Marketing Intelligence About Childrens Toy in Vietnam free essay sample

Children’s toys have been sold quite well in recent years in Vietnam. However, this fat land of hundreds of million dollar worth has been underexploited by the domestic producers. The fact is that 90% of toy on sales are originated from China and made in various types of materials such as plastic, metal, wood, cotton, and so on. Shops in some toy-selling streets show 500-1,000 items, including superman, moon sailors, dolls and battery-cars. Besides a few toy with educational features, a vast availability is for violent and anti-education toy products. According to Vietnamese standard, there are 26 indicators applied for children’s toys. However, none of the product currently available in the market meets these requirements of material safety, design and function. For this reason, experts said that Vietnamese companies should follow the specific way which helps them to take full advantage as think of product reach requirements which can not be provided by Chinese ones. We will write a custom essay sample on Marketing Intelligence About Childrens Toy in Vietnam or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page II. Detail: Task 1: assess current and potential market size and demand 1a) Identify market size growth and trends within a given market Market Size is measured by the total volume and or value of all sales in the market. Sales volume is measured in terms of the number of units of goods purchased, whilst sales value measures the total amount spent by customers on the volume of goods sold. The number of toy importers increase sharply in Vietnam. In this case, domestic toy take only 5% of the market share. To identify and estimate the market size, the marketer needs to base on three indicators such as number of buyers in the market, quantity purchased by an average buyer per year, and price of an average unit. As the marketer knows, the price of wooden intellectual toy is 20,000 – 180,000 VND/set, so the average price per unit is 100,000 VND. Vietnam is developing country. For this reason, the number of parent who have low or average income may not care much about this kind of educational toys. The customers of this product range will be urban people or high income households. The number of people living in main cities such as Ho Chi minh, Hanoi, Hai Phong, Da Nang, Hue, Nam Dinh, and Qui Nhon are 7,985,000 people (2005) . However, educational toys just are considered as potential, they are marked as â€Å"blank† on Vietnamese toy’s map. Therefore, the number of buyers in the Vietnam market is supposed about 3,000,000 customers. As the marketer knows, children usually receive gifts in special days as birthdays, children days and ‘Trung Thu’ days. Finally, the quantity purchased by an average buyer per year can be calculated: 100,000 VND*3,000,000 people*3 days=900,000,000,000 VND. In the term of 10-year growth, Vietnam market tends to favor the supplier, because there is usually a time lag before the supply side catches up with increases in demand. The increasing number of high income households makes ways for desire of high quality toys among their children. The toy sets that cost millions of VND like Barbie doll collection, technical tools or building bricks and branded as Mattel, Lego, Barbie, and Fisher-price are step by step occupying this high and segment of the market and Vietnam is evidence with a network of more than 130 shops opened nation wide. According to scenario, most of the left part of the market was taken by Chinese toys, which mainly target the children form average and low income families. Another trend is that the children are growing older youngers. They are more familiar with technology and require something more expressive and functional. In the current map of Vietnam’s toy market, educational toy are marked as â€Å"blank†. Over 2 years of discovery, some products are still struggling for foothole of their brand name in the market. The number of competitors are also limited to few, for example Duc Thanh wooden toys, Gamma Joint-stock company, Dai Phat tai, Hung Phat, Vinh Phuc Plastic companies and school Books and Equipment Company, and Etic as the one of a few companies that are qualified for export. Domestic producers are now targeting schools and parks rather than individual customers. Therefore, this segment of the market is considered as highly potential. Certainly, in the long term a growth market will attract new businesses, and thus increase competition. Moreover, summer is coming, parent always concern about the fact that what kind of entertainments is really reasonable and useful for their children. In order to meet that demand, the wooden intellectual toys become the priorities for children. This year, the children toy market has tendency toward the education. Vietnamese products are gradually emerging, despite less attraction; the consumers also pay a lot of attention to them because many Vietnamese suppliers offer free consulting service about health and safety for children, the manner to handle circumstances and the way of educating children. In fact, Vietnamese producers have been trying to put out ‘made in Vietnam’ products, but their products producers prove to be uncompetitive with Chinese ones in term of price and design. However, experts said in a recent workshop that Vietnamese companies could retain the market. For example, China once dominated the domestic market, but after that domestic Hanoi beer, Saigon Beer and halide have successfully dislodged the brand name from the market. Furthermore, the news that China-made toys have been recalled in many countries in the world has been worrying Vietnamese parent. Vietnamese government should have suitable policy to help the companies take full advantage to make their product meet the requirement on safety, and the products which aim to protect the users’ health and to develop their intelligence, which can not be provided by Chinese products. 1b) Plan and carry out a competitor analysis for a given organization This kind of product is new and in the long term period, the organization can not avoid appearance of competitors. In the next following, I will suggest the 5 competitive forces model Porter. 5 completive forces model The five forces are environmental forces that impact on a company’s ability to compete in a given market. The purpose of it is to diagnose the principal competitive pressures in a market and to assess how strong and important each one is. A business has to understand the dynamics of its industries and markets in order to compete effectively in the marketplace. Porter (1980a) defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business’ . The first of five forces is ‘the threat of substitute products’. The existence of close substitute products increases th e propensity of customers to switch to alternatives in response to price increases (high elasticity of demand). It depends on: †¢buyer propensity to substitute relative price performance of substitutes †¢buyer switching costs †¢perceived level of product differentiation The second one is ‘the threat of the entry of new competitors’. Profitable markets that yield high returns will draw firms. The results are many new entrants, which will effectively decrease profitability. Unless the entry of new firms can be blocked by incumbents, the profit rate will fall towards a competitive level: †¢The existence of barriers to entry (patents, rights, etc. ) †¢Economies of product differences †¢Brand equity †¢Switching costs †¢ Capital requirements Access to distribution †¢Absolute cost advantages †¢Learning curve advantages †¢Expected retaliation by incumbents †¢Government policies The third one is ‘the intensity of competitive rivalry’. For most industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc. †¢Number of competitors †¢Rate of industry growth †¢Intermittent industry overcapacity †¢Exit barriers †¢Diversity of competitors †¢Informational complexity and asymmetry Fixed cost allocation per value added †¢Level of advertising expense †¢Economies of scale †¢Sustainable competitive advantage through improvisation The forth one is ‘the bargaining power of customers’. It also described as the market of outputs. The ability of customers to put the firm under pressure a nd it also affects the customers sensitivity to price changes. †¢ Buyer concentration to firm concentration ratio †¢Bargaining leverage, particularly in industries with high fixed costs †¢Buyer volume †¢Buyer switching cost relative to firm switching costs †¢Buyer information availability Ability to backward integrate †¢Availability of existing substitute products †¢Buyer price sensitivity †¢Differential advantage (uniqueness) of industry products †¢RFM Analysis The last one is the bargaining power of suppliers. It described as market of inputs. Suppliers of raw materials, components, and services (such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work with the firm, or e. g. charge excessively high prices for unique resources. †¢supplier switching costs relative to firm switching costs †¢degree of differentiation of inputs presence of substitute inputs †¢supplier concentration to firm concentration ratio †¢threat of forward integration by suppl iers relative to the threat of backward integration by firms †¢cost of inputs relative to selling price of the product The Porter’s 5 Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you’re looking to move into . The wooden educational toys are diversified and target to reach the requirement of Vietnam’s standard. Certainty, company can not avoid competitors. There has 4 level of competition. They are: †¢Product form competition †¢Product category competition †¢Generic competition †¢Budget competition and entertainment The first one is the product form competition. In this case, it is the ability of competitive of wooden company about educational products with the other companies such as the safe, design and materials. The next one is the product category competition. It is the competitive possibility of wooden educational products with the other products. The third one is generic competition. It is the ability of competitive of wooden product with the other products in general. The final one is budget competition and entrainment. It is the wooden company’s ability of educational toys in compare with the other toys at the same budget. 1c) Evaluate an organization’s opportunities and threats for a given product or service There have many threats for wooden company when they approach Vietnamese market. Children’s toys have been sold quite well in recent year in Vietnam but it seems that this fat land of hundreds of million dollar worth has been underexploited by the domestic producers. According to the scenario, the most recent survey by Hanoi Market Management Department shows that 90% of the toy on sales are originated from China and made in various types of materials e. g. plastic, metal, wood, cotton, and so on. . Shops in some toy-selling streets show 500-1,000 items, including superman, moon sailors, dolls and battery-cars. Besides a few toy with educational features, a vast availability is for violent and anti-education toy products. Following the Vietnamese standards, there are 26 indicators applied for children’s toys but none of the currently available in the market meets these requirements. On the other hand, no requirement has been set for import products, which are now available everywhere in the domestic market and most of them are sourced from China. Chinese toys target the children from the average and low income families. Besides, the fact is saying that the domestic market is now dominated by Chinese products, although Vietnamese produces have been trying to put out ‘made in Vietnam’ products but their products prove to be uncompetitive with Chinese ones in terms of prices and design. For all these kind of reasons, Chinese toys are very strong to compete. Despite of challenges, Vietnamese market is also a highly potential because over 2 year of discovery, some products are still struggling for foothole of their brand name in the market. The number of competitors is also limited to few. It means the advantage for wooden company. Domestic producers are now targeting schools and parks rather than individual customers. Therefore, this segment of the market is considered as highly potential. Moreover, when summer’s coming, parent concern about what kind of entertainment is really reasonable and useful for their children. With some limitation of weather this year, many parent would like their children to stay ay home to play while learning similar with the education method in some developed countries in the world. In order to meets the requirement, the wooden intellectual toys become the priorities for the children, because, according to many parent, these toys can help children develop their creativeness, the exercising skills together with the plentiful imagination. This year, the children toy market has a tendency toward the education. Vietnamese products are gradually emerging, despite less attraction, the consumers also pay a lot attention to them because many Vietnamese suppliers offer free consulting services about health and safety for children, the manner to handle circumstances and the way of educating children. Vietnam has never had a real toy industry but it also a good condition for the development pf the toy industry. In addition, Vietnamese government should have suitable policy to help the companies take full advantage to make their product meet the requirement on safety, and the products which aim to protect the users’ health and to develop their intelligence, which can not be provided by Chinese products. If Vietnamese companies follow the right development track, have suitable policies for investment and cooperation, it will be able to develop a toy industry which could make products for domestic demand and for export. Task 2: Discuss the importance of customer satisfaction and feedback 2a) Identify and evaluate techniques of assessing customer response In order to identify and evaluate customer response, after having their compliments about company’ s product, company can use some technique such as do survey research, 2b) Design and complete a customer satisfaction survey The questionnaire was designed to collect customer’s opinions about company product or services to ma ke the necessary improvements. The questionnaire contained 12 questions. It is divided in 2 parts. The first part is demography, ask interview about their gender and age to distinguish the percentage of male or female use company product or service. The second part, ask them about their satisfaction of product and service. Question 1 asked them time they use company product or service to find regular customer, target customer. If they use the service and buy good often they will know what the service or product need to make the necessary improvement. Question 2 asked them about the purpose in last time they used to define exactly what they need. Question 4,5 and 6 asked them about their satisfaction when they use the product and service.