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Skoda Vietnam

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Submitted By christine44
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4. Marketing strategies of Skoda Auto in Vietnam
4.1 Marketing Objectives:
The main objectives of the company are: * To penetrate into the Vietnamese market in 2015 * To create brand awareness for local consumers and increase customer’s perception towards its brand name * To become one of the ten biggest car brands in the market
The choice of 2015 as entry year is favorable for Skoda because Vietnam’s automotive market is growing quickly and all competitive advantages for the company including lower vehicle import tax, high demand of Vietnamese consumers etc will help company to enter the market successfully.

4.2 Segmentation, targeting, positioning strategy
Target groups for Skoda Auto’s vehicles will be based on four groups of segmentation variables such as Geographic, Psychographic, Demographic and Behavioral
In Geographic segmentation, two major regions for the company are Hanoi Capital in the North and Ho Chi Minh City in the South. Ho Chi Minh City and Hanoi capital are chosen in terms of numerous population, high income level and high demand of car purchase. Concerning the population scale, Ho Chi Minh stood in the first position with 7,165,000 people and the second was Hanoi with 6,472,000 people.
In Demographic segmentation, both men and woman, aged between 25-60 years are addressed. Average Vietnamese household size is about 4.1 person/household, so Skoda’s models such as Fabia, Octavia, Yeti will be the most affordable choice for the Vietnamese middle class and Superb will be suitable for the Vietnamese upper class. Based on the income level of Hanoi Capital and Ho Chi Minh City, the group with minimum annual income of $23,000 per year will be addressed for purchasing Skoda’s vehicles including senior employees, businessman, doctors and politicians.
In Psychographic segmentation, personality and lifestyle of Vietnamese customers should be focused by the company because they will affect their purchasing behaviors.
In Behavioral segmentation, the company must take into considerations when Vietnamese people choose to purchase a car. They like to take reference from other users in order to make sure about their expensive investment. Moreover, Vietnamese people tend to purchase cars in the special occasions such as before the Chinese New Year, marriage seasons, etc.

4.3 Marketing Mix
4.3.1 Product
Skoda should bring four basic models in the product lines to the Vietnamese market such as Skoda Fabia, Skoda Octavia, Skoda Yeti and Skoda Superb that mentioned before because it will be affordable choice for the Vietnamese.
Concerning packaging, all models of Skoda brand in the Vietnamese market should be imported directly from the Czech Republic because based on the car survey, 91 percent of people in the survey desire to purchase Skoda’s models from the Czech Republic and do not want to purchase models from China.
4.3.2 Price
Based on the external bench mark of Skoda’s vehicles in the Chinese market, in the Indian Market as well as in the Singaporean market, we recommends the following standard price for Skoda’s model in the market of Vietnam. No | Model | Fuel consumption | Price | 1 | Fabia (1.2 TSL/63kW) | 5.2L/100km | $53,000 | 2 | Octavia (1.4 TSL/55kW) | 6.3L/100km | $80,000 | 3 | Yeti (1.8 TSL/118kW) | 8.0L/100km | $105,000 | 4 | Superb (1.8 TSL/118kW) | 8.1L/100km | $135,000 |

We use the car price of Autojarov, Czech Republic in Czech Koruna and exchanges them into the US currency. When Skoda Auto officially will enter the market, the real final price including all tax duties and import transportation fee for its vehicles will be calculated exactly by World Auto Company (It is the official general importer and car assembly plant for Volkswagen located in the Ho Chi Minh City).

4.3.3 Promotion
Because the fact that Skoda brand will still not well known by local consumers, compared with Toyota, Hyundai, Ford, Mercedes-Benz, BMW or Volkswagen, so advertising should be used on the list of priorities in the first step of the company penetration. Advertising campaigns should be implemented such as television, radio and print media and outdoor media to advertise new models of Skoda in the market as well as to influence local consumers’ attitude towards its brand name.
A Public Relations team should be formed to deliver company’s messages to its publics though press release, press conference and events. World Auto Company should hold an event to introduce main models of Skoda’s models in order to create awareness about Skoda brand.

4.3.4 Place
Based on the market share and customers’ base, Skoda Auto group should use the exclusive distribution strategy. The exclusive distribution strategy means that Skoda Auto will offer exclusive obligations for World Auto Company to deliver its vehicles to local customers in Vietnam. The exclusivity will bring the assistance for Skoda’s brand image. Moreover, in the exclusive distribution, the cooperation between Skoda Auto Group and World Auto Company should be closely in term of designing prices, promotion, advertising and services. The decision is always use Volkswagen Group strategy in the Vietnamese market. World Auto Company is a member of VMGROUP VIETNAM, located in Ho Chi Minh City. Since 2009, World Auto Company officially becomes an exclusive authorized importer of Volkswagen Group’s vehicles in the market of Vietnam. All Skoda’s models such as Fabia, Octavia, Yeti and Superb should be available in two biggest showrooms of World Auto Company in Hanoi Capital and Ho Chi Minh City as well as in the authorized dealer network of World Auto Company throughout the country.

4.4 Action Plan

Phase | Activity | Place | Holder | Period | 1 | Signing the exclusive authorized agreement | Ho Chi Minh | Skoda Auto Group | January 2015 | 2 | Register Skoda trademark at National Office of Intellectual Property of Vietnam | Ho Chi Minh | Skoda Auto Group | January-March 2015 | 3 | Importing cars from Czech Republic | Ho Chi Minh | Skoda Auto Group | March-May 2015 | 4 | Decorating flagship showrooms | Ho Chi MinhHanoi | Skoda Auto Group | February-May 2015 | 5 | Training sales team and technical team | Ho Chi MinhHanoi | Skoda Auto Group | March-May 2015 | 6 | Advertising campaigns | Ho Chi MinhHanoi | Skoda Auto Group | May-June 2015 | 7 | Organizing Skoda’s launch event | Ho Chi MinhHanoi | Skoda Auto Group | June 2015 | 8 | Sales implementation | Ho Chi MinhHanoi | Skoda Auto Group | June 2015 |

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[ 1 ]. http://www.vietnamonline.com/az/ho-chi-minh-city-population.html
[ 2 ]. http://www.ipedr.com/vol20/10-ICHSC2011-M00023.pdf
[ 3 ]. In the Singaporean market, Fabia is priced between $89,106 - $109,106; $135,106 (Octavia); $145,106 (Superb) and $106,106 (Yeti), found on www.sgcarmart.com/new_cars/newcars_adpage.php?Make=Skoda

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