Brand positioning in LC vina cosmetics LTD

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
--------------oOo--------------MASTER OF BUSINESS ADMINISTRATION

BRAND POSITIONING IN LG VINA COSMETICS LTD

NGUYEN THI THANH TRUC

Ho Chi Minh City – 2016


CONTENTS
ABSTRACT .................................................................................................................................... 1
CHAPTER 1 PROBLEM IDENTIFICATION .............................................................................. 2
1.1 Company background ........................................................................................................... 2
1.2 Problem Symptoms ............................................................................................................... 3
1.3 The definition & importance of the problem ........................................................................ 8
1.4 Justify the existence of the problem ...................................................................................... 9
1.5 Potential causes of the problem and the justification .......................................................... 10
Company strategy & Limited budget. ................................................................................... 19
Ineffective activities planning. .............................................................................................. 19
Lack of qualified brand in charge person. ............................................................................. 21
Wide target image. ................................................................................................................. 22
Conclusion chapter 1..................................................................................................................... 23
Cause and Effect Map ................................................................................................................... 19
CHAPTER 2 ALTERNATIVE SOLUTIONS ............................................................................. 20
2.1 Alternative solutions ........................................................................................................... 20
Re-define the target image of Essance and measure the effectiveness of MKT activities .... 20
Hiring new Brand Manager ................................................................................................... 23
2.2 Solution evaluation.............................................................................................................. 27
Conclusion chapter 2..................................................................................................................... 29

CHAPTER 3 ACTION PLAN ...................................................................................................... 29
Conclusion chapter 3..................................................................................................................... 30
APPENDIX A ............................................................................................................................... 31
APPENDIX B ............................................................................................................................... 35
REFERENCES ............................................................................................................................. 42


LIST OF IMAGES
Image 1.1: Essance turnover over 2013-2015................................................................................. 4
Image 1.2: Number of buyers Essance compared to other rivals in 2015 ...................................... 5
Image 1.3: Share of Essance decreased over 2015 ......................................................................... 5
Image 1.4: Essance penetration compared to Maybeline’s ............................................................. 6
Image 1.5: Essance customers’ age compared to its competitor, Maybeline ................................. 7
Image 1.6: Value growth of Mainstream segment over 2015 ....................................................... 10
Image 1.7: Value contribution channels in Mainstream 2016 ...................................................... 16
Image 2.1: Nine functional areas of a brand manager .................................................................. 24

LIST OF TABLES
Table 1.1: Branding activities of Essance vs its competitor, Maybeline ...................................... 14
Table 1.2: Pricing comparison Celebrity ...................................................................................... 20
Table 2.1: Estimated cost for measuring MKT activities ............................................................. 22
Table 2.2: Estimated cost for hiring Brand manager .................................................................... 26
Table 2.3: Solution evaluation ...................................................................................................... 28
Table 3.1: Action plan................................................................................................................... 29


1
ABSTRACT
This research is to find out what problems are affecting Essance’s low performance in
brand health & sales results in LG Vina Cosmetics Ltd., Company. Using data from in-depth

interviews with marketing manager and target customers, besides reports of Kanta Worldpanel
about some Key Performance Indicators (KPI) of Essance over 2015, the research found out that
the ineffective execution of Essance positioning strategy is the central business problem which
leads to the low brand performance, indicating through low indicators of brand health check and
low sales performance as well. Next, in deeper analyze of the potential causes of the problem,
the researcher found that the Company strategy & Limited budget, Ineffective activities
planning, Lack of qualified brand in charge person and the Wide target image are root causes
leading to the wrong execution of positioning strategies of Essance. Forwards, the paper
suggested solutions relating to Re-defining brand image target and measuring the effectiveness
of Marketing activities besides hiring new brand manager to improve the execution of brand
positioning strategies in LG Vina. Finally, the action plan with detailed steps was presented to
implement this strategy.


