Applying the principles of management strategy of marketing places to evaluate the reality and provide solutions of theoretical and practical grounds to improve the structure and contents of marketing place strategy for attracting investment to fill up current IZs in local province with Ha Tinh as a case study.
LIST OF PUBLISHED WORKS OF THE AUTHOR RELATED TO THE THESIS TOPIC 1. Nguyen Huy Hoang, Nguyen Bach Khoa, Nguyen Hoang Viet (2017), “Study of marketing places in attracting investment to fill up local industrial zones in Vietnam – a case study in Ha Tinh province”, Journal of Trade Science, issue 110 October 2017, page 0208; issue 111 November 2017, page 0215 Nguyen Huy Hoang (2017), “Stratrgy of marketing places: Research model and measurement scale”, Industry and Trade Magazine, issue 07, June 2017, page 321324. 3. Nguyen Huy Hoang (2017), “Strategy of marketing places in attracting FDI of several typical countries and locality; experience lessons for Ha Tinh province”, Industry and Trade Magazine, issue 08, July 2017, page 108113 4. Nguyen Huy Hoang (2017), “Solutions to develop strategy of marketing places in attracting investment to fill up local industrial zones in Ha Tinh province”, Industry and Trade Magazine, issue 09, August/2017, page 134138 PREFACE 1. Urgency of the thesis topic Marketing places is a new scientific field in Vietnam, both in terms of theory and practice In general, localities have limited awareness about building their images for external investors and Understanding and applying the concept and procedures of marketing places serve as both requirements and tools in attracting local and foreign investment to successfully implement socioeconomic development policies of localities. Not much has been done done in attracting investment into industrial zones of Ha Tinh provinces. Compared to other provinces, the number of investment projects and registered capital into Ha Tinh are still small; they do not meet the local potential and advantages. Almost all projects are in Vung Ang Industrial Zone; the majority of projects are of small scale with low economic and social efficiency A number of investors in economic zones have not strictly followed legal regulations on environment protection, causing losses to the environmnt and serious impact on investment into Ha Tinh. Investors’ awareness of environmental protection have not been high; they still place economic benefits over their responsibilities of environmental protection Inspection and monitoring of environmental protection in economic zones by state agencies in Ha Tinh have not been done in a strict and regular manner. In addition, investment projects in Ha Tinh, especially in support industry, service, tourism and agriculture account for a very small percentage. Even though Ha Tinh provice issued many preferential and support policies for investment in these fields but obtained results are still limited It is difficult for development of support industry, agriculture, trade, tourism and service based on the province’s potential and strength due to the lack of investment projects. Due to the above reasons, the author chooses“Improving strategy of marketing places in attracting investment to fill up industrial zones in Ha Tinh province in the recent period” as the doctoral thesis’s topic. 2. Research objectives, tasks, and questions 2.1. Objectives Applying the principles of management strategy of marketing places to evaluate the reality and provide solutions of theoretical and practical grounds to improve the structure and contents of marketing place strategy for attracting investment to fill up current IZs in local province with Ha Tinh as a case study. 2.2. Research objectives Firstly, systemizing basic theories about marketing places and strategy of marketing places in attracting investment to fill up IZs in one locality (province, municipality) in our country Secondly, analyzing and evaluating the reality and strategy of marketing places in attracting investment to fill up IZs in Ha Tinh Thirdly, proposing several viewpoints and solutions to improve marketing place strategy in attracting investment to fill up IZs in Ha Tinh through 2020 2.3. Research questions What are the concepts, model, and contents of strategy of marketing places in attracting invesment to fill up local IZs? What are the current situation and issues regarding the investment requirements to fill up local IZs in general and Ha Tinh in particular? What is the current situation of the strategy of marketing places and evaluation of the efficiency of the strategy of marketing places in attracting investment to fill up in IZs in Ha Tinh? What are required viewpoints and solutions to improve the strategy of marketing places in attracting investment to fill up current IZs in Ha Tinh in particular and other localities in our country in general? What is the difference between marketing places to attract investment into industrial zones and to attract investment to fill up industrial znes? What are differences in products of marketing places and investment environment of localities? How are the quality and value from a strategy of diverting foreign investors be evaluated? What are factors in the strategy of marketing places? How are IZs in Ha Tinh evaluated in the eye of foreign investors, managers of foreign direct investment, local investors and local authorities? 3. Research objectives, tasks, and questions 3.1. Objectives Theoretical and practical issues of strategy of marketing places in attracting investment to fill up IZs in Ha Tinh Research viewpoints: From the perspectives of the main subject of strategic management of socioeconomic development strategy and strategy of marketing places; of local authorities in general and local state agencies in particular in relation with socioeconomic communities in Ha Tinh 3.2. Scope Impact objects: Impact objects of marketing places are mainly current and potential investor in the fields of foreign direct investment (FDI) and domestic direct investment (DDI). In terms of scope: The thesis studies IZs in Ha Tinh and compares with other localities In terms of time: The thesis studies from 2007 until now through 2023 with vision to 2030 4. Research methodology Firstly, the thesis uses secondary documents from statistical data, reports of People’s Committee and Provincial Party Committee, Department of Planning and Investment, Finance Department, Management Boards of Economic Zones (IZ) and investors in Ha Tinh for analysis. The thesis also used published results of studies, theses, and articles of local and foreign authors Secondly, sociological survey and collection of primary data: The author carries out sociological survey with suitable survey objects at strategic level, including: investors that invested or intend to invest in IZs and EZs in Ha Tinh, management executives in Ha Tinh IZs and EZs. The random sampling method with system sample selection and minimum sample size are used Sample representativeness stands at 10% for enterprises in IZs. Based on obtained results, the author uses the SPSS software to process information and analyzes opinions about the strategy of marketing places in attracting investment to fill up IZs and EZs in Ha Tinh in the current period 5. Overview of studies related to the thesis topic 5.1. International studies Stufy of Philip Kotler[55]: Considered the “father” of modern marketing, PhilipKotler is also the first person to use the term of marketing places Study of H.Brossard [53] In his study, H.Brossard especially paid attention to foreign investor behavior, investment policies and local promotion program for foreign investors (they are variables of mixed marketing places) Study of Seppo K.Nairisto [59] This study focuses on the following main points: identifying and categorizing sucess factors of maketing places; affirming the role of positioning and repositioning. Study of Francois Parvex [54] The study called “Territorial Marketing: When Places become products” clarified how marketing places came into existence and distingushing marketing places in narrow sense and broad sense 5.2. Local studies * Studies on FDI attraction into IZs Tran Ngoc Hung: “Solutions to improve and develop IZs in Vietnam”, Doctoral thesis, 2004 * Marketing works Pham Cong Toan: “Territorial marketing with investment attraction in Thai Nguyen province”, 2010 Nguyen Duc Hai : “Territorial marketing to attract foreign direct investment in Hanoi”, 2013 provision information of investment environment and policies, commitment of the local government, and support in premise clearance The local goverment includes the local administrative team and officers in EZs and IZs 2.3.4. About the experience of investors with local people Even though local people have certain awareness in cooperating to attract investment into the province, the quality of human resources in Ha Tinh has not been considered highly. Even though Ha Tinh has plenty of unskilled labour, only a small amount has proper training and it is difficult to find labour with suitable qualification. One reason for this is because young people tend to find education and employment in big cities rather than come back to the province to work The local government should consider attracting labour to work in the province or attract highquality human resource from neighboring provinces 2.3.5 About the efficiency of target market promotion strategy 2.2.6 About the strategy of marketing channel for target investors 2.3.7. Message and combined investment promotion Ha Tinh has yet had any official message in investment promotion or programs about creating such message Promotion programs are mainly done to target several groups of investor 2.3.8 About development of organization and strategy of marketing places A marketing places strategy is marketoriented and feasible only if there exsists suitable development organization based on strategic compatibility 2.3.9 About the overall efficiency of strategy of marketing places 2.3.10 Verifying the relation and contribution of strategic structure components on the overall efficienct of marketing places strategy Multiple linear regressions are often used to test the relationship and importance between independent variables and dependent variables to interpret causal theory Besides its function as a descriptive tool, it is also used to identify hypotheses and projections of research populations. This study examines the multiple regression model including 5 independent variables and one dependent variable mentioned above; in addition, there is also the product factor local geodiversity which is comprised of 4 components. Therefore, to see the contribution level of component elements clearer, the model of multiple regression regression will be examined 2.4. Some conclusions and general evaluation of the overall efficiency of strategy of marketing places 2.4.1. Contribution of structures and tools of current strategy of marketing places t ại 2.4.2 Main achievements and strength of strategy of marketing places in Ha Tinh Paying attention and implementing relatively well the development of mechanism and policies to attract investment in IZs with attractive preferential treatment, administrative and investment procedure reform Showing effort in improving state management for investment project (streamined procedures, shortened time for answering investor) Having effort and certain results in preparing infrastructure for investment and business; through that gradually increasing the attractiveness of place products. Carrying out mixed media and investment promotion in an increasingly professional manner, especially after enviornment issues to help stablize the mindset and businessproduction activities of investors and local people as well as strictly handle environmental issues Step by step establishing and stablizing the structure and operation of marketing places (despite being in the nonofficial phase), creating the basis for implementing strategy of marketing places in attracting investment to fill up IZs 2.4.3. Shortcomings and reason for such shortcomings Here are some main shortcomings in the strategy of marketing places in Ha Tinh: No systematic, sysnchronized plannting of component factors of strategy of marketing places Strategy of marketing places has not directed the target market and investors as evidenced by the lack of interest in the structure of target marketing strategy and low efficiency Strategy of marketing places does not base on the value supply process for target investors; it still focuses on promotion and selling of physical location product Strategy of marketing places has not based on official organizations of marketing places that are appropriate and capable of implementing and developing strategy in the context of volative investment market Competitiveness (in human resources, competitive tools, marketing competence) is weak compared to competitors (other provinces) in both absolute and relative aspects. The main reasons gor these shortcomings are: Objective reason: the natural geographic position is not the central region; it is not in the area of growth dynamics; scale (area and population) is not large, the province was separated from other localities not long ago; IZs develop too fast and in large quantity while supply and ability to attract, absorb and invest are limited Subject reasons are mainly as follows: Firstly, local marketing in order to attract investment is a new theory and applicatin in Vietnam and Ha Tinh Secondly, in attracting investment, especially attracting foreign investors, provincial leaders have not considered local marketing as a integrrated management function its organization and human resource is combined Thirdly, in terms of knowledge thinking and practice of local marketing, it is for the short term and has not been performed as its nature Fourthly, the provincial state management apparatus has not yet planned a strategy to attract investment in general, not to mention "filling in the IZ" but only at the "general guidelines and orientation”. Without this strategy, the local marketing strategy does not have a strategic goal, orientation, and a focus point. A complete and feasible local marketing strategy must be implemented after the economic and business strategy Fifthly, without a direction, guidance, orientation of the central state, there is no national marketing strategy to attract investment in general and especially the FDI sector Chapter 3 SOME SOLUTIONS TO IMPROVE MARKETING PLACE STRATEGY IN ATTRACTING INVESTMENT TO FILL UP IZs IN HA TINH THROUGH 2023 WITH VISION TO 2030 3.1. Context and viewpoints to improve strategy of marketing places in attracting investment to fill up IZs in Tinh through 2023 with vision to 2030 3.1.1. Development orientations of IZs in Vietnam It can be confirmed that the development of IZs and Ezs with fixed geographical boundaries and preferential mechanisms and policies for invesment has helped bring into play advantages of geo economy and created favorable conditions to apply streamlined ahdministrative procedures; from that attractive investment locations are created, which contribute to the reform of investment and business environment in Vietnam. Before the existence of IZ and EZ models, it took a lot of time for investiors, especially foreign ones, in the invesment preparation process for such reasons as: clearance was not yet ready, technical infrastructure at the investment location was not available As of now, investment preparation time has been significantly shortened because IZs and EZs can actively prepare clean land fund At the same time, there are more advantages in compensation and site clearance in IZs and EZs than in outsides areas because their plannings have been approved before land is granteds to investors. In addition, a number of technical facilities of IZs and EZs such as roads, wastewater collection systems have been invested before investors enter production and business. 3.1.2. Preferential areas for investment into IZs in Ha Tinh through 2023 with vision to 2030 3.1.2.1. Priotized industries for development in Ha Tinh According to the socioeconomic development plan up to 2023, Ha Tinh Province, the following sectors should be prioritized: Agriculture: Step up restructuring and modernizing agriculture, forestry and fishery towards centralized, sustainable production of large scale and with modern technology to increase productivity, quality and economic efficiency Industry, construction Commerce and service Ha Tinh strives to become one of the major commercial centers of the region; occupying a large market share in border trade between Vietnam and Laos and Northeastern Thai provinces; to build Vung Ang Son Duong port into a cargo transshipment port for commercial, transport and logistic development, contributing to the province's economic development 3.1.2.2. Priotized areas in attracting invesment into IZs in Ha Tinh Industry Infrastructure Commerce, service, and tourism Agriculture Environment 3.1.3. Viewpoints of improving strategy of marketing places in attracting investment to fill up IZs in Ha Tinh through 2023 with vision to 2030 Viewpoint 1: Improving strategy of marketing places need to ensure attracting investment in line with socioeconomic, industrial development programs Viewpoint 2: Improving strategy of marketing places need to associated filling up IZs with improving the attractiveness of investment destination in Ha Tinh compared to other local and regional competitors Viewpoint 3: Improving strategy of marketing places must cosely link the goal of filling up IZs with managing and utilizing investment effectively Viewpoint 4: Improving strategy of marketing places must ensure attracting “green” investment for sustainable economic development in Ha Tinh 3.2. Group of solutions to improve the structure of strategy of marketing places in attracting investment to fill up IZs in Ha Tinh 3.2.1. Improving the strategy of targer marketing places Have orientation to diversify mobilize resources for investment in infrastructure development; to soon build Vung Ang economic zone into a dynamic and national economic zone; focus on attracting investment in Cau Treo International Border Gate Economic Zone; attract projects to fill two industrial parks: Ha Vang, Gia Lach and industrial clusters in the province. Rapidly develope environmentally friendly and supporting industries; to develop agriculture, trade, tourism and services on the basis of bringing into play the potentials and advantages of the province and regional, regional and regional links. 3.2.2. Improving target market promotion strategy 3.2.2.1 Improving the quality of place product through overcoming shortcomings and focusing on the development of existing strengths The proposal of strategic product development for Ha Tinh province should focus on adjusting the mining industry planning and construction materials production Scope for the mining industry should be limited with focus on the quality and supply capacity of investors. The quality of investors is reflected in the technology used in the exploitation and processing of raw products into refined products with greater economic value At the same time, special attention should be paid on the process and technology for industrial waste treatment in mineral exploitation and processing to limit negative impacts on the natural environment 3.2.2.2 Changing productionbusiness price/cost policies to attract potential investors Costs for production in industrial zones in the province include land rental, electricity production, domestic water, labor hire. According to published information, enterprises investing in production and business activities in Vung Ang and Cau Treo Economic Zone will enjoy many tax rates and preferential prices in the long term. Land rent is calculated by 0.8% compared to the unit price of nonagricultural land annually regulated by the Provincial People's Committee. While other cost levels are calculated according to the unit price set by the legal documents, under the law promulgated by the Vietnamese legal system 3.2.2.3. Improving public service and management in Ha Tinh a. For local state authorities in Ha Tinh Improve the quality of industrial zone development planning Focusing on synchronous implementation of solutions and on improving the quality of planning Proactively connect closely with Vietnamese counselors and embassies Havemechanisms to allow investors of industrial park infrastructure to use state budget capital Strengthen state management of investment activities Regularly inspecting and monitoring the implementation of compliance with environmental regulations b. For management boards of IZs in Ha Tinh 3.2.2.4. Some shortterm breakthrough solutions to improve the quality of target market promotion for Ha Tinh Firstly, improve quality, attractiveness, and competitiveness of place product. Specific measures are provided according to the level of importance. Secondly, carry out restructuring, change mindset, change to pricing/costing methods based on vaue and implement price/cost based on experience curve with high competitiveness according to comparative norms Thirdly, in marketing science, not only product and price but also experience of existing investors are also marketed. Fourthly, in addition to improving factors of sales promotion, the apparatus of marketing places need to build the trademark of place product and local image based on customer/investor in a timely and synchronized manner Fifthly, based on continuous improvement and upgrade, it is necessary to provide new, unique promotion strategies with high value to investors during the strategic period 3.2.3 Improving the strategy of marketing place channel, including: 3.2.3.1 Building and properly managing product distribution system The selection of appropriate investment location is a weak point in distribution of place product to investors in Ha Tinh. To overcome this shortcoming, Ha Tinh needs to build profiles of information about areas licensed for investment with characteristics and strength of each area The province should also combine media and information promotion activities to timely develiver information to investors who are interested 3.2.3.2. Improving partnership Identify partners in attracting investment capital into the locality, including: enterprises providing production support services, communication units, domestic and international nongovernmental organizations, enterprises that has invested in the locality, countries have economic cooperation with the locality Each partnership has different goal, interest and value so the locality must understand its nature to be flexible, combine and maximize provincial and supporting partners' interests. 3.2.3.3. Improving investment attraction procedures and policies Procedures for investment in industrial zones and EZs in Ha Tinh province now implement the onedoor mechanism to simplify steps in applying for investment licenses. The processing time for processing investment certificates shall not exceed 5 working days and other certificates shall not exceed 3 working days from the date of receiving complete and valid dossiers. This is an improvement in the processes and policies that Ha Tinh has succeeded implemented in, reducing the risks of administrative procedures that can be created during the investor's investment process. 3.2.3.4. Main shortterm breakthrough solutions Firstly, improve state management in registered investment projects Secondly, focus on improving quality and productivity of core marketing place process that is still overlooked by the locality 3.2.4. Improving mixed media, investment promotion strategy with the following 3.2.4.1 3.2.4.1 Building image, media message and place promotion channel 3.2.4.2 Improving policies and mechanism for investment promotion 3.2.4.3 Improving management and work competency, stablizing the mindset of local people to attract invest via the human factor 3.2.4.4. Renovating methods and improve service quality One: changing from passive selling method – waiting for customer to actively carrying out promotion activities – searching and attrating the right customer Two: changing from selling physical investment location to selling investment destination mix (SIVA method) Three: improving the quality of selling service for investment destination product, not only in technical quality but also in function, positioning and relation Four: changing from tradional promotion method (investment promotion conference and delegation) to online methods via investment promotion portal and/or social media 3.3. Group of factors to improve implementation, resources and competence of strategy of marketing places in Ha Tinh Main solutions are: 3.3.1. .Implementing marketing placess perform the function and strategic management role of marketingstrategy First of all, it is necessary to give priority to building and developing local marketing organizations to attract formally investment in both FDI and DDI with specialized and parttime huamn resource combination 3.3.2 Building reasonable budget for srategy of marketing places In order to attract investors, Ha Tinh province offers big preferential policies on corporate income tax, VAT, land rent These preferential supports have partly reduced the local budget revenue. Although the budget revenue is limited by the province's preferential programs for investors during the previous implementation period, Ha Tinh has also set aside a budget for the local marketing strategy. The disadvantage of Ha Tinh is that it has not yet planned specific expenses for communication activities according to each item, each structure. 3.3.3 Developing and improve the quality of human resources for marketing places This is an important breakthrough solution with the local marketing management apparatus by upgrading the qualifications and quality of local marketing human resources by: basic training and advanced training through suitable and quality training programs and trainers for groups of individuals: CEOs, marketing directors, middle managers, and relevant local marketing administrators 3.3.4. Building and developing competency of strategy of core marketing places This is a solution that is both basic and urgent: the top management system of marketing management needs to set up a framework and a roadmap to provide suitable and affordable local marketing strategy which is of high value but difficult to imitate, and ensure the capacity of the core marketing strategy with emphasis in providing different marketing strategy capabilities, while building and promoting different core marketing capabilities. 3.3.5. Building and applying database marketing In the context of Industry 4.0, which locality can grab hold of and take the lead in database marketing will have susbtainable competitive advantages Database marketing is the process of building, securing and using databases of customers / investors and other databases (products, businesses, suppliers, resellers, technology ) for contact and transaction purposes. 3.3.6 Building and developing competitive strategy of marketing places In addition to improving its capability, which cannot be done in a short period of time, Ha Tinh needs to priotize investment to improve competitiveness of dynamic marketing; this is both a situational solution and also a ne ssential solution as competitiveness for dynamic marketing is the one that is the hardest to copy but brings about the highest efficiency 3.4 Some macroproposal to improve local marketing environment to fill up industrial zones 3.4.1 Group of recommendations to the central state management agencies on attracting investment in IZs About products: Improving and improving the quality of planning IZs and EZs Regarding support services: Promote administrative reforms to provide convenient administrative services for investors, reduce the focal point of state management on EZ Regarding prices: Develop attractive investment attraction policies with international competitiveness, develop special investment incentives for strategic investors, invest in infrastructure and investment into high technology or investment in ecoindustrial parks About distribution channels: Consider investors, international organizations, consulates as connecting points with potential investors About people: it is necessary to have appropriate and special training programs, and foreign language training about the process, professional and working attitude with foreign investors to ensure each staff that work with the people and enterprises represent the positive face of Ha Tinh in the investors' assessment 3.4.2 Groups of solutions to social groups (organization, assocations) Play the role of representing businesses, voicing the voice of enterprises and working with local authorities to build the best business support policies There should be direct communication channels to the Management Boards of the IPs, to the Department of Planning and Investment and to the Provincial People's Committee to strengthen links and effective cooperation between businesses and local authorities They can also advise the government to select investors, select attractive sectors and industries and be consistent with the direction of sustainable local socioeconomic development Be proactive in connecting with organizations and enterprises in the field in other localities and countries’ act as a place to provide information and share investment opportunities with businesses in other areas as they seek investment opportunities. CONCLUSION It can be confirmed that Ha Tinh is one of provinces in the center region that attracts investors Attracting investment to develop IZs, EZs is the longterm strategic development strategy that helps improve the status and potential of Ha Tinh In the wake of hot environmental issues in attracting investment and operations in IZs and EZs in Ha Tinh, contents presented in this thesis apply the viewpoints of attracting investors for sustainable development and propose several marketing solutions to ensure achieving this goal Hopefully these solutions will be implemented to make sure that Ha Tinh can achieve breakthroughs in administrative reform, create an investment environment and regional links to ensure smooth operation and support investors in effective operation. Through that, companies in Ha Tinh can find their own direction to direct investment to new production fields, focus on deep processing to create better economic value and contribute more to socioeconomic development of Ha Tinh in particular and the center region and whole nation in general. ... of the strategy of marketing places in attracting investment to fill up industrial zones in Ha Tinh province in the past period Fifthly, the thesis proposes viewpoints and solutions to improve ... What is the current situation of the strategy of marketing places and evaluation of the efficiency of the strategy of marketing places in attracting investment to fill up in IZs in Ha Tinh? What are ... Fifthly, the thesis proposes viewpoints and solutions to improve the strategy of marketing places in attracting investment to fill up industrial zones and economic zones in the coming time; they are in line with the characteristics of investment