INTRODUCTION
Biti's, officially known as Binh Tien Consumer Goods Manufacturing Company, is a prominent footwear brand in Vietnam, founded in 1982 in District 6, Ho Chi Minh City By 2016, Biti's captured 15% of the domestic footwear market and is widely recognized for producing exceptionally durable shoes and sandals.
A business leader plays a crucial role in shaping the marketing department's operations and regulations, necessitating close collaboration with other key functions within the company, including finance and accounting, production and materials, succession planning, design, and human resources Effective coordination among these departments is essential to successfully achieve the company's strategic objectives.
The company now has relationships with hundreds of companies in the country and abroad The company imported raw materials for the production of footwear from Korea, Taiwan, and China.
Bitis is rated one of the companies with a large distribution network with 7 branch centers, 156 marketing outlets, more than 1500 retail distribution intermediaries.
Launched in early 2016, Biti’s Hunter has quickly become the most popular and efficient product line in the company’s portfolio, attracting significant attention among a diverse range of offerings.
With sudden burst popularity in the company after the release of this line of products, we believe that this particular line has a lot of potential.
Biti's mission extends beyond domestic and regional markets, successfully establishing the Vietnamese brand on the international stage The company has positioned itself as a representative of Vietnam, showcasing high-quality Vietnamese products globally.
Mission statement: “ Tender care of your feet”
SWOT & MACRO – ENVIRONMENT ANALYSIS
SWOT of the company
-High-quality products, wide range, low price, suitable for wearing.
-Strong reputation in Vietnam and international market.
-Physical resources: modern machine, technology for manufacturing shoes
-Used Son Tung MTP (he has lots of fans in Korea) as a KOL, Biti’s shoes appeared in his music video for promotion.
-Financial problems: Preparing to penetrate new market costs
-Lack of reputation: Company faces a problem of creating a new perception of Biti’s
-HR is not really good, need to be trained to be more professional
Korea is a potential market with large scale, high growth and the purchasing power of consumers is quite good
Korean are interested in fashion and this country is the origin of many trendy styles, having a huge impact on the fashion industry in the world
Products made in Vietnam are now more and more favorable thanks to low in price but good in quality and design, compared to products from
Competing with Chinese products poses a significant challenge, as China stands as the world's largest manufacturer Their ability to swiftly adapt to market trends, offer a diverse range of designs, and maintain low prices enables them to cater to consumers across all income levels.
Need to produce more attractive designs, compared to others shoes brand in the world (Adidas, Nike, ) and in Korea(Fila, )
The Macro – environment
The economy of South Korea is the 4th largest in Asia and the 11th largest in the world.
South Korea has experienced one of the largest economic transformations of the past 60 years.
Despite its small geographical size and limited natural resources, the country, with a labor force of nearly 28 million out of a total population of 51.2 million, has prioritized technology development and innovation to drive economic growth This strategic focus has transformed it from a primarily rural, agricultural society into a thriving urban, industrialized nation, where industry now accounts for 35.9% of the GDP and employs 24.8% of the workforce.
South Korea's economy is experiencing significant growth, leading to an improved standard of living Young individuals in Korea are increasingly focused on entertainment, fashion, and accessories, thanks to their sufficient income This trend has resulted in a sharp rise in the market for shoes, clothing, and accessories, boosting sales and creating opportunities for both local and international brands.
South Korea is ranked 15th in the latest Human Development Index
Life expectancy is high (80.6) and public expenditure on education and training high (>4% of GDP)
The country is highly urbanised (83% of the population)
Income and wealth inequality is low but it has been increasing in recent years.
Number of people uses Internet: 81,5% population (2011)
The young population, coupled with high-quality education and life expectancy, presents a promising market for sneakers, particularly for brands like Bitis Urbanization and the growing number of internet users enhance the effectiveness of digital marketing strategies, enabling brands to establish a strong presence through showrooms Additionally, government size and tax policies play a crucial role in shaping the business environment for the shoe market.
