Principle of Marketing Reportomo Essay Example

every aspect of life, especially in the economy. In recent years, Vietnamese businesses have became more interested in and made better use of the big opportunities which WTO brought them. On top of that, there is a growing concern about the purchase, sale and exchange of goods and services. How to facilitate Vietnamese consumers in doing the shopping, supply them with better choices, better goods and better prices is always the deep preoccupation of Vietnamese companies.

OMO is a highly aware washing powder product of Unilever Vietnam Joint Venture Company (formerly Lever Vietnam) - a joint venture specializing in Home and Personal Care brands. According to the recently issued report by the Central Institute for Economic Management (CIEM), by 2007, UVN ranks the 27th largest business in Vietnam and the largest in the Fast Moving Consumer Goods (FMCG) sector. Unilever Vietnam is a long-term investor, who has been deeply rooted in the economy, having strong forward and backward linkages and, by and large, serving domestic consumers. This drives us to conduct research about this product.

The economy of Vietnam is gradually growing that enables people enjoy higher living standard. Higher living conditions demand higher quality products. As the world changes so the business must change to meet new consumer needs. It is inevitable that washing power is very a necessary consumer product in almost households. OMO has been partially met customer expectations for their quality products. Now this product has formed its brand equity on the market in both domestic and international market. This study attempts to make a deeper understanding about the OMO product in terms of the current arket, the marketing

environment, the organization, the customers, and the competitors – all of which influence the development of the OMO marketing plan. Furthermore, it is conducted to find out the actual situation of customer and the situation of the company. Through this study, the advantages, disadvantages and the competition of the OMO product was clearly highlighted

SITUATION ANALYSIS

COMPANY ANALYSIS

Mission Statement Attracting and building long lasting relationship with customers through effective communication is what the OMO product has been doing. It brings the wealth of knowledge and international expertise to the service of local consumers. Its mission is to add continuously vitality to the quality of life of consumers. OMO meets every day needs for hygiene and personal care with brands that help people feel good, look good and get more out of life. Its long term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously.

This is its road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.

Company objectives

Financial In order to achieve the good result for the future development and the mission of maximizing profit, pursuing a business growth strategy, year after year, OMO aggressively pursues the long term profitability and growth objective with the goal of gaining positive financial performance, specifically: * Earn an annual rate of return of at least 30% over the next 12 months. Produce net profits (before interest and tax) of 250 billion VND in 2013.

Marketing objectives In the long run

for the next 12 months, our company aims at becoming a market share leadership in the field of detergent powder. Specifically, the objective is to gain a market share of 68% of the domestic market. In order to reach this target, we have to:

• Achieve total sales revenue of 900 billion VND in 2011, which represents a 28% increase. Therefore, achieve a unit sale volume of 800 million products. Increase product awareness of OMO brand among target audience to 98% over the planning period.
• Inform target audience about features and benefits of our product and its competitive advantage, leading to a 10 percent increase in sales in one year. * Enter the higher-income segment of the 30 to 35 year old market with internet services and ordering capability.
• Enlarge our distribution network by 200% by the next 12 months.
• Aim for an average price of 28,000 VND per kilo in the long run.
• Increase loyalty among current customer Increase customer satisfaction and relationships

ENVIRONMENTAL ANALYSIS

Economic factor As the national living standard improves, the demand and need for common products are higher. However, when the inflation has been increasing in Vietnam in recent year, prices of many goods also increases uncontrollably and Vietnamese consumers have to pay more for daily-using products, including washing powder. Some recent statistics show that OMO’s price has increased by about 10,000 VND per kilogram since 2002 (Group 9 NH03, 2009).

This can makes most of consumer more reluctant when purchasing washing powders with higher price. They are likely to find cheaper substitutes to satisfy their demand.

If OMO keeps such a high price level, the number of consumer may reduce significantly no matter how much the company advertises for their products. This will be a big obstacle for OMO in the near future.

Demographic factor The Vietnamese population is increasing quickly, as the total population now reaches 90 million and this figure is believed to rise by 1 million per year (Vietnam Demographics Profile 2012).

Washing powder is a necessary good used across the country, hence Unilever has many opportunities to increase their sale volume and develop OMO product. Another good news for OMO is that Vietnam’s population density is higher and higher in big cities, especially Hanoi and Ho Chi Minh City (Vietnam Demographics Profile 2012). In addition, the fact that people are leaving the countryside for the city center to find better-paid jobs reduces the distance of delivery between buyers and sellers and saves transportation cost for the company.

