HEORETICAL FRAMEWORK FOR BUILDING NATIONAL

Microsoft Word Tomtat Luan an THATSANADEUANE KHAMKEO Tieng Anh 24 3 1 CHAPTER 1 THEORETICAL FRAMEWORK FOR BUILDING NATIONAL EXPORT MARKETING STRATEGY FOR MAJOR AGRICULTURAL PRODUCTS 1 1 Nature and rol[.]

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CHAPTER 1 THEORETICAL FRAMEWORK FOR BUILDING NATIONAL

EXPORT MARKETING STRATEGY FOR MAJOR AGRICULTURAL

PRODUCTS

1.1 Nature and role of the national marketing strategy for major export

products

1.1.1 Definition and levels of strategy

1.1.1.1 Khái niệm chiến lược Definition of strategy

A strategy is an entity’s oriented plan in a long time, along with a system of

policies, measures and resource’s allocation ways to perform to meet the market

demand

1.1.1.2 Levels of strategy

a National socio – economic strategy

A national socio-economic strategy is a document that determines the long -term

vision and directions for the development of that nation on key areas such as

economic, social, environmental and public management The national

socio-economic strategy is generally drafted by the government and its agencies

b Industry’s/Sector’s strategy

An industry’s/sector’s strategy is a medium or long term action plan to achieve

certain development goals Goals are the destination that the industry/sector are set

out and strive to achieve in a certain period of time in the condition of resources

available or expected to be able to mobilize The contents of this strategy are

specified into programs and development projects, shaping the impact factors,

mechanisms and policies to implement the goals of the industry/sector, mining its

potential and advantages that take place in each region/locality, to serve development

objectives of that industry/sector

c Functional strategy

A functional strategy is often the overall strategy and aims to coordinate

strategies in relation to the expectations of strategic subjects A functional strategy is

usually a part of the industry/sector strategy as a tool to achieve the objectives of the

industry/sector strategy A functional strategy may include factor strategies such as

human resource development strategy, information technology strategy, infrastructure

development strategy or tools like marketing strategy, promotion strategy, brand

development strategy

1.1.1.3 Components of a strategy

a Strategic objectives

Strategic objectives can be considered as specific, clear and viable aims of the

strategy for the short and/or the long term

b Strategic solutions

When buiding a strategy,planners must determine the key factors to ensure

2 success They are the solutions to implement strategic objectives

c Conditions to implement the solutions

To implement the strategy, there should be conditions to turn strategic objectives into reality The conditions for the implementation of the strategy include the objective subjective conditions to the strategic subjects

1.1.2 Definition and nature of national marketing strategy

Export marketing strategy of a country at the macro level can be considered as:

"The whole business of export marketing logics that help the country achieve the structural balance, climate adaptation to the international trade and expected performance efficiency of export marketing objectives on an export identified market

in a certain long-term period"

The nature and the content of the export marketing strategy of a country can be considered as follows:

- Each export marketing strategy is tied to a certain commodity (or group of commodities), to a defined startegic market segment for certain long period of time

- An export marketing strategy includes the selection of strategic export market export methods, targeting and positioning product quality on selected export markets

- An export marketing strategy has connotations including export product strategy, export pricing strategy, export distribution and logistics strategy, export promotion strategy, product’s and enterprise’s brand strategy to meet the established strategic export markets

- An export marketing strategy also includes the deployment of resources for tools and strategic marketing efforts: strategic marketing budget, marketing information system, marketing organization, marketing strategy’s human resources and leadership

1.1.3 National major agricultural export product

1.1.3.1 Definition of product

A product is a thing that can be ordered to a market to satisfy a want or a need Product is something to offer to the marketing to get attention, buying, using or consume to fulfill the desires or needs (Philip Kotler)

1.1.3.2 Definition and characteristics of agricultural product

a Definition of agricultural product

There are many definitions of agricltural product Agricultural product means agricultural, horticultural, viticultural, and dairy products, livestock and the products thereof, the products of poultry and bee raising, the edible products of forestry, and any and all products raised or produced on farms and processed or manufactured products thereof, transported or intended to be transported in interstate and/or foreign commerce (US) Or agricultural products are products derived from agricultural, manufactured and supplied for the purpose of trade, including farmers' products directly produce and processed foods derived from agriculture (TWO)

b Characteristics of agricultural product

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- The process of producing , harvesting and trade of agricultural products is

seasonal

- The quality of agricultural products directly affect the health and lives of

consumers

- There are many kinds of agricultural products, so the quality of the same

category is also very varied

So that, the issue of identifying target and potential markets play an important

role in agricultural product export for a country

1.1.3.3 Major agricultural product

A major/key/main product is understood as principal product/service that can be

produced/supplied in large quantities with high competitiveness, and can be locally or

nationally peculiar

A major agricultural product of a country is a product of agricultural origin

which it is capable of producing and exporting in large scale, having a large share in

the structure of export products of the country, with high competitive advantage in

the international markets, with large export markets and potentially long-term

development

Major export agricultural products have some characteristics:

- It is a product that the country has the capacity to produce and export at a large

scale and with high uniformity

- It is a product that has international competitiveness

- It is a product that has specific characteristics for the country while the same

product of other countries do not have or can not match

- It is a product that is safe and environmentally friendly

1.1.4 Rationals for buiding a national export marketing strategy for major

agricultural products

The national export marketing strategy for major agricultural products plays an

important role in implementing the objectives to boost exports of agricultural

products, promote socio-economic development for the country This role can be

specific as follow:

- Creating incentives and new factors to promote exports in the context of

increasingly fierce international business environment

- Contributing to economic restructuring process, creating new jobs and

contributing to improved incomes for workers, particularly farmers, to improve living

standard of the people; contributing to the division of labor in the direction of

industrialization and modernization of the country

- Contributing to export development by exploiting comparative advantages,

sustainable development towards sustainability and efficiency; contribute to the

export turnover and export growth of that country The main export products are

items that can be leveraged and exploited such comparative advantages of the

country's manufacturing and exporting as cheap abundant hardworking labor

4 resources, rich natural resources, local/regional/national unique products, thereby making the production and business activities of farmers, business operations of argicultural export firms more efficiently

- Contributing to building national brand positioning for agricultural products in international markets; improving awareness and recognition at the international scale for the position and brand of the country’s major agricultural products; building a reputation for quality and value of products; promoting strengths in manufacturing and exporting of major agricultural products of the country, in terms of exploiting comparative advantages, improving competitiveness and enhancing the benefits to the country in the global agricultural value chain

1.2 Model of buiding a national export marketing strategy for major agricultural products

1.2.1 Principles for buiding a national export marketing strategy for major agricultural products

A national export marketing strategy for major agricultural products must address three key contents: (1) Identifying strategic objectives: to satisfy the needs of customers (including foreign importers and consumers of agricultural products in foreign markets); (2) Forecasting the customers’ demand and trends of the import markets, analyzing the factors affecting customers’ demand and its trends, and (3) using the strategic tool to win customers - often referred to as the marketing mix The marketing mix strategies need to be tailored to the characteristics of the target export markets

1.2.1.1 Analyzing the situation and finding out attractive export opportunities

- Analyzing the international marketing environment

- Analyzing the national marketing environment

- Analyzing the environment of producing and exporting major agricultural products sector/industry:

+ Input conditions

+ Competitive structure within the industry/sector + Demand conditions

+ Related and supporting industries/sectors

- SWOT analysis

1.2.1.2 Identifying the objectives of the national export marketing strategy for major agricultural products

- In terms of scale of objectives:

+ The common general goals/objectives for the whole group of agricultural products such as main exportturnover, export growth, structure of agricultural products’ export, the proportion of processed products compared to raw products, export markets

+ The specific objectives for each commodity (rice, coffee, fruits and vegetables), each market (continent, country), each commodity group (raw,

semi-5 processed, processed products) , each content/specific stages in the entire process of

export

- In terms of time: There are long-term goals (from 7 to 10 years and longer),

medium-term goals (from 3-6 years) and short-term goals (usually 1-2 years)

1.2.1.3 Buiding marketing – mix strategies

- Strategy for major agricultural export products: Need to use the criteria to

determine what kinds of agricultural products are major/key products of the country,

the characteristics of these products satisfying the needs of customers in certain

markets

- Strategy of agricultural export prices

-Strategy for agricultural export product distribution: concerning the selection

and use of methods for export, selecting the importers and seting up and coordinating

business networks in foreign markets

- Strategy for export promotion: including policy measures that directly or

indirectly encourage exports of agricultural products of enterprises, industry and the

whole country

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1.2.2 Modelling the process of buiding a national export marketing strategy for major agricultural products