The top personal income tax rate has been increased to 42 percent, while the top corporate tax rate now stands at 25 percent, both subject to a 10 percent surtax Consequently, the overall tax burden represents 26.3 percent of total domestic income In the past three years, government spending has averaged 32.4 percent of the country's GDP, with budget surpluses averaging 1.4 percent of GDP Additionally, public debt is currently at 39.8 percent of GDP, reflecting the fiscal landscape of an open economy.
The total value of South Korea's exports and imports constitutes 80.8% of its GDP, with an average applied tariff rate of 4.8% As of 2018, the WTO reported that South Korea had 394 non-tariff measures in place While certain sectors still face foreign investment restrictions, there has been a lack of significant policy reforms to enhance investment flows Although the financial sector is competitive, new business start-ups continue to face challenges in securing financing.
Regarding South Korea's commitment to reduce import tax for Vietnam, South Korea has completed the elimination of import tax as committed in the AKFTA Agreement from 2010.
Accordingly, up to now, 90.9% of goods Vietnam's goods exported to South Korea will enjoy 0% tax rate if they have a certificate of origin
The tariff advantage presents a significant opportunity for Bitis to enter the South Korean shoe market, allowing it to compete effectively against established foreign brands such as Adidas and Nike Additionally, understanding the labor features and structure in Korea will be essential for Bitis to optimize its operations and enhance its market presence.
Growth and changes in the structure and ownership pattern of the economy also have changed the labor force
By 1958, individual private farmers: >70% of the labor force, had been transformed into or replaced by state or collective farmers
Labor force (12.6 million)—by occupation:
The ongoing economic restructuring in Korea has led to an increase in living standards, contributing to rapid urbanization and higher incomes This economic growth creates a larger potential customer base for shoe brands such as Bitis.
2.2 Political and legal environment a) Political
South Korea, a democratic nation with significant presidential power, implemented robust economic reforms following the 1997 financial crisis, leading to a swift recovery and stabilization of its financial sector The government's ongoing interventions have been crucial in driving the country's development Additionally, as of 2019, South Korea maintains diplomatic relations with 191 countries, highlighting its commitment to fostering strong international cooperation.
The political characteristics of South Korea have led to a more effective political system, enabling the nation to prioritize economic development and enhancing its appeal to foreign investors.
The South Korean judiciary system is influenced by the legal frameworks of the United States and Germany, notably lacking the use of juries in trials Additionally, the country features a specialized constitutional court that oversees government actions and legislative processes.
Since joining the OECD, South Korea has established itself as a developed nation, offering compelling regulatory incentives for industrial growth The government's incentive programs, including tax deductions, exemptions, and cash grants, are significant draws for foreign investors seeking opportunities in the country.
In addition, Vietnam and Korea both signed a Vietnam - Korea Free Trade Agreement (VKFTA) on 5/5/2015 This kind of relation provides more opportunities to Vietnamese Companies in this potential market.
In 2019, the trend of "Expressing Style" emerged in Korea, reflecting consumers' desire for more than mere functionality For instance, during a picnic by the Han River, individuals seek to create a picturesque experience, complete with a kite, a basket filled with delightful treats, and decorative flowers, reminiscent of the romantic scenes often portrayed by actors on television.
In today's fashion industry, businesses must recognize the growing consumer desire for products that reflect personal style and individuality Clothing and accessories serve as a means of self-expression, allowing individuals to showcase their character and identity To meet this demand, our company has introduced multiple collections that offer a diverse array of designs, materials, uses, colors, prices, sizes, and options for all genders We aim to provide our customers with an enriching experience that empowers them to explore limitless choices in fashion.
