MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL DO THI MINH NGUYET UNDERSTANDING CONSUMER BEHAVIOR FOR WASHING MACHINE OF SANYO HOME APPLICANCE ASIA CORPORATION MASTER OF BUSINESS ADMINISTRATION THESIS 60.34.05 SUPERVISOR: DR TRAN VAN HUNG HANOI - 2010 ACKNOWLEDGEMENT I am grateful to a number of people who have helped me in the writing of this research Firstly, I would like to express my gratitude to Dr Tran Van Hung, who guided me all their heart during the process I wrote the assignment Furthermore, I would also like to thank the lecturers who taught me other subjects in BSNEU and created good conditions for me to study and write this assignment I would like to thank Mr Hoang Tat Thang working at Pico Plaza; Mrs Nguyen Minh Ngoc is working at Sai Gon Nguyen Kim Plaza , Where I collect informations, interview and apply qualitative and quantitative methods to understand more about selling and management systems in trade centers in Viet Nam I hope that this graduation assignment will appeal to all of those who helped me make it Do Thi Minh Nguyet ABBREVIATION CoA: Cojoint Analysis CuA: Cluster Analysis WM: Washing machine HCMC: Ho Chi Minh City MBA: Master of Bussiness Administration PLC: Product Life cycle PR: Public relation VND: Vietnamese Dong SWOT: stands for strengths, weaknesses, opportunities, and threats SHA: Sanyo Home Appliances Asia Corporation MM: Marketing Mix LIST OF TABLES LIST OF FIGURES Figure 1: The number of families are using the washing machine in Vietnam (From 2002 to 2008) Error: Reference source not found Figure 2: Result of questionair for customers at trade sites Error: Reference source not found Figure 3: The newspapers and magazines which the consumers often read .59 TABLE OF CONTENTS EXECUTIVE SUMMARY After years of market presence in Vietnam, Sanyo washing machines have become a trusted brand name and familiar in Vietnameses life (especially people in urban areas) Under the influence of market economy, globalization trends have great impact on the operation of manufacturing household goods of Sanyo factory in Vietnam, particularly affecting the consumption of washing machines of Sanyo Home Appliances Asia Corporation Under this context, the overall objective of the study is ti analyze customer behavior for washing machine of Sanyo Home Appliances Asia Corporation, in order to apply maketting mix understanding and other theories of consumer behavior for giving out some best and suitable proposals for Sanyo Home Appliances Asia Corporation to expand the washing machine market share in the next period in Vietnam The data is mainly used as inputs for this thesis are sample questionaires, which gave to consumer at Saigon Nguyen Kim plaza and Pico plaza, make interview with sale managers, data on GSO (General statistic), Sanyo website and its competitors Base on the theories of consumer behavior as: Maketting mix and SWOT analysis and other theories to describe and analyze consumption patterns, attribute preference, impact factors and market segmentation of Sanyo washing machine in Vietnamese maket Following this result, the study obtains findings as: From 1997 to late months of 2006 Sanyo Home Appliances Asia Corporation doing business very well, but from the early months in 2007 to now, the washing machine market share of SHA is decreasing in Vietnam, in 2006 is 40% but in 2007 decreasing at 38% and 2008 is at 35% (Although It was voted top brand in 2009) Only from year 2006 to 2008 the washing machine market share of SHA decrease 5%, this is issue the board of directors of Sanyo Home Appliances Asia Corporation are very worried and embarrassing to find correct steps for SHA SHA leadership has too much japaneses, only employees in charge of the washing machine sector - lack of concentration of market research and launching sales campaigns, the strategies to attract customers from competitors Beside it, SHA is depending too much on the four units – level one agents: 266 agents for a Trade and Service Company, Huong Thuy Company Ltd., the era of the Pacific Trade and Service Company, Trade and Thanh Nha Service Company After reviewing the spending habits of Vietnamese, washing machine features available on the Vietnamese market, which is made by competitors, in order to find its strengths and weaknesses based on the elements of the Marketing mix theory ( 4P) shows: Sanyo are not only afraid of these kinds of competitors as: LG vina, Samsung, Hitachi…., but also the SHA need to pay attention to the products imitated the label such as: Sankyo (imitated from Logo of Sanyo) Sonica (imitated from Sony) It has bad influences to SHA because it will be misunderstood by the people have the low knowledge The obtained sides - About scale of market: nowadays it has been present almost the cities and areas of Vietnam such as: Hanoi, Hai Phong, Danang, Nam Dinh, Can Tho, Binh Duong….besides, the warranty and maintenance centres also have been expanded throughout Vietnam, satisfy immediately whenever the customers’ machines have problem - About market share: In Vietnam, Sanyo has occupied over 40% the market share in 2006 for the home appliances washing machine field ( 14source from internal report of SHA) Having the good result due to the a lot of factors, in there, the quality of product has been believed by the customers, the price is acceptable, the after sale services are good (warranty and maintenance) The limited sides - About market share: Only from year 2006 to 2008 the washing machine market share of SHA decrease 5% For some reasons may be: Not establish the Marketing department separated yet (The Marketing activities depend quite on companies); Not yet investing so much for advertising and financing for the big programes; Staff level; The price is not suitable… Recommendations In the period 2008-2010 SHA needs to have suitable policies to expand Vietnam market as follows: + Establishing the Marketing department immediately and organizing the personnel in there suitably and the most effective + Decreasing the dependence on companies by increasing the agency system, warranty and maintenance centres over Vietnam’ domain, especially is the big cities + Increasing the product advertisements suitably on the mass media such as: newspaper, magazine of consumer, radio, TV However, the expense is very expensive but the effect is very big + Need to invest finance for big programmes such as children programmes, educational programmes, entertainment programmes (especially housework programmes on television) + Adjusting or changing the personnel for Sale department where not having the professional staff about business knowledge + Changing the salary structure suitably, should have favour policies with staff dedicate so much for company + In addition, the board of directors should care for circumstances and mentality of staff, visit them when they are sick or have problem about their mind ABSTRACT This research is going to see the consumer behavior for washing machine of Sanyo Home Applicances Asia Corporation, that helps in identifying the weak points and also reflects the positive aspect of business selling In order to give out the suitable selling methods for Sanyo Home Appliances Asia Corporation, the research is going to carry out following tasks: Analyzing the current situation of the washing machine market share of Sanyo Home Appliances Asia Corporation To find out the factors affected to the washing machine market share of Sanyo Home Appliances Asia Corporation .To find out the advantages and disadvantages of Sanyo Home Appliances Asia Corporation .To understand customer behaviours to give marketing suggestions and recommendations to increase the washing machine market-share of SHA Corporation CHAPTER 1: INTRODUCTION 1.1 Rationale: Vietnam is a developing country, with the population nearly 87 million Vietnam has a thousand-year history, with an originally traditional culture, variety of relics The culture, society, politics are always stable Especially, after 11-9 event Vietnam was considered one of the safest countries in the area and over the world In recent years, along with the development of economy, the incomes of Vietnameses are increasing day by day So their demands about home appliances are also developing The people want to save their time for washing the clothes and the dishes to relax and entertain So the washing machine has been becoming necessary and popular in almost urban families, especially, washing machine is selling well in the big cities such as: Hanoi, Saigon, Haiphong, Danang…,for that important reason, the Sanyo Electronic Osaka Japan invested in Vietnam The project was executed in 1995, including three big share-holders of Corp., are Sanyo Electronic Osaka Japan, Sumitomo Corporation and Sanyo Trading Corporation with invested capital is USD$ 75 millions 1, the operation time of the project is 30 years It run on 26 July 1997 with named Sanyo Home Appliances Asia Corporation (SHA) 1.2 RESEARCH PROBLEM Vietnam is the nation has got the rate of young population, 60% in the age of working (according to the statistic in 2007) This is the cheap and plentiful labour source for the foreign investors in Vietnam but this is also difficult problem for Vietnam’s government to resolve the employment The Vietnameses are very curious and like the new things When seeing the neighbour has got some new things so they also want their house competitors qualification term, so they have about business lowered the quality of washing machine inland Sanyo Vietnam has a factory located in Vietnam so the warranty and maintenance are very and quick convenient Table 3: SWOT analysis in Marketing Mix strategy of SHA 5.2.2 Analysing SWOT base on the result of the above table Strength Is the famous label: the product of Sanyo has appeared in Vietnam about 25 years, it becomes familiar with Vietnamese In addition, the product of Sanyo are also famous over the world The consumers believe: Sanyo has