Source: The author

Figure: Modelling the process of buiding a national export marketing strategy

for major agricultural products

Identifying marketing – mix strategies

Product strategy

Price strategy

Distribution and logictics strategy

Promotion strategy

Identifying the target market

Market segmentation

Selecting target markets

Selecting export methods

Positioning export market

Environmental analysis and identifying strategic export objectives

Updating the information and idendifying

strategic changes

Marketing strategic analysis for export

markets

Identifying the target and direction for buiding marketing export strategy

Identifying resources for implementing the strategy

Identifying the budget

Identifying the institution

Identifying human resource

Identifying information system

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1.3 Content of buiding a national export marketing strategy for major

agricultural products

1.3.1 Analyzing the export environment and setting up the strategic objectives

1.3.1.1 Updating the information and idendifying strategic changes

The marketing strategy planners have to research and investigate to update the

strategic information through the synthesis and analysis of information about the

environment that affect marketing activities of national agricultural products’export

1.3.1.2 Marketing strategic analysis for export markets

To analyze the marketing strategy for the country, it is necessary to identify

the real situation of existing export marketing strategies, identify the movements of

these strategies, analyze the opportunities and threats, strengths and weaknesses, from

which to draw conclusions on the situation of existing export marketing strategy

1.3.1.3 Identifying the target and direction for buiding marketing export strategy

The marketing strategy planners for major agricultural export products of the

country can choose among WO, ST and WT, SO strategic combinations to find a

suitable ones

1.3.2 Iddentifying the target markets

One of The things need to do first when developing a marketing strategy is to

identify strategic export markets The subject of a marketing strategy in this case is

the main agricultural products of the country

1.3.2.1 Market segmentation

Segmentation is the detail edprocess of marketing to divide the overall export

market into smaller structures (segments) Each segment has it own parameters,

characteristics in terms of customers’ behavior, different from other segmets that

marketing managers can employ effective marketing mix on it In the framework of

this thesis, segmented by geographical and income criteria are considered suitable to

reseach the process of buiding marketing strategy for agricultural export of Lao PDR

1.3.2.2 Selecting target markets

For agricultural export, the assessment of market segments can be done by

usinng some main criteria: (1) current and potential size and growth rate of market

segments, (2) the attractiveness of the market segments assessed by using the Michael

Porter ‘s five-forces model

1.3.2.3 Selecting export methods

Marketing strategy plannners can choose different ways to create and affirm

their position on export markets There are three main export methods : ( 1) direct

export, (2) indirect export and (3) export cooperation ach method has its own

advantages as well as disadvantages

1.3.2.4 Positioning export market

Market positioning for major agricultural export products of the coutry

include sthe choice of positioning strategy: (1) Positioning on a certain characteristic

of the product, (2) Positioning on the ability to satisfy customers’ demand of the

8 product, (3) Positioning on the uses of the product, (4) Positioning by classes of customers, (5) Positioning by comparison with the competitors (6) Positioning with other types of brands

1.3.3 Identifying marketing – mix strategies

1.3.3.1 Product strategy

Major agricultural export products of a country are products of agricultural origin which can be producing and exporting at a large scale, have a large share in the structure of export products of the country, with competitive advantages on the international markets, with large export markets and potentially long-term development They are products with high quality and technical standards that meet international standards , with good export possibilities, gain the upper hand in competition with the same products of other exporting countries Thus, in the marketing mix strategy, it is necessary to clearly identify the strengths , the specificity of these products to create a product structure in line with the target export markets

1.3.3.2 Price strategy

Pricing strategy may provide a uniform price for all products on the market, or adapted prices in each market area Moreover, it may define the general parameters for all markets and use them when deciding the prices

1.3.3.3 Distribution and logictics strategy

Source: The author

Figure: Channels for distribition of major argicultutal products

1.3.3.4 Promotion strategy

Export promotion activities in agricultural export marketing strategy of the country can be implemented at many levels: international, national and business/firm level In the framework of this thesis, export promotion is considered at a national level, which focuses on export promotion activities of the government and government agencies

associations

Producers

International markets

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1.4 Factors influencing the buiding of national export marketing strategy for

major agricultural products

1.4.1 International factors

1.4.1.1 WTO rules for agricultural products export

- The member countries of the WTO is required to comply with the WTO

rules on agricultural exports (expressed in the Agreement on Agriculture of the

WTO), which focus on three key issues: Market Access; domestic production support

and export subsidies

- The other non-tariff measures within the WTO framework related to

agricultural products: include primarily measures such as the FAO Food Standards;

Agreement on the application of SPS; The WTO Agreement on Technical Barriers to

Trade (TBT)

