KẾ HOẠCH XUẤT KHẢU hải sản SANG THỊ TRƯỜNG QUẢNG ĐÔNG TRUNG QUỐC

KẾ HOẠCH XUẤT KHẢU HẢI SẢN SANG THỊ TRƯỜNG QUẢNG ĐÔNG TRUNG QUỐC MARKETING PLAN TO EXPORT SEAFOOD TO GUANGDONG - CHINA MARKET FOR MINH PHU SEAFOOD CORPORATION Forewords Over the past 10

KẾ HOẠCH XUẤT KHẢU HẢI SẢN SANG THỊ TRƯỜNG QUẢNG ĐÔNG TRUNG QUỐC

MARKETING PLAN TO EXPORT SEAFOOD TO GUANGDONG - CHINA

MARKET FOR MINH PHU SEAFOOD CORPORATION

Forewords

Over the past 10 years, the seafood industry has experienced a rapid and stable development and significantly contributed to the national economy growth The growth share of seafood in the overall agriculture, forestry and fishery sector in particular and in the national economy in general has gradually increased over the years Seafood has become an important economic industry, partially restructe the rural agriculture, eradicate hunger and alleviate poverty as well

as improve standards of living for the community The presence of civil boats/ships fishing in the sea has partially ensured the security, and protected the sovereignty of the national marine areas and islands With over 3200km of coastline stretching from the northern to the southern areas, tropical monsoon climate and other favorable conditions, Vietnam is rich in seafood types

as well as potentials Although seafood exports have recently faced several difficulties and been negatively impacted by the global economic downturn, Vietnam seafood export revenues have reached over US$5.5 billion in the first 10 months of 2013 These impressive figures reflect that export seafood has rich potentials to bring high economic values to the nation

As a leading seafood group in Vietnam, Minh Phu Seafood Corporation (herein referred

as Minh Phu) was formerly known as Minh Phu Seafood Export Factory headquartered at the

Industrial Zone, Ward 08, Ca Mau City, and Ca Mau Province Its primary operations include feeding, processing and trading seafoods & meat products Founded on December 14th 1992 and experienced 15 years of continuous development, Minh Phu has so far affirmed its prestigious position in Vietnam, in Asia and in the world In 2006, Minh Phu became a joint stock company and was listed on the Vietnam stock market The enterprise has stepped from feeding and processing breed shrimps and commercial shrimps to exporting these products to foreign markets This is a development milestone in the context of fierce competition and strict market requirements Minh Phu became the holding company of nine Southern – province – based subsidiaries The subsidiaries operate in the fields of feeding, fishing and processing such seafoods as prawns, fish Minh Phu’s seafood revenues are currently ranked the top among

seafood firms in Vietnam In 2012, the company sales were up to VND 7,965 billion; its export volume reached 32 million kg (valued at 369.4 million) The company's main market is the U.S.,

EU and Japan However, the firm exports to these markets have recently slowed down

Therefore, Minh Phu is looking for new markets for its seafood exports One of the potential markets is China The company has oriented to penetrate the market and China’s Guangdong Province with many advantages and challenges is selected as a “pilot” A marketing plan is set under the expectation to boost the corporation business in this market with high potentials both vertical integration, high quality and branding Besides, the marketing plan is expected to increase Minh Phu’s sales and expand its markets so

as to maintain its current leading position

I AN OVERVIEW OF THE COMPANY AND ITS TARGET MARKET:

Brief introduction about Minh Phu products and services

The marketing plan was developed for the best quality products offered by Minh Phu Seafood Corporation - shrimps and fish

The target market is Guangdong, one of China's most populous provinces, has several big and modern cities and shares border with Vietnam

Primary products of Minh Phu Corporation:

 Shrimps are the main exports of the Minh Phu: shrimps products include black tiger

shrimps and white shrimps The company offers shrimp breeds, feeds commercial shrimps, processs and exports shrimps, especially shrimp products of high added value

 In addition to shrimps, Minh Phu also offers fresh fish such as sutchi catfish, grouper,

etc

The selected products to be exported to this new market will be branded as "Clean Seafood"

or "Chieng Thuy Khai San" in Chinese They include tiger shrimps, white shrimps, sutchi catfish and catfish

