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Analyze marketing strategies to position itself of Giaohangtietkiem service on high competition logistics market as in Vietnam as well as make comparison of its marketing strategies with its most significant and big competitor who is Viettel Post and finally come up with marketing plan to launch new service of Giaohangtietkiem on Vietnamese market.
MARKETING STRATEGIES AND SWOT ANALYSIS OF GIAOHANGTIETKIEM Table of Contents Table of figures 1 Introduction 2 Part A: 3 Products 4 Price 6 1 Place 7 Promotions 8 People 8 Process 9 Physical evidence 10 Part B: 10 Introduction of Giaohangtietkiem 10 SWOT analysis 10 Marketing segmentation 12 Differentiating strategies 13 Metrics to evaluate marketing performance for Giaohangtietkiem 14 References 14 Table of figures Figure 1: 7Ps model 3 Figure 2: Viettel Post company 4 Figure 3: Giaohangtietkiem company 6 2 Introduction According to the Vietnam E-Commerce Association (VECOM), along with the high growth rate of e-commerce, 2018 witnessed the strong development of logistics services, last-mile delivery and refund orders (VECOM, 2018) The three outstanding elements of this sector are strong increase in investment, application of advanced technology and fierce competition Currently, VECOM assesses that the market share of nationwide delivery services is still in the hands of domestic enterprises, specifically, Vietnam Post Corporation (Vietnam Post) is a company that provides delivery services hired by 61% of online sales units; next is the Viettel Post (Viettel Post) with a rate of 25% The corresponding rates for EMS (postage from time to time), Giaohangnhanh service and Giaohangtietkiem service are 5%, 1% and 1% respectively (VECOM, 2018) Other delivery units accounted for only 13% (VECOM, 2018) The situation changed for outsourced delivery services in two e-commerce centers, Hanoi and Ho Chi Minh City Ho Chi Minh Vietnam Post and Viettel Post are still the most hired delivery companies but the rate has decreased significantly (Phuong, 2019) In addition, the level of competition among delivery companies is very high, especially in the city Specifically, in Hanoi, the number of units renting Vietnam Post is 20%, Viettel Post is 52% EMS delivery is 4%, Giaohangnhanh service: 10%, Giaohangtietkiem service: 9%, other courier companies are 10% (VECOM, 2018) The corresponding rate in Ho Chi Minh City is 15%, 28%, 10%, 5%, 7% and 43% respecitively (VECOM, 2018) As such, it can be affirmed that Giaohangtietkiem is gaining a part of market shares in the cut-throat market for logistics service in Vietnam Therefore, this report paper aims to analyze marketing strategies to position itself of Giaohangtietkiem service on high competition logistics market as in Vietnam as well as make comparison of its marketing strategies with its most significant and big competitor who is Viettel Post 3 and finally come up with marketing plan to launch new service of Giaohangtietkiem on Vietnamese market Part A: 7P Marketing Mix is a familiar marketing strategy tool, and it is known as the abbreviated version of 7P marketing mix is a 4P model including Product, Price, Place and Promotion (Rafiq & Ahmed, 1995) It is rated as the top 3 traditional marketing models based on statistics by Smart Insights 4P model is designed at the time of selling products without attention to service and the role of customer service in brand building and development Over time, Booms and Pitner added three service elements: People, Physical Evidence and Processes to create the 7P Marketing Mix model today (Booms & Bitner, 1981) 4 Figure 1: 7Ps model The 7P model was invented and published by E Jerome McCarthy in 1960 in Basic Marketing - A managerial Approach for providing intangible services 7P Marketing Mix helps the company to review and identify the essential factors affecting the product marketing process (Booms & Bitner, 1981) Products New and inclusive definition of a marketing concept for a product: a product is a set of benefits (Booms & Bitner, 1981) This definition applies to all categories and types of products, although a product definition by classification is always necessary, but a 5 general definition will cover marketing for all areas, as long as it identifies the product to set up a mission to serve people (Akroush, 2011) By this definition it is not necessary to separate marketing for products or services, marketing for industry or B2B and marketing for consumer goods and B2C (Mohammad, 2015) A product is recognized by the customer, more specifically, it translates the concept of benefits into the concept of value of the same entity, and begins to form brand status according to the value that customers recognize (Akroush, 2011) In the case of Giaohangtietkiem and its most significant competitor who is Vettel Post both provide the same service which is logistics