(LUẬN văn THẠC sĩ) towards the formulation of a new marketing mix strategy of habeco in the new economic era

This research study examines to develop the effective marketing mix strategies for HABECO in Hanoi city in order to increase the market share, and protect its leading position in the Ha

NGÔ VIỆT HÀ

TOWARDS THE FORMULATION

OF A NEW MARKETING MIX STRATEGY

OF HABECO IN THE NEW ECONOMIC ERA

XÂY DỰNG CHIẾN LƯỢC MARKETING MIX TẠI HABECO TRONG THỜI KỲ MỚI

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017

NGÔ VIỆT HÀ

TOWARDS THE FORMULATION

OF A NEW MARKETING MIX STRATEGY

OF HABECO IN THE NEW ECONOMIC ERA

XÂY DỰNG CHIẾN LƯỢC MARKETING MIX TẠI HABECO TRONG THỜI KỲ MỚI

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS HOÀNG ANH TUẤN

Hà Nội - 2017

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration

Ha Noi, 07 August 2017

Ngo Viet Ha

wrecking endeavor that few engaged in because it requires a lot of sacrifices and hard work from the researcher However, at the end of one‟s task, one experiences a wonderful feeling of joy, happiness, relief and fulfillment

The researcher would like to extend her sincerest gratitude and thanks to the following people who were very instrumental in the fulfillment of this research study Associate Prof HOANG DINH PHI, Ph D., President of Hanoi School of Business and Management, for his untiring effort and belief that this program is possible thus enabling us to pursue the MBA degree;

DR HOANG ANH TUAN, Ph D., thesis adviser, for his guidance and endless support for the improvement of this study

To ALL THE HSB PROFESSORS, for their support and guidance extended

throughout the graduate studies in Hanoi School of business and management, Vietnam;

HSB STAFF, for providing me the necessary research materials provided to us; MANAGERS and EMPLOYEES of Hanoi Beer Alcohol Beverage joint stock corporation, my Respondents, for their patience and cooperation in answering the questionnaire and for other data given;

MY FAMILY and FRIENDS, for the love and support in one way or the other; and

TO ALL who have contributed to make this study a success

Ngo Viet Ha

iii

ACKNOWLEDGMENT ii

List of figures v

List of Tables vi

INTRODUCTION 1

1 Rationale 1

2 Literature review 2

3 Aims of research 3

4 Objects of research 4

5 Scope of research 5

6 Research methodology 6

7 Thesis structure 7

CHAPTER 1 THEORETICAL BACKGROUND ON MARKETING MIX STRATEGY 8

1.1 Definition of terms 8

1.2 Strategic Marketing Planning Process 9

1.2.1 Marketing Situation Analysis 9

1.2.2 Marketing Strategy Design 12

1.2.3 Marketing Mix Program Development 15

1.2.4 Implementing and Managing Marketing Strategy 23

CHAPTER 2: APPLICATION OF THEORY: A CASE OF HABECO COMPANY26 2.1 Introduction of HABECO 26

2.2 Statement of the Problems 28

2.3 Conceptual framework 29

2.3.1 Research Design 31

2.3.2 Respondents of the study 32

2.3.3 Sample and Sampling Techniques 32

2.3.4 Research Instruments 33

2.3.5 Data gathering procedures 34

CHAPTER 3: RESULTS AND DISCUSSIONS 35

3.1 Profile of the Respondents in Terms of Selected Variables 35

3.2 Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City 38

3.3 Significant Difference on the Respondents‟ Perception on the Marketing Mix of HABECO Company in Hanoi City 44

3.4 Findings 51

CONCLUSION, LIMITATION AND IMPLICATION 54

1 Conclusion 54

2 Limitation 55

3 Implication 55

REFERENCES 57

APPENDIX A 58

APPENDIX B 59

v

List of figures

Figure 1.1 Strategic marketing processes 11

Figure 1.2 Selecting a marketing strategy 14

Figure 1.3 Price determination process 21

Figure 2.1 Illustrates this conceptual framework 31

List of Tables

Table 1: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Age 35 Table 2: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Gender 35 Table 3: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Civil Status 36 Table 4: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Educational Attainment 36 Table 5: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of types of Respondents 37 Table 6: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Monthly Income 37 Table 7: Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City In Terms Of Product 38 Table 8: Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City In Terms Of Price 39 Table 9: Respondents‟ Perception on the Marketing Mix Stategies of HABECO Company in Hanoi City In Terms Of Place 41 Table 10: Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City In Terms Of Promotion 42 Table 11: Composite table of General Weighted Mean of Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City 43 Table 12: Computed F_value on One-Way ANOVA of the significant Difference between the Respondents‟ age and their perception on the Marketing Mix Strategies

of HABECO Company in Hanoi City 44 Table 13: Computed F_value on One-Way ANOVA of the significant Difference between the Respondents‟ Gender and their perception on the Marketing Mix Straegies of HABECO Company in Hanoi City 46

vii

Table 14: Computed F_value on One-Way ANOVA of the significant Difference between the Respondents‟ Civil Status and their perception on the Marketing Mix Strategies of HABECO Company in Hanoi City 47 Table 15: Computed F_value on One-Way ANOVA of the significant Difference between the Respondents‟ Educational Attainment and their perception on the Marketing Mix Strategies of HABECO Company in Hanoi City 48 Table 16: Computed F_value on One-Way ANOVA of the significant Difference on the Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City when grouped according to Customers, Retailers and Wholesalers 50

INTRODUCTION

1 Rationale

Vietnam‟s domestic beer industry is preparing itself for fierce competition from foreign beer companies after the signing of the Trans Pacific Partnership (TPP), a U.S

led free trade agreement Under the TPP, Vietnam will reduce its imported beer tax from

35 percent to zero percent

Vietnam represents a clear market opportunity for foreign beer brands Unlike some

of the other countries in the region, Vietnam has a strong culture of beer drinking According to the Vietnam Beer, Alcohol, and Beverage Association, Vietnam is one of the region‟s largest consumers of beer, ranking behind only China and Japan In 2015, consumption levels reached 3.4 billion liters; a 2.5 percent increase year on year The beer market has seen an average growth of 10 percent per year

With the conclusion of the Trans Pacific Partnership in sight, competition in Vietnam‟s beer market is only expected to intensify

To succeed in this environment, companies must consider the market trends that will likely shape the industry over the next few years This will help them understand the challenges they will encounter and transform these challenges into opportunities for process improvement, enhanced flexibility and, ultimately, greater profit-ability As everyone known developing effective marketing strategies for a company is the key to success in its target market Marketing helps companies to maximize product sales through deployment of product policy, pricing, distribution and promotion, to maximize the satisfaction of consumer, to maximize choice of consumers Marketing activities have become essential for both sellers and buyers

in all spheres of social life When lack of understanding of the market will not have the policy basis to access to market, to maximize sales to maximize profits, will not even satisfy customers to the risk of losing customers and finally defeat in the competition This study will find out solutions to help HABECO become one of powerful corporations, holding the leading role in the beer manufacturing industry

Because of marketing‟s boundary orientation between the organization and its customers, channels members, and competition, it is central to the business strategy planning process (Day, 1984) Strategic marketing provides the expertise for environmental monitoring, for deciding what customer groups to serve, for setting product specifications and for selecting which competitors to position against

Link between Marketing Strategy and Corporate Strategy:

Corporate strategic planning involves the activities such as developing a clear sense of the company‟s mission, identifying the company‟s strategic business units, allocating resources to the various strategic business units, and expanding present business and developing new ones to fill the strategic-planning gap The corporate strategy is concerned with what types of business the company as a whole should be in and is therefore concerned with the scope Marketing strategy,

on the other hand is part of functional strategy which emerges in each strategic business unit as part of corporate strategy

According to Guiltinan and Paul (1996), corporate strategy is type of plan which outlines how a firm should use its resources to produce and market a specific array of products and services in order to achieve overall corporate objectives In essence, the corporate strategy provided a general statement It defined the products

in which the organization would be involved but left open the details of how each product or product line would be marketed

While the corporate strategy presents a plan developed by top management

to guide the total organization, a marketing strategy is usually developed by a middle manager to guide a firm‟s activities for a product or a line of related products More specially, a marketing strategy is a plan which indicates how a manager deploys marketing resources on an individual product or product line in order to achieve a specified product objective (such as market-share growth or maximizing cash flow)

3 Aims of research

Hanoi Beer Alcohol Beverage Joint stock Corporation (HABECO) was established from Hanoi Beer Alcohol Beverage Corporation by equitization in 2007 With unique technological know-how and hundreds years of tradition, with modern systems and equipment, with skilled qualified dedicated staff team, the Corporation's products have received the admiration of the million consumers in the domestic and international Today Hanoi Beer brands are resulted from several generations, as consumer confidence, the pride of Vietnamese brand

Currently, together with rising living standard, demand for beer quickly increases and high quality brands are much preferred More and more foreign breweries entered the Vietnam market as well as breweries in the country made to diversify products Currently almost all provinces have brewery named localities, each plant there many beers with different names and directions to the different customers At present, all players are facing the fierce competition between local and foreign brands Most of the producers try to exploit their distinctive competencies to gain competitive advantages and select the appropriate competitive

in order to achieve its marketing objectives and meet consumer needs and wants in

a better way than its competitors But how can the company develop such a marketing strategy, identify the target market or proper niches for its products, and consolidate its position in the target market? Regarding the case of HABECO, at present, HABECO is a leading brand of Vietnam and is facing the intensified competition from Saigon beer, the local brewery and foreign brewery produced in Vietnam as Heineken, Tiger… the question is:

How can HABECO protect its position in market of Hanoi city?

How can HABECO develop effective marketing strategies to increase market share in Hanoi and surrounding areas?

To answer this question, HABECO needs to develop the marketing mix program for each local market to defend its current market share This research

study examines to develop the effective marketing mix strategies for HABECO in

Hanoi city in order to increase the market share, and protect its leading position in the Hanoi beer market

4 Objects of research

As everyone known developing effective marketing strategies for a company

is the key to success in its target market Marketing helps companies to maximize product sales through deployment of product policy, pricing, distribution and promotion, to maximize satisfaction of consumer, to maximize choice of consumers Marketing activities have become essential for both sellers and buyers

in all spheres of social life When lack of understanding of the market will not have

the policy basis to access to market, to maximize sales to maximize profits, will not even satisfy customers to the risk of losing customers and finally defeat in the competition This study will find out solutions to help HABECO become one of powerful corporations, holding the leading role in the beer manufacturing industry

of Vietnam, to continue to have transition to meet integration requirements, to contribute to the economy of the country

This research is the basis data to advise the Board of management of HABECO some information to build overall development strategy of corporation It also enables the Executive Board have new information to offer appropriate solutions to develop Hanoi beer brands which is popular increasingly not only on domestically but also on the international

Specifically, this study has very practical significance for seller and marketing team to have conceived more than fully about the domestic market They know that competition is present and they have to give the specific solutions to promote to expand market share and maintain high position of HABECO in the beer industry of Vietnam

This research is presented in the form of a case study exposing the complexities

of a real business environment in the beer market of Hanoi city The purpose of this research is to develop marketing mix strategies for HABECO in Hanoi Thus, it is necessary to the analyze products, price, place, promotion and current marketing strategy of HABECO in order to formulate the marketing mix strategy

The company mission sets out the reason why the company exits and what it should be doing and the company‟s marketing objectives give a guideline of what it wants to gain and become This will serve as a guide for the process of Strategic Marketing Mix for HABECO

5 Scope of research

This research study was conducted at HABECO The study has been undertaken purely from a viewpoint of marketing relating to develop the marketing mix strategies for HABECO in Hanoi city

6

This research focus on respondent satisfaction relates to the development of the

marketing mix strategies including product, price, distribution, and promotion

Data will be collected just in Hanoi city for the last 2 years Data will be collected by quantitative and qualitative research by depth interviews and by survey attitudes of consumer by the structure question So the solutions give in this thesis has affected to market in Hanoi

6 Research methodology

The research design for this study is the descriptive method This will describe the perceptions of customer who are respondents about products, price, place, promotion of HABECO

Data and information needed for conducting the research were obtained by quantitative research and qualitative research The qualitative research used here was in-depth interviews The quantitative research with the structure questions was used to conduct the survey on attitude of the consumers toward beer These questions focused on products, prices, distribution and promotion of beer brands It was used for determining the design improvement of the Marketing mix strategies for HABECO period 2016 - 2020

The sampling size of 119 consumer respondents was chosen at random by visiting big-size beer shops and restaurants which have logo of Hanoi beer in the front of the shops

The researcher used the questionnaire It was distributed to the different respondents The purpose of questionnaire is to collect data regarding awareness and attitude of customers This process measured whether respondents are aware of the strategies, perception of the customer on how satisfied they are and Problems and limitation of

HABECO under study as to product (Services), price, promotion, place (Distribution)

The purposes of the interviews are to have an insight into the practice of marketing activities of HABECO, to indicate the problems and limitations of their marketing activities and to understand and clarify management's views on the issue

Written request for interview was sent to clients in advance in order to ensure their cooperation and their active contribution

7 Thesis structure

CHAPTER I THEORETICAL BACKGROUND ON MARKETING MIX STRATEGY

 Background of the Study

 Statement of the Problems

 Conceptual Framework CHAPTER II: APPLICATION OF THEORY: A CASE OF HABECO COMPANY

 Introduction of HABECO

 Research design

 Respondents of the study

 Sample and sampling techniques

 Research instruments

 Data gathering procedures

 Primary data collection

 Secondary data collection

 Procedures in data collections CHAPTER III: RESULTS AND DISCUSSIONS

 Profile of the Respondents in Terms of Selected Variables

 Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City in terms of 4Ps

 Significant Difference on the Respondents‟ Perception on the Marketing Mix

of HABECO Company in Hanoi City

 Results: A new marketing mix strategy CONCLUSION, LIMITATION AND IMPLICATION

8

CHAPTER 1 THEORETICAL BACKGROUND ON MARKETING MIX

STRATEGY 1.1 Definition of terms

Customers include retailers, wholesalers and consumers of the Company Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit HABECO Company and its stake holders