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CHAPTER 1
PROBLEM IDENTIFICATION

1.1 Company background
The Vietnamese full name: Công ty TNHH Mỹ phẩm LG VINA
The English name: LG VINA Cosmetics Ltd.
Address: 138-142 Hai Ba Trung Street, District 1, HCM city.
Website: />Staff: Over 500 employees.
LG VINA Cosmetics Ltd is a combination of LG Household & Health Care Korea and
Vietnam Vegetable Oils Industry Corporation (Vocarimex). LG VINA does business in two
main areas: Household goods (hair care, body care, oral care) with brands as Double Rich,
Bamboo & Cosmetics (Makeup, Skin Care, Functional food) with The history of Whoo, O HUI,
Beyond, VOV, Essance, E'Z up, Lacvert…
The process of formation and development of LG VINA:
- 1996 - 1997: Explore the Vietnamese cosmetics market as well as the needs of women in

Vietnam
- 22/10/1997: LG Household & Health Care Korea and Vocarimex signed the agreement
establishing LG VINA.
- 3/2000: Become the first cosmetics company has a factory producing products in VN
- 7/2008: Continue to develop and expand the business areas by building factories toothbrush
- 9/2001: Achieved ISO 9001 certification for quality products


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- 11/2002: Achieved ISO 14001 certification for quality environmental management.
- 6/2009: Whoo Spa, which is the most luxury spa in Korea, firstly came to Viet Nam.
Cosmetic division is divided into 3 segments: Super premium (Whoo, OHUI), Premium
(Beyond, VOV) and Mainstream (Essance, E’Z up, Lacvert) which are both taken care by
Marketing manager. The focus of this paper is on the Essance brand of Mainstream segment,
which are in charge of four persons: 1 general Marketing manager cum the position of Brand
manager, 1 trade category manager, 1 assistant trade category manager and 1 brand executive.
To have more information about this segment, Mainstream is contributing around 30% to
the total turnover of Cosmetics division of LG Vina and Essance is holding 80% of Mainstream
segment. It can be said that Essance is the core brand of Mainstream segment. In term of
competitive market, Maybeline is their most potential competitor as they target the same segment
and have a similar business kind with Essance (major focus on Make-up). Other rivals are ZA,
Hada Labo, POND’S….who both contribute to a competitive picture of mainstream segment.
1.2 Problem Symptoms
To find out the problems causing low brand performance, the research carried out initial
in-depth interviews with Mr. Ngan, Marketing Manager of LG Vina, Cosmetics department, who
is cum brand manager of Essance at the present. According to the interview result as well as the
data he shared, Essance witnessed a decrease in brand performance over the period of 2013 –
2015. The turnover sharply decreases from 2013 – 2015 and could not reach target over these
years.

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Essance
2013

2014

2015

Target

158,792,327

184,127,193

182,084,600

Actual

160,957,591

137,490,596

131,894,859

% Reach target

101%

75%

72%

(Unit: 000 vnd)

190,000,000

190,000,000

180,000,000
170,000,000

170,000,000
Target

160,000,000

Actual
150,000,000

150,000,000

140,000,000
130,000,000

130,000,000
2013

2014

2015

Image 1.1: Essance turnover over 2013-2015
Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
The decreasing turnover goes along with falling indicators about brand health of Essance.
According to that, number of Essance customers is decreasing over 2015 and around 100,000
people, just higher than Hada labo in mainstream segment.


Buyers (000)-Actual Yr on
Yr

5

500
400
300
200
100
0

Essance

Maybelline

Pond'S

Hada Labo

Image 1.2: Number of buyers Essance compared to other rivals in 2015

Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
Essance market share, one of the most important indicators of a brand health, is
decreasing by 33.2% from 2 % to 1.3% over 2015. It is also obvious that Essance’s portion is not
high in the whole category, compared to its rivals (Maybeline 3.8%, PONDS 8.3%).

Product % of Category

% Change

Hada Labo

78.1
0.4

Pond'S

Maybelline

8.8

-0.5

0.7

8.3
8.3

3.7

3.8

2.0

1.3

-33.2

Essance

Image 1.3: Share of Essance decreased over 2015
Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e


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Besides, Essance experienced a decreasing penetration level over 2015 with a higher lost
market percentage and lower new customers and repeaters.

