According to statistics from Vietnam Business Times , there are currently about 15 companies (both domestic and foreign) registered to sell products in the Vietnamese market, including some famous companies such as Kenda (Taiwan), Beston... with competitive quality and prices.
In the context of fierce competition in the current market, Sao Vang Rubber Company must always be proactive in creating, innovating products and constantly improving product quality. The company must always clearly define its position in the market, its market share, in order to have the right business strategy to prevent falling behind.
Table 6: Company's competitors.
Product | Competitors | ||
Tube | tire | car | Danang Rubber Company, Rubber Company |
bicycle | South, Shanghai Tires China | ||
Danang Rubber Company, Rubber Company | |||
Machine tube | tire | car | Southern region, Genda company, joint venture of VM.VT Rubber Corporation, INOUE Vietnam South (IRV), Thai goods, Kenda Taiwan |
Loan. | |||
Sam to | tire | Umbrella | Danang Rubber Company, IAOCOHAMA joint venture, imported goods from India and China. China, Soviet Union, Japan |
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Source: Market Planning Department data.
Looking at the table above, we see: In terms of domestic companies, the Company's biggest competitor is Da Nang Rubber Company, also a State-owned enterprise located in the Central region (city).
Da Nang) jointly produces bicycle, motorbike and car tires with Sao Vang Rubber Company. Da Nang Rubber Company has a large production scale, its products are increasingly prestigious in the market: the Company's market share has accounted for 60% of the market share of all kinds of tires and tubes in the Southern provinces. Da Nang Rubber Company has increased the production capacity of motorbike tires from 30,000 sets per year to 300,000 sets per year, and increased the production capacity of car tires from 60,000 sets per year to 200,000 sets per year. To expand the product consumption market, the Company has implemented a policy of reducing prices and improving product quality by reducing production costs, minimizing administrative expenses (about 5-10% per year), applying modern production technologies, sending engineers to Korea to learn new technologies, importing high-quality raw materials (except rubber)... To make customers aware of its products, the Company has sought out units that use many of the Company's products such as coal mines, construction projects... to bring customers to test drives at 80% of the price but with quality equivalent to imported goods.
Another competitor of Sao Vang Rubber Company is Southern Rubber Company, which is a factory of the Ministry of Defense (Z175) specializing in the production of bicycle, motorbike and automobile tires and tubes, but the competition is not big, mainly in bicycle tires and tubes. Southern Rubber Company is gradually innovating equipment, increasing capacity to improve product quality and reduce product costs.
In general, the two competitors of Sao Vang Rubber Company both have their own strengths and weaknesses compared to our Company.
The competitor's strengths are in the production of bicycle tires and tubes, with prestige and extensive experience, and good marketing capabilities. However, the implementation of after-sales service is not good. In addition, the advantages of Sao Vang Rubber Company are: high level of skills, implementation of synchronous, complete services, guaranteed quality, in addition, the distribution network has been expanded, specifically the Company has a branch in Ho Chi Minh City.
In addition to the two competitors above, the enterprise also has to compete with imported goods and joint venture goods. Currently, the market is selling many tire products with good designs and quality from many different brands such as Kenda (Taiwan), Genda made in Vietnam, joint venture VM.VT Rubber Corporation, Thai and Japanese goods... On the other hand, Vietnamese consumers often tend to prefer foreign goods, especially in cities. This is the biggest difficulty that Sao Vang Rubber Company encounters.
It can be said that Sao Vang Rubber Company is facing strong competition from its competitors. Through a comprehensive analysis of the strengths and weaknesses of competitors as well as an overview of the current Vietnamese market situation, it will be the basis for the Company to come up with appropriate consumption plans and business strategies.
to be more effective and gradually take over more and more
get more market share.
Table 7: Market share comparison table between Sao Vang Rubber Company and competitors.
Company Name | Market share | soy sauce | opposite to | above | market | school |
Tires bicycle | Tires motorbike | Tires car | ||||
Sao Rubber Company | 27% | 20% | 3% | |||
Yellow | ||||||
Da Nang Rubber Company | 20% | 14% | 4% | |||
Da Nang | ||||||
Rubber Company | 35% | 18% | 5% | |||
Southern | ||||||
Other Companies | 18% | 48% | 88% | |||
Source: Compiled from Economic Times and Investment newspapers.
2.2. Analysis of product consumption activities of Sao Vang Rubber Company in recent times
2.2.1. Analysis of the consumption market of Sao Vang Rubber Company's products
Not all markets are created equal, some offer more opportunities than others. Factors that can influence the attractiveness of a market include demand, growth rate, current or potential competition. By examining each of these factors in detail, Sao Vang Rubber Company has built
Give yourself a reasonable consumption strategy to best satisfy the needs of current and future customers.
The Company's current consumer market is very large, spreading from North to South with 5 branches and more than 100 employees.
200 agents, currently accounting for about 50% of the national market share in the rubber industry. The strongest consumption area is in the North with key locations being Hanoi, Hai Phong, Thai Binh... In these areas, only the Company is the largest and most prestigious rubber product manufacturer. It can be considered through the following table:
Table 8: Consumption situation by region of Sao Vang Rubber Company
Unit: Piece
Generic | Domain | North | Central region | Domain | Male | |
Quantity | Ratio weight | Quantity | Ratio weight | Quantity | Ratio weight | |
Bicycle inner tubes Bicycle tires Motorcycle inner tubes Motorcycle tires Tires car | 8.356.1 | 1,235.5 | 2,086.6 | |||
24 | 72 | 89 | 11 | 72 | 18 | |
4.263.4 | 2,548.3 | 3.155.6 | ||||
58 | 43 | 69 | 26 | 88 | 32 | |
856,234 | 53 | 248,651 | 15 | 502,035 | 31 | |
356,157 | 51 | 102,496 | 15 | 235,847 | 34 | |
85,236 | 54 | 33,156 | 21 | 38,433 | 25 | |
Source: Market Planning Department data
Production and consumption in the North have continued to increase strongly in recent years. With tires and tubes
In terms of bicycles, the North always accounts for over 53% of the total national consumption. The same goes for motorcycle tires, in 2001 the North accounted for 51% of motorcycle tires consumed and 53% for motorcycle tubes. Standard car tires consumed in the North reached a proportion of 54%. R2O batteries consumed in the North have gradually decreased in recent years: this is explained by the fact that the North is where many domestic and foreign battery companies are concentrated, such as Van Dien batteries, Duracel...
Meanwhile, in the Central and Southern regions, these products of the Company are facing fierce competition with products of rubber units in the region which are close to the consumption area and have tradition, reputation and quality that are not inferior. In the Central region, the consumption rate of bicycle and motorbike tires and tubes is low (bicycle tubes account for 11%, bicycle tires 26%, motorbike tires 15%...) because the Company does not have a good consumption policy here, the Company has not paid attention to the quality characteristics of the tires and tubes used in this region. People here are used to using products of Da Nang Rubber Company, which have quality and design suitable to their needs. Another part is that the Company uses price reduction measures to compete in the Central market but has not achieved high efficiency. The price of Sao Vang rubber products is always higher than the price of similar products of Da Nang rubber even though the Company has reduced the maximum price for these products.
Table 9: Product price list at
central region
Unit: Dong
Product categories | Company SaoVang Rubber | Company Danang Rubber | ||
Tires | car | bicycle | 14,500 | 14.20 |
Tires | car | machine | 44,000 | 44,000 |
Tube | car | bicycle | 4,300 | 4,100 |
Tube | car | machine | 14,000 | 13,500 |
Source: Compiled from quotes of Sao Vang Rubber Company and Da Nang Rubber Company.
For the Southern market, the consumption rate of tire products is not high compared to the Northern market but still accounts for an important part of the total sales of the Company. The proportion of bicycle tires is low, accounting for only about 18% of the total consumption value, but the proportion of motorcycle tires and car tires is higher than the Central region (30-34%). This is a potential market but the Company has not been able to exploit it because of competition from similar products.
In the coming time, the Company needs to continue to consolidate and increase market share in the Northern market, find ways to penetrate, expand and dominate the Southern and Central markets not only with traditional products but also with the Company's diverse prices and types such as machine parts, grinding products, rubber products, elevators...
2.2.2. Analysis of product consumption forms
In recent years, imported goods from Japan, Thailand, China... and many other tire products from competing brands are flooding the Vietnamese market: to gain market share and customers, the Company must consider its competitors to come up with a reasonable distribution policy.
Based on the results of market research, based on the business's commercial goals (power, safety, profit): Sao Vang Rubber Company has chosen a wide distribution policy for tire products in the Northern region, while for the Central and Southern regions, the Company applies a selective distribution policy. The Company has established 6 branches in Quang Binh, Thai Binh, Quang Ninh, Nghe An, Ho Chi Minh City, Quy Nhon and nearly 200 agents and points of sale scattered, distributed in 35 provinces and cities nationwide. In addition, the Company continues to exploit a number of new markets and seek foreign markets. In addition, the Company also organizes physical movement of goods by means such as classification, packaging adjustment, and complete packaging of products before putting them into circulation. This policy is suitable for tire products serving many people, many subjects in different regions and areas.
Due to the characteristics of tire products, Sao Vang Rubber Company has many branches and representative offices.
agents, agencies such as Thai Binh rubber branch, Xuan Hoa battery factory... From branches that play the role of connecting general agents to agents such as Minh Khai Trading Company (Hai Phong), Minh Thanh Cooperative (Thanh Hoa)...
In fact, Sao Vang Rubber Company sells its products through the following distribution channels according to the following distribution channels model (next page).
Labour
(2)
company
High
(3)
su
(4)
Star
Gold
Spend
effect
Channel 1:
branch
Total
agency
oac
Agent
People
end use
together
Agency
Total
agency
Agency
Diagram 4: Company's distribution channels (1)
N
g.
h Market
n: Number of units
Plan h
This is a direct channel distributing goods to consumers right at the place where the Company produces without intermediaries, the distribution rate of this channel is 10% of bicycle tires, 10% of motorbike tires and 8% of car tires. This is a distribution channel through the Company's product introduction stores and showrooms, so the Company directly contacts customers through the Company's sales staff. Therefore, customer information is often more accurate and faster than other channels. This channel plays a huge role in preventing competitors right in the Hanoi market. This channel provides products promptly and regularly to consumers. Due to the narrow scope of exploitation, the information obtained from customers and the market from the channel is not the most general, the volume of products is not direct, customers come to the Company to buy goods without going through any intermediaries.
all. The Company's customers who consume these products are regular customers, so the channel is very stable and the capital turnover is fast. They are businesses that have demand for technical rubber such as straws, belts, rubber products, rubber boots...
However, the volume of goods consumed is not much because the technical rubber products of the Company are produced in small quantities. A part of these technical rubber products are used right at the Company.
Channel 2:
This channel has a product consumption rate of 15% of bicycle tires, 18% of motorbike tires, 16% of car tires because the intermediaries (sales points) are bicycle factories, automobile assembly and manufacturing plants, bicycle, motorbike and car repair shops. They are the ones who understand well about the tire products being used in the market and can evaluate the quality and price correctly through trial use, and they are also the ones who give decisive advice to customers in choosing tires for their vehicles. This is also the place to promote consumption with a small but somewhat fixed number of products and increase in the coming years. The consumption of products depends on the volume of products they produce. For bicycle companies like Lixeha, tires are one of the inseparable parts of bicycles, customers of those companies are often interested in the tires of their bicycles.
Customer product information is returned to the production site and this information is very important, it helps to perfect the product. To keep the channel sustainable, the company must regularly have good relationships with the points of sale, these relationships contribute to promoting consumption.
Channel 3:
This is the most popular distribution channel of the Company, it is formed throughout the country, most of the products that the Company produces are distributed on this channel. The consumption rate on this channel compared to the total consumption of the Company is 35% of motorcycle tires, 39% of bicycle tires and 38% of car tires.
Agents are present everywhere, providing goods regularly and promptly to meet the needs of consumers. Because these agents are partly commercial companies, they have sales experience and professional qualifications. The volume of goods stored at commercial agents is large, so goods are always ready for sale. Private agents are present everywhere. With the purpose of making a profit, these agents are forced to improve their skills in distributing goods and competing. These agents have convenient sales locations, where they often have advertising signs, and when selling, they often instruct customers on how to preserve and use the goods. Because intermediaries are in contact with customers regularly, they provide the Company with information.
Accurate information about products on the market about consumer needs. That is what type of consumer needs, size, color, quality, weight, quantity and price. These things have helped the Company to come up with appropriate business policies, especially distribution policies to exploit the market in order to gain increasing profits.
Channel 4:
As the Company's most complete channel, the product consumption ratio of this channel is 21% of bicycle tires and tubes, 24% of motorbike products, and 30% of car tires and tubes.
Because of operating in the market mechanism, agents seek to circulate goods to consumers as quickly as possible, and agents are responsible for product consumption. That brings high competitiveness to the channel compared to other channels. Information about customers and markets of this channel is comprehensive, with customers on a large scale. The elements in the channel have high professional expertise, so they have really exploited a significant market share for the Company.
The above four distribution channels are mainly operated in
Northern market
In operating the Company's distribution channels, it is impossible not to mention the 4 branches in the Central and Southern regions: Quang Binh, Nghe An, Ho Chi Minh City, and Quy Nhon.
* Central Branch (Quang Binh, Nghe An):
Mainly apply the type of distribution channel (2) and
(3) but the market share of product consumption is still low, accounting for 10% of bicycle tires, 5% of motorbike tires and 2% of car tires. The number of products consumed compared to the market potential is still too small. The main reason here is that the market in this area has been dominated by Da Nang Rubber Company, consumers here are familiar with using Da Nang Rubber Company's products. This is a potential market that Sao Vang Rubber Company is trying to penetrate, so the Company is having new policies to find ways to suit the tastes of consumers in this market and initially penetrate deeper into the Central market.
* Southern branch (HCMC, Quy Nhon)
Like the Central branch, the Southern branch mainly distributes through channels (2) and (3), but the consumption rate in this market is still too low, accounting for 5% of bicycle tires, 8% of motorbike tires and 6% of car tires. This is because the Company's distribution channel system in the Southern market is not suitable. The elements in the channel are not really attached to the Company, the goods are transported far away, the transportation cost is high, so the product price has been pushed up, thereby reducing the competitiveness of the product. On the other hand, this is the traditional market of the Southern Rubber Company, consumers are familiar with using the products of this Company, so penetrating the Southern market is a challenge for the Company.
Sao Vang Rubber Company requires the Company to have a reasonable distribution policy, create a solid customer base to be able to penetrate and stand firm in the Southern market.
2.2.3. Customer analysis
As we know, a product in the market mechanism is consumed when it is accepted by consumers and the seller receives payment from the sale. On the other hand, according to the perspective of modern marketing, profit is achieved through satisfying customer needs, not through the quantity of goods sold. Therefore, any business that wants to achieve the common goal of profit must research customers to identify the preferences, tastes, habits and purchasing characteristics of consumers, on that basis, adjust production and distribution of goods in the most optimal way.
The Company's product consumption market is mainly domestic, therefore, customers are mostly domestic people and domestic production and business units.
The Company's customers can be divided into two categories.
after:
* Individual customers:
Characteristic is large population, wide distribution
everywhere. This type is often consumed in small quantities but has a wide variety of goods. Demand is almost inelastic to price, the first and most important problem