Marketing strategy for TNS Vietnam services

Specifically looking into Asia Pacific region which TNS Vietnam is actively doing business; market research turnover reached an estimated US$3,270 million see chart 1, with year on year

MBMM PROGRAM

NGUYEN HUY HOANG

MARKETING STRATEGY FOR TNS VIETNAM SERVICES

FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor: Dr Dang Ngoc Dai

Ho Chi Minh City

2007

I hereby enclose 8 hard copies of my final project entitled “Marketing strategy for TNS Vietnam services” to the Universiteù Libre De Bruxelles – Solvay Business School & Ho Chi Minh City Open University This final project is to the best of my knowledge and I certify that all information contained in this project

is true and accurate in every respect and may be considered for any further checking by the Universities

In preparing this final project, I’ve already received valuable feedback and comments from Dr Dang Ngoc Dai, my tutor for this project, which I do highly appreciate and treasure

In finishing my Master of Business & Marketing Management program, I would also like to show my big gratitude to my wife who has been supporting, encouraging and being with me all the time I would also like to thank Professor J.P Baeyens and Dr Tran Anh Tuan who have designed and implemented this course the 1st time in Vietnam My special thanks are to my line manager, Mr Fabrice Carrasco and TNS Vietnam who have sponsored and offered lots of support for me to finish this Master program

To my personal feeling, this Master program is really valuable, worth the money and efforts and helpful both for my career and my personal development in the future

Thank you all for your kind support!

Chapter 1: Introduction

1.1 Background of market research industry………page 1 1.2 Objectives of the final project……….page 3 1.3 Organization of the final project……….page 4

Chapter 2: Business environment analysis

2.1 Overview of TNS Global and TNS Vietnam………page 5 2.2 External business environment analysis……….page 8 2.3 Internal business environment analysis………page 13

Chapter 3: Marketing strategy

3.1 Vision, mission and objectives for TNS Vietnam……….page 15 3.2 Marketing strategy………page 17

3.2.1 Segmenting………page 17 3.2.2 Targeting………page 19 3.2.3 Positioning……… page 19 3.3 Marketing mix………page 20

3.3.1 Marketing mix – Conception……….page 20 3.3.2 Marketing mix – Communication………page 24 3.3.3 Marketing mix – Channeling……….page 25 3.3.4 Marketing mix – Convincing……….page 25 3.4 Suggestions and recommendations………page 26

Reference list………page 31

CHAPTER 1:

Introduction

1.1 Background of market research industry:

As a major force in the global market research industry, there is a need for TNS

to have an overall understanding of the global market research industry key trends which are highlighted as below:

̌ Global market research turnover tops US$23.3bn in 2005, representing year

on year growth of 5.7% and a net growth of 3.0% Average growth rates over the last four years tops 5% with average net growth at 3%

̌ Growth rates stabilize in Europe and North America, whilst Asia Pacific

continues to outpace all other regions (see chart 1)

̌ Over two thirds of global market research turnover is generated in the top 5 markets which are USA, UK, France, Germany and Japan France moves into

3rd position, overtaking Germany, amongst the largest research markets in the world

̌ China records net growth of almost 25% and will be pushing for top 5 ranking within 5 to 6 years if growth continues at this rate

̌ Growth for 2006 is expected to continue at 4-6%, driven by good economic conditions and increasing client demand for continuous multi-national research

̌ Significant market consolidation, with 88 acquisitions taking place during

2005 The top ten companies generated 58% of industry revenue in 2005

̌ Increased outsourcing and off-shoring has enabled cost savings of 30 - 40% for data processing, and programming and coding online surveys

̌ Broadening range of skills required from researchers In response, companies are hiring people from key client sectors and have developed extensive training programs to improve consulting, strategic, IT and relationship management skills

̌ Companies continue to invest heavily in greater technological capabilities and keep competitive barriers high

̌ Use of online market research continues to grow rapidly, resulting in higher response rates, faster delivery of results and lower data collection costs Online research accounts for estimated 13% of spend

Specifically looking into Asia Pacific region which TNS Vietnam is actively doing business; market research turnover reached an estimated US$3,270 million

