Marketing strategy for Blackmore product in Vietnam market - Assignment Example

?Executive Summary This report aims to create the strategic marketing for Blackmore Company in order to expand the business operations in international market as Vietnam regarding to its nutritional product. This paper will be concentrated on some important parts of marketing strategy based on the theory of international marketing. Firstly, the entry mode choice of Blackmore Company to entry Vietnam market will be introduced through the joint venture with local organisation as Traphaco which is seen as the big income of selling the vitamins and nutrition products in Hanoi capital of Vietnam. Secondly, SWOT analysis will be coming with the overview of Blackmore’s product based on its brand, quality, technique, product design in order to predict the potential opportunities in Vietnam market. Moreover, analysing Blackmore’ competitors is showed up including: foreign company as Sanofi Aventis of France and Novartis of Switzerland, the local company as Pharbaco of Hanoi and Pharma of Hochiminh city. Furthermore, the company and marketing objectives will be introduced such as providing and contribution the best Australian nutritional product’s quality to Vietnam, creating the brand equity, gaining over 10% of market share in 3 years and standing on top ten biggest suppliers in the nutrition product with vitamins and supplements in medical industry. Next part coming is generic marketing strategies which is focused on branding. In additional, the market segmentation and market positioning will be provided. These task are considered to target consumers such as young, medium and high income class combined with the positioning of product of high quality and price. Finally, this report will be focused on strategies of promotion and product. To sum up the report, the recommendations and conclusion is given. Table of Contents 1. Executive Summary.................................................................................. 2. Table of contents....................................................................................... 3. Introduction............................................................................................... 4. The brief background to Blackmore Company and product. The summary of macro-environment analysis of Vietnam market................................. 5. Entry mode choice.................................................................................... 5.1 Why choose the joint venture to entry? .............................................1... 5.2 Partner selection................................................................................ 6. SWOT analysis....................................................................................... 7. Competitor analysis............................................................................... 8. Company objectives, marketing objectives and generic marketing strategies............................................................................................... 8.1. Company objectives....................................................................... 8.2. Marketing objectives....................................................................... 8.3. Generic marketing strategies for Blackmore in Vietnam market..... 9. Market segmentation and brand positioning for Blackmore product....... 9.1. Market segmentation......................................................................... 9.2. Blackmore’s brand positioning........................................................ 10. Marketing mix strategies............................................................................ 10.1. Promotion strategies......................................................................... 10.2. Product strategies............................................................................. 11. Conclusions.................................................................................................. 12. List reference................................................................................................. 3. Introduction In term of globalisation and gaining competitive advantage combined with the rapid development of technology and adaption of the business world, most firms decide to expand their product to international market in order to survive and develop. To penetrate successfully in overseas market, it is important to create the effective international marketing strategy. According to Bearden and Hewett (2001), they argued that the international marketing strategies are often created by the headquarters and those strategies will be implemented by the marketing units of foreign subsidiary. Moreover, improvement of business performance is seen as the potential of a particular international marketing strategy based on Samiee & Roth (1992). Therefore, in order to determine the goals and objective for the firm, a stable marketing strategy is seen as a big advantage and easier to implement it from headquarter in home country to subsidiary in the host country. Introducing to Vietnam, the developing country is demonstrating as the good and potential business place to invest in the world of business competiveness and business activities expansion. Vietnam could be a potential market for the expansion of Blackmore. To penetrate successfully into Vietnam market, it is significant importance to propose clearly a strategy for marketing regarding to penetrative steps such as the mode entry, SWOT analysis and competitors analysis aim to set a generic marketing strategy with marketing objective, segmentation, product positioning, brand and marketing mix (Lowe & Doole, 2008). This report will be divided into some main section. Firstly, the brief summary of Vietnam macro-environment, Blackmore Company and product will be introduced. After that, the report is coming with the entry mode choice, SWOT and competitors analysis. Next section is showing the objectives of company, marketing, and generic marketing. Based on those sections, marketing segmentation, brand positioning, marketing mix strategy with focusing on promotion and product will be analysed. 