Final report subject distribution channel topic bapi distribution channel strategy

Dinh Van Loc - General Director of BaPi Hoang Anh Gia Lai, the above output only reaches 1% to 2% of the pork demand of the Vietnamese market.. At the same time, BaPi also introduced mea

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES — INFORMATION TECHNOLOGY FACULTY OF BUSINESS ADMINISTRAION

MARKETING RESEARCH

HUFLIT

FINAL REPORT

SUBJECT: DISTRIBUTION CHANNEL TOPIC: BAPI DISTRIBUTION CHANNEL

STRATEGY

Vu Thanh Trung 19DH480288

Course:20 19-2023

HCMC, December / 2022

Table of contents

T Untroduction ooo .e cee ceccccccccececcsecceceenenseececeentseseceesennseeccesentnseceesesnscseeeentnteeeeces

Il Supply chain strategy of BAPI

2.1 Efficiency of supply chain

2.2 Distribution network design

2.3 Transportation network design

im @ i0 0 cecccccccccccesnccscceeccentscceceesecnssececeennsasececesentseseceesnensceseeentseaees RefÍerences -cccccSs2 se

List of figures/ tables

II 000572035015 Fieure 2 BAPÏ's baFtHi€T - 12011211 22111211151 1211121111 1110111111 511111 1111011101118 kg Figure 3 Distributor Storage with Last Mile DeÌivery 2c 222221 222xe2

li 00: ì.(00 1.2 0n e=

Table 1 Linking Product Characteristics and Customer Preferences to Network

I Introduction

We are delighted to launch BAPI as a Vietnamese product -diversed-indsss-indss- indss-indss-indss-ad-indreds-catesddlings the extent of one's knowledge ad (HCMC) BAPI pork 1s a type of pig bred in a closed process with bananas as the primary food source, resulting in meat that is tasty, healthy, and safe Mr Doan Nguyen Duc, Chairman of the HAGL Group, guarantees that the quality of HAGL's banana-eating pigs meets the "3 nos" criterion: There will be no antibiotics, no weight gainer, no animal protein HAGL is planning to sell 300,000-400,000 pigs to eat bananas by

2022 The estimated number of sales in 2023 is one million." Mr Duc also said

W BAP!

THUC PHAM TU TAM

To accomplish the Figure 1 BAPI's logo aforementioned aim as well as the following goals BAPI must conduct research and establish a product distribution channel plan for Vietnam BAPI's goods are currently available both online and offline They need to fix several challenges if they wish to expand and take the brand farther The first is to explicitly describe the development technique, whether responsiveness or efficiency in supply chain management Whichever is most appropriate for the business The next step is to build a network of parallel processes between product distribution and transportation These two factors, together with product quality and a proper marketing approach, will be the final solution for BAPI's desire to develop its brand

II Supply chain strategy of BAPI

2.1 Efficiency of supply chain

Mr Dinh Van Loc - General Director of Bapi Hoang Anh Gia Lai said that because their pork output is not significant compared to market demand, they are not afraid of not selling out However, in order to build a distribution channel how to effectively consume - sell out in a short time and do not discard any parts of the pig

According to the latest financial report, in October 2022, the pork production of BaP - Hoang Anh Gia Lai is about 36,644 pigs In 2023, they plan to increase their pig herd

to 1 million heads And according to Mr Dinh Van Loc - General Director of BaPi Hoang Anh Gia Lai, the above output only reaches 1% to 2% of the pork demand of the Vietnamese market That is, this brand will not be too worried about not selling Efficiency of the supply chain in action:

Efficiency raises revenues and lowers costs across your entire business, but a strong supply chain can particularly help your bottom line With a strong supply chain, your things reach their destination in the most cost-effective way possible In today's global business, this is essential Your supply chain costs make up a large amount of your overall costs, which are reflected in the final price you charge customers Your ability

to successfully compete with other companies providing equivalent products will be significantly impacted if your supply chain boosts the price of your finished product needlessly

Simply said, if your rivals have a more effective supply chain than you do, they will

be able to sell the same goods for less

- Signs of an efficient supply chain:

+ Optimization: To make the most of your current infrastructure, this can involve optimizing your shipping routes, warehouse locations, staffing levels, and even your computer network Obtain yours Your assets are wasted when warehouses are

underused, vehicles are half full, and redundant computer systems are present Specifically, right in November, Bapt HAGL's products will be available at 27 stores

in Ho Chi Minh City, and in December the products will be put into the chain of stores

in the North It is expected that, from now until the end of 2022, Bap1 HAGL aims to bring products into 80-100 stores in Hanoi and Ho Chi Minh City

+ High-quality partners: Third-party logistics partners need to be the best BaP cooperates with Homefarm This is an imported food retail system with products such

as US - Australian beef, fresh salmon, and imported seafood Launched in 2014, after nearly 8 years of operation, Homefarm currently has 200 stores in 3 cities of Hanoi, Hai Phong and Ho Chi Minh City with a large "asset" of customers up to | million people Homefarm's goal is that by the end of 2025, it will operate a system of 1,000 shops In the next five years, Homefarm wants to serve more than 5 million

consumers, open 1,000 stores across all of Vietnam's provinces and cities, and rank among the top 100 businesses with the greatest working environments It also wants to

be the leading provider of food of an international standard BaPi is also preparing to distribute to other small chains like Go! (27 supermarkets) along with Lotte Mart (15 supermarkets), Fresh Market (currently 20 stores in Hanoi)

LE-KY KE

HOMEF

Lễ ký kết hợp tác chiến lược giữa chuỗi siêu thị HomeFarm và Bapi Food

Figure 2 BAPI's partner

+ Inventory management: It is expensive to buy, handle, store, and track an excessive amount of inventory It might be expensive to have too little inventory It may result in pricey last-minute orders, missed manufacturing time, and even irate consumers An effective supply chain strikes the ideal inventory balance BaP1 overcomes this situation by building more factories for the production of industrial products such as rolls, sausages; Build a Central Kitchen to make “ready to cook” products With the ability to process fresh meat into packaged products will help reduce their inventory and create new product lines

+ Customer Satisfaction: Customer happiness is directly correlated with supply chain efficiency It rapidly and affordably gets your goods into the hands of individuals who require them HAGL's BaPi has also launched its own online sales channel, with a delivery radius of 10 km And in the future, Bapi will shorten the delivery range to just 5km, from 30 minutes to | hour to just 30 minutes to return At the same time, BaPi also introduced measures to help consumers order and quickly recetve goods, so that BaPi's meat products are still fresh when they reach users

- The main reasons for their initial success:

+ Bapi Food focuses on 3 product groups: Cool meat group for home consumption; group of products processed at the factory; The product team cooperates with the kitchens to prepare ready-to-eat dishes Set specific goals and consumer products to create an effective strategy and identify target customers

+ Bapi is the first banana-eating pig brand on the market, pioneering in using raw materials from bananas to produce pig feed with an exclusive formula, at Bapi Hoang Anh Gia Lai farms with a large scale Vietnam head

+ BaPi is doing a very good brand - when taking advantage of the love of the Vietnamese people with Bau Duc and Hoang Anh Gia Lai - setting up the distribution system both online and offline quite quickly

2.2 Distribution network design

According to the selling target of Bapi in 2023, we can see that Bapi want to increase the brand awareness They try to appoach more customer and bring the brand name closer to customers From that, the distribution network design which will be the most suitable for Bapi is “Distributor Storage with Last Mile Delivery”

` Factories

Distributor/Retailer Warehouse

+ Là

« HO : ¥,

«° *% ° *,

: *,

+ *

La Vie; Thien Hoa, Dien May Xanh

> Product Flow

“ ennnssnnssannnnsnne > Informafion Flow

Figure 3 Distributor Storage with Last Mile Delivery

Distributor Storage with Last Mile Delivery need the distributor/retailer warehouse to

be closer to customer and have to open more the number of warehouses From opening more stores and placing closer to customers, Bapi will can approach many customers in many differents places Because retailer storage with last mile delivery has a lower level of aggregation than all other choices but retail outlets, it necessitates higher quantities of inventory But with this design, Bapi can create a convinient for their customers in placing and receiving orders

Distributor storage with last mile delivery High demand product +1

Medium demand product 0

Low demand product +

Very low demand product -2

Many products sources +1

High product value 0

Quick desired response +1

High product variety 0

Low customer effort +2

Table 1 Linking Product Characteristics and Customer Preferences to Network Design

+2: very suitable; 0: neutral; -2: very unsuitable From the above table, we can see the factors like “High demand product”, “Many product sources” that get the suitable rate for Bapi, because the products of Bapi are mostly fresh foods and appear in every meal of Vietnamese people, so with this rate which is very suitable for Bapi Food In addition, 2 other factors are also high rated that are “Quick desired response” and “Low customer effort” that shows us the experience of customers for this design is very good With the quick response, Bapi can help customers to get their order fastly, easy to buy the products which they want Moreover, with the low effort, Bapi Food’s price and product will be easier to approach to Vietnam’s customers and surpassing other brands easily

Distributor storage with last mile

delivery Response Time 2

Product Variety 3

Product Availability 3

Customer Experience 1

Order Visibility 2

Facility & Handling 4

Table 2 Comparative Performance of Delivery Network Designs

1- Strongest vs 6 — weakest performance

On the above table, “Customer Experience” is the strongest factor that throught the

“Information”, “Response Time”, and “Order Visibility” Those factors are rated on number 2 But the weakest of this design is “Facility” and “Transportation” With opening many stores that lead to increase in cost Therefore, pushing selling product is very necessary Although the “Facility” and “Transportation” are 2 weakest

performance, but with the good “Customer Experience” which will solve every problem

To sum up, using the “Distributor Storage with Last Mile Delivery” will help Bapi Food in many factors At first, they can approach more customers by launching many

stores to create the convinient for customers Secondly, Bapi Food will have a medium rate for “Inventory” that will help Bapi have enough storage product to provide All that thing, “Distributor Storage with Last Mile Delivery” will help Bapi to achieve their goal that is launching of new Bapi Food chain nation wide and their corporate meat selling target of 1 million pigs, 10 million chickens and 100,000 Laos cows in

2023

2.3 Transportation network design

According to Jotscroll, a transportation network is an integrated design in which routes connect a number of centers known as nodes (places of unloading and offloading of cargo) The transportation network is the entire system that includes routes and types of transportation: streets, railways, pipes, aqueducts, and power lines And right now, Circuit Network is most likely the greatest fit for BAPI's delivery policy Because this is a network in which every node is linked to every other node and may move between any two towns Because the link is the shortest way, this is the most efficient network This template is the least expensive for the customer, but it is the most expensive for the builder This sort of network is common on roads, particularly in wealthy countries

C

Circuit Network

All points connected to all others

Pearson Education also has another theory that is quite close to the above comment It's the BAPI shipping network, which 1s part of the Shipments via distribution channels using Milk Runs category Orders are received from the factory and distributed to distributors based on truckloads that are run in a circular loop through all distribution channels Including self-delivery within the inner city, if customers are far away, they will combine with a 3rd party carrier to save delivery time for customers and save money for businesses

The two theories mentioned above are essentially the same, as they both talk about the movement of goods between distribution channels and to the point of purchase This makes a lot of sense considering BAPI's product portfolio, which is packaged foods This is a special product that needs to be transported in cold storage with a short transit time i.e same day to keep the freshness of the product This is the main reason for arranging transport units that can run back and forth between warehouses to pick

up goods quickly Moreover, when BAPI's total warehouse allocates goods to distribution channels, the quantity of goods will also be divided equally, not by any type of goods And when someone places an order, the shipping unit can easily go to the nearest receiving address to pick up the goods and deliver to the user Therefore, this policy will help BAPI save shipping costs The combination of taking goods from many suppliers at the same time will significantly reduce transportation costs and reduce COGS Manufacturers can reduce prices for customers by cutting these costs and still make a profit Moreover, the most important factor is reducing inventory If the production volume is high, the truck will arrange to pick up more goods and vice versa Suppliers can rely on the delivery plan to plan production, not to have too much inventory

BAPI will use Full Truck Load to be able to transport goods to distribution channels and back to main storage This is because of BAPI's transportation policy, they only focus on distributing goods to San Ha Food, and transporting within the city Therefore, the FTL policy will be applied for inner-city transportation and the Less Truck Load policy to save costs in the most optimal way