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Marketing Plan for

Thorakao products
Developed by Group D:

1. Trần Ngọc Thanh Tuyền

2. Nguyễn Thị Bích Hương

3. Đoàn Bạch Bảo Khương

4. Cao Trần Mai Linh

5. Lương Thị Hoa

6. Lưu Thị Ngọc Hân

7. Huỳnh Trúc My

8. Phùng Thị Trà My

9. Nguyễn Phạm Ngọc Trâm

10. Nguyễn Thị Hoa Mỹ

2018
EXECUTIVE SUMMARY

The facial cleanser industry in Vietnam is at the high growth rate and there are
now many heavy competitors in this category. In 2017, it increased to 34%. Thorakao is
considered as most well-known cosmetics brand of the Lan Hao Cosmetics Company
Limited, focusing on manufacturing turmeric facial cleansing milk in particular,
products extracted from natural herbs in general and receiving a great deal of attention
as well as winning the customers’ trust by its quality and well-established image. The
company now has more than 70 types of products, including products for hair care, skin
care and body care. It is extending not only the domestic market, but also the
international market such as Singapore, Taiwan, Cambodia, Laos, China, Australia,
New Zealand, the USA, Saudi Arabia, Russia, African nations.

Thorakao turmeric facial cleansing milk targets the female people in the rural,
low and middle class segment. Nowadays, Vietnam market includes 20 million women
in the age of 15-39, accounting for 40% female poplulation. This facilitates increasing
demand for cosmetics products and have the potential customer gain for the company.
The other opportunities of Thorakao are created from understanding about the customer
behaviour and the Government encouragement.

The tactical marketing tools, 4Ps, are used to seek the strategies to aid the
marketing activities. Thorakao turmeric facial cleansing milk will be innovated with the
new appearance. Thorakao will use a market-skimming pricing strategy for this product
early because of the unlimited competition in the facial cleansing milk business. We
will start to run a television ad as well as launch a health and beautifying magazine for
promotion activities. Moreover, Thorakao seeks third party distributors to expand the
distribution channel of the company through different ways.

Thesedays, the facial cleanser industry has many foreign brands holding 80% market
shares. Applying the strategies mentioned above, therefore, helps Thorakao regain as
well as increase the domestic market shares and the customer perception. Our aim is to
increase the market shares to 10% within the next two years while simultaneously to
boost the brand regconition to 15% in 2019.
TABLE OF CONTENTS

I. INTRODUCTION ................................................................................................. 4
1. THE HISTORY OF THORAKAO ...................... ERROR! BOOKMARK NOT DEFINED.
2. THORAKAO’S BUSINESS ACTIVITIES...................................................................... 5
2.1. Production .................................................... Error! Bookmark not defined.
2.2. Distribuition ................................................. Error! Bookmark not defined.
2.3. Branch .......................................................... Error! Bookmark not defined.
3. AWARDS....................................................... ERROR! BOOKMARK NOT DEFINED.
4. THE PRODUCT CONCEPT ........................................................................................ 5
5. THE MARKET AND COMPETITION .......................................................................... 5
6. PLAN PURPOSE ...................................................................................................... 6
II. SITUATION AND SWOT ANALYSIS ............................................................... 6
1. TARGET MARKET .................................................................................................. 6
2. EXTERNAL ANALYSIS (MACRO ANALYSIS) AND INTERNAL ANALYSIS (MICRO
ANALYSIS).................................................................................................................... 6
3. SWOT ANALYSIS .................................................................................................. 8
III. BRANDING STRATEGY AND MARKETING OBJECTIVES ...................... 9
1. POSITIONING ......................................................................................................... 9
2. MARKETING OBJECTIVES.................................................................................... 10
IV. MARKETING MIX STRATEGIES............................................................... 10
1. PRODUCT............................................................................................................. 10
2. PRICE .................................................................................................................. 11
2.1. Estimate demand .......................................... Error! Bookmark not defined.
2.2. Determine costs ........................................................................................... 12
2.3. Develop pricing strategies ........................................................................... 12
2.3.1. Competition-based strategies ................................................................... 12
2.3.2. New product pricing strategies................................................................. 14
2.4. Choose pricing tactics .................................................................................. 14
2.4.1. Pricing for multiple products ................................................................... 14
2.4.2. Distribution-based pricing ........................................................................ 14
2.4.3. Discounting for channel members ........................................................... 14
3. PLACE ................................................................................................................. 15
4. PROMOTION ........................................................................................................ 15
4.1. Promotion objectives ................................................................................... 15
4.2. Communication channels ............................................................................ 15
4.2.1. Media (Pull Strategy) ............................................................................... 16
4.2.2. Sales promotion ........................................ Error! Bookmark not defined.
4.2.3. Public relation .......................................................................................... 17
4.2.4. Personal selling ........................................ Error! Bookmark not defined.
4.2.5. Trade promotion (Push Strategy) ............. Error! Bookmark not defined.
V. IMPLEMENTATION ......................................................................................... 18
VI. CONCLUSIONS AND RECOMMENDATIONS ............................................. 19
VII. REFERENCE LIST ........................................................................................... 20
I. INTRODUCTION

