OPEN UNIVERSITY HO CHI MINH CITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MMVCFB 6 VIETNAM – BELGIUM MASTER IN MANAGEMENT PROGRAM DO NGOC HOA DEVELOPING AWAY FROM HOME SALES IN NEW TOYO PULPPY (VIETNAM) CO. LTD. MASTER IN MANAGEMENT THESIS HO CHI MINH CITY 2007 OPEN UNIVERSITY HO CHI MINH CITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL MMVCFB 6 VIETNAM – BELGIUM MASTER IN MANAGEMENT PROGRAM DO NGOC HOA DEVELOPING AFH SALES IN NEW TOYO PULPPY (VIETNAM) CO. LTD. MASTER IN MANAGEMENT THESIS THESIS ADVISOR : DR. LE NGUYEN HAU HO CHI MINH CITY 2007 i TABLES OF CONTENTS CHAPTER 1 – INTRODUCTION 1 BACKGROUND 1 1.1 PROBLEM STATEMENT 1 1.2 THESIS OBJECTIVES 2 1.3 SCOPE AND LIMITATION OF THE STUDY 3 1.4 ORGANIZATION OF THE STUDY 3 CHAPTER 2 – THEORETICAL BACKGROUND 5 BUSINESS MARKET AND BUSINESS BUYING BEHAVIOR 5 2.1 SEVERAL CHARACTERISTICS OF BUSINESS MARKET 5 2.2 CLOSE SUPPLIER – CUSTOMER RELATIONSHIP 6 2.3 MAJOR TYPES OF BUYING SITUATIONS 6 2.4 WHO PARTICIPATES IN THE BUSINESS BUYING PROCESS? 7 2.5 CONCEPT OF MARKETING STRATEGY 8 2.6 LINK BETWEEN MARKETING STRATEGY AND CORPORATE STRATEGY 9 2.7 STRATEGIC MARKETING PLANNING PROCESS 10 2.7.1 MARKETING SITUATION ANALYSIS 10 2.7.2 MARKETING STRATEGY DESIGN 13 2.7.3 MARKETING PROGRAM DEVELOPMENT 17 2.7.4 IMPLEMENTING AND MANAGING MARKETING STRATEGY 25 CHAPTER 3 – RESEARCH METHOD 28 3.1 ANALYTICAL FRAMEWORK 28 3.2 INFORMATION NEEDED 31 3.3 DATA SOURCES 32 3.4 DATA COLLECTION METHOD 32 CHAPTER 4 – EXTERNAL ANALYSIS 34 AN OVERVIEW OF THE VIETNAMESE ECONOMY 34 4.1 SOME ECONOMIC ACHIEVEMENTS OF HCMC AND BINH DUONG PROVINCE 36 4.2 VIETNAMESE PAPER MARKET 37 4.2.1 PRODUCTION 37 ii 4.2.2 FORECAST OF PRODUCTION AND CONSUMPTION OF TISSUE PAPER TO 2010 39 4.3 CONSUMPTION PATTERN AND CONSUMER PREFERENCE 40 4.3.1 CONSUMPTION PATTERN 40 4.3.2 CONSUMER PREFERENCE 41 4.4 COMPETITION ON THE VIETNAMESE TISSUE PAPER MARKET 41 CHAPTER 5 – ANALYSIS OF MAIN COMPETITORS OF NPV 42 MAIN COMPETITORS 42 5.1 PROFILE OF SAIGON PAPER CORPORATION 42 5.2 ASIA PULP AND PAPER (APP) 46 5.3 VIDON PAPER JOINT STOCK COMPANY (VIDON) 48 5.4 SUBSTITUTES 50 5.5 SUMMARY OF OPPORTUNITIES AND THREATS OF NPV 51 5.5.1 OPPORTUNITIES 51 5.5.2 THREATS 53 CHAPTER 6 – INTERNAL ANALYSIS 54 PROFILE OF NPV 54 6.1 MISSION OF NPV 54 6.2 MARKETING OBJECTIVE OF NPV 55 6.3 PRODUCTION AND BUSINESS RESULTS 55 6.4 PRODUCTION CAPACITY 55 6.5 VALUE SHARE AND SALES VOLUME OF AFH 56 6.6 ANALYSIS OF MARKETING ACTIVITIES 57 6.6.1 PRODUCT 57 6.6.2 NPV’S PRODUCT LINE SALES 62 6.6.3 PACK TYPES 63 6.7 PRICE 63 6.7.1 PRICING OBJECTIVES 63 6.7.2 PRICING LIST 64 6.7.3 PRICING STRUCTURE 64 6.8 DISTRIBUTION CHANNELS SYSTEM 64 6.8.1 DISTRIBUTION OBJECTIVE 64 6.8.2 PROMOTION ACTIVITIES 65 6.9 RESULTS AND DISCUSSION OF CONSUMER SURVEY 67 6.10 HOW CONSUMERS CHOOSE TO BUY A TISSUE PAPER PRODUCTS 68 6.11 ATTRIBUTES OF TISSUE BRANDS 68 iii 6.12 PRICES OF BATHROOM BRANDS 69 6.13 SUMMARY OF NPV’S STRENGTHS AND WEAKNESSES 69 6.13.1 STRENGTHS 70 6.13.2 WEAKNESSES 71 SWOT MATRIX 72 6.14 DEVELOPING THE MARKETING STRATEGIES FOR NPV 73 6.14.1 MARKET SEGMENTATION 73 6.14.2 NPV MARKET TARGETING 74 6.14.3 POSITIONING STRATEGY 74 6.15 DEVELOPING MARKETING MIX STRATEGY FOR AFH 75 6.15.1 PRODUCT STRATEGY 76 6.15.2 PRICE STRATEGY 77 6.15.3 DISTRIBUTION STRATEGY 78 6.15.4 PROMOTION STRATEGY 79 CHAPTER 7 – CONCLUSIONS AND RECOMMENDATIONS 81 CONCLUSIONS 81 RECOMMENDATIONS FOR FURTHER RESEARCH 83 COMMITMENT DECLARATION I commit that this is my own study. All figures and results stated in this thesis are true. DO NGOC HOA ABBREVIATION NPV New Toyo Pulppy (Vietnam) Co. Ltd. CS Consumer Sales AFH Away From Home Sales tpy tons per year tpd tons per day APP Asia Pulp and Paper VP virgin pulp DIP de-inked pulp SOE State-owned-enterprise ABSTRACT New Toyo Pulppy (Vietnam) Co. Ltd., (NPV) is a wholly owned subsidiary of Benline Investment (Hong Kong) and is one of the largest and modern factories in Vietnam. The company produces well-known tissue paper brands such as Pulppy, May, AnAn and SSS. Together economic development, the Vietnamese tissue paper industry has developed and the Vietnamese tissue paper market becomes fiercely competitive. NPV is facing the question of how to protect its leading position in the market, as well as to increase sales. This study deals with the development of marketing strategies for NPV. Thus, it is necessary to analyze external factors including production and consumption, competition to identify opportunities and threats in environment in which the company operates. Moreover, the analysis and assessment of production and business of NPV need to discuss to find out its strengths and weaknesses. Following the analysis the opportunities threats, as well as strengths and weaknesses, the marketing strategies also are recommended to achieve the marketing objective of the company. LIST OF FIGURES Figure 1: Strategic marketing process 12 Figure 2: Selecting a marketing strategy 16 Figure 3: Price determination process 21 Figure 4: Analytical framework 30 Figure 5: GDP growth rate in Vietnam during 1995-2006 35 Figure 6: Production, consumption 1996-2005 40 Figure 7: The current production capacity of Saigon Paper 43 Figure 8: Value shares of Saigon brands in 2005 44 Figure 9: Product and Price of Saigon Paper 44 Figure 10: Value shares of Paseo brands in 2005 47 Figure 11: Product and Price of APP 47 Figure 12: Product and Price of Vidon 50 Figure 13 : Contribution of segments in AFH sales in 2006 55 Figure 14: Contribution of territory of AFH market 56 Figure 15: NPV’s monthly sales volume 2003-2006 57 Figure 16: Unaided brand awareness_Toilet rolls 59 Figure 17: Aided brand awareness_Toilet rolls 60 Figure 18: Unaided brand awareness _ Napkins 61 Figure 19: Products analysis (2006) 63 Figure 20: Distribution channels of NPV 65 Figure 21: Profile of sampling size 68 Figure 22: Comparison the attributes of selected brands 69 Figure 23: SWOT analysis 72 Developing AFH sales in NPV MMVCFB6 Do Ngoc Hoa 1 Chapter 1 INTRODUCTION Background Transition from a centrally planned economy to market-economic structure, the Vietnamese market becomes more dynamic. All business and production activities are encouraged to contribute into economic growth and stabilization of the nation. Like other light industries, investment in tissue paper is welcomed and facilitated. The Vietnamese tissue paper industry has rapidly developed. Together with the raising living standard, the demand for tissue paper quickly increases and high quality brands are much preferred. More and more foreign tissue paper producers and worldwide distributors enter into the Vietnamese market. At present, all players are facing the fierce competition between local and foreign brands. There are more than 55 local producers who produce more than 80 tissue paper brands including Pulppy, Kleenex, Paseo, Kissme, Vidon, Vinh Hue, Alice, etc. The tissue products being sold in the market can be divided into categories: towels, toilet roll, napkins, facial, medical paper and products used in industry. By Some local producers such as NPV, Saigon Paper, Vien Dong, Vinh Co etc. having both Consumer sales (CS) and Away-from-home (AFH) sales. However, AFH sales is underdeveloped properly because it is quite new in Vietnam market. 1.1 Problem statement Vietnam tissue paper market is underdeveloped and is very attractive to all tissue paper manufacturers in domestic or overseas. According to the Vietnam Paper Association, demand on tissue paper consumption in Vietnam in the next 10-15 years is very huge. Currently, the average paper consumption of Vietnam is about 10-15kg [...]... personnel are more influential in new- buy situations Engineering personnel usually have major influence in selecting product components, and purchasing agents dominate in selecting suppliers (Kotler, 1994) Webster and Wind call the decision making unit of a buying organization the buying center, defines as “all those individuals and groups who participate in the purchasing decision making process, who share... Marketing strategy implementation and control are vital links in a series of strategic marketing activities These actions emphasize the continuing process of planning, implementing, evaluating and adjusting marketing strategies They include three important management activities, as follows: Do Ngoc Hoa 25 Developing AFH sales in NPV MMVCFB6 Marketing plan and budget The marketing plan typically includes... understanding of the corporate mission and objectives and the strategy of each strategic business unit The strategic marketing planning process consists of market analysis, Do Ngoc Hoa 26 Developing AFH sales in NPV MMVCFB6 deciding marketing strategies, developing marketing mix strategies and implementing and managing marketing strategy Regarding with the case of NPV, to formulate marketing strategy,... marketing process consist of marketing situation analysis, designing marketing strategy, marketing program development, and implementing and managing marketing strategy (Craven, 1994) It is shown in Figure 1 So there is a need to discuss this in more detail 2.7.1 Marketing Situation Analysis The marketing situation analysis is the first step in the design of new strategy or examining an existing strategy... Situation Analysis Analyzing markets Market segmentation Analyzing competition Marketing information systems and research Implementing and Managing Marketing Strategy Designing Marketing Strategy Designing effective organizations Marketing strategy implementation and control Market targeting Positioning strategy Marketing strategies for selected situations Planning for new products Marketing Program Development... NPV in Ho Chi Minh city, Vietnam The study has been undertaken purely from a view-point of marketing relating to develop the market penetration strategies for NPV in Ho Chi Minh city and Binh Duong province Products using in this penetration strategies are NPV existing products and brands This study relates to the development of the marketing strategies including market segmentation, market targeting,... marketing strategy is always a determinant constituent of effective competitive strategy Cravens (1994) defined that marketing strategy is the analysis, strategy development, and implementation activities in selecting market target strategies for the product-markets in each business unit, setting market objectives, and developing, implementing, and Do Ngoc Hoa 8 Developing AFH sales in NPV MMVCFB6 managing... strategies for each product in the mix or line The product strategy includes: Developing plans for new products, this process consists of eight stages: idea generation, idea screening, concept development and testing, marketing strategy Do Ngoc Hoa 18 Developing AFH sales in NPV MMVCFB6 development, business analysis, product development, market testing and commercialization Managing programs for successful... two are Domestic sales and one is Export sales The Domestic sales consist of two divisions CS and AFH NPV has set up a distribution network nationwide for the Consumer sales Its products are delivered from its tissue mill in Binh Duong province The AFH is present in Ho Chi Minh City and Binh Duong province The competition in tissue paper market became fierce in recent years with new investments of tissue... strategy is a plan that indicates how a manager deploys marketing resources on an individual product or product line in order to achieve a specified product objective (such as market-share growth or maximizing cash flow) 2.7 Strategic Marketing Planning Process Various steps in designing strategic marketing planning within an industry can be found in literature and basically there principles are all similar . brands including Pulppy, Kleenex, Paseo, Kissme, Vidon, Vinh Hue, Alice, etc. The tissue products being sold in the market can be divided into categories: towels, toilet roll, napkins, facial,. product-markets in each business unit, setting market objectives, and developing, implementing, and Developing AFH sales in NPV MMVCFB6 Do Ngoc Hoa 9 managing the marketing program positioning. products used in industry. By Some local producers such as NPV, Saigon Paper, Vien Dong, Vinh Co etc. having both Consumer sales (CS) and Away- from- home (AFH) sales. However, AFH sales is underdeveloped