1.4.1.2 Characteristics of import market

- Demand of the import market

- Policies and mechanisms of the import country

1.4.1.3 General situation of the international market

In the period of international economic integration, international environment

has an important role affecting the operation of a national export The basic elements

of the international market include: the world's political situation (stable or unstable);

world economic situation; trend of trade liberalization; international commercial

activities , the volatility of world agricultural markets

1.4.2 National factors

1.4.2.1 The government’s opinions and policies on export and export boosting

Typically, developing countries choose to exploit the possible comparative

advantages suchh as abundant and cheap labor forces, mineral resources and

agricultural products From the point of export orientation, export is considered to be

the driving force for growth, the entire system of policies are mainly aimed at

encouraging and strengthening export with the general principle is to ensure that

manufacturers gain better if sell their products abroad Government's point of view on

exports and boosting exports that affect the establishment of the strategic objectives

as well as measures for export , tools and resources for implementing the strategy of

exporting countries

1.4.2.2 Capacity of government agencies related to buiding national export

marketing strategy for major agricultural products

Buiding the national export marketing strategy for major agricultural

products consists of many operations related to the functions, duties and activities of

different regulatory agencies Capacity and qualifications of those bodies affect the

quality of the built marketing strategy

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1.4.2.3 Relations among local and central authorities and enterprises in the process

of buiding national export marketing strategy for major agricultural products

There should be two dimensional consistency from top to bottom (from the central authorities to local authorities and then enterprises) and from bottom to top (in reverse ) in strategic direction, implement solutions and allocation resources to implement the strategy

1.4.2.4 Central and local system to operate, manage and implement the strategy

In the process of building national export marketing strategy for major agricultural products, it is necessay to clearly identify: the agency responsible for drafting, the agency responsible for providing kinds of information, the agency responsible for consultation, the agency responsible for monitoring the results There should be clearly defined mechanism of action, coordination among agencies related to the strategic planning process both vertically (central - local - business) and horizontally (state management agency on agriculture - state management agency on the market and export - state management agencies on infrastructure, information, land ) At the same time, route, steps and timeframes should be defined clearly and should be followed closely to obtain the best results

1.4.2.5 Resources for buiding and implementing national export marketing strategy for major agricultural product

Resources for building and implementing the strategy include:

- Human Resources: it is necessay to mobilize experienced professionals who are capable of strategic planning

- Financial resources: budgets for planning and implementing strategies

- Information resources: information systems and forecasting of the global market, the production and export of major agricultural commodities, information about partners and import markets

- Technological resources and tools to plan and execute the strategy

CHAPTER 2 PRACTICAL FRAMEWORK FOR BUILDING THE NATIONAL EXPORT MARKETING STRATEGY FOR MAJOR AGRICULTURAL PRODUCTS OF LAO PDR TO 2020 2.1 Overview of socio - economic development of Lao PDR recently

Over 35 years, Lao PDR has achieved great successes in socio-economic development, expressed as the followings:

- The economy has continued development, GDP growth has increased (from

1996 to 2014)

- The economy has attracted more foreign investment, including the source of official development assistance (ODA) and foreign direct investment (FDI), played

an important role in GDP growth of the country

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- Relatively good in inflation control

- There have been many measures, including important policies to increase tax

revenue and tax costs, revised budget and expenditure management, thereby

promoting economic development These reform efforts aimed at consistent

implementation many objectives: moving from planned economy to market economy

and the shift from an subsistence economy based largely on agriculture to an

economy based on services and production controlled by the goverment, by the

market forces and private initiatives

- Lao PDR is positive, proactive in external relations with other countries in the

region and the world Joining the World Trade Organization (WTO) on the day

02.02.2013 as the 158th member of this organization Lao PDR has established

diplomatic relations with 130 countries and regions; developed international trade

relations and exports to 80 countries and territories, and become a member of many

regional and international organizations

2.2 Overview of production and export of major agricultural products of Lao

PDR, 2003 - 2015

2.2.1 Production situation

2.2.1.1 Coffee

The planted area for coffee: Lao’s coffee is grown mainly in Bolyven Plateau,

with a total area (2014) is 84000ha, accounting for 98-99 % of the production area of

the country There are 3 main types of coffee planted Robusta and Arabica Coffee

yields an average hovering around 1.5-2.5 tonnes/ha

Processing and storage of coffee: In Laos, coffee is mainly processed by two

methods, that are dry and wet method It is estimated that industrial processing

capacity is from 18,000 tons to meet up to 20,000 tonnes of coffee exported, the rest

belongs to individual processing facilities, farmers homemade by the manual method

In particular, drying and storage stages is limited to reduce the quality of coffee

