Marketing strategy of hatra vietnam

BY DO MANH HUNG MARKETING STRATEGY OF HATRA VIETNAM FOR DISTRIBUTION ACTIVITY OF PERSONAL AND FAMILY CARE PRODUCTS HANOI, AUGUST 2018 Master Thesis... VIETNAM NATIONAL UNIVERSITY, HA

BY

DO MANH HUNG

MARKETING STRATEGY OF

HATRA VIETNAM FOR DISTRIBUTION ACTIVITY OF PERSONAL AND FAMILY CARE PRODUCTS

HANOI, AUGUST 2018

Master Thesis

VIETNAM NATIONAL UNIVERSITY, HANOI – INTERNATIONAL SCHOOL

NANTE UNIVERSITY, FRANCE

MARKETING STRATEGY OF

HATRA VIETNAM FOR DISTRIBUTION ACTIVITY OF PERSONAL AND FAMILY CARE PRODUCTS

Major: MASTER OF MARKETING AND PROSPECTIVE

Supervisor: Dr Đao Tung

Student: Do Manh Hung

Corhort: 2016-2018

HANOI, AUGUST 2018

Master Thesis

TABLE OF CONTENT

COMMITMENTS vi

ACKNOWLEDGEMENTS vii

PART I INTRODUCTION 9

1.1 Reason for choosing the topic 9

1.2 Research purpose, area of research, and research questions: 10

1.2.1 Purpose of the research: 10

1.2.2 The area of research 10

1.2.3 The research questions 11

1.3 Basic arguments of the research 11

1.4 Theoretical framework 11

1.4.1 Definitions 11

1.4.2 Theoretical framework 11

1.5 Research method 12

1.6 Data analysis 12

1.7 The limitations and structure of the research 12

PART II OVERVIEW OF HATRA VIETNAM 14

PART III THEORY OF MARKETING STRATEGIES FOR DISTRIBUTION ACTIVITY 19

3.1 Definitions 19

3.2 Market research 23

3.2.1 Research on customers and purchase behavior of customers 24

3.2.2 Research on goods 24

3.2.3 Determination of the size and characteristics of the market 24

3.3 Analysis of business environment 24

3.3.1 Macro environment analysis 24

3.4 SWOT analysis 27

3.4.1 Strengths 27

3.4.2 Weaknesses 27

3.4.3 Opportunities 28

3.4.4 Threats 28

3.4.5 Strategic combinations of S-W-O-T 28

3.5 The role, basic objective and contents of the marketing strategy 29

3.5.2 The basic contents of the marketing strategy 30

3.5.3 The roles of marketing strategies to the business 30

3.6 Some typical marketing strategies 31

3.6.1 Marketing strategy based on competitive position 31

3.6.2 Marketing strategy by development strategies 31

PART IV THE REALITY OF MARKETING STRATEGIES OF ENTERPRISES IN DISTRIBUTING FAMILY AND PERSONAL CARE PRODUCTS IN VIETNAM 32

