Apply marketing mix theories to evaluate the current marketing mix effectiveness of vietnammobile

INTRODUCTION

Problem statement

Mobile communication is essential for both personal connectivity and national economic growth It enables rapid and precise information exchange anytime and anywhere Initially, Vietnam's mobile market was dominated by just two operators, MobiFone and VinaPhone However, the landscape has transformed into a dynamic marketplace with the arrival of new players.

Vietnamobile The integration of these networks has made the mobile market more vibrant and it also leads to the increasingly fierce competition for market share.

The mobile service market in Vietnam is recognized for its potential and growth opportunities for new entrants However, after several years of concentrating on strategies to boost market share, mobile operators are now realizing the necessity to shift their focus towards enhancing revenue generation.

Vietnamobile, as a late entrant in the telecommunications market, faces significant challenges in attracting quality customers Despite these hurdles, achieving the fourth position in the market after just over two years of operation is a notable accomplishment for the company To further enhance its market share and boost revenue, Vietnamobile needs to reassess and implement more effective marketing strategies, particularly focusing on increasing Average Revenue Per Unit (ARPU).

This research aims to assess the effectiveness of Vietnamobile's current marketing mix using established marketing-mix theories By evaluating these strategies, the study will provide targeted recommendations to enhance Vietnamobile's business growth.

Objectives of the research

This research highlights a case study of Vietnamobile, which entered the market later than competitors yet achieved rapid market share growth To further enhance its subscriber base and service quality, Vietnamobile must innovate its marketing-mix strategies The primary objective of this study is to leverage marketing insights acquired from the MBA program at SEPT to assist Vietnamobile in reaching its goals.

Research methodology

The aim of this research is:

- Evaluating the current marketing-mix situation of Vietnamobile, analyzing the pros and cons of its marketing application.

- Propose the appropriate innovations for the marketing-mix policies of Vietnamobile in order to help the company reaching new strategic objectives.

Figure 1.1 presents the analytical framework for this research, which directs planners in a logical progression towards achieving their goals Initially, planners must comprehend their company's missions and objectives before assessing the current market situation This analysis should encompass both external and internal factors; external analysis is crucial for identifying opportunities and recognizing potential threats in the market.

Meanwhile, internal analysis shows to planner weaknesses and strengths of the company

In order to analyze the marketing-mix implication inside Vietnamobile, it is very important to collect information about below issues:

- Important information about Vietnamese economy

- Information of mobile operators in the market, focus on top three: Viettel, MobiFone, VinaPhone

- Information of Vietnamobile: objective, strengths and weaknesses, products,

The necessary information and data is obtained from following sources:

- Information from telecom journals, books, articles, forums

- Information collected from mobile operators’ website

- Quantitative survey on existing customers of Vietnamobile

- Information obtained from the in-depth interviews with some specific groups: students, job-holders and self-employed people

Quantitative research was conducted to analyze the needs and behaviors of mobile service customers, utilizing in-depth interviews with existing Vietnamobile customers as well as a random sample of individuals.

The Vietnamobile customer service center conducted an outbound call survey, reaching out to a selected group of approximately 2,000 existing customers Each call lasted between 10 to 15 minutes, aiming to gather valuable insights and feedback about customer experiences and satisfaction with Vietnamobile's services.

The Marketing Team of Vietnamobile conducted a survey by interviewing random candidates, where each participant distributed a questionnaire to friends and relatives for completion Interviews took place in various locations and lasted approximately 20 minutes each, resulting in a total of 447 successful interviews The primary goal of this survey was to gain insights into customer preferences and behaviors.

- Differences in demand on mobile serviced of different segments.

Scope and limitation of the research

This research has the ambition to help Vietnamobile in evaluating which marketing- mix implementations are successful and what should be improved in the future time.

Organization of the research

Chapter I introduces the research study by outlining the problem statement, objectives, scope, and limitations This chapter also details the research methodology, including the framework and the methods used for gathering essential information.

Chapter II provides an overview of key concepts and definitions related to mobile services, followed by an examination of essential theories and studies that will inform the marketing strategy This includes an analysis of the Marketing Mix, PEST analysis, and the Five Forces Model.

 Chapter III is an analysis of external factors that have influence on the telecommunication industry in Vietnam, which might bring about opportunities as well as threats to Vietnamobile

 Chapter IV is an evaluation on strengths and weaknesses of Vietnamobile

 Chapter V offers a proposal of marketing-mix measures for Vietnamobile to achieve its targets In this chapter, the focus is on planning for new products applied for market segmentations.

 Chapter VI is a conclusion on the research topic.

LITERATURE BACKGROUND

Concept and definition of basic mobile services

In 2010, the mobile market experienced significant growth; however, the implementation of Circular No 11/2010/TTBTTTT, which regulates sales promotions for mobile phone services, impacted this growth Consequently, the last six months of the year saw a noticeable slowdown in market expansion This situation underscores the need for a new phase focused on deeper and more practical development in the mobile sector.

Vietnam has experienced steady market growth, achieving government targets for 2010 ahead of schedule As a result, the country has emerged as one of the top 10 nations in Asia with the highest number of Internet users, reflecting 13 years of significant development.

Customers who want to use mobile service of any operator have to buy a starter kit or SIM (Subscriber Identity Module) to own a mobile number.

Methods of registration with mobile operator: thereThere are two ways to register using mobile service, postpaid and prepaid.

Prepaid services require customers to pay in advance before accessing them, making it easy to purchase prepaid SIM cards from various retailers and authorized shops Once the SIM card balance is depleted, customers must recharge to continue using the services In Vietnam, starter kits come with an initial balance that typically exceeds the amount paid for the SIM card itself.

Postpaid services enable customers to utilize telecommunications services upfront, with payment deferred until later To enroll, customers need to present their identity card and sign a service agreement This payment model typically requires a monthly fee, ensuring that users can enjoy uninterrupted calls without the concern of running out of account balance.

Prepaid subscribers are assigned a validity period, allowing the operator to reclaim the SIM card if the customer ceases usage during that time In contrast, postpaid subscribers do not have a validity period, as they are required to make monthly payments regardless of their usage.

- Basic services : voice and SMS (Short Message Service)

- VAS (Value Added Service) : data, MMS (Multimedia Messaging Service), CP (content provider), CRBT (Color Ring Back Tone), MCA (Missed Call Alert)

- Onnet is reference to use between subscribers of unique operators.

- Offnet is reference to use between subscribers of different operators.

An interconnection fee is a charge that one telecommunications operator must pay to another when its subscriber makes a call or sends an SMS to a subscriber of the other operator This fee is established by the Ministry of Information and Communication (MIC).

When customers use on-net services, the operator retains all revenue generated from that usage Conversely, if subscribers utilize off-net services, the operator must share a portion of the revenue from their spending.

Marketing Mix

The term "marketing mix" was coined by Neil Borden in 1953 in his American Marketing Association presidential, (http://en.wikipedia.org/wiki/Marketing_mix).

However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who described the role of the marketing manager as a "mixer of ingredients" in 1948

Elements of the marketing mix are often referred to the 4Ps model that includes

The marketing mix, commonly known as the 4 Ps—Product, Price, Place, and Promotion—serves as a foundational framework for businesses Depending on their specific strategies and industry, marketers may expand this model to include additional elements such as People, Packaging, Positioning, Policy, Progress, Physical Evidence, or Philosophy In the telecommunications sector, the traditional 4 Ps remain the most effective approach for optimizing marketing efforts.

- People – Process, Apo’s blog, September 2011 (http://blog.ngochieu.com/e- marketing/mo-hinh-4p-va-internet-marketing/).

A product is defined as a tangible good or an intangible service that is mass-produced on a large scale, typically measured in specific unit volumes In Vietnam, mobile operators offer products such as starter kits or SIM cards (Subscriber Identification Module) Users can register for mobile services through two methods: prepaid or postpaid In addition to starter kits, mobile operator products encompass essential services like voice and SMS, as well as Value Added Services (VAS).

In Vietnam's telecommunications industry, pricing has become the primary competitive factor among operators Each provider implements unique pricing strategies for their starter kits to attract new customers, while also maintaining competitive service prices to encourage long-term usage Although service prices remain relatively stable and similar across operators, the emphasis on competitive pricing for starter kits has intensified as companies strive to capture a larger market share.

These prices depend on seasons and targeted customer segments

Telecom operators can provide customers with lower rates for on-net usage compared to off-net usage, as on-net calls do not incur interconnection fees Additionally, operators with a larger market share can offer greater on-net benefits, enhancing the value for their customers.

