The application of Internet marketing in Vietnam status & solution

Second data using: Because it’s a new matter in Vietnam so the author applied this method to learn the theories and the realities of Internet marketing application in the enterprises so

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS

NGUYEN VUONG PHUONG AN

THE APPLICATION OF INTERNET MARKETING IN

VIETNAM STATUS & SOLUTION

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: Dr NGUYEN THI PHI NGA

Hanoi – 2010

CONTENTS

Page

INTRODUCTION 1

CHAPTER 1: OVERVIEW INTERNET MARKETING 4

1.1 THE CONCEPT OF INTERNET MARKETING 4

1.1.1 Marketing concept 4

1.1.2 Internet concept 10

1.1.3 Concept of Electronic marketing and Internet marketing 12

1.1.4 Some of the different characteristics between E-marketing, Internet marketing and traditional marketing 14

1.2 ACTIVITIES OF INTERNET MARKETING 16

1.2.1 The Internet produce 16

1.2.2 The channel of Internet direct distribution 18

1.2.3 Price and control of price by Internet 19

1.2.4 Integrated Marketing Communication 20

1.2.5 Customer Relationship Management 21

1.3 THE ROLE OF MARKETING VIA INTERNET 23

1.3.1 For the customer 23

1.3.2 For the society 23

1.3.3 For business activities 25

1.4 THE INTERNET MARKETING ACTIVITIES IN OTHER COMPANIES IN THE WORLD 28

Chapter 2 STATUS OF INTERNET MARKETING IMPLICATION IN VIET NAM 30

2.1 CONDITIONS OF INTERNET MARKETING IMPLICATION IN VIETNAM 30

2.1.1 Conditions of infrastructure 30

2.1.2 Human resource conditions 31

2.1.3 Awareness conditions 32

2.2 INTERNET MARKETING ACTIVITIES IN VIET NAM 33

2.2.1 Situation of Internet marketing application in Vietnam 33

2.2.1.1 Website establishment 33

2.2.1.2 Online advertisement 35

2.2.1.3 E-mail marketing 38

2.2.1.4 Marketing by searching engine 40

2.2.1.5 Marketing by “virtual society” 43

2.2.1.6 PR on Internet 46

2.2.1.7 Viral marketing 47

2.2.2 Assessment of Internet marketing in Vietnam 48

2.2.2.1 Some of the results achieved through Internet marketing activities in Viet Nam 48

2.2.2.2 Some shortcomings of Internet marketing in Vietnam 54

CHAPTER 3 SOLUTIONS TO THE EFFICIENT DEVELOPMENT OF INTERNET MARKETING IN VIET NAM 61

3.1 DIRECTION TO THE DEVELOPMENT FOR INTERNET MARKETING IN VIET NAM 61

3.1.1 Direction for the State 61

3.1.2 Direction to the development of Internet marketing 63

3.1.2.1 Training improvement in E – Commerce and Internet marketing 65

3.1.2.2 Extensive use of online advertisement 66

3.1.2.3 Increase PR activities to establish trademark 67

3.1.2.4 Internet marketing engines 67

3.2 SOLUTIONS TO THE EFFICIENT DEVELOPMENT OF INTERNET

MARKETING IN VIET NAM 68

3.2.1 Solutions at the governmental level 68

3.2.1.1 Developing of legal infrastructure 68

3.2.1.2 Developing infrastructure technology 69

3.2.1.3 Training and educating, popularization of E-Commerce 71 3.2.1.4 Improving a safe system of internet 73

3.2.1.5 Co-operating actively in international E - Commerce and Internet marketing area 73

3.2.2 Solutions at the business enterprises level 75

3.2.2.1 Changing perceptions about the Internet Marketing and Marketing 75

3.2.2.2 Internet Marketing planning 76

3.2.2.3 Internet Marketing plan budgeting 79

3.2.2.4 Internet Marketing Training 79

3.2.2.5 Internet Marketing engines application 80

CONCLUSION 88

APENDIX 89

LIST OF TABLE MAP AND IMAGE

Map 1.1: Planning business strategies 25

Image 2.1: Leading search engine in the world 41 Image 2.2: Vietnamworks’ website 49 Image 2.3: Hapro’s website 54

Table 1.1: Customer care supplying channel 22 Table 1.2: The number of people using internet throughout the world 24 Table 2.1: State of development of internet in Vietnam 30

LIST OF ABBREVIATIONS

VNNIC Viet Nam Internet Network Information Center

www World wide web

AMA American marketing association

SWOT Strengthen, Weakness, Opportunities, Threaten

TCP/IP Internet Protocol Suite

VCCI Vietnam Chamber of Commerce and Industries

INTRODUCTION

1 The necessary of the research

According to Viet Nam Internet Network Information Center (VNNIC) statistics, the number of Internet users in Vietnam in 2007 was 18.5 million equivalents to 22% of the population and the number of Internet subscribers had reached 5.2 millions subscribers; 20-25% of the 150,000 businesses in the nation have its own website These statistics indicate the Internet’s significant development in Vietnam as well as enterprises’ perceptions about the advantages of the Internet Internet does not only criminate distant time but also makes the traditional business activities become more effectively as well

as create more opportunities in business

The Marketing concept has just been known in Vietnam since the late 1990s Although many Vietnamese enterprises have not been accustomed to the new marketing knowledge with the booming of Internet, they saw the extremely interesting variation of this activity Internet marketing is not only the great advantages but also the exciting challenges to many companies because Internet has its characteristics that are different from traditional business Therefore it is not suitable to apply traditional Marketing methods to Internet

