STATEMENT OF ORIGINALITY

This work has not been submitted for a degree or diploma in any university. To the best of
my knowledge and belief, the project contains no materials previously published or written
by another person except where due reference is made in the project itself.

Le Quang Truong
February 15th, 2011


ACKNOWLEDGEMENT

Firstly, I would like to express my appreciation to Dr. Bui Thanh Trang, my project tutor,
for all his valued guidance and expert advice in the preparation of this project.

Special thanks to my mentor for his personal encouragement and and unlimited support in
sharing marketing experience which motivated me to work harder on this project.

Last but not least I would like to send my deepest appreciation to my family and my
company for their emotional support and spiritual encouragement throughout my MBA
study.


TUTOR’S COMMENTS

(anh attached trang co chu ky cua thay Trang vao)


TABLE OF CONTENTS
EXECUTIVE SUMMARY ....................................................................................................... 1 
 

CHAPTER 1: INTRODUCTION ............................................................................................ 4 
1.1.  Reasons to Research ........................................................................................................ 4 
1.2.  Objectives of Research .................................................................................................... 4 
1.3.  Methodology .................................................................................................................... 4 
1.4.  Scope of Research ........................................................................................................... 5 
1.5.  Structure of Research ...................................................................................................... 5 
 
CHAPTER 2: LITERATURE REVIEW ............................................................................... 6 
2.1 

Process to launch a new product ..................................................................................... 6 

2.1.1  Concept Development ................................................................................................ 6 
2.1.2  Concept Testing ......................................................................................................... 7 
2.1.3  Prototype and Product Development ........................................................................ 7 
2.1.4  Pilot Launch............................................................................................................... 7 
2.1.5  Commercialization .................................................................................................... 8 
2.2 

Target consumer .............................................................................................................. 8 

2.3 

Positioning ........................................................................................................................ 9 

2.4 

Marketing Activities To Build And Develop A New Product ....................................... 9 

2.4.1  Product ...................................................................................................................... 9 

2.4.2  Price ......................................................................................................................... 13 
2.4.3  Distribution .............................................................................................................. 15 
2.4.4  Promotion ................................................................................................................ 17 
 


CHAPTER 3: RESEARCH DESIGN ................................................................................... 19 
3.1 

Framework of Research ................................................................................................ 19 

3.2 

Methodology and Sampling composition ..................................................................... 20 

3.2.1  Qualitative Research ............................................................................................... 20 
3.2.2  Quantitative Research ............................................................................................. 21 
 
CHAPTER 4: MARKET ANALYSIS, RESULT OF RESEARCH & MARKETING
ACTIVITIES ............................................................................................................................ 23 
4.1 

Market Analysis ............................................................................................................. 24 

4.1.1  Market situation ....................................................................................................... 24 
4.1.2  Introduction of Garment Resource Company ......................................................... 26 
4.2 

Result of Research ......................................................................................................... 27 


4.3 

SWOT Analysis .............................................................................................................. 33 

4.3.1  Strengths .................................................................................................................. 33 
4.3.2  Weaknesses .............................................................................................................. 33 
4.3.3  Opportunities ........................................................................................................... 34 
4.3.4  Threats ..................................................................................................................... 34 
4.4 

Target Consumers .......................................................................................................... 35 

4.5 

Positioning ...................................................................................................................... 36 

4.6 

Marketing Activities to launch ZIK ZAK ..................................................................... 37 

4.6.1  ZIK ZAK ................................................................................................................... 37 
4.6.2  Pricing of ZIK ZAK.................................................................................................. 38 
4.6.3  Distribution of ZIK ZAK .......................................................................................... 39 
4.6.4  Communication Strategy of ZIK ZAK ..................................................................... 40 
4.7 
 

PROFIT/LOST in 5 YEARS .......................................................................................... 43 



CHAPTER 5: CONCLUSION ................................................................................................ 44 
 
REFERENCE
A. BOOKS .................................................................................................................................. 46 
B. DOCUMENT OF MBMM-4 COURSE ................................................................................. 46 
 
