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Nowaday, products and services must go throught multiple marketing channels before to approach enduser. So a marketing channel strategy will help design and manage overall channel structure specifically and efficently. Firstly, the understanding and managing sales channel critical is extremely to most businesses. Because of total sales through sales channels (e.g., retailers, wholesaler) occupies one third of GDP. Secondly, the channels help the manufacturers connect and link to endusers. If marketing channel strategies is not effective, the manufacturer’s products or services will limit reach and lack of attractiveness to buyer. Thirdly, when customers are taked better they will be satisfied and tend to be loyal to that brand. Therefore channel experience determines people’s perceptions of the manufacturer’s brand image and thus enduser satisfaction.
16/01/2021 FINAL REPORT OF CHANNEL MANAGEMENT (B04E) CHANNEL STRUCTURE AND STRATEGIES OF GOLDEN STAR BALM LECTURE: NGUYEN THI NGOC DUNG GROUP 8: NGUYỄN THỊ NGỌC MAI TRẦN THỊ HOÀNG ANH PHẠM THỊ MỸ LINH MÃ CÁC TƯỜNG ĐINH THỊ LINH NHI TABLE OF CONTENTS: I INTRODUCTION: I.1 Introduction of the Golden Star Balm: I.2 4P of the Golden Star Balm: II CUSTOMER ANALYSIS: II.1 Target Market: II.2 Target Customer: II.3 Make or buy: II.4 End-user segmentation: Service output: .6 III PROBLEM: III.1 Current situation: III.2 Problem of product: III.3 Problem of distribution: III.4 Existing solution: IV SOLUTION: I INTRODUCTION: I.1 Introduction of the Golden Star Balm: During the war against the French and the years after 1954, in Vietnam, there was a popular product called balm oil, of which the most popular was the trademark of Tiger (Tiger Balm) After 1954, the North of Vietnam rebuilt the medical system, encouraged and accelerated the production of medicines from domestic herbal medicines Researching and putting into production at that time was not easy By the year 1968-1969, after a period of research and testing the Golden Star Balm was born This is a very compact and smooth that is durable in different weather conditions, and comes in a small iron box that can be tucked in a pocket Since being put into production, Golden Star Balm has become a familiar product in all families in the North - Vietnam in particular and the country in general In the years 1970-1990, Golden Star Balm could be considered as a cult brand and had the "greatest" brand awareness at that time, indispensable in every Vietnamese family and also became a symbol image of Vietnam's pharmaceutical industry many years later With the feature of heating the body, Vietnamese people, when traveling on business or studying in Eastern European countries at that time, often brought the Golden Star Balm to use In addition, with its anti-cold and lightweight effect, it is also used as a gift Therefore, the Golden Star Balm is known to some Eastern European countries After 1975, Vietnam and the Soviet Union stepped up the exchange of goods Golden Star Balm is one of the commodities exported to the Soviet Union Products were delivered to pharmaceutical manufacturing factories Particularly, the pharmaceutical factory in Da Nang has been assigned the annual production target of 10 to 15 million boxes on average The peak was 1983, with an output of 20 million boxes, the lowest was in 1986, the last year had a production target of million boxes After the export to the Soviet Union ended, the consumption of Golden Star Balm decreased Many units registered to produce high quality, but few businesses kept stable output But only for a short time, Golden Star Balm faced the competition of new products in the market such as Singapore green wind oil, Chinese tiger oil, eucalyptus oil, Nhi Thien wind oil When there were no orders from the Soviet Union and European countries, the Vietnamese's sentiment to choose foreign products at a higher price than Vietnamese products with a much lower quality made Golden Star Balm almost disappeared in the market for more than decades After a quiet period of time from 2013 to 2014, Golden Star Balm was mentioned again when it became a best-selling product on the international market On top online selling sites like eBay or Amazon, this product has a price that is tens of times higher than the original price in Vietnam Currently, Russia is a country with a high import market for Gold Star Balm the best I.2 4P of the Golden Star Balm: Product: - Golden Star Balm is a special gelatin and waterproof for various events, and comes in a pocket that can be tucked into a pocket - Ingredients include of prepared from a variety of essential oils, including: camphor, peppermint essential oil, mint essential oil, cajeput, basil, cinnamon - Uses are day massage on acupuncture points, very effective in fire fighting body, warm head, nose, sadness, stomachache, boil or insect bite Price: - In Vietnam, Golden Star Balm is 5,000 VND for 3g, 4g for 6,000 VND, 10g box for 16,000 VND, 20g for 39,000 VND and 30g for 49,000 VND - In foreign countries, the prices are very high compared to the prices in Vietnam Typically, online sales channels such as Amazon sell for USD, ie 208,000 VND / 10g, Ebay at 10 - 231,000 VND / 10g and Coupang: 21,000 Won - 439,000 VND / 9g, etc There are some major retail channels sold at a very high price However, the price is high compared to that in Vietnam, but still in a state of fire Promotion: Currently, Golden Star Balm does not promote advertising in Vietnam, almost none in Vietnam But in Russia, a group (young people) made a video about the Golden Star Blam and posted it on their YouTube channel as an advertisement for a luxury brand Place: Currently, Golden Star Balm has two main manufacturers are Central Pharmaceutical Company and OPC Pharmaceutical Joint Stock Company Central Pharmaceutical Company has three branches located in Ho Chi Minh City, Da Nang and Hanoi Cao Sao Vang is sold in places like Drug stores (Pharmacity), markets such as Ben Thanh market, etc and some online retail channels "E-commerce" such as Shoppe, Lazada, Tiki, Amazon, eBay and some other retail channels II CUSTOMER ANALYSIS: II.1 - II.2 - Target Market: Golden Star Balm is present in more than 15 countries Focusing mainly in the North of Vietnam Target Customer: Gender: Male and Female Age: 25 - 60 years old - Most people between the ages of 30 and 60 are those whose lives used to stick with Golden Star Balm Those between the ages of 25 and 30 are the ones being affected by the Golden Star Balm's comeback New all income and career because Golden Star Balm is easy to use with low price Golden Star Balm are also very popular in foreign markets, especially Russia Channel function has two main routes, one is to sell to retailers, the other is to sell to their own stores Channel function is drawn as follows Figure 1: Channel function OPC company has a total of 15 stores nationwide But OPC stores sell a wide variety of drugs together Golden Star Balm's revenue comes mainly from sales to retailers With that are General Trade and Modern Trade On the General Trade channel there is a clear difference between the North and the South In the south the Golden Star Balm appears much less Only 30% of pharmacies in the South sell Golden Star Balm and only Ben Thanh market, but it is difficult to find a booth in Ben Thanh market that sells Golden Star Balm In the North, the number of pharmacies selling Golden Star Balm is much higher, accounting for 70%, accounting for 60% of the hypermarket and 70% of Mom and pop stores As for the Modern Trade channel, there are two main branches: domestic and foreign There are many foreign websites selling Golden Star Balm products such as Tao Bao from China, Amazon, Ebay from the United States, Coupang from Korea In the country, it is available at sites such as Tiki, Shoppee, Lazada II.3 Make or buy: OPC's distribution channel is Make because it needs the expertise and strict management of the product quality of its brand, especially when it is a medical product, a drug, so customers' trust on the product Product is a thing to note Currently, Golden Star Balm is considered only a small product of OPC Pharmaceutical joint-stock company, so it has not yet invested much In addition, at the moment, Golden Star Balm's revenue, although increasing, is still considered a not much profitable product for the company, so Make helps the company to limit funding before the product actually turns back to the top like before OPC Pharmaceutical joint-stock company has close relationships with retailers, especially with large drugstore chains such as Pharmacy, Minh Chau drugstore, Long Chau pharmacy So it is easier to bring products to retailers II.4 End-user segmentation: Service output: Bulk breaking: OPC has divide Golden Star Balm into two main type Which can be separate by the container, the first type containers make from tin and the second once it glass But for the glass container have been divided event smaller by weight from 3, 4, 9, 10 to 20 gram For ours opinion this bulk breaking it not really efficient, it can cause a lot of confusion for buyer with only a single gam different Changing to small, medium and large size they will all have the gap from to gram, this will help the customer choose easier Spatial convenience: Spatial convenience it one of OPC Golden Star challenge Because being a famous product back in the old day but Golden Star balm have run out of juice Making it really difficult for consumer to find ours product, we only mainly focus in the Northside of Vietnam and mostly in pharmaceutical shop franchise We thinking of contacting local convenience store to get more surface cover Product variety: Like mention OPC Golden Star only have two different type is tin and glass container They only have flavor original This have make the product being out sell by rivalry We trying to make the product more diversity when it come to smell like for example some new smell like fruits, flowers and so on Information sharing: OPC Golden Star Balm focus mainly in pre-purchase information sharing They print in the product label, container about the product attribute, usage, side effect for customer to easily know how to use the balm carefully and in a right way The assistance help will be deliver by pharmacist in the store for any more question that the customer have Waiting time, Customer service: We notice there nothing much to discuss about OPC service output when it come to waiting time and customer service There usually no waiting time for the customer when they come directly to the store And customer service don’t have much to stand out to other drugs store Channel competition: Having a lot of channel competition form from balsam oil from many different branch To other rivalry in the same balsam brackets and if that not enough OPC have to compete with the Golden Star name from Trung Uong and Danapha pharmacist company So it really hard to stand out in among ton of other substitution product without a single chance been make for decade So to keep OPC Golden Star Balm in the game we must have a lot to change not just in the distribution system but also in product and promotion III PROBLEM: III.1 Current situation: Since the Soviet Union and Eastern European countries collapsed, the contract with the Soviet Union terminated in 1975, output of Golden Star Balm has decreased significantly Many pharmaceutical companies registered to produce this product on the basis of sharing the same logo and brand but few units operated effectively and kept stable output Therefore about decades the Golden Star Balm has been almost absent in the domestic market III.2 Problem of product: Currently, consumers are afraid to use oil products because of the unpleasant odor affecting people around them Users rate the value of a product low because it is mostly used by the working class Elderly people still remember about the red oil box with a golden star is extremely difficult to open, sometimes they must throw it on the floor before released Product are not diversified and can’t meet the needs of customers Currently, with the stiff competition from diversified products Foreign oils such as Singapore oil, Chinese tiger oil, eucalyptus oil, Nhi Thien Duong oil, liniment oil, … The market share of industry is gradually shrinking, this led to Golden Star Balm to lose market share And with the consumer's mindset, Vietnamese customer enjoy to using imported products They are willing to spend lots of money for imported products, instead of just spending more than 8,000 VND for a high-quality Vietnam oil III.3 Problem of distribution: With the drip communication strategy, the distribution channels in the domestic market are not operating effectively, Golden Star Balm is not as expected at home Now Just a little drug store sold it so the product will difficult to approach to customer Pharmacies and retailer have not unified on selling prices III.4 Existing solution: In recent years, the OPC company has brought the product "re-exported” with unchanged design They still mainly use a golden star on a red background, but they also add the English and Russian on the lid of the box After a period of silence, from 2013 up to now, Golden Star Balm suddenly "rebelled" back to the international market with the very high price and the sales volume always in a state of "out of stock" at the big e-commerce website like eBay or Amazon In Russian they make a very professional advertisement This event has made waves in the country and the domestic customer start renoticed it This is also help revived this product line Many domestic souvenir shops also bring golden star balm back on the shelves IV SOLUTION: The first solution is ensuring the ability to provide products and services with the best quality to revive customers' trust, especially improving product packaging due to many opinions that it is difficult to open the lid of the box Beside that, the company should create a variety of products to meet all customers' needs, for example, changing to roller or patch form According to modern trends, people think that oil products have an unpleasant scent, companies should change the shape and scent of products such as mint, fruit, cinnamon, fragrance, Change consumer perception of products by including products in home health product talkshows and health magazine articles to help convince consumers to return use natural products Create a new trend on TikTok related to Golden Star Balm To increase market access, a push and pull strategy is introduced: - Push: create contests and offer prizes to retail channels - Pull: creates television advertising campaigns to change consumers' minds about golden stars The company should promote the amount of products sold on foreign website (Taobao, Amazon, ) and throughout the network of drugstores in Viet Nam because the market share of Golden Star Balm is reducing Golden Star Balm is very difficult for customers to find and buy, expending distribution channels at convenience stores (Family Mart, Circle K, Ministop, GS25) is one of the most reasonable solution because convenience stores are appearing in many places, especially in Ho Chi Minh City, customers can find and buy products easier In addition, they should promote advertising the product on e-commerce channels which are growing in the present time (Lazada, Shopee, Sendo.vn) and place advertising banners in front of pharmacies Increasing the number of drugstore in the South of Viet Nam selling Golden Star Balm to 50% and adding new retailers to diversify channel functions Introduce a price stabilization policy, if any drugstore is dumped, it will be fined