The company products’ features: Clean, fresh, nutritious, rich in protein, high quality, etc These products are fed in clean environment or fished off-shore and meet EU standards

"Clean Seafood" is attractively packaged, friendly designed and easy to use with added values such as low fat or food safety features Products are produced and packaged in modern production lines and with advanced technologies of international standards Besides, food hygiene and safety are strictly controlled All activities and procedures of the company comply with relevant laws, regulations and requirements Members of Minh Phu are all aware that product quality always goes hand in hand with the brand and the survival of the enterprise With its investments in technology, upgraded machines, following the management systems of GMP, SSOP, ISO 9001: 2000, BRC, GLOBAL GAP, etc, Minh Phu has become the leader for product quality in Vietnam and its products are always welcomed in the market

Target market

Chinese seafood market is expanding with high growth rate Increased personal income and changed lifestyles have boosted the demand for seafood consumption in this country, especially high quality seafood products China is a potential market for a great number of seafood exporters around the world

Guangdong - China is a highly potential market, located on the Eastern coastline of the

People's Republic of China This province shares the border with Vietnam and has some deep

seaports near Vietnam Guangdong GDP has taken the lead among Chinese provinces since

1989 This province includes many big cities which have witnessed both economic and tourism development Thanks to the above-mentioned advantages, Guangdong is an attractive market for not only Vietnamese seafood enterprises but also for other foreign companies

Competitive Advantages

Minh Phu seafood products have following competive advantages over other products sold in Guangdong:

“Clean Seafood” is fresh, nutritious, rich protein, high quality, attractively packaged, friendly designed and easy/simple to use

“Clean Seafood” will be distributed in the new market in a particular approach which takes advantage of the successful domestic and foreign distribution of the company so far With its network of agents and distributors, the company's products will be delivered to customers fast and conveniently

“Clean Seafood” will be advertised with both traditional and new types of advertisements so that products quickly become customer-friendly The latest advances of modern marketing such

as social networks, cloud computing, viral marketing, guerilla marketing, etc will be applied to optimize the effectiveness of advertising and communication at the lowest costs

Positioning Statements:

The company strives to build the product image for "Clean Seafood" as high quality, clean, safe, affordable and convenient products in Guangdong

This will differentiate Minh Phu Products from other existing seafood products in the market since there is much cheap and low quality seafood which is produced from seriously polluted water and there is also too expensive seafood imported from European to Guangdong

Estimated revenues and profits

For the above long term and strategic plan, Minh Phu sets the revenues of US$30 million, profit of US$2.7 million and a small Guangdong’s market share for the first year The company expects to increase the revenue by 50% and 25% in the second and third year respectively For

this huge market, even though the business plan is quite “modest”, it is the foundation and first steps for the company to increase its exports to this highly potential market

II ANALYSIS OF THE CONTEXT, CONDITIONS AND MARKET:

1 Strengths:

1.1 Dominant customer service:

As a prestigious company in Vietnam and foreign markets, with the largest export turnover

in Vietnam, Minh Phu Corporation has established an effective service network, delivering products of the highest quality to customers in the shortest time Through such local distribution systems as agents, supermarkets and cleanseafood shops, the company's products delivered to customers are always of high quality

In the plan on exporting products to Guangdong, Minh Phu focuses on selecting and cooperating with commited agents and distributors of high responsibilities, business ethics and financial strength The company will support its agents by recruiting, training, and paying salaries for core sales teams who are assigned to every store to create a professional image At sales points, selected staff must be local people who are good at selling products and answering phone calls, enthusiastic, energetic, love the company and its products and fully understand customers

At sales locations, sales are frequently updated using software which is installed on the sale point computers by the company These computers are networked to the center/server one Salepeople are carefully trained about how to use the software and how to introduce products to customers

The company focuses on after-sales services such as bartering, checking customers’ level of satisfaction via phone calls, customer care, product introduction, vouchers for loyal clients, point accumulation, VIP customer discount In addition, products are under warranty terms (customers can return products, products’ expiration date is ensured, etc)

Professional marketing teams constantly update information and situations in the market and report to their managers for timely response Delivery staff are strictly recruited and selected to deliver products to customers with their enthusiasm, polite attitude (these staff will wear the company uniform on which the company logo is embedded.)

1.2 Convenient store locations with consistent signboards and the network of committed agents and distributors

To support agents to increase sales as well as maintain the brand image, Minh Phu partially sponsors store rental, consistent signboards and advertising panels costs for agents and distributors That explains why the company’s stores will be based in favorable, airy and spacious locations to draw customers' attention

1.3 Unique/distinct products:

For Guangdong market, "Clean Seafood" must convey the company messages to consumers: high quality, safe, rich in protein, attractive and offered by a top Vietnamese seafood group

In order to create distinct and unique products, Minh Phu not only focuses on high quality products but also invests in product packaging to match with the leading Vietnamese seafood corporation of 10,000 billion VND sales

With modern technological lines, shrimps and fish are fed and fished in clean water, strictly processed and packaged The company offers reliable products of high quality, fresh, clean and convenient features for customers Minh Phu exports meet the most rigorous standards of the import market An illustration is that the company's products have been accepted in such strict markets as U.S., EU, Japan so far and Guangdong later

For the diversification of products to draw the attention of different customer segments, the company has studied the local culture to create a number of instant foods These products attract students, office people and employees, etc who have limited time to cook fresh food Customers will be introduced about the process of producing "Clean Seafood" (fresh and high quality materials, produced and processed with advanced technologies, meet local and foreign hygiene standards, etc) Thereby, customers are likely to trust the “Clean Seafood” products and they will become customer-friendly products soon

1.4 HR: Employees have extensive experience in feeding, purchasing, processing and distributing products:

Inheriting existing strengths, when penetrating the new market, the company will continue to maintain the achieved results and experience in domestic and foreign markets Minh Phu organizes annual training programs to improve its staff skills and discuss business experience

That explains why the company always has staff of excellent skills and experience These HR has contributed significantly to further strenghthen the enterprise brand as well as improve the quality of its products Thanks to their enthusiasm, the company has consistently ranked in the top 10 seafood export enterprise in Vietnam It’s HR that will help the company successfully implement the export strategy in Guangdong market

1.5 The company has on – site/local subsidiaries which research, feed, purchase and process products.

With a network of nine subsidiaries, the Group feeds, purchases and processes on site to ensure fresh, delicious and nutritious materials Minh Phu pays attention to its research team who studies nutritious products, processing methods, the best supplies, etc so as to further improve the product quality, differientiate the companies products over others and ensure the leading position of the company This demonstrates why the company always provides fresh and clean products which satisfy the requirements of the strictest markets in the world

The above-mentioned nine members will also significantly contribute to the development of the company in the field of seafood export to the new market

2 Weaknesses:

2.1 Sources of supplies constantly fluctuate in both quantity and quality

Vietnam is a country of a long coastline However, fishing tools are quite simple and backward so fishing capacity is not very high Besides, frequent natural disasters cause difficulties and bottlenecks for fishing and seafood industry Therefore, the company’s inputs/supplies are often scarce Moreover, prices of inputs fluctuate day by day and the enterprise is passive in costs

2.2 Limited financial resources

In spite of being a large corporation, joining a big market like China will require an extensive distribution system, enthusiastic and experienced employees that are good at Chinese Besides, shipping and storage costs are really high, so it is tough for the company to penetrate this market without additional funds Fortunately, the fishery industry in general and seafood export in particular are encouraged and supported by Vietnamese government The enterprise enjoys favorable policies issued by the government and loans accepted by banks

2.3 Limited management capabilities of some leaders:

In comparison with Chinese enterprises, leaders and managers of Vietnamese companies are mainly experts with many years of experience in management Therefore, the company has appointed a number of key leaders to China so as to study about business practices and consumer tastes there

3 Opportunity:

3.1 Guangdong is a vast market:

Guangdong - China is a big market with the population of more than 80 million Therefore, it

is a highly potential market for Minh Phu to exploit Besides, many Chinese people do not really trust domestic products due to food safety problems Thus, exports such as fresh, clean and high quality shrimps or will attract a lot of interest from customers who have high living standards and demand for clean food On the other hand, Minh Phu is a high profile corporation in the strict foreign markets such as the U.S., EU, Japan, etc That’s why it is not difficult for the company to establish its Chinese customers’ trust and loyalty

3.2 Guangdong has several seaports and is the neighbor of Vietnam – This facilitates transportation

Geographically, Guangdong is a province which has a long coastline and many deep-sea ports Vast Guangdong market which is close to the Vietnamese border will facilitate the transportation of Minh Phu products between the two nations

China is a large nation with the population of over 1.3 billion (accounting for 19.22% of the world population) as of May 7/2013 With this large population, its close-to-Vietnam location and the fact that consumption of seafood in China has increased by six times in the past 30 years, China is a “fertile ground” for the development and expansion of seafood enterprises in general and of Minh Phu in particular

3.3 Feeding, fishing, processing, consuming and exporting seafood are strongly encouraged and supported by Vietnamese government

In terms of government policies, seafood export industry is being encouraged by the nation

"Decision ref 1690/QĐ-TTg on the approval of the development strategy for Vietnam seafood

industry by 2020 is issued dated 16/09/2010 " According to this decision, the government encourages the seafood industry to become famous and prestigious brands of high competitiveness in international markets In addition, seafood sector are supported by domestic commercial banks with low-interest-loans This is an advantage for the company when competing with other rivals in foreign markets

4 Challenges and threats:

4.1 Fierce competition environment:

In fact, when joining either domestic or international markets, the company has to face intense competition The competition becomes fiercer because China is a highly potential market that several companies expect to penetrate

Minh Phu’s main competitors in Guangdong market are local companies who imports seafood from neighboring countries including Vietnam with border-trade approach Because these companies do not have to pay import taxes, transport costs (Lorries of containers) are very low for border-trade business When products are successfully imported, they are packaged and sold at really cheap prices Therefore, these products are the main competitors of “Clean Seafood”

Other rivals are Vietnamese, European, American and Japanese seafood exporters to China Besides, local seafood businesses will also set strategies to compete with Minh Phu

The aforesaid competitors are challenges of Minh Phu when the enterprise penetrates Guangdong market

4.2 Increasingly high requirements for product packages and quality

Seafood products must be strictly controlled and supervised from the stage of feeding and fishing to processing and transportation by the company production and management system Minh Phu regularly inspect, check, praise the achievements of responsible staff in order to ensure high quality products

Since features of seafood products are fresh and of short use duration (expire soon), if the restoration process is poor, the product quality will be negatively impacted and the enterprise’s

rivals can take advantage of this bad situation to smear “Clean Seafood” brand That explains why Minh Phu always pays attention to enhance the sense of responsibility of product delivery team and ensure the careful restoration process of “Clean Seafood”

The company regularly assigns staff to penetrate the market and listen to customer comments and feedbacks on its products for timely response to the strictest customers

4.3 Trade Barriers:

Trade barriers are a major problem for any exporter Chinese government has imposed 14 tax types on foreign-invested companies and exporters The taxes include VAT, consumption tax, business tax, corporate income tax, personal income tax, resource tax, land value-added tax, urban real estate tax, transport license use tax, stamp duty, deed tax, slaughter tax, agricultural tax and import tax

The company’s research shows that Vietnamese seafood exports to Guangdong will be subject to the following main tax rates:

 Corporate income tax rate: 33%

 Business tax: 5%

The above taxes will affect the company’s product prices This is also one challenge for Minh Phu when exporting seafood to Guangdong market

4.4 High insurance and transportation costs as well as transportation risks are major challenges for the business plan:

Insurance and transportation costs are factors that increase the product prices and make it difficult for the company to compete in product prices, especially when the company exports seafood to Guangdong - a market of a great number of cheap products This reduces “Clean Seafood” products competitiveness even though they are of high quality

The company’s transportation methods vary from market to market For markets that are near Vietnamese border, the company transports its products by frozen containers For coastal