Children’s Helmet Marketing Stateger Essay Example

a penalty. Before the modification, around 40% of motorcycle riders and passengers wore helmets. However, after the enforcement of the new rule, the percentage rose significantly to approximately 90% in 2010. Wearing a helmet is acknowledged as one of the most efficient methods for preventing head injuries in motorcycle accidents.

Wearing helmets has been proven to decrease the death rate and occurrence of fatal head injury among motorcyclists compared to those who do not wear helmets, as shown in numerous studies. Additionally, four high-quality studies have found that helmets reduce the risk of death by 42% (OR 0.58, 95% CLC 0.50 to 0.68), while six high-quality studies demonstrate that helmets decrease the occurrence of head injury (OR 0.1, 95% CLC 0.25 to 0.38). Chi Than Plastic Production and Trading Company Ltd is a manufacturer with over 15 years of experience in helmet production and they produce Chital helmets.

Founded in 2003, Chi Than underwent a turning point in its development, marking a new stage for the company. Through constant effort, it has successfully established closed production lines that encompass mold design and fabrication, as well as the assembly of finished products using specialized equipment to cater to the demand for high-end plastic products overseas. Emphasizing quality as a top priority, all products undergo thorough inspection and certification by relevant authorities. Chi Than operates two factories, located in El Mini Guan industrial park and Ad Nag city.

With its strong focus on modern technologies and facilities, as well as its talented and experienced workforce, Chi Than occupies a leading position in the production of qualitative and diverse helmets. The company has an average monthly production of

150,000 products and primarily caters to the domestic market (82%), with a smaller portion being exported (18%). Furthermore, the company's vision is to successfully develop innovative concepts in the field of elements by combining modernity and technology.

Chi Than company has a goal of becoming the leading manufacturer of top-notch helmets by utilizing its outstanding infrastructure. In the market, children's helmets contribute to around 35-40% of total helmet sales. Numerous local brands manufacture these helmets and sell them at prices ranging from 80,000 to VEND 180,000. Additionally, there are imported helmets available in the market; however, they tend to be pricier with costs exceeding VEND 220,000. The demand for children's helmets has increased due to the government's Decree No. /2010/ND-CAP that mandates children above 6 years old to wear helmets while riding motorbikes. Currently, the child helmet market is complex and includes different imported brands like Aka Sorriest and Vista. As of July 16th, 2012, there were a total of 312 certified businesses involved in helmet manufacturing; however, only a few registered units specifically focus on producing helmets for children.

Various renowned and trustworthy businesses offer different brands of children's items. Moreover, the market has seen the rise of multiple brands priced from 1 to 5 dollars per unit. A survey conducted in Hanoi shows that only 23% of children wear helmets, while this percentage reaches 32% in Ho Chi Minh City and climbs to 44% in Ad Nag. These statistics suggest that there is still potential in the market for children's helmets. This is a result of government-led propaganda campaigns aimed at increasing helmet usage among children, particularly in major cities like Hanoi, Ad

Nag, and Ho Chi Minh City.

The market for children's helmets currently lacks attractive designs and differentiation among manufacturers, resulting in non-competitive prices. This presents an opportunity for segmentation in the market. The main target cities for this market segment are Ho Chi Mini, Hanoi, Ad Nag, and Can Too. The leading manufacturers in this segment include Protect, Amour, Osaka, and ABS. Despite being certified for quality by the CRY stamp, there is a notable presence of low-quality children's helmets being sold at extremely low prices.

To revive the children's helmet market, the Government implemented Decree No. 34/2010/ND-CAP. According to this decree, it is mandatory for children over 6 years old to wear helmets when riding motorbikes or electric bicycles.

Despite the industry's popularity, there is still a consumer risk in purchasing helmets. The market has been flooded with various options, both domestic and imported, to meet the demand. However, this has led to an influx of counterfeit items that are lower in quality. This makes it difficult for consumers to distinguish between genuine and fake products. Consequently, helmet prices have steadily increased in the market, ranging from 65,000 to 600,000 per unit. Additionally, specialized plastic caps designed for law enforcement purposes can be purchased at a price range of 12,000-15,000 per cap.

Currently, the market offers various products from our firm, such as Apollo, which have sold approximately 300,000 VEND l. We also have the Amour genuine helmet, priced at 120,000 VEND per unit, and the fake Romano helmet at 60,000 VEND per unit. The Helmets from major manufacturers like protect, Zeus, and Lackluster are priced between 150,000 and 180,000 VEND per unit. These

helmets have good quality but are not selling quickly due to their high cost. In contrast, helmets smuggled from China and Taiwan are attracting the majority of customers because they are cheap, relative in quality, and abundantly available. With such a variety of helmet types, buyers often wonder how to find a real hat with quality assurance.

At present, many hats available in the market lack specific labeling and their origin is unclear. This lack of transparency in origin often leaves potential buyers hesitant about the quality of the hat. One of the few trustworthy sources is Amour Co.'s Vietnam branch, which faces the issue of counterfeit and low-quality imitations produced by small-scale facilities like amino and More Omar. Unfortunately, this situation is not unique to Amour, as other companies also encounter the same problem. In order to safeguard their products, many companies in Vietnam's protective equipment and safety industry continuously innovate and introduce new colors.

The streets of Ho Chi Minh City were flooded with counterfeit helmets, while there was a lack of helmets for children. Manufacturers primarily concentrated on producing helmets for adults, leading to an unmet demand for children's helmets. Exploiting this scarcity, the prices of children's helmets soared and exceeded those of adult helmets. The least expensive children's helmets are priced at VND 140,000 - VND 150,000 but lack reputable brands and the CRY stamp.

Manufacturers may not prioritize this issue, leaving only consumers to bear the consequences. Currently, there are a few manufacturers, such as Protect, Amour, ABS, and Osaka, who produce high-quality helmets for children. However, their prices are not competitive. The market for children's helmets is dominated by

illegally imported products from China and Taiwan. Despite their low price and diverse styles, these Chinese-imported helmets lack a brand name and have very poor quality.

In Ho Chi Minh City, local manufacturers are struggling to compete with counterfeit and substandard products in the market. Moreover, there are no existing government regulations for setting quality standards specifically for children's helmets. As a result, the market for children's helmets is wide open. However, Protect, one of the major players in this sector, incorporates advanced technology from the United States and employs superior materials in their manufacturing process. Furthermore, Protect has a state-of-the-art laboratory at their factory that meets international standards.

The market demand for children's helmets regarding size has not been fully satisfied. Amour Vietnam, a local competitor, produces children's helmets with advanced assembly lines from Japan and Korea. They have a wide range of stylish models to cater to the market requirements. Amour Vietnam specializes in manufacturing helmets for kids aged 3 and above, using materials imported from Germany. In Chapter 3, we will examine the external market environment encompassing politics, laws, and policies.

According to the Bureau of Health Environment Management, Ministry of Health, approximately 1,900 children lose their lives each year due to traffic accidents. This accounts for about 24-26% of all child fatalities. The number of child deaths resulting from traffic accidents has seen a significant increase. To tackle this issue, the Government introduced Decree No. 34/2010/ND-CAP on 02/4/2010 which imposes penalties for administrative violations related to road traffic and mandates that children aged 6 and above must wear helmets when riding motorcycles.

The Government has implemented campaigns to enforce penalties on

children aged 6 and above who do not wear helmets when riding motorbikes. They have also introduced programs that encourage parents to ensure their children wear helmets from the age of 3. These policies, laws, and programs have created a potential market for manufacturers of children's helmets. The Government aims to increase the percentage of helmet-wearing children to 80% within three years starting from 2011.

Vietnam's economy is currently stable, with an improved standard of living. Ho Chi Minh City serves as Vietnam's largest cultural and economic center. Despite the global economic crisis impacting many countries, Vietnam experienced a growth in per capita income from $2,900/person/year in 2009 to $3,120/person/year in 2010 (a 12% increase). By 2012, it further rose to $3,550/person/year. The economy continues to develop and improve the standard of living. Furthermore, families now tend to have fewer children which enables parents to provide better care.

The Government's focus on controlling inflation and stabilizing the economy showcases their prioritization of these tasks. The increase in per capita income has raised concerns regarding children riding motorbikes or electric bicycles, prompting parents to consider aesthetics and comfort when purchasing helmets for their kids. By 2011, the nationwide population reached around 87.84 million individuals, indicating a 1.4% growth from the previous year. This number further rose to almost 88 million people by 2012. Vietnam experiences an annual population growth rate of approximately 1%, with its young population structure acting as a significant driving force for its present and future economy.

In Ho Chi Minh City alone, the child population was recorded at 2.3 million (SO) in 2011, accounting for roughly 25% of the city's total inhabitants.

This suggests that there is still considerable potential in major cities like Ho Chi Minh City, Hanoi, and Canton for children's helmet market. At present, helmet manufacturing incorporates various advanced technologies.

The United States of America utilizes advanced technology to produce batches of children's helmets that are both safe and uniquely styled. This advanced technology is used to create molds capable of simultaneously manufacturing two products, resulting in helmet covers without joints and lower prices. Furthermore, modern and automated manufacturing assembly lines from countries such as Spain, Germany, and Italy aid helmet manufacturers in producing high-quality children's helmets in various styles and sizes. These helmets boast beautiful designs and comply with both local and international standards.

Using advanced technologies, manufacturers can save time in completing children's products and increase production to meet market demand. However, despite the improved economic life of people, the trend in Vietnam is for each family to have only one or two children. Therefore, the children of these families are the primary focus. When choosing helmets for their children, parents prioritize quality, comfort, and aesthetics. However, predicting the specific demands of children for helmets is a challenge for manufacturers in this industry.

The children helmet market in Vietnam has great potential due to the country's heavy dependence on motorbikes as the main mode of transportation. Experts forecast that motorbikes will remain a crucial means of transport until 2020, with a total national count of 38.8 - 40.5 million motorbikes (equivalent to 2.4 - 2.5 persons per motorbike). The city of Ho Chi Minh, with a population of 7.1 million people, alone owns over one million motorbikes.

The Traffic Safety Committee in

Ho Chi Mini City and Traffic Police have launched a nationwide campaign to reduce the high number of child deaths and injuries on Vietnam's roads. As part of a three-year project, this initiative mandates the use of helmets for children and is a joint effort by the National Traffic Safety Committee (NTIS), the Road and Rail Traffic Police Department, and the Ministry of Education and Training (MEET). The World Health Organization (WHO) along with non-profit organization Asia Injury Prevention (API) Foundation are also lending their support.

According to GAP News Paper, the Strengths-Weaknesses-Opportunities-Threats (SOOT) Analysis of GAP includes the following:

• S (Strengths)
• Technicians and workers are well-trained and experienced
• Sales forces are professional and have a deep knowledge of helmets and its market
• Have 2 factories (in Ho Chi Mini city and Dang city) with Japanese technology
• Production process is under ISO 9001
• Distribution channels and coverage are established completely and spread in 5 big cities and 10 provinces of Vietnam

No weaknesses mentioned in the text.

Around 20% of the market share belongs to modern trade, while 80% is attributed to General trade. All helmets for adults have been certified by Squattest 3 and have been chosen as a high-quality product by Vietnamese consumers. The growth ratios indicate a 12% increase in total sales in 2012 compared to 2011. The website

is specifically designed to ensure easy and simple access for all consumers. Additionally, a newcomer in the helmet market specifically targets children. After-sale services are limited and depend on the price of imported raw materials, such as ABS poly, which directly impacts production costs. The budget allotted for Corporate Social Responsibilities is relatively low.

The designs and quality of helmets are not differentiated and are poor. Promotion activities lack strength. Government regulations, such as Decree No.34/2010/ND-CAP, encourage helmet usage, especially for children aged 6-12 years old. In 2012, HOC and Hanoi city implemented a policy requiring 100% helmet-wearing for children, coinciding with the beginning of National Traffic Safety. Children aged 0-14 account for 24.5% of the population. The Market Management closely monitors the production of low-quality helmets, which make up 40% of all helmets produced. Motorcycles are primarily used for daily transportation in five major cities, where there is an average of six motorbikes per capita and over 11 million motorbikes in total. Families prioritize their children's safety when traveling by motorcycle. Competition comes from larger competitors like Protect, Honda, Andes, and Sis Tam. Street vendors sell fake fashionable helmets at very low prices that lack quality. Government regulations regarding the helmet market are not strictly enforced; however imported helmets with stylish designs and high quality are available. People in big cities are transitioning to using public buses and private cars.

CHAPTER 5 OBJECTIVES AND RESOURCES

Financing objective: Initially, Chital will focus on Ho Chi Mini City and then consider expanding to other big cities like Ad Nag, Can Too, and Hanoi.

The project's goal is for the Chital helmet to break even within a year

and successfully enter the international market. It is projected that Chital helmet revenue will reach VEND 100 billion in 2016, which is five times higher than in 2012. To maintain competitive pricing, Chital is searching for reputable partners in countries and regions that supply raw materials for children helmets. The company expects revenues from children helmets to make up around 20% of their total helmet production. Their aim is to manufacture approximately 42,000 kids helmets per month, with an estimated Return On Equity (ROE) of 30%. Additionally, Chi Than Production and Trading Company Ltd prioritizes community engagement and shares responsibility within their organization.

The company deducts 5% of the annual net profit to fund "Chi Than because the next life". The program includes meaningful social activities such as rebuilding Bung Been primary schools in Mock How District, Long An Province, donating 1,000 helmets to needy students in mountainous districts of Quant Name, and actively participating in funding propaganda programs of the National Transportation Safety Board and activities of the People's Committee of Ho Chi Mini City. The marketing objective of Chi Than is to become one of the top 3 brands in the children's helmet market, aiming for a 22% market share within 4 years.

The revenues of Chital children helmets are estimated to reach approximately VEND 80 billion in the first year of 2013. If this objective is achieved, the company plans to expand its market for children helmets in Hanoi, Ad Nag, Hi Phone, and Can Too City. Chi Than Company Ltd. is confident in achieving these goals due to several advantages. They have more than 15 years of experience in manufacturing

helmets for the Vietnam market and over 6 years of experience in manufacturing adult helmets for international markets. They also possess strengths in advanced technology, modern facilities, and a skilled, creative, and disciplined workforce. Chital brand has been one of the leading brands in the helmet market of Vietnam for many years. Their marketing strategy revolves around their mission to not only provide safety helmets to customers but also to design new helmet designs that are fascinating, colorful, fashionable, and impressive to satisfy the demand for fashion among clients and gradually eliminate any discomfort associated with wearing a helmet. They aim to create a happy and positive experience for customers as their ultimate goal.

Considering the promising market for children helmets indicated by the SWOT analysis, Chi Than company Ltd. has made the decision to produce helmets specifically for children. Leveraging advanced technology and machinery from Japan, as well as a team of skilled and experienced individuals, the company manufactures Chital branded children helmets to cater to a large customer base. Additionally, the company also produces products with higher added value and prices to enhance overall profitability.

The manufacturer of Hillier helmets prioritizes high quality as their first criteria. Chital helmets undergo testing at the company's modern laboratory at the factory and must meet the standards of 'SO-9001:2000, CIVIC:2008/BEACH. They are also certified by Squattest 3 (Vietnam). The Andes helmet cover is made of 100% ABS plastic resin imported from Malaysia or Thailand, which makes it highly resistant to impact and puncture. Chi Than Company Ltd. specializes in manufacturing only one type of children's helmet, the half-head helmet. This is because Vietnam has a tropical

climate that is hot and humid, and most parents and children prefer the half-head Elmer style. The design of Chital children's helmets is beautiful and diverse, offering a range of colors to choose from, as well as featuring cartoon characters beloved by children such as Doreen, Kitty cat, Tom & Jerry, and Superman. These characters are stuck on the helmet cover. Additionally, there are unique and colorful patterns on the helmet cover to attract children and their parents.

The psychology of children is that they wear what they find beautiful and appealing, which is why we specifically request beautiful designs for our children's helmets. The Chital children's helmet is designed to weigh between 200 - 300 grams, depending on the child's age, making it very light. Chital places great emphasis on the inner foam layer as it is vital for protecting the brain. The foam layer of Chital children's helmets has a consistent thickness and density, ensuring there are no sink marks when pressed and effectively absorbing impact pulses.

The helmet lock and strap are composed of durable materials - acetic plastic for the lock and synthetic fiber for the strap. The lock is designed to endure 30,000 locking and unlocking cycles. The helmet's lining is highly advanced, effectively absorbing moisture and preventing bacterial growth. Moreover, the lining features a large net structure that facilitates air circulation, ensuring a more comfortable experience for the wearer. Two styles of half-head helmets are offered: one includes glasses to shield children's eyes from dust and smoke, while the other style does not include glasses.

Children helmets in various sizes will also be designed for children aged 3-13 years

old. The company, Chital, has been successful in gaining popularity among consumers in Vietnam by following a price strategy focused on high quality at low cost. To achieve the best prices, Chital continuously conducts research, makes technological improvements, and seeks the best prices for raw materials. For manufacturing children helmets, Chital uses 100% ABS plastic resin from Malaysia for the cover and sources competitive prices from suppliers in Thailand and Taiwan.

In addition to targeting a wide range of consumers, Chi Than company Ltd. plans to create children helmet products with enhanced features and higher prices. One such product is the Chital@ children helmet, which is equipped with special temperature monitoring equipment. This innovative feature will sound an alarm if a child develops a fever while wearing the helmet. The company will only produce a limited quantity of this specialized helmet and will use environmentally-friendly materials based on customer preferences.

The company anticipates that this product will become a fashionable icon in the helmet industry. Chital's pricing strategy aims to offer high-quality children's helmets at a reasonable price. The expected price range for Chital@ brand is VEND 250,000-300,000 and for Chital brand, it is VEND 120,000-150,000. With these prices, Chital children's helmets are more affordable than those of their competitors in the market of Ho Chi Mini City. Currently, Chital helmets are primarily distributed through three main channels: 70% through General Trade, 19% through Modern Trade, and advertising items for firms (Chital website).

In Ho Chi Minh City, there are three showrooms operated by Chi Than, located in district 6, district Tan Binh, and Binh Thanh. In addition to the showrooms, the company also manages

124 helmet shops and 20 supermarkets that sell Chital helmets. These establishments are managed by two sales representatives. Currently, the distribution rate of Chital helmets only accounts for about 45% of the market potential. To increase distribution, Chital will launch its children's helmets in Ho Chi Minh City using the existing system. Within one month, it is expected that the Chital children's helmets will be distributed to all 124 available shops and supermarkets in Ho Chi Minh City.

The expectation is that by the end of 2013, Chital children's helmets will be available in 200 stores, reaching 90% of the Ho Chi Mini market. Additionally, new showrooms will open monthly in district 7, district Hoc Mono, and HTH Duck as part of the first quarter launch. The distribution strategy from 2013 to 2016 aims to provide customers with exceptional service through the showroom system. Customers will have a range of models to choose from and will receive tailored consultations based on their body type and preferences.

The customer service teams in the showroom system are responsible for providing careful guidance on usage and warranty regulations to ensure that customers receive the maximum benefits. Chital company Ltd. is also planning to establish a distribution channel to reach out to schools, particularly primary and secondary schools in Ho Chi Minh City, in order to promote Chital children's helmets. The distribution plan will be supported by various activities, such as offering discounts in shops, consumer promotions, school events, and trade fairs. The promotion strategy aims to boost sales of children's helmets.

Chi Than company Ltd. plans to hold various promotional activities to entice customers. They will

provide a special discount for orders of over 50 children helmets. Additionally, customers who purchase children helmets will receive a children comforter designed to resist dust and smoke, and the manufacturer will also supply amusing decals for children to decorate their helmets with. The advertising campaign for children helmets will receive significant emphasis. Chi Than's children helmet product, known as Chital, is promoted in magazines such as The Xiii PH Nu, Tot ; Ex May, as well as newspapers like Than Nine and Auto Tree.

Beside that, Chital children helmet is also being advertised on television and radio. Many panels will be placed on the way and in some locations near primary and secondary schools. The forecasted number of panels for all of Ho Chi Mini city is 40 units. Chi Than will launch the program called "Growth up with Chital together" which offers a 20% discount to consumers who purchase the small-sized helmet before. This program aims to enhance consumer loyalty towards the Chital brand. Additionally, the company is collaborating with some local authorities to achieve this goal.