Marketing plan for LG laptop in vietnam market

TRƯỜNG ĐẠI HỌC MỞ TP HCM HO CHIMINHCITYOPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAYBRUSSELSSCHOOL MBMM5 TRƯƠNG NGỌC NHÃ ĐOAN MARKETING PLAN FOR LG LAPTOP IN VIETNAM MARKET MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s Name: Dr LÊ THÀNH LONG Ho Chi Minh City (2012) Commitment: This is the marketing plan I have created myself base on the knowledge I gained from many interesting subjects during the Master In Business & Marketing Management course year 2010 -2012 of Solvay Brussels School and the Ho Chi Minh City Open University I commit that this project is completed with my high honesty I’ll fully take responsibility for any mistakes or incorrect information given in this project Acknowledgements: Firstly, I would like to send my great thanks to all professors of Solvay Brussels School and the Ho Chi Minh City Open University for the useful marketing knowledge in the Master In Business & Marketing Management course year 2010 -2012 Secondly, I would like to send many thanks to my tutor – Dr Le Thanh Long who has help me a lot in giving guidance, advices and comments on how to build up an effective marketing plan I also want to say thank you to my mentor – Mr Ho Quang Hai who teach me a lot about IT market which help me to deeply understand the company’s business and also give me a lot of the useful data to set up this marketing plan Finally, I want to send my special thanks to my family and also my friends who have heartily supported me to successfully complete this project Table of Contents Executive Summary: Part 1: INTRODUCTION: 1.1 LG Electronics: 1.2 LG laptop: 1.3 Vision and Objective of the project: 1.4 Scope and Limitation of Project: 1.5 Methodology: Part 2: SITUATIONAL ANALYSIS 2.1 Environment analysis (PESTEL) 2.1.1 Political: 2.1.2 Economic: 2.1.3 Social: 2.1.4 Technological: 2.1.5 Environment: 2.1.6 Legal & laws: 2.2 IT market analysis: 10 2.2.1 Market overview: 10 2.2.2 Market attractiveness: 12 2.2.3 Market trend and market demand: 15 2.3 Competitors’ analysis: 17 2.4 Company analysis: 21 2.4.1 Value Map: 21 2.4.2 Performance in IT market: 21 2.4.3 SWOT analysis: 22 Part 3: MARKETING STRATEGY 24 3.1 Segmentation: 25 3.2 Targeting: 26 3.3 Positioning: 26 Part 4: MARKETING TACTICS (4Ps) 27 4.1 Product: 27 4.1.1 Product strategy: 27 4.1.2 Product road map (PRM) for Vietnam market: 28 4.2 Price: 29 4.3 Place: 30 4.4 Promotion: 33 4.4.1 Above the line (ATL) 33 4.4.2 Below the line (BTL) 36 Part 5: ACTION PLAN AND BUDGET PLAN 39 5.1 Action plan for period August ~December 2012 39 5.2 Budget plan: 40 5.3 Detailed action plan with budget: 41 Conclusion: 42 REFERENCES: a APPENDIX: b APPENDIX1: Samsung ATL & BTL image b APPENDIX 2: Product USPs and specification: c APPENDIX 3: MOT report form h APPENDIX 4: Information about HDD’s shortage i Abbreviations: ATL Above the line BA Brand awareness BTL Below the line CE Consumer Electronics CPI The consumer price index FSM Floor salesman GFK, IDC Name of market research company HDD Hard Disk Drive HQ Head Quarter IT Information technology ITP team Information technology product team of LGEVN LGEVN LG Electronics Vietnam M.VND Million Vietnam Dong M/S Market share MD Master dealer MKT Marketing MOT Moment of Truth PC Product consultant PESTEL Political, Economic, Social, Technological, Environmental, Legal & laws POSM/POP Point of sale material/ Point of purchase PRM Product road map Q1/2/3/4 Quarter 1/2/3/4 SS Samsung SWOT Strengths, Weaknesses, Opportunities, Threats TR Telecom Retailer USP Unique selling point VN Vietnam country/ Vietnam market Figures and Tables: Figure 1.1 : LGEVN organization chart Figure 2.1 : Vietnam – GDP Year-On-Year Growth Figure 2.2 : GDP Growth – Vietnam versus ASEAN countries Figure 2.3 : Vietnam – Inflation Rate Evolution Figure 2.4 : Vietnam – Consumer Confidence Figure 2.5 : Total laptop market size from Q1/2009~Q3/2011 Figure 2.6 : Laptop market share between brands Figure 2.7 : Laptop market channels Figure 2.8 : Growth rate of IT market from