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Florasis Market Analysis

Executive Summary

The beauty and cosmetics industry is one that is dynamic in its own self. This work explores Vietnam’s market space and its suitability for Florasis, a beauty products company. The analysis presents Vietnam as an ideal investment destination due to friendly policies and a robustly growing economy. In relation to the beauty industry, its is established that Vietnam has a different sociocultural setting which in turn affects Florasis since it produces products based on the Chinese culture. However, the recommended positioning strategy seems to address the issue should its implementation be done.

Florasis is faced with the sociocultural barrier when breaking into Vietnamese market. This is because Vietnam’s culture operates within Buddhism’s wavelength thereby determining the type of beauty products to be used. Additionally, some of Vietnam’s citizens have adopted the western culture. This means that they have a different preference when it comes to the use of beauty products. The barrier comes out as a great hindrance to Florasis’ success in Vietnam, despite of the good trading and investment policies.

Vietnam as a country is committed towards ensuring a healthy business environment is created. This is because business revenues contribute to a great chunk of the national GDP. As such, this report proposes a full adoption of the hybrid culture-based positioning strategy. This is because the strategy accommodates different cultures and would encourage Florasis to develop products that exhibit features relatable in all cultures. Such a move will ensure that Florasis does not lose the home customer base while at the same time gaining footage within the Vietnamese market. Additionally, the strategy will boost Vietnam’s image and economic agenda, bringing more foreign investors into the nation and eventually contributing to the growth of the economy.

1. Introduction

The Florasis brand was launched in Hangzhou, China, on March 8, 2017. Hua Xizi, which means “make-up with flowers” in Chinese, is the name of the brand. They incorporate flower components in their cosmetics. There was an ancient Chinese beauty who was given the honorary name “Xizi.” With the aid of this Chinese cosmetics company, Chinese ladies aim to achieve Xizi-like beauty regardless of their make-up techniques. ‘Flora’ is the goddess of flowers in Chinese mythology, and Florasis, the company’s English name, has a similar connotation.

The Florasis brand sells products encompassing both the traditional and modern characteristics (Florasis, 2021). For this reason, the brand has the potential to make a kill in the international market. In the quest to establish dominance, the company intends to tap the Vietnamese market. This is a good move due to the free trade agreement between the Asian nations for which both Vietnam and China are part. This means that the company will have a fairly easy task in getting into Vietnamese market. In the recent past, Vietnam has experienced a tremendous growth in her economy, with the GDP hitting USD 2800 in 2020 (World Bank, 2021). The rise in purchase power, coupled by the Vietnamese culture and love for traditional beauty products, Huaxizi has the potential to break into the market.

2. Florasis Pest Analysis

Before starting a business, it’s always advisable to consider several factors that might affect the business performance, especially its market. For instance, both the external and internal environment plays an essential role in the process of development and growth of the company (Wirtz and Lovelock, 2021). Therefore, both internal and external factors of growth must be considered in company growth.

2.1 Political factors

Political goodwill plays a crucial role in the attraction of investors as well as the development of businesses (Elango & Thansupatpu, 2020). In 2017, Vietnam joined the Word Trade Organization. This was a step in promoting the economic development of the country and boosting the social life of the citizens. In addition, the step opened Vietnam’s engagement with other nations through the Foreign Direct Investment policy. This enabled foreign companies to have an easy task in joining and investing in the Vietnamese market space (Olivié & Steinberg, 2014). The facilitation thus provided a better avenue for Florasis to explore the Vietnamese market with ease. Increased investments are bound to propel Vietnam’s agenda of gaining foot into the global economy, a key motivation into joining the WTO.

2.2 Economic factors

Vietnam’s economy has been on an exponential growth in the recent times. This is evident in its resilience even in the time the world has been dealing with the Covid-19 pandemic, a period where Vietnam has experienced a 2.9% increase in its growth-rate (Dabla-Norris & Zhang, 2021). The consistent growth is due to Vietnam’s readiness to adopt the most current technological innovations for use in the businesses. The economic environment is thus one that is friendly to investments and is likely to promote their growth. This status presents Vietnam as an ideal investment destination for Florasis due to the fact that the company has readily embraced technology in its business operations. Additionally, Florasis operates in an industry that harbors a great portion of revenue. Its entry into the Vietnamese market will thus be a boost into the country’s economic growth.

