Selling activities of Ha Trung Plastic Technology JSC

Selling is a process by which one person guides other people''s behavior along a path in a desired direction, culminating in the purchase of a product or service

Viet Nam ‘s effort to restructure the economy really got underway withthe Sixth Party Congress held in December 1986 Our economic structuremechanism was really changed from planned market oriented economy tomarket oriented economy Then Vietnam's membership in the ASEAN FreeTrade Area (AFTA) and entry into force of the US-Vietnam Bilateral TradeAgreement in December 2001 have led to even more rapid changes in Vietnam'strade and economic regime Following over a decade long negotiation process,Viet Nam became the official one of members of WTO in January 2007 Theeconomy have moved to implement the structural reforms needed to modernizeitself and to support more competitive, export-driven industries This fasteconomic development results that the main target of every Vietnameseenterprises is how to complete with other domestic and foreign enterprises

Getting to know of the importance of changing, during probation period at

Ha Trung Plastic Technology Joint Stock Company( Ha Trung JSC), I have

decided to choose the subject “Selling activities of Ha Trung Plastic Technology JSC” for my graduation thesis

In my view, this is interesting subject Many researchers is trying toresearch and set up detail marketing plans as well as selling plans for their ownproduct

I would like to thank my supervisor Nguyen Luong Long MBA for hiscoaching and comments during the carrying out of thesis Without the intensiveassistance of my supervisor the results of this thesis would never have beenpossible

Further, I would like to thank all professors of Hanoi University of Businessand Technology and Managers of Ha Trung JSC for their support and kindnesstoward me

Chapter 1 theoretical and practical background I/ Theoretical background

1/ Selling:

Selling is a process by which one person guides other people's behavioralong a path in a desired direction, culminating in the purchase of a product orservice.Good selling is convincing someone of something they didn’t think theyneeded, they buy it and love it and realize they did need it!! Life insurance, orcar breakdown and recovery cover, or double glazing, or a mobile phoneagreement The most of the skills are out there in the public domain, more sothan ever before It’s like how we learn to use the Internet: somehow, we soak upthe universal knowledge

Many people know what it takes to be good at selling, it’s just a matter ofapplying it Sellers know there’s enough books and stuff on the Internet, and ifsellers have got the driver and motivation to read them, then they are likely tohave the same drive that makes them good and successful at selling

The selling concept is practiced most aggressively with unsought goods goods that buyers normally do not think of buying, such as insurance and funeralplots The selling concept is also practiced in the nonprofit area by fund-raisers,college admissions offices and political parties Most firms practice the sellingconcept when they have overcapacity Their aim is to sell what they make ratherthan make what the market wants In modern industrial economies, productivecapacity has been built up to a point where most markets are buyer markets( thebuyers are dominant) and sellers have to scramble for customers Prospects arebombarded with sales messages As a results, the public often identifiesmarketing with hard selling and advertising

-However, marketing based in hard selling carries high risks If assumes thatcustomers who are coaxed into buying a product will like it: and if they don’t,that they won’t bad-mouth or complain to customer organizations and will forgettheir disappointment and buy it again These are indefensible assumptions Onestudy showed that dissatisfied customers may bad-mouth the product to 10 ormore acquaintances: today bad news travel even faster and father with theInternet

2 Types of Selling

- Service-Oriented Selling

The focus is on the product communication information about products,merchandise or services The sole function of the salesperson is to process salestransactions Consumers make their own decisions about how the productsatisfies their needs

Service sales are the easiest to make.

