The Marketing Strategy of Ha Anh INCOSE Co.,Ltd.doc

The Marketing Strategy of Ha Anh INCOSE Co.,Ltd.

Field Study Report

‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’

Student: Vi Nhat AnhClass: TATM CN6 A1

Hanoi, November 2009

Field Study Report

‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’

Student: Vi Nhat AnhClass: TATM CN6 A1

Supervisor: Bui Nguyet Anh M.A

Hanoi, November 2009

In the process of writing this report, I have gained a great deal in terms of projectplanning, research methodology and information acquisition But I could never have donethis work without the help and advice of many whose ability far exceeds my own Withgratitude, I acknowledge a specific debt to my supervisor, Ms Bui Nguyet Anh, for herinvaluable advice and personal guidance from the planning stage to the completion of thisreport.

My thanks also go to all my teachers at the Foreign Trade University for their devotedteaching and for introducing me to the world of knowledge during my four and a halfyears at the University Their influence will remain with me for my entire life.

I would like to thank Ha Anh INCOSE Co.,Ltd 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 theirlove, understanding and encouragement.

TABLE OF CONTENTS

INTRODUCTION .4

Chapter 1 .5

Theoretical Framework .5

1.1.The concept of marketing 5

1.1.1.The definition of marketing 5

1.1.2.The goals of marketing 7

1.3.4.Place (distribution channels) 12

1.4.The marketing mix strategies 12

Chapter 2 .14

The Marketing Strategy of Ha Anh INCOSE Co.,Ltd .14

2.1.An Introduction to Ha Anh INCOSE Co.,Ltd 14

2.1.6.Company trading results 17

2.2.The marketing strategy of Ha Anh INCOSE Co.,Ltd 17

2.2.1.SWOT analysis of Ha Anh INCOSE Co.,Ltd 17

2.3.4.Promotion 22

Chapter 3:Some Recommendationsto Improve Ha Anh INCOSE Co.,Ltd’s Marketing Strategy .24

3.1 Some recommendations to the Government and relevant authorities 24

3.2 Recommendations to Ha Anh INCOSE Co.,Ltd 24

3.2.1 Improving the company’s marketing mix 24

3.2.2 Building the company’s image 25

Conclusion .27

INTRODUCTION .1

Chapter 1: .2

Theoretical Framework .2

1.1.The concept of marketing 2

1.1.1.The definition of marketing 2

1.1.2.The goals of marketing 4

The Marketing Strategy of Ha Anh INCOSE Co.,Ltd .11

2.1.An InTroduction to Ha Anh INCOSE Co.,Ltd. .11

2.1.6.Company trading results 14

2.2.The marketing strategy of Ha Anh INCOSE Co.,Ltd .14

2.2.1.SWOT analysis of Ha Anh INCOSE Co.,Ltd 14

2.2.2.Strengths 15

2.2.3.Weaknesses 17

2.2.4.Opportunities 18

Some Recommendations to Improve Ha Anh INCOSE Co.,Ltd’s Marketing Strategy .23

3.1 Some recommendations to the Government and relevant authorities 23

3.2 Recommendations to Ha Anh INCOSE Co.,Ltd 23

3.2.1 Improving the company’s marketing mix 23

3.2.2 Building the company’s image 24

Conclusion .26

References .28

Nowadays, marketing is obviously more and more vital in the success of every enterprise.However, not many of the companies in Vietnam have paid adequate attention tomarketing activities, especially when both domestic and global competition is gettingfiercer and fiercer

Being one of the companies specializing in Production line and equipment for foodstuffindustry, mechanical engineering, construction machinery in Vietnam, Ha AnhInternational Commercial Services Company Limited (HA ANH INCOSE CO.,Ltd) hasachieved certain successes in this field Its sales of line and equipment for foodstuffindustry have increased over the years since its establishment After taking a close look atHA ANH INCOSE CO.,Ltd’ s performance, I decided to choose “Marketing strategies ofHa Anh International Commercial Services Company Limited” as the topic for my fieldstudy report with a view to examining Ha Anh International Commercial ServicesCompany Limited’s marketing strategy and making some recommendations to improveit.

Ha Anh International Commercial Services Company Limited has a lot of businessactivities, but because of limited time, this report focuses only on the company’smarketing activities for one line of its business, that is line and equipment for foodstuffindustry, on the market in Vietnam.

Apart from the introduction and conclusion, the report is divided into 3 chapters asfollows:

Chapter 1: Theoretical Framework

Chapter 2: Marketing strategies of Ha Anh INCOSE Co.,Ltd

Chapter 3: Some Recommendations to Improve Ha Anh International CommercialServices Company Limited’s Marketing Strategy

If forced to define marketing, most people, including some business managers, say thatmarketing 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 beunderstood not in the old sense of marketing a sale-“telling and selling”-but in the newsense of satisfying customer needs Selling occurs only after a product is produced In contrast, marketing starts long before a company has a product “Marketing is thehomework that managers undertake to assess needs, measure their extent and intensityand determine whether a profitable opportunity exists Marketing continues throughoutthe product’s life, trying to find new customers and keep current customers by improvingproduct appearance and performance, learning from product sales results and managingperformance”1 So what does the term “marketing” mean? Actually, there is no single anduniversally agreed definition of marketing The American Marketing Association definedmarketing “is the process of planning and executing the conception, pricing, promotionand 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 InternationalMarketing” had another definition as follow: “Marketing is the process by whichdecisions are made in a totally interrelated changing business environment on all theactivities that facilitate exchange in order that the targeted group of customers is satisfiedand the defined objectives accomplished ”3

.Though there are many definitions, a centralpart of any definitions of marketing is the exchange process – the process of givingsomething of value in return for something of value Or in other words, it’s the process oftransferring between two or more parties of tangible or intangible items of value(seefigure 1.1).

Cash, debt, time, votes, behavior, etc

Health, safety, comfort, transportation, beauty, productivity, etc.Figure 1.1: the exchange process

Source: Courtland L Bovee, Jonh V Thill , “Marketing”, 2nd edition, p.6.

For marketing to occur, at least four factors are required: (1) two or more parties withunmet needs, (2) a desire and ability to satisfy them, (3) communication between the _

1

Amber, T.and Styles, C.(2000), The Silk Road to International Marketing, Harlow: FT Prentice Hall

Arch G Woodside(1990), Outdoor advertising as experiments, Journal of the Academy of Marketing science.

3 Berkkowitz, Kerin, Hartley, Rudelius, (1990), Marketing, 2nd edition, Irwin McGrawHill.

MarketerGoods, Services, ideas, People and Places

MarketerGoods, Services, ideas, People and Places

CustomersWants and needs.

parties, and (4) something to exchange4 Here’s what Berkowitz stated in his book“Marketing” As marketing is a kind if exchange, certain conditions must exist before theexchange can occur.

1.1.2 The goals of marketing.

“Today’s successful companies at all levels have one thing in common; their success isfounded upon a strong customer focus and heavy commitment to marketing”5 Theymotivate everyone in the organization to deliver high quality and superior value for theircustomers, leading to high levels of customer satisfaction These organizations know thatif they take care of their customers, market share and profits will follow Creatingcustomer values and satisfaction is at the very heart of modern marketing thinking andpractice 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 increating more values for customers than its competitors can do, that company is said toenjoy competitive advantage in an industry.

1.2 Competitive Analysis

It is the increasingly emerging markets that have created favorable conditions for therapid development of world trade and investment, which is well – manifested in thesophisticated growth of a number of global companies To compete in one or moreforeign markets, companies not only need to broaden relentlessly their sources ofcompetitive position One particularly useful technique in analyzing a firm’s competitiveposition relative to its competitors is SWOT (strengths Weaknesses, opportunities, andthreats) analysis aims to isolate the key issues that will be important to the future of thefirm and that will be addressed by subsequent marketing strategy A SWOT analysisdivides the information into two main categories (internal factors and external factors) _

4Courtland L Bovee, Jonh V Thill, (2000), “Marketing”, 2nd edition

5

Crag, C.S and Douglas, S.P (2000), International Marketing Research, Chichester: Wiley

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 theirimpact on the firm’s positions; i.e., they may represent strength for one firm but aweakness, in relative 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 opportunitiesto another, include technological changes, legislation, socio-cultural differences, andchange in the market place or competitive position.

1.3 Global Marketing Strategy

In terms of globalization, worldwide businesses use global marketing when they take thesame or similar approach or content for one or more elements of the marketing mix, thatis, the same or similar brand 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 ofmarketing more global and others less so Accordingly, possible adaptations that firmsmight apply to their product, promotion, price, and place when they enter through theforeign markets will be provided in this part.

modification But it can be costly in the long run if products fail to satisfy foreignconsumers.

Table 1.1: Five international product and promotion strategies

Straight extension Product

adaptation ProductinventionAdaptation

promotion

Dual adaptation

Source: Subhash C.Jain (1995), international marketing management

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, acountry 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 beadapted to local superstitions or beliefs, too.

Product invention consists of creasing something new the foreign market It can bedivided into two forms The first is backward invention, which means reintroducingearlier 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.6

1.3.2 Promotion

Companies can either adopt the same promotion strategy they used in home market orchange it to suit each local market Although some global companies use a standardizedpromotion campaign changes might be needed to comply with local regulations andreferences There are four different levels of adapting promotion strategy.

6Subhash C.Jain (1995), International Marketing Management

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.Also, names and slogan may have to be modified in some countries Secondly,companies may use the same name globally but adapt the copy to each local market.Thirdly, companies can develop a global pool of advertising from which each countryselects the most appropriate one Finally, some companies allow managers to create aspecific advertisement – within guidelines, of course.

Other companies follow a strategy of communication adapting their advertising messageswithout any product change Although it retains the scale economy on the manufacturingside the firm sacrifices potential saving on the communication way Another strategy isdual adaptation It is changing both the product and the communication to face localdifferences.

1.3.3 Price

Global companies face several problems in setting their international prices Thoseproblems must be dealt with price escalation, transfer prices, dumping charges, and blackmarkets.

Price escalation problem occurs when companies sell their goods abroad The foreignprices probably will be higher than their domestic ones because it must add the cost oftransportation, tariffs, importer margin, wholesaler margin, and retailer margin.Depending on these added costs, the product may have to sell for two to five times asmuch as in another country to generate the same profit Since cost escalation varies fromcountry, companies have three price setting approaches in different countries.

Setting a uniform price everywhere: charging the same price everywhere in the world Bythis method, companies would have quite different prices in different countries becauseof varying escalation costs Also, this strategy would result in too high price in poorcountries and not high enough in rich countries.

Setting a market-based price in each country: charging what each country could afford.But this strategy ignores differences in the actual costs from country to country Inaddition, 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 standardmarkup of its costs everywhere But this strategy might price out of the market incountries where costs are high.

Another problem arises when a company sets a transfer price (i.e., the price that itcharges to another unit in the company) for goods that it ships to its foreign subsidiaries.If a company charges too high a price to a subsidiary, it may end up paying higher tariffduties, even while paying lower income taxes in that country If company charges itssubsidiary too little, it can be charged with dumping Dumping occurs when a companycharges either less than it costs or less than it charges in its home market, in order to enteror win a market.7 Various governments are watching for abuses and often forcecompanies to charge the arm’s-length price – that is, the price charged by othercompetitors for the same or a similar product.

Global companies also face the black-market problem A black market means the sameproduct is sold at different prices geographically Dealers in the lower-price country findways to sell some of their products in higher-price countries, thus earning more.8 Veryoften a company finds some distributors buying more than they can sell in their owncountry and reshipping goods to another country to take advantage if there are pricedifferences Multinationals try to prevent black market by policing the distributors, byraising their prices to lower-cost distributors, or by altering the product characteristics orservice warranties for different countries.

Moreover, one challenge of global pricing in recent years is that countries withovercapacity, cheap currencies, and the need to export aggressively have pushed pricesdown and devalued their currencies For multinational firms this poses great difficulties.Sluggish demand and reluctance to pay higher price make selling in these emergingmarkets harder Instead of lowering prices, and taking a loss, some multinationals havefound more lucrative and creative means to deal with this problem.

7 Keegan, Warren J.(1995), Multinational Marketing Management

8

Kotler, Philip(2000), Marketing Management.

1.3.4 Place (distribution channels)

Global companies must take a whole-channel view of the problem of distributingproducts to final consumers Figure 1.2 show the three major links between the seller andthe ultimate user In the first link, seller’s international marketing headquarters the exportdepartment or international division makes decisions on channels and other marketing-mix element.9 The second link, channels between nations, maces the products to theborders of the foreign nations.10 The decisions made in this link include the types onintermediaries (agents, trading companies) that will be used, the type of transportation(air, sea), and the financing and risk arrangements The third link, channels within foreignnations, moves the products from their foreign entry point to final consumers.11

Channels of distribution within countries vary greatly from nation to nation first, thereare large differences in the numbers and types of intermediaries serving each foreignmarket Long channels of distribution means that the consumer’s price ends up double ortriple the importer’s price Another difference lies in the size and character of retail unitsabroad Breaking bulk remains an important function of intermediaries and helpsperpetuate the long channels of distribution, which is a major obstacle to the expansion oflarge-scale retailing in developing countries.

1.4 The marketing mix strategies

Philip Kotler, in his book “Principles of Marketing”; defines marketing mix as “the set ofcontrollable tactical marketing tools – product, price, place and promotion – that the firmblends to produce the response it wants in the target market”12 These ingredients must bemanipulated in a manner which ensures targeted customers are satisfied, marketingstrategies are implemented and desired brand positioning is achieved.

9,10,11

Charlers Hill(1997), International Business

12 Philip Kotler, Gery Armstrong, John Saunders, Veronica Wong, principles of Marketing, 2nd edition,p.97

Figure 1.2: whole-channel concept for international marketing.

Source: Chatles Hill(1997), international BusinessSeller’s international

Marketing headquarters

Channels betweennations

Channel within foreignnations

Ultimate buyers

Chapter 2

2.1 An Introduction to Ha Anh INCOSE Co.,Ltd2.1.1 Company development

Ha Anh INCOSE Co.,Ltd was founded on 24th March 2006 Ha Anh INCOSE Co.,Ltd’sheadquarters was located at 22 Alley 72/124, Hoang Ngan, Cau Giay, Ha Noi It has 4branches and plants nationwide in Ha Noi, Nghe An, Da Nang and Ho Chi Minh city, anda network of distributors around the country Since its establishment, Ha Anh INCOSECo.,Ltd has operated in various fields: Production line and equipment for foodstuffindustry, mechanical engineering, constructions, fiduciary agent import and export forevery company in Viet Nam Medical and technical equipment and machinery;Construction machinery and materials and equipment of its own.

After two years of operation, Ha Anh INCOSE Co.,Ltd expanded into other areas such asinformation services, supplying and assembling for food machinary and other equipment.

2.1.2 Company’s products

Ha Anh INCOSE Co.,Ltd specializes in selling the following:

Production line and equipment for foodstuff industry such as: Juice Machinery, Foodpackaging machinery, Food ration packing equipment, Canning machinery, Food productline etc

mechanical engineering, constructions fiduciary agent import and export for everycompany in Viet Nam.

Construction machinery and materials and equipment of its own and other electronicproducts.

Besides, Ha Anh INCOSE Co.,Ltd also provide other services such as maintenance formedical and technical equipment