Famous people have a huge influence
In the evolving landscape of retail, traditional distributors are now joined by anyone capable of launching online stores, thanks to extensive distribution services The rise of online multimedia has empowered influencers on social networks to create their own sales channels or collaborate with established brands, driving the trend of individual entrepreneurship Selecting the right Key Opinion Leader (KOL) to represent a brand is crucial; for example, “Son Tung M-TP,” a renowned figure in Vietnam and across Asia, embodies the aspirations of the youth with his boldness and unique style His partnership with Bitis has revitalized the brand, showcasing the transformative power of strategic influencer marketing.
The 2019 trend known as "newtro" merges modern aesthetics with nostalgic elements from the 1990s, evoking memories of a bygone era while offering fresh experiences to younger generations who never lived through that time By blending past and present styles, "newtro" captivates individuals in their 20s, prompting us to incorporate this trend into our products through innovative design, color combinations, and customer engagement strategies.
Foreign brands are favorable and Customers always look for new things
MARKET ENTRY STRATEGY
Biti’s entry mode
The Vietnam-Korea Free Trade Agreement (VKFTA), signed on May 5, 2015, and effective from December 20, 2015, provides enhanced incentives in goods, services, and investment compared to the ASEAN-Korea FTA This strategic advantage has prompted Biti's to enter the export market, allowing the company to optimize costs and offer competitive pricing for its products.
Biti's strategy for entering the Korean market involves establishing sales representative offices and company-owned branches to manage sales, distribution, promotion, and customer service This approach includes participating in trade fairs, conducting market research, and identifying distributors and customers Biti's is targeting Korea due to its potential for high sales and strategic significance The company plans to gradually set up national headquarters and distribution centers, ultimately creating a fully operational sales team in Korea.
Establishing a sales representative office and owned branches offers Biti's significant advantages, including reduced intermediary costs and enhanced flexibility This approach minimizes risks while maximizing operational efficiency, allowing the enterprise to optimize its export strategy effectively.
By engaging directly with international units, businesses can effectively understand the evolving preferences and demands of their customers, allowing them to tailor their products and operations accordingly This approach also enables companies to maintain control over their pricing and product offerings in foreign markets.
Biti's faces several challenges in its export endeavors, including the need for significant capital investment to conduct market research, establish offices, and develop a customer base Additionally, the company must maintain financial independence while navigating initial difficulties in competing with larger brands and building customer trust.
Targeted market
South Korea, located on the southern half of the Korean Peninsula, is renowned for its vibrant K-pop industry and advanced cities like Seoul and Busan, where fashion-forward individuals showcase stylish clothing and luxury accessories With a rapidly expanding footwear market, shoemakers are eager to capitalize on the opportunities presented by this developing market.
With a population of 52 million, South Korea presents a lucrative market for Biti's expansion The vibrant and youthful demographic in major cities, coupled with advancements in technology and infrastructure, makes it an ideal location for new branches Biti's plans to establish stores in high-density areas such as Busan, Andong, and Seoul will facilitate brand promotion and product distribution, allowing for significant market penetration.
MARKETING MIX STRATEGY( 7Ps )
Product
Core product: Bitis can protect customers’s feet from being injured and coldness
1 Design: Modern, trendy design Because Koreans often pay a lot of attention to beautiful and trendy design.
2 Material: Layered, open-weave, antibacterial Liteknit fabric brings breathable comfort and a sock-like fit Koreans prefer stylish and comfortable sneakers because of dynamic lifestyle.
3 Color: Black, White, Pink, Grey and Orange These colors are easy to mix with clothes They are also loved by young people.
4 Height: Insole height reaches 5cm => Easy to do outside activities.
The expected product offers protection against cold weather and harmful objects while ensuring a stylish and comfortable fit It is versatile enough for various activities, making it ideal for school, outdoor adventures, travel, and sports.
Bitis, a renowned shoe brand in Vietnam, is celebrated for its exceptional tensile strength As it enters the South Korean market, the company plans to prioritize design, recognizing its significance to South Korean consumers.
