Research Project Assignment 1

The research title is: “The impact of Vietnam counterfeiting law on awareness and behavior of PepsiCo’s customers” PepsiCo is a famous brand, it leads in convenient snacks, foods and bev

The impact of Vietnam counterfeiting law on awareness and behavior of

Prepared by: Maple GroupVương Thị Quỳnh Anh - LynnNgô Thị Huyền Trang - JessNguyễn Phương Thảo - KeyNguyễn Thị Kiều Anh - Snow

Submitted: 22/04/2013

TABLE OF CONTENTS

EXECUTIVE SUMMARY 4

INTRODUCTION 5

1.1 Research Background 5

1.1.1 History of the company 5

1.1.2 Mission and Vision 6

1.1.3 Value and Philosophy 7

1.1.5 PepsiCo’s Products 8

1.2 Problem Statement 9

1.3 Research Objective 12

1.4 Significant of study 13

1.5 Research Questions/ Hypotheses 14

1.5.1 Research Questions 14

1.5.2 Hypothesis 15

1.6 Action Plan and Target Date 17

1.7 Research limitations 19

1.8 Research ethics 20

1.9 Layout of chapter 21

LITERATER REVIEW 22

2.1 Introduction 22

2.1.1 Area 22

2.1.2 Topic 22

2.2 Articles about problem 23

2.2.1 Quality inspection factor 23

2.2.2 Regulation factor 24

2.2.3 Customer awareness factor 24

2.2.4 Activity factor 25

2.2.5 Living standard factor 26

2.3 Conclusion 27

RESEARCH METHODOLOGY 283.1 Research Design 283.2 Research Sampling 30

3.3 Research Instrument Error! Bookmark not defined 3.4 Data gathering procedure Error! Bookmark not defined 3.4.1 Primary Data Error! Bookmark not defined 3.4.2 Secondary Data Error! Bookmark not defined 3.5 Methods of Data Analysis Error! Bookmark not defined References Error! Bookmark not defined.

EXECUTIVE SUMMARY

Nowadays, counterfeit products become more and more development in the Vietnam market.The negative consequences that it brings to society are not small It effects on consumer finance,undermine the confidence of consumers about the transparency of commodity markets, anddetract reputation of the genuine manufacturer As a result, counterfeiting law of Vietnam’sgovernment is a tool to protect the benefits of company and customers In addition, it will reducethe effects of counterfeit products with the development and reputation of company incustomers’ perception

The research title is: “The impact of Vietnam counterfeiting law on awareness and behavior

of PepsiCo’s customers”

PepsiCo is a famous brand, it leads in convenient snacks, foods and beverages with revenues ofmore than 60$ billion and over 285,000 employees from over 200 countries in over the world.Especially, all of PepsiCo products are very easy to counterfeit This research with the aims ofinvestigates the Viet Nam counterfeiting law in situation of PepsiCo, and it based on PepsiCo’scustomer The research includes 3 chapters which are introduction, literature review, andresearch methodology

 Chapter 1: Introduction, the report gives the information of NTC including history,operation, and structure Besides, there are some problem statements, following byresearch objectives, research questions, action plan and target dates, research limitation,and research ethics

 Chapter 2: Literature review includes all the definition or phrases related to the research

 Chapter 3: Research methodology includes research design, research sampling, research instrument, and methods of data analysis

CHAPTER 1INTRODUCTION1.1 Research Background.

Currently, counterfeiting, piracy, poor quality goods is one of the big problem of the society.The negative consequences that it brings to society are not small It effects on consumerfinance, undermine the confidence of consumers about the transparency of commoditymarkets, and detract reputation of the genuine manufacturer

Therefore, in order to know how is the state of counterfeiting, piracy, the current poor quality

in Vietnam? And the causes of counterfeiting, counterfeit, inferior quality product exist anddevelop? What ways are needed to curb counterfeiting, counterfeit, inferior quality? This is

the main reason why our group chose research" The impact of Vietnam counterfeiting law

on awareness and behavior of PepsiCo’s customers" to discuss in the research.

1.1.1 History of the company

PepsiCo, Inc is an America multinational company headquartered in Purchase, New York,United States Currently, it leads in convenient snacks, foods and beverages with revenues ofmore than 60$ billion and over 285,000 employees from over 200 countries in over theworld PepsiCo consists of PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages(PAB) and PepsiCo International (PI) According to detail information which is posted inPepsiCo’s website, the company experiences more than 47 years with many developmentstages Below is some main point in the history of PepsiCo:

 1965 - PepsiCo was formed by Donald M Kendall, President and Chief ExecutiveOfficer of Pepsi-Cola and Herman W Lay, Chairman and Chief Executive Officer ofFrito-Lay, through the merger of the two companies

 1970 - PepsiCo moves from New York City to new world headquarters in Purchase,N.Y PepsiCo is the first company to respond to customer preference withlightweight, recyclable, plastic bottles

 1974 - PepsiCo becomes the first American consumer product to be produced,marketed and sold in the former Soviet Union.

 1980 - PepsiCo Food Service International (PFSI) is formed to focus on overseasdevelopment of restaurants

 1982 - Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, areintroduced Inauguration of the first Pepsi-Cola operation in China

 1985 - PepsiCo is now the largest company in the beverage industry The companyhas revenues of more than $7.5 billion, more than 137,000 employees Pepsi-Colaproducts are available in nearly 150 countries and territories around the world Snackfood operations are in 10 international markets

 1986 - PepsiCo purchases 7Up international, the third largest franchise soft drinkoperation outside the United States

 1993 - Pepsi- Cola introduces Aquafina bottled water into test market

 1996 - Pepsi-Cola launches Pepsi World at www.pepsiworld.com[ CITATION Pepnd \l

1033 ]

1.1.2 Mission and Vision

At PepsiCo, they believe being a responsible corporate citizen is not only the right thing

to do, but the right thing to do for their business

 Mission

PepsiCo’s mission is “to be the world’s premier consumer Products Company focused on

convenient foods and beverages PepsiCo try to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate And in everything we do, we strive for honestly, fairness and integrity” [ CITATION Pepnd \l 1033 ]

By always create the belief and trust for stakeholder, also always set themselves ethics inbusiness, PepsiCo deserve getting more succeed in the future

 Vision

Besides, PepsiCo also set a specific vision which is “PepsiCo’s responsibility is to

continually improve all aspects of the world in which we operate- environment, social, economic social, economic- creating a better tomorrow than today” [ CITATION Pepnd \l 1033 ]

It can be said that vision of PepsiCo is very precious because they understand the role ofcustomer in business They focus more on customers and environment around customers.This proves that PepsiCo only interested in economic development - immediate benefit, thatthey ignored the long-term benefits of environmental protection and health of customer aswell This makes increase the belief of customer with company Therefore, since established,the strategic vision of PepsiCo makes the company develop significantly and in a short time,

it becomes market leader of Fast-Moving Consumer Goods (FMCG) industry

1.1.3 Value and Philosophy

Values & Philosophy are the foundation for business decision of PepsiCo

PepsiCo’s values are sustained growth, empowered people, responsibility and trust “They arecommitted to delivering sustained growth through empowered people acting responsibly andbuilding trust”

The company maintains their values by 6 philosophies:

- Care for our customers, our consumers and the world we live in

- Sell only products we can be proud of

- Speak with truth and candor

- Balance short term and long term

- Win with diversity and inclusion

- Respect others and succeed together [ CITATION Pepnd2 \l 1033 ]

1.1.4 Organizational structure

Chart 1: PepsiCo’s organizational Chart (Source: PepsiCo.com)For PepsiCo’s robust growth in recent years, PepsiCo felt it was time to manage the company

as three units instead of two to sustain our growth rate and also to develop global seniorleadership talent for PepsiCo’s future Therefore, PepsiCo created three operating businessunits: PepsiCo Americas Foods (PAF), PepsiCo Americas Beverages (PAB), and PepsiCoInternational (PI) They believed that this organizational structure will help them deliverstrong top-line performance and profit growth [ CITATION Pepnd1 \l 1033 ]

Foods Snack Poca, PocNutz,

Snack PocaSelectz

Snack Cheetos, Lays

Chip, Flat Earth Snack

Table 1: PepsiCo’s Product

1.1.6 Overview of the PepsiCo’s operation in Vietnam

 4/12/1991 - International Beverage Company (IBC) was established as a joint venturebetween SP.Co and Marcondray-Singapore with capital contribution of 50% - 50%

 2/ 1994 - The US Embargo to Vietnam was lifted marking the phenomenal entrance

of PepsiCo into new market The diverse product portfolios including PepsiCola,7Up, Mirinda, Aquafina, Sting, Twister, and Lipton Ice Tea are widely and deeplydistributed to Vietnamese consumers from the five operations branches located acrossVietnam

- Officially, PepsiCo teamed up with International Beverages Company (IBC) – awell-established local joint venture to manufacture and distribute Pepsi-Cola and 7Upproducts in Vietnam

- PepsiCo held 30% equity of the joint venture (JV) with the other two partners –SP.Co (Vietnamese) and Macondray (Singapore) sharing the balance

 1998 - PI bought 97% stocks, SPCo 3%, up to $110 million invested

 2003 - PepsiCola Global Investment bought the remaining 3%, renamed the companyinto the International Beverage Company PepsiCo Vietnam

 2005 - Officially became the company which has largest market share in Vietnam

 2006 - Launch of the first food product (Snack Poca)

 2007 - Development of new sector - Soy Milk

 2008 - Inauguration of factory packaged foods in Binh Duong [ CITATION Pepnd \l

Problem 1: The difficulties in product quality inspection in Vietnam (Quality inspection factor)

Director of market manager department of Hanoi said that the identification of counterfeitand poor quality goods on the market is not difficult, but in order to prove it is counterfeitproducts before handling is not easy

According to Decree No.140-HĐBT (25/4/1991) assign about inspection, handling the production, trafficking in counterfeit goods and Decree No.115-HĐBT (13/4/1991) provides

for the implementation of the Ordinance Measurement, it wrote:

- The handling of counterfeit and poor quality products required assessment concluded counterfeiting

- The applicant must pay the amount of violation assessment [ CITATION moi \l 1033 ]

The fact is that the costs of inspection for counterfeit and poor quality products are veryexpensive Assessment agency must pay inspection fee in advance After inspection, if it iscounterfeit goods, they will destroy it immediately and the violators will have to paypenalty, but hardly do violators pay it This is difficult for assessment agency to completetheir responsibility Thus, it leads to many kinds of products which does not ensure aboutquality still exist in market blatantly Therefore, these problem effects directly on PepsiCo’soperation and especially they make reduce the belief of customers to company’s products

Problem 2: There are many gaps in Vietnam counterfeiting law (Regulation factor)

Currently, Vietnam government is fighting against counterfeit goods by applying lawsstrictly However, Vietnam counterfeiting law still exist gaps leading to the appearance ofnew criminal behavior According to article 320 of Law of Trade “Since 2001 - 2011,relevant agencies have conducted tests and discovered handled 2017 cases of administrativeviolations, of which, poor quality service is 1752, counterfeiting and violations ofintellectual property rights, industrial designs of 265 cases” [ CITATION moi \l 1033 ]

According to Do Van Phuoc, the Director of Market Management Department, and DeputyMinister Steering Committee 127/TG, the difficulties that the industry is facing in fightingagainst counterfeit goods and trade fraud is:

- The regulations in term of counterfeit goods are unclear, for instance in many cases, quality goods are very poor, but lack of basic legal to conclude that that is fake products

- The legal documents also lack of unity

- There are not any methods strong enough or suitable for fighting against counterfeit and poor quality products [ CITATION dannd \l 1033 ]

This problem is very serious and it effects significantly on legal benefits of customers andPepsiCo as well

Problem 3: Citizens do not have high awareness in fighting against counterfeit

products (Customer awareness factor)

In some transactions, when customer purchases and uses goods, they hardly interested inproviding sufficient information to ensure legal benefits after buying goods At the sametime disregard the reference manual goods manufacturers, which led to the dispute withcompany when they buy fake and poor quality products

Moreover, almost Vietnam consumers do not concern more about detecting fake goods Incontract, they only interested in product’s beauty (whether it are beautiful or not) andproduct’s price (whether it cheap or not) However, in fact fakes products always morebeautiful, and especially their prices is cheaper than original products so consumers alwaysare attracted by counterfeit and poor quality products Customers do not assess seriousimpact of their counterfeit product to their health so they do not have high awareness in

fighting against counterfeit product This also is a big problem make difficulties in applyingVietnam counterfeiting law.

Problem 4: Vietnam government and company is lack of propaganda program to help customer distinguish between original and counterfeit products (Activity factor)

Nowadays, counterfeiting and piracy is the risk of the economy in Viet Nam; many activitycounterfeiting, piracy is going on around the world with various large and small scale Theproduct counterfeiting, piracy increasingly in many forms such as: copy brand, style or falsegeographical indication One of the most reasons is because consumer cannot distinguishbetween original and counterfeit products PepsiCo produce snack, foods, and beverages; all

of them are products which easy to counterfeited The counterfeiter used the old packaging

to make new fake products with the same brand but the water inside is bad quality,inexpensive material; therefore, the health of customer can be harm In this case, theconsumers have difficulty to identify In Viet Nam, the government and company do nothave implemented the program to guide consumer distinguish between original andcounterfeit goods, leading to the weakness of the company in helping customers choose thereal products with good quality

Problem 5: Consumer using counterfeiting product because of low living standard (Living standard factor)

With the development of economy, the living standard is improved but when compare withcountry in Asia, the living standard of Vietnamese people is very low According to figures

of the Ministry of Industry and Trade, in 2011 GDP estimated at U.S $ 119 billion CapitaGDP reached $ 1,300 / person / year [ CITATION HK11 \l 1033 ] This number is low whencompare with other country such as Chinese about $6,786 / person / year[ CITATION Tho12 \l

1033 ] Because of low standard living, people in Vietnam choose using fake products that ischeap and suitable with their financial situation instead of original product As a result, ifgovernment want to reduce counterfeit goods in market, one of the most important thingsthat government have to do is improve living standard especially income of Vietnamesepeople It can protect company and customer from effect of fake product In addition, it can

bring more revenue for company and protect customer especially health of customers fromlow quality product in the market.

1.3 Research Objective

In competitive business environment, Vietnam government has many ways to protectbenefits of companies and customers One of them is counterfeiting law For the researchtopic: “The impacts of Vietnam counterfeiting law on awareness and behavior of PepsiCo’scustomers”, this research aims to achieve the following objectives:

 To understand the advantages and the disadvantages of Vietnam’s counterfeiting lawwhich influence on employees and customers of PepsiCo

 To find out the main reason that Vietnam government cannot prevent development

of counterfeit and poor products

 To help PepsiCo have more information about regulations and new terms of thecounterfeiting law of Vietnam

 To understand deeply ways that counterfeit product spread into market to prevent itsdevelopment

 To know ways PepsiCo fight against counterfeit to reduce its effects on thedevelopment of PepsiCo and customers’ health as well

 To raise awareness of customers in distinguish fake and poor quality product

 To help customers know their rights, and their benefits and give solutions for themwhen buying counterfeit and poor product

With the clear objective, this research can help PepsiCo understanding about the benefitsand limitations of Vietnam counterfeiting law with company Moreover, this research cangive some solution that company solve with anti- counterfeiting from that PepsiCo can givebest project to reduce the effects of counterfeiting product to revenue and reputation ofPepsiCo in Vietnam In addition, customers can have knowledge and some solution to solvewhen they met fake product in market so customers can choose original product that goodfor their health

1.4 Significant of study

Research topic is “The impacts of Vietnam counterfeiting law on awareness and behavior of PepsiCo’s customers” As a result, this research will provide useful information

for specific group of people

First, for company (PepsiCo), this research will help them understand more about

counterfeiting situation in Viet Nam Then, it will be much easier for PepsiCo to find out thesolutions and they can feel comfortable to cooperate with the government to preventcounterfeiting

Second, for managers and employees, this research gives more knowledge about

regulations of Vietnam counterfeiting law so that managers and employees recognize theimportant role of counterfeiting law From this awareness, managers and employees can givenew ideas, give the best ways to fighting against counterfeit and poor products, and improvethe shortcomings in protecting their brand to remain the development of company andPepsiCo’s leader position

Third, for customers, the research help customers raise awareness in distinguish counterfeit

and poor product to ensure legal benefits and give some ways to deal with problems whenbuying counterfeit and poor product

Fourth, for students, this research helps student know how Vietnam counterfeiting law

impact on customers of specific company Moreover, students have more experiences to doresearch especially research about the Vietnam counterfeiting law and have moreunderstanding about the business environment in Vietnam

Finally, for future researchers, by using our information and data, comparing with our

strong point and weakness; they can improve their research successfully

1.5 Research Questions/ Hypotheses

1.5.1 Research Questions

The survey is the most useful method to help our group gather more information andunderstand deeply Vietnam counterfeiting law List of questionnaires are designed based onfactors existing in the fact and are modified to suit with the aim of the research and achievethe best results

The research question for this study will be:

1 What is the respondents’ profile in terms of?

2 What is the significant relationship between the respondents’ profile and their awareness

of PepsiCo’s customers about Vietnam counterfeiting law?

3 What are the problems in applying counterfeiting law in Vietnam?

There are 10 hypotheses for this research based on the conceptual frameworks below:

Figure 1: Conceptual framework 1

What is the respondents’

profile in terms of?

1 Is there a significant relationship between gender of respondents and their awarenessPepsiCo’s customers about Vietnam counterfeiting law?

2 Is there a significant relationship between age of respondents and their awareness ofPepsiCo’s customers about Vietnam counterfeiting law?

3 Is there a significant relationship between occupation of respondents and theirawareness of PepsiCo’s customers about Vietnam counterfeiting law?

4 Is there a significant relationship between education level of respondents and theirawareness of PepsiCo’s customers about Vietnam counterfeiting law?

5 Is there a significant relationship between civil status of respondents and theirawareness of PepsiCo’s customers about Vietnam counterfeiting law?

Figure 2: Conceptual framework 2

6 Is there a significant relationship between quality inspection factor and behavior ofPepsiCo’s customers?

7 Is there a significant relationship between regulation factor and behavior of PepsiCo’scustomers?

8 Is there a significant relationship between customer awareness factor and behavior ofPepsiCo’s customers?

Behavior of PepsiCo’s customers

9 Is there a significant relationship between activity factor and behavior of PepsiCo’s

customers?

10 Is there a significant relationship between living standard factor and behavior of

PepsiCo’s customers?

From these hypotheses, our group makes 20 questionnaires by using main methodologies

(Mono-method and Multiple-method choice) to collect and gather information from 100

respondents who are customers of PepsiCo and live in Hanoi The most important purpose

of questionnaires is to take opinions and feedbacks of customers However, besides

advantages, making the survey also has some disadvantage, for instance lack of depth and

detail, significance of data can be neglected, responses may be inaccurate or not fully

honest

1.6 Action Plan and Target Date

1

Creating a group (Maple Group)

Together reading the scenario for understanding 01/03/2013

Lynn (leader),Snow, Jess,Key

2 Reading scenario and understanding deeply tasks in assignment

3 Looking for a company which is within the limits of the scenario

4 At home, all members had to:

- Think and choose aresearch title for PepsiCo

- Find any documents from books and Internet which related to

the research title

07- 09/03/2013 All members

5 Holding 1st meeting for making 3 titles 10/03/2013 All members

6 Present research title before class and asking lecturer for a title

7 The second submit titles and choose 1 research title for PepsiCo 14/03/2013 All members

8 Holding 2ndmeeting to make problem statements 16/03/2013 All members

9 Checking problem statements with lecturer 18/03/2013 Lynn

-3 Holding 3rd meeting for conducting the questionnaire 25/03/2013 All members1

- Leader divided works for each member with a deadline

- Members went home and did their own tasks

29 31/03/2013 All members

-1

6 - Members submitted their work to leader to complete chapter 1

- Submitted total chapter 1 for lecturer to give feedbacks

- Checking and fixing together chapter 1

- Dividing new tasks of chapter 2 for all members

01 03/04/2013 All members

- Making a plan for giving questionnaires to respondents

- Summarising the results of doing questionnaire

09 10/04/2013 All members

-2 Asking lecturer for checking chapter 3 15/04/2013 All members

2

3 Fixing chapter 3

16 17/04/2013 All members2

-4

- Conducting a completed report including introduction,

conclusion, reference list, etc

18 21/04/2013 All members2

Chart 2: The Gantt chart for action plan of Maple Group

Chart 3: The Gantt chart for action plan of Maple Group

1.7 Research limitations

Our paper carries out a research into the impact of counterfeiting law on employees andcustomers of PepsiCo To complete the research, we had a survey from one hundredcustomers which include 100 customers at BigC supermarket, Vincom shopping mall,Indochina Plaza, National Economic University, and Banking Academy

Our paper also has some limitation below:

 Limitation of company support: In order to conduct the survey, we need the

manager of PepsiCo to sign a letter approval first However, PepsiCo is big company,

so it is hard to contact and ask permission from the manager as well

 Time constraint: Collecting and analyzing of data need a long time for the good

result while we only have one month to complete the research, therefore, the papercannot avoid some mistakes

 Limitation of respondents quantity: The result may be not objectiveness and

accuracy because the number of respondents is too small (100) while the number ofconsumers of PepsiCo products is very wide

 Limitation of respondents support: When conducting survey employees of

PepsiCo, many people do not agree to answer our question