Several solutions to expand market share of Yamaha motor Vietnam

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MINISTRY OF EDUCATION AND TRAINING
HO CHI MINH CITY OPEN UNIVERSITY
L UNIVERSITE LIBRE DE BRUXELLES
SOLVEY BUSINESS SCHOOL

MBMM PROGRAM

NGUYEN NGOẽC LAN

SEVERAL SOLUTIONS TO
EXPAND MARKET SHARE OF
YAMAHA MOTOR VIETNAM

FINAL PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT

Advisor
Professor NGUYEN THề LIEN DIEP

Ho Chi Minh City
2007

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I declare that the project entitled: “Several solutions to expand market share of

Yamaha motor Vietnam” is my own work.
The information and data analysis of the project are based on reliable sources. I hope
that this research would be evaluated seriously and approved. Moreover, I would like
to recommend this paper to Yamaha Motor Company Vietnam to utilize this
marketing strategy promptly in order to increase sales volumes, brand recognition,
brand loyalty, etc. and in overall to enlarge current market share.

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It has been a great pleasure to have Professor Nguyen Thi Lien Diep as my tutor who
has given me great support and encouragement. I have learned a tremendous

knowledge from her. I wonder if I could have had a better tutor.
I have the honor to express my deep thanks to Prof. Nguyen Anh Tuan, Prof.
Bayeen… in Ho Chi Minh City Open University and the Solvay Business School,
ULB, who gave me knowledge and invaluable advice during the MBMM course.
I am indebted to the kind support from Mr Dinh Quang Tuan – YMVN Marketing
Manager, Mr. Roger Yap - Branch Manager who gave his time and assistance to my
project. I also would like to thank many Yamaha Motor Vietnam Co., Ltd officers who
helped me collect information and support me during the time of project.
Thanks to my friends in MBMM course who are willing to share their knowledge and
experience during the course.
Finally, I would like to thank my parents, my dear husband and my new-born daughter
for their encouragement and care over the years.
Nguyen Ngoc Lan.

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CONTENTS

Acknowledgements
Executive summary
Introduction
1.1 Motivation
1.2 Limitation of the study
1.3 The topic, aims and objectives
1.3.1 The topic and scope

1.3.2 Aims
1.3.3 Objectives
1.4 Methodology
1.4.1 Method
1.4.2 Technique
1.4.3 Source of data
Chapter 1: Yamaha Motor Vietnam Company – External analysis
1.1 Introduction of Yamaha Motor Vietnam 1
1.2 External analysis 2
1.2.1 Demand measurement and forecasting 2
1.2.2 The environment context 3
Orientation 3
Development strategy 4
1.2.3 P.E.S.T analysis 4
Political 4
Socio-cultural factors 5
Economics 6
Technological 6
1.2.4 Competitor Analysis 6
1.2.5 Customer context 8
Decision roles involved 11
1.3 Opportunities and threats 12

1.3.1 Opportunities: 12
1.3.2 Threats 13
2.1 Mission, vision and goals 14
2.1.1 Mission 14
2.1.2 Vision 14
2.1.3 Goals 14

2.2 Marketing objectives 15
2.3 Current marketing strategy 16
2.3.1 Market segmentation 16
2.3.2 Target market 16
2.3.3 Positioning 16
2.3.4 Marketing mix 16
2.4 Marketing communications 17
2.4.1 Objectives 17
2.4.2 Marketing communications strategy 17
2.5.1 Marketing expertise 19
2.5 Promotional mix 20
2.5.1 Select the communications options 20
2.5.2 Control and evaluation 23
2.6 Internal analysis 24
3.1 `Conclusions 26
3.2 Solutions 31
3.2.2.1 Organizational structure 33
3.2.2.2 Marketing communication 33
3.2.2.3 Teamwork 34
3.2.2.4 Financial aspect 34
3.2.2.5 Stakeholders 34
Bibliography and references

