Explore a winning sales approach for hospitality industry in vietnam

EXPLORE A WINNING SALES APPROACH FOR HOSPITALITY INDUSTRY IN VIETNAM In Partial Fulfilment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION Major at International

EXPLORE A WINNING SALES APPROACH FOR

HOSPITALITY INDUSTRY IN VIETNAM

MASTER OF BUSINESS ADMINISTRATION

EXPLORE A WINNING SALES APPROACH FOR

HOSPITALITY INDUSTRY IN VIETNAM

In Partial Fulfilment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Major at International Business

by

Mr Dang Minh Tri ID: MBA01042 International University - Vietnam National University HCMC

April 2013

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Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfilment of the

requirements for the degree

Approved:

-

-

-

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PLAGIARISM STATEMENTS

I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam

National University Hochiminh City

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COPYRIGHT STATEMENT

This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may

be published without the author’s prior consent

DANG MINH TRI – MBA 01042- YEAR 2013

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TABLE OF CONTENT

1.2 Introduction of B2B and Hospitality industry 2

1.2.3 B2B Hospitality projects in Vietnam 3

1 3 Purposes of the research (research significance) 6

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1.6.4 Chapter 4: Findings 8 1.6.5 Chapter 5: Conclusion and Recommendation 8

2.3.7 Gate Keepers 21

2.4 Classification into “Buying Stages” 21

2.4.1 Stage 1: Problem Recognition 21 2.4.2 Stage 2: General need description 22

2.4.3 Stage 3: Product specification 22 2.4.4 Search for potential suppliers and evaluate 23

2.4.5 Proposal solicitation and analysis 23 2.4.6 Supplier evaluation and selection 23 2.4.7 Stage 7: Order- routine specification 23

4.2.2 Findings of relationship between Users and Marketing mix 69 4.2.3 Findings of relationship between Buying stage and Marketing mix 72

LIST OF TABLES

Table 1: The local and foreign visitors to Vietnam

considerably increased since 1990 4 Table 2: Foreign Direct Investment (FDI)

into the hospitality industry in Vietnam since 1995 4

Table 3: Some of construction material required for hospitality projects 6 Table 4: Well-known interior designers and architects attended

Table 13: Dimension relationship between Marketing Mix and Users 51 Table 14: The relationship between Buying Stages and Users 52 Table 15: Cold calls are not an effective method 58

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Table 16: Perspective of approaching Marketing Mix

in the dimension between Users and Buying stages 60 Table 17: Considerable changes of ordering sanitary and fittings in the

hospitality projects managed by international operators 63

Table 18: Small changes of ordering sanitary and fittings in the hospitality

projects managed by local investors 63

Table 19: Specifications are changed much in the international hospitality 66 Table 20: Specifications are majorly kept for final installation 66 Table 21: Perspective of approaching Buying Stages

in the relationship between 4Ps and Users 69 Table 22: Perspective of approaching Users in the relationship

between 4Ps and Buying Stages 73

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ABSTRACT

Almost all of the owners always look for the suitable sales models to enhance their business performance Beside an experienced sales team, the companies can win their competitors and grow dramatically if they succeed in building methods of customer approaches The research has helped the companies to find this expectation

The results of this research include 25 depth interviews from suppliers and customers who are hospitality investors, contractors, designers and hotel operators Their contributions have brought many critical sales factors and help to create 3 models of sales approaches Salespeople can learn methodologies and techniques to build the practical plans for their companies

In conclusion, the research has supplied the trading companies or suppliers with sales models They will encourage salespeople to take right actions and win the sales contracts

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CHAPTER 1: INTRODUCTION

In this chapter of thesis, the author would like to give a brief introduction about the B2B hospitality activities in Vietnam Some reasons, problems and purposes which have led me to choose this topic will be shared Finally, a short background of the research introduces about the history of topic development

1.1 Reasons to choose the topic

“How to increase the sales performance” is always one of the tough questions to most of the companies or organizations Nowadays, so many players have caused an extremely harsh marketplace Customers always have more than one alternative for their buying decisions According to Bundschuh and Dezvane (2003), products (understood for the same segments) seem to become similar at functions, designs, quality Therefore, beside to financing marketing programs, the companies should look for suitable ways to approach potential customers And depending on types of business, each company applies a different customer approach

Actually, if B2C enterprises attract their customers by financing marketing programs, organizing events and expanding distribution channels; B2B companies of hospitality industry take care of their clients in accordance with the construction stages of projects Different from B2C which choosing a product may only take some minutes, a buying decision of hospitality investors can be finalized after some months or many years to work with many people and solve many other factors

According to Mr Nguyen Van Hai- sales director of Star Home Appliances Company Limited, approaching the right people and right time

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can bring his company more than 50% percentage of chance to win the deal Because the B2B sales can last long time, salespeople need to know the working process In fact, the overhasty contacts can interrupt the business opportunity

From the requirements of reality, the author would like to build the process of customer approaches in B2B hospitality industry Salespeople will recognise the persons, the period, etc to approach the projects And the final purpose helps organizations to increase the sales performance

1.2 Introduction of B2B and Hospitality Industry

1.2.2 Hospitality Projects

Hospitality is a concept of the real estate industry as a whole It includes projects in construction for recreation and accommodation such as casinos, entertainment parks, resorts or hotels (Josef Ransley, 2004) The hospitality industry which is a branch of real estate is sketched as the below figure

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Figure 1: Hospitality industry- a branch of real estate

1.2.3 B2B hospitality projects in Vietnam

The local hospitality industry has developed strongly since Vietnam government opens the door to the world Besides, the needs to explore the beauty of country have been increasing strongly, Vietnamese people do not

so worry about material demands like eating, clothing, etc as some ten- years ago any more They have spent more time and money enjoying the peaceful environment in luxury resorts or entertainment parks Moreover,

HOSPITALITY

Residential

Commercial Center

Vietnam is a peaceful country It has attracted millions of foreign visitors annually These impressive figures encourage the local hospitality to become the key industry We can make reference to the table of tourism statistics as

a confirmation for the promised growth

In addition, millions of businessmen arrive in Vietnam annually To meet the considerably increasing supply of accommodation and recreation, billions

of U.S dollars have been invested to construct resort complexity annually in Vietnam (source: VCCI, 2012) And totally approximately 300 hospitality projects have been licensed to invest in Vietnam (BCI Asia, March 2013)

Foreign Direct Investment (FDI) from 1995 - 2013

Year 1995 2000 2002 2004 2005 2008 2010 2013 Number of

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To complete hospitality projects, so many products are required to purchase They need a huge supply of steel, cement and concrete for the body construction And they also need other hundreds of items for interior equipment However, only some following items for internal installation are investigated and applied to the thesis They are sanitary wares & fittings (items for bathroom), lighting system, indoor furniture, fabric of curtain, kitchen appliances, wall paper, carpet, locking system, door hardware, stone and marble, fire and security system Or they will described in details with the below table

1 Sanitary wares and

fittings (bathrooms)

Water Closet (WC) Fittings: shower and basin mixer Bathtub

2 Lighting system

Outdoor lighting Decorative lamp

3 Furniture

Bed Wardrobe Outdoor furniture Door/ Window

4 Facility appliances Kitchen

5 Security

Security system Fire system

Marble Laticrete

8 Others

Carpet Fabric Wall- paper Table 3: Some of construction material required for hospitality projects

1.2.4 Motivations to choose the topic

In the competitive market, products have become similar and margin is slim In this regards, Bundschuh and Dezvane (2003) has mentioned that over the past of few years, the growth of industry has got slow Meanwhile, competition has become extremely tremendous We seem not to sell products by their features only because customers have so many alternatives So we cannot only talk endlessly about our products and hope

to get a deal Today selling is art and requires skills to convince customers Therefore, targets of this research concentrate to investigate the relationships among the main factors which impacted on the progress of B2B business The conclusion of the research can supply salespeople and suppliers (trading companies and manufacturers) with scientific business approaches Salespeople can understand what customers require, what customers prefer to select products for the hospitality projects

1.3 Purposes of the research (or research significances)

Organizations in B2B, sales managers, and sales executives can take the benefits from the research The study will educate them the right processes and support them to keep the active positions during working with customers

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1.4 Research questions

Base on the above problem discussion, the purpose of this thesis explains about the importance of features of selling approaches Further, this purpose will be reached by answering the following research questions

1) What factors influence on buying decision of customers?

2) How should salespeople approach to win the hospitality projects?

1.5 Scope and Limitation

Covering all aspects of the research purpose in the study is impossible due to limited time frame for this thesis Consequently, this study will be limited to only investigate hospitality projects in Vietnam

1.6 Organization of the study

The study consists of five chapters

1.6.1 Chapter 1: Introduction

This chapter gives brief introduction about reasons to choose the topic

in hospitality projects and its definition Besides, some problems need to be discussed to study in the next chapters

1.6.2 Chapter 2: Literature Review

Present relevant theories and points of views of famous scholars in the industry In addition, some proposed models will be applied to serve the study

1.6.3 Chapter 3: Research Methodology

All of the models, samples or methods to process data will be clarified

in this chapter

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1.6.4 Chapter 4: Findings

After processing data, advice to increase a B2B transaction will be discussed

1.6.5 Chapter 5: Conclusion and Recommendation

Conclude the problem solving and recommend for any further studies

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CHAPTER 2: LITERATURE REVIEW

This chapter consists of theories regarding the two research questions

we have constructed for the thesis where the first and second parts implies theories about B2B approaches which make it important for any manufacturers We will discuss about essential factors which benefit to improve B2B performance in the last part of hospitality industry

In fact, many authors have announced several factors or models regarding to transactions in B2B business or involving influencers Kotler is well-known as the father of modern marketing His works are valuable references for any companies before launching products We also know about McCarthy (1940) with 4Ps model which is classic work for any advertising and selling programs In general, we can apply these models, and combine others to propose methods to do business more effectively

2.1 Classification of B2B groups:

As we mention above, B2B companies usually have fewer customers than B2C companies B2B companies have a customer distribution with a small number of buyers but contribute the vast majority of sales volume Customers for industrial goods can generally be classified into three groups: users, original-equipment manufacturers (OEM), and middlemen (Kotler, 2001)

2.1.1 Users: regarding to B2B hospitality- project- sales, we do not

merely consider “users” as the end- users who will use the products Actually, end-users never have the power to make decision what to buy Therefore, in this case we understand “users” as all of the parties/ persons who involve in choosing or buying products To big projects like 5-star-hotels, many players

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will attend to finish the projects They can be designers, project management,

ME contractor, bankers, etc However, four objectives having the biggest power include project investors, designers, project management and contractors (Klinger and Susong, 2006)

1) Hospitality Investors (or developers)

Hospitality investors can be an individual or a group who commit capital

to invest into projects with expectation of financial return Investors are categorised into four types: by the natures of their claims (debt or equity), or according to their degree of involvement in operations (passive or active)

a) Investment in Equity and Debt

The distinctions are made between investment in real assets such as land and buildings and in real estate (hospitality) - related financial assets such as mortgaged-back promissory notes Both involve exchanges of certain and immediate assets for uncertain expectation of future gain, but expectation yield and risk may differ radically

Consider a development such as an office building or an apartment complex The individual or organization that buys the real property interest is

an equity investor However, most all of the money comes from a mortgage lender who is called debt investor Lender often sells their mortgage- secured promissory notes to still other investors who prefer debt to equity positions

Benefits to equity investors are less predictable than those to holders of debt because an equity investor get no cash until the debt holder’s periodic claims to payment on the promissory notes are satisfied Equity investors also reap the consequences of increase or decrease in the property value

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b) Passive and Active Investors Almost all of the investors acquire direct titles to the hospitality projects which they invest Their key distinguishing characteristics is that they make decision all most of works like selecting sources of management for the projects, discussing the construction contracts, negotiating rental baking rate, etc All of these works influence on operating results of the company Therefore, they are behaved as active investors

In contrast, passive investors do not have the decisive voice to the project operating works They turn their wealth over to professional asset manager who in turn acquire interest in projects of hospitality Or they can acquire shares in corporations, partnerships that hold extensive holding property interest In general, passive ones often take smaller shares and have little direct impact on operation

2) Designers and architects

Designers are the persons or the firms who help investors to design the rising buildings or hospitality projects They keep the roles to consult investors and hospitality management how the projects should perform in the most effective operation when the projects come to use For example, a resort which is nearby the beach is designed differently from a hotel in the city Famous designers and architects have thorough knowledge of the local culture, history of the area where the projects locate

Although designers are not the person who will manage the projects or purchase the items for final installation, they have a great power to specialize

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the brands Actually, the brands which are chosen from designers will have a big opportunity to be awarded

To a hospitality project, many kinds of designers are invited to serve for

If they take responsibility to design water pipeline, electricity system or restaurant operation, they are known as an M&E designer Meanwhile, a firm which is professional at outside decoration, they can be a landscape company or architecture Another important player is interior designer They will take care of all decoration inside projects In reality, each company has its own strong characteristic and is specialized

Some well-known architects and designers for hospitality projects which have been completed in Vietnam can be listed below

Hirsh & Bedner Caravelle Saigon Sinapore Designer Bensley Intercontinental

Saigon Centre France & Vietnam Architect

Aurecon Pullman Saigon France M&E

Greg Norman Montgorilinks

Danang

Table 4: Well-known interior designers and architects attended projects

in Vietnam

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3) Contractors

After completing the overall designs, contractors are awarded to construct the project They take responsibility to follow the specification and secure the quality of construction with the available financial budget Many types of contractors are attended but they can be classified into main contractor and sub-contractors

a) Main contractor The main contractor is someone who takes charge of and manages all stages or parts of the project He must always update on-site operation to investors and designers This firm has to have management experiences and prestigious brand and good financial capacity

b) Sub- contractor Modern industrial activity is based on specialization and the combining

of many specialist skills to form an integrated body The main contractor cannot have specialists for all of the stages of a project Therefore, to finish the works, the main contractor must rent other smaller contractors which we call sub-contractors

Normally, the contract between employers and the main contractors does not create any contractual obligations about renting the sub-contractors

4) Hospitality Operator

A hospitality project will be divided into two types regarding to management: investors can manage their projects by themselves, or they can invite an international hospitality operator to manage their project Hospitality operators are presented in all levels from 1 star to 5 stars

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However, they are often invited to manage the big projects from four to five stars in Vietnam

To international hospitality, investors will invite a facility operator to manage their projects after the projects are completed The reason is that investors only have capital but without management experiences and knowledge In addition, international operators have sources of customers and representative offices over the world Operators will welcome international travellers to stay in the local hotels which they are managing in

a country Therefore, the sales revenue is secured The contract between hospitality operator and investor(s) is considered with the long term which can be at least 10 years or more

The hospitality operator is invited even when the planning stage (mentioned in 2.4.1) is drafted by developers As an important consultant, he can advise investor what kinds of materials, brands, etc should be equipped

in the projects to secure the right level of building Therefore, this party is one

of the key players whom suppliers have to approach Some international hospitality operators can be listed in Vietnam

Hospitality

Operators

Name of Hospitality in Vietnam

Marriott JW Marriott Hanoi Bitexco Vietnam 5+ star hotel

Starwood

Le Meridien Saigon Sheraton Saigon

Tien Phuoc JSC Dai Duong JSC

5 star hotel

5 star hotel IHG Intercontinental Da Nang Sun Group 5 star resort

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Novotel Saigon Ibis South Saigon

Saigon Liberty Dai Minh (Korea)

4 star

3 star Table 5: Global hospitality operators managing projects in Vietnam

In brief, an example of each consulting role is showed through Pullman Saigon Hotel Centre This hospitality project is contracting in 148 Tran Hung Dao, Nguyen Cu Trinh Ward, Dist 1, Ho Chi Minh City

Investors/ Developers Other Users Roles

Que Huong Liberty JSC

Source: BCI Vietnam

https://services.bciasia.com/view/project.cfm?CFID=137719&CFTOKEN=74688674&focus=1&project_refid=102421610956569

2.1.2 Original Equipment Manufacturers (OEMs): almost all of the

manufacturers cannot produce all spare- parts to complete a product Therefore, they have to incorporate the purchased goods into their final products For example, to produce sanitary bathtubs for hospitality projects, Kaldewei AG (Germany) cannot produce all fittings/ spare parts The

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Company has to rent Viega AG as an outsourcer to complete the products This process is also called B2B in the kind of OEMs

2.1.3 Middlemen: B2B does not mean all purchasing activities only

happen between manufacturers and corporates The last groups of industrial

buyers are essentially composed of distributors and wholesalers who

distribute industrial goods from the manufacturers to users, to OEM’s, and to other middlemen

Of three classified groups, the Users are concentrated to analyse In the B2B sales to hospitality projects, OEMs and Middleman are not the targeted objectives for a sales process OME is only a stage of whole chain to complete the products Therefore, it is not considered as sales activities for this research Meanwhile, Middleman is a progress of distribution system Manufacturers often look for locally potential agents to expand the market in

a country It is not involved in searching for customer approaches Because the target of the research is to find suitable ways to approach customers, we will focus on Users to study investors, contractors, designers and operators

2.2 B2B Buying Situation

An institutional buyer has to face many decisions before finalizing to make a purchase The amount and complexity of these decisions depend on the respective buying situation For almost four decades, marketing literature has persistently broken them down into three types of recurring buying situations: the straight re-buy, modified re-buy, and new task (Kotler, 2006)

2.2.1 Straight re-buy is the most common buying situation and

usually involves the least risk The purchasing department does not have enough time and labour to compare the terms of all relevant suppliers when

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considering to buy new items Most of the companies have buying budget which specify adequate preferred brands and item ranks before doing a project

2.2.2 Modified re-buy is a situation in which a company would like

to satisfy an existing need by modifying innovated products or spare-parts Motivations for the re-evaluation of alternatives can not only simply reduce costs or to improve performance but also compulsorily change due to new regulations fall in this category For instance, management board of Epic Designer- a textile manufacturer in Bien Hoa City- expects to improve labour efficiency, they can replace the lighting systems which brings the workers a comfortable sense of eyes to increase the out-puts In this case, the management board has made a B2B deal with lighting producer to improve the performance

2.2.3 New task is a purchasing situation for a new project

Different from straight re-buy and modified re-buy which just renovate the available systems, new- task makes a company confronted with a new requirement for products or services When we buy something for the first time, we will have a lack of experience to negotiate the deal and choose the items Therefore, this task might increase the level of uncertainty and risk which involve in a buying situation In this case, the more people are involved

in the buying decision They can be project executives, project managers or directors All of them gather the product information, check and evaluate which the best solution for project The process can usually take longer time than two kinds above

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In general, the model of B2B Buying Situation gives us details about each type of purchase The author of the model comments about advantages and/ or disadvantages of each type and mentions some departments which the seller can work with However, the methods which we need to approach potential customers have not been realized

2.3 “Buying Centre”

As we just mention above, the buying process B2B often takes time and look complicated to be closed In fact, several participants of many departments such as finance, engineering, architect, etc can involve in buying decision Kotler has called this formation as Buying Center (Kotler, 2001) The concept of buying centre provides rich insights into the role of the group forces in the organizational buying behaviours (Johnson and Lewin, 1996) The buying centre consists of individuals who participate in the purchasing decision and share the goals and risks which arise from the decision The size of buying centre varies, but the average includes more than four persons per purchase; the number of people involved in all stages

of one purchase may be as many as (Mc William, 1992)

A buying group evolves during the purchasing process in response to the information requirements of the specific situation Because organizational buying centre is the process rather than an isolated act, different individuals play a different role in the process at the different times (Ghingold and Wilson, 1984) A design engineer may exert significant influence early in the process when products specifications are established Other may assume more dominant roles in later phases A salesperson should define the buying situation and the information requirements from the organization’s

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perspective in order to anticipate the size and compositions of the buying centre The composition cannot be the same for all organizations

In alignment with the role each individual of the buying centre can play, marketing literature generally distinguishes between initiators, users, influencers, deciders, approvers, buyers, and gatekeepers

2.3.1 Initiators can generally be anyone in the organization They

detect a product or service necessary for the company so they send a request for purchase They may be front line employees or high level managers as long as the request is right and support for their works The request can be a small or big order

2.3.2 End-users: these people have to use the products or services

in the end The end-user, in this case, can be staff in the company The influence of the user on the buying decision depends on the sector of activity and the corporate culture Usually, the higher qualified the users, the more weight is given to their opinion However, the end-user can be customers For example, we buy an apartment of Saigon Pearl The developer has installed all interior equipment such as kitchen, sanitary ware & fittings, flooring wood, tile, etc and we often accept them as available arrangement

In this case, users may have little power to make decision which goods are bought

2.3.3 Influencers are people who have the power to guide the

buying decision by defining specifications or providing further information for the evaluation of alternatives In the hospitality development, especially in high-end projects, architects (or/ and designers) and hotel (or condominium) management can specify on behalf of the owner They are paid for labour

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and creativity Therefore, their ideas are extremely respected We can see a case for this situation The developer Sun Group has invested many millions

of USD to form a five-star resort and condominium complex project in Da Nang, centre area of Vietnam Sun Group has invited Bensley Thailand as architects & interior partner and IHG as project operator All equipment finalized by B2B contracts has not been changed much after Bensley’s specification and IHG’s approval Now the project name Intercontinental Danang Resort and Spa has been becoming one of the most charming resorts of the world Hence, we can see the important role of influencer who guide the item decision and define specification in B2B activities

2.3.4 Deciders: as we mention in the part 2.3.3), the roles of

consultancy Bensley and IHG are extremely powerful to develop the project Intercontinental Resort & Spa However, the final decision of the purchase is made by decider The decider always hold the managerial levels and can be General Director, Chairman or someone who pay money actually (sometimes the capital owner does not hold any positions in the organization) If the deciders consistently disapprove the items, Bensley surely has to choose an alternative

2.3.5 Approvers: Bensley or owner can propose the items However,

they are required to have approval from project-site managers due to any problems of ME or engineering, etc From the reality, these issues happen quite often but they can be solved

2.3.6 Buyers: the persons are authorized to arrange the purchase

terms, negotiate with suppliers about the trading terms so that B2B contracts can be completed

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2.3.7 Gatekeepers are the persons who control the information flow

to the members of the Buying Centre In this research, I also interview suppliers about the sales- cold- calls to gatekeepers who can be purchasing agents, receptionists and telephone operators Can we meet the decision makers if we call to gatekeeper? How many percentages can lead to the successful B2B deal if we call directly to receptionists? We will have an answer in the thesis and give advice then

Figure 2: Roles of the Buying Centre (Kotler, 2006)

2.4 Classification into Buying Stages

Different from Kotler (2006) who has established Buying Centre, Robinson, Faris and Wind (2009) have divided a hospitality project into eight buying stages in accordance with project construction progress Salespeople can approach customers though the model of eight stages

2.4.1 Stage 1: Problem recognition

The first stage of the organizational buying process begins with the anticipation and recognition of a certain need Investors have financial ability

BUYING CENTER

Decider

Initiator

ApproverInfluence

User

BuyerGatekee

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and need to invest for interest However, in this stage investors have not figured out what kinds of projects they will spend money They can consider constructing an office building, a hotel or a commercial centre, etc Normally, this stage happens from 1-2 years before the project makes ground-breaking (sources: BCI Vietnam- part: leading stages)

2.4.2 Stage 2: General need description

The needs (or stage 1) are confirmed Investors have made decision

to build a hotel, not an office building or commercial centre after assessing their experiences and investing opportunities However, to secure not to spend over the amount investors can afford, their procurement enumerates all products which are required for the project construction A department of cost survey will support to look for the price of those items And so, investors can estimate the capital budget quite exactly before continuing their projects This stage always happens prior to breaking- ground

2.4.3 Stage 3: Product specification

Investors have invited designers, contractors and operators (Users) to carry out the projects in this stage Investors and/ or designers are considering choose brands, products for their projects By the available budget, designers will specify the products in their documents In this stage, all of the products will be listed clearly with product code, brand name, origin, etc This stage is extremely important to suppliers because if their products are specified, they can have a big chance to win the contract Other suppliers who would like to tender quotation have to follow the specification However, the patent can cause each brand to have different designs, features, and functions Therefore, they have to spend more effort to approach customers

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2.4.4 Stage 4: Search for potential suppliers and evaluate:

The buyer uses various media or available sources to search for all potential suppliers and then evaluate whether they meet the requirements with expressed standards

Suppliers can be the organizations who distribute the products in a country or area A brand can be distributed by an exclusive agent or many suppliers For example, Yale is a famous door- hardware brand This company has 3 suppliers in Ho Chi Minh City And all of them have tendered Yale in Hotel A Then, the investor can evaluate them basing on financial capacity, project references (all projects each supplier supplied should be showed), stock and relationship to make decision who is awarded

2.4.5 Stage 5: Proposal solicitation and analysis

Besides obtaining proposals from qualified potential suppliers, defining some important criteria for the latter evaluation and selection is mentioned In this step, investors or consultants will evaluate all suppliers Only suppliers who meet the requirements about capital, project references, capacity, etc will be selected for tendering

2.4.6 Stage 6: Supplier evaluation and selection

The buying organization will consider which company will be awarded after the tenders They will compare many different criteria established in the previous stages

2.4.7 Stage 7: Order-routine specification

Investors have chosen the brands for their hospitality projects Depending on how the production of a company is organized, the selection of

an order- routine can be considered

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2.4.8 Stage 8: Performance review

Consequently, the organizational buying process is finished after the products or services have been received and checked by the company

Figure 3: Eight buying stages of a project constructing

This model brings salespeople a progress of buying actions in details Dividing the construction project into eight buying stages helps salespeople have enough time to prepare works for each step Normally, constructing a project takes 24- 30 months to be completed It means that salespeople have 3-4 months to approach customers for each stage In addition, the model describes clearly about what customers will behave during each period Salespeople can realize the content and prepare work to suit the requirements of customers

Stage 8 Performance review Stage 7 Order-routine specification Stage 6 Supplier evaluation and selection Stage 5 Proposal solicitation and analysis Stage 4 Search for potential suppliers and evaluate Stage 3 Product specification

Stage 2 General need description Stage 1 Problem description

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2.5 Project Stage (Klinger and Susong, 2006)

If Kotler (2006) introduces the model with eight buying steps, Klinger and Susong (2006) generalize a project into 4 important stages so that salespeople can approach

2.5.1 Planning

Once the owner has determined to process a new project, he must define the requirement and delineate the budgetary constrain Project definition involves establishing the broad project characteristics such as location, project criteria, kinds of new facility, services, etc Although investors can invite other technical consultants to help them, the definition of works is basically responsibility of the owner In general, this stage is early and owner is drafting what he should do We also call this phase by Planning and Budgeting stage

2.5.2 Designing

The designing phase involves architectural, interior and engineering effort for the entire project This stage culminates in the preparation of final working drawings and specification for the total construction program However, in reality design, procurement and construction often overlap, with procurement and construction beginning on a certain segment as soon as the design is completed and drawings and specification become available

The right selection of a designer is one of the major factors in project success The designer creates the design after experiencing environmental restrictions, owners’ budget, and other requirements Because of the increasing complexity of modern projects, a multi-discipline approach to design is required Therefore, many specialized designers or sub-consultants

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will also be required to complete the design The below illustrated chart can help to understand the roles

Figure 4: The power role of architects in a hospitality project

management

2.5.3 Procuring and Constructing

This stage comes to complete the project Developer and designers can revise the specified items as long as they meet the budgetary constrain and fit the technical installation Procurement refers to the ordering, expediting, and delivering the key project equipment and material, especially to items which require long time to be produced or imported Construction means the process of physically erecting the project and putting the equipment into places This stage involves providing the manpower, construction equipment, supervision, management, etc what are necessary to accomplish the work

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