APPENDIX .............................................................................................................................. 47 
Appendix 01: Discussion Guidelines ..................................................................................... 47 
1)  CONSUMERS’ LIFESTYLE ............................................................................................ 47 
2)  APPEARANCE & U&A OF FASHION/CLOTHING ..................................................... 47 
3)  IF RESPONDENTS DON’T MENTION CLOTHING, PROBE: .................................... 48 
4)  For BRANDED CLOTHES WEARER ............................................................................. 48 
5)  PURCHASE HABIT: ......................................................................................................... 48 
6)  BRAND ASSESSMENT ................................................................................................... 49 
Appendix 02: Quantitative Questionnaire ........................................................................... 49 


ABBREVIATIONS
GRC

Garment Resource Company

US

United State

EU

Europe


VND

Vietnam Dong


LIST OF TABLE
Table III.1

Sample of Qualitative Research

20

Table III.2

Sample of Quantitative Research

22


LIST OF DIAGRAM
Diagram II.1

The process of launching a new product

6

Diagram III.1

Research framework


19

Diagram IV.1

Zik Zak distribution roadmap

39

Diagram IV.2

Stages of communication

40


LIST OF CHART
Chart IV.1

Vietnam clothing market value

23

Chart IV.2

Brand awareness (without support)

26

Chart IV.3


Chosen stores of teenagers

27

Chart IV.4

Occasions that respondents purchased new clothes

28

Chart IV.5

Number of clothes purchased per year

29

Chart IV.6

Teenager’s preferred product performance

29

Chart IV.7

Desired characteristics of clothing brands

30

Chart IV.8


Affordable prices for teens

31

Chart IV.9

Comparative Pricing analysis of Zik Zak

38


LIST OF GRAPHIC
Graphic IV.1

Zik Zak Benefits

36


Page 1

EXECUTIVE SUMMARY
According to the research of EUROMONITOR International1, Total Vietnam fashion
market is estimated at value of US$ 2.6 billion for the year 2010, growing by 16% vs 2009.
also gave a forecast in 2012, this market value will achieve a value of US$ 3.4 billion.
Thanks to the initiatives in changing design and cost advantage of local taste, local brands
are taking share of foreign brands and occupying 40% of the market share with PT2000,
Blue Exchange, Vietthy, Foci, Nino Maxx, N&M, Maxx Style, T-up, Manhattan, An Phuoc
etc. Local contribution is expected a better growth rate in the next following rate thanks to
its understanding and improved capability

in competition.
Foreign brands are focusing on the
working people who have income to
afford their fashion. Majority of local
players also targeted on this segment with

Total Vietnam fashion market is
estimated at value of US$ 2.6
billion for the year 2010, growing
by 16% vs 2009. Euromonitor
also gave a forecast in 2012, this
market value will achieve a value
of US$ 3.4 billion.

more competitive price. The segment of teenager (14 years old to 18 years old) is not well
exploited by foreign brands as well as local players.
Garment Resource Company (GRC) was founded in 2005 in Quang Nam – a coastal
central province of Vietnam. It is the clothing manufacturer with 1,000 workers which
mainly produces and exports garment product under the orders from multi-national clothing
companies. The markets of GRC are US, Japan and EU with contribution of value of 60%,
25% and 15% respectively.
Euromonitor International Ltd is a privately owned, London-based market research firm, providing market
research and business intelligence reports and data to industry. The firm was founded in 1972.
Euromonitor's website states the firm currently employs more than 1000 analysts and consultants globally, who
source market information in 80 countries, producing consumer industry market reports, reference books,
company profiles, current market data, and market forecasts. (Wikipedia, Aug 2010)


Page 2


With 100% of relying on exporting market, its business experienced fluctuations which
depended too much on macro-economic policy of both Vietnam and exporting country or
economic status of exporting country, for instance, the total exporting value of GRC
decreased 30% in the end of 2008 due to economic crisis in US, then EU and Japan.
Therefore, GRC has planned a strategy to make it be less dependent on exporting
marketing by creating a clothing brand to offer the local market.
With the in-house production, GRC has not owned any clothing brand to offer local market.
Now is the time for GRC to study local market and find the untapped segment to offer the
most required clothing brand to offer the target consumers.
As reviewed above, the segment of 14 ~ 18 years old has not well exploited by both local
clothing players as well as foreign players. Therefore, GRC has chosen this segmentation
as a potential segment to initiate its own clothing brand.
With the advantage of labour cost, GRC chose Da Nang as a strategic geo-market to launch
a new brand. The success of the new brand in Da Nang is the initial foundation for its mass
launch in whole nation of Vietnam.
The thesis conducted a research to find out the insights of its target customers. Then it
proposes a concept to launch new clothing brand to offer its target customers of of 14 ~ 18
years old.
The research found out that target consumers initiatively chose the clothing brand they
wanted to buy; under the harsh control of school and family, the target consumers would
like to express their “Independence”. There is a huge opportunity for GRC since there is
no clothing brand which was able to incorporate into “Independence” characteristic.


