INTRODUCTION
Nowadays, marketing is obviously a more and more vital in
the successes of every enterprise. However, not many of the
companies
in
Vietnam
marketing
activities,
have
paid
adequate
especially
when
attention
to
domestic
and
both
global competition is getting fiercer and fiercer.
Being
one
of
conditioners
certain
the
in
companies
Vietnam,
success
conditioners
have
establishment.
conditioners
in
Ferroli
this
has
been
The
the
the
company
for
in
in
Nam
Its
over
modest
reason
Viet
field.
increased
However,
competitiors’.
specializing
selling
has
sales
of
air
since
its
growth
comparison
this
achieved
sales
years
partly
air
of
with
lies
air
other
in
its
marketing. After taking a close look at Ferroli Viet Nam’s
performance, I decide to choose “Marketing strategies of
Ferroli Viet Nam” as the topic for my field study report
with
a
view
to
examiming
Ferroli
Viet
Nam’s
marketing
strategy and making some recommendations to improve it.
Ferroli
Viet
Nam
has
a
lot
of
business
activities,
but
because of limited time, this report focuses only on the
company’s
marketing
business,
that
Vietnam.
is
activities
air
for
conditioners,
one
on
line
the
of
market
its
in
Apart from the introduction and conclusion, the report is
divided into 3 chapters as follows:
Chapter 1: Theoretical Framework
Chapter 2: The marketing Strategy of Ferroli Viet Nam
Chapter
3:
Some
Recommendations
to
Improve
Ferroli
Viet
Nam’s Marketing Strategy.
Chapter 1:
Theoretical Framework
1.1. The concept of marketing
1.1.1.
The definition of marketing
Today’s central problem facing business is not a shortage
of goods but a shortage of customers. Most of the world’s
industries
consumers
can
can
product
buy.
far
more
Overcapacity
goods
than
results
from
the
world’s
individual
competitors projecting a greater market share growth than
is posible. If each company projects a 10 percent growth in
its
sales
and
the
total
market
is
growing
by
only
3
percent, the result is excess capacity. This in turn leads
to
hyper
competition.
Competitors,
desperate
to
attract
customers, lower their prices and add give aways. These
strategies
ultimately
mean
lower
margins,
lower
profits,
some failing companies, and more mergers and acquisitions.
Marketing is the answer to how to compete on bases other
than price. Because of over capacity, marketing has become
more important than over.
If forced to define marketing, most people, including some
business managers, say that marketing means “selling” or
“advertising”. It’s true that these are parts of marketing.
But marketing is much more than selling and advertising.
Today, marketing must be understood not in the old sense of
marketing a sale-“telling and selling”-but in the new sense
of satisfying customer needs. Selling occurs only after a
product
is
produced.
By
contrast,
marketing
before a company has a product. “Marketing
that
managers
extent
and
intensity
opportunity
product’s
current
undertake
and
exists.
life,
performance,
assess
to
by
learning
find
measure
whether
continues
new
improving
from
product
does
the
long
is the homework
needs,
determine
Marketing
trying
customers
to
stsrts
a
their
prifitable
throughout
customers
the
and
keep
product
appeal
and
sales
results
and
managing repeat
performance”1.
Actually,
So
there
that
is
no
single
term
and
“marketing”
means?
universally
agreed
definition of marketing. The American Marketing Association
defined marketing “is the process of planning and executing
the
conception,
pricing,
promotion
and
distribution
of
ideas, goods, and services to create exchanges that satisfy
individual and organizational goals”2.
The writer of the
book “The Silk Road to International Marketing” had another
definition as follow: “Marketing is the process by which
decisions
are
made
in
a
totally
interrelated
changing
business invironment on all the activitied that facilitate
exchange in order that the targeted group of customers is
satified and the defined objectives accomplished ”3.Though
there
are
dfinitions
process
many
of
of
definitions,
marketing
giving
is
a
the
something
certral
part
exchange
of
value
of
process
in
any
–
the
return
for
something of value. Or in other words, it’s the process of
tranferring
between
two
or
more
parties
of
tangible
or
intangible items of value(see figure 1.1).
Cash,
debt,
Marketer
Goods, Services,
ideas,
People and Places
Health,
time,
votes,
behavior,
etc
Customers
Wants and needs.
safety,
comfort,
transportation,
beauty, productivity, etc.
Figure 1.1: the exchange process.
Source: Courtland L. Bovee, Jonh V. Thill , “Marketing”, 2nd
edition, p.6.
For marketing to occur, at least four factors are required:
(1) two or more parties with unmet needs, (2) a desire and
ability to satisfy them, (3) communication between
the
_______________________
1 Amber,
T.and Styles, C.(2000), The Silk Road to International Marketing,
Harlow: FT Prentice Hall
2
Arch G. Woodside(1990), Outdoor advertising as experiments, Journal of the
Academy of Marketing science.
3 Berkkowitz, Kerin, Hartley, Rudelius, (1990), Marketing, 2nd edition, Irwin
McGrawHill.
parties,
and
(4)
something
to
exchange4.
Here’s
what
Berkowitz stated in his book “Marketing”. As marketing is a
kind if exchange, certain conditions must exist before the
exchange can occur.
1.1.2.
The goals of marketing.
“Today’s successful companies at all levels have one thing
in common; their success is founded upon a strong customer
focus and heavy commitment to marketing”5. They motivate
everyone in the organization to deliver high quality and
superior value for their customers, leading to high levels
of customer satisfaction. These organizations know that if
they take care of their customers, market share and profits
will follow. Creating customer values and satisfaction is
at
the
very
heart
of
modern
marketing
thinking
and
practice. The goal of marketing is to attract new customers
by promising superior values, and to keep current customers
by
delivering
satisfaction.
