The marketing strategy of Seventh Generation to penetrate in Vietnam

(Laundry detergent products)

I. Executive Summary

The purpose of this marketing plan is to demonstrate the current market situation, analyze the requirements and build marketing strategies to re-penetrate laundry detergent products named Seventh Generation of Unilever company in Vietnam. This is intended to bring eco-friendly home products to raise the customers’ environment-consciousness and health-consciousness and gain double sales in terms of economic purpose.

II. Current Marketing Situation:

1 Internal situation

1.1 Company

Seventh Generation is a pioneer in corporate responsibility and sustainable product innovations, including plant-based household and personal care products. Seventh Generation first launched in Vietnam in 2010 but struggled with some financial and marketing issues, so in 2019, Unilever planned to re-penetrate in Vietnam again with 3 key products of Seventh Generation. The Seventh Generation’s vision is “Safe for Human Health and Safe for the Planet”. Therefore, throughout their 30 years of establishment, they are dedicated to evaluating how to reduce their environmental impact, increase productivity and safety of the products, and create a more sustainable supply chain.

Figure 1: The product lines launched in Vietnam

(Source: Seventh Generation Press Kit 2019)

1.2 Product

Re-launching in Vietnam, Seventh Generation provides three key products covering the full range of home solution: Dishwashing, Laundry detergent, and Cleaning Spray. The product price is on the super-premium segment which is ranging from 50.000 VND to 200.000 VND. Specifically, the laundry detergent is the key product with 3 main scents: Free and Clear (No smell), Fresh Lavender and Fresh citrus and 2 package sizes which are 1 litre and 2 litre. Their unique selling point is that all the ingredients and packaging are biodegradable or recycled, which are received the USDA Certified Biobased Plant-based 97% (For Health) and tested on 60 of the toughest stains botanically.

1.3 Channel

Unilever has a stable distributing system with 5 manufacturing factories, more than 350 wholesale distributors and approximately 150.000 retailers in Vietnam. Currently, the Seventh Generations product lines are mainly distributed at MT channels containing Grocery chains (Vinmart, Intimex), supermarkets (Big C), and malls (Vincom, Aeon Mall). Moreover, the customers can purchase Seventh Generation products on online channels like Shopee, Tiki, or Lazada. The variety of purchasing channels helps the company to spread its recognition along with popularity in Vietnamese market.

2 External situation

2.1. The increase in GDP and urbanization level of Vietnam: In the last 5 years, Vietnam’s economy has experienced positive development with the highest GDP growth rate in Southeast Asia - approximately 7.02% in 2019 (GDP growth (annual %) - Vietnam | Data, 2020). In addition, people have shifted to big cities, industrial zones, as well as potentially-developed areas like Mekong River Delta and Red River Delta owing to employment and educational opportunities. As a result, the inhabitants’ average income has been notably enhanced, and they tend to spend more money on purchasing, especially premium products. When deciding to use a product or service, particularly laundry detergent, customers put not merely price but also other elements like the sustainable trend, the international quality, natural ingredients, and packages into account.

2.2. The environmentally sustainable trend: In recent decades, the concern about environmental sustainability has considerably increased all over the world, and Vietnam is not an exception, particularly since air pollution in Hanoi and Ho Chi Minh City dangerously reached an alarming level - purple. Consequently, the citizens are more aware of their responsibility for the surroundings and have a tendency to produce and use more biodegradable products.

3 Competitive situation

According to the report of Euromonitor, there are about 36 large international and domestic competitors selling household products in the Vietnamese. The main competitors of Seventh Generation are the international brands which account for 78% laundry detergent brands in Vietnam (Euromonitor FMCG in Vietnam, 2019). Seventh Generation has to compete with Omo produced by the same group Unilever, Tide and Ariel of the rival P&G and another natural laundry detergent like MotherEarth. Their strengths are strong brand awareness, diverse product lines and low prices. From the survey, it’s clear that Omo and Ariel are the most prominent players with 73% awareness and 82% usage and trust of customers. Due to the customer’s preference toward environmentally friendly products now, some brands are adding the natural ingredients in their formulas to attract more buyers. However, no brand can confidently state about the 97% pure ingredient and 100% recycle package like Seventh Generation. Therefore, the selling points make Seventh Generation stand out from the others.

