E-commerce Industry Analysis and Marketing Strategies

This assignment involves a detailed analysis of the e-commerce industry in Vietnam, with a specific focus on Lazada. It examines the company's market share, customer complaints, and strategies for growth and expansion. The report also discusses the importance of marketing in making a product successful, as well as the impact of human resource management policies on business and market strategy implementation. Additionally, it explores the role of marketing in expanding target audiences and increasing market share.

Nguyen Thu Tra_10190649_ME_A1.1

Contents
1. Introduction.................................................................................................................3
1.1. Definition of marketing..........................................................................................3
1.2. Applying for Lazada..............................................................................................3
2. Major findings..............................................................................................................4
2.1. The important roles and responsibilities of Marketing..........................................4
2.1.1. Meet customer’s needs and wants................................................................4
2.1.2. Widen market.................................................................................................4
2.1.3. Follow the trend and face competition...........................................................5
2.2. The important of marketing department influences and interrelates with other
departments in the organization.....................................................................................6
2.2.1. Finance department.......................................................................................6
2.2.2. Customer service department.......................................................................7
2.2.3. Human resource department.........................................................................8
3. Conclusion..................................................................................................................8
4. Reference list..............................................................................................................9

1. Introduction
Lazada is the e-commerce platform and launched in Vietnam in 2012. After eight years, the
development of Lazada increase dramatically and having a position in the Vietnam e-commerce
industry. In this report, the author will provide more details about Lazada’s marketing in three
main parts: the definition, the roles, and responsibility of marketing, the way of Marketing
department influences and interrelates with other departments in the organization.
1.1. Definition of marketing
Philip Kotler (2017) said that Marketing is how companies engage customers, build strong
customer relationships, and create customer value to capture from customers in return. There is
more than a step for the company to evaluate and plan to understand the marketplace and
customer needs and wants. Exchange of value is trade the information, products, or services
between customers and the company. When the products are sold, the exchange value is paid
by customers after using the perceived-value. Customers have the perceived value, which
evaluated the difference between all the benefits and all the costs of competitors' offerings.
Furthermore, customer value and satisfaction, satisfied customers are more likely to be loyal
customers and give the company a larger share of their business, called build strong customer
relationships. To make customer satisfaction, which depends on the products' performance, is
related to its expectations. And the last, capture value from customers is a significant action to
create superior customer value. The firm makes satisfied customers who stay loyal and buy
more.
1.2. Applying for Lazada
Applying for Lazada, Lazada is an e-commerce platform, so to win customers' trust when
shopping online is the goal that Lazada focuses on. All of the services were suitable for the
customer's wants and demands. Hence, the first step to join the Vietnam e-commerce industry,
Lazada, has to understand the marketplace and customer's desires and needs. After that,
Lazada creates value for the customer by connecting between partnership and customers
(model B2C). Both Lazada and customers exchange value, including information on products or
customer services. So the relationship between customers and the company becomes close-
knit. The customer's evaluation between the costs and benefits of Lazada and competitors
offerings, they have a comparison to decide on the next purchase. Then, Lazada builds
engagement and strong relationships with chosen customers who regularly shop in the following
assets. As a result, Lazada has many incentives programs every month to capture value from

loyal customers and make them satisfied with their services. That helps the company increased
significantly long-term customer equity and a more significant share of customers.
2. Major findings
2.1. The important roles and responsibilities of Marketing
2.1.1. Meet customer’s needs and wants
Listening to customer's needs and wants is the primary responsibility of marketing.
Understanding customer is a fundamental task of marketers. They research customers' needs
and develop the quality of products and services to satisfy customers (Bayus L. B., 2008).
That is the initial step to create value then build strong relationships to capture value from
customers.
The strategy of Lazada is "customers are kings," they bring high-quality service and
experience for customers. Back in 2012, the e-commerce platform in Vietnam was the new
industry. At that time, the number of people using the internet and smartphone increased
significantly. Lazada knows Vietnamese do not trust online shopping; they want to buy
authentic products at affordable. So that is the priority factor for Lazada becoming model B2C
(business to customer), the authentic diversity products are selected strictly before selling on
the platform. The highest percentage of Lazada's sales is Technology devices such as mobile
& electronics, respectively, 20% (Hayden capital,2018). Lazada provides a variety of
affordable products because it has a close-knit relationship with suppliers. As a result, many
incentive programs capture value from loyal buyers and attract new buyers. All of the
elements, including prices, various products, and online services, stimulate the customer's
behaviors to buy.
2.1.2. Widen market
Widen target market is essential for marketers to have the right marketing plan to access
customers. Begin to widen the target market. Marketers have to define the market by research
to identify customers, including age range, gender, or income (Keirn A., 2018). The
demographics are useful to reach potential customers. After the first step, marketers have a
foundation to determine market segmentation and implement wide the market. As can be said
that widening the target market is a common strategy for the growth of business and increase
revenue
The core values of Lazada are the customer. Initially, Lazada focused on high-segment
customers, so the product's cost is more expensive than other e-commerce platforms. Hence,

the number of Lazada's buyers and profits are less. So appealing to more customers at
various income levels to have more revenue, Lazada has to change its strategies and provide
diverse products affordable for customers' mid-range income. That is a reason why Lazada is
easy to approach many users in different levels of income. As a result, It helps Lazada
dramatically increase the number of buyers and profits which more than the competitor.
2.1.3. Follow the trend and face competition
In Marketing, follow the trend to improve the products and services, which is critical to
satisfying customers. According to Freeman, Edwards & Schroder (2006), competition in a
market encourages competing firms to show their innovation when serving customers
severely. In idensity market, there are many new products, new services are provided in each
day to compete with others. Innovation is necessary for increasing customer’s value.
Howerver, track trend and monitor competition which are threats and challengens for the
applicant of company (Lynn,1994).
Vietnamese e-commerce market growth significantly in recent years, so competitive
orientation is essential and necessary. Lazada can make competition with other e-commerce
platforms such as Shopee or Tiki. Since Lazada becomes a subsidiary of Alibaba ( Especially
when customers want to “hunt” sales of products or vouchers each year, Lazada regular
organize event 11.11 day (party of discount) with various goods. And Lazada promotes
incentive programs on different channels to attract customers buying instead of Shopee, Tiki.
Lazada understands the Vietnamese needs and demands that they trend buying foreign
goods, so Lazada creates “LazGlobal” (Lazada Global – international goods area). It is easy
for customers to order online. Furthermore, it has flexible logistics and payment systems
because they have wares houses in different southeast Asia countries. Hence, the delivery
system of Lazada efficient to deliver quickly. Those are the strengths of Lazada, which are
advertised on social media.
However, according to iPrice, in Q4/2019, Lazada just third-ranked in market share in the
Vietnam e-commerce industry. This data shows that Lazada’s marketing to attract users
buying on apps is less inefficient than competitors.

Figure 2. The market share of e-commerce platforms in Vietnam
2.2. The important of marketing department influences and interrelates
with other departments in the organization
2.2.1. Finance department
Finance is directly related to marketing plans and campaigns. There is a close-knit
relationship between the marketing department and the finance department. The finance
department's task is to set the budgets, the priority element for marketers to develop
marketing plans (Abratt R., Beffon M. & Ford J., 1994). The finance department focuses on
cost allocation while marketing concentrates on boosting promotion products through different
channels to approach customers. Moreover, all of the marketing plans need to forecast the
budget, and it relevant to revenue and various business costs. The finance department has to
analyze and balance costs to make efficient marketing plans to improve sales and maximize
profit.
Lazada is well-know for various incentive programs, so each marketing campaign's sponsor
cost is a severe problem. During the initiative launched in Vietnam, Lazada was the same
competitor, spending plenty of costs implementing promotions to attract customers. It leads to
a lower marginal profit, the higher the total cost (Van Linh, 2019). If Lazada follows a strategy
that spends too many values for sponsor promotion campaigns, this is not an excellent way to
develop it. In the Vietnam e-commerce industry, Lazada, Tiki, and Shopee directly from the
competition in discount and events shopping online in feature ways of each company.
In 8 years, Lazada has loyal customers and to capture value from them. Lazada spends most
of the time organizing combination discount events shopping online with activity
entertainments on mobile apps. In conclusion, it helps reduce the costs of sponsor products,
and it also brings new exciting experiences for Lazada buyers.

2.2.2. Customer service department
According to Berry (1983), customer relationship management has its roots in relationship
marketing. The function of the customer service set in an organization is a cross-functional
cooperation issue. It directly impacts a connection with business activities (Christopher M.,
Payne A. & Ballantyne D., 1991). Customer service combines with the marketing department
to keep customers and get them in the first place. The goals for this activity are creating value
for customers and capture customer value. Following Christopher M. and his colleagues
reported in 1991, to have maximized profit in the long-term, it depends on the customer
service department to shift from transaction-based to marketing. It is crucial to appeal to new
customers and retain loyal customers via customer relationships' efficiency management.
Customer service's main tasks are collecting, coordinating, and analyzing the data from
customers' feedback. The review of customers about the quality of products and services also
contributes to the development of products. It helps marketers have the precise information to
have a reasonable marketing plan for approaching potential customers.
Figure 3. The relationship amongs marketing, customer service and quality
(Christopher M., Payne A. & Ballantyne D., (1991)

Lazada has professional customer care staff. They chat with customers 24/7 and have a
hotline 24/7, which is an easy way for customers to find support if they have any problems.
Lazada takes care of the online buyer's experience. That is why, after the successful order,
Lazada regularly sends a service questionnaire to measure customers' experience via emails
or telephone. All of the feedback is collected, summarized, and analyzed by the customer
service department, improving the quality of services. Marketers adjust the marketing plan
suitable for customers' wants and needs for appealing to new customers and retain loyal
customers.
However, in the past, Lazada’s customer service department did not meet the needs of
customers. They had many problems with the low quality of products and services, such as
time-consuming delivery or return products policy. All of the issues made buyers were
insufficient trust in Lazada, and their satisfaction reduced significantly at that time. As a result,
the marketing plan of Lazada inefficiency in the retention of customers and capture their
value.
2.2.3. Human resource department
In an organization, the Human resource department is as important as others. As can be seen
from outside the organization, most people believe that the HR department and marketing
department are the separate departments. In comparison, the HR department concentrates on
internal, Marketing focus on external. But, both of them supporting together, marketing and HR
build the identity of the company. From an interior view, human resource management and
marketing's relationship is from an internal perspective. As can be said, that is an idea for
marketers to find ways to adjust all of the company's functions to satisfy customers (Collins and
Payne, 1991).
The HR department's main function is recruiting and selecting, training and development,
compensations and benefits, etc., which encourages employees to contribute their skills,
knowledge for the success of the business. HR measures the efficiency of marketing through
the performance in each marketing campaign.
On social media, Lazada's marketers advertise the professional image of employees. That
improves the belief of customers when they are using Lazada for shopping online. The positive
and enthusiastic from employees make buyers increase reliability about Lazada. HR also has
many benefits for motivating marketers and rewards when they achieve target marketing.

3. Conclusion
In conclusion, this research clearly describes the marketing principles and the way which
applies to Lazada. Moreover, it also demonstrates Lazada's marketing department's roles and
responsibilities and the relationship among different departments of the organization to make
more profit and customers' trust. Lazada has successful marketing, which attracts more new
online buyers. However, Lazada's marketers should improve customer service weaknesses
and regularly to questionnaire and take after-sales care. That is an easy way for the marketing
department to have adequate plans to build a strong relationship and capture customers'
value.
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