LV Thạc sỹ_The target market of Kitchen Art Vietnam company limited

1

ABSTRACT
Food industry is one of the newest industries in Vietnam, with a population
of over 88 million, Vietnam’s food industry is becoming more developed and
westernized. Kitchen Art Vietnam Company Limited was born in 2011 with the
purpose of being a Food & Kitchen brand that leads the movement to inspire
everyone to cook and live healthy with a happier experience in the kitchen
everyday. Since then, KITCHEN ART has now become a household name in
Vietnam, widely recognized by in both business and retailed customers.
At the moment, KITCHEN ART has expanded beyond being a “Kitchen
Store”, they have established themselves as a well-known Food & Kitchen brand in
Vietnam. Management of KICTCHEN ART, therefore, has worked closely not only
with its business but also its target market which has a lot of impacts on the
company’s sales. There is no doubt that, with a reasonable target market, you can
define that there is a viable market and that you can beat the competition in the
market for sales. This will help the company’ marketing strategy completed, leading
to the perfect business plan in the future.
Consequently, besides providing KITCHEN ART’ concrete information in
term of business and financial performance, this report aims to analyze the
segmentations of the market which Kitchen Art Vietnam Company Limited target,
dissect how KITCHEN ART uses the marketing mix (4P) in their target market in
the first half year of 2013 and propose some recommendations for KITCHEN ART
to develop their target market within scope of my knowledge.
I am so grateful to Kitchen Art for providing me the great chance to do my
internship there, special thanks to Ms. .. - General Director of KITCHEN ART - my
direct guide. I also want to express my thorough gratitude to PhD. Nguyen Thanh
Hieu who enthusiastically helped me with my research in term of both technical
knowledge and experiences. Finally, I am very thankful to my classmates in
Advanced Educational Program Class 51B because of their support during my
internship period.

2

ABBRIVIATION
KITCHEN ART

Kitchen Art Vietnam Company Limited

VND

Vietnam dong

USD

US Dollar

B2C

Business to customer

B2B

Business to business

F&B

Food & Beverage

US

The United States

EBITDA

Earnings Before Interest, Taxes,
Depreciation and Amortization


3

TABLE OF CONTENT
ABSTRACT.............................................................................................................1
ABBRIVIATION.....................................................................................................2
TABLE OF CONTENT...........................................................................................3
2.2 Market Segmentation......................................................................................14
REFERENCES......................................................................................................29
APPENDIX............................................................................................................30

LIST OF TABLE
ABSTRACT.............................................................................................................1
ABBRIVIATION.....................................................................................................2
TABLE OF CONTENT...........................................................................................3
2.2 Market Segmentation......................................................................................14
REFERENCES......................................................................................................29
APPENDIX............................................................................................................30


4

5

LIST OF FIGURE

ABSTRACT.............................................................................................................1
ABBRIVIATION.....................................................................................................2
TABLE OF CONTENT...........................................................................................3
2.2 Market Segmentation......................................................................................14
REFERENCES......................................................................................................29
APPENDIX............................................................................................................30


6

CHAPTER 1: OVERVIEW OF THE COMPANY
1.1 Introduction
Official name: Kitchen Art Vietnam Company Limited
Abbreviated name: KITCHEN ART
Head quarter: No. 38 Quang An Street, Tay Ho District, Hanoi
Phone: 04 - 6 880 2771
Fax: 04 - 3 718 6580
Website: www.kitchenart.vn

Figure 1.1: LOGO of Kitchen Art
(Source: KITCHEN ART’s website)

1.2 History establishment and development
KITCHEN ART was founded by two women, Ms. Dao Chi Anh and Ms.
Dang Huong Giang, who felt there should be a place in Vietnam that kitchen and

food lovers can call their "home". Chi Anh has been an avid food blogger at “Door
to my kitchen” (featured as one of best Hanoi blogs of 2011 by The Word Hanoi


7

magazine), who with that blog, found her true calling and destiny with food. She
cooked and journalized her way through recipes from cookbooks, food blogs and
cooking shows, and soon realized that the one thing that would make her happy is to
cook, write, and talk about food. She set off to pursue her food dream and found
many people who were supportive of her passion in Vietnam, from blog readers,
social media users, to magazine editors and producers. Among them was Huong
Giang, a like-minded old friend from University, who was already dealing with
many restaurants and hotels for their kitchen and tableware needs. Very quickly, Chi
Anh & Huong Giang found a common purpose and founded Kitchen Art Vietnam
Company Limited in November 25th 2011 to make their kitchen dream come
true. KITCHEN ART has become Sia Huat’s authorized distributor in Vietnam,
carrying many international branches (Sia Huat is Southeast Asia’s leading agent
and direct distributor for an extensive range of foodservice products and
equipment).
Over one year of operations, KICTCHEN ART has become a popular
destination for both expats and locals to find anything related to cooking, baking
and food serving. They have a regular sales from retail and B2B (restaurants,
hotels…). They have established themselves as a leading Food & Kitchen website
in Vietnam with 50000 visits a month, and a fast-growing social media following of
nearly 20,000 fans on Facebook.
Furthermore, KITCHEN ART has been known one of the best in Vietnam
suppliers for kitchenware, tableware, bakeware, buffetware and barware for
restaurants, hotels, cafes, bars and households. They carry over 40,000 imported
products which could certainly meet your needs and expectations. Having with their

years of experience, being preffered suppliers for most of the five star hotels include
Sofitel Legend Metropole Hanoi, Sofitel Plaza Hanoi, Hanoi Intercontinental,
Hilton, Eastern and Easy Hotel, Hoi An Beach Resort, Lifestyle Resort Danang…


8

The KITCHEN ART Retail store and Cooking Studio have been featured on
many local magazines (Mon Ngon Viet Nam, Bep Gia Dinh, The Word Hanoi,
Sketch Japanese Magazine, East & West Traveller) and even on National Television.
Besides, in early February 2013, KITCHEN ART has launched their first Emagazine, which was a big hit of the food media industry in Vietnam.
Recently, KITCHEN ART has become the official kitchenware partner of
Master Chef Vietnam. Just like any other international versions of Master Chef,
Master Chef Vietnam is a reality television program about cooking for everyone,
regardless of profession, age or gender. Everyone will have a chance to pursue their
dream of becoming a professional chef. KITCHEN ART truly identifies itself with
this purpose and passion of all the contestants for food and cooking, hence they
decided to embark on this journey together with Master Chef Vietnam as the official
Kitchenware Partner.
Especially, KITCHEN ART’s General Director Dao Chi Anh and Creative
Director Nguyen Hoang Anh have won a cookbook publishing deal with Page One
Publishing, a Singapore-based publisher with large international distribution
network and strong book retail chain in South East Asia. This book is written in
both English (overseas market) and Vietnamese (Vietnam market), will be published
in June 2013.


9

1.3 Organization structure

CEO

FINANCIAL
AND
ACCOUNTING
DEPARTMENT

HUMAN
RESOURCE
DEPARTMENT

MARKETING
DEPARTMENT

CREATIVE
PRODUCTION
DEPARTMENT

SALES
DEPARTMENT

B2C

B2B

Figure 1.2: KITCHEN ART’s organizational structure.
(Source: KITCHEN ART’s website)

1.3.1 Financial and accounting department

Financial and accounting department is responsible for organize accounting
on business and sales activities of the company in accordance with state law of
accounts and statistics. In addition, it sums up the results of business management,
making reports on accounting and statistics, analyzing the company’s business and
sales activities for setting up controls for the implementation of its plan. Last but
not least, this department coordinating with Sales Department helps General
Director in giving business plans, checking plan achievements and financial
finalization of its affiliated units in fixed time terms.


10

1.3.2 Human resource department
The human resource department deals with management of people within
organization. Firstly, this department is responsible for hiring members of staff. In
addition, this department also clarifies and sets day to day goals organization. It is
responsible for organization of people in KITCHEN ART and plans for future
ventures, objectives involving people in the company.

1.3.3 Marketing department
The marketing department is responsible for creating meaningful messages
through words, ideas, images, and names that deliver upon the promises / benefits
an organization wishes to make with its customers. Furthermore, the marketing
department also helps to ensure that messages, images are delivered consistently, by
every member of KITCHEN ART and work closely with other departments.

1.3.4 Sales department
The main function of sales department is to attract and retain customers.
Moreover, sales department helps marketing department in meeting sales volume
fore casted and analyzing demands of the market. They study the consumer’s

psychology, market fluctuations, prepare sales budget and explore new target
market… At KITCHEN ART, they have B2C and B2B sales. B2C is everyday sales
to retail customers of KICTHEN ART Store. On the other hands, B2B is KITCHEN
ART’s business with professional corporate like restaurants, hotels, café, resorts…

1.3.5 Creative production department
At KITCHEN ART, they carefully test and select recipes and showcase the
exciting beauty of various cuisines, together with cooking techniques of varying
difficulty level to share on their website and videos on YouTube. So, the creative
production department is responsible for the content of the websites and all of
KITCHEN ART’s publications. This department also works with marketing
department to promote and develop the company’s branding.
1.4 Business fields


11

With the company’s vision “To be a Food & Kitchen brand that leads the
movement to inspire everyone to cook and live healthy with a happier experience in
the kitchen everyday”, KITCHEN ART are now following three main business
units:
First of all, kitchenware unit is their core business. This includes both B2B
and B2C customers. They focus on delivering high quality kitchenware products to
our customers.
Secondly, the company also concentrates on cooking classes fields. They
conduct cooking classes at their own kitchen studio. Their classes are of the best
quality offered in Vietnam and always fully booked. They offer varieties of baking
and Western style cooking classes, taught by popular instructors who have a big
following of their own.
Thirdly, they take their attention on professional food consulting services.

This segment provides consulting services for commercial business and publishing
house. They provide recipe development, food photography and styling services to
their clients.


12

CHAPTER 2: THE TARGET MARKET OF KITCHEN ART
VIETNAM COMPANY LIMITED
2.1 SWOT analysis
Strengths: KITCHEN ART is the first full-fledged kitchen store in Vietnam
which provides a wide-range of high quality kitchenware. They have a strong
vertically integrated business model, from kitchenware supply, cooking classes to
food media - which supports each other. In addition, KITCHEN ART has an
unrivaled marketing capability. They receive well-followed Facebook fanpage and
Youtube cooking channel, together with a strong creative team who are famous
bloggers well connected with mainstream media through magazines, television…
and hold an exclusive kitchenware sponsorship position to popular Master Chef
Vietnam TV show which is aired from March 2013 till July 2014. Furthermore, in
their market, they get strong loyalty resulted from aligned interest with customers.
This comes from their sustainable vision which is to bring better cooking and eating
quality to the community, effectively communicated through their media channels.
There is a fact that Vietnamese consumers, particularly the young and affluent, are
interested in brands. Accordingly, renowned Western products backed by
investment in marketing and promotions tend to have highly successful launches.
Kitchen Art is viewed by consumers as a “Western” brand and generally responds
well to Kitchen Art activities and promotions. Besides, in B2B field, KITCHEN
ART is well supported by management’s wide network with hotels and restaurants.
Finally, the most important thing led to their strength is about human. They have a
capable, dynamic and passionate management team that is relevant to modern food

consumption trend.
Weaknesses: KITCHEN ART is still limited by retail space (they have only
one flagship store in Hanoi), pricing and products offered by main supplier in


13

Singapore. Moreover, the company is lacked of affordable product ranges which can
compete effectively with IKEA-product range in the industry.
Opportunities: There are many opportunities for the company ahead. Firstly,
kitchenware is still an extremely untapped market in Vietnam with very few players
which are lacked of domestic brands in quality kitchenware, multinational
kitchenware while their competitors are more focused on B2B than B2C. Secondly,
there will be a growing trend in baking and Western style cooking in Vietnam, due
to influx of expats and mainstream media (Master Chef, Iron Chef…). Thirdly, a
rising online shopping trend which is now happening in Vietnam will support their
coming online shop. In addition, Vietnamese consumers are experiencing a growing
awareness of hygiene concerns and food origin as their living standards improve
and as numerous health scares are frequently alerted in the media. City workers are
also increasingly cutting back on restaurant meals due to unemployment, salary cuts
and higher living expenses. As a result, this will further encourage consumers to
cook at home and subsequently invest in kitchenware. Eventually, supermarket
chains are thriving, South Korean MGR player E-Mart recently reached an
agreement with U&I Investment Corporation to establish a joint venture in Vietnam
with an aim of setting up retail stores in the country. Similarly, Singapore MGR
operator NTUC Fair Price and Vietnam’s Saigon Union of Trading Co-operatives
are looking to establish a chain of hypermarkets in Vietnam through their local joint
venture. This will be strong potential distribution channels for KITCHEN ART
products in future.
Threats: On the other hands, a lot of threats need to be faced. In Vietnam, the

government’s lack of support for importing businesses as priority is given to
growing Vietnam’s export business and they offer high import duty imposed on
homeware (25% - 30%). In addition, companies in this market will get a rise in
operating costs (VND depreciation, import tax, rising petrol costs, high inflation)
which will threaten retailer profit margins. Price increases have to date been passed


14

on to shoppers, but this cannot continue indefinitely in the price-conscious market.
And together with economic crisis, there will be a lower growth in GDP (5-6%)
compared to the previous years dampened consumer spending in 2012-2013.
Moreover, recent surge in bankruptcies led to an increase in the unemployment rate.
This in turn is likely to result in a slowdown in private consumption growth and
households will continue to cut back on spending.

2.2 Market Segmentation
KITCHEN ART aims to focus on two key market segments: home cooks
and professional chefs, cafe/restaurant owners, which are also known as B2C and
B2B customers.
In B2C range, the company has great impacts on young customers and
expats. Because of the wonderful location (KITCHEN ART is on Xuan Dieu Street,
Tay Ho District, Hanoi), KITCHEN ART is an attractive destination for many
foreigners who live nearby. They come to Vietnam for working, especially in
embassies and international organizations so they have been sponsored all the living
fees. Therefore, they spend much money on export brand’s kitchenware that made
them feel like home. Besides, young customers are increasingly willing to pay a
premium for trusted brands, especially for products that directly affect health
quality, including cookware, kitchenware.
In B2B field, KITCHEN ART has now been partners with many top hotels

and restaurants which are called their potential market. Furthermore, KITCHEN
ART also aims to be a long-term partner to various players in the food service
industry for their extensive product supply and dedicated service.

With the

advantages of Sia Huat’s authorized distributor in Vietnam, carrying up to 40,000
international products, KITCHEN ART is confident to be a strong leader in bringing
the Vietnamese food service industry to International standards.


15

2.3 The target market of KITCHEN ART
2.3.1 The target market from 2011-2012: A brief review
KITCHEN ART has focused on three main target markets in the next 3
years: B2C (retail sales and cooking classes), B2B (commercial food service and
catering), Food Media (Publications, TV Channels).
In fact, both B2C and B2B were showing trend of growing as with higher
income people are more willing to spend on F&B related services and adopt
cooking/baking as a trendy lifestyle. However, B2C was growing at a faster rate due
to the fast-emerging trend of modern and western cooking, while B2B market was
facing limitations from economy downturn in Vietnam that delayed investments and
corporate budget spending. From 2011-2012, KITCHEN ART’s ratio of sales to
B2C and B2B was 3:1.
Another market which KITCHEN ART jumped in was food media. Food
media is a completely new industry in Vietnam with no full-fledged service
provider in terms of food media production (commercial print & video, food
photography, recipe development, food styling…). After executing food media for
KITCHEN ART’s own publicity and media, they realized that there have been many

inquiries from TV Channels, restaurants, food brands and magazines for KITCHEN
ART to produce food related content. Publishers are also interested to work with
KITCHEN ART to produce cookbooks in Vietnam, which is a very new market as
well. Due to the novelty of this market in Vietnam, the total market size of food
media is still unknown, but will carry high potential due to lack of competitors in
the market.
In term of the target market from 2011-2012, KITCHEN ART had used the
marketing mix as the standard theory to achieve their target market. Through this
marketing analysis, we could figure out which KITCHEN ART had gained and
which had not in 2011-2012.


16

Being considered as “expensive” by market due to high costs in importing
quality products, I think KITCHEN ART should work closely with Logistics service
to bring down the cost of future imports through optimization methods practiced in
the industry. In the other hands, they should consider to process bulk orders by Sea
once in 2 months in order to have lower logistics cost per item, rather than ordering
frequent small orders. If they can solve this problem, the product’s price will be less
expensive so they can attract more market like young people with high enthusiasm
in food but having low income.
About the products which KITCHEN ART providing, they are really a huge
amount but just from one distributor. In the upcoming year, the company should
find some other distributors from other countries to bring more and more
international brand to customers. In reality, KITCHEN ART has recently made
contract with Cuispro and Norpro - two American kitchenware brands, we can call
this an effective action of the company.
In 2011-2012, KITCHEN ART has offered some festive promotions
(Woman’s day promotion, Children’s day promotion…) to thank beloved customers

for being fond of the company. To improve more customers’ experience and build a
stronger awareness in choosing cooking as an exciting lifestyle, more promotions
need to be introduced such as Big Sale on Christmas and New Year, Teacher’s day
promotion or one day special sale…
KITCHEN ART has only one store on Xuan Dieu Street, Hanoi and some
customers have made complains about the far area. Although they have found that it
difficult to have a location in Hanoi’s center but with one year since opening and a
large amount of customers, the company still need to consider to open the second
retailed store. It will help to attract more customers from other areas of the city.

2.3.2 Developing the company’s target market in 2013


17

Based on KITCHEN ART’s in-house research and forecast, we estimate
Vietnam’s market demand for kitchenware (excluding cutlery) of USD29.5 million
while market for cutlery is at about USD13 million. The market size for households
is estimated at USD201 million, of which cookware accounts for 56%.

Figure 2.1: Vietnam market
(Source: KITCHEN ART’s 2013 business plan)

It is proved that Vietnam’s commercial potential remains positive, despite
the slow growth in 2012 thanks to the country’s favorable demographic profile, with
only 30- second accounting for half of total population, and the immaturity of food,
drink and mass grocery retail sectors. Added to that, urban consumers in particular
are increasingly receptive to marketing and promotional initiatives, with
premiumisation thus expected to remain one of the key drivers of consumer
spending. In addition, after one and a half years operation and testing the market,

KITCHEN ART in general receives very positive outcomes from marketing
activities across KITCHEN ART communication channels (Offline & Online).
While other industries are suffering in sales, KITCHEN ART sales are growing each
month, proving a gap in the kitchenware market in Vietnam. Due to these highly


18

competitive opportunities and the fact of target market from 2011-2012, KITCHEN
ART decided to develop their target market from early 2013.
In B2C and B2B field, they are building up an Online Store to bring their
products to more customers nationwide. This Store is to serve both B2C and B2B
customers, and even overseas customers. Apart from products by their main supplier
in Singapore, this Online Store will feature other products by Online Merchandisers
in USA, Canada and Australia…that they partner to distribute throughout Vietnam.
These will be cheap, unique, stylish products for tableware, kitchenware and
accessories for table/kitchen decoration that is not available in Vietnam. Along with
the Online Store, KITCHEN ART is currently talking with Parkson to discuss the
possibility of distributing our kitchenware products through Parkson’eight
department stores across Vietnam (Parkson is the country’s market leader in term of
retail department stores).
In food media field, while continuing to produce regular Food & Kitchen
related content for Kitchen Art Website, they have started working on launching
Kitchen Art E-Magazine semi-annually. This e-magazine will feature existing
content from their website, in addition to original content developed for the
magazine. They also involved freelance writers to contribute content for the
magazine, making it an exciting platform for talented Food Writers or Bloggers to
showcase their work. Furthermore, the E-magazine will be free and downloadable
for the public, while they fund the magazine production cost through advertising. So
far, leading food brands like Mc Cormick and Barilla are already keen on

advertising in their E-magazine, as they want to tap on their large base of readers
and fans. This free, high-quality E-magazine model is a successful model in the
West, and will become popular in Vietnam with the many tablet PC or iPads owned
in Vietnam. Successful independent Food & Kitchen E-magagazine publishers
include Sweet Paul (US), Artisan (Australia), Spoon (US), to name a few.
KITCHEN ART is ready to launch the first Food E-magazine in Vietnam, serving a


19

large group of customer base who are “hungry” for high quality food content in
Vietnam.

2.4 Discussion
Within scope of this thesis, I mainly focus on analyzing how KITCHEN ART
applied the marketing mix to develop their two target markets (B2B and B2C field)
in the first half year of 2013 and whether KITCHEN ART achieved their goals or
not.
Product: In terms of product segments, they have seen strong growth across
current segments. Therefore, KITCHEN ART has started distributing appliances to
the market (mainly food preparation appliances) from early 2013. KITCHEN ART
has recently made contract with 4 famous American kitchenware brands, they are
Cuispro, Cuisinart, Norpro and Wilton to become their authorized distributor in
Vietnam. It means that many ranges of products from kitchenware to bakeware are
officially supplied and due to higher dollar value term per each unit, this segment
will increasingly become bigger component in the merchandising business. The first
international brand accepted KITCHEN ART as their authorized distributor in
Vietnam is Cuisipro. Cuisipro is a division of Browne & Co., a leading supplier of
quality gourmet kitchen products based in Markham, Ontario Canada. Under the
Cuisipro brand, they research, design, manufacture and distribute a line of kitchen

tools. Their in-house designers investigate and source a combination of materials to
create a unique fusion of innovation, beauty and functionality in collection of
kitchen tools. Combining high-quality materials with functional design, Cuisipro
has managed to create durable and beautiful products, which are essential to any
kitchens. From March 2013, Cuisipro top quality products are officially sold at
KITCHEN ART with very competitive price. The other brands such as Cuisinart,
Norpro and Wilton are now ready to sell at KITCHEN ART by June 2013.


20

On the other hands, they decided to cut down the ingredient product ranges
in their retail store in Xuan Dieu Street, Hanoi. Based on their sales monthly report,
ingredient currently contributes about 10-15% to their top line and contribution will
gradually decrease as other part grows at faster pace. Another reason is that they
only carry this product range in their existing Xuan Dieu store to support their
cooking classes, the growth from this segment is therefore only about 20-30%,
much lower than others.

Figure 2.2: KITCHEN ART merchandising breakdown by product segments
(Source: KITCHEN ART’s 2012 business plan)

Price: Being considered as “expensive” by market in the first year,
KITCHEN ART took into a lot of considerations to find out the best solution for
their pricing strategy. In Vietnam, the kitchenware market is highly segmented and
there is wide availability of cheap options through China-directly imported goods,
and Ikea-product range. But there are lack of quality branded kitchenware suppliers
in the market while the customers are increasingly willing to pay a premium for
trusted brands, especially for products that directly affect health quality, including
cookware, kitchenware. As such, they price their goods towards the premium end

(higher prices compared to “Ikea” product range). However, in order to tap into the


21

medium income class, they make sure their products are not priced higher than
competitors’ prices of the same product quality range (becoming authorized
distributors for international brands means that they are offered the wholesale
price).
Looking at it the other way, they tried to process bulk orders by sea once in
2 months in order to have lower logistics cost per item, rather than ordering frequent
small orders. Once the problem is solved, the product’s price will be less expensive
so they can attract more market like young people with high enthusiasm in food but
having low income.
Finally, they also target to keep their EBITDA margin at 10-15% range and
adapt their product prices accordingly.
Promotion: In 2011 and 2012, KITCHEN ART has offered some festive
promotions (Woman’s day promotion, Children’s day promotion, Teacher’s day…)
to thank beloved customers for being fond of the company. From the Junior Chef
promotion for Children’s day, they proved that cooking and baking was now not
only a grown-up’s hobby, but a recreational and bonding activity for both parents
and children as well. In this promotion, they have carefully chosen products that are
safe and enjoyable to use, and also serve as a colorful addition to every Kitchen,
making it a more exciting place for kids to get creative and involved in the art of
cooking. Overall, in 2012, the most successful event of KITCHEN ART was their
Teacher’s day promotion which brought customers their homemade “Teacher's Day
Gift Hamper” with affordable price and well-designed. They announced this event
one week before the Teacher’s day and “All the gift hampers were quickly sold
within 3 days” said KITCHEN ART’s shop supervisor.

Teacher's Day Gift Hamper


22

Rice and soup bowl set


Set of 6 rice bowl (115x53mm,

Teapot and teacups set


Set of 4 teacups

250cc) and 6 soup bowl

(203x145x103mm), 4 tea plates

(75x58x55mm, 75cc).

(151x22mm), 1 teapot
(203x145x103mm, 950cc)



Brand: Cerabon Essentials
(Singapore).



Brand: Cerabon Essentials
(Singapore)



Inclusive: hamper, lining,
greeting card, dried flowers.



Inclusive: hamper, lining, greeting
card, dried flowers

Total: 474.000 VND
Total: 519.000 VND
Table 2.1: KITCHEN ART Teacher’s Day Gift Hamper
(Source: KITCHEN ART’s shareholder report 2012)

From January 2013, to improve more customers’ experience and build a
stronger awareness in choosing cooking as an exciting lifestyle, more promotions
are introduced this year such as KITCHEN ART’s annual sale, 7% discount for
bicycling customers, reward card… KITCHEN ART prepared to start the new
campaign for accustomed customers. After each time of purchase, Kitchenholics
(KITCHEN ART’s beloved customers) will receive “shopping point” which is
exchangeable to direct redemption in the next purchase when they have enough.
This campaign would be hopefully a big thank to their Kitchenholics for supporting
them without condition. In addition, KITCHEN ART also served their first Emagazine as an additional platform to promote their products and communication
channels (Web, Video, Facebook), not only through advertising, but also through
subtle product placement and mentions in their articles.

23

Distribution (place): KITCHEN ART has only one retailed store on Xuan
Dieu Street, Hanoi and some customers have made complains about the far area.
Although they have found that it difficult to have a location in Hanoi’s center but
with one year since opening and a large amount of customers, the company still
consider to open the second retailed store. It will help to attract more customers
from other areas of the city. To solve this issue, KITCHEN ART is targeting to open
2 stores with Parkson towards end of 2013 to expand our distribution to Ho Chi
Minh City, and plan to add 2 stores each year thereafter. They believe that they like
the model in which Parkson will share their risk as the rent is based on percentage
of sale - and therefore the company will focus on pushing their sale effectively.
Although they targeted to expand and open the second retail store, KITCHEN
ART’s main strategy of 2013 to develop their distribution channel is launching the
online store, which will be available by the end of May. An online store with both
B2C and B2B products will ship nationwide, with strong product coverage that
matches the likes of Crate & Barrel or William Sonoma in the US. KITCHEN ART
believed that with their Food Web Content gearing towards cross-promoting their
products, the Web Portal (www.kitchenart.vn) will be a good complementing
website to the Online Store, with cross linking of products related to Recipes
featured. This is new and welcoming style of marketing as users are moving away
from direct advertising and are more easily influenced to use new products that are
featured in a recipe. KITCHEN ART also conceived that together with the Online
Store, they are able to receive more B2B inquiries nationwide, as there is no Online
Store serving the Commercial Food Service industry in Vietnam, while there are
many hundreds of Restaurants in Hanoi or HCM city alone. As launching the
Online Store, this sales channel also expects decent growth of over 50% per annum,
supported by rising trend of online shopping in Vietnam and their potential

cooperation with a leading online commercial distribution chains.


24

Figure 2.3: Merchandising sale breakdown by distribution channels
(Source: KITCHEN ART’s 2012 business plan)
Sales

Table 2.2: KITCHEN ART’s growth analysis: Sales by channel (in USD) from 2012-2015
(Source: KITCHEN ART’s 2012 business plan)


25

CHAPTER 3: RECOMMENDATION
KITCHEN ART is well-known as a multi-segmented food and kitchenware
business, providing the ability of producing its own Food Media (Photography,
Video) that matches industrial standard, serving advertising/marketing needs by
clients in the Food & Beverage industry. Despite their widely recognized in both
business and retail customers, after my internship in the company, I have made two
findings and recommendations which are indicative that KITCHEN ART is clearly
capable of achieving their target market using this method.
Firstly, it is actually a challenge for a young company like KITCHEN ART
to attract and retain capable staff. They are having a dedicated team but the level of
experience of some staff is still low, leading to high risk mistakes and more time to
be spent supervising their work. After my internship, I found that lack of human
resource was the main reason led to KITCHEN ART’s delay on launching the
Online Store (which was planned to establish at the end of 2012). Therefore, finding
and keeping the right person should be the top priority for the company. They had

better continue to motivate and train existing staffs to retain long term. I believe that
good attitude is the key, as skills and experience can be learnt with time. This action
also support in developing B2B business. In B2B, they need to have a mature Sales
person with experience in dealing with Food & Beverage or Hospitality industry
while their current B2B team is young, inexperienced but dedicated. If they find it
hard to afford their requirements, they will have to accept training the staffs from
ground zero, which will be shaped to their culture easily. As a result, this core team
will be in charge of growing existing database of loyal customers from store to B2B
customer database of Hotel chefs, Restaurant owners and maintain relationship with
customers through newsletter program for Product information, Sales or Promotions
related events.