Repositioning brand image for yamaha sirius RC f1 a case study for yamaha vietnam

TRƯỜNG ĐẠI HỌC MỞ TP.HỒ CHÍ MINH HO CHI MINH OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLS SOLVAY BRUSSELS SCHOOL ECONOMICS & MANAGEMENT MMA7 HUỲNH NGUYỄN VĨNH KHOA Repositioning Brand image for Yamaha Sirius RC FI A CASE STUDY FOR YAMAHA VIETNAM MASTER PROJECT MASTER OF MARKETING AND ADVERTISING December 25, 2013 Guarantee I guarantee this is the study that I had made myself The databases and the conclusion in my study are faithful I will be responsible for this study Student Signature Huynh Nguyen Vinh Khoa Acknowledgement I would like to express my sincere attitude to the following people without those help, support and encouragement; the successful completion of project would not have been possible I want to thank Mr Nhut – my tutor guide, for helping me and clarifying my issues as when they arose I am highly indebted to all my classmates and my friends who were a part of my survey, helped me in my endeavor and spurred me to achieve something worthwhile and enduring This project is successful by all your cooperation I take no credit for this achievement but take the responsibility of any mistakes and inaccuracies Sincerely, Huynh Nguyen Vinh Khoa Abstract Doing business in emerging market gives motorbike producers many difficulties in their business To sustain and develop in increasingly competitive marketplaces, Yamaha consistently try to meet the need of customers and sell more their products Positioning the image of product in customer mind is one of the effective solution to attract customer to buy company’s products The aim of this paper is to investigate the antecedent and consequence of brand image to customer in motorbike industry in order to gain an optimal level of brand positioning for Sirius RC FI There are purposes of this study First, we explore the significance of the three constructs including: product quality, brand concept in Customer’s mind and how to send brand concept to Customer’s mind based on existing literatures In addition, their relationship would be verified through empirical data Finally, each element will be experimented in case study to understand the level of their impact on one other To achieve that goal, questionnaire survey is used to clarify the research questions The targeted interviewees are 50 current Yamaha customers who were randomly chosen in Yamaha heads and Yamaha users via motorbike forums in Vietnam In the questionnaire, customer’s perceptions about the Sirius image based on some significant characteristics including performance, design and durability are observed, how to get into Customer’s mind Quantitative data has been adopted under presentation of descriptive, bivariate and regression analysis Finally, some conclusions have been drawn: - Product quality significantly effects on customer satisfaction which also considerably and positively effect on customer loyalty Design, price and services are the important factors to influence customer’s buying intention Changing Sirius RC FI concept from “Are you stylish ?“ to “Show your style” to get more attraction from customer to Sirius RC FI The influence of the Brand image of Sirius RC FI and Yamaha services on customer satisfaction is stronger and more positive than that of customer satisfaction on customer loyalty This means that choosing right brand positioning is a better way to attract customer buying intention Table of Content I INTRODUCTION 1.1 Project Background 1.2 Overview of motorbike industry in Vietnam 1.3 Project objectives 1.4 Research questions 1.5 Structure of the thesis II LITERATURE REVIEW 2.1 Product quality 2.1.1 Definition of quality 2.1.2 Definition of perceived quality 2.1.3 Measuring product quality 2.2 Brand Concept in Customer’s mind 2.2.1 Definition of Brand concept 2.2.2 Definition of brand position III RESEARCH DESIGN & METHODOLOGY 3.1 Research design 3.1.1 Research approach 3.1.2 Conceptual framework 3.1.3 Hypothesis 3.2 Operationalization of variables 3.2.1 Product quality 3.2.2 Brand concept in Customer’s mind 3.3 Pilot survey 3.4 Sampling and Data Collection IV SITUATION ANALYSIS 4.1 PEST Environment Analysis 4.2 Yamaha Motor Vietnam Analysis 4.3 Market and Target Customer Analysis 4.4 Competition Analysis V SWOT ANALYSIS VI MARKETING OBJECTIVE VII MARKETING PLAN VIII MARKETING PLAN STRATEGY REFERENCES APPENDIX: Questionaires I Introduction 1.1 Project Background: In the contemporary world, when developed countries are becoming saturated with new investment, there is tendency of intensifying business investments into developing economies due to the great opportunity it might bring Doing business in such emerging markets (EMs) is actually challenging but promising London & Hart (2004) asserted that winning a market of four billion people in the developing world would be a tremendous success for MNEs Meanwhile, Prahalad & Hammond (2002) mentioned that most entrepreneurs and customers in EMs are poorly served by low