I.

Executive Summary

Minh Phat 2 or Mifaco is a big company in manufacturing and exporting furniture

products to international market. Recently, due to many change in international market because

of inflation and exchanges rate, Mifaco has developed a new marketing plan focus on Hong

Kong, a big furniture market in the world and also a trading agency company where many

products are re-exported to other countries.

II. Situation Analysis

2.1 Company Analysis:

* Major goals:

- Establish in 2003, our goal is become the best furniture manufacture in Vietnam. Like

other furniture company, Mifaco want to increase export turn – over of furniture product.

- With more than 3 factory and 1000 workers, we want to develop our business in more and

more countries around the world. And in this marketing analysis, we chose Hong Kong to

increase our market share and use Hong Kong as a trading agency principally to re-export to

another country.

*Corporate culture:

- Introduction:

Establish in 2003, Mifaco is located in Binh Duong Province. This part of Vietnam, Binh

Duong, is well known for its Furniture industry. Our factory takes up 70,000 square meters of

space. This includes office space, workshops, showroom and garden. Our core business is indoor

Funiture, we always follow the trend of the industry. That is why our products look fresh and

updated.

Company name Minh Phat 2 Company Limited

Brand MIFACO
Address Binh Phuoc A Hamlet, Binh Chuan Commune, Thuan An Dist., Binh Duong

province
Telephone +84 (065) 3711136 – 3788339

Fax +84 (065)3711135

Email info@mifaco.com.vn ; mifaco@hcm.vnn.vn

Website www.mifaco.com.vn
Main products Furniture Products

* Dinning

* Occasional

* Cabinet and Shelf

* Stool

Office and school furniture

Legal status Company Limited

- Mission:

“Our people are striking for the highest level of customer satisfaction

Provide high quality products at the lowest price possible”

- Vision:

“Be the best furniture manufacture in Vietnam and,

Be an excellent distributor for all furniture company in the world.”

- Company structure:
 *. Strengths and weaknesses:

Strengths - One of the biggest furniture manufacture in Vietnam with more than 60,000.00

m2 land Area and more than 1000 workers, 4 factories located in Binh Duong.

- Diversity of wood products

- Large suppliers of raw materials with high quality

- 8 years’ experience in cooperate with more than 10 countries around the world.

- Be quality certified.
Weaknesse - With a large scale organization, Mifaco has to create a power control tool in

s production and in management.

- The feature of Handicraft and furniture are we have to change and improve our

design frequently. It make us have to registry every models and design for each

products, that lead to lose in time and cost.

- Have no designed break through

- No specialization of domestic companies

 *. Market share:

2.2. Customer Analysis:

Our product can be separate in 2 types: housing furniture and Office or school furniture

Main reasons why Mifaco chose Hong Kong to develop Mifaco’s business are:

- Serve the individual who want to buy quality furniture products with a reasonable price
 - Serve the high demands of hotel and apartment which are increasing in Hong Kong.

While office and home furniture will continue to dominate the furniture market, demand for hotel

and restaurant furniture is emerging. With the government's plan to pump HK$18 billion into the

tourist industry over the next five years, it is anticipated that there will be a high demand for more

new hotels and restaurants in the future

- Hong Kong can be a trading agency principally responsible for high value-added

services such as management, finance, accounting and marketing, production plants have been set

up on the Vietnam to exploit the advantage of lower operation cost and abundant land supply

there.

Mifaco’s products are produced by quality resources but price is lower than other

countries due to the increasing of foreign currencies value. So customers from medium to higher

earning can buy our products.

2.3. Competitor Analysis

In order to serve the various needs in the local market, a wide range of furniture products

are imported from different countries to Hong Kong each year.

It’s very hard for us to evaluate about competitor in Hong Kong furniture industry, there

are about 1980 establishments operating as trading companies of furniture and fixture in the

Hong Kong. Another 507 establishments are classified as manufacturers of furniture and fixture

(metal & non-metal) as of September 2007.The numbers of establishments of wholesalers and

retailers of furniture and fixture as of June 2008 are 465 and 1863 respectively. Around 90% of

these establishments are small and medium enterprises.

 From this table, we can see that China and Italy are two main supply markets to Hong

Kong. China has advantage about low cost and traditional styles so their market is low – pricing

segment, Italy has advantages about excellent design and with high price, Italy focus on High –

pricing segment.

As people know that China has a strong furniture industry because of the profuse natural

resources, but recently, China has been increased their currency value, and it make Chine lose

some furniture market share. To take advantage of the situation, Vietnam has been cooperated

with China’ losing markets and Hong Kong is the first choice. As a new brand in Hong Kong

market, but Mifaco has many advantages from design, low price, and support services which are

presented in other part of this Marketing Plan analysis.

It’s hard to compete with quality and design of Italy product. Instead of compete with

Italy products, Mifaco will focus on middle – end and lower – end market.

2.4. Collaborators:

To successfully penetrate into intended market, we need to carefully consider

many issues and factors such as: different culture, operational cost, capital requirement, high risk,

competiton, etc. Because of being the new entrant in Hong Kong market, the most concern of us
is to find the most profitability way to get out products to potential customers. That is the fastest

approach to enter new market and expand the market share. There are several methods of foreign

market entry including exporting, licensing, franchising, joint ventures and wholly owned

subsidiary. Based on our strategic objectives, competence, business scale, experiences in

furniture field and knowledge of target market’s penetration condition, we choose to open new

subsidiary in Hong Kong.

Wholly owned subsidiary in foreign country may seems difficult for company at

the first look, i.e. the hugh amount of capital to be invested, the high risk of failure, therefore that

method brings to our company a lot of advantages and benefit. Due to the planning of opening

new branch in Hong Kong, we prefer to operate our own business to directly delivery goods to

customers than to corporate with local firms. We are able to control and adjust strategic

objectives and business activities according to each point of time. For instance, the majority

products of Hong Kong’s furniture market are imported from China, but because of the rising of

the Yuan these days, Hong Kong people look for quality products with lower price. This is the

time for us to flexibly adjust price due to customers need in order to obtain more market share

and get more potential customers.

Because of Hong Kong’s encouraging tourism policy, more and more hotels and

houses are built to meet customer needs. Since the 2007 inflation, there is a trend of sparingly

consuming and buying lower price product. Catching those demand, Mifaco decided to join in

Hong Kong furniture market to satisfy local customers and find a certain position here.

Furthermore, this place is also an ideal intermediary agent to reexport goods to other markets

with preferential rates. So, Mifaco chose Hong Kong to develop brand name in order to become

famouse in the world furniture market and wholly owned a subsidiary is the best choice to reach

our objectives. Opening a new business in foreign country also helps Mifaco Company to have
ability to engage in global strategic coordination, have ability to manage and run business

activities correctly to the way we want and protect our trade secret as well as technology.

2.5. SWOT Analysis

Strengths: Weaknesses:

- Mifaco is a big furniture manufacture in - New entrant in Hong Kong market

Vietnam and gain a large market share in - Focus on Foreign market so Mifaco lost

international market, especially in US. their market share in domestic market

- Availability of quality timber products: Mifaco - Although focus on house furniture but

has the biggest comparative advantage in Mifaco produce only furniture for dining

manufacture of wood furniture, as well as veneer room and occasional. In the future, Mifaco

manufacture, when compared to its major may want to develop more about living room

competition or kitchen …

- Lower labour costs than China and foreign - Design is weak, can’t compete with foreign

countries, highly skilled, loyal employees, with countries.

years of experience in top quality furniture

production

- Tradition in furniture manufacture: long-time

experience in high-quality furniture manufacture

both in large companies and small handcrafts.

- Competitive price and punctual delivery; fast

delivery;
Opportunities Threats

- Inflation is increasing in many countries - Compete with older brands in Hong Kong

and exchange rate of a lot of currency is raising - Have to improve design frequently to catch

compare to Vietnam, that’s why more and more the trend

furniture company come to Vietnam because of - Resources of woods in Vietnam is

quality and cheap product. decreasing by uncontrolled deforesting.

- Vietnam has joint in WTO and it lead to support

advantage conditions for business to export

products to foreign markets more smoothly.

III. Market Segmentation

3.1. Description:

In term of market segment, the furniture industry in Hong Kong is generally divided into

3 main categories: High –end market, Middle – end market and lower – end market.

High – end The higher price segment, the market is dominated by overseas imports and

market high quality Italian products have established a firm stand in this segment. The

consumers are from the middle to upper income group and are willing to pay a

higher price for a desired piece of furniture. Products in this category are

usually of premium quality and designs, with exquisite craftsmanship. Most

hotels, service apartments and interior designers/architect would source from

this category
Middle – end Due to the vast variety of products offered, competition in the middle-end

market market is strong; nevertheless, there are ample opportunities for Italian

products. Local consumers have long associated Italian imports with quality

products, and they would prefer to purchase European products instead of

Asian ones if the price is similar.

Lower – end Lower price market is represented by poor to medium quality products that are

market purchased based on their price and functions rather than their designs or

quality. The operating tactic for importers in this category is to increase sales

volume by decreasing the unit price in order to maintain a narrow profit margin.
 Products in this segment are mainly from China and Asian countries due to

their lower production and transportation cost.

Mifaco is a new entrant in Hong Kong furniture market, so Mifaco choose low – end and

middle – end market to develop Mifaco’s products. The economic crisis from 2007 to now lead

the inflation and people tend to save their money. And Hong Kong can avoid from this trend.

Catch this opportunity, Mifaco focus on produce high quality but sell reasonable price for

export market.

3.2. Percent of sales:

* Company’s top products:

Product: Dinning sets Occasional Other

Company’s business($) 75% 20% 5%

3.3. What the customers want

Customer demands are more and more diversity, they claim not only in quality but also in

excellent design. Especially in furniture decor, as in Cultural analysis we discussed, people in

Hong Kong tend to enjoy their living at home. That’s why they will spend their lot of money in

décor a best living environment.

We can separate what our customer needs in 2 types:

* Design:

As for the direction of product trend, minimalism will continue to be big this year for

home furniture, office furniture and lighting goods. The young, the educated, or consumers from

the middle-end market in general in Hong Kong would prefer sleek and simple designs with a

nostalgic touch. It can attract a group of Hong Kong new generation who like to show off their

characters and tastes by their home furniture. On the other hand, furniture and lighting goods that

are more traditional and classical styles are still in popular demand as well.
 The largest category of production in Hong Kong is wooden furniture, which can be

divided into two sub-categories - traditional Chinese-style and contemporary Western-style.

* Quality:

Contrary to the solid wood furniture in the higher end market, most lower-end market

goods are made with fibreboard products.

3.4. How the customers use product

Although furniture is not a short – age product to replace in a short time, Hong Kong is

developing and more and more apartment block and flat have been built to serve people’s need

about house. Currently, there are a total of over 33,000 units in 20 estates, housing more than

100,000 tenants. With a high demands about housing, we believe that our furniture products can

develop in Hong Kong.

Since local apartments in Hong Kong tend to be quite small, furniture, needs to be very

“smart” in design and versatile in functions in order to maximize the living space.

High storage capacity is another practical attribute that consumers consider when

choosing a piece of furniture.

Besides that, we choose Hong Kong as a middleman of advertising. We all know that,

Hong Kong is an international country with millions people come to this country every years to

travel, or for their business. So we can promote our products to the world market.

3.5. How to reach the target customers

We aim to bring in traditional and innovative products to enrich spiritual satisfaction in

lifestyle. We are providing a range of products from well selected products with high quality and

trendy design at reasonable prices.

IV. Alternative Marketing Strategies

 Organisations are faced with a number of strategy alternatives when deciding to enter

foreign markets.

To enter in Hong Kong furniture industry, Mifaco has analysed in many alternative

marketing strategies such as exporting, Contractual agreements, Strategic International Alliances,

Direct Foreign Investment and Ownership.

Because that Hong Kong is not only the furniture market with much demands but also

Mifaco can used Hong Kong as a trading agency to re-export products to another country.

Mifaco choose Ownership as alternative market strategy to join in Hong Kong market.

Opening a head office in Hong Kong can help Mifaco manage the opportunities and control all

activities related to order products, import directly from manufacture, selling direct to customers,

re-export to another country and do all activities related to advertising and promote brand nam

:Mifaco to international market. Although opening a ownership company take much cost, but it is

easy for Mifaco to manage using brand and selling. The advantages when setting up a new

wholly owned subsidiary in Hong Kong are:

- A wholly owned subsidiary reduces the risk of losing control over core competencies.

Mifaco can responsibilities for manage all activities in Hong Kong market, it can help Mifaco

promote brand in the best way and reduce the risk can happen with brand like fake product …

- Because Hong kong can be used as a trading agency to re – export. So a wholly owned

subsidiary gives Mifaco the tight control over operations in different countries that is necessary

for engaging in global strategic coordination.

V. Selected Marketing Strategy

Mifaco products can separate in 2 kinds of function are: first used for house décor and

second is used for office and school, with more than 100 kinds of model. However, to enter in
Hong Kong market, Mifaco focus on family furniture includes 2 kinds furniture is: Dinning sets

and Occasional furniture and market which Mifaco serve are medium – cost and lower – cost.

5.1. Product

Recently, people demand is increasing and they claim more and more about not only

quality but also excellent design. To compete with many furniture companies, Mifaco focus on

both production and design. With brand name: Mifaco, our products designed follow traditional

style, luxurious and different

Product: - Dinning sets: - Occasionals:

Describe - Make by Rubber and Pine Wood, - Make by Rubber and Pine Wood,

perfumed tree, fragrant wood perfumed tree, fragrant wood

Color: - Black, White, and traditional colour - Tradition colour of wood.

of wood

Design - Traditional styles follow Asian - Diversity styles and can include

- Western styles mirror

Brand Because Mifaco is a strong brand in export furniture products in many countries,

so we use Mifaco like a brand presented for our company in Hong Kong market.
Quality Mifaco owned more than 1000 worker and with 3 factories located in Binh

Duong. Our material input includes many kinds of quality woods. Main material

includes 75% Rubber wood, 10% MDF, 10% plywood, 5% others like

Mahogany, beech, White oak, etc.

Mifaco focus so much about Quality in product in control. To make sure the
 quality in material input and in control materials, Mifaco develop QC staff:

- Number of QC staff is 24, Divided in 2 teams:

+ Team 1: checking in line according to AQL standard level2

+ Team 2: Checking 100% finished goods and package

- 1 group for checking come in products.

Awards of Mifaco:

- Handicraft and Wood Industry Association of HCM(HAWA)

- Vietnam Chamber of Commerce and Industry

- 2008, 2009 Gold Award

- Trust 2006, 2007, 2008 & 2009

Packaging - Mifaco uses much equipment in packaging products.

In chain1: Hanging line. It is 950 meter length with 7 spray boots

In chain2: Hanging line. It is 750 meter length with 5 spray boots

In Pallet line: It’s for the table tops and big components

- All Mifaco products will be export from Sai Gon port. Every month, Mifaco

export more than 140 containers to many countries in the world.

5.2. Price

* Lower – cost pricing

Product Price
Dinning sets:

$420 - $1050
Occasional table: $235 - $666
 Because Vietnam have a large natural resources about woods and cheap labours, Mifaco

can competes with others company with lower cost of products. In this stage, we can say that

Mifaco uses penetration pricing to stimulate market growth and capture market share.

* Discounts:

Have not much discount if customer is an individual who want to buy product for their

house. But with a high demand of big quantity order of hotel or apartment, we can discount from

10% to 20% over total value.

* Payment terms and financing options:

Payment terms are flexible for paying through all kinds of payment such as: card or cash,

or through international bank to pay for importing.

5.3. Place

* Distribution:

- Located in Binh Duong province, Mifaco has advantages in distribution of raw input and

output to export.

- Wholesalers: Mifaco will open a head office in which large quantity of products is

sourced directly from manufacturers. The products are then sold to local retailers, contractors or

re-exported to other countries. This office is responsibility for all activities related to receive

order, import, management, sale, advertising and logistic.

 - Retailers: This is important for Mifaco to advertise products to customers, that’s why

Mifaco placed 4 furniture showrooms in 4 big commercial centres are: Times Square, Harbour

City, The Landmark and Pacific Place. Beside that home centres are also opened as main retail

channels for furniture. Although retailers usually import via agents and distributors, some stores

with stronger buying power would buy direct from the manufacturers.

- In addition, sales through specialized furniture markets like "furniture districts" and

"furniture streets" are getting popular in Asia, especially in the Chinese mainland, Taiwan and

Hong Kong. Some “furniture streets Mifaco is analysing to place the stores are:

+ Hollywood Road - located in Central, this street is known for antique and cool furniture.

+ Wong Nai Chung Road - located in Happy Valley next to the horse race track, there are

many designer furniture stores.

+ Queen's Road East in Wanchai - there're a number of furniture shops along the stretch

between Spring Garden Lane to Hennessy Road near Hopewell center, in which the revolving

restaurant is located.

- Besides that, low- and medium-end products are usually sold by local "hypermarkets".

So Mifaco can consider the cooperation to some hypermarkets in Hong Kong. The advantage of

these hypermarkets is that because the diversity in kinds of products, many people come here and

if they don’t buy our product, the main point is they can know about Mifaco products.

* Logistics, including transportation, warehousing, and order fulfilment: The feature of

furniture products is that it take too much space. So Mifaco can hire a big warehousing near

Hong Kong port to distributor these products.

5.4. Promotion

* Advertising:

Internet is one of the most effectively tool to advertise Mifaco products.

 * Public relations

* Promotional programs

* Budget; determine break-even point for any additional spending

* Projected results of the promotional programs

VI. Short & Long-Term Projections

The selected strategy's immediate effects, expected long-term results, and any special actions

required to achieve them. This section may include forecasts of revenues and expenses as well as

the results of a break-even analysis.

VII. Conclusion

Summarize all of the above.

VIII. Appendix