traditional product is washing machine with the stable quality, the price is acceptable in Vietnam With the warranty and maintenance services are quick and careful Having the big market share in Vietnam: the products of Sanyo have high quality, the after sale services are goods, the warranty and maintenance centres located throughout Vietnam inland Sanyo accessed into Vietnam so 52 soon and is develop in time that the income of the people increase, they are willing to buy the necessary things for their families Having a factory located in Vietnam: Sanyo was brave to invest building the factory in Vietnam This is very convenient for guaranteeing and maintaining the product of Sanyo in the market, it is advantage of Sanyo because all the washing machine product of other firms are not having the factory in Vietnam except LG( have a factory in Hanoi).Sanyo need to exploit this advantage to earn the maximum profit in Vietnam Weakness Depending quite on companies in Vietnam market: When accessing into Vietnam market Sanyo was strange so the product sale depended quite on companies Four companies signed the exclusive distribution contract all the products of Sanyo in Vietnam However, the company can find the other customers by establishing the Sale department which is responsible for marketing the other products named Sanyo Not establishing the Marketing department yet and the staff in Sale department have not the qualification about business: Recruiting the staff have the qualification about Marketing or retraining the staff of the Sale department Opportunity The Vietnamese are very curious and like the new things When seeing the neighbour has got some new things so they also want their house have got those Specially, the Vietnamese like the foreign products so much The foreign companies will be successful if knowing this disadvantage of Vietnamese 53 Sanyo Vietnam has a lot of opportunities to expand market share in Vietnam because the washing machine is not only the necessary product for all families in city but also in countryside The company need to develop the advertising and expand the sale system over cities in Vietnam, it will bring many profits for company Threat + The price of Sanyo is higher than that of LG and Samsung in Vietnam This is threatening to the market share of Sanyo in Vietnam + LG had a factory located in Vietnam, is the company of Korea has a lot of culture characters are the same as Vietnam When just accessing into Vietnam market LG has obtained a lot of customers of Sanyo The price is acceptable, the after sale services are good However coming late but LG has finding out the way to access into Vietnam through financing for many interesting films, many TV programmes which are attract the audiences Therefore, the Vietnam’s audiences knew the LG’ label not only in the home appliances electronic field but also in the telecommunications and informatics services….This policy of LG is bring the fantastic result for their business + In recent time, the quality of washing machine of Sanyo is decreasing, the objective of the board of directors is lowering the price of the product by changing the suppliers, the materials, …This will bring the bigger profit in the short time for company but it will affect very seriously to the prestige of Sanyo in the future Sanyo will loss gradually the customers because of the quality of the product In the above situations to motivate the product sale in the market, the company need to have the professional sale department to find the customers for the company To execute this SHA need the following steps : 54 * Building and training the Marketing team have the qualification about washing machine The sale staff are very important because they contact directly to the customers, guide the customers buying the products They know the demand and the taste of the customers So, need to train them carefully and professionally * The personnel of the sale department: need to have many good sale staff every where in the market to avoid omitting the customers * Training carefully the new sale staff, using the old staff to train the new staff, help them to work better and more effectively If doing that, the expense for training the new staff will not increase so much but the effect is very high * Adjust the price policy being accordance with the market situation, research the price policy of rivals and the average income of the people Research and analyse the factors which will affect to the price policy of the company * Need to build a department collect the information of rivals from any sources: newspaper, TV, Internet, from relative - individual information Research the advertisements of rivals, style of machine, price, promotion and the after sale services When the rivals have new washing machine inform immediately to the relative departments to research together 5.2.3 Some methods to collect the information Research and collection the information about new product are very important for production and business enterprises According to Fortune magazine of United State of America, nearly all companies of this nation often apply three methods as follows to collect the information about a new product 55 1- Viewing the attitude of the customers for product This is method to collect the information not need to support or cooperate of the customers This method comprise of surveying the reports to find out the consumption trend of a part customer , research the habits of the customer, view the attitude of the customer when using the product Previously, a lot of managers of USA viewed directly the children playing toys in kindergarten, through collect necessary information to improve the toys which they have been producing 2- Experimenting the sale This method the researcher gather the information about product, distribution channel, the quantity of sale in the agencies …in order to find out the relationship between the production process and sale process When applying this method some companies execute to research the impacts of transferring the package forms compared with the sale result, through define the tastes of the customers and the sale quantity 3- Investigating in the large scale Having the ways when applying this method: - The representative of company will contact directly to the customers by the forums or interviews This is the best way to collect the exact information about a product but the expense is very high - The company can contact to the customer by posting/ the questionnaires to them and then gathering the feedback This method is not expensive but the answer rate is very low (10%-20%) - The company can contact to the customer by phone, this method help the company can contact to every customer, concluding the very important 56 person(VIP) This method often apply to collect the information about any products at specific time The expenditure is high - Contact to the customer by Internet With the advance of informationtechnology, this method is applied so much in the companies It save money, time, investigate a lot of the customers The responsibilities of the departments after collecting the necessary information The technical department: research the washing machine improvements - of rivals, the new scientific achievements how to be applied for washing machine What the rivals’ machine have advantages? Can these be applied for the washing machine of SHA or not ? How is the copyright? How about the rivals’ disadvantages? Has the washing machine of the company got these disadvantages ?If having , can overcome? The Marketing department: From the collected information need to - forecast whether what are the rivals doing? How is the customer policy? Can apply this for SHA or not? Research the advertisements of the rivals whether what have they got new any things to study? Research the big finance programmes of the rivals (what finance for? What is objective?) Contact to the agencies to improve the Marketing method and decorate the shops About advertising: should use the effective advertisement methods on the TV channels as follows: VTV3, HTV7, HTV9, CTV…and newspapers which has got many readers: The newspapers and magazines which the consumers often read The The The Marketing Advertisement Hanoi The 57 Young women Labour Saigon and Marketing news others 80% 44% 24% 20,5% 16,4% 18% 19.5% Figure 3: The newspapers and magazines which the consumers often read9 The sale department: Research the price levels the rivals are applying for the product researching (washing machine) Is this price level suitable with the market in Vietnam or not? How is the distribution system of the rivals ? How are the after sale services (quick and convenient)? How are the alternative components (available or waiting)? After researching these problems have to write down and report to the board of directs to them give the suitable projects Nowadays, the means of communication are very developing Sanyo need to establish professional department to give the information about company, products, services online, answer the queries of the customer and get the orders directly via Internet This event lies quite in the ability of Sanyo Vietnam Sanyo try to research whether can apply the following method to sell their products - The method of selling series: On the website of Levis (famous firm about jeans in the world), the customers can find the specification about sizes, colours, styles given to outline a jeans as they desired Some days late, the jeans you designed yourself will be delivered to you if you want The same as this method, the automobile firms get the orders via Internet to produce the cars as required of the customers As a result, these firms lower the expense about the warehouse and other expenses The responsibilities of the board of directors: Source : Statistics of Vietnam in 2008 58 Based on the clarified analyses and submitted by relative departments to give the correct steps and suitable projects for