Marketing Plan For Viettel

2. Company Background

Name of Enterprise: VIETTEL CORPORATION

●           Abbreviation: VIETTEL

●           Head Quarter: Number 1, Giang Van Minh Street, Ba Dinh district, Hanoi.

●           Email: ;         

●           Website: .

●           Tel: 04.2556789

●           Fax: 04.2996789

●           Email: ;

●           Website:

●         Founding Agency: Ministry of National Defense

Viettel was founded in 2nd March 2005 and became the top three market leaders in 2007, when Mobifone and Vinaphone ranked number one and two. It has got a strong position in home market as well as in Cambodia.

Field of business activity:

• Posts and Telecommunications services
• Develop software products for electronic, telecommunications, communication technology, Internet.
• Produce, assembly, repair and trade in electric, telecommunications electronic, communication technology and wireless electric receive – transmit equipments.
• Construction of posts and telecommunications, communication technology, electrical transmission works.
• Survey, develop posts and telecommunications, information technology projects.
• Train human resources for posts and telecommunications industry.
• Invest in infrastructure, real estate, hotel, travel, warehouse and transportation.
• Import and export equipment for electronic and communication, information technology projects
• Produce pulp and paper products, carton
• Press and printing services
• Produce cards for post and telecommunication industry, services industries
• Wholesales and retails of machineries, spare parts for printing industry. 

2.1 Business philosophy

●    Keep on innovating and creating by listening to customers as individuals, with whom perfect products and services are provided.

●    Integrate production and business into social and humanitarian activities.

●    Be sincere to colleagues. All together, we will build Viettel our common home.

2.2 Company Mission and Vision:

Development standpoints

●  To well harmonize economic and national defense activities.

●  To invest and develop network infrastructure rapidly.

●  To do market-oriented businesses

●  To develop rapidly and stably

●  People are considered core factor for success.

2.3 Core value

Eight Core values:

    1. Reality is an acid test

● Our principle of action is “grope our steps to cross the river” and to continuously adapt to the reality.

● We appreciate people through their real works.

    2. Learning from mistakes

● We accept challenges. When facing with great challenges, we find new ways of thinking, breakthroughs of doing.

● We dare to be losers and encourage those who are losers. Failure is the key to fulfill system’s gaps. Someone’s mistakes are not used to overturn him but avoid any repetition ahead.

● Criticism is prompt, open and positive. We are eager to hear and to learn for our advancement.

    3. Change is a norm 

● We are proactive to changes and constantly change to adapt to changing environment. We change on our own initiative before we are forced to change, so that we are initiative in the process of changes. We make changes the air we breathe.

● We think to adjust our strategy and restructure appropriately.

   4. Value innovation

● Think new about the old things. Renewing the way of thinking is the way to create new values.

● We appreciate and honor even the simplest ideas. We build pro-creative working environment where every Viettel member is inspired to create new values each of their days.

● We use brain storming as the key to raise and develop ideas. We keep on-going the Viettel’s Day of Creativeness

● One day, one new idea realized to one’s works

   5. System thinking

● We build up the logic system to carry out our strategies, solutions, stages and principle of actions.

● We apply systematic theory to set up our organization.

● We apply processes as the mean to systemize:

✓ Problem solving process: Identifying problem àDefining causes à Working out solutions à Dealing and Implementing à Monitoring and Evaluating.

✓ Strategy setting up process: Where are we à Where would we like to go to à How can we get there à Who do what and when to complete

✓ Creating process: Eating à Digesting à Creating.

✓ Problem understanding process: Raw data à Information à Knowledge à Understanding. One way to understand the root cause of a problem is to perform a simple root cause analysis. Root cause analysis just requires us to ask a series of "why" questions. Understand “why” means understand the root of causes.

✓ Knowledge transferring process: Being able to work (40%) à Being able to explain to ones (30%) à Being able to convert experience into documented guidelines (30%)

    6. “East meets West” integration

● We harmonize visual thought with analystic-and-systematical one.

● We harmonize the stability and innovation.

● We harmonize balance and individual drives

   7. Military tradition & manner

● The tradition: Discipline, Solidarity, Willingness to cope with hardship, determination to overcome challenges, and bond as flesh and blood.

● The Methodology: Decisive, Prompt, and defenitive.

   8. Viettel is a family

● We respect each other as individuals. We are sensible of the needs of our people. We rely on teamwork to develop individuals. Individuals and divisions co-ordinate and co-operate as parts of a body.

● Each of us lay bricks to build the house. We work to build our country, develop Viettel, and we deserve to share the achievements we contribute to. National and organizational benefits shall always prevail personal benefits.

(Source:http://viettel.com.vn/Giatricotloi/tabid/81/Cat/67/13/10/language/en-US/29/5/2009.viettel)

3. Situation Analysis:

3.1 PEST analysis:

Today, the world is changing rapidly with globalization trend, modern technologies are released frequently. Those are significantly affected the external environment of Viettel, brought many challenges and opportunities to Viettel business.

3.1.1 Political - legal environment:

Vietnam is a one-party state country. While many countries are faced with civil wars, ethnic conflicts and terrorism, Vietnam - a multi-nationality country with 54 ethnic groups - has a stable political regime.  

Since 1986, the Vietnam Government has committed to implement the international economic integration policy. Currently, Vietnam is a member of many international and regional organizations. Vietnam has accessed the AFTA, and has signed a bilateral trade agreement with the United States. Exclusively, Vietnam has become WTO member on 11th Jan 2007.

With the increasing integration of its economy into the global economy, Vietnam is working hard to lift restrictions on foreign Telecom Corporations into Vietnam. The goal is to fall in line with the requirements of the U.S.-Vietnamese Bilateral Trade Agreement of 2001 as well as those of the WTO on the basis of equal treatment between different credit institutions, regardless of ownership, to create a sound competitive environment.

3.1.2 Economic environment

After many years of economic stagnancy, since 1986, Vietnam has been undergoing a transition from a centrally planned to a market-oriented economy and has succeeded in achieving rapidly economic growth. At present, Vietnam has became one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997, 6.5% from 1998-2003 and 5.7% forecast in 2009.

In the past years, on the integration process, Vietnam has left many favor policies on SOEs.  With low legal capital, poor equipment, low competitiveness of product. In result, in 2003, around 77 per cent of SOEs were reportedly making profits, but only less than 40 per cent of SOEs had profit rates equal or higher than the market interest rate.  Meanwhile, the development of the private economic sector was great. From 2000 to 2003, over 150,000 enterprises were established, the total registered capital accounted for 27 per cent of the total investment. These enterprises have created 6 million jobs. (source:). Moreover, thanks to the development of the economy, Vietnamese people seem richer and have a higher need of using telecommunication services and best selling mobile phone.

3.1.3 Sociocultural environment:

Social factors include the demographic and cultural aspects of the external environment which affects Viettel . These factors affect customers’ needs and size of the potential market. Traditionally, Vietnam has been seen as a saving nation and diversified culture. Vietnam has a population of over 84 million and 54 nationalities. (Source: http://www.wompom.ca/vietnam/vngeninf03.htm). Vietnames workers are highly educated, highly motivated and intensely loyal.

3.1.4 Technological environment:

Technology of Telecommunication service takes a more important role than ever before. The variety of functions and advance services to telecom sector are logical candidates for higher growth rate of subscribers. The technological innovation not only brings effectiveness to carrier operations and the economy but also allows users the convenience of greater service choice. Therefore, Technological factors can lower barriers to entry, reduce minimum efficient production levels.

3.2 Market Demand:

The statistic done by The Ministry of Planning and Investment shows that up to May 2009, Vietnam has more than 82.2 million subscribers, of the figures mobile telephones were accounted for 81%, take it to 98 mobiles per 100 people. Of 82.2 million subscribers, there are 34% are of Viettel. Vietnam is one of ten countries has the fastest growth rate in telephone subscribers in the world.

For 3 years from 2003 to 2006, the Vietnamese mobile market has been booming with an

incredible compound annual growth rate of 79.7%. In 2003, the number of subscribers was only around 2.76 million, mainly high-income users, but in 2006 mobile services have become accessible even to the low-income users, and the number has increased to 16.02 million. The Vietnamese mobile market continues to expand with the new entrants, EVN Telecom in November 2005 , and HT Mobile in late Q4, 2006.

Therefore, we forecast that the number of subscribers could reach as high as 53 million mobile phones (Active SIM Card Number), reaching at 59.38% of penetration by 2010. Our estimated compound annual growth rate (CAGR) from 2006 to 2010 is 34.85 %.

Unlike European countries, or Japan, Vietnam embraces both GSM and CDMA technologies. The government has favors for technology trials to make the most of new innovations. Its goal is to spread telecommunications as a main factor for the country’s economic development. Receiving huge FDI inflows continuously, the mobile industry in Vietnam is composed of the latest technology.

The Next Generation Network (NGN) backbone has been developing since 2001, CDMA 2000 1x EVDO was already exploited in 2006, and WCDMA is expected to be available in 2007. Mobile Number Portability (MNP) and fixed- mobile substitution are on the government agenda. Thereby, the next few years will witness a rapid expansion of the Vietnamese mobile market not only in terms of subscribers but also in technology and services.

3.3 Customer Analysis:

Buyers tend to be wealthier individuals who are willing to pay more for a better phone services.  They have higher expectations than those who are first time buyers.  Viettel is creating new ways to use multimedia communications with 3G, which creates new business opportunities. From our servey, we find out that Viettel ranked in 2nd position in term of customers’ preferences and loyalty, followed by S-fone, Mobiphone ranked number one. There are 47/150 of the sellected customers marked Viettel with highest point (in total) while S-fone is 4/150 and 99/150 belongs to Mobiphone.

3.4 Competitive analysis:

Direct competitors – Vinaphone, Mobilephone, S-fone

Indirect competitors - EVN and HTC

3.5 Competitive position:

Viettel accounted for 34 percent of the telecommunication service to end users in the second quarter, i.e. in 2009. At the same time, VNPT increased its share to 55.4 percent, while S-fone, EVN and HTC take the rest figure.

3.6 Performance Metrices:

Viettel’s main business driver in 2008, accounting for 51% of net sales, is the telecommunication services segment, internet services account for 35% which includes wireless. Viettel is the third largest nationwide supplier of telecommunication services. Viettel has a huge customer base, and the loss of any one of these customers could have an adverse effect on the company’s performance.

4. Applying Porter’s Five Forces Model:

5. SWOT analysis:

6. Critical Success Factors:

By analysing Strength and opportunities, we can derive the key success factors as:

• Recognition of Viettel Brand.
• Market potential especially in 3G in Vietnam and in emerging countries.
• Viettel’s R & D capabilities in innovating new services.
• High quality services at low cost.

Key Achievements and Awards

• Most well-known Brand in Post – Telecom – IT Industry, Vietnam award elected by consumers
• The first Vietnamese operator to invest directly overseas.
• No.1 mobile operator in Vietnam with nation-wide GPRS coverage, 11 million subscribers base and one of fastest growing mobile operator worldwide (Wireless Intelligence).
• No. 1 transmission infrastructure.
• No. 1 distribution channel in Vietnam.
• Latest technology application in Vietnam, such as:

-          Bi-directional transmission over 1 optical fiber solution

-          VoIP

-          Nation-wide GPRS coverage.

-          Successful Wimax trial

-          NGN deployment

-          Integrated billing system

-          MPLS

-          DWDM (40 x 10 Mbps)

7. Marketing Problem:

• The electric software division was facing major difficulties with sales which resulted in losses.
• Telecom service’s TV commercial was not attractive and not helpful.
• The new services introduced weren’t selling at the level that company needed.
• May be ranked down to 4th position.
• Competition from new players.

8. Strategic Marketing Framework:

According to Philip Kotler, "Marketing is not the art of getting rid of what you have, but of creating genuine customer value."

Viettel which is now staggering in failure should realize that new markets do not mean the same thing as good marketing. Having gained a customer, their first thought is how to keep that customers through his next purchase, and thereafter...forever. In a competitive world someone will always come up with a better service for customers, and that someone had better be you.

8.1 Offensive Strategy: Improve Competitive Position:

Offensive strategies can range from growing the competitive advantage and market share in existing service-markets to entering a new market with no established share position.  Viettel should embark on an investment to improve competitive position as it already has presence in emerging markets such as China, Cambodia and Laos; however, it needs to increase its revenue.  

Best (p 363-364, 2005) states the following core components of an offensive core strategy to improve competitive position as:

• Improve Customer Loyalty and Retention
• Improve Differentiation Advantage
• Lower Cost/Improve Marketing Productivity
• Build Marketing Advantage

Among these three Viettel seems to be consistent in applying 1st and 3rd but, it has to work mostly on differentiation advantage.

8.2 Improve Differentiation Advantage:

From the case study, we can clearly see that Viettel is basically looking into, Cost leadership strategy, which alone is not giving any advantage to it, as the competitors are getting a competitive advantage over Viettel by differentiating their services at the same price.  

While coming with a new service, Viettel should always consider the Kano Method, which can be used in marketing to discover which service features drive customer satisfaction and which cause customer dissatisfaction as well as to identify new product features and features that could be eliminated.

                                            Kano’s Model

                                                                                              Source:http://en.wikipedia.org/wiki/Kano_model

Another way is to apply knowledge as a source of advantage in getting a competitive advantage

Using Oblique Strategy: It means leveraging a knowledge advantage with respect to customers and competitors by having:

• Extensive Customer knowledge                                    
• Extensive Competitor knowledge

The goal of an oblique strategy is to gain market share and customers in a way that minimizes competitor response but achieves the desired marketing objective. It can include subtle but important service innovations, improved products and/or service quality, new marketing channels with more efficient supply-chain customer benefits.

9. The Marketing Mix of Viettel

In order to turn the electric software division of Viettel profitable, these are the key marketing strategies identified.

• The products should be stylish and in with the current trend and technology. One of the noted trends is the ‘only touch screen’ mobile handsets, with the advent of iphone from Apple and a phone from the LG-Prada tie-up. If the emerging markets of China and Cambodia and Laos are focused, then style would play a major role as the Cambodian, Laos and Chinese consumers are mostly young adults with an increasing amount of disposable income and they look for brands which are fashionable, especially the case in China.

• A key point is that the electric software should be user-friendly, no matter what the technology platform used. It should be similar to the major rivals’ telecommunication browser so that a customer shifting loyalty could also use it with ease.

• Telecommunication services should also be differentiated according to pricing. With heavy competition cutting down on the profits, Viettel should look into new markets using the penetration pricing technique, such as the poor customers and design cheap service and create a new market segment, like what S-fone did.

• Telecommunication Service differentiation could be done on the basis of the respective bundling; if it focuses on 3G with video and music player then it should be placed as its speciality.

• According to Nguyen Manh Hung (Deputy General Director) of Viettel, the emphasis is to be given to direct marketing and customer relationship management (CRM). Also, promotion should be through telecommunication and internet marketing channels according to Hung.         

Hung identifies telecommunication marketing as a link between traditional and online marketing environment and hopes to engage the customers to increase brand loyalty, which is a good strategy but care needs to be taken to avoid invasion of privacy.

• “A key part of brand development is making your brand more instantly accessible in memory and that’s what product placement does.”(Sutherland, M, 2005). So, placement should be utilised in the 3G to make a mark on the customers psyche. Also, strategic placement of advertisements in online games to target teenagers. Again the company needs to draw a line on ethical grounds as to not invade the consumer’s privacy.

The service needs to be placed strategically in such a way that customers treat it as a status symbol and a fashion statement. This could be done by direct marketing in mega malls and boutique shops, to improve the brand image.

They should endorse local film stars and athletes for their services and not go for international stars, which the local people wouldn’t be able to relate to.

 

• Physical settings of the showroom should be trendy and modern to give the general impression of the brand. It should not just confirm to the assumptions of the consumer but also delight them. The mobile phones should also be placed strategically such that the best phones should be in the front and the cheapest at the back.

• The employees dealing with the customers should be given special training as to how to be presentable, pleasing, and well-mannered and how to handle the customers efficiently. The training would set a certain standard across all outlets and increase the consumer satisfaction.

10. Conclusion

This report has pointed out that in a rapidly changing world, many factors such as the integration process of Vietnam, the development of technology and deregulation seem to bring Viettel more challenges than opportunities. In the comming years, Viettel will still struggles to maintain its market share in Vietnam’s Telecommunication market.

Viettel seemed to realize its two main challenges: how to innovate and differtiate its services; how to improve its quanlity control and image to carry out the suitable marketing strategies.

Thus by applying the above strategies, Viettel can gain competitive advantage over the others by focussing more on their models.

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