Marketing strategy of Hemoq Mom in the Hospital channel

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TRNG I HC M TP.HCM UNIVERSITÉ LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB4

PHAN THI THANH THUY



MARKETING STRATEGY OF HEMOQ MOM IN
THE HOSPITAL CHANNEL



MASTER PROJECT
MASTER IN BUSINESS ADMINISTRATION
(PART-TIME)


Tutor’s Name: Dr. HOANG THI PHUONG THAO





Ho Chi Minh City
(2011)
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UNDERTAKING

I undertake that the project “Marketing strategy of HemoQ mom in the hospital channel” is
my own work and it has not been submitted anywhere for any degree or qualification.
I also certify that, to the best of my knowledge, any help received in preparing this thesis,
all used sources have been acknowledged.

Ho Chi Minh, 27
th
February, 2012

PHAN THI THANH THUY

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ACKNOWLEDGEMENT

I would like to express my deep gratitude to those who provided me with professional and
personal support during my years of postgraduate study as well as work on this thesis.
First and foremost, the deepest and most sincere gratitude goes to my tutor, Dr. Hoang Thi
Phuong Thao, who spent her countless hours guiding me to do the research and sharing her
knowledge and experience.
Secondly, I would like to sincerely acknowledge to professors of Vietnam-Belgium master
program who gave me not only valuable knowledge but also the professional method of
studying.
I owe my deepest gratitude to my Boss, Mr. Phan Thanh Binh, Vice general director of
Merap, who gave me valuable support and usefull information for this thesis.

I am also indebted to my colleagues in Merap who helped me to interview doctors and
collect data for my research.
I would like to express my thanks to all coordinators of this MBA program and all friends
at MBAVB4 who cooperated and accompanied me in two year period of this program.
Last but not least, it is also an honor for me to thank to my family members, especially my
beloved husband, Mr. Nguyen Truong Khoi, for their boundless support, abundant love
and encouragement throughout my journey of this MBA program.

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TUTOR’S COMMENT

I am writing to confirm that the project entitled:

MARKETING STRATEGY OF HEMOQ MOM IN THE HOSPITAL CHANNEL

Prepared by
Ms. Phan Thi Thanh Thuy

has satisfied the requirement for a Master’s project in Business Administration.
The author of the project shows her very good ability to identify problem, select a
appropriate research method, analyze the collected data and then recommend a justifiable
marketing strategy.
I, therefore, recommend that the project will be presented to the Examination Board.

Tutor,


Dr. Hoang Thi Phuong Thao

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ABSTRACT

HemoQ mom is an iron drug for iron deficient anemia treatment of Daewoong Korean
pharmaceutical manufacturer. It has been exclusively distributing in Vietnam by Merap
since January of 2011 without any support from the marketing. In an extremely
competitive environment with over two hundred of competitors, HemoQ mom did not
achieve the sales target. Besides, long-term strategy of Merap is build brand for some good
ethical brands and HemoQ mom is one option. Accordingly, the purpose of this project is
to provide marketing strategy of HemoQ mom to Merap in order to solve sales issues and
have a famous brand as well in this crowded market.
The combination of exploratory and descriptive research is an appropriate methodology for
this research. Three methods of collecting data are used in this study: secondary data,
qualitative and survey method.
The result of environment analysis shows that its competitive advantage is high
bioavailability thanks to its new iron form- complex iron. After customer analysing and
evaluating different market segments, HemoQ mom chooses two segments to target.
Primary target market is doctors of obstetric, renal, hematology and gastroenterology
departments of grade 1 and 2 hospitals and secondary target market is doctors of these
departments of grade 3 hospitals.
To satisfy the needs of these target markets, HemoQ mom should be positioned as the
leader of iron drug in terms of extremely safety profile as well as high bioavailability
thanks to its new iron form- complex iron. However, its core competency is extremely
safety profile, the slogan of HemoQ mom, therefore, should focus on this competitive
advantage: “Complex iron, nonionic iron, safe iron”.
An appropriate marketing mix strategy is also proposed to influence the demand of
HemoQ mom.
Finally, evaluation and control is the ending of this project to measure the result of the

marketing strategy and have a timely decision in case of occurred problems.

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TABLE OF CONTENT

UNDERTAKING ii
ACKNOWLEDGEMENT iii
TUTOR’S COMMENT iv
ABSTRACT v
TABLE OF CONTENT vi
LIST OF ABBREVIATIONS ix
LIST OF FIGURES x
LIST OF TABLES xii
CHAPTER 1: INTRODUCTION 1
1.1. PROBLEM STATEMENT 1
1.2. RESEARCH OBJECTIVE 2
1.3. RESEARCH QUESTIONS 2
1.4. RESEARCH METHODOLOGY 2
1.4.1. Desk research (secondary research) 2
1.4.2. Qualitative research (primary research) 3
1.4.3. Quantitative research (primary research) 4
1.5. SCOPE OF THE STUDY 5
1.6. SIGNIFICANCE OF THE STUDY 5
1.7. STRUCTURE OF THE STUDY 6
CHAPTER 2: LITERATURE REVIEW 7
2.1. MARKETING STRATEGY 7
2.1.1. Concept of marketing strategy 7
2.1.2. Market segmentation 8

2.1.3. Market targeting 9
2.1.4. Positioning 9
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2.1.5. Marketing mix 10
2.2. SITUATION ENVIRONMENT ANALYSIS 12
2.2.1. Internal environment analysis 13
2.2.2. Customer environment analysis 13
2.2.3. External environment analysis 15
2.3. SWOT ANALYSIS 17
2.4. CHAPTER SUMMARY 19
CHAPTER 3: INTERNAL & CUSTOMER ENVIRONMENT ANALYSIS 20
3.1. INTERNAL ENVIRONMENT ANALYSIS 20
3.1.1. Introduction to Merap 20
3.1.2. HemoQ mom business overview 22
3.1.3. Marketing mix 24
3.2. CUSTOMER ENVIRONMENT ANALYSIS 27
3.2.1. Customer identification 27
3.2.2. Customer satisfaction 30
3.2.3. Reasons for non-purchase 34
3.3. CHAPTER SUMMARY 35
CHAPTER 4: EXTERNAL ENVIRONMENT ANALYSIS 36
4.1. OVERVIEW OF IRON SUPPLEMENT DRUGS MARKET 36
4.1.1. Iron deficiency anemia treatment agents 36
4.1.2. Market size 37
4.1.3. Market share 38
4.1.4. Market trend 39
4.2. COMPETITORS ANALYSIS 40
4.2.1. Competitor identification 40

4.2.2. Key competitors assessment 43
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4.3. POLITICAL ENVIRONMENT 50
4.4. ECONOMIC ENVIRONMENT 51
4.5. SOCIAL ENVIRONMENT 53
4.6. TECHNICAL ENVIRONMENT 53
4.7. CHAPTER SUMMARY 53
CHAPTER 5: RECOMMENDED MARKETING STRATEGY & CONCLUSION 55
5.1. SWOT ANALYSIS AND DEVELOPING COMPETITIVE ADVANTAGES 55
5.1.1. SWOT analysis 55
5.1.2. Developing competitivie advantages 56
5.2. MARKETING OBJECTIVES 56
5.3. MARKET TARGETING 57
5.4. POSITIONING 58
5.5. MARKETING MIX 58
5.6. EVALUATION & CONTROL 63
5.7. CONCLUSION 64
5.7.1. Conclusion 64
5.7.2. Study limitation and recommendation for further study 65
REFERENCES 66
APPENDIX 68
1. Polysaccharide iron complex produces fewer adverse effects than ferrous sulfate 68
2. Polysaccharide iron complex reduces toxicity relative to other forms of iron 69
3. Questionnaire 70
4. Interviewees’ information of qualitative research 74
5. Interviewees’ information of quantitative research 75

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LIST OF ABBREVIATIONS

DAV : Drug Administration of Vietnam
ETC : Ethical
GDP : Gross domestic product
MOH : Ministry of health
OTC : Over the counter
PIC : Polysaccharide iron complex
SPSS : Statistical Package for the Social Sciences
USD : United States Dollar
VND : Vietnam dong
WHO : World health organization
WTO : World Trade Organization


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LIST OF FIGURES

Figure 1.1: Interviewee category 5
Figure 2.1: The interconnectedness of the internal, customer, and external environments 12
Figure 2.2: SWOT matrix 18
Figure 3.1: Merap’s organization structure 20
Figure 3.2: Merap’s organisation structure 21
Figure 3.3: Merap’s distribution system 22
Figure 3.4: HemoQ mom’s sales review by value in 2011 24
Figure 3.5: Agreement level of HemoQ mom’s proposed concepts 25

Figure 3.6: Reasonable price 26
Figure 3.7: Key decision factors of end-users’ in iron suplement selection 28
Figure 3.8: Vietnamese monthly income per capita by urban and rural areas 29
Figure 3.9: “Very important level” of factors in the selection of iron supplements 29
Figure 3.10: Interest level of purchase KPIs 31
Figure 3.11: The most common side effects of current iron drugs 32
Figure 3.12: Patient feedbacks about HemoQ mom 33
Figure 3.13: Reasons for new purchase / continue purchase 33
Figure 3.14: Reasons for not or rarely purchase 34
Figure 4.1: Vietnamese pharmaceutical market size 37
Figure 4.2: Therapy classes’ performance 37
Figure 4.3: Iron drugs market share in 2010 (by value) 38
Figure 4.4: Vietnamese pharmaceutical market growth 39
Figure 4.5: Pricing segmentation 41
Figure 4.6: Top 10 well-appreciated products 42
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Figure 4.7: Top 5 iron drugs in terms of sales by value in 2010 (USD) 42
Figure 4.8: Vietnam’s GDP growth rate 51
Figure 4.9: Annual drug consumption per capita (USD/Cap/Year) 52
Figure 5.1: Necessary level of proposed marketing activities for HemoQ mom 60

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LIST OF TABLES

Table 2.1: Summary of Product Life Cycle Characteristics, Objectives, and Strategies 8
Table 2.2: The Four Ps of marketing mix 11

Table 2.3: The sellers’ four Ps to the customers’ four Cs 12
Table 3.1: Top 10 pharmaceutical manufacturers in Korea 31
Table 4.1: The new iron medicaments in Vietnam market 39
Table 5.1: Marketing objectives of HemoQ mom 56

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CHAPTER 1: INTRODUCTION

1.1. PROBLEM STATEMENT
Vietnam’s pharmaceutical market has strongly grown in recent years. Two important
factors contribute to high growth of Vietnam's pharmaceutical market is economic growth,
although slowing in 2010 but is still high at 13%, and large population (world ranked 13
th

in 2010). The total value of Vietnam's drug use has increased steadily and at high levels of
13-25%/year for 5 years, much higher than average growth rate of the global
pharmaceutical industry (6.2%) (Source: Drug Administration of Vietnam data).
To capture this market demand, Vietnam market becomes more interesting to attract
pharmaceutical companies. Hence, the number of medicaments in general and iron drugs in
particular also greatly increases. There are currently around 200 pharmaceutical products
containing iron for anemia prevention and treatment, including HemoQ mom of Merap.
Although Merap is one of three companies having the best distribution system & service in
Vietnam, HemoQ mom has achieved sales of around only 3.5 billion Vietnam dong / year.
Quarterly growth rate is still low and Merap did not reach yearly sales goal according to
distribution contract between Merap and manufacturers; Merap suffered, therefore, large
quantities of inventory as well as low turnover. In case that Merap continues selling the
product without any marketing investments, Merap will have to face with huge amount of
inventory, which will be out of date in one and a half years later.

Moreover, despite having some mega brands leading in over-the-counter (OTC) market
like Osla, Xisat, and Biobaby… Merap has not yet any famous brands in ethical (ETC)
market because Merap invest marketing activities for OTC brands only, not for any of
ethical brands. In long-term strategy, Merap will build brand for some of good ethical
brands. HemoQ mom is one of the good brands that be selected.
Thus, developing an appropriate marketing strategy for HemoQ mom is necessary in order
to reach the sales objectives in short term as well as going along with Merap’s long-term
strategy in building brand for some good ethical brands.
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1.2. RESEARCH OBJECTIVE
In order to answer the mentioned research problems, this study is designed to discover
customer’s perception about HemoQ mom as well as its competitors; exploring doctors’
expectations on an iron supplement agent, competitive advantages of HemoQ mom and
developing finally marketing strategy for HemoQ mom.
1.3. RESEARCH QUESTIONS
To attain these above objectives, the research questions are:
 How customer perceive about HemoQ mom?
 What they expect on an iron supplement agent?
 What are strengths and weaknesses of key competitors of HemoQ mom?
 Which are competitive advantages of HemoQ mom?
 What is marketing strategy for HemoQ mom?
1.4. RESEARCH METHODOLOGY
This study is designed to discover customer’s perception about HemoQ mom and its key
competitors; exploring doctors’ expectations on an iron supplement agent; discovering
HemoQ mom’s competitive advantages and developing finally marketing strategy for
HemoQ mom. Accordingly, the combination of exploratory and descriptive research is an
appropriate methodology for this research.
There are three methods of collecting data used in this study: secondary data, qualitative

and quantitative method.
1.4.1. Desk research (secondary research)
Since HemoQ mom is the first iron supplement medicine as polysaccharide iron complex
in Vietnam, there are not any market data for this kind of product. In this research,
secondary data are collected from Merap’s information as well as secondary data from
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FTA
1
market research company about consumers’ usages and attitudes toward iron
supplement agents:
 HemoQ mom’s sales data from sales department of Merap.
 Customer’s feedbacks from HemoQ mom’s medical representatives sales reports as
well as Merap’s customer services reports.
 Qualitative as well as quantitative research from FTA’s research about end-users’
usage and attitudes toward iron supplement agents.
 IMS
2
data
 Clinical studies published in famous medical journals in the world.
 Data from World health organization (WHO), Drug Administration of Vietnam
(DAV), General statistic office of Vietnam …
1.4.2. Qualitative research (primary research)
Qualitative research is conducted by the in-depth interview technique and face-to-face
method with 20 doctors who are HemoQ mom’s current customers.
In this step of research, one of the main objectives is to explore customers’ key factors of
choosing an iron supplement agent, their expectations about it, strengths and weaknesses of
key players in this sector, and competitive advantages of HemoQ mom. Another one is to
discover their perceptions about HemoQ mom.

The result of this qualitative research is used to establish the questionnaire for quantitative
research.
Hereafter is some useful information gained from the qualitative research:
 All of iron supplement agents did not mentioned about their iron categories (ferrous
salt, ferric salt of complex iron), except HemoQ mom.


1
FTA research & consultant is a quality leading research agency in South East Asia, head office in HCMC,
Vietnam.
2
IMS is a leading provider of information, services and technology for the healthcare industry, covering
markets in 100+ countries around the world.
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 Doctors realized the new concept of iron complex through HemoQ mom’s medical
representatives but did not deeply know their advantages.
 Obstetric doctors prefer HemoQ mom especially in the first three-month because it
does not bring uncomfortable feelings like other drugs to such kind of sensitive
women.
 All therapeutic periods of iron supplement take some months, so daily cost of drugs
are is an important factor to consider when choosing.
 All competitors did not mentioned about their class of iron like HemoQ mom as
well as benefits of their active ingredient.
 Strengths and weaknesses of top five iron drugs in terms of sale value according to
IMS data.
1.4.3. Quantitative research (primary research)
The research scope targets to doctors who are already HemoQ mom’s customers or not yet
but belongs to special departments for iron deficiency anemia treatment with the sample

size of one hundred and fifty seven.
The main method of this quantitative research is face-to-face interview. Interviewees were
directly interviewed by Merap’s medical representatives. Finally, data was analyzed by
SPSS version 19.
Sample
One hundred and seventy questionnaires were distributed directly to doctors of
departments where iron deficiency anemia treatment agents are used. There were one
hundred and fifty seven (92%) returned with valid answers. In which, there are one half of
doctors from Ho Chi Minh city and another half from other cities and provinces. In terms
of department category, there are 66% of interviewees belong to obstetrical department, the
remaining belong to other departments like Haematology and Blood transfusion
Department, Renal Department, Gynaecology Department, Gastroenterology
Department…
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Figure 1.1: Interviewee category