When
a
company
succeeds
in
creating more values for customers than its competitors can
do, that company is said to enjoy competitive advantage in
an in dustry.
1.2. Competitive Analysis
It is the increasingly emerging markets that have create
favorable
conditions
for
the
rapid
development
of
world
trade and investment, which is well – manifested in the
sophisticated growth of a number of global companies. To
compete in one or more foreign markets, companies not only
need to broaden relentlessly their sources of competitive
position. One particularly useful techniqui in analyzing a
firm’s compatitive position relative to its competitors is
SWOT(strengths.
analysis
important
aims
to
Weaknesses,
to
the
isolate
future
opportunities,
the
of
key
the
and
issues
firm
and
threats)
that
will
be
that
will
be
addressed by subsequent marketing strategy. A SWOT analysis
divides the in formation into two main categories (internal
factors and external factors)
_________________________
4 Courtland L. Bovee, Jonh V. Thill, (2000), “Marketing”, 2nd edition
5
Crag,
C.S
and
Douglas,
S.P.
(2000),
International
Marketing
Research,
Chichester: Wiley
and
then
further
opportunities)
into
positive
and
negative
factors
could
be
upon
their
aspects
aspects
(strengths
(weaknesses
and
and
threats).
The
internal
weaknesses,
depending
viewed
as
impact
strengths
on
the
or
firm’s
positions; i.e., they may represent strength for one firm
but a weaness, in relative terms, for another. They include
all of the marketing mix (product, price, promotion and
place strategy) as well as personnel and finance.
The external factors, which again may pose a threat to one
firm
but
create
technological
opportunities
changesm
to
legilation,
another,
include
socio-cultural
differences, and change in the market place or competitive
position.
1.3. Global Marketing Strategy
Interms of globalization, worldwide businesses use global
marketing when they take the same or similer approach or
content fro one or more elements of the marketing mix, that
is, the same ore similar brand names, advertising. And so
on in diffent countries. Although most of the multinational
companies
using
global
marketing
mix-product,
pricing,
promotion and place – are standardized. Business can make
some elements of marketing more global and others less so.
Accordingly, possible adaptations that firms might apply to
their product, promotion, price, and place when they enter
through the foreign markets will be provided in this part.
1.3.1.
There
Product
are
five
international
product
and
promotion
strategies for a company to extend its market base into
other geographic markets(See table 1.1).
Straight
foreign
extension
without
means
any
marketing
adaptation.
the
Top
product
manager
in
the
asks
its
marketing people to “find customers for the product as it
is”. As a result, it is seen as easiest product marketing
strategy
and
may
be
the
most
profitable
one
as
well.
However, the company should first determine whether foreign
consumers use that product or not. Straight extension has
been successful with cameras consumer electronics, and many
machine
tools.
involves
no
This
strategy
additional
is
tempting
product
because
development
it
cost,
manufacturing changes, or promotional modification. But it
can be costly in the long run if products fail to satify
foreign consumers.
Table
1.1:
strategies.
Five
international
product
and
promotion
Product
Do not change Adapt
Develop
product
new
product
product
Promotion
Do
Source:
not Straight
change
Product
extension
adaptation
promotion
invention
Adapt
Communication Dual
promotion
adaptation
Subhash
Product
C.Jain
(1995),
adaptation
international
marketing
management
Product adaptation involves changing the product to meet
local conditions or prefernces. There are several levels of
adapdation. A company can produce a regional version, a
country version, a city version or even promotion retailer
versions of its products. Although, products are frequently
adapted to local tastes, in some instances they must be
adapted to local superstitions or beliefs, too.
Product invention consists of creasing something new the
foreign market. It can be divided into two forms. The first
is
backward
invention,
which
means
reintroducing
earlier
products forms that happen to be well adapted to the needs
of a given country. And forward invention is to create a
new product to meet a need in another country.6
1.3.2.
Promotion
Companies can either adopt the same promotion strategy they
used in home market or change it to suit for each local
market. Although some global companies use a standardized
promotion campaign changes might be needed to comply with
local regulations and references. There are four different
levels of adapting promotion stratefy.
_______________________
6 Subhash C.Jain (1995), Intenational Marketing Management
Firstly, companies can use one message everywhere, varying
only the language, name, and colors. That is because colors
might be changed to avoid taboos in some countries.
Also, names and slogan may havet to be modified in some
countries.
Secondly,
companies
may
use
the
same
them
globally but adapt the copy to each local market. Thirdly,
companies can develop a global pool of advertising from
which
each
Finally,
country
some
selects
companies
the
most
allow
appropriate
managers
to
one.
create
a
specific advertising – within guidelines, of course.
Other companies follow a strategy of communication adapting
their
advertising
Although
it
messages
retains
without
the
any
scale
product
economics
changing.
on
the
manufacturing side the firm sacrifies protencial saving on
the
communication
adaptation.
It
is
way
.
another
changing
both
strategy
the
product
is
dual
and
the
communication to face local differences.
1.3.3.
Price
Global
companies
face
several
problems
in
setting
their
international prices. Those problems must deal with price
escalation,
tranfer
prices,
dumping
charhes,
and
black
markets.
Price escalation problem occurs when companies sell their
goods
abroad.the
foreign
prices
probably
will
be
higher
than their domestic ones because it must add the cost of
transportation,
margin,
and
tarriffs,
retailer
importer
margin.
margin,
Depending
wholesaler
on
these
added
costs, the product may have to sell for two to five times
as much as in another country to generate the same profit.
Since cost escalation varies from country, companies have
three price setting approaches in different countries.
Setting a uniform price everywhere: charging the same price
everywhere in the would. By this method, companies would
earn quite different price in different countries because
of
varying
escalation
costs.
Also,
this
strategy
would
result in too high price in poor countries and not high
enough in rich countries.
Setting a market-based price in each country: charging what
each
country
could
affort.
