Đề tài The Marketing Strategy of a multinational join stock company

gin, wholesaler margin, and retailer margin. Depending on these added costs, the product may have to sold for two or five times as much as another country to generate the same profit. Since cost escalation varies from country, companies have three price setting approaches in different countries. Setting a uniform price everywhere: charging the same price everywhere in the world. By this method, companies would earn quite different price in different countries because of varying escalation costs. Also, this strategy would result in too high price in poor countries and not high enough in rich countries. Setting a market-based price in each country: charging what each country could effort. But this strategy ignores differences in the actual costs from country to country. In addition, 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 standard marketing of its costs everywhere. But this strategy might price out of the market in countries where it costs are high. Another problem arises when a company sets a transfer price(i.e. the price that it charges to another unit in the company) for goods that it ships to its foreign subsidies. If company charges too high a price to a subsidiary, it may and up paying higher tariff duties, even while paying lower income taxes in that country. If company charges its subsidiary too little, it can be charged with dumping. Dumping occurs when a company charges either less than it costs or less than it charges in its home market, in order to enter or win a market. Various governments are watching for abuses and often force companies to charges the arm’s-length price – that is, the price charged by other competitors for the same or a similar product. Global companies also face the black-market problem. A black market means the same product is sold at different price geographically. Dealers in the lower-price country find ways to sell some of their products in higher-price countries, thus earning more. Many company finds some distributors buying more than they can sell in their own country and reshipping goods to another country to take advantage if price differences. Multinationals try to prevent black market by policing the distributors, by raising their prices to lower-cost distributors, or by altering the product characteristics or service warranties for different countries. Moreover, one challenge o global pricing in recent years is that countries with overcapacity, cheap currencies, and the need to export aggressively have pushed prices down and devalued their currencies. For multinational firms this poses great difficulties. Sluggish demand and reluctance to pay higher price make selling in these emerging markets harder. Instead of lowering prices, and taking a loss, some multinationals have found more creative and creative means to deal with this problem. Place (Distribution channels) Global companies must take a whole-channel view of the problem of distributing products to final consumers. Figure 1.2 show the three major links between the seller and the ultimate user. In the first link, seller’s international marketing head quarters the export department or international division makes decisions on channels and other marketing-mix element. The second link, channels between nations, moves the products to the borders of the foreign nations. The decisions made in this link include the types on intermediaries (agents, trading companies) that will be used, the type of transportation (air, sea) and the financing and risk arrangements. The third link, channels within foreign nations, moves the products from their foreign entry point to final consumers. Channels of distribution within countries vary greatly from nation to nation first, there are large differences in the numbers and types of intermediaries serving each foreign market. Long channels of distribution means that the consumer’s price ends up double or triple the importer’s price. Another difference lies in the size and character of retail units abroad. Breaking bulk remains an important function of intermediaries and helps perpetuate the long channels of distribution, which is a major abstaining to the expansion of large-scale retailing in developing countries. The marketing mix strategies Philip Kotler, in his book “Principles of Marketing”; defines marketing mix as “the set of controllable tactical marketing tools – product, price, place and promotion – that the firm blends to produce the response it wants in the target market”. These ingredients must be manipulated in a manner which ensures targeted customers are satisfied, marketing strategies are implemented and desired brand positioning is achieved. Seller Seller’s international Marketing headquarters Channels between nations Channel within foreign nations Ultimate buyers Figure 1.2: whole-channel concept for international marketing. Chapter 2 The marketing strategy of a multinational join stock company An introduction to a multinational join stock company. 2.1.1 Company development A multinational join stock company was founded on 12th August 2002. A multinational join stock company’s headquarters was located at 236 Cau Giay Street, Hanoi. It has 2 branches in Hanoi, Hai Phong and a network of distributors around the country. Since its establishment, a multinational join stock company has operated in various fields: air conditioners, electronics, medical equipment, technical machinery and equipment, etc. After two years of operation, a multinational join stock company expanded into other areas such as information services, supplying and assem blind lifts and other equipment. Early 2007, a multinational join stock company opened a new branch in Hai Phong for selling construction materials. It also opened a new sales representative office for selling Viglacera’s products. Company’s products A multinational join stock company specializes in selling the following: Air conditioners of famous companies such as Toshiba(Japanese), Mitsubishi(Japanese), Trane(American) and Sanyo(Japanese). Medical and technical equipment and machinery, mainly imported from the USA, Italy, Germany and Japan. Lifts manufactured by Nippon (Japanese), Thyssen (German), Volbin (Swiss) and Don Yang (Korean). Construction materials and equipment of its own and Viglacera’s, and other electronic products. Besides, a multinational join stock company also provide other services such as maintenance for medical and technical equipment, computer installing and programming. Company’s Organization Board of Directors Deputy General Director General Director Deputy General Director Quality Acceptance Department Technical Department Trading Department Financial & Accounting Department Planning Department Board of Directors A multinational join stock company’s Board of Directors includes a Director General and 2 Deputy Directors General. Director General: Leading the company’s board of management is the Director General who is responsible for managing the use of capital, human and other resources. Two Deputy Directors General: These people provide assistance to the Director General. They would sometimes act on behalf of the Director General in his absence. One of them is responsible for the trading, planning, financial and accounting matters and the other is in charge of technical and research development aspects in the company. The departments There are five departments, each of which is responsible for a certain part of the company’s activities. Trading department: this department helps the Board of Directors with trading activities. These include organizing both domestic and international business. The trading department is also responsible for: _ Doing marketing researches on products. _ Promoting the company’s products through advertisements. _ Holding negotiations and getting contracts for the company. _ Organizing distribution channel for the company’s products. _ Planning department: this department is in charge of marketing plans on importing, material providing and preceding the contracts. Organizing the sales of products is another main task of the department. Financial and Accounting department: this department deals with all financial and accounting matters. Another main function is to manage the use of capital to the right purpose, right policies and regulations, and to assist business activities. Technical department: this department is in charge of technical and technological matters. The staff of this department also works closely with the factories to do researching and applying the modern equipment and technical advance to them anufacturing and processing. This department for the purpose of the company’s business development sales all the adjustments or improvement to the technology. Quality assurance department: this department takes control over the quality of the products. This is for the purpose of assuring that all the products will meet customers’ requirements. Apart from the five departments, a multinational join stock company as 2 branches around the country. The organizational chart has been effectively applied for a multinational join stock company since its establishment and has resulted in good performance and operation. There have been good assessments on the company structure: it shows to be in charge of particular activities and they would be able to proceed their function reasonably, which results in avoidance of overlapping and cumbersome. This helps the company to be able to take the internal and external advantages; to apply modern and advantaged technology to bring the best fruits to the whole company’s efforts. Company trading results 2005 2006 2007 2008 Total sales 5.527 7.035 10.783 21.579 Net profit 595 650 927 1.250 Table 2.1: A multinational join stock company’s trading results in recent Unit: million VND. The marketing strategy of a multinational join stock company SWOT analysis of a multinational join stock company As mentioned in the previous parts, a multinational join stock company has been trading in a lot of products such as air conditioners, electronics, medical equipment, technical machinery and equipment, etc., but with the limited time, this report focuses on the marketing strategy that a multinational join stock company has used while dealing in air conditioners only. In this light internal strengths and weaknesses, as well as external opportunities and threats that a multinational join stock company faces while trading in air conditioners will be identified for the understanding of a multinational join stock company’s marketing strategy. Good quality Competitive price Good business relation with partners Customers’ loyalty A multinational join stock company corporate culture Better market growth Limited capital Small size and small market share Not enough technique staff Lack of diversification in product quality Poor promotion activities. Growing black market Force competition Table 2.2: SWOT analysis of a multinational join stock company Strengths The first strength of a multinational join stock company is that its air conditioners are good quality. A multinational join stock company’s air conditioners are imported from famous companies in the world such as Toshiba (Japanese), Mitsubishi (Japanese), Trane (American) and Sanyo (Japanese). These are famous brands in the world market and Vietnamese consumers highly appreciate them. A multinational join stock company has never had any complaint about the product quality. The second strength is that a multinational join stock company has been offering very competitive prices for its air conditioners. A multinational join stock company has been a distributor for these firms since its early day (Toshiba, Mitsubishi, Trane and Sanyo), and although there are a lots of other companies are acting as distributors for them, a multinational join stock company has a certain advantage: a multinational join stock company has always kept its prices as competitive as possible. Its prices are among the lowest for air conditioners, usually between 7% and 10% lower than its competitors. The third strength of a multinational join stock company is the good relation with its business partners, a multinational join stock company has maintained it corporation with the above mentioned business suppliers for many years and has always been highly valued by them. This an advantage for a multinational join stock company. Every years, its technical staff are offered technical training by the foreign experts from a multinational join stock company’s suppliers. Many staff also have chance to go abroad to get training. Moreover, when there is a technical problem at a multinational join stock company, it immediately receives assistance from its partners. The forth strength of a multinational join stock company is its customers’ loyalty. As mentioned above, beside good quality, competitive prices, and good business relation with its partners, a multinational join stock company’s customers has contributed a lot of the company’s success. The after sales services of the multinational join stock company has been developing and improving rapidly over the years. This helps the firm to keep in touch with the old customers. And by words of mouth, these people have brought new customers for the company. In addition, a multinational join stock company frequently holds customer meetings in which customers would have chances to express or a multinational join stock company their thinking about the company products and services, this enables the company to get market research information to built up its reputation and customers’ loyalty. The last strength is the corporate culture of a multinational join stock company. Employees of a multinational join stock company are infused with an open, value-based corporate culture. The cornerstones of the company’s values are: Staff satisfaction Respect for the individual Achievement Continuous learning A multinational join stock company’s management seeks to internalize these values through debates and discussions among teams. Its annual strategy meetings, plays an important role in this process. The meeting focuses on barn-storming about technological and life-style trends and discussing strategic priorities of a multinational join stock company in the market. Weaknesses Firstly, limited amount of capital is posing a difficulty for a multinational join stock company. The company’s capital hasn’t been expanded much since its establishment. The Managing Director of a multinational join stock company said: “we have an advantage in comparison with our opinions in terms of customer’s loyalty and a good image and reputation, but now we have a problem of capital that thinking is weakening our competitiveness”. The main source for its capital has been contributions of it shareholders and a multinational join stock company has had a lot of difficulties in finding other sources of capital. As we all know there are four main sources of investment capital that domestic companies may access: Long-term credits provided by commercial banks on commercial basic: Government’s investment and Development Support Fund Soft loans and/or grants from foreign countries Non-banking capital, including company’s equity and funds mobilized from the informal banking system including the company’s employees. With regards to investment capital from banks, Vietnamese banks are shortage of investment capital, because of the lack of long-term deposits, which in turn due to the regulated interest rate and low reputation of the banking system. As a consequence, it is normally hard to get long-term ones. This mismatch of maturity causes many problems to Vietnamese companies including a multinational join stock company. Secondly, a multinational join stock company size and market share have been small. The shortage of capital is main cause of the company’s modest size and market share. Up to now, a multinational join stock company has had only 2 branches dealing in conditioners nationwide in Hanoi, Hai Phong. As a result, its market share is among the lowest in the market for air conditioners in Vietnam. This is a major weakness for a multinational join stock company and the company has to be determined to overcome if it is to be successful in the future. Thirdly, another weakness of a multinational join stock company is its lack of the technical staff. Although the current technical staff of a multinational join stock company are qualified for its technical word, but they are so few in terms of quantity. The company’s customers has never complained about a multinational join stock company’s product quality or the quality of the maintenance work that its staff have done, but has complained about the late reply and maintenance service of the company. The reason for this is the company’s not enough technical staff. This is also one factor resulting in the low market share of a multinational join stock company Fourthly, lack of diversification in product quality of also a weakness for a multinational join stock company. A multinational join stock company has always been concentrating in high quality air conditioners such as imports from Toshiba, Mitsubishi, Trane and Sanyo companies. These products have high quality but are too luxurious for a large proportion of Vietnamese customers. Besides these famous brands, a multinational join stock company should deal in some lower quality ones, which are also less expensive such as products from Samsung, LG, and Daewoo etc. By this way, a multinational join stock company an attract low and middle-income consumers. Lastly, a multinational join stock company has had rather poor marketing and promotion practices. Marketing and promotion practice of Vietnamese enterprises are poorly and insufficiently performed. Promotion is limited to market research. In addition, the organization of trade fairs and collecting information with such important tasks as export consultation, trademark information and the provision of market information have not effectively been undertaken. Additionally, just like many of a multinational join stock company’s competitors, it also has its own website in order to develop their images and advertising their main products. However, most of those websites are not attractive enough the information about their businesses is not sufficient enough to appeal to customers. Opportunities The only opportunity for a multinational join stock company is that can have a