Marketing strategies and measures to develop business actives of thong nhat rubber company

; -= -~~-1 - HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES INFORMA TION TECHNOLOGY SCHOOL OF LANGUAGES Advisor: Mr Truong Q!.oOJTuan, MBA &>tudent: Le Minh Thu Class: KA 9605 HOMO, JULY 2000 J- ~ • fl "" e' - - " REMARK OF ADVISOR ****** DETAILED OUTLINE ***** CHAPER I: SOME BASIC CONCEPTS USED TO EVALUATE BUSINESS ACTIVITIES OF A BUSINESS ON MARKETING ASPECT 1.1 Business strategies 1.1.1 Some requirements of establishing business strategies 1.1.2 Some business strategies 1.2 Business's microenvironment 1.2.1 The company 1.2.2 Customers 1.2.3 Competitors 1.2.4 Marketing Intermediaries 1.2.4.1 Middlemen 1.2.4.2 Physical distribution firms 1.2.4.3 Marketing services agences 1.2.4.4 Finacial intermediaries 1.2.5 Suppliers 1.2.6 Customers, competitors and suppliers of Thong Nhat Rubber Company 10 1.2.6.1 Customers 10 I ;I 1.2.6.2 Competitors 10 -.z 1.2.6.3 Suppliers 1.3 Market segmentation and the target market 11 12 1.3.1 Market segmentation 12 1.3.2 The target market 15 1.3.2.1 Undifferentiated marketing 16 1.3.2.2 Differentiated marketing 16 1.3.2.3 Concentrated marketing 17 1.3.3 Planning the marketing strategy for the target market 18 1.3.3.1 Definition of marketing strategy 18 1.3.3.2 Marketing mix 18 1.3.3.3 "Four Ps" of Marketing mix 19 1.3.3.3.1 Products 19 1.3.3.3.2 Pricing products 26 1.3.3.3.3 Placing products 28 1.3.3.3.4 Promotion 31 CHAPTER II: EVALUATION OF COMPANY ON MARKETING ASPECT 2.1 Introduction of the Company 33 2.1.1 Company's establishment and development history 33 2.1.2 Company products 34 2.1.3 Company operation scope 35 2.1.4 The process of producing technical rubber components 35 2.1.5 Labour 2.1.6 Management 37 system and Departments of the Company 38 2.2 Business operations of the Company in the last three years 39 2.2.1 Production status of the Company 2.2.2 Foreign operation 40 , 41 2.2.3 Domestic operation 44 2.3 The strengths and weaknesses of the Company 44 2.3.1 The strengths 44 2.3 1.1 Th~ present strengths 44 2.3 1.2 The potential strengths 45 2.3.2 The weaknesses 45 CHAPTER III: SOME MARKETING MEASURES THAT SHOULD BE DONE TO OVERCOME THE WEAKNESSES 3.1 Strategic planning ; 47 3.1.1 Hierarchy of objectives for Ruthimex 48 3.1.2 The mission of the Company 48 3.1.3 Company objectives and goals .• 49 3.1.4 Marketing objecti ves 49 3.1.5 Marketing strategies 49 3.2 Some Marketing measures suggested to overcome the Company weaknesses ~ 3.2.1 Improving the Marketing Department 51 51 3.2.2 Equipping new technology 54 3.2.3 Enlarging the domestic and foreign market 54 CHAPTER IV: SOME SPECIFIC SUGGESTIONS AND CONCLUTION 4.1 Suggestions 56 4.2 Conclusion • • 58 INTRODUCTION In recent years, the economy of our country has changed from centralized economy into market oriented mechanism This has forced the businesses to change in order to adapt with the market because market economy is the competitive economy in which customers are the important elements determining the survival of the businesses They have to know their competitors to make the business strategies for themselves This means that they have to known how to strengthen, reach the profit purpose To this, they have to answer the questions: and for Whom to produce good understanding Nowadays, develop and What, How Those questions can be answered favorably if there is a of Marketing and how to apply Marketing in business operations there are many domestic companies and joint ventures that are aware of the usefulness of this strategy but they are embarrassed to apply and ineffective because of lacking of experiences Therefore, the study of how a business carries on the Marketing strategy successfully to make the customers have favorable thoughts and feelings about its products and repeatedly purchase them is the reason of my carrying out of this research In this research, I would like to represent some Marketing strategies and measures to help THONG NHAT Rubber Company overcome its difficulties in business Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Chapter I: SOME BASIC CONCEPTS USED TO EVALUATE BUSINESS ACTIVITIES OF A BUSINESS ON MARKETING ASPECT I.I.BUSINESS STRATEGIES 1.1.1 Some requirements of establishing business strategies ( First, business strategies must aim to develop the influence of a business and achieve the competitive advantage in the market because business strategy is really neccessary when there are competitors Second, business strategy must guarantee the business safeness Business activities consists of risks that the business has to face Third, business strategy must identify scope, aims and basic conditions to reach those aims That identification must make sure that resources are distributed logically Student: Le Minh Thu I _4 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Fourth, business strategy must predict the business environment in future The more accurate this prediction is , the more suitable the business strategy will be Fifth, the business must have the reserved strategy because business strategy is the thing that will be carried out in future Therefore , when building the strategy, business should count up the bad things which it has to face Sixth, the business strategy must combine the matureness with opportunity If business strategy is not mature, the business will surely fail However, some strategies sometimes fail because of being to mature Finally, the business must identify SWOT in its strategies in order to develop the strengths, use full of the opportunities, avoid the weaknesses, and overcome the difficulties in its business operation 1.1.2 Some business strategies: Depending on analysing and evaluating business environment, the business should know the opportunity and threat affecting to the existence and development