Luận văn thạc sĩ developing distribution channels for viet tinh anh joint stock company to boost the sales of the imported lego toys

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS WZ Do Thu Hang DEVELOPING DISTRIBUTION CHANNELS FOR VIET TINH ANH JOINT STOCK COMPANY TO BOOST THE SALES OF THE IMPORTED LEGO TO

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF BUSINESS

WZ

Do Thu Hang

DEVELOPING DISTRIBUTION CHANNELS FOR VIET TINH ANH

JOINT STOCK COMPANY TO BOOST THE SALES OF THE

IMPORTED LEGO TOYS

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: Dr Nguyen Thi Phi Nga

Hanoi—2011

TABLE OF CONTENTS ACKNOWLEDGEMEDT

CHAPTER 1: GENERAL THEORETICAL BACKGROUND

1.1 Definition of distribution channels and their functions

1.1.1 Definition of distribution channels

1.2.1 Definition of operating distribution channels

1.2.2 Basic elements of a distribution channel

1.2.3 Step of distribution channel’s management - 23

1.2.4 Selecting the optimum distribution channel 23

1.2.5 Intermediaries selection methods in a distribution channel 24

1.3.1 Definition of managing distribution chamels 28

Management in distribution’s workflows 30

1.3.3 Distabution channels’ conflicts management - 31

1.3.4 Assessing the offeetiveness of a distribulion channel 33

CIIAPTER 2: TIE CURRENT SITUATION OF IMPORTED — LEGO —

TOY DISTRIBUTION CHANNELS AT VIET TINH AKH JSC 35 2.1 An overview about Viet Tinh Anh JSC and the distribution channels

2.2 The current situation of imported LEGO toy distribution channel 42

2.3 Assessing the effectiveness of the imported LEGO toy distribution

2.3.1 The effectiveness of the whole channel ST

2.3.2 The effectiveness of cach member in the channel 58

2.4 An analysis of the alTocting [actors to the cllectrveness of the LEGO

vii

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

4, Scope of the Thesis

‘The ‘Thesis studies the operation of distribution channels of Viet ‘Tinh

Anh JSC in the past two years and the next three coming years, regarding the

other competitors in the toy market and the current business setling of

Vietnam

Because of the limited time and competence, the Thesis mainly focuses

on sludying the distribution chamels of Viel Tinh Anh JSC for LEGO toys in

the recent years with the limited area of the Northem provinces (mainly in

Hanoi and Hin Phong)

5 Research questions

- What is distribution channel and its role in marketing?

- How docs Viet Tinh Anh JSC operate its distribution channcls?

- How to improve Viet ‘Tinh Anh’s distribution channel to increase its

profit?

6 Research Methodology

To reach the above objectives, the current thesis use the traditional research

methodology which starling with the background of channel distribution and then the situation of the distribution of Viet ‘inh Anh case to find the

application lessons for the company to improve the effectiveness of this

action in the future Most of the analysed documents im this curent reseach

were collected through the secondary data

7 Expected Results

- Giving an overview of the main characteristics of high-end toy market

in big cities in Vietnam

- Finding oul strong poinls and weak points of the operating and

managing the LEGO toy distribution channels of Viet ‘Tinh Anh JSC

- Suggesting solutions to improve the distribution channels for Viet Tinh

Anh SIC lo boust the sales of the imporicd LEGO toys

briefly discussed and slatislically ilustraled regional markels include France, Italy, UK, China, and India Also included is an indexed, easy-lo-refer, fact-

finder directory listing the addresses, and contact details of 2,231 companies

worldwide

In Vietnam, there have been also many researches on marketing as well

as distribution channcls because of the developing business almosphere

recently Especially, MA Ngo Quoc IIung finished a master thesis on distribution channel “The development of distribution channels of gold and silver products in Phu Nhuan JSC” However, the thesis was on a very

different kind of products — gold and silver products rather than toys for children So far, there has never been any thesis or research on toys products

in Vietnam More importantly, the LEGO toy products are quite diflerent bevause of its high price, besides, it can help children develop physical and

mental health

‘Therefore, the author believes that the theme of the thesis 1s worth to be

researched Moreover, in the current situation of toy distribution industry in

Victnam which has often delivered Chinese products, the rescarch’s result

may help Viet Tinh Anh JSC to sustain and develop its own distribution channels for high price — high quality LEGO loys, not mention to make a