Jan ~ Nov’11 Figure 2.9 : Porter’s forces Model Figure 2.10 : Laptop market - competitor analysis Figure 2.11 : Budget for media of biggest Electronics brands (2008~2011) Figure 2.12 : Value map of LG Figure 2.13 : Top of mind Survey for LG Figure 4.1 : LG distribution system for IT product Figure 4.2 : Portion in Acer’s distribution systems (2nd haft of 2011) Figure 4.3 : LG’s standard POSM Figure 5.1 : LG laptop action plan for Aug~Dec’12 Figure 5.2 : LG MKT expenses vs Sale revenue 2009~2011 Table 2.1 : Banking Interest Rate during 2011 Table 2.2 : Internet Usage and Population Statistics Table 4.1 : LG incentive scheme Table 5.1 : LGEVN’s laptop budget (2012~2014) -1- Executive Summary: Vietnam IT market in year 2011, the demand for desktop decreases 25% in quantity base and 30% in value base, in contrast, the demand for laptop increases up to 31% in quantity base and 24% in value base (Source: GFK data Nov 2011) Portion between desktop and laptop in recent years are as below: Year 2010: desktop: laptop – 65%: 35% Year 2011: desktop: laptop – 56%: 44% Year 2012: desktop: laptop – 50%: 50% (forecast) Year 2013: desktop: laptop – 60% (forecast) Thanks to the technology innovation, the production costs of laptop are reduced a lot day by day so there is just a small gap between price of laptop and desktop Due to the convenience, mobile function, small size laptop gets more and more familiar with end-users and become their choice more often According to key research companies like GFK, IDC, Display Search, the growth of laptop in 2011 in Vietnam market is really outstanding, it has exceeded all the previous expectation And they forecast that laptop will replace desktop some day in the future and the ultrabook (super thin laptop – as Intel’s definition) will be the king of the IT market in late 2012, 2013 Demand for ultrabook will take more than 50% of the total laptop market by 2014 Many big guys such as Apple, Dell, Sony, Asus, Acer, and Samsung…have already developed their new ultrabook From 2007 up to now, LG Electronics Vietnam is quite successful in Desktop segment with the product Monitor, market share 28%, position No.2 after Samsung 35% (source: GFK data Nov’11) These two Korean brands have gone together in Monitor market for more than years to defeat many big monitor guys such as View Sonic, HP, Dell to keep the first and the second position Samsung has already launched laptop in early time of 2010 and get some success with -2- awareness up to 90%, market share 7% compare with many big guys such as Dell, HP, Sony, Lenovo, Acer…LG still not have any plan to launch laptop in VN Even though LG laptop still has a very low awareness among LG products like TV, washing machine, refrigerator, air conditioner…There are a small part of endusers now using LG laptop which is bought directly from aboard or be sold in the market by unofficial importers/ smugglers without after sale service Now external factors show that laptop is really a potential product with high demand in Vietnam market So it’s time to invest and officially launch laptop in VN But LGEVN still have many problems need to be solved such as: - Lack of support from Head Quarter (HQ) in Korea about strategy, product road map, budget, guideline, unable to utilize the economics of scale from LG Global network - Not confident enough to compete in such a tough market with many big competitors, facing with newcomer’s difficulties: no support from IT platform manufacturers (Hardware: Intel, AMD…; Software: Microsoft, Google) and OEM vendors (Compal, Foxcon & WISTRON…) - Not deeply understand the end-users, no experiences in laptop field in Vietnam market So through this final project, by analyzing the market, environment, competitors, company situation, I want to point out the reasons why LGEVN should launch laptop and I also propose a full MKT plan to successfully launch LG laptop in Vietnam market -3- Part 1: INTRODUCTION: 1.1 LG Electronics: - LG Electronics global: LG was established in 1947 as Korea's first chemical company then becoming the nation's first electronics company with its expansion into home appliances in 1958 The new Corporate Identity was launched including the change of the group name from Lucky-Gold Star to LG in 1995 With an over 65-year history, LG Electronics, is a global leader and technology innovator in consumer electronics, employing more than 93,000 people working in 120 operations around the world With annual worldwide revenues exceeding $49 billion, LG Electronics comprises five business units: Home Entertainment (HE), Home Appliance (HA), Air Conditioning (AC), Information Technology (IT) and Mobile Communications (MC) - LG Electronics Vietnam: LG Electronics Vietnam (LGEVN) is one of the members of LG Electronics Global which was established in 1995 with 850 employees working in subsidiaries (Hanoi, Ho Chi Minh City, Can Tho, Nha Trang, Da Nang) and 02 factories (Hai Phong, Hung Yen) With annual revenue exceeds $350 million USD + Vision: Become TOP Electronics companies in Vietnam + Objective:Achieve revenue 400 million USD in 2012 and Lead in Premium Segment for almost product (HA, HE, AC, IT, MC) + Mission: bring value to customer, share holder & people 1.2 LG laptop: LG laptop was firstly launched in Korea in year 2000 under the name Xnote LG laptop is in Top 12 laptop brands all over the world It’s quite popular in Euro market with 5~7% market share (depend on countries) In Asia, it already presented at many countries like Australia, India, Thailand, Singapore LG has developed full model line-up for laptop, from entry to premium (ultra book, 3D) Currently, in Vietnam, LG laptop was presented and sold at some small IT shops or online website by some importing/smuggler guys It’s time to officially launch it - 37 - USPs and key message each model want to bring to them This is the cheapest but the most effective way to communicate with end-users in shops Figure 4.3: LG’s standard POSM (Source: LG internal data) - Activation/ small event: Together with the display and POSM, LG should organize some small event at shop such as “Let’s discovery”, “3D Experience”…to let end-users trial the product - Product consultant (PC)/promoter girl (PG)/ Floor salesman (FSM): To introduce and sell out the product to end-users, all most the companies use the direct FSM of shops or in case they have enough budgets, they will set up for themselves a PC team FSM and PC play an important role in pushing sell out At the first time of launching, LG laptop team will select top 20 shops in nationwide then recruit 40 PC to work shifts there These PC will not only introduce, consult and sell the product but also take care of display corner and collect market information to report to LG daily In order to encourage them to work long term with LG, laptop team will set an incentive policy 10% higher than main competitor, apply the premium incentive for whom can sell out the ultrabook or 3D laptop, continuously train PC about product knowledge, working attitude and other soft skills - MOT (moment of truth) activities: Keep the display status in shops in the best condition is very important LG think shop is LG home That the reason why LG set up a DTC (daily take care) team - 38 - daily visit shop to supply POSM, evaluate PC’s behavior and take picture, get information to make the report This MOT report is used to cross check what PC report is correct or not and also for LG to quickly change/fix problem happen in shops (MOT report form attached in appendix) Promotion: Sales promotion can be used as a tool to stimulate demand in the maturity of the product life cycle LG launch laptop at Back to school season This is the good time to run promotion to boom up the sale After that, year end and TET season are also good time to run promotion Discount direct on price, shopping voucher and free gift relating to laptop such as cleaning package, bad, backpack, mouse… are the most preferable one At the first time of launching LG must promotion them self but later on, LG can call for the support from Intel or Microsoft Dealer relationship management: This is not only the job of sales team but also MKT team We can take care the dealers by organize dealer meeting, dealer convention or dealer trip with MKT budget and we can also set up a special caring program for key dealers (KAM key account management) After sale service (ASS): MKT should also take care of the ASS because it affects directly on the brand image There is just a small gap in technology between brands so what are the additional non-tangible benefits can you offer to your customers? The most considering now is after sale service A satisfied customer buys more and stays loyal to brand for longer periods, speaks positively about product/services It is easier to promote new products to a satisfied customer and it is also cheaper to service a regular customer than to recruit a new one Good after-sales service is an element that could distinguish LG from the rest - LG should invest to increase warranty time up to years (compare with - 39 - years of all most brands) for RAM, HDD which is cost 1~1.5% sale revenue After sell out increase, the % of cost will be downed due to quantity - LG should create a LG Service Card Customers will use it when need to check/ fix laptop This card also offer other added value for the owner such as: buy other LG product with discount price, join LG online/offline club, special price for some product from LG partners (cosmetic, food, travel…) - LG’s ASS must be on all time 24/7, simple, fast, flexible to satisfy customers Beside the 4Ps product, price, place, promotion, we also have another 3Ps: people, process, physical People: LG has just set up a new sales team with people in charge of MDsfor laptop and also recruit one more marketer together with current ITP team to make laptop present on the market as plan It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands Process: Keep the current process of others products but more flexible & fast Physical: When a service goes out to the customer, it is essential that you help him see what he is buying or not For example- brochures, demo This one is mentioned clearly in promotion part This is the 360 MKT activities plan that support LG to launch laptop in VN market, increase the brand awareness and starting sell out the product to end-users Part 5: ACTION PLAN AND BUDGET PLAN 5.1 Action plan for period August ~December 2012 Summary all above MKT activities in an action plan table help us to see an overview picture of what we should focus on and what steps we need to take to achieve particular goals over a given period of time The below action plan is just for the 1st period: launching time from Aug to Dec of 2012 The action plan for next period 2013 & 2014 will be set and adjusted base on practical situation - 40 - Figure 5.1: LG laptop action plan for Aug~Dec’12 5.2 Budget plan: 15.0% 10.0% 5.0% 6.2% 2.6% 2.5% 0.9% 0.9% 5.9% 3.2% 4.8% 3.4% 4.6% 1.9% 2009 0.7% 0.0% 2010 2011 Figure 5.2: LG MKT expenses vs Sale revenue 2009~2011 (Source: LG budget planning -BP- department) Take a view to LG MKT budget vs the sale revenue in last years, we recognize that LG can use maximum 6.2% of the sale revenue for MKT activities As mention in previous part, laptop needs to increase the brand awareness as much as can in - 41 - the short time so total MKT budget for it is 10% of sale revenue in the st year LG sales target in 2012 (August to December) is 10k then 60K in 2013 and will be 120K by the end of 2014 So we have the budget table as below: Year Sale quantity Average price Sale amount A&P ratio Suport from HQ Total budget 2012 10,000 500 5,000,000 10% 500,000 1,000,000 2013 60,000 450 27,000,000 5% 2014 120,000 400 48,000,000 3% 1,440,000 1,350,000 Table 5.1: LGEVN’s laptop budget (2012~2014) 5.3 Detailed action plan with budget: This detailed action plan show up all the activities with clear budget using, ratio between ATL, BTL Base on this, we can evaluate the ROI of each activity and withdraw the experiences for the next time No MEDIA TVC Print OOH DETAIL ATL Cinema theather Megastar, Galaxy Online PR Exhibition Other Activation/ event Shop décor PC/ FSM POSM Promotion Dealer care 60 office elevators key IT Magazine (PC world) Mass newspaper( Thanh Niên, Tuổi Trẻ) Signboard at key 10 key IT shops Online ads Game Micro-sites Forum seeding Social community Pre-launch Launch Post launch VCEW/ Fecit/ Ecit other BTL launching event at shops 3D experience Discovery laptop show private Conner, showcase Training Caring program new POSM Back to school Year end Meeting KAM Abroad trip Total Expense (kUSD) RATIO 600 60 60% 6% 60 15 60 40 6% 160 Timeline Jul 79 8% Aug 174 Sep 127 20 20 12 20 12 20 10 15 15 3 4% 16% 40 150 15% 50 400 5% 1% 40% 60 6% 15 15 10 100 6% Nov 62 12 12 10 10 3 15 3 Dec 91 30 70 25 100 70 12 20 10 15 20 10 30 10 10 10 10 writings/ test lab Press party offline club, sponsor, WOM 10 60 70 at 20 key shops 10 10 15 10 10 4% 20 40 10% monthly launching time/ promotion time one month after launching time Facebook/ google 3 20 4% Remarks 20 70 20 60 20 20 40 Oct 67 10 10 10 10 30 30 35 100 1,000 10% 100% 20 149 274 20 197 97 25 122 Korea tour for top 20 dealers 161 Table 5.2: LG laptop - detailed action plan with budget (Aug~Dec’12) - 42 - Conclusion: During 17 years with great effort, LG Electronics Vietnam becomes a familiar brand name, a beloved company with many Vietnam people LGEVN is still on the way of developing itself to become market leader by expanding its product line and offering more added value to its customers Come along with this strategy, LGEVN decide to launch new product – LG laptop- in Vietnam market in late of 2012 The purpose of this project is proposing a marketing plan for bringing LG laptop to Vietnam market base on deep analysis of all internal and external factors by using secondary data from LG internal sources, professional market research companies, media agencies combine with visiting the real shops and discussing with experts in laptop field Having a right strategy at the first time is very important LGEVN define for itself a strategy with two separate periods First period is launching time (from August to December of 2012), LG needs to increase brand awareness to mass customers, mainly by ATL activities then in the second period (from 2013 and later on) increase brand preference and sale volume, focus more on Below the line (BTL) activities with the target customers are young, concern much about the design following by technology and price Communication message will be “Smart Computing and Stylish Design” The main contents of the full strategic marketing plan can be summarized as: LG laptop is in opportunistic development time so it must invest selectively in share, not try to get share by cutting down the price or launching low-end models which not good for the total brand image Instead of that, differentiate itself by product’s line extension, enhance after sale service, set competitive price compare with main competitor, run aggressive marketing activities (esp PR, digital MKT & instore communication), also invest on production, R&D, personnel, working capital, distribution system…In every case, make sure that the strategy is consistent across the board, and compliant with the company’s mission and vision By doing so, LG will achieve its goal and become a familiar brand name in laptop field -a- REFERENCES: - William Cohen, The Marketing plan, 2nd Edition - Philip Kotler – Gary Armstrong – John Saunders – Veronica Wong, Principle of Marketing, Third European Edition, Pearson Prentice Hall - Malcolm McDonald , Marketing plans: How to prepare them – How to use them, Fifth edition – Elsevier - Michael Porter, The Five competitive Forces that shape strategy, Harvard Business review, Jan 2008 - GFK - November 2011- PPC Quarterly Report - GFK – November 2011- Market Information report - Internet Usage Stats and Marketing Report 2010, www.internetworldstats.com - LGEVN – Second Haft 2011- Vietnam BCR Report - LG website: www.lge.com/vn - TNS media/ TKL – Jan to Nov 2011 - Vietnam Economic Times, 2009 estimate by Vietnam Government; General Statistics Office of Vietnam - World Bank Report June 2011 -b- APPENDIX: APPENDIX1: Samsung ATL & BTL image (part 2.3 – Competitor Analysis) -c- APPENDIX 2: Product USPs and specification: Companion (Z series): super ultrabook Z330 Specifications Display : Weight : Size : OS : CPU : Memory Graphics Audio SSD Battery Network Ports Color : : : : : : : : 13.3-inch, HD LED Back-light LCD, 1366×768 px 1.2kg 315 x 215 mm Windows Home Premium Intel Core i7 2637M Processor, CPU Clock 1.7 GHz, Up to 2.8 GHz Turbo Boost, 4MB Cache Memory 4GB DDR3 1333 (4GB x 1) Intel HD Graphics 3000 SRS Sound Solutions, HD Audio, Stereo Speakers 256GB SATA 6Gbps Flatbed Li-Po Intel 802.11bgn/WIDI/LAN HP Out, USB 3.0& 2.0, Internal Mic, HDMI, Mini RJ45 Spin hair-line silver -d- Gaming (A series – 3D without glass): A520 Key Features          New Dimension in 3D Entertainment 2nd Generation Processor Stylish Metallic Look Quick & Easy Computing Finger Print Sensor Unique LED Indicator Auto 2D to 3D Conversion 3D Surround Sound Super Connectivity via DLNA Highlights Operating System Screen Size 3D/Non 3D CPU RAM HDD Graphics Card Display : : : : : : : : Genuine Windows® Home Premium 15.6" Full HD 3D 3D I5-2410M GB 640 GB GF GT 540M 1GB 15.6" Full 3D HD (1920 x 1080) -e- General Specifications Battery Dimensions (mm) Weight (kg) LAN Wi-Fi Bluetooth ODD Audio : : : : : : : : Multi-Media Card Cam Input / Output Port : : : Design : Cells 375 x 249 x 32~36 2.5 Gigabit 802.11bgn 3.0 + HS DVD Super Multi HD Audio, SRS WOW HD, SRS True Surround HD or SRS Wide 3D Sound (3D Model Only) 5-in-1(xD, MMC, SD, MS, MS Pro) 1.3 MP Headphone, Mic In, USB(x3), LED Finger Print, HDMI, VGA, RJ45, DC-In Real Brushed Aluminum with Wine Red Professional (P series, pet name: LG Blade): P430/ P530 Key Features        Slimmer Bezel in Design 2nd Generation Processor Slimmer LCD in Design Brushed Aluminum Finish Diamond cutting Lighter Weight Super Connectivity via DLNA Highlights Operating System Screen Size 3D/Non 3D CPU RAM HDD Graphics Card Display : Genuine Windows® Home Premium : 14”/ 15.6" HD_Shruken : Non 3D : I5-2410M : GB : 640 GB : GF GT 520M 1GB : 15.6" HD (1366 x 768) LED LCD General Specifications Battery Dimensions (mm) Weight (kg) LAN Wi-Fi : Cells : 364 x 244 x 24~28 : 2.16 : Gigabit : 802.11bgn -f- Bluetooth ODD Audio Multi-Media Card Cam Input / Output Port Design : 3.0 + HS : DVD Super Multi : HD Audio, SRS WOW HD, SRS True Surround HD : 5-in-1(xD, MMC, SD, MS, MS Pro) : 1.3 MP : Headphone, Mic In, USB(x3), HDMI, VGA, RJ45, DC-In : Brushed Aluminum Finish in Titan Black Every day (S series, pet name: Aurora) : S430/ S530 Key Features      2nd Generation Processor Unique Crystalline Finish Seamless Contents Sharing Slim & Refined Premium Package USB Charging Highlights Operating System Screen Size CPU : Genuine Windows® Home Basic : 39.62 cms HD (16: 9) : i3-2310M -g- RAM HDD Graphics Card Display : GB : 640 GB : 1GB Graphics : 14”/ 15.6" HD (1366 x 768) or HD+ (1600 x 900) LED LCD General Specifications Battery Dimensions (mm) Weight (kg) LAN Wi-Fi Bluetooth ODD Audio Multi-Media Card Cam Input / Output Port Design : Cells : 381 x 255 x 33~36 : 2.6 : Gigabit : 802.11bgn : 3.0 + HS : DVD Super Multi : SRS HD : 5-in-1(xD, MMC, SD, MS, MS Pro) : 1.3 MP : Headphone, Mic In, USB(x3), HDMI, VGA, RJ45, DC-In : Aurora Blue/Purple -h- APPENDIX 3: MOT report form -i- APPENDIX 4: Information about HDD’s shortage(Source: LG internal data) X : Factory Shut-down ~~The end~~ ... strategy, LGEVN decide to launch new product – LG laptop- in Vietnam market in late of 2012 The purpose of this project is proposing a marketing plan for bringing LG laptop to Vietnam market base...Commitment: This is the marketing plan I have created myself base on the knowledge I gained from many interesting subjects during the Master In Business & Marketing Management course year... desktop: laptop – 60% GDP down, inflation up, consumer index Microsoft, Intel does very well the co- down continue make a tough year for marketing with laptop producers VN economy so laptop market