BUSINESSFOUNDATIONS

Student’s Name: Tuan Hung Le

Diploma Business Administration 25

Submitted to: Mr. Dang Hoang Nguyen

September 11 2015

MARKETING PLAN INDIVIDUAL ASSIGNMENT

LA TROBE UNIVERSITYDIPLOMA PROGRAM

*****

BUSINESS FOUNDATIONMARKETING PLAN

INDIVIDUAL ASSIGNMENT

Student’s name: Tuan Hung Le

Class: Diploma Business Administration 25

Submitted to: Mr. Dang Hoang Nguyen

ContentsExecutive summary...................................................................................................11. Introduction to the Company...........................................................................1

1.1. History of Delta Corporation...........................................................................11.2. The projects of the company...........................................................................11.3. Target market and customers..........................................................................3

2. Market description..............................................................................................33. SWOT Table - Explanation................................................................................6

3.1. Strengths..........................................................................................................73.2. Weaknesses.....................................................................................................73.3. Opportunities...................................................................................................73.4. Threats.............................................................................................................8

4. Recommendations................................................................................................94.1. Target Market..................................................................................................94.2. New product description.................................................................................94.3. Customer value proposition..........................................................................104.4. Justification of the choice of new product.....................................................10

References and Appendice:..................................................................................12

Executive summaryAt present, the construction market are fiercely competitive. Some activities such as bidding activity, profit earning must ensure for the existence and development of enterprises. An optimal method to help business geared to objectives and achieve goals is marketing strategy planning. Marketing strategy is the foundation for the construction of other strategies in the business such as manufacturing strategy, financial strategy to help business running their activities. Therefore, the main purpose of this report is to research and analysize the impact of the business environment for the business activities of the DELTA Corporation. In addition, this report clearly analyzes the opportunities and the challenges, strengths and weaknesses analyze the competitiveness of new product on the market.

1. Introduction to the Company1.1. History of Delta Corporation

Entrepreneur Nhat Thanh Tran established civil engineering companies and industrial DELTA in 1993. Shortly after the operation, DELTA Corporation had participated in numerous major projects, several of which are the construction of Press Club Center (Hanoi), Saigon Domaine (HCMC), and Hanoi Hilton Opera Hotel. Since 2001, DELTA has constructed a series of foundation construction, the barrette wall and the basement on the different geological background, such as Bitexco Tower, Vincom City, and Keangnam Landmark. For more than 20 years of DELTA’s development, Thanh and his management team, technical staffs and specialized teams have built the DELTA brandname, which has been valued by customers as the leading company in the civil construction industry. The company's building constructions implemented across the country are always outstanding and complex works, which requires advanced technology.

1.2. The projects of the companySince its entrance in construction market, DELTA has successfully

implemented numerous key projects, including the Keangnam Tower foundations and Bitexco Financial Tower. The company also became the major bidder of large projects such as the Royal City and Times City, thanks to which DELTA has reconfirmed its leading role in the civil construction area and earned higher trust from customers.

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Major construction works by DELTA – Vincom City

Major construction works by DELTA – Hanoi City Complex

Major construction works by DELTA – Royal City

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Major construction works by DELTA – Times City

1.3. Target market and customers.- Target market:

Delta Corporation undertakes projects related to civil construction, industrial construction, and construction of urban infrastructure works with extensive requirements for quality, engineering and fine arts such as hotels, office buildings, and high-end housing. In general, civil construction market is the primary target market of the company.

- Target customers:

To pursue sustainable development, beside effective business strategies, DELTA has identified the customer concentration approach. Customers of DELTA are classified into two main groups:

+ Foreign customers who are investors from East-Asian countries, such as Keangnam Enterprise, and Huyndai RNC Hatay Co.Ltd.+ Domestic customers who are investors from Vietnam, such as Hanotex Co.Ltd, and Hanoi Southern Urban Development.

2. Market descriptionCurrently, the construction market in Vietnam is rapidly and

comprehensively developing in terms of scale, scope, structure, quality, technology, and market participant structure. The construction business gradually assert its crucial role in the design, planning and construction supervision. The construction major in Vietnam is divided into three categories: civil construction (housing, office buildings, hotel), industrial construction (production, warehouse,

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industrial) and construction of infrastructure (transportation infrastructure, power infrastructure and water infrastructure). Currently, the civil and infrastructure works represents a major value in the industry structure. To be more specific, the construction market of infrastructure and civil construction account for 41.2% and 40.6% of the value of the industry respectively and industrial construction only contributes 18.3%. In addition, regarding the geographical area of distribution, Hanoi and Ho Chi Minh City are two centers of capital attraction over the country. As clearly shown in the graph below, the North is leading the country in terms of spending for construction (43%), followed by Southern (32.4%) and Central (24.6%).

Structure of construction industry by category and geographical area

Besides, the construction market has been affected during the process of industry growth. Particularly, with the goal of promoting economic growth, the government is willing to spend higher capital resources on infrastructure projects. The graph below demonstrates the structure of capital invested in infrastructure in Vietnam. It is clearly seen that ODA is the largest source of capital for constructing infrastructure (37%), followed by private investment (21%), fee-charged services (14%), government bonds (13%), and national budget (11%). The contribution from commercial banks and other sources is negligible at 3% and 1%, respectively.

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Capital structure for infrastructure construction in Vietnam

In addition, rapid urbanization is leading to increased demand for construction of infrastructure throughout the country. Beside such recently finished works as Nhat Tan Bridge, Hanoi-Lao Cai Highway, and Noi Bai International Airport (T2), many construction works are being underway, including Hanoi-Hai Phong Highway, Nha Trang-Phan Thiet Highway, and Da Nang-Quang Ngai Highway.

Several major construction works undertaken as the result of recent urbanization

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However, the damage to the building market is that public enterprises have many advantages in bidding for the infrastructure construction works which involve public budget. This issue may reduce the effectiveness of bidding and significantly influence the quality of construction works when the contractors do not have adequate implementation capacity.

The bar chart below reveals the expectation of the growth rate of the construction major and the total investment. Although the investment amount of all construction majors fluctuates sharply recently, it is forecasted that along with the steadily increasing growth rate of total investment in construction, the amount spent for the three majors will ultimately converge at around VND 2 million billions during the 2020s.

Forecast of construction majors growth rate and investment in Vietnam

3. SWOT Table - ExplanationStrengths Weaknesses

1. Product quality.2. Equipment and technology3. Human resources.4. Production cost.

1. Labor productivity.2. Marketing activities.

Opportunities Threats1. Policy reform.2. Interest rates.3. Foreign Direct Investment

1. The economic crisis.2. Competition in the industry

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3.1. Strengths- Product quality: DELTA Corporation is one of the leading construction

companies in Vietnam, so the quality of the work is the most important factor. Product quality of DELTA has been clearly proven through the completed such as the Royal City, Times City and Bitexco Financial Tower. DELTA always strives the best to deliver excellent performance with higher quality of construction.

- Equipment and technology: DELTA has invested in the most updated and advanced machinery and equipment in the world in the execution of public construction such as RCD drilling rigs and diaphragm wall excavator. Besides, a modern computer system with scientific advances, such as the Osterberg device, Koden test equipment, Top-down method, Bottom-up method, etc., is also applied to check the quality of the work

- Human resources: DELTA employs young staffs with dynamic, innovative and enthusiastic personality. Furthermore, these staffs are always inspired and rewarded accordingly to contribute to the company's development. Therefore, company has a stabilized foundation from the staffs.

- Production costs: Thanks to the connection with the suppliers of products and services domestically and internationally, the production costs are tightly controlled, so the costs are maximum saved.

3.2. Weaknesses- Labor productivity: Although the company possesses a strong workforce, not

many capacity building activities are undertaken for the company to harness the power of human resources. Thus, the performance is not at the highest possible level.

- The system of marketing: marketing activities have not been effectively promoted. A classic example is the obvious lack of information, which is essential for contractors and consumers, on the Corporation’s website.

3.3. Opportunities - Policy reform: Since 2013, the housing law and law on tenders and property

values (36/TT-NHNN) have been changed considerably in various contents. This encourages the demand for housing and the amount of foreign investment

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in the industry. Therefore, DELTA can take its advantage to expand and develop further projects.

- Interest rate: interest rates of lending and savings have dropped to 8% and 6%, respectively, which are at the lowest levels in recent years. When the expense for financing activities of construction business decreased, DELTA can expand the scale of the project.

Interest rates fluctuations in period 2005-2014

- Foreign Direct Investment: In 2015, Vietnam’s construction market has prospects of attracting foreign direct investment (FDI), mainly from Japan, Korea, Singapore, Taiwan, China, the EU, the United States and Canada. The capital investment will help increase demand for infrastructure construction as well as the use of building materials in the country.

3.4. Threats- Economic crisis: the global economy is facing an arising economic crisis. The

upsurge in inflation leads to the escalating price of raw materials, which in turn will cause a burden for DELTA to balance its price policy to compete with other competitors.

- Competition in the industry: The more and more intensive participation of Vietnam in the process of globalization has led to the appearance of many construction companies which pose a great threat of competition to DELTA. It may be increasingly fierce competition on prices, quality, service, and time, etc.

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4. Recommendations4.1. Target Market

As mentioned above, the industrial construction is the industry responsible for low value structure in the construction industry, which accounts for only 18.3%. Currently, the amount of capital investment in the industrial construction has occupied the highest structure in FDI (40-50%), equivalent to the amount of on average 4-5 billion USD disbursed each year. Besides, because of the globalization, the demand for the industrial construction are increasing at higher and higher speed, promising huge profits for qualified construction companies. Therefore, the prospects of industrial construction are evaluated positive in the next few years. This is expected to be a potential new market for DELTA to expand its projects in terms of both scale and scope because they never participates in the industrial construction market. Customer focus of the company's is the contractors, domestic and foreign investors in the industry areas, including Samsung, Intel, Nike, and Adidas, etc.

4.2. New product description- Product: For industrial construction market, the DELTA Corporation’s new

product is the projects with superior quality, where the most modern equipment and advanced technologies of DELTA will be applied to ensure safety, quality and timely progress.

- Promotion: DELTA Corporation will promote industrial construction building capacity to the investors through promotional campaigns, including both mass media communication tools (TV, posters, website, etc.) and direct communication events (exhibition, press conference, etc).

- Price: Based on the sustainable relationship of DELTA Corporation with suppliers of construction raw materials, the production costs of industrial construction works will be minimized. However, during the early participation of DELTA in industrial construction, it is expected that the company will have to invest more in specific technologies and to adapt its resources to the new market segment. Quality is still concentrated to meet the requirements of the investors and will be the key distinct advantage of DELTA’s products. Therefore, the price policy of DELTA in this phase is to balance at the average level in the market.

- Place: The main distribution area of the new products is the largest industrial parks in the country such as Binh Duong, Thai Nguyen, Bac Ninh, etc., or the newly arising industrial zones in Quang Ninh, Thanh Hoa, and Dong Nai, so on.

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- People: New products will be designed and built by engineers and workers who have more experience and have core capacity. DELTA will also have to arrange some training sessions or send its employees to advanced courses designed specifically for industrial construction to enhance their capacity.

- Processes: The works will be built and designed according to the requirements of investors. All these projects will meet the criteria of quality, safety and construction schedule. In addition, the contractor will receive the update information on regular basis and the strong support about the works from the DELTA. Implementation of this procedure will minimize the errors and will attract more investors.

- Partnership: DELTA's partners are companies that supply building materials and the investors. It may also establish relationship with other recognized construction companies in case partnership will be required for better service in large projects.

