Solutions to improve sales performance of Act Co. (an International Freight Forwarder in Hochiminh City)

TR NG IH CM TP HCM UNIVERSITE LIBRE DE BRUXELLES HOCHIMINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBAVB2 NGUYEN LUU QUYNH NHU SOLUTIONS TO IMPROVE SALES PERFORMANCE OF ACT Co (an International Freight Forwarder in Hochiminh City) MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (Part-time) Ho Chi Minh City (2010) DECLARATION I declare that the work contained in this master project was performed by me under the supervision of Dr Nguyen Van Ngai Any data, quote, reference in this project are clearly identified ACKNOWLEDGEMENTS I would like to thank Solvay Brussels School (SBS) and Open University of Hcmc for giving me this opportunity to perform and complete my MBA I would like to thank all Professors of SBS for their teaching and good lessons through this course of MBAVB2 (2007-2009) I would like to thank Dr Nguyen Van Ngai for his guidance and enthusiasm through this Project I would like to thank to ACT Co for the necessary data that helps me fulfil this final project I would like to thank my friends at MBAVB2 class, especially Van’s group, Juice’s group for supporting me through the course TABLE OF CONTENT LIST OF TABLES LIST OF CHARTS LIST OF ABBREVIATIONS EXECUTIVE SUMMARY Chapter 1: INTRODUCTION 1.1 Statement of the Problem 1.2 Objectives of the Study .7 1.3 Scope and limitations of the Study 1.4 Methodology .7 1.5 Structure of the Study Chapter 2: LITERATURE REVIEW 2.1 Theory of 25 Sales Strategy 10 2.2 Other Studies 18 2.3 Research framework 21 Chapter 3: INTRODUCTION OF AMERICA EUROPE CARGO (ACT) 3.1 Logistics service industry overview 22 3.2 Introduction of ACT Co., Ltd 23 3.2.1 Company history 23 3.2.2 Company’s vision, mission and core value 24 3.2.3 ACT’s Organization 25 3.2.4 Main activities at ACT Co and their basic processes 26 3.2.4.1 Export 26 3.2.4.2 Import 28 3.2.4.3 Customs Clearance 29 3.2.4.4 Inland trucking 29 3.2.5 ACT’s customers & Competitors 29 3.2.6 Current situation of ACT’s sales performance via secondary data 30 Chapter 4: SALES STRATEGIES 4.1 Current 25 sales strategies at ACT Co 32 4.2 Solutions to improve sales performance 44 4.2.1 Build a better rapport with customers 44 4.2.2 Understand the Customer’s Needs 45 4.2.3 Creative Selling 48 CONCLUSIONS 50 REFERENCES APPENDIX LIST OF TABLES & CHARTS Table 2.1: 25 Sales Strategies 10 Table 3.1: Sales & Profits performance through years 29 Table 4.1: 3PL selection criteria of customers 33 Table 4.2: Descriptive Statistics 35 Table 4.3: Export customers’ information 36 Table 4.4: Key answers of customers via in-depth interviews 37 Table 4.5: Profits & Sales calculation 47 Chart 3.1: Top five outsourcing logistics activities 21 Chart 3.2: ACT’s Organization 24 Chart 3.3: ACT’s sales performance through years 30 Chart 4.1: Buying Criteria 34 LIST OF ABBREVIATIONS ACT : America Europe Cargo Co., Ltd 20’DC : Twenty-feet dry container 40’DC : Forty-feet dry container 40’HC : Forty-feet high cube container FCL : Full Container Load LCL : Less-than-Container Load B/L : Bill of Lading GDP : Gross Domestic Products AWB : Airway bill D/O : Delivery Order 3PL : Third-party logistics CIF : Cost, Insurance & Freight CNF : Cost & Freight FOB : Free on board P.I.C : Person In Charge SGN : HOCHIMINH CITY ROT : ROTTERDAM FLX : FELIXSTOWE BOS : BOSTON LAX : LOS ANGELES PUS : PUSAN EXECUTIVE SUMMARY During recent decades, needs of logistics service have been increasing Entrustment with logistics service to logistics service provider has become a solution of majority of enterprises America Europe Cargo Co (ACT Co., Ltd) is an international freight forwarding company (brief as forwarder) in Hochiminh City that provides service of international cargo transportation by sea (ship by sea), by air (ship by airplane), customs clearance, inland haulage All of these services are some main activities of logistics service Years of 2008, 2009 and 2010 were assessed at the hard years for ACT as its sales had declined (falled more than 12%-16% in comparison with previous years from 2005 to 2007 which sales increased gradually each year) resulting its profit declined correlatively Beside the tough competition among freight forwarders and logistics service providers in Vietnam, main reasons for these sales decline are some important customers have left the company and some used the company’s shipping service less than before In order to understand why customers have no longer or less used ACT’s service than before and how they have assessed the service recently, surveys via questionnaires and in-depth interview were made, some important points were found as follows: Based on survey respondents, four main factors