Although 20-25% of Vietnamese enterprises have websites, most of them are simple such as establishing website to give information monotonously or advertising on Internet… The general marketing knowledge and Internet marketing methods are not known widely and deeply in Vietnam Therefore, researching in Internet marketing systematically in Vietnam is really important

2 Literature Review

Marketing activities in general and Internet marketing in particular have been researched by many economic experts such as Philip Kotler, Judy Strauss, Dave Chaffey, etc In Vietnam, the issue of Marketing was taught in the universities for about 10 years ago Though the knowledge of Internet marketing activities are new, many research have been conducted on it as scientific research project For example, the ministerial research “Solutions to apply e-Marketing for exporter’s enterprises in Vietnam” was implemented

by Dr Pham Thu Huong in 2007

3 The Objects and scope of the research

The research concentrates on the Internet marketing activities in small and medium-sized businesses to shown the strength as well as the shortcomings of these activities Thus we can propose the solutions and requirements to make the Marketing system more suitable for Vietnam enterprises

For the curent research’s scope, it only focus on the period of 5 years recently when Internet is exploded and the E - Commerce’s appearance creates the necessary of Internet marketing activities in small and medium-enterprises in Vietnam

5 The Research methodology

This research combines differentt methods which are the following:

Second data using: Because it’s a new matter in Vietnam so the author applied this method to learn the theories and the realities of Internet marketing application in the enterprises so we could have an overview of Internet marketing development

Data analysis: The statistic data will help us consider the Internet marketing development to have more accurate predictions so we can recommend more effective solutions

6 The structure of the research

This research was constructed into 3 chapters:

Chapter 1: OVERVIEW OF INTERNET MARKETING

Chapter 2: STATUS OF INTERNET MARKETING APPLICATION IN VIET NAM

Chapter 3: SOLUTIONS TO THE EFFICIENT DEVELEOPMENT OF INTERNET MARKETING IN VIET NAM

CHAPTER 1: OVERVIEW INTERNET MARKETING

1.1 THE CONCEPT OF INTERNET MARKETING

The break-out of internet have created many great changes in every aspect of life and have lead to many excellent things that have never been created before Moreover, many new concepts which are related to Internet have appeared such as: E- Marketing, Internet Marketing, marketing online…

So what is Internet? What are Marketing and the new concepts was born from

a combination between internet and Marketing?

In this part, we will bring out the meaning of Internet concept, marketing concept Then we will consider them in the relationship with new concepts like Internet marketing, E-marketing to find out the differences

1.1.1 Marketing concept

There are many different notions of marketing Marketing is a process

of organizing sales force to sell the company’s products Marketing is a process of advertising and selling Marketing is the activity of learning about and satisfy the market’s need Marketing is doing market, researching market

to satisfy it In this research, the author followed this definition: marketing is socioeconomic structures which organization and individuals use to meet their needs and wishes fully by a process of exchanging products on the market According to Philip Kotler, Marketing is a process of managing that has social characteristics Therefore individuals and teams have what they need and want by the activity of creating, selling and exchanging the products that are valuable for other people

This Marketing concept is based on the core concepts: need, want and demand, product, value, expense and satisfaction, exchange, transaction and relationship, marketplace, marketing and marketers

Need, want and demand: Marketing began with human needs and their real wishes People need food, air, water, clothes and safe place to survive Moreover, people want to relax, to study and come in for many other services They also like models and trademarks of the basic service commodities

It is necessary to distinguish the need, want and demand concepts

Need is a status when they feel lacking of a basic satisfaction For example, people need food, clothes, accommodation, safety, property, appreciation to survive These needs are not created by society or marketers They have existed as a part of the body and by oneself of that person

Want is a longing for specific things to satisfy the deeper need An

American need for food and wish to have hamburger, need for clothes and wish to have Pierre Cardin, need for appreciation and wish to have a Mercedes automobile In another society, these needs are met fully by other ways: The Australian aboriginal satisfy their hungry feeling by penguins; demand for clothing as well as clothes by a loin-cloth, appreciation by a necklace Human needs are not so many but their wants are much more Human wants always develop They are formed by the forces and social forces such church, school, family and enterprises

Demand is a wish to have the specific products that are supported by ability and readiness to buy them The want becomes demand when purchasing power supports Many people wish to have a Mercedes automobile but only a few of them have the ability and ready to buy it Therefore, companies not only determine the quantity of people who want to buy their products but also quantify how many of them are ready and afford the car

These different characteristics bring out the critical ideas of the people who accuse marketing of “creating demand” or “those who do marketing lure

people to buy what they don’t want” Marketers do not create demand Demand existed before marketing activity appearance With other social influences, marketers have effect on what they want However they don’t create the demand on social status They have the effects on demand by making appropriate, attractive and popular products

Product: People satisfy their demand by commodities and services

Product term is understood as the consist of commodities and services We define product as anything that can be sold to satisfy someone’s demand or wish The significance of buying product is not only to own them but the operation and service that they bring to the human We buy an automobile because we want to see it all day We buy it because it provides transport service We buy a kitchen not to watch it but to use it The kitchen is a useful mean to insure our meals Services are determined by many things such as: human beings, place, activities, organization and ideas If we feel sad, we can

go to see hilarious films, join singles club or agree with different ideas Therefore, we use product term to refer to material products, service products and other means that can satisfy a demand or a wish Sometimes, we use

many other terms instead of product, commodities, demand or resources

Cost value and satisfaction: In many products that can satisfy a

certain demand, how does the customer choose? Suppose a person must go 3 miles to their office There are some products can satisfy this demand: roller-skating, bicycle, motorbike, car, taxi and bus The plan for this ability to create a product selection Suppose he wants to meet some other demands on the way to work such as: safety, convenience, speed, economical We call it

as demand set Each product can satisfy each different human’s need Bicycle

is slower, not safer but more economical However, he must decide which product will meet fully all his needs

The main concept is the value to the customer He will evaluate the product’s usefulness that satisfies his demand set He can categorize products from the most useful one to the least Value is the customer’s evaluation of the product’s function that can meet his needs fully

We can ask him to imagine an ideal product that he would considers most He may answer that the ideal one will take him to his office fast, safe and will cost him nothing In this situation the reality value of each product will depend on how it approaches to the ideal product

Suppose he is concerned most about speed and convenience If he can use any products freely, we can predict that he’ll choose an automobile But this will lead to a matter: the car costs much more than a bicycle so he will have to give up other things to purchase it Therefore he will consider the value and price of the product before buying it He’ll choose the product that can create the highest value on one dollar

Nowadays, Customers behavior researchers remove the limitation of many economic hypotheses about the customer’s evaluation and election

Exchange, transaction and relationships: Human having needs or

wishes and labeling products have not shown all marketing’s meanings Marketing will appear when people decide to satisfy their demand and wish

by exchanging Exchange is one of many ways to have products Therefore, marketing originated in this way

Exchange is an action receiving a product from someone by giving him something Exchange is a decisive concept which creates the foundation for marketing Exchange will happen in these conditions:

- There are at least two participants

- Each participant must have something that can be valuable to the other

- Each participant has the transaction and changing abilities

- Each participant has the right to accept or refuse the other’s proposals

- Each participant believes that they want to transact with the other

If there are five these conditions, there will be exchange potentiality Exchanging is done or not depends on participants compromises that have mutual advantages (or at least not harmful) Thus, exchange is considered as the activity of creating value, which means exchange often brings about more advantages for two sides than previous

Transaction requires one thing: there are at least two or three values, compromised - condition, compromised - time, and compromised - place Normally there is a law system supporting and forcing participants to put their commitments into effect faithfully Transaction leads to contradiction easily because of the misunderstanding or deliberation If there were no law of contract, participants would not believe in each other, hence, they would all have disadvantages

Enterprises monitor their transaction and classify them as line of business, price, location and other events Sales analysis is the analyzing sales origination according to products, customers and areas of sales

According to the most popular understanding, marketers are looking for the way to create the other side’s reaction An enterprise wants it to be purchased A politic candidate wants it to be voted for him Churches want it

to be embraced the faith Social activity groups want it to be the approval of their ideas Marketing includes the activities conducted to create the desired response to an object from the public and their goals

To ensure that the exchange goes smoothly, marketers must analyze what each participant will give and receive Simple transaction situations can

be displayed by a file that include two participants, their wishes and their invitation to circulate mutually

Now we can realize the nature of the transaction Marketing Marketing transaction is part of a larger idea than relationship marketing, those who do

marketing wisely are trying to build long term relationships, reliability, mutual benefit with large customers, the distributor, dealer and suppliers This work is done by promising and ensuring high quality, good service and competitive price for the other Moreover, this is done better by setting up relationships that tie together in socioeconomic and technical fields with partners Marketing relationship will reduce costs and time of transaction and the best case the transaction will be moved from negotiated into the work routine

The final result of relationship marketing is to form a unique asset of the company, known as network marketing It includes company, suppliers and customers that the company has set up believable relationship with Marketing is tending to change from trying maximum profits in each service into increasing maximum mutual advantageous relationships The rule is setting up good relationships Then the transaction will have advantages Market: Market involves all present and potential customers who have the same need or specific wish They are ready and able to take part in exchanging to satisfy their demand

So the market size depends on some people who have demand and care resources They are ready to exchange their resources for what they want Business people use the term market to refer to different customer groups They talk about market demand (such as daily food market), market products (footwear market), market demographics (such as the youth market) and geographical markets (eg market Vietnam) They also widen this concept

to mention that the groups which are not customers such as voter market, labor market, donation market

Marketing is the human activities to be done in relationship with market Marketing include the research activities to make potential demand into reality in order to satisfy human needs and wants

If one side finds exchange ways more actively than the other, we will call the first party as marketer and the second one, a potential customer Marketer is the person who looks for resources from others and is ready to give something in exchange Marketer finds the others reaction to buy or sell something Otherwise, marketer is buyer or seller Suppose, there are some people want to buy an attractive house that has recently been completed So these buyers are marketers In this case the two sides also find the way to exchange actively; we call them as marketeers, which are called mutual marketing

In the normal situation, marketer is a market service company, the final user faces to competitors The company and its competitors send the similar products and messages to the final user directly to or marketing intermass mediary statutes (middle-men and trade promoters) Their relative effectiveness is influenced by the suppliers as well as the corresponding forces of the environment (demographic, economic, facility, technical, political legal and social / cultural)

After researching carefully these above concepts, they repeat the marketing concepts like this: Marketing is socioeconomic structures that are used by organizations and individuals to satisfy their needs and demands by a process of exchanging products on the market

1.1.2 Internet concept

Precursor of Internet is ARPANET The Agency project management research and development under (America) Department of Defense ARPA link four first places in May 7/1968 include: Stanford research institute, California University, Los Angeles, Utah general university and California University, Santa Barbara They are the first wide area network (WAN) Internet term appeared firstly in the early 1974 At that time the net was called ARPANET In 1983, TCP/IP protocol was considered formerly as

