Reference Report Pricing strategy - Tài liệu tham khảo | Đại học Hoa Sen

MINISTRY OF EDUCATION & TRAINING HOA SEN UNIVERSITY SUBJECT PRICING STRATEGY FINAL REPORT Topic: COCOON’S PRICING STRATEGY June /2023
MINISTRY OF EDUCATION & TRAINING HOA SEN UNIVERSITY SUBJECT PRICING STRATEGY FINAL REPORT Topic:
COCOON’S PRICING STRATEGY Class DM21111 Semester 2233 Instructor Nghiêm Tấn Phong Group student
1. Trần Thanh Thảo 22117463 2. Trương Thanh Vy 22103761
3. Phạm Lê Kim Hiền 22116820
4. Trần Nguyễn Thảo Nhi 22011451
5. Hoàng Tâm Hương Nhu 22300007 TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................... 1
PICTURES .......................................................................................................................... 2
PREFACE ............................................................................... Error! Bookmark not defined.
WORK EVALUATING ...................................................................................................... 4
CHAPTER 1: OVERVIEW OF THE BUSINESS AND PRODUCT ............................... 1
1.1. Introduction to Nature Story Co., Ltd. ..................................................................... 1
1.2. Cocoon Cosmetics Brand ........................................................................................ 1
1.3. Cocoon Exfoliating Products ................................................................................... 3
CHAPTER 2: MARKET ANALYSIS ................................................................................ 6
2.1. Overview of the Vegan Cosmetics Market .................................................................. 6
2.1.1. Overview of the Natural Cosmetics Market in Vietnam
(bổ sung) ..... Error!
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2.1.2. Overview of the Vegan Cosmetics Market in Vietnam .......................................... 6
2.2. Analysis of Cocoon's STP Strategy ............................................................................. 7
2.2.1. Segmentation: ...................................................................................................... 7
2.2.2. Targeting ............................................................................................................. 8
2.2.3. Positioning .......................................................................................................... 9
CHAPTER 3: COMPETITOR ANALYSIS AND PRICING OF COMPETITORS ..... 11
3.1 Cocoon’s Competitors ........................................................................................... 11
3.2. Competitors Pricing Research .............................................................................. 12
3.3. Factor that can impact the price: Packaging ........................................................ 12
3.4. Cocoon's positioning compared to competitors ..................................................... 15
CHAPTER 4: COST STRUCTURE AND PRODUCT PRICING ................................. 16
4.1 Cost Structure Analysis .......................................................................................... 16
4.2 Choose a pricing method ...................................................................................... 17
CHAPTER 5: PRICING STRATEGY ............................................................................. 20
5.1. Pricing Strategy of Cocoon ................................................................................. 20
5.2 Proposal of a new pricing strategy for Cocoon ...................................................... 26 Pricing Strategy Page | 1
5.2.2 Charm Pricing .................................................................................................... 26 PICTURES
Image 1: Logo of Nature Story company .................................................................. 1
Image 3 Cocoon’s logo ............................................................................................... 1
Image 4 Cocoon’s products ........................................................................................ 2
Image 5 Dak Lak coffee body scrub 200ml ................................................................. 3
Image 6 Dak Lak coffee body scrub 600ml ................................................................. 3
Image 7 Dak Lak coffee scrub for face ........................................................................ 4
Image 8 Dak Lak coffee scrub for face ........................................................................ 5
Image 9 Natural Cosmetics in Vietnam by Statistic ..................................................... 9
Image 10 List of products ......................................................................................... 12
Image 11 Cocoon’s Scrub ......................................................................................... 13
Image 12 The Body Shop's Scrub .............................................................................. 13
Image 13 Milaganic's Scrub ..................................................................................... 14
Image 14 Dove's product .......................................................................................... 14
Image 15 Detailed list of fixed costs ......................................................................... 17
Image 16 Detailed list of fixed employee salaries ..................................................... 17
Image 17 Total processing cost................................................................................. 18
Image 18 Total processing cost ................................................................................. 18
Image 19 Facial care combos on Cocoon’s website .................................................. 20
Image 20 Facial care combos on Cocoon’s website .................................................. 21
Image 21 Hair care combos on Cocoon’s website .................................................... 21
Image 22 Cocoon’s 6.6 super sale program .............................................................. 22
Image 23 Cocoon's products buy 1 get 1 ................................................................... 22
Image 24 Cocoon's combo discounted Combo .......................................................... 23
Image 25 Cocoon's biggest product size ................................................................... 24
Image 26 Cocoon's memberships .............................................................................. 25
Image 27 Current pricing of the Cocoon Body Exfoliation Product ...................................26 Pricing Strategy Page | 2 ACKNOWLEDGEMENTS
First of all, I would like to express my sincere gratitude to the esteemed professors of the
Faculty of Business Administration at Hoa Sen University for their dedicated preparation of
lectures and materials. Additionally, I want to convey my deep appreciation to Mr. Nghiem
Tan Phong for his invaluable support and guidance throughout the learning process of the Pricing Strategy course.
Thanks to learning Pricing Strategy, I have gained valuable insights into how the price of a
product is shaped, how it markets pricing strategies, and real-life case studies that have
deepened my understanding of pricing techniques and strategies.
Through teacher guidance, I can equip with practical knowledge and skills that I can carry
forward into my future endeavors. I am grateful for the opportunity to learn from you and for
your dedication to imparting knowledge and fostering our growth. Pricing Strategy Page | 3 WORK EVALUATING Full name Student code Completion level Trần Thanh Thảo 22117463 100% Trương Thanh Vy 22103761 100% Phạm Lê Kim Hiền 22116820 100% Trần Nguyễn Thảo Nhi 22011451 100% Hoàng Tâm Hương Nhu 22300007 100% Pricing Strategy Page | 4
CHAPTER 1: OVERVIEW OF THE BUSINESS AND PRODUCT
1.1. Introduction to Nature Story Co., Ltd.
Nature Story Co., Ltd. is the parent company of Cocoon Vietnam, renowned for producing and
marketing 100% natural and vegan beauty products.
Address: 38C-39C Quarter 1, National Highway 1A, Tan Thoi Hiep Ward, District 12, Ho Chi Minh City, Vietnam Phone number: 0938687897
Image 1: Logo of Nature Story company
1.2. Cocoon Cosmetics Brand
Cocoon means "cocoon", the cocoon is like a "house" to incubate and nurture a small caterpillar
that will one day turn into a beautiful and splendid butterfly. From that meaning, Cocoon is the
"home" to care for the skin and hair of Vietnamese people, helping them become more
beautiful, perfect and shine in their own way. Cocoon's business motto is "Vegan cosmetics - for pure Vietnamese beauty".
The COCOON ORIGINAL VIETNAM prouds that all of our their brand cosmetic and personal
care products are approved under the Cruelty Free International Leaping Bunny programme,
the internationally recognisable gold standard for cruelty free products. s
Image 2 Cocoon’s logo Pricing Strategy Page | 1
Image 3 Cocoon’s products
Mission and Strategic Vision of Cocoon
Mission: Committed to using plant-derived ingredients and providing vegan, free from
animal-derived components. Utilizing eco-friendly packaging and practices to
minimize environmental impact. Moreover, Cocoon aims to operate ethically in all
aspects of their business from sourcing ingredients to manufacturing processes.
Strategic Vision: Cocoon wants to become a leading brand in natural cosmetics
industry by focusing on vegan product and promoting sustainable, ethical, and high-
quality vegan cosmetics. Proudly offers 100% vegan cosmetics made from Vietnamese plants.
1. Using natural ingredients: Cocoon is famous for using natural ingredients taken from
different regions of Vietnam, such as Dak Lak coffee, Moc Chau green tea, Ben Tre coconut
oil, etc. brings good effects to the skin and does not cause irritation.
2. 100% Vegan products: Cocoon commits not to use ingredients derived from animals in its
products, and does not conduct tests on animals. This makes the brand an ideal choice for
vegetarians and those concerned about animal welfare. Pricing Strategy Page | 2
1.3. Cocoon Exfoliating Products
Cocoon offers a wide range of exfoliating products that are 100% vegan and made from natural
Vietnamese ingredients. Some exfoliating products are made from Đak Lak and Tien Giang
depend on their type of products:
For body: The most famous scrub products are definitely: Pure coffee beans of Dak Lak coffee
body scrub. The other type is Tien Giang cocoa butter which help effectively cleanse dead body
skin, even out skin tone, and awaken energy to help skin become soft, smooth and radiant. With
two sizes, the small one is 200ml and the bigger one is 600ml. For 200ml, the price is 125,000 VND and 325.000vnd for 600ml.
Image 4 Dak Lak coffee body scrub 200ml
Image 5 Dak Lak coffee body scrub 600ml Pricing Strategy Page | 3
For Face: There is only one Đak Lak type of scrub for face. Finely ground Dak Lak coffee
beans, rich in caffeine, blend with Tien Giang cocoa butter to help remove old and dull dead
skin cells, awakening a fresh, energetic complexion with a smooth feeling. For 150ml, the price is 165,000 VND.
Image 6 Dak Lak coffee scrub for face
For Lip: Experience the natural exfoliating power of Cocoon Dak Lak Lip Scrub. This 5g lip
scrub is crafted with finely ground Dak Lak coffee beans, the tiny coffee particles blend
seamlessly with macadamia oil and shea butter, gently exfoliating dead skin cells from your
lips, leaving them soft and smooth. Priced at 75,000 VND, it's an affordable and essential
addition to your skincare routine for beautifully revitalized lips. Pricing Strategy Page | 4
Image 7 Dak Lak coffee scrub for face Pricing Strategy Page | 5
CHAPTER 2: MARKET ANALYSIS
2.1. Overview of the Vegan Cosmetics Market
2.1.1 Overview of the Vegan Cosmetics Market in Vietnam
According to Statista, In Vietnam, the revenue in the Natural Cosmetics market is
projected to reach US$59.86m in 2024. It is expected to grow at an annual rate of 3.84%
(CAGR 2024-2028). Vietnam's growing demand for natural cosmetics reflects a shift towards ustainable and eco-friendly beauty products in the country. (Wikipedia,
https://www.statista.com/outlook/cmo/beauty-personal-care/cosmetics/natural-
cosmetics/vietnam. Accessed 9 June 2024) sustainable and eco-friendly beauty products in
country.(Wikipedia,https://www.statista.com/outlook/cmo/beauty-personal-
care/cosmetics/natural-cosmetics/vietnam. Accessed 9 June 2024)
Image 8 Natural Cosmetics in Vietnam by Statistic Pricing Strategy Page | 6
2.1.2 Overview of the Vegan Cosmetics Market in Vietnam
In recent years, vegan cosmetics are becoming increasingly popular in Vietnam. According to
a Nielsen report, Vietnam is one of the fastest growing vegan cosmetics markets in the world,
with an average growth rate of 30% per year. The rise of vegan cosmetics in Vietnam brings
many opportunities for cosmetic businesses.(Nguyet, Anh. “VIETNAM COSMETIC
INDUSTRY MARKET UNTIL 2027 - BEAUTYCARE EXPO.” beautycare expo,12 October 2023)
2.2. Analysis of Cocoon's STP Strategy 2.2.1. Segmentation:
A. Demographic Segmentation:
Age: Cocoon targets young and millennial consumers between the ages of 17 and 35.
Gender: Focus on both male and female but primarily concentrating on female those aged 18 to 30.
Occupation: Appeals mainly to students and office workers.
Income: The target market includes individuals with a minimum income of 2 million VND per month.
Types of Social class: Those in the middle class like office workers, entrepreneurs with stable
incomes can comfortably incorporate Cocoon Vietnam into their skincare routines. In the
lower-income brackets, such as students, young professionals, or those living on fixed
incomes, can allocate a portion of their budget for Cocoon’s products.
With a diverse range of product and price, it can access to different social classes and income
levels, suitable for many in Vietnamese society.
Lifestyle: Cocoon focuses on young female customers with skin issues such as acne, hyper
pigmentation, uneven skin tone, or those who want to maintain their current skin condition.
Cocoon targets individuals who care about beauty, both in terms of personal appearance and environmental sustainability.
B. Psychographic Segmentation
Lifestyle: Individuals who are conscious about personal beauty and environmental sustainability.
They want to buy skincare products that are cheap but still good for themself. Moreover,
because Cocoon is made from Vietnamese product so they want to support. Skin Concerns:
Issues such as hyper pigmentation, uneven skin tone, and maintaining healthy skin. Product-specific:
Natural and Organic Ingredients: Customers interested in using skincare products containing
natural and organic ingredients. Therefore, Cocoon focus on developing product that fit with Pricing Strategy Page | 7
these types of customer group.
