MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM TRAN QUANG HOA MARKETING STRATEGY FOR VIETNAM AIRLINES TO PENETRATE THE US MARKET FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Ho Chi Minh City 2007 MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM TRAN QUANG HOA MARKETING STRATEGY FOR VIETNAM AIRLINES TO PENETRATE THE US MARKET FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT TUTOR: DR. LE NGUYEN HAU Ho Chi Minh City 2007 i DECLARATION I declare that the project entitled “Marketing strategy for VNA to penetrate the US market” is my own work. The information and data analysis of the project are based on reliable sources. I hope that my project will be evaluated seriously and approved to recommend the strategic program for VNA to penetrate the US market promptly. ii ACKNOWLEDGEMENT I would like to express my deep sense of gratitude to my tutor Doctor Le Nguyen Hau, who kindly supported and gave continuous guidance and precious recommendations to this study. He gave cares for clear direction, methodology and conceptual thinking to this study. Further I would like to show my honest appreciation to my mentor Dao Viet Dzung, General Manager of Passenger Sales and Marketing – Southern Regional Office, HochiMinh city – Vietnam Airline for assistance and gave facilities for information getting. My sincere recognition is also for all of my lectures of the MBMM program, my classmates, my colleagues and subordinates, my friends and my family for their continuing encouragement and their assistance of my participation of this valuable training program. Ho Chi Minh City, Vietnam TRAN QUANG HOA Jun, 2007 iii TUTOR COMMENTS ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………….…………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………. iv JURY COMMENTS ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ……………………………………………………………………………………………….……………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………… v EXECUTIVE SUMMARY MANAGEMENT PROBLEM Vietnam Airline (VNA) plans to launch a direct route to the US the beginning of year 2008 and the problem is how can VNA penetrate the US market to compete with other airlines and which strategy will apply to this market. It is the problem that must be solved in this study. THE PROJECT OBJECTIVE: The objective of this project is: To analyze the external and internal environment of VNA in relation to the US market. To develop marketing strategy for VNA to penetrate US market. To recommend strategic program for VNA. RESEARCH METHOD: The process of solving this management problem is based on theories in strategic management and marketing management and information in the external and internal of Vietnam airlines are to be applied to solve this strategic management problem. PROJECT SCOPE: Because of project limitation, this study will focus much on advertising strategy. MARKETING STRATEGY: Based on SWOT analyses and SWOT matrix to bring out the Marketing strategy for VNA to penetrate the US market. vi In this project framework, we will focus much on advertising strategy for this market. BUILD UP ADVERTISING STRATEGY Carry out this strategy in the period of 3 years from 2008 to 2010 as following: 2008 – Deep understanding – Sharing - Main message: Vietnam Airline - outstanding at products, sale networks, price policy - maximum satisfying the customers' need - being a close bridge for family's members, reunions. 2009 - Affirmations - Main message: Vietnam Airline is typical with international services and technological standards - as the typical picture of a renewed Vietnam. 2010 - Constructing faith - Main message: Vietnam Airline - highly responsible against community - supporting and promoting, satisfying the developing need of socio economic of country. DESIRED RESULTS Base on the customers’ profiles and features of US market, the advertising strategy for this new market need to be archived the following targets: - Introduce a new route to our potential customers. - Advertise the preeminent products of VNA compared to the others, especially the using new, modern aircraft – B777. - Popularize our brand name to targeted passengers, making the difference in customer mind about Vietnam. - Coordinate closely with sales department. vii - Consolidate our good relationship with customers å build up the loyalty, create the friendly image. - In US market, the advertisement on media communication and newspaper popularized in Vietnam community should focus on Vietnamese passengers, Vietnamese sales agents. Concurrently, VNA should use US tourist companies to advertise about VNA and Vietnam destination to launch overseas Vietnamese to come back Vietnam for family reunion and business purpose. - In Vietnam market, VN should introduce new products to travel agencies, ticket agents and community via mass communication such as press, TV, brochures and to hotels, local travel points and Embassies where many US experts and oversea Vietnamese are working at. viii TABLE OF CONTENT Declaration….…………………………………………………………………………………………………………………………………………i Acknowledgement…………………………………………………………………………………………………………………… ……….ii Tutor comments…………………………………………………………………………………………………………………………… iii Jury comments………………………………………………………………………………………………………………………………….