affect to customers in choosing one shipping service are: good rates (price), good customer service (polite, professional, enthusiastic, flexible, fast (feed back)), close relationship and credit period Through this survey, customers commented that they didn’t satisfy ACT’s service with factors: Price, Credit term and Commission policy From the in-depth interviews, all of 10 interviewees presented for ACT’s major customers would care for lowest rates, long credit period, high commission, close relationship Besides, they suggested that ACT should provide integrated solutions across the supply chain, that means ACT should add more service as a contract logistics (warehouse and logistics space) to be good choice for logistics outsourcing In order to keep the current customers, increase their times of service uses and generate new customers, several solutions to improve sales performance of ACT are suggested as follows: (1) Build a better rapport with customers Frequent communication and various types of messages sent to customers are very necessary ways to tighten the relationship with them It’s possible to combine email, phone contact and face-to-face communication, etc First, create customer database and contact them on a regular basis; discover customer’s interests and share with them Invite customers to go out for coffee, dinner, take them to a ball game, a concert or golfing Second, offer customer with rewards to remind them of the company and services This way could help build better relationship with customers Third, build two-way communication: send surveys to customers (online or offline) This makes customers feel they are listened by the company 49 decision makers ACT’s sales people can contact via email or chat with them on chat programs: skype, yahoo messenger If ACT can offer good rates to them, they will accept the service Still few forwarders know this website and its effectiveness Third, try to sell service overseas That’s to say ACT must find foreign customers via some international trading websites Or ACT can send emails of business co-operation to foreign buyers via Alibaba website Foreign buyers will buy goods from Vietnam and import to their countries With this, ACT will get more export shipments and can work directly with overseas customers without facing with the matter of nomination shipments Fourth, join in several international freight forwarding associations to exchange business and this will create many chances to get nominated shipments from overseas partners: WCA, APLN In sum, all customers today care for price It doesn’t matter if one company’s service is better If the company doesn’t have the lowest price, customers would go to competitors To be successful selling these days, it’s imperative to go deeper understanding customers’ needs and build close relationship with customers by contacting them on a regular basis, spending more time with them personally outside the working environment In order to create more sales, new ways of reaching different customers should be executed Some of these are: introduce the company to overseas agents to receive two-way supports, contact directly to foreign customers to get their nomination shipments and join in some international forwarder associations to have supports within these associations 50 CONCLUSION Through the analysis of ACT’s current situations, results from questionnaire survey and in-depth interview, ACT Co has not still met customers’ needs, not yet built strong relationships to get their full supports and been shortage of new customer for firm development of the company To improve the sales in coming years, ACT must keep the current customers and generate new customers In order to that, ACT must build deeper relationship with current customers, lower rates to meet their requirements and find more ways to reach new customers domestically and internationally Therefore, three sales strategies should be concentrated on are: build rapport with customers, understand customer’s needs and have creative selling ways If ACT can apply these strategies strictly, sales will be increased and the current situation will be turned for a better With the limitation of time and knowledge, this final project can not be a perfect one Especially, the analysis of 25 sales strategies matrix is just still simple and three selected strategies mainly based on the surveys The qualitative research (in-depth interview) was just conducted with ten customers in Hochiminh City and only forty survey respondents via questionnaires so it can not represent for all customers However, all customers have the same expectations of lowest possible costs, longer credit period, reliable service, higher commision, etc Acknowledge the