The Marketing Strategy of Ha Anh INCOSE Co.,Ltd
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Field Study Report
‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’
Student: Vi Nhat Anh
Class: TATM CN6 A1
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The Marketing Strategy of Ha Anh INCOSE Co.,Ltd
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Hanoi, November 2009
Field Study Report
‘‘The Marketing Strategy of Ha Anh INCOSE Co.,Ltd’’
Student: Vi Nhat Anh
Class: TATM CN6 A1
Supervisor: Bui Nguyet Anh M.A
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Hanoi, November 2009
Acknowledgements
In the process of writing this report, I have gained a great deal in terms
of project planning, research methodology and information acquisition.
But I could never have done this work without the help and advice of
many whose ability far exceeds my own. With gratitude, I acknowledge
a specific debt to my supervisor, Ms Bui Nguyet Anh, for her invaluable
advice and personal guidance from the planning stage to the completion
of this report.
My thanks also go to all my teachers at the Foreign Trade University for
their devoted teaching and for introducing me to the world of knowledge
during my four and a half years 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.
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Finally, I wish to express my deepest appreciation to all people in my
family for their love, understanding and encouragement.
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TABLE OF CONTENTS
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INTRODUCTION ............................................................................. 104
Chapter 1 ...................................................................................... 115
Theoretical Framework ................................................................. 115
1.1. The concept of marketing ...................................................... 115
1.1.1. The definition of marketing ................................................ 115
1.1.2. The goals of marketing. ...................................................... 147
1.2. Competitive Analysis ............................................................. 157
1.3. Global Marketing Strategy..................................................... 168
1.3.1. Product ................................................................................ 168
1.3.2. Promotion ........................................................................... 189
1.3.3. Price .................................................................................. 1910
1.3.4. Place (distribution channels) ............................................ 2212
1.4. The marketing mix strategies .............................................. 2312
Chapter 2 .....................................................................................2414
The Marketing Strategy of Ha Anh INCOSE Co.,Ltd ........................2414
2.1. An Introduction to Ha Anh INCOSE Co.,Ltd ......................... 2414
2.1.1 Company development ....................................................... 2414
2.1.2. Company’s products ......................................................... 2514
2.1.3. Company’s Organization ................................................... 2615
2.1.4. Board of Directors ............................................................. 2615
2.1.5. The departments............................................................... 2716
2.1.6. Company trading results ................................................... 2817
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2.2. The marketing strategy of Ha Anh INCOSE Co.,Ltd ............. 2917
2.2.1. SWOT analysis of Ha Anh INCOSE Co.,Ltd......................... 2917
2.2.2. Strengths ........................................................................... 3018
2.2.3. Weaknesses ...................................................................... 3219
2.2.4. Opportunities .................................................................... 3421
2.3. Ha Anh INCOSE Co.,Ltd -marketing mix ............................... 3521
2.3.1. Product .............................................................................. 3521
2.3.2. Price .................................................................................. 3521
2.3.3. Place .................................................................................. 3622
2.3.4. Promotion ......................................................................... 3622
Chapter 3:Some Recommendationsto Improve Ha Anh INCOSE
Co.,Ltd’s Marketing Strategy.........................................................3824
3.1. Some recommendations to the Government and relevant
authorities ..................................................................................... 3824
3.2. Recommendations to Ha Anh INCOSE Co.,Ltd. ..................... 3824
3.2.1. Improving the company’s marketing mix .......................... 3924
3.2.2. Building the company’s image ........................................... 4025
Conclusion ...................................................................................4227
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
1.2. Competitive Analysis ................................................................ 4
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1.3. Global Marketing Strategy ...................................................... 5
1.3.1. Product ................................................................................... 5
1.3.2. Promotion ............................................................................... 6
1.3.3. Price ........................................................................................ 7
1.3.4. Place(Distribution channels) ................................................. 9
1.4. The marketing mix strategies .................................................. 9
Chapter 2 ............................................................................................ 11
The Marketing Strategy of Ha Anh INCOSE Co.,Ltd .......................... 11
2.1. An InTroduction to Ha Anh INCOSE Co.,Ltd. ......................... 11
2.1.1 Company development .......................................................... 11
2.1.2. Company’s products............................................................ 11
2.1.3. Company’s Organization .................................................... 12
2.1.4. Board of Directors ............................................................... 13
2.1.5. The departments .................................................................. 13
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
2.2.5. Threats ................................................................................. 19
2.3. Ha Anh INCOSE Co.,Ltd -marketing mix ................................. 19
2.3.1. Product ................................................................................. 19
2.3.2. Price ...................................................................................... 20
2.3.3. Place...................................................................................... 20
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2.3.4. Promotion ............................................................................. 21
Chapter 3: ........................................................................................... 23
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
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INTRODUCTION
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 to marketing activities, especially when both
domestic and global competition is getting fiercer and fiercer.