Social/ Cultural factor Culture is a vital part of every society and the important cause of people’s wants and behaviours. Recognizing the important role of culture in promoting products, Unilever has focused on Vietnamese culture in many advertisements. For example, OMO flower fragrance is associated with the image of Vietnamese diligent housewives.

Technological factor In the technological era, every company tries their best to apply the newest technology to produce new products. In recent years, Unilever has invested much in R&D to have modern production lines and new technology which help reduce costs and add more features to their products (Unilever, 2011). Because of the technology advance, advertisements of OMO appear constantly in the media, hence

bring OMO much closer to the consumers. Therefore, technology enables OMO not only to enhance its quality but also to reach target consumers easier.

Political factor The government has a vital role in operating the business over the whole country. Vietnam is now implementing an open market policy by facilitating access to a wide variety of products. However, obstacles like tariffs and quotas on materials increase the price of many goods including OMO. Moreover, the regulations in Vietnam are not strict enough and people may commit illegal actions as in the case of a firm in Thanh Hoa province which produced fake OMO with a lot of stone (Huy, Q. , 2010).

Such problem may leave negative impressions of OMO brand in the customers’ mind. Nonetheless, the stability of Vietnam’s politics is still a significant factor that draws the interests of many international firms. 2. 6. Natural factor Today, most industries have to face a serious lack of resources and OMO is not an exception. Resources for OMO production have been increasingly exhausted because the main ingredients are fat acids derived from crude oil. In recent years, the oil price keeps going up, leading to the rise in costs of production and causes the price of OMO to increase.

Oil price increases also cause delivery cost to increase too. Moreover, nowadays, environment is a very hot issue; many companies have failed because they ignore the environmental concerns. The case of Vedan is one typical example. Producing environment friendly products is a good way to attract customers who want to do something good for the surrounding environment. To save the environment, every company

needs to follow the government laws, and take their responsibility to protect environment even when that will make their product more expensive. Unilever is successful with their waste treatment water process and receives good feedbacks from society (Unilever, n. d. ).

COMPETITIVE ANALYSIS

Nowadays, washing powder has become a common good and there are pretty much washing powder brands of different manufacturers in the market competing with each other for customers’ attention. Specifically, OMO are facing many competitors such as: Tide, Hoa Mo, Surf, Viso, Vi Dan. However, Viso and Surf are both products of Unilever while P&G owns Tide and Vi Dan belongs to Vico.

These two brands, especially Tide, are the most threatening rivals to OMO in the market at the moment. According to the statistics, OMO currently accounts for 60% of the market share, while Tide makes up 30% and other brands only contribute 10% (Group 9 NH03, 2009).

In Vietnam, there are many indirect competitors for OMO like Ariel, Amway, Lix, Lifeboy, Pamolive, Enchanteur, Lux, as they also provide washing products but concentrate more on washing water and soap.. Direct competitors Direct competitors are businesses that are offering identical or similar products or services as a person’s business. These are companies that customers can easily buy from instead of from that one, and they represent the most intense competition. In the situation of Vietnamese washing powder market, we can clearly see two strong competitors of OMO, which are Tide and Vi Dan.

In terms of global strategy, P&G is considered to be superior to Unilever with a more advanced position in many important market sectors.

By occupying Gillete and focusing on its strategic goods, P&G will continue to expand (Unilever vs. P&G (Procter and Gamble), 2009).

In terms of brand, while OMO has a series of products including OMO 99 Stains, OMO Bleach, OMO Matic Frontload and Topload, Tide also has a wide variety of products such as Tide Downy, Tide Spring Flower Scent, Tide Supermatic, Tide White and Clean… It targets all customers with different income levels and characteristics with different styles and features. Tide has launched many impressive promotion programs under the theme “Dirt can’t hide from intensified Tide,” “If it’s got to be clean, it’s got to be Tide” and “Tide’s in, dirt’s out. ” These programs attract a lot of people and gradually gain position in customers’ mind.

Disadvantages of Tide relative to OMO Firstly, P&G penetrates the Vietnamese market after Unilever. Vietnamese people know about OMO before Tide, and Comfort before the existence of Downy. In addition, the pronunciation of “OMO” is quite easy for Vietnamese while many people feel ashamed of pronouncing “Tide” in Vietnamese as it can easily cause misunderstanding. Moreover, the producer of Tide has not paid enough attention to the product design so Tide remains relatively simple and little changed (Unilever vs. P&G (Procter and Gamble), 2009). c.

Advantages of Vi Dan relative to OMO Besides Tide, OMO also has to pay attention to the existence of Vi Dan - a product of Vico Co. , Ltd. , a 100% Vietnamese washing powder brand. The brand name Vi Dan sounds very Vietnamese and familiar with Vietnamese people life. The price of Vi Dan is also much lower than

both Tide and OMO. Therefore, Vi Dan attracts more low income people and people in countryside (Phuong, K. , 2010). d. Disadvantages of Vi Dan relative to OMO Vi Dan is a small brand name so their products are distributed in a small areas and the scale is also small. Vi Dan is not popular in the market because VICO does not pay much attention to advertisement and promotion. This company also has little experience in producing and distributing. These drawbacks make customers know little about Vi Dan (Phuong, K. , 2010).

CUSTOMER ANALYSIS

Purchase occasion: regular occasionBenefits sought: clean and bright clothes, safety, labour-free, time-savingUser status: regular userUsage rate: heavy userLoyalty status: strong Readiness state: almost all Vietnamese households have tried OMO at least once (Unilever, 2011). Brand familiarity: preference or recognition (the most highly recognized brand in Vietnam in 2005, second rank in top 500 famous brand name in 2006) (Unilever, 2011).

Socioeconomic status: women are getting more important positions in society, holding responsible for choosing which domestic products to purchaseValues, attitudes and lifestyles: customers prefer products that can offer quick, safe and effective stain removal, modern style, natural sweet scent and family’s satisfaction.

Age: users of all age groups, especially those who are eighteen and above, mature, employed and marriedGender: mainly focus on female who are responsible for washings in a familyFamily size: extended families with two or three generations living in the same houseIncome: stable, medium to high income.

Density: focus on cities and towns with high population density such as Hanoi, Ho Chi Minh, Hai Phong, Da Nang,.. Decision type of the product: Routine

response behaviour OMO is a low cost, low risk and frequently purchased product. Therefore, the customers need little search and decision effort and mostly rely on past experience when buying this product. We need to satisfy current customers by maintaining sufficient quality service and value. We must also try to attract new buyers by introducing new features and using points of purchase displays and price deals.

BRAND ANALYSIS

Brand’s current performance Since the first day of appearing in Vietnam in 1995, through delivering the simplest and most efficient laundry, OMO are contributing to a cleaner and happier Vietnamese life. The consumers’ love for OMO brand is the highest recognition for what the company has been doing (Unilever, 2011). Theoretically, most of products follow 5-stage product life cycle and each stage is marked with certain sales growth and profit level (Kotler, P. , Adam, S. , Brown, L. , & Armstrong, G. , 2006). The five stages are product development, introduction, growth, maturity and decline, which represent an S-shaped life cycle.

Since OMO came to Vietnam, it seemed that this product has undergone 4 stages: product development, introduction, growth and maturity. Today, OMO is at the maturity stage because of some reasons: it is facing growth rate slowed down, supply of goods tends to rise higher than actual demand, having high pressure from large customers because of various choices of other brands. OMO is implementing some special strategies to deal with this period.

For instance, OMO is always changing to improve product quality to attract the attention of customers and maintain market share as adding washing powder for more active whitening

ingredients, bleaching 99 types of stains, flower flavors added to make clothes more sweet smelling, OMO also changes the products’ styles from package into plastic bags with many size for more convenient usage, or changes the color and image... Beside, OMO has applied cutting price strategies by increasing the amount of products without rising prices, promotional bonus, using the form of lucky draw, lucky scratch card, won gold, houses, cars, tours,… together with discounts in special occasions to attract more consumers’ attention.

To gain such a position in current marketplace, Unilever had an excellent marketing strategy for all of their products in general and for OMO in particular. It can be said that the company has applied the 4Ps framework effectively to promote the OMO brand.

Product: Characteristics: OMO is a product with high quality in comparison with other kinds of washing powders; it can dislodge completely any dirty spots on the clothes.

Brand name: OMO is the short name which is easy to remember and pronounce.

Packaging: Packaging is considered as a silent salesperson, and the most outstanding feature about packaging of OMO products is that it is very vivid, colorful, fresh, friendly, striking and very eye-catching. OMO's traditional colors are red, white, and blue. Packaging is always improved to create the highest aesthetics to consumers and ensure the product quality.

Size: To meet consumers’ demand, there are many kinds of OMO products with many sizes: 400g, 800g, 1. 5kg, 3kg, 4. kg, and 5kg.

Types of product: During development period, OMO always gives new products to meet the new demand as soon as possible.