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Why did Bphone fail in the Vietnamese phone market  (Part II)

Why did Bphone fail in the Vietnamese phone market (Part II)

Thursday 24, 09 2020
In the years 2016 - 2018, Bphone is expected to be one of the popular phone brands like Iphone. But why by 2020, the popularity of the Bphone is still not as expected?

IV. Why is Bphone still unable to compete in the market?

BKAV has not sold out Bphone smartphones through retail agents, but instead use online channel (BKAV website) as the main distribution source to consume their products. In addition, Bphone was delivered directly to the customer so that they did not have to pay any extra money. In other words, this distribution is considered as corporate VMS, one of distribution channels that the company usually integrates successive stages of production and distribution under single ownership to maximize profits without having to pay for any intermediaries. On the one hand, in the light of the proliferation of technological communication, online channels are recognized as a potential marketing distribution, which can meet the online shopping demands of a large number of customers, especially in young people because of their curiosity.
Why is Bphone still unable to compete in the market?
On the other hand, under a lot of other customer’s perceptions, online shopping is not a really effective way to purchase the expensive electrical products, which potentially owns numerous risks regarding technical errors like the smartphone. For this reason, customers are usually cautious in choosing a product by touching or seeing directly. Furthermore, Bphone is known as a new smartphone brand that just appeared on the market, which means the quality of Bphone is questionable. Eventually, this distribution is no different as a significant mistake because it does not help Bphone reach customers and also makes the distribution channel of products to customers narrowed completely by the only online channel as well.
In 2017, BKAV expanded their operation by shifting toward a multichannel distribution system, which is a common type of distribution that can diversify the customer segments through adding the retail channel to help customers to access and purchase easier products. According to the Vietnamnet, the CEO of Thegioididong stated that they will cooperate with BKAV to begin distributing BPhone products. It is considered as a big move of BKAV because Thegioididong is known as a reputable mobile phone store chain in Vietnam with a large network of 1,500 shops throughout the country.
 Overall, distribution channels are also a thing that BKAV should consider, online distribution channels and  few distribution agents will be very limited to offer products to consumers. Moreover, online shopping habits of Vietnamese users have not become so popular, and especially with the amount of over 10 million, it is almost impossible to happen. Moreover, with the technology products, users always need to experience before deciding whether to buy or not. 

1.     Promotion

➢   Advertising

The typical way of promotion used by BKAV is compared with the other products such as Iphone X or Samsung Galaxy which come from two well-known brands of smartphones Apple and Samsung. BKAV evaluates the value of the customer’s old smartphone from the famous brands and shows them the difference in value and the improvement between a new Bphone and the old smartphone. This promotion strategy has received opposite responses from many groups of clients. It also affects the mentality and the first impression of customers negatively because the market in Vietnam, almost all of the customers are using the smartphones provided from Iphone and Samsung. In the opinion of most customers, the quality and the value in a product that a new brand which has joined the smartphone market recently can not be professional and credible than the other big brands such as Iphone and Samsung. Additionally, some responses from reviewers and researchers argue that Bphone will hardly be able to compete with many opponents in the same range of prices so how could Bphone compare with two biggest brands of high-end smartphones?
After the introduction event, the advertisement of Bphone 2 was shown on television. It mainly promotes the significant functions of Bphone and the deep comparison with the other products. Obviously, the advertisements on TV approached most consumers and Bphone 2 is more widely known by local people than Bphone 1 in the past. Despite the good quality of advertisement was carefully completed by BKAV, in reality, the customers almost confuse about the quality of each function when comparing with the phone which they own. Moreover, some customers claim that this advertisement is out of date and not attractive. The reason for these negative responses is the content of the advertisement is quite similar as many advertisements that customer has already seen and the comparison will make the conflict with a group of loyal customers of each brand. The only success that the advertisement achieved is promoting to most of local people know that Bphone is originally made by Vietnamese.

