(Luận văn) ineffective managerial support in electrolux vietnam ac

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
--------------------------------

t
to
ng
hi
ep
do
w
n
lo
ad
ju

y
th
yi

Truong Hieu Lam

pl
n

ua

al
n

va

fu

ll

INEFFECTIVE MANAGERIAL SUPPORT IN
ELECTROLUX VIETNAM AC
oi

m

at

nh

z
z
k

jm

ht

vb
MASTER OF BUSINESS ADMINISTRATION

om

l.c
ai

gm

SUPERVISOR: DR. NGUYEN PHONG NGUYEN

an
Lu

Ho Chi Minh City – Year 2019

n

va

ey

t
re
1


t
to

Table of Contents
Executive summary......................................................................................................................... 5

Problem mess ........................................................................................................................... 8

hi

Company background .............................................................................................................. 6

ep

ng

1.
2.

do
2.1.

Symptoms ......................................................................................................................... 8

w

First symptom: Low sales ......................................................................................... 8

n

2.1.1.

lo

Initial cause-effect map .................................................................................................. 12

2.3.

Updated cause-effect map .............................................................................................. 18

ju

y
th

2.2.

yi

Ineffective managerial support ............................................................................... 18

2.3.2.

Work-life imbalance ............................................................................................... 19

2.3.3.

Insufficient training ................................................................................................. 20

2.3.4.

Ineffective segmentation ......................................................................................... 21

pl

2.3.1.

n

ua

al

n

va

Potential problems .......................................................................................................... 23

ll

fu

2.4.

2.4.1.

Ineffective segmentation ......................................................................................... 23

2.4.2.

Ineffective managerial support ............................................................................... 24

2.4.3.

Main problem validation ......................................................................................... 25

oi

m

at

nh

Problem justification.............................................................................................................. 26

z

3.

Second symptom: Low customer satisfaction........................................................... 9

ad

2.1.2.

z
Problem definition .......................................................................................................... 26

3.2.

Problem existence .......................................................................................................... 27

jm

Quantitative research findings ................................................................................ 27

3.2.2.

Qualitative research findings .................................................................................. 29

k

ai
gm

Problem importance ....................................................................................................... 32

om

l.c

Cause validation .................................................................................................................... 35
4.1.

Literature review ............................................................................................................ 35

4.2.

Qualitative research findings .......................................................................................... 36

n

a
Lu

The set of solutions ................................................................................................................ 41

Developing the performance management system......................................................... 42

5.3.

Solution selection ........................................................................................................... 43

5.4.

Change plan design ........................................................................................................ 45
2

th

5.2.

y

Training sales manager and supervisor .......................................................................... 41

te
re

5.1.

n

va

5.

ht

3.2.1.

3.3.
4.

vb

3.1.


t
to
ng

5.4.1.

Objectives ............................................................................................................... 45

5.4.2.

Action plan .............................................................................................................. 45

hi
ep
do

Development of an appraisal form .................................................................. 45

5.4.2.2.

Guideline for effective performance feedback ................................................ 49

5.4.2.3.

Disciplinary procedure for poor performance management ............................ 49

w

5.4.2.1.

n

lo

Conclusion .................................................................................................................................... 55

ad

Supporting information ................................................................................................................. 56

y
th

References ................................................................................................................................... 111

ju

yi

Appendix ..................................................................................................................................... 115

pl
n

ua

al
n

va
ll

fu
oi

m
at

nh
z
z
k

jm

ht

vb
om

l.c

ai
gm
n

a
Lu
n

va
y

te
re

th

3


t
to
ng
hi

ep

List of Figures

Figure 1: Initial cause-effect map ................................................................................................. 17
Figure 2: Updated cause-effect map ............................................................................................. 22
Figure 3: Managerial support at sales department ........................................................................ 28
Figure 4: Managerial support at sales department ........................................................................ 28
Figure 5: Employee satisfaction of salespeople at Electrolux Vietnam AC 2014-2018............... 33
Figure 6: Final cause-effect map................................................................................................... 40
List of Tables

do

w

n

lo

ad

ju

y
th

Table 1: Sales growth of Electrolux Vietnam AC, Daikin, Toshiba and Vietnam AC market from
2016 to 2018 ................................................................................................................................... 8
Table 2: Results of the survey collected from Electrolux Vietnam AC, Daikin and Toshiba ...... 11
Table 3: Measurements of managerial support ............................................................................. 27
Table 4: Cost estimation for solution to training sales manager and supervisor .......................... 42
Table 5: Cost estimation for solution to updating the performance management system ............ 43
Table 6: Organization of actions in implementation of effective performance management

system ........................................................................................................................................... 51

yi

pl

n

ua

al

n

va

ll

fu
oi

m
at

nh
z
z
k

jm

ht

vb
om

l.c

ai
gm
n

a
Lu
n

va
y

te
re

th

4


t
to

Executive summary

ng

Customer dissatisfaction undoubtedly imposes a challenge for the organization to

hi

maintain consumers’ loyalty and retention

62

. Dissatisfied consumers discontinue purchasing the

ep

product or service as well as have a high potential to engage in negative word-of-mouth

do

62

w

communication about the organization’s product or service

. The fact that keeping customers

n

lo

satisfied with their product or service does have a positive influence on an organization’s

ad

profitability is non-negotiable

63

. Hence, customer defection or discontinuance of purchase from

y
th

consumers causes Electrolux Vietnam AC to suffer remarkable loss of sales. To investigate the

ju

worrisome situation, potential problems which are identified through interviews and subsequently

yi

pl

confirmed with theories involve ineffective managerial support and ineffective segmentation. By

al

ua

evaluating and verifying each potential problem, a discussion to focus on ineffective managerial

n

support is determined as the central one. Electrolux Vietnam AC is confronting the ineffective

va

n

managerial support that makes their employees feel dissatisfied with the job and consequently,

ll

fu

has low commitment and intention to leave the company in the future. Their low productivity

oi

m

causes the organization to experience low performance as well. After further rounds of interviews

