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ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - ĐẶNG HỒNG TRIỀU A STUDY OF DISTRIBUTION CHANNEL SYSTEM MANAGEMENT AT VIETTEL IMPORT AND EXPORT COMPANY LIMITED NGHIÊN CỨU VỀ QUẢN TRỊ HỆ THỐNG KÊNH PHÂN PHỐI TẠI CÔNG TY TRÁCH NHIỆM HỮU HẠN MỘT THÀNH VIÊN THƯƠNG MẠI VÀ XUẤT NHẬP KHẨU VIETTEL LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - ĐẶNG HỒNG TRIỀU A STUDY OF DISTRIBUTION CHANNEL SYSTEM MANAGEMENT AT VIETTEL IMPORT AND EXPORT COMPANY LIMITED NGHIÊN CỨU VỀ QUẢN TRỊ HỆ THỐNG KÊNH PHÂN PHỐI TẠI CÔNG TY TRÁCH NHIỆM HỮU HẠN MỘT THÀNH VIÊN THƯƠNG MẠI VÀ XUẤT NHẬP KHẨU VIETTEL 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 NGUYỄN NGỌC THẮNG Hà Nội - 2019 ACKNOWLEDGEMENT “I would like to show my great gratitude to Associate professor Nguyễn Ngọc Thắng, my tutor and who gave me profound support during the conduct of this reseach Without his greatly enthusiast guidance, I could never have completed the thesis on my own My grateful thanks are also extended to the employees working in Viettel import and export company limited (Viettelimex), especially Distribution Center, have provided to me much necessary and invaluable data and documents for the research I beloved HSB’s staff and friends supports and encouragements during our years of studying in HSB are also deeply acknowledged with unspeakable gratitude My success today could never be achieved without the presence of them” Last but not least, I would like to thank my family who has supported me with strong encouragements during my studying period Thank you./ Hanoi, November 2018 The Author INTRODUCTION Rationale Literature review Objectives Research subject Scope Reseach method Structure CHAPTER 1: THEORETICAL STRUCTURE OF RESEARCH 1.1 Distribution channel 1.1.1Conception and Role of distribution cha 1.1.2Functions of the members of the distribu 1.1.3Structure and organization of distributio 1.1.4Selection of distribution channel 1.1.5Decision on distribution of physical goo 1.2 Distribution channel management 1.2.1Conception and Role of Distribution chann 1.2.2Selection of channel members 1.2.3Encourage channel members 1.2.4Evaluation of activities of channel membe CHAPTER 2: ANALYSIS OF VIETTELIMEX'S DISTRIBUTION CHANNEL MANAGEMENT 2.1 Overview of Viettel Import and Export CompanyLimited 2.1.1General information about Viettel Import a 2.1.2Formation and development of Viettelimex 2.1.3Main products and partners 2.2 Current situation of distribution channel management of Viettelimex 2.2.1Situation of organizations and design of dis 2.2.2Comparision between the distribution ch competitors’ 2.2.3 Customer surveys on the distribution chann 2.2.4 Advantages and disadvantages of distrib Viettelimex CHAPTER 3: SOLUTIONS FOR IMPROVING DISTRIBUTION CHANNEL MANAGEMENT OF VIETTELIMEX 3.1 Solutions to select members in the channel 3.2 Solutions to encourage members’s activities in distribution channel 3.2.1 Encouraging channel members to distribute 3.2.2 Marketing and sales solutions to enhance d 3.2.3 Using technology to manage and motivate ac 3.3 Solutions to evaluate members’ activities in the channel 3.4 Solutions to compete with others 3.5 Solutions attached to study results 3.5.1 Research results 3.5.2 Solution attached to survey results CONCLUSION REFERENCES APPENDIX LIST OF DIAGRAMS Diagram 1: Members of distribution channel 11 Diagram 2: Flow connecting and binding members in the distribution channel 12 Diagram 3: Intermediaries increase the efficiency of contact with customers .14 Diagram 4: Channels for personal consumption products 16 Diagram 5: Common distribution channels for industrial goods 18 Diagram 6: Traditional distribution channels 21 Diagram 7: Vertical Link Distribution System (VMS) 22 Diagram 8: Types of vertical link marketing systems 23 Diagram 9: Distribution channel management model of Viettelimex 46 Diagram 10: Organizational and operational modes 47 LIST OF TABLES Table 1: Key financial targets over the years of Viettelimex 43 Table 2: Evaluation criterias of stores, supermarkets and agents 49 Table 3: Market share of Viettel Store in 2017 50 Table 4: Statistics of surveyed customers at locations 54 Table 5: Summary of collected results and deliver survey ballots 58 Table 6: Proportion of gender participating in the survey 59 Table 7: Age structure of survey participants 59 Table 8: Income structure of survey participants 60 Table 9: Percentage of information source that customers know about products and services of Viettelimex 61 Table 10: Survey results of customers' evaluations for Viettelimex's stores 61 Table 11: Survey results of some questions about customers' evaluations for Viettelimex 63 Table 12: Survey results of some questions about customers' evaluation for Viettel Store's website 65 Table 13: Survey results and evaluation of the author 80 INTRODUCTION Rationale One of the major concerns relating to sales strategy of every business, demonstrating the hit or miss of the product on the market is managing distribution channels Weakness in distribution is one of the reasons for the decline of the company's competitiveness Therefore, to enhance competiveness the company has to not only provide better products and services, but also raise the ability to serve its customers whenever, whatever and however they want This can only be implemented through the distribution channel Businesses should focus their attention on the distribution channel as a basis for their competitiveness According to the Vietnam Association of Software and IT Services (VINASA), between 2003 and 2017, the industry’s revenue has increased more than 1,000 times, a growth rate which can be considered extremely great In 2017, the total turnover of IT industry is estimated at 1,723,500 billion VND, projected to increase approximately 13.15% more than that of 2016 According to the market research institute GfK, demand for technical consumer goods in Vietnam has annually grown at about 15.7% from 2011 to 2017 According to the United Nations Population Fund, Vietnam with a young population mounting towards 98 million and an average income of $ 2,500/person/year by 2020 will be the driving force for cell phone retail market Modern and well-planned retail chains entails efficient brand coverage on the markets The booming of the cell phone market between 2015 and 2017 has triggered nationwide expansion of Vietel Store, FPT shop, Mobile World, Tran Anh Store, Nguyen Kim, Green Machine , reaching even rural areas Traditional stores have been gradually replaced by modern and well-planned retail chains Concerning particularly the electronics retail chain, between five years from 2011 to 2017, the market share increased from 20% to 55% The growth rate of the market is the catalyst for the development of businesses in the industry Financial reports in the electronics - information technology retail market also show impressive results With the rapid development of the electronics retail market, Viettel import and export company limited (Viettelimex) – established in 2006 as a subsidiary of Viettel Group – is one of the early entrants to the electronics retail market in Vietnam Viettelimex's Viettel Store system is a chain of retail stores providing high-tech products including: phones, laptops, tablets, miscellanous and medical devices by many brands Currently in Vietnam, apart from Viettel Store there are many different retail chains e.g FPT Shop, Mobile World, Tran Anh Store as well as small outlets across every living area, to meet the diverse needs and rapid development of technology The more the development of information technology, the more people's demand for technology products Viettelimex is one of the pioneering retailers in this market Despite its great potential, it is facing fierce competition from other chain stores of FPT Shop, Mobile World and the likes Therefore, this paper will partly contribute to the research and solutions to foundation and effective management of the distribution channel of Viettelimex, to improve competitiveness in product distribution as well as operational efficiency The topic of the paper is: “A STUDY OF DISTRIBUTION CHANNEL MANAGEMENT AT VIETTEL IMPORT AND EXPORT COMPANY LIMITED” The paper will carry out far-reaching analysis of these questions: - What is the current picture of Viettelimex distribution channel? What are the advantages and disadvantages? - What are the solutions to improving management efficiency of Viettelimex distribution channel? 2.Literature review In order to have a comprehensive overview on the research field and the history of this subject, the literature review will be briefly and succinctly presented through a number of studies and works that the author have been aware of: Associate Professor Dinh Van Thanh conducted a scientific research at ministerial level on "Assessment of the current picture and orientation of distribution channels for some major commodities in Vietnam" in 2006 The investigation was held by Vietnam Trade Research Institute in 2006 Mr Dinh Van focused on the distribution channel of some main commodities such as vegetables, meat, textiles, steel, fertilizer, cement Dr Tran Thi Diem Huong, Ph.D., Doctor of Economics (2005) "Organization of retail marketing activities of consumer goods by commercial companies in urban markets", Vietnam University of Commerce The aforementioned research by Dr Tran Thi Diem Huong focused on the organization of retail marketing activities of consumer goods by commercial companies in urban markets and proposed some solutions to improving retail marketing of consumer goods in big cities in Vietnam "Research on wholesale and retail services of a number of countries and potentials to be applied into Vietnam", conducted by the Institute of Trade Research (2007) These authors have researched and gathered experiences in developing wholesale and retail services of several countries over the world and proposed solutions that can be apply into Vietnam Nguyen Thi Phuong Tu (2013), M.A thesis, "Managing distribution channels of soy milk at Vietnam Soymilk Company (Vinasoy)”, University of Danang The research highlighted the basic concepts of distribution and distribution channel management From the study of soy milk products, the author provided readers with insights into the Vinasoy Company, its current distribution network, its strengths and weaknesses in distribution channels as well as solutions to improving distribution channel management The enhancement of the distribution channel depends on increasing brand coverage, inreasing sales promotion, price adjustment, incentives and support for sales agents in terms of HR, prices, discount, competition These studies have contributed to systemizing theories of general issues of distribution channel management in economic organizations in Vietnam However, there currently lacks research on the system of distribution channel management of Viettelimex In the face of new changes in the domestic and international economic situation, especially the 4.0 technology revolution, many issues need to be discussed not only in terms of management but also in the application of technology into management The author will broaden the horizons concerning the distribution Question: According to your opinions, How about the customer care policies of Viettelimex: Mainly customers evaluate as very good According to your opinions, How about the customer care policies of Viettelimex? For this question, customers' evaluation of customers on customer care policies of Viettel Store is well appreciated, but still being appreciated not good by some rate of customers So customer care policies of Viettel Store needs to be more improved What criteria are you interested in when choosing a sales unit (can choose many projects): Customers are interested mainly in the following criterias: Price Promotion Question: How you evaluate the quality of Viettelimex's products?: Percentage of clients that appreciated very good is quite high (40%), the rest is good and normal Have you ever bought products of Viettelimex yet? Many times One time Never For this question, there is still a high rate of 15% of customers who have never bought goods of Viettel Store system This poses a challenge for managers how to increase the percentage of customers returning to buy goods Will you return to buy goods of Viettelimex when you need? When asking about the return rate, 5% of customers said they did not want to return Managers need to find out why and find ways to overcome this Moreover, 35% of customers are not sure whether they will return to buy or not So the 82 problem is to reduce this percentage and increase the percentage of customers who are sure that they want to return Do you regularly monitor news on the web: www.viettelstore.vn of Viettel Store? News on the website www.viettelstore.vn according to you, the information contents provided is: Website www.viettelstore.vn of Viettel Store according to you is: The answer results to the website www.viettelstore.vn still many customers never know this website (25%); news on the website is still poor, lack of competition; most access speeds are considered to be fast, but sometimes still have errors, slow access This poses the challenge of increasing website promotion, increasing the percentage of online purchases and customers are interested in the website 3.5.2 Solution attached to survey results Through survey results with customers about stores and supermarkets system of Viettel Store, the author offers some solutions to improve the effectiveness of the distribution channel management as follows: 83 - For store location: The store location is highly appreciated by the customers on criterias: easy to observe and approach, convenient for transportation; however, the criteria in the place where I live without going far is low appreciated The author proposes a solution: Expanding or linking more small stores near residential areas, access more to rural markets - For price: The price is clearly evaluated by customers, but the criteria "cheaper with quality assurance compared to other stores" with point of only 3.39 / The author proposes a flexible market price solution, applying daily price, and may be cheaper than the market from 10,000 to 50,000 VND depending on each product to compete with other units - For sales staffs: Sales staffs are highly evaluated by customers for their friendly, polite, enthusiastic and caring attitude The authors suggest to improve the quality of human resources, Viettel Store should regularly has courses of improving the quality of human resources to be able to sell and advise customers well - Items: Add more product categories, include full accessories, more repair services for damaged machines - Quality control of goods: ensuring quality of goods is genuine, there are teams of engineers and technicians for inspection and must be well trained - Spreading website promotion www.viettelstore.vn: pay attention to advertise on e-commerce websites, on forums, social networks, etc 84 CONCLUSION The electronics, information technology and telecommunications distribution industry is a highly profitable industry, which is growing strongly, but also one of the industries with biggest competitiveness today Grasping the demand of the market since very early, since 2006, Viettel Store is constantly developing and now, there are over 500 stores and supermarkets nationwide with the trademark Viettel Store In order to understanding the market of electronics, technology, by collecting primary and secondary materials, surveying customers and learning about materials related to this field, I have made a study theme on "A study of distribution channel management at Viettel Import and Export Company Limited” The study purpose of the theme is to analyze and evaluate the current situation of the distribution channel management of Viettel Store through feedback from customers about the system of stores and supermarkets of Viettel Store, then offering advantages and disadvantages of the system Based on the theory of distribution and management of the distribution channel,then offering personal solutions of the author to improve the distribution system of Viettel Store Based on my study purpose, my theme has offered the following contents: - Systematize theories of distribution channel and distribution channel management - Offer the current situation of distribution channel of Viettelimex compared with competitors - Propose specific solutions to improve the distribution channel management based on results of customer study, study on distribution channel of Viettelimex The study results of the thesis will be a useful reference material for managers of Viettelimex, individuals and organizations interested in retailing telephone and technology goods Again, I would like to send my thank to my instructor, Nguyen Ngoc Thang, Viettelimex, my friends and family, for their whole-hearted supports and helps so that I can complete my study thesis 85 REFERENCES Ayers, J B., & Odegaard, M A (2008): Retail Supply Chain Management New York, London: Auerbach Publications, Taylor & Francis Group Coyle, J C., Bardi, E J., & Langley, C J (2003): The Management of Business Logistics : A Supply Chain Perspective, South-Western, Thomson Learning Ladwig, F (2002): Multi-Channel Commerce im Vertrieb, Betriebswirtschaftliche Verlag Dr Th Gabler, GmbH, Wiesbaden Levy, M.; Weitz, B.(2007): Retailing Management, Sixth Edition, McGrawHill, Company Inc Mentzer, J T (2004): Fundamentals of Supply Chain Management: Twelve Drivers of Competitive Advantage, Thousand Oaks, California: Sage Publications Specht, G (1988): Distributions- Management, Verlag W Kohlhammer GmbH, Stuttgart u.a Copacino, William C "The Changing Role of the Distributor." Traffic Management February 1994 J.K Lasser Institute How to Run a Small Business McGraw-Hill, 1994 Levine, Bernard "Distributors Feeling Their Online Oats Electronic News (1991) December 4, 2000 10 Rosenbloom, Bert Marketing Channels Dryden, 1991 11 Stern, Louis W., and Adel I El-Ansary Marketing Channels Prentice- Hall, 1988 12 Truong Dinh Chien, 2012 Distribution channel management Hanoi: National Economics University Publishing House 13 Tran Minh Dao, 2002 Basic Marketing Textbook Hanoi: Vietnam Education Publishing House 14 Hoang Van Hai, 2005 Enhancement of competitiveness of Vietnam’s business in internation economic integration Vietnam Economic Management Review 86 15 Tran Thi Diem Huong, 2005 Organization of retail marketing activities of consumer goods by commercial companies in urban markets Doctor of Economics Vietnam University of Commerce 16 Pham Vu Luan, 2005 Management of commercial business Hanoi: Statistical Publishing House 17 Michael Porter, 1996 Chiến lược cạnh tranh (translated document) Hanoi: Scientific and Technical Publishing House 18 Michael Porter, 2009 Lợi cạnh tranh Ho Chi Minh City: Tre Publishing House 19 Tran Anh Tai, 2007 Management Textbook Hanoi: National University Publishing House 20 Dinh Van Thanh, 2006 Assessment of the current picture and orientation of distribution channels for some major commodities in Vietnam Scientific research at ministerial level 21 Nguyen Thi Phuong Tu, 2013 Managing distribution channels of soy milk at Vietnam Soymilk Company (Vinasoy) M.A thesis University of Danang 87 APPENDIX QUESTIONNAIRE (Customers buy electronic products) In order to have accurate information on the feedback buying electronic goods of stores, supermarkets system of Viettel Store, then evaluate the operation of distribution channel management of Viettel Store Please provide your comments by completing the following questions correctly and fully: Any information you provide will only be for scientific purposes and will be kept strictly confidential A PERSONAL INFORMATION 1.Customer information: (Please tick Full name:  in the selected boxes) Address: Gender: Age: Income: Customers know the products of Viettelimex through; Internet Advertisements on television, newspapers Introduction of families, relatives and friends Promotions B ASSESSMENT OF QUALITY OF PRODUCTS AND SERVICES OF STORES OF VIETTEL STORE 1.According to your opinion, How is customer care policies of Viettel Store? 88  Very good  Good  Lack of competition Which criteria are you interested in when choosing a sales unit (can choose many projects):     Price Response time Service attitude of staff  Quality Promotion  Discount 3.How you evaluate the quality of products of Viettel Store?     Very good Good Normal Weak 4.Have you ever bought products of Viettel Store?  Many times   One time Never 5.Will you return to buy products of Viettel Store when you need?  Sure   Not sure No Do you regularly follow news on the website: www.viettelstore.vn of Viettel Store?     Regularly Not regularly Sometimes No 89 News on the website: www.viettelstore.vn according to you information content is provided:  So many    Many Pretty many Not many Website: www.viettelstore.vn of Viettel Store according to you:  Nice interface, fast access speed, fully meet the market information  Poor interface, slow access speed, or errors, not fully meet market information  Other Please give score on each target as follows No Targets Points Location of store Easy to observe, approach Convenient for transport Located in the place where I live without going far Price Listed clearly Cheaper with quality assurance compared to other stores Sales staffs No Targets Have friendly, polite attitudes Serving enthusiastically, thoughtfully Store's manifestation is easy to recognize, observe Name of stores are familiar with prestige The store is beautifully decorated with airy and clean space Pavilions are reasonably arranged Diversified items Full warranty Other comments (In addition to contents above, if you have other ideas, please specify below) ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… Thanks for your cooperation! 91 ... THỐNG KÊNH PHÂN PHỐI TẠI CÔNG TY TRÁCH NHIỆM HỮU HẠN MỘT THÀNH VIÊN THƯƠNG MẠI VÀ XUẤT NHẬP KHẨU VIETTEL Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI... KHOA QUẢN TRỊ VÀ KINH DOANH - ĐẶNG HỒNG TRIỀU A STUDY OF DISTRIBUTION CHANNEL SYSTEM MANAGEMENT AT VIETTEL IMPORT AND EXPORT COMPANY LIMITED NGHIÊN CỨU VỀ QUẢN TRỊ HỆ THỐNG KÊNH PHÂN PHỐI... market, Viettel import and export company limited (Viettelimex) – established in 2006 as a subsidiary of Viettel Group – is one of the early entrants to the electronics retail market in Vietnam Viettelimex's