effective support for finding large-scale wholesalers.
Another important measure is that the Company needs to strengthen its relationship with large customers such as bicycle factories, automobile and motorbike assembly plants, transportation companies... With traditional customers such as Thong Nhat bicycle factory, Lixeha and customers buying in large quantities, there must be strong incentives (discounts, payment by all methods, transportation support...). In strengthening the management of distribution channels, the Company can carry out measures such as sharing, supporting sales training promotion costs, operating work with branches and agents to consolidate the Company's management and control of the entire network. Opening more stores and agents will bring economic efficiency and great revenue to the Company.
3.4. Promote consumption support activities
In the market mechanism, consumption support activities are extremely important. Sao Vang Rubber Company has been gradually carrying out those activities, but so far, its effect on product consumption has not been good. However, in recent years, the amount of products consumed by the Company has increased steadily. This can be explained by the fact that the Company is an enterprise with a tradition of producing tires and tubes to serve essential needs under the prestigious "Sao Vang" brand, with a market.
The North is the battlefield, and the quality has also been improved, the price is suitable for Vietnamese consumers, so although the support activities are less concerned, the products are still consumed. However, in the long run, even during that time, when the same products from domestic, foreign, foreign, joint ventures have flooded, the tariff barriers are removed, the consumption of the Company's products will be more difficult, even now there are some difficulties. Of course, quality and price must still be emphasized. But the consumption support activities will have to be promoted much more strongly. Specifically, the Company needs to focus on the following aspects:
3.4.1. Advertising
Today's activities are very bustling, while the Company is very quiet. The Company needs to consider and solve the following problems:
* Advertising content: Essentially, it is the message that the Company sends to consumers. In a limited time and cost, the message now includes words, images, sounds that must be short, concise, easy to understand, both artistic and clear and simple, and must contain a high amount of information. That is information about the Company's tradition, scale, and reputation. Products that ensure quality and price, along with accompanying services that meet the needs of customers. Must make an impression, attract, and convince customers, especially customers.
Traditional, creating attention to suggest needs with new customers. With long-standing products, the Company's advertising content should focus on strengthening the image in customers of traditional products with the prestigious "Sao Vang" brand, making them familiar with using Sao Vang tires. Advertising new or upcoming products should be focused on.
Advertising media:
Currently, the Company has only advertised in some newspapers such as Lao Dong, Dai Doan Ket, a few billboards, some Catalogues but in general it is very little and not effective. The Company needs to promote advertising through the press more: it must advertise in newspapers and magazines that attract the attention of many readers such as Dau Tu newspaper, Thoi Bao Kinh Te, Tien Phong newspaper. It needs to be on one page or half a page of advertising, not on a small area on the newspaper as it is now.
Radio advertising should also be emphasized because of its low cost, wide usage and impact on all geographical areas. The time and frequency of repetition should be noon or evening when people are at home. Advertising
Television advertising does not need to be done massively at first, but periodically or on special occasions focusing on traditional products.
There is another advertising medium that the Company should focus on right away, which is posters and billboards. This is
Cheap and easy to use advertising media that the company can completely decide on the size, image color, time and advertising theme. The company needs to place posters and billboards near stores, densely populated areas and main roads.
In addition, advertising on product packaging and labels needs to be taken very seriously, it makes consumers immediately pay attention to the product.
Advertising policy:
Accordingly, the Company should clearly define the advertising objective: to increase consumption in traditional markets or new markets: or to strengthen the reputation of the product and the Company in the markets. Next, it is necessary to determine the method of advertising: continuous advertising, periodic advertising, sudden advertising or opening an advertising campaign. For the current Company, it is necessary to combine: continuous advertising on billboards, posters, 1 issue of newspaper, periodic advertising on television and radio, an advertisement on films, and opening advertising campaigns in the South where the Company is competing strongly with the facilities there. The advertising campaign requires costs and must be carefully prepared. It is necessary to clearly define the budget for advertising: It can be based on the sales ratio, cost/1 product batch, according to the advertising costs of competitors (when advertising in the Southern market) or analyze and research tasks to estimate costs. It can be calculated quite simply: The cost of a bicycle tire is usually around 12,000 VND (average price in 2001), the selling price is 15,000 VND, so the difference is 3000 VND. This amount is used for transportation costs, direct sales, profit (500 VND/1 tire) and for advertising. For example, it is 25 VND but the consumption output is
9,967,515 units (2001) so there will be: 25x5,000,000 = 125,000,000 VND for advertising in the year (calculated for bicycle tires), which means an average of more than 300,000 VND per day. According to experience, it will be possible to close
contribute 5 - 10% of revenue, meaning contribute 5% x 9,967,010 x 16,000 = 7,793,608,000 VND or
10%x9,967,010x16,000 = 15,947,216,000 VND. Interest rate
Revenue will be from (7.7 billion/16,000)x500 = 249,175,250 VND or (15.9 billion/16,000)x500 = 498,350,500 VND. Then, it is also necessary to clearly define the implementation steps: goals, recipients, advertising content, advertising channels, implementation time, advertising program creation and advertising inspection and evaluation.
Table 17: An advertising program
Content | |||||||
Product | Target | Recipient | Advertising content | Advertising media | Time | Method | Cost |
ABC D | |||||||
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3.4.2. Sales promotion and support
Nowadays, there are many similar product brands, sales promotions increase, consumers have more choices and their brand loyalty decreases, so more and more promotional activities and sales support are needed to attract customers for companies that have not paid due attention to this activity. In the coming time, it is necessary to:
- Organize more stores to sell and introduce products in densely populated areas and traffic hubs to increase the accessibility of the Company's products to customers.
- Actively participate more in domestic and foreign fairs and exhibitions of consumer goods and industrial goods. At the same time, not only participate in fairs held in Hanoi and Ho Chi Minh City but also in other places, notably the fair in Can Tho city held in recent years with good quality and
Other places like Da Nang, Nha Trang... These are opportunities for the Company to learn about customers and partners, enhance communication and make sales.
- It is also necessary to prepare and participate in domestic and foreign business associations, especially in the rubber industry, to help each other, learn from experience, and limit risks.
- For customer conferences: need to be organized more frequently (about once every 6 months or once a year), must invite big customers, important partners, prepare good content to grasp the "confessions" of customers.
- It is necessary to participate in specialized seminars (such as on the ability to penetrate the market in terms of price, advertising...) with the participation of businessmen, scientists, partners and major customers to gain experience and increase public attraction. It is necessary to pay attention to fully exploiting the media to promote the results of conferences and seminars.
- Giving gifts and bonuses: This is not a regular measure, but the Company should use it on certain occasions, especially with large customers and partners, there should be gifts and bonuses.
- It is also possible to organize competitions and give out lottery tickets on a certain occasion. Lottery tickets at the point of sale are increasingly effective. Each round can be divided into several tens of millions.
- Not only promote to consumers but also promote to wholesalers and retailers through
price discounts, advertising subsidies, sales rewards...
3.4.3. After-sales service
It is necessary to further strengthen warranty activities, repair and installation, exchange of defective goods, instructions, and answering questions. Branches and agents can do all of these things, even with larger shipments, especially branches and agents in the South. In some southern provinces, if customers buy a lot, they need to be transported to the destination.
Due to the seasonal nature, sales support activities need to be more diverse from the beginning of the third quarter to the fourth quarter.
3.5. Apply flexible pricing policy
With the current low income situation in Vietnam, price is a very important competitive factor. With a wide distribution network, satisfying the needs of all customers like Sao Vang rubber, and facing fierce competition, developing a flexible pricing policy is reasonable. The following issues can be considered:
- It is necessary to research and apply different prices in different market segments, for example: in the South, prices can be set lower than in the North to increase competition, however, the prices should not differ too much.
- Need more price incentives for traditional customers, customers who buy a lot at once. Can support shipping upon request.
Discounts can be offered to certain classes of consumers at certain times. For example, discounts on tires for people who buy motorbikes on installments.
There should be more frequent temporary sales and promotions on certain occasions or to clear out inventory (buy 1 get 1 free or buy 3 get the 4th free).
- In a highly competitive market like the South, which the Company is actively penetrating, there needs to be a reasonable price, considering the price related to quality. Flexible discount forms need to be applied: for example, a motorcycle tire sold in the South is cheaper than the competitor.
3000 VND, now only 1000 VND lower, or the same but if you buy 2 bikes, you will get a free bicycle inner tube worth 6000 VND. The two forms have similar discount levels but can attract more customers. In a rural market that is not yet exploited, the Company can maintain a lower price, especially in densely populated rural areas with relatively good traffic conditions (Thai Binh...). Facilities and individuals buying the Company's products to sell in remote areas need many price incentives. In the North, the price is currently quite reasonable, there should be price reductions on different occasions.
- Although the prices are different, trying to maintain price stability is also a good thing to do. This stability creates peace of mind for customers and also creates a characteristic of the Company (for example: Pepsi or Coca have a unified price nationwide). In the North, it is necessary to maintain a stable price (for example: 6000/bicycle tube), of course there is flexibility if there is a competitor's penetration. In price flexibility, it is necessary to limit changes in the base price (price to ensure profit) but should apply price discounts, temporary discounts, discounts according to purchase quantity... because changes in the base price, especially discounts, will be difficult to maintain when conditions change. In the South and rural areas, such discount methods should be applied.
3.6 Product and market orientation
There needs to be clear directions and policies on products and markets. Specifically:
3. 6.1.Product
It is necessary to clearly identify which products to maintain and develop; which products to reduce in scale; which new products to develop; and follow the market to focus resources on production and business. In the coming time, the Company needs to:
* Maintain and develop traditional products
These are the Company's key products, the consumption market is still very large. These are bicycle, motorbike and car tires and tubes that need to continue to be consolidated and increased in the production of bicycle tires, improving the quality, variety and quantity of motorbike and car tires and tubes. In particular, bicycle tires and tubes continue to be an important product due to high domestic demand, foreign companies pay little attention (except China). Products such as machine spare parts, technical rubber... and aircraft tires and tubes still need to be maintained and developed, and each type can be increased or decreased depending on the situation.
* Reduce the size of some products.
Some products may need to be reduced in the near future, such as motorcycle tires and tubes produced in Eastern European countries (Minsk, Babeta, Jawa...). Some less produced by-products may need to be reduced to gradually switch to producing other products.
* New product development.
This is an important activity with the position of the Company.
company
- Aircraft tires: need to continue research on production
manufactured for both military and civilian aircraft.
- Heavy duty automobile tires: this type is not yet produced in Vietnam. Meanwhile, the demand is increasing, especially in industrial and mining areas. With the level and experience, the Company needs to promote the research and production of this product.
- Some new products to consider: such as toys
toys, rubber ornaments, rubber bags.
3.6.2. Matching products to markets
Have a good product that meets a need but put it in the most likely markets.
- Develop traditional products in existing markets. Bicycle, motorbike and car tire and tube products continue to consolidate in the familiar northern market. It is necessary to pay more attention to consumption in the northern agricultural provinces and the northern mountainous areas. In the south, continue to exploit the demand for bicycle tires and tubes, while Da Nang and Southern rubber tend to focus on inner tubes.
Motorcycle and car tires and actively expand the consumption of motorcycle and car tires.
- Traditional products in new markets. The Company's new markets are currently only some provinces where the Company has no sales points and foreign markets. The Company needs to make efforts to conquer these markets.
- Develop new products in existing and new markets (aircraft tires, heavy vehicles).
3.7. Strengthen and develop reputation in the market
In the market mechanism, reputation is of great importance to enterprises. Having reputation means having a good image in the hearts of customers. Sao Vang Rubber Company has gradually built up its reputation with all customers. To contribute to promoting consumption activities, the Company needs to continue to consolidate and develop that reputation. It is necessary to build reputation in the following main aspects.
- Reputation and product quality: Constantly improve and bring good products to the market. Poor quality tire products often cause trouble for consumers, making them very upset.
- Reputation in business style: It is strict adherence to time, responsibility to partners, dedication to customers, and doing business properly before the law.
- Reputation in production and business results: Indicators reflecting production and business results, if business is poor, it is obvious that there is no reputation. It is necessary to implement many synchronous measures to have good results in production and business. The main indicators of the Company have recently been very good. These are valuable numbers to build reputation in new markets or markets with low consumption such as the South.