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Understanding the insights from target consumers, GRC has planned to launch a clothing
brand named “ZIK ZAK” to help its target consumers to self-express himself/herself as an
independent person through the 360 degree integrated communication campaign.
Because target consumers are dependent on income from their parent; therefore ZIK ZAK

is positioned as an affordable and accessible clothing brand. Because of initiatives in raw
material, design and in-house facility, GRC has cost advantage which a limited number of
players are having. That is why GRC is able to commit to bring ZIK ZAK to target
consumers at the most competitive pricing to business partners (Resellers and consumers).
ZIK ZAK is mainly distributed through its flagship store chains and stores at supper market
and hyper market where target consumers usually purchased clothing brands (findings from
research).
With the sales forecast in five years, the accumulated Profit will be positive in the third
year, and continuously achieves a good net profit of VND 3 billion and VND 6 billion in
year 4 and year 5 respectively. This is a very good project.
However, GRC still has a lot of challenges to be addressed once it does not have any
experience or back-ground in retailed business. Moreover, the presence of Chinese or noname clothes are the threats of ZIK ZAK in particular, and other local brands in general.


Page 4

CHAPTER 1: INTRODUCTION
1.1.

Reasons to Research

GRC is the clothing manufacturer with 100% of relying on exporting market, its business
experienced fluctuations which depended too much on macro-economic policy of both
Vietnam and Exporting country or economic status of exporting country.
GRC has found that with the local market value of US$ billion 2.6 in 2010 and the high
growth rate in the incoming years, there is a big opportunity for it to penetrate into this
market. With competition in production cost, innovative proposition and capturing market
dynamics, it is more capable to compete with other local players in the market.
In order to find the ideas of product to develop the product concept, the primary research
needed to be conducted to explore the target consumers’ insights. The target consumers’

insights are the foundations to shape the product concept.
1.2.

Objectives of Research

-

Teens’ perception of current brands in the market

-

Clothing Brand Usage and Attitudes of Teenager

-

Discover the criteria of a clothing brands

-

Unmet needs and ideal fashion brand for teens

-

Affordable and acceptable price range

1.3.

Methodology



Page 5

Qualitative was conducted with focus groups in order to collect the insights, needs, key
perceptions. The result of qualitative research is the basics to move the next step of
quantitative research.
Quantitative research was conducted with questionnaire in the field. Personal interviews
(face-to-face) were done with 120 respondents of 14-18 years old.
1.4.

Scope of Research

Due to financial and time constraints, this primary research was conducted in high schools
in Da Nang. As a result, this thesis proposed a marketing plan to launch a clothing brand
ZIK ZAK in Da Nang market. The success of ZIK ZAK is the foundation to expand the
brand into the nationwide of Vietnam.
1.5.

Structure of Research

The thesis includes 5 chapters as follows:
Chapter 1: Introduction
Chapter 2: Literature Review
Chapter 3: Research Design
Chapter 4: Market Analysis, Results of Research, Marketing Activities
Chapter 5: Conclusion
Besides chapter 1 which has already done here, the remain of the thesis is constructed as
following. Chapter 2 reviews the theoretical framework of launching a new product and
constructing a marketing plan for this new product. Chapter 3 figures out research design
including sample selection, qualitative approach and quantitative methods that will be used
for the research. Chapter 4 presents and analyses research results as well as the proposed



Page 6

marketing plan for the new brand. Finally, chapter 5 highlights main contributions of the
thesis as well as some conclusions which capture the whole research.

