Managing distribution channel for beer products in habeco trading one member company limited

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN MẠNH HÙNG MANAGING DISTRIBUTION CHANNEL FOR BEER PRODUCTS IN HABECO TRADING ONE MEMBER COMPANY LIMITED ĐẨY MẠNH QUẢN LÝ KÊNH PHÂN PHỐI CÁC SẢN PHẨM BIA HÀ NỘI TẠI CÔNG TY TNHH MTV THƯƠNG MẠI HABECO LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN MẠNH HÙNG MANAGING DISTRIBUTION CHANNEL FOR BEER PRODUCTS IN HABECO TRADING ONE MEMBER COMPANY LIMITED ĐẨY MẠNH QUẢN LÝ KÊNH PHÂN PHỐI CÁC SẢN PHẨM BIA HÀ NỘI TẠI CÔNG TY TNHH MTV THƯƠNG MẠI HABECO Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HỒNG ĐÌNH PHI Hà Nội - 2018 DECLARATION I declare that the research outcome in this thesis is the result of my independent work during study and research period and it is not yet published in other’s research and article The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given I am responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration ACKNOWLEDGEMENT First of all, I would like to send my faithful thanks to Hanoi School of Business, Vietnam National University (HSB, VNU) with all the members, lecturers and assistants for the whole knowledge, experience that has been taught and transferred through comprehensive lectures, discussions and exams in the passing time of MBA 10 course Secondly, I would also want to express my sincere appreciation to my supervisor, Assoc Prof Dr Hoang Dinh Phi His wide knowledge and logical thought of business management in general, especially of marketing field has brought great values to me Based on his own experience, he had instructed and encouraged me so much to help me complete this MBA thesis Thirdly, one of the most important factors which supports me to finish this thesis is the willing help of many people working at Habeco Trading One Member Company Limited, especially the leaders, who are very busy at business but still be passionate in answering my interviews Absolutely, without their opinions and information, I could never be able to complete this thesis in a practical and proper manner Finally, I would like to save my special thanks to my family, without their encouragement and support, it would be extremely difficult for me to be totally focus on completing my thesis which is one of my biggest targets in this recent time TABLE OF CONTENTS ABBREVIATIONS .i LIST OF TABLES iii LIST OF FIGURES iv EXECUTIVE SUMMARY .1 CHAPTER 1: INTRODUCTION .3 1.1 Rationale 1.2 Research objectives 1.3 Research object 1.4 Research scope 1.5 Research methodology .6 1.5.1 Research process 1.5.2 Data collection .6 1.5.3 Data analysis 1.6 Research structure CHAPTER 2: THEORETICAL BACKGROUND ON DISTRIBUTION CHANNEL MANAGEMENT FOR BEER INDUSTRY 10 2.1 Introduction of beer industry 10 2.1.1 Beer industry in the world 10 2.1.2 Beer industry in Vietnam 13 2.2 Overview of distribution channel 14 2.2.1 Definition of distribution channel 14 2.2.2 Role of distribution intermediaries 15 2.2.3 Functions of distribution channel 15 2.2.4 Kinds of distribution channel 16 2.3 Distribution channel management 17 2.3.1 Selecting channel member 17 2.3.2 Controlling conflict between channel members 18 2.3.3 Motivating channel members 19 2.3.4 Evaluating distribution channel 20 2.4 Factors affecting distribution channel 21 2.4.1 Market considerations 21 2.4.2 Product considerations 22 2.4.3 Middlemen considerations 23 CHAPTER 3: LITERATURE REVIEW 24 3.1 Previous studies on distribution channel management 24 3.2 Distribution channel management model applied for Habeco 27 CHAPTER 3: CURRENT SITUATION OF DISTRIBUTION CHANNEL MANAGEMENT FOR BEER PRODUCTS OF HABECO TRADING ONE MEMBER COMPANY LIMITED 32 4.1 Overview of Habeco Trading One Member Company Limited 32 4.1.1 History of development and establishment 32 4.1.2 Organizational structure 37 4.1.3 Human resources 38 4.1.4 Current situation of distribution channel system of Habeco 39 4.2 Dimensions and attributions to manage distribution channel for beer products in Habeco Trading One Member Company Limited 43 4.3 Sample size description 44 4.3.1 Gender 44 4.3.2 Age 45 4.3.3 Obtained degree 46 4.3.4 Working seniority 47 4.4 Actual situation of distribution channel for beer products in Habeco Trading One Member Company Limited 47 4.4.1 Selecting members for distribution channel 47 4.4.2 Training members for distribution channel 53 4.4.3 Motivating members for distribution channel 57 4.4.4 Evaluating distribution channel 62 4.5 Assessment of distribution channel management at Habeco Trading One Member Co., Ltd 66 4.5.1 Achievements 66 4.5.2 Shortcomings 66 4.5.3 Causes of shortcomings 68 CHAPTER 5: SOLUTIONS TO STRENGTHEN DISTRIBUTION CHANNEL MANAGEMENT AT HABECO TRADING ONE MEMBER CO., LTD 72 5.1 Developing orientation of distribution channel management at Habeco Trading One Member Co., Ltd 72 5.1.1 General developing orientation of Habeco Trading One Member Co., Ltd .72 5.1.2 Developing orientation of distribution channel management at Habeco Trading One Member Co., Ltd 73 5.2 Solutions to strengthen the distribution channel management at Habeco Trading One Member Co., Ltd 73 5.2.1 Improve criteria for selecting channel members 73 5.2.2 Improve training courses for channel members 74 5.2.3 Improve motivation policy for channel member 75 5.2.4 Improve evaluation method for channel members 76 5.2.5 Improve cooperation with channel members 78 5.3 Recommendations 79 5.3.1 Recommendation to the State management agencies 79 5.3.2 Recommendation to the intermediaries 81 CONCLUSION 84 LIST OF REFERENCES 85 APPENDIX 87 APPENDIX 88 APPENDIX 92 4P ABI Assoc Pro Bancassur ance BL BOD BVGI Co., Ltd DC Dr e.g et al etc FMCG Habeco HRM Dept HSB i.e IT KPI MBA No PR Sabeco TPP i TV UK US USA VBL VNU ii ideas to customize and improve the intermediaries’ IT system to create the best facilities for both intermediaries and Habeco Trading One Member Co., Ltd in term of managing distribution channel operation Intermediaries need to actively request the company to organize training course for their staffs After the training course, they should also check the quality of the training course as well as how their staffs achieve and improve the course, make sure that they can improve distribution channel activities by increasing number of contracts and revenue The intermediaries may consider cooperating with many companies or Habeco Trading One Member Co., Ltd may cooperate with some intermediaries to improve efficiency and expand product distribution strategy However, depending on the specific condition that they can be deployed in certain form: intermediaries act as an agent of Habeco Trading One Member Co., Ltd or Habeco Trading One Member Co., Ltd’s staff can work onsite at intermediaries Intermediaries can develop relationship with customers through the introduction of their core products related to beer products based on the actual benefits, such as: satisfying the needs, attracting and initiating relationships with customers from sending advertised email, consul via telephone or even direct exchange with them about beer products By working directly with the customers, the intermediaries’ staff and Habeco Trading One Member Co., Ltd’s staffs should collect and build up a common database system serving for the both sides This database should be sufficient and specific about customers Based on that, both intermediaries and the company can take the use of database in long term development, contribute effort to facilitate the client approaching process, then, create close and honest relationship with potential customers of intermediaries and the company as well In addition, intermediaries can focus and take advantage of the mining team of its employees who have experience in selling beer products, moreover those staffes should accumulate experience and major knowledge relating to food and 82 beverage industry to be expert in the distribution channel field That will be very convenient and successful for intermediaries and the company to have that type of labor forces, who should be treated well with good incentives and repsected rewards 83 CONCLUSION The development perspective of Habeco Trading One Member Co., Ltd is to ensure the sustainable development in the deep direction, improve the position and significant role of food and beverage field in the social economy of Vietnam In the context where Vietnam is more and more developed in the international market, especially after taking part in the World Trade Organization, there will be many more chances for food and beverage companies to strongly develop, otherwise, there will be also a lot of challenges to be overcome Obviously, Vietnamese food and beverage companies have to prepare with good policies and strategic direction to be well adopted in the massive improved market.” “ At the present, the company is still one of the best beverage companies in the local market However, the company still encounters many difficulties to maintain the market share and market position since being tightly competed by other players Especially, in the current opening-economy context, many other foreign food and beverage providers are gradually improving their position with huge capital and good experience In order to fight against these tough conditions, the company should focus on improving the management effectiveness of its distribution channel, which is a very potential channel for food and beverage business In the coming time, the company will invest in both human resource and finance to fully exploit the benefits of the potential distribution channel activities Moreover, it will focus on making necessary decisions to capture the benefits from st the market to achieve sustainable growth and step by step reach the position in the Vietnamese food and beverage market.” “Due to time constraint, and limited knowledge as well as experience in the distribution channel field of the researcher, a further study and comprehension of distribution channel management at the company should be needed and supplemented for a better analysis.” 84 LIST OF REFERENCES Alison, R and K Uhl (1964) Influence of beer brand identification on taste perception Journal of Marketing Research, 1: 36-39 Andrii Galkin (2015), Distribution Channels Management in Different Regions, American Journal of Economics, Finance and Management, Vol 1, No 2, 2015, pp 92-96 Anh Pham (2014); Distribution channel management for Bancassurance at Bao Viet Life, Master Thesis, BSNEU Dao Tran Minh (2006), Fundamental Marketing Textbook, Statistical Publishing House, Hanoi (2006) Francioni, J L (2012) Beer tourism: a visitor and motivational profile for North Carolina craft breweries Faculty of the Graduate School at the University of North Carolina Gundlach, G T., Bolumole, Y A., Eltantawy, R A., & Frankel, R (2006), The changing landscape of supply chain management, marketing channels of distribution, logistics and purchasing, Journal of Business & Industrial Marketing, 21(7), 428-438 Ha Pham (2014), Distribution channel management for Bancassurance at Bao Viet General Insurance Corporation (BVGI), Master Thesis, BSNEU Habeco Trading One Member Co., Ltd (2015 – 2017), documents, minutes, annual reports, etc Hoang, H and Antoncic, B (2003) Network-based research in entrepreneurship: A critical review Journal of Business Venturing, 18, 165–187 10 Mentzer, J T (2004): Fundamentals of Supply Chain Management : Twelve Drivers of Competitive Advantage, Thousand Oaks, California: Sage Publications 11 Nelson, J P (2005) Beer Advertising and Marketing Update: Structure, Conduct, and Social Cost Review of Industrial Organization, 26: 269-306 12 Philip Kotler, Kevin Lane Keller (2012), Marketing Management 85 13 Rosenbloom, B (2004): Marketing Channels: A Management View, Seventh Edition, South-Western, Cengage Learning 14 Rui Borges Lopes, Filipa Freitas, Inês Sousa (2015), Application of Lean Manufacturing Tools in the Food and Beverage Industries, J Technol Manag Innov 2015 Volume 10, Issue 15 Truong Dinh Chien (2004), Management of Distribution Channel, Statistical Publishing House, Hanoi (2004) 16 Tuan Bui (2012), Distribution channel development for Phuc Nhan Duong Pharmaceutical Co., Ltd, Master Thesis, BSNEU 17 Vlajic, J V., Vorst, J G A J., & Haijema, R (2012) A framework for designing robust food supply chains International Journal of Production Economics, 137, 176-189 doi: 10.1016/j.ijpe.2011.11.026 86 APPENDIX IN-DEPTH INTERVIEW QUESTIONS How doesHabeco Trading One Member Co., Ltdselect members for its distribution channel? How often does the company organize training courses for its DC (distribution channel) members? Which skills and benefits can be obtained by DC members when participating into the training courses held by Habeco? How about Habeco’s tuition fee support policy for its DC members when participating in those training courses? How about the measures used by the company to discover its DC members’ needs and problems? How does the company support its DC members to deal with their problems? How about the distribution program designed by the company for its DC members? What are rewards given to DC members when they have excellent results? Which criteria does the company depend on to evaluate its DC? 10 How suitable and effective are those criteria? 11 How often does the company evaluate the effectiveness of its DC? 87 APPENDIX QUESTIONNAIRE Dear ladies and gentlemen Currently, I am completing the master thesis on distribution channel (DC) management at Habeco Trading One Member Co., Ltd (Habeco) Could you please spend a little time to share your opinion about the matter? Your information will be kept secret and will not be used for any other purposes rather than the purposes of this research Part I: Respondent profile Please tick an “X” in the most appropriate box There should be only one answer for each question 1.Gender  Male 2.Age  < 30 3.Obtained degree  Postgraduate 4.Working seniorit  < years 88 Part II: Detailed analysis Please indicate your opinion for the related factors through the following statements Instruction for answer: Please complete the questionnaire by circling by an (O) to what extent each of the following statements is true according to your personal opinion Each statement is measured by the scale from to 5, which meaning is as follows: 1: Strongly disagree 2: Disagree 3: Neutral No I Dimensions and attributes SELECTING MEMBERS FOR DC Habeco finds prestigious intermediaries in the beer m its DC members Habeco selects its DC members based on their reputa financial strength Habeco selects its DC members by identifying their lines as competitive products, compatible product complementary products II Habeco selects its DC members by fair dealing and f relationship it can establish with Habeco selects its DC members based on their adver and promotion support given to its beer products TRAINING MEMBERS FOR DC Habeco often organizes training courses for its DC m to improve their knowledge on its beer products DC members can participate in some training course Min => Max No Dimensions and attributes Habeco to improve their sales and negotiation skills Training courses held by Habeco can help its DC members improve their communication skills DC members can freely be involved in the training courses held by Habeco without any charge III MOTIVATING MEMBERS FOR DC Habeco uses some approaches to learn members’ needs and problems Habeco offers cooperative arrangements to support its DC members to deal with their problems Habeco builds a planned, professionally distribution program for its DC members Habeco gives some monetary rewards and recognition to its DC members with outstanding and excellent results Habeco assigns some experts to be in charge of motivating its DC members IV EVALUATING DC Habeco evaluates DC based on the amount of sales each DC member can give within a certain time frame Habeco periodically evaluates DC Habeco evaluates whether DC can give better profitability to the company Habeco evaluates whether it can have better control over its DC or not Meeting between Habeco and DC members are often and officially organized to discuss DC problems 90 Min => Max No Dimensions and attributes The standards and approaches used for evaluating DC are suitable and effective THANH YOU FOR YOUR COOPERATION! 91 APPENDIX SURVEY RESULTS Habeco finds prestigious intermediaries in the beer market as its DC members Habeco selects its DC members based on their reputation and financial strength Habeco selects its DC members by identifying their product compatible products Habeco selects its DC members by fair dealing and friendly relationship it can establish with Habeco selects its DC members based on their advertising and promotion support given to its beer products Habeco often organizes training courses for its DC members to improve their knowledge on its beer products DC members can participate in some training courses held by Habeco to improve their sales and negotiation skills Training courses held by Habeco can help its DC members improve their communication skills 92 DC members can freely be involved in the training courses held by Habeco without any charge 3.69 Habeco uses some approaches to learn about its DC members’ needs and problems Habeco offers cooperative arrangements to support its DC members to deal with their problems Habeco builds a planned, professionally comprehensive distribution program for its DC members Habeco gives some monetary rewards and recognition to its DC members with outstanding and excellent results Habeco assigns some experts to be in charge of motivating its DC members 3.48 Habeco evaluates DC based on the amount of sales each DC member can give within a certain time frame Habeco periodically evaluates DC Habeco evaluates whether DC can give better profitability to the company Habeco evaluates whether it can have better control over its DC or not Meeting between Habeco and DC members are often and officially organized to discuss DC 93 problems The standards and approaches used for evaluating DC are suitable and effective 94 ... to manage distribution channel for beer products in Habeco Trading One Member Company Limited .43 Table 4.3: Criteria for evaluating distribution channels of Habeco Trading One Member Co.,... Selecting members for distribution channel 47 4.4.2 Training members for distribution channel 53 4.4.3 Motivating members for distribution channel 57 4.4.4 Evaluating distribution. .. improve distribution channel management for beer products of Habeco Trading One Member Company Limited CHAPTER THEORETICAL BACKGROUND ON DISTRIBUTION CHANNEL MANAGEMENT FOR BEER INDUSTRY 2.1 Introduction