4.1 The reality of market research and market segmentation of companies in the industry 33

4.1.1 Analysis and evaluation for market research activities and selection of target market 33

4.1.2 Market segmentation analysis 33

4.2 Analysis and evaluation of Hatra Vietnam's Marketing-Mix strategy 34

4.2.1 Product strategy 34

4.2.2 Price strategy 34

4.2.3 Distribution strategy 35

4.2.4 Promotion strategy 36

4.3 Analysis of the business environment of the company 38

4.3.1 Macro environment analysis 38

4.3.2 The company’s internal environment analysis 39

4.4 SWOT analysis (SWOT matrix) 41

4.5 Overall assessment of Hatra Vietnam's marketing activities 42

4.5.1 Assessment of the financial status and business performance of Hatra Vietnam 42

4.5.2 Advantages 42

4.5.3 Disadvantages 43

4.6 Competitor analysis 43

4.6.1 Distribution system Bubchen products: 44

4.6.2 Product distribution system of BabyCare 45

4.6.3 Unilever 46

4.6.4 P&G 46

4.6.5 Other competitors 47

4.7 Research on market strategies 47

4.7.1 Customer research 47

4.7.2 Product research 49

4.7.3 Scale and characteristics of personal and family care products market 49

PART V: PROPOSAL TO PROMOTE HATRA VIETNAM’S MARKETING

ACTIVITY AND IMPROVE MARKETING STRATEGY FOR HATRA VIETNAM 52

5.1 Mission, Vision, Core Values and Business Philosophy 52

5.2 The objective of Hatra Vietnam's marketing strategy for distribution of personal and family care products 53

5.2.1 Target market of Hatra Vietnam 53

5.2.2 The goal of the strategy 53

5.2.3 Implementation of the marketing strategy of the company 54

5.3 Development orientation of Hatra Vietnam in the coming time 56

5.4 Solutions to develop and expand marketing activities of Hatra Vietnam 57

5.4.1 Proposal for market research and selection of the target market for the company 57

5.4.2 Proposal to enhance sales distribution channels 59

5.4.3 Proposal for promotion, sales support solusions 60

5.4.4 Customer care 61

CONCLUSION 62

REFERENCES 64

Appendix 65

COMMITMENTS

I pledge that the ideas, content and suggestions in this report are the result

of studying, researching and acquiring knowledge from the instructor, and lecturers of the International Faculty of Vietnam National University Hanoi and Nantes University - French Republic All figures and tables in this topic a re the result of the data collection, analysis and evaluation process based on the knowledge and experience of the author himself through the studying, not the copy or duplicate of previous researched topics Above is the commitment of the author to the contents, ideas and suggestions of t his report

ACKNOWLEDGEMENTS

I would like to thank the lecturers of Internati faculty of the International School

of Vietnam National University Hanoi and Nantes University - French Republic for providing the basic knowledge as the foundation for my research in the graduation report, as well as in work and life I am truly grateful for the scientific and practical contributions to this report from Hatra Corp.'s Board of Directors Their comments and suggestions helped me understand and appropriately apply the rationale to my research about the marketing strategy for Hatra Vietnam

I would also like to express my gratitude for the support and contribution of lecturers from the International School of Vietnam National University Hanoi, and their cooperation with Nantes University - French Republic, which gave us a good learning and science researching environment

In particular, I would like to send my sincere thanks to Dr Dao Tung who, with great responsibility, has devoted his time and effort to guiding me to complete this report

LIST OF TABLES AND FIGURES

Table 2 1 Introduction to the capital investment of Hatra Vietnam 15

Table 2 2 Sales and profit of Hatra Vietnam in 7 recent years (million USD) 16

Table 2 3 Product portfolio of the company 16

Table 2 4 Product portfolio of the company 17

Table 2 5 Revenue structure by Hatra Vietnam (million USD) 17

Table 2 6 The development of the distribution system of Hatra Vietnam 18

Table 4 1 Performance of SWOT matrix of Hatra Vietnam 41

Table 4.2 Sales and profit of Hatra Vietnam in 7 recent years (million USD) 42

Table 4 3 The development of the distribution system of Hatra Vietnam 55

Fingure 3 1 Marketing strategy 19

Figure 4 1 Direct distribution channel 35

Figure 4 2 Indirect distribution channel 35

Figure 4 3 Bubchen’s German imported products 44

PART I INTRODUCTION

With the ever changing business environment, and harsh competition, each enterprise needs to find a proper way to keep pace with the process of international integration, constantly improving its position in the market Along with the growth of the national economy, Hatra Vietnam has achieved a lot of success in a changing and challenging environment Hoping to contribute to finding a way to retain Hatra Vietnam's position in the future, the author has selected the report topic "Marketing strategy of Hatra Vietnam for distribution of personal and family care products" Having analyzed the macro environment, and competitors, opportunities, as well as the general straties and marketing objectives of Hatra Vietnam, the report would further find the right marketing strategy, and propose the action plan to help Hatra's personal and family care products to be well imported and distributed to achieve high sales, maintain a strong position, continuously grow and expand its market

1.1 Reason for choosing the topic

From a certain point, the question is "What business are you in?" Marketing experts think the answer is varied and crucial to determining your strategy The process for getting the answer to the aforementioned question is useful for managers when allocating resources, thinking about future directions, and evaluating different performance indicators The first step is examining the needs, desires of customers, and the benefits drawn from competing products and services The second relates to market segments and the way companies choose to serve different customer groups or seperate customer groups (an important strategy) The third step involves technology and how it can meet the needs of the customer The fourth step is choosing a point in the value chain as well as deciding how to compete

Marketing strategies exist at three different levels At the company level, marketing provides invaluable inputs for future opportunities It brings deep understanding to answer the question What business are we doing? And more importantly, marketing helps answer the question: What business should we do? At the business level, marketing combines with other departments’ strategies to provide products and services to the market and hopefully would gain long-term competitive

advantage At the third level, marketing strategies include the marketing plan as well as the implementation and keeping control of the impact of the existing marketing efforts Simply put, segments must be carefully selected and clearly defined, proposals should

be positioned, products and distribution channels must be developed and marketing communications plans must be implemented

From the above problems, acknowledging that building a marketing strategy for

a company is crucial, which responds to the requirement of business development and

international integration trends, the author selected the topic of “Marketing strategy

of Hatra Vietnam for distribution of personal and family care products" The

study will provide relevant information and recommendations on marketing strategies for Hatra Vietnam in general and for the distributing acitivity of imported personal and family are products in particular

1.2 Research purpose, area of research, and research questions:

1.2.1 Purpose of the research:

The general purpose of the research is to study the theoretical and practical basis for developing the marketing strategy of consumer goods distribution enterprises On that basis, recommendations on marketing strategies for Hatra Vietnam and other companies

in the industry will be given The topic is studied for the following purposes:

- Study the theoretical basis on the role and objectives of developing marketing strategies The topic will focus on two main issues: why businesses need to develop marketing strategies, and the rationale and objectives of the business

- Research the marketing strategy of the current businesses, especially the specific strategies of Hatra Vietnam, the constraints and reasons of the existing development of marketing strategies

- Assess the current status of Hatra Vietnam's marketing strategy

- Finally, the report will provide recommendations on Hatra Vietnam's marketing strategy for the distribution of imported personal and family care products

1.2.2 The area of research

This report is a result of the research on units of Hatra Vietnam in the distribution system of imported personal and family care product The focus is on marketing strategy The data used in the report is taken from official sources and the results of several customer surveys conducted in distribution systems in Hanoi and Ho Chi Minh City Proposals and solutions are for the period until 2022

1.2.3 The research questions

What is the specific activity that the marketing strategy of Hatra Vietnam focuses on? The strengths, weaknesses, opportunities and challenges of Hatr a Vietnam's marketing strategy What recommendations to improve the marketing strategy of Hatra Vietnam? in particular and businesses in distribution of personal and family care products in general

1.3 Basic arguments of the research

The research results will contribute to the improvement of Hatra Vietnam's marketing strategy, helping Hatra Vietnam’s leaders to gain more materials to research and enhance the company's business development policy

This study examines, assesses and reinforces the existing marketing policies of Hatra Vietnam and identifies the limitations of the marketing strategy that affects the business activity of Hatra Viet Nam

- Personal and family care products

- Developing marketing strategies for distribution businesses

1.4.2 Theoretical framework

Research hypothesis:

- Business strategy and its influence on the marketing strategy of the business

- The economic environment is related to the research product

- Examples of successful marketing strategies

- The importance of marketing strategy to the development of the business

1.5 Research method

The integrated analytical method from domestic and foreign sources and the internet is used in all chapters of the thesis, in order to clarify the reasoning basis and assessment of the situation This study uses a systematic sampling technique to select

150 distributors, retail outlets, store chains of which the main focus is personal and family care products, direct distributors and retailers of personal and family care products to end-users and also direct partners to implement marketing strategies of Hatra Vietnam The study uses quantitative and qualitative methods suh as interviews with representatives of distributors, retailers; interviews with directors, deputy directors, sales managers, regional managers; agents of General Department, the Financial Accounting Department, the Marketing Department of the retail distribution network as well as that of the member companies of Hatra Vietnam

1.6 Data analysis

- Overview of Hatra Việt Nam

- Analysis of the marketing strategy of Hatra Vietnam

- The business results of in the year of 2016 – 2017

- Analysis of collected data related to the study

- Indentification of the existing limitations of Hatra Vietnam’s strategy

- Analysis of the causes of the limitations

1.7 The limitations and structure of the research

 Scope of research

The marketing strategy is broad area, and Hatra Corp is a diversified conglomerate,

of which the various products are distributed across geographies and cultures; therefore, its marketing strategy is broad and comprehensive This research is limited to researching marketing strategies for distribution of personal and family care products imported and distributed by Hatra As a result, the scope of the study is narrow, and it’s difficult to apply the results to all units under Hatra Corporation and Hatra Vietnam

- The research time and costs are limited

- Similar certain limitations of other scientific and social studies are inevitable

 Structure of the chapters of the research report: The content of the report, in

addition to the Introduction, is structured in six part as follows:

PART I: Introduction to Report

Report introduction includes: Research subjects, The reasons for choosing the topic, The purpose of the research problem and questions, Basic arguments about the meaning of research; Brief explanation of the research methodology, important concepts, and the limitations of research

PART II: Overview of Hatra Vietnam

PART III: Theoretical issues on marketing strategies for enterprises operating in the

distribution sector

Specifically, this chapter will introduce an overview of Hatra Vietnam, describe concepts of marketing, strategies, marketing strategies, marketing objectives, content, roles, and typical marketing strategies In addition, this chapter will cover basic theories and hypotheses that is based on the theories of marketing strateies for distribution of personal and family care products of Hatra Vietnam

PART IV: The reality of marketing strategies of enterprises in distributing family and

personal care products in Vietnam

PART V: Proposal to promote Hatra Vietnam’s marketing activity and improve

marketing strategy for Hatra Vietnam

PART VI: SOLUTION

PART II OVERVIEW OF HATRA VIETNAM

Specifically, this part will introduce an overview of Hatra Vietnam, describe concepts of marketing, strategies, marketing strategies, marketing objectives, content, roles, and typical marketing strategies In addition, this chapter will cover basic theories and hypotheses that is based on the theories of marketing strateies for distribution of personal and family care products of Hatra Vietnam

 About HATRAR Vietnam

Headquarter: 226 Vạn Phúc, Ba Đình, Hà Nội, Việt Nam

Office in Europe: Mollendorff Str 44 10367 Berlin, Germany

Hatra Vietnam was established as a set of separate companies: Hatra Import & Export; Hatra Agriculture; EuroFood; TH Brothers Vietnam., Ltd; Master Tran in Hanoi; Wingold in Da Nang City; Winpers in Ho Chi Minh City These are companies

in the special chain of selling and consumer goods imported and distributed by Hatra Vietnam according to the geographical areas of the North, the Central, the South and the category Since 2011 until now, Hatra Vietnam has invested over $ 20 million in these businesses, as shown in the following table:

Table 2 1 Introduction to the capital investment of Hatra Vietnam

Company

Total capital investment (million USD)

Investment contributed by Hatra

Hatra Import –

Consumer goods import

& export and distribution

Agricultural products, foodstuffs export;

consumer goods import

Hatra Agriculture.,

Food & beverage production; Green agricultural production, medicinal plant

plantation Wingold Đà Nẵng.,

Medicine and supplements import and distribution

HT Brothers Việt

Rossmann – Hatra Vietnam Venture

Hapro Distribution.,

Consumer goods import and distribution

Source: Financial Accounting Department of Hatra Việt Nam

Hatra Vietnam has a nationwide distribution network through nearly 100 major distributors, food and beverage retail chains and more than cooperative 3,000 retail outlets such as Vinmart, Mega Mall, Aon, Coop Mart, C & K, Fivi mart, Intimex, E Mart and grocery stores in its distributor's system The company now has a growth rate

of 25 - 30% and has more than 350 employees In addition, the company also cooperates with many domestic factories in production, processing, supplying raw materials and packaging for finished products Such co-operation activities have helped Hatra Vietnam cut import costs and lower the product costs to increase the

competitiveness of its products in the Vietnamese market At the same time, it helps Vietnamese partners develop their production, ensure the income for employees and create about 800 indirect jobs The famous brands imported and distributed by Hatra VIetnam such as: Isana, Altapharma, Baby Dream, BabyCare, Droppe Heiz, Bitburger, Aurora is widely introduced as having excellent quality, reasonable price for Vietnamese consumers; therefore, these brands have rapidly become favored products

in the Vietnamese market

Table 2 2 Sales and profit of Hatra Vietnam in 7 recent years (million USD)

Source: Marketing Department of Hatra Vietnam

On average, Hatra Vietnam's annual sales and profits increase by 25-30% per year since its projects are stable and profitable If the company's turnover is $ 7 million in 2011, the company's turnover reached $ 85 million by 2017, including export, import and distribution, retail Of which, sales dominated and accounted for over 65%

Table 2 3 Product portfolio of the company

4 Soap and shower gel:

Isana; Babydream

1 Eurofood Jelly

2 Dopper Heiz

1 Electric blanket

2 Induction stove

3 German kitchenware

4 German beer

5 German red wine

Source: Marketing Department of Hatra Vietnam

Table 2 4 Product portfolio of the company

Source: Marketing Department of Hatra Vietnam

Table 2 5 Revenue structure by Hatra Vietnam (million USD)

Table 2 6 The development of the distribution system of Hatra Vietnam

Unit: Number of agents

PART III THEORY OF MARKETING STRATEGIES FOR

DISTRIBUTION ACTIVITY

3.1 Definitions

According to the American Marketing Association Marketing is the process of

planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services, and ideas to create exchanges that satisfy individual and organizational goals Marketing is a human activity directed at satisfying needs and wants through exchange process (Philip Kotler, )

According to ALfre Chandler, strategy is the determination of basic long-term goals and the adoption of courses of action and the allocation of resources necessary for carrying out these goals Whereas, according to Rudolf Grunig and Richard Kuhn (2003), “The strategy is long-term, orienting the management to ensure the long-term completion of the company's main goals and objectives."

A strategy is a set of decisions about long-term goals, measures and means of

achieving them Strategy is different from tactics Strategy is a concept originated from the military In military terms, strategies are different from tactics as tactics refers to the conduct of a battle, while strategy refers to how to link battles together That means coordinating the battles to reach the final military goal

Marketing strategy is the way companies do to achieve its marketing objectives

Fingure 3 1 Marketing strategy

The marketing strategy basically addresses the following issues:

 What is the market the business will be in (market identification)

 Who is the company’s customer (focused customer identification)

 How are the company’s products or serviced positioned Why should customers buy frm our company, not from our competitors? (competitive strategy identification)

 What innovations and changes related to products, pricing, channels, communication will the company make? (marketing mix)

Marketing Mix (4Ps) is often used to implement specific marketing strategies into each market segment through its products, channel, media and price Details are as below:

 Product: general policies on product labeling, positioning, cancellation, amendment, design, packaging, etc

 Place: general channel policies on channeland customer service level

 Price: general pricing policies that should be followed for each product group for each market segment