quality-vendors Therefore, it would be promising that MNEs could win this market by offering better product quality On the other hand, investing in emerging markets raised controversial discourses among scholars De Soto (2000) argued that it is costly and complicated for entrepreneurs to enter the formal economy of the EMs It is seen that the legal systems of those markets are still unstable and need to be adjusted by time-consuming processes In short, regardless of disadvantages that EM might bring, there is still an optimistic way for MNEs to seek customers in those markets due to its abovementioned advantages Peng (2001) concluded “emerging economies are likely to become the new battleground for international business” Among many industries, motorcycle industry in emerging markets is considered as a fruitful area for investment Vietnam is classified as a Big Emerging Market that has main characteristics Firstly, the market entry is low and population is large There is a high possibility of long-term growth if motorcycle makers enter the market early Market penetration ratio, which is calculated by dividing the total country population by the number of passenger vehicles in operation However, there is high risk of failure due to many factors, such as unstable legal framework and low customer spending power Hence, investing in such markets requires a proper business strategy and marketing strategy Doing business in emerging market gives motor-bike makers many difficulties in their business In order to develop in the marketplace, they try to develop multi-types of product to meet customer’s needs The current motorcycle market in Vietnam is developing with high competition among various manufacturers which have a lot of marketing strategies to attract target customers such as Honda, SYM, Piaggo, SH, Dylan, etc Honda is believed to hold 65 percent of the market share, followed by Yamaha with 25 percent, while the remaining 10 percent belong to Suzuki, SYM and Piaggio Regarding the coverage, Honda now has 640 authorized dealers HEAD across the country, while Yamaha 540, SYM 310, Suzuki 120 and Piaggio 90 Yamaha made a lot of effort to expand the product which ensure the quality as well as reasonable price Yamaha motor Vietnam have provided a range of products which currently stands in different stage in the product life cycle (PLC) In the motorcycle with gear segment, Yamaha Sirius RC FI and Luvias GTX FI are the main strategic products of Yamaha in electronic fuel injection technology in 2013 Sirius version accounted 28% in Yamaha revenue, and also 25% in motorcycle market share in Vietnam To continue of this successful, Yamaha launched Sirius RC FI and Luvias GTX version to Vietnam market in 2013 However, Sirius RC FI with the new save energy technology and the slogan “Are you stylish? “ was failure and could not meet the sale expectation compared to previous Sirius version This put Yamaha has to make decision to repositioning Sirius RC FI image to target customers to increase sale target The aim of this paper is to investigate the appropriate way of positioning Sirius RC FI in customer’s mind and increase the recognition of customers to Yamaha services quality 1.2 Overview of motorbike industry in Vietnam: Prior to 1990s, most of motorcycles in Vietnam were imported and the market was small But this was changed due to the entering of foreign firms which had begun investing in Vietnam after 1990s Recognizing the market potential, Suzuki, Honda and Yamaha which are Japanese firms have a strong presence in the Vietnam market Vietnam market becomes a fierce competition between Japanese, Taiwanese and Chinese motorcycle manufacturers In contrast, the increasing motorcycle usage such as pollution is a price to pay Vietnam motorcycle market, the fourth largest in the world, has shown signs of saturation, with annual output having exceed demand, prompting producers in the Southeast Asian country to speed up their exports to other markets In Vietnam, motorbikes are the most popular mean of transportation which has a population of 90 million people and 37 million registered motorbike, according to the Ministry of Transport Table 1: Manufacturers of current motorbikes [Source: W&S Company Limited] Frequency Percent Total Honda Yamaha SYM Suzuki Piaggio Kawasaki Kymco Lifan Sufat Others 5,255 3,578 1,256 300 219 129 40 23 19 11 34 100% 68,1% 23,9% 5,7% 4,2% 2,5% 0.8% 0.4% 0.4% 0.2% 0.6% Table 2: Plan to purchase motorcycles within years [Matrix SA] [Source: W&S Company Limited] Total No intention Don’t know Have intention Individual Frequency Percent 6,344 100% 2,500 39.4% 882 13.9% 2,963 46.7% Family Frequency Percent 6,344 100% 1,408 22.2% 1,656 26.1% 3,280 51.7% With motorbike sales totaling 3.1 million units in 2012, Vietnam is the fourth largest motorbike market by sales, after China, India and Indonesia In recent years, Vietnam is emerged as a key manufacturing base for major motorbike manufacturers such as Honda, Yamaha, Suzuki, and Piaggio