Establish marketing strategies at center for water resources technical and consultant

ACTUAL SITUATION OF MARKETING STRATEGY AT CENTER FOR WATER RESOURCES TECHNICAL AND CONSULTANT .... 62 2.4 Evaluation of actual situation of marketing strategy of the Center for Water Re

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

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS PHẠM VĂN HỒNG

HÀ NỘI - 2019

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 Management, and the laws for above-mentioned declaration

Date………

Secondly, I am extremely grateful to all of the lecturers from the Department of Business Administration - HSB for providing me with research methods and professional knowledge during the course, especially the active and creative research skills

My appreciation also goes to the teachers in the thesis review committee for giving me valuable ideas during my thesis completion process

My profound gratitude is also conveyed to my instructor for his helpful assistance and guidance This thesis could have never been completed without his enthusiastic counsel and support

Despite the efforts during the research period, there are still many limitations in the thesis I would hope to receive valuable comments from the teachers and co-workers to make this essay more complete

Thank you very much./

Ha Noi, 2019

INDEX

DECLARATION I ACKNOWLEDGEMENTS II INDEX III LIST OF TABLES VII LIST OF FIGURES AND CHARTS VIII

INTRODUCTION 1

1.Urgency of the subject 1

2 Overview of research situation 3

3 Research objectives 5

4 Research subjects 5

5 Research scope 6

6 Research Methodology 6

7 Structure of the thesis 6

CHAPTER 1 RATIONALE OF MARKETING STRATEGY DEVELOPMENT 7

1.1 Basic Definition of Marketing and Marketing Strategy 7

1.1.1 Definition of Marketing 7

1.1.2 Marketing Strategy 8

1.1.3 Role, importance of marketing and marketing strategy 8

1.2 Content Of Marketing Strategy 10

1.2.1 Research models 10

1.2.2 Product Strategy 11

1.2.3 Product price strategy 15

1.2.4 Distribution strategy 18

1.2.5 Promotion Mix Strategy 19

1.3 Procedure of Marketing Strategy Development 21

1.3.1 Setting Marketing goals 21

1.3.2 Macro-environmental analysis 21

1.3.3 Sector environment 22

1.3.4 Matrix evaluating external factors (EFE) 25

1.3.5 Micro-environment analysis 26

1.3.4 Develop Marketing strategy with SWOT matrix 28

CHAPTER 2 ACTUAL SITUATION OF MARKETING STRATEGY AT CENTER FOR WATER RESOURCES TECHNICAL AND CONSULTANT 31

2.1 Introduction of Center for water resources technical and consultant 31

2.1.1 General information 31

2.1.2 Organizational chart 32

2.1.3 Function, duties 33

2.1.4 Manufacturing and business status of the company 35

2.2 Analysis of the marketing environment at the Center for Water Resources Technical and Consultant 36

2.2.1 Macro-environmental analysis 36

2.2.2 Sectoral Environmental Analysis 43

2.2.3 Micro environment 51

2.3.4 Research and development capacity 57

2.3.5 IFE matrix 58

2.3 Analysis of the actual marketing strategy situation of the Center 60

2.3.1 Product strategu 60

2.3.2 Price strategy 61

2.3.3 Distribution strategy 61

2.3.4 Mixed promotion strategy 62

2.4 Evaluation of actual situation of marketing strategy of the Center for Water Resources Technical and Consultant 63

2.4.1 Achievement 63

2.4.2 Limitations 64

CHAPTER 3 PROPOSAL OF MARKETING STRATEGY FOR THE CENTER FOR WATER RESOURCES TECHNICAL AND CONSULTANT 3.1 Development orientation of the Center for Water Resources Technical and Consultant by 2025 65

3.2 Proposal of marketing development for the Center for Water Resources Technical and Consultant by 2025 66

3.2.1 Proposal of marketing development for the Center for Water Resources Technical and Consultant by 2025 66

3.2.2 Strategy implementation method 69

3.3 Some recommendations to the State 80

3.3.1 Renovate the financial mechanism of the State capital management 80

3.3.3 There should be a clear policy of the relationship between the State and the organization 81 CONCLUSION 83 REFERENCE DOCUMENT 85

