Marketing strategy for ePage product, a online website building system of ACS company

MARKETING STRATEGY FOR EPAGE PRODUCT, A ONLINE WEBSITE BUILDING SYSTEM OF ACS COMPANY Major: Business Administration I Code: 60 34 05 | A-Lo/ FE MASTER OF BUSINESS ADMINISTRATION THES

MARKETING STRATEGY FOR EPAGE PRODUCT,

A ONLINE WEBSITE BUILDING SYSTEM

OF ACS COMPANY

Major: Business Administration I

Code: 60 34 05 | A-Lo/ FE

MASTER OF BUSINESS ADMINISTRATION THESIS

SUPERVISOR: Dr TA NGOC CAU

Hanoi 2010

MARKETING STRATEGY FOR EPAGE PRODUCT,

A ONLINE WEBSITE BUILDING SYSTEM

OF ACS COMPANY

Major: Business Administration I

Code: 60 34 05 | A-Lo/ FE

MASTER OF BUSINESS ADMINISTRATION THESIS

SUPERVISOR: Dr TA NGOC CAU

Hanoi 2010

TABLE OF CONTENTS

1.2 THE IMPORTANCE OF MARKETING STRATEGY

1.2.1 MARKETING STRATEGY’S ROLE IN CORPORATE STRATEGY

1.2.2 MARKETING STRATEGY'S ROLE IN SECTORIAL TATICS AND ACTIONS

1.3 STRATEGIC MARKETING PLANNING

1.3.1 Strategic Marketing Pl

1.3.2 STRATEGIC MARKETING PLANNING PROCESS

1.4 BEST PRACTICES OF STRATEGIC MARKETING PL

3.1.1 SETTING UP A MARKETING DEPARTMENT

3.1.2 CLOSE COORDINATION WITH OTHER DEPARTMENTS TO IMPLEMENT THE SELECTED

LIST OF ABBREVIATIONS

LIST OF FIGURES, GRAPHS AND TABLES

FIGURES

Figwe 1.7 SWOT analysis 20 Figure 1.8 TOWS matrix 22

Figure 2.1 ACS Organizational Chart 33 Figure 2.2 Market Segment Pyramid 39

Figure 2.5 SWOT matrix of ACS 59

TABLES

strategy

vi

APPENDIX

competencies between ACS’s page and main

competitors

INTRODUCTION

1 THE RATIONALE

ePage is a service of ACS Corporation that is established in May 2008 and is a software development and information technology distribution company After some months operating, ACS has gotten given results of business and human resources However, its growth is unstable, especially it is still small and hasn’t core product to strength its brand and create stable development ACS is confusing to find out suitable solution which can help company to exploit well opportunities and overcome challenges to continue develop stably

ACS has plan to launch an online website building services in the end of this year to avoid tough competition of current website market and give it a chance to be come a technology firm

Marketing strategy plays a key role in the company's strategic planning in several ways First, marketing provides a guiding philosophy - company strategy should revolve around serving the needs of important consumer groups Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm's potential to take advantage of them Finally, within individual business units, marketing designs strategies for reaching the unit's objectives

Before launching this product to the market ACS needs a marketing strategy and marketing plan to make sure of its success Being a senior manager of ACS Company, the author chosen and implemented researching, collecting information, analysis, and proposing some suitable marketing strategic choice for ACS to implement ePage

In fact, ACS is facing with hard competition of foreign and domestic competitors having strong performance, full experience In addition, a lot threats come from external environment such as high inflation rate, global finance crisis, the unclear requirement of customer about service quality, the substitute product with more functions, convenience in use, etc Weaknesses of the company also were showed,

in which especially is weakness about strategic management, finance and brand

However, ACS has a lot of strengths such as experience in website services, sales team, and active and ambitious leader’s management

The author has applied PEST and Five Forces model to analyze external environment, Value Chain model to analyze internal environment After comparing between current business strategies and business environment in new period, the author has indicated unsuitable issues which will become terrible problem for the company Base on SWOT model which match external - internal environment, the Author has proposed major marketing strategies for ACS It helps company improve competitive ability by the way to develop strengths, limit weaknesses, exploit well opportunities and overcome threats In business strategy level, the author has applied SWOT matrix and TOWS model to propose marketing strategies for ePage product of the company At the last part, the author has proposed some main solutions to implement strategies

This thesis is written with hope that it will be implemented by ACS Company and brings success to our company

2 OBJECTIVES AND AIMS

In order to solve the problem which was identified above, in this thesis, author focused on the following objectives:

1 To review theories on Strategy & Marketing Strategy

2 To apply theories on marketing strategy and selections into practice of ACS

3 To contribute some recommendations to theories on marketing strategic The study also targets at the following aims:

1 To study marketing strategy for a ePage product of ACS

2 To formulate marketing strategy for a ePage product of ACS

3 To Propose some solutions to implement marketing strategy for ePage to 2010

3 RESEARCH QUESTIONS

The research problems lead to a number of research questions:

1 Is it necessary for ACS to formulate Marketing Strategy for its ePage product?

2 What kind of Marketing Strategy does ACS need?

3 How to implement the chosen strategy successfully?

4 SCOPE OF WORK

ACS is doing business in IT services industry such as software development, data services, BPO services, graphic design, IT distribution, and outsourcing However, because of the time and author's limitation, thus this thesis focuses on the following time, place and work:

1 The research is conducted in Vietnam only

2 Formulation & selection of marketing strategy are for ePage of ACS only

5 DATA SOURCES AND PROCESSING

5.1 Collecting data:

5.1.1 Secondary Data:

Secondary data was collected mainly from the company’s reports, collected from newspaper, internet, magazine, etc Some information which includes figures of GDP, GDP growth, etc the author was collected from formal publication of Vietnam General Statistic Office and other magazines

5.1.2 Primary Data:

Questionnaires: the author has applied questionnaires to collect main external information which are customer's feedbacks it includes information about company's product, price, distribution, promotion and business policy, about comparing with competitors, and about requirements themselves also Because of time limitation, the author conducted interviewing 100 interviewees only which have representative The questionnaires is attached in appendix 1

4.2 Data analyzing methods:

The quantitative and qualitative methods were both used for analyzing data The author applied analyzing tools Excel, SPSS to process data

6 RESEARCH METHODOLOGY

1 Research method: Qualitative and quantitative/case study

2 Research design: One-short case study

3 Analysis method: Descriptive analysis

7 SIGNIFICANCE

The study aims to gain the following significance:

1 Theoretical aspect: contributing some recommendations to theories on marketing strategy

2 Practical aspect: applying theories on marketing strategy formulation & selection into practice of ACS’s ePage

Secondly, because of limitation of time and financial resource, the author couldn't enough implement interviewing with all interviewee who can provide necessary information for analyzing such as: customer, expert, competitor, etc ?

However, the author thinks that limitation showed above don't affect hard to finishing this thesis The most important thing is that it has solved all of its objectives With his responsibility, by heart himself, the author has written this thesis with hope that it will contribute importantly for company's development in new period

9 EXPECTED RESULTS

The study is expected to apply successfully theories in formulating and selecting an appropriate marketing strategy for ePage product of ACS

10 FOLLOW-UP POTENTIAL

The study is expected to be used as a component for further corporate strategy development of ACS in the future

11 STRUCTURE OF THE THESIS

Apart from the acknowledgment, abstract, list of abbreviation, list of tables and graphs, introduction, conclusion, references and appendix, the thesis is organized into 3 chapters

Chapter 1 introduces the theoretical foundation for the process of formulating a marketing strategy for an ePage of ACS

Chapter 2 discusses status of marketing strategic for ePage at ACS and analyzes external and internal environment of ACS and formulate the marketing strategy for ACS’s ePage product

Chapter 3 recommends some measures to conduct the selected marketing strategy successfully

CHAPTER 1 THEORETICAL FOUNDATION

1.1 STRATEGY AND MARKETING STRATEGY

1.1.1 STRATEGY

Strategy definition:

The concept of strategy has been borrowed from the military and adapted for use in business A review of what noted writers about business strategy have to say suggests that adopting the concept was easy because the adaptation required has been modest In business, as in the military, strategy bridges the gap between policy and tactics Together, strategy and tactics bridge the gap between ends and means This paper reviews various definitions of strategy for the purpose of clarifying the concept and placing it in context The author's aim is to make the concepts of policy, strategy, tactics, ends, and means more useful to marketing strategy that author will built for ACS’s ePage

In order to understand more about strategy we can see some strategy definitions of some economists in the world (1) Thompson & Strickland (2003) suggests, "An organization's strategy deal with how to make management's strategic vision for the company a reality It represents the game plan for moving the company in attractive business position and building a sustainable competitive advantage"; (2) Strategy According to Michael Porter in a 1996 Harvard Business Review article and in an earlier book, Porter argues that competitive strategy is "about being different." He adds,

"It means deliberately choosing a different set of activities to deliver a unique mix of value." In short, Porter argues that strategy is about competitive position, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors In his earlier book, Porter defines competitive strategy as "a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there." Thus, Porter seems to embrace strategy as both plan and position; (3), Strategy According to Kenneth Andrews Kenneth Andrews presents this lengthy definition of strategy in his book, The

Concept of Corporate Strategy: "Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends

to be, and the nature of the economic and non-economic contribution it intends to make

to its shareholders, employees, customers, and communities (Pp.18-19)."

