Packaging + Advertising: Selling Products in the EU

August 22, 2009

LookAtVietnam - If a Vietnamese business is well aware of the market, trade conditions and culture of an EU country, that business could sell a lot of product in the EU.

Mr.Chu owns a big chain of retail stores in Hungary (while we have no idea how many stores he has, each one is 300 – 1000 square meters in size) and 10,000 customers come to shop at these stores each day. Mr. Chu did say that inferior Vietnamese products such as food, clothing, home interior and luxury goods can be sold in the EU.

If Vietnamese products can not be sold in the EU market, it is not because of low quality. Mr. Chu affirmed that most of products in home industry, light industry and domestic consumer goods are guaranteed of quality for EU consumers. However, Vietnamese businesses have to comprehend the culture and history of EU countries to have effective strategy to approach.

With personal experiences, Mr. Chu thinks that Vietnamese products found hard to approach EU consumers because of poor packaging and faltering marketing strategy.

It is obvious to anyone who has seen the shelves full of goods in the EU that attractive packaging is the norm. When people see attractive and protective packaging, they feel that the product inside most likely is also well produced. Attractive packaging, which adapts to culture and history of the directed market will appeal consumers to purchase.

Mr. Chu said that he sells Trung Nguyen Coffee G7 in his stores, or at least it is for sale. Although the coffee tastes good enough and its relatively cheap, very few people choose to buy it. Meanwhile, Nestle Cafe, a product with a long tradition of quality, sells well. Mr. Chu, with his Vietnamese sensibilities, feels that the problem is the use of the number ’7’. He says that it makes EU people think of iron, steel, chemical substances or politics like ’G7 countries’ (in the old time), but at any rate they do not see it as a quality Vietnamese beverage.

One time Mr. Chu received some Vietnamese canned mushrooms. The producer wanted him to sell this product in the EU. The label was brown with mushroom-shaped black spots. He returned it at once, emailing the exporter that any food product in a label like that would never sell. Mushrooms in the marketplace in the EU are always white. If they are brown that means that they are ready for the garbage.

VIFON’s prepared noodle package mix, is another Vietnamese product and it does sell well in beef pork and chicken flavors. Mr. Chu has been selling it in his stores for more than 10 years. Mr. Chu believes that if VIFON cared to refine its marketing strategy, it could learn about European culture and sell more product.

It might, for example, create products for children (labels with cute figures and even a free toy), and perhaps include ginseng in the ingredients for elderly people. Or sell it in a large, family-sized packages (with a picture of a happy family gathered around a hot bowl of noodles).

While the pine tree used to be a popular logo representing longevity and solidity in the West, it has become quite outdated. Presently brands such as L’oreal Paris, Schwarzkopt and Mercedes Benz are making use of bamboo in their advertising, and this has come to represent resilience, strength and international appeal. Mr. Chu thinks that EU consumers are ready to buy ’bamboo noodles’. Perhaps. Companies do make design changes to assert to consumers that the products are always improved and developed in quality, quantity and full of vitality.

There has been no methodical or effective marketing strategy by Vietnamese companies with regards to exports to the EU. Because their market research is poor or non-existent, many businesses sit on their hands, afraid after hearing stories of past failures.

The norm in the EU marketplace is for all producers to spend 10-30 percent of their sales earnings on marketing. They might do TV ads, flyers, posters, magazine ads, in-store advertising, promotion giveaways or a number of other things. Even having a person standing on the street or in front of a store works well relative to the cost involved. Each and every thing that is done to market a product takes that product into the consumers’ eyes and that makes it more likely that people will try it, and like it. And that’s when sales can begin to take off.

Currently Vietnamese products that are being sold in the EU are cheaper than similar products produced locally. Many Vietnamese businesses want to try to sell at a low price to increase sales volume.

While this could be effective, it could also happen that people will believe that the cheaper product is of lower quality and so they won’t buy it. A huge amount of VIFON noodles have been sold in Mr. Chu’s stores and it is cheap compared to a comparable local product. Mr. Chu is not so restricted when he sells Vietnamese products.

In fact, he raised the price of VIFON noodles by 10 percent – which could severely hurt sales – to, as he says, get money to spend on advertising. Mr. Chu said that he was justified in increasing the price because the selling price is still not as high as comparable products and anyway EU people don’t care about such a small amount of money. And, he makes the same amount on the sale of this brand because that 10 percent increase goes towards advertising. Mr. Chu has taken it upon himself to carry out a marketing strategy for VIFON noodles, and he believes that it is benefiting VIFON.



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