Market Potentiality of Power Root in Vietnam: Offline and Online Distribution Strategies

This report discusses the market potentiality of Power Root in Vietnam and recommends a market entry strategy. It also discusses the effective online and offline distribution strategies to be implemented by Power Root in Vietnam.

Running head: INTERNATIONAL MARKETING
International marketing
Name of the student
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Executive summary
The aim of this report is to discuss about the market potentiality of Power Root in operating in
the Vietnamese market. The probable advantages to be gained by them are being discussed in
this report. In addition, it is recommended in this report that Power Root should opt for joint
venture strategy in doing business in Vietnam. This report also discussed about the effective
online and offline distribution strategies to be implemented by Power Root in doing business in
Vietnam. There are number of positive and negative factors identified in this report in regards to
these distribution channels and recommendations are being stated accordingly.

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Table of Contents
Introduction......................................................................................................................................3
Market potentiality of Vietnam.......................................................................................................3
Choice of market entry strategy.......................................................................................................4
Choice of distribution facilities.......................................................................................................4
Distribution offline approach...........................................................................................................5
Increased sales and income..........................................................................................................5
Customer satisfaction and loyalty................................................................................................5
Increase business volume and market share................................................................................6
Increase innovativeness...............................................................................................................6
Reasons for adoption.......................................................................................................................7
Focusing on the consumer...........................................................................................................7
Long term profitability................................................................................................................7
Concentrated strategy..................................................................................................................8
Marketing advantage...................................................................................................................8
Recommendation.............................................................................................................................8
Benefits of initiating online distribution strategies..........................................................................9
Increased convenience.................................................................................................................9
Better customer relationship management.......................................................................................9
Effective geographical penetration............................................................................................10

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Challenges in opting for online distribution channels...................................................................10
Expensive mode of distribution.................................................................................................11
Lower level of customer loyalty................................................................................................11
Social diversity..........................................................................................................................11
Recommendations..........................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14

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Introduction
In the current business scenario, it is becoming more important for the contemporary
business organizations especially the of medium size companies to opt for foreign market entry
due to the reason that it will help them to increase the target customer segments and the business
revenue. On the other hand, entering in the international market can also help in the reducing the
dependency on the national markets and gaining more competitiveness. Power Root is one of the
leading medium sized organizations in Malaysia offering herbal energy drinks (powerroot.com
2019). They are having their presence in the South East Asian markets and Middle Eastern
countries. However, continuous market development process is important for maintaining the
competitiveness. It is recommended that Vietnam will be an effective choice for market entry
due to the reason that it is one of the countries in the South Eastern Asian region where Power
Root is still not having their presence.
This report will discuss about the market potentialities for Power Root in entering in the
Vietnamese market along with recommending a market entry strategy that can help their cause.
Moreover, the potential distribution strategy of Power Root in terms of both online and offline
approach will also be discussed in this report.
Market potentiality of Vietnam
As stated in the previous section that Power Root is having their extensive presence in the
South East Asian countries. Thus, entering in Vietnam will be easier and it will cover the entire
region. On the other hand, Power Root will have fewer competitors in the market due to the fact
that market of herbal energy drinks is limited. Thus, they can initiate the blue ocean strategy in
operating in Vietnam (Burke, van Stel and Thurik 2016). On the other hand, it should also be