of the business Normally, a business can design business strategies as follows: Student: Le Minh Thu Graduation Paper Advisor: Mr Truong Quang Tuan, MBA -Strategy of developing business activitives , pushing up the business strong position in the present market present technology through maketing activitives -Strategy of developing business by diversifying, producing a wider range of products in other to ensure its long-term survival -Strategy of developing business activity connecting input suppliers with consumers or horizontal with another firm producing in foregn countries -Strategy of restricting some of the business activities in case of having risks So that, the business can keep itself safe and prepare conditions to develop when it has opportunities 1.2 BUSINESS'S MICROENVIRONMENT The job of marketing management is to create attractive offers for target market However, marketing management's success will be affected by the rest of the company, middlemen, competitors and various publics These actors in the business's microenvironment are follows: 1.2.1 The company: In making marketing plans, marketing management must take other company group into account, groups such as top management, Student: Le Minh Thu finance, R&D, Graduation Paper Advisor: Mr Truong Quang Tuan, MBA present industry is the period when all of the Companies have to be up date with the new technology, new changes of the competitive markets -The competition in the market is more and more fierce, especially technical rubber, the major products of the Company Therefore, in the the Company may loose some of the big customers in this kind of product -The Marketing Department just been established of the Company seems to be closed because it has and the number of members is not enough for the present market In the market economy, any business wishing to develop its position needs the great and strong marketing system - Marketing activities of the Company does not happen in its business operation It is so passive in introducing the products and looking for the new customers The Company only knows its old customers and thinks that those ones will be its customers forever It is dangerous because there are more and more competitors that are ready to jump into the market So that, the Company may lose all of its customers if it does not have marketing strategy for its products -The domestic market of the Company is so small in comparision with the others The Company needs to widen its business operation scope because local customers are the avantage in decreasing the cost of sales and transportation Student: Le Minh Thu 46 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Chapter III: SOME MARKETING MEASURES THAT SHOULD BE DONE TO OVERCOME THE WEAKNESSES 3.1 STRATEGIC PLANNING: At the corporate level, the Company first d~~~ its overall purpose and mission This mission is then turned into detailed supporting objectives that guide the whole Company Next, top management decides what portfolio of businesses and products is the best for the Company, and how much support to give each one Each business and product unit must in tum develop detailed marketing and other functional plans that support the Company - wide plan Defining the Company Mission Setting Company objectives and goals Designing the business porfolio Planning functional strategies Figure 3.1 Steps in strategic planning Student: Le Minh Thu 47 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA 3.1.1 Hierarchy of objectives for Ruthimex: Business mi sion serve manufacturers 'production Business objectives increase industrial productivity diSversify the industrial goods • Marketing objectives incretse sales search more new foreign markets • • reduce !osts enlarge the domestic market Marketing strategies Table 3.1 Objectives hierarchy of Ruthimex 3.1.2 The mission of the Company: The mission of one Company should be specific, realistic, and motivating It is 11Dr npt too narrow or too broad Therefore, the mission of Ruthimex is not to produce goods Instead, its mission is to serve manufactuers' production Most of its products are industrial goods which are bought by individuals and organizations for further processing or for use in conducting a business Ruthimex goods are component parts entering the other Companies' production They include technical rubber components, soles and all kinds of colour powder which are very useful for industry That mission is clear enough for the Company to answer the questions: What is Company business?, Who are its customers?, what is value to the customers?, what will its business be?, and what should its business be? Student: Le Minh Thu 48 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Answering those questions successfully means that the Company should have the specific business objectives to make the mission more visible and possible 3.1.3 Company objectives and goals: The Company's mission needs to be turned into detailed supporting objectives The mission to serve manufaturers' production leads to the Company objective of increasing industrial productivity This can be done by di\versifying new kinds of industrial goods that decrease the production costs and improve the Company profits 3.1.4 Marketing objectives: Company profits can be improved by increasing sales and reducing costs Sales can be increased by expanding its foreign markets as wellas domestic ones And marketing strategies must be developed to support these marketing objectives Because most of the Company products are used for further processing, price and service are the major marketing factors, and branding and advertising tend to be less important 3.1.5 Marketing strategies: Because the Company products are different from the others, the marketing strategies are, too Coca Cola or Vina Milk may use advertising or personal