Analysing the marketing mix strategy of sa giang import and export corporation

Figure 1: The selling and marketing concepts contrasted .4 Figure 2: Organization with a Marketing Orientation Carry outFigure 4: Overview of Marketing Strategy Planning Process 9 Figure

First of all, I would like to express my gratitude to all respectful professors

at HUFLIT, especially to Dean Nguyen Ngoc Huan and those in International

il

':1

i, Business Administration Department, who have given me useful literature '~

'1 I also wish to show my deep thank to Dr Nguy~n DliG Hoai Anh for her '~

~ d.evoted guidance that helps me to finish my research Without her, I would never ~i

" know whether I could fmish my research at it best 'il

i~ I gratefully acknowledgement all my advice, recommendation of Mr ~j

~' Nguy~n Trung Dan - General director of SAGIMEXCO and Mr Dc;ing Thanh 'il

t: I also owe many thanks to my family for their facilitations during the time I ]

il Finally yet importantly, I thanks my friends in class KD-0304 for four our 'il

II together studying year in sweet university years They have been by my side until 'il

Nowadays, the number of companies all over the world is increasing

must not only alert to the fast changes of the market trends flexibly but also have

marketing is the vital tool for the companies

11

opportunities and threats

the marketing mix strategy

iii

Figure 1: The selling and marketing concepts contrasted 4 Figure 2: Organization with a Marketing Orientation Carry out

Figure 4: Overview of Marketing Strategy Planning Process 9 Figure 5: The four P's of the Marketing mix 14

Figure 7: Typical Product Life Cycle of a new Product concept 17 Figure 8: Basic Promotion Methods and Strategy planning 20

• Figure 9: Relation of Promotion Objectives, Adoption Process,

Figure 11: The SAGIMEXCO DONG THAP's structure 35 Figure 12: The market share of prawn crackers in foreign markeL 46 Figure 13 Food hygiene quality certificate Code HK129 of

Table 2: Total revenue of foreign markets in year of 2004, 2005 and 2006 40

Table 3: Total revenue of domestic markets in year of 2004,2005 and 2006 41

v

1.3 Marketing's role and activities in an organization 6

204.1Customer value principle 12

2.1 Foundation and development 32

3 The operation of SAGIMEXCO DONG THAP from

3.2.2 Products from fish and meaL 43

CHAPTER III: ANALYZING THE MARKETING

1 An overview of marketing mix strategy of

2 Analyzing the marketing mix strategy of

2.3.1.1 Domestic direct personal seIling force 56

ix

2.3.2.2 In domestic market 57

1 Overview of Vietnam economy and some factors effecting

2 Some suggestions to enhance marketing mix strategy of

xi

1 Research paper objective

For the past decade, the "customer is god" seems so strange The customershad to buy the products they needed with little choices and little rights The

products the customers really needed Gone are those days!

development

marketing strategies

This chapter therefore is aimed to achieve 3 objectives:

•: Second, the author would like to study deeper in the marketing strategies of

a real company to see how the theories are applied in practice

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

1

2 Scope of the research

This study focuses on the marketing strategies of SA GIANG import-export

office, however, this paper just focuses on the marketing strategies taken place forthe company

Further, the author would only analyze the marketing strategy elements concerned

3 Research method

research I also utilize the article, the international newspapers, material of

4 Content of the research

My paper includes 4 chapters:

Chapter 1: Literature review

Chapter 2: Overview of the company

Chapter 3: Analyze the marketing strategies of SA GIANG import-export

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

2

CHAPTER I: LITERATURE REVIEW

1.1 What is marketing

and selling, however, are just two of the many marketing activities The concept

which stimulates selling and gets more profit from increased sales

that the right goods and service are produced to the right customers

marketing concepts

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

3

Figure 1: The selling and marketing concepts contrasted

The Selling Concept

Integrated marketing

Selling and promotion

Existing product

Customer needs

EJ

Factory

Market

The Marketing concept

Source: Philip Kotler, Gary Armstrong, John Saunder and Veronica Wong Principles o/Marketing. Prentice Hall_2001_ pagel5

1.2Definitions of marketing

In general, marketing activities are all those associated with identifYing the particular wants and needs of a target market of customers, and then satisfying those customers better than the competitors This involves doing market research

on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution.

Even though there are many different definitions of marketing, it seems that the two definitions below are said to be the most satisfactory ones Both of them arc modem customer-oriented and satisfactory marketing definitions They are

marketing definition of Palmer and Philip Kotler, the most famous marketing expert.

Palmer defines marketing as the process marshalling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends.

According to Philip Kotler marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating exchanging products and value with each other We see that both of these marketing definitions emphasize the core concept of marketing which is shown in Figure 2.

Figure 2: Organization with a Marketing Orientation Carry out the Marketing concept

Customer

satisfaction

INTERNATIONAL EDITION]ifteen editionyagel7

1.3Marketing's role and activities in an organization

know deeply about their markets through the market research process in order to

That is the process of segmenting

marketing strategy in detail

I.4The strategic management process

achieve their objectives

these plans

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

6

.- The market is dynamic because consumers' needs, competitors, the

customers with their capability in a particular period

specified in plans

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

7

Figure 3: The Marketing management process

Implement marketing plan(s) and program

W-HILLINTERNATIONAL EDiTION]ifteen edition-'page35

2 MARKETING STRATEGY

2.1 Definition and determinants

The term "strategy" re[ers to establishing plans and trying to finish these plans in the most effective ways to achieve the plans' target In marketing, a company's marketing strategy is defined as a progress which specifies target markets, which involves in targeting the market, segmenting the market and positioning and related marketing mix o[ "[our Ps" in an efficient way to achieve the goals and objectives of the company Figure 4 shows an overview of marketing strategy process.

Figure 4: Overview of Marketing Strategy Planning Process

Narrowing down to focused Strategy with quantitative and qualitative screeningcriteria

-r- ~fu'lfu:i:rJ I

@l~

External marketing environment

Technological Political and Legal Cultural and Social

Source: Perreault and McCarthy Basic Marketing Mc GRAW-HILL

INTERNATIONAL EDITION Fifteen edition-page50

2.2 Six missions of marketing strategy

The overall marketing strategy of an organization should focus on developing relationships with customers to understand their needs, and to develop goods, services, and ideas to meet those needs A good marketing strategy should have these following steps:

• Gathering Information: research potential customers, their needs, and

they wish to buy

increase in sales, or net profits

responsibilities to specific staff members

2.3 Target market

market-target customers is at the center of the "four Ps" Identifying a target market is noteasy In general, a market is a group of potential customers with similar needs who

market from a market

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

10

We can definite a target market from a market by usmg the market

marketing mix with this market segment

Ideally, "good" market segments meet the following criteria:

customers and deciding on marketing mix variables

2.4 Three principles to improve marketing strategy

2.4.1 Customer value principle

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

11

the key question: How do customers choose more of their company's productsrather than other companies'?

question

2.4.2 Competitive advantage principle

well as the needs of target customers

2.4.3 Segmenting and combining principle

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

12

target market but they are different in nature The people using the first two

called "combiners"

satisfy potential customers

needs of the target market As a result, he can often charge a higher price thatproduces higher profits

combiner who satisfies many ones just pretty well

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

13

2.5 Marketing mix

In modem marketing theories, marketing mix is believed as the

controllable variables the company puts together to satisfy the target market.

These controllable marketing variables are divided into four groups, known as

"The four Ps": Product, Place, Promotion and Price These "Four Ps" are

illustrated in Figure 5 in details

Figure 5: The four P's ofthe Marketing mix

List price Discounts Price Allowances

Payment period

Credit terms

Quality Features Options Style Brand name

Packaging

Sizes Services Warranties

Returns

Product

Channels Coverage Place Locations

Inventory Transport

Promotion

Advertising Personal selling Sales promotion Publicity

Source: Philip Kotler, Gary Armstrong, John Saunder and Veronica

Wong Principles of Marketing Prentice Hall_2001_ page275

2.5.1 Product

2.5.1.1 What is product?

Product means the need-satisfying offering of a company A product may be a physical good or service or blend of both Product is the first

element in the marketing mix, so its role in the marketing mix is essential.

Product strategy includes the strategies of product idea, brand, package and

warranty These four elements have a particular effect on product strategy These four elements are shown in detail in figure 6

Figure 6: Strategy planning for product

Price

Warranty

NoneLimitedFullExtended

Source: Perreault and McCarthy Basic Marketing Mc GRAW-RllL

INTERNATIONAL EDITION ]ifteen edition -'page243

In order to satisfY our customers, we must be flexible in using these four elements Some customers will consider the brand of a product as important for them to make a buying decision while others may think the warranty or the eye-catching package is worth for their spending Therefore, these elements must be used flexibly to satisfY the needs of the companies'

15

target customers' flexibility The managers must track their product and thebehavior of customers by product life cycle (PLC)

2.5.1.2 Product life cycle

decline

because no profits are earned It is the most difficult stage of a product for

In the market growth stage, industry sales grow fast, but profits riseand then start faIling This is the most profitable in the product life cycle, but

at the end of this stage, profits begin to decline even though sales still rise

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

16

Figure 7: Typical Product Life Cycle of a new Product concept

Market

introduction

Market owth

Market

Total industry sales

Total industry profit

Time

Source: Perreault and McCarthy Basic Marketing Me

GRAW-RILL INTERNATIONAL EDITION]ifteen edition 'page271

2.5.2 Place

Place means making goods and servtces available in the right quantities and locations when customers want them It is concerned with all the decisions involved in getting the "right" product to the target customers The product is not much good if it is not available when and where it is wanted The product reaches customers through a channel of distribution A channel of distribution is any series of companies or individuals that participate in the flow of product from the producer to the fmal customer There are two kinds of distribution channel: direct and indirect.

Depending on each situation, managers will decide whether to use the direct distribution channel or the indirect one Usually, managers prefer to distribute directly to the fmal customers because they want to control the whole marketing job, take advantage of serving the customers a lower price or work

17

more effectively than middlemen or no middlemen may be available Even if

nearby

satisfactory job

want to control prices and the service offered in a channel

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

18

mass selling including advertising and publicity and sales promotion The figure 8 gives us a graphically overview of promotion.

Figure 8: Basic Promotion Methods and Strategy planning

Source: Perreault and McCarthy Basic Marketing Mc GRAW -HILL

INTERNATIONAL EDITION]ifteen edition""page378

2.5.3.1 Three methods of promotion

A marketing manager can choose the promotion methods-personal selling, mass selling and sales promotion for promotion strategy flexibly in order to achieve the objectives of the company Because these three methods have different strengths and limitations, marketing managers should use them

19

Personal selling involves direct spoken communication between the

depend on the income of the people in the area it is used This method should

be combined with mass selling and sales promotion

It is less flexible than personal selling, but it will be good choice if the targetmarket is large and scattered because it is less expensive

publicity, is "free" Publicity is any unpaid form of non personal presentation

selling-that stimulate interest, trial or purchase by final customers or others in

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

20

Table 1: Examples of Sales Promotion Activities

Aimed at final Aimed at middlemen Aimed at company's

Coupons Promotion allowances Bonuses

Aisle displays Sales contests Meetings

Point of purchase Trade shows Sales aids

Banners and streamers Catalogs

Frequent buyer Merchandising aids

Sponsored events

Source: Perreault and McCarthy Basic Marketing Mc GRA W-HILL

INTERNATIONAL EDITIONJifteen edition-page380

2.5.3.2 AIDA model

The basic promotion objectives and adoption process fit very neatly with another action-oriented model-called AIDA The AIDA consists of four promotion jobs: to get attention, to hold interest, to arouse desire and to obtain action In the first step, getting attention is necessary to make consumers aware of the company offering Secondly, holding interest gives the communication a chance to build the customer's interest in the product Arousing desire affects the evaluation process to build a preference Finally, obtaining action includes gaining trial, which may lead to a purchase decision The relationship of adoption process to the AIDA jobs shows in Figure 9

Figure 9: Relation of Promotion Objectives, Adoption Process, AIDA Model

Promotion objective Adoption process AIDA model

Source: Perreault and McCarthy Basic Marketing Mc GRA W-HILL

INTERNA TIONAL EDITION]ifteen edition 'page385

2.5.4 Pricing

Price is one of the four major strategy decision variables a marketing manager control Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix, so it plays a direct role in shaping customer value Price is the amount of money that is charged for something of value In order to achieve the companies' objectives, marketing managers must develop a set of price objectives and policies These policies explain how the flexible price will be, at what level they will be set over the product life cycle, to whom and when discount and allowance will be given and how transportation costs are handled these objectives will be seen in figure

Figure 10: Strategy Planning for Price

~

""'I;"r •.•.ir" ~~1cF.1'

"_: : l!~>:~_ -t.\.:.:.l "W

Product

Source: Perreault and McCarthy Basic Marketing Mc GRA W-HILL

INTERNATIONAL EDITION_Fifteen editionjJage464

3.2.4.1 Price flexibility

In the ftrst decision, marketing managers have to decide whether to use a one-price or a flexible price policy One-price policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities One-price policy makes pricing easier, but a rigid one-price policy should be avoided when there is a price- cut from the competitors, especially if the price is somewhat high.

23

A flexible price policy means offering the same product and

makes the pricing easier because it is easy to change the price to adapt to the

lower profit

3.2.4.2 Price level over product policy

Price must be set different at each stage of product life cycle Thereare two pricing policies used to set the price in the product life cycle They

reduce if the customers refuse to purchase

penetration policy is even more attractive if selling larger quantities results in

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

24

3.2.4.3 Discounts and allowances

a Discounts

larger orders but do not tie a buyer to the seller after that one purchase

face irregular demand or excess capacity often use seasonal discounts

they pay within a particular period regulated by the sellers Cash discounts

the sellers to cover the money more quickly than ever

want to buy and instead buy when the sellers want to sell

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

25

b Allowances

four types of allowances

supplier's product locally

items, slower moving items, or higher margin items

without reducing risk price

c Geographic pricing policies

Student:

Department:

Class:

THIEU KIM LUAN

KD 0304

26

Uniform delivered pricing means making an average freight charge to allbuyers It is a kind of zone pricing but in wider extent- an entire country.

Student:

Department:

Class:

27

II INTRODUCTION OF SAGIMEXCO

1 Company's profile

• Company name: SA GIANG IMPORT EXPORT CORPORATION

• Transaction name: SA GIANG IMPORT EXPORT CORPORATION

• Short name: SAGIMEXCO DONG THAP

• Year of establishment: 1966

• Trade mark of SAGIMEXCO DONG THAP

"AN ToAN v~ SINH THl,l'C pHAM

£lE £lAM BAo SOC KHOE NGlf6'J TIEU DUNG"

~~IMEXCO £lONG THA;'

SAGIMEXCO.

DONGTHAP

Department: INTERNATIONAL BUSINESS ADMINISTRATION

Class: KD 0304