Towards the formulation of a new marketing mix strategy of habeco in the new economic era

List of TablesTable 1: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile in Terms of Age...35Table 2: Frequency Distribution, Percentage and Rank of the Respondents

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

-NGÔ VIỆT HÀ

TOWARDS THE FORMULATION OF A NEW MARKETING MIX STRATEGY OF HABECO IN THE NEW ECONOMIC ERA

XÂY DỰNG CHIẾN LƯỢC MARKETING MIX

TẠI HABECO TRONG THỜI KỲ MỚI

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017

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

-NGÔ VIỆT HÀ

TOWARDS THE FORMULATION OF A NEW MARKETING MIX STRATEGY OF HABECO IN THE NEW ECONOMIC ERA

XÂY DỰNG CHIẾN LƯỢC MARKETING MIX

TẠI HABECO TRONG THỜI KỲ MỚI

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS HOÀNG ANH TUẤN

Hà Nội - 2017

The author confirms that the research outcome in the thesis is the result ofauthor‟s independent work during study and research period and it is not yetpublished 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 thepermission (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

Ha Noi, 07 August 2017

Ngo Viet Ha

i

Writing a master thesis is a gratifying but difficult and sometimes nervewrecking endeavor that few engaged in because it requires a lot of sacrifices andhard work from the researcher However, at the end of one‟s task, one experiences awonderful feeling of joy, happiness, relief and fulfillment

The researcher would like to extend her sincerest gratitude and thanks to thefollowing people who were very instrumental in the fulfillment of this research study.Associate Prof HOANG DINH PHI, Ph D., President of Hanoi School ofBusiness and Management, for his untiring effort and belief that this program ispossible thus enabling us to pursue the MBA degree;

DR HOANG ANH TUAN, Ph D., thesis adviser, for his guidance andendless support for the improvement of this study

To ALL THE HSB PROFESSORS, for their support and guidance extendedthroughout the graduate studies in Hanoi School of business and management,Vietnam;

HSB STAFF, for providing me the necessary research materials provided to us;MANAGERS and EMPLOYEES of Hanoi Beer Alcohol Beverage joint stockcorporation, my Respondents, for their patience and cooperation in answering thequestionnaire and for other data given;

MY FAMILY and FRIENDS, for the love and support in one way or the other; and

TO ALL who have contributed to make this study a success

Ngo Viet Ha

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TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGMENT ii

List of figures v

List of Tables vi

INTRODUCTION 1

1 Rationale 1

2 Literature review 2

3 Aims of research 3

4 Objects of research 4

5 Scope of research 5

6 Research methodology 6

7 Thesis structure 7

CHAPTER 1 THEORETICAL BACKGROUND ON MARKETING MIX STRATEGY 8

1.1 Definition of terms 8

1.2 Strategic Marketing Planning Process 9

1.2.1 Marketing Situation Analysis 9

1.2.2 Marketing Strategy Design 12

1.2.3 Marketing Mix Program Development 15

1.2.4 Implementing and Managing Marketing Strategy 23

CHAPTER 2: APPLICATION OF THEORY: A CASE OF HABECO COMPANY26 2.1 Introduction of HABECO 26

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2.2 Statement of the Problems 28

2.3 Conceptual framework 29

2.3.1 Research Design 31

2.3.2 Respondents of the study 32

2.3.3 Sample and Sampling Techniques 32

2.3.4 Research Instruments 33

2.3.5 Data gathering procedures 34

CHAPTER 3: RESULTS AND DISCUSSIONS 35

3.1 Profile of the Respondents in Terms of Selected Variables 35

3.2 Respondents‟ Perception on the Marketing Mix Strategies of HABECO Company in Hanoi City 38

3.3 Significant Difference on the Respondents‟ Perception on the Marketing Mix of HABECO Company in Hanoi City 44

3.4 Findings 51

CONCLUSION, LIMITATION AND IMPLICATION 54

1 Conclusion 54

2 Limitation 55

3 Implication 55

REFERENCES 57

APPENDIX A 58

APPENDIX B 59

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List of figures

Figure 1.1 Strategic marketing processes 11

Figure 1.2 Selecting a marketing strategy 14

Figure 1.3 Price determination process 21

Figure 2.1 Illustrates this conceptual framework 31

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List of Tables

Table 1: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Age 35Table 2: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Gender 35Table 3: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Civil Status 36Table 4: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Educational Attainment 36Table 5: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of types of Respondents 37Table 6: Frequency Distribution, Percentage and Rank of the Respondents‟ Profile

in Terms of Monthly Income 37Table 7: Respondents‟ Perception on the Marketing Mix Strategies of HABECOCompany in Hanoi City In Terms Of Product 38Table 8: Respondents‟ Perception on the Marketing Mix Strategies of HABECOCompany in Hanoi City In Terms Of Price 39Table 9: Respondents‟ Perception on the Marketing Mix Stategies of HABECOCompany in Hanoi City In Terms Of Place 41Table 10: Respondents‟ Perception on the Marketing Mix Strategies of HABECOCompany in Hanoi City In Terms Of Promotion 42Table 11: Composite table of General Weighted Mean of Respondents‟ Perception onthe Marketing Mix Strategies of HABECO Company in Hanoi City 43Table 12: Computed F_value on One-Way ANOVA of the significant Differencebetween the Respondents‟ age and their perception on the Marketing Mix Strategies

of HABECO Company in Hanoi City 44Table 13: Computed F_value on One-Way ANOVA of the significant Differencebetween the Respondents‟ Gender and their perception on the Marketing MixStraegies of HABECO Company in Hanoi City 46