Bitis also have after-sale service and customer programs, which will increase loyalty customers
In the future, Bitis has the potential to introduce innovative products such as waterproof sneakers and personalized designs tailored to customer preferences, utilizing advanced technology Additionally, they could create a product line inspired by popular idols, appealing to a broader audience and enhancing brand engagement.
Product strategy: Bitis uses global localization strategy.
Product image: Dynamic, Comfortable and Trendy.
Place
Through Bitis’s stores, in early stage it will focus more on rural areas to avoid the competency with other brands in South Korea
South Korean consumers increasingly prefer to shop online from non-local websites to save money, creating an opportunity for Bitis to enhance its sales strategy By leveraging their own website and social media platforms, Bitis can effectively reach this market and boost direct sales.
Bitis can effectively sell its products on popular e-commerce platforms like Gmarket.co.kr, 11street, and Coupang The booming e-commerce market in South Korea is driven by a tech-savvy consumer base and a robust internet infrastructure, making it an ideal environment for online sales.
Bitis can sell products in some supermarkets, superstores in South Korea such as: ABC mart, LesMore,
Price
Bitis, a new foreign sneaker brand entering the competitive Korean market dominated by established names like Fila, Nike, and Adidas, is employing a penetration pricing strategy to quickly capture market share By offering lower prices, Bitis aims to differentiate itself from existing competitors and attract customers away from established brands The primary objective of this pricing approach is to rapidly increase market presence and encourage consumer switch from rival products.
Advantages of Using Penetration Pricing Strategy when implementing to Korea Market:
High adoption and diffusion: Penetration pricing allows a Bitis to be quickly accepted and adopted by customers.
Bitis effectively leverages a penetration pricing strategy, allowing it to seize market dominance by quickly attracting customers while competitors struggle to respond This approach enables Bitis to maximize its customer base during a critical window of opportunity.
Economies of scale: The pricing strategy generates high sales quantity that allows a firm to realize economies of scale and lower marginal cost.
Offering customers the opportunity to find bargains on products or services fosters increased goodwill, encouraging them to return in the future This enhanced goodwill also leads to positive word-of-mouth recommendations, further benefiting the business.
High turnover: Penetration pricing results in an increased turnover rate, making vertical supply chain partners such as retailers and distributors happy.
Promotion
Bitis can leverage media competitions focused on trending issues, similar to their successful strategy in Vietnam By hosting contests on social media platforms, they can effectively capture customer attention and enhance engagement with their current followers.
To achieve success in social media content, it's essential to offer attractive prizes that resonate with the Bitis brand, such as a pair of sneakers, new releases, or limited-edition products Additionally, ensure that the participation process is straightforward, enjoyable, and accessible for everyone.
Using KOL/ Influencer to promote brand:
Leveraging popular KOLs and influencers, such as BlackPink and BTS, can significantly enhance brand visibility for Bitis among target customers By appointing these renowned Korean artists as ambassadors, the brand can effectively capture attention and spark curiosity, ultimately driving engagement and interest in its offerings.
Beside running campaign with KOL, Bitis shoul develop the community of reviewer in Korea because:
Before buying, customers tend to look for reviews online as part of their decision-making process Blogs, Vlogs from reviewers have become a common source for unbiased product information.
Utilise social platform advertisement like Facebook, Instagram, Google, Kakao,
Bitis targets the young generation with a cool, street style mindset, as 90% of them actively use social media To capture their interest, Bitis should leverage social advertising as a key strategy By implementing the "Too much, too little" approach, Bitis can create a sense of scarcity that drives demand, encouraging customers to desire ownership of their products even more.
People
People are the key component of any service or experience, as services are produced and consumed simultaneously The customer experience is tailored to meet individual needs, highlighting the significance of the people element in the marketing mix This underscores the necessity of viewing marketing as a fundamental aspect of business operations, as it profoundly influences other elements within the organization.
