Marketing plan for michelin type in truck container segment in southern viet nam in 2011 2013

VUONG BAO AN MARKETING PLAN FOR MICHELIN TYRE IN TRUCK & CONTAINER SEGMENT IN SOUTHERN VIET NAM IN 2011 – 2013 MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s name

VUONG BAO AN

MARKETING PLAN FOR MICHELIN TYRE

IN TRUCK & CONTAINER SEGMENT

IN SOUTHERN VIET NAM

IN 2011 – 2013

MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s name: Dr Nguyen Van Son

Ho Chi Minh City

(2010)

Michelin tyres in Truck & Container segment in Southern Vietnam in 2011 – 2013” as the final project of MBMM4 program

I trust the legality of all references, information sources, and materials using to complete the project And I confident to submit it to Professors and MBMM Faculty members

useful guidance, suggestions and encouragement through out the project

I also would like to express my sincere appreciation to Mr Hoang Trong Hai – Marketing Manger of Michelin Vietnam, for his sharing information, opinion and market insights to create an useful and applicable marketing plan for Michelin Vietnam

I also grateful to all my colleagues in Michelin company for the great support and sharing to my research activities

I also would like to present my grateful heart to all professors, lecturers and tutors from Open University of Ho Chi Minh City and the Solvay Brussels School, also the genuine thanks to Ms Thuy and Mr Serge for all your kind support during the whole course

And the most wholehearted gratitude I wish to express to my parents for their endless love, cares, encouragement and supporting to me during the course of my study

CPK : Cost Per Kilometre

DRC : Danang Rubber Company

SRC : Sao Vang Rubber Company

PC : Passenger Car

TB : Truck & Bus

R& D : Research and Development

MVP : Marketing Value Proposal

ISO : International Organization of Standardization

2 Situation Analysis

2.1 Introduction

a) Purpose of study……… 2

b) Scope of study……… 2

c) Methodology & source of information……… 2

2.2 External analysis : a) Market analysis ……… 3

b) Customer analysis ……… 5

c) Competitors analysis ……… 7

d) Environments analysis ……… 7

2.3 Internal analysis : a) Company introduction ……… 8

b) Strategy ……… 9

c) Products ……… 10

d) Resources ……… 10

e) KSFs ……… 11

2.4 SWOT Analysis …… ……… 12

3 Marketing Strategy 3.1 Vision ……… 16

3.2 Value Customer ……… 16

3.3 Value Proposition ……… 18

3.4 Value Network ……… 19

4 Marketing Action Plan 4.1 Product Offer ……… 20

4.2.Pricing ……… 21

4.3 Promotion ……… 21

4.4 Distribution ……… 22

4.4.Service ……… 24

4.5 Implementation Schedule ……… 25

5 Forecast & Control 5.1 Sales Forecast ……… 26

5.2 Expense Forecast ……… 26

5.3 Controls ……… 27

CONCLUSION ……… 28

REFERENCE ……… 29

APPENDIX ……… 30

CHAPTER 1 : EXECUTIVE SUMMARY

Vietnam tyre market in general or truck and bus tyre market in particular is not only a merging market but also very competitive for the new technology tyre It’s so easy to find many tyre brands when coming to any tyre shop such as : Michelin, Goodyear, Bridgestone, Kumho, Hankook ….for the famous foreign tyre manufacturer, DRC, SRC, Casumina …for the local brands and more than 20 Chinese tyre brands playing in the market With the enormous potentiality of market growth, Michelin has a great ambition

to become a leader in Vietnam tyre market This project is contributed to above term vision by create a 03 years marketing plan for truck & bus tyre segment in the Southern of Vietnam where is the key market of all players to compete The objectives

long-of this marketing plan is create customer’s brand awareness in this potential segment, and following with the result of 5% market share of Michelin tyre in the first year and forecast 20% growth rate for Michelin brand Furthermore, this plan is also expected to all Michelin Vietnam staffs realize and focus to develop the company goal in order to create a team power, a passion which helps company easily overcome any trouble on its way to grow up

Details for this project as below :

- Overall of truck and bus tyre market in Vietnam – and in the South

- Michelin company introduction and vision

- Marketing strategy for this plan

- Marketing implementation and sales & expense forecast

- Control items

CHAPTER 2 : SITUATION ANALYSIS

2.1 INTRODUCTION

A Purpose of study :

Michelin Vietnam has two main business divisions : Passenger Car tyre and Truck – Bus tyre In the truck – bus segment, Michelin gets a rapid growth from 2005 to now with the sales increasing more 200% in 2008 At the first business stage, Michelin put the priority

to approach on kind of coach & bus vehicles which require the safe and comfort feeling from the passengers Mileage is also Michelin’s competitive advantage in this segment and makes the big difference from other competitors As the result, Michelin becomes leader in this category for the radial tyre in Vietnam market The remaining category is also a very potential one and is the target for this project This study’s purpose is aimed

to help Michelin to become a leader in this category as well

B Scope of study :

This marketing plan is applied to the Southern market of Vietnam where can cover 80%

of target customers and make highest profit

C Methodology & Source of information :

i Desk research ( Secondary data ) :

- With the references to internal data from Michelin Vietnam on its history, products, human resource, etc

- The research also use the data from other sources like customs department, economic newspaper, customer database from yellowpages,…etc

ii Market research ( Primary data ) :

- Quantitative survey was conducted by in-depth interview method with 100 users who are the big transport companies in logistic industry in the South The objective of this survey is to collect information of users in terms of buying attitude, usage condition and customer expectation on tyre performance

2.2 EXTERNAL ANALYSIS :

A Market :

Vietnam Market size 2008

DRC 23%

SRC 19%

Casumina 14%

Vietnam Market size 2009

DRC 23%

SRC 17%

Casumina 18%

Double Coin 7%

Truck & Bus vehicle Population

Source : Michelin Marketing Dept

In terms of the growth of new truck and bus vehicle, from 2005 onwards we can see the stable increase of new vehicle in Vietnam which is very potential factor for radial tyre market As the same period of time, we can also expect the fast growth of radial tyre due

to the support of OEM car maker for radial tyre, almost the truck and bus vehicle

registered in 2005 fit with radial tyre in stead of bias tyre

B Customers :

There are three types of customer in this Truck & Bus tyre segment :

+ Coach vehicle which mainly carry passenger to province or tourist companies :

This customer require the safety tyre with comfortable feeling bringing to their passenger as well as the long mileage

+ Truck and container haulage vehicle carrying goods in logistic company :

The highest concern feature of this customer in terms of tyre offering is the capacity of carrying the load as much as possible Almost these vehicles are overload from two or three times more

+ Construction truck or heavy truck : The required tyre for this vehicle need to

cover the harsh road condition with careless usage of driver

According to the quantitative survey conducted by Michelin internal resource : sales department in Oct 2010 for 100 big transport companies in logistic industry in the Southern Vietnam, these users are typical customers in term of business status, vehicle volume, and potential growth chosen in each zone of four Michelin sales men, it’s come out with some key factors of the attitudes and usage application as following :

Source : Michelin customer survey 2010

With the survey result above, they are some interesting factors found which will be the core points to approach to end-user such as :

- Usage condition : almost customers in this segment are running on the standard road condition which is a positive factor influencing to tyre performance

- Tyre service activities : customers are aware of the importance of this activities to make a tyre life longer

- Customer’s expectation on tyre : they require the complete tyre service and rely on the service quality of authorized dealer offering

45%

Buying follow dealer’s advice

51%

The buying attitudes

of end-users

Regional road condition

41%

Standard speed running

73%

Standard load carrying

81%

Tyre retreading activities

18%

Tyre maintenance frequently

32%

Tyre fitment

by own technician

41%

The tyre usage

of user

end-C Competitors :

There are more than 20 tyre brands in Vietnam Truck & Bus tyre market and this market currently is of bias tyre which covered more than 58% market share (in 2009) by local manufacturers such as : Casumina, DRC, SRC, and Chinese brands

In the radial tyre market which is the main market for all foreign tyre makers like : Michelin, Bridgestone, Goodyear, Kumho, Hankook, and Chinese brands There are three levels in terms of quality and user price is set as follows :

+ Premium quality tyre : Bridgestone and Michelin

+ Economic & acceptable quality tyre : Kumho, Hankook, Goodyear and some

Chinese tyre : Double Coin, Chao Yang, West Lake,…

+ Low quality tyre with cheap price : almost is Chinese brands

In the competition of premium tyre quality in Vietnam, Bridgestone takes the big advantage of OEM ( Original Equipment Manufacturer ) tyre support in Asia from Huyndai, Hino and many Japanese truck makers Moreover, with the earlier presence in Vietnam market, they own a strong brand’s perception of customers

In terms of business strategy between two strong brands : Michelin and Bridgestone, they are quite difference on approach where Michelin focus almost on the replacement market and pull marketing strategy For Bridgestone, they concentrate to OEM market and push marketing strategy which is more suitable for Asian culture and business way

D Environments :

+ Political environment : the regulation of transport department for tyre is need to meet the ISO standard for quality as well as must match with OEM tyre size recommendation

+ Geographic environment : It takes a big advantage for Vietnam where is long shape country with over 2,000 km national way from Ho Chi Minh to Ha Noi, and the government strategy is focus to support more on transportation of the country by a lot of highway projects such as : Lang - Hoa Lac in the North and HCM – Trung Luong in the Mekong area

+ Social environment : Vietnam is also the country for tourist activities with many beautiful sea places as : Ha Long bay, Nha Trang, Da nang,….along with national road as well as 86 millions population that people traveling mainly by vehicles is the big potential for transporting

2.3 INTERNAL ANALYSIS :

A Company :

Michelin started the business in Vietnam as the representative office in 2000 with two main divisions : Passenger Car Tyre and Truck & Bus Tyre Since Michelin divided Vietnam market into two main regions : Southern Vietnam ( from Da Nang city to the South ), Northern Vietnam ( from Hue city to the North ) and established 03 authorized distributors for supplying PC & TB Michelin tyres to Vietnam market The key task of this office is to support three distributors on marketing activities and create good image

of Michelin tyre in customer’s mind Starting approach Radial tyre to end-user from 2005, Michelin had a rapid growth in sales from the year 2006 onwards with the figure below :

tyre dealers Following that is the action from Goodyear and Bridgestone brands in middle of 2010

Michelin Vietnam organization has almost complete functional departments such as : Sales, Marketing, Finance, Customer Support, Admin & HR, Logistic, as the organization chart in Figure :

Source : Michelin HR dept

B Strategy :

Michelin Vietnam align and develop with the strategic orientation of Corporate Group :

- Focus our passion to improve mobility Grow as the most innovative company for tires, suspension systems and related services

- Offer our customers the best quality products and services at the best price in each market we decide to serve

- Provide growth and fulfilment for our people as they carry out their responsibilities, especially by making full use of the Company’s diversity and by developing our people’s talents

- Durably grow the value of our Company by maximizing the profitability of our operations and our return on investment

- Recognize and fulfil our Company’s role as a responsible member of society, by practicing our values

C Product :

Michelin product strategy is to be a leader of product innovation :

+ 4,000 people working in R&D with 4.5% of World Turnover for Brand invested

in Innovation

+ Since 1952 launched the major innovation in Truck tyres : Radial technology, Low profile tyres, Energy range,

+ Since 2007 : launched of MICHELIN Durable Technologies

Michelin Vietnam offers product to end-users base on the usage segmentation to cover and satisfy all kinds of customer in the market as the below chart :

D Resources :

In tyre markets all over the world, Michelin teams are fully focusing on strengthening the leadership over the long term by providing lasting solutions to the challenges of mobility By delivering superior performance at the lowest possible cost, managing environmental footprint, enhancing safety, Michelin is combining performance and responsibility to emerge from the crisis stronger than ever

Coherently, Michelin Vietnam has built very strong teams in general and sales team to approach the market in particular With the concept of Full Marketing Approach, sales people in Michelin Vietnam with the well-trained and experienced on tyre market is deploying the Michelin Selling Way which called : End-user Approach effectively and control the distribution channel as model follows :

The core success factor in Michelin is product, Michelin Vietnam regularly receives the support from Central in Asia in terms of Marketing, Product activities by giving on field training by experts to sales team, dealers’ people, and product launch or product innovative event in overseas

E Key Success Factor :

+ Innovative Product more than 100 years :

- in 1952 launch Radial technology in Truck tyres, low profile tyres and energy range

- in 2007 launch of Michelin Durable Technologies

- Leader in fuel saving thanks to Michelin Energy tyres : 2.3 litres fuel / 100km and reduce 6.12 kg CO2/100km ( obtained during the Challenge competition)

- Leader in casing engineered for life

- Leader in environmental protection : Regrooving and Retreading : 5.3% reduction in CO2

- Leader in multi-life for substantial savings : Michelin casings are conceived with durability which provides client the lowest cost per kilometre and significant reduction of tyre budget

+ Customer oriented strategy via focusing on End-user approach with full service offer

2.4 SWOT ANALYSIS :

A Strengths and Weakness analysis :

Performance Importance Factor Fundamental

Strength

Marginal Strength

Fundamental Weakness

Marginal Weakness High Med Low Marketing factors

Performance Importance Factor Fundamental

Strength

Marginal Strength

Fundamental Weakness

Marginal Weakness High Med Low Financial Cost

To analyse the strength and weakness factors of the company, the author uses the model of performance and importance model which can evaluate almost complete key factors in difference division such as Marketing factors, Organizational factors, Financial Cost…

The matrix is come out below from the analysed table to show four zones of the company status

in summary that will support to marketer in strategic proposal making

- Breadth of product range

- New product programme

- Vietnam’s infrastructure is building up today with many project to widen or open new highway, national way all over the country

- Consumer was approached to Radial tyre technology and started to change the trend

of usage to Radial tyre in stead of Bias tyre

- Transport regulation is applied strictly and people care more to the safe feature

- Government start some projects to protect environment against with pollution such as : Euro 2 emission standard,

C Threats :

- Many Chinese tyre makers join to tyre market with very low cost strategy

- Main competitor : Bridgestone start their own business in 2011 with aggressive, flexible and adaptable strategy to Asian culture and business way

- Dealer loyalty & retention is not focused and Michelin lost manpower in the market

- Michelin turnover in resource is so high due to managerial competence

c) Competition : Michelin will compete with two kinds of competition : main competitor Bridgestone regarding OEM strategy and lower level competitors regarding the low cost strategy

d) Customers in studying segment : a survey for target customer come out the some key points shown in page 06 is the useful data to create the action plan in order to satisfy the customer needs

e) Distribution : Create a flexible and adaptable distribution policy and full service offering to users in order to make the highest profit for authorized dealers to expand Michelin tyre This will lead to the loyal objective

d) Other factors : managerial capacities, cultural adaptability in internal analysis

is also concerned for the improvement