Luận văn current status and efficient improvement solutions of the customer service center at cuu long pharmaceutical joint stock company

owsver, participant unsatisfied with customer care service of the company, Base on these rescarch results, the author provide some solutions to improve quality of DCL’s customer cate ser

DUONG THI MINH NGUYET

CURRENT STATUS AND EFFICIENT IMPROVEMENT SOLUTIONS OF THE

CUSTOMER SERVICE CENTER AT CUU LONG PHARMACEUTICAL JOINT STOCK COMPANY

HANOI, AUGUST 2018

DUONG THI MINH NGUYET

CURRENT STATUS AND EFFICIENT IMPROVEMENT SOLUTIONS OF THE

CUSTOMER SERVICE CENTER AT CUU LONG PHARMACEUTICAL JOINT STOCK COMPANY

Advisor: Dr Nguyen Trung Hien

HANOI, AUGUST 2018

Acknowledgement

First, | would fike 1o send my sincere tanks fo the lecturers, especially to my supervisor Dr Nguyen Trung Hien for his devoted attention, lessons and guidance, which have equipped me with key knowledge and essential skills throughout the course More importantly, everylhing T have tearned hore would undoubtedly help

me tremendously in my work in the future

T would also like to thank Iniernational School - Vicinam National Univarsity, Hanoi and Nantes University for useful supports during studying and researching to complete this paper ‘This course has equipped, improved, and added a lot of knowledge aboul the different arcas, In addition, the course also helps ms te have a relationship,

have the opportunity to sharc information and leam from other students in the program

T also would Hike to thank my manager - General Director of Can Long pharmaccutical joint stock company as well as my colleagues for their cnthusiastic support and creating favorable conditions for me to have more information that is useful

ABSTRACT

The stuđy on curert status and efficient improvement solutions of the customer carc central at Cuu Long pharmaccutical joint stock company (DCL) conducted with purpose of analyzing the status, strengths and weaknesses of customer care to develop a

strategy for customer care in the five years 2018 - 2022 in line with DCL'

strategic

direction Based on (he analysis resulls to provide the direction and strategy lo enhanee the effgctiveness of the strengths and minimize the weakness, to create a perfect customer care service for DCL Building Customer care Hotline integrated with CRM system for the company with complete the proc:

s (roociving calls process, calling process, collaboration process) to maximize the efficiency of customer care Building KPL (Key Performance Indicator) for staff and employee reoruitment plan for the dgparhment will consider also In order lo achieve thes rescarch objectives, an investigation conducted in customer conferences in 10 provinces in 2017 with a participation of nearly 1000 people A quantitative method was used with a questiomaire thai was designed lo collect customer feedback about faclors including, customer visiting fequency of sale staffs and sale teaders; customer evaluation on products and services of DCL; customer evaluation on the best pharmaceutical companies; customer evaluation om which pharmaceutical company’s the best antibiotics in Vietnam,

‘The resulis of analyse shows that customers highly appreciated DCL’s policies

of promotion and pricing; DCI’s salo slafls are professional, responsibility and enthusiastic DCL is the second best pharmaceutical companies evaluated by respondents It is also be ranked in the second position of the best antibiotic companies

in Vietnam owsver, participant unsatisfied with customer care service of the company, Base on these rescarch results, the author provide some solutions to improve quality of DCL’s customer cate services such as systematize customer data of the company; classify customer system; build up customer care programs periodically, measures the satisfaction of customers with products and services of the company She

also builds a detail action plan for DCL’s customer care service in 2018.

Table of content Acknowledgement

List of Figurss and Tablss

Abbreviations secnereeneneeee

Chapter 1 NTRODUCTION

1.1 The nced of the subject

LLL The importance of the pharmaceutical industry to society

LL2 the role of customer care in the pharmacentical industry

1.13 The need to set up the Customer care depariment at Cau Long

Pharmaceutical joint stack company

1.14 Vision and mission of the Customer care department fo the Cit Long

Pharmaceutical joint stock company

1.2 ‘The objectives of the study:

2.1.1 The importance öŸ service marketing to blsiness sec

21LL Definition of services:

2.1.1.2 The development trend of the service sectar in Vietnant

2.4.4.3 Common characteristics of service

2.4.14 The importance of defining the service marketing strategy

2.1.2, Customer service conoepts

2.1.3 The relationship between cuslomer service and cuslomer care

2.1.4, Customer Satisfaction Theory

2.1.5 CRM theory

2.2, Research rethods

2.3 Data coflection mmsthođ: Quastiornairo

2.4, Data analysis methoẻ

Chapter 3 COMPANY [NTRODUCTION 20

3.1 The development history of Cuu Long Pharmaceutieal T§C 20 3.1.1 General introduction

Chapter 4: THE STATUS OF THE BUSINESS

4.2.2.4, Customers impression on DCL’s products 3B

4.2.2.6, Customer assessment to visiting of area sale managers 34

4.2.2.8 Delivery service - 36

4.2.2.13, Evaluation of the best pharmaceutical companies in Fietnant 39

4.2.2.14 Evaluation of the best antibiotic companies in Vietant ccc ccc AD

43 ‘The corporate strategy forthe period 2018 — Lm

Chapter 5 CONCLUSIONS AND RECOMMENDATIONS 4 5.1 Customer Care Strategy for the periad 2018 — 2022 3

5.1.2 Classification of custamer system 3

5.1.4, Measures the satisfaction of customers with products and servives of the company 44 5.1.5 Building special customer care quarterly or yearly to make an unique for

Customer care system Of DCL cecsecssiesisiseisestiasisinsieseeesenn dd 5.2, Customer care plan for 2018 oo cecccsssuscsisesssiasstinsiinseeeaen dd

5.2.24 Setup professional procedures and stahilce the personnel of the department AS

5.3 Timeline tor Customer care plan 2018 TH ưưet ` “3

5.4 Technology investment roadmap to support customer care solutions .47

54.1 Functional desertption af the sohilion 48_Toc527889176 5.4.2 Survey appropriate software solution proViđaIs: 48'

5.4.3, Choose the most suitable Supplied 0 essences AD

4.5 Set up the process system, KPI for Customer Care SI 5.5.1 Processes of receiving calls, calling and collaboration SI 5.5.2 Organization chait of Customer care department .55_Toc527889182

3.3.3 Customer Care J3ebartment KPIS cv 2Ố

List of Figures and Tables

Figure L 1 Expenditure on drug per capita in Vietnam from 2005 and forecast to 2027

Figure 3 L DCL's organization structure

Figure 3 2 ‘The amma yrodncionvdlome of of antibiotice

Figure 3 3 Annual production volume of non-antibiotics factory

Figure 3 4 The anmual production volume of Vikimco medical instruments factory

Figure 3 5 The annual production vohune of capsule factory

Figure 3 6 Pharmaceutical producls ccc eo

Figure 3 9 DCL's development orientation

Chart 4 4 Customer evaluation about designing and packaging products 32

Chart 4 5, Customer impression on DCL’s product .00

Chart 4 6, Visiting frequency to customers and saleman attitude

Chart 4 7 Customer visiting frequency of area sale managers

Chart 4 9 Customer evaluation about DCL's delivery service 36

Chart 4, 15 The best antibiotic companies in Vietuam 40 Chart 4 16, Comunents of CUStOMETS sseseneteeteenanateieeananatees „41 Table 5 1 A thmefine oŸ customer care strategy in 2018 - 246

Flow chart 5 1, Receiving calls process cccccsssceccssuussessesestsenssssessseesassietsassesee 52

Flow chart 5 3 The organization of customer care departinent from 2018-2019 .55

Flow chart 5 4 The organization of customer care đepartment Ñom 2030

Customer relationsiup management

Over The Counter

Ethical drugs, prescription drugs

Area Sales Manager

Regional Sales Manager

Job Description Key Performance Indicator State-Owned Enterprise Customer Care Center

Han Giang pharmacentical joint stock company

Chapter 1 INTRODUCTION

1.1 The need of the subject

LIL The importance of the pharmaceutical industry to society

According to the report on Top 10 Pharmaceutical Company Vietnam prestige 2017

by Vietnam Report:

- Vietnam's pharmaceutical market is ona positively growth momentum In 2017,

domestic sale is estimated at $ 5.2 billion, increase about 10% compare to the previous year

and is expected to continue to grow over the next five years

- As the population increases rapidly, the per capita income rises,

people's knowledge is improved, the demand for medicines of the people will

grow The per capita spending on medicines in Vietnam has increased from $ 9.85

in 2005 to $ 22.25 in 2010 and nearly doubled in 2015 ($37.97) The average annual growth in drug spending is 14.6% between 2010 and 2015, and is expected

to remain at an annual growth rate of at least 14% per year by 2025; per capita

expenditure on drugs in Vietnam is expected to double to US $ 85 in 2020 and US

$ 163 in 2025

Above-mentioned statements prove that the demand for pharmaceuticals in Vietnam

is increasing In addition to the demand for therapeutic drugs, the demand for

functional foods also increases significantly This can easily be explained by the

fact that, with such a high level of income, people's needs are not just essential

needs; they are more and more interested in health and beauty because they are more advanced needs, helping their lives to be happier

Figure 1 1 Expenditure on drug per capita in Vietnam from 2005 and forecast to 2027

Drug quality is also increasingly focused higher Many pharmaceutical factories

meet WHO-GMP standards As a result, competition in the pharmaceutical market has

become more acute, Apart fom prioritizing the selection of quality products and prestigious brands in the market, they are also interested in the forrn, design and taste of the product Therefore, in addition to investing in research and development of products, the import and application of high technology in production to better meet the increasing needs of customers and improving competitiveness will be more focused and considered by pharmaceutical companies than ever As a result, customers will benefit fiom the use of superior quality products

LL2, The rote of customer care in the pharmaceutical industry

A sludy on customer caring service in the pharmaceuticat industry conducted hy

Bellsystor24-Hoa Sao joint slack Company in over 1,000 pharmacios in the North of

Vietnam showed that:

- About 15% of them are willing to give up a product of a pharmaceutical company and switch to selling the same product of another pharmaceutical company

‘When asked why, 30% of pharmacies have ever made the switch claiming that the policy

of working with the pharmacies of the old pharmaceutical company di¢ not satisfy them,

in addition to the inherent price, quality and sales reasons ftom medicine buyers

- Statistical results ftom this study indicate gaps in partner management, which are pharmacies, and customer care management of the pharmaceutical companies The majority of Vietnamese producers focus their resources on producing and competing by price, while they forget that 78% of Vietnamese still opt for medical products based on the recommendation of the pharmacy staff (the remaining 22% buy prescription drugs fiom a physician and are willing to change the prescriber's recommendation when alternative products arc morc affordable and available)

+ Caring for a large mmber of customors spread across a large geographical

arca requires information wmanagemient processes and reasonable time allocation, AL ihe same time, by combinmg professional customer care programs Ihrongh the call center, or the deployment of marketing campaigns combining customer care such a3 Tele Marketing, Tele sale, Email Marketing etc many pharmaceutical companies have built the network linking the point of sales, thereby reducing the burden on sale department to constantly care for their old pharmacies, and spending mote time accessing new pharmacies in new geographic areas,

‘Therefore, customer satisfaction in the pharmaceutical industry is highly dependent on the offsetivenass of customer care sorvics Moreover, ta salisfy the large number of custornors

in the pharmaceutical industry, it is imperative for a business to have a profssional customer care center where the business can connect with customers consistently

1.1.3 The need to set up the Customer cure department at Cun Long pharmaceutical

joint stock company

Establishing a dedicated customer care department for a pharmaccutical company is essential, especially with DCL - a pharmaceutical company with a long history of development This division will connect and engage customers with the company in a sustainable and effective way, contributing to maintaining customer loyalty to the company

In fact, since the inception of DCL, customer care task bas bean a part of the sales department and is oflen incorporated into sales programs Al present, customer care activities of DCL include annual customer conferences, loyalty guits for New Year and Lunar New Year Whether the customer recoivos the gill or not, and their satisfaction with receiving the gift will depend entirely on the skill and attitudes of the salesperson The Customer care department is sol up lo provide poriodie customer care programs tailored ta each customer category On the other hand, the Customer care department will measure customer satisfielion with the customer care programs they reeeive cach year This enables the Customer care department to make appropriate adjustments or changes to improve customer satisfaction with DCL's customer care polieics and programs

In addition, DCL's current customer data is not managed centrally and logically ‘The information related to customers is not updated filly and consistently This will make it difficult to update and record tansaction histories in order to classify customers for customer care in general, especially to take care of loyal custamers in particular The creation of Customer care department will help the company systenmalive all custorner dala in a sciertile and proféssional way through CRM solution The Customer care department will help the company tike more aecurats business decisions through consistent slatistical reponts

LL4 Vision and mission of the Customer care department to the Cuu Long

phurmaceutical joint stock company

In the DCL's development strategy for the next five years 2018-2022, the Board

of directors identified the importance of establishing a dedicated the Customer care department Recognizing this need, in September 2017 Board of directors of DCL

3

decided to set up the Customer care department with the followang vision: “Within five

‘years, the Customer care department of DCL willl become a Customer care center model

in the pharmaceutical industry Providing excellent enstomer care services to the whole

of customer system of the DCL and acting as a mediator links between customer and specialized departments of the DCL"

Due to the current situation of DCL, all information of customers are selé: managed by the sale staffs, the effectiveness of customer care is also dependent on them Customers of DCL do not have any official source of information other than information received from the salesman, It is necessary to establish the Customer care department as a middleware that cormects two-way information between the customer and the company, ensuring thai the information from the company to Ihe customer is conveyed accurately, timely and vice versa

‘To achieve this vision, the Customer care department needs to understand and

analyze the situation of DCT customer care scry lo detormine the detaiks of its

development plan for the next five years To become a customer care center model in the pharmaccutical industry as well as a seamless intermediary between customers and companies in 2022 Then alt information and transaction history of customers with ths company will managed centrally at the customer care center, Customer care will be able

to easily categorize customers and build appropriate customer care programs to fixther enhance customer satisfaction and loyalty to the company

1⁄2 The objectives of the study:

will nod to analyze the reallly of DCI

analysis, the Leader of customer care department will have directions to determine suitable strategies that take advantages of the strensths and minimize the efféets of weaknesses,

This analysis helps Customer care department recognize the position of DCL in customers’ mind From that, the Customer care department can find solutions to improve the position of DCI in the customer's mind by provitting superior cuslomer care services or combining with other departments to bring the best possible services to customers Tn addition, the Customer care department should also fsarn and capture the

customer's impression of the customer care services of the pharmaceutical companies in the market, especially of competitors of DCL Understanding that, DCL's Customer care department will need to find solutions in order to provide customer care services that are different and betver than the competitors

> Build OGSM 2018 for the Customer care department and OGSM

implementation schedule in 2018

OGSM is a stratogie plaming process thal provides clear goals and identifios the

strategic choices to achieve them it defines the measures that will be followed to assure

that goals arc mel and helps groups work logether toward corsmon objective

fictions, geographical distance and throughout the organization OGSM’s origins can be traced back to Japan in the 1950s, stemming from the process and strategy work developed during the Occupation of Japan, post-World War Ll It has since been adopted

by many Fortune 500 companies In particular, Procter & Gamble uses the process to align the direction of their multinational corporation around the globe [13]

In DCL, the annmal strategy formulation will follow the OGSM model, O-G-8-M

stands for Objective - Goal - Strategy - Measure OGSM is built consistently from

company to department and then to individual in the company That consistency creates synergy, tmininives waslage of resources, increases focus, efliciency and competitiveness tor the company

+ Okjectives: must show the timgible resulls of the mission and in line with the company's annual objective

- Goals: must be specific, dear and quantifiable, Goals necd lo bs challenging, requiring maxinmm effort to accomplish, but should not be too challcnging leading to impossible and disoricnting in the implcmentation process

- Stratexies: are specitic actions to achieve goals

+ Measures: are specific measures of numbers, milestones or indicators, KPls help to zasily measure the strategies that have been set up before

Tn parallel wilh determining the OGSM for 2018, building the soadnap to achieve the committed OGSM is also essential, It will detail each customer care program for (he year and provide guidance on how to follow the rifestones Based

on that plan, the customer care stafif can set their work plans effectively

5

> Lxpected Objectives: 80% customers know and understand the role of customer care center, Inprove the customer satistction on the scale, Enhance customer loyalty and improve naxt purchase The establishment of the Customer care department will help DCL gradually connact well with the most practical needs of customers In order to connect

effectively, the Customer care department needs 10 commusticale well to all customers to

ensure that 80% customers of DCL Imow and understand the roles and responsibilities of the department, Accordingly, the Customer care department will capture more and morc needs and suggestions #ơm customers in order to have mote appropriate solutions and

cuslorner care programs, improve customer satisfaction As a resull, eustemrer loyally to

DCL is likely to increase; henoe, the purchase rate will improve,

£22, Detait goals:

> Build customer care hotline integrated with CRM system for the company

One of the tasks of Customer care department is to capture the needs and wants

of customers, quickly and efficiently solve thet complaints mainly through telephone

and email However, with DCL’s customer data of up to 15,000 customers, a CRM

solution needs to manage it effectively This system, in addition to the customer datals

management function, it also cables the custemer eare department to store all incoming and outgoing calls from the system to support accurate employee KPI evaluation This system will help the operator caphue the entire record as well as the inlcraction history of customers wilh DCL in the specified period Knowing customers right from the first moment of transaction will definitely make them feel interested and appreciated Obviously, when it comes to gaining trust and good impression from the customers, (he company will have mnore opportunities lo inercase sales

> Register SMS brand name service for the company to effectively communicate and promote the brand to customers, ‘The registration of the SMS brand name in the current circumstances of DCI is qnite necessary This will bs an official charmel lo deliver the most important messages fiom DCL to customers quickly, The immediate benefit of this channel is to communicate the existence and role of the Customer care đoparlinerl to all customers Hones, the Customer sarc department, will casily por form other connections, caring roles, such as congratulation messages on the occasions of birthdays, holidays, sales promotions, announcing product launching programs,

customer conferct te In a mumber of large-scale media campaigns, this charmel is

considered to be cost effective and cfficiont,

> Complete the processes (receiving calls process, calling process, collaboration

creating trust

for customers

> Determine the size of the department

Based on the strategy of the Customer care department and roadmap to achieve

committed OGSM 2018, determining the number of needsd cmpHoyces should be suitable to each stage of the year In the early stages of establishment of the department, the number of staffS docs not necd much, Because that time the leader of the department needs more time to focus on researching analyzing the customer service status of the company; establishing procedures and standards, searching and setting up appropriate

CRM solutions In later years, when all the work of the department went into standard

trajectory, when customers know more about the Customer care center of DCL, increasing the size of the dapartment to meat the needs of customers will consider

> Building staff KPI and employee recruitment plan of the department

As soon as the size of the Customer care department is determined, the next action to do by the department manager is to build KP! for each employee The criteria

of this KPT must clearly reflect the funetions anit dutics of cach pasition and should be

closely related to the anmal OGSM of the department ‘hese criteria should be

> Survey and choose partner to provide CRM solution for customer care system

"

‘To find a suitable and effective CRM solution for the Customer care department

of DCL, first is to build the needed fimctional requirements for it ‘The required functions for the solution need to fit the functions, tasks and long-term strategy of the department, The functions of this solution must meet the general CRM standards as well

as the specific requirements of DCL in order to increase the efficiency of the Customer care center, Second step is to search and survey vendors, Experienced suppliers in the pharmaceutical industry will be given priority Because they will better understand the needs of their customers as well as the management and operation expectations of the customer care centers in the pharmaceutical industry

The final step is to analyze the prus and cons of adjusting the available sokation and developing a DCI-specific solution However,

13.1 Scope of the study

With the igent need for research and ongoing customer surveys, the Customer care department can take a preliminary look at customer needs and assessments of DCL products and services By the end of 2017, DCL planned to hold 10 customer conferences in 10 provinces, Main criteria is that customers with good sales (cumulative sales of more than 10 million) will be invited to these contzrences, and each conference must have 120-150 customers attended Customer care department found this to be a good opportunity to conduct the first customer survey Although the survey of customers through these conferences will be able to provide not entirely reliable

fecdbucks, Lowever, with Ihe criteria of selecting customers and with the number of customers attending these 10 conferences surely will recive highly representative and valuable fscdback Through the resulis of this survey, lhe Customer care departmont can

gel an overview of customer perceptions of DCL products and services Accordingly,

>> Implementation period: After collecting the above data, #om 1/2018 to 5/2018, the Customer care department carried out data entry, analyzed the results of the research, thus set the strategies of customer care for DCL

1-4 Research subjects:

» Customer group

Within the scope of this report, the researcher will focus on OTC customers - pharmacizs hat sell DCL products in Vietwam

> Customer feedback and satisfaction on DCL products and services

One of the most important goals of the Customer care department is to

understand and improve the customer satisfaction of DCL's products and services Given DCL's status as a pharmaceutical company that has never had a Customer care department, the establishment of this department that plays the important role of comneeling information ard listening to customers! needs Therefore, int (his study, it is imperative to review and analyze customer satisfaction of DCL products and services Since then, the Customer care department ean identify the situation and offer solutions

to improve customer satisfaction in the future.

Chapier 2 THEORETICAL FRAMEWORK AND

METHODOLOGY

2.1 Theoretical basis

2.1.1, The Importance of service marketing ta business

2.LLI Definition of services:

a According to ‘The American Marketing Association: “A service is in the form of

8, profils or satisfaction offered al the time of sale or cormection with the sale of goods.”

b According to Murti Sumarni: “A service is an activity or an advantage which can be given by a party to another party which is mostly intangible and can not affect ownership, and ils production or is nol related ip any tangible product.”

© According Lo Philip Koller: “A service is any aetivily or benefit thal onic parly can offér to the other, which is essentially intangible and does not give rise to any transfer of ownership Its production can sometimes be linked to a physical product.”

d According 1o Philip Koller and Amstrong: “A service is am aclivily or an advantage which is given by one party to another party which is basically intangible and can not effect any ownership.”

2.4.1.2 The development trend of the service secior in Vietnam:

‘This sector includes merchant services, utilities and not-for-profit organizations According World bank report 2017, in Vietnarn, il represents about 40% of GDP 2016;

15.8% in 1990 Lo 25.9% im 2005 and 33.4% in 2016); service ratio in GDP of V am

is still low compared to many countries and territories (ranked Sth in Southeast Asia,

ranking 29/34 in Asia, ranking 94/104 in the world)

As mentioned in chapter 1, service plays an important tole in the pharrmaccutical industry, Before being sold in the mezket pharmaceutical products must go through the steps including submit the drug registration dossier to the Drug Administration for an approval of pradnetion and circulali

+, conducting production in a manulaclory; testing qualified circulation products Therefore, strictly adherence to standards is mandatory for the pharmaceutical products and when they are being sold in the market, they need

19

to ensure the quality and registered usage with the Drug Administration Llowever, with

the same soi or In treat the seme pathological symptorn, there will be many different drugs trom difierent pharmaceutical compamees, so the customers (in this report’s scope they are the pharmacy) based on what criteria to import and sell drugs of any

pharmaceutical company? Certainly, besid: factors of pruduct quality and price, prestige and supporting scrvices are factors that customers will always consider before

buying drugs It can be understood that supporting services consist of pre-service, during-

sales and afler-sales s vices With the same drug prices, cusiomers will auloruatically ptiotitize to import and sell goods of pharmaceutical companies who have got nmuch more support services such as fast delivery service, flexible exchange services, seminars and workshops in domestic and ove , the program gratitude customers with meaning fat aifts, sales support programs at the point of sale (bamer, poster, catalog etc)

‘Therefore, focus on improving and enhancing customer care services is extremely important for a pharmaceutical company in today's highly competitive environment

2.4.1.3 Common choracteristics of service

a Perishability: Services cannot be stored So the perishability of it is very high

b Intangibitity: The service cannot he touched like physical objects Recanse of

this characteristic, communication with customers nrust materialize the service

c Heterogeneity: Production of a service is based on a relationship between the customer and the stall or 4 ralerial supporl Incompalibilily between the rigidity of the company and the flexibility requested by the customer creates this characteristic of service Therefore, it 1s ditticult to set a standard for any service Therefore, businesses need to try to make customers feel the same quality of service at different times

d Iseparabilly: In the production of services need the involvement of customers The customer plays the role of the producer and consumer because production and consumption are simultaneous

c, Nor-ownership: Customers can usc scrvice only They can not ownil

These service’s characteristics are both the advantages and the disadvantages for

businesses in general and for pharmaceuticat companies in particular For customers

(pharmacies), well caring them arc a plus point for pharmaccutical companics because the service is invisible factor, moreover people are often being influent by emotions When they are to be concerned, taking care well pharmacies will remember longer and yriorily purchase much more products Caring is not only the fequently visit, gifi

giving customers but also the internal connection among departments of company to

H

quickly resolve the weent needs, complaints and suggestions came from customers It aims o help the company beller mee! the requirements of product quality and improve customer satisfaction on the company’s services

2.1.1.4 The importance of defining the service marketing strategy

By understanding the concep! of scrvicz and the charaetcristies of the service,

in order to maximize customer satisfaction, in addition te improving product quality,

businesses need to develop strategies fo bring the best service experience to customers In order to provide services in a perfect way, businesses need lo build specific strategies and action plan:

* Firstly, they need to determine the most important service attributes to meet and

ceed custornar wishes

+ Secondly, determine the service attributes on which our main competitors are most vulnerable

* Thirdly, determine the company’s current and finture service capabilities

+ Finally, assvssing the strengths, weaknesses, reputation and valucs

‘Therefore, the service strategy will meet key customer needs, exploits the weaknesses of the competitors, capabilities and potential

2.1.2 Customer service concepts

Kocoglue, D., and Kirmaci, S (2012) defined that customer service is the act of

taking care of the customer's needs by providing and delivering professional, hebpfnl, high quality service and assistance before, during, and after the customer's requirements are met, In other word, it is the process of ensuring, customer satisfaction with a product or service, Often, customer service takes place while performing a transaction for the

custom

uch as making a salz or returning an ilom, Cuslomer sorvice can tak: the form

of an in-person interaction, a phone call, self-service systems, or by other means Some characteristics of good customer service includs

Prompmess: Promiscs for delivery of products must be on tine, Delays and cancellations of products should be avoided

Politeness: Politeness is almost a lost art Saying ‘hello,’ ‘good afternoon, ‘sir,’ and ‘thank you very much’ arc a part of good customer service, For any business, using good manners is appropriate whether the customer makes a purchase or not

Professionalism: All customers should be treated professionally, which means the use of competonue or skill expected of the professional, Professionalism shows the customer they're cared for

Personalizavion: Using the customer's name is very affzctive in producing loyalty Custotncrs Tike the idea that whern Ihey do business with knows therm on a personal level

According to Kim et al (2003) nowadays, some compames love to talk to customers, and classify customer service as a marketing investment, rather than an

capense (hal must constantly be slashed and analyzed Sonic businesses arc even taking ita stop futher, by tuming their most prolific fius into advocates and online sales people, There are three golden rules for the new marketing trend:

a Think long-term reputation vs short-lermn profil: Trying to optinize profil on a sale-by-sale basis is a tool's game, leads to frustrated customers and lost repeat business

b Identify your top customers and make them feel special with many

huge chunk of revenue, Knowing who those people are - and giving them special

attention - is a must-do for every company

c Make yourself avaifable No outsourced call center team can match the passion, product knowledge and helpfulness of your most ardent supporters,

Obviously, besides actions such as frequently inquiries, interest customers

in verbal, we need ta satisfy customer needs and expectations base on customers” fecdback and suggestions that we collceted during the customer caring, process Consequently, customers will highly appreciate and become company’s loyal customers Thereby, the company will reduce the cost of finding new customers because according to the book “80/20 Principle in Marketing and Business”, Perry Mashall argues that 80% of companies’ profits are trom only 20% of their

customers So maintaining and improving the caring quality for current customers

aud tuving the oricuted cuslomer classification for the appropriate caring programs will contribute to increase the revenue and prestige of the company

2.1.3 Lhe relationship between customer service and custamer care

Understanding the difftrence belween customer serviec and customer eare can be a challenge At first glance, customer service and customer care seem similar, Both fields involve helping customers They use similar toals like email, chat and phone to communicate They cmploy similar skills like active listening and cmpathy to incrcasc customer satisfaction Both customer service and customer support teams are critical to the customer experience delivered by businesses, While both ficuses on helping customers, the difference between thơm is thal customer cares # spccific type of customer service invelving other skills such as documentation, product tzedback, and technical problem solving

13

Customer Service Customer Care

Generally an entry-level job, with litle

career growth available except in

Focuses on improving the intersection

Ibotween customer experience and the product

Tends to measure transactional anctrics

like CSAT, average handle time, and first

contact resolution

Positions ars available in every industry

2g, retall, fast food, banking, hospitality, ete

that serves customers

Tn addition fo transactional metzies, also looks

at business-related metrics like net promoter score, customer effort score, andl churn

Posilions arc most often available int SaaS

and ecommerce companies

2.1.4 Customer Satisfaction Theory

a Customer satisfaction is aboul assessing custorner altitudes aboul prodneis,

services and brands While it's always been smart to keep customers happy (Kotler 2003) the lerm “customer satisfaction” became popularized in the 1980's with (he total quality movement ‘Therefore customer satisfaction postulate as one of the main indicators of business performance Accurate measurement of customer satisfaction through reliable consumer feedback is vital for developing efféctive management strategies conpled with

allowing managers to implement satisfaction improvement programs

b Hoyer and MacInnis (2001) said that satisfaction can be associated with

feelings of acceplance, happiness, relief, excitement, and delight There ara many Gaclors that affect customer satisfaction According to Hokanson (1995), these fhetors include friendly employees, courteous eiployees, knowledgeable employees, helpfil employees, accuracy of tilling, billing timeliness, competitive pricing, service quality, good value, billing clarity and quick service (sec figure 2.1) Due lo the peculiarity of the pharmaceutical industry and it also based on the size and authouity of DCL's customer caring department which will focuses on five factors among these elements namely service quality, good valuc, quick service, ommtcous emplayecs, helpfid employees

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Figure 2 1 Factors impact on customer satisfaction

The remaining elements, customer caring department does not implement

directly, it will always be a bridge and associate well with the relevant departments to satisfy customers when the customer complaints and feedback occur In order to do well

these elements, staff of customer caring department must be proficient soft skills such

as communication skills especially telephone communication skills, listening skills and

problem-solving skills Furthermore, they need understand clearly about factors such as

- Products: quantity and the basic use of the product

- Sales process

° Policies and promotions periodically

- Functions and tasks of the relevant departments and the relationship between

these departments: sales department, marketing department, R & D department ete

To becoming a polite, professional staff who will bring a good quality service

and promptly to customers, they need to have enough knowledge of the product to

consult clients, understand the sales process of company to analyse customer complaints

and suggestions are right or wrong; know well the promotions programs to update

information to customers when they need; and understand the functions and tasks of the relevant departments to convey information quickly and accurately

2.1.5 CRM theory

a ‘What is CRM?: According to Tim Ehrens: “Customer relationship management (CRM) is

aterm that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving

customer service relationships and assisting in customer retention and driving sales growth”

15

A CRM system allows tusinssses to manage business relationships and the data and information associated with them, With CRM, firm can store customer and prospect contact information, accounts, leads, and sales opportunities in one central location, ideally in the clond so the information is accessible by many, in real time [14] Customer relationship auanagement (CRM) is an approach to manage @ company’s

interaction with omrent and potential customers It uscs data analysis about customers’

history with a company to improve business relationships with customers, specifically focusing on customer refenlion and ultinately dhiving sales growth [15] One important aspect of the CRM approach is the systems of CRM that compile data fiom a range of different communication channels, including a company's website, telephone, email, live chat, marketing materials, and more

nly, social todia [16] Therefore, through the CRM approach and the systems used to facilitate it, businesses learn more about their target audiences and how to best cater to their needs

b The benefits of CRM

A CRM gives overyone across the business, including sales, customer scrvice, marketing, and business development, a better way to manage the customer relationships and interactions that drive success With visibility and easy access to customer data, such as contact information, salcs opportunities, service issuss, and

marketing campaigns, a CRM system can give organizations a clear overview of their

cuslomers With an easy-lo-use, customizable dashboard, onganmvations can see 2 360- degree view of the customer, all in one place [14] With CRM systems customers are served better on day to day process and with move seliable information their demand

of self service from companies will decrease If there is less need to interact with the company for differont problems, enstoruer satisfaction level inereascs [12]

Eight benefits were recognized to provide value drivers [18]

¥ Enhanced ability to target profitable customers Inlcgraled assistance actoss channels

Enhanced sales force efficiency and effectiveness Improved pricing

Customized products and scrviees Improved customer service efficiency and effectiveness Individualized marketing messages also called campaigns

Currently, DCL has not applied CRM system, so transaction and customer

information are not saved and evaluated completely, systematically and objective That causes difficulties for the company in statistic, updating and classifying

customers ina professional, regularly and centrally way The customer classification

criteria for DCL's routine care programs are being completely dependent on the

cumulative revenue of the most recent period The personal information of customers

has not been updated systematically so customer caring is facing difficulties

Investing in an integrated CRM system will help DCL gradually complete the

customer data base systematically as well as having a comprehensive picture for each

customer This is a base for DCL's customer care department carry on accurately

analyzing and evaluating that serve for the company’s regular customer care programs

2.2 Research methods

In this study scope, the author uses quantitative method to measure and analyzed

influence factors to service quality of company

+ Definition:

Quantitative study is designed to measure representatively indicators of

beliefs, attitudes, purchasing intentions or behavior, on samples that must be large

enough to be representative [19]

Quantitative research is “explaining phenomena by collecting numerical data that

are analysed using mathematically based methods (in particular statistics).”" [20]

Quantitative research can be described as ‘entailing the collection of numerical

data and exhibiting the view of relationship between theory and research as deductive, a

predilection for natural science approach, and as having an objectivist conception of

social reality [21]

+ Sources of quantitative data: There are 3 most popular sources as below

a Surveys: whether conducted online, by phone or in person These rely on the

same questions being asked in the same way to a large number of people

b Observations: which may either involve counting the number of times that a particular phenomenon occurs, such as how often a particular word is used in

interviews, or coding observational data to translate it into number

© Secondary data: such as company accounts

The researcher investigated for all OTC clients who took part in the company’s gratitude

conferences that hold in the end of 2017 Its purpose to gather feedback from OTC clients on

7

the following factors which probably help company got more information to fine the better

‘ways to improve company’s products and services and better meet customer needs |19}

¥ Product quality

The product prices

Product designing and packaging

‘The most impressive product

Customer satisfaction on phammacists’ attitudes, delivery service and customer caring service

v stent of customers on pharmacculieal cormpanics in (he market

.3 Data collection method: Questionnaire

Questionnaires can be classified as both, quantitative and qualitative method depending on the nature of questions, Specifically, answers oblaincd lbrough closed- ended questions with multiple choice answer options are analyzed using quantitative methods and they may involve pie-charts, bar-charts and percentages Answers obtained

lo operended qnestionnaire questions are analyzed using qualilative methods and they involve discussions and critical analyses without use of mambers and calculations

Advantages of questionnaires include increased speed of data collection, low or sven mo coal toquiromenls, and higher levels of objectivity compared to many alternative methods of primary data collection However, questionnaires have cartain disadvantages such as selection of random answer choices by respondents without propaily reading the question Morzover, ther

is usually no possibility for respondents

to express their additional thoughts aboul the matter duc to the absense of a relevant question [22]

An initially purpose of questionnaire developed by DCL's customer caring department to evaluate OTC customer satisfaction with company services in gratitude conferences by the end of 2017, The collected data would be use to

analy

and base for building a stralegy for 2018 as well as a development otientation for following years However, during the designing questionnaire, the sales department and the board of directors recommended adding some questions

lo sorve for corporate governance purpo: Lions focuscd on

most pharmacies responded that DCL did not have a visiting pharmacist and introduce its producl Visiting customer periodically is considered as a very important indicalor lo evaluate the pharmacist’s KPI because if s/he does not meet the clients and does not update the company’s sales programs to the client, s/hs is difficult to reach the sales target which means that the sales of the company ean nol be iznproved, Iu addition, the Board of Dircctors also wants the managers of business departments who need to check and control the implementation ts indicator for their staffs by directly visiting pharmacies lo gel their (eedhack on pharmacisl’s working altitude So, sale managers have got document to apply reminding or disciplining for pharmacists who break the department's working rules

¥ Customer evatuation on the best pharmaccutical comparic

Those questions will help company executives to test customer perceptions that coincide with some assessment and analysis of repatable organizations ‘Thereby, DCL could have an appropriate orientation to better compete with its competitors

* Customer cvaluation on which arc the best antibiotics pharmaccutical company’s in Vietnam, These questions were added to the questionnaire as the request

of the OTC sale department Because DCI is also a pharmaceuticat company that focused on producing and sclling antibiotics, gathcring eustomer fecdback on this issue will help DCL know how customers evaluate DCL’s antibiotics ‘the survey results will help DCL identify the position of its competitors in the customer's mind

2.4 Data analysis method

There is a wide range of statistical techniques available to analyse quantitative data, from simple graphs to show the data through tests of correlations between two or

, useful

more items, 1o statistical significance Olher (echniques inofude cluster analy

for identifying relationships between groups of subjects where there is no obvious hypothesis, and hypothesis testing, to identify whether there are gemuine differences between groups

In this study, the author would analyses collected data by figures that could be show the level, the rate of customer evaluation This data tesnits would usefull for the customer caring department to build strategic orientations to maintain the feedback positively or improve the negative feedback of customers

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Chapter 3 COMPANY INTRODUCTION

3.1 The development history of Cau Long Pharmaceutical JSC

3.1.1 General introduction

Founded in 1976, DCI has aver 40 years of experience in the pharmaceutical industry in Vietnam DCL is based in Vinh Long, Vietnam DCL is engaged in the manutacture and sales of pharmaceutical products primarily in Vietnam

DCL has 3 main offerings in its product portfolio:

¥ Phammecentical: Antibioties, vilrins, pain rebel, ani-influrmmalory, respiratory các

Y Medical mstruments: Syringes, needles, injection pumps and bandages

¥ Capsules: Empty capsules of various sizes,

3.1.2 Infrastructure

DCL currently owns 4 factories: 2 pharmaceutical factory following GMP — WHO standard and 40 hectares pharmacentical farms in Binh Phuoc and | medical equipment faclory; | capsules factory named Vicancap This is the only factory in Vietnam which manutactuing and supplying all type of capsules All of DCL factories now is working with full capacity, with advanced technology imported ftom Canada and South Korea

3.1.3 Product

DCL has 3 product lines and the main product is medicine that divided into 15

groups such as analgesic, ann-biotic, anti-histamine, anti-inflamatory anti-virus,

cardiovascular, contraceptive, corticosteroid, cough, dermatology, zrcetile dysfunstion, gastrointestinal, musculoskeletal, tonic, vitamine This product line has got more than approved 250 types The second line is medical equipment with 20 different types encompass tulk needle, infision set, single use syringe from tcc to S0cc The last

product linc is capsule with diversificd sizes, types for the demand of pharmaccutical and nutrition products

3.1.4 Distribution

DCL distribution is cover all over Vietnam It is also a prestige pharmaceutical supplier for major hospitals in Vietnam Currently, DCL has expanded its distribution

nelwork wilh L3 branches and more than 55 distributors

Since QU/2015, DCL has officially become a member of FIT Group Being a strategic sector in the investment structure of FIT, DCL has been invested in both capital and human resources Accordingly, along with the comprehensive restructuring

20

plan, DCL has been recruited key personnel in management activities, operations,

manufacluring, sales cle Ik aims to develop company business, togethor wilh better

control company's debt In parallel, DCL continue to be to expand and upgrade plants and factories for inereasing capacity With the investment fiom LIT, DCL has sel a goal to become one of the top phamumecculical company in Vietmam tough consceutive rescarch and new product development, with modem systems, and professional human resources Besides production activities business, DCL has and contimes to implement social responsibilily: to share value with the community, protecting the environment, building corporate culture that is match with company and EIT core vaine [23]

3.2 Organizational structure

Figure 3, 1 DCL’s organization structure

Source: DCL Human resource — Admin Department

3.3 Business lines

DCL now operating 4 factories located in Vinh Long (All facilities are GMP-

‘WHO certified and in compliance with ISO 9001:2000):

* 02 pharmaceutical factories: 01 beta lactam & 01 non beta lactam

* 01 capsule factory

+ Ol syringe & needle factory

3.3.1, Antibiotics factory

Construction & floor areas: 1,950 sqm and 3,641 sqm‘, respectively In operation since 2010

Figure 3 2 The annual production volume of antibiotics

Annual Production Volume

Construction & floor areas: 2,906 sqm and 5,543 sqm*, respectively Upgraded from

the former SOE’s facility

Figure 3 3 Annual production volume of non-antibiotics factory

& Annual Production Volume

3.3.3 Vikimco (Medical Instruments)

Construction & floor areas: 2,358 sqm and 3,209 sqm*, respectively In operation since 1999

Figure 3 4, The annual production volume of Vikimco medical instruments factory

% Annual Production Volume

Figure 3 5, The annual production volume of capsule factory

Annual Production Volume

Source: 2017 Report of Investment Division of FT Group

3.4 Overview of production and business activities

3.4.2 Product segmentation

3.4.1.1 Pharmaceuticals:

Respiratory system medicines, ete (appx.150 permit) Pharmaceutical products

represented approximately 67.4% of the revenue in FY2016, of which the top 10

products accounted for 58.8% of the pharmaceutical revenue

z

Figure 3 6, Pharmaceutical products

Source: 2017 Report of Investment Division of F.LT Group & http://pharimexco.com.vn

3412 Capsules

Capsules accounted for approximately 22.1% of revenue in FY2016 The

capsules are manufactured in 5 different sizes and a variety of colors, as requested by

customers Cun Long is the only authorized local manufacturer to produce the empty

capsules based on the exclusive license granted by the Ministry of Health in Vietnam

Figure 3 7 Empty capsule with various sizes

3.4.13 Medical instruments:

Products portfolio: Syringes, Infusion wires, Others equipment (over 20

products types) Produced using Korean technology, there are more than 20 types of

self-manufactured syringes and component parts which Cun Long sells The syringes

are classified under 5 different sizes, with the varying capacity of 1, 3, 5, 10 and 20 cc Figure 3 8 Syringes, Infusion wires, Others equipment

inter-province trucks [23] Larger trucks (8 & 14 tons) operate for the routes to the Northern region

OTC channet 122 salesman, 17 ASM, 2 Supervisors and 2 RSM take care of 22,000 customers

ETC channel: 31 salesman, 4 ASM and 1 product specialist monitor all bidding,

3.5 Development orientation:

+ MISSION: “To connect and improve the lives of our community through superior

healthy solutions,”

4 VISSION: “Be the most valued Vietnamese pharmacy company by our patients, employees

4 CORE VALUES

“We understand that, the success of any business is rooted in the core values of that

business Since becoming a member of the FIT Group, witha strategic orientation from

the parent company, DCL has built its core values, which is the guiding principle for the

Board of Directors and all the staffs of the company are concentrating on building the company to become a prestigious pharmaceutical company, evaluated by patients,

employees and partners.” (Source: Website of DCL - http://pharimexco.com.vn)

Figure 3 9 DCL’s development orientation

eta WRINING

Source: DCL Human resource — Admin Department

3.6 The DCL’s growth in total assets, charter capital and turnover

According to DCL’s financial results was cited in annual report in 2017 The

DCL’s total assets as of 31 December 2017 reached VND 1,221,155 billion, an

increase of 3.7% compared to that of 2016, achieved 84% of objective set at the

2017 General Meeting of Shareholders; Profit before tax was reported at VND 765,3

billion, total funding up by 3.7% while outstanding loans rose 18% compared to the

year before NPL ratio was kept at 0.9% Profitability ratios including ROA and ROE ratios were 6% and 11% respectively The profit from operating activities reached VND 88,321 billions, a decrease of 17% in turnover compared to that of

2016 This decreasing came from M&A between DCL and Euvipharm in February,

2017 and the company invested a lot of money to reconstruct Euvipharm Moreover,

DCL also strongly invested in expanding distribution channel netwwork, developing

branding and software of manage sale system [25]

Chapter 4: THE STATUS OF THE BUSINESS

4.1 SWOT analysis for enterprises:

4.1.1 Strength

- Being established in 1976, DCL is a reputable pharmaccutical company with a long history in Vietnam pharmaceutical market

- De

Vietnam stock market The five companies are DCL, DHG, TRA, IMP, DHT

- DCL has a wide retail distribution network (55 distributors) covering almost

is one of the five pharmaceulical companies, which was listed on the

provinces of Vietnam

- The products of DCL are evaluated positively in both its quality and design This

is a result of a small customer survey conducted by the Customer care department by

visiting 35 pharmacies in [anoi and Can Tho province in late 2017

~ Ilis the only company which owned a ard capsule fictory in Vietnam,

- Being the 2nd largest company in producing and supplying needles and

syringes in Vietnam (Source: RAMI Report Quarter 4 - 2017;

- Its staffs have got decp expertise and long experiences in the pharmaccutical industry, especially R & D officers

4.1.2 Weakness

- The machinary system of factories are old, so lead to theit low atficieney

- Lack of tightly coordination among timctional departments

- Customer data is not systematized and updated periodically

= Customers have not been adsquately laken care of on the occasion of big holidays in the year

- Sales and promotion programs have not been filly updated to customers

industry up to 2020 with a vision to 2030, the Government tas slated the viewpoint

of developing and building the pharmaceutical industry to concentrate investment

øn the đewcjapmenl øf the production of generic medicines; quality, reasonable

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price, gradually replacing imported drugs in addition, the government has also advocated that "Vietnamese people prioritize use Vietnam drug”

- It is possible to inherit the advanced scisnce and technology of developed countries such as China, Germany, India ete

4.1.4 Threat

- Must compete with many imported pharmaceutical produets,

- Rofore becoming a subsidiary of FIT, DCL is a SOF Therefore, most of ils

eruployees are high age and limited capacity, especially workers

Currently, Vietnamese pharmaceutical companies mainly serve the domestic

market, so competitor determining would be based on their market share in Vietnam

pharmaceutical industry According to statistics of the Vietnam Drug Administration,

Hau Giang Pharmaceutical Company and Cau Long Pharmaceutical Company are two leading pharmaceutical companies in Vietnam and ranked sixth and seventh among the top 10 pharmaceutical enterprises with top revenue (5 other leading, enterprises are foreign enterprises) DCI?s competitors in the doruestic market are all compamies active

in the pharmaceutical industry in Vietnam such as Hau Giang Pharmacy, Domesco, Inexplarm, Traphaco ole Among thom, Hau Giang is leading wilh ils market share of

14% (in the fourth quarter of 2017) and it is also DCL's biggest rival Hau Giang

Asia listed companies with revenue of 300 millon USD by 2020 DIIG will become a

humanity symbol n contributing to society and improving the quality of life

In the customer care strategy, DIIG does not use discounts, commission as the major ctiteria, but it used the sharing of benefits, quality products and prosperity as the long-term allachmmen! goals Resides the conparation principle of together prosperity,

marketing activitics such as support sales for customers, maintaining and building trust and friendly relations with customers are DLIG’s competition advantages ‘These activities are always maintained, monitored by daily activities The DHG opened a chub,

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