Essay About Vietnam Cosmetic Market And Product Innovation

Vietnam Cosmetic Market – Swot Analysis
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SWOT AnalysisOpportunity: 1. The relatively weak of domestic cosmetics industry, foreign brands are 90% in the market, domestic brands only accented for 10%.2. Foreign brands in Vietnam always have advantages like huge distribution and service network, savvy advertising campaigns, sustaining product innovation.3. Vietnamese have higher consumption levels and requirements of high quality nowadays, that lead Vietnam markets become high potential market, more and more young generations start to become consumers of cosmetics, industry growth rate is increasing year by year, so that there is great market potential and prospect.4. Open social environment and health concept, consumers have higher health and beauty consciousness. Because of urbanization, lead to growing consumer group, the whole cosmetic market rises very rapid.5. Hallyu in Vietnam is also very obvious situation, banking on the appeal of Korean pop culture as well as with Korean celebrities appeal on the advertisement, so that Korean cosmetics occupy the largest share of industry.6. The impact of the widely use of Internet allowed consumers easily get access to buy cosmetics, the more cost effective way also made the cosmetics become the online shopping hot.THREATSBecause many countries has saturated cosmetic markets, Vietnam’s untapped cosmetic market is attractive and appeal to a lot of world-famous companies to entry Vietnam, number of competitors increase rapidly.Intensely industry competition, short product life cycle of cosmetics requires a lot for companies to adapt to it ad gain some advantages from other rivals.Although for now domestic brands are at disadvantage position, and expert think that they can gain more markets share because natural materials in Vietnam are still good and enough for domestic companies to utilize it, what’s more, domestic companies have more knowledge about local people habits and preference. Such as according local climate, add some mint, citronella into cosmetic products.There are many substitute products in this industry, the function of these products are similar, even there are some famous brand entering Vietnam market, that attract many consumers, the risk of product substitution is serious.The fierce competition of cosmetics advertisement, and advertisement play a important role in consumer selection of cosmetics.StrengthLG vina has long-standing history, abundant experience of manufacturing and sales, normative product quality standards. Some brands of LG vina has high popularity in Vietnam, they have lots of high loyalty customers. Such as WHOO, O HUI are also well-known in whole Asian markets with premium brand image. They accumulated the rich brand value and brand recognition, they can make use of these brand advantages.Reasonable company product market strategy, specific targeted consumers. For different consumers they offered different pertinence products. Like the target segments like premium, high and middle classes. Realized product diversification, better meet different needs of customers, produce products by considering the targeted customer characteristics.They also set some important parts of market diversification, adequately understand and make use of market segmentation as well as features of consumer distribution. Reach the customers with different distribution channels. Internal production control mechanism is excellent, for example the quality supervision and production process control mechanism, so that reduce the uncertainty of product aspects.It is a subsidiary of LG household &health care developed in Vietnam. It has their own enterprise culture. Their enterprise culture keep the concept of customer-driven, even set up advanced customer management information system to ensure customer satisfaction, and analyze the existing customers and forecast of future customer structure, help the company improve its strategy.Making the use of “korean wave”, it increases the brand awareness and customer motivation of LG vina. By the first mover of Korean cosmetic brand in Vietnam markets, it has strong advantages.The company has abundant capital actual strength, modern management system, as a joint venture. Have enough external stakeholders to supervise the internal product manufactures and managers, to ensure stable operation of the company as a whole, and reduce the impact on products caused by company turmoil.WeaknessThe company lack of innovation consciousness, although they aimed at different customers, they pay more attention to satisfy needs of most customers, but invest little in innovation products to gain comparative advantage.More and more competitors entering Vietnam cosmetic markets, they try to grab market share from LGvina. Their core competitiveness used to be first mover in Vietnam and their premium brand image. But now some famous high quality products and substitutes appear in the same market, so customers may change their purchase habit to another brand.Due to limitation on special raw material and its original place, the pricing policy is based on material cost rather than market itself which does harm to profitability and other competitiveness. The market share will shrink and potential benefit will be lost without industrial price advantages.Production equipment compatibility is very poor, meanwhile the imported equipment for production increase the fixed cost, including transportation fee and import tax. The continuing operation, repairing and upgrading give rise to the operation cost and then influence the whole return.Being out of trend and simple approaches of promotion and marketing fail to attract enough consumers to maintain its former sale scale, make promotion effect weakened gradually.