some recommendations to improve ha anh international commercial services company limited’s marketing strategy

The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Field Study Report ‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’ Student: Vi Nhat Anh Class: TATM CN6 A1 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Hanoi, November 2009 Field Study Report ‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’ Student: Vi Nhat Anh Class: TATM CN6 A1 Supervisor: Bui Nguyet Anh M.A Hanoi, November 2009 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Acknowledgements In the process of writing this report, I have gained a great deal in terms of project planning, research methodology and information acquisition But I could never have done this work without the help and advice of many whose ability far exceeds my own With gratitude, I acknowledge a specific debt to my supervisor, Ms Bui Nguyet Anh, for her invaluable advice and personal guidance from the planning stage to the completion of this report My thanks also go to all my teachers at the Foreign Trade University for their devoted teaching and for introducing me to the world of knowledge during my four and a half years at the University Their influence will remain with me for my entire life I would like to thank Ha Anh INCOSE Co.,Ltd for providing the information, data, materials that enabled me to complete my report Finally, I wish to express my deepest appreciation to all people in my family for their love, understanding and encouragement Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd TABLE OF CONTENTS Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd INTRODUCTION Nowadays, marketing is obviously more and more vital in the success of every enterprise However, not many of the companies in Vietnam have paid adequate attention to marketing activities, especially when both domestic and global competition is getting fiercer and fiercer Being one of the companies specializing in Production line and equipment for foodstuff industry, mechanical engineering, construction machinery in Vietnam, Ha Anh International Commercial Services Company Limited (HA ANH INCOSE CO.,Ltd) has achieved certain successes in this field Its sales of line and equipment for foodstuff industry have increased over the years since its establishment After taking a close look at HA ANH INCOSE CO.,Ltd’ s performance, I decided to choose “Marketing strategies of Ha Anh International Commercial Services Company Limited” as the topic for my field study report with a view to examining Ha Anh International Commercial Services Company Limited’s marketing strategy and making some recommendations to improve it Ha Anh International Commercial Services Company Limited has a lot of business activities, but because of limited time, this report focuses only on the company’s marketing activities for one line of its business, that is line and equipment for foodstuff industry, on the market in Vietnam Apart from the introduction and conclusion, the report is divided into chapters as follows: Chapter 1: Theoretical Framework Chapter 2: Marketing strategies of Ha Anh INCOSE Co.,Ltd Chapter 3: Some Recommendations to Improve Ha Anh International Commercial Services Company Limited’s Marketing Strategy Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Chapter Theoretical Framework 1.1 The concept of marketing 1.1.1 The definition of marketing Today’s then central problem facing businesses is not a shortage of goods but a shortage of customers Most of the world’s industries can produce far more goods than the world’s consumers can buy Overcapacity is resulted from individual competitors projecting a greater market share growth than is possible If each company projects a 10 percent growth in its sales and the total market is growing by only percent, the result is excess capacity This in turn leads to hyper competition Competitors, desperate to attract customers, lower their prices and add give away These strategies ultimately mean lower margins, lower profits, more failing companies, and more mergers and acquisitions Marketing is the answer to how to compete on bases other than price Because of over capacity, marketing has become more important than over If forced to define marketing, most people, including some business managers, say that marketing means “selling” or “advertising” It’s true that these are parts of marketing But marketing is much more than selling and advertising Today, marketing must be understood not in the old sense of marketing a sale-“telling and selling”-but in the new sense of satisfying customer needs Selling occurs only after a product is produced In contrast, marketing starts long before a company has a product “Marketing is the homework that managers undertake to assess needs, measure their extent and intensity and determine whether a profitable opportunity exists Marketing continues throughout the product’s life, trying to find new customers and keep current customers by improving product appearance and performance, learning from product sales results and managing performance”1 So what does the term “marketing” mean? Actually, there is no single and universally agreed definition of marketing The American Marketing Association defined 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 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd and organizational goals”2 The writer of the book “The Silk Road to International Marketing” had another definition as follow: “Marketing is the process by which decisions are made in a totally interrelated changing business environment on all the activities that facilitate exchange in order that the targeted group of customers is satisfied and the defined objectives accomplished ” 3.Though there are many definitions, a central part of any definitions of marketing is the exchange process – the process of giving something of value in return for something of value Or in other words, it’s the process of transferring between two or more parties of tangible or intangible items of value(see figure 1.1) Cash, debt, time, votes, behavior, etc Marketer Marketer Goods, Services, Goods, Services, ideas, ideas, People and Places People and Places Customers Wants and needs Health, safety, comfort, transportation, beauty, productivity, etc Figure 1.1: the exchange process Source: Courtland L Bovee, Jonh V Thill , “Marketing”, 2nd edition, p.6 For marketing to occur, at least four factors are required: (1) two or more parties with unmet needs, (2) a desire and ability to satisfy them, (3) communication between the _ Amber, T.and Styles, C.(2000), The Silk Road to International Marketing, Harlow: FT Prentice Hall Arch G Woodside(1990), Outdoor advertising as experiments, Journal of the Academy of Marketing science Berkkowitz, Kerin, Hartley, Rudelius, (1990), Marketing, 2nd edition, Irwin McGrawHill Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd parties, and (4) something to exchange4 Here’s what Berkowitz stated in his book “Marketing” As marketing is a kind if exchange, certain conditions must exist before the exchange can occur 1.1.2 The goals of marketing “Today’s successful companies at all levels have one thing in common; their success is founded upon a strong customer focus and heavy commitment to marketing” They motivate everyone in the organization to deliver high quality and superior value for their customers, leading to high levels of customer satisfaction These organizations know that if they take care of their customers, market share and profits will follow Creating customer values and satisfaction is at the very heart of modern marketing thinking and practice The goal of marketing is to attract new customers by promising superior values, and to keep current customers by delivering satisfaction When a company succeeds in creating more values for customers than its competitors can do, that company is said to enjoy competitive advantage in an industry 1.2 Competitive Analysis It is the increasingly emerging markets that have created favorable conditions for the rapid development of world trade and investment, which is well – manifested in the sophisticated growth of a number of global companies To compete in one or more foreign markets, companies not only need to broaden relentlessly their sources of competitive position One particularly useful technique in analyzing a firm’s competitive position relative to its competitors is SWOT (strengths Weaknesses, opportunities, and threats) analysis aims to isolate the key issues that will be important to the future of the firm and that will be addressed by subsequent marketing strategy A SWOT analysis divides the information into two main categories (internal factors and external factors) _ Courtland L Bovee, Jonh V Thill, (2000), “Marketing”, 2nd edition Crag, C.S and Douglas, S.P (2000), International Marketing Research, Chichester: Wiley Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd and then further into positive aspects (strengths and opportunities) and negative aspects (weaknesses and threats) The internal factors could be viewed as strengths or weaknesses, depending upon their impact on the firm’s positions; i.e., they may represent strength for one firm but a weakness, in relative terms, for another They include all of the marketing mix (product, price, promotion and place strategy) as well as personnel and finance The external factors, which again may pose a threat to one firm but create opportunities to another, include technological changes, legislation, socio-cultural differences, and change in the market place or competitive position 1.3 Global Marketing Strategy In terms of globalization, worldwide businesses use global marketing when they take the same or similar approach or content for one or more elements of the marketing mix, that is, the same or similar brand names, advertising And so on in different countries Although most of the multinational companies using global marketing mix-product, pricing, promotion and place – are standardized Business can make some elements of marketing more global and others less so Accordingly, possible adaptations that firms might apply to their product, promotion, price, and place when they enter through the foreign markets will be provided in this part 1.3.1 Product There are five international product and promotion strategies for a company to extend its market base into other geographic markets (See table 1.1) Straight extension means marketing the product in the foreign market without any adaptation Top manager asks its marketing people to “find customers for the product as it is” As a result, it is seen as the easiest product marketing strategy and may be the most profitable one as well However, the company should first determine whether foreign consumers use that product or not Straight extension has been successful with cameras consumer electronics, and many machine tools This strategy is tempting because it involves no additional product development cost, manufacturing changes, or promotional Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd modification But it can be costly in the long run if products fail to satisfy foreign consumers Table 1.1: Five international product and promotion strategies Promotion Product Do not change Adapt product Develop new product Do not change Straight extension Product product promotion Adaptation Product Communication promotion adaptation adaptation Dual adaptation invention Source: Subhash C.Jain (1995), international marketing management Product adaptation involves changing the product to meet local conditions or preferences There are several levels of adaptation A company can produce a regional version, a country version, a city version or even promotion retailer versions of its products Although, products are frequently adapted to local tastes, in some instances they must be adapted to local superstitions or beliefs, too Product invention consists of creasing something new the foreign market It can be divided into two forms The first is backward invention, which means reintroducing earlier products forms that happen to be well adapted to the needs of a given country And forward invention is to create a new product to meet a need in another country.6 1.3.2 Promotion Companies can either adopt the same promotion strategy they used in home market or change it to suit each local market Although some global companies use a standardized promotion campaign changes might be needed to comply with local regulations and references There are four different levels of adapting promotion strategy _ Subhash C.Jain (1995), International Marketing Management 10 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd However, most of those web sites are not attractive enough and the information about their businesses is not sufficient enough to appeal to customers 2.2.4 Opportunities The only opportunity for Ha Anh INCOSE Co.,Ltd is that can have a better market growth in the near future There are two reasons for this Firstly, the market in Vietnam for Line and equipment for foodstuff industry is growing rapidly because there are more customers for this item Secondly, Ha Anh INCOSE Co.,Ltd is now considering expanding, as it is looking for more sources of capital Some employees in Ha Anh INCOSE Co.,Ltd are thinking of investing in the company by buying its shares 2.3 Ha Anh INCOSE Co.,Ltd -marketing mix 2.3.1 Product Famous international firms as products, which fundamentally provide its customers with various benefits make foodstuff of Ha Anh INCOSE Co.,Ltd become a good choice of many customers These are core benefits, generic product, exported product and augment product The core benefit of Ha Anh INCOSE Co.,Ltd is the usage of product-which the target customer finds Moreover, the quality of Ha Anh INCOSE Co.,Ltd’s foodstuff has been maintained over the years There has been no complaint from the consumers about their products The company’s two-year guarantee period is also satisfactory to consumers 2.3.2 Price The first strategy that Ha Anh INCOSE Co.,Ltd adopts is low price strategy as most of competitors This policy of pricing is much more attractive to customers as Ha Anh INCOSE Co.,Ltd’ prices normally are among the lowest for air foodstuff’ The second strategy that is applied by Ha Anh INCOSE Co.,Ltd’s for Line and equipment for foodstuff is price competition As a result, the price of Ha Anh INCOSE Co.,Ltd’s Line and equipment for foodstuff sold by these retailers may be cheaper as some of them may want to satisfied their commission per two-way to get profits from 22 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd selling a big amount It is the price competition between Ha Anh INCOSE Co.,Ltd retailers that benefits customers 2.3.3 Place A good distributing policy helps business activities safer, increasing the connection in business, decreasing competition and marketing the circulation of goods more quickly and efficiently In the domestic market Ha Anh INCOSE Co.,Ltd has good relations with its partners so they help Ha Anh INCOSE Co.,Ltd very much in the distribution They help Ha Anh INCOSE Co.,Ltd win over other rivals even in the fiercest competition The company not only supplies its two ways to these retailers, but also supports them in terms of outlet decoration, staff training and marketing activities Besides, each retailer will get a juicy bonus if a product line is sold 2.3.4 Promotion Promotion is the aspect of marketing concerned with increasing sales Marketing must be considered on marking production decision, and promotion must be considered in the overall marketing process Promotion attempts to persuade and influence the customer’s attitude in various ways Ha Anh INCOSE Co.,Ltd has used some ways to advertise its product such as advertisements on television, internet, newspaper, magazine… However, they advertisements are not very efficient Ha Anh INCOSE Co.,Ltd uses two promotion strategies that is pulling strategy and pushing strategy to each target customer as illustrated in the following figure: Figure 2.3: Pulling strategy Factory Wholesaler Retailer Customer 23 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Ha Anh INCOSE Co.,Ltd uses this strategy to make the customers have an idea and believe in product and buy the products of Ha Anh INCOSE Co.,Ltd Figure 2.4: Pushing strategy Factory Wholesaler Retailer Customer Pushing strategy aims at company and branch office dividing the price for advertising and discounted price Ha Anh INCOSE Co.,Ltd uses this strategy because there are many branches in company 24 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Chapter 3:Some Recommendationsto Improve Ha Anh INCOSE Co.,Ltd’s Marketing Strategy 3.1 Some recommendations to the Government and relevant authorities In doing business, Ha Anh INCOSE Co.,Ltd in particular, and other enterprises in general, are facing not only subjective problems but also objective ones, which need efforts and solutions from the government It is, therefore, recommended that our government should take these following actions so as to create better business environment for companies like Ha Anh INCOSE Co.,Ltd 3.2 Recommendations to Ha Anh INCOSE Co.,Ltd Global marketing strategy is not about standardizing the marketing process on a global basis Although every element of the marketing process – product design, product and brand name, packaging, pricing, advertising strategy and execution, promotion, and distribution – may be a candidate for standardization, standardization is just one part of a global marketing strategy Consequently, striking the right balance between standardization and localization greatly contribute to Ha Anh INCOSE Co.,Ltd’s success Ha Anh INCOSE Co.,Ltd has developed a combination of standardization and localization of marketing programs to match Vietnamese market 3.2.1 Improving the company’s marketing mix The company needs to build up a good marketing mix for the current marketing strategy, which bases on the four elements: Product: improving the quality and diversifying categories of products is the core of product element in the marketing mix As discussed above, the market for Line and equipment for foodstuff in Vietnam is becoming more sophisticated with a variety if different demands The small portion of the market usually set high requirements for the trend-catching and material-selecting criteria of the imported Line and equipment for foodstuff 25 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Price: high price has always been the disadvantage in competition Although Ha Anh INCOSE Co.,Ltd’s prices have been considered reasonable for some brands over the few years, keeping this low level is a quite difficult task for the company In a addition, as Ha Anh INCOSE Co.,Ltd is thinking of expanding its product range with higher and also lower quality products, maintaining competitive prices is not easy This is really a jay to the company’s success in the future Place: a good distributing policy helps business activities safer, increasing the connection in business, decreasing competition and making the circulation of goods faster and more efficiently Due to the characteristics of Ha Anh INCOSE Co.,Ltd’s activities, there are three ways for the company to make further improvements to its distribution performance Firstly, improve Ha Anh INCOSE Co.,Ltd’s distribution users in the shortest period of time The second alternative is to open more branches The last alternative, which should be used in the long term and considered to be the best, that is to establish a network of representative offices throughout the country Promotion: this is one of the weaknesses of Ha Anh INCOSE Co.,Ltd For the purpose of growth, the company should invest more in promotion activities This is a method not only to increase sale but also to build the company’s image The measures to build the company’s image will be discussed in the next section 3.2.2 Building the company’s image It is said that advertising is a business art Ha Anh INCOSE Co.,Ltd’s weakness is efficiency of promotion is not good The reason is Ha Anh INCOSE Co.,Ltd has not applied tools of promoting policy It might be an advertising on TV, on the radio in rush hours The strength of advertising on TV help viewers can see both images and sounds, colors Furthermore, the expenses of advertising on TV is broadcasted many timers per dat Besides, almost the households belong to every class in society have TV and watch favorite program on TV in their free time The effect of this type of advertising is wide Today is a era of IT and modern means of communication Internet has played an important role in social activities and in the economy 26 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd The important thing now is that Ha Anh INCOSE Co.,Ltd’s politic department needs to collect importance information related to the company, its products and product quality and commercial culture of the company As a result, Ha Anh INCOSE Co.,Ltd’s brand name and reputation will be spread and have a profound impact on the customers In conclusion, advertising cost is high, however, it can be considered as an investment rather than an expense, more wisely spending money can help the company expand brand name and good for the company’s activities 27 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Conclusion The first part of the thesis concepts is related to marketing and the theory that will be later based on to research The definition, the goals of marketing , the contents of marketing as well as implementation and control are main parts of chapter one Gaining an insight into the theory of marketing gives us the background to keep the thesis to be on the right track The research has gone over the practical situation by looking at the company’s overview and the application of marketing strategies for Ha Anh INCOSE Co.,Ltd In performing its marketing strategies, the company has achieved considerable successes but some limitations still remain The analysis of these shortcomings and recommendation for solutions all are made in accordance with the modern theories of marketing Despite only three years of doing business in Vietnam, Ha Anh INCOSE Co.,Ltd has achieved considerable successes Since its establishment, the market share of Ha Anh INCOSE Co.,Ltd has increased dramatically in the premium segment But the most important success of Ha Anh INCOSE Co.,Ltd is that it has built up a good image, favorite brand, nation-wide distribution network and created good impression to stakeholders including its customers The above successes are greatly attributed to the company’s proper and flexible marking strategies However, there are still some obstacles that the company must overcome to be successful in the future time The market and the business environment are changing day in and day out, if not to say, the competition in all industries is becoming fiercer and fiercer All of them require the flexible and appropriate adjustment and new application to maintain successes in a long run In this thesis, the writer also has suggested some of solutions to improve the marketing strategies for Ha Anh INCOSE Co.,Ltd in the time to come The macrosolutions give recommendations for the government to complete the legal framework, to improve the infrastructure and to increase the effectiveness in anti counterfeit 28 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd mission The micro-solutions concentrate on boosting the company’s efficiency in performing marketing stratifies In the coming years, if Ha Anh INCOSE Co.,Ltd knows how to take advantage of its strengths, to overcome its weaknesses, to enhance the smooth exchange between the company and its customers, to build close and deep relationships with all stakeholders, the company will certainly maintain its position in Vietnam and enlarge its market share gradually 29 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd References Amber, T.and Styles, C.(2000), The Silk Road to International Marketing, Harlow: FT Prentice Hall Arch G Woodside(1990), Outdoor advertising as experiments, Journal of the Academy of Marketing science Berkkowitz, Kerin, Hartley, Rudelius, (1990), Marketing, nd edition, Irwin McGrawHill Charlers Hill(1997), International Business Courtland L Bovee, Jonh V Thill, (2000), “Marketing”, 2nd edition Crag, C.S and Douglas, S.P (2000), International Marketing Research, Chichester: Wiley Keegan, Warren J.(1995), Multinational Marketing Management Kotler, Philip(2000), Marketing Management Subhash C.Jain (1995), Intenational Marketing Management 10 Philip Kotler, Gery Armstrong, John Saunders, Veronica Wong, principles of Marketing, 2nd edition,p.97 30 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd LIST OF ABBREVIATIONS Ha Anh INCOSE Co.,Ltd Ha Anh International Commercial Services Company Limited TV Television 31 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Field Study Report ‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’ Student: Vi Nhat Anh Class: TATM CN6 A1 Hanoi, November 2009 32 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Field Study Report ‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’ Student: Vi Nhat Anh Class: TATM CN6 A1 Supervisor: Bui Nguyet Anh M.A Hanoi, November 2009 33 Vi Nhat Anh TATM CN6 A1 ... Framework Chapter 2: Marketing strategies of Ha Anh INCOSE Co.,Ltd Chapter 3: Some Recommendations to Improve Ha Anh International Commercial Services Company Limited’s Marketing Strategy Vi Nhat Anh. .. Commercial Services Company Limited” as the topic for my field study report with a view to examining Ha Anh International Commercial Services Company Limited’s marketing strategy and making some recommendations. .. strategy Factory Wholesaler Retailer Customer 23 Vi Nhat Anh TATM CN6 A1 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd Ha Anh INCOSE Co.,Ltd uses this strategy to make the customers have an idea