TRƯỜNG ðẠI HỌC MỞ TP.HCM UNIVERSITÉ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBMM4 VUONG BAO AN MARKETING PLAN FOR MICHELIN TYRE IN TRUCK & CONTAINER SEGMENT IN SOUTHERN VIET NAM IN 2011 – 2013 MASTER PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor’s name: Dr Nguyen Van Son Ho Chi Minh City (2010) ACKNOWLEDGEMENT OF COMMITMENT I, Vuong Bao An, have prepared and conducted this “ Marketing Plan for Michelin tyres in Truck & Container segment in Southern Vietnam in 2011 – 2013” as the final project of MBMM4 program I trust the legality of all references, information sources, and materials using to complete the project And I confident to submit it to Professors and MBMM Faculty members ACKNOWLEDGEMENT OF APPRECIATION I wish to express my deep gratitude to my tutor Dr Nguyen Van Son for his useful guidance, suggestions and encouragement through out the project I also would like to express my sincere appreciation to Mr Hoang Trong Hai – Marketing Manger of Michelin Vietnam, for his sharing information, opinion and market insights to create an useful and applicable marketing plan for Michelin Vietnam I also grateful to all my colleagues in Michelin company for the great support and sharing to my research activities I also would like to present my grateful heart to all professors, lecturers and tutors from Open University of Ho Chi Minh City and the Solvay Brussels School, also the genuine thanks to Ms Thuy and Mr Serge for all your kind support during the whole course And the most wholehearted gratitude I wish to express to my parents for their endless love, cares, encouragement and supporting to me during the course of my study ABBREVIATIONS OEM : Original Equipment Manufacturer CPK : Cost Per Kilometre DRC : Danang Rubber Company SRC : Sao Vang Rubber Company PC : Passenger Car TB : Truck & Bus R& D : Research and Development MVP : Marketing Value Proposal ISO : International Organization of Standardization TABLE OF CONTENTS Page Executive Summary ………………………………………………………………… Situation Analysis 2.1 Introduction a) Purpose of study………………………………………………… b) Scope of study…………………………………………………… c) Methodology & source of information………………………… 2.2 External analysis : a) Market analysis ………………………………………………… b) Customer analysis …………………………………………… c) Competitors analysis …………………………………………… d) Environments analysis ………………………………………… 2.3 Internal analysis : a) Company introduction ………………………………………… b) Strategy ……………………………………………………… c) Products ……………………………………………………… 10 d) Resources …………………………………………………… 10 e) KSFs ………………………………………………………… 11 2.4 SWOT Analysis …… ……………………………………………………… 12 Marketing Strategy 3.1 Vision ……………………………………………………………… 16 3.2 Value Customer …………………………………………………… 16 3.3 Value Proposition …………………………………………………… 18 3.4 Value Network ……………………………………………………… 19 Marketing Action Plan 4.1 Product Offer ……………………………………………………… 20 4.2.Pricing ……………………………………………………………… 21 4.3 Promotion ………………………………………………………… 21 4.4 Distribution ………………………………………………………… 22 4.4.Service ……………………………………………………………… 24 4.5 Implementation Schedule ………………………………………… 25 Forecast & Control 5.1 Sales Forecast ……………………………………………………… 26 5.2 Expense Forecast ………………………………………………… 26 5.3 Controls …………………………………………………………… 27 CONCLUSION ………………………………………………………………… 28 REFERENCE …………………………………………………………………… 29 APPENDIX ……………………………………………………………………… 30 CHAPTER : EXECUTIVE SUMMARY Vietnam tyre market in general or truck and bus tyre market in particular is not only a merging market but also very competitive for the new technology tyre It’s so easy to find many tyre brands when coming to any tyre shop such as : Michelin, Goodyear, Bridgestone, Kumho, Hankook ….for the famous foreign tyre manufacturer, DRC, SRC, Casumina …for the local brands and more than 20 Chinese tyre brands playing in the market With the enormous potentiality of market growth, Michelin has a great ambition to become a leader in Vietnam tyre market This project is contributed to above longterm vision by create a 03 years marketing plan for truck & bus tyre segment in the Southern of Vietnam where is the key market of all players to compete The objectives of this marketing plan is create customer’s brand awareness in this potential segment, and following with the result of 5% market share of Michelin tyre in the first year and forecast 20% growth rate for Michelin brand Furthermore, this plan is also expected to all Michelin Vietnam staffs realize and focus to develop the company goal in order to