(see chart 1), with year on year growth of 8.9% and net growth of 7.4% This is a continuation of a strong growth trend from 2001 onwards Since 2001 research sector in Asia Pacific has consistently grown faster than the global growth rate in real terms; in common with other industries in the region Growth is strongly linked to macro economic conditions in specific countries, such as Japan, Australia, Korea, China, and India Vietnam market research industry is expected to grow at 15% in 2005 and 14% in 2006 – quite higher than the average growth rate of Asia Pacific region; mainly driven by the strong growth of TNS Vietnam, AC Nielsen Vietnam and other emerging local market research companies

Chart 1: Global & regional turnover 2005 and net growth rate on 2004 – Source: ESOMAR industry report 2005

1.2 Objectives of the final project:

In line with the strong growth of market research industry in Asia Pacific and Vietnam, TNS Vietnam is facing the challenges of how to apply TNS Global strategy into Vietnam successfully and build a suitable and effective marketing strategy to ensure the strong and sustained growth rate of the company in the future This final project is conducted in order to have deep analysis and understanding of what TNS Global is doing in the global market and what TNS Vietnam is doing specifically in Vietnamese market in line with its global strategy Using the Segmenting-Targeting-Positioning marketing model as a specific tool, this project aims at suggesting the suitable marketing strategy and marketing mix for TNS Vietnam, trying to build a comprehensive and thorough guideline for TNS Vietnam marketing activities in the coming years

45

36

4 1 14

Europe ($10.4bln +2.4%)

North America ($8.3bln +2.1%)

Asia Pacific ($3.3bln +7.4%)

Central & South America ($1.0bln +1.5%)

Middle East &

Africa ($0.3bln +6.7%)

1.3 Organization of the final project:

Apart from the appendix and the reference list, this project includes 3 chapters

Chapter 1 “Introduction” analyzes the key trends of market research industry globally and in Asia Pacific and Vietnam specifically This chapter also provides the objectives and the organization of the final project

Chapter 2 “Business environment analysis” provides an overall understanding of what TNS & TNS Vietnam are doing in the market; analyzes the external and internal business environment; from those analyses this chapter tries to provide a full picture of strengths, weaknesses, opportunities and threats of the business environment which, based on that, we will try to build the marketing strategy and marketing mix for TNS Vietnam

Chapter 3 “Marketing strategy” tries to apply the global marketing strategy of TNS Global into Vietnam situation and build the marketing strategy and marketing mix for TNS Vietnam together with the suggestions and recommendations

CHAPTER 2:

Business environment analysis

2.1 Overview of TNS Global and TNS Vietnam:

TNS Global (Taylor Nelson Sofres Plc.) is one of the world's leading market information groups Through its global network of operating companies in 70 countries, TNS collects, analyzes and interprets information, as well as delivers innovative thinking and excellent service, to help local and multi-national clients better understand the needs and wants of their customers In particular, TNS provides research, advice and insight on market segmentation and positioning, brand and advertising research, new product development, and stakeholder management, supported by a range of Business Solutions TNS specializes in fast-growing and established business or industry sectors that require a global presence or the transfer of highly developed expertise which are Automotive; Consumer; Consumer Panel; Finance; Healthcare; Internet, Television and Radio Audience Measurement; Media Intelligence; Polling and Social; Technology

Below are some key facts of TNS Global:

̌ Global network spanning over 70 countries

̌ Revenue: £1bn in 2006, the key source of revenue comes from Europe however ALM (Asia-Latin America-Middle East region is growing and

becoming more and more important; see chart 2)

̌ Over 14,000 full-time employees world-wide

̌ 9 Market Sectors with dedicated researchers – however Consumer (Qualitative, Quantitative, Consumer Panel researches) and Media are still

the biggest with more than 50% revenue contribution – see chart 3)

Chart 2: TNS Global revenue split by region in 2005 % – Source: TNS Global

Chart 3: TNS Global revenue split by sector in 2005 % – Source: TNS Global

As a member of TNS Global, TNS Vietnam is currently the leader in market information industry in Vietnam with the market share estimated at 35% in 2006