Marketing mix is a collection of mix-oriented marketing variables can be controlled by the Company may select and use appropriate, assist each other in order to locate a product on the market objectives identified to achieve competitive advantage, reinforce strong position in the marketplace of the company This study will collect four P: Product, Price, Place, Promotion These are tools you can use to pursue your goals in your target market

Market segmentation of HABECO Company is distinct groups of buyers who might merit separate products and/or marketing mixes The marketer tries different variables to see which reveal the best segmentation opportunities For each segment,

a customer-segment profile is developed The effectiveness of segmentation analysis depends on arriving at segments that are measurable, substantial, accessible and actionable

Place decides where the product is to be sold HABECO uses the traditional way for selling its products to wholesalers who will then sell beer product on to retail outlets

Price is the quantity of payment or compensation for beer products of HABECO

Product is fresh beer, beer Hanoi can, beer Hanoi bottle and beer Truc Bach Promotion is concerned with any vehicle HABECO employ for getting people

to know more about beer products and related services Advertising, public

relations, point – of – sale displays, and word – of mouth promotion, internet are ways of HABECO for promoting its products

Strategic marketing is a market-driven process of strategy development, taking account a constantly changing business environment and the need to achieve high levels of customer satisfaction Thus, marketing strategy builds competitive advantage by combining the customer influencing strategies of the HABECO Company into integrated array of market-focused actions Strategic marketing links the Company with the environment and views marketing as a responsibility of the entire business rather than a specialized function

1.2 Strategic Marketing Planning Process

Various steps in designing strategic marketing planning within an industry can be found in literature and basically there principles are all similar An approach for strategic marketing process consist of marketing situation analysis, designing marketing strategy, marketing program development, and implementing and managing marketing strategy It is shown in Figure 2.1 So there is a need to discuss this in more detail

1.2.1 Marketing Situation Analysis

The marketing situation analysis is the first step in the design of new strategy

or examining an existing strategy It comprises the external and internal environment analysis These analyses guide the choice of marketing strategies

The marketing environment is a place where the company must start its search for opportunities and possible threats It consists of all the actors and forces that affect the company‟s ability to transact effectively with its target market The external environment can be divided into macro environment and microenvironment

The macro environment includes more general forces which often do influence the long run activities of the company It consists of economic, socio-cultural, technological, political, legal forces in relation to the firm's total environment Thus, the achievements, difficulties and challenges of Vietnamese

Figure 1.1 Strategic marketing processes

Source: Cravens, 1994 The internal environment analysis is to help the company recognizing itself

in terms of strengths and weaknesses The internal analysis includes the corporation's structure, resources, production and business and marketing activities Corporation resources are the assets that include people, managerial skills, financial

Market Situation Analysis

Analyzing markets Market segmentation Analyzing competition Marketing information Systems and research

Implementing and

Managing Marketing Strategy

Designing effective Organizations Marketing strategy Implementation

And control

Designing

Marketing Strategy

Market targeting Positioning strategy Marketing strategies For selected situations Planning for new products

Marketing Program Development

Product portfolio strategy Pricing strategy Distribution strategy Promotion strategy

1.2.2 Marketing Strategy Design

Designing marketing strategy includes market segmentation and targeting, positioning strategy and the marketing strategy choice

Market segmentation and targeting

After evaluating market segmentation, the companies have to target the best market segment(s) Market targeting selects the people or organizations that company wishes to sever in the product-market To do this, it must first evaluate profit potential of each segment, which is a function of segment size and growth, segment structural attractiveness, and company objectives and resources Then, company must decide how many segments to cover It can ignore segment differences (undifferentiated marketing), develop different market offers for several segments (Differentiated marketing) or go after one or a few market segment (concentrated marketing)

Thus, once the company‟s product-markets are identified and their relative importance to the firm determined, it selects the targeting strategy This decision is the focal point of marketing strategy, since targeting guides the setting of objectives and developing a positioning strategy

Positioning strategy

Regardless of the types of market coverage chosen, the company must develop and communicate for every market selected A positioning strategy that will clearly differentiate it or its products from competitors Positioning is the act of designing the company‟s offer so that it occupies a distinct and valued place in the target customers‟ minds (Kotler, 1991)

Positioning strategy should take into account:

 The criteria or benefits the buyer considers when purchasing a product, including the relative importance of the criteria

 How the firm is differentiated from its competition

 The limitations of competing products regarding important buyer needs and wants The positioning strategy indicates how the firm or its brands would like to be perceived in the eyes and minds of the market target customers Therefore, decisions about products, distribution channels, price, and promotion should create

a cohesive marketing program aimed at meeting the needs and wants of consumers

in the firm‟s target market The marketing program combines the firm‟s marketing capabilities into a package of actions intended to position the firm against its competitors

Marketing strategy selection

Selecting a marketing strategy takes into account the factors such as the rate

of growth of product-market, the diversity in the needs and wants of buyers, the structure of competition, the organization‟s competitive advantage in which an organization encounters Strategy selection may involve the developing a new marketing strategy or changing an existing strategy

As argued by Guiltinan and Paul (1991), to choose the best marketing strategy, a manager must consider several kinds of information, as follows (Figure 2.2)

 Product objectives to help company determine the necessary basic type of strategy For example, if market share objectives are important, managers will employ selective demand strategies to retain or expand market share Alternatively, the greater the importance of cash flow and profitability objectives, the more likely a manager will be to select retention strategies and strategies for increasing repurchase rates That is, these strategies will, in general, be less cost than acquisition strategies or strategies aimed at increasing the number of users

14

 Nature and size of the market opportunity should be clearly established based

on the market analysis and market measurements

 Managers must have a sense of the success requirements in terms of the kinds

of competitive advantages necessary and the level of marketing expenditures that will be necessary to meet profitability goals

Marketing Budgets Required

Needs of Target Markets

Market Opportunity

Market Analysis Measurement Market Competitive Analysis

Competitive Advantages

Market Success Requirements

Profitability and Productivity Analysis

Figure 1.2 Selecting a marketing strategy

Source: Guilinan and Paul, 1991

Other selections of marketing strategy include entry strategy into new market, strategies for growth, mature and declining markets and global strategies

Concerning with this research study, HABECO needs to develop a marketing strategy to protect its leading position in the beer market in Hanoi city and surrounding areas A marketing strategy for market leader faces three challenges: expanding the total market, protecting the market share and expanding market share The market leader is interested in expanding total market because it is the main beneficiary of any increased sale To expend the market size, the leader will have to look for new users, new uses or more usage To protect its existing market share, the market leader has several defense methods: position defense, flanking defense, preemptive defense, counter offensive defense, mobile defense or contraction defense The most sophisticated leaders cover themselves by doing everything right, leaving no openings for competitive attack Leaders can also try to increase their market share This makes sense if profitability increases at higher market share levels and the company‟s tactics do not invite antitrust action

1.2.3 Marketing Mix Program Development

Market targeting and program positioning strategies for new and existing products guide designing strategies for each part of the marketing mix Developing marketing mix strategies for products, distribution, price and promotion is to implement the positioning strategy selected and in order to achieve a coordinated combination of its components that will accomplish the market target objectives in a cost-effective manner

Product strategy

Product is the first and most important element of the marketing mix The product strategy calls for making coordinated decisions on product mixes, product lines, brands, packaging and labeling

 A product mix (also called product assortment) is the set of all product lines and items that a particular seller offers for sale to buyers (Kotler, 1991) The product mix can be describes as having a certain range (how many different

16

product lines the company carries), length (total number of items in its product mix), depth (how many variants are offered of each product in the line) and consistency (how closely related the various product lines are in end use, production requirements, distribution channels or some other way)

 A product line is a group of products that are closely related because they perform a similar function are sold to the same customer groups, are marketed through the same channels or make up a particular price range Each product line is usually managed by a different executive The product line manager should study the sales and profit contributions of each product item as well as the way the items are positioned against competitors „items This provides information needed for making product line decision such as line stretching, line filling, line modernization, line featuring and line pruning

 Developing brand policies for individual product items in line

 Packing and labeling decisions to protect, economy, convenience and promotion

To select a product strategy, the company needs the following information

on current and anticipated performance of the products in the business unit:

 Consumer evaluation of the company‟s products, particularly their strengths and weaknesses and competition (that is, positioning by market segment information)

 “Objective” information on actual and anticipated product performance on relevant criteria such as sales, profits and market share

This information helps management formulate strategies for each product in the mix or line The product strategy includes:

 Developing plans for new products, this process consists of eight stages: idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, market testing and commercialization

 Managing programs for successful products, and

 Selecting strategies for problem products (e.g., to reduce cost or improve the product)

Price strategy

Price is the only element in marketing mix that produces revenue, other elements produce cost Pricing is a problem when a firm has to set a price for the first time This happens when the firm develops or acquires a new product, when it introduces its regular product into a new distribution channel or geographical area and when it enters bids on new contract work Thus, before setting a price, a firm must identify the role that price will play in the product‟s overall marketing strategy There are three generic pricing strategies that a firm might adopt: skim pricing, penetration pricing and neutral pricing (Nagle and Holden,1995) Each strategy is defined by the role pricing plays in the product‟s marketing strategy

Skim pricing (or skimming) is designed to capture high margins at the

expense of high sales volume By definition, skim price are high in relation to what most buyers are willing to pay Consequently, this strategy is viable only when the profit from selling to a price-insensitive segment exceeds that from selling to the large market at a lower price

Penetration pricing involves setting a price far enough below economic

value to attract and hold a large base of customers It is a strategy designed to generate sale volume even at the expense of high margins and, like skim pricing, is favored by a particular environment Penetration prices are not necessarily cheap, but are low relative to value

Neutral pricing involves a strategic decision not to use price to gain market

share, while not allowing price alone to restrict Neutral pricing minimizes the role

of price as a marketing tool in favor of other tools that management believes are more powerful or cost-effective for a product‟s market A firm generally adopts a neutral pricing strategy by default, because the conditions are not sufficient to support either a skim or penetration strategy For example, a marketer may be unable to adopt skim pricing because the products in a particular market are so generally viewed as substitutable that no significant segment will pay a premium

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That same firm may be unable to adopt a penetration pricing strategy because, as it

is a newcomer to the market, customers would be unable to judge its quality before purchase and would infer low quality from low price, or because competitors would respond vigorously to any price that undercut the established price structure Neutral pricing is especially common in industries where customers are quite value-sensitive, precluding skimming, but competitors are quite volume-sensitive, precluding penetration

According to Kotler (1991), when a firm sets price strategy, it has to consider the following factors in setting its pricing policy:

 Selecting the price objectives such as survival, maximum current profit, maximum current revenue, maximum sales growth, maximum market skimming and product-quality leadership

 Determining demand schedule, which shows the probable quantity purchased per period at alternative price level Because each price that company might charge will lead to a different level of demand and will therefore have a different impact on its marketing objectives The more inelastic the demand, the higher the company can set its price

 Estimating cost: demand largely set a ceiling to the price that the company can charge for its product, and company costs set the floor The company wants to charge a price that covers its cost of producing, distributing, and selling the product, including a fair return for its effort and risk The firm therefore, estimates how its costs vary at different output levels and with different levels

of accumulated production experience

 Analyzing competitor‟s prices: the firm needs to learn the price and quality of each competitor‟s offer and use them as a basis for positioning its own price

 Selecting one of the following price methods: markup price, target-return price, perceived-value pricing, going-rate pricing and sealed-bid pricing

 Selecting the final price: the firm select its final price, expressing it in the most effective psychological way, coordinating it with the other marketing mix elements, checking that it conforms to company policies and making sure it will find acceptance with distributors and dealers, company sales force, competitors, suppliers and government

The point of views of Stanton et al (1994), the price determination process consists of selecting price objective, selecting method of determining the base price and designing appropriate strategies Figure 2.3 illustrates this process

Distribution strategy

A distribution channel is a set of organizational units (such as manufacturers, wholesalers, and retailers) that performs all the functions required from a seller to the final buyer The structure of the channel is determined by three elements: the

tasks and activities to be performed by intermediaries, the types of distributors to be

used and the number of each type of distributor

Channel design objectives derive from strategic market and financial goals Such objectives as sales volume, market share, profitability and return on investment must be supported by the distribution channel To operate, market coverage and market control objectives must be developed to guide channel design Market coverage objectives concern customers expectations and degree of product-availability intensity Market control objectives are to ensure product quality, selling effort by channel partners, demand stimulation by promotional activities and the quality of after-sales-support offered to consumers Decisions regarding market control and intensity objectives may be interrelated

Channel strategy consists of decisions regarding channel organization, definition of channel structures, development of criteria for evaluating channel structures and the selection of an appropriate structure

Regarding the level of dependence and commitment among channel members, there are three categories of channel organization for managerial purposes: Vertical Marketing Systems, Free Flow Channels and Single Transaction

Selecting Channel of Distribution, most of the authors agree that there are

basically five factors for consideration in choosing distribution channels: market products, producers, competition, availability of intermediaries and consumers characteristics, as follows (Boone and Kurtz 1993):

 Market factors emphasize the need and geographic location of the firm‟s market, for example, whether the product is intended for the consumer or industrial market

 Product factors also play a role in determining optimal distribution channels In general, the more standardized the product, the longer channel Another generalization about distribution channels is that the lower the product‟s unit values, the longer the channel

 Producer factors concern adequate financial, managerial and marketing resources The producer‟s need of control over product also influences channel section For example, if aggressive promotion is desired at the retail level, the producer often chooses the shortest available channel

Figure 1.3 Price determination process

Source: Stanton et al., 1994

 Competitive factors are important when some firm is forced to develop unique distribution channels because of inadequate promotion of its products by independent marketing intermediaries Intermediaries may not always be available, regardless of how desirable they are from the manufacturers‟ point of view

 Wholesalers and retailers independently owned businesses and both have their own objectives to satisfy They availability of intermediaries is therefore important to consider Consumer characteristic, i.e where, when and how consumers choose to buy the goods is also the indispensable factor to be studied carefully

SELECT PRICING OBJECTIVE

SELECT METHOD OF DETERMINING THE

BASE PRICE

Cost-plus Price base on Price set in

pricing balance between relation only to

supply and demand market price

DESIGN APPROPRIATE STRATEGIES

Discounts and allowances One price vs flexible price Leader pricing Freight payments Unit pricing Psychological pricing Skimming vs penetration Resale price maintenance Price vs nonprice competition

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Some authors have emphasized the consumer-oriented approach in selection

of the distribution channel (Stern and Strodivant, 1987), (Bowersox, 1987) Another approach using the key-factor scoring method may be realistic and appropriated This method requires that all of those factors deemed critical by the channel selectors be considered Then the channel selector will either use “weighted averaging” or “preference ordering” method to rate the channel alternatives

Promotion strategy

Promotion mix strategy consists of four major tools: advertising, sales promotion, personal selling and public relation in which all help the organization to communicate with its consumers, cooperating organizations, public and the other target audiences Promotion strategies perform essential roles in positioning products in the eyes and minds of consumers Promotion informs, reminds and persuades buyers and others who influence the purchasing process Concerning with consumer goods, especially beer, the company needs to emphasize on designing the promotion strategy to convince the consumers to buy its products

According to Kotler (1991) to develop the promotion program, the companies have to consider the following steps:

 Identifying the target audience and its characteristics, including the image that audience has of product The audience could be potential buyers of the company‟s products, current users, deciders, or influencers They could be individuals, groups, particular publics or general public The target audience will critically influence the communicator‟s decisions on what, how, when, where and whom to say it

 Defining the communication objectives, whether it is to create awareness, knowledge, linking, preference, conviction or purchase

 Designing the message, ideally, the message should gain attention, hold

interest, arouse desire, and elicit attention (AIDA model) Formulating the

message will require solving four problems: what to say (message content), how

to say it logically (message structure), how to say it symbolically (message

format) and who should say it (message source)

 Selecting the communication channels: personal and nonpersonal to carry the

message

 Establishing the total promotion budget

 Deciding on the promotion mix, most of companies face the task of distributing the total promotion budget over the four promotion tools of advertising, sales promotion, personal selling, and public relations Companies are always searching for ways to gain efficiency by substituting one promotional tool for another as its economics become more favorable When deciding on the promotion mix, companies should consider factors involved such as type of product market, push versus pull strategy and product-life-cycle stage

 Monitoring to see how much of the market becomes aware of the product, tries

it and is satisfied in the process

 Managing and coordinating the marketing communication process

1.2.4 Implementing and Managing Marketing Strategy

Implementing and managing marketing strategy focus on evaluating and improving organizational effectiveness and marketing strategy implementation and control

Designing the Marketing Organization

An effective organization design selects people and assigns them work responsibilities in a way that is best for accomplishing the firm‟s marketing strategy Deciding how to assemble people into organizational units and assigning responsibility to the various elements that make up marketing strategy impact strategy performance Organizational structures and process must be matched to the different types of business and marketing strategies that are developed and implemented The marketing organization has to be flexible to respond to changing

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conditions and strategy needs Organizational design needs to be evaluated on a regular basis to assess its adequacy and to identify necessary changes

Implementation and Control

Marketing strategy implementation and control are vital links in a series of strategic marketing activities These actions emphasize the continuing process of planning, implementing, evaluating and adjusting marketing strategies They include three important management activities, as follows:

1 Marketing plan and budget

The marketing plan typically includes a situation analysis summary; a market target description and strategic evaluation; overall objectives and specific objectives for each market target; a marketing program positioning strategy; specific strategies for product, price, distribution, and promotion; marketing research; coordination with other business functions; forecasts and budgets and contingency plans

2 Implementation strategy

The marketing plan should specifically include action guidelines concerning the activities to be implemented, who does what the dates and location of implementation, and how implementation will be accomplished Several factors contribute to implementation effectiveness, including the implementation skills of people involved, organizational design, incentives and the effectiveness of communication within the organization and externally

3 Evaluation of marketing performance

Marketing strategy is a continuing process of making decisions, implementing them and monitoring their effectiveness over time Evaluation and control are concerned with tracking performance and, when necessary, altering plans to keep performance on track Strategic evaluation also includes looking for new opportunities and potential threats in the future It is the connecting link in the strategic marketing planning process; therefore, strategic evaluation assures that strategy is an ongoing activity

In general, marketing strategy is the analysis, planning, implementation and control process designed to satisfy customer needs and wants It starts with an understanding of the corporate mission and objectives and the strategy of each strategic business unit The strategic marketing planning process consists of market analysis, deciding marketing strategies, developing marketing mix strategies and implementing and managing marketing strategy Regarding with the case of HABECO, to formulate marketing strategy, it is necessary to analyze the Vietnamese beer market and assess strengths and weaknesses of the company

Corporations Beer - Alcohol - Beverage Corporation (Habeco) is headquartered at

183 Hoang Hoa Tham Street, Ba Dinh District, Hanoi was established May 16,

2003 by Decision No 75/2003 / QD - BCN the Minister of Industry (now the Ministry of Industry and Trade) based reordering Hanoi Beer Company and the member units; officially moved to organize and operate as parent company - subsidiary of Decision No 36/2004 / QD-BCN dated 05.11.2004 of the Minister of Industry

The predecessor of the Corporation's Habeco Brewery scale Hommel 30 employees, led by a Frenchman named Hommel founded in 1890 with the aim of serving the French crusaders In 1954, the North completely liberated, the French withdrew, dismantle the entire machine to the brewery in the state Hommel abandoned In

1957, the brewery was restored to its Hommel economic recovery policies of the Government and renamed Hanoi Brewery

May 1, 1958, the first batch of beer test successfully implemented by Mr Vu Van Boc - a skilled worker's old brewery Hommel combined with assistance from experts of Czech beer August 15, 1958, the first beer of Vietnam branded Truc Bach was born, marking a major turning point in the brewing industry in Vietnam From this, the annual August 15 became the traditional date of the Corporation Habeco

In 1993, Hanoi Brewery paradigm shift operation, renamed Hanoi Beer Company and accelerate the innovation process equipment to increase capacity to 50 million liters / year In 2001, the company implemented projects to increase capacity to 100 million liters / year

After being transferred to the State Corporation in 2003, the event marked a turning point in expanding international cooperation is the Corporation signed a strategic cooperation with the Group of Carlsberg beer in 2007

June 16, 2008, the official Habeco paradigm shift operations to the Corporation shares with the official name is the Corporation shares Beer - Alcohol - Beverage Corporation (Habeco)

In 2010, with the completion of construction projects Brewery capacity of 200 million liters / year in Me Linh, Hanoi, with complete equipment system most modern Southeast Asia has given the Corporation capacity of 400 million liters / year Habeco become either the Corporation's largest brewing Vietnam

Currently, the Corporation has 25 member companies, with the flagship product is somewhat Hanoi Beer, Beer Bottle 450ml red label Hanoi, HANOI BEER Premium Beer 450ml green label, Beer Cans, Beer Truc Bach, Hanoi Liquor

Business:

- Manufacturing, Business Beer, Wine, Drinks and Packaging;

- Import and export of raw materials, supplies, equipment, spare parts, accessories and chemicals;

- Scientific and technological services, investment consulting, investment funds create, organize the materials, business real estate, services and other statutory sectors

Achievements:

- Labor Medal Third Class (1960 - 1962)

- Labour Order second class (1960 - 1962)

- Medal of the Third War (1997)

- First Labour Medal (2000)

- Third Independence Medal (2006)

- Government donated Banners (1992, 1993, 1996, 1998, 1999, 2000, 2002, 2003)

- The industrial emulation flag (1998, 1999, 2000, 2002, 2003) In 2005, in 2006 received the government's Emulation Flag

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- The Corporation Party 14 consecutive years (1990-2003) by Bloc Party and the Ministry of Industry Party merit emulation flag and recognize the Party pure and strong

- Vietnam General Confederation of Labour Unions emulation flag stand strong base (1999, 2000, 2003-2006) and the Certificate of Merit from the Prime Minister month 6/2007

- 5 years in a row (1998-2002), the Youth Union Corporation and the Central Youth Union were awarded certificates of merit group

- 10 consecutive years (1988-1998), modern self defense team constantly keeps circulating emulation flag of the Capital Military Region awarded advanced units outstanding, leading the militia movement, safeguard the army and Military area

- In addition, the Corporation Beer - Alcohol - Beverage Hanoi received numerous certificates of merit from the branches and levels for all aspects of production and business, social, defense, life

- May 6/2002, the quality management system of the corporation TUV NORD of Germany certified to ISO 9001: 2000

- In 2005, accepted HABECO applicable environmental management system meets the requirements of ISO 14000: 2004

- In 2006, HABECO build and implement an effective system of food safety management standard ISO 22000: 2005

- Attaining Vietnam Quality Gold Cup 2002, 2005

- Top Ten Vietnam Excellent Brand 2005

- Vietnam Gold Star Trophy in 2003, 2005, 2007

- Famous Brand Gold Cup 2004 in Madrid

- Europe Gold Award for quality and brand reputation in 2005 in Belgium

2.2 Statement of the Problems

The purpose of this research is to be able to develop a Strategic Marketing Mix for HABECO, in order to maintain if not to improve its current position in the Beer Market of Hanoi city Specifically it will seek to answer the following questions: