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

3

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

On this occasion, I would like to sincerely thank to all professors, who have devoted
to this programme and given us precious lectures and experience during the last two
years.

I also would like to thanks the two co-ordinators who have worked closely with
Professors and our class for all useful information about the courses and class.

And finally, I would like to thank all of my classmates especially my group for their
contribution in class that I can understand more about the courses.


4

TUTOR’S COMMENTS
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Signed:Dr. LE NGUYEN HAU


5

TABLE OF CONTENTS
Chapter I. INTRODUCTION ............................................................................................... 7
1.1 Overall background ......................................................................................................... 7

1.2 Company description....................................................................................................... 7
1.3 Problem statement........................................................................................................... 8
1.4 Objectives ........................................................................................................................ 8
1.5 Scope of works and limitation......................................................................................... 8
1.6 Method ............................................................................................................................. 9
1.7 Structure of the thesis...................................................................................................... 9
Chapter II. ENVIRONMENT ANALYSIS ........................................................................ 10
I. CURRENT SITUATION – SALES ORIENTATION ................................................ 10
1. Definition of Sales Orientation ................................................................................... 10
2. Main components of MVG’s Sales orientation .......................................................... 10
2.1 Concentrate on selling products based on what they can produce rather than
customers’ requirement .............................................................................................. 10
2.2 Focus on sales strategy rather than customer service. ......................................... 14
II. CUSTOMER ORIENTATION AND ITS COMPONENTS ..................................... 17
1. Definition of Customer Orientation ....................................................................... 17
2. Components of Customer Orientation. .................................................................. 17
Chapter III COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMERS
ORITENTATION; ....................................................................................... 19
I. COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMER
ORIENTATION ................................................................................................................. 19
II. STEPS TO CONVERT FROM SALES ORIENTATION TO CUSTOMER
ORIENTATION ................................................................................................................. 22
1. Step 1: Leadership commitment ................................................................................. 22
2. Step 2: Establish customers database system with all information as follows: ........ 22
3. Step 3: training the staffs ........................................................................................... 22
4. Step 5: Re-organize the company structure to ........................................................... 23
5. Step 4: Recruitment for some missing positions in Customer service. ..................... 23
Chapter IV: BUDGET & ACTION PLAN FOR CONVERTING FROM SALES
ORIENTATION TO CUSTOMER ORIENTATION ............................... 24
1. Budget .............................................................................................................................. 24

2. Finance ............................................................................................................................ 24
3. Concrete strategy plan in 2011 ....................................................................................... 25
Chapter V: CONCLUSION .................................................................................................. 27


6

LIST OF GRAPHS
Page
Graph 2.1.1 Market share in 2009

12

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

13

Graph 2.1.3 Profit from 2005 – 2010

13

Graph 2.2.1 Decrease in order of Tan Hiep Phat & Nestle Vietnam

15

Graph 2.2.2 Customer complaint comparison (2009 & 2010)

15

Graph 2.2.3 Decrease in Customers

16

Graph 2.2.4 MVG Customer complaint solving procedure

17


7

Chapter I

INTRODUCTION
1.1 Overall background
In the past, the majority of Vietnam companies defined their operations by selling
or supplying what they had to customers or consumers. This orientation has deeply
affected most business activities in Vietnam, especially in the state owned
companies regardless any products. During the last decade, Vietnam has witnessed
a dramatical change towards a more market-oriented economy. The global
integration (e.g. joining WTO) and increasing competition urge firms to radically
change their business principle/philosophy in order to survive and develop. Firms
aligning well to the changes of external environment would have higher chance of
success (For example: Vinamilk, Tan Hiep Phat…..). Otherwise, they would face
challenges that critically threaten their survival as in the case of Malaya Vietnam
Glass.
1.2 Company description
Malaya Vietnam Glass Co. Ltd is a joint venture company between Malaya Glass
Products Sdn Bhd (Malaysia) and Saigon Beer-Alcohol-Beverage Corp (Vietnam)
in 1993. The forerunner of this joint venture is Khanh Hoi Glass Company Ltd, a
state own company which was established in 1960. With the point of departure is a

state owned company and being an only supplier in Vietnam at that time, the
company concentrated on selling what they had to the customers. In July 2010, the
Malaysian sold their 70% shares to a new joint venture named O-I & BJC (Owen
Illinois and Berli Jucker Corp), thus, the company is now O-I BJC Vietnam Glass
Ltd (MVG). O-I is the well-known company in the world in glass packaging with
more than 80 factories in the world while BJC is a big company which belongs to
TTC group in Thailand. This joint venture will bring new technology of glass
industry and high standard glass packaging to Vietnam with a plan of strengthen
marketing strategy and product quality.