in Vietnam market ViettelPost is a delivery unit of Military Telecom Corporation (Viettel), established in 1997 with a nationwide network Figure 2: Viettel Post company Viettel Post is an organisation specializing in business of a number shipping offerings such as: courier services, express transport services, savings shipping services, plus offerings Viettel Post continually considers human assets as the core aspect and 6 valuable asset With the slogan: "Viettel Post -Go deep to get nearer to people", the business enterprise has constructed a streamlined staffing team, with honesty and hard work ethic to meet customers' wishes when the use of the service The Corporation constantly creates an expert and modern-day working environment, maximizing the proper to work, dedication, development, honor of employees and a harmonious aggregate between enterprises' hobbies and benefits of officers and workers In the coming years, Viettel Post's method will still be to develop a multi-service business, bringing the carrier nearer to customers than each home and global markets, and always asserting that an agency fulfills its duties in the direction of community, socially responsible with Viettel Post it is sustainable development Believing that, with the status of brand and provider quality, with the enthusiasm and intellect of the staff, Viettel Post will be more and greater steadfast on the path of commercial enterprise development and conquering customers While the scope of logistics service of Giaohangtietkiem is providing smaller and fewer options for logistics compared with Viettel Post 7 Figure 3: Giaohangtietkiem company Giaohangtietkiem is a service that has been in operation for more than 5 years After 5 years of operation, Giaohangtietkiem has affirmed its brand and received the trust of thousands of customers throughout the country Although the coverage of Giaohangtietkiem does not extend to remote and mountainous areas, the unit focuses on service quality, so it has attracted and attracted thousands of users Giaohangtietkiem exactly as its name suggests is the most economical delivery unit for customers With this service, customers will be able to use the most professional, most prestigious and cheapest shipping service Price Price is the true amount that shoppers will pay for a product The price depends on the so-called "perceived value" of the product to the consumer alternatively of the goal fee of the product provided, by way of an exact product solely if the purchaser considers that it is right (Booms & Bitner, 1981); A rate is solely viewed to be low priced 8 when the patron perceives it to be beneficial Although this is a subjective thinking and there are relative differences among distinctive consumers, in familiar if a product is priced greater or lower than its perceived cost then the business will not sell (Chikte, 2009) Viettel Post's COD fee is 1.3% of the collected amount, at least VND 20,000 / mail for destination destinations in communes COD charge is 0.8% of collected amount, minimum 15,000 VND / 1 postage for destination being the center of the province or city Giaohangtietkiem provides low delivery service, suitable for small and medium online shops In addition, fast, morning delivery time is delivered with provincial and city orders and support to take place every day of the week, including the evening Place Upgrading to the notion of location as a location of sale, distribution is a device or income community organized professionally and successfully (Phuong, 2019) Place is about bringing merchandise to customers in the most efficient way, however can deliver clients to merchandise in the most convenient way (Akroush, 2011) This method should be called a two-way distribution strategy In the new definition, it is critical to have the concept of distribution channel, which is the meaning of vertical or vertical alignment Each channel is suitable for a distinct product positioning, which is the preeminence of advertising and marketing when bringing collectively an extraordinary advertising feature gadget pushed through a pair of amazing concepts: Segment & Positioning, as an alternative than Multi-segment segmentation & Positioning (Chikte, 2009) Also during this period, Viettel Post established the largest delivery network in Vietnam Therefore, 1,476 post offices and 827 stores have been newly developed, equal to 7 times the total number of post offices opened in the previous 15 years combined, creating jobs for thousands of workers Viettel Post's IT development has been strongly promoted, with popular products such as ViettelPost delivery app, ride- 9 hailing app and MyGo online delivery, VoSo e-commerce platform helping Viettel Post System optimization and labor productivity improvement Giaohangtietkiem nationwide coverage with more than 500 nationwide shipping locations, covering 99% of commune districts, taking goods / delivering over 11,000 communal districts nationwide This will help customers to send goods anywhere while ensuring the quality criteria set on time, saving delivery time between locations across the country, convenient for both shippers and Giaohangtietkiem party in the process of taking, returning goods Shipping signs Giaohangtietkiem has an extremely flexible working hours so that customers can comfortably come to ship almost any time of the day From 7:00 - 22:00 daily, working all Sunday Customers can send in the morning before going to work, taking advantage of noon time to pass through the nearest post office Even at 9:00pm to10:00pm, customers can still send Shipment is now fully active, flexible in time and absolutely does not affect customers' commute time Shipping at the post office is definitely a wise choice for customers who are still maintaining a fulltime job Promotions Mixed promoting or exchanged promotion is a component in advertising combination that is normally misunderstood as the entire advertising technique due to its everywhere, in each industry (Chikte, 2009) However, it is only accomplished as the closing stage when the product has been researched and prepared to launch on the chosen distribution channel, organized to be bought at a calculated price Mixed promotion targets to improve sales, help to make a strong impact on the product to stimulate consumption and at the identical time maximize customer experience (Akroush, 2011) Mixed promotion includes the following forms: Advertising (Catalog, newspaper, television ), sales promotion, promotion, personal income and public family members (Booms & Bitner, 1981) Both of these two logistics service provided many promotional mixed program to attract more customers However, it can be seen that Giaohangtietkiem positioned 10 itself as cheap shipping service provider, it offered customers packages with cheaper prices and more promotions compared with Viettel Post People People include all actors that play a role in providing services and affecting buyers' perceptions; namely employees of the company - people directly involved in providing services, and target customers of the business (Booms & Bitner, 1981) In 2017, the Bunny was chosen to become the mascot of Viettel Post The image of the Bunny has all 4 qualities: Fast - Smart - Honest - Friendly is also the goal to train every day of Viettel Post employees Not only training the qualities of the military postmen, each Viettel Post employee has been improved their working capacity through training activities Viettel Post considers training to be the development platform Viettel Post is not only known as a leading enterprise in the field of delivery, but also has a high-quality workforce Viettel Post's employees are trained to develop their capacity before all assigned tasks At the same time, thanks to training, Viettel Post's staff can improve its competitiveness against competitors, especially, in the current fierce competition market The shipper team of Giaohangtietkiem is professionally trained Attentive attitude to customers, delivery on time Shipper will contact customers before delivery or pick up whether or not it is convenient for the customer at the time If customers are unable to receive their order, the shipper will contact them to reschedule their delivery In the online shopping process, Shipper is the person who directly touches customers, gives customers real shopping experience, so it can be said that shipper is the person shop on behalf of the shop to create images with customers That's why the shipper team is extremely professional, always polite attitude to customers to help shop build image and build trust with customers 11 Process A process consists of a system procedure or professionalism (Chikte, 2009) Development enterprises constantly put the management tactics as the management system as the groundwork for institutionalizing the working apparatus, helping to legalize private responsibilities, or rather, "transparency" of roles and responsibility of every man or woman to genuinely see his duties and powers in a collective administration (Booms & Bitner, 1981) However, the application of preferred administration process systems in some agencies with high grey remember content and excessive carrier quality seems to show ineffective Both Viettel Post and Giaohangtietkiem provided clear and transparent shipping procedures so that their customers can process to deliver their goods with these two companies quite easily Besides, both of the companies offered customers online tracking system to check and follow the status of orders which enables customers to keep tracking and feel safe when the deliver their products Physical evidence Physical evidence refers to all the physical components that consumers will interact with (Booms & Bitner, 1981) For example, product