Company Overview
Saigon Gold JewelryCompany
Founded in 1988, SJC, or Saigon Gemstone Gold Jewelry Company, has been a state-owned enterprise under the People's Committee of Ho Chi Minh City for over 22 years, as of 2010.
Founded as Saigon Gemstone Gold Jewelry Company in 2010, Saigon Gold Jewelry Company Limited (SJC) has rapidly evolved into a leading economic group in Vietnam, focusing on gold bullion and jewelry while establishing a strong national brand with international aspirations The company operates from its headquarters and boasts 23 branches, 6 subsidiaries, and 6 associates, alongside 13 invested enterprises Its extensive distribution network features over 200 stores, 43 official agents, and more than 3,000 retail outlets nationwide Additionally, SJC operates a centralized gold jewelry factory, producing over 500,000 products annually.
SJC has consistently garnered numerous accolades, including the First-Class Labor Medal and recognition as one of the Top 500 Leading Retailers in the Asia-Pacific region for four consecutive years, awarded by Top Retail Publishing Magazine in Singapore In October 2011, SJC introduced innovative Hologram packaging for its gold bullion, enhancing anti-counterfeiting measures to protect consumer rights and uphold brand reputation Furthermore, SJC was ranked fourth among the 500 largest enterprises in Vietnam.
Overview of Kim Hoan Saigon
Kim Hoan Saigon Organization Chart
KIM HOAN SAIGON, a subsidiary of SJC, operates as a multi-sector business group with a primary focus on gold bullion and jewelry production and trading, alongside ventures in real estate and financial investment Renowned for its trustworthiness, prestige, and quality, the KIM HOAN SAIGON brand has established itself as a national brand Its diverse product range includes both SJC gold jewelry and SJC Diamond gold jewelry, catering to various customer preferences from common to high-end offerings.
SJC gold jewelry offers a diverse range of unique and trendy designs, utilizing advanced global casting technology and precision machinery for punching, connecting, and engraving These products are available at affordable prices, making them accessible to a wide customer base and fulfilling the demands of dealer stores across the country.
Launched in late 2012, SJC gold bullion high-end jewelry caters to the discerning tastes of the luxury market These exquisite pieces are handcrafted, showcasing a stunning blend of natural gemstones, including diamonds, rubies, and sapphires, intricately combined with gold bullion.
In this gold jewelry segment, SJC divides products into 2 categories: Gold jewelry and DiaGold bullion Jewelry Diamonds are carefully selected according to 4C standards and
Natural gemstones are meticulously refined to enhance their color, transparency, and clarity, resulting in unique products that embody elegance and sophistication This article will refer to gold jewelry as the entire jewelry segment of SJC.
Vision:Kim Hoan Saigon gold jewelry products meet the standards required by
Circular 22 on the measurement management in gold bullion trading and the quality management of gold jewelry and fine art gold bullion circulated on the market with the ability to meet Bulk applications and fast Customers when purchasing SJC gold jewelry products are absolutely assured of the prestige and product quality, plus good after-sales regime.During 32 years of operation and development, SJC has been awarded with many valuable awards and highly preferablein the country and in the region.
Marketing and Sales Department
Structure of the Marketing and Sales Department
Source: Structure chart of SJC
Manager of Marketing and Sales Department
1 head stores of each branch
Vice Manager of Marketing and Sales Department
Symptoms
Revenue and Gross profit decrease
This article begins with a concise overview of the company, highlighting a significant concern: a decline in both revenue and gross profit over the past two years.
Table 1 Sales Revenue and Gross Profit of SJC from 2016 to 2018
Source: KIM HOAN SAIGON Financial Report 2016–2018
SJC's financial report reveals a consistent decline in sales revenue for Kim Hoan Sai Gon, with a 9% drop in 2018 and a further 5.6% decrease by September 2019 Additionally, gross profit experienced a significant decline of 65% in 2018, followed by a 28% reduction up to September 2019.
In order to observe the symptoms clearer, the author also took an exploration into financial report in 2018 of SJC’s main rivals: PhuNhuanGold jewelry (PNJ) and Doji
Between 2016 and 2018, PNJ and Doji experienced growth in revenue and gross profit However, a notable decline in sales revenue emerged when compared to the average sales revenue of key competitors in the gold jewelry sector, highlighting a concerning trend for both companies.
