CHAPTER 2: SITUATION ANALYSIS ON THE MARKETING MIX
2.3. General comments about the Marketing mix for boosting the sales, expanding the market of Gatexco 20
2.3.2. Some encountered limitations and the cause of the limitation
- The market development has been improved but not commensurated with the potential and strengths of Gatexco. The sales of export Product have not reached the target.
- Product’s design and fashion of Gatexco 20 have not been diversified and most of the current designs are designed by the customer when they order or designed as requirement of the customers of Gatexco. Therefore, the number of consumption is unstable with quite high in some years but also very low in some times as the amount of consumption depends on the customer's orders. Competitiveness of textile products in the domestic market is still low.
- There is no clear strategy of the marketing mix so there is no specific implementation of marketing plans for each group of customers, markets and products to promote the marketing activities and branding. Annual budget and resources allocated specifically to the Marketing is not clear. Therefore Gatexco's business activities are not built and conducted as specific strategy so results is not high, getting a lot of defects, preventing the development of business scale. The overall business strategy includes the policy objectives and the coordination of the activities of a service business strategy.
- The production units have not paid adequate attention to the process of improvement of technologies, the applications of tools & fixtures to create the breakthrough of comprehensive labor productivity. Besides it, the production management and the preparation are not synchronized and the operation plan has not closed to the fact, and get a lot of the confusion at the stage of defining the Bill of Material and spare parts management. The workshops and production units have not studied carefully the technical documents and also underestimate the demands of product’s quality and delivery time, lacking of coordination among departments and not actively implemented the quick production during operation leading to "let the grass grow under their feet" in some orders.
- The activities for looking and exploitation the economic orders for textile and garment products are still limited. Maintenance operation of machines and equipments of the member enterprises are not regular. The Savings and combat waste is not done comprehensively at the workshop and units.
- The capture and management of the market situation and aspirations of the officers and employees related to the business, marketing, and market development in
some units are not deep and close. The implementation of information reflection, the reporting of some units is not timely as the regulation. Reforming process of administrative procedures has made some progress but it still not strong enough.
- Qualifications of the business staffs who are responsible for marketing and the market should be more completed and coached as these staffs has been trained but still lacking of the depth skill of marketing and got the embarrassment in advising to the board of director as well as the enforcement of the specific professional works.
Moreover, Gatexco 20 has no specific plans for training the employees to have sufficient experience in market research. There are a high number of new recruited workers with low-skilled and their sense of discipline is not good.
- There are unnecessary errors in transaction and negotiation processes with the foreign customers, leading to the untight commercial terms of the sale contracts, causing the disadvantaged in the process of implementation of the contract.
- There are the wastes of the Implementation of export sales contracts and has not maximized and untapped the of export sources. Organization of export sales contracts is the most important factor, determining the profitability of export and import activities. The implementation of import and export sales contracts will send more costs for resolving the legal relationships, economic complexity of the contract. In fact, in recent years, Gatexco still has unnecessary mistakes in trading and negotiating with foreign customers, leading to untight terms the sales contracts, causing the disadvantaged in the process of implementation of the contract. The implementation of the import and export sales contracts of Gatexco 20 is un synchronization between the stages of implementation with long implementation time, reducing the efficiency of the business.
- The urging the progress of the construction of Nam Dinh Textile projects, the liquidation of military garment Enterprise project is still slow, prolonging construction time and over budget the project as the inflation of the price against the original budget, reducing the effectiveness of the project, missing the business opportunities and make investor to be difficult for implementation of investment of new projects. The public
investment, supplying the specialized equipments for the garment industry and repair the equipment of some production units are still slow.
b. The causes of these limitations:
- The debt crisis in some European countries and the stagnation of the U.S and Japan economies that are main exporting markets of Gatexco has led to the lower consumption, decreasing of export orders come from these markets significantly reduced. This leads the pressure to customers to request for discount price to get the orders for ensuring the employment of the affiliates and enterprises. Besides it, some economic orders for exporting have been canceled.
- The competition among the domestic textile-garment enterprises becomes fiercer. Meanwhile, management area of Gatexco is broad including the remote areas and some enterprise has limitation of the production capacity. Especially, the distribution system of Gatexco 20 is very limited in comparison to other large enterprises in the textile industry in Vietnam.
- Continuous changing of input materials costs in 2011, meanwhile the increase of the selling price has not enough for compensation and affecting the production efficiency of Gatexco 20.
- Board of Directors of Gatexco 20 has not been aware of the role, functions, duties and the importance of the definition of business strategies that include the activities relating to the marketing mix and the risks and challenges of the companies in the future. It is due to the passive thinking of the leader who often rely on the main source of the military orders
- Gatexco 20 has not paid the attention and had the proper priorities for market research. In the business, the import and export activities of goods and services take place between buyers and sellers in different countries. It is very different from the domestic market in term of supply and demand of the goods, business environment, tastes and habits of consumers. Therefore ,Gatexco 20 will face with higher risk of import and export activities if they do not pay attention and spend time in market research, collection and processing of information and forecast about market demand.
This is also a reason that company in many case do not dare to sign big contracts because the fear of the volatility of raw materials, limitation capacity for delivery in time and ensuring the product’s quality.
- The mode of transaction, negotiations in some cases is not reasonable as the contract negotiations on export and import business is a professional process that requires the patience, technical capacity, market information and the ability to capture information as well as the ability for analysis of the information, combining with negotiation skill meanwhile the qualification of business man are still very limited to fulfill the works well.
- The awareness, qualification and the responsibility of a number of officers and employees of Gatexco is still restricted, not keeping pace with the mission and the requirements. Member enterprises are still not active and initiative in coordinating the implementation of the assigned tasks, causing some problems.
- Mechanism management of Gatexco has not been flexible with military-style command, unconditional implementation of commend of the officers.
- The liquidation and launching new projects was often prolong by administrative procedures and the complicated & cumbersome provisions of law involving the parties.