 Promotion (also known as communication): general policies on communication, customer interaction activities such as: advertising, sales team, promotion, public relations, exhibition fairs, posts, customer service center, internet, etc From the basis of the above 4Ps, it has been developed into 7Ps, adding physical evidence, process, people Although there are many different definitions, but in short,

no matter how it is defined, strategy in business, especially marketing strategy, includes the following main content: Determining the basic, long-term goals of the organization; Collecting information, analyzing and proposing general plans of action; Choosing action plans, deploying and allocating resources to achieve that goal

Distribution means to spread the product throughout the marketplace such that a

large number of people can buy it Distribution involves doing the following things: A

good transport system to take the goods into different geographical areas A good tracking system so that the right goods reach at the right time in the right quantity A good packaging, which takes the wear and tear of transport Tracking the places where the product can be placed such that there is a maximum opportunity to buy it It also involves a system to take back goods from the trade Distribution can make or break a company A good distribution system quite simply means the company has greater chance of selling its products more than its competitors The company that spreads its products wider and faster into the market place at lower costs than its competitors will make greater margins absorb raw material price rise better and last longer in tough market conditions Distribution is critical for any type of industry or service The best price product, promotion and people come to nothing if the product is not available for sale at the points at which consumers can buy

Distribution system: is entire set – up consisting of procedures, methods,

equipment, and facilities, designed and interconnected to facilitiate and monitor the flow of goods or services from the source to the end user

Qualitative method: The qualitative research method is non-statistical, its

methodological approach is primarily guided by the concrete material at hand Data collection in qualitative research is seldom based on unstructured or semi-structured, but methodologically flexible techniques, e.g individual depth interviews or group discussions that are suited to elicit great detail and a comprehensive view Qualitative research typically is exploratory and/or investigative in nature Its findings are often not conclusive and cannot automatically be used to make generalizations In this thesis, I collected qualitative data from written documents and artifacts such as customers’ email, feedbacks and so forth to study topic These data may provide factual information and insight into how customer used products, what their knowledge and opinions related to family care products as well as personal care products that they are using in daily life These qualitative data would be analyzed in conjunction with quanitative data too

Quantitative method: Quantitative Research is used to quantify the problem by

way of generating numerical data or data that can be transformed into usable statistics It is uses measurable data to formulate facts and uncover patterns in research In quantitative research, data can be gathered from either a primary or a secondary source Primary data refers to data that has been collected directly through first-hand experience The most common means of gathering primary data for quantitative research is through the use of questionnaire, interviews and surveys, Secondary data, on the other hand, is pre-existing available data collected from second-hand sources The type of data which will be collected depends on a number of factors, such as (1) the objectives of the research and (2) time and resources constraints In this study, the quantitative data were secondary source which included financial reports, annual reports of HATRA Vietnam from years 2011-2017 Other documents such as independent assessment reports of financial institutions, market research firm in Vietnam were collected to serve for the research’s analizing

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

and how it is distinguished from products from competitors In order to position products or brands, companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through the marketing mix Once a brand has achieved a strong position, it can become difficult to reposition it

Positioning is one of the most powerful marketing concepts Originally, positioning focused on the product and with Ries and Trout grew to include building a product's reputation and ranking among competitor's products Schaefer and Kuehlwein extend the concept beyond material and rational aspects to include 'meaning' carried by

a brand's mission or myth Primarily, positioning is about "the place a brand occupies in the mind of its target audience" Positioning is now a regular marketing activity or strategy A national positioning strategy can often be used, or modified slightly, as a tool to accommodate entering into foreign markets (Source: From Wikipedia)

Pull and Push marketing?

Pull marketing is any method a company uses to generate demand for a product

This is contrasted with “push” marketing, which is a strategy intended to sell out an existing supply of a product Modern pull marketing uses various media channels to generate interest about a product or company, encouraging customers to seek out the product or company on their own This is especially popular and effective within Internet marketing, because pull marketing benefits greatly from independent social behavior like word-of-mouth and the “viral” content effect

Service industry companies use pull marketing to generate interest in new services

or to create positive feedback about the company If a massage clinic, for example, wanted to increase its business, it could use social media sites to encourage their customers to share information about the clinic with their friends People are much more likely to buy a product or visit a business on the recommendation of a friend Through social networking, the massage clinic can rely on some of its existing customers to “advertise” for the clinic through recommendations

Push marketing focuses on taking the product to the customer, and putting the

product in front of the customer at the point of purchase This type of marketing strategy hopes to minimize the amount of time between a customer discovering a product and buying that product To accomplish this, companies use aggressive and wide-reaching ads

to make the biggest and most immediate impact they can on customers

Traditional marketing is often synonymous with push marketing Classic marketing strategies like primetime television advertisements, buy one get one free coupons, and direct mail catalogs are all examples of push marketing This marketing strategy casts a wide net in the hopes of grabbing as many potential customers as possible It does not try

to build relationships with customers but focuses only on pushing products towards them

