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

t strength for one firm but a weakness, 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 opportunities to another, include technological changes, legislation, socio-cultural differences, and change in the market place or competitive position. Global Marketing Strategy In terms of globalization, worldwide businesses use global marketing when they take the same or similar approach or content for one or more elements of the marketing mix, that is, 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 of marketing more global and others less so. Accordingly, possible adaptations that firms might apply to their product, promotion, price, and place when they enter through the foreign markets will be provided in this part. Product There are five international product and promotion strategies for a company to extend its market base into other geographic markets (See table 1.1). Straight extension means marketing the product in the foreign market without any adaptation. Top manager asks its marketing people to “find customers for the product as it is”. As a result, it is seen as the easiest product marketing strategy and may be the most profitable one as well. However, the company should first determine whether foreign consumers use that product or not. Straight extension has been successful with cameras consumer electronics, and many machine tools. This strategy is tempting because it involves no additional product development cost, manufacturing changes, or promotional modification. But it can be costly in the long run if products fail to satisfy foreign consumers. Table 1.1: Five international product and promotion strategies Product Promotion Do not change product Adapt product Develop new product Do not change promotion Straight extension Product adaptation Product invention Adaptation promotion Communication adaptation 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, a country 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 be adapted to local superstitions or beliefs, too. Product invention consists of creasing something new the foreign market. It can be divided into two forms. The first is backward invention, which means reintroducing earlier 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 Promotion Companies can either adopt the same promotion strategy they used in home market or change it to suit each local market. Although some global companies use a standardized promotion campaign changes might be needed to comply with local regulations and references. There are four different levels of adapting promotion strategy. _______________________ 6 Subhash 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 country selects the most appropriate one. Finally, some companies allow managers to create a specific advertisement – within guidelines, of course. Other companies follow a strategy of communication adapting their advertising messages without any product change. Although it retains the scale economy on the manufacturing side the firm sacrifices potential saving on the communication way. Another strategy is dual adaptation. It is changing both the product and the communication to face local differences. Price Global companies face several problems in setting their international prices. Those problems must be dealt with price escalation, transfer prices, dumping charges, and black markets. Price escalation problem occurs when companies sell their goods abroad. The foreign prices probably will be higher than their domestic ones because it must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin. Depending on these added costs, the product may have to sell for two to five times as much as in 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 have quite different prices 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 afford. 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 markup of its costs everywhere. But this strategy might price out of the market in countries where 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 subsidiaries. If a company charges too high a price to a subsidiary, it may end 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.7 Various governments are watching for abuses and often force companies to charge 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 prices geographically. Dealers in the lower-price country find ways to sell some of their products in higher-price countries, thus earning more.8 Very often a company finds some distributors buying more than they can sell in their own country and reshipping goods to another country to take advantage if there are 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 of 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 lucrative and creative means to deal with this problem. _____________________________ 7 Keegan, Warren J.(1995), Multinational Marketing Management 8 Kotler, Philip(2000), Marketing Management. 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 headquarters the export department or international division makes decisions on channels and other marketing-mix element.9 The second link, channels between nations, maces the products to the borders of the foreign nations.10 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.11 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 obstacle 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”12. These ingredients must be manipulated in a manner which ensures targeted customers are satisfied, marketing strategies 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. Seller Seller’s international Marketing headquarters Channels between nations Channel within foreign nations Ultimate buyers Source: Chatles Hill(1997), international Business Chapter 2 The Marketing Strategy of Ha Anh INCOSE Co.,Ltd An Introduction to Ha Anh INCOSE Co.,Ltd 2.1.1 Company development Ha Anh INCOSE Co.,Ltd was founded on 24th March 2006. Ha Anh INCOSE Co.,Ltd’s headquarters was located at 22 Alley 72/124, Hoang Ngan, Cau Giay, Ha Noi. It has 4 branches and plants nationwide in Ha Noi, Nghe An, Da Nang and Ho Chi Minh city, and a network of distributors around the country. Since its establishment, Ha Anh INCOSE Co.,Ltd has operated in various fields: Production line and equipment for foodstuff industry, mechanical engineering, constructions, fiduciary agent import and export for every 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 as information services, supplying and assembling for food machinary and other equipment. Company’s products Ha Anh INCOSE Co.,Ltd specializes in selling the following: Production line and equipment for foodstuff industry such as: Juice Machinery, Food packaging machinery, Food ration packing equipment, Canning machinery, Food product line ..etc.. mechanical engineering, constructions fiduciary agent import and export for every company in Viet Nam. Construction machinery and materials and equipment of its own and other electronic products. Besides, Ha Anh INCOSE Co.,Ltd also provide other services such as maintenance for medical and technical equipment Company’s Organization Board of Directors Deputy General Director General Director Deputy General Director Quality Acceptance Department Tectnical Department Trading Department Financial & Accounting Department HR Department Board of Directors Ha Anh INCOSE Co.,Ltd’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 and 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. HR department: this department is in charge of deciding what staffing needs, using independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring company personnel and management practices conform to various regulations 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 the manufacturing and processing. This department for the purpose of the company’s business development tales 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. Company trading results Table 2.1: Ha Anh INCOSE Co.,Ltd’s trading results in recent years. 2007 2008 2009 Total sales 1.570 2.282 2.550 Net profit 320 540 720 Source: Ha Anh INCOSE Co.,Ltd’s finalcial reports. Unit: million VND. The marketing strategy of Ha Anh INCOSE Co.,Ltd SWOT analysis of Ha Anh INCOSE Co.,Ltd As mentioned in the previous parts, Ha Anh INCOSE Co.,Ltd has been trading in a lot of products such as: Line and equipment for foodstuff industry ; Medical and technical equipment and machinery; Mechanical engineering, constructions, fiduciary agent import and export for every company in Viet Nam; Construction machinery and materials and equipment of its own and other electronic products. but with the limited time, this report focuses on the marketing strategy that Ha Anh INCOSE Co.,Ltd has used while dealing in Line and equipment for foodstuff industry only. In this light internal strengths and weaknesses, as well as external opportunities and threats that Ha Anh INCOSE Co.,Ltd faces while trading in Line and equipment for foodstuff industry will be identified for the understanding of Ha Anh INCOSE Co.,Ltd’ marketing strategy. Table 2.2: SWOT analysis of Ha Anh INCOSE Co.,Ltd Good quality Competitive price Good business relation with partners Customers’ loyalty Ha Anh INCOSE Co.,Ltd’s corporate culture Better market growth Limited capital Small size and small market share Not enough technical staff Lack of diversification in product quality Poor promotion activities. Growing black market Fierce competition Strengths The first strength of Ha Anh INCOSE Co.,Ltd is that Line and equipment for foodstuff industry are of good quality. Ha Anh INCOSE Co.,Ltd’s Line and equipment for foodstuff industry are imported from of famous companies in China, Japan, Taiwan with famous brands such as Pacelead, Brother, Hofen, Lonhon… These are famous brands in the world market and Vietnamese consumers highly appreciate them. Ha Anh INCOSE Co.,Ltd has never had any complaint about the product quality. The second strength is that Ha Anh INCOSE Co.,Ltd has been offering very competitive prices for its Line and equipment for foodstuff. Ha Anh INCOSE Co.,Ltd has a certain advantage: Ha Anh INCOSE Co.,Ltd has always kept its prices as competitive as possible. Its prices are among the lowest for Line and equipment for foodstuff, usually between 7% and 10% lower than its competitors. The third strength of Ha Anh INCOSE Co.,Ltd is the good relation with its business partners. Ha Anh INCOSE Co.,Ltd has maintained its corporation with the above mentioned business suppliers for many years and has always been highly valued by them. This is an advantage for Ha Anh INCOSE Co.,Ltd. Every years, its technical staff are offered technical training by the foreign experts from Ha Anh INCOSE Co.,Ltd’s suppliers. Many if these staff also have chance to go abroad to get training. Moreover, when there is a technical problem at Ha Anh INCOSE Co.,Ltd, it immediately receives assistance from its partners. The forth strength of Ha Anh INCOSE Co.,Ltd is its customers’ loyalty. As mentioned above, besides good quality, competitive prices, and good business relation with its partners, Ha Anh INCOSE Co.,Ltd’s customers’ has contributed a lot of the company’s success. The after sales services of the Ha Anh INCOSE Co.,Ltd has been developing and improving rapidly over the years. This hepls 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, Ha Anh INCOSE Co.,Ltd frequently holds customer meetings in which customers would have chances to express their thoughts 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 Ha Anh INCOSE Co.,Ltd. Employees of Ha Anh INCOSE Co.,Ltd 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 Ha Anh INCOSE Co.,Ltd’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 brainstorming about technological and life-style trends and discussing strategic priorities of Ha Anh INCOSE Co.,Ltd in the market. Weaknesses Firstly, limited amount of capital is posing a difficulty for Ha Anh INCOSE Co.,Ltd. The company’s capital hasn’t been expanded much since its establishment. The main source for its capital has been contributions of it shareholders and Ha Anh INCOSE Co.,Ltd 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 short 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 Ha Anh INCOSE Co.,Ltd. Secondly, Ha Anh INCOSE Co.,Ltd’size and market share have been small. The shortage of capital is the main cause of the company’s modest size and market share. Up to now, Sow has had only 4 branches dealing in conditioners nationwide in Ha Noi, Nghe An, Da Nang and Ho Chi Minh city. As a result, its market share is among the lowest in the market for Line and equipment for foodstuff in Vietnam. This is a major weakness for Ha Anh INCOSE Co.,Ltd, and the company has to be determined to overcome this if it is to be successful in the future. Thirdly, another weakness of Ha Anh INCOSE Co.,Ltd is its lack of technical staff. Although the current technical staff of Ha Anh INCOSE Co.,Ltd are qualified, but they are so few in terms of quantity. The company’s customers has never complained about Ha Anh INCOSE Co.,Ltd’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 Ha Anh INCOSE Co.,Ltd Lastly, Ha Anh INCOSE Co.,Ltd has had rather poor marketing and promotion practices. Marketing and promotion practices 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 formation and the provision of market information have not effectively been undertaken. Additionally, just like many of Ha Anh INCOSE Co.,Ltd’s competitors, it also has its own web site in order to develop their images and advertising their main products. However, most of those web sites are not attractive enough and the information about their businesses is not sufficient enough to appeal to customers. Opportunities The only opportunity for Ha Anh INCOSE Co.,Ltd is that can have a better market growth in the near future. There are two reasons for this. Firstly, the market in Vietnam for Line and equipment for foodstuff industry is growing rapidly because there are more customers for this item. Secondly, Ha Anh INCOSE Co.,Ltd is now considering expanding, as it is looking for more sources of capital. Some employees in Ha Anh INCOSE Co.,Ltd are thinking of investing in the company by buying its shares. Ha Anh INCOSE Co.,Ltd -marketing mix Product Famous international firms as products, which fundamentally provide its customers with various benefits make foodstuff of Ha Anh INCOSE Co.,Ltd become a good choice of many customers. These are core benefits, generic product, exported product and augment product. The core benefit of Ha Anh INCOSE Co.,Ltd is the usage of product-which the target customer finds. Moreover, the quality of Ha Anh INCOSE Co.,Ltd’s foodstuff 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 Ha Anh INCOSE Co.,Ltd adopts is low price strategy as most of competitors. This policy of pricing is much more attractive to customers as Ha Anh INCOSE Co.,Ltd’ prices normally are among the lowest for air foodstuff’. The second strategy that is applied by Ha Anh INCOSE Co.,Ltd’s for Line and equipment for foodstuff is price competition.. As a result, the price of Ha Anh INCOSE Co.,Ltd’s Line and equipment for foodstuff sold by these retailers may be cheaper as some of them may want to satisfied their commission per two-way to get profits from selling a big amount. It is the price competition between Ha Anh INCOSE Co.,Ltd retailers that benefits customers. 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 Ha Anh INCOSE Co.,Ltd has good relations with its partners so they help Ha Anh INCOSE Co.,Ltd very much in the distribution. They help Ha Anh INCOSE Co.,Ltd win over other rivals even in the fiercest competition. 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 a product line is sold. Promotion Promotion is the aspect of marketing concerned with increasing sales. Marketing must be considered on marking production decision, and promotion must be considered in the overall marketing process. Promotion attempts to persuade and influence the customer’s attitude in various ways. Ha Anh INCOSE Co.,Ltd has used some ways to advertise its product such as advertisements on television, internet, newspaper, magazine…. However, they advertisements are not very efficient. Ha Anh INCOSE Co.,Ltd uses two promotion strategies that is pulling strategy and pushing strategy to each target cu