marketing tea product of hao hat cooperative in thai nguyen

ABSTRACT This thesis focuses on clearly analyzing the organization and operation, resource conditions, actual situation of production, business and marketing activities at Hao Dat tea co

THAI NGUYEN UNIVERSITY

UNIVERSITY OF AGRICULTURAL AND FORESTRY -

NGUYEN HOANG VIET ANH

Project title:

“MARKETING TEA PRODUCT OF HAO DAT COOPERATIVE IN THAI NGUYEN CITY”

BACHELOR THESIS

Study Mode: Full-Time

Faculty: International Programs Office

Thai Nguyen, March 2022

THAI NGUYEN UNIVERSITY

UNIVERSITY OF AGRICULTURAL AND FORESTRY -

NGUYEN HOANG VIET ANH

Project title:

“MARKETING TEA PRODUCT OF HAO DAT COOPERATIVE IN THAI NGUYEN CITY”

BACHELOR THESIS Study Mode: Full-Time

Class : K50 – Agricultural Economics Faculty: International Programs Office

Supervisor : Assoc Prof Dr Nguyen Thi Gam

Thai Nguyen, March 2022

ACKNOWLEDGEMENT

With the agreement of the Board of Directors of Thai Nguyen University of Agriculture and Forestry, the board of directors of the Advanced Program Office, and the instructor Assoc Prof Dr Nguyen Thi Gam, I carried out the project "Marketing tea product of

Hao Hat cooperative in Thai Nguyen” To complete my thesis, I received the

enthusiastic guidance of the teacher Assoc Prof Dr Nguyen Thi Gam and the support of the entire Hao Dat Tea cooperative, Thai Nguyen city On this occasion, I would like to express my deep gratitude to the teacher Assoc Prof Dr Nguyen Thi Gam who guided the topic, and all the teachers and staff of the Advanced Program Office I would like to express my sincere thanks to all staff, friends, teachers, and family members who have encouraged and supported me throughout my study process and completed my thesis In the process of making my graduation thesis, due to my limited experience and knowledge, I will inevitably make mistakes and make, which look forward to the participation and comments of my teachers and students to make my thesis more complete

Thank you sincerely!

