Creat marketing strategies jat industrial equipment and automobile accessories company in the period from 2012 to 2020

INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAMTHESIS TITLE CREATE MARKETING STRATEGIES JAT INDUSTRIAL EQUIPMENT AND AUTOMOBILE ACCESSORIES COMPANY IN THE PERIOD FROM 2

INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM

THESIS TITLE CREATE MARKETING STRATEGIES JAT INDUSTRIAL EQUIPMENT AND AUTOMOBILE ACCESSORIES COMPANY

IN THE PERIOD FROM 2012 TO 2020

Student name:

NGUYEN BUI HA

Intake I

11 - 2012

TABLE OF CONTENT:

INTRODUCTION 7

1 The necessity of theme research: 7

2 Purpose and applicability of thesis 7

3 Research method 8

4 Structure and composition of the thesis 8

CHAPTER I: RATIONALE FOUNDATION TO CONSTRUCTION AND DEVELOPMENT OF BUSINESS STRATEGY 9

I Concept, role and position of Strategic Marketing 9

1 Overview of the business development strategy 9

1.1 The concept of marketing strategy of the business 9

1.1.1 Concept of strategy 9

1.2 The role and position of the marketing strategy in a company 17

II Research and market segmentation in Marketing 18

2.1 Common market research 18

2.1.1 Market and the role of market 18

2.1.1 Theory of market research 18

2.1.2 The process of market research 19

2.1.3 Definition of customer satisfaction (Philip Kotler, 2003) 19

2.1.4 The relationship between customer satisfaction and service quality 20

2.1.5 The different levels of demands and mission of Marketing 21

III Marketing strategy development of a business 22

3.1 Position of marketing strategy planning in the strategic management process 22

3.2 Marketing strategic planning 24

3.2.1 Marketing plan making in business 26

3.2.2 Marketing strategic planning 26

3.2.3 Marketing strategy selection……….… 26

3,2.4 Marketing process management 26

CHAPTER II 30

ANALYZE THE BUSINESS PICTURE OF JAT INDUSTRIAL EQUIPMENT & AUTOMOBILE ACCESSORIES JOINT STOCK COMPANY 30

I GENERAL INTRODUCTION TO JAT INDUSTRIAL EQUIPMENT & AUTOMOBILE ACCESSORIES JOINT STOCK COMPANY 30

1 History of foundation and development 30

1.1 The process of foundation 30

1.2 Function & duty 31

1.3 Mission, vision, business philosophy 32

1.3.1 Mission 32

1.3.2 Vision 33

1.3.3 Business philosophy: 33

1.3.4 Organization: 33

2 Resource factors 35

2.1 Capital resource 35

2.2 Human resource 36

2.3 Technology 36

2.3.1 Machines & equipment 36

2.3.2 Production technology: 37

2.4 Economic relations 37

3 Business picture 38

3.1 Investment state 38

3.2 The objective and the general of the project: 38

3.3 The business picture 39

3.4 Business result: 42

3.5 Financial activities 43

3.5.1 Depreciate fixed assets: 43

3.5.2 Mean salary: 43

II ANALYSIS OF EXTERIOR FACTORS AFFECTING ENTERPRISE 43

1 Macroscopic environment 43

1.1 Economic environment 43

1.2 Political-legal environment 46

1.3 Cultural and social environment 47

1.4 Technological environment 47

1.5 Natural environment 48

2 Analysis on the industry premises 48

2.1 Analysis on the forces from potential competitors 48

2.2 Analysis on the forces from customers 49

2.3 Analysis on the forces from supplier 49

2.4 Forces from substitute products 50

2.5 Analysis on the forces from competitors in the same industry 51

3 Opportunities and challenges 51

3.1 Opportunities: 51

3.2 Challenges 53

4 Analysis of competition, matrix model CPM 54

5 Matrix model EFE 55

III Analysis of the companies’ internal situation 56

1 Analysis of resources 56

1.1 Labor resource 56

1.2 Analysis of marketing activities 56

1.3 Product strategy: 59

1.4 The price strategy: 59

1.5 The product distribution strategy: 60

1.6 The sales promotion strategy: 60

1.7 The customer relationship management strategy – The key element creating the success of the company: 60

1.8 The other marketing strategies: 61

1.8.1 The human strategy: 61

1.8.2 E-channel management policy: 61

1.8.3.The business intelligence strategy (can be used) 61

1.9 About the technology 61

1.10 Analysis of fiscal capability 61

1.11 Management Policy 63

1.12 Analysis of production activities 63

1.13 Analysis of Research and Development Activities 65

1.14 Analysis of Information Management Activities 65

2 Analysis of Support Activities 66

2.1 Analysis of management activities of the supplier 66

2.2 Analysis of management activities of workforce 66

2.3 General analysis of management activities 67

3 Analysis of assessment, identification and assessment of valued force and essential capacity 68

4 IFE matrix construction 69

IV SWOT ANALYSIS 70

CHAPTER III: CONCLUSIONS AND RECOMMENDATIONS 72

I BUSINESS DEVELOPMENT ORIENTATION FOR 2012-2020 72

1 Marketing plan objectives 72

1.1 Scale, market share 72

1.2 Specific objectives 72

II PROPOSAL FOR BUSINESS STRATEGY 74

1 TOWS Matrix 74

2 SPACE matrix 75

3 Proposed strategic options through QSPM matrix 78

3.1 QSPM for S-O Group 78

3.2 QSPM for S-T group 80

3.3 QSPM for W-O group 81

3.4 QSPM matrix for W-T group 82

III SUGGEST SOLUTIONS TO DEVELOP STRATEGIES FOR THE COMPANY 83

1 Human resource 83

2 Financial solution 85

3 Suggest marketing strategies for the company: 85

3.1 Design the marketing system 86

C SPECIFIC MARKETING-MIX POLICY 88

3.2 The reality of supporting organization for marketing strategy 91

3.2.1 Use information systems 91

3.3 Strategic Marketing plan 92

3.3.1 Advertising plan 92

3.4 Measures for promotion and other consumption support 93

3.5 Specifying marketing strategy 94

4 R&D solution 95

IV PROPOSAL FOR GOVERNMENT and enterprise 96

A For government 96

LIST OF REFERENCES 98

1 The necessity of theme research:

Creating business strategies is a permanent activity of a company It is said thatidentifying a right strategy will decide the success of that company’s objective andmission However, it mustn’t be that all Vietnamese companies have good strategies.Every failure of a company is an evidence of a poor strategy Therefore, creatingstrategies is always focused on by businesses and keeps its burning nature includingbusinesses with the good development strategies This becomes more important in theVietnam’s integration into the global economy Big chances are more, and thenchallenges are more To compete successfully, businesses should identify right ways andgood strategies so that they can identify their strong points, weak points, opportunitiesand their risks

In fact, many businesses do not pay much attention to development strategies,especially medium businesses and small size businesses Even these businesses do notidentify a strategy for their development because the main reason that they are not aware

of the role of strategies

Now, Vietnam is developing the branch of automobiles and motorcyclemanufacture but that the internal supporting industry is a fledgling one with the slowdevelopment speed is the biggest barrier which is holding the development of this branchback One of the reasons which make Vietnam’s supporting industry underdeveloped isthat businesses do not attach special importance to create business and manufacturestrategies methodically This thesis is very necessary to establish a model of company inthe field of manufacturing small but sophisticated accessories for motorbikes effectivelycontributing its part to the development of the automobile and motorcycle industry andsupporting industry in Vietnam

2 Purpose and applicability of thesis

 In theory:

This thesis includes knowledge of all subjects taught at IEMBA course and applied inthe practical manufacture at JAT Industrial Equipment & Automobile Accessories JointStock Company effectively

3 Research method

Main research method applied to research this thesis is descriptive and statisticalmethod and strategy planning matrix (Internal Factor Evaluation Matrix - IFE, ExternalFactor Evaluation Matrix – EFE, Competitive Profile Matrix, Opportunity, Threats,Strong, Weakness - SWOT, ) Theorical foundation of this method is mentioned inChapter 1 of this thesis

 Information collection:

Secondary information: will be collected from Vietnam Association of Car andMotorcycle including statistics data of Vietnam Honda Company, JAT IndustrialEquipment & Automobile Accessories Joint Stock Company and audited financialaccounting information

Primary information: Interview directly staffs: business department, productiondepartment, deliver questionnaires to customers and suppliers

Analyze data: apply statistic techniques to process, summarize, evaluate, compare,assess and produce results of all researched contents

4 Structure and composition of the thesis: this thesis consists of 3 as follows:

Introduction

Chapter I: Aargumentative basis for creating business strategies for businesses Chapter II: Analyze the business picture of JAT industrial equipment &

automobile accessories joint stock Company

Chapter III: Conclusion and suggestion

Conclusion

List of reference materials

Appendix

CHAPTER I: RATIONALE FOUNDATION TO CONSTRUCTION

AND DEVELOPMENT OF BUSINESS STRATEGY

I CONCEPT, ROLE AND POSITION OF STRATEGIC MARKETING

1 Overview of the business development strategy

1.1 The concept of marketing strategy of the business

1.1.1 Concept of strategy

At the moment there are many different definitions of strategy, the underlying cause

of this difference is due to the different systematic concepts for the organization ingeneral and the different approaches of the organization's strategy in particular

Ontologically, depending on the perspective of positivism or constructivism, theessence of strategy is determined by the law of nature or the significant impact of subject

In fact, strategy is usually defined towards practices in order to easily facilitate theprocess of practice within the organization

According to Johnson and Scholes, strategy is defined as follows:

“Strategy is the determination of direction and scope of an organization over thelong run, in which the organization must gain the advantage through a combination ofresources in a challenging environment, to meet the best market demands and satisfy theexpectations of the stakeholders of the organization”

According to Michael Porter (1996), "Strategy is the job to create a balance foractivities in a company The success of strategy is mainly based on carrying on the taskssuccessfully and combine them together the core of the strategy is to "choose whatnot to do"

With this approach, strategy is making a difference in competition, search and dowhat not to be done Basically, strategy is to build competitive advantages, which onlyexists in unique activities Strategy is constructing an only position and has a function toimpact a set of different activities

Known strategy is a plan for a task, mission, or a long-term orientation, that requireslonger time to make Usually it carries a big significance, such like military strategy is to

plan the direction for a campaign, or a business strategy is to plan its development in aperiod of 5 or 10 years

1.1.2 Concept of Marketing

There are many different concepts of Marketing, depending on the actual situationand the different perceptions people have that forms those differences The differencesare not only in the level of details but also in the content that it contains However it isadmitted that marketing is created in order to support efficiently commercial activities,sales and consumption of products Nowadays, with the help of modern science,management level and the industry, it gives birth to Business Marketing and ModernMarketing With this new point of view, marketing activities grow both in quality andquantity that explains more correctly the meaning that it carries We can define marketing

as follows:

“Marketing is the process of implementing activities to achieve the organization'sobjectives by anticipating the needs of customers or consumers to control the flow ofgoods and services to satisfy the needs from manufacturer to the customers orconsumers” (according to E.J McCarthy)

And in order to apply modern marketing to the commerce of economicorganizations, the definition of commercial marketing can be accepted:

“Commercial marketing is the process of organizing, managing and controllingactivities in order to create possibilities and achieve the most effective consumption of aproduct of an organization to best satisfy the demand of producers, traders andconsumers.”

Modern Marketing is no longer confined to commercial areas, it is no longeractivities to help sales or consume the available goods If traditionally, people conceptmarketing to be looking for the market to sell the existing products, which considersproduction on top, then followed by the market, in the modern view market is seen as themost important thing in determining reproduction of goods In the market, buyers(demand) are the determination in the business production process

Modern Marketing starts from the market It includes all activities such as marketresearch, forecasting the development of the market in the future to the product strategy,

sales and after-sales services for the product that the market requires so that the volume

of goods produced are to be fully consumed in the market

In summary, in the process of forming a marketing point of view so far, there are allbasic concepts for organizations to carry out marketing activities such as:

 Marketing as an activity

 Incorrect views about marketing

a Marketing is advertising and promote sales

Every day we get a lot of advertising in newspapers, television, flyers and a lot ofsolicitations from sellers in shops, markets and agencies coming to our workplace Not tomention other promotional activities like sales promotion, event sponsorships,exhibitions, fairs, customer conferences

All the above activities are within the scope of marketing However if we considermarketing to only those activities, or consider those activities to be the essence ofmarketing, it is incomplete The promotional activities are just part of consumptionprocess, and consumption process is just the tip of a marketing iceberg

b Marketing is product consumption

Product consumption is the activity that happens right after production in order totransfer ownership of the products or services to the buyers and collect the money

Consumption is only one of the 4 main activities of the business, while marketingappears in all 4 stages of the business process

 Social orientation of marketing

Marketing is a social activity of human being to satisfy demands through trading.According to the American Marketing Association: "Marketing is theimplementation of business line aimed at transportation of goods and services fromproducers to consumers or user."

According to Philip Kotler: "Marketing is a form of human activity in order tosatisfy their needs and wants through exchange."

 Administrative definition of marketing

Marketing is the administrative activities to product design, pricing, distribution,promotion and sale to customers in order to satisfy their goals and objectives of theorganization

 A general definition of Marketing:

Marketing is a social management process, in which the various individuals andgroups of people get what they need and want through creating, offering and exchangingproducts of value with each others

This definition of marketing leads us to the following core concepts: urgent needs,wants, needs, products, benefits, cost, customer satisfaction, exchange, trading, market,marketing and marketers

 Needs

Needs of human being are the sense of lacking something that they can feel.People’s needs are diverse and complex They include basic physiological needs such asfoods, clothes, keeping warm, security as well as social needs such as intimacy, trust,relationship and other personal needs of self-esteem and self-achievement Needs are thefundamental element of human nature, it is not defined by social or marketers

 Wants

Human’s wants are a particular type of desire, corresponding to the level ofknowledge and personality of an individual It desires to manifest into specific things thatcan satisfy personal wants in the way that socio-cultural life of a particular societyappears to be used to

When the society develops, needs of its members grow? People expose more to theobjects that raise curiosity, interest and desire The manufacturer always directs theiractivities toward stimulating the desire to purchase and try to establish the relationshipbetween adaptations of their products with the basic needs of the people

 Demands

Human’s needs are the desire to add more solvencies conditions The desiresbecome demands when they meet purchasing power Human is not limited by the desirebut the ability to satisfy the desire Many people want the same product, but only a few ofthem are able to satisfy their desire thanks to their ability to afford Therefore, inmarketing activities, businesses must measure not only how many people want theirproducts, but more importantly how many people are capable and willing to buy them

 Products

The basic needs, wants and desires give way to the presence of products Productsare anything that can be brought to the market, catch attention, be received, be consumed

or used to satisfy a need or want of a person

The concept of product and demand lead us to the concept of product satisfaction

We can express a certain product and a certain demand into circles and present thesatisfactory level of the product by the coverage of the desired circles

The more people the product can satisfy, the easier it can be accepted by theconsumers So it can come to a conclusion, the manufacturers need to identify the groups

of customers that they want to sell the products to, and should provide the products thatcan satisfy the demand of these groups as many as they can

 Benefit

Typically, each buyer has an income limit, a certain level of knowledge about theproduct and purchasing experience In such conditions, the buyer will have to decide tobuy the product, which produced it, how much quantity he needs to maximize an overallsatisfaction or the overall benefit as a consumer of that product

Overall benefit of the customer is an entire benefit that he expects in each particularproduct or service that can include core benefit of the product, benefit from augmentedservice of that product, quality and customer service of the manufacturer, reputation andimage of the business

 Cost

Total cost of the customer is an entire cost that the customer has to give up to ownthe product It includes time, effort and spirit to search and choose the product Thebuyers assess these costs along with the cost of money to get a full idea of the total cost.During the stage of purchasing-selling of the product, the above solution makes iteasy for the buyer to buy what they want and the seller can sell the product However inthe consumption process, the seller needs to know if the buyer is satisfied with what theyexpect from the product

 Customer Satisfaction

Customer satisfaction is the stage of perceiving of an individual through theconsumption of a product about the level of benefit that product actually bringscomparing to the expectation

So, to evaluate the satisfaction level of customers for a product, we compared theresults obtained from the product with his or her expectations 3 levels of satisfaction canexist: customer dissatisfaction if actual results are less than what they expected; customersatisfaction if results provide commensurate with customer expectations and customersare very satisfied if the results exceed expectations.

Customer expectations are usually formed from their previous shopping experience,the opinions of friends and colleagues, and the information or promise from suppliers andcompetitors Through marketing efforts, the seller can influence or even alter theexpectations of the buyer It should avoid two trends: one is, the seller manifests in thebuyer a too high expectations for its products while it does not deserve, so will disappointbuyers; the other one is, the seller makes buyers have lower expectations of the product,

it will satisfy the buyer, but will not attract many buyers In this case, a reasonablemarketing solution that successful businesses usually applied is the increasingexpectations of customers while ensuring product features match expectations

 Exchange and Transaction

Marketing activities take place when people decide to satisfy their desire throughthe exchange

 Exchange

Exchange is the act to collect desired goods from someone by sacrificing something

in return Exchange is one of the 4 ways that people can get what they want production, appropriation, begging and exchange Marketing was born from thisapproach in order to get the products Exchange is the core concept of marketing

(self-Exchange is a complex human activity, is the people own behavior, which neverhave been in the animal world According to Adam Smith, "People have a naturaltendency to exchange things, do transaction, and give away one thing in exchange foranother.”

 Transaction

If the two parties commit an exchange have negotiated and reached an agreement,then we say a transaction (business transactions) have occurred Transaction is the mainunit of exchange A business transaction is an exchange of values between the two

parties We can say A hand X to B in exchange for receiving Y C gives D an amount of

3 million Dong and receive a TV That is a business transaction made by cash

However, there are also business transactions do not require money as one of thecommercial value An exchanging transaction takes place when C gives D a TV andreceives a refrigerator in return Or the exchange transaction can include giving andreceiving services instead of products, like when engineer M repairs the motorbike forartist D and in return, D paints a portrait for M

A business transaction involves at least two valuable objects, the conditions of theagreement, an appropriate time, and a suitable place Usually there is a legal systeminvolved to support and enforce the parties to act according to bound agreements

Transaction differs from transfer In a transfer, A gives X to B but does not receiveanything significant When A gives B a present, a help or a charitable distribution, it iscalled a transfer, rather than a business transaction Marketing research object is limitedmainly in the concept of exchange and not transfer However, the transfer behavior canalso be understood through the views of exchange The transferor gives a product withthe hope to gain some of the benefits, such as sympathy, reduced feelings of guilt, or tosee a good behavior from the transferee

 Market

The concept of exchange inevitably leads to the concept of the market Market is aset of real or potential buyers for a product The size of the market depends on thenumber of individuals in demand and has the products being interested in and willing toexchange these products to have what they want

A market can be formed around a product, a service, or anything else of value Forexample, the labor market, including those who want to devote their work in exchangefor the amount of money or products Currency market appears to satisfy the needs of thepeople so that they can borrow, save and preserve money

 Marketing as a business perspective

 Perspective before marketing

a Production-oriented perspective

This point of view thinks that the secret of success in business is to produceproducts cheaper and distribute them widely.

b Product-oriented perspective

This is the perspective that the secret of success in business is to produce betterproducts than the competitors

c Sales oriented perspective

This is the perspective that the secret of success in business are sales skills andability to promote better than the competitors

 Marketing perspective

This perspective believes that the secret of success in business is to identify theright target customers and their needs, satisfy these needs more effectively thancompetitors

This perspective has 4 main foundations:

 Identify the right target customers

 Identify the right needs of the target customers

 Satisfy the needs of the target customers

 Achieve the satisfaction of target customers better than thecompetitors

 Social marketing perspective

This perspective thinks that the secret of success in business is to identify the righttarget customers and their needs, satisfy these needs more effectively than competitors, atthe same time not compromising the long-term interests of the customers and society

 The core concept of marketing

 Need

Need is a sense of lacking something that a person can sense

Example: needs of foods, sleep, study

Need is not created by the society or marketers, it exists as a component of human.The job of a marketer is to identify it and stimulate demand to develop the need

* Maslow’s hierarchy of needs

Conditions to carry out an exchange:

 There must be at least 2 parties

 Each party must have something of value for exchanging with the other party

 Each party must be able to execute a transaction and exchange goods or otherthings

 Each party must be willing to exchange

 The 2 parties must come to an agreement of conditions to exchange

1.2 The role and position of the marketing strategy in a company

1.2.1 The role of marketing

Marketing decides and coordinates business production activities of the businesswith the market It ensures that the business activities are market driven, know to make

market, needs and wants of customers a solid ground for all business decisions.Marketing nowadays plays a central role in translating customer information to newproducts, new services and then segment these products on the market.

1.2.2 The role and position of modern marketing in business

New products and services is the companies’ answer to changing customerpreferences and also the dynamics of the competition Customer needs change, and thecompanies have to stay innovative in order to satisfy and meet the needs of ourcustomers

So marketing plays a role to:

- Identify customer needs, establish and lead the process of innovation

- Collaborate other research and development process to accelerate theimplementation of new products, and it is the most important factor affecting thesuccess of a product

- Help businesses spot the new trends, quickly become lever, turn them intoopportunities, which aids for a strategic development and sustainable growth ofthe business

II RESEARCH AND MARKET SEGMENTATION IN MARKETING

1 Common market research

1.1 Market and the role of market

1.1.1 Theory of market research

a Concept

Market research is the process of collecting and processing data to provide marketinformation to support decision-making processes related to marketing activities Thepurpose of market research is to reduce the risk for marketing decisions by providingmarket information and updates based on reliable data and evidence

b The role of market research

Market research helps identify marketing opportunities, such as the unfulfilledneeds of customers It also helps detect threats, such as detecting declining market shareand customers no longer loyal to the brand Marketing manager will use informationprovided by market research process to make suitable decisions, for example develop

new products to meet customer demands or construct a communication channel in a moreeffective way Marketing managers sometimes want to test before making a decision;market research will help them do the test, such as survey consumers about a certainproduct.

1.1.2 The process of market research

Source: Business Edge

1.1.3 Definition of customer satisfaction (Philip Kotler, 2003)

"Satisfaction is the degree of the state of human feeling derived from thecomparison of the results obtained with the expectations of the product" (Kotler, 2003)

"Satisfaction is the reaction of consumers to the estimation of the difference betweenthe initial expectation and the feeling after using the product" (Tse and Wilton, 1988)

“Satisfaction is the response of consumers when expectations are meeting"(Oliver, 1997).Although there are many different definitions of customer satisfaction, we canunderstand that customer satisfaction is the satisfaction of the consumer in theconsumption of products or services for they meet their requirements, includingsatisfactory level to be above or under expectation

Implicit requirement (features): requirement that customers do not reveal but theytake it as default to be available in the product or service If the feature is not available,customers will be extremely dissatisfied, but if the feature is improved, customers willtake it as if it should be so, and the satisfaction is unchanged

Prerequisite requirement (linear): requirement that customers want to have and can

be satisfied The higher the quality level is the more satisfied customers will be

Undisclosed requirement (interest): requirement that customers have not yetexpected or thought of, and without it customers will not be miffed, however if it exists itwill make customers extremely pleased and it will encourage them to purchase theproduct or use the service

to be collected

Research and Design

Collect Data

Analyze Data and Interpretation

Presentation

of Result

1.1.4 The relationship between customer satisfaction and service quality

Figure 3.6 Factors that affect customer satisfaction

Source: Philip Kotler, 2003Three main factors of customer satisfaction are product, convenience and human.Service quality is a factor that has an impact on customer satisfaction This shows thatcustomer satisfaction has a broader meaning than service quality

a) The business market

According to neo-classical economics: The market is a meeting place betweensupply and demand

In a marketer’s point of view: When talking about market, it should mention aboutstakeholders (those who directly or indirectly are involved in making supply and demandmeet) It is important to understand and grasp the market demand

 The business market is a set of products, services or characters that businesses mustcompete and achieve success through their own activities

b) Market share

Market share of a certain product is the ratio of sales of that product in the marketcomparing to the total revenue of all products in the same category in the same market

For example:

 Market penetration rate

Existing customers: customers who are using products of a business

Potential customers: customers who are not yet using products of a business butthey can possibly use them in the future.

* Market penetration rate is the rate between existing customers and potentialcustomers

1.1.5 The different levels of demands and mission of Marketing

a) Negative Demand

Is the market demand that majority of customers do not like the product? Marketingmission is to find out the reason why customers do not like the product Based on thatthere should be a reconstruction of 4 elements of Marketing-mix to attract the customers

d) Declining demand

Is the demand that is reducing over time? Marketing mission is to identify clearlythe cause of the decline and propose policies, expansion strategy for the demand byfinding new target, or adjust the 4 elements of Marketing-mix

e) Non-stable demand over time.

Is the demand that changes through time (hours in a day, days in a week, weeks in amonth, and months in a year )? Non-stable demand makes organization sometimes insurplus supply, sometimes overloaded in works to be done Marketing mission is to find away to balance the demand through strategy to evaluate flexibly, strategy to promote andother incentive strategies

f) Demand in full

This is the situation when an organization is satisfied with the existing demand.Marketing mission is to maintain the level of existing demand to avoid declining demand

due to increasing competition as well as changing customer preferences Businesses need

to regularly measure customer satisfaction for timely adjustment of marketing-mix

g) Demand exceeding supply

This is the situation when an organization is unable to satisfy all market demands.Marketing mission is to use pricing and promotion strategies to temporarily orpermanently reduce demands in markets that have low profit, or demands that are noturgent The current demand of electricity in Vietnam is one of these types Thegovernment prices electricity progressively to restrict from being used excessively At thesame time the government increases public information and propaganda for the people’sknowledge of how to use electricity economically

h) Unhealthy demand

Marketing mission is to reduce demand by pricing and promotion strategies torestrict sources of supply (cigarette, liquor, games, drugs ) By looking at 8 levels ofdemands and marketing missions above we can see that Marketing has a role ofmanagement using different policies

III MARKETING STRATEGY DEVELOPMENT OF A BUSINESS

1 Position of marketing strategy planning in the strategic management process

Based on the agreed business strategy, business needs to build and choose the mostappropriate marketing strategy to orient the whole marketing activities

Marketing strategy to be built must include the followings:

 Marketing strategy target

 Marketing-mix format

 Competitive marketing strategy of the business

 Marketing budget and budget allocation for marketing activities

1.1 Marketing-mix implementation

Marketing mix is the set of controllable marketing methods that businesscoordinative uses to make necessary responses to the target market demands in order toachieve marketing target There are many different tools used in the marketing mix, butaccording to J Mc Carthy, they can be grouped into 4 elements called the 4Ps: products,

price, distribution (place) and promotion Businesses implementing marketing-mix bycombining the 4Ps to direct market demands to the business’s advantage.

Products: A combination of "items and services" that the business offers to the

target market including quality, features, style, brand, packaging and specifications(size),service, warranty,

Price: the amount of money that customers have to spend to get the product Price

must be commensurate with the perceived value in the offered item; otherwise customerswill search for another supplier’s products Price includes: regulations, discount, subsidy,payment time limit, credit conditions

Place: A set of different activities performed by the business in order to bring the

products to the target customers, such as identifying distribution channel, choosing theintermediaries, market coverage, sales allocation in different market area, inventory,transportation and storage

Promotion: All communicational activities to promote the value of the products and

convince target customers to purchase those products Promotion includes advertisings,direct sales, sales-off, public relations

Constructing the marketing-mix is related with 2 budgeting decisions Firstly,business must decide the total spending for marketing efforts (decisions on marketingcosts) Secondly, business must determine the total spending for marketing tools that areparts of marketing-mix (decisions on marketing-mix costs)

The order and structure of the marketing-mix are deployed depending on theidentified marketing strategy plan Marketing - mix can be implemented uniformly orvaries by the selected target market In addition, decisions about marketing-mix stronglyinfluenced the decisions of the business’ market positioning The structure of themarketing-mix, the support and alignment of the components in the marketing-mix must

be clear in order to avoid difficulties in the implementation process For example, a bigadvertising campaign must be backed by a massive distribution; otherwise customers willfind it difficult to response to the advertising campaign

It should be emphasized that the marketing-mix of a business at a certain time t for

a particular product is a combination of changes in product, price, place and promotion

(P1, P2, P3, and P4) It is just a choice in a multiple possibilities of combination amongthe variables mentioned above.

Content of each variable in the marketing-mix can be designed by the policies orprograms But often, marketing-mix is implemented by policies

Not all marketing-mix variables can be adjusted in a short time Usually businesscan change variables like price, scale of sales force or advertising costs in short-term.Developing new products or changing distribution channel requires a long-term plan.Hence in short term, businesses do not change marketing-mix plan that is decided, butadjust some variables

1.2 Organizing and supervising marketing activities

Constructing brand-new only stays as a draft form, it represents what should beconducted in the future, so business needs to turn those plans into reality byimplementing marketing-mix effectively The implementation of a marketing planincludes:

 Develop a specific action plan

 Organize marketing department in accordance with the business’ marketingactivities scale

 Develop a reward and decision-making system

 Develop a positive working atmosphere that encourages staffs to put effort inachieving the goals

 Develop human resources capable of implementing decided marketing programs.Business should also supervise and elaborate marketing activities to ensure that theimplementation is progressing according to the plan, as well as giving opportunity toadjustments if needed to achieve the objectives

2 Marketing strategic planning

2.1 Marketing strategic planning

Market-oriented marketing strategic planning: is a process of management todevelop and maintain adaptation between objectives, skills and resources of theorganization with market opportunities that are rapidly changing The goal of thisplanning is to make products and business unit achieve targeted profit and growth

Concepts and tools of strategic planning were founded in the ‘70s as a result ofshocks that impacted the US industry: energy crisis, double-digit inflation, economydownturn, victory of the Japanese in competition American companies could no longerrely on simple growing projects to plan for products, revenue and profit Nowadays,target objective of strategic planning is to help the company choose and organizebusiness units towards maintaining its power even when unexpected events misdirectseparate business units or company’s products.

Strategic planning requires activities in 3 main areas: Managing business units asone port-folio The second area includes evaluating the strength of each unit by looking atmarket growth rate, company positioning and market adaptation The third area is thestrategy To each business unit, the company must develop a separate plan to achievelong-term goals

Marketing plays a key role in the strategic planning process According to strategicplanning executives at General Electric: “Marketing manager plays a most important role

in strategic planning, they play a leadership role in deciding business mission, analyzingthe environment, competition and business events, develop objectives, goals andstrategies; determine the products, market, distribution channels, and other qualitativeplans to implement the business unit plan These roles lead to the development ofprograms and operational plan that fully connects with strategic plans

To understand marketing management, we must understand the strategic planning.And to understand the strategy, we must realize that: companies usually plan by 3 levels

of organization: corporate level, business unit level and operational level Corporate level

is in charge of constructing the overall strategy to orient activities for the wholeorganization; makes decisions to allocate resources to each unit and department Eachbusiness unit will develop its own strategy to make sure profit earning in the future.Business unit level is implemented by the coordination of different businessfunctions (marketing, production, R&D) , and so each business unit or product level(product line, brand) in a business unit will develop its own marketing plan to achieve thegoals in the target market

2.2 Marketing plan making in business

Marketing Plan operates at 2 levels Marketing strategic plan sets out the objectivesand marketing strategy based on the analysis of the opportunities and current marketconditions Strategic marketing plan sets out unique marketing plan including advertising,sales, pricing, distribution channels and services

Marketing Plan is the main tool to guide and coordinate marketing efforts.Nowadays, in organizations, marketing departments no longer make their own marketingplan Moreover, all plans are developed by different groups, in which members comefrom different important functional departments After that, these plans are implemented

at an appropriate corporate level The results are supervised, and adjustments are madeaccordingly

Marketing planning is responsible for drafting plans separately for each businesssector, each products of the business after going through strategic decisions for eachbrand production Marketing plan includes long-term plans (over 1 year) and plans thatspan over the years Long-term plan analyzes main factors that affect the market in theplanning stage, recommends targets for the period, basic strategies to gain market sharefor the products, estimate profit, revenue and cost This plan is reviewed and adjusted inaccordance with changes in the environment Year plan is a detail plan of the proposal inthe long run for the first year In the year plan it should present all current marketingsituation, threats and opportunities, targets for each product, marketing plan for the yearplan Marketing plan is the basis to collaborate all activities: production, marketing,financing

2.3 Marketing strategic planning

2.2.1 Marketing process management

a Value provision process to customers

The goal of any business is to provide value to customers to satisfy their needs, andearn profit for the business There are 2 perspective of providing value to the customers:

Table 13: Comparison of the 2 perspectives Sales perspective Marketing perspective

Method Produce first, then find a way to

- Buyer demand oriented

Tools Promote sales through business

effort

Comprehensive strategy,marketing-mix

Targets Boost profit by increasing

Step 1:

Choose the value In this step, it is necessary to conduct market segmentation, selectthe appropriate market, and positioning the product (which is making the difference tocompetitors’ products)

b Marketing process management

Marketing process includes 5 steps:

 Marketing opportunity analysis

 Segmentation and target market selection

 Design marketing strategy

 Marketing programs planning

 Implementation and evaluation of marketing efforts

c Analysis of market opportunities

The process of analyzing the market opportunity consists of two steps: Discoveringnew market and evaluate the market possibility

 Discovering new market:

Before entering a new market, a company must study the market carefully to detectthe possibility of business in accordance with their capabilities If the company alreadyhas a position in the market, they also look for new business opportunities to create a safezone, because the market is always changing Opportunity always exists in the market.The issue is whether the business is able to recognize it, and that opportunity matcheswith the business’ capabilities

 Evaluation of business’ capacity towards opportunities

In the market there are always different business opportunities The issue is whetherthose opportunities match the business’ capability to response, or the business is able toenter the market with an advantage comparing to its competitors In other words, thebusiness must consider its targets and potential

d Market segments Selecting target market

After analyzing market opportunities, companies must select the target market, i.e.what are the most attractive set of customers that the company can satisfy in the best way,satisfy them in all over the area, or just a selected group of them? Before choosing thetarget market, companies need to market segments, i.e dividing customers into differentgroups of needs, personality or behaviors Then the company must locate the product on aselected target market, which is to ensure that the expected product can penetrate themarket and match the demands By doing so the company can increase competitiveadvantage for the product

e Marketing plan construction

Every company must be oriented with clear objectives In order to do this, thecompany must set goals and how to achieve that goal Tools to implement are thestrategic plan and marketing plan

Each company may have a few areas of activity Each area consist differentproducts BCVT Corporation in Vietnam has 3 business sectors: Post services,telecommunication services, and telecommunication industry In each sector there aredifferent products and services However not all sectors in operation can have the samegood future Some will decline, some will lose, and some will grow rapidly The goal tostrategic planning is to identify clearly to focus on the business is doing well and reducethe area that is weak

CHAPTER II ANALYZE THE BUSINESS PICTURE OF JAT INDUSTRIAL EQUIPMENT &

AUTOMOBILE ACCESSORIES JOINT STOCK COMPANY

I GENERAL INTRODUCTION TO JAT INDUSTRIAL EQUIPMENT &

AUTOMOBILE ACCESSORIES JOINT STOCK COMPANY

1 History of foundation and development

1.1 The process of foundation

From the period 1998 – 2000, Japanese motorcycle assembly corporations asHonda, Yamaha, Suzuki and Taiwan (SYM) started investing in Vietnam At the sametime, a group of engineers working at joint stock companies in the field ofmanufacturing motorcycle accessories divided from their companies and established ashop specializing in manufacturing mechanical equipment, attachment, inspectionattachment to supply for satellite companies of these companies

In 2003, the mechanical shop extended its activities into the manufacture of somemotorcycle accessories (gear lever, rear selector, and rear crutch, brake lever) to supplyfor private mum and pop motorcycle assembly companies in Vietnam

In January 2008, JAT Industrial Equipment & Automobile Accessories Joint

Stock Company (JAT Company) is officially established from its forerunner – the

mechanical shop to wait in front for the inland trend of Japanese motorcyclecorporations such as Honda, Yamaha JAT Company specializes in the field ofmanufacturing assessors and parts for automobiles and motorcycles, processingindustrial equipment and other mechanical products From the beginning, JATdetermined that it should create the most advanced management model basing onintegrating in choosing management models of joint stock, companies of foreigninvested 100% capital sophisticated and effectively with the strategy: highly stablequality – delivery in time – the leading of trade route businesses on the lowest cost sothat it can exist and develop

1.2 Function & duty

Main manufacture and business function of the company is specified in itsbusiness registration certificate as follows:

CERTIFICATE OF BUSINESS REGISTRATION

JOINT STOCK COMPANY

No.: 0103022203

First registration: January 25th2008

Second registration: February 12th2009

1 COMPANY NAME: JAT INDUSTRIAL EQUIPMENT AND AUTOMOBILE

ACCESSORIES COMPANY

2 Transaction name: JAT INDUSTRIAL EQUIPMENT AND AUTOMOBILE

ACCESSORIES COMPANY

Shorted name: JAT., JSC

3 Address: Room 504, Building P8, Viet Hung Urban Area, Viet Hung Ward, Long Bien District, Hanoi City.

4 Business line:

1 Manufacture and sell mechanical products, industrial equipment;

2 Manufacture and sell rubber resin, plastic material, mechanical workingmachine, compact mechanical tools, soldering machines, cutting machines,lathe machines; process precise mechanical products and other mechanicalproducts, expendables to serve mechanical cutting industry;

3 Execute civil and industrial works, traffic works, irrigation structures,infrastructure structure, urban areas and industrial zones, communicationworks, transformer station lines up to 35KV;

4 Manufacture and business in accessories, spare parts and attachments forautomobiles, motorcycles and other equipment, machines formanufacturing and repairing automobiles;

5 Manufacture and sell electric equipment, electric civil equipment,electronic equipment;

6 Repair, install, make warranty, maintain machines and equipment provided

by the company;

1.3 Mission, vision, business philosophy

1.3.1 Mission

Mission of JAT Industrial Equipment & Automobile

Accessories Joint Stock Company is to provide products

and services in the supporting industry in excess of

customers’ expectation by improving continuously the

quality management system, delivery time and product

cost; it always assures mutual benefits between relating

parties; it also regards its staffs’ dream and youth aspiration is a power for thedevelopment

1.3.2 Vision

Build JAT Industrial Equipment & Automobile Accessories Joint Stock Company

into the leading company in the supporting industry in general and in the branch ofmanufacturing and supplying accessories for automobiles and motorcycles andindustrial equipment in particular in Vietnam and East Asia and the leading supplier ofthe supporting industry with low costs but good quality and timely delivery inVietnam

1.3.3 Business philosophy:

 Meet the satisfaction of all customers by improving continuously the quality of

goods, delivery time and product cost

 Orient suppliers to the general objective of the company

 Staffs are customers who are served at the best

 Always regard customers’ benefit is the most importance

 Assume the mutual benefits for the related parties

1.3.4 Organization:

Figure 2.1: Organization chart

Table 2.1: Function and duties of departments:

Board of Directors

General Director

Assistance/ ISO coordinator

Quality Managemet Department

Plan Departmet

Technical Production departmet

Production Section

Research &

Developmnt department

Marketing department

Business Administratin Department

Finance – accounting department: Make finance – investment plan; manage

costs, price, manage cash; supervise spending of the department according to approvedbudget; mobilize and balance capital sources; establish and supervise the implementation

of financial policies in the internal company; make accounting reports, tax reportsaccording to regulation of the law

Human resource department: Plan human resource strategies to meet the

development need of the company in stages; make suggestions, create and enforce humanresource management policies in the company; make and implement training plans todevelopment yearly human resources of the company

Law – administration department: Manage property of the company, keep close

relationships with the current law offices and local organizations to create the favorableconditions for the company to operate and development; give legal consultancies to thedirector in relevant cases

Quality management department: Quality department is one of the most

important which decides the existence and development of the company It functions tomake the quality management system in accordance with strict requirement of customers,supervise the implementation of processes and procedures to assure the quality ofproducts; maintain the regular validity of quality polities; create yearly quality objectivesand follow the quality objectives

Production plan management department: Manage daily/ monthly/ yearly

production plans in conformity with capacity of the factory in each stage including shortterm and long term to meet customer requirement at lowest production cost throughoptimize production plans, minimize inventories and keep the shortest product turnover

Technical department: Make processes and operations to prepare for all

production operations to optimize the activity capacity of machines and manpower; makesure that all machine and equipment are always in good state for production with thelowest cost through timely and full maintenance and availability of optimal attachment instock

Production section: Enforce approved production plan to assure KPI norms are

always met and excess the set standard

Research and development department: Research and develop new product to

satisfy potential needs; research and develop new technology to enhance the workingcapacity, dip the rate of non-conformity customers, lower product cost; cooperate withresearch and development of partners to deploy and produce new spare parts for newgenerations of automobile and motorcycle

Marketing department: Create marketing strategies for the company to contribute

to the business culture “Turn to customers”; create trade mark, make JAT become astrong and prestigious supplier of attachment; give the board of directors effectivecustomer relation strategies to keep the good relationships with customers and putcustomers’ trust and faith in the company

Business administration department: Make business strategies and plans and deploy

to run business activities of the company Business section consists of 3 groups:

 Purchasing group: Assure input material always meet the criteria: quality, quantity,

timely and reasonable price

 Sales group: Sign and deploy contracts and purchasing orders; remain the good

relationships with customers, deal with customer claims

 Import-export group: Make procedures for purchasing goods from foreign countries

and compose foreign contracts, carry out import – export procedures, make paymentthrough banks …

2 Resource factors

2.1 Capital resource

Now, chartered capital of JAT Industrial Equipment & Automobile Accessories Joint

Stock Company is 8 billion dong.

Table 2 1: Structure of chartered capital on December 31 st 2011

Foundation sources Value (Vietnam dongs) Rate

Table 2 2: Structure of employees in the company JAT (Unit: person)

By background standard 262 100%

Labors of university level and above 28 10.7%

Labor of college level 16 6.1%

Labor of intermediate level 64 24.4%

According to labor contract 262 100%

Indefinite labor contract 18 7%

Short-term labor contract (1-3 years) 173 66%

Casual contract (6 months) 71 27%

Reference:http://jat-autopart.com.vn[13]

2.3 Technology

2.3.1 Machines & equipment

From the establishment time, JAT Industrial Equipment & Automobile

Accessories Joint Stock Company incessantly invests advanced machines and

equipment to meet customer requirement at the best Until the 31stday of December

2011, total value of invested and depreciated machines as in Table 2.3 below:

Table 2 2: Summary of machine and equipment at JAT (million dong)

Reference: Financial report of JAT in 2011(14) 2.3.2 Production technology:

The company is equipped machines and equipment imported from Japan, Taiwanand integrated with machines specializing for technical designs or improvement of olddomestic machine to optimize investment and use the most effective equipment butsatisfy the quality and capacity indicator

Main equipment of the company includes:

 Molding line: include molding machines with 15 -150 ton

 Soldering line: include scolding equipment for Robot and MIG solderingmachines, SPOT soldering machines

 Mechanical processing line: include hydraulic power lathe, all-purposelathe, CNC lathe, single-purpose lathe, cutting machine, boring machine,broaching machine, taro, drilling machine…

 Heat molding line: include heating equipment, extrusion die system with thelocally cooling system

2.4 Economic relations

JAT Industrial Equipment & Automobile Accessories Joint Stock Company have the

close relationships with customers who are foreign invested motorcycle assemblycompanies and have the good relationships with foreign and domestic suppliers so they

make sure stable material supply sources These materials are types of single purposetechnical steel for automobile and motorcycle according to the international standards ofJapan (JIS).

3 Business picture

3.1 Investment state

Apart from a modern factory with an area of 2000m2, JAT Industrial Equipment &

Automobile Accessories Joint Stock Company invested a lot of land with an area of

14,980m2 in the period 2011-2012 at II Que Vo Industrial Park, the company is making aproject for establishing a factory with an area of 4500m2 to move all modern machinesand equipment from the factory at Que Vo Industrial Part I to the new one before the 1stday of October 2013

3.1.1 The objective and the general of the project:

Build the modern technology motor accessories factory with the capacity of3,000,000 sets of motorcycle spare parts per year

Investment content and scale: build the new shop and auxiliary constructions; buymore advanced machines and equipment of foreign countries to manufacture 3,000,000sets of motorcycle spare parts per year

Used land area: 14,980 m2, in which the main shop has an area of 4500m2, theoffice are has an area of 380m2 with 2 floors, a system of barriers, internal ways, gate,parking place, guard house and green tree place The auxiliary system includes an aircompressor house and sewage treatment area

3.1.2 Building plan:

Main production shop: armored concrete base, concrete floor, frames ofprefabricated steel building, building connection, soldering The shop is covered by abricked wall with the height of 3 m and color plated sheet iron roof with isolating coverattaching with light plastic sheets

Other construction works: column footing, floor beam frame of monolithic armoredconcrete elevation The works is covered by bricked walls and has color plated ironedroof with a noise and heat insulation cover The floor of the works is paved Ceramic400x400;

Internal ways and places are made with concrete The exhaust system is made withpre-cast concrete and bricked up.

3.1.3 Technological equipment:

Include 120 machines and equipment moved from the present shop;

New investment: Robot molding machine (03 machines), lathes CNC (05 lathes)

Total investment capital: 29.606.969.000 dong

In which:

 Building cost : 11.652.481.000 đ

 New investment cost : 2.212.173.000 đ

 Land hire cost : 12.601.176.000 đ

 Project management cost : 527.248.000 đ

 Building and investment cost : 318.319.000 đ

Project management mode: the investor directly invests and manages the project

Through the management board of project The director of the company is the projectmanager and submits the corporate bylaws and all activities of the board to the board ofdirectors for an approval

3.3 The business picture

JAT Industrial Equipment and Automobile Accessories Joint Stock Company is theyoung, so the director of the company understand that the board of directors firstlycreates an advanced management model basing on appropriate basis selected fromadvanced management models of foreign invested companies and creates a small,sophisticated and effective management model then all activities and ways to settle downthe activities are standardized to train relevant staffs so that they can deal with allactivities in the same way in order that JAT can exist and develop in a violentlycompetitive environment between thousands of the same model mechanical companies to

become a member of the limited list of automobile and motorcycle assembly companies

in Vietnam Therefore, the manufacture cost of the company is always at the lowest level

in comparison with competitors; the quality of products is always stable according tocustomer requirement and the delivery time is always met

However, in 2012 when the automobile and motor market is slow, the number ofpurchasing orders reduces considerably, so the company gets into lots of trouble in thebusiness The following table shows the real situation of the company: