Planning sale communication for xuan mai complex project

ABSTRACT The study on “Planning sale communication for Xuan Mai Comppex project” aim to clarify the factors that affect the purchase decision of the apartment of the customers and set up

Cohort 2016 – 2018

By

Do Hoai Thu

PLANNING SALE COMMUNICATION FOR

XUAN MAI COMPLEX PROJECT

Supervisor: Dr Nguyen Thi Hong HanhMaster’s Thesis

I am pleased to gratitude my directors, colleagues and customers of Xuan Mai investment and construction Corporation for their enthusiastic support and creating favorable conditions for me to have more useful information to complete thesis

Finally, I would like to send many thanks to my family and friends, who inspired and supported me to write this thesis

Sincere thanks

Author

Do Hoai Thu

ABSTRACT

The study on “Planning sale communication for Xuan Mai Comppex project” aim to clarify the factors that affect the purchase decision of the apartment of the customers and set up communication plan for sale at Xuan Mai Complex project – the new real estate project of Xuan Mai Corporation It was conducted base on results of a research market and an investigation to evaluate the factors affecting consumer buying decision of apartment The study used both qualitative and quantitative methods with in-deep interviews and a questionnaire to assess customer awareness about Xuan Mai brand, their satisfaction and loyalty with this real estate brand There were 300 participants who are current customers and potential customers of Xuan Mai corp took part in the survey The result showed that Xuan Mai's brand is known to the majority of customers in the region The factors reasonable price and good reputation of the investor have got the most impact on customer satisfaction and their choosing Xuan Mai products However more than half of respondents evaluate Xuan Mai’s quality of management service

in normal level From these study results, a communication plan is proposed to enhance sale performance for Xuan Complex project in the year 2018 The marketing plan was divided into certain phases and stages with detail items and their budget include PR online newspapers, advertising campaigns on banner online, LCD-frame in elevator, social ads, direct marketing and events A part sale result of this plan was denoted with significant increase in sale from the fourth quarter 2017 to the second quarter 2018 The result of analysis shows that the most important factor affecting intention to use and buy is Quality of the house Other factors that influence to intention include quality of service and complete qualit y management and operation service of project Other factors showed insignificant influence to intention to use

Table of content

ACKNOWLEDGMENT ii

ABSTRACT iii

Table of content iv

List of figure and tables vii

Abbreviations viii

INTRODUCTION 1

CHAPTER 1 THE RATIONALE OF MARKETING IN ENTERPRISE 2

1.1 Marketing mix (4P) 2

1.2 The role of communication strategies 3

1.3 Factors affecting communication in marketing 3

1.3.1 Characteristics of the real estate product 4

1.3.2 Characteristics of the real estate market 4

1.3.3 The company’s budget for marketing communication strategies 5

1.3.4 The business production target of the company 6

1.3.5 Consumer behavior and purchase motivation 6

1.3.6 Competitors of the company 6

1.4 Process of marketing communication 7

1.4.1 Identify the target audience 7

1.4.2 Define the communication objectives 7

1.4.3 Designing the media message 8

1.4.4 Select the communication channels 8

1.4.5 Allocate communication budget 9

1.4.6 Measure and control communication activities results 9

1.5 Communication tools in Marketing 10

1.5.1 Advertisement 10

1.5.2 PR 10

1.5.3 Sale Promotion 10

1.5.4 Direct sales 10

CHAPTER 2 ENTERPRISE INTRODUCTION AND REAL SITUATION OF COMMUNICATION FOR ENTERPRISE IN GENERAL AND REAL ESTATE PROJECTS IN PARITICULAR IN RECENT YEAR 12

2.1 Enterprise introduction 12

2.1.1 History of evolution and development, Organizational characteristics and

business management system of the company 12

2.1.2 Functions and duties of the company 15

2.1.2.1 Business, distribution activities 15

2.1.2.2 Operation management activities 15

2.1.3 Characteristics of Marketing activities in the company 16

2.2 The status of marketing activities at the enterprise 17

2.2.1 Market overview 17

2.2.1.1 PESTEL analysis 17

2.2.1.2 Characteristics of Vietnam real estate market and the market of Hanoi western area 21

2.2.2 Analyses competitors the middle-class apartment segment and the position of Xuan Mai Corp on the market 23

2.2.2.1 Analysis competitors 23

2 2.2.2 Analysis of Xuan Mai's position in the mid-range apartment segment 30

CHAPTER 3 RESEARCH ON FACTORS AFFECTING BUYING DECISION 32

3.1 Qualitative research 32

3.1.1 Qualitative research objectives 32

3.1.3 The qualitative research result 33

3.2 Quantitative research 35

3.2.1 Quantitative research objectives 35

3.2.2 Quantitative sample and questionnaires 35

3.2.3 Data Collection 35

3.2.4 The quantitative research result 36

3.2.4.1 Sample description 36

3 2.4.2 Factors affecting apartment buying decision of customers 38

3.2.4.3 Awareness of customers about Xuan Mai brand 46

3.2.4.3 Assess customers satisfaction and loyalty with Xuan Mai brand 47

3.2.4.4 The source that helps customer to aware about Xuan Mai Corp 49

3.2.5 Model analysis (Regression analysis) 50

CHAPTER 4 PLANNING MEDIA FOR SALES AND SALES PERFORMANCE RESULTS OF XUAN MAI COMPLEX PROJECT, HA DONG, HA NOI 52

4.1 General marketing plan for sales of Xuan Mai Complex project 52

4.2 Detail Marketing plan for Xuan Mai Complex project 53

CHAPTER 5 PROPOSE SOLUTIONS TO ENHANCE EFFICIENCY IN THE

MARKETING 60

5.1 General comments on the marketing activities of the company 60

5.2 Propose solutions to enhance efficiency in marketing 60

CONCLUSION 62

REFERENCE 63

APPENDIX 65

List of figure and tables

Table 2 1 Pros and cons of Xuan Mai and competitors 27

Table 2 2 Overall assessment score of Xuan Mai and competitors 29

Table 3 1 Customer’s expectation to buy an apartment 33

Table 3 2 Affecting factors customer’s making decision of choosing apartment 34

Table 4 1 The marketing plan 53

Table 4 2 Sale results of Xuan Mai complex project 57

Table 4 3 Sales results of three companies 58

Table 4 4 Xuan Mai Housing’s sales result 59

Figure 2 1 Structure organization of Xuan Mai Corp 13

Figure 2 2 Structure organization of Xuan Mai real estate investment & business JSC 13

Figure 2 3 Organization of marketing activities 16

Figure 2 4 Vietnam GDP growth from 2010 to 2017 18

Figure 2 5 Percentage of smart phone user 19

Figure 4 1 Total number of sold apartment of Xuan Mai complex 58

Figure 4 2 The number of sold apartment by the distributor 59

Chart 3 1 Age and gender of survey’s respondents 36

Chart 3 2 Working field 37

Chart 3 3 Monthly household income 37

Chart 3 4 Apartment price 38

Chart 3 5 Apartment price 38

Chart 3 6 Apartment price by job 39

Chart 3 7 Apartment price by income 39

Chart 3 8 Apartment acreage 41

Chart 3 9 Apartment acreage by income 41

Chart 3 10 Promotion, sale policies 42

Chart 3 11 Reputation of investor 42

Chart 3 12 Location, utility, infrastructure 43

Chart 3 13 Complete quality, management and operation service 44

Chart 3 14 Reasonable apartment design 44

Chart 3 15 Awareness of customers about Xuan Mai brand 46

Chart 3 16 Customer’s evaluation of Xuan Mai product 47

Chart 3 17 Evaluate customers liked to use Xuan Mai’s product 47

Chart 3 18 Evaluate customer loyalty 48

Chart 3 19 Reason for choosing Xuan Mai products 48

Chart 3 20 The channels help customer know about Xuan Mai corp 49

Picture 2 1 ICID Complex project 23

Picture 2 2 The K-park project 24

Picture 2 3 Mipec city view project 25

Picture 2 4 Vesta project 26

Picture 2 5 Xuan Mai Complex project 27

Abbreviations

EPC Engineering Procurement and Construction

XMH Xuan Mai real estate investment & business JSC (Xuan Mai Housing)

ICID Construction Investment and Infrastructure Development Limited

Company MIPEC Military Petroleum Joint Stock Company

VOV Voice of Vietnam

INTRODUCTION

1 The basis for the formation of research

The real estate market in Vietnam is in the context of potential development 2016 and 2017 were the year witnessed the fierce competition of the real estate market When new types of real estate appear and develop, the demand and choice of customers increasingly strict, enterprises will have to enter the fierce competition So to keep and empower the enterprise in the market is very difficult.Therefore, the planning, strategies for business is always focused In that, have to mention marketing planning For that reason, I chose the subject “Set up communication plan for sales at Xuan Mai Complex project” when I practiced in Xuan Mai real estate investment and business joint stock company

2 The research objectives

The implementation of this research is aimed at two goals The first, clarifying the factors that affect the purchase decision of the apartment of the customers The second, setting up communication plan for sales at Xuan Mai Complex project – the new real estate project of Xuan Mai

3 Structure of the research

Chapter I: The rationale of marketing in enterprises

Chapter II: Enterprise introduction and real situation of communication for enterprises

in general and real estate projects in particular in recent years

Chapter III: Research on Factors Affecting Buying Decision

Chapter IV: Planning media for sales and sales performance results of Xuan Mai Complex project, Ha Dong, Hanoi

Chapter V: Propose solutions to enhance efficiency in the marketing

CHAPTER 1 THE RATIONALE OF MARKETING IN

ENTERPRISE

1.1 Marketing mix (4P)

Kotler (2014) defined that marketing mix refer to a set of significant marketing tools that businesses use to achieve their goals in a chosen market Those tools are blended and combined together for creating the right marketing strategy that support businesses to cope with differences and changes in the marketplace For businesses, marketing mix keeps an important role in supporting them planning from a business development strategy, a market strategy to a competitive strategy [19] Based on these marketing mix activities that businesses can provide their information to outside and receive feedback about the business to be able to research and develop product strategies in a reasonable way Meting mix will help businesses change and adapt to the competition of other rivals, help businesses survive and develop in the market

For customers, marketing mix helps them can receive information fully and accurately from the business, thereby evaluate and make the appropriate choice for their product and business operation

Therefore marketing mix is simplistically defined as ‘putting the right product in the right place, at the right price, at the right time.’ Though this sounds like an easy enough propositions, a lot of hard work and research needs to go into setting this simple definition up It is most commonly executed through the 4 P’s of marketing: Price, Product, Promotion, and Place In real estate marketing, a careful synergy of all four elements will make a property become more attractive prior to sale; it will appeal to buyers as realistically affordable, get ample exposure to the market through relevant channels and be well promoted [19]

Product- house, apartment are big-ticket items that seem has to be attractive

and meet potential buyer’s need or demand Similar other products they will follow

a logical product life cycle and it is vital for marketers to understand and plan for the various stages and their unique challenges The benefits offered by the product and all its features need to be understood and the unique selling proposition of the product need to be studied In addition, the potential buyers of the product need to