nh

and the support of literature, the validated and most important cause of ineffective performance

at

evaluation is chosen to build the set of solutions. The possible solutions for improvement of

z

z

performance evaluation are training sales manager and supervisor on evaluating and giving

ht

vb

performance feedbacks to their subordinates effectively or developing the performance

jm

management system. Basing on the cost-benefit analysis, the development of the performance

k

management system is feasible to efficiently solve the ineffective managerial support. The

ai
gm

solution is beneficial from available resources that are gained from the cooperation between HR

om

l.c

department and sales department, which costs around VND 11,500,000 and takes approximate
two months without a break in order for salespeople to keep up with the schedule to promote

a
Lu

their work efficiency. By taking an action, this cost-efficient solution can terminate the current

n

problem of Electrolux Vietnam AC. Not only customer satisfaction but also employee

n

va

satisfaction is expected to enhanced in order to improve the organizational performance.

y

te
re

th
5


t

to

1.

Company background

ng

Electrolux Group which headquarters in Stockholm, Sweden is a world-leading provider

hi
ep

of diverse consumer appliances and electronics with more than 100 years of history. The

do

organization has 54,400 employees in Europe, North America, Latin America, Asia, Africa and

w

Oceania. It is in the company’s DNA to continuously strive to further improve efficiency and

n

lo

quality across the organization, from production to administration. The mission of Electrolux is

ad

to provide outstanding products in order to enrich people’s enjoyable and sustainable life.

y
th

ju

As a member of Electrolux Group, Electrolux Vietnam which was established in 1999

yi

specializes in distributing thoughtfully designed and innovative products for households and

pl

businesses. Electrolux Vietnam has a head office in Ho Chi Minh City and representative offices

al

n

ua

in Hanoi and Danang. According to the company’s HR report in February 2019, there are 6

va

departments with a total of 130 employees. There are departments of human resources and

n

general administration (11 headcounts), finance and accounting (23 headcounts), corporate

fu

ll

marketing (8 headcounts), customer service (5 headcounts) and consumer electronics (83

m

oi

headcounts) that conjointly support the company’s operation. The consumer electronics

at

nh

department has three sub functions which are air conditioning (31 headcounts), kitchen
appliances (23 headcounts) and home appliances (29 headcounts). Air conditioning, abbreviated

z
z

as AC, comprises air conditioners whilst kitchen appliances include cookers, ovens, kettles and

vb

cleaners.

k

jm

ht

food processors, and home appliances consist of refrigerators, washing machines, and vacuum

ai
gm

In the AC division, each department has their own departments to go along with to
support their activities for related products. Specifically, there are 4 departments which belong to

l.c

AC division. The head of AC administers not only sales management but also product

om

management, customer service and administration. Product management is in charge of

a
Lu

monitoring pricing, inventory, orders and marketing activities. Customer service is accountable

n

va

for handling consumers’ inquiry in terms of installation, maintenance and reparation.

n

Administration supports administrative tasks. In total, there are 3 managers and 28 employees.

y

te
re

Every department in AC collaborates with each other towards a shared vision with the goal of
In today’s ever changing business environment, Electrolux is proud of being one of the
leaders in the air conditioning industry that foresees the future and continuously innovates to
6

th

achieving excellent business outcomes and outstanding customer experience.


t
to

develop future-proof air-conditioning solutions. The product line of air conditioning contains

ng

residential air conditioner and system air conditioner. The compatible models can be single-split,

hi

multi-split, single-split packaged, multi-split packaged air conditioners and VRF system. For the

ep

residential air conditioners, air conditioners are used when an outdoor unit connects to an indoor

do

w

unit, which are best suited to houses with a number of floors and rooms with little space for an

n

lo

outdoor unit. For the system air conditioner, they are ideal for installation in larger areas such as

ad

larger-scale residential houses, commercial buildings, condominiums, etc. A single or multiple

y
th

outdoor units serving various indoor units and allows for a mixture of system types. Driven by a

ju

yi

never-ending quest for product innovation, their goal is to deliver products with superior quality

pl

and reliability and provide experience of true comfort for businesses and homes. The proportion

al

ua

of sales for product type is shown that residential air conditioner constitutes 65 percent of total

n

sales which is higher than that of system air conditioner accounting for 35 percent.

va

n

Electrolux Vietnam AC division’s competitors are Daikin, Panasonic, LG and others.

ll

fu

They target B2B customers that a distribution network is applied through modern trade and

oi

m

traditional trade to attract customers and sell their products. Regarding modern trade, ecommerce

nh

such as Tiki, Lazada, etc. and supermarkets such as Dien may Xanh, Nguyen Kim, Cho Lon, Tu

at

Do, etc. Concerning traditional trade, retailers are Truc Mai, Thien Nam Hoa, etc. The proportion

z

z

of sales for consumer type is shown that modern trade constitutes 40 percent in which 15 percent

vb

for ecommerce and 25 percent for supermarkets which is lower than that of traditional trade

jm

ht

accounting for 60 percent.

k

Sales department has a total of 15 members including a sales manager, a sales supervisor,

ai
gm

11 sales representatives and a sales administrator. The role of a sales admin is to assist sales force

om

l.c

with daily sales administration activities. Sales reps are in charge of developing customer
intimacy and establishing new sales opportunities. Sales supervisor is responsible for ensuring

a
Lu

customer satisfaction, increasing sales for the company, consistently monitors the sales activity of

n

the team and tracks the results. Sales manager participates in strategic and tactic planning and

va

n

managing for the department. Because of increasing competition between air conditioning

y

plays an important role in generating revenue for the company.

te
re

manufacturers, it is crucial for Electrolux to foster a motivated and committed sales force which

th
7


t
to
ng

2.

Problem mess

2.1.

Symptoms

hi

ep

To indicate something abnormal in the current business operation of Electrolux Vietnam AC, the

do

source of internal data was examined such as reports of HR department, customer report which

w

n

was published by management team so that employees are aware of their performance level.

lo

ad

These internal data was found to be advantageous due to its ease to approach and availability,

y
th

together with cost efficiency and useful time series data. Moreover, depth interviews with sales

ju

manager and sales supervisor were carried out in order to have a better understanding about what

yi

the division is struggling with and any necessary improvements.

pl
ua

al

2.1.1. First symptom: Low sales

n

According to the company’s internal data, Electrolux Vietnam AC experienced an

va

n

increase in sales over the last three years. Nevertheless, sales growth rates declined markedly,

fu

ll

falling from the high 17 percent to the low 11 percent in 2017 and 9 percent in 2018, even as the

m

oi

company added approximately USD 3.5 million of additional revenues in each of the past three

at

nh

years. As declared by head of AC in the company’s annual meeting, Daikin has continued sales
growth exceeding 25 percent from 2015 to 2018. Another Japanese-based air conditioning

z

z

provider, Toshiba has achieved over 18 percent of sales growth in the same period. What is more,

vb

it is reported by Nikkei Asian Review that sales of Vietnam AC market is forecasted to grow

ht

jm

over 14.5 percent from 2015 to 2021. In general, Electrolux Vietnam AC suffered progressive

k

slowdown in sales growth. From 2015 to 2018, its sales also experienced a slower growth rate

ai

gm

than that of their biggest rivals, Daikin and Toshiba and local AC market.

l.c

om

Table 1: Sales growth of Electrolux Vietnam AC, Daikin, Toshiba and Vietnam AC
market from 2016 to 2018

a
Lu

2015

2016

24.5

27

31.6

35.3

n

2014

Unit: million USD
2017
2018

te
re

9.1%

y

th

17.0%
11.7%
25.0%
18.0%
14.5%

38.5

n

10.2%

va

Year
Sales revenue – Electrolux Vietnam
AC

Sales growth – Electrolux Vietnam AC
Sales growth – Daikin
Sales growth – Toshiba
Sales growth – Vietnam AC market

Source: Nikkei Asian Review43, internal meeting
8


t
to

2.1.2. Second symptom: Low customer satisfaction

ng

Customer satisfaction is defined as a consumer’s response to the assessment of their

hi
ep

consciousness of inconsistency between preceding expectations and actual exhibition of the

do

product or service as discerned in the time following its consumption 1. The measure of

w

satisfaction can be economic satisfaction in terms of financial returns derived from the sales of

n

lo

the supplier’s products or non-economic satisfaction in terms of satisfaction that could be derived

ad

from interpersonal relationships with the supplier’s sales representatives 2. In today’s highly

y
th

ju

competitive market, customer satisfaction is regarded as a major contribution for organizations to

yi

not only retain customers but also assist in recognizing economic goals like sales turnover and
3; 4; 5

pl

profitability

. It is shown that there is a positive relationship between customer satisfaction

al

n

ua

and customer loyalty 6. The higher level of customer satisfaction leads to the greater customer

va

loyalty 6; 7; 8. Otherwise, as a result of customer dissatisfaction, they will not hold commitment to

n

re-buy or re-patronize product or service 9; 10 in the future and have a potential to cause switching

fu
ll

behavior and negative word of mouth 11; 12.

m

oi

It was reported that sales representatives at Electrolux Vietnam AC did not take good care

nh

of their customers. As a consequence, the number of customers who either ceased repurchasing

at

z

products or left the company is noticeable. In accordance with Mr. Phu, customer complaints

z

vb

were regarded as serious problems of which must be taken notice. Customers expressed their

jm

ht

dissatisfaction towards poor service rather than products. They complained about late responses
from salespeople which made them wait for more than 1 day and have to make a call for prompt.

k
ai
gm

In some cases of emergency, salespeople are the ones that customers directly contact to ask for
immediate help but they were asked to leave messages or voice mails and would be re-contacted

l.c

om

after few hours later rather than receiving an instant support from salespeople. They also

a
Lu

complained that they were not informed about necessary information from salespeople on time
such as delay in product delivery, or changes in promotion. As a consequent, customers were

n
n

va

discontented with salespeople, which brought about not only loss of existing customers but also

sustainable growth of the company.

y

te
re

low sales. There was no denying the fact that this issue had an influence on the long-term

Electrolux products for more than 2 months although he definitely guaranteed that they had been

9

th

To be more specific, Mr. Phu elaborated the issue that many dealers had not ordered


t
to

sold out. Most of them were air conditioner specialists, known as ACS, were qualified customers

ng

that were believed to have a potential in buying and selling to gain revenue on a monthly basis

hi

because they had sufficient resources in terms of human resources, financial resources and

ep

inventory capacity. Some of them intentionally sent formal complaints to related parties whilst

do

w

others complained by oral and decided to slow down the period of time from buying to selling

n

lo

Electrolux products as a way of not hurting the relationship with the company, which made the

ad

company challenging to figure out the problem owing to their inaccurate reasons. Therefore, after

y
th

receiving a large number of complaints from customers, manager and supervisor were able to

ju

yi

aware of the main cause of this problem, which was because of salespeople. As shared by Mr.

pl

Quan, there were actually 3 cases that have had a close relationship with the company more than

al

ua

3 years finally being out of business with the company. Alongside, other 2 cases did not want to

n

enthusiastically sell their products which mean that when individual customers come to ask their

va

n

recommendation about proper products that matched their needs; however, they did not mention

ll

fu

about Electrolux brand.

m

oi

In the context of business-to-business relationship, it is proven that salespeople’s job

at

nh

performance as customer contact employee plays a crucial role in securing business customers’
satisfaction 13. Specifically, attitudes, expertise and traits of salespeople can impact on customer
. To measure the level of customer satisfaction, a quantitative survey which

z

13; 14

z

satisfaction

vb

jm

ht

includes quality of service in case of salespeople was distributed to 56 business customers that
carry out product lines of not only Electrolux Vietnam AC but also their competitors, among

k

ai
gm

which Daikin and Toshiba were particularly chosen to investigate the level of customer
satisfaction of these companies and to compare with the existing situation of Electrolux. All

l.c

items are measured using 10-point scale ranging from 1 which indicates strong dissatisfaction or

om

fully disagreement to 10 which indicates strong satisfaction or fully agreement. By providing

a
Lu

them with a hard copy at shop as well as an email invitation to online survey, complete

n

n

rate of 94.6 percent.