2.3 Social factors

The first macro-environment factor is the sociocultural environment which entirely assesses the social and cultural values where the company chooses to market its products. The Florasis company aims at exploring Vietnam’s market, a country with the fastest growing economy in the world. With the country depicting civilization and women always considered by their beauty throughout its culture, women always try beauty products to enhance their beauty (Elango and Thansupatpu, 2020). These practices help them increase their market, with the company offering a wide range of beauty products meant to meet each consumer’s expectations.

The sociocultural setting of Vietnam resembles that of China. The social setting comprises communal units, with the males being seen as superior. Additionally, the units provide an avenue for the implementation of various cultural traditions and observance of rituals. This means that the community adorns specific attires and beauty products during such occasions. Even though the country has experienced western influence, not much has changed since the communal aspects are evident in the implementation of free market policies. The current Vietnamese sociocultural setting thus exhibits a fused concept of the social realism of the communist settings and the capitalistic systems of the western world.

With the Vietnamese culture embracing its traditional rituals in most cases, such as dressing and socializing, the Vietnamese women are likely to consider using traditional natural products to enhance their beauty. As such, the culture of the economy of Vietnam plays a significant role in the success of the business (Wirtz and Lovelock, 2021).

2.4 Technological factors

Vietnam has been known to embrace the use of technology to a great extent in the recent past. This is evident in the increasing number of ecommerce sites in the country. The advancement has been of importance in the economic growth since most individuals have opted to fully utilize online shops for convenience. With nearly 15% of Vietnam’s 2020 revenue being projected to have come from ecommerce revenue, there is no other better time to evaluate the great impact technology has had in the business environment. Vietnam has the 28th largest ecommerce market in the world (Nguyen, 2021). This means that the number of online shoppers is enormous and likely to be matching the businesses that have been put up. However, it is projected that the figures are likely to soar up. The increase thus calls for more investments into the domain as well as improvements on the technological infrastructure to accommodate the rise. Additionally, more businesses should join the revolution. This will ensure that shoppers are able to find all their necessities at the touch of a button. The ultimate end of all the implementations is likely to be an improvement of Vietnam’s economy and the social status of her citizens.

3. Target market selection and consumer analysis

The Vietnamese citizens have a rich culture, even though it is based on religion. This means that individuals make use of beauty products to a great extent. As such, Florasis has the potential of satisfying this given market owing to the fact that its products feature a cultural aspect (Graham and Kennedy, 2021). Vietnam thus comes out as one of the best targets for Florasis’ expansion.

By joining the Vietnamese market, Florasis tackles the primary concern of market selection. The company thus focuses on identifying its target within this new niche. Since a good number of Vietnam has adopted the western culture, Florasis focuses on the individuals who still adhere to the cultural norms. Additionally, the company has a greater client base within those who practice a fusion of the Vietnam culture and that of the western countries (Vaid et al., 2020). Surprisingly, the market is still considerably wide and worth the investment. The company therefore focuses on this set of consumers to market its product.

It is common that in every society products are utilized based on occasions. However, the largest consumers of beauty products are the females. This, therefore, becomes the primary market of exploration for Florasis. The market is merely a duplication fo the domain the company is comprehensively explored in China. As such, the company must focus on coming up with products that would be appealing to the females, in line with the individual’s professions and cultural practices. Having products that allude to the cultural traditions comes out as a great boost to the company and is thus likely to satisfy the females due to their love for unique and elegant products.

3.2 Characteristics of the targeted group

Florasis focuses on Vietnamese women as the target market. Most millennial women place a high importance on beauty and prefer to use natural products. Additionally, they tend to emulate what their preferred media personalities do. These, coupled with the desire for social validation, come out as the greatest motivations that drive them to obtain and use beauty products (Vaid et al., 2020). Florasis being a beauty products company producing using natural elements therefore stands out, having successfully identified a good niche.

