Chanh Thu

Company

INTERNATIONAL
MARKETING PLAN
Chanh Thu Entering The USA Market

WWW.CHANHTHU.COM
 I. Macro analysis of

TABLE OF CONTENTS
USA market
Demography, Political,
Economic , Social, Technology

II. Micro analysis of

USA's fruit market
Market, Intermediaries,
Competitors, Customers

III. Chanh Thu's

competitive advantage
IV. Fitting level of
company in the USA
 I. MACRO ANALYSIS

DEMOGRAPHY
The population of the US increasingly aging, concentrated mainly in densely populated urban areas with a high level
of immigration.

Population: 331.4 million Largest age distribution is

25 - 54 years,
Average age: 38.8 years account for 39.0%

Sex structure:
male/female is 0.98

The number of Asian residents

are 272.6 million,
including 29.9 million Vietnamese.
Highly urbanized, with
82.3% of the population
residing in cities and
suburbs
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 I. MACRO ANALYSIS

POLITICAL

Political stability: the USA has a stable political environment, advanced infrastructure, and technology, which
positions itself as a great destination for foreign direct investment

Support from home country: Vietnam remove technical barriers to promoting the export of Vietnamese agricultural
products to the USA by signing many free trade agreements such as the EU-Vietnam Free Trade Agreement and the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Preferential tariffs policy: In the USA, about 60% of tariffs on fruits and vegetables are less than 5%. This compares
to Japan and the European Union (EU), where more than 60% of import tariffs range from 5%-25%

Strict import regulation: The USA uses non-tariff trade barriers by applying stringent plant quarantine regulations
for exporting fresh fruit, including the planting area, the packaging factory, and irradiated products. Vietnamese
enterprises do not clearly understand the regulations and laws of the US, which may make export goods likely to be
returned and fined.

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 I. MACRO ANALYSIS

ECONOMIC
High incomes: With a GDP of over $16.760 trillion, the US is the largest economy in the world. The economic system
is well-developed and gathers its strength from its services and manufacturing industries. Customers are willing to
pay more for quality products.
The growth of the minority market: Since African Americans, Asians and Hispanics continue to become more highly
educated, the buying power of this minority market exploded to 28.3% in 2020. Especially, Asian American buying
power grew by 111%, reaching $1.3 trillion in 10 years period (2010-2020), larger than the annual economic GDP of
all but 13 countries.
Inequality in household income: In 2020, the top 20% of
the population earned 52.2% of all U.S. income. The
median household income fell significantly while the
bottom 20% only earned 3% of the nation’s income. This
gap affect buying power while high-income customers
quest for more premium, healthy choice, low-income
customer has to cut down budget on basic needs.

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 I. MACRO ANALYSIS
SOCIAL
Health-conscious: The USA consumers, especially the
younger age group, respond to calls for improved diets
from the USA's food, nutrition programs and policies
Ethnically diverse, open cultural: According to research
(Census government, 2020), White Americans are the
racial and ethnic majority, with non-Hispanic whites
representing 57.8% of the population. The variety and
openness of the USA culture encourage customers to
expose to new tastes for foods from other countries.
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TECHNOLOGY
Diversified distribution system: The distribution system
in the USA has become more diverse, multi-level, multi-
channel, and contemporary, allowing for a greater
variety of consuming possibilities.
Technology advancement: The internet penetration rate
and the smartphone penetration rate in the USA are
relatively 92.0% and 86.11%, making it easier for the
new brand to reach customers in a wider area.
 I. MACRO ANALYSIS

MARKET RISK ASSESMENT

The business environment of the USA is very low risk, allowing a great opportunity for Chanh Thu to enter.
With a stable economy; high-income and technology-savvy residents, Chanh Thu should take advantage of market
opportunities to promote high-quality products on multiple platforms to maximize access to consumers, especially
the Asian population - which is growing rapidly in both quantity and purchasing power.

However, the US market is a difficult market with tight non-trade barriers and unequal distribution of living
standards and population density, Chanh Thu needs to improve product quality and target the right customer
segment to avoid wasting resources.