LIST OF TABLES

Table 1.1 : Product status and appropriate promotion strategies 20

Table 1.2: EFE matrix summary table 25

Table 1.3: IFE summary table 28

Table 1.4: SWOT matrix model 30

Table 2.1: Manufacturing and business status of the Center 35

Table 2.2: Some Regulations on Environmental and Water resource protection 39

Table 2.3: Number of the customers of the Center annually 47

Table 2.4: EFE matrix synthesis 50

Table 2.5: Human resources of the Center 51

Table 2.5: Machinery system 56

Table 2.6: IFE matrix 58

Table 2.7: Some products and services provided by the Center 60

Table 3.1: SWOT matrix synthesis 67

Table 3.1: Estimated budget for strategy implementation 76

LIST OF FIGURES AND CHARTS

Chart 1.1: 5 competitive pressure model 23

Diagram 2.1: Number of industrial zones in Vietnam at the present 37

Diagram 2.2: Number of current competitors in the market of the Center 44

Diagram 2.2: Organize the project implementation site of the Center 54

Image 2.1: Equipment, tools for analysis, research and development 58

Diagram 2.3: Marketing activity of the Center 63

Diagram 3.1: Organizatoin chart of the expense mangement division 73

Image 3.1: Some construction equipment 77

Image 3.2: Specialized machinery 78

INTRODUCTION 1.Urgency of the subject

Water resource is the foundation and development of society, playing an essential and vital role to human life In the globalized world, with climate change and environmental pollution in general and water resources in particular, water pollution, degradation have been the global issues, common concerns of the whole human race Therefore, water resource is really important and indispensable to every citizen, business, country and is subject

to dispute in many parts of the world For that reason, the Ministry of Natural Resources and Environment has promulgated the Decision No 1168 / QD-BTNMT, establishing the units under the Ministry, including the Center for Water Resources Technical and Consultant; The Center for Water Resources Engineering and Consultancy is a public non-business unit of the National Center for Water Resources Planning and Investigation (NAWAPI) under the Ministry of Natural Resources and Environment, having the function of building, managing and deploying techniques and technologies on planning, investigation, protection, exploitation and use of water resources; providing and consulting public services on water resources for domestic and foreign organizations and individuals according to the provisions of law;

Based on the sustainable development orientation of Vietnam in the 21st century, the 2011-2020 socio-economic development strategy appreciates the role of water resources, considering water resource as an important and strategic resource

In recent years, the economy of our country has seen positive changes However, through objective assessment, it can be been that the public debt of our country has reached a high level, politics and domestic and foreign market economy remain many complicated developments; The Party and the

of public expenditure policies Especially the Government requests the ministries and branches to advocate equitisation of SOEs (State Owned Enterprises), Public non-business units, organize bidding of the projects and schemes using state budget funds in a public and democratic way; As a result, the competitive market in all sectors will occur Especially, the units under the Ministry using the state budget to maintain and survive so far will be gradually eliminated

As a matter of fact, it is really important for the Center for Water Resources Technical and Consultant to develop marking strategies by 2020 with a vision of 2030 in order to remain the position with its competitive capacity This is very urgent and suitable with the development trend of the industry and the market in Vietnam

To meet above-mentioned needs, according to the assigned functions and tasks, the Center for Water Resources Technical and Consultant shall develop marking strategies by 2020 with a vision of 2030 for the development and promotion of the brand names and new technology products with high quality

to the domestic and foreign market, from which building the marketing strategies suitable with the competitive and international integration market economy Development of marketing strategies will be the guideline for all activities of the Center, aiming to the objective of becoming a prestigious and growing unit in the competitive by 2030 in the domestic competitive and

international integration market in the field of water resources, "keeping pace

with the big Groups, Corporations in the region and being asymptotical with the international reputation Groups and Companies

From above perceptions and urgent requirements, the author selected the

topic “Develop marketing strategy at the Center for water resources technical

and consultant” as a research topic for master thesis

3

2 Overview of research situation

Building an effective marketing strategy is really important for all enterprieses A business plan will orient the company to develop while the marketing plan will help the company know how to implement that business plan by creating a relationship with the customer step by step There have been many studies related to the development of marketing strategies of the enterprises, organizations as follows:

+ Master’s thesis on Business Administration thesis on "Building business strategy of Dong Hai Joint Stock Company of Ben Tre in the period

of 2015-2020" by Luu Vinh Hao (2014) In this study, the author combined the theory and practice of the company to develop a business strategy for Dong Hai Joint Stock Company of Ben Tre and suggest solutions to meet the company's strategy in the period 2015-2020

+ Master’s thesis on Business Administration thesis on "Building business strategy at Hanoi Synthetic Paint Joint Stock Company in the period

of 2013-2017" by Nguyen Thi Tuyet Nhung (2013) This thesis focused on studying the business environment and the actual situation of Hanoi Synthetic Paint Joint Stock Company, from which building the business strategy for the company Business strategy is oriented and outlines ways to help build a concrete plan to achieve the desired effect

The thesis used statistical analysis and synthetic analytical methods, from which assessing actual manufacturing and exporting situation of the enterprise The author summarized environmental factors and identified strategic opportunities On the basis of applying theory and rationale to set appropriate business strategy

Master’s thesis on Business Administration thesis on "Building business

period of 2017-2025" by Nguyen Ba Cuong (2016) The research has assessed the overall situation of production and business of Vinamilk, found out advantages, weaknesses, opportunities and threats From that, the author has developed the business strategy of the company until 2025 In this research, the author has applied the learned knowledge into real practice for the most effective development of business strategy for the company

