essay principles of marketing marketing strategy analysis of vinfast enterprise in the vietnamese market

Most recently, according to statistics from the Registry, with a total sale of 5124 cars, VinFast ranked 5th in sales in the first quarter of 2020, which is considered a good result of t

MINISTRY OF EDUCATION & TRAINING

MARKETING DEPARTMENT

ESSAY

PRINCIPLES OF MARKETING MARKETING STRATEGY ANALYSIS

OF VINFAST ENTERPRISE IN THE VIETNAMESE MARKET

Instructor : Mr Dang Huynh Phuong

Contributors: Nguyen Linh Nhi - 2021008505

Nguyen Dinh Ngoc Khanh - 2021008456 Hoang Thu Lan - 2021008464

Class : CLC_20DMA06

INSTRUCTOR’S COMMENT

Section for the instructor to comment

35%

2

Nguyễn Đình Ngọc Khánh

(Leader)

2021008456

- A complete essay - Edit the cover page and the content outside of the essay (Aligment, font size, font style, table of contents, acronyms, comments, etc)

35%

3 Hoàng Thu Lan 2021008464 - A complete essay

PageCHAPTER 1: AN OVERVIEW OF VINFAST AND THEIRDEVELOPMENT PROCESS

1.1 General introduction about Vingroup………… ………… … 6

1.2 Introduce about VinFast……….… ……….7

1.3 The development process of VinFast……… ………….8

CHAPTER 2: ANALYSIS OF VINFAST’S MARKETING ENVIRONMENT 2.1 Macroenvironment 2.1.1 Population and demographic factor….………… …………9

2.1.2 Economica factors……….……….……….12

2.1.3 Political and legal factors……….……… 15

2.1.4 Technological factors………… ………….…….……… 15

2.1.5 Natural environmental factors……… ………….17

2.1.6 Cultural and social environment… ……….………17

2.2 Microenvironmen 2.2.1 Suppiles……… ………….18

CHAPTER 4: MARKETING MIX STRATEGY ANALYSIS (4P)

Since 2017, VinFast has continuously created a great buzz in the domestic and international auto and electric motorcycle markets As the first Vietnamese brand car to participate in the car show in France with large projects completed at lightning speed and a drastic marketing strategy, VinFast is expected to change the landscape of the automotive industry in Vietnam So far, although it has only undergone less than 3 years of operation, VinFast has taken bold and drastic steps, achieving many impressive achievements To actually get a standing position on the map cars-motorcycles in the world are not easy, but VinFast has an innovative and effective development strategy

The analysis of the business environment is always an important and indispensable task in the production and business activities of enterprises Through the analysis of the business environment, including the external environment and the internal environment, enterprises will have a basis for an overview of their opportunities and challenges, strengths and weaknesses Since then, the industry will propose appropriate solutions to improve economic efficiency and maximize profit-making

With such awareness, with the knowledge we learned in the Principles of Marketing subject, we would like to present an essay with the topic "Analysis of the environment business of VinFast company”

CHAPTER 1: AN OVERVIEW OF VINFAST AND THEIR DEVELOPMENT PROCESS

1.1 General introduction about Vingroup

Vingroup is one of the largest multi-industry private economic enterprises in Asia with a market capitalization of nearly 16 billion USD The group operates in 3 core business areas, including: technology, industry and trade in services.

With a long-term vision and a view of sustainable development, Vingroup has focused on investing in tourism and real estate with two initial strategic brands, Vinpearl and Vincom In January 2012, Vinpearl Joint Stock Company merged into Vincom Joint Stock Company and officially operated under the Group model with the name Vingroup In the spirit of sustainable and professional development, after its establishment, Vingroup has restructured and placed an emphasis on developing with many sub-groups, such as:

• Vinhomes (Real estate, villas and services)

• Vincom Retail (Commercial and office real estate)

• VinWonders (Entertainment company such as ice skating area and water park) • Vinpearl (Tourism – entertainment)

• VinEco: agricultural production

• VinID: A tool that connects the entire ecosystem of Vingroup

• VinMec (Medical Services)

• Vinschool: education from preschool, primary school, middle school to high school

• VinUni: Higher Education: Vinmec Medical University and VinUni International University