A1: Very
low risk

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 II. MICRO ANALYSIS

MARKET USA Fruit Market share, by origin, 2021 (%)

$62.1 billion
The USA market is highly potential.
USA Fruit market size, 2021
The United States is the world's third-largest fresh fruit
Domestic fruit
market and is expected to expand with a high annual
Imported fruit CAGR 1.71%
growth rate, driven by the increasing number of
imported fruit. 66% USA Fruit growth rate, 2022-2027

66% FRUIT
USA Imported fruit, 2021

Source: Grandviewresearch 2021

Vietnamese fruits rank 6th in top imported fruit Top Imported Fruit Suppliers by origin, 2021 (%)

suppliers, however still a relatively small market share Mexico

overall (only 5.3%). Chile

Peru
As a result, it continues to have a lot of room to grow in
Guatemala
terms of exports and market share in this market. Costa Rica
Vietnam
0% 10% 20% 30% 40% 50%
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Source: U.S. Agricultural Trade 2021
 II. MICRO ANALYSIS

CUSTOMER
With a high standard of living and diverse options, consumers have a variety of choices with fruits leads to medium
customer power.

Customer trends in fresh fruit consumption

1.Healthy living: Due to the increasing obesity and the high per-capita income in the U.S, consumers are increasingly
spending a lot of time and money on their health and are looking for fresh and exotic fruits for a healthy diet.
2. Food safety: Consumers place more value on knowing more about the quality: health, nutritional, and safety
aspects when buying fresh fruit.
3. Niches and consumer experience: Consumers are willing to pay for good taste products and demand ethnic
products, especially within the high-end market. Brand purpose has steadily risen in importance. Consumers want to
know about the sustainability of the brand: where their food comes from and how their food choices impact the earth
4.Convenience: Consumer enjoys the year-round availability of fresh fruits, pre-cut produce, and more branded
products
=> Changing consumer trends towards quality, safety and convenience present many opportunities for new brands.

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 II. MICRO ANALYSIS
Importer
INTERMEDIARIES
The USA has an industrialized Shippers
distribution structure with a variety of
intermediaries. The medium power of
intermediaries creates a high barrier
to market penetration, especially for General line grocery Specialized produce General line food-
SMEs company. The risk of payment is wholesalers wholesalers service wholesalers

high because the USA's company

often require payment after the arrival
of goods, and do not accept deposit
for goods. This means that when Direct markets
Food-service
Retail stores
goods have problems, exporters from establishments

Vietnam must bear the full

responsibility.

Consumers
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 II. MICRO ANALYSIS

COMPETITORS
1.General: The USA is high competitive rivalry with the presence of a large number of regional and local players.

1.1. Local players

The development of early- and late-maturing varieties has expanded U.S. production seasons, allowing producers
to grow many types of fruits and vegetables throughout the year. As the U.S. production season has expanded,
the winter window for some imports has narrowed, increasing the market competitiveness.
However, domestic players mostly focus on some fruits like pineapple, banana, avocados, orange, lemon,.. leaving
a gap for foreign company import their unique fruit into the USA market.

1.2. Exporters
Compared to domestic players, exporters have advantages partly because of their lower costs of producing,
packing, and processing fruits
Exporters mainly compete on price, volume, and adherence to strict rules and regulations. Therefore, it's essential
to set a product apart from the rest by differentiating on added value, quality, taste, and sustainability ;or choose
small, right niche markets in the USA, since those products may not widely available or grown.