Thai Nguyen, Dec 27, 2022 Student

Nguyen Hoang Viet Anh

LIST OF TABLES

Table1 Tea export in 2020 41

LIST OF PICTURES

Figure 1 Factors affecting the price decision 24

Figure 2 The process of determining the price for the first time 25

Figure3 Location map of Tan Cuong commune, Thai Nguyen city 50

Figure4 Satellite map of Tan Cuong commune, Thai Nguyen city (Satelite Map) 50

Figure5 Hao Dat Tea Cooperative 54

Figure6 Flowchart of the production process 59

Figure7 Diagram of the parts of the enterprise/cooperative 60

1.3 Meaning of the topic 10

1.3.1 Meaning in learning and research 10

1.3.2 Meaning in practice 11

PART 2: OVERVIEW OF RESEARCH ISSUES 12

2.1 Theoretical basis 12

2.1.1 Overview of tea plants 12

2.1.2 Economic overview and cooperatives (cooperatives) 13

2.1.3 Principles of business administration of cooperatives 31

2.2 Practical basis 38

2.2.1 Situation of tea production in Vietnam 38

2.2.2 Situation of tea production in Thai Nguyen province 42

PART 3: RESEARCH SUBJECTS, CONTENTS, AND METHODS 45

PART 4: RESULTS AND DISCUSSION 48

4.1 General assessment of the study site and the cooperative where the study is located 48

4.1.1 Tea development situation in Tan Cuong commune, Thai Nguyen city 48

4.1.2 Overview of Tan Cuong commune 49

4.1.3 Overview of Hao Dat Tea Cooperative 53

4.2 Evaluation of the scale, resources, and business activities of Hao Dat tea cooperative 58

4.2.1 Capital resources, area and facilities 58

4.2.2 Human resources of the cooperative 59

4.2.3 Overall assessment of production and business activities 61

4.3 Assessing the current status of marketing activities of the cooperative 62

4.3.1 Market research 62

4.3.2 Products 66

4.3.2.1 Building a production process for safe raw material tea areas 66

4.3.2.2 Build product characteristics 67

4.3.2.3 Standardization of the tea processing process 68

4.3.2.4 Research the types of packaging for tea products 70

4.3.2.5 Building and perfecting product brands 72

4.3.2.6 Build customer service 72

4.3.6 Shortcomings in organizing marketing activities at Hao Dat tea cooperative 81

PART 5: CONCLUSIONS AND RECOMMENDATIONS 83

5.1 Conclusion 83

5.2 Recommendations 84

5.3 Request 91

5.3.1 For local government 91

5.2.2 With members of Hao Dat Tea Cooperative 92

5.2.3 With the leader of Hao Dat Tea Cooperative 92

REFERENCE 94

ABSTRACT

This thesis focuses on clearly analyzing the organization and operation, resource conditions, actual situation of production, business and marketing activities at Hao Dat tea cooperative, Tan Cuong commune, Thai Nguyen city On that basis, the thesis can research and propose marketing solutions to help cooperatives do business effectively, promote their potentials and strengths, overcome difficulties and obstacles in tea production and business next year

PART 1: INTRODUCTION 1.1 Question

Cooperatives increasingly clearly show their role in socio-economic development, especially the agricultural economy, by creating more jobs, and increasing income sources for workers and a large number of people disadvantaged in society in rural areas, contributing to ensuring social security, safety, order, and safety, building great solidarity of the whole people In addition, the cooperative has the well-mobilized human and physical strength to solidify agricultural infrastructure and build new rural areas This is the essence and true value of the cooperative economy Many new-type cooperatives and specialized cooperatives have been established, which have promoted their leading role in supporting local members to develop effectively and sustainably

Vietnam has an advantage in tea production, especially in the Thai Nguyen province This is also one of the leading export agricultural products of our country Thai Nguyen tea area is one of the key tea regions of the country, with a tea area of more than 22,300 hectares, of which processing output reaches 37,400 tons, industrial processing reaches 6,385 tons, equaling 17% of total output (Ministry of Agriculture and Rural Development in 2020 Vietnam tea industry: Situation and solutions) identifying tea as a key crop of the province, in recent years Thai Nguyen has taken measures to improve the yield and quality of tea to meet VietGap standards Currently, the province has 15 models according to VietGap standards in Dai Tu, Dinh Hoa, Dong Hy, Vo Nhai, Pho Yen, Phu Luong, and Thai Nguyen city districts, with a total area of about 200 hectares Especially

famous for the Tan Cuong tea area in Thai Nguyen City, mainly concentrated in 3 communes of Tan Cuong, Phuc Ha, and Phuc Triu

Currently, the tea industry produces domestically and reaches out to the world Over the years, the tea industry has brought significant economic value to society, created many job opportunities, increased incomes, improved people's lives, and contributed to the development of agriculture However, in the context of integration and the impact of the Covid-19 pandemic, the tea industry is facing many difficulties and challenges; about 90% of tea output is exported in raw form, at low selling prices, and consumed under the brand name of the importer Along with that, marketing activities still have many

limitations and shortcomings [4]

Hao Dat Tea Cooperative was established in 2016 in Tan Cuong commune, Thai Nguyen city, with eight members and more than 50 households to supply raw tea (formerly known as Hao Dat tea production and business cooperation group) Up to now, Hao Dat Tea Cooperative has 30 members, with more than 10ha of natural tea area, which focuses on applying scientific and technical advances to safe tea production according to VietGAP standards to ensure the source of input tea materials Hao Dat Tea Cooperative consistently achieves high quality, ensuring food safety and hygiene criteria In addition to displaying, introducing, and selling products at the place of production, introducing and promoting on websites, Hao Dat Tea Cooperative also promotes trade promotion activities such as Participation in fairs and exhibitions in and outside the province The product lines of Hao Dat tea have affirmed the brand reputation in the domestic market

and some countries such as China, and Taiwan, by high quality, ensuring food safety and hygiene Currently, the cooperative has three main products, including Moc cau tea, Tom non tea, and Dinh tea, rated at 04 stars OCOP, in which Tom non tea is a 01/20 product that has been evaluated and classified by the council National OCOP product rating proposed for 5-star recognition Due to the nature and characteristics of products and the Vietnamese New Year holidays, the issue of appropriate marketing is also a problem in general for the Vietnamese tea industry and the Hao Dat Tea Cooperative Facing the epidemic situation in recent years, the cooperative's marketing faced many difficulties.[3]

