Piaggio Vietnam's Global Marketing Strategy A

Student No: 1711826 29th Oct 2018
CONTENT
EXECUTIVE SUMMARY ......................................................................................... 3

LIST OF FIGURES .................................................................................................. 4
LIST OF TABLE....................................................................................................... 5
ABBREVIATIONS.................................................................................................... 5
INTRODUCTION ..................................................................................................... 7
I. MARKET SELECTION AND JUSTIFICATION .................................................. 8
1) Market selection process ............................................................................ 8
a) Preliminary Screening ................................................................................ 8
b) Selection country ........................................................................................ 8
2) Justification for Bangladesh Market ............................................................ 9
3) Marketing environment analysis ................................................................. 9
a) Macro environment analysis ....................................................................... 9
b) Micro environment analysis ...................................................................... 11
c) Cultural implications ................................................................................. 14
d) Buyer behavior ......................................................................................... 15
II. MARKETING STRATEGY ........................................................................... 16
1) Market segmentation ................................................................................ 16
2) Target segment ........................................................................................ 17
3) Marketing mix ........................................................................................... 18
a) Product: .................................................................................................... 18
b) Price ......................................................................................................... 20
c) Place ........................................................................................................ 20
d) Promotion ................................................................................................. 23
III. MARKET ENTRY STRATEGY .................................................................... 25
1) Mode of Entry: Export directly ......................................................................... 25
2) Advantage and disadvantage of direct exporting ............................................ 25
3) Process of Market Entry .................................................................................. 26
4) Social media in supporting strategy ................................................................ 27
CONCLUSION AND RECOMMENDATION .......................................................... 28
Conclusion ......................................................................................................... 28
Recommendation ............................................................................................... 28
REFERENCES ...................................................................................................... 29
1
2
EXECUTIVE SUMMARY
This report will give some information about the Bangladesh market. This is a
potential motorcycle market in South Asia. The report will analyse the
environmental factors, which affect to Piaggio Vietnam (PVN)’s Global Strategy.
Besides, the report points out which segment is suitable for PVN when launching
Vespa LX 125 in this market. Of course, a proper marketing strategy will be
proposed in this report and which mode of entry will be suitable to enter to
Bangladesh market? It is useful to consider carefully about this Market due to its
complexity. Therefore, PVN needs to take some proper steps and find out
thoroughly about this market.
3
LIST OF FIGURES
Figure 1: View Bangladesh's Motor Vehicle Registered: Bangladesh: Total from
1995 to 2017 in the chart: ................................................................................................ 12
Figure 2: Market share of motorcycle brands in Bangladesh 2013........................... 14
Figure 3: Division of Bangladesh .................................................................................... 21
Figure 4: PVN’s Distribution system............................................................................... 22
Figure 5: The main mode of transportation ................................................................... 22
4
LIST OF TABLE
Table 1: Preliminary Screening ......................................................................................... 8
Table 2: Main Competitors in the two-wheelers market .............................................. 13
Table 3: Comparison among the motorcycle Bands ................................................... 15
Table 4: Market segmentation in Bangladesh .............................................................. 17
Table 5: Income Group..................................................................................................... 18
Table 6: The level of adaptation or standardisation of Vespa LX 125 ...................... 19
Table 7: Vespa LX 125’s Promotion Mix ....................................................................... 24
Table 8: Justification of strategy choice......................................................................... 26
Table 9: Online channel marketing ................................................................................. 27
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ABBREVIATIONS
PVN: Piaggio Viet Nam
VN: Vietnam
UIS: Unesco Institute for Statistics
A4AI: Alliance for Affordable Internet
SEZs: Special Economic Zone
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INTRODUCTION
Piaggio Group is the largest scooter and motorcycle producer in Europe,
established in 1884. An intensive international expansion program was
implemented by Piaggio Group to expanding their business as well as approaching
customers over the world. As a result, Piaggio Vietnam Co. Ltd (PVN) was set up
in 2009 with a huge factory in Vinh Phuc. In five years, has produced more than
600,000 vehicles. (Piaggio Group, 2018). One of the key strategies of (PVN), is
how to take advantage from Utilisation of excess capacity (Winston, 1971) as well
as Brand name leverage. Bangladesh is known as a country with high population
density and transport infrastructure is developing. Hence, it will create a huge
opportunity for an Automatic industry in general and two-wheeler industry in
particular. Taking advantage, PVN would like to export to Bangladesh Market,
beginning with a scooter: Vespa LX for in order to meet its strategy.
The purpose of this report is to study and propose a Global Marketing Strategy for
PVN. The first section focuses on Market Selection and Environment Analysis.
Next, it mentions Marketing Mix and finally, a market entry strategy will help Vespa
LX survive in Bangladesh.
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I. MARKET SELECTION AND JUSTIFICATION
According to a World Bank report (2016), is a positive sign for Southern Asia’s
economy because economic growth rose significantly from 7.1 per cent in 2016 to
7.3 per cent in 2017, and making it become the region has the fastest-growing in
the world. Besides, these countries together make up about one-fourth of the
world’s population (1,653 million) (CIA, 2018). Therefore, Southern Asia is a huge
potential market.
1) Market selection process

