INTRODUCTION
Saigon General Service Corporation
Established in September 1982, Saigon General Service Corporation (Savico) initially focused on service activities and transitioned to a joint stock company on January 4, 2005 The company was listed on the Hanoi Stock Trading Center (HNX) on December 21, 2006, and later moved its listing to the Hochiminh City Stock Exchange (HOSE) on June 1, 2009 With over 30 years of business experience, Savico has outlined its strategic goals for the period of 2015-2020, reflecting its commitment to growth and development.
By 2030, Savico aims to evolve as an investment corporation with a focus on Trading and Services, Property Services, and Financial Services The company has established a robust network of car and motorbike dealerships representing renowned manufacturers like Toyota, Ford, and GM Daewoo, operating through 13 subsidiaries and 5 associates throughout Vietnam As a leading car distributor within the Vietnam Automobile Manufacturers’ Association (VAMA), Savico achieved a market share of 8.5% in 2016.
Nordic Car Joint Stock Company
Nordic Car Joint Stock Company, part of Savico’s automobile dealer network, serves as the exclusive representative for Volvo Cars Corporation in Vietnam, specializing in the import, retail, marketing, and after-sales services for luxury Volvo vehicles In August 2016, Nordic Car launched two branches—Volvo Phu My Hung in Ho Chi Minh City and Volvo Long Vien in Hanoi—equipped to the latest standards set by Volvo Cars Corporation With an investment exceeding 60 billion Vietnam Dong, the company aims to establish itself as a leading premium car retailer in Vietnam, offering unique Scandinavian values to local customers Each branch features a structured team, including a managing director, a sales and marketing department with around 35 salespeople, as well as human resources and finance departments, complemented by a fully equipped workshop.
PROBLEM CONTEXT
Global automobile market
Figure 2 Global cars and light-commercial vehicles sales between 2016 and 2017
In 2017, global car sales demonstrated resilience, reaching 86.05 million units, marking a 2.4% increase from 2016, according to JATO, a leading automotive market research firm While traditional markets like Korea and South America experienced declines, the Asia Pacific region saw significant growth Despite initial restrictions on car purchases in China, demand surged in the second quarter, contributing to a 2.3% growth rate by year-end South America, particularly Brazil, Argentina, and Chile, exhibited strong automobile demand despite challenges in diesel fuel Additionally, Thailand's growth in the Southeast Asia region was bolstered by favorable tax policies under the ASEAN Free Trade Area agreement.
Table 1 Top 10 best-selling car brands in 2017
Cars and Pick-up 2017 Growth Rate Ranking
According to JATO's 2017 press release, Toyota remains the leading global automotive brand, bolstered by several top-selling models While Japanese brands are experiencing a decline in the U.S and China, this trend is counterbalanced by rising consumer purchasing power in emerging markets like Thailand and Argentina, contributing to a 5% increase in Toyota's sales.
In 2017, Volkswagen achieved remarkable business success, surpassing Toyota in overall sales despite facing a significant gas fraud scandal that resulted in billions in fines, particularly in the U.S However, when excluding sub-brands, Volkswagen alone could not outpace Toyota Meanwhile, Mercedes-Benz thrived in the challenging market, benefiting from strong demand in China, the world's most populous country Additionally, Volkswagen solidified its dominance in Europe, capturing the highest market share in the region, with total sales growing by 3% Notably, Mercedes, Suzuki, and Honda emerged as the top three performers in terms of growth rate.
Figure 3 Global cars market share by segments between 2016 and 2017
In 2017, Sport Utility Vehicles (SUVs) led automotive growth, achieving sales of 27.85 million units, an increase of 3.14 million from the previous year The Nissan X-Trail/Rogue emerged as the top-selling SUV, with 814,000 units sold, reflecting a 6.5% global volume rise SUVs, categorized into subtypes such as C-SUVs and B-SUVs, have captured 34% of the market share from traditional vehicle segments, a trend observed worldwide that is expected to persist in the coming years, significantly affecting compact cars, midsize sedans, wagons, and MPVs.
Vietnamese automobile market
Figure 4 The number of sold cars in Vietnam from 2014 to 2017
From 2014 to 2017, Vietnam's automotive market experienced significant growth, with vehicle sales increasing from 133,588 units in 2014 to 271,833 units in 2016, according to VAMA reports The market is categorized into three types: passenger cars (PC), commercial vehicles (CV), and special-purpose vehicles (SPV) Passenger car sales rose from 79,813 units in 2014 to over 117,000 units within a year, and by 2016, sales surged by 36% to reach 159,501 units This growth positioned Vietnam as an attractive investment destination and the second fastest-growing automotive market in Southeast Asia However, in 2017, the market saw a decline of about 7.8% due to a 0% import tax from Southeast ASEAN countries, leading to a wait-and-see attitude among buyers Nonetheless, the market is expected to rebound strongly once all automobile taxes are clarified in mid-2018.
In a November 2016 report to the Vietnamese government, the Ministry of Industry and Trade highlighted the automobile industry's growth, noting that by 2015, there were over 400 enterprises primarily located in the Southeast and Red River Delta regions Despite this expansion, most of these businesses are small to medium-sized, with a total assembly capacity of approximately 460,000 units annually Of this capacity, 47% is attributed to foreign investment, while 53% comes from domestic sources.
In 2014, Vietnam's automobile assembly industry experienced an average growth rate of only 17% annually, contributing over one billion US dollars in taxes to the state budget and providing jobs for around 100,000 direct employees The industry has achieved high localization rates for certain vehicles, with trucks and passenger cars meeting significant domestic demand; however, the localization rate for vehicles with fewer than nine seats remains low Despite recognizing the industry's importance, the government lacks effective strategies to attract major corporations like Toyota and Ford to invest in assembly plants in Vietnam, as these companies have opted for larger-scale production projects in neighboring countries Additionally, the reliance on imported basic materials such as steel, rubber, and plastics increases production costs, limiting competitiveness in the auto parts sector Consequently, many investors are reducing assembly operations and focusing on importing luxury vehicles to meet the growing demand in Vietnam.
Volvo global business results and Nordic Car company situation in Vietnam
Figure 5 Volvo global retail sales from 2013 to 2017
Volvo Car Group's annual reports from 2013 to 2017 highlight a remarkable growth trajectory, with production increasing by nearly 36,000 units annually The operating profit surged by 27.3%, reaching a record 14 billion SEK in 2017, up from 11 billion SEK in 2016 Additionally, net revenue rose by 16.5% to 210.9 million SEK, while the operating profit margin improved from 6.1% to 6.7% This growth was primarily driven by strong sales in China and the US, Volvo's largest markets CEO Håkan Samuelsson emphasized the company's success with new models and record sales, predicting that 2018 would also set new sales records.
Table 2 Volvo retail sales on over the world in 2016 and 2017
Volvo retail sales, number of cars sold 2016 2017 Change %
In 2017, Western Europe experienced a modest 2.8% increase in retail sales, totaling 298,948 units, with key markets like Germany, the UK, and Belgium showing slight growth Sweden and Norway also contributed nearly 7,000 units in sales The XC60 SUV emerged as Volvo's best-selling model, with 61,148 units sold, while the XC90 SUV added to the strong performance with 29,086 units Notably, China has been Volvo's largest market since 2013, benefiting from a tax cut on small engines, resulting in a remarkable 25.8% growth rate and 114,410 units sold.
In the highly competitive U.S automotive market, Volvo sold 81,504 cars, reflecting a slight decline of 1.5% The brand has successfully aligned with the global SUV trend and is actively working to expand its presence in rapidly developing regions.
Table 3 Top 07 luxury car brands have positive change from 2016 to 2017
Luxury Car Brands Have Positive Change 2016 2017 Change %
In 2017, JATO Global's analysis of the top 25 automotive brands revealed that Geely ranked first among seven luxury car brands, demonstrating a positive change from 2016 Since Volvo joined the Geely Automobile Corporation, Geely has experienced consistent success over the past seven years, culminating in significant achievements in 2017.
61% growth rate with 1,245,055 units including Volvo On global scale, Volvo has been growing unstopably, and the number of sold Volvo cars in 2017 is equal to
22.5% Mercedes – the luxury market leader, 28.2% BMW, 30.9% Audi.
Volvo's business performance in Vietnam has not matched its global success, particularly when compared to its achievements in China According to VAMA statistics from the past three years, Mercedes, Lexus, BMW, Audi, and Peugeot rank as the top five luxury car brands in Vietnam Notably, Mercedes has consistently captured over 50% of the luxury car market share annually, establishing itself as the preferred choice among consumers.
Dong to develop Volvo in Ho Chi Minh and Ha Noi, but 95 sold out units in 2016 and
In 2017, Volvo faced significant challenges in its Ho Chi Minh branch, selling only 160 units in 17 months, marking a period of substantial failures for the company Since the establishment of the showroom in August 2016, located in the competitive luxury car dealer hub of Phu, the situation has only deteriorated further.
In My Hung town, located in District 7 of Ho Chi Minh City, the Volvo Ho Chi Minh branch reported disappointing sales figures, contributing only 40 cars over the first eight months of 2016 and 60 cars throughout 2017 The peak monthly sales reached just 8 vehicles, falling short of the branch managing director's minimum sales target of 20 units.
Table 4 Sales volume of luxury dealers around Volvo Ho Chi Minh in 2016 and 2017
Dealers Y16 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Y17
(Source: Volvo Ho Chi Minh Branch Sales Department) There are 5 nearest luxury car showrooms around Volvo Ho Chi Minh branch namely:
Mercedes Phu My Hung, BMW Phu My Hung, Peugeot Phu My Hung, Lexus Ho Chi
Minh and Audi Ho Chi Minh All of these competitors are located in District 7 and
District 1, and their monthly sales volumes are always impressive which make them among the best luxury car dealers in the city According to data from Volvo Ho Chi
Minh sales department, Mercedes Phu My Hung sold out over 90 units per month in
2017, Lexus Ho Chi Minh got over 40 units, BMW Ho Chi Minh and Audi Ho Chi
In 2017, Peugeot Phu My Hung consistently sold 6 units per month, while Minh recorded sales of 18 and 24 units In contrast, Volvo Ho Chi Minh managed to sell only 60 cars throughout the entire year, which was merely 87% of Peugeot's monthly sales and about 66.7% of Mercedes Phu My Hung's average monthly volume This disappointing performance raises concerns regarding the 30 billion Vietnam Dong investment in Volvo Ho Chi Minh, highlighting the need for improved sales strategies.
In 2017, the overall demand for the automobile industry, particularly in the luxury segment, declined compared to the previous year This decrease was largely attributed to government decree number 116/2017/ND-CP, which imposed new requirements for the manufacturing, assembly, and import of motor vehicles, as well as regulations on warranty and maintenance services.
Chi Minh sales volume was still extremely low comparing to other dealers in the same location after two years operation.
Table 5 Statistics of prospects, buyers and closing ratio between Volvo Ho Chi Minh and Volvo Ha Noi in 2017
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Y17
Recent statistics from the Volvo Ho Chi Minh Branch Sales Department indicate that, despite having a comparable number of prospects, Volvo Ho Chi Minh achieved only a 60% buyer conversion rate compared to Volvo Ha Noi.
Volvo's Ho Chi Minh branch is experiencing low sales performance, falling short not only against other luxury dealerships in the Ho Chi Minh area but also compared to the Volvo branch in Ha Noi.
In the meeting of board of directors of Nordic Car company in December 2017, Mr. Mai Viet Ha – chairman of Nordic Car concluded that
Our sales results have fallen short compared to other luxury automobile distributors, while Volvo has achieved unprecedented global success Volvo's triumph stems from its strong commitments to safety, technology, and environmental sustainability In contrast, Nordic Car has struggled to replicate Volvo's success on a global scale To address our low sales, we must thoroughly analyze the key factors influencing our performance: product, price, place, and promotion, to identify the most effective solutions for improvement.
This study aims to identify the primary reasons behind the low sales results of Volvo in Ho Chi Minh City, while considering time and cost constraints It will also propose effective solutions to address these issues and demonstrate their applicability to the company's challenges.
This study employs a qualitative methodology, utilizing secondary data from JATO, VAMA, and reports from the Ministry of Industry and Trade of Vietnam, alongside insights from Nordic Car's sales and marketing departments In-depth interviews were conducted with various stakeholders, including Volvo sales personnel and marketing managers from the Ho Chi Minh and Hanoi branches, showroom directors, and customers who purchased Volvo vehicles as well as those who chose not to buy.
PROBLEM IDENTIFICATION
Potential Problems
According to Riaz and Tanveer, a product is anything offered to customers that fulfills a want or need, serving as a crucial element in the buying and selling process For Volvo, the car is the primary consideration for potential buyers Kotler proposed in 2004 that products should be understood on three levels: the core product, which represents the fundamental benefit—such as capturing memories with a camera; the actual product, which highlights its unique advantages over competitors; and the augmented product, which includes intangible benefits like after-sales service and free delivery.
Volvo is perceived as less luxurious compared to other brands in Vietnam, primarily because it began officially distributing cars in the country in 2016 As a result, Vietnamese consumers are not yet familiar with Volvo products and often prefer established luxury car brands that have been present in the market for decades.
Mr Nguyen Thanh Tam – a prospect who used to come to Ho Chi Minh showroom and decided not to buy Volvo stated that:
After evaluating various luxury car brands, I opted for a Mercedes E250 over a Volvo, as I desired a prestigious sedan that reflects my financial status in the business world Priced at 2.45 billion Vietnam Dong, the Mercedes E250 is 200 million Dong less than the Volvo S90, yet I believe it embodies greater luxury Mercedes has long been synonymous with luxury in Vietnam, a reputation that has influenced my decision since my teenage years.
According to Kotler and Armstrong, consumers perceive a brand as a crucial element of a product, with branding enhancing its value In Vietnam, Volvo's late entry into the luxury car market, compared to established brands like Mercedes, BMW, and Audi, has led to a cautious approach among consumers unfamiliar with luxury brands, who often prioritize brand prestige in their purchasing decisions.
Secondly, Not many people in Vietnam have much knowledge about luxury cars and they are familiar to use cars which are specialized design for Vietnamese condition.
Thus, they criticized that Volvo in Vietnam does not have many differentiation comparing to other luxury cars.
Mr Nguyen Quang Huy, an experienced salesman at Volvo Ho Chi Minh, highlights the challenge of selling luxury cars to affluent customers who lack knowledge about the brand He notes that persuading potential buyers to choose Volvo after discussions or test drives is difficult, as many express dissatisfaction with the distinct feel of Volvo vehicles compared to other cars With a budget of 2.7 billion Vietnam Dong, customers often prefer alternative options that come with attractive gifts Huy also mentions that some clients leave the showroom when better offers are not presented, making it challenging to convey the luxury Scandinavian values of Volvo to Vietnamese consumers.
Lastly, Volvo features are assumed that they are unsuitable for Vietnamese users demands because Volvo does not have an assembly plant in Vietnam to adjust these features.
Mrs Luu Bao Huong – Marketing manager of Ho Chi Minh branch also gave her comments on product that
All Volvo models available in Vietnam are fully imported from Sweden and designed to meet international standards rather than being tailored for the Vietnamese market Critics argue that the lack of a local assembly plant results in features that may not be practical for local driving conditions, such as automatic braking systems and excessive vibration when motorcycles pass closely, as well as deeper tire grooves intended for snowy weather.
Kotler 10 defined place “as a set of interdependent organizations that caters to the process of making a product available to the consumers” According to Goi 12 and Muala & Qurneh 13 stated that distribution system is a key external resource An organization should pay attention to place decisions, because of the importance of the product and consumption occurring at the same time and at the same place; a place that provides all information of customer, competition, promotion action, and marketing task Normally it takes years to build, and it is not easily changed It ranks it importance with key internal resources such as manufacturing, research,engineering, and field sales personnel and facilities It represents, as well, a commitment to a set of policies and practices that constitute the basic fabric on which is woven an extensive set of long-term relationships All car corporations are alike in distribution by opening networks of showrooms Nordic Car company is not an exceptional case, and Volvo South East Asia decided to locate two showrooms, one in district 7 - Ho Chi Minh city and one in Long Bien district - Ha Noi capital In Ho Chi Minh city, there are some complaints from both customers and salespeople about the location.
Mr Nguyen Thanh Tam – a consumer used to visit showroom complained that Ho Chi Minh branch is not a convenient place to visit
A luxury car showroom should be strategically located in District 1, where affluent customers live and work, ensuring they encounter Volvo vehicles daily However, the current showroom's location in District 7 is too distant from the central area and situated along Nguyen Van Linh, a busy road frequented by heavy trucks This distance and the potential for truck accidents may deter luxury clients from visiting the showroom.
Ms Le Thi Phuong – a fresh salesperson in Ho Chi Minh branch thought that the location has high retal price and there is high competition among many old luxury brands.
Volvo's location in Phu My Hung, District 7, presents challenges for selling cars due to high rental costs and fierce competition from established brands like Mercedes, BMW, Porsche, and Peugeot Despite attracting 6 to 7 daily visitors, I face difficulties in collecting customer data and following up effectively, as many potential buyers have often purchased other vehicles by the time I reach out.
Riaz and Tanveer (9) emphasized that companies can utilize various direct and indirect channels to deliver their products to customers, highlighting that the selection of these channels significantly influences sales outcomes.
Mrs Ngo Kieu Trinh – a consumer who bought a Volvo XC90 in Ho Chi Minh branch complained that
My hometown is in Long An province, and during my commute, I often see Volvo cars being transported from Hiep Phuoc – Nha Be seaport to District 7 My husband and I dedicated numerous off days to visit the Volvo showroom in District 7 multiple times to purchase an XC90 Volvo car The process was time-consuming and challenging since the Nordic Car company lacks a second-level agency in Long An If we weren't so passionate about this car, we might have chosen a different brand.
3.1.3 Inefficient advertisements and PR activities
Modern marketing extends beyond creating quality products, setting competitive prices, and ensuring product availability; it also involves effective communication with customers, known as the promotion mix This promotion mix includes advertising, public relations (PR), sales promotions, and personal selling, all essential for engaging and informing the target audience.
Mishra 15 stated that promotion can be loosely classified as “above-the-line” and
"Below-the-line" promotion refers to targeted marketing strategies, while "above-the-line" promotion encompasses mass media advertising through platforms like television, radio, newspapers, and online search engines, which can be further categorized into online and offline activities Since the establishment of two showrooms, the Nordic Car Sales and Marketing department has implemented various offline advertising programs; however, these efforts have not translated into higher sales figures Both Sales and Marketing managers attribute the lack of success to insufficient budget support from Volvo South East Asia, which hampers their ability to conduct effective offline advertising campaigns to compete with other luxury brands.
Mr Nguyen Quang Phong and Ms Luu Bao Huong, Sales and Marketing managers at Nordic Car in Hanoi and Ho Chi Minh City, expressed that maintaining the Volvo brand image across multimedia channels has become increasingly costly They have repeatedly requested additional advertising support from Volvo's Southeast Asia headquarters, but have not received any extra funding Despite their efforts, the marketing team at Volvo stated that the brand is already well-established as a luxury car in Asia, advising Vietnamese dealers to strictly adhere to their marketing guidelines without alterations.
Secondly, Nordic Car Sales and Marketing department in Ho Chi Minh spent most of budget to build Volvo brand online, while digital performance was not concentrated on seriously.
Mr Nguyen Anh Linh – Managing Director of Ha Noi showroom confirmed that
The marketing teams in Ho Chi Minh and Ha Noi appear overly focused on increasing Volvo's online visibility rather than targeting potential customers through established online platforms The significant investment in banner ads on automotive forums has not translated into increased contracts for the company In contrast, leveraging effective online channels like Facebook, Google, and Instagram can provide luxury car dealers with direct access to customers while offering precise tracking of campaign efficiency.
Moreover, sales consultant also blamed that PR activities of Ho Chi Minh branch are not helpful in creating more deals for salespeople.
Mr Le Thi Phuong – a Nordic Car fresh sales consultant in Ho Chi Minh said that
Problem Validation
The automobile industry in the Asia-Pacific region, especially in Vietnam, has experienced significant growth in recent years Among the prestigious luxury manufacturers, Volvo is on a robust growth trajectory However, there are concerning signs regarding Volvo's business performance that warrant attention.
Ho Chi Minh City is experiencing disappointing sales figures compared to other luxury car dealers and even Volvo Hanoi, raising concerns for Nordic Car executives Identifying and validating the primary issue among the six identified challenges is crucial for developing effective solutions that can drive positive change.
3.2.1 Eliminating product, place, promotion and price as the main problem
Regarding to unsuitable product for Vietnamese, this issue is not a major problem leading to low sales results of Volvo Ho Chi Minh branch.
Volvo is renowned for its quality and appeal to high-class consumers in Vietnam, consistently ranking among the top luxury car brands globally Its reputation reflects the social status associated with luxury vehicle ownership.
US News agency ranked Volvo as one of best 14 luxury cars in
In 2016, Volvo was recognized as one of the top ten luxury car brands in China by Forbes magazine and ranked seventh among Europe's leading car brands by the European Business Review The company has consistently been awarded "Car of the Year" from 2015 to 2016 by esteemed outlets like Business Insider, Auto Express, and TU Automotive Additionally, in Vietnam, Xe Hay magazine named the Volvo XC90 the best luxury SUV, highlighting its advanced technology over competitors such as the Mercedes ML-Class, BMW X5, Audi Q7, and Ranger.
Volvo stands out in the luxury car market, particularly in safety features, which are often undervalued by consumers Despite perceptions of less luxury compared to other brands, Volvo offers advanced technologies that surpass Vietnamese expectations The Volvo S90 was recognized by the IIHS as one of the safest vehicles in the large luxury segment in 2017, reflecting the brand's long-standing commitment to safety With nearly 9,000 traffic-related fatalities in Vietnam each year, Volvo prioritizes safety in its design philosophy, which centers around people The inclusion of features like a 360-degree collision warning system and blind spot warnings on the windshield demonstrates Volvo's dedication to providing comprehensive safety solutions for its buyers.
The Volvo XC90 is priced similarly to the Mercedes S-Class, ranging from 5 billion to 12 billion Vietnam Dong Sales consultants face challenges in conveying the value of Volvo, often resorting to urging managers for price reductions Most luxury car brands in Vietnam exclusively import their vehicles, with the notable exception of Mercedes, which assembles a limited range of sedans priced between 1 billion and nearly 2 billion Vietnam Dong, while SUVs and other models are imported from Germany Since 2018, Mercedes Benz Vietnam has begun assembling the S-Class and Maybach models.
The location of the Volvo dealership in District 7, Ho Chi Minh City, is not the primary factor behind its low sales performance While some consumers perceive District 7 as distant from District 1, luxury brands like Mercedes and BMW have established dealerships there due to the need for spacious, modern facilities Historically, the trend of centralizing luxury car dealerships has led to high rental costs and traffic congestion, making District 7 a strategic choice for Volvo Sales personnel at Nordic Car have acknowledged losing potential deals to competitors like Mercedes and Porsche, attributing this to their inability to effectively engage with Volvo prospects Furthermore, the decision regarding dealership locations is not solely made by Nordic Car's management, as it requires approval from Volvo's Southeast Asia division Nordic Car's leadership has prioritized establishing the Volvo Ho Chi Minh branch as a premier luxury car dealership over expanding into other provinces in the next two years.
Mr Bui Cao Sinh – Managing director of Volvo Ho Chi Minh branch shared that
Building a robust network of showrooms is essential for enhancing visibility and expanding sales opportunities in the luxury car market Initially, our focus will be on establishing a single standardized showroom to optimize our investment of 30 billion Vietnam Dong This professional dealership will be our top priority in the first two years of operation I am confident that with careful preparation and steadfast determination, we can effectively compete with established industry leaders.
Inefficient advertisements and PR activities are not the primary reasons for the low sales results of Nordic Car Company Sales and Marketing statistics reveal that in 2017, above-the-line promotion activities generated a similar number of prospects for both the Ho Chi Minh and Ha Noi branches, approximately 750 people each However, the Ha Noi branch exhibited a significantly higher closing ratio compared to its Ho Chi Minh counterpart throughout the entire year.
In 2017, the marketing team achieved a notable success by attracting over 60 potential customers in a month, despite the Ho Chi Minh branch's sales being only 8.0% The primary goal of their advertising and PR efforts was to shift consumer perceptions towards making a purchase, rather than simply moving them from unawareness to a buying decision To increase awareness for Volvo, a new luxury car brand competing with established names like Mercedes, BMW, and Audi in Vietnam, the team utilized nearly all mass media channels, operating on a limited budget However, the disappointing sales figures for Volvo in Ho Chi Minh cannot be solely attributed to their advertising and PR strategies.
Volvo Ho Chi Minh has effectively addressed the common complaints regarding direct sales promotions by differentiating itself from competitors through an attractive policy that includes a five-year warranty, one year of free maintenance, and free roadside assistance, significantly surpassing the typical three-year warranty offered by other luxury car brands However, this valuable information has not been communicated effectively to potential buyers, particularly those in the decision-making stage, such as Mr Nguyen Thanh Tam As a result, sales consultants often express dissatisfaction with the sales promotion policy without recognizing that their failure to properly follow up and provide essential information to qualified prospects is their biggest oversight.
Volvo Corporation positions its products firmly in the luxury segment, avoiding medium or low pricing strategies across global markets Prestige pricing, as noted by Wiedmann et al., enhances perceived quality and desirability In Vietnam, Volvo competes with brands like Mercedes, BMW, Audi, and Lexus, necessitating a similar high price point Mr Nguyen Anh Linh, Managing Director of Volvo Ha Noi Showroom, highlights that dealers cannot reduce prices by more than 5% without approval from Volvo South East Asia The Volvo S90 was priced at approximately 2.7 billion Vietnam Dong in 2017, with a minimum sale price of 2.565 billion Vietnam Dong, despite competitive models like the Mercedes E250 selling for 2.5 billion Vietnam Dong Additionally, the limited availability of the S90, with only 6 to 10 units imported annually, reinforces its luxury status, while the more competitively priced XC90 SUV, at 3.399 billion Vietnam Dong, plays a significant role in Volvo's sales structure This pricing strategy aligns with Volvo's branding objectives and inventory considerations.
Domestic automobile spare parts are straightforward, while 90% of key spare parts are imported, primarily from Thailand, Korea, Japan, and China Since 2017, Decree No 153/2017/ND-CP has prevented a reduction in tax rates for most spare parts from ASEAN countries and China, maintaining rates between 10% and 30% Spare parts categorized under tariff codes 87.01 to 87.05 are subjected to standard tax rates as per Decree No 125/2017/ND-CP, resulting in similar tax obligations for parts from Sweden, Germany, and Japan The perception of high Volvo spare parts prices stems from negative rumors, which customers exploit during negotiations with sales consultants Consequently, the uncompetitive pricing of sedan models and their spare parts is not the sole factor contributing to poor sales performance, and resolving these issues requires collaboration with Volvo Corporation to adjust pricing strategies.
3.2.2 Illuminating ineffective personal selling as the main problem
Ineffective personal selling activities are the primary issue contributing to the low sales performance of Nordic Car Company, attributed to three key reasons.
The in-depth interviews revealed that the primary issue affecting Nordic Car Company's low sales is inadequate personal selling activities Customers noted that Volvo Ho Chi Minh sales consultants provided less consistent support compared to other luxury car dealers Many expressed frustration at having to explain the use of advanced features in Volvo cars to the sales team, highlighting a gap between theoretical knowledge and practical skills Prospective buyers felt uncomfortable due to long wait times and often received inaccurate information regarding accessories, insurance, bank loans, and warranty policies Additionally, managers reported being overwhelmed by daily issues related to disorganized schedules and customer complaints Sales consultants acknowledged losing sales opportunities due to excessive time spent on Excel reports, which hindered their ability to nurture potential relationships and seek assistance from colleagues for improvement.
POTENTIAL CAUSES
Lack of professional customer relationship management system
Volvo Ho Chi Minh's sales consultants struggle to secure appointments with potential customers due to poorly nurtured relationships and inadequate data management Effective personal selling requires a precise database and a deep understanding of prospects' needs, as highlighted by Szymanski DM 20, who emphasizes that declarative knowledge is crucial for selling success Despite 17 months of operation, the sales team continues to rely on Microsoft Excel for customer data, price quotations, and reporting, underestimating the significance of a modern sales management system This oversight hinders their ability to effectively manage and utilize customer information, which is essential for enhancing the selling process Additionally, sales consultants tend to input only the information they believe is valuable, further limiting their effectiveness in securing contracts.
Excel files, and they always struggle with messy data and unscheduled activities from customer’s requirements.
Mr Nguyen Quang Huy admitted that
In the early days, we relied on notebooks and Excel files to gather customer data and manage our schedules However, within just three months, the influx of information became overwhelming Many seasoned sales consultants, myself included, found ourselves relying on intuition to evaluate customers, concentrating on those we believed were most likely to purchase Volvo cars soon.
To tell the truth, finding messy data and making Excel reports are terrible things that we have to face day by day.
The Volvo Ho Chi Minh sales team has significantly underestimated the necessity of a professional system for storing, categorizing, tracking, and managing customer information, which has hindered their ability to identify and meet the needs of potential clients effectively Mr Nguyen Thanh Tam experienced this firsthand, noting that while he received regular follow-ups from a Mercedes sales consultant, he was not contacted by Volvo salespeople, leading him to feel undervalued In a competitive market dominated by brands like Mercedes, BMW, Audi, and Lexus, losing a single prospect translates to substantial financial loss and the potential loss of future customer relationships Volvo's management acknowledges the chaos caused by disorganized daily reports and erratic communication from sales staff but lacks a clear strategy to implement an effective system to replace their outdated Excel-based processes.
Mr Bui Cao Sinh, Managing Director of Volvo's Ho Chi Minh branch, highlighted that the sales team in Hanoi collaborates more effectively by utilizing Google Spreadsheet for daily reports and customer data storage While Google Spreadsheet functions similarly to Excel and allows for online data access, it lacks specialized tools for modern sales activities, such as scheduling meetings, reminding sales staff about prospects, and automating quotation emails and car images Despite the desire for advancement among Mr Sinh and the Ho Chi Minh management team, they face resource constraints that hinder the development of a more efficient system.
Disregard of technical guide on Volvo functions
The board of directors at Volvo Ho Chi Minh has prioritized hiring experienced salespeople from other luxury car brands, aiming for quick sales results However, this strategy has led to a focus on price negotiations rather than providing practical guidance on using Volvo cars, particularly the complex features of models like the XC90 While some new sales consultants excel in discussing the aesthetics and comfort of premium vehicles, they often struggle with demonstrating advanced functions, such as the voice guidance system integrated with Apple CarPlay This lack of practical knowledge creates uncertainty for customers considering the significant investment in a Volvo According to McMurry, effective sales for technical products require a deep understanding of product capabilities and the ability to tailor explanations to individual customer needs Customers lacking knowledge about Volvo often pause their purchasing decisions to seek more information, while informed buyers challenge sales consultants on practical usage For instance, a customer recounted a situation where her husband had to instruct a salesman on using the navigation system in Vietnamese, despite the salesman claiming it was impossible Brooksbank emphasizes that product specifications are crucial in the selling mix, yet the Volvo sales team in Ho Chi Minh continues to struggle in advancing prospects through the sales process, often neglecting the practical guidance essential for closing deals.
In 2017, the sales team of Volvo Ho Chi Minh faced significant criticism from both customers and managers for their personal selling practices Mr Nguyen Quang Huy highlighted a stark contrast between the sales team's high theoretical test scores on Volvo products and their poor performance in practical assessments during the Volvo South East Asia training program Many sales representatives attempted to mislead their managers by falsely portraying themselves as proficient users of Volvo vehicles.
Weak team selling accessory, insurance, finance and service
Volvo Ho Chi Minh's sales team primarily focuses on price negotiations but struggles to address customer inquiries about car delivery, screen upgrades, and maintenance timelines, leading to lost sales opportunities Potential buyers have expressed frustration over receiving inaccurate information and enduring delays in getting answers, often requiring multiple follow-up calls The lack of collaboration among departments such as accessories, insurance, finance, and after-sales service fosters uncertainty, hindering customers' final purchasing decisions Despite company policies promoting teamwork, supporting staff are reluctant to engage directly with sales, resulting in inefficiencies and miscommunication This disconnection has been exacerbated by the overwhelming demands placed on support employees, who find it challenging to balance their responsibilities with sales requests Research indicates that effective communication and teamwork are essential for sales success, yet the absence of a unified communication system at Volvo Ho Chi Minh hampers their ability to operate cohesively, ultimately diminishing the effectiveness of their personal selling efforts.
Cause validation
Based on the cause and effect tree, in-depth interview from 8 respondents divided into
The Volvo Ho Chi Minh branch faces challenges in personal selling effectiveness, primarily due to a lack of a professional customer relationship management system, neglect of practical guidance on Volvo's technical functions, and a weak team-selling approach concerning accessories, insurance, finance, and services Analyzing these factors will help identify the most critical issues affecting sales performance, enabling the branch to implement targeted solutions for improvement.
The shift from a traditional sales-oriented model to a customer-centric approach has transformed the selling process, emphasizing the significance of each stage due to increased competition and advancements in technology Research by Brooksbank highlights that in the modern selling process, the interview and matching stages account for 80% of success, in contrast to only 20% in the past, underscoring the critical role of nurturing long-term relationships with valuable customers Moncrief and Marshall further emphasize that effective database and knowledge management serve as a modern pre-approach step, enabling salespeople to understand customer history and anticipate needs, thereby fostering enduring customer relationships and generating lifetime value In this context, Volvo Ho Chi Minh's failure to recognize the importance of a robust customer relationship management system represents a significant oversight in a competitive market filled with luxury brands.
In the digital era, companies are investing significant resources into database management systems to enhance customer service for salespeople and decision-makers The success of modern selling hinges on salespeople's understanding of customers' predetermined needs For instance, Volvo Ho Chi Minh's sales consultants acknowledged their failure to effectively collect customer data and maintain relationships using disorganized Excel files, which wasted valuable time that could be spent on prospects The absence of a professional customer relationship management system resulted in chaotic schedules and disarray among employees across departments, contributing to the overload of support staff and hindering team selling efforts Furthermore, the quality and quantity of communication among team members suffered due to the lack of accurate data.
Moncrief and Marshall (2019) highlight that rigid adherence to a seven-step personal selling process may not lead to practical success, as modern salespeople can leverage extensive database knowledge to adopt more effective strategies for approaching, presenting, and closing deals At the Volvo Ho Chi Minh branch, experienced sales staff prioritize engaging with a select group of potential customers using price-testing techniques, having identified their needs through digital tools While they have benefited from platforms like Facebook, Google, Zalo, and Twitter to focus on quality leads, the absence of a professional customer relationship management (CRM) system has hindered their ability to capitalize on potential opportunities Thus, the lack of an effective CRM is the key factor contributing to the inefficiency of personal selling at the Volvo Ho Chi Minh dealership, necessitating targeted solutions to address this issue.
Cause - and - effect tree
From the 15 reasons actual survey with eight respondents together with theories and literatures, the preliminary cause – and – effect tree will be developed as follows:
Ineffective personal selling activities at Volvo cars stem from three key factors: the absence of a professional customer relationship management system, neglect of practical guidance on Volvo's technical functions, and insufficient team-selling efforts in areas such as accessories, insurance, finance, and service These shortcomings adversely affect financial performance and hinder the sales team's turnover.
Ineffective selling can result in low sales performance, increased costs, and diminished financial outcomes, as highlighted by Cravens et al The director of Volvo Ha Noi noted that the company's fixed costs amount to approximately 1.2 billion Vietnam Dong per month, emphasizing the financial impact of sales inefficiencies.
In 2017, the gross profit from sales was 120 million Vietnam Dong, with a contribution margin of approximately 50% after incentives for the sales team and managers To break even, the company needed to sell 20 units per month; however, the actual average monthly sales were only 5 units, resulting in a shortfall of 15 units This discrepancy led to an accumulated loss exceeding 10 billion Vietnam Dong.
Futrell and Parasuraman highlighted the link between ineffective selling activities and employee turnover, noting that low performance diminishes sales satisfaction, which in turn influences sales turnover rates They found that when salespeople underperform, sales managers often respond with increased pressure, negative feedback, and disciplinary measures, prompting many sales staff to seek employment elsewhere unless they are satisfied with their current roles A report from Volvo's Ho Chi Minh Sales and Marketing department revealed that by the end of 2017, only 30% of the salespeople who initially joined Nordic Car remained with the company.
ALTERNATIVE SOLUTIONS
The first alternative solution: Using a basic customer relationship management
Ackoff 42 stated that in his Data-Information-Knowledge-Wisdom hierarchy, raw data is processed into usable information, and information is refined into knowledge, and then wisdom derived from knowledge to solve issues Volvo Ho Chi Minh sales team got stuck in solving daily problems of selling activities from sales consultants to managers and even the managing director, because raw data was not turned into information, then information was not processed into knowledge, and little knowledge was not transformed to much wisdom without supports from a professional CRM software.
Mr Bui Cao Sinh – Managing Director of Ho Chi Minh showroom shared that
After 5 months working together with my sales team, there were too many debates between sales consultants and leaders about how to keep good relationships with all of their potential customers, a lot of complaints each other about weak team-selling among company members leading to loss deals We really need an automatic system combined with current Volvo regulations, processes, targets in order to guarantee that our potential customers will be satisfied from the time they started to have buying demands to the final closing step through full and appropriate participation of all employees from different functions.
Volvo Ho Chi Minh faces ongoing challenges with basic Excel files and Google Spreadsheets, highlighting the need for a cost-effective CRM solution to enhance customer care, automate sales processes, and manage online prospects There are two primary types of basic CRM software available for small and medium enterprises: free systems from global leaders like Microsoft Dynamics and Salesforce, which offer limited functions as a gateway to more advanced features, and affordable options from Vietnamese suppliers that cater specifically to local needs While these basic CRM solutions provide advantages such as quick installation and low cost, they also come with drawbacks, including data storage on supplier servers, limited user access, and restricted analytical capabilities Among the Vietnamese options, Azsoft stands out by offering a uniquely designed CRM for automobile dealers at a competitive price of 45,000,000 VND per year, compared to other providers like Gen CRM and Getfly CRM, which charge significantly more for their services.
•Easily approach and select many suppliers and softwares on the internet without any charge.
•Fast installation and easy configuration.
•Materials of using guidance are well-prepared and always disposable.
•Immediately improve the quantity of relationship between sales consultants and their prospects
•Immediately provide accurate and cohesive information relevant employees accrossing departments about customers for
•Saving database on supplier’s server
•Only one preset process for salespeople
•Limited analytical reports for managers and directors
•Limited communication channels for team work
•Limited integration to other working systems.
Table 7 Estimating cost of using Azsoft
1 Comparing global and local CRM suppliers Free
2 Signing up for online administrative account and paying fee 45,000,000
3 Creating other accounts and assign jobs with preset KPIs Free
5 Training employees how to use Azsoft CRM software Free
(Source: The evolution of the seven steps of selling 19 )
The second alternative solution: Using a modular customer relationship
Raman et al emphasize that CRM applications should enhance companies' operational, collaborative, and analytical capabilities Volvo Ho Chi Minh, a medium-sized company under Savico Corporation, faces higher costs and extended implementation times when opting for modular CRM software over a basic version However, the complexity of their business necessitates advanced features such as data protection, extensibility, and integration with other branches and the parent company Investing in modular CRM software addresses the limitations of basic solutions, providing both short-term and long-term benefits Among the top five Vietnamese modular CRM suppliers—CRMViet, Getfly CRM, Online CRM, ERP Online, and ITG ERP—CRMViet stands out as the most cost-effective option, offering a comprehensive project price, customer database storage on local servers, and tailored modifications This adaptability ensures compliance with Volvo's regulations while enhancing the sales process For instance, CRMViet automates the application of Volvo's 1:1:1:1 follow-up rule, streamlining appointment scheduling and communication among sales teams and management, ultimately facilitating successful contract closures.
On the designated meeting day, 51 demo cars will be prioritized for use, ensuring sales staff have a clear schedule for test drives Team leaders from various departments, who are available during this time, will assist in coaching prospects alongside sales personnel to demonstrate the practical use of Volvo vehicles Following the delivery of a car to a customer’s home, the 3:3:3:3 rule from Volvo's sales regulations will be enforced, similar to the 1:1:1:1 rule This entails that three hours post-delivery, the salesperson must check in with the customer to confirm their proficiency with the vehicle; three days later, they will inquire about any technical issues; three weeks after, they will gather feedback on the customer’s experience; and after three months, they will remind the customer of their first maintenance appointment Additionally, CRMViet will provide daily lists to sales consultants, detailing prospects and customers to contact, facilitating the progression through the sales funnel and fostering new deals with existing customers.
CRMViet enhances sales performance by automatically notifying managers of missed actions and adjusting salespersons' KPIs accordingly If a prospect is not contacted within the established 1:1:1:1 rule, management can reassign that prospect to another consultant as a corrective measure Functioning as a comprehensive data repository, CRMViet aids managers at various levels in making informed decisions According to Ronald 45, CRM systems store data like a warehouse, utilizing data mining techniques to uncover sales opportunities This allows salespeople to track their completed and pending tasks over time, while managers gain insights into their team's strengths and weaknesses, enabling more effective sales strategies Additionally, support staff from other departments can identify key focus areas for inventory management Ultimately, CRMViet provides a holistic view of the business, enhancing understanding of customer insights and facilitating the development of effective policies tailored to current business conditions.
•Vietnamese language setting for all accounts and proccesses
•Database is saved on Volvo Ho Chi Minh private server
•Modified modules increase level convenience of use, adaptability to business circumstances, and integration to further modern system.
•Sales regulations and processes are combined in CRMViet software to forces all company employees to accomplish their responsibilities.
•Prospects and bought customers are cared more effectively and sufficiently, and profits can be derived from long-term relationships.
•Time and efforts of different employees in different functions are optimized by automatic arrangement of schedule in order to support selling more cars.
•Sales consultants have more lessons and opportunities from their recorded mistakes and successes in order improve personal selling activities by themselves.
•Managers and directors are able to see general picture of business from processed information and knowledge of necessary reports.
CRMViet software is an ideal choice for Volvo Ho Chi Minh due to its Vietnamese language support and competitive pricing compared to foreign suppliers The software installation involves an initial cost of 21,500,000 VND for the first year, plus 550,000 VND for each user beyond ten, totaling 38,000,000 VND annually for 40 users Additionally, renting a private server from PA Solutions costs approximately 36,000,000 VND per year Customizing the CRM system to meet specific company needs adds another 10,000,000 VND annually While training employees is free, Volvo Ho Chi Minh must provide necessary documents, equipment, and training rooms Overall, the total cost of implementing CRMViet as a solution for enhancing personal selling activities is 84,000,000 VND for the first year and 41,700,000 VND for subsequent years.
Table 8 Estimating cost of using CRM Viet software in a year
1 Comparing among local best supplier by trials Free
2 Buying the highest service of CRMViet for 40 users 38,000,000
3 Renting private server to store data per year 36,000,000
Modifying CRM software functions to better match company processes and positions and maintenance fee (15% total establishment cost)
5 Training employees how to use CRM software Free
(Source: The evolution of the seven steps of selling 19 )
In conclusion, the decision to eliminate fully-deployed ERP, bespoke, and foreign CRM software for Volvo Ho Chi Minh was driven by cost and complexity concerns To enhance sales effectiveness, the company should consider either Azsoft or CRMViet While Azsoft offers advantages like lower initial costs and easier setup, CRMViet emerges as the more comprehensive and cost-effective long-term solution Although CRMViet's first-year cost is slightly higher by 39,000,000 VND, it becomes more economical in subsequent years, costing only 41,700,000 VND annually compared to Azsoft's 45,000,000 VND Additionally, the total investment of 84,000,000 VND for CRMViet includes a robust server capable of supporting various software applications, such as call center and accounting systems, ultimately leading to greater savings over time.
The simplicity of Azsoft software poses challenges for Volvo Ho Chi Minh, an authorized dealer of the Volvo Corporation, as it lacks the necessary adaptability for effective operation.
Volvo Corporation requires a robust CRM software that can generate detailed sales reports to optimize their sales team's efficiency A basic CRM lacking this capability would be ineffective, as it forces salespeople to manually transfer data to Excel for reporting, wasting valuable time Therefore, implementing a modular CRM solution like CRMViet, which offers essential functions and customizable modules to meet specific needs, is the ideal choice for Volvo Ho Chi Minh after 17 months of operation.
In today's digital landscape, relying on a static data storage system poses significant risks for future growth As databases expand and the need for synchronization with larger systems, such as a parent company's database or an enterprise resource planning (ERP) system, becomes critical, the rigid modules of Azsoft may need to be dismantled and upgraded This transition can lead to substantial financial losses, as well as wasted time and resources.
The theory of the evolved personal selling process emphasizes that effective database and knowledge management are crucial for success In today's highly competitive technological landscape, ensuring database security is essential for any business Relying on basic CRM software, like Azsoft, poses a significant risk of data loss, especially when sensitive information is stored on a supplier’s server In contrast, the CRMViet solution offers enhanced protection for Volvo Ho Chi Minh by allowing all modified module source codes to be stored on their private server This setup enables easy data restoration and synchronization, as Volvo Ho Chi Minh maintains complete control over their server.
Aladwani (49) emphasized that the effective implementation of a CRM or ERP system in a business relies heavily on users' positive awareness, feelings, and intention to adopt the technology Salespeople and managers at Volvo Ho Chi Minh expressed favorable feedback regarding the use of modular CRM software, such as CRMViet.
Ms Le Thi Phuong said that
I was unaware of the remarkable capabilities of CRMViet, as I initially believed my company lacked the resources to develop advanced software for sales, similar to brands like Mercedes or Lexus This tool is invaluable for salespeople, enabling them to maintain long-term relationships with high-value prospects With its impressive features, CRMViet offers a solution to the chaos of traditional notebooks and missing information The automatic generation and distribution of daily reports to managers will free up time for us to engage more effectively with our customers I am confident that implementing CRMViet will significantly transform our company, and I am eager to participate in the initial phase of the installation project to help tailor specific functions for our Volvo sales process.
Despite concerns about the absence of a specialized operator at Volvo Ho Chi Minh, Mr Bui Cao Sinh expressed strong support for implementing CRMViet to address the inefficiencies in personal selling.
The CRMViet application serves as an excellent alternative to using separate Excel files for managing data Initially, I believed that developing software akin to that of Mercedes Phu My Hung or Audi Ho Chi Minh would be complex and costly, especially when integrating it with the Volvo sales process Despite waiting for over a year and a half for support from Volvo South East Asia to provide a comprehensive software solution, we have continued to rely on Excel as a temporary measure The introduction of this software could be the most significant improvement since the establishment of Volvo Ho Chi Minh However, it's essential to first identify a specialized operator to lead the project before reaching out to CRMViet.
ORGANIZATION OF ACTIONS
Volvo's Ho Chi Minh branch faces urgent low sales, particularly below the breakeven point, necessitating immediate action After evaluating various solutions based on benefits, costs, and feasibility, decision-makers should prioritize the implementation of modular CRMViet software The first step involves assessing the supplier's capabilities and collaborating on a detailed action plan that outlines specific timelines and costs The second phase includes three critical steps: customizing the software functions to align with the needs of Volvo Ho Chi Minh, acquiring a dedicated server for data storage, and conducting operational tests of the software Finally, comprehensive training sessions for all company positions and ongoing system maintenance will ensure effective software utilization.
Phases Acitivities Objectives People involved 2018
Jan Feb Mar Apr May Jun Jul Aug Sep Oct-
Evaluating supplier's ability, price, and time of the project
-Evaluate CRMViet ability and feasibility through capacity profile and successfully conducted cases.
-Discuss with CRMViet directors about Volvo
Ho Chi Minh needs and current situation.
- Define suitability of CRMViet software to Volvo
Branch managing director, Sales and Marketing managers, CRMViet directors
- CRMViet designs and presents capability for the project
- Adjust project's costs and schedules for each step
- Sign contract of buying CRM software from CRMViet
- Define total costs and timeframe of the project
Nordic Car managing director, Sales and Marketing manager, CRMViet directors and engineers
Modify software's functions, buy server, test operation
- CRMViet engineers restructure their basic software into Nordic Car sales processes and regulations
- CRMViet engineers create new suitable accounts for different functions in the branch (accessory, insurance, service, etc.)
- Configure CRM software which only used for Volvo Ho Chi Minh branch
CRMViet engineers, Nordic Car sales and marketing managers and functional employees
- Volvo Ho Chi Minh buys server in order to store data of prospects and customers from CRMViet software.
- Bought server is based on CRMViet programmed optimization, enough storing space for at least 3 three years, and having online back- up copy every day.
- Buy an appropriate private server to save and protect data of Volvo Ho Chi Minh branch
Volvo Ho Chi Minh director and IT employees
- Engineers test software's operation for all functions and all accounts.
- Engineers fix discovered errors and synchronize old data from Excel profiles and Google spreadsheets
- Test, fix errors, and synchronize old data to new system
CRMViet engineers, Volvo HCM Sales & Marketing managers, sales people and other functional employees.
- CRMViet sends documents of using software - Help every CRMViet trainers and instruction, account and password to each employee know all Volvo Ho Chi account's owner foundation and Minh employees
- CRMViet experts directly coach all employees importance of CRM in each department about importance of CRM and system it's using regulations
- CRMViet experts directly train executive level including sales consultants and executives from other departments
- Help every employee know their responsibilities and how to use CRM system
CRMViet trainers provide hands-on training for Volvo HCM sales personnel and other functional employees, focusing on the effective use of CRM software Their experts work directly with managers and directors to enhance their ability to support lower-level staff and efficiently manage sales activities through detailed reporting.
- Help managers and directors improve administration skills with CRM reports
CRMViet trainers and Volvo HCM directors and managers
- CRMViet continouosly follow users, fix errors, and maintain the system
- CRMViet repeats training courses within 3 months to assure user's proficiency
- Maintain system and assure user's proficiency
CRMViet engineers and trainers, all Volvo HCM employees
CONCLUSION
Since 2015, the international automobile market has shown significant resilience, particularly in Asian countries, with Vietnam achieving the second-highest growth rate globally in 2016 From 2014 to 2017, automobile sales in Vietnam doubled, marking a historic peak for the industry Meanwhile, Volvo's business performance steadily improved from 2013 to 2017, positioning it among the top luxury car brands worldwide However, the Nordic Car Company, the sole authorized importer of Volvo in Vietnam, has struggled with low sales, particularly in Ho Chi Minh City and Hanoi, falling below breakeven levels In contrast, other luxury car dealers have reported impressive sales in this burgeoning market To address its sales challenges, Volvo Ho Chi Minh must identify the underlying issues and develop effective solutions, as explored in this study on improving personal selling activities at the Nordic Car Company.
Ho Chi Minh city” has clarified some points as below.
Recent analyses of data from the Volvo Ho Chi Minh Sales and Marketing department, the Dealer Customer Relationship Center, and various statistical studies have revealed concerningly low sales results for Volvo cars at the Ho Chi Minh dealer.
The Volvo Ho Chi Minh branch faces several challenges contributing to its low sales, including product misalignment with Vietnamese consumer needs, an inconvenient location, insufficient advertising and PR efforts, lackluster direct sales promotions, ineffective personal selling, and uncompetitive pricing Among these issues, ineffective personal selling activities have been identified as the most significant factor impacting sales performance.
In-depth interviews and thorough analyses of the personal selling process identified three key issues: the absence of professional CRM software, neglect of practical guidance on Volvo's technical functions, and inadequate support for team selling in areas such as accessories, insurance, finance, and service.
A key factor contributing to ineffective personal selling activities is the absence of professional CRM software, which often stems from its underestimation and a lack of internal resources to develop such a system.
Finally, after elimination of unaffordable softwares and consideration between two remaining suitable choices, using a modular CRM software from CRM Viet company is the most appropriate solution.
The study's limited timeframe restricted a deeper investigation into additional factors contributing to low sales at the Volvo Ho Chi Minh branch, which could have been explored through a larger sample size Given more time, the research would have examined the influence of support from the parent company and leadership capabilities on the effectiveness of personal selling activities.
SUPPORTING INFORMATION
This thesis utilized two types of data: secondary data from various sources, including JATO, VAMA, the Ministry of Industry and Trade of Vietnam, Volvo Ho Chi Minh's Sales and Marketing department, and DCRC, which supported academic theories and provided insights into the current sales situation at Volvo Ho Chi Minh Additionally, qualitative research was conducted through in-depth interviews, with participants categorized into four primary groups.
- The first group are two Volvo Ho Chi Minh sales consultants, one is experienced and one is fresh.
- The second groups are two Sales and Marketing managers in Ho Chi Minh and Ha Noi branches.
- The third group are two Showroom Managing Directors in Ho Chi Minh and Ha Noi branches and they are also members of Board of directors of Nordic Car company.
- The fourth group are two customers used to come to Volvo Ho Chi Minh branch, one refused to buy cars and one one accepted to buy a Volvo car.
The interview aims to gather insights and opinions from participants regarding the low sales performance of the Volvo Ho Chi Minh branch, along with their proposed solutions Each group of respondents was asked a series of targeted questions to ensure comprehensive feedback.
This interview guide aims to investigate the factors contributing to the low sales performance of Volvo in Ho Chi Minh City The primary objective is to identify the underlying causes of this issue and propose effective solutions to enhance sales outcomes.
1 Overall background To understand the current situation of business activities in Volvo Ho Chi Minh branch
2 Explore the crucial problem and define the main cause
To explore the crucial problem that lead to low sales results symptom, find out the main cause of the problem
3 The solution To find out the most appropriate solution 5-10 minutes
1 Could you please introduce about yourself
(your name, age, working experience) X X X X
2 Is Volvo business in luxury segment of
Vietnamese automobile market potential or not?
3 Could you share your opinion about sales results of Volvo Ho Chi Minh ? X X X
4 Could you share the reason why Volvo Ho
Chi Minh could not sell Volvo cars well ? X X X
Could you share the reason why you refuse to buy or decide to buy a Volvo car in Volvo Ho
In your point of view, what is the most important problem that leads to low sales results? Why do you think so? X X X
7 What are causes of the problem? And which is the most important cause among them?
8 What are solutions that the company has taken to improve sales results? X X X
What are your opinions about the effectiveness of above solutions? Could you share any alternative you think should be taken to solve this problem? X X X
Time of interview: 9:00, 15 Oct 2017 in Ho Chi Minh city
10:00, 20 Nov 2017 in Ha Noi capital
Duration for each interviewer: 10-20 minutes.
Address: Volvo Ho Chi Minh showroom 340 Nguyen Van Linh street, district 7, HCM city
Volvo Ha Noi showroom 7-9 Nguyen Van Linh street, Long Bien ward, Ha Noi capital
Interviewee: Mr Nguyen Quang Huy
Title: Sales Consultant in Volvo Ho Chi Minh
Working experience period: more than 4 years as sales consultant in luxury car dealers Status: currently working for Nordic Car company
Trinh Duy Bang Good morning Could you introduce something about yourself and the position you are working in this company
Nguyen Quang Huy, a seasoned automotive professional, has one year of experience with a UK Auto company and three years at Mercedes Since 2016, he has been a dedicated salesman at Volvo in Ho Chi Minh City, showcasing his expertise in the automotive industry.
Trinh Duy Bang: over 4 years with a lot of experience Do you think that Volvo business in luxury segment is potential or not?
Nguyen Quang Huy: I believe that Nordic Car company will have a bright future with
Volvo because luxury car segment in Vietnam has few competitors and the whole market is getting bigger recent time with a dizzy speed.
Trinh Duy Bang: Sound great! Could you please share your opinion about sales results of Volvo Ho Chi Minh in 2017?
Nguyen Quang Huy observes that there are fewer sold-out cars at both branches compared to Mercedes or BMW dealerships However, he notes that the Volvo Hanoi branch performs better than its Ho Chi Minh counterpart.
Trinh Duy Bang: Could you share the reason why Nordic Car company could not sell many Volvo cars?
Nguyen Quang Huy believes that Nordic Car's limited sales of Volvo vehicles stem from a lack of differentiation between Volvo and other luxury cars in the same price range He notes that the sales team struggles to effectively communicate the unique value of Volvo cars, particularly regarding their modern features and practical benefits Additionally, there is a noticeable lack of teamwork among supporting departments, which further hampers sales efforts.
Trinh Duy Bang identifies three key factors contributing to the low sales results of Volvo Ho Chi Minh In his opinion, understanding the most significant issue is crucial for addressing the challenges the company faces in the market By analyzing these factors, he aims to uncover the root causes of the sales decline and suggest effective solutions for improvement.
Nguyen Quang Huy identifies ineffective selling activities as the primary reason for low sales results among dealers This issue encompasses both the sales strategies employed and the supporting tools utilized in their operations.
Trinh Duy Bang discusses the various causes of selling problems observed since joining the company, emphasizing the factors that have the most significant impact on these challenges.
Nguyen Quang Huy emphasizes that a successful luxury car salesman must possess a deep understanding of the technical features of various luxury vehicles to effectively demonstrate their performance to affluent customers With experience from UK Auto and Mercedes, he initially believed that merely reading Volvo catalogs would suffice for understanding Volvo cars However, his focus on pricing led to lost sales opportunities To persuade potential Volvo buyers, sales executives should highlight the exceptional stability of Volvo's chassis and the thrill of its new speakers He notes that inexperienced salespeople often speak without a true grasp of the cars’ functionalities, suggesting that the company needs a robust system to modify the behaviors of both new and seasoned sales staff through clear incentives Additionally, he faced challenges when prospects questioned the necessity of Liberty insurance exemptions, requiring direct input from an insurance expert to address their concerns Despite a significant commission increase approved by the director, support was lacking, reinforcing his belief that sales issues primarily stem from the consultants themselves.
Trinh Duy Bang: What are solutions that the company has taken to improve the situation Mr Huy?
Nguyen Quang Huy noted that while directors hired Swedish experts to enhance negotiation skills for better consulting and deal-closing abilities, the approach may not be effective for all salespeople He pointed out that there are two types of sales staff: fresh recruits eager to learn and experienced individuals who may not benefit as much from the training Interestingly, although all salespeople scored high in theoretical tests, many struggled in practical assessments with real luxury cars like Volvo in Southeast Asia, revealing a discrepancy between their claimed expertise and actual performance.
Trinh Duy Bang: What are your opinions about the effectiveness of the solution? Could you share any alternative you think should be taken to solve this problem?
Nguyen Quang Huy believes that the consultants at Nordic Car are primarily seasoned sales professionals from other luxury brands, necessitating a structured tool to enhance their daily product knowledge He emphasizes that investing in foreign trainers at $2,000 per hour is inefficient, as the team already possesses the necessary survival skills Instead, he advocates for reallocating those funds to boost rewards for sales personnel, which would be a more beneficial use of resources.
Trinh Duy Bang: Among all solutions, what is the best way to do? Why do you think so?
Nguyen Quang Huy emphasizes the importance of providing salespeople with a robust tool that promotes discipline and offers tangible benefits This approach is essential for transforming outdated selling behaviors and empowering individuals to master essential selling skills.
In-depth interview 2 (The first time)
Interviewee: Ms Le Thi Phuong
Title: Sales Consultant in Ho Chi Minh showroom
Status: currently working for Nordic Car company
Trinh Duy Bang: Thank you for participating in this interview with me Could you introduce something about yourself?
Le Thi Phuong: My name is Le Thi Phuong, I currently work for Nordic Car company in Ho Chi Minh showroom as a sales consultant.
Trinh Duy Bang: Please tell me your own opinion about Volvo Ho Chi Minh business?
Le Thi Phuong believes that selling Volvo cars in Ho Chi Minh City is currently challenging, but she remains hopeful for improvement in the future.
Trinh Duy Bang: Could you share the reason why Nordic Car company is facing challenges in selling many Volvo cars?
Le Thi Phuong: Firstly, In my own opinion, Volvo Ho Chi Minh locating in Phu My
Hung Town in District 7 faces challenges in selling Volvo cars due to high rental prices and competition from luxury brands like Mercedes, BMW, Porsche, and Peugeot Despite attracting 6 to 7 daily visitors, I struggle to gather customer data and follow up, often finding that potential buyers have already chosen other vehicles Additionally, Volvo's public relations efforts seem ineffective, leading to wasted resources without closing deals Sales personnel often work in isolation, lacking support from colleagues, including my friend Ms Mai Thi Cam Na, who does not directly assist in closing contracts Furthermore, the high cost of Volvo spare parts, attributed to their Swedish origin, poses a challenge, as customers frequently point out the expense I have sought guidance from service managers, but there is uncertainty regarding the impact of import taxes on Volvo parts compared to those from Southeast Asian luxury brands.
Trinh Duy Bang: In your point of view, what is the most important problem that leads to low sales results? Why do you think so?