good mirror for other companies to follow

3 Objectives of the Thesis

‘The Thesis applies academic theories about distribution channels and

significant characteristics of toy market to analyse the situation of Viet Tinh

Anh JSC in managing ils current distribution channels Basing on the analysis

of the strong poimts and weak points of the existing channels, a

comprehensive set of solutions will be suggested to improve the distribution

channels of the company in the commg time

INTRODUCTION

1 Significance of the Topic

Marketing plays an important role in business activities of enterprises,

ospocially in the harshly compelitive market, Comes to markeling, people

refers directly to the 4 Ps or marketing mix which are the typical features of

markeling activities Besides, the managing the distribution channels also plays an important role in the success of the company However, the job of

managing the distribution channels have not received proper attention of the

many company’s owners

Viet Tmh Anh Joint Stock Company, the exclusive distributor of

LEGO one of the most wanted toys brand in Vietnam is an example Since

being established, the company distributes EGO toys mainly through two traditional channels: retailing shops and company’s boutiques in big, shopping

centers [lowever, to make the company grow and compete successfully with

other distributors in the toy market, the company needs to improve the quality

of the existing channels and discover new ones Thus, after an internship in

Viel Tinh Anh Joint Stock Company and see the urgent needs of lhe company

to improve the tumover and fame, | would like to write a ‘Thesis on the topic

of “Developing distribution channels for Viet Tinh Anh Joint Stock Company

to boost the sales of the imported LEGO toys” The thesis is expecicd to

figure out the existing problems in the distibution channel of Viet ‘Linh Anh

Joint Stock Company and then suggest practical solutions to improve the sales for the imported LEGO toys from Denmark

2, Literature Review

In the world history, there have been quite a [ew books, researches,

articles, etc relating to marketing, especially, distribution channels Known as the father of modern marketing, Phillip Kotler has conducted a numerous works on marketing such as Principles of Marketing (13 edition, Jan 7, 2009)

LIST OF TABLES, FIGURES AND PICTURES

Table 2.1 Revenue in the last 6 months 2007-8

Table 2.2 Revenue int the first 6 months 2008-9

Table 2.3 Revenue of direct sales in 2009 and expectation in 2010

Table 2.4 Revenue of direct shops in 2009 and expectation m 2010

Table 2.6 Increase of revenue of retailers and consignments, 2009-10

Table 2.7 Number of intermediaries 2007-09

Table 248 | Indicator to assess performance of retailer and consignment of

Viet Tinh Anh FSC in 2009

Table 29) Level of education of human resource in Viet Tinh Anh

Table 31 | Current and expected number of retailers and consignments of

Viet Tinh Anh JSC

Figure 11 Tdeal types of distribution channels

Figure 1.2, Thistibution channel structures

Vigure 1.3 ‘Typical Channels in Business-to-Business (3213) Markets

Figure 14 ‘An example of distribution channel for mobile

telecommunications service

Figure 1.5 | A Conventional Marketing Channel Versus A Vertical Marketing

Figure 2.1 Model of disinbulion chamels of Viet Tình Anh ISC

Picture 21 Core valus of Viel Tỉnh Anh ISC

Picture 22 Process of providing LEGO loys

Picture 2.3 Children playing LEGO in Smart Garden, Hanoi

Picture 2.5 Fashion Contest for Barbie Doll promoted by Phuong Nga

Picture 3.1 Advertisement of LEGO Club in Viet Nam

Picture 3.2 Management team of Viet Tinh Anh JSC

INTRODUCTION

1 Significance of the Topic

Marketing plays an important role in business activities of enterprises,

ospocially in the harshly compelitive market, Comes to markeling, people

refers directly to the 4 Ps or marketing mix which are the typical features of

markeling activities Besides, the managing the distribution channels also plays an important role in the success of the company However, the job of

managing the distribution channels have not received proper attention of the

many company’s owners

Viet Tmh Anh Joint Stock Company, the exclusive distributor of

LEGO one of the most wanted toys brand in Vietnam is an example Since

being established, the company distributes EGO toys mainly through two traditional channels: retailing shops and company’s boutiques in big, shopping

