TRUONG DAI HOC MO TP.HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLWAYS BRUSSELS SCHOOL MBAVB3
PHAN BAO THUY TRAN
Trang 2EXECUTIVE SUMMARY
AFI is a new start up factory in Vietnam as the pioneer in NDC production, was given business license in 2008 and located at My Phuoc industrial park in Binh Duong Province The company is the joint-venture of ACC and Vinamilk, the first NDC producer in Vietnam to invest modern technologies from Europe
Giving the fact that there are huge opportunities in Vietnam for NDC products especially in instant coffee segmentation, it is the right time for AFI to make an investment in building the factory to meet the local market demand on NDC which is imported from oversea so far As the pioneer in NDC, it is always difficult to penetrate into the market to build up the brand name and can gain market share from existing imported NDC competitors The thesis then goes deeply into analyzing the internal and extemal environment of the company to find the best marketing strategies for the company
The thesis conducts an external environment assessment to figure out the opportunities and threats Following the external assessment, an internal environment analysis is conducted
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to illustrate the strengths and weakness of the company The 4Ps strategy is chosen to build up marketing strategies for AFI based on the assessment of the company‘s SWOT
Making the thesis more realistic and result-oriented, a customer survey and a depth interview of top management, salesperson in AFI and ACC have been conducted The results of the surveys and information collected are consolidated and refer to the company SWOT’s analysis to figure out 4Ps strategies and some recommendations have been suggested to build up marketing strategies for the company
Trang 3TABLE OF CONTENT
COMMITIMMENT so «ch TH TH HH ng TH TT nà Hà ng T414 8031491414458 i ACKNOWLEDGEMENTS - nh HH 2E HH nga H4 rat ii EXECUTIVE SUMMARY càng HH HH 00 4114110151101 000178 iii IV.Ÿ102209722600/0270007575551.1.1 iv LIST OF ABBREVIATIONS .ccsssssrsscasssossenesensseceseuecssescesecsscersssasnesencersessonseearseessnronanenes vii LIST OF EIGURLES << Ăn T1 0800108408 00018.56 1800171000870 005 viii LIST OF TABLUES -s<- 52th nang 01100 80 4841048 T8 400-1.81100-040154 10 ix INTRODUCTIONN - 5n HH n0 10 H004 0501070016001100040100078 1 RATIONALE OE THE PRO.JECTT óc <6< 9 2.22141111128140 102013 083719440040 500 1 PROBLEM STATEMENT .scssssssssssssssssssssssccasssneensreosassenssensesesssassssnseseneonsvocsnssnatsseansssesates 2 Ig:403)000/29):3/20u0A2715515155851.111 2 PROJECT QUESTION < ánh H02 HH HH4 HH ng T008 080840040re 2 SCOPE AND LIMITATION OF PRO.JECTT «<< + Sen nen rhemeresnrera 3 SIGNIEFICANT OF THE PROJECT TT 11 n00nnà 3 STUDY METHODOLOOY con HH HH H1000003 1040101511 T1000010200880100208 54 3 CONCEPTUAL PFRAMEWORE HH HH ng gu 1á 80014001 4.0014 3 SAMPLING e9 ng ng 11480 00814480020111240140.01202000200102402047075004 919 4 STRUCTURE OF THE PRO.TECTT -. - 5-5-5 5< 5< ong ng ren 00000 5 CHAPTER I: LITERATURE REVIEẨN HH Hung Ha ng TH nano 6 1.1 Marketing definifion HH HH HH HH HH 6 1.2 Role and function of marketing «0.0.00 csescscseesessestsccseeneneecencneesccasenenneeeeseeeconenenes 6 13 Target consumer, market segmentation and positioning -. -< + 7
1.4 Customer 8 6n 8
1.5 Marketing Mix „10
16 SWOT analysis „l1
17 External environmen( analysis
1.8 Internal environment analysis
1.9 Strategy Formulation ccs eeeeceseeneeeetenenseerenasene „12
CHAPTER 2: ANALYSIS OF AFDS EXTERNAL ENVIRONMENT 13
2.1 Introduction of Non-dairy creamer (NDC) - nt HH H Hs rrrey 13 2.1.1 Non-dairy creainer đ€finitIOH HH nh ng ng ch 13 2.1.2 Non-dairy creamer characteristic and its corIpOrI€ïIt sec sec 13
Trang 42.1.3 Non-đairy creamer”s benefits and applicaHO'S -.‹ -cccerrrereerrrrrrerrrre 14
2.2 Macro environment analysis
ZQ.QA Ecomomic factors ccccccscsscscsscseccssscsssecssscsessetssescsusscatsccerseacsascsesesacacsenessereeessnestens 15 2.2.2 Demographic and income .cccecsscsessecresssesesssentseaesesesnsescanesanesssnsesersievereavaces 16
2.2.3 Soclal-culturalL «+ nhe L6
2.2.4 Food industry OV€FVICW ceeeeee „17
2.2.5 Beverage and drinking OVeTVICW ve „.L7 2.2.6 Coffee outlook n2 HH 2221441422211 18 18 2.2.7 SWOT analysis ofbeverage industry In Vietnam c cxccserrererrrrrrre 18 2.3 Micro environmenft anAÌySÏS các non 2212121124442 014 012141111112 1111k rree 20 2.3.1 Non-dairy creamer market overview in Vietnam - ‹c«xexverieserrrieiee 20 2.3.2 Competitors analySIS ch 10.1211 H1 mm.n 21 2.3.3 Cusfomer analySIS SH tưng 312441 T16 25 2.3.4 Buying behaviOr -cc Sen HH1 m1 T.111171.A2.11 27 2.3.5 Supplier analySiS -cs+cccr chư 12401411.141 1014011 10 28
CHAPTER 3: ANALYSIS OF AFI?S§ INTERNAB ENVIRONMENT "— 29
3.1 Introduction 6f AFÍÌ 22H HT 1g HH 110 tr tk 29 3.I.1- AFT hisfOTW à S2Q2nK HH HH H211 11 Teen 29 3.1.2 Stakeholder analySiS - - 7s S2 2+ St E218 H HH HH kg H121 1X 29 3.1.3 Organization SfTUCẨUT€ sen nh 111.1111124 01121172 1 11111 29 3.1.4 Vision & MiSsSion ceecersrerrerrrrrrrrirk 1112.1.11 11.1 e 31
3.1.5 Competitive advantages — 31
3.1.6 Technology «con HH2 .111117111 11.110 32 3.1.7 SWOT analysis cnnnnHH HH ng HH HH2 411111 1171114 cty tere 33
CHAPTER 4: MARKETTING S TRATEGY FOR AFPS NDC PRODUCT 36
4.1 Company Goal - son 12.22 2.1 tre 36 4.2 — Marketing objectiVeS cu cành th, 0t kề 36 4.2.1 Break-even poinl c- c2 11k TT 36 4.2.2 Shorf-term HS HH HH HH 4T 21.01141181171011114 011 111 36
4.2.3 LOmB-term an 36
Trang 54.3.3 Market scpmenl c cà rsee 4.3.4 Target market stratepy 4.3.5 Poslfloning slrafegy cc.cceeeeere 4.4 _ Marketing program - 4.4.1 Product strategy 0.0 4.4.2 Price strafegy chen H2 HH 1 re 4.4.3 Distributlon strafeBy SH HH2 12110117171 AAA Promotlion sIraf€BV sen HH HH 010 E181 net 43 45 Budget and Implementation plan Set Hưmirrớ 46
REEERENNCES «vn nh nh TH 3 mong kh 010198411 70000148410004000012800040080000 49 APPENDIYX 5c nĂ ng TH TH TA 3 101011 1334680030T10081100101400008000114448000040020000400408e4 50
Trang 6LIST OF ABBREVIATIONS NDC _ Non-dairy creamer