➢   Public relation

Collaborating with many technological online newspapers, each article was released from them about Bphone will make the hot controversies of community on some channel such as social network, technological forums about functions, appearance, etc... Surprisingly, this public relation strategy was accessed positively as a success of BKAV from many experts. Besides, BPhone knows how to "create trouble debate", this is how effective and consistent with the development trend of social media today. The main reason for this success is each controversy booms on social networks that means clients start to care and discuss more about Bphone; more importantly, Bphone will be mentioned frequently and people can easily find out anything about Bphone through the popularity of daily hot topics.
Creating a special event as a day to introduce the Bphone is very typical in promotion strategies of BKAV. Almost all the client responses that the performance of CEOs and the organizer are quite impressive and professional like other famous brands. Furthermore, the event attracts many groups of clients and the care of journalists. Through the event mostly present about the advantages of Bphone, BKAV is very successful in making Bphone more curious for clients.

V. Recommendation

1.     Place

 It can be obviously seen that Corporate VMS, which is the initial distribution system of Bphone is not effective. The deficiency of distribution channels reaching customers has led to the limitation of sales. While Vietnamese people prefer traditional in-store shopping, BKAV just provides an online channel. Therefore, BKAV should focus on using multichannel distribution.
Firstly, they should immediately adjust and build offline distribution channels, which means samples must be put right on the shelf for palling and touching comfortably. This helps the buyers can test smartphones directly and shorten the distance between consumers and company’s products.     
BKAV should contact with CEO of The gioi di dong, Pico, Nguyen Kim, etc... and make cooperations with these famous stores in order to reach larger market and promote selling Bphone in all Vietnamese provinces. 
According to Ta Minh Hoang - the Bkav mobile product director, this company expects to open their market globally. Thus, the firm should have a team connecting with at least regional countries such as Laos, Thailand or Singapore, then continue to reach the United States and Europe. They could contact with prominents smartphone distribution companies in those countries, offering high discounts to create attractions. This activity requires BKAV to build a competent international business team to do so.

2.     Price

With Market-skimming strategy, BKAV could not convince customers. Launching price of Bphone is considered to be high for the first appearance in the smartphone market, which creates a hesitation in buying. While there are other brands such as Asus, Xiaomi, Samsung offer the same price for good quality, it seems to be very difficult for BKAV to compete. 
As a result, a recommendation for this company is applying Market Penetration strategy. They should provide a reasonable and consistent price that will help Bphone quickly penetrate into the market.  This method also helps increase the image of the firm, providing high quality products but affordable price. Applying this strategy, BKAV needs to accept the low-profit during early launch, then if it is determined that the market shows the interests and attention, they can increase the price gradually to suit the product’s quality and make sure that the price covers production cost. 

3.     Promotion

BKAV should change their method of advertising. They should not compare Bphone with other products which have more reputation and trust from many customers such as iPhone, Samsung or Sony or even emphasize that their smartphones are much better than  their competitors. This action results in a negative impression in the public, shows an unprofessional marketing strategy and causes controversy surrounding different brands. Instead, they should prove Bphone is a right choice by representing their remarkable functions in order to attract the curiosity among clients. This orientation will be more convincing and perform a healthy competition, which also can help raise the firm’s reputation.
In addition, BKAV is recommended to extensively open exhibitions and display Bphone as well as regularly make advertisements on television, especially in golden times. They could use other vehicles to reach new customers such as radio, magazines and social networks. 
They can learn from their rival as well, Oppo, which has succeeded in inviting famous singer - Son Tung MTP to quickly introduce their smartphone to the public. Therefore, BKAV should take the advantage of celebrity's influence to widen brand awareness. 

4.     Product

Bphone is considered to be a shopping product. It is inevitable that customers will carefully compare features between different products like style, price, sustainability and quality. As a result, to impress the consumers,  BKAV needs to enhance the quality of the product, eliminate errors and mistakes in the production process. 
BKAV should also concentrate on studying market trends to meet customer’s needs. 
Besides, in order to build customer loyalty and improve belief between customers and the firm, information systems should be set up to support customers and illustrate the warranty program of the company. 
Impacts on the environment also need to be an important concern for the company since they play a crucial role in achieving sustainable development as well as maintaining their business reputation. 

Why did Bphone fail in the Vietnamese phone market? (Part I)

Complied by Vietnam Credit

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