CANON VIETNAM CO. LTD AND ITS MARKETING.DOC

CANON VIETNAM CO. LTD AND ITS MARKETING

Nowadays, the economy of the world grows significantly The demands of consumers increase, all companies must satisfy them to exist Marketing is important part of all businesses that helps them achieve success It is large scale that includes many things, such as researching customers, promoting the products Marketing has many ways to define and many concepts to achieve which depends on ability and target of company

Canon Inc is a multinational corporation that specializes in the manufacture of imaging and optical products, including cameras, photocopiers, steppers and computer printers Therefore, Canon cannot lack marketing orientation that everything focuses on needs and wants of customers Canon operation is not harm to environment, so its marketing approach is societal marketing All business situations or not business situations of the company observe this approach Because of this, Canon achieved many success and become famous brand of its field in the World.

The first purpose of the report is to introduce marketing orientation of Canon that affirms its operation trend, such as its organization structure or strategy Moreover, this report analyzes Canon Vietnam marketing activities in detail to help readers have clearly view about business of Canon Besides, it proposes projects that help Canon promote two printer lines that are SELPHY and Laser printer, to Sales Director

The method used to conduct this research is using secondary data from previous studies on course books, reference books and internet They are reliable sources such as BPP Professional Education, Canon Vietnam and Philip Kotler author and so on

However, this report still has limitation Firstly, it did not mention to marketing process The second is marketing mix which is important elements of marketing is not analysed in detail Finally, situations relate closely to products are not stated, such as total product or distribution channel, etc

II BASIC CONCEPT OF MARKETING

1 What is Marketing?

Nowadays, marketing is an important part in all enterprises Market is battlefield that many companies compete with each other to have large market share Which company has best marketing, it will win in this fight Marketing has influence in whole process from researching to selling products The purpose of marketing is to help companies find the best way to produce and support new products to the market by researching customers’ needs and wants to satisfy them The following is some marketing definitions: individuals and groups obtain what they need and want through

Marketing is 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 goals (BPP Professional Education, 2004, p8) Similarity To concentrate on customer.

Differences - Management process definitions, satisfying both organization and customer with 4Ps.

It is easy to realize that the improving in marketing concept increases more and more However, they can be separated to two periods that are classic marketing and modern

marketing Originally, when marketing concept just appeared, the economy had not developed, supply is bigger than demand Therefore, suppliers have power to decide what products are bought through their own experiences.

But nowadays, the economy is developing Customer demands are advanced Thus, to keep with development of economy, the definition of marketing must change The companies have a process to understand customer demand and their objective is providing customer satisfactions Moreover, there is not only customers are satisfied but also organizations’ goal is emphasized To modern marketing, the risk in business is reduced many times As a whole, marketing concentrates on satisfaction of customer demand, requirement.

2 The main characteristics of marketing orientated organization for Canon

Marketing orientation is that a business strategy whereby customer’s needs and wants, as identified by the marketing function, determine corporate direction (Marketing MiMi.hu, n.d) Canon Inc is a marketing orientated company It is easy to realize because of its products The new products of Canon are made by concentrating on customers SELPHY ES3 & ES30 provide intelligent functions and attractive looking figures and offers users not only convenience, quality and versatility but also a unique lifestyle Moreover, they have good looking shapes that best fit in home interior and irresistible effects that bring charm to users' photos, come with over 10 image effects, 3 of which are brand new that are Starlights, Nostalgic, Modern bright & Pinhole Besides, Canon introduced the Laser Printer LBP3250

and the colour laser printer LBP5050 which are perfect for home and small offices They have

better features and quicker printouts while assuring both quality and quantity Furthermore, USB 2.0 Hi-Speed in them enables both printers to transfer data at high speeds without fear of data bottlenecks and never-ending print queues [Scenario].

Canon always has a clear marketing strategy that each showroom will show and introduce one product line, primarily in order to increase concentration and profession into each product

and consumers of it (Thế Giới Vi Tính, 2006) Moreover, it is Multinational Corporation, so its structure is by geography which has local decision making at the point of contact between the organization and its stakeholders (BPP Professional Education, 2004, p67) “The expectations toward us identified through dialogue between our stakeholders and relevant company divisions” (Canon, 2008) Canon always listens and cares about stakeholders’ objectives.

Figure1 Canon Governance Structure (Source: Canon Annual Report 2008)

The first thing in marketing orientation is that know what customers want, how to be better than competitors Therefore, Canon has to have research market After that is strong research and development capabilities, which made its product line on a reliable basis, and provided it with a strong pipeline of new products and technologies For example, new Canon product possessing amazingly intelligent functions and attractive looking figures, offer users not only convenience, quality and versatility but also a unique lifestyle (Scenario) All these features focus on users, it means Canon has customer oriented which base on customers demand

The Canon’s commitment is showed through its philosophy “kyosei” that is “All people, regardless of race, region or culture, harmoniously living and working together into the future” (Canon Vietnam, n.d) and this thing is implemented from top to employees.

Therefore, there is coordination of company led activities which are 4Ps: product, price, place and promotion that around customers’ needs Subsequently, Canon achieved success with the profitability Canon Vietnam Co Ltd earns more than US$200 million In Asia and Oceania, sales climbed 4.5% year on year to ¥729.9 billion, accounting for 17.8% of consolidated net sales [Scenario]

3 The various elements of the marketing conceptsAccording to Philip Koler (1997):

Concepts Profit Driver Western European

Until the 1960s - Concerns quality of product

- Focus on product, not care about customers’ needs

Selling Selling methods 1950s and 1960s - Effectiveness and promotion

-Focus on selling(sells existing products) - Using promotion techniques to attain the highest selling as possible.

Marketing Needs and

Elements of marketing concept and curtailment on any harmful activities to society

Canon is a company that has marketing orientation The approach which Canon uses is societal marketing It is proved by 5Cs analysis It is an environmental scan on five key areas

especially applicable to marketing decisions (NetMBA, n.d) 　

First C is company, here is Canon which is manufacturer of business and consumer imaging products Canon’s vision is “All people, regardless of race, region or culture, harmoniously living and working together into the future” (Canon Vietnam, n.d) Hence, its purpose is to bring goods thing to all people in the world by its products that are ensured that protect environment and the future Canon establishes system that manages rubbish and recycles 100% kinds of plastic, metal and paper (Canon Vietnam Co., Ltd, n.d) And “Canon Vietnam launched the Canon Friendship School Chain Project in July 2007 to support the construction of schools in Vietnam”(Canon, 2008).

Figure2 Canon’s main social and cultural support activities (Source: Canon Sustainability Report 2008)

The second is collaborators which are distributors, suppliers, etc In Vietnam, Canon has five main distributors and more than 300 agencies, such as Lê Bảo Minh (VnEconomy, 2008) Moreover, Canon always has cooperative activities with its suppliers, promotes fair and transparent business transactions (Canon, 2008)

The third is customer, Canon concentrates on customer orientation Canon had diversified product lines that can satisfy market requirements with different quality levels,

low, average and high and suitable price for customers (VnEconomy, 2007) Thus, target customer of Canon is business and consumers who have money Besides, each product of Canon has different target customers, such as Laser Printer LBP3250 and LBP5050 focus on home and small offices [Scenario]

Next is competitor, main competitors of Canon are HP, Brother, Epson, Lexmark They are big company in market, their brand name is affirmed by customers In printer market, their position is not less than Canon, especially HP In 2006, HP share of operating income is less than Canon’s but its share of revenue is higher than Canon’s

Figure3 CY Q1 2006Financial performance

(Source: http://static.seekingalpha.com/wp-content/seekingalpha/images/crowley2.gif) Context is last C that belongs to macro-environmental factors, Canon is great corporation, so influences of this factor to Canon is high “In 2009, Canon's business performance is feeling the impact of the global economic crisis But for Canon, these tough times present a golden opportunity to bolster our corporate structure” (Canon Global, n.d).

4 The costs and benefits of using societal marketing to doing business in Vietnam

Identifying customer

- Canon must research needs and wants of

customer that is customer focus.

Through partners in Vietnam, information about demand and taste of customer are send to office of Canon in Japan (Tokyo) to have suitable product strategy (Thế Giới Vi Tính, n.d).

- Customer delight is long-term competitive advantage of a company, so Canon pays many costs to have satisfaction of customer, especially in Vietnam because technology in Vietnam is not good as others, like Singapore

- Canon try to get customer loyalty by

reduce risk dissatisfaction when buying new product It provides information of product to customers exactly, warranty card and preventing fake stamp (Xã Hội và Thông Tin, 2009)

- In Vietnam, cost of acquiring newcustomers is expensive, Canon cannot

be outside of it The company must pay for advertising, salesman or sales promotion In 2009, Canon Vietnam had

- Canon can get customerloyalty It means Canon can

keep its current consumers and get new one because loyal customers will buy again and advise for their family, friends Market share of Canon Bubble and Laser

sales promotion with total cost is

- Now, Canon pay a lot of money to build

two Customer Care Centrals in Ho Chi

Minh and Hanoi to ensure customer satisfaction is focused and increase relationship marketing between Canon and customers.

- Another cost that Canon has to pay is

cost of lost customers If all customers

has product, they will not buy anymore Vietnam is poor country, so Vietnamese people have not enough money to buy two or more same kind of product.

- Canon Vietnam can keep the care of customers, instead of its competitors It is proved by market share of Canon

- To be a big company, Canon must have

customer care strategy that includes

many stages, so it can pay many time and money for this strategy.

- It is easy for Canon to research and satisfy customer

- To achieve customer satisfaction, Canon

always has quality control which ensure

about quality of product Canon factories in Vietnam have managing component quality and managing product quality departments to get target “No error product” (Canon Vietnam Co., Ltd, n.d).

- Canon Vietnam has been

- Moreover, Canon Vietnam implements plan that produce product not harm to societal, “the environmental-friendly manufacturing facility utilizes traditional Vietnamese bamboo racks” [Scenario]

In order to do societal marketing, Canon must pay many kinds of cost for marketing activities, such as researching market, advertising, and social welfare activities Benefits and costs analysis show that all costs that Canon has to pay is to satisfy customer demands by its products and services However, it gains many benefits, the company’s image will be raised and its income will increase And the benefits that it gains come from customers, such as customer loyalty

Figure4 Flowchart of Countermeasure to Product Malfunctions or Quality Issues (Source: Canon Sustainability Report 2008)

III CANON LTD IN VIETNAM AND ITS MARKETING

1 The Macro and Micro environmental factors

1.1.Micro environmental factor

Micro environmental factor has two parts which are market and internal (BPP Professional Education, 2004, p84).

Stakeholders of Canon are key elements of its market which have three main types: internal (employees, managers), external (customers, suppliers), concerned stakeholders (local resident, the community, government and interest groups) Canon achieved the success because of understanding the interaction and behavior of these groups

Firstly, employees and managers are essential parts of the strategic planning process Meanwhile, human resource in Vietnam is profuse, high quality and cheap According to Mr Kageyama, most of engineers in Canon can communicate by English and employees are very creative, skillful and self-educated (cpv.org, 2006) To compare with some countries in Asia, price of labour in Vietnam is about 50% to 70% (Cơ Quan Trung Ương Đảng Cộng Sản Việt Nam, 2006) This thing affects relationship of Canon with customers which reduce production cost and price of products.

Secondly, meeting the needs and providing benefits for customers are the way that Canon exists Vietnam is potential market of Canon, thus it brings out high quality products to satisfy various requirements of consumers and increases quality of services (VnEconomy, 2008) Thus, Canon can have customer loyalty Besides, Canon cannot lack suppliers, close supplier relationships ensure competitive and quality products which make difference to its competitors Canon mentions “green regulation” program with suppliers which obey environmental standard of Canon and Vietnamese law (Canon Vietnam Co., Ltd., n.d)

Annually, Canon invests a lot of money into Vietnam It helps Vietnam economy develop from local to government So Canon has treatments from them It is exempted 10% corporation tax in 8 years and VAT, customs duty (Cơ Quan Trung Ương Đảng Cộng Sản Việt Nam, 2006) Furthermore, Canon Vietnam has contributed to Vietnamese people by

implementing “Friendship School Chain Project” and protecting environment (Canon, 2008) Therefore, it develops Canon image by the way the company is perceived by various interest groups.

Internal shows strengths and weaknesses of Canon First strength is internal capability Canon is big famous company, so financial resource is advantage, its employees has high quality Besides, technology and innovation are strength of Canon that makes its competitive effect Canon created products with amazing features, such as “Both SELPHY ES3 & ES30 come with over 10 image effects” [Scenario] Furthermore, “kyosei” is culture of Canon which impacts its marketing decisions Canon is rare company that always ensures to protect environment in production process Finally, Canon uses “by geography” structure, so it can understand customers’ objectives of each area to satisfy them However, there are some particular cases about personnel that have bad influences to Canon’s image In 2007, there was a line chief tied its two employees (Lao Dong, 2007).

1.2.Macro environmental factor

Macro environment is shown by PEST factors that are political, economic, social and technological Vietnam is potential market of Canon, so it contains opportunities and threats

Mr Mikio Takeuchi assessed that one of three reasons that investors choose Vietnam is stableness of political and social situations and good national security (Cơ Quan Trung Ương Đảng Cộng Sản Việt Nam, 2006) Thus, Canon can feel safe when it sells new products and develop the business in Vietnam Moreover, to attract FDI from Japan, Vietnam has special policies that innovates investment environment, especially administrative innovation (Cơ Quan Trung Ương Đảng Cộng Sản Việt Nam, 2008) This thing opens development opportunity to Canon

Besides, Vietnam economy is integrating into WTO and economy of the world, the GDP growth rate in 2008 was 6.18% (LookatVietnam, n.d) Vietnam government reduces import

tax, so Canon can decrease cost of products because it still imports many things from other countries However, Vietnam economy is developing, so there is one threat that market appears more competitors It has high influence to marketing decisions of Canon

On the other hands, the culture of Vietnam is falling in line with the World, income of Vietnamese people is higher, so consumer buying power is increasing that create opportunity to Canon deploy its marketing strategy and achieve big income

One thing has bad influence to Canon is that technology in Vietnam is weak, especially supporting industry of Vietnam (Đời Sống Pháp Luật, 2009) Canon gets many difficulties because Canon always tries to use technology inside Vietnam to reduce cost To high price, products of Canon meets disadvantage with its competitors, such as HP, Brother, Epson.

Furthermore, each company has separate competitive strategy base on Porter’s generic competitive strategies which include cost, differentiation and focus (BPP Professional Education, 2004, p50) Although price of Canon products have competition, the products are made from the best materials, and its product lines are variety, have different levels So neither cost nor focus is Canon competitive strategy To compete with main competitors which are HP, Brother, Epson, Lexmark, Canon uses differentiation It is easy to understand because strengths of Canon are internal capability, and technology and innovation Thus, it has enough finance and technology to concentrate on developing special features of high quality products and the best services.

2 The segmentation of Canon products in Vietnam

In 1994, Philip Kotler defined “Market segmentation is the subdividing of a market into distinct subsets of customers, where any subset may conceivably be selected as a target

market to be reached with a distinct marketing mix” (BPP Professional Education, 2004, p157) Market segmentation has four main bases: geographic (religion, culture, geography), demographic (occupation, age, income), psychographic (social class, lifestyle, personality traits), behavioral segmentation (benefit, users status, etc.)

2.1 SELPHY ES3 and ES302.1.1.Segmentation

Geographic By density - Urban and rural areas.

- Big cities: Hanoi, Ho Chi Minh City, etc.

Demographic By income - Products of Canon focus on customers which have average and high income.

Depending on features of SELPHY ES3 and ES30, they are suitable with geographic and demographic ways to segment Vietnam market Firstly, Vietnam density is separated into two kinds: urban and rural areas Canon focuses SELPHY ES3 and ES30 on big cities, such as Hanoi and Ho Chi Minh City because population in these cities is increasing significantly In 2007 and 2008, the population of urban area hold 27,47% and 28,11% (Tổng Cục Thống Kê, n.d) Moreover, income of citizen is higher than people live in rural areas In 2006, average income of rural and urban people in Vietnam is 506,000 VND and 1,058,000 VND per month (Tổng Cục Thống Kê, n.d) SELPHY ES3 and ES30 are not cheap, SELPHY ES3: VND 4,500,000 (Canon Vietnam, n.d) Therefore, these products are directed toward customers who have average and high income

2.1.2 Benefits and Limitations

Geographic - Customers are divided into regions - Canon resources will not be wasted

- The demands of customers are not identified clearly.