existing limitations, I hope this project will be further discussed and contributed by readers REFERENCES America Europe Cargo Co., Ltd (2004-2009), “Annual reports”, unpublished Consulting and Research Department (2008), “K t qu kh o sát v logistics n m 2008”, SCM Corporation Nam Anh (2011), “Logistics Vietnam ã b b l i xa”, Giaothongvantai electronic newspaper (http://giaothongvantai.com.vn/Desktop.aspx/Doanhnhan/Khach-moi/Logistics_Viet_Nam_da_bi_bo_lai_qua_xa/) Xuan Nghi (2009), “Thi u nhân l c logistics”, VnEconomy electronic newspaper (http://vneconomy.vn/2009072109509451P5C11/thieu-nhan- luc-logistics.htm) Dave Kahle (2008), “Protecting Your Good Accounts from the Competition”, (http://www.salesvantage.com/article/1335/Protecting- Your-Good-Accounts-from-the-Competition) Gregory P.Smith (2000), “Top Eight Marketing and Sales Strategies”, (http://www.businessknowhow.com/marketing/top8mark.htm) Jennifer A.Redmond (2001), “Survival Tactics: Sales Strategies”, (http://www.inc.com/articles/2001/10/23617.html) Jill Konrath (2006), “Creating Sales: The Secret to Finding Hidden, but Ripe Opportunities”, (http://www.salesvantage.com/article/1303/CreatingSales-The-Secret-to-Finding-Hidden-but-Ripe-Opportunities) Peter R Garber (2007), 25 Sales Strategies and Activities, HRD Press, Inc Usa Stephan Schiffman’s (2005), 101 Successful Sales Strategies, Adam Media APPENDIX 1: QUESTIONNAIRE Dear Sir / Madam, I am currenlty doing my own survey to understand some main factors impact on buying decision of international freight forwarding service from customers towards ACT in Hcmc Your answers are very valuable for us to improve sevices in future Please spend your short time to respond to this questionnaire Thanks a lot Which service are you using or used to buy from ACT? a Seafreight b Airfreight c Customs clearance d Inland trucking Could you pls tell me which factors/criteria below decide the selection of international freight forwarding of your company? a Freight Rates for international transport (Price) b Fast feedback to customers c Customer service: polite, professional, enthusiastic, flexible solutions … d Company’s reputation e Relationship between employee/company and customer f Equipment availability (empty containers, available space on feeders, mother vessels…) g Credit period for freight rates h High commission i Flexible settlement (freight prepaid, collect, paid after goods delivery…) j Others Could you pls evaluate competitive levels of freight rates offered by ACT Co.? (based on : Not competitive 2.Little competitive 3.Acceptable Competitive Very competitive) International freight rates compared with competitor Commission compared with competitors Credit period for customers Could you pls evaluate satisfaction level for ACT’s service quality? (based on : Not satisfied 2.Little satisfied 3.Acceptable Satisfied Very satisfied) Feedback to customers Customer Service Equipment availability 1/3 final APPENDIX 1: QUESTIONNAIRE Could you pls tell me which following factors impact to your selection of ACT’s service ? (based on : Not important Little important Normal Important 5.Very important) Relationship with customers Company’s reputation In general, could you pls tell me satisfaction levels for ACT’s services? Not satisfied Little satisfied Acceptable Satisfied Very satisfied Will you continue to use ACT’s service? a Yes b No How did you know ACT, by which ways? a ACT’s salespeople contact via phone, email, website b You youself contact with ACT via phone, email c Via introduction from friends, customers, 1080 d By chance How could you evaluate the correlation between quality and price? a High price equals high quality of service b Low price equals low quality of service c Low price is not low quality of service d High price is not high quality of service e.Acceptable price equals acceptable quality of service 10 Please give me some good ideas to improve ACT’s service? (pls write here) 11 To you, which one makes customers to use one international freight forwarding service again?(pls write here) 12 Others : Please give: 2/3 final APPENDIX 1: QUESTIONNAIRE - Your name: - Your company name: Thanh you for your kind supports! 3/3 final APPENDIX 3: DISCUSSION GUIDELINE OF IN-DEPTH INTERVIEW (INDIVIDUAL INTERVIEWS) (Note: It concentrates on ACT’s customers who are choosing international freight forwarders to transport their goods overseas And the following structure of questions is not limited to this strictly ) I want to thank you for spending valuable time to meet me today My name is Nguyen Luu Quynh Nhu and I’d like to talk with you about your appraisals on ACT’s present service and your expectations from international freight forwarders as us in future Your information will be very useful for our future improvement The interview will take less than one hour I’ll take note all your comments during the session All responses would be kept confidential Your interview responses will be highly appreciated for our consideration to apply soon You can end the interview at any time Are there any question about what I’ve just explained? Are you willing to participate in this interview? 1/ What are your criteria to select an international freight forwarder (forwarder)? Please list APPENDIX 3: DISCUSSION GUIDELINE OF IN-DEPTH INTERVIEW (INDIVIDUAL INTERVIEWS) 2/ What are some barriers to use international freight forwarders and ACT’s service? 3/ How did you overcome the barriers? 4/ How long you expect to be granted credit from us? How long have you been offered credit by the present international forwarders? 5/ What is the most important factor for you to make decision of buying a shipping service? 6/ Do you satisfy with our service? 7/ Do you satisfy with our team’s relationship? We would like to get advice from you 8/ What recommendations you offer for our future improvements? Is there anything more you would like to add? I will be analyzing the information you and others gave me in several months from now Thank you for your valuable time and contributions to us We will take a special attention to this as strategic solutions in future APPENDIX DISCUSSION GUIDELINE OF IN-DEPTH INTERVIEW (ANSWERS) (Note: It concentrates on ACT’s customers who are choosing international freight forwarders to transport their goods overseas And the following structure of questions is not limited to this strictly ) I want to thank you for spending valuable time to meet me today My name is Nguyen Luu Quynh Nhu and I’d like to talk with you about your appraisals on ACT’s present service and your expectations from international freight forwarders as us in future Your information will be very useful for our future improvement The interview will take less than one hour I’ll take note all your comments during the session All responses would be kept confidential Your interview responses will be highly appreciated for our consideration to apply soon You can end the interview at any time Are there any question about what I’ve just explained? Are you willing to participate in this interview? 1/ What are your criteria to select an international freight forwarder (forwarder)? Please list Answer from participants / interviewees: - Good rates - Good service - Long credit - High commission 2/ What are some barriers to use international freight forwarders? Lack of supply chain solutions? Lack of equipments (such as empty containers, forklifts, vessels )? Lack of modern technology? Answer from participants / interviewees: - Lack of modern technology - Lack of equipments - Lack of supply chain solutions 3/ How did you overcome the barriers? Answer from participants / interviewees: Switch to global learders in international forwading such as: DHL International, Kuehne Nagel, Schenker, Panalpina, Geodis, Expeditors, NYK Logistics, APL Logistics, Maersk Logistics… 4/ How long you expect to be granted credit from us? How long (how many days) have you been offered credit forwarders? Pls tell us more by the present international Answer from participants / interviewees: - 60 days or more such as 90 days of credit time is what we expect to be offered from you - Some present international forwarding are offering 30 days to regular customers but if any companies can offer longer credit, we will switch to 5/ What is the most important factor for you to make decision of buying a shipping service? Please explain Answer from participants / interviewees: - That’s the good rate or lowest total costs We also care for relationship and credit period 6/ Do you satisfy with our service? Answer from participants / interviewees: - We satisfy with the service you are offering regarding to the enthusiasm to customers, the flexibility in solving matters promptly during handling our shipments - But we didn’t satisfy with the rates, they were not competitive some years recently You must lower more We also expect some credits from you for longer supports from us to your business Higher incentives are what we are caring also 7/ What recommendations you offer for our future efforts? Answer from participants / interviewees: - Offer more competitive rates, lowest total costs - Improve more the quality of service to cusomers - Grant credit to customers - Give higher incentive to regular customers - Build close relationship with customers - Find new ways to approach overseas customers who are the decision makers for export shipments Is there anything more you would like to add? I will be analyzing the information you and others gave me in several months from now Thank you for your valuable time and contributions to us We will take a special attention to this as strategic solutions in future APPENDIX 4: QUESTIONNAIRE SURVEY RESULTS Total No.Q/A k1 k2 k3 k4 k5 k6 k7 k8 k9 k10 11 12 13 14 k1 k2 k3 k4 k5 k1 k2 k3 k4 k5 k6 k7 k8 k9 k10 11 12 13 k1 k2 k3 k4 k5 k6 k1 k2 k3 k4 k5 k6 k7 k8 k9 k10 Anh/Ch ang ho c ã t ng s d ng d ch v c a ACT? x a úng 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 b Ch a, nh ng s xem xét use sau 1 1 Nh ng d ch v d i ây Anh/Ch ã, ang s d ng or s use? 1 1 1 a Seafreight 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 b Airfreight 1 1 1 1 1 c Customs clearance 1 1 1 d Inland trucking 1 1 1 Anh/Ch vui lòng cho bi t nh ng y u t / tiêu chu n d i ây quy t nh n vi c ch n nhà cung c p d ch v VCQT c a Anh/Ch / Cty? a Giá c d ch v VCQT 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 b S ph n h i thông tin nhanh cho khách hàng 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 c Phong cách ph c v khách hàng c a nhân viên cty: l ch s , chuyên 1 1 1 1 1 1 nghi p, nhi t tình, cách x lí công vi c linh ho t… d Danh ti ng c a cty 1 1 e M i quan h gi a nhân viên cty v i khách hàng 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 f Thi t b d ch v VC s n sàng (container r ng, ch tàu con, tàu m …) 1 1 1 1 1 1 1 g Th i h n tín d ng c c VCQT 1 1 1 1 1 1 1 1 h Huê h ng cao 1 1 1 1 i Ph ng th c toán linh ho t 1 1 1 1 1 1 1 j Khác Anh/Ch có th ánh giá m c c nh tranh v giá c d ch v c a cty ACT? 4.1 Giá c VCQT so v i i th a Không c nh tranh 1 1 1 1 1 1 b It c nh tranh 1 1 1 1 1 1 1 1 1 1 1 c Bình th ng 1 1 d C nh tranh e R t c nh tranh 4.2 Huê h ng (t giá c c VCQT) so v i i th a Không c nh tranh 1 1 1 1 1 1 1 1 1 1 1 b It c nh tranh 1 1 1 1 1 1 1 c T ng i c nh tranh 1 d C nh tranh e R t c nh tranh 4.3 Th i h n tín d ng cho khách hàng 1 1 1 1 1 1 1 1 a Không c nh tranh 1 1 1 1 1 1 1 1 1 1 1 b Ít c nh tranh 1 c Bình th ng d C nh tranh e R t c nh tranh Anh/Ch có th ánh giá m c hài lòng i v i ch t l ng d ch v c a ACT? 5.1 S ph n h i thông tin cho khách hàng a Khơng hài lịng b Ít hài lịng 1 1 1 1 1 c c Ch p nh n 1 1 1 1 1 1 1 1 1 1 1 1 d Hài lòng 1 e R t hài lòng 5.2 Phong cách ph c v c a nhân viên cty a Khơng hài lịng b Ít hài lòng 1 1 1 c c Ch p nh n 1 1 1 1 1 1 1 1 1 1 1 1 1 1 d Hài lòng 1 1 e R t hài lòng 5.3 S s n sàng thi t b cung c p cho khách hàng a Khơng hài lịng b Ít hài lịng 1 1 1 1 1 1 1 1 1 1 1 1 c c Ch p nh n 1 1 1 1 1 1 d Hài lòng 1 1 e R t hài lịng Anh/Ch có th cho bi t nh ng y u t sau ây nh h ng n vi c l a ch n d ch v VCQT t cty ACT? 6.1 M i quan h gi a cty v i khách hàng 35 40 10 40 12 37 33 14 16 14 12 22 1 22 14 16 22 1 11 25 0 29 0 24 12 APPENDIX 4: QUESTIONNAIRE SURVEY RESULTS a Không quan tr ng b Ít quan tr ng 1 c Bình th ng d Quan tr ng e R t quan tr ng 6.2 Danh ti ng c a công ty a Khơng quan tr ng b Ít quan tr ng c Bình th ng d Quan tr ng e R t quan tr ng V y m t cách t ng th , Anh/Ch có th cho bi t m c hài lịng c a v d ch v a Khơng hài lịng b Ít hài lịng c c Ch p nh n 1 d Hài lòng e R t hài lịng Anh/Ch có ý nh ti p t c s d ng d ch v VCQTc a cty ACT? a Có 1 b Khơng Anh/Ch bi t cty ACT b ng nh ng cách sau ây? a Nhân viên kinh doanh cty ACT liên h qua tel, email, wesite… b T liên l c v i cty ACT qua tel, email… c Qua s gi i thi u c a khách hàng khác, b n bè, 1080, i lý… d Qua s tình c 10 Anh/Ch ánh giá nh th v s t ng quan gi a ch t l a Giá cao ngh a ch t l ng d ch v t t b Giá th p ngh a ch t l ng d ch v th p c Giá th p khơng có ngh a ch t l ng d ch v th p d Giá cao khơng có ngh a ch t l ng d ch v cao e Giá ch p nh n c ngh a ch t l ng d ch v v a ph i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 20 10 12 16 VCQT c a cty ACT? 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 21 15 27 13 0 28 ng d ch v giá c d ch v ? 1 11 Anh/Ch vui lịng góp ý cty ACT có th c i thi n d ch v VCQT c a mình? ……………………………………………………………………… ……………………………………………………………………… 12 Theo anh/ch , i u n khách hàng ti p t c use d ch v c a cty VCQT? … … … … … 13.Vui lịng cho bi t thơng tin cá nhân c a anh/ch : a H Tên: b Tên cty: 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 33 12 ... As an international freight forwarder, ACT offers services of seafreight, airfreight, customs clearance, inland haulage According to the interviewees from in- depth interview, in order to fill... Cargo Co., Ltd (ACT) established in 2004 is an international freight forwarder in Hochiminh City ACT? ??s providing main service of international cargo transportation by sea and air from Vietnam to. .. important factor in an international freight forwarder to increase their strength to customers But this is not a determined factor for customer’s buying For Strategy #11, ‘Understand the Customer’s