Political: There is still lack of specific policy in PR industry. It means that there is more and more competitors in the market, they are small and bad PR companies, therefore the review about PR will decrease. And because of lack specific policy, some PR companies use this missing to bring some disadvantages things about competitor out.
Technology: There are new trends in PR industry that is virtual conference. More and more company chooses virtual conference instead of real conference because of its comfortable. Besides this, company can save a lot of money when choose this way.
Social and cultural: In Vietnam, PR is not recognized as a specific job. It is still be seen as a part of advertising. Therefore, when company does a PR strategy, they often cost amount of unexpected money. Fortunately, Vietnamese customer lifestyle toward PR is changed within several years. Some Vietnamese company spent one third - one fourth advertising expense into PR.
Besides macro environment, there is micro environment. This environment influences organization directly. In this environment, PMA use Porter five forces to analyze competitive environment. There are five elements: threat of new entrants, threat of substitution, power of customers, power of suppliers and rivalry among existing firms.
Threat of new entrants
- Not too expensive to enter the industry
- Experience needed, but good relationship with customer is more important
- Low barriers to entry
-
Take a long time to enter the new market
Threat of substitution
- Low costs of change
- Major substitution: virtual conference
Power of customer
- Some large real estate company and manufacturer at industrial area
- Very large order (national and government events)
- Different service
- High buyer power
Power of supplier
- Many supplier (big hotel, printing company, gift producer, etc)
- Similar product
- Able to substitute
Competitive rivalry
- Very many competitors
- High customer loyalty
- Low costs of leaving market
- Good relationship with some big hotel and newspaper
- Low switching cost
PMA is an events company; therefore they don’t need so much money when they set business up. According to Mr. Dinh Trong, director of PMA, normally when they sign a contract with a customer, the customer will give PMA 30% of total money to spend for PR plan. That’s why the low cost of leaving market. With the other industry, such as hotel or restaurant, when they want to leave market, they lost a lot of money when they sell their fix asset. In PR industry, the asset is relationship and experience. About the barriers, there is still don’t have specific policy about this industry, therefore that’s so easy for a new company enter into this market. As I said, the relationship is the most important factors in this market, hence, it cost a long time for new company as well as PMA officially enter into new market.
About substitution, there’s many hotel and place to rent a conference room as well as printing company. So PMA can easily to find a best supplier with the best price. In this industry, all suppliers provide similar products, so the cost of changing supplier is low. But the new trend in set conference up in organization is virtual conference. It’s more comfortable and cheaper than real conference. In fact, even virtual conference is still not popular in Vietnam; this thing is a challenge for PMA in the future.
PMA is nearly unique in Real Estate industry and manufacturer in industrial area. This is two advantages of PMA in compare to competitor. Besides that, PMA has a good relationship with some newspaper, such as Tien Phong newspaper, a great newspaper in Vietnam and the chief founder of Miss Vietnam, Thanh Nien newspaper, Business Forum, Tiep thi va Gia dinh magazine. Therefore, customer power of PMA is high, each order of PMA can equal few order of the other events company.
According to Mr. Trong, in PR industry, PR company doesn’t need to advert themselves. Instead of that, once PMA make successful events, the customer will find them by themselves. That why the loyalty of customer is high. No one want to give the image, brand name of company to new events company instead of the PR company they used to.
As we see above, PMA is operating in a competitive environment with many competitors and more in the future. But until now, PMA still be a good events company with some national events such as Miss Vietnam 2007, Final National Hiphop 2006 and government events such as ASEAN meetings.
Apply organizational and environment technique to assess the impact on the company in the Vietnam market
Even PMA use Porter five forces efficiently, but they still need to identify their strength, weakness as well as opportunities and threats.
From SWOT table above, we have SWOT analysis that helps the company in organizational audit:
The value chain is analysis by the company
Task 2
Identify the main Barriers to the company marketing planning
There is a fact in PMA and almost PR companies; experienced employees always leave their current companies to set up their own companies or bigger companies. So the employees of PMA is unstable, they always need to hiring news employees, who just graduated or don’t have much experience. It leads to some main barriers to marketing planning:
- lack of in-depth analysis
- isolating the marketing function
- lack of knowledge and skill
- confusion between process and output
Suggest how the company may overcome barriers to marketing planning
The problem about leaving of good employees is not easy to solve. It’s a challenge for almost PR companies, not only to PMA. But PMA still has to find some solution, such as increase salary, giving them beneficial offers (increase percentage money after successful events, free special training, etc). Besides that, the director should keep an eye about the working environment inside company, such as the relationship between colleagues and between directors – staff.
As we know that because the number of employees of PMA branch in Ha Noi is not high and the specific characteristic of this business, there isn’t a separately marketing department in PMA. It means that some employees will lack of knowledge and skill of marketing. PMA should set up marketing department. Besides that, PMA should provide trainings to improve knowledge and skill for currents employees because PR also is a part of marketing. In lacking of in-depth analysis, PMA should carry out an effective marketing audit.
About isolating the marketing function, PMA is not really focus on marketing themselves to customer. Almost customer they have through introducing from the others customer. They should marketing themselves more, such as through events they do, on mass media, print a lot of poster and brochures about their company.
Sometimes PMA confuse between progress and output. They don’t have enough information to set up marketing plan for customer. It leads to wrong information or mistake in marketing plan and it affect to PMA prestige. So PMA should gather information as more as possible, such as using SWOT, Porter five forces to analysis customer’s company, before preparation a marketing plan for customer.
Conclusion
In this report, the process and techniques used for auditing the marketing environment of PMA is appraised. The organizational techniques- value chain and environmental auditing techniques- PEST, SWOT, 5 Forces is applied in the organization. The 4 main barriers to the marketing planning are identified. The ways organizations may overcome barriers to marketing planning is suggested.
.
Reference
Kotler, P., Gregor, W.T. and Rodgers III, W. H. (1988) The marketing audit comes of Age. Hamilton Consultant. Cambridge
Phuong Thanh (n.d) Hoat dong PR can 1 hanh lang phap ly Vietnamnet E-newspaper available from: [accessed on April 2nd 2009]