2.2.1.2 Vegetables

Bolyven Plateau is the place where vegetable production is a second priority

only after coffee Farmers producing fruit and vegetables for local consumption and

export to Thailand In 2010, total vegetable growing area reached 27 031 hectares,

production reached 262 426 tonnes In 2014 these numbers increased 36.748ha

535,361 tonnes respectively, up 1.2 times in area and 1.4 times in production

compared to 2010

Lao vegetable production is still carried out sporadic, not varied in terms of

category, the production operation is limited , management and operation mechanism

is still not well - connected together

2.2.1.3 Rice

Currently, rice is primarily serves the domestic market , only 30 % of total

production was exported in 2012 and 2014 production volume is reached 3.65 million

tons / year , up 11% with 2013

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2.2.2 Export situation

Export turnover: Major agricultural exports of Lao PDR has made great

progress in recent years They have been exported to more than 20 countries of all continents The quantity, quality and types of agricultural products export staple has significantly improved The structure of export products has gradually shifted toward promoting comparative advantage in international economic relations Major agricultural exports have contributed significantly to the socio-economic growth of the Lao PDR

Unit: USD mil

13.03 18.91 13.48 13.18

39.59 36.28 30.56 38.84

78.79

86.26 95.73

105.8 95.07

0 20 40 60 80 100 120

Source: Lao PDR Ministry of Industry and Trade

Figure: Major Agricultural Products Export Turnover of Lao PDR

The situation of exporting major agricultural products in terms of category: see

table below

(Unit: USD mil.):

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Coffee 9,78 10,92 15,86 9,73 8,92 29,76 23,62 14,80 22,45 63,06 66,47 72,74 80,34 9,85

Vegetables 1,46 1,66 1,89 2,15 2,44 5,91 7,70 8,97 10,38 12,24 16,65 19,23 21,25 22,55

Source: Lao PDR Ministry of Industry and Trade

The situation of exporting major agricultural products in terms of market area:

see table below

(unit: USD mil):

Market 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Asia 4,94 5,69 6,05 7,46 7,05 18,03 19,36 22,09 23,10 49,64 61,39 65,64 72,53 70,67

EU 6,66 7,34 12,84 6,003 5,63 16,28 13,41 7,12 15,48 23,07 24,54 29,48 32,57 22,49 USA _ _ 0,016 0,019 0,50 5,28 3,51 1,35 0,262 6,08 0,331 0,61 0,70 1,91

Total 11,60 13,03 18,91 13,48 13,18 39,59 36,28 30,56 38,84 78,79 86,26 95,73105,80 95,07

Source: Lao PDR Ministry of Industry and Trade

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2.3 Analysis of factors and resources for building the national export

marketing strategy for major agricultural products of Lao PDR to 2020

2.3.1 Current situation of export marketing strategy for major agricultural

products of Lao PDR recently

The thesis focuses on analysis the real situation of export marketing strategy for

major agricultural products of the Lao PDR as a strategic function in relation to the

overall marketing strategy as well as development strategy for major agricultural

products of the nation The reality is that there have been the elements, aspects and

content of the national export marketing strategy, but at a certain level, the real

export marketing strategy for the products does not exist ( in written, complete and

be published form) And this situation has an impact on development and results of

agricultural exports of Laos in different angles The same things happen at the

local/provincial levels There have been some content of the export marketing

strategy, but not yet formed an “real” strategy in this field At the enterprise level,

with the situation that a number of exporters have developed and executed marketing

strategy to export their agricultural products, it can be considered a good basis to

impact their export results

2.3.1.1 Environment analysisand identifying strategic export objectives of Laos

major agricultural products

Related to establish export goals/objectives for major agricultural products, Laos

government has implemented some strategies such as national export strategy,

Strategy for development Laos Coffee, strategy for development and trade processing

industry period 2011 - 2020 and the project to promote agricultural production of

consumer products (Smallholder develoment project - SHDP) In these strategies, the

objectives are to promote smallholder households, agricultural production and

processing combined with solid marketing activities with 5 content to do are:

- Operating activities for farmers involved in manufacturing group with solid

marketing work

- Strengthening the development of infrastructure, using modern equipment

before and after harvest agricultural items

- Improving the system of promotion, through technical service center for

agricultural products

- Completing the production team and marketing strategies in agribusiness

- Improving management systems and project management capacity

The buiding of agricultural export marketing strategy of the SHDP project is

apointed to three departments with uties as follows : Ministry of Agriculture and

Forestry for buiding product strategy, the Ministry of Industry and Trade for pricing

policies, distribution channels and promotion and the Ministry of Transportation for

transport infrastructure, especially rural roads

2.3.1.2 Identifying the target markets for Laos agricultural products

# Market segmentation:

14 Target export markets for agricultural products of Laos are defined as follows: the Asian market, a number of EU countries, and the US market This is the large-scale market with complex and diverse demand for agricultural products

These markets including basic market segments as follows:

(1) The major producers, often require and demand for high-quality products, ensuring food safety and very strict standards

(2) Intermediates with a relatively high income, easy and somewhat more open

to the needs of commodities (coffee, vegetables and rice ) Eligible customers are very interested in the quality and reasonable price

(3) Traditional markets, usually consumer demand is not high They are mostly concerned about price when choosing Laos items

In the aforementioned market segment , the 2nd and 3rd They are the segments with average or low standards These segments are relatively matching to Laos production capacity

# Selecting target markets:

Major agricultural products of Laos are coffee, vegetables and rice Choosing market – item pairs is suggested as follows:

* Items Coffee: the export target market is Asia , EU and USA

* Items Vegetables : mainly export markets of Thailand

* Items rice: target export markets are Thailand, Vietnam and China

# Selecting export methods:

Major agricultural products of Laos are exported by two methods: direct export and export cooperation with exports 2002 - 2014 total turnover of 582.05 million USD The two methods are widely applied with directl export for coffee items to EU market and export cooperationfor vegetables to Thailand

2.3.1.3 Identifying marketing - mix

Through legislation, the Lao PDR has a number of policies to promote agricultural exports They are:

First, policy for traders that create policies favorable conditions, stability, peace

of mind and encourage enterprises and economic sectors to develop export production

Second, export policy: Lao Government issued Decree No 205 dated 10/11/2001 on the management of the Export - Import items Business executive operation of the government has also been renovated

Third, market development policy: At the macro level, the activities of the government agencies in market development, trade promotion, develop bilateral multilateral trade relations and facilitate agricultural exports have been many attempts, but there are also many drawbacks

Fourth, Land Policy : The change in land policy that farmers is allocated to long-term land use rights have made steady acreage, yield and production of agricultural products of Laos is growing on

15 Fifth, investment policy: In the area of agriculture, investment policies for

agriculture and rural areas continue to be adjusted in the direction of investment

focus, investment stages cut inefficient or not urgent Create conditions to encourage

domestic investment and foreign investment so far , in addition to the construction

stages from the basic state budget had more other funds are mobilized in the

agricultural sector and rural areas, focuses on the manufacture and construction of

social infrastructure

Sixth, agricultural promotion and technology transfer policy: Government

constantly consolidate and improve on the knowledge and manufacturing experience ,

the need to provide information about science and technology for the production

increasing business In the short term extension policy has been widely deployed ,

network extension has been formed from the central to the grassroots

Seventh, export promotion policy: the operation of the Government for export

activities increasingly improved and perfected to encourage exports

Although management mechanisms export activities are more innovative steps

to make liberal trade environment, promote export activities but there are still some

limitations:

- The executive management is limited efficacy, especially the management of

export activities through the gate in central The task forces in the border area

(border police, customs tax authorities, market management ) east but lack unified

direction, while the direction and administration of the State management agencies at

the central level is not close, the people's Committees of the border provinces

unassigned general direction and management and decentralized management of

unified field activities

- Import management mechanism is not a positive impact to the formation of

export traffic channel In general, businesses are not concerned with the movement of

goods from production to export, thereby proactively sourcing organization,

organized storage, processing, enhancing the value of the goods At the same time

thereby ensuring the benefits for producers and exporters

- There is a lack of regulations on affiliates in export activities should also state

unfair competition , or imposing prices , causing damage to the economic interests of

business , loss of export opportunities

2.3.2 Resources for buiding the national export marketing strategy for Laos major

agricultural products

2.3.2.1 System of authorities and agencied related to the building of the strategy

Since the construction of the market economy and the participation of economic

integration with the world and the region, these factors help develop and expand the

market as trade promotion, marketing, distribution and logistics, advertising new

research interests and concretely implemented in the Lao PDR Laos has developed

and issued by the National Export Strategy 2020, Strategy coffee sector development;

Industrial development strategies and trade processing during fall of 2011 - 2020

16 However, this is the common strategy of export commodities, the markets; not a specific strategy in the field of marketing goods for export to the country's NSCL In the above strategies, the content related to the marketing and export of goods NSCL

is only a small part, not been focused in-depth analysis

The government agencies involved in the process of developing export marketing strategy NSCL Laos include :

First, the Ministry of Agriculture and Forestry of Laos, which is the unit directly Promotion Department agricultural and cooperatives, with macro management role in promoting agricultural production, implementation and completion producer groups, the organization of training courses and technical expertise for farmers , handing over the information system of the potential, quantity and quality of goods , promote the use of modern technology equipment in stages of manufacturing and processing, building mechanism and promote cooperation with partners in the country and abroad, to develop the agricultural sector in the direction of industrialization and modernization

