Theoretical background on marketing mix for consumer goods

Internal enviroment...28 CHAPTER 3: CURRENT SITUATION OF MARKETING MIX FOR BOILER AT DONG ANH PRESSURE EQUIPMENT JSC...31... Second is the price of the boiler products on the third.DPE's

My thesis could be impossible to be successfully accomplished without thevaluable support of my supervisor, my directors, managers as well as my colleagues

in Dong Anh pressure equipment j.s.c

First of all, I would like to express my special thanks to my thesis supervisor–Prof Vu Minh Duc, for his patience, support as well as guidance while I wascarrying out this research Furthermore, he was also willing to give me a wide range

of intellectual advice and contributing comments which made a great contribution tohelp me achieve the best results

Next, I would like to express my warm thanks to the committee members of

my thesis trial defense because their guidance and assistance in reviewing anddeveloping my research in order that I could complete my thesis as today

From the depth of my heart, I also express my special thanks to the Board ofDirector 's Dong Anh pressure equipment j.s.c, who always spent his valuable timeproviding and sharing me with a great deal of useful information in relation to thecurrent operation of the company At the same time, my colleagues were veryenthusiastic and willing to help me anytime, and simultaneously motivate methroughout my study

Many thanks are also due to my best friends and my classmates at MBA15A for their warm friendship and supporting with many good memories.Finally, I would like to express my deepest gratitude to my family and my friendsfor their encouragement and support for my thesis

E-Thank you and wish you all happiness and success!

Student

Dao Son Tung

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

EXECUTIVE SUMMARY 1

CHAPTER 1: INTRODUCTION 3

1.1 Rationale 3

1.2 Research Objectives 4

1.3 Research Questions 4

1.4 Research Methodology 5

1.4.1 Research Process 5

1.4.2 Secondary data collection 5

1.4.3 Primary data collection 5

1.4.4 Data analysis 6

1.5 Research Scope 7

1.6 Research Structure 7

CHAPTER 2: THEORETICAL BACKGROUND ON MARKETING MIX FOR CONSUMER GOODS 8

2.1 Marketing and marketing mix for consumer products 8

2.1.1 Marketing 8

2.1.2 Marketing mix 9

2.2 Elements of marketing mix for consumer products 10

2.2.1 Product 10

2.2.2 Price 16

2.2.3 Place 21

2.2.4 Promotion 23

2.3 Factors affecting marketing mix 28

2.3.1 External enviroment 28

2.3.2 Internal enviroment 28

CHAPTER 3: CURRENT SITUATION OF MARKETING MIX FOR BOILER AT DONG ANH PRESSURE EQUIPMENT JSC 31

3.1 Overview of Dong Anh pressure equipment and boiler 31

3.1.1 Overview of Dong Anh pressure equipment 31

3.1.2 Overview of boiler 34

3.2 Analysis of marketing mix for boiler at Dong Anh pressure equipment jsc 35

3.2.1 Market and target customers of the company's boiler products 35

3.2.2 Product policy 37

3.2.3 Price policy for boiler products 41

3.2.5 Promotion policy 45

3.3 Achievement and shortcomings 47

3.3.1 Achievements 47

3.3.2 Shortcomings and reasons 48

CHAPTER 4: RECOMMENDATIONS TO IMPROVE AND DEVELOP MARKETING MIX FOR BOILER AT DONG ANH PRESSURE EQUIPMENT JSC 51

4.1 Boiler's development orientation of Dong Anh pressure equipment jsc 51

4.1.1 The general development direction of the company 51

4.1.2 Develop the business of boiler products 53

4.2 Recommendations to improve and develop marketing mix for boiler at Dong Anh pressure equipment jsc 54

4.2.1 Market segmentation 54

4.2.2 Target market selection 55

4.2.3 Research and develop new boiler products 55

4.2.4 Improve the competitiveness of the price 56

CONCLUSION 57

REFERENCES 59

APPENDIX 1 IN - DEPTH INTERVIEW WITH DIRECTOR 60

APPENDIX 2 IN - DEPTH INTERVIEW WITH MARKETING MANAGER 61

APPENDIX 3 IN - DEPTH INTERVIEW WITH 05 EXISTING CUSTOMERS .62 APPENDIX 4 SURVEY FORM 63

SURVEY RESULTS 66

LIST OF TABLES

Table 3.1: Products of DPE 33

Table 3.2: DPE's revenue from 2015 to 2017 34

Table 3.3: Some of DPE's major partners 37

Table 3.4: Some types of DPE boilers 39

Table 3.5: Price before and after the factory 42

Table 3.6: Expenditures for advertising boiler products in 2017 46

LIST OF FIGURES

Figure 2.1: Marketing - mix model in the business 10

Figure 3.1 Organizational structure of DPE 31

Figure 3.2: Current distribution channel 43

Figure 3.3: The ratio of sales between direct sales and indirect sales 44

EXECUTIVE SUMMARY

Dong Anh Pressure Equipment j.s.c is one of the companies that producepressure equipment such as boilers, industrial valves in Vietnam With more than 27years of development history, The company is currently developing sustainably, isgradually expanding the search for customers and expand market share in DongAnh district and industrial parks in the neighboring provinces Extremely, in thecompetitive economic context, DPE now not only has to turn its forcus on thecompetition with domestic competitors but also foreign competitors Because most

of companies focus on building brand name and brieng its brand closely tocustomers by many different marketing program Therefore, marketing mix is veryimportant to each firm

