Implementing marketing mix for logistics services of DHB logistics CO , LTD

INTRODUCTION Logistics activities make an important contribution to the distribution of goods from production to consumers and also a "global commercial bridge" Today's logistics activities are not only associated with warehousing, freight forwarding, but also planning, arranging raw flow, materials from suppliers to manufacturers, then moving goods from production stage to the final consumer, creating interconnection in the whole society according to optimization plans, reducing the cost of rotation and storage After years of Vietnam joining WTO, the market of Vietnam's logistics services has seen positive changes with the number of enterprises operating in the industry growing fast and having high growth rates If we look at the pace of trade development in our country, which is also the development target of logistics service industry, we will see import and export turnover increase by 1.86 times, the domestic retail market will increase by 20- on average 25% per year and as a result, the logistics service sector also increased by 20-25% per year However, according to statistics, Vietnam logistics companies only operate in domestic or some regional countries, and mainly act as agents or undertake each stage for international logistics enterprises Meanwhile, foreign companies (about 25 multinational companies, accounting for 70-80% market share of logistics services in Vietnam) with a range of activities in nearly 100 different countries This is one of the obstacles for Vietnamese enterprises to provide package services to customers Because, in the trend of globalization, shippers tend to outsource from many countries and territories around the world Although it may take into account the role of agents established by Vietnamese companies in other countries, this relationship is often quite loose and heterogeneous These are the basic reasons that make the competitiveness of Vietnamese logistics enterprises far below the current foreign enterprises, only undertakes a number of single services in logistics operations such as customs clearance, transportation vehicles, warehouses, etc In the context when Vietnam's import and export activities are growing, domestic trade is expanding and the demand for logistics services increases, this is an issue that needs special attention and overcome to limiting the loss on the domestic market for the sector considered the importance service sector of the economy, not only bringing great benefits to the country but also playing an important role in renovating the current growth and economic restructuring model For all of the above reasons, it is very important to develop successfully in Logistic field at Vietnam market for DHB Logistics Co., LTD, which not only contributes to the development and enhancement of economic performance jointly, create a source for the company, but also create a premise for expanding the logistics activities of the company to other markets Therefore, it is necessary to have an overall view of the marketing environment from which to develop solutions to improve the marketing strategy, help improve the efficiency of logistics business That is also the reason for the research: IMPLEMENTING MARKETING MIX FOR LOGISTICS SERVICES OF DHB LOGISTICS CO., LTD Research question What factors influence marketing strategy of DHB Logistics Co.,Ltd? How to develop a marketing strategy for DHB Logistics Co.,Ltd ? Contribution of Research - Researching the theory of marketing concept, mixed marketing strategy and how to formulate marketing strategy - Analyzing the business situation of the company in 2013 - 2018 - SWOT analysis to propose company strategies that need to be implemented first Develop Marketing Mix strategy for Logistics activities Methodology Methods for processing and analyzing data: - For secondary data and primary data in qualitative research: Using inductive method, synthetic analysis method, comparing collected results for research through SWOT matrix tool SWOT analysis method to identify market needs and volatility to determine characteristics of target customers - For primary data in quantitative research: All collected data will be processed with the help of the MOS EXCEL 2010 software Scope of the research - Space: Main business activities of DHB Logistics Co.,LTD: Customs clearance, Warehouse leasing, Sea transport, Air freight forwarding, Domestic container transportation, Multilateral transport awake - Time: analysis time from 2013 to 2018 Structure In addition to the Introduction and Conclusion, the thesis composition consists of three main chapters as follows: CHAPTER 1: LITERATURE REVIEW OF MARKETING MIX FOR LOGISTICS SERVICE CHAPTER 2: BACKGROUND OF DHB LOGISTICS CO.,LTD CHAPTER 3: SOLUTIONS TO COMPLETE MARKETING STRATEGY FOR LOGISTICS SERVICES CHAPTER 1: LITERATURE REVIEW OF MARKETING MIX FOR LOGISTICS SERVICE 1.1 Definition of Marketing mix In the behavioral sciences, Marketing is one of the youngest industries The appearance of Marketing only started in the 1990s, can generalize the development process of Marketing into two periods: (1) the period from the