Developing marketing strategy for VNShop in the e commerce market

If VNShop has chosen to offer the same products or services to customer in a competitive market it may fail so the marketing strategy for the company is very important.. Research Process

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

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VŨ NĂNG LỰC

DEVELOPING MARKETING STRATEGY FOR VNSHOP IN THE E-COMMERCE MARKET

XÂY DỰNG CHIẾN LƯỢC MARKETING

CHO CÔNG TY VNSHOP TRONG THỊ TRƯỜNG THƯƠNG MẠI ĐIỆN TỬ

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

VŨ NĂNG LỰC

DEVELOPING MARKETING STRATEGY FOR VNSHOP IN THE E-COMMERCE MARKET

XÂY DỰNG CHIẾN LƯỢC MARKETING

CHO CÔNG TY VNSHOP TRONG THỊ TRƯỜNG THƯƠNG MẠI ĐIỆN TỬ

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration

Date………

Author

Vu Nang Luc

ACKNOWLEDGEMENT

I would first like to thank my thesis advisor PhD Tran Huy Phuong of the HSB The door to Prof Phuong office was always open whenever I ran into a trouble spot or had a question about my research or writing He consistently allowed this paper to be my own work, but steered me in the right the direction whenever he thought I needed it

I would also like to acknowledge support of Mr Thinh former manager at VNPaya introducing me to VNShop and also provide me many important information and data for this research and I am gratefully indebted to him for his very valuable comments on this thesis I also want to say thank you to all staff at HSB who guide me through all administrative process for the thesis

This accomplishment would not have been possible without them Thank you

TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGEMENT ii

ABBREVIATION v

LIST OF TABLES vi

LIST OF FIGURES vii

INTRODUCTION 1

1 Research Rationale 1

2 Aims of research 2

3 Objects of research 3

4 Scope of research 3

5 Research methodology 3

6 Structure of the thesis 5

Chapter 1 - THEORETICAL BACKGROUND 6

1.1 Strategy 6

1.1.1 Definition of strategy 6

1.1.2 Types and levels of strategy 8

1.2 Marketing strategy 10

1.2.1 Marketing 10

1.2.2 Marketing strategy 10

1.3 Building marketing strategy 15

1.3.1 Analysis of Mission and Vision of company 19

1.3.2 External analysis 19

1.3.3 Internal analysis 22

1.3.4 SWOT analysis 23

1.3.5 Assess and select the strategy 24

Chapter 2 – CURRENT SITUATION OF VNSHOP MARKETING 26

2.1 About VNPay 26

2.2 VNPay Shop 28

2.3 Current situation of marketing activity at VNShop 29

2.3.1 Current segmentation and target 29

2.3.2 Product offering categories vs competitors 31

2.3.3 Current channel and potential customers 32

2.3.4 Communication and advertising 33

2.3.5 Current user rating of VNshop vs competitors 34

Chapter 3 - MARKETING STRATEGY FOR THE CASE OF VNSHOP 38

3.1 External analysis 38

3.1.1 PESTLE analysis 38

3.1.2 Market analysis 39

3.1.3 Customer analysis 42

3.1.4 Competitor analysis 43

3.2 Internal analysis 46

3.3 EFE, IFE matrix 47

3.4 SWOT Analysis and alternative strategy selection 49

3.5 Alternative strategies selection 52

3.6 Marketing strategy for VNShop 55

3.7 Plan and activities 59

3.8 Conclusions and suggestions for future research 61

3.8.1 Conclusions 61

3.8.2 Limitation of research 62

3.8.3 Suggestions for future research 62

REFERENCES 64

APPENDIX 1 – SURVEY QUESTIONS 67

HOSE Hochiminh Stock Exchange

PESTLE Political, economic, social, technological, legal and

environmental factors QSPM Quantitative Strategic Planning Matrix

SBU Separate Business Unit

SPU Strategic Planning Unit

STP Segmentation, Targeting, and Positioning

SWOT Strengths, Weaknesses, Opportunities, and Threats

TAS Total Attractive Score

TOWS Threats, Opportunities, Weaknesses, Strengths ( a variant of

SWOT matrix) 4P The 4P of marketing (Product, Price, Place, Promotion)

LIST OF TABLES

Table 2.1 Product in laptop category of VNshop and competitor 31

Table 2.2 Number of EC users forecast (statistica, 2016) 32

Table 2.3 Number of download from Playstore (Android) 32

Table 2.4 Awareness level of each brand 35

Table 2.5 Brand ranking level of VNShop and competitors 35

Table 3.1 Vietnam GDP Growth (2010-2016) 38

Table 3.2 Ecommerce market size 2015 – 2021 40

LIST OF FIGURES

Figure 1.1 Corporate and marketing planning 12

Figure 1.2 Strategic marketing process (Gilligan & Wilson) 17

Figure 1.3 Develop a product/ market strategy 18

Figure 1.4 Five Force Model 20

Figure 1.5 Five stages of environmental analysis 21

Figure 1.6 Example of an IFE matrix 23

Figure 1.7 SWOT analysis 24

Figure 1.8 TOWS matrix 24

Figure 1.9 Sample QSPM matrix 25

Figure 2.1 Organization structure of VNPay 28

Figure 2.2 Mobile banking EC (estimate for 4 big banks) vs Mobile EC users (million) 30 Figure 2.3 Number of customer vs market potential 31

