VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS Tran Van Hiep MARKETING SOLUTIONS FOR NPK FERTILIZER OF PETROVIETNAM FERTILIZER AND CHEMICALS CORPORATION (PVFCCo) IN THE PERIOD 2012 – 2014 Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS SUMMARY Supervisor: Dr. Tran Doan Kim Hanoi – 2011 TABLE OF CONTENTS ACKNOWLEDGEMENTS.iv TABLE OF CONTENTS. vi LIST ABBREVIATIONS.ix LIST OF FIGURES. x LIST OF TABLES.
The thesis title. Necessity of the thesis. Research aim and objectives. Data sources and Research methodology.
Scope of the research. Significance of the research. Structure of the thesis. 4 Chapter 1: LITERATURE REVIEW.1 The concept of marketing.
The analysis of macro environment and industry. Macro environment analysis. Target market segmentation, selection and positioning. Select the target market.
Positioning in the Market. 20 Chapter 2: NPK MARKET ANALYSIS OF PETROVIETNAM FERTILIZER AND CHEMICALS CORPORATION (PVFCCo). Process of establishment and development. Production and operation performance of PVFCCo.
Macro environment analysis.2 Economic factors analysis.3 Cultural and social factors. Industry environment analysis. NPK Fertilizer market analysis. Pressure from Customer.
Pressure from material sources. Pressure from substitute products to NPK fertilizer.5 Target market analysis of competitors.6 Customers’ comments on NPK fertilizers. Distributor and retailer customers.3 NPK Products Positioning Analysis. Analysis of Competitors’ Marketing Mix.
Japan Vietnam Fertilizers. BinhDien Fertilizers Joint Stock Company. Lam Thao Fertilizers and Chemicals Company (LAFCHEMCO). Baconco Limited Company.
Nam Sao International Joint Stock Company. 64 Chapter 3: MARKETING SOLUTIONS FOR NPK FERTILIZER OFPETROVIETNAM FERTILIZER AND CHEMICALS CORPORATION (PVFCCo)IN THE PERIOD 2012 – 2014.1 Target market of PVFCCo’s NPK fertilizer.2 Positioning strategy of PVFCCo’s NPK fertilizer. Raw material sources. Marketing and distribution capability.
Product positioning of PVFCCo’s NPK fertilizer. Marketing targets for NPK products. Marketing Mix for NPK fertilizer of PVFCCo.89 viii LIST ABBREVIATIONS Abbreviations Abbreviation Name PVFCCo Petro Vietnam Fertilizer and Chemicals Corporation P.T Political, Economic, Social-cultural, and Technological factor N.K Nitrogen, Phosphor, Kalium WTO World Trade Organization VN Vietnam FDI Foreign Direct Investment LAFCHEMCO Lam Thao Fertilizers and Chemicals Company JSC Joint Stock Company AFTA Asian Free Trade Area ASEAN Association of Southeast Asian Nations SWOT Strength, Weakness, Opportunity and Threat ix LIST OF FIGURES Figure1. Marketing Research Process.
PEST Model in macro environment analysis. Five forces model for industry analysis. Marketing mix model.1: Somepictures of PVFCCo’sthe awards.FDI into Vietnam in theperiod 2006 – 2010. Vietnam agriculture products breakdown in 2010.4: NPK consumer from 3003 to 2010.5: Consumption – production balance period 2003 -2010.6: NPK Import from 2003 to 2010.7: The main sources to produce NPK fertilizer product (Mixed Acid Route) 49 Figure 2.8: The main source to produce NPK(Nitro phosphate Route).NPK’s regional demand in 2010 (Unit: percentage).NPK’s regional demand in 2010 (Unit: 1000 tons).
Market share of main rivals in Northern area. Market share of main rivals in Southern area. Market share of main rivals in Central area. Reference information of buying fertilizer.Perceptual Map of NPK products.The designed location of NPK fertilizer production plant.Market share of main rivals in Northern area.3: Market share of main rivals in Southern area.4: Market share of main rivals in Central area.5: NPK’s regional demand in 2010 (Unit: percentage).6: NPK’s regional demand in 2010 (Unit: 1000 tons).7: Structure of distribution system of PVFCCo.Perceptual Map of NPK products.Target output of NPK in period 2012-2014.Target market share of NPK market in period 2012-2014.Target revenue of NPK in period 2012-2014.12: NPK Fertilizer prices in period 2012-2014.
80 xi LIST OF TABLES Table 1.1: Production and operation performance of PVFCCo. NPK Production Companies’ business area in Vietnam market.3: The strengths and weaknesses of JVF.4: The strengths and weaknesses of BinhDien Fertilizer Joint Stock Company.5: The strengths and weaknesses of LAFCHEMCO.6: The strengths and weaknesses of Baconco.7: The strengths and weaknesses of Nam Sao International JSC. Location, capacity and output of factories.1: The plants using NPK fertilizer.2 Strengths and weaknesses of PVFCCo. The distribution system in the target market.
The thesis title Marketing solutions for NPK fertilizer of Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo) in the period 2012 - 2014 2. Necessity of the thesis In the period of economic renovation reform (often known as “Doi Moi”), the most outstanding achievement made by Vietnam agricultural sector is the world appreciation of its food production and exports. After the war end in 1975, Vietnam fell deep into the food crisis. However, since 1989 Vietnam agriculture industry has not only served the domestic demand but also exported products to the world market, namely rice, coffee, cashew nuts, etc.
This remarkable achievement is a result of policy done by the Party and Government, which has paid attention to agricultural development. In addition, the agriculture has also applied the scientific and technical methods and effective usage of fertilizers in farming. Despite the existing achievements, agriculture industry needs further promotion and investment because Vietnam is still a backward agricultural country. The farming knowledge of farmers remains limited as they commonly base on their own experience in cultivation.
Vietnam does need a comprehensive agricultural revolution to develop the industry both in quantity and quality basis or we would fail to catch up the skyrocketing development of the world economy. In order to promote agriculture development both in quantity and quality basis, the industry needs the support and contribution of all economic components, of which the important role of fertilizer production enterprises is undeniable. Fertilizers facilitate plants to have high productivity and quality products. Fertilizer companies must manufacture diversified and good products to meet the market needs.
This would be a responsibility as well as a challenge for PVFCCo when the firm provides urea and NPK fertilizers in the market. Before 2006, the production of fertilizer companies did not meet the need of the market; thus, the marketing activities were not paid enough attention and 1 promoted by the fertilizer companies. Since Vietnam took part in World Trade Organization (WTO) and other economic organizations together with the government’s open policy, the fertilizer market has become very active and effervescent with the participation of both fertilizer production and import firms. As the result, enterprises have to pay attention to the market, customers and in order to increase the market share they have to apply the art of marketing mix with product, price, place and promotion strategies.
PetroVietnam Fertilizer and Chemicals Company joined the NPK fertilizer market after the big players namely Binh Dien, Vietnam Japan, Lam Thao, etc.; the completion is rather fierce. To draw customer’s attraction and convince them to use the company products, PVFCCo must have a right marketing strategy and make the most of PVFCCo’s competitive advantages to break into the target market. To this end, it is necessary for the company to carefully analyze the macro and industry environment and then map out the appropriate marketing solutions for NPK fertilizers of PVFCCo. All the above-mentioned contents are covered in the thesis.
Research aim and objectives The aim of this thesis is to map out some marketing solutions that are suitable to the NPK target market of PVFCCo. To achieve the above goal, the study needs to utilize the following objects. Apply PEST model and Five Forces model to analyze macro-environment and the NPK industry environment. Evaluate the target markets of the rivals and PVFCCo.
