Measuring the effect of the online advertising in xuan trang cats eye pc

***********~~~~~~~~~~~~ ~~~~~~~~~~~¥¥¥¥~¥¥¥¥¥¥¥ ~I~ HCMC UNIVERSITY OF FOREIGN LANGUAGES AND INFORMATION TECHNOLOGY ;1' ~I~ DEPARTMENT OF INTERNATIONAL BUSINESS ADMINITRATION ;1' ~I~ ~I~ GRADUATION PAPER ;1' ~I~ ,I; ;1' ~I~ ,I; ;1' ,I; ,I~ * *'I' ~:~ ,I; ,I; ~:~ 'I' 'I' ,I; ,I; ;1' ,I; TOPIC ,I; ,I; * *'I' ~:~ ~:~ IN XUAN TRANG CAT'S EYE PC ~:~ ~; ~~ ;1' ~:~ MEASURING THE EFFECT ~I~ 'I' 'I' 'I' 'I' 'I' 'I' 'I' 'I' ~:~ ~I~ OF THE ONLINE ADVERTISING ~I~ ,I; ;1' ~I~ ;1' ~~ ;1' ~; ,I; ~I~ ;1' ,I; ~I~ ,I; ~I~ ;1' ;1' ,I; Student's name: NGO THUY DIEM ~I~ ~I~ Class: KD03 - 05 ~I,~ ~I~ Advisor: MBA TRAN DUC TuAN ~II~ ~ ;1' ~ ~ ;1' '1 * ~ **~ ** ;1' ~I~ ~ ~ ~I~ ;1' * • 'I' 'I' 'I' 'I' ~:~ 'I' 'I' 'I' 'I' 'I' ,I; ;1' ~I~ * ,I; ~ ~; ~ JUL Y 2007 * ~I~ ~ ~~ ~ ~~~~~~~~~~~************ ~¥¥¥~¥¥¥¥¥~~~~~~~~~~~~~ ACKNOWLEDGEMENTS I would like to express my thanks to several people who have helped me in carrying out my paper research Firstly but most important, I would like to acknowledge and thank Mr Tran Duc Tuan - MBIS, my advisor, for his enthusiasm, responsibility with all his heart His best advice and comments to my research will be the invaluable lessons for me to perfect my knowledge Secondly, I also give my best thanks to the members of International Business Administration Department of HUFLIT, especially Dean Nguyen Ngoc Huan, Vice Dean Tran Tuy Nga, Ms Thanh Huong and Mr Quoc Hung for their guidance Thirdly, I would like to express the heartfelt thanks to: : Mr Trinh Quoc Tri - MBA - Director : Ms Phan Thi My Loan - Customer Service and Office Manager : Ms La Linh Phuong - Product Manager : Ms Huynh Thi Thu Tam - Chief Accountant : Sales Department And all beloved members of Xuan Trang Company in providing and collecting data related to my paper: Finally, I am very happy to get encouragement from all my friends Their help makes my research more meaning and valuable In particular, I also thank from the bottom of my heart to my parents who always beside and give me moral support wholeheartedly [ ADVISOR'S ASSESSMENT I Basing on analyzing the marketing activities for Xuan Trang Cat's eye PC, the paper measures the effect of online advertising and reveals suggestions for improving the efficiency of Xuan Trang advertising The paper obtains a remarkable meaning because this is a practical issue, which is required with the affirmation about reality and science The latest and newest form of direct media is interactive online Companies are spending millions of dollars to become a player in cyberspace The paper uses the primary and secondary data Interviews or questionnaires commonly include an assortment of forced-choice questions (e.g True-False) or open-ended questions (e.g short answer essay) to which subjects are asked to respond This sort of data collection is sometimes referred to as a self-report Once again, this is a non-experimental, descriptive approach Surveys are particularly useful when researchers are interested in collecting data on aspects of behavior that are difficult to observe directly and when it is desirable to sample a large number of subjects The major limitation of the survey method is that it relies on a self-report method of data collection Intentional deception, poor memory, or misunderstanding of the question can all contribute to inaccuracies in the data The paper contains English books and Internet Data are highly valuable because the researcher is an employee of Xuan Trang Company She gathered from sources of Xu an Trang's competitors Diem selected a completely