MINISTRY OF EDUCATION AND TRAINING

UEH UNIVERSITY

COLLEGE OF BUSINESS
~~~~~ 🙝 🕮 🙟 ~~~~~

FINAL REPORT
Business Marketing

Instructor: Ph.D. Đinh Tiên Minh

Course ID: 22C1MAR50315702

Course: 46

Group: 05

Ho Chi Minh City, 29th November, 2022

 MINISTRY OF EDUCATION AND TRAINING

UEH UNIVERSITY

COLLEGE OF BUSINESS
~~~~~ 🙝 🕮 🙟 ~~~~~

FINAL REPORT
No. Student Name Student ID Email

1 Lê Huỳnh Hữu Ân 31201023341 anle.31201023341@st.ueh.edu.vn

2 Nguyễn Tuấn Hưng 31201020342 hungnguyen.31201020342@st.ueh.edu.vn

3 Nguyễn Ngọc Thanh Ngân 31201026514 ngannguyen.31201026514@st.ueh.edu.vn

4 Trần Thu Tâm 31201025736 tamtran.31201025736@st.ueh.edu.vn

5 Nguyễn Thị Hồng Vân 31201021162 vannguyen.31201021162@st.ueh.edu.vn

6 Nguyễn Phương Vy 31201027040 vynguyen.31201027040@st.ueh.edu.vn

Ho Chi Minh City, 29th November, 2022

 ACKNOWLEDGMENTS

In order to complete this research paper, in addition to the team's efforts, it is

impossible not to mention the support of lecturers, Dermarium enterprises and business
partners, shops/spas who participated in the interview.

Our team would like to express our sincere thanks to the instructor, Ph.D. Dinh
Tien Minh for guiding us during the implementation of the project, thanks for his
detailed comments and suggestions for the project to be successful. smooth execution.

The team would also like to thank Dermarium, Stores/Spa who participated in the
interview to provide information and suggestions for the first steps of the research
process so that the team could have more ideas for the topic.

In the process of implementing the project, the team has put a lot of effort, but it
can be difficult to avoid shortcomings. The team hopes to continue to receive
suggestions from Instructors, Dermarium, and Stores/Spas to have the opportunity to do
better research in the future.

Once again, our team sincerely thanks!

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 TABLE OF CONTENTS
ACKNOWLEDGMENTS ............................................................................................. I

LIST OF TABLES ........................................................................................................ V

LIST OF PICTURES ................................................................................................... V

CHAPTER 1: INTRODUCTION OF BUSINESS .....................................................1

1. About Dermarium ....................................................................................................1

1.1. Overview of Dermarium...................................................................................1

1.2. Business analysis ..............................................................................................2

1.3. Long-term goal .................................................................................................4

1.4. Product line .......................................................................................................5

2. Business model ........................................................................................................5

2.1. Business model .................................................................................................5

2.2. Position and role of members in the distribution channel ................................6

2.2.1. Dermarium .................................................................................................6

2.2.2. E-commerce platforms ..............................................................................6

2.2.3. Business Customers ...................................................................................6

2.3. Advantages and disadvantages of B2B relationships .......................................7

2.3.1. Advantages ................................................................................................7

2.3.2. Disadvantages ............................................................................................8

3. Purchasing process of stores and sales process of Dermarium for partners ............9

CHAPTER 2: SEGMENTATION, TARGETING, AND POSITIONING MODEL

.......................................................................................................................................14

1. Segmentation .........................................................................................................14

2. Targeting - Selecting the target segments .............................................................26

3. Positioning .............................................................................................................28

3.1. Secondary data aggregation ............................................................................28

II
 3.2. Qualitative interview: .....................................................................................29

3.3. Qualitative interview questionnaire ................................................................30

3.4. Interviewee’s Information ..............................................................................31

3.5. Qualitative interview results ...........................................................................32

3.6. Positioning map ..............................................................................................33

CHAPTER 3: THE PROBLEM OF ENTERPRISES AND PROPOSED GROUP

SOLUTION ..................................................................................................................38

1. Lack of marketing activities leading to less impact on users purchasing decision

...................................................................................................................................38

1.1. Problem Explanation ......................................................................................38

1.2. Impact of problem ..........................................................................................39

1.2.1. For business .............................................................................................39

1.2.2. For consumers .........................................................................................40

1.3. Solutions proposed by Group .........................................................................41

2. Product packaging through production batches is sometimes not uniform, making

it difficult for customers to identify...........................................................................46

2.1. Explain the problem .......................................................................................46

2.2. Impact of the problem ....................................................................................46

2.2.1. For Businesses .........................................................................................46

2.2.2. For consumers .........................................................................................47

2.3. Solutions proposed by Group .........................................................................47

2.3.1. Theoretical proposal ................................................................................47

2.3.2. Apply the theory to propose solutions .....................................................48

3. Restrictions in distribution channels and consumer confidence ...........................54

3.1. Explain the problem .......................................................................................54

3.2. Impact of the problem ....................................................................................55

III
 3.2.1. For businesses ..........................................................................................55

3.2.2. For consumers .........................................................................................55

3.3. Solutions proposed by Group .........................................................................56

3.3.1. Theoretical Proposal ................................................................................56

3.3.2. Applying the theory to propose solutions................................................58

CHAPTER 4: CONCLUSION AND RECOMMENDATION ................................60

1. Conclusion .............................................................................................................60

2. Recommendations .................................................................................................60

RELATED PROOF: .................................................................................................... A

REFERENCES ............................................................................................................. A

PLAGIARISM SCAN RESULTS ............................................................................... D

IV
 LIST OF TABLES

Table 1: Major Variables used for Segmenting Business Markets

Table 2: Classification of products Dermarium

Table 3: Purchasing Process of Stores and Sales Process of Dermarium for partners

Table 4: Simple Matrix System for Selecting Target Segments

Table 5: Targeting market of Dermarium.

Table 6: Secondary data about Dermarium and other cosmetic brands.

Table 7: Qualitative interview questionnaire

Table 8: Interviewee’s Information

Table 9: Qualitative interview results

Table 10: Secondary data of Criteria for selecting a supplier

Table 11: The evaluation of Product quality of 6 Stores

Table 12: The evaluation of 6 Stores about Price.

Table 13: Everage evaluation of product quality and price

LIST OF PICTURES

Figure 1. Dermarium's product distribution model

Figure 2. Positioning Map of Dermarium and other cosmetic brands.

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 CHAPTER 1: INTRODUCTION OF BUSINESS

1. About Dermarium

1.1. Overview of Dermarium

Dermarium is a cosmetic brand under the Golden Tree Trading and Service Co.,
Ltd. based in Hanoi, Vietnam, specializing in providing optimized personalized skin
care products active ingredients to suit the skin of Southeast Asians in general and
Vietnamese people in particular. This is a brainchild developed by the founder of Ket
Xen – also known as Cong Chua Dong, and co-founder is a PhD in Biopharmaceuticals
& Cell Technology at the University of Oxford. Dermarium is produced entirely in
Vietnam and officially launched in the market in mid-2021. This domestic brand was
born with the desire to spread the passion for learning and respect for science of skin
lovers and owners active in self-care.

The name Dermarium is a combination of Dermatology and Laboratorium: a skin

laboratory. Dermarium aims to cherish condensed values with three bright points:
experience, knowledge and pride – proud of a cosmetic brand for Vietnamese people
with experience and knowledge not inferior to other international brands.

The company's slogan is "Not the good, not the bad, but the right". With the desire
to bring Vietnamese cosmetics to the world, Dermarium's products carry the "right"
criteria, the "right" ingredients in the formula, are clean, simple and practical, with no
room to waste; “all Dermarium products are composed of all functional ingredients and
only functional ingredients” (Dermarium Story).

Dermarium upholds minimalism and optimization in the product development

process. This means that for each active ingredient, the company will individually
research the formula and develop a top-notch product to optimize the product's effect on
the skin, instead of trying to put many active ingredients in the same product and then
reduce the cost of the product. Each product of Dermarium is exclusively developed
with 4 "immutable" principles:

- Optimal formulation: Dermarium only selects the right ingredients with a certain
concentration, delicately blended to ensure active ingredients. optimized and
highly effective for users.

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 - Scientific background: With a co-founder who is a PhD in Biomedical Science,
the scientific foundation is the "guideline, backbone and foundation of all
practices and statements" of Dermarium.

- Originality: Dermarium products are exclusive, say no to similar products

existing on the market. This is made possible by the fact that Dermarium owns
its own cGMP standard factory and independent laboratory that is convenient for
product research and development.

- Respect for the skin: Dermarium studies the integrity of its products and
prioritizes the use of ingredients with antioxidant, anti-inflammatory and
soothing, nourishing properties.

1.2. Business analysis

Table 1: Major Variables used for Segmenting Business Markets

Variables/Bases

Macro-Variables

Type of industry, - Type of industry: Dermarium is a cosmetics business that focuses

type of customer on facial care and has a strong focus on functional ingredients that help
the treatment of acne and skin healing.

- Type of customer: Dermarium's business customer base is currently

concentrated in two main groups: small and medium-sized cosmetic
stores (online and offline) and beauty spas.

1. Company size, The capacity to supply items is not really optimized because the
usage rate company's size is still ordinary. Dermarium ought to concentrate on the
small and medium business market since it has a steady consumer base
despite not requiring many imports.

2. Customer Since Dermarium is still primarily focused on growing its local market,

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 location, the majority of its clients are businesses operating in Vietnam,
geographic area including 10 provinces dispersed throughout the nation with almost 20
distributors.

Micro-Variables

1. Buying - New task: Businesses that are unfamiliar with the brand or who are
situations: new still uncertain about the product's quality because it is a Vietnamese
task, straight brand.
rebuy - Straight rebuy: used to distribute products, overall they are satisfied
with the process of importing and distributing products as well as
quality and price.

2. Organisational - Knowledge in skin care: understand characteristics of active

capabilities ingredients in products, how to combine different products to address
customer needs. Therefore, Dermarium provides specialized training
in cosmetic knowledge to all of its customers

3. Purchasing Large-scale customers often have complex purchasing policies, require

policies a clear process and focus on the price agreed between the two parties
based on the market price. Small and medium-sized customers often
ask for service contracts, conditions and incentives for purchases,
reasonable discounts and production standards.

Dermarium's policy requires customers to have a stable end-user sales

policy, ensure a high support and warranty policy, and design a skin
care routine for users if needed. The company does not focus and apply
KPIs to its customers, but cares more about the ethics of the business

4. Purchasing Businesses that cooperate with Dermarium have the greatest concern
criteria about stable sales and supplier's after-sales policy. Besides large and
reputable retail chains with large financial resources, most small

3
 business customers need support in marketing plans to improve brand
awareness.

5. Personal - Honest, straightforward

characteristics - Willing to learn and improve personal knowledge

- Business ethics: sell the most suitable products for the customer's skin
condition, do not force the sale of products with high profit margins.

1.3. Long-term goal

Dermarium comes from a small cosmetics store, is the brainchild and passionate
embrace of Founder Ket Xoan - a beauty blogger who has had a lot of experience and
knowledge in the cosmetic industry for a long time before. Dermarium was born when
the saturated cosmetic market at that time could not meet her satisfaction, the beauty
industry was engulfed in marketing tactics of product polishing, inaccurate information,
and mixed cosmetics. Chemicals are then hailed as "divine water" that can cure all
defects, products are labeled "no chemicals", etc. Born in that situation, Dermarium
carries the criterion "Between the Good and the Bad, we choose the Right” (Not the
good, not the bad, but the right).