8

1.3 Problem statement.
With the advantage of being an only supplier in Vietnam market at that time, the
company concentrated on production and sold what they produced to the customer.
This business principle is not suitable any more, especially with the modern
business nowadays. Customers have more choices and they prefer the products
which can satisfy all of their specifications. The market share has been decreased
to 50% from 1997, San Miguel Yamamura Hai Phong – the main competitor from
the North of Vietnam - takes 40%, and other competitors take 10%. Therefore, it’s
a must for MVG to change the business orientation to regain its position in the
market and to develop the market not only in Vietnam but also in other foreign
countries.
Given this situation, this study will address two following problems:
1. How to change MVG’s orientation from sales orientation to customer
orientation?
2. What is expected to be the outcomes of this new orientation after five years?

1.4 Objectives

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

1.5 Scope of works and limitation
-

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

-

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


9

1.6 Method
-

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

1.7 Structure of the thesis
This project is organized as follows:

 Chapter One: introduces the project, its rationale, problem statement,
objectives, scopes and limitations. The method of changing to
the new orientation.
 Chapter Two: Environment Analysis; Theory of Sales Orientation and
Customer Orientation,
 Chapter Three: Comparison between Sales Orientation and Customer
Orientation and Steps to Convert to Customer Orientation.
 Chapter Four: Budget for implementing the Customer Orientation.
 Chapter V: Conclusion.


10

Chapter II

ENVIRONMENT ANALYSIS; THEORY OF SALES
ORIENTATION
AND CUSTOMER ORIENTATION
I. CURRENT SITUATION – SALES ORIENTATION
1. Definition of Sales Orientation
Most firms practice the selling concept when they have over capacity. Their
aim is to sell what they make rather than what the market wants (Kotler, 1999)

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

age and production procedure of MVG not specification requested by
customers.
2. Main components of MVG’s Sales orientation
2.1 Concentrate on selling products based on what the company can
produce rather than customers’ requirement.
Being an only glass plant in the South of Vietnam, MVG just
concentrates on selling products that we can produce rather than
follow customers’ requirement. Generally, when a company wants to
survive in the market, they must have a thorough grasp of market
demand. Based on such requirement, the companies will have
suitable products to satisfy the customers/consumers. However; this
is not applied in MVG. Due to B2B model, most of MVG’s
customers are companies that business line are beverage, soft drinks,


11

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

Below are some manifests of this business principle:


The objective of all business activities is the more selling volume

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



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



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



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

And the results of such principle were:

In 2008, MVG rejected the order of a potential customer from

Florida – USA due to their products are small jars (30oz) and a lot of


12

technical specification in order to concentrate on selling bottle for the
current customers like Saigon Beverage-Alcohol-Beer Corp, Pepsi,
Coke and so on…
In 2009, MVG failed the order of Tan Hiep Phat Group, a big group
in beverage, soft drinks and health drinks in Vietnam even though
Tan Hiep Phat Group was a potential customer of MVG from 2000.
These are reasons that makes the market share of MVG decreasing
from 2005 until now, the below chart shows the percentage of
market share of MVG and some other competitors in the glass
packaging market in Vietnam
Market share has been maintained against local manufactures
however imports are growing.
Belows is the graph for market share in 2009.

