MSc BUSINESS DEVELOPMENT AND INNOVATION
Department of Marketing, Entrepreneurship and Strategy
Ulster Business School
University of Ulster
Eoin Killian Costello
Student Number B00570977
Coursework Assessment: Global Marketing Assignment Part 2
January 2011
Word Count (excluding references, bibliography and appendices): 1622
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Explanatory Note
For the purposes of this assignment the education market has been chosen as the target sector and a
market entry plan for Dublin City University’s ICT and Business faculties has been developed with an
accompanying communication strategy for entry to Vietnam. On the basis that the choice of entry
strategy is dictated by the long term objectives of the potential entrant, it is assumed that DCU wish to
establish a permanent base within Vietnam in order to achieve their long term strategic objectives in
the South East Asia region. The factors affecting the decision include the following requirements of
the ultimate strategy:
1. Cost effective: The resources for the project are subject to limits.
2. Timely: Achieve scale before market becomes saturated.
3. Maintain moderate risk manner: Due to the limited funding DCU does not have a large
appetite for risk.
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Market Entry Strategy for Dublin City
University (DCU) into Vietnam
Rationale: The Vietnamese education sector is an attractive market to enter as there are generous tax
incentives available, there is increasing disposable income and predicted rapid long term growth in the
market. Please see Appendix 1 for more detail on each of these points.
1. The market entry strategy
According to Terpstra and Sarathy (2000) the criteria for evaluating foreign market entry methods
depends on the answer to two questions, firstly how well can the entrant market its services through
any particular entry strategy and secondly what are the costs and benefits of the different strategies.
Meyer et al (2008) state that the relative strength and maturity of the potential entrant has a direct
influence on the choice of entry strategies.
As we are dealing with a service the above choice will be influenced by intangibility (i.e. requiring the
presence of the customer and a suitably qualified lecturer simultaneously for the delivery of the
service) and heterogeneity (different experience of the service by different students due to the fact that
different lecturers perform the service ibid. (Terpstra and Sarathy 2000). Erramilli and Rao’s (1993)
research on service firms’ choice of entry method highlights the importance of control as a basis for
making a choice of a particular entry mode. Due to these considerations the entry method that
provides a high degree of control over service quality to the entrant is a considerable influence on the
choice of method for an educational institution. Set against the control imperative are the cost
implications of complete or near complete control (ibid.).
Therefore taking into account the above analysis it is advised that DCU follow the entry strategy
outlined below:
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1.1 Entry Method: It is recommended that a joint venture be entered into with a Vietnamese
institution of high reputation. It is noted that the type of entry strategy has a major impact on
subsequent success (Jeannet and Hennessey 2004) therefore this course is recommended after
consideration of the alternatives which were rejected for the detailed reasons contained in Appendix 3.
1.2 Entry Offering: Establish a joint venture for the DCU ICT and Business Masters offerings (the
so-called current ‘hot fields’ of study according to research by the Netherlands Education Support
office (2009)) as these are the two disciplines in highest demand in Vietnam. This approach will
reduce the risk of under utilisation/failure to win clients (Ashwill 2010).
1.3 Place: Ho Chi Min City (formerly Saigon) has the highest concentration of upwardly mobile
families with the necessary disposable income. Many private schools and universities have been
opened in the past 10 years in Ho Chi Minh City to meet this demand. As a result the new venture will
also potentially benefit from the cluster effect (Maine et al 2008) of staff and resource availability.
1.4 How: In terms of the offering the one-year Master's course is increasingly popular with
Vietnamese students (British Council 2010) therefore Masters in Business and ICT disciplines are
recommended as the initial offering. By adopting a one year approach risk is reduced and the entrant
can build on their experience. Further considerations on the composition of the initial offering are
included in Appendix 7.
1.5 Ownership and control: It is recommended that the joint venture be 50/50 in terms of legal
ownership with the local provider however DCU should:
A. Retain control over curricula and intellectual property.
B. Include an option to purchase an increasing percentage of the joint venture once agreed
milestones have been reached.
The physical property where tuition is provided should be in the ownership of the local partner to
avoid any restrictions under Vietnamese law associated with property ownership (Dasgupta et al
2008).
1.6 Finances and pricing: Particular attention will need to be paid to costs in what is a high inflation
country (education inflation was running at 18% per annum in 2009, please see appendix 6). The
necessary sales projections will need to be supplemented with detailed cost data (Jeannet and
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Hennessey 2004). Pricing of student fees will also be a difficulty given the low fees typically paid in
Vietnam (undergraduates pay 3.5million dong on average per annum which is approximately €140
(Runckel 2009).
1.7 Industry Standards: While there are no specific industry standards applied to international
education providers, those wishing to engage in joint venture arrangements with Vietnamese
institutions need to satisfy the partner institution in relation to course content (Austrade 2010).
Advantages and Disadvantages of the proposed market entry strategy
The advantages of the proposed market entry strategy include overcoming barriers to entry, risk
minimisation (while retaining the ability to achieve DCU’s long term goals), increased expertise and
feedback for DCU, higher returns and potential for growth, increased quality control and reduced
requirement to deal with local red tape. The disadvantages include sourcing suitably qualified staffing
due to shortages, relatively high costs, conflicting objectives and working practices with the joint
venture partner and finally the relatively high failure rate for joint ventures in Vietnam.
For a detailed discussion of the advantages and disadvantages please see Appendix 4.
2. The communication strategy
The stages involved in the development of the communication strategy are:
1. Market research: Marketing creates strategies to work towards the goals of the joint venture
but to do this understanding of the market place and the target customers must be gained from
market research and this will then inform the marketing mix adopted ( Churchill and
Iacobucci 2005).
2. Developing the marketing mix: Onkvisit and Shaw (2009) state that the marketing mix
comprises price, place, product and promotion. Price (fees in this case) considerations are
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discussed in section 1.6 Finances and Pricing above, place is identified in 1.3 Place and the
product offering is identified in 1.2. Promotion is composed of personal selling, sales
promotion, public relations, direct mail, trade fairs and exhibitions, advertising and finally
sponsorship.
3. Developing the communication strategy: This is outlined below.
Developing the communication strategy
According to Onkvisit and Shaw (2009) to be successful in a marketing context communication must
observe a five stage process consisting of source, encoding, information, decoding and destination. In
order to ensure the correct encoding (and maximise the potential for the message to resonate with the
target audience) the communication strategy for the new joint venture will be informed by the
following considerations.
Legal requirements on content
Advertisements and promotions will need to take cognisance of government rules concerning probity,
dissent and accuracy (for more information please see Appendix 6).
Cultural norms in Vietnam
Branding is very important to Vietnamese which has given US and UK providers an advantage over
other providers of international education (Ashwill 2010) therefore exploiting Ireland’s brand and
reputation in education will be a key message.
Another key message will be the advantage of avoiding leaving family for study abroad but still
benefitting from a European quality education. Vietnam is a very family orientated society and many
people cannot leave jobs and families behind to study abroad (Ashwill 2010).
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The needs of the target student market
The communication messages need to take account of research concerning the student’s needs which,
according to Bonnema and Van der Waldt (2008), include factors such as employability prospects,
course content, student experience, sporting aspects and financial aspects.
While looking at the advertisements of competitors on one of Vietnam’s international education
marketing websites (such as http://www.hotcourses.vn , please Appendix 5 for samples) it would
appear that the key factors include:
1. Level of tuition fees
2. Learning experience
3. Student experience
4. Job prospects
The current market environment in Ho Chi Minh City
It is recommended that brand name protection of the names used to promote the individual courses
and the joint venture institution is put in place in advance of any publicity as piracy is a problem in
the very competitive education landscape of Ho Chi Minh City.
Also it will be important to emphasise the bona fides of the joint venture as there are a number of
degree programs offered by unaccredited schools (or “diploma mills” (Ashwill 2010)) in the local
market.
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The communication mix
In terms of the formulation of the advertisements it needs to be borne in mind that clients in emerging
markets are generally looking for immediate results with a physical "call to action." (Terisse 2009).
All promotions should use preferred sources that prospective Vietnamese students consult when
deciding on a tertiary institution for further or higher education which would includes:
Print – Magazines such as Kien Thuc Ngay Nay are popular with the target market of affluent
teenagers and young adults.
Internet – Websites such as http://www.hotcourses.vn are important sources of information
for the target market of teenagers (please see appendix 5 for sample). Less than 2% of
Vietnamese households have access to the internet however the target market of under and
post graduates Vietnamese do use the internet in internet cafes to seek tertiary education
options.
Exhibitions/education fairs: These are common in Vietnam, for example the European Higher
Education Fair takes place in Ho Chi Min City every two to three years.
Public relations: Given that Vietnamese teenagers are enthusiastic fans of European soccer it
might be an idea to host an event with an Irish soccer theme to launch the courses.
TV advertising is not recommended due to its cost and lower ability to reach the target audience in
Vietnam. Personal selling is not recommended due to the cost of the intensive use of a sales force.
Conclusion
The market entry strategy proposed seeks to achieve the goals of DCU in a timely, cost effective
manner while exposing the entrant to minimum risk. The communications strategy proposed
seeks to establish the joint venture in the attractive niche of providing an alternative to studying
abroad while still experiencing a European standard of education.
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REFERENCES
Allens Arthur Robinson Limited 2010, Legal Guide to Investment in Vietnam.
Ashwill, M. (2010) Vietnam: A Rising Star on the U.S. Higher Education Scene. World Education
Services, 23(6).
Austrade 2010, 8 Jul 2010-last update, Education to Vietnam. Available:
http://www.austrade.gov.au/Education-to-Vietnam/default.aspx [9 Jan 2011] .
Bonnema, J.; Van Der Walt,D.; (2008) Information and source preferences of a student market in
higher education International Journal of Educational Management, 22(4).
Bradley, F. (2005) International Marketing Strategy. Fifth Edition, FT Prentice Hall
British Council 2010, Vietnam education market introduction - Education UK Marketing. Available:
http://www.britishcouncil.org/eumd-information-background-vietnam.htm [2011, 1/9/2011] .
Clark, N. 2010, August 2010-last update, Higher Education in Vietnam: Student Growth, Faculty
Shortages and International Partnerships. Available:
http://www.wes.org/ewenr/10aug/practical.htm [09/01/2011] .
Churchill, G. & Iacobucci, D. (2005) Marketing Research - Methodological Foundations.
Washington: Thomson Corporation.
Dasgupta, V. & Knapp, A. 2008, Forecasting office capitalization rates and risk premia in emerging
markets [Homepage of DSpace@MIT], [Online]. Available:
http://dspace.mit.edu/handle/1721.1/59495.
Government of Vietnam 2005, Socio-economic Development Plan 2006-2010.
Jeannet, J.,David (2004) Global Marketing Strategies. 6 edition edn, Houghton Mifflin.
Maine, E., Shapiro, D. & Vining, A. (2008) The role of clustering in the growth of new technology-
based firms. Small Business Economics, 34(2), 127-146.
Meyer, K., Estrin, S., Kumar Bhaumil, S. & Peng, M. (2008) Institutions, resources and entry
strategies in emerging economies. Strategic Management Journal, 30, 61-80.
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Netherlands Education Support Office 2009, 2009-last update, Vietnam's Higher Education - Trends
and Strategies. Available:
http://www.nuffic.nl/home/docs/neso/neso-e-newsletter/2010/vietnams-higher-education-trends-
and-strategies.pdf [09/01/2011]
Onkvisit, S. & Shaw, J. (2009) International Marketing - Strategy and Theory, Third Edition
Pinsent Masons 2009, Sept 2009-last update, Making it Easier to do business in Vietnam
[09/01/2011].
Quang, T., Swierczek, F.W. & Chi, D.T.K. (1998) Effective leadership in joint ventures in Vietnam: a
cross-cultural perspective. Journal of Organizational Change Management, 11(4), 357
<last_page> 372.
Runckel, C. 2009, 01/10/2009-last update, The Education System in Vietnam Available:
http://www.business-in-asia.com/vietnam/education_system_in_vietnam.html [2011]
Schwab, K., Porter, M. & Sachs, J.: 2002, The Global Competitiveness Report 2001–2002, Oxford
University Press, New York • Oxford.
Terisse, S.A. , New Rules for Brand Management in Emerging Markets. Available:
http://chiefmarketer.com/disciplines/branding/0106-brand-management/ [2011, 1/12/2011]
Terpstra,V.: Sarathy,R.: (2000) International Marketing. 8th Edition. Dryden Press
US Department of State 2010, Political System of Vietnam. Available: http://www.vietnamembassy-
usa.org/learn_about_vietnam/politics/ [02/12/10].
Vietnam Ministry of Education and Training 2010, 11/02/10-last update, Report on the development
of tertiary education system, solutions to ensure and improve the training quality [Homepage of
Vietnam Ministry of Education and Training], [Online]. Available: http://en.moet.gov.vn/?
page=1.9&view=19704.
Young, S., Hamill, J., Wheeler, C. & Davies, R. (1989) International Market Entry and Development.
Harvester Wheatsheaf
Zhan, W., Chen, R., Erramilli, M. & Nguyen, D. (2009) Acquisition of organisational capabilities and
competitive advantage of International Joint Ventures in transiation economies, The Case of
Vietnam. Asia Pacific Journal of Management, 26(2).
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Zhenhui, R. 2001, 2001-last update, Matching Teaching Styles with Learning Styles in East Asian
Contexts. Available: http://iteslj.org/Techniques/Zhenhui-TeachingStyles.html [2011,
1/10/2011].
APPENDICES
Appendix 1
Rationale for selecting education as the target sector:
1. The political establishment in Vietnam are prioritising investment in education in terms of
incentives such as cuts on import duties and tax concessions (Pinsent Masons 2009) in order
to achieve a 10% increase in university enrolment (Government of Vietnam 2005). Full
details of the incentives can be found in Appendix 2.
2. Spending on education: Total consumer expenditure on this sector has risen significantly,
reaching VND 45,048.9 billion in 2007(up 110.5% on 2006), for further information please
see Appendix 6.
3. Considerable long term opportunity exists in education as only about 2% of the population
currently moves into higher education (Runckel 2009) due to poor local provision and a
rapidly increasing young population. The result is that in excess of 20,000 students study
abroad each year.
Appendix 2
Tax Incentives
In “factor-driven” economies with mainly extractive type economic activity, Schwab and Porter argue
that the focus of government should be on enhancing the basic requirements of economic
development, such as education (Schwab and Porter 2001). The government of Vietnam recognises
that its objectives will not be achieved without foreign participation (Austrade 2010) and has
introduced relevant incentives.
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In March 2000 a decree (No. 06-2000-ND-CP) was issued that provided incentives for foreign
investment in education and training, healthcare and scientific research.
According to the decree, educational and scientific research establishments shall:
Enjoy the income tax rate of 10 per cent during the entire duration of their operations
Be entitled to exemption from income tax for a period of four years from the time of profit-
making
Have a reduction of 50 per cent for the subsequent four years
Foreign partners are also encouraged to establish educational institutions to provide vocational and
tertiary education for both Vietnamese and foreigners as joint ventures, under business cooperation
contracts or as wholly foreign owned ventures.
Source: Ministry of Education and Training, Vietnam
Appendix 3
Rejected market entry strategies and reasons for rejection:
100% owned: Acquisition of a publicly funded tertiary institution would not be permissible
by the authorities. Acquisition of a private tertiary institution in Vietnam from Vietnamese
owners is very likely to be seen as exploitation or a blow to national pride (Onkvisit and Shaw
2009) while acquisition from non-Vietnamese owners is too fraught with risk due to poor
quality and potential legal difficulties. Starting a greenfield investment would fail to achieve
sufficient scale before competition in the market is overwhelming.
Cooperation contracts: Such an approach would not achieve the objective of the entrant as
typically these contracts are not designed to further the objectives of the entrant, rather they
provide services and know-how of mutual benefit to both parties.
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Franchise/licensing: Given DCU’s long term strategic aims this route may simply be
nurturing another competitor in the region for the future (Onkvisit and Shaw 2009). Another
issue is the lack of direct control of curricula and quality.
Appendix 4
Advantages and disadvantages of the recommended market entry strategy
Advantages of the recommended market entry strategy include:
1. Overcoming barriers to entry: Bradley (2005) cites this as a prime reason for choosing this
mode of entry. While the government does not implement any tangible barriers in the area of
education investment culture and the “‘rules of the game’ in the host economy (Meyer et al
2008 ) represent barriers.
2. Risk minimisation: According to research by the Netherlands Education Support office (2009)
this entry mechanism is currently the most common for education entry. Competition will
intensify in the coming years and the joint venture approach offers a faster way to achieve
scale necessary in the market. 81 non-public universities and colleges emerging in the past 10
years (Vietnam Ministry of Education and Training 2010).
3. Expertise and feedback: The joint venture route facilitates greater control, information
feedback from the foreign market and the development of expertise (Young et al 1989).
4. Higher returns and potential for growth: Bradley(2005) states that this course cultivates close
contact with customers, suppliers and the government thereby increasing the long term
growth potential. The returns are also greater than the other routes(apart from direct 100%
ownership). Furthermore given that DCU’s long term objective is to achieve a significant
presence in the South East Asia region with an increasing percentage control of the joint
venture the findings of Zhan et al (2009) support the joint venture route, they find that the
positive impact of knowledge based resources on the joint venture’s competitiveness is
significantly enhanced as the ownership by the foreign parent increases.
5. Increase Quality control, reduce requirement to deal with local Red tape and avoid the need to
deal with corrupt government officials (the joint venture partner will use their local
knowledge to deal with that).13
Figure 1 Risk rises with degree of commitment – Source International Marketing Strategy – Frank
Bradley 2005
Potential disadvantages of the recommended strategy:
1. Staffing: The onus will be on DCU to provide the bulk of the suitably qualified staff for the
joint venture as less than 30% of local lecturers have a Masters or above (Government of
Vietnam 2005). The problem that this will present is that wages in the West of lecturers are
much higher and student fees paid are lower. Expatriate employees working for over 3
months require a work permit and lasts for a maximum of 36 months (Allens et al 2010).
2. Cost: While the Vietnamese Ministry of Education and Training is keen on Vietnamese
institutions forming strategic partnerships with foreign stakeholders from different countries
they expect the costs to fall predominantly on the foreign provider. For example the expected
level of funding and the nature of participation by strategic partners in the proposed New
Model University program is considerable, €100 million in the case of France (Netherlands
Education Support office 2009).
3. Conflicting objectives and working practices: In Vietnam student to teacher ratios have
increased from 6.6:1 in 1987 to 28:1 in 2009. At private universities, the student overload on
lecturers is considerably higher (Clark 2010). This may present culture challenges to DCU
lecturers.
4. Failure rate for joint ventures: While the recent past has witnessed difficulties in joint
ventures located in Vietnam (high profile failures or withdrawal cases, disputes between joint
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venture partners, problems associated with the lack of transparency in the law (Quang 1998))
the situation is improving. Dispute resolution in Vietnam is still however subject to an
uncertain legal and judicial system. If an attempt is made to reduce this risk a choice of
foreign governing law for the joint venture will not release a foreign investor from any
obligations under Vietnamese law (Allen et al 2010).
Ongoing Relationships: Once established via the entry method proposed (and taking into account
DCU’s long term strategy) it is recommended that, once established in the country, DCU maintain
good relationships with educational organisations, particularly the Ministry of Education and
Training, international aid organisations including World Bank and Asian Development Bank to
ensure that the development of funding programs for education and training infrastructure take
account of the interests of the joint venture (Austrade 2010).
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Appendix 5
Samples of promotional pages and advertisements
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Translated version
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Appendix 6
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Appendix 7
Further considerations concerning the initial offering
In terms of developing the Masters course content for the local market Bradley (2005) differentiates
between services that require little contact (whereby standardisation is possible) versus high contact
services (which will need to be culturally sensitive and modified accordingly). Education is a high
contact service and therefore the modification required will need to be agreed with the local partner.
In terms of teaching style it must be borne in mind that the typical student in Vietnam will be
accustomed to a passive, teacher led education with an emphasis on rote memory (Zhenhui 2001)
which might present cultural difficulties for a modern European Masters programme.
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