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noted that geographical factors of Vietnam will also be favorable for Power Root due to the
reason that they are already operating in the neighboring countries of Vietnam. Thus, the
products of Power Root will be geographically immune and ideal for offering in the Vietnamese
market. According to the reports, majority of the synthetic energy drinks are having the market
leadership in Vietnam and thus the potentiality of the herbal drinks is good and Power Boot can
have unique competitiveness in this market (Hallinger and Truong 2014). However, on the other
hand, it should also be noted that political environment may pose challenge to Power Root in
operating in Vietnam. This is due to the reason that political environment in Vietnam is not
stable and it may pose risks in the investment.
Choice of market entry strategy
It is recommended that Power Root should opt for joint venture strategy in doing
business in Vietnam. This is due to the reason that with the help of the joint venture strategy,
they will be able to gain the local market expertise by partnering with a local firm. In addition,
the political risks in investment in Vietnam will also get lowered due to the equal involvement of
the local firm (Blackburn, Hart and Wainwright 2013). Thus, it can be concluded that initiation
of the joint venture strategy will be effective for Power Root in terms of lowered investment risk
and gaining more market expertise in Vietnam.
Choice of distribution facilities
Power Root will operate on the basis of business to customer model. This is due to the
reason that they will offer end products to the customers and will not cater to the business
entities. Thus, it is important for them to have an extensive distribution strategy in covering the
major section of the target customers (Herhausen et al. 2015). On the other hand, it should also

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be noted that the distribution strategy of Power Root should also have high level of penetration
due to the reason that Power Root is operating in the fast moving consumer good category. In
this case, it is recommended that they should initiate Omni Channel distribution strategy to
have the presence through both online and offline mediums and covering the lager sections. Even
though, the offline distribution strategy will be effective in traditional form but online
distribution strategy should also be followed (Dennis, Cheong and Sun 2017). The following
sections will discuss about both the online and offline distribution strategy.
Task 1:
Distribution offline approach
Benefits
Increased sales and income
As per the research of Myftaraj and Nexhipi (2014) it can be argued that there are huge
benefits of the offline market-led approach in order to increase the sales and income for new
international market. In this regard, Piercy and Archer-Brown (2014) advocated that the purpose
for internationalisation is related to the process of procuring and ensuring more profitability into
the organisational spectrum robustly. Offline approach entitles to make a market entry physically
through different approaches like joint venture or direct market entry. It is resembled with the
motive to expand the market in order to enhance the annual sales and income for the
organisation. In this regard, Power root should also choose the offline distribution approach.
Customer satisfaction and loyalty

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De Villa, Rajwani and Lawton (2015) articulated that in case of maximising the
customers it is also important to develop the customer satisfaction and loyalty at the same time.
This process is associated with the progress in branding of the company. In this context, Power
rootintends to expand its market in Vietnam and the primary product of the company is herbal
energy drink. Despite of having a sustainable product it is pertinent for the company to deliver
more effectiveness in its market entry so that the consumers can acknowledged the product
specifically. According to Musteen, Datta and Butts (2014) the offline distribution mechanism
has highest capability to deal with the customers directly.
Increase business volume and market share
New market entry is associated with the concept of making better opportunity for the
corporate organisation to increase its business volume and the share in market. As a matter of
fact, it connotes the successful business orientation for the organisation. In his research Sui, S.
and Baum (2014) opined that the growth in the business volume and the market share refer as the
progress in the market orientation. In case of Power rootit becomes essential to enhance its
market volume with the purpose to retain its business in Vietnam successfully. The offline
distribution system facilitates such framework in order to ensure the security and success in
course of the new market entry.
Increase innovativeness
As a matter of fact, innovativeness is also considered to be an important aspect that can enhance
income through the market-led approach. As per the research of Cavusgil and Knight (2015) on
internationalisation it can be stated that despite innovation is considered to be one of the major
strategic advantage that can contribute to the benefits for the new existence in the international

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market. Based on this understanding, it can be argued that despite of having less competitiveness
in the Vietnamese market in compare to the other international market it is still a significant
factor for Power rootto ensure the success of its business in the new market as well.
Reasons for adoption
Focusing on the consumer
The primary purpose of the market-led approach is to concern about the sales and the
behaviour of the consumers. As Ruzzier and Ruzzier (2015) articulated that the sales sheet and
the customer satisfaction towards a brand has a close connection. In this regard, it is important
for the organisations to focus on the consumers to get a better sales growth. In case of
Vietnamese market Figueira-de-Lemosand Hadjikhani (2014) revealed that there are number of
business companies who intends to make a clear perception regarding the volatile customer
behaviour. In this regard, Power rootalso opts for the market-led distribution approach and puts
emphasis on the offline distribution framework in order to maximising the customer satisfaction
and ensure its sustainability.
Long term profitability
On the other hand, Musteen, Dattaand Butts (2014) mentioned that the market-led
approach is highly profitable and leads to good prospect in future for a foreign brand while
entering into a new market. Based on this understanding, it can be considered that the role of the
Power roots not only establish the business in Vietnam but also ensure the profitability in a long
term basis. Moreover, Piercy and Archer-Brown (2014) pointed out that the offline market-led
approach is highly beneficial to meet the long term goals and objectives for the company because
the approach directly involves to deal with the interests of the consumers. From that point of

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view, it will be highly beneficial for Power root to maintain such framework extensively while
making an entry in the Vietnamese market.
Concentrated strategy
From the point of view of De Villa, Rajwani and Lawton (2015) the market –led offline
approach facilitates a better framework by confronting the customers physically. It can be argued
that through the process of making a direct relation with the customers it becomes easier for the
business organisation to evaluate the mind-set of the consumers intensely. As a result of that in
near future the organisation can plan strategies quiet effectively in accordance with the customer
behaviour.
Marketing advantage
In this context, it can be stated that the marketing-led approach directly connotes the market
activities. Therefore, it becomes a helpful tool to prepare a strategic marketing plan before
entering in the international market. As the Uppsala Internationalisation model points out that it
is important for the organisation to increase its sales growth through the process of
internationalization (Cavusgil and Knight 2015). Therefore, the process will deliver a better
framework for Power root to enter into the Vietnam market.
Recommendation
 It is important for Power root to have an in-depth understanding regarding the role and
purpose of the offline market-led distribution approach. As a result of that it will generate
all the benefits and competencies that the approach is associated with. As a matter of fact,
in case of the internationalisation model it is highly essential for Power root to make a

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collaboration of both the market-led distribution approach and the internationalisation
model in order to increase the efficiency in market.
 Besides this, it is also important to get clear perception regarding the consumer
behaviour. The market-led distribution approach clearly supports the interests and
satisfaction of the consumers. As a result of that it becomes crucial to procure a better
strategic marketing plan for Power root before entering into the Vietnamese market.
Task 2
Benefits of initiating online distribution strategies
There are number of benefits can be gained from initiating the online distribution strategy
and these benefits will be discussed in the following section.
Increased convenience
One of the major benefits to be gained from the online distribution is the enhanced
convenience to the customers. This is due to the reason that with the help of e-commerce,
customers can be able to compare the price of different substitutes and choose their alternative.
In addition, the customers will also achieve the convenience in buying the products from home
and getting it delivered (Zandi, Dong and Grami 2013). Thus, the satisfaction level will get
increased, which will reflect in the enhanced retention ratio of the customers for Power Root. It
is beneficial for Power Root to showcase their competitiveness over their competitors by
positioning in terms of their herbal ingredients and price. Customers will be able to identify the
differentiated approach of Power Root and have their buying patterns accordingly.
Better customer relationship management

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Another opportunity that can be gained from the initiation of the online distribution
strategy for Power Root will be gathering more information from the side of the customers. This
is due to the reason that online distribution also involves the presence of the social media
marketing. Thus, with the help of the social media marketing, Power Root can involve effective
communication channel with the target customers and gather their feedback (Amaro and Duarte
2015). On the other hand, the review given by the customers against the existing products of
Power Root will also be beneficial in long term product strategy. Thus, with the help of the
online mediums in the distribution process, Power Root will able to have the understanding
about the current market trends and accordingly they can offer their products.
Effective geographical penetration
With the help of the online distribution system, Power Root will able to cover more
market area with higher level of penetration. This is due to the reason that online mediums will
not require physical infrastructure to be present in different regions rather online services can be
given to each of the target customers through internet services (Chen and Chen 2017). Thus,
Power Root will be able to cover the larger area in Vietnam and number of target customers will
also be more. On the other hand, it should also be noted that covering the larger market section
will also help Power Cut to have more brand identity, reach and exposure in the Vietnamese
market.
Challenges in opting for online distribution channels
Even though there are number of opportunities to be gained from the initiation of the
online distribution strategy, but on the other hand, there are number of challenges also to be
faced by Power Root. The following sections will discuss about these challenges.

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Expensive mode of distribution
One of the major problems of initiating online distribution is expensive. This is due to the
reason that initiating online distribution process will involve using of internet infrastructure,
which will not be cost effective. In addition, it should also be noted that online distribution
processes cannot be initiated in covering the entire target market. This is due to the reason that
not all the target customers can be targeted with the help of online mediums. Moreover, it is also
reported that only 47 percent of the total population of Vietnam are having the access of internet
services as of 2016 (Yu, Cadeaux and Song 2013). Thus, with online distribution system, Power
Root cannot cater to their entire segments and this will lead to the emergence of other
distribution processes to complement. This will in turn increase the cost of the entire process.
Lower level of customer loyalty
Loyalty level of customers in the online mediums is less compared to the loyalty levels in
the offline mediums. This is due to the reason that in the case of the online mediums, customers
tend to compare more substitutes prior to the buying and thus they are not loyal to a certain brand
(Melis et al. 2015). Thus, Power Root will face lower loyal customers in their business in
Vietnam. In this case, they should be more focused on maintaining their differentiated approach
to stay ahead in the competition.
Social diversity
It should also be noted that Power Root cannot be able to cater to the entire target
customers by following same social factors such as languages and designs. This is due to the
reason that different regions are having different sets of social patterns and thus it is important
for Power Root to maintain diversity in their online mediums to cater to different customer

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segments (Bezes 2013). However, this will prove challenging for them due to the fact that cost
will get increased in maintaining different mediums based on different social factors.
Recommendations
According to the 6Cs of customer motivation, it is important for Power Root to align
their international online marketing strategy with the sated six components. In terms of content,
it is recommended that they should have more given information in their online portals, which
will help the customers in having fair understanding about the products. The more detailed will
be the content with the use of visual aids, the more will be the preferences of the customers over
the competitors. In terms of the customization, Power Root should have different portals on the
basis of popular languages used in Vietnam. In addition, customers should also be given some
sorts of customization in buying their products. This will further help Power Root in gaining
competitiveness over their competitors. In terms of the convenience, Power Root should have
proper details about the customer services for round the clock services. This will enhance the
trust and loyalty of the customers towards their products.
In terms of cost reduction, Power Root will be able to price competitively due to the
reason that no intermediaries are present in the process. In addition, initiation of the market
segmentation pricing will further help in penetrating in the market and covering the larger areas.
It should also be noted that in the current marketing scenario, customers are always willing to
have larger options in terms of product choice and payment options. Thus, it is recommended
that Power Root should have more product diversity and choice for the customers to choose
from. On the other hand, it is also recommended that Power Root should offer array of payment

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options for their customers to choose from. This will ensure that customers with having different
payment options can be targeted, which will in turn increase the target segments for Power Root.
Conclusion
From the above discussion, it can be stated that the market entry in the spectrum of
internationalization is considered to be a complex and vast process that can contribute to the
success for Power root. In this regard, both the online and offline market-led approaches are
discussed to understand the efficacy and relevance of both the strategy in the sphere of
Vietnamese market. In course of the discussion, the report rightly points out both the benefits
and relevant factors that push the company in order to get the assistance of online and offline
market-led approaches. As a matter of fact, successive recommendations are also mentioned in
order to perceive the importance of both the approach. It can be argued that Vietnam is
strategically increasing its market opportunity and the sustainable framework of Power rootwill
fosters an advantage to make the business a success. Furthermore, the report also connotes a
correlation between the online and offline market-led approach so that the entire process will be
effective enough for Power root to create a market entry in Vietnam. Therefore, it can be
concluded that the report is highly pragmatic and relevant to make an understanding about the
international market entry strategies.

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Appendix