Women tend to view the use of beauty products as a source of happiness. According to Nancy Ann Rudd, women prefer beauty products because they make them feel happy, pretty, and youthful (Rudd, 1997). It is this attitude that makes them a preferred set of group when it comes to Florasis’ products. This is because they are bound to use the products provided they are made of natural materials. The preference places a burden on Florasis to be careful with the selection of materials and to also come up with creative designs to fully cater for the customer base.

Lastly, the target group lives a lifestyle adorned with numerous and diverse cultural practices. The Buddhists celebrate a number of festivals. This calls for the availability of different designs of the beauty products that would suite each occasion. The women’s constant need for perfection therefore drives the niche. For this purpose, Florasis must invest in the design of numerous creative products that would satisfy the customers and eventually be able to fully tap the Vietnamese market environment.

4. Culture-based positioning strategy options

4.1 Evaluation of different positioning strategic choices

The Global Consumer Culture Positioning strategy aims at aligning the consumers’ needs to the global society. Having gotten into a period of rapid economic growth, Vietnam has constantly sought to be part to the global space (Bhattacharya & Anand, 2020). This has been evident through her involvement with the World Trade Organization and the investment policies that have consistently enticed foreign investors. These measures have thus succeeded in grounding the GCCP strategy into the Vietnamese market space.

FCCP on the other hand focuses on creating a representation of an oversees culture in a market. The Vietnamese culture is primarily based on the Buddhist religion. This mans that a number of products within Vietnam’s market space are likely to have a touch of the country’s culture. To address this, Vietnam’s administration has allowed business entities from other nations and cultures to invest in its market thereby bringing with them the home cultures (Schuh et al., 2020). This strategy has helped to make Vietnamese market to be one that is culturally diverse and promotive of global businesses.

Every country strives to promote its culture to avoid cases of raising a generation that does not understand its roots. It is for this reason that Vietnam communities opted to adopt a fusion of their culture and that of western nations. However, to implement the Local Consumer Culture Positioning strategy, Vietnam has promoted the businesses that have adopted the cultural elements in their practices (Diaz Ruiz & Kjellberg, 2020). Case in study is the Chinese company, Florasis. The company specializes in beauty products made of materials of the Chinese cultural origin. Since the two countries have an almost similar tradition, the company has helped to bring an LCCP strategic balance into the Vietnamese market.

The hybrid culture-based positioning strategy is one of the best implementations in the Vietnamese market. This strategy is a fusion of all the market positioning strategies, combining it with a touch of the different cultures to bring about balance into the market space. Vietnam, having joined the WTO, accepted investors from all over the world in a bid to boost its position in the global index. The diversity thus creates a rich hybrid culture-based position for the businesses to thrive.

4.2.1 Marketing mix elements

Florasis has established dominance as the best beauty products company in China. By expanding into Vietnam, the company is bound to make adjustments in its operations. The changes are majorly on the pricing of its products. This comes out as a compulsory strategic management and a must-implement feature of the marketing mix. For the company to fully dominate the Vietnamese market, it must take into consideration the fact that Vietnam’s economy is lower than that of China, despite the fact that it is experiencing some rapid growth. For this reason, Florasis must re-strategize and re-evaluate its allocations in terms of production and marketing costs. This will help the company to come up with a proper pricing framework that will assure it of a good return on investment while satisfying the Vietnamese customer base.

4.2.2 Potential implication

The positioning strategies have had a tremendous impact on Florasis’ business. The company has comprehensively adopted the 4ps of the marketing mix thereby placing it at a better position in the market. Even though product pricing may be different due to the difference in locations, the company has taken into consideration the economic status of its clients and tailored the products as required. Having customer satisfaction as a priority is a crucial aspect in business (Schuh et al., 2020), a concept that Florasis has fully understood.