Boiler is a kind of equipment produced by DPE Boiler is evaluated as onepotential product because of its high quality and clear market segmentation Theaurthor was doing the research of marketing mix for this product useful andnecessary for the manufacturing and processing enterprises such as confectionaryenterprises, textile enterprises and a good marketing mix for this product willcreate many advantages for DPE to compete with other competitors

Thus, the thesis aims to identify components of marketing mix applied toBoiler; to assess current marketing mix for Boiler; and to propose solutions toimprove marketing mix for Boiler to increase its market share up to 2025

Base on theoretical framework of marketing mix and marketing mixcomponents, primary and secondary data were used in the research The primarydata were collected by in - depth interviews and surveys; secondary data werecollected from the company reports, regulation, internet and magazine 120 samplewere selected for the study but only 92 respondents were achieved (accounting for76,7%) The four marketing mix components were discussed and analyzed

With the analysis of survey result, it is possible to see that Boiler has reachedsome achievement during three year of being present in Ha Noi market They didgain certain brand awareness from their customers and received good comments

from their customers However, there were outstanding shortcomings and possiblereasons, which should be overcome by DPE loại của các đối thủ cạnh tranh đang tỏ

ra được ưa thích hơn bởi khách hàng Firstly, there are many boiler suppliers withlarge models and distributors Second is the price of the boiler products on the third.DPE's trade promotion activities are not well organized, not attractive enough andresult in not bringing more customers

After all, the thesis offers some ways to improve and develop boilersmarketing mix strategy as the ultimate aims of research Firstly, the companyshould design distinguishing products to differentiate from other products Theproducts to be provided for the customers must be at the best quality, at the bestdesign to attract more and more customers Secondly, the company should set up aflexible price policy by analyzing the competitors well, determining the bestproduct cost and determining pricing objectives Thirdly, the comny shoud expandtheri distribution channel of retailing, wholesaling, sales promotion and directmarketing By doing these recommendations, it is possible for Dong Anh PressureEquipment j.s.c to gain a better place in a very competitive market in VietNam

CHAPTER 1: INTRODUCTION

1.1 Rationale

Industrial boilers (boilers) are devices that use boiling water to form conducting steam to meet the heating requirements of industries such as drying,cooking, dyeing, steam-to-turbine generators, etc The special thing of the boilerthat no substitute is to create a safe non-combustible power source to operate theequipment or engine in place It is forbidden to fire and to prohibit power supply(such as petrol and oil stores) Boilers are widely used in almost every industry,with each industry demanding different levels of heat and capacity Factories such

heat-as feed processing factory, confectionery factory, using boiler for drying products;Some of the plants are used for cooking, pasteurizing such as beverage plants, fishsauce plants, soy sauce or vegetable oil With the advantages of such boilers, themarket can be seen Boilers are one of the potential markets where more and morecompanies are planning to grow

Dong Anh Pressure Equipment Joint Stock Company is one of the fewcompanies operating in the field of supplying boiler products, pressure vesselsand industrial valves in Hanoi by TAIYO NIPPON SANSO - a leadingcorporation in the field of industrial gas and gas generators in Japan Inheritingthe foundations of the General Corporation for Production and Services ofTechnical Materials under the Ministry of Agriculture and Rural Development,Dong Anh Pressure Equipment Company has been developing strongly The mark

on the boiler market in Hanoi However, boilers are potential products tocontinue to exploit with large consumption market, so in the past few years,many companies in the production and sales of boiler products have entered themarket and edge Direct competition with Dong Anh company Competing andgaining market share, attracting and introducing customers to know and use ourboiler products is one of the most urgent issues that Dong Anh PressureEquipment Company needs to handle

Furthermore, there were some previous studies discussed to expand marketfor boiler product but studies for marketing mix seem insufficient especially for theDong Anh pressure equipment jsc in particular Taking into account of all reasons

mentioned above, the author decided to choose the title '' Marketing mix for boiler

at Dong Anh pressure equipment j.s.c'' and insists that it had not been done before.

Moreover, the reason, explained for choosing four factors instead of one factor ofmarketing mix, is that one product wanted to be succesful on domestic market full

of combination factors, so only one factor is not enough A long term marketingdevelopment orientation not only helps to exploit resources effectively, but alsoensure the good condition for production and satisfies the stricter and stricterrequirements of customers

1.2 Research Objectives

This study is aimed to verify some key theories and methodologies ofbuilding and implementing promotion strategies for boiler based on the analysis ofits market performance and enviroment over the past period The specific objectives

of the study include:

- To identify component of marketing mix applied to consumer goods;

- To assess current marketing mix for boiler at Dong Anh pressureequipment jsc

- To propose solutions to improve marketing mix for boiler to increase itsmarket share up to 2020

1.3 Research Questions

To achieve the objectives mentioned above, the research would answer thefollowing questions:

- What are components of marketing mix applied for consumer goods?

- How is the current situation of marketing mix for boiler?

- What should be done to improve the marketing mix for boiler?