Statements about value, quality, and innovativeness are emphasized to try and create immediate customer demand The greatest advantage of push marketing is that it produces quick results and makes clear statements to customers It is less concerned with branding, and more concerned with creating an instant demand for a new product The major disadvantage of push marketing is that it can be expensive and only produce temporary effects Since the goal is not to create long-term customer relationships, push marketing strategies have to constantly make new pitches about the value of products It keeps the customer at a distance, meaning they must constantly be reengaged

A distributor is an intermediary entity between a the producer of a product and

another entity in the distribution channel or supply chain, such as a retailer, a value-added reseller or a system integrator The distributor performs some of the same functions that a wholesaler does but generally takes a more active role At a minimum, distributors handle payment and procurement but, unlike wholesalers, their roles can be much more complex

Distributorship arrangements are typically used as a low risk means of expanding business

into new markets or territories The types of distribution agreements are as follows:

 Exclusive distribution agreements give the distributor the exclusive right to sell the product in the territory covered by the distribution agreement The supplier will be prevented from selling the goods in the relevant area either on his own account or through agents or other distributors

 Sole distribution agreements, where the distributor will be the only distributor with whom the supplier will deal in a particular territory The supplier will not

be prevented from selling its products in the territory on its own account In return, the distributor will normally agree to regard the supplier as his sole supplier of the type of goods which are the subject of the agreement

 Selective distribution agreements limit the number of distributors the supplier will appoint in a particular territory

 Non-exclusive distributorship agreements give the distributor no exclusive rights to the supplier's products, so the supplier can appoint other distributors in the same territory (Source: twmsolisitors.com)

- Determination of the size and characteristics of the market

- Market analysis as Michael Porter's Five Forces model

3.2.1 Research on customers and purchase behavior of customers

This is the first step in market research for business, because customers are the key deciding the position of the business in the market Customer research include the following contents: identifying customers of the business, identifying factors affecting the decision of buy of customers, and their buying behavior

3.2.2 Research on goods

This step is to satisfy an important requirement of marketing, which is to only produce the goods that the market needs, not what the company can produce Research

on goods includes product quality research and product competitiveness research

3.2.3 Determination of the size and characteristics of the market

Determining the market size is determining the market need for a specific goods, in which the market demand is the volume of goods that can be sold on a certain scale, normally on a yearly basis, and is is specified by the physical goods or its value The market volume can be estimated for the entire market or for market segments It is affected various factors such as economy, technology, culture, and marketing effort,; therefore, enterprises should carefully study all factors to precisely estimate the current and future market volume Besides, for service enterprises, it is also vital to understand the characteristics of each market, consumer market, business market, in terms of their structure, product offering, competition, purchasing decision, requirement for service, distribution channels, etc in order to set out an appropriate trategy, serving target customers more effectively

3.3 Analysis of business environment

This is the first activity of each business when planning a marketing strategy This activity includes macro environment analysis and market research Analyzing the business environment of the business will help the company to recognize the opportunities as well as the risks from the market, thereby to have reasonable and timely marketing policies to take advantage of opportunities or deal with the danger

3.3.1 Macro environment analysis

The most widely studied model for macroeconomic research is the PEST model, which examines the effects of macroeconomic factors on business performance The four factors are: Political, Economics, Sociocultural, and Technological

+ Stability: includes elements of political and diplomatic conflicts of legal

institutions Institutions of high stability will be able to create favorable conditions for business operations and vice versa Unstable institutions and conflicts will adversely affect business operations in its territory

+ Tax policy: The policy of export tax, import tax, consumption tax, income tax,

etc will affect the revenue and profit of the enterprise

+ The relevant laws and policies: investment law, enterprise law, labor law,

anti-trust law, anti-dumping law, etc.; trade policy, industry development policy, economic development policy, taxation, competitive regulation policy, consumer protection policy

3.3.1.2 Economic factor

The impact of the economic environment is more direct and dynamic than some other factors of the macro environment The developments of the macroeconomic environment always contains different opportunities and threats for different businesses in different industries, having a potential impact on business strategies Some basic factors are most concerned about: gross domestic product (GDP) and gross national product (GNP) trends; interest rates and interest rates trend; international balance of payments; level of inflation; tax system and tax rates

- Life expectancy, health status, nutrition, eating habits

- Average income, income distribution

- Lifestyle, education, taste of art, life phylosophy

3.3.1.5 Integration factor

Integration factor is a new factor that enterprises have analyzed in recent years, as the process of economic integration has become more and more powerful, creating opportunities for businesses and countries to distribute in expanding its business and production Globalization creates competitive pressures, and competitors from every region The integration process will make enterprises adjust in line with the comparative advantages, labor division in the region and the world In addition, barriers to trade will

be gradually removed, businesses have the opportunity to trade with partners located far away from their geographic areas, customers of these enterprises are now not only from the domestic market where businesses are business, but from all over the world

