Marketing strategy for successful competition

TRƯỜNG ĐẠI HỌC MỞ TP HCM HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL MBAVB3 LÊ THỊ HỒNG HẠNH MARKETING STRATEGY FOR SUCCESSFUL COMPETITION: A CASE OF SAIGON GROUND SERVICES IN 2013-2016 Tai Lieu Chat Luong TUTOR: DR VO THI QUY MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Ho Chi Minh City (2013) i COMMITMENT I hereby, Le Thi Hong Hanh, confirmed that my thesis preparation and the content was written by myself with information studied and obtained from reliable sources I undertake this is my own research project All information, data and survey results are true and never announce in any other research projects Ho Chi Minh City, April 2013 Le Thi Hong Hanh ii ACKNOWLEDGEMENT First and foremost, I would like to express my gratitude to the support and guidance from my tutor, Dr.Vo Thi Quy who gave me her continuous guidance during doing the final project Without her, my project would not have been completed I would like to say thank you to: - Professors from the Solvay Business School and Open University of HCMC for all support throughout the whole program - Management Board of Open University Ho Chi Minh City who have provided me a very good condition for studying and sharing ideas - All members of MBAVB3 and Group who always encouraged me to share during the study and implement the final project - Mrs Le Thi Thu Ha with her encouragement suggestion and enthusiastic help I am special thanks to Mr Danh who is kindly enthusiastic about supported and encouraged me throughout the dissertation process No words could possible to express deepest gratitude to my beloved family for their inspirational and moral support During executing the final project, due to the limitation of experience and knowledge, I am unable to avoid some mistake I hope the Professors could help me to improve for achieving better results in the future Finally, I wish you good health and so much success in work and life! iii ABSTRACT Established in 2005, Saigon Ground Services (SAGS) is a subsidiary of Airports Corporation of Vietnam (ACV) After years of development efforts, SAGS becomes the dynamic and professional provider of full - range ground services at Tan Son Nhat International Airport (SGN) SAGS ambition to become the leader in ground handling services with safety and international standards, overcome one great competitor which has many years of experiences - Tan Son Nhat International Airport Ground Services (TIAGS) SAGS has been continuously improving service quality and applying modern aviation technology to all operations in order to meet and exceed customers’ expectations The project firstly internally assessed company situation, come out what SAGS’s competitive advantages, what SAGS’s weaknesses to figure out opportunities and threats in ground handling service sector in Ho Chi Minh City Following the internal assess, a qualitative and quantitative survey were conducted to get information from the market, understand market characteristic, its demand and SAGS’s target customers needs for setting up marketing strategies for successful competition The project also did some research about SAGS’s competitors via external sources to understand what they are doing well and not well, what is the direction of SAGS for differentiation strategy should be Based on main findings, a proposal differentiation marketing strategies was chosen Some recommendations have then been suggested to grow sales and build up brand name for SAGS v TABLES OF CONTENT COMMITMENT i ACKNOWLEDGEMENT ii ABSTRACT iii TUTOR’ C COMMENT iv TABLE OF CONTENT v LIST OF ABBREVIATIONS viii LIST OF FIGURES ix LIST OF TABLES x LIST OF PICTURE xi CHAPTER - INTRODUCTION OF THE PROJECT 1.1 Introduction 1.2 Statement of the problem 1.3 Purpose of the project 1.4 Research methodology 1.5 Scope and limitation 1.6 Structure of the project CHAPTER – LITERATURE REVIEW 2.1 Marketing definition 2.2 Marketing strategy and Services marketing mix 2.3 Target consumer, market segmentation and positioning 10 2.4 Competitive marketing strategy 12 2.5 Market Analysis 12 2.6 Porter Five Force 14 2.7 Competitive advantages 19 2.8 SWOT analysis 21 CHAPTER – MARKET ANALYSIS AND RESEARCH FINDING 22 vi 3.1 Market analysis 22 3.1.1 Market size 22 3.1.2 Market growth rate 23 3.1.3 Industry cost structure 26 3.1.4 Market trends 27 3.1.5 Key success factors 28 3.2 Porter Five Force 29 3.2.1 The threat of entry 29 3.2.2 Rivalry among the industry competitors 29 3.2.3 Threat of substitutes 30 3.2.4 Bargaining power of suppliers and buyers 30 3.3 Macro environment analysis - PEST Analysis 31 3.3.1 Political 31 3.3.2 Economic 32 3.3.3 Social 32 3.3.4 Technology 33 3.3.5 Legal 34 3.3.6 Geographic and demographic 35 3.3.7 Summary of company’s opportunities and threats 35 3.4 Micro environment analysis 36 3.4.1 Company overview 36 3.4.2 SAGS’s customers 38 3.4.3 Human resource 40 3.4.4 Marketing 41 3.4.5 Price policy 43 3.4.6 Financial 44 3.4.7 Investment 46 vii 3.4.8 Research and development 46 3.4.9 Summary of company’s strength and weakness 47 3.5 Competitive capacity 48 3.6 SWOT analysis 49 3.7 Result and discussion of customer survey 50 3.7.1 Qualitative research 50 3.7.2 Quantitative research 51 CHAPTER – MARKETING STRATEGY OF SAGS IN YEAR 2013-2016 4.1 Marketing strategy 59 4.1.1 Marketing objective 59 4.1.2 Targeting, segmentation, and positioning 59 4.1.3 Competitive advantages strategy 61 4.2 Marketing Mix 7Ps 61 4.2.1 Product – Services 61 4.2.2 Price 62 4.2.3 Promotion 64 4.2.4 People 65 4.2.5 Place 66 4.2.6 Process 67 4.2.7 Physical evidence 70 CHAPTER – CONLUSSION 72 REFERENCES & APPENDICES 73 viii LIST OF ABBREVIATIONS AHM Airport Handling Manual IATA International Air Transport Association ICAO International Civil Aviation Organization IGHC IATA Ground Handling Council ISAGO IATA Safety Audit for Ground Operation PIR Property Irregular Report SAC Southern Airport Corporation ACV Airport Corporation of Vietnam SAGS Saigon Ground Services TIAGS Tan Son Nhat International Airport Ground Services SASCO Southern Airports Services Company Limited SGHA IATA Standard Ground Handling Agreement SLA Service Level Agreement CAAV Civil Aviation Administration of Vietnam CAA Civil Aviation Authority SGN IATA letter code of Tan Son Nhat Airport HCMC Ho Chi Minh City ix LIST OF FIGURES Figure 2.1 Services marketing mix Figure 2.2 A model for structural analysis 17 Figure 2.3 Porter’s Three Generic Strategies 20 Figure 3.1 Market structures of ground handling services sector 22 Figure 3.2 Revenues of ground handling services sector in 2012 23 Figure 3.3 Number of foreign airlines in Ho Chi Minh City 24 Figure 3.4 Number of passengers each year (whole Vietnam) 26 Figure 3.5 Cost structure of Ground services by percentage 27 Figure 3.6 Marketing cost 42 Figure 3.7 Growth rate of cost and profit over years 45 Figure 3.8 SAGS’s key performance 2009 – 2012 45 Figure 3.9 SAGS’s service capacity 56 72 The project proposes differentiation marketing strategy This requires SAGS always take the advantage of resources in capital, experience and people to find out their own business direction The ultimate aim is to bring a satisfaction to the customers with the best services but the most reasonable price 73 REFERENCES & APPENDICES REFERENCES English books Michael E Porter 1998 Competitive Strategy Techniques for Analyzing Industries and Competitors The Free Press New York, USA 422 Evelyne Resnick 2008 Wine Brands: Success Strategies for New Markets, New Consumers and New Trends Wiltshire, UK 199 Steffen Bohm 2006 Repositioning Organization Theory: Impossibilities and Strategies Palgrave Macmillan UK Dave Stein 2004 How winner sell, 21 proven strategies to out sell your competition and win the big sale (2nd edition) Dearborn Trade Publishing USA 240 Shiv Mathur and Alfred Kenyon 2001 Creating Value: Successful Business Strategies Reed Education and Professional Publishing UK 383 Robert Cavana, Brian L Delahaye, Uma Sekaran 2001 Applied business research: qualitative and quantitative methods J Wiley & Sons Inc Australia 486 Kristin Anderson and Carol Kerr 2001 Customer Relationship Management (Briefcase book) McGraw-Hill New York, USA 164 Peter Brown 2011 Market Watch Volume 11 iSupply New York, US 25 Vietnamese books Nguyen Hoa Binh Tai lieu tiep thi (Marketing Documents) Vietnam Ta Thi Hong Hanh 2009 Hanh vi khach hang (Customers’ behavior) Giao Duc Publisher Vietnam 200 Ly Qui Trung 2010 Xay dung thuong hieu (Brand building) Tre publishing Vietnam 178 74 APPENDICES INTERVIEW FORM FOR CUSTOMERS: Do you think the reputation of SAGS brand affect customers’ decision to choose SAGS? Do you satisfy with promotional program of SAGS? Do you want more? Which aspects create competitiveness for SAGS in comparison with other competitors? Please give some ideas to improve the marketing activities of SAGS to satisfy customers? INTERVIEW FORM FOR SAGS’ MANAGERS: Do you think which external aspect to influence the business of SAGS? Do you think which internal aspect to influence the business of SAGS? What you think about marketing activities of SAGS? Do you have your own marketing activities for SAGS or not? Do you want to improve the marketing activities of SAGS nowadays or not? 75 LIST OF CUSTOMERS IN SURVEY No 10 12 13 14 15 16 18 19 20 21 22 Code SV EK OZ LD JT QZ CV UN S7 NH B7 QR AK 3K TR FD TK AE 7C Airlines SAUDI ARABIA AIRLINES (SV) EMMIRATE AIRLINE (EK) ASIANA AIRLINES INC (OZ) AHK AIR HONGKONG (LD) LION AIR (JT) INDONESIA AIR ASIA (QZ) CARGOLUX AIRLINES (CV) TRANSAERO AIRLINES (UN) SIBERIA AIRLINES (S7) ALL NIPPON AIRWAYS (NH) UNI AIRWAYS (B7) QATAR AIRWAYS (QR) AIR ASIA (AK) JETSTAR ASIA (3K) TIGER AIRWAYS (TR) THAI AIRASIA CO., LTD (FD) TURKISH AIRLINES INC (TK) MANDARIN AIRLINES (AE) JEJU AIR (7C) 76 CUSTOMER SURVEY FORM COMPETITIVE POSTION SURVEY Thank you for your talking time to complete the survey The responses from this survey will be used to determine the competitive position of SAGS compare with key competitor TIAGS Name: …………………………………… Airline: ……………………………… Current Job & Title: ……………………………………… Please assess the competitiveness of SAGS in comparisons to the main competitor, TIAGS (1: very bad; 2: bad; 3: normal; 4: good; 5: very good) Items SAGS TIAGS Q1 Company size 5 Q2 Reputation 5 Q3 Location 5 Q4 Existing portfolio customers 5 Q5 Management ability 5 Q6 Flexibility of the company 5 Q7 Price 5 Q8 Security level 5 Q9 Training program for staff 5 Q10 Customer service 5 Q11 Baggage Handling service 5 77 Q12 Loading supervision Service 5 Q13 Weight and balance service 5 Q14 Coordinator service 5 Q15 Ramp Service 5 Q16 Cabin cleaning service 5 DATA ANALYSIS RESPONDENT OF CUSTOMER' S ANSWER SUMMARY Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Custo Name of Airline SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS mer 4 4 5 4 4 SAUDI ARABIA AIRLINES ( EMMIRATE AIRLINE (EK) 5 4 4 4 4 5 4 4 5 5 5 ASIANA AIRLINES INC (OZ 4 BRUNEI AIRLINES (BI) 5 4 4 4 4 4 AHK AIR HONGKONG (LD) 5 5 5 5 4 4 LION AIR (JT) 5 5 4 5 5 4 4 5 5 5 5 4 4 INDONESIA AIR ASIA (QZ) 5 5 5 5 4 CARGOLUX AIRLINES (CV) 5 5 4 5 4 4 TRANSAERO AIRLINES (UN 10 SIBERIA AIRLINES (S7) 5 5 5 5 4 11 VLADIVOSTOK AIR (XF) 5 5 4 4 5 5 5 5 4 12 ALL NIPPON AIRWAYS (NH 13 UNI AIRWAYS (B7) 5 5 5 4 14 QATAR AIRWAYS (QR) 5 4 5 5 4 4 15 AIR ASIA (AK) 5 4 5 5 4 4 16 JETSTAR ASIA (3K) 5 4 5 5 4 4 17 K- MILE AIR (8K) 5 5 5 5 4 4 18 TIGER AIRWAYS (TR) 5 4 5 4 5 5 5 5 5 19 THAI AIRASIA CO., LTD (FD 5 4 5 5 4 5 20 TURKISH AIRLINES INC (TK 5 5 5 5 4 5 21 MANDARIN AIRLINES (AE) 22 AIR MEKONG (P8) 5 5 5 4 4 5 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS 4 4 5 5 4 SAUDI ARABIA AIRLINES ( EMMIRATE AIRLINE (EK) 4 5 4 4 4 4 5 4 4 4 ASIANA AIRLINES INC (OZ BRUNEI AIRLINES (BI) 5 4 4 4 AHK AIR HONGKONG (LD) 5 4 4 4 5 5 LION AIR (JT) 5 4 4 4 4 5 5 4 4 5 4 INDONESIA AIR ASIA (QZ) 5 5 4 4 4 4 CARGOLUX AIRLINES (CV) 5 4 4 5 5 TRANSAERO AIRLINES (UN SIBERIA AIRLINES (S7) 5 5 4 5 5 4 VLADIVOSTOK AIR (XF) 4 4 4 4 4 5 5 5 4 5 5 4 5 ALL NIPPON AIRWAYS (NH UNI AIRWAYS (B7) 5 5 4 4 4 4 4 QATAR AIRWAYS (QR) 5 4 4 5 4 AIR ASIA (AK) 5 4 4 5 JETSTAR ASIA (3K) 5 4 4 5 5 5 K- MILE AIR (8K) 4 4 4 5 4 TIGER AIRWAYS (TR) 5 4 5 4 5 5 4 4 5 THAI AIRASIA CO., LTD (FD 4 4 4 5 4 TURKISH AIRLINES INC (TK 5 4 4 4 4 4 MANDARIN AIRLINES (AE) AIR MEKONG (P8) 4 4 4 5 4 Order Name of Airline 10 11 12 13 14 15 16 17 18 19 20 21 22 DATA ANALYSIS (n = 22) Question Company Average Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS 4.32 5.00 4.27 4.91 4.18 4.59 4.09 4.91 4.82 4.50 4.86 4.18 4.32 4.00 4.32 4.41 Question Company Average Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS SAGS TIAGS 4.55 4.59 4.36 4.68 4.41 4.09 3.95 4.23 4.14 4.23 4.55 4.41 4.55 3.95 4.36 4.45 78 PASSENGER SURVEY FORM BẢN KHẢO SÁT DÀNH CHO HÀNH KHÁCH My name is Le Thi Hong Hanh I am current conducting the research for my MBA thesis relating to the services of SAGS This survey aims to assess your satisfaction to the services and staffs of SAGS Please reply to the below questions and stick √ in suitable place Tôi tên Lê Thị Hồng Hạnh Tôi tiến hành nghiên cứu cho luận văn Thạc Sĩ Quản Trị Kinh Doanh, đề tài liên quan đến dịch vụ SAGS Rất cảm ơn bạn thực khảo sát Bản khảo sát nhằm đánh giá mức độ hài lòng bạn dịch vụ nhân viên SAGS Bạn vui lòng trả lời tất câu đánh dấu √ vào thích hợp The assessment scale is (Thang đánh giá là) Not completely satisfy (Rất khơng hài lịng) Dissatisfy (Khơng hài lịng) No comments (Khơng ý kiến) Satisfy (Hài