Luận văn thạc sĩ organizing marketing activities for vietnamese owned automobile assemblers in the present development process of vietnamese economy

Recommendations for improving the organizing marketing activities fur Vietnamese-owned automobile assemblers 3.3.1, Improving the marketing research, marketing analysis and building

ĐẠI HỌC QUỐC GIÁ HÀ NỘI TRUONG DAI HOC KINH TE

LUẬN VĂN THẠC SĨ QUAN TRI KINH DOANH

NGƯỜI HƯỚNG DẪN KIIOA HỌC: TS Nguyễn Ngọc Anh

Th.S Nguyễn Việt Anh

Ha Nội — 20M7

ĐẠI HỌC QUỐC GIÁ HÀ NỘI TRUONG DAI HOC KINH TE

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DAN KIIOA HỌC: TS Nguyễn Ngọc Anh

'Th.§ Nguyễn Việt Anh

Hà Nội - 2007

1.1 Marketing definition and its basic concepts

1.1.1, Definition of Auiomobile marketing

1.1.2 Fundamental concepis

1.1.3 The development process of automobile marketing

1.1.4, Distinguishing marketing orientation and non-marketing

„10 orientation company

1.2.2 Integrated faclors for successful markcling of VAAs

12.3 Creating value, satisfaction, conserving customer in VAAS «2 14

1.3 Ascertaining the marketing activities contents for VAAS

Chapter 2: Current status of organizing marketing activities of

2.1.3, Vietnam Autamobile Manufacturers Association (VAMA) .38

automobile assemblers in Vietnam

2.3.1, Marketing in Vietnam and Markeling in automobile industry .46

2.3.2 Appraising the marketing activities of FAAs

2.3.3, Appraising the marketing activities of VÀ Ác

Conclusion

Chapter 3: Solutions fur improving marketing activities in VAAs 72

3.1.1 The changes in Macro-Environment and opportunities, challenges

for local Vietnam automobile assemblers “2 3.1.2 The Vietnamese aulomolive market forecasting by 2010 0.0 77 3.2 Development orientation of Government for automobile industry

in period (2005-2010) and overview 2020

3.3 Recommendations for improving the organizing marketing

activities fur Vietnamese-owned automobile assemblers

3.3.1, Improving the marketing research, marketing analysis and

building marketing informalion system for VAAs

3.3.2, Improving the organizing largot marketing for VAAs 88

viii

3.3.3 Improving the organizing marketing mix for VAAs

3.3.4, Improving the organizing marketing resources of VAAs

3.4, The requests for government policies

3.4.1, Improving legally environment

3.42 Improving Infrastructure and MotorizaHon Ð8'

3.4.3, Improving state management for auto industry

Abbreviation & Acronyms

: ASEAN Free Trade Area

Association of Southeast Asian nations

; Complete Built-Up : Common Effective Preferential Tariff Complete Knock Down

: Foreign — Owned Automobile Asscmblers : FPT Corporation

Gross Domestic Product

: Incomplete Knock Down : Local Vietnamese Automobile Assemblers Marketing Trformation System

: Primer Minister

: Public Relationship Research and Development

: Special Consumption Tax : State-Owned Enterprises

Television Commerec United States of Arenica

: Vietnamese-Owned Automobile Assemblers

Vielnatn Automobile manufacturers’ Association

: Value Added ‘Tax : Vietnam Posts and Telecommunications Corporation

: World Trade Organization

vi

wl 7

1.6 SWOT analysis fils into a strategic situation analysi

7 Steps in segmentation process, market positionin,

1.8 Markeling mix und target murke

Chapter 2

Figure:

21 Sales of automobile volume by years

2.2 Sales record by months up to October, 2005

3.8 Aduertising campaign procoss build[g, coi DM

TNTRODUCTION

1 Necessary of the thesis

The devclepment oricntaion of Government is building the

development automobile industry so that by 2020, it becomes a key industry

of the country, capable of meeting the highest demand of local market and

joining regional and international market

From the customers expectation thal Vienam will has the developed automobile market and both model qualily, supporting services and

information of lhem In addition, wilh more than 80 million of populalion, but scale of automobile markct vary small, total sales of VAMA highest in