packaging, signs, logos, business reports, brochures, websites and even business cards Established and operated in the market for a long time, both Viettel Post and Giaohangtietkiem have significant and clear physical evidence with their customers due to the fact that each company has significant logo, uniforms, packages and applications which are clear and easy for customers to differentiate Part B: Introduction of Giaohangtietkiem Giaohangtietkiem Joint Stock Company was established in 2013 which is a professional shipping unit, specializing in providing door-to-door delivery services for 12 online businesses After 5 years of operation, Giaohangtietkiem has been voted as the top 1 most favorite carrier of mobile e-commerce platform covering 63 centers of provinces across the country with the scale of more than 20 operation centers, 500 branches and target of reaching 100,000,000 orders in 2018 In 2017, when Vietnam's e-commerce market grew by 25%, the revenue growth rate of delivery businesses was from 62-200% According to forecasts, about 30% of the population in Vietnam is expected to switch to online shopping by 2020, showing that the delivery demand of the e-commerce industry will increase significantly in the near future (EVBN, 2018) Currently, there are more than 50 large and small delivery units nationwide This number has increased 10 times in 5 years (EVBN, 2018) However, only a few businesses have a large market share and are mentioned a lot in the domestic freight forwarding market such as VNPost, Viettel Post, Fast Delivery and Savings Delivery (SEA Group from Singapore) (EVBN, 2018) In the high competition like this, Giaohangtietkiem aims to set itself become the leading shipping service with cheapest price in Vietnam SWOT analysis Strengths ● Connect with customers quickly by chatting on the web or on the app Submit the request and will be responded shortly ● Can create / manage orders online or from phone app ● No need to label with the "From / To" information on the package Customers only need to write the order code, the clerk will print the spot label and paste on the package ● City and inter-city delivery charges are low 13 ● Fast delivery time: In the morning, take and delivery within the day (in the city) Support for grab and evening deliveries, all days of the week ● Storage time is up to 3 days and supports repeated delivery ● Updating the delivery status is easy to understand, hitting customers' mind is a specific situation When customers create an order, its status will be "Received", then it will change to "Dispatched / Incoming" After the employee finishes taking it, it will change to "Retrieved / Already stored" When it is time to broadcast, it displays "Delivered / Delivered" Then it will be "Delivered / Not Checked" or "Delivered / Checked" depending on the payment status of the order ● Display log / tracking of orders ● Submit request for more / update information for each order ● Send detailed reports on the status of orders delivered during the day as well as a record of checking / collecting money Fixed COD transfer 3 times / week Opportunities ● The service price is lower but still ensuring good service quality based on the core values the business has built ● The logistics service market in Vietnam is in high demand with the rapid development of e-commerce Weakenesses ● The "expected delivery" condition is often inaccurate for provincial delivery orders 14 ● Afternoon pickup and evening deliveries are often unsuccessful as promised ● Nationwide delivery is still limited, behind Giaohangnhanh and ViettelPost, but not too big a weakness ● The delivery of battery-powered products like watches is too slow It takes 1 week to deliver from Ho Chi Minh City to Hanoi ● Customer service call center has no contact time for a long time ● There is no address or phone number for each specific warehouse So if customers do not call the switchboard will not know who to find Threats ● High competition from other rivals in the market, especially big rivals with stable financial background such as Viettel Post Marketing objectives ● Increase brand awareness of Giaohangtietkiem among the community of customers (both individual and company) in big cities including Hanoi, Ho Chi Minh, Da Nang, Hai Phong and Can Tho ● Increase sale volume of Giaohangtietkiem (the number of new customers who register and pay for service of the company) Marketing segmentation Giaohangtietkiem's target customers are online shop owners who do not have their own shipping department As the number of online shopping shops increased dramatically and the difference in products gradually decreased, the competitive advantage was mainly in the service Therefore, the shop owners need a carrier to carry out the service in the true sense, giving customers a complete shopping 15 experience, thereby creating a competitive difference and increasing the number of loyal customers for the shop And Giaohangtietkiem has grasped that need and provided shops with a reliable, quality delivery service that helps shops to best serve their customers Thereby improving the service quality and reputation of the shop owners Differentiating strategies Lower service prices but still ensuring good service quality based on the core values the business has built is the biggest difference Giaohangtietkiem wants to build in the minds of customers The core values that Giaohangtietkiem have been building: ● Quick: Is the core value that Giaohangtietkiem endeavors every day to bring to customers Fast is the goods always circulating non-stop, improving productivity on each employee, automating processes based on technology ● Flexibility: Although flexibility is the most difficult problem in operation, Giaohangtietkiem believes that flexibility is the competitive advantage of online businesses to make automation and optimization, mobile technology, etc so that shop or business owners can flexibly serve customers to create a completely new online shopping experience ● Friendly: At Giaohangtietkiem, the service thinking of every employee is to make every effort to bring satisfaction to customers from the delivery / receipt to handle the incident Giaohangtietkiem understand that serving the buyer better is helping the seller more prestigious Not only in humans, Giaohangtietkiem is also friendly in technology systems and operating procedures in a simple and easy to use, most understandable way for users Giaohangtietkiem locates based on customers' perceptions of quality compared to the price paid for services The name Giaohangtietkiem of this business represents a part 16 of Giaohangtietkiem's positioning strategy Giaohangtietkiem wants to create a cheap delivery service but still a standard, fast, efficient and professional shipping service The company wants to build an image of a top quality delivery unit in the minds of customers, specifically with 3 criteria: Fast - fastest, Flexible - most flexible, Friendly - most friendly, as value The core that businesses build is at the same time an image of a young, modern, progressive enterprise with updated technology trends in the system and management process Metrics to evaluate marketing performance for Giaohangtietkiem With the two main marketing objectives including increasing brand awareness and sales volumes, marketing performance for Giaohangtietkiem can be measured via two main indicators: ● Brand awareness indicators: PAR (Purchase Action Ration) and BAR (Brand Advocacy Ratio) According to Philip Kotler (2016), these two indicators come from the 5A model itself and measure the journey from awareness to purchase (Kotler, 2016) For example, after running an advertising campaign, we measure the brand awareness rate of 90%, but the purchase rate is only 20% That means brands are missing out on 70% of brand awareness, which doesn't motivate them to buy Brands will then identify the problem that lies in the attraction and learn steps From there find the direction to solve the problem These two ratios measure the buying journey of customers and give businesses a better overview of marketing activities, regardless of online or offline, digital or traditional application These two indicators show the business results quite clearly and the measurement method is quite simple Therefore, in the future, marketing activities should apply these two indicators ● Sale volumes: sale volume in the case of Giaohangtietkiem should be measured by the number of new customers who register and pay for its logistics service 17 References Akroush, M N., 2011 The 7Ps Classification of the Services Marketing Mix Revisited: An Empirical Assessment of their Generalisability, Applicability and Effect on Performance - Evidence from Jordan’s Services Organisations Jordan Journal of Business Administration, 7(1), pp 116-147 Booms, B & Bitner, M., 1981 Marketing strategies and organisation structures for service firms Chicago: American Marketing Association Chikte, A., 2009 Marketing and the 7Ps A brief summary of marketing and how it works The Charted Institute of Marketing EVBN, 2018 E-commerce industry in Vietnam in 2018, Hanoi: EVBN Kotler, P., 2016 Marketing 4.0: Moving from Traditional to Digital 1 ed New Jersey: Wiley Mohammad, H I., 2015 7PS MARKETING MIX AND RETAIL BANK CUSTOMER SATISFACTION IN NORTHEAST NIGERIA British Journal of Marketing Studies, 3(3), pp 71-88 Phuong, N H., 2019 CURRENT STATUS AND SOLUTIONS TO REDUCE LOGISTICS COSTS IN VIETNAM Malaysian E Commerce Journal (MECJ), 3(3), pp 1-4 Rafiq, M & Ahmed, P., 1995 Using the 7Ps as a generic marketing mix: An exploratory survey of UK and European marketing academics Marketing Intelligence & Planning , 13(9), pp 4-15 VECOM, 2018 Report on logistics services for Vietnamese ecommerce 2018, Ho Chi Minh City: VECOM 18 19