Cotton On: Comprehensive Marketing Plan for Vietnam Market Entry

This report presents a comprehensive marketing plan for Cotton On Australia's entry into the Vietnam market. It begins with an overview of globalization's impact on international business and the importance of market planning. The report covers the background of Cotton On, highlighting its growth and diverse brands. A detailed analysis of the Vietnam market follows, emphasizing its population size, economic growth, and the potential for textile retail despite existing challenges. The PESTLE analysis examines the political, economic, social, technological, environmental, and legal factors influencing business operations in Vietnam. The marketing strategy outlines objectives such as achieving high profit rates, expanding production capacity, and utilizing the Vietnamese market and labor force. The report recommends a joint venture as the optimal market entry strategy and identifies the target market as young people, adults, women, and men, segmented by age, gender, and class. Finally, the marketing mix, including product, price, place, and promotion, is thoroughly explored, with recommendations for penetration and competitive pricing strategies to ensure successful entry and growth in the Vietnamese market.

Running Head: COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO
VIETNAM
COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO VIETNAM
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COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO VIETNAM 2
Introduction
Over the past decades, globalization has impacted the business operations of numerous
countries. Globalization has reduced the distance between countries thus enhancing the ability of
organizations to supply products across countries through the application of technological
devices and improved infrastructure. The decision by company and the international market
selection majorly depends on the international market principles, which refers to the application
of the marketing principle to satisfy various customer needs and wants in different marketing
across the national border. Before the international market entry, every organization needs to
develop a market plan that ensures the seamless entry process into the desired market (Konwar et
al., 2017). Generally, marketing planning is a systematized to relate organizational future
opportunities of with the strengths and resources to attain the desired objectives.
The international organization thus significantly depends on market planning. The
current paper is an exploration of the marketing plan of the Cotton On Australia Company that
aims at venturing into Vietnam Market. The paper covers the background of Cotton On Australia
Company, Research analysis of Vietnam Market, Pestle Analysis to ascertain the country’s
capability to support international investors, secondary Market Research Analysis, Marketing
Mix and Recommendations about the best way to enter into the Vietnam market and what should
be considered to ensure the success of Vietnam market entry.

COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO VIETNAM 3
Figure 1: Shows International Marketing Plan, obtained from (Konwar et al., 2017).
Background Cotton ON
Cotton On – Australian Company, founded in 1991 by Nigel Austin with only one store
at Geelong is the Australian largest retailer that majorly deals with the fast fashion clothes for all
range of people: women, men and children. The retail that began as a family affair has current
continued growing while opening numerous different stores across Australia and currently has
more than 1000 stores with more than 5,500 employees. Currently, the company has different
branches in different countries such as Hong Kong, Japan, Thailand, Indonesia, Malaysia, Brazil,
and the United States among many others. The company has different brands such as:
a) Kids that focus on the baby and tween clothes
b) Cotton On Body that caters on fans for the girls
c) Factories that focus on the youth’s fashion
d) Typo that focus on different stationeries
e) Supre that majorly focus on the female youths
Vietnam Market

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Vietnam is a South Asian Country with a population of about 97,302, 641. The country’s
high population is as result of the high birth rate in relation to low death rate. The high pollution
thus provides a large market for any business to thrive thus giving Cotton On a reason to move
into the market. In every 20 seconds, there is one birth rate and one death in every 55 seconds.
Vietnam’s economic conditions are considerably improving over the past years. The country’s
GDP per capita tripled from $ 600 to $2,185 per capita between 2005 and 2016, providing
consumers with strong purchasing power thus providing a good environment for any business
(Wang & Hsu, 2018). Vietnam. Vietnam textile industry owns about 6000 textile industries with
FDI contribution about 15% while 1% by the state-owned firms and 84% by the privately owned
stores. The textile industry thus contributes to about 7% of the total global apparels export,
making the country among the top garments exporters globally (Nhung, & Thuy, 2018). Despite
all the positive impacts associated to the Vietnam textile industry and retailers, the later face one
challenge that when properly addressed by Cotton On Australia Company, then the company
has a better chance to thrive. The textile industry lacks brands thus making it vulnerable to the
global textile brands such as Cotton
On(https://www.researchgate.net/publication/330510549_Vietnam's_textile_and_garment_indust
ry_an_overview)
PESTEL Analysis
The international market is well understood through the application of PESTEL, which
stands for Political Economic, Social, Technological Environmental and Legal factors (Yüksel,
2012).

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Political Vietnam is political composure is described as ‘single-communist state ‘ and
is one of the remaining communist such as : North Korea, China, Cuba, and
Laos. Vietnam’s communist party came into power in 1945 and since then has
stabilized the political environment of the country, an aspect associated with
reduced number of riots since it came into power. For example, the freedom
of the press that was extended resulting in positive signs; however; much is
still controlled and censored by the government (Fforde, 2011).
Vietnam is ranked at position 119 out of 175 corrupt countries by the
Corruption Perception Index, thus have a great negative impact on the foreign
business and non-state owned business in the country.
Economic Vietnam is considered as one of the emerging economies with the
implementation of the Socioeconomic Development strategy of 2011-2020
(Gök Hacioglu & Peker, 2018). The main goal of the strategy was to
industrialize the economy by the end of 2020 by identifying the core priorities
to meet the targets such as infrastructure, creation of trained labor and
solidification of the market-grounded organizations. However, the realizations
of the strategies will not be easy since the country has expected bouts of
macroeconomic turbulence over the past years. The country has faced double-
digit inflation, currency depreciation and loss of international reserves that
have reduced the confidence of potential investors (Phan & Jeong,
2016).Consequently, Vietnam’s recent structural growth revealed new
structural challenges such as: high level of environmental degradation,
inadequate contribution to the growth and inadequate diversification among

COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO VIETNAM 6
many others.
Social Vietnam has a large labor force since the working number; about 53 million is
half of the entire population. The labor force is majorly unskilled, with
inadequate knowledge of language technical and behavioral skills thus posing
hard times to foreign investors in securing employees. Vietnam people are
characterized as relaxed, informal and close to another. These aspects makes
favorable for Cotton On to capture the opportunity of implementing peer-to-
peer business strategy in Vietnam (Mai, 2018). The social life of Vietnamese
is currently changing, and most of them are embracing the western style of
clothing such as tee shirts and pants, lightweight clothes.
Technological By 2012 Vietnam had about 6,980,353 laptops and computers translating into
786 computers per 100 inhabitants. The country is ranked as the 18th largest
country with internet users in the world thus creating a good business
environment in the current digital marketing (Andeng', 2019). However, the
number of online purchasers is still relatively low thus can incapacitate
international organizations (Nguyen, Nguyen & Dang, 2017).
Environmental Vietnam expertise a lot of environmental problems such as pollution resulting
from the high population and excessive transportation. This has resulted in the
rising environmental awareness among the Vietnamese such as peaceful
protest.
Legal Vietnam legal framework is perceived as complicated and deficient of
transparency, dependability, and consistency making it hard for the foreign
investors (Phan, 2015). Vietnam currently lacks any law on the security and

COTTON ON- AUSTRALIAN COMPANY MARKETING PLAN INTO VIETNAM 7
safety sharing economy and tax obligations
Market Strategy
A marketing strategy refers to the business overall game plan aimed at reaching customers
and turning them into potential customers of the product and service that are provided by the
organization (dos Santos, 2015). Marketing strategy contains the marketing plan which is a
documented layout with all the marketing activities aiming at creating awareness as well as
prompting people to make purchases. The major objective of Cotton On Australia marketing
objectives in Vietnam thus will be:
a. To achieve a high rate of profit- Exploring the emerging Vietnam market that is
inadequate of brands, will provide Cotton with an opportunity to design and sell different
cloth brands to the Vietnam market, outdoing the other competitors to make more profits.
b. To expand the production capacity- Cotton On Australia needs to grow across the borders
to ensure continuous market command even in the amid of the growing competitors on
the consumer's goods and the fashion companies. Through commanding a larger market,
the company is assured of continuous development and revenue collection thus achieving
the objectives.
c. To utilize the going market and labor in Vietnamese- The objective of the Cotton On
Australia is to utilize the Vietnam emerging economy (Colovic, 2015).
Market Entry

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Market entry refers to the process or product supply and provision techniques of products and
services to the founded market. Xuegong, Liyann and Zheng, 2013) identifies dissimilar kinds
of marketplace entrance models such as direct exporting ,joint venture, licensing, franchising,
direct person and investment among many others. For Convention On, the best market entry
strategy thus will be joint Venture.
Joint Venture refers to a business arrangement that entails two parties that come into
agreement to bring together all their resources to accomplish particular tasks (ChoiChangBeom
2011). Joint venture is characterized by: shared ownership and risk, mutual benefits of market
information and infrastructures as well as additional value creation on the image of the host
company. However, the strategy is faced by different challenges such as inadequate control on
the business, high probability of conflicts and loss of knowledge.
Target market
Target market refers to a group of customers that a particular product or service is
focused at (Aghdaie & Alimardani, 2015). Cotton On Australian target market in Vietnam will
compose the young, old, women and men. The choice of the diverse targets market is essential to
the company since it will have a wide range of customers to focus on thus enhancing their
revenue collections. The target market will be segmented in terms of age, gender, and class.
Population (Approximate)
Age 0-15 years 10,700,000
16-225 years 7,500,000
26-55 years 21,700,000
56-65 years 4,400,000

