introduces the project, its rationale, problem statement, objectives, scopes and limitations the method of changing to the new orientation

Therefore, it’s a must for MVG to change the business orientation to regain its position in the market and to develop the market not only in Vietnam but also in other foreign countries..

In order to finish this final project, I would like to thank to my tutor, Dr Le Nguyen Hau, who has spent a lot of time support, guide me in writing this marketing plan Thanks for all of his valuable advices and wonderful guidance

On this occasion, I would like to sincerely thank to all professors, who have devoted

to this programme and given us precious lectures and experience during the last two years

I also would like to thanks the two co-ordinators who have worked closely with Professors and our class for all useful information about the courses and class And finally, I would like to thank all of my classmates especially my group for their contribution in class that I can understand more about the courses

TUTOR’S COMMENTS

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Signed:Dr LE NGUYEN HAU

TABLE OF CONTENTS

Chapter I INTRODUCTION 7

1.1 Overall background 7

1.2 Company description 7

1.3 Problem statement 8

1.4 Objectives 8

1.5 Scope of works and limitation 8

1.6 Method 9

1.7 Structure of the thesis 9

Chapter II ENVIRONMENT ANALYSIS 10

I CURRENT SITUATION – SALES ORIENTATION 10

1 Definition of Sales Orientation 10

2 Main components of MVG’s Sales orientation 10

2.1 Concentrate on selling products based on what they can produce rather than customers’ requirement 10

2.2 Focus on sales strategy rather than customer service 14

II CUSTOMER ORIENTATION AND ITS COMPONENTS 17

1 Definition of Customer Orientation 17

2 Components of Customer Orientation 17

Chapter III COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMERS ORITENTATION; 19

I COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMER ORIENTATION 19

II STEPS TO CONVERT FROM SALES ORIENTATION TO CUSTOMER ORIENTATION 22

1 Step 1: Leadership commitment 22

2 Step 2: Establish customers database system with all information as follows: 22

3 Step 3: training the staffs 22

4 Step 5: Re-organize the company structure to 23

5 Step 4: Recruitment for some missing positions in Customer service 23

Chapter IV: BUDGET & ACTION PLAN FOR CONVERTING FROM SALES ORIENTATION TO CUSTOMER ORIENTATION 24

1 Budget 24

2 Finance 24

3 Concrete strategy plan in 2011 25

Chapter V: CONCLUSION 27

LIST OF GRAPHS

Page

Graph 2.1.2 Sales revenue from 2006 – 2010 of some key account customers 13

Graph 2.2.1 Decrease in order of Tan Hiep Phat & Nestle Vietnam 15 Graph 2.2.2 Customer complaint comparison (2009 & 2010) 15

Graph 2.2.4 MVG Customer complaint solving procedure 17

Chapter I INTRODUCTION

1.1 Overall background

In the past, the majority of Vietnam companies defined their operations by selling

or supplying what they had to customers or consumers This orientation has deeply affected most business activities in Vietnam, especially in the state owned companies regardless any products During the last decade, Vietnam has witnessed

a dramatical change towards a more market-oriented economy The global integration (e.g joining WTO) and increasing competition urge firms to radically change their business principle/philosophy in order to survive and develop Firms aligning well to the changes of external environment would have higher chance of success (For example: Vinamilk, Tan Hiep Phat… ) Otherwise, they would face challenges that critically threaten their survival as in the case of Malaya Vietnam Glass

1.3 Problem statement

With the advantage of being an only supplier in Vietnam market at that time, the company concentrated on production and sold what they produced to the customer This business principle is not suitable any more, especially with the modern business nowadays Customers have more choices and they prefer the products which can satisfy all of their specifications The market share has been decreased

to 50% from 1997, San Miguel Yamamura Hai Phong – the main competitor from the North of Vietnam - takes 40%, and other competitors take 10% Therefore, it’s

a must for MVG to change the business orientation to regain its position in the market and to develop the market not only in Vietnam but also in other foreign countries

Given this situation, this study will address two following problems:

1 How to change MVG’s orientation from sales orientation to customer orientation?

2 What is expected to be the outcomes of this new orientation after five years?

1.4 Objectives

The purpose of this study is to analyze the threats and loss from applying sales orientation and provide necessary solutions and steps for changing the current orientation to the new one and based on this fact, a new plan for the next five years will be launched to recover the market share and expand the business in Vietnam