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Table 14: Computed F_value on One-Way ANOVA of the significant Differencebetween the Respondents‟ Civil Status and their perception on the Marketing MixStrategies of HABECO Company in Hanoi City 47Table 15: Computed F_value on One-Way ANOVA of the significant Differencebetween the Respondents‟ Educational Attainment and their perception on the MarketingMix Strategies of HABECO Company in Hanoi City 48Table 16: Computed F_value on One-Way ANOVA of the significant Difference onthe Respondents‟ Perception on the Marketing Mix Strategies of HABECOCompany in Hanoi City when grouped according to Customers, Retailers andWholesalers 50

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1 Rationale

Vietnam‟s domestic beer industry is preparing itself for fierce competition fromforeign beer companies after the signing of the Trans Pacific Partnership (TPP), a

U.S led free trade agreement Under the TPP, Vietnam will reduce its imported

beer tax from 35 percent to zero percent.

Vietnam represents a clear market opportunity for foreign beer brands Unlikesome of the other countries in the region, Vietnam has a strong culture of beer drinking.According to the Vietnam Beer, Alcohol, and Beverage Association, Vietnam is one ofthe region‟s largest consumers of beer, ranking behind only China and Japan In 2015,consumption levels reached 3.4 billion liters; a 2.5 percent increase year on year Thebeer market has seen an average growth of 10 percent per year

With the conclusion of the Trans Pacific Partnership in sight, competition inVietnam‟s beer market is only expected to intensify

To succeed in this environment, companies must consider the market trendsthat will likely shape the industry over the next few years This will help themunderstand the challenges they will encounter and transform these challenges intoopportunities for process improvement, enhanced flexibility and, ultimately, greaterprofit-ability As everyone known developing effective marketing strategies for acompany is the key to success in its target market Marketing helps companies tomaximize product sales through deployment of product policy, pricing, distributionand promotion, to maximize the satisfaction of consumer, to maximize choice ofconsumers Marketing activities have become essential for both sellers and buyers

in all spheres of social life When lack of understanding of the market will not havethe policy basis to access to market, to maximize sales to maximize profits, will noteven satisfy customers to the risk of losing customers and finally defeat in thecompetition This study will find out solutions to help HABECO become one ofpowerful corporations, holding the leading role in the beer manufacturing industry

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of Vietnam, to continue to have transition to meet integration requirements, tocontribute to the economy of the country.

2 Literature review

Nowadays, most of companies are increasingly embracing targeting marketing.Target marketing helps sellers or suppliers identify marketing opportunities better.The sellers can develop the right offer for each target market They can adjust theirprices, distribution channels, and advertising to reach the target market effectively.Therefore, designing the marketing strategy is very important for success Themarketing strategy is always a determinant constituent of effective competitivestrategy Cravens (2004) defined that marketing strategy is the analysis, strategydevelopment, and implementation activities in selecting market target strategies forthe product-markets in each business unit, setting market objectives, anddeveloping, implementing, and managing the marketing program positioningstrategies designed to meet the needs of the customers in each market target

Because of marketing‟s boundary orientation between the organization and itscustomers, channels members, and competition, it is central to the business strategyplanning process (Day, 1984) Strategic marketing provides the expertise forenvironmental monitoring, for deciding what customer groups to serve, for settingproduct specifications and for selecting which competitors to position against

Link between Marketing Strategy and Corporate Strategy:

Corporate strategic planning involves the activities such as developing aclear sense of the company‟s mission, identifying the company‟s strategic businessunits, allocating resources to the various strategic business units, and expandingpresent business and developing new ones to fill the strategic-planning gap Thecorporate strategy is concerned with what types of business the company as a wholeshould be in and is therefore concerned with the scope Marketing strategy, on theother hand is part of functional strategy which emerges in each strategic businessunit as part of corporate strategy

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According to Guiltinan and Paul (1996), corporate strategy is type of planwhich outlines how a firm should use its resources to produce and market a specificarray of products and services in order to achieve overall corporate objectives Inessence, the corporate strategy provided a general statement It defined the products

in which the organization would be involved but left open the details of how eachproduct or product line would be marketed

While the corporate strategy presents a plan developed by top management

to guide the total organization, a marketing strategy is usually developed by amiddle manager to guide a firm‟s activities for a product or a line of relatedproducts More specially, a marketing strategy is a plan which indicates how amanager deploys marketing resources on an individual product or product line inorder to achieve a specified product objective (such as market-share growth ormaximizing cash flow)

Currently, together with rising living standard, demand for beer quicklyincreases and high quality brands are much preferred More and more foreignbreweries entered the Vietnam market as well as breweries in the country made todiversify products Currently almost all provinces have brewery named localities,each plant there many beers with different names and directions to the differentcustomers At present, all players are facing the fierce competition between localand foreign brands Most of the producers try to exploit their distinctivecompetencies to gain competitive advantages and select the appropriate competitive

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strategies They face the need of designing marketing strategies in order to attractthe consumers to buy their products.

In this situation, HABECO recognizes that development of effective marketingstrategies have to be considered as a priority in order to protect its leading position

in northern provinces and was second on the nationwide market Throughdeveloping marketing strategies help the company to identify its target markets,position its products in the consumer‟s mind and develop marketing mix strategies

in order to achieve its marketing objectives and meet consumer needs and wants in

a better way than its competitors But how can the company develop such amarketing strategy, identify the target market or proper niches for its products, andconsolidate its position in the target market? Regarding the case of HABECO, atpresent, HABECO is a leading brand of Vietnam and is facing the intensifiedcompetition from Saigon beer, the local brewery and foreign brewery produced inVietnam as Heineken, Tiger… the question is:

How can HABECO protect its position in market of Hanoi city?