4. The brief introduction to Blackmore Company and its product concerned to expansion, summary of Vietnam macro- environment analysis. Blackmore Company is one of the tops Australian companies in the medical industry and a market leader with product in field of Vitamin Herbal and Mineral Supplement which was established in the 1930s in Australia. More than seventy years its growth and operation in Australian market as well as New Zealand and some Asian countries, Blackmore is continuing to perform well the firm’s goals and objectives in order to create the best value and encouraging to its consumers in today’s concern with natural health care (Blackmore report, 2011). 5. Entry Mode Choice: It is a critical decision for any company to choose an entry mode for the expansion of its business in international market as it can influence a company in either positive or negative manner because the benefits and the risks factors are connected with each form of strategy, a company wish to adopt. Expansion in foreign market can be made through four different strategies like: Exporting of goods to another country. Licensing with the targeted country. To share benefits and risks through a joint venture, Foreign direct investment. All these strategies can be followed to enter an international market but strong strategic and systematic negotiations are required before making any final agreement (Thomas Andexer, 2006). Exporting goods to another country seems an easy job but it includes four different processes which are Exporting end, importing end, Transportation backup with freight processes and satisfying the government policies of both ends. Licensing is about getting the authority to use land or property in another country who issues a license and such lands are mostly intangible. Joint Venture is a big step and involves many issues but that could be done with a company of the targeted country and the outside owner of a different country on the basis of mutual understanding and strategic approach. However, it is a bold step and organizations have to be economically strong enough to face any losses if consequences occur. There could be some issues which cannot be solved if partners mistrust each other. Foreign direct investment is an investment which could be done directly on the land of the targeted country but all investment from bottom to top has to be of the investing company, which is sometimes hard to settle down in a new environment with new workforce and different government policies but the main advantage of this strategy that the complete ownership belongs to the main organization and all decisions are taken with their own priorities (Craig.C, 2005) WHY CHOOSE JOINT VENTURE TO ENTRY? Blackmore preferred stepping into the international market of Vietnam by a joint venture with Trapaco. There could be other ways that Blackmore could have taken to enter the international market but Joint Venture was the most feasible approach for Blackmore to enter Vietnam. Though, it involves huge risks of loss if the partner is not compatible with the business. The basic foundation of a joint venture is to share rewards, risks and technology. The alliance comes out to be best favourable when the strategic goal of partners converges and the competitive goal of both the partners diverges. Partnership works smoothly when they are flexible to learn and adopt changes, however keep their powers of authority to their original proprietary skills. Blackmore has a strong edge in the business world and have a strength to counter such problems but joint venture has several other conflicting issues which come out on a surface with the passage of time. While partners work to maximise the interest of their joined venture, they start protecting their personal gains to maximise their competitive position. There could be potential problems which can result in the termination of the business partnership like cultural difference can be impulsive; lack of interest from any of the partner could raise other problems like mistrust over a system. It is analysed that large business organizations have a niche to solve these issues before they contract a deal which make all the terms and conditions crystal clear. Joint venture is best recommended for Blackmore Company. FDI could also be done but again to overcome cultural differences and new environment to make business investment successful, it was best for Blackmore to adopt joint venture with Traphaco as they both have same classification of work in pharmaceutical industry. PARTNER SELECTION: Blackmore smartly selected Traphaco as a working partner for their joint venture in Vietnam. Traphaco is the leading pharmaceutical industry in Vietnam and trusted by huge majority and continuously growing with their thorough research programs and supportive response from the society. For business growth in any country, it is very essential to understand the common practices and cultural values of that country. Vietnam is a country which has a difficult language to communicate and their cultural values are very ethnic. To approach Vietnamese for the business growth it is essential to communicate the message in their own language, manner and gesture. It is hard for people to accept a new identity and this requires time because