market research on plywood and paper of cau duong timber factory

The writing of this thesis has been made possible because of the guidance, encouragement, good will and practical help of a number of people and organization. I am particularly indebted to my supervisor, Tran Van Hung, MBA, lecturer of the National Economic University, for his valuable guidance, criticism, comments, corrections, and for his kindly encouragement during the development of this study. His suggestions and recommendations were as much appreciated as his endurance, patience and genuine interest in this thesis I would like to express my deep gratitude to all my teachers at Phuong Dong University, who have been helping me for the past four years. I am grateful to managers, officers and staff at Cau Duong Timber Factory, where I carried out practice, for giving me time and great co-operation. I would also like to thank the respondents, officers and staff from various companies that I visited for their time, patience and cheerful acceptance. Most of all, my appreciation and gratitude is due to my parents, my brother and my friends, who encouraged me in many ways to fulfill this study.

Ministry of education and training

Phuong dong private university

By Tran Thi Phuong Mai

Supervisor: Tran Van Hung , MBA

In fulfillment of the BBA degree

Author : Tran Thi Phuong Mai

Student number : 345208

Faculty : business department

Research company : cau duong timber factorySupervisor : Tran Van Hung, MBA

Date : may 2000

Table of content

ACKNOWLEDGEMENTS

Executive Summary 1

Chapter I: Introduction 4

I Establishment and Development History of Cau Duong factory 4

1 Establishment 4

2 Organization Framework 5

3 Characteristic of Base line of Business 6

4 Asset and Equity 8

II The Important of This Theme 10

Chapter ii: literature review 12

I Overview 12

II Some Concepts Related to the Research 12

1 Term “Market” 12

1.1 Definition 12

1.2 Functions of market 15

2 Marketing concept 16

2.1 Definition 16

2.2 The Role of Marketing in Practice of a Firm 17

3 Marketing Research 18

3.1 Definition 18

3.2 The Duty of Marketing Research 20

III Economic Environment 20

1 Environment of the economy 20

2 Industry Structure 22

2.1 Plywood Production 22

2.2 Note-paper Procession 24

Summary 26

Chapter iii: research methodology 27

Chapter iv: results / findings 30

I Results 30

1 Business Activity Analysis 30

2 Competition Situation 32

2.1 Domestic competitors 32

2.2 Foreign rivals 33

2.3 Position of Cau Duong Factory in the Market 35

3 Potential Market 37

3.1 Note-paper Production 37

3.2 Market of Plywood for Construction 38

4 Political and Legal Factors 40

5 Demographic factors 41

6 SWOT Analysis 42

II Findings 44

1 Real State of Marketing Research in Cau Duong Factory 44

2 Elements Affect on Selling-price of Cau Duong Factory 46

Chapter v: limitations 49

Chapter VI: conclusions and recommendations 50

I Conclusions 50

II recommendations 51

1 Improving Awareness of the Factory’s Staff about Marketing 51

1.1 Solution to Consolidate and Expand the Market 52

1.2 Marketing Research Activity of Cau Duong Factory in short term 53

1.2.1 Establishing a Temporary Marketing Staff 53

1.2.2 Entrusting all Department with Task of doing Market Research 53

in near future 2 Cau Duong Factory should set up a Marketing Staff 56

3 Solution to Improve Product Quality and Reduce Price 58

3.1 Improving Quality 58

3.2 Improving Price Policy 59

Appendix 1: questionnaire 61

Appendix 2: charts 67

Appendix 3: bibliography 68

Acknowledgements

The writing of this thesis has been made possible because of the guidance, encouragement, good will and practical help of a number of people and organization

I am particularly indebted to my supervisor, Tran Van Hung, MBA, lecturer of the National Economic University, for his valuable guidance, criticism, comments, corrections, and for his kindly encouragement during the development of this study His suggestions and recommendations were as much appreciated as his endurance, patience and genuine interest in this thesis

I would like to express my deep gratitude to all my teachers at Phuong Dong University, who have been helping me for the past four years