4.3. Customer value propositionThe industrial works of DELTA will be built and designed to suit the

requirements of the contractor about mold and shape characteristics and structure. These industrial works will be built in a large area, including factories with different designs to suit each mission and goals. In addition, the works will be designed scientifically and in consistence with nature. Next to the standard in terms of form and structure, safety and the quality of these works will be ensured to create effective work environment. Meanwhile, the costs will be kept at an acceptable level for such high quality.

4.4. Justification of the choice of new product- S – O: The Corporation needs to take advantage of the strengths of modern

equipment and advanced technologies to create a high-quality industrial works. Besides, to increase market share and sales in the industrial market, DELTA should grasp the change of Government policies, interest rates of lending and saving, and characteristics of economic development to bring more favorable conditions for operation. In addition, based on the strength of the human resources, DELTA Corporation is likely to expand, diversify the works for contractors.

- S – T: The Corporation needs to have a strategy of technological innovation for sufficient competition. Furthermore, it should plan to control costs and looking for the highest quality source of raw materials but reasonable price to save the cost. Hence, DELTA Corporation creates the foundation of the price policies to

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attract customers and compete with other rivals about the works of industrial construction.

- W – O: To develop the industrial projects, DELTA Corporation should expand market share in industrial construction and number of customer based on the change in Government's policies, FDI and interest rates. As a result, the corporation confirms brand’s value and overcome the weaknesses of labor productivity and marketing activities.

- W – T: While the economy was affected by the global economic recession and the competition in the market of industrial construction is increasingly fierce, DELTA needs to change marketing strategies and increase the productivity of labor to create the best industrial works to compete as well as to overcome the economic downturn.

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References and Appendice:References:

1. Delta Corporation 2015, Company Overview, Delta Corporation, viewed 2 September 2015. Available at URL: <http://deltacorp.vn/index.php?option=com_content&view=article&id=178&Itemid=207&lang=en>.

2. Delta Corporation 2015, Business Fields, Delta Corporation, viewed 2 September 2015. Available at URL: <http://deltacorp.vn/index.php?option=com_content&view=article&id=181&Itemid=210&lang=en>

3. Delta Corporation 2015, Project: Under Construction, Delta Corporation, viewed 2 September 2015. Available at URL: <http://deltacorp.vn/index.php?option=com_content&view=category&layout=blog&id=92&Itemid=257&lang=en>

4. Trang, T. 2013, Nhà giáo, Doanh nhân Trần Nhật Thành : Thắp lửa cho những thành công, Vietnam chamber of commerce and industry, viewed 2 September 2015. Available at URL: <http://vccinews.vn/news/10045/.html>

5. Tạp chí Tài chính 2014, Triển vọng thị trường xây dựng Việt Nam 2015, Tạp chí Tài chính, viewed 2 September 2015. Available at URL: <http://tapchitaichinh.vn/kinh-te-vi-mo/kinh-te---dau-tu/trien-vong-thi-truong-xay-dung-viet-nam-2015-56845.html>

6. FPT Securities 2015, TẠO ĐÀ CHO BƯỚC NHẢY VỌT, FPT Securities, viewed 2 September 2015. Available at URL: <http://fpts.com.vn/FileStore2/File/2015/05/13/FPTS_baocaonganhxaydung_052015.pdf>

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Appendices:

Company’s name DELTA CorporationAddress 81 Lac Trung Street, Hai Ba Trung District, Hanoi

City, VietnamCEO Nhat Thanh TranPhone 043.821.7885Email info@deltacorp.vnCurrent market Vietnam construction marketCurrent product Construction works for Civil construction, Industrial

construction and Construction of urban infrastructure works

Performance Continuous reports profitCompetitive Advantage - High construction works quality

- Modern equipment and advanced technologyRivals Song Da Corporation, CONINCO.JSC

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Information of interviewee:Full Name: Hong Quang Doan

Career: Construction engineers at DELTA Corporation

Email: doanquang86@gmail.com

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