2003 is 42,556 vehicles, 2004 (40,141) and ten months of 2005 only achieved 28,381 vehicles, thus it is not symmetrical The knowledge of customers

about the domestic car is very poor, now they are favor import car than

domeslic one So it is a reason for less development of Vietnamese

aulomolive indusiry

From the imnclficienly operation of EAAs and we have some new

Vietnamese owned automobile firm join to this market currently, also they

have poor marketing activities both in structure and contents so they did not gained the high attention of customer even in awareness

‘They will face the pressure from the integrated of economy, especially

in given the deadline for AFTA commitment and pending WTO entry, Victnam has nol much time fell lo promote the localization program while few protectionist policies can be implemented

Thus the scope of thesis [ would like to study and propose some new

model pÝ organizing marketing activiHies for VÀ Às in currently and for next

period To build Vietnamese brand name and gain more and morc in sale and markct share and become the big automobile corporation in Vietnam

2 Objective of the research

To systematize the basis marketing theory in automobile industry,

research and establish the basis contents of marketing activities for VAAs

now, figure oul the role of marketing aclivilies in aulo development process

in current Vietnamese aulomotive markel

To quantilative the resull of markeling activities of FAAs and VAAs achievements, and identify the successes, weaknesses and find the main

3 Key research area

- Object of study: The organizing marketing activities in automobile industry in generally, and especially in member of VAMA The main

contents are including organizing the marketing activities and organizing marketing resources of above object

- Research area: Aulomobile assemblers in Hanoi area limiled

4, Methodology

The methodology gives us the guidelines for how we should gather

information for our research and work with it

- Research problem;

With the research areas of “Current Vietnamese automotive

marketing activities” thus and then figure oul the improving markeling

activitics solution and submit some requests to government to support this

sector

- Research objective:

Out research purpose is descriptive and analysis the Vietnamese

aulomolive market and ils current markeling aclivilies of FAAs & VAAs in

the fulure to build develop automobile industry and improving it’s more

compelilive in lhe integrated of Vietnamese economy

- Research method:

The research approach is qualitative study that helps us deeper

understanding of how important of marketing activities impacts to automobile industry We also use quantitative method to choose the sample

size of 100 cuslomers lo understand their need is what will they be got from marketing aclivilies of FAAs & VAAs also evaluale hew salisly of lhem for

current Vicinamese automolive industry for both products and supporting

services

- Data collection;

The choice of a data collection method is a critical point research process

5 Cuntributions of the thesis

With the purpose lo analyze lhe current Vielnamese automolive

marketing aclivilics in the markel the thesis has contribuled some new contributions as follow:

- Analyzing the status of marketing activities in FAAs, concurrently

evaluating the successes and weaknesses, identify the reasons that FAAs

must focus on marketing activities for next period

- A comprehensive realize of role, position, funclion of marketing in

automobile industry, clarify the natural of objective environment factors impact to marketing activities, thence ascertain the basis request for a marketing program to premises for applying in VAAs

- Establishing the detail content and implemented model of

markeling activilies in order to the development Uend of aulomobile industry in the near future Also, syslematize and develop the theory of

marketing in VAAs in Vienam now

6 Thesis structure

Beside introduction and conclusion, the thesis consists 3 chapters:

Chapter: J iterature review is given to providing theories relevant for

automobile marketing activities area

Chapter 2: Current status of organizing marketing activilies in FAAs

Conclusion

CHAPTER 1

LITERATURE REVIEW 1.1 Marketing definition and its basic concepts

LL1 Definition of Antomobile marketing

Macro: Automobile markcting is a structure of organizational system

supply chain of Auto products and its support service to satisfy expect and

demand of customers in the definitive of society-economic system

Micra: Automobile marketing is the marketing activities system of

aulomobile manufaclurers, aulo-disiributors, and olhers marketing

organizalion Il is markcling activitics system of profil organization and

non-profit organizalion, aulomobile marketing is understood specially thal

it is the control function of auto-manufacturers, the planning, managing marketing project, price, distribution system, products, services and PR,

advertising to create the exchange to satisfy for personality and

organivational objectives

1.1.2, Fundamental concepts

L121 Concept and differentiation between demand and expectation

The difference between “demand” and “cxpeclation” is always

getting more attention of marketing in the automobile industry In the facts,

what are the customers want maybe it is not their need Demand is defined that “the deficient impression for something but we are can feeling” and demand are wants for specific products backed by an ability to pay and it

can be salisfied by marketing aclivilies system of aulomobile manufacturers

Expeclation is defined thal “wish for or aspiration for something”