Figure 2.4 Number of download on Android 33

Figure 2.5 Awareness level of each brand 35

Figure 2.6 Brand ranking level of VNShops and competitors 36

Figure 2.7 Brand activity level data in 2015 37

Figure 3.1 Revenue of Vietnam EC market to 2021 (source: Statistica 2016) 40

Figure 3.2 Number of EC users forcast 41

Figure 3.3 average revenue per user (APDU) in EC market Vietnam 41

Figure 3.4 Brand ranking level of VNShop and competitors 43

Figure 3.5 Emotion to brands 46

Figure 3.6 EFE Matrix for VNShop 48

Figure 3.7 IFE Matrix for VNShop 48

Figure 3.8 SWOT matrix for VNShop 49

Figure 3.9 TOWS matrix of alternatives strategy for VNShop 51

Figure 3.10 QSPM strategy selection matrix 54

Figure 3.11.VNShop users vs EC Market 56

Figure 3.12 Device used for online purchase 2015 58

Figure 3.13 Strategy implementation timeline 60

INTRODUCTION

1 Research Rationale

Marketing is an important area of management when managing a company

Marketing activities help company to understand and provide the right product and

services to customers Because marketing is important, companies invest a large

amount of money on marketing An example is Vinamilk a large diary company in

Vietnam In the first 9 months in 2015 Vinamilk spend 1,235 billion VND on

advertising in 4,500 billion VND of selling, general and administrative expense

(SG&A) On average, each day Vinamilk spend about 4.57 billion VND on advertising

(source: cafef – [29]) Another example is a Tan Hiep Phat a big company in beverage

spends 4.9 million USD on advertising even from year 2004.[27]

Despite the fact that companies are spending high amount on marketing, not

all company are successful Marketing effort will only succeed if companies have a

good marketing strategy which is an important functional strategy of the company

One of the case we can see is the story of Dr Pepper when they launch the

advertisement campaign ―Not for women‖ soft-drink With this message the

company wants to increase the spending of men on the product but it this does

exclude the women customer from its customer set The failure here is with

Segmentation, when company want to keep both the gender male and female the

advertisement remove female customer

Even for the companies that are not selling products, marketing is also very

important An example is in e-commerce in Vietnam recently we found some

companies with good investment closed like deca.vn or lingo.vn E-commerce is

now a very competitive market a new company needs a very good entrance strategy

to succeed Currently we see many companies that are quite successful like

adayroi.com (Vin-Ecom), tiki.vn, chotot.vn… so for any new company want to

enter this market must have a right strategy

VNPay is a leading company in payment industry of Vietnam; the company has

provided services to bank on SMS banking VNPay created VNShop in 2014 join the

Ecommerce market when it's very competitive The Ecommerce market in Vietnam is

Comment [A1]: Vẫn chưa làm rõ vì sao cần chiến

lược Marketing, anh phải chỉ ra các hoạt động Marketing đang được tiến hành là gì, nó có đem lại hiệu quả không, hạn chế của nó là gì, phải chăng do thiếu chiến lược nên chưa thực sự thành công…Từ đó chọn đề tài

very competitive, many project with good funding have failed like Deca, Lingo.vn…

When joining this market VNShop must have differentiation to reduce the competition

from other existing companies If VNShop has chosen to offer the same products or

services to customer in a competitive market it may fail so the marketing strategy for

the company is very important The company needs to think about how it segments the

market, what market segment it will serve to ensure the success

Utilizingits strength as one of the biggest payment provider in Vietnam, the

strong relationship with the bank VNShop has segmented the market to 2 groups the

one with bank account and customer who don't use Mobile banking The company

focus on provide services to the customer who have already using Mobile banking

This come from a simple reason that: Customer who want to shop online will

mostly have used Mobile banking and customer who do not have Mobile banking

does not shop online (ecommerce)

However, with VNShop initial strategy, it is targeting only a small segment

of market (only those who use Internet banking application) In addition to that, the

advertising and promotion of VNShop is low, currently there is only a short

description on Agribank website and VNPay website, beside that there is no

investment to marketing From all above reason, the number of customer who use

this this applicationis low and not many people know about the application

VNShop need a good marketing strategy to improve this, and this thesis will aim at

building a marketing strategy for VNShop

This thesis has two research questions

1 What is the strategic marketing plan and how to build it?

2 How can the strategic marketing plan be built for the VNSHOP?

2 Aims of research

Main objective of the thesis:

 To build marketing strategy for the company

Along with above, the other objectives of this thesis are:

 Research and summarize the theory on marketing strategy, the process of

building a marketing strategy

Comment [A2]: What are the current marketing

activities at Vnshop, is it effective? why does it require marketing strategy

 Perform the external and internal analysis Propose marketing strategy for VNShop, assess and select marketing strategy for VNShop

There are 2 research methods: qualitative and quantitative

Qualitative Research is primarily exploratory research It is used to gain an

understanding of underlying reasons, opinions, and motivations It provides insights into the problem or helps to develop ideas or hypotheses for potential quantitative research Qualitative Research is also used to uncover trends in thought and opinions, and dive deeper into the problem Qualitative data collection methods vary using unstructured or semi-structured techniques Some common methods include focus groups (group discussions), individual interviews, and participation/observations The sample size used by this method is typically small, and respondents are selected to fulfil a given quota

Quantitative research is used to quantify the problem by way of generating

numerical data or data that can be transformed into usable statistics It is used to quantify attitudes, opinions, behaviors, and other defined variables – and generalize results from a larger sample population Quantitative research uses measurable data

to formulate facts and uncover patterns in research Quantitative data collection methods are much more structured than Qualitative data collection methods Quantitative data collection methods include various forms of surveys – online surveys, paper surveys, face-to-face interviews, telephone interviews, longitudinal studies, online polls, and systematic observations

In this thesis I will use both qualitative and quantitative research methods Qualitative method will be used to explore and to understand the current company

situation,then a quantitative research to measure the current brand aware level of the

company

Research Process

To perform this research and build a marketing strategy for VNShopI follow

the following process:

 Review the theoretical background about strategy and marketing strategy

 Interview with company managers to understand about the product and

marketing situation

 Conduct a survey to know how customers currently know about the product

 Analyze assess current situation and build the marketing strategy for

VNShop

Data Collection and Analysis

The data in the thesis are obtained from primary and secondary sources

Primary data are data generated from an original source, such as researchers’ own

experiments, surveys, interviews or focus groups Secondary data are data collected

from existing sources, such as publications, databases and internal records

Interview and questionnaire are the tools to get the primary data Data about

Ecommerce and domain knowledge is from my research and interviews The

interviews was done with Mr Thinh – former technology manager of Vnpay, I also

interview and discuss with some other expert in IT and trading like Mr Bui Dinh

Thi, expert in trading and forex of companyMiyatsu Vietnam Mr Nguyen Huu

Nghi, founder and CEO of IFSC Company In addition, there are some data gained

from secondary sources, such as the study about the industry in Vietnam that was

done and published

In this research, a survey is done using questionnaires to know about current

company situation (about how potential customer ranks the company compares to

other company in ecommerce include: adayroi.com, tiki.vn, sendo.vn,

lazada.com.The questionnaire will ask customer some basic questions like gender,

age and how they rankVNShop compare to other Ecommerce website.We have sent

Comment [A3]: Mới thấy anh làm phỏng vấn với

1 người, tại sao lại chỉ 1 người? Ngoài ra để làm chiến lược Marketing anh cần phỏng vấn các chuyên gia, các nhà quản trị trong ngành…

the question to each person who participated to this survey and after collecting

response from 80 people

Average point for VNShop (mean value): 1.1

Standard deviation: 1.04

In this survey, we want to estimate the average value of the ranking that

user gave If we want confidence = 90%, error = 0.1 then we must have a

sample size n where

z (alpha/2) - the z value where we want confidence (1-alpha)

E: Error, where we expect value is in interval (1-E, 1+E)

In this case, alpha = 0.1, z(0.05) = 1.649 E=0.01, use above formula we have

n = (1.649*1.04/0.1)^2 = 296.64 = 297

But due to limited time author have not yet been able to get to this sample,

this is a limit of this research

With sample size n=50, confidence = 90% the error is 0.243 (it mean with

confidence 90% the error of ranking will not more than 0.243) So I increase sample

size to a larger value n=80 then Error = 0.192 this is good enough for the scope of

this research So we decide to collect 80 samples

6 Structure of the thesis

The thesis is contains 4 chapters

Introduction- Introduce the research, summary about the importance of marketing

and why we need to make a marketing strategy for VNShop

Chapter 1– Theoretical background: This chapter covers the theoretical background

of the research About strategy, marketing and marketing strategy

Chapter 2–Current situation of the marketing activities at VNShop

Chapter 3- Building marketing strategy for VNShop

Chapter 4 – Conclusion and suggestion for future research

Comment [A4]: Tại sao là 50 người, và 50 người

này anh chọn lựa thế nào Con số 50 là khá nhỏ, thường thì phải 120 nếu anh có nhiều khách hàng tiềm năng

Chapter 1 - THEORETICAL BACKGROUND

In this chapter we discuss the theoretical background for this thesis, with a focus on strategy, marketing strategy and the process and build marketing strategy This chapter will also cover the tools for building strategy

There are many definitions of strategy Because the word ―strategy‖ is initially used in military, we will first see the meaning of the word ―strategy‖ by a

military strategist Liddell Hart, in his book ―Strategy‖ (1967) define strategy as:

“the art of distributing and applying military means to fulfil the ends of policy.”From this definition, if we remove the word ―military‖ we will have a

definition that can be used for business In this view we see strategy as a way of allocating resources to archive the end result

To understand about strategy in business meaning, now we look at some definition in business context

Max McKeown (2011) define that “strategy is about shaping the future”

Henry Mintzberg from McGill University defines strategy as ―a pattern in a stream of decisions‖ Henry Mintzberg described five definitions of strategy in 1998:

Strategy as plan – a directed course of action to achieve an intended set of

goals; similar to the strategic planning concept

Strategy as pattern – a consistent pattern of past behavior, with a strategy

realized over time rather than planned or intended Where the realized pattern was different from the intent, he referred to the strategy as emergent;

Strategy as position – locating brands, products, or companies within the

market, based on the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm;

Strategy as ploy – a specific maneuver intended to outwit a competitor; and Strategy as perspective – executing strategy based on a "theory of the business" or

natural extension of the mindset or ideological perspective of the organization

In the book, The Concept of Corporate Strategy(Kenneth Andrews, 1980) Kenneth defined strategy as below:

“Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.”

