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The Marketing Strategy of a multinational join stock company.doc

The Marketing Strategy of a multinational join stock company
INTRODUCTION
Nowadays, marketing is obviously a more and more vital in the successes of every
enterprise. However, not many of the companies in Vietnam have paid adequate attention
to marketing activities, especially when both domestic and global competition is getting
fiercer and fiercer.
Being one of the companies specializing in selling air conditioners, a multinational join
stock company has achieved certain success in this field. Its sales of air conditioners have
increased over the years since its establishment. However, the company sales growth of
air conditioners has been modest in comparison with other competitors’. The reason for
this partly lies in its marketing. After taking a close look at a multinational join stock
company’s performance, I decide to choose “Marketing strategies of a multinational
join stock company” as the topic for my field study report with a view to examining a
multinational join stock company’s marketing strategy and making some
recommendations to improve it.
A multinational join stock company has a lot of business activities, but because of limited
time, this report focuses only on the company’s marketing activities for one line of its
business, that is air conditioners, on the market in Vietnam.
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 a multinational join stock company
Chapter 3: Some Recommendations to Improve a multinational join stock
company s Marketing Strategy.’
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
Chapter 1:
Theoretical Framework
1.1.1. The concept of marketing
1.1.2. 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 can product far more goods than the world’s
consumers can buy. Overcapacity results from individual competitors projecting a greater
market share growth than is possible. 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 away. 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 starts long before a company has a product. “Marketing is the
homework that managers undertake to assess needs, measure their extent and intensity
and determine whether a profitable opportunity exists. Marketing continues throughout
the product’s life, trying to find new customers and keep current customers by improving
product appeal and performance, learning from product sales results and managing repeat
performance”
1
. So that does the term “marketing” means? Actually, there is no single and
universally agreed definition of marketing. The American Marketing Association defined
marketing “is the process of planning and executing the conception, pricing, promotion
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
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 environment on all the
activities that facilitate exchange in order that the targeted group of customers is satisfies
and the defined objectives accomplished ”
3
.
Though there are many definitions, a central
part of any definitions of marketing is the exchange process – the process of giving
something of value in return for something of value. Or in other words, it’s the process of
transferring between two or more parties of tangible or intangible items of value.
Cash, debt, time, votes, behavior, etc
Health, safety, comfort, transportation, beauty, productivity, etc.
Figure 1.1: the exchange process.
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
parties, and (4) something to exchange. Here’s what Berkowitz stated in his book
“Marketing”. As marketing is a kind of exchange, certain conditions must exist before the
exchange can occur.
1.1.3. 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”. 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
Le Kim Hong Tu _ 5D
Marketer
Goods, Services,
ideas,
People and Places
Customers
Wants and needs.
The Marketing Strategy of a multinational join stock company
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 industry.
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 technique in analyzing a firm’s competitive
position relative to its competitors is SWOT(strengths, weaknesses, opportunities, and
threats) analysis aims to isolate the key issues that will be important to the future of the
firm and that will be addressed by subsequent marketing strategy. A SWOT analysis
divides the information into two main categories (internal factors and external factors)
and then further into positive aspects (strengths and opportunities) and negative aspects
(weaknesses and threats).
The internal factors could be viewed as strengths or weaknesses, depending upon their
impact on the firm’s positions; i.e., they may represent strength for one firm but
awearness irrelative 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 opportunities to
another, include technological changes legilation, social-cultural differences, and change
in the market place or competitive position.
1.3. Global Marketing Strategy
In terms of globalization, worldwide businesses use global marketing when they take the
same or similar approach or content for one or more elements of the marketing mix, that
is, the same or similar brand names, advertising. And so on in different countries.
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
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. Product
There are five international product and promotion strategies for a company to extend its
market base into other geographic markets (See table 1.1).
Straight extension means marketing the product in the foreign without any adaptation.
Top manager 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. This strategy is tempting because it involves no additional
product development cost, manufacturing changes, or promotional modification. But it
can be costly in the long run if products fail to satisfy foreign consumers.
Product
Promotion
Do not change
product
Adapt product Develop new
product
Do not change
promotion
Straight extension Product adaptation
Adapt promotion Communication
adaptation
Dual adaptation
Product
invention
Table 1.1: Five international product and promotion strategies.
Product adaptation involves changing the product to meet local conditions or preferences.
There are several levels of adaptation. 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.
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
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.
1.3.2. Promotion
Companies can either adapt 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 strategy.
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 have 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 country selects the
most appropriate one. Finally, some companies allow managers to create a specific
advertising – within guidelines, of course.
Other companies follow a strategy of communication adapting their advertising messages
without any product changing. Although it retains the scale economics on the
manufacturing side the firm sacrifices potential saving on the communication way .
another strategy is dual adaptation. It is changing both the product 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, transfer prices, dumping charges, 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, tariffs, importer margin, wholesaler margin, and retailer margin.
Depending on these added costs, the product may have to sold for two or five times as
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
much as 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 world. 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 effort.
But this strategy ignores differences 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
marketing 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 transfer price(i.e. the price that it charges
to another unit in the company) for goods that it ships to its foreign subsidies. If company
charges too high a price to a subsidiary, it may and up paying higher tariff duties, even
while paying lower income taxes in that country. If company charges its subsidiary too
little, it can be charged with dumping. Dumping occurs when a company charges either
less than it costs or less than it charges in its home market, in order to enter or win a
market.

Various governments are watching for abuses and often force companies to
charges the arm’s-length price – that is, the price charged by other competitors for the
same or a similar product.
Global companies also face the black-market problem. A black market means the same
product is sold at different price geographically. Dealers in the lower-price country find
ways to sell some of their products in higher-price countries, thus earning more. Many
company finds some distributors buying more than they can sell in their own country and
reshipping goods to another country to take advantage if price differences. Multinationals
try to prevent black market by policing the distributors, by raising their prices to lower-
cost distributors, or by altering the product characteristics or service 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
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
down and devalued their currencies. For multinational firms this poses great difficulties.
Sluggish demand and reluctance to pay higher price make selling in these emerging
markets harder. Instead of lowering prices, and taking a loss, some multinationals have
found more creative and creative means to deal with this problem.
1.3.4. Place (Distribution channels)
Global 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 marketing head quarters the export
department or international division makes decisions on channels and other marketing-
mix element. The second link, channels between nations, moves the products to the
borders of the foreign nations.

The decisions made in this link include the types on
intermediaries (agents, trading companies) that will be used, the type of transportation
(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.
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 abstaining to the expansion
of large-scale retailing in developing countries.
1.4. The marketing mix strategies
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”. These ingredients must
be manipulated in a manner which ensures targeted customers are satisfied, marketing
strategies are implemented and desired brand positioning is achieved.
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
Figure 1.2: whole-channel concept for international marketing.
Le Kim Hong Tu _ 5D
Seller’s international
Marketing
headquarters
Seller
Channels between
nations
Channel within foreign
nations
Ultimate buyers
The Marketing Strategy of a multinational join stock company
Chapter 2
The marketing strategy of a multinational join stock company
2.1. An introduction to a multinational join stock company.
2.1.1 Company development
A multinational join stock company was founded on 12
th
August 2002. A multinational
join stock company’s headquarters was located at 236 Cau Giay Street, Hanoi. It has 2
branches in Hanoi, Hai Phong and a network of distributors around the country. Since its
establishment, a multinational join stock company has operated in various fields: air
conditioners, electronics, medical equipment, technical machinery and equipment, etc.
After two years of operation, a multinational join stock company expanded into other
areas such as information services, supplying and assem blind lifts and other equipment.
Early 2007, a multinational join stock company opened a new branch in Hai Phong for
selling construction materials. It also opened a new sales representative office for selling
Viglacera’s products.
2.1.2. Company s products’
A multinational join stock company specializes in selling the following:
Air conditioners of famous companies such as Toshiba(Japanese), Mitsubishi(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), Thyssen (German), Volbin (Swiss) and Don
Yang (Korean).
Construction materials and equipment of its own and Viglacera’s, and other electronic
products.
Besides, a multinational join stock company also provide other services such as
maintenance for medical and technical equipment, computer installing and programming.
Le Kim Hong Tu _ 5D
The Marketing Strategy of a multinational join stock company
2.1.3. Company s Organization’
2.1.4. Board of Directors
A multinational join stock company’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 people provide assistance to the Director General.
They would sometimes act on behalf of the Director General in his absence. One of them
Le Kim Hong Tu _ 5D
Board of Directors
Deputy General
Director
General Director
Deputy General
Director
Quality
Acceptance
Department
Technical
Department
Trading
Department
Financial &
Accounting
Department
Planning
Department

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