• VinFast: manufactures cars and motorbikes

1.2 Introduce about VinFast

The company VinFast Manufacturing and Trading Limited is a member of Vingroup This is a Vietnamese automobile and electric motorcycle factory established in 2017, with its head office located in Hai Phong city, led by Mr James Benjamin DeLuca and Le Thanh Hai as CEO The company's name is abbreviated from the phrase "Vietnam – Phong cach – An toan – Sang tao – Tien phong"

Full name The company VinFast Manufacturing and Trading Limited

Hotline 1900 23 23 89

Website https://vinfastauto.com

VinFast currently owns a representative office in Hanoi and a manufacturing plant with an area of 335 hectares with a total investment of 3.5 billion USD in Hai Phong, which is also one of the largest industrial projects in our country

This factory helped VinFast create a miracle in the world car industry when it completed the construction of the factory and installed the production line in just 21 months The factory went into operation on June 14, designed capacity of phase 1 is 250,000 cars/year, phase 2 is 500,000 cars/year, production rate is 38 cars per hour Most recently, according to statistics from the Registry, with a total sale of 5124 cars, VinFast ranked 5th in sales in the first quarter of 2020, which is considered a good result of the Vietnamese car company after the first three months of 2020

1.3 The development process of VinFast

The establishment of VinFast shows the desire to build a Vietnamese brand with world-class standards, affirming the Vietnamese people's ability to master modern technologies Through the field of automobile and motorcycle manufacturing - one of the leading industries, having an impact on many other industries - Vingroup wishes to participate in contributing to promoting the development of heavy industry as well as industry Manufactured in Vietnam, contributing to the country's industrialization and modernization

In February 2017, the VinFast electric motorbike-car production complex project in Dinh Vu - Cat Hai economic zone was started by Vingroup, with the participation of Prime Minister Nguyen Xuan Phuc

In October 2018, VinFast launched two models of VinFast Lux SA2.0 and VinFast Lux A2.0 at the Paris Motor Show and was held in Europe's leading automobile industry – Auto Best honored as a "Ngôi Sao Mới" of the automotive industry

In November 2018, VinFast inaugurated the eScooter smart electric motorcycle factory and launched the first electric motorcycle product line VinFast Klara with 2 versions using Lithium-ion batteries and using lead-acid batteries

In January 2019, the company also introduced a limited special edition Lux SUV at the Geneva Motor Show: The VinFast Lux SA2.0 SUV was officially completed, rolled and prepared to be tested The first batch of VinFast cars among 155 VinFast LUX cars was sent for safety testing in 14 countries on 4 continents

In June 2019, VinFast inaugurated and put into operation a car factory in Dinh Vu - Cat Hai economic zone after 21 months of construction and started to hand over 3 car models VinFast Lux SA2.0, VinFast Lux A2.0 and VinFast Fadil

In September 2019, the company officially launched two electric motorcycle models Ludo and Impes VinFast and also introduced an upgraded version of the electric motorcycle line

In January 2020, VinFast announced aggregate sales figures for 2019 Accordingly, a total of more than 17,000 VinFast cars and 50,000 electric motorbikes were ordered by customers In June 2020, VinFast officially opened an office in Melbourne, Australia After that, the company launched a limited edition V8 SUV model President affirming the class of the Vietnamese car brand after 2 years of launch

ENVIRONMENT

2.1 Macroenvironment

2.1.1 Population and demographic factor a, Population

According to the General Statistics Office, in 2020, the average population of Vietnam is estimated at 97.58 million people, an increase of 1.098 million people, equivalent to an increase of 1.14% compared to 2019 Vietnam is the second-most populous country in Southeast Asia (after Indonesia and the Philippines)

POPULATION CHART THROUGH THE YEARS

Source: General Statistics Office 2020 Of the total population, the urban population is 35.93 million people, accounting for 36.8%; rural population 61.65 million people, accounting for 63.2%; male population 48.59 million, accounting for 49.8%; female population 48.99 million, accounting for 50.2%

