(Luận văn) enhancing the relationship between sales and marketing staffs a case of schneider electric vietnam

t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ng hi ep w n lo ad ju y th yi Pham Le Xuan Toan pl n ua al n va Enhancing the relationship between fu ll sales and marketing staffs: A case of oi m nh at Schneider Electric Vietnam z z k jm ht vb om l.c gm MASTER OF BUSINESS ADMINISTRATION n a Lu n va y te re th Ho Chi Minh City – Year 2019 t to UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ng hi ep w n lo ad ju y th yi Pham Le Xuan Toan pl n ua al n va Enhancing the relationship between fu ll sales and marketing staffs: A case of oi m nh at Schneider Electric Vietnam z z k jm ht vb om l.c gm MASTER OF BUSINESS ADMINISTRATION n a Lu n va y te re SUPERVISOR: ASSOC PROF DR NGUYEN THI MAI TRANG th Ho Chi Minh City – Year 2019 t to Contents ng EXECUTIVE SUMMARY hi ACKNOWLEDGEMENT .6 ep LIST OF TABLES LIST OF FIGURES .7 w Introduction n lo 1.1 Company background ad 1.2 Industry Business’s structure & mission y th Symptoms ju 2.1 Low Voltage VSD Product line (IDVSD) and Vietnam market yi 2.2 The low growth rate of IDVSD sales in 2018 pl al Problem analysis .8 ua 3.1 Problem identification n 3.1.1 Initial cause and effect map .8 va n 3.1.2 Potential problems ll fu 3.1.2.1 Lack of market intelligence information m 3.1.2.2 Inter-channel conflict .9 oi 3.1.2.3 Poor marketing communications 10 nh at 3.1.2.4 Poor relationship between salespeople of Industry Expert Distributor Sales Team and marketing people of Pre-Sales & Marketing Support Team 11 z z 3.1.3 Updated cause and affect map 12 ht vb 3.1.4 Updated possible problems 14 jm 3.1.4.1 Lack of market intelligence information 14 k 3.1.4.2 Inter-channel conflict 15 gm 3.1.4.3 Poor marketing communications 16 3.1.4.4 Poor relationship between salespeople and marketing people 17 l.c 3.2 Problem validation .18 om Main problem definition and consequences 20 a Lu 4.1 Main problem definition .20 n 4.2 Main problem consequences 20 5.2 Cause validation 24 th 5.1.3 Conflict of interest between sales & marketing function to support each other 23 y 5.1.2 Ineffective collaboration between sales & marketing to support customer 22 te re 5.1.1 Lack of discussion and sharing information between sales & marketing to support the business 21 n 5.1 Potential causes 21 va Cause analysis 21 Alternative solutions 25 t to 6.1 Alternative solution 1: Encouraging knowledge sharing between sales and marketing 25 ng hi 6.2 Alternative solution 2: Creating an interactive information exchange system between sales & marketing 27 ep w 6.3 Alternative solution 3: Re-training sales & marketing staffs to reduce competencies gap and redesigning job descriptions of sales & marketing and their KPIs to enhance high performance business culture 29 n lo 6.4 Solution justification 33 ad Change plan design 35 y th 7.1 Objectives .35 ju 7.2 Target outcomes 35 yi 7.3 Action plan implementation 36 pl Conclusion 38 al ua Supporting information 39 n 9.1 Methodology 39 n va 9.2 Interview guide 39 fu 9.3 Transcript .41 ll 9.3.1 In-depth interview the first group 41 m oi 9.3.1.1 Interview 1.1 41 nh 9.3.1.2 Interview 1.2 50 at 9.3.2 In-depth interview the second group 54 z z 9.3.2.1 Interview 2.1 54 ht vb 9.3.2.2 Interview 2.2 59 jm 9.3.3 In-depth interview the third group 62 k 9.3.3.1 Interview 3.1 62 gm 9.3.3.2 Interview 3.2 67 9.4 Qualitative research findings 71 l.c References .74 om n a Lu n va y te re th t to EXECUTIVE SUMMARY ng The purpose of this thesis is to explore the causes of poor relationship between sales hi and marketing staffs of Industry Business team of Schneider Electric Vietnam that lead ep to the low sales growth rate of its main product, Low Voltage Variable Speed Drives w (IDVSD), via its main distribution channel, Industry Expert Distributor (IED) n lo Channel, and that then consequence on the low performance of the business team in ad 2018 y th ju The findings of this study reveal that ineffective collaboration between the Product yi Manager of IDVSD (aka the marketing people) and the Account Manager of the IED pl al channel (aka the salespeople) tend to play a significant role that lead to their poor n ua relationship in this case The findings are discussed in detail in the research along with va some recommendations for the Industry Business and the Management Board of n Schneider Electric Vietnam to enhance this relationship and improving the business fu ll performance in both short-term and long-term vision oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to ACKNOWLEDGEMENT ng I would like to acknowledge all who supported me during my studies at International hi School of Business –University of Economics Ho Chi Minh City (ISB), without whom ep I wouldn’t be where I am today in finishing my Master of Business Administration w journey n lo I would like to give my great appreciation to my Supervisor, Assoc Prof Dr Nguyen ad Thi Mai Trang, who has supported me during the time doing this thesis Without her y th ju continuously sympathy, guidance and support, my thesis cannot be completed yi promptly on schedule pl ua al I also would like to show may gratitude to my colleagues at work, my partner’s n customers and my classmates at ISB for their feedback and contribution for this thesis ll fu support and encouragement n va I also send my sincere thankfulness to my parents and especially to my wife for their oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to LIST OF TABLES ng Table Industrial automation and drives in Vietnam – Market shared and CAGRs hi analysis 2018 ep Industry Business - Sales growth rate by product lines 2017 – 2018 Table Costs for alternative solution w Table Table Costs for alternative solution – Action Table Costs for alternative solution – Action Table Table Action plan lo Costs for alternative solution ju n Table ad y th yi Costs for best solution pl n ua al LIST OF FIGURES Industry Business’s products and solutions in Vietnam by product lines Figure Industry Business’s Organization Chart 2018 Figure Industry Business - Sales contribution (%) by product line 2018 Figure Industry Business - Sales of Low Voltage VSD by channel 2017 – 2018 Figure Primary Cause-and-Effect tree n va Figure ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th t to Introduction ng 1.1 Company background hi Schneider Electric (SE) is the global specialist in energy management and automation ep With revenues of around €25 billion in fiscal year 2018, its 170,000 employees serve w customers in over 100 countries, help the customers to manage their energy and n lo process in ways that are safe, reliable, efficient, productive and green From the ad simplest of switches to complex operational systems, their technology, software and y th ju services improve the way their customers manage and automate their operation SE yi offers integrated solutions across multiple market segments in Non-residential & pl Residential Building, Industrial & Machines Manufacturers, Utilities & Infrastructure al n ua and Data Centers & Networks Its connected technologies reshape industries, n va transform cities and enrich lives (1) ll fu SE sells products and solutions through main Business Units in Vietnam (2): Building & Partner Business, provided Low Voltage products, systems and oi m - z IT (Information Technology) Business, provided Critical Power products and z - at Automation nh solutions, is ranking number one Worldwide in Low Voltage and Building vb solutions, is ranking number one Worldwide in Critical Power and Cooling ht Industry Business, provided industrial automation & drives products and jm - k solutions, is ranking number two Worldwide in industrial automation and Energy Business, provided Medium Voltage products and solutions, is raking number one Worldwide in Grid Automation and Medium Voltage om l.c - gm control a Lu SE has been operating in Vietnam since the 1990s, starting with the Vietnam’s 500 kV n th partners in Vietnam (2) y company employs more than 1000 employees and works closely with more than 500 te re in Dong Nai Province and offices in Ho Chi Minh City, Da Nang and Ha Noi The n representative office in Ho Chi Minh City in 1994 Today SE Vietnam has factories va North – South Transmission Project in 1991 – 1993 and then opened its first t to After 20 years doing business in Vietnam, SE has achieved its remarkable ng performance record in 2017 with double-digits growth of all its business units in the hi country and become the top growing entity in the entire region (Asia-Pacific & Japan) ep (3) w 1.2 Industry Business’s structure & mission n lo Vietnam’s industrial automation and drives is an attractive market The market’s ad revenue was 91 million € in 2017 and the compound annual growth rate (CAGR) was y th ju 8% year on year In recent year, as Table below, SE’s products and solutions in this yi market have been accounted for just 5% market share with the CAGR is 12% in recent pl al year The main competitors of SE in the market are ABB, Siemens, and Rockwell n ua Their market shares were 12%, 9%, and 4% consecutively And their CAGRs were Market Share (%) CAGR (%) 9% 3% 12% 4% 15% 5% at z Rockwell Automation 9% nh Schneider Electric 12% oi Siemens AG m ABB ll fu Company n va 9%, 3% and 15% consecutively, as showed in Table below: z ht vb Table Industrial automation and drives in Vietnam – Market shared and CAGRs analysis 2018 (Source: SE’s internal report 2019) k jm Via Industry Business, Schneider Electric Vietnam offers a wide range of industrial gm automation and drives products and solutions, as detail in Figure below, for the automation and control of machines, manufacturing plants and industrial sites in l.c om Vietnam It includes hardware, such as motion controllers (IDMOT), low-voltage variable speed drives (IDVSD), human-machines interface (IDHMI) operator panels, th growth rate is normally 25-30% year on year (Source: SE’s internal report 2019) y The product sales have accounted for more than 60% of business revenue with the te re Low Voltage VSD (IDVSD) is the main product line of Industry Business in Vietnam n management and supervisory control systems (2) va devices (IDSIG) and discrete sensors (IDSEN), as well as software for operations n a Lu programable logic controllers (IDPAC and IDSAF), push buttons and signaling t to IDVSD – Low Voltage Variable Speed Drive ng hi IDPAC – Process Automation Control IDSAF – OEM Safety & Controller IDHMI – Human Machine Interface ep w n lo ad ju y th IDSIG – Control & Signaling IDMOT – Motion Control yi IDSEN – Sensors pl n ua al n va ll fu oi m Figure Industry Business products and solutions in Vietnam by product lines (Sources: SE’s Company Profile 2018) nh at In 2018 Industry Business in Vietnam was structured, as Figure below, into three z sales teams (Industry Expert Distributor Sales Team, OEM & Medium Distributor z vb Sales Team, and System Integrator & End-User Sales Team) and one Pre-sales & jm ht Marketing Support Team that help to support its five main customer types (aka Sales k Channel) in Vietnam market that are (1) Industry Expert Distributor customers; (2) om l.c (4) System Integrator customers; and (5) End-User customers gm Original Machine Manufacturer (OEM) customers; (3) Medium Distributor customers; Industry Expert Distributor (IED) channel is the main transactional sales channel of a Lu Industry Business in Vietnam This channel contributes to around 60% of the business n th Vietnam market y Manager that take care of around 16 official partners for doing the business in overall te re Sales Team that currently have salespeople (aka Account Manager) and Sales n Internal report 2019) The IED channel is managed by the Industry Expert Distributor va revenue with the sales growth rate normally 15-20% year on year (Source: SE’s 61 A-4: Better price! t to ng Q-4.1: What would you to have better price support from marketing team? hi ep A-4.1: I need to provide the proof for the discount request And the best proof is the loss of that project or purchase order if the price is not good! w n Q-4.2: From your feedback, can I assume that marketing team is not always support you fully due to lo ad they need more information from you than what you have to that support? y th A-4.2: I think because the decision is not only from our marketing team, maybe from sales ju manager, sales director, etc., someone want to support, someone want to keep the margin, etc., yi pl It turn out the support result is in the middle point of what I want and their KPIs, if my ua al customer can accept that point, it is ok, if not I find another way to support them, etc., n Q-4.3: Do you think your experience in current decision marketing process help you to find the best n va internal support personally? fu ll A-4.3: Yes, so I will raise the request step by step to get the best support point from them! oi m Q-4.4: Do you think the reason of this situation is about some current problem between sales and nh marketing in sharing information to support each other? Can you define what is the current problem? at z z A-4.4: I know there are some difficulties, but I don’t define I try to solve it by myself if any, solved! jm ht vb and raise the support to my sales manager if the difficulty need to be due with marketing to be k Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which gm factors you think that are the key for your success in selling more and more Low Voltage om l.c VSD in Vietnam? A-5: I think currently our distributor compete with competitor’s distributor the most, in some n va Q-5.1: What should we to control the competition among our distributor? Can you suggest? n a Lu case there are tight competition among our distributors! rule? Can you suggest? th Q-5.2: If we have the selling price control policy, how can we control our distributor following our y them! te re A-5.1: We should control the selling price among them to make the fair competition among 62 A-5.2: I think we should define the rule and apply it first, because it’s a good policy to make a t to fair competition among our distributors, when we apply it if there is any problem we will ng solve it or find a practical solution for it then hi ep Q-5.3: Come back to the key point that help you selling more VSD Let’s image, if our price is still higher than our competitor 3-5%, but we cannot discount anymore to close the deal What should you w n to influence your customer to buy from you instead of competitor? lo ad A-5.3: I have to use my selling technic, I have to define some other attractive offer beside the y th price to give the customer in exchange like extended the warranty time, attractive payment ju term, etc., for these offers I must influence other internal department to support me first, such yi as logistics, finance, etc., but It’s difficult to change these terms! pl al ua Q-6: What you need from your colleague (sales, pre-sales/ after sales support, your manager, n etc.,) or your customer to help you sell more VSD in Vietnam market? va n A-6: I need more update information from marketing about product and market to support my fu ll customer better, currently I have always been asked to provide the information back to information than sales to support us! oi m marketing, so I just shared what I have But in my opinion, marketing should have more at nh Q-6.1: How you evaluate the current situation of sharing information from marketing to sales? z z vb A-6.1: Not much, only sales sharing back to marketing! I think before sharing market just asked sales for these information! k jm ht information to sales, marketing should find the information themselves first, currently they’ve gm Q-6.2: Do you have anything else related to this topic that you would like to discuss further with me? th Expert Distributor Partners of Schneider Electric Vietnam) y  Interviewee’s title: Sales Director – Thien Son Technology JSC., (Industry te re  Interviewee: Mr Tran Xuong Vinh (A) n  Interviewer: Pham Le Xuan Toan (Q) va 9.3.3.1 Interview 3.1 n a Lu 9.3.3 In-depth interview the third group om Q: Thank you very much for your sharing l.c A-6.2: Should we go out for a drink now? 63 Q-1: Could you please introduce about yourself and your experience about SE’s Low Voltage t to VSD? ng hi A-1: My name Tran Xuong Vinh, I am Sales Director of Thien Son Technology JSC., I have ep work with SE and SE’s VSD product more than 10 years We mainly focus on distribute SE’s VSD (Optimum), sometimes we have to sell SIEMENS or ABB but depend on customer w n request only and just some small amount, not much Today we cannot sell much SE’s VSD lo (Optimum), as you know, because currently the Optimum VSD price is higher than your ad ATV610 (the Medium range) About the market share, the ATV71 price is very high, below y th its we have ATV930/ ATV630 range but the price also higher than ATV610 range The same ju product line (IDVSD), the same brand name (SE) but the price gap is so big between yi pl Optimum and Medium so that it’s difficult for distributor like us, who focus on Optimum al product For VSD in Vietnam market today, for pump & fan application, if customer use n ua ATV610 with level of power higher than ATV630 range, the price is also better, why they va choose the ATV630 one? They are all SE’s product! And because ATV610 have a good price n so that the Medium distributor can stock a lot compare with us, we’re dared to stock ATV71 ll fu or ATV630, and it’s turn out that we cannot customer need on delivery time! We’ve just keep oi m a very little stock for the Optimum VSD by following some current promotion program nh Q-2: Could you please share with me about Low Voltage Variable Speed Drive (VSD) market in at Vietnam? And what would you to sell more Low Voltage VSD in the market now? z z A-2: Actually, in my opinion, for VSD in Vietnam today INVT is sometimes the best option vb for customer, INVT offer very good price and they have a very good market expansion plan, I ht jm don’t know is there any change in customer mindset to use Medium and Minimum product or k not, but what I can observe is that the distributor of INVT have stock a lot and they conquest a gm lot big customer based on their stock capability, their very low price offers, etc., and also their warranty policy also good! They willing to offer to change the new ones for any problem l.c all their best to serve their customer n a Lu Q-2.1: What are the equivalent ranges from SE to compete with INVT? om product immediately, as you know! And also, because they’ve just focus on VSD so they y te re VSD for lift, with separate option module for customer to choose to meet their specific need! n much in detail but I think their product can meet customer need As I know they also have va A-2.1: INVT have a lot of range, can use for normal or heavy-duty load I don’t discover as th Q-2.2: Do INVT categorize VSD by application? 64 A-2.2: Yes, categorize by application, by normal load or heavy load, etc., but they reduce the t to function and make it as option so that they can optimize the VSD price Customer will choose ng additional option based on their true need! hi ep Q-2.3: Do you think ATV610/ ATV310 can compete with these competitors? w A-2.3: Cannot compete with INVT about price but can compete with LS n lo Q-2.4: What are the SE’s VSD range that Thien Son selling most today? ad y th A-2.4: ATV312, ATV32, etc., and today is ATV320 About ATV71/ ATV930 just sometimes! ju Q-2.5: And how about the power range, which is the VSD’s power range you selling most today? yi ua al offer pl A-2.5: Below 15kW for ATV320 And from and above 22kW we have to use ATV610 to n Q-2.6: In your opinion, what should you and Thien Son to sell more VSD? va n A-2.6: Today it’s difficult I think we can sell ATV610 but we cannot sign the distribution ll fu contract for Medium product like Hop Long or Truong An, as I know they have stock a lot, so oi m that I cannot compete with them about price for Medium product About Optimum product, it’s still difficult to sell, because it’s just meet the need of the big factory, and there are a lot nh competition for these projects, maybe these factory is our traditional customer but to compete at z with ABB or SIEMENS for these project is not easy! So currently, for transparency, I don’t z have any idea to sell the Optimum VSD like ATV71, ATV930, ATV630 in the market! This is Q-2.7: Do you have any plan to sell more VSD below 15kW? k jm ht vb my truly sharing gm A-2.7: To sell more we have to stock more But it depends on the market need, if we stock but we cannot sell it’ll be our problem because today there are a lot of distributor like us in the l.c market, etc., There are some problem about SE’s VSD that is the product life cycle in Vietnam om is too short, maybe when you bring the product to Vietnam to commercialize it just can sell for special price case by case to survive instead of stocking But if we want to develop more th about price, and everyone want the lowest price, but if just price it is very normal, we can ask y support distributor depend on level of the distributor’s commitment Currently, for policy it all te re A-3: I know every supplier like SE have their own strategies, and they are all willing to n customer? va Q-3: In your opinion, how you think about SE’s current policies for Specialist Distributor n a Lu for some more year etc., it made us difficult in communicate with the customer etc., 65 we have to had a plan or strategy to go together with SE that is more cooperate for market t to expansion, and stock more to serve that market and optimize the stock based on our finance ng capability and also warranty policy for these product hi ep Q-3.1: For current commercial policy of SE, can you follow all the scheme? w A-3.1: Currently we are mainly focus on VSD, we also can sell PLC and HMI more but there n are some project partner of SE also can sell these like distributor so it’s still difficult for us to lo ad buy all industry products following the commercial policy of distributor It’s the same with y th other product like push buttons and pilot lights product, we cannot compete with your retail ju channel So we need more support from SE for control and support us fairly not only for VSD yi product but also for all Industry product! pl al Q-3.2: Let’s me clarify one point, as you mention above, one of the difficulty that effect you to make n ua the stocking decision is the warranty period of the VSD product? va A-3.2: Yes, we have to consider the warranty period of VSD to stock, because we have to n consider the risk of VSD’s slow moving items otherwise our business will be in trouble if fu ll there is any problem with these product, because we cannot get support from SE after the oi m warranty period, but we have to support our customer ourselves then at nh Q-3.3: How you think about the BINGO program in current commercial policy? z A-3.3: I think it is very attractive program, but we have to consider a lot between stocking z more industry product to achieve BINGO that result in very attractive bonus for IDVSD with vb k gm Q-3.4: How you think about some recently promotion program? jm without customer order ht the risk of selling out that slow moving other industry product if we want to keep stock A-3.4: In my opinion, the promotion program is not reasonable! But I think it is about your l.c om strategy or something like this, because for the same product range, for example the promotion program in Q2 is better than the same one in Q1, it not good if we try to keep stock in Q1 and a Lu in Q2 we cannot sell out due to better price offer from other distributor due to they join the Q2 n promotion program! It’s not fair for us Maybe SE should provide the same promotion scheme distributor, so all try to offer the best price for the customer to sell out their current stock! I th The offer price is very fluctuating, and also SE don’t have any selling price control among y question why they have to buy the higher price from us compare with other SE’s distributors? te re the price gap among distributor not much in the same period, otherwise the end customer will n stock in the previous promotion program! It better for us and also better for the market due to va for the same product range, or just next better promotion after we can sell out all we have 66 hope that in the future there are some better change to support us compete fairly among the t to same distributor of SE ng hi Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which ep factors you think that are the key for your success in selling more and more Low Voltage VSD in Vietnam? w n lo A-5: The competition is very aggressive, I’ve just said about the competition among SE’s ad distributor only But I don’t want to tell you in detail who what, because maybe you can ju y th know! yi Q-5.1: Don’t worry! I need your sharing… pl ua al A-5.1: Sorry I cannot share in detail But I can tell you a fact that, today if you search for SE product online you will easily get some advertise about the very low selling price of SE’s n va VSD online, via Facebook or some automation forum, you can find out who behind these n advertise, and belong to which distributor It make us very difficult to sell SE to get profit ll fu oi m Q-5.2: How you think about current competition with SE’s competitor distributor? at price and very best after-sales support, etc., nh A-5.2: As I share with you before, today INVT is a very dangerous competitor with very low z z Q-5.3: Do you see any change in the market that customer consider to change VSD from SE, ABB or jm ht vb SIEMENS to INVT? A-5.3: I see a lot But they’re not change all immediately, for some urgent case they change, k product and they will change more and more! l.c gm or for some normal application they change And day by day, they observe the quality of the n A-5.4: As I observed, currently SE sell a lot ATV610 Why you can sell a lot that new a Lu Voltage VSD in Vietnam? om Q-5.4: So, which factors you think that are the key for your success in selling more and more Low y te re other brand like LS to using SE with the same price? n have a good price, and a good brand name, as SE, why don’t customer willing to change from va product? First, price! The current price of ATV610 can compete with LS So if your product th Q-5.5: Beside price, what is the second factor? 67 A-5.5: Second, I think it is about the after-sales support, warranty time, and the flexibility in t to troubleshooting for the end customer, such as change the new one immediately I don’t think ng currently SE can offer or can be flexible for all of this We have to flexible to serve our hi ep customer first, before get supporting from SE Q-5.5: So it mean you need more support from supplier with longer warranty time for you and more w n flexibility on helping you serving your customer? lo ad A-5.5: No, personally I don’t want to extend the warranty time to my customer I’ve just want y th supplier like SE can consider some current practice of competitor in the market to define a ju better strategy Because of extending the warranty time cannot create any profit for your yi business… pl al n ua Q-7: What you need from your supplier to help you sell more VSD in Vietnam market? va A-7: More flexible, between supplier and distributor, and more trust to support us better to n compete with competitors We cannot share all the sensitive information about our business, fu ll our customer, our project, etc., in detail to get better support from supplier but we have to oi m believe each other and try our best to compete with the competitors to win the project if need, because at the end of the day maybe us or other distributor will buy from you to supply for at nh that project instead of the competitors z z Q-7.1: So you want to suggest ideas that could help you and supplier to cooperate better? vb jm ht A-7.1: Just more trust from supplier to support us, instead of ask us to share all the information What we can share, we will share but there are some case the information will k partner with us must believe on us Just like this l.c gm effect a lot of people that related to the project that we cannot share but you as an supplier and supplier, the team behind the salesman to support you better? y te re th  Interviewee: Mr Truong Tien Loc (A) n  Interviewer: Pham Le Xuan Toan (Q) va 9.3.3.2 Interview 3.2 n Q: Thank you very much for your sharing a Lu A-7.2: Yes om Q-7.2: So you mean beside the salesman who supporting you, you also need more trust form the 68 t to  Interviewee’s title: Sales Director – A&E Engineering Co., Ltd (Industry ng Expert Distributor Partners of Schneider Electric Vietnam) hi ep Q-1: Could you please introduce about yourself and your experience about SE’s Low Voltage VSD? w A-1: My name Truong Tien Loc, I have more than 10 years doing business with SE’s VSD n lo About SE’s product, normally it is the best in class and high quality product compare with ad other brand name in market! But currently there are some change in SE’s strategy in lauching y th some other medium product lines, with lower price and also the quality I don’t tell the quality ju not good compare with the same product category in the market But currently there are a lot yi of warranty request for these new product pl ua al Q-2: Could you please share with me about Low Voltage Variable Speed Drive (VSD) market in Vietnam? And what would you to sell more Low Voltage VSD in the market now? n va A-2: In Vietnam, there are some big brand name like SE, ABB, DELTA, INVT, LS There are n fu some others brand from Japan like OMRON, MITSU and a lot of brand from China, Taiwan, ll ect., In my experience, China’s VSD mainly for China customer For other big company or m oi EU company they are rarely using China brand at nh Q-2.1: Is INVT also from China? z A-2.1: Yes, from China but INVT have good quanlity! Today, I still don’t know why INVT z vb have both low price and good quality and can be used in harsh environment Especially, brand name product like ABB, SE there k jm ht currently INVT is very well-known in Sugar Industry and in some way can changing other big gm Q-2.2: Why INVT can change these big brand name like this? Q-2.3: Can we use ATV310 or ATV610 to compete with INVT? om l.c A-2.2: Price is just two third, good quanlity, and also stock available for all product range! our market th of product to sell, not only VSD so we should focus on our current business and sell more in y distributor and just focus on VSD product SE is bigger, you have your own strategy and a lot te re A-2.4: In my opinion, INVT is just for some niche market only, and just distribute by one n Q-2.4: So if we want to compete with INVT what should we do? va competitive n a Lu A-2.3: Cannot Because they also offer a lot of range from low to high, and all are very 69 Q-2.5: How you think about the competition of SE with other brand like ABB, SIEMENS, t to DANFOSS? ng hi A-2.5: About price, SE is still good Currently, A&E is also distributor of ABB, about price ep there is not any change in price in the past 2-3 years and don’t have any new product launching recently And ABB focus more on project business, not much on distribution or w n transactional like SE They allow us to distribute their VSD but the connection, the support we lo get from them is not much And when compare with SIEMENS or DANFOSS the price of ad SE’s VSD is better in some product range and also the stocking and distribution network of y th SE is better ju yi Q-2.6: What are the factor that you concern when making the stock decision for VSD product? pl al A-2.6: First is the price, second is the application For example, we cannot stock ATV71 high ua power range, because for heavy duty application if you want to make stock you have to stock n from and above 315kW and it will cost a lot if we stock Another point is for ATV71 we just va n can offer for current using customer only, for new customer that don’t know about the product ll fu quality they will affraid of the high price of the product! So we just stock for some range of oi m ATV312 because it is easy to sell and can be used for a lot of application at you need any special support from SE? nh Q-2.7: For the ATV71 or high-power range VSD you mention above, to make you willing to stock z z A-2.7: For these product, based on our stock level, market information and aslo our customer ht vb need we will consolidate to a special list and ask SE for special support to stock For these jm product we don’t follow the normal stock policy But there are still some risk that there are some product we cannot sell-out and still in our store and out of warranty now So sometimes k easily if it is your product! l.c gm I suggest that for some big VSD, SE should keep stock because you can extend warranty time a Lu customer? om Q-3: In your opinion, how you think about SE’s current policies for Specialist Distributor n A-3: Currently SE has defined a new distribution channel for Medium product like ATV310, distributor profile (for Optimum or Medium product) they just care about why the 10 years old th product like the new distributor Han My Viet or Hop Long? Customer don’t care about the y always question us why a big distributor of SE like A&E cannot offer the same price for these te re expand the market but the new channel also make a lot of effect in A&E business Customer n have been working with SE for a long time, maybe SE want to build up a new channel to va ATV610, in my opinion, I feel not fair for current distribution partner of SE like A&E, who 70 distributor can not offer a better price than the new distributor for the same product! And it is t to not only effect the VSD business of A&E, but also effect all other product that currently A&E ng distribute for SE, our traditional customer now go around to check the price before contact us! hi ep Maybe it is SE strategy, but it is not fair for us Q-3.1: As I know, for current commercial policy, Medium distributor just can buy Medium VSD w n product and cannot access to Optimum VSD product! Do you want SE make the same coommercial lo policy for both Medium Distributor and Optimium Distributor so that every distributor have the same ad commercial policy for all product? y th ju A-3.1: I think every policy have the pros and cons, but it must be aligned with SE’s strategy in yi developing the business If SE want to enter the new market for this new product, SE should pl create the new channel and make the commercial policy to support Medium distributor better al ua to sell to that new market If they ask A&E to open that new market maybe A&E cannot n much because for these product range, currently A&E just sell base on customer request For ll fu strategy better n va the distributor that currently focus on selling the low-price product they can follow this m Q-3.2: Base on your experience, how many percent of your customer that their need is just Medium oi VSD product, but because in the past SE don’t have the Medium offer so that A&E have to use nh Optimum to offer and influence the customer to use? at z A-3.2: I think about 20% For example, some simple application we have offered our customer z vb the ATV312, but today when SE launching ATV310, the customer asks us to sell ATV310 but ht our selling price is not good so that they buy from your Medium distributor You know, every k price offer in the market… jm company have a purchasing team, and for these normal requests they will search for the best gm Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which l.c VSD in Vietnam? om factors you think that are the key for your success in selling more and more Low Voltage n a Lu A-5: I think currently the cooperation among Optimum Ditributors is better than before, we etc., so that they are very strong with Medium product, and A&E still strong with Optimum product only th And now for distribution you also have Medium Distributor like Han My Viet, Hop Long, y distributors so we must secure our profit first, and focus on selling what make more profit te re margin level Maybe because in the past there are just A&E and Thien Son But today, a lot of n to discount to kick out the other as usual Today we compete but must keep the requested va are not aggressive competed as we did in the past We are not tried to win the project and tried 71 Q-5.1: How you think about these Medium distributors? What currently they in the market? t to ng A-5.1: Hop Long have entered the south market recently, they open the branch office here and hi they did dumping the market with very low-price offer and good sales terms and condition ep support to conquest more and more customer from us And this is not just for Medium product, they can dumping for all kind of SE product I don’t know why they can that? w n Are they importing the product directly or can they get a very strong support (not fair) from lo ad SE for that? y th Q-5.2: Beside the price, is there any other factor that you think will help you selling more VSD in ju Vietnam market? yi pl A-5.2: Beside the price, if a company want to sell more VSD they have to make their customer al ua believe in their knowhow and capability to support them, especially that company must invest n in a strong technical team focus on VSD that can both support and training for the end ll fu capability of the distributor n va customer Some other factors are after-sales support, delivery support, and also stocking oi m Q-7: What you need from your supplier to help you sell more VSD in Vietnam market? at nh A-7: In my opinion, I need more support from SE for marketing activities such as organize some seminars, trainings for A&E customers at some key provinces or some key industrial z z zones I think these activities will help us better support our customer and also conquest more Q-7.1: Is there anything you need from our marketing team? k jm ht vb new customers gm A-7.1: For marketing, if you have any new product or any update on your product you should training for our sales team and provide us more information about price, and price y te re th Data collected after the interviews was summarized as below key findings: n 9.4 Qualitative research findings va Q: Thank you very much for your sharing n A-7.2: They do, but not much We need more and frequently a Lu Q-7.2: So you mean our marketing team currently not support you on these activities? om l.c communication to market, catalogue, product sample, demo, price list etc., 72 # t to ng hi ep Question implications Current & situation of the market and competitors 1.1/ Thuy Poor marketing communicati ons (A-2.7) Findings 2.1/ Tram 2.2/ Trung Lack of discussion and sharing information between sales & marketing (A-1.4) 1.2/ Vinh w Poor relationship between sales & marketing staffs (A2.12) n lo ad yi Poor relationship between sales & marketing staffs (A-3.3) pl n ua al Conflict of interest between sales & marketing (A-3.1 & A3.4) ll oi m at nh z z jm ht om l.c n n va Interchannel conflict (A-5) a Lu Interchannel conflict (A5) gm y te re th Interchannel conflict (A5) Lack of discussion and sharing information between sales & marketing (A-5) Poor relationshi p between sales & marketing staffs (A4.4) k Lack of market intelligence information (A-5.3) Conflict of interest between sales & marketing (A-4.2) vb Potential causes identification and validation Interchannel conflict (A3) fu Lack of market intelligence information (A-4) Poor marketing communicat ions (A-4) Poor relationshi p between sales & marketing staffs n va Internal competition among partner customers if any and current support from sales & marketing staffs to partners Potential problems identification and validation 3.2/ Loc Poor marketing communicat ions (A-2.7) Poor marketing communica tions (A2.9) ju y th 3.1/ Vinh Poor marketing communic ations (A1) 73 Implication for solution designed from sales & marketing staffs Implication for solution designed from partner customers t to ng hi ep Lack of market intelligence information (A-6 & A6.4) Poor relationship between sales & marketing staffs (A-6) Poor relationship between sales & marketing staffs (A-6 & A-6.1) Lack of market intelligenc e informatio n (A-6) w n lo Ineffective collaborati on between sales & marketing (A-7.1 & A-7.2) ad ju y th yi pl n ua al n va ll fu oi m at nh z z k jm ht vb om l.c gm n a Lu n va y te re th 74 t to References ng (1) Schneider Electric Website hi (2) Company Profile Schneider Electric Vietnam [Internet] 2016 April Available ep from: http://www.schneider- w electric.com.vn/documents/company/EN_Com_Profile_Apr16.pdf n lo (3) Schneider Electric relishes EU-Vietnam FTA challenges Vietnam Investment ad Review [Internet] 2016 February 15 Available from: ju y th http://www.vir.com.vn/schneider-electric-relishes-eu-vietnam-fta-challenges.html yi (4) Saidur R, Mekhilef S, Ali MB, Safari A, Mohammed HA Applications of variable pl speed drive (VSD) in electrical motors energy savings Renewable and Sustainable al ua Energy reviews 2012;16(1):543–550 n (5) Global Variable Frequency Drive Market Research Report - Forecast to 2022 va n Market Research Future [Internet] 2017 July Available from: ll fu https://www.marketresearchfuture.com/reports/variable-frequency-drive-market- oi m 2440 Management Review 1994;35(3):45-60 at nh (6) Cespedes FV Industrial Marketing: Managing new requirements Sloan z z (7) Meunier KL, Piercy NF Exploring collaboration between sales and marketing vb European Journal of Marketing 2007;41(7):939-955 ht jm (8) Meunier KL, Piercy NF Does collaboration between sales and marketing affect k business performance? 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