Strategic International Marketing: Power Root's Entry into Vietnam

This report discusses Power Root's market potential in Vietnam and recommends a joint venture strategy for market entry. It analyzes the benefits and challenges of online and offline distribution channels, emphasizing increased sales, customer satisfaction, and market share. The report suggests focusing on consumer behavior and long-term profitability through a concentrated marketing strategy. Key recommendations include gaining an in-depth understanding of the offline market-led distribution approach and consumer behavior to develop an effective strategic marketing plan. The online distribution strategy's benefits, such as increased convenience and geographical penetration, are weighed against challenges like high costs and lower customer loyalty. The report concludes with tailored recommendations for Power Root to succeed in the Vietnamese market.

Running head: INTERNATIONAL MARKETING
International marketing
Name of the student
Name of the university
Author note

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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.