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Ho Chi Minh City University of Economics and Finance Faculty of Economics MIDTERM REPORT Customer Relationship Management Topic Analyze and design CRM of Vinamilk Lecturer N T N Dung Class A10E No Ful[.]
Ho Chi Minh City University of Economics and Finance Faculty of Economics MIDTERM REPORT Customer Relationship Management Topic: Analyze and design CRM of Vinamilk Lecturer: N.T.N.Dung Class: A10E No Full name Student ID Trần Phương Duy Trần Phan Trúc Quỳnh Nguyễn Ngọc Quỳnh Như Nguyễn Như Hoàng Long Cao Anh Tú 195013723 195013721 205045006 195023722 195013600 Tasks % contribution of the task to the overall task 100% 100% 100% 100% 100% Total: 100% h Evaluation of task results Contents About Vinamilk I Customers of Vinamilk Customers and customer classification Customer identification In order to identify customers of our company, the software system, in addition to collecting basic information about the customer, needs to collect the following data: Interaction with clients Serving the needs of customers 5 Criteria for selecting technology for Vinamilk's CRM a Customer classification b Information on customer requirements II Vinamilk's customer network management Relationship with suppliers III Customer retention and development in CRM Customer retention Strategy Customer Relationship Development Strategy Software application to support Vinamilk .6 IV Evaluate customer retention and development strategies Achievements Information is integrated through SAP CRM software Limited V Design new CRM for Vinamilk 1.Subscription Model .8 2.Subscription Model Works 3.Structure .9 4.Participation .9 5.Payment function .10 6.Contact the sponsorships 10 7.Cost and revenues 10 h About Vinamilk Vinamilk, formally the Vietnam Dairy Products Joint Stock Company (Vietnamese: Công ty Cổ phần Sữa Việt Nam) is the largest dairy company in Vietnam Based on the UNDP 2007 Top 200 largest firms in Vietnam report, it was also the 15th largest company in Vietnam and formerly the most valuable public company listed in Vietnam The company was established in 1976 as the state-owned Southern Coffee-Dairy Company, to nationalize and take over the operations of three previously private dairy factories in South Vietnam: Thống Nhất (belonging to a Chinese company), Trường Thọ (formerly owned by Friesland Foods, best known for its production of condensed milk that was widely distributed across the South) and Dielac (Nestlé) The main business activities of this company include processing, manufacturing and trading fresh milk, canned milk, powdered milk, nutritional powder, yogurt, condensed milk, soy milk, beverage and other products other dairy products Vinamilk's products are also exported to a number of countries such as Cambodia, the Philippines, Australia and some Middle Eastern countries Vinamilk Dairy Products Co., Ltd provides more than 250 different types of products in the following main industries: + Fresh milk brands: ADM GOLD, FLEX, Super SuSu + Yogurt brands: SuSu, Probi ProBeauty + Infant and adult milk powder: Dielac, Alpha, Pedia Grow Plus, Optimum Gold, Ridielac nutritional powder, diabetes specific Diecerna, SurePrevent, CanxiPro, Mama Gold + Condensed milk: South Star, Mr Shou + Cream and cheese: Subo yogurt cream, Delight cream, Twin Cows cream, Little cream, Little cream Oze, Night cheese + Soybean milk beverage: Vfresh juice, ice bottled water, GoldSoy soybean milk + Vinamilk powder: Ridielac Gold, Optimal Gold, etc h h I Customers of Vinamilk Customers and customer classification - Customers of Vinamilk company: Customers of Vinamilk company are a collection of individuals, organizations wishing to use products or distribute products of the company The bank's relationship with customers is a two-way relationship, creating conditions for each other to coexist and develop - Classification of customers of the company: including the following groups: + Customers are consumers of the company's products, have a need to use and want to satisfy their need + Customers are organizations: are distributors, wholesalers, retailers, agents of the company, using the company's products to the product redistribution function Customer identification In order to identify customers of our company, the software system, in addition to collecting basic information about the customer, needs to collect the following data: To be able to collect such information is also quite easy, you can take advantage of the past transaction information that the company has collected, in addition because the company has regularly organize direct contact with customers, organize conferences with customers, collect customer opinions, visit customers through polls Customer prospect data Is data not about customers' income but about the environment that exists around the customer, the company's face-to-face prospects and the position of other companies' products, the unique prospects of the industry Can earn by consulting experts, mass media 1.3 Distinguishing customers The most effective classification should be based on long-term business value, Vinamilk classifies institutional customers based on business value Business value will give us the answer which customer brings the most profit, average profit and least profit now and in the future, as well as the safety and risk that customers can bring Mathematical model of the benefits that customers bring to the company based on past and present transactions for each product type based on a formula Then Vinamilk company predicts customer needs by quantitative and qualitative methods Qualitative method: collecting opinions from managers, employees, customers, etc Quantitative method: based on the business value that customers bring, we can draw trend charts, trends that customers will consume in the future From there, the company will know which customers are potential customers and then have separate strategies for this customer group As for individual customers, according to the knowledge and information collected by the group, apart from the official website of the company, the company does not have any software to approach and collect information of customers This individual customer, while the individual customer is the customer who consumes the final product, and the needs of this customer need to be best understood h in order for the company to have responsive strategies to maintain customer loyalty client 1.4 Interaction with customers The principle of two-way information flow must be ensured in the one-to-one marketing philosophy It is the creation of a communication channel between the customer and the company Especially, for target customers, it is very necessary to regularly transmit information such as about new products and announcements There are many forms of interaction: face-to-face, telephone, mail, fax, Internet, coupons Rate each weight of the above forms of interaction by giving a score and having a separate coefficient for each form As such, each form of interaction has different pros and cons, and for the target customers, a combination of forms with a high average score can be used Forms with lower scores can be used to collect data from customers who are not among the target customers => Vinamilk often uses forms such as direct contact, phone, mail, fax to contact institutional customers As for individual customers, the company mainly relies on the Internet (ie the company's website) to interact with customers Interaction with clients The one-to-one marketing philosophy must include the principle of two-way information flow It is the establishment of a channel of communication between the customer and the company It is especially important for target customers to receive information on new products and announcements on a regular basis There are numerous ways to interact: face-to-face, telephone, mail, fax, Internet, and coupons Each weight of the above forms of interaction is rated with a score and a separate coefficient As a result, each type of interaction has advantages and disadvantages, and for the intended audience, a combination of forms with a high average score can be used Lower-scoring forms can be used to collect data from customers who are not target customers => Vinamilk frequently contacts institutional customers via direct contact, phone, mail, and fax In terms of individual customers, the company primarily interacts with them via the Internet (via the company's website) - Serving the needs of customers Vinamilk provides the market with a wide variety of products Building a brand with a foundation of sustainable development - quality - comprehensive Always satisfy and be responsible to customers by diversifying products and services, ensuring quality, food safety and hygiene at competitive prices competition, respect business ethics and obey the law Since its inception The company has built the widest distribution network in Vietnam and has leveraged to introduce new products such as juice, soy milk, bottled water and coffee to the market The company owns a large distribution network across the country, which is a favorable condition for Vinamilk to bring products to a large number of consumers The product is made from ingredients in accordance with HACCP standards on food safety and hygiene Vinamilk's mission is to constantly diversify product lines, expand distribution territories in order to maintain a sustainable leading position in the domestic market and maximize the benefits of the Company's shareholders Vinamilk wishes to become the most popular product h in all regions and territories Therefore, Vinamilk considers that quality and creativity are Vinamilk's companions Vinamilk considers customers as the center and is committed to meeting all needs of customers Criteria for selecting technology for Vinamilk's CRM The effectiveness of the CRM is also shown in the simplicity when customers can exchange information with the company in any way that customers like, at any time, through any communication channel , in any language Although customer requests may have to go through complicated internal channels to reach the right department in charge of that product or service, but through the CRM system, Customers will feel like they are communicating with a single entity and receive personalized care Criteria for selecting technology for Vinamilk's CRM include: a Customer classification Customer segmentation and analysis are critical Ssoft CRM allows you to categorize customers based on a variety of criteria, including ownership type, business type, business items, business size, region, and so on b Information about customer transactions Customers contact businesses on a daily basis, as salespeople and marketers Typically, these transactional details are only known to salespeople Ssoft CRM allows you to update and save all customer transaction information, such as the transaction date, transaction summary, transaction staff, transaction partners, and transaction classification (meeting customers, customers) Customers (visits, phone calls ), status (not done, completed, in progress ), transaction notes b Information on customer requirements CRM enables the updating and storing of information about customer product and service needs: what products and services customers require; what vendors' products and services are currently used and how Furthermore, Ssoft CRM allows you to track your customers' projects and purchase plans: what products and services are expected to be purchased; what the expected cost is; when will you buy II Vinamilk's customer network management Relationship with suppliers Vinamilk's primary objective is to establish long-term and sustainable development goals for significant strategic domestic and international suppliers in order to guarantee a steady supply of raw materials that are not only high quality but also high quality at a very affordable price As a result of the company's evaluation policy, Vinamilk has established long-term relationships with its suppliers Vinamilk provides financial assistance to farmers in order for them to purchase dairy cows and highquality milk Furthermore, the company enters into annual contracts with milk suppliers and currently purchases 40% raw milk from the manufacturer Vinamilk has strategically located production plants near dairy farms, allowing them to maintain and strengthen supplier relationships Simultaneously, select milk collection centers in the center to ensure fresh and high-quality milk Vinamilk also imports powdered milk from Australia and New Zealand to meet both quantity and quality requirements Vinamilk's major suppliers include Fonterra (SEA) Pte Ltd, Tetra Pak Indochina, Hoogwegt, and others All of these are global milk production and distribution conglomerates Relationship with investors h Vinamilk has established an IR (investor relations) department comprised of personnel with experience in both finance and public relations (PR) In order to meet the need for information that benefits both parties, IR will disclose business information to investors Because investors will bring the most profits, building trust in the investor world is critical Vinamilk's success, particularly in the field of securities, clearly demonstrates this Vinamilk is now not only one of Vietnam's leading dairy companies, but also a Vietnamese stock market behemoth Listening to investor feedback can help businesses better understand their customers' feelings Partnership Relationship Vinamilk's partners include all individuals and groups that affect the survival of the business such as: Customers, suppliers, investors, agents, wholesalers, retailers, competitors , government organizations, III Customer retention and development in CRM Customer retention Strategy a Purpose This strategy is used to maintain long-term customer relationships because they are the ones who help the business Vinamilk recognizes this and is constantly looking for new ways to satisfy customers With the slogan "Consumers are satisfied, Vinamilk is at ease" the development of this strategy has been accompanied b Strategy of company - “Người tiêu dùng hài lịng Vinamilk an tâm" Vinamilk always prioritizes product quality The executive boards have always determined that the raw materials used to make the finished product are the most important Vinamilk has since built a factory with high-quality management The company only purchases raw materials that meet quality testing standards, as well as nutritional ingredients, and then sells them on the market In order to accomplish this, the company will send product samples for testing The manufacturing process is also important in the strategy The company has used a "quality management system in accordance with international standard ISO 9001:2000" since 1999 Finally, in order to bring low-cost products to Vietnamese consumers, the company has cut costs as much as possible The company has a large distribution network across the country, which allows Vinamilk to easily bring products to a large number of consumers Customer Relationship Development Strategy a Purpose Increase the purchasing power of existing customers b Strategy of company Maintain relationships with existing customers through product, price, distribution, and promotion through appealing and appealing programs The policies listed below will help Vinamilk's customer development strategy: - Product strategy h The company has been developing the most extensive distribution network in Vietnam, allowing it to introduce and expand a diverse product portfolio that includes juice, soy milk, coffee, beer, and so on - Model, packaging Consumers today are very concerned with the appearance of the product Vinamilk is constantly changing its image in the eyes of customers in order to avoid falling behind For example, when the Tet holiday season arrives, Vinamilk does not hesitate to invest in new packaging, design, and printing to convey the message of spring to consumers - Vinamilk's product line Vinamilk offers over 200 dairy products as well as beer, coffee, juice, and other beverages Vinamilk has completely met the consumption needs of customers and contributed to the dispersion risk for the company - Enhance product quality Customers are becoming increasingly cautious and demanding of product quality As a result, Vinamilk is constantly innovating technology, improving management, and improving product quality Vinamilk currently has over 250 product categories, all of which are of high quality and have been tested by international organizations, so it easily attracts customers' attention Cooperation with the National Institute of Nutrition is said to be one of the influential strategies for improving product quality - Investigating new products Because consumer needs are constantly changing, Vinamilk must innovate in order to survive Vinamilk has recently introduced some very effective new products Weight loss milk, beer, and coffee moment are three of the products In short, Vinamilk's product strategies have been extremely successful The strategies proposed are based on the market's actual needs Vinamilk values customer trust, so they not only focus on product quality, but they are constantly on the lookout for new technologies and strict production control processes - Pricing policy With the current economic downturn, almost every commodity has seen a significant price increase However, Vinamilk believes that the price increase is not a good business strategy Vinamilk will hold out until it can't anymore before adjusting the price Vinamilk's price remains stable, and they are willing to reduce interest or compensate by trading many different product lines in order to share the burden of spending with consumers - Agency policy Vinamilk provides incentives to agents in order for them to become close friends and loyal to their products The co mpany's agent system is divided into two categories, the group of dairy producThe company's agent system is divided into two categories, the group of dairy products including condensed milk, powdered milk and the group of ice cream, yogurt and fresh milk products.ts including condensed milk, powdered milk and the group of ice cream, yogurt and fresh milk products The company advocates broad expansion and does not strictly limit the conditions of agents with the product group of ice cream, yogurt, fresh milk, etc Because these are products sold directly to consumers, competition is low, and they are not strategic products for the company, so as the port h expands its distribution system, the products become more popular Usually for agents, depending on the location and sales location, the company stipulates sales and rewards for agents quarterly and monthly Software application to support Vinamilk Vinamilk regards a modern IT system as an essential component of the company's long-term business strategy Previous production and distribution management systems were incapable of providing accurate and timely data for production, inventory management, and marketing To solve this problem, management has decided to use SAP CRM Vinamilk has more effectively managed product distribution channels thanks to an IT application Distribution system administration: The company currently has two distribution channels: + + + Traditional distribution channels (220 independent distributors and over 140,000 retail points) account for more than 80% of the company's output VNM has 14 product showrooms in major cities such as Hanoi, Da Nang, Ho Chi Minh City, and Can Tho to support its distribution network Modern channels of distribution (such as supermarket system, Metro ) Vinamilk's advantage stems from a network of invested dairy factories spread across the country With 1,400 firstlevel agents and a nationwide distribution network of 5,000 agents and 140,000 retail points selling Vinamilk's products, as well as other direct distribution channels such as schools and hospitals, supermarkets, and so on Vinamilk has been using the most common modern information technology applications to effectively manage distribution channels in the market, which is the integrated information management program Oracle E Business Suite 11i; Enterprise Resource Planning (ERP) system and application of Customer Relationship Management (SAP) solutions: + Oracle E Business Suite 1li system: Officially put into operation from - January 2007 This system connects to 13 locations including headquarters, factories and warehouses nationwide IT infrastructure has been synchronized, standardized and consolidated + Customer Relationship Management (SAP) solution implementation: The SAP CRM system enables Vinamilk's nationwide distribution network to connect to the center in both online and offline modes Vinamilk will benefit from centralized information in order to take timely actions and plan accurately The purpose of collecting and managing dealer sales information is to be able to respond quickly, resulting in higher levels of customer satisfaction Vinamilk's distribution information was primarily collected manually between the company and its agents prior to the implementation of the SAP CRM system Currently, at the main center, an information system for reporting and decision-making for the leadership (Business Intelligence-BI) is in place to manage sales distribution channels and promotional programs Distributors can use the SAP program to connect directly to the system via the Internet By optimizing processes and providing sales staff with all customer information, customers can exchange information with the company in any way they want, at any time, through any communication channel, in any language Very effective approach to Vinamilk's own customers, assisting the company in fully collecting information and customer needs from which it h + can make policies to build and develop a Vinamilk distribution network most appropriate Enterprise Resource Planning (ERP) system: is a tool that helps employees with their work by connecting Vinamilk's distribution network across the country to the center in both situations Situations can be online or offline Vinamilk will benefit from centralized information in order to take timely actions and plan accurately The purpose of collecting and managing dealer sales information is to be able to respond quickly, resulting in higher levels of customer satisfaction Using information shared throughout the system, this process has helped employees improve their capacity, professionalism, and ability to best capture market information Vinamilk also manages its policies throughout Promotions in the distribution system, price books Meanwhile, the primary goal of the company is the end user, who benefits from ever-improving service quality IV Evaluate customer retention and development strategies Achievements Vinamilk has grown to become the largest dairy company in Vietnam, accounting for about 35% of the overall market share Vinamilk's domestic sales continue to grow rapidly, with an average annual growth rate of 21.2% from 2020 to 2022 Vinamilk's profit margin in 2022 will increase by 18% compared to 2021 This number is partly due to their CRM system running very accurately and helping Vinamilk know what its customers need and provide them exactly From 2002 up to now, Vinamilk has invested in the IT system a total of million USD Thanks to extensive and deep investment, the company has obtained great solutions, including organizing the company's apparatus, improving knowledge for employees, and organizing a reasonable apparatus to respond in a timely manner user needs The management thus becomes centralized, transparent, legacy and timely A special feature of Vinamilk is that the company is applying international ERP solutions of Oracle, SAP and Microsoft at the same time Therefore, how to be able to master and integrate all three solutions is not simple The above systems have been selected by Vinamilk according to each specific requirement, thereby providing solutions to help solve business problems in the best way The requirement for the current IT system is to keep abreast of and solve business problems To operate the system, Vinamilk had to make efforts to research and learn from implementation partners and send employees to training centers of Oracle and SAP Information is integrated through SAP CRM software With the server system running SAP CRM software at the center, the database is centrally managed (Master Data), integrated according to the standard of daily data from the distributor, from the handheld PDA system, and mobile from the salesman The centralized information system reports on the status of inventory, goods, revenue, liabilities, etc of each distributor On that basis, the staff at the center can analyze the situation of goods consumption to give treatment directions, targets as well as plan the distribution of goods as accurately as possible Vinamilk also unified business processes with distributors according to systematic management requirements such as price management, promotions, distribution plans as well as business processes for sales staff using PDAs application support center (call center) supports systems deployed at distributors, ensuring problems are resolved in accordance with commitments with distributors h Limited Vinamilk has grown by double digits and increased market share over the last two years, solidifying its position in the dairy industry The unit has improved its reputation and consumer trust in quality across the country All thanks to the unwavering efforts of the entire apparatus, particularly the benefits of the company's customer management system Of course, there are many challenges and obstacles to overcome when implementing CRM into management: - The role of the leader, or CEO, is critical, requiring the ability and qualifications to transform a process and way of working from many years of tradition to modernity The time required to deploy the CRM solution at Vinamilk is also lengthy; more importantly, the cost of changing a system in such a large corporation is prohibitively expensive CRM is a business revolution, and employees must change their mindset in order to successfully implement it Vinamilk's success or failure in implementing CRM is dependent on the entire apparatus, so it requires a high level of unity, consensus, and unwavering efforts from all departments Choosing the right CRM supplier is also a significant challenge for the business Because there are currently many suppliers, each with unique strengths Furthermore, businesses must understand how to solve the problem of combining software in the most appropriate way V Design new CRM for Vinamilk 1.Subscription Model - Those are the Term Subscriptions It has the same optimization as other programs, often focusing on gifts and benefits for members Besides, this program will let customers buy your products under subscription packages In a subscription model, customers are charged on a recurring basis for a product or service They choose how long and how often they want to receive each offer, and most subscriptions provide the option to renew or cancel at any time Vinamilk's customers agree to pay for carton of milk over a period of time, and the business accommodates that offer as long as the customer completes their recurring payments When the contract expires, the customer has the option to renew or cancel their subscription 2.Subscription Model Works In a subscription model, customers are charged on a recurring basis for a product or service They choose how long and how often they want to receive each offer, and most subscriptions provide the option to renew or cancel at any time Vinamilk's customers agree to pay for carton of milk over a period of time, and the business accommodates that offer as long as the customer completes their recurring payments When the contract expires, the customer has the option to renew or cancel their subscription Subscription models are convenient for customers Customers can discover new products Subscriptions can attract more customers Subscriptions decrease customer acquisition costs Businesses build stronger relationships with their customers MORE DETAIL h Instead of selling milk cartons as a stand-alone product as a one-time purchase, Vinamilk offers a subscription service for weekly or monthly Milk delivery In this model, instead of asking customers to buy one at a time, Vinamilk provides monthly payments for an annual subscription for their monthly consumption If Vinamilk offers a monthly milk delivery service, instead of a one-time box purchase, Vinamilk offers its service as a 12-month service that includes 12 purchases This makes Vinamilk's revenue model more robust as it guarantees sales over a 12-month period instead of a single purchase This makes sales forecasting and business planning easier as Vinamilk can predict its sales further with greater accuracy For example: If the customer is a household with small children and needs nutritional supplements, the selling price at retail agents for carton of 100% 110ml vinamilk fresh milk is VND 260,000, meaning that family will consume amount of fresh milk total value 3,120,000 VND Then, customers will be able to register for a 1-year preferential package, 50% off compared to buying at the dealer on a monthly basis: 130,000 VND/month and 1,560,000/year (Soft reward) In addition, there will be a delivery service to customers and the source of goods is taken directly from Vinamilk's agents in each area And will apply to the remaining products, or customers can receive more incentives if they choose other products from Vinamilk with a discount of 10-15% directly at Vinamilk's retail agents And customers can cancel register anytime they want if they don’t feel it is necessary 3.Structure The easiest subscription business model to understand is that of a magazine company Instead of selling milk cartons as a stand-alone product as a one-time purchase, Vinamilk offers a subscription service for weekly or monthly Milk delivery In this model, instead of asking customers to buy one at a time, Vinamilk provides monthly payments for an annual subscription for their monthly consumption 4.Participation Subscription models are convenient for customers People are busy And, if they can get a product (that they like) delivered when they need it, with little to no effort on their part — sign them up Subscriptions save people from having to research new products and shop for them in stores, creating a more seamless customer experience Customers can discover new products Not only people save money from not having to travel to the store, but they also get to try new items that they may not have purchased on their own Subscriptions can attract more customers h Sometimes, the price tag on a product or service can be cost-prohibitive for a consumer Charging weekly, monthly, or yearly allows you to set the price at a more affordable point, and lets consumers budget it into their monthly bills Subscriptions decrease customer acquisition costs Convenient automated solution that gives customers a shopping experience that is both cost-effective and time-saving Thereby enhancing the experience value of the program, promoting the popularity and effective application of the loyalty program 5.Payment function In Online Payment function is applied in the most convenient way for customers Customers can pay directly onl through the company's online sales platforms such as website and app Or go to Vinamilk's retail agents to receive direct advice on choosing and paying for the right product package In Offline These are payment methods built on Vinamilk's existing platform, which are both convenient for customers and simple in application and implementation of the company's activities 6.Contact the sponsorships Delivery Enhance transportation and operations from available resources or external support from shipping and delivery companies For the purpose of enhancing the applicability, quickly and conveniently reaching customers To enhance their experience Distribution Regarding the source of goods, marketing and selling subscription packages can be deployed with retailers from large to small, private stores Marketing h In addition, it also strengthens marketing advertising to create community through large channels to promote the effectiveness of the program Businesses build stronger relationships with their customers Another benefit of working with the same customers is that you develop stronger relationships with them over time When your service team is always there providing excellent customer support, customers learn to trust your employees and they become accustomed to working with your brand 7.Cost and revenues The program is built on an existing foundation, so the problem of costing is almost negligible with Vinamilk's inherent resources and ecosystem *By selling products as long-term service packages, Vinamilk can increase the lifetime value of its customers At the same time, they encourage customers to use the service plan for many months by saying "save more" to customers Rather than engaging potential customers who don't know or trust your brand, subscription business models allow you to business with people who already This cuts down on marketing costs and allows you to focus more on customer referrals This word-of-mouth marketing is typically more effective and less expensive than promotional advertising For example: If the customer is a household with small children and needs nutritional supplements, the selling price at retail agents for carton of 100% 110ml vinamilk fresh milk is VND 260,000, meaning that family will consume amount of fresh milk total value 3,120,000 VND Then, customers will be able to register for a 1-year preferential package, 50% off compared to buying at the dealer on a monthly basis: 130,000 VND/month and 1,560,000/year In addition, there will be a delivery service to customers and the source of goods is taken directly from Vinamilk's agents in each area And will apply to the remaining products, or customers can receive more incentives if they choose other products from Vinamilk with a discount of 10-15% directly at Vinamilk's retail agents h