Marketing strategy for successful competition

TRÖÔØNG ÑAÏI HOÏC MÔÛ TP. HCM UNIVERSITEÙ LIBRE DE BRUXELLES

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB3

LEÂ THÒ HOÀNG HAÏNH

MARKETING STRATEGY FOR SUCCESSFUL

COMPETITION: A CASE OF SAIGON GROUND SERVICES

IN 2013-2016

TUTOR: DR. VO THI QUY

MASTER PROJECT

MASTER IN BUSINESS ADMINISTRATION

(PART-TIME)

Ho Chi Minh City

(2013)

i

COMMITMENT

I hereby, Le Thi Hong Hanh, confirmed that my thesis preparation and the content was

written by myself with information studied and obtained from reliable sources. I

undertake this is my own research project. All information, data and survey results are

true and never announce in any other research projects.

Ho Chi Minh City, 7 April 2013

Le Thi Hong Hanh

ii

ACKNOWLEDGEMENT

First and foremost, I would like to express my gratitude to the support and guidance

from my tutor, Dr.Vo Thi Quy who gave me her continuous guidance during doing the

final project. Without her, my project would not have been completed.

I would like to say thank you to:

- Professors from the Solvay Business School and Open University of HCMC for

all support throughout the whole program.

- Management Board of Open University Ho Chi Minh City who have provided

me a very good condition for studying and sharing ideas.

- All members of MBAVB3 and Group 1 who always encouraged me to share

during the study and implement the final project.

- Mrs Le Thi Thu Ha with her encouragement suggestion and enthusiastic help.

I am special thanks to Mr. Danh who is kindly enthusiastic about supported and

encouraged me throughout the dissertation process. No words could possible to express

deepest gratitude to my beloved family for their inspirational and moral support.

During executing the final project, due to the limitation of experience and knowledge, I

am unable to avoid some mistake. I hope the Professors could help me to improve for

achieving better results in the future.

Finally, I wish you good health and so much success in work and life!

iii

ABSTRACT

Established in 2005, Saigon Ground Services (SAGS) is a subsidiary of Airports

Corporation of Vietnam (ACV). After years of development efforts, SAGS becomes

the dynamic and professional provider of full - range ground services at Tan Son Nhat

International Airport (SGN).

SAGS ambition to become the leader in ground handling services with safety and

international standards, overcome one great competitor which has many years of

experiences - Tan Son Nhat International Airport Ground Services (TIAGS). SAGS

has been continuously improving service quality and applying modern aviation

technology to all operations in order to meet and exceed customers’ expectations.

The project firstly internally assessed company situation, come out what SAGS’s

competitive advantages, what SAGS’s weaknesses to figure out opportunities and

threats in ground handling service sector in Ho Chi Minh City. Following the internal

assess, a qualitative and quantitative survey were conducted to get information from

the market, understand market characteristic, its demand and SAGS’s target customers

needs for setting up marketing strategies for successful competition.

The project also did some research about SAGS’s competitors via external sources to

understand what they are doing well and not well, what is the direction of SAGS for

differentiation strategy should be.

Based on main findings, a proposal differentiation marketing strategies was chosen.

Some recommendations have then been suggested to grow sales and build up brand

name for SAGS.

v

TABLES OF CONTENT

COMMITMENT..........................................................................................................................i

ACKNOWLEDGEMENT..........................................................................................................ii

ABSTRACT.............................................................................................................................. iii

TUTOR’ C COMMENT............................................................................................................iv

TABLE OF CONTENT..............................................................................................................v

LIST OF ABBREVIATIONS................................................................................................. viii

LIST OF FIGURES ...................................................................................................................ix

LIST OF TABLES......................................................................................................................x

LIST OF PICTURE ..................................................................................................................xi

CHAPTER 1 - INTRODUCTION OF THE PROJECT

1.1. Introduction.......................................................................................................... 1

1.2. Statement of the problem..................................................................................... 1

1.3. Purpose of the project .......................................................................................... 2

1.4. Research methodology......................................................................................... 2

1.5. Scope and limitation............................................................................................. 4

1.6. Structure of the project......................................................................................... 4

CHAPTER 2 – LITERATURE REVIEW ...................................................................... 6

2.1. Marketing definition.............................................................................................. 6

2.2. Marketing strategy and Services marketing mix................................................... 6

2.3. Target consumer, market segmentation and positioning ..................................... 10

2.4. Competitive marketing strategy........................................................................... 12

2.5. Market Analysis.................................................................................................. 12

2.6. Porter Five Force................................................................................................. 14

2.7. Competitive advantages...................................................................................... 19

2.8. SWOT analysis.................................................................................................... 21

CHAPTER 3 – MARKET ANALYSIS AND RESEARCH FINDING....................... 22

vi

3.1. Market analysis ..................................................................................................... 22

3.1.1. Market size .................................................................................................... 22

3.1.2. Market growth rate ...................................................................................... 23

3.1.3. Industry cost structure .................................................................................... 26

3.1.4. Market trends................................................................................................. 27

3.1.5. Key success factors........................................................................................ 28

3.2. Porter Five Force................................................................................................. 29

3.2.1. The threat of entry......................................................................................... 29

3.2.2. Rivalry among the industry competitors ...................................................... 29

3.2.3. Threat of substitutes...................................................................................... 30

3.2.4. Bargaining power of suppliers and buyers.................................................... 30

3.3. Macro environment analysis - PEST Analysis .................................................... 31

3.3.1. Political .................................................................................................... 31

3.3.2. Economic.................................................................................................. 32

3.3.3. Social........................................................................................................ 32

3.3.4. Technology............................................................................................... 33

3.3.5. Legal......................................................................................................... 34

3.3.6. Geographic and demographic .................................................................. 35

3.3.7. Summary of company’s opportunities and threats.................................... 35

3.4. Micro environment analysis................................................................................... 36

3.4.1. Company overview .................................................................................. 36

3.4.2. SAGS’s customers ................................................................................. 38

3.4.3. Human resource ....................................................................................... 40

3.4.4. Marketing ................................................................................................. 41

3.4.5. Price policy .............................................................................................. 43

3.4.6. Financial ................................................................................................. 44

3.4.7. Investment................................................................................................ 46

vii

3.4.8. Research and development....................................................................... 46

3.4.9. Summary of company’s strength and weakness....................................... 47

3.5. Competitive capacity........................................................................................... 48

3.6. SWOT analysis.................................................................................................... 49

3.7. Result and discussion of customer survey ............................................................. 50

3.7.1. Qualitative research................................................................................... 50

3.7.2. Quantitative research.................................................................................. 51

CHAPTER 4 – MARKETING STRATEGY OF SAGS IN YEAR 2013-2016

4.1. Marketing strategy .............................................................................................. 59

4.1.1. Marketing objective ................................................................................. 59

4.1.2. Targeting, segmentation, and positioning................................................. 59

4.1.3. Competitive advantages strategy .............................................................. 61

4.2. Marketing Mix 7Ps............................................................................................... 61

4.2.1. Product – Services.................................................................................... 61

4.2.2. Price.......................................................................................................... 62

4.2.3. Promotion................................................................................................. 64

4.2.4. People....................................................................................................... 65

4.2.5. Place ......................................................................................................... 66

4.2.6. Process ..................................................................................................... 67

4.2.7. Physical evidence..................................................................................... 70

CHAPTER 5 – CONLUSSION .................................................................................... 72

REFERENCES & APPENDICES ................................................................................ 73

viii

LIST OF ABBREVIATIONS

AHM Airport Handling Manual

IATA International Air Transport Association

ICAO International Civil Aviation Organization

IGHC IATA Ground Handling Council

ISAGO IATA Safety Audit for Ground Operation

PIR Property Irregular Report

SAC Southern Airport Corporation

ACV Airport Corporation of Vietnam

SAGS Saigon Ground Services

TIAGS Tan Son Nhat International Airport Ground Services

SASCO Southern Airports Services Company Limited

SGHA IATA Standard Ground Handling Agreement

SLA Service Level Agreement

CAAV Civil Aviation Administration of Vietnam

CAA Civil Aviation Authority

SGN IATA 3 letter code of Tan Son Nhat Airport

HCMC Ho Chi Minh City