a) Preliminary Screening
In order to identify which country in Southern Asia is the targeted market, it is

usually recommended four criteria: market growth, market size, competitive
intensity, risk level (Lloyd C. Russow, Sam C. Okoroafo, (1996). Table 1 shows
key factors for the market selection in an overview of the most.
Table 1: Preliminary Screening
Country GDP-Per Population Competitor Political Score

capita risk
Bangladesh 50 80 50 50 5900
Nepal 80 10 60 60 5200
Bhutan 20 30 20 60 3100
Weight 40 25 15 20
Source: (CIA, 2018) (The Word Bank, 2018)
b) Selection country
It is quite obivious to recognize that Bangladesh has the highest total score
comparing with other countries. Although Income is the most important criteria to
select the market, Nepal’s population is too small as therefore it is not suitable for
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PVN’s Marketing Strategy. Besides, Bhutan is not a potential market with the
lowest GDP.
2) Justification for Bangladesh Market
There is a truth that, Bangladesh has a fairly favourable environment for the
motorcycle industry. Firstly, there is a remarkable effort in decreasing poverty in
Bangladesh, thank to “sustained economic growth”. Moreover, economic growth is
6 per cent and touching to 7.9 per cent in 2017/218 (The World Bank, 2018). As a
result, the demands for urbanization especially transport get a raise rapidly. These
positive signs will create a leverage to stimulate customer demand significantly.
On the other hand, one of the major factors making Bangladesh become a huge
potential two-wheelers market is population. To be more specific, according to CIA
(2018) Bangladesh has a high population density and young population with the
proportion of the population under 40 years old accounted for 75 per cent. Besides,
an inadequate transportation infrastructure (Sajjadur Rasheed, 2000) also helps
motorcycle become a very good solution to avoid traffic jam and mass-
transportation as well as satisfying personal transport for speedy and simple
movement. From an overview, it is expected that Bangladesh’s two-wheelers
market will increase rapidly in future, and create advantage opportunities to Vespa
LX can succeed in this market.
3) Marketing environment analysis
a) Macro environment analysis

Political factors: political risk index is low, but having good
relationship with VN
According to CIA (2018), the Parliamentary republic is Bangladesh’s government

types with over one hundred parties, in which “Bangladesh Nationalist Party (BNP)
Awami League (AL)” are the dominant parties. In addition, Political Risk Index of
Bangladesh is 3.5, quite lower than the other countries. Political instability,
therefore, affects significant Global Marketing of PVN when launching Vespa LX
into Bangladesh Market.
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Nonetheless, form a more positive side, Bangladesh government is quite a

goodwill toward international cooperation such as participating international
organization WTO. More specifically, there is a favourable sign about the
relationship between Vietnam and Bangladesh in all aspects since the diplomatic
ties have been established for 45 years. This plays a significant role in creating
favourable conditions for PVN infiltrating through this potential market.
Economic factors: economic growth
As mention, there is a remarkable effort for developing economy although

Bangladesh is facing about problems such as: “political instability, poor
infrastructure, endemic corruption, insufficient power supplies, and slow
implementation, economic growth” approximately six per cent since 2005 (CIA,
2018). With a rapid growth, Bangladesh became a “lower-middle-income country”
in 2015 and maybe an upper-middle income country in 2021(Worldbank, 2018).
Besides, GPD per capita of Bangladesh is increasing continuously form 2015 to
2017, relatively 3800 USD (2015) and 4200 USD (2017). Thank to economic
growth, it is expected that the motorcycle industry will rapidly rise in the
Bangladesh market.
Social factors: it witnessed a remarkable raise in Bangladesh’s literacy

rate
It is no doubt to say that Bangladesh has an extremely high population density in

