how to get nguyen kim back to leaderin technical consumer goodsmarket in 2016 2018

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HO CHI MINH CITY OPEN UNIVERSITY

UNIVERSITÉ LIBRE DE BRUXELLES
SOLVAY BRUSSELS SCHOOL OF
ECONOMICS & MANAGEMENT

MMCoM9
NGUYEN THI NGOC LAN
PHAM HUU LOC

HOW TO GET NGUYEN KIM BACK TO
LEADER IN TECHNICAL CONSUMER
GOODS MARKET IN 2016-2018

MASTER FINAL PROJECT
MASTER IN MARKETING AND COMMUNICATION MANAGEMENT

Ho Chi Minh City
(2016)


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COMMITMENTS

The authors – Nguyen Thi Ngoc Lan and Pham Huu Loc - produced this project
together with materials retrieved from either public sources or Nguyen Kim’s.

The paper was made exclusively for the completion of Master in Marketing and

Business Management, Solvay Brussels School. No substance was used or would be
for any other purpose.


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ACKNOWLEDGEMENTS

I would like to express my appreciation to Assoc. Prof. Hoang Thi Phuong
Thao, Ph. D and Mr. Nguyen Le Thai Hoa, MMA for their supports and
supervision of this final project.


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LETTER OF RECOMMENDATION

We are writing to confirm that the project entitled:
HOW TO GET NGUYEN KIM BACK TO LEADER IN TECHNICAL
CONSUMER GOODS MARKET IN 2016-2018
Which was prepared by Ms. Nguyen Thi Ngoc Lan and Mr. Pham Huu Loc has
satisfied requirements for a Master project in Marketing and Communication
Management. They are now qualified to present it to the Jury.

Yours sincerely,

Academic Tutor, Assoc. Prof. Hoang Thi Phuong Thao (Ph. D)

Practical Tutor, Nguyen Le Thai Hoa (MMA)

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TABLE OF CONTENT
COMMITMENTS ........................................................................................ 3
ACKNOWLEDGEMENTS ......................................................................... 4
CHAPTER 1: INTRODUCTION .............................................................. 11
1.1. Vietnam Retail Market Overview: ................................................... 11
1.2

Vietnam Consumer Electronics Market: ......................................... 13

1.3

Nguyen Kim introduction:................................................................ 15

1.3.1

History: ........................................................................................................ 15

1.3.2

Nguyen Kim’s Vision - Mission – Objectives:............................................. 16

1.3.3

Nguyen Kim’s Marketing Activities ............................................................ 16

1.4

Problem statement and Rationales: ................................................. 17

1.5

Project objectives: ............................................................................. 18

1.6

Scope and limitation of the project: ................................................. 18

1.7

Methodology:..................................................................................... 19

1.8

Structure of the project: ................................................................... 19

CHAPTER 2: LITERATURE REVIEW .................................................. 21
2.1 Introduction:......................................................................................... 21
2.2

Brand nature and scope .................................................................... 21

2.2.1

Brand definition ........................................................................................... 21

2.2.2

Scope of the brand: ...................................................................................... 22

2.3

Retailer format:................................................................................. 22

2.4

Store image: ....................................................................................... 22

2.4.1

Some definitions:.......................................................................................... 22

2.4.2

Store image dimension: ............................................................................... 23

2.5

2.4.2.1.

Commercial/marketing image of store: .............................................................. 23

2.4.2.2.

Social image of the store ................................................................................... 24

2.4.2.3.

Strategic image of the store ............................................................................... 25

2.4.2.4.

Store personality ............................................................................................... 25

Store Satisfaction .............................................................................. 25


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2.6

Store loyalty ....................................................................................... 25

2.7

The relationship between store image, store satisfaction, and store

loyalty .......................................................................................................... 26
2.8

SWOT analysis:................................................................................. 27

2.9

Marketing strategy: .......................................................................... 27

2.10

Chapter summary .......................................................................... 27

CHAPTER 3: CRITICAL ANALYSIS ..................................................... 29
3.1

General analysis: ............................................................................... 29

3.1.1

Macro environmental Analysis (SLEPT) .................................................... 29

3.1.2

Micro environment: ..................................................................................... 31

3.1.2.1

Competitors: .......................................................................................................31

3.1.2.2

Customer segmentation: ..................................................................................... 33

3.1.2.3

Supplier analysis: ................................................................................................ 34

3.1.2.3.1

Power of suppliers:.......................................................................................... 34

3.1.2.3.2

Power of Nguyen Kim: .................................................................................... 34

3.2 Evaluation of Nguyen Kim’s Marketing Activities: ........................... 35
3.3

SWOT analysis:................................................................................. 37

3.3.1

Strengths: ..................................................................................................... 37

3.3.2

Weaknesses: ................................................................................................. 37

3.3.3

Threats: ........................................................................................................ 38

3.3.4

Opportunities: .............................................................................................. 38

CHAPTER 4: RECOMMENDATIONS AND ACTION PLAN.............. 39
4.1

Nguyen Kim’s business goals in the next 5 years: ........................... 39

4.2

Marketing objectives: ....................................................................... 39

4.3

Recommendations to improve Nguyen Kim customers’ satisfaction

and loyalty .................................................................................................. 39
4.3.1

Recommendations for improving Nguyen Kim’s commercial image

according to marketing mix (4Ps):............................................................................ 40
4.3.2