1.4 Research Methodology

1.4.1 Research Process

1.4.2 Secondary data collection

The secondary data was collected from the internal reports of Dong Anhpressure equipment jsc within 3 years from 2015 to 2017 (number of customers,revenues, any comments from the customers on the product of boiler) In addition,wording, brochures, marketing materials and official documents of Dong Anhpressure equipment jsc were also used to give out overview about marketing mix ofthe company Internet, newspapers, other financial magazines and former researchstudies related to marketing mix were used as the secondary data for the study

The data let the author know that what are the situation of marketing mix forboiler at Dong Anh pressures equipment jsc in current Vietnamese market and theirpotential development in the future

1.4.3 Primary data collection

The primary data are derived from the survey of the customer of boiler andthe in - depth interviews with the director and manager as well as some existingcustomer Collection of primary data is following:

a, In - depth interviews:

Recommendation toimprove Marketingmix for Levi’sproduct

TBS’s marketingobjective forLevi’s product

Annalysis ofMarketing mixLevi’s product atTBF

TheoreticalFramework

- The in - depth interviews were conducted separately with 02 director andmanager named Mr Che Minh Phuong - Director and Mr Doan Tuan Phong -Marketing manager about boiler product The interview results help the authorcollect information of requiredments and important role of expanding boiler marketshare in VietNam.

- One group in - depth interview was conducted with 05 existing customer ofboilder products In group in - depth interview, the author presented the topic aboutselling boilder in VietNam market and raised many aspects related to boiler market,

as requirement of market access and marketing activities, production capacity andfinancial capacity to cover the production and marketing With each issue, theseinterviewees showed their opinions and discussed with others frankly

b, Survey:

- Respondent: Existing individual customers of boiler

- Sample size: 120 customers using boilder in HaNoi area were choosen fromDong Anh's database

- Sampling method: Convenience sampling method was applied This is thesampling method that the respondents were recruited based on the condition ofconvenient and economic conditions

- Questionnaire distribution: The questionnaires would be given to customers

by sneding to their emails After all follow up communications, yielding a 76,7%respondent rate (n=92) and the rest of 28 responses could not be used due to theribeing incomplete and unmatched

1.4.4 Data analysis

- Comparative study and Synthesis: Comparative study means comparing theachieved indicators of business performance with the baseline indicators Themarket indicators, the average indicators can be compared via other method Theconditions for comparision are the matching of the space, time, economic issue,measurement unit, calculation method and business conditions

- Statistical method via table and charts: This method discovers the tendency

of common features of the factors under the analysis

+ Secondary data: Collected for the period from 2015 - 2017

+ Primary data: Collected at 2018

CHAPTER 2: THEORETICAL BACKGROUND ON MARKETING

MIX FOR CONSUMER GOODS

2.1 Marketing and marketing mix for consumer products

2.1.1 Marketing

The marketing term was first used in 1902 at the University of Michigan inthe United States In 1910, all US colleges began teaching this subject For almosthalf a century, marketing has been taught only in English-speaking countries It wasnot until after World War II, in the 50s and 60s of the 20th century, that it spread toWestern Europe and Japan The internationalization of marketing has grownrapidly Today, businesses who want to achieve high economic efficiency need tohave knowledge and apply modern marketing In the modern marketing sense,marketing is the function of managing the company in terms of organizing andmanaging all its business activities, from discovering and transforming thepurchasing power of consumers into real demand of a particular product, to theoptimal delivery of the product to the consumer Marketing is a social managementprocess whereby individuals and groups get what they need and want throughcreating, offering and exchanging valuable products with people

The concept of the UK Marketing Research Institute: "Markeing is a company management function that organizes and manages all business activities from discovering and transforming consumer purchasing power into real demand a specific item, to the delivery of goods to the end consumer to ensure the company to attract expected profits'' This concept is related to the nature of marketing that is

seeking and satisfying the needs and concepts that emphasize bringing merchandise

to the consumer activities in the business process to attract profits for the company.That is the philosophy of marketing is to find, attract, meet the needs of the best onthe basis of achieving the target profit

The concept of the American Marketing Association: "Marketing is the process of planning and implementing that plan, pricing, promotion and distribution of products, services and ideas to create an exchange of items personal and organizational goals" (Source: Marketing Management - Philip Kotler,

Statistics Publishing House, 1997, p 20) This concept is practical when applied tobusiness practices Here we see the mission of marketing is to provide customerswith the goods and services that they need Marketing activities such as marketingplanning, implementation of distribution policies and customer service, etc areaimed at marketing products that are suitable and meet the needs of customers Thecompetition is through its marketing efforts.

Marketing concept by Philip Kotler: "Marketing is a human activity aimed atsatisfying the needs and desires of customers through the exchange process."(Source: Marketing Basics- Philip Kotler-NXB Statistics-1992- Page 9) Thisdefinition includes the non-trading process as part of marketing Marketingactivities take place in all areas of exchange aimed at satisfying demand withspecific activities in business practices

Within the scope of this article, the author uses Phillip Kotler's MarketingDefinition

2.1.2 Marketing mix

Marketing - Mix (Marketing Mix) is one of the main concepts of modern

marketing The term was first used in 1953 when Neil Borden, president of theAmerican Marketing Association took the formula idea one step further and coinedthe term mixed marketing Marketing Mix is the coordination or arrangement ofcomponents of marketing to suit the actual business situation of each business tosolidify the position of business in the market If the coordination of the marketingcomponents is harmonious and synchronized to the situation of the market is going,the business of the business will flow, limiting the emergence of risky and The goal

is to maximize profits A talented executive is the organizer, coordinator of themarketing components in a common strategy to ensure the initiative with all thecomplicated situations of the market

Marketing - Mix is the set of marketing tools that a company uses to achieve

its objectives in a chosen market Marketing tools are blended and combined into aunified whole to respond to differences and changes in the marketplace From theabove comment we can understand the concept of Marketing Mix as follows:

Marketing - mix is a collection of controlled marketing methods that

businesses use to create the required response in the target market to achieve theirmarketing goals

Figure 2.1: Marketing - mix model in the business

(Source: Phillip Kotler & Gary Amstrong, Principal of marketing)

2.2 Elements of marketing mix for consumer products

2.2.1 Product

When referring to a product, it is often referred to as a particular form of existence,and therefore contains only elements or elements that can be observed However,according to the marketing experts they give the concept of the product as follows:

"Products are all things that can satisfy the needs or desires of being offered

Targetcustomers

Distributio

n channel

PROMOTION ACTIVITIES

Product -PriceEnterpris

e

for sale in the marketplace for the sake of shopping, consumption or use." So, in thissense, commodity products consist of intangible and tangible objects, includingboth material and non-material elements.

* Components of the product: A product is composed of four levels, namely: core product, specific product, incremental product, potential product.

- The core product is a section that shows the specific benefits or services ofthat product

- Specific product is the basic form of the product, including 5 elements:characteristics, brand, packaging, quality, design of the product

- Product enhancements include the following additional services and benefits todistinguish them from competing products, such as additional items for service, after-sales service, warranty, delivery

- Potential products are innovations that go beyond conventional competition,which outlines the new future for product development

* Product Lifecycle: Product Lifecycle is a product period that exists on the

market during which stages in the commercial history of a product are describeddifferently, so that the company can Planning is better than marketing plans Productlife cycles can be considered for each specific item, category, or even brand

+ The stages in the product life cycle

Stage 1: The launch phase Consumption at this stage usually increases slowly

In that case Marketing - Mix is usually:

- Product: Pay attention to the technical adjustment and commercial products,strengthen the quality inspection products

- Price: The market price for the unique product unmatched in the market.Price penetration for popular products Price by area or temporary discount

- Distribution: Limited Distribution: Exclusive or selective, high cost

- Promotion: promotion to create product understanding Prioritize pioneersand encourage consumption The means of promotion is sales or catalog In thisstage, the cost of promotion is quite high

Stage 2: Stage of growth

In this period, consumption began to increase sharply, profits increasedsignificantly so that the market appears more competitors In that case MarketingMix is usually:

- Products: production series, product diversification, technical enhancement,product standardization to easily expand sales, improve product quality to createnew features

- Price: The downward trend to expand the market, using prices in differentlocations

- Distribution: use the new distribution channel Extended and strongdistribution Large stockpile and fast supply

- Promotion: Create the highest preference of the majority of customers byusing the mass media Make some changes to your advertising message to stimulateyour visitors

Stage 3: Saturation phase

In this period the volume of goods sold increased slowly because the productwas accepted by most potential customers In that case Marketing Mix is usually:

- Products: Differentiate products to meet market niche by diversifying brandsand styles

- Price: There is strong competition in price, there is very high cross-elasticity.There is therefore a tendency for tacit or open agreements between these sellersagainst other sellers or against buyers

- Distribution: Still expanding and strong

- Promote: Strengthen brand loyalty by using mass media or promotingpersuasion, promotion, and advertising to target the market

Stage 4: Depression Stage

- In this period, the volume of sales decreased, the risk of inventory increaserapidly This is due to technological advances, changes in customer preferences andincreased competition In this case Marketing Mix is usually:

- Products: Reduce the face is no longer effective

- Prices: Decreased, sometimes rising prices and rising costs due to reduced

production volume.

- Distribution: selectivity and specialization

- Promotion: Reduce costs to the least

* Decisions about the product

+ The decision related to the trademark:

Trademarks are names, terms, logos, graphics, or combinations thereof, whichare used to authenticate the product of a seller or a group of sellers and todistinguish them from the competitor's product The most fundamental issues theymust decide are: Is there a branding for their product? Who is the owner of theproduct? How to name a brand? Should the scope of trademark use be extended?Use one or more brands for products or categories with different characteristics?

+ Decide on packaging:

Packaging usually consists of four components: direct contact with theproduct, contact protection, shipping packaging, label and product description onthe package In order to create effective packaging for a product, the marketingmanager has to make the following decisions:

Building the concept of packaging: What principles must be followed? Howdoes it play a role? What information should it provide about the product?

