INTRODUCTION
Rationale
In the development of global economy, the competition between companies, organizations becomes more and more intense Hence, marketing strategies play important role in attracting customers.
The gas market in Vietnam has experienced significant growth over the past five years, with an annual growth rate of 15% to 20%, highlighting its potential as a key product The country is home to numerous gas companies operating in various capacities, leading to intense competition between domestic and imported gas products.
Established on January 15, 2008, Lien Quang Thanh Business Liquefied Petroleum Gas Joint Stock Company began as a small organization focused on selling gas to agencies and customers Over the years, the company has expanded its offerings and built a strong local reputation, significantly contributing to the gasoline industry alongside the growth of the national economy Today, LQT engages in diverse activities, including the production, wholesaling, and retailing of solid, liquid, and gas fuels, as well as related products such as electrical appliances, household items, gas stoves, metal kitchen utensils, and pure bottled water Notably, gas products account for 80% of the company’s total revenue.
Since 2011, the rapid emergence of gas companies in Thai Binh Province has led to a fragmented market share Lien Quang Thanh JSC is encountering numerous challenges that threaten its current standing in the local market Additionally, fluctuations in both global and domestic petroleum gas prices are impacting the company's production costs.
In today's competitive landscape, Lien Quang Thanh., JSC must enhance customer interaction and adopt a comprehensive marketing strategy to boost gasoline sales and maximize profits My internship revealed the need for a robust marketing mix, which appears to be the most effective approach This research identified key challenges and proposed suitable solutions, leading me to select the topic "Improving Marketing Mix for Gas Products at Lien Quang Thanh Business Liquefied Petroleum Gas Joint Stock Company" as my final thesis for graduation from the National Economics University.
The marketing mix is a strategic model that integrates various elements to achieve both organizational and consumer goals Developed by Neil Borden in 1964, the concept was inspired by James Culliton's analogy of a chef who blends ingredients and adapts recipes based on available resources This innovative approach emphasizes the importance of flexibility and experimentation in marketing strategies.
When developing a marketing strategy, it is essential for marketers to consider the target market's needs and desires, as outlined by Maslow's theory This understanding enables the formulation of effective marketing strategies that not only satisfy consumer demands but also align with the organization's objectives As Neil Borden stated in 1964, marketing managers must balance behavioral factors while skillfully managing the marketing mix elements, all while being mindful of the available resources.
Neil H Borden, “The Concept of the Marketing Mix”, 1964
A separate marketing mix is normally crafted for the product offering on market segment depending on organization structure of the firm Neil Borden,
1964, goes on to suggest a procedure for developing a marketing mix Neil Borden,
1964, claims that need two sets of information:Đề án Kinh tế quốc tế
- A list of important elements that go into the mix
- A list of forces that influence these decision variables
E Jerome McCarthy, “Basic Marketing: A Managerial Approach”, Homewood, IL: Richard D Irwin 1960
In 1964, McCarthy built upon Borden’s concept from 1965, defining the marketing mix as the combination of factors available to a marketing manager to meet the needs of the target market He condensed Borden's twelve elements into four key components, known as the 4Ps: product, price, promotion, and place According to Jerome McCarthy, these four variables are essential for marketers when developing their marketing strategies and plans.
Moller, K (2006), Comment on: The Marketing Mix Revisited: Towards the 21th Century Marketing Journal of Marketing Management, vol.22, pp 439-450
Moller (2006) provides a comprehensive overview of the ongoing debate regarding the Mix as a marketing paradigm and its role as a key marketing management tool This analysis encompasses insights from five sub-disciplines of marketing management: consumer marketing, relationship marketing, services marketing, retail marketing, and industrial marketing, along with the emerging field of E-Commerce.
The marketing mix has garnered significant focus from both academia and industry, leading to various modifications of the traditional 4Ps framework Notably, the services marketing sector has raised substantial critiques, highlighting that the 4Ps model is primarily production-oriented rather than customer-centric.
In 1990, Lauterborn introduced the concept of the 4C's in marketing, emphasizing the importance of viewing marketing variables from the consumer's perspective This approach transforms traditional marketing elements: product becomes customer solution, price is seen as cost to the customer, place is redefined as convenience, and promotion is viewed as communication However, Moller (2006) pointed out several criticisms of the Marketing Mix framework, highlighting its limitations in addressing contemporary marketing challenges.
- The Mix does not consider customer behavior but is internally oriented.
- The Mix regards customers as passive; it does not allow interaction and can not capture relationships.
- The Mix is void of theoretical content; it works primarily as a simplistic device focusing the attention of management.
Fakeideas, Revision: Reviewing the Marketing Mix, 2008
The review of this article found that:
- The mix does not take into consideration the unique elements of services marketing.
- Product is stated in the singular but most companies do not sell a product in isolation Marketers sell product lines, or brands, all interconnected in the mind of the consumer.
- The mix does not mention relationship building which has become a major marketing focus, or the experiences that consumers buy.
- The conceptualization of the mix has implied marketers are the central element This is not the case Marketing is meant to be “customer- focused management”.
Research objectives and Research questions
To solve the above problem, the researcher will focus on three following objectives:
Synthesize the theoretical background of marketing mix for customer product
Analyze and evaluate the current situation of marketing mix for Lien Quang Thanh.,JSC. Đề án Kinh tế quốc tế
Identify the weakness and problem of marketing mix for Lien Quang Thanh.,JSC
Propose recommendations to strengthen the marketing mix for Lien Quang Thanh.,JSC
In order to achieve the objectives, the research is conducted to answer the following questions:
What are the theories of marketing mix for customer product?
What are the current situations of the marketing mix for Lien Quang Thanh.,JSC?
What are the weakness and problems of marketing mix for Lien Quang Thanh.,JSC?
How to improve the marketing mix for Lien Quang Thanh.,JSC?
Research methodology
Requirements of marketing mix of gas products
Recommendation s to improve marketing mix of gas
Current situation of gas’s marketing Secondary mix data Đề án Kinh tế quốc tế
Source: Author’s design 1.4.2 Data source
To collect necessary information, the author suggests using 2 types of data: Primary data and Secondary Data.
Secondary data is collected through articles, news and information on the sidelines, relevant documents, reports, previous research papers, and textbooks
For the primary data, the researcher will use 2 main methods to collect: survey and in-depth interview.
- Experience from the current situation of marketing strategy for Lien Quang Thanh.,JSC
- Opinions towards strategy for products
Quantitative Survey At least 50 customers who already used gas products of the company
- Awareness of gas product of Lien Quang Thanh.,JSC
- Opinions towards the products and sales supporting activities Đề án Kinh tế quốc tế
Source: Author’s data collection method
The result of the survey will be processed with MS Excel and tabling application while conceptual analysis will be employed for opinions collected from informants.
Scope of the research
- The research focuses on marketing channel of gas products of Lien Quang Thanh.,JSC
- Research is conducted in Thai Binh
Secondary data: For the period from 2014 to early 2015
Primary data: For the period from 2014 to early 2015
Research structure
To present a comprehensive and coherent report this thesis adopts the following structure:
THEORETICAL BACKGROUND ON MARKETING MIX FOR
Marketing and marketing mix for consumer products
Marketing is a human activity aimed at satisfying needs and desires through exchange It initially manifests through specific acts related to the exchange of goods While marketing is closely linked to the exchange process, it does not occur simultaneously with it Instead, marketing arises in situations where either the seller is attempting to sell or the buyer is looking to purchase Thus, the essence of marketing is rooted in competition, as it thrives in environments where individuals compete to sell or buy goods.
Modern industrial development has significantly shaped marketing practices, leading to a surge in production that often surpasses consumer demand This imbalance compels businesses to seek effective strategies to enhance the consumption of goods Consequently, the pursuit of innovative solutions has fueled the evolution of marketing into a comprehensive science.
Marketing originated in America in the early twentieth century and expanded globally, reaching Vietnam in the 1980s The American Marketing Association defines marketing as the planning and execution of the conception, pricing, promotion, and distribution of ideas, goods, and services to facilitate exchanges that meet individual and organizational objectives Marketers employ various tools, known as the marketing mix, to achieve their goals in target markets The term "marketing mix" gained popularity after Neil H Borden's 1964 article, where he described marketing managers as "mixers of ingredients." Borden's mix included elements such as product planning, pricing, branding, and advertising E Jerome McCarthy later categorized these elements into the 4P's of marketing: Product, Price, Place, and Promotion, which marketing managers control to create customer value and positive responses.
Figure 2.1 Concept of Marketing mix
Source: Kotler, P (2002), Marketing Management, Millennium edition
Therefore, we reviewed the process of the formation and development of marketing strategies to capture how the overall activities of the marketing mix strategy (marketing mix) developed.
The formation of markets is driven by the interplay of production and product supply, which facilitates exchanges between buyers and sellers As an increasing number of similar products enter the market, competition intensifies, leading to confusion among manufacturers and consumers This proliferation of options complicates the management of transactions for both buyers and sellers.
Buyers face challenges in making informed decisions, while sellers struggle to effectively segment their target consumer groups As competition intensifies, producers must conduct thorough research and enhance their products to meet the diverse needs of consumers Consequently, implementing a robust product strategy has become essential for success in today's market.
Product strategy includes the following activities:
- Segment clearly products and customer target groups Each line of products will suit each customer group that has tended to segment.
- Change the design, packaging, identity, message and communications to consumers Innovate and create new features to products.
- Improve product quality – this strategy creates greater competitive advantage for the products by:
Consumers feel that the product relatively cheaper compared with other competitors’ products.
Boosting consumer confidence in these manufacturers' products can lead to increased sales and larger market shares, as customers are more likely to purchase additional items from a brand they trust.
Manufacturers and managers must conduct ongoing market research and analysis to effectively navigate the product life cycle, which consists of four key phases: Introduction, Growth, Maturity, and Decline By understanding these phases, they can set specific objectives for each stage and develop a comprehensive overall strategy to optimize product performance and market presence.
Competitors can swiftly adapt to market strategies, making it challenging for manufacturers to maintain a competitive edge through product differentiation alone Consequently, manufacturers must carefully consider the impact of pricing on consumer choices, as cost is a significant factor in purchasing decisions Additionally, marketers continuously seek innovative ways to meet customer needs while maximizing profits.
Pricing strategy is that the manufacturers implement the activities and actions to response the market price changes of the product in order to achieve the highest benefits for producers.
- Manufacturers often make the strategic and action plans related to the price as follows: Determine the actual price an the nominal price of the product/service they provide.
- Manufacturers will compare the level of this difference to measure the value f availability and seek for potential elements for product through pricing.
To effectively determine pricing strategies, it is essential to analyze market characteristics, economic fluctuations, and cost variations This approach ensures that pricing aligns with the product's life cycle stages and adapts to seasonal market trends, ultimately supporting the achievement of specific objectives at each phase.
As markets become more lucrative, an increase in manufacturers emerges, leading to market saturation and a decline in purchasing power Given the limited product life cycle, companies must consider two strategic options.
- Invest capital to penetrate its existing markets through research and product improvement, through its attractive prices to attract more number of currentĐề án Kinh tế quốc tế customers.
- Or invest in a new market.
Product A, although saturated in market A, can still be considered new in market B due to cultural differences This concept mirrors the historical Silk Road, which highlights the significance of silk in various countries Consequently, this understanding has led to the development of distribution strategies that enable producers to successfully enter and thrive in new markets.
Distribution strategy (Place) includes activities that producers plan, organize their distribution system effectively sell products to different markets, for example:
- Measure and estimate demands, then segment the market based on criteria and management purposes and organize a variety of suitable distribution systems;
- Determine the number and type of appropriate distribution channels;
- Plan and implement an approach to market most effectively;
- Perform a variety of strategies and tactics in order to match the demands.
To effectively tap into untapped markets, it is crucial for producers to raise consumer awareness about their products and build trust in their services Implementing a robust promotion strategy is essential to maximize the market's purchasing power and ensure successful market penetration.
A promotion strategy involves various activities aimed at effectively communicating with target consumers to boost sales This strategy enhances customer awareness of products and services while stimulating consumer demand.
The major activities in this strategy include:
Personal selling Đề án Kinh tế quốc tế
The structure of marketing activities is a dynamic process that adapts to market changes while simultaneously influencing them Economists must continually analyze market operations to develop innovative strategies that enhance competitive advantages and better meet consumer demands A comprehensive understanding of the marketing mix components—Product, Price, Place, and Promotion—is crucial for evaluating and refining marketing strategies effectively.
ANALYSIS OF LIEN QUANG THANH.,JSC’S MARKETING
Overview of Lien Quang Thanh.,JSC
Name: Công ty cổ phần kinh doanh khí dầu mỏ hóa lỏng Liên Quảng Thành
International Transaction name: Lien Quang Thanh business liquefied petroleum gas joint stock company
Headquater: A block, Tran Lam Industrial Zone, Tran Lam ward, Thai Binh city, Thai Binh province
Manufacturing sector: The company’s main activity is wholesaling/retailing gasoline, liquefied petroleum gas and other related products; producing/wholesaling/retailing pure bottled water.
3.1.2 Foundation and Development of the company Đề án Kinh tế quốc tế
Lien Quang Thanh JSC, established on January 15, 2008, began as a small organization focused on selling gas to agencies and customers Over nearly a decade of operation, the company has significantly expanded its market reach and diversified its product offerings, enhancing its reputation and recognition in the local community.
The company is organized in a way that best supports each product category. Below is the organization chart of Lien Quang Thanh.,JSC:
Figure 3.1: Organization chart of LQT
SALES ACCOUNTANT Đề án Kinh tế quốc tế
Source: LQT profile 3.1.4 Core line products
The company now has more than 40 employees including 8 carriers, 8 salesman, stockers, market research staffs, guardians,…
Business line of company includes:
- Fuel trade of solid, liquid , gas and related products
- Details : wholesaling/retailing gasoline, liquefied petroleum gas, and other related products
- Wholesaling/Retailing electrical appliances, household appliances, such as lamps , beds, wardrobes
- Producing gas stoves, metal utensils in kitchens
- Producing, wholesaling/retailing pure bottled water
3.1.5 Financial Report of Lien Quang Thanh.,JSC (2012-2014)
Let’s take a look at brief financial report of Lien Quang Thanh in these 3 years:
Net revenue of sales and service
0 52.222.369.000 55.221.569.0 Đề án Kinh tế quốc tế 00
Profit of sales and service
Net profit of business activities
50 Đề án Kinh tế quốc tế769.093.700 841.902.679 884.654.191
Table 3.1: Brief Financial report of Lien Quang Thanh.,JSC in 2012, 2013 and 2014
Source: Lien Quang Thanh.,JSC
The table outlines the financial performance of the company from 2012 to 2014, indicating a steady profit growth over the three years In 2012, the company's profit was 599,893,086 VNĐ, which increased to 656,684,089 VNĐ in 2013 and further rose to 690,030,269 VNĐ in 2014 Despite this upward trend, the profits remain insufficient to achieve the company's future objectives.
RECOMMENDATIONS FOR IMPROVING MARKETING MIX
Lien Quang Thanh.,JSC’s marketing objectives for gas products
Vietnamese companies are currently facing significant challenges, including a downturn in the real estate market, an unpredictable gold market, fluctuating exchange rates, and rising inflation rates Additionally, prices for petroleum and liquefied petroleum gas are consistently changing in response to global market trends.
The objectives that LQT’s management set for gas products in the next five years are:
- To increase annual revenue: from 50 billion VNĐ to 65 billion VNĐ
- To expand the distribution network: trying to take over all gas agencies in the province to become customers of LQT
- To increase and consolidate customer’s loyalty for gas products of LQT
- To improve the marketing management process through strategic planning for marketing activities and more professional marketing management
Recommendations for improving marketing mix for gas products
4.2.1 Improving product strategy through market and customer study
The product is a crucial component of the marketing mix, significantly impacting the effectiveness of the other elements A flawed product strategy can undermine the success of the entire marketing approach Therefore, LQT must evaluate and enhance its gas product strategy to ensure optimal performance and market success.
Product strategy should be developed based on the study of the market and the study of the consumer buying behaviors
Study of gas market in Thai Binh Province:
About 80% of the customer’s recommendations from the survey focus on the product quality Followings are some suggestions from the customers for gas products to improve:
- Best gas products in the market
The problems of gas products that consumers are concerned about are:
- Consumers currently have to spend significant money to buy a gas bottle but in return the quality and weight are not guaranteed.
Vietnam currently has over 8,000 gas agencies, with annual gas consumption exceeding 1 million tons and continuing to rise However, the market also faces challenges, as numerous unregistered gas agencies are operating illegally.
Illegal gas extraction operations are exploiting untested intestinal gas by filling genuine gas vessels of distributors, resulting in each bottle being short by 2-3 kilograms This leads to consumer losses exceeding 100,000 VND per bottle Despite the risks and regulatory oversight, the high profits continue to entice these operations to seek ways to profit from this illicit activity.
Gas stores are currently offering enticing promotions, including gifts like stainless steel pots, knives, and mini gas stoves with the purchase of Đề án Kinh tế quốc tế gas products Many consumers, attracted by these gifts, are eager to call the phone numbers on the brochures to make a purchase, often without knowing the locations of the gas stores Furthermore, they may be unaware of the insurance coverage available for gas-related incidents, such as explosions.
So what are the ways that Lien Quang Thanh.,JST ensures the quality of gas products?
To meet consumer preferences for quality gas products, it is essential to continue sourcing from reputable distributors Many consumers favor imported gas brands, such as Totalgaz from France, Shell Gas from Thailand, and Đại Hải Gas from Taiwan, due to their perceived reliability and quality.
- Selling gas products with vessels which are not too scratched, convex or concave, hitting aesthetic tastes of customers.
- Ensure the interests of customers using the products by providing gas safety insurance for consumers.
4.2.2 Adjusting price strategy to be more market competitive
Pricing plays a crucial role in marketing and revenue generation for businesses, allowing for flexible adjustments in response to competitive dynamics and individual customer needs As customers prioritize price and competitors closely monitor pricing strategies, it is essential for companies to implement an effective pricing policy By offering a diverse range of products at various price points, businesses can effectively meet customer demands and cater to different market segments.
Over the next three years, the company plans to uphold its existing pricing strategy to avoid disrupting the gas market in Thai Binh Province This approach will involve implementing a competitive strategy to ensure market stability.
4.2.3 Better motivating and managing distribution channels
An effective distribution strategy enhances business safety and efficiency Lien Quang Thanh JSC has demonstrated a relatively successful distribution model However, a key recommendation is to open a new retail store in the city to better serve customers.
4.2.4 Better planning and managing promotional activities
4.2.4.1 Properly planning for all advertising and PR activities
Effective marketing and PR planning is essential for any marketer Currently, the company is prioritizing sales while neglecting the promotion of its trademark and brand name To address this inefficiency, the company should implement targeted strategies to enhance brand visibility and recognition.
Creating a dedicated website for your gas company is essential for informing customers about your products Regularly updating product images, design, and pricing ensures that customers have easy access to the latest information Additionally, posting informative articles on gas safety and usage helps educate customers on safe practices Keeping the website current with news about the global liquefied petroleum gas market can further enhance engagement and increase visitor traffic, allowing more customers to become familiar with your brand.
- The company should actively participate in events such as exhibitions and consumer fairs in “the Tet Holiday”, “Vietnam high quality goods program”,
“Monthly Promotion”, in order to promote the image of the company that will be known more to the public.
LQT managers should actively engage in charity and sponsorship initiatives, such as providing scholarships for underprivileged students and donating essential products like gas bottles and valves These contributions will enhance the company’s reputation and demonstrate its commitment to social responsibility.
4.2.4.2 Better controlling of the sales promotion programs
There should be different methods to control the sales promotion programs for gas products: Đề án Kinh tế quốc tế
The company supports wholesale agencies by supplying an average of 50-70 gas bottles per month Agencies that achieve over 50% of this average will receive a discount of 3-5% on the value of their orders.
To attract retail customers, the company should offer free installation or provide gas valves and conductors By increasing the price of a gas bottle by 5,000 to 10,000 VND and including these additional products, the company can effectively meet customer needs and enhance satisfaction.
- Gift voucher is useful tool in attracting customers so LQT should run more of this promotion with better control and management.
4.2.4.3 Improving personal selling skills for sales staffs
The company clearly does not prioritize this task, yet it is essential for sales staff to receive training from experienced leaders To address this, LQT should take specific actions to enhance their training program.
To enhance the effectiveness of Lien Quang Thanh, JSC's sales staff, training modules must focus on three key objectives: first, improving personal selling skills; second, delivering comprehensive product knowledge; and third, transforming biases and fostering a strong customer-oriented mindset.
Conditions for solution implementation
To effectively implement marketing mix improvements for gas products, LQT must focus on four key elements: budget, time, personnel, and strategy A well-defined strategy is crucial, as it guides the management in identifying necessary changes, required conditions, and involved parties Clear strategic planning allows LQT to address challenges efficiently Furthermore, managers should employ effective control and supervision methods to ensure seamless strategy execution Additionally, it is essential for LQT to engage employees in adhering to the strategies and actively contributing to their implementation within the organization.
Implementing changes to the marketing mix can yield quick results, but it necessitates a significant budget To ensure effective marketing strategies, the board of directors at Lien Quang Thanh JSC should convene quarterly meetings to make informed decisions regarding all marketing initiatives.
Lien Quang Thanh., JSC has successfully implemented a marketing mix for its gas products, contributing to the expansion of its store chain and the enhancement of brand equity, solidifying its position as a leading gas company in the Thai Binh market However, an analysis of the current situation reveals weaknesses in the marketing mix, prompting the author to recommend both short-term and long-term solutions aimed at addressing these issues By implementing these strategies, Lien Quang Thanh., JSC can sustain its top ranking in the competitive Thai Binh market.
The recommendations provide essential guidelines for Lien Quang Thanh JSC to formulate an effective marketing strategy for its gas products This strategy will be tailored to the company's resources, target customer base, economic conditions, and various other influencing factors.
The author has diligently worked on the thesis, yet acknowledges certain limitations stemming from constrained capabilities and information Consequently, constructive feedback and insights from teachers and peers are greatly valued and encouraged to enhance the thesis's contributions to academic research and practical business applications.
1 Which criteria are important to your choice of gas products? (Can be more than one choice)
2 Which brand of products do you often buy?
B Shell Gas Đề án Kinh tế quốc tế
3 Through which channels do you know about LQT?
4 What is your opinion about products of LQT?
5 Which promotional program most affects your purchasing decision?
D Saving point card (Discount 10% for 6 th purchase)
6 What is the reason that you buy gas products of the company?
B Various products Đề án Kinh tế quốc tế
E Good price Đề án Kinh tế quốc tế
7 What do you recommend to make more people choose gas products of the company?
D More choices of products Đề án Kinh tế quốc tế
>40 Đề án Kinh tế quốc tế
(VND/month) Number of answers %
Q1 What criteria are important to your choice of gas products? (Can be more than one choice)
Price Quality Brand Customer service
0 10Đề án Kinh tế quốc tế20 30 40 50 60
Q2 Which brand of products do you often buy?
Totalgaz Shell gas Dai Hai gas
Q3 Through which channels do you know about LQT
Television Radio Internet Leaflet, brochures word-of-mouth Newspapers Đề án Kinh tế quốc tế
Q4 What is your opinion about products of LQT
High quality Suitable price High price Low quality
Q5 Which promotional program most effects your purchasing decision?
Gift voucher Saving point card Đề án Kinh tế quốc tế
Q6 What is the reason that you buy gas products of the company?
High quality Good price Various products Good customer service Reputation
Q7 What do you recommend to make more people choose gas products of the company?
10 20 Đề án Kinh tế quốc tế
Lower priceBetter customer serviceAdvertise moreMore choices of products
Note: For internal employees only
Explore the internal matters in relations to marketing activities of the company.
Understanding the behavior of employees towards the company’s marketing plans
Explore the employees’ ideas about appropriate suggestions for improvements
- Introduce the objectives of the interview and several rules during discussion.
- Moderator introduces herself and the objectives.
- The discussion does not require any specific knowledge, no correct and wrong answer, so interviewees could talk anything which they feel and experience.
2 Brief conversation Đề án Kinh tế quốc tế