(Source: Survey for this project, 2011)
Questionnaire
The questionnaire comprises three parts of information:
 Part 1: iron supplement usage behaviors that focus on brand awareness, usage, key
decision factors, reasons for non-purchase…
 Part 2: HemoQ mom’s concept test, user’s opinions about quality, price, proposed
promotional activities of HemoQ mom
 Part 3: interviewees’ personal information such as the hospital, department.
1.5. SCOPE OF THE STUDY
Iron supplement drugs in general and HemoQ mom in particular are used in the whole
country. The study was conducted among Southern customers only where the
approximately four of five sales of Merap comes from.

1.6. SIGNIFICANCE OF THE STUDY
The study brings a practical significance to Merap. It will provide a marketing strategy to
improve sales volume as well as market share of HemoQ mom, and especially help to build
HemoQ mom as a big brand in hospital channel, maintain the top positions of Merap in
Vietnamese pharmaceutical market.
50%
50%
Area category
HCM city Provinces
66%
34%
Department category
Obstetrical dep Others
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1.7. STRUCTURE OF THE STUDY
The study is structured into five chapters as following: introduction, literature review,
internal and customer environment analysis, external environment analysis and
recommendations & conclusion.
 Chapter 1 introduces the research including problem statement, research objective
and question, research method, scope of the study, structure of the study and
significance of the study.
 Chapter 2 presents literature review of marketing strategy, marketing environment
and SWOT analysis.
 Chapter 3 analyses internal environment as well as customer environment.
 Chapter 4 analyses external environment.
 Finally, chapter 5 proposes marketing strategy and conclusion of the project basing
on the situation analysis and summarizes in the previous chapters.
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CHAPTER 2: LITERATURE REVIEW

2.1. MARKETING STRATEGY
2.1.1. Concept of marketing strategy
According to Kotler (2005), marketing strategy is the marketing logic by which a business
unit hoped to achieve its marketing objectives. It shows how strategies for the target
market and positioning build upon the firm’s differential advantages. It should detail the
market segments on which the company will focus. These segments differ in their needs
and wants, responses to marketing, and profitability. The company should put its effort into
those market segments it can best serve from a competitive point of view. It should
develop a marketing strategy for each targeted segment.
Target consumers are at the centre of the marketing strategy. The company identifies the
total market, divides it into smaller segments, selects the most promising segments and
focuses on serving them. It designs a marketing mix using mechanisms under its control:
product, price, place and promotion. The company engages in marketing analysis,
planning, implementation and control to find the best marketing mix and to take action.
The company uses these activities to enable it to watch and adapt to the marketing
environment.
In addition, according to O.C.Ferrell (2008), marketing strategy involves selecting and
analyzing target market, creating, and maintaining an appropriate marketing program
(product distribution, promotion, and price) to satisfy the needs of those target markets. It
is at this level where the firm will detail how it will gain a competitive advantage by doing
something better than the competition. It is also important that the firm attempt to make
these advantages sustainable. Thus, in its broadest sense, marketing strategy refers to how
the firm will manage its relationships with the customers in a manner that gives an
advantage over the competition.
The strategies of a product need to change with each of these life-cycle phases. The table
below shows a few examples of how this might work:

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Table 2.1: Summary of Product Life Cycle Characteristics, Objectives, and
Strategies
Introduction Growth Maturity Decline
Characteristics

Sales Low sales Rapidly rising sales Peak sales Declining sales
Costs High cost per
customer
Average cost per
customer
Low cost per
customer
Low cost per
customer
Profits Negative Rising profits High profits Declining profits
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Growing number Stable number
beginning to decline
Declining
number
Marketing
Objectives

Create product
awareness and
trial
Maximize market

share
Maximize profit
while defending
market share
Reduce
expenditure and
milk the brand
Strategies

Product Offer a basic
product
Offer product
extensions, service,
warranty
Diversify brands and
items
Phase out weak
models
Price Charge cost-plus Price to penetrate
market
Price to match or best
competitors’
Cut price
Distribution Build selective
distribution
Build intensive
distribution
Build more intensive
distribution
Go selective

phase out
unprofitable
outlets
Advertising Build product
awareness among
early adopters
and dealers
Build awareness
and interest in the
mass market
Stress brand
differences and
benefits
Reduce to level
needed to retain
hard-core loyal
Sales
promotion
Use heavy sales
promotion to
entice trial
Reduce to take
advantage of heavy
customer demand
Increase to encourage
brand switching
Reduce to
minimal level
(Source: Philip Kotler, 2001, p.172)
2.1.2. Market segmentation

According to Kotler (2012), market segmentation divides a market into well-defined slices.
A market segment consists of a group of customers who share a similar set of needs and
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wants. The marketer’s task is to identify the appropriate number and nature of market
segments and decide which one(s) to target.
We use two broad groups of variables to segment consumer markets. Some researchers try
to define segments by looking at descriptive characteristics: geographic (countries, regions,
cities), demographic (sex, age, income, education), and psychographic (social classes,
lifestyles). Then they examine whether these customer segments exhibit different needs or
product responses. Other researchers try to define segments by looking at behavioral
considerations, such as consumer responses to benefits, usage occasions, or brands. The
researcher then sees whether different characteristics are associated with each consumer-
response segment. The process of dividing a market into groups of buyers with different
needs, characteristics or behavior, who might require separate products or marketing
mixes, is market segmentation.
Regardless of which type of segmentation scheme we use, the key is adjusting the
marketing program to recognize customer differences.
2.1.3. Market targeting
Kotler (2005) mentioned that after a company has defined market segments, it could enter
one or many segments of a given market. Market targeting involves evaluating each market
segment's attractiveness and selecting one or more segments to enter. A company should
target segments in which it has a differential advantage over its competitors; where it can
generate the greatest customer value and sustain it over time. A company with limited
resources might decide to serve only one or a few special segments; this strategy limits
sales, but can be very profitable. Alternatively, a company might choose to serve several
related segments - perhaps those with different kinds of customer, but with the same basic
wants. Alternatively, perhaps a large company might decide to offer a complete range of
products to serve all market segments. Most companies enter a new market by serving a

single segment, and if this proves successful, they add segments. Large companies
eventually seek full market coverage. The leading company normally has different
products designed to meet the special needs of each segment.
2.1.4. Positioning
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After a company has decided which market segments to enter, it must decide what
'position' it wants to occupy in those segments. A product's position is the place the product
occupies in consumers' minds. If a product were perceived to be exactly like another
product on the market, consumers would have no reason to buy it (Kotler 2005).
Market positioning gives a product a clear, distinctive and desirable place in the minds of
target consumers compared with competing products. Marketers plan positions that
distinguish their products from competing brands and give them the greatest strategic
advantage in their target markets. Such simple statements are the backbone of a product's
marketing strategy. In positioning its product, the company first identifies possible
competitive advantages upon which to build the position. To gain competitive advantage,
the company must offer greater value to chosen target segments, either by charging lower
prices than competitors or by offering more benefits to justify higher prices.
However, if the company positions the product as offering greater value, it must deliver
greater value. Effective positioning begins with actually differentiating the company's
marketing offer so that it gives consumers more value than is offered by the competition.
The company can position a product on only one important differentiating factor or on
several. However, positioning on too many factors can result in consumer confusion or
disbelief. Once the company has chosen a desired position, it must take steps to deliver and
communicate that position to target consumers.
2.1.5. Marketing mix
According to Kotler (2005): Marketing mix is the set of controllable tactical marketing
tools that the firm blends to produce the response it wants in the target market. The
marketing mix consists of everything the firm can do to influence the demand for its

product. The many possibilities gather into four groups of variables known as the 'four Ps':
product, price, place and promotion.
 Product means the totality of 'goods and services' that the company offers the target
market. Kotler (2005) defined that product was anything which was offered to a
market for attention, acquisition, use or consumption and that might satisfy a want
or need of people. It included physical good features, quality level, packaging,
product line, branding, etc…
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 Price is what customers pay to get the product. Kotler (2005) mentioned that all
product and services have a price, just as they have a value. In the narrowest sense,
price is the amount of money charged for a product or service. More broadly, price
is the sum of all the values that consumers exchanged for the benefit of having or
using the product or service. Companies set prices by selecting a general pricing
approach that concludes one or more these three sets of factors-cost, consumer
perception and competitors’ price. Furthermore, the price comprises many factors
as flexibility, price level, discounts, allowances, etc…
 Place includes company activities that make the product available to target
consumers, defined by Kotler (2005).
 Promotion means activities that communicate the merits of the product and
persuade target customers to buy it. The function of promotion in the marketing
mix is to achieve various communications objectives with each audience. There are
many promotion tools; each promotion tool has unique characteristics and costs.
Promotion mix is the specific mix of advertising, personal selling, sales promotions
and public relations that the company uses to pursue its advertising and marketing
objectives (Kotler, 2005).
Table 2.2: The Four Ps of marketing mix
Marketing mix
Product Promotion Price Place

Variety
Quality
Design
Features
Brand name
Packaging
Services
Warranties


Advertising
Promotions
Personal selling
Publicity

List price
Discounts
Allowances
Payement period
Credit terms
Channels
Coverage
Assortments
Locations
Inventory
Transport

Target market
(Source: Philip Kotler, 2005, p. 34)
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The four Ps represent the sellers' view of the marketing tools available for influencing
buyers. From a consumer viewpoint, each marketing tool must deliver a customer benefit.
Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs.
Table 2.3: The sellers’ four Ps to the customers’ four Cs
Four Ps
Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
(Source: Philip Kotler, 2006, p. 20)
2.2. SITUATION ENVIRONMENT ANALYSIS
According to O.C.Ferrell (2008), situation analysis summarized all pertinent information
about three key environments: the internal environment, the customer environment and the
external environment.
Figure 2.1: The interconnectedness of the internal, customer, and external
environments








(Source: O.C.Ferrell, 2008, p. 89)
Socio-cultural
External environment

Customer environment
Legal Competition
Who
Internal environment
Economy
When What
Technology
Why
Politics
Where
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2.2.1. Internal environment analysis
According to O.C. Ferrell (2008), the first aspect of a situation analysis involves the
critical evaluation of the firm’s internal environment. The internal environment analysis
considers issues such as the availability and deployment of human resources, the age and
capacity of equipment or technology, the availability of financial resources and the power
and political struggles within the firm’s structure. In addition, this section summarized the
firm’s current marketing objective and performance (O.C.Ferrell, 2008).
Internal factors include department objectives and resources, as well as organizational
strengths and weaknesses as identified by the SWOT analysis. The marketing manager
must consider all of these in assessing the future (E.N.Berkowitz et al, 2011).
According to Kotler (2000), internal environment analysis is one thing to discern attractive
opportunities and another to have the competencies to succeed in these opportunities. Thus,
each business needs to evaluate periodically its internal strengths and weaknesses in
marketing, financial, manufacturing, and organizational competencies. Clearly, the
business does not have to correct all of its weaknesses, nor should it gloat about all of its
strengths. The big question is whether the business should limit itself to those opportunities
in which it possesses the required strengths or consider better opportunities to acquire or

develop certain strengths.
2.2.2. Customer environment analysis
O.C.Ferrell (2008) claimed that the analysis of the customer environment examines the
current and future situation with respect to customers in the firm’s target markets. During
this analysis, information should be collected that identifies (1) the firm’s current and
potential customers, (2) the prevailing needs of current and potential customers, (3) the
basic features of the firm’s and competitors’ products perceived by customers as meeting
their needs and (4) anticipated changes in customers’ needs.
In assessing the firm’s target markets, the marketing manager must attempt to understand
all relevant buyer behavior and product usage characteristics. One method that the
marketing manager can use to collect this information is the 5W model: Who, What,
Where, When and Why: