TRệễỉNG ẹAẽI HOẽC Mễ TP. HCM UNIVERSITE LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL


Ho Chi Minh City
(
2011
)
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COMMITMENT

This dissertation is study of me, which is made on the basic of theoretical studies,
survey research of the real situation under the guidance of Professor: PhD Hoang Thi
Phuong Thao.

The data, figure and questionnaire results of the thesis is true. The specified marketing
strategy, the competitive improvement strategy launched from a case study of protective
and marine coating products in Sigma Yung Chi Coatings Co., Ltd and is submitted by
Dissertation evaluation association of economic Master

Once more, I would affirm the truthfulness of my promise.


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TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION 1
1.1 Background 1
1.2 Rational of study 3
1.2.1 Asia industrial coating market overview 3
1.2.2 Major markets in Asia 4
1.2.3 Vietnam industrial coating market overview 5
1.2.3.1 General information 5
1.2.3.2 Some well-know industrial paint companies in Vietnam market 6
1.3 Research problem and research objective 6
1.3.1 Research Problem 6
1.3.2 Research Objective 7
1.4 Methodology of study 7
1.5 Structure of study 9
CHAPTER 2: LITERATURE REVIEW 10
2.1 Concept of competition and competitive advantage 10
2.1.1 Competition 10
2.1.2 Competitiveness 10
2.1.3 Competitive advantage 10
2.2 M. Porter model analysis 11
2.3 SWOT model analysis 13
2.4 Factor effecting to competitiveness of enterprise: 14
2.4.1 Macro factors 14
2.4.2 Micro- factors 16
2.5 Marketing mixed and HR strategy to improve the competitiveness 18
2.5.1 Marketing mix 18
2.5.2 HR strategies 19

4.2.1.2 Price 42
4.2.1.3 Distribution 43
4.2.1.4 Promotion 46
4.2.2 Personnel strategy 46
4.2.2.1 Technical and sales staff recruitment process 46
4.2.2.2 Technical staff training process 47
4.2.2.3 Motivation of technical and sales staff in the firms 48
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4.2.2.4 Role of line manager in training and developing the people in the
organization 50
4.2.2.5 Being the Best Team in the marine and protective segments in
comparison with competitors 51
4.2.2.6 Customer relationship 52
4.3 Conclusion 53
REFERENCE LISTS 55
APPENDIX 57 
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ABBREVIATIONS
ACC : Asia Coating Congress
DD : Dry Docking
EMEA : Europe, Middle East, and Africa
EPC : Engineering Procurement and Construction
FDI : Foreign Direct Investment

Figure 1: Five forces model of M.Porter 11
Figure 2: The SWOT Matrix 13
Figure 3: Vietnam GDP growth rate 26
Figure 4: FDI Commitment and Implementation 27
Figure 5: Competitive price in the market of industrial products of Sigma 33
Figure 6: Factors to improve technical staff’s skills and knowledge. 34
Figure 7: Limited distribution channel 37
Figure 8: Recommended distribution network of Sigma Yung Chi in Vietnam 45
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LIST OF TABLE

Table 1: Market size of countries in 2009 and 2014 4
Table 2: General Information of Survey feedback 9
Table 3: The tables of comparison among coating company in term of market share
23
Table 4: Comparison of the market shares in field of protective coatings from 2009
to 2012 23
Table 5: Sales of Marine and Protective Coatings 25
Table 6: Main PVN’s projects from 2009-2020 29
Table 7: Frequency of product usage 32
Table 8: Competitors and SWOT 36
Table 9: The drawback of Sigma Yung Chi Coatings Co., Ltd in Vietnam Market 36
Table 10: Promotion activity 38
Table 11: SWOT of Sigma Yung Chi Coatings 39
Table 12: Recommended strategy on product and price 43

varnishes that are used to protect and decorate surfaces such as internal and external walls,
doors, window frames, and so on. The market for architectural or decorative coatings
includes both the do-it-yourself enthusiast and the professional or trade sector (Akzo
Nobel’s inaugural Global Coatings Report, 2006)
INDUSTRIAL COATINGS
Of course, it’s not just houses that get painted. Virtually all consumer durable
products, as well as all types of industrial equipment, have to be coated in some way or
another. New cars arrive “coated.” Anything made from wood—be it home or office
furniture, kitchen and bathroom cabinetry, flooring, windows and doors, or various other
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factory-finished building products—will be coated to enhance its appearance and provide it
with protection. Everything from computers to fridges and freezers, washing machines to
DVD players and mobile phones, are coated to extend their lifespan and enhance their
aesthetic appeal (Akzo Nobel’s inaugural Global Coatings Report, 2006)
SPECIAL PURPOSE COATINGS
That coatings are ubiquitous in our society can be seen from the fact that the third
category is simply known as special purpose coatings. Research-driven innovation has
enabled us to produce coatings that have very special properties to meet entirely specific
needs. There are main two kinds of special purpose coating name Protective Coating and
Marine Coating
Protective Coating: as their name suggests, protective coatings are applied on various
steel and concrete structures to preserve long-term strength and integrity. They need to be
effective in a variety of situations and must be able to withstand adverse conditions
resulting from, for example, atmospheric exposure or contact with corrosive chemicals.
The type of coatings used depends on the specific end use, because they can be adapted to
suit different environments, such as the demands of the oil and gas industry, the chemical
industry, power and water utilities, the food and paper industries, bridges and roads, as
well as railways. These coatings have to be particularly strong, because even the slightest
weakness in a coating can quickly become the focus for degradation and corrosion of the

improving the competitiveness of the company. For more understand which major factors
affecting on competitive capacity of the firms in marine and protective coatings market, the
applicable marketing mix and sales personnel strategy should be studied more deeply and
applying them in particularly paint product segment (Protective and Marine Coating). And
a well implement of this strategy could help the company (hereinafter Sigma Yung Chi
Coatings Co., Ltd) increasing its competitiveness against competitors as well revenue
1.2 Rational of study
This research is based on the general review of Asia Industrial Coating in which
Vietnam market is one of them. In the other hand, there is in deep study about Vietnam
Coating Market, especially Protective and Marine segment.
1.2.1 Asia industrial coating market overview
The market niche of Asia-Pacific, with 11 major economies mentioned in the table
below, has calculated to be 13.9 billion tons in 2009 and is also forecasted to make it
growth of about 7.9% annually from now to the year of 2014 – the time the market reach
the number of over 20 million tons

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, 2010
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Number Country Market Size in 2009 (tons)
Forecasted Market Size
up to 2014 (Tons)
1 China 7,566,300 12,185,600
2 India 1,813,500 2,920,700
3 Indonesia 636,700 852,100

VPIA ACC: Viet Nam Paint & Printing Ink Association- Asia Coating Congress
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market segments such as architectural, marine and protective coatings are expected to
continue growing in the future.
1.2.3 Vietnam industrial coating market overview
1.2.3.1 General information
In 1986, the Vietnamese economy engaged into the period of reforming with the nature
of market economy, however, positive steps in paint industry just started in the beginning
of 1990s to integrate into the region and international scale and gradually continue to
develop to the current time. The period from 2000 to present time marks the a great
development in the paint industry of Vietnam with great improvement in demand and also
a variety of paints in which decoration coatings take up a large proportion with average
annual growth rate of 25%, marine coatings, protective coatings and industrial coatings
developing more and more according to the demands of the market.
Vietnam is potential market for all paint companies. Regarding to global investors in
manufacturing, it is considered one of the top destinations with rich resources and has a
large and affordable workforce. Foreign Direct Investment (FDI) Law of Vietnam is
continuously amending and improving by Government to lead the economy into a more
open and attractive one for foreign investors. Ho Chi Minh, Hanoi, Da Nang, Vung Tau
City and Binh Duong are the key provinces of investment
In 2007, foreign-based firms started to penetrate into the market of Vietnam under the
form of 100% foreign investment or in outsourcing contracts with Vietnam paint and
coating companies. Besides, a large number of Vietnamese paint and coating firms (in
form of joint stock, private) also expand their business by building more factories,
investing in technology and machineries to improve the quality of products according to
the demand of consumers. It can be said that the fast development and quality
improvement did create an impressive picture on the paint industry of Vietnam in this
period. The improvement in the market helps to build up a healthy environment of paint
firms regardless of being domestic or foreign-based ones. (VPIA ACC 2007, 2009)

1.3.1 Research Problem
‘’Severe competition among leading coating suppliers in the Protective and Marine
Product segments – How to survive and become the leader in the product segment’’
These days, along with the development of the economy and the growing demand for
surface protecting for technical tools and machines, a wide range of coatings have come
into beings in the world market in general and in Vietnam in particular. Being aware of
potential in segment of protective and marine coatings, paint and coating firms more and
more improve their products to deliver the best products to customers in the combination
with marketing strategies to supply products to the end-customers.
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It is not an easy task to survive in a potential but saturated market of brand these days.
As mentioned in the section above, in the market of Vietnam, domestic paint firms, in spite
of possess products with high quality, find hard to compete with foreign ones.
The market segment of protective coating (PC) and marine coating (MC) in Vietnam
are currently driven by leading foreign-based companies. In comparison with the market of
Southeast Asian market as well as Asia region, the market niche of PC and MC in Vietnam
is quite small. Nevertheless, a variety of leading paint firms in the world penetrates this
market for the potential in the future. In details, paint firms holding their foot in PC and
MC market of Vietnam are PPG VN (Sigma Yu Chi Coatings), Akzo Nobel (International
Paint), Jotun, Hempel, Chugoku, Nippon. The competitive advantages of foreign-based
ones are of financial resources; hence, they have vivid marketing campaign, attractive
promotion and impression on customers about their brands.
Each company mentioned above holds their own strength in their market share. Due to
the small scale of the market, the competition among them becomes tougher and tougher.
The question arose is that how PPG Vietnam (Sigma Yu Chi Coatings) could stand strong
in their traditional market niche and gradually gain more and more market shares to
become the leading supplier of PC and MC in Vietnam?
1.3.2 Research Objective
In attempting to answer the research problems, this research is directed to following

distribution, services, competitiveness ability and sales personnel of the Company. (See
detail of Questionnaires in Appendix enclosed)
The survey was conducted on two main groups of participants:
• Group 1: Managers and heads of sales and technical department.
• Group 2: Professional designers and consultants.
Group 1 is management and first line managers of these Companies whose are the EPC
construction contractors, contractors, sub contractors for power, petrochemical plants as
well oil and gas industry. The survey also is covered to some shipyard building companies.
The Group 2 is the management of some design, consultant Companies whose are doing
the Engineering for related projects
It uses two most common qualitative methods: in-depth interviews and focus groups.
Each method is particularly suited for obtaining a specific type of data. The population for
the survey would be selected 100 for both groups. And it is expected that at least 35% of
survey questionnaires will be returned with the answers for both groups
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Among 100 questionnaire sets administered to 20 Designing and Consultancy
Company for participants of group 2 and 80 to project contractors for ones of group 1, the
initial results are reflected in the table below:
Group Sent (Questionnaires) Received %
Group 1 80 48 60%
Group 2 20 12 60 %
Table 2: General Information of Survey feedback
(Source: Author’s Survey, 2011)
It can be seen from the results of market survey that among 100 questionnaires
delivered, the collecting ration made up to 60% actually. This is the result reflected the real
market response to the products of Sigma Yung Chi Coatings company. This result also
serves as the foundation so that the company could orient and introduce suitable policies to
compete and better competitiveness in the market.
1.5 Structure of study