Market demand

Demands, expeclalion we have jusi defined above were make clearly

about products, services to satisfy those demands and expectation So

market demand is the attraction, attention, buying, using or consumption

for products or services that will satisfy the expectation and market

demands

1.1.2.3 Determine customer and customer satisfaction

Whether the buyer is salisficd afler purchase depends on the offer’s

performances in relation lo the buyer’s expectations In general, satisfaction

is a person's feeling of pleasure or disappointment resulting from comparing a product's perceived performance in relation to his or her

expectations

1.1.2.4, Exchange and transactions

Exchange: This is the core concept of marketing, “is the process of oblaining a desired producl from someone by offering something, in return”

The concept of exchange is including some condilions palential lo exist, and

basis for marketing activities later First, there are at least two parties have

demand were not satisfy One party maybe the customer are looking for or

desire for an automobile, auto-service or any information related And other

is the party also looking for customers or providing auta-products Second, demand or capabilily of one parly can meet the demand Third, both parties mus| have something to exchange

Transactions: is a trade of value between two or more parties, it

involves trading goods or services for other goods or services or popular is the trading goods or service for money And it also involves several

dimensions: at least two things of value, agreed-upon conditions, 4 time of

agreement, and a place of agreement

creating, delivering, and communicaling superior customer value to is

chosen target markels For example: aulomobile manufacturer want lo sell

ils products they must through market lo find or get in louch with customers Thus, the basis concepts of marketing activities are creating products, integrated market, building business relation, distribution, setting

price, and offer services

1.1.3 The development process of automobile marketing

In the traditional business, automobile marketing field has old hislory

of operation so the marketing activilies are appear very soon in the world

1.1.3.1 Production orienied period:

To understanding how automobile marketing develop, we will study

the case of famous auto company: Ford Motor Corporation, the second

biggest auto manufacturer in the world

Ford Motor Corporation, headquarter office in Netroit, chief city of

US aulomobile manufacturing indusiry, and il has been produced aulomobile since cighleen century Al thai time, the most important

objective of company is the producing automobile with high quality So that the revenue they have and customer habit they get depend on the quality of

automobile which Ford was produced.

That status also happened with other famous auto manufacturers in

the world They have just only focused on producing cars with quality bul

have not understand what are their customers wants or expects for their

products and desires for their support service

1.1.4.2 Sales oriented periad

As other traditional enterprises, production oriented period well operaied unlil the end of eighteen cenlury, early of 19" century Bul in the 1920s, car was becoming indispensable of the life in the devcloped countries

At thal lime, customers were more flexible, more active, and market was not

focus as before Thus, for almost company, they changed strategy by organized or hired big mobile sales teams Competition is expressed by

capability of building mobile sales teams And auto manufacturers were not exceptionable, such as: Ford had been changed their strategy by building

mobile sales teams and in whole US and expending their showroom system 1.1.3.3, Markeling period

Marketing oriented period beginning after World War I], in the en of

1940s, many companies recognized that they were the technology

development epoch and have been started with restructuring their economy after war In addition, the consumption has recovered by imcreasmg the demand for goods and services For many organizations, one of the most

imporlant question thai what product or service they should provide at that lime? As new awareness, customers were who oriented for producing

process and distributed resources for the firms

Hence, automobile manufacture industry was also like others

business field, a same orientation was development follow marketing

oriented Automobile manufacturers may provide big amount of car by

mobilized, distribuled resources and restructured producing process What

the changes of this period through marketing oriented concept The marketing orientation were expressed through oriented for developing the range of cars and supporting services including: marketing service, sales

service, advertising, PR, maintenance service, repair and other promotion

service aller sales This developmen! orienlalion combine wilh the disiribulion systems has met the markel demand and salisficd their

cuslomer

1.1.3.4, The marketing culture period

Some companies have achieved lhe advanced marketing level when

their marketing activities become to a part of corporate culture and

distracted through all level department of corporate And the marketing

aclivities now is not only tasks for marketing department, il is efforl of all person in the company

In this period customer are center for all their activilics Automobile

manufacturers and supplier also recognized that customers are center for all

their activities

In this period: the marketing oriented concept is evaluated by follow

factors:

- Customer oriented: understanding and thoughtful of target

customers for providing surpassing service for customer

- Competition oriented: define the competitors (Current and

potential) and analysis their strengths, weaknesses and strategy.