va

questionnaires could be acquired from a total of 53 customers out of 56 in total, for a response

y

te
re

th
10


t
to

Table 2: Results of the customer satisfaction survey collected from Electrolux Vietnam AC,

ng

Daikin and Toshiba

hi
ep

Items

do

Mean
Daikin
7.85

Toshiba
7.11

5.77

7.63

6.92

6.25

8.89

6.78

5.86

7.92

7.34

6.73

8.14

7.42

6.87
6.98
6.74

7.26
7.59
8.16

7.15
7.86
7.22

6.40

8.48

7.16

6.13

8.32

7.89

w

1. My sales representative spends sufficient time
with me.
2. My sales representative can be reached when I
need him.
3. My sales representative advises me according to
my requirements.
4. My sales representative deals with my concerns
quickly.
5. My sales representative gives me information
about current developments that are important for
our business.
6. My sales representative is solution-orientated.
7. My sales representative is flexible.
8. My sales representative has professional
expertise.
9. I would repurchase the offering from this
salesman.
10. Overall, I am satisfied with the company.

Electrolux
6.24

n

lo

ad

ju

y
th

yi

pl

n

ua

al

n

va

ll

fu

oi

m

nh

at

Source: Quantitative survey from the company’s dealers

z
z

vb

According to the table, there were 10 items measuring the quality of salespeople in

jm

ht

Electrolux Vietnam AC, Daikin and Toshiba. In case of Electrolux, the average mean is 6.4
which showed that customers did not really agree or satisfy with all of the statements of this

k

ai
gm

dimension. Noticeably, item 2 “my sales representative can be reached when I need him” and
item 4 “my sales representative deals with my concerns quickly” had the lowest mean scores

l.c

om

which are 5.77 and 5.86, respectively. Meanwhile, the average of Toshiba was 7.28 and that of

a
Lu

Daikin was 8.02, which indicated the highly agreement of the respondents to this dimension. The
quality of salespeople of Electrolux should be significantly concerned due to their lowest

n

n

losing business partners and therefore, low sales. The research plans to scrutinize causes that

11

th

investigation into the reason why the customer dissatisfaction is so high to mitigate the risks of

y

Taking everything into account, it is vital for Electrolux Vietnam AC to conduct an

te
re

guidance and support for their team members’ improvement.

va

satisfaction of customers. It is clear from this analysis that sales organizations needed to provide


t
to

result in customers’ action to leave the company and to suggest solutions to improve customers’

ng

retention.

hi
ep

2.2.

Initial cause-effect map

do

The depth interview was conducted in order to investigate the potential causes of

w

n

customer dissatisfaction and low sales situation which Electrolux Vietnam AC is struggling with.

lo

ad

All of 7 respondents were chosen to work for the sales department and a product manager works

y
th

for product management department in the company’s AC division at least 2 years in order for

ju

them to be capable of understanding the operation and management system of the company. In

yi

the sales department, sales manager and sales supervisor who are responsible for the symptoms

pl

ua

al

as well as sales representatives who are directly related to the symptoms joined the interview for

the data collection. Interviews which were done by face-to-face interviews to reflect the customer

n
n

va

experience under viewpoint of Electrolux Vietnam AC salespeople. There are 9 causes resulting

ll

fu

in 2 symptoms in AC division that were clearly shown in an initial cause-effect map.

oi

m

Basing on the symptoms, sales manager and sales supervisor noticed that customer

nh

dissatisfaction was due to the lack of customer follow-up from salespeople. Regarding

at

salespeople’s lack of awareness in dealer programs, the company had a policy to ensure a quality

z

customer service that salespeople were responsible for providing dealers with special offers in

z
ht

vb

special occasions. Nevertheless, according to sales supervisor and a sales rep, some salespeople

jm

did not send special promotions like gifts, vouchers, etc. to customers in holidays such as

k

Christmas Eve, Vietnamese New Year, etc. Some customers also complained about the lack of

ai
gm

PG, PB support in running promotion in their grand opening days. What is more, dealers were

om

l.c

assisted with marketing and training sessions in order for them to be well equipped to attract and
serve their customers well. Salespeople were those who were ready to fully support customers by

a
Lu

any means of communication. However, they were regarded as promises that made customers

n

have a long wait. Consequently, customers were dissatisfied with the service of the company.

va
n

Besides, there were some delays in delivering air conditioners to the customers. Sales

shipping time, salespeople needed to actively contact with customers to inform them about it
12

th

main reason for this situation is due to unexpected delay from manufacturer or the longer

y

delivered and installed as promised. Although it is not salespeople’s subjectivity because the

te
re

supervisor admitted that salespeople did not meet the deadlines because the product was not

t
to

instead of their irresponsibility to let customers wait. Some customers show their displeasure by

ng

asking another salesperson to consult them instead of the first one who was responsible for

hi

selling the product to them before. Another case was illustrated by sales manager which was

ep

about an adjustment in sales forecast of customers. Some customers increased their purchasing

do

w

volumes after a period of time of initial order that makes the company impossible to follow their

n

lo

new orders because their initial order was approved and completed. It was possible that

ad

customers were conscious of this policy; however, they blamed salespeople for not spending time

y
th

on consulting them clearly about the increasing trend of that line of air conditioners in that

ju

yi

season. Likewise, another salesperson disclosed that there are some situations in which customers

pl

ordered products in advance and willing to receive products later without exact time; however

ua

al

salespeople believed that it was customers’ responsibility to actively contact with them to ask for

n

their products, so they were unable to meet customers’ requests for product delivery at a specific

va

n

point of time set by customers because the company’s policy allowed salespeople to order their

ll

fu

products at one random week set by product management on a monthly basis. Salespeople also

oi

m

did not respond to requests of brochures from dealers because they believed that marketing team

nh

would actively send brochures to them. Salespeople seemed to take it for granted, which showed

at

their unconcern about their customers’ needs. Consequently, they did not provide product and

z
z

service delivery on time, which made customer unhappy.