Price- it is the actual amount the end user is expected to pay for a product It can

be understand that a real estate product is priced will directly affect how it sells This is linked to what the perceived value of the product is to the customer rather than an objective costing of the product on offer If a product is priced higher or lower than its perceived value, then it will not sell This is why it is imperative to understand how a customer sees what a realtor is selling If there is a more positive customer value, a product may be successfully priced higher than its objective monetary value Conversely, if a product has little value in the eyes of the consumer, then it may need to

be underpriced to sell Price may also be affected by distribution plans, value chain costs and markups and how competitors price a rival product

Place- buyers hire realtors to assist them in finding the most appropriately home

based on their formula and expectations Agents who represent these buyers rely on being exposed to the properties that are out there From their own channels and network

a seller’s agent should work to expose the property for sale to any and all available channels so that buyers who may be interested are aware of the property they want to buy Therefore in this case, distribution is a key factor of placement

Promotion- it is not just limited to listing a home on listing services Effective

promotion may include advertising, sales promotions, special offers and public relations, especially in the technology era, using social network like Facebook, real estate websites etc more an more popular Also, word of mouth plays an important role in the success of a sale

1.2 The role of communication strategies

An effective communication strategy starts with determining clear objectives, forges and maintains connections, allowing the property business to work efficiently toward its goals The most basic dynamic in communication exists between the message and the audience For example, a realtor’s orders are her message to her employees, who are her audience If connections are clear, each party receives and understands the messages of the other it will fosters synchronized, efficient performance

1.3 Factors affecting communication in marketing

The success of a marketing communication strategy depend on several number of factors such as characteristics of product, market, company’s budget and business

1.3.1 Characteristics of the real estate product

Kimberly Amadeo (2018) indicated that Real estate is the property, land, buildings, air rights above the land and underground rights below the land The term real estate means real, or physical, property [16] There are four types of real estate including

 Residential real estate includes both new construction and resale homes The most common category is single-family homes There are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quadplexes, high-value homes, multi-generational and vacation homes

 Commercial real estate includes shopping centers and strip malls, medical and educational buildings, hotels and offices Apartment buildings are often considered commercial, even though they are used for residences That's because they are owned to produce income

 Industrial real estate consists of manufacturing buildings and property as well as warehouses The buildings can be used for research, production, storage and distribution of goods Some buildings that distribute goods are considered commercial real estate The classification is important because the zoning, construction and sales are handled differently

 Land includes vacant land, working farms and ranches The subcategories within vacant land include undeveloped, early development or reuse, subdivision and site assembly

1.3.2 Characteristics of the real estate market

There is no central market: the real estate market has not formed a central market

where buyers and sellers can meet and interact directly with one another Most of all transactions are made primarily by intermediaries, real estate businesses, by media, or realtors Due to lack of central market, it is difficult to collect market information and low reliability lead to this market ineffective In recent years, in Vietnam, real estate brokerage companies have been established and developed rapidly, facilitated the transactions smooth, safety and more efficient [1,7]

The real estate market is regional and locally: because property characteristics are

indestructible and difficult to separate, can not move; the abundance of this place can not offset the shortage elsewhere, so it makes the locally real estate market On the other hand, the differences in the development level of economic, cultural, social and population densities make the demand for real estate also differ in terms of quantity, shape and quality and thereby lead to the differences in development level of a real

The real estate market is not perfect: because it requires a lot of directly

intervention by the state, the perfect level of this market is always lower than of consumer goods market or production market and some other markets In addition, because of non-renewable or scarcity of land, the market is monopolistic The information on planning, management, socio-economic related to land has not been thoroughly disseminated so that the competition in the real estate market is only implicit competition [21, 22]

The real estate market is closely related to other markets, especially financial and

credit markets and to the economic development of a nation Most of the investments come in two streams consist of investing in property or investing in financial and monetary markets On the other hand, real estate transactions themselves often require huge capital demand

1.3.3 The company’s budget for marketing communication strategies

The objective of the marketing communication budget is to achieve the communication goals as cost effectively as possible and demonstrate a successful return on investment The businesses do not calculate a budget for marketing communication in the same way because it depends on the industry, product, business model, marketing strategy and even life-stage of the company Jamie McAinsh (2016) proposed three methods in setting marketing communication budget [20]

 Percentage of revenue

Setting a budget based on percentage of current or forecasted revenue is often used and can be benchmarked across industries A general rule that is applied by many companies in setting their marketing budgets is a spend between 1 and 10% of total company revenue This method sets a finite budget with limited flexibility, so a downturn in sales could potentially require a budget reduction During a sales decline, marketing budgets are often the first to be cut whereas maintaining it and making some strategic changes can certainly be more effective

 Competitive parity

A second method is to assess competitors’ marketing communications spend and adjust then company’s budget accordingly Whilst this can be difficult to pinpoint, it does provide a benchmark for historical spend on promotion by the competition so the company’s leader can apply a similar level to their industry’s standard

 Objective and task

Setting a budget can be achieved by estimating the cost of the planned initiatives

what communication strategies need to be implemented to reach them and estimate what

it will cost Whilst this budget method can be hard to establish, they can calculate what they are prepared to spend to acquire a lead based on their potential lifetime value

1.3.4 The business production target of the company

The business production target of the company refers to the number of units or the quantity of output the business is expected to produce in the next financial period It forms a part of business production planning in which the following are decided – what

to produce, when to produce, where to produce and how to produce? In such a case, a forecast is made for each step of the production process to identify the difficulties and inefficiency if any Production target defines how much to produce? The business production targets are fixed during the preparation of the production budget when the man, material, method, money are decided Having clear, well-defined business production targets helps the company follow a routine business production process and adjust their master schedules when necessary to achieve the desired target

1.3.5 Consumer behavior and purchase motivation

Consumer behavior is all about the way people buy and use products and services Understanding consumer behavior can help marketers be more effective at marketing, design, product development, and every other initiative that impacts their customers Consumer behavior evaluations take a closer look at motivations, reasoning and actions that go into purchase decisions Understanding the aspects of consumer behavior and the methods of study provide valuable insight for the business and offer important techniques for driving the business to the next level of success

1.3.6 Competitors of the company

A clear competitors understanding will help you to communicate with your target audience, distinguish your business from competitors, improve your processes, and navigate challenges in your market Even if your product or service fills a unique gap in the market, there are always other companies offering something similar, or there are other ways to satisfy the same customer’s need The key when thinking about your competition is to learn what makes the customer choose one product or service over another The different options that customers consider are usually competitors

Competitors can be either direct (competing by selling the same products) or indirect (competing for the same market) Direct competitors are businesses that have the same product or service offerings For example, if you’re a real estate company,

your direct competitors are other real estate companies Information on your direct competitors will facilitate your ability to stand out above them Indirect competitors are those who don’t offer the same service, but meet the same need in an alternative way Knowing what kinds of competitors you have, and why they are competitors can help you to identify which marketing activities and messaging are the most effective for your business Moreover, for a real estate company, the potential business benefits of conducting a competitor study systematically and by the time including [25]

- Understand the market

- Target customers better

- Forecast potential of the market

- Identify how the economic environment affects the market

- Understand what your competitors are offering

- Track competitors' prices

- Determine supply at auxiliary markets

- Seeking new customers

1.4 Process of marketing communication

Marketing communications process consist of integrated activities in which the targeted audience is identified and a well coordinated promotional program is prepared

to generate the desired response from the audience Most of marketers use marketing communication as a tool to build customer relationship at the stages of pre-selling, selling, utilization, and post utilization Due to differences in customers, different programs of communications are developed for specific segments & niches Zkjadoon (2015) offered following steps that make communication process effective [27]

1.4.1 Identify the target audience

The first step in the effective marketing communication process is to identify the target audience These audiences may be potential customers or other people that can influence the decisions of these customers The audience may include the individuals, groups, general public or special public The audience has a direct effect on the decisions of the communication, like what to say? How to say? And when to say? etc

1.4.2 Define the communication objectives

In this step the marketing communicator should clear the objectives of the communication process In most of the situations, the purchase is required by the marketing communicator, but purchase is made after a prominent customer decision

the customer Generally there are six Stages of Customer Readiness through which a customer passes to make a purchase which are awareness, knowledge, liking, preference, conviction and purchase The target group of the marketing communicator is not much familiar with the new product or its silent features So the marketing communicator should create the awareness and knowledge of its new product and features But this is not the surety to the success; the new product should also provide superior customer value too

1.4.3 Designing the media message

In this step the marketing communication, communicator focuses upon the design of the message Any message that can attract the attention, develop t he interest, arousal of desire and stimulate the action is the effectively designed message This procedure is best known as AIDA model (Attention, Interest, Desire and Action) that can make any message effective and potential Besides this the marketing communicator also decides about the content and structure of the message

1.4.4 Select the communication channels

Selection of the right communication channel depends on an understanding of the communication objectives and audiences, and the strengths and weaknesses of the different channels that are available The correct selection is vital to the success of a communication campaign A basic rule of thumb in the selection of the communication channel is that the more a message needs to change behaviors and win over hearts and minds, the more it has to be delivered using the most relevant channel

 Face-to-face channels such as meetings, public appearances, live web chats, events and open houses offer the advantage of immediate feedback (and, you never know, the possibility of hoisting a megaphone) As a small business owner, these channels also allow you to become the credible and trustworthy public face of your company – the first step toward developing a long-term relationship with your customers Interactive social media channels such as blogs, discussion forums, Twitter and YouTube also offer immediacy and the benefit of two-way communication Mobile and social media update channels such as blogs; twitter and your company’s Facebook page offer a way to communicate in a personal way They also offer the added advantage of shareability

 Traditional print channels such as email, memos and press releases can offer wide reach at an affordable price

 Traditional print advertising channels such as brochures, flyers, newspapers and

 Traditional broadcast channels such as radio and TV advertising offer wide range and the ability to reach new audience members

1.4.5 Allocate communication budget

As mentioned in the previous part, there are three common methods used by companies to decide on the communications budget These are the percentage-of-sales method; the competitive parity method, and the objective and-task method Many companies employ more than one method to arrive at relatively accurate budget figure Once the marketing communications budget is determined, the next step is to allocate it over the major tools or elements of the communications mix-viz advertising, sales promotion, direct marketing, personal selling, public relations, and publicity Companies consider several factors when they allocate the communications budget These are market size and potential, market share objectives, product market type, product life-cycle stage, and buyer-readiness stage

1.4.6 Measure and control communication activities results

A marketing plan, no matter how well designed it may still have many problems

to address in the implementation process, so the marketing department must constantly tracking and checking marketing communication activities Control systems that work well will ensure that marketing communications particularly and business operations of the business generally achieve goals with high efficiency Marketing communication controls can be classified into four categories encompass annual plan control, profitability control, effective control, and strategic control Controlling the annual plan is checking the performance and results of marketers based on the annual plan and make an appropriate adjustments to ensure the completing that plan Profitability controls include efforts to determine the true viability of different products, regions, markets, and distribution channels Performance controls aim to assess and find ways to improve the performance of marketing costs by selling, advertising, distribution and promotion activities Strategic control involves periodic surveys to know how the basic strategies of a business exploit marketing opportunities The marketing communication efficiency of a business is reflected in the performance level of five key marketing orientations namely customer philosophy, marketing mix, accurate marketing communications,