- Diagonal function integrated: integrating and promoting resources

of company focus on crealing the value for cuslomer

- Strategic management oricnted: finding solution for promoting value by right investment and suitable

- Profit: having revenue enough to compensate for long -run expense and satisfy stockholders

- Public oriented: Concentrate on serving long-run benelils of customers and society

1.14, Distinguishing marketing orientation and non-marketing orientation company

Nowadays, whereas most of automobile manufacturers operate base

on customer oriented and effort lo widen marketing orientation through oul all departments of firm, bul in some companies also have the non-markeling

orientation cxist on long-run planning So to understand clearly two

concepts above we can distinguish by building long-run planning process as

follow

1.1.4.1, Non-marketing orientation

The figure 1.1 as follow describes the steps of building long-run

planning process in the non-marketing orientation company:

Figure 1.1: Steps of building plan according to non-marketing orientation

10

In the past, manufacturing car and providing services of VAAs are usually unprompled, they are all provided depend on the plan which the government was assigned In generally, the first step is identifying the mission and objective of ihe firm, And then the second step of this process is building the strategy, this step is very difficult and take more time than others Next, the step of applying the strategy that more difficult Because of the firm can nol know thal siralegy is favored by cuslomers or nol?

14.2 Markeling orientation

The building ptan process according lo markeling, orientation

completely differentiated with non-markcting orientation as described in follow model 1.2:

Figure 1.2: The building process of plan according ta marketing

orientation Idowlify Mission and abjectivs

to activities of company: what model of car is favored by customer currently,

whal service is now successful, and how many polential customers in the future?

1.2 Environmental marketing of VAAs in the market economic conditions

1.2

lacra-Ewpiranmenä facEoys

As however, every marketing strategy has impacted by macro-

environment factors, they are mainly including: political and policy, economic, social, lechnological, and compeliliveness factors, In basically,

these factors are uncontrolled but they effect to marketing slralegy Base on

macro-environment analysis the automobile manufacturers will find out the

convenient strategy to serving customer and improving position in the

market We will analyze each of factors as follow:

1.2.1.1 Political and policy factors

This factors include the requesis, mechanism with legally and this factor may analyze base on: polilical stabilily, risk of mililary invasion, legal

framework for coniract enforcement, inicilectual properly protection, trade

regulations & tariffs, favored trading partners, anti-trust laws, pricing

regulations, taxation - tax rates and incentives, wage legislation - minimum wage and overtime, industrial safety regulations

consciousness, etc.) leisure interests are must definite it very important in

marketing for automobile.

1.2.1.3 Technological factors

Technological factors are decisive factor for automobile industry, because every automaker must have innovative technology in hand to

compete with others Technological factors effect to every step to produce

automobile To evaluate technological factors we can base on some factors as follow:

* Recent technological developments

* Technology's impact on product offering

» Impact on cost structure

* Impact on value chain structure

= Rate of technological diffusion 1.2.1.4, Economical factors

Those factors are GOP per person, financial conditions, interest rate

inflation rate, growth rate, labor cost, infrastructure quality can effect le investment decision of company

1.2.1.5 Competitiveness factors

Competitiveness factors are always can not control in every

marketing plan, and marketing plan is built base on these factors exist in the market

‘The number of macro-environmental factors is virtually unlimited In

practice, the firm must prioritize and monilor those factors that influence ils industry Even so, it may be difficult 10 forecast future trends with an

acceptable level of accuracy In this regard, the firm may turn to scenario planning techniques to deal with high levels of uncertainty in important

macro-environmental variables.

1.2.2 Tntegrulel faoloxe for successful marketing of VAAs

To organizing successful markeling,aclivilics in the market, we must define vory clear the integrated factors for marketing in the new market or current period, there are many automakers There are four integrated factors for successful marketing of VAAs and described as follow:

- Pressure form market oriented: the first factors that company get

pressure is marke! oriented, so thal every aulomaker musl unily in a

markeling program lo gel more cfficiontly In therc, not only senior management bul also every member in company must thoughtfully and moet the markct demand, Lvery objectives of cach department must engage

in target of satisfying customer

- Understanding the market, keen in building and distribute the value

of product or service ta customer: they must define “who are their customers? What do they want or desire for”

- The convenience between activities plan and market demand: af last,

every automaker musl have detail markeling plan including siralegy and steps lo implement

1.2.3, Creating value, satisfaction, conserving customer in VAAS

Nowadays, beside the imported car, Vietnam has seventeen

automobile assemblers (including 11 FAAs and 6 VAAs except Honda

motors) providing car and their support service in the market so that

customer has many option lo choose the products and using scrvice base on quality, price, delivery thus get more opportunities selecting, customer

will choose the product which let them get the highest value compare with

their income, price, objective

Figure 1.3: Customer's satisfaction, customer loyalty, value added for

Satisfy the demand of argct customer

[ Providing the | “solution for improving ffor customer

[products/services that products ot services

Whether the buyer is salisfied afler purchase depends on the offer’s

performance in relation to the buyer's expectations In general, satisfaction

is a person's feeling of pleasure or disappointment resulting from

comparing a product's perceived performance {or outcome) in relation to his

or her expectations If the performance falls short of expectations, the customer is dissatisfied, If lhe performance matches lhe expectalions, the customer is salisfied If the performance exceeds expectalions, the cuslomer

is highly satisfied or delighted Most of automakers provided the basis

satisfaction for customer and they will increase the satisfaction for customer

in yearly.

1.2.3.2 Customer loyalty

In gencral, when cusiomer gel higher salisfaction, the higher rate of customer loyalty, because of characteristic of automobile industry that the rate of customer loyalty very high but some research showed that some company had lose the market share while the customer's satisfaction very high It means that customer loyalty in this industry not only base on

product but also base on the sup porling service they provided

1.3.3.3 Value added for customer

The approach for cuslomer’s satisfaction focuses on finding the way

to satisfy the current customer And the approach for value added will bring

customer focus on study decision of customer while buy products or using

service And automakers must answer three questions as follow:

- What are the norms of getting highly appreciate of customer when

buy their car, or compelilor car?

- How customer ranks them and their competilor base on norms

effect lo buying decision?

- How important of each norm in total value added bring to

customer?

By studying the value added for customer, automakers can improving

their competitive position, conserving and attract more new customer, increasing profits

1.2.3.4, Creating salisfaction and value added for customer

In order to understanding more activities, and base on them

automakers can create the competitive advantages We can divide activities

into small segment which through automakers can create value added, or

we can call model value chain Michael Porter of Harvard proposed the value chain as a lool for identifying ways lo creale more customer value including the same activities in most of business organization IIc divided

activities of business organization into two kinds: primary activities and

stipport activities and described as follow figure

Figure 1.4: Porter's Generic Value Chain

Inbound _ | Ouibound Marketing| gorviees >

Logistics [OPS AHONS | 7 oyistios & oS

| `

Se

Primary Activities

The goal of these activilics is lo olfer the cuslomer a level of value thal

exceeds Ihe cosl of the activilics, thercby resulting in a profil margin

The primary value chain activities are:

Inbound Logistics: the receiving and warehousing of raw materials

and their distribution to manufacturing as they are required

“= Operations: the processes of transforming inputs mto finished

producls and services

% = Quibound Logislics: the warchousing and disiribulion of finished

goods,

“= Marketing & Sales: the identification of customer needs and the

generation of sales.

+ Service: the support of customers after the products and services are

sold to them

These primary activities are supported by:

The infrastructure of the firm: organizational structure, control

systems, company culture, etc

Human resource management: employee recruiting, hiring, training,

development, and compensation

Technology development: technologies lo supporl valuc-crealing activities

Procurement: purchasing inputs such as materials, supplics, and

equipment

The firm's margin or profit then depends on its effectiveness in

performing these activities efficiently, so that the amount that the customer

is willing to pay for the products exceeds the cos| of the activilies in the value chain I is in these aclivilies that a firm has the opportunily to

generale superior value A compelilive advanlage may be achieved by

reconfiguring the value chain to provide lower cost or better differentiation

The value chain model is a useful analysis tool for defining a firm's

core competencies and the activities in which it can pursue a competitive

Cost Advantage and the Value Chain

A firm may creaic a cost advanlage either by reducing the cosl of individual value chain activities or by reconfiguring the value chain

Once the value chain is defined, a cost analysis can be performed by assigning costs to the value chain activities The costs obtained from the accounting report may need to be modified in order to allocate them

properly Lo the value crealing aclivilies

Porter identified 10 cost drivers related lo value chain aclivilics:

» Economics of scale

*® Learning

* Capacity utilization

ø Linkages among activities

» Interrelationships among business units

© Degree of vertical integralion

© Timing of market entry

® Firm's policy of cost or differentiation

© Geographic location

e Institutional factors (regulation, union activity, taxes, etc.)

VAAs develop a cost advantage by controlling these drivers better

than the competitors do

A cost advantage also can be pursued by reconfiguring the value chain Reconfiguralion means structural changes such a new production process, new distribution channels, or a different sales approach For

example, FedEx structurally redefined express freight service by acquiring

its own planes and implementing a hub and spoke system

1.2.3.6 Differentiation and the Value Chain

A differentiation advantage can arise from any part of the value chain

For example, procurement of inputs that are unique and not widely

available to competitors can create differentiation, as can distribution

channels that offer high service levels

Differentiation stems from uniqueness A differentiation advantage

may be achieved either by changing individual value chain aclivilies lo increase uniqueness in the final product or by reconfiguring, the value chain

Porter identified several drivers of uniqueness: policies and decisions,

linkages among activitics, timing, location, interrclationships, learning,

integration, scale (e.g better service as a result of large scale), and

institutional factors

Many of these also serve as cost drivers Differentiation often results

in grealer cosls, resulling in tradeoffs belween cos! and differentialion There are several ways in which a firm can reconfigure ils value chain in

order lo create uniqueness Il can forward integrale in order lo perform

functions that once were performed by its customers It can backward

integrate in order to have more control over its inputs It may implement new process technologies or utilize new distribution channels Ultimately, the firm may need to be creative in order to develop a novel value chain

configuralion thal increases product differentiation

1.2.3.7 Linkages between Value Chain Achivilies

Value chain activities are not isolated from one another Rather, one value chain activity often affects the cost or performance of other ones

Linkages may exist between primary activities and also between primary

and support activities

Consider the case in which the design of a product is changed in

order to reduce manufacturing costs Suppose that inadvertently the new product design results in increased service costs; the cost reduction could be

less than anticipated and even worse, there could be a net cost increase

Sometimes however, the firm may be able to reduce cost in one activity and consequently enjoy a cost reduction in another, such as when a design change simultaneously reduces manufacturing costs and improves

reliability so that the service costs also are reduced Through such

improvements the firm has the potential to develop a competitive advantage 1.2.3.8 The Value Chain System

A firm's value chain is part of a larger system that includes the value

chains of upstream suppliers and downstream channels and customers

Porter calls this series of value chains the value system, shown conceptually

to better coordinate upstream and downstream activities, a firm having a

lesser degree of vertical integration nonetheless can forge agreements with

suppliers and channel partners to achieve better coordination, For example,

an auto manufacturer may have its suppliers set up facilities in close proximity in order to minimize transport costs and reduce parts inventories.

Clearly, a firm's success in developing and sustaining a competitive advanlage depends not only on ils own value chain, but on ils ability to manage the value system of which it is a part

1.3 Ascertaining the marketing activities contents for VAAs

13.1 Models and marketing management contents for VAAs in currently

market

1.3.1.1 Markeling research and SWOT analysis of VAAs

- Marketing research

Some markcling oriented organizations always find the new method

to research about marketing with targeted design, analysis, and report in systematically information which they are will be related to specific

marketing situation of that organization

fn the automobile industry, with its characteristics, the research

processes must define or delermine accurale and timely feedback information of environment relaic to providing producis and services

aclivitics such as:

| The changes in macro-environment relate to automobile industry: tariff policy

| The demand, customer behavior

+ Competitors situation, competitor mavement

+ Cuslomer analysis about the image, quality, price of company

The Marketing research process in aulomobile including 6 sleps as

follow

| Step 1: Define the problems, the research objectives: the more clear

problems defined the more accurate result they get And define the research

ka 3

objective that has four types: Discovery (research the problem’s reasons),

describe (determine the changes of markel), checking (appraise the project feasibility), forecast (predict the trond of industry in the near future)

+ Step 2: Develop the research plan: including determine the data sources, research approaches, research instruments, budget, and implementing plan

+ Slep 3: Collect the informalion: including three methods: observalion, checking the sample, and invesligalion (through telephone,

direct interview, focus group or mailing)

+ Step 4 Analyze the information and present the findings including

qualitative and quantitative methods

| Step 5: Make the decision

- SWOT analy:

SWOT analysis is a simple framework for generaling strategic allernatives from a silualion analysis Il is applicable to either lhe corporate

level or the business uni level and frequenUy appears in markcling plans

SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats the SWOT framework was described in the late 1960's by Edmund P Learned, C Roland Christiansen, Kenneth Andrews,

and William 1) Guth in Business Policy, Text and Cases (Homewood, IL:

lrwin, 1969) The General Electric Growth Council used lhis form of analysis

in the 1980's Because it concentrates on the issucs that polentially have the

most impact, the SWOT analysis is useful when a very limited amount of

time is available to address a complex strategic situation.

Higure 1.5: SWOT analysis fits into a strategic situation analysis

SWOT analysis can serve as an interpretative filter to reduce the information

to a manageable quantity of key issues The SWOT analysis classifies the internal aspects of the company as sirengths or weaknesses and the cxlernal situational factors as opporlunitics or threals Slrengths can serve as a

foundation for building a competitive advantage, and weaknesses may

hinder it, By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats

Internal Analysis

The internal analysis is a comprehensive evaluation of the intemal

cnvironmenLs poicntial strengths and weaknesses Faclors should be

evaluated across the organization in arcas such as: company culture,

company image, organizational structure, key staff, and access to natural

resources, position on the experience curve, operational efficiency,

operational capacity, brand awareness, market share, financial resources,

exclusive contracls, patents and trade secrels

The SWOT analysis summarizes the internal factors of the firm as a

list of strengths and weaknesses

Txtemal Analysis

An opportunity is the chance to introduce a new product or service that can generale superior returns Opportunities can arise when changes occur in the external environment Many of these changes can be perceived

as threals lo the market position of exisling products and may necessilate a

change in product specifications or the development of new products in

order for the firm to remain competitive Changes in the external

environment may be related to: customers, competitors, market trends,

suppliers, partners, social changes, new technology, and economic

environmen|, polilical and regulatory environment

1.3.1.2 Organizing target marketing process for VAAs

All of awlomobile firms can not serve all customers in a broad markcl,

the customers are too numerous and diverse in their buying requirement, So

they need to identify the market segments they can serve effectively

Figure 1.7: Steps in segmentation process, market positioning

Market segmentation Selecting target market Positioning In target

- Needs-Based + Segment ailractiveness market

Segmentation - Selecting and segment ~ Segment positioning

a similar set of wants, so that company can serve partly or wholly base on

their markeling mix Thus, we would dislinguish between car buyers who are primarily seeking low-cost basis transportation and those secking a luxurious driving experience Major segmentation variables for customer markets are: geographic, demographic, psychographic, and behavioral

How more clear identification market segmentation, automobile

manufaclurers are easier in selecling the producl or service will be provided Thus, markeling activities will more focus and more efficiently

© Selecting large! markets

After segmenting market according to above regulars, for next step is

evaluation the segment attractiveness to identify the target market An

automobile manufacturer will select target market base on two factors:

segment attractiveness level, their competitiveness in that market segment

% Posilioning producls and services in the market

After selecting largcl markcl, aulomobile manufacturers must

position where their producls and services are in the markel Base on the

customer demand, compare with competitors’ products or services and

combination with their core competency They must decision whether their products or services so as to having useful and competitive towards target customers The regulars create the products positioning are including:

having valuable toward customers, differenlialion, bring surpassing value and suilable with cuslomer’s budgel, also make feasibility profil for

automobile manufacturers.

1.3.1.3, Organizing marketing mix activities for VAAs

The next step alter posilioning products and services in the market is planning and implemerting marketing strategy cfforts through building and implement marketing mix Marketing mix is the set of necessary business oriented factors and can control, Through them the automakers can applied for getting revenue or profits in the target market They are including: producls/services, price, dislribulion (place), promolion, people, process, and physical evidence as the follow modck:

Figure 1.8: Marketing mix and target market

Producls/ service are the commodilics, service or event the ideas are

provided in the markcl, in the aulomobile industry producls and service are

decisive factors, and customers can aware about the car by brand name,

functionality and how the safe of car, the quality, style, and packaging does, and how the service after sale dees, they are can evaluate by Repairs and

Support, warranty, accessories and services ATl above factors attribute for success of famous products or service

- Price

To set the price, an automobile manufacturer must base on the

objective of revenues and profits and also the market situation [it mention to

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total sales record, market share, image and stable of price), here are some

examples of pricing decisions to be made inchide:

+ Pricing strategy (skim, penctration, etc.)

+ Suggested retail price

+ Volume discounts and wholesale pricing

| Cash and early payment discounts

Dislribulion channels: in normally, automakers always use methods

of distribution their products lo market by buili their agency in whole

country or in largel region Beside evaluate of using distribulion channels to getting the products to customer we must analyze how market coverage

they do, and specific channel members and how their management their

inventory also the order processing

+ Promotional strategy (push, pull, etc.} with every promotion

campaign, automakers must choose the suilable promotional siralegy,

depend on the target of campaign

+ Advertising: we can distinguish advertising with other tools of

marketing promotion is that advertising is the direct expense to expand

their products or services to customer, When an automaker use advertising

lools lo get awareness of cuslomer they can control through provided message and received customer Bul their can nol manage or gel the

feedback form cuslomer of their products or service

+ Public relations & publicity: popular for automobile makers,

because this tools including many indirect expenses to introduce products

of public relalion is thal their can raise the high belief of customer bul the

most advantage is that they can not control how the message was public

| Personal selling & sales force, sales promotions, marketing

communications budget are the important tools in promotion campaign

‘They are including the activities to encourage customer buying products or

using services

- People

Most of automakers have the professional staffs and employees, from

selection, training and motivation employee are very important to get the

objective is geiting customer's satisfaction.

To getting customer’s satisfaction, employee had selected and trained

very careful, they will achieve high performance and knowledge in dealing

with customer: attitude with customer, meet the customer requests, positive,

and ability solve problem in quickly and enthusiasm for serving customer

organive the tour visiting for potential customer, TVC introduction,

advertising in brochures, internet, and leaflets to get the belief of customer

- Process

An automaker can have numerous marketing processes le achieve

their objectives Wilh characteristics of automobile industry have many

processes in manufacture and provide service for customer to get the

satisfaction Marketing products is that management the process of making

process, from design to complete products and make product differentiate

with other in the market And marketing service is the process in providing support service to customer lo gel the loyally cuslomer

In conclusion, to build the efficiently markeling slralegy, we must

‘build seven factors in uninterrupted in target market of automobile

manufacturers, to get profits base on customer's satisfaction in

comprehensive, to improving product's position and company’s image m the market

13.1.4 Organizing resources for marketing activities of VAAs

- Marketing department

The targets can be achieved efficiency or not depend on ability of

marketing department We must planning enough people and also financial budgel for marketing depariment We must evaluate organizing human for marketing aclivilies of an aulomaker base on tolal marketers in markeling depariment, how qualily of staff such as: experience, mental, ability, crealive,

inspirits of staff also the activity of selection and training also attribute to promote the marketing force

- Marketing information system (MIS)

This system is very important but currently it is not applied well in

VAAs, Basically, MIS are including four paris as follow:

+ Intemal record syslem: including internal reper! on orders, sales,

Prices, costs, inventory levels, receivables, payables and so on By analyzing

this information, they can spot important opportunities and problems

| Marketing intelligence system: is a set of procedures and sources used by managers to obtam everyday information about developments in the marketing environment from sale team, PR group, and mass media

providing information

+ Marketing research sysiem: sludies of specific the problems and

opportunities that marketing is facing

| Marketing decision support system: including statistic analysis

method, modern models to support marketing managers make better

decisions

- Budget for marketing plan

All of Automobile manufacturers must have the define budget for

marketing Because it very necessary for the marketing activities effective or not, and it also effect to sales record of company Marketing budget usually

draw from business expense and value added from marketing activities,

allocalion base on periodic markeling plan or annual plan

Methods of generaling budget for markeling activities in VAAs:

+ Percentage per sale method

+ Capability method

+ Balance competition method

| Target — Objective method

And also person in charge in budgeting must follow amd control cost

and efficiency of markeling

1.3.1.5 Checking and markeling control for VAAs

When the marketing siralegy is deployed then the lasks of marketing

department must evaluate the efficiency and marketing control

Efficiency is perhaps evaluated by 2 ways: base on market result and

financial result The market results are revenue, market share, attitude and

loyalty of customer Financial results are evaluating base outcome compare

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Marketing control are including marketing control process building

follow close behind the objectives of marketing department

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