But motorbike sales in Vietnam have started to decline largely due to a slowdown in the country’s economic growth In 2011, motorbike sales were down 6.6% compared to 2010, marking the first decline since 2000, according to the Vietnam Auto, Motorcycle and Bicycle Association To survive, several motorbike manufacturers are trying to export their products to the other markets Honda Vietnam, Yamaha, SYM, Suzuki and Piaggio – the five largest motorbike manufacturers in the country were expected to raise their annual capacity to a total of 5.5 million units by the end of 2013, up from the million units in 2012 And this means these motorbike producers will have to put more focus on the international market Many producers have already started to export their products to other Asian markets The export value of transport vehicles, mostly motorcycle, produced in Vietnam rose 32.2% last year to $4.6 billion, accounting for 4% of Vietnam’s total export revenue Source: Asean Automotive Federation However, this doesn’t mean that the motorcycle manufacturers won’t focus on domestic market, the strategy they need to right now is to find a way to increase the need of customer’s motorcycle buying The country’s two largest motorbike manufacturers, Honda and Yamaha, which account for over 90 percent of the local market share, may experience another bad year in 2014 According to a source close to these firms, Yamaha sales may drop by 10 percent to 750,000 this year, while Honda expects to hit around 1.5 million to 1.9 million this year The drop in sales in Vietnam came despite a number of promotion programmes and discounts, including offers to pay registration fees According to motorbike companies, their factories in Vietnam produce million vehicles per year, but only 3-3.5 million of them are sold in the domestic market Many have plans in place to export already assembled motorbikes to foreign markets, according to Saigontimes Newspaper Sales of automatic motorbikes saw a better year, which accounted for 40% of vehicle sales during the year And even though sales on the whole were down, producers have been making long-term business plans, including developing new models Although it has been estimated that the Vietnamese market will reach a saturation point when it reaches production levels of around 4.5 million a year, companies still see potential here Motorcycle production in February 2012 was recorded as 66,400 units Compared with the 57,967 units total recorded for the same month of the previous year, this is an increase of 8,433 units or 14.5%, and production increase on the same month of the previous year for three consecutive months 2.2 Brand Concept in Customer’s mind 2.2.1 Definition of Brand concept Brand concepts are defined as unique, abstract meanings associated with brands This arises from a particular combination of attributes, benefits, and the marketing efforts used to translate these benefits into high-order concepts Although brand concepts reflect both tangible (i.e., what the brand actually does) and intangible (i.e., the way people think about the brand abstractly) aspects of the brand, over the years, both practitioners and academics have grown to realize that establishing abstract brand concepts on the basis of motivational and emotional meanings induces more favorable consumer responses than focusing on superior functional attributes This explains the increasing prevalence of abstract brand concepts imbued with human-like values, goals, and emotions through processes such as anthropomorphization (e.g., California Raisins), personification (e.g., Jolly Green Giant), or user imagery (e.g., the Mountain Dew “dudes”) For multinational companies (MNCs), one of the biggest challenges lies in carefully managing these abstract brand concepts across different cultures This implies that global brands need to convey abstract concepts that not only are consistent across borders but also resonate with consumers of different cultures Consistency in brand concepts across borders allows MNCs to lower marketing costs and more easily manage advertising and promotions across countries However, MNCs also need to localize advertising and promotion by incorporating concepts and ideas that align with local cultural value priorities The expectation is that a “cultural matching” between the abstract brand concepts and consumers’ value priorities will facilitate brand penetration in the local markets However, because considerable variation exists in value priorities across cultures, several issues arise 2.2.2 Definition of brand position It prefers to “target customer’s “reason to buy your brand in preference to others It is ensures that all brand activity has a common aim; is guided, directed and delivered by the brand’s benefits/reasons to buy; and it focusses at all points of contact with the consumer So, to brand positioning, you should make sure that answer all those questions below:        Is it unique/distinctive vs competitors? Is it significant and encouraging to the niche market? Is it appropriate to all major geographic markets and businesses? Is the proposition validated with unique, appropriate and original products? Is it sustainable – can it be delivered constantly across all points of contact with the customer? Is it helpful for organization to achieve its financial goals? Is it able to support and boost up the organization? 