Volume (Bn Un) - Year 2009

Exports, 4,604 ,
4%
Imports, 16,478 ,
13%
Others, 11,432 ,
9%

Malaya Glass,
50,808 , 41%

San Miguel
Glass, 41,282 ,
33%

(Source: Internal studying)
Graph 2.1.1 Market share in 2009

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


13

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

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

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


14

2.2 Focus on sales strategy rather than customer service.

According to Turban Et Al (2002) “customer service is a series of
activitites designed to enhance the level of customer satisfaction – that is
the feeling that a product or service has met customer expectation”.
With such definition, the company that has customer service usually has
the following activities:
 Liaising and supplying customers all information of the products.
 Informing the customers all promotion programs, ensuring all
information is given to the customers on time for their profit.
 Taking care of after-sales procedures to the customers such as
answering the questions and solving customers’ complaint.
 Organizing for annual customer conference to strengthen the
relationship and to prove the customers value to them.
These activities have been totally absent from MVG because MVG
doesn’t have Customer Service and the sales team doesn’t have skills in
Customer Service.
Therefore, all activities in MVG are in accordance with the Sales
strategy i.e. strategy on selling price in order to achieve revenue and
profit for the company. MVG doesn’t pay much attention to customers’
expectation and has no customer value.
As a result, customers’ demand and orders decreased every year and
Nestle and Tan Hiep Phat Group are a byword example and the below
graph will present the decrease of in orders from 2007 to 2010 of the
above customers.


15

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

.
Below is the graph for customers’ complaint in 2009 &
2010 vs the sales revenue from 2005 to 2010.

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


16

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

(Source: MVG Annual Financial Report)
Graphic 2.2.3: Decrease in customers
It is noted that Nestle Vietnam did not have any complaints in 2010.
This is not because MVG products have been improved but because they
stopped ordering from MVG in 2010. Similarly, Tan Hiep Phat Group
also stopped doing business with MVG from 2009

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


17

Customers’
Complaint

Checked and
find out the
problem by QA

Dept

Inform to
customers about
the problem and
solution by Sales
Team

Get approval
from Plant
Manager for the
solutions.

Source: MVG annual complaint report.
Graphic 2.2.4 MVG’s complaint procedure

II. CUSTOMER ORIENTATION AND ITS COMPONENTS
1. Definition of Customer Orientation:
Customer orientation is the sufficient understanding of one’s target
buyers to be able to create supervisor value for them continuously.
(Levitt, 1980)

2. Components of Customer Orientation.
 Understand customer needs: to any products or any companies,
customers’needs or demands are extremely important. Whenever
a company wants to produce any new products, they all have a
market research on customers’ demand. Based on such demand,
the company will develop the products. However, not every


18

demand from customer will be satisfied because the company
must base on its situation and budget. Examples of such
companies are Tan Hiep Phat Group and Vinamilk Corp. These
are two specific companies that always consider customers’
benefits on top. They often have new products to satisfy customer
demand that keep changing and developing in the new trend.
 Customer satisfaction objectives: The company must set its
objectives is customer satisfaction. These objectives help the
company have proper development direction and also orientation
for all business activities of the company.
 Measure customer satisfaction: this will be a method to
measure and evaluate the company’s success in the market. These
activities will be organized frequently in order that company can
improve products, service and so on….
 Create customer value: by continuously improving products
quality and designs; training and develop all skills for sales team
and other relevant departments in order to gain the highest level
of customer satisfaction.

19

Chapter III

COMPARISON BETWEEN SALES ORIENTATION
AND CUSTOMERS ORIENTATION;STEPS TO
CONVERT INTO THE NEW ORIENTATION

I. COMPARISON BETWEEN SALES ORIENTATION AND CUSTOMER
ORIENTATION
The below table will state out the differences of the two orientation and
then from these differences, MVG can determine what to change and how
to change.
SALES ORIENTATION

CUSTOMER
ORIENTATION

Objectives

- Sell what MVG has and - Sell products which are
produce

despite

customers’

needs

and

produced

based

customers’ demand and
needs.

demand.

- Achieve the sales target - Achieve
of

weekly,

monthly,

customer

satisfaction.
- Create customer value.

quarterly and yearly.
Activities

- Spending time for sales - Concentrate
strategy

on

i.e.

delivery

developing

schedule

for

each

customers

customer

with

clear

products

quantity and products.

on
potential
with
and

new

current

customers with current
products.

