2.1.1 The formation history and development of company.
Hoang Mai Trading and Production Company Limited was found in October 2001 by the certificate of business registration No. 0102003620 by Department of Planning and Investment in Hanoi, originally located at 48 Hang Tre, Hoan Kiem District, Ha Noi, Viet Nam. In October 2005, head office were moved to 40 Tran Nhat Duat, Hoan Kiem District, Ha Noi. In April 2011, the company moved to Office 9th Floor, HCMCC Tower office building, 249A Thuy Khue Street, Tay Ho District, Hanoi. The company exclusively imports and distributes high quality confectionery products (cookies, biscuits, cake and candy) in Viet Nam. Business products are distributing nationwide by systems of regional distributors and supermarkets (Metro, Big C, Saigon corp, Intimex, Hapro) and retailers. In 2011, the company just imported Apollo products which made in Malaysia. After 1 year, the company developed 15 ranges of product, for example Apollo, Rinda Gula candy and KokocChocolate from Malaysia, or Crow-pie from Korea, Nissin Cookies from Indonesia. From 2003 to 2004, the company added 21 ranges, it made the total of 36 ranges of product
from 8 producers. By 2005, the company increased to 60 ranges of product. The company enlarged business over Europe, Midle East, and it were exclusive sales agent for Montresor - Belgium, Euro cake - UAE, Chocolate Socado – Italyin 2006. From 2007 to 2015, the company developed other ranges of products from other industries such as Nabisco, Montresor, Dofreeze, Rinda Food.
2.1.2 Human resources and human resources training.
The management committee of the company includes 1 general manager, 1 deputy managing director and 1 chief accountant.
Some departments of the company such as The department of chief accountant, The sales department, The department of import and export, The marketing department, The department of administrative and human resources, Warehouse: Dien warehouse, Trieu Khuc warehouse, Ngoc Lam warehouse.
Functions and mission of each department:
(1) General manager: Nguyen Thi Tuyet Mai.
General manager directly operates and manages the entire business activities, takes responsibility of the company’s outcome, represents the entire interest of all staff and employees in the company, assigns tasks to deputy managing director and also takes responsibility for the tasks assigned to the Deputy Managing Director.
(2)The deputy managing director: Nguyen Thi Huong.
The deputy managing director counsels and supports General Manager, has responsibility for assigned missions. On behalf of General Manager to manage entire business activities.
(3) The department of human resources.
The department of human resources arranges staff, adjusts wage, rewards, disciplines, admits or transfers job, dismisses, establishes training plans for staff and acquires policy regime of the State to ensure the rights and obligations of workers.
(4) The accounting department.
The accounting department monitors transactions arising within the company, after that proposes measures to ensure and strengthen the financial management of the unit and promote the efficient use of capital. The accounting department manages assets, examines and assesses periodically on the aim of timely processing of damaged assets, closely examines the cash collection in the company. Chief Accountant is responsible for the law for accounting regulations, statistics, financial management of the company.
(5) The sales department.
The sales department finds customers, partners and markets, receives and signs economic contracts. The sales department acts as an advisor for General Manager on the production and business activities in the company. The business department is divided into 2 units such as the supermarket business unit and the distributor business unit.
(6) The department of import-export.
The department of import-export takes responsibility for customs procedures and insurance procedures to export domestic goods and import goods from other countries. In addition, the department of import-export also undertakes to keep foreign relations with other companies.
(7) The marketing department.
With the main task of developing image and brand of company, bringing the company's image closer to consumers, The marketing department undertakes to hold fair, carries out televised advertisement, advertises through billboard system.
(8) The administrative and customer service department.
This department controls the whole network system of company, all accounting software and all business information. The admin department keeps information as secret and updates continuously. Besides, the admin and customer service department has to get customer’s opinion as well as answer customer’s questions. This helps to improve customer service quality.
(9) Warehouses
The company has three warehouses, including Dien warehouse, Trieu Khuc warehouse and Ngoc Lam warehouse. The stretch of warehouse system is a convenience for the distribution of goods to all provinces.
Warehouses are assigned to examine and monitor the import-export situation of finished product and goods of company as well as implement import- export procedures and other related documents.
2.1.3 The occupations of business registration and Field of business.
The occupation of business registration of the company includes agent, intermediary, auction; Wholesale food; Production of confectionary;
Transportation of goods by road; Packing service; Warehousing and storage of goods; Short-stay services and Wholesale supplies for the family.
However, the company focuses on the industry that brings high turnover such as confectionery, freight by automobile, warehousing operations, food manufacturing and packaging of confectionery.
2.2 The operating outcome of company in recent years.
2.2.1 The operating outcome
Table 1:The table of income statement of Hoang Mai P&T Co., LTD Unit: dong
Norm 2013 2014 2015
1. Revenue
95.038.662.02 3
96.951.803.38 7
98.108.421.74 0
2. Selling expense 9.189.122.574
8.918.931.972
11.040.357.394
3. Administrative expense
8.006.694.275
7.347.544.020
8.385.200.494
4. Profit
4.269.230.526 4.168.444.413
3.908.025.894
5. Profit/Revenue 4.492 4.995 3.983
(Source: Sales department of Hoang Mai P&T Co.,LTD)
The figures from table 1 depicts the operating outcome of Hoang Mai Trading and Production Company Limited (Hoang Mai P&T CO., LTD) from 2013 to 2015. It is remarkable that the revenue and expense of the company gradually increased in this period, but the profit gradually decreased year by year.
From 2013 to 2014, revenue went up, the amount reached approximate 97 billion dong, with a difference of over 1.9 billion dong compared to 2013.
Selling expense went down to 8.9 billion dong in 2014, lower than the previous year an amount of 0.27 billion dong. Administrative expense also had a decrease
of 0.7 billion dong in comparison with the previous year. Profit decreased 0.1 billion for 1 year.
From 2014 to 2015, revenue continued to be on the climb. The figure reached over 98 billion dong in 2015, higher than the revenue in 2014 an amount of over 1 billion dong. In 2015, selling expense increased 2.1 billion dong and administrative expense also increased 1.3 billion dong in comparison with the previous year. Profit was down to 3.9 billion dong. This is also the lowest number within the 3 recent years.
Although revenue increased highly year by year, the profit had a lower decrease due to the high increase of expense. Thus, the company should have solutions and strategies to lower expense.
2.2.2 The situation of organising business products.
The company defined the main business products are confectionery products, such as Richy food, Peppier, Witor, Oatmeal, Apollo, Euro cake, Freddi, Belgian butters,Wismo. These products are exported as well as imported from many various countries. Export activity is based on FOB( Free on board), Hoang Mai Trading and Production Company Limited exports products. It delivers products to trading port, do customs procedures. The company is also responsible for delivering products to the deck for buyers. When the products are on the deck, they belong to the buyers and the buyers have to take responsibility to buy insurance for these products. Import activity is based on CIF( Cost and Insurance and Freight), the sellers do not have to take any responsibility for products after delivering products to the deck. The buyers have to pay for every accrued expenses.
Confectionery is the kind of goods which is essential in life, however the variety of confectionery products is abundant and also high in replacement. What products would be chosen to help company business effectively is the issue that company needs to consider. With the mission of providing confectionery products nationwide, the company has focused on commodity factors when planning to buy and sell goods. The Company classifies goods such as preferred
items, items used seasonally. After that, the company has reasonable buying and selling plans.
2.2.3 The product circulation of the company.
Company uses the methods as selling through trade fairs, selling at the warehouse and selling through commercial representative.
Table 2: The circulation of products of Hoang Mai P&T Co.,LDT
Unit: billion dong
Norm 2013 2014 2015
Amoun t
% amount % amount %
Total circulation of selling products
83.083 87.901 88.81
Through trade fairs 11.125 9.24 12.327 10.84 10.55 9.4 Selling through
unite
21.121 17.55 19.054 16.75 22.07 19.6 Selling through
commercial representative
42.327 35.2 46.720 41.07 48.73 43.28
Selling through other forms
7.51 38.01 9.8 31.34 7.46 6.6
The table shows the circulation of products of Hoang Mai P&T Co.,Ltd in three recent years, 2013-2015. The method via wholesale trade representatives reached 35.2% in 2013 and 41.07% in 2014. By 2015, the number reached 43%
of the movement of goods. However, wholesale method through joint ventures accounts for a high percentage. The company had a good relationship with the business and production companies. The wholesale method through trade fairs are also applied, but it has not brought high efficiency. The company did not deal
with shortcomings which interfered company in increasing product volumes and the performance.
2.2.4. The financial statement of the company.
Capital and capital situation of the company.
The initial capital of the company is 20.500.000.000 dong, which facilitates company to invest in renovating technology, strengthening market researching activities, meeting consumer demands better. In each production and business cycle, Hoang Mai P&T Cor.,LTD invests a certain amount of capital.
Table 3 : Financial situation of Hoang Mai P&T Co.,LDT
Unit: billion dong
Norm 2013 2014 2015 Difference
2015/2014
Difference 2014/2013 Difference Percentag
e (%)
Difference Percentag e
(%) Fixed
capital
5,458 10,088 9,932 0,156 98,45 4,63 184,8
Working capital
35,491 33,681 33,474 0,207 99,38 1,81 94,9
Business capital
43,769 40,949 43,406 0,363 106 2,82 93,56
( Source: Accounting department of Hoang Mai P&T Co.,Ldt)
As can be seen from the table, the business capital had an increase. From 2013 to 2014, the amount of business capital decreased 0,363 biliion dong, with the equivalent percentage of 184,8. However, the figure increased to 43,406 billion dong in 2015, with a difference of 0,363 billion dong compared to 2014, accounting for 93.56 percent. The increase in working capital was due to the
company equipped technological machinery to ensure food safety and improve product quality. In comparison with two previous years, the working capital decreased.
2.3 The real situation of marketing activities of company.
2.3.1 Marketing strategy of company
The characteristics of market, customer and internal factors of the company:
Company’s product consumer market includes domestic and foreign markets.
In terms of omestic market, the consumption market of the company's products can be divided into 3 main market areas: the North Market, Central Market and South Market.
In particular, the North is the main market of the company, the demand for consuming highly focus on holidays, winter. Currently the revenue structure of the domestic market sector accounts for high value in total revenue structure of the company.
For foreign market, by 2011, with the brand "Richy", the company has exported to over 15 countries around the world such as Germany, Australia, Singapore, South Korea and international customers have gradually recognized and believed in using products.
Target customer:
Object-oriented companies are the organizations, businesses, distributors, supermarkets, wholesalers in the provinces and cities nationwide. Requirements of this customer group are also very diverse. Depending on the scale of business, each customer will have their own requirements in terms of quantity, as well as product mix.
Marketing objectives
Marketing objectives of the company is to expand market share, to look for new customers, to boost product consumption, to enhance the reputation and position of the company and to provide the highest earnings for company.
The situation of marketing research and analysis, marketing strategies and brand name of company.
Marketing research activities are focused by the company. The company has its own marketing department to specialize in market research, product research, advertising, distribution and then making right policies and activities, in accordance for each item, each customer, each stage of the year.
Programs and products marketing strategy of the company
The market segments of company aim at people who have average income and high income. This is the most cutthroat competitive market share which there are many competitors. Therefore, the company has built it's different marketing programs and strategies, as well as outstood product and brand so that customers can easily recognize and remember.
2.3.2 Marketing solutions of company 2.3.2.1 Product policy
The products of company are very diversified and plentiful, with more than 100 different confectionery items. It helps consumers easily choose products in accordance with their needs and wants.
Table 4: Product structure of Hoang Mai P&T Co., LTD
Product Type of Product
KMB Cake Peppie, Wismo, …
France Cake Gavottes Biscuits,…
Belgian Butters Belgian Butters Biscuits (in paper box and in box…) Elvan Champion, Elvan Candy, Toffix, Dr Milk, Elvan
Candy Chocolate, …
Euro Cake Euro Jumbo Swiss Roll, Muffins,
Francestle SDN.BHD Alfredo Chocolate Gold, Alfredo Dark Chocolate, Alfredo Joy, Alfredo Milk Chocolate, Rossco Milk Chocolate, Vintage Milk Chocolate,…
Freddi-Italia Freddi Sponge Cake,…
Garuda Blue Ribbon Butter, Rinda Candy, Butter Scotch, Blue,…
GPR food SDN.BHD British Butter Cookies, …
K.Rogers K.Roger Butter Cookies,…
L.B food SDN.BHD Cocoaland Chocolate Pie, Koko Jelly, Lot 100 Gummy, Koko Jelly Chocolate,…
Lambertz Lambertz Chocolate Biscuits, Lambertz Chocolate Cookies, Lambertz Exquisit, Lambertz Toscana, …
London Richy Layer, London Roll,…
Richy food Korea Richy, Richy Plus, Butter Waffles, Egg Butter Waffles, Richy Butter Cookies,…
Rinda Rinda Candy Mint, Rinda Candy Coffee, Rinda Candy Tamarind, Assorted Tea,…
Asya chocolate Elise Daily Chocolate, Elise Octagona Chocolate, Elise Richy Chocolate, …
Tresor Dore Royal Castle, Tresor Dore, …
Witors-Italia Witor’s Chocolate, Witors Chocolate Italia,…
Apolo Apollo Checker Red, Apollo Checker Black, Apollo
Bubbles, Apolo Crush, Apollo Eroll, Apollo Roka,
…
( Source: The sales department of Hoang Mai P&T Company LTD).
In 2002, the company only had 15 imported confectionery products but after only 2 years, the number has increased 6 new products. And the number of products has reached 60 up to now. It shows the strong development of the company in the diversification of products in order to expand the market. In the recent 3 years, to meet the increasing demands of customers, the company has constantly produced goods and imported various confectionery items from different companies from other countries.
Companies increasingly offer a variety of diversified products to meet customer needs. From the stage of reaching customers, delivering on time and place, ensuring food safety. With the high value of product orders of customers who are long-term distributors, the company provides a lot of preferential services as discount, support transport expense.
The richness and diversity in types of confectionary products is a competitive advantage for Hoang Mai Trading and Production Company Limited. It can compete against other competitors such as Hai Ha, Trang An, Huu Nghi, Hai Chau, Kinh Do.
2.3.2.2 Price policy
At present, the competition of price is also as important as product quality’s competition. Confectionery companies continuously apply measures to attract consumers and heighten competitiveness in the market such as reducing price, offering reasonable price strategies. Facing this real situation, Hoang Mai Trading and Production Company Limited has its own policies of price.
The basis of price valuation and the method of determining product price of company:
Basing on the business field, Hoang Mai Trading and Production Company Limited chooses two main ways of price determination. The first method is cost- plus pricing. This valuation creates fairness for both buyers and sellers, the company will have a reasonable profit margin. The second method is competition-based pricing. With this method, no firm can afford to disregard cost and demand factors in pricing which gives major attetion to position its prices just relative to the prices of its competitors.
In general, the confectionery industry, especially imported confectioneries industry, is on the growth. The market has become dynamic and the company has more competitors. Therefore, the company's pricing valuation is based on the price of their competitors which were allowed to offer the most reasonable pricing. Hoang Mai Trading and Production Company Limited also applies different pricing policies, depending on the confectioneries profitable period of year. For loyal customers who buy in bulk, the company will have its own discount policy.
Table 5: Compare the price of competitor’s confectionery items Unit: dong Name of products Price of Hoang Mai
P&T Cor.,LTD
Competitors Name of competitor
Price
Rice cake 20.000 One-one 19.000
Butters 26.800 Huu Nghi 29.500
Chocolate cookies 248.000 Hai Ha 85.000
Cracker 20.500 Hai Ha 23.500
Stiff candy(mint) 20.500 Mellan
Korea
51.000
Stiff candy(migita) 20.500 Bibica 12.000
Sponge cake 42.000 Bibica 32.500
Fondant 68.000 Bibica 55.000
The price of the products which company produces itself is lower than the price of other companies’s products. The company knows how to save expense, for example managing efficiently input materials, reducing unnecessary indirect expense and innovating automated technology. Thanks to price cutting, the company still makes profit although the price of products is very low. However, the thought “ the lower product’s price is, the worse its quality is” affects consumer’s psychology.
Moreover, the price of imported products are higher than the other items.
The high price is one of the elements that reduces the sale productivity.
2.3.2.3 Distribution policy
The diversity of distribution channels brings advantages, but also poses obstacles to select appropriate distribution channels for the product consumption.
The company has used a mixture distribution channels (direct distribution and indirect distribution) in their business.
Diagram 1: The distribution channel of Hoang Mai Trading and Production Company Limited
(Source: Sales department of Hoang Mai P&T Co.,LTD)
Firstly, for the direct distribution , goods go directly from company to customers.
Customers can go directly to the transaction office or call to purchase, order products, whereby the company accelerates the speed of circulation of goods, improve the autonomy and gain higher returns. At the same time, customers can be assured to buy the product with high quality.
Secodly, the indirect distribution: For this channel, the company's products are delivered to consumers through commercial intermediaries. It is the product showrooms, distributors, dealers, retailers, supermarkets. This will help the company enter the market more easily. Currently the company has gradually expanded its distribution network nationwide.
Customer Company
Product showrooms
Retail Wholesale
Currently, the main distribution channel of the company remains the indirect distribution channel with 75% of revenue. This channel has brought efficiency to the company and established a wide distribution network across the country. Product distribution system of Hoang Mai Trading and Production Company Limited is available in all provinces and cities nationwide. Hoang Mai company has established distribution system to resellers, retailers across the country at 3 areas North - Central - South. Customers can buy the company's products in multiple locations. The company's products are distributed through a nationwide network of distributors, supermarkets (Metro, Big C, Saigon Corp., Intimex, Fivimart, Harpro) and the system of direct selling staff of the company.
In order to access the distribution and management of orders efficiently, the company has its own channel managing system. Channel managing system includes sales department which takes responsibility for operating distributing system. It helps company delivery products easily and conveniently, manage and ensure the orders rapidly, accurately and effectively.
2.3.2.4 Mixed promotion policy.
Table 6: Budget allocation of promotion tool of Hoang Mai Trading and Production Company Limited
(Unit: billion dong)
2013 2014 2015
Total Budget 8,8 10,9 12,7
Advertisement 1,4 1,7 2
Public relations 4,2 5,4 6,5
Promotion 1,4 1,5 1,7
Personal selling 1,8 2,1 2,5
(Source: Marketing Department of Hoang Mai P&T Co.,LTD)
Hoang Mai promotion strategy is consistent with its overall business strategy of cost advantages. Marketing objectives of Hoang Mai include profit maximization in short-term and long-term perspectives and increasing the value