15

10

ESSANCE
penetration %

15

MAYBELLINE
penetration %

10

5

Repeaters
0

Lost market

3.9
1.3

2.2
1.0

-3.5

-4.3

5

0

(5)

New market

4.7
1.8

5.1

1.7

-4.6

-4.8

28-Dec-14

3-Jan-16

(5)

(10)

28-Dec-14

3-Jan-16

(10)

Image 1.4: Essance penetration compared to Maybeline’s
Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
Essance is losing its ability to recruit new buyers while Maybelline is speeding up. Source:
Kantar Worldpanel – Households Panel – Urban Vietnam 4 key cities - Mainstream Essance &
Maybelline- 52 w/e.
Especially, there is a gap between Essance real customers’ age and targeted ones.
According to the brand positioning strategy, Essance’s targeted customers are 18-25 years old
whereas the real customers who account for big portion in Essance’s revenue are over 40 years
old.

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Image 1.5: Essance customers’ age compared to its competitor, Maybeline
Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
Buyers of Essance is more skewed to the older group (40+) while buyers of Maybelline is
younger (< 30 yo). Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
Among these four symptoms above, it can be concluded that the issue of positioning in
the 4th symptom is the central problem which has connection with the remaining issues. Through
a gap between targeted customers’ age and real ones, the problem in Essance positioning is
indeed an issue to be solved as the major of Essance customers now (the old ones) come from the
existing customers, which is proved by the fact that this brand could not recruit new customers
over 2015 (the 3rd symptom). Therefore, in the long term, these existing customers will be
supposed to be aging, and leave Essance since they are no longer suitable with the brand image;
whereas Essance cannot recruit new young customers at the present. Hence, it will lose share &
revenue to their rivals and disappear as a certain result. Therefore, in the extent of this thesis, the
writer will choose the problem of Essance positioning strategy as the main issue for deeper
analyzing.


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1.3 The definition & importance of the problem
According to Perreault and McCarthy, (1) positioning is how customers think about a
brand in a market or how it is perceived in the minds of consumers, relative to competitor
brands. William (2) claims that brand positioning is a tool for companies to build a sustainable
competitive advantage on product attribute in customers’ perspective. Positioning a brand is
regarded as a fundamental marketing objective. The act of positioning a brand is thought to be a
key marketing objective, with the premise that each brand is just suitable with a certain position.
The characteristics of a good position for the brand are perceived as uniqueness, strength and
prevalence. Bhat and Reddy (3) state that companies could possibly harm the perceived

positioning of a product when choosing the wrong positioning and decrease sales performance as
a result. They also found that creating a brand’s position takes long time and vast investment,
especially in advertising. Besides, Crawford (4) also argues that brand positioning focuses on
perceptions of consumers about a firm’s products or brands. Davis et al. (8) claim that interaction
with customers plays a major role in the actual brand positioning, and the brand image is formed
from every interaction between a firm and its customers. Therefore, the whole organization has
to become aware of the intended brand positioning strategy and demonstrate it consistently when
interacting with customers. (8-10).
In term of Essance case, we have already defined the problem lies in the gap between
target customers and real customers. This issue, a distinction between intended and actual brand
positioning, used to be mentioned by Fuchs and Diamantopoulos. (5) According to them,
actual brand positioning is which the company intends the brand to be perceived by customers,
and actual brand positioning is actually presented to customers through marketing
communication. According to that, positioning appear to be controlled by the purpose of


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choosing the position that bring the highest benefit for customers, touching the largest or most
profitable customer segment, or being well differentiated from competitors. Fuchs and
Diamantopoulos (5) also stated that the brand performance will be negatively affected if the
intended positioning is well chosen but its execution (i.e. the actual positioning) fails to result in
an effective perceived positioning by consumers. Thus, positioning effectiveness can be
compromised by choosing the wrong positioning strategy (poor intended positioning) or by
poorly executing a sound strategy (poor actual positioning).
1.4 Justify the existence of the problem
The next step is to find out whether the issue comes from the execution of positioning
strategy (1) or it was initially wrong when choosing the inappropriate segment of customers (2).
In term of (1), it is evident that the major customers (over 40 years old) who are buying
Essance now are not newly recruited by Essance. They are all existing customers as the fact that
Essance could not recruit new customers (symptom 3_Image 1.4 above). In other words, this

