Market

situation analysis and recommended target markets

Word count: 2,196

Executive Summary

Biti’s has become passive in the local market without no new product introduction and
refreshing its brand identity.

A need of comprehending its market situation is emerged. An analysis of 5C’s, Porter’s Five
Forces and SWOT is to provide snapshot its current conditions. From this result, it is found
that Biti’s has a long successful history of providing good product quality. It also reveals the
weaknesses of slow introduction of new designs resulting in disremembering the brand by
the customers.

However, the company also has opportunities that there is low competition in production to
average income customers. This urges Biti’s to take immediate actions to avoid losing
market shares to unbranded goods and counterfeits as well as foreign brands.

As a next step, the assignment is recommending market segmentation and target market
that would help the company to gain market shares in medium term.

Table of Contents

INTRODUCTION 1

BACKGROUND 1

MARKET ANALYSIS 1
5C’S ANALYSIS 1
USING PORTER’S FIVE FORCES TO UNDERSTAND INDUSTRY COMPETITIVENESS 5
SWOT ANALYSIS 5

MARKET SEGMENTATION 6
GEOGRAPHIC SEGMENTATION 6
DEMOGRAPHIC SEGMENTATION 6

TARGET MARKET RECOMMENDATION/S 7

CONCLUSION 8

REFERENCES 10

Introduction
Biti's is a Vietnam-based company and a leading footwear producing company for more
than 30 years. Recently, the presence of company in local market is silent although the
industry competition becomes increasingly high. The company also has not refreshed its
brand identity.

To comprehend its market situation, this assignment is applying analysis of 5C’s, Porter’s
Five Forces and SWOT and thus recommending market segmentation and target market to
gain domestic market shares in medium term.

Background
This assessment on Biti’s brand is not a marketing plan, which contains tactical guidelines
for the marketing program and financial allocations over the planning period (Kotler 2016).
With application of principles of marketing theory related to strategic and tactical marketing
planning, the assessment analyses market situation of the brand. It also provides market
segmentation, and recommend a target market for the brand to compete with its rival more
effectively.

Market Analysis
5C’s analysis
Steenburgh and Avery state 5C’s analysis lists out critical 5 dimensions such as customers,
context, company, collaborators/complementers and competitors allowing Biti’s to
understand itself, their customers, external players and forces that affect the business.

Analysing customers
Biti’s sells footwear to kids, adults and older consumers and both female and male. Exhibit 1
shows the company’s customers and their corresponding needs.

Exhibit 1. Customers and corresponding needs

Customer Customer need

Kids Their parents need soft sole, safety, good
quality and design
Teenager Need fashion and shiny design

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 Adults Need new design recognising customers’
own identity. They also follow influencing
trends
Older consumers – white collar Simple, comfortable and elegant design,
darker colour
Older consumers – blue collar Affordable, high quality, and ability to work
Senior citizens Classic, convenient and slight low colour
Having health care features such as
reflexology sole
In addition to understanding customers’ needs, Biti’s analyses customer decision- making
process (Professional Academy n.d.). Firstly, it analyses consumers’ Problem Recognition.
Parents buy new shoes for their kids/teenagers before school terms/festive seasons begin.
Vietnamese people change new shoes to welcome Tet holidays. Biti’s could launch
marketing campaign to introduce new products/store locations/internet retailing to
consumers before such events.

Secondly, Information Search explains customers, requiring information about the products,
obtain information through commercial, personal, public and experiential sources. Biti’s
engages consultant to survey which sources customers prefer, to develops an effective
marketing campaign through the preferred sources. Biti’s uses social media to disseminate
information.

Next stage is Evaluation of Alternatives. The company should know factors influencing the
buying by customers such as quality, price, cognition/emotion or any other. It helps
differentiate Biti’s products from its competitors.

Fourthly, consumers decide to make a Purchase Decision. Biti’s should make selling channels
available to customers. Kids prefer their parents to take to store and buy products whereas
teenagers wish to buy with friends. Others buy from internet retailers.

Lastly, Biti’s needs to care about Post Purchase Evaluation. If consumers satisfy with
purchased products, they will become Biti’s ambassador to influence other potential
customers in stage 2.

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Analysing the Context
The context affects Biti’s whether it exercises either no or limited control over (Corporate
Financial Institute n.d.). It impacts the industry rather than Biti’s standalone. Favourable
changes in the context do not translate into its competitive advantage. Biti’s should update
the changes of the context and adopt/adjust the products if required.

Demographic environment. World Bank (2019) states Vietnam has 75% of the population
under 35 years old. The middle class accounted for 13% of the population, but is expected
to increase to 26% by 2026. Biti’s could enter into the middle class where there is no tough
competition.

Economic environment. The economy shows fundamental strength. GDP growth rate
accelerated from 6.8% to 7.1% in 2017-2018. It is predicted GDP growth rate moderates to
6.6% in 2019 and will stay around 6.5% in medium term. The domestic consumption
remains robust. These statistical and predicting economy data indicatively support for
growth of the company sales if appropriate business plan in place.

Socio-cultural environment. Biti’s has longstanding presence in the country to understand

social and cultural factors.

Political/legal environment. No special regulatory framework requires Biti’s to focus on.

Technological environment. The company should review the current production technology
to answer the question whether it is automated/advanced to compatible with new raw
material required for footwear production. Biti’s should use social network to promote the
products and internet retailing to push sales value.

Natural environment. It clearly understands the natural environment and knows how to
tailor its products to best suit with the domestic consumers.

Analysis of the company

Biti’s offers high quality products to national consumers. With moderate designs, it
reasonably prices products and successfully sells them to domestic customers. This business
model generated brand identity and made Biti’s as a leader in Vietnamese footwear
industry.

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In addition, its slogan “Tender care for Vietnamese feet” effectively attracts consumers
demonstrating support for the national products.

However, lacking of new designs of footwear and marketing campaign was making the
company passive in the market. It potentially damages the company as the consumers may
disremember its brand. It becomes serious business issues if there are more foreign brands
coming to the market. Consequently, Biti’s needs to understand the customers’ needs,
segment the market, select target market and redesign products to satisfy the targeted
market. It also needs to refresh the brand and make it attractive to the customers.

Collaborator and complementers analysis

Biti’s has a longstanding relationship with suppliers providing stable sources of input
materials. Its distribution network has more than 2,300 agent stores across the country, 4
commercial centres located in main regions. As a result, the collaborator analysis should
support for traditional business model requiring physical stores to sell the products. Given
the development of internet retailing, Biti’s needs to collaborate with internet retailers to
promote this selling channel.

In addition, the agent store management such as store design, customer care and so on,
may not be at standards required by the company. Biti’s should review the agent store
management and adjust to satisfy increasing demand by the customers.

Biti’s has not started any relationship with complementers. It should explore this
relationship to promote sales as footwear is commonly sold together with apparel.

Competitors analysis
Although Biti’s is a market leader, there is always potential rivals in the industry.
Longstanding rivals are unbranded goods and counterfeits diminishing the sales values as
they have more varied designs.

Currently, Biti’s leaves behind the second biggest market leader such as Adidas with a big
gap. The run will be shortened if it does not pay attention to redesign the products and
refresh its brand.

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Using Porter’s Five Forces to understand industry competitiveness
Porter’s Five Forces identifies areas of strengths, improves weaknesses and avoids mistakes
(CGMA, 2013) by analysis of five forces such as industry competitors, potential entrants,
availability of substitutes, buyer power and supplier power.

As commented in 5C’s analysis, there are many unbranded and counterfeits directly
competing in the industry. Furthermore, foreign brands are coming to the local market.
Both show a large number of Industry Competitors in the market where Biti’s is also
operating in.

Due to high competition, the product pricing would be sensitive. By offering products with
reasonable prices and high quality, it is a critical factor contributing to success of the
company.

Potential entrants. Steenburgh and Avery (2010) state the local footwear market is
unattractive to companies not already participate in as new entrants into the market will
increase its competitiveness. It is helpful for Biti’s not compete larger number of
competitors and focus on competition amongst existing market participants.

Availability of substitutes. Biti’s needs to consider its pricing strategy due to huge availability
of product replacement. In addition, it also needs to differentiate its products to distinguish
from competitors’ products. Lastly, the company needs to spend marketing expenditures to
maintain its brand, products to consumers.

Buyer power. There are many footwear producers in the market. Buyers easily get the
products from them rather than Biti’s products. Buyers are also sensitive to pricing. All show
buyers have strong power over the company. Hence, Biti’s must maintain reasonable
pricing, give more values to buyers and take care of them.

Supplier power. The switching costs from one supplier to another is not high as the material
inputs for footwear production are common. Given a longstanding relationship with Bitis’
suppliers, supplier power should not be an issue to interrupt the company’s production.

SWOT analysis
Next step of situation analysis is to rearrange the analysis of 5C’s and Porter’s Five Forces
and put into a SWOT analysis following external environment and internal environment.

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SWOT analysis should identify critical factors affecting Biti’s to make profits and seek
attractive opportunities to take their advantages (Uses of SWOT analysis, 2017). Exhibit 2
shows the SWOT analysis of Biti’s.

Exhibit 2. Biti’s SWOT analysis

Strengths Weaknesses
- Brand reputation - Old design, less product categories and
- Customer loyalty limited selling channels
- Good quality, high public trust - Slow response to customers’ needs does
- Extensive distribution network not meet customer demand.
- High skilled labour - Undeveloped sub materials and
- Stable supply chain supporting industries
- No effective public relation strategy
Opportunities Threats
- Strong support from society for - Unbranded products and counterfeits
Vietnamese goods continued to take market share away from
- Not very high competition in segment of legal apparel and footwear
average disposal income consumers - More international brands are penetrating
in the country

Market Segmentation
Geographic segmentation
Bitis’ domestic sales values contributed to 70% of total sales values. The company also has a
long history of operation in the local markets providing valuable knowledge of the domestic
segment. Hence, it results high ability of satisfying the demands of the domestic consumers.