centers [lowever, to make the company grow and compete successfully with

other distributors in the toy market, the company needs to improve the quality

of the existing channels and discover new ones Thus, after an internship in

Viel Tinh Anh Joint Stock Company and see the urgent needs of lhe company

to improve the tumover and fame, | would like to write a ‘Thesis on the topic

of “Developing distribution channels for Viet Tinh Anh Joint Stock Company

to boost the sales of the imported LEGO toys” The thesis is expecicd to

figure out the existing problems in the distibution channel of Viet ‘Linh Anh

Joint Stock Company and then suggest practical solutions to improve the sales for the imported LEGO toys from Denmark

2, Literature Review

In the world history, there have been quite a [ew books, researches,

articles, etc relating to marketing, especially, distribution channels Known as the father of modern marketing, Phillip Kotler has conducted a numerous works on marketing such as Principles of Marketing (13 edition, Jan 7, 2009)

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City

LIST OF TABLES, FIGURES AND PICTURES

Table 2.1 Revenue in the last 6 months 2007-8

Table 2.2 Revenue int the first 6 months 2008-9

Table 2.3 Revenue of direct sales in 2009 and expectation in 2010

Table 2.4 Revenue of direct shops in 2009 and expectation m 2010

Table 2.6 Increase of revenue of retailers and consignments, 2009-10

Table 2.7 Number of intermediaries 2007-09

Table 248 | Indicator to assess performance of retailer and consignment of

Viet Tinh Anh FSC in 2009

Table 29) Level of education of human resource in Viet Tinh Anh

Table 31 | Current and expected number of retailers and consignments of

Viet Tinh Anh JSC

Figure 11 Tdeal types of distribution channels

Figure 1.2, Thistibution channel structures

Vigure 1.3 ‘Typical Channels in Business-to-Business (3213) Markets

Figure 14 ‘An example of distribution channel for mobile

telecommunications service

Figure 1.5 | A Conventional Marketing Channel Versus A Vertical Marketing

Figure 2.1 Model of disinbulion chamels of Viet Tình Anh ISC

Picture 21 Core valus of Viel Tỉnh Anh ISC

Picture 22 Process of providing LEGO loys

Picture 2.3 Children playing LEGO in Smart Garden, Hanoi

Picture 2.5 Fashion Contest for Barbie Doll promoted by Phuong Nga

Picture 3.1 Advertisement of LEGO Club in Viet Nam

Picture 3.2 Management team of Viet Tinh Anh JSC

LIST OF TABLES, FIGURES AND PICTURES

Table 2.1 Revenue in the last 6 months 2007-8

Table 2.2 Revenue int the first 6 months 2008-9

Table 2.3 Revenue of direct sales in 2009 and expectation in 2010

Table 2.4 Revenue of direct shops in 2009 and expectation m 2010

Table 2.6 Increase of revenue of retailers and consignments, 2009-10

Table 2.7 Number of intermediaries 2007-09

Table 248 | Indicator to assess performance of retailer and consignment of

Viet Tinh Anh FSC in 2009

Table 29) Level of education of human resource in Viet Tinh Anh

Table 31 | Current and expected number of retailers and consignments of

Viet Tinh Anh JSC

Figure 11 Tdeal types of distribution channels

Figure 1.2, Thistibution channel structures

Vigure 1.3 ‘Typical Channels in Business-to-Business (3213) Markets

Figure 14 ‘An example of distribution channel for mobile

telecommunications service

Figure 1.5 | A Conventional Marketing Channel Versus A Vertical Marketing

Figure 2.1 Model of disinbulion chamels of Viet Tình Anh ISC

Picture 21 Core valus of Viel Tỉnh Anh ISC

Picture 22 Process of providing LEGO loys

Picture 2.3 Children playing LEGO in Smart Garden, Hanoi

Picture 2.5 Fashion Contest for Barbie Doll promoted by Phuong Nga

Picture 3.1 Advertisement of LEGO Club in Viet Nam

Picture 3.2 Management team of Viet Tinh Anh JSC

briefly discussed and slatislically ilustraled regional markels include France, Italy, UK, China, and India Also included is an indexed, easy-lo-refer, fact-

finder directory listing the addresses, and contact details of 2,231 companies

worldwide

In Vietnam, there have been also many researches on marketing as well

as distribution channcls because of the developing business almosphere

recently Especially, MA Ngo Quoc IIung finished a master thesis on distribution channel “The development of distribution channels of gold and silver products in Phu Nhuan JSC” However, the thesis was on a very

different kind of products — gold and silver products rather than toys for children So far, there has never been any thesis or research on toys products

in Vietnam More importantly, the LEGO toy products are quite diflerent bevause of its high price, besides, it can help children develop physical and

mental health

‘Therefore, the author believes that the theme of the thesis 1s worth to be

researched Moreover, in the current situation of toy distribution industry in

Victnam which has often delivered Chinese products, the rescarch’s result

may help Viet Tinh Anh JSC to sustain and develop its own distribution channels for high price — high quality LEGO loys, not mention to make a

good mirror for other companies to follow

3 Objectives of the Thesis

‘The Thesis applies academic theories about distribution channels and

significant characteristics of toy market to analyse the situation of Viet Tinh

Anh JSC in managing ils current distribution channels Basing on the analysis

of the strong poimts and weak points of the existing channels, a

comprehensive set of solutions will be suggested to improve the distribution

channels of the company in the commg time

INTRODUCTION

1 Significance of the Topic

Marketing plays an important role in business activities of enterprises,

ospocially in the harshly compelitive market, Comes to markeling, people

refers directly to the 4 Ps or marketing mix which are the typical features of

markeling activities Besides, the managing the distribution channels also plays an important role in the success of the company However, the job of

managing the distribution channels have not received proper attention of the

many company’s owners

Viet Tmh Anh Joint Stock Company, the exclusive distributor of

LEGO one of the most wanted toys brand in Vietnam is an example Since

being established, the company distributes EGO toys mainly through two traditional channels: retailing shops and company’s boutiques in big, shopping

centers [lowever, to make the company grow and compete successfully with

other distributors in the toy market, the company needs to improve the quality

of the existing channels and discover new ones Thus, after an internship in

Viel Tinh Anh Joint Stock Company and see the urgent needs of lhe company

to improve the tumover and fame, | would like to write a ‘Thesis on the topic

of “Developing distribution channels for Viet Tinh Anh Joint Stock Company

to boost the sales of the imported LEGO toys” The thesis is expecicd to

figure out the existing problems in the distibution channel of Viet ‘Linh Anh

Joint Stock Company and then suggest practical solutions to improve the sales for the imported LEGO toys from Denmark

2, Literature Review

In the world history, there have been quite a [ew books, researches,

articles, etc relating to marketing, especially, distribution channels Known as the father of modern marketing, Phillip Kotler has conducted a numerous works on marketing such as Principles of Marketing (13 edition, Jan 7, 2009)

4, Scope of the Thesis

‘The ‘Thesis studies the operation of distribution channels of Viet ‘Tinh

Anh JSC in the past two years and the next three coming years, regarding the

other competitors in the toy market and the current business setling of

Vietnam

Because of the limited time and competence, the Thesis mainly focuses

on sludying the distribution chamels of Viel Tinh Anh JSC for LEGO toys in

the recent years with the limited area of the Northem provinces (mainly in

Hanoi and Hin Phong)

5 Research questions

- What is distribution channel and its role in marketing?

- How docs Viet Tinh Anh JSC operate its distribution channcls?

- How to improve Viet ‘Tinh Anh’s distribution channel to increase its

profit?

6 Research Methodology

To reach the above objectives, the current thesis use the traditional research

methodology which starling with the background of channel distribution and then the situation of the distribution of Viet ‘inh Anh case to find the

application lessons for the company to improve the effectiveness of this

action in the future Most of the analysed documents im this curent reseach

were collected through the secondary data

7 Expected Results

- Giving an overview of the main characteristics of high-end toy market

in big cities in Vietnam

- Finding oul strong poinls and weak points of the operating and

managing the LEGO toy distribution channels of Viet ‘Tinh Anh JSC

- Suggesting solutions to improve the distribution channels for Viet Tinh

Anh SIC lo boust the sales of the imporicd LEGO toys

4, Scope of the Thesis

‘The ‘Thesis studies the operation of distribution channels of Viet ‘Tinh

Anh JSC in the past two years and the next three coming years, regarding the

other competitors in the toy market and the current business setling of

Vietnam

Because of the limited time and competence, the Thesis mainly focuses

on sludying the distribution chamels of Viel Tinh Anh JSC for LEGO toys in

the recent years with the limited area of the Northem provinces (mainly in

Hanoi and Hin Phong)

5 Research questions

- What is distribution channel and its role in marketing?

- How docs Viet Tinh Anh JSC operate its distribution channcls?

- How to improve Viet ‘Tinh Anh’s distribution channel to increase its

profit?

6 Research Methodology

To reach the above objectives, the current thesis use the traditional research

methodology which starling with the background of channel distribution and then the situation of the distribution of Viet ‘inh Anh case to find the

application lessons for the company to improve the effectiveness of this

action in the future Most of the analysed documents im this curent reseach

were collected through the secondary data

7 Expected Results

- Giving an overview of the main characteristics of high-end toy market

in big cities in Vietnam

- Finding oul strong poinls and weak points of the operating and

managing the LEGO toy distribution channels of Viet ‘Tinh Anh JSC

- Suggesting solutions to improve the distribution channels for Viet Tinh

Anh SIC lo boust the sales of the imporicd LEGO toys

LIST OF TABLES, FIGURES AND PICTURES

Table 2.1 Revenue in the last 6 months 2007-8

Table 2.2 Revenue int the first 6 months 2008-9

Table 2.3 Revenue of direct sales in 2009 and expectation in 2010

Table 2.4 Revenue of direct shops in 2009 and expectation m 2010

Table 2.6 Increase of revenue of retailers and consignments, 2009-10

Table 2.7 Number of intermediaries 2007-09

Table 248 | Indicator to assess performance of retailer and consignment of

Viet Tinh Anh FSC in 2009

Table 29) Level of education of human resource in Viet Tinh Anh

Table 31 | Current and expected number of retailers and consignments of

Viet Tinh Anh JSC

Figure 11 Tdeal types of distribution channels

Figure 1.2, Thistibution channel structures

Vigure 1.3 ‘Typical Channels in Business-to-Business (3213) Markets

Figure 14 ‘An example of distribution channel for mobile

telecommunications service

Figure 1.5 | A Conventional Marketing Channel Versus A Vertical Marketing

Figure 2.1 Model of disinbulion chamels of Viet Tình Anh ISC

Picture 21 Core valus of Viel Tỉnh Anh ISC

Picture 22 Process of providing LEGO loys

Picture 2.3 Children playing LEGO in Smart Garden, Hanoi

Picture 2.5 Fashion Contest for Barbie Doll promoted by Phuong Nga

Picture 3.1 Advertisement of LEGO Club in Viet Nam

Picture 3.2 Management team of Viet Tinh Anh JSC

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City

briefly discussed and slatislically ilustraled regional markels include France, Italy, UK, China, and India Also included is an indexed, easy-lo-refer, fact-

finder directory listing the addresses, and contact details of 2,231 companies

worldwide

In Vietnam, there have been also many researches on marketing as well

as distribution channcls because of the developing business almosphere

recently Especially, MA Ngo Quoc IIung finished a master thesis on distribution channel “The development of distribution channels of gold and silver products in Phu Nhuan JSC” However, the thesis was on a very

different kind of products — gold and silver products rather than toys for children So far, there has never been any thesis or research on toys products

in Vietnam More importantly, the LEGO toy products are quite diflerent bevause of its high price, besides, it can help children develop physical and

mental health

‘Therefore, the author believes that the theme of the thesis 1s worth to be

researched Moreover, in the current situation of toy distribution industry in

Victnam which has often delivered Chinese products, the rescarch’s result

may help Viet Tinh Anh JSC to sustain and develop its own distribution channels for high price — high quality LEGO loys, not mention to make a

good mirror for other companies to follow

3 Objectives of the Thesis

‘The Thesis applies academic theories about distribution channels and

significant characteristics of toy market to analyse the situation of Viet Tinh

Anh JSC in managing ils current distribution channels Basing on the analysis

of the strong poimts and weak points of the existing channels, a

comprehensive set of solutions will be suggested to improve the distribution

channels of the company in the commg time

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

briefly discussed and slatislically ilustraled regional markels include France, Italy, UK, China, and India Also included is an indexed, easy-lo-refer, fact-

finder directory listing the addresses, and contact details of 2,231 companies

worldwide

In Vietnam, there have been also many researches on marketing as well

as distribution channcls because of the developing business almosphere

recently Especially, MA Ngo Quoc IIung finished a master thesis on distribution channel “The development of distribution channels of gold and silver products in Phu Nhuan JSC” However, the thesis was on a very

different kind of products — gold and silver products rather than toys for children So far, there has never been any thesis or research on toys products

in Vietnam More importantly, the LEGO toy products are quite diflerent bevause of its high price, besides, it can help children develop physical and

mental health

‘Therefore, the author believes that the theme of the thesis 1s worth to be

researched Moreover, in the current situation of toy distribution industry in

Victnam which has often delivered Chinese products, the rescarch’s result

may help Viet Tinh Anh JSC to sustain and develop its own distribution channels for high price — high quality LEGO loys, not mention to make a

good mirror for other companies to follow

3 Objectives of the Thesis

‘The Thesis applies academic theories about distribution channels and

significant characteristics of toy market to analyse the situation of Viet Tinh

Anh JSC in managing ils current distribution channels Basing on the analysis

of the strong poimts and weak points of the existing channels, a

comprehensive set of solutions will be suggested to improve the distribution

channels of the company in the commg time

24.2 Subjective factors 62 CIIAPTER 3: SOLUTIONS TO DEVELOP DISTRIBUTION CIIANNELS

FOR VIET TINH ANH JSC TO BOOST THE SALES OF THE

3.1 Business cbjective and business strategies of Viet Tinh Anh JSC in

the coming years - - - 64 3.1.1 Business objectives and business stralegics of the company 64 3.2 Suggestions to develop distribution channels for Viel Tink Anh Joint

4, Scope of the Thesis

‘The ‘Thesis studies the operation of distribution channels of Viet ‘Tinh

Anh JSC in the past two years and the next three coming years, regarding the

other competitors in the toy market and the current business setling of

Vietnam

Because of the limited time and competence, the Thesis mainly focuses

on sludying the distribution chamels of Viel Tinh Anh JSC for LEGO toys in

the recent years with the limited area of the Northem provinces (mainly in

Hanoi and Hin Phong)

5 Research questions

- What is distribution channel and its role in marketing?

- How docs Viet Tinh Anh JSC operate its distribution channcls?

- How to improve Viet ‘Tinh Anh’s distribution channel to increase its

profit?

6 Research Methodology

To reach the above objectives, the current thesis use the traditional research

methodology which starling with the background of channel distribution and then the situation of the distribution of Viet ‘inh Anh case to find the

application lessons for the company to improve the effectiveness of this

action in the future Most of the analysed documents im this curent reseach

were collected through the secondary data

7 Expected Results

- Giving an overview of the main characteristics of high-end toy market

in big cities in Vietnam

- Finding oul strong poinls and weak points of the operating and

managing the LEGO toy distribution channels of Viet ‘Tinh Anh JSC

- Suggesting solutions to improve the distribution channels for Viet Tinh

Anh SIC lo boust the sales of the imporicd LEGO toys

INTRODUCTION

1 Significance of the Topic

Marketing plays an important role in business activities of enterprises,

ospocially in the harshly compelitive market, Comes to markeling, people

refers directly to the 4 Ps or marketing mix which are the typical features of

markeling activities Besides, the managing the distribution channels also plays an important role in the success of the company However, the job of

managing the distribution channels have not received proper attention of the

many company’s owners

Viet Tmh Anh Joint Stock Company, the exclusive distributor of

LEGO one of the most wanted toys brand in Vietnam is an example Since

being established, the company distributes EGO toys mainly through two traditional channels: retailing shops and company’s boutiques in big, shopping

centers [lowever, to make the company grow and compete successfully with

other distributors in the toy market, the company needs to improve the quality

of the existing channels and discover new ones Thus, after an internship in

Viel Tinh Anh Joint Stock Company and see the urgent needs of lhe company

to improve the tumover and fame, | would like to write a ‘Thesis on the topic

of “Developing distribution channels for Viet Tinh Anh Joint Stock Company

to boost the sales of the imported LEGO toys” The thesis is expecicd to

figure out the existing problems in the distibution channel of Viet ‘Linh Anh

Joint Stock Company and then suggest practical solutions to improve the sales for the imported LEGO toys from Denmark

2, Literature Review

In the world history, there have been quite a [ew books, researches,

articles, etc relating to marketing, especially, distribution channels Known as the father of modern marketing, Phillip Kotler has conducted a numerous works on marketing such as Principles of Marketing (13 edition, Jan 7, 2009)

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City

briefly discussed and slatislically ilustraled regional markels include France, Italy, UK, China, and India Also included is an indexed, easy-lo-refer, fact-

finder directory listing the addresses, and contact details of 2,231 companies

worldwide

In Vietnam, there have been also many researches on marketing as well

as distribution channcls because of the developing business almosphere

recently Especially, MA Ngo Quoc IIung finished a master thesis on distribution channel “The development of distribution channels of gold and silver products in Phu Nhuan JSC” However, the thesis was on a very

different kind of products — gold and silver products rather than toys for children So far, there has never been any thesis or research on toys products

in Vietnam More importantly, the LEGO toy products are quite diflerent bevause of its high price, besides, it can help children develop physical and

mental health

‘Therefore, the author believes that the theme of the thesis 1s worth to be

researched Moreover, in the current situation of toy distribution industry in

Victnam which has often delivered Chinese products, the rescarch’s result

may help Viet Tinh Anh JSC to sustain and develop its own distribution channels for high price — high quality LEGO loys, not mention to make a

good mirror for other companies to follow

3 Objectives of the Thesis

‘The Thesis applies academic theories about distribution channels and

significant characteristics of toy market to analyse the situation of Viet Tinh

Anh JSC in managing ils current distribution channels Basing on the analysis

of the strong poimts and weak points of the existing channels, a

comprehensive set of solutions will be suggested to improve the distribution

channels of the company in the commg time

4, Scope of the Thesis

‘The ‘Thesis studies the operation of distribution channels of Viet ‘Tinh

Anh JSC in the past two years and the next three coming years, regarding the

other competitors in the toy market and the current business setling of

Vietnam

Because of the limited time and competence, the Thesis mainly focuses

on sludying the distribution chamels of Viel Tinh Anh JSC for LEGO toys in

the recent years with the limited area of the Northem provinces (mainly in

Hanoi and Hin Phong)

5 Research questions

- What is distribution channel and its role in marketing?

- How docs Viet Tinh Anh JSC operate its distribution channcls?

- How to improve Viet ‘Tinh Anh’s distribution channel to increase its

profit?

6 Research Methodology

To reach the above objectives, the current thesis use the traditional research

methodology which starling with the background of channel distribution and then the situation of the distribution of Viet ‘inh Anh case to find the

application lessons for the company to improve the effectiveness of this

action in the future Most of the analysed documents im this curent reseach

were collected through the secondary data

7 Expected Results

- Giving an overview of the main characteristics of high-end toy market

in big cities in Vietnam

- Finding oul strong poinls and weak points of the operating and

managing the LEGO toy distribution channels of Viet ‘Tinh Anh JSC

- Suggesting solutions to improve the distribution channels for Viet Tinh

Anh SIC lo boust the sales of the imporicd LEGO toys

LIST OF TABLES, FIGURES AND PICTURES

Table 2.1 Revenue in the last 6 months 2007-8

Table 2.2 Revenue int the first 6 months 2008-9

Table 2.3 Revenue of direct sales in 2009 and expectation in 2010

Table 2.4 Revenue of direct shops in 2009 and expectation m 2010

Table 2.6 Increase of revenue of retailers and consignments, 2009-10

Table 2.7 Number of intermediaries 2007-09

Table 248 | Indicator to assess performance of retailer and consignment of

Viet Tinh Anh FSC in 2009

Table 29) Level of education of human resource in Viet Tinh Anh

Table 31 | Current and expected number of retailers and consignments of

Viet Tinh Anh JSC

Figure 11 Tdeal types of distribution channels

Figure 1.2, Thistibution channel structures

Vigure 1.3 ‘Typical Channels in Business-to-Business (3213) Markets

Figure 14 ‘An example of distribution channel for mobile

telecommunications service

Figure 1.5 | A Conventional Marketing Channel Versus A Vertical Marketing

Figure 2.1 Model of disinbulion chamels of Viet Tình Anh ISC

Picture 21 Core valus of Viel Tỉnh Anh ISC

Picture 22 Process of providing LEGO loys

Picture 2.3 Children playing LEGO in Smart Garden, Hanoi

Picture 2.5 Fashion Contest for Barbie Doll promoted by Phuong Nga

Picture 3.1 Advertisement of LEGO Club in Viet Nam

Picture 3.2 Management team of Viet Tinh Anh JSC

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

INTRODUCTION

1 Significance of the Topic

Marketing plays an important role in business activities of enterprises,

ospocially in the harshly compelitive market, Comes to markeling, people

refers directly to the 4 Ps or marketing mix which are the typical features of

markeling activities Besides, the managing the distribution channels also plays an important role in the success of the company However, the job of

managing the distribution channels have not received proper attention of the

many company’s owners

Viet Tmh Anh Joint Stock Company, the exclusive distributor of

LEGO one of the most wanted toys brand in Vietnam is an example Since

being established, the company distributes EGO toys mainly through two traditional channels: retailing shops and company’s boutiques in big, shopping

centers [lowever, to make the company grow and compete successfully with

other distributors in the toy market, the company needs to improve the quality

of the existing channels and discover new ones Thus, after an internship in

Viel Tinh Anh Joint Stock Company and see the urgent needs of lhe company

to improve the tumover and fame, | would like to write a ‘Thesis on the topic

of “Developing distribution channels for Viet Tinh Anh Joint Stock Company

to boost the sales of the imported LEGO toys” The thesis is expecicd to

figure out the existing problems in the distibution channel of Viet ‘Linh Anh

Joint Stock Company and then suggest practical solutions to improve the sales for the imported LEGO toys from Denmark

2, Literature Review

In the world history, there have been quite a [ew books, researches,

articles, etc relating to marketing, especially, distribution channels Known as the father of modern marketing, Phillip Kotler has conducted a numerous works on marketing such as Principles of Marketing (13 edition, Jan 7, 2009)

— with co-author Gary Amstrong In this book, Phillip Kotler and Gary Amstrong pointed out some most updated measures in modern marketing in order to make the products most marketable in recent business environments

The work also succeeded in revealing the role and relationship between

distribution channels with other elements in a marketing strategy

On the website http://www.articlesnatch.com, many articles on

distribution channels have referred to many case studies on distribution strategies of big corporations in the world Furthermore, the articles focus on how to reduce channel conflicts, the importance of stock management and

distribution fulfillment to run a business efficiently, internet marketing distribution, and multi—channel retail integration

The global outlook series on Distribution Channel Research provides a

collection of statistical anecdotes, market briefs, and concise summaries of

research findings The report offers a bird’s eye view of the structure of the distribution channel system, and the changing trends dotting its landscape Discussion on the global market is lined up with concise primers on major distribution channel markets, such as, Agricultural Sector, Retail Banking, Insurance Sector, and Mutual Funds The reader stands to gain an

understanding of market fundamentals, and learn the truth behind multi-

channeling trends in the developed markets, and the simple math underlying the correlation between product performances, effective product penetration, and gap analysis and locating the customer market, among others The report highlights recent mergers, acquisitions, and other noteworthy corporate developments The retailing/distribution landscape in the US is quantitatively

analyzed, and annotated with 46 market data rich tables that portray the

prevalent retailing practices and distribution infrastructure scenario in select

industries such as Cosmetics (Fragrances, Hair Care, Health & Beauty Aids),

Office Products, Consumer Food & Beverage Products, Individual Life

Insurance, Lamps, Table Linens, Home Textiles, Wall Décor, Fashion-

Licensed Merchandise, and Over-the-Counter Drugs, among others, Other

LIST OF ABBREVIATIONS

Chief Fxecutive Officer

Chief xecutive Official

Joint Stock Company

Ho Chi Mith City