NIELS BROCK COPENHAGEN
BUSINESS COLLEGE
&
FOREIGN TRADE UNIVERSITY
CULTURAL ADAPTATION OF
PIAGGIO IN VIETNAM
NGUYEN MINH ANH
Project submitted in part of requirement for the award of
BSc Business Administration
Major: Finance
MAY 2017
Supervior: Msc Hoang Anh Duy
Abstract
Piaggio is the representative of the foreign scooter manufacturer brands who are
operating in Vietnam. Considering the differences in culture between Italy and
Vietnam, how Piaggio has adapted itself to the Vietnamese culture caught the
attention of author. The aim of this research is to explore what cultural things that
Piaggio has adapted into its marketing mix, and how these factors have contributed
to its success.
In order to get the answer, author has based this research on previous academics
theories along with objective information of Piaggio, and also carried on a survey that
is based on Vietnamese market. After combining experimental findings and analysis,
author has answered all the research questions. After that, this research also has
recommendation for Piaggio and other multinational companies, as well as the limitation
and the implication of the result.
Keyword: culture, cultural adaptation, marketing, marketing mix, scooter
manufacturer industry, 4Ps, Vietnamese market.
Table of contents
Abstract
Chapter 1: Introduction ………………………………………………………………………………… 1
1.1. Rationale of study ………………………………………………………………………………… 1
1.2. Reason to choose the topic ……………………………………………………………………. 1
1.3. Research questions and research objectives ……………………………………………. 2
1.3.1. Research question ………………………………………………………………………….. 2
1.3.2. Research objectives ………………………………………………………………………… 2
1.4. Respondents ……………………………………………………………………………………….. 3
1.5. Scope of study …………………………………………………………………………………….. 3
1.6. Research methodology …………………………………………………………………………. 3
1.7. Structure of study …………………………………………………………………………………. 4
Chapter 2: Literature Review ………………………………………………………………………… 5
2.1. Culture and Cultural Adaptation ……………………………………………………………… 5
2.1.1. Definition of Culture ………………………………………………………………………… 5
2.1.2. Definition of Cultural Adaptation ……………………………………………………….. 5
2.2. Culture in Marketing and Marketing Mix …………………………………………………… 6
2.2.1. Culture in Marketing …………………………..……………………………………………. 6
2.2.2. Definition of Marketing Mix ……………………………………………………………….. 7
2.3. Benefits of the concept ………………………………………………………………………….. 8
2.4. Contents ……………………………………………………………………………………………… 9
2.4.1. Components of this concept: ……………………………………………………………. 9
2.4.2. Process to do it …………………………………………………………………………….. 11
2.5. Models ……………………………………………………………………………………………… 12
2.6. Determinants ……………………………………………………………………………………… 13
2.6.1. External factors …………………………………………………………………………….. 13
2.6.2. Internal factors ……………………………………………………………………………… 14
Chapter 3: Research Methodology ……………………………………………………………… 15
3.1. Research Approach ……………………………………………………………………………. 15
3.1.1. Inductive Approach ……………………………………………………………………….. 15
3.1.2. Deductive Approach ………………………………………………………………………. 16
3.1.3. Research Approach for this Study …………………………………………………… 17
3.2. Research Methods ……………………………………………………………………………… 17
3.2.1. Qualitative Research ……………………………………………………………………… 17
3.2.2. Quantitative Research …………………………………………………………………… 18
3.2.3. Research Methodology for this Study ………………………………………………. 20
3.3. Conduct Research ……………………………………………………………………………… 20
3.3.1. Sources of data …………………………………………………………………………….. 20
3.3.2. Research instrument ……………………………………………………………………… 21
3.3.3. Respondents ………………………………………………………………………………… 21
3.4. Validity & Reliability …………………………………………………………………………….. 21
3.4.1. Validity ………………………………………………………………………………………… 21
3.4.2. Reliability …………………………………………………………………………………….. 22
3.5. Data Analysis …………………………………………………………………………………….. 22
3.6. Research Procedure …………………………………………………………………………… 23
Chapter 4: Results and Analysis …………………………………………………………………. 24
4.1. Introduction to Piaggio Company ………………………………………………………….. 24
4.1.1. General Information. ……………………………………………………………………… 24
4.1.2. Establishment and Development …………………………………………………….. 25
4.2. Sample description ……………………………………………………………………………… 26
4.2.1. Gender of Piaggio’s Customers ………………………………………………………. 26
4.2.2. Age of Piaggio’s Customers ……………………………………………………………. 27
4.2.3. Income of Piaggio’s Customers …………………………..………………………….. 28
4.2.4. Occupation of Piaggio’s Customers …………………………………………………. 30
4.3. Cultural Adaptation Applied on Marketing Mix Strategy ……………………………. 32
4.3.1. Product ……………………………………………………………………………………….. 32
4.3.2. Price ……………………………………………………………………………………………. 34
4.3.3. Place …………………………………………………………………………………………… 38
4.3.4. Promotion ……………………………………………………………………………………. 42
4.3.5. Most effective element of 4Ps. ………………………………………………………… 45
Chapter 5: Conclusion and Recommendation ……………………………………………… 46
5.1. Summary …………………………………………………………………………………………… 46
5.2. Suggestion and implications ………………………………………………………………… 47