the process of acceptance and adaptation is gradual and slow. To save time Blackmore took a very wise decision to involve Traphaco as a partner to work together for business growth in Vietnam (Traphaco website, 2011) SWOT ANALYSIS: The last publication of swot report was released by Blackmore LTD on 20th April 2011 with a complete analysis of Strength, weaknesses, Opportunities and Threats of Blackmore Company. Strength: It is given that Blackmore’s strength is undeniable as it has continuous growing revenue from different part of the world. The best part of Blackmore is that it is serving a wide range of product line and continuously spending a huge amount to get the new researches done. Weaknesses: Blackmore’s weaknesses can be defined as the limited investor confidence and increase in operating expense. Investors are not confident to invest huge amount as there is a need to motivate and attract people to invest in health solutions for their own well being. Opportunities: The best opportunity for Blackmore Pharmaceutical is the latest emerging markets across the world like currently Blackmore is exploring Vietnam to introduce its product line. Another best opportunity could be seek in the Australia’s Ageing Population which would definitely require and prefer to use herbal medicines for their every day health issues. Threats: Government Policies and barrier is the biggest threat for Blackmore Ltd as it could stop them from operating in different part of the world if not satisfy or fulfil all the regulations of the government policies which is a hard task. Like Blackmore did not find way to skip regulations in India for introducing the Flu Medicine. Another factor which could be a threat to Blackmore Ltd is the uncertain R&D outcomes (Global Data, 2011) COMPETITOR ANALYSIS: When swot analysis of any company is released, than competitors takes pace to improve their product in context of swot report to secure their market position in later years. Likewise Blackmore enjoyed the demise of Pan Pharmaceuticals in 2003 and took measures to improve and grow further in health industry (Nathan Bell, CFA, 2008). COMPANY OBJECTIVES, MARKETING OBJECTIVES AND GENERIC MARKETING STRATEGIES: A company works best when it has targeted goals to achieve. Likewise Blackmore has earned a competitive name in medical industry by providing the best of natural solutions with thorough research of knowledge and technological implementation in health sector. Blackmore Company has a passion to invest in the well being of human health and motivate people to invest more and more for this educational cause (O.C Ferrell, 2010) COMPANY OBJECTIVE: Blackmore is continuously working to maintain its leading and competitive position in health sector across the world. Blackmore is progressing strategically to attain the mass market and deliver the best product to new markets like Vietnam. To begin with, Blackmore involved Traphaco, Vietnam’s leading medical company in a joint venture to work together and bring innovations in health sector in Vietnam. Blackmore and Traphaco dealt a systematically to overcome health issues and provide latest natural health solutions in Vietnam and other parts of the world. They have a perfect compatibility to work on as they both believe in blending traditional health solutions with new scientific health solutions in best branded packaging (Blackmore website, 2011) MARKETING OBJECTIVES: Marketing Objectives allow a firm to achieve increase in sales through marketing activities. After its successful journey in Australia, New Zealand, Thailand, Malaysia, Hong Kong, Taiwan, Singapore, and North Korea, Blackmore is in continuous activity to capture health markets in Vietnam. For this purpose, Blackmore’s team of experts have strategically designed marketing objectives with Traphaco to get the best of the response from the consumers. Lately Blackmore adapted a digital marketing program which resulted in a successful exposure of Blackmore vision for health services. The main point was to personalize the costumer to make him feel important and individually attended according to his/her needs. The power of personalization in Vietnam would foster the growth of health awareness among people and would help in winning the trust over different products. To enter a new market, a firm should have a smart way of capturing people’s attention towards its product. Marketing strategies should be designed in a specific, measurable, achievable, realistic and timely manner to gain the market sales. Marketing objectives are always set in regard of company priorities. The joint venture of Traphaco and Blackmore can easily overcome each other’s weaknesses to capture a good range of market. (Michelle D.Hartline,2011) GENERIC MARKETING STRATEGIES: There are five generic marketing strategies from which could be implemented in Vietnam to achieve maximum market response. 