PRINCIPLES OF MARKETING ESSAY TOPIC VINFAST’S MARKETING ANALYSIS

In Vietnam, Vingroup is making an important contribution to creating an industry, thereby pushing many other supporting industries to go up, that is the motorcycle and car manufacturing

THE FINANCIALUNIVERSITY OF FINANCE – MARKETING

FACULTY OF MARKETING - -

PRINCIPLES OF MARKETING ESSAY

TOPIC: VINFAST’S MARKETING ANALYSIS

HO CHI MINH CITY, 2021

PREFACE

-The automobile industry is always the pride of many countries because the automobile is considered the standard for a developed industry, with the development level of technology, design, production capacity, supply chain, etc distribution as well as labor potential In Vietnam, Vingroup is making an important contribution to creating an industry, thereby pushing many other supporting industries to go up, that is the motorcycle and car manufacturing industry at VinFast It not only contributes to the development of a leading

industry in Vietnam, but also shows the desire to build a world-class

Vietnamese automobile brand So today our group chose the topic of analysis VinFast's marketing strategy From there, we want to contribute to giving the most overview of the path of the first car brand in Vietnam

INTRODUCTION ABOUT VINGROUP AND VINFAST

A GENERAL INTRODUCTION ABOUT VINGROUP:

Vingroup Group - Joint Stock Company (referred to as

"Vingroup Group"), formerly Technocom Group, was

established in Ukraine in 1993 by young Vietnamese people,

initially operating in the food and beverage

industry great success with the brand Mivina In the early years of the 21st century, Technocom was always present in the ranking of Top 100 largest enterprises in Ukraine Since 2000, Technocom - Vingroup returned to Vietnam

to invest with the desire to contribute to the construction of the country

With a long-term vision and a view of sustainable development, Vingroup has focused on investing in tourism and real estate with two initial strategic brands, Vinpearl and Vincom With continuous efforts, Vincom has become one

of the No 1 brands in Vietnam in real estate with a series of complexes of commercial centers (commercial centers) - offices - apartments in big cities, leading the trend of smart urban - eco-luxury in Vietnam In January 2012, Vinpearl Joint Stock Company merged into Vincom Joint Stock Company and officially operated under the Group model with the name Vingroup Group - Joint Stock Company In the spirit of sustainable and professional development, after its establishment, Vingroup has restructured and focused on developing with many brand groups

such as: Vinhomes (A system of

high-class serviced apartments and villas);

Vincom (System of commercial centers,

Vinpearl Land (Vin entertainment (Health); Vinschool (Education); Vincharm (Beauty care); VinFast (cars and electric motorcycles)

With these achievements, Vingroup is being evaluated as one of the powerful private economic groups, with a sustainable and dynamic

development strategy, with the potential for international integration to rise to the regional level and the world

B GENERAL INTRODUCTION ABOUT VINFAST:

VinFast (or VinFast LLC), the full name is ProductLimited Liability Company VinFast Manufacturing and Trading, is an establishedVietnamese automobile manufacturer in 2017

The company is a member of Vingroup construction and real

estate group and was founded by Pham Nhat Vuong The

company name stands for the phrase "Vietnam - Style - Safety - Creativity - Pioneering" (the letter Ph changed to F) - VinFast is a project in the field of automobile and motorbike manufacturing - one of the leading industries, having

an impact on many other industries that Vingroup has only joined for more than

electric motorcycle production project includes 5 specialized areas located in Lach Huyen, Cat Hai, Hai Phong, expected to have a total investment of up to

4 2 billion USD

VinFast factory complex has invested and put into use the most advanced production technologies such as: stamping workshop according to industry 4 0 standards, body workshop with more than 1,000 robots, 100% automatic spot weldings line, a paint shop with state-of-the-art technology and

79 applied robots, an assembly workshop with fully automated moving

processes and state-of-the-art testing equipment

To accelerate market entry, VinFast hasrelied on partnerships with various foreigncompanies in terms of design, productionequipment and components To achieve alocalization rate of 60%, VinFast has alsocooperated with international suppliers toestablish component factories in the complex in Hai Phong In June 2018,

VinFast signed a Memorandum of Understanding to establish a joint venture with Aapico Hitech Plc., one of Thailand's leading auto parts manufacturers, to build a body shop in Thailand complex to supply VinFast products VinFast alsoplanned to have eight auto parts factories set up, including four factories

invested by VinFast, two joint ventures between VinFast and suppliers, and two factories wholly owned by VinFast supplier At the same time, the company alsoacquired GM Vietnam, including a factory in Hanoi, dealer network and staff VinFast's Fadil model is manufactured under license from GM

VinFast seems to have a vision for the future In the initial phase, the company will develop cars using internal combustion engines, but it also plans to catch upwith industry trends by developing battery electric vehicles through its

partnership with EDAG company Engineering of Germany VinFast's mission is

to become the leading automobile manufacturer in Southeast Asia and build a

auto industry VinFast President, Ms Le Thi Thu Thuy, has affirmed that the company wants to target a luxury brand and will also expand exports to foreign countries Thus, not only is VinFast determined to fulfill its goal of producing cars in the Vietnamese market, but VinFast is also making great strides to

realize its ambition to export Vietnamese cars abroad

MARKETING ENVIROMENT

Marketing environment is the combination of the actors and forces outside marketing that affect the company’s ability to build and maintain

successful relationships with target customers Marketing environment

includes: the macro-environment and the micro-environment

A THE MACRO–ENVIRONMENT:

1 Demographic environment :According to the Vietnam Statistics Office published in 2019, the total population of Vietnam is about 96.484 million, of which the percentage of men accounts for 49.8%, making it the third-most populous country in Southeast Asia The employed population aged 15+ is about 49.9 million, the services account for the highest rate with 39% and the lowest is agriculture with 28% The two cities of Vietnam, Ha Noi and Ho Chi Minh City have a population

density 10 times higher than the whole country at 2.39 people/km2 and 4.363 people/km2

The above data shows that the demand for car ownership in Vietnam is very high at the present and will continue to increase in the future because the population size is getting bigger and bigger, the quality of labor resources is improved Due to the pioneering in car manufacturing in Vietnam, VinFast has many advantages from the domestic market, the proof is that in September

2017, Vingroup’s car company successfully tested their first car model – Lux

SA 2.0 which created a fever throughout the media, car lovers in particular and Vietnamese people in general

2 Economic environment:

For luxury goods such as cars, customers' s income has a greatinfluence on product consumption, especially in the upper-class and middle-class According to the General Statistics Office, the average income per

person per month in the whole country in 2020 at current prices is about 4.23 million VND, down about 2% compared to 2019 In fact, the income of

Vietnamese people is still growing quite well, which creates favorable conditionsfor people to have the opportunity to access luxury products such as cars,

electric vehicles, etc

3 Natural environment:

Natural factors in Viet Nam are exploited by VinFast such as terrain, rain,land, climate, weather, etc Besides that, the climate change is increase, whichbecomes a problem for the car industry

According to the Tuoi Tre newspaper,VinFast has produced 15.000 Klaraelectric motorcycles that consumers canmove freely and still reduce emissionsinto the air In addition, they also haveenvironmental protection campaignssuch as ‘Vi tuong lai xanh’, ’15.000 nguoi chung tay cung VinFast giam o nhiem moi truong’, etc VinFast has policies to help businesses create products that are not only quality but also adaptable to natural conditions This inspires

their customers, especially young people to be environmentally conscious and also contributes to raising their brand.