Brand Sales Revenue Changes from 2018 to
Table 2 Changes in Revenue of SJC and its key competitors from 2018 to 9/2019
Source: Financial Report of SJC, PNJ, and Doji from 2018 to 9/2019
The author observes that while SJC's revenue remains higher than PNJ's, its Gross Profit has reached a concerning low compared to competitors PNJ and Doji Consequently, the focus of the study is on the decline in Gross Profit at SJC.
Problem Identification
Potential Problems
From the symptom and data, the author opened an interview with the Vice Director of SJC – the person in charge of SJC gold products performance
The Vice Director of KIM HOAN SAIGON highlighted that the challenges faced by SJC stem from the underperformance of the Marketing and Sales Department, as well as elevated costs of goods sold.
The Vice Director attributed the sales decline to the underperformance of the sales and marketing teams, noting a loss of market share to younger brands such as PNJ and other retailers Additionally, he pointed out that sales revenue was only sufficient to cover rent and employee salaries, highlighting the excessive operational costs.
The interview highlights a critical issue within the Marketing and Sales Department, as noted by the Vice Director, who pointed out that various factors contribute to declining profitability, including high operating costs, elevated cost of goods sold, and competition from rivals like PNJ and Doji in the gold jewelry sector A deeper analysis of the Marketing and Sales Department's performance reveals specific underlying problems that are further exacerbating the profit decline.
- High costs of goods sold;
- Underperformance of Marketing and Sales Department;
- Lack of focus on developing gold jewelry products
The interview has provided a clear insight into the potential issues within the Department related to the identified symptoms, allowing for a comprehensive causes-and-effects analysis to be established.
Diagram 1: Preliminary cause-and-effect tree of KIM HOAN SAIGON
3.1.1 High Costs of Goods sold
Operating costs are all costs that related to producing and managing business In finance, the term operating costs often refer as operating expenses, as known as OPEX
Operating expenses also include things like:
- Employee health insurance, pensions, and other benefits
SJC's showrooms and stores are strategically positioned in high-rent areas such as major avenues and city downtowns However, the budget allocated for employee salaries is not proportionate to the sales revenue generated by these retail locations Additionally, SJC faces challenges with its cost of goods sold (COGS), which are excessively high in relation to its gross profit.
Low Revenue of Gold jewelry Products
Low Investment on Gold jewelry Products
High Costs of Goods Sold
Lack of focus on developing Gold jewelry Products
High inventory on Gold bullion
The cost of goods sold (COGS) is a crucial element of operating expenses, representing the direct costs associated with producing a company's goods or services within a specific timeframe Accurately calculating COGS is essential, as it significantly influences the company's bottom line and enhances gross profit According to Leahy (2004), there is a direct correlation between profitability and COGS, indicating that elevated COGS can result in reduced profitability.
Table 3: COGS compared with Revenue of SJC 2017-2019
Source: Profit and Loss Statement of SJC 2017- 2018
COGS represents the largest portion of SJC's operating costs, yet these components can be effectively monitored and optimized For KHSG, COGS primarily reflects the value of gold bullion, which aligns with global market prices, making it a manageable issue rather than a significant concern.
3.1.2Lack of focus on developing of Gold jewelry Products
Figure 1: SJC,PNJ and Doji profit and revenue comparison
Source: SJC, PNJ and Doji Financial Report in 2018
According to Figure 1, PNJ achieves the highest gross profit among the three companies, despite having the lowest sales revenue This remarkable gross profit can be attributed to PNJ's product structure, where 80% of its gross profit derives from gold jewelry sales, in contrast to KIM HOAN SAIGON and Doji, which primarily focus on gold bullion.
(5) The amount of gold used in jewelry was reaching about 75% of the world total demand for gold This can be indicated that gold jewelry is a potential market
(6) In the field of gold industry, there are 2 major segments: puregold bullion and gold jewelry Although the gold bullion business has a very large revenue, the profit generated is insignificant
The gross profit margin for gold bullion typically ranges from 0.5% to 1%, meaning that for a sale of 1 kilo of gold bullion at 48 million VND, businesses earn only about 48,000 VND Recently, gold trading enterprises have been transitioning their focus towards gold bullion, jewelry, and diamonds, which offer significantly higher profit margins compared to traditional gold bullion.
