Brand development issues at OKS vietnam company limited

Nguyen Thi Thuy i Faculty of Foreign Languages ABSTRACT Branding is in the midst of those marketing gadget which are presumed to be used for only large-size companies or organizations This study is an endeavor to confiscate this distinction among large and small enterprises and proving it with the help of branding models and theoretical literature depending on the writer‟s empirical findings The aim of this research report is to stimulate the significance of this pivotal tool of business among the small enterprises so that it can also be supportive in smoothing the progress of their businesses as well from its benefits In order to reach the purpose of our study, the writer has used the qualitative research approach and used the telephonic interview based data collection technique in this regard The study is conducted in practical training at OKSV Company Limited, an engineering company located in Long Bien district, Hanoi city OKSV Co., Ltd is the company which has not been considering branding as the best suited tool to grow in the small markets as the general small companies‟ perception described above The study has come up with the results that either the full fledge branding model can‟t be applied in a small size company, but being a small company they can apply the branding models up to their capacity of resources like time, funds, trained personnel etc Moreover, the writer has found that the proper implementation of branding activities needs, planning, awareness and proper training to the company‟s personnel‟s if the small companies really want to get the competitive edge over competitor companies Finally, the writer has answered all the research questions along with the recommendations to the sample company (OKSV Co., Ltd) Academy of Finance Nguyen Thi Thuy ii Faculty of Foreign Languages DECLARATION I hereby declare that this thesis and the work reported herein was composed by and originated entirely from me Information derived from the published and unpublished work of others has been acknowledged in the text and references are given in the list of sources Ha Noi, 6th-May-2013 Nguyen Thi Thuy Academy of Finance Nguyen Thi Thuy iii Faculty of Foreign Languages ACKNOWLEDGEMENTS Firstly and foremost, I sincerely thank teachers of the Faculty of Foreign Languages at Academy of Finance, especially Ms Tran Thu Hoai for her enthusiastic guidance throughout the writing of this field study report I would also like to thank to the respondents of the OKSV Co., Ltd for giving me chance to work in professional environment and taking time and energy to participating in this study to share valuable information so generously My classmates supported me a great deal and I want to thank them for all their support, cooperation and valuable suggestions Finally, I cannot fully express my gratitude to all the people whose direct and indirect support helped me complete my report in time Academy of Finance Nguyen Thi Thuy iv Faculty of Foreign Languages TABLE OF CONTENTS ABSTRACT i DECLARATION ii TABLE OF CONTENTS iv LIST OF ABBREVIATIONS vii TABLE OF FIGURES viii INTRODUCTION CHAPTER 1: LITERATURE REVIEW 1.1 Branding 1.2 Objectives of branding 1.3 Competitive Advantages from Brand Equity 1.3.1 Perceived Quality 1.3.2 Brand Awareness: 1.3.3 Brand associations 10 1.3.4 Brand Loyalty: 10 1.4 Porter‟s Five Forces 12 1.4 Developing a unique brand 15 1.5.2 Crystallizing 17 Academy of Finance Nguyen Thi Thuy v Faculty of Foreign Languages 1.5.3 Communicating 17 1.6 Branding Strategy 19 1.6 Keller Strategic Brand Management Process: 20 1.7.1 Identifying and Establishing Brand Positioning and Values 22 1.7.2 Planning and Implementing Marketing Programs 22 1.7.3 Measuring and Interpreting Brand Performance 23 1.7.4 Growing and Sustaining Brand Equity 24 CHAPTER 2: STATUS OF BRAND DEVELOPMENT AT OKSV COMPANY LIMITED 25 2.1 OKSV Co., Ltd introduction 25 2.2 Branding in OKSV Co., Ltd 25 2.2.1 Applying Porter Five forces for the case of OKSV Co., Ltd 26 2.2.1.1 Rivalry among Existing Firms 26 2.2.1.2 Threat of New Entrants 27 2.2.1.3 Bargaining Power of Suppliers 27 2.2.1.4 Bargaining Power of Buyers 28 2.2.1.5 Threat of Substitutes 29 2.2.2 Branding process of OKSV Co., Ltd 29 Academy of Finance Nguyen Thi Thuy 2.2.3 vi Faculty of Foreign Languages Using Keller model of brand development guide in developing brand OKSV 32 2.2.4 Unique core values identified in creating the OKSV brand 33 2.2.5 Differentiation from competitive brands 34 CHAPTER 3: SUGGESTIONS TO IMPROVE BRAND DEVELOPMENT AT OKSV Co., LTD 36 3.1 Alignment of OKSV‟s development 36 3.2 Competitor analysis 37 3.3 SWOT Analysis 37 3.4 Suggestion in using social media to improve brand development at OKSV Co., Ltd 38 CONCLUSION 43 REFERENCES 46 Academy of Finance Nguyen