American military standard All the computer connecting with ARPANET must used this new standard

Milestones of the Internet were established in the mid-1980s when the organization U.S NSF National Science Foundation established networks to link this large computer centers together called NSFNET Many enterprises changed from ARPANET into NSFNET After about 20 years, ARPANET became less effective and was stopped in the 1990

The forming of the spine net of NSFNET and the other areas’ net created a beneficial environment for the Internet development In 1995, NSF became a research net but Internet still developed With the open connection, Internet has become the biggest net in the world It appears in every trade as well as politic, military, educational, cultural, socioeconomic… and other areas Since then, Internet services haven’t stopped growing and created a new period: Internet Electronic Trade epoch

So what is Internet? According to Wikipedia - the world's largest encyclopedia open book, Internet is a global information system that can be accessed publicly involving computers’ connected nets together This system transmits information by packet switching based on a network protocol that was standardized (IP protocol)

Because of the involvement of thousands of enterprises’ computers as well as institutes, university, individuals and global governments, Internet supplies huge information and services In addition, Internet provides many beneficial services for the users Several of these are Electronic mail (e-mail), chat, search engine, trade and transaction services, educational and medical services, as well as online learning and teleprocessing

Huge information sources are attached to correlative services that are webs system and other document in WWW (World Wide Web)

1.1.3 Concept of Electronic marketing and Internet marketing

Coinciding with Internet applications break out and many other mass media in every aspect of life, people starts to research its applications for marketing Internet and mass media can be used to support these marketing purposes:

Identifying- Internet and mass media can be used to identify customers demands

Anticipating- Internet supplies an information channel so that customers will know more detail about products and can make buying-decision easily

Satisfying: The success key to Internet Marketing is satisfying customers by websites convenience and their appearance as well as contents Together with Internet and mass media in marketing, Electronic Marketing (e- marketing) and Internet marketing have been created We will consider some typical concepts of E-marketing and Internet marketing

E - Marketing concept:

According to Philip Kotler, E- marketing is the activity of making plans for products, price, distribution, promotion, services, ideas to satisfy demands

of organization and individuals by electronic means and internet

Or: “E-Marketing involves all activities that satisfy customers’ demand and wishes by Internet and Electronic media (According to Joel Reedy, Shauna Shullo, Kenneth Zimmerman)

Or a more specific definition of e-Marketing by Dave Chaffey, who is the author of ‘E - marketing excellent’, ‘ Total Email Marketing’, ‘ Internet Marketing’: E- Marketing is the application of internet and electronic means (web, email, file, multimedia, PDA…) to the marketing activities to get the aims of the organization and continue to have relationships with customers They are conducted by getting to know more about the customers

(information, behavior, value, loyalty…), promoting to the purposes and service on Internet to satisfy customers’ demand

All of the above E-marketing concepts can show the most basic point

of E-marketing:

electronic information media

Media: Internet and the other electronic media such as: mobile phone,

digital signal device, cable and satellite

Internet marketing concept:

When we consider the E-marketing concepts, we realize that Internet plays a very important part in E- marketing So what is Internet Marketing? Let us consider this following concept that belongs to Ghosh Shilkhar and Toby Bloomburg who are in American Marketing Association (AMA): Internet marketing is an area which carries out business activities that connect closely to products transportation current from the manufactures to consumers based on Internet information technology application

According to Ghosh Shikhar and Toby Bloomburg’s concept of the Internet marketing we realized the Internet marketing’s environment and media are more limited than E-marketing Internet marketing only involves Marketing activities that are conducted on Internet However, great development of information technology has made the digital media such as mobile phone connect to Internet Therefore the line between E-marketing and Internet marketing is so light that they can become one

Beside, we come to the definition of E – Commerce E – Commerce are all activities of buying or selling of goods & services through electronic means

E-commerce can be divided into:

• E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"

• The gathering and use of demographic data through Web contacts

• Electronic Data Interchange (EDI), the business-to-business exchange

of data

• E-mail and fax and their use as media for reaching prospects and

established customers (for example, with newsletters)

• Business-to-business buying and selling

• The security of business transactions

Naturally, E-marketing and Internet marketing are not different from traditional marketing They are the activity of exchanging information, determining demand and making 4Ps plans for products, creating, conducting and examining to get the aims of organizations and individuals

1.1.4 Some of the different characteristics between E-marketing, Internet marketing and traditional marketing

Due to the large difference in method of conducting the Electronic Marketing and Internet Marketing we can easily see the comparison with the traditional marketing of speed, operation time, scope of activities, products

Speed: Service produce information that comes to the market more

quickly so the customers can access them easily

Transaction was conducted quickly and with some special commodities such as digital goods, delivery and payment is made almost immediately.Transaction speed is higher so feedback from customer is more quickly

Activity time is continuous and uninterrupted: Conducting

marketing on Internet can get rid of some disadvantages about labor However, the normal marketing programs that have not used the internet cannot develop to a high frequency 24/24 However it is great for the Internet Marketing activities Internet marketing can operate continuously, anytime, anywhere, 24 hours a day, 7 days a week There is no limited-time Products

or services orders can be satisfied everywhere, at any time Therefore, Internet

marketing is much more beneficial than traditional marketing because it can make good use of time and take advantage of business opportunities

Space: Global scale is not dependent on space: Internet marketing can

penetrate everywhere Through Internet, Vietnamese enterprises can advertise their products to American, Japanese, Australian customers, EU, …at highest speed and the least amount of time

Internet marketing overcomes all of the geographic challenges It allows enterprises to take advantages of global markets These Internet marketing’s characteristics include some challenges to enterprises When the distance between the geographical market area has become increasingly faint, the evaluation of environmental factors and competition becomes more complicated and difficult Competitive environment is severed in every nation and will become more severed in the international scale Therefore enterprises must have the lucid decisions and Marketing plans

Product variation: Introducing products and services in virtual stores

is nearly perfect Customers can do shopping at home with their computer connected with internet as doing in real stores Computer virtual stores, art virtual galleries, online stores… are becoming more interesting and lively We can list many websites of the successful virtual stores Some of them are www.amazon.com(a bookstore that sells every book for every customer in the world) It is now trying to become the biggest on – the - web retailer Another

is www Dell.com which supplies technology solutions satisfying customers demands

Decreasing the cultural, law, economic difference: Because of the

Electronic trade and electronic signature and the electronic transaction law, there are less differences in business law in electronic environment Moreover, Internet environment is global; the customer’s cultural differences are reduced

Removing the difficulties in intermediary transactions and in traditional marketing, commodities come from many intermediary distributors to the consumers The difficulties in this way are enterprises which have no direct relationships with the consumers, so the feedback is not exact and full Therefore, enterprises’ reactions to market’s changing are not timely In addition, they must share profits with intermediary… However, Internet marketing and E-marketing can remove this shortcomings Enterprise and customer can transact directly, quickly and easily through websites, email and forum

1.2 ACTIVITIES OF INTERNET MARKETING

1.2.1 The Internet produce

Online product policy is not very different from traditional marketing about the contents and concepts Development of the online products is to provide values for services and commodities produce on internet basement Thus, the most important content is creating satisfactory value for online customers The analyzing process about Internet marketing application shows that customers will be satisfied of the benefits that are provided by companies

on Internet such as: online purchasing that can supply visible commodities but

it doesn’t need sales places Another is searching engine like Google or Yahoo! However, similar to traditional marketing, when we research products as one of marketing-mix system, we need consider these things: About product’s characteristics: it’s one of the most important contents because the characteristics will decide the core value of the product as well as supplement service on market It’s not the same as visible produce Online produces care for invisible benefits that consumers care like: information instance, information security and convenience They are the core values that each online products or services targets For example, Yahoo! searching

engine supplies users website list that relates to cared contents So the appearance of websites satisfied invisible customers value such as the fast and exact of information which are economical The selection of the core value in the process of deciding online product is the basement for designing and creating product contents, services of the aimed customers

About trademark: in the decision of the online produce trademark there are fully identifying parts as traditional marketing such as: logo, name, icon, etc…However, the most important thing in the decision of the online produce trademark is using identical name on Internet with the visible product system

or independent domain Domain is understood as the website’s address It’s the only characteristic to distinguish in the process of searching and differing trademark from others Usually, domain has 4 parts:

• http:// format data search

• www showing the exploitation sources

• Domain name: showing company’s name on Internet such as Yahoo! or Dantri

• Com, com.vn, org, gov are structure part of the domain that show the domain’s origination or its type For example: ‘com.vn’ means Vietnamese web ‘Com.uk’ is a web originating in UK ‘Gov’ shows governmental web

‘org’ shows nongovernmental

Making a domain name must follow some certain rules that are similar

to trademark to make it memorable and convenient for searching A full domain includes: http://www.dell.com.vn It means the Dell company’s website in Vietnam Dell is a multinational company so it has different websites such as http://www.dell.com.sg in Singapore

About support services: the process of supporting customers is conducted together with process of supplying services and promoting after

sales The development of support services creates more value for customers when they search online products For example: support service system for customers of the www.amazon.com are very interested and cares in the information of their customers Most information about customers, the number of Web surfing and content information generally find their servers are maintained and continue to update for customers on the next search The development support service for customer is considered as one of the important basement for the process of developing strategies that are different from the others companies supplying products online same areas

1.2.2 The channel of Internet direct distribution

The development of online distribution is affected much by information technology Members of online distributors are divided in visible distributor’s channel: manufactures intermediaries and buyers However, the length, the activities and the role of each member of the channel are different Commonly there are four channel models in online business:

Firstly, Content Sponsorship: Applied to the enterprises that trade in

information services and advertisement such as Google, Yahoo!, MSN… Electronic newspaper is the same These channels are short and direct to the customers

Secondly, Direct Selling: Applied to online market for the customers

organizing B2B (business to business) and arising on individual online market B2C (business to customer) Customers order, pay and transact online through

a website or port transaction These channels are applied to the enterprises that trade in software, digital music or other visible services which don’t require deliver and inventory level… They short channel model concluding two members in the channel

Thirdly, Infomediary: is popular in researching online market and

information sponsorship area Through intermediate information, customers

are organized Enterprises want to get know more about objective group will order intermediary to searching information with some criteria The results of process of exchanging information are information from online researching

To the big-sized businesses with independent information unit they can carry out models with interior resources to get the information exactly and fully in a specific research It’s evaluated as one of the most important Internet marketing’s contribution to development of marketing system

Fourthly, Intermediaries: It is shown as commodity transaction port,

auction service (E-bay) or manufacturer’s representative… It is often applied

to tourism, hotel, and flight ticket sales In addition Online Retailing is growing quickly with two types of goods which are visible commodities and digital services Usually company’s website uses this model to change consuming habits and develop a new distribution system However, this model in Vietnam is facing up with many difficulties such as: law systems are not completed; technical infrastructure doesn’t ensure digital transactions (online payment, digital signature, large amount of data download.)

Selection of online distribution depends greatly on enterprises characteristics, commodity and service characteristics as well as enterprise’s market orientation Therefore, making decision on online distribution should

be considered when enterprise decides on its products that have the best distribution

1.2.3 Price and control of price by Internet

Price in traditional marketing is the only system that makes profits in cash and is often determined by manufacturers However price in E-marketing and Internet marketing is price transparency It means both of buyers and sellers can refer to other competitive prices that are advertised online to make

a suitable compromise According to this viewpoint decision on strategies of online price is developed in this way:

First Fixed Pricing: Fixing or Securing price of service produce in

traditional marketing that often concentrates in some products which have more competitive price because of reduction of transport expense, payment…on internet This pricing strategy required the buyer and the seller must comply with the rates that are set out, no discount applies in any way

Second Flexible Pricing: This price strategy is available to many

different customers with different price to get the highest effectiveness There are two popular price types in this strategy are Segmented Pricing and Negotiated Pricing They are applied commonly in online transaction because they are appropriate with price transparency and they show commodity characteristics as well as increase the customer’s decision when shopping online

1.2.4 Integrated Marketing Communication

Instead of using four tools to promote a mixture of traditional marketing, to be conducted in virtual environments, online communication systems only include online advertising, promotion and public relations (not including Personal Sales)

For online advertising: Decision on advertising in Internet marketing is

choosing effective advertising form on the Internet There are some popular forms: logo advertising, banner, Pop-up and Scroll-up The two formers are measured by pixel to determine position and effectiveness The remains are measured by time, date and month that are saved in the main interface

For online public relation (PR): It commonly concentrates on

creating events to attract customers to enterprise’s services Online PR includes three main contents: Conveying enterprise’s information on website, creating blog or web-blog to insert information as well as receive feedback about the services and business that create a virtual public to share

information Online PR activities must apply communication power and create effect for other online services

For direct marketing activities: they are considered as one of the

strongest system in marketing multimedia Some forms like Email and messages through SMS engine are popular In Vietnam together with development of increased services on mobile device many companies have applied successfully this system to advertising trademark, caring customers and introducing new products For example: sending happy birthday messages

to customers of FPT Nokia system, introducing promoting programs of Vinaphone

For online promotion: Instead of receiving direct coupon, customers

can receive online coupon at virtual stores on Internet or trial samples like game software The promotion variety is determined by supplied service characteristics as well as the creation more increasing value from promotion service added

1.2.5 Customer Relationship Management

Internet’s contribution to marketing activities has proved clearly through CRM in Internet marketing-mix The concept of relation marketing according to Judy Strauss “CRM is the activity of orienting, exchanging, supplying, servicing, maintaining, and reinforcing long-term relationship with customers, it includes a series of activities that develop customer data system, control of customer’s satisfaction with support of information technology” [16] Thus to exploit CRM effectively, manager need decide three main matters:

• Control activities of business team to up date information about real situation of customer system (new customer, old customer and loyal customer)

• Control enterprise’s marketing activities to determine present supplying service that can satisfy customer in that level so as to consider effectiveness and change properly when necessary

• Building up customer care system In Vietnam now CRM has just concentrated on this third content with many services such as giving gift, calling and replying complaints

Usually customer care system includes the following services:

Table 1.1: Customer care supplying channel

Ordinary

1 Direct respond to customer’s complaint center 92

10 Coming directly to customer services center 58

( Source: “ Sustaining Customer Care in a Rapid Changing Business World”,

Laurent Castro, Conference Board 2003, New York )

According to this statistics table, we can see customer care supplying channels on Internet have a rather high rate in the list (4/11 channels) Customer service through email is used up to 88%, only second to Customer complaint directly answer center (99%) Service support channel on enterprise’s website using comes up to 53% That shows the success in applying information technology to marketing which create opportunities for marketers to vary strategies, increase supplying value and satisfaction of the customers Because of the convenience affordable expense and easy access for every individual to enterprises CRM activities on internet and Internet marketing generally have been well evaluated

1.3 THE ROLE OF MARKETING VIA INTERNET

Information of people being born and dying can be saved by State information system through website Showing human life is connected closely

to Internet with modern technology However, level of accepting technology for each individual is different Therefore to evaluate Internet marketing roles

in business activities we must consider and recognize with individual and public viewpoint to this field

1.3.1 For the customer

Nowadays information is considered as one of the most important resources of our society, so each individual has the opportunity to get information more than ever In the course of their purchasing decisions customers are provided quality extremely diverse information from various sources in accordance with the characteristics of each group They have opportunity to evaluate, compare and get known more about products through Internet Furthermore, they can receive increasing value when they have not made up their mind to buy or not to in the enterprise’s promotion strategies, like giving free internet account, free download music and much more It is not just supplying information Internet application has decreased the transaction distance of B2C that gives opportunity to develop electronic trade

1.3.2 For the society

In a larger scale level of accepting Internet marketing is considered through Internet conveyance’s effectiveness Nowadays, these terms like forum, online diary- blog and search engine are not familiar to people Internet penetration has created virtual society with close connection Recently, Number of people using Internet is increasing quickly recently It means the increasing in small objective customer groups that has created a strong society leading to Internet marketing development

Table 1.2: The number and rate of people using Internet throughout the world

WORLD INTERNET USAGE AND POPULATION STATISTIC

World

Regions

Population (2009 Est.)

Internet Users Dec, 21 2000

Internet User

2009

Penetration (%

1.3.3 For business activities

Internet marketing has really creating a new business process in the digital world Administrators will undergo three-step process of management They are the analysis and assessment of the market (E - Environment), the process of selection strategies for implementation (S - Strategy) and the implementation process (P - Planning) However, all of them are carried out in

a digital environment Internet marketing roles are shown clearly in process of planning strategies of the enterprise Administrator can get information about macroscopic and microscopic environment and others that are related to business activities by Internet Thus, they can propose proper strategies with selection of marketing strategies that will have the best effect on internet basement Finally, they are making plans and evaluate the business activities effectiveness Even this last step can be done with the active support of Internet Marketing

Map 1.1: planning business strategies

(Sources: Judy Strauss, Adel-El-Anasery and Raymond Frost, Internet marketing, page 20)

As an indispensable part of business strategy internet marketing roles can quantify following these criteria:

Internet marketing tectonics new value: By applying Internet marketing, enterprises can create typical products in mass production, provide information 24/24, 7 days a week, strengthen sales managing system and make more new opportunities to develop distribution system

Internet marketing helps to decrease expense: Internet marketing is the result of determining effectiveness of expense It means saving cost in distribution activities, decreasing communication expense by available engines, researching, caring cost, creating effective distribution channel and increasing caring customer quality

Internet marketing increase profit: Process of online exchanging support varying service products and improving profits Moreover, with creating more increasing value, enterprises have opportunities to make a higher and more proper cost as well as building up customer information system It will help administrators have more opportunities to promote and change customer demand on expense structure

Decreasing space-time distance: With traditional marketing forms, enterprise must arrange itself and its staff in local nation where it operates Therefore with the medium amount of staff enterprise just can concentrate on some main markets as well as marketing activities that will be limited Through online marketing engines in global Internet environment enterprises can access potential customers easily all over the world without being limited

by areas One Company in Vietnam can sale on Internet, send advertisement messages by Internet to America and Euro in a short time Companies that do not computerize their work and just use staff to conduct business activities will be limited in time Their staff works in disciplined time and they will go home when the company closes So if customers want to buy service produce

overtime and the company will lose a large number of customers On the contrary, with automatic computerizing work companies can serve customers better without being limited to time They can take care of customers 24/24, 7 days a week, 365 days in a year

Quick feedback: Commonly, when customers have questions about company’s products the staff will receive this information and respond to it However, it takes too much time and sometimes is not effective Many enterprises must tackle the same questions for many people With web technology, they can post common questions on their website so the customers can look up the answers

Changing and adjusting easily: Changing a business process is not easy Enterprises must face a very slow system The changing creates many different arrangements especially when relating to human With online marketing solutions, they can apply information technology to adjust, change, something flexible websites and information technology application in business

Creating competitive benefits: Business and marketing activities are facing difficulties because there are so many products and similar services Enterprises that know how to combine traditional marketing and online marketing will have much more opportunities then their competitors Nowadays, the internet is considered as an important business environment especially in countries where Internet usage rate is high

Creating durable relationships with customers: Marketing activities always appreciate customers Company that can build up a lasting relationship with their loyal customers will have the advantages in business Because of automation, habits, individual characteristics and behaviors of the customers will be saved for further use Therefore, companies can quickly know what

the customers need and can satisfy them When the customers are cared for considerably they will be more loyal to company’s service produce

Through these reviews, evaluated on many different angles of the internet marketing, we can have an overview of Internet marketing and its roles in business activities in digital economy

1.4 THE INTERNET MARKETING ACTIVITIES IN OTHER COMPANIES IN THE WORLD

Internet is a wonderful engine that will bring a company’s trademark all over the world Some trademarks are accepted widely such as Yahoo! because

of Internet totally And others like Disney or Gateway have used Internet to strengthen their trademark For example, Ford and General Electric and others companies that are older and more experienced realize the importance of widen trademark everywhere by establishing sensible and luxurious webs Ford has an online showroom where customers can see all of the new automobiles models Their address also provides the history of the automobiles for the customers like the Thunderbird and the Mustang

Internet is used by publishing companies to advertise images and products Horticulture magazine and American Gardening Art supply a website allowing customers to make plans for their garden Moreover, it allows users to add addresses where they intend to create a garden to have information about suitable trees in the area wish to garden

Because of these webs, these magazine’s readers are increasing rapidly Another example is Amazon.com, which one of the best online bookstores on the web Its web managers know that buyers get marketing book information and often buy books on advertisement Hence, in the process of customers getting marketing books information books on advertisement are introduced This helps Amazon to sell not only marketing books but also advertisement books that are advertised

Or we can mention to another examples It is the website on tourism which is the most famous travel website in American: vacation.com In 1994 when online tourism services were building up in American families, Easy Sabers is in the top rank in providing online tourism services The second is International Expedition, Mountain Travel However there were not many websites that could have all information about tourism Vacation.com was born with a full data source of tourism information that have provided webs system with the most various collection of tourism and entertainment information It has a very high rate of users Vacation.com includes more than

20 addresses help customers with many of their, packaged tours and also information about more than 30 tourism companies Besides that, to advertise successfully, we have to mention to the golden relationship between Vacation and Yahoo! an Internet hero as well as Altavista and Excite Thanks to the establishment of search engines By 1998 there are more than 3 million people surfing web in a month more than 400.000 other people using services usually that make more 20 million USD and high profits from the special annual holiday of bookings customers every year

According to these above Internet marketing analyzes we can see that although Internet marketing concept is new, its roles in business marketing have been established In the era of the explosion of information technology and the Internet, businesses which do not know quickly how to take advantages of the benefits, indispensable to be left behind The Internet marketing application is essential for enterprises maintain their position and images on market Moreover, it can help them to develop a deep and wide way of conquering customers’ hearts, controlling the market

Chapter 2 SITUATION OF INTERNET MARKETING

IMPLICATION IN VIET NAM

2.1 CONDITIONS OF INTERNET MARKETING IMPLICATION IN VIETNAM

Applying Internet marketing is a new idea that appeared in Vietnam not too long ago There are some basic conditions to apply to this engine: they are about facilities, technical and marketing human resource, people and enterprises awareness

Internet marketing operates on internet basement so developing Internet

is essential The higher development of Internet environment, the more Internet users and the more effective Internet marketing activities are Online advertisement activities will have the opportunity to access a large number of users who use company’s services

Table 2.1 State of Development of Internet in Vietnam in 2007 - 2009

The Internet users rate in Vietnam is increasing considerable, 25.6%

until 9/2009 correspondingly with 21.9 millions [12] It is a praiseworthy

signal to those who have business or are nurtured on the business plan on the

Internet The number of service providers telecommunication network is also extended to the nine suppliers they include Telecom Corporation Hanoi (HPT), Viettel Telecom Corporation (Viettel), JSC Internet service (OCI), JSC postal services and telecommunications Saigon (SPT), Netnam - Hospital

IT (NETNAM), the Company Shares Investment Development Technology (FPT), Novotel Vietnam Post and Telecommunications (VNPT), telecommunications company electricity (EVN) and the company producing electricity import-export business - electronics district 10 (TIENNET) The appearance of the new telecommunications company instead of VNPT's monopoly is given customers more choices with more and more competitive price sand a better quality services that the introduction of the service access

of high-speed ADSL Internet access in Vietnam Internet users came from

183 in 2003 to 44,047,425 subscribers in 2009 ADSL appearance has contributed to creating important premises in facility structure for trade application on Internet in Vietnam

2.1.2 Human resource conditions

To apply Internet marketing, we need people who have knowledge of

technique and marketing applied on Internet basement

-Technique team: We must have a team that is knowledgeable about

information science to build up or to apply Internet to business activities

-Marketing team: Besides knowledge of traditional marketing Internet marketeers need know well about internet marketing engines because Internet marketing environment has characteristic that are different from traditional marketing

According to Investigation of Vietnam commercial and industrial office (VCCI) combined with International Data Group (IDG) that carried out in

2007 about “Situation of Information technology and communication application in enterprises” in the 5 big cities of Viet Nam Hanoi, Ho Chi

Minh City, Hai Phong, Da Nang and Can Tho, there are 70% of staff having information technology basic skills, Words and Excel in 72.8% enterprises In manufacturers this rate is under 30% They are staff who can use office computer programs The Internet users in these companies are much higher These figures are lower than in other countries in the world but compared to the past in Vietnam it is a very promising sign about improvement in staff’s ability to access the Internet

Nowadays compulsory information technology programs have been taught in schools from primary schools on up That helps people to be aware

of computer and Internet Therefore there will be a larger online market

Although Marketing concept came to Vietnam late in the early 1990s it can contribute to economic universities in Vietnam This helps ensuring a human resource that are not only good at Marketing but also are able to exploit and apply Internet advantages in future careers

2.1.3 Awareness conditions

To apply Internet marketing to business activities enterprises must be aware of information technology, marketing and Internet roles in business What is derived from the planning economy is a sense of innovation in the application of new management methods: using the Internet and Marketing firms Vietnam is still low especially in state-owned companies Before applying Internet marketing enterprises must be aware of electronic commerce as well as marketing especially in Internet marketing According to the newest investigation of Vietnam commercial and industrial office (01/2007) until 2006, there were 20-25% of enterprises having website Among them, There is 5-6% of Vietnam enterprises which really conduct electronic trade The remains had just applied electronic trade in a lower level Thus awareness of enterprises in Viet Nam e-commerce is not really that good yet This will cause some difficulties in marketing applications over the

Internet in business or marketing business using the Internet to access to other enterprises

In conclusion, there are conditions for internet marketing application in Vietnam but they are not completed Enterprises and organizations can totally apply Internet marketing to advertise their products However, the Internet users are not that much and Internet effect is limited so enterprise should consider Internet marketing as an additional activity to traditional marketing and should not applying only online marketing

2.2 INTERNET MARKETING ACTIVITIES IN VIET NAM

In recent years with the development of very high speed of development information technology and electronic commerce have penetrated in every aspect of social life especially economic activities Internet and electronic trade are familiar to many classes from residents and students to enterprises organizations and state-owned companies Therefore, concepts of marketing online, internet marketing are popular in Vietnam

2.2.1 Situation of Internet marketing application in Vietnam

Developing electronic commerce is an indispensable tendency of this period in global scale To create electronic trade, we must mention to the marketing especially Internet marketing because most of electronic trade is conducted on Internet and Internet marketing is one of the basic contents of electronic commerce Websites to introduce products, email, banner, poster, forums and blogs that they are recognizable engines of Marketing on Internet basement

2.2.1.1 Website establishment

The simplest form of Internet marketing is a website establishment to introduce products and services of the company This website can be independent or a part of the electronic commerce company