create a team power, a passion which helps company easily overcome any trouble on its way to grow up Details for this project as below : - Overall of truck and bus tyre market in Vietnam – and in the South - Michelin company introduction and vision - Marketing strategy for this plan - Marketing implementation and sales & expense forecast - Control items CHAPTER : SITUATION ANALYSIS 2.1 INTRODUCTION A Purpose of study : Michelin Vietnam has two main business divisions : Passenger Car tyre and Truck – Bus tyre In the truck – bus segment, Michelin gets a rapid growth from 2005 to now with the sales increasing more 200% in 2008 At the first business stage, Michelin put the priority to approach on kind of coach & bus vehicles which require the safe and comfort feeling from the passengers Mileage is also Michelin’s competitive advantage in this segment and makes the big difference from other competitors As the result, Michelin becomes leader in this category for the radial tyre in Vietnam market The remaining category is also a very potential one and is the target for this project This study’s purpose is aimed to help Michelin to become a leader in this category as well B Scope of study : This marketing plan is applied to the Southern market of Vietnam where can cover 80% of target customers and make highest profit C Methodology & Source of information : i Desk research ( Secondary data ) : - With the references to internal data from Michelin Vietnam on its history, products, human resource, etc - The research also use the data from other sources like customs department, economic newspaper, customer database from yellowpages,…etc ii Market research ( Primary data ) : - Quantitative survey was conducted by in-depth interview method with 100 users who are the big transport companies in logistic industry in the South The objective of this survey is to collect information of users in terms of buying attitude, usage condition and customer expectation on tyre performance 2.2 EXTERNAL ANALYSIS : A Market : Vietnam Market size 2008 Other 17% No 10 11 DRC 23% MRF 2% Maxxis 2% Michelin 2% Hihero 4% Siam 4% SRC 19% Birla 6% BS 7% Casumina 14% Brand DRC SRC Casumina Bridgestone Birla Siam Hihero Michelin Maxxis MRF Other Total Quantity 348000 297000 219000 100000 85000 67000 58000 36000 26000 24000 264000 1524000 Truck & Bus Radial tyre market in 2008 Linglong 1% Other 10% Double Coin 3% DRC 4% Hankook 5% Bridgestone 42% Kumho 5% Casumina 5% No Brand Bridgestone Michelin Casumina Kumho Hankook DRC Double Coin Linglong Other Total Quantity 60000 36000 8000 8000 8000 6000 4000 2000 14000 146000 Michelin 25% Michelin tyre business in Vietnam in 2008 is not strong when looking at the whole tyre market, Michelin contributes to Vietnam truck and bus tyre division is only 2% with the whole new technology tyre : radial tyre But in radial tyre market, Michelin is proud of great market share covered 26% and this division is the future market with rapid growth every year Vietnam Market size 2009 MRF 1% Other 15% DRC 23% Maxxis 1% Michelin 2% Hihero 4% Siam 5% SRC 17% Birla 6% BS 8% No 10 11 Casumina 18% Brand DRC SRC Casumina Bridgestone Birla Siam Hihero Michelin Maxxis MRF Other Total Quantity 403098 297942 315468 140208 105156 97182 70104 43500 17526 17526 262890 1770600 Truck & Bus Radial tyre market in 2009 Other 15% Goodride Firestone 1% West1% lake 2% Roadshine 2% Chaoyang 2% Triangle 2% Bridgestone 36% DRC 2% Casumina 2% Unglong 2% GT 3% Kumho 3% Hankook 6% Double Coin 7% M i chelin 14 % No 10 11 12 13 14 15 16 Brand Bridgestone Michelin Double Coin Hankook Kumho GT Unglong Casumina DRC Triangle Chaoyang Roadshine Westlake Firestone Goodride Other Total Quantity 111857 43500 21750 18643 9321 9010 6214 5901 5800 6800 6295 6214 5191 3800 3107 46607 310011 Year 2009 is a year of rapid growth for radial tyre with more than 200% in total market Michelin has also an increase 20% comparing with 2008 but this growth does not catch up with fast growing of the market Beside, in this year is noted also the contribution of many players coming from China offering to the market very competitive price strategy Truck & Bus vehicle Population 300,000 250,000 200,000 150,000 294,905 251,354 209,437 100,000 147,381 163,463 178,511 148,587 2003 2004 2005 2006 50,000 - Year TB Population % increasing YOY 2004 147,381 -1% 2005 163,463 11% 2006 178,511 9% 2007 2007 209,437 17% 2008 2008 251,354 20% 2009 2009 294,905 17% Source : Michelin Marketing Dept In terms of the growth of new truck and bus vehicle, from 2005 onwards we can see the stable increase of new vehicle in Vietnam which is very potential factor for radial tyre market As the same period of time, we can also expect the fast growth of radial tyre due to the support of OEM car maker for radial tyre, almost the truck and bus vehicle registered in 2005 fit with radial tyre in stead of bias tyre B Customers : There are three types of customer in this Truck & Bus tyre segment : + Coach vehicle which mainly carry passenger to province or tourist companies : This customer require the safety tyre with comfortable feeling bringing to their passenger as well as the long mileage + Truck and container haulage vehicle carrying goods in logistic company : The highest concern feature of this customer in terms of tyre offering is the capacity of carrying the load as much as possible Almost these vehicles are overload from two or three times more + Construction truck or heavy truck : The required tyre for this vehicle need to cover the harsh road condition with careless usage of driver 21 4.2 PRICING : Michelin sets the user price in the market as the leader to confirm with the company’s positioning strategy According, in container & normal truck tyre segment, Michelin conduct a lowest cost strategy which is highest buying price but lowest using cost Competition Price Index Tyre size Michelin 10.00R20 XZE2 10.00R20 XZY3 11.00R20 XZE2 11.00R20 XZY3 11R22.5 XZE2+ 12R22.5 XZE2+ 295/80R22.5 XZE2+ 100 100 100 100 100 100 100 Bridgestone Hankook Kumho Continental 98 97 98 98 99 92 97 77 77 81 81 79 82 77 76 76 76 76 77 80 75 DoubleCoin 84 84 82 82 80 86 - 78 78 80 80 76 76 - Source : Michelin Sales Dept (Oct.2010) Besides, in order to approach to new end-user in this segment, the trial using price will also be applied for typical users who will have a chance to test Michelin tyre at the same price with other current brand 4.3 PROMOTION : Some outdoor events and marketing activities will be carried out to meet the target of the brand awareness in customer’s mind and 5% market share in first year and ensure the average 20% growth next two years In year 2011 : 1) CUSTOMER SEMINAR : diffuse the radial tyre knowledge and proper maintenance activities on tyre such as : fitment, air pressure using, tyre repairing manner, benefit of retread tyre,…with 10% discount for participant when buying Michelin tyre 22 2) MICHELIN FAMILY MEMBER : Clients in this segment when register to become a member of Michelin Family will get a attractive package as : • 30% discount or buy at the same price of current using tyre for 02 vehicle to explore the advantage of Michelin tyre against with other tyre brands • Free monthly maintenance activities support for all Michelin tyres conducted by authorized Michelin dealer’s technicians in three big cities : Ho Chi Minh, Da Nang, Ha Noi • Free tyre technical support & training for big fleets who have a workshop and technician team Other events would be made according to market situation and competition actions In year 2012 – 2013 : 1) CPK price campaign : Customer will pay the Michelin tyre price per kilometer used This program will be applied to Michelin Family member only and for customer who realized the benefit of tyre maintenance activities with standard application 2) MICHELIN FAMILY MEMBER : at this stage, all provinces having Michelin dealers will be applied with the promotion of free monthly maintenance activities to create a fully service circle in Vietnam Wherever Michelin dealer is there, customer will be served with professional way 3) Incentive trip for Michelin user : end year trip offering to loyalty users who meet Michelin requirements in terms of usage, volume, performance, 4.4 DISTRIBUTION : The distribution objectives in next three years is create a model of good retailer with full professional service offering to end-user and limit the wholesales activity Michelin Vietnam therefore set up a very profitable sales policy for retailers in terms of selling and giving service to direct users Existing wholesaler is requested to change business model to retailer in order to meet Michelin standard or terminate relationship with Michelin Vietnam after 06 months announced 23 Current sales policy Items Retailer Wholesaler 13.50% 13.50% 13.75% for bank guarantee 13.75% for bank guarantee Quarterly bonus 2% 2% Marketing fund 1% No 1% if >1000 pcs 1% if > 2000 pcs 2% if > 2000 pcs 2% if > 3000 pcs Basic discount Yearly bonus 3% if > 4000 pcs Proposal sales policy from next year Items Retailer Wholesaler 11.0% Basic discount 11.5% for bank guarantee Quarterly bonus 2% Marketing fund 2% Yearly bonus Require to change to Retailer model 1% if >1500 pcs 2% if > 2500 pcs User Service (*) 2% (*) KPIs will set for each dealer and control by Michelin In 2011, in order to meet to objective of supply the full professional service to customer and implement to pull marketing strategy, some criteria for Michelin authorized dealers will be set as follows : a) Have 01 team for sales and after sales service ( at least 01 sales man and two technicians ) and have Michelin certificate in Sales and Service manner b) Dealers workshop have to be equipped completed fitment machine and meet Michelin standard in operation 24 c) Focus on approaching new end-user in this potential segment by 30% total users and following Michelin Selling Way method 4.5 SERVICE : In order to satisfy the end-user and achieve a good performance of after sales service as the strategy of End-user Approach mentioned above, there are some features will be created as followings : a) Michelin Customer Service Team : improve the quality of service in terms of product knowledge, management skill, answering to customer skill, and better advice to customer & dealers… b) Michelin Vietnam website for Truck & Bus tyre : made to diffuse the high technology tyre knowledge of Michelin to customer, to recommend the specific usage for specific customer’s need This is also a good transaction channel between client and company : www.michelintransport.com.vn c) Michelin service team : organize the best Michelin mobility team with welltrained of tyre knowledge and maintenance activities, full equipments are required to have in the Michelin mobile car to conduct all activities of service on the field for customer as well as supply the field training course for dealers 4.5 INPLEMENTATION : Vietnam Southern market is the key market which is covering near 70% market share in compare with the North Therefore, this project will concentrate and conduct almost marketing events in this main zone The implementation plan will be details in the first year in 2011 and strategic items for next two years with tracking and modification plan for each year’s result 25 26 CHAPTER : FORECAST & CONTROL 5.1 SALES FORECAST : The sell-out tyre volume is forecasted to increase 15% in this segment for the first half of the year 2011 in comparing with last year After creating the brand’s awareness by Customer Seminar and deploying the Michelin Family Member program, the market share of Michelin tyre in this segment is expected to expand up to 5% till the end of year 2011 and 20% average growth for next two years 5.2 EXPENSE FORECAST : Marketing budget in 2011 is allocated at some key activities as followings : No Items Venue Amount (USD) Customer Seminar HCM & Da Nang 40,000 Dealer network set up All Vietnam 25,000 HCM & Da Nang 90,000 Trial tyre test program ( for 100 typical users ) Michelin Family Member campaign All Vietnam 100,000 Other promotions All Vietnam 60,000 Training for dealer’s technician All Vietnam 25,000 Other promotions All Vietnam 60,000 Total Amount 400,000 Source : Michelin Marketing Dept In year 2012 to 2013, marketing budget will be created base on the company strategy, market situation and company’s result in 2011 27 5.3 CONTROLS : Annual plan control is set up to ensure that the Michelin Vietnam company achieves the sales, profits and other goals established in its annual marketing plan There are some tools to be analyzed at each period to reviews and interprets the performance results at all levels : a) Sales analysis : this is to measure and evaluate the actual sales in relationship with to the goals b) Market share analysis : this figure needs to be tracked in several detailed factors in order to evaluate and have a best improvement if not achieve the target: - Overall market share in this segment is the first requirement to track, in the year 2011 Michelin need to achieve 5% market share goal for this segment - Served market share : is the sales as a percentage of total sales to the market This figure indicate the trend and potential of increase for this segment - Relative market share : in relationship to main competitor : Bridgestone, Michelin need also to track this factor in order to understand and determine the key segment to develop c) Marketing expense to sales analysis : this ratio indicates the status of marketing expense effect with the sales goal It is needed to understand this factor to evaluate the effect of marketing activities In this project, Michelin is starting to approach new segment with the key objective of brand awareness created in customer’s mind, so the profitability scenario is not priority in analysis d) Brand tracking & customer’s perception survey : this is the efficiency brand measure tool to track and understand customer’s insight 28 CONCLUSION This project aims to suggest the three year marketing plan to develop Michelin brand in new potential segment Michelin Vietnam objective is to become a leader in premium tyre maker with full service to customer It translates the Michelin Group strategy into action plan by deploying the pull marketing concept with focus on users, proposes an exciting and profitable distribution policy which offer the highest margin to authorized dealer network Moreover, by targeting the future tyre market is new technology tyre : radial tyre, Michelin try to diffuse the knowledge of new technology tyre and the importance of maintenance activities to end-user to create the differentiation There are some recommendations about making brand awareness like customer seminar, CPK selling tactic to approach to end-user or Michelin family member to create a complete service offer to user and make customer loyalty…all this will contribute to the whole package of best service offering to client During studying this project, it is found out that Michelin Vietnam need to improve some weakness in terms of distribution policy which understand deeper and create the suitable and profitable sales policy for authorized dealers It is currently not flexible and adaptable to Vietnamese culture In internal company, management also needs to pay more attention on improving the manpower retention in order to create an strong Vietnamese team to conduct the strategy which requires much experience & knowledge on this industry 29 REFERENCES Jean – Pierre BAEYENS An introduction to Marketing Course note for MBMM4 – Solvay Business School, University of Brussels Claire Gruslin Market Research, BIS & Competitive Intelligence Course note for MBMM4 – Solvay Business School, University of Brussels Richard M.S Wilson and Colin Gilligan Strategic Marketing Management – Planning, Implementation and Control, third edition Philip Kolter and Levin Lane Keller Marketing Management, 13th edidtion 30 APPENDIX Figure : Questionnaire of market survey Date QUESTIONNARE : ……………………………………… Company’s name : ……………………………………… Participant’s name : ……………………………………… 1) What is the most important aspect of the tyre when you purchase ? a) As cheaper as possible b) Cheap but quality is acceptable c) Follow the advice of tyre dealer d) Tyre has the lowest CPK ( cost per kilometer ) e) Branded tyre with good quality 2) What is your purchasing channel ? a) Authorized tyre dealer having full service b) Small tyre repairing shop c) Wholesaler 3) What is your payment term when you purchase the tyre at tyre dealer ? a) 100% cash b) 01 to 02 months of credit c) Other :……………… 4) How you fit your new tyre ? a) By your driver b) By your technician team c) By the tyre dealer 5) Do you have the frequent maintenance activities for tyre ? Yes No 6) Do you know about the tyre retreading ? Yes No 7) If yes in Q5, please describe your expectation in terms of retread fee and tyre life after retread ? a) Fee : 30% of new tyre and Quality : 70% of new tyre b) Fee : 20 % of new tyre and Quality : 60% of new tyre c) Fee : 10% of new tyre and Quality : as much as possible d) Fee : ………of new tyre and Quality :………of new tyre 31 8) If a dealer want to sell the tyre with CPK price to you, how about your opinion ? a) Yes, I’m looking for the professional dealer to take care all my tyres b) Yes, let me test with the service quality and decide later c) No, I just want to buy a cheapest price and take care the tyres by myself d) Other : ………………………………………………………… 9) Please tell us a little bit about your business if possible ? a) Kind of load that your truck often carrying : Normal load Heavy/over load b) Kind of speed that your truck often reach : Normal speed High speed c) Kind of road condition that your truck often drive : Regional road National road Local road Off road condition d) Kind of your tyre size that you are using for your truck : 10.00R20 11.00R20 11R22.5 12.00R20 12R22.5 Other :…