In mobile service industry, there are two important factors belonging to place:

- Number and position of BTS (Base Transceiver Station): this decides the quality of service and network coverage area of each operator.

An effective distribution and retailer system is crucial for the success of any operator, as it enhances product availability and streamlines distribution Marketers can employ various strategies, including intensive, selective, exclusive distribution, and franchising, to optimize their marketing mix and strengthen their overall market presence.

Nowadays, in the Vietnamese mobile service market, promotions have become an important tool to meet the following strategic objectives of:

Human resources play a crucial role in the planning, execution, and management of business strategies aimed at fostering customer relationships To deliver high-quality services, mobile operators require qualified and experienced engineers for network setup and maintenance Additionally, dynamic and innovative individuals are essential in the marketing department to effectively launch products and promotions Furthermore, skilled sales personnel are necessary to enhance the distribution channels.

Above all, however, the company should have the good captain to steer the ship through the turbulent in market

Standardizing operations and enhancing competitiveness are key goals for businesses By creating a lightweight yet effective workflow, mobile operators can respond swiftly to competitor activities.

The strategic level of an organization encompasses its thought processes, philosophy, and culture, which are deeply intertwined with the business's mission and vision Marketing plays a crucial role in this framework, serving as a key component of corporate culture that requires every member to grasp and apply its principles to effectively recognize and address customer needs.

PEST analysis

The PEST is an acronym for the following factors: Political - Economic - Social -

Technological The PEST analysis is a framework that strategy consultants use to scan the external macro-environment in which a firm operates, Alan Chapman 1995-

PEST factors significantly influence the strategic value creation opportunities for corporations, particularly in the telecommunications industry These external elements, often beyond a company's control, can present both threats and opportunities that must be carefully evaluated Understanding the specific PEST factors relevant to the telecommunications sector is crucial for effective strategic planning.

Table 2.3: Factors of PEST analysis of Alan Chapman

Product Life Cycle

The concept of “Product Life Cycle” was used for first time by Theodore Levitt in

1965 in a Harvard Business Review article: “Exploit the Product Life Cycle”

The concept of product life-cycle management in marketing categorizes the lifespan of a product or service into four distinct phases Each phase is characterized by unique features that are significantly influenced by external factors.

Understanding the distinct stages of a product or service lifecycle is crucial for marketers, as these differences directly impact sales and the effectiveness of marketing campaigns By grasping this concept, marketers can develop tailored marketing strategies that align with each stage, ultimately enhancing their overall marketing plans.

- Introduction stage: product or service is designed for mass marketing or special segments At this stage, it is introduced to the targeted customers.

The company's mission focuses on enhancing customer awareness of its products and services within the competitive telecommunication market This stage is crucial, particularly in Vietnam, where operator offerings are often similar A failure to effectively raise awareness can significantly diminish the likelihood of product success.

In the growth stage, products or services gain popularity among customers, leading to increased sales and favorable responses from competitors To optimize sales revenue during this phase, it is essential to implement flexible sales policies and promotional strategies aimed at end users.

In the maturity stage of a product's lifecycle, sales volume stabilizes, indicating a shift in market dynamics During this period, the influx of new customers diminishes, with the majority of sales being generated by a loyal customer base.

Besides, Therefore, operators often apply loyalty campaigns for their customers to keep them to stay longer.

- Decline stage: the product or service is not up-to-date anymore or could not satisfy the demand of customers Sales volume starts to decrease in this stage.

Company stops investing more in this stage 2.5 Competitive Forces Analysis - FiveForces Model

Michael E Porter's Five Forces model is a strategic tool used to assess the attractiveness and value of an industry structure This analysis identifies five fundamental competitive forces that shape the competitive landscape of an industry.

- Entry of competitors : how easy or difficult it is for new entrants to start competing, which barriers do exist

- Threat of substitutes : how easy a product or service can be substituted,

- Bargaining power of buyers: how strong is the position of buyers? Can they work together in ordering large volumes?

- Bargaining power of suppliers: how strong is the position of sellers? Do many potential suppliers exist or only few potential suppliers (monopolies).

- Rivalry among the existing players: does a strong competition between the existing players exist Is one player very dominant or is it equal in strength and size with others.

Figure 2.5: Five Forces Model, Michael Porter, 1998 (http://www.enotes.com/porters-5-forces-model-reference/porters-5-forces- model)

Competitive Forces analysis - Five Forces model

In today's political landscape, Vietnam prioritizes stability to foster a secure investment environment for companies As a member of the WTO and the United Nations Security Council, Vietnam is well-positioned to engage with globalization and enhance its integration into the global economy Improved regulations on administrative procedures and expedited business licensing processes reflect the government's commitment to enhancing public administration and eliminating business barriers These efforts create favorable conditions for new companies by lowering entry barriers and encouraging growth.

With the encouragement of competition, the State will also have policies and mechanism to ensure the provision of essential telecommunication services to all people, especially in the remote areas

In August 2011, the Ministry of Information and Communications implemented a regulation limiting each subscriber to a maximum of three mobile SIM cards, aiming to reduce the number of virtual subscribers and conserve resources This policy could potentially lead to the withdrawal of over 60 million mobile subscribers, as highlighted in the Vietnam E-commerce Report.

Based on the economic - social development strategy, in the period of 2001 - 2010, the State has developed indicators of economic - social development as follows:

- GDP should doubled every eight years.

- Ensure internal accumulation on the economy reach 30% of GDP

- Contribution of the industry to GDP is 38% to 39% in 2005 and 40% to 41% in 2010

EXTERNAL ANALYSIS

Macro-environment - PEST analyses

In today's political landscape, Vietnam prioritizes stability for businesses, fostering a secure investment environment As a member of the WTO and the United Nations Security Council, the country is well-positioned to engage in globalization and enhance its integration into the global economy Improved regulations on administrative procedures and streamlined business licensing are indicative of the government's commitment to enhancing public administration and reducing barriers for new companies, ultimately facilitating easier market entry.

With the encouragement of competition, the State will also have policies and mechanism to ensure the provision of essential telecommunication services to all people, especially in the remote areas

Since August 2011, the Ministry of Information and Communications has implemented a ban limiting each subscriber to a maximum of three mobile SIM cards, aiming to reduce the number of virtual subscribers and conserve resources This regulation could potentially lead to the removal of over 60 million mobile subscribers, as highlighted in the Vietnam E-commerce Report.

Based on the economic - social development strategy, in the period of 2001 - 2010, the State has developed indicators of economic - social development as follows:

- GDP should doubled every eight years.

- Ensure internal accumulation on the economy reach 30% of GDP

- Contribution of the industry to GDP is 38% to 39% in 2005 and 40% to 41% in 2010

Accordingly, the demand of services will increase The demand of mobile and internet services increasingly enables telecommunication companies expand its scale and activities in service areas.

The rise in inflation significantly impacts many individuals, with the consumer price index soaring to 12.63% in 2007 and exceeding 18% by November 2008 Despite the economic downturn in 2012, telecommunication companies continue to find growth opportunities, as the demand for communication services remains strong and resilient, unlike luxury goods and services, which see a decline in consumption This persistent demand presents a distinct advantage for telecommunication firms in challenging economic times.

To be successful in business, enterprises not only make their efforts in the targeted markets but also exploit all elements of business environment, including cultural factors.

Vietnam's cultural nuances, shaped by both tradition and cross-cultural influences, significantly impact consumer behavior and attitudes towards goods and services As the country experiences deeper economic integration, the demand for communication services has surged across various demographics, including business professionals, farmers, students, and civil servants This growing need for effective communication serves as a catalyst for the development of services offered by network providers.

As society evolves, people's awareness increases, enhancing companies' ability to manage qualified labor and skilled technical staff With a young population of 86 million driving demand for communication services, there is significant market potential, presenting opportunities for companies to expand and establish dominance in this growing sector.

In today's world, technological factors play a vital role in the growth of nations and businesses alike, significantly influencing two key components of competitiveness: the quality of products and the level of service offered However, adapting to new technologies is a complex challenge that demands businesses to focus on several critical factors, including skilled labor, sufficient financial resources, effective development policies, and strong management practices.

In mobile service industry, there are two popular network technologies: GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access).

In Vietnam, five of seven operators choose GSM technology for mobile services The selection of any technology has created significant difference between operators.

CDMA is not popular in Vietnam even though this technology could provide with faster speed of data transfer That’s reason is not supporting for CDMA technology.

Vietnamese customers could easily choose a GSM mobile phone that matches their interests, budget, and their requirements among many brand names while they could not if using CDMA operators

The advancement of technology, particularly 3G, enables companies to select suitable solutions that enhance product and service quality as well as labor productivity However, this progress also presents challenges, including intense competition within the industry and the demand for competitive pricing on services.

The rise of 3G technology has significantly increased the demand for smartphones and mobile devices, including tablets and USB dongles, leading to higher sales and revenue In Vietnam, it is common for individuals to purchase multiple SIM cards, typically one for their mobile phone and another for their tablet or USB dongle.

Vietnam telecommunications industry overview

The telecommunications sector consistently ranks among the top industries in financial performance, boasting a remarkable Return on Assets (ROA) of 17.6%, surpassing even the traditionally strong Real Estate sector A significant trend in this industry is the explosive growth of the mobile subscriber market, which saw an increase from 19 million subscribers in 2005 to nearly 153 million by 2010—an impressive sixfold rise Consequently, the mobile subscriber ratio per 100 people also surged, climbing from just 11 subscribers per 100 people in 2005 to an impressive 67.8 subscribers by 2010.

Viettel mobile network leads the Vietnamese market with 19,426,006 subscribers, capturing around 38% of the market share Following closely is MobiFone, which has 13,341,217 subscribers and holds a 32% market share VinaPhone ranks third with 12,108,310 subscribers, accounting for 23% of the market Additionally, Vietnamobile holds a 5% market share in the competitive mobile service landscape.

Figure 3.2.1: Mobile market share in Vietnam (Source: General Statistics Office of Vietnam - 2011)

A recent study indicates that by 2012, Vietnam's mobile market will experience significant growth, with an increase of 138 million subscribers and a mobile penetration rate exceeding 120 per 100 people This impressive expansion is further supported by the issuance of 3G licenses to four major telecom providers—Viettel, VinaPhone, MobiFone—and a strategic partnership between EVN Telecom and Vietnamobile, which is expected to drive even greater growth in the mobile sector.

By 2012, the number of broadband subscribers in Vietnam is expected to exceed 30 million, reflecting a nearly 15% increase from the previous year This significant growth is attributed to the strategic development plan for internet services established by the Ministry of Post-Telecommunication, which emphasizes a focused approach to broadband internet expansion.

The services based on non-broadband internet are expected in the next few years.

Broadband is increasingly becoming the backbone for various services, with universal application on the horizon The market is poised for significant growth, with projections indicating that the growth rate could double annually in the coming years.

Figure 3.2.2: Mobile subscribers in Vietnam – (Source: General Statistics Office of Vietnam 2011)

Vietnamese operators are currently grappling with a significant challenge impacting their revenue: a decline in Average Revenue per User (ARPU) According to BMI's calculations, the blended ARPU fell to $3.50 by the end of 2011, down from $4.00 in 2010.

Similarly, the following figure illustrates the reduction of ARPUs from 9.0 US dollars in 2006 to 4.4 US dollars in 2009 According to Vietnam telecommunication report 2010

Figure 3.2.3: Trend of ARPU in Vietnam (Source: Vietnam Telecommunications Report - BMI)

The decline in Vietnamese mobile Average Revenue Per User (ARPU) is primarily due to fierce competition among network operators in a prepaid-dominated market To attract and retain customers, these operators have engaged in aggressive pricing and promotional campaigns The government's limited intervention has further fueled this competitive landscape; notably, in July 2010, it approved a tariff-reduction proposal from Viettel, MobiFone, and VinaPhone, resulting in a 15% decrease in rates.

3.2.2 Vietnam Mobile Market SWOT Strengths:

- Impressive growth in mobile sector in 2010, with subscribers up by more than 40%.

- Officially joining the WTO in 2008 made Vietnam a more attractive investment destination and enable the telecommunication industry to be stronger developed

- Market’s dependence on prepaid services exerts strong downward pressures on revenue.

- Although communications are developed strongly in big cities, many rural areas have no services or quality of service is poor

- Entrance of the eighth operator, Indochina Telecom, as an MNVO and the ninth operator, Vietnam Multimedia Corporation, will raise the level of competition

- Cutting in multiple SIMs will allow new numbers to be offered to 3G service subscribers.

- Government will allow non-3G licensees to collaborate with the established network operators to provide 3G services.

The Vietnamese government has opened its telecommunications market to foreign players, attracting interest from strategic investors like NTT DoCoMo, SingTel, and Telenor This move is expected to enhance competition and drive innovation within the industry.

- Network operators are investing considerable sums of money in the deployment of 4G technologies such as WiMAX and LTE.

- Price war tactics by the country’s three leading mobile service providers are likely put sustained downward pressure on mobile ARPU levels.

Vietnamese consumers behaviors analyses

Vietnam, with a population of approximately 86 million and nearly 50% under the age of 25, is an attractive investment destination The country boasts the highest consumer confidence in Asia, creating a promising environment for the growth of a new consumer class However, potential investors should be cautious, as consumer behaviors vary significantly across different regions, which could impact investment success.

Consumer behaviors in Vietnam significantly differ between the North and South, with Hanoi, the capital, exemplifying Northern preferences, while Ho Chi Minh City represents the Southern market.

Figure 3.3.1: Key differences between Hanoi and Ho Chi Minh City

(Source: Nielsen, Regional Consumer Differences)

This research study utilizes data from the Nielsen survey to analyze consumer characteristics in Ha Noi and Ho Chi Minh City, highlighting the distinct differences in consumption patterns between the two cities.

There appears to be a paradox in the relationship between income and consumption habits in Ho Chi Minh City and Hanoi The average household income in Ho Chi Minh City stands at $368, which is higher than Hanoi's average of $344 Despite this income disparity, the consumption patterns of residents in these two cities reveal intriguing differences.

The most important political centre of Vietnam.

Population: 6.5 mil (2009) 50/50 Male Female 9% Vietnam GDP from HN

$344: Average monthly household income 43% of people have AirCon &/or heaters in their home

26% use internet every day 74% Mobile Ownership

The largest city in Vietnam Population: 7.2 mil (2009) 48% Male and 52% Female.

20% total Vietnam GDP from HO CHI MINH CITY

$368: Average monthly household income 13% of people have AirCon &/or heaters in their home

19% use internet every day51% Mobile Ownership households equipped with air conditioners, internet and mobile phone usage in Hanoi are much higher

3.3.1 Main common characteristics of Vietnamese consumer

Since Vietnam's accession to the World Trade Organization (WTO) in November 2006, consumer behavior has significantly evolved Over nearly four years of WTO membership, Vietnamese consumers have developed a distinct consumption culture characterized by three key features: value-driven consumption, smart purchasing decisions, and a commitment to responsible consumption.

In the new Vietnamese consumption culture, consumers are no longer passively waiting and seeking for values from the goods and services that they purchase.

Consumers, in contrast, have become active and more “demanding” in their orders towards businesses to satisfy their needs and values that they expect.

Therefore, in order promote a brand, at the same time, the producer should define three criteria that are recognized and accepted by consumers: Product Quality, service, and Business Culture

Consumption based on values involves selecting high-quality, durable, and affordable goods and services that meet individual needs This approach empowers Vietnamese consumers, making them pivotal in driving business growth and contributing to national development By prioritizing the value of products, these consumers encourage enterprises to innovate and enhance their offerings, fostering a culture of responsibility and progress.

A new values-based consumption culture not only benefits consumers but also drives innovation in enterprises, leading to the development of value-added products for society By understanding this consumption culture, businesses can align their development strategies with community expectations and benefits The philosophy that "consumption creates values" redefines the relationship between consumption, production, and trade, highlighting how individual consumption behaviors contribute to the collective values of society.

Clever consumption refers to the behavior of consumers who make informed choices based on rational thinking and sufficient knowledge about products and producers, ultimately benefiting both themselves and the community Historically, Vietnamese consumers have favored foreign products, often opting for imports without fully understanding their quality, primarily due to domestic producers' lack of investment and outdated production methods However, recent improvements by local manufacturers have enhanced product quality and brand promotion, leading to a shift in Vietnamese consumer habits towards more informed purchasing decisions.

Responsible consumption embodies a social approach, where a consumer prioritizes not only personal needs but also supports producers committed to societal welfare A responsible consumer actively chooses products that contribute to the economy and enhance community living standards Additionally, they assert their influence over producers who undermine consumer interests or engage in unlawful practices.

Responsible consumption goes beyond mere enjoyment; it is a crucial aspect of ethical business practices Consumers play a vital role in motivating producers and service providers to adopt a more sustainable and eco-friendly perspective By advocating for green products and sharing information, communities can unite to support sustainable practices while holding accountable those businesses that lack ethics or engage in fraudulent activities.

3.3.2 Differences in consumption among different regions

In various countries, significant disparities in consumption patterns can be seen across different regions, such as between New York and Los Angeles in the United States, Beijing and Shanghai in China, Madrid and Barcelona in Spain, and Sydney and Melbourne in Australia Vietnam also exhibits these distinct regional differences, influenced by its geographical distance and diverse historical and cultural characteristics, resulting in strong and unique traits across its various areas.

Regional differences significantly influence daily activities, including thinking, communication, and behavior, and are particularly evident in consumer buying decisions between Hanoi in the North and Ho Chi Minh City in the South These two cities exemplify critical differences that impact the consumer decision-making process Research indicates that customers typically navigate a five-stage decision-making process for any purchase, which highlights the importance of understanding these regional variations.

Figure 3.3.2: Decision marking process (http://www.business-analysis- made-easy.com/Decision-Making-Model-In-Five-Steps.html)

Ho Chi Minh City residents embrace spontaneity and are often willing to take risks, purchasing newly launched products even before they are widely advertised In contrast, Hanoians are more cautious, preferring to stick with familiar brands and carefully planning their purchases This difference highlights a broader lifestyle contrast: while Hanoians focus on future-oriented decisions, Ho Chi Minh City consumers prioritize immediate gratification.

Ho Chi Minh city consumers tend to make purchase pretty fast and feeling-driven.

Ho Chi Minh City consumers are less influenced by self-determination pressures and tend to overlook social stratification when selecting products They prioritize affordability over luxury, leading to more impulsive purchasing decisions While they buy more items, only 62% of these consumers create a monthly budget, indicating a less meticulous approach to spending compared to their counterparts in Hanoi.

Ho Chi Minh City citizens only stands at 52%, much lower compared to a 72% of Hanoi’s.

Deriving from two different lifestyles and buying habits, the two cities thus place their consuming priorities differently.

Differences in consuming habit can be clearly recognized through the economic crisis in 2008 The economic crisis has placed its impact on almost every corner of the world; Hanoi and

Ho Chi Minh City are in the same situation.

However, the levels of influence on the two cities are not identical

Hanoians, known for their forward-thinking and strategic saving habits, remain relatively unaffected by the current crisis, with its impact measured at just 14% In contrast, consumers in Ho Chi Minh City have not significantly reduced their spending, resulting in tighter budgets and a shift towards more affordable brands Consequently, the crisis has a greater influence on Ho Chi Minh City consumers, who face an impact level of 22%, according to a survey by Nielsen Company.

Mobile Usage Behavior - Trend and Opportunities

- By Age: the biggest is group from 25 - 34 years old, next comes 15 - 24 and 35

- 44 years old Group of 45 - 54 years just holds 15% of the total share.

- By Monthly household income: About one out of 3 customers belongs to class

C (4.5 -7.5 million VND/month), 1/3 of all customers belongs to class D (3 – 4.5 million VND/month)

- By Tariff: While prepaid tariff plans are dominant in Vietnam market, postpaid plans are mostly among Class A and B (household income above 7.5 million VND/month)

- Mobile Services: 90% of all mobile owners use SMS and voice services.

Approximately 20% of customers aged 45 to 54 primarily engage in making and receiving calls While advanced data packages that include MMS, chat, email, and video messaging are beginning to gain traction among higher-income users, they have yet to reach widespread adoption among the general population.

The average monthly expenditure on mobile services for most users falls between 100,000 and 200,000 VND Notably, 20% of individuals aged 15 to 24 and 30% of those in income classes E/F spend less than 100,000 VND monthly In contrast, one-third of higher-income A/B users, who typically have postpaid subscriptions, tend to spend over 200,000 VND each month.

- Usage purpose: 3/4 of all males and over 25 year old group are business- oriented users while 15-25 year old group and low-income people (EF) are skewed to personal usage.

- Likelihood to upgrade or replace the current handsets: In general, approximate 43% of all current users plan to upgrade/replace their current handsets Higher likelihood is seen in male.

3.4.2 Mobile user profile by region

The current mobile service landscape shows that subscribers primarily rely on SMS and voice services, with a notable demand for voice-only usage in the South-Central Coast and Mekong River Delta regions, where it accounts for 15% and 18% respectively In contrast, advanced data users are more prevalent in the Southeast and Ho Chi Minh City, with percentages of 19% and 17%, indicating a significant regional disparity in mobile service utilization.

In South East and Ho Chi Minh City, 22% of mobile users spend over 200,000 VND monthly due to their increased demand for advanced data services Meanwhile, users in Hanoi prioritize business calls, with 77% of them allocating more of their budget to this purpose.

The likelihood of upgrading mobile phones is significantly higher in the North-Central Coast and North West regions, with upgrade rates reaching 70-80% In contrast, the North East and Mekong River Delta areas show a much lower upgrade likelihood, at around 30%.

In Vietnam, the economic growth and evolving lifestyle, coupled with various mobile operators offering diverse tariff policies, have led to a rising trend of using multiple SIM cards simultaneously This shift presents significant opportunities for emerging operators like Vietnamobile, which, despite entering the market later, can leverage a comprehensive understanding of this trend to devise effective strategies for tapping into potential market segments.

Many individuals opt to use multiple SIM cards simultaneously to distinguish between their personal and business communications This approach allows them to deactivate their business number outside of working hours, ensuring they remain accessible to family and friends through their personal contacts.

Many customers opt for multiple SIM cards to benefit from various tariff plans Due to regulations set by the Ministry of Information and Communications (MIC), larger mobile operators cannot independently set their prices, while smaller ones can This results in significant differences in mobile service tariffs among operators Consequently, individuals who wish to retain their existing phone numbers while saving on costs often choose to purchase an additional SIM card with a more affordable rate.

Figure 3.4: Reasons to use multiple SIMs (http://www.vietnamobile.com.vn)

Travelers in Vietnam often rely on multiple SIM cards to maintain constant communication, as the quality of service can vary significantly between different operators This approach allows them to ensure connectivity regardless of their location, highlighting the importance of reliable service in the face of inconsistent network coverage.

Competitive forces analysis

Entrance barriers are obstacles that make it difficult to enter a given market With telecommunications industry, a company has to meet main barriers:

- Commercial factors : license, distribution channel, brand name, input material, protection of government

Entering the telecommunications market is challenging due to the substantial capital and advanced technology required Significant initial investment is necessary to establish a comprehensive network infrastructure before launching services Additionally, investors must allocate considerable funds to develop a nationwide distribution channel, ensuring product availability across the country Furthermore, it is crucial to invest in the advancement of 3G technology, as 2G has become outdated in today's global landscape.

In addition to capital requirements, investing in the quality of labor is crucial for success Qualified engineers play a vital role for mobile operators, as their expertise ensures the delivery of stable and reliable services to customers.

The competitive pressure and negotiating power of suppliers in the telecommunications sector are largely determined by their numbers In Vietnam, the limited presence of qualified suppliers—specifically, only Ericsson and Huawei—creates a high competitive pressure, leaving mobile operators with little choice when it comes to purchasing equipment or establishing network systems.

Buyer is a competitive pressure impact to telecommunication industry performance.

Mobile operators face pressure from two key buyer groups: individual and organizational customers Individual customers are instigating a discount price war, prompting operators to attract competitors' clients through enticing promotional campaigns and lower tariff offerings In contrast, organizational customers compel mobile operators to enhance their customer care services, fostering competition based on service quality.

The mobile service market is dominated by a few major players, with Viettel, MobiFone, and VinaPhone holding the largest market shares Smaller and newer operators face significant challenges in maintaining and growing their presence in this competitive landscape.

Telecommunication companies face intense competition across various factors, including pricing, product diversity, availability, service quality, and customer support A critical aspect of this competition is the speed of service launch; operators that delay their offerings risk missing out on significant customer acquisition opportunities.

The emergence of new companies significantly influences competition within a sector, particularly as the number of entrants increases A stronger foundation for these newcomers enhances their impact on the market position of existing companies A notable example is Beeline, which entered the Vietnamese mobile market unexpectedly, posing a threat to established players like Vietnamobile In late 2007, a joint venture between VimpelCom Group and Telecom Corporation of Vietnam Global (GTEL) was formed, leading to the establishment of GTel Mobile and the Beeline Vietnam brand less than a year later Globally, Beeline boasts millions of subscribers, and by 2009, it was recognized by Millward Brown Optimor as one of the top 100 most valuable brands worldwide, ranking among the top 10 in the telecommunications sector with a valuation of $8 billion.

As new operators like Vietnamobile enter the market, they face significant competition from internet-based applications that offer free calling and messaging services For instance, platforms like Skype allow users to connect with friends globally using just a laptop and an internet connection, effectively undermining the international call revenue of traditional mobile operators.

Competitors analysis

As mentioned above, Vietnamobile has seven competitors; in which five operators use GSM technology, the same as Vietnamobile and two others use CDMA technology.

Although CDMA is much more advantageous than GSM technology such as higher speed of data transfer, but this technology is not popular and successful in Vietnam.

The limited availability of terminals supporting CDMA technology is evident, as numerous handset manufacturers release a wide range of new GSM mobile phone models each month In contrast, new CDMA phones are rarely introduced to the market, particularly in the smartphone segment, where recent models are predominantly designed for GSM networks.

Figure 3.6: Mobile operators in Vietnam

MobiFone, established in 1993, is the first mobile operator to provide mobile services in Vietnam Operating under the Vietnam Mobile Telecom Services Company (VMS), it is a state-owned entity under VNPT.

GSM technology and provide both 2G and 3G technologies Despite of firstly launching in Vietnam, MobiFone is just the second largest operator in market share.

However, MobiFone has won award “The most favorite operator” in six consecutive years, from 2006 to 2011

MobiFone has been planning its Initial Public Offering (IPO) since 2006, but the implementation has yet to occur Numerous international telecom companies are eager to partner strategically with Vietnamese telecom operators According to the plan, following the equalization process, VNPT will retain a 51% stake in MobiFone.

France Telecom has shown interest in acquiring shares of MobiFone as the Vietnamese mobile operator prepares for privatization Although the planned listing did not occur in 2010, it remains a possibility if the global economy continues to improve in 2011.

- MobiFone is the second largest mobile operator in Vietnam, has around 34 million clients at the end of December.

- Strong subscriber growth with almost 6 million net additions reported for 2010.

- 2010 revenues reached VND 36 trillion, up by 31.5% in the year, despite intense market competition.

- It is hard to take back the first largest operator from Viettel after many years.

- Recent customer growth driven by discounted tariff strategy.

- World economic crisis and high inflation rate in Vietnam negatively affect to MobiFone performance.

- Behindhand implementation of IPO taking away development opportunities of MobiFone.

- Continuous interest in IPO remains, interested by big international telecom companies such as Vodafone and France Télécom.

- Increase of demand on value-added services such as data (3G) along with increase in smart phone, tablet models.

- Strict decree of registration for prepaid SIM could negatively impact to

- Strong competition of other operators, especially new players having good investment in terms of finance and experience

VinaPhone, launched in 1996, is the second mobile operator in Vietnam and a wholly owned subsidiary of VNPT, operating on the GSM technology platform Currently, it ranks as the third largest mobile operator in the country, holding 23% of the market share, following Viettel and MobiFone In 2009, VinaPhone aimed to increase its subscriber base by targeting 10 million net additions, and by the end of 2010, it successfully registered 10 million new subscribers, bringing its total to 35 million.

2010 VinaPhone aims to cross the 40 million mobile subscribers in 2011 and plans to promote internet mobility services through its 3G network along with boosting the investment for its 3G network.

In recent years, VinaPhone has made significant changes to its product and service tariffs to enhance competitiveness among mobile operators As the first provider of 3G services in 2009, VinaPhone aims to attract more subscribers to transition from 2G to 3G by offering appealing tariffs and a variety of new services and handsets in 2011.

- Strong subscriber growth with a customer base of around 35mn at the end of December 2010.

- Competitively priced tariffs contributing to strong subscriber growth; reported 10mn net customer additions in 2010.

- Having high quality of customer base, most of them working in government office and are postpaid customers

- Early introduction of 3G services has led to market leading position.

- Recent customer growth has been driven by discounted tariff strategy.

- Has not expended distribution channel and taking care of retailers in recent

- There is no change in working style, impacted by governmental working style cause lately react to competitors’ activities

- Possibility for an IPO in the footsteps of MobiFone.

- Development of VAS, especially service of 3G which is useful for jobbers

- Has good and wide network coverage, and receive support of government in expansion network quickly and easily help acquire new customers

- Strict decree of registration for prepaid SIM could negatively impact to acquisition campaign of MobiFone

- Strong competition of other operators, especially new players that have good investment in terms of finance and experience.

Viettel, the largest mobile operator in Vietnam, commands a significant 38% market share and has rapidly ascended to the top despite launching after competitors like MobiFone and VinaPhone This swift growth is attributed to its robust telecommunications infrastructure and crucial licenses for mobile services, internet, and content provision By the end of 2010, Viettel boasted 46.3 million mobile subscribers and 1.17 million 3G subscribers, reflecting a remarkable 39.4% growth from the previous year In 2009, the operator had approximately 42.5 million subscribers, marking a staggering 71.7% increase from around 24.75 million in 2008, with over 1 million new subscribers joining in March 2010 alone.

- Viettel has license to offer mobile service, fixed-wireless service and value- added service.

- Network system is overload because of quickly increase in subscribers

- The network system is old, unable to develop online application of service like other operators.

- Limited distribution channel in rural areas

- Behind rivals VinaPhone and MobiFone in terms of 3G subscriber figures, having commenced services relatively late to the market.

- It is forecasted the mobile market still increase in the next years

- Low tariff strategy and good quality in network should help Viettel keep leading market share in the next years

- Has license of latest technologies, such as WiMax, to upgrade and offer new services.

- Strong competition in price from other new mobile operators

- Most of customers are student who are not loyal and prefer joining promotion

GTel Mobile, a joint venture between Russia's VimpelCom and Vietnam's Global Telecommunications Corporation, provides mobile services under the Beeline brand Launched in major cities like Hanoi, Ho Chi Minh City, and Danang, the company serves a population exceeding 15 million In early 2009, VimpelCom secured a license to establish a GSM cellular network, with plans to invest $1.8 billion in its development.

By the end of 2009, the GTel Mobile joint venture aimed to expand its coverage to over 40 provinces in Vietnam, reaching all 63 cities by the end of 2010, which would serve a population of 41 million and achieve a penetration rate of 48%, up from 26% in October 2009 On April 26, 2011, VimpelCom entered an agreement with Global Telecommunications Corporation to invest up to $500 million in the joint venture by 2013, with $304 million provided exclusively by VimpelCom This investment increased VimpelCom's stake in GTel from 49% to 65%.

- Popular brand name of Beeline in the world, has experience in operation mobile service

- Strong and effective campaigns to promote brand name since launching

- Lack of number resource, especially 10 digits number

- Mobile market is forecasted still increase in next years

- Increasing demand on using more than one SIM

- Many GSM competitors and their quite loyal customers

- No license for operating 3G service

S-Fone is mobile operator using CDMA technology.

In April 2010, the Saigon Post and Telecommunication Corporation (SPT), a leading telecom company in Vietnam, gained control of S-Fone through a joint venture with South Korea's SK Telecom This partnership aims to enhance telecommunications services in Vietnam.

SK Telecom has transitioned its business cooperation contract into a joint venture for the management of the Vietnamese operator As part of this agreement, SPT will reimburse the capital invested by SK Telecom, resulting in the Korean operator retaining only a minority stake in the newly formed joint venture.

S-Fone has license to provide both mobile and fixed-wireless service, value-added service via CDMA2000 1X technology Launching service in 2003, SFone was the third mobile operator joining Vietnam market, but until now, its market share is occupied only around 1% In August 2009, Dow Jones Newswires reported that Korea’s SK Telecom planned to halt further investment in S-Fone and SK Telecom confirmed this in January 2010 It is understood that the decision was due to S-Fone’s low profits and subscriber growth The operator added that it would not abandon its partnership with Saigon Post and Telecommunication Corporation in Vietnamese mobile operator S-Fone.

SK Telecom revealed that S-Fone had around 7 million subscribers as of August

2009 The South Korean operator has reportedly invested around US$ 180 million in

S-Telecom since 2001 According to news reports, S-Fone’s subscriber base grew to 8 million in July 2010.

In November 2010, Saigon Post and Telecommunications (SPT) announced plans to find a new business partner for its mobile service, S-Fone Currently, SPT owns an 80% stake in the joint venture and intends to acquire the remaining 20% from SK Telecom within two years, with plans to subsequently sell 20-30% of the venture to new partners.

As of 2011, S-Fone's strategic direction is uncertain following SK Telecom's decision to halt investments due to unsatisfactory performance There is a possibility that SK Telecom may withdraw from the Vietnamese market, with Rutter Associates Korea, a South Korea-based private equity fund, potentially stepping in to invest approximately KRW 100 billion This funding could be crucial for expanding the network and upgrading S-Fone's existing infrastructure.

- Supported by leading Korean player SK Telecom.

- License to offer fixed-wireless, mobile and value-added services.

- Pending the expansion of network coverage in a long time, S-Fone covers only

13 provinces and cities until now.

- Pricing structure already undercut by Viettel.

By November 2008, the company doubled its subscriber base to 6 million within five months, but this number fell to 4.587 million by December 2009 Despite this decline, local media reports indicated that the subscriber count had surged to 8 million by July 2010.

- Continuous uncertainty over the future of the company after SK Telecom halted its investment in S-Fone.

- The mobile market is still forecasted to increase in next years

- Under the control of market share, thus entitled to price decision

- Advantage of CDMA technology in data speed

- Limitation in CDMA handset models

- Further investment on hold, including 3G, leaving S-Fone vulnerable in the competitive mobile sector.

INTERNAL ANALYSIS

Vietnamobile profile

Vietnamobile, one of Vietnam's seven mobile operators, is a joint venture between Hanoi Telecom Corporation and Hutchison Telecom International Limited Originally established as HT-Mobile in January 2007, the company initially provided mobile services using CDMA technology However, due to challenges in developing CDMA and limited terminal availability, the decision was made to discontinue HT-Mobile In a strategic shift, the company transitioned to GSM technology, officially launching the new brand, Vietnamobile, in April 2009.

Founded in 2001, Hanoi Telecom Corporation specializes in internet services, telecommunications consulting, technology transfer, public telecommunication services, and business property management.

Hutchison Whampoa Limited (HWL) is a prominent telecommunications owner and operator, providing diverse services across 11 countries Their offerings encompass third-generation (3G) multimedia mobile telephony, GSM mobile phone systems, fixed-line services, fiber optic broadband networks, and radio broadcasting.

HWL, operating under the "3" brand, is at the forefront of the 3G revolution, having been one of the first global operators to launch 3G services that enrich lives with diverse multimedia mobile content With a robust 3G presence in countries including Australia, Austria, Denmark, Hong Kong, Ireland, Italy, Macau, Sweden, and the United Kingdom, Hutchison now boasts a customer base exceeding 30.2 million.

Hutchison Asia Telecom, a vital segment of HWL, is dedicated to fostering growth in emerging markets, with a focus on mobile telecommunications in Indonesia, Vietnam, and Sri Lanka.

Along with deployment experience in many different countries around the world and financial ability, Hutchison will help Vietnamobile develop quickly and create an attractive competition in Vietnam telecommunications market.

Figure 4.1: Mobile Operators of Hutchison in the world

Vietnamobile Organization

Figure 4.2: Organization Chart of Vietnamobile

Vietnamobile is structured with a head office and three Mobile Communication Centers (MCC), each focused on specific Key Business Objectives aimed at meeting regional sales revenue and subscriber targets.

The MCC operates three regional offices in key cities across Vietnam: MCC1 in Hanoi, MCC2 in Da Nang, and MCC3 in Ho Chi Minh City, with other departments centralized at the head office This organizational structure enables the Board of Management (BOM) to manage operations flexibly and efficiently across different regions It is designed based on an analysis of Vietnam's geographical features, cultural diversity, and varying consumer behaviors By decentralizing management, regional managers can create tailored development plans that enhance the distribution system, improve the company's image, and conduct targeted market research.

The Sales and Marketing department plays a crucial role in enhancing sales volume and revenue by creating tailored products and promotional campaigns for each region These offerings are designed to meet regional demand while aligning with the company's overall national marketing strategy.

Similarly, IT-NW department’s function is planning the development of the network system to ensure service quality, expand coverage area, and implement new services

Vietnamobile Performance

Since its entry into the market over two years ago, Vietnamobile has rapidly established itself as the fourth largest mobile network operator in Vietnam, following Viettel, MobiFone, and VinaPhone By September 2011, Vietnamobile boasted a subscriber base of 11 million, with projections to reach 12 million by the end of the year The network's coverage extends to 92% of the population, ensuring widespread accessibility.

Vietnamobile, a newcomer in the telecommunications market, has secured one of the four available 3G licenses alongside established competitors like Viettel, MobiFone, and VinaPhone This strategic advantage positions Vietnamobile to attract high-quality customers and enhance its Average Revenue Per User (ARPU).

Vietnamobile has been recognized with the prestigious Vietnam ICT Award 2010 for "The Best Tariff Package Mobile Operator," thanks to its innovative Maxi Talk product This award, organized by the Ministry of Information and Communications in collaboration with Buu Dien ICT News, is judged by a panel of senior government officials and ICT industry experts The Maxi Talk package serves as a competitive advantage for Vietnamobile, offering customers significant savings on on-net voice calls and SMS services.

In 2010, the “Go Orange, Go Vietnamobile - Hoa sac cam cung Vietnamobile”

The recent 16th Annual Communicator Awards in New York recognized a television commercial campaign with two gold awards for “Television” and “Special Achievement - Use of Visual Effects.” The vibrant orange branding of Vietnamobile, evident in its shops and outlets, has established a strong brand presence This dynamic and forward-thinking branding strategy serves as a significant differentiator for its services.

Vietnamobile SWOT analyses

- Hutchison international experience - perceived as international brand

- Strong Distribution - Nationwide FMCG distribution set-up

- Strong Merchandising - Nationwide merchandising team

- Strong Products - 2 price point acquisition strategy (VND 25.000 K and VND 65.000)

- Low subscriber base - advantage of promotional offers

- Poor network perception versus Big 3

- Lack of 10 digit numbers resource – 56 Million Competitor Numbers

- Increasing high end Handset penetration & high internet penetration 53% population being below 25 – Overall industry and new operators stand to gain

- 10 Digit Numbers can attract new and churn postpaid

- New strict policies and regulation from MIC – high promotion on SIM can force profitability down

- New entrants as well as MVNO licenses will spark greater competition

- Cartel between MobiFone and VinaPhone may raise entry barriers

MARKETING-MIX MEASURES FOR VIETNAMOBILE

Vision - Mission - Objectives

Mobile communication services in Vietnam are experiencing significant growth, becoming an integral part of daily life for citizens Vietnamobile stands out as a leading mobile operator in the country, consistently offering customers high-value packages and top-notch service quality.

The mission of Vietnamobile is to be the fastest growing mobile operator in Vietnam with highest ratio of chargeable subscriber base, yielding quality ARPU return

Vietnamobile is determined to become the third-largest mobile operator in Vietnam by subscriber count while also focusing on increasing its Average Revenue Per User (ARPU) To achieve these goals, the company must create and implement a comprehensive marketing strategy that effectively addresses the three key elements essential for a successful mobile operator.

- Acquisition : How to get more new customers using Vietnamobile?

- Revenue : How to motivate customers to spend more money for services?

- Retention : How to keep customers stay long with Vietnamobile?

Market segmentation

In 2011, Vietnamobile achieved a significant milestone by surpassing 10 million customers, establishing itself as the fourth-largest mobile operator in Vietnam A key factor in this success was the launch of the VM-One starter kit, which was the first low-cost option in the market This innovative product was developed with a differentiated marketing strategy, focusing on expanding network coverage and enhancing brand visibility.

Vietnamobile, which translates to "for Vietnamese people," emphasizes simplicity and convenience by offering comprehensive services in one package Unlike other operators that provide various starter packages tailored for specific segments, such as MobiFone's Q-Student and Viettel's Student plans for students, Vietnamobile focuses on delivering an all-in-one solution that caters to the needs of its users.