Gerry Johnson, Kevan Scholes, Richard Whittingon in the book Exploring Corporate Strategy (7th edition, 2005) defined: ―Strategy is the direction and scope

of an organization over the long term, which achievesadvantage in a changing environmentthrough its configuration of resources and competences with the aim of fulfilling stakeholder expectations.‖

Michael Porteris a well-known author in the topics of competitive strategy Porter argues that competitive strategy is about doing activities different than competitors In the article ―What is strategy‖ on Havard Business Review (December 1996) he defined strategy as:

“The essence of strategy is choosing to perform activities differently than rivals do”

In short, Porter argues that strategy is about competitive position, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors In his earlier book,Competitive Strategy (1980) Porter defines competitive strategy as ―a combination

of the ends (goals) for which the firm is striving and the means (policies) by which it

is seeking to get there.‖So Michael Porter definition of strategy is heavily

emphasize the competitive position that the organization trying to archive and how

to archive that

From the definitions above we can define strategy as ―a long term vision or

next section we will discuss the types and levels of strategy

1.1.2 Types and levels of strategy

There are three levels of strategy: a corporate-level strategy, a business-unit

strategy, and functional/operational strategies Corporate strategy will work at

corporate level to decide which business will the firm pursues Business strategy

defines how the company competes with the chosen business Functional strategy is

strategy for each of the function or department (operation, marketing, human

resource) In the next pages we will examine each of this

Corporate strategy

Corporate strategy defines what business or businesses the firm is in or

should be in, how each business should be conducted, and how it relates to society

This strategy is for the company and all of its business as a whole Corporate

strategies areat the highest levels in the organization; they generally involve a

long-range time horizon and focus on the entire organization At the corporate level the

concern revolves around the definition of business in which the corporation wishes

to participate and the acquisition and allocation of resources to these business units

An example of this is: Kinh Do (stock ticker –KDC listed on HOSE) is doing

business in both food industry and real estate Corporate strategy will decide if the

company will participate to the real estateor not Should the company keep the food

business or should the company sell it

There are varieties of corporate strategy but Wheelen and Hunger (2004)

divide corporate strategy into 3 big categories:

- Growth strategy: This is to expand company activity

- Stability strategy: Keep the current company operating business and domain

- Retrenchment strategy: Reduce company level of activity

Comment [A5]: Làm rõ hơn các chiến lược cấp

coongty như chiến lược tăng trưởng, chiến lược ổn định, chiến lược thoái lui…

Growth strategy: This is to expand company activity to increase revenue,

this include strategy like creating a new business or joining new market According

to Norberto A Orcullo (2007)some strategy like Merge and Acquisition or making

Strategic Alliance fall in to this group of strategy

Stability strategy: Keep the current company operating business and

domain To make this strategy means that company will keep current activity level

It also mean that the company may not find new investment opportunities to grow

Retrenchment strategy: Reduce company level of activity In this category,

the company will reduce activity level Some of strategy of this type is: Sell out or

de-investment, Outsourcing…

SBU-level strategy

Business strategy defines how each individual business will attempt to

achieve its mission within its specific field This strategy referred to each separate

business unit (SBU) or strategic planning unit (SPU) At this level strategy two

critical issues are specified: (1) the scope or boundaries of each business and the

operational links with corporate strategy, and (2) the basis on which the business

unit will achieve and maintain a competitive advantage within its industry

(Wheelwright, 1984)

Business strategy will have many supporting functional strategies like:

marketing strategy, human resource strategy, operation strategy…to support this

strategy and to improve competitive positioning of the product and service that this

SBU providing to market

Functional strategy

Functional strategy focuses on supporting the SBU level strategies This

strategy is the strategy for each specific functional unit within a business

Functional strategies primarily are concerned with the activities of the functional

areas of a business (i.e., operations, finance, marketing, personnel, etc)

Since all function of business unit must work together and is inter-related,

functional strategy of each function will affect other functions

Comment [A6]: Làm rõ hơn các chiến lược ở cấp

này (không phảo là business strategy mà là chiến lược cấp đơn vị kinh doanh SBU)

Comment [A7]: Làm rõ thêm lý thuyết về các

chiến lược chức năng

Even functional strategy is different for each function; they share the same

mission and vision of the business unit This will connect functional strategies to

work together to support SBU level strategy

In this thesis we are building a marketing strategy so this will be a functional

strategy More details about marketing strategy will be discussed in section 1.2 of

this thesis

1.2 Marketing strategy

1.2.1 Marketing

Marketing in modern business is very important Even that we need other

function like HR, finance with a poor marketing the company will hardly succeed

In a narrow sense, people usually only understand marketing as ―advertising‖ but if

we need to understand marketing properly to set a good background for the

following chapters

There are many definitions of marketing, below author will cite some famous

one and then analyze it Philip Kotler, Kevin Lane Keller 2012 Marketing

Management, defined marketing as below:

“Marketing is a societal process by which individuals and groups obtain

what they need and want through creating, offering, and freely exchanging products

and services of value with others.”