1. Brief company profile


Luxstay is a start-up from Singapore, founded in late 2016, led by co-founded and CEO Steven
Nguyen (Nguyễn Văn Dũng).

It is invested by venture capital funds such as CyberAgent Ventures (Japan), Genesia


Ventures (Japan), ESP Capital (Singapore), Founders Capital (Singapore), Nextrans (Korea).
These venture capital funds have operated actively in Asia market and have invested
outstanding Internet Startups in Vietnam.

With his strength in the Internet, CEO Nguyen Van Dung came up with the idea of
creating Luxstay, a model of sharing economy into real estate and tourism., focuses on the
high-end segment. Luxstay acts as an intermediary and gains fees of the connection between
customers and service providers through websites or software.

Luxstay is also the first startup which officially operating the Sharing Economy model
in Vietnam.

By June 2018, there were more than 3000 accommodations including homestays, high-
class villas stretching across many cities and tourist destinations in Vietnam, serving over
10,000 reservations per month. The average growth rate is 20% per month.
2. Luxstay’s business activities

Luxstay works as an intermediary between customer and accommodation owners to help


customers find homestays, apartments or luxury villas when they need to rent short-term
accomodations. These locations are often fully equipped with modern facilities, guests can
cook for themselves and have a feeling of closeness and peace when traveling.

Problem: customer complaint about Luxstay app (difficult to use, some properties is hidden)

Luxstay focus on the local market in Vietnam. In the next few years, Luxstay intend to expand
to international market,.

3. The product concept


Luxstay works as an intermediary between customer and accommodation owners to
help customers find homestays, apartments or luxury villas when they need to rent short-term
accomodations. These locations are often fully equipped with modern facilities, guests can
cook for themselves and have a feeling of closeness and peace when traveling.
Problem: customer complaint about Luxstay app (difficult to use, some properties is
hidden)

4. The market and competition


We concentrate on the competitors providing accommodations such as Airbnb, Agoda,
Booking.com, Traveloka and so on

In general, these competitors still offer online booking platform (via website or app) for
vacation rental in Vietnam for short-term accomodations

One of Luxstay’s remarkable competitors is Airbnb which is well-known all over the
world. Therefore, it has 4 million posts for renting accomodation in more than 190 nations by
2017. Once Airbnb officially penetrate on Vietnam, it can take advantages of reputation.

In this plan, we analyze the current status of Luxstay, service, and business activities.
These are the bases to determine suitable marketing strategies, SWOT analysis, perceptual map,
4Ps.
5. Plan purpose
 Making the brand’s regconition

 Stimulating the consumer demand to increase sales

 Gaining the market shares

 Creating the competitive advantages

Scoring the stable achievement in the local market

II. SITUATION AND SWOT ANALYSIS

1. Target Market
 Geographic: Vietnamese and foreign visitors, but mainly local customers
 Age : young and middle ages
 Income: Above Middle-income
 Job: stable job
 Life style: be interested in travelling, resting, relaxing in local houses with reasonable
price, enjoying the natural landscapes and feeling of the warmth like family; be fond of
realistic experience and local values (culture, specialty, history)
 Amount/Percentage of potential customer: 8 million people/13% of middle-income
Vietnamese (12,6 million people)
 Spending on beauty caring products: $4/person/year for cosmetic product.
 Past behaviors: directly book in hotels and resorts
 Reason for purchase: relaxing, travelling, business trips.
 How they are informed to make their choice: advertisement in the social media (fan
page, youtube and website)
 Common language: Vietnamese.

2. External Analysis (Macro analysis) and internal analysis (Micro


analysis)
 Macro Environment
 Political Environment: Luxstay is also the first startup which officially operating the
Sharing Economy model in Vietnam, hence government lauchs its own policies relating
to tax for Luxstay to develop strongly and attract foreign investment capital.
 Economic Environment: At the present, Vietnam’s economy has remarkable strides
(incresed GDP’s growth, positive economic reforms) and attract many foreign investors.
Nevertheless, high inflation causes the decrease in spending on travelling.
 Sociocultural Environment: Homestay market is growing increasingly. Young people
tend to travel and stay in homestay more. The young also want to rent house and live
independently more.
 Technological Environment: Vietnam has entered the technology market, developing
technology applications that are focused. People more and more use Internet,
smartphone and social network.
 Legal Environment: Legal procedures and laws related to startup businesses, which help
Luxstay easily access to Vietnam market.
.
 Micro environment

Luxstay is led by CEO Dung Nguyen-Vietnamese, so they can deeply


understand Vietnamese custom, behavior, culture, demand, psychology. These help
them have advantages in local tourism market, for example, Luxstay can easily connect
as well as closely build relationship with homestay owners. At the same time, Luxstay
is invested by venture capital funds, hence Luxstay has a stable financial situation.
Howerver, they are suffering difficulties such as competitors having high level of
awarness and high inflation (more than 4% in 2019).

 Major competitors
Luxstay’s major competitors are Airbnb, Agoda, Traveloka, Booking.com,
Homeaway, Housetrip. They also provide a model of connecting travellers all over the
world with local hosts like Luxstay, both domestic and foreign rivals.
 Customers
 Demographic factor and travel behavior
Vietnam is a developing country and the number of middle and high- income
people account for 13% of total population (about 97 million) in 2019 and is predicted
to increase to 34% in 2020 (Southeast Connections report, 2016). It means that people
spend a lot of time for work, so they should nourish their mental health by travelling,
leading to high demand of travel and short-term accomodations.
 Suppliers
Local hosts who would like to share their houses or accommodations to give
travellers a space for resting and relaxation for a profit.
 Employees:
Luxstay’s staff play an important role to connect travellers with local hosts via
its website. They are mainly in charge of technological work in its app and other
services like consluting hosts about room’s design, furniture and so on to assure
security, convenience and automaticity.
 Publics:
Luxstay mainly works with customers and suppliers indirectly via the Internet.
Its official website in Vietnam:

https://www.luxstay.com/vi?utm_source=coccocsearch&utm_medium=cpc&utm_ca
mpaign=ccs_branding&utm_term=%22luxstay%22&utm_content=17175314
It advertises on many channels, mostly on social websites.

3. SWOT analysis
STRENGTHS WEAKNESSES

- Reasonable price
- Abundant supply and Investment
capital
- Simple procedures
+ “Luxstay Instant Book” allowing
travellers to select and book rooms more
quickly without waiting the reply from
local hosts.

OPPORTUNITIES THREATS

− Tourism development − opening a new market (technology and


− A trend in living in homestay services), this startup has to race against
− few big competitors. time and train employees to understand and
adapt quickly to the industry.
− booming in apartments, houses and − potential competitor Airbnb (the growth rate
houses purchased for investment and of up to 150% per year)
leasing. − complicated procedures, laws in Vietnam for
− Pioneer in homestay rentals in Vietnam Startup businesses.
market.

III. BRANDING STRATEGY AND MARKETING OBJECTIVES

1. Positioning
 Major rivals competing directly:

− Airbnb
− Agoda
− Booking.com
− Traveloka

 Major rivals competing indirectly:


− Saigon Tourist Holding Company
− VietNam Travel and Marketing Transport Joint Stock Company
− FID Joint Stock Company
− TST Tourist Service and Trading Corporation
− HaNoi Tourist Corporation – Limited Company

 The perceptual map


The perceptual map is about Luxstay
Luxstay focuses on middle and high - income market segments
Luxstay's policy not only focus on developing the number of apartments, but also more
developing quality products, aiming to be the best experience for customers when using
services and developing income for business partners on the system. In the future, Luxstay will
conduct a classification to positioning products on the market more clearly – comparing to
brand coverage in the domestic and foreign markets such as Agoda, Booking.com or Traveloka.
Accordingly, the accommodation on Luxstay will be divided into 4 basic groups
including Exclusive (only available in Luxstay), Signature (unique, strange), Famous (popular
accommodation) and Premier (apartments, super villas).
Compared to Airbnb, the number of homestay which Luxstay are having is quite a
distance. But this is not the core factor. Because Airbnb has many accommodations, it is
difficult to control the quality of service. Meanwhile, Luxstay will refine very carefully, and
aim to rich experience

2. Marketing Objectives
 Increase market share of Luxstay by 10% by 2021
 Increase the customer brand identity by 30% by 2020
 Create an equally competitive advantage to Airbnb

IV. MARKETING MIX STRATEGIES

1. Product
 POS:
Luxstay and other competitors are online booking platform (via website or app) for
vacation rental in Vietnam for short-term accomodations. It is also a intermediary linking hosts
and customers: win-win situation (the owners earn money through their rest space in their
homestays, villas and so on and the traveller can find suitable accommodation in their vacation
easily). Luxstay provides basic service (accommodation services) and customers will pay by
credit card.

 POD:

Lusxtay is the first “home sharing” model in Vietnam. Not only is Luxstay a pioneer
in this field but also deeply understand local market. Customers can get their own experience
(guests can cook for themselves and have a feeling of closeness and peace when traveling).
Moreover, Luxstay focuses on high-end segment.

However, there still have some problems that customers complain is about the booking
app. Design of it makes users difficult to use (tool bar). Another issue is that the price in the
app is not fix the price at homestay, leading to the fact that users must call to customer service
center for explaining. Therefore, we decide to redesign the website and booking app to improve
the service’s quality for convenient customer’s using.

2. Price
Many factors affecting the price of the Luxstay’s accommodation are different kinds
of room ( Standard, Superior, Deluxe or Suite), location, booking time and different customer
segments. Currently, its price of accommodation is divided into 2 basic types:

+Rack rate: is the original booking price shown in the quotation on the Luxstay’s
website. This kind of price is considered to be the highest price for each kind of room. For
example, the rack rate of a Deluxe room is 1000000 VND/ night.

+Special rate: is the price applied for different potential customers.

2.1. Segmented pricing


2.1.a.Customer – segment pricing :
*Luxstay has FIT/ GIT’s rate applied for its tourism partners who book
rooms for their customers.
*Corporate rate applied for partners (like Rakuten) who book a lot of
rooms for their employees and business customers
*Long staying guest rate applied for those who stay at Luxstay’s
accommodations for a long time will enjoy a preferential price.
*Package rate: is applied for customers who join a planned tour or a
large number of visitors who come to Luxstay’s rooms together.
2.1.b Location-based pricing : Luxstay’s accommodation located in
different places will have different price. For instance, a room in the downtown
of Nhatrang will be more expensive than a room at its suburb.

2.2. Determine costs


The price for 1 tube of turmeric facial cleansing milk is 32.000 VND with the
gross weight of 100g.

2.3. Develop pricing strategies

2.3.1. Competition-based strategies


The price analysis table on 1 gram of products - the same function and major
ingredients:

2.4. Segmented pricing

2.4.1. Customer – segment pricing -

2.1.:
*Luxstay has FIT/ GIT’s rate applied for its tourism partners who book rooms
for their customers.

*Corporate rate applied for partners (like Rakuten) who book a lot of rooms
for their employees and business customers

*Long staying guest rate applied for those who stay at Luxstay’s
accommodations for a long time will enjoy a preferential price.

