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), experiments, Journal of Outdoor the advertising Academy of as Marketing science. 3. Berkkowitz, Kerin, Hartley, Rudelius, (1990), Marketing, 2nd edition, Irwin McGrawHill. 4.Charlers Hill(1997), International Business 5.Courtland L. Bovee, Jonh V. Thill, (2000), “Marketing”, 2nd edition 6.Crag, C.S and Douglas, S.P. (2000), International Marketing Research, Chichester: Wiley 7.Keegan, Warren J.(1995), Multinational Marketing Management 8.Kotler, Philip(2000), Marketing Management. 9.Subhash C.Jain (1995), Intenational Marketing Management 10. 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