But
this
strategy
ignores
differnces in the actual costs from country to country. In
addition,
it
could
lead
to
a
situation
in
which
intermediaries in low-price countries reship to high-price
countries.
Setting
a
cost-based
price
in
each
country:
using a standard markup of its costs everywhere. But this
strategy might price out of the market in countries where
it costs are high.
Another
problem
arises
when
a
company
sets
a
tranfer
price(i.e, the price that it charges to another unit in the
company)
for
subsidiaties.
goods
If
that
company
it
charges
ships
too
to
high
its
a
foreign
price
to
a
subsidiary, it may and up paying higher tariff duties, even
while
paying
company
loewer
charges
its
income
taxas
subsidiary
in
too
that
little,
country.
it
can
If
be
charged with dumping. Dumping occurs when a company charges
either less tan it costs or less than it charges in its
home market, in order to enter or win a market. 7 Various
governments
are
watching
for
abuses
and
often
force
companies to chargse the arm’s-length price – that is, the
price
charged
by
other
competitors
for
the
same
or
a
problem.
A
similar product.
Global
companies
also
face
the
black-market
black market means the same product is sold at different
price
geografically.
Dealers
in
the
lower-price
country
find ways to sell some of their products in higher-price
counrtries, thus earning more.8 Very often a company finds
some distributors buying nore than they can sell in their
own country and reshipping goods to another country to take
advantage
if
price
differences.
Multinationals
prevent
black
market
by
policing
raising
their
prices
to
lower-cost
the
try
to
distributors,
by
distributors,
or
by
altering the product characteristics or sevice warranties
for different countries.
Moreover, one challenge o global pricing in recent years is
that countries with overcapacity, cheap currencies, and the
need to export aggressively have pushed prices down and
devalued
their
currencies.
For
multinational
firms
this
poses great difficulties. Sluggish demand and reluctance to
pay higher proce make selling in these emerging markets
harder. Instead of lowering prices, and taking a loss, some
multinationals have found more lucratice and creative means
to deal with this problem.
_____________________________
7 Keegan, Warren J.(1995), Multinational Marketing Management
8 Kotler, Philip(2000), Marketing Management.
1.3.4.
Global
Place(Distribution channels)
companies
must
take
a
whole-channel
view
of
the
problem of distributing products to final consumers. Figure
1.2 show the three major links between the seller and the
ultimate user. In the first link, seller’s international
maketing
hearquarters
international
other
division
maketing-mix
the
export
makes
decisions
element.9
The
second
department
on
channels
link,
or
and
channels
between nations, moces the products to the boders of the
foreign nations.10 The decisions made in this link include
the
types
on
intermediaries
(agents,
tradeing
companies)
that will be used, the type of tranportation (air, sea),
and the financing and risk arrangements. The third link,
channels within foreign nations, moves the products from
their foreign entry point to final consumers.11
Channels of distribution within countries vary greatly from
nation to nation first, there are large differences in the
numbers and types of intermediaries serving each foreign
market.
Long
channels
of
distribution
means
that
the
consumer’s price ends up double or triple the importer’s
price. Another difference lies in the size and character of
retail
units
abroad.
Breaking
bulk
remains
an
important
function of intermediaries and helps perpetuate the long
channels of distribution, which is a major abstacle to the
expansion
of
large-scale
retailing
countries.
1.4. The marketing mix strategies
in
developoping
Philip
Kotler,
in
his
book
“Principles
of
Marketing”;
defines marketing mix as “the set of controllable tactical
marketing tools – product, price, place and promotion –
that the firm blends to produce the response it wants in
the target market”12. These ingredients must be manipulated
in a manner which ensures targeted customers are satisfied,
marketing
strategies
are
implemented
and
desired
brand
positioning is achieved.
_______________________
9,10,11 Charlers Hill(1997), International Business
12 Philip Kotler, Gery Armstrong, John Saunders, Veronica Wong, principles of
Marketing, 2nd edition,p.97
Figure
1.2:
whole-channel
concept
marketing.
Seller
Seller’s international
Marketing
headquarters
for
international
Channels between
nations
Channel within foreign
nations
Ultimate buyers
Source: Chatles Hill(1997), international Business
Chapter 2
The Marketing Strategy of Ferroli Viet Nam
Ltd
2.1. An InTroduction to Ferroli Viet Nam.
2.1.1
Company development
Ferroli Viet Nam was founded on 12th August 2002. Ferroli
Viet Nam’s headquarters was located at 193 Hoang Quoc Viet
Ha Noi. It has 4 branches and plants nationwide in Ha Noi,
Hai
Phong,
Bac
Giang
and
Lai
Chau,
and
a
network
of
distributiors around the country. Since its establishment,
Ferroli
Viet
conditioners,
Nam
has
operated
electronics,
in
medical
various
fields:
equipment,
air
technical
machinery and equipment, etc. After two years of operation,
Ferroli
Viet
information
Nam
expanded
services,
into
supplying
other equipment. Early 2007,
other
and
areas
assembling
such
as
lifts
and
Ferroli Viet Nam opened a new
factory in Hai Phong for producing and selling construction
materials. It also opened a new sales representative office
for selling Viglacera’s products.
2.1.2.
Company’s products
Ferroli Viet Nam specializes in selling the following:
Air
conditioners
of
famous
companies
such
as
Toshiba(Japanese), Misubishi(Japanese), Trane(American) and
Sanyo(Japanese).
Medical
and
technical
equipment
and
machinery,
mainly
imported from the USA, Italy, Germany and Japan.
Lifts manufactured by Nippon (Japanese), Thysen (German),
Volbin (Swiss) and Don Yang (Korean).
Construction
materials
and
equipment
of
its
own
and
Viglacera’s, and other electronic products.