…iv Executive summary…………………………………………………………………………………………………………………………….v Table of content……………………………………………………………………………………………………………………………….viii Appendix (Figure)………………………………………………………………………………………………………………………… xii Appendix (Table)………………………………………………………………………………………………………………………… xiii Abbreviations…………………………………………………………………………………………………………………………………….xiv CHAPTER ONE 1. INTRODUCTION……………………………………………………………………………………………………………………….1 1.1 Background and Management Problem…………………………………………………………………………….1 1.2 The Project Objective……………………………………………………………………………………………………………….2 1.3 Research Method……………………………………………………………………………………………………………………… 2 1.4 Project Scope……………………………………………………………………………………………………………………………… 2 CHAPTER TWO 2. LITERATURE BACKGROUND………………………………………………………………………………………….3 2.1 Company Internal Analysis………………………………………………………………………………………………………3 2.2 Company External Business Environment…………………………………………………………………………3 2.2.1 Market and Customers……………………………………………………………………………………………………………4 [...]... launching the route to US is competition, noting that 7 - 8 airlines currently transport passengers from the United States to Vietnam and vice versa -2- And the problem is how VNA can penetrate the US market to compete with other airlines and which strategy will apply to this market It is the problem that must be solved in this study 1 2 THE PROJECT OBJECTIVE: The objective of this project is: To analyze the. .. relation to the US market To develop marketing strategy for VNA to penetrate US market To recommend strategic program for VNA 1.3 RESEARCH METHOD: The process of solving this management problem is based on the strategic management framework developed by Pearce and Robinson, 1997 The competitive strategy is determined according to the concepts of Michael Porter, 1998 Theories in strategic management and marketing. .. by US Departure/ Destination With an advantaged geographical position, the West America, especially, California had become a biggest gateway for passengers transporting to US, and in the market between US and Vietnam Although in recent years, the products flight directly from the Northeast Asia gateways to the East and Middle of US have caused the decrease of passenger ratio to the West However, the. .. between the airlines and the agents in the Northern US, operating the same as the BSP(bank settlement program) system in Europe, Asia Most of the airlines, having flights to Northern US, join in ARC Until now, 135 airlines, about 23000 agents and 175 travel agents in US are the members of ARC - 11 - 3.4 SUMMARY Vietnam- US aviation market has regularly grown for many years, average 9% per years in the. .. Airline) open the flight from US to Vietnam via HKG (Hong kong) gateway at the end of 2004, the data of 2005 show that the flow of the passengers through the HKG gateway increase rapidly The general feature is the oversea Vietnamese departuring from LAX, SFO also have the tendency to choose the flights through the TPE gateway, maybe - 10 - because TPE has the variety of flights connecting to Vietnam or... policies to US market is mainly to approach the overseas Vietnamese segment 5.3.2 General strategy 5.3.2.1 Differentiation strategy Develop the diversity of VNA services, upgrade service quality by new and modern aircraft to attract target passengers, brings Vietnamese traditional to US market and continue to develop distribution network This Strategy helps VNA to develop the strengths and use the opportunities... Based on such a company internal common sense the strategy suggestions are formulated 2.5.1 Marketing Strategy The marketing strategy intends capture a larger market share of an existing market through market saturation and market penetration or development of new markets for the current products 2.5.1.1 Advertising strategy Advertising is a non-personal form of promotion that is delivered through selected... structure In the US -Vietnam passengers structure, overseas Vietnamese holds 66.5% of the total O&D for both two way After Vietnam joins the WTO, development of travelers and business passengers segments are growing faster and their proportions also go up in the passenger structure from US From Vietnam, most of the passengers are businessman, overseas students and emigrants to reunite with their families... to 2006 Except the years 2001 and 2003 with the September 11 event and SARS epidemic has pulled this number down much Vietnam s recent accession into the WTO creates big opportunities for VN aviation market, but challenges will also rise to a higher level The aviation market has been expanded, thus VNA has to try to develop markets and its network of flight routes The straight flight from Vietnam to. .. Overseas Vietnamese segment will be the most important segment in the US -Vietnam market in many years, so building approaching policies to US market is mainly to approach the overseas Vietnamese segment From this view, California, which contents 39.5% of the Vietnamese America amount, should be an important destination However, The biggest difficulty faced by VNA when launching the route to US is competition, . OBJECTIVE: The objective of this project is: To analyze the external and internal environment of VNA in relation to the US market. To develop marketing strategy for VNA to penetrate US market. To. environment of VNA in relation to the US market. To develop marketing strategy for VNA to penetrate US market. To recommend strategic program for VNA. RESEARCH METHOD: The process of solving this. Vietnam Airline (VNA) plans to launch a direct route to the US the beginning of year 2008 and the problem is how can VNA penetrate the US market to compete with other airlines and which strategy