How can HABECO develop effective marketing strategies to increase marketshare in Hanoi and surrounding areas?

To answer this question, HABECO needs to develop the marketing mixprogram for each local market to defend its current market share This research

study examines to develop the effective marketing mix strategies for HABECO in

Hanoi city in order to increase the market share, and protect its leading position in the Hanoi beer market.

4 Objects of research

As everyone known developing effective marketing strategies for a company

is the key to success in its target market Marketing helps companies to maximizeproduct sales through deployment of product policy, pricing, distribution andpromotion, to maximize satisfaction of consumer, to maximize choice of consumers.Marketing activities have become essential for both sellers and buyers in all spheres

of social life When lack of understanding of the market will not have

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the policy basis to access to market, to maximize sales to maximize profits, will noteven satisfy customers to the risk of losing customers and finally defeat in thecompetition This study will find out solutions to help HABECO become one ofpowerful corporations, holding the leading role in the beer manufacturing industry

of Vietnam, to continue to have transition to meet integration requirements, tocontribute to the economy of the country

This research is the basis data to advise the Board of management ofHABECO some information to build overall development strategy of corporation Italso enables the Executive Board have new information to offer appropriatesolutions to develop Hanoi beer brands which is popular increasingly not only ondomestically but also on the international

Specifically, this study has very practical significance for seller and marketingteam to have conceived more than fully about the domestic market They know thatcompetition is present and they have to give the specific solutions to promote toexpand market share and maintain high position of HABECO in the beer industry ofVietnam

This research is presented in the form of a case study exposing the complexities

of a real business environment in the beer market of Hanoi city The purpose of thisresearch is to develop marketing mix strategies for HABECO in Hanoi Thus, it isnecessary to the analyze products, price, place, promotion and current marketingstrategy of HABECO in order to formulate the marketing mix strategy

The company mission sets out the reason why the company exits and what itshould be doing and the company‟s marketing objectives give a guideline of what itwants to gain and become This will serve as a guide for the process of StrategicMarketing Mix for HABECO

5 Scope of research

This research study was conducted at HABECO The study has beenundertaken purely from a viewpoint of marketing relating to develop the marketingmix strategies for HABECO in Hanoi city

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This research focus on respondent satisfaction relates to the development of the

marketing mix strategies including product, price, distribution, and promotion.

Data will be collected just in Hanoi city for the last 2 years Data will becollected by quantitative and qualitative research by depth interviews and by surveyattitudes of consumer by the structure question So the solutions give in this thesishas affected to market in Hanoi

6 Research methodology

The research design for this study is the descriptive method This will describethe perceptions of customer who are respondents about products, price, place,promotion of HABECO

Data and information needed for conducting the research were obtained byquantitative research and qualitative research The qualitative research used herewas in-depth interviews The quantitative research with the structure questions wasused to conduct the survey on attitude of the consumers toward beer Thesequestions focused on products, prices, distribution and promotion of beer brands Itwas used for determining the design improvement of the Marketing mix strategiesfor HABECO period 2016 - 2020

The sampling size of 119 consumer respondents was chosen at random byvisiting big-size beer shops and restaurants which have logo of Hanoi beer in thefront of the shops

The researcher used the questionnaire It was distributed to the different respondents The purpose of questionnaire is to collect data regarding awareness and attitude of customers This process measured whether respondents are aware of the strategies, perception of the customer on how satisfied they are and Problems and limitation of HABECO under study as to product (Services), price, promotion, place (Distribution).

The purposes of the interviews are to have an insight into the practice ofmarketing activities of HABECO, to indicate the problems and limitations of theirmarketing activities and to understand and clarify management's views on the issue

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Written request for interview was sent to clients in advance in order to

ensure their cooperation and their active contribution

7 Thesis structure

CHAPTER I THEORETICAL BACKGROUND ON MARKETING

MIX STRATEGY

 Background of the Study

 Statement of the Problems

CHAPTER II: APPLICATION OF THEORY: A CASE OF HABECO COMPANY

 Respondents of the study

 Sample and sampling techniques

 Data gathering procedures

 Secondary data collection

 Procedures in data collections

CHAPTER III: RESULTS AND DISCUSSIONS

 Profile of the Respondents in Terms of Selected Variables

 Respondents‟ Perception on the Marketing Mix Strategies of HABECO

Company in Hanoi City in terms of 4Ps

 Significant Difference on the Respondents‟ Perception on the Marketing Mix

of HABECO Company in Hanoi City

 Results: A new marketing mix strategy

CONCLUSION, LIMITATION AND IMPLICATION

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CHAPTER 1 THEORETICAL BACKGROUND ON MARKETING MIX

STRATEGY 1.1 Definition of terms

Customers include retailers, wholesalers and consumers of the Company.Marketing is an organizational function and a set of processes for creating,communicating, and delivering value to customers and for managing customerrelationships in ways that benefit HABECO Company and its stake holders

Marketing mix is a collection of mix-oriented marketing variables can becontrolled by the Company may select and use appropriate, assist each other inorder to locate a product on the market objectives identified to achieve competitiveadvantage, reinforce strong position in the marketplace of the company This studywill collect four P: Product, Price, Place, Promotion These are tools you can use topursue your goals in your target market

Market segmentation of HABECO Company is distinct groups of buyers whomight merit separate products and/or marketing mixes The marketer tries differentvariables to see which reveal the best segmentation opportunities For each segment,

a customer-segment profile is developed The effectiveness of segmentationanalysis depends on arriving at segments that are measurable, substantial, accessibleand actionable

Place decides where the product is to be sold HABECO uses the traditionalway for selling its products to wholesalers who will then sell beer product on toretail outlets

Price is the quantity of payment or compensation for beer products of

relations, point – of – sale displays, and word – of mouth promotion, internet areways of HABECO for promoting its products.