South Asia. Besides, Bangladesh’s population is significantly crowded with 156.5
million in 2013, estimated 156.5 million in 2018. This helps Bangladesh become
“the 9th most populous country in the world” (World Population Review, 2018). In
addition, the population of Bangladesh from 25 to 50 - year olds accounted for
approximately 45 % (CIA, 2018), is quite suitable with the targeted customer which
PVN in generally and Vespa LX in particularly would like to approach. More
importantly, according to the Unesco Institute for Statistics (UIS), there is a
remarkable rise in Bangladesh’s literacy rate over the past period, up to 72.76% in
2016. To be more specific, women’s literacy rate is from 43.74% to 69.90%, and
for men from 49.83% to 75.62%. It is obvious to say that, Bangladesh’s education
impacts significantly on the perception of the customer choosing better quality
products, especially premium scooter like Vespa LX.
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Technology factors: easy internet access
Not long ago, in 2005, one out of every four people in Bangladesh would go to bed
hungry. However, thanks to the development of Information and Communications
Technologies (ICT) Bangladesh has decreased poverty from 40 per cent in 2005 to
24.3 per cent in 2016 (The World Bank, 2018). Moreover, Bangladesh has joined
into the Alliance for Affordable Internet (A4AI) in 2017, marking the government’s
commitment to reducing broadband prices and enabling affordable internet for all
Bangladeshis (A4AI, 2017). Easy internet access will help increase internet users
in Bangladesh and approach targeted customers effectively through online
marketing activities.
Legal factors
Nowadays Bangladeshi motorcycle market is rising rapidly and for this, it is in
afloat condition. Due to tax reducing cause motorcycle provider companies also
reduced their motorcycle prices. In this fiscal year Finance minister Abul mal Abdul
muhit reduced the subsidiary tax at motorbike importing from 45% to 20%
(Motorcyclevalley, 2018).
Environment factors
There are a lot of environmental problems due to the high population density in
Bangladesh. Hence, in 1989, to solve environment-related issues, Bangladesh
established the Ministry of Environment and Forest (Banglapedia, 2014). The
exponential growth of vehicles over the last decade has forced Bangladesh’s
authorities to set new transport emission standards to curb increasing air pollution,
in a country of more than two million vehicles and little effective monitoring
(Thethirdpole .net, 2017). It is extremely essential to understand deeply about
regulations of Environment Law and it will be a huge advantage for PVN if they
want to enter into Bangladesh market.
b) Micro environment analysis
Kotler, Armstrong (2013) stated that all factors that affect the capacity of the
company in serving customer is the microenvironment. These are “the company,
suppliers, marketing intermediaries, customer markets, competitors, and publics”
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Customer analysis
According to Thedailystar (2018) mentioned that recently, there are 19 per cent of
households own motorbike in Bangladesh, while the number in India is 47 per cent.
In addition, 60 per cent of households have two-wheelers in China, and the
percentage of households having the motorcycle in Malaysia and Thailand,
relatively 83 per cent and 87 per cent. This makes Bangladesh’s the two-wheeler
market becomes more potential. In addition, there is a significant increase in
Bangladesh's Motor Vehicle Registered from 1995 to 2017 as the table below:
Figure 1: View Bangladesh's Motor Vehicle Registered: Bangladesh: Total from

1995 to 2017 in the chart:
Source: CEIC (2017)
Besides, Maslow (1943) stated that it always has a motive for people to reach their
desired needs. When satisfied, they will find the next level. Therefore, with
economic growth, Bangladeshi not only wants vehicles to use on the narrowed
street but also to express their lifestyle, their personality. These advantages help
Vespa LX become more attractive in premium scooter segmentation.
Competitor analysis
Bangladesh is a huge potential market with high population density, hence, there
are many motorcycle companies trying to get market share as soon as possible.
The table below will point out the main competitors in two-wheelers in Bangladesh:
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Table 2: Main Competitors in the two-wheelers market
No Competitors’ name Description
1 BAJAJ Bajaj is one of the huge motorcycle company in

Bangladesh. They have a wide after sales service
network with reasonable price
2 HERO The largest product line in Bangladesh belongs to

Hero. They also have the countrywide distribution
with dedicated dealers
3 TVS TVS is also a large motorcycle distribution in

Bangladesh. Their target segmentation is low end
with fuel efficiency. Their network is everywhere in
the country with “some dedicated and local
mechanic shops”.
4 HONDA Although Honda is a giant motorcycle in the world,

market share is not too much in Bangladesh,
However, Honda’s after sales service is
outstanding, helping customers fell satisfied
5 YAMAHA Although market share of Yamaha is quite small,
in recent year, there is a slight increase in sales.
Target segment is the mid and low scooter.
Source : Bikebd (2016)
To more understanding, how much percent they are accounted, the figure … with
show particularly:
13
Figure 2: Market share of motorcycle brands in Bangladesh 2013
MARKET SHARES OF MOTOCYCLE BRANDS

BAJAJ DAYAN HERO-HONDA TVS YAMAHA WALTON OTHER
7% 6%
3%
10% 49%
16%
9%
Source: BMMAA
Company analysis
The Piaggio Vietnam factory started the business in 2009. Besides, there is “an
R&D centre for the two-wheeler sector – the first R&D unit set up by the Piaggio
Group in Asia”. With these strengths, PVN is sure to be able to meet even the
toughest demands of Bangladesh’s market. Nonetheless, Bangladesh is a
relatively new market with many difficulties because of the lack of understanding of
the market. Hence, launching Vespa LX 125 is not easy in Bangladesh.
c) Cultural implications
“Culture is a distinctive element of international marketing. Culture means different

things to different people. It does not only denote civilization, but also customs,
tradition and codes. Cultures are just different, not right or wrong, better or worse”;
cited by Cateora & Graham (2002). In addition, Bangladesh is a culture-sensitive
country. For an instant, Muslim is a major religion of Bangladeshi and there is a
huge influence on “individuals’ behaviour, lifestyle, manners, food habits
(halal/haram) etc.” Doole & Lowe (2008). Besides, about 99 per cent of the total
population communicates by their native language: ‘Bangla’. Therefore, PVN
needs to be careful when using pictures or symbols related to their religion as well
as using ‘Bangla’ language for its communication activities.
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d) Buyer behavior
Burnett (2010) said that “Consumer behavior refers to buyers who are purchasing
for personal, family, or group use. Consumer behavior can be thought of as the
combination of efforts and results related to the consumer's need to solve
problems. Consumer problem solving is triggered by the identification of some
unmet need”.
Table… will show clearly about some factors which customers usually consider
when buying a motorcycle
Table 3: Comparison among the motorcycle Bands
Source: International Journal of Multidisciplinary Research and Development

(2014)
According to Omesh (2011) stated that fuel efficiency is one of the most important
things to consider when customer choose a bike. In addition, Franklin and Anand
(2013) pointed out that customers are influenced by peers on purchasing decision
of two-wheelers. The last but not least, Monica and Vishal (2014) found that
service, design, competitive price, … affected significantly to “consumer buying
behaviour in purchasing bikes and their preferences”.
Therefore, Vespa LX 125 will strongly focus on these factors to increase competing
capability.
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II. MARKETING STRATEGY
There is a certainty that PVN needs to have a proper marketing strategy, beginning
with understanding market segmentation and choosing the target segment. Most
importantly, building Marketing Mix is an essential factor for PVN’s Global
Marketing.
1) Market segmentation
One of the important factors needed in global competition is international

segmentation, helping in “developing, positioning and selling products throughout
the world” (Ter Hofstede et al., 1999). Addition, according to Kotler, Armstrong
(2017) stated that “Market segmentation involves dividing a market into smaller
segments of buyers with distinct needs, characteristics, or behaviours that might
require separate marketing strategies or mixes. The company identifies different
ways to segment the market and develops profiles of the resulting market
segments”.
When entered Bangladesh market, although Bangladesh is a “lower-middle-

income country” (World Bank, 2018), premium scooter segmentation is quite
attracted because of the lack of powerful opponents. Therefore, Vespa LX 125 will
attack this segmentation, the table below will point out in detail.
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Table 4: Market segmentation in Bangladesh
Market Criteria
Segmentation
Geographic Urban area, rich cities
Demographic Age: 25- 45
Gender: Male (40%), Female (60%)
Income: middle to high class income
Education: medium to high educated
Occupation: Businessman
Psychographic/ Expressing their personality, lifestyle, fun, independence,

Behavioral safety, effective fule,…Moving easily and fast in daily
Source: Kotler, Armstrong (2017), International Journal of