The following definition is from AMA (American Marketing Association)

―Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers,

clients, partners, and society at large.‖

So marketing is not only about communication but in a whole meaning, marketing is

about finding the needs of customer, then ―creating and delivering the values that satisfy the

need of a target market‖ (Kotler) Both definitions covered this point

1.2.2 Marketing strategy

In section 1.2.1 we have discussed the definition of marketing, marketing can

be strategic or tactical.At strategic level we normally emphasize on customer

segmentation, targeting and positioning

Comment [A8]: Font chữ thống nhất với toàn bộ

bài (Phuong 30.10)

In this thesis we concentrate on building a marketing strategy, so here we will define what marketing strategy is In section 1.3 we will discuss the process of building a marketing strategy

In the book Marketing Management (Trương Đình Chiến, 2013: Quản trị marketing: 14) the author define marketing strategy as below:

“Marketing strategy is collection of principles and directions that lead and direct the marketing activities of enterprise in a specified duration”

Phd Don Sexton 2010 in the book ―Marketing 101: How to Use the Most Powerful Ideas in Marketing to Get More Customers‖ : 15 has defined marketing strategy as below:

“A marketing strategy is a blueprint for how you will allocate your resources

to archive your business objectives”

In this book Sexton also point out that a product / market strategy should include the following component:

- Target market: Specify the target customer segment

- Business objectives:This specifies objectives in term of financial such as revenues, profits or quantity of unit sold or market shares

- Positioning: In this he recommended this should be one or two key benefit

of your product or service For example this should be: the application will provide customer the fastest delivery time etc,

- Programs: ―The actions to implement the strategy Sometimes called the tactics or marketing mix, these action concern activities such as advertising, personal selling, pricing and distribution‖ (Don Sexton, 2010, Marketing 101: How

to Use the Most Powerful Ideas in Marketing to Get More Customers: 20)

Don Sexton also emphasizes that target market and positioning are the most important things in a marketing strategy

Marketing strategy must align with organization strategy The marketing manager of the company must set marketing objectives and build strategy that aligns with organization strategy

John Ensor, Graeme Drummond has depicted this in the book ―Strategic Marketing Planning and Control‖ as following

Figure 1.1 Corporate and marketing planning

(Source: John Ensor, Graeme Drummond, Strategic Marketing Planning and

Control – third edition: 244)

In this view he view the company as having only one business and so functional strategy directly support the corporate strategy and we do not see business strategy as in section 1.1.2 of this thesis

From abovedefinitions we can define marketing strategy is a functional strategy to support business strategy and corporate strategy, marketing strategy helps company to achieve the market share and strategic position in the market In a marketing strategy, the most important parts are Segmentation, Targeting, and Positioning

1.2.2.1 Segmentation

No product or services can satisfy all customers; this is because each person

has a different wants and needs To serve customer better company must divide

customers in to groups so that customers in a same group must have similar

response to the products and services This is called ―segmentation‖ Each group of

customers is called a segment The company then will choose one or two segment

to serve, the act of choosing a segment to serve is targeting

Segmentation splits customers into groups with similar needs and wants to

best utilize a firm's finite resources through buyer based marketing Segmentation

(together with targeting and positioning) is one of the most important things to do in

marketing Each customer in the market has specific needs for product so we cannot

treat all of them the same withsame product offer Instead of that, we offer each

customer segment a specific product to meet the need of group

There are many reasons why we do segmentation, some of those reason are

listed in below (Doyle, 1994) includes:

- To meet consumer needs precisely

As we have described the importance of segmentation, so how we segment

the market is very important

The segmentation process involves establishing criteria by which groupsof

consumers with similar needs can be identified These criteria have toestablish

consumer groups that have the following characteristics

● The consumers in the segment respond in the same way to a

particularmarketing mix

● The consumers within the segment have to react in a clearly differentway

from other groups of consumers to the marketing mix on offer

Comment [A9]: Mục này không thấy ăn nhập gì

với mạch của luận văn Anh đang định nghĩa chiến lược marketing Thiếu logic

Comment [A10]: Thêm mục cho dễ theo dõi ví dụ

1.2.2.1

● The group has to be large enough to provide the return on

investmentnecessary to the organization

● The criteria used to identify the segment have to be operational

After the market is divided into segments, the company will evaluate the

attractiveness of each segment and select the target market The criteria to evaluate

each segment may include

 Fit with firm’s strategy

 Fit with firm’s goals

Targeting is to select target market to serve A target market is the market

a company wants to sell its products and services to, and it includes a targeted

set of customers for whom it directs its marketing efforts Identifying the target

market is an essential step in the development of a marketing plan A target

market can be separated from the market as a whole by geography, buying

power, demographics and psychographics Details about market segmentation

are described in section 2.2.3 of this thesis

Positioning

Positioning refers to the place that a brand occupies in the mind of the

customer and how it is distinguished from products from competitors In order to

Comment [A11]: Giống như trên, thiếu logic cần

sắp xếp lại xem để ở đâu

position products or brands, companies may emphasize the distinguishing features

of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, popular or luxurious, entry-level or high-end, etc.) through the marketing mix Once a brand has achieved a strong position,

it will be difficult to reposition it

Positioning is one of the most important marketing concepts Primarily, it is about "the place a brand occupies in the mind of its target audience" Positioning is now a regular marketing activity or strategy Positioning is something (perception) that happens in the minds of the target market It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category

There are a number of different approaches to positioning:

 Positioning against a competitor

 Positioning within a category

 Positioning according to product benefit

 Positioning according to product attribute

 Positioning along price lines: a luxury brand or premium brand

 …

In this thesis we, since our product is an ecommerce application we will use

2 methods for positioning include Positioning against a competitorand positioning according to product benefits

1.3 Building marketing strategy

In section 1.1 and 1.2 we have discussed about strategy, marketing strategy

In this section we will discuss the process and tools to make a marketing strategy There are many authors have written about the process of building a marketing strategy Basically, the process is of building a strategy can be applied however some specific steps may be applied for marketing In the following paragraph we will details the process of building marketing strategy

Alsem (2007, 21) describes the process in the following way: the strategic marketing plan process is a combination of an external analysis and an internal

analysis The internal analysis is to determine the firm’s strengths and weaknesses The objectives of external analysis could provide the opportunities and threats The combination of strengths, weaknesses, opportunities, and threats (SWOT) helps managers find out an effective strategy

Gilligan and Wilson (2003) provide a description of a more detailed planning process than Alsem (2007) does First, the executive summary is needed The planner should realize the background of the company and to understand the mission, objectives, and financial performance.Wilson’s planning process is somewhat more complex, but it is very complete This process includes every detail (Gilligan & Wilson 2009, 65-68.)

The steps listed by Gilligan and Wilson include:

- Analysis of mission, vision, objectives

- External analysis (customers analysis, competitor analysis, market analysis)

- Internal analysis (strength, weakness)…

- SWOT analysis

- Define market objectives

- Strategic marketing plan

The steps are detailed in the below picture:

Figure 1.2 Strategic marketing process (Gilligan & Wilson)

(Source: Gilligan & Wilson, 2009)

Don Sexton, in his book Marketing 101, 2010 give a simple process for building a marketing strategy where his approach is more toward marketing The process includes:

1) Situation analysis: Customer analysis, competitor analysis, environment analysis

2) Segmentation, Identify and select target market

3) Assembly of Strategy: Which we set objective and, positioning and propose programs to achieve the proposed objectives

Figure 1.3 Develop a product/ market strategy

(Source: Don Sexton, 2010, Marketing 101, p25)

From the above we can summarize the process of building a market strategy

as follow:

Step 1: Analysis the mission, vision of the company

Step 2: Analysis of external environment, within this we need to do analysis

at many level include:

- Macroeconomic environment (PEST)

- Industry environment analysis using 5-force model

- External environment using EFE

- Market analysis

- Customer analysis

- Competitor analysis

Step 3: Internal analysis (IFE)

Step 4: SWOT analysis

Step 5: Assess and select the strategy (PSQM, TAS…)

1.3.1 Analysis of Mission and Vision of company

The first step of building a marketing strategy is to analyze the mission or vision of the company this is because the mission and vision will provide the direction for the marketing strategy

Mission will provide the reason why the company is in business It is what the company is created to do An example is the mission statement of Vinamilk from Vinamilk website is: ―To deliver the valuable nutrition to community with our respect, love and responsibility.‖

Vision is the long term image, or goals that the company wants to archive Vision will provide the company with a direction

After determine the mission and vision, we continue to next steps in building strategy that is external and internal analysis

1.3.2 External analysis

To build marketing strategy, we must first understand the environment to identify the key factors, the opportunities and threats from the environment to the company External analysis can be done at many levels like: macro level using PEST analysis, industry level using five-force model The purpose is to identify the factor and then we build the EFE (external environment factors) matrix

In marketing we can divide in another way, we divide analysis to: Market analysis, competitor analysis and customer analysis This way of dividingis to make

it easier to emphasize on important factors for marketing strategy Example: We can find that market analysis will include PEST, 5 force models and some other factors like market size, market growth rates to make the analysis more detailed

In the following paragraphs, we will details about each of this analysis model

PEST analysis (political, economic, social and technological):

PEST analysis describes a framework of macro-environmental factors used

in the environmental scanning component of strategic management Sometimes we add Legal and Environment factor analysis and call it PESTLE analysis

Five Force Model

Figure 1.4 Five Force Model Market Analysis

Market analysis is important for making a plan It contains political factors, economic factors, social-cultural factors and technology factors (PEST) These factors directly affect the market performance Aaker and McLoughlin (2010, 60) indicate that market analysis has two objectives The first one objective of a market analysis is to ensure a strategy to attract the current and potential customers in the market The second objective of market analysis is to find out the dynamics of the market (Aaker &McLoughlin 2010, 60)

Gilligan and Wilson (2003, 341) believe that market analysis equals to the environmental analysis They give five stages of the analysis This process illustrated in Figure 1.3.4 Gilligan and Wilson (2003, 344) show the following steps:

1) Audit of environmental influences: To find out the types of environmental factors influences the company’s development and previous performance 2) Assessment of the environment

3) Identification of key environmental factors

4) Identify the competitive position which includes strategic group analysis and market share analysis

5) Identification of principal and to put the company in a strategic position

Figure 1.5 Five stages of environmental analysis

Source: Johnson and Scholes 1998,cited in Gilligan & Wilson 2003

Customer Analysis

Marketing is about finding and fulfilling customer needs, and customer analysis help us to understand customers and to serve customers betters Customers also help us in segment customers into groups (market segmentation) and choosing the target market (targeting)