12

23

65

ALMNorth AmericaEurope

34

1911

914

13

ConsumerMediaBusiness SvsTechnologyHealthcareOther

(see chart 4) The company was established in 1996 and has been in Vietnamese

market for more than 10 years At the moment, the company has more than 250 full-time staff, 1,500 field force and 11 offices across Vietnam TNS Vietnam was ISO accredited since 1999 and has been interviewing over 500,000 Vietnamese people since then The company is currently the market leader in Vietnam with market share estimated at 35% in 2006 TNS Vietnam is also doing quite well in terms of human resources management with the retention rate standing at 92% in 2006 The company is also the only full service market research company in Vietnam which can provide the whole package of service to Clients spreading from consumers’ awareness, attitude, and media habits to their purchase and usage behaviors with its Customized, Consumer Panel and Media

VSG Others

2.2 External business environment analysis:

According to the latest report from Business Monitor International, Vietnam is anticipated to continue to grow at a pace of 8-8.5% annually in the years ahead High FDI levels and a hoard of infrastructure projects will ensure that economic activity remains high over the forecast period Remaining bottlenecks in the economy and a weak Vietnamese dong will keep inflation at a high level but it is believed that the longer-term trend is downward as the Vietnam dong starts to appreciate Imports, in particular of capital goods, have rebounded following World Trade Organization accession in January 2007 but exports will catch up and gradually decrease the trade deficit after a peak of 5.7% of GDP this year Vietnamese government is targeting the growth of the country at 8.2-8.5% in

2007, up from 8.17% in 2006 The IMF and World Bank both forecast growth of 7.5%, while the ADB expects 7.6% In general, all sources – both internally and externally have very positive forecast on the GDP growth of Vietnam in the coming years

With the current 86 million people, the population under 30 years old is 57%, the consumer base (15-69 years old) around 58 million, Vietnam has a very young population and a huge consumer base at the moment More than that, the next 10 years will be the golden age of Vietnam when the main base moves up to the working age – they will have more money and will spend more There is also more and more urban population, increasing from 27% to 32% in the next 10 years Vietnamese families will become richer and richer, the family size will be smaller – they will enjoy better living conditions and upgraded needs, asking for more entertainment and more product innovations These changes will impact the landscape of Vietnam's economic future and consumption trends for years to

come Below are some key trends that will shape the future of consumerism in Vietnam generally and shape the growth rate and strategic direction of market research industry in which TNS Vietnam is the market leader specifically:

̌ Population growth: in line with the population growth, consumer spending will be fast increasing; the work force will be doubling and the same for the decision makers and consumers

̌ Emergence of a new income class: in the next 10 years, a new high− income class will emerge in Vietnam, being the driving force behind acceleration and proliferation of luxury goods, driving ‘aspirational’ purchases and fuelling luxury goods sales

̌ Time and place of purchase: Modern Trade outlets will revolutionize spending behavior by reducing frequency of purchase, while increasing value of purchases Purchases through internet and credit cards will also change how and where consumers spend their money

̌ FMCG fierce competition: competition between major Fast Moving Consumer Goods (FMCG) companies will be a major trend, impacting pricing, availability and category management An increase in competition will also force major restructuring and drive a price war between manufacturers and retailers, benefiting the consumers

̌ Infrastructure development: infrastructure development will create a huge boom for high-price items, such as cars, electronic goods and new media

̌ Tourism destination: tourism development will influence consumer trends and products and services from overseas, and create many more jobs for future consumers in Vietnam Tourism will also help spread wealth across Vietnam

as well as foreign social and consumer trends

̌ Necessities of life: today's average Vietnamese consumer buys the bare necessities of life on a weekly basis however by 2016; a Vietnamese shopping basket will become much more sophisticated with the addition of personal care categories and convenience products Line extensions and specialty products will fuel consumer spending

̌ Beauty and metrosexuals trend: beauty products and personal care items will continue to boom in Vietnam, driven by both sexes, females and males

In analyzing the external business environment, below are some opportunities and threats of the environment in which TNS Vietnam is operating:

Opportunities:

̌ Vietnam has been one of the fastest-growing economies in Asia over the past

years, averaging growth of 7.5% a year (see chart 5) This strong growth will

bring lots of investors into Vietnam which is also the potential clients of TNS Vietnam

̌ Vietnamese government is determined to push ahead with the oriented reforms, corruption clamp-down, bureaucracy ongoing reforms in a bid to speed up the approval regime for foreign investors and make it more transparent These will create a better business environment which TNS Vietnam can also benefit and push for its future growth

market-̌ The economic boom has lifted many Vietnamese out of poverty, with the official poverty rate in the country falling from 58% in 1993 to 20% in 2004 This means that there will be lots of changes in the consumerism which TNS Vietnam can help its clients to get these understandings and insights

̌ WTO membership will give Vietnam access to both foreign markets and capital, while making Vietnamese enterprises stronger through increased competition This membership will also help TNS Vietnam specifically to widen its services to best meet the increasing needs of the market and get more and more potential clients

̌ Vietnam market research industry is expected to grow faster than the GDP growth rate of the country in the next 5 years which is very favorable for TNS Vietnam to further develop in the country and fully benefit thanks to its

market leader position at the moment (see chart 5)

̌ Lots of changes in the consumer behaviors which require the expertise and specialized services from TNS Vietnam to better understand and best meet the changing needs of Vietnamese consumers

Chart 5: GDP growth rate vs Market research growth rate in Vietnam; f: forecast – Source: World Bank reports and TNS estimates

̌ The narrowing of the fiscal deficit is clouded by the government’s heavy reliance on off-budget operations, while poor credit allocation could lead to the build up of bad loans and contingent government liabilities, further affecting Vietnam’s public finances

̌ Ongoing trade disputes with the US and EU, and the general threat of their protectionism, which will remain a concern even after Vietnam’s already joined WTO in November 2006

̌ Increasing regional and international integration of the economy will present major challenges to less competitive areas of the economy

̌ Strong inflationary pressures, driven by sustained high oil prices and further outbreak of avian flu, risk curbing growth prospects

̌ In terms of clients, companies here in Vietnam still haven’t had full understanding of the need of using market research services and do not want

to spend much money for this kind of service

̌ There is an increasing need from clients to integrate the insights from consumer attitude, sales & share performance and consumer behaviors to get real insights of the market / brand performance which require TNS Vietnam

to continually offer the full package service, building the expertise and professionalism of its staff and sharpening the analytical skills

̌ In terms of competitors, key competitors of TNS Vietnam like AC Nielsen Vietnam, Milward Brown – CI Vietnam together with other emerging local market research companies like FTA, CBI are also improving their service quality, decreasing their prices, recruiting market research talents, investing more into new products / services, making the relative competition much stronger & fiercer

2.3 Internal business environment analysis:

In analyzing the internal business environment, below are some strengths and weaknesses of TNS Vietnam:

Strengths: Based on the 4 cornerstones of TNS Global vision & mission, TNS Vietnam has built its strengths in terms of (1) client orientation; (2) service excellence and cost efficiency; (3) expertise and innovation; (4) people

development as below:

̌ TNS Vietnam already builds 7 specialist sectors which are (1) automotive; (2) consumer; (3) finance & business services; (4) healthcare; (5) telecoms; (6) polling & social; (7) media in line with TNS Global with the aim of developing both the technical and sector specific skills required to assist its sector clients make better and informed decisions Together with that TNS Vietnam also allocates the specific market research expert of each sector to create expertise and professionalism

̌ TNS Vietnam also develops the 5 areas of expertise together with the relating business solutions and assigns the expert in charge of those business solutions with the intention to build a framework around information needs

and the corresponding methods

̌ TNS Vietnam is the only research agency in Vietnam obtaining certified quality control system (QCSI = ISO 9000) for more than 5 years and have the wide coverage to Cambodia, Laos & Myanmar markets

̌ TNS Vietnam is the only market information company who can provide stop service for Clients from customized research, business solutions, consumer panel and media currency in Vietnam, being able to provide 360” marketing support for all elements of marketing research