Second, the Ministry of Industry and Trade, which is the unit directly Promotion Agency and product development, the role of macro management, promoting the business units in terms of offering and sales, management steering group Expo official domestic and international, general information about the situation of domestic production , encourage investment , export marketing strategy to improve the quality of products and export promotion organizations only direct export contract cooperation

2.3.2.1 Bugget and information for buiding the strategy

Finance: Funding for the construction of export marketing strategies of national strategy can be obtained from the following sources:

- National Budget: In transition economies, Laos has faced many financial difficulties, more over the years has not recognized the importance of a strategic quann export marketing should not inevitably limited funding for this activity Meanwhile, the budget allocation according to traditional rules also make it difficult for the allocation of financial resources for this activity

- Other funding sources: Until now, the fact that Project Promotion Project agricultural production into consumer products (Smallholder Develoment Project - SHDP) is providing financial resources mainly for the formulation marketing strategy

of Lao exports

Information: For information to build marketing strategies NSCL export, market research is extremely important

At the macro level, the identification of potential world market for export products of the country should be based on the study of the following 5 themes: (1) These rules, laws, regulations, international trade adjust the products (the rules of the WTO, bilateral agreements and multilateral, international conventions on agricultural products; the charter international commodity associations )

17 (2) The national trade policies of countries on agricultural products (policies of

the exporting countries, importers )

(3) The growth, morphology and size of the world market for agricultural products;

(4) Competition on a global scale, and in the water sector for agricultural products;

(5) The situation of prices and price fluctuations of agricultural products for export

In fact, market research provides information for developing strategies that have

not been done systematically

2.4 The advantages and disadvantages in exporting and buiding the national

export marketing strategy for major agricultural products of Lao PDR

2.4.1 The advantages

First, exports of agricultural products are the main growth Laos over the years, a

larger contribution to the total export value of Lao PDR

Second, the agricultural products of Laos retained the traditional export market,

has great potential as the Asian markets, the EU and the US

Third, based on the identification of major marketing opportunity, has identified

pairs of products and segment target export markets

Fourthly, deployed, raising the effectiveness of the method of direct export and

export co

Fifth, structural quality export commodities increasingly being developed in

line with market demand export target

Sixth, the contents of the export promotion unit for the products has been

focused state management, deployment coordination with foreign importers

Seventh, the business unit concerned agricultural products of Laos, development

resources export marketing strategy

2.4.2 The disadvantages

Firstly, most of the business units of major agricultural products Laos does not

update the information on the environment , the export market , not to apply the

effective analysis method to analyze the situation in order to identify opportunities

anvil export marketing threatened

Second, Laos potential strategy product development segment pairs are mainly

located in the market segment of consumers with the average, but in this segment of

Lao goods to compete harshly with the same products of other countries such as

Thailand and Vietnam

Thirdly, the development of products with its own brand of Laos, exporting

good quality products without chemicals have not been limited interest

Fourthly, Laos items exported to the target markets of key export average price

compared to the price of the world's countries and competition

Fifthly, content export promotion of Laos on target export markets with no clear

objective, efficient and low, coordinate promotions irrational, always passive and

dependent on importers foreign import

18 Sixth, distribution and export logistics distribution simple and depends on the distribution system by foreign importers Never an appropriate distribution strategy to gradually increase the ability to control distribution channels and actively implemented export logistics operation

Seventh, marketing strategy funds are insufficient in quantity and inappropriate allocation, organizational scale marketing and human resources are limited

CHAPTER 3 ORIENTED SOLUTIONS FOR BUILDING THE NATIONAL EXPORT MARKETING STRATEGIES FOR MAJOR AGRICULTURAL

PRODUCTS OF LAO PDR TO 2020

3.1 Strategic orientation for development of major agricultural products export

of Lao PDR to 2020

3.1.1 Socio – economic orientation of Lao PDR to 2020

The Socio-economic development Plan of the Lao PDR phase 2011 - 2015 and

2020 identified four orientations:

- General objectives: enhance national economic development and sustainable continuous, 2020, the total national product per capita GDP reached 1900 USD Create dramatic changes in the development of science and technology, promote the human factor, basically creating more jobs for the people to poverty reduction, to bring the country out of Laos least developed countries in 2020 Define development goals is to build Laos into industrial water infrastructure - modern technology, rational economic structure, relations of production progress, material life and high spirits Building an open economy, strong export oriented, and import substitution of domestically produced products effectively

