit prediction:
Although we spent a
(500.000)
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
1 2 3 4 5 6 7 8 9 10 11 12 13
Net profit compare to Marketing Investment
Advertising Sales promotion Net prof it
60 60 90
120 120 150 150 150
180 180 180 210
1 2 3 4 5 6 7 8 9 10 11 12
Sales forcast
Customers per month
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billion of VND for marketing investment, this is just a modest compare to the profit we earn
later. Except month 8, when we held a fashion show, it takes a large amount of money, the
rest spending are normally in this industry.
7 June, 2009 VNMARKETRESEARCH
Financial Implementation:
Before Mon 1 Mon 2 Mon 3 Mon 4 Mon 5 Mon 6 Mon 7 Mon 8 Mon 9 Mon 10 Mon 11 Mon 12 Total
Customer /day
2
2
3
4
4
5
5
5
6
6
6
7
7
1,860
Clothes 3,000
3,000
4,000
5,000
5,000
6,000
7,000
8,000
9,000
9,000
9,000
9,000
10,000
Accessories
2,000
4,000
4,000
4,000
5,000
5,000
6,500
7,000
8,000
8,500
9,000
9,000
9,000
Sales/customer
5,000
7,000
8,000
9,000
10,000
11,000
13,500
15,000
17,000
17,500
18,000
18,000
19,000
Total income/month
300,000
420,000
720,000
1,080,000
1,200,000
1,650,000
2,025,000
2,250,000
3,060,000
3,150,000
3,240,000
3,780,000
3,990,000
805,950,000
COGS
-
Clothes (40%)
1,200
1,200
1,600
2,000
2,000
2,400
2,800
3,200
3,600
3,600
3,600
3,600
4,000
Accessories (30%)
600
1,200
1,200
1,200
1,500
1,500
1,950
2,100
2,400
2,550
2,700
2,700
2,700
Total COGS
108,000
144,000
252,000
384,000
420,000
585,000
712,500
795,000
1,080,000
1,107,000
1,134,000
1,323,000
1,407,000
283,545,000
Gross Profit
192,000
276,000
468,000
696,000
780,000
1,065,000
1,312,500
1,455,000
1,980,000
2,043,000
2,106,000
2,457,000
2,583,000
522,405,000
Expense
-
Advertising 30,000
30,000
15,000
30,000
55,000
35,000
15,000
30,000
15,000
30,000
55,000
35,000
15,000
11,700,000
Sales promotion
16,100
47,200
310,550
230,550
10,600
30,550
810,600
10,550
531,050
11,050
16,100
46,100
62,130,000
Renting
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
78,000,000
Franchise fee (5%)
15,000
21,000
36,000
54,000
60,000
82,500
101,250
112,500
153,000
157,500
162,000
189,000
199,500
40,297,500
Market research
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
1,950,000
Office expense 10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
3,900,000
Warehouse
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
1,950,000
Salary
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
39,000,000
7 June, 2009 VNMARKETRESEARCH
22
Telephone
2,000
3,000
4,000
2,500
2,500
2,500
2,500
2,500
2,500
3,000
3,000
3,000
3,000
1,080,000
Utilities (7%) 21,000
29,400
50,400
75,600
84,000
115,500
141,750
157,500
214,200
220,500
226,800
264,600
279,300
56,416,500
Miscellaneous (10%)
30,000
42,000
72,000
108,000
120,000
165,000
202,500
225,000
306,000
315,000
324,000
378,000
399,000
80,595,000
Insurance
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
7,800,000
Total Expense
438,000
481,500
564,600
920,650
892,050
751,100
833,550
1,678,100
1,041,250
1,597,050
1,121,850
1,225,700
1,281,900
384,819,000
Profit before Tax
(138,000)
(61,500)
155,400
159,350
307,950
898,900
1,191,450
571,900
2,018,750
1,552,950
2,118,150
2,554,300
2,708,100
421,131,000
Income Tax (10%) - - 15,540
15,935
30,795
89,890
119,145
57,190
201,875
155,295
211,815
255,430
270,810
42,711,600
Net profit
(138,000)
(61,500)
139,860
143,415
277,155
809,010
1,072,305
514,710
1,816,875
1,397,655
1,906,335
2,298,870
2,437,290
378,419,400
Marketing Investment
2,431,000
Cash Flow
(2,431,000)
(61,500)
139,860
143,415
277,155
809,010
1,072,305
514,710
1,816,875
1,397,655
1,906,335
2,298,870
2,437,290
ROI 21%
Culmulative
(2,431,000)
(2,492,500)
(2,352,640)
(2,209,225)
(1,932,070)
(1,123,060)
(50,755)
463,955
2,280,830
3,678,485
5,584,820
7,883,690
10,320,980
VII. CONCLUSION
To sum up, we have a material is high quality products from a luxury brand, and now we have a process to make it become leading brand of
fashion clothes in Vietnam. The final step is starting, implementing this marketing plan into real, and waiting for its results.