4 Technological environment:

Science and technology are important factor that helps a first Vietnamese car brand like VinFast compete with other famous brands in the domestic market and can reach out to the world in the future

Although most of the components are imported, VinFast has appliedmodern science and technology in assembly such as using robots in mostproduction processes, which help speed up production, high accuracy andsafety for humans

5 Political environment:

Vietnam is a politically stable country, riots is rare, the problem of corruption is gradually being overcome so the economy in general and the car industry in particular are not affected by politics much On the other hand,

because of the tension in the relationship between Vietnam and China, VinFast encountered certain difficulties in importing components from China Besides that, according to the online newspaper VTV, for domestically assembled cars, before Decree 57/2020 of the Government, car assembly enterprises still had to pay tax on imported components for domestic assembly The average tax rate is30% to 45% depending on the type of car components or assemblies imported

to Vietnam, which also limits VinFast’s car production

becoming a popular means of communication in urban areas and also

gradually appearing in rural areas

B THE MICRO-ENVIRONMENT:

1 The company:

The board of directors has a great influence on the decisions, plans, and operational goals of the enterprise VinFast company is a member of Vingroup founded by Mr.Pham Nhat Vuong, managing director by Mr James Benjamin DeLuca and Le Thanh Hai and several other leaders

In terms of infrastructure, according

to Wikipedia, VinFast has a main production and assembly plant located in Hai Phong City, The factory covers an area of 335 hectares with a total investment of 3.5 billion USD and is one of the largest industrial projects in Vietnam.The company cooperates in technology, engineering, strategic consulting

support, human resource training with the largest global manufacturers of

automobiles, spare parts and heavy industrial equipment such as BMW,

Siemens AG, ThyssenKrupp, etc

2 Suppliers:

To achieve the goal of producing high-quality cars that meet international standards, VinFast has focused on finding qualified parts and components suppliers Some VinFast’s suppliers such as VAPA provides plastic

components, ABB provides 1200 robots for production, etc

(VinFast’s factory in Hai Phong)

3 Intermediaries:

Customers can search for VinFastproducts right on VinFast's website, atcar shows or at distribution places.Because VinFast develops an electricvehicle system that is not yet popular inVietnam, the distribution and

arrangement of charging stationsface many difficulties but still achieve certain

results According to Wikipedia, as of December

2020, the business has 55 showrooms, 30

authorized dealers, and 57 service workshops,

including 16 VinFast Chevrolet points Electric

motorbike dealer: 119 selling points, 80 warranty

points, 559 battery exchange and charging

stations

4 Customers:

Customers are the most important in micro-environment VinFast targetsthe consumer markets In addition, they have many programs aimed at puttingcustomers first Gifts such as gifting luxury resort packages even after buying acar for a year show the respect of VinFast for their customers

Mr Ngo Duc Hai, Director of Strategy - Markets Funzilla Vietnam Company highly appreciates VinFast's respect for their customers, "The

(VinFast’s electric car charging station in Long Bien)

principle of 'selling goods is not the complete end of the transaction' needs to

be adhered to Businesses respect, just like how VinFast is doing," said Mr Hai

5 Competitors:

There are 2 types of opponents:

Direct opponent: major car brands in the world are popular in Vietnam such as Nissan, Hyundai, Toyota, etc In addition to good reviews, VinFast also received reviews which was inferior in some aspects to strong

competitors that already had a certain foothold in the Vietnamese market This shows that VinFast needs to improve their products more to be able tosatisfy their customers

Indirect opponent: motorcycle, electric bicycle, etc In fact, Vietnamese people now travel by means of small and convenient sizes such as motorbikes, bicycles or electric bicycles This becomes a big challenge for VinFast to assert the position of their products compared to other long-standing vehicles

6 Publics:

VinFast approaches their customersthrough media such as TV, newspapers,

social networking platforms such as

Facebook, Youtube, etc They also use

influencers such as Ngo Thanh Van, Son

(Ngo Thanh Van)Tung MTP to increase brand awareness

S-T-P ANALYSIS

Student, start up, stay

at home mom, elderly

Go out rarely or just

for school

Price conscious

Age: 21-35Income: 30-60MWorking

Have a busy life

Dynamic

Go out often

Focus on personal brand building

Price conscious but also

Age: 36-60Income: 500M or more.Working

Buy products for family

cares about quality.