Thi Thuy vii Faculty of Foreign Languages LIST OF ABBREVIATIONS No Abbreviation Full phrase OKSV Co., Ltd OKS Vietnam Company Limited CEO Chief Executive officier i.e For example Academy of Finance Nguyen Thi Thuy viii Faculty of Foreign Languages TABLE OF FIGURES Figure 1: Porter’s Five Force………………………………………………….12 Figure 2: Strategic brand management process……………………………….21 Academy of Finance Nguyen Thi Thuy Faculty of Foreign Languages INTRODUCTION Rationale and statement of the study Building, developing and maintaining brand value have been considered to be necessary from the years 70s of the 20th century by a lot of companies all over the world Brand is a vital asset of enterprises; it brings back stabilization, market share development, enhancement of capacity competitiveness of enterprises in the harshly competitive environment Currently, in the integration with the world economy, businesses of Vietnam have had special concern to issues of brand building and development Many Vietnamese companies have been aware that besides improving quality and reducing manufacturing cost, branding also takes a very important role in determining business result Due to high competition among national firms and monopoly of multinational companies in the engineering industry in Vietnam market, OKSV Co., Ltd is striving for growth and profitability as well as their brand awareness However, starting business in a competitive environment including many perennial brands as Alphanam, Viet Thang, Thanh Phat… OKSV Co., Ltd will face many difficulties to assess market, integration and development The company needs to build itself a prestigious brand and a sustainable competitive position in Vietnam market So the writer has chosen the topic “Brand Development issues at OKS Vietnam Company Limited” as her graduation thesis topic Academy of Finance Nguyen Thi Thuy 2 Faculty of Foreign Languages Aims and objectives of the study In this study, the writer will answer the following questions:  What is brand? Branding?  How does engineering industry work in general and how does OKSV Co., Ltd work in particular in the period of 2011 - 2012?  What are the shortcomings and limitations in branding of OKSV Co., Ltd?  What are solutions for these shortcoming and limitations? Analyze and find out the specific factors of OKS Vietnam to get brand positioning aim Build a strategy and brand development making OKSV become a strong Brand in Vietnam The writer does hope that the study will be beneficial to the company leaders who are seeking a right direction for their brand Subjects and scope of the study The subjects of the study are outstanding branding issues The writer tries the best to find out solutions and apply them for the sample company Because of the limitations of time and resources, the research mainly focuses on the status of branding at OKSV Co., Ltd in the period of 2011-2012 The writer will point out the shortcomings and limitations and give some recommendations to solve Methods of the study There are two types of research approaches that are widely used qualitative and quantitative This research process would be a qualitative research because in qualitative research the detailed examination will get held for the deep understanding of case In this thesis the results are not measurable in how many Academy of Finance Nguyen Thi Thuy 33 Faculty of Foreign Languages importance furthermore, company used its brand OKSV and get it linked as a company name so in order to penetrate this name in the minds of customers Currently, company is conducting research and development in order to measure and interpret its brand performance after implementing the different branding activities that how effectively their brand penetrated in the minds of customers and how much they have invested on branding activities and on the other hand how much is return on investment on branding activities According to CEO of OKSV, company reduced its profit from 40 % to 20% while entering from regional to national market where OKSV covering the rural as well as urban areas As regards the last guidance of the Keller model of brand management Process, Company is still striving in order to capitalize its branding strategies as well as making such marketing programs which could help in order to growth and sustainability of brand equity which is important objective of the company 2.2.4 Unique core values identified in creating the OKSV brand All of this result got from research question for CEO of the company: “What unique core values can be identified in creating the vital tea brand?” Developing strong brand is always top priority for every company OKSV always have the strong focus for developing the unique feature, values and association with their all product and company communicated these values within the organization