Q-Teen (MobiFone) or Hi School (Viettel) for the youth; MobiCard (MobiFone) or Economy (Viettel) for everyone The differences of these products are entry cost, tariff of services (voice, SMS, data) and validity And all of them have minimum price of 50,000 VND Customers who want to use them have to consider their demand and then they decide to buy one starter kit that is most appropriate Nevertheless, it is easier to buy Vietnamobile SIM, there is one option with lower price, just 25,000 VND Of course, this SIM has less money in balance than other operators’ one The key advantages of VM-One are lower investment for a SIM The success of this strategy in general and the product VM-One in particular is that it helps Vietnamobile to increase subscribers base very fast It takes only more than 2 years for Vietnamobile to reach 10 million customers while the same target costed the number

Viettel has successfully established itself as a leading operator in the telecom market over the past three years, primarily due to its competitive pricing strategy, which offers voice and SMS tariffs that are 30% lower than its competitors In contrast, Vietnamobile faces significant challenges, as it has not reduced its tariffs while the number of market players has doubled, making the competitive landscape more difficult.

Vietnamobile must reassess its strategies due to current challenges, particularly regarding customer quality and a lower ARPU compared to the top three competitors To effectively design and implement new marketing strategies, it is crucial for the company to identify and understand the specific customer segments it aims to target.

To effectively attract quality customers in the mobile service sector, companies must implement targeted marketing strategies tailored to specific customer groups Key components of these strategies include enhancing product and service design, launching impactful promotional campaigns, establishing robust customer service centers, developing efficient distribution channels, and promoting the brand image This article will specifically emphasize the importance of product design and promotional campaign strategies in achieving these marketing objectives.

Recent surveys conducted through outbound calls by Vietnamobile's customer service team revealed insights into the reasons behind the low Average Revenue Per User (ARPU) Customers provided feedback on various aspects of their experience, highlighting key factors contributing to this issue.

Vietnamobile's customer base is predominantly young, with 34% of users under 20 years old and 54% aged between 21 and 30 This indicates that only 12% of their customers are over 30 Additionally, students make up 40% of the clientele, while self-employed individuals account for just 2%.

Only 13% of Vietnamobile's customers are high-income earners, primarily consisting of office workers This indicates that the overall quality of Vietnamobile's customer base is relatively low, as the majority do not belong to high-income brackets and consequently spend less on daily expenses, including mobile services.

The second factor contributing to this issue is the increasing number of customers using multiple SIM cards from different operators simultaneously This behavior leads to a division of their spending across various mobile service providers, resulting in a lower Average Revenue Per User (ARPU) for each operator.

Figure 5.2.2: Vietnamobile customer use multi SIMs

A recent survey reveals that nearly 60% of Vietnamobile customers utilize multiple SIM cards, with a significant number opting for Viettel as their secondary provider This trend is largely driven by students who seek to minimize their mobile service expenses by taking advantage of promotional campaigns from various operators For instance, customers may switch to Viettel for its current promotions, only to return to Vietnamobile the following week if it offers better deals.

To enhance its subscriber base, Vietnamobile must focus on improving service quality to attract high-income groups, particularly jobbers and self-employed individuals who exhibit a strong demand for mobile services and are willing to spend Additionally, targeting the student segment is crucial, as they represent a future opportunity for high Average Revenue Per User (ARPU) once they graduate and enter the workforce.

5.2.2 Customer survey - Result and Discussion

After analyzing the market and identifying key customer segments—students, jobbers, and self-employed individuals—a targeted survey was conducted to gain insights into their specific needs and behaviors The questionnaire, consisting of 32 questions, aimed to inform the development of effective marketing strategies tailored to these groups.

The Vietnamobile marketing team conducted a face-to-face survey, with each member tasked to interview between 20 to 50 individuals from various segments The results of this comprehensive survey are outlined below.

- Number of candidates: 2,000 students (both University and High school)

- Age: from 15 to 22 years old

 Survey on Jobbers and self-employed:

- Number of candidates: 337 jobbers and 110 self-employed

- Area: based out of Hanoi

 Coincides with university schedule (September to April) with break in February September is the biggest month of purchasing handsets and SIMs for new entrances

 Purchasing decisions are influenced heavily by

- Promotion (includes usage promotion and tariff)

- High entry is not hindrance

 Earlier adopter for new brands

- Lack of network is rejection criteria

 Constant knowledge up-graduation of new promotion / packages

- Benefits need to be easy, understandable and upfront

 Viettel is the number one choice ( 60% market share of new and existing customers)

 65% are multi SIM users, 30% are multiple handset users

 Heavy users of on-net promotions (high need to talk among peer community)

 Early adopter of SMS, VAS, including GPRS, CRBT, games

 Telecom spending per month : 4 - 5 USD / month

 Usage mostly in the evening

 Usage more in weekends compared to weekdays ( peak on Sunday)

Media habits and lifestyle: while television continues popular, internet and radio comes close as second and third ranks

- Most popular programs: movies, entertainment, game shows

- Key channels: VTV3, HBO, Vinh Long

- Peak listening: noon, 7 pm – 8 pm

- Most popular programs: music, news (sports)

- Most popular site: Vnexpress, dantri.com.vn, zing.vn

- Look for: news, entertainment, music, gaming

5.2.2.2 Segment 2: Jobbers and Self-employed

 Prepaid popularity in direct proportion to age: highest below age 25, lowest above age 40

 70% primary prepaid numbers bought between ages 20 – 25 years old Other 30% carried forward from student days

 Primary purchase decision driven by:

 After age 25, very low intention to change primary number

 40% users have a secondary prepaid number The secondary purchasing decision is driven by attractive tariff and promotion

 Hypothetical reasons for changes mentioned were off-net promotions and nice numbers

 Once cross over from student days 30% continues with previous primary

 Most prefer prepaid with conversion to postpaid happening over time

 Reason to change primary SIM: better brand, superior network, good number, corporate decision, postpaid with better number

 Decision to change primary number rarely repeated

 50% have secondary prepaid SIM on strength of promotion

 Secondary number usually change on annual frequency

 Higher pride of ownership with the brand and the number than as a student

 Telecom spending per month : 6 – 7 USD / month

 High off-net usage rather than earlier on-net

 Higher quality handset facilitates more usage of VAS / GPRS

 Calling is not so skewed between day-time and night-time

 Attach more important to service quality and loyalty program than the earlier age

Media habits and lifestyle: increasing influence of television and internet, reducing influence of radio

- Most popular programs: news, sports, movies, entertainment, game shows

- Most popular programs: music, news

- Key channels: XoneFM, VOV traffic

- Most popular site: vnexpress.net, dantri.com.vn, zing.vn

To effectively target future loyal users, telecommunication companies should focus on engaging high-value jobbers and self-employed individuals These segments represent a significant opportunity to transition from their current brand to a more aspirational one, making them a crucial market for long-term customer loyalty.

- For market share, aggressive products and promotions are a must

- Importance of radio and internet in the media mix

- Product and service must be designed specifically to match preferences of the segment

- Strong promotions will get new operator only as far as secondary SIM level

- Main triggers to attract jobber and self-employed segments are brand identification and stable network.

5.2.3 Marketing-mix for students segment

CONCLUSION

The author provides a concise overview of the mobile market in Vietnam, accompanied by a SWOT analysis of Vietnamobile, highlighting its current position and future growth potential.

Based on the findings analyzed on this dissertation, there are some conclusions that can be drawn as follows:

In recent years, Vietnam's telecommunication industry has experienced significant growth alongside the country's economic development, particularly in the mobile service sector The entry of multiple service providers, including the prominent player Vietnamobile, has led to substantial improvements in both the quality and pricing of mobile services, greatly benefiting consumers However, this competitive landscape has also posed considerable challenges for service providers, especially for newcomers like Vietnamobile, as the competition for revenue and market share intensifies.

Vietnamobile's existing marketing strategy is misaligned with its long-term development objectives While the company has successfully attracted a significant number of customers at a rapid pace compared to competitors, its Average Revenue Per User (ARPU) remains below the industry average.

Vietnamobile aims to become the third-largest mobile service provider in Vietnam by focusing on subscriber growth and enhancing service quality To reach this goal, the company plans to implement various marketing-mix strategies informed by surveys analyzing Vietnamese customers' preferences and trends in mobile services.

- Vietnamobile will draw its focus on 3 groups of customers in its marketing strategy:

Students represent the largest segment of Vietnamobile's customer base and are highly responsive to pricing and promotional changes Gaining the trust of this demographic is crucial for Vietnamobile to achieve its goal of increasing market share.

Moreover, as students become graduates, their ARPU will rise accordingly when they find jobs and have incomes.