suitable topic because of its necessity As an advisor, I have a good impression of the writer's sense, independence, and scientific research capability During the process to make the research, Diem always showed that she did her best efforts, was painful in collecting data from many sources, could analyze and synthesize, and was independent and active Moreover, she paid attention to obey the research timing Diem is worth to get high grades with her efforts ii ABSTRACT Nowadays, Internet is more popular in Vietnam when the technology is developing quickly The approach is: "Why don't apply Internet, especially emarketing for advertising of the products or services?" However, the businesses worry whether apply or not due to they not realize the effect of e - marketing, particularly online advertising An aim of my research was to measure the effect of online advertising From that view, the online advertising will be applied more popularly The study entitled "Measuring the effect of online advertising in Xuan Trang Cat's eye PC" is composed of three chapters Chapter one is dealt with the basic knowledge of e _ marketing and online advertising Chapter two describes historical background of Xuan Trang Co., Ltd, the marketing activities and the overview of Cat's eye PC product The last chapter presents some suggestion for Cat's eye PC such as comparing this product with other products in the same group and in the different companies Most expressive part is to set up the campaign plan of online advertising for Cat's eye PC The results indicated that the recognition ofCat's eye PC was very low through the primary data from one survey After the calculation of online advertising plan was showed, the sales objective was obtained and a large number of customers knew Cat's eye PC product The results suggest the presence of this research is the base for explaining the effect of online advertising in not only pharmaceutical industry but also all industries in Vietnam iii CONTENTS Acknowledgement i Advisor's assessment ii Abstract iii Contents iv - viii List of Tables ix List of Figures x INTRODUCTION Research paper objectives Scope of the research Research method Contents of research CHAPTER 1: AN OVERVIEW OF ADVERTISING - 23 1.1 The definition of advertising - 6-8 1.2 Types of advertising 1.2.1 Brand advertising 1.2.2 Retail advertising 1.2.3 Political advertising 1.2.4 Directory advertising iv 1.2.5 Direct - Response advertising 1.2.6 Business - to - business advertising 1.2.7 Institutional advertising 1.2.8 Public service advertising 1.3 Roles of advertising - 10 1.3.1 The marketing role 1.3.2 The communication role 1.3.3 The economic role 1.3.4 The societal role 1.4The future of Advertising 10 1.5 Online Marketing and the importance of e- marketing in business 10 - 14 1.5.1 Online marketing 1.5.1.1 The definition of online marketing 1.5.1.2 The relation between advertising and Internet 1.5.2 The importance of e - marketing in business 15 - 17 1.6 Categories of e-marketing 1.6.1 Search Engines 1.6.2 Email 1.6.3 Online catalogue 1.6.4 Online advertisings 1.7 Online advertising 17 - 23 v 1.7.1 The definition of online advertising 1.7.2 The benefits of online advertising 1.7.3 Online advertising for pharmaceutical 1.7.4 The experiences companies of pioneer e- marketers CHAPTER 2: AN OVERVIEW OF XUAN TRANG COMPANY 24 - 43 2.1 Xuan Trang Background 2.1.1 Xuan Trang History 2.1.2 Xuan Trang Philosophy 2.1.3 Xuan Trang Positioning 2.1.4 Xuan Trang Services 24 - 33 2.2 Evaluation of Xuan Trang marketing activities 33 - 36 2.2.1 Analysis the financial condition of Xuan Trang