What, then, is strategy? Is it a plan? Does it refer to how we will obtain the ends we seek? Is it a position taken? Just as military forces might take the high ground prior to engaging the enemy; might a business take the position of low-cost provider? Or does strategy refer to perspective, to the view one takes of matters, and to the purposes, directions, decisions and actions stemming from this view? Lastly, does strategy refer to

a pattern in our decisions and actions? For example, does repeatedly copying a competitor’s new product offerings signal a "me too" strategy? Just what is strategy? Strategy is all these it is perspective, position, plan, and pattern Strategy is the bridge between policy or high-order goals on the one hand and tactics or concrete actions on the other Strategy and tactics together straddle the gap between ends and means In short, strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides gemeral guidance for specific actions in pursuit of particular ends Strategy is at once the course we chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make Even when we are embarking on a voyage of discovery, with no: particular destination in mind, the voyage has a purpose, an outcome, an end to be kept in view

For example of strategy E-citizen of FPT: “FPT Corporation strategy from now until 20:15 with a name “E-citizen” can be briefed as follows:

FP'T strives to be a leading corporation in terms of infrastructure development and e- services provision for e-citizen community among which information technology and telecommunication continue their essential foundation role in the digital convergence trend to provide the most convenient products and services for e-citizens This is the most important direction in the development strategy of FPT Corporation

The strategy is based on the perception that Internet has made profound changes to the world and has become an opportunity for Vietnam on the integration path into the world Essential needs of human remain unchanged but the ways these needs are fulfilled will never be the same with the wide spread of internet; e-services will be key tools that support organizations compete effectively to bring about comforts and conveniences in daily life

FPT calls these organizations and consumers e-citizens and aims at creating added- values chains to fully satisfy needs of e-citizens

Vision statement:

Vision statement of organization is to answer the question "What do we want to become?” It is especially important for any managers to set up long term objectives and executives to achieve good performance A clear vision provides the foundation for set

up strategy and all organization's operations follow it

Developing a vision statement is first step in strategic planning Many vision statements are single sentences only It may also contain a slogan, diagram, or picture whatever grabs attention

Mission statement

A company's mission differs from visions in that it encompasses both the purpose of company as well as the basic of competition and competitive advantages Peter Drucker, who is often called the father of model management, says that asking the question "what

is our business" is synonymous with asking the question "what is our business"

A business mission is the foundation for priorities, strategies, plans, and work assignments It is the starting point for the design of managerial jobs and, above all, for the design of managerial structures

Strategic objectives

Strategic objectives are used to concretize the mission statement They show that how the organization can fulfill or move toward the mission and vision According to

Gregory G Dess from University of Texas at Dallas, for objectives to be meaningful, they need to satisfy several criteria They must be SMART:

+ Specific - S: This provided clear massages to what need to be accomplished + Measurable - M: There must be at least one indicator that measure progress against fulfilling the objective

+ Appropriate: It must be consistent with the vision and mission of organization

* Realistic: It must be achievable target given the organization's capabilities and opportunities in the environment In essence, it must be challenging but doable + Timely: There needs to be a time frame for finishing the objectives

1.1.2 MARKETING STRATEGY

Marketing, more than any other business function, deals with customers Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice Although we have a lot of marketing definition, perhaps the simplest definition

is this one: Marketing is the delivery of customer satisfaction at a profit The goal of marketing is to attract new customers by promising superior value, and to keep current customers by delivering satisfaction

A marketing strategy is a process that can allow an organization to concentrate its (always limited) resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage

Marketing strategy shows how strategies for target markets and positioning build upon the firm's differential advantages It should detail the market segments on which the company will focus These segments differ in their needs and wants, responses to marketing, and profitability The company should put its effort into those market segments it can best serve from a competitive point of view It should develop a marketing strategy for each targeted segment Target consumers are at the centre of the marketing strategy

The company identifies the total market, divides it into smaller segments, selects the most promising segments and focuses on serving them It designs a marketing mix

using mechanisms under its control: product, price, place and promotion The company engages in marketing analysis, planning, implementation and control to find the best marketing mix and to take action The company uses these activities to enable it to watch and adapt to the marketing environment

E-Marketing Strategy In general terms, an e-marketing strategy consists of the steps taken and procedures followed for marketing a brand through the web The center of attraction in any e-marketing strategy is the website of the company to which Internet users are to be attracted for increasing sales But firstly, the company's website needs to

be in a proper design, format, attractive, and one that will have a good impression on prospective buyers (Dr Stephen Rampur, eMarketing General Director of AMAZON, Inc)

Components of a Good Internet Marketing Strategy

- Search Engine Optimization

- Email Marketing Strategy

- Online Advertising

- Online Newsletters

- Media News Rooms

1.2 THE IMPORTANCE OF MARKETING STRATEGY

1.2.1 MARKETING STRATEGY’S ROLE IN CORPORATE STRATEGY There is much overlap between overall company strategy and marketing strategy Marketing looks at consumer needs and the company's ability to satisfy them; these factors guide the company mission and objectives Most company strategic planning deals with marketing variables - market share, market development, growth - and it is sometimes hard to separate strategic planning from marketing planning Some companies refer to their strategic planning as “strategic marketing planning” Marketing strategy plays a key role in the company's strategic planning in several ways First, marketing provides a guiding philosophy - company strategy should revolve around serving the needs of important consumer groups Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by

assessing the firm's potential to take advantage of them Finally, within individual business units, marketing designs strategies for reaching the unit's objectives Within each business unit, marketing management determines how to help achieve strategic objectives Some marketing managers will find that their objective is not to build sales Rather, it may be to hold existing sales with a smaller marketing budget, or even to reduce demand Thus marketing management must manage demand to the level decided upon by the strategic planning prepared at headquarters Marketing helps to assess each business unit's potential, set objectives for it and then achieve those objectives

A marketing strategy is most effective when it is an integral component of corporate strategy, defining how the organization will engage customers, prospects and competitors in the market arena for success It is partially derived from broader corporate strategies, corporate missions, and corporate goals They should flow from the firm's mission statement They are also influenced by a range of micro environmental factors

1.2.2 MARKETING STRATEGY’S ROLE IN SECTORIAL TATICS AND ACTIONS

A marketing strategy also serves as the foundation of a marketing plan A marketing plan contains a set of specific actions required to successfully implement a marketing strategy For example: "Use a low cost product to attract consumers” Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, higher-margin products and services that enhance the consumer's interaction with the low-cost product or service

A strategy consists of well thought out series of tactics While it is possible to write a tactical marketing plan without a sound, well-considered strategy, it is not recommended Without a sound marketing strategy, a marketing plan has no foundation Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives It is important that these objectives have measurable results

A good marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group Each group is expected to take that strategy goal and develop a set of tactics to achieve that goal This is why it is important to make each strategy goal measurable

1.3 STRATEGIC MARKETING PLANNING

1.3.1 Strategic Marketing Planning

Every CEO and marketing executive periodically faces urgent strategic marketing challenges that can affect the future of the company for many years Frequently these decisions are made without having an opportunity to study the situation and make the best possible decision

Making spur of the moment strategic decisions reduces the likelihood that these decisions are the best

A better approach is to perform an annual comprehensive review of markets and opportunities, then make long-term strategic decisions without the distractions of day- to-day marketing and sales activities Daily decisions then fit into the company's overall strategic marketing goals

It's important for a strategic marketing planning process to look at the company from the customer's point of view by asking questions that have a long time horizon, such as:

improve?

products?

attraction to products like ours?

1.3.2 Strategic vs Tactical Marketing Plans

What makes a strategic marketing plan different from a more tactical marketing communications plan? The key difference is the focus on meshing overall customer situations with your overall company direction

For business-to-business marketers, this means combining industry sector segmentation and product use with other factors related to purchase decisions These include the purchase criteria and decision motivations that affect large, enterprise size purchases For example, the trend toward increased use of outsourcing to both domestic and global vendors creates markets for those suppliers However, those vendors need to have a strategic marketing vision in order to see these new markets early enough to take advantage of the opportunity

For consumer marketers, this means using geographic and demographic segmentation,

as well as psychographic segmentation (i.e., values, attitudes, lifestyles), and product usage motivations

For example, the aging population bubble creates a general increase in demand for a wide range of products It also creates market niches that are large enough to make product development and marketing worthwhile

The same shifts can also reduce demand for other products These long term shifts in markets are frequently misinterpreted as short-term competitive pressures or fluctuations in the economy Instead of increasing advertising or sales efforts, it might

be better to abandon a declining market

Without a strategic marketing plan a company could waste resources or miss an opportunity

What's the cost of missing an opportunity? Of course, it's impossible to know at the time the opportunity is missed, but years later it will become clear when a competitor opens a new factory or enters a new market and their revenue grows faster than their competitors

In other words, the annual cost of a strategic marketing plan review is miniscule compared to the revenue, market share, and profitability it can generate

1.3.2 STRATEGIC MARKETING PLANNING PROCESS

The strategic marketing plan process typically has three stages:

- Strategic marketing analysis

- Strategic choice

- Strategy implementation

This is the thought and application that needs to be applied to all marketing planning The three Effective planning stages are all equally important to the marketing process The marketing plan is the end of the process

Strategic Marketing Planning takes time, but is well worth the effort the process can be split into four clearly defined areas, it is useful to think of the effective marketing process as a triangle The more time spent at the beginning on the foundations of the strategy, the analysis and planning stages, the stronger the top of the triangle, the communications and action that ensue

This can be further broken down into defined actions:

Vision, mission statements and strategic objectives

Figure 1.1 Basic strategic marketing planning model

The marketing plan is achieved at the end of the planning process and should be a short, working, summary document of all the environment analysis which precedes it The methodology for under taking this *backbone’ of analysis is examined later in this guide Target market

To succeed in today's competitive marketplace, companies must be customer centered - winning customers from competitors by delivering greater value However, before it can satisfy consumers, a company must first understand their needs and wants So, sound

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marketing requires a careful analysis of consumers Companies know that they cannot satisfy all consumers in a given market - at least, not all consumers in the same way There are too many kinds of consumer with too many kinds of need, and some companies are in a better position to serve certain segments of the market As a consequence, each company must divide the total market, choose the best segments and design strategies for profitably serving chosen segments better than its competitors do This process involves five steps: demand measurement and forecasting, market segmentation, market targeting, market positioning and competitive positioning External marketing environment

Companies aim to serve their customers, but they must do so in an environment with many other influences At the widest level is the macro environment of Political, Economic, Social, Demographic, Global and Technological influences that all organizations face

(1980) The forces in a company’s macro environment having the biggest impact on a company’s strategy, however, typically revolve around the company’s immediate indlustry and competitive environment An industry analysis can be performed using a

framework developed by Michael Porter (Porter’s Five Forces) This framework evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry

Figure 1.3 Porter’s five forces model - Source: Techniques for Analyzing Industries and Competitors by Michael E Porter Copyright © 1980 by the Free Press Inaernal environment

The goal of internal analysis is to assess the firm’s strengths and weaknesses relative to its competitors and important to its customers Firms have heterogeneous resources and capabilities By exploiting core competencies, firms can develop value-creating strategies superior to their competitors

Resources are inputs into a firm’s production process such as capital equipment, skill of individual employees, patents, finance, and talented managers By themselves, resources

do not create a strategic advantage for the firm Capabilities are capacity to deploy resources that have been purposely integrated to achieve a desired end state Just because the firm has a strong capacity for deploying resources does not mean it has a competitive advantage Knowledge, training and corporate culture possessed by employees may be one of the most significant sources of core competencies and competitive advantage Core Competencies means that when resources and capabilities serve as a source of competitive advantage for a firm over its rival If the firm has

adequate resources and capabilities in the appropriate activities then the firm has a core competency

Above-

(¡00010100 1-) Pewee

Core Competeneies C“apabilities

arn rete 1À)

Figure 1.4 Components of the Resource-Based View — Source: Peter Meso, Robert Smith, (2000) "A resource-based view of organizational knowledge management systems", Journal of Knowledge Management, Vol 4 Iss: 3, pp.224 - 234

Many suggest that firms should identify and concentrate on only 3 or 4 core competencies Identifying core competencies are a key to development of sound strategy We use the value chain (figure 1.5) to help identify core competencies

Figure 1.6 Competitive advantage analysis — Source: Dr Nguyen Ngoc Su, Ha Noi School of

Business, lesson for REMBA 4, 2007, a strategy management subject

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A firm’s value chain must be compared to competitors’ value chains to determine where competitive advantages exist and is a source of competitive advantage A resource or capability must allow a firm to perform an activity in a manner that is superior to competitor’s performances and to perform a value-creating activity that competitors cannot complete How does a firm turn a core competency into a competitive advantage and above-normal returns? Core competencies must meet all 4 of the conditions below

to allow a sustained competitive advantage: valuable, rare, costly to Imitate, non- substitutable (figure1.6)

A profile of the strength, weaknesses, opportunities, and threats is generated by means

of a SWOT analysis, in which 'T' stands for threats, 'O' for opportunities, 'W' for weaknesses and 'S' for Strengths SWOT analysis is a tool for helping assess the current situation for the firm However, we need to be able to combine the information in the SWOT analysis in a meaningful way to generate alternative strategies that we might

After a company has decided which market segments to enter, it must decide what

‘position’ it wants to occupy in those segments A product's position is the place the product occupies in consumers' minds If a product were perceived to be exactly like another product on the market, consumers would have no reason to buy it

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Market positioning gives a product a clear, distinctive and desirable place in the minds

of target consumers compared with competing products Marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets

In positioning its product, the company first identifies possible competitive advantages upon which to build the position To gain competitive advantage, the company must offer greater value to chosen target segments, either by charging lower prices than competitors or by offering more benefits to justify higher prices However, if the company positions the product as offering greater value, it must deliver greater value Effective positioning begins with actually differentiating the company's marketing offer

so that it gives consumers more value than is offered by the competition

The company can position a product on only one important differentiating factor or on several However, positioning on too many factors can result in consumer confusion or disbelief Once the company has chosen a desired position, it must take steps to deliver and communicate that position to target consumers

Marketing Strategies for Competitive Advantage

To be successful, the company must do a better job than its competitors of satisfying target consumers Providing excellent value and customer service is a necessary but not sufficient means of succeeding in the marketplace Besides embracing the needs of consumers, marketing strategies must build an advantage over the competition The company must consider its size and industry position, and then decide how to position itself to gain the strongest possible competitive advantage The design of competitive marketing strategies begins with competitor analysis

The company constantly compares the value and customer satisfaction delivered by its products, prices, channels and promotion with those of its close competitors In this way

it can discern areas of potential advantage and disadvantage The company must formally or informally monitor the competitive environment to answer these and other important questions: Who are our competitors? What are their objectives and strategies? What are their strengths and weaknesses? How will they react to different competitive

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strategies we might use? Which competitive marketing strategy a company adopts depends on its industry position?

Given the information from the environmental scan, the firm should match its strengths

to the opportunities that it has identified, while addressing its weaknesses and external threats The TOWS matrix is a tool designed to match external opportunities and threats with our internal strengths and weaknesses

WT Strategies Defensive strategies to minimize weaknesses and

avoid threats

WO Strategies Use Opportunities to

Figure 1.8 TOWS matrix

Source: Fred David, Strategic Management (Upper Saddle River, NJ: Prentice-Hall, 2001), p 207

Developing the Marketing Mix

Onice the company has chosen its overall competitive marketing strategy, it is ready to begin planning the details of the marketing 7Ps The marketing 7Ps is one of the dominant ideas in modern marketing for service industry We define marketing 7Ps as the: set of controllable tactical marketing tools that the firm blends to produce the resiponse it wants in the target market

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Price - Pricing must be competitive and must entail profit The pricing strategy can comprise discounts, offers and the like

Place - It refers to the place where the customers can buy the product and how the product reaches out to that place This is done through different channels, like Internet, wholesalers and retailers

Promotion - It includes the various ways of communicating to the customers of what the company has to offer It is about communicating about the benefits of using a particular product or service rather than just talking about its features

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People - People refer to the customers, employees, management and everybody else involved in it It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands

Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things

Physical (evidence) - It refers to the experience of using a product or service When a service goes out to the customer, it is essential that you help him see what he is buying

or not

(The marketing and 7Ps, a brief summary of Marketing and how it works, The Chartered of Institute Marketing)

Strategy implementation and adjustment

The selected strategy is implemented by means of programs, budgets, and procedures Implementation involves organization of the firm’s resources and motivation of the staff

to achieve objectives The way in which the strategy is implemented can have a significant impact on whether it will be successful

Evaluation and Control

The implementation of the strategy must be monitored and adjustments made as needed 1.4 BEST PRACTICES OF STRATEGIC MARKETING PLANNING

AMAZON's Strategic Marketing and Planning

Amazon.com History

Jeff Bezos, Amazon.com founder and CEO, dreamed about books In 1994, he created Amazon.com, Inc., which he labeled as “Earth’s Biggest Bookstore.” The ecommerce company went online in 1995 and soon expanded into other media, including DVDs, VHS, CDs, MP3s, and eventually a wide range of other products, including toys, electronics, furniture and apparel As such, the tagline soon changed to “Earth’s Largest Selection.” But books were only the beginning of Bezo’s up-and-coming enterprise

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Amazon.com went public in 1997 In the first shareholder letter, Bezos penned the fundamental foundation for Amazon.com’s success: “Start with customers and work backwards Listen to customers, but don’t just listen to customers — also invent on their behalf Obsess over customers.” This policy was backed by a startling business philosophy — Bezos planned on operating at a loss for 4-5 years It was not until 2001 that Amazon.com posted a net profit at a minuscule one-cent per share Yet, despite its bizarre business strategy, Amazon.com claimed over 1.4 million customers after only two years of being online

Now, 45 million satisfied customers shop at Amazon.com for everything from books (most popular) to fashion apparel to fine jewelry to Christmas toys It has one of the most recognized brand names in the world and garners an estimated 50% of its sales from overseas consumers Surviving the dot-com bust of the late 1990s and early 2000s, Amazon weathered the e-storms and now thrives in the retail marketplace, challenging vending giants like Wal-Mart and Target Focused on technological innovation and centered on customer fulfillment, Amazon.com proceeds into the next decade with a profit firmly in one hand, and the capacity to blow it out of the water in the other hand Amazon.com’s Business Philosophy

Despite its massive growth, Amazon.com remains unremittingly focused on the consumer Out of 452 company goals in 2009, 360 directly affected customer experience Amazon.com’s self-proclaimed mission statement is: “We seek to be Earth’s most customer-centric company for three primary customer sets: consumer customers, seller customers and developer customers.” In a special for the Miami Herald, journalist Jack Hardy declares: “Customer obsession; innovation; bias for action; ownership; high hiring bar and frugality These six core values focus Amazon.com’s operational strategies.” It is committed to long-term growth based on consumer satisfaction

Myriads of Marketing Strategies

Amazon.com bases its marketing stratagem on six pillars

1, It freely proffers products and services

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2, It uses a customer-friendly interface

3, It scales easily from small to large

4, It exploits its affiliate’s products and resources

5, It uses existing communication systems

6, It utilizes universal behaviors and mentalities

Much of its marketing is subliminal or indirect — it does not run $1 million dollar ads during Super Bowls nor post flyers in mall marketplaces Amazon.com relies on wily online ploys, strong partner relations and a constant declaration of quality to market itself to the masses

Pay Per Click Advertising

Independent Pay Per Click (PPC) advertising has been the black sheep of Amazon.com°s marketing campaign Their first PPC campaign attempt, spawned by their subsidiary company A9, was the mediocre Clickriver, a middling PPC program that kept its head above water but certainly swam no great channels ProductAds replaced Clickriver in August, 2008 It allows any web merchant to purchase PPC ads

on Amazon.com’s website, leading some pundits to sardonically comment about Amazon.com’s possible pursuit of Google’s web browsing crown

Despite its potential interest in Google’s regime, Amazon.com continues to purchase PP'C advertisements on Google to direct browsing customers to their websites It buys space on the left side of Google’s search listing results, and pays a fee for each visitor to Amazon.com who clicks on their sponsored link This is typical of Amazon.com’s marketing strategy No big banners, loud colors, or pristine men casually conversing about Amazon.com on America’s tube — just a demure advertisement on a web page which, incidentally, may wordlessly lead thousands to Amazon.com

Continual Website Improvement

In today’s stop-and-go internet traffic, an engaging, simple and easy-to-use website is a necessity Amazon.com expends millions of dollars and hundreds of man-hours to identify problems, develop solutions, and further enhance the customer’s online

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experience Rob Enderle, head analyst at Enderle Group, states that “Amazon.com has always been very aggressive about analyzing its website’s traffic to a high degree and making modifications based on what they see.” This constant pursuit of perfection lead

to Jakob Nielson’s prestigious ranking of Amazon.com’s website usability In a 2001 study of 20 ecommerce sites, Amazon.com scored 65% higher than the average of the other nineteen sites’ usability It has a class-leading 99.9% mobile device availability, and uploads several seconds faster than some of its competition In one test, Amazon.com uploaded in 2.4 seconds, while Target took nearly seven to finish A navigable website has consistently topped the priority charts of Amazon.com Occasionally, management skirts customer relations and engages in under-the-table investigations Following several lawsuits from aggrieved loyal customers, who were charged several dollars more for the same item than newcomers, Amazon.com apologized for their underhanded differential pricing and discontinued the project However, Amazon.com continues to noiselessly experiment on their website, garnering new information and augmenting their already popular website

Offline Advertising

Martin McClanan, CEO of upscale gift cataloger Red Envelope, notes that TV and billboard ads are roughly 10 times less effective when compared to direct or online marketing when concerning customer acquisition costs Amazon.com has observed McClanan’s advice by reducing their offline marketing, especially during the holidays

In 1999, Amazon.com spent a gargantuan $80 million in offline advertisements during the fourth quarter A year later, during the same time span, the company splurged only fifty million Later years brought even more drastic cuts According to Competitive Media Reporting, Amazon.com frittered $36 million in offline advertising in 2008, but through August of 2009, the corporation had spent a meager $9.4 million However, such cuts have not negated Amazon.com’s successes It boasts the highest sells of any online retailer during the holidays, especially during Black Friday Amazon.com’s strategy is simple: since customers shop online, online is where they will be found Streamlined Ordering Process

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Easy ordering is Amazon.com’s Holy Grail It eagerly develops technology to allow customers to better navigate and explore their online retail mall Jacob Lepley, in his

“Amazon Marketing Strategy: Report One,” notes that, “When you visit amazon.com you can use [it] to find just about any item on the market at an extremely low price Amazon.com has made it very simple for customers to purchase items with a simple click of the mouse When you have everything you need, you make just one payment and your orders are processed.” This simple system is the same whether a customer purchases directly from amazon.com or from one of the Associates

Partnerships & Web Services

Amazon.com has shook hands and signed contracts with quite a few partners Not only does it operate many of its own websites, including A9 and CDNOW, but it hosts and manages retail web sites for an array of other retailers, including Target, Sears Canada, Bebe Stores, Timex Corporation and Marks & Spencer It previously hosted Borders bookstores websites, but that relationship ceased in 2008 For several years, Amazon.com partnered with ToysRUs Typing “ToysRUs toys” and similar query terms would also list Amazon.com’s Toys & Games tab and products As a result of litigation, however, this partnership ended in 2006

The simplicity that pervades Amazon.com’s customer checkout extends to its partner relations and services, of which there is no shortage Amazon.com hosts no less than twelve types of web services, including ecommerce, database, payment and billing, web traffic, and computing These web services — many of which are free — create a reliable, scalable, and inexpensive computing platform which can revolutionize a small business’s online presence For instance, Amazon.com’s ecommerce Fulfillment By Amazon (FBA) program allows merchants to direct inventory to Amazon’s fulfillment centers, and after products are purchased, Amazon.com will shoulder of the burden of packing and shipping the merchant’s product This frees the merchant from a complex ordering process while allowing them control over their inventory

Amazon.com’s Fulfillment Web Service (FWS) adds to FBA’s program FWS lets retailers embed FBA capabilities straight into their own sites, vastly enhancing their

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business capabilities With such services, why wouldn’t an independent merchant want

to partner with Amazon.com?

Affiliate Marketing

Keeping in line with their fourth marketing pillar, Amazon.com sponsors a wildly successful program called Affiliate Marketing Using Amazon Web Services (AWS) XML service, Associates (independent retailers) and third-party sellers agree to place links on their websites to Amazon.com or to specific Amazon.com products If the third-party Associates list their own products on Amazon.com, they may create links to those products as well Associates receive a fee for each visitor to Amazon.com that is directed through their links, and receive extra commissions if the visitor buys a product However, at the beginning of 2009, Amazon.com decided to terminate PPC referral commissions to its North American Associates for paid search traffic In an email sent

to all Associates, Amazon.com said, “After careful review of how we are investing our advertising resources, we have made the decision to no longer pay referral fees [that] send users through keyword bidding and paid search.” Time will tell how the North America Associates program reacts to this change, but with AWS, it is unlikely that Amazon.com will lose many of its Associates To offset this change, ion August 19,

2006, Amazon.com released aStore, which enables Associates to embed a subset of Amazon products within, or linked from, another site

How successful is this program? Nearly one million Associates have joined with Amazon.com, and approximately 40% of its sales result from its Affiliate Marketing program At the conclusion of 2007, Amazon.com reported over 1.3 million sellers through Amazon.com’s World Wide Web sites It continues to expand its Affiliate

jprogram

The Customer’s Opinions

Amazon.com does more than pay sycophantic lip service to its customers Each product

‘is available for consumer reviews, and customers may rate products on a hierarchical

‘scale of 1-5 stars Amazon.com members may also comment on other member’s ireviews Some bemoan Amazon.com’s consolidation of different versions of a product

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(e.g DVD, VHS, BlueRay of a video) into a single product available for commentary However, this simplifies commentary and use accessibility, a preeminent concern for Amazon.com

Email Marketing

For such a money-conscious company as Amazon.com, the lure of free and accessible e-mail is one delectable temptation that is too potent to resist Amazon.com engages in permission marketing, where customers give the company permission to send them e- mails detailing product promotions Seth Godin, Online Marketers, writes that “By talking to only volunteers, Permission Marketing guarantees that consumers pay more attention to the marketing message.” This strategy has acquired Amazon.com an obsequious following Melvin Ram, a satisfied Amazon.com customer, writes on webdesigncompany.net that “Looking at the e-mails I’ve received from Amazon over the last two years, I did not find a single e-mail that was irrelevant to me Every single one seemed like it was hand-picked for me based on my previous purchases.” Customer Service

Jeff Bezos would argue that customer service is not an addition to a corporate goal — it

is the corporate goal He calls Amazon.com, “The most consumer-centric company.” In

a lecture to Massachusetts Institute of Technology students, Bezos “Tells of technological advances that have not only enabled customers to find products, (and now

at 28 million items), enabled products to find customers [italics original].” Amazon.com focuses on the customer experience It wants customers to quickly access their hearts desire and obtain it without hassle It has spent billions enhancing and developing its website interface and customer relations

There are numerous methods that Amazon.com uses to assist the customer All customers may send e-mails to Amazon.com requesting clarification about purchasing

or other information Nor are all responses automated Amazon.com engages many employees simply to respond to customer issues by phone and e-mail

These are but the first few pages of Amazon.com’s extensive marketing manual By refusing to compromise with mediocrity, Amazon.com has revolutionized ecommerce

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Millions of customers, who are reading their books, donning their jewelry, or vacuuming their floor, are a living testament to Amazon.com’s success Are you one of them?

Attp://www.amazon.com/)

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CHAPTER 2 FORMULATION AND CHOICE OF APPROPRIATE MARKETING STRATEGIES FOR ACS’S EPAGE 2.1 BACKGROUND

2.1.1 GENERAL INTRODUCTION

International trading name: THE APPLICATIONS OF COMPUTER SCIENCE CORPORATION

Abbreviation: ACS Corp

Head Office: Building 272 Le Trong Tan Str., Thanh Xuan Dist., Hanoi, Vietnam The Applications of Computer Science (ACS) was established In April 2008 The Corporation is operating under the model of Joint Stock Company

Established in April 2008, ACS was a small company with total capital investment of USD 10,000 and 5 staffs After 2 operating years ACS has gotten some good results both revenue and workforces

The main business fields are software development and electronic security system The main products include: website design and development, Graphic Design, Data and content Services, Software Outsourcing, IT product Distribution, camera, access control, time attendance system and auto alarm system

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