Newly employed individuals typically require more mobile services than students, making it challenging for Vietnamobile to acquire subscribers from this demographic, as many already have numbers from other providers To effectively attract this group, the company should target the organizations these individuals work for rather than approaching each customer individually By designing service packages that benefit both employees and their companies—particularly by reducing communication costs—Vietnamobile can leverage the current economic downturn and rising inflation as an opportunity to develop and launch a corporate promotion package.

Many entrepreneurs in Vietnam rely heavily on mobile communication to connect with their customers, making it challenging to convince them to change their phone numbers They value their existing contacts and prefer to keep their current mobile numbers However, a recent survey indicates that they are open to acquiring an additional number from another service provider if the number is appealing To capitalize on this opportunity, Vietnamobile plans to leverage its collection of attractive phone numbers to attract this segment of customers.

Apart from introducing customized service packages for the above three groups of customers, Vietnamobile will also draw its focus on developing 3G network service.

Vietnamobile holds a significant competitive advantage in the Vietnamese telecommunications market, as it is one of only four licensed providers of 3G services Unlike its competitors, Vietnamobile focuses on unique offerings such as Mobile Blog and Home Surveillance services, which are not available from other providers The rollout of these innovative 3G services is primarily targeted at major cities across Vietnam.

The marketing-mix model comprises four key elements: product, price, distribution, and promotion This dissertation focuses on an in-depth analysis of only two of these elements due to time constraints Additionally, it does not include a contingency plan for Vietnamobile to address competitors attempting to replicate its product strategy Future research is recommended to explore the remaining two elements and to create a comprehensive backup plan for Vietnamobile.

1 Philip Kotler, “Marketing Management”, eleventh edition, Pearson Education,

2 Kotler, P & Keller, L K (2009), “Marketing Management”, 13th edition.

3 Kotler, P., Adam, S., Brown, L & Amstrong, G (2005), “Principles of

4 Biggam, J (2009), “Succeeding with your Master’s Dissertation- A step- by-

5 Henry Assael – Peter Reed – Mark Patton, ‘Marketing Principle & Strategy’

6 Philip Kotler, ‘Marketing Insights from A to Z’, John Wiley & Sons, Inc.,

7 John E.G.Bateson., 1995, ‘Managing Services Marketing’ Third Edition

1 http://mic.gov.vn/Attach%20file/sachtrang/SachtrangVietnam2010_Eng.pdf ,

2 http://www.gbvs.com.vn/Uploads/Nhan_dinh_dau_tu/Vietnam

%20telecommunications%20Report%20_19052011_BMI.pdf http://www.mmclearning.com/elearningdemo/ professionalcertificateinmarketing/tutorials/c9t11/index.html

3 http://www.lookatvietnam.com/2009/06/mobile-price-war-keeps-people- talking.html, http://vietnambusiness.asia/vietnam-achieves-high-telecom-growth/ http://vietnambusiness.asia/telecom-market-enters-fierce-competition/

4 http://vietnambusiness.asia/telecom-market-continues-to-be-hot/ http://www.vnpt.com.vn/en/News/SocialAct/View/tabid/241/newsid/11138/ seo/Vietnam-Telecom-market-2010-new-investment-opportunities/

Vietnam's telecom market continues to show strong potential for growth, driven by advancements in technology and increasing demand for connectivity Key players in the industry are focusing on innovation and expanding their service offerings to meet the evolving needs of consumers As competition intensifies, companies are investing in infrastructure and enhancing customer experiences, positioning themselves for future success The country's favorable economic conditions and government support further contribute to the optimistic outlook for the telecom sector.

5 http://www.telecomasia.net/node/3583 http://vietnambusiness.asia/a-lot-of-challenges-still-exist-in-vietnam

6 http://www.vnpt.com.vn/en/News/NewsEvents/View/tabid/219/newsid/

14627/seo/ITU-Vietnam-ranks-8th-globally-in-terms-of-mobile-penetration/

7 http://tutor2u.net/business/presentations/marketing/marketingobjectives/ default.html,

8 http://www.consumerpsychologist.com/cb_Segmentation.html ,

9 http: / /static.globaltrade.net/files/pdf/20100403004552.pdf

18 http://www.nielsen.com/vn.html

QUESTIONNAIRE

5 Are you currently using a mobile phone? Yes No

6 Are you using prepaid/postpaid? Yes No

7 How many mobile numbers are you using?

8 Which network are you using for your primary number

9 Which network are you using for your secondary number

10 How long have you been using mobile service?

11 What reasons contribute to your choice of primary network operator? (02 main reason)

For primary number Tariff Promotion Availability

Network quality Network coverage Advertising

For secondary number Tariff Promotion

Network quality Network coverage Advertising

12 Do you often change your mobile number? No 1 month 3 months? 1 year

13 Reasons why you change your mobile number?

Network quality Network coverage Advertising

15 How much credit do you often recharge? (thousand VND)

16 Which recharge service is most convinient to you ?

17 What are the most two favourite services you often use ?

18 Within the last 30 days, which VAS activities did you use ?

Lottery result Weather forecast CRBT

19 Have you heard about Vietnamobile ? Yes No

20 If yes, please specify through which media types ?

21 Which reasons will persuade you use Vietnamobile ?

 Cheaper rate to call off-net comparing to other mobile networks

 Join group package (free on-net call for five numbers)

 VIP Package (ex:>200,000VND, free on-net voice/sms,50% discount on GPRS fee)

 Loyalty programe (ex: monthly gift, discount voucher, lucky draw, gift voucher )

22 Which are the two media channels you often use ?

23 Within the last 30 days : What time do you watch TV ……….

What programs do you watch? (tick 02) News Entertainment

Which type of TV receiver? Cable Satellite Anten

24 Within the last 30 days,what type of prints do you read Print Magazine

25 What are 03 prints do you ofter read ………

26 Within the last 30 days : What time do you listen the radio ………

What programs do you listen ? News Entertainment Sport (tick 02) Education Other ………

What TV channels do you watch (list 03) ………

Where do you listen ? At home Mobile phone On car

27 What are 03 websites you ofter access ………

28 What do you mostly use the Read news Entertainment Print internet for ? Email Search information Other …

29 What TV advertising do you like the most ? ………

30 What telecom advertising do you like the most ? ………

31 What mean of transport Car Motorbike Bike do you often use ? Taxi Bus Other …

32 Do you like to use Facebook on mobile phone ? Yes No

CUSTOMER SURVEY SUMMARY

Age From 22 to 40 years old

5 Are you currently using a mobile phone?

6 Are you using prepaid or postpaid?

7 How many mobile number are you using?

8 Which mobile operator are you using for your primary number ?

Which mobile operator are you using for your secondary number ?

10 How long have you been using mobile service ?

What reasons contributr to your choice of primary network operator ?

11b What reasons contributr to your choice of primary network

12 Do you oftern change your mobile number ?

13 Reason why you change your mobile network ?

On a monthly basis, how much do you spend on mobile usage?

15 How much credit do you often recharge?

What are the most 02 favourite services you often you?

Within the last 30 days, which VAS activities did you use ?

If yes, please specify through which media types

Which features you would like to receive if you choose Vietnamobile ?

Cheaper rate to call off-net comparing to other mobile networks

Join group package (free on- net call for five numbers)

>200K, free on- net voice/sms,

GPRS fee) Loyalty programe (ex: monthly gift, discount voucher, lucky draw, gift voucher )

22 Which are 02 media channels you often use?

23a What time do you watch television?

23b What programs do you watch?

23c What television channel do you watch?

24 Type of prints do you read in last 30days?

25 Three prints/ magazines you often read

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An ninh The gioi Dang yeu The thao & Van hoa Dep Suc song moi Long dong Tien phong Tap chi PC World The thao 24h

26a What time do you listen to radio?

26b What programs do you listen to?

26c What radio channels do you listen to?

26d Where do you listen to radio?

The most frequently accessed websites reveal significant trends in user preferences Vnexpress.net leads with 32% of visits, followed by dantri.com.vn at 22% Other notable sites include vietnamnet.vn with 6%, ngoisa.net at 11%, and mp3.zing.vn at 5% Social media platforms like facebook.com and video-sharing site youtube.com account for 5% and 1% of visits, respectively Additionally, google.com garners 5% of traffic, while a category labeled "other" captures 13% These statistics highlight the diverse online habits of users.

28 What do you mostly use the internet for?

29 What TV advertising do you like the most?

None Vinamilk Vinaphone 3G Heineken Kiddy Xmen Sony Bravia Triump ACB

What telecom advertising do you like the most

31 What mean of transport do you often use?

32 Do you like to use facebook on mobile?