The solution for improvement of horeca chanel in unilever food solution at ho chi minh city

UNIVERSITY OF ECONOMICS HO CHI MINH CITYInternational School of Business ---Nguyen Phuoc Huy Hung THE SOLUTION FOR IMPROVEMENT OF HORECA CHANEL IN UNILEVER FOOD SOLUTION AT HO CHI M

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Nguyen Phuoc Huy Hung

THE SOLUTION FOR IMPROVEMENT OF HORECA

CHANEL IN UNILEVER FOOD

SOLUTION AT HO CHI MINH CITY

MASTER OF BUSINESS (HONOURS)

Ho Chi Minh City – Year 2020

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Nguyen Phuoc Huy Hung

THE SOLUTION FOR IMPROVEMENT OF HORECA

CHANEL IN UNILEVER FOOD

SOLUTION AT HO CHI MINH CITY

MASTER OF BUSINESS (HONOURS)

SUPERVISOR: DR PHAM PHU QUOC

Ho Chi Minh City – Year 2020

SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED

FOR DEGREE OF MASTER of BUSINESS ADMINSTRATION

THE SOLUTION FOR IMPROVEMENT OF SALE REVENUE OF RESTAURANT CHANEL IN UNILEVER FOOD SOLUTION Student Name: Nguyen Phuoc Huy Hung

Supervisor: Dr Pham Phu Quoc

Contents

EXECUTIVE SUMMARY 1

CHAPTER 1 BACKGROUND INFORMATION 2

1.1 Unilever Vietnam 2

1.2 Unilever food solution Vietnam 2

1.2.1 The business goal 2

Figure 1.2.1: Structure of product portfolio in 2020 2

Figure 1.2.2: Proportion of customer segmentation in 2020 3

1.2.2 Competitors 3

1.2.3 The suppliers 3

1.2.4 Target customers and brand positioning 4

CHAPTER 2 SYMPTOM 5

2.1 Symptoms of the problem 5

2.2 Symptoms validation 5

Figure 2.2.1: The Revenue in the same period in Ho Chi Minh from 2019 to 2020 6

Figure 2.2.2: The Comparision of Revenue in the same period in Ho Chi Minh 6

Figure 2.2.3: The Comparision of Revenue in the same period in Mekong Area 7

Figure 2.2.4: The number of consumer using knorr products from 2015 to 2019 8

CHAPTER 3 PROBLEM IDENTIFICATION 9

3.1 Potential problem 9

3.1.1 The market has fierce competition 9

3.1.2 The price of products has not enough competitive advantage 10

3.1.3 The promotion does not satisfy the demand of consumers 11

3.2 Problem Validation 12

CHAPTER 4 CAUSE VALIDATION 18

4.1 Potential causes 18

Figure 4.1: The Cause and Effect Map 18

4.1.1 Invest not enough properly in the sales team and tools to support 18

4.1.2 The influences of market 18

4.1.3 Competitors 19

4.1.4 Promotion of Knorr products don’t touch right insight of consumers 20

4.2 Validating causes 20

CHAPTER 5 SOLUTION 22

5.1 Solutions for sale and marketing 22

5.1.1 Enhance the image of Unilever Food Solutions brand, enhance and improve the quality of the introduction of the culinary solution 22

5.1.3 Develop the program working on electronic media 23

5.1.4 Create solutions to support the customers’ business 23

5.2 Solutions for distribution 24

5.3 Building a professional sales staff 24

5.3.1 Theoretical Insight 24

5.3.2 Enhancing the capacibility of sale force 25

5.4 Innovate method of monitoring sales staff 26

APPENDIX 1: SURVEY QUESTIONNAIRE 28

APPENDIX 2: CHARACTERISTICS OF SURVEY SAMPLE 30

APPENDIX 3 33

to solve The article will analyze in depth the problems and causes stemming from the company such as price policy, promotions and sales team To help the company overcome the current limitations, increase the efficiency in business operations and increase the competition in the fierce market today, the author decided to choose the topic: “THE SOLUTION FOR IMPROVEMENT OF HORECA CHANEL IN UNILEVER FOOD SOLUTION AT HO CHI

MINH CITY”as the research topic for her graduation thesis

CHAPTER 1 BACKGROUND INFORMATION 1.1 Unilever Vietnam

Unilever is a global company that specialises on fast-moving consumer products in more than 190 countries across the world Established in Vietnam from 1995, Unilever started to invest more than 300 million USD with a modern factory in Ho Chi Minh City and Bac Ninh Province Through its network of more than 150 distributors and more than 300,000 retailers

1.2 Unilever food solution Vietnam

Unilever food solution is the dedicated foodservice business of Unilever in general, Unilever Vietnam in particular The portfolio encompasses many of the world's big food brands including Knorr, PG Tips, Flora, Colman's and Hellman's A combination of a winning product portfolio, customer insight, and investment in our people, helps Unilever food solution deliver year-on-year growth through offering our bright minded chefs and caterers tailored solutions, helping them to expand their business and do what they love As the dedicated foodservice business of Unilever, food solution leads the industry in providing innovative and high quality professional food ingredients and value adding services created by 300 professional chefs Covering 50 cuisines, in 200 million dishes a day Unilever food solution Vietnam has 3 main brands: Knorr, Lipton and best food

1.2.1 The business goal

The target growth of Unilever Food Solution is 20% per year and business results achieved the highest growth rate of all parts of Unilever Vietnam in recent years

Figure 1.2.1: Structure of product portfolio in 2020

(Source: Company financial statements 2020)

In the horeca chanel, Food Solutions' customer segments are restaurants, restaurant chains, hotels, canteens, supermarkets and wholesale markets Currently, the most important customer segment is wholesale market, followed by supermarkets, restaurants, hotels and restaurant chains It is shown in Figure on the 2019 customer segment chart as follows:

Figure 1.2.2: Proportion of customer segmentation in 2020

(Source: Company financial statements 2020)

1.2.2 Competitors

As a leader in the FMCG industry in general and food services in particular, Unilever Food Solutions currently has competitors both domestically and internationally

For Knorr spices: the main competitors are Aji and Maggi

The Mayonnaise brand line has fierce competition from rivals from Japan, Kewpie and Aji

Lipton tea products have strong competition from foreign rivals Dilmah, Twinings, domestic rivals Cozy, Tra Thai Nguyen

1.2.3 The suppliers

Currently Unilever Food Solution products are mostly imported products from the Philippines, Malaysia and Thailand, three products produced in Vietnam are Knorr Seasoning Seeds, Knorr Chicken Powder and Knorr Seafood Powder

With the global scale, the suppliers of Unilever Food Solutions are big, reputable suppliers, ensuring raw materials and quality as required

The problem here is that the current production capacity of the plant still does not meet the needs of countries in Southeast Asia, leading to a shortage of some peak season

1.2.4 Target customers and brand positioning

The product is positioned as "Product for professional chefs", and the target customers are chefs of restaurants, hotels, restaurants, so Food Solutions products give customers the whole prize The culinary solution, not only at providing spice products with common features, will UFS provide products that bring optimum benefits, the combination of products together to have benefits and helps delicious food become the best

In addition, Unilever Food Solution also provides special services to assist the chefs to develop recipes, support the training of kitchen management, food safety and hygiene through UFS's domestic and international professional kitchen team

On the other hand, Unilever Food Solutions also organizes programs to help develop the talent of the kitchen, the contest helps cooks have the opportunity to show their talents