Nguyen Kim Social image: A good citizen for community ......................... 40


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4.3.3 New strategy for approaching customers (strategic image): ........................... 41
4.3.4 Building Nguyen Kim personality: The Protector ........................................... 42
4.3.5 Moving from traditional to digital in Marketing: .......................................... 43

4.4

Integrated marketing and communication plan with timelines: .... 43

4.5

Marketing Budget allocation in 2016-2018: ..................................... 46

4.6

Conclusions: ...................................................................................... 46

REFERENCES ........................................................................................................
APPENDIX ..............................................................................................................
APPENDIX A: .........................................................................................................
APPENDIX B: ........................................................................................................
APPENDIX C: .........................................................................................................
APPENDIX D: ........................................................................................................
APPENDIX E: .........................................................................................................


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LIST OF ABBREVIATIONS
CBRE:

Commercial Real Estate Services

TCG:

Technical Consumer Goods

CE:

Consumer Electronic

MDA:

Major Domestic Appliance

SDA:

Small Domestic Appliance

PH:

Photography

IT:

Information Technology

OE:

Office Equipment and Consumables

GDP:

Gross Domestic Product

M&A:

Mergers and Acquisitions

CSR:

Corporate Social Responsibility

BMI:

Business Monitor International

CCI:

Consumer Confidence Index

VCCI:

Vietnam chamber of commerce and industry

WTO:

World Trade Organization

HCMC:

Ho Chi Minh City


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ABSTRACT
Established since 1996, Nguyen Kim is very successful in Ho Chi Minh City
(Vietnam) as a market leader in Technical Consumer Goods (TCG), especially in

Consumer Electronic (CE), Major Domestic Appliance (MDA) and Small Domestic
Appliance (SDA) sector. Nguyen Kim is the first and the only store selling genuine
products with the clear price listed, applying “free delivery and installation at home”
service policy, the pioneer in service and bringing more benefits to customers. For
years, Nguyen Kim has had 21 shopping centers in big cities throughout the country
and became the leader in market share, service and revenue in Vietnam TCG retail
market. In 2015, Central Group (Thailand) acquired 49% stakes owned by Nguyen
Kim.
However, during from 2011 to 2013, TCG retail market witnessed significant
decrease in sales due to economic downturn. Vietnam Consumer Confidence Index
fell gradually. There was a sign of market saturation in the urban of Vietnam. While
some sectors that Nguyen Kim was evaluated as its strengths including CE, MDA,
SDA that maintained low growth rate, telecommunication sector rose dramatically
average 35% per year. This created an opportunity for The Gioi Di Dong (Mobile
World Investment Corporation-MWG), to develop since telecommunication was its
major business. Moreover, there was an aggressive penetration of internal and
external competitors in Vietnam TCG market during recent years. In terms of pricing
competition, most major retailers are trying to offer the most competitive discounts
to attract customers and increase sales. Nguyen Kim had many difficulties to maintain
and increase its sales, market share and even brand awareness. In 2015, Nguyen Kim
officially lost its leading position for The Gioi Di Dong, the biggest competitor in
sales and market share.
The purpose of this paper, therefore, is to study the opportunity for Nguyen Kim
getting back to the leader in TCG retail market. In order to do that, it is essential for
undertaking many researches to know what factors are most important for customers
purchasing decision, how to attract them effectively and how to maintain their loyalty.
Relevant desk researches and secondary researches have been used for the analysis
to evaluate Nguyen Kim integrated marketing and communication activities in the
last three years. A qualitative method was also done with two focus group discussion
to identify some factors contributing store image leading to store loyalty. Results

revealed that store image influenced positively on purchasing decision. Beyond
conventional marketing image of a store, corporate social responsibility gradually
became more important in determining purchasing decisions. The findings will help
retail management and Nguyen Kim in particular to understand customers’ insight,
to segment effectively, and to reposition their store image accordingly.


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CHAPTER 1: INTRODUCTION
The purpose of chapter 1 is to provide understanding for Vietnam’s retail market
overview, especially in Technical Consumer Goods market, how it is potential for
international and internal investors, and Nguyen Kim’s introduction in this context.
1.1. Vietnam Retail Market Overview:
Vietnam is one of the most potential retail markets in the world. In 2014, Vietnam
was ranked 28th in Top 30 thpotential markets in the world. However, Vietnam retail
market maintained the highest growth rate by 23% comparing to India (18,8%) and
China (13%). Furthermore, the market scale reached to USD110 billion in 2014 and
had high average growth rate by 15% every year from 2004.
On the other hand, Vietnam has approximately 100 million people, two-third of
Vietnam population is young and in the working age. Vietnam’s population increased
about 1 million people per year that lead to the rising of Vietnam retail market scale.
Young population is core shopper in the market so that push Vietnam retailing
development in the future.
According to CBRE’s report “The Liveliness of Retail Markets in Asia – Pacific
2014”, Vietnam is one of potential and highly-evaluated markets in the region.
Modern trade included supermarket, hypermarket, shopping mall, convenience store,
online shopping and TV shopping are dominant. It took by 25% in the market which
is projected increase by 45% in 2020. In VCCI research, 37,4% people said that
usually shopping in supermarket and shopping mall instead traditional market.