- Developmental Selling

+ The focus is on the customer The product is positioned by thesalespeople in relation to the needs of prospects

+ Involves much more creativity than service selling

+ Requires acquiring knowledge about the market, economy, client

2/ Selling process

Most of sale professionals agree on the major steps ( see chart 1) involved

in any effective sale process as follows:

- Prospecting and qualifying : The first step in selling is identifying and

qualifying prospects The purpose of this step is to find potential buyer who have

a need for your product, the ability to afford it, the authority to make the buyingdecision For instance, sales representatives at Gulfs tram Aerospace, which sellscorporate jets, focus their selling effort at those finite number of company thatcan afford to buy jets and at the top executive who will benefit most and whohave authority to approve the purchase

- Preapproach: the successful salesperson prepares before actually making

the first cal, learning as much as possible about the prospect (whenever a person

or company) and the prospect’s want and needs Then the salesperson shouldplan a strategy – including determining the best initial contact approach (phone,visit, letter, email) and selecting the right time to make that initial contact

- Approach: in the initial contact, the salesperson will want to make a good

first impression and begin building a rapport with the customer Little things –dress attire, use of language, mannerisms –may seem superficial but thecontribute to that first impression In some businesses, it can take years to make

an eventual sale For instance, a sales rep at Herman Miller, the furnituremanufacturer, spent ten years calling on the Pentagon before he landed a majorcontact The approach step in the sales process lays the foundation for buildingand continuing a relationship

- Presentation and demonstration: the presentation and demonstration must

be tailored to the customer’s needs The salesperson needs to effectively grab thecustomer’s interest and arouse desire A good sales presentation will describe theproduct’s futures, advantage, benefits and value- all in terms of the customer’spoint of view Company like Xerox, Cisco systems and Guffstream Aerospaceinvest heavily in sales training to ensure that their salespeople know theirproducts inside and out

- Overcoming objections : customer almost always have questions and

doubts .It’s the salesperson’s responsibility to overcome them Objections

shouldn’t be seen as negative or threatening They’re natural part of the salesprocess But a trained and knowledgeable salesperson- one who knows both theproduct being sold and potential customer’s needs- is equipped to successfullyovercome objections.

Chart 1 The seven steps in effective selling;

- Closing : the successful sales has the confidence and timing to know

when to “ask for the sale” Sales training programs typically include a number oftechniques that can be effective closer

- Follow-up: Selling should be viewed as part of creating a relationship As

such, the sale isn’t over when the customer says yes and an order is written Theend goal is a satisfied customers To ensure that goal is reached, the effectivesalesperson makes a follow- up call to certify that the order was received in thecondition expected, to make sure the customer is happy with the product, and toask what additional service if any the sales representative can provide

PrpProspecting and qualifying

Preapproach

Presentation Demonstra tion Approach

Overcoming objections

Closing

Follow up

3 Practical background of VietNam Plastic Industry

The plastic industry commenced almost half a century ago in Vietnam;however, the production remained limited and diminutive until recent years.Thus, the Vietnamese plastic industry is considered still in its infancy compared

to that of other countries in the region like Malaysia, Singapore, Thailand andChina By way of comparison, Vietnam’s production output of plastics percapita was 25 kg of plastic per person in 2005, and is expected to rise to 40 kgper capita by 2010 Although this is a rapid increase, plastic output per capita

of Malaysia in 1999 was 49kg, five times higher than Vietnam’s figure in thesame year (9.4kg) Singapore’s output per capita for the same year was 10 timeshigher and Thailand’s was three times greater and even Indonesia was two timesgreater for the same period

Currently, there are about 2700 plastic corporations in Vietnam, 80% ofwhich are of small or medium size and privately owned Only 6% are state-owned, but they represent about 20% of the total capital invested in the industry.State-owned companies tend to be larger and to employee more workers andhave a greater investment total than their small or medium sized privatecompetitors The rest are foreign invested enterprises, with about 35% in terms

of overall capital investment

Despite its somewhat smaller size than competitor markets in China,Thailand and Malaysia, plastics is a growth industry in Vietnam with an annualgrowth rate of around 30 percent per year in recent years This growth has madeplastics a major export earner for the country In 2005, Plastics was third aftercoal and rice as the fastest growing sector despite the rapid rise of petroleum andother inputs that caused major jumps in plastic resins prices This growth hasbeen noted particularly by regional competitors such as Malaysia which hasresponded by investing to try to develop new markets Examples of this are PolyTower Ventures Bhd, and Tong Guan Industries Berhad are both openingfactories in Vietnam shortly , in order to gain both local market share and to beable to take more orders from EU and the U.S

Chart 2

Plastics are one of the most important and versatile materials in the globaleconomy Plastics are durable, strong, lightweight, and resistant to chemicals;they can be transparent, translucent, or opaque; soft, flexible, or hard; insulators

or conductors of heat and electricity They can be fabricated into almost anyshape and size And they are recyclable using multiple resource recoveryoptions From packaging to aerospace applications, plastics provide designers,engineers, manufacturers, and consumers with products that contribute toeconomic growth, sustainability of the environment, and a higher standard ofliving worldwide Inherently light weight, plastics are an efficient use of naturalresources Plastic products are used as the basis for manufactured articles (such

as toys) and as components of manufactured products (such as automobiles)making plastics an important and strategic factor in economies in whichmanufacturing plays a significant role As developing countries enter into themanufacturing stage of economic development, plastics will continue to grow inimportance There is already international trade in end-of-life products for thepurpose of reclaiming or recycling the plastic components Plastics productsfigure in all nine ISO technical sectors: Agriculture and food technology;Construction; Electronics, information technology and telecommunications;Engineering Technology; Generalities, infrastructure and sciences; Health,

safety and environment; Materials technologies; Special technologies; Transportand distribution of goods.

The national plastic industry produces virtually all of what the domesticmarket consumes and production is currently more oriented toward domesticitems and packaging vis- -vis export Vietnam’s internal market is changing andà-vis export Vietnam’s internal market is changing andincreasingly there is more demand for hi-tech plastics products Prior to 2004,all Vietnamese plastic products were manufactured with genuine plastic resins.Since then, to comply with the growing demand, the government has allowed theimports of cheaper plastic scrap: Vietnam is Asia’s second largest importer ofplastic materials Nonetheless, such fact is raising an issue as raw plasticmaterial prices have soared recently The plastics industry in Vietnam tends to behighly labor intensive A survey in 2004 revealed that 70% of the labor force inthe Vietnamese plastic industry is unskilled, seven times higher than thecombined average of other sectors Most plastics companies employ between 10and 50 people The average monthly salary for a plastics industry employee isjust under 2 million VND, with a large degree of variation depending on whetherthe company is foreign or locally owned and dependent on location of thefactory facility

The development strategy of Vietnam's plastics industry to 2010 has statedthat the industry will need investment of US$ 3 billion to achieve industry goals.The plan outlines an integrated plastics industry where raw materials would bealmost exclusively supplied by in-country resources and product is both used fordomestic selling and export By 2005, 30% of the industry's demand onmaterials should be supplied domestically, lessening its heavy dependence onimports The industry will focus on replacing and upgrading machinery andequipment for raw material production and hi-tech products such as constructionmaterials, parts for the auto, motorcycle, and refrigeration equipmentindustries

The Vietnamese plastics industry is highly dependent on imports Currentlythe Vietnamese plastic industry must import about 1.5 - 2 million tons of rawmaterials annually, plus hundreds of auxiliary chemicals used in the plasticsindustry Domestic raw materials can meet only 30 percent of the country’sdemand In 2004 Vietnam was Asia’s second largest importer of plasticsmaterials The Vietnamese government is attempting to promote importsubstitution by helping to finance several domestic production facilities but thegovernment forecasts that Vietnam will still have to import roughly half of theresins it needs after these production facilities are completed in 2010

Vietnam is dependent upon polyethylene (PE), polypropylene (PP),polyvinyl chloride E (PVCE) and polyvinyl styrene (PS) imported from abroad.Vietnam is less dependent upon imports of B oriented polypropylene (BOPP),polyvinyl chloride S (PVCS) and dioctyl phthalate (DOP) resins as growingamounts of this are being produced domestically - supply is still inadequate tomeet demand

The major plastic exporters to Vietnam are regional countries such asChina, South Korea, Japan and Taiwan In 2005, Vietnam imported 1,147 MT ofboth raw materials and finished products The plastic import value was

$1,426mil, equal to four times of export value of $350 in 2005 In 2004,Vietnam exported only 10 percent of total output, i.e 90 percent for domesticdemand (VPA)

Vietnamese plastics products have been shipped to many countries, such asCambodia, Laos, India, Sri Lanka, Japan, China, the EU, Taiwan and the US Investment opportunities exist in the packaging field, plastics machineryproduction, plastics resin production and waste plastics reprocessing sub-sectors

Chapter2 the situation and selling of hatrung plastic technology joint stock company

I The outlines of HaTrung JSC

1 The history of Ha Trung JSC

HaTrung company is based in 551 Nguyen Van Cu, Long Bien district, HaNoi, is a joint stock company which started on 1/6/1994 with businessregistration number 0103004549

Company provides a broad range of plastic bags, packaging supplies andpoly tubing, food services and industrial packaging markets, nylons and supermarket bags, goods relate plastic Plastic goods comes up to the standard ISO

4427 : 1996, TCVN 7305 : 2003 , BS 3505:1968, AS/NZS 1477:1996,

Being one of a few known plastics company in Vietnam having in-line amold design and manufacture site and workshops with blow and injectionmolding technology Ha Trung is always committed to right timing and goodcontrol of quality products Applying the quality control system ISO 9001 helps

Ha Trung to make good control of the process and ensure customers’satisfaction

Ha Trung’s factory is equipped with modern machines and tools, and theyare always upgraded annually by famous providers as K Krauss-Maffei,Cincinnati, Corma, In parallel, Ha Trung’s engineers and staffs are well andprofessionally trained With these advantages, products of Ha Trung andprecision molds always are the first choice of customers in the Vietnamesemarket

2 Management and organization structure

Ha Trung company’s organization has line-functional structure With thisstructure, company has a clear line or chain of command running down fromhighest passions to lowest positions All people in the organization know whatdecisions they are able to make, who their superior( or boss) is ( to whom theyreport), and who their immediate subordinates are( to whom they can giveinstructions)

Chart3: The company organizational structure

Board of director

Marketing department Accounting depart Production depart Agency management

depart

a.Board of director: (CEO and Deputy Directorare responsible for setting

sales and profit goals for every year that are elaborated into specific goals foreach lower level

- The chief executive officer and his Deputy is the most important role in the management of an organization.

+ They are leaders of company, always give advises the board

+ Advocates / promotes organization and stakeholder change related toorganization mission

+ Supports motivation of employees in organization products/ programs

and operations

- They have a visionary and give information bearer:

+ Ensures staff and Board have sufficient and up-to-date information

+ Looks to the future for change opportunities

+ Interfaces between Board and employees

+ Interfaces between organization and community

- And they are decision marker:

+ Formulates policies and planning recommendations to theBoard

+ Decides or guides courses of action in operations by staff

- They are managers in the company:

+ Oversees operations of organization

+ Implements plans

+ Manages human resources of organization

+ Manages financial and physical resource

- They are a board developer:

+ Assists in the selection and evaluation of board members

+ Makes recommendations, supports Board during orientation and

self-evaluation

+ Supports Board's evaluation of Chief Executive

b The Marketing Department

+ The marketing organization consists of functional specialists: geographicarea, product or customer markets ( such as the sales manager and marketingresearch manager) who report to a marketing vice president, who coordinatetheir activities They research market and give tactics, strategies to compete.+ Managers finds market, makes relationship with customers, solving andcustomer care, increasingly please regional and local sale group, understand anddeal with individual customers rather with the mass market or even marketsegments

+ Examining whether the planned results are being achieve Marketersstudy strategies, strength and weak of product to compete with competitor’s + Marketers today are showing a growing interest in developing bettermarketing metrics for measuring marketing performance.

c Production department

Production is the functional area responsible for turning inputs into finishedoutputs through a series of production processes The Production Manager isresponsible for making sure that raw materials are provided and made intofinished goods effectively He or she must make sure that work is carried outsmoothly, and must supervise procedures for making work more efficient andmore enjoyable In a manufacturing company the production function may besplit into five sub-functions:

1 The production and planning section will set standards and targets for

each section of the production process The quantity and quality of productscoming off a production line will be closely monitored In businesses focusing

on lean production, quality will be monitored by all employees at every stage ofproduction, rather than at the end as is the case for businesses using a qualitycontrol approach

2 The purchasing section will be responsible for providing the

materials, components and equipment required to keep the production processrunning smoothly A vital aspect of this role is ensuring stocks arrive on timeand to the right quality

3 The stores section will be responsible for stocking all the necessary

tools, spares, raw materials and equipment required to service the manufacturingprocess Where sourcing is unreliable, buffer stocks will need to be kept and theuse of computerized stock control systems helps keep stocks at a minimal butnecessary level for production to continue unhindered

4 The design and technical support section will be responsible for researching

new products or modifications to existing ones, estimating costs for producing indifferent quantities and by using different methods It will also be responsible forthe design and testing of new product processes and product types, together withthe development of prototypes through to the final product The technical supportdepartment may also be responsible for work study and suggestions as to how

5 The works section will be concerned with the manufacture of products This

will include the maintenance of the production line and other necessary repairs.The works department may also have responsibility for quality control andinspection

Marketing is concerned with knowing and understanding the requirements

of customers, so that Production can provide the market led products that arerequired This also requires excellent communication systems to be in place

d The Accounting department

- Accounting is a process of measuring, recording, classifying, andsummarizing financial data that will be useful for CEO decides in makingeconomic plans

- The Accounting Department is in charge of the finance management forcompany, notice to board of management on assets and liabilities, debts, submitsuggestion to make prices for product owners of the business, creditors thathave loaned money to the entity, labor unions, and taxing authorities

e Agencies Management Department

- Managing wholesale and retail sale agencies, showrooms

_ Collecting market information directly, opinion of customers to helpcompany making competition strategies

All departments are connected each other and created a union organizationwhich provides information which helps Management Board control annual plan

of company and development strategies,

II Business activities of Hatrung JSC

1.Business activities

a/ Materials:

Company searches material resources itself, Hatrung usually imports

material for production of customer goods from domestic companies such asHaNoi Plastic Company, Tien Phong Plastic Company, Binh Minh Company and Company imports PVC, PP, Dor for production of nylon bags, kinds of film,food services and industrial packaging material from foreign companies ofJapan, Thailand, China, Taiwan , and plastic suppliers in Hung yen, Phu Ly,Hai Duong

b/ Sales revenue and profit

chart 03: result of business activities

Disparity 2005/2004 Absolutely

9 original price of fixed assets 2.324.581.809 2.353.581.809 + 29.000.000 + 1,24

After many years in business activity, Ha Trung has developed very fast.Development of company through follow figures :

As you can see, goods sales are rising rapidly Comparing 2005 to 2006,

we can see good image of Ha Trung company

*turnover 2006 / 2005 increase 45,01% this is largely due to improvedtactics and methods in business activities which make employees concentrated

on producing

*total profit has increased for 43,12% It showed that selling activity ispretty good and favors This is a result of trying employees’ best It proved thatthe capital resource of company is always stable and can ensure of businessactivity next year

Beside of production, HaTrung takes apart on other activities such as:confinement for other companies, importing for them and receiving commission.Commission depends on value of contract (0,9% for contract under 100.000USD) Although this activity doesn’t bring a big profit but it’s pretty stable toincrease yearly revenue and brings good relationship with other companies

c/ Labor force:

Labor force has an importance role in the company They are the factorwhich can ensure quality, quantities of product for company They are a mainforce during selling process

Chart 4: labour force

45 5