CHAPTER 2 SYMPTOM 2.1 Symptoms of the problem

Vietnam has always been rated as the favorite food and drink country and the most attractive culinary culture of Asia Statistics of Dcorp R-Keeper Vietnam and Statista show that Vietnam's F&B industry currently has 540,000 restaurants, 22,000 coffee shops, bars and over 80,000 chain-based restaurants Revenue in 2019 hits $200 billion, up 34.3% compared to 2018 The industry's revenue forecast is likely to reach $408 billion by 2023 Along with the development of the country, each year the number of new restaurants, hotels, restaurants is very large World famous food chain brands and restaurants together with local investors have created a colorful picture of this service industry Statistics in recent years show that retail sales of food and beverage items account for 17% of total retail sales of goods and achieve increasing growth Food and beverage currently accounts for the highest proportion in the monthly expenditure structure of Vietnamese consumers (accounting for about 35% of the spending level) Ho Chi Minh is the most potential region with the highest number of restaurant and luxurious hotel in the whole country, but the total sale revenue of Ho Chi Minh’s horeca chanel does not get the target that the board of management expects and the growth rate is increasingly going down

2.2 Symptoms validation

The business areas are divided into 6 regions such as Ho Chi Minh, Mekong, East, Ha Noi, Central, North When separating targets for those regions, the firm has calculated based on every potential area The price of products will go up once a year of two years The board of management has expected that the growth rate of B2B channel, including wholesale, restaurant and hotel, chain, in 2020 is 20% higher than that of 2019 However, in the first three months of

2020, the revenue of Ho Chi Minh’s horeca chanel has not achieved the expectation These chart will show more specifically

Figure 2.2.1: The Revenue in the same period in Ho Chi Minh from 2019 to 2020 (Source: Company financial statements 2020) and unit measurement: million dong

Figure 2.2.2: The Comparision of Revenue in the same period in Ho Chi Minh (Source: Company financial statements 2020) and unit measurement: million dong

In the January of 2020, the revenue increases approximately 5% compared to the one

of 2019 and near to target But in the next month, this number has a significant decrease about 200

4714

2226 3550

4950

2085 2950

THE REVENUE OF FIRST QUATER

The sale of HCM's horeca

THE TARGET THE FACT 0

1000 2000 3000 4000 5000 6000

million compared to the total sale in February of 2019 Ho Chi Minh is considered as the center business area but not to achieve target While other regions with smaller scale of economy such as Mekong nearly obtain the target

Figure 2.2.3: The Comparision of Revenue in the same period in Mekong Area (Source: Company financial statements 2020) and unit measurement: million dong Market demand is currently very large for the food service segment, according to statistics in Vietnam, restaurants and eateries provide about 100 million meals a day, an estimated average market growth of 6.3% each year

The main service channel is domestic restaurants and eateries, most of which will be traditional Vietnamese eateries, followed by European and Asian restaurants such as Korean, Japanese, Thai and Restaurant restaurants are not traditional Vietnamese with less than 25% market share

Restaurant chains are a trend and booming in the coming years Currently, the chain of restaurants belongs to two big brands: Golden Gate with nearly 200 restaurants for 19 different brands and Red Sun with more than 100 restaurants nationwide

In addition, the demand of eating out of Vietnamese people is increasing, people 's life

is getting more busy so the demand for eating out is getting higher and higher, not only in the morning and in the afternoon, but in the evening, the number of customers comes statistic eating places also increased significantly Moreover, the development of the new generation with the current globalization, the need to explore cuisine and show lifestyle, sharing with friends through

THE TARGET THE FACT 0

1000 2000 3000 4000

social networks is becoming more and more popular making the meal also becomes easily shared

in the community, the need for unique new meals also increases

The below chart will show the Knorr products consumption in the market from 2015

is always stable in the top of the dominant brands in Vietnam For the past four years, Knorr has been consistently in the top 50 of the Brand Footprint report, proving the status of one of the prestigious spice brands with a lifespan of 179 years

Ho Chi Minh is a place that has the most rapid growth rate of the food and beverage sector in the country and Knorr brand has the strong position in the market but the enhancing in the amount of output sale in Ho Chi Minh is not high

0 500

THE NUMBER OF CONSUMER USING KNORR PRODUCTS

THE NUMBER OF CONSUMER USING KNORR PRODUCTS

CHAPTER 3 PROBLEM IDENTIFICATION 3.1 Potential problem

3.1.1 The market has fierce competition

Competition in the market is an objective existent factor that the company is difficult

to control As more and more competitors emerge, and the company does not have new innovations that go faster than its competitors, especially in the catering and spice industry, the company will face many difficulties The first problem that comes up is the reduced revenue

Not as bustling as other food products always pay attention to consumers by events, promotion to gain market share is quite cumbersome and "monumental", the market of wedge seeds takes place silently, but downright fierce and fierce Companies that already have a foothold

in the market always launch "moves" to gain market share, while new brands try to find a gap to continue exploiting each customer

In Vietnam, spices always prove to be an attractive market and have a lot of potential for exploitation This is evidenced by the fact that more and more "giants" in the domestic and international food industry have invested in production expansion (the latest is Long Thanh Ajinomoto Plant), which can include floating brands excels are favored by many consumers and known as Knorr (Unilever), Maggi (Nestle), Aji-delicious (Ajinomoto), Chin-su (Massan), Vedan (Vedan), With growing demand, in recent years, the domestic processing and processing food industry has developed rapidly with the rate of 150-200% / year Since 2001, Maggi seeds have been added to Vietnam market, and Maggi has also jumped in Previously, Ajinomoto and Vifon created a fierce competition to gain market share According to a study conducted in 2003, Vietnam market consumes about 10 million liters of soy sauce and about 1,500 tons of seasoning seeds each year

Currently the market share of the three foreign brands of grain are Knorr (Unilever), Ajinomoto (Ajinomoto) and Maggi (Nestlé) if the average in the world is approximately the same According to Kantar Worldpanel Brand Footprint 2013, the Maggi wedge of Nestlé was chosen to buy the most with 1,580 points, Knorr 1,290 points and Ajinomoto 980 points

But product competition is still the hottest "battle" because a brand has just announced

a new strategy, then soon other brands have launched a strategy to follow

For example, in July 2013, Ajinomoto announced a quality improvement for Aji-Ngon seasoning seeds with an investment of US $ 3 million for bone and meat basement extracting workshops, and improved packaging With this strategy, Aji-Ngon believes that it will quickly

increase its market share because it is the first company to invest in the extraction line of the stewed water in the bones of the bones, ribs, lean shoulder meat and pork lean meat Most recently, the product "Aji-delicious Pork with Calcium supplemented" seasoned by this company

in late September 2014 has appeared dense in distribution channels

In addition, Nestlé then released Maggi 3 sweet wedge-flavored wedge seeds with two types of pig and chicken Unilever also did not slow down when it announced that it had cooperated with the Nutrition Institute in the program of National Nutrient Supplement; and the middle of August last year officially launched Maggie products that added vitamin A

And yet, these three foreign brands also take advantage of more market access in remote areas Kantar Worldpanel's latest research results show that growth in seasoning value is 4% in urban areas and 15% in rural areas The proportion of households that choose to buy seasoning grain products currently accounts for 72% in urban areas and 62% in rural areas

3.1.2 The price of products has not enough competitive advantage

Unilever Food Solutions products are priced according to the market-leading strategy, with prices commensurate with quality Knorr, Best Food, Lipton products are all priced at least 5% - 10% higher than other competitors

I do survey to research customer perception of price activities In the survey questionnaire, customers have 5 factors related to price The first Cronbach’s alpha test results are variable GC5 “Flexible payment form” because the correlation coefficient is 0.287 <0.3 After variable type, we have the Cronbach’s alpha coefficient from 0.697 to 0.717 Running Cronbach’s alpha for the second time gets the following results:

Form

Medium Value

Difference Standard

According to the survey results, customers are satisfied with the product price because the product quality is equivalent (4.29), in terms of debt, it is also evaluated quite well and the

product price is less volatile compared to the market, however, the lowest rated factor is the competitive product price compared to similar products (3.72), which can be seen on the average price of products compared to competitors, Unilever Food Solution products are higher than current competitors This makes some consumers unsatisfied with products and they has the tendency to change the products of competitor to minimize their cost

3.1.3 The promotion does not satisfy the demand of consumers

Because Unilever Food Solutions operates directly with kitchens or restaurant owners, most sales promotion programs are promotions by offering discounted programs with products related to kitchens such as sugar, cooking oil, spoon and fork to stimulate the direct needs of customers to their businesses

Unilever Food Solutions also organizes conferences to share with different customers about products, menus, culinary trends so that customers can better understand the products, companies and services that UFS bring

Enhance UFS's image through major anniversary programs such as "60 years of Knorr Chicken Powder", the biggest event held since the beginning of 2017 is the "Ngon Quan Viet" program, the show is the For the chefs across the country to have the opportunity to participate to show their talents or the place to learn from their masters in the Kitchen industry, the program is organized throughout the North, Central and South regions through 9 rounds of competition, and the final round will be held in Ho Chi Minh

From the beginning of 2017 until now, Food Solutions has focused on developing digital marketing channel into website, Facebook and EDM Information about the company, products, dishes is constantly updated on the website and Facebook In addition, events, conferences and competitions are regularly updated on social networks

I do survey to research customers' perception of marketing promotion activities In the survey questionnaire, customers have 3 factors related to marketing Test results with Cronbach’s alpha coefficient of 0.647 and measurement variables with a total correlation coefficient> 0.3 should not exclude any factor

According to the customer survey results as shown in the above table, we see that the variables are highly appreciated by customers In particular, the most appreciated factor is direct marketing programs from companies through employees to customers (3.65) Next came the evaluation of the company's promotions quite attractive (3.57) and finally the UFS products were advertised regularly, impressive and long-term, this factor was rated poorly most effective in promotion programs compared to other factors (3.55) This can show that the current promotion has not met the needs of consumers

3.2 Problem Validation

Based on my knowledge I have after two-year experience in Unilever and the survey data, I identify some potential problems as the above After that, I contact with south area manager

to explore about the main problem

As the south area manager of Unilever Food Solution in Ho Chi Minh city, Mr Nguyen Xuan Huy said: “The difficulty of the spice industry is that when this enterprise releases new products, other businesses immediately have similar products with many stimulus measures,

so the market is always fierce competition Brands that already have a place in the market launch many programs to gain a percentage of the market share, while new brands try to find a gap to cut their feet However, competition promotes growth Many labels jump into the game will create more motivation, while demonstrating that this piece of cake is very lucrative The problem lies in

Observed variables

Size form

M Medium Value

Difference Standard

UFS products are advertised regularly,

impressively and remember long

how businesses can improve products, meet the diverse tastes of Vietnamese people That problem was answered by Knorr during many years in Vietnam.”

Survey data shows that the problems that happen in Horeca channel, I contact with line manager to explore about the main problem

The depth interview with Line Manager (Ms Vi):

Q&A Coding (key

answer)

Category (Concept in theory)

Quote (description of coding from answer)

Q1 How do Unilever Food

compared to competitors?

Ms Vi: Each company provides

spice products with different

advantages, prices or services,

customers will know how to

choose according to their needs

I found that in general, the

prices and services that Food

accordingly Especially, when

customers buy spices directly

from the company, they will be

supported by the professional

kitchen team of the company in

setting up menus or making new

dishes for customers when

customers request This is a

company that no competitor can

do

Q2 Why aren't sales growing as

expected while the product is

Q&A Coding (key

answer)

Category (Concept in theory)

Quote (description of coding from answer)

still selling and every month

salespeople are still opening

new customers?

Ms Vi: Every month, the sales

staff still bring new customers to

the company, but the sales of

new customers are not high

Most of the promotions are good

monthly, they only focus on

selling to patrons, which is the

reason why sales revenue cannot

grow In addition, there are new

customers every month, but

there is a loss of sales among

customers for many reasons

Firstly, the company has many

sales channels, each month the

promotions for the channels are

adjusted differently, so the

resale price varies There are

channel has a better promotion,

then customers turn to buy at the

products are easily replaceable

except for specific spices that

are difficult to replace, so few

competitors Some salespeople

do not take good care of their