16 III RESEACH DESIGN & METHODOLOGY 3.1 Research design 3.1.1 Research approach Deductive research is employed for this research because it is based on comparing relevant existing literature review with empirical observation, therefore we could draw logical conclusions from findings (Collis and Hussey, 2009) This is testing hypothesis, which is also adopted in this study According to Saunders et al (2003), the best approach to use for a study depends on the purpose of the study and the research questions Both methods refer to the way researcher chooses to treat and analyses the data In qualitative research, the aim is to get better understanding of the subject being studied, hence conducted by gaining large amount of data from different research documents Whereas quantitative method is more structured, reliable and objective since it uses number to transform into information so that we could easily gather, collect and statistically analyzed data This study adopted quantitative method by means of appropriate techniques including structured questionnaires, statistical analysis 3.1.2 Conceptual framework According to the two aforementioned hypothesizes, a research framework was developed to explore the impact of product quality on customer satisfaction The result should be able to verify if high level of quality can lead to high level of customer satisfaction and subsequently resulting in enhancing customer loyalty Furthermore, the level of quality can illustrate the brand image to customer’s mind The conceptual framework of this paper is described below Each cell indicates the construct and arrows present casual relation between two different constructs 3.1.3 Hypothesis Based on the literature review presented in earlier chapter, there are two hypotheses in this research They are listed below as: - Hypothesis 1: Product quality has a positive influence on customer satisfaction 17 - Hypothesis 2: Customer satisfaction has a positive influence on customer loyalty - Hypothesis 3: Brand image gives better recognition about product knowledge and product involvement Then, this lead to purchase intention of customers 3.2 Operationalization of variables The following section describe the operationalization of variables based on the constructs’ definition used in related literature Upon hypothesis’s, there are different quantifiable variables which are product quality, customer satisfaction and customer loyalty, brand image recognition The author would base on related literature to adopt items for measuring each variable All variables would be measured by coding it in a seven-point Likert-scale ranging from to point, equivalent from “extremely agree” to “extremely disagree” in each of question to define the degree of agreement form interviewee 3.2.1 Product quality The logic of designing this questionnaire is to begin with choosing dimensions first, then choosing items and finally wording it in a meaningful way The dimension of product quality in this research is primarily based on Brucks, Zeithaml and Naylor (2000) which includes main six dimensions equivalent to more than ten items for each However, we cannot cover all these dimensions in the questionnaire due to its limited length Therefore, the most influential one affecting to overall quality were chosen., thus three dimensions to be selected are performance, durability and design  Cubic centimeters  Chain size  Micron  Oil capacity  PSI (pounds per square inch)  Tire size 3.2.2 Brand concept in Customer’s mind 3.3 Pilot survey In order to measure the reliability and validity, the questionnaire needs to be pretested through a pilot study with a non-probability sampling – judgement sampling This survey is conducted by inviting five respondents including three current customers and two company staffs who have good knowledge about the product and its customer This pilot carried out under personal interviews After receiving comments from respondents, the author have revised and developed the questionnaire to increase the accuracy of the survey Some overlap questions were removed; others were added and edited to increase the validity of the final result 3.4 Sampling and Data Collection Population is the universe of units which consist of all the characteristics that the researcher requires It is impossible to investigating all the population if it is too large Hence, to save the 18 expense, time and inconvenience, sampling is essential for researcher by reducing the number to a manageable size to select a representative sample (Collis & Roger Hussey, 1997) There are two types of sampling: probability and non-probability While with probability, every unit has a known chance of being selected from the population by using a random selection, nonprobability allows some units has more chance to be selected than others For this study, population is all current customers of investigated motorbike models with all types of age, gender, place of living, occupation and so on Hence, it is necessary to select sample from the population based on these standards, which means non-probability should be adopted as some units are more likely to be targeted Quota sampling, one of types in non-probability sampling, is a technique in which participants are selected according to pre-specified quotas that are thought to have major impacts on findings of the study Hence, quota of different types of people to question is given to interviewers (Shiu, Hair, Bush and Ortinau, 2009) IV SITUATION ANALYSIST 4.1 PEST Environment Analysis Not known for modern conveniences, Vietnam has a very inconvenient transportation system, Motorcycles are currently playing a big role in road transportation in the Vietnamese society Motorcycle is used as a personal mean of transport due to its convenience and mobility as the public transport is still underdeveloped, affordability as the Vietnamese’s current living standard is still low to afford automobile and suitability with the current condition of road transportation in the country 4.2 Yamaha Motor Vietnam Analysis Yamaha Motor Vietnam Co., Ltd is a joint venture of Yamaha Motor (Japan), Hong Leong Industries Berhad (Malaysia), Vietnam Forest Corporation and Co Do Mechanical Factory (Vietnam), was founded in 1998 to focus in manufacturing of motorcycles and accessories In 2007, Yamaha with strong market demand coupled with aggressive service campaigns and brand promotions, had managed to expand unit sales by 42.7 percent to 500,000 units With regard to production capacities, Yamaha planned to expand total production capacity in the five ASEAN countries (Thailand, Vietnam, Malaysia, Philippines and Indonesia) to 4.7 million units during the period of 2008 to 2010.Yamaha, the second largest motorcycle manufacturers in Vietnam after Honda Vietnam had planned to built capacity to 700,000 units annually with the operation of its second plant by 2010 (Yamaha Motor Co., Ltd Annual Report) In 2013, Yamaha has launched two new products as Sirius RC FI and Luvias GTX FI The concept for Sirius RC FI is “Are you stylish?”, but this concept actually was not accepted by the customer because of its design not as well as the old version of Sirius RC 4.3 Market and Target Customer Analysis Sirius RC FI target customer is: 19 Figure 3: Customer Profile [ Source Yamaha ] As you can see the figure above, on the left is the Sirius RC FI target customer when its first launching in the beginning of 2013, and it was not successful On the right, this is my repositioning target customer for Sirius RC FI with a little change: Target customer should be:           Male, age from 20 – 35 60% single Living area: town, 2nd city, mountain Occupation: farmer/Freelancer/Worker/Officer Hobbies: Internet & Social network, sport, hang-out & Travel, like watching TV, etc Characteristic: Young & dynamic Economic Family oriented Usage: go to work, travel/shopping/ family usage Customer benefits: fuel consumption/Economic, strong & powerful engine, convenience storage (helmet )  20 4.4 Competition Analysis 21 As you can see on two mind map segment above, the two main competitors of Sirius RC FI are Wave RSX and Sirius RC (old version) The current concept of Sirius RC FI now is “Are you stylist?” compared to “Reach your top” of Honda Wave RSX and “Street performer” of Sirius RC is not strong enough Although Yamaha indicated that Sirius RC FI inherited the design concept from Sirius RC, but in actually Sirius RC FI design is not really strong, it looks like Taurus - the lower level product of Yamaha This means Yamaha want to position Sirius FI in the higher level, however their design does not meet that requirement Compare to its rival product, Honda Wave RSX: Honda Wave RSX Sirius RC FI Stregth Wide trunk, long body, well design, stable when operation, powerful light, multi-color Wide trunk, Fuel injection technology, reasonable price, strong engine system 22 Weakness Expensive price, engine system not strong compared to Sirius RC or RC FI Design not well, noise when starting engine, when driving at high speed will have the feeling that your motorbike is flying Services comparison between Yamaha and Honda, this is based on the interview with random customer using Honda or Yamaha services    Honda Have a lot of Head in many cities Price for spare elements is higher Services to customer is good    Yamaha Have fewer Head compared to Honda Price for spare elements or repair is cheaper Services also good enough V SWOT ANAYLYSIS VI MARKETING PLAN   Increase sales for a younger demographic Create a different way to express the younger way of living  VII MARKETING PLAN STRATEGY Marketing to young males in the rural 23  o Young, dynamic o Lower income o Interest in product o Want to show the way of living Differentiate Yamaha motorbike Sirius RC FI from Honda Wave RSX and Sirius RC by stressing rural background of target customer and connecting their branch of service with Yamaha motorcycles In brief, the brand image I want to position Yamaha Sirius RC FI is: From the way of showing your individual stylist To the way you express your stylist to your family, your friends and your life 24 Appendices Dear Madam/Sir, This questionnaire is designed to measure customer recognition about Yamaha product quality and its product’s concept in Vietnam Your response will be used as material for a master thesis, thus will be kept strictly confidential and for academic purpose only This questionnaire should only take 5- 10 minutes to complete Many thanks for your cooperation Sincerely Part yours, 1: Personal My Vu information What is your gender? Male University of Westminster London UK Into which age group you fall? Female Age 25 - 35 Age 45 - 54 Age 35 - 44 More than 55 Are you? Driver Owner Both Is your motorbike? State - owned Privately - owned Leased 25 Which is the brand name of your motorbike? (Please write it down) If you own the motorbike, is it the first time you have had bought or is it an additional one? 1st time Additional What was your reason for buying the motorbike? Please place in order in following reasons ( is the most important and is least important) Brand name Design Price Suitable for business What is your occupation? Businessman/Self-employed Chairman/Director/CEO/MD General Manager/ Manager Assistant Manager/ Senior/ Executive Professional Secretary/ Clerical/ Technician Government Servant Freelance Where are you living? Hanoi HCM Other, please specify: Rebuilding brand image for Yamaha Sirius FI | Huỳnh Nguyễn Vĩnh Khoa Page of Part 2: Perception of Product quality (Direction: The following set of statements relate to you’re feeling about the product For each statement, please show the extent to which you believe product has feature described by the statement Circling means you strongly agree that the product has the feature, and circling means that you strongly disagree What you think about Strongly disagree disagree the description below? Largely A little bit disagree Neutr al A little bit agree Strong Largely ly agree agree Performance Overall, this motorbike operates smoothly 7 7 7 This motorbike accelerates well both in city and highway This motorbike stopped smoothly when I applied the brakes Engine size is acceptable This motorbike consumes fuel very economically This motorbike doesn’t make much noise when running Rebuilding brand image for Yamaha Sirius FI | Huỳnh Nguyễn Vĩnh Khoa Page of I found the front light 7 7 7 of this motorbike operates effectively Design Overall, I am satisfied with the design of this motorbike I love the color of this motorbike I love the design of this motorbike’s elements Durability I think the length of this motorbike warranty is reasonable I am satisfied with the design of this motorbike Please place in order the following factors that you think it is the most influential when assessing the motorbike quality? (1 point: the most important, point: the least important) Performance Design Durability Part 2: Rating customer satisfaction Rebuilding brand image for Yamaha Sirius FI | Huỳnh Nguyễn Vĩnh Khoa Page of Strongly What you think about Largely disatisfie disatisfie the description below? Strong A little bit Neut disatisfie ral A little bit satisfied satisfie d d d 7 7 d satisfied ly Largely Overall I am satisfied with the motorbike quality I am happy with the motorbike’s performance I am happy with the motorbike’s design I am happy with the motorbike’s durability Part 3: Rating customer loyalty Strong What you think about the Strongly Largely A little bit Neut disagree disagree description below? A little Largely ly agree disagree ral bit agree agree This brand is my first choice when I am in 7 need I will recommend this brand to friends or relatives who seek my advice I will still use this brand even though the price is Rebuilding brand image for Yamaha Sirius FI | Huỳnh Nguyễn Vĩnh Khoa Page of higher compared with other competitors Thank you very much for your time and effort to complete this questionnaire Rebuilding brand image for Yamaha Sirius FI | Huỳnh Nguyễn Vĩnh Khoa Page of ... Vietnam Analysis Yamaha Motor Vietnam Co., Ltd is a joint venture of Yamaha Motor (Japan), Hong Leong Industries Berhad (Malaysia), Vietnam Forest Corporation and Co Do Mechanical Factory (Vietnam) ,... compared to Yamaha, but Yamaha sales is stable than Honda, this lead to the potential for Yamaha to develop 10 Figure 2: North sales result of Yamaha 2013 The figure show that Sirius RC FI account... the market potential, Suzuki, Honda and Yamaha which are Japanese firms have a strong presence in the Vietnam market Vietnam market becomes a fierce competition between Japanese, Taiwanese and