1. Best cost provider strategy 2. Low cost strategy 3. Differentiation Strategy 4. Risks of focused strategies 5. Deciding which one to choose. When planning generic marketing strategies, it is good to evaluate economical status of a country. Vietnam has a mass majority of mediocre class who cannot afford expensive medical drugs for everyday use. It is best to keep the cost low initially and give people more value for money and products with appealing feature should be launched first. Cost effects the most and can gain or lose customer’s attraction. Focusing low cost strategy would help gain customers from the rival competitors as well. It is very essential to keep cost according to the attributes your product is offering. Rivals can catch a loop hole of attributes and can come up with strong competitive rates (Craven, 1994) Focus on niche market can help in gaining customers rapidly. Providing efficient medical assistance on unique geographical locations will help gain favour. The best way to capture market is to serve niche buyers. Focusing on differentiation strategy could be a little risky in the beginning but would help Blackmore to provide products according to a specific taste and flavours but would get a great response as rivals cannot immediately meet the differences. Blackmore is a specialized company with different product features and attribute and can easily focus on individual needs but it would help competitor understand the needs of the customer and would serve no time to bring changes in their products. So it is better to start with low cost strategy to enter Vietnam market. Market segmentation and brand positioning for Blackmore product: “Positioning is not what you to the product; it is what you do to the mind of a prospect” (Ries and Trout, 1972) Market Segmentation is an integral part while designing marketing strategies for a particular market and it requires a systematic approach to make product successful. There are three activities involved: Segmentation, Targeting and Positioning of a product. MARKET SEGMENTATION: Market segmentation is an important part and should be carried out with regular intervals to reanalyse the pricing and marketing policies. Market segmentation is the division of market into different segments according to their distinct needs and economical statuses (Smith, 1956). Blackmore can keenly step into Vietnam’s market with a thorough market research with the help of Traphaco contribution in business development. The purpose of the market segmentation is to know and leverage resources which are scarce. Blackmore’s wide range of different product line has a lot to offer for Vietnamese as the people of Vietnam strongly believe on traditional medications with a little chunk of scientific addition. It is best to pursue with those products which are required the most. (Beane and Ennis, 1987). BRAND POSITIONING FOR BLACKMORE PRODUCTS: As following the popular marketing strategies, Blackmore’s specialized staff can easily predict the most appropriate positioning of the brands in different segment. Market Segmentation is further followed by the product placement and brand positioning in different market segments. Brands can be positioned according to its requirement in that particular segment. Different segments may require different brand so it is very impressive for customers to get the best of their requirement. Rivals cannot immediately take measures to divert customers therefore Blackmore would have enough time to capture and convince different masses and market segments. MARKETING MIX STRATEGIES: Marketing Mix is the reformulation of the previous marketing methodology. It is very important to place products after reviewing the demographics and geodemographics of a particular country which involves people’s lifestyle, Psychological Behaviors, Personalities, perceptions and Attitudes towards a particular issue. Blackmore has therefore selected a joint venture to understand all the basic possibilities in Vietnam market and its population. Marketing mix has four basic strategies to follow to understand the practical situation of a market. Four strategies are comprised of: Product, Price, Place and Promotion. These steps can easily guide how and when to launch a product in a Vietnam market (Pando C. 1992) PROMOTION STRATEGIES: Promotional strategies involve two major strategies of push and pull which can be explained further. PUSH: This promotional strategy involves a complete cycle from the manufacturer to the wholesaler and then proceeds further to retailer and then to customer. This is a gradual process as the customer is depending upon how the retailer convinces him to buy a particular product. PULL: This promotional strategy requires funds to invest in promotional activities to attract customers through T.V advertisements, banners, introductory offers, Flier etc. This promotional strategy provokes a customer to ask retailer for that particular product. In Blackmore contest, this would be more appropriate as media is now taken as strong tools to drive consumers towards the product within a short span of time and Blackmore and Traphaco have enough funds to bear this promotional strategy(Peter Cheverton, 2004) PRODUCT STRATEGIES: A product strategy is the main part of a marketing mix. It is very important to decide that what benefits would the consumer get? And at what price would it go best? Here the product feature counts a lot like Product Design, Product Features, Product Quality and Product Branding. These are the things which help in convincing a customer to try something innovative( Global data, April, 2011 “Blackmore limited- financial and strategic swot analysis review”. Craig.C, Julian, 2005, “International Joint Venture Performance in South East Asia”, Edward Elger Publishing. Pando C., Papantoniou, 1992, “Marketing: The complete Awakening”, pg127. Blackmore website (2011), retrieved on10/8/2011 from website: http://www.blackmores.com.au/about-blackmores/company-information/market-and-industry Blackmores report (2010), retrieved on 10/8/2011 fromwebsite: http://annualreport10.blackmores.com.au/blackmores-asia Traphaco website (2011), retrieved on 22,10,2011 from website. http://www.traphaco.com.vn/introduction/introduction?skip_show=introduction Thomas Andexer, 2006, “Analysis and Evaluation of Market Entry Modes Into the Asia-Pacific Region”. Peter Cheverton, 2004“Key marketing skills: strategies, tools, and techniques for Marketing Progress”, Page 123 O.C. Ferrell, Micheal Hartline, 2011, “Marketing Strategy”, Cengagebrain. Read More