vb

jm

ht

Insights from salespeople revealed that they could not follow up with all customers due to
their hectic working schedules which results in work-life imbalance. Salespeople performed their

k

ai
gm

jobs that involved three main duties which are ongoing relationship management to grow sales
from upselling or cross-selling, new consumer acquisition and non-selling activities such as

l.c

paperwork, meetings, reviews, etc. Salespeople received large number of emails coming in their

om

mail box and phone calls and they were so busy to check email and answer phones every day. In

a
Lu

specific occasions, they had to travel to other regions to interact with clients and colleagues in

n

va

more than one week. As a rule, companies could not lie within their existing territories, so in

n

order to be not only a survivor but also a passion to be market leader; salespeople of Electrolux

hours on a daily basis. They had to sacrifice their personal choice such as family time, doctor’s
13

th

achieve sales targets, they had to work overtime and in the weekends besides 8 official working

y

ones. They were counted as 20 percent of each salesperson’s KPI. In order to complete jobs and

te
re

Vietnam AC were required to help the company increase their market share by find new potential


t
to

appointment, etc. Moreover, they rarely had enough for a full breakfast or lunch meals in busy

ng

days. Work-life imbalance was so common in the company that when a salesman decided to

hi

leave the office earlier than others, sales supervisor did not let him away from the office by

ep

asking him to help his urgent paperwork. Salespeople also revealed that they usually had to meet

do

w

clients in office hours, so administrative tasks must be done by working overtime. Although

n

lo

salespeople were aware of customers’ needs, their high workloads made them unable to timely

ad

keep track of all customers’ requests.

y
th

ju

Moreover, some salespeople were unable to provide answers to customer enquires about

yi

products. Salespeople needed to acquire sufficient product knowledge to present benefits of their

pl

products accurately and persuasively because customers were likely to respond to enthusiastic

al

n

ua

salespeople who were passionate about their products and eager to share the benefits with them.

va

Air conditioners were complicated and expensive, so they were challenging to sell. Salespeople

n

could diversify different models with distinct designs, materials, specifications, dimensions, BTU

fu

ll

and functions regarding energy saving, comfortable, convenient and clear. However, it was not

m

oi

the end of selling because many business customers were more concerned about the technology

at

nh

of products which were regarded as the competitive strengths between Electrolux and other
competitors. When being asked to make a comparison of V-PAM and i-PAM which were

z
z

optimized inverter control or the function of sine-wave DC inverter control between the company

vb

jm

ht

and other competitors, salespeople could not demonstrate confidence and expertise that made
customers enjoy. Another case was shared about mistaken suggestion of the product selection

k

ai
gm

because the salesperson remembered wrong indicators of the product application, which
somehow showed their poor understanding of products. As revealed by salespeople, their

l.c

knowledge was limited due to the lack of training, so what they could overcome the situation and

om

persuade customers to purchase products was to emphasize on their products’ attractive features

a
Lu

and competitive price scheme. It seemed that salespeople mainly focused on achieving the

n

va

revenues rather than customer orientation. As a result, customers agreed to purchase a small

n

volume of the company’s air conditioners; however, some of them were not motivated to

te
re

enthusiastically sell our products to their customers.

y
the lack of training opportunities. It was confirmed that there was no adequate training sessions
because they were only given opportunities to work alongside with more experienced colleagues
14

th

Insights from salespeople revealed that they have deficiency of product knowledge due to


t
to

so that they were expected to learn and develop their current role. In contrast to the expectation,

ng

salespeople affirmed that they could shadow a couple of people who were extremely busy with

hi

their clients and their tasks without giving any advices or responses to their questions.

ep

Consequently, salespeople had to figure out everything by themselves. They could learn on their

do

w

own from their experience, failure, quick conversation with colleagues at their spare time, etc.

n

lo

They also expressed their difficulties with sales supervisor; however, he did not take their

ad

concern into consideration and reminded them to actively figure out answers for their problems.

y
th

They believed that the main reason for lack of training provision was not because of sales

ju

yi

manager’s busy schedule but because he underestimated the importance of coaching and training

pl

since he was a formerly successful sales professional before being promoted into sales manager.

al

ua

For him, selling came naturally and he often could not understand why salespeople were not

n

“getting it.” Moreover, salespeople were recruited as they must possess more than 2 years of

va

n

experience. However, many of them admitted that their skills and knowledge are at a basic level.

ll

fu

Salespeople were provided with a variety of software as tools for them to utilize to improve their

oi

m

selling process. However, how to use them depended on their capacity and time allocation

nh

because they had to learn all by themselves. As compared with other departments, marketing

at

team was given a chance to participate in a training course for digital marketing whilst new

z

z

members of HR team who were had less than 2 years of experience were brought up by both

ht

vb

unique training courses and specific on-the-job assignments, together with HR director’

jm

involvement in coaching these talents. The company also had a talent program for STEM talent

k

to develop their potential to be able to work in factories and laboratories. What salespeople

ai
gm

expected was a solid training program for selling skills and technical knowledge must be come

om

l.c

down so that they were much more confident and excellent in selling and serving their customers.
Besides, as shared by product manager, the company was struggling with intense

a
Lu

competition with other air conditioning rivals who constantly found a breakthrough to spur a

n

va

cutting-edge technology. Because the existing products of Electrolux remained the technology

n

without advancement, dealers expressed their expectation for the company to make an additional

the climate change and an increase in electricity bills up to approximately 8.4 percent which
15

th

had lower environmental impact such as R32 as Daikin. Many of dealers’ customers revealed that

y

significant energy saving such as dual inverter compressors as LG or effectively carried heat and

te
re

innovative features in the product in such a way that increased their cooling capacity but


t
to

might affect their change in buying behavior for air conditioners in the near future. Therefore, the

ng

salespeople found it challenging to attract new clients who kept pace with the latest trend to be

hi

more concerned about energy efficiency.

ep
do

Lastly, product manager also shared that the price of the company’s air conditioners are

w

not really as attractive as other rivals. Dealers were encouraged to purchase products with high

n

lo

discounts; however, there is no policy to require consistent and transparent pricing of dealers.

ad

The larger volume of products were purchased, the higher discount dealers would receive from

y
th

ju

the company; however, they wanted to preserve their profit as much as possible, so they dealt

yi

with their customers with different prices and always higher than original one, which made the

pl

company unable to strongly compete with other organizations.

n

ua

al
n

va
ll

fu
oi

m
at

nh
z
z
k

jm

ht

vb
om

l.c

ai
gm
n

a
Lu
n

va
y

te
re

th
16


n
lo
ad
ju

y
th

yi
pl
ua
al

Lack of awareness in
dealer programs

n
Lack of customer
follow-up

n

va

Low customer
satisfaction

Low
sales

oi

m
ll

fu

Overwhelming

workload

Organizational symptoms

at

nh

Delay in service
delivery

z
z
Lack of product
knowledge

k

jm

ht

vb

Lack of training

om

l.c

ai

gm

Lack of product
innovation

an

Lu

Difficult to find new
clients

va
n
ac
th

Figure 1: Initial cause-effect map

y
te

re

Less attractive price

si
eg

cd

17

jg
hg


t
to

2.3.

Updated cause-effect map

ng

2.3.1. Ineffective managerial support

hi
ep

Managerial support means that managers are willing to adjust working schedule, job tasks

do

and provide assistance to help employees manage their work and non-work demand

w

n

management’s responsibility for supporting employees

15; 16; 17; 18

57

. It is

in such a way that employees

lo

ad

perceive their work matters are consulted, and their needs are considered and are taken action

ju

y
th

properly 19; 20.

The value of training subordinates concerning the advantages of demonstrating support

yi

pl

for their supervisors fosters a virtuous cycle of support between subordinates and managers

55

.

ua

al

Management that pays attention to the occurrence of actions such as upper management

n

involvement, pre-training preparation, support during training, job linkage and follow-up plays an

va

important role to support the transfer of training to the job, which helps increase productivity of

n

ll

fu

employees while controlling the high costs of training 56. Hence, a relationship can be established

oi

m

as ineffective managerial support results in insufficient training.

57

at

within the organization

nh

Managers play an important role in introducing and endorsing work-life balance policy
. It is suggested that employees should be given some autonomy and

z

z

flexibility regarding working hours and the ability to work from home to improve work-life

vb

balance 18. Not only working parents and young employees but also employees at developing and

ht

jm

pre-retirement career stages find managerial support for work-life balance important 57. All levels

k

of managers should take effort in undertaking a supportive workplace. Therefore, a relationship

ai
gm

can be established as ineffective managerial support leads to work-life imbalance.

l.c

om

In order to confirm the new variables and new relationships established based on the
literature, manager, supervisor and employees from sales department were asked to participate in

a
Lu

the subsequent round of interview. Salespeople believed that their concerns about work-life

n

n

va

imbalance and training opportunities were not heard by the management, so there was lack of

perceived management support in this company. Sales manager thought that the current number

management did not care about the overwhelming workload that their salespeople were
18

th

actual reason lied in the management of sales department because salespeople perceived that their

y

However, after the investigation of causes of customer dissatisfaction from salespeople, the

te
re

of salespeople were not enough to manage and serve their customers as well as expected.


t
to

emotionally and physically exhausted to perform so that they had to sacrifice their personal

ng

obligations for work responsibilities. Moreover, the management was discerned to not provide

hi

salespeople sufficient training so that salespeople did not have competencies necessary to have a

ep

conversational comfort level with varied technology offerings and a comprehensive

do

w

understanding of what technology could do for customers.

n
lo

2.3.2. Work-life imbalance

ad

y
th

Work-life balance consists of initiatives from organization to help employees reconcile

ju

their work and personal life 57. Management support flexible work will offer advantages to both

yi

employers and their employees so that employers are beneficial from employee productivity,

pl

ua

al

commitment, motivation and retention whilst employees are advantageous from better time
management and less stress

21, 22

. Indeed, work-life balance enhances overall well-being of

n
n

va

employees and reduces absenteeism. In order to assuage the burden of work-life balance, there
23

. Hence, a relationship can be established as lack of work-life

ll

non-work roles without threats

fu

should be availability of work-life policies that enable employees to enact both their work and

m

oi

policy creates work-life imbalance. Work-life imbalance brings about either absenteeism or work

at

nh

stress which generates low overall well-being.

z

Sales supervisor admitted that sales team was always under pressure to achieve higher

z

ht

vb

growth, so they cared about employees’ achievements at work rather than their personal life.

jm

Salespeople are preferred to put themselves as much as possible at work. Sales supervisor

k

realized that some employees consistently requested for absence due to sickness or family issues;

ai
gm

however, salespeople were not encouraged to take days off without rationale. As a result,

om

l.c

employees voluntarily took sick leave before asking permission from sales supervisor, which
made work behind the schedule. A salesperson, Mr. Anh, revealed to plan to have a break in

a
Lu

roughly more than 2 months to let his mind free and relaxed because his mental and physical

n

resources get drained as the consequence of insomnia and personal relationship matter. In case of

va

poor performance, another salesperson, Mr. Phong, did not receive any support but a warning to

n
survival. The work was so much that another salesperson, Mr. Minh, did not have enough time

19

th

the quotas. Consequently, he got depressed and stressful because he had to stand alone to be

y

workloads, he had to increase his effort and time to overcome the challenges of the work to reach

te
re

suffer not only a decrease in salary but also a possibility to lose the job. In addition to daily high


t
to

for his outdoor activities to increase his well-being because he had to frequently meet clients in

ng

the evening after leaving the office. Mr. Long, the most experienced salesperson, had physical

hi

problem caused by work-life imbalance in a combination with the essence of the work that

ep

required him to drink without exercises.

do

w

2.3.3. Insufficient training

n

lo

ad

Training fulfillment refers to the extent which training meets the expectation and desire of

y
th

employees. Self-efficacy is regarded as the belief of an individual in his or her capability to

ju

control the work situations and handle them well

24

. Thus, individuals with lower levels of self-

yi

efficacy are likely to find the work unbearable and highly stressful whilst those with higher levels

pl

24

.

ua

al

of self-efficacy perceive the job as a challenge to be mastered rather than as a threat

Meanwhile, motivation can be intrinsic, which shows employees’ engagement in work for its

n
va

own benefits since the work itself is interesting and satisfying whilst extrinsic motivation shows

n

employees’ motivation to work in response to something apart from the work, such as

. Training plays an important role to enhance motivation and self-

ll

25

fu

recognition or rewards

m

oi

efficacy of employees, so organizations should take effort to develop right training programs to

nh

enhance the training fulfillment of employees

58

. Hence, a relationship can be established as

at

z

insufficient training results in lack of motivation and lack of self-efficacy.

z
ht

vb

Although sales supervisor and sales manager admitted that they were not aware the need

jm

for providing employees with training workshops, employees were encouraged to learn by doing

k

and learn from experienced co-workers. From the viewpoints of salespeople, they were not

ai
gm

performing to their best at work due to lack of required skills and knowledge. Therefore, they

om

l.c

were demotivated to hit their revenue targets by always making excuses for their poor
performance without actual improvement. They were also unconfident about their capabilities to

a
Lu

perform their work better because they believed that they could not achieve excellent results

n

since their field was extremely competitive with very complicated products and that their quotas

va

were reached in some quarters was because of serendipity or luck. Therefore, they agreed that it

n
y

workmanship of employees as well as enhance their working motivation and self-efficacy.

te
re

was necessary for the company to organize job-related training workshops to help improve

th
20


t
to

2.3.4. Ineffective segmentation

ng

In order to support marketing’s goal that creates value for customers and generate

hi
ep

profitable consumer relationships, segmentation plays a key role in helping the company to know

do

and determine which customers to serve. The company segments the market based on certain

w

criteria that are relevant to the context of the company so that they are able to target customers

n

lo

effortlessly with advertising and marketing programs

53

. Concentrating on customers’ desired

ad

outcomes, organizations utilize segmentation for the purpose of innovation which is regarded as a

y
th

ju

key instrument to use resources and capabilities to win customers and markets through different
53

. Innovation is steered by customers and market requirements as well as

yi

market offerings

pl

competition among suppliers and shaped by the advancement of technology

26

. Product

al

n

ua

innovation is regarded as product differentiation in the marketing sense although all

va

differentiation may not be innovations 27. It is also noted that the companies can find customers at

n

higher prices especially for high technology innovations; however, it is suggested that in order to

fu

27;

ll

achieve superior value, the organization needs build extraordinary features at bearable prices

m

53

oi

. Hence, a relationship can be established as ineffective segmentation results in insufficient

at

nh

product innovation and less attractive price, both of which generate the difficulty in finding new
clients. Being a sharp weapon in segmentation, innovation mechanism based on technology helps

z
z

the company catch up with competitors or surpass the world levels. When few changes in their

vb

ht

products and most of products were of slight differences, the company utilizes price mechanism

k

jm

based on attractiveness to fight with competitors in the price wars 53.

ai
gm

Product manager agreed that the segmentation of the company was ineffective. The
company did not stand out to offer newness and difference in product offerings, as revealed by

l.c

om

her, because of limited R&D resources. Moreover, dealers were more likely to offer prices that

a
Lu

made them profitable; however, they explained to her that the fact was that they compensated
into the cost of marketing activities, accompanied gifts or vouchers, cost of installation, etc. She

n
y

te
re

would be confidently cooperate with the company.

n

va

believed that there should be an unambiguous policy for the pricing of dealers so that new ones

th
21


n
lo
ad
y
th
ju

Low overall
well-being

yi
pl
ua
al

Lack of awareness
in dealer programs

Work stress

n

Symptoms

n

va
Work-life
imbalance

Low customer
satisfaction

Lack of customer
follow-up

Low
sales

oi

m
ll

Insufficient worklife balance policy

fu

Potential central
problems

nh

Ineffective
managerial
support

Delay in service
delivery

at

Absenteeism

z
z

vb

Lack of product
knowledge

k

jm

ht

Insufficient
training

om

l.c

ai

gm

Lack of selfefficacy

Lack of motivation

va

Difficult to find new
clients

n

Insufficient
product innovation

an

Lu
y
te

re

Ineffective
segmentation

ac
th

Less attractive
price

si
eg
cd

Figure 2: Updated cause-effect map

22

jg
hg


t
to

2.4.

Potential problems

ng

2.4.1. Ineffective segmentation

hi
ep

The availability of technology of Electrolux air conditioners was consistently taken up by

do

their competitors. Compared with competitors in the same industry, the utilities of Electrolux air

w

n

conditioners are generally no different from competitors such as cooling mode, temperature

lo

ad

sensor mode, sleep mode, powerful mode, anti-bacterial filter, inverter technology, etc. Sales

y
th

manager revealed that designers, marketers and engineers had to work together in cross-

ju

functional teams under pressure to add advanced technology as well as come up with new air

yi

conditioners that would appeal to a wide range of our customers. Product manager emphasized

pl

ua

al

on the significance of advancement in products’ technology due to many reasons: people were
more likely to spend most of their day indoors, so they highly appraised quality air to steer clear

n

n

va

of diseases caused by toxic contaminants, climate change, global warming and an increase in

fu

electricity bills that arise their awareness and purchasing behavior to shift to air conditioners

ll

which are ozone-safe, climate friendly, energy efficient. It is noted that Panasonic’s most

m

oi

advanced purification system, the nanoe technology, deodorizes, inhibits bacteria and viruses,

nh

remove dust and purifies room even though cooling function is turned off. Meanwhile, Daikin’s

at

z

econo mode is accompanied with inverter to create a much more energy savings and minimize

z

vb

the monthly electricity bills. LG incorporates dual inverter which saves energy up to 70 percent

jm

ht

compared to single inverter. In order to meet consumer demand and compete with other
competitors to gain customers, it is necessary for the company to consistently update those

k
ai
gm

utilities to exceptionally higher level of efficiency.