in recent years 2.2.2 The marketing activities in 2006 and three first quarters in 2007 2.2.2.1 In 2006 2.2.2.2 In three first quarters in 2007 2.3 An analysis of Cat' s eye PC product 2.3.1 Target customer 2.3.2 Product Life Cycle 2.3.3 SWOT Analysis 2.3.4 Marketing plans vi 36 - 43 CHAPTER 3: SOME SUGGESTIONS FOR CA T'S EYE PC 44 - 68 3.1 Comparison marketing plans between I Cool product and Cat's eye PC product 44 - 52 3.1.1 Plan for I Cool 3.1.1.1 The objectives 3.1.1.2 The target markets 3.1.1.3 The quantity J 1.1.4 The strategies 3.1.2 Plan for Cat's eye PC 3.1.3 3.1.2.1 The objectives 3.1.2.2 The target customers 3.1.2.3 The quantity 3.1.2.4 The strategies Comparison and conclusion 52 - 54 3.2 Comparison with competitors 3.2.1 Computer Eye Drops (B&L) 3.2.2 V-Rohto 3.3 Measuring the effect of online advertising for Cat's eye PC 3.3.1 55 - 68 Online advertising option 3.3.1.1 Analysis the survey about the recognition level 3.3.1.2 The concepts for advertising vii 3.3.1.3 Conclusion 3.3.2 How to apply online advertising 3.3.3 Campaign plan CONCLUSION 69 APPENDIX Financial Statements of XT Co., Ltd (2004, 2005 and 2006) REFERENCES REFERENCES ON WEBSITES viii LIST OF TABLES Page Table 1-1: Relation of objectives, adoption process and AIDA model Table - 1: The target markets 45 Table - 2: The target customers 45 Table - 3: The detailed campaign for Cat's eye PC 63 Table - 4: The effect of online advertising 64 Table - 5: Turnover ofCat's eye PC 65 Table - 6: The effect of newspapers and news campaign 65 - 66 Table - 7: The effect of advertorial campaign ix 67 - 68 Chapter 3: Some suggestions for Cat's eye PC 3.3.3 THE CAMPAIGN PLAN It is time to prepare the detailed plan is established by the research writer as following: THE CAMPAIGN PLAN - Product: Cat's eye PC - Target customer: Male and female (20 - 40 years old) - Period: September, 2007 - Target market: Ho Chi Minh city - Campaign: Online advertising - Total budget for marketing plan: VND 3,312 billion! 14 months - Total budget for marketing plan per month: VND 236,571,430/ month - Total budget for online advertising (VND): VND 90 billion - Total budget for online advertising (USD): $ 5,625 (l USD = VND 16,000) - 61 - Chapter 3: Some suggestions for Cat's eye PC Title Place Size Cost Discount (VND) (%) million 10% Cost after Time to Total cost advertising (VND) 30 days 21,6 million 30 days 38 million 14 days 16 million 30 days 14 million 5,4 www.thanhnien.com.vn Left logo (147x60)pixel million 9,4 www.24h.com.vn Third center (420x 120)pixel 10 million 5% million www.tuoitre.com.vn Top banner (460x60)pixel million 0% (468x60)pixel banner million 3,5 3,5 Central www.nld.com.vn 0% million million TOTAL COST: Table - 3: THE DETAIDED CAMPAIGN FOR CAT'S EYE PC - 62 - 89,6 million Chapter 3: Some suggestions for Cat's eye PC After estimating the total cost for campaign, the calculation of measuring the effect of online advertising for Cat's eye PC is prepared Table - 4: THE EFFECT OF ONLINE ADVERTISING Calculation The effect Title Time Participation Total cost (VND per Participation User) 30 www.thanhnien.com.vn www.tuoitre.com.vn www.nld.com.vn 0.24 90 million days 30 www.24h.com.vn 21,6 million 90 million 38 million 0.42 90 million days 90 million 14 16 million 0.28 56 million days 56 million 30 14 million 0.46 30 million days 30 million From the result, the effect of online advertising is very low It means that the less total cost is invested, the more the effect and turnover come back Furthermore, according to AIDA model, measuring the turnover for Cat's eye PC can be estimated as following: - 63- Chapter 3: Some suggestions for Cat's eye PC Participation Get Attention Hold Interest Arouse Desire Obtain Action www.thanhnien.com.vn 90 million million users 900,000 users 90,000 users 9,000 users www.24h.com.vn 90 million million users 900,000 users 90,000 users 9,000 users www.tuoitre.com.vn 56 million 5,6 million users 560,000 users 56,000 users 5,600 users www.nld.com.vn 30 million million users 300,000 users 30,000 users 3,000 users 266,000 users 26,600 users Title 2,156 million TOTAL 26,6 million users users Table - 5: TURNOVER OF CAT'S EYE PC In general, the total customers who obtain Action go beyond the target sales of Cat's eye PC per month So, it is found that the effect from the online advertising is considerable - 64- Chapter 3: Some suggestions for Cat's eye PC Now, we move to one of the best parts to research On May, 2007, the marketing department has carried out the advertising campaign on news and advertorial It is a good idea when comparing the effect of online advertising with the news advertising The detail plan will help the reader more understanding THE NEWS CAMPAIGN - Product: Cat's eye PC - Target customers: Male - Female (20 - 50 years old) - Period: May, 2007 - Market: Ho Chi Minh city - Campaign: News - Total cost (VND): 68, 950 million VND - Total cost (USD): $ 4,286 TABLE -6: THE EFFECT OF NEWSPAPERS AND NEWS CAMPAIGN Title Circulation Total cost The (VND) effect Frequency Newspapers The gioi Phu Nu 110,000 Monday 3,300,000 0.03 Phunu TPHCM 85,000 Tuesday & 3,000,000 0.028 2,200,000 0.046 Friday Tiep thi & Gia dinh 102,000 Tuesday - 65 - Chapter 3: Some suggestions/or Cat's eye PC The gioi van hoa 50,000 Thursday 1,100,000 0.045 Nguoi lao dong 85,000 Daily 2,200,000 0.038 Quoe te tiep thi tieu 45,000 Date and 15 550,000 50,000 Date 5,15 and 0.081 dung Thoi trang tre 500,000 0.1 800,000 0.1 25 The thao & van hoa 80,000 Tuesday, Friday, Saturday Cam nang mua sam 35,000 Date and 15 500,000 0.07 Saigon doanh nhan 30,000 Friday 500,000 0.06 30,000 Friday 2,000,000 0.015 120,000 Thursday 2,500,000 0.048 euoi tuan Sue khoe & doi song Saigon tiep thi News HVT7 (15 minutes) Sunday 14:00 35,000,000 pm Binh Duong(BTV) Wednesday 20 minutes 8:40 am - 66 - 10,000,000 Chapter 3: Some suggestions for Cat's eye PC THE ADVERTORIAL CAMPAIGN - Product: Cat's eye PC - Target customers: Male - Female (20 - 50 years old) - Period: May, 2007 - Market: Ho Chi Minh city - Campaign: Advertorial - Total cost (VND): 88,367 million VND - Total cost (USD): $ 4,286 TABLE -7: THE EFFECT OF ADVERTORIAL CAMPAIGN Title Circulation Size Total cost The effect after discount (VND) The gioi 110,000 7,333,000 0.015 5,850,000 0.014 21,038,000 0.004 9,818,000 0.005 278mmH Phu Nu Phu nu 71mmWx 80,000 18cmWx 12,5cmH TPHCM (Sunday) Tiep thi & 102,000 270mmH Gia dinh The gioi van hoa 64mmWx 50,000 64mmWx 270mmH - 67- Chapter 3: Some suggestions/or Cat's eye PC Thoi trang 50,000 35,000 0.0054 68mmWx 7,650,000 0.004 5,577,000 0.005 15,300,000 0.007 252mmH mua sam Saigon 9,257,000 26,5cmH tre Cam nang 6cmWx 30,000 8,3cmWx 33cmH doanh nhan cuoi tuan Saigon 120,000 tiep thi 8cmWx 33cmH When the effect of the online advertising is compared with the advertising on television shows and newspapers, the detailed difference is realized Although the effect of news and advertorial campaign is lower than online advertising, the cover and the recognition of newspapers is not lager than online advertising The recognition level of television shows and newspapers is not high In addition, the ability to buy the Cat's eye PC is also lower due to it does not seldom arouse the