AFI Asia Food Ingredient
ACC Asia Corporation Chemical
BMI Business Monitor International
VNM Vinamilk Company_
GDP Gross Domestic Product
MT Metric tons
R&D Research and Development
UNCTAD United Nation Conference on Trade and Development
WTO World Trade Organization
USDA United States Department of Agriculture
SME Small and Medium Enterprise
GSO General Statistics Office
Trang 7
LIST OF FIGURES
Figure À: Thes1s mOdeÏ + 7< <1 HH HH HH HH TH T1 HT HH che 4 Figure B: ProJject rescarch DTOC€SS c2 HH HH HH HH rời 4 Figure 1.1: A model ofbusiness buyer behaViOUT vs HH 4x khe xe 9 Eigure 1.2: The four P components of the marketing II 11 Figure 2.1: The relation of GDP and inflation in Vietnam (2004-2010) 15 Figure 2.2: The quantity of NDC were imported from 2005-20 Í0 -c s.ccee 21 Figure 2.3: Lanscape of main competitors’market share, .-ccc se nseceeccec 24 Figure 2.4: The marketshare of using NDC from end-consum€[s - -ccccc«e 26 Figure 2.5: The evaluation result of NDC suppliers from custorn€rs 28 Figure 3.1: Organization chart Of À FÌ - - cóc LH HH th H 7v, 30 Figure 3.2: The process of producing NDC ố.ẻốố 33 Figure 4.1: The marketshare of NDC consumption by application -.« xxcee 39
Trang 8LIST OF TABLES Table 1.1: Table 2.1: Table 2.2: Table 2.3: Table 2.4: Table 2.5: Table 2.6: Table 3.1: Table 4.1: Table 4.2: Table 4.3: Table 4.4: Table 4.5:
Steps in a business buy1np €CISI0H sen trtrrerirettrirrsrrerrrrrrrrir 10 Ingredients constitute non-dalrV Cr€aIN€T co cành 1e 14 Food consumptron indicators - Data & FOreCaSfS eerree tre 17 Food and Beverage commercial indicators ~ Data & Forecasfs 17
Production and consumption of coffee in Vietnam - -.-«sesresererreerie 18
Total demand of NDC was imported monthly ín 2010Ơ «.- sexy 23 The total demand of NDC fiom end-cus†OIm€fS .- - set s4srsterererrer 26 Summary of SWOT analySÌS -ó- sscSosv vn HH 01L 00344341114014 14 1 2B 35 Break-event point ssasusenenseceseasscaesaueeuevassaccestguerensaaevaescsacsersevesnasseesacasseesscsenerey eres 36 Segmentation of NDC market by product application 00 essssssseeeseecetesesteneens 38 Net cost price for NDC production sovecntrecneninnnnnrnrneenretneuies 41 The sclling pice om some NDC suppliers in Vietnam -.‹ + c+esserees 42 Implementation pÏAT1 - s2 +++2+ 2+ tt n tt HH 11017111444 1 x00 47
Trang 9INTRODUCTION
Vietnam with population of 85 million has been one of the fastest growing economies in
the world for over 5 years and will strive to reach to an annual GDP growth rate of 7-8%
on average in 2011-2015 Growth over the past 5 years has boosted household incomes in Hochiminh City and Ha noi and established a middle income group in these two city Joined the WTO in 01/2007, Vietnam have many chances to participate in market access liberalisation under its ASEAN Free Trade Area commitments It is currently in the process of introducing WTO compliant import regulations and systems and is phasing in its WTO bound tariffs over the period from 2007 to 2012 This process will provide new and increasing opportunities for food processors and exporters over the next 5 years and into the longer term
Vietnam’s Non-dairy creamer (NDC) product consumption grew from about 4,900MT of NDC in 2005 to 12,000MT in 2009 The growth rate was estimated at about 25-30% per annum The main source of this product in Vietnam market is imported from Thai Lan, Indonesia, Malaysia, China during many last years ,
Over the next 5 years, it is forecast to be the ASEAN region’s fastest growing economy, with rates of between 6% and 8% per annum This growth will be driven by new foreign investment in businesses that create new jobs for the Vietnamese, and positively booming local demand for consumer products, including processed food and drinks It will further boost household incomes in Vietnam that will result in another boom in demand for locally produced and imported raw materials
Recognition the needs of producing domestic raw materials will develop in next 5 years, AFI saw through this opportunity and decided to invest the first factory to produce NDC by modem technology worldwide With the aiming to meet local demand of NDC, AFI also want to utilize some local advantages such as labor force, tax preference to bring the benefits to Vietnamese
This study was performed to identify competitors, customers, market environment and build the marketing strategy for NDC’s development from 2011-2015
RATIONALE OF THE PROJECT
Trang 10creamer (NDC) used for foods and beverage such as instant coffee, milk tea, chocolate drink, bakery, soup etc
In Vietnam, the demand of consuming food and beverage is increased year by year In 2010, around 1,500 to 2,000 MT/month imported NDC are consumed in Vietnam market At present, all NDC used by local companies are imported from Thailand, China, Indonesia and Malaysia With such growing demand for NDC, the establishment of a local company to produce NDC is seen to be a great success
Therefore, aiming to penetrate into the market and sustain in long term, the requirement of AFI must have the marketing strategy to build awareness and company brand name to customer's mind
PROBLEM STATEMENT
As a pioneer manufacturer: producing NDC in Vietnam, AFI should be faced many
challenges at the beginning because very few of customers know about AFI’s brand name
and product quality Market awareness is the biggest problem and challenges for AFI as a
mission have to succeed The company has to ,fight against many competitors who
experienced long time ago in Vietnam market such as Kerry, Kievit, Thailand and Chinese
company Therefore, AFI has to build the marketing strategy to penetrate the NDC market
and make customers to recognize and acknowledge the AFI’s image
PROJECT OBJECTIVE
The purpose of this study is to building the marketing strategy for developing NDC in Vietnam market and positioning brand awareness to target market segmentation in 2011-
2015
PROJECT QUESTION
This project has to define the following questions:
- What is the competitive environment of NDC market in Vietnam?