Research on "Building business strategy of Truong Son Construction Corporation till 2020" by Nguyen Hai Son (2014), Finance Magazine No 3 -

2014 Truong Son Construction Corporation (Army Corps 12 - The Ministry

of Defense), a unit to succeed the tradition of Truong Son Army Corps - Ho Chi Minh Trail - A legendary trail, founded on 19th May 1989 As a large state-owned enterprise in the construction industry, in the centralized, bureaucratic and State-subsidized mechanism, the enterprise is also dominated by bureaucratic mandates Due to the dependence on the State and the Ministry of Defense, the unit has been lacking for flexibility in developing business strategy and orientation for business development and remaining passive in dealing with employment Therefore, the research plays an important role in helping the Corporation to strategically and effectively implement its business activities

Tran Thi Anh Tuyet (2016) conducted the research on "Developing marketing Strategy for Haiha-Kotobuki Joint Venture Company Limited in the period of 2017-2020" In the study, the author gave an overview of the theory of strategic management and built marketing strategy, carried out analysis of marketing environment, built SWOT matrix for the marketing strategy, analyzed and selected target markets, defined marketing objectives, built marketing strategy and developed action plan for the marketing plan based on the research results of the company

Nguyen Van Dung (2015) conducted a research on "Building Marketing Strategies at Duc Tran Co., Ltd" The purpose of the study is to systematize theories of marketing strategy and actual situation of the enterprise, analyzed the basis of marketing strategy for Duc Tran Co., Ltd, from which giving proposals for marketing strategy suitable with the company's development goals in the period of 2015-2020 Key contributions of the research include clarifying systematize the theoretical issues on developing marketing strategies in the enterprise, analyzing the basis to develop marketing strategies

at Duc Tran Company, suggesting marketing strategies at Duc Tran Co., Ltd

in the period of 2015-2020

Pham Thuy Hong (PhD Thesis in 2011), in her thesis of "Developing Competitive Strategy for Vietnamese SOEs", has outlined the competitive strategies for SOEs but has not yet come to specific conclusion and strategic methodology in terms of development of business strategy as well as marketing strategy

There have been a lot of projects on building marketing strategies for the enterprises but there has been no research on "Developing marketing strategies at the Water Resources Technical and Consultant" Thus, scope of research space and time of the thesis is not coincided with published works

3 Research objectives

- Systematize the theoretical issues of marketing strategy

- Analyze actual situation of the development of marketing strategy at the Center for Water Resources Technical and Consultant

- Propose marketing strategy for the Center for Water Resources Technical and Consultant

4 Research subjects

Theoretical and practical issues on developing marketing strategy at the

5 Research scope

Scope of content: Study the basic contents to build the marketing

strategy for the state unit in the context of the current market economy

Scope of space: At the Center for Water Resources Technical and

Consultant

Scope of time: Collected survey data from 2015 - 2017

6 Research Methodology

6.1 Data collection methods

Secondary data is collected from sources: Ministry of Planning and Investment, Center for water resources technical and consultant in order to collect the factors affecting the internal environment and the external environment affecting develop marketing strategy at the Center for water resources technical and consultant

Primary data is collected by investigating the experts work at Center for water resources technical and consultant to build EFE matrix synthesisa and IFE matrix synthesis Thereby, The author draw level reaction center for water resources technical and consultant with the environment The number

of experts that the author surveyed is 20 people

6.2 Method of processing data

Data after collection will be processed and calculated by Excel software for statistics in the form of tables Thereby, the author will easily analyze and evaluate

7 Structure of the thesis

The thesis is divided into 03 chapters with the titles of each chapter as follows:

Chapter 1: Rationale of Marketing Strategy Development

Chapter 2: Actual Situation of Marketing Strategy at Center for Water Resources Technical and Consultant

Chapter 3: Proposal of Marketing Strategy for the Center for Water Resources Technical and Consultant

CHAPTER 1 RATIONALE OF MARKETING STRATEGY

According to Chartered Institute of Marketing, “Marketing is the process

of planning and executing the business from detecting and transferring purchasing power of the customers into real demand on a specific good to producing and giving the products to the final consumers in order to bring expected profit to the company”

According to AMA’s definition, “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives

According to I Ansoff, a marketing expert from the United Nations,

“Marketing is the science operating the entire business from manufacturing to consumption, basing on fluctuation demand of the market or in orther words, focusing on market as an orientation” This concept is considered as an

adequate perception, presenting modern marketing mind by many researchers and is widely accepted

1.1.2 Marketing Strategy

In order to do business efficiently, increase competitiveness and optimize profits, the enterprises should conduct information surveys on consumer demand with their products as well as their competitors market potential Basing on collected information, the enterprises conduct market segmentation, select key markets and combine marketing tools Through setting marketing strategy, the activities of an enterprise are conducted in an oriented procedure appropriate to the market characteristics of the business Marketing strategy of the business can be understood as follows:

“Marketing strategy is a logical, logical argument, being basis for a unit

to solve its marketing tasks Marketing strategies include specific strategies for each target market and each customer segment." (Philip Kotler)

Marketing strategy is the systematically comprehensive combination between mixed Marketing and key market Mixed marketing parameters are developed and targeted to a specific customer group (target market)

Marketing Mix is a set of variables that the business can control and manage The components of Marketing Mix include: product, price, distribution and promotion strategy

Thus, Marketing is the is the outline of how businesses allocate resources to achieve business goals, exploit and utilize current strengths and competitive tools They can be products, service, personnel or image of the business And through the coordination of price fixing, advertising, product design and distribution activities, the company can achieve a dominant position in compared with other competitors, persuading the related parties and at the same time orienting the product to reach the target

1.1.3 Role, importance of marketing and marketing strategy

In business, marketing as well as marketing strategy plays a very important role Marketing is a bridge between buyers and sellers, helping the sellers understand the true needs of the buyers and satisfy them in the best way Based on the objectives of the organization, management members will develop a relevant marketing program that includes analysis of marketing opportunities, research and selection of target markets, marketing strategies, marketing plans and execution and testing of marketing efforts

+ Marketing and marketing strategies are utilized to solve basic economic problems of business, including:

Firstly, identify type of product that the company needs to supply the market

Secondly, arrange product delivery processs carefully with the simultaneous participation of the three elements of technical including infrastructure, direct staffs and customers

Thirdly, the handle harmoniously of beneficial relationships among the customers, employees and management side

Addressing these issues will help to motivate the operation of the business, from which maintaining and developing the relationship between the business and customers

+ Marketing and marketing strategy become the bridge connecting the operation of the business to the market

One of the important tasks of marketing is to create a competitive position

in the market The process of creating a competitive position of the business is closely related to the development of the products in the target market Specifically, Marketing and Marketing Strategies have the following roles:

First, create the uniqueness of the product

Second, clarify the importance of the distinction to the guest

Third, create the ability to maintain the advantage of the distinction of the business

Through identifying and maintaining the advantages of the distinction, marketing and marketing strategies help the businesses develop day by day and improve their competitive position in the marketplace

The importance of marketing strategy in the enterprise

To survive and develop, the businesses need to set business goals and try

to achieve those goals When managing work based on experience, intuition can not guarantee success, strategic planning for all business activities is essential The strategic plan will help the business better understand its goals and direct the coordination of the activities more perfectly Strategic planning helps the managers to think about business issues systematically, bringing about positive changes

As part of the overall strategy of the business, the marketing strategy demonstrates the entrepreneurial endeavor to achieve a desirable position on the competitive position and the fluctuation of the business environment Only when the marketing strategy is set up can the entrepreneur's marketing activities begin synchronously Marketing activities begin from studying, identifying internal and external factors, evaluating internal condition, from which developing policies on products, pricing, distribution and promotion to achieve the intended goal

Thus, marketing strategy is an important tool that every business needs

to build This is the first job to develop a marketing program of the business, serving as a basis for organizing and implementing other activities in corporate governance in general and marketing management in particular

1.2 Content Of Marketing Strategy

1.2.1 Research models

The thesis approached researching under 4P marketing model which is commonly used in the enterprises Accordingly, 4P research model includes the following strategic content: Product strategy; Price strategy; Distribution

strategy and promotion strategy

Image 1.1 : Research model of the thesis

The specific content of the strategies in the research model is presented

as below

1.2.2 Product Strategy

* Product definition

- According to traditional point of view, a product is a synthesis of

observable physical and chemical properties in a uniform manner and usable thing In the field of manufacturing, the product contains two attributes, including value and using value

- According to Marketing point of view, A product is anything that can

be marketed to create attention, procurement, use, consumption for the purpoe

of satisfying a request or desire They can range from objects, services, people, places, organization to ideas, etc

Today, consumers who buy a product pay attention to not only using value but also many other aspects of the product such as elegance,

Thus, understanding of products from the perspective of marketing is more broad, helping businesses to research the product, from which outlining more complete and effective strategy

* Components of the product

- Core Part of the Product answers the question "What do the buyers

really want to buy?" Consumers are often interested in certain benefits of each product This is the product on the idea

- Realization Part of the Product is the basic form of the product,

including 5 elements such as characteristics, labels, packaging, quality, design

of the product

- Supplemental Part of the Product in cludes additional services and

benefits that distinguish it from the competitor's product It includes accessories, service places, after-sales service, warranty, delivery

* Product strategies

In the increasingly competitive conditions along with the development

of science and technology and information systems, besides price factor, customers also pay attention to other factors such as quality, design, service

In addition, according to the current business trend, the enterprises not only try to meet customers’ demands but also aim to orient and stimulate demands More specifically, they produce the products that go ahead of existing needs