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 II. MICRO ANALYSIS

COMPETITORS
2. Specific product: The main fruits Chanh Thu export are mangos, dragon fruit, guavas and durian. Understanding
the competitive environment in each product portfolio helps the company prioritize products to gain maximum
competitive advantage.
Chart 1: Durian expoters in the USA Chart 2: Volume of durian export from
2.1. Durian by country, 2021 (%) Vietnam to the USA by year, 1,000 lbs
Durians are mostly imported. Vietnam
Philipines
750
0.38%
Thailand is the biggest importer, 6.07%
623
accounting for more than 79% of
the total fresh durians. (Chart 1)
500
Vietnam is the 3rd biggest durian Malaysia
supplier to the US. In 2021, the 13.94%

import volume and value of

Vietnam’s mango increased sharply 250

Thailand 163
to 623,000 lbs (Chart 2)
79.6%
52
26
0
2018 2019 2020 2021
10 Source: U.S. Agricultural Trade 2022 Source: U.S. Agricultural Trade 2022
 II. MICRO ANALYSIS

COMPETITORS
2.2. Mango Chart 2: Volume of mango export from
Vietnam to the USA by year, 1,000 lbs
The USA has few regions where mangoes can be grown outside of
greenhouses, primarily in Florida. But the constant threat of 2.000
hurricanes and aggressive real estate development limit the
1691
production of this crop, opening the door for mango suppliers from
other countries. 1.500

Mexico, Peru, Ecuador, and Brazil are the four markets that provide
the most significant amount of fresh mangoes to the US, imports from
1001
these four markets account for 94.4% of the total fresh mangoes. 1.000

631 743
Vietnam is the 14th biggest mango supplier to the US. In 2020, the
500
import volume and value of Vietnam’s mango increased sharply to
2,100 tons, worth 4.61 million USD, up 66% in volume and more than
70% in value compared to 2019.
0
2019 2020 2021 2022
(Jan-Aug)
11 Source: U.S. Agricultural Trade 2022
 II. MICRO ANALYSIS

COMPETITORS
2.3. Guavas
The USA, guavas are found in Hawaii, the Virgin Islands, Florida,.. However, up to two-thirds of the guava fruit are
imported
Mexico is the biggest market that provides the most significant amount of fresh mangoes to the US, imports from
this market account for 92.01% of the total fresh guavas.
Vietnam is the 6th biggest guavas supplier to the US but accounts relatively small in volume and value. In 2020,
the import volume of Vietnam’s guavas are 14 tons.

2.4. Dragon fruit

Dragon fruit are mostly imported.
Vietnam is the 4th biggest dragon fruit supplier to the US. However, the price of Vietnamese dragon fruit is often
higher than that of other countries in Southeast Asia.
From the analysis of competitors, Chanh Thu should prioritize focusing on some types of products where Vietnam has
a better competitive advantage in the US market, then continue to expand the brand portfolio to create diversification
for brand.
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 II. MICRO ANALYSIS

COMPETENCIES NEEDED IN THE USA MARKET

From the analysis above, it can be concluded that Chanh Thu should create a sustainable competitive advantage as
the industry rivalry is high. They also need to carefully consider when choosing suppliers, as well as carefully control
suppliers due to the risks of payment in the US market. Company can take advantage of the opportunity because the
US is a very potential market, and consumers are increasingly demanding for high quality imported fruit products.

The competitive advantage of a company is dependent on the company's core competencies (Hamel & Prahalad,
1990). In order to enter the USA market, Chanh Thu needs some core competencies as follows:
Target the right niche market and customer base
Consistently high quality
Better delivery methods
Extra customer services

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 III. COMPETITIVE ADVANTAGE

VALUE CHAIN

The simplified version of the value chain is used to assess the competitive advantage of a brand when
entering the US market.

Sale &
R&D Production Marketing
services

Research Purchasing Proposition

Technology Manufacturing Product
Logistics
Upstream Downstream

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 III. COMPETITIVE ADVANTAGE

VALUE CHAIN

1.R&D
Research: Constantly learning to capture
the needs and tastes of major customers in
the world. Therefor, today company is a
reputable and reliable partner supplying
fruit products in many European regions,
Asia, the Middle East, and the target
market - the USA.
Technology: Update the latest
technologies; collaborate with scientists to
advise and monitor product quality, and
directly guide the growers in farming areas

