There are two main parts in this report, which are Analysis and Recommendation for Vitiate Telecoms. Firstly, the report will tell basic information about Vitiate Telecoms with its market share, revenue and position in the market. After that, PESTLE will be used to analyze the external environment of the market which Vitiate is in. Therefore, when we understand more understand more about Vitiate situation, Porter’s Generic Strategy and Insofar model will be applied for identifying exactly the existing cost- leadership marketing strategy of Vitiate.
Besides, Vitiate value creation process model will be shown with facts, figures. Finally, to know about the strengths and weaknesses of Vitiate marketing strategy, apart from evidences and figures found out, SOOT is also used in this Analysis task. In task 2-Recommendation, we will use SMART to create a new good goal for Vitiate and then according to this goal, a new marketing strategy will be given out based on criteria of segmentation, targeting and positioning.
The new approach to the market for Vitiate will be mentioned in this part. B. INTRODUCTION In the mobile phone network provider market of Vietnam today, Mobile, Payphone ND Vitiate are the strongest providers. All of them are state-owned enterprises. However, Vitiate is the only mobile phone network provider belonging to the Vietnamese army. Vitiate Telecoms is now at the top of mobile phone network providers in Vietnam.
In 2013, their revenue is four times higher than VENT, which is the mother company of Mobile and Payphone (They, 2013). Their market share is also highest at 44. 05% in Vietnam (VT News, 2013). Moreover, Vitiate even is expanding their market into foreign countries such as Cambodia, Laos, Timer Lest (Moan, 2013). In order to identify existing marketing strategy, its strengths and nakedness, value creation process and then suggest a new marketing strategy, Vitiate will be an interesting choice. C. THE CONTENTS l.
The marketing strategy and its strengths, weaknesses and value creation process of Vitiate: In this task, PESTLE, Porter’s Generic Strategy, SOOT and the model of value creation process will be used to identify Vittles existing marketing strategy, value creation process and then evaluate the key strengths, weaknesses of Vitiate marketing strategy. 1. PESTLE: PESTLE containing five elements, which are Political, Economic, Social-cultural, Technology, Legal and Environmental. PESTLE model- a. Political: The Politics of Vietnam is only One-party Communist state so the Vietnam policy is very stable.
Vietnam became unified in 1975 after three decades of war (BBC News Asia, n. D). Therefore, Vietnam has a De-regulation trend. This will have a good effect on businesses because businessmen will not have to change the business system following Vietnam party too many times. In 2007, Vietnam officially Joined WTFO (World Trade Organization) (The Ministry of Finance, n. D. ) that brought hopes to many people about a new changing economy. Overall, the effect of WTFO on Vietnamese equines has been being quite light because of the monopoly economic. (General Statistics Office, 2013)- Taxation in Vietnam: Vietnam has many types of taxation. There are some types of taxation, which Vitiate Telecoms must pay for the government when doing the business such as Value Added Tax, Corporate Income Tax. Each organization in Vietnam has to pay a big amount of taxation for the government. In 2013, Vitiate was honored for being the second corporation paying the largest amount of Corporate Income Tax for the government (vituperation’s, 2013). It proves that Vitiate is a big and strong network provider in Vietnam. B.
Economic: After Joining WTFO, Vietnamese economy could take many advantages of foreign investment, export market expanding but also many disadvantages such as being affected strongly from the global economic crisis, pressure of foreign direct investment, unstable products prices (The Voice of Vietnam, 2010). The Vietnamese banks have predicted that the inflation growth could increase to 6,74% that will not go over the predicted figure of the government (Doyen, 2013). Therefore, the inflation might be in the government’s control that is really a good sign when Vietnam is still in economic crisis.
This figure is affected strongly by the products belonging to the government’s management while Vitiate Telecoms is a state-owned enterprise. The Gross Domestic Product growth was 5. 4% over the period 11/2013 (Teaching, 2013). Asian Development Bank (ADS) has forecasted that GAP growth could touch 5. 6% in 2014 that is absolutely not a high forecasted figure (Vietnamese People’s Army, 2014). The Vietnamese living standard will not change much. The way people spend their money still will not go higher strongly. People might focus on saving their money that ill be a challenge for any monophonic network providers including Vitiate Telecoms. . Social-cultural: -Percentage of Vietnamese population by ages (undermine, 2013)- The highest number in Vietnamese age structure belongs to people from 15 to 54 years old (undermine, 2013). The population of Vietnam is absolutely young so their trend is toward ‘Modern’, ‘Interesting’ and ‘Dynamic’. It is seen easily that mobile phone is a indispensable equipment today. Not only in big cities but also countryside, people are using mobile phones everyday so Vitiate could take a chance of maintaining their loyal customers and increasing the number of new customers.