Strategic marketing is a market-driven process of strategy development,taking account a constantly changing business environment and the need to achievehigh levels of customer satisfaction Thus, marketing strategy builds competitiveadvantage by combining the customer influencing strategies of the HABECOCompany into integrated array of market-focused actions Strategic marketing linksthe Company with the environment and views marketing as a responsibility of theentire business rather than a specialized function

1.2 Strategic Marketing Planning Process

Various steps in designing strategic marketing planning within an industrycan be found in literature and basically there principles are all similar An approachfor strategic marketing process consist of marketing situation analysis, designingmarketing strategy, marketing program development, and implementing andmanaging marketing strategy It is shown in Figure 2.1 So there is a need to discussthis in more detail

1.2.1 Marketing Situation Analysis

The marketing situation analysis is the first step in the design of new strategy

or examining an existing strategy It comprises the external and internalenvironment analysis These analyses guide the choice of marketing strategies

The marketing environment is a place where the company must start itssearch for opportunities and possible threats It consists of all the actors and forcesthat affect the company‟s ability to transact effectively with its target market Theexternal environment can be divided into macro environment andmicroenvironment

The macro environment includes more general forces which often doinfluence the long run activities of the company It consists of economic, socio-cultural, technological, political, legal forces in relation to the firm's totalenvironment Thus, the achievements, difficulties and challenges of Vietnamese

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economy and governmental policies will influence the development of the beerindustry.

The microenvironment includes the factors in the company‟s immediateenvironment that affect its ability to serve its markets especially, the company itself,suppliers, market intermediaries, consumers, competitors and public One keyaspect of external analysis is evaluation of competitors' strategies, strengths andweaknesses Competitor analysis includes defining competitive arena, analyzing thestrategic group and describing and evaluating each key competitor in terms ofstrengths and weaknesses At present, the Vietnamese beer market becomes fiercelycompetitive So the analysis of production, consumption and competition arenecessary to identify opportunities and threats for the company

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Market Situation Analysis

Analyzing markets Market segmentation Analyzing competition Marketing information Systems and research

Marketing Strategy

Designing effective

Marketing strategy Positioning strategy

Planning for new products

Marketing Program Development

Product portfolio strategy Pricing strategy Distribution strategy Promotion strategy

Figure 1.1 Strategic marketing processes

Source: Cravens, 1994The internal environment analysis is to help the company recognizing itself

in terms of strengths and weaknesses The internal analysis includes thecorporation's structure, resources, production and business and marketing activities.Corporation resources are the assets that include people, managerial skills, financial

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circumstances, facilities, information technology and the skills and abilities withinfunctional areas.

In general, the situation analysis identifies opportunities and threats in the businessenvironment and the organization‟s strengths and weaknesses This information helpscompanies deciding how, when and where to compete in a given environment

1.2.2 Marketing Strategy Design

Designing marketing strategy includes market segmentation and targeting,positioning strategy and the marketing strategy choice

Market segmentation and targeting

After evaluating market segmentation, the companies have to target the bestmarket segment(s) Market targeting selects the people or organizations thatcompany wishes to sever in the product-market To do this, it must first evaluateprofit potential of each segment, which is a function of segment size and growth,segment structural attractiveness, and company objectives and resources Then,company must decide how many segments to cover It can ignore segmentdifferences (undifferentiated marketing), develop different market offers for severalsegments (Differentiated marketing) or go after one or a few market segment(concentrated marketing)

Thus, once the company‟s product-markets are identified and their relativeimportance to the firm determined, it selects the targeting strategy This decision isthe focal point of marketing strategy, since targeting guides the setting of objectivesand developing a positioning strategy

Positioning strategy

Regardless of the types of market coverage chosen, the company mustdevelop and communicate for every market selected A positioning strategy thatwill clearly differentiate it or its products from competitors Positioning is the act ofdesigning the company‟s offer so that it occupies a distinct and valued place in thetarget customers‟ minds (Kotler, 1991)

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Positioning strategy should take into account:

 The criteria or benefits the buyer considers when purchasing a product,

including the relative importance of the criteria

 How the firm is differentiated from its competition

 The limitations of competing products regarding important buyer needs and wants

The positioning strategy indicates how the firm or its brands would like to beperceived in the eyes and minds of the market target customers Therefore,decisions about products, distribution channels, price, and promotion should create

a cohesive marketing program aimed at meeting the needs and wants of consumers

in the firm‟s target market The marketing program combines the firm‟s marketingcapabilities into a package of actions intended to position the firm against itscompetitors

Marketing strategy selection

Selecting a marketing strategy takes into account the factors such as the rate

of growth of product-market, the diversity in the needs and wants of buyers, thestructure of competition, the organization‟s competitive advantage in which anorganization encounters Strategy selection may involve the developing a newmarketing strategy or changing an existing strategy