Figure 2: The competitive situation in Vietnam Laundry detergent

(Source: Q&Me Vietnamese washing brands preferences)

4 SWOT Analysis Strengths Weaknesses

• Eco-friendly home products with USDA ●

Certified Biobased Plant-based 97% (For Health) and successfully tested on 60 of the

toughest stains botanically. ●

• 100% of the fragrance is extracted from the essential oil of the herb flower
• 100% of packaging is made from recycled

The high price of Seventh Generation, which is 20% - 30% more expensive than the others. A brand-new product, which is now on the way of attracting customers

plastic

• The trusted brand Unilever - mother company of Seventh Generation

Opportunities Threats

• The fast-growing of globalization and ● The economic crisis due to the social media currently is a golden coronavirus pandemic, which opportunity for Seventh Generation to makes the customer tighten their approach customers in the potential budget

markets ● Fast-Moving Consumer Goods

• The organic trend of consumers (FMCG) is one of the most
• The advance technology in marketing competitive industries

strategy ● The imitation of counterfeit and low-quality products, which make the customer underestimate the company’s brand image.

III. Objectives and issues 1 Objectives Market Share Profitable Promotional Growth Objective Objective Objective Objective

Gain 10% share in Double the sales of 100% Awareness of Grow the awareness the laundry detergent first year on market Target Audience. of people about ecomarket in Vietnam in to $300 Million. 10% Conversion rate friendly cleaning

the first year. to trial stage. products even in

73% video content remote areas. preferences.

2 Issues:

In launching this new brand, there are several main issues. The first issue is the ability to establish a strong brand image based on positioning that is relevant to target customer segments, which requires a long-term marketing strategy and plan. The second issue is that the price of natural products are also higher than normal cleaning products, so when launching products at first, the sales revenue may not be as expected.

IV. Target Market and Customer analysis 1 Market Research

This study was conducted by a group of ten students studying Business English (2017 - 2021) at Hanoi Foreign Trade University (FTU) in September 2020 during their Marketing Course.

Research The objective of the study is to evaluate the Seventh Generation’s brand

Objectives awareness in comparison with other FMCG brands and to find the insight of customers using laundry detergent products

Research 1. What are the customers’ thoughts about laundry detergents?

Questions 2. How do they buy laundry detergent products (Preference, Place,

Price, etc)

3. What do they think about the laundry detergent of Seventh Generation?

Research The study setting was mainly at the key urban cities in Vietnam. The methodology sample consisted of 250 millennials chosen randomly with different gender, job, preference, etc., The survey, including 50 questions, was divided into three main parts: Personal Background, The behaviours of using laundry detergents, and The evaluation of Seventh Generation Brand Awareness.

2. Target Audience:

Millennial woman

Income: AB+

Age: 20-40

They are a business woman, young mom-to-be; or a Mom with Kids

They live in key urban cities: HCM, HN, Danang

They are highly connected, highly influential and value assistance.

They greatly prioritize the kids and family’s safety and development

According to Euromonitor Consumer behaviours, 2019, we want to choose this segmentation because, they:

Greatly contribute to FMCG Value with 46%

• Base on social media for purchase decision with 81%
• Trust brand that align with their life values with 87%

3. Insight Identification

9 out of 10 surveyed woman admitted that they have already acknowledged the danger from unsafe cleaning products but only 3 of whom already tried safer alternatives

57% Millennial feel that doing housework is pressure and has negative impacts on their hand skin

4. Insight

“As a modern woman who is constantly exposed to cleaning solutions, I totally acknowledge the harmful effects from these unsafe products. However, I keep using these chemicals without considering long-term side effects because I have limited time to think about alternatives and the old ones have become a daily habit, and their short-term side effects are insignificant.”

5. 3C Truths

Consumer Truth Category Truth Company Truth

Women acknowledge Plant - based laundry Seventh Generation laundry the harmful effects from detergents provide safer detergent which is the first 97% these unsafe products choices for women in plant-based product in Vietnam but keep using these comparison with (Safety) and successfully tested on because of daily habits chemical products 60 of the toughest stains

and those insignificant botanically (Effectiveness) is a short-term side effects. smart choice for millennial woman

V. Marketing Strategy (4P model)

1. Positioning:

Seventh Generation is one of the first companies founded on sustainability principles and mission in the United States. Aligning with the global vision, Seventh Generation’s positioning in Vietnam is “The safest home choice with 97% plantbased and 100% recycle packaging - Gentle but effective”, which means that it’s both safe for health and safe for the environment while guaranteeing the effectiveness in cleaning (after proved to cleanse 60 hardest stains). This positioning will attract our target audiences as the millennial woman, who are connected, high environment-conscious and health-conscious.

The positioning is carried through in all aspects of the marketing mix. The logo, for instance, features a green leaf printed on the white background, which makes the products look cleaner and more eco-friendly. The packaging, which has already been 100% recycled, will be collected and refilled to reduce the new plastic produced. In the future, Seventh Generation will strive to develop the ingredients and formula of our product to make it 100% plan-based and more effective in cleaning.

2. 4Ps model

2.1 Product

Seventh Generation laundry detergents are in its introduction stage, Unilever is currently offering several basic SKUs. According to the survey we have done, the most influential criteria when choosing a product is the smell which has always been a strength of Seventh Generation. In the future, the product lines will soon be added to new natural scents that are more familiar with Vietnamese customers like Green Tea and Lemon. Moreover, the R&D department will work on the function of increasing the durability of color and softening cloth material.

Moreover, most customers buy household products directly at the market or retailer store, we should consider changing the packaging to appeal more attention from customers with strong messages and colorful designs. For example, the line “97% plant-based” has created a strong impact on the psychology of consumers, so we need to put it on the top of the bottle. The survey also found out that Vietnamese people prefer buying large sizes of a product and the pack instead of the bottle, we can tackle this problem by customizing our packaging into a 2L bag packaging.

2.2 Pricing

Seventh Generation follows a value-added pricing strategy. Given that Seventh Generation claims its premium and provides environmentally friendly products whose ingredients are extracted from natural sources, it must be careful not to position itself as a lower-cost alternative. Rather than cutting prices to match competitors, Seventh Generation will add more quality, better services, and valueadded features to differentiate its offers and thus support its higher prices.

Seventh Generation will remain its current pricing policy. Regular prices for a 700ml, 1-litre, and 2-litre bottle/pack are 77,000, 135,000 and 225,000 VND respectively, which are considered to be suitable with its high-income TA. In detail, MT and E-commerce channels enjoy attractive discounts as following:

• MT channels (Vinmart, AEON Mall, Lotte Mall) will be offered a 5% one.
• E-commerce channels named Lazada, Adayroi, Tiki will enjoy a 10%-20%discount and e-vouchers will be used to boost sales on these platforms. As mentioned above in the SWOT analysis, price acts as an obstacle in the market which is mainly dominated by lower-price competitors. According to our survey, most of the respondents say they would pay an extra of less than 20% to purchase a plant-based, environmental friendly laundry detergent. Therefore, in order to stimulate demand, Seventh Generation continues offering its customers several appealing discount programs on special occasions such as Black Friday, Tet holiday, Women’s Day, etc., especially in the first stage of penetration.
  1. Place

Due to the survey, 79.5% of participants confirmed that the main reason for buying a laundry detergent brand is its availability and easy-to-buy. Therefore, developing the distribution channels and Point of Sale Materials (POSM) is the key for us to compete with other brands. Seventh Generation now employs a strong distribution strategy with its current retail outlets, especially in MT channels (regional supermarkets, shopping malls) and E-commerce where it attracts a lot of targeted customers. Nearly 80% of our respondents say that they often find and buy laundry detergents directly at big supermarkets such as Vinmart, BigC and Lotte Mart. Due to the high price, Seventh Generation’s laundry detergent will not be distributed on TT channels (traditional market or small retailers). Additionally, Seventh Generation will have a team of well-trained customer service staff that are ready to support its customers and expand its brand awareness.

Due to the considerably ongoing impact of COVID-19 pandemic, Seventh

Generation will also put more effort in promoting its sales and satisfying its online customers’ needs through e-commerce platforms such as Tiki, Lazada, Shopee and so on. If necessary, Seventh Generation will launch its laundry detergents in other stores and retailer agents near densely populated areas in order to approach more customers and gain more brand awareness.

• 1. Promotion

Based on the survey analysis, just 27,2% of respondents know about brand Seventh Generation, and the figures even halve with the number of people using the products at least one time. Meanwhile, “Gentle for hand skin” and “Pleasant fragrance” are the top 2 factors that customers consider when buying laundry detergents. Therefore, the upcoming campaign will emphasize on developing social networks to increase brand awareness and show people the connection between their aforementioned preferences and the positive effects of our natural-based products. In addition, to stand out from our competitors, Seventh Generation will also gain the customers’ love by being the pioneer in environmental protection and pollution minimization activities and approaching customers with precision marketing.

• • 1. Communication theme

Big Idea: #HomeSafeHome

The idea derived from the idiom “Home Sweet Home” which delivers the image of a safe house where you and your family are safe and comfortable. Leading a safe home is leading a safe lifestyle for now and for future generations. The idea is consistent throughout all activities and channels of the campaign to raise customers’ awareness about the USP of Seventh Generation - Gentle but Effective.

• • 1. Activities

Online channel: Social networks (Facebook, Tiktok and Instagram), Youtube, websites and E-commerce platforms.