Asia is getting richer and Vietnam is part of this story. In Nielsen’s 2015 report “Are
you ready for the future”, Asia will be home of 3 billion middle class and Vietnam
middle class set to almost triple by 2020 from 12 million to 33 million (2014 to 2020).
By 2020, Vietnam’s average per capita income will rise from $1,400 to $3,400 a year.
Vietnam’s GDP accounted 7 percent in the fourth quarter of 2015 over the same
quarter of the previous year. Bloomberg’s analysis on the growth prospects of 93
economies in the world forecasted that Vietnam will rank second worldwide for
growth rate in 2016, with 6,6 percent, just behind India with 7,4 percent.
Top 3 big cities of population in Vietnam are Ho Chi Minh City 7,955 million, Hanoi
7,067 million and Thanh Hoa 3,491 million. The Vietnam’s urbanization accounted
for 3,3% per year with 33, 1% of population living in big cities.
Therefore, foreign retailers as well as local retailers make their efforts to expand their
coverage in Vietnam. There were various forms of expansion such as open new stores
and merge and acquisition.
For example, in February 2016, Thai Charoen Corporation (TCC Group-Thailand)
has acquired Big C Thailand with the price of 3, 5 billion USD and many have said
that TCC will acquire Big C Vietnam with the price of 900 million USD. Before,


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TCC also acquired Metro Vietnam, largest M&A deal ever, with the price of 655
million euro.
In 2015, Aeon acquired stakes of 30 percent in Fivimart, increasing their local retailer
up to 20 stores in Hanoi, 49 percent in Citimart with 27 stores in Ho Chi Minh City.
Central Group (Thailand) entered Vietnam retail market with two Robins stores in
Ho Chi Minh City and Hanoi, a range of shops of SuperSports, Crocs and New
Balance brands, Britain’s Marks and Spencer fashion stores. Central Group owns a
49 percent stake in Nguyen Kim Trading JSC, which is the biggest consumer
electronics store chains in Vietnam.

AuchanSuper planned to invest 500 million USD in Vietnam and co-operate with C.T
Group (South Vietnam) and MIPEC (North Vietnam) to boost enter the market in the
next 10 years. AuchanSuper become the only French retail chain in Vietnam after
Metro and Big C are selling themselves to Thailand partners.
Lotte (the number one retailer in Korea) set a target of 60 supermarkets while Aeon
(Japan’s giant retailer) has built 4 hypermarkets and announced that it will open 200
shopping destination in Vietnam in 2020.
Saigon Co.op currently has 80 Co.op Mart, 2 supermarket Co.op X-tra, SC Vivo City,
96 Co.op Food stores and nearly 200 Co.op stores. Vingroup has 20 Vinmart centers,
200 convenience store VinMart+. Vingroup also acquired Maximart and Vinatex
chains. Revenue of retail of Vingroup in 2015 reached 4200 billion VND for just one
year of development.
Vietnam’s Ministry of Industry and Trade projected the Vietnam retail industry
growth at 20-21% from 2016-2020. There will have approximately 1.300
supermarkets, 180 shopping malls in 2020. Modern retail’s revenue is 617, 5
thousands of billion VND.
In 2015, merges and acquisitions in Vietnam grew 9,7 percent to touch USD5,2
billion across deals, according to Stoxplus. Real estate, industrial goods and services,
and retail were the most favored sectors for overseas investors.
Middle class is rising in Asia and Vietnam is the part of this trend. They tend to spend
more and create a wave of demand for high-end products. 43% Asians are willing to
pay for innovative products and breakthrough their purchase decision will depend on
the characteristics of products including quality, level of safety, new technology
application.
Online is thriving and the momentum is forecasted to be led by Asia. Consumable
goods maintain consistent browse/buy rate with 40%/48% in airline ticket and
reservation, 43%/34% in electronic equipment, 40%/33% in mobile phone. ECommerce accounted to 1, 8 trillion USD, taking 6, 8% to total retail sales of
worldwide, increasing 18% comparing 2015 vs 2014. Millennial (age 21-34) are the
core shoppers with 49-59% of customers will browse online when they have demand
and 52-64% decide to buy online.

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1.2 Vietnam Consumer Electronics Market:
The Technical Consumer Goods (TCG) market in Vietnam in 2015 reached to USD6,
3 billion. Vietnam is only country in Southeast Asia ranked in Top 5 major strongest
growth market over the world last year. Daily market revenue accounted for VND370
billion.
Business Monitor International (BMI) forecasted Vietnam Consumer Electronic
Market can reach USD10, 8 billion in 2017 with the dominance of telecommunication
devices, accounted for half of market.
Chart 1.1 – GFK TEMAX VIETNAM for the fourth quarter of 2015

The Technical Consumer Goods market in Vietnam grew strongly in the fourth
quarter of 2015 comparing to the same quarter of 2014. As can be seen from the chart,
it is in the upward trend, significantly increase in sale volume from VND20, 8 trillion
in Q4/2012 to VND39,27 trillion in Q4/2015.


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Chart1.2 – Spending by consumers in seven sectors

Looking at each category of Technical Consumer Goods, spending by consumers in
five of the seven sectors – Telecommunications (TC), Consumer Electronics (CE),
Major Domestic Appliances (MDA), Small Domestic Appliances (SDA), and
Photography (PH) increased. Except for the Information Technology (IT) and Office
Equipment and Consumables (OE) which both accounted a decline, all the rest helped
to drive the 24.1% growth in sales generated in Q4 2015, compared to Q4 2014.

There are many key players sharing this market. In the North of Vietnam,Pico, Tran
Anh, Media Mart is key players while Cho Lon, Thien Hoa sharing the market in
South. Nguyen Kim and The Gioi Di Dong/Dien May Xanh have a wide coverage
over the country.
Pico is one of the biggest retailers in the North and its brand familiar with the majority
of population not only in Hanoi. In early 2016, the fifth Pico shopping center was
opened at 240 Ton Duc Thang (Dong Da Ward, Hanoi) with 2.500 square meter. It is
part of Pico expansion strategy in 2016, increasing the number of store by 5 in Hanoi
and 6 another stores in other provinces. Pico was ranked in Top 500 Retail Companies
in Asia-Pacific and Top 10 leading retailers in Vietnam from 2011, ranking by The
Retail Business Magazine, Retail Asia and Euro Monitor Market Research Group.
Tran Anh Digital World Joint Stock Company was established in 2002. December 12
2013, Nojima – one of Japan’s leading consumer electronics retailer enter Vietnam
market after acquiring 10% of Tran Anh. In June 2015, Nojima increased their
ownership to 30, 91%. Tran Anh announced to their expansion strategy in 2016 with
set foot in South of Vietnam with Ho Chi Minh City, the biggest potential market.
Entering the consumer electronics market since January 16 2008, up to now, Media
Mart covered the North Vietnam market by many shopping center at Hanoi and 10
provinces behind such as Phu Tho, Quảng Ninh, Bắc Giang, Nam Định, Vĩnh Phúc,
Thanh Hóa, Hưng Yên, Bắc Ninh, Thái Nguyên and Hải Phòng.


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Establishing in 2001 with main sector are consumer electronic and furniture, Thien
Hoa has been known as big retailer with 7 shopping center in Ho Chi Minh City, 1 in
Binh Duong, 1 e-Commerce shopping center and 8 after-sale service center.
Cho Lon entered the market in 2001, up to now, Cho Lon has 31 subsidiaries over
the South of Vietnam, included 14 stores in Ho Chi Minh and provinces around the
big city such as Tay Ninh, Dong Nai, Long An and Binh Duong. 14 stores in many

provinces of Mekong Delta such as Bac Lieu, An Giang (Long Xuyên), Vinh Long,
Ca Mau, Can Tho, Ben Tre, Kien Giang, Tra Vinh, Dong Thap (Cao Lanh, Sa Dec),
Soc Trang, Hau Giang. 06 stores in Da Nang, Khanh Hoa (Nha Trang), Binh Thuan
(Phan Thiet), Lam Dong (Bao Loc).
End of 2015, MWG registered significant increase by 60 percent over the year of
2014, reached VND25, 250 billion revenue and VND1, 072 billion of profit after tax.
Average of sale per day is approximately VND70 billion. MWG accounted for 620
shops selling mobile phone, computer and consumer electronics, coverage of
nationwide. In 2016, MWG’s strategy in set the foot print in North of VN market. In
digital sector (mobile phone and media tablets), The Gioi Di Dong is leading brand
and with FPT shop, took over 50% market share of Vietnam retail market.
1.3 Nguyen Kim introduction:
1.3.1 History:
Establishing in 1996, Nguyen Kim Trading Joint Stock Company launched its first
store in Ho Chi Minh City offered complementary “door-to-door” delivery and
installation service. Nguyen Kim established the first modern consumer electronic
shopping center (modern trade format) in 2001 and built up strategic partnerships
with leading global electronic corporations. For years, Nguyen Kim became the
leading in consumer electronic market in Ho Chi Minh City, South of Vietnam.
In 2007, Nguyen Kim set the foot print in North market with Trang Thi Shopping
Center (Hanoi). From 2012, Nguyen Kim expanded coverage over the nationwide
with opening consumer electronic shopping centers in Central of VN, Southeast of
VN and Mekong Delta, increasing their store chain up to 21 store over the nationwide,
1 B2B center and 1 E-Commerce.
Nguyen Kim has good relationship with partners such as electronic corporations,
suppliers, banks and financials. These help Nguyen Kim in their activities, bring more
and more benefits for customers.


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1.3.2 Nguyen Kim’s Vision - Mission – Objectives:
Vision:
To be the dominant leader of the retail and shopping center industries in
Vietnam
Mission:
-

To upgrade the retail market and raise the Vietnamese consumers’ benefits to
be equal to those in developed countries.
To build a flat and open environment to maximize the capability, creativity
and long-term career development for all the staff.
To ensure the fast and sustained growth with high return of investment.

Objectives: Nguyen Kim’s strategic goals in the next 5-year plan
-

To continue developing Nguyen Kim as the leading Vietnamese brand in
electronic and digital retailers and achieve the average growth rate of 50%
To reach50 Nguyen Kim shopping centers across 32 big cities and provinces.
To continue follow the commitment of providing superior services and aftersales, introducing new and innovative policies to upgrade the consumers
benefits to be equal to those in developed countries.
1.3.3 Nguyen Kim’s Marketing Activities

The majority of Nguyen Kim Marketing Activities are trade marketing, small
minority are sponsorship. Nguyen Kim has yearly promotion campaigns such as
Shopping Season, Golden Week and Big Bang. These are almost familiar with
customers from many years.
Here are Nguyen Kim marketing activities during the year:

Table 1.1 – Nguyen Kim Marketing Activities during the year
(Source: Authors synthesized)
Campaign

Timeline

Content
Jan

Shopping Season

Month of Loving
Nguyen Kim
thank to
customers

Promotion Campaign for Tet
Holiday Shopping Season:
discounting for all consumer
electronic products included
high-end and low-end
Thousands of gifts for buyers
every day and special
discount events for weekend
Free maintenance for
customers who bought air
condition at Nguyen Kim

Feb

Mar

Apr

May

Jun

July

Aug

Sep

Oct

Nov

Dec


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Best cooling
solution in hot
season

Nguyen Kim &
Euro Cup 2012
Prediction

Nguyen Kim
Golden Weeks

Digital Festival
Paradox of
installment:
cheaper than
buying by cash

Master Card
Festival
Big Bang

Discount for air-conditioner
and cooling products up to
30%, free shipping and
installation
There are 2 activities for
customers:
- Buying and predict to get 4
BMW X1 sdrive 18i: Guess
score of final match and the
European championship team
- Free participation on
nguyenkim.com for all match
in Euro Cup 2012 to win
BMW X1 Sdrive 18i and 100
LCD TV 32 inches
Introduction activities for

strong brand names products:
Panasonic, LG, Sanyo, Sony,
Toshiba, Philips, Electrolux,
Sharp…etc…
Promotion & Caring:
- Discount up to 15%
- VIP Card plus discount up
to 5%
- Double warranty times
- 7 days trial using products
Discount up to 20% + Best
price + Gifts for whom
buying mobile and camera
Discount by 5% for
installment buying from
ANZ, HSBC, Sacombank,
Vietinbank during 12 months
Cooperate between Nguyen
Kim & Master Card, discount
up to 10% for customers who
pay by MasterCard
Big sale up to 49% for all
products from CE, MDA,
SDA, Digital

1.4 Problem statement and Rationales:
For years, Nguyen Kim built up their modern trade format in consumer electronics
retail market, to be pioneer in service that bringing much more benefits for Vietnam
consumer. It success in building website (e-commerce), B2B channel and apply many
service policies such as “free changing after sale in one week” service. It also applied

ERP system in company’s management and sale, the average growth rate is 58% per
year. In the period from 2011 to 2013, because of the economic slowdown,
Vietnamese tend more saving than spending that creates a more intense competitive
environment for Technical Consumer Goods retail market. To maintain the business
and protect the market share, competitors opened new stores, launched promotion
campaigns constantly, price competition increased significantly, especially in the big
cities which has saturated environment.
Nguyen Kim had difficulties because of their competitor’s expansion. Vietnam’s
Consumer Confidence Index (CCI) improved gradually after the economic downturn,
Technical Consumer Goods in Vietnam has developed in sales volume. There was


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the robust growth of the Telecommunications sector which was strengths of The Gioi
Di Dong. The Gioi Di Dong opened average 100 new stores per year and reached to
633 stores in 2015 comparing to 21 stores of Nguyen Kim.
In 2014, the first time The Gioi Di Dong surpassed Nguyen Kim in Retail AsiaPacific Top 500 ranking with USD721 million revenue comparing to USD603 million
of Nguyen Kim. In 2015, The Gioi Di Dong announced its revenue is USD1,1 billion
comparing to Nguyen Kim USD727 million (predicted). The Gioi Di Dong officially
becomes leader in TCG market while Nguyen Kim is backward to the second
position. Nguyen Kim lost its market share and customer loyalty because of several
reasons. Fisrtly, in the same year, Central Group Vietnam (Thailand retail’s
corporation) acquired 49% stakes of Nguyen Kim. This transition somehow affect to
Nguyen Kim’s business operations. Moreover, the lack of creativity in Nguyen Kim’s
marketing activities. This make its promotion campaigns did not attract customers as
usual. As a result, there was decrease in the number of visitors and sales.
Therefore, this project aimed to find out specific reasons behind for this problem and
worked out some solutions to help Nguyen Kim to take back the leading position.
1.5 Project objectives:

-

-

To analyze Nguyen Kim’s Business Activities included Marketing, Market
Share and its situation where Nguyen Kim are in from both macro and micro
perspectives.
To understand changing in customer behavior and habits and uncover
opportunities for Nguyen Kim in the new period
To identify Nguyen Kim problems by SWOT analysis so to recommend
strategic for Nguyen Kim to increase consumer perception, loyalty and
attraction through Marketing Promotion campaigns.

1.6 Scope and limitation of the project:
There were many factors affecting Nguyen Kim’s business performance such as
personnel management, supply chain, finance and so on, within the scope of this
project, we only focus on Nguyen Kim integrated marketing and communication
activities.
Data was collected in this project for the last 3 years only. It should have some
limitations on time series analysis. Because 10 to 15 years data are needed for
research analysis to find out mutual rules for economic changes.
Qualitative research was carried out for two groups of urban customers living in
Hanoi and Ho Chi Minh City. Therefore, they can’t be representative for the whole


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of Vietnam. Further research should be accounted for some other cities and rural
areas.
1.7 Methodology:

The project has been done based on two main data analysis: Secondary data and
primary data as follows:
Secondary data came from two sources: (1) Nguyen Kim internal sales and
marketing reports (Year: 2013 – 2015), retail market research reports from GFK,
Nielsen, A.T Kearney, CBRE’s report, yearly retail market report from Ministry of
Trade, VCCI … on the purpose of macro and micro market analysis (2) Academic
papers from Emerald and ProQuest for literature review.
Primary data was collected from two full Focus Groups of 10 consumers in order to
understand the consumer insight and expected attributes of electronics supermarkets
in general and Nguyen Kim in particular. One group includes consumers who have
bought technical consumer goods from electronics supermarkets within one month in
Ho Chi Minh City and another group in Hanoi (refer to table 2-1). The authors acted
as a moderator/facilitator in group discussions. Each focus group was held in the
private room of coffee house and lasted for two hours. During discussion, the
respondents were stimulated to digger the topic and go to the right direction of
research objectives. The contents of discussion aimed to find out the consumer
perception on the importance of electronics supermarkets’ attributes on store loyalty
as well as evaluation on Nguyen Kim’s integrated communication and marketing
activities (The detailed discussion was referred to Appendix A).
Table 1.2 – Focus Group Respondent description and coding
RESPONDENT
Office staff
Housewife
Manager
Business Owner
Total

Ho Chi Minh
2
2

3
3
10

Coding
HOS1,2
HOW1,2
HOM1,2,3
HOO1,2,3

Ha Noi
3
2
3
2
10

Coding
HAS1,2,3
HAW1,2
HAM1,2,3
HAO1,2

1.8 Structure of the project:
The paper was organized with 4 chapters:
CHAPER 1 – INTRODUCTION: to introduce the background of Vietnam Retail
Market, especially in Technical Consumer Goods retail market, what Nguyen Kim
Marketing Activities in year and then to understand the problem statement and
rationale.

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CHAPTER 2 – LITERATURE REVIEW: as the whole project is about increase
consumer perception, loyalty and attraction through Marketing Implementation.
CHAPTER 3 – CRITICAL ANALYSIS including:
1. General analysis: using SPEPT as a tool to prove the potentiality of Vietnam retail
industry of which many desk researches is taken into account.
2. Micro environment:
2.1. Competitor analysis: To identify Nguyen Kim key competitors in Technical
Consumer Goods market. Who are they, What are their market positions,
strengths and weakness? Material for analysis is synthesized from authors
2.2. Customer segmentation: To understand customer behavior and habits,
changing in their lifestyles. The main objective of this study is to identify
what Nguyen Kim should do to reach their target customer
2.3. Supplier analysis: this chapter will cover the analysis of relationship between
Nguyen Kim and suppliers which have great influences on the development’
Nguyen Kim business: Consumer Electronic Producers. Understanding their
power towards us helps launching marketing campaigns and bringing benefits
for customers
2.4. SWOT analysis: as a conclusion for the chapter, identifying Nguyen Kim
strengths and opportunities as well as weaknesses and threats as they are
overcome to get back leader in the market
CHAPTER 4 – RECOMMENDATION STRATEGY and ACTION PLAN: this
chapter defines Nguyen Kim brand personality and social image, how Nguyen Kim
increase their sale and customer awareness without open new stores.


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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction:
The literature review that was undertaken served to provide a theoretical base in order
to develop and justify the project initiatives. The following objectives were addressed
through the review as follows:
-

To understand the brand nature and scope
To describe retailer format and retailer brand/store image
To identify the various dimensions of store image and the role of store image
on store satisfaction and store loyalty

An overview of literature highlighting some new dimensions of store image in a broad
point of views was done to better understand the concept. The importance of store
image in shoppers’ satisfaction level and the store loyalty was mentioned accordingly
in order to help the retail management to have profound understanding of consumer
insight, to build unique attributes for their store images to attract more target
customers, increase repeat patronage, create more recommendations from loyalty
customers and eventually enhance and optimize their business effectiveness. This
also enable the management to re-position their store image, to set key business
objectives by developing an attractive loyalty program and loyalty customers’
recommendations to avoid switching since loyalty customers are active ambassadors
for their business. More importantly, with the perception of the variation of personal
culture orientations, new entrants in retail market will avoid serious mistakes in their
business planning.
2.2 Brand nature and scope
2.2.1 Brand definition
The American Marketing Association (AMA) defines a brand as a name, term, sign,
symbol, design, or a combination, which is intended to identify the goods and services
of a firm in order to differentiate them from competition. Other definition brand is “a

product offer from a known source” (Kotler, 2000). While Keller (2003) defines a
brand as a product that adds other dimensions that differentiate it from other products
and services designed to satisfy the same need. Kapferer (1997) says that a brand
exists when there is certain perceived risk. Without it, a brand would simply be the
name of a product. Therefore, a brand makes life simpler and less risky (Barwise et
al., 1990) and is a source of value for the consumer (Kapferer, 1997). A brand is also
an “intangible but critical component of what a firm means; a set of promises” (Davis,
2002). As different people may have different perceptions of the same brand,
therefore, a brand can be defined as a collection of many meanings. They play the
roles of identification to allow consumers to clearly see the brand; practicality in