5.3. Limitation and suggestion for further study. ……………………………………………. 49
References ………………………………………………………………………………………………… 50
Bibliography ……………………………………………………………………………………………… 53
Appendix 1 ………………………………………………………………………………………………… 49
Appendix 2 ………………………………………………………………………………………………… 55
List of figures, exhibitions and tables
Figure 2.1 How customer behaviour has been influenced by culture …………………….. 7
Figure 2.1 Customers’ view on 4Ps model ………………………………………………………. 12
Figure 2.2 What 4Ps model’s elements actually are ………………………………………….. 13
Figure 3.1 Process of Inductive Approach ……………………………………………………….. 15
Figure 3.2 Process of Deductive Approach ……………………………………………………… 16
Figure 4.1 Piaggio’ logo ………………………………………………………………………………… 24
Exhibition 4.1 Gender of the Customers of Piaggio Stores ………………………………… 27
Exhibition 4.2 Age of Customers of Piaggio …………………………………………………….. 28
Exhibition 4.3 Monthly Income of Purchaser of Piaggio …………………………………….. 29
Exhibition 4.4 Occupation of Piaggio’s Customers ……………………………………………. 31
Exhibition 4.5 Customers’ thought of the fixes in designs of Piaggio’s products for
Vietnam market …………………………………………………………………………………………… 33
Exhibition 4.6 Customers’ thought about the prices of Piaggio’s products that are
made in Vietnam ……………………………………………………….………………………………… 36
Exhibition 4.7 Chosen products of customers ………………………………………………….. 37
Exhibition 4.8 Customers’ knowledge about the actual owners of Piaggio’s stores … 41
Exhibition 4.9 How Piaggio approached the customers …………………………………….. 43
Exhibition 4.10 Popularity of Piaggio’s promotion events …………………………………… 44
Table 4.1 List of Piaggio’s Products, Prices and Sources ………………………………….. 35
Table 4.2 List of Piaggio’s dealers and information of their stores ………………………. 38
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Chapter 1: Introduction
1.1. Rationale of study
Since the beginning of cross-culture business, cultural adaptation has always been
an important element for multinational companies to approach the target country. To
be able to modified the original behaviours and ideas, create the consistency
between those and the local culture can help companies to understand the needs
and the buying habits of the local target customers, things that should be avoided in
the local market. All of the multinational corporations have to adapt the cultural of the
target country in order to be successful.
Vietnam is a country that has a huge number of scooters. Therefore, it is a new
market that is full with potential for the foreign scooter manufacturers. However,
Vietnam is a country with high context culture, there are some typical cultural things
that foreign companies need to learn and change to be suitable with Vietnamese.
The challenges in a market with different demands and needs, how Piaggio has
applied the cultural adaptation into its marketing mix is the question that the author
has been asking himself. As the result he made this research and hope that the result
of this study can answer the question.
1.2. Reason to choose the topic
The researcher always has a huge interest in culture field; as a result, the author
chose to research how culture can actually affect cooperation businesses.
The author decided to choose Piaggio Company because it was a foreign company,
and it has reached the top of the local market by being one of the best scooter
manufacturers in Vietnam. The author interested in how Piaggio Vietnam use ‘cultural
adaptation’ as its important business element to approached a foreign market
successfully, especially in marketing mix. Overall, ‘Cultural Adaptation in marketing
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mix of Piaggio in Vietnam’ has been chosen to be the topic for research by the
researcher.
1.3. Research questions and research objectives
1.3.1. Research question
The main question that the writer has chosen is ‘What changes did Piaggio made to
respond to Vietnamese culture?’
The reason for the author to choose this question is to analyze Piaggio’s solutions in
order to discover how Piaggio use cultural adaptation to make solutions, what kind of
solutions can solve cultural issues.
The first sub-question that has been chosen to support the main question is ‘What
are the challenges did Piaggio has faced?’
Reason for choosing this question is author has to point out all the issues that it has
faced in order to analyze Piaggio solutions for the main question,
‘Which element of the marketing mix is the most successful one after applied the
cultural adaptation?’
The author chose these questions because after finishing those questions above, the
author needs to know the effectives of the solutions in order to write recommendation
for Piaggio Vietnam and other multinational companies to consult.
1.3.2. Research objectives
‘Cultural Adaptation’ is an important and necessary element of any multinational
company because it can help the company to success.
