ContentsA. Introduction..........................................................................................................2

B. Main findings........................................................................................................3

I. The basic concept of marketing....................................................................3

1. Compare alternative definitions of marketing and explain the

importance of being a contemporary marketer for 1901 Hot Dogs......................3

2. Identify the main characteristic of a market orientated organization for

today’s modern businesses applicable to 1901 Hot Dogs...................................8

3. Identify the elements of marketing concept..............................................11

4. Identify and assess the benefits and costs of a marketing approach........12

II. The content........................................................................................................15

1. Identify and explain the macro and micro environmental factors which

influence marketing decisions affecting 1901 Hot Dog in Vietnam................15

1.1 Micro factors.............................................................................................15

1.2 Macro Factors...........................................................................................16

2. Segmentation.............................................................................................19

2.1 Business to business Segmentation.........................................................19

2.2 Business to customer Segmentation........................................................21

3. Factors which influence the choice of targeting strategy for 1901 Hot

Dogs......................................................................................................................22

3.1 Internal factors..........................................................................................23

3.2 External factors.........................................................................................25

4. Buyer behavior.............................................................................................27

C. Conclusion.........................................................................................................30

Reference..................................................................................................................31

1

A. IntroductionIt was at the height of the Asian Financial Crisis. The country was reeling from

the impact. Belts were tightened and many businessmen took conservative routes to

ride the crisis over. In the midst of this turmoil, two young entrepreneurs, Tengku

Rozidar and Ahmad Zakir, set up the first ever hot dog store in Sunway Pyramid,

Malaysia. The rest, as they say, is history. From the first pushcart, 1901 now has

grown by leaps and bounds with over 70 outlets by 2007.

In the first part, this report will provide some basic concepts about marketing,

including definition, characteristics of market organization, marketing concept as well

as the costs and benefits that this concept brings to a company which application to

real case study of 1901 Hot Dogs. Moving to next part, the marketing process of

1901 Hot Dogs will be explored deeply in term of business environment influenced

factors, segmentation, targeting strategy and buyer behavior affects marketing

activities.

2

Marketing

IdentifyingAnticipatingSupplying

Mutual beneficial exchangeFirm’s objectives

Firm’s objective

Customer needs

B. Main findings

I. The basic concept of marketing

1. Compare alternative definitions of marketing and explain the

importance of being a contemporary marketer for 1901 Hot Dogs

1.1Compare Alternative Definition of Marketing

In daily life, people often hear the word “Marketing” repeated a lot of

times and find that it is quite familiar. However, how many of them actually

understand what marketing definitely is. In fact, every researcher has their

own definition to the terminology “Marketing”, based on what they consider

what marketing is actually about.

Figure 1. Arriving at a definition of a marketing

According to Philip Kotler, “Marketing is defined as a social and

managerial process by which individuals and groups obtain what they need

and want through creating and exchanging products and value with each

other.” In this definition, Kotler focus on creating and exchanging process in

order to basically meet with human needs (the state of felt deprivation) and

wants (the form taken by human needs as they are shaped by culture and

individual personality). Furthermore, these processes are based mostly on

3

social and managerial grounds in which people only charge what they feel

value and satisfy their requirements.

In another way, Chartered Institute of Marketing “Marketing is the

management process which identifies, anticipates and supplies customer

requirements efficiently and profitably”. In contrast with Kotler’s definition,

CIM’s definition defined Marketing as a term to describe a broad scope,

diverse from initial trying to identify what the customer’s needs are as well as

discover how to meet with these needs in short - term. Moreover, in this case,

the definition emphasizes mostly on the important of customers that satisfying

customer’s needs as an essential duty of company in long – term business. In

other word, the product or service of the company is not only have to help

customer achieve what they wants but also benefits or added value. On the

other hand, the American Marketing Association considers Marketing in more

complex and comprehensive way rather than Mr. Kotler and CIM’s definition.

In their dictionary, “Marketing is the process of planning and executing the

conception, pricing, promotion and distribution of ideas, goods and services to

create exchanges that satisfy individuals and organisation”. In this definition,

the involvement of ranged stages involve in marketing process in order to

bring benefits not only for customers like in CIM’s definition, but also the

companies as sellers. Therefore, the definition focuses deeply on the

relationships between the buyers and the sellers in term of win – win

relationship, in which both sides gain added value from exchanging.

In my perspective, marketing is a management process which includes

a number of strategies and tactics in order to create benefits for both

customers and companies, based on the strong relationship that is built

between them. In other word, through marketing, companies brings added

value to satisfy customer’s demands, and capture value from them in return.

I.1. Importance of being a contemporary marketer

According to Business Dictionary, marketer is defined as a person

whose duties include the identification of the goods and services desired by a

set of consumers, as well as the marketing of those goods and services on

behalf of a company. In fact, the market is a highly scrutinized environment

4

which always experiences a lot of changes day by day, due to the incessant

change in customer’s demand. Therefore, a modern marketer has to cultivate

his necessary skills in order not only to adapt with these changes but also

fulfill his work effectively. In this case, a normal question of “Where are these

importance skills?” is raised. Basically, a modern marketer have to

understand clearly about business core skills such as solving problems or

working with other people in general and marketing concepts, application as

well as its impacts in specific. Furthermore, modern marketer also has to have

basic technology savvy and always update information.

In fact, the biggest differences between traditional and contemporary

marketers are on marketing’s philosophy that they follow. In the traditional

perspective, marketing only focus on company’s benefits instead of customers

as well as their satisfaction. It leads to the fact that some people mistakenly

understand that marketing only has advertising and selling which focus on

selling product as much as possible in order to achieve great profit. On the

other hand, contemporary marketers always try to identify customer’s need

and wants; and how to satisfy their demand as well as bring those benefits.

As a result, a durable relationship between customer and company is built

and maintained based own satisfactory of both sides and belief in each other.

Moreover, when customers felt satisfy, they will come bake to goods and

service of company. It not only help the company has loyal customers but also

a stable earnings that it can maintain the market share in long – term.

Furthermore, in recent years, marketing has experienced an evolution, in

which marketing is moving away from mass marketing toward one – to – one

and one – to – many communication principles. Obviously, contemporary

marketers are marketers who catch, understand and use these modern

marketing kinds such as viral marketing, networked marketing, search

marketing and direct marketing in most effective ways. Therefore, they can

take absolutely all advantages of new technology to minimize the cost, but still

brings convenience to the customers. As a result, the question “Who are the

winners and losers in modern marketing?” has found its answer. The

contemporary marketers with their own advantages will take over traditional

marketers. As a result, being contemporary marketers appears vital not only

5

to people who are working in marketing but also for the company in the

modern day.

Applying to Vietnam scenario, being contemporary marketer is become

more and more important especially when Vietnamese economy develops

incessantly in dynamic way. In 1986, Vietnam Government decided to perform

Doi Moi policy in which Vietnam’s economy change from subsidization to

market. Before this time, there is no such position to marketer due to the fact

that government controls all trading activities. After that, along with the

growing of market economy, working as a marketer is become more and more

popular. Actually, in long period of time, marketing appeared as a “hot” job

and attract a lot of attention. However, until the theories of modern marketing

was applied and work effectively, marketers is become more complex job that

require a lot of skills as well as perfect practical and keen mind. Moreover, the

rain – storm development in technology in Vietnam recent year also brings

customer more chances to explore information as well as choose suitable

products for their demand, make them become erudite customers. Therefore,

marketing become not a high - salary but also fierce – competition job which

require marketer have a wit and creative mind. In order to satisfy the customer

demands and making benefits for both sides, all things the marketer should

follow are contemporary marketing theories.

For 1901 Hot Dogs, like other companies, the key for 1901 Hot Dogs to

live in Vietnam is how to satisfy needs of clients. So, marketing is a very

importance part of marking profit. Things that the contemporary marketers of

1901 Hot Dogs have to complete are to solve the matter of: product, price,

place and promotion. In my view, there are three interests that 1901 Hot Dogs

can get when the contemporary marketers expand market into Vietnam.

These are: recognizing suitable products, raising revenue by saling products

and affirming brand.

At first, recognizing suitable products is important. By analyzing market, a

contemporary can gather information from customers such as: their taste, their

favorite foods, etc. From this, they can make menus and combos that are fitting

for Vietnamese. Hence, these products of 1901 Hot Dogs can be popular with

Vietnamese more than other products of other companies. One strong point of

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1901 Hot Dogs is Vietnamese like fry or stir-fry food. So Hot Dogs are totally

fitting with Vietnamese’s taste.

Secondly, raising revenue by saling products depend strongly on

pricing. This thing is very important because it is the key that decide the

success of 1901 Hot Dogs in Vietnam. Vietnam is still a developing country,

so giving an affordable price either is a way to raise revenue or help 1901 Hot

Dogs to approach more customers. It also is the mission of a contemporary

marketer. Besides that, products of 1901 Hot Dogs can be more popular if

they apply some kinds of advertising through TV, magazines, newspapers, or

radio.

The final importance of contemporary marketers is that it helps 1901

Hot Dogs to affirm its brand. It is the vital problem if 1901 Hot Dogs want to

survive long-term in Vietnam. It can be fulfill if Hot Dogs continuously

concentrate on upgrade its products and improve service behaviors of staff.

These things will increase the number of loyal customers and equal benefit of

company and customers. Also through expanding market into Vietnam, 1901

Hot Dogs can have the chance to identify and understanding many things

about competition such as ways to attach buyers, what are the strong points

and weak points of 1901 Hot Dogs and which way to overcome these

disadvantages, etc. Furthermore, 1901 Hot Dogs can have ability to compete

other famous brand such as: KFC, Lotteria, and McDonald.

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2. Identify the main characteristic of a market orientated organization for

today’s modern businesses applicable to 1901 Hot Dogs.

There are four main characteristic of a marketing orientation: ( As

shown in the table above)

- “Product Orientation describe a company which make what it thinks the

customer will buy”

- “Customer Orientation according to Professors Peter Loos of Chemnitz

University of Technology is a central theme in literature. Nevertheless it

gives the impression that comprehensive and individual customer’s needs

are not covered. Normally the customer receives individual products and

services which are not integrated. At this point we ask specifically how

these customer needs can be handled. We answer the question by

focusing the possibilities of internet based markets and internet-driven

virtual value chains. First of all we define parameters to measure the

customer orientation from the perspective of the customer. Existing

parameters discussed in the literature only focus the perspective of the

seller. In a second step we transfer the parameters in a matrix which helps

us to classify the customer orientation. Based on this matrix we discuss

suitable production concepts to supply the range of customer-oriented

products and services. As a result we note that the traditional crafted

customization can not produce self allocatable individual and complex

outputs, i.e. an integrated bundle of customized products and/or services

to satisfy a comprehensive and individual need. We present an internet

8

Customer - centered

No Yes

Competitor

- centered

NoProduct

Orientation

Customer

Orientation

YesCompetitor

OrientationMarket Orientation

business model to create an adequate solution. This business model uses

the internet technology to realize value chain and supply chain activities

between different actors and an intermediary who coordinates the

network.”

- “Market Orientation are defined as a company philosophy focused on

discovering and meeting the needs and desires of its customers through

its product mix. Unlike past marketing strategies that concentrated on

establishing selling points for existing products, market orientation works in

reverse, attempting to tailor products to meet the demands of customers.

In essence, market orientation can be thought of as a coordinated

marketing campaign between a company and its customer”

Normally, businesses have different operation orientation, based on

where they place consumer in the marketing process for companies who

follow marketing orientation, satisfying customer’s needs and wants while still

making profit appears as the central working philosophy. In contrast with

production orientation, marketing orientation focuses on the needs of the

buyers instead of sellers.

However, everything has two sides, and market orienting is not a

special exception with its own advantages and disadvantages. On one hand,

the product is produced and provided due to customer needs and want. As a

result, company should focus on determining how to satisfy their customer by

exploring customer’s behavior and consumption trends and produce goods

suitable with their demand. It is expressed on R & D projects of the

companies. Secondly, collecting information from customer before and after

using products help company understand partly their customer as well as

using trend, which enables them to communicate effectively with the

customer. On the other hand, the customer provide company their valuable

feedbacks on products and services, which helps the company improve

quality, design, etc of in order to satisfy customers in highest level. Finally, the

high satisfaction from the customer also builds a strong relationships between

customers and company in a long – term, hence, the company has chance to

maintain a stable earnings every year and keep their market share.

9

On the other hand, On the other hand, company also has to face to

some disadvantages when they follow marketing orientation philosophy.

Firstly, because the fact that company running mostly to satisfy customer

need, they have to invest a lot of money on extensive researches to explore

the customer’s needs and wants. Therefore, it also leads to other problems

when the company has to pay a high costs and waste lots of time includes the

period to delay for product to market. Secondly, company can face trouble

with “me-too” products, in case their competitors can sell the same product

with the considerable cheaper price by not having to waste money and time to

research the requirement of consumers and develop their products. Finally,

the marketing orientation centralize on the customer’s needs and wants,

hence, the company have to pay high – leveled attention to the changing of

their customer behavior, if they do not want their products become tomorrow’s

throwaways. This fact also brings company the high cost of researching

customer’s requirements whereas company always pays attention to the

buying behavior may change their objectives.

Apply to the case, 1901 Hot Dogs also can supply this method

successfully. By define the value of its own products, expect on the

requirements of customers, products of 1901 Hot Dogs can occupy Vietnam

market stably and continuously. Once products of 1901 Hot Dogs have

already occupied Vietnam market, it can have ability to compete with others

brand which are very famous in Vietnam now like: KFC, Lotteria.

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3. Identify the elements of marketing concept

Figure 2. Model of core marketing concepts

As the model above, the core marketing concepts included five main

elements linked together in an enclosed cycle: Needs, wants and demands;

marketing offer; value and satisfaction; exchange, transactions and relationships;

and the market. In the next part, every element will be indentified both in

separation and relationship with other elements, as well as the application in

1901 Hot Dog case study.

Needs, wants and demands: According to Philip Kotler, needs is defined

as the states of deprivation including physical (food, clothing, warmth and

safety), social (belonging and affection) and individual (knowledge and self

- expression) deprivation. Develop from this definition, Kotler identify wants

under a form that human needs take as they shaped by culture and

individual personality. In addition, when the human wants backed by

11

Needs, Wants and Demands

Marketing Offer (goods, service or

experiences)

Value and Satisfaction

Exchange, transacions and

relationships

Market

buying power, it becomes demand. Therefore, a product should be created

based on human needs and wants.

Marketing offer: Marketing offer are combination of products, services,

information, or experiences offer to a market to satisfy a need or wants.

Normally, when the companies identify and discover what their target

consumers needs and wants, they will provide products under marketing

offers to seek for consumer satisfaction.

Value and satisfaction: Actually, from creating and exchanging process,

win – win strategy is applied. In this case, the consumer is satisfied when

marketing offer meets with his demand. On the other hand, the company is

also satisfied when their marketing offer is accepted and bring them

customer means profit and earning. Furthermore, it also helps them create

belief and loyalty in consumer, which is very valuable for them in long –

term business. For both sides, they bring each other satisfaction with

benefit and added value.

Exchange, transactions and relationships: Exchange is defined as the

act of obtaining a desired object from someone by offering something in

return. On the other wore, the exchange occur when the demand of

consumer meet with the supply of seller in order to achieve benefit.

Market: Market is the set of actual and potential buyers of a product or

service. In the market, products, service and experience are exchanged to

bring benefits and satisfy both two sides: buyers and sellers. Furthermore,

the changing in market indicates the changing in trend of consumption. As

a result, through exploring and studying market carefully, the company can

give out marketing planning in which not only satisfy the consumer’s needs

and wants effectively but also orient their needs and wants follow

companies’ desire in long – term (trend setting).

1901 Hot Dogs have to focus on customer orientation because Vietnam’s

market doesn’t like other market. A symbolic example: although Vietnamese

like eat fry-foods and stir-fry foods, they already take care of their health. On

one hand, actually they really want to eat these foods. On the other hands,

they worry about their health because fry-foods and stir-fry foods have too

much oil. So, if 1901 Hot Dogs can’t find any solutions to fix this problem, the

12

foods of 1901 Hot Dogs can be no longer belong to favorite foods of buyer.

The buyer will find other foods of other companies that are not only

guaranteed about quality but also popular with them. The revenue of 1901 will

be fall down rapidly. Worst, 1901 can be bankrupt in Vietnam’s market.

4. Identify and assess the benefits and costs of a marketing approach

In Vietnamese scenario, 1901 Hot Dogs should follows marketing

orientation in which they approach the market by focus on customer, instead

of product at central place in marketing strategy and activities. However,

everything has two sides, and this marketing approach brings not only

benefits but also considerable costs for the company.

As a foreigner Fast food company, 1901 Hot Dogs will have to

exploring the market in order to identifying the customer who defined as

purchaser of a product or service is not out of this process. In Vietnam there

are more than one fast food services, but one advantage 1901 Hot Dogs is

none of its competitor selling hot dogs, they only selling fried chicken, and

hamburger (KFC, BQQ chicken, etc…). But come along with advantage there

always a disadvantage, customer are afraid of trying something new unless

that new products it’s a break through. In order to have this “ Break-through”,

1901 Hot Dogs will have to a lot of research in both market and Vietnamese

cultural. For example, McDonald’s is the most successful brand in the world,

not only in the revenue but also in the reputation and the quality of food, but in

Philippines McDonald’s had lost most of the market share to Jollibee. The

main reason for Jollibee successful is that Jollibee had done a good market

investigation. It is proved in every entree, Jollibee put rice in it, and the food is

similar to what “ a Filipino mother would cook at home” and is designed “ to

suit the Filipinos palate”. 1901 Hot Dogs should use some marketing

approach that have been borrowed from other fast food company such as

KFC. When a some one rush in 1901 Hot Dogs, he/she will prefer a fast,

cleanliness, and affordable services rather than waiting in a old fashion long

line. Obviously, the satisfaction brings loyalty of customer to the company.

Furthermore, it leads to cross – selling opportunities in which explosive growth

13

in sales or spread of product information though customer contact1. For

example, a loyal customer can introduce the brand to other people or provide

positive comments on the Internet for the company. Normally, the customer

tends to trust on what experience consumers said, instead of company’s

advertisement. In other words, taking advantage of loyal customers is one of

the most effective ways to attract other customers in order to achieve their

satisfaction and loyalty. Moreover, by establish long lasting relationship with

loyal customer, the company might reduce the extra cost on looking for

customer and marketing campaigns. In long term, it does not only help 1901

Hot Dogs gain earning from loyal customer but also remain and expand

market share.

Image 1. Viral Marketing through customer’s contact

However, going along with benefit is the cost that 1901 Hot Dogs has

to face with when they decide to enter Vietnamese market. Firstly, when the

company chooses marketing orientation approach and centralizes customers,

it has to spend a lot of money on research and development projects to

understand market as well as customers. Moreover, keep existing customer

1 http://www.businessdictionary.com/definition/viral-marketing.html

14

retention as well as gaining potential customer also make up a considerable

amount of money, including after – selling services and PR campaigns. In

case 1901 Hot Dogs lose its customer, many serious consequence can

occurs, effect negatively on company’s profit and operations. Secondly, when

customer is the central of marketing process, every product is produced and

provided based on what they need and want. Furthermore, the taste of

customer not only changes incessantly day by day but their requirements are

also rising. As a result, company also have to focus on quality movement in

order to satisfy customer in the highest level.

15

II. The content

1. Identify and explain the macro and micro environmental factors

which influence marketing decisions affecting 1901 Hot Dog in

Vietnam.

1.1 Micro factors

Microenvironment consists of the factors close to the company that affect its ability to

serve its customers: the company, suppliers, marketing intermediaries, customer

markets, competitors, and publics in general. These factors, as known as

stakeholders, are classified under 3 main categories including internal (within

company), connected (suppliers, intermediaries) and external stakeholders

(competitor, public) in order to explore the effect of them on strength and weakness,

opportunities and threats of the company.

Strength: The first strength of the company lies in the international brand

that 1901 Hot Dogs has already built. Particularly, a considerable part of

Vietnamese people assume that foreign products often own quality over

domestics one. As a result, the entering of foreign especially international

brands into Vietnam are welcomed and appreciated in a warm way. In

addition, the experience as well as the international fame of 1901 Hot Dogs

brand appears as an advantage for the company when they confidently

build initial image with high – level products.

Weakness: The main weakness of 1901 Hot Dogs is that they don’t have

the proper marketing strategies. Even though, 1901 Hot Dogs has become

an international brand but 1901 ‘s products are not very popular in Vietnam.

Another points is that, information about 1901 are only available in limited

source such as 1901 Hot Dogs and Facebook, this mean 1901 didn’t exploit

the full potential of mass media. This could be the worst critical situation if

1901 want to join Vietnam fast food market.

Another weakness is 1901 Hot Dogs has a lack of toys that come with kiddy

meals while its competitor like KFC has every chicken action figure in each

16

of its kiddy meals. This encourage the young age customer to urge their

parent to buy KFC’s products.

Opportunities: Despite the weakness which was mentioned above, 1901

Hot Dogs still has it own opportunities that none of its competitor has. For

example, 1901 Hot Dogs is the first fast food company in Vietnam that sell

hot dogs, so it'll have the privilege of being the first company to step foot in

hot dog business in Vietnam.

Threat: How ever, being the first isn’t always good, everything has it two

sides, if 1901 did not do well in market research, it could lose market shares

in its own area or worst being over throne by a new comer who did well on

customer research.

1.2 Macro Factors

Major external and uncontrollable factors that influence an organization's

decision making, and affect its performance and strategies. These factors

include the economic, demographics, legal, political, and social conditions,

technological changes, and natural forces2. Normally, the macro environment

factors are analyzed under PEST formula (Politics, Economics, Society and

Technology).

Politics: Firstly, Vietnam is considered as a safety investment place for

foreign country based on its political stable. Therefore, it can ensure that

there is no consideration religious conflict, terror attacks or unstable politics

can affect the company’s running in both long – term and short - term.

Moreover, the stable of politics enable residents to live peaceful and have

time to care about both physical and spiritual life. As a result, there will be a

potential opportunity for 1901 to approach the customer and help them to

satisfy their spiritual demand in return of earnings and frame.

Secondly, Vietnamese government has had positive policy in order to attract

foreign companies invests and run business in Vietnam. Moreover,

Vietnamese government focuses on attracting FDI (foreign direct

investment) as one of the main sources for economic growth. From this

direction, the government provides a considerable number of policies to

encourge foreign investors to pour capital in Vietnam.

2 http://www.businessdictionary.com/definition/macro-environment.html

17

Economy: In term of economy, 1901 Hot Dogs products’ is put under label

of luxury goods which defined as one which has income elasticity larger than

one3. In fact, the price of company’s products range from 59 000 VND to

millions VND, which is pretty high to middle income in Vietnam in

comparison with lovely and lacey gift market. According to statistics from

GOS (general office statistics), the income of Vietnamese people increase

incessantly year by year from $403/person to $1080/person, in spite of the

economic influence under global economy recession in 2008.

In recent years, the economics of Vietnam maintains developing despite of

being influence significantly by global economic recession. According to the

statistics of General Statistics Office, GDP (Gross Domestic Product) in

nine months of 2010 was estimated increasing by 6.52% as compared to

nine months in 2009, of which it rose by 5.83% for 1st quarter; by 6.4% for

2nd quarter and by 7.16% for this quarter. This was a rather high growth as

compared to that of 4.62% in the same period last year.4 Furthermore, the

October’s CPI rose by 1.05% against the previous month5 while the retail

market in 2009 reached 66 billion. These statistics above indicate a lighten

potential market that always open the door to welcome the international

brand like 1901 Hot Dogs enter.

However, the whole economy is under unstable situation. Budget deficit

stand at 9% in 2009 while inflation is still remain high year by year.

Moreover, the USD exchange at black market rise higher and higher effect

considerably in import expenses which can influence on products’ price of

1901 Hot Dogs.

Social: Firstly, Vietnam is a multi – religion country but no one of them

becomes national religion. Thus, the religion factor does not have much

significant influence on 1901 Hot Dogs business. In other words, unlike

Islam countries such as Israel or Saudi Arabia, the company does not have

to care about religion elements in their products. It also help the company

save a consider amount of money in customers’ explored projects.

3 http://www.lse.co.uk/financeglossary.asp?searchTerm=&iArticleID=2093&definition=luxury_good4 http://www.gso.gov.vn/default.aspx?tabid=622&ItemID=105055 http://vneconomy.vn/2010102305201231P0C19/cpi-thang-10-tang-cao-nhat-trong-15-nam-qua.htm

18

Secondly, the culture factors have influenced on every foreign firms which

desire to operate in Vietnam because of its direct effects on customers

buying behaviors. With Vietnamese people, gifts are a special message

between people and people and granting gifts has become a culture feature

which has passed from generation to generation. Furthermore, Vietnamese

young generation these days has an open view and they mostly feel

comfortable to accept new international brand. As a result, 1901 Hot Dogs

with its unique products has opportunities to conquer the potential market of

Vietnam.

Technology: Within 20 years, there is a tremendous jump in manufacturing

industry in Vietnam that transform from handmade manufacturing sector to

mass industry in industrialization and modernization orientation. Therefore,

this development enables the companies to increase productivity effectively

while reduce manufacturing time, labor costs as well as some miscellaneous

expenses. This mean instead of import high quality hot dog from Malaysia,

1901 can build a factory an produce same quality Hot Dogs right in Vietnam,

this will save 1901 a lot of money in import tax, storage and transportation

fees.