(7) “With all gold jewelry, there are 4 components to the cost at retail (I) the materials, (II) the workmanship/fabrications costs, (III) the retailer's profit, and (IV) sales tax “
The profit margin for gold jewelry typically ranges from 70% to 80% of the product price, resulting in gross profits that significantly exceed the costs of goods sold.
To enhance profitability, businesses should focus on developing innovative gold products and jewelry designs by establishing a dedicated R&D department Additionally, exploring new markets and targeting diverse customer segments can significantly contribute to revenue growth.
The product portfolio of KHSG:
To enhance gross profit, the strategy should prioritize the development of gold jewelry products rather than focusing on gold bullion, which yields lower profit margins.
The Vice Director highlighted that the primary issue for SJC PNJ and Doji lies in the weak development of the gold jewelry segment, which limits profitability to a maximum of 4% due to stagnant gold prices Recognizing that the decline in profits stems from reduced sales revenue, SJC must prioritize strategies to enhance its gold jewelry offerings, especially since these products currently do not lead in the income statement.
3.1.3Underperformance of Marketing and Sales Department
KIM HOAN SAIGON's Vice Director acknowledged a significant weakness in their Marketing Department's advertising capabilities In today's digital landscape, the company relies solely on its website as a channel to connect with customers As the Vice Director noted in an initial interview, "Only customers who have previously visited or purchased products from SJC Store are aware of the gold offerings."
KIM HOAN SAIGON offers 17 jewelry products, but they are not attracting key buyers in this market This situation highlights a significant issue: the decline in sales of their gold jewelry products can be attributed to an ineffective advertising campaign.
Validating Main problems and consequences
The author identifies three potential issues affecting KHSG, analyzing data to pinpoint the core problem Initially, the high cost of goods sold, linked to gold bullion value, is deemed not to be the main issue Instead, the focus shifts to two other concerns: the lack of a gold jewelry product strategy and the underperformance of the sales and marketing team Through an in-depth interview with KHSG's Vice Director, responsible for the company's performance, it becomes clear that the primary challenge lies in the absence of a developed gold jewelry product strategy, especially given the slight revenue increase from 2017 to 2019.
The author discovered a significant connection between the absence of a well-defined product strategy for gold jewelry and a decline in profitability.
According to the World Gold Bullion Union's report on gold jewelry pricing, the profit margin for gold jewelry is approximately 80% of its product price, while the profit from pure gold bullion ranges from only 0.5% to 1% This significant difference indicates that the profits from gold bullion are insufficient to maintain a positive gross profit for SJC.
Focusing excessively on boosting sales of gold bullion while neglecting sources for gold jewelry can result in high revenue from bullion but low profits overall, as the sales of gold jewelry remain underwhelming despite the strong performance of bullion products.
According to a recent report by KB Securities, Vietnam's gold jewelry retail market is highly fragmented yet possesses significant growth potential This presents favorable opportunities for businesses such as PNJ, particularly as the economy improves and consumer purchasing power rises.
The luxury consumer industry is significantly influenced by the economic cycle, as demand for non-essential products tends to decline during economic downturns.
Cause validation
Potential causes
The decline in gross profit can be attributed to a lack of focus on developing gold jewelry products An interview with the Marketing and Sales Manager revealed that SJC's reputation is heavily tied to gold bullion, leading to prioritization of resources in that area The Manager noted, “Our responsibility is maintaining national gold storage at a safe level, which causes the Board of Directors to concentrate primarily on gold bullion.” Consequently, this focus has resulted in minimal attention and investment in the gold jewelry segment, despite attempts to advocate for budget allocation to enhance marketing efforts in that area.
Diagram 2: Cause-effect map of Gross Profit Decline in SJC
Lack of developing gold jewelry products
Low attention on gold jewelry products
High inventory on gold bar products
Lack of functional department Lack of R&D
SJC, approved by the Vietnam Government, holds the exclusive rights to distribute gold bars, attracting customers focused on accumulation and savings In contrast, gold jewelry appeals to high-income individuals seeking luxury products, necessitating a professional advertising approach and continuous trend updates to effectively engage this market segment.
(11) According to Goldring, D (2015): reputation orientation is a valid construct and has an impact on business performance
Customers primarily view KHSG as a distributor of gold bullion rather than a retailer of gold jewelry, a perception rooted in the longstanding reputation of SJC Despite over a decade of selling gold jewelry, KIM HOAN SAIGON is predominantly recognized for its gold bullion sales, which significantly impacts its revenue, as profits from gold jewelry remain minimal Furthermore, insights from interviews with the Vice Director reveal that there has been no advertising campaign for gold jewelry products since 2016, and SJC has not engaged in any digital marketing efforts to enhance customer access to this product line.
This led to the result that KIM HOAN SAIGON unable to reach new customer groups and target customers of gold jewelry product, which is very significant
4.1.2High Inventory on Gold bar
(12) Inventory is one of the most important items that retailers should control to develop their competitiveness due to its role in corporate profitability (Yasin Allen et al,
SJC maintains substantial gold bar reserves primarily due to the high demand for gold bullion, necessitating the storage of significant quantities to satisfy daily customer consumption Consequently, over 80% of SJC's capital is allocated to gold bullion.
Bernard and Noel (1991) identified a significant correlation between inventory levels and both revenue and profits Despite the high inventory of gold bullion at SJC being a national requirement, it has negatively impacted profitability.
Between 2017 and 2019, SJC's revenue and profit margins were impacted by the sale of low-margin or loss-making products, such as gold bullion.
The capital investment in gold jewelry products is expected to remain low, ranging from 10% to 20% Due to budget constraints, the investment in developing and promoting the gold jewelry segment will be minimal, making it unlikely for the proposed advertising campaign to receive approval.
4.1.3 Lack of position in charge of developing Gold jewelry product
The technical department is responsible for ensuring product quality by verifying the total gold bullion content and checking the year of the gold bullion used in the products.
The marketing and sales department plays a crucial role in updating products based on current market trends Once approved by the company, these updates lead to the production of new product lines However, importing products may fail to satisfy market and customer demands, as the marketing and sales team often lacks the necessary expertise in gold jewelry design and advanced techniques.
(14)According to Linda, D (2014): three types of consumers that determined the growth of branded gold jewelry products
● “New money” consumers who wear branded gold jewelry to show off their newly acquired wealth (in contrast to “old money” consumers, who prefer heirlooms or estate gold jewelry)
● Emerging-market consumers, for whom established brands inspire trust and the sense of an upgraded lifestyle—a purchasing factor quoted by 80 percent of our interviewees
● Young consumers who turn to brands as a means of self-expression and self- realization"
The gold jewelry segment demands more specialized care and investment compared to gold bullion SJC's focus on the gold jewelry market appears insufficient, lacking both financial investment and the necessary skilled human resources to effectively develop these products.
These duties should have belonged to the R&D department, the company's creative and design department.
Validating Causes
The validating step aims to pinpoint the primary cause impacting the main problem Initially, the author performed a literature review and subsequently conducted in-depth interviews with senior employees from the Marketing and Sales Department, as well as the head executive, to determine the final reason.
According to Helm (2007), a firm's reputation is one of its most valuable intangible assets Despite SJC's over ten years in the gold jewelry industry, customers primarily recognize the brand as a reliable distributor of gold bullions This perception presents both advantages and disadvantages for SJC.
SJC's traditional reputation is the exclusive distributor of pieces sold by the Vietnamese government SJC is framed by the brand of gold bullion bullions and old style
Gold bullion buyers typically focus on saving and hoarding, while high-income customers purchasing gold jewelry seek luxury products To effectively reach this affluent demographic, it is essential to adopt a more professional and contemporary advertising strategy that aligns with current Japanese trends.
Moreover, the current customers and KHSG’s target new customers of gold jewelry products are different Market and target customers do not know about SJC's gold jewelry product line
Currently, SJC has not had any advertising campaign for the product line since
2016 SJC has not implemented any offline or digital marketing campaigns to increase
The advertising campaign for KIM HOAN SAIGON is ineffective, particularly in digital marketing, where performance is notably lacking This suggests that access to the target customers for this product line is limited, indicating a need for improvement in marketing strategies.
SJC's strong traditional reputation has led customers to primarily associate the brand with gold bullion, resulting in an overemphasis on this product line Consequently, when customers seek gold jewelry, SJC is often not the first brand that comes to mind.
Consequently, sales of gold jewelry products will not be as strong as gold bullion bullions, so SJC will not highly consider on developing gold jewelry products
4.2.2 High inventory on Gold bullion Product
Source: Balance Sheet of SJC from 2017 – 2019
SJC maintains consistently high gold reserves; however, the company has increasingly shifted its focus towards jewelry products According to an interview with the SJC deputy director, the substantial gold reserves are not the primary reason for the reduced emphasis on jewelry development.
Blinder and Maccini (1991) assert that effective inventory management positively influences firm performance by enhancing production planning and significantly lowering procurement costs.
SJC is focusing on investment and development, yet faces challenges due to a significant inventory backlog for this product line The Deputy Director of SJC acknowledges that this issue hampers effective promotion, as the products fail to align with customer preferences The marketing department has recognized this ongoing problem and admits it has not been resolved over the years.
4.2.3 Lack of position in charge of developing Gold jewelry Product
According to Ansoff (1987), diversification entails moving away from familiar business areas while staying within previously successful geographical markets SJC, known for its esteemed reputation in the gold bullion sector, faces challenges due to low profitability in this area To leverage its strong brand, SJC should focus on enhancing its competitive differentiation by expanding into the jewelry sector This strategic move necessitates appointing a dedicated position to oversee the development of gold jewelry products.
Sales and Marketing managers must take responsibility for the intricate yet unified relationship between sales and marketing to enhance collaboration among their teams According to Kenneth and Piercy (2010), a key challenge arises from the differing timeframes of their objectives—sales targets are typically short-term, while marketing goals are long-term In the current business environment, the Marketing and Sales Department is overseen by a single manager who handles both areas Presently, sales staff only communicate daily sales updates to store heads, who then relay this information to the senior marketing team.
The Marketing Department is responsible for monitoring global trends and designs in gold jewelry Once new potential products are identified, the Marketing Manager presents them to the Board of Directors for approval Following approval, the Vice Marketing and Sales Manager communicates the new products and promotional programs to the heads of six stores Each store head then relays this information to their sales staff, who in turn report sales back to the store head, who reports to the Vice Marketing and Sales Manager Additionally, the Media and Marketing teams are tasked with posting the new products and promotions on the company's official website and creating standees for each store.
The Marketing and Sales teams are diligently fulfilling their individual roles; however, there is a lack of regular communication, as they do not hold weekly or monthly meetings to review overall sales performance or to share vital information between the Marketing staff and store managers.
Sales employees play a crucial role in directly interacting with customers at the store Despite the daily opportunities to engage with both new and returning customers, they seldom utilize surveys to provide valuable insights for the Marketing Department.
The Marketing Department and Sales employees operate independently due to geographical separation, with the Marketing Department based at the Head Office while the six stores are located far away This distance creates challenges in organizing effective information exchange meetings between the two groups.
To address the issue, the Vice Director highlighted the collaboration between sales employees and the marketing department through a daily Zalo group chat This platform facilitates the exchange of customer demands, new orders, and daily purchases, while the marketing team uses it to announce new products and promotional campaigns to store heads and sales staff Although this process allows for the collection of valuable customer feedback on new products, it has not significantly strengthened communication and solidarity among team members.
Alternative Solutions
Establish R&D team in Technical department
In-depth interview 1 script
Location: KIM HOAN SAIGON Head Office, 92-94 LưuVăn Lang Street, BếnThành Ward, District 1, HồChí Minh city
Interviewee: The Vice Director of KIM HOAN SAIGON
Topic: Discuss about Possible Problems
According to SJC's 2016 financial report, the company's primary revenue source was from gold bullion sales Currently, it is important to determine if gold bullion still represents the majority of SJC's product offerings.
The majority of the company's revenue is generated through gold bullion trading, which serves as a strategic product for the brand This focus on gold bullion not only establishes the SJC brand but also influences market trends in gold bullion trading, a sector with a rich history spanning over several years.
Over the past 20 years, the gold bullion market has evolved to meet the demands of consumers and investors, solidifying its significance in traditional transactions Recently, there has been a growing demand for large-scale monetary gold bullion trading in Vietnam, highlighting the need for a diverse range of high-value gold bullion types that facilitate easy hoarding, payment, and transport while minimizing processing costs Consequently, the company's strategic focus prioritizes gold bullion, which constitutes a significant portion of its business.
Question 2: How come the revenue increases but profit decreases?
The gold bullion industry typically yields a gross margin of approximately 0.5-1%, and operates under state management High operational costs associated with store and management systems have hindered profitability, while the gold jewelry sector has struggled to deliver positive results due to significant inventory levels, leaving the company in a state of financial loss.
Question 3: What do you think of Marketing& Sale department performance?
The marketing function has struggled to keep pace with advancements in digital technology, largely due to a limited team consisting of only one IT staff member and one media staff member The IT staff focuses primarily on managing the company website, while the media staff is tasked with handling product images Unfortunately, there is a noticeable gap in our workforce, as we lack personnel dedicated to customer engagement and outreach.
40 market survey to understand about customer demand and market trend Due to this, our approaching ability to new customers is poorly weak
The decline in sales can be attributed to the underperformance of our sales and marketing teams, leading to a loss of market share and customers to emerging brands like PNJ Consequently, the revenue generated from our stores is only sufficient to cover rent and employee salaries, indicating that our operational costs are excessively high.
Question 4: Do you think that the underperformance of Marketing & Sale department is the main problem that leads to the decline in profitability ?
The decline in profitability can be attributed to several factors, including high operating costs, elevated cost of goods sold, and intense competition from rivals like PNJ and Doji in the gold jewelry sector Historical data analysis of SJC, PNJ, and Doji reveals that a lack of strength in the gold jewelry segment is a significant issue Even with optimal performance from the Marketing and Sales department, profitability is unlikely to exceed 4%, as gold prices are not expected to rise significantly.
In-depth interview 2 script
Location: KIM HOAN SAIGONHead Office, 92-94 LưuVăn Lang Street, BếnThành Ward, District 1, HồChí Minh city
Interviewee: The Manager of Marketing and Sales Department of SJC
Topic: Discuss about Possible Causes
Question 1: What is your opinion about marketing problems leading to reduced sales?
Our marketing efforts currently lag behind competitors such as SJC, Precita, and Doji, contributing to a decline in sales This shortfall is primarily due to our lack of digital advertising initiatives aimed at attracting new customers Unfortunately, we face challenges in securing qualified personnel and budget constraints that hinder our ability to hire an external advertising agency.
Question 2: What do you think about the digital marketing of KIM HOAN SAIGON?
Many online shoppers, particularly teenagers, tend to focus on silver gold jewelry, while older individuals with greater purchasing power prefer to buy gold bullion and diamond gold jewelry in-store Due to their high value, these premium items cannot be purchased through digital platforms and must be selected in person Customers who have previously visited or purchased from the SJC Store are familiar with KIM HOAN SAIGON's gold jewelry offerings; however, they do not represent the primary market for this product line.
Question 3: However, other brands such as PNJ, Precita,… which are also top gold jewelry selling companies are still using digital marketing What do you think about this?
As a state-owned company, we face significant budget constraints for marketing compared to our competitors, with only one Marketing and Sales Manager handling both roles This limitation has resulted in weak marketing efforts, leading to low sales of our gold jewelry products, which we've been selling for many years Many customers remain unaware of our brand and often confuse us with other brands due to our insufficient marketing Despite recognizing these challenges, we are unable to increase our marketing budget due to state regulations.
Question 4: As I can see that there are 06 stores and 01 Head Office under KIM HOAN SAIGON Company, how do they work and coordinateamong each other?
Sales staff serve as the primary point of contact for customers, gaining insights into their preferences and gathering valuable feedback on products They report daily sales figures to the store manager, while marketing and senior staff operate from the head office Although there are six stores, senior staff focus on their responsibilities at the head office, which includes tasks like evaluating new product offerings.
The company offers 42 product styles globally, allowing staff to propose purchasing products or campaigns to the Board of Directors To facilitate communication, senior management established a daily information exchange group among six stores, where sales staff and store heads collaborate This system ensures that customer orders and sales requests are efficiently processed and documented.
Question 5: What are the demands of the customers ? Can the sales staffs generalize?
Sales staff can only attend to each guest individually and lack the time and capacity to gather comprehensive feedback for predictions Conversely, product trend forecasting is the responsibility of the marketing team, who must regularly update the website and collaborate with designers to identify current fashion trends and popular colors They then source materials such as stone samples, gold bullion, cotton, and various jewelry items to create products that align with these trends.
Question 6: What are the pros and cons of your company in gold industry?
Answer: The advantage is that SJC brand granted a gold bar, a long-standing and prestigious brand by the government for Vietnamese people
While the 9999 gold bullion brand offers a premium product, it limits shoppers' awareness of other product lines and requires them to maintain minimum gold reserves in accordance with national safety regulations.
Question 7: Do you think that we should focus more on gold jewelry segment ?
Yes, investing in the gold jewelry segment is essential; however, budget constraints limit our ability to develop this area SJC is primarily recognized for its gold bullion, and our main responsibility is to maintain national gold storage at a safe level, which leads the Board of Directors to focus their spending on gold bullion Consequently, both financial resources and customer attention are predominantly directed toward gold bullion, leaving the gold jewelry segment underdeveloped Despite my efforts to propose a budget for hiring marketing personnel or outsourcing marketing for the gold jewelry segment, these suggestions have not been successful.
In-depth Interview 3 script
Location: KIM HOAN SAIGONHead Office, 92-94 LưuVăn Lang Street, BếnThành Ward, District 1, HồChí Minh city
Interviewee: The Manager of Marketing and Sales Department of KIM HOAN SAIGON
Topic: Discuss about Potential Solutions
Question 1: Has the company had any specific plan to develop the gold jewelry line of gold jewelry yet?
The gold jewelry market presents significant opportunities for gold bullion trading companies, particularly in Vietnam and other Asian countries where gold holds cultural significance, especially among women Families, regardless of their financial status, strive to acquire gold jewelry, leading to a consistent annual demand increase The market for gold bullion jewelry has experienced a compound annual growth rate exceeding 10%, highlighting its growing popularity and investment potential.
The company's current business strategy focuses primarily on gold bullion trading, while the gold jewelry retail market is dominated by small units selling heirloom gold SJC aims to expand its presence through large, dedicated stores that offer reliable products, clear pricing, and effective after-sales support With the high profitability of gold jewelry and a strong foundation, the company is well-positioned to gradually align with customer preferences The existing store network meets customer needs, and regular training will enhance sales skills Although Vietnam has around ten thousand traditional gold bullion shops, the share of branded companies is expected to rise steadily.
Question 2: Which departments are responsible for developing the jewelry product line? How do they do that? Is there aoverlap or an overload of work?
The Sales and Marketing department is responsible for monitoring global jewelry trends and presenting popular jewelry samples to the board of directors Based on these proposals, the board decides which models to import and the quantity Additionally, the primary focus of the Sales and Marketing department lies in advertising, brand image development, and sales strategies.
It is essential to establish a dedicated department for jewelry products to effectively research market trends and customer preferences This specialized team can enhance product development and ensure alignment with consumer tastes Additionally, a separate design department should collaborate with skilled artisans to create unique models that reflect the company's brand identity, thereby increasing competitiveness in the jewelry market.
Question 3: Have we applied any methods to increase sales of jewelry products?
Answer: The company has strengthened the development of this product line by updating new jewelry trends in the world, importing trendy product models
However, due to the lack of attention to advertising, the limited access to customers, very few people know about SJC jewelry products
Therefore, he has not been able to propose a budget for importing a variety of models as well as a budget for marketing
Question 4: Have we tried any methods to change the structure from gold bars to jewelry and is it effective?
The company is in the process of decreasing its gold bar inventory to boost investment in its jewelry line; however, this strategy has not proven effective, as the jewelry business's performance has not met management's expectations.
Question 5: Do you think that SJC is lacking of a specific position to take responsibility for developing Gold jewelry products ?
To develop our jewelry sector effectively, it is essential to have skilled designers and technicians who can adapt to new global trends We are striving to improve collaboration between the Technical Department and the Marketing and Sales Department to achieve this objective; however, our efforts have not been successful thus far.
Question 6: Have you ever think of setting up R&D Department ?
While requesting a new department may be excessive, establishing a project-based R&D team or utilizing an outsourced R&D lab could be viable alternatives.
Thank you very much MrsHuong for your information !
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