1.5 Communication tools in Marketing

The marketing communications is the tool for communicating customers and other stakeholders All of these should be carefully maintained under the concept of integrated marketing communications so that marketers can deliver a clear and compelling message There are five major tools of marketing communication below

1.5.3 Sale Promotion

Sale promotions are another effective communication marketing tool Sales promotions can include product demonstrations, contests, displays, free samples, premiums like "buy one/get one free," coupons and other types of incentives The goal

of a sales promotion is to spur short-term sales by increasing awareness of a brand Ultimately, a company strives to build repeat business with a sales promotion

1.5.4 Direct sales

Direct sale is another highly pervasive communication marketing tool Companies have both inside and outside sales reps to market their products to consumers and businesses One advantage of direct selling is that it offers two-way communication The customer can ask questions about a company's products or service, then make his decision to buy However, sometimes it can take multiple contacts to make a sale, especially for higher-priced items

1.5.5 Personal selling

Personal selling is also known as face-to-face selling in which one person who is the salesman tries to convince the customer in buying a product It is a promotional

method by which the salesperson uses his or her skills and abilities in an attempt to make a sale Personal selling is a face-to-face selling technique by which a salesperson uses his or her interpersonal skills to persuade a customer in buying a particular product The salesperson tries to highlight various features of the product to convince the customer that it will only add value However, getting a customer to buy a product is not the motive behind personal selling every time Often companies try to follow this approach with customers to make them aware of a new product

CHAPTER 2 ENTERPRISE INTRODUCTION AND REAL SITUATION OF COMMUNICATION FOR ENTERPRISE IN GENERAL AND REAL ESTATE PROJECTS IN PARITICULAR IN

In 1996, Xuan Mai Concrete Factory was renamed to Xuan Mai Concrete and Construction Company and transferred to Vietnam Construction Import - Export Corporation under Decision No 1049 BXD / TCLĐ dated 6 December, 1996 by the Ministry of Construction

In 2003, Vinaconex Xuan Mai Joint Stock Company was renamed Vinaconex Xuan Mai Concrete and Construction Joint Stock Company under Decision No 1434 / QD-BXD of the Ministry of Construction

In 2014, the company officially changed its name to Xuan Mai Investment and Construction Joint Stock Company (Short name: Xuan Mai Corporation) Xuan Mai has cooperated with RONVEAUX of the Kingdom of Belgium to build a production line of reinforced concrete components for apartment buildings, industrial plants, public works, transport works Xuan Mai Cooperated with Rieckerman Company in Germany to transfer Acotec prefabricated hollow wall technology from Elemantic to Finland and installed a production line with the Frumecar - Spain concrete mixing plant Xuan Mai

is the first company in Vietnam to produce and apply Acotec concrete wall in various projects that bring many benefits such as productivity, labor saving and environmental friendliness Xuan Mai works with the goal of becoming a leading EPC contractor and a reputable real estate developer

Xuan Mai corp has 7 subsidiaries, in which XMH is the last company established

to perfect the production chain of Xuan Mai Corp

Figure 2 1 Structure organization of Xuan Mai Corp

Source: HR Department of Xuan Mai Corp.

Xuan Mai transport mechanic JSC

Xuan Mai electromechanical JSC

Xuan Mai construction JSC

Xuan Mai real estate investment

& business JSC (XMH)

General meeting of shareholders

Figure 2 2 Structure organization of Xuan Mai real estate investment & business JSC

Source: HR Department of Xuan Mai real estate investment & business JSC

General meeting of shareholders

Board of director

Control board Administrative

Business department

Media Support

Business

Operation management department

Project of Xuan Mai

2.1.2 Functions and duties of the company

XMH was established to perfect the production & business chain of Xuan Mai, from construction investment to distribution and operation management of Xuan Mai’s real estate projects XMH has two main business activities: distribution of Xuan Mai's real estate products and operation management of Xuan Mai's projects

2.1.2.1 Business, distribution activities

Consultant Marketing for real estate projects owned by Xuan Mai Corp, such as: target market, target customers, set up plan for sales, marketing plan, make the price and other activities related to sales

Organizing, implementing all sales programs to achieve sales goals of Xuan Mai Corp: project’s open session, customers conferences, etc.; searching, building customer data, caring, maintaining relationships with customers; looking for reputable distributor for Xuan Mai corp; build maintain, take care of related partners in the field of real estate; training human resources in the field of real estate

2.1.2.2 Operation management activities

- Set up process of managing and operating of all apartment building that Xuan Mai is investor

- Build reasonable and effective service fees for projects

- Seek, negotiate, propose parking lease contracts and other services at buildings

- Find other customers to province management service for the building that Xuan Mai is not an investor

- Planning, organizing, implementing management and operation of the buildings

- Propose solutions and technical improvements in the management and operation

of the buildings

- Propose establishment of building management department

- Resolve all customer complaints during the operation of the buildings

- Recruit, train human resources to ensure adequate the demand of human resources when managing, operating projects