7 June, 2009 VNMARKETRESEARCH
VIII. References
1. Business Source Premier 2008, „Vietnam‟s luxury goods market‟, Market:Asia
Pacific, EBSCOhost.
2. General Statistics Office of Vietnam, Social-economic situation in 11 months of
2009, viewed on 20 December 2009.
<http://www.gso.gov.vn/default.aspx?tabid=622&ItemID=9383 >
3. Grosvenor, C. 2008, „Denim from Italy: Diesel‟, Diesel Italy, viewed on 27
December 2009 < http://www.lifeinitaly.com/fashion/diesel.asp>
4. Kotler, P., Armstrong, G., Ang, S.H., Leong, S.M., Tan, C.T. & Tse, D.K.,
2005, Principles of Marketing an Asian perspective, Prentice Hall, Singapore
5. Nielsen Company 2009, Consumer Confidence Survey, viewed on 20 December
2009. <http://vn.nielsen.com/site/index.shtml>
6. Stocking, B 2007, „Vietnam Develops Taste Luxury Goods‟, The Washington
Post, viewed on 24 December 2009 <http://www.washingtonpost.com/wp-
dyn/content/article/2007/09/23/AR2007092300319_2.html>
7 June, 2009 VNMARKETRESEARCH
24
IX. Appendices
1. Advertisement:
• Objective: Advertisment is very import to launch new products, build and maintain
the brand image in Vietnam. On another hand this is the fastest way to approach to the
customers and to boost business and grow market share.
• Magazines: Focus on premium fashion magazines such as Dep, Phong Cach, Doanh
Nhan Sai Gon Cuoi Tuan, Her World, Heritage
Magazine Information
DEP MAGAZINE (Beauty)
• The most popular magazine in Vietnam (over 10 years)
• Circulation: 49,000 copies/ Monthly
• Target readers: Urban middle- and upper-class, aged from 18 to 45.
• Civil servant & office staff: 55%. Housewife: 25%. Overseas: 10%. Student & others:
10%. Single female aged 20-34, well educated with high income.
• Content: Nice pictures and design with in-depth feature stories, focusing on fashion,
women‟s issues, beauty, etc…
• Dep Fashion Show is organized every year in both Hanoi and Ho Chi Minh City to
build the image for this magazine from 2003.
• Current advertisers: Estee Lauder, Lancôme, Shiseido, Louis Vuitton, Hermès,
Salvatore Ferragamo, Bally, Gucci, Burberry, …
PHONG CACH MAGAZINE (Stylish)
• Circulation: 40,000 copies/Monthly
• Target readers: Vietnam‟s trendy and successful women.
Age Group of 25-45
• Content: in-depth women‟s lifestyle topics, more dynamic and up-market design and
more lifestyle information for an even more trendy target market with high income
and education. It features high fashion, beauty, celebrities, entertainment news,…
• Phong Cach Night is organized every year to build this magazine‟s image from 2007.
• Current advertisers: Lancôme, Shiseido, Louis Vuitton, Hermès, Salvatore Ferragamo,
Bally, Gucci, Burberry, Omega, Menard, OHUI,…
PHONG CACH MAGAZINE (Stylish)
• Circulation: 40,000 copies/Monthly
• Target readers: Vietnam‟s trendy and successful women.
7 June, 2009 VNMARKETRESEARCH
25
Age Group of 25-45
• Content: in-depth women‟s lifestyle topics, more dynamic and up-market design and
more lifestyle information for an even more trendy target market with high income
and education. It features high fashion, beauty, celebrities, ente rtainment news,…
• Phong Cach Night is organized every year to build this magazine‟s image from 2007.
• Current advertisers: Lancôme, Shiseido, Louis Vuitton, Hermès, Salvatore Ferragamo,
Bally, Gucci, Burberry, Omega, Menard, OHUI,…
DOANH NHAN SAI GON CUOI TUAN MAGAZINE
(Weekend Saigon Entrepreneur)
• The most popular magazine for businesspersons in Ho Chi Minh City.
• Circulation: 40,000 copies/Weekly (every Friday)
• Target readers: businesspersons, senior officers.
• Content: Economic & Social Panorama, case studies, premium tours, fashion &
accessories, spa, beauty, health, entertainment, car, etc…
• Current advertisers: Louis Vuitton, Hermès, Salvatore Ferragamo, Bally, Gucci,
Burberry, Omega, Menard, OHUI, …
HERITAGE FASHION MAGAZINE
• Circulation: 72,000 copies/every two months (odd month)
• Target readers: High income Vietnamese and foreign travelers, professional, active,
trendy persons. This is in- flight magazine of Vietnam Airlines.
• Content: Vietnamese & international lifestyle, culture, fashion trend, beauty.
• Golf Tournament is organized to build this magazine‟s image.
• Current advertisers: Gucci, Bally, Louis Vuitton, Menard, OHUI…
SANH DIEU MAGAZINE (Gourmet)
• Circulation: 40,000 copies/ monthly
• Target readers: Civil servant & office staff, well educated with high income. Active
and trendy persons.
• Content: Vietnamese & international lifestyle, culture, fashion trend, cars, tourism,
beauty, art, what‟s hot.
• Current advertisers: Louis Vuitton, Bally, Hermes, Burberry, Cloé, Pinko, Nine West,
Menard, Salvatore Ferragamo, Tudor, Rolex, Lacoste…
TUOI TRE NEWSPAPER (The Youth)
• Circulation: 500,000 copies / everyday
• Target readers: Almost all groups of readers
7 June, 2009 VNMARKETRESEARCH
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• Content: Current news, Government programs, market news, Health, World news,
Economic news (business, finance, investment stock market, property market, etc),
the young‟s life, culture, art, entertainment, book, sport, law and life, etc.
• Current advertisers: Fashion, FMCG, Telecommunication
2. Marketing activities:
Promotion and Event
Event :
New shop opening event and event introduce new season collection with jeans,
clothing and accessories.
Inviting potential customers, Model, celebrities and media, TV crew, reporter.. to new
shop opening and to the in house show. Diesel will sponsor for the celebrities their clothes to
wear in the event. Every guests come to the events will be given a sticke r with Disel logo.
This is the way to make the goos relationship and get closer to the customer.
Sales Promotion:
Sales promotion during special days ( such as Gift With Purchase program on Woman
Day, Year-end sales…)
Press Conference:
- Model and celebrities to introduce new season collection, join in party..
- Cooperating with other activities and sponsors for fashion shows and talk shows.
Example: Dep Fahion show, Phong cach va cuoc song ( Talk show “Style and Life”),
Thoi Trang va cuoc song (Fashion and life).
- Find co-sponsor for the event that they are also have the same target customer.
7 June, 2009 VNMARKETRESEARCH
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Banner, show window :
Banner will be placed in The department store, out side department store and in front of
the shops of Diesel. The pictures will be change every season or month following the new
collection of Diesel in other to draw the customers‟ attention.
Loyalty Program:
- Offer a loyalty program.
- Special occasions for VIP customers: (i.e.) Christmas card, Gift with purchase, Gala
dinner for VIP customers.
- VIP card 10% discount for loyal customer and celebrites.
- Private sale before the sale season or clearance for the loyalty customers.
3. Public Relation Plan
- New collection and press release on magazine, photo shooting activities, Diesel with
celebrities…to make target customers know more about this brand.
- Target 60 free pages per year on Dep, Phong Cach, Her World, Doanh Nhan Sai Gon
Cuoi Tuan.
- Sponsorship Music Gala
- Personal stylist for loyal customers, keep updating the new fashion trends and new
collection of Diesel, mostly for the celebrities and business people who don‟t have
much time to shop and care about their style. Every sale person in Diesel will
responsible for a group of customer to update them the news of fashion and give them
a special treatment when they shop in our stores in other to make the customer feel the
most comfortable.
7 June, 2009 VNMARKETRESEARCH
4. Promotion schedule:
Mon 1 Mon 2 Mon 3 Mon 4 Mon 5 Mon 6 Mon 7 Mon 8 Mon 9
Mon
10
Mon
11
Mon
12
Beauty Magazine 40,000 40,000
Stylish Magazine 35,000 35,000 Saigon Entrepreneur
Weekend 15,000 15,000 15,000 15,000 15,000 15,000
Heriatage Fashion 30,000 30,000 30,000 30,000 Coupons distribution 10,000 20,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 20,000 V.I.P Card 100 200 50 50 100 50 100 50 50 50 100 100
Contest Helding 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Premiums Expense 20,000 20000 20,000 20,000 20,000 Fashion Show 300,000 300,000
Music Contest 800,000 Sponsor Event 200,000 200,000 Mobile Marketing 1,000 2,000 500 500 500 500 500 500 1,000 1,000 1,000 1,000
Advertising 30,000 15,000 30,000 55,000 35,000 15,000 30,000 15,000 30,000 55,000 35,000 15,000 360,000
Sales promotion 16,100 47,200 310,550 230,550 10,600 30,550 810,600 10,550 531,050 11,050 16,100 46,100 2,071,000
Total 46,100 62,200 340,550 285,550 45,600 45,550 840,600 25,550 561,050 66,050 51,100 61,100 2,431,000
7 June, 2009 VNMARKETRESEARCH
5. Survey form:
Dear friends,
This survey is going to be used for my personal research only, all the information about you
will be confidential. Please answer it honestly. Thank for your help!
1. How old are you?
2. How often do you go for shopping?
Frequently Sometime Occasionally
3. How much do you spend for shopping a month?
Under 5 million VND
Above 5 million VND
4. Which brand do you prefer?
Vietnamese brand Foreign brand
5. Where is the first place you go for shopping?
Retail shops
Department stores (Diamond, Parkson, etc.)
Oulets
6. Which time of year you usually go shopping?
Jan – April
May – Sep
Oct - Dec