Customer is a part of the marketing environment and analysis the customer behavior is very important The creation of the customer value is being emphasized

in the marketing concept in recent years (Alsem 2007, 73) Kotler (2000) indicates that customer analysis can be used for the market segmentation and to analyze the customer motivations Customer analysis studies to satisfy customer needs and desires through understanding how individuals, groups, and organizations select, buy, use goods, services, ideas, or experiences

Aaker and McLoughlin (2010, 26) describe customer analysis mainly by dividing the analysis into three parts The first one is segmentation They also point out that the segmentation means the identification of customer groups that answer differently from other groups to a product The second one is customer motivations

It helps researchers to consider the objectives of customers and to find out the reasons why customers change their mind The last one is unmet needs An unmet need means a customer need that is not being met by the existing products

Competitor Analysis

―Competitors are companies that satisfy the same customer need‖ (Kotler

2000, 223) Competitive analysis is a central element of the marketing planning process, with detailed attention paid to each competitor’s obvious objective, resources, capabilities, perceptions and competitive position and their marketing plans and individual elements of the marketing mix (Gilligan & Wilson 2003, 177) Aaker & McLoughlin (2010, 42) explains that before doing a competitor analysis, researchers should identify current and potential competitors After competitors are identified we should find and understand strategies of the The analysis of the strengths and weaknesses of each competitor or strategic is important (Aaker &McLoughlin 2010, 42) Alsem (2007, 131) points out beside that the

competitor analysis should obtain strengths and weaknesses of the competitors

1.3.3 Internal analysis

Internal analysis is important; this analysis is to understand the strengths and weaknesses of the company To do this analysis, we need to identify the factors that are company strengths and well and weaknesses of the company What are the core competencies, what are competitive advantages we have? These are the key question when doing internal analysis The purpose of this is to help us to build the IFE (Internal Factor Evaluation) matrix

Internal Factor Evaluation (IFE) matrix:

IFE is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business IFE matrix also provides a basis for identifying and evaluating relationships among those areas The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation

The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be utilized to evaluate how a company is performing in regards to identified internal strengths and weaknesses of a company

Figure 1.6 Example of an IFE matrix

1.3.4 SWOT analysis

SWOT analysis (alternatively SWOT matrix) is an acronym for strengths, weaknesses, opportunities, and threats and is a structured planning method that evaluates those four elements of a project or business venture A SWOT analysis can be carried out for a company, product, place or industry It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective When doing SWOT analysis, we usually create a matrix of 2 rows and 2 columns that lay down the factor of each category for strength, weakness, opportunities, threats

Strength and weakness in SWOT analysis will list down the factor belong to the company (internal factor) while Opportunities and Threats be the external factor (environment)

The factors that we use for SWOT analysis is from IFE and EFE matrix that

we have from the previous steps

Figure 1.7 SWOT analysis

A variety of SWOT is TOWS analysis which will list the company analysis, environment analysis and according action for each situation TOWS matrix is useful because it define clear action for each situation

Opportunities S-O strategy

How to utilize organizational

Figure 1.8 TOWS matrix

1.3.5 Assess and select the strategy

After doing all of the steps above, we should propose alternative strategies for the company Each of the alternatives will have some advantages and disadvantages It’s not always easy to choose an alternative; to select the alternative

correctly need to assess each alternative and docomparison One of the tools that

help us to do this is QSPM matrix

Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic

management approach for evaluating possible strategies Quantitative Strategic

Planning Matrix or a QSPM provides an analytical method for comparing feasible

alternative actions

QSPMhelps us to be able to calculate total score of (Total Attractive Score)

of each alternative to make better decision when choosing strategy.The Quantitative

Strategic Planning Matrix or a QSPM approach attempts to objectively select the

best strategy using input from other management techniques and some easy

computations

We build QSPM matrix for alternatives strategy by give a rating for each

Key factor in EFE and IFE matrix The rating for each factor is called ―Attractive

Score‖ (AS), the weighted score is called ―Total Attractive Score‖ (TAS)

By comparing the sum of TAS for each alternative, we can select the best

strategy Below is a sample QSPM matrix for a case of a medicine company with 3

alternatives

Figure 1.9 Sample QSPM matrix

Source: QSPM matrix for Pfizer, Sanjaya, Strategic management case – Pfizer, 2014

Chapter 2–CURRENT SITUATION OF VNSHOP MARKETING

In this chapter we will give information about the VNPay company, the

VNShop application and the current situation of the VNShop This chapter will

analyze and assess the current situation of the company

2.1.About VNPay

Vietnam Payment Solution Joint Stock Company (VNPAY) was formally

established in March 2007 by a group of founding stakeholders who were

experienced experts in doing business of utility services on banking and

tele-communication systems and business administration

Strategy of VNPAY is oriented to connect and cooperate with financial

organizations, banks and tele-communication companiesas well as online business

enterprises for establishment of a payment solution basing on modern means such

as mobile phone, internet and bank card system through various channels from

banks, tele-communication companies, enterprises and from VNPAY

With the objective to become a leading company in the electronic payment in

Vietnam, VNPAY has connected and cooperated with 32 banks, 6

tele-communication company partners and more than 40 enterprises to set up simple and

convenient payment solutions such as: Mobile Banking, Topup mobile phone

account - VnTopup, Bill payment – VnPayBill, eWallet – VnMart…

Message and commitment

"Simplifying the life" is the message and commitment that VNPAY makes

to community VNpay wish to cooperate with partners to develop a simple payment

method aiming at reducing social expenses, changing the habit of using cash among

most of the population At the same time, on the macroscopic aspect, VNPay hope

that the non-cash payment will be the background to promote and ensure the

success of e-commerce

―Simplifying the life‖ is also our objective of operation and business

direction in order to create practical values to support social consumption activities

and confirm our operation objective of bringing new utilities services to customers