- Who are the key players driving the market? What are their SWOT?
- Who are the company target customers? What are their behaviours, buying decision and process?
- How to build a marketing strategy to position AFI’s brand awareness?
Trang 11SCOPE AND LIMITATION OF PROJECT
With the limitation of time, I just focus on building the marketing strategy for AFI’s Non dairy creamer in B2B customers, particularly manufacturers in food and beverage
SIGNIFICANT OF THE PROJECT
This particular project have important role to the managements and sales team of AFI It
can help to have better understanding of the external and internal environment, competitor,
market demand, customer’s behavior toward non-dairy creamer product
STUDY METHODOLOGY
The study was conducted by qualitative and quantitative approach Data sources are collected in both primary and secondary data
Secondary data on food and beverage industry, competitors, market demand of NDC is
gathered from food journals, magazine, Internet web sites, Vietnam statistical year book,
General Statistic Office, import statictis, sales review reports from ACC, internal data and other sources This information help to understand more about external environment,
market trends ‘
Primary data was collected by in-depth interview and a survey questionnaire The target interviewees for in-depth interview are the top management and sales person from AFI, ACC, Trung Nguyen, Vinacafe The question for qualitative information is described in Appendix 1 with the purpose to identify customer needs, explore perceptions, generate idea and describe behaviour
The quantitative information was conducted by doing survey 30 selective companies in food and beverage producer to understand their business buying behaviour and expectation on NDC product The questionnaire also aim to define the position of competitors and then help to build a suitable launching marketing strategy
CONCEPTUAL FRAMEWORK
Trang 12Figure A: Thesis model
Source: Kotler et al (2002, p.29)
The marketing research process also follow: define the problem (set research objective);
develop research plan (identify needed data, determine how to collect data); collect
relevant infomation (qualitative, quantitative); develop findings (analyze data, present result); take marketing actions (implement recommendations, evaluate results)
Marketing research process as following:
Figure B: Project research process 3 | Take Develop WỈ Marketing Collect relevant ƒ information là Define the Develop findings Dinh) TH TẾ 0070), actions SAMPLING
Characteristics of data sample are the participants for the survey are identified and selected on the following criteria:
- For conducting questionnaire survey, customers or companies have consumed Non-dairy
creamer product such as purchasing department, R&D department, manager from some company in coffee and food manufacturers such as Trung Nguyen, Vinacafe, Nutifood,
Bibica, Bich co, ect
Trang 13- This project is studied in B2B, so the sample size was able to conducted with 30 selective companies for questionnaire survey
STRUCTURE OF THE PROJECT
This study report is presented in four chapters as follow:
Introduction part provides a brief introduction to food and beverage industry, overview of AFI company, the project problem, project objectives, scope of the study and structure of the study
Chapter 1 - Literature Review provides some conceptual definitions of marketing and its function Also it define segment and target market, customer behavior Introduction of marketing mix and strategy formulation which can be applied during the study
Chapter 2 — Analysis of AFI’s external environment introduces non-dairy creamer product and its benefit as well as application Then it describe extemal macro environment analysis including GDP, income, culture, food and beverage overview, coffee, SWOT industrial analysis In micro environment analysis, it give information of competitive analysis customer and supplier analysis ,
Chapter 3 — Analysis of AFI’s internal environment presents the description of AFI organization structure, vision, mission, competitive advantage, SWOT analysis
Trang 14CHAPTER I: LITERATURE REVIEW I.1 Marketing definition
Marketing is not solely advertising or selling Real marketing is less about selling and more about knowing what to make (Philip koler, 1999, p.9)
Marketing is the delivery of customer satisfaction at a profit The goal of marketing is to attract new customers by promising superior value, and to keep current customers by delivering satisfaction Therefore, marketing must be understood not in the old sense of making a sales-“selling”- but in the new sense of satisfying customer needs
The marketing concept holds that the key to achieving organizational goals consists of the company being more effective than its competitors in creating, delivering, and communicating customer value to its chosen target markets
The marketing management are as the analysis, planning, implementation and control of programmes designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives Thus, marketing management involves managing demand, which in turn involves managing customer relationships 1.2 Role and function of marketing
1.2.1 Function of marketing
Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketing concepts: “Selling focuses on the needs of the seller; marketing on the needs of the buyer Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.” The selling concept takes an inside-out perspective It starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales The marketing concept takes an outside-in perspective It starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and produces profits by satisfying customers
1.2.2 Role of marketing towards corporate
Trang 15serving the needs of important consumer groups Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm's potential to take advantage of them Finally, within individual business units, marketing designs strategies for reaching the unit's objectives
Within each business unit, marketing management determines how to help achieve strategic objectives Marketing plays an important role in strategic planning It provides information and other inputs to help prepare the strategic plan Strategic planning is also the first stage of marketing planning and defines marketing’s role in the organization The strategic plan guides marketing, which must work with other departments in the organization to achieve strategic objectives
Customers are attracted by promises and held by satisfaction Marketing defines the promise and ensures its delivery However, because actual consumer satisfaction is affected by the performance of other departments, a// functions should work together to sense, serve and satisfy customer needs Marketing plays an integrative role in ensuring that all departments work together towards consumer satisfaction
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There are three stages of strategic marketing planning: first, the strategic plan and its implications for marketing; secondly, the marketing process; and thirdly, ways of putting the plan into action
1.3 Target consumer, market segmentation and positioning 1.3.1 Target consumer
To succeed in today's competitive market place, companies must be customer centred - winning customers from competitors by delivering greater value However, before it can satisfy consumers, a company must first understand their needs and wants So, sound marketing requires a careful analysis of consumers
Trang 161.3.2 Market segmentation
If the demand forecast looks good, the company next decides how to enter the market The market consists of many types of customers, products and needs The marketer has to determine which segments offer the best opportunity for achieving company objectives Consumers are grouped in various ways based on geographic factors (countries, regions, cities); demographic factors (sex, age, income, education); psychographic factors (social classes, lifestyles); and behavior factors (purchase occasions, benefits sought, usage rates)
The process of dividing a market into groups of buyers with different needs, characteristics
or behaviour, who might require separate products or marketing mixes, is market segmentation
1.3.3 Positioning
After a company has decided which market segments to enter, it must decide what
‘position’ it wants to occupy in those segments A product's position is the place the product occupies in consumers’ minds If a product were perceived to be exactly like another product on the market, consumers would have no Teason to buy it
Market positioning gives a product a clear, distinctive and desirable place in the minds of
target consumers compared with competing products, Marketers plan positions that
distinguish their products from competing brands and give them the greatest strategic advantage in their target markets
1.4 Customer buying behavior 1.4.1 Definition
All buying decisions, whether personal or on behalf of an organisation, are made by people, and, though it may often seem to be irrational, buying behaviour is , on the whole,
purposeful and goal-directed Understanding the buying behaviour of its customers is crucial to a firm's success The firm that can anticipate how its potential customers will
respond to its marketing strategies will have a competitive advantage
Generally, buyers are classified either as consumers or business buyers Consumer
behaviour has been defined by Summers et al (2003, p 24) as:
Processes a consumer uses to make purchase decisions as well as to use and dispose of
Trang 17Contrast this definition with that which Summers et al (2003, p 67) provide for business- to-business marketing:
The marketing of goods and services to individuals and organizations for purposes other than personal consumption So the basic distinction between the two is whether or not the purchase is for personal consumption
1.4.2 B2B Business buying processes
Kotler provided a useful model of business buyer behaviour as below Figure 1.1: A model of business buyer behaviour Environment
The organisation Buyet ESDONSES
marketing ther strraHi The buying certre Product or service choita
stirrat bari Supplier eboice
i
deosien Order quantities
process \ Delivery terms and tirnes
eee rottical | (interpersonal and Service terms
Fisce cultura! individuat influences) Payment terms
promotion techne legicat
peone ounpetitive (Grganisat ional
pmocesses Influences)
Source: Kotler et al (2004, p 288)
The buying centre concept is useful in understanding the various influences on the business buying process The business marketer, such as a port, terminal or shipping service, needs to be aware that in any purchasing situation there is not only the buyer, but users, influencers, deciders and information gatekeepers as well These are discussed for you on pages 292-293 of Kotler et al (2004) All these roles comprise the buying centre,
and its size and composition vary depending on the nature of the purchase as well as the
type of business
The buying decision process has a number of major steps that vary from text to text The following table, as you will observe, has close counterparts to consumer buying:
Trang 18Table 1.1: Steps in a business buying decision
1 | Anticipate or recognize a problem/need/opportunity and a general solution
2 | Determine the characteristics and quantity of a needed good or service 3 | Describe precise product specifications and critical needs 4 | Search for and qualification of potential sources 5 | Acquisition and analysis of proposals 6 | Evaluation of proposals and selection of suppliers
| 7 Selection of an order routine
8 | Performance feedback and evaluation L L— Source: Based on Boone and Kurtz (2005, pp 299-301) 1.5 Marketing Mix
Marketing mix according to Kotler er al (2001, p13) is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market As shown in Figure 4, McCarthy classified these tools into four broad groups that he called the four Ps of marketing: product, price, place, and promotion
Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs.14
Four Ps Four Cs
Product > Customer solution Price > Customer cost
Place > Convenience
Promotion > Communication
Winning companies are those that meet customer needs economically and conveniently and with effective communication
Trang 19Figure 1 2: The four P components of the marketing mix Marketing Mix Product Place Product variety Channels Quality Ti rk Coveroge Design arget market Assortments Features Locations Brand name Inventory Pockoai
Packaging Price Promotion Trans
Services List price Sales promotion
Warranties Discounts Advertising
Returns Allowances Sales force
Payment period Public relations
Gedit terms Direct marketing
1.6 SWOT analysis
The SWOT analysis is the overall evaluation of a business’s strengths, weaknesses, opportunities, and threats SWOT analysis consists of an anlysis of external and internal
environments
1.7 External environment analysis
There are many factors affect of company business to earn profit, a business unit has to monitor key macroenvironment forces (demographiceconomic, technological, political- legal and social-cultural) and microenvironment factors (customers, competitors, distributors and suppliers)
1.8 Internal environment analysis
It is one thing to discern attractive opportunities and another to have the competencies to
succeed in these opportunities Thus, each business needs to periodically evaluate its
internal strengths and weaknesses in marketing, financial, manufacturing, and organizational competencies Cfearly, the business does not have to correct all of its weaknesses, nor should it gloat about all of its strengths The big question is whether the
Trang 20Figure 1 2: The four P components of the marketing mix Marketing Mix
Product Place
Product variety Chonnek
aie Target market hờn
Features Locations
Brand name Inventory
Packagi T rt
Sues Price Promotion ngục
Services List price Sales promotion
Warranties Discounts Advertising
Returns Allowances Sales force
Payment period Public relations
Credit terms Direct morketing
1.6 SWOT analysis
The SWOT analysis is the overall evaluation of a business’s strengths, weaknesses, opportunities, and threats SWOT analysis consists of an anlysis of external and internal
environments
1.7 External environment analysis
There are many factors affect of company business to earn profit, a business unit has to monitor key macroenvironment forces (demographiceconomic, technological, political- legal and social-cultural) and microenvironment factors (customers, competitors, distributors and suppliers)
1.8 Internal environment analysis
It is one thing to discern attractive opportunities and another to have the competencies to
succeed in these opportunities Thus, each business needs to periodically evaluate its
internal strengths and weaknesses in marketing, financial, manufacturing, and
organizational competencies Clearly, the business does not have to correct all of its
Trang 21business should limit itself to those opportunities in which it possesses the required strengths or consider better opportunities to acquire or develop certain strengths
1.9 Strategy Formulation
According to Kolter et al (2001, p.31), goals indicate what a business unit wants to achieve; strategy describes the game plan for achieving those goals Every business strategy consists of a marketing strategy plus a compatible technology strategy and sourcing strategy Although many types of marketing strategies are available, Michael Porter has condensed them into three generic types that provide a good starting point for strategic thinking: overall cost leadership, differentiation, or focus
> Overall cost leadership: Here the business works to achieve the lowest production and
distribution costs so that it can price lower than competitors and win more market share Firms pursuing this strategy must be good at engineering, purchasing, manufacturing, and physical distribution; they need less skill in marketing
> Differentiation: Here the business concentrates on achieving superior performance in an important customer benefit area, such as being the leader in service, quality, style, or technology—but not leading in all of these things
» Focus: Here the business focuses on one or more narrow market segments, getting to know these segments intimately and pursuing either cost leadership or differentiation within the target segment
Trang 22CHAPTER 2: ANALYSIS OF AFV?’S EXTERNAL ENVIRONMENT 2.1 Introduction of Non-dairy creamer (NDC)
2.1.1 Non-dairy creamer definition
Non Dairy creamer are liquid or granular substances intended to subsitute for milk or creain as an additive to coffee or other beverages They do not contain lactose and are therefore not dairy products, is suitable for some people are allergic They impart a desirable cream-like flavour, as well as the desired body, flavour and colour to the food
Non-dairy creamers have several advantages over the dairybased creamers, including:
* Longer shelf-life
» Ease of storage and handling * Lower cost of production
2.1.2 Non-dairy creamer characteristic and its component
Nestle coffee-mate, introduced in 1961, was the first powdered non-dairy creamer To replicate the mouthfeel of milk fats, non-dairy creanfers often contain vegetable-based fats
Each ingredient in a non-dairy creamer formulation serves a characteristic function which,
when combined, optimally assists in producing a superior non-dairy creamer The functions of each major component are briefly described below:
Vegetable fat: generally from 20-80%, used in place of milkfat Give the creamy texture,
tich flavor and opacity
Sweeteners: Corn syrup, glucose syrup or maltodextrins are most commonly used
Sodium caseinate: A milk protein which gives opacity, solubility, heat stability, a mild dairy flavour and rich mouth feel
Emulsifiers and stabilisers: Mono- and di-glycerides play the main emulsifying role in non- dairy creamers; helping to create a simple oil-in-water emulsion Lecithin is also often used
in powdered creamers, making the product soluble even in lukewarm beverages
This is percentage of the main ingredients to produce NDC:
Trang 23Table 2.1: Ingredients constitute non-dairy creamer Ingredient Tapioca Syrup DE 24-29 HPKO-Hydrogenated Palm Kernel Oil Sodium caseinate 2.0 Dipotassium Phosphate 2.0 Sodium Tri-Polyphosphate SỐ DMG 40 °° °°, [PATEM [0.1 ———————] | Sodium Alumino Silicate | 0.63 Sodium Chloride 0.2 Water 3 Source: www.americanpalmoil.com/publications/creamer 2.1.3 Non-dairy creamer’s benefits and applications s Benefits
Non-dairy creamers substitute for milk or cream, primarily in hot beverages such as coffee and tea Advantages of non-dairy creamers include their convenient packaging, long shelf- life and the fact they contain no lactose or milk sugar, an important feature for lactose-
intolerant individuals
Unlike milk and cream products from animals, non-dairy creamers contain no cholesterol
Cholesterol builds up on the inside of your arteries, contributing to blockages that lead to
heart attacks While some factors such as genetics contribute to your overall cholesterol level, eating cholesterol-rich foods, such as cream or high-fat milk, can also increase your levels If you have high cholesterol, your doctor may recommend eating less fat and
cholesterol from meat and dairy products to help lower it Substituting the cream or milk in your coffee with a cholesterol-free non-dairy creamers can help lower your cholesterol
levels Most major brands of non-dairy creamers, such as Coffee-Mate, Coffee-Rich, Safeway brand, Hood, Hannaford and Anthem are all cholesterol-free
Applications
Non-dairy creamers are used in a wide range of applications, besides their traditional use
Trang 24include of 18-20% of NDC It is also being used more and more in many other products as
well such as formulated milk powder, ice cream, bakery, confectionary industry like candy, chocolate, pudding Non dairy creamer even can be used in the industry of instant noodle, instant food soup seasoning and baked goods
2.2 Macro environment analysis
2.2.1 Economic factors
Vietnam’s gross domestic product (GDP) growth rates in the first nine months of 2010 was posted at 6.52 percent over the same period of last year, according to the statistics released by ministry of planning and investment
Figure 2.1: The relation of GDP and inflation in Vietnam (2004-2010)
GDP growth and Inflation in Vietnam (2004-2010) 84 sa 8.5 25 + 20 Growth (%) OANWATOANDO 2004 2005 2006 2007 2008 2009 2010 (est) Year Source: Vietnam statistics data, www.gso.gov.vn
This is the first time that Vietnam has reported achieving GDP growth rate of over 6.5 percent within this year In details, within the period of January-September, GDP growth in
agriculture, forestry and seafood sector surged by 2.89 percent, industry and construction
up 7.29 percent and services of 7.24 percent
Vietnam's inflation rate this year may stay below 7 percent, below earlier government as forecasted Vietnam government's inflation targets for this year to 8 percent from 7 percent, and the central bank will increase liquidity in the economy by boosting money supply The monthly consumer price index in January-August rose an average 8.61 percent
from a year ago, while annual inflation in August eased to 8.18 percent from 8.19 percent in July and 8.69 percent in June 2010
15
15 | = GDP growth (%)|_
Trang 25Government urged businesses to pay more attention to expanding retail sales in order to stabilize domestic markets in the remaining months of this year and avoid unexpected price changes caused by intermediaries and central bank devaluation of the dong did not affect the country's consumer price index The Vietnamese government has also projected inflation next year at around 7 percent and the economic growth at 7.5 percent
For GDP, Vietnam expects economic growth to pick up from next year The main task for 2010's socio-economic development plan is to try to achieve a GDP growth of 6.5-7 percent Vietnam’s government proposed the gross domestic product targeting for this year be lowered to about 5 percent, although it’s expected to be be a difficult mark to hit as the global economic recession pushed the Southeast Asian country's first quarter GDP growth to its lowest level in years
Last year, GDP growth was 6.2 percent and in 2007 it was 8.5 percent Vietnam is also setting an economic growth target of between 7 and 8 percent a year in the 2011-2015 period, lowering by half a percentage point the floor of the range as compared with its
target for the previous five years Vietnam's economy grew at an average annual rate of 7.5
percent between 1996 and 2005, according to the Ministry of Planning and Investment and
Vietnam government target for gross domestic product growth in the five years from 2006
to 2010 was 7.5 percent to 8 percent
2.2.2 Demographic and income
The feature of today's Vietnam is a young population with high density Household income
in recent years has also been improved, hence the quality of life is higher than before In
the future, Vietnam will become a potential market for branded products of food and
beverage to ensure food safety and sanitation
With average economic growth of 7.3% per year over the past 10 years, the proportion of middle class population is increasing in Vietnam, followed by increasing consumer demand for food According to the reports of BMI, there was more optimistic assessment
about Vietnam's growth that reached 4.4% compared with the initial forecast of 2.9%
Vietnam will return to growth trajectory in 2011 2.2.3 Social-cultural
In today's modern life, people are increasingly busy with more work, so they will tend to choose fast and convenient food and beverage products like instant noodles, coffee, tea etc
Trang 262.2.4 Food industry overview
Business Monitor International (BMI) has studied food consumption data in Vietnam in the second quarter of 2008, together with data on household expenditure from General Statistics Office (GSO) These figures reflect expenses on food and beverage GSO also provided other information sources to have the most accurate assessment of the prospects of food consumption in Vietnam from 2006 to 2014
Table 2.2: Food consumption indicators - Data & Forecasts TT 2006 | 2007| 2008, 2009 | 2010f | 2011f | 2012f | 2013f | 2014f Food consumption (USD billion) 11,23 | 12,75 | 14,6 | 14,35 | 14,68 | 16,75 | 19,13 | 21,75 | 24,75 Food consumption
per capita (USD) 133,1 | 148,9 | 168,3 | 163,1 | 164,6 | 185,3 | 208,8 | 234,3 | 263,1
The total food consumption growth (annual) 13,12 | 13,49 | 14,58 | 6,36 | 7,74 14,19 | 11,16 | 10,62 | 10,58 Growth of food ’ consumption per capita (annual) 11,51 | 11,9 13 | 4,92 |ó,29 12,66 | 9,68 | 9,17 | 9,09 Food consumption | (% GDP) 18,94 | 18,31 | 16,23 15,51 14,92 | 15,14 [15,1 | 14,91 | 14,8 | Excluding beverage consumption e / f - estimated / forecasted data of BMI
Source: General Statistics Office Vietnam, BMI 2.2.5 Beverage and drinking overview
The key elements that positively impact non-alcoholic beverage industry include: economic growth, urbanization process, foreign investment and tourism development Although consumers in Vietnam are still quite interested in healthy lifestyle and despite
Western influences affecting consumption habits, BMI believe that canned non-alcoholic
beverage will gain highest growth in the beverage industry in Vietnam from now to 2014
Trang 272.2.6 Coffee outlook
Though Vietnam is a major exporter of coffee and second only to Brazil, our coffee industry only has advantages in exports while domestic consumption accounts for only a very small proportion of primarily urban However, with the industry's efforts in increasing value and profitability, domestic consumption tends to increase and is predicted to occupy about 10% of total crop output in 2009 The stability of coffee price in the world has created more opportunities for farmers and exporters of coffee in Vietnam, contributing
about 42% of total output in the period 2004 to 2008 Also during this period, domestic
consumption has increased 3 times
Opportunities still open to coffee producers in Vietnam GDP strong growth has boosted
the demand for foods and beverages In addition, Vietnam's population is quite young, so the habit of going to coffee shops is more and more popular BMI is forecasting that the
sales of beverages (including coffee and tea) will continue to rise by 67.6% in value during
the period 2009 to 2014 thanks to people’s consumption habit as well as advertising campaigns and marketing businesses ° Table 2.4: Production and consumption of coffee in Vietnam —T T ——T T | TT 2007 2008 2009 2010? 2011? 2012** Production 14.5 13.666 19.5 18.333 19.67 17.366 (thousand 60kg bag) | | Consumption 618 687 858 900 1064 1101 (thousand 60kg bag) |
Notes: *: estimated; **: forcasted; Sources: USDA, Vicofa, BMP 2.2.7 SWOT analysis of beverage industry in Vietnam
Strengths:
Consumers in Vietnam, especially the young and wealthy, pay more and more attention to
the product brand Currently, the known products of the western countries, with strong
investment in marketing programs and promotions, are very popular in Vietnam market
The luxury urban centers of Hanoi and Ho Chi Minh City is becoming a market of
potential customers and customers are more interested in the quality of the products and
ready to pay more for better healthy drinks and target with branded products
Trang 28Weaknesses
There is great disparity in income between urban and rural areas, creating the difference in consumption based on income
Food processing industry in general is still very fragmented, except in some key areas such as dairy and confectionery
Infrastructure of Vietnam is still weak Roads, railways and ports do not meet the economic growth of the country as well as links with the outside world
Opportunities
Vietnam's joining WTO in January 1/2007 will continue to be profitable for the exporters of Vietnam by gradually removing market barriers and trade restrictions to increase
competition
Large domestic market, increased export opportunities, low labor costs along with the successful privatization of food companies offer many more investment opportunities in Vietnam
The tourism industry which is booming increases profits for all kinds of packaged convenience goods in general, including alcoholic beverages and soft drinks
Consumers’ income increase means that branded beverage products bring more growth opportunities, especially alcoholic beverages and soft drinks
The general trend that consumers worldwide are moving towards is to ensure their health Grasping this opportunity, beverage manufacturers have diversified products that are beneficial to consumer’ health
Challenge
Vietnam's WTO membership is likely to make small companies unable to exist in the marketplace which is increasingly fiercely competitive
The increase in raw material costs affect profitability in the competitive market because the prices of any products are too high which is also difficult to be accepted by the consumers Prolonged macroeconomic instability may cause the authorities to set up resolutions to maintain economic stability, which means that the market becomes less attractive for international investors
Trang 292.3 Micro environment analysis
2.3.1 Non-dairy creamer market overview in Vietnam
Vietnam is quickly becoming a top sourcing destination for the industry’s leading companies and the most rapidly developing market in Asean region As statistic report, ingredients consumption increased by over 40% in Vietnam in the last five years The processed food industry is growing by 28% annually The retail sector is expanding rapidly, fuelled by increasing consumer awareness and purchasing power Therefore, The Vietnamese economy is growing at an impressive 7.2% per annum and 34% of average growth rate in processed food consumption over the last 5 years
The demand for non-dairy creamer is increasing in the world, especially in South East Asia and Vietnam In Vietnam, around 1,500 to 2,000 tons/month imported NDC are consumed in Vietnamese market and the growth rate is 25-10% per annum as the ACC’s internal estimation
Moreover, Vietnam is one of the biggest exporters of instant coffee in over the world Therefore, the demand of NDC for producing expost processing coffee will increase At present, all NDC used by local companies are imported from Thailand, China, Indonesia and Malaysia There’re always a shortage of supplying NDC in domestic Hence, the
demand of NDC will be predicted surely increase in next 5 years and the establishment of a
local company to produce NDC like AFI is seen to be a great opportunity as a pioneer to capture the local market
The data show that consuming quantity of NDC imported from 2005-2010
Trang 30Figure 2.2: The quantity of NDC were imported from 2005-2010 18,000 17,000 16,000 | 14,000 - 11,800 12,000 9,833 10,000 ¬- 8,000 - Zi B NDC Quantity 5,880 (MT) 6,000 - 4,500 4,000 2,000 | 0 4 be s - — 3 © ‹ $ 2 S S © S Ss SP SPS SSP <
Source: Import statistic from ACC
After data survey from ACC’s import statistic in terms of the current NDC which ACC import from Thai Lan, China, Malaysia, there’re dlways shortage of supplying NDC in domestic Hence, the demand of NDC will be predicted surely increase in next 5 years.The establishment of a local company to produce NDC is seen to be a great success
2.3.2 Competitors analysis
There are so many companies producing NDC over the world exporting to Vietnam for
many years Until now, there are about 10 companies providing NDC Some of them are
manufacturers, some are distributors and 1-2 of small companies are produce NDC by
mixing raw materials in manual technology With the present of many NDC’s producers, the level of competition in food industry become more and more fierce in terms of price,
quality and service
Key player have largest market share are Thanh Binh (38%) and SIM (26%)
Thanh Binh is a trading company which is sole distributor for Kerry, supply high-end and good quality of NDC named Kerry Kreem 35, with origin in Malaysia Kerry penetrate into Vietnam market for many years, have close relationship with R&D, purchasing department in Trung Nguyen and some other major food & beverage companies where the consumption output is very high Currently Kerry accounts for the biggest NDC market share of 38% in Vietnam and a well-known brand name Taking the advantage of huge
Trang 31palm oi! source from Malaysia to reduce it raw material cost and gain the big market share compared with the key customers like Trung Nguyen, Bibica
SIM is a sole distributor for Kievit from Indonesia The product brand name is Vana Blanca 35C with best quality compared in market They also have good relationship with top management in Vinacafe, Trung Nguyen Customer uses Vana Blanca product and they -are loyal to it According to the customer behaviour survey, customer using Kievit product are seldom to change new or another products because of good quality as they are concerned that would impact their product quality Kievit — belong to Friesland Campina Group with fine reputation in the food materials industry - exports the products to Viet Nam through S.I.M Co., Ltd exclusively The company has been the silver medalist in the
NDC market with 26% market share in Viet Nam with the key customers such as Vinacafe, Tran Quang
Only Minh Duong is small company producing NDC in Viet Nam with primitive assembly line from China So the products are lowest quality than other branded products and they are penetrating the market with price advantage They gained a low level market of 5% for main purpose of saving cost-in-use 9
Besides the two main competitors, the remain of the market is shared among the other competitors who import the raw materials from Thailand, Malaysia, Singapore, China and
distribute to local manufacturers (such as ACC, Lam Tam Vy, GBCO, Orient, An Huy, G.B.C.O, Negase, Tan Nhat Huong, Huong Lieu Phuong Dong) accounting for less than
30% market share of the product imported from Thailand, Malaysia, China, Indonesia and some from un-known market) They target to the mid and low-end industrial food market with the medium or low quality materials at a much lower price Summarize the market share of other competitor as the following:
Trang 32Table 2.5: Total demand of NDC was imported monthly in 2010 | Average Quantity Percentage Competitor (MT/month) (%) S.1.M (Kievit) 350 26 Thanh Binh (Kerry) 500 38 ACC (Yearrakarn) 150 11 | Lam Tam Vy 50 4 G.B.C.O 50 4 Nagase 25 2 Orient 25 7 2 Phu Sy 15 1 An Huy 50 4 Minh Duong -Ha Noi 60 5 Others 50 4 Total 1325 100 + Source: Import statistic data and-sales review of ACC
AFI sets a target to the high-end market, competing directly to Kerry and Kievit and their distributors in Vietnam - the key competitors but at a more competitive and reasonable price by getting w local labor, materials cost and minimum transportation and warehouse expenses
Trang 34The market of NDC have categorized in 3 levels of quality (Fat level): NDC35 is ranked as premium (Kerry, Kievit), NDC33 is considered as medium (Thai lan, Malaysia), NDC28 and NDC30 is considered as low leve! (China, Vietnam)
The market demand tends to premium category product with high fat level with cheaper price and adaptable making the competition hasher and this is also the great opportunity for AFI to start its factory to produce NDC domestic market in Vietnam
Look at the competitor analysis, there are three main players dominating market counting for 80% of the market The revenue is steady from their own traditional coffee, food and berverage companies
2.3.3 Customer analysis
From application of NDC, it can be used mostly in coffee 3 in 1 which contain 30% of NDC,
in milk tea is 10-15% of NDC and others applications such as bakery, instant noodle,
confectionary, formulated milk powder :
Hence, the key customers are coffee producers which typically are Vina café, Trung Nguyen,
Tran quang These customer account for nearly 70% of NDC consumption in Vietnam market, the others are milk tea, cereal powder and SME tradings
Trang 35Table 2.6: The total demand of NDC from end-customers (2009) Market
Quantity share Product feature
Customer (MT/month) | (%) (% fat level) Main source
Café Trung Nguyen 400 28 | NDC35 Kerry, Kievit
Vina café 400 28 | NDC35 Kievit
Café Tran Quang 120 9 | NDC35 Kievit
Gold Roast 40 3 | NDC33 Singapore
Thai Lan,
Cao Nguyen Xanh 70 5 | NDC33 Malaysia
NDC33,
NDC28, Thai Lan, China,
SME manufacturers 270 | 19 | NDC 30 Vietnam
NDC33, NDC
SME tradings 110 8 | 28 Thai Lan, China
Total 1410 100
Source: From ACC’s data
Trang 362.3.4 Buying behavior
As the literature review, some elements affect business buying behaviour such as product feature, supplier choice, order quantities, commercial term (delivery terms, time, payment terms, service terms)
Based on the survey result as shown in appendix 3, there are 70% of the responses prefer to buy brand name products Among of them, 45% is Kerry (Thanh Binh), 27% is Yearrakarn (ACC), 23% is Kievit (SIM) and 5% is Preserve (Lam Tam Vy)
Figure 2.5: The evaluation result of NDC suppliers from customers Preserve | 5 |
In the consideration of buying decision, the three most important criteria are product quality (33%), price (32%) and services (16%)
Most of the customers are loyal to the supplier they are working with as they trust the quality and the stability of the supply sources Sometime, they expect to search for new qualification from potential sources by taking the technical analysis proposal from other NDC suppliers A sample evaluation process is needed to choose the best NDC suppliers and this process would take around one to two months before customer can announce a selection and start to make an order routine
As the survey result, the quality of NDC products are mainly based on the fat level, color, flavor and taste These elements will make the unique features to generate a product to make it
Trang 37differentiation on the market However, there’s not much difference of product feature, customer just refer to its origin where it was produced and will mainly compete on pricing factor
Commercial model is also important in the decision making process where customer can enjoy a flexible business model with a agree credit term or multi-year agreement contact where NDC supplier can guarantees on the stable quality, material sources and fixed price for a period of time A join cooperation will make the business commitment and will make customer to be loyal to the supplier they chosen
2.3.5 Supplier analysis
Currently, in the early stages of manufacturing operations, all materials from AF] have to be imported from foreign countries to ensure stability and quality of the product The material that accounted for 60% of NDC production formula is Glucose Syrup, which is imported from Thai Sugar company This company is a leading Thai company specializing in manufacturing Glucose Syrup from Tapioca resources '
Another material that accounted for 30% to fabricate NDC is Palm oil (HPKO) which is imported from Cargil company, manufactured in Malaysia Cargil is also a leading company specializing in supplying many kinds of food ingredients Palm oil is one of key materials have more competitive than others country thanks to abundant resources in Malaysia
Other ingredients are those such as Sodium Caseinate imported from Lactoprot - Germany So most of the input materials are from the famous manufacturers and have many experiences in the market The pricing from the companies are very competitive because only AFI fabricates NDC in Vietnam There should be more supplying than demanding which brings advantages in price dealing This is not to mention domestically Glucose Syrup can be produced by Bourbon Tay Ninh Sugar company Therefore, overall speaking material resources to manufacture NDC are quite plentiful
Trang 38CHAPTER 3: ANALYSIS OF AFI’S INTERNAL ENVIRONMENT 3.1 Introduction of AFI
3.1.1 AFI history
Given foundation license in 2008 and located in My Phuoc 3 Industrial Park in Binh Duong Province, this company is the joint-venture of ACC and Vinamilk, the first NDC producer in Vietnam to invest modern technologies from Europe Currently the company is in the process of completing construction, installation of machinery and devices and is expected to put into operation in the beginning of 2011
3.1.2 Stakeholder analysis
AFI is invested by two strategic shareholders who are Asia Chemicals Corporation Joint Stock Company (ACC) accounted for 20% capital and 20% from Vinamilk and the rest 60% are from outside shareholders
ACC is a leading trading company specialized in supplying raw materials and additives for food industry, beverage, bakery, pharmaceutical ect With nearly 10 years experience in the fields of chemicals, ACC will support AFI a lot in distribution as well as understand NDC market in the country
Vinamilk were set up since 1976, they’re the leading producer of dairy products in Vietnam based on sales volume and market share Their products range from core dairy products to value-added dairy product such as liquid milk, powder milk, condensed milk, yogurt, juice, ice cream and cheese In 2008, Vinamilk were one of the top 100 strongest Brand by the Vietnamese Ministry of Industry and Trade in 2006 and voted the top brand in the “ Top Ten High-quality Vietnamese Goods” from 1995 to 2007 Therefore, this was one of the key factors that will lead to successful for the company basing on the reputation of Vinamilk in dairy market
3.1.3 Organization structure
The company is run by general director following the company’s regulation approved from the board of directors AFI is divided into five major departments as sales and marketing, production, procurement, finance, human resource and admin department
Trang 39Sales department is the most important area since this department will be in charge of the company’s bottom line and making the run rate business to maintain the operation to meet at least the break-even point of the month Another key target is to meet the sales quota and the marketing team will work on the execution plan to promote AFI brand name to increase customer’s awareness
The production department will follow the forecast from sales department to prepare for a production to provide to customer and has a safety stock to support the sudden requirement and avoid the shortage that would lead to the production jam to deliver in time orders from customers as forecasted The rest three departments are supporting departments for the whole operation The below table illustrates the organizational structure of the company
Figure 3.1: Organization chart of AFI Boards of I J | Production Procurement ebartme Marketing Department
The board of director will be the highest level to approve all the operation process and assigned the responsibilities for each department to deliver
Trang 40Human resource is the difficult target for AFI to run the factory as they need to do a mass
recruitment starting from sales, technical engineer, chemist, administration and worker to run the whole assemble The training is needed for each department to understand the process and
how to cooperate smoothly between departments as the assembly process Currently, AFI’s management has thorough experienced in this NDC market and could transfer the knowledge to department leader as the trainer program to make the whole operation machine works on its own, AF] management team also has good relationship with customers especially in coffee producers As mentioned above, one of the key advantages of AFI is that the company can enjoy the workforce from ACC, its channel partner, to build the market awareness
In Vietnam, normally the tumover is around 12% or even more for a new start up company where the company is facing some of the new challenge in penetrating the market The most difficulty for AFI is to build and maintain key staffs like sales experts and technical people that can run the production assembly line
3.1.4 Vision & Mission ,
AFI’s vision is to be the leading manufacturers of ingredients for food industry in Vietnam market, especially in supplying NDC for Vietnam
AFI also plans for the second factory of NDC in 2015 based on the sizable market forecast that AFI current production line cannot meet the increase output demand Part of the plan, AF1 will also build a new factory to produce glucose syrup in 2013 to utilize the local materials of Tapioca
3.1.5 Competitive advantages Competitive
The idea comes from the competitive advantage that local manufacturing will benefit the newly established company as following:
¢ Local manufacturing can utilize local low cost labor Data shows that Vietnamese labor market is cheapest in the region
¢ Location in Binh Duong will save a lot of time for transportation and deliver products to
customer nearby My Phuoc 3 Industrial Park, or import raw materials for production