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saving time and energy; a guarantee of product or service quality; optimization in
assuring the best buy within a category; characterization in being the confirmation of
your self-image; continuity in satisfaction with familiarity and intimacy; hedonistic
in satisfaction linked to brand attractiveness; and finally, an ethical function in
satisfaction linked to a responsible behavior. Based on individual consumer
perception, a brand may have one or more of these functions.
2.2.2 Scope of the brand:
A brand can be a physical product such as a detergent-Tide or OMO; a service such
as an airline - Vietnam Airlines; a store or distributor-Coop or Big C; a person - Le
Tham Duong; a place - Saigon zoo; a sport organization - Vietnam football
association; an organization - Vietnam heart association; and even an animal. So
brand of the store could see as store image.
Therefore, brand scope includes Product/Service brand, Retailer brand, Destinations
brand, NGOs, Sports Club, Political Parties, Religious organization , ex
Church of England, Personal brand : ex Pop stars (My Tam singer), Invention or right
(abortion or free trade).

In this project, Nguyen Kim was considered as a retailer brand.
2.3 Retailer format:
Consumers can now purchase goods and services from retailers through stores, form
retailers not through stores, and retail organizations (Philip Kotler& Keller, 2013).
(See Appendix B).
In Vietnam, as decided by the Minister of Trade No. 1371/2004 / QD-BTM dated
09/24/2004 promulgating regulations on supermarkets and commercial centers were
defined and classified into generalized supermarkets and specialized supermarkets.
Supermarkets are modern retail formats, or specialized integrated business enterprise;
structure of product categories, variety, quality assurance; meet the standards of
business space, technical equipment and management skills, business organization;
with the civilized modes of service, convenience to satisfy the shopping needs of
customers goods. Two types of store are identified: Department store and
Supermarket. Supermarkets are classified in to Generalized Supermarket and
Specialized Supermarket. Nguyen Kim belongs to Specialized Supermarket.
2.4 Store image:
2.4.1 Some definitions:
Martineau (1958, p.47) first defined store image as “... the way in which the store is
defined in the shopper’s mind, partly by its functional qualities and partly by an aura
of psychological attributes”.


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Lindquist (1974-1975, p.31) stated that store image is “... complex by nature and
consists of a combination of tangible or functional factors and intangible or
psychological factors that a consumer perceive to be present”. James et al. (1976,
p.25) simply defined store image as “… a set of attitudes based upon evaluation of
those store attributes deemed important by consumers”.
Other scholars (Bloemer & De Ruyter, 1998; Faircloth, Capella & Alford, 2001;

Jin & Kim, 2003; Osman, 1993) mutually agree that store image is the consumer’s
perception of a store, based on a set of salient attributes.
Beristain and Zorrilla (2011) included social and strategic corporate dimensions in
measuring store image. Stores can also be perceived as firms, linking the store to
aspects such as the firm’s interest in and commitment to society, creating social
image. Beristain and Zorrilla (2011), re-conceptualized store image as a set of brand
associations of commercial, social and strategic nature linked to store. Besides, based
on the emotions the store produces on consumers, store personality is formed.
2.4.2 Store image dimension:
From prism of recent researchers, the dimensions of store image were not only refered
to commercial/marketing attributes but also social and strategic image. Furthermore,
the emotion that was created by the store for shoppers, store personality was formed.
2.4.2.1. Commercial/marketing image of store:
Martineau' (1958) had identified 4 core attributes: layout and architecture; symbols
and color; advertising; and sales personnel.
Lindquist (1974-75) had do the reviewed 26previous studies and surveyed the
opinions of famous scholars and summarized some major constituents. It include:
merchandise, service, clientele, physical facilities, convenience and promotion, store
atmosphere, institutional and post – transaction satisfaction.
-

Merchandise including factors such as quality, assortment, styling or fashion,
guarantees and price;
Service encompassing staff service, ease of return, credit and delivery service;
Clientele: consisting of social class appeal, self-image congruency and store
personnel
Physical facility: layout and architecture;
Convenience: primarily location related;
Promotion: including sales promotions, product displays, advertising
programs, symbols and colors;

Store atmosphere: defined as “’atmosphere congeniality'' which represents a
customer's feeling of warmth, acceptance or ease;


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-

Institutional factor: such as the conservative or modern projection of store,
reputation and reliability
Post-transaction satisfaction: seen as returns and adjustments

James et al (1976) shortened to only six components of the shop: The layout of
goods, personnel, space, service, quality and price.
It is mutually agreed by academicians that the commercial/marketing image of store
includes:
Merchandise: include subcomponents such as quality, price, fashion and style, the
diversity of species.
Promotion: The promotion attributes include: Advertising, display and sales
discounts.
Convenience: Includes: stitching charges, inspection before leaving the counter
(Check out), position location, parking, travel, shopping ease, store hour,
transportation. The convenience is an important part of today's society.
Facilities: Includes front deposit (fixtures), other utilities, store appearance, the
layout of the shop (layout). Utilities in the shop contribute to the distinctiveness of
the shop there with competitors.
Service: is extremely important element of the brand. It is the interaction between
customers and employees, including sales staff responsible for keeping interactions
with customers.
Personnel: includes the style elements of the staff, the ability to communicate &

handling situations.
Store atmosphere: including architectural design, smell, sound, shop space. The
aesthetics of the store can improve the assessment of consumers on product quality
(Richardson et al, 1996).
2.4.2.2. Social image of the store
Social image of the store is described by CSR activities (Corporate social
responsibility). According to Carroll’s CSR pyramid (1991), there are four types in
order including economic, legal, ethical and philanthropic responsibilities. But the
consumer most concern on ethical and philanthropic (Garcia de los Salmons et al,
2005).
-

Economic responsibility: how the firm extracts part of profit and contribute to
society
Legal responsibility: the firm should run business legally ,


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-

Ethical responsibility : the firm should run in the field that contribute to society
Philanthropic responsibility: the firm treats the consumer and internal staff
with kindness and generosity.

2.4.2.3. Strategic image of the store
Strategic image of the store was implicated by 4 factors: innovation, the firm’s future,
the organization’s experience (as a sign of competence and safety), firm’s adaptation
to local culture. (Aaker, 1996)
2.4.2.4. Store personality

Store personality should be the complement for store image. First of all, Martineau
(1958) had defined the factor of store personality including layout and architecture,
symbols and colors, advertising, and sales personnel. Store personality implied the
mental trait that similar with human trait. The difference between store image and
store personality was nearly same as the difference between brand image and brand
personality.
Because as the mental trait, Alain d’Astous and Melanie Levesque (2003) defined
store personality have 5 sub-dimensions: Sophistication, solidity, genuineness,
enthusiasm, and unpleasantness. These five dimensions were developed from the
model famous brand personality of J. Aaker (1997) that consisted of (1) Sincerity:
Honest, cheerful, wholesome and down-to-earth; (2) Excitement: daring, spirited,
imaginative and up-to-date; (3) Competence: reliable, intelligent and successful; (4)
Sotistication: charming and upper class; (5) ruggedness: outdoorsy, tough.
Recently, by investigating department store consumers, Das et al (2012b) have
developed scales for store personality including five components: Sophistication,
vibrancy, reliability, authenticity and empathy.
2.5 Store Satisfaction
Satisfaction has often been regarded as an antecedent of store loyalty (Bitner, 1990).
Store satisfaction can be defined as the outcome of the subjective evaluation that the
chosen alternatives (the store) meets or exceeds expectations. This definition is within
the tradition of conceptualizations of satisfaction that are used in the product
literature. The basis for the definition forms the disconfirmation paradigm (Oliver,
1996). According to this paradigm, satisfaction is believed to occur through a
matching of expectations and perceived performance. In case, a consumer makes this
comparison, he or she elaborates on the evaluation of a store. In order to do so, a
consumer must both have the motivation and the ability to evaluate the store relative
to the reference point employed (Petty et al, 1983).
2.6 Store loyalty
Customer loyalty is considered as an important key to organizational success and
profitability. Loyalty has over the past decade become a crucial construct in

marketing, and particularly in the burgeoning field of customer relationship


26

management (Ball et al., 2004; Soderlund, 2006). Customer loyalty can be classified
into brand loyalty, vendor loyalty, service loyalty, and store loyalty (Dick and Basu
1994).
Firstly, loyalty was researched on individual brand and understood as behavioral
concept by Brown (1952-1953). Researchers focused on observing and measuring the
continuation of purchases in the past. Kuehn (1962) considered brand loyalty as a
function of purchasing history of customers. Lipstein (1959) stated that brand loyalty
was a function of probability of purchase of the same product or a function of time
for a specific brand. According to Jacoby and Chestnut (1978) loyalty is a biased
behavioral reaction of consumers in the choice of one among many alternatives in a
period of time and it can be represented as a function of decision-making process.
However, another tendency of attitudinal definition argues that store loyalty is store
preference or psychological commitment and more particularly, favorable attitude to
the specified store and operationally it can be measured future probability of purchase
(Oh, 1995). By this definition, we can know the process of psychological formation
of store loyalty but favorable attitude to specific store is not certainly converted to
real action to buy. Therefore, the marketing practitioners will have little practical
value if they define store loyalty in attitudinal approach.
Dick and Basu (1994) have developed a framework for customer loyalty that
combines both attitudinal and behavioral measures. Loyalty is determined by a
combination of repeat purchase levels and relative attitude. The framework illustrates
the loyalty conditions in which, loyalty, with its high repeat patronage and high
relative attitude, would be obviously be an ultimate goal for marketers. This definition
is very desirable since either favorable attitude or repetitive purchase alone cannot be
necessary and sufficient conditions of index of store loyalty and both must be

considered together in the light of consumers.
2.7 The relationship between store image, store satisfaction, and store loyalty
Customers’ patronage behavior towards a particular store is dependent on their image
of that particular store (Osman, 1993). The more favorable the store image, the higher
the valence of the store to the customer. The store image perception is directly related
to store loyalty, but rather an indirect positive effect on store loyalty through
consumer satisfaction. (Store satisfaction acts as a mediator) (Bloemer and Ruyter,
1998). If retailers manage the perception of store image, they can isolate consumers
from their competitors by building store loyalty (Osman, 1993).
The relationship between store image and store loyalty has been studied through two
directions. The first view is that store image attributes directly influences store
loyalty. The other is that store image itself affects store loyalty. Matineau (1958) also
argues that store image has an influence on store loyalty. The first direction was
considered to examine the influence of marketing/commercial image of store on
loyalty whereas, the second can explore the relationship between social, strategic