old segment cannot make sure to say that it is more beneficial and potential with Essance.
On the other hand, the 18-25 segment which has been pursued by Essance early from the
start, showed to be a potential one with the growth of many other competitors as well as the
average segment (Image 1.6). Specifically, in term of the overview picture of Mainstream
segment, Kanta report 2015 showed that the general segment and other competitors witnessed an
increase in value growth over 2015, whereas Essance experienced a decrease of 4% versus 2014.
It contributes to the argument that the issue of low performance of Essance is the internal
problem of the brand, which rarely involved with the situation of the market.


34.1

10

40.0

19.2

1.9

5.7

5.1

11.1

20.0
10.0

22.6

30.0

-9.0

-7.2

-10.0

-4.0

0.0

-20.0
Total Mainstream
Cosmetics

Maybeline

ZA

POND'S

Essance

Value growth (%) MAT vs. YA
Image 1.6: Value growth of Mainstream segment over 2015
Essance value decreased against with the increase in the total Mainstream and other
competitors. Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
With all established foundation for these target customers, there is not enough evidence

to conclude that the 18-25 segment is inappropriate with Essance. Therefore, now the issue
would be the concern of wrong execution of positioning strategy, which made target customers
perceive Essance in a different way from the brand expectation.
1.5 Potential causes of the problem and the justification
The causes of the problem, wrong execution in Essance’s positioning strategy, are taken
from in-depth interviews with target customers. The project continued to carry out in-depth


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interviews with targeted customers (who are from 18-25 years old) about their perception
towards Essance and competitors. Since Essance has two categories, make up (80%) and
skincare (20%), the focus of these customers interviews will be on make up only, which would
help easier to compare customers’ views about brands. The quantity of interviewed customers
stops at twenty five when they both have similar thought about Essance. A list of their feedback
is categorized into two group causes following: Weak interaction and Wide target image.

Weak interaction
Wrong execution in
Brand positioning
Wide target image

In term of Weak interaction, the feedback is continuously divided into three different
small groups: Above the line (1), Below the line (2) and New Product Development (3) (which
are named according to functions in a Marketing department) as:

Lack of brand activities
Inappropriate Celebrity

Above the line

Low Facebook interaction
Weak
interaction
No business in Modern trade
channel
Unattractive Promotion

Below the line

Degraded visual merchandising

Outdated packaging, unstylish

New Product
Development


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Regarding the first group, Above the line has three main caused collected from
customers’ view as:

Lack of brand activities
Inappropriate Celebrity

Above the line

Low Facebook interaction
Lack of brand activities. Customers claim that they did not see Esance around them
much like other cosmetics brand (Maybeline, ZA, POND’S…). They did not see its image &
activities when they go out, when they watching TV or even when they go to the supermarkets.

With that lack of the presence, they find it hard to remember Essance as well as to buy it when
they are in need of cosmetics. This customer feedback is validated again via the Marketing
activities report through last year, 2015 (shared by Mr. Ngan). As a matter of fact, Essance is
standing behind Maybeline due to the lack of investment on branding activities or channels to
approach their target customers. Admitting all these matters, Mr. Ngan explained that they
cannot compete with Maybeline in those fields as the limited budget assigned from the company
strategy. They just have lightly maintaining activities on Facebook as Above the line and some
small activation at their selling points as Below the line, apart from one big campaign lasting on
both channels in two months.
Essance

Maybeline

Investment

Is not the focus of LG in Vietnam

Priority focus in Vietnam market of

Strategy

(instead of OHUI, Whoo), contribute

L’oreal group

22% of total Cosmetics turnover of
LG


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Activations

Sparse in supermarkets with a small

Make noise regularly in supermarkets

number of stores are covered

& markets

Launching

Just 1 big campaign for 1 key item

- Many big campaign in 2015:

new products

launching, lasts only in 2 months (Oct

+ Giftsets with special promotion (4

2015 & Nov 2015)

periods/year)
+ Big events with customers in key
cities (Thai Nguyen, Can Tho, Nha
Trang) in quarter 4/2015
+ In HCM city, run event “Make up
show & special shopping” in

entertainment centers as The New
District, Vivo City by weekends

Facebook

Low interaction with customers

High interaction (over 600,000 like,

(lower than 100,000 like, only 20 – 30

around 1000 like/post and hundred

like/post and several comments or no

comments or shares)

shares)
Celebrity

Helen Tong who are less famous than

A range of famous celebrity in

other rivals, she is more famous in

entertainment (Dong Nhi, Ngoc Thao,

business instead of entertainment

Miu Le, Quynh Anh shyn…) which

(many customers dont know her and

are suitable with the image “young,

feedback on fanpage).

modern” of Maybeline

Beside, with limited contract (1 year),
Essance cannot use her image widely
TVC

Visual

Essance hasn’t run TVC for a long

Run TVC on biggest channels (VTV,

time regardless the fact that TVC is

HTV) on golden hours in launching

still the most effective channel to

time of its key item (Silky Two Way

approach major customers

Cake)

Cabinet in shops/supermarket, POSM,

Attractive & modern cabinet, POSM

merchandising leaflet...) are old, degraded, using unupdated image of new products

and other branding tools to approach
customers


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PG

A few in supermarket (12/40 stores of

Many in supermarket (24/43 stores of

Coopmart, 7/20 stores of Big C have

Coopmart, 15/30 stores of Big C have

Essance PG)

Maybeline PG)

Table 1.1: Branding activities of Essance vs its competitor, Maybeline
Source: Business Performance Review 2015, Internal report, LG VINA Cosmetics
Inappropriate Celebrity. When being asked about Hellen Tong, the face of Essance,

many young customers do not know who she is, they shared that they hardly see her on Media
and do not know which brand she is representing until the author told them that Essance. Indeed,
Helen Tong is a new celebrity who is early famous as a young business women. Her image
usually shows off with special fashion style & angular face.
Low Facebook interaction. Some customers shared that they buy cosmetics mostly by
searching around fan pages of cosmetics brands. Maybeline & POND’S fanpage are most
favorite brands as they frequently update new products with many attractive give-away sample
programs for customers to try. Besides, they also give customers knowledge about make-up &
skin care tips through those sites, “which are really useful to me and I don’t need to search for
those knowledge on any other sites”, a customer said.
On the opposite, when being asked about Essance, customers claimed that they used to
stop by Essance fanpage several times, but it seems that they hardly update information on it,
every post is posted sparsely. Besides, some feedback claims that the fan page seems not to be
friendly with them because of the unattractive design and the lack of useful information they
need. They want a more attractive, young & updated fan page like Maybeline’ & POND’S’.
Explaining for this issue, Marketing Manager shared that as they have no extra budget for this
channel, they run their fan page on their own, and the new Marketing Executive is handling this


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task. When being asked about this fan page, the Marketing executive shared that she had to focus
on other important tasks such as New Product Development or other administrative tasks before
the priority of fan page management. Besides, she also does not receive the KPI target for this
fan page she is managing from the Marketing Manager.
Besides, the second group of Below the line has three reasons:

No business in Modern trade
channel
Unattractive Promotion

Below the line

Degraded visual merchandising

No business in Modern trade channel. Almost Essance young target customers shared
that they would go to the supermarkets or specialty stores to buy cosmetics when they are in
need. However, due to the company strategy, Essance recently cut down their business in
supermarkets and other convenient stores (Modern trade channel), where are supposed to mostly
convert Essance image to focus only on traditional channels.


