FINAL EXAM INTERNATIONAL MARKETING PLAN FOR BASA FISH TO EU’s MARKET BY VINH HOAN JOINT STOCK COMPANY

THE MINISTRY OF FINANCE UNIVERSITY OF FINANCE – MARKETING FINAL EXAM INTERNATIONAL MARKETING PLAN FOR BASA FISH TO EU’s MARKET BY VINH HOAN JOINT STOCK COMPANY GROUP LY THU KY – 1921000880 TRUONG MINH MAN – 1921000917 PHAN GIA CAT TUONG – 1921003892 NGUYEN NHUT HAI LONG – 1921004477 CLC_19DMA12 HO CHI MINH CITY, 2021 TIEU LUAN MOI download : skknchat123@gmail.com TABLE OF CONTENTS LIST OF TABLES iii LIST OF FIGURES iv LIST OF ACRONYMS v PART COMPANY INTRODUCTION 1.1 OVERVIEW OF VINH HOAN JOINT STOCK COMPANY 1.2 HISTORY OF FORMATION AND DEVELOPMENT 1.3 VISION, MISSION AND CORE VALUES 1.4 RESEARCH OBJECTIVES PART ANALYSIS OF BUSINESS ENVIRONMENT 2.1 MACRO ENVIRONMENT 2.1.1 Overview of the EU’s market 2.1.2 Natural environment 2.1.3 Economic environment 2.1.4 Legal and political environment 2.2 MICRO ENVIRONMENT 2.2.1 Competitors 2.2.2 Product supply 2.2.3 Customer 2.3 SWOT ANALYSIS 2.3.5 S – O strategy 10 2.3.6 W – O strategy: 10 2.3.7 S – T strategy: 10 2.3.8 W – T strategy: 10 2.4 DESCRIPTION OF TARGET MARKET 10 2.4.1 Main markets of Vinh Hoan Company 10 2.4.2 Europe market 10 PART INTRODUCTION STRATEGY 12 3.1 INTRUSION METHODS 12 3.1.1 Franchising 12 3.1.2 Licensing 13 3.1.3 Direct export 13 3.2 INFILTRATION STRATEGY CHOSEN BY VINH HOAN 14 i TIEU LUAN MOI download : skknchat123@gmail.com 3.2.1 Direct export 14 3.2.2 Difficult 15 3.2.3 Remedial measures 16 3.2.4 Deployment method 17 PART 4: INTERNATIONAL MARKETING STRATEGY OF VINH HOAN 19 4.1 INTERNATIONAL MARKETING STRATEGY OF VINH HOAN COMPANY .19 4.2 PRODUCT STRATEGY 19 4.3 PRICING STRATEGY 20 4.4 DISTRIBUTION STRATEGY 21 4.5 PROMOTION STRATEGY 22 PART CONCLUSION AND RECOMMENDATIONS 24 5.1 CONCLUSION 24 5.2 RECOMMENDATIONS 24 LIST OF REFERENCES a APPENDIX b ii TIEU LUAN MOI download : skknchat123@gmail.com LIST OF TABLES Table 0: Vision, Mission And Core Values Table 1: Export Regulation Table 2: Vinh Hoan’s Competitor inside Vietnam Table 3: Vinh Hoan’s Competitor at EU Table 4: Vinh Hoan’s food supply system 10 Table 5: Vinh Hoan SWOT analysis 10 Table 6: Market Segment 12 Table 7: Advantages and Disadvantages of Franchising 14 Table 8: Advantages and Disadvantages of Licensing 15 Table 9: Advantages and Disadvantages of Direct export 16 Table 10: Some Decision about Direct Export 17 Table 11: Difficult of Direct Export 17 Table 12: Documents need to complete 20 Table 13: Revenue, Expense & Profit Forecast b Table 14: Action plan for the first year c Table 15: Basa Fish Sales & Revenue Forecast For The Next Five Years d Table 16: Member’s group work assessment d iii TIEU LUAN MOI download : skknchat123@gmail.com LIST OF FIGURES Figure 1: Company Organization Figure 2: Proportion of Products Exported to EU (2018) Figure 3: Household Expenditure by EU’s consumption purpose 13 iv TIEU LUAN MOI download : skknchat123@gmail.com LIST OF ACRONYMS Vinh Hoan : Vinh Hoan Joint Stock Company : hectares VASEP : Vietnam Association of Seafood Exporters and Producers EU : European Union UK : United Kingdom GDP : Gross Domestic Product EVFTA : European-Vietnam Free Trade Agreement UKVFTA : United Kingdom-Vietnam Free Trade Agreement FTAs : Free Trade Agreements IUU : Illegal, Unreported And Unregulated Fishing HACCP : Hazard Analysis and Critical Control Point System ISO : International Organization for Standardization v TIEU LUAN MOI download : skknchat123@gmail.com PART COMPANY INTRODUCTION 1.1 OVERVIEW OF VINH HOAN JOINT STOCK COMPANY The predecessor of Vinh Hoan Joint Stock Company is Vinh Hoan Company Limited, th established on December 19 , 1997 In 2007, the company transformed into a joint stock company with the name Vinh Hoan Joint Stock Company Vinh Hoan Joint Stock Company is one of the leading basa processing and exporting companies in Vietnam Vinh Hoan is a company with a scale belonging to the big enterprises in the export processing industry of the country, the total current capacity is up to 250 tons of raw fish per day The company has the advantage of raw material supply because it is located in Dong Thap Province, a province in the Mekong Delta region with the environment and conditions considered the most favorable for the farming industry of raw basa With basa farming areas, total area 136.5 ha, providing 34% of raw material demand The company's products are eligible to export to many countries around the world, including the US and EU countries, the most demanding market in the food export industry from overseas markets and gradually become a brand name reputable both at home and abroad • Trading name: VINH HOAN JOINT STOCK COMPANY • English name: VINH HOAN CORPORATION • Business registration certificate number: 