Marketing Strategy Affects Product, Place Essay Example

Poland, Germany, the Middle East, and Southeast Asia are Binomial products that serve individuals across all age groups.

The company has a majority of its products in the market under the brand name "Binomial". This brand has been recognized as a "Famous Brand" and is among the top 100 powerful brands by the Ministry of Industry and Commerce since 2006. Additionally, it has been voted as one of the "Top 10 Vietnam high Quality Goods" from 1995 to 2007 (Binomial 2014). Villains firm offers a wide range of products such as yogurt, fresh milk, powder milk, condensed milk, and fruit juice. Task 1 involves identifying the macro and micro environmental factors that influence marketing decisions. The environment is extensive and complex, and discussing it would require a lengthy explanation.

The text discusses how the marketing environment affects the functioning of a business. Two main topics, micro and macro environmental factors, are crucial for business activities. Micro environmental factors, which are closest to the company's current status, include analyzing customer loyalty, suppliers and distribution, competitor actions, interest groups, and intermediaries.

The analysis of SOOT in Binomial corporation

Strengths

Binomial, established in 1976, has a long-standing history in operating and has built trust in the minds of customers, resulting in a large client base. As a result, the organization has become the leading business in the dairy industry in Vietnam. The bar chart below illustrates the total revenue of the Binomial firm over a five-year period. The firm's strong distribution enables it to reach customers ranging from coastal to mountainous areas and from urban to rural regions.

In addition, the enterprise has over 300 distributors

in Vietnam and utilizes various new technologies to enhance their products and meet the needs of potential customers.

Weaknesses

In Vietnam, there is an insufficient amount of crude milk for production, so Binomial imports 70-80% of raw materials (PBS 2014). Moreover, professional staff members are scarce in the country. Although they possess abundant knowledge, they lack practical and soft skills. As a result, this aspect affects the firm's management and its control over the market. Additionally, the cost of constructing qualified plants and workplaces tends to be expensive.

Managers should consider expanding the business due to this reason.

Opportunities

With modern life, customer demands have increased significantly. People consume milk not only for nutritional purposes, but also for personal reasons like skin whitening, weight loss, or height increase. As a result, Binomial consistently researches and enhances their products to meet these diverse needs. By introducing new products, the company can enter new markets and attract new customers. If consumers show interest in the new offerings, the company's initial success is guaranteed. This success will prompt them to focus on further refining their production processes and stay ahead of new competitors.

Threats

The milk market is nearing its maturity and will soon decline. This serves as a signal for converting the Binomials market or introducing new products to attract customers. When Vietnam became a member of WTFO, numerous international dairy companies entered the dairy market, thereby intensifying competition among firms. Currently, there are increasingly more alternatives to milk products. Environmental factors have a long-term impact on enterprises and can be influenced by four elements (PEST) such as Political or legal, demography or Economic,

Social or cultural, and Technology or physical.

The analysis of PEST

Government regulations, both political and legal, have a significant impact on business operations. This includes environmental laws and safety hygiene regulations, which particularly affect food enterprises. For instance, the government has approved a plan to develop the dairy industry. To support this project, the government will provide financial resources through various means such as capital investment, issuing shares, and issuing bonds. This support will continue until 2020 (VIII 2006).

Economic factors encompass various aspects of the human population, including age, gender, size, economy, and occupation. These factors are crucial for companies to segment the market and focus on their desired audience. For instance, the market targets young and affluent individuals while Binomial firm sees children as potential customers. Moreover, fluctuations in the economy significantly impact domestic customers' purchasing behavior. Social factors like family, friends, and relatives also influence operations through their attitudes, interests, and behaviors.

People with a high monthly income tend to prioritize indulging in luxurious food items, like milk products, as they strive for improved health and appearance. This desire for better nutrition is important because the low consumption of milk among Vietnamese individuals contributes to the prevalence of malnourished children. Additionally, technology aids companies in enhancing their products through modern advancements in the macro environment. For example, Binomial is currently developing "Binomial Discern - a dairy product customized for individuals with high blood glucose levels".

The separation of five roses affects suppliers' bargaining power. The quantity of suppliers impacts the ability to negotiate with companies. Having only a limited number of suppliers results in strong competition and has a

significant effect on business. Additionally, knowledge about distributors is crucial for selecting the appropriate ones for enterprises. The bargaining power of buyers is divided into two categories: wholesalers and retailers, both essential for business success. Hence, firms must closely monitor customer information, such as switching costs and customer base size.

In order to sell fresh milk and other milk products, Binomial needs to consider the competitive quality and pricing in the milk market where companies like Dutch Lady, Abbot, or Nestle operate. The company is currently not impacted by new entrants as there are entry barriers such as capital, technology, and resources that make it difficult for new competitors to join the market. Substitutes refer to products that serve similar purposes as the original ones and can meet customer demands with lower prices and high quality.

In conclusion, analyzing the micro and macro environmental factors allows the company to control its workflow. Additionally, this analysis helps the organization identify its strengths, weaknesses, and other aspects in the SWOT analysis. By discussing the company's broad vision, they can understand how competitors impact Binomial and find ways to leverage their advantages and overcome disadvantages in order to thrive in a competitive market. Furthermore, proposing segmentation criteria based on demographics, geographical area, psychology, and socio-economy can be employed for different markets.

Market segmentation, according to demographics, categorizes customers based on factors such as age, gender, life stage, and social class. Binomial Corporation offers a range of products designed to meet the needs of different customer markets in line with these objectives. For children aged from 0 to 6 years old, Binomial provides essential nutrients with products like Dialect

Podia, Dialect Optimum, and Dialect Alpha. For pregnant women, there is Dialect Mama, a dairy product. Additionally, Sure Prevent powered milk caters to the needs of elderly individuals. Psychology focuses on lifestyle and personal attributes. Some individuals seek ways to increase their height or lose weight.

Binomial is introducing new products to cater to different demands, such as Flex milk for height increase and a weight loss milk. Social-economic factors like income, occupation, and education level significantly impact people's lives. As living conditions improve, individuals desire products that promote mental well-being and enhance beauty. However, those with low salaries often do not prioritize milk products, leading Binomial to target high-income individuals. Unfortunately, malnourishment and irregular milk consumption are still prevalent among many children today.

In conclusion, the use of segment criteria helps the company in dividing different markets. This allows Binomial to understand which products it should produce in order to satisfy customer demand, and helps in setting long-term marketing strategies. Furthermore, certain elements affect Binomial's targeting strategy for a selected product or service.

Competitors

The Vietnamese diary market is experiencing intense competition with both domestic and international dairy companies. There are 30 milk enterprises with 80 product lines in the domestic market, primarily consisting of imported goods (Newurinal 2014).

Binomial Corporation possesses a substantial portfolio of stocks, with specific product lines such as yogurt and condensed milk dominating the market. However, limited availability persists for other products like fresh milk and powdered milk. It is imperative for the company to establish a long-term plan that ensures consistent growth and progress. The accompanying pie chart provides an overview of the distribution percentages pertaining to

powdered milk in Vietnam. Figure 2: Distribution Percentages of Powdered Milk in Vietnam Source: DNA (2014). Binomial aims to secure a 50% share in the overall milk market, while fresh milk accounts for 60% within the fresh milk market.

Binomial, the company, has recently inaugurated a new dairy factory in Bin Dung province with an impressive production capacity of 400 million liters of milk. As stated in a 2012 study, the annual consumption of powdered milk is approximately 65,000 tons, with domestic sources contributing to 30% and imports accounting for the remaining 70%. On an individual level, each person consumes about 1.4 billion liters of fresh milk per year.

Experts project a significant increase in milk demand for the upcoming year, expecting growth to reach up to 20% (Nocturnal 2014). To effectively cater to this growing demand, Binomial has taken extensive actions by rapidly expanding its production capabilities. This includes constructing additional dairy farms, factories and storage facilities.

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The size of the segment that Binomial occupies is 50% of fresh milk and 25-30% of power milk. According to Stockiness's 2014, the company plans to account for 50-60% of fresh milk in the next few years by establishing two new fresh and power milk factories in Bin Dung province._x000D_
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In conclusion, a good target strategy helps the company save time in targeting the market and reach the right segment market. Baker et al. (1998) demonstrated how buyer behavior affects marketing activities in different buying situations. They suggested that customer selections are influenced by factors such as marketing mix, coloratura, situation, and psychological influences, rather than compulsions or necessities. These elements provide useful ways to efficiently approach and

satisfy customers._x000D_
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The paper also highlights some factors that are relevant to Binomial Corporation. One of these factors is coloratura, which influences culture and plays a fundamental role in determining customer expectations and behavior._x000D_

In every country, it is common for individuals to acquire knowledge, soft skills, hobbies, and attitudes through their family and community. In Vietnam, there is no requirement for children to consume milk, which puts Binomial firm at a disadvantage. The society in Vietnam can be divided into three categories – upper class, middle class, and lower class – which are consistent parts of the community. These groups have shared interests, occupations, positions, and income levels. Milk products are considered luxury items for the middle-class population and are not accessible to those in the lower class. The working class prioritizes basic needs such as food and warmth for survival.

Binomials primarily target the middle and upper class, but there is an opportunity for the company to expand its range of products to cater to the lower class. This particular demographic plays a significant role in society, and marketers pay close attention to how families impact consumer behavior. The husband, wife, and children all have an influence on purchasing decisions, with individual choices being influenced by factors like age, life stage, occupation, lifestyle, personality, and interests. Binomial specifically emphasizes the importance of age and life stage as nutritional needs tend to increase with age beyond what one's diet can provide.

Therefore, Binomial offers a specialized product called Sure Prevent to meet the specific needs of its customers. Additionally, psychological factors (known as Mascots) also play a role in influencing consumer behavior. By understanding these

factors, Binomial can better understand customer demands and tailor their product offerings accordingly. In today's modern society, with improved living conditions and an increased focus on longevity, there is a significant growth in the development of health and care products. This trend is also reflected in the increased turnover of dairy goods.

The Binomial firm and the dairy market are pleased with this positive indicator. The interaction of social, cultural, and personal factors with customer behavior should be considered when analyzing a selected organization to mitigate performance risks. The Binomial Corporation, which was the pioneering milk producer and supplier in Vietnam, has been successfully establishing its position both domestically and internationally.

The company has direct management over its trusted resources suppliers in the country. It operates through three subsidiaries located in different regions of Vietnam, with the headquarter based in Ho Chi Mini city. Additionally, it has multiple retailers nationwide. With Vietnam joining WTFO, numerous milk companies have entered the national market, making it crucial for the company to establish a strong market position to survive in a competitive environment. In order to develop their position, companies must conduct market research to identify their strengths and weaknesses.

The positioning map shows available and non- available products that meet customer's demand, including those satisfied by competitors. For Binomial, all their products are high quality with competitive prices. In my view, the organization should focus on targeting the upper class who value both high quality and price and are willing to pay more for products, specifically fresh milk. Task 6: Describe the development of products to maintain a competitive advantage. Binomial Corporation is a prominent dairy

company in Vietnam.

Binomial, a well-known local dairy brand, has a rich history of meeting the increasing milk demand among consumers. Their popular products consist of fresh milk and powdered milk. As stated by Nocturnal (2014), fresh milk captures 50% of the market share, while powdered milk makes up 25 to 30%. Fresh milk is available in various flavors such as vanilla, strawberry, and chocolate. The brand employs OUT (Ultra High Temperature) technology which involves subjecting the milk to temperatures as high as 140 degrees Celsius for a duration of 4 to 6 seconds. This process effectively eliminates harmful bacteria and contaminants by rapidly freezing the milk.

In addition, fresh milk retains its nutritional value and natural flavor (Binomial 2014). The packaging for fresh milk is straightforward, featuring a white color and an adorable dairy cow, designed to make people remember it. The packaging showcases green grass and healthy cows, assuring customers that these milk bottles are completely free of preservatives. Given Vietnam's tropical climate, the company is able to find milk resources within the country, making the production cost significantly lower and ensuring that the price of fresh milk remains affordable.

The popular product, Binomial, is a brand of 100% fresh milk. Although powder milk has a relatively small market share, there are still some powder milk products that stand out. Examples of such products include Dialect Podia, Ideally MaMa, and Sure Proven, which cater to specific market segments. Powder milk offers essential nutrition to customers with specific needs. Children consume powder milk to support their growth and development. To cater to this segment, Binomial offers five product lines: Dialect Alpha, Dialect Alpha Gold,

Dialect Optimum, Dialect Podia, and Dialect Star Care.

The elderly population depends on powder drinks for essential nutrition, such as Sure Prevent. Dialect MaMa caters to pregnant women who require increased nutrition for their growing babies. Despite having a vast amount of raw materials, Binomial only holds a small market share in fresh and powdered milk. In 2014, the organization built a new factory in Bin Dung with advanced technology and sufficient production capacity.

The following text discusses the distribution of powder and fresh milk by Binomial, which is projected to represent 50% and 60% respectively. The distribution channel plays a crucial role in ensuring customer convenience as it allows for direct or indirect delivery of products or services. This enables the company to receive valuable feedback on product quality, address customer concerns, enhance their offerings, and establish an effective pricing strategy. Two types of distribution channels exist: direct delivery and indirect delivery.

The process of distribution typically involves two parties: the producer and the customer. However, in certain cases, there may be additional participants such as intermediaries, wholesalers/retailers, and customers. Multiple factors play a crucial role in facilitating the transfer of products, including intermediaries, wholesalers, and retailers. As a result, the company incurs significant expenses in marketing and distribution that lead to higher prices. Binomial refers to this aspect as the value distribution channel which helps streamline product delivery and pricing before selling to customers. The nationwide distribution network plays a vital role in contributing to Binomial's success by optimizing their strengths.

The text explains how prices are determined to align with an organization's objectives and market conditions. These objectives may include sales, market

shares, unit volume, and social responsibilities. Binomial Corporation specifically emphasizes social responsibilities by sponsoring scholarships and assisting those in need of housing. This enhances the company's reputation within the local community. The process of setting prices to reflect the company's objectives involves six steps, with additional mention of key factors. Notably, skimming the market is identified as the most important element in devising a price strategy.

The text emphasizes the significance of understanding the product stage in the product life cycle. Initially, businesses invest a substantial amount of money in market research, studying competitors, and establishing the company's brand image through selling goods at low prices. Although this strategy may lead to a small decrease in sales volume, it has the potential to attract non-buyers to the products and indicate initial success for the company. Figure 7, presented below, illustrates a line graph comparing powder milk prices from Abbott and Binomial. This data provides insights into how companies determine appropriate prices for their products by considering factors such as demand, production costs, profit, and competition.

In response to customer demand, producers of milk have a trend of increasing prices when customers buy too much and decreasing prices when customers buy less. Binomial is also concerned about competitors like Abbott, Nestle, and HTH True milk. Additionally, the company takes into account price elasticity in the market which has many rivals and substitutes. Price changes are significant, making price elasticity lower. Setting prices efficiently is a challenging task. When determining prices, the company must consider both the profits they will earn and the cost of production. This includes integrating promotional activities to achieve marketing goals and adapt

to market conditions at Binomial.

The Corporation aims to meet the increasing demands of customers and attract potential clients through media advertising (television, website, etc.). They also work on improving product quality to gain customer trust. This paper introduces two product groups from Binomial enterprise: fresh milk and powder milk. Among the fresh milk products, sterilized milk for individuals over 15 years old is the most popular, providing complete nutrition. They have now introduced a new product called '100% fresh milk' to compete in the fresh milk market, which has high potential. This product is compared to '100% chosen milk of Dutch Lady'.

According to powder milk, the company offers various product lines for specific customers including children under 1 year, pregnant women, and elderly individuals. Examples of these products include Dialect Alpha Gold step 1 for babies aged 0 to 6 months, step 2 for kids aged 6 to 12 months, Dialect MaMa for pregnant women, and Sure Prevent for individuals over 45 years old (Binomial 2014). When it comes to promotion, Binomial always focuses on creative advertising that helps customers understand the freshness, purity, and naturalness of their milk. They depict adorable and healthy dairy cows dancing and singing a song about the product being '100% pure fresh milk'.

Binomial aims to regain the trust of customers following reports by journalists about high powder content in fresh milk. The year 2008 represents a significant milestone in public relations, with Binomial's expenditure of 17 billion VEND towards charitable causes, including the construction of a bridge for students in Quant Name province and financial support for the operation of cleft lip and cleft palate for

children with deformities. Additionally, the company allocated 3.1 billion VEND towards the 'Binomial Incubation of Young Talent' scholarship. In their efforts to promote fresh milk, Binomial successfully sponsored 6 million units of fresh milk for underprivileged children.

Furthermore, the company has also organized children's football matches (Marketing Dairy 2014). These promotional activities not only alleviate suffering, but also provide support during difficult times. Binomial brings positive happiness and useful knowledge to the community. However, in recent years, Binomial's promotion has not been positive. It would be beneficial if the company focused more on this aspect. Task 10: Analyze the additional elements of the extended marketing mix. Baker (2002) emphasizes the significance of people, process, and physical evidence as additional elements in the traditional marketing mix.

People

The text discusses the two types of employees in a company: internal staff and external staff. Internal staff are responsible for controlling, managing, and making crucial decisions for the operation of the enterprise, such as Scoffs, Cosmos, BODY, etc. On the other hand, external staff directly interact with customers. For example, Binomial sends good-looking and professional PR representatives to wholesalers or retailers to introduce the function of each current and new product. The distribution channel is a key focus for this element, ensuring efficient delivery of goods to customers. Binomial also offers promotions for distributors who order a large quantity of ilk products.

If the buyer orders one hundred cartons of milk, they will receive a 10% discount. Additionally, perennial wholesalers or retailers can receive luxury rewards such as oversea journeys to encourage a long-term relationship with Binomial. The physical evidence factor of the company reflects where the

service is being delivered from, distinguishing it from competitors. To ensure the quality of perishable milk products, modern means of transport are used before sending them to the customer. While the extended marketing mix of Binomial is good, it could benefit from investment in post-service.