As argued by Guiltinan and Paul (1991), to choose the best marketing strategy, amanager must consider several kinds of information, as follows (Figure 2.2)

 Product objectives to help company determine the necessary basic type ofstrategy For example, if market share objectives are important, managers will employselective demand strategies to retain or expand market share Alternatively, the greaterthe importance of cash flow and profitability objectives, the more likely a managerwill be to select retention strategies and strategies for increasing repurchase rates That

is, these strategies will, in general, be less cost than acquisition strategies or strategiesaimed at increasing the number of users

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 Nature and size of the market opportunity should be clearly established based

on the market analysis and market measurements

 Managers must have a sense of the success requirements in terms of the kinds of

competitive advantages necessary and the level of marketing expenditures that will be

necessary to meet profitability goals

Corporate Marketing Planning

Source: Guilinan and Paul, 1991

Other selections of marketing strategy include entry strategy into newmarket, strategies for growth, mature and declining markets and global strategies.

Concerning with this research study, HABECO needs to develop a marketingstrategy to protect its leading position in the beer market in Hanoi city andsurrounding areas A marketing strategy for market leader faces three challenges:expanding the total market, protecting the market share and expanding marketshare The market leader is interested in expanding total market because it is themain beneficiary of any increased sale To expend the market size, the leader willhave to look for new users, new uses or more usage To protect its existing marketshare, the market leader has several defense methods: position defense, flankingdefense, preemptive defense, counter offensive defense, mobile defense orcontraction defense The most sophisticated leaders cover themselves by doingeverything right, leaving no openings for competitive attack Leaders can also try toincrease their market share This makes sense if profitability increases at highermarket share levels and the company‟s tactics do not invite antitrust action

1.2.3 Marketing Mix Program Development

Market targeting and program positioning strategies for new and existingproducts guide designing strategies for each part of the marketing mix Developingmarketing mix strategies for products, distribution, price and promotion is toimplement the positioning strategy selected and in order to achieve a coordinatedcombination of its components that will accomplish the market target objectives in acost-effective manner

Product strategy

Product is the first and most important element of the marketing mix Theproduct strategy calls for making coordinated decisions on product mixes, productlines, brands, packaging and labeling

 A product mix (also called product assortment) is the set of all product lines anditems that a particular seller offers for sale to buyers (Kotler, 1991) The product mixcan be describes as having a certain range (how many different

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product lines the company carries), length (total number of items in its productmix), depth (how many variants are offered of each product in the line) andconsistency (how closely related the various product lines are in end use,production requirements, distribution channels or some other way).

 A product line is a group of products that are closely related because theyperform a similar function are sold to the same customer groups, are marketed throughthe same channels or make up a particular price range Each product line is usuallymanaged by a different executive The product line manager should study the sales andprofit contributions of each product item as well as the way the items are positionedagainst competitors „items This provides information needed for making product linedecision such as line stretching, line filling, line modernization, line featuring and linepruning

 Developing brand policies for individual product items in line

 Packing and labeling decisions to protect, economy, convenience and promotion

To select a product strategy, the company needs the following information

on current and anticipated performance of the products in the business unit:

 Consumer evaluation of the company‟s products, particularly their strengths and weaknesses and competition (that is, positioning by market segment information)

 “Objective” information on actual and anticipated product performance on relevant criteria such as sales, profits and market share

This information helps management formulate strategies for each product in the mix or line The product strategy includes:

 Developing plans for new products, this process consists of eight stages: ideageneration, idea screening, concept development and testing, marketing strategydevelopment, business analysis, product development, market testing andcommercialization

 Managing programs for successful products, and

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 Selecting strategies for problem products (e.g., to reduce cost or improve the product).

Price strategy

Price is the only element in marketing mix that produces revenue, otherelements produce cost Pricing is a problem when a firm has to set a price for thefirst time This happens when the firm develops or acquires a new product, when itintroduces its regular product into a new distribution channel or geographical areaand when it enters bids on new contract work Thus, before setting a price, a firmmust identify the role that price will play in the product‟s overall marketingstrategy There are three generic pricing strategies that a firm might adopt: skimpricing, penetration pricing and neutral pricing (Nagle and Holden,1995) Eachstrategy is defined by the role pricing plays in the product‟s marketing strategy

Skim pricing (or skimming) is designed to capture high margins at the

expense of high sales volume By definition, skim price are high in relation to whatmost buyers are willing to pay Consequently, this strategy is viable only when theprofit from selling to a price-insensitive segment exceeds that from selling to thelarge market at a lower price

Penetration pricing involves setting a price far enough below economic

value to attract and hold a large base of customers It is a strategy designed togenerate sale volume even at the expense of high margins and, like skim pricing, isfavored by a particular environment Penetration prices are not necessarily cheap,but are low relative to value

Neutral pricing involves a strategic decision not to use price to gain market

share, while not allowing price alone to restrict Neutral pricing minimizes the role

of price as a marketing tool in favor of other tools that management believes aremore powerful or cost-effective for a product‟s market A firm generally adopts aneutral pricing strategy by default, because the conditions are not sufficient tosupport either a skim or penetration strategy For example, a marketer may beunable to adopt skim pricing because the products in a particular market are sogenerally viewed as substitutable that no significant segment will pay a premium

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That same firm may be unable to adopt a penetration pricing strategy because, as it

is a newcomer to the market, customers would be unable to judge its quality beforepurchase and would infer low quality from low price, or because competitors wouldrespond vigorously to any price that undercut the established price structure Neutralpricing is especially common in industries where customers are quite value-sensitive, precluding skimming, but competitors are quite volume-sensitive,precluding penetration

According to Kotler (1991), when a firm sets price strategy, it has toconsider the following factors in setting its pricing policy:

 Selecting the price objectives such as survival, maximum current profit,maximum current revenue, maximum sales growth, maximum market skimming andproduct-quality leadership

 Determining demand schedule, which shows the probable quantity purchasedper period at alternative price level Because each price that company might chargewill lead to a different level of demand and will therefore have a different impact onits marketing objectives The more inelastic the demand, the higher the company canset its price

 Estimating cost: demand largely set a ceiling to the price that the company cancharge for its product, and company costs set the floor The company wants to charge

a price that covers its cost of producing, distributing, and selling the product, including

a fair return for its effort and risk The firm therefore, estimates how its costs vary atdifferent output levels and with different levels of accumulated production experience

 Analyzing competitor‟s prices: the firm needs to learn the price and quality of each competitor‟s offer and use them as a basis for positioning its own price

 Selecting one of the following price methods: markup price, target-return price, perceived-value pricing, going-rate pricing and sealed-bid pricing

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 Selecting the final price: the firm select its final price, expressing it in the mosteffective psychological way, coordinating it with the other marketing mix elements,checking that it conforms to company policies and making sure it will find acceptancewith distributors and dealers, company sales force, competitors, suppliers andgovernment.

The point of views of Stanton et al (1994), the price determination processconsists of selecting price objective, selecting method of determining the base priceand designing appropriate strategies Figure 2.3 illustrates this process

Distribution strategy

A distribution channel is a set of organizational units (such as manufacturers,wholesalers, and retailers) that performs all the functions required from a seller tothe final buyer The structure of the channel is determined by three elements: the

tasks and activities to be performed by intermediaries, the types of distributors to be

used and the number of each type of distributor.

Channel design objectives derive from strategic market and financial goals.Such objectives as sales volume, market share, profitability and return oninvestment must be supported by the distribution channel To operate, marketcoverage and market control objectives must be developed to guide channel design.Market coverage objectives concern customers expectations and degree of product-availability intensity Market control objectives are to ensure product quality, sellingeffort by channel partners, demand stimulation by promotional activities and thequality of after-sales-support offered to consumers Decisions regarding marketcontrol and intensity objectives may be interrelated

Channel strategy consists of decisions regarding channel organization,definition of channel structures, development of criteria for evaluating channelstructures and the selection of an appropriate structure

Regarding the level of dependence and commitment among channelmembers, there are three categories of channel organization for managerialpurposes: Vertical Marketing Systems, Free Flow Channels and Single Transaction

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Channels (Bowersox,1987) This classification is accepted by the most of theauthors (Boone and Kurtz, 1993)

Channel structures differ based on the number and types of intermediariesinvolved and their specified roles The basic choice is between direct and indirectstructures Kotler (1991) proposed an approach for using consumer marketingchannels It consists of four levels of channel of different lengths: zero-level, one-level, two level and three-level channel

Selecting Channel of Distribution, most of the authors agree that there are

basically five factors for consideration in choosing distribution channels: marketproducts, producers, competition, availability of intermediaries and consumerscharacteristics, as follows (Boone and Kurtz 1993):

 Market factors emphasize the need and geographic location of the firm‟smarket, for example, whether the product is intended for the consumer or industrialmarket

 Product factors also play a role in determining optimal distribution channels Ingeneral, the more standardized the product, the longer channel Another generalizationabout distribution channels is that the lower the product‟s unit values, the longer thechannel

 Producer factors concern adequate financial, managerial and marketingresources The producer‟s need of control over product also influences channelsection For example, if aggressive promotion is desired at the retail level, theproducer often chooses the shortest available channel

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SELECT PRICING OBJECTIVE

SELECT METHOD OF DETERMINING THE

BASE PRICE

supply and demand market price

DESIGN APPROPRIATE STRATEGIES

Discounts and allowances One price vs flexible price Leader pricing

Freight payments Unit pricing Psychological pricing

Skimming vs penetration Resale price maintenance Price vs nonprice

competition

Figure 1.3 Price determination process

Source: Stanton et al., 1994

 Competitive factors are important when some firm is forced to develop unique

distribution channels because of inadequate promotion of its products by independent

marketing intermediaries Intermediaries may not always be available, regardless of

how desirable they are from the manufacturers‟ point of view

 Wholesalers and retailers independently owned businesses and both have their

own objectives to satisfy They availability of intermediaries is therefore important to

consider Consumer characteristic, i.e where, when and how consumers choose to buy

the goods is also the indispensable factor to be studied carefully

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Some authors have emphasized the consumer-oriented approach in selection

of the distribution channel (Stern and Strodivant, 1987), (Bowersox, 1987) Anotherapproach using the key-factor scoring method may be realistic and appropriated.This method requires that all of those factors deemed critical by the channelselectors be considered Then the channel selector will either use “weightedaveraging” or “preference ordering” method to rate the channel alternatives

Promotion strategy

Promotion mix strategy consists of four major tools: advertising, salespromotion, personal selling and public relation in which all help the organization tocommunicate with its consumers, cooperating organizations, public and the othertarget audiences Promotion strategies perform essential roles in positioningproducts in the eyes and minds of consumers Promotion informs, reminds andpersuades buyers and others who influence the purchasing process Concerning withconsumer goods, especially beer, the company needs to emphasize on designing thepromotion strategy to convince the consumers to buy its products

According to Kotler (1991) to develop the promotion program, thecompanies have to consider the following steps:

 Identifying the target audience and its characteristics, including the image thataudience has of product The audience could be potential buyers of the company‟sproducts, current users, deciders, or influencers They could be individuals, groups,particular publics or general public The target audience will critically influence thecommunicator‟s decisions on what, how, when, where and whom to say it

 Defining the communication objectives, whether it is to create awareness, knowledge, linking, preference, conviction or purchase

 Designing the message, ideally, the message should gain attention, hold

interest, arouse desire, and elicit attention (AIDA model) Formulating the message

will require solving four problems: what to say (message content), how

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to say it logically (message structure), how to say it symbolically (message

format) and who should say it (message source).

 Selecting the communication channels: personal and nonpersonal to carry the

message

 Establishing the total promotion budget

 Deciding on the promotion mix, most of companies face the task of distributingthe total promotion budget over the four promotion tools of advertising, salespromotion, personal selling, and public relations Companies are always searching forways to gain efficiency by substituting one promotional tool for another as itseconomics become more favorable When deciding on the promotion mix, companiesshould consider factors involved such as type of product market, push versus pullstrategy and product-life-cycle stage

 Monitoring to see how much of the market becomes aware of the product, tries

it and is satisfied in the process

 Managing and coordinating the marketing communication process

1.2.4 Implementing and Managing Marketing Strategy

Implementing and managing marketing strategy focus on evaluating andimproving organizational effectiveness and marketing strategy implementation andcontrol

Designing the Marketing Organization

An effective organization design selects people and assigns them workresponsibilities in a way that is best for accomplishing the firm‟s marketingstrategy Deciding how to assemble people into organizational units and assigningresponsibility to the various elements that make up marketing strategy impactstrategy performance Organizational structures and process must be matched to thedifferent types of business and marketing strategies that are developed andimplemented The marketing organization has to be flexible to respond to changing

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conditions and strategy needs Organizational design needs to be evaluated on aregular basis to assess its adequacy and to identify necessary changes.

Implementation and Control

Marketing strategy implementation and control are vital links in a series ofstrategic marketing activities These actions emphasize the continuing process ofplanning, implementing, evaluating and adjusting marketing strategies Theyinclude three important management activities, as follows:

1 Marketing plan and budget

The marketing plan typically includes a situation analysis summary; a markettarget description and strategic evaluation; overall objectives and specific objectivesfor each market target; a marketing program positioning strategy; specific strategiesfor product, price, distribution, and promotion; marketing research; coordinationwith other business functions; forecasts and budgets and contingency plans

2 Implementation strategy

The marketing plan should specifically include action guidelines concerningthe activities to be implemented, who does what the dates and location ofimplementation, and how implementation will be accomplished Several factorscontribute to implementation effectiveness, including the implementation skills ofpeople involved, organizational design, incentives and the effectiveness ofcommunication within the organization and externally

3 Evaluation of marketing performance

Marketing strategy is a continuing process of making decisions,implementing them and monitoring their effectiveness over time Evaluation andcontrol are concerned with tracking performance and, when necessary, alteringplans to keep performance on track Strategic evaluation also includes looking fornew opportunities and potential threats in the future It is the connecting link in thestrategic marketing planning process; therefore, strategic evaluation assures thatstrategy is an ongoing activity

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In general, marketing strategy is the analysis, planning, implementation andcontrol process designed to satisfy customer needs and wants It starts with anunderstanding of the corporate mission and objectives and the strategy of eachstrategic business unit The strategic marketing planning process consists of marketanalysis, deciding marketing strategies, developing marketing mix strategies andimplementing and managing marketing strategy Regarding with the case ofHABECO, to formulate marketing strategy, it is necessary to analyze theVietnamese beer market and assess strengths and weaknesses of the company.

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CHAPTER 2: APPLICATION OF THEORY: A CASE OF HABECO

COMPANY

2.1 Introduction of HABECO

General introduction:

Corporations Beer - Alcohol - Beverage Corporation (Habeco) is headquartered at

183 Hoang Hoa Tham Street, Ba Dinh District, Hanoi was established May 16,

2003 by Decision No 75/2003 / QD - BCN the Minister of Industry (now theMinistry of Industry and Trade) based reordering Hanoi Beer Company and themember units; officially moved to organize and operate as parent company -subsidiary of Decision No 36/2004 / QD-BCN dated 05.11.2004 of the Minister ofIndustry

The predecessor of the Corporation's Habeco Brewery scale Hommel 30 employees,led by a Frenchman named Hommel founded in 1890 with the aim of serving theFrench crusaders In 1954, the North completely liberated, the French withdrew,dismantle the entire machine to the brewery in the state Hommel abandoned In

1957, the brewery was restored to its Hommel economic recovery policies of theGovernment and renamed Hanoi Brewery

May 1, 1958, the first batch of beer test successfully implemented by Mr Vu VanBoc - a skilled worker's old brewery Hommel combined with assistance fromexperts of Czech beer August 15, 1958, the first beer of Vietnam branded TrucBach was born, marking a major turning point in the brewing industry in Vietnam.From this, the annual August 15 became the traditional date of the CorporationHabeco

In 1993, Hanoi Brewery paradigm shift operation, renamed Hanoi Beer Companyand accelerate the innovation process equipment to increase capacity to 50 millionliters / year In 2001, the company implemented projects to increase capacity to 100million liters / year

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After being transferred to the State Corporation in 2003, the event marked a turningpoint in expanding international cooperation is the Corporation signed a strategiccooperation with the Group of Carlsberg beer in 2007.

June 16, 2008, the official Habeco paradigm shift operations to the Corporationshares with the official name is the Corporation shares Beer - Alcohol - BeverageCorporation (Habeco)

In 2010, with the completion of construction projects Brewery capacity of 200million liters / year in Me Linh, Hanoi, with complete equipment system mostmodern Southeast Asia has given the Corporation capacity of 400 million liters /year Habeco become either the Corporation's largest brewing Vietnam

Currently, the Corporation has 25 member companies, with the flagship product issomewhat Hanoi Beer, Beer Bottle 450ml red label Hanoi, HANOI BEER PremiumBeer 450ml green label, Beer Cans, Beer Truc Bach, Hanoi Liquor

Business:

- Manufacturing, Business Beer, Wine, Drinks and Packaging;

- Import and export of raw materials, supplies, equipment, spare parts, accessories and chemicals;

- Scientific and technological services, investment consulting, investment funds create, organize the materials, business real estate, services and other statutory sectors

Achievements:

- Labor Medal Third Class (1960 - 1962)

- Labour Order second class (1960 - 1962)

- Medal of the Third War (1997)

- First Labour Medal (2000)

- Third Independence Medal (2006)

- Government donated Banners (1992, 1993, 1996, 1998, 1999, 2000, 2002, 2003)

- The industrial emulation flag (1998, 1999, 2000, 2002, 2003) In 2005, in 2006received the government's Emulation Flag

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- The Corporation Party 14 consecutive years (1990-2003) by Bloc Party and theMinistry of Industry Party merit emulation flag and recognize the Party pure andstrong.

- Vietnam General Confederation of Labour Unions emulation flag stand strong base (1999, 2000, 2003-2006) and the Certificate of Merit from the Prime Minister month 6/2007

- 5 years in a row (1998-2002), the Youth Union Corporation and the Central YouthUnion were awarded certificates of merit group

- 10 consecutive years (1988-1998), modern self defense team constantly keeps

circulating emulation flag of the Capital Military Region awarded advanced units

outstanding, leading the militia movement, safeguard the army and Military area

- In addition, the Corporation Beer - Alcohol - Beverage Hanoi received numerous certificates of merit from the branches and levels for all aspects of production and business, social, defense, life

- May 6/2002, the quality management system of the corporation TUV NORD of Germany certified to ISO 9001: 2000

- In 2005, accepted HABECO applicable environmental management system meets the requirements of ISO 14000: 2004

- In 2006, HABECO build and implement an effective system of food safety

management standard ISO 22000: 2005

- Attaining Vietnam Quality Gold Cup 2002, 2005

- Top Ten Vietnam Excellent Brand 2005

- Vietnam Gold Star Trophy in 2003, 2005, 2007

- Famous Brand Gold Cup 2004 in Madrid

- Europe Gold Award for quality and brand reputation in 2005 in Belgium

2.2 Statement of the Problems

The purpose of this research is to be able to develop a Strategic MarketingMix for HABECO, in order to maintain if not to improve its current position in theBeer Market of Hanoi city Specifically it will seek to answer the followingquestions:

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1 What is the profile of the selected respondents of HABECO grouped as: a) wholesalers b) retailers, and c) consumers in Hanoi city?

2 What is the perception of the respondents on the Marketing Mix strategies of HABECO in Hanoi city?

3 Is there a significant difference on the perception of the three (3) groups ofrespondents on the marketing mix strategies of HABECO when grouped according totheir profile?

4 Is there a significant difference on the perception of the three groups of respondents on the marketing mix strategies of HABECO?

5 What proposal can be developed to improve the marketing mix strategies onHABECO?

2.3 Conceptual framework

This research is presented in the form of a case study exposing thecomplexities of a real business environment in the beer market of Hanoi city Thepurpose of this research is to develop marketing mix strategies for HABECO inHanoi Thus, it is necessary to the analyze products, price, place, promotion andcurrent marketing strategy of HABECO in order to formulate the marketing mixstrategy

The company mission sets out the reason why the company exits and what itshould be doing and the company‟s marketing objectives give a guideline of what itwants to gain and become This will serve as a guide for the process of StrategicMarketing Mix for HABECO

A framework may enable to understand the various linkages and interactionsbetween the variables and to develop the marketing mix program in order to achievethe marketing objectives of the company Figure 2.1 illustrates this conceptualframework

Hanoi beer will be determined in harmony with what products? Thedifference of Hanoi beer with other products in terms of functionality, design, style,reliability, packaging, service and marks?

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Determining the level of sales channels and the appropriate profit margin.Then to select distribution strategy, distribution channel accordingly as.

To try to know customers to find a way to affect the behavior of buyers and

to know their needs Set goals and outline plan of spending or budget for thepromotion campaign

Be explored to make the appropriate price policy, and select the method ofvaluation basic of Hanoi beer

Thus, the need to collect information from analysis about consumer, market,competition, pricing and distribution channels, will offer decisions the combination

of marketing – Marketing Mix That is evolution with planning objectives haveinternal consistency and complement each other Still can not emphasize thisprocess too The change at any “P” in combination of marketing must change other

“P” because each “P” also has a close relationship with other “P” and affect eachother The purpose of this study is to be the solution of the Marketing Mix forHABECO to develop and expand market share in Hanoi and surrounding areas

30Respondent‟

s Profile