Therefore, in the coming time, the tea industry needs to implement many solutions synchronously to innovate in marketing activities Starting from the above practice, I

researched the topic: " Marketing tea product of Hao Dat cooperative in Thai Nguyen

produce and do business effectively, promote their potential and strengths and overcome

difficulties and obstacles in tea production and business in the following years

1.3 Meaning of the topic

1.3.1 Meaning in learning and research

- Studying the topic helps students consolidate the basic knowledge and knowledge trained at the school, and at the same time, creates conditions for students to have the opportunity to access real-life knowledge

- Researching the topic is the basis for students to apply the knowledge they have learned in practice creatively Students need to see the basic knowledge that needs to be supplemented to be suitable for the following real work

- Research topics to promote students' self-discipline, active learning, and research Improve the spirit of inquiry, learning, creativity, and ability to apply knowledge and synthesize, analyze, evaluate situations, and orient ideas in practical conditions

- Researching the topic is an opportunity for each student to apply what they have learned in scientific research, which is the basis for forming research ideas in the field of developing indigenous medicinal plants later

1.3.2 Meaning in practice

- The research results of the topic provide marketing solutions in tea production and business activities of the cooperatives to help the units produce and trade effectively, promote their potential, and strengths, and overcome challenges overcome difficulties and obstacles in the process of tea production and business

- The research results are the reference base for the tea production cooperatives in Thai Nguyen province and the Hao Dat tea cooperative in particular for reference and application

PART 2: OVERVIEW OF RESEARCH ISSUES

2.1 Theoretical basis

2.1.1 Overview of tea plants

Green tea is one of the specialties of Vietnam, distributed in areas with suitable ecological conditions for the growth and development of the plant Green tea is a drink with many uses that many customers choose

The origin of the tea plant is one of the issues with many different opinions, such as Many people believe that the origin of tea is in the Yunnan plateau – China In contrast, others think that the green tea plant is in North Vietnam, either in Burma or first appearing in India In ancient times when there was no clear division of places, it was challenging to determine the origin of the tea tree of which place Therefore, we can see that the above areas are all in ancient Southeast Asia [5]

Thus, it can be understood that ancient Southeast Asia was the cradle of tea, and today it is widely distributed in many parts of the world with suitable ecological conditions

Tea products have long been recognized as food Brewed tea is an exquisite beverage for humans Drinking tea at a moderate level has good effects on the body: makes people less tired, mentally sharp, and mentally refreshed, enhances muscle activity, improves working capacity and resilience at work In addition, drinking tea also can fight many intestinal diseases such as diarrhea, dysentery, typhoid, anti-atherosclerosis, cancer

prevention, and radiation prevention Tea is also used to make medicines for the heart, hemostasis, diuretics, etc [9]

Economically: tea is a perennial industrial plant, having practical effects in greening bare land and bare hills; against leaching and erosion in sloping lands Nowadays, the tea tree is not only one of the crops to eliminate hunger and reduce poverty for people in the Midlands and Mountains, but it has helped many tea-making families become rich Products processed from tea buds are being widely consumed throughout the country and are an export item of high economic value in the national economy Developing tea production creates jobs for tens of thousands of people, especially in remote and isolated areas

2.1.2 Economic overview and cooperatives (cooperatives)

2.1.2.1 The concept of economic efficiency

Economic efficiency is an economic category reflecting the quality of economic activities, the quality of these activities is the process of increasing rational exploitation and arousing available human potential to serve human interests.[12]

The essence of economic efficiency in social production is to fulfill the requirements of the law of saving labor time in the use of social resources That is the efficiency of social labor and is determined by the close correlation between the number of valuable results obtained with the amount of waste

From a comprehensive point of view, economic efficiency cannot be excluded from the goal of improving cultural and social qualifications, better meeting social needs, and creating a sustainable environment That represents the relationship between economic performance, social performance, and environmental performance now and in the long run That is the correct view in microeconomics and macroeconomics in line with current economic development trends

* Some formulas to evaluate the economic efficiency

+ Value of production: GO (Gross Output) is the total value of goods and services created in a certain period (usually 1 year)

IC = ∑Where: Ci is the expense

+ Value added: VA (Value Added) is the added value of the enterprise or producer calculated by the formula:

VA = GO – IC

In the case of hiring labor, such hire must be deducted

+ Mixed Income: MI (Mixed Income) is the net income of a producer including labor income and profit when producing a unit area in a year

MI = VA – (A + T) Where: VA is the value added (increase)

T is the agricultural tax

A is the depreciation of fixed assets and amortized cost + Profits:

TPr = GO – TC Where: GO is the production value

TC is the total cost of production

+ Production value per unit area: the ratio between the total volume of products obtained divided by a unit area (in sao or hectare)

GO/pole or GO/ha

+ Production value per dollar of cost: GO/TC + Production value per worker: GO/CLD + Value added per unit area: VA/ha or VA/ha + Value added per dollar of cost: VA/TC + Value added per worker: VA/CLD

* Some formulas for economic efficiency

+ Formula 1: Economic efficiency is determined by the ratio between the value of the result obtained and the cost spent to achieve that result

Economic efficiency = Outcome/Production cost or H = Q/C

Where: H is economic efficiency Q is the result obtained C is the cost of production

+ Formula 2: Economic efficiency is determined by the difference between the value of the result obtained and the cost spent to obtain that result

Economic efficiency = Outcome – Production cost or H = Q – C

McCarthy defines marketing as the process of performing activities to achieve organizational goals by anticipating customer or consumer needs and directing the flow of

goods and services that satisfy those demands from the producer to the customer (McCarthy, 1975)

According to Gronroos (1990), marketing is the establishment, maintenance, and strengthening of relationships with customers and related partners to satisfy the goals of these members

The American Marketing Association abbreviated as AMA (2007): gives the official definition that marketing is the activity, set of institutions, and processes that create, interact, deliver, and change valuable proposals for consumers, partners as well as society at large

Stone et al (2007): “Marketing is a system of business activities designed to plan, price, promote, and distribute products that satisfy the wants of target markets to achieve them organizational goals”

Philip Kotler: “Marketing is the process by which individuals and groups can achieve needs and wants by creating and exchanging products and values between parties” (Kotler et al, 1994, p twelfth)

Step 1: Identify potential market

Above all, businesses need to determine the potential market for their products and a perfect market must be large enough to cover all consumers inside When defining a market, the company/cooperative needs to pay attention to substitute products because customer demand for the product is ever-changing and often affected by the price or social influence

Step 2: Divide the total demand into its major components

This step aims to review, evaluate, and make judgments about alternative segments

Step 3: Guess the factors affecting market demand

After having statistics related to market demand, at this time, companies/cooperatives need to make their judgments about the causes of changes in demand in the market past

Step 4: Sensitivity Analysis

In some cases, assuming market demand is influenced by macroeconomic variables and market developments sometimes produces inaccurate and misleading results Therefore, this step aims to provide insight and accuracy by changing assumptions quantifying their impact on market demand

Next will be a research method to help companies/cooperatives research market needs that customers are interested in

a) Observe consumer behavior

Observing the shopping behavior of users helps us easily grasp the psychology as well as the needs that customers are interested in

b) Testing of sample products

Using sample products for customers to try will quickly grasp the market’s needs and customers' reactions to the company's/cooperative's products After monitoring customer attitudes and gestures, the company/cooperative will know how to choose a pricing and marketing strategy to suit the market’s needs

c) Open the survey

To understand the needs of the market, businesses can conduct surveys to poll and respond to customers to see their level of satisfaction with the product through email, phone, or surveys, direct,…

Finally, the distribution channels will create the flow of products from the company/cooperative to the consumer All organizations and individuals participating in the distribution channel are called channel members, and the members between the producer and the final consumer are called distribution intermediaries, including:

- Wholesaler: An intermediary that distributes the manufacturer's product and sells it to other intermediaries

- Retailer: A distribution intermediary that buys products from a manufacturer or wholesaler and directs the product to the consumer

- Agents and Brokers: This distribution intermediary has the authority to sell products on behalf of the manufacturer However, there is no ownership of the product

- Distributors are intermediaries in the market or wholesalers Intermediaries such as wholesalers and retailers who spend money to buy goods and resell them for a profit are called commercial intermediaries and have legal status Other intermediaries such as brokers, manufacturers' representatives, and sales agents are looking for customers, negotiating on behalf of manufacturers, and negotiating terms of sale They have no legal personality and only receive sales brokerage commissions

2.1.2.2.3 Marketing - mix

a) Marketing - mix concept

Marketing-mix is a set of marketing tools a business uses to achieve a marketing focus in a target market The term was first used in 1953 when Neil Borden, president of the American Marketing Association, took the recipe idea and coined the term Marketing-mix A famous marketer E Jerome McCarthy, proposed the 4P classification in 1960, which is now widely used

Marketing-mix is a set of variables that a company can control and manage, and it is used to try to achieve beneficial effects for target customers (According to Marketing, Prof Dr Tran Minh Dao, National Economics University)

b) Product strategy planning  Product:

Any element that can satisfy a need or want to be sold in a market to attract attention, purchase, use, or consumption

A product can be offered for sale in the market for attention, purchase, use, or consumption that can satisfy a want or need (According to Marketing, Prof.)

 Deciding on a product brand

A trademark is a name, term, symbol, design, or combination used to identify the products of one seller or group of sellers and to differentiate them from those of competitors

The brand has the following basic parts:

- Brand name: it is the part of the brand that can be read

- Marks of the mark: (including symbols, drawings, colors, or specific words, ) It is a part of the mark that can be distinguished but cannot be read

- Trademark: a mark as a whole or part of it that is registered with a trademark authority and is therefore legally protected

- Copyright: the exclusive right to copy, publish, and sell the content and images of a literary, musical, or artistic author

 Product packaging decisions:

Product packaging usually has 4 typical components: Direct contact with the product, Contact layer protection, Transport packaging, and Brand and product description information on the package

To create effective product packaging, managers must pass a series of subsequent decisions:

- Building the concept of packaging: What principles must packaging comply with? What role does it play for a particular item? What information should it provide about the product? …

- Decide on aspects: Size, shape, materials, colors, presentation, and branding? When passing these decisions, it must be associated with other tools of Marketing

- Packaging testing decisions includ: Technical testing, form testing, business testing, and consumer acceptability testing

- Consider the aspects of social benefits, consumer interests, and the interests of the company itself

- Deciding on packaging information: Depending on specific conditions, packaging manufacturers decide what information to put on packages and how to put it

 Product life cycle:

The life cycle is a term that describes the variation in sales from the time a product is introduced to the market until it is withdrawn from the market The life cycle of a product can be considered for each specific item, each category group, and even each product brand

Product life cycle stages:

 Launching phase: The initial stage of putting the product on the market

Characteristics: Sales are slow, and businesses often lose money or have little profit Reason:

+ High cost due to relatively low productivity

+ Production technology may not be fully mastered yet

+ A high level of support is required to support large promotional costs

 Growth stage: Consumption begins to increase sharply in this stage, new competitors begin to appear, and profits are in the growth phase

Characteristics: Sales and profits plummeted sometimes to zero Cause:

+ The development of science and technology sometimes creates more effective substitutes

+ Enterprises give up too fiercely competitive market segments, cut inefficient distribution channels, and cut advertising costs

c) Product pricing strategy

 The general problem with the price

The price of a product or service is the amount a buyer must pay a seller for the right to own or use the product or service (According to Marketing, Prof Dr Tran Minh Dao, National Economics University)

Price is the exchange correlation in the market Price is a symbol of the value of products and services in exchange activities

For buyers: the price of a product or service is the amount a buyer must pay a seller for the right to own and use that product or service

For sellers: The price of a good or service is the income the seller receives from the sale of that product

 What are the main factors that influence pricing decisions?

Figure 1 Factors affecting the price decision

(According to Marketing, Prof Dr Tran Minh Dao, National Economics University)

 Determine the base price

Figure 2 The process of determining the price for the first time

(According to Marketing, Prof Dr Tran Minh Dao, National Economics University)

 Determine the strategic price

This is a pricing strategy applied to a product's life cycle stage When launching a new product into the market, businesses can choose one of two types of strategies:

Price strategy “Skip the good”: the business sets the selling price of its product as high as possible for the segment of the market where buyers are willing to accept that new product

Pricing strategy “Stick to the market”: Businesses set a low price for their new finished products in pursuit of the goal of “gaining a large market share” and profit in the long run

d) Distribution strategy

 The nature and importance of distribution channels

A distribution channel is a set of independent and interdependent businesses and individuals involved in the process of moving goods from producer to consumer

 There are intermediaries involved in the burrowing process:

- Agent: A representative of the manufacturer who has the legal right to act: + Sell goods directly to businesses

+ Find customers for businesses

- Merchant: An intermediary that buys goods from a business and resells it to other businesses

- Retailer: A person who sells goods directly to buyers

- Distributor: A person who performs the distribution function in the market  The functional role of intermediaries in the distribution channel

- Reduce the lack of relationship in the purchase and sale of goods -> reduce the cost of buying and selling

- Because intermediaries have more specialized ability -> make the supply and demand in the market order stable and efficient

 Channel members must perform the following specific functions: - Market research

- Promotion of the products they sell - Negotiate

- Material distribution - Build the relationships

- Finishing goods - Sponsor

- Risk sharing related to the distribution of goods

2.1.2.3 The concept of cooperative

In Vietnam, although the cooperative model has been applied for a long time, it hardly works in the right sense Farmers hardly cooperate, leading to small, scattered, and undirected agricultural production Farmers make wealth, but they have not yet enjoyed the fruits of that labor The more products they make, the more they suffer The reason lies in the fact that each farmer makes one style, sells one style, and buys one style, a small quantity does not create a large enough economic effect To solve this problem, it is necessary to have a full awareness of the concept and nature of the cooperative model

A Cooperative is an economic organization, established by individuals, or small and medium-sized enterprises with the same purpose, which is jointly owned A cooperative is a democratically operated, non-profit mutual aid organization that is an important part of the collective economy

Cooperatives are voluntarily contributed by individuals, so they are an investor The opinions of each individual are respected and enforced when receiving a majority consensus Moreover, each individual will make an effort to participate, and show responsibility so that the benefits get bigger and bigger

The cooperative is owned by the participating members Therefore, the cooperative operates only to serve the interests of those members, helping members to produce more sustainably, with better quality, in line with market demand

It is necessary to raise awareness about the role, position, and business characteristics of agricultural cooperatives in the new period, the period of market economy and integration That is to reorganize cooperatives in the form of both service and business to make profits for members and cooperatives To build cooperatives capable of expanding production and actively linking with the market, businesses, and traders, only then can the interests of farmers be protected Only then will there be conditions for large commodity production, then there will be a stable development of agriculture associated with the market

The basic principles of cooperatives:

(1) Being an autonomous economic organization (with legal status)

(2) As an organization of farmers (workers), actively established by farmers (3) Is an organization run by farmers

(4) An organization with the purpose of cooperation and mutual support (5) Is a politically independent organization

The important point of Cooperatives is: mutual support The need for mutual assistance is evident in the agricultural sector For example: buying seeds, buying

fertilizers, applying techniques, sharing machines, post-harvest processing, selling products Each individual buys the same item, and "buying together" will reduce the cost transportation costs In addition, too many producers will cancel each other out, losing competitiveness To build brands of agricultural products, improve competitiveness and reach out to urban areas to dominate the market, individuals must combine into a legal entity Only then will agricultural production create economic efficiency, have a competitive strategy, improve economic and social position, and stabilize the household economy

In the field of production and business, the essence of agricultural cooperatives is not negation, the replacement of the household economy, making individual production of cooperative members more competitive, the income of members are higher in the increasingly fierce competition, through the cooperative providing low-priced, high-quality input services to the cooperative members, through the coordination of production and business plans of households and organizations consuming their products

From the perspective of organizing cooperatives, it can be seen that to entice farmers to participate in cooperatives, Vietnamese agricultural cooperatives must ensure that they can immediately solve the problem of helping farmers to consume agricultural products at an affordable and low cost To do this, the organization and management of Vietnamese agricultural cooperatives must meet three conditions:

+ The members of the Management Board of the cooperative must have professional capacity and dedication to the goal of helping farmers get rich, rather than using the cooperative to enrich themselves or to accumulate profits for the cooperative cooperative

+ Farmers understand that the cooperative is the organization that helps them, so they cooperate with the management to establish the optimal operating mode for the cooperative

+ Local authorities must not interfere in the work of cooperatives but must create conditions for the cooperative's social goals to be most easily accomplished

From the practical experience of developing agricultural cooperatives in the world and Vietnam, it is found thatton survive and develop, the principles and purposes of agricultural cooperatives must bring benefits to farmers such as:

+ Selling goods to farmers with affordable, convenient, and quality assurance + Helping farmers to consume goods easily, with a plan with reduced costs, reasonable prices, civilized trade, and product standardization at a high level

+ Create a good competitive position for farmers both when buying and selling goods

+ Link farmers to effectively use resources such as labor, machinery, finance, technology, etc to have low production costs

+ Training on self-management and advanced technology application for farmers

2.1.3 Principles of business administration of cooperatives

The principles of business administration are the guiding rules, and standards of behavior that cooperatives and cooperative leaders must adhere to in the process of doing business

2.1.3.1 Compliance with laws and social practices

The legal system is built based on political orientations, to regulate what members of society can and cannot do, and is the basis for handling actions that violate social relations and the social system is protected by law

In the market economy of cooperatives, economic entities are entitled to freedom of practice, and autonomy in production and business activities, these rights are only really useful for society and effective for cooperatives when they are placed in the legal corridor of the law Laws are the constraints of the State and macro management agencies for cooperatives in the direction of social development [13]

The law creates an environment and conditions for cooperatives to both operate in the right direction and operate safely and effectively Here, the cooperative's compliance with the law becomes an obligation, responsibility, and even interest as an independent entity and legal entity If leaders of cooperatives violate, they will be handled with administrative and economic measures.[14]

Therefore, it is required that cooperative leaders must be knowledgeable about the law in such areas as Cooperative law, company law, land law, tax law, import and export law, labor law, environmental protection law, law consumer protection, and bankruptcy law [14]

Besides the law in production and business, there is also a system of compulsory social business practices that business owners must know[14]

2.1.3.2 Must come from the customer

Customers have an extremely important role, almost decisive to the process and results of the cooperative's production and business The customer of the cooperative is the market demand for a certain product in terms of quantity, quality, and type Cooperatives are based on the needs of customers to build their product strategy and to implement that strategy, it is necessary to organize the production and business process according to which technology, determines the management content, and the operating method of cooperative leaders, customers are also the basis for forming the marketing strategy of each cooperative

This principle requires the cooperative to:

- Carefully study the needs of the market and each type of customer to have a reasonable production plan

- Cooperatives must master the life cycle of each product to always innovate product strategies to adapt to the ever-changing market

- Promote marketing, product introduction, marketing, and advertising to expand markets, increase consumption, and attract more customers

- Strengthening the cultural and ethical factors in business, civility in transactions, selling honestly with what was advertised to increase the prestige of the cooperative in the market and attaching importance to the safety factor food safety, safety for human health for products

2.1.3.3 Effective and realistic

In this day and age, in the world as well as in our country, there are no simple economic or social problems The economy and society are closely intertwined, becoming a socio-economic issue Therefore, in business, economic efficiency is always associated with social efficiency, it becomes a principle in production and business activities in general and production and business of cooperatives in particular

This principle requires the cooperative to operate a business with high profits, achieve its goals in a long and safe time, and ensure that the income of employees is commensurate with their labor and efficiency With the such effective operation, the cooperative can have funds to spend on activities on protecting the surrounding ecological environment and cleaning the environment in the cooperative, improving the level of science, technology, culture, etc Traditionally, care about health protection for workers

This principle requires cooperative leaders to minimize the possible risks to the cooperative Risks to cooperatives depend on the extent that they have a large, small,

long, or short impact on their socioeconomic performance Sometimes, severe damage can lead to bankruptcy of the cooperative Accepting competition in business is also accepting risks and risks, which puts cooperative owners needing to look to insurance companies, through insurance contracts to keep a certain level of risk certain security in your business

2.1.3.4 Specialization

It is a principle that requires the management of cooperatives to be managed by people with expertise, training, experience, and ability to achieve the organization's goals most effectively To have these qualities and capabilities requires managers to make constant efforts, and accumulate experiences for themselves, from which they can improve the performance of the cooperative In addition, managers need to find highly skilled cadres, master the professional expertise in their positions and assign them to work according to the correct positions in the production and management machinery of the cooperative as a new object to improve the performance of the cooperative

2.1.3.5 Harmonious combination of benefits

Economic benefits are the basic driving force, a tool that always associates employees with work, with the collective, as the ultimate goal of business

In business, it is required that cooperatives handle satisfactorily and rationally the organic relationship between the interests related to the existence and development of the cooperative There are interests inside the cooperative and interests outside the

cooperative, so in the process of operation, the cooperative leader should not only pay attention to the interests inside the cooperative but also pay attention to the interests outside the cooperative After all, dealing well with external interests in the relationship with cooperatives is to keep and develop longer-term than internal interests The benefits related to the operation of the cooperative are:

- The interests of employees and members of the cooperative are the most important Cooperatives in the process of production and business need to ensure sufficient working conditions for employees and members, they are paid high wages when they achieve high work results, creating many benefits for the cooperative In contrast, cooperatives pay less to those to work less efficiently As a result, a civilized and close bond between the workforce is created, creating trust and an enthusiastic working spirit for employees in the cooperative

- The benefits of customers are reflected in the buyer's requirements for the cooperative in terms of specifications, product quality, commodity prices, service methods, and after-sales policies

- The interests of the state and society are the tax obligations, and the environment The legal obligations and the civic responsibility of the collective labor in the cooperative that the cooperative must perform

- The interests of customers are the interests of organizations or individuals participating in the input supply of the cooperative In this relationship, it is generally an equal exchange of equal value between buyers and sellers in the market There are

customers of the cooperative operating in exclusive fields such as electricity, water, post, and telecommunications Therefore, the interests of the parties must be satisfactorily resolved, and the long-term and stable relationship between the parties must be maintained

In the production and business process of the cooperative, because there are so many types of benefits, it is required that the leaders of the cooperative need to know a harmonious combination of interests Of course, this combination process requires the dynamism, creativity, and business art of cooperative leaders in dealing with internal and external economic benefits following the specific conditions of the cooperative

2.1.3.6 Always under surveillance

Doing business in today's market mechanism, cooperatives have to face fierce competition from other cooperatives and businesses Therefore, cooperatives need to have appropriate policies in the business process, always know to keep their intentions and business potentials hidden, and prevent all competitors All showiness, subjectivity, arrogance, and recklessness in business will be weaknesses for opponents to exploit

In addition, the cooperative is also monitored by officials of the State's inspection and control agencies before any sudden development of the cooperative, they often come to verify and handle if there are violations of the law Therefore, cooperatives need to keep their intentions and potentials private, and strictly organize the process of collecting, processing, preserving, and using the information in the cooperative Develop regulations

that clearly define the rights and responsibilities of for those who manage and use data and information in the cooperative

2.1.3.7 Know how to take advantage of opportunities and the business environment

The production and business process of the cooperative is always placed in a dynamic environment, with the interaction of many different factors In the process of this impact, some factors negatively affect the cooperative, requiring the cooperative to avoid, but some factors affect the cooperative well, which are opportunities that if the cooperative does not know how to take advantage used, will turn into a challenge for the cooperative During the operation of the cooperative, it is necessary to know how to exploit beneficial information from all sources, especially information technology, new technology, and especially the fluctuations in management policies planned by the authorities out for timely handling

In the two factors "position" and "force" of the cooperative Force is understood as the potential and internal resources of the cooperative, which are the factors of capital, science and technology, and human resources… If the cooperative has strong resources for development, it is a strength that is difficult to beat, but a good manager not only knows how to take advantage of his strong resources but also knows how to take advantage of the factors other can help the cooperative survive and develop in a sustainably at "position"

“Force” is understood as the relationship of the cooperative in the business environment through individuals outside the cooperative with whom the cooperative has a good relationship to use and exploit Having a good relationship, the cooperative will get the necessary information for its development In addition, cooperatives must also know how to take advantage of the opportunities that the business environment brings, that is, the incentives in the tax system, in terms of capital or the amendment of the legal system, policies, and administrative procedures transparency and convenience for cooperatives

2.2 Practical basis

2.2.1 Situation of tea production in Vietnam

According to statistics of the Vietnam Tea Association, by 2020, our country has 34 provinces and cities growing tea with a stable total area of 130 thousand hectares, the average yield is about 8.0 tons/ha, and the output of dry tea is about 192 thousand tons.[18]

Tea is grown mainly in the Northern Midlands and Mountains, accounting for about 70% of the country's tea-growing area; next is the Central Highlands with about 19%; The North Central and Central Coast regions have tea area accounting for 7.0%, and the Northern Delta region 4.0% Some localities have large tea areas: Thai Nguyen (22.3 thousand ha), Ha Giang (21.5 thousand ha), Phu Tho (16.1 thousand ha),and Lam Dong (10.8 thousand ha) [18]