- Continued development and agriculture and forestry to the next level on the basis of the application of scientific advances and technologies Construction of regional agricultural production focus, of high-tech agricultural zones with modern production methods, linked to primary processing and high quality processing and transfer of science and technology, building extension system agriculture to assist farmers and agricultural enterprises obtained new techniques Promote the development of the service industry and the diverse industries in rural areas, focusing

on the processing industry, mechanical engineering for agriculture, villages

- On the objectives and orientation of macroeconomic development: Ensuring the growth of the total gross domestic product (GDP) increased by 8% or more, in which agriculture and forestry sector increased by 3.5%, accounting for 23% of GDP, industry 15%, 39% and services increased 38% to 6.5% of GDP On investment, attract investment 32% or about 127 trillion kip, including the state budget from 10

-19 12% 24 -26% ODA, FDI 50-56% of bank credit and 10-12 %, the forecast of the

investment structure of the state, such as economic sector accounted for 30%,

sociocultural accounted for 35%, infrastructure construction accounted for 35%

Inflation trying to maintain status boost and dropped no more than 5% On import -

export strengthened turnover value - the expected imports and the needs of the

development and investment

- Orientation for development of agricultural sector to 2020 : Exploiting the

potential advantages in agricultural production , development of a large plain 7 ,

ensure food sustainability , supply of raw materials for the processing industry ,

promotion producing clean agricultural products , not chemicals to meet the domestic

market and export

The overall objective of the 2020 food production of 4.2 million tonnes of rice ,

the ratio of production capacity of 4 tons / ht , trying to produce the same average rice

export more than 1,000 000 tons / year

3.1.2 Developemnt objectives for major agricultural sector of Lao PDR to 2020

First, develop key agricultural commodities (rice, coffee, fruits and vegetables)

are potential items strengths in product prices, output, quality, favorable

environmental conditions and labor skilled production longstanding tradition, towards

specialization and modernization, creating items leap Facilitating agricultural sector

growth, stability, sustainability and efficiency

Second, export-development goals for the whole sector, expanding export

markets and maximize local market Focus thriving agricultural products processing

industry, production of raw materials to meet the domestic market and abroad, reduce

the deficit and raise the added value of products in the industry

Third, management and development of human resources in both quantity and

quality for sustainable development key agricultural sector

Fourth, develop farm produce processing industry to become one of the key

industries , key to export , to meet the increasing demand of the domestic market ,

foreign and high competitiveness , using new technologies , mechanical or technical

means modern employers with human resources specialized in the production line

processing of agricultural products , creating more jobs for the society , improve

competition , contributing to the country's economy strong economic integration and

world region

Fifth, ensure that the business units effective agricultural development based on

new technologies , advanced ; system of total quality management ; labor

management , environmental management according to international standards

Some specific targets for key agricultural products (rice , coffee and vegetables)

of Laos:

20 The total area planted to major agricultural products is 2,220,413 hectares, of which:

Rice: 2,040,413 hectares of land areas,to the use of fertilizers and chemical micro average of 250-300 Kg./ 1ha , new possibilities increase productivity around 4 -5 tonnes / 1 ha ( Source: Ministry of Agriculture and Forestry)

Coffe : Goals from now to 2020, Lao coffee sector choose the safest figure is 02 million bags of coffee that is 120 thousand tons/year With goals from now until

2020 the ability to increase the area to 120,000 ha (Source: Ministry of Agriculture and Forestry of Laos )

Vegetables : 60,000 ha , with output reaching 774 700 tonnes , with export turnover reached US $ 62.59 million forecast in 2020

3.1.3 Some forecast to the potential of major agricultural export of Lao PDR to

2020

3.1.3.1 In terms of export turnever

The export turnover of the Lao PDR period 2011 - 2015 and 2020 to reach toward the average growth rate of 12 -18 % / year In 2015 , the total export value was 3110.48 million, the share of exports in GDP of goods is 17 %, including agricultural products reached 213.48 million US dollars accounted for 6.86 % of total export turnover By 2020 that figure equates to 7.115,20 million Focusing on improving the added value and quality of each product exported , reduced exports of crude processed , increasing the share of processed goods using new technologie, promoting exports

Concentrating production of high quality products (clean agricultural products, farm produce finished products), use of modern technology in the production line, in accordance with market demand and to receive tax incentives from the partner countries imported products Agricultural output period 2016 - 2020, growth in exports

is 18/year, agricultural product exports include Lao PDR, coffee, rubber, cashew nuts, fresh vegetables (products in project contract farming projects), sticky rice

Table: Expected export turnover of Lao PDR to2020

Unit: USD mil

2 Agricultural export turnover 118,66 213,48 488,39

3 Major agricultural export turnover (3 items) 38,84 95,07 217,50

Source: Lao PDR Ministry of Industry and Trade