beginning of the 20th century to the early 1960s and (2) the period from the 1960s to the beginning of the 21st century Marketing comes from an English term "market." The term "marketing" was first used in 1902 on the lecture hall of Michigan State University in the US In 1910, all General Universities An important case in the United States began teaching Marketing, and for nearly half a century, Marketing was taught only in English-speaking countries, but only after the world economic crisis (1929 1932) and especially after the Second World War (1941-1945), marketing activities have made great leaps, strongly developed to really become a popular scientific field like today In the 50s and 60s Marketing was spread to Western Europe and Japan, to Eastern European countries in the 60s and 70s, to Vietnam in the 80s of the twentieth century The internationalization process of Marketing has grown very fast Today, almost all countries in America, Europe, Asia, Australia, Africa have taught and applied Marketing in production and business effectively As Philip Kotler explains in his book Marketing Management: “Marketing is an administrative and social process through which individuals and groups obtain what they need and desire by the generation, offering and exchange of valuable products with their equals” Marketing research, conducted for the purpose of new product development or product improvement, is often concerned with identifying the consumer's unmet needs Customer needs are central to market segmentation which is concerned with dividing markets into distinct groups of buyers on the basis of "distinct needs, characteristics, or behaviors who might require separate products or marketing mixes." Needs-based segmentation (also known as benefit segmentation) "places the customers' desires at the forefront of how a company designs and markets products or services." Although needs-based segmentation is difficult to in practice, it has been proved to be one of the most effective ways to segment a market In addition, a great deal of advertising and promotion is designed to show how a given product's benefits meet the customer's needs, wants or expectations in a unique way The marketing mix (also known as the Ps) is a foundation model It has been defined as the "set of marketing tools that the firm uses to pursue its marketing objectives in the target market" Therefore, it refers to four broad levels of marketing decision, namely: product, price, promotion, and place Marketing practice has been occurring for millennia, but marketing theory emerged in the early twentieth century The contemporary marketing mix, or the Ps, which has become the dominant framework for marketing management decisions, was first published in 1960 In services marketing, an extended marketing mix is used, typically comprising Ps, made up of the original Ps extended by process, people, and physical evidence Occasionally service marketers will refer to Ps, comprising these Ps plus performance 1.2 The importance of Marketing mix 1.2.1 The necessity of developing marketing MIX  It helps in a clean mix creation Your marketing mix should have all the P’s compatible with each other The price should be compatible with the placement of the product The product should be compatible with the promotions In general, all the P’s are intrinsically linked to each other As a result, when you are making a marketing mix, it becomes a chain of strong bonds And these bonds then guide you forward in making the chain longer Whenever you are considering adding a new feature or changing existing things, you have to look at the overall picture, which helps in creating a clean marketing mix for the product  Marketing mix helps in New product development While designing an existing product, there are any number of ideas which can come up for a related product that can be designed by the company The pricing, place and promotions might be different for such a product Nonetheless, it can be classified as a new product and hence while designing the marketing mix, the company can come up with good ideas for NPD as well  Marketing mix helps increase the product portfolio Whenever you want to increase the product depth or product line and length, you have to make minor changes to the product In essence, you are making minor changes in the marketing mix itself You are making changes to the product features, to its pricing and possible to its promotions As a result, by altering the marketing mix and certain features within it, you can end up with an enlarged product portfolio  It is a guide to improve a business Physical evidence was an important P in the service marketing mix If a restaurant or an interior design business realises its important, then naturally they can act on it and improve the physical evidence of their business thereby bringing in more business The importance of marketing mix is evident in more then a single P People and process are important to the organization too and optimizing both can improve the overall working of the organization Hence, marketing mix is an excellent guide if someone wants to improve their business and is doing gap analysis  It helps