Safety and Non-Irritating: Customer who seek skincare products that are safe and non-irritating
ingredients. These types of customer will be the target group of Cocoon as we develop products
with non-irritating ingredients.
Cruelty-Free Technology: Cocoon attracts customers interested in environmental protection
who want to contribute on protecting animals by using not tested products.
C. Behavioral Segmentation:
Purchase frequency: Because Cocoon is a skincare product and scrub is not a everyday product
using. So it is purchased with minimal consideration or decision - making process. Since it's a
scrub designed for exfoliation and typically used only 2-3 times a week, customers won't need
to purchase large quantities, and they may not exhibit strong brand loyalty. This product fits
into their skincare routine as a necessary but infrequent purchase, chosen for its functionality
and effectiveness rather than any emotional attachment.
Marketing efforts: Because scrub is a product that is low-frequency products, just need to use
in short term, Cocoon focuses on marketing it by giving promotions buy 1 get 1 or buy with
other items, discounts, advertising and recommendations from influences.
Buying Habits: Customers looking for effective yet affordable skincare solutions. Cocoon aims
for all Vietnamese people to use their products, hence they offer pricing that is suitable for the
average living standards and income of Vietnamese consumers. 2.2.2. Targeting
According to Statista, In Vietnam, the revenue in the Natural Cosmetics market is
projected to reach US$59.86m in 2024. It is expected to grow at an annual rate of 3.84%
(CAGR 2024-2028). Vietnam's growing demand for natural cosmetics reflects a shift towards ustainable and eco-friendly beauty products in the country. (Wikipedia,
https://www.statista.com/outlook/cmo/beauty-personal-care/cosmetics/natural-
cosmetics/vietnam. Accessed 9 June 2024) sustainable and eco-friendly beauty products in the country. (Wikipedia,
https://www.statista.com/outlook/cmo/beauty-personal-
care/cosmetics/natural-cosmetics/vietnam. Accessed 9 June 2024) Pricing Strategy Page | 8
Image 9 Natural Cosmetics in Vietnam by Statistic
The number of Vietnamese people using natural cosmetics is rising steadily every year.
Targeting cities and regions across Vietnam could include cities like Ho Chi Minh City, Hanoi,
Da Nang, Hue, Binh Duong, Can Tho, Dong Nai, Ba Ria - Vung Tau, Thai Nguyen. Especially
focusing on the two major cities, Ho Chi Minh City and Hanoi with a dense population.
Because people in these two cities often have to communicate and meet many people, the
demand for beauty products is also high.
Leading cosmetics retail distribution systems in central areas such as Hasaki, Guardian,...
Vietnam has a hot and humid climate, and the two major cities have a large population and are
frequently exposed to dust and smoke daily. Therefore, Cocoon’s target customers are mostly
in Hanoi and Ho Chi Minh City.
Focusing on customers in stressful working environments: There are many students and office
workers in these two cities, so the need to care for the skin and keep it clean is a top priority to reduce stress-induced acne.
Targeting people who tend to consume natural products to keep their skin safe and reduce
irritation for sensitive skin. 2.2.3. Positioning
Cocoon Vietnam positions itself as a leading brand in the natural, vegan skincare market with
several points as mention below
Commitment to Natural Ingredients: By using high-quality natural and organic ingredients,
Cocoon ensures safety and effectiveness. Moreover, they offer high-quality products at
affordable prices, making natural skincare accessible to a wider audience. They also Pricing Strategy Page | 9
emphasizes and boost eco-friendly packaging and sustainable sourcing of ingredients resonates
with Eco-conscious consumers and adds to the brand’s appeal.
Value/Believe-Personality: Cocoon believes in the power of nature and sustainability. The
brand is dedicated to offering safe beauty products free from harmful chemicals and made with
high-quality natural ingredients. Cocoon embodies a young, vibrant, and ethical personality,
appealing to consumers who care about health and the environment.
Inspire people: Cocoon encourage people to blend beauty with environmental responsibility.
The brand conveys that personal care can be luxurious and eco-friendly. Cocoon motivates
young consumers to take pride in their natural beauty and make choices that benefit both their skin and the planet.
Reason to Believe: Natural, High-Quality Ingredients: The Đắk Lắk coffee exfoliating scrub is
crafted from 100% pure coffee beans from Đắk Lắk, cocoa butter from Tiền Giang, and
avocado oil extract, providing effective exfoliation and deep moisturization. These ingredients
are carefully sourced to ensure safety and efficacy.
Tailored to Local Needs The product is designed to address common skin issues in Vietnam,
such as acne, dullness, and premature aging due to the hot and humid climate. The formula is
safe for all skin types, offering reassurance to consumers about its suitability and effectiveness.
Commitment to Sustainability: Cocoon uses locally sourced ingredients and sustainable
production practices to minimize environmental impact. The brand is committed to using non-
toxic ingredients and eco-friendly packaging Pricing Strategy Page | 10
CHAPTER 3: COMPETITOR ANALYSIS AND PRICING OF COMPETITORS
3.1 Cocoon’s Competitors
3.1.1. Direct competitors:
Direct competitors of Cocoon include cosmetics brands with similar market objectives and
competing within the same segment. These competitors may include domestic and international
cosmetic brands such as: Organic Shop, Hella, Milaganics, Cỏ mềm, The Body Shop...
In selecting Organic Shop, Hella, Milaganics, Cỏ Mềm, and The Body Shop as direct
competitors for Cocoon's scrub product line, several factors were considered. These brands
align closely with Cocoon in their market objectives, catering to consumers seeking natural,
eco-friendly skincare solutions. They offer competitive product lines that directly rival
Cocoon's offerings, emphasizing similar claims of exfoliation and skin rejuvenation. Moreover,
the brand recognition and reputation of Organic Shop, Hella, Milaganics, Cỏ Mềm, and The
Body Shop pose a significant threat to Cocoon's market position, as they are well-known for
their commitment to organic ingredients, ethical sourcing, and sustainability practices. Overall,
the selection of these brands as direct competitors underscores the intense competition within
the skincare segment and highlights the need for Cocoon to differentiate itself through
innovation, quality, and consumer-centric approaches. Pricing Strategy Page | 11
3.2. Competitors Pricing Research BRAND PRODUCT NAME PRICE VOLUME Core Strength The Organic
Organic Coffee and Sugar 109.000đ 250gr Natural and organic Shop Body Scrub ingredients, eco- friendly, affordable Milaganics Coffee Body Scrub 128.000đ 280gr Organic ingredients, focus on local, sustainable sourcing Cỏ mềm
Coffee Coconut Bath Salt 150.000đ 125gr Herbal ingredients, focus on traditional remedies Cocoon
Coffee from Dak Lak Body 125.000đ 200gr Plant-based and Scrub vegan formulas, cruelty-free Dove Smoothie Scrub Dove 143.000d 298gr Trusted brand, dermatological tested
Image 10 List of products
3.3. Factor that can impact the price: Packaging
Cocoon emphasizes eco-friendly packaging with a natural yet sophisticated and modern design.
The simple yet striking brown color scheme is complemented by elegant labels, and the sturdy
jar provides a reassuring feel when held. Information on ingredients, usage, and benefits is
printed clearly and comprehensively. Cocoon highlights natural ingredients and includes a
certification tick indicating eco-friendly, providing a sense of security to consumers when
reading the product details on the packaging. Pricing Strategy Page | 12
Image 11 Cocoon’s Scrub
The Organic Shop: The packaging for The Organic Shop's exfoliating products typically
features a simple, environmentally friendly design. This brand often uses materials such as
recycled plastics or other recyclable substances. However, the product's packaging does not
feel as sturdy as those from other brands, and the design is less eye-catching, making it more
challenging to attract attention on store shelves.
Image 12 The Body Shop's Scrub
Milaganics focuses on natural packaging with bright images and colors. However, the
packaging is not as robust as other brands, and product information is not as detailed or clear. Pricing Strategy Page | 13
Image 13 Milaganic's Scrub
Cỏ Mềm's packaging design is simple and informative, utilizing eco-friendly materials.
However, the packaging is not very durable and does not feel as sturdy as that of other brands.
Dove features professional and standout packaging, using high-quality, durable plastic. The
labels are clear, providing usage instructions and certifications that do not fade or peel off
during use, offering consumers a sense of safety. However, the plastic used is not recycled,
which can impact the environment if not properly recycled, making it less suitable for the
current trend towards eco-friendly consumption.
Image 14 Dove's product Pricing Strategy Page | 14