stimulation to pay attention to the product The customers only have time to glance through the advertising news In summary, the estimation must be calculated exactly when setting up the plan It is very important to increase the sales objective and reach more and more the new customers - 68 - Chapter 3: Some suggestions/or Cat's eye PC CONCLUSION The result of the research may be summarized by measuring the effect of the online advertising of Cat's eye PC This research attempted to stimulate the online advertising system in Vietnam and offer the new overview about e marketing, particularly online advertising The finding, however, are very considerable Approximately 18% users who spent more than two hours per day on computer felt the dry eye, 24% users for break back and 11% users for irritated eye On the other hand, the survey showed that only 6.67% Cat's eye PC is selected to use This finding lead us to believe that the recognition level of Cat's eye PC is very low, even no one to use It is possible that it was time to make a suitable plan for Cat's eye PC To obtain the purpose, the online advertising campaign is chosen When the writer calculates and compares the cost and the achievement, the effect of online advertising is very large and feasible Although advertising on television shows and newspapers brought the good effect, the recognition was not as fast and effective as online advertising According to the calculation myself, the effect of online advertising can make the sales objective exceeding very big Besides, the writer readily acknowledge that my research just apply for pharmaceutical industry Maybe other industries will be the difference results Because there is the limit in time, the research paper does not have enough time to carry out many different surveys in other industries to make the research more profound In addition, the lack of experience and the references also limit the research more perfect The writer believes that the future experiments should be measured the effect of online advertising in other industries This research readies as the base for future study in evaluating and applying the online advertising for most of different products or services - 69- APPENDIX Xuan Trang Co., Ltd Balance Sheet December 31, 2004 and 2005 and 2006 2005 2006 2004 Assets Cash Accounts receivable Inventories Other short - term assets 37,200,000 290,314,859 273,915,483 Total assets VND 523, 697, 811 1,099,504,481 6,638,252,946 325,974,690 10,910,980,780 9,626,072,745 Total short - term assets Long - term acc.receivable Fixed assets Total long - term assets VND 825,388,730 2,858,952,771 6,975,784,149 250,855,130 VND 301,559,554 4,587,796,907 4,721,116,284 15,600,000 8,587,429,928 37,200,000 374,528,631 273,915,483 327,514,859 411,728,631 9,899,988,228 11,238,495,639 8,999,158,559 Liabilities Short - term liabilities Accounts payable Unearned revenues Tax payable Payable expense Other liabilities 3,870,000,000 4,114,905,482 49,016,950 18,800,000 4,662,000 2,870,000,000 6,885,753,663 700,156,946 2,500,000,000 5,895,633,662 11,831,385 51,882,000 23,511,000 0 8,057,384,432 8,057,384,432 Total short - term liabilities Long - term liabilities Total liabilities 10,531,303,609 10,531,303,609 8,407,465,047 8,407,465,047 Owner's Equity Capital Total owner's equity Total liabilities and owner's equity 707,192,030 1,842,603,796 591,693,512 1,842,603,796 707,192,030 591,693,512 9,899,988,228 11,238,495,639 8,999,158,559 • Xuan Trang Co., Ltd Income Statement For the Year Ended December 31, 2004 and 2005 and 2006 2006 Revenues from Sales Gross Sales Less: Sales