The company has addressed the positioning aspect of the business by embracing the use of technology at an expansive level. Florasis has a good online presence and allows customers to view and order products online thereby tapping into the international market. The primary goal of Florasis is to create a good image of the company in the external market and the local market (Florasis, 2021). Based on the high marketing standards, the company has managed to get to the internal market segments over the past. Therefore, good access to the products has increased their value and customer potential in the market.

5. Theories underlying the creative design

Creative designs are made based on different themes and the informational stimuli to be passed (Diaz Ruiz & Kjellberg, 2020). Florasis being a beauty company, designs products for all occasions. In this paper, the design presented depicts a celebrative event. To be precise, the creative work is suited for the christmass celebrations and depicts a christmass tree’s imagery. In essence, being in possession of the design is likely to arouse feelings of excitement to the consumer. In addition, the materials used for the design exhibit the cultural sophistication associated with Chinese culture and is adorned with slight touches of modernity. The probable idea behind the design is thus to bring a feeling of content during the celebrations. The use of a great number of cultural materials conclusively addresses Florasis’ objective to remain grounded in the Chinese cultural position, preserving all the details (Kanlı, 2021). The use of a few modern materials and Buddhist-like decorative elements makes the design to be one that is acceptable in the Vietnamese market since her culture is majorly centered on the Buddhist religion (Dibb, 2016). As such, the company succeeds in exploring wider markets while at the same time displaying unique and creative designs.

Florasis company utilizes the hybrid culture-based positioning strategy. This strategy allows the company to adopt several concepts from the various positioning strategies thereby maximizing the brand’s success (Alden et al., 1999). The positioning strategy has provided the company with the opportunity to understand the basic application of the Vietnamese culture. This has been crucial in coming up with creative designs that are appealing and highly attractive, utilizing the various traditional beauty products that have been in use during the religious rituals.

In the market environment, it is common that customers would choose products of the highest quality. However, for a company’s products to have an edge in the market, it must be made of materials that are friendly to the environment. This is because consumers go for ecologically friendly products that would help conserve the environment for the coming generations (Fraj & Martinez, 2007). Considering this analogy, Florasis gains a better competitive edge in the beauty industry, especially in Vietnam where issues of environmental conservation have been at the forefront. By pinpointing the Vietnamese’s passion for environmental conservation, Florasis gains favor with the market. Even though the company gains the favor partly because of perception, it is indeed a champion of environmental conservation through the use of traditional materials to make the beauty products. This facilitates its entry into Vietnam and gives it a great competitive edge against other brands.

Beauty products consumers usually peg their purchases on the emotions aroused by the product. This is a behavioral characteristic that has a lot of impact on the potential of a company to excel in the beauty industry, especially in Vietnam where religion-based beauty products arouse stronger emotions (Liu, 2007). This means that the company must have well laid out goals and proper design principles to be able to achieve success. Achieving the set goals calls for the establishment of a motivated workforce that will be able to drive the company’s agenda, in line with the laid out business management practices (Petri & Govern, 2018). Florasis being a company that manufactures beauty products portraying varied cultures, was able to identify with the Buddhist religion. This inspired the designs, utilizing a number of traditional Vietnamese materials to give the products unique feel. The end game of the designs brought the intended results, creating a strong emotional connection between the products designed and the market. This has been key in promoting Florasis thereby placing it at a better place to succeed in the Vietnamese market.

6. Conclusion

The Vietnamese market has exhibited itself to be of a potential to expand at a considerably fast rate. Additionally, the market is free and open for foreign investments. This is due to the country’s involvement with the World Trade Organization and the Foreign Direct Investment policy. The analysis presented in the preceding sections of this report portray Vietnam as a good investment destination and one that is relatively kind to business ventures. However, the difference in the sociocultural setting between Vietnam and the investor company’s home country presents an implementation dilemma. This is because of the difference in expectations from both ends, making it difficult for the company to choose whether to adopt Vietnam’s practices or to carry on with the primary routines. To conclusively address this dilemma, it is in order that Vietnam fully adopts the hybrid culture-based positioning strategy. The impact of such an implementation will be a harmonized market that attracts investors from different sociocultural settings, leading to more revenue and eventually economic growth.

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