Strategic marketing plan for Casumina 2008 to 2010

2 MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM Huynh Ba Chan Nhu STRATEGIC MARKETING PLAN FOR CASUMINA 2008-2010 FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor: Dr. Tran Xuan Kiem Ho Chi Minh City 2007 3 ACKNOWLEDGEMENT OF COMMITMENT I, Huynh Ba Chan Nhu, have prepared and conducted this “Strategic Marketing Plan for Casumina 2008-2010” as the final project of MBMM program. With the approval and keen advices of Mr. Le Van Tri, Sales and Marketing Director of The Southern Rubber Industry Company and his team, the project has been accomplished by myself and served the company as a real case. I trust the legality of all references, information sources, and materials using to complete the project. And I am confident to submit it to Professors and MBMM Faculty members. 4 ACKNOWLEDGEMENT OF APPRECIATION I would like to say thank you so much to many people who have given me helping hands in this project. Your inputs and encouragement are treasureable for my project accomplishment. First of all, I would like to show my great appreciation towards Dr. Tran Xuan Kiem who has provided me a lot of insightful feedbacks and devoted guidance to my work. I simply can say, it is a great chance for me to be with you. I’m also thankful to Mr. Le Van Tri, Sales and Marketing Director of the Casumina for giving me an opportunity to study about Casumina case and spending your valuable time giving me a lot of market insights. Next, I’d also like to send many thanks to Mr. Bui Quoc Long and Mr. Pham Duc Dat, Sales Executives for their strong supports. I’d also like to take this opportunity to present my grateful heart to all professors, lecturers and tutors from the Open University of Ho Chi Minh city and the Solvay Business School. In the last one and a half year, you have full-heartedly directed us to the broad path of updated knowledge treasure. Besides, I’d like to present my deep thanks to the Post Graduate Office and our program coordinators, Ms. Bui Phan Bao Tran, Mr. Serge Bywalki for your kind supports, and especially Ph.D Le Thi Thanh Thu for her encouragement at the enrollment stage. I’d like to convey my sincerely thanks to my classmates and my group who have shared with me a lot of information and help. Last but not least, I wish to express my gratitude to my beloved dad, my husband and the whole family members who give me strength to fulfill the project as well as the whole program. 6 TABLE OF CONTENTS Page ABBREVIATIONS i LIST OF CHARTS AND TABLES ii EXECUTIVE SUMMARY iii INTRODUCTION 1 CHAPTER 1 ABOUT THE COMPANY 3 1.1 Establishment and achievements 3 1.2 Mission 3 1.3 Corporate goals 4 1.4 Core competency and sustainable competitive advantage 4 CHAPTER 2 SITUATION ANALYSIS 5 2.1 SLEPT Analysis 5 2.1.1 Social factors 5 2.1.2 Legal factors 5 2.1.3 Economic factors 5 2.1.4 Political factors 6 2.1.5 Technological factors 6 2.2 Industry Analysis 6 2.2.1 Market demand 7 2.2.2 Raw material supply 8 2.2.3 Industry capacity and output 8 2.2.4 Export 8 2.3 Competitor Analysis 8 2.4 Company Analysis 11 2.4.1 Strengths 12 7 2.4.2 Weaknesses 13 2.4.3 Opportunities 14 2.4.5 Threats 14 2.5 Customer Analysis 15 2.5.1 Customers’ decision-making process 15 2.5.2 Influencers 16 2.5.3 Purchasing drivers 16 2.5.4 Key success factors 16 CHAPTER 3 MARKETING STRATEGIES FOR AUTOMOBILE TIRE 17 3.1 Marketing and Product Objectives 17 3.2 Marketing Goals 17 3.3 Segmentation and Targeting 19 3.4 Point of Difference 19 3.5 Positioning 20 3.6 Marketing Strategies for Automobile Tire 20 3.6.1 Market penetration 21 3.6.2 Market share expansion 22 3.6.3 Brand image building 22 CHAPTER 4 MARKETING PROGRAM 23 4.1 Marketing Tactics 23 4.1.1 Product 23 4.1.2 Price 23 4.1.3 Place 24 4.1.4 Promotion 25 4.2 Financial Data and Projection 25 4.2.1 Sales revenue 25 8 4.2.2 Financial projection 26 4.2.3 Budget planning 26 4.3 Implementation 27 4.3.1 Corporate structure 27 4.3.2 Corporate culture 27 4.3.3 Human Resource 27 4.3.4 Marketing program implementation 27 4.4 Evaluation, Monitoring and Control 29 REFERENCES 30 APPENDICES 31 9 ABBREVIATIONS AFTA Asean Free Trade Area ASEAN Association of South East Asia Nations BPTO Brand Price Trade Off B2B Business to Business B2C Business to Customer CRM Customer Relationship Management DRC Danang Rubber Company ERP Enterprise Resource Planning FDI Foreign Direct Investment GDP Gross Domestic Product HCMC Ho Chi Minh City ISO International Organization of Standardization JIS Japanese Industrial Standards MIS Marketing Information System OEM Original Equipment Manufacturer PNTR Permanent Normal Trade Relation R&D Research and Development SBU Strategic Business Unit SRC Sao Vang Rubber Company US United States USD United States Dollar VND Vietnam Dong WTO World Trade Organization i 10 LIST OF CHARTS AND TABLES CHARTS Page 2.1 Brand Positioning Map 10 2.2 Casumina Distribution System 12 3.1 Ansoft Matrix Model for Casumina 21 4.1 Revenue of Casumina 2000-2010 25 TABLES 2.1 The Number of Registered Vehicles 7 2.2 Capacity versus Consumption of Automobile Tire 8 4.1 Financial Projection 2008-2010 26 4.2 Budget Planning 2008-2010 26 4.3 Marketing Program 28 ii 11 EXECUTIVE SUMMARY Casumina has had good business on tire and tube production during past years when the brand knowledge was scarce and not an important component of success. It was enough to develop a product with right balance of quality and price, and good distribution. Certainly, the quality, price and distribution are still highly important factors for success in the marketplace. But today success requires more. Brand equity and long-term strategic marketing plan count a lot to sustain a company’s competitive advantage. The Strategic Marketing Plan has prepared for Casumina to outline analysis on Casumina’s problems, opportunities, ambitious goals, and actionable programs to enhance its brand image perception and obtain the leader position in the new automobile tire market of Vietnam. The main marketing objectives anchor on intensive growth of radial tire in domestic market, opportunity search to export automobile tire to other developing countries, and strong brand building. With the positive growth rate of the industry, 10% per year, we stretch for the goal of 30% increase in revenue in the three coming years 2008-2010. And to achieve the goals, we propose the strategies of horizontal growth for market penetration, general market share expansion with creating differentiation in after-sale services, customer services and brand reposition towards “good quality” and “reliable brand” attributes. In fact, the most difficult strategy of Casumina is to change customers’ prejudice on Vietnamese goods quality. Therefore, building a new brand concept and thematic brand building programs for Casumina automobile tire have been strongly highlighted in this plan. Sub-brand for radial tire is also considered iii 12 optional in this plan. The message of “international quality standards” is found key for the brand communication. Next, price plays an important role in a brand success, especially in B2B segment. However, it is better to be perceived “cost effective” than “reasonable price”. In short, the quality and price factors of Casumina automobile tire need to be in balanced equation, or even better with “value for money” perception. Thus, research on Brand Price Trade Off and Brand Health Tracking are also designed in the program to ensure that Casumina has adequate tools to keep track the market trend. Moreover, other marketing programs are also very critical for Casumina to gain leading position in automobile tire market. They are considered as milestones of Casumina’s strategic planning. • In line with above the line activities, we giving Casumina a new and outstanding identity in showroom, point of purchase. • B2B sales will be more focused for its great contribution to sales and potential growth. • Modern tools to improve management like ERP and CRM are on development. As the market leader, Casumina is actually looking at best supports to the business development. • Marketing budget has been raised from 0.5% to 4% of total turnover. More PR campaign and marketing activities targeting to customers have been considered in the plan. [...]... Management Board to improve their brand performance and to succeed in competition The Strategic Marketing Plan for Casumina 2008- 2010 focuses to promote Casumina automobile tire products in domestic market which has been forecasted the most potential and fast growing market in coming years In this market, there are currently two main segments: bias tire (suitable for long run, low speed and poor road condition)... opportunities to have brand sponsorship (exclusively or co-orporately) to events like contest on traffic laws or car racing - In addition, CRM will be a powerful supporting tool for us to have loyalty programs for current customers and trial invitations for potentials Good customer analysis might increase our chance to win customers of competitors, which we believe the most challenge for our sales and marketing. .. region sells products to others’ regions Moreover, Casumina emerges weakest in the North and the Central (Appendix 24, 25) - Marketing/ Sales supports: Not many marketing activity has been done to pull customers to Casumina during past years Therefore, image of Casumina from customers’ eyes does not come out clearly while customer’s recalls of sales supports and after sales services to “push” products... with Casumina brand is one of the cases Though the company achieved the revenue of 100 billion US dollar, 40% share of tire and tube market, and 94% mindshare in 2006, its brand has not yet been perceived very positive by their customers Therefore, I have decided to work on the Strategic Marketing Plan for Casumina 2008- 2010 in the hope that I can contribute some ideas for the Management Board to improve... customers’ perceived quality As such, any opportunity to cooperate with foreign investors in radial tire industry might help Casumina take advantage of its partner’s know-how And marketing communication is suggested to focus on quality matter of Casumina radial tire in coming years 3.2 MARKETING GOALS The following goals are set for both domestic and export automobile markets: 18 - Sales target of automobile... customers 3.5 POSITIONING As for automobile tire, both individual and commercial customers have perceived it a high value purchase, i.e a more quality to price equation Therefore, from these consumer insights, Casumina desires to obtain a position in customers’ mind as a unique local and mass brand that offers international standard quality at most cost effective price 3.6 MARKETING STRATEGIES FOR AUTOMOBILE... using efficiently our resources - Customer Relationship Management (CRM) is a next step for Casumina to keep track customers’ history and their contribution to sales so that the company has an appropriate program to each customer - Training will be done at least twice a year for sales representatives Subjects to cover are product knowledge, selling skills and customer insights by regions or types of... a great success of Casumina 1.2 MISSION Casumina commits to be a reliable companion to drivers The company is driven towards high international standard of quality but affordable price to Vietnamese customers And more importantly, the company strives for the top Vietnamese brand in terms of awareness and quality perception 4 1.3 CORPORATE GOALS In the coming years, Casumina aims to achieve the following... strategies 17 CHAPTER 3 MARKETING STRATEGIES FOR AUTOMOBILE TIRE 3.1 MARKETING AND PRODUCT OBJECTIVES In the trend of radialization, Casumina sets its strategic focus on the growth of radial tires in the next coming years; to become the first and best producer of radial tires in Vietnam Moreover, Casumina also aims at expanding its radial tire products to export markets That Casumina targets to become the most... to foreign investors in tire industry is assessed achievable for the two main reasons: - Casumina has strongest distribution arm in Vietnam - Almost all well-known tire producers in the world are looking for their opportunities to transfer production base and technology to countries which have a plentiful source of natural rubber Last but not least, another main marketing objective of Casumina is to . performance and to succeed in competition. The Strategic Marketing Plan for Casumina 2008- 2010 focuses to promote Casumina automobile tire products in domestic market which has been forecasted. by their customers. Therefore, I have decided to work on the Strategic Marketing Plan for Casumina 2008- 2010 in the hope that I can contribute some ideas for the Management Board to improve. But today success requires more. Brand equity and long-term strategic marketing plan count a lot to sustain a company’s competitive advantage. The Strategic Marketing Plan has prepared for Casumina