Dang Tran Hanh Thong i Final Project - MBAVB3 `DECLARATION I declare that this final project contains no material that has been submitted to any other program in other institutes, colleges and universities. This work was done by author except where due reference is made in the text. ` Signature: DANG TRAN HANH THONG ____________________ Date: Nov.12th , 2012___________________________________ Tai Lieu Chat Luong Dang Tran Hanh Thong ii Final Project - MBAVB3 ACKNOWLEDGEMENTS First of all, I would like to acknowledge all professors and coordinators who provided me valuable knowledge and support at Solvay Business School and Ho Chi Minh City Open University. I would like to acknowledge my tutor, Dr Hoang Thi Phuong Thao, for her great assistance, her value feedbacks help me to find out the way to complete this final project.
I would like to express my huge thanks to my wife who support me and encourage me to complete this research. I would like to acknowledge Board of Director and Sale Department of Petrolimex Gas Company who help me to collect relevant information and database. And, I would like to send my thanks to all respondents. Dang Tran Hanh Thong iv Final Project - MBAVB3 ABSTRACT Purpose: Thanks for the continued growth economic and people’s living standard in past years and many years are coming, bottled LPG business in HCMC to be a potential industry and attracting many suppliers into the market.
Consequence, bottled LPG business industry to be a strong competitive industry, it requests players in the market have to have the relevant marketing strategies for meeting customer satisfaction and achieving enterprise goals. Being one of the most well-known brands in the market, Petrolimex Gas ought to become a leader in market. However, due to lack of efficiency marketing strategies, Petrolimex Gas could not achieve market share as expectation and investment. Research the of relevant marketing concept, marketing strategies and find out the characteristic of the market, customer purchasing habit, main factors affect to purchasing decision, customer awareness, then the proposal an efficiency marketing strategy of Petrolimex Gas for resident household segment is the aim of this study.
Methodology: To achieving the aim of study, the three main theories comprising Swots, Marketing Strategy and Marketing Mix are applied in this thesis. Moreover, secondary data are taken from desk research to get competitor in formation, identified market share and analysis internal information. Primary data are taken from expert interview for learn more the models of bottled LPG industry and mail survey to understand the customer behavior and perception of customer toward to current marketing strategy of Petrolimex Gas. Conclusion & Recommendation: Through the findings of research, author understands what are the main factors influencing and playing the most important for both keeping customer loyalty and acquiring new customers.
Besides, author also understands the customer awareness of Dang Tran Hanh Thong v Final Project - MBAVB3 Petrolimex Gas brand name vs. other competitor brand names; purchasing habit, and the perception of customer toward to current marketing strategy of Petrolimex Gas. After understanding the actual situation of Petrolimex Gas marketing strategy and market situation, a proposed marketing strategy will be recommended for orienting marketing activities to Petrolimex Gas JSC in period (2012-2015) Dang Tran Hanh Thong vi Final Project - MBAVB3 TABLE OF CONTENTS Declaration and Confidentiality. ii Comments of Guidance Counselor.
iv Table of contents. x List of Tables. xi List of Figures. xii List of Charts.
xiii CHAPTER 1 INTRODUCTION 1. Rationale of project and Problem statement. Objective of Project & Scope of Project. Structure of project.
10 CHAPTER 2 LITERATURE REVIEW 2.1 What is the S.1 What is marketing strategy .2 Marketing mix strategy. 13 Dang Tran Hanh Thong vii Final Project - MBAVB3 2.3 Strategic marketing plan .3 Market Grow Matrix Strategy. 21 CHAPTER 3 COMPANY & MARKET OVERVIEW 3. Macro-economic factors.
GDP, GDP/Capita. Bottled LPG market analysis. Bottled LPG in household in HCM. Current market size & market share.
Petrolimex Gas Joint Stock Corporation introduction. Vision, Mission, Core value. PGC sales performance. Current Marketing Strategy of PGC.
Competitive advantage analysis. 41 Dang Tran Hanh Thong viii Final Project - MBAVB3 CHAPTER 4 MARKET RESEARCH FINDING 4. Purchasing habit and reason for using bottled LPG. Factor influencing to purchase decision.
Reason for switching brand. Customer perception toward to PGC marketing plan. 55 CHAPTER 5 PROPOSE MARKETING STRATEGY 5.3 Brand Identity strategy .4Strategic marketing plan .5 Marketing mix strategy .1 Product – Customer solution .2 Price – Customer Cost .6 Developing a revenue plan & marketing budget .7 Detailed of action plan for one year. 64 Dang Tran Hanh Thong ix Final Project - MBAVB3 5.II Appendix II.
IV Appendix III. IX Appendix IV. X Dang Tran Hanh Thong x Final Project - MBAVB3 GLOSSARY OF TERMS AND ABBREVIATIONS LPG Liquefied Petroleum Gas PGC Petrolimex Gas Joint Stock Corporation Petrolimex Vietnam National Petroleum Corporation GPD Gross Domestic Product SFEZ Southern Focal Economic Zone HCMC Ho Chi Minh City Dang Tran Hanh Thong xi Final Project - MBAVB3 LIST OF TABLES -------------- Table 1.1: Numbers of chosen customers in HCMC .2: HCMC GDP & GDP per Capital .3: Sale volume of PGC in HCM in period (2007-2011) .4: Quantity of Agents in distribution network of PGC in HCM .5: Allocation margin cost of 12kg-bottled LPG for customer .6: Comparison of competitor marketing strategy in general .9: Summarized Competitor Analysis. 43 Dang Tran Hanh Thong xii Final Project - MBAVB3 LIST OF FIGURES ----------------- Figure 1.1: Market Research Process .1: The 4Ps component of marketing mix .3: Factors limiting full market development .5: Product – Market Growth Matrix .6: Strategic Planning Process .1: HCMC condominium Supply .2: LPG products demand in Vietnam & HCMC .2: Frequency for using a bottled LPG .3: Reason for using bottled LPG .4: Factors influencing to purchase decision .5: Reason for switching brand .6: Perception of product.7: Perception of Service .8: Perception of Price.9: Perception of Place .10: Perception of Promotion.
54 Dang Tran Hanh Thong xiii Final Project - MBAVB3 LIST OF CHARTS ----------------- Chart 3.1: Bottled LPG market share in 2010 .2: Proportion of Sale volume .3: Typical Route to Market of PGC’s bottled LPG .4: Portion of sale volume in channel .1: Demography of respondents .2: Factors affect for purchasing decision. 50 1 Dang Tran Hanh Thong Final Project CHAPTER 1 INTRODUCTION 1. PROJECT BACKGROUND LPG product: Liquefied Petroleum Gas (LPG) is a flammable mixture of propane & butane used as a fuel in heating appliances from heavy industries: metallurgic, shipbuilding… to light industries: ceramic, crystal factory… and also in household application such as: heating, cooking. Besides LPG is used to fuel internal combustion engines, it is often referred to as autogas.
Nowadays, LPG is used popularly in around the world. LPG is replacing other traditional fuel in some domains such as: cooking, heating, automobile fuel. Emission if using LPG is cleaner than other sources as diesel, gasoline. Compared with using electricity and fossil fuel, LPG is also cheaper in some applications .In Vietnam, LPG in cylinder or bottled LPG is used almost in resident domain and LPG in tank is used in industrial fields.
There are three kinds of LPG product in bottle: Mini size bottled LPG; medium size 10-13kg bottled LPG and large size 45- 48kg bottled LPG. Depending on the level of consumption of customers, they chose the suitable item for their own purpose. In general, Mini size bottled LPG mainly used for portable travel burner, Medium size bottle is used for residential house hold and big size cylinder is used for restaurant and sometimes for heating in light industries. The application of big size one in light industry is depended on technical requirement, design, location of factory and economic condition of customers.
LPG market: In Vietnam, LPG appeared in South of Vietnam in 1957 with small volume. At that time, the demand consumption was around 400 tons annually. Until 1975s it was 2 Dang Tran Hanh Thong Final Project 17,000tons LPG per year and was distributed by Esso and Shell. Because of limited technology; economics and political factors, LPG was temporarily stopped using in Viet Nam.
LPG was used again in 1990s in household appliance as the luxury fuel with small quantity. In period 1994-1995, together with economics development; GDP increased at 8-9%, the living standard has been increasing significantly. Moreover, Vietnam Government has encouraged using clean fuel boosted the consumption of LPG in household & industrial appliance. To take these great opportunities, many corporations took part in this market such as Petrolimex Gas, PV Gas, Saigon Petro, Shell Gas, Total Gas, Elf Gas… Since then, a new era of this kind of fuel was begun.
According the annual report of Petrolimex Corporation 2010, the total demand has been increased from 400ton to 250,000tons in period (1991-2000) and continuously increased up to about 1.2 million tons in 2011. LPG obviously becomes a popular fuel for heating appliance. At present, total demand of LPG estimates at 1.2 million tons whilst domestics LPG manufacturers could produce only 570,000 tons per annual. The shortage is filled by imported sources from China, Malaysia, Singapore In Vietnam, LPG is mainly contained in under pressurized steel tank with big volume and steel bottle with small volume.
LPG firms, who are mostly importers, they supply LPG products to their customers through their distribution network. Together with the developing economics and population, real estate in general and resident apartment is also developing quickly in the big cities to match with housing requirement of Vietnam. It pushes the demand of bottled LPG increase 10% annually. As yet, there are about 80 firms who are importers and 1st class distributor; a hundreds of general agents and thousands of agents trading LPG in Vietnam.
LPG 3 Dang Tran Hanh Thong Final Project firms distribute LPG to their agents and industry customers as the end users. Meanwhile, Agents almost supply LPG in cylinder to resident house unit. RATIONALE OF PROJECT AND PROBLEM STATEMENT Petrolimex Gas Joint Stock Corporation (PGC) Gas company belonging to Vietnam National Petroleum Corporation (Petrolimex) is a state company established by Decision No. 1653 – 1988/QD/BTM in December 25th 1998 by the Ministry of Trade, having registered capital of over 250 Vietnamese billion dongs.
Its function is to import and export liquefied petroleum gas (LPG), distribute LPG in cylinder in the nationwide, LPG equipments, all services related to technological LPG in civil & industries Fields. In Vietnam, PGC have been known as the most famous company in LPG industry with Petrolimex Gas brand name. PGC is offering to the market both LPG in cylinders with medium and large size and LPG in tank. Meanwhile, proportion of LPG in tank takes into account up to 51.27% of total quantity LPG delivered out market; medium bottled LPG type takes 36.78% and the large size takes 11.
(Petrolimex Gas Report in 2011) In general, PGC is one of the leading bottled LPG companies of which distribution network is reached to all of Vietnam provinces and takes nearby 17% market share in Vietnam. PGC import one a half of total quantity LPG for company and the balance quantity is bought from local producers Dinh Co and Dung Quat Processing Plant through Petro- Vietnam. As the continuous economic high growth rate and the increase on living standard in some previous years which is expected to be continued in the future, the government has encouraged using clean fuel to protect the environment. LPG is seemed as an integral energy for heating.
4 Dang Tran Hanh Thong Final Project The above advantage is the foundation for the boom of LPG suppliers with many brands in Vietnam. It also creates the highly competition in the market. Customers could easily choose the best supplier who can offer them best price, quality and services.