*Package rate: is applied for customers who join a planned tour or a large
number of visitors who come to Luxstay’s rooms together.
2.1.b Location-based pricing : Luxstay’s accommodation located in different
places will have different price. For instance, a room in the downtown of Nhatrang will
be more expensive than a room at its suburb.

The price analysis table on 1 gram of products - the same function and major
ingredients:

Product Gross weight Price(VND) Medium


(gram) price/gram(VND)

E100 Cleansing 100 25.000 250


Milk

Thai Duong 90 28.000 311


turmeric
cleansing milk

Lana Turmeric 100 35.000 350


cleansing milk-
egg

Turmeric 50 23.000 460


Hazeline

Acne treatment 50 27.000 540


Bioré

Thorakao 100 32.000 320


turmeric
cleansing milk

=> In the domestic market, Thorakao product’s price is the second most expensive after
Lana product’s price.
2.4.2. New product pricing strategies
We use the Market - Skimming Pricing strategies.

2.5. Choose pricing tactics

2.5.1. Pricing for multiple products


Price bundling: creating the interesting combo with 3 items.

One special price of 98000 VND

Product Gross weight Price (VND)

Turmeric facial cleansing 100g 32.000


milk

Turmeric cream 30g 16.000

Pomelo shampoo 100ml 52.000

When customers buy two 100gram tubes of turmeric facial cleansing milk, they
will get a 30gram turmeric cream free.

2.5.2. Distribution-based pricing


Basing-point pricing

 We decide the shipping fee by kilometer.

1 km = 1.500VND

 The bill costs more than 200.000VND - free ship in inner HCMC.
 The bill costs more than 500.000VND - free ship in HCMC ’s suburbs.

If retailers and wholesales take the products directly from the warehouse, we will
recoup the costs of distributing them.

2.5.3. Discounting for channel members


Discounting 15% for the bill of 200 items.
3. Place
Luxstay has customer service bases in some big provinces like Ho Chi Minh city,
Hoi An, …where it has an online presence. Luxstay’s employees mainly
communicate with customers via its website and major app on the Internet

 There are some solutions for


 Website: www.luxstay.com
− Decorating the website in an eye-catching way and creating a backdrop
for each season or holiday. Clear headings help customers easily use the site. Inbox
is required for customers to ask questions directly on the website
 Mobile App: Luxstay
− The app should not be inserted too many ads because it will be annoying
customers.
− Luxstay needs to upgrade the app regularly to fix unnecessary bugs and
errors and help the app run smoothly on all phone operating systems.
− There should be additional cancel button for customers as well as
feedback if the owner cancels the appointment.
− Luxstay finds it essential to have an online consultative channel for its
customers as well as hosts directly so that it can promote the interaction between
them and Luxstay.

4. Promotion

4.1. Promotion objectives


− Keeping on building awareness in the large scale, which helps inform the more
customers, especially the targeted ones about the Luxstay and its services.
− Creating customers’ interest as well as the brand attractiveness to identify a need
that the Luxstay fulfills and make sure that the customer recognizes this need as
something that is unfulfilled for them.
− Differentiating product: because there are many competitors in the market,
Luxstay may seek to use promotional activities to differentiate its product in the
market and make it stand out from the crowd.

4.2. Communication channels


aims to carry out in the planned time is shown below
4.2.1. Media (Pull Strategy)
Media channels that Luxstay plans to transfer its message to the targeted
audience are:

 Broadcast media: Outdoors (Transit and Billboards).Showing Luxstay's


billboards and logos on the bus, the grabcar as well as posters on the road to
attract more customers' attention.
 Print media: magazine ads 1 time / a month.
 New media: Social media/ Social network ( facebook, instagram, youtube,
coccoc,…).