Bitis prioritizes recruiting the right talent across all organizational levels, recognizing that people are the key to business success The employees, including the branch general manager, are Korean, providing a deep understanding of local culture, customer behavior, and customs They will undergo comprehensive training from Bitis's skilled professionals to ensure they are well-qualified in their respective fields The training will emphasize high-quality customer service standards and the importance of employee actions that directly impact customer experiences, positioning staff as vital representatives of the company's image to customers.
At Bitis, we view our employees as vital contributors rather than mere resources, fostering a competitive work environment that challenges them daily This approach enhances their skills and benefits not only our stakeholders, including our workforce, but also society at large We value the insights of all our employees, from C-suite executives to shop staff, ensuring their ideas are taken seriously.
Process
The process encompasses the methods used to deliver products and services to customers, emphasizing the importance of being easy to do business with Since service delivery often occurs in the presence of the customer, the manner in which services are provided significantly impacts the overall value they receive.
Bitis leverages advanced technology to create a user-friendly online platform, allowing customers to navigate and purchase products effortlessly within seconds The website features a clear and organized product listing, ensuring easy access for users The streamlined buying process, coupled with fast delivery, positions Bitis competitively against its rivals In addition to its online presence, Bitis emphasizes exceptional customer service in-store, welcoming customers warmly and providing personalized advice After purchases, customers benefit from comprehensive insurance and return policies, and they are invited to join the Bitis community, which offers various advantages to foster long-term relationships.
Physical aspects
Physical evidence plays a crucial role in shaping customer expectations and perceptions of service quality Recognizing its significance allows businesses to strategically plan for its advantages To create an effective physical environment, strategies must align with the overall goals and vision of the enterprise A knowledgeable planner should understand the business objectives and leverage physical evidence elements to implement them successfully.
Biti's recognizes the critical role of Physical Evidence in shaping customer perceptions, focusing on aspects such as product packaging, equipment supply, and external relations to create a meaningful impact By enhancing service environments, Biti's aims to deliver authentic customer experiences that foster a distinctive brand image A well-organized Physical Evidence layout not only increases productivity but also facilitates clear communication between employees and customers, ensuring that every element of the service environment conveys the intended message effectively.
Biti's must not only prioritize its products and services but also create an engaging showroom that incorporates appealing colors, thoughtful decoration, strategic layout, inviting music, pleasant fragrances, clear signage, comfortable seating, and efficient delivery This holistic approach will resonate with various market segments, ultimately enhancing the overall customer experience.
CONCLUSION
With nearly 40 years of history, Bitis has experienced both failures and successes that have shaped its valuable lessons and experiences The company has solidified its position in customers' minds by focusing on building a strong brand image, creating differentiated products, and maintaining a robust sales and distribution system After facing significant setbacks due to a failure to adapt to market trends, Bitis has successfully re-emerged with a new, innovative product proudly made in Vietnam.
“Bitis Hunter” This product has helped Bitis to turn over a new leaf in Vietnam, making a deep impression in domestic consumers and promising to reach international markets in following years.
Korea has been identified as a promising market for Bitis, as its society is known for rapidly adopting and spreading new fashion trends globally Targeting young consumers aged 15 to 30, Bitis aims to connect with potential customers who seek brands that reflect their unique identities The Vietnam-Korea Free Trade Agreement (VKFTA), effective since December 20, 2015, offers more favorable terms than the ASEAN-Korea FTA, enhancing trade in goods, services, and investment between the two countries This strategic advantage allows Bitis to enter the export market, optimizing costs and providing competitive pricing for its products.
Bitis faces several challenges in entering the Korean market, including the need for new capital investment to conduct market research, competition from local brands like Fila and KOLCA, as well as Asian companies such as those from China and Japan, and global brands like Adidas and Puma To successfully penetrate this market, Bitis must also enhance its designs to align with foreign consumer preferences A comprehensive strategy based on the 7Ps framework is essential for Bitis to effectively navigate these challenges and establish a strong presence in Korea.