1400112623 • Charter capital: 1.833.769.560.000 VND • Address: Route 30, Ward 11, Cao Lanh City, Dong Thap Province • Phone: +84 277 389 1166 • Fax: +84 277 389 1062 • Website: www.vinhhoan.com • Stock code: VHC 1.2 HISTORY OF FORMATION AND DEVELOPMENT - 1997: Ms Truong Thi Le Khanh founded Vinh Hoan Private Enterprise - 1998: Converting the business model to Vinh Hoan Co., Ltd - 1999: The first fisheries processing factory in Cao Lanh Town, Dong Thap province came into operation - 2007: Publicly listed on the Vietnam Stock Exchange Established Vinh Hoan Feed Established Vinh Hoan USA in Milpitas, California TIEU LUAN MOI download : skknchat123@gmail.com - 2009: Vinh Hoan Laboratory was accredited to ISO / IEC 17025:2005 - 2010: Become the world's largest basa producer - 2012: The world's first basa producer received ASC (Aquaculture Stewardship Council) certification - 2015: First company in the world to achieve 4-Star Best Aquaculture Practices (BAP) for hatcheries, feed production, farming and processing of basa Modern collagen/gelatin production facility begins production - 2016: Awarded the First Class Labor Medal by the Government of Vietnam Ranked by Forbes as one of the top 50 companies on the Vietnamese stock market for three consecutive years Established Vinh Aquaculture division to promote research, development and education as well as provide stable input for production - 2017: Focus on growth and innovation through Vinh Foods division to provide a wide range of value-added products Celebrated 20th year anniversary of Vinh Hoan's journey - 2018: Locate existing markets and develop into further markets Expand farming and production capacity to ensure the supply of high quality raw materials Continue to focus on developing value-added products Increase direct distribution channels to restaurants and supermarkets - 2019: In January 2019, Vinh Hoan proudly won the “Innovation of the Year” award given by Woolworths for Fish Bites; Chairman of the Board - Ms Truong Thi Le Khanh was voted by Forbes Vietnam as one of the 50 most influential women in 2019; Vinh Hoan was honored as one of the 50 best listed companies in Vietnam in 2019 This year is the 6th consecutive year appearing in the Forbes list since 2014; In September 2019, Vinh Hoan Pangasius Seed Production Co., Ltd started construction This new breeding area will focus on researching and developing new technologies, improving processes to produce high quality fingerlings; In November 2019, the Food Safety Inspection Service (“FSIS”) under the US Department of Agriculture (“USDA”) officially recognized the equivalent for the Vietnamese basa industry TIEU LUAN MOI download : skknchat123@gmail.com 1.3 VISION, MISSION AND CORE VALUES Table 0: Vision, Mission And Core Values Mission Affirming the position and potential development of sustainable aquaculture in the world through continuous improvement, environmental protection and efficiency improvement in all production and business activities Vision Becoming a leading company in sustainable aquaculture products, contributing to building a world of safe, delicious, healthy food and environmental protection Core • COMMITMENT: Right speech and right action values • IMPROVEMENT: Constantly differentiating to develop • DISTRIBUTION: Working with all your heart, not for personal gain • SHARE: Being willing to give is also happy to receive • PRO: Compliance and speed in every action Figure 1: Company Organization General Meeting of Shareholders Control Board Administrative Council Internal Audit Department General Manager Production Division 1.4 RESEARCH OBJECTIVES Analyze the business environment of Vinh Hoan Joint Stock Company to see strengths, weaknesses, opportunities and threats And from there, the Marketing strategy of Vinh Hoan Joint Stock Company was introduced in the European market TIEU LUAN MOI download : skknchat123@gmail.com Table 9: Advantages and Disadvantages of Direct export Advantages Direct access to foreign markets so businesses can grasp market developments and market needs From there, businesses will have plans for each specific market to improve their business efficiency in the international market Business units are active in business, can penetrate the market on their own and thus can meet market needs, elicit and stimulate demand If the unit organizes good business activities, it will bring high business efficiency, assert itself on products, brand, and bring prestige to products in the world Disadvantages In the condition that the enterprise has just started doing business in a short time, it is very difficult to apply the form of direct export Because of limited production conditions, little understanding of the international market, the prestige of product brands is still unfamiliar to customers Not to mention, businesses also must bear a large cost from export tax The distance between the buyer and the seller is very large, so when the transaction is done, there may be many unforeseen risks For example, the risk occurs because the company is not knowledgeable about products, partners, and markets 3.2 INFILTRATION STRATEGY CHOSEN BY VINH HOAN 3.2.1 Direct export Vinh Hoan Company builds a direct distribution system in the European market, which means that it can distribute directly to consumers for final products To build a direct distribution system in Europe, it is necessary to have the support of the government, the Vietnam Association of Fisheries Exporters and Producers (VASEP) Setting up representative offices in European market countries with the following tasks: collecting information on the market: information on the management mechanism of fisheries imports, information on fluctuations in the supply and demand of fisheries prices of the market , information about competitors; Looking for partners to buy fisheries; Coordinate with other company organizations to organize exhibitions, customer conferences, direct marketing; Searching for effective forms of aquatic product distribution; Selling goods online (e-commerce) Besides, we have a great advantage in terms of human resources We have an abundant number of workers with a hard-working nature that is not afraid of hardship The team of workers in the fisheries industry has contributed to the success of production-export activities The human resources in the industry are constantly improving in terms of technical and professional qualifications 14 TIEU LUAN MOI download : skknchat123@gmail.com b At Europe: Currently, there is no significant competitor for Vietnam in the EU market Most basa fish products exported to the European Union originate from Vietnam Table 3: Vinh Hoan’s Competitor at EU Bangladesh Due to supply chain issues, Bangladeshi exporters are often unable to sell to demanding high-end markets such as the retail sector, where certification for traceability, quality and durability is often required Instead, Bangladeshi basa is often in the lower end of the foodservice market China China is another country that exports small quantities of basa to the European Union Every year, no more than 50-100 tons to Europe (Source: VASEP) 2.2.1.2 Potential Competitors Potential competitors are businesses that are not present in the fisheries industry or are new to the industry but have not provided services and it may affect the industry in the future The entry of new enterprises will increase the level of competition among enterprises in the same industry, however, this level of competition will depend on factors and conditions for entering the industry as TIEU LUAN MOI download : skknchat123@gmail.com follows: With many signed agreements such as EVFTA, UKFTA, along with a lot of government attention to develop the national fisheries industry, the industry's attractiveness becomes great: Technology; Capital requirements; Commercial factors: Distribution system, brand, customer system; Specific resources: Inputs (controlled), patents Human resources, government protection; Distribution channel 2.2.1.3 Alternative products In addition to the competition among basa products, it also must compete with other catfish of the world and substitute products such as tilapia, salmon, pangasius, and other types of white-meat fish as well as other fisheries When people's income is high, the people's demand for food is also high, which requires food quality, safety and hygiene, and the ability to choose If the Vinh Hoan's products not meet the needs of customers, the substitute products will affect the company's business performance TIEU LUAN MOI download : skknchat123@gmail.com 2.2.2 Product supply Vinh Hoan continues to produce and plans to invest 580 billion VND in projects such as building new hatcheries, renovating existing farms, and expanding production plants In 2020, Vinh Hoan also announced that it is building a fish oil factory in Chau Thanh district, Dong Thap province The advantage of closed chain and the advantages of management capacity, technology and technology have helped Vinh Hoan surpass small and medium-sized enterprises in purchasing raw materials as well as penetrating large markets Table 4: Vinh Hoan’s food supply system Fingerling Fish fingerlings are an indispensable part of the farming process and now Vinh Hoan owns over 30 hectares of breeding area Fish farming process is divided into several stages as follows: Fish egg (2 weeks) → Newly hatched fish (3 - weeks) → Fingerling Vinh Hoan develops fish farming from the stage when the newly hatched fish are bought from the hatchery, this is the stage when the fish are just big enough, easy to raise, and easy to control in terms of feeding food Aquatic food The source of fish feeding food is mainly provided by Vinh Hoan Joint Stock Company, once a subsidiary of Vinh Hoan and now sold to a Philippine partner After the resale, Vinh Hoan became the official distributor, continuing to buy back food from its partner at a low price and quality, because the new partner was able to focus on R&D to improve the recipe to help increase nutritional value and limit environmental pollution Raw fish farming activities Recirculating fish farming project without water change: This is the first project that the company has successfully researched and applied the model of raising river fish in ponds in the farming area of Tan Hung, Long An 2.2.3 Customer The target customer is all European people, regardless of age or status, because basa fish is white-meat fish, neutral taste, competitive price and easy to prepare into many dishes Moreover, the TIEU LUAN MOI download : skknchat123@gmail.com trend of choosing and paying a higher price for natural, organic products, clearly labeled with recognizable ingredients, with minimal impact on the environment is also gradually gaining popularity in the market of developed and developing countries TIEU LUAN MOI download : skknchat123@gmail.com 2.3 SWOT ANALYSIS Table 5: Vinh Hoan SWOT analysis Strength • Leading company in product quality and quality management system, pioneering in sustainable farming Vinh Hoan brand is reputable, effectively supporting the Company's activities; • A closed system of farming and processing finished products and by-products, value-added products; • A network of loyal customers and loyal partnerships spanning the globe and diversified across two traditional sales channels and modern sales channels; • A dedicated and professional workforce and a good, committed and experienced management team; • Having a wide understanding and connections in different foreign markets to support brand promotion and development strategy; • Healthy financial situation with high accumulation Weakness • High labor demand for new factories and new projects; • The product brand has not yet developed to the end consumer; • Smart science and technology have not yet been applied to keep up with the rapid progress of the information age; • The domestic market has not yet developed a suitable name to create wide recognition in the country; • There is still a lot of untapped potential from the application of the circular economy in the chain of farming, processing and exporting Opportunity • Vietnam is one of the few countries in the world that has well controlled the spread of the COVID-19 epidemic and maintained economic growth; • Potential for development of new products, especially ready-made products for online sales; • Increasing consumer awareness about food safety, product origin and sustainability factors; • Basa fish still maintains a competitive advantage in price compared to other white fish products, there is no direct and significant substitute; • Several FTAs that Vietnam has signed are effective: EVFTA, EAEU FTAs, RCEP, UK VFTA Threat • The COVID-19 epidemic affects the import demand of key markets; • Shipping costs increased from the fourth quarter of 2020 and showed no sign of cooling down; • Competitors are growing stronger and more developed; • Customers' consumption trends are always fluctuating; • Increasing domestic demand for raw materials leads to the risk of shortage TIEU LUAN MOI download : skknchat123@gmail.com 2.3.5 S – O strategy: Take advantage of product strengths (quality and output) and take advantage of external conditions to penetrate the market 2.3.6 W – O strategy: Building a strong brand, effectively mobilizing capital, managing human resources well to penetrate the target market 2.3.7 S – T strategy: Promote the strengths and advantages of the company to limit the threats of the market and competitors 2.3.8 W – T strategy: Overcome weaknesses in brand, capital, and human resources to prevent threats 2.4 DESCRIPTION OF TARGET MARKET 2.4.1 Main markets of Vinh Hoan Company TIEU LUAN MOI download : skknchat123@gmail.com In terms of revenue by market most markets have decreased compared to 2019 and 2020 due to In terms of revenue by market, most markets have decreased compared to 2019 and 2020 due to the impact of the pandemic, mainly due to food service chains, which are one of the two main consumption channels In 2020, Vinh Hoan sold to 47 markets, an increase of markets compared to 2019 In which, the largest markets are the US , Europe (including the UK) and China 2.4.2 Europe market The bright spot of the market in 2020 is the growth of the Europe market Europe so that a block pass China the of total revenue nd largest market after the United States of Vinh Hoan, accounting for 18% 2.4.2.1 Market Segment Table 6: Market Segment Demographic According to VASEP, the biggest markets for basa in Europe are in Northern Europe, where Segmentation consumers are most concerned with sustainability, price and convenience The majority of basa is brought to Europe as frozen fillets and Vietnamese exporters account for most of the market Behavioral Most consumers in Germany are interested in preserved and processed fisheries products A notable segmentation trend is the development of new fisheries products for special occasions or for special enjoyment such as Spanish savory dishes, fish appetizers, sushi and breaded products If fisheries is more conveniently ready and consumers are taught how to cook it, sales of fisheries could increase 10 TIEU LUAN MOI download : skknchat123@gmail.com 2.4.2.2 Market quantification The population of EU countries is about 500 million people, GDP is 15,193 trillion USD in 2020, the consumption rate for food and non-alcoholic beverages is 13%, restaurants and hotels are 8.7%, estimated EU people spend 10.85% of GDP on food and drink activities, that is, spending 1,648 trillion USD This is a huge market for Vinh Hoan to exploit According to data in 2020, Vinh Hoan's pangasius and basa exports to Europe reached 54 million USD, a very small number compared to the total market and showed an opportunity to expand the market further Figure 3: Household Expenditure by EU’s consumption purpose (Source: eurostat) 2.4.2.3 Competitive advantage of Vinh Hoan Company TIEU LUAN MOI download : skknchat123@gmail.com It is thanks to Ms Le Khanh assertiveness in leadership that she has made the right and timely It is thanks to Ms Le Khanh assertiveness in leadership that she has made the right and timely strategic decisions Since then, Vinh Hoan is not passive when the price of raw materials increases in the market, improves productivity, reduces costs and costs when realizing that the market demand is growing or pioneering in research and processing Basa products, basa fish into high value-added products such as breaded basa, artichoke rolls Ms Le Khanh showed excellent talent and bravery when helping Vinh Hoan gain a huge competitive advantage over rivals 11 TIEU LUAN MOI download : skknchat123@gmail.com PART INTRODUCTION STRATEGY 3.1 INTRUSION METHODS 3.1.1 Franchising This is a business model in which the business owner or franchisor distributes its products and services through affiliated agents or franchisees Franchising usually comes with certain benefits Here, the franchisor will give the franchisee with the trademark, the right to use the developed formula, the experts, and even the necessary equipment or materials Table 7: Advantages and Disadvantages of Franchising Advantages The biggest advantage of franchising is the ability to bring together independent retailers and use a single brand and business philosophy This synergy brings many benefits: consumer brand awareness, consistent response to customer requirements, focused advertising power, and customer purchasing efficiency For a business owner, franchising offers many benefits When the business process is proven to be successful in the marketplace, the risk of continued business failure is reduced; the use of a well-known brand can save business owners the cost of establishing and promoting a brand, recognizable from customers; and co-use of brand advertising and purchases by many consumers The buying advantage makes the business more profitable - Trading in a reputable brand with a smaller investment than building an equal brand - Minimize the risk of not having to invest in building a new brand - Support from the brand's marketing and promotion programs Disadvantages - Share the business risk of the franchisor - Not its own brand - Business activities according to a predetermined framework - Failing to promote creativity in business However, franchising is not for everyone A completely independent business (you know who you are) can be frustrating having to adhere to the strict requirements and operating characteristics of a franchise It is also important to understand that certain franchise methods are more effective than others Ineffective franchise methods won't train you to handle tough business situations well, don't support you well when problems arise, and don't make good use of advertising dollars 12 TIEU LUAN MOI download : skknchat123@gmail.com 3.1.2 Licensing Licensing is the process of creating and administering a contract between a trademark owner and a company that wishes to use the trademark in conjunction with its products This also means that only certain organizations are licensed to business in certain territories Table 8: Advantages and Disadvantages of Licensing TIEUAdvantagesLUANForinternationalMOIlicensing,downloadthereceivingparty:skknchat123@gmailneedstohaveenoughcapitaltoputthefctory.cominthecontract So, the first advantage of the license is that the company does not have to bear the development costs and risks associated with opening foreign markets For companies lacking development funds abroad, licensing is an attractive option Licensing is also an attractive entry method for companies that not want to invest resources in unfamiliar markets or politically unstable foreign markets When a company wants to enter a foreign market but is banned due to investment restrictions, licensing is often the method used Disadvantages The company does not strictly control production, marketing and strategy requires experience and regional economy Licensing involves the assignee creating his or her own business This limits the company's ability to create a regional economy experience by producing products in a centralized location So, when these economic issues are important, licensing is not a good way to expand overseas Competing on world markets may need companies to coordinate cross-border strategies by using profits made in one country to help compete with another The license restricts this ability of the company License assignment does not allow multinational companies to use profits to support another assignment agreement in another country 3.1.3 Direct export The import-export business unit that directly signs a foreign trade contract, as a party, must organize the performance of such contract The contract signed between the two parties must be in accordance with national and international laws, and at the same time, make sure national interests and ensure the business reputation of the enterprise When the export volume is large enough and the company wishes to focus its resources on developing the international market, it is proper to set up an export organization (branch, department) This export organization can be in the country or in the foreign market In this case, the exporting organization takes care of all export functions from identifying potential markets, segmenting markets, arranging ways, exporting documents, transportation, planning and implementing plans Marketing plans include pricing, promotion, and distribution of products for international markets 13 TIEU LUAN MOI download : skknchat123@gmail.com Table 9: Advantages and Disadvantages of Direct export Advantages Direct access to foreign markets so businesses can grasp market developments and market needs From there, businesses will have plans for each specific market to improve their business efficiency in the international market Business units are active in business, can penetrate the market on their own and thus can meet market needs, elicit and stimulate demand If the unit organizes good business activities, it will bring high business efficiency, assert itself on products, brand, and bring prestige to products in the world Disadvantages In the condition that the enterprise has just started doing business in a short time, it is very difficult to apply the form of direct export Because of limited production conditions, little understanding of the international market, the prestige of product brands is still unfamiliar to customers Not to mention, businesses also must bear a large cost from export tax The distance between the buyer and the seller is very large, so when the transaction is done, there may be many unforeseen risks For example, the risk occurs because the company is not knowledgeable about products, partners, and markets 3.2 INFILTRATION STRATEGY CHOSEN BY VINH HOAN 3.2.1 Direct export Vinh Hoan Company builds a direct distribution system in the European market, which means that it can distribute directly to consumers for final products To build a direct distribution system in TIEUEurope, itLUANisnecessaryMOItohavedownloadthesupprtof the:skknchat123@gmailgoverment,heVietnamAssocation.comofFisheries E t dP d (VASEP) ... OF VINH HOAN JOINT STOCK COMPANY The predecessor of Vinh Hoan Joint Stock Company is Vinh Hoan Company Limited, th established on December 19 , 1997 In 2007, the company transformed into a joint. .. a joint stock company with the name Vinh Hoan Joint Stock Company Vinh Hoan Joint Stock Company is one of the leading basa processing and exporting companies in Vietnam Vinh Hoan is a company. .. of Vinh Hoan Joint Stock Company to see strengths, weaknesses, opportunities and threats And from there, the Marketing strategy of Vinh Hoan Joint Stock Company was introduced in the European market