MARKETING STRATEGY FOR EXPORTING LED PANEL LIGHT BULB
INTO CHINA (GUANGZHOU) OF RANG DONG LIGHT SOURCE AND
VACUUM FLASK JOIN STOCK COMPANY.
1. Executive Summary
1.1. Introduction of Rang Dong light source and vacuum flask Joint Stock
Company (herein after called “Rang Dong Company”).
Rang Dong Company, former Rang Dong light source and vacuum flask
factory, was established in 1958. Being 1 of 13 first companies established
following Government’s Decision, lay the foundation for Vietnam industry in
socialist construction period.
1961 Rang Dong light source and vacuum flask factory was established
following Decision 003 BCNN/TC dated 24/02/1961.
1963 Opening factory operation. Began production, products included
incandescent lamps, fluorescent lamps, vacuum flask.
2001 Applying Quality Control System ISO 9001: 2000 into production an
management (now called ISO 9001:2008)
2004 Equitization, becomes Rang Dong light source and vacuum flask J.S.C
following Decision No. 21/2004/QD - BCN signed on 30/3/2004.
2006 Production expand, built base no. 2 in Que Vo Bac Ninh Industry zone
with area of 62.000m2.
2007 Official listed on Ho Chi Minh city Stock Exchange.
2008, investment on installation of Soda-lime glass furnace, most modern
technology of Japan, having capacity of 30 tons/ day and lead-free glass, most
modern in Viet Nam, having capacity of 19 tons/ day. This help Rang Dong to
not only having initiative in supplying glass finished product for producing
light bulbs, increasing quality of products, limit exhaust fumes, protecting
environment but also giving Rang Dong to extend exportation of glass products
to overseas markets.
2010 Rạng Đông coordinated with Hanoi University of Science & Technology
to establish HUT – RALACO joint lab specializing in study of new technology,
materials for production application. Coordinate with CTDAS, Vietnam
Science Institute to study, produce LED light source which is energy saved,
eco-friendly. In strategy of developing high quality, efficiency, economy of
electric, eco-friendly, Rang Dong has advocate development of new light
source such as high voltage ligh bulb, LED light bulb.
4/2011, Rang Dong established R&D center, continuing to study and develop
new product lines together with improving company’s technology and sciency
Brief description of products or services
Majot products of Rang Dong include: light bulbs, compact, led, high voltage,
fluorescent, balat, desk lamp, lighting device and vacuum flask.
Among of those products, the product targeting to China market is LED panel
type 300x300, 300x600, 600x600, 150x1200, 300x1200… with high quality,
having much customers’ goodwill in Vietnam.
Panel LED 150x1200
- Applied technology of light guide on optical glass plate following full
- Frame panel made by aluminum alloy, quick heat release, good strength
bearing, less deformation, frame panel surface is non-oxygenizable.
- Panel use light dispersive plate creating even light across the face of panel,
- Comply with standard: IEC 62031: 2008, IEC 62384: 2008, IEC 61347- 213: 2006
- LED Samsung chip
- Use high quality LED chip, long life-time and high color rendering index.
- Save energy of 30% comparing to fluorescent light T10 using magnetic iron
- High capacity index (cosφ >0,95), low electromagnetic diffraction, not
affecting to other electronic devices.
- No mercury contained and no virulent chemical, no ultraviolet rays and ecofriendly.
- Beautifully designed, suitable with restaurant, hotel, office...
5000/6500 25000 1200x150x14.5
1.2. Define target market
China is a strong consuming market because of large population, stable and
Target market in China targets is high and middle class. This is the group of
high income earners preferring to use goods which are high quality, health
safety, environment protective and energy saving.
1.3. Competitive advantage
The advantage of Rang Dong’s products comparing to other company’s lighting
products are good quality products, meeting requirement of China’s standard as
well as applying international quality control system such as ISO 9000, ISO
14000, SA 8000..
1.4. Positioning Statement
Development strategy aiming green economic, applied science technology in
production, using less material, higher performance, eco-friendly plays
important, decisive role in stable development, environment protection. With
the understanding of light, customer’s demand, Rang Dong target to become
the leading producer of high quality, high efficiency, energy saving, ecofriendly light sources.
Statement of Rang Dong is:
DON’T SAVE LIGHT, SAVE ENERGY!
COMFORTABLE LIGHTING CONSTITUTES QUALITY OF LIFE!
1.5. Anticipated sales, profits and market shares
Anticipated markets: Beijing and Sub-urban cities in China.
2. Market and Situation Analysis
+ Outstanding strengths are good quality, diversified products: this is presented
through the awards received from internal markets as well as international
+ LED product are high quality product, high technology, high efficiency,
electric saving, safety and environment protected. It is safety because it is using
semiconducting electric current instead of alternating current.