Being one of the companies specializing in Production line and
equipment for foodstuff industry, mechanical engineering, construction
machinery in Vietnam, Ha Anh International Commercial Services
Company Limited (HA ANH INCOSE CO.,Ltd) has achieved certain
successes in this field. Its sales of line and equipment for foodstuff
industry have increased over the years since its establishment. After
taking a close look at HA ANH INCOSE CO.,Ltd’ s performance, I
decided to choose “Marketing strategies of Ha Anh International
Commercial Services Company Limited” as the topic for my field study
report with a view to examining Ha Anh International Commercial
Services Company Limited’s marketing strategy and making some
recommendations to improve it.
Ha Anh International Commercial Services Company Limited has a lot
of business activities, but because of limited time, this report focuses
only on the company’s marketing activities for one line of its business,
that is line and equipment for foodstuff industry, on the market in
Vietnam.
Apart from the introduction and conclusion, the report is divided into 3
chapters as follows:
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Chapter 1: Theoretical Framework
Chapter 2: Marketing strategies of Ha Anh INCOSE Co.,Ltd
Chapter
3: Some
Recommendations
to
Improve
Ha
Anh
International Commercial Services Company Limited’s Marketing
Strategy
Chapter 1
Theoretical Framework
1.1. The concept of marketing
1.1.1. The definition of marketing
Today’s then central problem facing businesses is not a shortage of
goods but a shortage of customers. Most of the world’s industries can
produce far more goods than the world’s consumers can buy.
Overcapacity is resulted from individual competitors projecting a greater
market share growth than is possible. If each company projects a 10
percent growth in its sales and the total market is growing by only 3
percent, the result is excess capacity. This in turn leads to hyper
competition. Competitors, desperate to attract customers, lower their
prices and add give away. These strategies ultimately mean lower
margins, lower profits, more failing companies, and more mergers and
acquisitions. Marketing is the answer to how to compete on bases other
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than price. Because of over capacity, marketing has become more
important than over.
If forced to define marketing, most people, including some business
managers, say that marketing 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 be understood not in the
old sense of marketing a sale-“telling and selling”-but in the new sense
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 the homework that managers undertake to assess needs,
measure their extent and intensity and determine whether a profitable
opportunity exists. Marketing continues throughout the product’s life,
trying to find new customers and keep current customers by improving
product appearance and performance, learning from product sales results
and managing performance”1. So what does the term “marketing” mean?
Actually, there is no single and universally agreed definition of
marketing. The American Marketing Association defined marketing “is
the process of planning and executing the conception, pricing,
promotion and 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 International Marketing” had another
definition as follow: “Marketing is the process by which decisions are
made in a totally interrelated changing business environment on all the
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activities that facilitate exchange in order that the targeted group of
customers is satisfied and the defined objectives accomplished
”3. Though there are many definitions, a central part of any definitions of
marketing is the exchange process – the process of giving something of
value in return for something of value. Or in other words, it’s the
process of transferring between two or more parties of tangible or
intangible items of value(see figure 1.1).
Cash, debt, time, votes, behavior, etc
Marketer
Goods, Services,
ideas,
People and Places
Customers
Wants and needs.
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 with unmet needs, (2) a desire and ability to satisfy them,
(3) communication between the
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_______________________
1
Amber, T.and Styles, C.(2000), The Silk Road to International
Marketing, Harlow: FT Prentice Hall
2
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.
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 the exchange can occur.
1.1.2. The goals of marketing.
“Today’s successful companies at all levels have one thing in common;
their success is founded upon a strong customer focus and heavy
commitment to marketing”5. They motivate everyone in the organization
to deliver high quality and superior value for their customers, leading to
high levels of customer satisfaction. These organizations know that if
they take care of their customers, market share and profits will follow.
Creating customer values and satisfaction is at the very heart of modern
marketing thinking and practice. 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 in creating more
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values for customers than its competitors can do, that company is said to
enjoy competitive advantage in an industry.
1.2. Competitive Analysis
It is the increasingly emerging markets that have created favorable
conditions for the rapid development of world trade and investment,
which is well – manifested in the sophisticated growth of a number of
global companies. To compete in one or more foreign markets,
companies not only need to broaden relentlessly their sources of
competitive position. One particularly useful technique in analyzing a
firm’s competitive position relative to its competitors is SWOT
(strengths. Weaknesses, opportunities, and threats) analysis aims to
isolate the key issues that will be important to the future of the firm and
that will be addressed by subsequent marketing strategy. A SWOT
analysis divides the information into two main categories (internal
factors and external factors)
_________________________
4
Courtland 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).
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The internal factors could be viewed as strengths or weaknesses,
depending upon their impact on the firm’s positions; i.e., they may
represent 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.
1.3. 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.
1.3.1. Product
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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
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Do not change Adapt
Develop
product
new
product
product
Promotion
Do
not Straight
change
extension
Product
adaptation
promotion
Adaptation
Product
invention
Communication Dual
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promotion
adaptation
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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
1.3.2. 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
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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.
1.3.3. 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
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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
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