POPULATION STRUCTURE CHART BY AGE

Source: General Statistics Office 2020 With a large population size and a very high young population, this is a great advantage for VinFast They easily hit the transportation needs (Going to work, going to school…) of most people aged 18-64

b, Labor source

UNEMPLOYMENT RATE OF WORKING AGE QUARTER III OF THE YEAR 2011-2020 DISTRIBUTED BY URBAN, RURAL

UNEMPLOYMENT RATE OF WORKING AGE QUARTER III OF THE YEAR 2011-2020 DISTRIBUTED BY URBAN, RURAL

Source: General Statistics Office 2020 The labor and employment situation in the fourth quarter of 2020 showed many signs of improvement compared to the previous quarter, but due to the impact of the COVID-19 epidemic, the unemployment and underemployment rates for the whole year in 2020 were higher than in 2019 When the number of people having jobs, the income of wage earners is lower than the previous year

From there, it can be seen that the demand for car ownership will be greater due to the increasing population size, abundant labor resources, and increasing quality of labor resources VinFast will receive a lot of advantages from the population environment in Vietnam However, Vietnam's aging population, rising unemployment rate, and attractive Vietnamese market attract many domestic and foreign businesses, making the competition in the market increasingly fierce

c, The process of urbanization, population redistribution

In developing countries in general and in Vietnam in particular, the process of urbanization and population redistribution has taken place strongly Cities are expanding and crowded People from the countryside flocked to the city to do business This is a factor that increases the need to build houses, buy household

furniture, the need for affordable housing, the need for affordable meals, the need to send money back home, the need for public phone calls, and the need for transportation passenger Land in peri-urban areas also gradually became more expensive and became new residential areas, bringing a lot of money to previously deprived suburban farming families This creates a premise for the needs of building houses and buying furniture The process of urbanization and labor shift also helps to change rural life Rural areas become important markets for many businesses; especially VinFast with the goal of reaching new and potential customers.

d, Education level of the population

The shopping and consumption behavior of customers depends on their cultural and educational level It is a consumer culture such as food culture, fashion culture People with high culture will have the opportunity to earn more money, they have a need to consume better quality goods Since then, models from mid-range to high-end segments will satisfy all customers

2.1.2 Economical factors

Economic factors play a leading role and have a decisive influence on VinFast's business activities Economic growth rate, inflation rate, per capita income affect purchasing power and consumption structure

a, Economic growth rate

GDP GROWTH IN 2010-2020

Source: General Statistics Office 2020

2020 is considered a year of great difficulties and challenges for the world economy in general, including Vietnam Although the Covid-19 epidemic has been controlled in Vietnam, there are still complicated developments in the world, production, supply and trade activities, aviation, tourism, labor and employment have been delayed discontinuity Besides, export growth is not sustainable, labor productivity is still low The world economy is forecasted to have the most severe recession in history, growth of major economies is steady deeply reduced due to the negative impact of the Covid-19 epidemic

However, with drastic and effective solutions in realizing the dual goal of "both disease prevention and socio-economic development", Vietnam's economy still achieved positive results with maintaining growth at an estimated GDP growth rate of 2.91% Although GDP growth in 2020 reached the lowest in the period 2011-2020, before the negative impacts of the Covid-19 epidemic, it was a success for our country with the highest growth rate in the world Macroeconomic stability is firmer

b, Inflation rate

AVERAGE CPI GROWTH IN 2020 (%)

Source: General Statistics Office 2020 Average core inflation in 2020 increased by 2.31% compared to the average in 2019 CPI growth rate in December compared to the same period last year in 2016-2020 is: 4.74%; 2.6%; 2.98%; 5.23%; 0.19%

In 2020, due to the impact of the Covid-19 epidemic, the CPI tends to increase from January However, with the close direction and management of the Government, the coordination of ministries, branches, In the locality, the increase of CPI is gradually controlled month by month with a decreasing trend The rate of inflation (consumer price index – CPI) also affects both production and consumption When the inflation rate is high, it will adversely affect consumption, reduce demand, reduce consumption, discourage the production and reduce investment

With the downward trend of the CPI, we can see the economic speed of the economy stabilizing, which can support the growth of car demand, providing a more relaxed trend of competitive pressure In addition, the exchange rate also

affects businesses through the source of imports and exports of businesses

c, Incomes

The General Statistics Office forecasts that with an average growth of 7% in the next 10 years, the income of Vietnamese people will reach 7,500 USD/year by 2030, bringing Vietnam to join the group of high-middle-income countries

With a high GDP growth rate over the past several years, especially in the context of the raging COVID-19 epidemic, the world economy is stagnant, many countries have negative growth, but Vietnam will continue to achieve a GDP growth rate of 2, 7% this year, many international financial institutions continue to give optimistic forecasts about Vietnam's economy in the coming years This has created conditions for people to have access to cars - an asset that was previously considered a luxury In addition, grasping good technology and well-trained staff has helped reduce production costs and product costs, contributing to increasing profits of enterprises This has created advantages for VinFast as well as automobile manufacturers in Vietnam

Stable macro environment supports car demand growth Per capita income grew well, while inflation and exchange rate were managed in a timely and reasonable

manner, creating favorable conditions for people to access cars - an asset that was

previously considered a luxury

2.1.3 Political - legal factors

Vietnam is a country with a very stable political background and a peaceful living environment Therefore, in the short term, the economy in general and the auto industry in particular will not be affected by political fluctuations

The Resolution of the 5th Central Committee of the Party demanded that "all prejudices and barriers" be removed from the private sector In addition, it is proposed to reduce or exempt excise tax according to the percentage of car localization In particular, "reducing excise tax rates for electric cars"

With regard to the State's policies towards the automobile industry, it can be seen that the state always imposes high taxes on automobiles, and at the same time classifies them in the list of goods subject to excise tax For instance, car products are taxed with 15 types of fees Such taxes on cars makes the price of cars sold to consumers in Vietnam very high

The main objective of increasing fees and charges for automobiles is to limit vehicle traffic on the road, thereby contributing to reducing accidents, traffic congestion and generating revenue for the investment budget transportation infrastructure Many policies to protect the auto industry have not yet achieved outstanding results

Over the years, Vietnam has introduced many policies to protect the auto industry, from tax exemptions and reductions to land rent exemptions for businesses investing in this field However, Vietnam's industry, nowadays, has not been developed, mainly stopping at the assembly stage and revealing many limitations and weaknesses

2.1.4 Science and technology factors

Technology is a useful tool to compete to others country New technology will create new products that compete with existing products Therefore, technology creates opportunities for VinFast to go further than other businesses

Currently, the main product of domestic automobile manufacturers is not creating a new car with their own technology, but importing detailed spare parts from abroad and assembling them In other words, products and services of domestic automobile manufacturers still only stop at assembly and repair work Therefore, the value of these imports accounts for a high proportion of the national economy

According to the SITC classification, among imported raw materials and processed materials, fuel accounts for the largest share at 56.6%, while among manufactured goods, equipment, machinery and raw materials Input materials for production account for the highest proportion of 75.7% Such thing reflects Vietnam's great dependence on imported materials and equipment to serve the manufacturing industry The auto industry is no exception to those close dependencies

Up to now, there are only about 300 industrial enterprises supporting the automobile industry On average, each automobile assembly enterprise in Vietnam has 2 manufacturers of auxiliary components for themselves More than 90% of auto parts suppliers in Vietnam are foreign-invested enterprises Meanwhile, only a few domestic enterprises participate in the supply network for automobile production and assembly

VinFast is the first enterprise in Vietnam to own a large automobile factory with the ability to self-stamping large plates - the main component of the body (more than 20 basic panels for each vehicle) with a monitoring system In addition, there is also the first and only engine workshop in Vietnam capable of processing and manufacturing engines on site, according to high European standards The most modern car body welding workshop in Southeast Asia with 1,200 ABB robots operating fully automatically according to industry 4.0 standards, the robots are linked together and are capable of self-understanding and pre-programmed operation The paint shop is fully automated and completely "clean", free from harmful paint odors when applying modern processing technology

2.1.5 Natural environmental factors

The natural environment creates markets that supply business inputs as well as affect income, employment and population Therefore, it affects the purchasing power, consumption ability, sales of enterprises and sustainable development strategies of enterprises and organizations

For the automotive industry, climate change and environmental protection are now one of the important issues that strategy planners and marketing managers need to pay attention to It has become a global problem, requiring everyone's action to limit negative impacts and gradually improve damage to the environment n order to limit this situation, over the years, car manufacturers have changed direction and constantly innovated technology, introducing fuel-saving, emission-reducing, and environmentally friendly vehicles Especially with the emergence of electric vehicles, which use renewable and environmentally friendly clean energy

The natural environment can become an opportunity as well as a threat to car manufacturers like VinFast Managers need to care about the natural environment, both to obtain the necessary resources and to avoid damaging the environment