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 III. COMPETITIVE ADVANTAGE
VALUE CHAIN
2. Production
Purchasing:
+ Cooperate with farmers to build
specialized cultivation areas that meet
VietGAP, GlobalGAP, American code
standards, etc., which are controlled
from planting to harvesting,
specifically as following table
+ However, according to Chanh
Thu company, the linkage chain
between companies with cooperatives
and farmers is not sustainable.
Therefore, there are still not enough
raw materials of good quality fresh
fruits to export.
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6 growing areas are granted the US Code,
Rambutan 1 growing area is GlobalGAP certified,
3 growing areas are Vietgap certified.
6 growing areas with American Code,
Longan 1 growing area with GlobalGAP certification,
3 growing areas with Vietgap certification.
Durian 1 growing area certified VietGap
1 growing area is certified with GlobalGAP,
Dragon fruit
1 growing area is granted US code.
Green-skinned pomelo 3 growing areas certified VietGAP.
Mango 1 growing area certified VietGAP
Guava 1 growing area certified VietGAP
Mangos 1 growing area certified VietGAP
 III. COMPETITIVE ADVANTAGE

VALUE CHAIN
2. Production
Manufacturing: Chanh Thu has many qualified packing and freezing factories, in specific:
+ 1 packing factory meets American standards,
+ 1 packing factory meets GlobalGAP standards,
+ 2 packing factory meets VietGAP standards
+ 1 packing factory meets HACCP, GlobalGAP standards
All factories have cold storage and freezing systems that meet international standards to serve the preliminary
processing, processing, packaging, and freezing of Vietnamese specialty fruit products.

Vehicle scheduling:
+ Company constantly improves the transportation system to be able to quickly gather harvested products and
deliver on time.
+ However, since the logistics system from Vietnam to America does not fully developed, the company faces many
challenges in product quality and logistics cost which lead to high production costs.

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 III. COMPETITIVE ADVANTAGE

VALUE CHAIN
3. Marketing:
Proposition
“We made Vietnam fruit brand”, "Mỗi sản phẩm là một niền tin"
Product
The company focuses on product quality, so prices are often higher than competitors in the market

Mangos Dragon fruit Main export Longan Rambutan

fruits

Green-skinned pomelo Star apple

Guavas Durian
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 III. COMPETITIVE ADVANTAGE

COMPETITIVE ADVANTAGE
The Porter’s Generic Strategies (Porter, Michael E,1985) is applied to help Chanh Thu identify the company's
competitive advantage

Chanh Thu business in the USA – a vast market

but as a small, new business, the company
does not have enough resources and ability to
target broad. The company chooses to set high
prices and focus on product quality. Therefore,
the company creates competitive advantage by
using Differentiation focus strategy.

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 IV. FITTING LEVEL OF COMPANY IN THE USA MARKET

FITTING LEVEL
In the USA market, the company's The SWOT summarizes the analysis through the fitting level of the
objective is to build a brand and build company's value chain with the macroenvironment and
trust with customers about high-quality microenvironment of the USA.
Vietnamese fruit products. When
Chanh Thu's products have a passport
Strength Weekness
to the US, exporting to other markets
will be much easier.
High logistics costs
High-quality product
However, Chanh Thu does not have Strict quality control raw materials
much experience, especially in a big
market like the US. The company's
Opportunity Challenges
resources are also limited.

Increased customer demand Fierce competition on competitors

for high quality products Complex and variety distribution

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 IV. FITTING LEVEL OF COMPANY IN THE USA MARKET

SUGGESTION
From the company's objective, company's experience, and company's resources, Chanh Thu is suggested to enter the
US market with an entry mode that provides low risk. The company can consider exporting its fruit to the USA
market.

From the SWOT analysis, the company can take advantage of customer opportunities to offer fruit products that
emphasize quality and high nutritional content. To achieve this, the company needs to strictly control the source of
input materials and products to be able to bring to the market products that meet the strict quality requirements of
the US market. Focusing on product quality and keeping prices higher than the market, first of all, will reduce the
cost burden on the company: because logistics costs from Vietnam to the US are still very high. In addition,
customers will remember the brand by good quality, bringing a competitive advantage in the long run. However, this
requires the company to have good communication with consumers.

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 Chanh Thu
Company

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