Caribbean Breeze: Market Entry Plan for Vietnam

By: Samantha Turner

Miranda Fyfe

Ashley Simon

Frank Perryman

Table of Contents

Cover Page……………………………………………………………………………………......1

Table of contents………………………………………………………………………………....2

Phase 1………………………………………………………….…………………………………3

I. Vietnam Environmental Scanning.…………………………………………......3

II. Positioning Strategy for Entering the Vietnam Market...………………….....4

Phase 2 ………………………………………...………………………………………………….5

I. Vietnam Market Entry Plan for Caribbean Breeze……...……………………5

i. Market Entry Objectives…………………………………………..5

ii. Tactical Programs & Strategies……………………………….......6

a. Product………………………………………………….....6b. Price……………………………………………………….8c. Promotion…………………………………………………9d. Distribution……………………………………………....10

Work Cited…..….………………………………………………………………………………13

2 | P a g e

Phase 1

Vietnam Environmental Scanning

Due to Vietnam’s sustainable yet rapid economic growth for the market of skin sun care, the potential for market growth has been increasing by 15% since 2009. For Caribbean Breeze to effectively penetrate Vietnam’s diversified market and its consumers the company must focus on the following areas:

Geographical Cultural Political Economical Regulations Consumer Behavior Competition

Geographical

Vietnam is located in southeastern Asia, bordering the Gulf of Thailand. Due to Vietnam’s location the climate is tropical and has monsoons. The rainy seasons are mid-May to mid-September with a dry season from mid-October to mid-March.

Cultural

Vietnamese culture is ascetically pleased with light skin complexions and their major languages are Vietnamese, French, Chinese, Russian, and English. Society focuses on increasing higher levels of education with an average literacy rate of 89.76%.

Political

Vietnam is a social republic led by the Communist Party which controls political expression. This has caused Vietnam to experience small-scale protests from groups against the communist parties control over land-use, political space, and the resolving disputes.

Economical

Vietnam’s economy is blooming with a GDP of 171.39 billion while the GDP growth rate is 6.19% per year. Vietnam’s a main income level is lower middle causing the average household disposable income little room for discretionary spending. However, tourism is very prominent and Vietnamese incomes continue to rise.

Regulations

3 | P a g e

Vietnam’s regulation for skin sun care based on the trading cosmetics through the ASEAN requires less barriers of entry for regulations on contents and labeling of product like that of the U.S. Food and Drug Administration.

Consumer Behavior

Vietnam’s accepts tourism since Vietnam’s GDP increases from tourists shopping in various markets. Since Vietnam markets small in size, product sizes are typically smaller. For sunscreen, most of the domestic products feature sunscreen with skin whitening features aimed at Vietnamese ascetics so tanning products are not very popular.

Competition

The main competition Vietnam is Nivea, Sunplay, and a few other brands from America , Thailand, and France. Most competition is from international brands, since domestic sun care brands lack the marketing dollars. However, domestic brands are more aware of the habits of local women and utilize supported raw materials.

Positioning Strategy for Entering the Vietnam Market

Based on the previously conducted environmental scanning Caribbean Breezes positioning strategies are to express Caribbean Breeze’s product features/benefits (reason to buy),various product lines (sunscreen, after sun, lip balm), packaging that creates convenience for travel, and an emphasis on the product being made in the U.S. to imply the Caribbean Breeze products are high quality, safe, and reliable. Caribbean Breeze will target its positioning efforts towards the target market of the local Vietnam market located near the beach and tourists visiting Vietnam. This market consists of males and females ages 21 to 50, which are health conscious and active outdoors enthusiasts.

Since these consumers focus on attractions in Vietnam such as beaches, local and international tours, walking, bicycling, and kayaking, Caribbean Breeze will position itself as a product that fills the need for the health conscious and are active outdoors enthusiasts who require sun protection that has organic ingredients and is high quality for an affordable price. By Caribbean Breeze emphasizing the product features of their Sunscreen/Lip Balms organic ingredients, SPF 30+ protection, 80 minutes of water resistance, USA manufactured, and UVA and UVB protection, Caribbean Breezes provides the target market the brand image that Caribbean Breeze is high quality, safe, and reliable. The product feature for the after sun lotions and gels also emphasize these features but focuses on the benefits of providing relief, moisturizers, and added vitamins that also show Caribbean Breeze as high quality, safe, and reliable. Another positioning strategy is to show Caribbean Breeze’s products as convenient by providing smaller sized products and varied types as applicators such as sprays, lotions, and gels. Also the products labels will remain the same in design, but the product will display translations of Vietnamese and English upon the containers so that locals and tourists find it convenient for reading the products label.