+ Policy of product exchange when associating with giant commercial partner
Alibaba.com is applied in purchasing production line of LED light and rare earth
material in China, therefore there is commitment to consume 50% production of
supplied line and material.
+ China produces redundant electric from coal-thermoelectric and hydropower
plants. However, Government protect and stabilize electric only for production
and State company in order to stabilize price, regulate macroeconomic but not for
household consumer. People have to pay high price for electric consume therefore
they will save electric.
+ Distribution channel of Alibaba.com in China is very famous and popular in
domestic and abroad therefore it is prestigious to deliver product to consumer
together with traditional distribution channel & construction project.
+ Particularly, LED panel have no mercury contained, no ultraviolet ray
created, no virulent chemical therefore it is very safe and eco-friendly. Efficiency
reaches to 90 lm/w, high capacity index (cosφ > 0.95), low electromagnetic
diffraction, not affecting to other electronic devices. Besides, it use high quality
LED chip creating a long life-time LED pane lasting over 25000h, high lighting
efficiency, save up to 30% electric energy comparing to fluorescent light T10
using magnetic iron ballad.
+ Safe, environment protected, energy saving.
+ Similar culture between China and Vietnam.
+ Modern production equipment: Rang Dong has invested to innovate
production technology, increase coordination with scientists to study and produce
new products. Company has also invested more than 20 billion VND for R&D
center in order to create best environment for research activity, application of
technology & science for production.
+ Qualified and skilled staff: well trained by company for the purpose of using
new technology equipment for production. Besides, Rang Dong has developed
large and powerful engineers, up to 40-50 peopole.
+ China has reformed as well as issued attractive and stable policy absorbing
foreign investors. Since 1992, China has introduced policy series of reducing
restriction of foreign investment including: Policy of foreign investment company
in 1995; “foreign law”, “Law of joint venture between People’s Republic of China
and foreign company”, “Law of owner’s capital for joint venture company” issued
from 2000 to 2001. Accordingly, foreign investor has legal right and are protected
by foreign investment regulation, In 2002, China issued “List of guidance on
foreign investment on Industry” to reduce more restriction of foreign investment
activity and canceling the difference of exchange rate and other aspect arisen from
policy. As a result, government’s policies have created equally competitive
environment for multinational corporations and encouraged a possession in China.
+ China and ASEAN country have a strong economic cooperation. Trade
between China and ASEAN country in general and Vietnam particularly has
+ Finally, China has a long border with Vietnam, therefore, goods
transportation and supply shall be convenience. This help to save cost and make
the products more competitive than multinational corporations’ or Eastern
+ As same as other Vietnam companies, Rang Dong’s staff still lack skill in
studying investment law and regulation. This cause challenges as well as
competition with other company.
+ Chinese language is also a great challenge to Rang Dong’s staff. They need to
spend more time to learn language which may cause opportunity loss of
+ There is no separate product’s brand name for China market but mainly
export through Alibaba’s distribution channel. This is very difficult for Rang
Dong’s strategy of creating separate product’s brand name and direct exporting to
+ Materials for company production are imported from abroad. Therefore, it
has a risk when material’s price in the world has extraordinary variation, causing
the increase of input material’s rate and reduces the product’s completion in China
+ Detailed know about China market is limited. It is because of complicated
legal environment of China.
+ Approaching to China market is an approach of extremely huge market.
China has largest population in the world. According to national population
investigation performed in 2010, China population reach to 1.316.562.729 billion
people with more than 50% China population in range of working age.
+ Legal environment in China is complicated, sophisticated in line with
technical barriers. China is prepared for criticizing foreign company sometimes in
order to protect domestics. It is considered a challenge to any company bringing
products into this market.
+ Economics: as noted, GDP has increased but 3 months of Q2 has decreased
3% and experts predict that there is a signal of more reduction.
+ Severe competition in electric light bulb market: occur between companies
from developing countries, particularly the remarkable companies from India,
+ China’s consuming trend is high requirement and diversified creating a
difficulty for Rang Dong in producing separate product for this market.
+ Resulting from the above information, build of SWOT matrix of Rang Dong
in China market could be as follows:
complicated, sophisticated in line with
• Vietnam is member of WTO creating technical barriers;
• Economic crisis and depression;
advantaged condition for Rang Dong to
receive tax incentive.
• Severe competition in electric light bulb
• Chiness people’s consuming trend is
diversified and unstable
• Good quality and diversified products; • No separate product’s brand name for
• Products are safe, environment protected, China
energy saving up to 30% for people;
• Competitive price;
• Most of materials for production is
• Good relationship with numerous partners imported from abroad;
in China market;
• Qualification of design team required
• Large scale and high productivity;
improvement to meet a demand and
• Long term prestige with foreign partners;
changes of new tendency;
• Modern production equipment;
• Limitation in knowing China market;
• Skilled staff.
• Capacity and resource for marketing
3. Market Segmentation and Customer Analysis
3.1. Market Segmentation
Ancient China has obtained many achievements in technical and science
research. Among them, there are mentionable achievements such as compass,
gunpowder, technique of paper making and printing which are considered as four
great inventions. In addition, there are other inventions on different fields. China’s
space program today is outstanding achievement, applying and corporating
various advanced and improved technique and science.
In order to meet demands from different customer group, Rang Dong has
created a product type representing a separate product line which is high grade
product for high and middle class people in Beijing, China. Those people trend to
use high grade and elegant designed product.
3.2. Target market/segmentation characteristics
+ High class people in China: high demand and often purchase goods based on
famous brands, high quality product, and luxurious shops and require close
standards. Such customers often concentrate in center areas, goods supplied are
world famous brand names and originated from reputed countries such as France,
+ Middle class people: They are the ones who have fairly high income. They
are somehow easy and more comfortable to demand in purchasing household
goods. Such customers are interested in beautiful design, high quality and
+ There are many cheap price, low quality goods in China. Foreign company
have less chance to compete domestics in this market, therefore Rang Dong has
considered that Rang Dong is capable to compete with other companies from
foreign and domestic in chosen segmentation market.
4. Objectives and Goals “Where the business needs to be”
4.1. Mission Statement
Rang Dong has determined main duty of building strong company for all
aspects, creating more jobs for works, actively participating in social activities
contributing to stabilize employee’s life, close community. Effort to create brand
name product having steady position in market as well as customer’s trust.
4.2. Objectives for volumes, sales, market shares, gross margins, net profit,
return on investment (general objective)
+ To maintain stability, organize operation model of parent company having large
scale, advanced technology, modern equipment.
+ To make plan and progress that until 2008 Rang Dong shall become a
corporation, interdisciplinary business in which majoring in exporting products to
+ To make strategy for reforming the company which bring the Company to be
flexible in operation, create strong brand name of product, gradually export Rang
Dong’s product to overseas markets.
+ To train skill staff in professional in technology, organization management of
production meet the Company and member’s demands.
+ To create best conditions and policy for caring employee’s life, involvement
in environment protection and development of community.
4.3. Particular objectives
+ Determine the target of increasing annual sales average of Company to be
10% to 15% during period from 2014 to 2017, and up to 2018, total Rang Dong’s
sales shall be 02 time higher than in year .
+ Major objectives in 2013 are as follow:
Turn over: 3,150 billion VND.
Profit before tax: 110 billion VND.
Minimum dividend expected: 20%.
5. Strategies and Tactics “How to get there”
5.1. Pricing strategy
Product evaluation: high grade product
Target customer: appropriate with customers who have medium income
upwards (household, apartment block, supermarket, public civil construction, high
Determine price strategy: price shall lower than other products having same
quality and possibly replace other simila light bulb
Use strategy of setting up price to be a bit lower. Penetration price access: try to
have customer’s preference of product by applying good price for the same level
quality products (normally, price shall be valued at 5%-15% lower than other
similar products’ price from other company available in market). In addition, if
price is too low, it shall cause an suspect of dumping price, meaning than offer an
price lower than production’s cost. This is illegal and leading to “strike back”
from competitive company as well as reaction of domestics. They shall inform to
tax inspectors of government for inspection.
In fact, pay attention on setting price at “recognizable value” corresponding
between selling price and value. Researching and surveying market help you to
determine the price which customer could recognize the value.
Applied time: at least 3 year
It is sufficient time to positioning product of LED pany of Rang Dong. After
this time, price shall increase gradually up to current price.
First, we cannot remain low price without affecting to company’s profit and
Second, low price policy will not bring advantages to competition.
When gaining position in target market, it is possible to increase profit by
increasing price. This is reasonable process with the conditions that customer
Change in price after penetration:
Gradually increase price to current level.
It depends on following factors: income growth, breakeven point, price
For LED panel, its price is calculated following formula: processing price =
labor cost + material cost + training cost + packaging, transporting and
shipping cost. This current price is not high causing possibility of low profit.
Therefore, in coming time, by strategy of creating separate brand name and
product of Rang Dong, the price shall include the added value of product. Rang
Dong is able to value the higher price of product which the customer find
acceptable because the middle & high class people in China have good income;
they are not sensitive to changes in price.
5.2. Product Strategy
China people’s needs and hobby are diversified, plentiful product requirement
which attached with different quality level. However, in China’s electrical market,
Rang Dong should focus on high quality product having advantaged competition
comparing to other domestic’s product due to the spread of low quality China’s
products. In product strategy, Rang Dong’s product is high quality, energy save
which shall be guaranteed by Rang Dong.
5.2.1. Strategy of product quality
Chian is a potential market therefore the competition in this market is fierce. IN
order to have strong position in this market, Rang Dong has to incessantly
improve product design to meet Chinal peopole’s liking, create new products and
maintain products in high quality level.
5.2.2. Strategy of product packaging
Rang Dong’s product are light bulbs transported to China by road or railway
through border gates. There are some difficulty accessible roads, hence the
product shall be packed in lot putting into cask and transported in container.
However, for the purchase order of small quantity and urgent delivery
requirement, products shall be transported by airway and accordingly packaging
of product is flexible to be convenience for transportation. In that case, product
shall be packed in plastic bag then put in carton box which keep product in good
Company product packaging shall be printed information of specification,
usage guidance which is now currently not applicable. This current package do
not reflect correctly function of packaging, only for basis function of product
protection. The main reason is that direct sales to foreign customers is limit,
products are mostly purchased or order through middle party, channel distribution,
therefore, company could not print information for advertisement of product and
As a result, in coming time, together with create brand name for company’s
products to sell to the final using customer, Rang Dong needs to pay attention on
improving product’s packaging, printing information for advertisement of
company’s products, brand name and images
5.3. Promotion strategy
Advertisment of Rang Dong’s product should focus on 3 targets:
Firstly: Information conveying;
Secondly: Customer convincing;
Thirdly: Propaganda for reminder. Advertisement’s message should be simple,
attractive, easily understandable and emotional.
Advertisement means: through television, radio, newspaper or internet.
However, in the short term and to save expenses, company is advised to use
advertisement tools which are less expenses but high effective, widely spread and
popular nowadays such as social media marketing or advertisement on famous
China websites. Besides, company can use television, radio channel network of
Vietnamese community living in China to advertise the product to target
customers. In addition, company could proceed advertisement through catalogue,
Beside advertising, Rang Dong needs to innovate thought and develop selling
by product exporting. About thought, company sales and agents needs to change
thought from passive role, caring about selling product out, to self-motivated sales
and care about development in customer services and customer relationship
marketing in order to keep and develop repeated and loyalty company’s
To do that, Rang Dong should pay attention on employment of staff and
training sales staff. In oder to reduce cost, company could employ Vietnamese
residing in China, train them for company’s product sale. The employment of
overseas Vietnamese shall bring benefit to company because the low salary
payment than hiring local people. As long residing in local, they will have
knowledge of culture, local habit, consuming demand.
5.3.3. Sales promotions
Internet is a tool supporting to company’s business operation as it has high
speed of image, information conveying, low expenses, able to widely connect
with customers in everywhere of China. Therefore, Rang Dong should exploit
internet environment at the highest possibility for sales promotion, development
of brand name through websites.
Company could establish its own website with Chinese language in order to
introduce about company, products to Chinese customers, concurrently
developing it to be sales channel, advertisement and development of Rang Dong’s
brand names. Information in website should be a scientific layout, rational, userfriendly interface and suit Chinese liking. Besides, the company should also
regularly update information of company’s image and product for the customer’s
information. If not maintain the website, it shall soon become useless conditions.
6. Budgets and Controls
Sales, expenses and marketing budgets
Company should increase budget for marketing strategy in China’s market, in
which expenses for market research, looking for partners should be focused in
initial time, afterwards are expenses for marketing operation (particularly social
media marketing). Details of estimation cost for marketing operation are as
Cost for hiring shops: ……………………………………...3,000 USD/month
Cost for product promotion:
Cost for advertisement: ……………………………………..20,000 USD
Cost for promotion: …………………………………...........10,000 USD
Cost for public relations: …………………………………. 7,000 USD
Cost for employment: ……………………………………..4,000 USD/month
Cost for maintaining goods: …………………………….. .1,000 USD/tháng
Cost for shop decorations: ………………………………… 10,000 USD.
Besides, indentifying and deploying risk management are the weakness of
Vietnam’s company in general and Rang Dong in particular, therefore, in order to
assure the success of marketing strategy in China, Rang Dong should establish a
separate division to be in charge of risk management arising from implementation
of marketing. It should particularly pay attention on legal environment and severe
competition from similar product suppliers in China’s market.