The dissertation aims to build theoretical and practical grounds on developing marketing strategies in the new market conditions which are adaptable to changes in the environment and market (customers, competition) in order to bring about orientations, views, goals and solutions with strong theoretical and practical foundations to develop marketing strategies for Vietnam’s retail supermarket chains located in Hanoi by 2023, vision 2030.
1 INTRODUCTION 1. Rationale Retail market in general and business activities in supermarket systems in Vietnam in particular have witnessed considerable changes in recent years At present the ratio of ultimate spending in GDP in Vietnam is over 70% higher than the rate of regional countries with 55.9% in Singapore, 58.2% in Malaysia and 67.7% in Thailand. Growth potential and attractiveness of Vietnam retail market, especially in big cities like Hanoi or Hochiminh city, have drawn lots of research on business opportunities; accordingly enterprises, retail organizations, supermarkets are supposed to change their management modes, renovate procedures and approaches of serving, invest in technology to meet the demand of customers. Besides, as competition has become more fierce and severe in the context of trade liberalization, that domestic enterprises can come up with new operation modes with appropriate marketing strategies so as to effectively exploit competitive advantages becomes urgent. As there will be lots of unexpected fluctuations in the retail market in the future, a study on theories and reality to build up a research model and plan strategic development solutions for retail businesses in general and retail supermarket chains in particular is very necessary. Especially for Vietnam retail supermarket chains – a newlydeveloped business model, scientific analysis of which marketing strategic structures are general for the chains, which structures are particular for each chain member and how retail supermarket chains should build their marketing strategic competency becomes ever more essential. Under the pressure of modern retail styles in the same distribution system with the presence of foreign enterprises (such as the supermarket of the worldfamous retail groups); in face of challenges resulting from the impacts of macroeconomic environment, it is becoming imperative to research marketing strategies of Vietnam retail supermarket chains With these approaches, the dissertation titled “Developing Marketing Strategies for Vietnam Retail Supermarket Chains in Hanoi” was chosen as the subject for her PhD dissertation with a view to further developing their business activities and enhancing effectivenes of supermarket chains in the national distribution system 2. Research objectives and tasks 2.1. Research objectives The dissertation aims to build theoretical and practical grounds on developing marketing strategies in the new market conditions which are adaptable to changes in the environment and market (customers, competition) in order to bring about orientations, views, goals and solutions with strong theoretical and practical foundations to develop marketing strategies for Vietnam’s retail supermarket chains located in Hanoi by 2023, vision 2030 2.2. Research tasks Generalizing fundamental theoretical subject matters to establish the content, build theoretical hypotheses and models to develop marketing strategies for Vietnam’s retail supermarket chains located in big cities Testing and establishing models and measurements of the development of marketing strategies for retail supermarket chains suitable for Hanoi retail market and environment; evaluating the development of marketing strategies of Vietnam’s retail supermarket chains located in Hanoi in recent time Proposing views and solutions to develop marketing strategies for Vietnam’s retail supermarket chains located in Hanoi to ensure the adaptability, balance, enhance strategic capacity and sustainable marketing competitiveness of retail supermarket chains in the market 3. Research methods Quantitative method is used to test and establish model and measurement scales Statistical analysis method is used to analyze secondary data related to the research Descriptive statistical method is used to describe the situation of marketing strategy development of some typical retail supermarket chains and the situation of marketing strategy development of some Vietnam’s retail supermarket chains located in Hanoi market Comparative method is used to compare independent retail supermarket chains, other retail store chains, Saigon Coop Mart SPSS 18.0 software is used to process and analyze data 4. Research subject and scope 4.1 Research subject: The development of marketing strategies of retail supermarket chains located in Hanoi from theoretical and practical approaches 4.2. Research scope In terms of content: The research is approached from strategic structure development with 6 following structures: Information management and situational analysis of marketing strategies; Strategies for segmentation and positioning; Strategies for retail market offers; Strategies for marketing channels; Strategies for promotion and retail mix; Organization, resources and core competencies for marketing strategies In terms of participants: Vietnam’s retail supermarket chains located in Hanoi with necessary and possible comparison and contrasts In terms of time: researching the situation since 2009 (when Vietnam opened its retail market) and suggesting solutions for the period to 2023, vision 2030 In terms of space: researching some Vietnam’s retail supermarket chains in operation in Hanoi market 5. Scientific and practical significance of the dissertation In terms of theory: establishing some fundamental theories on strategies and marketing strategy development in general and their applications for retail supermarket chains in particular. In terms of practice: testing theoretical models via collected primary data and establishing practical models for the development of marketing strategies for Vietnam’s retail supermarket chains that are suitable for the environment and market of Hanoi; analyzing the development of marketing strategic structures and the overall marketing strategic capacity of Vietnam’s retail supermarket chains located in Hanoi, identifying the strengths and weaknesses as well as issues arising from situation analysis In terms of research objectives: Basing on research findings to propose views, orientations and solutions to develop marketing strategies for Vietnam’s retail supermarket chains located in Hanoi, present proposals for Vietnam’s retail supermarket chains to improve their competitiveness and business performance by 2023, vision 2030 6. Overview of previous studies 6.1. Foreign studies Related to marketing and retailing in general, there are numerous books and research papers. Related to the research of this dissertation include: Principle of Marketing P.Kotler, G. Amstrong(2012), Market Segmentation and Competitive Analysis for Supermarket Retailin g (Madhav N. Segal and Ralph W. Giacobbe Southern Illinois University at Edwardsville, Illinois, USA), Marketing strategy of the supermarket((Ica maxi, Coum Forum, Netto, Lidl, Rafael Lucena Matamalas iguel Santandreu Ramos, May2009), Reinventing marketing strategy by recasting supplier/customer roles(Evert Gummesson School of Business, Stockholm University, Stockholm, Sweden, and Hannu Kuusela and Elina Na ărva ănen School of Management, University of Tampere,Tampere, Finland) These are specialized materials in marketing management and retailing, but none of the research works have ever focused on the development of marketing strategies for retail supermarket chains 6.2. Domestic studies In the past 10 years, there have been many research works and publications related to retailing, retail supermarket chains and marketing strategies of enterprises. Some distinctive works include: research by Nguyễn Hoàng Việt titled “Scientific Grounds to Develop Business Strategies for Stateowned Garment jointstock Enterprises of Vietnam after WTO entry”; research by Nguyễn Hoàng Long, Nguyễn Đức Nhuận titled “Developing Export Marketing Strategies for Vietnam Garment Enterprises to Export Products to the US Market”; research by Nguyễn Bách Khoa titled “New Forms of Retailing Organization in Vietnam’s Domestic Market”; research by Phan Thị Thu Hoài titled “Developing Target Market Positions for Supermarket Chains in Hanoi”; research by Phạm Huy Giang titled “Developing Modern Chain Distribution System for Retail Supermarket Chains in Hanoi”. These works look into the distribution system or chain distribution system, or the development of marketing strategies in other fields to introduce general theories. They all have good reference values, but so far no research work specifically investigates the development of marketing strategies for Vietnam’s retail supermarket chains. A thorough investigation into previous studies reveals that no published research work so far has studied the development of marketing strategies of Vietnam’s retail supermarket chains located in Hanoi 7. Organization of the dissertation: In addition to Introduction, Conclusion, Reference, Appendix, the dissertation consists of 3 chapters: Chapter 1: Theoretical Issues and Practical Experience on Marketing Strategy Development of Retail Supermarket Chains Chapter 2: Situation of Marketing Strategy Development in Vietnam’s Retail Supermarket Chains in Hanoi Chapter 3: Views and Solutions to Develop Marketing Strategies for Vietnam’s Retail Supermarket Chains in Hanoi by 2023 and Following Years CHAPTER 1 THEORETICAL ISSUES ON MARKETING STRATEGY DEVELOPMENT OF RETAIL SUPERMARKET CHAINS 1.1. Concept and advantages of retail supermarket chains 1.1.1. Retail supermarket chains From the concept of supermarket and distinctive features to distinguish a supermarket system organized in chain model, the concept of supermarket chains in retail can be built up as follows: Retail supermarket chains refer to a system of at least 2 retail supermarkets which have the same view and business models, the same name and operational procedures which are managed under the same orientations and centralized administrative agency. About products, these supermarkets often sell the same products with the same price levels but they can add products suitable for local market Purchasing and distribution activities of the supermarket chains are centrally organized in big scale for the whole chains 1.1.2. Competitive advantages of retail supermarket chains 1.2. Issues and contents of marketing strategy development for retail supermarket chains 1.2.1. Concepts This dissertation applies the following concepts: Marketing