The marketing strategy of a multinational join stock company

The Marketing Strategy of a multinational join stock company INTRODUCTION Nowadays, marketing is obviously a more and more vital in the successes of every enterprise However, not many of the companies in Vietnam have paid adequate attention to marketing activities, especially when both domestic and global competition is getting fiercer and fiercer Being one of the companies specializing in selling air conditioners, a multinational join stock company has achieved certain success in this field Its sales of air conditioners have increased over the years since its establishment However, the company sales growth of air conditioners has been modest in comparison with other competitors’ The reason for this partly lies in its marketing After taking a close look at a multinational join stock company’s performance, I decide to choose “Marketing strategies of a multinational join stock company” as the topic for my field study report with a view to examining a multinational join stock company’s marketing strategy and making some recommendations to improve it A multinational join stock company has a lot of business activities, but because of limited time, this report focuses only on the company’s marketing activities for one line of its business, that is air conditioners, on the market in Vietnam Apart from the introduction and conclusion, the report is divided into chapters as follows: Chapter 1: Theoretical Framework Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Chapter 2: The marketing Strategy of a multinational join stock company Chapter 3: Some Recommendations to Improve a multinational join stock company’s Marketing Strategy Chapter 1: Theoretical Framework 1.1.1 The concept of marketing 1.1.2 The definition of marketing Today’s central problem facing business is not a shortage of goods but a shortage of customers Most of the world’s industries can product far more goods than the world’s consumers can buy Overcapacity results from individual competitors projecting a greater market share growth than is possible If each company projects a 10 percent growth in its sales and the total market is growing by only percent, the result is excess capacity This in turn leads to hyper competition Competitors, desperate to attract customers, lower their prices and add give away These strategies ultimately mean lower margins, lower profits, some failing companies, and more mergers and acquisitions Marketing is the answer to how to compete on bases other than price Because of over capacity, marketing has become more important than over If forced to define marketing, most people, including some business managers, say that marketing means “selling” or “advertising” It’s true that these are parts of marketing But marketing is much more than selling and advertising Today, marketing must be understood not Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company in the old sense of marketing a sale-“telling and selling”-but in the new sense of satisfying customer needs Selling occurs only after a product is produced By contrast, marketing starts long before a company has a product “Marketing is the homework that managers undertake to assess needs, measure their extent and intensity and determine whether a profitable opportunity exists Marketing continues throughout the product’s life, trying to find new customers and keep current customers by improving product appeal and performance, learning from product sales results and managing repeat performance”1 So that does the term “marketing” means? Actually, there is no single and universally agreed definition of marketing The American Marketing Association defined marketing “is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals”2 The writer of the book “The Silk Road to International Marketing” had another definition as follow: “Marketing is the process by which decisions are made in a totally interrelated changing business environment on all the activities that facilitate exchange in order that the targeted group of customers is satisfies and the defined objectives accomplished ” 3.Though there are many definitions, a central part of any definitions of marketing is the exchange process – the process of giving something of value in return for something of value Or in other words, it’s the process of transferring between two or more parties of tangible or intangible items of value Cash, debt, time, votes, behavior, etc Marketer Marketer Goods, Goods,Services, Services, ideas, ideas, People Peopleand andPlaces Places Le Kim Hong Tu _ 5D Customers Wants and needs The Marketing Strategy of a multinational join stock company Health, safety, comfort, transportation, beauty, productivity, etc Figure 1.1: the exchange process For marketing to occur, at least four factors are required: (1) two or more parties with unmet needs, (2) a desire and ability to satisfy them, (3) communication between the parties, and (4) something to exchange Here’s what Berkowitz stated in his book “Marketing” As marketing is a kind of exchange, certain conditions must exist before the exchange can occur 1.1.3 The goals of marketing “Today’s successful companies at all levels have one thing in common; their success is founded upon a strong customer focus and heavy commitment to marketing” They motivate everyone in the organization to deliver high quality and superior value for their customers, leading to high levels of customer satisfaction These organizations know that if they take care of their customers, market share and profits will follow Creating customer values and satisfaction is at the