It is necessary to take a look at the number of people using mobile phone in Vietnam at the moment. There were 145 mobile phones for every 100 people in Vietnam (Ann., 2012). The Vietnamese population now is 91,949,482 million according to the newest update in 2014 (World Population Review, 2014). As a direct result, there could be over 130 million mobile phones. It is really an advantage for Vitiate Telecoms. D. Technology: Technology factor really plays an important role on the production and development of the whole corporations today. Even, Vitiate also cannot deny the importance of technology.
Vitiate has applied information technology into their production line (Vitiate, 2013). Besides, Vitiate also should think about using social networks to develop the connection within the corporation and with their customers more. For example, they already have Faceable and Website to communicate with customers but they should promote the activity of Faceable more and make it interesting. Keep is also a good tool to be used in Vitiate remote meeting to shorten transit time. E. Legal: As a corporation belonging to Vietnamese Army, Vitiate has the duty of acting allowing the Vietnamese legal and laws.
Vitiate Corporation should understand and know deeply about all of the laws, regulations relating to mobile phone network, information technology. For example, according to the regulations of information technology, the mobile phone network providers are forbidden revealing or exchanging news, information for the purpose of propagandist invasive war, humiliating personals dignity or creating hatred among nations (Legal Normative Documents, 2012). As a consequence, the Vitiate Corporation should take a deep attention on the legal to act right. F. Environmental:
The environmental factor also has a big impact on the mobile phone network. Many mobile phone users complain that there are many uncomfortable noises if they are using mobile phone network in the rain especially in the countryside (Science Technology System, n. D. ). Moreover, Vitiate also focuses on the countryside market so they should take care about this problem and try to fix it soon. 2. Porter’s Generic Strategy In order to identify more clearly about Vitiate existing marketing strategy, Insofar and Porter’s Generic Strategy model will be applied for. A. Insofar model: The first stage of Insofar is Market penetration.
Market penetration is a strategy focusing on the organization’s existing core strengths toward their existing customers in their existing market (University of Cumberland, 2005). Since Vitiate was established, they have been still focusing on their 8 core values, which are: Practices are the test of Truth Growing up through challenges and failures Fast adaptation is a strong competitiveness Creativity is vitality System of thinking Combine East-West The tradition and method of working from army Vitiate is the common house (Vitiate distribution, 2010) Their marketing strategy also does not change.
It goes toward not only people in the cities but also in countryside in only developing countries. Vitiate is absolutely using market penetration strategy. To be more detailed, Porter’s Generic Strategy will be analyzed. B. Porter’s Generic Strategy: Vitiate is using market penetration strategy but to be more detailed about their existing marketing strategy, we will use this model. Firstly, it is easily seen that the targeting market of Vitiate is really large.
Their targeted customers could be rich or poor people, people in cities or in countryside, from North to South of Vietnam even any foreign countries such as Cambodia, Laos, Timer-Lest, Peru, Cameroon, Macaque and Burundi as the newest updated information (Moan, 2014). Their market is definitely very broad at the moment. To define exactly what Vitiate marketing strategy is, it is necessary to look at the comparison among Vitiate, Mobile and Payphone prices: Vitiate Mobile Payphone Prices of calling within the network of the company 1 . 190 vend/minute 1. 80 vend/minute Prices of calling outside the network of the company 1. 390 vend/minute 1 . 780 vend/minute (Vitiate, 2010) (Mobile, n. D. ) (Payphone, n. D. However, it is not only looking at the figures in real but also responses from sellers or buyers to Vitiate. My team and I did a survey around the old quarter in Hanoi. Every sellers said that the number of customers bought Vitiate similar was highest because prices of Vitiate were cheap. There were also many buyers saying that they used Vitiate because it was cheap especially when their families and friends also used this mobile phone network. Images of my friend and I when we were asking one seller in Hang Be street- As a consequence, Vitiate existing marketing strategy is cost-leadership. . Value Creation Process: -Value creation process models- Vitiate has been doing their value creation process as the model b, which is Value creation and delivery sequence in the picture. Steps below will show their method: Choosing values and positioning them: Vittles customer segmentation is from the urban to rural (with the percentage of rural customers is 65%) (Investment report, 2013).
