Applying marketing mix strategy for expanding the machinery market in vietnam in tien dai phat company limited

1 NATIONAL ECONOMICS UNIVERSITY ENGLISH FOR BUSINESS DEPARTMENT FACULTY OF FOREIGN LANGUAGES STUDENT: PHAM THI HONG APPLYING MARKETING-MIX STRATEGY FOR EXPANDING THE MACHINERY MARKET IN VIETNAM IN TIEN DAI PHAT COMPANY L IMITED Field: Marketing-mix strategy Code: CQ483952 Supervisor: Tran Thi Thu Giang Hanoi, April, 2010 ACKNOWLEDGEMENTS First of all, I wish to thank my faculty - Faculty of Foreign Languages, Department of Business English of National Economics University, for permitting me to carry out my project I would also give my deepest gratitude to all lectures of Department of Business English for their enthusiastic teaching They gave me not only knowledge but also the precious experiences in life Secondly, I would like to express my deep sense of gratitude to my supervisor, Ms Tran Thi Thu Giang, Dean of Faculty of Foreign Language, made clear my initial ideas, step by step guided me during my internship report writing so that I could finally complete my report in time I own her a debt of gratitude that cannot be measured Thirdly, I am grateful to Mr Ngo Tien Cuong, General Director of Tien Dai Phat Company Limited, and all staff of the company for all their valuable assistances during my internship period I specially thanks to Department of Sales for giving me an opportunity to work and providing me necessary data for my report During the internship period in Tien Dai Phat Company Limited, it helped me to realize the value of working together as a team and new experiences in different working environments, which challenges me every minute Fourthly, I also would like to send my great thanks to my beloved parents and all members in my family for their support and encouragement at every time, and my friends, classmates for sharing with me a lot during my study and research work as well Finally, I would like to express my gratitude to all people who are not mentioned in this acknowledgement by name, but still have contributed to my work and studies in the internship period Pham Thi Hong TABLE OF CONTENTS INTRODUCTION I Background II Rationale of the study .7 III Research objectives IV Research questions V Scope of research VI Methodology VII The Structure of the report CHAPTER1: LITERATURE REVIEW I Marketing-mix strategy and marketing-mix strategy in expanding the consuming market ………………………………………………………… 10 The definition of marketing-mix 10 Marketing-mix strategy in expanding the consuming market 10 2.1 Product strategy .11 2.2 Price strategy 12 2.3 Place strategy 13 2.4 Promotion strategy 13 II The basic factors affecting the application of marketing-mix in business activity …………………………………………………………………… 14 The impact of business environment …………………………………… 15 Factors of business potential …………………………………………….15 CHAPTER 2: AN OVERVIEW OF THE COMPANY I Background of the company 16 Introduction of the company .16 The objectives of the company 17 Areas of business 17 Technical facilities 17 Personnel structure 18 5.1 Organizational Structure 18 5.2 The size of the company 18 II Business performance 20 CHAPTER 3: THE ACTUAL STATE OF APPLYING THE MARKETING-MIX FOR EXPANDING THE MACHINERY MARKET IN TIEN DAI PHAT COMPANY LIMITED I Characteristics of the machinery market in Vietnam and the target market of the machinery ……………………………………………………………….21 Characteristics of the machinery market in Vietnam 21 The target customers of the machinery industry 21 II The current status of applying marketing-mix strategy for expanding the machinery market in Tien Dai Phat Company Limited …………… 22 Product strategy 22 1.1 The decision on the types and categories of products .22 1.2 The decision on the quality of products 23 1.3 The decision on after-sales services .23 Price strategy .24 Place strategy 24 Promotion strategy 25 III Evaluation of applying marketing-mix strategy for expanding the machinery market in Tien Dai Phat Company Limited ………………27 Achievements of the company ………………………………………… 27 The limitations of applying marketing-mix strategy for expanding the consuming market of the machinery in the company ……………….28 2.1 The limitations ………………………………………………………28 2.2 The reasons for the ineffective applying of marketing-mix ……… 29 CHAPTER 4: RECOMMENDATIONS FOR APPLYING MARKETINGMIX FOR EXPANDING THE MACHINERY MARKET IN TIEN DAI PHAT COMPANY LIMITED I Suggestions for improving marketing-mix strategy to expand the consuming market ………………………………………………… 30 Product ……………………………………………………………………30 1.1 Improving the quality through internal capacity 30 1.2 Having specific strategy for new products .30 1.3 Paying attention to after-sale services 30 II Price 31 Place 31 Promotion 31 The other suggestions .32 CONCLUSION ……………………………………………………………….33 APPENDIX……………………………………………………………………34 REFERENCES ……………………………………………………………….35 LIST OF FIGURES Figure 2.1: The organizational chart of Tien Dai Phat Company Limited Figure 2.2: Chart of revenue growth over years ( from 2005 to 2009) Figure 3.1: Performance of direct channel and indirect channel LIST OF TABLES Table 2.1: Estimation of business result from 2010 to 2012 Table 3.1: The category of the machinery Table 3.2: The types of lathe EXECUTIVE SUMMARY For a company with a relatively young history, Tien Dai Phat Company Limited has achieved a global profile that companies with a longer presence in the market will be envious of However, in spite of having advantages of location and human resources, the total revenue of Tien Dai Phat Company Limited has been still low In fact, the company has not maintained and enhanced its position in the market yet In order to overcome difficulties, Tien Dai Phat Company Limited applied marketing-mix strategy for its products, especially, the machinery, one of the products which the company is interested in This study analyzes the application of marketing-mix strategy for expanding the machinery market in Tien Dai Phat Company Limited It starts with an introduction about Tien Dai Phat Company Limited followed by the history and developing process of the company It gives a brief about business status of the company within recent years, then analyzing the current status of application of marketing-mix strategy in Tien Dai Phat Company Limited The strategies of product, price, place, and promotion are considered carefully However, some limitations have still remained in marketing-mix activities In particular, its business activities is poor in promotional activities, lack of marketing staff and their marketing knowledge, limited business network It is suggested that Tien Dai Phat Company Limited should have specific strategies for each P of marketing-mix strategy to get more and more success in the future The suggestions of the products’ quality, specific strategies for new products, after-sale services, price justification, the improvement of direct channels as well as indirect channels, and the development of promotional activities are considered to minimize the limitations of the company INTRODUCTION I Background Our country is developing and integrating into the world, our economy has many positive changes The transition from subsidized centralized economy to market economy under management of the State with the participation of many economic sectors allowed the enterprises to produce, expand trade, and cooperate with foreign enterprises This is an opportunity but also a challenge for all enterprises in Vietnam In order to survive and develop, the enterprises must change organizational structure appropriately Besides, management measures must be dynamic, flexible, the policies must be properly appropriate In order to this, the companies must business oriented the market and the customers, the manufacturers tied with the products which they launched to the market In the world economy, marketing is considered as an important tool to achieve the highest profits for the enterprises Therefore, marketing activities are becoming a major concern of all companies and business organizations In which, marketing-mix strategy is one of sharp and effective tools helping the companies to the success However, it is not easy to apply marketing-mix strategy successfully The companies must have professional knowledge of marketing-mix strategy as well as their developing strategy Tien Dai Phat Company Limited realized the importance of marketing-mix strategy and applied for its business activities II Rationale of the study Tien Dai Phat Company Limited, a private company, considered to operate effectively since its establishment In spite of facing many difficulties and challenges in the early stages of the establishment, the company kept its foothold and continuously developed Marketing-mix strategy is a new strategy the company was applying However, in the initial implementation, the company has had many difficulties and limitations After three month internship at Tien Dai Phat Company Limited, I have learned many lessons and valuable experiences in practical business environment I have come to decision to make the scope of this internship report: “Application marketing-mix strategy for expanding the machinery market in Vietnam in Tien Dai Phat Company Limited” III IV V Research objectives By applying the general theoretical analysis as well as the real conditions of the company, basing on evaluating the advantages, disadvantages, basic limitations and causes of applying the marketing-mix strategy, I will offer some suggestions on marketing-mix solutions to develop the machinery market of Tien Dai Phat Company Limited, contributing to improve market development strategies in the company The study focuses on four main parts Firstly, it is to provide an overview of the company Secondly, it is to introduce a general framework Thirdly, analysis and findings will analyze the current status of application marketing-mix strategy for expanding the machinery market in Tien Dai Phat Company Limited in order to find out its limitations Finally, the study provides the solutions for application marketingmix strategy for developing the machinery market in the company Research questions The internship report is to address a main question: How does Tien Dai Phat Company Limited apply marketing-mix strategy for expanding the machinery market? Sub-questions include:  What is the current status of the company’s business activity?  Does the company apply appropriately the product strategy?  Does the company apply appropriately the price strategy?  Does the company apply appropriately the place strategy?  Does the company apply appropriately the promotion strategy?  What are the existences and limitations of the company?  What are the best suggestions for the company? Scope of research Due to the limitations of time and student’s capacity, I could not research overall business activities of Tien Dai Phat Company Limited As the company operates in the market with a huge number of products in the different industries, I have decided to focus on one of their successful product, the machinery It focuses only on the marketing-mix strategy in the company The current status of marketing-mix in expanding the machinery market are analyzed to find out its limitations, and then to determine solutions to improve the marketing-mix strategy for the company VI VII Methodology For accessibility and availability of information, I have chosen to work on the strategies of Tien Dai Phat Company Limited In order to implement the report’s contents, I use desk research method which helps to accurately evaluate business performance as well as marketing-mix strategy of the company, then establishing measures to enhance competitiveness, expanding the markets In addition, most of information is from secondary sources, also collected from company websites, journals and annual reports Besides, applying basic learned knowledge in combination with the reference material newspapers, internet and other information related to this study The Structure of the report This study includes four main chapters: Chapter I : Literature review of marketing-mix strategy Chapter II : Overview of Tien Dai Phat Company Limited Chapter III: The current status on applying marketing mix strategy for expanding the machinery market in Tien Dai Phat Company Limited Chapter IV: Recommendations on applying marketing-mix strategy for expanding the machinery market in Tien Dai Phat Company Limited CHAPTER 1: LITERATURE REVIEW I Marketing-mix strategy and marketing-mix strategy in expanding the consuming market Marketing activity plays a decisive role in business It guides, directs and coordinate the business activities of the production activities of the enterprises Thanks to 10 marketing activities, the decisions are set out scientifically, the enterprises have enough conditions and information to satisfy all requirements of the customers If marketing is ineffective, the manufactures waste much money to produce the products and services that consumers actually not expect, while many products the customers need, but they not produce In addition, marketing activities help the products to adapt to the market demands It stimulates the research and improvements to help the enterprises to achieve its objectives In fact, marketing changes the demands of the society into the lucrative opportunity In order to this, the companies must make a decision an appropriate marketing strategy Marketing-mix is a tool in modern marketing system for the companies to achieve their objectives The definition of marketing-mix Marketing-mix is the set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market (Philip Kotler, 1996) The components of the marketing-mix strategy are known as the 4P, which are: strategies of product, price, place, and promotion They are combined closely in marketing-mix strategy Depending on each stage of product development, each market, competitive strategy, the companies will choose their marketing strategy effectively It is a combination of four factors in marketing-mix with different importance Marketing-mix strategy in expanding the consuming market Marketing-mix strategy plays an important role in expanding the market In order to exist and develop, the companies need to apply this strategy According the customers’ views, each marketing-mix tool, each P of marketing-mix strategy has a function to supply certain benefits for the customers The content of marketing-mix strategy includes four basic strategies the company can apply 2.1 Product strategy Product strategy is the identification of product categories, quality, design, features, brand name, packaging, sizes, services, warranties, and returns One of the most important aspects of marketing is to be sure to produce products or services that meet the targeted consumer group's needs, as well as their desires When setting the