Meanwhile, Marketing must determine what to produce, how to produce and how to sell the products That’s why the product strategy is the foundation and the first step in the production and business process, requiring the enterprises

to have creative mind and sophisticated observation, not only aiming current market but also predicting future market, from which offering market with the products meeting the rich and constantly changing needs of customers

Product strategy is quite broad and includes following main directions + Category strategy

Since the market is always changing with time, space, gender, age, occupation, income, a business can not develop stably and sustainably with only one type of product since it will be very difficult to avoid the risk Therefore, the enterprises must have a reasonable product category strategy, including

- Product Brand Repositioning Strategy : No matter how well a product

has been positioned in the market, the manufacturer must reposition it for a while Competitors may have launched an identical product and encroached

on the market share of the company Either the taste of the customer has changed or the product is no longer suitable with the taste of the consumer Repositioning may require a change of both the product and its image or only the image of the product When repositioning a product brand, the marketers must make sure that the product's new location remains consistent with the original location By this way, the business can retain their old customers while attracting more new customers in order to maintain and develop the existing market

- Strategy of expanding or cutting product types : Brand expansion

strategies are efforts to use a successful brand name to launch new or innovative products Expanding the brand name helps the enterprise to save fees for advertising new brand name.At the same time, the new product is rapidly accepted by the market

In contrast, during the business, feedbacks from the market helps the businesses to identify products being preferred by consumers and the products to

be eliminated From which, the enterprises can decide to cut down ineffective products, saving resources to focus on developing effective products

- Product modification strategy : Product modification allows the

emanufacturers not to produce entirely new products Businesses can create a new product on the basis of modifying the existing products The modification

etc In many cases, the technical characteristics of the product still remain the same while only the change in packaging can also bring the manufacturers opportunities of large consumption such as some canned products

+ Strategy on product quality

There are three kinds of product quality strategy:

- Strategy to improve product quality: This strategy is implemented in

technical aspects of the product, including improving the parameters of durability, safety, life of the product ; changing the style, size ; paying special attention to the color, taste of the product; changing fabrication materials; limitting or removing deffective components or the component less relevant

to the public; replacing with the components appropriate to the customers; enhancing the application of goods such as easy to use, easy to maintain, easy

to buy spare parts

- Strategy to maintain product quality: Many companies maintain the

original quality of the product unless there are obvious mistakes or new tastes requiring changes

- Strategy to gradually reduce the quality: Some companies initially

introduced new products with very good quality After resonating and occupying a significant market share, they begin to reduce quality to compensate for higher costs with the hope that buyers do not recognize the difference This might help to increase current profit but will inevitably affect long-term profitability

- Strategy to diversify or innovate the product : This strategy aims at

developing new products for current market or developing new products for new markets In general, during the development phase of the enterprises, renewal of product categories make the volume of consumption increase, helping the enterprises to improve their market share in current market and attack new segments of the market or expand other markets This strategy also

extends the ability to meet the different needs of the consumers, limiting the rapid deterioration of the product

The essence of the product strategy is to the flexiility, quick response and timely decisions, ensuring that new products are always availble in case

the market is stagnating

1.2.3 Product price strategy

Price is an indispensable factor in the marketing strategy of the business For the consumers, price plays a decisive role in buying this product or another product As for businesses, prices are particularly important in the reproduction process because it is the last stage that reflects the results of other stages There are many factors that affect price decisions such as

- Internal factors: Based on the strategy, target of the company on the

direction of activities such as marketing, pricing, distribution methods

- External factors: Business environment, competitiveness of the

competitors, alternative products, demand and supply capacity

* Product pricing methods

- Cost-plus pricing: This is the simplest method in which the company

adds a standard markup to the cost of the product The profit margin varies by product type

- Target profit pricing: This pricing method is based on break-even

analysis With this pricing method, the manufacturer must consider different prices and estimate the breakeven output, possibility of demands and the profitability of the product unit to determine the feasibility of the target profit

- Buyer-based pricing: This is the method of pricing according to the

customer perception of the product in stead of the cost of the manufacturer Customer perceptions of the value are the key to this pricing method

- Competition-ased pricing: This pricing method is based entirely on

the competitor's price without paying much attention on the cost and demand

of the market The company can set a price which is same, higher or lower than the competitor This pricing method is the most common for the markets where price elasticity is difficult to measure

* Some strategies of product prices:

+ Price discrimination policy

When differentiating prices for different products, enterprises should base on the following factors:

- Product quality: Based on the quality level, classify the prodducts into different level and implement pricing products accordingly

- Time of consumption: With the products of which production and consumption vary widely between times of the day, days of the week, weeks

in months and months in the year, Differentiate by consuming time to stimulate production and balance the supply and demand relationship of the product at all times