lòng) Very satisfy (Rất hài lòng) Thank you very much for your help (Cảm ơn giúp đỡ anh/chị) Q1 About the service of SAGS Rating scale Về dịch vụ SAGS Thang điểm Customer services 5 Dịch vụ làm thủ tục lên máy bay Q2 Baggage handling service 79 Dịch vụ quản lý hành lý Q3 Lost and Found service 5 5 5 5 5 5 Dịch vụ tìm hành lý thất lạc Q4 Waiting time to receive baggage Thời gian chờ nhận hành lý Q5 Handling lost & damaged baggage Giải hành lý hư hỏng, mát Q6 Assistance to customers when delay, or cancel flight Trợ giúp hành khách hoãn, hủy chuyến bay Q7 Assistance to special customers: old, handicap, childs Trợ giúp hành khách đặc biệt: người già, tàn tật, trẻ em About the staffs of SAGS Về nhân viên SAGS Q8 Easy to access Dễ dàng tiếp xúc Q9 Communication skills Khả Giao tiếp Q10 Job handling skills Năng lực giải công việc Q11 Customer service attitudes Thái độ lịch Q12 Time to finish the work Giải nhanh chóng Q13 Ability to deal with customers requirements Khả đáp ứng yêu cầu hành khách Q14 Reliability 80 Đáng tin cậy Q15 Understanding customers Hiểu rõ hành khách Please give your information (Bạn cho biết bạn): Gender (Giới tính): Male (Nam) □ Female (Nữ) □ Age (Tuổi): ……… PASSENGER SURVEY RESPONDENTS' ANSWER SUMMARY Passenger No 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Q1 5 5 5 5 5 4 4 5 4 4 5 5 5 5 Q2 5 5 5 4 5 5 5 5 5 4 5 5 4 Q3 4 5 5 5 4 5 5 4 5 4 4 4 5 4 5 Q4 5 4 4 5 5 4 4 4 5 5 5 5 4 4 4 5 Q5 4 4 4 4 5 4 3 3 4 4 4 4 Q6 5 4 4 5 5 5 4 4 4 4 5 4 4 5 4 Q7 5 5 4 4 4 5 4 5 4 5 5 4 4 4 4 5 Q8 5 5 5 5 4 4 5 4 5 5 5 4 5 4 4 4 Q9 Q10 Q11 Q12 Q13 Q14 Q15 4 5 5 4 5 4 4 4 5 4 5 4 4 5 4 4 4 4 5 5 5 4 4 4 4 5 5 4 4 4 4 5 3 4 4 5 5 5 4 5 4 5 5 5 4 4 5 5 5 5 4 4 4 5 5 4 4 4 5 5 4 3 4 5 4 5 5 4 4 4 4 4 4 4 5 5 4 4 4 4 4 5 4 4 4 4 4 5 5 4 4 5 4 4 5 5 5 4 4 4 4 5 5 4 4 4 4 5 5 Passenger No 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 Q1 5 4 5 4 5 5 4 4 5 4 5 5 3 4 4 Q2 5 5 4 4 5 5 5 4 5 4 5 5 5 4 5 Q3 4 5 5 5 5 3 5 5 5 3 4 4 4 4 Q4 4 4 4 4 4 4 3 4 3 4 3 4 3 3 3 3 Q5 4 5 4 4 5 4 4 3 3 4 4 4 3 Q6 5 5 5 4 4 5 5 4 4 5 4 5 4 Q7 5 4 5 5 5 5 4 5 4 4 4 5 5 5 4 4 5 Q8 5 5 5 4 5 4 5 5 5 5 5 4 4 5 5 4 4 4 4 Q9 Q10 Q11 Q12 Q13 Q14 Q15 5 4 5 5 5 4 4 4 4 4 5 4 4 4 4 4 4 5 4 5 4 5 4 5 5 5 5 5 4 4 5 4 5 5 4 4 4 4 5 4 5 5 5 4 5 4 5 5 3 5 4 4 4 5 4 4 4 5 4 5 4 4 4 4 5 5 5 4 4 4 4 4 5 5 4 5 4 4 4 4 4 5 5 4 3 4 4 4 5 3 4 5 4 4 5 5 3 5 5 5 5 4 5 4 4 Passenger No 94 95 96 97 98 99 100 101 102 Q1 4 4 Q2 5 5 4 2 Q3 4 4 3 Q4 4 5 4 Q5 3 4 Q6 4 4 4 Q7 5 5 5 Q8 5 4 Q9 Q10 Q11 Q12 Q13 Q14 Q15 5 4 3 4 4 5 4 3 4 5 5 4 5 4 5 5 4 4 4 DATA ANALYSIS n = 102 Mark Total Average Mark Total Average Q1 Q2 Q3 Q4 Q5 Q6 Q7 Freg % Freg % Freg % Freg % Freg % Freg % Freg % Freg 0% 0% 0% 0% 0% 0% 0% 1% 6% 0% 1% 3% 1% 0% 5% 5% 17 17% 26 25% 34 33% 10 10% 2% 51 50% 42 41% 50 49% 53 52% 48 47% 54 53% 49 48% 51 45 44% 49 48% 35 34% 22 22% 17 17% 37 36% 51 50% 51 102 100% 102 100% 102 100% 102 100% 102 100% 102 100% 102 100% 102 4.37 4.18 3.77 4.48 4.25 4.03 4.01 4.42 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Freg % Freg % Freg % Freg % Freg % Freg % Freg % 0% 0% 0% 0% 0% 0% 0% 2% 1% 0% 1% 0% 0% 0% 7% 23 23% 20 20% 26 25% 18 18% 1% 0% 57 56% 42 41% 59 58% 44 43% 65 64% 49 48% 59 58% 36 35% 36 35% 23 23% 31 30% 19 19% 52 51% 43 42% 102 100% 102 100% 102 100% 102 100% 102 100% 102 100% 102 100% 4.25 4.03 4.01 4.42 4.01 4.42 4.42 Q8 % 0% 0% 0% 50% 50% 100%