Decision on the aspects: Size, shape, color presentation

Decisions on packaging testing: technical testing, formality testing, business testingand consumer acceptance

Decide on the information on the package: Product information, productqualities, production and product date information, trade mark information andsafety techniques used

+ Decision on product categories and categories

- Type of product

Product types are a group of products that are closely related to one anotherbecause they function in the same way or because they are sold together with agroup of customers, or through the same type of business organization, or within thesame price range

- Decision on the breadth of product categories

The width of the product category is the resolution of the number ofcomponents according to a certain criterion such as size, capacity Each companyhas a variety of product types For example, the goal of occupying a large part ofthe market or expanding the market is to broaden the product range Or havecompanies pay attention to the high profitability of the product But how does thecompany decide how to expand and maintain the product category? There are twooptions:

First is: Development of species Species development can be done in the

following way:

+ Development downward

+ Development upward

+ Developed in both directions

Second: Add a face to the product category, which means that the company

that has chosen the company tries to add new items within that framework This is

for the following purposes:

+ Desire to earn more

+ To fill the vacancy in the existing category

+ Make full use of excess production capacity

- Decision on the list of products

A product portfolio is a collection of all product categories and product unitsthat a particular seller offers to the buyer The product portfolio is reflected in itsbreadth, depth, depth and level of harmony

The breadth of the product portfolio is the total number of product categoriesproduced by the company

The abundance of the product portfolio is the sum of its components

The depth of the specific product category is offered in each particularcategory

The level of harmony of the product portfolio reflects the proximity of theproduct to the different categories of products for the purpose of end use or certain

The four product category specific specifications opened up to the four-waystrategic expansion of the product portfolio

* Research and develop new products.

The concept of marketing new products can be new products in principle, newproducts improved from the existing new products or new brands as a result ofresearch, design, testing of the company

- The process of designing and developing new products

- From the sciences

- Research the success or failure of your competitors

- Sale staff and people of the company regularly contact guests

- Patented inventors, universities

With each idea there are often different possibilities, conditions andadvantages, so choose the best ideas

Based on potential customer feedback combined with other analyzes, thecompany will select an official product project

+ Marketing for new products

Marketing for new products includes 3 parts:

Part one: Describe the size, market structure and customer attitudes in thetarget market, the expected location of the product, the target for sales volume,market share and profitability in the coming years.

Part two: Presenting a general view of product distribution and marketing costpredictions for the early years

Part three: Presenting future goals for profit targets Long-term strategicperspective on marketing mix factors

+ New product design

In order to create a realistic product, the design research department will createone or more product models or models, monitor and verify technical specifications,product role-playing capabilities, and each component, its constituent parts Createsample products and check through guests or consumers for their opinions

+ Tested in market conditions

The product will be produced by a small company for testing in marketconditions At this stage, people have tested the product and tested the marketingprograms of customers and consumers as well as business people or experts Thegoal in this step is exploration of buying ability and general forecasts ofconsumption

+ Implement mass production and decide to launch new products to the market.

After the trial, the mass production of new products and sales to the marketshould make the following decisions:

- When will the new product launch into the market

- Where will the new product be launched?

- New products must first focus on selling to any customer?

- How are new products sold? What support activities to promote the sale?

This is the simplest method, this valuation method is aimed at cost and profitgoals of enterprises This will add a predicted cost to the cost of a product Theformula is as follows:

G = Z + m

Where: G is the price of a product

Z is the cost of a unit of product

m is the expected rateThis method is the simplest one compared to other valuation methods, but it isnot reasonable because it ignores demand and competition in the market So thismethod is more subjective

- Valuation at current prices or at competitive prices

When determining prices at current prices, firms will take the price of thecompetitors as a basis They are less interested in the cost of production and marketdemand There are four competing pricing principles

- Price is the same as the competitive product price, applied when the businessenterprise in the sector belongs to a monopoly market or a small enterprisingenterprise is called a business "Follow", the product of the business is similar to theproduct of competitors

- Price is higher than the price of competing products

This price setting applies when your product is differentiated from competingand acceptable products (eg better quality, better packaging, differentiated product) ) However, the price gap should not be too large to avoid price sensitivecustomers Especially the difference in product in the minds of guests

- Price is lower than the price of competing products

Apply for products that are price sensitive However, the difference betweenthe two prices should not be so great that the tendency to create price competition isdrastic and to avoid breaking the law for price (the law of devaluation)

The most popular method of valuation is in cases such as difficult to quantify

or competitive uncertainties Businesses argue that the current price approach is a

good solution It reflects the collective wisdom of the industry in terms of price,ensuring equitable returns and industry harmony.

* Pricing strategies

- Price strategy delicious

Enterprises often apply their product prices as high as possible, for themarket segment of buyers willing to accept that new product When consumptiondecreases, they can lower prices to attract price sensitive buyers In this way,businesses selling new products will achieve high levels of revenue and profit in theearly stages of the product life cycle However, the pricing strategy of "tasting" isonly meaningful with the following conditions: High demand for products, lowprices for customers, high prices not quickly attract more competitors New, highprice contributes to the image of a product of high quality

- Price strategy "Stick to the market"

This strategy applies to companies pursuing the goal of "gaining largemarket share" and profitability in the long run by exploiting "economies of scale"prices may continue to fall and still be profitable

This strategy seems to fit the following conditions: Low prices attract largenumbers of customers Appeared "efficiency by scale", production costs decreasedwith the increase of production, lower prices do not attract more potentialcompetitors

- Price strategy applies to product categories

In this case, the company has to set up a "set of sales" to ensure maximumprofitability across the entire product portfolio rather than individual products Thepricing for the product catalog should be differentiated according to the specificcircumstances

+ Pricing for product categories

Pricing for product categories ie pricing for products with the samefunctionality is sold to the same consumer group When determining the price of aproduct, the enterprise must take into account the difference in price, the way thecustomer evaluates the features of each product and the price of the competing

product and the difference between the price levels.

+ Determine prices for additional products

There are a number of key products offered with additional products, but it isimportant to ensure that the revenue covers all costs and benefits for both the mainand secondary product

+ Determine the price for compulsory products

Apply when major product producers can undervalue their products and sellproducts with high prices for profit or vice versa The goal that businesses want toachieve is to get the highest return on their investment portfolio of products Andthe main producers of the product control the phenomenon of having othermanufacturers "copy" their compulsory products and sell them to the lessexpensive

+ Pricing for the by-products

In the production process, both the main product and some by-products areobtained However, if the by-products are not commercially viable, the producersalso have to pay for the processing costs Or if the by-products are of commercialvalue, the income generated by the business will help the company to reduce theprice of the main product, to win the competition

- Strategies to adjust the base price

+ Valuation of two parts

Service companies generally use two-part pricing Part of the consumer pricepaid to the supplier for minimum product use rights The second part of the userprice must pay for consumption that exceeds the minimum

+ Valuation package

With this pricing, instead of selling individual products, sellers will gather anumber of products to sell them in sets or packets

Package pricing principle:

Package Price The total purchase of packages by the method of sellingseparately

The difference between the unit price and the package price should be largeenough to attract those who like to buy the package

+ Pricing based on geographical principles

Determine the FOB / CIF price

With FOB pricing, buyers will have to pay the shipping cost from the seller'splace of delivery to the buyer's final destination

As for CIF, the seller will bear the shipping cost to the buyer's location of choice.Uniform pricing including shipping costs

In this case, the seller applies a consistent selling price including shippingcosts for all buyers regardless of whether they are far or near

Apply prices for each region

This method must divide the customers into different areas, each area has itsown price including shipping This method has overcome the two methods, but therecovery is not absolute

+ Discount and price

Discount for large quantities

Function discount (commercial discount)

Seasonal discount

The price encourages payment by cash and quick payment

Discount

Promotional pricing

Valuing to attract guests

Valuation for special sales

Price based on guest

Pricing by location

Pricing by image.

Valuation at peak, low points

Price change

- Actively change the price

- Actively raise prices

- Respond to the price change of competitors

2.2.3 Place

Distributing in Marketing is a process of transferring products from theproducer to the end consumer through a variety of methods and activities

* Select and manage distribution channels

- Select and build distribution channels

Businesses need to choose the right distribution channel for their products.Each business can choose different distribution channels to bring their products tothe end consumer Selection of distribution channels includes selection ofappropriate channel structure, selection of organizational and linking patterns in thechannel, selection of specific channel members Common bases for selecting theoptimal distribution channel for a product type are:

The goals of the channel

Characteristics of target customers

Feature of product

Characteristics of commercial intermediaries

Distribution channel of competitors

Capability of the resources and characteristics of the business itself

The marketing environment of each country with a certain macro environmentusually has a certain trading system with certain types of commercialintermediaries When building distribution channels can not escape the existingtrading system Legal constraints also affect the channel Legislation that preventsthe organization of channels tends to suppress competition and create monopolies

There are also criteria for evaluating the performance of the distributionchannel:

- Requirements of market coverage of distribution

- Requirement of channel control level

- Total cost of distribution

- The flexibility of the channel

- Recruit channel members

* Managing distribution channels

Channel management focuses on day-to-day operations and encourages term channel members to address product issues, pricing, channel promotion andperformance evaluation channel

long-Short-term distribution management involves receiving and processing orders.Long-term distribution management involves the development of sounddistribution policies that ensure long-term and efficient cooperation of channel members,ensuring smooth flow of channels The weakness of long-term channel management is todevelop policies that promote sound channel membership, use mixed marketing tools,evaluate channel members' performance, and develop new management policies

+ Encourage channel members to be active

Producers must understand the needs and desires of their members Becausecommercial intermediaries are independent business enterprises that have their ownstrengths, goals, and business strategies, so in many cases the business perspective ofcommercial intermediaries is very different the view of the manufacturer

There are many methods manufacturers use to encourage channeling, in which thethree most common methods are collaboration, membership building, and distribution.These methods are focused on creating close bonding relationships within the channel.They differ only in level of planning and control, from the point of view of single,unadjusted incentives to the establishment of a well-planned and professionally managedmarketing system

Use other marketing mix tools in channel management

Producers must associate product decisions, sales prices, mixed promotions with

channel decisions Other marketing tools must be used appropriately to create channelpartners' collaboration and motivate channel members to follow the distribution strategy ofthe business.

+ Evaluate activities of channel members

Producers must periodically evaluate the performance of channel members in terms

of sales volume, average inventory level, delivery time, loss or damage treatment, levelCollaborate in the advertising and training programs of the business and the services theyprovide

Setting sales quotas for commercial intermediaries to periodically evaluate the level

of achievement achieved by each channel in the channel has the effect of encouraging theiractivity This number also helps the company see the activity of the entire channel and addtimely marketing measures in the distribution However, the rating is reasonable and isacceptable to the channel members

2.2.4 Promotion

Promotion is the effort of the business to inform, persuade, remind and encouragecustomers to buy products, as well as to understand the business Thanks to the promotion,businesses can sell more and faster

* The purpose of the promotion

Inform the target customer of the presence of the company's product on the market.Encourage customers to buy products, promote fast and more

Comparisons show that the product of the business is different from the product ofother competitors

Promotion is also a tool used to persuade guests

Consumers should also be reminded of the availability and benefits of the product

* Importance of mixed promotion

Promoting important contributions to the success of marketing strategies, making adifference in the product, segmenting the market, promoting the branding, productinformation, reminder to increase credibility trust

Promotion brings benefits such as:

Create image for the company and business, information about the characteristics

of the product, promote existing products, persuade customers to change products, createfavorable conditions for the company against competitors.

* The activities of mixed promotion

- Advertisement

Ads are non-direct, non-personal media forms that are made availablethrough paid media and subject to charges

+ Define your advertising goals

The first step to take is to define your advertising goals These goals must bederived from the market decisions that target the company's product mix in themarketing mix Depending on the conditions of the different companies, differentadvertising objectives, the company's advertising objectives often address thefollowing issues:

Increase the amount of consumption in the traditional market

Open up new markets

Introduce new products

Build and strengthen the prestige of the brand and reputation of the company.Advertising goals can be classified as desired, information, persuasiveness orreminder in the product life cycle

+ Determine the advertising budget

Based on the company's advertising goals to determine the budget Need todistribute media budgets for advertising and other media activities Distributeadvertising budgets for product types, markets need advertising activity

Decide what content to convey

To form the content of the advertising message can use two methods that areinductive method and inference method Advertising content is often evaluatedbased on attractiveness, originality and credibility The company needs to analyzethese three characteristics in its advertising message Then the company must showthe content of the message to ensure the success of advertising activities, mustchoose the language, must determine the message structure, media

Decision of advertising media

The company should base on the advertising objective, the target audienceand the target audience, and select specific advertising media It is possible to selectmass media or specialized media, major advertising media and additional media The most important characteristics of advertising media that businesses areinterested in choosing The choice is the level of targeted loyalty to certain media,the suitability of the goods, the characteristics of the information and the cost.

Some of the means of advertising that companies use are: Newspapers, magazines,television, radio, posters, etc To select the right medium, advertisers must decide

on the frequency range , the intensity of the ad

+ Review advertising programs

Evaluating advertising effectiveness is very necessary but also very difficult.People can rely on sales to evaluate the effectiveness of advertising sales at the time ofadvertising much higher than the period of no advertising or low advertising However,performance in sales is often difficult to determine because sales are influenced bymany factors other than advertising The method of performance evaluation is tocompare the increased sales volume with the advertising costs in the past period

- Promotion for sale

Sale promotion is all short-term immediate impact measures to encouragetrial or buy more products or services by providing additional benefits to customers.The main promotional measures are discounts, gifts, and games

+ Select the means of sale promotion

Toolbox that creates direct economic benefits to consumers including:sample, coupon, joint package, gift

Samples: The trial function may be free or discounted, usually when sampledelivery is usually accompanied by advertising messages or probe questions aboutthe product

Coupon: This is a certificate for the customer to receive a certain amount ofmoney when buying products of the company

General package is a package that introduces certain products but sells atdiscounted prices

Gift: is free or low cost

Tooling to accelerate the operation of intermediaries in the distributionchannel: Manufacturers use technology to enhance collaboration, boosting thedistribution of distributors, such as wholesalers, retailers, and agents

Common techniques include: financing for purchases, free goods, customerconferences, trade fairs and exhibitions

In order to make good sale promotion activities, it is necessary to have aprogram suitable to the conditions and circumstances of the company Thefollowing issues need to be addressed:

Need to decide how intense the intensity? Need to specify the specificregulations of the participants? Select the media material that popular? How longdoes the program last? Budget for promotion? Evaluate the results of the salepromotion program

The effectiveness of a sales promotion program is often valued on the basis

of results that increase sales Production companies often use the method ofcomparing sales targets of prior, during, and after implementation of the program

Basic decisions about propaganda

The first objective must be defined: The objective of the communication isalso derived from the marketing objectives of the company, the objectives must bedetailed, specific and clear, it includes both orientation and quantification, theorganization will operate advantage

The second is the message design and select the propaganda tool

The third is conducting propaganda

Fourthly, evaluation of the results of the propaganda can be evaluated such asthe measurement of the number of information appearing on the mass media,measurement of change of attitude of customers with products, measurement ofchange sales and profits.

+ Personal sales

Direct selling of goods and services by sellers to potential customers for the

purpose of selling goods and receiving customer feedback.

Basically the sale process consists of the following steps:

Step 1: Survey and evaluation

Step 2: Money contact

The main tools of direct marketing are:

Marketing by Catalog, Direct Mail Marketing, Telephone Marketing, Direct

TV Marketing, Direct Marketing on radio, magazines and newspapers,Computarketing

Key decisions in direct marketing

First, identify the target, then identify the target customer and choose the salesstrategy After direct marketing, the company needs to evaluate the results of thedirect marketing campaign and draw conclusions

2.3 Factors affecting marketing mix

2.3.1 External enviroment

The internal environment of the company includes

Human Resources: Include the management team and employees in thecompany Good leadership, strategic vision, good governance Good staff will givecomments to complete as well as implement the marketing mix for the company.Facilities, equipment, technology: Modern facilities and equipment willincrease the production capacity as well as increase the quality of products, thecompany headquarters located in places where easy to trade with customers

Finance: Strong finance is a favorable condition for setting up budgets forinvestment, research and implementation of Marketing Mix policies

Departments within the company: The company's apparatus will not function

in the absence of coordination between functional departments

2.3.2 Internal enviroment

Economic environment

The needs of the market, the customer depends a lot on their ability to shop.For the ceramic tile market, the purchasing power of the product depends on theincome of the people The income of the people depends on: wages, non-wageincome, income from savings interest, from the sale of products In addition,factors such as the rate of economic growth, inflation, exchange rates, andfluctuations in the world economy have affected companies operating in the field

of ceramic tiles High income, improved living conditions, people will investmore in their homes and ceramic tile products are an indispensable option for thehouses, in addition to the current urban and apartment buildings are building alot and demand for ceramic tiles is also great this is a good opportunity for thecompany

Technology environment

This is a strong environmental impact on the ceramic tile business because ofthe increasing demand of customers, changing tastes, it is impossible to keep thetechnology old and obsolete, but must constantly update the progress science

Technology The development of technology makes the product more diversified inboth style and size to satisfy the increasing demand of consumers.

Natural environment

The natural environment has a lot to do with the ceramic tile market becausethe ceramic tiles are the main raw material for the business However, naturalresources are becoming increasingly important The scarcity of clay resources isalso out of the question, as scarce resources will affect the product and price,thereby affecting product policies, prices, and operations marketing

Cultural Environment

People living in any society have a cultural identity corresponding to thatsociety Different cultural identities will form different perspectives on values andnorms For ceramic products, the concept of aesthetics also bring different shadesfor different regions In the city area, consumers prefer fancy ceramic tiles, darkcolors, or artificial lacquers, but in rural areas consumers prefer chic colors.Beautiful, solemn pattern so beautiful, aesthetic here depends on the evaluation ofeach region Culture influences the marketing decisions are diverse and multi-dimensional, such as with product policy companies need to create different productlines in categories, models, colors to match the taste Each region, or price strategyand trade promotion, must also apply different forms

Competitor: A competitor is an obstacle if it is threatening the market,

blurring the product, brand, or customer base of the company but giving thecompany a competitive edge in technology, price, product innovation so that thecompany constantly improve, change to suit and more satisfy the needs ofcustomers by creating a good impression on the company

Customer: is the person who directly produces profit, pays salary to both the

management board, the manager, as well as all employees in the company.Therefore the company needs to satisfy and satisfy the needs and expectations ofcustomers Customers will leave the business if the business does not satisfy them

or the level of satisfaction of the company is not equal to the competition.Therefore, businesses must constantly grasp the changes in customer demand

Public: Those who have a certain influence on the decision to buy from the

company's customers as business partners of customers, relatives, friends, massmedia agencies, banks They can facilitate, support or troubleshoot Therefore, it

is necessary to create good feelings from the public towards the brand name of theenterprise

Distributors: These are the people who directly represent the company

providing products and services to customers Therefore, careful selection anddistribution of distributors is required timely and reasonable so that they not onlysell products of the company but also acts as a bridge to bring customers to thecompany and promote brand images of products and companies to customers Aninefficient distributor will affect the sales that affect the profitability, reputation andimage of the company

CHAPTER 3: CURRENT SITUATION OF MARKETING MIX FOR BOILER AT DONG ANH PRESSURE EQUIPMENT JSC

3.1 Overview of Dong Anh pressure equipment and boiler

3.1.1 Overview of Dong Anh pressure equipment

3.1.1.1 Dong Anh preessure equipment jsc establishment

Dong Anh Pressure Equipment Joint Stock Company (DPE) is one of theleading companies in the field of pressure equipment, was established in 1991 It wasformerly a trading company of equipment and supplies Dong Anh Production andServices Corporation is a subsidiary of General Corporation for Production and Service

of Technical Materials - Ministry of Food - Food (1991), now the Ministry ofAgriculture and Rural Development, Vietnam In 1999, it was transformed into DongAnh Electro-Mechanical Company In 2003, the company was transformed into DongAnh Pressure Equipment Joint Stock Company according to business registrationcertificate No 0103001924 for the first time 03/03/2003 August 2005 EstablishedPressure Equipment Manufacturing Factory and in December 2007 moved the factory

to Dong Anh Pressure Boiler Joint Stock Company at TS10 / 8, Tien Son IndustrialZone, Bac Ninh Dong Anh Pressure Equipment Joint Stock Company

Figure 3.1 Organizational structure of DPE

(Source: DPE profile)

Complete Technolog

y

c Paint

Solder

Factory 2 Factory 3 Factory 1

Sale  Business  Marketin

Manufacture Office

DIRECTOR GENERAL DIRECTOR BOARD OF DIRECTORS