in differentiation When you analyse the marketing mix of Competitors, there are many different ways that you can differentiate yourself from the competitor The competitor might have poor promotions and by analysing them, you can create better promotions of your own product The competitor might have poor placement of products or he might have the wrong process or the wrong people in place All this can be improved upon giving you a better marketing mix and therefore a competitive advantage in the market  Finally, it helps you in being dynamic A company which is well prepared is also prepared when disaster strikes During recession or during a poor business environment, a company should be ready to respond At such times, the company needs to be dynamic in nature Such a company needs to understand its product, processes, people, promotions and all other P’s better If it understands them, it will respond with a better agility Thus, there are many ways that marketing mix may be important to an organization The best part is, analysing and understanding the marketing mix is not a lengthy procedure and the ROI on the time spent is much higher 1.2.2 The role of marketing strategy Marketing plays a very important role in business It guides, directs and coordinates the production and business activities of businesses Thanks to marketing activities, the decisions made in production and business have a more solid scientific basis, the enterprise has more conditions and more information to satisfy all requirements of customers The role of Marketing is shown in the following aspects:  For production Helping to survey the market, production and consumption activities, to - meet customers' needs in a practical way - Marketing is a method to concretize business plans at enterprises - Help to harmonize the objectives of the enterprise, stimulate research and improve production  For the market Applying Marketing has the effect of stimulating the social market in and outside the country, closely associated with the mechanism of economic life Marketing is essential when dealing with market problems, in the relationship between the company and the market  For planning As a means, a tool finds the direction and path of future operations of the company Marketing reflects centralized economic planning Planning and Marketing are closely related: Marketing serves first the processes of implementing plans and creating an objective scientific basis for the plan; whereby the science and reality of the plan are enhanced On the basis of marketing research, draw conclusions about the ability to consume products obtained through the operation of corresponding investment capital 10 1.3 The process of developing marketing MIX The Marketing mix is a set of decision that needs to be considered prior to introducing a new product These variables are also called the P's of marketing They help an industry in making strategic decisions required for the smooth running of an organization These variables are: Figure 1: Marketing mix 7P model 11 The company also focuses on development of real estate investment to build high standard warehouses 2.8 Comment and evaluate the marketing performance of the company 2.8.1 Achievements In the process of forwarding, DHB has traded a lot of different import and export goods lots such as machinery, agricultural products, chemicals, handicrafts, etc Table 7: Number of contracts in 2017 Unit: Milion VND Volume Customers Domestic company Major business Small and medium business Foreign company Major business Small and medium business Total Source: financial statements It can be seen that the number of signed contracts is 428, accounting for 24.97% of the number of offers In which domestic enterprises accounted for 82.5 /% (351 contracts), domestic enterprises accounted for 18% (77 contracts) The rate of contracts signed with small and medium enterprises accounted for a high rate of 96.9% for domestic enterprises, 94.8% for foreign enterprises 2.8.2 Restrictions Although DHB Logistics Co.,Ltd has a large number of offers and foreign markets are also interested, the rate of successful signing of contracts is quite modest Sales staff find out about customer information without the support from 55 the company The company does not have a market research and development department to learn import and export policies, law, culture, approach to customers leading to employees finding customers randomly and without specific strategies as well as clearly identify markets and target customers Price list of shipping fees and customs declaration fees are quite detailed However, it is not yet included with the preferential price policy as well as the private support to increase customer interest in the service Besides, the image of the company has not been well advertised, the source of new customers is mainly due to the employees looking for the customers but they have not found the company yet The company forwarding market is narrow, mainly domestic enterprises with small and medium scale The ability to negotiate contracts is not good, the service has not met the difficult market In addition, they have not yet studied their competitors