Besides, Ferroli Viet Nam also provide other sevices such
as
maintenance
for
medical
and
computer installing and programming.
2.1.3.
Company’s Organization
technical
equipment,
Board of Directors
General Director
Deputy General
Director
Quality
Acceptance
Department
2.1.4.
Tectnical
Department
Deputy General
Director
Financial &
Accounting
Department
Board of Directors
Trading
Department
Planning
Department
Ferroli Viet Nam’s Board of Directors includes a Director
General and 2 Deputy Directors General.
Director General: Leading the company’s board of management
is the Director General who is responsible for managing the
use of capital, human and other resources.
Two
Deputy
Directors
General:
These
pepole
provide
assistance to the Director General. They would sometimes
act on behalf of the Director General in his absence. One
of them is responsible for the trading, planning, financiak
and
accouting
technical
matters
and
and
research
the
other
anddevelopment
is
in
charge
aspects
in
of
the
company.
2.1.5.
The departments
There are five departments, each of which is responsible
for a certain part of the company’s activities.
Trading
department:
this
department
helps
the
Board
of
Directors with trading activities. These include organizing
both
domestic
and
international
bussiness.
The
trading
department is also responsible for:
Doing marketing researches on products.
Promoting the company’s products through advertisements.
Holding negotiations and getting contracts for the company.
Organizing distribution channel for the company’s products.
Planning
marketing
department:
plans
on
this
department
importing,
is
material
in
charge
providing
of
and
preceding the contracts. Organizing the sales of products
is another main task of the department.
Financial and Accounting department: this department deals
with
all
financial
and
accounting
matters.
Another
main
function
id
to
purpose,
right
manage
the
policies
use
and
of
capital
regulations,
to
the
and
to
right
assist
business activities.
Technical
department:
technical
and
department
this
department
technological
also
works
matters.
closely
with
is
in
The
the
charge
staff
of
factories
of
this
to
do
researching and applying the modern equipment and technical
advance to themanufacturing and processing. This department
for the purpose of the company’s business development tales
all the adjustments or improvement to the technology.
Quality
assurrance
department:
this
department
takes
control over the quality of the products. This is for the
purpose
of
assuring
that
all
the
products
will
meet
customers’ requirements.
Apart from the five departments, Ferroli Viet Nam has 4
plants and branches around the country.
The organizational chart has been effectively applied for
Ferroli Viet Nam since its establishment and has resulted
in good performance and operation. There have been good
assessments on the company structure: it shows to be in
charge of particular activities and they would be able to
precede
their
avoidance
company
of
to
fuction
overlappong
be
able
to
reasonably,
and
take
which
cumbersome.
the
results
This
internal
and
helps
in
the
external
advantages; to apply modern and advantanced technology to
bring the best fruits to the whole company’s efforts.
2.1.6.
Company trading results
Table 2.1: Ferroli Viet Nam’s trading results in recent.
Total
sales
Net
profit
20001
5.527
2002
7.035
2003
10.783
2004
21.579
595
650
927
1.250
Source: Ferroli Viet Nam’s finalcial reports.
Unit: million VND.
2.2. The marketing strategy if Ferroli Viet Nam
2.2.1.
SWOT analysis of Ferroli Viet Nam
As mentioned in the previous parts, Ferroli Viet Nam has
been trading in a lot of products such as air conditioners,
electronics,
equiment,
medical
etc.,
but
equipment,
with
the
technical
limited
machinery
time,
this
and
report
focuses on the marketing strategy that Ferroli Viet Nam has
used while while dealing in air conditiners only. In this
light
internal
strengths
and
weaknesses,
as
well
as
external opportunities and threats that Ferroli Viet Nam
faces while trading in air conditioners will be identified
for
the
understanding
of
Ferroli
Viet
Nam’
marketing
strategy.
Table 2.2: SWOT analysis of Ferroli Viet Nam
-
Good quality
-
Competitive price
-
Good
busiess
-
growth
relation
with partners
-
Customers’ loyalty
-
Ferroli
Viet
corporate culture
Better
Nam’s
market
-
Limited capital
-
Small
size
-
and
Not
-
-
enough
black
market
small
market share
Growing
Firce
competition
techniqual
staff
Lack of diversification
-
in product quality
Poor
-
promotion
activities.
2.2.2.
Strengths
The first strength of Ferroli Viet Nam is that its air
conditioners are of good quality. Ferroli Viet Nam’s air
cinditioners are imported
world
such
as
Toshiba
Trane
(American)
and
from of famous companies in the
(Japanese),
Sanyo
Misubishi
(Japanese).
These
(Japanese),
are
famous
brands in the world market and Vietnamese consumers highly
appreciate
them.
Ferroli
Viet
Nam
has
never
had
any
complaint about the product quality.
The
secind
strength
is
that
Ferroli
Viet
Nam
has
been
offering very competitive prices for its air conditioners.
Ferroli Viet Nam has been a distributor for these firms
since its early day (Toshiba, Misubishi, Trane and Sanyo),
and although there are a lots of other companies are acting
as dictributors for them, Ferroli Viet Nam has a certain
advantage: Ferroli Viet Nam has always kept its prices as
compeitive as possible. Its prices are among the lowest for
air conditioners, usally between 7% and 10% lower than its
competitors.
The third strength of Ferroli Viet Nam is the good relation
with its business pertners Ferroli Viet Nam has maintained
it coporation with the above mentioned business suppliers
for many years and has always been highly valued by them.
This an advantage for Ferroli Viet Nam. Every years, its
technical
staff
are
offered
technical
traning
by
the
foreign experts from Ferroli Viet Nam’s suppliers. Many if
these staff also have chance to go abroad to get training.
Moreover, when there is a technical problem at Ferroli Viet
Nam, it immediately receives assistance from its partners.
The forth strength of Ferroli Viet Nam is its customers’
loyalty.