The services which is currently provided by VNPAY to customers including:

Comment [A12]: Anh nên đổi tên chương này

thành phân tích và hình thành chiến lược cho công ty, sau đó kết hợp chương 2 và chương 3 CHương 3 nên

đi sâu vào các điều kiện và các bước cụ thể để thực hiện chiến lược đã được lựa chọn

Phần này em xin giữ cấu trúc em trinh bay theo guideline HSB

Giơi thieu Background Hien trang Giai phapt Chương 3 tương ứng ới phần giai phap

Comment [A13]: Tôi đã góp ý anh kết hợp vì

chương này nội dung rất ngắn, tất cả chỉ có 6-7 trang làm luận văn mất cân đối nghiêm trọng (chương 1 của anh hơn 30 trang, chương này chỉ có 6 trang) Nếu anh muốn giữ cấu trúc anh cần phân tích sâu hơn về thực trạng công ty và hoạt động Marketing của công

ty Anh có thể tiến hành phân tích theo các nội dung như segmentatio, targeting, positioning kết hợp với các hình ảnh số liệu, hình vẽ về công ty và hoạt động của công ty

1 Mobile Banking

VNPAY is currently the partner providing SMS Banking – Mobile Banking solution and SMS short number (8149) for many banks in Vietnam Bank only needs 1 connection to VNPAY to allow its customer to send/receive bank account related information by SMS on all of the tele-communication companies operators

in Vietnam

2 Mobile phone topup - VnTopup

VnTopup is the service for topup of mobile phone prepaid account (applying for all mobile phone operators in Vietnam) and postpaid account of Viettel and MobiFone subscribers This service has been deployed on Mobile Banking, Internet Banking and ATM of banks The amount of topup will be directly debited from customer’s registered bank account

3 Bill payment – VnPayBill

VnPayBill service allows customer to query and make payment for their bills, the payment amount will be directly debited from customer’s bank account Besides, customer can also make payment for the bills through Mobile Banking and Internet Banking channels, ATM of bank or register for auto-debiting of the regular bills

4 VnMart e-wallet

VnMart is an e-wallet developed by VNPAY to be a mean of payment for the transactions on e-commerce websites With the connections to banks of VNPAY, VnMart owners can topup from bank account to make payment for the online transaction on website http://vnpayment.vn owned by VNPAY or on the e-commerce websites having connection with VNPAY

5 Utility sim

Utility sim is a service provided by VNPAY and all mobile networks in Vietnam, it allows mobile subscribers become a selling point of prepaid phone topup, scratch card code, postpaid bill payment, insurance and other services…

Organization structure of VNPay

VNPay accept the typical organization structure of a joint stock company, the organization structure of the company is published in the website as below:

Figure 2.1 Organization structure of VNPay 2.2 VNPay Shop

VNPay Shop, a subsidiary of VNPay, is a new e-commerce company that sells products via the mobile applications running on iOS and Android platforms VNShop is entering the e-commerce and to succeed a good marketing strategy is important Without a good marketing strategy it is very difficult for the company to compete and have good position in the market

The application is just launched for 1 year and very new to audiences Customer without Internet banking application of the bank that support will mostly not know about this e-commerce mobile application There are advantages as well

as disadvantages when the application is bundled into banking application

Products and services: VNShop working to provide products to customer via mobile application Customer can buy products from VNShop application which is integrated to mobile banking application of Agribank

Channel of access (Place): At the moment customer only can access this via the mobile banking application of Agribank

Advantages of integrated to mobile banking: The application is exposed to a large number of potential customers When application is integrated into a famous bank it will have trust from customer and have visibility to a big number of bank customers Normally these are people who know how to use banking application

and will have more chance of buying online via ecommerce However this also create disadvantage, that is the application will limit itself, it cannot reach to the bigger groups of people who do not use mobile banking A big percentage of EC customersare still buying via web browsers and the commerce application provided

by third party companies VNShop not yet exposed to this group

2.3 Current situation of marketing activity at VNShop

At time of writing this thesis, VNShop has just started for just more than 1 year All activities are limited To analyze the current situation we look at situation from various views To have a systematic view, we will analyze in various categories that follow the 4P (Product, Price, Place, and Promotion) In more details

we will look at the following details:

- Market segmentation and target market

- Product offering (product)

- Current channel and potential customer (place)

- Communication and advertising (promotion)

2.3.1 Current segmentation and target

With the current target market company is targeting a number is 0.5 million customers (estimate from Google Play download count)who is using mobile banking of the bank Agribank When the application is ready and can deploy for 4 big banks, the company will have about 1.5million potential customers (this is based on assumption that about 0.5 million customer is duplicated in 4 big banks).This compare to 16.9 million user of mobile Ecommerce user is very small number There are other 15.4 million mobile users that we have not yet targeted The below picture show this