The marketing strategies of fpt distibution company the official distributor of nokia in vietnam

-;'0- , "': • ! oj THE MARKETING STRATEGIES OF FPT DISTRIBUTION COMPANY THE OFFICIAL DISTRIBUTOR OF NOKIA IN VIETNAM Acknowledgement Advisor's assessment Index I INTRODUCTION: II CONTENT: Chapter 1: General concepts about the theme What is marketing? The marketing process The marketing mix a Product 11 b Price 13 c Place 15 d .Promotion 18 Chapter 2: Overview of FPT Distribution Company Introduction to FPT Corporation a: Background 20 b Business 20 c People 21 d Solution - Product - Service , 22 e Clients 22 f Partners 23 g Organization chart 23 h The Corporate strategy 24 Branches companies 25 FPT Distribution Company Overview a Establishment and Development 26 b Organization structure 27 c Professional distributor 28 d Partners 29 e Projects support 30 f Company goals 30 Chapter 3: The marketing strategy of FPT Distribution Company ] The marketing process 3] The marketing strategy ofFPT Distribution a Product - - Common products 35 Office-mobile products 38 Fashionable products • 40 Multimedia products 42 High-end products 48 b Price 50 c Place 53 d Promotion - Advertising 56 ' - Personal Selling 57 - Sales Promotion 57 - Public Relations 60 Chapter 4: Analysis and Suggestion I Competitors a Thuan Phat Co Ltd 62 b Lucky CO.Ltd :)3 c Samsung 66 d Motorola 67 SWOT Analysis a Strength ; 69 b Weakness 70 c Opportunities 70 d Threat 7J " Suggestion III a Product 72 b Price 72 c Place 73 d Promotion 73 CONCLUSION REFERENCE 74 -, InDEX Figure Figure , 5, : Figure , Figure ]2 Figure Figure , Figu're , ,' Figure Figure 15 , 19 20 23 : 27 Figure 10 3] Figure 11 53 Figure 12 58 Table 2] Table 26 Table Tab 1e ~ 52 65 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Introduction Vietnam has been preparing for entering the World Trade Organization The "open-door" policy has attracted more external invested capital In fact, the market in Vietnam is changing rapidly, more and more private companies, joint-stock companies as well as foreign companies are established As a result, needs of exchange among them are increasing Therefore, telecommunication has become an essential and important part of their life This is also the reason why I choose the topic "The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam" FPT Distribution Company, a member of FPT Corporation, has been known as a famous mobile phone distributor FPT Distribution always delivers to customers the most perfect products and services It has also been determining its prestige and leading capacity in distributing mobile phone in Vietnam Nowadays, marketing "plays an important role in society" (Lamb, Hair, and, McDaniel, 1999:15) and is necessary to business It guides the entire company in doing business Moreover, it also decides the success and failure of the business In this little research, I would like to analyze some of the marketing strategies of FPT Distribution Company, the official distributor of Nokia in Vietnam The focus of this paper is on how FPT applied successfully and effectively those strategies and some suggestions on the way to international integration The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam The paper consists of chapters: the first chapter of my research is about some general concepts about the theme which give us basic understanding about Marketing An overview ofFPT Distribution.Company is mentioned in the next chapter, we will have a close look into the company's establishment and development In the third chapter, I would like to analyze the marketing mix of the company which plays an important role in the company's success Then the last chapter analyzes some advantages and disadvantages of FPT, its competitors, and gives some suggestions to improve its marketing strategies Some methods used in doing this paper: Reading primary data: textbooks, references, documents Getting secondary data: magazines, newspapers, Interne Collecting data and statistic Interviewing Observing and taking pictures Analyzing data Giving conclusion from what I have studied The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam CHAPTER I: General concepts of the theme WHAT IS MARKETING? In the past long time, we used to confuse between marketing and the "stimulating-sales" technique such as pushing attractive offers, advertising loudly, putting the buying pressure on potential customers The activities made many people think that marketing is just the means of selling any product to any customer However, this thought contains the final purpose of marketing We had been misunderstanding because the "stimulating-sales" technique is only one of marketing ways to achieve its goals But what does "marketing" actually mean? Today marketing must be understood in a new sense of satisfying customers' needs According to Kotler, P & Gary, A (ed.), 1996, Principles of Marketing, 8th edition, New Jersey: Prentice Hall, Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with each others To explain this definition, we will examine the following key terms: NEEDS: Human needs are states of felt deprivation They include basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and selfexpression These needs are not invented by marketers; they are basic part of the human makeup WANTS: Wants are the form taken by human needs as they are shaped by culture and individual personality A hungry person in the United States might want a big Mac, French fries, and a Coke A hungry person in Bali might want mangoes, suckling pig, and beans Wants are described in term of objects that will satisfy needs People have almost unlimited wants but limited resources Thus, they want to choose products that provide the best value and satisfaction for their money The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam DEMANDS: Human wants that are backed by buying power PRODUCTS: The concept of product is not limited to physical objects It is anything that can be offered to the market for attention, acquisition, use or c,onsumption that might satisfy a want or need It includes physical objects, services, persons, places, organizations and ideas SERVICE: Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything EXCHANGE: The act of obtaining a desired object from someone by offering something in return TRANSACTION: A trade between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement and a place of agreement MARKET: The set of actual and potential buyers of a product or services To understand the nature of market, imagine a primitive economy consisting of only four people: a fisherman, a hunter, a potter, and a farmer There are three ways: Self-sufficiency: they gather the needed goods for themselves - Decentralized exchange: each person sees the other three as potential "buyers" who make up a market Centralized exchange: a merchant appears and locates in a central area called marketplace Each trader brings goods to the merchant and trades for other needed goods However, here are some other definitions: "Marketing is the performance of business activities that direct the flows of goods and services from producer to consumers or users" "Marketing is getting the right goods and services to the right people at the right place at the right time at the right price with the right communication and promotion" "Marketing is the creation and delivery of a standard of living" The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam In 1985, the American Marketing Association approved this definition: "Marketing as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives." Figure shows the three difference way in which these traders could meet their needs (Kotler, P & Amstrong, G (1999) Principles of Marketing, 2nd edition, 1999: Prentice Hall, p.9) Forms of Exchange (a) Self - sufficiency (no exchange) ~~ ~_/ ~ercha~ / (b) Decentralized exchange ~ (c) Centralized exchange FIGURE]: Evolution toward Centralized Exchange - - -1 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam new models, playing game, accessing the internet, etc Besides, the customers who visited the showroom on this occasion many other attractive activities (Tuoi Tre Online, 27 October, 2005) On 10 March, 2006, the FPT Distribution Company celebrated a press conference at Sheraton Hotel to announce the publishment's genuine stamp for Nokia cell phone The reason is there are many kinds of non-tax products with lower price in the market but their quality is not reliable This makes customers get trouble when using In order to avoid mistake for consumers, FPT Distribution Company - the official distributor of Nokia in Vietnam published the new genuine stamp which is pasted on the rear of mobile phone's skin With these activities, the company has asserted the belief of customers using Nokia genuine cell phones, they are also the FPT's commitments about products' quality, services and consumers' interests (Source: http://www.jdc.com.vn) Moreover, to build up a good "corporate image, in April, 2006, FDC contributed VND 100 million to build a nursery school in Tach Mnga, Cu E Wi, Krong Ana village, Dak Lak province to help many children to go to school 61 { The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Chapter 4: ANALYSIS AND SUGGESTIONS L COMPETITORS: In this changing challenging world, to understand customers is not enough There are many factors that impact on the business's operation Some factors can be controlled, but some cannot Competitiveness is one among them which could heavily impact on the existing business The company can't help paying attention to their competitors, they have to know clearly and exactly about their rivals Competition pressure plays the role of a motivator in the development of a product According to Philip Kotler, the master of marketing, the way to beat your competitors is to attack yourself first, work hard to make your product line obsolete before your competitors In my opinion, FDC should consider its competitors as an important part in its marketing activities I would like to make a comparison and have the SWOT analysis in two aspects: competitors and product Competitors FDC has two competitors who are also official distributors of Nokia in Vietnam They are Thuan Phat Co Ltd and Lucky Co Ltd Thuan Phat Co Ltd: - Headquarter: C4 Giang Vo Street, Hanoi - Tel: 04.726 1008 - Fax: 04.726 1008 - Email: c4giangvo@thuanphat.net The Thuan Phat Company became the official distributor of Nokia in Vietnam on 29 October, 2002 The company has built some retailers with Nokia Professional Centre - NPC and Nokia Concept Store - NCS Especially, 62 / The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam some outlets such as 191 Ba Trieu St., C4 Giang Vo St., 20 Hai Ba Trung St are evaluated as concept stores which are firstly applied in Asia-Pacific area of Nokia Corporation Besides, the company has set up a distribution channel with over 500 wholesalers and retailers throughout the country Generally, the Thuan Phat's distribution is mainly concentrated on the North area The company has a unified organizational structure, an active and professional employee-staff and a lot of distribution experience Thuan Phat Company is one of the big competitors ofFDC in Nokia mobile phone market Lucky Producing Trading and Import Export Co., Ltd: Headquarter: 157 Ly Chinh Thang Street, Ho Chi Minh City Tel: 08 848 0720 Fax: 08 8480721 Email: luckyco@hcm.vnn.vn After Dong Nam Associate crisis; Nokia had chosen Lucky Producing Trading and Import Export Co Ltd as an official distributor in Vietnam However, its size is not large and it only operates in the South of Vietnam Together with other brands, Lucky Co Ltd celebrated a program "NokiaEbullient and Live with World Cup 2006" from June 12 to July 03, 2006 to encourage customers to sell their products When buying any Nokia cell phones, customers would receive a lucky scratched-card The prizes include a suspension hook, a night pen, a handbag, and a sportive bag In estimating, the Nokia's market share of Thuan Phat Co and Lucky Co is about 30% while the market share of FDC is 70% They are not too strong to defeat FDC, but they also have effects to the FDC's operations (FDC's market information) 63 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Products There are many manufacturers with many products in the market, such as Samsung, Motorola, Siemens, Sony Ericson, LG, Panasonic, Pantech, Innostream However, I would like to analyze two competitive products which are ranked in the top three with Nokia: Samsung and Motorola Here is the table of competitive price between Nokia, Samsung and Motorola Range Range of price 7.000 P850 9.480 I II MPx220 4.730 V3i 5.180 E680i 5.749 >5.000 end (Unit Price: VND 1,000) Table 4: The competitive price of Nokia, Samsung and Motorola (Source: FDC's market information, May) 65 I l The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Samsung: In the current market, there are many kinds of cell phones However, when mentioning this subject, many people often think of Samsung cell phones because of their beautiful appearance and they are suitable for the demands of young people Here are some of Samsung mobile phones: ' ' m ;~ :ij! E530 D520 P730 '# E770 X700 According to Table 4, the price of Samsung's products is rather higher than other products of other manufacturers, but their consumption is still strong because of fashionable appearance and special features In term of advertising, Samsung often advertise on television and Il1 newspapers These are such media whose watchers and readers belong to all social background Therefore, their products get in touch with customers easily Moreover, there are many sales promotion programs for customers In recent days, there is a program which is attracted remarkable attention from the customers - "Enjoying summer with Samsung mobile phone" (http://www.samsung.com.vn) This program is a sincere thank to the customers From 20 May, 2006, when customers buying one of the X700, D510, E770 mobile phones, they will receive some presents with the value of up to VND 1.000.000, such as a fonn to install cable television, high quality steam fan, sport bicycle, Polo bag liI20,05 ~~ 20,06,2006 hole ~n ttet qua fl£~ 66 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Motorola: Motorola is also a famous trade-mark of mobile phones from the past to now From the past years, the return of Motorola was marked by the range of V3 products with rather slim style attracting many customers With the reasonable price (according to Table 4), Motorola has obtained a part of market share including students and low-income people ~~ m ~ 0=@) C168 L7 E398 161IlJ c;J~ ,,-:~ V3 V3i Together with other company, Motorola also has many sales promotion programs in order to stimulate consumer's Cup atmosphere, Motorola celebrated purchase To respond to the World the program "MOTODZO-30 enthusiastic days" from May to June, 2006 which received the customers' back up When buying any Motorola cell phones, customers would receive a set of baggage and a lucky scratched-card The set of baggage includes a fashionable cap and W orId Cup competitive schedule The scratched-card was participated in drawing program, 10 NC 29-inch r-~- ,: I' i \, L-,-" televisions (http://www.direct.motorola.com) 67 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Besides, Motorola Company has "Motoreward" program for their retailers According to this program, each agent when selling any Motorola cell phone will receive some scores, each score is equivalent to $US 1, like the following table: Model Score Model Score V3 Razor 3.5 E398 2.5 U6 4.0 E680i 4.0 C1l7 1.0 C261 1.5 Cl57 1.0 C139 1.0 C257 1.5 L6 2.5 C390 1.5 L7 3.5 V3i 4.0 This program is supported actively by the agents; therefore, the turnover of Motorola increases steadily In recent times, Motorola has surpassed Samsung and ranked second Their salesforces usually get in touch with agents, their sales promotion are always notified to the shops quickly although some of those mobile shops are not their official agents Thanks to close customer-care policy, they have got many remarkable achievements At the end of the year 2005, Motorola fmished an impressive business year with its sales increased 86.6% in comparison with 2004 (according to GFK Market Research Company) (Tuoi Tre Online, Monday, 20 February, 2006) 68 , The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam IL SWOT ANALYSIS: SWOT is the popular analytical method that focuses on the strength, weakness, opportunity, and threat of a business It is very useful method to get a specific look at business's operation By SWOT analysis, we can know the weakness and threat of a business, then find a feasible way to tum them into strength and opportunity Strength: • Nokia is a popular brand name that customers always believe in its quality Products which are distributed by FPT Distribution Company are firstly thought of when the customers would like to buy a cell phone • Nowadays, mobile phone is not just used for making a phone call, it is also a tool of entertainment, working, Internet access, and so on So, thanks to modem technology, Nokia mobile phones met such a demand by offering many attractive value-added services Especially, N-Series products have appeared with many special features that aim to the officers because of the new tendency of Nokia that mobile phone is now called "multimedia computer" • The FDC has a wide distribution network with over 800 agents around the nation There are bases in Hanoi, Ho Chi Minh City, Da Nang and Can Tho, and in the future the company will expand more bases in some other provinces • The employee staff of the company is well-trained, very active, enthusiastic and has good working responsibility Each salesman has the total turnover of up to millions ofUSD per year • The company has professional management system and strong financial support from many famous banks 69 , - The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Weakness: • According to weekly reports of CS (or Consultant Sales), consumers often complain about some new products' quality such as 3250, 6280, N80, 6030 FDC is only a distribution company, so it cannot interfere in products but the quality of products also affects FDC' s development • In recent times, the agents of the company have purchased products from competitors such as Thuan Phat and Lucky because of the lack of products The reason for that is not the company's lack of finance or planning, but it depends on the Nokia's allocation Vietnam is only a small area in comparison with neighbors like China, Singapore So, the larger markets have the priority in being allocated products • The operation of FDC is very huge, so the company cannot control the setting price of agents For example, competitors can decrease the prices of some products because of its limited import While FDC cannot decrease the price as its competitors because the volume of imported products is often very large, if they decrease price for that volume, the profits cannot subsidize the expenses Opportunity: • According to GFK Market Research Company, Nokia has been still ranked at the top of cell phone market The distribution of Nokia products also contributes to the company's increasing turnover The market share of Nokia's products was 29.8% in 2004 However, since becoming the official distributor of Nokia, FDC has been contributing to the increasing market share of Nokia to 57% in 2005 (Source: http://vietnamnet.vn/kinhte/thegioi/2004/06 ) 70 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam • The FDC has been building a salesforce to expand its provincial market by celebrating many sales promotion programs to encourage retailers selling efforts • In this competitive market, many operators such as Mobifone, Vinafone, Viettel, S-Fone decrease their calling fees to attract more subscribers, more and more people would like to use mobile phone So the continuous increase of subscribers of some operators also contributes to the increasing turnover of FDC Threat: • Because of Dong Nam crisis - a distributor of Nokia before 2002, the Nokia Pte didn't use the policy of sole distributor anymore They have been building the system of multi-distributors, so FDC will have more competitors • The entry of AFTA and WTO in the future of our country will create many opportunities for foreign distributors with strong power, finance and prestige to enter Vietnam's market The competition will be stronger and stronger because of the appearance of many brands • Besides foreign competitors, FDC also faces with some domestic rivals Together with FDC, Thuan Phat Co Ltd is also the official distributor of Nokia in Vietnam with a rather large distributing system over 500 agents In recent times, Thuan Phat has spent a large number of money on redecorating its premise and shops • Lucky is also a distributor of Nokia, but Lucky's agents often contact it thanks to its close relation with customers and vice versa Lucky usually visit their agents even the shops are not their official agents 71 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam IlL SUGGESTION TO IMPROVE FDC'S MARKETING STRATEGY: After considering carefully all the materials, data, and advice, I would like within my narrow abilities - to express my opinion and some major suggestions to FDC as I think it would help Product: • FDC should maintain and develop the strength of top-ranked products The weekly meeting of CS group is very useful, they collect information about the market, agents and customers' needs that help the staff understands more clearly about them and will have suitable strategies • Moreover, they can also know about the weak quality of products From that, FDC can contact Nokia producers to overcome disadvantages and to release many more products which meet the customers' satisfaction • The quantity of product consumption is not equal between large cities and provinces, for example, Hanoi and Ho Chi Minh City attract more high-end products while low-end ones are consumed in other provinces Therefore, the company must have suitable allocating strategies Price: • The price placed in showroom of the company is often higher than the price of the agents That doesn't mean the FDC cannot control the price, but its purpose is to build gradually a unified pricing system throughout the distributing network around the nation • The price protection policy should be maintained in order to encourage retailer selling efforts and attract more shops or stores to become FDC's official agents 72 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam Place or distribution: • Continuing to expand the FDC's distribution network in the nationwide, especially creating more agents or bases in the Central and Mekong Delta provinces • Taking care of the company's agents, even they are not the official agents of the company Often getting in touch with agents, and quickly inform its sales promotion to retailers • Expanding and enhancing the selling ability of dealers by training agent's staff and offering appropriate incentive policies for agents, improving the commission policies, manage and develop agencies in a fierce competition environment Promotion: • Building up the strategic, long term and consistent advertising roadmap in a clear schedule, carrying out the implementation and evaluation of effectiveness periodically and setting out timely appropriate adjustment • Recognizing that advertising IS a long term investment, concentrating on increasing brand preference of customers • Because sales promotion is a short term incentive, so FDC should try to set up more attractive programs • Increasing the budget for sponsorship, and charity activities Such a thing would polish the image ofFDC in customers' mind 73 The marketing strategies of FPT Distribution Company - the official distributor of Nokia in Vietnam COttCLUSIOtt In conclusion, communicative need of customers is increasing So, telecommunication has become an essential and important part of their lives Moreover, the mobile phone market is more and more competitive between brands, but their main purpose is to serve customers FPT Distribution Company is not an exception It always delivers to customers the most perfect products and services It has been also determined its prestige and leading capacity in distributing mobile phone in Vietnam Generally speaking, FPT Distribution Company has successfully applied different marketing strategies during the past years and has achieved its desired goals and accomplishments as mentioned above Since becoming the official distributor of Nokia, FDC has been contributing to the increasing market share of Nokia It shows that marketing also plays an important role in the development of both FDC and Nokia Although FDC has achieved a part of success in the market, the company also has to overcome some difficulties - especially, before the entry of World Trade Organization The company should develop available strengths and improve weaknesses in order to stand steadily not only in local market but also in foreign market 74 REFERENCE Lamb, C., Hair, J F & McDaniel, C (1999) Essentials of Marketing, Ohio: South Western College Publishing Kotler, P & Amstrong, G (1999) Principles of Marketing, 2"d edition, New Jersey: Prentice Hall Payne, A (1993) The Essence of Services Marketing, 7: Prentice Hall Nghiem, L V (1994) Services Marketing Management, Hanoi: Labor Pu b1ish ing Phu, V T (1994) Basic Marketing, HCM City: Education Publishing Doanh Nhan Sai Con, May, 2006, p.24 The FDC company's market information, April, 2006 The FDC company's market information, May, 2006 The FDC's CS weekly report, May, 2006 10 http://www.fpt.com.vn II http://www.fdc.com.vn 12 http://www.thuanphat.com 13 http://www.tuoitre.com.vn 14 http://www.thanhnien.com.vn 15 http://www.vietnamnet.vl1 J http://www.samsung.com.vn 17 http://www.direct/motorola/col11