Multidisciplinary Research and Development (2015)
2) Target segment
“Market targeting (or targeting) consists of evaluating each market segment’s

attractiveness and selecting one or more market segments to enter”. (Kotler,
Armstrong (2017). In addition, Keegan, Green (2015) “Targeting is the process of
evaluating the segments and focusing marketing efforts on a country, region, or
group of people that have significant potential to respond”.
The table … shows that almost the proportion of medium and high income
accounted for 52%, the motorised rate is roughly 86%. Therefore, it is extremely
suitable to choose premium scooter segment for Vespa LX 125.
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Table 5: Income Group
Proportion Model Share

Income Group of income Motorised
Walk Richshaw Transit
group (%) (non-transit)
Low(<12500) 48 73 38 41 14
Medium
49 26 59 56 66
(125000-550000)
High 1 1 3 3 20
Total 100 100 100 100 100
Source: Dhaka transport coordination board (2011)
3) Marketing mix
According to Oxford dictionary (2016) defined that “marketing mix” is “coordinate

and integrate” marketing elements to get effectiveness. It is obvious that each
marketing mix models have to deal with different purposes. One of the popular
marketing mix has used widely as the 4Ps model: Product, Price, Promotion and
Place. In addition, O’Neill, R. (2018) stated that “The marketing mix refers to the
mixture of activities used by a business to deliver its marketing strategy.”
Regarding the marketing mix, it often refers to “adaptation” and “standardization”
strategy. Indeed, Burnett (2011) mentioned that adaptation brings “a competitive
advantage in cost and effectiveness” while standardization is often preferred by
multinational companies.
Therefore, this report will focus on the 4Ps model and take advantage of
adaptation and standardization for global marketing in Bangladesh.
a) Product:
There is no doubt to say that the heart of the advantages and threats in global
marketing nowadays is the product of marketing mix because developing of
product as well as brand, strategies affect greatly “to market needs, competition,
and the company’s ambitions and resources on a global scale” (Keegan; Green,
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2015). In addition, Burnett (2011) defined that whatever offered by a company to

satisfy buyer’s needs is product be it tangible or intangible. Vespa is not only a
normal scooter but also an icon for the vehicle on two-wheelers over the world with
the expression of a unique and distinctive lifestyle. Therefore, Vespa LX 125 owns
outstanding beauties with the combination of classic style and sharp edge modern.
Vespa LX 125 is a consumer product and identify as shopping product, which
customer can buy at motorcycle showroom. Customers buy Vespa LX 125
because of its psychological benefit, helping them express their personality. In
addition, the characteristics of Vespa LX 125 is described sporty, dynamic, stylish
and classic. Moreover, design and technology of Vespa LX 125 have been made
carefully to highlight the spirit of Vespa.
On the other hand, Kotler (1997) mentioned that it is necessary to consider the
level of product to bring more attractive for the product. More specifically, the table
… displays the level of adaptation or standardisation of Vespa LX 125:
Table 6: The level of adaptation or standardisation of Vespa LX 125
Level of Vespa Adaptation Standardisation

LX 125
Core Product Ensuring stability and a

smooth ride on road
Actual Product Color: customize Design

Technology: ABS front
Engine: using iGet instead of wheel, Safe electric side-
3V to ensure low running stand, Immobilizer
costs Taking advantages of
 Adapting Local “Economies of scale in R&D,
environment production and marketing”
Augmented Warranty
Product
Customer support service:
Delivery
 Competing with Local
competitor.
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b) Price
It is true to say that Price plays an important role in Marketing Mix Strategy,
therefore understanding deeply about Price Strategy is essential. Kotler;
Armstrong, (2013) defined that the amount of money was used for “a product or a
service” is Price. Specifically, the sum of all the values that buyers were charged to
own the advantages of products or services, is Price. In addition, there is different
between countries about price strategy, “a product may be positioned as a low-
priced, mass-market product in some countries and a premium-priced, niche
product in others” (Keegan; Green, 2015).
As mentioned above, Vespa is positioned as premium, exclusive scooter with high

value. Therefore, “Customer value-based pricing” Kotler; Armstrong, (2013) will be
suitable. Besides, Hollensen (2011) suggested that some segments of the market
especially niche market, customers are “willing to pay the high price”, it is often
used to market skimming pricing. Although Bangladesh has remarkable economic
growth, compared with the other countries which Vespa is present, Bangladeshi’s
average income is still lower. One more thing, customers are quite price sensitive,
therefore, Vespa LX 125 will be launching at the lower. On the other hand, almost
“customers usually perceive higher-priced products as having higher quality”
Kotler; Armstrong, (2013). Therefore, the price adaption strategy will be applied for
Vespa LX 125 is “psychological pricing”. To be more specific, the targeted
customer of Vespa LX 125 in Bangladesh will pay for the value of Vespa premium
brand.
Regarding methods of payment, PVN will offer to open L/C to the distributor
because of lack of experience in cooperating with the distributor in Bangladesh.
c) Place
According to Doole & Lowe (2001) stated that wherever the products are sold is
Place. In addition, Hollensen, (2011) added that there is a link between
manufacturer and end user thanks to Distribution channels (Place).
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 Structure of channel
Hollensen, (2011) also explained two terminologies “Market coverage” and

“Channel length”. “Market coverage: Coverage can relate to geographical areas or
number of retail outlets, while Channel length: Number of levels (middlemen) in the
distribution channel.”
It is obvious that the target segment of Vespa LX 125 is a premium scooter,

therefore the suitable market coverage is selective and showrooms are located in
the big cities because the population density is high and the proportion of the
population with middle and high-income is better.
Figure 3: Division of Bangladesh
Source: Mediabangladesh (2018)

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In the other side, the figure 4 will illustrated the channel length of PVN as below:
Figure 4: PVN’s Distribution system
PVN Distributor Showroom
The channel length of PVN is quite simple, not too long because of reducing price
increases for the final customers. In addition, controlling maybe get more
difficulties when the distributor system is too complicated. Vespa LX 125 is a
premium scooter, it requires a tighter control to ensure the quality of products as
well as services in the best for end users.
 Managing and controlling distribution channel
One of the most important things to have a proper distributor is to manage and
control the distribution channel. “Distributors know the distinctive characteristics of
their market, and most customers prefer to do business with local partners”
(Hollensen, 2011). PVN’s distributor must have a financial strength because of the
high-value goods. In addition, they are a professional marketing in order to
promote the premium brand. Regular inspection of the showroom system is a must
to ensure the image of Vespa brand.
 Managing logistics
According Hollensen, (2011) stated that the movement between product and
customer is logistics. There are two the main mode of transport in PVN global
strategy: “Road” and “Water transportation”. The figure 5 will show in detail:
Figure 5: The main mode of transportation
PVN Distributor Showroom
Water transportation Road
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d) Promotion
Promotion is the last tools in 4Ps Model and there is obvious to describe the role of
promotion is to “communicate with customers so as to provide information that
buyers need to make purchasing decisions”. Besides, it is so important to consider
which strategy should be: “standardize worldwide or to adopt the promotion mix to
the environment of each country”. Hollensen,(2011). On the other hand, Burnett
(2011) added that “Marketing communication includes all the identifiable efforts on
the part of the seller that are intended to help persuade buyers to accept the
seller's message and store it in the retrievable form”. As mentioned above, the
target audiences of Vespa LX 125 are 25 to 45 years old, middle to high-class
income, medium to highly educated. Their character is fun, style, and they desire
to be recognized. Bangladesh is the new market, it requires a greater effort to
increase brand awareness in Promotion Objectives. Besides, PVN will use the
adaptation strategy in order to satisfy Bangladesh’s environmental factors through
Production mix strategy. According to Kotler; Armstrong, (2013) suggested that the
promotion mix is a mix of tools that “company uses to persuasively communicate
customer value and build customer relationships”. The table below will illustrate in
detail about Promotion Mix Strategy
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Table 7: Vespa LX 125’s Promotion Mix
Promotion Mix Description Adaptation Standardisation
Advertising Print media The content of Key visual form

Advertising Piaggio group
Radio
Outdoor
Online Marketing
Sales promotion Discount Special days of
Bangladesh,
Coupons
Personal selling Dealer’s network Suitable training Basic programmes

courses
Public Press conferences Favourite
newspaper,
relations (PR) Launching event channel
Direct marketing Catalogues Languages,
pictures
Favourite search
Internet engine, marketing
online.
Source: Kotler; Armstrong, (2013);
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III. MARKET ENTRY STRATEGY
1) Mode of Entry: Export directly
According to Hollensen (2011) stated that “generally speaking the choice of entry
mode should be based on the expected contribution to profit. This may be easier
said than done, particularly for those foreign markets where relevant data are
lacking. Most of the selection criteria are qualitative in nature, and quantification is
very difficult”. Although Bangladesh is a huge potential market with high
population density, there is a lot of problem from the unstable polity. In addition,
PVN has limited resources, assets, capabilities to invest directly in the Bangladesh
market.
From the above analysis, Vespa LX 125 will be exported to Bangladesh via direct
way. Regarding what is export directly, Kotabe, Helsen (2010) explained that
“direct exporting means that the company sets up its own export organization and
relies on a middleman based in a foreign market.”
2) Advantage and disadvantage of direct exporting
It is obvious to say that, Exporting has some advantages helping PVN entry
Bangladesh market effectively. Firstly, PVN takes a chance to understand deeply
“market experience” as well as “potential customers”. Secondly, “distribution chain”
is shorter than “indirect exporting”. Thirdly, receiving the support form “local selling”
and controlling “Marketing mix” is better. (Hollensen, 2011)
On the other hand, there are some drawbacks needed consider such as:
Controlling the market price will be weaker due to “tariffs and lack of distribution
control”; the differences of culture, “communication problems and information
filtering” will make PVN get some difficulties.
To more detail, the table below will show about the justification of strategy choice:
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Table 8: Justification of strategy choice
Level High Normal Low
Speed of entry
Unimportant
Rapid changing Ease of exit
market
technologies
Resource
Cultural distance
Consideration Profit potential demands
Congruence with
Integration in to Competitive
host government’s
global network intensive of market
goals
Source: Gillespie & Hennessey (2011)
3) Process of Market Entry
Exporting to Bangladesh requires PVN to having several proper steps to enter this
market. Firstly, there are plenty of motor vehicle regulations that PVN need to
adhere. For an instant, PVN needs to provide for distributors the certification to
guarantee the quality standard when import to Bangladesh market. In addition,
there is Special Economic Zone (SEZs) in Bangladesh, where special tax
incentives for the foreign company are applied and it is also less constrained in
international trade activities. All of this creates advantages significant for PVN to
establish an office here. Then, PVN needs to evaluate the potential distributor,
base on their seeking criteria. More specifically, to become a partner of PVN, it is
required to have a strong enough financial capacity, abundant experience in the
market, a high-level skill and technique staff. Uttara Motors Limited, Runner
Automobiles Ltd, and KR Industries Ltd are high profile, recommend for PVN. After
that, it is essential to implement the approaching customer campaign through
showroom system. To create a buzz for the market, it is required a range of
attracted promotion activities such as Vespa LX 125 launching event, advertising
on newspaper, establishing an official website, marketing online channel, test drive
event, Vespa club,….
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4) Social media in supporting strategy
According to Sajid SI (2016) wrote: “Social media is best Community Press is now
the trend. And for companies it symbolizes a marketing and promotion opportunity
that transcends the standard middleman and connects companies directly with
clients”. Indeed, Social media plays an important role in global marketing
nowadays. It not only helps PVN reduce the cost by shorting time to approach
potential customers but also increase profit. Fortunately, Bangladesh is a country
with the high rate of using social media: “the highest action index, 127, far more
than the US’97” (Sajid SI, 2016). Therefore, using social media in supporting
strategy is essential. The table 9 will show social media channel for the market
entry of PVN.
Table 9: Online channel marketing
Tools Description
Social media Facebook, Youtube, Google Ads,
discuss topic, viral video, review

scooter,
Website Update information scooter,

location showroom, contact,
Personal selling Contact with customer via

(online) telephone, email, ..
Forum Seeding topic, share knowledge,

contact huge forums to PR
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Source: (Abidin, 2017),
27
CONCLUSION AND RECOMMENDATION
Conclusion
It is argued that the fastest growing vehicle industry in Bangladesh is the two-
wheeler industry. Bangladesh’s market becomes more attracted because of high
population density, stable economic growth. However, having a successful
business is not easy with unforeseen environmental factors. Therefore, PVN needs
to justify this market carefully by understanding deeply micro and macro factors,
customer behaviours, cultural implications. In addition, proper marketing strategy is
a key success factor to help Vespa LX 125 have a position in this competitive
market. It is obvious that the market segmentation, which PVN targeted, is the
premium scooter. Hence, the marketing mix has to combine standardisation and
adaptation strategy. The last but not least, Bangladesh is a sensitive market with
threats and opportunities, PVN has chosen direct exporting to entry.
Recommendation
It is obvious that there are some shortcomings in this report because of the
lack of information as well as the limitation of the author’s capacity. Nonetheless,
this report gives some recommendations such as: considering unstable polity,
Bangladeshi’s sensitive price, choosing the suitable distributor. With all the effort,
this author hopes that PVN will have a proper global marketing.
28
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Piaggio Vietnam&#39;s Global Marketing Strategy A

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Student No: 1711826 29th Oct 2018

EXECUTIVE SUMMARY ......................................................................................... 3

environmental factors, which affect to Piaggio Vietnam (PVN)’s Global Strategy.

Vespa LX 125 in this market. Of course, a proper marketing strategy will be

thoroughly about this market.

Figure 1: View Bangladesh's Motor Vehicle Registered: Bangladesh: Total from

1995 to 2017 in the chart: ................................................................................................ 12

Figure 2: Market share of motorcycle brands in Bangladesh 2013........................... 14

Figure 3: Division of Bangladesh .................................................................................... 21

Figure 4: PVN’s Distribution system............................................................................... 22

Figure 5: The main mode of transportation ................................................................... 22

Table 1: Preliminary Screening ......................................................................................... 8

Table 2: Main Competitors in the two-wheelers market .............................................. 13

Table 3: Comparison among the motorcycle Bands ................................................... 15

Table 4: Market segmentation in Bangladesh .............................................................. 17

Table 5: Income Group..................................................................................................... 18

Table 6: The level of adaptation or standardisation of Vespa LX 125 ...................... 19

Table 7: Vespa LX 125’s Promotion Mix ....................................................................... 24

Table 8: Justification of strategy choice......................................................................... 26

Table 9: Online channel marketing ................................................................................. 27

PVN: Piaggio Viet Nam

UIS: Unesco Institute for Statistics

A4AI: Alliance for Affordable Internet

SEZs: Special Economic Zone

Piaggio Group is the largest scooter and motorcycle producer in Europe,

established in 1884. An intensive international expansion program was

implemented by Piaggio Group to expanding their business as well as approaching

as Brand name leverage. Bangladesh is known as a country with high population

density and transport infrastructure is developing. Hence, it will create a huge

opportunity for an Automatic industry in general and two-wheeler industry in

particular. Taking advantage, PVN would like to export to Bangladesh Market,

beginning with a scooter: Vespa LX for in order to meet its strategy.

I. MARKET SELECTION AND JUSTIFICATION

1) Market selection process

In order to identify which country in Southern Asia is the targeted market, it is

Table 1: Preliminary Screening

Country GDP-Per Population Competitor Political Score

Source: (CIA, 2018) (The Word Bank, 2018)

2) Justification for Bangladesh Market

3) Marketing environment analysis

a) Macro environment analysis

According to CIA (2018), the Parliamentary republic is Bangladesh’s government

Nonetheless, form a more positive side, Bangladesh government is quite a

Economic factors: economic growth

As mention, there is a remarkable effort for developing economy although

Social factors: it witnessed a remarkable raise in Bangladesh’s literacy

It is no doubt to say that Bangladesh has an extremely high population density in

Technology factors: easy internet access

b) Micro environment analysis

Figure 1: View Bangladesh's Motor Vehicle Registered: Bangladesh: Total from

Source: CEIC (2017)

Table 2: Main Competitors in the two-wheelers market

No Competitors’ name Description

1 BAJAJ Bajaj is one of the huge motorcycle company in

2 HERO The largest product line in Bangladesh belongs to

3 TVS TVS is also a large motorcycle distribution in

4 HONDA Although Honda is a giant motorcycle in the world,

Source : Bikebd (2016)

Figure 2: Market share of motorcycle brands in Bangladesh 2013

MARKET SHARES OF MOTOCYCLE BRANDS

“Culture is a distinctive element of international marketing. Culture means different

Table 3: Comparison among the motorcycle Bands

Source: International Journal of Multidisciplinary Research and Development

II. MARKETING STRATEGY

One of the important factors needed in global competition is international

When entered Bangladesh market, although Bangladesh is a “lower-middle-

Table 4: Market segmentation in Bangladesh

Piaggio Vietnam's Global Marketing Strategy A

Piaggio Vietnam's Global Marketing Strategy A