CHAPTER 2: LITERATURE REVIEW
The chapter “Literature Review” was written based on the book “KnowThis: Marketing
Basics” by Paul Christ (2008).
2.1

Process to launch a new product

Concept Development

Concept Testing

Prototype
Development

Market testing

Commercialization
Diagram II.1

The process of launching a new product

2.1.1 Concept Development



Page 7

The organization may have come across what they believe to be a feasible idea, however,
the idea needs to be taken to the target audience. The idea must be:
It must be practical and feasible
It must offer the benefits that the target consumers are expecting and requiring.
It must be overlooked the current issues.
After the organization gets the idea, then they will conduct the qualitative and quantitative
research to evaluate the feasibility of the concept. If it works with target consumers, then
organization will develop the concept testing.
2.1.2 Concept Testing
After concept is developed, it is validated through focus groups or quantitative research
with customers. Then the marketer seeks information that may include: likes and dislike of
the concept; level of interest in purchasing the product; frequency of purchase; and price
points to determine how much customers are willing to spend to acquire the product. If the
concept is accepted by target consumers and is able to feasible to business, we move to the
next step to develop prototype to test market.
2.1.3 Prototype and Product Development
It is at this stage that a prototype is finally produced. The prototype will clearly run through
all the desired tests, and be presented to the target audience to see if changes need to be
made.
After prototype is finished, organization produces the product to offer target consumers.
2.1.4 Pilot Launch


Page 8

Pilot launch means testing the product within a specific area. The product will be launched
within a particular region so the marketing mix strategy can be monitored and if needed, be

modified before national launch.

2.1.5 Commercialization
If the pilot launch has been successful then the product will go for mass launch. There are
certain factors that need to be taken into consideration before a product is launched
nationally.
These are timing, how the product will be launched, and the organization will consider the
marketing mix to launch the product
2.2

Target consumer

The target consumer and the marketing mix variables of product, place (distribution),
promotion and price are the two elements of a marketing campaign that determine the
success of a product in the marketplace.
A target consumer or target audience is a group of consumers that the business has decided
to aim its marketing efforts and ultimately its merchandise. A well-defined target consumer
is the first element to a marketing strategy.
Target consumers are groups of people separated by distinguishable and noticeable
aspects. Target consumers can be separated into geographic segmentations (their location);
demographic/socio-economic segmentation (gender, age, income occupation, education,
sexual orientation, household size, and stage in the family life cycle); psychographic


Page 9

segmentation (similar attitudes, values, and lifestyles); behavioral segmentation
(occasions, degree of loyalty); and product-related segmentation (relationship to a product).
Once these distinct consumers have been defined, a marketing mix strategy of product,
distribution, promotion and price can be built by the business to satisfy the target consumer.

2.3

Positioning

The most common definition of positioning is identifying a market niche for a brand,
product or service utilizing traditional marketing placement strategies (i.e. price,
promotion, distribution, packaging, and competition).
Positioning is the perception that happens in the minds of the target market. It is the
aggregate perception the market has of a particular company, product or service in relation
to their perceptions of the competitors in the same category. It will happen whether or not a
company's management is proactive, reactive or passive about the on-going process of
evolving a position. But a company can positively influence the perceptions through
enlightened strategic actions.
2.4
2.4.1

Marketing Activities To Build And Develop A New Product
Product

What is a product?
The focal point of the marketing mix is the product. A product includes more than a good or
service that is designed, produced and offered for sale. It includes all the planning that
precedes actual production, it includes research and development and it includes all the
services which accompany the product.
We will use the term “product” to cover offerings that fall into one of the following
categories:


Page 10


ƒ

Goods - Something is considered a good if it is a tangible item. That is, it is

something that is felt, tasted, heard, smelled or seen. In some cases there is a fine
line between items that affect the senses and whether these are considered tangible
or intangible.
ƒ

Service - Something is considered a service if it is an offering a customer

obtains through the work or labor of someone else. Services can result in the
creation of tangible goods (e.g., a publisher of business magazines hires a freelance
writer to write an article) but the main solution being purchased is the service.
Unlike goods services are not stored, they are only available at the time of use and
the consistency of the benefit offered can vary from one purchaser to another
ƒ

Idea - Something falls into the category of an idea if the marketer attempts to

convince the customer to alter their behavior or their perception in some way.
In marketing, the term Product is used as a catch-all word to identify solutions a marketer
provides to its target market. Marketing therefore plays a key role in determining such
aspects as the appearance of the product - in line with the requirements of the market, and
the function of the product - products must address the needs of customers as identified
through market research.
Key product decision
ƒ

Consumable product features

o Features Set vs. Cost
For marketers an important decision focuses on the quantity and quality of features
to include in a product . In most cases the more features included or the higher the
quality level for a particular feature, the more expensive the product is to produce
and market.