The main objective of the research is to find out how Piaggio has applied cultural
adaptation into marketing mix as solutions for cultural issues that it has faced in the past.
There are some other objectives such as to find out how cultural adaptation has
made Piaggio success in Vietnam market, mark out things that can be highlight and
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recommend to other multinational companies, things that Piaggio may change a little
bit more.
1.4. Respondents
Respondents for the researcher’s survey will be customers of Piaggio’s stores in
Hanoi, Vietnam that author will meet and agree to fill in the questionnaires.
1.5. Scope of study
This study is about cultural adaptation. Cultural adaptation is an activity that helps
multinational companies to learn the target culture, and what they could adapt or
change to be fit with the target country and target customers. It also helps companies
to understand what they should avoid in the local environment.
Cultural adaptation is always been used to applied on multinational companies’
business plan when they try to approach new markets. In this research, the author
will focus on how cultural adaptation has been applied into the marketing mix of
Piaggio in Vietnam market.
1.6. Research methodology
First of all, author will research for the relevant theories and definitions in order to
create research topic, research questions. Secondly, a questionnaire will be made to
collect the primary data from 50 customers of Piaggio. After that, author will collect
the secondary data such as documents, journals and relevant reports about the
scooter market of Vietnam, Piaggio’s situation in Vietnam and other needed
information that related to Piaggio Vietnam. Finally, the writer will analyse these data
and select suitable information and put these data into tables or graphs to conclude
the object of the research and answer all of the research questions. From that,
researcher will be able to write recommendation for Piaggio and other multinational
business firms.
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1.7. Structure of study
This research divided into five parts which is introduced as follows:
o Chapter 1: Introduction.
This chapter is the introduction part of the research. This chapter shows why the
author has chosen this topic. It also gives information of research questions, research
objectives, scope of study and a short review of the research methodology.
o Chapter 2: Literature Review.
The second chapter of the research is about the literature review of the study which
will describe what cultural adaptation is, what marketing mix is, how culture affected
on marketing, what benefits could go to the firms when they applied cultural
adaptation into marketing mix.
o Chapter 3: Research Methodology.
The third chapter is about the research methodology of the research. It will describe
the research approach, research methodology, and the research instrument that the
researcher will use for this research.
o Chapter 4: Results and analysis.
This chapter will focus on describe the results of the study after analyze the
information and data that the author has collected through surveys and relevant
documents.
o Chapter 5: Conclusion.
This part is the final chapter of this research which will conclude the study. This
chapter will provide the answers for the research questions, conclusion and limitation
of this research. There will be recommendation for Piaggio and the other
multinational companies that want to consult this research.
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Chapter 2:
Literature Review
2.1. Culture and Cultural Adaptation
2.1.1. Definition of Culture
One of the very first definitions of culture has been verbalized by Sir Edward in 1871.
He defined culture as a complex combination of things that acquired by people who
are a member of society such as faiths, knowledge, arts, ethical, customs, law and
other habits and capabilities. Two year later, the writer named Matthew Arnold has
described cultural as the process of familiarizing ourselves with the best that are well–
known and been mentioned in the world, and therefore with the human spirit’s history
(Arnold 1873). According to Williams (1958) the first fact is that culture is ordinary.
Every society has its own forms with its own significance. Human societies express
their shapes through institutions, arts and learning. A society is made by finding
common significance and aspects. An active debate and the improvement under the
pressures experienced, communication, discovery, writings their shapes into the land
is how a society grows. Later on in 1999, according to Brumann, culture has been
defined as the shapes of traditional behaviour which are the particular characteristics
of a particular society or a group.
Therefore, based on these definitions, author defined culture as a mixture of common
things between people in a society that create traditional behaviours of that society
which can call as its certain characteristic. Culture can be improved though cultural
exchange and communication between societies.
2.1.2. Definition of Cultural Adaptation
In 1983, Ellingsworth defined cultural adaptation as an attempt to suit the apparent
foreignness of people from other cultures by modifying the communication style and
adjusting the different in trusts. Kim and Gudykunst (1988) has noted that adjusting
and finally feeling comfortable in other societies or in new environment is a long-term
process called cultural adaptation. In the same year, Beiser et al (1988) has defined
cultural adaptation as the mutations that happen during the acculturation. ‘Short–term’
and ‘long–term’ changes were outlined as the two types of changes. Later on,
according to Booth (2015) reviewing and changing a program or the structure of a
practice in order to fit the predilections and the needs of a certain community or a
particular cultural group are all included in cultural adaptation. It is the procedure of
conveyance the modified mental health services that are consistency with the target
customers’ culture. Based on these definitions and the primary data that author has
researched, author defined cultural adaptation as a process that helps outsiders to
adjust their behaviours and way of thinking to be suitable with the new societies. In
business, cultural adaptation is the process that helps companies or business
organizations to review and change their construction, or their products, or their