1.5 Scope of works and limitation

- This project will be implemented by all employees, all departments of MVG either in the current plant at Hochiminh City or the new facility at Ba Ria Vung Tau Province and the time for implementation is up to 2015

- Due to glass packaging is a particular industry in Vietnam, all information about competitors is scarce and there is no published information about their revenue, cost or market segment and so on…

1.6 Method

- Based on the principle of market orientation and organizational change management to find out the proper steps for the changing process to the new orientation

1.7 Structure of the thesis

This project is organized as follows:

 Chapter One: introduces the project, its rationale, problem statement,

objectives, scopes and limitations The method of changing to the new orientation

 Chapter Two: Environment Analysis; Theory of Sales Orientation and

Customer Orientation,

 Chapter Three: Comparison between Sales Orientation and Customer

Orientation and Steps to Convert to Customer Orientation

 Chapter Four: Budget for implementing the Customer Orientation

 Chapter V: Conclusion

Chapter II

ORIENTATION AND CUSTOMER ORIENTATION

I CURRENT SITUATION – SALES ORIENTATION

1 Definition of Sales Orientation

Most firms practice the selling concept when they have over capacity Their

aim is to sell what they make rather than what the market wants (Kotler, 1999)

In line with the above mentioned definition, the current MVG’s business orientation is exactly the same Even though MVG carried out the technology transfer in 2004 in order to increase the capacity to meet customers’ demand, the capacity still could not satisfy customer With the over-twenty-year-old furnace, the factory could not apply the modern technology which the competitors use to produce bottles in accordance with customers’ demand Thus, most of MVG’s products must meet the specification of safety, furnace age and production procedure of MVG not specification requested by customers

2 Main components of MVG’s Sales orientation

2.1 Concentrate on selling products based on what the company can produce rather than customers’ requirement

Being an only glass plant in the South of Vietnam, MVG just concentrates on selling products that we can produce rather than follow customers’ requirement Generally, when a company wants to survive in the market, they must have a thorough grasp of market demand Based on such requirement, the companies will have suitable products to satisfy the customers/consumers However; this

is not applied in MVG Due to B2B model, most of MVG’s customers are companies that business line are beverage, soft drinks,

beer & wine, health drinks and pharmaceutical products, and besides that MVG also supplies glass jar to small customers and the jar for them we called common bottle or jar These products usually bring high margin for the company Based on the current technology and furnace age, MVG can only produce and sell the products as current time Whereas some other customers from foreign countries (Florida – USA, Singapore and New Zealand…) and local (Tan Hiep Phat Group) have a value order for MVG

Below are some manifests of this business principle:

 The objective of all business activities is the more selling volume increased the better revenue and profit for the company

A typical example to prove this statement should be in glass color MVG can only run amber and flint glass packaging, and after every color change, MVG will have one more additional color – transitional To some other glass packaging manufacturers who have strict policy in glass color, they culletize these bottles and they become one of raw materials for the coming color change In MVG, these products are still sold in the market 2/3

of these bottles are exported to Pepsi Phillippines and the rest are for domestic market

 MVG sells what they can produce for the customers without any improvement on quality and design in accordance with customers’ requirement MVG tries to push all finished goods to customers as much as it can

 No commitment with customers about products’ quality, price or any promotion for this kind of product

 Customers decreased every year since MVG’s products cannot find their requirement

And the results of such principle were:-

 In 2008, MVG rejected the order of a potential customer from Florida – USA due to their products are small jars (30oz) and a lot of

technical specification in order to concentrate on selling bottle for the current customers like Saigon Beverage-Alcohol-Beer Corp, Pepsi, Coke and so on…

In 2009, MVG failed the order of Tan Hiep Phat Group, a big group

in beverage, soft drinks and health drinks in Vietnam even though Tan Hiep Phat Group was a potential customer of MVG from 2000 These are reasons that makes the market share of MVG decreasing from 2005 until now, the below chart shows the percentage of market share of MVG and some other competitors in the glass packaging market in Vietnam

Market share has been maintained against local manufactures however imports are growing

Belows is the graph for market share in 2009

(Source: Internal studying)

Due to the concentration on selling all products after production, MVG got a lot of complaints from customer about the quality of the bottles

Graph 2.1.1 Market share in 2009

Volume (Bn Un) - Year 2009

Malaya Glass, 50,808 , 41%

San Miguel Glass, 41,282 , 33%

Others, 11,432 , 9%

Exports, 4,604 , 4%

Imports, 16,478 , 13%

The below graph will show revenue from some key account customers from 2006 to 2010

(Source: MVG Annual Report) Graph 2.1.3 Sales Revenue from 2005 – 2010 of some key account customers

(Source: MVG Annual Report) Graph 2.1.4 Profit from 2005 - 2010

2.2 Focus on sales strategy rather than customer service

According to Turban Et Al (2002) “customer service is a series of activitites designed to enhance the level of customer satisfaction – that is the feeling that a product or service has met customer expectation” With such definition, the company that has customer service usually has the following activities:

 Liaising and supplying customers all information of the products

 Informing the customers all promotion programs, ensuring all information is given to the customers on time for their profit

 Taking care of after-sales procedures to the customers such as answering the questions and solving customers’ complaint

 Organizing for annual customer conference to strengthen the relationship and to prove the customers value to them

These activities have been totally absent from MVG because MVG doesn’t have Customer Service and the sales team doesn’t have skills in Customer Service

Therefore, all activities in MVG are in accordance with the Sales strategy i.e strategy on selling price in order to achieve revenue and profit for the company MVG doesn’t pay much attention to customers’ expectation and has no customer value

As a result, customers’ demand and orders decreased every year and Nestle and Tan Hiep Phat Group are a byword example and the below graph will present the decrease of in orders from 2007 to 2010 of the above customers

(Source: MVG Annual Sales Report) Graphic 2.2.1 Order decreased of Tan Hiep Phat Group and Nestle Vietnam

Below is the graph for customers’ complaint in 2009 &

2010 vs the sales revenue from 2005 to 2010

(Source: MVG Internal Annual Report) Graph 2.2.2: Customers’ complaint comparison (2009 & 2010)

Consequently, a remarkable decrease of customers also happened, with the percentage of decrease from 2008 to 2010 was 62% - from 146 customers in 2008 to 55 customers in 2010

Because there is no customer service in the business activities system, customers’s complaints were transferred to so many departments and it usally takes a long time to respond With such a mechanism, there have been more and more customers’ complaints during the last 2 years All questions and complaints are settled by QA (Quality Assurance) follow the below chart:

Source: MVG annual complaint report

Graphic 2.2.4 MVG’s complaint procedure

II CUSTOMER ORIENTATION AND ITS COMPONENTS

1 Definition of Customer Orientation:

Customer orientation is the sufficient understanding of one’s target buyers to be able to create supervisor value for them continuously

(Levitt, 1980)

2 Components of Customer Orientation

 Understand customer needs: to any products or any companies,

customers’needs or demands are extremely important Whenever

a company wants to produce any new products, they all have a market research on customers’ demand Based on such demand, the company will develop the products However, not every

Checked and find out the problem by QA Dept

Inform to customers about the problem and solution by Sales Team

Customers’

Complaint

Get approval from Plant Manager for the solutions

demand from customer will be satisfied because the company must base on its situation and budget Examples of such companies are Tan Hiep Phat Group and Vinamilk Corp These are two specific companies that always consider customers’ benefits on top They often have new products to satisfy customer demand that keep changing and developing in the new trend

 Customer satisfaction objectives: The company must set its

objectives is customer satisfaction These objectives help the company have proper development direction and also orientation for all business activities of the company

 Measure customer satisfaction: this will be a method to

measure and evaluate the company’s success in the market These activities will be organized frequently in order that company can improve products, service and so on…

 Create customer value: by continuously improving products

quality and designs; training and develop all skills for sales team and other relevant departments in order to gain the highest level

of customer satisfaction

Chapter III

COMPARISON BETWEEN SALES ORIENTATION

AND CUSTOMERS ORIENTATION;STEPS TO

CONVERT INTO THE NEW ORIENTATION

I COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMER

ORIENTATION

The below table will state out the differences of the two orientation and

then from these differences, MVG can determine what to change and how

to change

ORIENTATION Objectives - Sell what MVG has and

produce despite customers’ needs and

demand

- Achieve the sales target

of weekly, monthly, quarterly and yearly

- Sell products which are produced based on customers’ demand and needs

- Achieve customer satisfaction

- Create customer value

Activities - Spending time for sales

strategy i.e delivery schedule for each customer with clear quantity and products

- No activities in marketing

to attract new customers from domestics market as well as foreign market

- Concentrate on developing potential customers with new products and current customers with current products

- Develop customers database with full information about products particularity and