the items researching From price, technique, warranty and maintenance whether to need adjusting or not? In addition, the board of directors need to care and improve the working conditions of employees better because when they are proud of their working place, they will work hard with their best ability Need to have policies for training and retraining the new and old employees to help them work better and finish their responsibilities delivered the best Although high expense but it will bring new successes 59 APPENDICES: QUESTIONAIR FOR CONSUMER SERVEY Quantitative method • Customers Do you have a washing machine? a, Yes b, No When have you bought that washing machine? a, 5-7 year before b,3–5 year before c,1- year before What kind of washing marchine are you using? a, Sanyo b,LG c,Samsung d,Toshiba e,Other:……… When you attend to buy a washing machine, what label you think of first a, Sanyo b,LG c, Samsung d,Toshiba When you buy a washing machine, what criteria you think of first? a, Price b,Quality c,Promotion What design model woul you like ? a, Front loading b, Top loading 60 Do you know about Sanyo washing machine? a, Yes b, No Why you know about Sanyo washing machine? a, Advertising b,Reputation What kind of volume you like? a, kg b, 8kg c, 9kg d, 12kg 10 What you think about Sanyo washing machine? a, Good b, Acceptable d, Medium e, Bad Qualitative method: • Sale manager How many employees are working at your department (Sale department)? How is the structure of sale department? Can you describe? How does the sale department operate? How are the qualification of staff in there? Could you say something about Marketing activities of Sanyo Vietnam? How are the advertisement and promotion programmes of the company in recent years ? Why does not Sanyo Vietnam advertise many times on mass media and finance for big programmes as LG, Samsung…in order to attract the audiences’ attention about label, prestige of SHA? 61 How to find out the customer’s demand and taste in Vietnam ( Required quality, model, style)? How are the distribution system and the after sale services of the company? Could you show me some reasons which cause the turnover of washing machine in Vietnam market decreasing from the early months in 2007 to now? 10.Could you show me some reasons which cause the turnover of washing machine in Vietnam market decreasing from the early months in 2007 to now? 11.How is the Marketing strategy of Sanyo Vietnam in the next years? 12.In your opinion, at present, Which rivals are competing violently with Sanyo Vietnam? How are the advantages and disadvantages of their compared with those of SHA? • Sale staffs How were you recruited in this department? Do you have business-training certificate? Do you have experiences about washing machine? In your opinion, which factors influence to decrease washing machine market share from the early months in 2007 to now? Do you obey the regulations of your department in working process? In your opinion, at present, Which rivals are competing violently with Sanyo Vietnam? How are the advantages and disadvantages of their compared with those of SHA? • Customers 1- How you think about current marketing activities? How you think obout washing machine market share by Sanyo in Vietnam? What are factors affect to situation (including decreasing market share)? What are strengths and weaknessd of sanyo washing machine? 62 REFERENCES • International Marketing and Export Management - fourth edition (Author: Gerald Albaum, Jesper Strandskov and Edwin Duerr) • Exploring Corporate Strategy – Six edition ( Author: Gerry Johnson and Kevan Scholes) • Direct Marketing Management – Second edition ( Author: Mary lou Roberts- Paul D.Berger) • The Principle of Marketing- Third Edition ( Author: Philip Kotler-Gary Amstrong- John Saunders-Veronica Wong ) • Reasearch Methods for Business Students- second edition ( Author: Mark Saunders – Philip Lewis – Adrian Thornhill) • Statistics of Vietnam in 2000 • The Internal documents of Sanyo Vietnam • The Consumer Magazine of Vietnam • From internal document of companies • Report of Agency of Planning and investment in Dong Nai 63 WEBSITES http:www.booksites.net\Kotler http:www.sgtt.com.vn http:www.vn.so-net.com/sanyo http:www.dongnai-industry.gov.vn http:www.marketingteacher.com http:www.pso.hochiminhcity.gov.vn http:www.ftaresearch.com HTTP:WWW.UDEL.EDU 64 ... machines of Sanyo Home Appliances Asia Corporation Under this context, the overall objective of the study is ti analyze customer behavior for washing machine of Sanyo Home Appliances Asia Corporation, ... for washing machine of Sanyo Home Applicances Asia Corporation The sub- objectives: To analyze the current situation of the washing machine market share of Sanyo Home Appliances Asia Corporation. .. evaluate the information of the market and other competitors…etc 10 As a result, I chose this topic ? ?Understanding consumer behaviour for washing machine of Sanyo Home Applicances Asia Corporation? ??