VinFast becomes the first Vietnamese car brand arouse national pride,especially young people With a modern and dynamic and luxurious design,their products can make the customers satisfied with the quality that matchesthe price Moreover, VinFast also develops electric vehicles to help protect theenvironment and spread meaningful messages to their customers

VinFast’s customers often buy products through distributors Although there are some comments complaining about the quality, VinFast products still, make the majority of customers satisfied and they will recommend to the friendsabout thier products

1 VinFast Electric Bike:

1.1 VinFast Impes and VinFast Ludo:

Have girly designs, small, easy

to drive in a crowded city

Social Class: Middle

Live in the city

Lifestyle: Modern

Use for a small family

2.2 VinFast Lux A2.0:

Ages: 15-55

Live in City.

Income: High

Social class: Middle and High

Lifestyle: Modern

Use for companies or a family with less than 4 people

2.3 VinFast Lux SA2.0:

Ages: 35 - 55

Income: High

Social Class: High

Live in the city

Lifestyle: Modern

Use for a big family with more than 4 people

C POSITIONING:

1 National pride - The first Viet Nam dometics brand

The position of VinFast in customers' minds: national pride

VinFast is the first time inhistory, a company founded

by Vietnamese to produce acar Before introducedVinFast create a design voteinfluenced million Vietnamesepeople

In November 2018, VinFast Lux A2.0 and Lux SA2.0 introduced in the Paris Motor Show with David Beckham created a huge event that was reported by a lot of newspapers, magazines and TV A car “made in Vietnam” appears in one

of the biggest car events in the world which impacted people a lot

2 Low price high quality:

The VinFast car always has the price of lower classification and quality of

higher classification:

VinFast Fadil with classification A

- Minicompact - car price but has a 1.4L

I4 engine which only appears on classification

B - Subcompact car It was developed based

on Opel Karl Rocks - a Germany car brand

(BMW Series 5)engine

(Opel Karl Rocks)

VinFast Lux A2.0 has classification

D - Large Family car -, but it has2.0L BMW-N20B20 I4 T engine and8-speed ZF 8HP automatic

transmission gearbox which was developed based on a classification

E - Luxury car - BMW Series 5

VinFast Lux SA2.0 like Lux A2.0 uses an engine and gearbox which was developed based on the BMW X5 - a Luxury SUV Car

MARKETING MIX

quality products Many opinions on automobile forums believe that VinFast cars

have good quality, even if to compare with German or American car brands

Specifically, a famous motorist said that the Lux SA2.0 has the same quality as

about 85% of a BMW in the same segment, but the price is only

45% He said:"If you are a smart consumer then you should buy VinFast" So,

manufactured by VinFast according to BMW technology, guided and

supervised by BMW experts, and other details are provided by the world's

leading famous manufacturers such as the box ZF numbers, Bosch

accessories… Besides, the car has also passed hundreds of the most severe tests of leading European laboratories So, the ride quality is very good Not only that, VinFast is also the first automobile factory in Vietnam to share the world's leading high-automation, synchronization and completion cycle

Currently, VinFast is manufacturing cars with 6 factories that are

interconnected and automated with thousands of ABB robots and equipped with Siemens and SAP intelligent production operating systems

According to VinFast, "Putting customers' peace of mind first, VinFast cars are equipped with the most advanced safety features to protect the driver and all passengers on board, meeting the rigorous standards of rating agencies

leading prestigious car prices in the world such as ASEAN NCAP, EURO

NCAP, NHTSA "

2.1.2 Features:

While German cars aim for luxury and sport style and Japanese cars aim for durability, VinFast asserts itself by its distinct values Their core values are: World-class quality: Bringing together the best of the world's car industry to create cars that meet international standards Optimal value: Bringing high-end features to serve the modern lifestyle of customers Customers are companions:Connecting customers with the Vingroup ecosystem to ensure long-term value and experience for VinFast owners

VinFast aims at the German driving experience and the durability of Japanese cars with prices in the middle of German and Japanese car prices

2.1.3 Style and design: