SOLUTIONS FOR THE HAI CHAU CONFECTIONERY COMPANY’S PRODUCT STRATEGY TO PROMOTE CUSTOMER SATISFACTION

With a view to helping the Hai Chau Confectionery Company to gain big market share in the severely competitive market, a study is conducted based on analysis of the company’s product strategy and its customer’s feedback. The study was approved by the head of the company’s R & D department.

SOLUTIONS FOR THE HAI CHAU CONFECTIONERY COMPANY’S PRODUCT STRATEGY TO PROMOTE

CUSTOMER SATISFACTION

Presented to The sales manager Sales department, the Hai Chau Confectionery Company

Prepared by

Vu Thi Thu Toan

R & D department, the Hai Chau Confectionery Company

October 25, 2009

TABLE OF CONTENTS

EXECUTIVE SUMMARY………3

INTRODUCTION……… 4

BACKGROUND……….4

ANALYSIS OF FINDINGS……… 5

ASSESSMENT OF THE COMPANY’S PRODUCT STRATEGY……… 5

CUSTOMER’S FEEDBACK……….9

ABOUT PRODUCT QUALITY……….9

ABOUT PRODUCT PACKAGE……… 9

IN COMPARISON WITH ITS RIVALS……… 10

RECOMMENDATIONS……… 11

CONCLUSION……….11

REFERENCES……… 12

QUESTIONAIRE……… 13

LIST OF FIGURES Figure 1 Consumption results by category……….6

Chart 1 Product output by category ……… 7

2 Product proportion by category……… 8

3 Market share of some company in confectionery market in 2006 ……….8

4 Customer’s feedback about the company’s product quality……… 9

5 In comparison with its competitors………10

EXECUTIVE SUMMARY

With a view to helping the Hai Chau Confectionery Company to gain big market share in the severely competitive market, a study is conducted based on analysis of the company’s product strategy and its customer’s feedback The study was approved by the head of the company’s R & D department

Conclusion of the report is based on information and data collected from the sales

department of the company and a survey of 200 customers living around Hanoi

There are 4 main parts in the report:

First, Background of the company, purpose of the study and source of data is mentioned This part helps readers have an overview of the Hai Chau Confectionery Company and the reasons why the study is conducted

Second, through assessing implementation of the company’s current product strategy, achievements and shortcomings of the company are listed and analyzed This is an important part support for giving suggestions for the company

Third, Customer’s feedback about the company’s products are discussed and analyzed in the form of figures and charts From this, it is also easy for us to withdraw solutions for the company

Next, based on the preceded analysis, recommendations are given with some helpful solutions for the Hai Chau company

Finally, like every report this one is ended with the conclusion part, summarizing main points and repeated raised suggestions

On the basis of the findings, it is recommended that the Hai Chau Confectionery

Company should promote its market research activities to support for meeting customer demand in production Besides, the company must diversify more its category of

products, combine well 4P-strategies in marketing, and export its products to foreign markets

INTRODUCTION: THE HAI CHAU CONFECTIONERY COMPANY BACKGROUND

The Hai Chau Confectionery Company, a state-owned company, specializes in producing and trading various kinds of confectionery and food stuff The company has been

growing, but it has to compete with big rivals in the field such as: the Kinh do

Corporation, Hai Ha Confectionery J.S.C, Bibica Corporation,etc That requires the company to carry out effective product strategy to make it different from its competitors and to win customer’s confidence and stand firmly in the market Therefore, a study looking into the current product policy of the company is significant After being

approved by the sales manager, a survey on the company’s product strategy and

customer’s opinion are done

This study is conducted to analyze current product strategy of the Hai Chau

Confectionery Company and assess feedbacks from interviewed customers in Hanoi about that strategy Then, it focuses on finding out solutions for promoting customer satisfaction In other word, the study seeks answers to these questions:

● How has the company implemented its product strategy recently? What are effects of the strategy on consumption situation of the company in the recent?

● Do the company’s products satisfy customers?

● What should the company do to promote customer satisfaction about its products in the future?

Data for the report is collected from a survey of 200 customers of The Hai Chau

Confectionery Company living around Hainoi city, current articles, and online resources

ANALYSIS OF FINDINGS

I/ Assessing Implementation of The Hai Chau Confectionery Company’s Current Product Strategy.

1/ The Company’s Current Product Strategy:

In the research, the product policy of the company is reviewed It reveals the followings:

▪ The company has renovated and modernized technology and equipment, mainly

imported from Germany, Holland, Italy, Taiwan, China, and Korea supporting for

producing high quality products

▪ Product quality inspection of the company is carried out rigorously from the purchase of raw materials until the products are warehoused through technical staff

▪ Target markets of the company are mainly markets in the Northern and Middle of the country, in which most of customers have low income Thus, they like products with low price but high quality and modish, elegant packages

▪ Target customers of the company are people of all ages but mainly have average or low income

▪ The products are varied with 100 types such as: candies, biscuits, sandwiches, cream wafers, chocolate sweets of all kinds and iodized seasoned salt

Biscuit with ten different types, flavor and performances are well known and getting considerable share in the market

Cream wafer, chocolate coated cream wafer produced on German and Dutch

production lines - one of the most modern technology in Vietnam, won Golden medals during International Trade Fair of Vietnam Industrial Products

Iodized seasoned salt is very essential in every Vietnamese family, produced as a result of the Vietnam-Australia National program of anti-insufficient disease lodine, can supply a certain amount lodine needed for the brain, health and physical development

Candy has been drawing a great attention and interest from customer by its newly appeared products in the market Two new production line are enable Hai Chau to make

10 candy types of different tropical fruit favor such as Soft candy, toffee, chewy and hard candy with high quality and nice performance of all types

▪ Product net weight and package are diversified as well For example, cream wafer has types of 110gr, 200gr, 270gr, 470gr Paper, plastic, and iron boxes are used in packaging the products instead of merely plastic bags as usual These kinds of package not only protect well the products as being transported but create more choices for customer

2/ Achievements:

Figure 1: Consumption results by category

Products

2004 2005 2006 2007 Increasing rate Output

(ton) %

Output (ton) %

Output (ton) %

Output (ton) %

05/04 (%)

06/05 (%)

07/06 (%)

1 Biscuit 6,142 41.42 6,563 40.84 7,103 40.75 7,750.3 38.31 6.85 8.2 9.1

2 Candy 1,317 8.88 1,512 9.41 1,840 10.55 2,293 11.33 14.8 21.7 24.6

3 Iodized

seasoned salt

7,370 49.7 7,992 49.75 8,485 48.7 10,184 50.36 8.43 6.2 20

9

100 16,06

7

100 17,42

8

100 20,227

3

100 8.3 10.3 16.1

( Source: Sales Department- The Hai Chau Confectionery Company )

0 2000

4000

6000

8000

10000

12000

Year

Output

Biscuit Candy Iodized seasoned salt

Chart 1: Product output by category

0

10

20

30

40

50

60

Year

%

Biscuit Candy Iodized seasoned salt

Chart 2: Product proportion by category

It can be seen from the figures and diagrams that consumption output of all types of product increased every year For instance, biscuit is the major product of the company There are various kinds of biscuit with high quality, specific flavor meeting customer need The product always accounts for large proportion at average of 40% a year Candy makes up the least proportion of 8,88%; 9,41%, 10,55%, and 11,33% respectively from

2004 to 2007 On the contrary, Iodized seasoned salt occupies the most proportion of all types It has created customer loyalty for many years For example, in 2007 its output was 10.184 accounting for more than 50% which is positive figure for the company

Therefore, through the figures it can be inferred that the company’s strategy is rather effective

3/ Shortcomings:

Besides the achievements, the company faces difficulties and still has some shortcomings

to be made good

* Lack of qualified market researchers: In the recent years, market researchers of the company are recruited more but they are still insufficient Moreover, most of them are unqualified and not active in market research Thus, information about the company’s competitors and customer need is not up-dated regularly and exactly to support for adjusting and creating new products

* Although the company’s products are diversified, they are mainly used to serve low income customers, especially, ones living in the remote and mountainous areas

* Besides, compared with those of its rivals, the company’s products are lack of

competitiveness in category, package, flavor, etc As a result, its market share is small

compared to its competitors as showed in the following chart.

Chart 3: Market share of some company in confectionery market in 2006

II/ Customer’s Feedback About The Company’s Products

1 About Product Quality:

In response to the question : “ What do you think about quality of the Hai Chau

Confectionery Company’s products that you have ever used?”, most of the interviewed customers show their satisfaction with quality of the products of the company This is a positive sign for the company However, when being asking about the specific products, they gave different answers for each kind of product For example, for biscuit of the company, they said kinds of the biscuit have not been diversified in flavors For candy and Iodized seasoned salt, customers seem to be more satisfactory with them than biscuit

4% 7%

8%

7%

74%

Hai Chau Hai Ha Kinh §o Bibica Other suppliers

About product quality

52%

0%

5%

rather good rather bad very bad

Chart 4: Customer’s feedback about the company’s product quality

2 About Product Package:

As mentioning to product package, some customers felt like the company’s product package but some did not For most of them, they care about the product quality, price, and weight But, for some higher income customers, they choose products with high quality, eye-catching and elegant packages no matter how much their prices are This is a point that the company should focus more in the future to produce products meeting all kinds of customer demand

3 In Comparison With Its Competitors:

A related question is raised : “ What has not the Hai Chau Confectionery Company done well compared to its rivals such as : the Kinh Do Corporation, Hai Ha Confectionery J.S.C, Bibica Corporation, etc.?” Customers’ answers are illustrated in following chart

In comparison with rivals

35%

15%

38%

12%

Product Price Promotion Place

Chart 5: In comparison with its competitors

It is inferred from the chart that the company’s product and promotion have not satisfied customers 35% of the customers thinks the company’s products are not as good as its rivals and 38% of them finds it necessary for the company to promote advertising its products In details, about product customers think to compete in today markets the company should adjust some elements of its products For instance, it should diversify more products with high quality, special flavors, and elegant colors

RECOMMENDATIONS

After assessing the Hai Chau Confectionery Company’s product strategy and collecting customer feedback about it I have some suggestions for the company to promote

customer satisfaction

● The company should enhance market research activities by recruiting and training more qualified market researchers to support for up-dating continuously changing need of customer

● It is essential for the company’s products to be diversified more in flavor, weight, form

of package, etc to serve more group of customers such as high income customers in addition to average and low income ones

● To compete with its rivals, the company needs to make a breakthrough in its products For example, the company can experiment and produce new kinds of biscuit or candy that meet customer demand

● It is very crucial for the company to combine well 4P-strategies in marketing to

promote sales, especially, product and promotion strategies as customer feedback

● It is a good idea for the company to export its product more and more to foreign

markets

CONCLUSION

To summarize, the Hai Chau Confectionery Company has reached some certain

achievements in product and satisfied customers to some extent However, with severe competition in today market the company must try more to promote sales and win

customer’s confidence Some solutions are given for the company as mentioned

Especially, the company should promote market research and focus more on diversifying its products to gain more market share in the country Also, there is new and effective trend for the company to export its products to foreign markets in the world

1 Quach Manh Cuong ( 2005) “Thực trạng hoạt động tiêu thụ sản phẩm ở công ty bánh

kẹo Hải Châu”, Internship Report , NEU, Hanoi.

2 Kotler, Ph., Armstrong, G ( March 9, 2007 ) Principals of Marketing Prentice Hall.

3 http:// haichau.com.vn

QUESTIONNAIRE

In order to help the Hai Chau Confectionery Company know about customers’ reactions and then, to find out solutions for adjusting and meeting more and more customers’ need

We are conducting a survey about How good is sales promotion activities, especially

marketing-mix adaptation, of the Hai Chau Confectionery Company We would like to receive your cooperation to finish it by answering the following questions Please, choose one of the answers for each question

1/ Do you know the Hai Chau Confectionery Company or Have you ever used any product of the company ?

A YES B NO

If you choose the answer A, please continue with the followings :

2/ How often do you buy products of the company?

A Rarely C Often

B Sometimes D Regularly

3/ What do you think about quality of the Hai Chau Confectionery Company’s products that you have ever used ?

A Good C Rather bad

B Rather good D Very bad

4/ What are you unsatisfied with kinds of the company’s biscuit?

A Undiversified flavor C Unattractive package

B Undiversified net weight D High price

5/ What are you unsatisfied with kinds of the company’s candy?

A Undiversified flavor C Unattractive package

B Undiversified net weight D High price

6/ What are you unsatisfied with kinds of the company’s iodized seasoned salt ?

A Undiversified flavor C Unattractive package

B Undiversified net weight D High price

7/ What do you expect from the company’s product package? It must be :

A modest and simple C eye-catching

B elegant D It is unimportant 8/ In comparison with the company’s competitors such as: the Kinh Do Corporation, Hai