I am grateful to managers, officers and staff at Cau Duong Timber Factory, where I carried out practice, for giving me time and great co-operation

I would also like to thank the respondents, officers and staff from various companies that I visited for their time, patience and cheerful acceptance

Most of all, my appreciation and gratitude is due to my parents, my brother and

my friends, who encouraged me in many ways to fulfill this study

supervisor’s evaluation

recommentator’s evaluation

Evaluation of probation office

Executive Summary

In Vietnam today, the Government is implementing multi - factor economy,including joint - ventures, foreign firms, State-owned enterprises In which,State-owned enterprises are considered as leading element of the development.Thus, the most important thing for them is economic efficient, competitiveability and position in the market

Cau Duong Timber Factory was built in 1956 with the support of formerSocialist Republic of Czechoslovak It was one of the earliest State-ownedenterprises in Vietnam industry; aims to rebuilt the country after a long-lastingwar It has the task of synthetic timber procession with some main products such

as note - papers, furnitures and plywood

Since November 1997, It has became a member of Bai Bang Paper Vietnamese Paper Corporation At present, major market of Cau Duong Factory

Company-in North area and Ho Chi MCompany-inh City In such narrowed market, it is necessary forthis factory to implement market research in order to expand its market in thefuture

This report is the result of a market studying by a student from Phuong DongUniversity with the purpose of gene Cau Duong timber factory up on thecustomers, the market and competitive real state of affairs

 Some main objectives:

 Providing general market assessment including economic real situation,industry review and the competitive environment

 Researching on business environment and an outlook of the actual market inorder to analyze decisive factor of the factory’s development

 Identifying business opportunities as well as developmental competence,menace in the future

 Examining the influence of the outside environment: political, legislation,culture, consuming habit, etc

To achieve the above objectives, the project included both secondary andprimary research The primary data were conducted from questionnaires anddirected interview in Hanoi These were focusing on such issues as presentmarket, competitors, and customers, etc Secondary data were collected base onvarious information sources, magazines and other references.

 The major findings are:

In some recent years, business environment of Cau Duong factory has beenenlarged resulting from the urbanization speed with a strong demand for woodenproducts, especially for plywood

Since 1996, as the urbanization rate of Hanoi has been speeded up with theincrease of 26%, many construction projects have been being taken place byforeign constructors or domestic construction companies This demand has beenintensified by the significant foreign directed investment capital (FDI), overseasdevelopment assistance (ODA) and money transmission from over seasVietnamese The main reason for the rise in urbanization velocity came fromout-of-date and bad condition of Vietnam’s infrastructure

Open-door policy has been making business opportunities for foreign firms inVietnam They have more competitive advantages than local enterprises intechnology, equipment, capital Therefore, their products has more chances tosecure large part of the market

For example, 1996, In plywood market only, imported products accounted for42% because they meet the demand of foreign constructors in big contracts ofbuilding; Vietnamese firms seems to be short of initiative in their own market

Asian countries included Malaysia, Indonesia were the main suppliers inVietnam plywood market with the total supplying index of 35000 tons in 1999.However, being affected by Asia financial and monetary crisis in July 1997,volume of imported product from these countries was reduced to 20%

In the field of paper production, Vietnam is a large market with the total annualdemand of 75 million tons Meanwhile, the total production capacity of the CauDuong factory and its parent company (Bai Bang Paper Company) only meetsthe social demand of 35% Private sector and other State-owned firms satisfiedthe rest demand of the Vietnam market.

 Key recommendations to Cau Duong factory will be:

 Paying more attention in marketing programs, advertisement

 Attach special important to reform machinery, equipment and labor inmarketing research

 Keeping good relationships with perennial customers and suppliers

 Attending trade fairs and exhibitions to seek for new partners

Chapter I

Introduction

In order to better understand about Cau Duong factory, this chapter describes itssome sketchy characteristics and a little information about the whole economicsurroundings

I - Establishment and development history of Cau Duong factory

1 Establishment

Cau Duong Timber Factory is a State - owned firm, which was put in action inJuly11th, 1959 and cut the inauguration band by Le Thanh Nghi, IndustryMinister, belong directly to Industry bureau – Ministry of Industry It has theprimary mission of processing wood, manufacturing wooden product in order toserve inland consuming and manufacturing plywood

Becoming a member of Bai Bang Paper Company, Cau Duong factory hasprocessing notepaper for its parent company since November 1997

Cau Duong factory was invested and directly managed by the State Cau Duongfactory has juridical personality, self-contained in keeping business account andbank account.

