There are numerous definitions of marketing, but we can follow the concept given by the Chartered Institute of Marketing (CIM, 1976): “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. Marketing activities play very important role in promoting profits and developing sustainably of all businesses, so the marketing management is also significant to them. Obviously, the marketing activities are conducted within the framework of a philosophy carefully considered on the effective, efficient and responsible marketing. There are five concepts that are in the marketing orientations are often used by the organizations in their marketing activities. They are: Production concept, Product Concept, Selling Concept, Marketing Concept, and Societal Marketing Concept (Kotler, 1997).
Firstly, Production concept: This is one of the oldest viewpoints of the sellers. Production concept asserts that consumers would prefer products that are widely sold and have lower prices. The leaders of the organization under this concept will focus on improving production efficiency and expanding the scope of distribution. This concept seems to have no longer appropriate in the current majority areas.
Secondly, Product Concept: This concept confirms that consumers will prefer products having the highest quality, many benefits or new features. The leaders of the organization under this concept often concentrate their much efforts on creating the premium products and constantly improving them. Besides, the companies in view of the product concept do not or little take into account the opinions of the customers when designing their products. Therefore, the product concept leads to “Marketing Myopia”, which only focuses on the products without considering the needs of the customers. In other words, this concept also does not fit with the current business situations.
Thirdly, Selling Concept: This is a common view used by many other companies in the market. The selling concept insists that if the companies do not make anything, the consumers often do not buy their products with relatively large numbers. Therefore, the organizations need to spend more effort on consuming and promoting. This concept states that the consumers often show their inertia or hesitation attitude in the purchase and then, they should be gently persuaded to make their purchase, so the company should have adequate tools and promotion sales to stimulate more purchases. Thus, the selling concept is particularly appropriate to apply those goods having passive needs or the goods that buyers often do not think about buying them like insurance, encyclopaedic dictionary,… These industries often apply different sales methods to detect potential customers and begin pleading for sales by convincing them of the benefits of the products. At this time, the selling concept is applied quite popular in many fields.
Fourthly, Marketing Concept: This a business philosophy challenging previous views. The central principles of this concept was formed in the mid-1950s. The marketing concept asserts that the key to achieve the goals of the organizations is to identify the needs and wants of target markets and ensure the desired level of satisfaction with the more effective methods compared to competitors. While the selling concept focuses on the needs of the sellers; the marketing concept emphasizes on the needs of the buyers. In addition, this concept is based on four perspectives, including target market, customer needs, marketing mix, and profitability. In other words, it comes from the market defined clearly, focuses on customer needs, coordinates all the activities having an impact on customers, and generate revenue through the creation satisfaction for customers.
Finally, Societal Marketing Concept: This concept confirms that the enterprises must not only satisfy the needs and demands of customers, but also retain and strengthen the prosperity for consumers and the society. The societal marketing concept requires a product must meet all 3 elements: benefits of the Company, customer benefits and social benefits. This concept is emerged from the argument: if in business, the enterprises only pay attention to their own interests and that of their customers, they can do harm to the interests of others and community benefits as environmental destruction and pollution, depletion of natural resources, not paying attention to social services,… Therefore, the most modern marketing orientation requires the companies to pay attention to the interests of the community. It also presents the attention to the interests of businesses and their customers.
In the case of Coca-cola Vietnam, the company has apply both the marketing concept and societal marketing concept in its marketing orientation (Lantos, 2015). In particularly, under the marketing concept, Coca-cola Vietnam focuses on the needs of customers and then, it finds out what they want and need in order to produce suitable beverages. To best meet the needs of customers, Coca-cola Vietnam regularly conducts market research carefully and extensively through activities as taste tests, surveys,… before manufacturing according to their wishes. Thus, the company can also serve a variety of target clients with numerous products in Vietnam market, such as Coca-Cola, Sprite, Fanta, Diet Coke, Schweppes, Joy, Samurai,… so its revenues are always stable and tends to rise in the world market (Specially, in 2014, the revenue of the company was 2,529 billion dong in Vietnam). However, this is costly for the company when it must spend billions of Vietnam dong on market research to learn exactly the needs of customers. In addition, being a large company in the world, Coca-cola Vietnam also drives its markets according to the societal marketing concept. The community activities of Coca-cola Vietnam focus on several key areas, including education, healthcare, helping the poor and environment. Coca-cola Vietnam has implemented programs as: “Restoring the habitat of Tram Chim National Park,” “Clean coasts”, organizing a workshop “Skills business for small businessmen” and a series of conference” Success Skills” for students, and caring for the poor in Tet by giving gifts for them in the program “Tet with Coca-Cola”. Especially, Coca-Cola Vietnam has begun to clean water projects for communities since 2006. Expanded in 2010, the program has provided clean water and sanitation to communities and schools in Thu Duc district (Ho Chi Minh), Lien Chieu district (Da Nang) and Thuong Tin district (Hanoi). This project has brought direct benefits to more than 10,500 students and teachers and 1,000 poor families. It has also focused on constructing wells and toilets as well as providing educational programs for students and the community about the importance of using clean water and sanitation. This project was invested 100,000 USD or about 25 % total CSR budget in Vietnam by Coca-cola. These activities helps the company boost the reputation and position of the company in the global market, improve its image in the eyes of customers, and create more loyal customers. However, to make this non-profit projects, Coca-cola Vietnam has to spend billions of Vietnam dong each year, but the company actually has had more benefits than losses.
Segmentation is the process of defining and dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes. Its objective is to best meet the customers in various context. Segmentation criteria are to put the customers with common characteristics, behavior,… into a group in order to meet their needs. There are many segmentation criteria, such as: Geographic, Demographic, Age and life-cycle stage, Gender, Income, Psychographic, and Behavioral segmentation. Besides, the enterprises can also apply other criteria like Purchasing approaches, Situational factors, and Personal characteristics (Sun, 2009).
In fact, the brand does not segment the market of the organizations. Indeed, the process of market segmentation requires a suitable brand for each segment to shape a certain personal values of consumers. For Coca-cola Vietnam company, some segmentation criteria seem to be appropriate to market segments in Vietnam beverage industry:
Geographic segmentation: Coca-cola Vietnam should try to distribute the dense networks from the urban to the rural, from the plains to the mountains, from the South to the North. However, the company still has to pay attention in the crowded places.
Demographic segmentation: Due to specific characteristics of Vietnam with a high diversity, Coca-cola Vietnam should focuses on the youth who has youthful style are healthy and active because they tend to use this products most.
Positioning strategy is the creation of a unique and valuable position for the product or the company by implementing a system of different activities with what competitors do (Sahaf, 2008). Among them, product position is the way the product is defined by consumers on important attributes — the place the product occupies in consumers’ minds relative to competing products. Product positioning strategy allows the company to perform its marketing strategic planning in order to compete with its rivals.
With Coca-cola, one of top brands in the world soft drink market, the positioning strategy is very important in order to attract more loyal customers and compete with its rivals. Below is a new positioning strategy including three steps for products of Coca-cola Vietnam:
The first, the company has to discover the different points of its products and image to distinguish it from competitors. In this case, Coca-cola Vietnam has various products adapting the local market and unified image towards the joy and happiness across the globe. These are distinctive features that the company can rely on to position its products.
The second, the company applies some certain criteria to select the most important difference(s). Accordingly, two above features are the most important differences of Coca-cola Vietnam.
The third, the company creates the effective signals which help the target market differentiate with competitors. Providing the diverse products, Coca-cola Vietnam can meet the needs of many target audiences. In addition, the image of these products are widely perceived by customers through the color, brand, style, sound,… thereby, boosting consumer products and increasing their position in the market.
Product is “anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want” (Kotler, 1999, p. 429). Developing products means creating more product features that are competitive tools for differentiating a product from competitors’ products, thereby, sustaining the company’s competitive advantages. At the same time, developing products also presents that the companies’ products can make customers more satisfied through tools as quality, price, delivery systems, and promotion activities,… In other words, it also makes the products becomes better or creates the product differentiation to meet the needs of consumers, thereby increasing the competitive advantages of the organizations. Because customers tend to compare products of these enterprises with those of other companies in order to select the best products for themselve. Indeed, if the companies can produce the unique products that cann’t be made by their competitors, the loyalty and product differentiation can happen. With these unique products, the organizations can create their own competitive advantages to attract the customers. Meanwhile, the cost competitive advantage is not sustainable when having the advent of the new competitors or technology, so the companies need to offer more rather than only reying the price to keep loyal customers. Therefore, the product development is one of the important tools used to sustain the competitive advantage of the organizations.
Coca-cola Vietnam is capable of creating many new products matching with the needs of consumers. In this market, Coca-cola owns various products like Coca Cola, Fanta, Diet Coke, Schweppes Tonic, Soda Lime, Dasani, Joy,… Thanks to the development of diversified products, the company can serve a variety of target customers at many ages. Especially, the products of Coca-cola Vietnam are also inherited the secret receipt that has existed for hundreds of years helps these products have better tastes than other cola beverages. In addition, as mentioned above, Coca-cola Vietnam has an extensive distribution system, from urban to rural areas, even in the most remote alleys, to serve the needs of everyone in anywhere. Besides, the company also has advanced production techniques which helps the manufacturing costs only account for a small portion of the sales price, leading to help the company offer lower and stable prices fitting with all Vietnam consumers. From there, it can be seen that Coca-cola Vietnam has spent many efforts on developing its produtcs to sustain the company’s competitive advantages.
Distribution is the process of getting products from the producers to the final consumers through intermediate members in different ways and activities creating the distribution channels. Accordingly, the distribution channel is a group of organizations and individuals involved in the process of getting the product from manufacturers to consumers. Enterprises can define available types of intermediate on the market to create their own distribution channels. Specially, they can sell directly to the consumers, through retailers or through wholesalers (Russell, 2010).
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