strategy is “a logical and compatible set of strategic goals established by integrating strategic devices and marketing sources that can be mobilized to supply values, relationships and core competencies to target customers so as to reach longterm strategic goals of an enterprise in the context of a frequentlychanging competitive market” [21] Developing marketing strategies: “Developing marketing strategies of a retail business in general and retail supermarket chains in particular represent an important content in marketing strategic management, that is the process of ‘implementing’ structure components and contents of strategies and managing the ‘compatibility’ of strategies with strategic changes from marketing environment of retail supermarket chains so as to ensure the capacity growth of marketing strategies and create development on the quality of marketing system of retail supermarket chains along the time” [64] 1.2.2. Contents of marketing strategy development for retail supermarket chains 1.2.2.1 Developing information management and analyzing marketing strategy situation. This structure consists of the following contents: Conducting research and marketing surveys to review marketing environment and identify opportunities and threats to strategies Applying tools to analyze marketing strategies (SWOT, Ansoff, GE/Mc Kisey, SPACE) Managing database systems under three pillars of marketing strategies: customers, competitors and enterprises under marketing strategy model Building, operating and exploiting marketing information system to facilitate the implementation of marketing plans. 1.2.2.2. Developing strategies for values choosing and positioning, including: Developing selection of market segments that retail supermarket chains wish to pursue Developing value proposals and establishing goals for each selected target segment Developing value positioning in the strategic market, including: (1) Developing value proposals of market offering; (2) Building competitive positioning at industry level (retail); (3) Communicating the values to target customers via customer relationship management; partner relationship management; competition and cooperation management with rivals, practicing green ocean strategies; (4) Practicing retail positioning diagrams by combining different levels of retail services 1.2.2.3. Developing strategies for retail market offering, including: Developing product strategies + Developing strategies for structuring retail products + Developing strategies for retail product quality + Developing strategies for retail product innovations Developing retail distribution service strategies + Developing strategies for structures of quality of mix retailing services + Developing strategies for retail service brands of retail supermarket chains Developing retail pricing strategies + Developing strategies for product line pricing + Developing strategies for retail pricing practice + Developing strategies for flexible and competitive pricing 1.2.2.4. Developing strategies for marketing channels, including: Implementing and adapting trade channels of retail supermarket chains to target market segments Developing organization and management of retail network – sales channels of retail supermarket chains Implementing and adapting upstream distribution channels under supply chain management principles Implementing, adapting and updating traditional distribution network based on connected computing system (LAN, WAN, Internet), EDI and applying software for inventory, order and delivery management Adapting and modernizing channels in line with changes in marketing system and retail market Implementing and reestablishing core distribution processes including: managing the process of order – payment; managing sales capacity and costs; managing service quality; managing service supply capacity; managing distribution risks. 1.2.2.5. Developing strategies for promotion and retail mix, including: Implementing marketing communication combining between advertising and sales promotions in retail supermarket chains and creating sales atmosphere and experience in sales points of subsidiaries in the chain Developing scales, frequency, quality of promotional tools in collaboration with public relations and direct marketing Implementing and adapting retail strategies which flexibly combine between “pull strategies” and “push strategies”; practicing relationship marketing and creating positive features and differentiations; establishing and developing retail uniqueness of each retail supermarket chain Implementing and modernizing sales technology of “supermarketstyled selfservice”, shifting from selling “products” to selling “customer solutions” Developing and enhancing the quality of sales representatives and sales staff, practicing sales staff management according to “teamwork” principle Implementing and adapting customer services before, during and after sales and additional services, practicing the management of “reverse feedback” from customers – consumers to constantly improve the quality and values of customer services of retail supermarket chains. Implementing plans and operating components in retail infrastructure, enhancing the quality of customerscontact staff to create reliable “physical evidence”, ensuring safety and hygiene of the retail environment 1.2.2.6 Developing the organization, resources and core competencies of marketing strategies to ensure the development of marketing strategies, including: Developing appropriate marketing organization and ensuring the capacity to implement and adapt marketing strategies Developing resources of core competencies of marketing strategies to ensure the development of marketing strategies Developing differential competencies to ensure the effective development of marketing strategies. Developing competencies to create friendly, favorable, civilized, modern image of retail supermarket chains in customer mind Developing creativity and flexible responses to raise the moving competitiveness in comparison and/or peer competition with FDI retail supermarket chains. Developing management capacity and implementing marketing strategies based on intellectual and values of CMOs and midlevel marketing managers in retail supermarket chains On the basis of these contents, a theoretical research model on marketing strategy development for retail supermarket chains can be built as shown in Figure 1.1 (Source: generalized and developed by the PhD learner) Figure 1.1: Theoretical research model on marketing strategy development for retail supermarket chains Qualitative research conducted via indepth interviews with 16 marketing strategy managers and marketing experts to adjust variables, measurement scales and generalization of observation variables helps to produce the following model and measurement scales: Independent variables: + Information management and marketing strategy situation analysis has observation variables of MIA1, MIA2, MIA3, MIA4, MIA5 + Strategies for value choosing and positioning has 6 observation variables of VCP1, VCP2, VCP3, VCP4, VCP5, VCP6 + Strategies for retail market offering has 9 observation variables of TMO1, TMO2, TNO3, TMO4, TMO5, TMO6, TMO7, TMO8, TMO9 + Strategies for marketing channels has 7 observation variables of SMC1, SMC2, SMC3, SMC4, SMC5, SMC6, SMC7 + Strategies for promotion and retail mix has 7 observation variables of PRM1, PRM2, PRM3, PRM4, PRM5, PRM6, PRM7 + Organization, resources and core competencies of marketing strategies has 5 observation variables of CMC1, CMC2, CMC3, CMC4, CMC5 Dependent variables: Developed marketing strategy proficiency has 5 observation variables of SDP1, SDP2, SDP3, SDP4, SDP5 1.2.2.7. Criteria to evaluate the output of developed marketing strategies of retail supermarket chains Group of criteria to evaluate the quality of annual marketing plans Group of criteria to quantitatively evaluate the “output” of developed marketing strategies of retail supermarket chains: growth rates of revenue, profit, market share, network expansion; indicators such as ICOR, ROI, ROS, slowmoving inventory; productivity indicators (TFP, LP) and efficiency of labor use; capital turnover indicators Group of criteria to evaluate the performance of developed marketing strategies in components and general Group of criteria to evaluate the level of marketing practice quality 1.2.4. Factors affecting marketing strategy development of retail supermarket chains 1.2.4.1. Macroenvironmental factors, including: Economic – inhabitant and socio – cultural environment 10 Institutional, legal and policy environment Forces of technology, technical science. 1.2.4.2. Retail market factors, including: Impacts of suppliers and upstream supply chains Competitors, including direct competitors in the same market segment, competitors in the same industry in the total market and potential competitors of a specific retail supermarket chain The general public The functional marketing intermediaries The barriers to retail market 1.2.4.3 International integration factors of retail market, including: The entry of foreign ‘huge’ retailers The barriers to market entry to Vietnamese products by foreign supermarkets The advantages in competitive resources of foreign supermarkets 1.2.4.4. Internal factors of retail supermarket chains, including: Positions and capacity of nonmarketing resources of retail supermarket chains General marketing resources of retail supermarket chains Factors of organization capacity of the entire enterprises 1.3. Lessons drawn for Hanoibased retail supermarket chains from experience of marketing strategy development of distinctive foreign and domestic retail supermarket chains The dissertation generalizes the experience of marketing strategy development of some distinctive retail supermarket chains such as SevenEleven (711) of Thailand, WalMart Chains, SaigonCoop mart and draw some lessons for Vietnam’s retail supermarket chains located in Hanoi: Retail supermarket chains attach great importance to marketing strategy development and have official marketing strategies It is necessary to attend to and realize customer philosophy in marketing strategies Enterprises need to come up with strategies for developing the chains in both scale and quality, develop modern retail system beyond the geographical border of big cities Supermarket chains should pay more attention to customer care services to expand customer base and enhance business performance It is necessary to meet market demand rapidly: innovating and enhancing product quality are strategies to provide new and different products from those existing in the market 15 Testing the research hypotheses based on regression model for standardized , R and p