Developing brand for the distributor in notebook business

MBMM5 Nguyen Thanh Binh DEVELOPING BRAND FOR THE DISTRIBUTOR IN NOTEBOOK BUSINESS MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor's name: Dr... The strategic plans

MBMM5

Nguyen Thanh Binh

DEVELOPING BRAND FOR THE DISTRIBUTOR

IN NOTEBOOK BUSINESS

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor's name: Dr Hoang Thi Phuong Thao

Ho Chi Minh City

(2011)

DECLARATION

“I hereby declare that this submission is my own work and that, to the best of my knowledge and belief, it contains no material previously published or written by another person (except where explicitly defined in the acknowledgements), nor material which to a substantial extent has been submitted for the award of any other degree or diploma of a university or other institution of higher learning.”

Ho Chi Minh City, February 13th, 2012

Signature of Student

Nguyen Thanh Binh

Master of Business and Marketing Management

ACKNOWNLEDGEMENT

I would like to convey my sincere gratitude to the following people Without their assistance the completion of this thesis would now have been possible

To Dr Hoang Thi Phuong Thao for her useful guidance and encouragement

To Ms Nguyen Thi Mong Thuy for her continual support during the implementation of my study

To Mr Thai Minh Trang for his assistance of the database retrieval report of PSD

To IT retailers in Ho Chi Minh City and Mekong Delta who took part in several surveys to provide input for customer insight information

TUTOR’S COMMENTS

I am writing to certify that this project meets the requirement for a business project

at the master’s level I hereby propose candidate Nguyen Thanh Binh to present his project to the board of jury

DR HOANG THI PHUONG THAO

TABLE OF CONTENTS

DECLARATION i

ACKNOWNLEDGEMENT ii

TUTOR’S COMMENTS iii

TABLE OF CONTENTS iv

ABBREVIATIONS vi

LIST OF FIGURES AND TABLE vii

EXECUTIVE SUMMARY 1

CHAPTER 1: INTRODUCTION 2

1.1 Background 2

1.2 Problem statement 2

1.2.1 Distribution model of IT business in Vietnam 3

1.2.2 Vendors policy 4

1.2.3 Product life cycle 4

1.3 Project objectives 5

1.4 Scope and Project methodology 5

1.4.1 Primary data 5

1.4.2 Secondary data 7

1.4.3 Data analysis 7

1.5 Project outline 7

CHAPTER 2: LITERAURE REVIEW 8

2.1 Brand Positioning 8

2.1.1 Brand definition 8

2.1.2 Brand positioning 8

2.1.3 Brand awareness and Brand identity 9

2.1.4 Role of distributor in IT business 10

2.1.5 Distributor brand 10

2.2 Marketing Mix – 7Ps model 11

CHAPTER 3: ENVIRONMENT ANALYSIS 13

3.1 External environment analysis 13

3.1.1 Marco-level market analysis 13

3.1.2 Industry analysis 14

3.1.2.1 Personal computer market analysis 14

3.1.2.2 Notebook market analysis 15

3.1.2.3 Major competitors/ participants 17

3.2 Internal analysis 20

3.2.1 PSD overview 20

3.2.2 Business customer and End consumer analysis 22

3.2.2.1 Business customer analysis 22

3.2.2.2 End Consumer analysis 25

3.3 Key finding from retailer requirement and consumer insight 28

3.4 SWOT analysis 29

CHAPTER 4: PROPOSAL MARKETING STRATEGY AND ACTIVITIES 32

4.1 Brand positioning 32

4.2 Marketing objectives 33

4.3 Marketing strategies 33

4.3.1 Retail segmentation 34

4.3.2 Product 35

4.3.3 Price 35

4.3.4 Place 36

4.3.5 Promotion 36

4.3.6 People 39

4.3.7 Process 39

4.3.8 Physical (evidence) 40

4.3.9 Re-design brand identity system 41

4.3 Budgeting 41

4.4 Evaluation 42

4.5 Project outcomes 43

4.6 Conclusion 43

REFERENCES 45

APENDIX 46

ABBREVIATIONS

FECIT Fair of Electronics Communication Information Technology

CMC, FPT, DGW Company Name

LIST OF FIGURES AND TABLES

List of Figures

Figure 3.1 Mobile Computing – Total market Vietnam 15

Figure 3.2 Mobile Computing – Brand share Vietnam 16

Figure 3.3 Mobile Computing – Region share Vietnam 16

Figure 3.4 Mobile Computing – Price class share Vietnam 17

Figure 3.5 Debt limitation for retailers 22

Figure 3.6 Allowed payment period 23

Figure 3.7 Notebook product range distributed by PSD 23

Figure 3.8 Retailer incentive program 24

Figure 3.9 Pricing protection 24

Figure 3.10 Delivery time 24

Figure 3.11 Respondent age 26

Figure 3.12 Professionalism of respondents 26

Figure 3.13 Internet connection 27

Figure 3.14 Requirement of Notebook usage model 27

Figure 3.15 Suitable price of a Notebook 28

List of Tables Table 1.1 Distribution system 3

Table 3.1 Competitors in summary 19

Table 3.2 PSD customer satisfaction in summary 25

Table 3.3 SWOT matrix 31

Table 4.1 Retail segmentation 34

Table 4.2 Notebook price strategy 36

Table 4.3 Partnership program 37

Table 4.4 Push sale program 39

Table 4.5 PSD expenditure for year 2012 42

EXECUTIVE SUMMARY

For the last 10 years, Viet Nam Information and Communication Technologies (ICT) sector has been developing rapidly, playing an increasingly important role in national economy, emerging as a spearhead economic sector as well as an infrastructure and a driving force for the socio-economic development of the country

Petrosetco Distribution Join Stock Company (PSD) was established in April

2007 as an official distributor for Nokia cell-phone in Vietnam PSD now is one of famous Vietnamese distributor, especially for Tele-communication & IT products Famous brands are co-operating with PSD includes Nokia (cell-phone), Dell, Acer (Notebook)

With the mission to make PSD become the top distributor in Vietnam particularly in the field of ICT, a marketing plan will be set up to guide a strategic direction for the company The specific activities will be focus on building PSD brand in the Notebook market with an annual growth rate of about 30 to 35%

In this project, through analyzing industry environment, internal situation and consumer behavior, PSD can identify opportunities and threats from the external environment as well as the strengths and weaknesses of company Then, marketing objectives and strategic plans for next year will be drawn out based on the exploration of common motivations, consumer behaviors, need of customer and the requirements of the partners in the selection of distribution for Notebook products The strategic plans will focus on 2 main activities is direct marketing activities and customer service (CRM), which helps build brand identity for PSD, to make the difference between PSD with competitors as well as build the loyalty of partner with PSD

CHAPTER 1

INTRODUCTION

1.1 Background

To be established in April 2007 as an official distributor for Nokia cell-phone

in Vietnam Becoming Acer distributor for Notebook products in July 2008, PSD officially entered to IT market Within 6 months later, PSD has been the distributor for many other famous IT products such as Dell, Hp, Lenovo and Gateway Currently, PSD is one of 10 Notebook distributors in Vietnam

PSD proudly has strong financial capability, professional staff with more than

200 employees, and a nation-wide distribution system which allows for maximum market coverage The company’s direction is to directly offer all customers best-in-class distribution service thanks to a comprehensive distribution set-up with 11 branches including Hanoi, Haiphong, Vinh, Danang, Quynhon, Gialai, Buonmethuoc, Nhatrang, Hochiminh city, Tiengiang and Cantho

Main customer of PSD is approximately 1,400 retail companies of telecommunications and IT equipment in nationwide, PSD enjoys current gross sales of VND 8.400 billion (US$ 400M) with an annual growth rate was 17% The Notebook business share 11% in the amount of VND 1,050 billion (US$ 51M) get 15.3% share of the market base on GFK retail and Technology research in 2011 PSD’ marketing objective is improving ties with retail systems to the level

of business partners not merely trader This goal play an important part

of expansion plans more products in the IT business, and it also increases the turnover of the company per a customer

1.2 Problem statement

Competition on pricing is a basic method of competition as well as the most efficient way in the distribution business To better understand the competition in

Information Technology (IT) business, we should understand the distribution model

as well as other factors such as vendor policy and product life cycle

1.2.1 Distribution model of IT business in Vietnam

In general, IT business has a complex distribution system than any other sector

in maker Consumers can select and purchase product through many channels like:

 Buying directly from the manufacturer via the internet With this way consumers also can build the product by themselves base on their demand and purposes

 Buying from retailers Usually retailers buy products from official distributor, and of course the price of big retailer must be lower than other retailers And when distributor has a sale incentive program for big retailer, they will do the resell for small retailer to easy to hit the target and get the money In addition, in the market there are some players, who only do the re-sell job (reseller) It helps to reduce financial risk as well as to serve small market with lower cost Almost reseller is based on tier 1 city like Hochiminh city and Hanoi

When do business with resellers, retailers will have some advantage such

as no pressure on sales volume but still enjoy low price, however retailers must pay in cash and the products are not diverse

Table 1.1 Distribution system

1.2.3 Product life cycle

Central Processing Unit (CPU) is considered the most important parts of the computer We can say the life cycle of computer products depends pretty much in place development of CPU

Current growth rate of the CPU is quite fast, Moore's law can be taken out as

an example and can be understood simply as follows: within 12 months, CPU speed will be double and that will make CPU price halved Its make Notebook model life cycle is quite short, averaging about 6 months New model of Notebook will be introduction in the first month, the growth state will be on the second month, from third to fifth months; it’s time to scaling to get market share as well as profit At the last month the model will be declined and vendor will re-fresh product by replacing new CPU of Notebook During this period, the price is decreasing over time

Once the model are distributed through distributors has reached levels almost impossible to distinguish nature and features plus the risks of distributor’s inventory The price competition is unavoidable between distributors as well as distributor with resellers

To avoid this competition, the brand is the only factor creating differences between distributors Brand speaks of trust and safety; it helps customers overcome any choice increasingly diverse capital when buying a product

There are several questions we need to answer: Who can be influencing to the distribution business of PSD? What do they need? Why was PSD not that other

distributor? How does PSD prove that? Though analyzing the opportunities and threats from the external environment as well as the strengths and weakness of PSD,

we will find out and know what should be done to develop strengths and stop the weakness

1.3 Project objectives

To analyze the current business situation as well as PSD brand status of PSD and find out what is the main factors can be influencing to the PSD brand

To develop marketing strategy for enhancing the PSD brand

1.4 Scope and Project methodology

This project was developed and mainly set for building brand for PSD Given the time and budget constraint, all secondary data are utilized for analysis For

primary data, the surveys are done with customer and consumer

1.4.1 Primary data

It’s establishes an understanding of intermediary and end-users such as their needs, desires, goals, beliefs, habits and cultural There are 2 surveys:

a Business Customer surveys

The customer satisfaction plays an important role on the existence of a company, especially of the distributor like PSD In this project, we do a quantitative research to explore retailer requirement as well as understand retailer insight The survey was conducted on retailers in Hochiminh city and Mekong delta, and was designed base on the current policies of distributor for retailers such as debt policy, products distribution, pricing policy and other matter

The survey is to send self administered questionnaire to 100 retailer owner The survey has supported by a team with 4 members (3 in Hochiminh city and 1 in

Mekong delta) of Intel Vietnam Co and Author as team leader for questionnaire and guidance for interview

Analyzing of data collected from the survey will help to understand retailer requirement, demands towards PSD as well as the current position of PSD at retailer side

b End Consumer surveys

In November 2011, at the Fair of Electronics Communication Information Technology (FECIT) is organized by Hochiminh Computer Associate and Intel Vietnam, the organizer has conducted a study of consumers for Notebook products The quantitative research was conducted by direct interview with respondent base on self administered questionnaire When visitors come to FECIT, they has asked to fill in the questionnaire and use it as a lucky drawn ticket Every hour, the organizer will do lucky drawn to find 10 winners for gift are 10 computer’s mouse There were 13,254 respondents in 4 day of the fair

Author is 1 of 3 members of Intel Vietnam in the organizing committee, responsible for the promotions and activities at the fair In this project, we ask permission to use some information in the survey measured to analyze and understand consumer insight, background and consumer expectation for the product

Analyzing of data collected from the survey will help to understanding consumer behavior and demand towards Notebook products From there PSD can build up a product development plan to expand their product range as well as expand their business

Analyzing the primary data from the survey report clearly helps to answer 2 above questions of PSD on building their brand 1) Who can be influencing to the distribution business of PSD? 2) What do they need?

1.4.2 Secondary data

This type of data has been collected from macro level and industry level reports, database of the social factors, economic factors, technological factors, etc… Analyzing the secondary data from macro level and industry level gives us a chance to evaluate some key market elements such as market trends and dynamics, identify the industry, category and segments Its helps PSD build their development plan as well as customer service program to support the development of customer

1.4.3 Data analysis

After all data has been collected, the researcher uses SPSS software to analyze these data The output will be collected, explained and presented in the next chapters

1.5 Project outline

Chapter 1: Introduction, project objective

Chapter 2: Literature review of some marketing concept and models brand

building

Chapter 3: Environment analysis is including market analysis combine with

consumer behavior, quantitative and qualitative research are summarized

Chapter 4: Proposal for marketing strategies with customer equity approach

including communication plan and marketing programs to build up brand of PSD

CHAPTER 2

LITERATURE REVIEW

The chapter addresses key concept and model used for analysis and recommendations It then provides theoretical background and arguments leading the marketing strategy and programs on building brand This chapter is consisted of three main sections They are (1) The content of service marketing – 7P (2) Brand positioning

2.1 Brand positioning

2.1.1 Brand definition

The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers." (http://www.marketingpower.com)

2.1.2 Brand positioning

According to the document of Branding subject, Brand positioning is a technique is which marketers try to create associations for a product, brand or company It is the place a brand occupies in a given market as perceived by the target market A brand’s position is how potential buyers see the brand

There are 3 key components to a superior competitive positioning: 1) a competitive frame of reference (FOR) in terms of the target market and nature of competition; 2) the points-of-difference (POD) in terms of strong, favorable, and unique brand associations; 3) the points-of-parity (POP) in terms of brand associations that negate any existing or potential points-of-difference by competitors (Kevin Lane Keller, 2009)

 FOR: defines which other brands a brand competes with and therefore

which brands should be the focus of analysis and study (Kevin Lane Keller, 2009)

 POD: are attributes or benefits customer strongly associate with a brand,

positively evaluate, and believe they could not find to the same extent with

a competitive brand There are three key criteria that determine whether or not a brand association can truly function as a point-of-difference: Desirable to consumer, Deliverable by the company and Differentiating from competitors (Kevin Lane Keller, 2009)

 POP: are associations designed to negate competitors’ points-of

difference If, in the eyes of consumers, a brand can “break even” in those areas where the competitors are trying to find an advantage and achieve advantages in other areas, the brand should be in a strong—and perhaps unbeatable—competitive position (Kevin Lane Keller, 2009)

2.1.3 Brand awareness and Brand identity

Brand awareness is a marketing concept that enables marketers to quantify levels and trends in consumer knowledge and awareness of a brand's existence At the aggregate (brand) level, it refers to the proportion of consumers who know of the brand (Farris, Paul W.; Neil T Bendle; Phillip E Pfeifer; David J Reibstein, 2010)

Brand awareness can be measured by showing a consumer the brand and asking whether or not they knew of it beforehand However, in common market research practices a variety of recognition and recall measures of brand awareness are employed (Laurent, Gilles, Jean-Noel Kapferer, and Francoise Roussel, 1995)

 Brand Recall is the extent to which a brand name is recalled as a member

of a brand, product or service class, as distinct from brand recognition (Laurent, Gilles, Jean-Noel Kapferer, and Francoise Roussel, 1995)

 Brand recognition is the extent to which a brand is recognized for stated brand attributes, parts, offerings, or communications (Laurent, Gilles, Jean-Noel Kapferer, and Francoise Roussel, 1995)

A brand’s identity is a combination of visual, auditory, and other sensory components that create recognition, aid in memory encoding and decoding, represent the brand promise, provide differentiation, create communications synergy, and are proprietary (http://www.brandingstrategyinsider.com)

2.1.4 Role of distributor in IT business

Distributor is a business of selling services to third parties who in turn sell them to their own end customers either directly or after further processing (Interim Group, 2011)

In IT business, Distributor can be stated as the resale (sale without transformation) of goods to retailers Distributor responsibilities include but are not limited to developing a decision-making framework for the design and operation of

a wholesaling system He also considers the new roles of wholesaling and proposes

an optimization model to satisfy best the service requirements at the minimum cost And by using this model, a prototype decision-support system is developed to build various scenarios and suitable models for these scenarios A number of management reports are prepared to help managers negotiate prices or volumes, consolidate warehouses, select transport modes, and test the effectiveness of proposed service

packages (Susy Lunardi, 2009)

2.1.5 Distributor brand

Distributor brand is understood as a result of the development process in both terms of business and branding aspects With its brand, distributor will extend product range become more diverse, better supplement for the deficiency in the existing of product distribution, and it also shows the commitment to customers

about business oriented and customer service (Do Ngoc My and Dang Van My, 2008)

Strategic brand development of distributor will change the relationship between vendors in the supply chain from production to consumers, while providing opportunities for distributor in developing and maintaining customer loyalty (Do Ngoc My and Dang Van My, 2008)

Developing distributor brand not only a means to increase profits, it also allows distributor to change the pressure and competitive positions with competitors, enhancing negotiation with vendors (Do Ngoc My and Dang Van My, 2008)

2.2 Marketing Mix – 7Ps model

Traditionally, these considerations were known as the 4Ps – Product, Price, Place and Promotion The concept of 4Ps has been used a long time for products industry, but great success of services industry as well as marketing became a more sophisticated discipline marketers have added more 3P into traditional marketing model, these considerations are now known as the 7Ps of marketing, sometimes referred to as the marketing mix (The Charter Institute of Marketing, 2009)

The 7Ps of the marketing mix can be discussed as:

 Product: must provide value to a customer but does not have to be

tangible at the same time (Medha Behera, 2008)

 Price: must be competitive and must entail profit The pricing strategy can

comprise discounts, offers and the like (Medha Behera, 2008)

 Place: refers to the place where the customers can buy the product and

how the product reaches out to that place (Medha Behera, 2008)

 Promotion: includes the various ways of communicating to the customers

of what the company has to offer (Medha Behera, 2008)

 People: refer to the customers, employees, management and everybody

else involved in it (Medha Behera, 2008)

 Process: 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 (Medha Behera, 2008)

 Physical (evidence): refers to the experience of using a product or service

(Medha Behera, 2008)

In summary, this project will base on the approach of brand positioning concept by the use of marketing mix (7Ps) to achieve the common goal of building brand for PSD In the case, finding out an advantage difference via brand positioning strategy for PSD is starting point, and then proposing marketing strategy

to win customer mindset

CHAPTER 3

ENVIRONMENT ANALYSIS

3.1 External environment analysis

3.1.1 Marco-level market analysis

Vietnam, a service-based economy with a population of 81 million has historically been an underappreciated player in the throws of Asian IT successes In the late 1986's Vietnam implemented the “Doi Moi” Policy and has since expanded its IT infrastructure exponentially in the hopes of leapfrogging the international technology gap In 1997, First e-commerce law is passed as Vietnam finally gets access to the Internet

Over the last ten years, more and more Vietnamese now use computer, email and the internet for work, study and even entertainment Computers and the internet has become effective and essential tool for communication, education, business and entertainment in Vietnam The household penetration of PCs and internet usage has risen considerably from 2000 to 2010 According to the Ministry of Information and Communication, the percentage of households with PCs in 2010 was 14.8%, thirteen times higher than in 2000

An estimated 2.0% of Vietnamese households have a broadband-enabled computer, representing a significant increase from the 0.1% of households in 2005 The rapid uptake is partly as a consequence of the ease and low price of connection According to the Ministry of Information and Communication, there were 26.8 million internet users in Vietnam in 2010, accounting for 30.8% for the total population For number of internet users, Vietnam has been ranked seventh highest among the countries with high internet use in Asia, by Internet World Stats

In-home technology use has increased significantly during the review period,

as Vietnam with higher incomes want to feel more comfortable with new

technology in their homes, for relaxation and enjoyment, and for access to information from around the world Thus the increasing use of computers, wi-fi routers and printers, among numerous other devices, has increased, especially in urban areas

All tolled, IT diffusion throughout Vietnam is on the right track especially

with the younger generation

3.1.2 Industry analysis

3.1.2.1 Personal computer market analysis

Nowadays, we live in an era of technology, along with the development of internet and computer; it has become effective and essential tool of consumer Consumers not only use the computer to work but also used in other activities such

as communication (email, chatting, social networking…), education and entertainment

Younger generation also favour high-tech products, with an increasing number using computers As this group always want the latest models and gadgets, these items are changed regularly, which has resulted in Vietnam becoming dynamic market for IT equipment in the last 5 years

According to GFK Retail and Technology research, there were 6.5 Million personal computers (PC) in Vietnam in 2011, accounting for 7.2% of the total population Market size of PC was 912,450 in sale units and about VND 10,247Billion (around US$ 488Million) in turn over in 2011, increasing 8% in comparison to 2010

Total market in 2011 is 912,450 units, in which the number of desktop (DT) is 345,963 units and Notebook is 566,487 units However, DT held 15% and vice versa growth rate of Notebook was 28% The reason why it again faster growth than

DT is Notebook has many advantages such as the gap of price is not too big, more flexible, mobility and especially Notebook can do almost what DT can

3.1.2.2 Notebook market analysis

According to GFK Retail and Technology research 2011 announced market size of Notebook in Vietnam was 566,487 in sale units about VND 6,760Billion (around US$ 322Million) in turn over in 2011, increasing 28% in comparison to

trend of advertisement and marketing though both traditional and digital media in last few years

With PSD, Dell and Acer are among their biggest vendors who contribute more than 90% for revenue in 2011 for Notebook business

Figure 3.2 Mobile Computing – Brand share Vietnam

Figure 3.3 Mobile Computing – Region share Vietnam

Source: GfK research 2011

In the segment of pricing, the Notebooks with prices range from 8Million to 16Million VND get 86.8% share of products sold

Figure 3.4 Mobile Computing – Price class share Vietnam

Source: GfK research 2011

Moreover, GFK expects that low costs Notebooks will continue to commodity and further become an essential product that consumers need Notebooks will continue to grow and comprise a stronger share of IT product mix as consumers continue to embrace Notebook as a tool, driven by lower-priced products

In summary, the number of users using Notebook increase rapidly in Vietnam, every year is more than 600K new units sold, the growth rate almost 25% a year Majority of consumers are located in tier 1 cities like Hanoi and Hochiminh city

They are referring lower-priced products with global brand

3.1.2.3 Major competitors/ participants

There are two major types of company which related to selling Notebooks to retailers They are as follows:

 Distributor companies: these companies do exactly the same business like PSD They imported Notebook from vendor like: Dell, HP, Acer, Lenovo,

Samsung… and sell to retailers and retailers will sell to consumers According to GFK report in Dec 2011, CMC led Notebook business in Vietnam with 89,910 units (share 18.5%), followed by FPT with 80,190 units (16.5%) while PSD and DigiWorld Corporation ranked the third and fourth with 74,350 units (15.3%) and 68,500 units (14.1%)

1 A member of CMC Corporation, CMC company was established in

1994 specialized in ICT distribution CMC has 2 offices in Hanoi and Hochiminh city CMC distributes famous brand like: Acer, HP, Lenovo and Toshiba CMC is very aggressive on pricing

2 FPT is one of the first Notebook distributor in Vietnam, start the business in 1988, FPT has achieved many success in the field of distribution, currently FPT is the official distributor of 5 famous brand such as Acer, Asus, HP, Samsung and Toshiba with 4 distribution center in nationwide FPT is the first distributor that vendors will think about when they want to enter Vietnam market because FPT has very strong reseller system so products to penetrate into market more quickly

3 DigiWorld Corporation (DGW) established in 1997, is a distributor of famous brand such as HP, Acer, Dell, Toshiba, Samsung, eMachines… DGW has 3 business centers in Hanoi, Hochiminh city and Danang Main customer of DGW is the top retailers in 3 cities that they have business centers, they maintain customers by a friendly relationship Even though PSD is a newest Notebook distributor in market, but PSD has the fastest growth rate with No 3 within 3 years However product range of PSD is not diversified, only focus on two major brands is Acer and Dell

 Re-seller companies: essentially, they are large retailers When distributors run a sale incentive or bonus program, they buy with a large

number to have better cost and re-sell to smaller retailers This is not only leads to price competition between the distributor with their retailers also effect the image of distributor with small retailers as well as the perform distributor’s functions such as market development, marketing information as well as implementing marketing programs to consumers The key focus of resellers is products with price range from 8Million to 12Million VND and in scaling statement Their main customers are small retailers is in rural area that distributor cannot research

PSD's main profit comes from selling products to retailers Therefore, PSD’s main competitors in the industry is not only other distributors such as CMC, FDC and DGW also resellers in the market

Years of

Positioning Low price

Strong channel with reseller

Friendship with top retailers

Wide distribution channel

Sales and

Marketing

activities

Run rebate promotion for retailer Ex: buy

20 units get

$400USD

Sell a lot stock in 1 order with low price for reseller

Sale team has close

relationship with top retailers though entertainment activities…

Setup 11 distribution center and target to all retailers even small retailer

Notebook

vendors is

distributed

Acer, HP, Lenovo and Toshiba

Acer, Asus,

HP, Samsung and Toshiba

Acer, Dell, HP, Toshiba and Samsung

Acer and Dell

Table 3.1 Competitors in summary

By realizing the strengths as well as discovering the gaps of satisfying retailer’s demands of our main competitors, PSD must find the way to fill up these gaps in order to gain competitive edge over these competitors in the future

3.2 Internal analysis

3.2.1 PSD overview

PSD was established in April 2007, as an official distributor for Nokia phone in Vietnam PSD officially entered to Notebook market by becoming Acer distributor in July 2008 Today, PSD is one of top 4 Notebook distributors with the main product of 2 famous brands is Acer and Dell With the principle of operation

cell-is directly to all customers even the smallest, PSD has build a strong dcell-istribution system with 11 branches across the country

PSD has a vision is to establish PSD as the best distributor companies in Vietnam, offering best-in-class services and solutions to our customers To do this, the mission of marketing department is to establish PSD as a strong brand and widely respected company

In Dec 2011, Notebook gross revenue is 1,050 billion VND (US$ 51M), increase 30% compare with at the same time 2010, which results in PSD become No.3 in the market with 15.3% market share PSD has 2 main products is Dell and Acer With Dell PSD got 58% share compare with DGW is 42% of total Dell Notebook in the market and Acer is 26% while CMC, FPT and DGW is 32%, 22% and 20%

To achieve that success, PSD has build up many marketing activities as well

as customer service program to support their customer like:

 Quarterly rebate: if retailers achieved at least $500,000USD per quarter

they will get 1.0% rebate base on Revenue and 0.75% for $150,000 to

%500,000 USD per quarter

 Push sale program: this is ad-hoc program, if retailers purchase 50 units of Notebook per order they will get 2.0% off base on this order