- No activities in marketing - Develop

customers

to attract new customers

database

with

full

from domestics market as

information

well as foreign market.

products particularity and

about


20

strength in the market;
- No supportive strategy to

e.g.

Pepsi

and

Coca

customers in selling price

Cola’s products are soft

and other strategies to

drinks and energic drinks,

support

in

Tan Hiep Phat Group’s

delivery, transport, load

products are soft drinks

and unload the cargoes….

that are made from herbal

customers

remedy and so on….
- No

customer

service

activities and department
to take care of customers
and follow

up with

customers’

complaint,

demands

of

new

- No or littel information of
competitors

including

selling price, customer

on

key

account customers and
ignore the demands from
small

customers

who

have orders under the
fixed level for a minimum
order.

to
the

relationship

with

customers

by

annual

customer conference.
- Organize for customers’
survey

about

price, products, products
quality,

complaint’s

solving,

information

receiving

support policies.

strategy

strengthen

feedback

design/products

- Concentrate

- Implement

from

and

solving
concerned

departments and staffs.


21

OUTCOME/
CONSEQUENCE

- Loose market share since - Customer satisfaction is
the decrease of customer

- Create customer value

happens faster.
- Loose

the

increasing.

competitive - Sales revenue and profit

advantages because the

will

price

considerably

is

higher

than

be

improved
due

to

compertitors and there is

customers

satisfy

with

no

products’

design

and

improvement

products

design

on
and

method of working

quality.
- Revenue

selling price and the new

and

profit

decreased because current
customers choose another
supplier

for

their

companies and there is no
new/potential customers

From the above business activities analysis of both Sales Orientation and
Customer Orientation, it’s not so difficult to see that if MVG continues with
Sales Orientation, MVG will sure loose the market share in the market that
there are more and more potential competitors penetrating. And the most
important is that the revenue and profit of the company will be decreased
remarkably due to customers choose another supplier for the manufacture.
With such consequences as mentioned, it’s recommended that MVG should
change to customer orientation in order to improve all the bad things and
develop the business for MVG.


22

II. STEPS TO CONVERT FROM SALES ORIENTATION TO CUSTOMER
ORIENTATION

In order to change from sales orientation to customer orientation, MVG
has to spend a lot of time to concentrate on the following steps:

1. Step 1: Leadership commitment
In order to convert to the new orientation, it’s very important for any
company to change from the top management of the company because
they will be the main source propose all strategies and plans for
changing.. They will be the direct persons to instruct all Departments for
any strategies or plans that give the best results to the company. They
should follow up the report from the relevant departmenst about
customers’ satisfaction, and they must pay attention to customers’ ideas
or recommendation.
2. Step 2: Establish customers database system with all information as
follows:
-

Specific products

-

Annual volume

-

Distribution market

-

Potential products to be developed in the market in the next two
years.

3. Step 3: training the staffs
This is a necessary step for this change because the staffs are the

persons who will directly implement what the management decides
and will be responsible for all plan and strategies proposed by the
Management. In details, Sales staff will have a chance to join the
courses such as:-

Customer relationship management

-

Selling skills and customer service.

-

Skills to take care customers


23

-

Handling complaints

-

Negotiation skill

4. Step 4: Re-organize the company structure to ensure that each
department implements its functions and responsibility in accordance
with the new Orientation.
5. Step 5: Recruitment for some missing positions in Customer

service.
This will be a very important step for MVG because this department
will be a connection between MVG and customers. This department
will be responsible for the following tasks:
-

Supply customers all information about price adjustment,
contracts, service, delivery and any other information related to
the company

-

Follow up with customer’s demand.


24

Chapter IV
BUDGET & ACTION PLAN FOR CONVERTING FROM
SALES ORIENTATION TO CUSTOMER ORIENTATION
1. Budget
In order to convert to the new orientation, MVG will need to invest a big
amount of money for recruiting new staff, implementing new marketing
strategy with the new orientation….
Below is the budget cost for converting strating from 2011 to 2015.
 