3.3.2 Analysis of the business’s internal environment

The internal environment is the internal context of the business, including the controllable elements of the business Analyzing the internal environment of a business is the foundation to help enterprises know their strengths and weaknesses against their competitors, and to help managers know the ability to grasp the competitive advantage in each period, so that appropriate and timely make decisions Internal environmental analysis consists of three main areas: resources identification and organization’s position and difference identification

3.3.2.1 Resources identification

Resource identification often follows the 5M rule in management, including: Money, Man, Machine, Material, and Management

3.3.2.2 Organization’s position and difference identification

Any business that exists in the market has a certain position, the business can be the market leader, may be the market challenger but also may be the follower But businesses are trying to make a difference, and such difference will help businesses attract customers and give themselves a certain place in the market In addition, the position of businesses

in different markets is different, a business can lead this market but is a minor player in other markets Therefore, when determining the position of a business, it is needed to pay attention to which is the key market of that enterprise and what is the difference between this enterprise and its competition that can improve their position

In business practice, many businesses do not know how to make the most of their strengths, analyzing the strengths of the company to determine if they have any advantage over their competitors and efficiently use that advantage to enhance its competitiveness

3.4.2 Weaknesses

Weakness is all that a company misses or does not do well as other competitors or that when the company is placed in a disadvantageous position Weaknesses may or may not reduce the company's competitiveness, depending on each weakness Analyze the weakness of the business to see the bad points in the business, the need to make timely changes or plans to change and improve in the future However, there are also weaknesses that businesses cannot overcome or are not able to overcome yet The important point of analyzing weaknesses is that enterprises must be aware of their weaknesses in order to plan their strategies appropriately

3.4.3 Opportunities

Attractive opportunities in trade are the ability to meet the needs of customers that have and will appear on the market that is considered to fit with the objectives and resources of enterprises, so qualified enterprises that can take advantage to exploit well and pass it will earn profit Opportunity analysis is to determine where good opportunities are so that there are direction to exploit the opportunities faster and more effectively than other businesses

3.4.4 Threats

The risk appears parallel to the opportunity of the business, drastically dominant all activities of the business acitivities Risks include, but are not limited

to, lower priced competitors, goods that are more likely to have substitutes, changes

in buyer’s demand, and preferences, threats that are beyond control of enterprises or organizations They can only somehow avoid the risk that happen to them and when facing with it, try to reduce the damage to the lowest level Risk analysis helps enterprises make the necessary changes and adjustments to the fluctuations that negatively affect their production and business activities

3.4.5 Strategic combinations of S-W-O-T

After analyzing all the strengths, weaknesses, opportunities and threats, the company will develop strategic combinations The first is a combination of strengths and opportunities (S-O) The goal of this combination is to use the strengths of the organization

to exploit the most effective opportunities available on the market The second is a combination of weakness and opportunity (W-O), which is a combination of taking advantage of the opportunity to overcome weakness Third, using strengths to overcome or mitigate risk is a strategy combining strengths and challenges (S-T) Finally, the combination of weaknesses and challenges (W-T), which leverages on the strength of the business in the weak parts and try to overcome and limit losses due to challenges or risks

3.4.5.1 Business’s objectives determination

The goals of the business are important factors that underpin all activities as well

as business development strategies Marketing objectives are usually driven by the goals

of strategic planning In cases where the company is fully marketing oriented, these two target groups overlap In other cases, targets should be categorized and measured for its deployment Common marketing objectives are:

- Profit shown in% of sales or absolute amount that business is expected to achieve after a period of implementation of marketing strategy

- Sales volume, expressed in the expected market share or absolute sales volume

- The number of commercial intermediaries involved in consuming products

- Consumer’s awareness and perception of the brand’s credibility and image of the business on the market

At every stage of the business process, marketing focuses on specific goals These objectives provide a framework for marketing planning

3.4.5.2 Marketing - Mix policy for target market

Marketing - Mix is the coordination or arrangement of marketing tools to suit the actual business situation of each business to achieve marketing objectives in the target market The term was first used in 1953 by Neil Borden, president of the American Marketing Association, then developed by E Jerome McCarthy in 1960 and Boom - Bitner in 1981 into a broader marketing mix called 7P, for businesses in the service sector Marketing mix is the result of the strategic planning process of every business, after thoroughly studying the strengths, weaknesses, opportunities and challenges of the business This mixture includes the following elements:

- Product

- Price

- Place

- Promotion

3.5 The role, basic objective and contents of the marketing strategy

3.5.1 The objective of the marketing strategy

The ultimate goal of a marketing strategy is to ensure the profitability of the business when participating in doing business on the market The objectives of a marketing strategy are to specify the business objectives of the business in a certain period The goals of a marketing strategy are usually sales, profits and market share, the quality and outstanding characteristics of the product, price, service, and the business’s position Normally, a marketing strategy can have many goals; these goals may not be consistent with each other and each goal is of different importance so it needs to be prioritized in the executing the strategy

3.5.2 The basic contents of the marketing strategy

 Target market selection:

Based on the results of the analysis of the current market environment, the current marketing strategy and the objectives that the business wishes to achieve, the aim of selecting a target market is selecting the target groups of potential customers to tackle and serve with certain products Targeted markets selected by the business might well

be a segment or segments of the entire market Choosing the target market should clarify the following key issues:

+ Type of products to be sold to satisfy the needs of customers

+ The ways to to satisfy that need

+ The size and potential growth of that market

+ The ability to sell and gain profit in that market

+ The degree of compatibility between the needs of customers in the selected markets and the ability to satisfy those needs

 Formation of marketing mix

Maketing mix is a set of variables that a business can control and manage, and it is used in the effort to achieve the positive effects and influence it could have on the target customers

3.5.3 The roles of marketing strategies to the business

Without a proper marketing strategy in line with changing environmental conditions, it is difficult for businesses to survive and grow In other words, planning a marketing strategy is one of the first and foremost tasks of every business, because it directly decides the existence and development of the business Marketing strategy of the business has the following main roles:

Discover the opportunities and threats in business: With the integrated research on the market to detect the current and potential needs of the market, the development prospects of the market, enterprises can quickly identify and make the best of business opportunities, mitigate the adverse changes and impacts of the environment Marketing strategies also help businesses not be passive to the unexpected impacts of market conditions, but also clearly detect or predict the opportunities and threats from the environment, thus actively making timely decisions, which then increases the likelihood

of success in the increasingly fierce competition in the market Effectively allocate resources to achieve the objectives: Detailed planning of business policies such as pricing policy, product policy, promotion and support policies, distribution policies, thus helps

enterprises efficiently allocate resources (time, finance, human resources, etc.) for defined objectives and activities of different fuctions and departments of the enterprise in a unified, synchronous and flexible manner to best influence the market

3.6 Some typical marketing strategies

Marketing strategies of each company are diverse and complex, depending on the business case and the business that the company is in There are many different approaches and categories, the following are some typical strategies

3.6.1 Marketing strategy based on competitive position

Classifying a marketing strategy based on competitive position is one of the often used and applied classification Accordingly, enterprises are ranked and classified according to their market share and competitive position in the industry

In the market for a certain period of time at a certain level, some brands play different roles of: market leader, market challenger, follower and side brands

3.6.2 Marketing strategy by development strategies

According to Fred R David (2003), business strategies are divided into four strategic groups:

- Vertical strategic group

- Intensive strategy group

- Expansion strategy group

- Other strategic groups:

+ Joint venture strategy: Two or more companies form an independent company for the purpose of cooperation

+ Narrow-down strategy: Reinforce through cost and asset reductions to secure decreasing revenue and profits

+ Cut-off strategy: Sell a branch or part of a company

+ Liquidation strategy: Sell all tangible and intangible assets

+ Integrated Strategy: Pursue two or more strategies simultaneously

-

PART IV THE REALITY OF MARKETING STRATEGIES OF ENTERPRISES IN DISTRIBUTING FAMILY AND PERSONAL

CARE PRODUCTS IN VIETNAM

Due to the opening mechanism, there are many foreign companies entering the Vietnamese market to produce and distribute These include companies such as P

& G, Unilever, oral-B, Gillette, S.C Johnson and son, Rossmann, Bubchen, Baby Care, etc These companies enter the Vietnamese market with consumer products for everyday life that any citizen needs

P&G Co and Unilever Co specialize in soaps, shampoos, shower gel, women's cosmetics, baby wipes, baby underwear, baby powders, toothbrushes, toothpastes ORAL-B Co., Gillette dominates the market with Gillette shaving heads, Gillette shaving foam, Duracell batteries, ORAL-B toothbrushes, mouthwashes, dental floss, etc S.C.Johnson and Son Co specializes in sanitary water, floor cleaning branded Duck, room sprayer, mosquito incense, etc Although each company has its own products, they have been very successful in creating product lines that cater to the needs

of the people we call "Consumer Goods"

These companies, before entering the Vietnamese market, have carried out marketing activities such as market research, market segmentation And until their products are officially available in Vietnam, two methods of direct and indirect distribution that the companies have chosen have worked And this is the similarity of foreign companies doing business in Vietnam The direct distribution, each company has

a sales force These are both the representatives of the sales company and the collectors of feedback from the customer, the market for the product; thus, the company knows the desire and demand of the market to implement policies and strategies to adjust the goods

to suit the market demand For indirect distribution, these companies use a network of distributors and distributors acting as intermediaries, representing the company, being responsible for selling and bringing the company's products to the consumer