York Thailand Marketing Management

Executive Summary
A depth understanding is being made about the product especially the company itself. York, a multinational enterprise is, of course, without its flaw as well as its success story. York is the trading firm where it receives the product form aero master, the Sister Company as the manufacturer as well. The product line that I have decided to select is the Unitary Product Group which consist the various types of mini-splits, use for both residential and commercial market. Objectives, the purpose of the company are being stated although some of the parts are confidential and cannot use in this report. This is the case for many of the parts in these reports, so I tried to write as much as was allowed by the company.

In order to stay competitive and gain competitive leverage, some of the strategies the company uses concentrate on customer-based oriented. To achieve in this current dynamic market environment, it is essential to analyze what the customers or consumer needs are and find out ways that our products can deliver those desired needs.

Careful analysis of the five forces which determines the well being of the company are done in order to derive the SWOT analysis which is later used to develop our marketing strategies which are analyzed according to the element of marketing mix for more clarification.

Recommendations will made according to what has been analyzed in our strategy analysis to better serve the customers by providing such tactics as provide attractive incentives such as high percentage of sales rate to induce those customers, namely the wholesalers, retailers or contractors to carry and try to sell our products. This will support the third objectives of the company and that is to increase the distribution outlet of 15% each year.

York International
York International was formally established in 1874 in the United States. The company was firstly successful in China and Britain, while the growth rate was rapidly increasing in the Asia-Pacific regions. For more than 120 years that York has expanded and developed to be the leader in the cooling system technology, nowadays, York is number one in the manufacturing, marketing and servicing the air conditioning system in the world market. There are evidences of these claims. York has designed and installed the air conditioning system in the most important places such as Empire State, World Trade Center New York, Opera House Australia, NASA, and many famous international airports. Moreover, since 1960, York’s air conditioning system was installed during Olympic Games, also the recent Olympic Games at Sydney, Australia in the year 2000.

York International is the largest independent supplier of heating, ventilation, air conditioning and refrigeration (HVAC&R) products in the United Stated and leading competitor globally. York designs, manufactures, sells and services heating, ventilation and air conditioning systems, and compressors for residential and commercial markets; gas compression equipment for industrial processing; industrial and commercial refrigeration equipment; and compressors for air conditioning and refrigeration applications.

The Unitary Products Group designs manufactures and distributes a full line of cooling and heating systems which can be found in private homes, apartments and small commercial facilities. Products include ducted central air conditioning and heating system (air conditioners, heat pumps, and furnaces), light commercial heating and cooling equipment, ductless mini splits, and reciprocating and scroll OEM compressors (for original equipment manufacturers and for sale by wholesale distributors). The company emphasizes operating efficiencies and compactness in its highly reliable products and systems. Products, parts and systems are sold through independent distributors and company-owned branches. Compressors are sold directly to other OEM manufacturers.

Engineered Systems Products group include cooling and heating system which are custom engineered to meet specific customer needs and applications. This group of products include air-cooled and water cooled commercial chillers, central air handling equipment, variable air volume units and control equipment to monitor and control cooling systems, marine systems (chilled water systems for use on U.S., British and French naval vessels), and after market services (retrofit and replacement of systems and routine, emergency and performance improvement services.

Much like Engineered Systems products, the products in the Refrigeration Products Group are custom designed to meet specific needs and applications. The wide range of products include crew and reciprocating compressors, condensers, evaporators, heat transfer equipment and pressure vessels, spiral, tunnel and plate freezers, packaged refrigeration systems, hygienic air handling and distribution systems and distribution system, and automated plant control systems, as well as gas compression and Co2 system for the oil, gas and petrochemical industries. Refrigeration systems are essential in textile, electronic, pharmaceutical, petrochemical, food and beverage, and much other process cooling operations, and in maintaining these products in warehouses, distribution centers and retail outlets. York supplies a substantial portion of the vital refrigeration systems used in industrial and food processing applications throughout the world.

At present, the head office of York International is at Pennsylvania, USA. And there are the manufacturing bases in more than 30 countries worldwide. Furthermore, there are more than 700 office branches in more than 120 countries.

York Thailand
As York noticed Thailand as one of the potential markets in Asia, therefore, the company expands another branch in Thailand under the name “York Air Conditioning and Refrigeration Inc.,” in 1991 where it is the distributing and servicing center. The management and administration are organized by all Thai people who are well trained in each particular function. All the new technologies are transferred form the head office in the States. Therefore, the quality control and product improvement would be as good as the international standard. Nowadays, York Thailand is famous and well-know in product quality and the best services as responding to Thai market.

Current Market Situation
The company started selling in Thailand since 1991. Its competitors “Mitsubishi” who is market leader hold 20% of the market share, “Carrier” hold 12% of the market share and “National” hold 10% of the market share.

In 2001, Air-Conditioner market contained about 350,000 units, value 7,000 million Thai baht that decrease from last year 20%. In the Air-Conditioner market, the portion of large-scale air-conditioner is 1,400 million baht, Medium scale air-conditioner 800 million baht and small-scale air-conditioner at 5,800 million baht. The large scale and medium scale was decrease by 20-80% this year. However the small scale Air- Conditioner only reduces by 10%.

The major factor for the decrease in air-conditioner is Economic crisis and every manufacturer have to mark up the price 5-20% more from the value added tax and the increase of raw material price from the devaluation of baht. All these lead to lower purchasing power.

Customer’s needs
Customer needs air conditioner at lowest price possible with qualified specification according to their needs. As in Thailand, there are increase air pollution and increase in temperature so; customers are looking for air-conditioner that has air filter and high speed of cooling the room.

Buying Behavior
Customers that buy their own house usually have air conditioner. Number of air-conditioner in their place depends on the number of people in the household. Non users of air-conditioner they give reason that it’s unnecessary and some said that it is too expensive for them as these people have low income and did not have their own house. They give important to price, promotion and brand image have effect on perceive price of the product.

Customer perceives the product according to their image or reputation of the brand. They are willing to pay higher price for reliable product that suits their needs. But consumer doesn’t have full information and understanding about BTU of air-conditioner. They match the brand image with price and quality of the product.

Product Situation
Currently, in the Unitary Product Group in which we are focusing on minisplite that is for a commercial and residential market, various features and models are provide to the consumers, each delivering different features which are preferred by the consumers. Such features would include remote control based to control the functions of the Air conditioning as well as an improvement in package to convey to the consumers, the cleanliness and environmental friendly Air Conditioning, which helps, preserve the environment. York offers quality product in terms of durability and reliability with constant maintenance check and repair. Even though Air Conditioning is more or less a homogenous group differentiating the product through features or attributes would have little impact on the consumers. Therefore, the use of brand name is the corporate image is a useful tool in gaining leverage against competitors.

Their company’s policy is to work in honesty with sincerity to maximize the consumer relationship, building them into clients with the use of market-orientation, the trading firm, which is York can maximize customer satisfaction.

Nowadays, more customers concerned about electricity saving products, with Thai may lead the company to produce more energy saving models to serve the customers’ needs as well as use environmental friendly raw material, components, and parts in the company production to serve those customers who are environmental alert the market also interested in the new technology as well as the product durability. The company has to find out what the customers really want and try to produce the product to satisfy their wants.

Kanyong Wattana Company Limited. Is the dealer of the Mitsubishi “Heavy Duty” Mitsubishis’ air conditioner has gain 20% of the market share and is the brand which has gained probably the most customer brand awareness in the market . Their target group is people who are quality alert in term of aspect. The company has prepared their marketing strategy emphasize on durability with 3 years guarantee while the others have only 1 year or not more than 2 years guarantee. They introduced the aspect of durability to differentiate Mitsubishi from the others.

Most of their customer relies on the company‘s quality standard, especially in terms of durability. They positioned their product as the most durable product and their product is mainly targeted to the high-income customers. This level is suitable for logical thinking people who have high education. Accordingly, the price does not affect their purchasing power. Most of customers have well known to their brand through the use of mass media therefore it is unnecessary to send salesperson to customer place. This show Mitsubishi is using pull strategy.

Carrier air conditioner was distributed by Carrier (Thailand) Company Limited. They have the second highest market share in the market. Their market share is about 12%. They position their product in terms of the most quite air conditioner, which widely used. They have been the leaders of air conditioner sales in the big size model, which have the market share of 45% from the total market value of 10 billion baht. Carriers have been U.S. products.

Carrier positions itself with high quality in term of quite. They advertised Carrier that most airports used which also to promote the durable aspect of the product. Recently they emphasized their service on sales-service be provide more spare parts to customers. They invested to improve all service centers in year 1998.

AP National Sales Company Limited is the distributor of National appliances including air-conditioner. In 2000, National has used to be the third of the total market share or 10% from the whole market. The company hoped to be the first of the net sales in the next 5 years. They did marketing research about purchasing achieves in how consumers making a decision to buy air conditioners and discovered that consumers were interested in quite of air conditioner first, then cleanliness and then electricity saving aspect. After that they have launched advertising for the product brand awareness in terms of “Clean and quiet”. They targeted in the middle to high modern family who concerned with the technology and health.

They position their product as the standard in quality appliance and focus in the quiet of the product, they also have emphasized on the after sales services by setting the after sales services center named “National Information Center” which allows customers to call directly. Nowadays, National have developed the dealers to be “Air Conditioner Service Dealer”.

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