Discounts Net Sales Cost Of Goods Sold Gross Margin from Sales Revenues from finance Financial experises Less: Interests Selling expense Operating expense 19,929,174,989 95,997,492 14,081,942,390 61,054,529 19,833,177,497 14,020,887,861 15,540,123,175 10,840,343,826 4,293,054,322 3,378,371 364,785,987 364,785,987 1,709,054,157 2,042,091,913 3,180,544,035 3,595,873 370,849,003 370,849,003 1,299,195,342 1,353,680,955 -361,407,616 3,751,146,070 Net Profits Other profits Other expenses Total other profits EBIT Income tax Net Income 2005 -367,253,130 2,652,876,297 180,500,636 0 160,414,608 0 180,500,636 50,540,178 160,414,608 44,916,090 129,960,458 115,498,518 • • Xuan Trang Co., Ltd Income Statement For the Year Ended December 31 , 2004 and 2005 and 2006 2004 Revenues from Sales VND 8,152,532,312 Gross Sales 81,154,690 Less: Sales Discounts 8,071,377,622 Net Sales 5,134,647,883 Cost Of Goods Sold 2,936,729,739 Gross Margin from Sales Revenues from finance Financial expenses Less: Interests Selling expense Operating expense 3,345,854 254,784,131 -251,438,277 1,556,833,238 998,688,700 2,555,521,938 129,769,524 Net Profits Other profits Other expenses 0 Total other profits 129,769,524 EBIT Income tax Net Income 36,335,467 93,434,057 • • Xuan Trang Co., Ltd Statement of Cash flows For the year Ended December, 31, 2004 and 2005 and 2006 2005 2006 Cash Flows from Operating Activities Net Income Cash paid to suppliers Cash paid to employees Cash paid to interest Cash paid to tax Other income Cash paid to others Net Cash Flows from Operating Activities Cash Flows from Investing Activities Purchase of fixed and long - term assets Net Cash Flows from Investing Activities Cash Flows from Financing Activities Investment by issuing stocks Cash paid to borrowing short and long - term Cash paid to redeeming issued stocks Cash paid to paying debt Net Cash Flows from Financing Activities Net Increase (Decrease) in Cash Cash at Begilllling of Year Cash at End of Year 2004 11,717,922,217 18,324,435,944 -8,750,785,000 -1,015,270,000 -370,849,003 -31,424,400 -17,224,994,175 -1,429,453,687 -364,785,987 -31,521,000 1,968,225,714 -1,130,627,806 -1,201,424,000 -264,084,121 -29,540,362 2,388,385,909 -4,009,884,677 -2,765,735,985 0 1,000,000,000 -523,829,176 825,388,730 301,559,554 15,450,842 -386,177,091 -386,177,091 300,000,000 2,370,000,000 3,595,873 -2,000,000,000 3,500,000,000 -2,500,000,000 -3,776,428,076 -71,904,954 -1,523,829,176 VND 6,417,555,207 3,345,854 -500,000,000 373,595,873 301,690,919 523,697,811 825,388,730 -196,954,146 -567,380,395 1,091,078,206 523,697,811 REFERENCES Kotler, P and Armstrong, G (1999) , Principles of Marketing, th edition, Prentice - Hall, Inc Perreault, W.D and McCarthy, E.J (2006) , Basic Marketing, 15 th edition, McGraw Hill Wells, W and Burnett, J and Moriarty, S (1989), Advertising Principles & Practice, th edition, Prentice - Hall, Inc Sandage, C.H (1973), Some Institutional Aspects of Advertising, Journal of Advertising, Vol 1, No Trinh Quoc Tri, MBA (August, 2005), The strategy of building company culture for Xuan Trang Co., Ltd in next five years (Chi€n llfflc xGy dlplg win h6a cong ty TNHH XUGn Trang nam tai), paper research Navigos Group, AC Nielsen and Thanh Nien newspaper (January 2007), Vietnam's 50 best employers 2006, internal document Marcus, B.M, Fundamentals of Corporate Finance, McGraw Hill Company th edition, The REFERENCE ON WEBSITES • • www.Wikipedia.com www.Amazon.com www.askmen.com www.xuantrang.com www google.com/marketing , www.Bausch&Lomb.com 1> www.thanhnien.com.vn www.24h.com.vn www.tuoitre.com.vn lO.www.nld.com.vn •