2.1.6 Cultural and social environment

Culture - society are playing a crucial role in effective affecting the management and business activities of all enterprises When there is a change in lifestyle, religion, and qualifications, there will be a huge change in the demand for products Capturing these factors will help businesses quickly adapt to customer requirements, have appropriate production or marketing activities For example, the aging trend of the population will create opportunities for businesses operating in the fields of medical services, tourism, nursing homes, etc The increased level of education will increase the quality of resources national manpower

In the past, Vietnamese people tended to ride motorbikes more than cars because when traveling far away, people could choose public transport at a reasonable price instead of having to spend a large amount of money to buy an umbrella bowl In recent years, buying goods with Vietnamese people, especially luxury goods, is

quite popular, which may be due to the wings of Vietnamese people Those advantages have strongly hit people's psychology, creating an opportunity for automobile manufacturers to constantly innovate and develop to meet the market Pioneering in the field of automobile manufacturing in Vietnam, VinFast brings to the market its quintessential products to serve the increasing tastes of domestic and international people

2.2 Microenvironment 2.2.1 Suppliers

Currently, Vietnam is emerging as one of the most potential automobile consumption markets in the world With the income of Vietnamese people increasing, estimated to reach over $3,000 by 2021, combined with improved infrastructure and attractive demographics will be a prerequisite for the purchasing power of Vietnamese people Vietnam's automobile market will grow strongly in the coming time

As a leading enterprise in the field of automobile manufacturing in Vietnam, VinFast successfully organized a workshop with suppliers in Frankfurt, Germany The event gathered more than 300 prestigious suppliers in the world and gained positive effects, proving the attractiveness of VinFast's large-scale car production project, and affirming the company's commitment will produce cars that meet international standards

In April 2018, VinFast and General Motors (GM) signed a strategic cooperation agreement At the same time, VinFast received the transfer, took over the entire GM factory in Hanoi, and implemented investment activities to increase capacity to produce a completely new line of small cars licensed by VinFast from GM

Next, VinFast signed a series of important contracts:

- Cooperating with LG Chem Company (LG Group - Korea), Lear… produces international standard battery lines, used for VinFast electric vehicles and other products, towards perfecting the ecosystem for the automobile and electric motorcycle manufacturing industry

- On June 11, 2018, AAPICO Hitech Company (Thailand) and VinFast Company signed a memorandum of understanding to establish a joint venture factory for stamping and welding body parts AAPICO is one of the leading auto parts manufacturing companies in Thailand, specializing in the production of jigs, molds, stamping parts, plastic parts, hot stamping, and other auto parts has network in India, Europe, USA, Mexico, China

- In addition, VinFast has obtained lucrative contracts to buy back intellectual property rights from BMW Thanks to that, the company has almost completed its entire production process:

• Pininfarina (design)

• BMW (technology, techniques, production methods)

• Magna Steyr and AVL (automobile engineering and consulting) • Siemens (factory design, management and operation)

• Bosch (automotive components and technology)

- Starting from June 2019, Hanoi An Phat Plastic Factory (VAPA) will officially come into operation VAPA will provide plastic components for VinFast to serve the automobile and motorbike manufacturing industry and will expand its customer network in the future Thanks to this, the localization rate of each car and motorbike of VinFast will be increased, helping to realize the dream of Vietnamese cars

From the above cooperation, we see that VinFast owns the most developed technology in Vietnam Along with a clear orientation on development goals and directions, VinFast's supply chain will conquer the Vietnamese market and quickly spread to many regional and international markets

2.2.2 Customers

Customers - the decision - makers to purchase products and services of the business are the most important actors in the company's micro environment Customers are the beneficiaries of the quality characteristics of products and services The goal of the entire value delivery network is to serve target customers and create lasting relationships with them

Five types of customer markets:

• Consumer market: individuals and households buy goods and services for personal consumption

• Business markets: buying goods and services for further processing or use in their production

• Reseller market: buy goods and services to resell at a profit

• Government market: made up of government agencies that buy goods and services to produce public services

• International markets: buyers in other countries, including consumers, manufacturers, resellers and governments

Businesses need to create good awareness for the target customer group, build an effective distribution system to each of those customer groups VinFast has identified target customers based on the following criteria:

• Increasing consumer demand: The increasing income of people leads to an increase in the demand for car purchases Residents of big cities like Hanoi, Ho Chi Minh, and Da Nang… increasingly have a need to use "clean" vehicles Therefore, Vinfast is researching to produce electric cars

• After-sales service: Vinfast offers a gift package worth 15 million VND to

customers who have received Fadil cars through the program "Top notch experience with VinFast Fadil" In addition, the program "Exchange old for new", applies to owners of all car manufacturers who want to change to Vinfast

• Reasonable prices for the market segment: VinFast continues to introduce strong and personality SUVs and sedans with the beauty of Vietnamese brands With only 336 million dongs, we can own the remote model VinFast Fadil is making a splash • Quality is the most important factor: According to VinFast, the components or parts on the car are guaranteed to be of the highest quality In addition, the

company's models will in turn undergo hundreds of tests for quality and safety standards in 14 countries before mass production

It is easy to see that Vingroup has a huge list of potential customers, who are using real estate, tourism, medical examination, services, supermarkets or have

children studying at member schools Therefore, VinFast will have a certain advantage

2.2.3 Competitor a Brand competitor

Competitors are organizations and individuals that can satisfy the needs of the target customers of the business with the same product or service Marketers must gain a strategic advantage by positioning their products relative to their competitors'

products in the minds of consumers

As of mid-2020, VinFast has deployed 2 main product lines in Vietnam: electric motorbikes and gasoline cars So far, the company has sold three different car lines including VinFast Fadil, VinFast Lux, VinFast President, and VinFast Premium In which VinFast Lux and VinFast President are high-class cars, so they have high prices Thus, in the future, VinFast will have to compete with many competitors on price

• In the A-class segment, VinFast already has a key product, the Fadil model (listed price is 425 million VND) VinFast Fadil's competitors will be two Korean car models assembled in Vietnam, namely Hyundai Grand i10 and KIA Morning, in which Hyundai Grand i10 is the most popular car model in the market and the leading the A-class segment

• VinFast also has one car model in the D-class car segment, the LUX A2.0 model (about 1.36 billion VND) During this period, the rival of LUX A2.0 is none other than two prominent names, Toyota Camry and Mazda6

• In the crossover/SUV multi-purpose vehicle segment, VinFast has the LUX SA2.0 model (approximately 1.8 billion VND) which is causing fever in the market This segment is developing very strongly recently, car manufacturers are also racing to launch new products VinFast SA2.0's strongest competitor is Toyota Fortuner (1,026 billion VND - 1,354 billion VND)

By the end of 2019, the list of VinFast dealers has more than 40 addresses Continuing VinFast is expected to open 76 more VinFast Showroom doors by the end of 2020 Thus, after less than 1 year, VinFast's dealer system will reach the number of 76 VinFast auto dealers With such a number of dealer addresses, VinFast will have a wider distribution channel than Hyundai Thanh Cong (70 dealers) or Toyota Motor Vietnam (56 dealers)

b Competitors Substitute Products

Substitute product competitors are businesses that produce different products that satisfy the same need Businesses will find ways to put their products ahead of the competition

Currently, electric and hybrid car models have not been imported much and are popular in Vietnam However, as environmentally friendly vehicles are becoming a global trend and will become a global standard in the coming years, the trend of "green cars" including electric and hybrid vehicles is taking shape more clearly in the global automotive industry

Electric cars using rechargeable batteries are gradually becoming familiar to domestic users, a number of luxury electric cars are available on the Vietnamese market: Porsche Taycan has prices from 5.72 billion VND, Jaguar i-Pace from VND 4 billion, Tesla Model X, Tesla Model 3 from VND 3 billion…Although the price is quite high, the outstanding and environmentally friendly utility of these car manufacturers is also gradually emerging with developed markets like Vietnam Tesla is an American electric car company When it comes to electric cars, this is considered a formidable competitor in terms of advanced technology and eye-catching exterior When Tesla officially distributes more to Vietnam, this will be a competitor of VinFast

In addition, famous car manufacturers in the world such as Ford, BMW and many others have committed to invest about 225 billion USD in the electric vehicle segment in the next five years Volkswagen leads the race with $44 billion, aspires to end the development of petrol and diesel models by 2026 and 40% of its sales are