The goal of the brand is to bring science into each product, using the knowledge,
understanding and through thorough research to offer each product with each use
suitable for the needs of the skin. Each product of Dermarium is unique, does not contain
substances with "omnipotent" effects, but only concentrates on a single active ingredient
to optimize its effects on the skin of consumers. Dermarium products all give genuine
value to skincare steps on the brink of oblivion, emphasizing the need for knowledge
and trying to stand out in the saturated cosmetic market. What Dermarium wants is to
bring customers the most optimal products, bring the best use to make their mark.

In addition, Dermarium also carries the Founder's desire to be able to bring

Vietnamese cosmetics on par with world powers. Currently, Vietnamese brands have
not really been marked on the map of the cosmetic industry, users are still afraid of
products labeled "domestic". Dermarium was born with the desire to change that
perspective of users, proving that its products are not inferior to the "big men" in the

4
 world cosmetics village in terms of the effectiveness that it brings. Along with that
dream, the company is constantly trying to absorb, improve and focus on developing
products day by day to prove and assert itself.

1.4. Product line

Dermarium product line completes a typical skin care routine including products
from cleansing to moisturizing to skin care. Therefore, to classify products of
Dermarium will be based on product features according to the following table 2:

Table 2: Classification of products Dermarium

Features Cleansing Exfoliating Toner Moisturizing Serums

- Goodnight - Bitter Sweet - Fairy Water - Ease - Liquid Amber

- The one - Rough Addiction - Velvet Dream - Rescuer - Omnipotent

- Hybrid - Tender Wonder - Coastal - Quenching

- Tricky Duet Breeze Queen

Product
- Coastal Breeze

- Liquid Sapphire

- RS Warrior

- Silver Moonlight

2. Business model

2.1. Business model

Figure 1. Dermarium's product distribution model

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 2.2. Position and role of members in the distribution channel

2.2.1. Dermarium

The leading position in the distribution channel is Dermarium - directly

operating its channel system. Dermarium takes on the role of making products and
finding ways to get its products into the hands of consumers through other channel
members.

Taking the general role, Dermarium must determine the direction of the
business as well as the direction of distribution channel management. Set import
conditions, negotiate prices, shipping methods as well as share information with your
agents. Currently, the company does not directly distribute retail or has its own store,
but only sells through e-commerce platforms and first-level agents, spas throughout
the provinces in Vietnam.

2.2.2. E-commerce platforms

The e-commerce platforms that Dermarium has now joined include Shopee,
Lazada, Tiki and Tiktok Shop, which have been well received by consumers. E-
commerce platforms help Dermarium to connect and contact customers faster in the
current Internet era. Special e-commerce also helps Dermarium to distribute products
continuously, not limited by time and geographical distance.

2.2.3. Business Customers

Although only officially launched in a short time, as of July 2022, Dermarium's

distribution agent partners have had 20 sales points at stores nationwide:

Ho Chi Minh City: 4 stores

Hanoi: 9 stores

And 7 stores in many other provinces such as Cao Bang, Quang Binh, Da Nang, ...

Along with having a distribution channel throughout the country, especially

penetrating into markets in major cities such as Hanoi and Ho Chi Minh City, this has
partly helped Dermarium get detailed information about the level of interest,
personality, and tastes of customers in each region. From here, the company can
research and develop products according to the preferences of consumers as well as

6
help Dermarium get more data in the process of marketing research as well as
managing distribution channels of the business. Resellers and retailers also help build
relationships with customers through the process of getting products into the hands
of buyers, indirectly helping Dermarium build and maintain relationships with current
and potential customers.

Currently, Dermarium is distributing to 2 Spas in Quang Ninh and Can Tho.

Spas have a dedicated client base, construction site, and certain foot traffic. Unlike
traditional retail, selling beauty products through a spa is about combining skin
treatments with its products. Based on that, with appropriate skin care treatment
services, helping Dermarium sell products as well as have loyal customers because
when consumers find a product they like, they will keep coming back. Therefore, this
is also an effective way of entering the market for Dermarium.

2.3. Advantages and disadvantages of B2B relationships

2.3.1. Advantages

- Higher profits: Companies often sell their items in wholesale quantities so that
buyers can get a good deal and need to restock less often. Larger order numbers lead
to higher potential sales and more cash coming in for B2B sellers. At the same time,
the ease of advertising to other businesses through B2B websites can help cut
marketing costs and boost conversion rates.

- Flexible Terms: With contracts, you often have more flexibility in terms than with
B2C contracts. This can be helpful if you need to tailor your products or services to
fit the needs of your business customers. Companies can also negotiate longer
payment terms, which can give more time to provide your products or services before
you need to be paid.

- Identify new opportunities: Identify new opportunities by solving customer

problems or meeting their needs. When Dermarium interacts with customers through
B2B marketing, Dermarium gets to understand their challenges and see how you can
provide solutions. As such, Dermarium can find new opportunities and develop
powerful products with better features that customers will be willing to buy.

7
- Shared Resources: The company may be able to use each other's resources to do
better or be more profitable. For example, that could involve collaboration in
promotion, the transportation of goods, operational synergies, etc.

- Product improvement: Dermarium is able to interact with its customers.

Customers can raise concerns about a product if they don’t like it or suggest some
ways a business can improve it. Through customer interaction with the business
during B2B marketing, Dermarium is able to improve its products.

- Increased customer lifetime value: The increased lifetime value of existing

customers can be another significant advantage. Since businesses tend to have longer
lifespans than individuals, they can provide a steadier stream of revenue for
Dermarium over time.

- Save marketing costs: Instead of Dermarium having to self-market to end users,

business partners also need to advertise the products they sell, the number of potential
customers /reach is also higher than Dermarium doing marketing themself.

2.3.2. Disadvantages

- More complex setup process: Getting started as a B2B retailer takes work to figure
out how to get customers who stay dedicated and make large-enough orders. This
often requires thorough research to advertise to potential businesses, set up a custom
ordering system and adapt quickly when sales are underwhelming.

- It takes longer to make a buying decision: More people are typically involved in
the decision-making process when dealing with larger budgets. This can take longer
to close a deal, which can lengthen your sales cycle.

- Need for B2B sellers to stand out: At the same time, the B2B market has many
companies competing and selling similar products and services. Dermarium will need
to cut prices and find special ways to grab companies' attention to succeed in the
market.

- Building brand and product awareness can be difficult: When selling to

businesses, they may need to be more familiar with your brand or product.
Dermarium may need to spend more time and effort on building brand and product

8
 awareness before starting winning business deals. May affect branding because
business customers will create their own marketing materials

- Special ordering experience needed: Dermarium needs to put much effort into
designing a website and ordering system that buyers find easy to use. This means
presenting product and service information clearly, offering online demos or
consultations and using order forms with appropriate options for quantities and any
special customization needed.

3. Purchasing process of stores and sales process of Dermarium for partners

Building a sales process is the construction of steps in selling goods and products
of the business and finding partners. These steps will determine whether the business
can sell and create competitiveness in the market. The Dermarium sales process is also
analyzed in the following key steps:

Table 3: Purchasing Process of Stores and Sales Process of Dermarium for partners

Stores Sales Process of Dermarium for

partners

Step 1: Anticipating needs/problems Step 1: Find potential customers

and offering common solutions The question to be asked is “When
Stores/ Spas will purchase products in potential partners have intended to import
the following cases: goods for distribution and find suppliers,

+ When a customer has a request what will Dermarium do to be able to

for a certain type/group of cooperate with these potential partners?”
products Dermarium does not have a retail

+ When the products currently channel but is only distributed through e-

selling is not attractive and need commerce platforms and partner stores
to find a better product and spas. Dermarium products are posted
and advertised on social networking
When the product stock is not enough,
platforms such as Facebook, Instagram,
must proceed to import

9
Step 2&3: Identify, describe the Tiktok or reviewed and evaluated by

characteristics, quantity of products Beauty Bloggers and its users through

beauty groups, Blogs, etc. From these
- Stores/Spas assess the suitability of a
platforms, those interested in becoming a
product for trading based on the
partner with the brand will find out and
following factors/criteria
contact Dermarium on their own. Through
+ Price: low range, mid range, high that, the two parties will approach and
+ quality Quality: easy to use, wide consider if appropriate, the company will
range of products for all skin types agree with the customer to become an
official partner.
+ Supplier reputation: authentic, good
reputation, trending on social media This is also the main form of access
to potential Dermarium partners that the
+ Quantity: based on production
team obtained through interviews with
volume pre-sale products,
their current official partners. Most of the
upcoming seasonal market events
partners come to Dermarium on their own
after evaluating the brand on social
networking platforms, experiencing it
themselves and besides the reputation and
prestige of Founder Ket Xoan. Dermarium
partners are also carefully selected by the
company with high requirements in terms
of knowledge, experience and
background, able to advise customers.

Step 4: Find potential suppliers Step 2: Approaching customers

- Stores/Spas select cosmetics suppliers Dermarium always follows the criteria of

through a number of sources such as not looking for partners based on sales or
beauty blogs, work groups beauty on sales ability, it looks for partners with a
social networks, sales calls, word of background of knowledge and business
mouth) ethics. After connecting with potential

- Some criteria of cosmetics that partners in line with this orientation,

Stores/Spas want when choosing Dermarium will provide them with all

10
suppliers include quality, expiry date, necessary information for cooperation
delivery policy, ... including: Information about products,
existing product lines; Quotation; User
manual; Legal documents and contracts,
commitments attached. In addition, the
company will also provide a business
proposal including:

Introduction or overview: providing an

overview of information about the
business.

Scope and products: describe the products

the business will provide to partners.

Delivery time: Estimated time the partner

can receive the product after placing an
order.

Payment: provide a payment method,

deposit, ... in accordance with the
conditions of the partner and determine the
time to make the payment.

Step 5: Collect and analyze quotations Step 3: Quotation and persuasion

After finding potential suppliers, Providing

Stores/Spas will collect and analyze To potential partners, in order to
quotations based on the following become the ultimate supplier of choice for
criteria: customers, Dermarium commits to the

● Product characteristics following:

● Price product versus other ● High-quality products at more

suppliers/for product value competitive prices; Clear return policy:
Dermarium always tries to bring the
● Delivery time
best products in its ability to its
● Payment terms customers. All products go through

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● Taxes and applicable obligations many stages of careful selection from

● Shipping costs (or freight) the laboratory to the factory before

reaching customers. About return
policy: no time limit if there is a
Step 6: Evaluate quotation and select manufacturer's fault. Errors arising
supplier during use will be handled on a case-
by-case basis.
Stores/Spas evaluate quotation and
select supplier based on a number of ● Building long-term relationships with
factors such as: preferential policies, and wholesale
prices for partners (spa, small and
- Quality of potential supplier's
medium stores): Dermarium provides a
product compared to price of the
discount policy for partners and product
company/competitors in the same
support during promotions. Currently,
segment.
Dermarium does not have its own
- Offer/subsidy that potential
policy, but in the future will deploy new
suppliers offer to distributors
product experiences for loyal
(send new products, wholesale
customers.
prices, ...).
● Apply multiple payment methods,
- Potential supplier's delivery
including cash, wire transfer, COD
policy compared to competitors.
shipping…
- What policies does the potential
● Ensure that products and production
supplier have for loyal/longtime
batches are of consistent, consistent and
customers?
comparable quality, packaging, and
Potential supplier's products have quality: Dermarium has QA (quality
guaranteed quality/uniform packaging assurance) and QC (quality control)
when used from batch to batch. If during the manufacturing process,
something goes wrong, the return however if a defect occurs (less than
process has its advantages or 1% of the product is controlled),
disadvantages. Dermarium proceeds to return it via
shipping units or according to
regulations of e-commerce platforms

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 depending on the time and place of
purchase.