• Phase 1 (Trigger): Draw the target audiences (TA)'s attention by introducingthem an initial teaser and encouraging them to take part in social debates about the role of women in a family among netizens. According to the survey, 51,3% of respondents said that they knew about Seventh Generation through the Internet (Google, social media and E-commerce). Therefore, we published a 6second-teaser which derives from the viral video in the next stage to attract TA’s curiosity about the message “It’s not that safe” on social networks. The supporting tactics are Facebook/Youtube Ads to promote the clip and the PR articles on Vietnamnet, Theasianparents, Dantri to write details about the meaning of this teaser and the reaction of customers. In addition, we also use different landing pages on website/E-commerce platforms to pre-engage customers to the brand. We also persuade TA by engaging them in public debate about the importance of choosing household solutions and by PR articles about the significant benefits of using natural products to their health.
• Phase 2 (Engage): Inform TA about the long term hazardous effects oftraditional products, then urge them to switch to safer household solutions.

Viral clip "Believe in your choices" featuring KOL Giangoi. This video features the comparison between a normal laundry detergent in the no-label white bottle and Seventh Generation one. The KOL respectively tests different functions of two products at the same time, such as their effectiveness, smell, and gentleness. She also tells the customer that chronic exposure to detergent chemicals in conventional cleaning products may cause pulmonary fibrosis, severe lung damage or even ovarian failure and stillbirth. Then, she deliver the message “A smart woman can make smart choices” to bring the #Homesafehome to her family and conclude that Seventh Generation products are superior. The supporting tactics is social seeding from KOLs with healthy lifestyles like GiangOi, Shark Thai Van Linh to share why they use it, how they recycle the bottles with the hashtag #Homesafehome.

• Phase 3 (Amplify): Emphasize on brand positioning as a “The safest homechoice with 97% plant-based and 100% recycle packaging” to boost trial conversion rate and increase word-of-mouth. Our main activity is the Ecommerce Earthday - Rhythm of mother earth featuring Lazada, Tiki, Shopee and so on, which the TA can gain a mother workbook - “Trust your natural instinct - Make home a safe home” whenever they buy laundry detergents. We support this activity by the public sharings of other millennials such as GiangOi,

Diep Chi and Diepthebug on our new Facebook group for moms

“Homesafehome”

Offline channels: in MT (Supermarket, big market, etc.,) + Clothes brands

According to the survey, 79.5% of respondents affirm that they buy a laundry detergent due to their habits and the availability of the product on stock. To increase the sale of products, we will disrupt new playful samples instead of the boring ones: “The 7G Tag”. Like the tag you'll find on all new clothes, but made entirely out of Seventh Generation laundry detergent and 100% water-soluble. We partner with some biggest clothes brands like: Canifa (local), H&M (foreign) to place 5,000 clothing tags on clothes and Supermarkets like Vingroup, AEON Mall to give away the tag samples. They just have to remove it and pop it inside their washing machines. And just like that, we get samples into their hands and enable Millennial women to personally test the laundry detergent and witness the "Gentle but effective" (Functional) and "Natural Touch" (Emotional) of Seventh Generation. Each tag will display the tagline “Remove the stains of chemical products on your family’s health” with the image of KOLs to attract the customers' awareness.

3 Action program

The following are summaries of action programs that will be used during the last three months of 2020 to achieve the stated objectives.

Trigger

(2

weeks

)

Engagement

(7

weeks

)

Amplification

(3

weeks

)

Objective

Encourage netizens to

participate in social

debates about the role

of women in a family

to spread a message

“It’s not that safe.”

Inform TA about the

long-term hazardous

effects of traditional

products, thus urge

them to switch to safer

household solutions.

Emphasize on brand

positioning to boost

trial conversion rate

and increase word-of-

mouth.

Key hook

A 6-second teaser with

A video “Believe in

Ecommerce Earth Day

the message “It’s not

that safe.”

your choices.”

Supporting

tactics

●

Facebook/Youtube

Ads

●

PR articles

●

Landing pages on

website/E-

commerce.

●

Social seeding from

KOLs

Public debates, PR

●

articles

●

Samples as clothes

tags

●

Public sharings of

famous millennials

A mother workbook

●

Metric

Discussion rate, views

on teaser, conversion

rate, impression.

Discussion rate, Views

on video.

Feedback, number of

products sold.

VI.

Financial and operation plans

VII. Implementation control

Our team chose Productivity Control to assess our performance and progress in managing the efficiency of key marketing areas such as the sales force, promotions, logistics and product management because we believe that assessing whether the whole team reaches KPIs or not is important so as that we can decide to change or maintain the planned program. Specifically, we will set up a system of measurements to collect data, analyze them, make comparisons and take final decisions to gain our marketing objectives. Furthermore, in the first stage of our Marketing Strategy which is Marketing Plan, we made a table with detailed tasks of each member and tried our best to follow and submit on time. Moreover, the leader played an essential role to help, urge and encourage other team members with an aim to work as productively as possible. Last but not least, preparing contingency plans is necessary. We are coming up with solutions in case of significant, unexpected changes.

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