UNIVERSITY OF ECONOMICS AND BUSINESS FACUTY OF BUSINESS ADMINISTRATION EVALUATING DIRECT MARKETING MODEL AT CUTTING TOOLS JSC COMPANY Supervisor’s name: Dr. Hoang Viet Ha Student’s name: Mai Tri Dung Class: QH2009E-QTKD Hanoi — May 2013 TABLE OF CONTENTS LIST OF TẠBEESqqdgaauaaqdqqqqiidadgtoGstutitlitttditöagssaadg i LIBT OR FIGURES coeseoeeeensseesennneerddrorbbenivadirakrispiioisoosiseGPDEBIIEUASSIGSYGGIOSS00.89V6 ii ACKNOW LEDGEMENT © sssscvisasevacassvassosuansersocnsnsssuasisnnsnensessanscencumaneunveninesenntes iii i iv CHAPTER: 1. INTRODUCTION vccossstesceansvsnensscsssnsinccsientssneccnnnseivecennissssnestonisecennets 1 1¿1 BACKGROUND S6iiiiscszi6cs0001S340SASEGS0GGSIGGGEASSA(458301343464333333:<82G80389SG3 20.3) OBJECTIVE AND RESEARCH QUESTION. 4 l¿3 ‘STRUCTURE OF THETHESISbbtatiitoi 0E YESTNGEGSGDESIUOEEOEESĐIAOANISAEUNHE 5 CHAPTER 2.
SG HH ngư 6 2.1 DEVELOPMENT OF DIRECT MARKETING CONCEPT.2 DIRECT MARKETING PROCESS.c Q1 2n 111112 vn vn ng ng ky rhy § 2. EORMOFDIRECT NARKEITTNEE cúcg 00010089 nhi HHGEGONGUGELUQGWGuSia-bg § 2:3.1 Face-to-face selling (Personal Selling) soccoiiooibiadsit166110 16 9 250956: LUN CR LAUTELL ION NEL D Sessa trsecte se SCAR ASR EERO NOUN IRSA 0100857443088 10 2.3 Catalog HẠFÄ€[ÏH. 1211111111111 2 1k ng nh Hàn j1 20.4 TO|GHIHFGIMD x gngg6101015659300348g123E449ã9086G388834H830pS3XGHẦN NRXNGHSESSGã)83940os850H0la TI Ad. Directresparse television Marketing escscincaxsmssemnscnnnseccsncracansxtncrencesseniwes 12 2.7 New Digital Direct-Marketing TechnologieS.4 MARKETING PERFORMANCE Bivscsscessessscscsvecrepresseecereeesuesyaverse saan wesmmmeuscscaeeeress 14 BEGGh IID 5 uenuctvssruposgrioobiEitdottieoptisttsExeeogpsidMNGGUEu)00807105)205.1 RESEARCH CONTEXT — CUTTING TOOLS JSC COMPANY.
19 92 COLLECTING GUA OE ATIV EE DTA NT hố ống 19 3.1 Designing the questionnaire to measure qualitative factor of marketing BÍ VITfittrctgtgtioRGEERERHIGDNGIEAAGIGGHERRSEABGISERREINGRRRERRIRIGNINNRNB 19 SB SODA ONE COME CIN ỒN caceecannidinkkHigtiikghhhgghay ces TS Na sens kiến Tšu tot g4 gi gi3A 20 DI GIÁO 272 72.1 Reliability analysis by Cronbach's qÏDÌÏa. Convert datat6 BINOMIAL FORM nanoiibtiertiAEL0AGS6015001413001906886300690258 0018.4 COLLECTING QUANTITATIVE DATA .1 Collecting Exposure data and Reach data of Online Marketing.2 Collecting Exposure data and Reach data of Telemarketing.3 Collecting Exposure data and Reach data ofDigital Catalog Marketing iececccccccccccccccecceceeessseseeesecseeseesecesecesseesececesseeseeseesseceseetseeneetesteenaeents 25 3. “BRAND INFLUENCE POINT”. RESEARCH ANALYSIS AND RESUL.- 26 4,1 DATA DESCRIPTION suoxstsssggssssi6is0e4DRSSSEEEIIABESENSSGIS.1 Reliability of IN_ONL $€dÏ€.- 5c St SE Binh rihhririe 28 G22 REGARD OF PRO OND REGIE DA lAŸỷAllAÀỤ no cố „3Ú 4.2:3, Reliability of INTEL S€Q16 ¡suantiptirsitgsiiikE10014183800156838334660355381568386s5640g581 32 4.4 Reliability of PRO_TEL SCAL0 .5 Reliability of IN_CAT SAL @ Tìm.
36 AO Reliabilith of PRO CAT TGHĨẾ gaqasgdatgiattG,ERUGGGAUGGHGSNGSRĐNQNGH 38 4.3 CONVERTING DATA FROM 5 POINT RATED SCALE TO BINOMIAL FORM.4 COLLECTING QUANTITATIVE DA TA. SH TT như 42 4.5 CALCULATING BRAND INFLUENCE POINT. 43 a0 HYPOTHESES RESULT saconenanmanimnencmcnanemnnnincnunnmscnennccesees 43 CHAPTER 5.1 COMPARISON BETWEEN THREE DIRECT MARKETING FORM.2 SUGGESTION TO IMPROVE EACH DIRECT MARKETING CHANNEL.4 Build and exploit customer database cụt ta gang ga gã 1114481031058: 0040612384 44 5.2 Improve the human resource to fit the requirement of direct marketing 12/2077.3 Improve the performance of Online Marketing .3 Improve the performance of Telemarketing. 46 Co cae enn nm 48 C722 9/232) 2/08 30 ưu o7.
1111 49 LIST OF TABLES Table 3.2: Cronbach alpha values and internal consistency.2 : Reliability statistics of IN OND Stale) sccsccscscsssssssenssecesscvcssecesassscsnexeseass 28 Table 4.3 : Reliability statistics of PRO ONL scale .4 : Reliability statistics: of IN TEDL sale .5: Reliability statistics OF PRO) TEL: SCal6 oi.o: Retiability statistios of-UN, CAT Ste acssissanccussestsscosmvesseswisessasceswranives 36 Table 4.7: Reliability statistics of PRO_CAT scale.ẶẶSĂ SA, 38 Table 4% Qualiative:data before reliability (eS csenccencrsssmomserverisceenevenssnsnenxacevess 40 Table-4.9 Qualitative:data after reliability teSt osssaiassgetslaitatGOaitSaSIEGGSGIAVONERSE 40 Table 4.10 Collection of Quantitative đaf{a.11: Brand Influence PóInt M€8SUTEINHI::::::¿::2262620262202266113511666165116655036ã55g02 43 LIST OF FIGURES Figure 2.1: Form ofDirect Marketing (Philip Kotler, 2010) .2: Brand Influence Metrics (Joanna Seddon, 201 Ì). s11 12111 ng nưy 4] ili ACKNOWLEDGEMENTS First and foremost, I want to show my sincere thanks to my advisor Dr. Hoang Viet Ha — Chief of Executive Officer at Bao Viet Corporation, who have guiding me in writing this thesis. Secondly, I would like to thank Cutting Tools JSC Company and all people there to give me a opportunity to do an interesting internship.
I sincerely thank Mr. Tran Quang Thanh who has instructed me a lot when I work there. Last but not least, I would like to thank all member. of class K54 Business and Administration for their comments and feedbacks on my research.
IV ABSTRACT Direct marketing have become more and more popular in the world. There are many famous company have applied direct marketing model successfully like Dell or Amazon. The advantage of direct marketing is low-cost, efficiency, and strong customer relationship. To attain the advantage of this marketing model, this research aim to introduce about the basic knowledge of direct marketing framework and show the way to measure the performance of this model in the situation of Vietnam.
Three direct marketing form used in the thesis to test efficiency level are online marketing, telemarketing and digital catalog marketing. There are many models to measure the performance of marketing, for example, dashboard or return on investment calculation. However, those models did not provide the marketers about the impact of marketing program on customer’s perception which are essential in the world of social network. Therefore, the thesis had applied the “Brand Influence metric” which used both qualitative data and quantitative data of each marketing channel performance to measure which channel is the most efficiency.
The research was conducted in Cutting Tools JSC Company for one months. Qualitative data was collected from 83 valid surveys combined with quantitative data which was recorded daily through direct marketing platform. After the research, Telemarketing and Online marketing have showed the big advantages in the case Vietnam’s industrial market. Telemarketing has the incredible impact on customer’s perception but low level of reach, while online marketing have the advantage of reaching capability with an average impact on customer’s perception.
Besides it, based on the finding of this research, the thesis also gives some suggestion for company to improve the quality of each marketing channel.1 Background In the market economy model, when competitions are more and more intense, small and medium organization (and even some big corporation) does not want to waste their resources to invest in some kind mass marketing, which affect to the big number of audience, however the percentage of people who can become their customer is difficult to predict. In that competitive market, company needs to know customer response immediately about their marketing activities in order to help them calculate the efficiency of marketing strategy and adopt with the rapid change of customer buying behavior due to the development of technology (Huberman, B. Therefore, direct marketing with the advantage of immediate customer response will become the key tool for company to enhance promotion strategy and also strengthen customer relationship, especially in the process of international integration (Chen, Chiu & Chang 2005); and (Martinez- Lopez & Casillas 2008). Traditional mass marketing techniques are not effective enough to ensure the success of marketing campaign.
To increase customer responses about marketing campaign and lower costs, direct marketing methods are needed. Unlike mass marketing, which focus on highlight the feature of product, direct marketing concern more about the needs of customer, how their product will satisfy customer’s need. This way of approach uses customers’ details through databases, to understand their needs (Tapp 2008). Marketer first identify characteristic through database to recognize their market values and then predict the way customer can react to marketing campaign(Rao, Steckel Joel H.
In the world, direct marketing is becoming the best choice of marketing channel for much organization across a wide variety of industries. Many famous companies in the world have applied direct marketing method as the major marketing channel like tN Dell, Amazon, or Levis, etc. In 2008, Direct Marketing Association, the trade organization that seek to advance all form of direct marketing, had announce that. the direct marketing expense in the UK has reached 50.5 billion pounds, with a 15.The direct marketing budget distribution by organizations has had a 9.8% growth, with an increase in the total number of organizations.
In the case of Vietnam, with a population of over 80 million people, trading relations with over 180 countries and territories, income per person increased from 400 USD (in 2000) to 750 USD (2007), Vietnam is considered to be a new potential market. Many foreign companies (such as Unilever, P & G .) have brought the direct marketing model into Vietnam (with the programs of market research and ‘exploration of customer behavior before doing business). Direct Marketing in Vietnam is expected to facilitate development through: Vietnam's economy grew at high speed, affordability of customers increase, young population with easy acceptable to the new business model, etc. Moreover, the significant growth of communication channel in Vietnam is also supporting condition for the development of direct marketing model.
There are almost 31 million people (2012) have internet access and the number of mobile phone users have reach 116 million users(2012). These figures predict a strong growth trend ofdirect marketing on the basis of the exploitation of digital media in the coming years.2 Motivation Direct marketing has many benefits to company itself. First, direct marketing is a powerful tool for building customer relationships (Kotler. With direct marketing method, company can target an individual or small group consumer through personalized communication.
They can interact with customer by phone or online to promote their offer, learn more about customer needs, and match products or services to specific customer needs. G2 Superior strength of direct marketing than mass marketing is the ability to target on right customer. All marketing resources are focused directly toward the customers who have the desire and ability to buy products. Therefore, company can achieve the efficiency of communication with lower cost.
Marketers can buy database or list of interested people, choosing the most prospective clients, and send messages to each person, thereby saving costs significantly compared with other marketing channel. That way of approach also makes customers appreciate and maintain long-term relationships. Last but not least, an undeniable advantage of direct marketing is the ability to measure the response of the target customers, thereby helping businesses evaluates the efficiency of each marketing program directly. Business can be sure that which program is successful, which program is failed, and then they will have an appropriate adjustment for each group of customers, each product category and each of different market segments.
Finally, the marketing people know that campaigns profitable or not by measuring the customer response. With that benefit discussed above, Cutting Tools JSC (CTJ — the industrial company working in produce and distribute industrial product like saw, grinder, bears .) has corporate with HanoiCDC ( Technology company which supply the online and direct marketing platform) to deploy the direct marketing program in order to have CTJ expanse their business.CTJ and HanoiCDC have decided to use 3 form of direct marketing which work well in the condition of Vietnam, that is online marketing, telemarketing and digital catalog marketing. There’s a famous saying attributed to John Wanamaker, the so-called “father of modern advertising”: “I know 50 percent of my advertising is wasted. I just don't know which 50 percent.” Therefore, with the new way of marketing approach to particular market and customer, after | month of testing and implementation, CTJ seriously have to evaluate their marketing activities in order to realize which form of direct marketing is the most suitable for them.3 Objective and Research question The title of this thesis is “Evaluating direct marketing model at Cutting tools JSC” the aim of this thesis is evaluating the efficiency of3 direct marketing forms which performed by the Cutting tools JSC by applying the “Brand Influence metric” developed by Joanna Seddon and Brandon Evans.
Besides this purpose, the thesis also brings the basic knowledge about direct marketing approach, the potential marketing model in the case of Vietnam. By achieving these goals, the research will answer _ What is direct marketing? _ How to measure direct marketing performance? _ What form of direct marketing is the most efficiency in the case of Cutting tools JSC? 1.4 Methodology By applying the “Brand Influence Metric”, the research needs to collect both qualitative and quantitative of each direct marketing channel performing at CTJ Company. To collect qualitative data, customer was asked to answer the questionnaire provided by author to measure the level of how customer was involved in company messages, and the level oftrust and close about the sources of messages.