 According to figures in 1999:

Capital for running business: VND 12,453,672,000

Total output : VND 14,883,510,671

Labor force : 300

The average age : 38

Monthly income per person: VND 600,000

procession Workshop

Wood-Personnel, Administration Bureau and Wage control

Capital construction

Health-care, Security, Pre-school

Sales department

Finance bureau

Repository of end-product

prefabrication Plant

Paper-3 Characteristic of basic line of business

Cau Duong factory’s line of business is abundant with many kinds: woodwork,pencil, plywood, sawn timber, broom-stick, B 40 gun nest, loom’s spare part,racket, boat, etc However, principal commodities are plywood and notepaperowing to basic earning resource

 Plywood

+ Total output of 1000 m3 annually

+ Plywood is manufactured in continued, self-contained process

+ Material: Rough-timber,

Technical proportion: 1000 m3 of plywood need 2500 m3 of rough-timber

Material suppliers: State-owned and legal private afforestation yards in themountainous of north area

 Note-paper

+ Designed capacity: 3000 tons per year

+ Material: Paper pulp (Provided by Bai Bang company)

+ Processed in these closing-stages of work

 Technological process.

So far, Cau Duong factory has utilizing production line of former SocialistRepublic of Czechoslovak Backward technology with 70% of 1960s and 1970s-made machinery, is the main reason for high production expenses and limitedquality The consequence of cumbersome and less effective machinery than

modern one, high depreciation expenses and obsolescence closely related to highselling price of Cau Duong factory.

4 - Asset and Equity

 Asset

Table 1B - Balance Sheet

Due to the characteristic of business field, fixed asset takes a large part in totalequity, about 80%, liquid asset for doing business is restricted Hence, capitalprivation has restrained Cau Duong factory from expanding line of business,improving quality, reducing price and strengthening competition ability.

The chart above has presented the upward trend of liquid assets density and thedecrease in fixed asset from 1997 to 1999 It means, capital for running businesshas been strengthening However, compare to 1998, financial difficulties in 1999came from large amount of stocks of VND 1494852000 (increase 46.16%) andappropriated capital by its consumers of VND 297514000 (30.33% higher than1998), meanwhile, cash capital was slightly increased (2.5%) In order to escapefrom capital scanty, the factory must take back the appropriated capital andestablish a sensible policy of inventory

 Capital.

Table 1 A - Capital statement

Criteria measures Unit of 1997 1998 1999 98 / 97 (%) 99 / 98 (%)

1 Capital classification VND 1000 10607869 11748533 12453672 110.8 106 Fixed capital VND 1000 7481546 8032578 8822396 107.37 109.83 Liquid asset VND 1000 3126323 3631276 3631276 118.86 97.73

2 By ownership VND 1000 10607869 11748533 12453672 110.8 106 State capital VND 1000 9308404 10436070 11112395 112.11 106.48 Owners equity VND 1000 1299465 1312463 1341277 101 102.2

Paid-in capital VND 1000 0 0 0 0 0

Table 1A and 1B reflects real situation of Cau Duong factory’s capital As can beseen, budget capital and owner’s equity has manifested ability of financialindependence However this situation has led to difficulties in mobilizing allcapital resources for developing and expanding business activity, meanwhile, thefactory’s difficult solving competence depends on limited bank loans and creditorganizations

II The importance of this theme

According to the figures given by Planning and Investment Ministry, Vietnamhas allowed 270 foreign investment projects, which are acting in building and

construction material domain, with the total registered capital of USD 3,5 billion.