After researching their customer segmentation, they understand that their customers will want “cheap prices” that is the reason why their market selection is the middle class. Beside, as mentioned above, Vittles primarily marketing strategy is to enhance customers’ belief in a relatively ‘cheap’ price for their products and services from Vitiate. Hence their value choosing is based on this. Provide the value: They first started selling mobile phone services at a very cheap price level. As the state of economy improved and customers have become satisfied with their services at the initial price level, Vitiate appreciated their prices.
However, to ensure that customers remain satisfied, they attached extra benefits, or values, to their products and services as the states of products and services development. E. G: *Customers who use Vitiate mobile phone service receive bonus services at reasonably low prices such as: daily express, weather forecast, custom Remington. *Customers who purchase Vittles mobile phones at Vitiate Store will receive discount on their mobile phone service signed with Vitiate over a year *New customers who signed up for long-term service with Vitiate even get a year free calls within its own network. They frequently provide bonuses for prepaid top-ups. (Vegetal, 2014) For the distributing servicing, Vitiate use a very big amount of small retailers. You can easily and quickly find out a retailer, who selling Vitiate products everywhere in the street. Moreover, they also distribute by their own official agents. Coming to Vitiate official agents, customers can buy Vitiate products, mobile phones from different brands, use Vitiate service to fix problems of mobile phone network. Vitiate official agents really do well at this part.
Communicating values to customers: Vitiate mainly communicate their created values to customers via excessive marketing campaign involving the media. In recent days, Vitiate often advertise newly added features or services attached to their products every once in a while. By doing so, Vitiate ‘remind’ their customers of their good services frequently while advertising for more sales. Their Customers Care Department work ceaselessly to make sure their clients is well-satisfied. They make phone calls to ask for feedbacks, they send birthday gifts and New Year’s wishes.
They do the sales promotion for everyone using Vitiate mobile phone network every month. Customers will receive 50% bonus of money for prepaid top-ups (Vitiate, 2014). Outcome: For Vitiate, they are actually selling MORE products while implying a sense of receiving added values for customers. Their extra-services or cell phones mentioned above come at a medium or high price level. However, customers keep purchasing them due to the blind belief that Vitiate is providing cheap products and services; considering their extra benefits, of scours.
For customers, they DO receive added values to a certain degree as all of the extra features that Vitiate promise that would come with a product or service are real. As a result, the level of satisfaction goes up! However, there are some weaknesses in their value creation process. In a consistently more competitive business environment, other competitors such as Mobile, Payphone also pick up their value creation process. They rival Vitiate fiercely. Vitiate is relying too much, in my opinion, on customers’ loyalty; on the implication of a cheap service provider they made.
However, customers have started to realize that Vitiate is no longer the cheapest one in the market. The table above will show an example of prices among Vitiate, Mobile and Payphone. Price of sending messages within the network 300 vend/message 200 vend/message Price of sending messages outside the network 350 vend/message 250 vend/message Beside, some of their added values are not suitable anymore. For an instance, the news express service on their mobile phone is actually annoying customers more than satisfying them.
This is due to the fact that modern technology allows people to gain access to the Internet where they can find and read all the updated news they need. Hence, having a text-based service that comes with extra fees is not the most convincing idea. 4. SOOT analysts We will analyze SOOT of Vitiate. Strengths Good financial budget supported from the Vietnamese government Corporation runs as a united system. Strict and very close tradition inherited from the army Highest market share: 44. % (WAC News, 2013) Broad network Customers services, behaviors of staffs make customers comfortable Weaknesses Quality of products are not really good especially G Ambiguous calculation of customers’ use of mobile phone network Do not have change to products or services Inexperienced in managing Opportunities Cooperate with companies owning free APS of calling and messages Invest more on technology to maintain loyal customers and the market share Strongest mobile phone network providers for high quality with low cost in Vietnam Good human resources based on the Vietnamese young population Threats
Controlling human resources still gets trouble Technology is easy and quick to be old Foreign brands with new technology want to attack Vietnamese market Free APS for free calling and messages such as Fiber, Line, Kaka Talk 5. Key strengths and weaknesses of Cost leadership strategy: From the SOOT of Vitiate, in this part we can recognize clearly about the strengths and weaknesses of Vitiate strategy. Vitiate understands deeply the mentality of customers that they want good products but in a low cost.
As a direct result, Vitiate marketing strategy is focusing on making customers know that Vitiate will provide high quality products tit the lowest cost comparing to other brands. Thinking about Vitiate, thinking about cheap prices. Their marketing strategy makes people think that using mobile phone network is a basic and everyday-need such as eating and drinking. It could be considered as a good strategy. However, this strategy might be not suitable for today. With many attacking of free APS of calling and messages, customers reduces a big amount of using traditional calling and messages services, which are exactly 26.
They feel unnecessary to use 26 services when they can only pay a certain amount of none for 36 or wife to use many APS for calling and messages unlimitedly. Besides, the marking strategy of Vitiate does not have any change in many years. They only focus on cheap prices whereas Mobil bone and Payphone also reduces their prices a lot ( ). Customers do not feel that Vitiate can bring more new benefits to them. However, Vitiate has been doing a very good point in their marketing strategy.
Start from their slogan “Say it your way’, Vitiate has been successful on using their slogan, as a part of marketing strategy to convey their idea of caring to their customers (Marketing Vietnam, n. . ). By hearing and seeing Vitiate customers, they feel that they are cared respectfully. Their marketing important point is that “Customers’ benefits come first, ours later” (Marketing Vietnam, n. D. ). Vitiate also stresses that they are a mobile phone network provider belonging to Vietnamese army so their products quality must be always made sure highly.
II. Task 2: After understanding about the current situation and existing marketing strategy of Vitiate in task 1, we will use the SMART and STEP model to suggest the new marketing strategy for Vitiate. 1. Goals and Objectives: Using SMART model we can create new worktable and possible, reliable goals and objectives for Vitiate. The new goals for Vitiate will be increasing their market share from 44. 05% to 50% and raise the level of profit by 9% in Vietnam comparing to the last year in the next two years. 2.
STEP applied for new marketing strategy: This part will suggest Vitiate marketing strategy in segmentation, targeting and positioning. A. Segmentation: Vitiate should apply Geographic factor into their marketing strategy. Vitiate geographic will be divided into two places: city and countryside. In fact, 65% Vitiate customers belong to the countryside (boatload, 2013). The living standard and lifestyle in countryside is clearly different from the city in Vietnam. Internet with website, social networks are not really popular here so Vitiate should do the marketing activity mostly by television, banners or posters.
In cities, Vitiate had better use social networks such as Faceable, Twitter, and advertisement on Fiber, Line, Kaka Talk to promote their images on customers’ mind more. Besides, using social networks to inform consumers about promotion and new products is really effective. B. Targeting: As we have seen the chart of Vietnamese population in part 1 of task 1, Vietnamese population is absolutely young so Vitiate marketing strategy should take the Vietnamese young as their targets and put the marketing strategy toward them.
Current trend in lifestyle leads people to paying more attention on appearance and status. As a direct result, the key point for marketing strategy is making Vitiate to a higher level of brand status and image. Besides, marketing about customers’ service is extremely important especially with people today, who not only care about the quality of product but also its service. . Positioning: At the moment, Vitiate is doing quite well this step. Vitiate has the highest market share in Vietnam. Their revenue is four times higher than VENT.
Every seller said that the number of customers buying Vitiate similar is biggest. In other words, Vitiate is on the top of mobile phone network provider now. However, to maintain their position in the market and customers’ minds, Vitiate still should think about a really new or updated marketing strategy. 3. Suggested Marketing Strategy in details: Vitiate could find out a new approach to their customers by using social networks. Other mobile phone network providers such as Mobile, Payphone are not using social networks really effectively.
There are not many subscribers in their Faceable accounts. Moreover, some negative comments also appear on their Faceable. Taking advantage from that, Vitiate should concentrates more on Faceable. For example, Vitiate could post news about how to use mobile phone well to avoid bad effect from the mobile phone waves or short fun and meaningful stories about mobile devices, network and connection among people. Besides, using Faceable or Twitter to inform customers about promotions really works because the amount of people using these two social networks is absolutely high.
Another good idea is designing game for people using Vitiate network or coming to Vitiate stores. For example, every people coming to Vitiate stores in three certain numbers of days will have a chance of enjoying game to win big prizes. Moreover, Vitiate also sells a large quantity of different mobile devices in their store so Vitiate can give out some advertisements such as video clips posting to Youth about mobile phones Vitiate sells. Vitiate has reached to the top of mobile phone network providers with proved real figures.