Xuan Mai Corp works with the goal of becoming a reputable EPC contractor (Engineering Procurement and Construction) on the market Xuan Mai Corp is a

contractor that performs all the work from the technical design or construction drawing design, supplies and equipment to the construction of works, project items Xuan Mai Corp would like to bring to customers the perfect value chain, from the design, construction and distribution, operation Xuan Mai’ s products XMH is the last link in Xuan Mai Corp’s value chain

2.1.3 Characteristics of Marketing activities in the company

From establishment to the present, Xuan Mai Corp and XMH hasn’t had Marketing Section What Xuan Mai do to support sales activities basing on the sales experience and their habit Xuan Mai has not been planed professional marketing activities: make survey, brand, PR etc Sometimes, Xuan Mai Corp learns about the competitors’ sales policies to create the better policies to attract customers Besides that, Xuan Mai Corp hires agencies or distributors to implement marketing plan for them whenever selling projects Moreover, after sales department works unprofessionally because Xuan Mai has many ongoing projects while a number of this apartment’s staff

is not enough

From July 2018, Xuan Mai Corp had their staffs implemented marketing activities under direction from them Xuan Mai Corp have had two staffs who have planed and implemented Marketing but still do not have marketing department At present, Xuan Mai Corp would like to develop, implement marketing plans for the company and Xuan Mai’s project by themselves Xuan Mai does not want to hire the distributor unit for communications

Figure 2 3 Organization of marketing activities

Source: Xuan Mai Corp.’s Business Department

Board of investment & business

(XMC)

Business department (XMH)

Agencies

Board of investment & business (XMC): Xuan Mai’s marketing plans are done by the manager of investment & business board Every business strategy and marketing plan are approved by Xuan Mai Corp

Business department (XMH): implements all activities follow the approved marketing plan from Xuan Mai Corp: seek agencies, control agencies implementation Agencies: Agencies are chosen by XMC and XMH XMH seek to chose suitable agencies that implement marketing activities under the control of XMH

2.2 The status of marketing activities at the enterprise

The policy of allowing foreigners to buy houses in Vietnam is a positive change in policy, creating new sources of demand, boosting the development of the real estate market

In 2018, the government use tax tools, credit tools, planning tools, administrative tools to regulate the real estate market in order to develop a healthy and sustainable real estate market

Figure 2 4 Vietnam GDP growth from 2010 to 2017

Source: General Statistics Office

Socio-economic in 2017 of Hanoi achieved quite comprehensive results GDP increased 8.5%, completed the plan; budget revenue exceeded plan; attracting high investment capital; Inflation is controlled [2, 28]

The real estate market is vibrant again Some condominiums are completed and sold out in a short time New types of services have been developed at a fast pace, stable commodity markets, abundant commodities, prices are controlled, there is no lack of goods or price fluctuations Credit activity improved, credit institutions strictly implement the regulations on interest rates, mobilized capital sources to meet capital demands for production and business activities of enterprises and people Commercial banks have pledged to provide loans under the bank-to-business connection program, Administrative sectors such as state management, education, culture, health care etc still maintained a good growth rate

According to the policy of Hanoi City to 2050, the western area is oriented to expand and develop into a new administrative, cultural and commercial center with a series of headquarters of the ministries to be transferred here

Social

According to a report by the General Statistics Office 2017, The average population of Hanoi in 2017 is 7,654.8 thousand, up 1.8% over the previous year In particular, the urban population is 3764.1 thousand people, accounting for 49.2% and increasing 1.7% over 2016; Rural population is 3,890.7 thousand, accounting for 50.8% and increasing 1.8% [2, 28]

In an area with a high population density, real estate prices are also rising as the supply-demand balance is shattered

Urban order and civilization in Hanoi are concerned more Hanoi has invested heavily in the construction of infrastructure, particularly the transport system, which makes moving to the city center more convenient Income of people increase higher so the higher living standards are required

Technology

Administrative reform is focused on the City, application of information technology in the activities of state agencies are implemented synchronously The city has operated 456 online services, aiming to reach 55% by the end of the year IT readiness index ranked second in 63 provinces Telecommunications and internet are spreading increasingly, especially in big cities [2]

According to the Nielsen Vietnam Smartphone insight report 2017, the share of smart phone users is 84% of the number of normal telephone users by 2017, up 10% from a year ago ( 78%) [24]

Figure 2 5 Percentage of smart phone user

The figures show that the picture of the trend of using smart phone in Vietnam Online advertising market in Vietnam in recent years has made strong changes, especially the trend of internet access by smart phone has made the basis for the form of advertising on the phone increasingly popular and become more diverse

Nielsen also conducted a study to clarify consumer trends The results show that social media is one of the main platforms for information gathering, entertainment and communication, typically facebook, there are 22.5 million facebook users in rural areas, with 23.5 million facebook users coming from urban areas [24]

Environment

In recent years, the pace of urban development in the western of Hanoi has been rapid, making the face of the city change day by day Many urban areas have scenic, beautiful architecture; bring living space civilized and modern for the people But, after heavy rains, the people here have suffered from flooding: the urban areas are located along Le Trong Tan Street and Duong Noi urban (Ha Dong District), Thang Long Highway, etc

Hanoi city needs to review the entire drainage system and take specific measures

to prevent flooding in each area The checking of the drainage system of Hanoi before the rainy season has not done well This situation requires Hanoi to have more specific and effective solutions to flood control, contributing to the construction of modern capital in the future

Law

The Government issued Resolution No 19 on reforming administrative procedures, creating a business environment that will help improve the legal system and create a transparent, open legal corridor for the activities of real estate market

On 23/01/2018, the State Bank of Vietnam has issued Official Letter No 563 / NHNN-TTGSNH requiring credit institutions and banks to restrict credit concentration

in the field of real estate and construction; regularly reviewing, evaluating and tracking the progress of real estate projects, financial capacity of clients, improving the efficiency of dossier approval, especially loan conditions to limit risks; Strictly monitor the use of consumer loans but in fact to invest in and trade in real estate

The Government issued Decree No 139/2017 / ND-CP stipulating the sanctioning

of administrative violations in construction investment activities; exploiting, processing

and trading minerals for use as building materials; producing and trading construction materials; management of technical infrastructure works; real estate development, housing development, management of home and office use

Resolution 42/2017 of the National Assembly on piloting bad debt will create conditions for the re-start of real estate projects as collateral for bad debts are being suspended

2.2.1.2 Characteristics of Vietnam real estate market and the market of Hanoi western area

In 2017, with the number of companies listed on the stock exchange, the real estate sector grew impressively by nearly 50% The real estate market is developing steadily Many enterprises have restructured and marketed real estate products at low prices, meet to the needs of the people

CBRE Research has released a report on the real estate market in Hanoi and Ho Chi Minh City in the fourth quarter and 2017 In Hanoi, the apartment market continued

to be exciting as 9,500 apartments were offered for sale The total number of apartments offered in 2017 is 35,000, an increase of 16% compared to 2016 This is also the highest new openings in the last 5 years

According to data published by research units, in 2017, the type of apartment still dominates the market At present, housing supply is quite plentiful with about 45,000 units Meanwhile, according to the assessment of the National Financial Supervisory Committee, in 2017, real estate prices do not fluctuate much, rising mainly in the middle and high real estate segment

Housing price in the inner city in some mid-end luxury apartment projects favorable location, synchronous infrastructure, good construction progress, reputable investors, sales policies and promotional up from 3-10% in 2017 In particular, the type

of luxury apartments increased the fastest, with an increase of 7-10%, the type of middle-class apartments increased by 5-7% and the type of housing increased the lowest with the increase from 3- 5%

The Vietnam Real Estate Association, the Housing Management and Real Estate Market Department (Ministry of Construction) also said that nearly 70% of the products sold by the end of 2017 in the segment of middle-class apartments Customers buy apartments today mainly to stay The projects have beautiful location, infrastructure is a number of customers invest to rent or buy back because of high liquidity [2, 28]

In terms of price, due to the new supply as well as the shift of the market in the middle-class segment, the general price level has not increased sharply By 2017, the average primary price in the market is about $ 1,344 / m2, down slightly from 2016 CBRE forecasts that in the coming years, the macroeconomic development will continue to create momentum for the housing and apartment market Increased supply, investors will also compete more fiercely in the sale of products Also, in 2018 there will be a clear distinction between segments CBRE forecasts that in 2018, intermediate products will continue to occupy a high proportion High-end and luxury segments will occupy moderate proportions to create a foundation for a more sustainable development According to the master plan to 2030 - 2050, Hanoi officially approved the southwest of the capital to become the key economic center of the city and received strong investment in infrastructure With this decision, a series of main roads were renovated, expanded and completed such as the road connecting Nguyen Trai - Luong The Vinh, Me Tri - My Dinh, Cat Linh - Ha Dong railway or To Huu - Le Van Luong, and BRT bus goes into operation

In Ha Dong district, the market system, trade centers are constantly developing In March, AEON Mall Co., Ltd broke ground the AEON commercial center in Ha Dong with a total area of 98,000 square meters and will be launched in December 2019 AEON Mall Ha Dong will bring to customers the most modern trends, new lifestyle, become the No 1 trade center here Along with the strong investment in infrastructure, many investors have been ready to restart large-scale real estate projects and invest new projects to meet the real estate demand expected to rise in this area In particular, Vingroup with Vinhomes Thang Long (South An Khanh) project in 2016, VinCity project in Tay Mo, North An Khanh urban area project of Vinaconex, Duong Noi urban area, Park City, Geleximco are developed synchronously

Infrastructure in this area stimulates the real estate market in the West of Hanoi This area has many new roads that are built synchronously, when completed will improve traffic congestion, people will move among the inner cities of Hanoi and suburbs more easily In addition, the area is also forming many social infrastructure projects, easy access to many universities and colleges around Cau Giay, Thanh Xuan Real estate in west of Hanoi is vibrant and highly liquid, while competition in the west of Hanoi market will be fiercer in 2018 and in the coming years

2.2.2 Analyses competitors the middle-class apartment segment and the position of Xuan Mai Corp on the market

2.2.2.1 Analysis competitors

In mid-range apartment segment, Xuan Mai has many competitors in the time of sale at the end of 2017-2018 Typically the projects are below

 ICID Complex project

Investor: Construction Investment and Infrastructure Development Limited Company (ICID)

Address: Urban area along Le Trong Tan – Gleximco, Directly connect to the West with the center of Hanoi

Land area: 4,420.5 m2 in which construction area accounted for 2,652 m2

Construction density: 60%

Number of basements: 3 floors

Two 30-storey buildings with common basement, 3 basements connected, 4 floors commercial center, services, shophouse

Apartment area: 63,9m2-66,8m2; 75,1m2-84,6m2

Price: From 17.5 million - 20 million/ m2

Number of apartments: 646 apartments

Utilities: Covered tropical swimming pool 500 m2, Green garden on the 4th floor for residents to be in harmony with nature after a working day The kindergarten is wide 1120 m2Use 4.0 technology in the building

Time of hand-over: Quarter 2/ 2019

Picture 2 1 ICID Complex project

Source: ICID’ annual report 2017

 The K – Park project

Investor: Century Investment and Development Real Estate JSC (Cen Invest) Address: CT6, Van Phu urban area, Phu La, Ha Dong, Hanoi

Area of the project: 65,585 m2 (including 5 apartment buildings and 359 townhouse blocks)

Construction area: 32.782 m2

Construction density: 43%

Area of apartment: 53 m2 - 93 m2

Price: 19 million/m2 - 21 million/m2

Project structure 03: K1, K2 and K3, total of 951 apartments: K1: 27 floors, K2:

25 floors, K3: 23 floors

The basement is connected 03 court, 12,764.3m2 wide

Utilities: The K - Park has inherited utility from the system of technical standards

of urban class 1, the system of social synchronization: outdoor swimming pool

239.5m2, park, children play area, garden green area, wide and so on

Time of hand-over: Quarter 4/2018

Picture 2 2 The K-park project

Source: The K-park’s annual report 2016

 Mipec city view project

- Investor: Military Petroleum Joint Stock Company (MIPEC)

- Location: Kien Hung Ward, Ha Dong District, Hanoi

- Scale of project: consists of 7 blocks of 25 stores, 47 townhouse and villas, 01 basement, 02 floor service, commercial

- Total project area: 55,485 m2

- Construction area: 12,277 m2

- Construction density: 35.3%

- Total number of apartments: 1564 apartments

- Utilities: cinema, health center, spa, yoga, gym, children's play area, park, 65% of the area is for trees, regulating lakes, internal traffic, swimming pools and walking trails

- The price is only from 15.3tr / m2

- Area of apartment: 55.3 m2, 60.7 m2, 74.5 m2

- Time of hand-over: Quarter 4/2018

Picture 2 3 Mipec city view project

Source: Mipec’s annual report 2016

- 1st floor: commercial services, community activities

- 2nd floor - 18th floor: apartment, total apartment of 1,902 apartments

- Facilities: tennis court, four-season swimming pool, gym, spa, green campus smart parking system, lakes

- Apartment area: 50m2 - 55m2 - 60m2 - 65m2 - 70m2 (from 2 to 3 bedrooms)

- Price: 14-17 million / m2

- Time of hand-over: Quarter 3/2018

Picture 2 4 Vesta project

Source: Hai Phat investment JSC’s annual report 2017

 Xuan Mai Complex project

- Investor: Xuan Mai Investment and Construction Joint Stock Company (Xuan

- Time of hand-over: Quarter 3/2018

Picture 2 5 Xuan Mai Complex project

Source: Xuan Mai Corp’s annual report 2016

Table 2 1 Pros and cons of Xuan Mai and competitors

ICID Complex - Convenient location, basic utility

- Use technology 4.0 with building equipments

in Reasonable design

- Higher price compare

to other products in region

K-Park - Nice location in Van Phu urban

- Project area is wide

- Good convenience

- Reasonable design

- Higher price than other previous projects but reasonable at saling time

- New investor in real estate field

Mipec city view - Starting price was low

- Good and enough convenience

- Project area is wide

- New investor in real estate field

- Higher price at present time

- Good convenience

- Project area is wide

- The reputable investor

- Location is far from centre

- 20% total apartments are commercial houses

- 80% total apartment are social houses

- Good project quality

- Location is far from centre

Source: author

Table 2 2 Overall assessment score of Xuan Mai and competitors

Strong points Coefficient ICID

Complex K-Park

Mipec city view The Vesta

Xuan Mai Complex

K-Park advantages: nice position, good convenience, good quality, reasonable

price, good overall project, strong distributors

Xuan Mai Complex advantages: Prestigious investor, modern construction

technology, good project quality, reasonable price, suitable design, normal convenience, strong distributors

The Vesta advantages: Prestigious investor, low price, good convenience, normal

quality, good sales policies

ICID Complex advantages: good position, good convenience, technology 4.0

used in project, reasonable design, good sales policies

Mipec city view advantages: low price, reasonable design, normal quality, good

sales policies

To compete with all competitors, Xuan Mai should concentrate on building quality, operation management quality, designing apartment which suitable with customer needs, build prestigious brand on the mid-range segment

2 2.2.2 Analysis of Xuan Mai's position in the mid-range apartment segment

- Xuan Mai Complex project:

+ Reasonable price compared to the market area of Ha Dong district

+ The area is suitable for most of demand 47 m2 - 61 m2 - 69 m2 - 80 m2 + Good quality works in mid-range apartment segment

- The Xuan Mai Corp’s system of regulations, procedures is in the complete stage XMH Company is in the stage of building business apparatus, sales team, communication department to improve the apparatus

- Location of Xuan Mai Complex is not convenient, far from the city center

- Build sales staffs and good management to meet the job

- Develop sale plans, PR, marketing to promote the image of XMH and Xuan Mai Complex Project

- Other real estate projects in the region are also being offered in 2017 and 2018 and they are also have many advantages, they compete directly to Xuan Mai

 Xuan Mai’s position in the mid-range apartment segment

Xuan Mai Corp has have many projects in Vietnam, specially in Ha Noi In Ha Dong district, Xuan Mai had six projects, Xuan Mai Complex is the eighth project here All Xuan Mai’s projects was sold well, hand-over on schedule, no dispute So, Xuan Mai Corp creates prestige with customers in Ha Dong in particular, and in Hanoi in general

Xuan Mai Corp should enhance the strengths: prestige of the investor, the quality

of the work, focus the segment of mid-range apartments, improve the quality of operation management of buildings, while improving the weaknesses: build a good working mechanism, attract staff, build a team of marketing and sales professional, improve the quality of after-sales care to catch up with the trend and meet the customer demand