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o Is more better?
Even if added cost is not a major concern, the marketer must determine if more
features help or hurt the target market’s perception of the product. The product with
too many features could be viewed as too difficult to use.
o Who should choose the Features?
Historically, marketers determined what features to include in a product, for
traditional products, such as clothing, company allow customers to stylize their
purchases with logos and other personalized options
ƒ

Branding
Branding involves decisions establishing an identity for a product with the goal of
distinguishing it from competitors’ offerings. Creating an identity through branding is
essential, it is particularly important in helping position the product in the minds of the
product’s target market.
o Branding strategy: with competition growing more intense in almost all industries,
establishing a strong brand allows an organization’s products to stand out and avoid
potential pitfalls such as price wars. Making smart branding decisions in the early
stages of a new product is crucial since a company may have to live with the
decision for a long time
Branding approaches includes:

- Individual Product Branding
- Family Branding
- Private Label or Store Branding
- Co – Branding


Page 12

- Brand Licensing
o Advantages of brands:
A strong brand offers many advantages for marketers including:
- Enhances product Recognition:
Brand provides multiple sensory stimuli to enhance customer recognition. A
brand can be visually recognizable from its packaging, logo, and shape. A
brand can be recognizable via sound or verbally
- Builds Brand Equity:
Strong brands can lead to financial advantages through the concept of brand
equity in which the brand itself become valuable.
- Help build brand loyalty:
Brand loyal customers are frequent and enthusiastic purchases of a particular
brand. Cultivating brand loyalty among customers is the ultimate reward for
successful marketers since these customers are far less likely to switch to
other brands compared to non-loyal customers.
- Help with Product Positioning:
Well – developed and promoted brands make product positioning efforts
more effective. The result is that upon exposure to a brand (e.g., hearing it,
seeing it) customers conjure up mental images or feelings of the benefits of
that brand. The reverse is even better. When customers associate benefits
with a particular brand, the brand may have attained a significant
competitive advantage.

ƒ

Labeling


Page 13

Most packages, whether final customer packaging or distribution packaging, are
imprinted with information intended to assist the customer. For consumer products,
labeling decisions are extremely important for the following reasons:
- The label is likely to be the first thing a new customer sees leading to his/her
first impression of the product.
- Label serves to capture the attention of shoppers. The use of catchy words and
graphic may cause strolling customers to stop and evaluate the product.
- The label provides customers with product information to aid their purchase
decision or help improve customers’ experience when using the product
- In some countries many products, including food and pharmaceuticals, are
required by law to contain labels, such as listing ingredients, providing
nutritional information, or including usage warning information.
2.4.2 Price
What is price?
Price is the cost, or what the buyer must give up, to receive the product. Actually price
means more than an amount of money, in general appropriate price is determined by both
target objectives of the seller (supply side) and the willingness to pay of target customers
(demand side). It is also well known that prices depend on life cycle of the product.
Therefore, price is not static.
In general terms, price is a component of an exchange or transaction that takes place
between two parties and refers to what must be given up by one party (i.e., buyer) in order
to obtain something offered by another party (i.e., seller). In fact, price means different
things to different participants in an exchange:



Page 14

ƒ

Buyers’ View – For those making a purchase, such as final customers, price

refers to what must be given up to obtain benefits.
ƒ

Sellers’ View - To sellers in a transaction, price reflects the revenue

generated for each product sold and, thus, is an important factor in determining
profit. For marketing organizations price also serves as a marketing tool and is a key
element in marketing promotions.
Importance of price
Pricing decisions can have important consequences for the marketing organization and the
attention given by the marketer to pricing is just as important as the attention given to more
recognizable marketing activities. Some reasons pricing is important include:
ƒ

Most Flexible Marketing Mix Variable – The flexibility of pricing decisions is

particularly important in times when the marketer seeks to quickly stimulate
demand or respond to competitor price actions.
ƒ

Setting the Right Price – Pricing decisions made hastily without sufficient


research, analysis, and strategic evaluation can lead to the marketing organization
losing revenue.
ƒ

Trigger of First Impressions - It is important for marketers to know if

customers are more likely to dismiss a product when all they know is its price. If so,
pricing may become the most important of all marketing decisions if it can be shown
that customers are avoiding learning more about the product because of the price.
ƒ

Important Part of Sales Promotion – Many times price adjustment is part of

sales promotions that lower price for a short term to stimulate interest in the
product.
Price versus Value