Caribbean Breeze will focus these positioning efforts in print and outdoor display promotions in areas such as Ho Chi Minh City, Hanoi, Nha Trang, Danang, Doc Let, Phan Thiet, and other beaches as well as airport located near the coast of Vietnam. In these areas, Caribbean Breeze will focus its efforts to position the products by creating discounts and incentives for retailors such as resorts, hotels, convenience stores, and shopping markets that are near these local and tourists. Also for positioning

4 | P a g e

purposes, Caribbean Breeze will use such promotional activities as advertisements in plane magazines, print ads, outdoor promotions, and promotional inserts in these areas, which will cause an increase in brand awareness and create incentives for retailors to sell Caribbean Breeze.Phase 2

Vietnam Market Entry Plan for Caribbean Breeze

I. Market Entry Objectives

Caribbean Breeze’s main market entry objectives for the Vietnam Market are increasing brand image, implementing price penetration strategies to create price advantage over competitors, increase market share, and adapt product packaging.

For product objectives, Caribbean Breeze will focus on positioning the product lines of Sunscreen (spays and lotions), After Sun (lotion and gel), and Lip Balm. Caribbean Breeze will also focus product objectives on package size adaptation to 8-16oz, labels being in Vietnamese and English, and focusing on the products health benefits and convenience features. Caribbean Breeze’s goal for the product is to effectively communicate health and convenience with the products and its features so that Caribbean Breeze’s product image is known as high quality, safe, and reliable.

For pricing objectives, Caribbean Breeze wants to utilize value-based pricing for Sunscreen and After Sun lotions and gels. While for Lip balm Caribbean Breeze will utilize penetration pricing. This will allow Caribbean Breeze Sunscreen and After Sun products to be priced so that it reinstalls Caribbean Breeze products as high quality, safety, and reliability. However, for the Lip Balm since the product is low in price to create penetration pricing Caribbean Breeze focuses on the convenience based on the price of the product. Also Caribbean Breeze’s goal is to focus on converting prices to the local currency of the Dong so that Caribbean Breeze’s prices are competitive towards their local competitors. However, Caribbean Breeze also plans on acquiring its profits in the form of credit so that Caribbean Breeze will retain as much profit as possible in order to cover the costs of exporting containers and local Vietnam transportation.

For promotional objectives, Caribbean Breeze will concentrate on increasing market reach by informing our target markets about product features/benefits (reason to buy),various product lines (sunscreen, after sun, lip balm), packaging that creates convenience for travel, and an emphasis on the product being made in the U.S. to imply the Caribbean Breeze products are high quality, safe, and reliable. It is Caribbean Breezes objective to inform tourists and locals about the product features with the use of print ads, posters, product displays, package deals, outdoor promotions, and trade promotions. In these promotions Caribbean Breeze’s goal is to present the brand and the products health benefits of protection with 30+ SPF, broad spectrum UVA and UVB protection, 80 minutes of water resistance, and the products organic ingredients. Promotions will emphasize the brand image as a USA made product to increase the brand images credibility and show the brand as a reliable high quality USA based product.

For distribution, the main objectives Caribbean Breeze will try to accomplish is coordinating distribution activities in a way that creates efficient levels of communication and transportation through the supply chain in order to cut down the costs of distribution. To do this Caribbean Breeze will implement strategies of establishing product shipments from the US based factory to Ho Chi Minh City, where Caribbean Breeze then wants to establish local distribution by hiring agents, and creating a strategic alliance between Caribbean Breeze, distribution intermediaries, and retailors. Also in order distribute the products to the sellers, Caribbean

5 | P a g e

Breeze’s goal is to use the relationships with its agents and intermediaries to help distribute the products by having them use sales, product discounts, and incentives to get retailors to want to sell Caribbean Breeze products

II. Tactical Programs & Activates

a) Product

The types of products Caribbean Breeze will sell are Sunscreen (spray and lotion), after sun care (lotion and gel), and Lip Balm, which will be positioned as high quality, safe, and reliable towards the Vietnam locals and tourists that are health conscious and active outdoors enthusiasts. Caribbean Breezes tactical programs and activates for the product are as follows.

Goal: Position Caribbean Breeze products (Sunscreen, After Sun, Lip Balm) as a high quality, safe, and reliable product.

Program: Emphasize product features (Further described in the FAB Table)

Activity: The Sunscreen (sprays and lotions) and Lip Balms labels will list the features of organic ingredients, SPF 30+, UVA/UVB protection, and a “Made in the US” logo to show consumers the products provide high quality, safety, and reliability.

Activity: The After Sun Care lotion and gel labels will list the organic ingredients, such as aloe Vera, mint extract, and vitamins, and the features that the product provides skin relief while moisturizing the skin to show the products high quality and reliability.

6 | P a g e

Program: Emphasize health benefits and convenience

Activity: Labeling the features of organic ingredients, SPF 30+, UVA/UVB protection, and a “Made in the US” logo on the package, Caribbean Breeze will emphasize the products ability to provide a product that protects and benefits in the maintenance of skin health

Activity: For convenience, Caribbean Breeze products will come in different types of applicators such as lotions and sprays for the Sunscreens and lotions and gels for the After Sun products. The Lip balm will have only one application type. Also the range in sizes of the products provides convenience of having a smaller 8oz (travel sizes) to 16oz package.

Program: Adapt packaging

Activity: Caribbean Breeze’s package labels will be in both English and Vietnamese.

7 | P a g e

FAB TableFeatures Advantages Benefits

Sunscreen

Organic Ingredients SPF 30+ UVA/UVB protection 80 minutes of water resistance Spray/Lotion “Made in US” logo

Sunscreen lasts longer for water resistance than the competitors

Credibility is established since it is US manufactured

High SPF and UVA/UVB protection provides reliability for the safety that the sunscreen provides

Convenience from the variety of applicator

Provides consumer with a product for

the health conscious and

outdoor enthusiast who needs protection, convenient

application, and confidence of the

brands quality

Lip Balm Organic Ingredients SPF 30+ UVA/UVB protection 80 minutes of water resistance “Made in US” logo

Quick and convenient lip balm that has a higher level of sun protection and water resistance with the use of organic ingredient.

Provides consumers

with a higher level of

protection lip balm

that protects from the

sun and water

exposure.

After Sun Care Organic Ingredients (Aloe

Vera, mint Extract, vitamins) Moisturizes Cooling agent “Made in US” logo Lotion/Gel

After sun products unlike competitors helps to soothe the skin while providing moisture to the sun exposed skin.

Provides skin relief after sun burn/sun

exposure

Activity: The packages range from 8oz (travel sizes) to 16oz.b) Price

With the exchange rate of USD and the Dong being $0.0000469704 USD for every 1 VND, Caribbean Breeze is going to have to create a price adjustment for the products of Sunscreen, After Sun, and Lip Balms in order for the Caribbean Breeze competitively compete against local market leaders as well as to make a profit in the Vietnam market. To do this Caribbean Breezes tactical programs and activates for price are as follows.

Goal: Competitively price product against competitors.

Program: Utilize Value-Based Pricing.

Activity: Price Sunscreen at $14.00 USD or 298,449.66 VND causes price to be competitive with competition while being a high quality product.

Activity: After Sun (lotions or gels) at $8.00 USD or 170,405.27 VND causes price to be competitive with competition while being a high quality product.

Program: Utilize Penetration Pricing.

Activity: Lip Balm at $3.00 USD or 63,901.985 VND provides a cheaply priced product for instant purchases by consumers.

Program: Prices for Sunscreen, After Sun, and Lip Balm products in the local currency of the Dong.

Activity : Convert USD prices to the trade value of 1 VND for $0.0000469704 USD so that Vietnam locals and tourists will be able to buy the products instead of only the competitions priced in the Dong

Goal: Retain as much profit as possible despite the currency rates

Programs: Acquire profits in the form of credit.

Activity: By using the form of Credit, Caribbean Breeze allows less profit loss from converting the Dong into the US dollar so that with these prices Caribbean Breeze can project a total profit of $880,000 USD or 18,744,579,383.20 VND. Based on the estimated sales goals of 50,000 bottles of Sunscreen for a profit of $700,000 USD (or 14,910,460,873.00 VND), 15,000 After Sun products (lotions and gels) for a profit of $120,000 USD (or 2,556,079,006.80 VND), and finally

8 | P a g e

20,000 sticks of Lip Balm for a profit of $60,000 USD (or 1,278,039,503.40 VND).

c) PromotionCaribbean Breeze promotional strategies to build brand image and increasing

market reach to tourists and locals in the Vietnamese market, starts with promotional efforts to inform our target markets about product features/benefits of Caribbean Breeze sunscreens, after sun lotions, and lip balm. Since Caribbean Breeze recognizes the target markets necessity for high quality, safety, and reliability, Caribbean Breeze will use the following tactical programs and activates for promotion.

Goal: Build Brand image with Vietnam Locals and Tourist Market

Program: Print Ad Programs

Activity: For the first two years Caribbean Breeze will use print ads in newspapers and magazines such as Vietnam Economic Times, Vietnam News, and The Saigon Times. These print ads will be positioned mainly for the local market rather than the tourists.

Activity: These print ads will always present Caribbean Breezes products as focused on providing consumers products that are high quality, safe, and reliable with the mention of the products features and benefits for the health conscious and outdoors enthusiasts.

Activity: The print ads will include coupons to help create local market enthusiasm and ultimately sales.

Program: Posters Programs

Activity: Caribbean Breeze will provide various posters that will display Caribbean Breezes product lines, features, and benefit where they will be displayed at major airports in Vietnam and the USA.

Program: Sales promotions through package deals of products.

Activity: Caribbean Breeze will be offering bonus packs that will include a bottle sunscreen with the bonus of a travel sized “clip on” after sun lotion. The clip on bottle of sunscreen can be easily attached to the consumer’s backpacks or personal bags for easy carrying when traveling. This promotion is intended to appeal to the tourists market that is backpacking and traveling a great deal of their time outside while in Vietnam.

Goal: Increase market reach to Vietnam Locals

Program: Outdoor advertising Programs

9 | P a g e

Activity: Provide advertisements at bus stops and on local buses to increase the amount of the market the advertisement for Caribbean Breeze reaches at a low promotional cost.

Program: Trade Promotions

Activity: Provide retailors with incentives to sell Caribbean Breezes products such as discounts allowing retailors to sell the products for free and receive promotional allowances of Product Displays and promotional advertisements for the stores

d) Distribution

Caribbean Breezes wants to coordinate distribution activities in a way that creates efficient levels of communication and transportation of the products through the supply chain while cutting down the costs of distribution. To do this Caribbean Breeze’s tactical programs and activates for distribution are as follows.

Goal: Create efficient levels of communication and transportation of the products through the supply chain

Program: Establish distribution with international exporter

Activity: Caribbean Breeze will utilize UTS product shipment, which will allow Caribbean Breeze’s products to ship to the port of Ho Chi Minh City in Vietnam. Since Ho Chi Minh City’s port is near the beaches as well as one of the cities Caribbean Breeze will be implementing promotional activities, Ho Chi Minh City will be the port that Caribbean Breeze will use UTS to export to (Below is the chart of estimated costs to ship the product per 20 foot container).

10 | P a g e

Program: Establish local Vietnam distribution and promotions by hiring agents and local distribution intermediaries

Activity: These local Vietnam agents will be stationed at Ho Chi Minh City and will handle local distribution as well as promotional activities. These agents will act as sales agents for getting the products into retail stores. This means the agents will represent the Caribbean Breeze company for communicating with local Vietnam retailors of the products prices, features, displays, and brand image.

Activity: Designate local distribution intermediaries that will monitor, screen, and handle the Caribbean Breeze exports that arrive at Ho Chi Minh port. These intermediaries like the agents will communicate with Caribbean Breeze about the products status and the progress of distributing for the products to Vietnam retailors.

Program: Establish local Vietnam distribution of Caribbean Breeze products with the use of local distributors.

Activity: Caribbean Breeze will have local distribution intermediaries designate local distribution companies to distribute the product among retailers in the beach areas of Ho Chi Minh City, Hanoi, Nha Trang, Danang, Doc Let, Phan Thiet, and locations located on the Gulf of Tonkin(as shown in the map below).

Activity: Some of the major tourist’s resorts that these local distributors will transport the product are to resorts such as Diamond Bay Resort & Spa, Sunrise Nha Trang Beach Hotel & Spa, Evason Ana Mandara Nha Trang, and Elegant Hotel Saigon City which will be given trade promotions. Also in the areas mentioned, the nearest convenience and beauty retail shops will also receive Caribbean Breeze products and displays from local distributors.

11 | P a g e

Goal: Create efficient Distribution to lower costs of distribution for larger profit margins.

Program: Create a strategic alliance between Caribbean Breeze, distribution agents, distribution intermediaries, and retailors.

Activity : Caribbean Breeze’s strategic alliance with local distribution agents, local distribution intermediaries, and retailors will occur through the use of trade promotions. These trade promotions will provide incentives for each agent, intermediary, and distributor to monitor the supply chain and remain up to date on the movement the product towards sales. By creating an alliance Caribbean Breeze will eliminate the costs of inefficient communication and performance that affect distribution costs.

Activity: Caribbean Breezes distribution will monitor the progress of distribution of products from the manufacture, to international distribution (UTS), to local distribution intermediary/agents, to local distribution, to the retailer, and finally to the consumer in order to determine if distribution is being conducted efficiently and effectively.

12 | P a g e

Works CitedEuromonitor. (2013, September). Sun Care in Vietnam. Retrieved from Euromonitor International:

http://www.euromonitor.com/sun-care-in-vietnam/report

AloTrip International Limited. (2014, September 10). Vietnam tourism promoted on BBC channel. Retrieved from alotrip.com: http://www.alotrip.com/vietnam-news-travel/vietnam-tourism-promoted-bbc-channel

AMID Logistics LLC. (2014). World Seaports/Airports. Retrieved from AMID Logistics LLC: http://www.oceanfreightusa.com/shipref_tws.php

Badiani-Magnusson, C. B. (2014). Vietnam Development Report 2014 - Skilling up Vietnam: Preparing the workforce for a modern market economy. Retrieved from The World Bank: http://www.worldbank.org/en/country/vietnam/publication/vietnam-development-report2014-skilling-up-vietnam-preparing-the-workforce-for-a-modern-market-economy

BBC. (2014). BBC. Retrieved from BBC: http://www.bbc.com/

Convert United States Dollar to Vietnamese Dong. (2014). Retrieved from TheMoneyconverter.com: http://themoneyconverter.com/USD/VND.aspx

Be, T. Y. (2014, August 27). Asia-Pacific Update: ASEAN Mirrors EU Regulation. Retrieved from Cosmetics and Toiletries: http://www.cosmeticsandtoiletries.com/regulatory/region/asia/Asia-Pacific-Update-ASEAN-Mirrors-EU-Regulation-272730691.html

Central Intelligence Agency (CIA). (2014, June 20). East & Southeast Asia: Vietnam. Retrieved from CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/vm.html

Le, H. (2013, March 7). INCOME AND EXPENDITURE: VIETNAM – 2013. Retrieved from Open Opportunities: Connect Vietnam and Australia: http://www.hoangle.blog.com/2013/03/07/income-and-expenditure-vietnam-2013/

Pitman, S. (2012, August 28). Vietnam Cosmetic market ripe for the expansion of domestic players. Retrieved from Cosmeticsdesign.com/USA: http://www.cosmeticsdesign.com/Market-Trends/Vietnam-cosmetic-market-ripe-for-the-expansion-of-domestic-players

Rough Guides. (2014, March 25). 20 Best Beaches in Vietnam. Retrieved from roughguides.com: http://www.roughguides.com/article/best-beaches-in-vietnam/

Schaefer, K. (2012, August 28). International Brands See Success in Vietnamese Cosmetic Market. Retrieved from Cosmetics & Toiletries: http://www.cosmeticsandtoiletries.com/formulating/category/skincare/167748735.html

The Heritage Foundation. (2014). Vietnam. Retrieved from 2014 Index of Economic Freedom: http://www.heritage.org/index/country/vietnam

13 | P a g e

The World Bank Group. (2014). Vietnam. Retrieved from The World Bank: http://data.worldbank.org/country/vietnam

TRADING ECONOMICS. (2014). Vietnam Gross National Income. Retrieved from Trading Economics: http://www.tradingeconomics.com/vietnam/gross-national-product

UNESCO. (2014). Vietnam Economic Indicators: Vietnam Literacy Rates. Retrieved from TheGlobalEconomy.com: http://www.theglobaleconomy.com/Vietnam/Literacy_rate/

ZIM Integrated Shipping Services Ltd. (2014). ZIM Shipping Line Network. Retrieved from ZIM : http://www.zim.com/services/pages/zimlinenetwork.aspx

14 | P a g e