So far, these projects have reached USD 1.1 billion of the total working capital

A top construction expert said that foreign investment projects had broughtVietnam many modern facilities, and new management experiences However,the high level of competition in domestic construction material market must bealso dealt-with If local manufacturers did not have any specific strategy, theywould be knocked-out in their own market

In addition, paper production branch is facing unforeseeable losses, resultingfrom the target of satisfying the interior market demand In the context of a spike

in paper-pulp and having no declining sign, many paper companies have decided

to reduce imported paper-pulp from 40% to 10%

In this circumstance, Vietnamese enterprises need to answer followingquestions:

 How to cope-with the market displacement in the most effective and fastestway?

 In a high-level of competition, what will they do to enhance their competitionability?

 Customers are the vital element of a firm, how to meet their requirements in aprofitable and more effective than competitors?

In order to survive and develop in such high competitive environment.Enterprises need to find the right way of development; the most effectiveinstrument for their target determination is market research Besides, in theunstable and ceaseless changed market, market research should be taken placeregularly Market research is always the first step of patrons’ demand defining,plans building, leaders’ decision making… and it becomes the key step of a and it becomes the key step of afirm’s development

As mentioned above, Cau Duong factory has been running business in anarrowed, high competitive intensity market, therefore, market research dutybecomes an insufficient, more and more pressing activity

Although several market studies were carried-out, Cau Duong factory still need

an up-to-date and comprehensive market analyzes of present business medium

for its future development This project aims to provide the firm’s practicalbackground, general market assessment, including economic situation,competitive environment, and reliable information about the customers,predilection so that they can run business in an effective way.

The researcher hopes that this study would provide a little but helpful-informationsource, which can be used in practical activities of Cau Duong factory

 Scope of the project

Owing to time limited, this research only bounded some products: Notepaperand water - resistance plywood for using in construction industry

Chapter ii

Literature review

This chapter introduces readers a list of related documents and theory that theresearcher utilized as reference documents for the project, and also deals withimpaction of objective elements to Cau Duong factory’s present position in themarket

I Overview:

This research is accomplished base on studying and consulting many documentsgathered from various sources In order to reach objectives of this study, theresearcher had to gather information on the past researches in library, someoffices and interview officers Researches and analyses found includes thefollowing:

 CD - ROM database of Vietnam News Agency

 Articles in other newspapers and journals such as Vietnam Economic News,Vietnam Economic Times, Vietnam Investment Review, Business andMarketing News

 Some reports that are available and concerned with the research

II - Some concepts related to the research:

1 Definition of term “market”.

1.1 Definition.

The category of “Market” had appeared long - long ago In primitive age, itexisted in form of batter economy, in which, goods are directly traded orswapped for other goods This was the most incipient style of market Later,money appearance simultaneously with market development; the definition of

“buyers” and “seller” was taken shape all there factors has created a fulldefinition of “market”

Today, in developed society, market notion is wider and more abstractunderstood, it is not only a physical location, where buyers and seller interact,but also every where: on the train, at the street, etc In addition, consumers andsellers can use means of intermediary such as: communications and liaison

resource, brokers instead of direct meetings The market expansion is afoundation to enhance the development of society.

There are many definitions about market Below are some of them:

- By Traditional view: Market is place where buying, selling and exchanging

activities are carried-out (Enterprise, number 4,1996, p.6)

- By Marxism: Market is a circulation stage in reproduction process.

- By Capitalist Political Economics: Market is a process, in which buyers and

sellers interact each other in order to determine quantity and price of goods(Enterprise, number 4,1996, p.6)

How ever, the more developmental the social is, the more different the marketdefinition be understood According to the trend today, enterprises’ activitiesneed to be market-oriented, in concrete, satisfy the customers’ demand.Contemporary point of view puts the customer in the central position because inmodern life, a firm’s existence greatly depends on the number of customers ithas In marketing sentiment, definition of the market only concentrates onbuyers market: “An enterprise sells what the customers need, do not sells whatthey produce”

P Kotler and G Amstrongs (1994) explained the notion of market as follow: “Amarket is the set of actual and potential buyers of some products”

Also, this definition has placed some questions that firms need to answer:

 How do the customers choose among these many products?

 Why do they choose this product rather than that one?

There are some kinds of market that marketing-standpoint suggested (JP Lacour

- Lexique du Marketing, Editions “Bertrand - Lacoster”, Paris 1993,6)

+ Actual market: It is a market, including the consumers who only buy product

of a unique firm

+ Potential market: Is the market that an enterprise has ability to penetrate in

the future

+ Theory market: Is Actual market + Potential market.

As concerned above, market plays an important role in a firm’s development Incontrast, the firm’s development greatly depends on the market-share it has

 Is there only buying, selling, exchange activities implement in the market?

 What will the firm do in order to secure its own market - share? What will thefirm do in order to have good position in the market? What will the firm do torun business in an effective way?

1.2 Functions of market.

 Admittance function.

Admittance function is reflected in consuming procedure, products’ consumableability depends on the consumer’s approval Reproduction process isaccomplished when market’s admittance synonimize to consumers’ acceptance.Nevertheless, The market not only passively recognize but also inspect andanalyse the result of reproduction process as well as buying and sellingprocedure through law of economy

 Implemented function.

By means of implemented function, commodities form exchange valuethemselves Exchange function’s reflection in total demand and supply, goodsexchanging has become an important foundation for setting up the structure ofproduct

 Function of regulation and excitement.

Through the instrumentality of goods and services exchanging, market regulatesand excites the development of business activity Thus, market is not only the

target, but also the motivation to effectuate objects and objective groundwork inorder to develop the role of this function.

Expression:

+ Creating motivation to firms

By studying market demand, producers take the initiative of moving to differentfield of business with the purpose of getting higher profit In contrast,manufactures in disadvantageous position have chances to rise up and escapefrom bankrupt menace

+ Conducting consumers in careful considering before deciding to buy anyproduct

 Information function.

Information function only exist in the market, it concludes information aboutdemand, supply, structure of demand – supply, relation ship between demand– supply and each kind of goods, price and its influent, etc Becoming adecisive role in economic management, information need to be exactly collected,especially information of market, as a consequence of the most important step isdecision-making

2 Marketing concept.

2.1-Definition:

We all know that a developed social closely related to market expansion level Inthe development history of human -being, it holds the key position Today, theorigin of an enterprise’s business activity aims to dump goods and control themarket movement All victorious companies have the ability of completelysatisfying and pleasing their target consumers Meeting this requirement,marketing research is not only a specific function but also the whole firm’sphilosophy Therefore, marketing staff needs to clearly define the customer’sgroups and to clearly determine how to profitably serve them and to make itmore effective than competitors

This is an essential definition: Marketing is a management process of socialproperty, in which individuals and communities gain what they expect by

creating, canvassing and exchanging valuable things to others (P Kotler,Marketing management).

This notion was found based on some other concepts as needs, demands andrelationships, market, marketing and marketing staff

Below are some other definitions about marketing that should be considered inthe research process:

+ Marketing is a process, through which an organization has a creative, effectiveand profitable relation-ship with their market

+ Marketing is a kind of creativeness arts and profitable satisfaction thecustomer

+Marketing aims to put forward right products and services to right persons,right addresses, right time, right price and exact information together withpurchasing encouragement

+Marketing is a form of human activity, aim to meet their need and desire bymeans of exchanging

2.2 The role of marketing in practice of a firm.

“Marketing is so important that it should not be understood as a scheduledfunction It shows the whole of business work from the angle of the ultimateresult by customer’s field Success in business are not determined by theproducer but the customer”

(P Drucker - Translated version)

“Marketing have connection with many activities that the company use to fit thebill of creative and profitable business environment.”

(R Carey - Translated version)

“The work of marketing with a view to adapt the variant social demands andprofitable chances” (Nameless - Translated version)

In short, In stead of bringing about business with the fixed and already knowncompetitors, all the firms are acting in competitive environment against quickalternation with advanced-technology contenders, new law, new trademanagement policies and the decrease of consumers’ loyalty With the purpose

of fast adaptation to market changes, it is necessary for the existence of marketresearch stuff in each firm

3 Marketing research:

3.1 Definition:

In modern life, information has becoming a kind of goods, it can be sold in themarket like other merchandises, many informative services have appeared inorder to provide necessary information for all the people in all fields Especially

in business activity, it plays a decisive role of running a business An effectiveaction greatly relies on exact source of information In the world today,companies are trying their effort to get latest information that help one anotherfor decision making process Hence, there have been explosions of informationwar among leading firms

In spite of standing at the first phase of market economy, a new tendency hasjust been sprouted in Vietnam, infant information competitions This matter ismanifested in form of market research activity Although market research is anew activity, it intimate connected with information finding

The fundamentals of marketing research is information gathering from manysources such as: customers, competitors, market, etc Its existence has become

an important part in decision making process because, right and exactinformation will help the firm rationally allocate the sources, running business inthe most efficient way

* Marketing research is a significant link of marketing information system,which consists of people, equipment and procedures to gather, sort, analyze,evaluate and report the result by the firm, with the purpose of providing base-lineinformation to managers Existence of marketing research aims to make goodmarketing-intelligence’s shortcomings This means, managers cannot wait for

information to arrive in bits and pieces from the marketing intelligence system(everyday information about developments in the marketing environment thathelp managers prepare and adjust marketing plans), they often require formalstudy of specific situation Marketing research will help them.

* Marketing research is defined as the function that links the consumer,customers and public to the marketer through information - Information use toidentify and define marketing opportunities and problems, to generate, refine,and evaluate marketing action, to monitor marketing process (P.Kotler and hisCo-Author, G Amstrong, 1994)

* Marketing research systematically studies necessary data set by marketingsituation The firm must gather, analyze, and report the result (MarketingEssentials, p21)

* Marketing research engages in wide variety of activities, ranging from analyses

of market potential and market shares to study of customer satisfaction andpurchase intentions “The aim of marketing is to make selling superfluous Theaim is to know and understand the customer so well that product or service fitsand sell itself”, said Peter Drucker (Principles of marketing, p6)

3.2 The duty of marketing research:

+ Finding, collecting, disposing information about actual customers, markets andposition of the firm Providing exact information for the leader’s decision

+ Making plans for future development direction

+ Finding, analyzing the firm’s opportunities, and threats in the future, rely oninformation of present market

+ Having a thorough groups of new demands, building advertisement measures,speeding up selling-goods and after-selling services

+ Marketing researcher must clearly define groups of customers and whichrequirement the firm can serve in a profitable and more effective than competitors.

II Economic environment.

1 Environment of the economic.

After the lifting of Trade embargo imposed on Vietnam by the US government inFebruary 1994 Vietnam has strengthened its economic collaboration anddeveloped relationship to many countries in the world

Since then, Vietnam has been becoming a member country in differentInternational economic organizations such as ASEAN (1995), AFTA (1995), andAPEC (1998) Also, it is on the way to join WTO (World Trade Organization)base on signing a Commercial Treaty with the US

As a consequence, Vietnam’s GDP growth in 1996 was at the peak of USD 19,9million (9,54%) the average GDP per person has reached to USD 269 a year(World development Report 1997) and in the period from 1986 to 1996, theannual average of economic growth was in the space of 8,2% (ADB, 1997)

However, being heavily affected by Asia Financial and monetary crisis in 1997,many Asia neighbour countries’ economic growth has felt down to negative.Thanks to the first stage of the economic market expansion, Vietnam’s GDPgrowth was decreased by 2,35% to 5.8% in 1998 and 4,8% in 1999 (3,35%fewer than it was in 1997) (ADB, 1999) In the year 2000, it is predicted thatGDP growth will raise at least from 5,5% to 6% (Vietnam Economic Times,January 1996)

Table 2 - general norms

2000

1 GDP growth rate

2 Industry production value growth

3 Import turn-over

4 Import turn-over speed

5 Price of consumer’s goods

%

%million USD

%

%

4,8010,4011,5423,300,10

5,5613,402,9433,800,80

(Source: Planning and investment Ministry)

Though this decrease of economic growth, a number of capital had not beenprevented from flowing into Vietnam Foreign investment, which stood at zerojust about more than ten years ago, has climbed to USD 28 billion in 1999 Itcomes from various sources: Foreign Direct Investment (FDI), OverseasDevelopment Assistance (ODA), commercial loans and money transmissionfrom overseas Vietnamese Together with capital circulation, abundant offoreign investors, enterprises and economic organizations also came toVietnam in forms of joint - ventures, representative offices and created aneffervescent market in Vietnam

Table 3 Economic - social Essential target in the year 2000

5 National budget spending

6 Jobs for Labor Force

7 Reduce poverty ration

(Source: Planning and Investment Ministry)

Attending to international and area economy, Vietnam could attract more capitalinvestments in order to enlarge the economy In the other hand, it has broughtmany difficulties that domestic manufacturers must face: satisfaction thecustomer’s higher and higher requirement, high competitive intention of the

economic environment with foreign made goods, especially the contrabandcommodity.

For example, in 1999, the quantity of imported paper reached 193000 tons(increasing 19%, compare to 1998), in which, nearly 15000 tons were suspectedfor commercial cheating

Material providers: Mostly located on the mountainous areas, in some State-ownedand legal private forest-stations However, limited number of providers has led tothe insufficiency of material input for the factory to use-up its capacity

As from the open door has been establishing in Vietnam in 1986, the fast changes

in the form and content of Vietnam’s economy also brought the development ofthe factory In addition, the sharp rise of urbanization rate in Ha Noi has created astrong demand for construction plywood and a number of Cau Duong factory’scompetitors Foreign antagonists came to Vietnam’s market altogether with foreigninvestment circulation owing to open-door structure; in the neighboring areas,processing activity of households also spread quickly

However, the big construction contracts in urbanization process mainly focus onjoint - ventures between Vietnam and foreign partners or 100% foreign invest

projects Materials’ providers are usually chosen by putting forth for them tomake tender for its supplying Normally, Vietnamese providers fall thosecontracts into foreign suppliers’ hands, resulting from scanty of financial,limitation of supplying product quantity All these above reasons has shown theactual situation that Vietnamese enterprises in general and Cau Duong factory inparticular has not taken full advantage of their own market to gain in bigprojects.

At present, Cau Duong factory has little chances to take part in big contracts offoreign construction projects Its major consumers are local constructioncompanies: Construction Company number 4 - Ho Chi Minh City, CooperationLICOGI 18 LICOGI 18, VINACONEX, Ha Noi Construction Cooperation withthe purchasing power of 65% the total selling-product yearly Besides, the slowdown of construction rate in Ha Noi can probably accounted for decliningeconomic tendency owing to Asia Financial and monetary crisis

Table4: Purchasing Proportion of Major Consumers in 1999

1 LELEX joint - venture - Ho Chi Minh City

2 Construction company number 4 -HCM City

(Source: Cau Duong Timber Factory)

2.2 Notepaper procession.

Cau Duong factory has processing this product since 1998 when it became amember of Bai Bang Paper Company The factory has not enough financialpotential to equip a self-contained line for manufacturing but the expansion onthis product has brought a basic earning for the factory with designed capacityabout 3000 tons annually

Materials (paper pulp) are provided by its parent company, completely satisfythe factory’s need in procession, it does not take more concern about findingmaterial suppliers.

In spite of paper procession, the factory still independent on consuming goods,however, producing and trading plans are made by its parent company At thepresent time, the factory is making a deal with selling-agencies net, directlytrading with end-users by its own distribution network has not been organizingyet All these above reasons led to an indirectly affectation on splitting up the netprofit into parts of Cau Duong factory

Lighter competitive situation of paper production compare to plywoodmanufacture, is probably a consequence of social’s strong demand that has notsatisfied

However, in the first quarter of the year 2000, Vietnamese producers are facing

up to unforeseeable losses owing to the sharp rise of paper-pulp price that indeed

is still on the upward trend (the average increasing of 29%)

Bai Bang Paper Company’s annual designed capacity is about of 55000 tons It isestimated that Bai Bang would produce 65000 tons in 2000 In order to steady theoutput, it must import 10000 paper-pulp tons, take 15% of demand in this year,result to at least VND 23 billion decline of profit (Business and Marketing News -March, 2000) In this circumstance, paper branches are petitions for lessening the10% Value-added Tax to 5% or correcting its selling price

 Summary

In order to exist and develop in competitive law of market economy, theimportant thing to every firm is to get exact information, determine the targetconsumers, finding potential market Marketing research appearance aims to dothese things for them In addition, this activity provides serviceable information

in helping the managers’ decision making process, strengthening the adaptationability to the changes and consolidating the competitive power

The thing is that, the objective world is always in motion and ceaselessly change,

so does the market As an indispensable result, market research becomes anuninterrupted and regular activity in such unstable market

Marketing research is not only the most important factors, but also a startingpoint in building a firm’s strategies, in which they establish and implementbusiness plans or perfect their market policy in order to gain the best result inbusiness activities

For these above reasons, all the firms need to build up their own market policy,

so that they can gather valuable and exact information for their activities Anenterprise’s effective activity can greatly depends on the consequence brought bymarket research People consider it as the first step to run a business, to orient theway of developing, and to enlarge activities of a firm

With the purpose of providing connected information to the company, marketresearch consists of determination the position of a firm in the market, a product

or merchandise groups’ selling ability in an elsewhere market Base on thisfoundation, the firm enhances its supply capacity to satisfy social requirement

In the economic market, the major substance of market research drives at studyingand finding the development penetrable aptitude of the firm in the future

* Economic / Industrial reports on the sectors / sub - sectors to be studied

* Previous market studies

* Some print matters: Vietnam Economic Times (VET), Vietnam Investment Review (VIR), Business and Marketing News

The second phase was the primary research that included questionnaires andface-to-face interviews to get feedback from the customer

However, the sample size was not enough to achieve the research objectives or togive a complete exact assessment In arriving at an appropriate method ofprimary data collection, the researcher consulted these documents:

* Principles of marketing

* Marketing research on life insurance market in Hanoi

(Tran Doan Kim, Boise State University, 1999)

According to these documents, the researcher found that the most effective way

is to conduct a survey using structure questionnaire, which aim to get the exactobjectives of the study

 Place of the survey: Eight urban districts of Ha Noi

 Sample size: Resulting from the time limited, the sample of this research is

 Sample profiles: + Nationality: Vietnamese.

+ Sex: Approximately 50% male and 50% female

+ Occupation: Personnel in construction companies or

having knowledge of construction

 Sampling method:

* With water resistance Plywood:

Since plywood production closely related to construction activities, chosenrespondents must be involving in building The respondents’ number of eachkind in this research area included:

+ 30 respondents were given questionnaires and time for answering last for 5days

+ 10 interviewees were chosen randomly

* With Note-paper processing:

The market research on note-paper is fulfilled with the purpose of providingsome base-line information about the present matter of taste of consumers anddefines the future tendency

+ 30 respondents were given questionnaires, including pupils in high schools,primary schools, students at universities and some pupils’ parents

 Questionnaire design :

After 3 days of studying models in textbooks and previous researches with thesupervisor’s comments, questionnaires were sent to the respondents

Questions were divided into 2 parts:

+ General questions which asked the respondents to provide some personalinformation such as age, sex, occupation

+ Specific questions which investigate customers’ feedback about the product.Most of the questions were made in a simple way so that respondents could easy

to answer The survey took about 10 days to complete

Chapter IV

Results/findings

I Results.

1 Business activity analysis.

Table 5: income statement

5 Hand in State’s budget VND 727042653 762436012 805571496 +4.9 +5.7

6 Total capital A thousand

VND

(Source: Cau Duong Factory)