to compete effectively with others thank to low cost and advance in technology in
international comparison (Alan V.Deardoff, Economist ).
2.1.3 Competitive advantage
Another term that is related to competition is competitive advantage, which refers to
possessing typical value and might be used to “take the chances” to gain profit. Speaking
of competitive advantage means mentioning the advantages that a business has and might
have in comparison with its competitors. Competitive advantages might be either of micro
scale (for businesses) or macro level (for countries). Besides, there is also the concept of
“sustainable competitive advantage” meaning the process of providing a special value in
the market by an enterprise while none of its competitors can do that. (Wang Wen-Cheng,
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Lin Chien-Hung and Chu Ying-Chien, 2011; Types of Competitive Advantage and
Analysis, International Journal of Business & Management; Vol. 6 Issue 5)
2.2 M. Porter model analysis
According to Michael Porter, the intense of competition in the market in any industry is
under the effect of five competitive forces as following:

Figure 1: Five forces model of M.Porter
(Competitive Strategy- M.Porter, 2001)
a. Strengths of the suppliers are shown through
- The level of density of suppliers.
- The importance of product quantity to the suppliers;
- The differences among suppliers;
- The impact of input materials on the cost or the differentiation of products;
- The expense of shifting of businesses in the field.
- The existence of substitute suppliers;
- The threat of increasing merging of suppliers;
- The supplying cost over total income of the industry.
b. Substituting threat is reflected as

- Fixed cost/ added value;
- Growth condition of the industry;
- The state of productivity surplus;
- Differences among products;
- Shifting costs;
- Typical features of good brands;
- Diversification of competitors;
- Phasing out in the industry;
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2.3 SWOT model analysis
SWOT model is an effective tool in perceiving and making decision in every situation
in any business units. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
SWOT provides a strategic analyzing tool in reviewing, positioning and orientating of a
company or a business project, SWOT is suitable to group work and applicable in planning
business activities, strategy building, competitor evaluation, marketing and promoting
products and services. (Hendry, L.C., 2010; Product customization: an empirical study of
competitive and repeat business); (International Journal of Production Research, 2010; Vol.
48 Issue 13)
Strengths and Weaknesses are the ones of internal factors while Opportunities and
Threats of external ones. SWOT enables the company to analyze other factors which have
relative impact on the competitiveness of the company. SWOT is often used in the
combination with (Political, Economic, Social, Technological analysis), the model of
analyzing the market and valuing the potentials through external factors in the aspects of
politics, society and technology. Analyzing according to SWOT model means evaluating
data organized as the structure of SWOT in a logical way to help readers understand as
well as present and discuss to facilitate the process of making decision.

Figure 2: The SWOT Matrix
SWOT model often gives out 4 basic strategies:

competitiveness and develop more high quality products and create great prestige to
customers. Through financial market, activities such as investing, saving and inter-trading
among enterprises would get more effect. Enterprises should buy more machines and
equipment in a strong finanicial market condition enough to supply loans to business and
by contrast, enterprises would save more in spending and investing in a tied financial
market.
c. Government policies
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The policies ruled by the government in the framwork of politics and law leave great
effect on consumption activities of the business, and then affect competitiveness of the
enterprise. In recent years, Vietnam is always valued by international economic experts as
a country with stable political and economic environment. And the gorvernment oftens
applies favorable regulations on business activities. This creates much favorable condition
foe domestic enterprises to set up and develop.
d. Technology
These days, the revolution on scienece, technical and technology lay a meaningful
foundation on the basic factors of a business’s competitiveness namely quality and price.
Moreover, business competitiveness also depends on the process of collecting, processing
an communicating in a fast and exact way thank to advance in science, technology.
e. Investment and saving
Investing and saving are the two issues of marco economy. A favorable investment
process encourages the business to expand its scale and develop the brand of the quality. A
business with favorable condition is the one holding strong condition of finance and aslo
bright record of revenue. Besides, saving also plays an important role in activates of small
and medium businesses in such a hard situation these days. Businesses have to cut down
spending, maintenance the current market shares, save and wait for the chances of
investment and development.
d. Trading
Commerce also means trading and business exchanging. This activities hold high