Furthermore, the 21st century is marked by the Information Technology’s

explosion with the Internet and Social Network. In this case, Internet appear

as a effective tool in order to help 1901 Hot Dogs approach the customer,

especially in marketing and PR campaign which bring information to

customer in a convenient and quick way. For example, 1901 Hot Dogs can

attract potential customer by designing a lovely and informative website,

using advertising banner on popular websites and forums such as Zing

forum. Moreover, the social network seems to be a potential place to spread

the information effectively. Through Facebook or Twitter, all both positive

and negative comment from customers and consumers about 1901 Hot

Dogs products are spread away as a trustworthy information to other

people, especially when contemporary wise customers tend to goggle (using

Google to look up information) everything before deciding to buy product or

not. Therefore, the development in IT brings not only opportunities to gain

19

customer and build long – term relationships with them buy brings brand and

customer closer, but also threats when company have to maintain the

quality of every unique product.

2. Segmentation

Market Segmentation is defined by Philip Kotler as the subdividing of a market

into distinct and increasingly homogeneous subgroups of customers, where any

subgroup can conceivably be selected as a target market to be met with a distinct

marketing mix. In modern marketing business, determining a reasonable

segmentation does not only help the company serve and achieve the customer’s

satisfactory better but also minimize unnecessary cost. Moreover, the segmentation

plays important part on raising company competitive ability.

2.1 Business to business Segmentation

2.1.1 Micro Segmentation based

Once 1901 Hot Dogs desire to enter the market with Business and

business segmentation, the vital thing they have to care carefully about is the

organizational based in order to plan targeting strategy in the most effective

way

Size of Organization: In fact, all of 1901 Hot Dogs’ competitor are choosing

big place for their organization just for a few simple reasons. First, bigger

place can serve more customer. Second, a big place can attract more

potential customer. For example, if a customer walk by a big fast food store

with crowded people, colorful decoration, the first thing will come to his mid

is this is a famous brand which is selling good stuff, and the price is

affordable with high quality service. Therefore, as the big investor from

Malaysia to Vietnam, 1901 Hot Dogs should take great consideration in

choosing area with high competition.

Product: In this case, the retailers, especially super market are the main

targets segmentation that company should consider. In addition, a

wholesale price is one of the attractive things to these supermarket.

20

2.1.2 Macro Segmentation based

Buyer – seller relationship: The buyer and seller relationships mostly

focus on how different as well as similar between 1901 Hot Dogs and its

partners’ value. In other word, this relationship bases on the understanding

value between the two sides. By exploring and satisfying the customer value

and demand, the company will build a strong relationship that brings loyalty

of customers in long term.

Technology: The development of a technology brings 1901 Hot Dogs

chance to maintain the relationships with existing business customer and

build new with others. Moreover, the technology support the company

perfectly in designing which is can be suitable with every organization

customer’s characteristic and demand. In the website of company, 1901 Hot

Dogs provide chance to customer to feedback toward products as well as

services, however, the interaction between the company and customer is

still limited.

Buying decision process: In some case, the supply of 1901 Hot Dogs

does not match with the demand of customer in term of size. Therefore, the

company has to decide whether deal with the partner or not. If the exchange

occurs, 1901 Hot Dogs will have to consider carefully about the number of

products which is enough to provide the rest of market, or wait until enough

products imported from Malaysia.

Policies: The marketing policy of 1901 Hot Dogs also has influence on

segmentation. In business to business segmentation, the discount and after

– selling play an important part in keeping the relationship stays with the

company. As the report mentioned above, for example, the discount policy

based on the number of products purchased can appeal the big partners

when they have to wait until their order imported to Vietnam.

Decision making unit: Decision making unit or DMU is defined as a group

of people in a company or organization involved in making an important

decision, especially decision to buy something6. As a result, the voice of

DMU in a company has a big influence and effect the organization partner in

6 http://lexicon.ft.com/term.asp?t=decision_making-unit

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particular way. Thus, 1901 Hot Dogs should invest on explore the DMU’s

behavior in order to achieve and satisfy customer who are organizations.

2.2Business to customer Segmentation

2.2.1 Geographic segmentation

Geographic segmentation divides the market into different geographical

units such as nations, regions, states, counties, or cities. The Vietnamese market

is divided into three main submarkets: northern, center and southern regions; the

culture and behaviorism of resident in every region have the different unique

which also leads to difference in buying behavior.

We can divide Vietnam into two main markets according to life style criteria:

Southern market and Northern market. There are many differences between two

areas. Vietnamese who live in the South have an impartial life. They usually

spend all of their money in anything they like and don’t care about how much they

have purchased or what is the price of goods or services they like. Because of

this generous life style, 1901 Hot Dogs can open some outlets in entertainment &

cultural centres, supermarkets, etc in order to attract more customers and pricing

products in high price. However, this price should not too high because

Vietnamese income is still low. In comparison with the Southern people, Northern

people tend to live simply. They usually save their salary to other bigger

purposes. So, 1901 can price products in Northern market lower a little bit versus

Southern market. 1901 also can increase the revenue by applying some

promotions. This may be help 1901 company reach to the highest interest.

2.2.2 Demographic segmentation

Demographic segmentation divides the market into groups based on

variables such as age, gender, family size, family life cycle, income, occupation,

education, religion, race, generation, and nationality.

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2.2.3 Psychographic Segmentation

Psychographic Segmentation divides buyers into different groups based on social

class, lifestyle, or personality traits. Vietnamese customer has a preconception that

eating outside for lunch or dinner usually cost more than what you can cook at home

but the truth is eating out make you spend a big of money at one moment but with

that same amount of money you can just buy the ingredients to cook at you. May be

this is a problem of 1901 Hot Dogs. Although each combo of 1901 is about 45,000

VND, cheaper than products of competitors like KFC, BBQ. It still high for student

and people with low income. There is a real that the income of Vietnamese is

improving but it is still very hard for 1901 to compete with other famous brands. The

best solution for this problem is to segment market into two groups: employment and

unemployment. By this way, the requirement of each group can be complete easier.

2.2.4 Behavior Segmentation

Behavior Segmentation divides buyers into groups based on their

knowledge, attitudes, uses, or responses to products. The behavior segmentation

can be chosen by some main factors: occasions, benefits sought user status,

usage rate and loyalty status.

3. Factors which influence the choice of targeting strategy for 1901 Hot

Dogs

In order to build the achieved both B2B and B2C segmentation, every

companies have to determine where the suitable targeting strategy is, and 1901 Hot

Dogs is not a special expectations. With Vietnamese market, there are both internal

and external factors that influence significant in the company’s choice.

3.1Internal factors

As mentioned above, there are three internal factors that affect directly the

choice of marketing strategy. They are: company resource, product life-cycle and

product variability.

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Company resource: In terms of company resource, there are 2 kinds of

resource that 1901 Hot Dogs must consider when joining in Vietnam market

are human resource and financial resource. For sure that 1901 Hot Dogs

mustn’t care about lack of human resource because labour resource of

Vietnam is very profuse. However, the problem here is the professional

qualification of Vietnamese labour is still limited. Therefore, 1901 Hot Dogs

need to rent more staff in order to increase the effect of working or delegate

Malaysian managers to check the quality of foods and services, combine

with giving supports for Vietnamese staffs. About financial resource

problem, 1901 Hot Dogs can invest more on marketing strategies. However,

if 1901 doesn’t really confidence about finance of company, it can focus on

potential markets first in order to improving financial problem. After that 1901

should open more outlet to increase interest. In Vietnam, there are two

potential markets that 1901 Hot Dogs should concentrate on is Hanoi capital

and Ho Chi Minh city. There are many differences between this two markets

about life style, habit, buying behaviour, etc. Hence, 1901 should have

marketing strategies that are suitable with each market to increase the

revenue of company. Normally, if companies want to be successful fast,

they usually focus on this two markets first.

Product variability: We can understand product variability is way that the

firm can develop in order to attract many people from different groups of

market. In addition, the taste of customer is not the same every time. It

change rapidly. So, in order to satisfy the needs and wants of customer

perfectly, companies have to have products with variety of styles and

designs. Of course, the quality of product have to keep at the same level or

more after improving product. 1901 is famous for many kinds of delicious hot

dogs that customers will have opportunities to choose the most appropriate

meal. However, 1901 still must change their foods continuously and create

some new foods to make customer feel excited with the taste of new foods.

Not all of new foods are suitable with Vietnamese taste. So, 1901 should

focus on customer research and try to follow trends that change quickly in

Vietnam market. In addition, 1901 also need pay attention on loyal

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customers by maintaining signature products to claim the differences with

other companies.

Product life-cycle: The final internal factors is product life-cycle. This

process includes four stages: Introduction stage, growth stage, maturity

stage and final is decline stage. Please look at this chart below.

We can realize clearly that the requirements about one product will be

declined after market reach to the full maturity. In the scenario of 1901

Hot Dogs, its products had been successfully in Malaysia, Singapore and

Indonesia for many years. However, foods of 1901 Hot Dogs are still one

of the most favourite of many people. In Vietnam market, products of

1901 have not appeared yet. This is the causes of low awareness of

Vietnamese about 1901’s foods. So, we can identify that products of 1901

are in the stage of growing. In order growing more in Vietnam market,

1901 Hot Dogs should have a suitable marketing strategy, taking fully

advantage of mass media, combine effectively between advertising on

TV, radio and newspaper and magazines. This result also means 1901

Hot Dogs will have to invest more money on advertising in order to be

more popular in Vietnam market. However, with the advantage of 1901 is

hot dogs, a new kind of fast food in Vietnam market, 1901 have enough

ability to compete other companies.

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3.2External factors

Factors that come from outside affect the choice of marketing strategy include

market variability and competitor’s marketing strategies.

Market variability: Market variability could be understand as the needs

and wants of customer. In some way, it is quite the same with market

segmentation. Because Vietnamese customers have different tastes and

preference, 1901 Hot Dogs must recognize exactly what are the

requirements of each group of customer. Therefore, it is appropriate for

1901 to make some different marketing plan in order to satisfy each group

of customer more perfectly. Moreover, 1901 also can take advantages of

unique products of 1901 which had made successes for 1901 to suppose

for marketing maintains.

Competitor’s marketing strategies: Taking about competitor, it is

claimed that this is an important factor which can decide whether

company can get interest or not. In Vietnam market, there are two biggest

competitors of 1901 are KFC and Lotteria. These two brands had done

business in Vietnam for a while so they have some specific advantages.

They have many outlets in many populous areas with modern facilities. In

addition, their brand is well-known as the best fast food in Vietnam

nowadays. However, 1901 also had its own advantages. The brand of

1901 Hot Dogs had been allowed as an international brand. 1901 itself

had got many successes when being established in Malaysia and

expanded in Singapore and Indonesia. The problem of 1901 Hot Dogs is

competitor’s marketing strategies hold almost whole market in Vietnam

and it seem to be hard for 1901 to run business in this market. However,

hot dogs is a new kind of fast food in Vietnam market nowadays. 1901

should have marketing strategies that concentrate on drawing people who

would like to eat hot dogs. Gradually, people will recognize that the

conveniences of hot dogs in comparison with other fast foods and the

revenue of 1901 Hot Dogs will be improved. In some situation, 1901 Hot

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Dogs can also apply some sale off programmes to compete KFC and

Lotteria more effectively.

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2. Buyer behavior

From the perspective of customer both individual and organization, the

buying process is expressed through SPR model. Firstly, customers waken up

by stimulus under influence of culture, social, peer group and marketing

mixture from the suppliers. Therefore, a process occurs to satisfy this stimulus

which affected significantly by psychological and physiological factors,

perceptions and feelings. The model ends with the respond of customer; and in

the modern, individual or business customer buy and use product with attitude

and belief. In order to giving out an effective marketing plan with appropriate

marketing activities, every company has to understand this process as well as

the effect of each stage on marketing activities.

Figure. The SPR model

Consumer behavior can be defined as the decision processes and acts of individuals

involved in buying and using products or services. As the process below, customer

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Stimulus

CultureSocial InfluencesReference groupMarketing Mix

Proces

s

Psychological FactorsPhysiological factorsPerceptions and feelings

Response

Attitude and beliefsBuying BehaviorBuying Practise

buying process consists of five stages, and each stage effect marketing activities in

different way.

Figure 3. Customer buying process

Problem recognition: When a person recognize the he lack of

something and needs to have it to fulfill his deprivation, he will find the

way to solve the problems. In fact, there are many factors effect on the

first stage, including personal factor and psychological factor. In order

to understand needs and want, the an indispensable model of

Maslow’s pyramid of hierachial appears as the most reasonable

explanation.

Image 2. Maslow’s Hierarchy of Needs

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Problem Regconition

Information search

Evaluation of

alternatives

Purchase Decision

Post purchase behavior

Information search: Normally, when people recognize what they need,

they will seek information to solve out their problem in the most effective

way. In recent year, Internet with Google appears as the most convenient

sources to looking up for multi - aspect and diversified information, beside

traditional sources such as newspapers.

Evaluation of alternatives: After seeking for information, the customer

will put all their choices into an intangible scale to analyze them with each

other in order to find out what is the best choice in term quality and prices.

Purchase decision: In this stage, people decide whether the exchange

occur or not. However, there still some factors effects on the final decision

in the last minus. This problems might depend on quality of services, sale

assistants, financial problems or accidental mind changes

Post purchase behavior: After purchasing, the customer will examine

whether the product and service satisfy their need or not. If they feel

satisfy, they will come back and continue to use the service of 1901 Hot

Dogs. As a result, in this case, the marketing activities also play a vital

role beside the quality from itself. The 1901 Hot Dogs should concentrate

on the after – purchase policy such as member cash or discount for loyal

customer. Furthermore, one advantage of using relationship with loyal

customer is they can help the company with free marketing and PR to

other people as viral marketing. Another proposal, in some special

occasions such as holidays or wedding season, the company should

have some sale promotion policies to improve the sales. For example, a

small gift is not only make customer delighted but also a secretive

marketing method indirectly.

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C. ConclusionIn conclusion, marking is defined in variety ways based on how each stage of

marketing process important. Then, the key characteristics as well as elements of

marketing concepts are identified and explained in the real case of Love Lace. From

the marketing approach of this company, the report mentioned the benefits as well

as the costs for the company.

In the next part, the marketing process of 1901 Hot Dogs will be explored

deeply in term of business environment influenced factors. Next, the report proposed

two appropriate segmentations that 1901 Hot Dogs should target, hence, outline the

factors influence on determined targeting strategy for the company. Finally, through

exploring buyer behavior process, the report answered the question about its effects

on company marketing activities.

With the information provided in this report, the researcher hope that they will

useful and value for 1901 Hot Dogs in order to plan marketing activities effectively

and gain the heart of customers in Vietnam market.

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Reference Book sources :

BPP Professional Education, 2004, Mandatory Unit 1, Marketing Degrees Course

Book, London, BPP Professional Education

Kotler, P 1999, Principles of marketing, Prentice Hall Europe, Britain.

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Customer concept : CONCEPTS OF CUSTOMER ORIENTATION - INTERNET

BUSINESS MODEL FOR CUSTOMER-DRIVEN OUTPUT by Prof. Dr. Peter Loos

Market orientation: On Market Orientation: Development and empirical validation of

two symmetric component measures of market orientation" by Hans Eibe Sørensen

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