and their strategies 56 CHAPTER 3: SUGGESTION TO IMPROVE MARKETING STRATEGY FOR LOGISTICS SERVICES 3.1 Development orientation of the company 3.1.1 Growth target Brand objectives: DHB strives to become Vietnam's leading logistics service company in 2030 Financial goals: Revenue grows at an average rate of 25% / year, in 2030, it will reach over VND billion / year Net profit on capital 35% - $ 40% Strategic partner objectives: The company is a strategic partner, the top choice of agents in foreign countries, and shipping lines - The company will focus on the main services: - Transport and transshipment of goods: 40% - 45% of revenue - Warehouse rental: 30% - 35% of revenue - Customs declaration: 20% - 25% of revenue - Shipping agency agency: 5% - 10% of revenue 3.1.2 Competitive objectives Building a business strategy is the combination of internal environmental factors with the strengths and weaknesses of the business along with external environmental factors with opportunities and threats to find specific strategies for DHB Logistics Therefore, it is necessary to figure out strengths and weaknesses with opportunities and threats Since then, combining these elements together appropriately, we have a SWOT matrix and based on that to propose solutions to extract business for DHB in the future 57 Table 8: SWOT matrix of DHB Logistics CO.,LTD SWOT analysis Strength (S) S1: Logistics service quality provided to customers is relatively good S2: Experience and prestige in forwarding service industry S3: Enhancing cooperation with foreign countries Weakness (W) W1: focus more on traditional forwarding activities W2: Services lack of linkage W3: The quality of employees working in logistics is poor W4: Limited application of information technology Source: Authors' calculations based on internal and external factors 58 3.2 Recomendations to improve the marketing strategy for logistics services Market research, understand customer needs to have appropriate access strategies Attracting customers through improving marketing performance, improving service quality, training and guiding employees Since then, the rate of successful contract signing has increased, the company's service has been recognized not only by domestic customers but also by foreign countries  Market research DHB should pay attention to firmly consolidating the current market while expanding new markets, promoting market research on the economic, cultural, social and legal environment These issues directly impact on the company's strategy, brand promotion and market dominance DHB can hire market research companies or their own research - Collect information DHB can collect the self-service market research information from internal and external information  Internal: Information data of regular reports available in departments such as the number of signed contracts and reports of forwarding services business results From there assess and analyze data Through analysis, DHB can know which customers, which markets and services need to impact to achieve the highest business results  External: Reports and figures of the State authorities: Ministry of Industry and Trade, General Department of Statistics, Vietnam Chamber of Commerce & Industry, General Department of Customs, Vietnam Maritime Bureau, 59 Department of Industry and Trade of the province/ cities such as import and export turnover with countries, trade balance, import and export turnover of commodity groups, structure of exports Information from the webside is published by research organizations on research results or tools from the internet, specialized journals, webside Association of Vietnam Logistics services National trade books, economic information, market information, television Through this information, DHB can generalize the situation of national economic development, the general world of forwarding industry in particular, detect needs, new business opportunities, select partners to eat - Find out customer needs - Market survey: DHB is a member of the worldwide cargo network association, Global freight group network, Multinational Forwarders Alliance The company that sent representatives to participate in seminars of this organization is an opportunity to learn more about the trend in the forwarding industry, the world trade situation It is possible to participate in the markets of garment, seafood, handicrafts, etc., market survey questionnaires  Interview Send an email or call to ask customers to know the level of satisfaction and new expectations in the services of the company - Attract customers - Enhance marketing activities 60 3.2.1 Product - Diversifying types of services, adding labor services for importers to gain the right to hire transport vehicles - Let customers know about these types of services including detailed services that will be conducted through email replies, advisory dialogs on the website - Ensuring the quality, the time to proceed proceeds as contracted - The company should increase its key products The main products are only two items with relatively large turnover, such as elevators and wooden products Items of concern such as food, components and machine equipment 3.2.2 Price - For competitive prices, additional services should be added, such as consulting - Payment discount if customers pay in advance - Long-term partners will reduce prices - If the customer contracts in large quantity depending on the amount of fee reduction from the level, about 1000 cont / year reduce 10%, 500 cont / year 5% service charge 3.2.3 Place The company should expand branches and agents to provinces Because at present, our government has a policy to transfer manufacturing companies to the provinces Although this is a new policy, it has not been widely disseminated but if there is an initial preparation, the company will achieve high efficiency in business Associate with foreign agents to cooperate with imported consignments 61 3.2.4 Promotion DHB logistics Co.,Ltd should adopt Digital Marketing strategy because of high interaction: creating a two-way response between marketers and users, helping marketer understand and handle customers' behaviors and reactions quickly High efficiency because of rapid spread, cost savings, products and services of enterprises can be marketed 24/24 during the day At the same time, the company can clearly identify customer segments: each tool will apply to a different customer segment, consistent with the characteristics of each customer The integration of digital technology helps us to have more choices as at the same time can impact customers by Email Marketing, Website, Mobile Marketing, SMS, Social Media Marketing, - Pushing strategy in Digital Marketing services is through interactive forms such as banner advertising on websites, sending SMS or e-mail to introduce products to find potential customers - Pulling strategy is the fundamental and long-term plan to reach customers by letting customers actively find you through activities of searching websites, blogs, There are groups of Digital Marketing tools: - Groups increase brand awareness: Display ads (Display ads), Online PR, Blog & Forum - The group increases the persuasiveness of products and brands: Webbased marketing, Social Media marketing, Online PR, Blog & Forum, SEO (Search engine optimization) - - Group to increase sales and customer care: PPC Google Adwords, Facebook Ads, Social Media Marketing, Email Marketing, Mobile Marketing: Message (SMS & MMS), SEO 62 3.2.5 Process The documents of goods and declarations must be drafted before going through customs clearance and delivery with the port The goal is to help the importer to receive the goods as prescribed By completing the documents and declarations, it will help the company accomplish its goals quickly and effectively In addition, the staffs must check carefully as soon as they receive the customer documents Prepare fully relevant legal documents and forms The company should organize instructions to use the declaration software when changing, how to fix errors when running the software and call IT staff, contact the software provider In order to avoid errors in the tax code, it is necessary to purchase additional and replace annually the Import and Export Tariff, VAT applicable for goods Update daily exchange rates and write on the notice board in the company The Head of Import and Export Department assists in translating goods names into Vietnamese and applies tax codes for strange and complicated goods Therefore, it is necessary to avoid losing time when changing software, strictly controlling the process of preparing the set of documents to avoid confusion and errors Keep records for future inspection and statistics DHB also should open accounts at foreign banks with branches around the world such as HSBC, ANZ or banks affiliated with foreign banks to facilitate payment The company needs to research and research new businesses cooperating for the first time and through forwarding associations to find out and request payment for businesses that not pay service fees 3.2.6 People All activities of market research, understanding and attracting customers want to be effective, recruitment and training of sales staff and sales staff are important 63 Firstly, the company should invest in recruiting employees who have the right knowledge and skills from the beginning to avoid retraining or retiring The board of directors is the person who makes and plans recruitment Recruiting sources include internal sources and external sources - Internal source: The company uses recruitment notices in public locations of the company to search for candidates This is the method that helps the company to find employees most quickly and easily - External sources: Friends of employees, former employees, job applicants, employees of other firms, graduates There are many methods for recruiting external employees such as advertising on media or newspapers, internet, colleges and universities, job introduction centers, and interns Next is to select the appropriate candidate: The first is to consider the application, the test, and finally the interview Through this process, the company will find suitable candidates for the position Training and developing: For new employees, the company should organize training sessions to help employees become familiar with the working style and company culture Develop job descriptions, guide customs documents, international laws, specify target customers and approach for employees to work effectively The management of the company should also organize seminars to exchange experience Besides maintaining the open-door policy to listen and help the problems beyond the ability of staffs when meeting major customers 3.2.7 Physical Evidence The company needs to ensure equipment, offices, warehouses at the best conditions to meet the quality goals and satisfy the needs of customers 64 Especially the transport vehicle team, the company should invest more or can hire other transport company vehicles to care more goods In terms of technology application, the practical need of applying information technology in international forwarding activities, providing traceability features as an indispensable service feature, increased visibility of supply chain Therefore, the company needs to apply FMS / TMS solution (freight forwarding management system) The application of information technology also contributes to the service provider's ability to provide services and the ability to retrieve goods The company should also research to apply high technology to logistics services, such as Block chain technology into the eDelivery Order and e-Bill of Ladings, CargowiseOne into logistics activities,ect Thereby facilitating the development and improvement of service quality, reducing logistics costs 3.3 Request Recently, the state has issued quite a number of policies and laws to regulate logistics activities In addition to the 2005 Commercial Law, which provides articles to specify logistics services, we have many other specialized laws such as Maritime Law, Civil Aviation Law, Road Traffic Law, Railway Law, ect) In addition, the Government has approved many development plans and strategies related to logistics services for the period of 2020 and vision to 2030 However, the current legal and policy mechanism on logistics services is Vietnam has not yet created a cross-link between ministries to create favorable conditions for this activity to develop Most strategies and master plans on developing logistics services of the government stop at strategic level, long-term vision, there is no detailed plan for this type of service Some localities and big cities of the country - where there are many potentials for developing logistics services such as Hai Phong, Hanoi, Vung Tau or Ho Chi Minh City, still have 65 infrastructure planning and logistics services not really reasonable and scientific Specifically, we have planned the location, scale of ports, logistics centers, ect but we have not mentioned the planning of the road system or transport infrastructure connecting to these areas Even in the southern region, where the economy has been highly developed in the past 10 years, due to limitations in planning and lack of investment, there has been a situation of cargo congestion at major ports of entry and exit All these shortcomings have contributed to the increase in logistics costs of enterprises in general and logistics services businesses in particular Therefore, Governments and Ministries should Complete the legal framework for e-commerce and logistics with specific details such as freight invoices and regulations on traffic management; Create conditions to encourage enterprises to apply and develop automated technology, develop "green" facilities suitable to EC-logistics; There are specific policies and guidelines for the operation of tricycles, four-wheelers, drones, ect for the logistics industry; Create conditions and support for electronic payment widely deployed in Vietnam, limit cash transactions; create forums for businesses to connect and support each other 66 CONCLUTION In the context that Vietnam's economy is integrating into the world economy, import and export activities are also diversified, complex and constantly changing, so that in order to fully implement the foreign trade contract, the forwarding operation transport plays a key role Therefore, the delivery service in our country is growing Since its establishment, DHB has also achieved achievements on the way of development, creating a position in the forwarding industry However, when the world and domestic economies are in crisis, the company also needs to have appropriate strategies, mitigate the impacts and create momentum for growth when the economy recovers Hopefully, in the future, the company will gradually improve itself and go further in international business activities 67 68 ... 2: DHB LOGISTICS CO. ,LTD INSIGHTS OF MARKETING MIX 2.1 A brief Introduction of the company Company name: DHB LOGISTICS COMPANY LIMITED Company name abbreviated: DHB LOGISTICS CO. , LTD Type of company... IMPLEMENTING MARKETING MIX FOR LOGISTICS SERVICES OF DHB LOGISTICS CO. , LTD Research question What factors influence marketing strategy of DHB Logistics Co. ,Ltd? How to develop a marketing strategy for DHB. .. Conclusion, the thesis composition consists of three main chapters as follows: CHAPTER 1: LITERATURE REVIEW OF MARKETING MIX FOR LOGISTICS SERVICE CHAPTER 2: BACKGROUND OF DHB LOGISTICS CO. ,LTD