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66 years and over 3,00,000
Gender Male 45,800,000
Female 44,000,000
Class Working class Earns about $1,500 per annum and compose about
10,000 million people in Vietnam
Lower class Earn about $ 9,000 per annum and compose about
25 million people
Middles class Earn about $ 14,000 annually
Marketing Mix
According to Pulido (2018) marketing mix refers to the collection of marketing tools that
are applied by organizations to pressure the marketing purposes in the marked marketplace. The
marketing mix comprises of different tolls summarized as the 4Ps: promotion, Price, Place, and
products. Cotton On Australia Company’s marketing mix thus will be fully explored to capture
all the required information for the successful entry and growth in the Vietnam’s market.
Product
Product refers to the goods and services that are offered to the potential customers by the
company to satisfy their needs. Cotton On Australia will provide a wide range of consumer
products that will majorly compromise of clothes and toys for all range of customers from men
to women and children (Zhang, Wu & Cui, 2015).

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10
Price marketing strategy
Price refers to the amount placed on a product or service that a client is ready to
reimburse in exchange for the product. Price is always the second most marketing mix element
that poses challenges to the organizations that enter into new markets. Price is always influenced
by different factors such as product demand, consumer purchasing power, competitor’s prices as
well as the government regulations. Cotton On –Australia Company will use penetration pricing
strategy and competitive pricing strategy to ensure that products are relatively cheaper than their
competitors to capture the attention of larger consumers. The product’s prices will be improved
alongside the marketing segmentations such as social classes, occupation, and brands quality
(Viendyasari, 2018).
Place
Product place refers to the locational availability of product to the customer whenever
they need it. Cotton On Australia place marketing mix thus will be achieved through the
availability of different stores that will be constructed across Vietnam. The distributions stores
will enhance the distribution and supply chain of the company.
Promotion
Promotion refers to the process of creating awareness of the products to capture the attention
as well as induce the customers to make purchases. Cotton On Australia will employ personal
selling, modes of promoting their products.
a. Advertising will be done on newspapers, television, and the internet.

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11
b. Price promotions will be used by Cotton On to set the process of the products on much
lower than the computers to entice customers to move away from the competitors.
c. Point-of-purchase promotions will also be used to display extra space in various store
alongside the products to capture the attention of the customers.
d. Consequently, the company can organize a public business show that will help in
displaying its products to the targeted market, thus creating interest among the
Vietnamese.
Recommendations
The company needs to adopt a good market entry mode either a joint venture or
franchising to ensure success in the competitive Vietnam textile industry. The industry entails
large number companies leading to overproduction thus allowing the exportation of some clothes
to the international market to seek market since the domestic market cannot fully absorb the
clothes. The high number of manufactures thus poses the Cotton On Australia into the verge of
stiff competition.
Cotton on Australia should carry extensive research on the Vietnam foreign business laws
and how they important business operations, and more importantly should be prepared for the
incomplete and ambiguous laws that have conflicting interpretations by different government
agencies. In Vietnam, government approval is not a guarantee to a free business operation since
Cotton On will have clearance from the provincial and the local authorities.
Cotton On Australia will have to have full training of all the employees that will be
recruited from the Vietnamese labor force who have inadequate skills in various aspects such as
language and technical skills. Marketing team needs employees with good communication skills

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12
and well versed with required languages to ensure effective communication between the selling
personal and targeted customers.
Capture the market intelligence –Vietnam Market intelligence allows Cotton On
Australia company to collect numerous information such as customer demographics, lifestyle
behaviors and attitudes that will be essential in creating the desired products. The collected
information will also be essential in the future too to encourage the customer to see the new
products through various platforms such as a website.
Conclusion
The current paper aim was to explore the possibility of Cotton On Australian in venturing
into the Vietnam market. From the PESTEL analysis, it is very clear that the Vietnam market is
challenging to penetrate considering all the factors. Vietnam’s economic status is less favorable
even though it is conduits as one of the emerging markets as a result of double-digit inflation;
currency depreciation; and loss of international reserves, reducing the confidence of potential
investors. Secondly, Vietnam complicated legal framework and deficient of transparency,
dependability, consistency as well as the inadequate law on the sharing economy, tax obligations
as well as security and safety makes it hard for the foreign investors.
However, to enter the market, Cotton On has to employ joint venture market entry
method to ensure the attainment of the objectives that are to provide cheaper consumer goods, to
provide distinctive brands to the market and to enlarge their market share in the Vietnam market.
Trough, the application of the other recommendations, Vietnam, will eventually explore the
competitive Vietnam market to achieve the objectives. Thus, in conclusion, Cotton On Australia
should continue with its objective in venturing into the Vietnam market.