Base on the study result, post purchase evaluation the customer satisfaction. Find out what are key characteristics affecting customers’ purchasing decision, which sources of information customers refer to before purchasing products. Apply marketing mix analysis to find out the strength and weakness of rivals in the marketing mix policy: price, product, place and promotion. Propose some marketing solutions for NPK fertilizer products of PVFCCo.
Research questions In order to map out appropriate marketing solution for PVFCCo’s NPK products in period 2012-2014, the thesis must answer the following questions: i. Major research question: What are the right marketing solutions for PVFCCo’s NPK product in period 2012-2014? ii. Minor research questions: What will affect PVFCCo’s marketing policy? What are the main rivals of PVFCCo in the NPK market? What are their strengths and weaknesses? What makes customers satisfied and dissatisfied when they purchased the company’s NPK products? 5. Data sources and Research methodology The research methodology is used in this thesis is case study and this methodology meets the research’s objective.
Data used in the thesis were taken from both realisable secondary data about PVFCCo’s operation collected in the process of working with PVFCCo and primary data collected from interviewing agents and customers in target market about its products, prices, places and promotions and from author’s observation. There are a number of techniques used to conduct a case study research which including: • Interviewing staff and expert • Economic statistic method • Methods of description and comparison 6. Scope of the research The research focuses on evaluating the situation of the Vietnam NPK market, then proposes appropriate marketing solutions for PVFCCo’s NPK products in period 2012-2014. Period 2012-2014 is the target market penetration stage; it is a 3 hard stage since PVFCCo must convince distributors, customers to use their products.
To gain competitive advantages when introducing NPK product to the target market, the thesis must focus on the following issues: i. Analyze the macro and industry environment of the NPK market using PEST model and Poter’s Five Forces model. Analyze the rivals’ marketing mix strategies: product, price, place and promotion strategies to find out the strengths and weaknesses of rivals. Propose some appropriate marketing solutions for PVFCCo’s NPK products in period 2012-2014.
Significance of the research The thesis has summarized the literature review of marketing management and applied it in fertilizer production industry. The proposed marketing solutions will be useful for businesses operating in fertilizer sector. The thesis can be used as a reference document for experts, MBA students and college students in researching, teaching and studying. Structure of the thesis Apart from the acknowledgment, abstract, list of abbreviation, list of tables and graphs, introduction, conclusion, references and appendix, the thesis is organized in to 3 chapters.
Chapter 1: Literature review Chapter 2: NPK market analysis of Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo) Chapter 3: Marketing solutions for NPK Fertilizer of Petrovietnam Fertilizer and Chemicals Corporation in the period 2012-2014 4 Chapter 1: LITERATURE REVIEW 1.1 The concept of marketing There are now a lot of different concepts towards marketing. Many people were false to associate marketing as hard selling and sales promotion as the traditional marketing concept held “marketing is a performance of business activities that direct the flow of goods and services from producers to consumers”. Hence, the traditional marketing focused only on consumption and the marketing activities are sourced from producers Nowadays, marketing industry has developed enormously that administrators have to change their awareness. Before, the enterprises sold “what they have?”, but now they sell “what the market needs?” which makes the marketing concept aligned with the reality, changing from separate marketing to marketing mix.
Marketing has brought the substantial economic effects on all the aspects of the economy. It is an important tool both in theory and reality as well as a science that keeps developing and fulfilling Marketing science is a science that studies the law and characteristics of customer needs towards goods, products, services in the market and the development of approaches to fulfill the customer needs and maximize the economic efficiency in the process of product, distribution, exchange and consumption. Dr Nguyen Viet Lam, Quan tri Marketing) The term of marketing can be understood in different ways, including: - Marketing is doing market research, promotion or the study of market or market research. - Marketing is an art of doing business, is the process of providing the right products and services to the right people, at the right time, in the right place and by the right way.
- Marketing is to search for customers, distribute products and collect money or to do everything to increase sales.