As
competitive
mentioned
prices,
and
above,
good
beside
business
good
relation
quality,
with
its
partners, Ferroli Viet Nam’s customers’ has contributed a
lot of the company’s success. The after sales services of
the
Ferroli
Viet
Nam
has
been
developing
and
improving
rapidly over the years. This hepls the firm to keep in
touch with the old customers. And by words of mouth, these
people have brought new customers for the company.
In
addition,
Ferroli
Viet
Nam
frequently
holds
customer
meetings in which cutomers would have chances to express or
Ferroli Viet Nam their thinking about the company products
and
services,
research
this
anables
information
to
the
built
company
uup
its
to
get
market
reputation
and
customers’ loyalty.
The last strength is the coporate culture of Ferroli Viet
Nam.
Employees
of
Ferroli
Viet
Nam
are
infused
with
an
open, value-based coporate cuture. The cornerstones of the
company’s values are:
 Staff satisfaction
 Respect for the individual
 Achievement
 Continuous learning
Ferroli Viet Nam’s management seeks to internalize these
values
through
debates
and
discussions
among
teams.
Its
annual strategy meetings, plays an important role in this
process.
The
meeting
technological
and
focuses
on
life-style
brainstorming
trends
and
about
discussing
strategic priorities of Ferroli Viet Nam in the market.
2.2.3.
Weaknesses
Firstly, limited amount of capital is posing a difficulty
for
Ferroli
expanded
Viet
much
Nam.
since
The
its
company’s
capital
establishment.
Mr
has’t
been
Adrea,
the
Managing Director of Ferroli Viet Nam, said: “we have an
advantage
in
comparison
with
our
opponents
in
terms
of
customer’s loyalty and agood image and reputation, but now
we have a problem of capital that thinking is weakening our
compeititveness”.
The main source for its capital has been contributions of
it
shareholders
and
Ferroli
Viet
Nam
has
had
a
lot
of
difficulties in finding other sources of capital.
As we all know there are four main sources of investment
capital that domestic companies may access:
Long-term
credits
proveided
by
commercial
banks
on
commercial basic:
 Government’s
Fund
investment
and
Development
Support
 Soft loans and/or grants from foreign countries
 Non-banking
and
capital,
funds
mobilized
including
company’s
from
informal
the
equity
banking
system including the company’s employees.
With regards to investment capital from banks, Vietnamese
banks are shotage of investment capital, because of the
lack
of
long-term
deposits,
which
in
turn
due
to
the
regulated interest rate and low reputation of the banking
system. As a consequence, it is normally hard to get longterm ones. This mismatch of maturity causes many prblems to
Vietnamese companies including Ferroli Viet Nam.
Secondly, Ferroli Viet Nam’size and market share have been
small.
The
shortage
of
capitak
is
main
cause
of
the
company’s modest size and market share. Up to now, Sow has
had
only 4 branches dealing in conditioners nationwide in
Ha Noi, Hai Phong, Bac Giang and Lai Chau. As a result, its
market share is among the lowest in the market for air
conditioners
in
Vietnam.
This
is
a
major
weakness
for
Ferroli Viet Nam, and the company has to be determined to
overcome this if it is to be successful in the future.
Thirdly, another weakness of Ferroli Viet Nam is its lack
of
the
technical
staff.
Although
the
current
technical
staff of Ferroli Viet Nam are qualified for its technical
word,
but
they
are
so
few
in
terms
of
quantity.
The
company’s customers has never complained about Ferroli Viet
Nam’s product quality or the quality of the maintenance
work that its staff have done, but has complained about the
late
reply
reason
for
and
this
maintenance
is
the
service
company’s
of
not
the
company.
enough
The
technical
staff. This is also one factor resulting in the low market
share of Ferroli Viet Nam.
Fourthly,
lack
of
diversification
in
product
quality
of
also a weakness for Ferroli Viet Nam. Ferroli Viet Nam has
always been concentrating in high quality air conditioners
such as imports from Toshiba, Misubishu, Trane an Sanyo
companies. These products have high quality but are too
luxurious for a large proportion of Vietnamese customers.
Besides these famous brands, Ferroli Viet Nam should deal
in some lower quality ones, which are also less exprensive
such as products from Samsung, LG, and Daewoo etc. by this
way, Ferroli Viet Nam can attract low and middle-income
consumers.
Lastly, Ferroli Viet Nam has had rather poor marketing and
promotion
practices.
Vietnamese
performed.
Marketing
enterprises
Promotion
are
is
and
promotion
poorly
limited
to
and
pratices
of
insufficiently
market
research.
In
addition, the organization of trade fairs and collecting
information
with
consultation,
such
trademark
important
formation
tasks
and
the
as
export
provision
of
market information have not effectively been undertaken.
Additionally,
competitors,
just
it
like
also
has
many
its
of
own
Ferroli
web
site
Viet
in
Nam’s
oder
to
develop their images and advertising their main products.
However, most of those web sites are not attractive enough
and
the
information
about
their
businesses
sufficient enough to appeal to customers.
2.2.4.
Opportunities
is
not
The only opportunity for Ferroli Viet Nam is that can have
a better market growth in the near future. There are two
reasons for this. Firstly, the market in Vietnam for air
conditioners
is
growing
rapidly
because
there
are
more
customers for this item. As Vietnam people’s income has
increased
in
recent
years,
more
people
can
affort
air
conditioners. This is no longer a luxurious item for a lot
of people living in the city. Secondly, Ferroli Viet Nam is
now
considering
expanding,
as
it
is
looking
for
more
sources of capital. Some employees in Ferroli Viet Nam are
thinking of investing in the company by buying its shares.
2.2.5.
Threats
Despite the impressive performance so far, Ferroli Viet Nam
is facing a host of challenges.