better market growth in the near future. There are two reasons for this. Firstly, the market in Vietnam for air conditioners is growing rapidly because there are more customers for this item. As Vietnam people’s income has increased in recent years, more people can affort air conditioners. This is no longer a luxurious item for a lot of people living in the city. Secondly, a multinational join stock company is now considering expanding, as it is looking for more sources of capital. Some employees in a multinational join stock company are thinking of investing in the company by buying its shares. Threats Despite the impressive performance so far, a multinational join stock company is facing a host of challenges. The first barrier is black market pressure. The flourish of black market is posting a threat for air conditioner importers, in general, and for a multinational join stock company in particular. Presently, China is the biggest supplier of black market air conditioners in Vietnam. The second barrier is that a multinational join stock company is facing an unprecedented level of competition from both existing competitors and new entrants. Thanks to the remarkable growth of Vietnam air conditioners recently, Vietnam is becoming a battle field for air conditioner manufactures and importers. There are more and more air conditioner manufactures in Vietnam. These are either joint-venture companies or 100% foreign owned ones. The qualities of their products are improves and their prices are much more competitive than the imported ones that a multinational join stock company is selling. As most people in Vietnam are low and middle-income earners, the air conditioners of these manufacturers are better suited to Vietnam consumers than a multinational join stock company. A multinational join stock company - marketing mix Product Famous firms as products, which fundamentally provide its customers various benefits, make air conditioners of a multinational join stock company. These are core benefit, generic product, expert product and augment product. The core benefit of a multinational join stock company is the usage of product-which the target customer finds. The generic product is the basic characteristic about product, which was described by color, trademark, and the package of product. Each of the products of a multinational join stock company has a separate trademark and color. Besides, a multinational join stock company has always tried to diversify its range of air conditioners. Initially, a multinational join stock company only sold 2 famous brands that are Toshiba (Japanese), Mitsubishi (Japanese). Then recently it has expanded and started to sell 2 other brands: Trane (American) and Sanyo (Japanese). This is helped to increase the number of customers of a multinational join stock company. Moreover, the quality of a multinational join stock company’s air conditioners has been maintained over the years. There has been no complaint from the consumers about their products. The company’s two-year guarantee period is also satisfactory to consumers. Price The first strategy that a multinational join stock company adopts is low price strategy as most of Vietnamese air conditioner use are price-sensitive buyers. The prices of a multinational join stock company’s conditioners range from VND 5,000,000 to VND 30,000,000 depending on each model. This policy of pricing is much more attractive to customers as a multinational join stock company prices normally are among the lowest for air conditioners. The second strategy that is applied by a multinational join stock company’s for air conditioner is price competition. A multinational join stock company authorized dealers indeed offer the retailers who sell a multinational join stock company’s two-way air conditioners a huge commission compared to those of its competitors. As a result, the price of a multinational join stock company’s air conditioners sold by these retailers may be cheaper as some of them may want to satisfy their commission per two-way to get profits from selling a big amount. It is the price competition between a multinational join stock company retailers that benefits customers. The last strategy that a multinational join stock company to use is in the fourth of this year it launched a lever air conditioner at inexpressive price. This kind of product is for low and middle-income people in Vietnam. These are the air conditioners with model FUNIKI SC 09 and SC 12, which are offered at inexpressive price of between VND 5,000,000 and VND 6,500,000. The company belives that cheaper price of two-way air conditioners and lower installation and maintenance cost of air conditioner are the two key elements to increase the sales of a multinational join stock company’s air conditioners in Vietnam. Place A good distributing policy helps business activities safer, increasing the connection in business, decreasing competition and marketing the circulation of goods more quickly and efficiently. In the domestic market a multinational join stock company has good relations with its partners so they help a multinational join stock company very much in the distribution. They help a multinational join stock company in over other rivals even in the forecast competition. Two-way air conditioners retailers are said to gain much benefit when committing to sell the new FUNIKI set. The company not only supplies its two ways to these retailers, but also supports them in terms of outlet decoration, staff training and marketing activities. Besides, each retailer will get a juicy bonus if an air conditioner is sold. A multinational join stock company offers an intensive support for any retail that is located in business centers of the cities and provinces across nation. On the contrary, the company would offer the shop owner much more benefit such as free shop-sign and not correction and a greater commission if the selling volume is reached at a high level. This always try their best to market as many air conditioners as ways is sold out much more than competitors. Promotion Promotion is the aspect of marketing concerned with increasing sales. Marketing must be cons