Repositioning brand image for yamaha sirius RC f1 a case study for yamaha vietnam

Positioning the image of product in customer mind is one of the effective solution to attract customer to buy company’s products.. First, we explore the significance of the three constru

December 25, 2013

TRƯỜNG ĐẠI HỌC MỞ TP.HỒ CHÍ MINH UNIVERSITÉ LIBRE DE BRUXELLS

HO CHI MINH OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

ECONOMICS & MANAGEMENT MMA7

HUỲNH NGUYỄN VĨNH KHOA

A CASE STUDY FOR YAMAHA VIETNAM

MASTER PROJECT MASTER OF MARKETING AND ADVERTISING

Repositioning Brand image for

Yamaha Sirius RC FI

I guarantee this is the study that I had made myself The databases and the conclusion in

my study are faithful I will be responsible for this study

Student Signature

Huynh Nguyen Vinh Khoa

I would like to express my sincere attitude to the following people without those help, support and encouragement; the successful completion of project would not have

been possible I want to thank Mr Nhut – my tutor guide, for helping me and clarifying

my issues as when they arose

I am highly indebted to all my classmates and my friends who were a part of my survey, helped me in my endeavor and spurred me to achieve something worthwhile and

enduring This project is successful by all your cooperation I take no credit for this

achievement but take the responsibility of any mistakes and inaccuracies

Sincerely,

Huynh Nguyen Vinh Khoa

Doing business in emerging market gives motorbike producers many difficulties in their business To sustain and develop in increasingly competitive marketplaces, Yamaha consistently try to meet the need of customers and sell more their products Positioning the image of product in customer mind is one of the effective solution to attract customer

to buy company’s products

The aim of this paper is to investigate the antecedent and consequence of brand image to customer in motorbike industry in order to gain an optimal level of brand positioning for Sirius RC FI There are 3 purposes of this study First, we explore the significance of the three constructs including: product quality, brand concept in Customer’s mind and how to send brand concept to Customer’s mind based on existing literatures In addition, their relationship would be verified through empirical data Finally, each element will be experimented in case study to understand the level of their impact on one other

To achieve that goal, questionnaire survey is used to clarify the research questions The targeted interviewees are 50 current Yamaha customers who were randomly chosen in Yamaha heads and Yamaha users via motorbike forums in Vietnam In the questionnaire, customer’s perceptions about the Sirius image based on some significant characteristics including performance, design and durability are observed, how to get into Customer’s mind Quantitative data has been adopted under presentation of descriptive, bivariate and regression analysis

Finally, some conclusions have been drawn:

- Product quality significantly effects on customer satisfaction which also considerably and positively effect on customer loyalty

- Design, price and services are the important factors to influence customer’s buying intention

- Changing Sirius RC FI concept from “Are you stylish ?“ to “Show your style”

to get more attraction from customer to Sirius RC FI

The influence of the Brand image of Sirius RC FI and Yamaha services on customer satisfaction is stronger and more positive than that of customer satisfaction on customer loyalty This means that choosing right brand positioning is a better way to attract

customer buying intention

1.5 Structure of the thesis

II LITERATURE REVIEW

2.1 Product quality

2.1.1 Definition of quality

2.1.2 Definition of perceived quality

2.1.3 Measuring product quality

2.2 Brand Concept in Customer’s mind

2.2.1 Definition of Brand concept

2.2.2 Definition of brand position

III RESEARCH DESIGN & METHODOLOGY 3.1 Research design

3.4 Sampling and Data Collection

IV SITUATION ANALYSIS

4.1 PEST Environment Analysis

4.2 Yamaha Motor Vietnam Analysis 4.3 Market and Target Customer Analysis 4.4 Competition Analysis

V SWOT ANALYSIS

VI MARKETING OBJECTIVE

VII MARKETING PLAN

VIII MARKETING PLAN STRATEGY REFERENCES

APPENDIX: Questionaires

London & Hart (2004) asserted that winning a market of four billion people in the

developing world would be a tremendous success for MNEs Meanwhile, Prahalad & Hammond (2002) mentioned that most entrepreneurs and customers in EMs are poorly served by low quality-vendors Therefore, it would be promising that MNEs could win this market by offering better product quality

On the other hand, investing in emerging markets raised controversial discourses among scholars De Soto (2000) argued that it is costly and complicated for entrepreneurs to enter the formal economy of the EMs It is seen that the legal systems of those markets are still unstable and need to be adjusted by time-consuming processes

In short, regardless of disadvantages that EM might bring, there is still an optimistic way for MNEs to seek customers in those markets due to its abovementioned advantages Peng (2001) concluded “emerging economies are likely to become the new battleground for international business”

Among many industries, motorcycle industry in emerging markets is considered as a fruitful area for investment Vietnam is classified as a Big Emerging Market that has 3 main characteristics Firstly, the market entry is low and population is large There is a high possibility of long-term growth if motorcycle makers enter the market early Market penetration ratio, which is calculated by dividing the total country population by the number of passenger vehicles in operation However, there is high risk of failure due to many factors, such as unstable legal framework and low customer spending power Hence, investing in such markets requires a proper business strategy and marketing strategy Doing business in emerging market gives motor-bike makers many difficulties

in their business In order to develop in the marketplace, they try to develop multi-types

of product to meet customer’s needs

The current motorcycle market in Vietnam is developing with high competition among various manufacturers which have a lot of marketing strategies to attract target customers such as Honda, SYM, Piaggo, SH, Dylan, etc Honda is believed to hold 65 percent of the market share, followed by Yamaha with 25 percent, while the remaining 10 percent belong to Suzuki, SYM and Piaggio Regarding the coverage, Honda now has 640

authorized dealers HEAD across the country, while Yamaha 540, SYM 310, Suzuki 120 and Piaggio 90 Yamaha made a lot of effort to expand the product which ensure the quality as well as reasonable price Yamaha motor Vietnam have provided a range of products which currently stands in different stage in the product life cycle (PLC)

In the motorcycle with gear segment, Yamaha Sirius RC FI and Luvias GTX FI are the main strategic products of Yamaha in electronic fuel injection technology in 2013 Sirius version accounted 28% in Yamaha revenue, and also 25% in motorcycle market share in Vietnam To continue of this successful, Yamaha launched Sirius RC FI and Luvias GTX version to Vietnam market in 2013 However, Sirius RC FI with the new save energy technology and the slogan “Are you stylish? “ was failure and could not meet the sale expectation compared to previous Sirius version This put Yamaha has to make decision

to repositioning Sirius RC FI image to target customers to increase sale target

The aim of this paper is to investigate the appropriate way of positioning Sirius RC FI in customer’s mind and increase the recognition of customers to Yamaha services quality

1.2 Overview of motorbike industry in Vietnam:

Prior to 1990s, most of motorcycles in Vietnam were imported and the market was small But this was changed due to the entering of foreign firms which had begun investing in Vietnam after 1990s Recognizing the market potential, Suzuki, Honda and Yamaha which are Japanese firms have a strong presence in the Vietnam market Vietnam market becomes a fierce competition between Japanese, Taiwanese and Chinese motorcycle manufacturers In contrast, the increasing motorcycle usage such as pollution is a price to pay

Vietnam motorcycle market, the fourth largest in the world, has shown signs of

saturation, with annual output having exceed demand, prompting producers in the

Southeast Asian country to speed up their exports to other markets

In Vietnam, motorbikes are the most popular mean of transportation which has a

population of 90 million people and 37million registered motorbike, according to the Ministry of Transport

Table 1: Manufacturers of current motorbikes [Source: W&S Company Limited]

Frequency Percent

To survive, several motorbike manufacturers are trying to export their products to the other markets Honda Vietnam, Yamaha, SYM, Suzuki and Piaggio – the five largest motorbike manufacturers in the country were expected to raise their annual capacity to a total of 5.5 million units by the end of 2013, up from the 4 million units in 2012 And this means these motorbike producers will have to put more focus on the international market Many producers have already started to export their products to other Asian markets The export value of transport vehicles, mostly motorcycle, produced in Vietnam rose 32.2% last year to $4.6 billion, accounting for 4% of Vietnam’s total export revenue

Source: Asean Automotive Federation

However, this doesn’t mean that the motorcycle manufacturers won’t focus on domestic market, the strategy they need to do right now is to find a way to increase the need of customer’s motorcycle buying The country’s two largest motorbike manufacturers, Honda and Yamaha, which account for over 90 percent of the local market share, may experience another bad year in 2014

According to a source close to these firms, Yamaha sales may drop by 10 percent to 750,000 this year, while Honda expects to hit around 1.5 million to 1.9 million this year The drop in sales in Vietnam came despite a number of promotion programmes and discounts, including offers to pay registration fees According to motorbike companies, their factories in Vietnam produce 5 million vehicles per year, but only 3-3.5 million of them are sold in the domestic market Many have plans in place to export already

assembled motorbikes to foreign markets, according to Saigontimes Newspaper.Sales of automatic motorbikes saw a better year, which accounted for 40% of vehicle sales during the year And even though sales on the whole were down, producers have been making long-term business plans, including developing new models

Although it has been estimated that the Vietnamese market will reach a saturation point when it reaches production levels of around 4.5 million a year, companies still see

Figure1: Business Management Performance between Honda and Yamaha [ Source:

Yamaha Motor ]

The figure above show that Honda has business performance higher compared to

Yamaha, but Yamaha sales is stable than Honda, this lead to the potential for Yamaha to develop

Figure 2: North sales result of Yamaha 2013

The figure 2 show that Sirius RC FI account for only 10% compared to Sirius RC (old version) and its rival Wave RSX Although, Wave RSX has the sign of falling down, but Sirius RC (old version) increase significantly That why Yamaha make a question about the brand concept of Sirius RC FI now is appropriate or not?

1.3 Project objectives

This thesis has two main objectives related to brand image of product on customer’s mind and increasing product sales First, the study explores the significance of each construct based on existing literatures In addition, their relationship would be verified through empirical data Furthermore, we could measure the level of impact of each element on one another and to which direction it is in the case study The final goal is to find out the appropriate brand concept to convey to customer’s mind to gain higher customer’s

buying intention

The objectives of this paper can be specified as follows:

1 To find out the appropriate brand concept to convey to customer’s mind

2 To encourage customers to buy product and use Yamaha services

1.4 Research questions

According to research objective above, the following research question would be

developed as follow:

1 Does customers know about the Sirius RC FI concept?

2 Which characteristic of product do customers concern the most?

3 Beside the product, which factors customers concern to gain buying intention?

1.5 Structure of the Thesis

The thesis is divided into of 10 separate chapters in a constructive arrangement It starts with the introduction chapter of what the project is about, the project background, the industry overview and the project objectives and structure of the thesis followed by the research questions

The second chapter is to review all the related literature on which the author based to produce hypothesis and argument

The next chapter is research design and methodology providing reader with the idea of how this thesis is made to get what it aims to Data analysis would summarize some techniques used in this project which are descriptive analysis, factor analysis, reliability testing

Chapter IV would be situation analysis which analyzed all the collected data from the questionnaire provides the result of relationship investigation between the constructs Chapter V is the SWOT analysis of product quality and product image to customer’s mind This will be the premise for the next chapter VI to clarify marketing objective Then, it will carry out the marketing plan in chapter VII and marketing strategy in

Chapter VIII

Chapter IX is the financial analysis And the conclusion will be summarized all the key finding of research as well as limitations, contribution to managerial context and its limitation that needs to be improved

II LITERATURE REVIEW

2.1 Product quality

2.1.1 Definition of quality Quality is the key to success in building customer value and satisfaction Kotler (1994) observes that even the best marketing department in the world cannot sell products which are either low quality or do not meet customer’s need Quality has been described

as “the single most important force leading to economic growth of companies in

international markets” (Reeves and Bednar et al, 1994) Quality is crucial to any business organisation The lesson of successful Japanese firms has been studied by many analysts,

in which product quality have been found as the key element for their strategic

ingredient (Jacobson & Aaker et al, 1987)

Definition about product quality could be found in an early research by Juran (1974) which defined quality as “fitness for use”, the extent to which a product successfully serves the purpose of the user This definition emphasized quality as a function of a product

On the other hand, many scholars thought it impossible to define quality as it is

recognized through experience (Ophuis & Van Trijp, 1995) Similarly, Montgomery (1996) defined: “Quality is the extent to which products meets the requirements of people who uses them” This definition explained the quality under customer’s perspective; quality can be seen by comparing the customer’s perception about it with their

requirement of the product

As can be inferred from these definitions, there are subsequently two different

approaches to quality: firm-based and customer-based quality, which is also known as subjective and objective quality Several researchers (Garvin 1984; Holbrook and

Cortman 1985, Parasuraman, Zeithaml, and Berry 1985, Dodds and Monroe 1984) have emphasized the difference between objective and perceived quality

Regarding to objective quality (e.g firm-based quality), this term is used to describe the actual technical superiority or excellence of the products (Hjorth-Anderson 1984; Monroe and Krishnan 1985) Moreover, it is measurable and verifiable on some predetermined ideal standard or standards (Zeithaml, 1988) Although there may be some concerns about what the ideal standard is, the belief that quality can be measured on the basis of several technical measurements forms the core of this approach Some standards has been presented includes: Shewhart's Economic Control of Quality of

Manufactured Product, Juran's Quality Control Handbook (1974), using of process

control charts and statistical sampling, Total Quality Management (TQM), and tactics, such as quality circles

In short, objective quality is quality that can be measured, standardized and widely

accepted by majority, which is called “firm – driven objective quality” (Main 1994) or

“producer defined quality”

Conversely, researchers and experts in general cannot come to an agreement of what the ideal standards for quality should be (Zeithaml, 1988) because quality is perceived only

by customers “Only customer who can judge quality, all other judgements are essentially irrelevant” (Gronroos (1990) and Zeithaml (1990) Reeves and Bednar (1994) believed that such global definition for quality does not exist, rather, different definitions of

quality is appropriate under different circumstances Therefore, we need the other quality definition approach which is perceived quality

2.1.2 Definition of perceived quality

In contrast to objective quality, perceived quality is defined as the consumer’s perception about the overall superiority or excellence of the product or service with respect to its intended purpose, relative to alternatives (Aaker, 1991) This perspective is similar to user-based definition of quality by Garvin (1984) Under the customer’s perspective, a qualified product should meet or exceed customer’s expectation and make them satisfied Therefore, quality would differ by individual and depend on the user’s perception

Zeithaml (1988) claimed that companies must learn how consumers perceive and

evaluate it instead of relying on firm-driven objective measures of quality to understand market-driven quality

Besides, customer plays a key role in quality, particularly in service sector according to Gronroos (1990) and Parasuraman et al (1985) In view of that, quality definition was governed by the extent to which a service met the expectations of customers since they believed that only customers judge quality, whereas all other judgments are essentially irrelevant (Zeithaml et al., 1990) This point of view is strengthened by Gronroos (1990)

by saying that "It should always be remembered that what counts is quality as it is

perceived by the customers" and Buzzell & Gale (1987) by “Quality is whatever the customers say it is, and the quality of a particular product or service is whatever the customer perceives it”

Nonetheless, service scholars were not the only supporters of a customer-orientation quality The profit impact of market strategy (PIMS) program database, which is

primarily composed of manufacturing firms, also uses this quality approach (Bednar and Reeves, 1994)

In conclusion, to evaluate and measure accurately the quality of product, we should better

in favour of customer perception about the product, which also means perceived quality

2.1.3 Measuring product quality Many studies have been conducted regarding to the quality’s measurement methodology While we can find numerous topic of service quality, the same for product quality seems

to be less

Different definitions about quality provide different ways to measure it However,

according to Reeves and Bednar (1994), even though our product is a product which focus mainly on “conformance to specifications”, we can still apply the same measurement as service product of how strong the product meet or exceed

manufactured-customer’s expectations for it The most popular model of measuring service quality is introduced by Parasuraman, Zeithaml and Berry in 1985, in which they determined quality of service as comparison between customer expectation and perceptions of

performance based on twenty two specific dimensions

There are three related literatures that the author found about this topic Whereas Garvin (1987) proposed eight dimensions of quality: (1) performance, (2) features, (3) reliability, (4) conformance, (5) durability, (6) serviceability, (7) aesthetics, and (8) image, Hayes (1998) measures it by only three dimensions: (1) interior quality, (2) instrumentation and (3) drivability Recently, Brucks, Zeithaml and Naylor (2000) represented 6 dimensions

to measure quality of durable goods (including automobile vehicle)

Table 3: Automobile product quality dimensions by Zeithaml (2000) Dimension

Zeithaml (2000)’s meaning