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17.2

14

13.8

15.1

23.7

43.2

Dec'14
Street Shops

Modern trade

29.8

35.7

Jan'16

Specialty stores

Online

Wet markets

Image 1.7: Value contribution channels in Mainstream 2016
Source: Kantar Worldpanel – Households Panel – Urban 4 key cities- 52 w/e
According to Kanta Report (2015), Modern Trade contribution in Mainstream channels is
increasing over 2015 and rise up to 29.8% value of young customers shopping (aged 18-25) in
2016, opposite to the decrease of Street shops and Wet markets, two representatives of traditional
channels. Therefore, the lack of Essance image in this important channel can be one of the key
disadvantages in winning young target customers with other competitors.
Unattractive Promotion. Customers who ever used Essance shared that Essance’s
promotions are lower than other brands (Maybeline, PONDS…). Sometimes they intended to
buy Essance at home, but when they come to the store, they buy other brands with attractive
promotion offers from them. Besides, they also claim that Essance promotion is quite repeatable


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& boring. For example, buying full size product receive mini size attached is the most applied
promotion of Essance and reduplicated over and over months. Whereas, Maybeline express they
better understand customers in creating and changing attractive promotion gifts. With the same
purchased amount as Essance, Maybeline customers can receive gifts as beautiful purses, handy

mirrors or even scratching card to other big & special gifts. Reacting to this feedback, Mr. Ngan
explained that Essance could not compete with other big competitors (Maybeline, ZA..) in term
of promotion because of their limited budget. Instead of, they prefer to use promotions from their
products with mini size to reduce the cost of out-sourcing.
Degraded visual merchandising. Some customers stated that they like the fresh &
updated image of other brands than Essance. When they go to supermarkets, they are easily
attracted by modern display & outstanding & caring PG of Maybeline & ZA. Their PG put on
professional uniforms, deliver colorful leaflet & small gifts for customers stop by. They
introduce, advise & attract customers by highlight Point Of Sales Material (POSM). Otherwise,
Essance seem to be boring with the lack of PG in some stores (PG are just assigned in key
stores_shared by Mr. Ngan) and the degraded images and poor POSM. When being asked about
this issue, the brand executive who is in charge of Essance now, also admitted that they
sometimes cannot change the visual & POSM adapting with the product launching, because of
the scope of work and incapability to complete the deadline.
Outdated packaging, unstylish

New Product
Development

Finally, New Product Development comes with problem in Outdated packaging,
intrendy…Almost customer admitted that Essance product packaging is outdated and not trendy,
compared to other brands for young users. Whereas the price is a bit higher than other brands in


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the same segment (Maybeline, ZA), the packaging of Essance seems cheaper and not firm
enough. The patterns and colors are corny and less attractive. When being asked about this issue,
Mr. Ngan argued that these are just a few minority opinions. However, asking him about which
criteria or guideline Marketing based on to create products’ packaging, he shared they based on
the Pink concept color of Essance and Unique Selling Proposition (USP) of the brand, which has

its own problem mentioned following.

Wide target image

Wrong execution in
Brand positioning

In term of the second big group, the Wide target image. When being required to imagine
each cosmetic brand as a girl with featured characteristics, customers do not know who is the girl
of Essance. Instead of, they are immediately able to link Maybeline to a sexy & modern girl,
POND’S with naïve and girly, ZA is a Japanese girl with professional make-up. Regarding
Essance, they shared that they thought it is a brand for middle-age woman, as their mother &
relatives used them previously. Validating this problem with Mr. Ngan, he shared that Essance is
focusing on young target customers, aged from 18-25 with following Unique Selling Proposition
(USP) as: Feminine, Fresh, Creative, Modern, Full of energy, Romantic & Trendy, which are too
wide to focus on the same young segment whereas other competitors already chose for
themselves a smaller and specific target image. Hence, the wide target image partly can be the
reason making Essance being blurred among their competitors.
After analyzing the result from customer interviews as well as validating it again through
in-depth interviews with internal employees (Marketing manager, Marketing team members,
Sales manager…), the research found out that there are four main root causes that affect the


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customers’ perception about Essance and lead to the wrong execution of brand positioning at the
end. They are:
Company strategy & Limited budget. From the customer feedback above, it showed
that the Company strategy & Limited budget is the reason for a number of following problems:

Lack of brand activities

Inappropriate Celebrity
Company strategy &
Limited budget

Unattractive Promotion
No business in Modern
trade channel

According to LG strategy, Mainstream segment (where Essance is the key brand) is not
the focus of business. Instead of, they are focus on Super premium & Premium segments. This
strategy is the result coming from the decision process of LG Vina (Vietnam) and their parent
company, LG Corporation (Korea). It is, therefore, quite hard to change the investment budget
for Essance on Marketing activities.
Ineffective activities planning. Essance is using a Celebrity who is most famous in
business than entertainment which made young target customer hardly realize her and link the
brand as well. Besides, the cut-down business in Modern trade channel, the outdated packaging
which rarely changes since the brand first launched many years ago as well as degraded visuals


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at Points of Sales (POP) both leave a concern that problems happens in the ineffective activities
planning of Essance marketers.

Inappropriate Celebrity

Ineffective activities
planning

No business in Modern trade
channel

Outdated packaging

Degraded visual merchandising

It is supposed that with the same budget for hiring Helen Tong, Essance can choose
another face that is more famous and relevant to target customers, such as Chi Pu, Quynh Anh
Shyn…
Quynh Anh
Celebrity

Chi Pu

Kha Ngan

Helen Tong

1,250,000,000

850,000,000

900,000,000

Shyn
Represent
950,000,000
contract - 1 year

Table 1.2: Pricing comparison Celebrity
Source: Outsource information
Moreover, with the potential growth and high density of young target customers in Modern

trade channel (Image 1.7 above), the decision to stop business here is regarded as a risky choice.
Finally, the function of Product development which belongs to Marketing Department does not


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seem work well. The packaging (patterns, colors…) hardly change over years to adapt to the
trend of the market, which is truly important in Cosmetic industry, where everything must keep
up the trend. On the other hand, the old and unattractive packaging of Essance products may
come from the fact that Essance is having a wide range of USP, which made them cannot have a
clear & specific target image to create appropriate packaging based on that.
Lack of qualified brand in charge person. This issue is proven as the third vital cause
to many issues. According to Marketing Department structure in LG Vina, Marketing Manager
(Mr. Ngan) is in-charged of three segments (Super premium, Premium & Mainstream) and cum
the Brand Manager position of Essance, the core brand in Mainstream. Besides, he is also the
General Manager of the whole LG Vina who takes care of company problems outside the
marketing department. Supporting him for brand activities of Essance is one brand executive
who just graduated from University. With that human resources structure, it creates a concern
that the Marketing manager is being overload. Indeed, when being asked about the approval
process of marketing projects, three of four marketing team members shared that it usually takes
a while for their proposal to be approved by their head, Marketing Manager and this regularly
affects the timing of their work; in other words, it usually delays their works and leaves negative
results.

Lack of brand activities
Lack of qualifiedbrand in charge person
Low Facebook interaction

Besides, in term of brand’s key elements (vision, mission, strategies), there is evidence to
say that Essance hardly has those strategies. When being asked about those elements, the

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Marketing Manager could not point out clear vision, mission or objectives of the brand in the
year 2016. Moreover, based on sales departments (Mr. Phu, Sales Manager), the most vital
department cooperating with Marketing in creating sales, these information have never been
shared in important meetings of the brand for sales force to co-work in meeting the target.
Therefore, it is obvious that Essance need a Brand manager who is supposed to have total
responsibility on this brand only. He or she will be expected to guide the brand goes with the
right direction (6), create more Marketing activities to enhance the interaction with customers,
and rationally assign task to MKT Essance team members, to make sure potential tools/channels
(ex: Facebook) are taken care well.
Wide target image. The in-depth interviews with target customers above shows that they
cannot recognize Essance among cosmetics brands on the market (they thought Essance is a
brand for the middle-age women, not for their range). Instead of, other competitors (Maybeline,
ZA, POND’S…) are preferred by their own specific USP as Maybeline with sexy & modern,
POND’S with naïve & girly, ZA with professional make up. The response of Mr. Ngan,
Marketing Manager of Essance showed that the problem happens in the wide range of USP in the
image to target of Essance. It is one of the main causes that made Essance being blurred among
their competitors.

Wide target image

Outdated packaging
& unstylish

According to Kutcher (7, p12), USP “is an outstanding feature or benefit that people can
associate or identify with one business and this business alone”. Similarly, Smith (8) stated that it
is important for a company to providing a product or service that nobody else can offer. The USP