STRATEGIC MARKETING PLAN FOR CASUMINA 2008-2010

2 MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MBMM PROGRAM Huynh Ba Chan Nhu STRATEGIC MARKETING PLAN FOR CASUMINA 2008-2010 FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor: Dr Tran Xuan Kiem Ho Chi Minh City 2007 ACKNOWLEDGEMENT OF COMMITMENT I, Huynh Ba Chan Nhu, have prepared and conducted this “Strategic Marketing Plan for Casumina 2008-2010” as the final project of MBMM program With the approval and keen advices of Mr Le Van Tri, Sales and Marketing Director of The Southern Rubber Industry Company and his team, the project has been accomplished by myself and served the company as a real case I trust the legality of all references, information sources, and materials using to complete the project And I am confident to submit it to Professors and MBMM Faculty members ACKNOWLEDGEMENT OF APPRECIATION I would like to say thank you so much to many people who have given me helping hands in this project Your inputs and encouragement are treasureable for my project accomplishment First of all, I would like to show my great appreciation towards Dr Tran Xuan Kiem who has provided me a lot of insightful feedbacks and devoted guidance to my work I simply can say, it is a great chance for me to be with you I’m also thankful to Mr Le Van Tri, Sales and Marketing Director of the Casumina for giving me an opportunity to study about Casumina case and spending your valuable time giving me a lot of market insights Next, I’d also like to send many thanks to Mr Bui Quoc Long and Mr Pham Duc Dat, Sales Executives for their strong supports I’d also like to take this opportunity to present my grateful heart to all professors, lecturers and tutors from the Open University of Ho Chi Minh city and the Solvay Business School In the last one and a half year, you have full-heartedly directed us to the broad path of updated knowledge treasure Besides, I’d like to present my deep thanks to the Post Graduate Office and our program coordinators, Ms Bui Phan Bao Tran, Mr Serge Bywalki for your kind supports, and especially Ph.D Le Thi Thanh Thu for her encouragement at the enrollment stage I’d like to convey my sincerely thanks to my classmates and my group who have shared with me a lot of information and help Last but not least, I wish to express my gratitude to my beloved dad, my husband and the whole family members who give me strength to fulfill the project as well as the whole program TABLE OF CONTENTS Page ABBREVIATIONS i LIST OF CHARTS AND TABLES ii EXECUTIVE SUMMARY iii INTRODUCTION CHAPTER ABOUT THE COMPANY 1.1 Establishment and achievements 1.2 Mission 1.3 Corporate goals 1.4 Core competency and sustainable competitive advantage CHAPTER SITUATION ANALYSIS 2.1 SLEPT Analysis 2.1.1 Social factors 2.1.2 Legal factors 2.1.3 Economic factors 2.1.4 Political factors 2.1.5 Technological factors 2.2 Industry Analysis 2.2.1 Market demand 2.2.2 Raw material supply 2.2.3 Industry capacity and output 2.2.4 Export 2.3 Competitor Analysis 2.4 Company Analysis 11 2.4.1 Strengths 12 2.4.2 Weaknesses 13 2.4.3 Opportunities 14 2.4.5 Threats 14 2.5 Customer Analysis 15 2.5.1 Customers’ decision-making process 15 2.5.2 Influencers 16 2.5.3 Purchasing drivers 16 2.5.4 Key success factors 16 CHAPTER MARKETING STRATEGIES FOR AUTOMOBILE 17 TIRE 3.1 Marketing and Product Objectives 17 3.2 Marketing Goals 17 3.3 Segmentation and Targeting 19 3.4 Point of Difference 19 3.5 Positioning 20 3.6 Marketing Strategies for Automobile Tire 20 3.6.1 Market penetration 21 3.6.2 Market share expansion 22 3.6.3 Brand image building 22 CHAPTER MARKETING PROGRAM 23 4.1 Marketing Tactics 23 4.1.1 Product 23 4.1.2 Price 23 4.1.3 Place 24 4.1.4 Promotion 25 4.2 Financial Data and Projection 25 4.2.1 Sales revenue 25 4.2.2 Financial projection 26 4.2.3 Budget planning 26 4.3 Implementation 27 4.3.1 Corporate structure 27 4.3.2 Corporate culture 27 4.3.3 Human Resource 27 4.3.4 Marketing program implementation 27 4.4 29 Evaluation, Monitoring and Control REFERENCES 30 APPENDICES 31 9i ABBREVIATIONS AFTA Asean Free Trade Area ASEAN Association of South East Asia Nations BPTO Brand Price Trade Off B2B Business to Business B2C Business to Customer CRM Customer Relationship Management DRC Danang Rubber Company ERP Enterprise Resource Planning FDI Foreign Direct Investment GDP Gross Domestic Product HCMC Ho Chi Minh City ISO International Organization of Standardization JIS Japanese Industrial Standards MIS Marketing Information System OEM Original Equipment Manufacturer PNTR Permanent Normal Trade Relation R&D Research and Development SBU Strategic Business Unit SRC Sao Vang Rubber Company US United States USD United States Dollar VND Vietnam Dong WTO World Trade Organization ii 10 LIST OF CHARTS AND TABLES CHARTS Page 2.1 Brand Positioning Map 10 2.2 Casumina Distribution System 12 3.1 Ansoft Matrix Model for Casumina 21 4.1 Revenue of Casumina 2000-2010 25 TABLES 2.1 The Number of Registered Vehicles 2.2 Capacity versus Consumption of Automobile Tire 4.1 Financial Projection 2008-2010 26 4.2 Budget Planning 2008-2010 26 4.3 Marketing Program 28 iii 11 EXECUTIVE SUMMARY Casumina has had good business on tire and tube production during past years when the brand knowledge was scarce and not an important component of success It was enough to develop a product with right balance of quality and price, and good distribution Certainly, the quality, price and distribution are still highly important factors for success in the marketplace But today success requires more Brand equity and long-term strategic marketing plan count a lot to sustain a company’s competitive advantage The Strategic Marketing Plan has prepared for Casumina to outline analysis on Casumina’s problems, opportunities, ambitious goals, and actionable programs to enhance its brand image perception and obtain the leader position in the new automobile tire market of Vietnam The main marketing objectives anchor on intensive growth of radial tire in domestic market, opportunity search to export automobile tire to other developing countries, and strong brand building With the positive growth rate of the industry, 10% per year, we stretch for the goal of 30% increase in revenue in the three coming years 2008-2010 And to achieve the goals, we propose the strategies of horizontal growth for market penetration, general market share expansion with creating differentiation in after-sale services, customer services and brand reposition towards “good quality” and “reliable brand” attributes In fact, the most difficult strategy of Casumina is to change customers’ prejudice on Vietnamese goods quality Therefore, building a new brand concept and thematic brand building programs for Casumina automobile tire have been strongly highlighted in this plan Sub-brand for radial tire is also considered 12 optional in this plan The message of “international quality standards” is found key for the brand communication Next, price plays an important role in a brand success, especially in B2B segment However, it is better to be perceived “cost effective” than “reasonable price” In short, the quality and price factors of Casumina automobile tire need to be in balanced equation, or even better with “value for money” perception Thus, research on Brand Price Trade Off and Brand Health Tracking are also designed in the program to ensure that Casumina has adequate tools to keep track the market trend Moreover, other marketing programs are also very critical for Casumina to gain leading position in automobile tire market They are considered as milestones of Casumina’s strategic planning • In line with above the line activities, we giving Casumina a new and outstanding identity in showroom, point of purchase • B2B sales will be more focused for its great contribution to sales and potential growth • Modern tools to improve management like ERP and CRM are on development As the market leader, Casumina is actually looking at best supports to the business development • Marketing budget has been raised from 0.5% to 4% of total turnover More PR campaign and marketing activities targeting to customers have been considered in the plan 35 Appendix Automobile supply in 2006 Passenger car and mini-bus 32,000 In which: O.E.M in VN 30,000 Imports 2,000 Light truck O.E.M in VN 28,000 Heavy truck & bus O.E.M in VN 4,000 Total 64,000 Appendix Domestic and Oversea Supply of Raw Materials Domestic Oversea Kaolin 100% Synthetic Rubber 100% CaCO3 50% Steel for bead wine 100% Nylon Cord 50% Nylon Cord 50% Steel Cord 100% Carbon Black 100% Chemicals (accelerator, antioxidants…) 100% Silica (SiO2) 100% Appendix Capacity versus Output of Automobile Tire Capacity Company BIAS for BIAS for light truck heavy truck Casumina 600,000 300,000 DRC 500,000 SRC YokohamaVina 500,000 Veloce 200,000 200,000 2,100,000 1,700,000 Total 2006 Output RADIAL BIAS for light BIAS for truck heavy truck 450,000 210,000 700,000 350,000 350,000 500,000 200,000 200,000 500,000 300,000 RADIAL 50,000 100,000 50,000 500,000 1,150,000 Source: The ministry of Industry – Vietnam (2006) 760,000 50,000 36 Appendix Brand Health Performance - Retailers Retailers Brand Health Performance CURRENTLY SELLING REGULARLY SELLING 60 79 Casumina 63 Yokohama 63 10 30 34 20 52 GoodYear 22 60 Chenghin 13 35 Kumho 18 49 Hancook 30 51 SRC 16 34 67 Michelin 34 54 77 DRC Bridgestone BEST SELLING N =100 39 Appendix Brand Health Performance - Owners Owners Brand Health Performance EVER BOUGHT REGULARLY BOUGHT 58 69 Casumina 42 59 DRC MOST OFTEN BOUGHT COVERSION RATE FROM EVER BOUGHT TO MOST OFTEN BOUGHT 29 42 27 46 Yokohama 39 17 Chengshin/ Maxxis 39 19 18 13 18 11 29 33 11 33 SRC Michelin Siam Bridgestone 17 12 24 % 23 17 N =104 76 37 Appendix Brand Health Performance - Drivers Drivers Brand Health Performance MOST OFTEN USED EVER TRIED Casumina 65 DRC 64 30 9 5 8 27 Hancook 24 Chengshin 21 Bridgestone 13 Michelin 32 SRC % 61 29 30 Yokohama 40 24 13 Siam CONVERSION RATE FROM EVER TRIED TO MOST OFTEN USED CURRENTLY USING 45 69 30 17 24 40 47 25 N =240 10 Appendix 10 Brand Awareness by city Owners Brand Awareness (by city) DONG NAI TOTAL 32 Casumina 77 19 66 DRC 13 34 Chengshin SRC Michelin Siam Bridgestone 5 29 63 10 43 27 50 21 56 TOM 60 N =34 55 53 30 N =30 47 20 80 85 20 80 65 45 95 70 N =20* 70 30 65 20 25 55 100 60 25 75 15 95 40 70 10 % 45 100 50 20 63 30 21 87 15 95 65 53 56 20 75 20 17 15 47 68 65 20 77 63 HUE-DANANG 87 15 53 17 HANOI 77 17 79 35 66 68 13 71 82 23 15 78 39 97 100 88 18 48 Yokohama 33 47 94 HCMC 55 40 60 N =20* Total Spontaneous Total awareness *Small base for reference only 74 38 Appendix 11 Brand Awareness - Retailers Retailers Brand Awareness RADIALSPECIALIZED SPECIALIZED RADIAL RETAILERS* RETAILERS* TOTAL 27 Casumina SRC Hancook Kumho Chenghin GoodYear 51 45 59 77 100 41 86 91 35 100 41 92 43 91 32 86 27 100 55 18 96 35 3 95 95 55 95 41 86 27 92 N =100 86 N =22* TOM 71 29 24 100 55 32 96 47 Michelin 94 44 73 18 98 68 15 Bridgestone Yokohama 71 20 DRC BIASSPECIALIZED SPECIALIZED BIAS RETAILERS** RETAILERS** 10 97 72 94 41 95 45 96 49 49 1 % 95 88 33 90 23 83 44 92 37 94 N =78 *Those who sell radial tires the most **Those who sell bias tires the most Total Spontaneous Total awareness 36 Appendix Brand Health Performance of Bias Tire - Owners Owners Brand Health Performance of Bias Tire EVER BOUGHT REGULARLY BOUGHT Chengshin/ Maxxis 30 33 SRC Siam Bridgestone 33 16 12 14 37 Yokohama 13 11 20 N =100 11 N =93 N =83 % 44 30 45 57 DRC Michelin 57 68 Casumina MOST OFTEN BOUGHT CONVERSION RATE FROM EVER BOUGHT TO MOST OFTEN BOUGHT 57 23 12 22 28 33 18 78 39 Appendix 13 Brand Health Performance (Hanoi) - Drivers Drivers Brand Health Performance (Hanoi) MOST OFTEN USED EVER TRIED 60 Casumina 54 DRC CURRENTLY USING 28 26 26 26 CONVERSION RATE FROM EVER TRIED TO MOST OFTEN USED 43 Siam 18 Yokohama 4 14 33 43 50 Michelin 39 18 12 Bridgestone 56 10 12 46 Hancook Chengshin % 48 58 SRC 21 12 N =50 11 Appendix 14 Brand Assessment on Important Attributes - Owners Brand Assessment on Important Attributes IMPORTANCE OF ATTRIBUTES 48 12 70 49 83 31 84 18 70 48 High durabity High safety Smoothly run Grip to the road well Little thermogenetic 47 20 Deep hemp liner Fuel economical 29 DRC Michelin 80 100 Wide availability 30 SRC Chengshin 40 60 Nice Packaging 65 90 Casumina Yokohama 20 Owners 84 72 55 Most important Important Good loading capability Consistent quality Reliable brand N =104 40 Brand Assessment on Important Attributes IMPORTANCE OF ATTRIBUTES 10 43 Reasonable price 16 Recommended by sellers 37 Prestigious brand 11 Good customer services 30 Good maintenance services 06 Good publicity & advertisement 12 Has many attractive promotions DRC Michelin 80 100 Advanced technology 37 70 SRC Chengshin 40 60 Very cost effective 24 Casumina Yokohama 20 Owners 52 Suitable to weather, road condition 43 Diversified types & sizes Most important Imortant 94 N =104 Appendix 15 Brand Loyalty - Owners Owners Brand Loyalty Casumina DRC Yokohama 11 Chengshin SRC Michelin Hancook Bridgestone 11 55 11 39 4 20 26 38 11 17 17 % N =96 12 32 N =65 N =55 29 N =30 10 23 24 10 N =42 N =38 23 12 31 26 18 50 13 28 25 25 31 16 42 N =26* N =29* The only brand I will buy One of few brands I regularly buy *Small base for reference only The brand I buy sometimes The brand I've bought sometimes but not sure will buy in the future I 've never bought it but I might buy it in the future I 've never bought it and won't buy it in the future I've bought that brand but I won't consider to buy it in the furture 88 41 Appendix 16 Brand Assessment on Important Attributes - Retailers Retailers Brand Assessment on Important Attributes IMPORTANCE OF ATTRIBUTES 55 91 48 18 100 Easy to sell brand Wide availability Regularly updated market info 46 Good sales representatives 27 Provide product information 34 80 Has sales supports 38 Bridgestone High margin 64 DRC Yokohama 40 60 Payment on credit 52 22 Casumina Michelin 20 Care for retailers’ business 25 Recommended by coleagues Most Important Important 57 N =100 Retailers Brand Assessment on Important Attributes IMPORTANCE OF ATTRIBUTES 12 Casumina Michelin 20 DRC Yokohama 40 60 Bridgestone 80 100 58 Prestigious brand 48 Good services to sellers 14 60 Good maintenance services 24 Good publicity & advertisement 38 Has many attractive promotion 68 37 Diversified types & sizes 82 58 88 55 90 Most important Important Reliable brand Consistent quality Reasonable price N =100 58 42 Appendix 17 Brand Health Performance – Radial (Retailers) Retailers Brand Health Performance RADIALTIRE TIRE RADIAL CURRENTLY SELLING REGULARLY SELLING 42 Casumina 26 23 DRC 47 37 49 16 18 43 Hancook 22 30 Kumho 27 16 66 Michelin SRC 13 61 Bridgestone Yokohama BEST SELLING 16 50 Chenghin 31 37 GoodYear 14 24 N =22* N =55 * Small base for reference only N =74 40 Appendix 18 Brand Health Performance – Radial (Owners) Owners Brand Health Performance RADIALTIRE TIRE RADIAL EVER BOUGHT 12 Chengshin/ Maxxis SRC Bridgestone 26 N =42 40 10 N =30 29 19 10 17 Michelin Siam 40 10 37 % 56 48 COVERSION RATE FROM EVER BOUGHT TO MOST OFTEN BOUGHT 24 17 33 Yokohama MOST OFTEN BOUGHT 47 43 Casumina DRC REGULARLY BOUGHT N =21* *Small base for reference 57 67 18 77 43 Appendix 19 Brand Health Performance – Radial (Drivers) Drivers Brand Health Performance RADIALTIRE TIRE RADIAL MOST OFTEN USED EVER TRIED 16 29 Casumina 36 DRC 11 Siam 20 Yokohama 15 Bridgestone 10 12 12 22 Michelin 12 SRC N =85 56 16 29 Chengshin 21 14 25 Hancook CURRENTLY USING CONVERSION RATE FROM EVER TRIED TO MOST OFTEN USED 39 58 31 17 50 10 42 14 N =49 40 17 64 17 N =58 10 Appendix 20 Brand Assessment on Important Attributes - Drivers Brand Assessment on Important Attributes IMPORTANCE OF ATTRIBUTES 46 85 15 Reliable brand 62 Very cost effective Advanced technology 44 82 44 30 Reasonable price Prestigious brand Good maintenance services 11 DRC N = 169 Yokohama N = 115 Chengshin N = 66 60 80 100 Consistent Quality 63 24 Casumina N = 225 Siam N = 36 Hancook N = 89 20 40 Drivers Good publicity & advertisement 57 41 Most Important Important Suitable to weather & road condition Diversified types & sizes 12 44 Drivers Brand Assessment on Important Attributes Casumina N = 225 Siam N = 36 Hancook N = 89 IMPORTANCE OF ATTRIBUTES 39 59 40 60 80 100 Deep hemp liner 87 High durability 47 Wide availability 30 82 High safety 34 Fuel economical 16 79 16 20 Nice packaging 55 DRC N = 169 Yokohama N = 115 Chengshin N = 66 Smoothly run 72 Grip to the road well 49 Little thermogenetic 48 86 Good loading capability Most Important Important 12 Appendix 21 Brand Health Performance of Bias Tire - Retailers Retailers Brand Health Performance of Bias Tire CURRENTLY SELLING REGULARLY SELLING Casumina 78 60 DRC 79 58 48 Bridgestone 32 16 35 Hancook Kumho 30 53 SRC 10 26 52 Chenghin 39 GoodYear N =95 21 23 47 Michelin 41 29 59 Yokohama BEST SELLING 4 19 14 N =91 N =78 41 45 Appendix 22 Brand Health Performance of Bias Tire - Drivers Drivers Brand Health Performance of Bias Tire MOST OFTEN USED EVER TRIED 34 67 Casumina 65 DRC 11 Siam 29 Yokohama 22 Hancook Chengshin 19 Bridgestone 19 Michelin 44 26 10 66 18 16 20 25 40 N =191 % 40 4 N =215 50 32 32 SRC CONVERSION RATE FROM EVER TRIED TO MOST OFTEN USED CURRENTLY USING 11 N =204 10 Appendix 23 Brand Personality Brand Personality Casumina is assessed as a “nice, strong, brave, young and reckless” brand The other top brands are perceived of “nice, strong, durable, modern and elegant” Casumina Nice SRC Strong 36 DRC Michelin Bridgestone 20 53 49 18 37 11 25 11 20 62 Brave 24 Rough 23 Young 22 Durable 20 11 Daring 15 13 Modern 14 13 Elegant 12 22 Unique 10 11 10 19 Luxurious Trendy N =185 42 24 N =45 33 10 N =40 47 43 21 52 18 11 22 18 75 18 Yokohama 57 29 16 N = 126 11 30 20 13 34 54 34 28 21 31 N =106 *Based on those who purchased last time & currently using, consider to buy, recommend others, awared of brands (max brands, priority for Casumina, SRC and DRC) 34 18 N =127 ITPC 34 46 Appendix 24 Brand Health Performance (Hanoi) Retailers Brand Health Performance (Hanoi) CURRENTLY SELLING REGULARLY SELLING 45 70 DRC 15 25 55 Yokohama 10 30 65 Michelin 25 50 55 Casumina BEST SELLING 75 Brigestone 45 10 45 Chengshin/ Maxxis 35 GoodYear 60 SRC 30 65 Hancook 40 Birla 10 15 70 Kumho 30 40 Siam 30 10 20 N =22* Small base for reference only Appendix 25 Brand Health Performance (Hue-Danang) Retailers Brand Health Performance (Hue - Danang) Danang) CURRENTLY SELLING REGULARLY SELLING 15 55 80 Casumina 90 95 DRC BEST SELLING 45 Michelin 70 50 Yokohama 70 50 65 Brigestone 40 40 GoodYear 35 80 SRC Siam 40 20 25 60 10 25 50 Birla 10 20 40 Hancook Kumho 70 45 Chengshin/ Maxxis 10 N =20* Small base for reference only 0 45 47 Appendix 26 Reasons for Buying Radial or Bias Tire Owners Reasons for Buying Radial or Bias Tire Reasons for buying Radial Reasons for buying Bias High durability 52 43 Smoothly run Good loading capability 46 Good loading capability 39 High durability 29 19 Reasonable price 19 Grip to the road well 17 Smoothly run High safety 14 Suitable to passenger car/ bus 10 Good heat endurement 10 Not cracked suddenly 10 Grip to the road well 13 Suitable for truck 12 Suitable for long-distance transporation N =21* Small base for reference only 10 N =83 71 Appendix 27 Influencers or Influence Factors Influencers or Influence Factors to Buyers in Decision Making Process Influencers/ Influence Factors 69 Colleagues No influencers/ influence factors 51 Automobile producers Automobile producers 3% Sellers 4% Leaflet/ brochure 1% Sales rep 1% Drivers 12% 27 Advertisement on mass media Sales rep % 30 Drivers Leaflet/ brochure Most Important Influencers/ Influence Factors 66 Sellers Owners 25 Colleagues 21% No influencers/ influence factors 58% 17 14 N =104 64 48 Appendix 28 Influencers or Influence Factors - HCMC Influencers or Influence Factors to Buyers in Decision Making Process Owners HCMC HCMC Influencers/ Influence Factors Most Important Influencers/ Influence Factors % 57 Colleagues No influencers/ influence factors 100 Colleagues 3% 43 Sellers 17 Drivers Automobile producers Advertisement on mass media 23 13 Leaflet/ brochure No influencers/ influence factors 97% Sales rep 17 N =34 66 Appendix 29 Influencers or Influence Factors - Hanoi Influencers or Influence Factors to Buyers in Decision Making Process Owners Hanoi Hanoi Influencers/ Influence Factors 70 Colleagues No influencers/ influence factors % Automobile producers 15% 10 Sellers 50 Drivers 50 Automobile producers No influencers/ influence factors 10% Sellers 10% 30 Advertisement on mass media 25 Leaflet/ brochure Sales rep Most Important Influencers/ Influence Factors Colleagues 45% 20 15 Drivers 20% N =20* Small base for reference only 67 49 Appendix 30 Influencers or Influence Factors – Hue & Danang Influencers or Influence Factors to Buyers in Decision Making Process Owners Hue-Danang Hue-Danang Influencers/ Influence Factors 60 Colleagues No influencers/ influence factors 55 Sellers 55 % Leaflet/ brochure 5% Automobile producers No influencers/ influence factors 30% 40 Advertisement on mass media Sales rep 5% Sellers 10% 35 Drivers Drivers 10% 30 Leaflet/ brochure Sales rep Most Important Influencers/ Influence Factors 40 20 Colleagues 40% N =20* Small base for reference only 68