- Market and consumption areas: Based on the characteristics of each market and specific area, the enterprises need to apply differentiated prices to each product when consuming in different markets such as traditional market

or a new market, a city market or a rural market

- Purchasing Volume: To encourage the buyers to purchase with a large consumption, discount rates should be applied It means that on the basis of the retail price, set a discount rate for the buyer according to each specific volume

- Terms and conditions of payment: Customers making the payment before due date will be offered cheaper price than the delayed customers

- Target customers: Customers can include many different types However, with special customers, such as long-term customers or new customers who are

able to purchase regularly, preferential prices, which are lower than normal prices should be applied in order to build strong relationships

Through price discrimination policy, businesses will stimulate buying and selling for different demand groups and customers At the same time, covering arisen costs of producing higher quality products or the transportation of products to different locations is still ensured

+ Pricing policy for new products

- Market-skimmingpricing: A strategy in which businesses place high

prices on new products so that only a few segments can accept Once the consumption starts to reduces, the company shall reduce the price of the products to attract customers By this way, the company can achieve a high profit margin from its original segments This strategy can be applied with below conditions:

+ The quality and impression of the product must be consistent with the high price;

+ Enough customers to accept higher prices;

+ Competitors meet difficulties in entering the market

- Market penetration pricing: With this strategy, the company set the low

price with the hopes of attracting more customers to gain a large market share Low pricing will be favorable under the following conditions:

+ The market is very sensitive to price, low price will help to expand the market;

+ Production costs are inversely proportional to production;

+ Low prices will not stimulate competitors

+ Price change policy

- Discount policy: Enterprises shall implement price reduction policies in

the following cases:

+ When the company does not use up its production capacity, it has to speed up the turnaround in many ways such as trade efforts, product improvement and other measures, but the company does not have enough capacity

+ When the market share is shrinking due to intense proce competitive pressure and when the company wants to use low prices to win market dominance

- Price increase policy: Although knowing that price increases will

create some negative reactions from many sides, businesses still raise prices

in some cases such as high inflation; demand for products is too great; With new products, improved technical products or added value services enclosed with the products

1.2.4 Distribution strategy

Determining a appropriate distribution strategy will help the businesses bring their products to the consumers following set targets Reasonable distribution channels will contribute to improving the efficiency of the business

- The selection of distribution channels based on the following factors: + Characteristics of the market;

+ Characteristics of the products ;

+ Financial capacity, supply source of the input products

* There are three basic distribution strategies

- Exclusive distribution strategy: This strategy restricts the number of

mediators, using only one location to sell or install the product and specifying the mediators not to sell the competitor's products

With this strategy, the company expects the sellers to have more product knowledge and be more active in selling the product In addition, exclusive distribution strategies help to increase product impression and bring higher returns

- Selective distribution strategy: With a selective distribution strategy,

the number of manufacturers exceeds the number of exclusive distributors

Manufacturers do not cost much to cover the whole places of consumption products

- Extensive distribution strategy: The widespread distribution strategy

finds as many places to consume as possible because customers need convenient sales locations Producers then will lose control right of the arrangement

1.2.5 Promotion Mix Strategy

This is one of the four mixed marketing strategies of enterprises to inform value of the products and persuade customers to buy products

Promotion mix strategy includes

- Advertising is a method that helps the enterprises build a long-lasting

image of the organization, making the brand become outstanding In addition, the promotion also helps to propagate, explain about the products and enclosed services Strategy planning focuses determining the right media, audience, frequency, etc

- Sales promotion is the use of various means to promote the need and

ability to sell products to customers, to salespersons

A promotional strategy is developed basing on the product's status in the market and the targeted objectives of the product strategy, specifically as

following table :

Table 1.1 : Product status and appropriate promotion strategies

Customers do not pay attention to

the product characteristics as well

as do not understand how the

product will benefit them

Product launch strategy: Inform

and persuade potential customers that the product is available in the market,how to use it and how

it benefits the customers

Customers pay attention to product

benefits The product is being sold

well in the market

Growth strategy: Stimulate selective demand when making competition Advertising need to

be emphasized

Intense competition and stable

revenue

Mature strategy: Advertising is

used to convince more than just

to provide information The drastic competition forced the company to increase the cost of advertising and accept to reduce profits during this period

Turnover and profit are declining

New and better products are

entering the market

promotion efforts should be significantly reduced It is used

to keep your customers only (if any)

Marketing does not have a standard formula to combine marketing factors to achieve success Marketing strategies must be different for each business, product market, and specific situation As the relationship between the business and the environment is constantly changing, the marketing

strategy is required to be dynamic and always adjust and supplement appropriate measures to cope with the changing environment

Thus, a marketing strategy must identify the target market so that it can locate the product and establish a mixed marketing strategy that fits that target market

1.3 Procedure of Marketing Strategy Development

1.3.1 Setting Marketing goals

Marketing goals are usually driven by the goals of the organization, in case the business is fully marketing oriented, the two target groups are identical Marketing goals are often given as performance standards or tasks

to be achieved at a certain time

These goals provide a framework for implementing marketing strategies Marketing goals are based on analyzes of the market's capacity and the marketing capabilities of the company These analyzes are based on product-related data, competitive markets and marketing environments, from which drawing on the potential of the market to be exploited and select the target

ideas appropriate to marketing capabilities of the business

1.3.2 Macro-environmental analysis

- Economic environment: Economic development or economic recession,

changes in the rate of inflation, prices, unemployment, income and resources, credit policies all affect the operation of the enterprises There are many companies doing business unsuccessfully despite their good planning as they cannot anticipate or ignore the changes in domestic and global economic conditions

- Techonology environment: It can be seen that technology is the basis

of market competition Technology has a great impact on the products available in the market Technology also determines the manufacturing process of the enterprises

- Political-legal environment: Politics and legal issues are the two sides

doing business are directly influenced by these factors none better than any others Political factors at all levels of local government affect the operations

of companies However, the prominent thing is the role of the central government Political institutions have a great influence on a country's policies in terms of economic and society, by which the business organizations are bound In addition, legal factors are seen as the benchmark for the performance of business firms They are the factors that influence day-to-day operations of the companies and the companies need to pay close attention to these factors

- Socio-cultural environment: Businesses need to broadly analyze social

factors in order to identify opportunities and risks that may arise However, social factors (such as anthropological trends, preferences, ethical standards and views on living standards, etc.) often change or evolve slowly so it is often difficult to identify them When analyzing the influence of social factors

on the strategic planning of the enterprises, it is necessary to analyze the following factors:

Quality of life, entertainment preferences of the social class

Ethical standards and lifestyle

Situation of human resources such as female labor force, labor reserve situation

Culture and occupation level of the population and employees

Cultural traditions and social customs

Religions, the role of religions in social life, religious conflicts

Demographic situation: population growth rate, population structure

1.3.3 Sector environment

The micro environment consists of internal sector factors and acts as external factors to the business, determining the nature and extent of competition in the business industry According to M.Poter, there are five

basic factors, including competitors, customers, suppliers, potential new competitors and alternative products These factors are interrelated and interacted, affecting the business operations of the business In order to set a successful marketing strategy, key factors must be given into analysis Understanding these factors helps the business realize its strengths and weaknesses in relation to the opportunities and risks of the business

Chart 1.1: 5 competitive pressure model

Source: Micheal Porter, 1996 Current competitor

Current competitors are the enterprises operating in the same business sector with the enterprise and under seeking to increase sales revenue, profits through policies and measures that create disadvantages to the enterprise Due to the limited market size, businesses "compete" for market share through reducing prices, advertising, promotion, persuading customers, improving product quality, creating the differences in product supply, creating value for customers

and experiences Once appearing, they will compete with the business on three sides:

- Winning consumption market of the products with many different tricks

- Buying materials with more flexible and attractive policies,

- Attracting qualified and skilled workforce through competitive incentive policies,

Suppliers

Businesses providing components for manufacturing such as machinery, equipment, spare parts, transportation services, etc can also create price pressures, supply methods and payment methods threatening the profits of the company But these suppliers also create good business opportunities for the company Competitive advantage in supply chain, strategic alliances, supply contracts are solutions to reduce the pressure of this environmental factor

Alternative products

A product or service satisfying customers’ needs in the marketplace does not mean the unique products or service and cannot remain that role for a while One day there will be a replacement product Other manufacturers can also meet the current needs of the customers using the product of the business These alternative products are usually developped with the improvement, innovations and application of new achievements in science and technology

so that they have the advantages of better satisfying the demand of consumers while the prices are cheaper

The pressure of the new alternative product limits the profitability of existing products and reduces the market share of the business To limit the impact of this risk, businesses must invest properly in research and development

Customers

Customers are the buyers of the products of the business and important factors of business activity The enterprises must ensure the benefits of the

customers and seeek for all measures to meet the highest satisfaction of customers about the quality of products

In addition, for the most effective business strategies, besides paying attention to the quality of products, meeting the tastes and needs of customers

is also very important To study the tastes and needs of the customers, the enterprises should consider following issues:

- Customers have the habbits to choose the products according to which methods?

- Customers’ habbits of using products

- Customers’ awareness using products

1.3.4 Matrix evaluating external factors (EFE)

EFE matrix is a model used to evaluate external factors, summarize the major opportunities and threats of the external environment that affect the operation of the business This helps the business executives assess the level

of response of the business to the opportunities and threats and make conclustion whether external factors are favorable or difficult for the

Company Steps to set up matrix:

Table 1.2: EFE matrix summary table

External factors Importance level Phân loại Importance

Source: Nguyen Thi Lien Diep (2006)

- List the major risk and opportunity factors which are believed to affect

- Classify the importance on a scale of 0 (Unimportant) to 1 (very important) The importance of each factor depends on the level of influence

on the business of the business

- Determining the weight from 1 to 4 for each factor, the weight depending on the level of response of the company to each factor

- Multiply the importance to each factor and its weight to get the corresponding score

- Plus the score of all the factors to get total score of the matrix

The higher the total score is, the better the company responds to the

opportunities and threats

1.3.5 Micro-environment analysis

Analyze internal factors to find out the strengths and weaknesses of an enterprise by assessing key factors of the company such as finance, accounting, human resources, production, and the relationship among these factors From which, the company will set its goals along with external opportunities and threats to take advantage of strengths and overcome weaknesses in business

Evaluate the production capacity and operation of the enterprise

For the production process, the layout of the machinery must be carefully assessed It affects the rationality of transport, storage, smoothness

of the system, the synchronization of machinery and equipment, etc Therefore, manager of the workshop, production control management members must identify exacly level of rationalization in machinery placement

at the company The higher the level of rationality is, the more likely it is to contribute to the improvement of work efficiency and productivity Vice versa, those targets will be reduced accordingly If there is a separate allocation of machines or capacity differences among the departments, causing finished goods to be transferred in a long distance or stored in bulk

Also, if there is a large numbers of unused machinery and equipment, it is difficult to assess the reasonable arrangement of machinery and equipment in the company Thi assessment is to detect and document those influence factors for the management activity

Evaluation of the human resource management level of the enterprise:

Taking care of the employees is the best way to attach them to the company

It is essential to have studies to study whether time and passion in the work is appeared during business operations of the business These studies will give us insights into the mind, attitudes, changing behaviors of the employees in their work so that the enterprise can develop timely responding measures

Evaluation of research and development

Research and development help the enterprises not only consolidate their current position but also reach higher positions in the industry, gaining real growth The higher the role of research and development in the current period

is appreciated, the more important it is to assess the level of performance in the enterprise Almost Vietnamese businesses do not have a department being responsible for this task This is a challenge to these businesses They need to have specific plans to conduct this type of work In order to carry out research and development, a great deal of equipment is needed, especially in high-technology manufacturing and financial resources This step implementation can not be considered as good if the enterprise does not have enough equipment for this it

IEF Matrix of internal factors

Internal factors are very important issues affecting the development of business strategies of the enterprises However, that how the strategic planners accurately assess the strengths, weaknesses and responsiveness of internal factors

to the changes is much more important IEF Matrix of internal factors is often

Table 1.3: IFE summary table

External factors Importance level Phân loại Importance

Source: Nguyen Thi Lien Diep (2006)

- List the strengths and weaknesses that affect the business

- Classify the importance on a scale of 0 (Unimportant) to 1 (very important) The importance of each factor depends on the level of influence

on the business of the business

- Determining the weight from 1 to 4 for each factor

- Multiply the importance of each factor and its weight to determine the score of each factor

- Plus the score of all the factors to get total score of the matrix

The higher the score of the matrix is, the greater the probability that internal factors will respond to the challenge is

1.3.4 Develop Marketing strategy with SWOT matrix

After analyzing internal and external factors, next step is to develop marketing strategies In order to develop an organizational fit strategy, the SWOT model is often used by the enterprises to analyze the strengths, weaknesses, opportunities and threats to the organization

Strength is an activity that the company can do well or a competitive

strength of the company, including

- Valuable capacity, business secret;

- Valuable asset

- Valuable human resource

- Advantage of low price thanks to specific business secret

- Easy access to high-end natural resources,

- Easy access to distribution networks

Weaknesses: The absence of strengths is considered as a weakness The

following characteristics may be considered as weaknesses:

- Lack of brand, know-how, experience or capability

- The customer thinks that there is a bad reputation,

- High cost of operation,

- Little access to natural resources,

- Little access to key distribution channels

Opportunities: External environmental analysis can reveal new

opportunities for generating profit and growth, including

- Customer needs are not fully satisfied,

- The emergence of new technology,

- Losse regulation,

- Removal of international trade barriers

Threats: Changes in circumstances, external environment might cause

threats to the business such as

 Tastes of customers change from the company's products to other

products,

 Appearance of alternative products,

 New legal provisions,

 Stricter barrier of international trade

Table 1.4: SWOT matrix model

SWOT matrix O: Main opporunities T: Main threats

S: Main strengths S-O: Strategies to combine

strengths to take advantage

Strengths – opportunities strategies (SO): These strategies use the internal strength of the business to take advantage of outside opportunities Weaknesses - opportunities strategies (WO): WO strategies aim to improve internal weaknesses by taking advantage of opportunities from the external environment

Strengths - threats strategies (ST): These strategies use the strengths of the business to avoid or reduce the impact of external threats

Weaknesses-threats strategies (WTs): These are defensive strategies to reduce internal weaknesses and avoid threats from the outside world