very heart of modern marketing thinking and practice The goal of marketing is to attract new customers by promising superior values, and to keep current customers by delivering satisfaction When a company succeeds in creating more values for customers than its competitors can do, that company is said to enjoy competitive advantage industry Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company 1.2 Competitive Analysis It is the increasingly emerging markets that have create favorable conditions for the rapid development of world trade and investment, which is well – manifested in the sophisticated growth of a number of global companies To compete in one or more foreign markets, companies not only need to broaden relentlessly their sources of competitive position One particularly useful technique in analyzing a firm’s competitive position relative to its competitors is SWOT(strengths, weaknesses, opportunities, and threats) analysis aims to isolate the key issues that will be important to the future of the firm and that will be addressed by subsequent marketing strategy A SWOT analysis divides the information into two main categories (internal factors and external factors) and then further into positive aspects (strengths and opportunities) and negative aspects (weaknesses and threats) The internal factors could be viewed as strengths or weaknesses, depending upon their impact on the firm’s positions; i.e., they may represent strength for one firm but awearness irrelative terms, for another They include all of the marketing mix (product, price, promotion and place strategy) as well as personnel and finance The external factors, which again may pose a threat to one firm but create opportunities to another, include technological changes legilation, social-cultural differences, and change in the market place or competitive position 1.3 Global Marketing Strategy In terms of globalization, worldwide businesses use global marketing when they take the same or similar approach or content for one or more elements of the marketing mix, that is, the same or similar brand Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company names, advertising And so on in different countries Although most of the multinational companies using global marketing mix-product, pricing, promotion and place – are standardized Business can make some elements of marketing more global and others less so Accordingly, possible adaptations that firms might apply to their product, promotion, price, and place when they enter through the foreign markets will be provided in this part 1.3.1 Product There are five international product and promotion strategies for a company to extend its market base into other geographic markets (See table 1.1) Straight extension means marketing the product in the foreign without any adaptation Top manager asks its marketing people to “find customers for the product as it is” As a result, it is seen as easiest product marketing strategy and may be the most profitable one as well However, the company should first determine whether foreign consumers use that product or not Straight extension has been successful with cameras consumer electronics, and many machine tools This strategy is tempting because it involves no additional product development cost, manufacturing changes, or promotional modification But it can be costly in the long run if products fail to satisfy foreign consumers Do Le Kim Hong Tu _ 5D Product not Adapt product Develop change new product product Promotion The Marketing Strategy of a multinational join stock company Do not Straight change extension Product adaptation Product promotion Adapt Communicatio Dual promotion n adaptation Table 1.1: invention adaptation Five international product and promotion strategies Product adaptation involves changing the product to meet local conditions or preferences There are several levels of adaptation A company can produce a regional version, a country version, a city version or even promotion retailer versions of its products Although, products are frequently adapted to local tastes, in some instances they must be adapted to local superstitions or beliefs, too Product invention consists of creasing something new the foreign market It can be divided into two forms The first is backward invention, which means reintroducing earlier products forms that happen to be well adapted to the needs of a given country And forward invention is to create a new product to meet a need in another country 1.3.2 Promotion Companies can either adapt the same promotion strategy they used in home market or change it to suit for each local market Although some global companies use a standardized promotion campaign changes might be needed to comply with local regulations and references There are four different levels of adapting promotion strategy Firstly, companies can use one message everywhere, varying only the language, name, and colors That is because colors might be changed to avoid taboos in some countries Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Also, names and slogan may have to be modified in some countries Secondly, companies may use the same them globally but adapt the copy to each local market Thirdly, companies can develop a global pool of advertising from which each country selects the most appropriate one Finally, some companies allow managers to create a specific advertising – within guidelines, of course Other companies follow a strategy of communication adapting their advertising messages without any product changing Although it retains the scale economics on the manufacturing side the firm sacrifices potential saving on the communication way another strategy is dual adaptation It is changing both the product and the communication to face local differences 1.3.3 Price Global companies face several problems in setting their international prices Those problems must deal with price escalation, transfer prices, dumping charges, and black markets Price escalation problem occurs when companies sell their goods abroad The foreign prices probably will be higher than their domestic ones because it must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin Depending on these added costs, the product may have to sold for two or five times as much as another country to generate the same profit Since cost escalation varies from country, companies have three price setting approaches in different countries Setting a uniform price everywhere: charging the same price everywhere in the world By this method, companies would earn quite different price in different countries because of varying escalation costs Also, this strategy would result in too high price in poor countries and not high enough in rich countries Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Setting a market-based price in each country: charging what each country could effort But this strategy ignores differences in the actual costs from country to country In addition, it could lead to a situation in which intermediaries in low-price countries reship to high-price countries Setting a cost-based price in each country: using a standard marketing of its costs everywhere But this strategy might price out of the market in countries where it costs are high Another problem arises when a company sets a transfer price(i.e the price that it charges to another unit in the company) for goods that it ships to its foreign subsidies If company charges too high a price to a subsidiary, it may and up paying higher tariff duties, even while paying lower income taxes in that country If company charges its subsidiary too little, it can be charged with dumping Dumping occurs when a company charges either less than it costs or less than it charges in its home market, in order to enter or win a market Various governments are watching for abuses and often force companies to charges the arm’s-length price – that is, the price charged by other competitors for the same or a similar product Global companies also face the black-market problem A black market means the same product is sold at different price geographically Dealers in the lower-price country find ways to sell some of their products in higher-price countries, thus earning more Many company finds some distributors buying more than they can sell in their own country and reshipping goods to another country to take advantage if price differences Multinationals try to prevent black market by policing the distributors, by raising their prices to lower-cost distributors, or by altering the product characteristics or service warranties for different countries Moreover, one challenge o global pricing in recent years is that countries with overcapacity, cheap currencies, and the need to export Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company aggressively have pushed prices down and devalued their currencies For multinational firms this poses great difficulties Sluggish demand and reluctance to pay higher price make selling in these emerging markets harder Instead of lowering prices, and taking a loss, some multinationals have found more creative and creative means to deal with this problem 1.3.4 Place (Distribution channels) Global companies must take a whole-channel view of the problem of distributing products to final consumers Figure 1.2 show the three major links between the seller and the ultimate user In the first link, seller’s international marketing head quarters the export department or international division makes decisions on channels and other marketing-mix element The second link, channels between nations, moves the products to the borders of the foreign nations The decisions made in this link include the types on intermediaries (agents, trading companies) that will be used, the type of transportation (air, sea) and the financing and risk arrangements The third link, channels within foreign nations, moves the products from their foreign entry point to final consumers Channels of distribution within countries vary greatly from nation to nation first, there are large differences in the numbers and types of intermediaries serving each foreign market Long channels of distribution means that the consumer’s price ends up double or triple the importer’s price Another difference lies in the size and character of retail units abroad Breaking bulk remains an important function of intermediaries and helps perpetuate the long channels of distribution, which is a major abstaining to the expansion of large-scale retailing in developing countries Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company The last strategy that a multinational join stock company to use is in the fourth of this year it launched a lever air conditioner at inexpressive price This kind of product is for low and middle-income people in Vietnam These are the air conditioners with model FUNIKI SC 09 and SC 12, which are offered at inexpressive price of between VND 5,000,000 and VND 6,500,000 The company belives that cheaper price of two-way air conditioners and lower installation and maintenance cost of air conditioner are the two key elements to increase the sales of a multinational join stock company’s air conditioners in Vietnam 2.3.3 Place A good distributing policy helps business activities safer, increasing the connection in business, decreasing competition and marketing the circulation of goods more quickly and efficiently In the domestic market a multinational join stock company has good relations with its partners so they help a multinational join stock company very much in the distribution They help a multinational join stock company in over other rivals even in the forecast competition Two-way air conditioners retailers are said to gain much benefit when committing to sell the new FUNIKI set The company not only supplies its two ways to these retailers, but also supports them in terms of outlet decoration, staff training and marketing activities Besides, each retailer will get a juicy bonus if an air conditioner is sold A multinational join stock company offers an intensive support for any retail that is located in business centers of the cities and provinces across nation On the contrary, the company would offer the shop owner much more benefit such as free shop-sign and not correction and a greater commission if the selling volume is reached at a high Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company level This always try their best to market as many air conditioners as ways is sold out much more than competitors 2.3.4 Promotion Promotion is the aspect of marketing concerned with increasing sales Marketing must be considered on marketing production decision, and promotion must be considered in the overall marketing process Promotion attempts to persuade and influence the customer’s attitude in various ways A multinational join stock company has used some ways to advertise its product such as advertisements on television, internet, newspaper, magazine… However, they advertisements are not very effect A multinational join stock company uses two strategies promotion that is pulling strategy and pushing strategy to each of target customer as illustrated in the following figures: Factory Wholesaler Retailer Customer Figure 2.3: Pulling strategy A multinational join stock company uses this strategy to make the customers have an idea and believe in product and buy the products of a multinational join stock company Factory Wholesaler Retailer Figure 2.4: Pushing strategy Le Kim Hong Tu _ 5D Customer The Marketing Strategy of a multinational join stock company Pushing strategy aims at company and branch office dividing the price for advertising and discounted price A multinational join stock company uses this strategy because there are many branches in company Chapter 3: Some Recommendations to Improve a multinational join stock company’s Marketing Strategy 3.1 Some recommendations to the Government and relevant authorities In doing business, in particular, and other enterprises in general, are facing not only subjective problems but also objective ones, which need efforts and solutions from the government It is, therefore, recommended that our government should take these following actions so to create better business environment for companies like a multinational join stock company Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company 3.2 Recommendations to a multinational join stock company Global marketing strategy is not about standardizing the marketing process on a global basic Although every element of the marketing process – product design, product and brand name, packaging, pricing, advertising strategy and execution, promotion, and distribution – may be a candidate for standardization, standardization is just one part of a global marketing strategy Consequently, striking the right balance between standardization and localization greatly contribute to a multinational join stock company’s success A multinational join stock company has developed a combination of standardization and localization of marketing programs to match Vietnamese market But to further promote the sales of air conditioners by a multinational join stock company the following are recommended to the company 3.2.1 Improving the company’s marketing mix The company needs to build up an good marketing mix for the current marketing strategy, which bases on the four elements: Product: improving the quality and diversifying categories of products is the core of product element in the marketing mix As discussed above, the market for air conditioners in Vietnam is becoming more sophiticated with a variety if different demands The small portion of the market usually set high requirements for the trend-catching and material-selecting criteria of the imported air conditioners Others are low and middle-income earners who require a lower quality Temporarily, the company should consider satisfying its product range as the most important element in its strategy Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Price: high price has always been the disadvantage in competition Although a multinational join stock company’s prices have been considered reasonable for some brands over the few years, keeping this low level is a quite difficult task for the company In a addition, as a multinational join stock company is thinking of expanding its product range with higher and also lower quality products, maintaining competitive prices is not easy This is really a jey to the company’s success in the future Place: a good distributing policy helps business activities safer, increasing the connection in business, decreasing competition and making the circulation of goods more quickly and efficiently Due to the characteristics of a multinational join stock company’s activities, there are three ways for the company to make further improvement to its distribution performance Firstly, improve a multinational join stock company’s distribution users in the shortest period of time The second alternative is to open more branches A multinational join stock company’s current branches are in big cities, so it advisable for the company to set up new in small towns, where people’s incomes have been improving and can afford air conditioners The last alternative, which should be used in the long term and considered to be the best, that is to establish a network of representative offices throughout the country Promotion: this is one of the weaknesses of a multinational join stock company For the purpose of sakes growth, the company should invest more in promotion activities This is a method not only to increase sale but also to build the company’s image The measures to build the company’s image will be discussed in the next section Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company 3.2.2 Building the company’s image It is said that advertising is a business art A multinational join stock company’s weakness is efficiency of promotion is not good The reason is a multinational join stock company has not applied tools of promoting policy It might be an advertising on TV, on the radio in rush hours The strength of advertising on TV help viewers can see both images and sounds, colors Furthermore, the expenses of advertising on TV is broadcasted many time per day Besides, almost the households belong to every class in society have TV and watch favorite program on TV in their free time The effect of this type of advertising is wide Today is a era of IT and modern means of communication Internet has played an important role in social activities and in the economy The enterprise can introduce it to other companies over the word Signing the contract with Ministry of Thailand motivated A multinational join stock company’s to export in order to increase foreign currency, expands global market In my opinion, a multinational join stock company needs to build their website which has global function Website is a modern media and widely used on over the world particularly in developed and developing countries Customers can find comfortable and convenient to search information if the company they are considering on internet Partners can easily know about the product, price, quality of product, etc and they can buy through website of the company Website not only brings helpful information to the customers but also save such expenses as transport (traffic, accidents), telephone, telex, etc The importance thing now is a multinational join stock company’s politic department needs collect importance information related to the company, its products and product quality and commercial culture of the company As a result, a multinational join stock company’s brand Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company name and reputation will be spread and have a profound impact on the customers In conclusion, advertising cost is a lot of However, it can be considered as an investment rather than an expense, more wisely spending money can help the company expand brand name good for the company’s activities Conclusion The first part of the thesis concepts related to marketing and the theory that will be later based on to research The definition, the goals of marketing , the contents of marketing as well as implementation and control are main parts of chapter one Gaining an insight into the theory of marketing gives us the background to keep the thesis to be on the right track The research has gone over the practical situation by looking at the company’s overview and the application of marketing strategies for a multinational join stock company In performing its marketing strategies, the company has achieved considerable successes but some limitations still remain The analysis of these shortcomings and recommendation for solutions all are made in accordance to the modern theories of marketing Despite only multinational successes three join Since years stock its of doing company establishment, business has the in achieved market Vietnam, a considerable share of a multinational join stock company has increased dramatically in the Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company premium segment But the most important success of a multinational join stock company is that it has built up a good image, favorite brand, nation-wide distribution network and created good impressions to stakeholders including its customers The above successes are greatly attributed to the company’s proper and flexible marking strategies However, there are still some obstacles that the company must overcome to be successful in the future time The market and the business environment are changing day in and day out, if not to say, the competition in all industries is becoming fiercer and fiercer All of them require the flexible and approach adjustment and new application to maintain successes in a long run In this thesis, the write also has suggested some of solutions to improve the marketing strategies for a multinational join stock company in the time to come The solutions give recommendations for the government to complete the legal framework, to improve the infrastructure and to increase the effectiveness in anti mission The micro-solutions concentrate on boosting the company’s efficiency in performing marketing strategies In the coming years, if a multinational join stock company now how to take advantage of its strengths, to overcome its weaknesses, to entrance the smooth exchange between the company and its customers, to build close and deep relationships with all stakeholders, the company will certainly maintain its position in Vietnam and enlarge its market share gradually Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company TABLE OF CONTENTS INTRODUCTION Chapter 1: Theoretical Framework 1.1 The concept of marketing 1.1.1 The definition of marketing .2 1.1.2 The goals of marketing .3 1.2 Competitive Analysis 1.3 Global Marketing Strategy .4 Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company 1.3.1 Product 1.3.2 Promotion 1.3.3 Price 1.3.4 Place(Distribution channels) .8 1.4.The marketing mix strategies Chapter The Marketing Strategy of a multinational join stock company 10 2.1 An InTroduction to a multinational join stock company 10 2.1.1 Company development .10 2.1.2 Company’s products 10 2.1.3 Company’s Organization 11 2.1.4 Board of Directors 11 2.1.5 The departments 12 2.1.6 Company trading results 13 2.2 The marketing strategy of a multinational join stock company 13 2.2.1 SWOT analysis of a multinational join stock company 13 2.2.2 Strengths 14 2.2.3 Weaknesses 16 2.2.4 Opportunities 18 2.2.5 Threats 18 2.3 A multinational join stock company - marketing mix 18 2.3.1 Product 18 2.3.2 Price 19 2.3.3 Place 20 2.3.4 Promotion 20 Chapter 3: 22 Some Recommendations to Improve a multinational join stock company’s Marketing Strategy .22 3.1 Some recommendations to the Government and relevant authorities 22 3.2 Recommendations to a multinational join stock company .22 3.2.1 Improving the company’s marketing mix 22 3.2.2 Building the company’s image 24 Conclusion 25 Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company References Amber, T.and Styles, The Silk Road to International Marketing, Harlow: FT Prentice Hall Arch G Woodside , Outdoor advertising as experiments, Journal of the Academy of Marketing science Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Berkkowitz, Kerin, Hartley, Rudelius, Marketing, nd edition, Irwin McGrawHill Charlers Hill, International Business Courtland L Bovee, Jonh V Thill, “Marketing”, 2nd edition Crag, C.S and Douglas, S.P, International Marketing Research, Chichester: Wiley Keegan, Warren J, Multinational Marketing Management Kotler, Philip , Marketing Management Subhash C.Jain, Intenational Marketing Management 10 Philip Kotler, Gery Armstrong, John Saunders, Veronica Wong, principles of Marketing, 2nd edition,p.97 Acknowledgements In the process of writing this report, I have gained a great deal in terms of project planning, research methodology and information acquisition Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company But I could never have done this work without the help and advice of many whose ability far exceeds my own With gratitude, I acknowledge a specific debt to my supervisor, Mrs Hoang Thi Hoa, for her invaluable advice and personal guidance from the planning stage to the completion of this report My thanks also go to all my teachers at the foreign trade University for their devoted teaching and for introducing me to the world of knowledge during my four and half years at the University Their influence will remain with me for my entire life Thank you a multinational join stock company for providing the information, data, materials that enabled me to complete my report Finally, I wish to express my deepest appreciation to all people in my family for their love, understanding and encouragement Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company INTRODUCTION Nowadays, marketing is obviously a more and more vital in the successes of every enterprise However, not many of the companies in Vietnam have paid adequate attention to marketing activities, especially when both domestic and global competition is getting fiercer and fiercer Being one of the companies specializing in selling air conditioners, a multinational join stock company has achieved certain success in this field Its sales of air conditioners have increased over the years since its establishment However, the company sales growth of air conditioners has been modest in comparison with other competitors’ The reason for this partly lies in its marketing After taking a close look at a multinational join stock company’s performance, I decide to choose “Marketing strategies of a multinational join stock company” as the topic for my field study report with a view to examining a multinational join stock company’s marketing strategy and making some recommendations to improve it A multinational join stock company has a lot of business activities, but because of limited time, this report focuses only on the company’s marketing activities for one line of its business, that is air conditioners, on the market in Vietnam Apart from the introduction and conclusion, the report is divided into chapters as follows: Chapter 1: Theoretical Framework Chapter 2: The marketing Strategy of a multinational join stock company Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company Chapter 3: Some Recommendations to Improve a multinational join stock company’s Marketing Strategy Le Kim Hong Tu _ 5D ... marketing strategy of a multinational join stock company Le Kim Hong Tu _ 5D The Marketing Strategy of a multinational join stock company 2.2.1 SWOT analysis of a multinational join stock company As mentioned.. .The Marketing Strategy of a multinational join stock company Chapter 2: The marketing Strategy of a multinational join stock company Chapter 3: Some Recommendations to Improve a multinational. .. Chapter The marketing strategy of a multinational join stock company 2.1 An introduction to a multinational join stock company 2.1.1 Company development A multinational join stock company was founded