MARKETING CHANNELS topic DESIGN MARKETING CHANNELS FOR NEW PRODUCTS, THE CASE IN NGUYEN VAN XE’S POTTERY PRODUCTION BASE

THE UNIVERSITY OF DANANG
UNIVERSITY OF ECONOMICS

MARKETING CHANNELS
Topic
DESIGN MARKETING CHANNELS FOR NEW
PRODUCTS, THE CASE IN NGUYEN VAN XE’S
POTTERY PRODUCTION BASE

Class : 41K12.3 - CLC
Lecturer: Ph.D Ngo Thi Khue Thu
Msc Nguyen Phuong Thao

Danang, April 2018
GROUP MEMBERS

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Nguyen Thi Hang (Leader)

Nguyen Ngoc Quynh Anh
Nguyen Thi My My
Le Thi Diem Mi
Tran Thi Duyen

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CONTENTS
1.

INTRODUCTION.....................................................................................................................

2. GENERAL INFORMATION ABOUT THE SALE POINT................................................
2.1.

Producer................................................................................

2.2.

Business situation...................................................................

2.3.

The relationship between the production base and interm

2.4.

Series of products selected....................................................

2.4.1. Features, opportunities for decorative ceramic products....................................
3.

4.

LITERATURE REVIEW......................................................................................................
3.1.

In-depth interview................................................................

3.2.

Designing the channel............................................................

FIELD OBSERVATION REPORT.......................................................................................
4.1.

5.

POEMS framework..............................................................

INTERVIEW PROCESS REPORT......................................................................................
5.1.

Select a product line...............................................................

5.2.

A set of interview questions...................................................

5.2.1.

Selection of

5.2.2.

Question lis

5.2.3.

Form of int

5.2.4. Time and place of interview.................................................................................
6.

RESULTS AND DATA ANALYSIS.....................................................................................
6.1.

Answer sheet for the owner and manager:........................

6.2.

Answer sheet for the end-users and retailers:....................

6.3.

Data Analysis.........................................................................

6.3.1. The most important Insights................................................................................
6.3.2. Analysis data for end – users and retailers.........................................................

Source........

6.3.3.
6.3.4. The level of customer satisfaction........................................................................
6.3.5. Suggestions for decorative ceramics....................................................................
7.

SOLUTIONS.........................................................................................................................
7.1.

Online channel.....................................................................

Website......

7.1.1.

Facebook fa

7.1.2.
7.2.

Offline channel....................................................................

7.2.1.

Showroom.

7.2.2.

Hotels and
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1.

INTRODUCTION

In today market economy, many companies and production bases in our
country have a tendency to offer their products through some intermediaries. This
would reduce the costs, create the highest efficiency in the channel, thereby deliver
products to the target market in time and meet customer needs.
In fact, promotion activities like advertising and discount are only beneficial
in the very short run. Other businesses can rapidly imitate these kinds of strategies
of the companies, so companies that follow these strategies will quickly lose their
competitive advantages. As a result, businesses today are focusing more on
developing a better distribution system in order to gain sustainable development. A
complete distribution system with rational distribution policies will help the
business succeed.
Pottery villages are traditional trade villages in many areas of Vietnam.
Thanh Ha pottery village has been existing in Hoi An for 500 years. It is not wellknown place until Hoi An has become an attractive destination of many foreign
tourists. Nevertheless, the village is still not popular in the eyes of local people. At
present, pottery villages are only distributed in Hue, Danang, Quang Nam and very
few other provinces.
Thanks to the complete distribution system, the company has acquired a
reputation for its products. However, through our observation, the process of the
distributing products has not yet reached maximum efficiency. Therefore, we want
to make Thanh Ha pottery village become traditional craft village like Bat Trang,
Dong Trieu.
With regard to the aim of preserving and develop traditional craft villages,
our group choose a pottery production base in Thanh Ha pottery village as our sale
point for our project. This is the production base of Mr. Nguyen Van Xe.
2.

GENERAL INFORMATION ABOUT THE SALE POINT

2.1. Producer
Nguyen Van Xe base is a pottery production of Thanh Ha pottery village.
-

Address: Thanh Ha pottery village, Hoi An, Vietnam.

Thanh Ha is known as a famous pottery village in Hoi An. In recent years,
Thanh Ha is a place that many visitors cannot ignore when visiting to Hoi An. This
is a favorable opportunity for establishing the business in this area.

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2.2. Business situation
Through observing the sales point and conducting the interview with Mr.
Nguyen Van Xe, the owner of the production base, our conclusions are:
-

The traditional business items of Nguyen Van Xe factory are household pottery

-

The current distribution system of the facility is

Producer

12 Wholesalers

Retailers

Consumers

Nguyen Van Xe production base only distributes through traditional channels
with 12 wholesalers. In addition, the base also produces decorative products which
are ordered from restaurants and hotels. However, the number of decorative
potteries sales is still so small.
Although there is a large number of tourists visiting the village, the facilities
are not yet utilized. Since the base mainly sells products with large size and
personal belongings, customers cannot buy them because it is difficult to bring them
home. Besides, the establishment has produced some products for tourism like toys
but does not gain a new breakthrough in revenue. In addition, other ceramic
manufacturing become the competitors of the base as they try to attract visitors with
a practical experience by making their own products for tourists.
During the interview, Mr. Son, Nguyen Van Xe’s son reveals that he intends to
develop decorative ceramics instead of just producing household ceramics. He also
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wants to introduce the private brand of the home base as the family brand because
most customers only know the general brand named Thanh Ha pottery village but
does not know the private brand of a production base Nguyen Van Xe in Thanh Ha.
However, he does not know where and how to start.
2.3. The relationship between the production base and intermediaries
All 12 wholesalers live in Hoi An, close to Nguyen Van Xe ceramic factory
so it is very easy for picking up products. The relationship between the
manufacturer and 12 wholesalers is very good. However, 12 intermediaries tend to

give money back to Nguyen Van Xe’s base only after selling the products, making
the production base stagnant in the revolving capital.
2.4. Series of products selected
After the observation and interviews, we realize that household ceramics
have a good development while decorative ceramics initially encountered many
problems. Hence, setting up distribution channels for decorative ceramics is an
urgent task that needs to be addressed.
2.4.1. Features, opportunities for decorative ceramic products
Nowadays, people would love to engage closely with the nature and ancient
living spaces. Ceramics are among the favorite items mostly used to decorate in the
restaurant, folk cuisines as well as hotels. Some households also enjoy using these
small decorative items for desks and indoor spaces. Besides, ceramic decoration is
small size, easy to transport, aesthetic and high level of sophistication.
3.

LITERATURE REVIEW

3.1. In-depth interview
After observing the sale point, in order to design an effective distribution channel for
new products, we choose the in-depth interviewing to deeply understand customer insights.
By conducting a small number of interviews intensively, researcher can explore different
perspectives from respondents on a particular idea, program, or situation. (Carolyn Boyce
and Palena Neale, 2006). These interviews are often used to provide a complete and profound
picture of what happened in the channel and will happen with new products delivery.
Potential participants of the interview include the owner of business, managers, retailers and
end-users. The manufacturer can utilize the information from the study to apply for the
business.

3.2. Designing the channel
Generally, a channel can be designed based on 7 steps: recognizing the need for a

channel design decision, setting and coordinating distribution objectives, specifying
distribution tasks, developing possible alternative channel structures, evaluating the variables
affecting channel structure, choosing the “best” channel structure and selecting the channel
members (Bert Rosenbloom, 2012). In this case, the owner
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wants to develop a new product. The existing channel already has significant elements for
this kind of product, the owner only need to modify it to fit with new products.

4.

FIELD OBSERVATION REPORT

Mr. Nguyen Van Xe’s pottery production base is located in Thanh Ha pottery
village, Hoi An, Quang Nam province. Main products of the base are household
potteries. From 10 days to 15 days, 12 wholesalers will go to the production base,
pick up the potteries, carry them around, and sell them to retailers in Hue, Da Nang
and Quang Nam.
In addition to household potteries, the production base also makes decorative
potteries which are ordered from restaurants, hotels, homestays and other decorative
potteries. These entities than sell these items to tourists visiting the village.

4.1. POEMS framework
People
Employees: There are 5 employees working at the production base and living
near the production base. They all have worked there for a long time (from 5-10
years).

Wholesalers: The production base makes oral contract with 12 wholesalers. Every 15
or 20 days, 12 wholesalers go to the production base to pick up the potteries and bring them
around than selling to retailers in Hue, Da Nang and Quang Nam. These wholesalers have
strong business relationship with the production base.

Consumers of the sale point mostly are tourists visiting the village, but the
sales for them are not many. Sometimes, restaurants and hotels managers come here
to order potteries for decorating or for food serving dishes.
Objects
Household potteries: are mainly traditional products of Nguyen Van Xe’s
production base. They account for 80% revenue of the production base. This kind of
product has a full channel system so it is impossible to change the whole system.
Decorative potteries are potential products that are developed by Mr. Xe’s
son. At this time, Mr. Nguyen Van Xe’s son are considering building a new channel
system for this kind of product. Therefore, our group decided to help Mr. Nguyen
Van Xe to design the channel.
Pottery is made by forming a ceramic (often clay) body into objects of a
required shape and heating them to high temperatures in a kiln which removes all
the water from the clay.

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Environment: The production base is located in Thanh Ha pottery village,
near the river. Up to now, wholesalers and consumers go directly to the production
to buy the potteries. The owner does not have to do any intermediate activities.
Messages and media: Not any production bases in the village has their own
brand which many people know about that. Only Thanh Ha pottery village has its

name on Google map and research engines. Tourists just wander around the village
and come to any the production bases.
Service: Whenever tourists go by, Mr. Nguyen Van Xe and his son will
perform pottery making process by hands and by the wheel potter. Then, tourists try
to make potteries by themselves.
PEOPLE
Employees
Consumers
Wholesalers

SERVICE
Performance

ENVIRONMENT

POEM

Pottery village
Production base

MESSAGES AND MEDIA
No message and no media
Only the board
Known from the ancient town
5.

INTERVIEW PROCESS REPORT

5.1. Select a product line
Product line: Ceramic decoration

Today, people tend to love the close to nature or return to the old living space.
Ceramics are the favorite decorative items today in the restaurant, folk cuisine as
well as the hotel.
Small decorative items for desks, indoor space are all family favorite. Ceramic
decoration is small size, easy to transport, aesthetic, high level sophistication.

5.2. A set of interview questions
5.2.1. Selection of respondents
Sources of selection: Businesses or individuals who trade in or use
pottery decorations.
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Selection criteria: The respondents are currently trading or using
pottery decorations.
Method of selection: selection of respondents. Particularly, they are:
o
Mr. Nguyen
Van Xe – production
base owner

o
Mr. Nguyen Van
Son - Mr. Nguyen Van Xe’s
son, manager as well as the
heir of the production base
o
Mr. Nguyen

Van Hung - employee
o Mrs. Lan - wholesaler
o Mrs. Sang - retailer

o
Shop Xương Rồng
– GMT Garden (621 Nui
Thanh Street)
o
Mộc Garden (Duong
Tu Minh Street)
o
Shop souvenirs Ms.
Hien (Hoi An ancient )
o
Room Casa
Hostel (An Thuong 4
Street)
o
Nguyen My My
(Individuals - Quang Nam
Province)

5.2.2. Question list
5.2.2.1 Apply for the owner and manager
Question 1: Do you have any difficulties in finding intermediates?
Question 2: Do you have to deal with inventory?
Question 3: Do intermediates pick up stock at the specific time or at the
random time?
Question 4: Do you want to extend market size and find more intermediates?

Question 5: What do you thing about the online channel?
Question 6: Do you offer delivery service (how and how far?)
Question 7: If we help you to set up the online channel, who can be the
manager?
5.2.2.2 Apply for end-users and Retailers
Question 1: Hi, are you doing the business, distributing, trading or using
decorative pottery products or products related to decorative ceramics such
as stone lotus, cactus etc? Is it good or difficult? If you are having difficulty,
what problems do you have? (For example: products, freight, design, etc). If
you are a user, how do you buy these decorative items?
Question 2: Do you know the place of production or distribution of
decorative ceramics that you are buying through the sources? Can you tell us
the reasons why you choose them?
Question 3: Have you ever had a problem of storage or inventory of
decorative ceramics? And if so, how did you handle it?
Question 4: Do you have any comments on decorative ceramic products?
(design, style, size, etc)
Question 5: What kind of purchases that you find more convenient (online or
offline)?
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Question 6: If there is a factory producing decorative pottery with original
price and diversified designs, are you willing to buy?
5.2.3. Form of interview
Discussing face to face with respondents about the decorative pottery.
Using a cell phone to record the interview and use the notebook to record it.

5.2.4. Time and place of interview
Interview time: 45-60 minutes for each interview on 10/04/2017 and
11/04/2017.
Location: Da Nang city and Quang Nam province.

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Khơng có nhiều hàng
tồn kho cho lắm.

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6.
RESULTS AND DATA
ANALYSIS
6.1. Answer sheet for the owner and manager:
Đáp viên

Mr. Nguyen Van
Hung - employee

Câu hỏi
Trả lời tương tự như
Khơng

khó tìm. Hồi
chú Xê.
xưa thì khó
chứ chừ
có bạn hàng
rồi, lấy
quen rồi.

Khơng có tồn
kho nhiều.
Khi nào họ

2

thi
ếu thì họ nói
mình tiếng
mình
làm
thêm cho họ.

Khơng có trung
gian con. Cơ là
bán cho khách
lẻ, là phụ nữ sau
sinh hay lâu lâu
có nhà hàng tới
đặt…

Bên cơ thì hết

hàng

Trả lời tương tự như
Cũng có
hàng tồn
chú Xê.
kho mà khơng
nhiều. Cũng
tùy mùa mà
bên lẻ mua
nhiều hay ít.

3
Cứ đầu tháng thì họ Thì
đầu tháng họ đến đến lấy hàng thơi,
Trả lời tương tự như
Mình là
chứ lấy hàng thơi em. mình khơng có
bán sỉ cho
chở Thiếu thì báo mình hàng ra cho
chú Xê.
họ mà. Mình
bán bn. mình làm thêm.
phải
Với tùy theo thời tiết
chở hàng qua
cho họ

chứ.

mới lấy tiếp
nên
hầu như khơng
có
dư. Khoảng
tầm

hơn 1 tháng
lấy

một lần.
Không


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mà sản xuất nhiều hay
ít.
4
Thật ra cũng muốn Ờ, thật ra anh thấy đồ Trả lời tương tự như Thôi cô thấy chừng Cô bán khách
lẻ
nhưng già rồi, không
làm được nhiều nữa.
Với có tới 12 nhà
bn ln rồi. Lâu lâu
khách sạn, nhà hàng
cũng tới đặt thì mình
làm theo yêu cầu họ
thôi.

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Cũng được đó mà chú
già
chắc để thằng con chú
làm.

rồi khơng

5

6

Chủ
bn bán ở Đà Nẵng,
Huế, Quảng Nam thì
nhiều. Cịn lâu lâu có
khách ở xa đặt thì họ
đặt xe khách, xe dừng
trên Vĩnh Điện, mình
chở hàng lên cho xe
khách chở đến khách
hàng thơi.
Chắc có con chú.

yếu bên

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website cho anh cũng

được.
6.2. Answer sheet for the end-users and retailers:
Đáp viên
Shop Xương rồng
Shop sen đá Mộc

Shop lưu niệm chị

Khách sạn Room

Hiền tại Hội An

Casa

Nguyễn

My My

Câu hỏi

bên Núi Thành

Garden

(Khách

lẻ)
1
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- Bn bán cũng bình
thường.
chậu cây leo bán khá
chạy.

Câu 1

Câu 2

- Khơng rõ vì chủ là
người đặt hàng. Chỉ
biết là chủ đặt hàng
qua một shop đồ gốm
online.
nhập hàng một lần, từ
20 – 30 chậu nhỏ các
kiểu.
- Giá khá ổn, mình
yêu cầu thiết kế cũng
được nhưng
lâu.

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Câu 3

Câu 4

Đơi khi cũng có tồn
kho
đáng kể, chắc có mùa
mưa là bán ít chạy
thơi. Với
gốm này
để
xương
nhìn vậy chứ cũng ít
tồn
cũng bán lẻ chậu gốm
nhỏ nữa.

Cần đa dạng mẫu mã
hơn,
quảnh
mấy
trí
Nhìn lâu cũng chán.

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rồng…
kho. Shop

chậu

Câu 5

Mua online cũng tiện.
Tại chủ cũng bận, đây
là công việc phụ nên
chỉ
đúng
đúng
Cũng khơng cần phải
đến trực tiếp làm gì.

cần

giao
chất
hẹn

là

Câu 6

Cũng mua. Mà chắc
ban đầu thì mua tầm
30 chục trở lại thơi.
Để coi mẫu mã có đa
dạng
chất lượng ok thì sẽ
mua

hơn
tiếp. Bên

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cũng
dòng
tương
cần nhiều.

đang
sen
lai

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6.3. Data Analysis
6.1.1. The most important Insights
During the interview, Mr. Son, Nguyen Van Xe’s son revealed that he intends to develop
decorative ceramics instead of just producing household ceramics. According to him, decorative
ceramics are easy to sell, transport and look more eye-catching than household pottery. He looks
for finding and designing new models products, more unique than its available on the market
today. He also wants to introduce the private brand of the home base as the family brand because
most customers only know the general brand named Thanh Ha pottery village but do not know
the private brand of a production base Nguyen Van Xe in Thanh Ha. However, he does not know
where and how to start.

Moreover, the relationship between the manufacturer and 12 wholesalers is very good.
Mr. Xe does not intend to seek new intermediaries because there are not enough
products to supply for them. That is why we choose the decorative ceramics instead of
household ceramics.
6.1.2. Analysis data for end – users and retailers
6.1.2.1 Business situation from customer perspectives (related to
decorative ceramics)
The business operations are stable.
Due to the specialty of the ornamental plant, there are not too many
inventories related to pottery.
6.1.3. Source
2/5 customers order products from online decorative pottery channel.
2/5 customers are buying through a merchant.
1/5 customers come directly to the manufacturer to buy.
Online Channel is the channel chosen by customers because of the convenience
and time savings. This is considered as a potential market.
6.1.4. The level of customer satisfaction
Most of the customers have no complaints about where to sell their
decorative ceramics.
Delivery products at right places, quality products, suitable prices.
6.1.5. Suggestions for decorative ceramics
5/5 customers are looking for more designs, new designs.

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2/5 customers would like to have facilities to produce decorative

ceramics nearby for convenient ordering.
Coincidentally, he also want to design and create more new models to make a
difference in the market.

7.

SOLUTIONS

With regards to these issues, we design the marketing channel in both online and
offline channel for decorative potteries.

Website
online
Facebook
fanpage
Manufacture
showroom
Offline
hotels and
restaurants

6.4. Online channel
7.1.1. Website
With the development of information technology, people tend to find the information
on the Internet. According to Google's 2015 Customer Barometer survey, more than
70% of users in Vietnam have a habit of using the search engine to find out information
about a product or service before making a purchase decision. This is point what we
need to be concerned.
Therefore, the website would be a good channel for customers who live far away from
the store and for those who want to upload information about the production base and

the products.
Website manager : According to Mr. Son said: “he can manage the Website and Fanpage”
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Website and Fanpage designer : According to Mr. Son said: “Brother’s Hung who
majored in information technology. He can design Website and Fanpage but he is busy
so he did not help Mr. Son design Website and Fanpage at this time.”

7.1.2. Facebook fanpage
According to The Next Web, Vietnam is one of ten countries having the most
Facebook users. In details, Vietnam ranks 7th 64 million facebook users, account for 3
% of total users on over the world.

That say, Facebook is a potential market that no business platforms or production bases
could catch up. Besides, 2/5 end-users interviewed choose online channel as their main
channel to buy this kind of product, meaning Facebook is perceived as an important
channel in this situation.
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In addition to finding individual customers, Facebook does a very good job at reaching
restaurants and hotels which have demand for decorative potteries.

6.5. Offline channel
7.1.3. Showroom

This can be explained by the fact that in 2017, Hoi An attracts 3,22 million tourists,
which goes up 21,66% compared with 2016. Since Thanh Ha pottery village is a
hot spot in Hoi An, opening the showroom would help the base to showcase their
unique products, promote their private brand as well as earn a large amount of
revenue from serving the large number of tourists.
Showroom location: At Thanh Ha pottery village at the production base.
Targeted customer: Tourists in Hoi An
Ways to attract customers: Work with a travel company to get customers
into the showroom
Mr. Son will be building a showroom in May 2018.

7.1.4. Hotels and restaurants
The number of tourists in Da Nang and Hoi An increased rapidly, the hotel
restaurant where visitors always visit. Therefore, the goods are displayed in the
restaurant, the hotel helps promote and sell products.
Display location: At hotels and restaurants in Da Nang, Hoi An. Hotels and
restaurants usually have souvenir shelves to sell local goods. The production base

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