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Yamaha Motor Vietnam Co., Ltd is a new comer in the motorbike market in Vietnam.
It has establised its presence in Vietnam since 2000. From now on it has gained the
amazing brand awareness as well the market shares by effective marketing strategy.
However, the fierce competition in building brand awareness, and capturing market
share bring the big challenge for Yamaha Motor Vietnam. It requires a clear
understanding about all its actions related to marketing as well as the concept of
integrated marketing communications.
In this setting, the authour would like to offer the readers a right perspective about
marketing and maketing communication which is employed by Yamaha Motor
Vietnam. The research is carried out taking into account following:
− Customer context plays an important role in the research. The target customers
perceive Yamaha product in the quadrant of high quality and high price but in
the perception mapping Yamaha image is lower than Honda. Besides, the
impact of business environment on marketing communications will be also
considered carefully.
− Competitors, the important stakeholder need to be taken into account. Honda is
the main competitor of Yamaha. It is now applying the mass communications to
compete and protect its market shares. Honda is holding 80% market shares of
the joint venture segment.

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− The external analysis helps Yamaha find out the opportunities and threats as
well. In the next coming years, Yamaha should try to make advantages in terms
of new policy of the government concerning about motorbikes, consumers

concerned about fuel saving. But Yamaha also needs to consider some threats
that may suffer the company such as fierce competition, regualtions of
government about the sales promotion and advertising.
− The marketing activities of Yamaha will be clearly considered because it helps
the author understanding about the current situation of Yamaha. From the
internal analysis such as mission, vision, goal, marketing communications
objective and strategy, organization identity as well as marketing expertise, the
author will find out the strengths and weaknesses that are benificial for giving
out the conclusions and recommendations later on. The research shows that
Yamaha Motor Vietnam has strengths in terms of marketing communications
plan fit with the overall strategy, defining target market quite well, marketing
communications strategy and empowerment and teamwork. Marketing
communications is to facilitate the differentiated brand awareness. In addition,
Yamaha Motor Vietnam has achieve the coordination of using promotional mix
such as caravan show, advertising and promotional campaign to enhance the
brand image.
− However, the company has not considered customer database playing an very
important role in building up effective marketing communications strategy. It
just uses customer database in setting up the mailing list. Besides, the control
and evaluation system seem not work well because most of the time, they
control and evaluate based on the experiences of marketers and such a small
market surveys.

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Finally, the author would like to offer the recommendations for Yamha Motor
Vietnam Co., Ltd to improve its marketing activities to expand the market share. It
could be very essential to enhance the teamwork activities, organization structure
as well the control and integration with external and internal stakeholders. The
company should establish cross-functional teams in which every department is

represented. In addition, teamwork is encouraged to support for YMVN functional
departments as well to avoid communications programs separate. Marketing
integration requires close coordination between departments. Otherwise, a study of
other external stakeholders such as agencies, suppliers is to control and integrate
them as a united Yamaha family.

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1. Motivation
Vietnamese motorbike market is a huge and on a global scale represented by 50 million
people are using motorbikes as the main transportation mean. Along with the development of
economy, the open market offers a great opportunity for all motorbike companies include
illegal imported motorbikes. Undoubtedly, they however also bring to big challenges for all
of us. In the forthcoming years, Vietnamese motorbike market will become the key market

for many motor companies. Clearly, the fierce competition will occur among these companies
to capture and retain market shares. The author believes that the important issue in an
organization is the subject of marketing. Marketing helps bring the firm’s messages to the
customers, the most vital determinant to the firm’s success and existence. As Philip Kotler
said: “Modern marketing calls for more than just developing a good product, pricing it
attractively and making it available to target customers. Companies must also communicate
with current and prospective customers, and what they communicate should not be left to
chance.”
The author is impressed by the way Yamaha launch its new products and interested in
Yamaha products. But the author always wonders why customer’s perception about
Yamaha product is not clear and confused, the maket share is still lower than Honda’s.
So the author tried to figure out the reason through some information gathered by
some of her friend working for Yamaha Motor Vietnam. During this period, the author

ix
had a chance to gain a certain level of understanding about the marketing activities
and marketing communications programs of the company. Therefore, she desires to
utilize her knowledge and study learned from the MBMM program to evaluate and
improve the company’s marketing strategy strategy to expand the market share of
Yamaha in Ho Chi Minh city by 2010.
In the introduction, the author would like to introduce the motivation of the research,
objectives, and discusses overview of the working method that the author uses to
discover the findings, and recommendations.
In chapter 1, the external analysis is carried out to get an outside look of the
environment where YMVN is doing business. From the external analysis, the author
would like to analyze the competitors, political, social factors, economics and legal
issues, customer as well as the market demand.
In chapter 2, the internal analysis helps readers take into account the number of issues
that impact on the integrated marketing communications of YMVN such as corporate

objectives, stakeholder, organization identity, as well as the strategy.
Solutions to expand market share is discussed in chapter 3, the author will evaluate
how YMVN has utilized marketing plan to keep and maintain relationships with its
customers and give some solutions to develop the market share of Yamaha Motor
Vietnam by the year of 2010.
2. Limitation of the study
The main objective of this study is to focus on YMVN potential target customers who
are provided with products and services. They are the main objects that YMVN puts
efforts to study for better delivering products, services and communications
performance. In this research, the existing and potential customers’ analysis is taken

x
from the available surveys– Customer behavior and market research - findings that
are provided by YMVN.
As Pickson and Broderick (2001) describe stakeholders as several groups who have
interest or involvement with an organization including suppliers, customers,
consumers, investors, employees and distributors. However, there are some important
stakeholders the author does not mention in the research although they may have
influence on the research such as internal stakeholders of YMVN, advertising
agencies, suppliers, holding company and other market research partners because the
author can not approach these stakeholders due to the confidential policy of the
company.
Elements of the promotional tools are assessed by qualitative methods only. The
qualitative measure is mainly based on the feedbacks from customer and user survey;
however, it is just the small and simple survey to check whether these promotional
programs were efficient and effective in the user’s mind.
3. The topic, aims and objectives
3.1. The topic and scope
− The topic: How can an Marketing strategy help promote Yamaha products in

the Vietnamese motorcycle market successfully and efficiently?
− Research area: Marketing
− Research field: Market analysis, marketing strategy, marketing communication.
− Subject: Several solutions to expand the market share of Yamaha Motor
Vietnam by the year of 2010.
3.2. Aims

xi
In the project, I would like to explore the following issues in order to find out the best
marketing plan for Yamaha Motor Vietnam Co., Ltd:
− To examine how YMVN develops its promotional tools in order to create
effective communications to potential customers.
− To study the marketing and marketing communications strategy of YMVN.
− To identify the implications of applying marketing strategy to potential target
customers of YMVN.
− To discuss several benefits that YMVN may gain from applying new solutions.
3.3.
Objectives
The objective of the research is going to establish the effective marketing and
marketing communications plan for Yamaha Motor Vietnam Corporation. In the
marketing and marketing communications plan, these following objectives will be
pursued:
− Have an Integrated Marketing Communications Plan for use based on the IMC
framework model that can be further developed and used in the future
research.
− Better understand all the elements of Integrated Marketing Communications
− To raise the level of awareness of Vietnamese target customers
− To reach the target customers by positioning the current and emerging markets
as a premium, valuable, stylish and sporty products.

4. Methodology
4.1 Method
The author would like to use the case study method in order to do the project. The
data in a case study are obtained largely through a review of written records, and by

xii
means of interview technique. Case study method will involve the author in at least
four stages of work as following:
− Determining the present situation
− Gathering information about the background to the present situation
− Gathering more specific data to test alternative hypotheses about the important
factors in the present situation
− Presenting recommendations for action
The research methodology will be based on the deductive approach in which the
understanding about the marketing strategy and integrated marketing communication
of the company will be accomplished by the investigation of the empirical business in
the marketplace to compare with the hypothesis.
4.2 Technique
The techniques presented in this project are all semi-structure. In other words, they
involve the author in asking questions whose content and sequence aren’t fully
specified in advance. The techniques are also open-ended. That is, they use a form of
questioning in which the respondents are encouraged to answer in their own words:
while the author might have some hunches about the kind of answer to expect, the
author would not prepared to specify them in advance.
As the constraint resources of market information, the study focuses on main issues
of marketing and integrated marketing communications plan. The main object of the
study is the target customer with the relevant approaches to serve that object. Mutual
contact with the organization was made to obtain and exchange with strategic
information and ideas about the marketing. Key persons – Mr. Roger Yap, The

General Manager of YMVN, Southern Branch, Mr. Nguyen Phuoc Bao Tri, The Chief
Wholesales of YMVN, Keitaro Horikoshi, The Marketing Manager of YMVN - were

xiii
interviewed directly by phone and email to get further detailed company’s information
and experiences. They could be involved with marketing, sales and administration of
the company, most accessible to the researcher were contacted to explain the purpose
of the study, its relevance, and its benefits, and the help needed from them, and to
seek their agreement to participate in the study. Moreover, so many company’s profile
and releases, which are publicly announced to other stakeholders, were used to
support for evaluating the application of new solutions.
Based on the collective and cumulative experience in the literature review on the
marketing communications, the IMC process model was developed which outlines the
route for the researcher to analyze the existing marketing communication strategies
that the company is implementing in the marketplace, especially in the advertising
and promotion programs.
On the other hand, I compare the information provided by the company with the
comments and remarks from secondary information to draw out the practical outcome
proposed for Yamaha Motor Vietnam Corporation.
4.3 Source of data
Data collection method is to use secondary data from journal, magazines, websites
and books and company’s data to identify problems that YMVN has currently been
facing. The primary data collection was based on observation that had been updated
with practical information and actual data collected and processed by the company in
order that I can analyze the process of developing and implementing various forms of
persuasive communications with customers conducted by YMVN. The purpose is to
determine and define the forms and methods followed by the company through which
they persuade their customers on an integrated way to buying facilitation, what effect
has been planned and what were the actual results. Additionally, in-deep interview

xiv
with the company’s staffs confirms and provides the solution of the problems that the
company is currently facing. The observation was also studied to find out which
aspects the company applies for its integrated marketing communications process,
what tools are used to reach its target customers and objectives.

Chapter 1

Yamaha Motor Vietnam Company
External analysis

1.1 Introduction of Yamaha Motor Vietnam
Yamaha Motor Vietnam Limited Company (YMVN) was established on April 1
st
,
2000 according to the investment license No. 2029/GP, is a joint-venture among
HONGLEONG Industries BERHARD Malaysia, Vietnam Forest Corporation &
CODO Mechanical Factory Vietnam .In which, Yamaha Motor Co., Ltd Japan holds
46 percent of stock, Vietnam Forest Corporation & CODO Mechanical
Factory Vietnam holds 30 percent and the rest is holding by HONGLEONG
Industries BERHARD Malaysia. The head office is located in Hanoi, Vietnam, and
one branch office in Ho Chi Minh City. Its capital register is USD 24,250,000. The
land area of YMVN is 100,000 meters square where its building area is 22,000 meters
square. At the moment, YMVN is employing 1057 people.
Yamaha Motor Vietnam produces motorcycles and supplementary spare parts to
provide to Vietnamese customers. It also supplies services to customers who use

Yamaha motorcycles. There are many categories of Yamaha motorbikes introduced
and sold in Vietnam market. But YMVN has just introduced two models so far. It is
Jupiter MX bikes; and another new model Exciter 135 was just launched in 2006.
YMVN commits a long-term investment strategy in Vietnam to take care of
Vietnamese customers by supplying with sufficient spare parts and services to
maintain and increase its values in customer’s awareness.

It could be very essential to understand the environment where YMVN is doing
business in order to have a perspective about the competition, regulations as well the
market demand. Besides, the marketing communications environment also relate to
the availability of media and marketing agencies as well.
1.2 External analysis
1.2.1 Demand measurement and forecasting
The Vietnamese motorbike market is huge and on a global scale represented by a big
volume in 2006. It is comprised of 3 segments: joint venture, imported, and Chinese
bikes. Join venture bikes (included Honda, YMVN, SYM, Suzuki, Hoa Lam Kymco)
are recently dominating motorbike market which accounted for more than 60% market
share. The rest is local produced and imported bikes accounted for less than 40%.
Figure 1: Market’s sales volume forecast
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000

10000000
Motorbikes
2806272 3367526 4041031 4849037 5867578 7041094 8097258 9311846
2003 2004 2005 2006 2007 2008 2009 2010

Source: Yamaha Motor Vietnam Ltd., Co, 2006
In 2001, the total number of motorbikes sold out in the market is 1,948,800 units in
which Chinese bikes capture around 1,000,000 bikes. Although Chinese bikes just

entered in Vietnam at the end of 1999, its sales volume increased quickly. As shown,
the number of motorbikes sold each year from 2005 to 2010 increased almost 20%
each year. However, from 2005 onward sales volume stretch out and change in
structure which is from Chinese bikes to Join venture bikes that have reputation,
quality, competitive price and great after sale service. Therefore, bike’s manufacturer
is now focusing on product feature development, unit cost, and more importantly is
customer relationship management.
1.2.2 The environment context
According to Ministry of Industry, Government’s orientation and strategy to develop
the motorbike’s industry to 2015 as follows
1
:
Orientation
To build and develop the Vietnam motorbike’s industry becoming one of
manufacturing and exporting sector in motorbike and spare part in the region. The
orientation detail in the period from 2006 to 2010:

− To supply 90% of domestic demand, in which consisting of 100% general
demand.
− Domestic manufactures reach to over 90% of raw material, spare part and 95%

of engine parts.
− Establish chain of manufacturers, suppliers of motorbike’s part who has ability
to fulfil requirement of quality, price and after sales service; distribution
channel, dynamic, professional.
− In 2010, to export general motorbike, parts and spare part which accounted for
450,000 – 500,000 bikes, contributes about USD300 million to export turnover.
− To establish and utilize Research and Development center before 2010.

1

Development strategy
Manufacturing development to serve local demand:
− Step up manufacture of spare parts, and material for motorcycle with high
quality, especially in producing engine, raw material and fuel.
− Focusing on investment deepening, technology & equipment innovation;
modernizing some key processes in manufacturing namely precise mechanical,
chemical, rubber, plastic, electronic, automation and new material.
− To enhance research design new product to boost up reputation and completive
ability of Vietnam motorcycle.
− Investing on high class motorbike research and development that enable to
consume clean fuel.
Step up export:
− Deploying marketing activities in order to search and utilize export market,
especially South Africa, West East Asia and Latin America markets;
− Boost up export motorcycle, spare parts, raw materials that have high
competitive advantages, match local demand in each market;

− Enhance local collaboration, interlink to increase competitive advantage.
Design new model for export.
1.2.3 P.E.S.T analysis
Political
Government stability: The Vietnam’s business policies are opening the door for
businessmen and investors to do business in Vietnam. The Vietnamese government is
stable under the leading of communist party.
Taxation policy: Vietnam has an extensive range of tax laws. Instead of implementing
a comprehensive tax system in accordance with internationally accepted taxation

principles, the enacted legislation may be more regarded as an ad hoc response to
problems faced in opening up the country to foreign investment. Not only are the laws
and regulations contradictory or incompatible with overseas tax systems, but also the
fundamental principles on which the taxes are based are also imprecise. This
deficiency in design is characteristic of the desire of the government to use a single
tax instrument to address multiple economic and social objectives. Companies are
liable to a range of taxes (corporate income tax, capital gains tax, value added tax,
special sales tax, import and export duties, profit remittance tax, tax on use of natural
resources, withholding tax on income generated from royalties, land and housing tax,
and tax on contractors), while those individuals with high incomes are liable to
personal income tax. The Vietnamese government uses tax incentives to attract
foreign investment. Low corporate tax rates, or even temporary tax exemptions, are
offered to foreign companies in an effort to compete with other Asian countries for
foreign investment. Vietnam is considered to have one of the most liberal foreign
investment laws in Asia.
At the moment, the tax rate is 40 percent. Besides, the tax for spare parts imported
will be decrease in the next year.
Socio-cultural factors
Population demographics: According to the Asiaweek issue of October 6, 2006, the

population of Vietnam by the end of 2006 counted about 85 million, which in terms of
population makes Vietnam the second largest country in Southeast Asia.
Lifestyle changes: In the past, Vietnamese tended to save their money. They did not
spend much money on purchasing durable goods. However, the standard of living has
dramatically increased from the “Doi Moi” (Renovation) policy in 1986. Therefore,
people who are living in the city want to buy new motorbikes. Moreover, motorcycle
is the main and convenient transportation means of Vietnamese families, because the

infrastructure is in bad condition, the road is small and narrow. In addition, public
transportation cannot be developed soon. That’s why motorcycle is essential to the
society; most Vietnamese people can use motorcycle, both male and female.
Motorcycle is used for work, transporting from place to place, for going around,
picnic; and so on therefore, motorcycle is the essential means for the Vietnamese
lives.
Economics
Since Vietnam opened and integrated the regional economy, it has created the new
changes for the business and trading. In the average, the economy has grown around
8% annually and better individual income has gradually improved the standard of
living. Moreover, Viet Nam has recently become the official member of WTO,
obtaining the second wave of investment.
Technological
The government requires all motor makers increasing the rate of localization of their
spare parts in order to meet the demands of the government in developing its motor
industry. Besides, the latest technology should be applied in production and design
new motorbike models in order to enhance the competitive capacity.
There are currently 16,000 Internet subscribers registered in Vietnam, very few of
whom are private Vietnamese citizens. The Internet has still not attracted very many
local users. Officials had originally hoped to secure 50,000 service contracts in the
next coming years. Internet users are primarily foreigners and private and state-run

businesses. Even those private citizens who do have Internet access are usually
families of government officials or wealthy businessmen who can afford the high
costs. Thus far, Internet usage has been confined to the elite and to employees of
foreign or well-placed companies.
1.2.4 Competitor Analysis

The leader in the motorbike market in Vietnam is Honda Corporation. Honda brand
has come into Vietnamese minds for over 30 years. Honda is amazingly holding the
market share of 80% in the joint venture segment. Considerably, customers always
take Honda bikes as the standard bikes for all other brands. Consumers who buy
Honda brand are the people who prefer durable and popular products that can be used
by the whole family members as well as resell easily. Honda products have the brand
image on the price and popular in the market. So the spare parts are available for
repair and replacement. Honda Corporation also invested a lot of money (around $
112 million) to maintain its existing market share in Vietnam. “So much so, Honda
Vietnam has recently launched a new bike called Wave Alpha at VND10.990.000
(USD727). Basically, they want to capture the market which is currently enjoyed by
the Chinese bikes assemblers.” (Source from YMVN’s market data).
Another competitor of YMVN is Suzuki Corporation who has set up the factory for
several years. However, it has its own market niche 5% so far. Customers who buy
Suzuki motorbikes are the young people who like sports, style. The advantage of
Suzuki is the price is competitive rather than other Japanese models.
The other strong competitors are imported motorcycle which also from these famous
brand name such as: Honda, Piagio, Suzuki, etc. Other rival is Chinese’ bike, they are
small enterprises that assemble and produce motorcycles and spare parts with Chinese
origin. The flexible selling price is their strength. The other point is that the Chinese
bikes are easily designed following the other Japanese model that causes the
customer’s confusion to other bikes. Most of them are imitated to famous bike like
Honda Future and Yamaha Sirius.

Other supplying sources: Honda, Suzuki, Yamaha factories located in other Asian
countries such as Thailand, Malaysia, Japan, Indonesia, and Korea etc exported bikes
to contribute into Vietnamese market demand. Now these supplying sources are
limited and loosing their market shares for Joint Venture and domestic manufacturers.

1.2.5 Customer context
Customer’s awareness and perception about Yamaha product is not clear and
confused. Customers have little knowledge on Yamaha products. These information
and statements are collected by YMVN through surveying
2
customers and dealers’
ideas and comments about marketing communications. Customers and dealers
perceive Yamaha’s communications as following:
− Differentiated well with other brands
− Knowing Yamaha motorcycle, but not sure about quality, features, stores.
− Cannot prove the high value of the products supplying to market.
− Cannot come out the effective control and evaluation of marketing
communications tools
− Cannot identify which is the key marketing communications tool
− Customers have no many choices of sales promotion
− Confusion is caused by not using consistent messages to customers.
Awareness of the brand is not high enough. As the latest research showed that the
customers’ aided awareness is about 35%, but awareness among regular motorbike
users is much lower. In customers’ mind, Sanyang Motor’s products are in the
quadrant of low quality and low price. All Japanese bikes belong to high price and
high quality part. Honda occupies the top position in the perceptual map and followed
by Suzuki and Yamaha respectively. Look at the below figure, the readers will have
the right view about Yamaha image in customer’s perception.

2
Yamaha market research in 2006

Several solutions to expand market share of Yamaha motor Vietnam

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