Some solutions to complete the marketingmix for bravia LCD TV series of Sony Vietnam in 2012 = Một số giải pháp hoàn thiện marketing mix cho dòng sản phẩm TV LCD bravia của công ty Sony Việt Nam năm 2012

Acknowledging this fact, Sony Vietnam introduced its Bravia LCD TV series and considered this to be the strategic product line of the Company.... However, for Bravia LCD TV series to com

TABLE OF CONTENTS

bi UP -1i i ACKNOWLEGEMENT 1 cecccccesssscessneeceeneeeeeeeecssneecseneecesaeceesneecseneeeseeeeeseneeenenes i 0h v00 li

¡90990007 - iv TABLE OF CONTENTS 1.00 ceccccccccessneceesseecesneeessneeesseeceseeeesneeccssaeeessaeeeeeeneeenaaes vi TABLE OF FIGURES 2.00 ii X I0 49)9)6/98I19)1553 1

1 Reasons to Choose this tOpic .ccccccccccccsessssssssssncceeeeeecceeeeseseeesssnaeeeeeeeeeeseeeeeeees 1

2 Objectives Of the Sfudy - << -cc c1 1100101111111 1 11111111000 56kg 1

3 SubJecfs and Scope of the S†udy 000 11111111111 1 1022331311111 k4 2

4 Methods of study and process Of afa . << <5 {555 11111 sx2 2

hi 320000060200 200i 2n 2

CHAPTER I1: LITERATURE REVIEW., Q2 QQ LH TH ng ng re 4

II 9 s22 AU8)/ (ii 0 a 4 1.1.1 The Formation and Development of Marketing - «<< << <s<2 4 1.1.2 Definitions of Marke€tIng - 1011111111111 1111111118853 x2 5 IIESN 6U v08) 00‹-i an 7 1.1.4 Role of Marketing - c5 2 2220222121111 101 111111 1111111111108 5 111 ke 8 1.2 Marketing Environment cccccccccccccsesssssssssscceeeeeeeceeeeseseeesssnsaassaeeeeeeseeeeeeees 8 1.2.1 Political and legal environmefnf - - - << << «55+ + + **£++++++sssssssseeeeeesss 9 1.2.2 Economic and Demographic environmenIf -+s+++<++++++++sssss 10 1.2.3 Cultural - SocTaÏ €iVITOTITTẨ .- G5 118311883 11111 1111 rreg II

1.2.4 Technological and Natural environmenf - «s55 ss+<ss+++++++ssssss 11 1.3 Target Market [denfIÍiCatIOT 5 2 2222222212111 1 11111111 vn ng 32 12 1.3.1 Concept Of ma: << << G5511 1333303333115959331 1111111111111 ng ng v2 12 1.3.2 Market CÏasSIÍICafIOIn - G11 ngờ 12

I x0 7n 14

In 9ð no -ỶỶ 15

IN VU 3000000 2001000 0 — -:‹-ÓỌÓỌÓỌÓÓÓỌÓỌÓ 16 1.4.3 Stapes of market DOSIfIOTITĐ: - 1101111111111 11 1111111183333 232 17

Chapter 2: ANALYSIS OF MARKETING ENVIRONMENT AND CURRENT SITUATION OF MARKETING-MIX FOR BRAVIA LCD TV SERIES OF SONY VIETNAM ooo ÕŸÕŸÃẼÃÝ3 28 2.1 General Iintroduction of Sony VIetnam << << «<< << sseeeeessesesssss 28 2.1.1 Overview of the Company .- 21010101 101111111 1 v1 1112332 28 2.1.2 ObJectives and Purposes of the Company -<ss+ssc+++++sssssss 28 2.1.3 Main products of the Cormpany << <1 eeeesseesssssss 29 2.1.4 Activities and Sale performance of Bravia LCD TV Serles 29 2.2 Target markets of Sony VIeffAIm: - 1111111111111 31 2.3 Analysis of Marketing environment of Sony Vietnam «««« «+: 32

2.3.1 Macro-enVvIfOnTRIT - - - G - c0 3000003090800 06080 81108 109 3198 1 8 1 1 cv 32

“20 000i 2600000 7 35 2.4 Analysis of product postfiloning strategy of Bravia LCD TV: Al 2.5 Analysis of current situation of Marketing-mix for Bravia LCD TV Series of

BRAVIA LCD TV SERIES OF SONY VIETNAM IN 2012 -«- 62 3.1 Development orlentations and obJectives of Sony Vietnam 62 3.1.1 Development orientations: << << c5 1111111111111 555555551111151 152 62 3.1.2 Marketing obJectives of Sony Viefnam 5+ S+++++++SSSsss2 62 3.2 Some solutions of Marketing-mix plan for Bravia LCD TV Series of Sony

3.3.3 PromotionaÏ DfÒTAIH 5 2332031111101 11111 11111111181 18885355 511 x5 78

3.3.4 Marketing Budget

CONCLUSION

LIST OF REFERENCES

LIST OF APPENDICES

TABLE OF FIGURES

FIGURE 2.1: MARKET SHARE BY PRODUCTION OF SOME TY FIRMS IN VIETNAM 30 FIGURE 2.2: MARKET SHARE BY REVENUE OF SOME TY FEIRMS IN VIETNAM 31 FIGURE 2.3: CONSUMPTION MARKETS OF SONY IN VIENTAM - nen re 32 FIGURE 2.4: CURRENT DISTRIBUTION NETWORK OF SONY VIETNAM WLo eee eeeeeeee 55 FIGURE 3.1: PROPOSED DISTRIBUTION SYSTEM IN THE FUTURE 55c S+<<css+ssres 71

INTRODUCTION

1 Reasons to choose this topic

LCD TV is a product that has captured the attention of customers in an era of continuous development of technology, repeated competition among different manufactures By developing ranges of appealing designs, LCD TV has become more attractive than other TV products, satisfying the increasing demands of the market Faced with consumer demands and integration into the global technology

revolution, such famous brand names as Samsung, Sony, Panasonic, LG, etc have

introduced exclusive lines of products besides traditional ones, for example, a Full-

HD TV_ with multi-function, super-slim, super-connection, super-fast and environmentally-friendly features

Acknowledging this fact, Sony Vietnam introduced its Bravia LCD TV series and considered this to be the strategic product line of the Company However, for Bravia LCD TV series to compete with TV products of other major

manufacturers in Vietnam market such as Samsung, LG, etc., it is necessary for the

company to have an overall vision of the marketing environment for its Bravia LCD

TV series, on the basis of which, solutions can be made to direct its Marketing

strategy and enhance business performance of this strategic product line This is also the reason why the author decide to carry out the dissertation: "Some solutions

to complete the Marketing-mix for Bravia LCD TV series of Sony Vietnam in 2012"

2 Objectives of the Study

- To conduct a comprehensive study of the theories on Marketing, Marketing mix and methods to develop Marketing mix strategy for a product;

- To research about TV market in general and LCD TV market in particular, both globally and in Vietnam;

- To analyze current situation and evaluate Marketing strategy of Bravia LCD TV series of Sony Electronics Vietnam;

- To suggest some solutions to complete the strategy of marketing mix for Bravia LCD TV series of Sony Electronics Vietnam

3 Subjects and Scope of the Study

Bravia LCD TV Series and Marketing environments (internal and external of Sony Vietnam)

4 Methods of study and process of data

- Methods of study: quantitative and qualitative study in combination

with expert method, summary, statistics, comparison method, etc

- Interview method: direct interview over 300 respondents with a questionnaire by selective sampling method to identify consumers’ opinions on factors that affect on Marketing mix strategy (product, price, place, and promotion)

- Data processing tool: SPSS 13.0 software

- Base on data collected from quantitative and qualitative study, solutions shall be suggested to complete Marketing mix strategy for Bravia LCD

TV Series of Sony Electronics Vietnam

5 Significance of the Topic:

- Help the managers to see clearly Marketing operation of Bravia LCD

TV Series of the Company, its ability to cope with internal and external influencing factors, and its competitive status compared to other rivals in the market;

- Research about consumers' knowledge about various types of TVs and assess their opinion on factors affecting on Marketing mix for Bravia LCD TV Series of the Company;

- The conclusions of the dissertation shall serve as reference materials for marketing managers to know and understand better about current situation of LCD TV market as well as the positioning of Bravia LCD Series of Sony Vietnam

In addition, strategies of product, price, place and promotion for Bravia LCD TV

Series as suggested are practical for business situation that of Bravia LCD TV Series now occupies

6 Structure of the Thesis:

In addition to the Introduction and Conclusion parts, the Thesis is consisted

of three parts:

Chapter 1: Literature review

Chapter 2: Analysis of Marketing environment and current situation of Marketing-mix for Bravia LCD TV Series of Sony Vietnam

Chapter 3: Some solutions to the Marketing-mix for Bravia LCD TV Series

of Sony Vietnam in 2012

CHAPTER 1: LITERATURE REVIEW

1.1 Overview of Marketing

1.1.1 The Formation and Development of Marketing

Marketing literally means, "doing the market" The concept of Marketing first appeared in America in the beginning of 20th century but was not widely developed and popular until after World War II, then, it spreads to Western Europe and Japan during 1950-1960 Since its first appearance and for a long time, the term

"Marketing" was limited to only commercial business It was recognized as getting the ready-made products/services to be consumed quickly in order to achieve the best efficiency At that time, it was called "traditional marketing"

During 1960 - 1970, from the most complex matters in production and consumption of goods as well as tough competition within capitalist market, the role and significance of Marketing in capitalist economic management was heightened During this period, a number of scientific research institutions, Marketing research centers, and advisory offices within enterprises were established and Marketing became the decisive factor in management and competition among capitalists The term was not limited to only sale and purchase contracts or ready- made products/services, but expanded to embrace the mass market That was the era

of modern Marketing, inclusive of every calculation regarding the objectives and strategic ideas before production, to sales and consumption, and until after-sale

Services

From 1960, Marketing started to gain acceptance in East European socialist

countries such as: Hungary, Poland, Romania, and Czechoslovakia In 11/1976, the

international conference - "Marketing Application in Foreign Trade Activities and

Socialist Nations" was held in Berlin In 1977, it was affirmed by members at this

conference that marketing activities applied not only to capitalist countries but to

socialist countries as well.

1.1.2 Definitions of Marketing

The concept of Marketing, as an activity to generate economic benefits on many aspects, has been continuously applied, developed and completed since its first appearance, in 1905 at the University of Pennsylvania (U.S.), when Mr W E Kreussi gave a series of lectures on Marketing

Marketing, in the view of economists, is the business approach that orientates production towards satisfying consumer needs Hence, it has been a decisive influence on the development of capitalist economies They assign to Marketing such names as "New business philosophy", "The secret of success in

business", etc And Marketing is considered a science, an art of business It never

ceases to be useful and has been supplemented and developed constantly; therefore, there have been a number of definitions of Marketing by various authors and

scientists:

- Definition by Hamilton College (U.S.): “Marketing is the performance

of business activities that direct the flow of goods and services to customers or

users [1]

- Definition by American Marketing Association (AMA), Board of Directors: “Marketing 1s the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”"”!

- Definition by Philip Kotler (U.S.) - President of World Marketing Association: “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit Marketing identifies unfulfilled needs and desires It defines measures and quantifies the size

of the identified market and the profit potential It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate

3 products and services.”"”|

- Definition by British Institute of Marketing (U.K.):“Marketing is the management process responsible for identifying, anticipating and _ satisfying customer requirements profitably.”"”!

- Definition by John H Crighton (Australia): “Marketing is getting the right goods and services to the right people at the right place at the right time at the right price with the right communication and promotion” I

- Definition by Peter Drucker — the American modern economists:

“Marketing is the distinguishing, the unique function of the business It encompasses the entire business It is the whole business seen from the point of view of its final result that 1s from the customer's point of view Concern and responsibility for marketing must therefore permeate all areas of the enterprise.”!”!

From above definitions, it can be seen that there are many diversified ways

of understanding about Marketing Two first definitions are suitable for traditional

marketing while other definitions are suitable for modern marketing However, each

definition is correct for its point in time only Therefore, it is not necessary to have a common definition of Marketing A single definition may limit the diversity and dynamics of marketing activities in practice

The differences between traditional and modern Marketing are shown in the following diagram:

Product Sales & Advertising

> Product concept:

It is considered that customers like to use products that have the highest quality and the best utilities Therefore, enterprises should frequently innovate their products

> Sale concept:

It is considered that customers will not buy many products of an enterprise if

it doesn't spend regular efforts on sales and promotion

> Marketing concept:

It is considered that the key to achieve objectives of an enterprise is to identify the needs of target market and satisfy customer’s needs to the maximum extent and more effectively than those of rivals

> Social Marketing concept:

It is considered that activities of an enterprise is to identify the needs, desire and preferences of target market and take measures to satisfy such customer’s needs more effectively than the rivals do and in such a manner to maintain and promote benefits for consumers and society

In my opinion, currently, most enterprises, even small-scale ones, have considered the change of Marketing concepts Therefore, to various extents, they have applied the concepts of modern Marketing to their business, trying to understand and listen to customer’s needs to modify their products for sales

However, in order to survive and develop in a sustainable and long-lasting manner, enterprises should apply social Marketing concept in their business process while considering supported activities to help maintain and promote benefits for consumers and society For example, companies may research technologies to create products that are better for users' health, make commitments regarding the use of parts, chemicals or technologies that are harmful to living environment, and carry out activities to preserve and build up a green and clean environment, etc

1.1.4 Role of Marketing

Marketing plays a very important role in business It guides and coordinates the operating activities of a company Thanks to Marketing, decisions made during the course of business are based on more scientific and reliable grounds, with companies capturing sufficient information to know how to satisfy customer needs

A product is attractive since it has useful features that are always innovated, updated or improved to satisfy diversified and changing needs of consumers

Marketing is also helpful in adapting a product to market needs It promotes research and development activities It doesn't involve any technical operations, however, producers base on its research to answer the questions such as "what to produce," "how to produce," "how many to produce," and "when to introduce to the

market"

Marketing has delivered success for many companies So, it has been praised

as "new theory of business", "theory of market take-over", "behaving etiquette in

The set of active entities and external forces of the company that affect on the control of marketing unit, establishment and maintenance of good cooperative relationships with target customers

Given the uncertain climate, Marketing can have a deep influence on

operations of a company Because the changes of current environment are rapid and unforeseeable, they may cause sudden impact and result in severe consequences Therefore, a company should monitor and anticipate every change of this environment by applying marketing research and collecting marketing information from current external environment of the company

Marketing environment consists of micro and macro-environment Micro- environment includes forces that are directly related to a company and its ability to serve the customers, including suppliers, marketing agencies, customers, competitors and direct public Macro-environment is external forces on social, much broader scale that have influences, including demography, economy, natural condition, technology, politics and culture

The Marketing environment may be analyzed under PEST model, which comprises the following factors: Political-legal, Economic, Social, Technological

and Natural factors (or environments) In order to succeed, enterprises must be able

to adapt to the changing Marketing environment while not resisting those trends '“!

1.2.1 Political and legal environment

Government, interested parties (3n some other countries), public interest

protection groups, etc are those affecting the political environment, which, in turn, cause policy makers to enact new laws and regulations impacting on consumers and enterprises These enacted laws, directly or indirectly, influence the practical implementation of marketing policies of a company, such as: anti-monopoly law, environment law, consumer protection law, etc

Enterprises pay attention to legal and political environment of not only a single country but also on global scale, such as: multilateral/bilateral agreements

between organizations, regions and nations, international treaties such as WTO

agreement, free trade area agreements, trade and investment agreements, etc

1.2.2 Economic and Demographic environment

Factors of economic environment affecting Marketing activities include income and distribution of income, price, consumption and savings-investment, debt and borrowing capacity, debt payment, and expenditure pattern

Development level and model of the economy are fundamental factors of the economic environment In developed economies, people have high incomes; wider income distribution may assure living standards for the consumers; and many people need high-quality goods and services On the contrary, in underdeveloped economies, consumption trend focuses on essential goods and low-end services However, in such economies, the needs of high-end products/services are increasing rapidly thanks to the industrialization and development of the economy In developed countries, consumers tend to spend more since they can easily borrow money But during recessions, they cut back their expenditure and reduce borrowing, which in turn cause a negative effect on the growth of needs of goods and services

In addition, population scale, structure and growth rate are having considerable influence on the marketers Population together with economic growth

is the measurement of market scale

In the demographic environment, age structure, race, education level and

others are factors to divide the market into segments of different scales and characteristics Expenditure pattern of families of two or more generations as well

as type of products/services that they choose tends to be decided on basis of people community preferences The movement of living places and among people groups will also affect the changes of needs; therefore, marketing policy should also adapt

1.2.3 Cultural - Social environment

The society where people grew up defines the basic believes, values and standards There are three aspects that should be considered in cultural - social

Values that are vulnerable to change over time and social trends are both opportunities and threats to marketing activities They can be the trends and preferences among young people about music, fashion or career ambitions, such social trends will then affect on consumers’ attitude to themselves, surrounding people and organizations

1.2.4 Technological and Natural environment

Natural environment results in changing trends of production materials, energy cost, environmental pollution level and attitude of governments toward environmental protection Technological environment is always the most important force to improve the quality of life for humans, as it becomes more effective at harnessing the natural environment’s resources

Technological trends are developing and changing at fast pace while product life cycle is shortening; therefore, Marketing-implementing tools are also changing Opportunities for innovation of products and services are unlimited, which causes prices to drop and enable consumers to access products more easily Budgets for Research and Development activities should be increased, especially for enterprises that aim to be market leaders Regulations to control technology are being tightened and tightened to protect the consumers and ensure their privacy

1.3 Target Market Identification

1.3.2 Market Classification

1.3.2.1 Reasons of market segmentation and market targeting

A market consists of buyers that are different in single or many aspects; for example, they may be different from each other by their desire, purchasing power, location, purchasing attitude and pattern No company has the capacity to satisfy the

needs of all of its potential customers In addition, there are many other rival

companies in the market so, it has to face the challenges posed by competitors Anyway, each company has strengths in certain aspects so that it can use such strengths to satisfy part of market needs

1.3.2.2 Market Segmentation

> Definition Consumers in the market are homogeneous and can be divided into segments by various manners A group of consumer can be segmented on basis of geographical factor (region, city), demographic factors (gender, age, education level), psychological factor (social class, life style), and behavioral factor (purchasing opportunity, consumption rate, benefit-oriented) The segmentation of customer base into groups to

highlight the differences of needs, characteristics, or behavior is called market

segmentation Each market is constituted of many market segments

Market segmentation is defined: “Dividing a market into instinct groups of

products or marketing mix” "*!

> Requirements of an effective market segmentation!

- It is internally homogeneous (potential customers in the same segment prefer the same product qualities)

- Itis externally heterogeneous (potential customers from different segments have basically different quality preferences)

- It responds similarly to a market stimulus

- It can be cost-effectively reached by market intervention

Segmentation basis | Segmentation criteria

Region (North, South), area (urban, rural, etc.), town,

district, commune, etc

Age, gender, family generation, family life cycle, income,

profession, education level, religion, ethnicity, etc

Psychology Attitude, motivation, social class, life style, personality

Purchasing reason, desired benefit, consumer status,

attractiveness and selecting one or more segments to enter.”

> Reasons of market positioning

Coverage of the whole market:

- Insufficient resources

- Includes of unattractive segments

- May not be able to satisfy the best needs of a customer group since trying to satisfy too many segments

- Suitable to multinational and transnational corporations

> Basis of market positioning

- Scale and development potential of the segment

- Attractiveness of the segment: large number of customers, diversified and abundant needs, changing consumption style, few competitive threats, high profit, favorable macro-environment

- Suitable to resources of the organization

1.4 Positioning

In Marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand , or organization and what adds value to the customers

Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective mind of the target market

De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market

The original work on Positioning was consumer marketing oriented, and was not as much focused on the question relative to competitive products as much as it was focused on cutting through the ambient "noise" and establishing a moment of real contact with the intended recipient In the classic example of AVIS claiming

"No.2, We Try Harder", the point was to say something so shocking (it was by the

was number one, and not to make some philosophical point about being “hungry”

for business

1.4.1 Definitions

Although there are different definitions of positioning, probably the most common is: “Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers Formulating competitive positioning for a product and a detailed marketing mix”

Also positioning is defined as the way by which the marketers create impression in the customers mind

Positioning is a concept in marketing which was first introduced by Jack Trout (“Industrial Marketing" Magazine- June/1969): "Positioning" as a game people play in today's me-too market place" in the publication Industrial Marketing, stating that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumers mind

Al Ries and Jack Trout developed this theme in their bestseller book

"Positioning - The Battle for Your Mind” They saw it as a creative exercise done with an existing product:

“Positioning starts with a product, a piece of merchandise, a service, a

company, an institution or even a person But positioning is not about what you do

to a product Positioning is what you do to the mind of the prospect That is, you position products in the mind of prospect.”''!

Also, positioning as "an organized system for finding a window in the mind

It is based on the concept that communication can only take place at the right time and under the right circumstances"'"”!

Positioning is therefore a perception that builds up in the minds of the target market It is the aggregate perception the market has of a particular company,

product or service in relation to their perceptions of the competitors in the same category It will happen whether or not a company's management is proactive, reactive or passive about the on-going process of evolving a position But a company can positively influence the perceptions through enlightened strategic actions

A company, a brand or a product must have positioning concept in order to survive in the competitive marketplace According to the book: “Marketing concepts that win!” (2011 by Martha Guidry, Live Oak Book Company): Many individuals confuse a core idea concept with a positioning concept A Core Idea Concept simply describes the product or service Its purpose is merely to determine whether the idea has any interest to the end buyer In contrast, a Positioning Concept attempts to sell the benefits of the product or service to a potential buyer The positioning concepts focus on the rational or emotional benefits that buyer will receive or feel by using the product/service A successful positioning concept must

be developed and qualified before a "positioning statement" can be created The positioning concept is shared with the target audience for feedback and

optimization; the Positioning Statement (as defined below) is the articulation of

the target audience’s qualified idea that is used to develop a creative brief for an agency to develop advertising or communications strategy

Positioning Statement “For (target customer) Who (statement of the need

or opportunity) The (product name) is a (product category) That (statement of key benefit — that is, compelling reason to buy) Unlike (primary competitive alternative )

Our product (statement of primary differentiation) 114]

- By price and quality

1.4.3 Stages of market positioning:

- Summarize brands and attributes of products (important attributes to consumers)

- Find out about consumers’ awareness of such attributes

- Analyze current status of such attributes of products compared to those of competitors and products of the organization

- Identify a unique selling proposition (USP)

Once a company has made its decision regarding market positioning, it may start preparing detailed promotion and marketing plans If a company targets premium market segment, it should implement plan that builds the appropriate perception in the minds of those customers For examples, by communicating the high quality attributes

of the products through advertising or PR activities, selecting prestigious distribution channels, considering offering discounts to stimulate the market, etc

Market positioning should also identify a company’s competitors In devising a positioning strategy, a company must understand the weaknesses of its competitors so that its own positioning can become a competitive advantages

<< ome it ~

Product Levels: The Customef Value Hierarchy

`"

~

Source: Marketing management, Philip Kohler

- The 1* level is the core benefit: the service or benefit the customer is really buying

- At the second level, the marketer must turn the core benefit into a

> Product classification

Marketers traditionally classify products on the basis of different attributes of

those products For each classification of products, there should be a suitable

Marketing-mix plan The definition and tools of Marketing presents basic product

marketing With these basic ideas in mind, we are ready to consider information on

product portfolio, product types and product categories

decisive role in determining its competitiveness in the market "|"

Product pricing is a crucial matter to a company since it directly affects revenue and profit

> Factors affecting pricing:

v Internal factors:

- Marketing objectives: survival, maximization of profit, market leader,

market share expansion, etc

- Marketing-mix plan: price is one of tools of marketing-mix that a company uses to achieve its objectives Pricing decisions must be coordinated with other decisions on products; place and promotion for marketing-mix to be unified and

- Competition: the decisive factor influencing the pricing strategy of a company is price set by its competitors and their possible response toward the pricing strategy of the company

- Other external factors include legal and political environments The economic situation may significantly impact on the effectiveness of different pricing strategies These economic factors as inflation, growth or recession, and interest rates affect the decision of price since they impact production cost of a product and consumers' attitude toward the value of that product

> Pricing methods:

v Cost-based pricing method:

G=Z+M

G: selling price of the product

Z: cost price of the product

M: marginal profit

v Purchaser-based pricing method:

To determine the price on basis of perceived value, it is necessary to consider various factors such as reputation of the product, quality of service, completion level of the product/service, and customers’ satisfaction A company deciding its pricing strategy using this method must try to increase its value in customers’ mind

in relation to competitor offerings

v Competition-based pricing method:

* Mark-to-market pricing:

In mark-to-market pricing, a company will base on prices of competitors while not less paying attention to its own demand It may set price at higher, equal, or lower level than that of its competitors Mark-to-market pricing is a very common method

Adopting this method, companies will feel that their prices are marked to and following market prices that are common in the whole industry

* Bid pricing

Competition-based pricing is also the method dominating factories bidding for contracts In this method, a company will set its price on basis of expecting how much its competitors will set their prices instead of relying on the strict relationship between cost and demand of products However, price should not be set below a

certain level, which, if it is the case, may endanger the sustainability of the

company

Pricing strategy is mostly decided by target market segments and positioning objectives of the company Pricing will affect and be influenced by decisions on products, place, and promotion Therefore, pricing decisions should be considered carefully and coordinated with other factors within Marketing-mix in developing a marketing strategy

1.5.3 Place (distribution) strategy

> Definition

“Place (distribution) involves activities related to the organization,

operation and distribution of goods and_ services from manufacturers to

strengthen the coherence of the business, reduce competition, and ensure smooth

and fast flows of goods

> Distribution channels

Type of Distribution channel

v Direct Channel: With no intermediary, the manufacturer

directly sells products to the consumers There are various ways of direct

sales: Door-to-door direct sales, at-store sales, online and telephone sales

v Channel Lv.1: There is only one sale intermediary as retail-sale agent in the market In industrial goods B2B market, this intermediary is a broker or sales representative

v Channel Lv.2: There are two intermediaries who are wholesale and retail-sale agents

v Channel Lv.3: There are three distribution intermediaries

According to the American Marketing Association (AMA): “The placement

of announcements and persuasive messages in time or space purchased in any of the mass media by business firms, non-profit organizations, government agencies, and individuals who seek to inform and/ or persuade members of a particular target

market or audience about their products, services, organizations, or ideas.”

> Components of an advertising campaign:

- Advertiser: the individual or organization that tries to sell the products or influence on customers purchasing behaviors by means of advertisements

- Advertising agent or firm: an independent and specialized firm in developing and carrying out advertising campaigns for the advertiser

- Communication media: used to communicate the advertising messages

- Advertising services: individuals or organizations that supply specialized services such as print ads, photocopy, TV Commercials, etc

> Roles and effects of advertising

Y Roles: In commercial markets, advertisements play the role of a guide, informer, and salesman to sell more products and satisfy the needs of purchasers:

- Customer-oriented consumption

Customer support

Development and promotion of product demands

Introduction to matters in relation to the products, support for sales activities

Y Effects of advertisement:

- For companies:

" Help the manufacturers to generate more demand for products,

increase sales and market share

= Provide updated information to any change of products and services

=" Help consumers save time buying products

= Encourage consumers to improve their living standards and use new products instead of old ones

A decision on advertising is made on basis of 5 "M" of advertising strategy,

which is Mission, Message, Media, Money, and Measurement

1.5.4.2 Promotion

> Definition

“Promotion is a marketing activity that distinct from direct sales,

advertisement and dissemination, which is conducted to motivate the consumers to

buy the products and enhance efficiency of agents 7120)

> Purposes of promotion:

While the range of promotion activities is diverse, it can be classified into two main categories by target customers and specific objectives, specifically:

- To motivate and promote the efforts of sales force

- To motivate intermediaries to push the sale of products to consumers for trial purpose or for ongoing consumption

1.5.4.3 Public Relation

> Definition

Public relation (PR) is a broad and diversified area involving many activities

in addition to communicating information to potential customers and factors affecting the purchase of products PR is also used to demonstrate that the behavior

of the company benefits the society in which it is operating This concept implies that the company has a clear accountability to increase social welfare

> Role of public relation

To develop and improve a positive image of the company in the opinion of related parties, to persuade related parties that the company is an ethical organization, that they should do a transaction with the company This role of PR is different from the roles of other marketing factors that it tries to establish and enhance the brand image of products by which, persuading the customers to buy the products Certainly, a positive image of the company in customers’ opinion will be very helpful at a greater level in affecting their final purchase decision-making In fact, this is clearly one of the ultimate objectives of any relation campaign

1.5.4.4 Dissemination

Dissemination is the communication activity carried out to make public aware of the positive effects of company activities by publishing news or images on newspapers, local news or television

> Role of direct sale

Direct sale allows marketers to tailor their communications to influence

individual customers (or the people around them who influence their purchase decision) It may adapt to changes of circumstances of both the sellers and

customers via the interaction between both sides, leading to effective solutions and

saving time for the customers Effectively, direct sale is a centralized marketing activity that focuses on individual customers in a target market, by building a relationship based on trust and motivating the customers to change from awareness

of situation to purchase decision Many marketers have recognized the important role of direct sales on their business It has the capability to communicate directly with capable customers and potential customers

Salespeople become the main source of information communicated to those customers that are intending to buy a product In industrial marketing, the sales force is considered a reliable information source to provide the feedbacks to the manufactures for their design or production process Even the customers may rely largely on salespeople for provision of fundamental information for their purchase decision-making

1.6 The relationships between product and other remaining factors of

Marketing-mix:

Product plays an especially important role because it must meet the needs and perceptions of the customers, if it does not deliver the expected benefits then the entire Marketing strategy would be undermined Therefore, product is the sharpest weapon of competition in the market

Factors deciding the position of a company in the market:

- Can products of that company surpass other competitive products?

- How can they surpass?

- What does that company do to persuade its customers to buy?

These questions can only be answered if a company has developed a suitable product strategy and invent a product of appropriate quality The decisive factor to the success of a company is its products Therefore, deciding the right product strategy has a crucial role to the survival and development of that company

It is only when the company is able to develop a product strategy that it attracts funding for investment, design, research and mass production If a product strategy is weak and ineffective without any target market for consumption of the products, those activities will appear too risky and easily vulnerable to failure

Once a product strategy is developed well and appropriately, other strategies

of price, place and promotion may be facilitated and implemented effectively For example, when a company introduces a new high-quality product with outstanding attributes, it may easily deliver the product into consumption channels (place/distribution strategy), increase selling price but customers still accept to buy (pricing strategy), and offer advertising and promotion campaigns that go deeply into consumers’ mind (promotion strategy)

Product strategy ensures to allow the company to carry out some fundamental objectives of a Marketing strategy:

> Profit objective:

Quality and quantity of a product; expansion or narrowing its product line, production cost and possible selling price of each type of product are factors that have relationships with each other and determine the profitability of a company

> Market power objective:

Whether or not a company may increase its turnover or expand the market share depends largely on its market penetration ability and product line expansion Whether

or not a company may attract customers relies largely on the quality of its brand, reliability of its products and reputation of the company itself in customers’ eyes

> Safety objective:

Product strategy may ensure that the company has a stable and predictable base demand in a loyal market segment thus helping reduce certain consumption level to risk of losses in business, which help to ensure the safety of the business objectives

Chapter 2: ANALYSIS OF MARKETING

ENVIRONMENT AND CURRENT SITUATION OF

MARKETING-MIX FOR BRAVIA LCD TV SERIES OF

SONY VIETNAM

2.1 General introduction of Sony Vietnam

2.1.1 Overview of the Company

Established on November 01, 1994, Sony Vietnam is a joint venture between

Viettronic Tan Binh and Sony Corporation, which specializes in assembling and trading in home electronic devices and providing products to the domestic market

The joint-venture period has been more than 10 years and Vietnamese Party contributed 30% and foreign party contributed 70% of the capital Charter capital:

US$2,000,000 and total initial investment capital: US$6,666,000, which was

increased to $16.6 million USD in November 1996 The Company has legal status, its own seal and bank account in VIETCOMBANK

2.1.2 Objectives and Purposes of the Company

- To supply the markets with a diversity of high quality products while ensuring profit margin and accumulated value for the Company

> Purposes:

- To assemble and manufacture home electronic devices of the best quality

2.1.3 Main products of the Company

Main products of the Company include: WEGA absolute flat color TV Series

(from 14" to 43"), Bravia LCD TV Series (from 15" to 40"), Radio Cassette CD

player, Hi-fi studio, Walkman CD, DVD/VCD player, computer, camcorder, digital

camera, camera, Projector, Plasma TVs and other devices Moreover, the

Company also manufactures electric parts mainly for export such as Deflection coils

2.1.4 Activities and Sale performance of Bravia LCD TV Series

> Market share by production of Sony Vietnam:

To ensure the confidentiality of data, this dissertation will only present figures of percentage of production of each manufacturer in Vietnam market but not provide details of production value

According to the data of GFK market research firm, as at the end of March

2007, Samsung Vietnam held the leading position in term of production percentage

in Vietnam (20.7%) then LG Vietnam, second position, (18.8%) and Sony Vietnam, third position, (17.4%) Followed by Panasonic, JVC, TCL, Toshiba, VTB, etc

In general, in the past years, Samsung Vietnam and LG Vietnam managed to hold on to the 1“ and 2” positions in term of production percentage in TV market of Vietnam thanks to their highly competitive prices and eye-catching designs that are attractive to medium-income consumers For Sony Vietnam, price always goes together with quality under its guideline: Product quality is the leading factor and Sony's products are the most exclusive products; therefore, selling price of its products is somewhat higher than those of Samsung's and LG's

However, looking at Figure 2.1, it can be seen that in recent years since

2009, Sony Vietnam has been trying to narrow the distance of market share compared to these two leading manufactures and by March 2010, Sony Vietnam was only 1.4% behind LG Vietnam and 3.3% behind Samsung Vietnam Therefore,

the 1“ position of TV market share by production is not an unattainable objective to Sony Vietnam

MT TYPTTYTVYLELPCPCPCCCCLRE+ETL-LECELErLCCCCPCPCCTECCPCCRs.me' SE SEELSSSPREES PELEGLEALEESHE o CD end Đ o © SEER OS RR GEC ESSE SoS ee aE EEE ESTE SHEET EERET EE S Đ 2 o 9 6 o 9 _

= 184M QW TODA DA DM RMMRMOOG SSS“ SOMOS ° 96 VIB

Nguôn : GFK VN

Figure 2.1: MARKET SHARE BY PRODUCTION OF SOME TV

MANUFACTURES IN VIETNAM

> Market share by revenue of Sony Vietnam:

In contrast to the production market share, according to the data of GFK

market research firm, as at the end of March 2007, Sony Vietnam hold the 1

position in term of revenue percentage in Vietnam (25.9%) Next manufactures in

the list were Samsung Vietnam (18.0%) and LG (16.9%) Followed by Panasonic, JVC, Toshiba, TCL and VTB, etc

Figure 2.2 demonstrates that during the period from 2007 until now, Sony Vietnam has comfortably maintained its 1“ position in term of revenue market share

in TV market of Vietnam The reason is that the company has established its guideline to position its products as high quality ones at higher price than average price of products in TV market This helped Sony Vietnam increase its revenue higher than other manufactures

30

Since the end of 2009, the distance between Sony Vietnam and other

manufactures has been increasing This, once again, indicates the leading status of Sony in TV market of Vietnam in recent years and even in the future

0.0% lL got La: i Ih Lãi: La oh Lt 11 I Le „1 L +: La: 1 La: L TCL

Ste et ye te ee et ee te OO” Ca r lợi là lợi Cá Cá la Ứ) C m2

See ee OSU awa ee POS Or aware POs ras

ate Soe Te Roe te To TOR Oe te TK OF |==——VTB

oc ofF fpoOGgcoopgo doGo GS50G0 Gp, ogofo oto oHHyE

GAO AIA AA AT MOA MDD aM RMMHMODG SS SV EOI OIIG

Nguôn:GFK VN

Figure 2.2: MARKET SHARE BY REVENUE OF SOME TV

MANUFACTURES IN VIETNAM 2.2 Target markets of Sony Vietnam:

Over 10 years of operation, until now, Sony Vietnam has established a sale network of over 250 agents and stores spreading all over provinces from Northern

to Southern regions to ensure its products to cover a broad market and facilitate for the supply of the best products and services to customers

Looking at Figure 2.3, as at March 2010, it can be seen that Ho Chi Minh

City market accounted for the largest market share, 13.01% Second place was Hanoi with a market share of 9.18% Next in the line were Northeastern provinces

(8.31%), North Middle region provinces (7.64%) and Mekong River Delta region

(7.45%)

31

GHA NOI

mi NORTH EAST

@ NORTH WEST GIREDR DELTA

Nguôn: Phòng Kinh doanh

FIGURE 2.3: CONSUMPTION MARKETS OF SONY IN VIETNAM

Among above regions, two regions that have the most number of agents: Ho Chi Minh City (with over 63 sale points) and Hanoi (with 43 sale points) They are the largest consumption markets of Sony Vietnam thanks to their economy, high population, higher living standards and higher average income compared to other provinces in the country For that reason, Sony Vietnam has considered Ho Chi Minh City and Hanoi as its key markets to develop a correct and effective Marketing strategy

2.3 Analysis of Marketing environment of Sony Vietnam

2.3.1 Macro-environment

The Macro-environment has a close relationship with business operations of every company It is crucial to identify and evaluate the opportunities of environment and its challenges to enable an organization to clarify its objectives and develop strategic plans to achieve long-term objectives

According to Mr Klaus Rohland, Director of World Bank in Vietnam,

32

though economic growth rate is maintained at a high pace and macro-economic management of Vietnam is considered more systematically than in the past, there are still many outstanding issues relating to the problems of economic environment because of frequently increased interest rate of VND and high inflation rate These factors also significantly impact on the business of the company, especially with such high-value electronic devices as Bravia LCD TV Series When VND interest rate 1s increased, saving trend will be also increased, while consumption is reduced Then, customers will only be motivated to purchase a product by advertising

activities, attractive promotional materials and incentives

In addition, high inflation will cause raw material costs to increase, resulting

in increased selling price of products This, in turn, makes selling price of LCD TV products in general and of Bravia LCD TV Series in particular less attractive to some extent

However, there are also positive factors in economic environment of Vietnam One of those is the sustainable increase of average income per capital thanks to the sustained and rapid growth rate of the economy Therefore, consumption of high-quality products will likely rise due to the increase in disposable income available for discretionary spending

> Political and Legal Environment

Political, governmental and legal environments are factors that may offer Opportunities or pose certain challenges to business For Sony Vietnam, the political and legal environment that the Company pays attention to concern the laws and regulations on environment protection, equality of employment, labor use, export/import procedures, and change of tax regulations, etc

- For laws on environment protection: Sony Vietnam always complies well with them to protect the environment since this is also one of the commitments of Sony Group in the whole world through Global Environment Management System (GEMS) Sony Vietnam has taken measures in response to four fundamental

environmental problems as follows:

+ Global warming: The company will take effort to reduce energy consumption and green house gas emissions

+ Natural resources: improve the effectiveness of natural resource use:

= Chemicals management: manage strictly the use of special chemicals

= Natural environment: protect biodiversity

By such measures and with latest inventions in the area of environment protection, Sony Vietnam will be able to reduce negative impact on the environment in consuming energy and natural resources, and ensure compliance with laws and regulations on environment protection

- For laws and regulations on equality of employment, labor use: As a subsidiary of Japanese Group, Sony Vietnam maintains the values of an organizational culture of a Japanese firm Not only complying seriously with laws and regulations on employment equality and labor use, the Company also offers high compensation and personal benefit policies to its workforce, such as: treating equally with respect; adequate and reasonable compensation scales; annual leave regime that exceeds statutory minimums; summer holiday and benefit regime, etc

- For changes related to export/import and tax rate: This is a factor of the external environment that Sony Vietnam can only control by supervising, forecasting any possible change and developing a suitable strategy for its business

to try to limit the impact of such changes as well as Marketing strategy but ultimately Sony Vietnam cannot control it

> Technological influence:

Recognizing the importance of technological influence, Sony Vietnam always researches the most advanced technologies to apply to its production

processes:

- When consumers started paying attention to environment protection, Sony tried to research modern technologies and processes to apply latest inventions of the industry to protect the environment, reduce negative impacts on environment from the use of energy and resources

- In competition process, each firm will seek for a specific technology to create unique features for its products For example, Samsung uses DNIe (Digital Natural Image Engine) as its fundamental technology to optimize image quality; the most notable technology of LG is XD Engine For Toshiba, such a technology is Meta Brain technology, etc In manufacturing Bravia LCD TV Series, Sony Vietnam adopts the most optimum technology of Bravia Engine to offer viewers images of the highest quality and reality

2.3.2 Micro-environment

> Suppliers:

Suppliers are critical external factors to the business production process of a company Accessories and parts provided to the company by suppliers’ play decisive roles on the output and product quality, reliability of production line, and timely delivery of goods to the market, etc

At Sony Vietnam, its accessories and parts for assembly of a TV are supplied from two sources:

Y Imported parts from foreign countries:

For LCD TVs, content of imported parts was nearly 100% in the past The reason to this fact was that LCD TV is a high-end product requiring highly delicate parts and technologies that were not possible to be produced in Vietnam Moreover, the production of Bravia TVs was very low while it would require a large investment of high-value production line for parts, if any Thus, domestic parts would become much more expensive than imported ones and most suppliers would not invest in machines and equipments to ensure the supply to Sony Vietnam if the