Immature Brand Management of Electronics Retail Stores in Vietnam

Abstract

Abstract: This paper discusses the immature brand management in electronic retail stores in Vietnam by conducting field research. Previous studies have suggested that Japanese companies find themselves in a predicament with other emerging markets, mainly because their products are relatively high in price. This paper presents the findings that such a predicament results from not only high pricing but also local stores' inabilities of underlining the high quality and functions of high-priced products. Therefore, to become successful, Japanese companies are required to lower their product prices as well as increase awareness and accurate understanding of the high quality and functions of the high-priced products using their sales channels.Keywords: Japanese companies, emerging markets, electronic retail stores, Vietnam, brand management1. IntroductionIn recent years, emerging markets, particularly BRICS, have been attracting considerable attention (Li, 2009, 2010; London & Hart, 2004; Wright, Filatotchev, Hoskisson, & Peng, 2005). Japanese companies are also expected to respond to emerging markets by shifting their strategic focus from developed countries to emerging countries (Delios & Henisz, 2000; Horn, Forsans, & Cross, 2010).In reality, however, Japanese companies are not making progress in shifting their focus to such emerging markets. For instance, Japanese companies used to have a large market share in the television (TV) industry (Shintaku, 2005), but now Korean companies have gained a larger pie of the market share in many areas including emerging countries.1 Chinese companies have begun to show a strong presence in the automobile industry, especially in emerging markets (Li, 2009).Certain reasons have been pointed out as to why Japanese companies have experienced predicaments in emerging markets; differences in business practices between developed and emerging markets have been considered as one of them. For example, the wage level in emerging countries is lower than that of developed countries, and Japanese products are regarded relatively expensive in emerging countries (Horn, Forsans, & Cross, 2010; Shintaku & Amano, 2009, 2012). In other words, Japanese companies have lost their market share to their Korean and Chinese counterparts that are able to sell products at reasonable prices with certain quality (Shintaku & Amano, 2009).This paper clarifies the other reasons that Japanese companies experience predicaments in the emerging countries by conducting field research. This paper proves that Japanese companies are unable to promote the high quality and functions of their products effectively in emerging markets. Thus, through field research conducted at electronic retail stores in Vietnam, this paper clarifies the issues associated with local retailers in emerging markets.For this study, field research was conducted in two electronic retail stores, Store A and B, in Ho Chi Minh, Vietnam on December 18, 2009. Store A was a medium-scale electronics retail store, while Store B was the largest electronics retail store in Ho Chi Minh. In addition, to make clear distinctions, research was conducted at two other electronic retail stores: the Sony shop, a retail store directly managed by Sony, and the Sony center, a retail store that sells Sony products only, although its owner is not Sony. Vietnam was selected as the target country for this study because it has the third largest population in South East Asia, after Indonesia and the Philippines, and is now viewed as one of the most promising emerging countries. Field research included interviews with salespeople and investigations on how TVs were being displayed on the sales floor, all of which took 30 minutes at each store.2. Sales in VietnamIn 2008, Vietnam has a mixed TV market with both LCD TVs and CRT TVs (tube TVs). Since Korean companies had shown expansion of its market share in the CRT TVs market from the mid-2000s, Japanese companies had decided to direct more focus toward LCD TV sales. …