As analysis above, the domestic market is predicted to reach USD3.2 billion in 2023 that
offers opportunities for the company to earn the money.

Demographic segmentation
Kids: Parents buy shoes for their kids and care about designs, soft soles, safety, good quality
and comfortability when using the products.

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Teenagers: Teenagers have their own interests and self-awareness. Parents often buy
following their interests. Their hobby is easily affected by mass media.

Adults: they mostly buy and pay for products themselves. Vietnamese adults have fashion
trends and want to show their own identity. They are attracted by the new and unique
designs. They like differentiated products corresponding to their tastes. Some follow
emerging trends.

Older consumers – white collar: They expect simple design and lightly darker colour of the
products. The products must offer the users with comfortability and flexibility. Ultimately,
the shoes should be fashion but still elegant.

Older consumers – blue collar: these consumers are often less interested in product design
and appearance. They require affordable, high quality and durable footwear. Especially,
products are suitable for working conditions.

Senior citizens: They buy classic and convenient products in light colours. They prefer to
health care features such as reflexology soles.

Target Market Recommendation/s

Biti's offers varied categories of footwear. Their prices are ranging from USD2 to about
USD50. Given current product mix and pricing strategy, it is suggested Biti’s should reach
the domestic customers under 35 years old which are from kids to adults. The country is
experiencing the increase in middle class till 2026 providing with large opportunities for the
company to gain market shares of the suggesting target markets. Detailed target market
recommendations are provided as below.

Kids
The kid population is 23.55% of the country population, 96 million. Given their parents buy
footwear for them, it is suggested to add the golden population of 45.56% to result in a
larger market size of this segment. Furthermore, their parents are ready to afford expensive
products with good quality to offer comfort. Hence, the market size of kids is measurable
and substantial.

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Biti’s needs to develop a separate marketing campaign to attract these buyers. As an
illustration, the company should collaborate with Walt Disney to borrow cartoon characters
and advertise its footwear.

Teenagers
This target market accounts for 16.23% of the total population. The market size becomes
larger if teenagers will buy more than one product. Similar to the kid target market, their
parents buy for them although purchase decision is made by themselves.

These customers are affected by social network. Biti’s would create a trend to attract and
influence these teenagers’ buying behaviours.

In addition, the company may need complementers who sell products which are
complementary to the footwear Biti’s sells. As a result, teenagers could buy apparel and
footwear at same time.

Adults
As golden population of the country, the target market of adults is largest size accounted for
45.56%. Gaining market share of this segment is critical factor to Biti’s success whatsoever.
If parents buy the products for themselves, there will be high probability of buying for their
kids and teenagers. Biti’s should well prepare for a marketing campaign involving influencers
to attract buying decision.

From the result, market segmentation and target market are recommended. It is suggested
to focus on the domestic customers aging under 35 years from kids to adults. With these
target market, it is believed Biti’s will gain market share to maintain its position of a market
leader.

These consumers also use internet to buy products they demand. Biti’s should collaborate
with internet retailer to introduce its products to them.

Conclusion
To summarise, the analysis application of 5C’s, Porter’s Five Forces and SWOT to Biti’s brand
provides market situation analysis on comprehensive facets from customers’ needs and
customers’ decision-making process, context, company, collaborators and complementers,
and competitors to competitive dynamics of the footwear industry. The analysis of these

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facets is eventually rearranged in SWOT to provide the snapshot of current situation the
company is operating in.

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References
Biti’s, 2014. Sales analysis. Unpublished confidential document

CGMA, 2013, Porter’s Five Forces of Competitive Position Analysis, viewed 4 August 2019,
https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html

Corporate Finance Institute n.d., 5C Analysis, viewed 4 August 2019,

https://corporatefinanceinstitute.com/resources/knowledge/strategy/5c-analysis-
marketing/

Euromonitor International, March 2019, Passport: Apparel and Footwear in Vietnam

Kotler, P & Keller, KL 2016, Marketing management, Global edition, 15th edn, Pearson
Education, Harlow, UK

Professional Academy n.d., Marketing theories – explaining the consumer decision making
process, viewed 4 August 2019, https://www.professionalacademy.com/blogs-and-
advice/marketing-theories---explaining-the-consumer-decision-making-process

Steenburgh, T & Avery, J 2010, 'Marketing analysis toolkit: Situation analysis', Harvard
Business Review, February 4, Harvard Business School Publishing, Boston, MA

The World Bank, 2019, Vietnam: Overview, Context, viewed 4 August 2019,
https://www.worldbank.org/en/country/vietnam/overview#1

Uses of SWOT analysis, 2017, viewed 4 August 2019,

https://www.business.qld.gov.au/starting-business/planning/market-customer-
research/swot-analysis/uses

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