om

l.c

Electrolux Vietnam AC aims at middle class. Price goes along with the technology of the
product. Comparing the lowest price for the Inverter line 1 HP cooling capacity between

a
Lu

Electrolux and Toshiba, the price is at VND 8 million for Toshiba and VND 8.5 million for

n

Electrolux. Although the air conditioner of Toshiba costs customers VND 500 thousands higher

va

than Electrolux, the saving mode of Electrolux only has inverter whilst that of Toshiba has both

n
manager that dealers of Electrolux enjoy a relatively good discount, generally at 30 percent and it

23

th

As a result, customers are more likely to pick up Toshiba’s. It was also revealed by product

y

whilst Toshiba’s features IAQ filter, anti-fouling technology magic coil and mold-resistant filter.

te
re

DC hybrid inverter and eco. Moreover, Electrolux's antibacterial technology is HD dust filter


t
to

can be increased up to 45 percent for new ones to encourage them to try our products. The

ng

discount rate is believed to be competitive compared to that of other competitors. Some dealers

hi

increase the price to compensate into the cost of marketing activities, accompanied gifts or

ep

vouchers, cost of installation, etc. to attract their customers. It is suggested by product manager

do

w

that there should be an unambiguous policy for the pricing of dealers so that new ones would be

n

lo

confidently cooperate with the company. However, doing so does not mean to help dealers

ad

because they find it challenging to compete to promote their products. Some of them denied

y
th

purchasing products from Electrolux and turned to its competitors. As a matter of fact, the

ju

yi

original price which is considered as not attractive because all costs and expenses have to be

pl

taken into account which can be import price from Thailand and China (50 percent), taxes (40

al

n

percent).

ua

percent), overhead expenses (approximately 15 to 20 percent) and discount for dealers (30 to 45

va

n

2.4.2. Ineffective managerial support

fu

ll

Sales representatives perceived the insufficiency of support from their sales manager and

m

oi

sales supervisor. Sales manager and supervisor did not care about subordinates’ problems and

nh

concerns regarding to their work overload and insufficient training sessions. From the viewpoint

at

z

of sales manager and supervisor, salespeople were expected to devote their time and effort to

z

vb

work and contribute to the achievement of not only themselves but also the whole team. Because

jm

ht

of an imbalance between work and personal lives, salespeople’s performance was negatively
impacted concerning customer dissatisfaction and their low overall well-being. Salespeople were

k
ai
gm

believed to be well-qualified to have a capability to carry out their selling and non-selling
activities effectively as all of them had prior experience in the same industry. From the beginning

l.c

om

of their first days in the company, they were expected to start right away in to their new job as

a
Lu

their experience and knowledge were believed to be more than sufficient. However, salespeople
shared that they were not confident and persuasive in selling products to customers as they

n
n

va

focused on what they knew and thought about their products rather than showed how a particular

product knowledge. It was how they made the buying decision and how they knew they could

y

te
re

product would address consumers’ needs. The bottom line was that customers crave and need

life balance policy made salespeople not satisfied with their job and would jump jobs when better

24

th

trust salespeople. The current situation in which lack of training opportunities and lack of work-


t
to

opportunities arrived. Moreover, it was challenging for salespeople to satisfy and retain

ng

customers as well as attract new clients to translate into lifetime customer value.

hi
ep

2.4.3. Main problem validation

do

Electrolux is renowned for its wide range of products that segment consumers from mid

w

n

to high income. Likewise, its air conditioners segment fast-growing middle class. However, the

lo

ad

combination of inadequate product development and relatively high price are not highly

y
th

recommended by this consumer base. It is more difficult than ever for sellers to compete on price

ju

in order to satisfy their market while earning a profit and to foster technology innovation so as to

yi

make their products stand out and differentiate from the competition and stay aligned with

pl

ua

al

customer needs in an ever-changing market. To develop and impel technical innovations of air
conditioners, the company has to invest millions of dollars with the involvement of personnel in

n
n

va

the research and development of new products. In spite of the fact that air conditioners of

fu

Electrolux are not exceptionally innovative, their current features are still above average that

ll

adapt to a group of consumers’ preference and purpose. To set a price that equals or beats

m

oi

competitors’ prices, the company has to cut a proportion of cost which is added to the total cost

nh

to determine the selling price. However, it is actually not effortless to lower the price in this way

at

z

since the price is allocated by the top management in the headquarter for the business’s operation

z

vb

in terms of importing costs, taxes, overhead expenses, etc. that maintain its existence and comply

jm

ht

with Vietnam trade promotion policy. Otherwise, the discount for dealers should be decreased in
order for the final price to their customers to be more attractive and better appropriate with

k

ai

gm

current features of the product. However, it has an adverse effect on dealers’ profit, which results
in their low motivation to keep purchasing products from the company and sell them to their

l.c

a
Lu

scheme.

om

customers as well as their likeliness to turn to other competitors with more attractive discount

n

Ineffective managerial support in sales department should be the focus of the problem

va

solving for Electrolux Vietnam AC due to their strong influence on both sides of employees and

n
Consequently, managerial support will enhance empowerment, well-being, job satisfaction and

25

th

and supported by management to enhance motivation and improve productivity for employees.

y

management to create a supportive workplace environment. Besides, training can be provided

te
re

customers. Initially, the implementation of work-life balance policy should receive support from