FINAL REPORT hải hà COMPANY marketing channel of hải hà

UNIVERSITY OF ECONOMICS AND FINANCE FINAL REPORT: HẢI HÀ COMPANY LECTURER: NGUYỄN THỊ NGỌC DUNG GROUP MEMBERS: Name Student ID Mai Thiên Thảo 205044896 Lý Thị Thúy Nhi 205084551 Đoàn Trung Sơn 205040501 Phạm Bá Toàn 205017731 Lê Vũ Thành Trung 205044928 Trần Nguyên Khương 205045049 TABLE OF CONTENTS: I INTRODUCE About Hai Ha Company (HAIHACO) Product lines Hai Ha’s competitors Current distribution system II MARKETING CHANNEL SYSTEM ANALYSIS: Define service output and categorize end-users: Service output demand of end-users and segmentation Marketing channel of Hải Hà: 2.1 Current distribution channel diagram and channel members 2.2 Functions of channel members 2.3 Efficiency template III DEFINE GAP ANALYSIS: Conclusion Service gap Conclusion Cost gap Conclusion of common problems faced by distribution channels IV MAKE OR BUY DECISION What percentage of the distribution channel Hai Ha has – how much % Buy or both ? V STRATEGIC PLAN: Strategic for problem Strategic for problem Strategic for problem VI REFERENCE (according to APA standard) I INTRODUCE About company ● Hai Ha Confectionery Joint Stock Company (HAIHACO) is one of the largest confectionery manufacturers in Vietnam ● The company was established in 1960, has spent more than 50 years of striving and growing up The company has continuously grown, accumulated a lot of experience in production and business ● The predecessor was a small factory with a capacity of 2000 tons/year Today, the company has developed into Hai Ha Confectionery Joint Stock Company with a production scale of up to 20,000 tons/year ● Hai Ha Confectionery Joint Stock Company is the first enterprise in the confectionery industry to be certified with the "Hazard Analysis and Critical Control Points" (HACCP) system in Vietnam This demonstrates the commitment of business leaders to ensure food safety for consumers' health ● Main business activities include: - Producing and trading in confectionery and food processing - Import and export business: raw materials, machinery and equipment, specialized products, consumer goods and other goods - Investing in construction, leasing offices, houses, and commercial centers Product lines Competitors - This is a big competitor of Hai Ha in the North market, with an investment capital of over VND 60 billion and an annual output of about 6000 tons In recent years, Hai Chau company has paid great attention to the issue of diversification and improvement of product quality The company has invested billion dong to import the production line of chocolate-covered sponge cake from Germany and the Netherlands, and at the same time, innovated the management method and reorganized the distribution network across the country Main products are fresh cakes, savory cakes, snack cakes, … - This company is considered as the main competitor of Hai Ha Company in the Mien Nam market Bibica confectionery company has imported a series of equipment from France, Italy, producing many kinds of chocolate confectionery products, hard candies, marshmallows, Jelly, etc The competition is quite strong with Hai Ha's products in terms of product price Bibica confectionery companies also have the advantage of producing sugar, which is the main raw material for making confectionery, so the input price of Bibica is lower than that of Hai Ha On the other hand, these companies are not taxed on sugar products used to make confectionery Therefore, the price of Bibica is lower Current distribution system: - HAIHACO has 03 production factories with modern production lines, applying the ISO 22000 quality management system to ensure the standards of food hygiene and safety, protecting the health of consumers and having a capacity up to 20,000 tons of confectionery products per year - Hai Ha Confectionery Factory is located in VSIP Bac Ninh Industrial Park This is the new and most modern factory of HAIHACO, equipped with many modern production lines along with a team of skilled workers, a large warehouse, the factory fully meets the criteria of green production clean, beautiful, safe, fire prevention and environmental protection - Hai Ha Confectionery Factory is located at Lac Long Quan Street - Tien Cat Ward - Viet Tri City - Phu Tho - Hai Ha Confectionery Factory is located at No Thanh Binh Street - Ha Long Ward - Nam Dinh City - Nam Dinh - The company has 02 dependent accounting branches in Da Nang and Ho Chi Minh to serve the consumption of the Company's products:  Da Nang branch is located at 134 Phan Thanh - Thac Gian Ward - Thanh Khe District - Da Nang With the function of serving the consumption of the Company's products in the Central and Central Highlands markets  Ho Chi Minh branch is headquartered at Lot 27 Tan Tao Industrial Park, Tan Tao Street - Tan Tao A Ward - Binh Tan District - Ho Chi Minh City With the function of serving the consumption of the Company's products in the Southern market II MARKETING CHANNEL SYSTEM ANALYSIS Define service output and segmentation: Segment Bulk - Spatial Delivery / Assortment/ name/ breaking convenience waiting time Variety Customer service Information sharing descriptor Bulk “I want to buyers “I want to order “ I want the “ I can choose “I want not only “I would like to buy in bulk to online and the product I from a variety of to buy the know more serve my product will be ordered to be brands in terms of product, but also about the customers ” delivered to my delivered the weight, design, to have a great brand's LOW address ” same day or flavor and price of experience in promotions or MEDIUM as soon as each product to terms of sales new product possible” suit my own service and launches.” MEDIUM purposes.” promotions when HIGH HIGH buying.” HIGH Small “ I usually “ I want to be “I want the buyers buy a small able to easily purchase and saw the amount to use buy products at payment packaging and in my family the nearest process to be design, so I or give as a grocery store ” quick.” decided to buy” HIGH LOW gift” HIGH HIGH Marketing channel of Hải Hà: 2.1 Current distribution channel map of Hai Ha:  In Hanoi, Hai Ha Confectionery Joint Stock Company has warehouses of finished products and warehouses of production materials  The distribution channel structure of Hai Ha: “I accidentally  Direct channel: Manufacturers distribute directly to consumers through the company's store form (Kotobuki) or order directly through e-commerce platforms such as Tik Tok shop, official Shopee by Hai Ha  Tie channel: In this channel, the company will distribute products to big supermarkets such as Metro, bigC, G7, Supermarkets will directly place orders with the company through staff in charge of the area management company  Tie channel: This is the main channel used, the distribution of products is done through wholesalers to retailers and then to consumers Products are transported from the factory warehouse via trucks to dealers in the provinces after confirming the order from the market staff in charge 2.2 Channel functions Function Manufacturer Physical Possession - Hai Ha currently has Wholesaler Retailer End-users - Retailers when Customers buy Hai production factories ordering from Ha's products at retail located in Bac Ninh, wholesalers, the points on the market or Viet Tri and Nam shipping cost will order through the Dinh Products will be be paid by the official e-commerce transported to the wholesaler platform on Shopee, warehouse and - For large Tiktok shop delivered to supermarkets, distributors In when ordering addition, Hai Ha directly in Hai Ha, company will receive the shipping fee orders directly from will be calculated customers through the according to the company's official e- contract committed commerce platforms, by the two parties Shopee and Tiktok - In Hanoi area, the Shop company stipulates the payment rate for transportation at supermarkets: 2800 VND/carton by motorbike, 1000 VND/carton by the company's transport vehicle Ownership The product is purchased by the distributor and owns the goods at the warehouse Promotion - Hai Ha has printed - Major retailers -For customers who advertisements on the (supermarkets, Hai buy Hai Ha company's trucks, but Ha's Kotobuki confectionery with an the paint layers are old chain stores, ) invoice of over and peeling, no longer have preferential million VND, they will attracting attention, programs for receive a 2% discount even if they not customers on the on the total bill update the company's occasion of new products festivals, Tet - Hai Ha's product - Products will be incentives on e- displayed at the commerce platforms checkout counter for customers every time there is - Dealers who achieve a promotion quarterly sales will receive additional trade discounts from 0.3% 0.7% of sales - Hai Ha has preferential policies for retailers: Negotiation - Based on contract Retailers, if fully terms signed between implementing the manufacturers and standards on wholesalers and display output between wholesalers depending on each and retailers In the type of item, will contract between the be rewarded with a wholesaler and the certain level, such manufacturer that as: calculating stipulates the discount points, bonus rate of the money, discounts manufacturer to the on each box, gifts wholesaler, the gifts, If retailers wholesaler must fulfill not fulfill their the obligation to sell commitment to the product to satisfy display, the market the set amount staff who control the company's area - The contract is signed will, if discovered, for a period of year, cut all bonuses as so when the contract is promised in still valid, either party advance who breaks the contract will have to bear full responsibility and be fined Financing - Hai Ha helps agents - Wholesalers - When buying in bulk, by allowing them to pay for the there will be a discount pay late for a shipment display at from the retailer (pillow debt) retailers compared to buying - For agents that pay single or retail immediately to receive - Dealers and goods, in some cases supermarkets, the maximum debt and large-scale level does not exceed selling points are 120 million If the old supported with debt is more than 15 racks and days old and the agent shelves to has not paid, it is not display products, allowed to pick up the signs and goods banners of new products Risking - Whether the company - In the event of - Retailer if selling - Less risk because gives priority to the an error on the slowly, products in reaching the end-users agent returning the part of the stock if near term all have 3rd party goods, the company wholesaler, the can be exchanged intermediaries, which must determine if this wholesaler bears at the distributor are responsible e- is really a difficult the full cost of product to sell on the return shipping market If it's hard to sell on the market, allow them to return 100% of the original value - During transportation, loading and unloading if the goods are broken or damaged If it is the fault of the bad shipping, the company has to bear the whole cost, or if it is the fault of the distributors, they bear the loss caused by commerce platforms them Ordering - Wholesalers place Dealers order - Enter goods in Consumers buy goods orders via email, fax directly with the batches and notify online on Shopee, Tik with the Sales local market the quantity to be Tok Shop or wholesale Supervisor (SS) in staff Orders are imported before and retail points charge Purchase shipped to Retailers not orders are forwarded to distributors cost to order Sales Admin (SA) and Distribution Management System (DMS) - Or call the Company directly at: 043 621 0074 to order Payment - The company makes - The company Cash - No payment Allow customers to payments through makes payments fees pay by cash or banks through banks Payment fee according Payment fee Debit/Bank to bank policy according to Transfer by Credit bank policy Card Do not accept debt debit/credit card, bank - Agents pay immediately Payment fee upon receipt of according to the goods, in some bank's policy cases, the maximum debt level does not transfer, e-wallets… exceed 120 million Information - Information for Receive customer Customers respond Sharing retailers about feedback directly directly to sellers at promotions or from feedback retail outlets or through on Shopee, Lazada, Hai Ha's official - But still limited in Tiki, communication collecting customer channels such as and market HaiHaCo fanpage, information from Shopee e-commerce channel members platforms, Tiktok shop, when there is a problem 2.3 Efficiency template Importance Weights for Proportional Function Functions Performance of Channel Member Cost Benefit Final (%) potential weight Hai Ha Retailer End-user 50 30 20 Total (%) Physical possession 22 Low 18 100 Ownership 13 Medium 14 40 40 20 100 Promotion 15 High 20 60 30 10 100 Negotiation Medium 70 30 100 Financing 12 Medium 13 40 40 20 100 Risk 10 Medium 11 40 30 30 100 Ordering Low 25 60 15 100 Payment Low 35 40 25 100 Information High 10 30 40 30 100 100 N/A 100 N/A N/A N/A 100 N/A N/A N/A 45,7% 35.7% 18,6% 100% sharing Total Normative profit share 3.2.1 Identify channel gaps: Service gap: Segment Bulk Spatial Delivery/ Assortment/ Customer Informatio Major Channel breaking Convenience Waiting Variety Service n Sharing time Bulk MEDIUM LOW MEDIUM HIGH HIGH MEDIUM WHOLESALE Buyers SS = SD SS < SD SS = SD SS < SD SS < SD SS = SD RS Small HIGH HIGH HIGH HIGH Buyers SS = SD SS < SD SS = SD SS < SD Bulk- breaking: Currently, Hai Ha's products are sold in small units of bag/small box or in kilograms, in batches and cartons at retailers and the official e-commerce platform, creating favorable conditions for the purchase and sale of goods Buy according to the customer's large/small quantity Spatial convenience: Hai Ha is currently present on two e-commerce platforms, Shopee and Tiktok shop, to serve customers' online orders As well as the traditional distribution channel network at agents and retailers Hai Ha products also appear in modern channels such as large supermarket systems: Winmart, BigC, MMMarket, Coop mart, Lanchi, However, the product is still limited at other large e-commerce floors (Lazada, Tiki, ) and convenience stores (Circle K, Eleven, Ministop, ) The distribution system of wholesalers in RETAILERS the Central and the South is also not high In which, it is mainly concentrated in the Northern provinces (212 agents), the Central region (31 agents) and the South (27 agents) Therefore, customers in these two regions are restricted from making quick and convenient purchases because there will be few stores selling this product Delivery/ Waiting Time: When buying Hai Ha products on Shopee, they will be shipped in one to two days for customers in the HCM City or inner Hanoi area (Hai Ha has Shopee channels in Hanoi and Ho Chi Minh City) ) and three to five days for orders in other neighboring provinces Assortment/ Variety: Hai Ha is considered as one of the largest confectionery brands in Vietnam, therefore, Hai Ha has a wide variety of product lines such as: Cookies and Cracker, Moon cake, hard candies, soft candies, Fresh cakes and Tet jam, many different flavors such as Chip Chip marshmallows with traditional flavors, synthetic fruit flavors, However, at present, there are many other brands in the FMCG industry with fierce competition, quickly grasping customer tastes, so customers also have a variety of choices Customer service: Currently, the customer response rate on Hai Ha's e-commerce platform is quite high (95%) However, with the fierce competition of the FMCG industry, Hai Ha still does not have customer care policies 48% of FMCG brands participating in the survey (According to Research by Eventtrack), confirm that Experiential Marketing activities aimed at personalizing customer experience bring high ROI, at 3: to 5:1 Currently, the stores that sell Hai Ha products have not had a breakthrough in maximizing the customer experience Usually still in brick-and-mortar stores, buyers can change their mind quickly to another brand Information Sharing: On the fanpage of Hai Ha Company, we always update information about new products, promotions and introduce the official channel selling products, namely Shopee and Tiktok shop However, the amount of interaction in posts and views and followers on Tiktok is not high This proves that the advertising for the brand has many shortcomings and is not effective for customers to really pay attention to Hai Ha's information from which it is difficult to grasp product information Advertising in the media is still weak, in providing fake information to consumers When there are new product launches, Hai Ha has not yet had PGs go to supermarkets/retailers to introduce products Cost gaps Channel [Targeting Which Segment(s) ?] Channel Member and Functions Performed Manufactur ers → wholesalers → retailers Manufacture rs, Wholesalers , Retailers Manufactur ers → Retailers Wholesalers , Retailers, Environmental/Manag erial Bounds Cost Gaps [Affecting Which Function(s )?] Planned Techniques for Closing Gaps Do/Did Actions Create Other Gaps? Not screening orders in line with market needs The employees not collect market information and only focus on short-term sales goals Ordering: Can't control the order quantity of channel members manufacture' Financin s system management g [Điều khoản điều kiện bán hàng] Limited perspective on market demand Talk to Information agents, sharing retailers to collect information - The layers of Manufactur Manufacture advertising paint printed er → rs, Retailers, on the truck are old and Retailers → end-users peeled, no longer end-users attracting attention, even if they not update the company's new products Manufactur ers -> Wholesalers -> Retailers Manufacture rs, Wholesalers , Retailers Because Hai Ha has only manufacturing factories in the North, the transportation and distribution of goods to the South and Central will cause inconvenience in the supply of goods and cost more Promotion (Advertisin g Media, Advertising Strategy) Physical Possession Promote communicati on on social networking platforms -It will cost more than current advertisi ng costs Building more warehouses in the South and Central regions -It will cost more to build a warehou se 3.2.2 Conclusion The distribution channel of HaiHa Confectionery Joint Stock Company is facing many distribution channel problems such as: Limitations on two-way information sharing: - Downstream members only receive information about promotions, discount policies, have not received in-depth information about the types of products currently distributed by Haihaco or discount policies when buying wholesale and retail - Train the skills of evaluating the market, building a more restrictive return policy of the salesperson - Upstream does not receive data, information about customer needs, tastes and markets from wholesalers and retailers That makes the large backlog in the market expensive to store The company's market staff system is also not strong and tight - Hai Ha accepts all orders requested by a junior member of the distribution channel and has no long-term plan for the market (partly due to lack of market information and lax stock management) ) - Channel members who want to contact for cooperation also not have a suitable system to answer the process clearly 2 Limited distribution channel network - Currently, Hai Ha has only accounting branches in Ho Chi Minh City and Da Nang, which makes the demand for goods not met enough (for example, during holidays, Tet, ) the company has to transport goods from manufacturers and warehouses in the North to the Central and the South The distribution channel system is far away, making the operation and management more difficult - Currently, the FMCG industry is being consumed strongly on e-commerce platforms after the Covid 19 epidemic However, HaiHa only officially has distribution channels at Shopee and Tiktok shop, which causes a gap with customer demand in non-central provinces (Delivery/ waiting time) - In addition, with the customer's Spatial convenience criterion, the coverage of products in convenience stores (GS25, Ministop, ) or grocery stores in the Central and Southern markets is not even high HaiHa products not appear Restrictions on promotion: - Hai Ha is still limited in promoting products in the media and on Shopee And besides, Hai Ha does not have an official sales channel on other major e-commerce platforms such as Lazada, Tiki, But the demand for online shopping is extremely high - Moreover, Hai Ha does not have a program to bring PG employees to supermarkets to promote products in the South Therefore, the coverage in the minds of customers is not high - Hai Ha's posts have extremely low interaction because there are no branded articles that attract customers, even though the main fanpage has extremely high followers and likes IV MAKE OR BUY DECISION - Hai Ha should combine Make and Buy However, to solidify the distribution channel system, Hai Ha should Make (60%) and Buy (40%) - Promotion: should hire a 3rd party, although it will be expensive in the beginning, the performance and brand coverage can be improved -> Buy - Information sharing: Issues of limited information sharing, not receiving the necessary support or not understanding the necessary import and sales process from Manufacturer itself, the lack of information by channel members needed to be solved by the upstream channel itself (Manufacturer) -> Make V STRATEGY Communication strategy: - For Tet holidays, Mid-Autumn Festival, Hai Ha should have promotion policies and need to promote the promotion of product information to customers (media communication, running Google Ads, Youtube Ads, reducing discounts) prices at retail outlets, buy in combos or give away moon lanterns to customers, ) - There should be fun, trendy articles to attract customers and customer interaction on Fanpage Moreover, Hai Ha should have PR articles written about her brand and products for customers to grasp - Need PG staff in big supermarkets to promote new products → Customers will have more choices and when promoted in supermarkets, they will be able to try the product and that is also a way to test the market school - Hai Ha should cooperate with the Agency to create a large media campaign to strengthen the company's position in the market - Paint and repair the company's transport vehicles and decorate more Banners on the car to make an impression on customers who suddenly see it → Customers will remember the name Hai Ha if seen many times on the street - Associate with KOLs and KOCs to introduce products and increase brand recognition Information sharing strategy: - Hai Ha needs a team to manage information between channel members: update the information of the market staff in each region on the official website so that members can easily contact when there is a problem or want to register as a distribution member - Build data and manage inventory and order quantities of agents and retailers on a common system - Use analytical tools to understand customer needs and tastes as well as competitor information from channel members From there, make a product strategy suitable for each region's purchasing volume - Building relationships between distributors by supporting events and policies In case the quantity of goods at this distributor is lacking or in excess, you can contact the nearest distributor to avoid returning the goods to the manufacturer and saving storage costs - Train and improve the quality of sales staff 3 Distribution channel expansion strategy: - Since this is an FMCG industry, product coverage is always an important criterion Hai Ha can expand more warehouses in the central and southern provinces to meet the demand for goods as well as manage the quantity of each region more easily Bringing products into convenience stores, supermarkets (GS25, Ministop, Circle K, ) and grocery stores Build more warehouses in the southern provinces to facilitate the supply of goods The offline channel will be the place to provide the most complete and satisfying experience for customers Focusing on strategies to increase customer experience, organizing sampling at local markets and supermarkets VI REFERENCE: https://www.careerlink.vn/cam-nang-viec-lam/kien-thuc-kinh-te/fmcg-la-gi-su-khac-bietgiua-fmcg-va-retail https://www.academia.edu/38001223/4_Ph%C3%A2n_t%C3%ADch_t%C3%ACnh_h% C3%ACnh_n%E1%BB%99i_b%E1%BB%99 https://www.pos365.vn/fmcg-la-gi-6178.html http://www.haihaco.com.vn/upload/file/nam-2022/bctn-2021/bao-cao-thuong-nienhaihaco-2021-signed.pdf https://www.zbook.vn/ebook/thuc-trang-quan-ly-kenh-phan-phoi-cong-ty-co-phan-banhkeo-hai-ha-18891/ https://haiha-kotobuki.com.vn/ ... end-users: Service output demand of end-users and segmentation Marketing channel of Hải Hà: 2.1 Current distribution channel diagram and channel members 2.2 Functions of channel members 2.3 Efficiency... HIGH Marketing channel of Hải Hà: 2.1 Current distribution channel map of Hai Ha:  In Hanoi, Hai Ha Confectionery Joint Stock Company has warehouses of finished products and warehouses of production... and an annual output of about 6000 tons In recent years, Hai Chau company has paid great attention to the issue of diversification and improvement of product quality The company has invested