● Ensure customer service, and other

policies when purchasing and receiving
feedback via email.

Step 7: Choose a purchasing process Step 4: Agree and make a sales contract

After choosing a supplier, the When a potential partner makes an

Store's ordering process is concerned agreement on the quantity of goods to buy,
with the following factors: the payment policy, etc. and decides to

+ Quantity of products to buy become a distributor of Dermarium, the

company will officially enter into a
+ Store's order frequency and
contract with specific terms on payment
delivery schedule
method, deposit, payment time, frequency
+ Determine the required amount of purchase, etc. With partners,
of product to reserve Dermarium also does not offer any
+ Select and negotiate a form of contract or force on sales/KPI for products
payment, the amount of deposit sold.

Step 8: Post-purchase feedback and Step 5: After-sales customer care

evaluation After purchasing and distributing
Spa/Store makes a decision whether products, partners will conduct an
to continue purchasing from an existing assessment of product quality, delivery
supplier or to choose a new supplier time, product price, ... to decide to
based on the following factors: continue. Import products from

+ Product quality Dermarium or find new suppliers. From

here, the company will make
+ Is the delivery time correct? Is
commitments on long-term policies such
the delivery method convenient?
as:
+ Is the payment method suitable?
● Providing quality products as
+ Is the care and support policy committed to partners.
good?

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 ● Delivery within the agreed

● Provide ongoing training and

technical support/advice to customers
in dealing with the end users

CHAPTER 2: SEGMENTATION, TARGETING, AND POSITIONING

MODEL

1. Segmentation

Table 4: Simple Matrix System for Selecting Target Segments

Store (include Cosmetic retail

Spa Pharmacy
Online + Offline) chain

Size $162.32 million $81.16 million $111.06 million $81.16 million

(Allied Market (Allied Market (Allied Market (Allied Market

Research, 2020) Research, 2020) Research, 2020) Research, 2020)

No.of 3 Cocoon, Zakka, 2 Zakka, Paula’s 2 Cocoon, 2 Cocoon,

competitors Paula’s Choice Choice Paula’s Choice Paula’s Choice

Major - High brand - Paula’s - Paula’s - Cocoon: focus

competitors’ awareness. Choice: High choice: High on a specific
strengths - Distributor brand brand segment

support policy awareness, clear awareness, clear (benign, diverse

(delivery, product origin product origin products that

payment, ...) and quality, and quality, meet many

diverse product large number of different needs),
- Stable financial
lines, strengths loyal customers pay close
position.
in restorative - Cocoon: focus attention to the
- Large number products and chain of
on a specific

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 of loyal active segment distribution
customers ingredients (benign, diverse clients to

- The quantity of - Zakka: Strong products that distribute the

goods is always resource of spa meet many product, have

guaranteed different needs), huge budget for

pay close supporting chain
- Cocoon:
attention to the - Paula’s
Products are
chain of Choice: High
benign, diverse,
distribution brand
and meet many
clients to awareness,clear
different needs
distribute the product origin
of users.
product, have and quality,
huge budget for large number of
supporting loyal customers
chain
distributors

Major - Zakka: medium - Paula: requires - Paula: - Paula: requires

competitors’ brand awareness, the distributor's Requires the the distributor's
weaknesses low market expertise to distributor's expertise to
coverage advise on the expertise to advise on the

- Paula: requires right product. advise on the right product,

the distributor's high price right product. high price range.

expertise to range, requires high price - Disputes

advise on the large and fixed range, between the
right product, quantities of - Disputes retail points of
high price range, goods to buy. between the the distribution
requires large rigorous process retail points of networks in

and fixed for selection the distribution terms of price

quantity of goods and screening. networks in and sales
to buy. rigorous - Zakka: terms of price territory.

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 process for currently only and sales - Difficulty in
selection and distribute for territory. managing prices
screening. the brand’s spas - Difficulty in

- Cocoon: brand managing prices

is not focused on
this segment

Company - Mid-range - Mid-range

strengths price price

- Certain level of - Good business

awareness ethics.

- Famous for - Have good

high quality knowledge of
products. skin care,

- Good business participate in

ethics. deciding the
formula of the
- Have good
product
knowledge of
skin care, - Company

participate in policy to create

deciding the maximum

formula of the conditions for

product partners

- Company
policy to create
maximum
conditions for
partners

Success factors Preferential Well-known Well-known Well-known

16
 purchasing brand, high brand, trending, brand, trending,
policies, a well- quality loyal customers, stable sale, loyal
known brand, specialized high reputation, customers, high
and rigorous products easy-to-use reputation, easy-
standards for the products to-use products
products

Compatibility High Average Average Low

with company’s
long-term
objectives

Analyzing:

A. Size (Million USD)

● Store (Online + Offline)

The market for skin care products in Vietnam as a whole was valued at 854.3
million USD in 2019, with small and medium-sized cosmetic stores holding the largest
market share with a total revenue of 162.32 million USD. Vietnamese people are
accustomed to shopping at small stores since convenience and affordability are
frequently given top priority in their distribution and consumption patterns.
Additionally, it is simple for an individual to run a small business in Vietnam, and with
the market's rising demand, Vietnamese people in particular are focusing more on
skincare. According to statistics from Q&Me (2021), the average Vietnamese spends
432.00 VND per month on skin care products, which accounts for one-tenth of their
5,000,000 VND per capita income. As a result, the number of small cosmeceutical
businesses has increased.

● Spa

The Vietnamese market is seen as having the most potential for growth in the spa
and beauty industries. Consumer spending on skin care services (spa, dermatology clinic)
and beauty items has increased as physical appearance becomes more and more
17
significant, leading to the spectacular growth of the spa business in Vietnam. having a
market value of more than 81.15 million USD and holding a market share of around 9.5%.

● Cosmetic retail chain

Vietnam can be considered as a "profit-making" market for cosmetic chains, with

the second largest scale in the skin care segment of USD 111.06 million. More and more
giants in the world, with strong financial potential, quality assurance products,
methodical development strategies and great customer care services, gradually win the
trust of Vietnamese consumers.

The cosmetic distribution chain from famous brands in Vietnam is being

dominated by Watsons (Hong Kong), Beauty Box (distributing Korean cosmetic
brands), Guardian (belonging to Dairy Farm Group), Hasaki (Hasaki Beauty and Spa)
and Matsumoto Kiyoshi (Japan).

● Pharmacy

Retail pharmacy businesses have expanded significantly in recent years,

particularly during the Covid-19 outbreak. Along with that expansion, the pharmacy
retail chains are now growing into the beauty and skin care goods business rather than
only concentrating on one area of medical items. The market size for the skin care
cosmetics business alone is projected to reach 81.15 million USD in 2020, on par with
the size of the present beauty spa market, according to data from Allied Market
Research. The well-known brands are Pharmacity, Long Chau (a part of FPT Retail),
and Phuc An Khang (belonging to The Gioi Di Dong Group).

B. No. of competitors

Vietnam's cosmetics industry, in particular, has a lot of promise but is also very
competitive due to the presence of both domestic and international firms. The market
for skin care products in Vietnam is predicted to be worth 1.992 billion USD and
increase at a CAGR of 11.7% between 2017 and 2027, according to statistics from the
AMR. However, the team chose four primary rivals for Dermarium based on product
attributes, pricing, size, and market segmentation, including two international
competitors, Paula's Choice and The Ordinary, and two local competitors, Zakka and
Cocoon.

18
 ● Store

Because this market area has a large prospective consumer base and is very
responsive to market demands, all four of Dermarium's rivals are now active in it.
Therefore, the majority of goods from both large and small enterprises are delivered
here as long as there is need.

● Spa

In this segment, there are only two main distribution competitors, Paula's Choice
(nearly 10 spas and clinics) and Zakka (Zakka Spa).

● Cosmetic Retail Chain

Currently, only two major brands, Paula's Choice and Cocoon, distribute their
products at major chain stores, namely Watson, Hasaki and Guardian.

● Pharmacy

Similar to the above segment, only two businesses, Paula's Choice and Cocoon,
have distribution products at Pharmacity and Cocoon at An Khang pharmacy.

C. Major competitors’ strengths

● Paula’s Choice

This is the biggest and oldest brand among Dermarium's four competitors, with a
very broad product coverage and a very high level of brand recognition. Paula's Choice
has amassed a sizable following of devoted customers as a result of earning the trust of
the majority of Vietnamese shoppers, and demand for its items is also quite strong. The
fact that Paula's Choice products are constantly in demand may be viewed as a major
plus for the company because most corporate clients will base their product distribution
decisions on market demand and product consumption. Paula's Choice also provides its
distribution consumers with insurance that are quite appealing, with excellent financial
capabilities and a lengthy history, the company also ensures a stable output volume
thanks to professionalism and global large-scale manufacturing plants.

19
 ● Cocoon:

Vietnamese cosmetics firm Cocoon has established a pretty consistent level of

brand recognition. Many of the company's main products generate great sales, building
a steady foundation of committed customers. Additionally, the strength of the Cocoon
product category is in its line of natural, vegan, and benign organic cosmetics that are
ideal for all skin types and adhere to the trend of "Beauty without Cruelty." Furthermore,
Cocoon promotes its brand narrative by employing Vietnamese agricultural products,
endorsing Vietnamese goods, cooperating with farmers from Vietnam, and fostering
strong consumer trust. Cocoon focuses particular attention to the Cosmetic Retail Chain
and Pharmacy segments, which have a sizable customer base and a solid reputation, with
the aim of extending product coverage and improving consumer trust in the brand.

● Zakka

Zakka Spa, a sizable and prominent beauty salon in Ho Chi Minh City, is the
company behind this cosmetic line. As a result, spas have a wide distribution of this
product. Additionally, the business sells a number of well-known product lines with very
consistent sales volume.

● The Ordinary

Canadian cosmetic brand The Ordinary has been in industry since 2013. Until date,
the business has established trust and gained a huge following of devoted end-users,
particularly in the Vietnamese market. For its authenticity and simplicity in terms of
both the price of its raw materials and its components, The Ordinary is renowned across
the world as a pioneer in the cosmetics business. Because of this, The Ordinary's prices
are quite affordable, its items are suited for the majority of Vietnamese consumers'
economic circumstances, and customer demand is consistently very strong.

D. Major competitors’ weaknesses

● Paula’s Choice

Paula's Choice has rather strict standards for customers that import and distribute
its products due to the features of big brands and complicated active components.
Customers who sell the company's goods must be highly qualified, capable of giving

20
users additional guidance, familiar with both the company's goods and their active
components, and knowledgeable about skin care. Customers who wish to import and
distribute goods must also guarantee a minimum volume of sales and imports. As a
result, Paula's Choice has a very tough selecting and screening procedure for its
distributors. Additionally, because its items fall into the mid- to high-priced category,
the customer segment is also smaller than that of other well-liked goods.

The largest challenge for small company clients is that they cannot guarantee
financing and have enough consumers to meet their needs. Due to the limited customer
base and lack of financial stability to import the company's products, this segment also
struggles under the intense sales pressure.

Because there is rivalry between customers and sales, it is simple for distribution
chain parties to have pricing and sales area disputes between the retail points of the
distribution systems. Additionally, if Paula's Choice offers various preferential policies
for various chains, there is a high likelihood of conflict.

● Cocoon

Cocoon does not focus on distribution to the small size store customers, so it is
difficult for the Store segment (Online + Offline) to reach this company.

Because there is rivalry for customers and sales inside the chain segment, similar
to Paula's Choice, it is easy to have pricing and sales area disputes between the retail
points of the distribution systems. Additionally, if Cocoon offers various preferred
policies for various chains, conflicts are likely to arise.

● Zakka

Zakka is a local Vietnamese cosmetics company that was founded in 2014. As of

right now, neither market coverage nor brand awareness are indeed high enough. At the
moment, Zakka has nearly no external corporate customers and solely distributes and
sells its items at its own Zakka Spa, and on its e-commerce platforms and websites.

● The Ordinary

The Ordinary has not yet been officially supplied in the Vietnamese market,
despite the fact that it is highly well-liked there. This might be seen as the company's
biggest weakness as a result of the large number of The Ordinary fake items currently

21
floating around and being marketed in Vietnam, which undermines customer faith in the
brand's provenance. Small and medium-sized shops find it challenging to import their
goods and provide proof of their country of origin as a result. The lack of a distribution
firm in Vietnam prevents huge distribution chains like Cosmetic Retail Chain and
Pharmacy from displaying their items there.

E. Company strengths

● Store (Online + Offline) & Spa

Dermarium has established quite a decent recognition in the Vietnamese market

despite being a start-up firm that is just a little over a year old. Dermarium has a number
of well-known product lines with consistent sales, including its two Exfoliate and Serum
lines. Thanks to its founder's expertise in skincare and active ingredients on YouTube,
Ket Xoan has a devoted following of consumers. With the market for active ingredients
frequently having extremely expensive pricing, Dermarium gives a new opportunity for
individuals to use with not too great financial conditions. Additionally, the price of
Dermarium's products is also relatively reasonable compared to the quality of the
products. Additionally, Dermarium provides the best terms for its business clients, does
not establish product KPIs for them, makes post-payment possible for companies in
difficult financial situations, and offers programs for customer promotion and
communication assistance.

● Cosmetic Retail Chain & Pharmacy

As of right now, Dermarium has not collaborated with these two customer segments.

F. Success factors

● Store (Online + Offline)

Small business customers usually pay close attention to the company's partner
qualifications and sales policy. Customers in this category frequently demand marketing
incentives from the businesses they collaborate with, as well as reasonable KPIs that
aren't too challenging to satisfy if the partner has rigid import criteria. Additionally, this
market sector frequently imports goods that are in great demand and have steady sales,
22
resulting in a high level of consumer identification and brand recognition. These two
aspects are also important to this sector.

● Spa

This group, like the Store one, is interested in the Company's branding and sales
practices. However, due to the industry's distinctiveness, where consumers are primarily
interested in skin care and treatment services, this segment pays special attention to
specialized treatment products with active ingredients and high specificity. As a result,
businesses targeting active ingredient products are frequently interested in this segment.

● Cosmetic retail chain & Pharmacy

The product's sales volume is the main priority for these two market categories,
and in order to achieve this, brands must be moderately to highly popular and have a
consistent, devoted user base. The sales procedure for these parties is likewise fairly
difficult, frequently needing items with high reputations and clear origins, legitimate
distribution, and the brand must be able to supply a consistent supply of goods to meet
partner demands.

G. Compatibility with company’s long-term objectives

● Store (Online + Offline)

Small and medium-sized business clients may not have the same financial
capabilities as other clientele types, but they nevertheless represent the largest customer
base in terms of volume and provincial coverage. According to Mac Quoc Anh, head of
the Institute of Economics and Business Development, SMBs today make up 96.7% of
all businesses in the nation (Vietnam Association of Small and Medium Enterprises,
2022). This is a good place for Dermarium to set long-term goals and grow.
Additionally, Dermarium can easily match the needs and characteristics of these
enterprises given its current financial status. Young enterprises, which lack a variety of
economic circumstances and supply capacity, will find it simpler and more beneficial to
concentrate on the small and medium client sector. These partners do not require a large
number of products, and the stages of goods control are not all that difficult, so the
circumstances are ideal for the brand's scale.

23
 The company's attitude is also geared toward clients who can educate others on
skin care and have the discipline to develop a routine. By collaborating with these
clients, the business will have greater directness, control, and regulation while also
having an easier time achieving its goals.

● Spa

With the rising demand for beauty products and the popularity of intensive
treatments, skin care, and body care, the spa industry today has a lot of promise,
especially in Vietnam. Due to the characteristics of the sector, this consumer group
frequently places a strong emphasis on service products rather than selling tangible
goods. Large, prominent spas frequently purchase cosmetics and primarily employ them
for their services, concentrating particularly on unique and highly active goods, which
Dermarium may easily fulfill. However, expensive and foreign goods are frequently
selected owing to the psychology of users who spend a lot of money to visit beauty
salons. There are still some users who are hesitant to use Dermarium since it is a
relatively new Vietnamese brand that has not had much of an influence on the beauty
industry. Although the Spa client segment satisfies Dermatium's knowledge and skill
criteria, it is challenging for the business to grow this segment over a long period of time
since there is little demand, and the expertise does not center on the sale of cosmetic
items. Dermarium has to have a sizable enough brand recognition and brand extension
in order to be fully suitable with this market.

● Cosmetic retail chain

With more international giants opening up business prospects in Vietnam, the

market for huge cosmetic chains is growing. This is a market with promise for cosmetic
companies, particularly big cosmetic companies, as it is a very broad product category
with great potential, stable economic circumstances, and a wide range of services with
excellent customer care. Despite just recently entering the market, these chains have
quickly increased their scale, confirming their status and respect. These chains gradually
gain the trust and sympathy of Vietnamese cosmetic consumers, many believe that only
really good and genuine products will be distributed at large chains, so they often
prioritize shopping at branches of larger retail chains, second only to the retailers'
websites.

24
 Although Dermarium can satisfy the stringent product selection criteria of the
aforementioned client sector, its scale is insufficient to handle this customer file. Chain
consumers frequently expect a sizable number of sales products, but Dermarium's
existing business size prevents it from producing enough to match the aforementioned
demand; as a result, it is challenging for the company to begin meeting customer
demands. Furthermore, these retail chains' areas of operation are relatively limited; they
are only present in a few numbers of important cities and provinces, making it
challenging for clients in other regions to obtain merchandise. Besides that, since
employees at retail sales chains find it challenging to meet the company's requirements,
Dermarium currently prefers to target customers who can directly and specifically
advise customers on how to use products and skin care knowledge. As a result, it is
challenging for users to purchase Dermarium products at chains that are carefully
considered and created with a skin care cycle in mind, as desired by the company. It will
take some time for Dernarium to grow in this market, expand manufacturing, and raise
brand recognition.

● Pharmacy

Although pharmacy chains that sell cosmetics are growing in size and market
share, their area of expertise remains in pharmaceuticals. The pharmacy is not the first
place that comes to mind for customers when they require cosmetics and skin care items
since, in their perceptions, it is a location that specializes in the distribution of
pharmaceuticals. Customers of the pharmacy industry typically select basic brands
(Pond's, Nivia, Olay, etc.) and basic care items that don't require a lot of assistance
(sunscreen, sunscreen, cleanser, acne spot, etc). Most other pharmacy customers focus
on selling and importing medicine and health care products, including the large
drugstore chain currently Long Chau, making it difficult to purchase facial care products
at this pharmacy. At the moment, only big health stores belonging to large corporations,
such as Pharmacy and An Khang pharmacy, import and distribute cosmetic products.

It is challenging for pharmacy consumers to fulfill professional standards for skin care
and to advise clients on highly active products, which is a concern shared by cosmetic
store chains. Since prescription medicine specialists make up the majority of the sales
team at these pharmacies, they are less likely to respond to customer inquiries about
compatible and incompatible items with the company's guidance. As a result, our group
25
underrates how well this segment fits with Dermarium's objectives and long-term
development plans.

2. Targeting - Selecting the target segments

Table 5: Targeting market of Dermarium.

Beauty retail chain

Spa Store
and Pharmacy

Distributing a wide Combine using skin care End users follow information
range of skin care, products of many brands from the company's official
body care, hair care, and sell to end users if they fanpage or skin care fanpages,
dietary supplements have demand. Spas will beauty blogs on social
and other medicines. certainly have to have networks and contact to buy
The consulting team professional knowledge of goods at e-commerce
of beauty retail chain caring and treating good platforms and also at genuine
and pharmacy cannot skin problems, but their distribution stores closest to
focus on consulting main expertise is Spa their area. Stores need to
for a specific brand, so services (facial care, acne ensure a knowledge base about
end users have to find treatment, skin lightening, their product lines and skin
out more for skin rejuvenation,...) but not care to give the best advice to
themselves before product distribution. end users.
making a purchase.

⇒ We decided to choose the Store segment as the target market.

● Suitability of the Store segment for Dermarium

- Small and medium-sized businesses dominate the Vietnamese market in terms of

size and coverage. They also assist the business in maintaining a steady level of product
consumption and product distribution to all areas of the country. Currently, the country's

26
huge retail chain segment is only distributed in a few key towns and provinces, which
restricts the availability of goods.

- It will be more appropriate for the existing size of businesses that don't have a lot
of financial potential to concentrate on small and medium wholesalers.

- Dermarium is a skin care brand that places a special emphasis on the need for its
distributors to have specialized skin care knowledge, an understanding of the effects of
the active ingredients in the products they distribute, and the ability to carefully consult
based on each customer's skin condition. Focusing on local businesses makes engaging
with store owners and managers more straightforward, easy, and direct, which helps
Dermarium convey its goals to distributors.

● Choosing Marketing Strategy for Dermarium

- Dermarium belongs to the group of small and medium-sized enterprises with

moderate human resources and financial potential, so resources need to be effectively
allocated to avoid spreading to non-potential markets, causing budget waste.

- The main segment of Dermarium is Stores, which account for the largest number.
Dermarium has been doing very well in offering products with good quality, reasonable
prices along with discount policies for partners and supporting merchs in promotions.
This will help Dermarium create a brand advantage and help increase the company's
market share in this market segment.

⇒ Our team chooses a Centralized Marketing Strategy that will be the right strategy
for Dermarium to develop in the long term.

● Advantages of Centralized Marketing Strategy for Dermarium:

- Dermarium can build brand reputation with partners in the Store segment. Our team
has interviewed a number of Stores and the founders of the Stores, most of them assess
that their desire to become a partner of Dermarium comes from the good quality and
reasonable price of the products.

- Bringing better profits to Dermarium by focusing on promoting capabilities and

strengths on defined goals, not spreading resources too much to different market
segments.

27
 - Building good relationships with business customers by responding well and quickly
to their needs. Besides, Dermarium also has very good support policies, does not force
sales and KPIs, thereby maintaining long-term relationships with its partners.

● Disadvantages of Centralized Marketing Strategy for Dermarium:

- Unexpected market changes can make it difficult for Dermarium to work with business
partners. For example, the Covid-19 epidemic will lead to some partners that may not
have enough capital to import goods for distribution, ...

- Dermarium also needs to beware of major cosmetic brands that may have started to
keep an eye on the company as well as seeing potential in this market segment. Most
likely, they can use their powerful resources to capture the potential market.

- Dermarium needs to develop a specialized and best-developed market plan. Since

Dermarium does not spread its resources to other markets, it is the company's duty to do
the best in their chosen market.

3. Positioning

3.1. Secondary data aggregation

Table 6: Secondary data about Dermarium and other cosmetic brands.

The Paula's
Brand Dermarium Cocoon Zakka
Ordinary Choice

Logo

“COCOON -
- “Formulated - “Holistic Skincare”
Vegan “The Ordinary
with Dignity” - Kachou Fuugetsu - “Beauty
Business cosmetics - is Clinical
- “Not the bad, (Flower – Bird – Begins With
Philosophy for pure formulations
not the good, Wind – Moon) Truth”
Vietnamese with integrity”
but the right” - “Love to be your
beauty”

28
 friend”

Budget from 100,000 from 35,000 from 200,000 Premium, from

from 500,000 -
price - 1,000,000 - 500,000 - 900,000 400,000 -
1,000,000 VND
segment VND VND VND 3,000,000 ND

Present in
Present in more than 20
12000 stores countries
worldwide. around the
Activities In Vietnam In Vietnam In Vietnam Not yet world.
officially Officially
distributed in distributed in
Vietnam. Vietnam since
2014.

Mid-2021 in 2013 in 2013 in

Founded 2014 in Vietnam 1995 in USA
Vietnam Vietnam Canada

Team of experts in
Company pharmacology -
Ket Xoan -
Founder Nature Story cosmetics and Bradon Truxe Paula Begoun
Princess Dong
Vietnam. herbalism in North
Carolina

⇨ To position the Dermarium brand in the market, our group conducted some

qualitative interviews based on the process below and drew a Positioning Map:

3.2. Qualitative interview:

Step 1: Choose an interviewee

- Group of businesses operating in the field of cosmetics with a small and medium scale.

- The business has been/is a partner of Dermarium and other cosmetic brands.

29
 Step 2: Interview method

The interviews were conducted according to the structured interview method in

order to make statistics of the interview results more convenient.

Step 3: Interview form

Due to the limitation of geographical distance and time of enterprises, the

interview form used includes:

- Online interviews using Google Meet tools.

- Send Google Form survey via email, survey form is made by business email to
ensure authenticity.

Step 4: The way we take samples

- Prepare a qualitative interview questionnaire to collect the necessary

information from the respondents.

- Conduct qualitative interviews with 9 respondents (via Google meet and Email)

- Collect and analyze secondary data.

3.3. Qualitative interview questionnaire

Table 7: Qualitative interview questionnaire

Question Dermarium Characteristics Business Problems Enterprise's

group cosmetic of use, product revenue encountered expectations
product packaging of situation (subjective about the
purchasing Dermarium for and cosmetic industry
and compared to Dermarium objective) in general &
distribution other brands products Dermarium in
overview particular in the
future

The Gather Get an overview Identify the Summary of Exploit market

about how of the quality flagship difficulties trends and partners'

30
purpose current and packaging product from wishes about
partners of Dermarium lines of distributors Dermarium.
approach products Dermarium and
Dermarium limitations of
Dermarium.

3.4. Interviewee’s Information

Table 8: Interviewee’s Information

Business Store/Spa Time partnership

No. Name Job Position
location name with Dermarium

Nguyen
Doctor - Online Quang
01 Le Hong Founder Dr.Nhung 2021 - 07/2022
business Binh
Nhung

Student - Ba
Huynh Dahliana
02 Ria Vung Tau Vung Tau Founder 06/2021 - present
Thai Skincare
University

Nguyen
Ho Chi Dung Dan
03 Tran Anh Businessman Founder 06/2021 - present
Minh Da De
Van

Nguyen
04 Businessman Ha Noi Founder Ube Store 06/2021 - present
Thi Dung

Nguyen
05 Huong Businessman Hai Duong Founder Tit Store 01/2022 - present
Thao

31
 Pham Thi Tu Pham
06 Businessman Ha Noi Founder 06/2021- present
Anh Tu Store

3.5. Qualitative interview results

Table 9: Qualitative interview results

Question Answer

● Aware through fan pages and group reviews of skincare

Product purchasing
products; the founder's reputation.
and distribution
● Distribution decisions are based on good product
overview
quality and skin safety.

● Highly rated for the quality and effectiveness it

Characteristics of use, provides

product packaging of ● The packaging is uniquely designed, colorful, eye-

Dermarium catching, bold, and very appealing.

● The product bottle is not truly excellent.

Business revenue
● Stable sales
situation for
● The best-selling items are products with low prices.
Dermarium products

● Transportation (lengthy, delays, high costs).

Problems encountered ● Low inventory products => lack of supplies.

(subjective and ● Unfamiliar, lack trust in Vietnamese brands.
objective)
● Packaging is fickle and uneven.

● On the Dermarium side: high requirements for

32
 distributors.

Enterprise's ● For the cosmetic industry: be unique, and focus on

expectations about the product research and development.
cosmetic industry in
● For Dermarium: more connection and support.
general and
● Keep the quality and price.
Dermarium in
particular in the ● Businesses are also pleased and look forward to
future continuing to cooperate with the Brand in the future.

3.6. Positioning map

For the question of the most important criteria that distributors pay attention to
when buying products for distribution, the team consulted with Dermarium and looked
for secondary data, then the team recommended 5 factors that are often important
(Product Quality, Price, Brand popularity, Payment policy, Incentives policy) and still
create conditions for them to add more criteria they are interested in if any. Finally,
respondents will then choose two factors that they consider the most important.

Table 10: Secondary data of Criteria for selecting a supplier

Author Article name Factors supported Link

Majchráková Transportation Cost as Purchase price; Payment https://www.scienc

et al., 2021 an Important Element terms; Quality costs; edirect.com/scienc
of a Supplier Selection Additional costs due to e/article/pii/S2352
Process Based on a deviations from delivery 146521003525
Multi-Criteria Decision dates; Supplier support;
Analysis Custom duty

Garg, 2021 Structural equation Cost; Quality; Delivery; https://www.scienc

modeling of E-supplier After-sale services; edirect.com/scienc
selection criteria in Reputation and position e/article/abs/pii/S0

33
 mechanical in industry Bulk order 959652621018151
manufacturing discount; Early payment
industries discount

Menon, 2022 Using AHP-TOPSIS Quality; Cost; Delivery; https://www.scienc

methodologies in the Flexibility edirect.com/scienc
selection of sustainable e/article/pii/S2772
suppliers in an 397622000909#
electronics supply
chain

Rahman, 2022 Sustainable supplier Price; Delivery time; https://www.scienc

selection in the textile Quality;Technology of edirect.com/scienc
dyeing industry: An production; Capability to e/article/pii/S2667
integrated multi-criteria produce 378922000542
decision analytics
approach

Tushar, 2022 Circular supplier Information Cost; https://www.scienc

selection in the Material Cost; On time edirect.com/scienc
construction industry: delivery; Delivery e/article/pii/S2667
A sustainability accuracy; After-sale 344422000056
perspective for the services; Quality
emerging economies certification; Reputation;
Return of goods

Frank, 2022 Supplier Evaluation Quality; Price/Cost; https://www.ignite

and Assessment: The Performance Delivery; procurement.com/b
What, How, and Why Service; Technical log/supplier-
Ability; Flexibility; evaluation-and-
Development assessment-the-

34
 what-how-and-why

Shalaka, 2019 Supplier Performance Price; Quality; Delivery; https://www.zycus.

Evaluation – A Quick Payment terms; com/blog/supplier-
Checklist Quantity; Certification; management/suppli
Value additions; er-performance-
Innovation; Financial evaluation-a-quick-
health; Compliance checklist.html

Taherdoost et Analyzing the Process Quality; Delivery; Price; https://www.scienc

al., 2019 of Supplier Selection Warranties and edirect.com/scienc
Criteria and Methods claim policies Supplier’s e/article/pii/S2351
profile; Service; 978919303555
Reliability;

Nibusinessinfo Criteria for selecting a Price; Value for money; https://www.nibusi

.co.uk, n.d. supplier Quality; Reliability; nessinfo.co.uk/cont
Responsiveness; ent/criteria-
Flexibility selecting-supplier

Salles, n.d. How to Perform a Delivery Time; https://www.qualit

Supplier Evaluation? Price; Product Quality; yweb360.com/how
Formality -to-perform-a-
supplier-
evaluation/

Among the shops interviewed, 6/6 chose product quality and 4/6 chose price as the
two most important criteria when purchasing products for distribution.

Therefore, our team selected 2 criteria of Product Quality and Price to make 2 main
axes to build a Positioning Map to compare Dermarium and other brands.

35
 Table 11: The evaluation of Product quality of 6 Stores

Brand/Store Cocoon Zakka The Ordinary Paula’s Choice Dermarium

Dr.Nhung 5 6 4 5 7

Dahliana
7 8 5 8 9
Skincare

Dung Dan Da De 6 8 6,5 8 8,5

Ube Store 3 8 6 8 10

Tit Store 6 8 8 7 9

Tu Pham Store 5 8 6 7 7

Table 12: The evaluation of 6 Stores about Price.

Brand/Store Cocoon Zakka The Ordinary Paula’s Choice Dermarium

Dr.Nhung 6 7 8 3 7

Dahliana Skincare 9 8 9 7 8

Dung Dan Da De 8 6 9 4 7

Ube Store 8 8 9 8 10

Tit Store 8 7 6 5 8

Tu Pham Store 8 7 9 7 8

36
 After synthesizing and analyzing data from qualitative interviews, we have
obtained scores for Product Quality and Product Price as shown in the table below:

Table 13: Everage evaluation of product quality and price

Criteria/Brand Cocoon Zakka The Ordinary Paula’s Choice Dermarium

Product quality 5,4 7,6 5,9 7,2 8,4

Price 7,8 7,2 8,3 6,8 8,0

Figure 2. Positioning Map of Dermarium and other cosmetic brands.

The positioning map shows that Dermarium is a cosmetic brand with higher
product quality than its competitors and its product is medium price. From there, it
shows that Dermarium is the most suitable brand for small and medium-sized partners
such as stores both online and offline.

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 CHAPTER 3: THE PROBLEM OF ENTERPRISES AND PROPOSED
GROUP SOLUTION

1. Lack of marketing activities leading to less impact on users purchasing

decision

1.1. Problem Explanation

Dermarium's marketing activities have not yet been implemented strongly in

different platforms, so although the product quality has high quality and its own
uniqueness in the market, it has not yet reached the target audience that the company
targets.

Similar to other brands, Dermarium is also available on platforms such as

Facebook, Instagram, TikTok, Website and e-commerce platforms. However, its social
media channels have not been fully utilized to reach the target audience and build
widespread brand and product awareness.

TikTok is a potential marketing channel and Dermarium has started quite late with
its first video on August 2, 2022. However, the number of posts is still limited (14
videos). The current content on the brand's Tiktok channel is to introduce product
features, recommend products depending on skin conditions, introduce product combos
that can be combined, product instructions, product usage process, the outcome of using
product with before and after image for comparison. Dermarium also has a livestream
series to share knowledge about skin care every Friday at TikTok with content such as
"solving the problem of oily acne-prone skin", "nutrition myths", "skin training",
"cleansing the dust of the earth", etc. It can be seen that the content is quite diverse, but
the number of videos is not much. It is not enough for the brand to remind customers of
the presence, of the use and excellent quality of a Vietnamese brand.

For Instagram, the company has parallelized and reused not completely but only
some of the contents with the Facebook fanpage. Besides, the language that the company
chooses to communicate on this channel is English. Thus this channel has less reach and
attracts less people than other channels with only 1,153 followers.

The platform on which the brand is most active is Facebook, with posts mainly
describing the salient features of each product. Brand also has knowledge-sharing

38
articles such as how to restore skin according to skin type and suitable products,
introduce AHAs, or recommend skin care procedures for pubertal skin. Currently, the
company is also running ads for its products with posts that mainly introduce ingredients
and product uses.

Dermarium wants to build an image as a cosmetic brand originating in Vietnam

with good quality products at affordable prices. In addition, its distributors must be able
to advise on suitable products and end users must really understand the use,
characteristics, main ingredients of the product and the current skin health. in order for
the product to reach its full potential. Therefore, influencers on social networking
platforms when introducing and reviewing products of Dermarium also need to have a
certain level of skin knowledge, product orientation to appropriate users and do not
follow the trend to sell in bulk.

However, the market for KOL, KOC with real expertise in cosmetics and skin is
still limited. Besides some content creators who are knowledgeable about skin care and
have a good work ethic, there are still many who provide untrue, unscientific
information, follow malicious trends, or are just interested in profits without thinking
about the information they give out has a profound effect on the audience, especially
those with limited knowledge of the topic being discussed. Nevertheless, viewers are
now smarter and more selective when receiving information. The selection of KOL and
KOC in accordance with the criteria of having enough professional knowledge to
convey the right message, respect for users and pride of the company for the product
should be done carefully.

1.2. Impact of problem

1.2.1. For business

Dermarium has been active on the Facebook fanpage when posting and keeping
the interaction with customers on a regular basis, the posts provide useful information
with the bold Dermarium images. However, on the TikTok platform, the lack of videos
on the homepage with a sparse posting frequency will make the company miss the
opportunity to reach a large number of customers interested in skin care. The fact that
there are few influencers on social networks like KOL and KOC who can meet the
39
company's criteria for skin care knowledge and the ability to convey the right message
that the company aims to also limit the coverage of Dermarium products on these
platforms. Leads to the target audience that does not know the company, the product
values and the outstanding business philosophy that the company aims to. Even if they
happen to know the name Dermarium but haven't seen a TikTok page with a lot of
activity or followers before with a great user experience, customers won't be persuaded
to do further research and make a purchase.

1.2.2. For consumers

Cosmetic consumers in Vietnam, when they hear a domestic cosmetic brand for
the first time, will often immediately think of products of no clear origin, have not been
authorized, have no scientific research and no response to the requirements quality in
the production process.

Consumers often have the habit of referring to other users on social networks
before making a purchase decision. Especially with cosmetics, which they use directly
on the face with the desire to improve the skin condition, it is indispensable to learn
about the product before buying. Because unfortunately using cosmetics of poor quality
or not suitable for skin condition can cause long-term consequences such as irritation,
affecting not only personal health but also aesthetics and confidence of the user. And
the treatment of this consequence is often expensive and takes a long time to recover the
skin. That is why before buying skin care products, users often tend to find out detailed
information from many different sources, from reviews of other users, from experts
across many platforms. Besides the use or ingredients, users also want to know the
experience of using the product of the former users.

The fact that Dermarium's channels, especially the TikTok channel, still do not have
many videos and the number of followers is limited, will raise suspicion with customers
that this is not a brand with quality products. The videos on its TikTok page at
dermarium.official also do not feature videos of influencers or people who have
experienced the product. This will discourage users from continuing to learn about the
brand, leading to loss of potential customers.

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 1.3. Solutions proposed by Group

1.3.1. Theoretical proposal

● KOL, KOC

+ KOL (Key Opinion Leader) is considered an expert in a certain field, or at least has
experience in forming and giving opinions on a particular topic. Their knowledge is
respected by others in the community and their advice is trusted.

+ KOC (Key Opinion Consumer) are consumers with great influence in the market. The
whole focus of KOC is to evaluate / review the products that I have experienced.
Usually, KOC has an average number of followers on the account because this work is
quite new. KOCs are also considered ordinary shoppers, so their evaluations are more
objective than the advertising brands themselves. This has a strong impact on the
purchasing decision of the viewers.

● Touchpoint

The term "touchpoint," which emerged in the 1980s based on a technique created
by Jenkinson and made famous by Ogilvy, has several definitions. However, it is
generally acknowledged that it refers to a point or time of contact or communication
between a brand or organization and a specific customer or stakeholder. Additionally,
there are many synonyms or similar terms, such as "moments of truth," which refer to
crucial events or more significant touchpoints, "media," which refers to everything that
transmits a message, "service point/service encounter," "interaction," and "customer
experiences."

Ducan (2015) divided touchpoints into the four groups below. The first category
of touchpoints is "company-created" touchpoints, which are planned marketing
messages including advertisements, press releases, brochures, packages, and store
decorations. Second, "intrinsic" touchpoints are contacts with a brand that are necessary
for the purchase or use of that brand. Examples include customer service agents, agents
who take reservations, and even the package itself for consumer-packaged products. The
additional expenditure is not necessary for these touchpoints because consumers of the
brands already incur these touchpoints. Third, "unexpected" touchpoints are anticipated
brand references that are beyond the company's control, like WOM. Fourth, "customer-

41
initiated" touchpoints are encounters that take place whenever customers get in touch
with a business, such as with complaints or questions about how to use a product.

In addition, Duncan (2005) recommended ranking these touchpoints in order of

importance based on the following factors: (1) the impact on brand loyalty; (2) the
company's ability to influence the touchpoint experience; (3) the cost of making each
contact pleasant; (4) the extent to which contacts can be used to gather customer data;
and (5) the extent to which contacts are appropriate for conveying additional messages.
Therefore, identifying the touchpoint that improves customers' brand experiences has a
significant impact on how touchpoints should be created and managed.

Acknowledge how competitive this industry is, consumers have many options,
which raises their standards for companies, goods, and services. As soon as feasible,
Dermarium has to build users’ trust. The best way to do this is through engaging
branding that communicates directly to the audience, builds trust, and motivates them
to pick the brand. Dermarium has not yet reached out to consumers outside of their
immediate circle with their current marketing plan. Currently, the majority of its
customers come from Ket Xoan's fan base, which is a small portion of the target market
the business was trying to attract. When questioned, new customers frequently claim
that they are unaware of the brand's existence on the market; nonetheless, some of them
still exhibit reluctance to try it because they have less faith in Vietnamese cosmetic
companies. However, Dermarium has a fantastic brand narrative and a noble purpose to
pamper Vietnamese people's skin. With smart branding, they could grow even more in
the future.

1.3.2. Apply the theory to propose solutions

● Collaborate with KOL, KOC

Combined with KOL, KOC has experience or expertise in cosmetics (nowadays

there are many media channels with backgrounds from dermatologists or
pharmaceuticals) for product promotion campaigns. To ensure that the cooperation
process between the two parties is successful, the brand also needs to work with, monitor
and take care of these influencers carefully. In order for these KOLs and KOCs to send
the right message to users, the company can send the product in advance for them to
experience, help answer questions related to the product, make sure they understand the

42
impact that the product has on them products and check scripts first from the parties to
make sure the content is appropriate.

● Increase content diversity and number of posts

For a cosmetic brand with a customer base who has a certain understanding of skin
care issues, the content that the media company needs to be thorough, scientific and
accurate. The information that the brand provides needs to convey the outstanding use
of the product, and must be useful and valuable to improve understanding of skin care
for viewers. However, scientific and highly accurate information also needs to be
conveyed in an easy to understand and close manner to a certain extent in order to both
introduce the product and let the viewers understand the motto and ethics. Dermarium's
outstanding business. This requires the marketing team to also have a background in
skin care, cosmetics in general and brand products in particular.

The content that Dermarium can create is the salient features of the product such
as ingredients, uses, textures; product collection of substances such as Vitamin C, AHA,
BHA, and comparison articles to help users understand the product… Or product
combination suggestions for different needs according to skin (oily, dry, sensitive, acne,
dark spots, aging, large pores, ...), depending on the air, the weather of the three regions
(hot and humid, dry, cold, ...), seasonal (spring, summer, autumn, winter, rain) in
Vietnam. Especially about the user experience before and after using the product,
product review from KOL, KOC. Brand can have many videos about a product so that
the number of product appearances on the audience's news feed more, helping the image
of the brand appear again and again, attached to the customer's memory. The company
can also increase the number of posts showing active activity by including influencer
review videos on its profile. Both help the company increase diversity and strengthen
customer confidence when seeing many different faces who have experienced the
product.

Changes, updates to products, packaging, or other user benefits that the company
has been trying to achieve should be widely communicated. For example, about
changing the packaging, the brand can post a message with the content that there has
been a change, what users get with this change. To help customers visualize better, the
company can use pictures or videos comparing the before and after packaging so that

43
users can get acquainted with the new image of the product.

The Brand should also make customers remember or make more people know
through offline events, which can be held separately at the space near the cosmetic
counter at the mall or in conjunction with a distributor to organize at their store.

● Make the most of the potential and mix of communication channels.

+ TikTok:

Officially launched in Vietnam at the end of April 2019, TikTok quickly became
one of the most popular social networks among users. With the number of users
increasing rapidly in Vietnam, TikTok is now a fertile playground for brands to promote
their products and brands, especially cosmetic brands like Dermarium. Short videos are
the ideal medium where Dermarium can convey concise information about a product's
salient features or educational videos about skin issues.

Other social networks have also followed the trend, updating the ability to create
and share short videos like TikTok such as Facebook, Instagram Reels, Youtube Short.
Dermarium can take advantage of this to reuse content and post it on different platforms
to increase brand and product awareness and remembrance among customers.

+ Instagram:

In terms of images: using a sparkling theme like the present helps Dermarium
maintain a stable identity in the customer's memory. Currently, many cosmetic brands
follow gentle, pastel tones such as (brown, orange, leather, ...) and minimalist style,
typically Zakka, CoCoon. The fact that Dermarium uses a colorful, sparkling theme with
a detailed background in the image of the post makes it easy for customers to recognize
the brand among the countless brands on the market.

- Story: is the entry to post images or short videos that last for 24 hours. Here, the
brand can not only post regular images and videos, but also interact through functions
such as opening polls, quizzes, answering questions from followers, hashtags,
countdowns, and refer to another account. The company can use the above functions
to increase interaction with the audience and listen to user opinions. Besides, you
should also cover the posts or stories that the company mentioned by partners or users
in their posts so that customers can see the trust and popularity of the brand in the

44
 community.

- Reels (short videos):

Like other social networking platforms, Instagram recognized the great growth
potential of TikTok and quickly joined the race in the short entertainment video
segment. On March 31, 2021, the new feature "Reels" was officially available on the
Instagram application in Vietnam, allowing users to create and edit short-form videos
with a maximum length of 30 seconds. This opens up opportunities for users to
become content creators, in addition to a new land for cosmetic brands to promote
their brands and products.

Because Instagram updates Reels' feature with the same function as TikTok, the
Marketing department can use the same content, images, and videos to communicate
on two different platforms, helping to reach many customers. more, increase brand
awareness.

- Tagged: the posts that Dermarium is mentioned will appear in this section of
Instagram. Business and consumer customers can go to the Tagged section of
Dermarium's personal page to get a diverse view of Dermarium's relationship with
the community, including Influencers, distributors and consumers.

The content in this Tagged section is usually an article sharing the experience
of using the product. Customers, including cosmetics distributors or consumers, can
partly assess the quality and popularity of cosmetics on the market and encourage
new customers to try the product.

+ Facebook:

Currently, the company has been active quite often and actively on the Facebook
platform. In addition to the currently used content, Dermarium can take advantage of
the video source from the TikTok channel to post on the Facebook fanpage. Because
users are also partly affected by the trend of information in the form of short videos,
adding this form to the Facebook page will keep the article viewing time longer, interact
and remember about the company.

45
2. Product packaging through production batches is sometimes not uniform,
making it difficult for customers to identify.

(Note: The customers mentioned here are Dermarium - Stores partners)

2.1. Explain the problem

Packaging helps to ensure that product quality is maintained stably, and convenient
in the process of warehousing, transportation, and use. In addition, packaging is also a
way to identify products and brands, packaging is an important connection point
between products and consumers. Each contact with product packaging is an experience
between the customer and the brand. Also, changing the packaging that consumers are
familiar with can change the user's positive experience with the product. With the desire
to improve the packaging to bring more eye-catching designs, Dermarium has changed
the packaging of some products through production batches such as Fairy Water, and
Goodnight Cleanser, ... when changing Dermarium is usually announced on Fanpage.
of the firm. These changes can feel fresh for consumers but can also confuse or displease
them with innovation.

2.2. Impact of the problem

2.2.1. For Businesses

Dermarium is in the process of upgrading its packaging, so changing the packaging

helps businesses realize their strategy. Besides, changing the packaging gives partners
and consumer’s products with eye-catching and attractive shapes and designs, creating
innovation to increase customer experience. Changing product packaging also helps
businesses reach new potential customers and consumers, thereby increasing sales, and
contributing to building a growing business to be able to bring Vietnam’s cosmetic
brands to the world. With regard to today's social trends, change is happening rapidly in
many areas. There are many things that are popular today but will be obsolete in the
future. Changing product packaging can help Dermarium not be outdated, and grasp
market trends to be able to compete better.

Besides those benefits, the change of packaging, the packaging is not uniform
across production batches, also causes many negative effects for Dermarium.

46
 - The first is expensive in terms of new packaging design costs, to change a
packaging business needs to spend a lot of time and resources to research the
expectations of partners, and consumers in terms of color, design, and material…
of the new packaging.

- Second, the business's sales may decrease because the change in packaging
confuses many consumers to search for and identify products. Moreover,
changing the packaging can make some consumers feel hesitant when making a
decision to continue using the product or not.

- Third, without conducting market trend research, and customer surveys, new
packaging consumers may not match their wishes and expectations. They can
then switch to another brand and Dermarium will lose existing customers.

2.2.2. For consumers

As the results from the interview show, “Change of packaging often confuses
consumers, they reflect it differently from what they think”. The new packaging also
confuses consumers, making it difficult to identify products, making searching for
references and purchasing more difficult. The quality of the packaging is not uniform
across production batches to some extent not meeting the expectations of consumers,
which may cause them to stop using the product and the distribution of the Store will
become more difficult.

2.3. Solutions proposed by Group

2.3.1. Theoretical proposal

According to Aaker (1991), brand awareness refers to the ability of potential

buyers to recognize or recall that a brand is a trademark of a certain type of product.
Brand awareness is considered to be an important factor in raising awareness from
unawareness to recall (Aaker, 1991).

Brand Awareness will be divided into two main categories (Hung, 2022):

+ Brand Recall: Is a qualitative measure of the user's ability to remember the

business's brand. Simply put, it is the ability to remind consumers to
immediately remember the name of the brand, when reminded of a product or
any service that the brand has been doing business.
47
 + Brand Recognition: Helping us to recognize the brand when we accidentally
see it.

In general, Brand Awareness will include seeing the brand name and immediately
knowing the products of that brand, and as soon as it is mentioned the products and
services, you know the name of the brand provided.

The Importance of Brand Awareness (Amanda, 2021)

+ First, brand awareness helps to keep the brand in the mind of the customer. If
people know the brand, they can become familiar and comfortable with it. Then,
it will be easier for them to decide on "long-term cooperation" with your brand.

+ Brand awareness also helps achieve a wide range of business goals and
objectives. It can expand your audience, increase website traffic, build brand
relationships, and attract potential customers.

+ Drive repeat customer purchases. With a good marketing campaign that focuses
on the brand and its business model, it more effectively narrows the target
audience and encourages them to feel connected and empowered by the brand.
Brand awareness influences perceptions and attitudes, driving brand choice and
even brand loyalty. This means that without brand awareness, the likelihood of
repeat purchases is less.

Regarding the packaging of Dermarium, if there is a change, attention must be paid

to the customer's Brand Awareness. Since they have memorized and shaped their minds
about Dermarium through the old packaging for a while, when it is changed suddenly /
many times, it is easy for them to be confused and question the difference of the product
across shipments. This will adversely affect Dermarium's Brand Awareness.

2.3.2. Apply the theory to propose solutions

Changing packaging is an important and necessary part of every brand's lifecycle.

Many changes are customary, but some are more radical, due to changing customer
trends, the need for innovation. However, even small changes can have a significant
impact on sales, so figuring out a packaging change strategy is important.

48
 Before changing the packaging, Dermarium should refer to the times when it is
necessary to change the product's packaging:

1) Launching a new product line: New products are the most

attention-grabbing items. However, if the packaging design is
not changed, there is nothing new in the eyes of customers to
convince them to give up the product they have attached to and
switch to distributing this product. Changing the packaging
design is a simple but effective way for customers to quickly
notice the company's products.

2) Emphasize the improvement of the new product line: If

Dermarium has a better version of its product line. Then change
the packaging design before it hits the market and emphasize
what the improvement is. This change not only makes the
product more attractive, but also helps distinguish new and old
product “generations”.

3) The old design is outdated: In fact, the life of the

packaging design is often not high. The reason is that the trend
of the times is constantly changing and the tastes of customers
also change. It will be difficult for products to compete with
competitors when their packaging is eye-catching and their
packaging is outdated. Therefore, whenever you feel that the
packaging model no longer meets the needs of the market, change it.

4) Change in business strategy: When Dermarium begins to

implement a new business strategy, many things must change
with it. In which, there is packaging design, which not only
creates synchronization in the brand image but also helps
Dermarium's business strategy to quickly achieve good results.

49
 Some strategies when changing product packaging: After understanding the
times when it is necessary to change packaging, the team proposes to Dermarium a
number of strategies when changing product packaging to minimize the inconvenience
to customer’s brand identity:

1) “Getting people on board”: Before putting new packaging on shelves, explain to

everyone the changes that will be made. Build awareness across channels, making sure
people search for your brand with your new packaging. The transition is also about
helping people understand the reason for the change. If packaging is changed for
environmental reasons, this is a great opportunity to tell your company's customers about
the benefits and how they will contribute with their purchase.

Specifically: Information to customers about changing

the packaging of one or more product lines on the
official fanpage of Dermarium (BOHEMIAN
RASPBERRY, Dermarium, Beauty Blog, ...), the
Youtube channel of Cong Chua Dong, Tiktok
Dermarium Official channel, Shopee, Tiki, Lazada e-commerce platforms and also
emailed genuine Dermarium distribution partners describing in detail the change of the
product's packaging. products so that partners are not surprised when they import new
batches of goods.

In addition, Dermarium may implement a

number of eco-friendly packaging strategies,
manufactured from biodegradable plant-based
ingredients to attract customers when they know
that using 1 Dermarium product has contributed to
reducing a part of waste into the environment. As BillerudKorsnäs, a company that
provides paper packaging services, has just collaborated with Coca-Cola and L'oréal on
a project in October 2019. Especially L'oréal is making commitments to reduce the use
of plastic packaging over time.

50
 2) Customer Experience

People often rely on “eye sight” or sight to make quick and easy decisions.
Accordingly, size, image, color are key identifiers that allow people to make quick
decisions about their favorite brands.

Most packaging changes will be minor, but major changes should try to identify
and retain signs that help people identify and connect with
the brand. It can be the color, logo or image of the brand.

Specifically: The color of Dermarium is one of the factors

most appreciated by partners. “I think Dermarium is
probably the most colorful brand on the market” - Ms. Dr.
Nhung and the interviewed partners also commented on
the unique colors of Dermarium products. The set of colors
that are bold in the "universe" but equally outstanding such
as purple, pink, green, blue, yellow, black, ... must be
combined and unchanged even if Dermarium changes the
packaging such as: anyhow. This will be the point where distribution partners can easily
identify Dermarium and easily advise customers if they have questions about packaging
changes. In addition, the word Dermarium brand name, which is already familiar to
customers, should also be prominently printed during packaging changes to help
Dermarium catch their eyes first when seeing the product, helping them remember the
brand better.

3. Organizing product packaging design contests:

Besides the above solutions, businesses can organize product packaging design contests
every time they want to change the packaging.

- Audience: people who are interested, and have knowledge about cosmetics, about
skin care.

- Requirements: participants in the contest need to bring creative ideas in line with
market trends.

- Business benefits when organizing packaging design contests:

51
 + These competitions help connect Dermarium's partners nationwide, enabling
distributors to meet and learn more about expertise. Besides, they can also share
the advantages and challenges in the process of product distribution, together
propose ideas to promote better development work. Besides, these competitions
are also an opportunity for Dermarium to connect more deeply with partners.

+ By analyzing the results obtained from the participants' designs, Dermarium is

able to find trends in the packaging in the market from the customers themselves
who are using the cosmetics. This helps businesses have more practical ideas
for changing packaging. Besides, it will also help businesses save a part of the
cost of designing, and surveying the needs and desires of users.

+ These contests as a form of marketing help businesses reach many potential

customers. The contests will help the brand to be known by many people, and
gradually build trust with customers, thereby helping the business's spread in
the market to be improved.

- Organization form: Offline and Online

- Location:

+ For the first time, according to our information, in the near future
Dermarium will cooperate to open a clinic in Ho Chi Minh City, the design
competition can be held on the day that the clinic opens to help save
money. Save space rental costs and attract more people to know about The
Great Clinic.

+ The next time the business can continue to organize in Ho Chi Minh City
or the head office in Hanoi to save space costs.

- Contest Rules:

+ Participants can design via paper and send it to the company's address
when choosing the Online form.

+ Candidates who choose the Offline form can design directly at the venue
through foam blocks

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 - Cost:

+ Materials:

- Styrofoam: For a rectangular foam block with a size of 10cm

thick, 10cm wide, and 50cm long, it costs 30,000 VND,
businesses can divide it into many blocks with different
sizes. On average, 100 rectangular foam blocks with size
10cm*10cm*15cm will cost nearly 1,000,000 VND.

- Coloring: To color 100 foam blocks, we need about 10 sets

of watercolors costing 105,000 VND. The total cost of
painting is about 1,050,000 VND

- The cost of space can be reduced when the business is organized at the
headquarters in Hanoi or the Clinic is about to open in Ho Chi Minh City.

- The proposed group award structure:

+ First prize: 3 million + 1 combo of Dermarium products

+ Second prize: 2 million + 1 combo of Dermarium products

+ Third Prize: 1 million + 1 combo of Dermarium products

(1 combo of some outstanding products of the company costs about 670,000 VND)

53
 ● Dermarrium Trick Duet 2% Salicylic Acid (BHA) 55ml- Exfoliating Toner for
skin about 115,000 VND

● Dermarrium Omnipotent Serum B3 10 ml superior formula for all skin types

about 310,000 VND

● Dermarrium Fairy Water 55 ml gently moisturizers acne-prone skin about

150,000 VND

● Dermarrium Goodnight 55 ml - Activated Charcoal Cleansing Gel about 95,000

VND

- The cost of running ads on social networking platforms like Facebook is about
500,000 VND

Thus, the total cost that businesses need to pay for each product packaging design
contest is about 10,000,000 VND.

3. Restrictions in distribution channels and consumer confidence

3.1. Explain the problem

In fact, currently, Dermarium has not yet received attention from consumers and
is still a "strange" brand, quite new in the domestic cosmetic market. Because of this,
users still do not fully trust the quality of the product, especially the product is still
labeled domestically and the "foreign" mentality of Vietnamese users is always a matter
of concern. Dermarium's distribution partners are still limited to stores, spas and e-
commerce platforms, so customers still don't have much access. Dermarium's customers
will still mainly come from people who have used the product and come back, making
it difficult to reach new audiences.

The number of loyal customers of large cosmetic distribution chains is quite high.
Because in this distribution channel, many benefits for consumers are mentioned as
follows:

+ Consumers can buy many cosmetics of many different brands in one store
without having to go to many places, and still you can rest assured to buy genuine
quality products because they are certified by brands.

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 + Consumers also get to see, try and compare products with other brands before
buying.

However, Dermarium has quite strict requirements for distributors including

understanding, knowledge base and ability to advise customers. This helps the company
become more professional, but also, at present, Dermarium has not yet found a reputable
large distribution chain suitable for the needs and development goals of the company,
so the product has become widely available in the market is still an issue to consider.

3.2. Impact of the problem

3.2.1. For businesses

In terms of advantages, the strictness in the selection of partners makes the

product distribution more suitable, reaching people who really know the uses and
benefits. How to be able to optimize the use of the product thanks to the advice of the
seller (Dermarium partner). Dermarium's orientation in the present time is still not to
follow the quantity, not to sell as much as possible, but to need users to use it correctly,
understand it correctly, know how to take care of the skin and know how to choose
information when buying products. This is completely achievable when the partners that
Dermarium chooses are those who must have a certain background of knowledge, or
have a degree in dermatology and then the company does a lot of training before selling
products.

However, the disadvantage of this option will make it difficult for Dermarium
products to become popular in the market, making it more difficult to expand and
develop the brand in the future. There are more and more cosmetic businesses in the
cosmetic industry, the products are gradually becoming saturated and difficult to
impress customers, this "slowly but surely" plan of Dermarium will make the process of
bringing the brand to the market. Going to the big market becomes more permanent and
perhaps what the company needs to do is a reputable, quality and sufficient chain of
distribution stores to partially meet its requirements.

3.2.2. For consumers

Because Dermarium's products are currently only distributed in fixed stores, not
in chain stores such as Watson, Hasaki, Beauty Box, Guardian, ... product access is still

55
a difficult problem. Most of the customers coming to the company will be those who
have a background in knowledge or have a certain understanding then try it and come
back. For new customers, it will be difficult for them to use a product from a brand they
have not known or heard of to try at a price that is not entirely cheap.

In terms of reputation, retail chains may be hard to match with stores or spas run
by doctors and dermatologists, but this is a good business "region" when people are not
satisfied with their business. Consumers are increasingly favoring the convenience of
these retail chains: many promotions, many brands to choose from, high promotion
frequency and variety of giveaways, online shopping advice, ... This has made the
products at this store chain easier to reach consumers thanks to the large number of
customers every day. Currently, the majority of users who do not have much knowledge
or background will still choose to trust the products from this chain of stores and the
advice of the staff in the store rather than researching and asking about a store by
themselves. products or brands that are completely new to them.

3.3. Solutions proposed by Group

3.3.1. Theoretical Proposal

The first theory of "Distribution Channel": Distribution channel plays an

extremely important role in marketing activities of a business because it is the way to
bring products into the hands of final customers. Conceptually, a distribution channel is
understood as "a set of relationships between independent and interdependent
organizations and individuals that participate in the process of bringing goods from the
producer to the final customer". The essence of a distribution channel is to create a flow
of goods and services through or without intermediaries to connect producers to
consumers. Participating in a distribution channel has two groups of members, which
are organizations or individuals:

- The first group especially the official members of the channel, who are directly
involved in the buying and selling process and are responsible for the results of
the channel system. They include: Manufacturer or importer; commercial
intermediaries including wholesalers and retailers; end customers.

- The second group includes complementary organizations, who provide

professional marketing services to official channel members. They make it easy
56
 to distribute goods in the channel but are not responsible for the final performance
of the channel system.

A good distribution strategy will be an important tool for products to penetrate

new and distant markets. On the contrary, if the distribution strategy is not reasonable,
the circulation process will not be smooth, it will cost a lot of money, the consumption
results will not be high or sometimes sales opportunities will be lost. Distribution acts
as a "bridge" between production and consumption. The main reason for using
intermediaries is that they are most effective in ensuring wide distribution and getting
goods to target markets; When a distribution intermediary appears, the manufacturer
only needs to establish a relationship with the distributor, the intermediary distributor
already has a relationship with the customer and can sell the same customer's goods.
many manufacturers.

The second theory of the “crowd effect”: This phenomenon is described when an
individual or a group of people is psychologically influenced by the behavior of the
crowd. It will often occur in unclear social situations, where we cannot immediately
determine what is the appropriate behavior to take, but instead are subject to the
influence of the majority to decide on the final act. Or we often say that it is following
the majority, believing in the decision that the majority chooses that this number will
make a more accurate decision.

This can be clearly seen through people's behavior when they will choose a place
with more people between two shopping stores or any two restaurants. The spread of
information today also happens very quickly, so when a place is considered
"prestigious", people will easily trust and come to more. This is a perfect marketing
"weapon" in business. The clearest evidence shows that the success of retail chains such
as Hasaki, Skinfood World, etc. still largely stems from the crowd effect thanks to the
aggressive marketing campaign with many attractive promotions, attract a large number
of certain consumers and attract more customers through this strategy.

For Dermarium, the popularity of the brand is not high because it does not have
a wide distribution channel. If the company chooses large distribution channels, the
company will easily reach users and take advantage of the crowd effect for product
marketing based on a large number of loyal consumers of the above retail distribution

57
channels (due to the large number of loyal consumers). Most customers still choose
retail chains to buy products, the crowd will always follow what is available and trust
the products and consultants in the store). This helps customers to recognize the brand
with a higher frequency and gain the trust of the majority of customers when they appear
at the stores that they are assessing as "reputable". And when the number of users
reaches a certain level and they realize the effectiveness of the product, they will
continue to recommend it to others and use, "one in ten, ten in one hundred", more and
more people use it. application will stimulate new customers to experience the
company's products.

3.3.2. Applying the theory to propose solutions

Based on the theories mentioned, users still tend to choose large retail chains to
shop for cosmetics, much of which is due to the crowd effect that creates a sense of
satisfaction. Trust in the reputation of these chains is quite high. Therefore, choosing to
combine distribution in large retail stores will be a stepping stone to increase brand
awareness in the market. To be able to choose a reputable distribution chain and meet
the company's goals, Dermarium can use the following steps:

1. Provide at least basic criteria for evaluation:

+ Location

+ Relevant experience

+ Financial situation

+ Infrastructure (warehouse, sales and services, offices)

+ Relationship with buyers

2. Create a list of distribution chains that meet requirements

3. Assess capacity, facilities and preferences of each store in each potential chain

4. Negotiate to reach mutual agreement of both parties.

Recommendation:

With Dermarium, the company can choose to cooperate with reputable cosmetic
store chains like Hasaki. The advantages that this chain of stores currently have are:

58
 + Wide distribution store system with 82 branches nationwide: The stores are
opened in prime locations, densely populated, ... Hasaki stores are relatively
spacious, ensuring the customer's experience at the store (ATP Media, 2021).

+ There is an online store system and applications on phones with Android and iOS
operating systems: Just open and scan the product barcode, all information about
products, prices, promotions will appear quickly. fastest and most accurate (ATP
Media, 2021).

+ Free fast delivery, within Ho Chi Minh City, there is a delivery service under 120
minutes for customers.

+ Incentives and promotions are regularly organized to stimulate customers to

shop, help goods be sold faster, and avoid inventory (ATP Media, 2021).

+ There is a 2-layer protection policy from Hasaki and its distributors or

representative offices in Vietnam for customers: The brand representative said
that this has made many brands trust the Hasaki brand reputation, and signed a
cooperation agreement to distribute products (Hasaki, 2021).

+ Quality service is guaranteed, staff is experienced and participates in many

professional courses. And all employees are usually trained and tested regularly.
Thus, when customers come, they can be consulted carefully and make sure to
correctly identify the problem that the skin is having.

+ Hasaki has now created a reputation in the Vietnamese market in the field of
supplying and distributing genuine cosmetics.

In addition, after choosing the right distribution chain, Dermarium may ask to
participate in training sales to ensure that the right product will reach users, not mass-
sell, ensuring the criteria before that the company is always aiming for.

59
 CHAPTER 4: CONCLUSION AND RECOMMENDATION

1. Conclusion

The analysis from the Segmentation section gave the characteristics of the size,
strengths and weaknesses of the business, the number of competitors, their strengths and
weaknesses, the factors of success, and the compatibility of each segment for
Dermarium. From those actual data, we have suggested that the target market that
Dermarium should focus on is Stores. After conducting interviews with 6 cosmetic
businesses from Dermarium and other brands, we compiled data to draw a map of
Dermarium's positioning in the Stores market. Of the two criteria chosen to draw the
positioning map, Product Quality and Price, Dermarium are rated higher than other
competitors such as Cocoon, Zakka, etc. From that, the Stores market is suitable with
Dermarium. To be able to utilize resources optimally and reach the goal of bringing
Vietnamese cosmetics to the world first, businesses need to perform well in the current
market segment before expanding to other segments. In addition to providing good
quality products at reasonable prices, businesses should conduct more marketing
programs focusing on the Stores segment to find more suitable partners to help more
consumers and businesses have more and more partners.

2. Recommendations

1) Keep the price stable:

Since the beginning of the Covid 19 pandemic until now, consumers' incomes have
also been affected and there are a lot of unemployed people, so most people tend to cut
unnecessary expenditures. cosmetic. Distributors will also import product lines from
brands with moderate prices to meet the trend of cutting user spending. The positioning
map shows that Dermarium's product prices are highly rated in line with the majority of
current distributors.

⇒ Therefore, to develop Dermarium should continue to provide products at the current

average price.

60
 2) Pay attention to packaging changes and improve the quality of freight

Some interviewed businesses said that Dermarium's change of product packaging and
heterogeneous packaging makes it difficult for customers to recognize the brand's
products, besides it will also increase the design costs for the brand. Besides, the
information printed on the packaging of some products is easily blurred during use and
transportation, reducing the satisfaction of distributors and customers.

==> Dermarium avoids changing product packaging when it is not really necessary such
as responding to market trends, or launching new products, ... In addition, businesses
need to ensure the highest quality of packaging to avoid smeared printed information.

==> Dermarium needs to pay attention to the transportation of goods to ensure product
quality when it arrives at the distributor. For information printed on product packaging,
businesses need to improve or change the type of ink and packaging material to avoid
blurring during transportation and use.

3) Conduct appropriate Marketing activities

The current Brand awareness is not high, so although the product quality and price
are very good, Dermarium is still not known by many people. The main customers of
Dermarium and its partners are mostly old customers who have used the brand's products
before.

⇒ In order for the brand to become familiar to consumers, businesses should conduct
marketing activities on social networking platforms such as Facebook, and TikTok, ...
and combine with KOLs to bring products to more people.

61
RELATED PROOF:

https://drive.google.com/drive/u/0/folders/1iQR3LLsmBXqL2G-GoSIH7ihkVUYxE-
By

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PLAGIARISM SCAN RESULTS