The first barrier is black merket pressure. The flourish of
black
market
is
posing
importers,
in
general,
particular.
Presently,
a
threat
and
for
China
is
foe
air
Ferroli
the
conditioner
Viet
biggest
Nam
supplier
in
of
black market air conditioners in Vietnam.
The second barrier is that Ferroli Viet Nam is facing an
unprecedented
competitors
growth
of
level
and
new
Vietnam
of
competition
entrants.
air
from
Thanks
conditioners
to
both
the
recently,
exsting
remarkable
Vietnam
id
becoming a battlefied for air conditioner manufactures and
importers.
There
are
in
Vietnam.
manufactures
companies
or
100%
more
and
These
foreign
owned
more
are
air
either
ones.
The
conditioner
joint-venture
qualities
of
their products are improves and their prices are much more
competitive than the imported ones that Ferroli Viet Nam is
selling.
As
most
people
in
Vietnam
are
low
and
middle-
income earners, the air conditioners of these manufacturers
are better suited to Vietnam consumers than Ferroli Viet
Nam.
2.3. Ferroli Viet Nam-marketing mix
2.3.1.
Product
Famous
international
firms
as
products,
which
fundamentally provide its customers various benefits, make
air
conditioners
benefit,
generic
of
Ferroli
product,
Viet
Nam.
experted
These
product
are
and
core
augment
product. The core benefit of Ferroli Viet Nam is the usage
of product-which the target customer finds.
The
generic
product
is
the
basic
characteristic
about
product, which was described by color, trademark, and the
package of product. Each of the products of Ferroli Viet
Nam has a separate trademark and color.
Besides, Ferroli Viet Nam has always tried to diversify its
range of air conditioners. Initially, Ferroli Viet Nam only
sold 2 famous brands that are Toshiba (Japanese), Misubishi
(Japanese). Then recently it has expanded and started to
sell 2 other brands: Trane (American) and Sanyo (Japanese).
This
is
helped
to
increase
the
number
of
customers
of
Ferroli Viet Nam.
Morover, the quality of Ferroli Viet Nam’s air conditioners
has
been
maintained
complaint
from
the
over
the
consumers
years.
about
There
their
has
been
products.
no
The
company’s two-year guarantee priod is also satisfactory to
consumers.
2.3.2.
Price
The
first
strategy
that
Ferroli
Viet
Nam
adopts
is
low
price strategy as most of Vietnamese air conditioner uers
are
price-sensitive
buyers.
The
prices
of
Ferroli
Viet
Nam’s conditioners range from 5,000,000 to VND 30,000,000
depending on each model. This policy of pricing is much
more attractive to customers as Ferroli Viet Nam’ prices
normally are among the lowest for air conditioners’.
The second strategy that is applied by Ferroli Viet Nam’s
for air conditioner is price competition. Ferroli Viet Nam
authorized
Ferroli
dealers
Viet
commission
indeed
Nam’s
compared
offer
two-way
to
the
air
those
of
retailers
conditioners
its
who
sell
a
huge
competitors.
As
a
result, the price of Ferroli Viet Nam’s air conditioners
sold by these retailers may be cheaper as some of them may
want to satifice thei commission per two-way to get profits
from
selling
a
big
amount.
It
is
the
price
competition
between Ferroli Viet Nam retailers that benefits customers.
The last strategy that Ferroli Viet Nam to use is in the
fourth of this year it launched a lever air conditioner at
inexpressive price. This kind of product is for low and
middle-income
people
in
Vietnam.
These
are
the
air
conditioners with model FUNIKI SC 09 and SC 12, which are
offered at inexpressive price of between
VND 5,000,000 and
VND 6,500,000. The company belives that cheaper price of
two-way
air
maintenance
conditioners
cost
of
air
and
lower
conditioner
installation
are
the
two
and
key
elements to increase the sales of Ferroli Viet Nam’s air
conditioners in Vietnam.
2.3.3.
Place
A good distributing policy hepls business activities safer,
increasing
the
compatition
and
connection
marketing
in
the
business,
circulation
decreasing
of
goods
more
quickly and efficiently.
In the domestic market Ferroli Viet Nam has good relations
with its partners so they help Ferroli Viet Nam very much
in the distribution. They hepl Ferroli Viet Nam win over
other rivals even in the fiercest competition. Two-way air
conditioners retailers are said to gain much benefit when
committing to sell the new FUNIKI set. The company not only
supplies its two ways to these retailers, but also supports
them
in
marketing
terms
of
outlet
activities.
decoration,
Besides,
each
staff
training
retailer
will
and
get
a
juicy bonus if an air conditioner is sold. Ferroli Viet Nam
offers an intensive support for any retail that is located
in
business
centers
of
the
cities
and
provinces
across
nation. On the contrary, the company would offer the shop
owner
much
more
benefit
such
as
free
shop-sign
and
decoretion and a greater commission if the seling volume is
reached at a high level. This always try their best to
market as many air conditioners as ways is sold out much
more than competitors.
2.3.4.
Promotion
Promotion
is
the
aspect
of
marketing
concerned
with
increasing sales. Marketing must be considered on marking
production decesion, and promotion must be considered in
the
overall
marketing
process.
Promotion
attempts
to
persuade and influence the customer’s attitude in various
ways.
Ferroli
Viet
Nam
product
such
as
has
used
some
abvertisements
ways
on
to
advertise
television,
its
internet,
newspaper, magazine…. However, they abvertisements are not
very effient.
Ferroli
Viet
Nam
uses
two
strategies
promotion
that
is
pulling strategy and pushing strategy to each of target
customer as illustrated in the following figures:
Figure 2.3: Pulling strategy
Factory
Wholesaler
Retailer
Customer
Ferroli Viet Nam uses this strategy to make the customers
have an idea and believe in product and buy the products of
Ferroli Viet Nam.
Figure 2.4: Pushing strategy
Factory
Wholesaler
Retailer
Customer
Pushing strategy aims at company and branch office dividing
the
price
for
advertising
and
discounted
price.
Ferroli
Viet Nam uses this strategy because there are many branches
in company.
Chapter 3:
Some Recommendations
to Improve Ferroli Viet Nam’s Marketing
Strategy
3.1.
Some
recommendations
relevant authorities
to
the
Government
and
In
doing
other
business,
enterprises
subjective
problems
Ferroli
Viet
in
general,
but
also
Nam
in
are
particular,
and
facing
not
only
ones,
which
need
objective
efforts and solutions from the government.
It is, therefore, recommended that our government should
take
these
following
actions
so
as
to
create
better
business environment for companies like Ferroli Viet Nam.
3.2.
Recommendations to Ferroli Viet Nam.
Global marketing strategy is not about standardizing the
marketing process on a global basic. Although every element
of
the
brand
marketing
name,
process
packaging,
–
product
pricing,
design,
advertising
product
and
strategy
and
execution, promotion, and distribution – may be a candidate
for standardization, standardization is just one part of a
global marketing strategy. Consequently, striking the right
balance
between
standardization
and
localization
greatly
contribute to Ferroli Viet Nam’s success. Ferroli Viet Nam
has
developed
localization
market.
But
conditioners
a
of
combination
marketing
to
by
further
Ferroli
of
standardization
programs
to
promote
the
Viet
Nam,
match
the
sales
and
Vietnamese
of
air
following
are
recommended to the company.
3.2.1.
Improving the company’s marketing mix
The company needs to build up an good marketing mix for the
current
marketing
strategy,
which
bases
on
the
four
elements:
Product: improving the quality and divertifying categories
of products is the core of product element in the marketing
mix. As discussed above, the market for air conditioners in
Vietnam is becoming more sophiticated with a variety if
different demands. The small portion of the market usually
set high requirements for the trend-catching and materialselecting criteria of the imported air conditioners. Others
are
low
and
quality.
middle-income
Temporarily,
siversifying
its
earners
the
product
who
company
range
as
the
been
the
require
a
lower
should
consider
most
important
element in its strategy.
Price:
high
price
has
always
disadvantage
in
competition. Although Ferroli Viet Nam’s prices have been
considered reasonable for some brands over the few years,
keeping this low level is a quite difficult task for the
company. In a addition, as Ferroli Viet Nam is thinking of
expanding
quality
its
product
products,
range
maintaining
with
higher
and
competitive
also
prices
lower
is
not
easy. This is really a jey to the company’s success in the
future.
Place:
a
good
activities
distributing
safer,
increasing
the
policy
helps
connection
in
business
business,
decreasing competiton and making the circulation of goods
more quickly and efficiently. Due to the characteristics of
Ferroli Viet Nam’s activities, there are three ways for the
company
to
performance.
distribution
make
futher
Firstly,
users
in
improvement
improve
the
to
its
Ferroli
shortest
period
ditribution
Viet
of
Nam’s
time.
The
second alternative is to open more branches. Ferroli Viet
Nam’s current branches are in big cities, so it advisable
for
the
company
to
set
up
new
in
small
towns,
where
people’s incomes have been improving and can afford air
conditioners. The last alternative, which should be used in
the long term and considered to be the best, that is to
establish
a
network
of
representative
offices
throughout
the country.
Promotion: this is one of the weaknesses of Ferroli Viet
Nam. For the purpose of sakes growth, the company should
invest more in promotion activities. This is a method not
only
to
increase
sale
but
also
to
build
the
company’s
image. The measures to build the company’s image will be
discussed in the next section.
3.2.2.
Building the company’s image
It is said that advertising is a business art. Ferroli Viet
Nam’s weakness is efficiency of promotion is not good. The
reason
is
Ferroli
Viet
Nam
has
not
applied
tools
of
promoting policy. It might be an advertising on TV, on the
radio in rush hours.
The strength of advertising on TV help viewers can see both
images
and
advertising
sounds,
colors.
on
is
TV
Furthermore,
broadcasted
many
the
expenses
timers
per
of
dat.
Besides, almost the households belong to every class in
sosiety have TV and watch favorite program on TV in their
free time. The effect of this type of advertising is wide.
Today is a era of IT and
modern means of communication.
Internet has played an important role in social activities
and
in
the
economy.
The
enterprise
can
introduce
it
to
other companies over the word. Signing the contract with
Ministry of Thailand motivated Ferroli Viet Nam’s to export
in
order
to
increase
foreign
curreny,
expands
global
market.
In
my
opinion,
Ferroli
Viet
Nam
needs
to
build
their webside which has global function.
Webside is a modern media and widely used on over the world
particularly
Customers
can
information
internet.
in
developed
find
if
comfortable
the
Partners
and
company
can
developing
and
convenient
they
easily
countries.
are
know
to
search
considering
about
the
on
product,
price, quality of product, etc. and they can buy through
webside of the company. Webside not only brings helpful
information to the customers but also save such expenses as
transport (traffic, accidents), telephone, telex, etc.
The
importance
thing
now
is
Ferroli
Viet
Nam’s
politic
department needs collect importance information related to
the
company,
its
products
and
product
quality
and
commercial culture of the company. As a result, Ferroli
Viet Nam’s brand name and reputation will be spead and have
a profound impact on the customers.
In conclusion, advertising cost is a lot of. However, it
can be considered as an investment rather than an expense,
more
wisely
spending
money
can
help
the
company
brand name do good for the company’s activities.
expand
Conclusion
The
first
part
of
the
thesis
concepts
related
to
marketing and the theory that will be later based on to
research. The definition, the goals of marketing , the
contents
of
marketing
as
well
as
implementation
and
control are main parts of chapter one. Gaining an insight
into the theory of marketing gives us the background to
keep the thesis to be on the right track.
The research has gone over the practical situation by
looking at the company’s overview and the application of
marketing strategies for Ferroli Viet Nam. In performing
its
marketing
strategies,
the
company
has
achieved
considerable successes but some limitations still remain.
The analysis of these shortcomings and recommendation for
solutions
all
are
made
in
accordance
to
the
modern
theories of marketing.
Despite only three years of doing business in Vietnam,
Ferroli
Viet
Nam
has
achieved
considerable
successes.
Since its establishment, the market share of Ferroli Viet
Nam has increased dramatically in the premium segment.
But the most important success of Ferroli Viet Nam is
that
it
has
nation-wide
built
up
a
distribution
good
image,
network
and
favorite
created
brand,
good
impressions to stakeholders including its customers. The
above successes are greatly attributed to the company’s
proper and flexible marking strategies.
Howerver, there are still some obstacles that the company
must overcome to be successful in the future time. The
market and the business environment are chaging day in
and
day
out,
if
not
to
say,
the
competition
in
all
industries is becoming fiercer and fiercer. All of them
require the flexible and approriate adjustment and new
application to maintain successes in a long run.
In this thesis, the write also has suggested some of
solutions to improve the marketing strategies for Ferroli
Viet Nam Ltd in the time to come. The macro-solutions
give recommendations for the government to complete the
legal
framework,
to
improve
the
infrastruture
and
to
increase the effectiveness in anti countefeit mission.
The micro-solutions concentrate on boosting the company’s
efficiency in performing marketing stratefies.
In the coming years, if Ferroli Viet Nam knows how to
tale
advantage
of
its
strengths,
to
overcome
its
weaknesses, to enchance the smooth exchange between the
company
and
relationships
its
with
customers,
all
to
build
stakeholders,
close
the
and
deep
company
will
certainly maintain its position in Vietnam and enlarge
its market share gradually.
References
1.Amber,
T.and
Styles,
C.(2000),
The
Silk
Road
to
International Marketing, Harlow: FT Prentice Hall
2.Arch
G.
Woodside(1990),
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Journal
of
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science.
3. Berkkowitz,
Kerin,
Hartley,
Rudelius,
(1990),
Marketing, 2nd edition, Irwin McGrawHill.
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C.S
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Douglas,
S.P.
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International
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Warren
J.(1995),
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C.Jain
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Philip
Veronica
Kotler,
Wong,
Gery
Armstrong,
principles
of
John
Saunders,
Marketing,
2nd
edition,p.97
TABLE OF CONTENTS
INTRODUCTION ....................................................... 1
Chapter 1: ......................................................... 2
Theoretical Framework ................................................ 2
1.1. The concept of marketing...................................... 2
1.1.1. The definition of marketing ................................. 2
1.1.2. The goals of marketing. ..................................... 5
1.2. Competitive Analysis.......................................... 5
1.3. Global Marketing Strategy..................................... 6
1.3.1. Product ..................................................... 7
1.3.2. Promotion ................................................... 8
1.3.3. Price ....................................................... 9
1.3.4. Place(Distribution channels) ............................... 12
1.4. The marketing mix strategies................................. 12
Chapter 2 ......................................................... 14
The Marketing Strategy of Ferroli Viet Nam Ltd ...................... 14
2.1. An InTroduction to Ferroli Viet Nam.......................... 14
2.1.1
Company development ........................................ 14
2.1.2. Company’s products ......................................... 15
2.1.3. Company’s Organization ..................................... 15
2.1.4. Board of Directors ......................................... 16
2.1.5. The departments ............................................ 17
2.1.6. Company trading results .................................... 18
2.2. The marketing strategy if Ferroli Viet Nam................... 19
2.2.1. SWOT analysis of Ferroli Viet Nam .......................... 19
2.2.2. Strengths .................................................. 20
2.2.3. Weaknesses ................................................. 22
2.2.4. Opportunities .............................................. 24
2.2.5. Threats .................................................... 25
2.3. Ferroli Viet Nam-marketing mix............................... 26
2.3.1. Product .................................................... 26
2.3.2. Price ...................................................... 26
2.3.3. Place ...................................................... 27
2.3.4. Promotion .................................................. 28
Chapter 3: ........................................................ 30
Some Recommendations to Improve Ferroli Viet Nam’s Marketing Strategy
.................................................................... 30
3.1.
Some recommendations to the Government and relevant
authorities ....................................................... 30
3.2.
Recommendations to Ferroli Viet Nam. ........................ 31
3.2.1.
Improving the company’s marketing mix ..................... 31
3.2.2.
Building the company’s image .............................. 33
Conclusion ........................................................ 35
References ........................................................ 37
Acknowledgements
In the process of writing this report, I have gained a
great
deal
in
terms
of
project
planning,
research
methodology and information accquisition. But I could never
have done this work without the hepl and advice of many
whose
ability
acknowledge
a
far
exceeds
specific
debt
my
to
own.
my
With
gratitude,
supervisor,
Ms
I
Quynh
Giao, for her invaluable advice and personal guidance from
the planning stage to the completion of this report.
My thanks also go to all my teachers at the foreign trade
University for their devoted teaching and for introducing
me to the world of knowledge during my four and halt years
at the Univesity. Their influence will remain with me for
my entire life.
Thank
you
Ferroli
Viet
Nam
Ltd
for
providing
the
information, data, materials that enabled me to complete my
report.
Finally, I wish to express my deepest appreciation to all
people
in
my
family
for
their
love,
understanding
and
encouragement.
LIST OF ABBREVIATIONS
Ferroli Viet Nam Ltd
liability company
Ferroli
Viet
Nam
Limited
TV
Television
IT
Information Technology