Vietnamese Supplement Manufacturing Industry - The Effect Of No Marketing Activities In Giai Canh Pharma Company Limited.pdf

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH PHARMA COMP[.]

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY: THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH PHARMA COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year: 2017 – 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY: THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH PHARMA COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION SUPERVIOR: PhD LE THI THANH XUAN Ho Chi Minh City – Year: 2017 – 2018 Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page of 57 TABLE OF CONTENT EXECUTIVE SUMMARY CHAPTER 1.1 1.2 1.3 1.4 1.5 1.6 INTRODUCTION COMPANY BACKGROUND HISTORY TIMELINE SERVICES SLOGAN VISION – MISSION CHAPTER 2.1 2.2 2.3 SYMPTOM AND PROBLEMS PROBLEM FINDING PROCESS COMPANY’S SYMPTOMS PROBLEM IDENTIFICATION CHAPTER 3.1 3.2 3.3 3.2 3.3 3.4 3.5 BACKGROUND INFORMATION SITUATION ANALYSIS 10 INITIAL CAUSE – EFFECT MAP 10 LITERATURE REVIEW 15 THE UPDATED CAUSE – EFFECT MAP 18 DEFINITION OF CORE PROBLEM 23 THE EXISTENCE OF CORE PROBLEM 24 THE IMPORTANCE OF CORE PROBLEM 25 FINAL CAUSE – EFFECT MAP 27 CHAPTER POTENTIAL SOLUTION 30 4.1 MARKETING AND SALES PLAN SUMMARY 30 4.2 SITUATIONAL REVIEW 31 4.2.1 The market 31 4.2.2 User sign – up process 32 4.2.3 Competition section 32 4.3 STRATEGIC OPPORTUNITIES AND THREATS 33 4.4 GOALS 34 4.5 MARKETING AND SALES STRATEGY 34 4.5.1 Target market 34 4.5.2 Positioning 36 4.5.3 Product 36 4.5.4 Service 38 4.5.5 Price 38 4.5.6 User sign – up 39 4.5.7 Promotion and Advertising 40 4.5.8 Marketing Control 42 CHAPTER PROPOSED DATA AND RESOURCE PLAN .45 CONCLUSION 45 REFERENCE 46 APPENDIX 48 Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page of 57 EXECUTIVE SUMMARY This paper was delegated to examine why the sales volume of Giai Canh Pharma Company Limited has been too low in the first months of 2017 and to recommend ways of increasing the volume The paper draws attention to the fact that in the first months of 2017, there are many employees taking over 10 days off within a month The peak of this situation happened in July 2017 that there are employees left over 10 days and staying at home waiting for jobs when company still had to pay full salary for them This symptom happened from the beginning of 2017 until now Further investigations reveal that Giai Canh Pharma Company Limited which is beginning its supplement outsourcing service had no marketing department to the business developing job, no publicity about their new business and no advertising initiatives to promote the business At the beginning, this company was planned to be the main factory for GPharm Company to produce their product This background can stay the same and happens no change until the newest announcement from Ministry of Health that any supplement manufacturing companies which cannot meet the GMP standards will be obliged to shut down the operation at the end of 2018 This urgent situation together with the symptoms at Giai Canh Pharma Company promoted to this research paper Due to the finance limitation of Giai Canh Pharma Company and the urgency of GMP application, the saving cost and time solution is preferred The report evaluates this range and concludes that it would be ideal to have a marketing plan This plan will temporarily create a temporarily whole solution for causes investigated in problem finding process It is recommended that: • Target to the new borned or small – sized companies which want to create products and testing market with small quantity Companies which raises their own medicinal area are also preferred • Create a sales team to direct sales by recruiting temporarily from GPharm Company to immediately adopt to the job and save cost Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page of 57 • Do press release at the beginning and the end of 2018 with GMP archievement announcing purpose • Create a website to pay – per – click advertising on Google for introducing outsourcing service of Giai Canh Pharma Company Limited on the base of GPharm Company website to take advantage of their close relationship and cost saving priority The whole work will be shown in more details after this summary Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan CHAPTER 1.1 Page of 57 BACKGROUND INFORMATION Introduction Giai Canh Pharma Company Limited previously is a manufacturing factory of GPharm Company The company has split from GPharm Company and became a separately busisness organization from January 1st 2017 After split, the manufacturing performance of company continued going down and had to open the outsourcing service to improve the situation to quickly meet the GMP standards before due date or being closed However, the firm performance has nothing changed Therefore, there is a need of a research and investigating the problem behind the symptom to permanently improve the situation of the company 1.2 Company Background This paper is about the Giai Canh Pharma Company Limited, which is a manufacturer in supplement market However, to understand more about this company, the author will mention about the GPharm Company, the “older brother” of this company GPharm Company is formerly a family – business store named Vinh Xuan, which focuses mainly on orientally raw and dry medicine locating in District After over 35 years operating in a small family medicine store by his father, Mr D, the son of the business owner decided to establish an organization operating in Vietnamese pharmaceutical market, specialized in supplement from natural ingredients The company named Giai Canh was established in September 2005, located in District until now In years of operating, the company mainly sold medicated oil and supplement products which were outsourced by suppliers In 2010, the first manufacturing factory was set up at Binh Chanh with maximum capacity of 100 million capsules per year Mr N, the deputy manager working in GPharm Company from the beginning was assigned to become the manager of the factory This factory proved the hope of being actively independent in manufacturing ability and widely expand the business on Vietnamese supplement market Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page of 57 In November 2016, to manage the numbers of poor quality supplement products on the market, the Ministry of Health announced the decision of terminating operation of any supplement manufacturing organization which does not meet the Good Manufacturing Pratice This information will affect to thousands of companies that does not meet this standard After years of operation, in January 1st 2017, Mr D, the manager of GPharm Company decided to split the manufacturing factory from GPharm Company and formed an individually business organization named Giai Canh Pharma Company Limited This company will manufacture the products for GPharm Company together with doing outsourcing supplement products from natural ingredients for other customers to increase the outcome quantity to meet the most important standard of GMP certification, targeted manufacturing capabilities The urgency of meeting GMP standard in 2018 has led to this splitting initiative After split, Giai Canh Pharma Company Limited became an independent organization and an eligible legal entity to operate in Vietnamese supplement market Mr N, the previous manager of the factory became the manager of Giai Canh Pharma Company Limited and took responsibility of all aspects in this organization The company is also finance independent and not influenced by GPharm Company, which is under responsibility of the other boss However, this company is still under the same owner, Mr D He is both the owner of GPharm Company and the Giai Canh Pharma Company Limited Therefore, the relationship of companies is brothers under the same father At the beginning, Giai Canh Pharma Company Limited is in charge of manufacturing products for only GPharm Company to sell on Vietnamese market Howerver, the business result from GPharm company was not good and led to the manufacturing performance of Giai Canh Pharma Company Limited went down Furthermore, Ministry of Health will oblige all supplement manufacturing organization to apply and meet the GMP (Good Manufacturing Practises) standards to be still remained on the market After the tentative date in 2018, any companies not meet the GMP Standards will be shut down the operation With this urgent situation, Giai Canh Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page of 57 Pharma Company Limited decided to begin outsourcing service to utilize the unused capacity, improve the manufacturing performance and also expand its own business This service is aimed to entrepreneurs, SMEs in pharmaceutical market, companies which have own raw material zone and want to develop their own supplement products, with the latest technology and the highest quality Giai Canh Pharma Company Limited, has 23 employees with Manager, Deputy Managing Supervisor and 21 other employees, in which accountants and 19 common workers Mr N, the manager takes responsibility of all aspect in company The Deputy Managing Supervisor supports Manager to monitor the assembly and paperwork procedures accountants are in charge of doing accounting and general admin works The remaining 19 workers their jobs in each functional department of assembly The whole organization structure can be seen below: Figure 1: Giai Canh Pharma Company Limited organizational structure 1.3 History Timeline • 2005: GPharm Company was established and began operating business in pharmacy market in Ho Chi Minh city, specialized in oriental medicine and supplement from natural ingredients • 2010: The manufacturing factory is set up at Tan Kien, Binh Chanh, Ho Chi Minh city with maximum capacity of 100 million capsules per year • 2017: The manufacturing factory is split separately from GPharm Company and named Giai Canh Pharma Company Limited Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan 1.4 Page of 57 Services Giai Canh Pharma Company Limited specializes in manufacturing, outsourcing supplement products Its main customer is GPharm Company In addition, the company also outsourcing for organizations which have raw materials and want to their own products, entrepreneurs or SMEs in pharmaceutical market 1.5 Slogan “All for your health” 1.6 Vision – Mission To become the leading enterprise in manufacturing supplement products made of natural ingredients in Vietnam CHAPTER 2.1 SYMPTOM AND PROBLEMS Problem Finding Process At the beginning, the author tried to observe all the aspect of the company The company is specialized in manufacturing so this was the part that the author mostly checked The finding process began with the accidental detection about the workers at company had to take many days off showed in July salary form In July, there were employees had to take over 10 days off to wait for jobs The author checked other previous months and found that the same situation also happened from January to June, not only in July When checking again by asking informally with the manager, he said employees “had to wait for jobs due to lack of jobs to at the company”, as quoted from Interview detailed in Appendix There is no more order to manufacture, so he decided to let employees take days off but still paid full salary for them It happened from the beginning of January of 2017 until now The first symptoms found led the author to check the manufacturing performance of the company from the established date until now and find the core problems at the company at present The details about symptom will be shown after this part: Page of 57 Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan 2.2 Company’s Symptoms The table author shows under is the recording evidences about numbers of employees following the numbers of days off that they had to take due to lack of jobs to from January to July in 2017: Table 1: Recording numbers of employees taken days off in a month Unit: Employees day Under 10 days Over 10 days January 12 February 12 11 March 23 0 April 23 0 May 23 0 June 15 July 13 The table shows the numbers of employees had to take days off in each month The numbers of employees were recorded comparing with the numbers of days they had to leave The average number of working days at Giai Canh Pharma Company Limited is 26 However, the recording table shows that the number of employees takes over 10 days off are in January, June and employees in July That means there are from to employees just work half month when they are full – time employees Furthermore, there are also number of employees takes under 10 days off in January, February, June and July The point is Giai Canh Pharma Company Limited still had to pay full salary for employees due to the Vietnamese labor force laws This situation will cause a huge lost to company labor cost when the labor force using is not completely effective To make the symptom strongly clear and proved existence, the author quoted the manager words: “Company only had enough jobs for employees to under 20 days, the remaining days they had to be off to wait but company still pay full salary for them due to Vietnamese Labor Law” as quoted in Interview detailed in Appendix The question is “Which reasons led to this symptom?” 2.3 Problem identification From the quote from the manager of Giai Canh Pharma Company Limited above, the reason led to “Employees take many days off” symptom due to “lack of jobs to do” for the employees “Company only had enough jobs for employees to under 20 days, the remaining days they had to be off to wait but company still pay full salary for them Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 12 of 57 went to find the customers Manager answered that they depended on the sale team from GPharm Company to find the customer for them but “The number of outsourcing contracts was not many Sometimes we have, sometime we not” as quoted by manager from Interview It indicated “the lack of outsourcing orders to produce” situation at present time of the Giai Canh Pharma Company Limited after months of splitting and jumping outsourcing busisness - The manager shared: “When the sale team introduced us customers, we also did the consulting job, explained every procedure and stage for them But finally, there is no reply from them again” as quoted in Interview He explained: “We not know exactly the reason, maybe they just ask for quotation, they are preparing to start up the business so they want to find service suppliers or other objective problems from them” Furthermore, in Interview 3, he also said: “The outsourcing orders introduced were not much and mostly we not meet their requirement” Investigating deeply, the author accidentally asked the manager whether the limitation in manufacturing assembly or technology is the potential cause effecting to the reason that the company cannot meet customer’s requirement led to they have no reply He answered as quoted in Interview that “Yes, it could be We can not vary the product category so it is hard to find the customers Customers want to find a place that can provide all types of products so that they not need to find many places” However, he continued in Interview 3: “We has disadvantages in infrastructure about base ground and also finance resource So, we cannot invest spreadly like other big competitors Our disadvanctage is about making only types of products It is because of the company previous policy that just built the factory for its own business” - When the author asked manager whether he had any solution for increasing the outsourcing orders, he answered as quoted in Interview 3: “At present, we only depend on the sale team from GPharm Company to find customers for us instead of actively going to find customers by ourselves” because “The sale team from GPharm Company had a various relationship and market”, as quoted from Interview It indicated that there is “No marketing department” at Giai Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 13 of 57 Canh Pharma Company Limited This cause is proved by manager quote from Interview that “At present, we depend on the sale team from GPharm Company when we not have any one or a department in our company to find the customers” Furthermore, when author asked manager whether he did “No marketing activities” at present, he explain by giving more information “We not introduce the outsourcing service widely because we are practicing on doing this business” as quoted from Interview Also, the author asked manager whether it is hard to find the customer to outsourcing that we can meet their requirement and why they not marketing activities, he said: “It is easy but at this time we not have time to find customer”, “We not have enough time because we just begin so that the result is not positive”, and “Complicated procedures from the authorities also cause us much time to take care” as quoted from Interview These reasons are the prove for the existence of two causes “No advertising” and “No publicity” at Giai Canh Pharma Company Limited at present In summary, “No marketing department”, No advertising” and “No publicity” are causes led to “No marketing activities” and be the route to “Lack of outsourcing orders to produce” situation until now The whole pictures will be demonstrated as Initial Cause – Effect Map below: Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 14 of 57 Figure 3: Initial Cause – Effect Map Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 15 of 57 Following the company description, Giai Canh Pharma Company Limited mainly focuses on manufacturing In order to manufacture products and get jobs for employees to work, the company has to have orders, and orders can be classified as the sales of the company Therefore, the consequences of lacking orders to manufacture can be the same with low sales result of Giai Canh Pharma Therefore, the group of symptoms at the beginning from “Employees take many days off” to “Lack of orders to manufacture” can be classified as “Low sale” In next session, the author will related literature reviews that are as the theory framework linking with the “low sale” symptom of the company Then the author will find out the core problem using data collected from depth interviews with the manager of Giai Canh Pharma Company Limited 3.2 Literature Review Marketing activities in organization According to Janet Walsh 1, marketing activities is “A series of tools for promoting and informing users of resources and services through a mix of communication, distribution, public relations, advertising, and motivation” The importance of marketing to sales in an organization According to Madhani PM 2, “sales and marketing integration has a direct and significant impact on customers and the revenue-earning potential of the organization” Leventhal RC stated the importance of marketing efforts in organization by “increase your return-on-investment, allow for more successful innovation, lead to better branding efforts, increase the effectiveness of your promotional efforts and strengthen your web marketing efforts.” Moreover, Corstjens and Corstjens also concluded that “a lack of cooperation between sales and marketing has the potential to damage the overall success of the organisation” Le Meunier-FitzHugh and Piercy also gave additional confirmation that “collaboration between sales and marketing has a positive and significant impact on both market orientation and business performance” Therefore, “With sales and Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 16 of 57 marketing collaboration firms will outperform competiotion; create added value as well as customer satisfaction” as concluded by Madhani PM Furthermore, in 2011 research, Lyus D, Rogers B, Simms C proved that in small organization, high integration between sales and marketing, together with high market intelligence gathering and strategic reactivity will make companies grow better than large ones Therefore, a company needs marketing activities to grow sales Madhani PM concluded in his 2016 reaserch that Sales and marketing must work together in order to achieve organization goals as sales and marketing integration is increasingly recognized as a key driver for improving financial and operating performance The absence of cross-functional integration may result in promises made by the organization's marketing department that have not been coordinated with sales, marketing promotions that are not synchronized with sales delivery schedules, and failure to deliver product by a firm in a specific, requested format because it is not the most efficient way to so Without sales – marketing cross-functional collaboration, firms cannot be expected to respond optimally and promptly to customers' requirements As suggested in this paper, through an effective sales and marketing integration, firms could enhance overall efficiency by interlinking the sales and marketing operations, and at the same time meet the long-term strategic goals and maximize customer value Publicity and advertising: matter for sales There are elements of marketing activities that matter the most for sales: publicity and advertising according to 2014 study of Spotts H.E, Weinberger M.G, Weinberger M.F, They have also shown the relationship between publicity, advertising activity and corporate sales of a company, Spotts H.E., Weinberger M.G., Weinberger M.F proved that “Positive publicity is most important in distinguishing between firms with higher and lower sales” This term is especially for the new company on the market as proved by following quote from this study: The effects of negative publicity and advertising are dependent on a firm's existing reputation For companies with weaker reputations, positive publicity in tandem with business-toconsumer (B2C) advertising is most highly associated with higher company sales Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 17 of 57 Conversely, for firms with stronger existing reputations, advertising has a significantly diminished role; positive and even negative publicity are most crucial in distinguishing between companies with high and low sales Negative publicity can be harmful to these firms though if it is not balanced by more positive publicity It implies that with a company has new service on the market which is “weaker reputations” should more advertising and publicity to increase company sales From the research of Spotts H.E, Weinberger M.G, Weinberger M.F, 8, the authors want to imply that: This study focused on a set of durable goods and services companies to understand the relationship between different forms of marketing communication and corporate reputation to determine what matters most when looking at sales results Broadly, we found the strongest relationship between garnering a high volume of net positive publicity and sales While advertising made an important difference, its influence was slightly more contingent Firms with weaker reputations and higher sales advertise more and have a higher volume of positive publicity across a range of topics That is potentially good news for managers of firms who may wish to invest in PR activities and advertising to better manage the balance between positive and negative publicity and overcome a weak reputation Managers of firms with stronger existing corporate reputations cannot expect more B2B or B2C advertising spending alone to elevate sales For these stronger reputation firms, continuing to garner positive publicity and avoiding a disproportionate balance of negative publicity is particularly important It is possible to clearly differentiate between firms with higher and lower sales using publicity volume and advertising spending Positive publicity is more important than negative publicity volume and advertising spending (B2C and B2B) in differentiating between higher and lower sales groups Overall, the volume of positive and negative publicity and advertising spending (B2C and B2B) were higher in firms that achieved stronger sales The larger number of negative stories was offset by an even greater number of positive stories, suggesting that the balance between the two is important Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 18 of 57 For weaker reputation firms, B2C advertising spending was second in importance to positive publicity when distinguishing between lower and higher sales groups For stronger reputation firms, advertising had a less important role in distinguishing between saleslevels 3.3 The Updated Cause – Effect Map In this part, the author will conduct the verification which problem should be solved from the initial symptoms As can see in initial cause – effect map, there are big problems causing “Lack of orders to manufacture” • The problem about “Low orders from GPharm – the main customer”: It happened due to “the highly competitive market, GPharm Company cannot business well and so cannot cover our manufacturing ability” as quoted from Interview in Appendix Also, he said: “GPharm Company provides the best quality products, the market and customers still support us However, there are too many choices on the market” as quoted from Interview This reason is objective and depending too much on the market Moreover, “the competitors have an advantage about finance so they can invest huge money on advertising on television, which is GPharm Company disadvantage” as quoted from Interview is the objective reason from the GPharm Company, which is out of author’s scope of work Furthermore, mananer also said “With the small amount of product can make for GPharm Company – the main customer, we can not upgrade to meet GMP standard” as quoted from Interview With the urgency of upgrading to meet GMP standards in 2018, there is a need of immediate solution to increase “numbers of orders and numbers of products can be produced”, “Therefore, we need more customers and then can upgrade the assembly to higher capacity” as quoted from Interview Therefore, the author will not solve and eliminate the “Low orders from GPharm Company” • The problem about “Lack of outsourcing orders to produce” Facing the pressure of meeting GMP standard in 2018, the owner of GPharm Company splitted the factory out from GPharm Company to form Giai Canh Pharma Company Limited is to “allocate all priorities for production to upgrade to meet GMP standard in 2018” as quoted from Interview It led to the Giai Canh Pharma Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 19 of 57 Company Limited orientation is “upgrading the assembly to meet GMP standard and to meet that standard, we have to response enough numbers of orders and numbers of product can be produced Therefore, we need more customers, from then, invest new assembly with the same types of product can make but at a higher level” as quoted from Interview Moreover, the “low orders from GPharm Company” is expressed by “Previously, the orders from GPharm Company were over 10 orders per month Gradually, the orders decrease to or per month together with numbers of products were not much Even, there was no order at all within a month That is why we have to find customers to outsourcing”, as quoted from Interview The importance and orientation of outsourcing service in meeting GMP standard led to the “Lack of outsourcing orders to produce” will be chosen to solve There are sub-reasons led to “Lack of outsourcing orders to produce” are “No reply from customers” and “No marketing activities” o With the reason “No reply from customer”: As described in initial cause – effect map section, the manager of Giai Canh Pharma Company Limited said that “We not know the exact reason they not reply Maybe, they just ask for quotation, they are preparing to start up the business so they want to find service suppliers or other objective problems from them” as quoted in Interview These reasons may be “objective from the customers”, quoted from Interview Therefore, the information is not enough and clearly to solve Another reason for receiving “No reply from customers” is “Limitation in technology” as analysis above However, the causes of this reason due to “Finance Resource Disadvantage” and “Company Policy” proved by manager’s quote “We has disadvantages in infrastructure about base ground and also finance resource So, we cannot invest spreadly like other big competitors Our disadvanctage is about making only types of products It is because of the company previous policy that just built the factory for its own business” Moreover, in Interview 3, manager also confirmed that “Despite the disadvatages in types of products can make, we still not invest spreadly due to lack of finance, base ground and human resources”, “We will not invest to vary the types of product can make and focus all the priorities to two ones we Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 20 of 57 can the best For example, with filtered tea, we will the best quality product, the best package instead” Therefore, the “Limitation in technology” will not be solved by the author and also eliminate the “No reply from customer” problem due to cannot be solved o With the reason “No marketing activities” The first cause led to “No marketing activities” have been shown above are “No marketing department” due to the reason “We depend on GPharm Company to find customer for us when we not have some one or department to be in charge” as quoted from manager in Interview The other causes can be defined is “No advertising” and “No publicity” The reason led to these lacking initiatives at Giai Canh Pharma Company Limited can be explained that “We did not actively advertising at this time We just begin practicing to outsourcing Moreover, complicated procedures from the authorities also cause us too much time to take care and we cannot cover all these procedures” as quoted from Interview with the manager The consequence can be seen that there were only outsourcing orders from the beginning of 2017 until now and there is no successfully accepted order from GPharm sale team The potential of solving this problem can be shown through manager’s comment that “After practicing by doing these first orders, we will create a marketing department to find customer This department is no need to be so complicating, just go to find suitable customers that we need”, as quoted from Interview Moreover, he said: “Customers and us also want to know how and which products that the market is demanding From then, we can cooperate with the customers more effectively to produce the product that can meet the needs of market”, also quoted from Interview Manager also said: “First, GPharm Company cannot meet out output quantity to meet GMP standards led to we cannot solve the jobs for employees Second, facing the urgency of upgrading to meet GMP standard when the due date is coming, it is obliged to focus on pushing the manufacturing”, as quoted from Interview This comment from manager showed the importance and “No marketing activities” needs to be solved to help company have more customers to increase the output quantity Therefore, the author will choose to solve this problem Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 21 of 57 and “No marketing activities” is the core problem of the initial symptoms The update cause – effect map can be shown below: Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 22 of 57 Figure 4: Update Cause – Effect Map Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 23 of 57 Due to the due date of GMP is coming, the immediate solution can be created is an effectively temporary marketing plan to increase the numbers of orders to manufacture From then, the assembly can be upgrade to meet the standard as what manager said 3.2 Definition of core problem Karlícek and Drábik 9(p587) stated that: Marketing is a fundamental business function Companies of all sizes and sectors have to answer basic strategic marketing questions, such as “who is their ideal customer”, “what is the value they propose”, “how they ensure customers’ satisfaction” or “how they retain a competitive position” These marketing decisions are integral for every business model in a competitive market They represent a necessary condition for the company’s long-term performance Moreover, Curt Clinkinbeard 10 also indicated in his paper that “it is advantageous to implement a "customer driven" mentality instead of one that is primarily manufacturing driven A customer perspective leads to products and services that are more marketable and, ultimately, to greater manufacturing success.” They all proved the importance of marketing in an organization and organization needs marketing activities Marketing activities, as described by Janet Walsh 11(p10) that “A series of tools for promoting and informing users of resources and services through a mix of communication, distribution, and motivation.” About the significant of marketing in an organization, O'Sullivan D, Abela AV 12 ‘s research contributed strong evidences to prove that Where marketing is capable of providing meaningful performance measures, it commands significantly higher board level respect More compelling again is the strong impact that marketing has on the company's financial performance in companies that are successful in capturing marketing's contribution Furthermore, Lee W, Rhee S, Oh J 13(p119) also stated in their research about the linkage between marketing and manufacturing activities that: Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 24 of 57 To better match its manufacturing capabilities with the market demand, the current and the future as well, the manufacturing department requires market information about the everchanging customer needs and competing products The marketing department, on the other hand, requires information about manufacturing capabilities, both existing and planned, in order to identify a target market segment as well as develop a market offering or a set of feasible competitive priorities so as to outperform its competitors This simple fact immediately signifies that the close cross-functional coordination between the two departments will be one major key to success in manufacturing strategy and corporate strategy as well Tải FULL (59 trang): https://bit.ly/3JKThYs Dự phòng: fb.com/TaiHo123doc.net In addition, the outcome of Lee W, Rhee S, Oh J13(p131) research also proved that “manufacturing organizations can improve plant performance by instituting and implementing the practices of the three constructs” concluding manufacturing marketing integration (MMI) It partly showed the importance of manufacturing and marketing activities linkage can enhance the performance of manufacturing firms 3.3 The Existence of core problem To prove the existence of core problem “No marketing activities” for the initial symptoms, the author decided to take interview with the managers to find out if this problem is available at the company When the manager was asked about who found the outsourcing customer for the company, he said: “We mainly depended on the available relationship” When was asked that the company had no plan on focusing going to find outsourcing customer, he said: “Not yet, we have already had the sales team from GPharm Company to introduce for us depending on their availably widespread market” He also continued: “At present, we just depended on sales team from GPharm Company to find for us the outsourcing customers so we did not actively go to find customers or introduce publicly or advertising” To explain this action, he said: “We not introduce the outsourcing service widely because we are practicing on doing this business”, “At this time, we not have time to find customers we need but this searching section is easy, nothing is impossible and so hard Now, we depended on the sales team from GPharm Company to find us the outsourcing customer because they have already had the wide market and relationship so we just took the advantages If they successfully find us a customer, they will Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 25 of 57 introduce that customer to us” as quoted from Interview However, the result is not as the manager expected To prove that, the author asked the manager whether the result from sales team introducing outsourcing customer to the company was good, he said: “The number of orders is exactly not many, just sometimes we had, sometimes we not” The exact numbers of orders that the Giai Canh Pharma Company Limited has at present to outsourcing as recording by the author are only Therefore, with the information given from the manager, it can be seen that the existence of core problem “No marketing activities” is presently available at the Giai Canh Pharma Company Limited 3.4 Tải FULL (59 trang): https://bit.ly/3JKThYs Dự phòng: fb.com/TaiHo123doc.net The importance of core problem In theory aspect, the core problem “No marketing activities” is affecting negatively with the company are expressed through many research papers According to Madhani PM.2, “sales and marketing integration has a direct and significant impact on customers and the revenue-earning potential of the organization” Leventhal RC stated the importance of marketing efforts in organization by “increase your return-oninvestment, allow for more successful innovation, lead to better branding efforts, increase the effectiveness of your promotional efforts and strengthen your web marketing efforts” Madhani PM also concluded in his 2016 research that “Sales and marketing must work together in order to achieve organization goals as sales and marketing integration is increasingly recognized as a key driver for improving financial and operating performance The absence of cross-functional integration may result in promises made by the organization's marketing department that have not been coordinated with sales, marketing promotions that are not synchronized with sales delivery schedules, and failure to deliver product by a firm in a specific, requested format because it is not the most efficient way to so Without sales/marketing cross-functional collaboration, firms cannot be expected to respond optimally and promptly to customers' requirements In reality, with the situation of Giai Canh Pharma Company Limited, the “No marketing activities” core problem has affected negatively to the company by those ways: Nguyen Lo Minh Duc - Supervisor: PhD Le Thi Thanh Xuan Page 26 of 57 o Company continues to depend on “orders from GPharm Company” to manufacture When the sale result from GPharm Company is not good at present, the orders for Giai Canh Pharma Company Limited to for this “brother company” are still low and cannot “help us to cover the output of manufacturing and not have enough jobs for our employees to do” as quoted from Interview o Because of low orders from GPharm Company, Giai Canh Pharma has to outsourcing However, if Giai Canh Pharma Company Limited not focus on finding customers on their own, not solve the core problem of “No marketing activities”, Giai Canh Pharma will continue to depend on sales team from GPharm Company to find for them the outsourcing customers when the result of finding from sales team of GPharm Company is negative The proof is “The number of orders is exactly not many, just sometimes we had, sometimes we not” as quoted by manager from Interview The exact numbers of orders that the Giai Canh Pharma Company Limited has at present to outsourcing as recording by the author are only If this problem cannot be solved, the company is still “low sales”, lack of orders to manufacture and cannot have enough jobs for their employees to when still paying full salary to them, which is a huge waste to labor cost and production capacity of workers o The most important reason and the worst consequence if the core problem of “No marketing activities” cannot be solved is: Company cannot actively control the output of their manufacturing process The sale will continue to be low It will lead to Giai Canh Pharma Company Limited cannot cover their cost when doing the GMP As the manager said: “GMP standard basically requires an organization meet the high investment in assembly and highly productive output” as quoted from Interview However, “First, GPharm Company cannot meet out output quantity to meet GMP standards led to we cannot solve the jobs for employees Second, facing the urgency of upgrading to meet GMP standard when the due date is coming, it is obliged to focus on pushing the manufacturing”, and “With the small production capacity at present, we cannot 6672211 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY: THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH. .. from the beginning of 2017 until now Further investigations reveal that Giai Canh Pharma Company Limited which is beginning its supplement outsourcing service had no marketing department to the. .. concluding manufacturing marketing integration (MMI) It partly showed the importance of manufacturing and marketing activities linkage can enhance the performance of manufacturing firms 3.3 The