while building brand process and it should be clearly define in company mission statement Mission of the Company: Company‟s main goal is to produce the most reliable and valuable products To increase sales in existing markets they focused on Academy of Finance Nguyen Thi Thuy 34 Faculty of Foreign Languages providing the customers with better value and to penetrate in new strategic business areas Apart from this company‟s core values are as follows:  Mutual respect, honesty and integrity are cornerstones of company  Striving for high customer and employee satisfaction  Diversity among workforce  Promote open Communication and teamwork OKSV is also highly concern with these values because these values represent the belief of the company and become the basis when developing brand proposition Because brand proposition can be changed with time or situation but core values would never changed On the basis of these values the brand proposition should be formulated The main goal of the company is to provide reliable and valuable products and services 2.2.5 Differentiation from competitive brands All of this result got from research question for CEO of the company: “How can OKSV brand is differentiated from competitive brands?” In the world of competition, it is important for every firm working nationally or internationally has to differentiate its product or service from its competitors in order to achieve the market share From the starting day of establishment company‟s goal is to differentiate its product with the help of providing quality product in low price for such particular market which was unable to get the attention of its competitors Academy of Finance Nguyen Thi Thuy 35 Faculty of Foreign Languages So in order to differentiate its product company first started to “provide a peace of mind to customers” OKSV knows well about press machines They purchase used press machines of high quality from Japan They check machines right before delivery to a purchaser's factory, making sure the machines are ready for shipment “We will be at your factory for the installation and a trial run, so that you will be able to use the machines from the day of delivery!” Company hired the services of engineers who have designed and produced high precision filling and fully automatic machines which will play an increasingly important role in the market as labor cost increase with this action but on the other hand it was the effective step towards progress in the national market In third phase of making differentiation company focused on the price of product as this is also the main concern from customer point of view it was not much difficult to control sustain and reduce the expenditures in order to keep the price low as per the demand of audience on the other hand it is very difficult to reduce or control the price of products for international brands due to their high expenses in operations, marketing, advertising, branding, human resources, high salaries of experts in different departments and distribution channels e.g Academy of Finance Nguyen Thi Thuy 36 Faculty of Foreign Languages CHAPTER 3: SUGGESTIONS TO IMPROVE BRAND DEVELOPMENT AT OKSV Co., LTD 3.1 Alignment of OKSV’s development All of Asia has become a production base for the world, and it is also, by itself, a huge market As a global strategy of OKSV Co., Ltd, and even more so, demanded by the world, we support and cope with the needs of the whole of Asia, as it is seeking to continue its‟ phenomenal expansion North America, South America, Europe and Asia The world strategy of this company, with its prolific affiliations including a vast array of manufacturers, marches rapidly forward towards globalization Above all, economics is the area where Asia is growing rapidly It is now the prime area as a huge market and at the same time has become known as an influential production base with high profitability At the present, OKSV Co., Ltd attempts to keep the risk factor to a minimum, when dealing with international situations that could change rapidly At the same time, it is possible that a changing situation could make a business opportunity even better It becomes important that each entrepreneurial foothold gets a system, which can be activated independently from their own country's readiness With that in mind, they could surely keep a global business opportunity alive It is now the proper timing for a big opportunity in Asia, with its major current growth swing How long this ideal production system and marketing opportunity will exist is unknown They must help our customers take advantage of this environment in a speedy and quality controlled manner In correspondence with such a market background, they should make full use of the technology and know-how, which has been cultivated in Japan and support various companies going into Asia "Three Viewpoints" becomes the key point Academy of Finance Nguyen Thi Thuy 37 Faculty of Foreign Languages here They are, "Facilities Introduction" at the time of getting into the market, "Maintenance" for every day stable operation and "Improvement Suggestion" for future development We are a professional engineering group, working with the world's top machine makers We will always our best to contribute to the development of business strategies for our customers 3.2 Competitor analysis In marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors This analysis provides both an offensive and defensive strategic context to identify opportunities and threats Profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment Competitor analysis is an essential component of corporate strategy It is argued that OKSV Co., Ltd does not conduct this type of analysis systematically enough Instead, the company operates on what is called “informal impressions, conjectures, and intuition gained through the tidbits of information about competitors every manager continually receives.” As a result, traditional environmental scanning places many firms at risk of dangerous competitive blind spots due to a lack of robust competitor analysis 3.3 SWOT Analysis Strength: As said above, OKSV Co., Ltd‟s headquarters business company - OTA YOSHIO MACHINE INDUSTRY CO., LTD, is in Japan It is a highly influential company in the industry and has been in business for more than 50 years, dealing with the sale and maintenance of press machines They can cope with all classes of mechanical press machines from 25t to the 1,000t class They Academy of Finance Nguyen Thi Thuy 38 Faculty of Foreign Languages are rich in experience with the maintenance of press machine makers such as; Komatsu, Aida Engineering, Ltd., Amada, Washino, CHING HONG (Taiwan) etc They perform annual periodic examinations, according to the specific voluntary inspection list provided by the Japanese Ministry of Health, Labor and Welfare Weaknesses:  Networking opportunities not fully exploited  Effects of demographic change such as staff shortages  Marked export bias Opportunities:  Machine construction as innovation driver  Cross-cluster activities  Benefit from the leading role of other clusters Threads:  Advancement of core future-oriented areas for machine construction  Maintaining and boosting sector performance  Developing location profile 3.4 Suggestion in using social media to improve brand development at OKSV Co., Ltd The purpose of this suggestion is to; base on the fact that social media are predicted to really have a strong breakthrough in the corporate sector in this year of 2013, look at how OKSV use them in branding and add some advices Initial research on the branding area and on the social media are led to the formulation of the research problem as previously described, to increase the understanding of Academy of Finance Nguyen Thi Thuy 39 Faculty of Foreign Languages the role of social media for the creation of brand awareness The specific area of fast moving goods sector within business to consumer market was chosen With social media, we are sailing into unknown waters, and there is no clear seamap yet The necessary parameters allowing for comparative studies being made on the usability of social media in the creation of brand awareness not yet exist, or at least they were not possible to find within the literature overview which was made in this study The most important message that comes across from the interview with the company is that the great challenge that the respondents see, is for the company to find the right balance between providing contents of great interest for the audience, while at the same time respecting what kind of information the company can really go out with- it is about being relevant in social media and in all other channels of communication This means a constant need for learning and developing new knowledge, for measuring and following up Another remark is that Weber (2010) points to the necessity of creating interest, creating a buzz about the brand in social media, to feed the discussions with information that makes the readers interested in the brand In the case study, this approach is indeed used, in connection with the release of new commercial films for example But perhaps is it premature to expect at this stage, to expect companies to have a clear strategy for how to reach the different stages of brand awareness, form the weakest (recognition) to the strongest (word-of-mouth) In addition, in contrast with the finding, it seems like the company does not abandon completely the traditional way of marketing for marketing in social media, and not fully follow the idea of switching from being broadcasters of messages to being aggregators of customer communities Instead, what was considered more important by the company in the case study was to integrate Academy of Finance Nguyen Thi Thuy 40 Faculty of Foreign Languages social media in the total communications and PR-strategy, a task which is actually being performed at this very moment One comment on the setting up of this kind of integrated strategy in which social media take part, is for future research to look at possibilities that social media create in terms of reach out and affordability to establish dialogue The perspective in this study has been a qualitative one Develop human resources To improve human element, OKSV Co., Ltd can apply some of the following measures: Finding and attracting talent: through advertising it in the media regarding its traditional business efficiency, and development prospects, the company can increase its ability to attract qualified people who wish to become members of the company Developing and implementing training plans: OKSV Co., Ltd should develop comprehensive training courses, especially those related to import fields It should train staff in the necessary skill such as negotiation skill, presentation skill It must equip its staff with appropriate knowledge about international trade and laws Implementing human resources regime: employees will develop their intellectual resources and energy to complete the assigned tasks when being satisfied with working conditions as well as material and mental benefits To satisfy the interest of both sides (business and employees), OKSV Co., should have working regime and policies appropriate to each specific condition, such as working hours, breaks, income, bonuses and other incentives, health insurance, promotion opportunities etc Academy of Finance Nguyen Thi Thuy 41 Faculty of Foreign Languages Here the writer would like to give some general noteworthy recommendations to the company based on previous study and the analysis in the light of literature review and empirical study: First of all company should focus on the planning of the branding activities as planning is the foundation of any activity and if the foundation is strong then activity will provide maximum benefits so company should well planning of the branding strategy As the company is not having written branding strategy so here we would strongly recommend that Company should have well defined written instead of verbal branding strategy so that it could be wisely communicated to all levels within organization and it should be taken seriously as company„s values and mission Company should get complete guidance from the Keller brand development process by reviewing the whole process thoroughly and implement the strategies step by step in order to get the maximum utility Company should provide better training and knowledge to their employees with regards to branding practices so that they could better perform in efficient manners As company is spending less finances on such activities like advertising, brand awareness, marketing, brand promotion e.g which lead a hurdle in progress in making brand recognition so company should allocate good budget especially at this time when they are striving to compete with multinational firms on national level Academy of Finance Nguyen Thi Thuy 42 Faculty of Foreign Languages With regards to advertisement of its brands company is allocating major part of the budget to retailers, distributors and the whole sellers so we would recommend that apart from this company should also consider and spend good budget of advertising on customer level which leads customer trust on specific brand In order to win the trust of audience in Competition, Company should focus on the customer satisfaction as well from all aspects relevant to customer satisfaction like, price, quality, healthy packaging, customer value other than the product, proper feed back to customer of their complaints e.g Academy of Finance Nguyen Thi Thuy 43 Faculty of Foreign Languages CONCLUSION Companies either big or small in these days striving in order to make their product as a brand and involve in such kind of activities which are helpful in making the positive image of the brand, once image of the brand is positively created in the mind of customer he or she starts purchasing the particular product frequently which resultantly enable the customer brand loyal and brand loyalty enhances the profitability which is the ultimate goal of the business Small companies usually think that it is very costly to branding activities so mainly small companies avoid it and spend very little money on the advertising or promotion for the products Usually small businesses focus on profits by selling quantity and don„t like to indulge in branding activities as branding requires many things like, services of experts, strategic planning, finances, human resources and much more Most of them are not well aware about the branding benefits especially in developing countries like Pakistan where there is very low rate of literacy The writer studied the case of OKSV Co., Ltd which is in early stages just focused on targeting the audience in rural areas by selling the product with unique idea of selling good quality press machine with specific maintenance without paying proper attention to the branding of their products but in order to expand in market they felt the need to branding of their products due to the existence of well established competitors brands So, company feels the need of branding after years of its establishment when started working on national level and due to spending on branding activities Company reduced its profit from 40% to 20% but still company is spending in order to create the awareness among audience Although this is costly process but with the help of proper Academy of Finance Nguyen Thi Thuy 44 Faculty of Foreign Languages strategic planning and its implementation these organization can cover the cost and get benefited equally as larger firms While conducting a research here in Vietnam, the writer founds it very hard to gather primary data from the case study company which is operating its activities in the country The only thing, she can do, in this regards is to make telephonic conversation with the authorities or the conscientious personnel in the company The writer could not use the following methods of data collection due to distance from the location as well as time limitation namely:  Consumer survey  Distributor survey  Focus Groups with consumers  Market analysis  Survey with work force The writer also wanted to have more interviews with marketing, quality, and brand manager in order to have a look over the performance of the company but due to their busy schedules could not access them This is awfully tough to make a continuous contact not merely from the vital tea company‟s senior managers, directors and CEO but of any company in the globe because of their busy schedules especially, when the interviewers and the interviewees are miles away The writer just conducted the detailed telephonic interview of CEO, Advertising Manager and director business development who is supervising the whole branding department and business development as well According our limited study and observation, the writer made her best effort to provide the quality Academy of Finance Nguyen Thi Thuy 45 Faculty of Foreign Languages research by valid and reliable data in order to answer our research questions Furthermore, the writer also faced time constraint and due to having less span of time for her study so further studies, different market surveys and analysis are required in order to get deep understanding and analysis of problem in more efficient and effective manners Academy of Finance Nguyen Thi Thuy 46 Faculty of Foreign Languages REFERENCES Aaker, D.A (1991) Managing Brand Equity: Capitalizing the value of a Brand name Free Press, New York Aaker, D.A (1996) Building Strong Brands Fee Press, New York Aaker, DA (2008) Strategic market management John Wiley & Sons, Inc Bergvall, J 2001, ‗Brand Small Brands.„ Viewed 30thDecember,2008, http://www.brandchannel.com/images/Papers/BrandSmallBrands.pdf Bergvall, J 2001, ‗Brand Small Brands.„ Viewed 30thDecember,2008, http://www.brandchannel.com/images/Papers/BrandSmallBrands.pdf Derrick, Daye & Brad, Vanauken 2007, how organization age and size affect brand management issues viewed 21th January, 2009 http://www.slideshare.net/alihadi/tea-marketing-plan Christine Johnson (2006) Intelligent Business Pre-Intermediate Course Book Essex: Longman Elliott, R and Percy, L B (2007) Strategic brand management Oxford University Press, Oxford Keller, K 2002, Strategic Brand Management 2th Edition, New Jersey, USA: Pearson Education, Inc 10.Wiedersheim-Paul, F and Eriksson, L 2001, ‗ Investigate, Research and Report‟ Malmo Economics Library Academy of Finance Nguyen Thi Thuy 47 Faculty of Foreign Languages 11.Yin, R.K 1994, Case Study Research‟ 2nd Edition, Thousand Oaks, Sage Publications 12 Zikmund, W.G 1999, Business Research Methods„ 6th Edition, Orlando, the Dryden Press Academy of Finance ... and Interpreting Brand Performance 23 1.7.4 Growing and Sustaining Brand Equity 24 CHAPTER 2: STATUS OF BRAND DEVELOPMENT AT OKSV COMPANY LIMITED 25 2.1 OKSV Co., Ltd introduction... sustainable competitive position in Vietnam market So the writer has chosen the topic Brand Development issues at OKS Vietnam Company Limited as her graduation thesis topic Academy of Finance... developing brand OKSV 32 2.2.4 Unique core values identified in creating the OKSV brand 33 2.2.5 Differentiation from competitive brands 34 CHAPTER 3: SUGGESTIONS TO IMPROVE BRAND DEVELOPMENT