For example:

− Using Google Adwords to make Luxstay's homepage always displayed first


when customers search for homestay or homestay services. When customers have
searched for Luxstay, Google will always run ads on Luxstay. Besides, Running ads on
social networking sites, especially Facebook.
− Sponsoring for famous youtubers (such as Khoa Pug,...) specializing in travel
reviews to attract attention from young people who love to watch travel on youtube.
− Owned website
 Earned media: Luxstay aims to carry out earned media deliberately
through viral, which is considered as a result of both paid media and owned media.
( For example, that CEO Luxstay paid more than VND 40 billion to buy 36 Vinfast
cars has become a top trending on Google and attracted a grand-scale attention,
especially its potential customers. Thanks to the meaningful message, Luxstay
successfully creates a good image in customers’ eyes and be known more than
before.
 Viral: Creating a photographic activity at your place of residence while
traveling on Luxstay's Facebook page. Content includes taking photos with
Luxstay's background, uploading them to Facebook with the hashtag Luxstay in
public mode. The reward is a trip to Da Nang.
 These media should be done with the pulsing frequency.
− By this combination of media, Luxstay can have a great opportunity to
approach more its potential and targeted customers by different means, time and
places( on roads, at home, at working place), increasing its covering in the
domestic market. Besides, they will also reinforce its good and reliable image in
the customers’ mind so that it can get their attention and trust rather than other
competitors.
− The frequency of media channels is uneven at different times and shown
in the table 2 below.

Table 1. The frequency of media channels.

Media Dec Jan Feb Mar Apr May Jun Jul

Outdoors Transit
Billboards

Social Media

Online Website

Magazine

4.2.2. Customer and service support


 Luxstay also has support channels such as:
 Using live chat right on the web: Contacting Support at any time, and
information will be sent to the mailbox where customers log in (booking),
customers can ask for apartment information, location, way, check in time,
check in ...
 Chatting messenger with Fanpage: Inbox directly at fanpage:
https://www.facebook.com/luxstay.
 Hotline (free of charge): With the number of hotline 1800 65 86, switchboard
supports customers 24/7.

V. IMPLEMENTATION
Implementation & Schedule

− This table below shows the schedule and tasks delivered to each department:

− In terms of product, service development will be implemented within 3 weeks


(18/9-19/10/2019) by CMO- Marketing Department

− Regarding price, Finance Department will take responsibility for setting price
product in 1 week (18/9-25//2019) and intrductorying discount programe in 3 weeks
(10/10-31/10/2019)

− Concerning to promotion, in 10 weeks (6/10-15/12/2019) advertising through


social media will be planned, update company website will take 1 week (20/9-
27/9/2019) and transit will be prepared within 4 weeks (15/11-15/12/2019). All tasks
will be taken over by CDO-Dept’s Marketing.

− Distribution and evaluation are allocated to Marketing Department’s staff


including selecting distribution channel within 2 weeks (18/9-2/10/2019) and strategic
review within 1 week (1/12-8/12/2019)
VI. CONCLUSIONS AND RECOMMENDATIONS
Thesedays the number of foreign and domestic visitors is increasing significantly,
which creates a great opportunity for tourism sector. Besides, enterprises
specializing in booking flatform can get considerable benefit including Luxstay.
Although Luxstay is the pioneer in this field in Viet Nam, people still have not been
well aware of Luxstay. And this is the biggest problem Luxstay needs to tackle.
Moreover, another issue is regarding website – its design is not the best effective
and optimum so this still creates customers inconvenience when they access to
website and use it, so is app. Therefore, Luxstay should offer the best solutions for
the current problems that they are facing. With the aim to increase brand recognition
and meet customer needs effectively, Luxstay needs to create an ecosystem large
enough to meet all customer’s accommodation requirements. Besides, Luxstay not
only rents accommodations but also creates new experience for tourists.
Simultaneously, Luxstay should come up with the best strategies to improve their
services so that customers can easily access and use more conveniently. In the near
future, Luxstay should work towards linking with OTA (online travel agent)-
traditional agent in Vietnam to approach the tourism market, which aims to create
opportunities to increase the market share for Luxstay. Concurrently, a start-up like
Luxstay wants to convey the message “Vietnamese people use Vietnamese goods”,
Luxstay has to build a firm foundation so that Luxstay can reinforce young
generation’s belief in Vietnamese branded products as well as create a close
relationship to gain community support in return and create the belief that is large
enough to get the trust of investors and partners.

VII. REFERENCE LIST

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https://vtc.vn/luxstay-dinh-huong-tro-thanh-thuong-hieu-uy-tin-doi-tac-tin-cay-trong-
linh-vuc-home-sharing-nam-2019-d462273.html 21/02/2019

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