selling to introduce their products to the public so that they can get the favorable thoughts of customers through their feelings and tastes or by the beautiful and successful advertisements on television or radio Student: Le Minh Thu 49 Graduation Paper Advisor: Mr 1-ruong Quang Tuan, MBA Unlike Coca Cola, Ruthimex products cannot be tasted or advertised broadly because they are limited in some industries and fields The major marketing strategy of the Company is promotion by persuating customers through the quality of the goods as well as the prestige of the Company Besides, Ruthimex customers are also different from the others They are individuals or organizations buying Ruthimex goods not for consumption but for production Because most of Company products are produced according to the orders of the customers with the different sizes Therefore, Ruthimex should develop its promotion strategies through different ways such as: mail, telephone The Company should make its industrial customers think that Ruthimex is the best suppliers that produce the high quality goods with the reasonable prices The Company has to know how to ccommunicate with its potential customers well And the most available tool of promotion is personal selling To this, the Marketing Department of the Company must be improved with the good marketers who are trained to be friendly, helpful persuasive The effective salesperson must know how to keep the customers' interests at heart in order to build a long- run relationship With personal selling, the buyers feel a greater need to listen and respond, even if the respond is apolite " thank you" Student: Le Minh Thu 50 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA 3.2 SOME MARKETING MEASURES SUGGESTED TO OVERCOME THE COMPANY WEAKNESSES 3.2.1 Improving the Marketing Department: At present, this department is not strong and available with its function The reason is that this one has just been established Moreover, there are few workers in this department This is the weakest element in business operation of the Company It may make the Company go down because Marketing Department plays an important role in the current period, the period of fierce competition Nowadays, one company that produces a lot of high quality goods will not strengthen in the competitive market if its marketing activities are not strong Therefore, the necessary thing the Company should is to improve its Marketing Department with the good marketing staff including: - One marketing manager - Two people for searching new markets and developing the present ones - Four salespeople who are skillful in personal selling Those ones should be friendly, and convincing because their duties are to make sales increase and look for new customers This means that they have to look for more and more customers by persuating them to have favorable feelings about the Company products This is not the easy task because they must have the wide knowledge about the industrial market and pay much attention to the buying criteria of industrial buyers such as: delivery Student: Le Minh Thu 51 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA capability, quality, price, repair service, technical capability, production history, financial strength, reputation of the Company, Moreover, they must specialize in the factors of good communication All of them are the senders or the communicators And a marketing communicator must start with a clear target audience in mind The audience may be potential buyers(companies in rubber branch, paint branch, or sewage branch, etc that will develop in future) or current users (Sanyo, VMEP, Sony, and a lot of shoes companies), 0B( competitors such as: An Lac Footwear Company, Bitis' Company, Thai Binh Rubber Company ) The target audience may be in any of the six buyer readiness statesawareness, knowledge, liking, preference, convinction, or purchase These states are shown in the following figure Awareness ~ Knowledge Preference • Convinction Liking ~ f Purchase Figure 3.2 Buyer Readiness States Student: Le Minh Thu 52 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA The buyer readiness states are important to the marketing communicator because the buyers normally pass through these stages on their way to purchase Consequently, the Company marketers must be sure about the stages to design the most suitable way of personal selling that increases the Company profits but decreases the costs However, personal selling may be more expensive than advertising because the Company has to spend a lot for training good communicators as well as good convincing people Moreover, the cost of communication may be high, the Company has to send mail or letters even the Company marketers to the potential customers or the target buyers to persuate them to buy and believe in the quality as well as the prestige of the Company In this tool of promotion, the fame of the Company is really important because thre are some fastidious customers who will not buy the products if that Compaty is not famous And with the quality qualification ISO - 9002,Ruthimex can take this advantage in its marketing activities This qualification shows that Ruthimex products are good in both quality and durability Therefore, to reduce promotion costs, the Company should choose the right people who are possible to design the marketing strategies effectively and successfully so that the Company will not spend much money for effective strategies or other expensives such as: training expense, advertising expense, etc Student: Le Minh Thu 53 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA 3.2.2 Equipping new technology: The old equipment are also one of the factors that restrain the Company development Therefore, Ruthimex should modernize its production technology with new equipment that can decrease labour cost but increase productivity so that the Company can adapt with the changes of the competitive market and get more profits Moreover, the Company workers must be trained to be skillful and welleducated so that they can walk with the development of the economy, the society, and the country The more skillful workers the Company has, the more productivity and profits it gets 3.2.3.Enlarging the domestic and foreign market: Nowadays, the Company domestic market is so small The majority is only in Ho Chi Minh City Therefore, the Company should enlarge its scope throughout the country by: - Sending the catalogue of the Company products to other manufacturers and potential customers (rubber Companies, shoes Companies, or paint Companies, ) - Joining into the products fairs to introduce the Company goods to the customers This is the good way for the customers to know more about the Company because at present, the Company name is only famous to the manufacturers in the same fields or the buyers who are in need the Company products for their process Other people seem to be strange with Ruthimex Student: Le Minh Thu 54 -~ -1 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Therefore, the Company should have its own distribution channel to make the products come to customers easier To this, the investment capital must be great So that, the Company should mobilize by getting support from the Government or by borrowing from the bank Besides, the Company should strengthen its advantages in the foreign market The Compay must know how to keep the current buyers and look for new ones to develop its business operation by disversifying its products, producing more new kinds of shoes, and improving products quality Student: Le Minh Thu 55 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Chapter IV: SOME SPECIFIC SUGGESTIONS AND CONCLUSION 4.1 SUGGESTIONS - All of the Company departments should combine each other, especially the Marketing Department and Production Department, to introduce more high quality products to the customers.The business should avoid the situation that the marketers introduce to the customers the goods the Company cannot produce - The Company should diversify its production by designing and producing new kinds of shoes, especially the children shoes, to serve the domestic market With the new technology, the Company will produce many kinds of children shoes with the reasonable prices The Company shoes will be cheaper than Bitis' Company This is an advantage of the Company because the Company can sell this kind of product to all kinds of buyers from the countryside to the city Morover, Vienamese people like cheap and durable products while the children shoes of Bitis are so expensive Bitis' shoes can only be sold to fixed income household and the poor families cannot Therefore, I think that with the price a 5000 to 6000 VND for one pair of children shoes, Ruthimex may develop its market share in the shoes market Student: Le Minh Thu 56 Graduation Paper Advisor: Mr Truong Quang Tuan, MBA -To the industrial goods, colour powder is the kind of product the Company should widen its consumption market throughout the country Bcause there are more and more potential customers who are in need the colour powder for their process such as: the paint manufacturers, paper manufacturers, soap manufacturers, and so on Most of the manufacturers need colour powder Therefore, the Company should develop this kind of product in production as well as its marketing activities Student: Le Minh Thu 57 -""""IIIl, Graduation Paper Advisor: Mr Truong Quang Tuan, MBA 4.2.CONCLUSION: Today, market economy is the element that helps one Company develop but make the others go bankrupt However, it creates more high quality products This economy forces the Company to have good management system who are get insight the competitive law in the market to design the competitive strategies for their companies Because one business who does not accept competition get itself out of the market To be successful in market, the business needs the good and perfect tools to compete in the high competitive market The company should have appropriate Marketing strategies for each component in its Marketing- Mix To research the market clearly, the business must identify who are its customers, who are its suppliers and who are its competitors Nowadays, the business should consider its customers "the King" who are the central parts in the business operation They determine the supply and demand of the market In other words, the company should apply Marketing concepts because in today market, the supply is much greater than the demand Therefore, the business should satisfy their needs by marketing activities The business must understand the business situation, it means that the business must identify SWOT in order to promote strengths, use full of the opportunities and overcome the weaknsses as well as the difficulties the Company is facing Student: Le Minh Thu 58 , Graduation Paper Advisor: Mr Truong Quang Tuan, MBA Finally, I hope that Ruthimex will develop and widen its operation ~ throughout the world in the near future Its products will be kiked and concerned with the customers all over the world Student: Le Minh Thu 59 REFERENCES ***** Yovonich, B.G (1995) New Marketing Imperatives Petter,J.P.,& Olson,J.C.(1999) New York: Prentice Hall Consumer Behavior and Marketing Strategy th (5 ed).New york: Mc Graw Hill Benedetto C.A.D (1997) New Products Management (5th ed) New York: Mc Graw Hill Comfort, J.&Brieger, N [1992] Marketing London: Prentice Hall International Stephen, I (1996) Micro Economics (2nd ed) London: Pitman Publishing Kolter, P & Amstrong, G (1987) Marketing- An Introduction USA: Prentice Hall Porter, M.E (1996) Competitive Publishing Stratergy Ha Noi: Sience and Technology