 

  

Leadership  
strengthening

 
 1st year  

Training cost 
Research  competitors 
and customers  
Recruitement new 
employee; 
establishment and 
maintain of customer 
service dept and uphold; 
and annual total cost  

Customer conference 
Total 

 

 

2nd year 

3rd year 

   
192,000                  192,000             192,000 
   

4,545  
 4,545
 
   
7,000                       5,570                  5,570 

11,000 

9,500

   
31,818                    31,818 
   
246,363                 243,433 

9,500

             31,818 
           238,888

Unit: USD 
4th year 
   
192,000  

5th year 
  
192,000 

  

   
5,570  

5,570 

8,500 

8,500

   
31,818  

31,818 

228,888 

 
  

  

228,888 

2. Finance
Due to 70% market of MVG is domestics market; the company is expected to
have 25% of increment for local market.
Follow the marketing plan from 2011 -2015 and application of the new
orientation, the revenue of the company will be increasing every year i.e 31%
for 2011, and 15% for the other four years.

25

Due to B2B model and the business line of the company is industry, the
marketing activities will be implemented in order to transfer the definite slogan
of the company and MVG will spend 8% of their cost for markting activities.
The below table will present the budget for marketing activities from 2011 to
2015
(Unit: USD’000)
2011

2012

2013

2014

2015

Export

2,708

3,114

3,581

4,118

4,736

Import

11,961

13,756

15,819

18,192

20,921

Local

22,337

21,328

27,853

36,232

46,227

Revenue

37,660
29,861

38,198
26,624

47,253
33,181

58,542
41,905

71,884
52,507

2,388

2,130

2,654

3,352

4,201

Total cost of
sales
Marketing
expenses

3. Concrete strategy plan in 2011
1st Q

Key

2nd Q

3th Q

4th Q

PIC

activities
Strenthen

 Visit

Annual

customer

customer

Customer

value

and

(key account

Conference

relationship

customers in
the
South

North,
and

Centre

of

Vietnam )
Production

Trial

run

new site

at Commercial

Production

run based on team & Sales
customer
orders

team


26



Price increase

Price

New price General

due to high

policy for Director

inflation rate

customer

Sales/Marketing

and high cost

after

Team

for

moving to

raw

matereials.

the

new

Estimated

site,

the

new

ex-

increment

is

work price

10%.

can

be

decreased
5%.
Branding & Update

short International

all A

infomartion

marketing

on

activities

leaflet,

about

cataloge

and

Beverage

in forecast

for

company

November

the

of

history,

Budget:

2011 with new

business,

USD4,500

strategies.

site

location

and

other

interesting
information


Budget

: USD800
- Recruit CS

CS Dep &

Manager &

Manpower

staffs

Recruitment

Team

and situation

website, (video) on TV Food

products, new

Establish

the Marketing

exihibition on business

program

other

Update

year

and


27

Chapter V

CONCLUSION
Generaly speaking, glass packaging is not a young business in Vietnam but
because the nature of the business, not many of glass packaging manufacturers
invest into this field. But it seems to be changed in the modern society like
nowadays, more people concern to environment and all products can help to
protect it. Because of those reasons, more and more foreign companies invest
to this field as they recognize it is a potential market.
In the future, it will be a big challenge to MVG because their competitor is not
only San Miguel Yamamura Hai Phong, but also Thai Glass Incorporation and
some other local manufacturers, especially can and plastics manufacturers in

according with the “take-home” trend of the consumers.
In summary, MVG will have to take fully five (5) steps as mentioned above in
order to change to Customer Orientation, and the most important condition of
this procedure is changing from the thinking of every staff in MVG. The
budget for converting is USD246, 363 for the first year and this budget will be
decreased right after this model come into effect with the expectation of
gaining back old customers and attract the new potential customers and incrase
the customer value so that customers always feel satisfied for choosing our
products.
However; this study also has some limitation. Due to the business is glass
packaging industry which is quite exclusive in Vietnam; there is a limitation on
competitors’ information. Moreover, all of the figures in this study are real
figures from MVG’s internal report or self research.
By analyzing and overcoming the weakness and threat; together with the
combination of strength and opportunities, MVG can be surely a leader in glass
packaging manufacturing in Vietnam, thanks to new technology and technical
support from new owners and ofcourse the new orientation also.