Improving sales promotion program a case of dai thang company in vung tau viet nam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business
------------------------------

Dang Thi Ngoc Loan

IMPROVING SALES PROMOTION
PROGRAM: A CASE OF DAI THANG
COMPANY IN VUNG TAU-VIET NAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019


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

DANG THI NGOC LOAN

IMPROVING SALES PROMOTION
PROGRAM: A CASE OF DAI THANG
COMPANY IN VUNG TAU-VIET NAM

MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: Assoc. Prof. Nguyen Thi Mai Trang

Ho Chi Minh City – Year 2019

EXECUTIVE SUMMARY
This thesis aims to identify the root cause of “Ineffective sales promotion program”
which lead to reduce secondary sales at Dai Thang. By using in-depth interview with
related person and literature reviews, ineffective sales promotion is defined as main
problem which is actually existed at Dai Thang and the consequences of this problem
is also analized. It is necessary to solve the problem because there are a lot of
significant benefits for improving the effectiveness of solving the problem. Theories
play an important role in finding all potential causes of ineffective sales promotion at
Dai Thang. But then further in-depth interview support to eliminate some potential
causes and clarify the main cause which should be paid attention. As a result,
“Ineffective sales promotion program” is the main cause. Two alternative solutions
have been suggested and after clarifying the comparison of solutions about cost and
benefits, building up “My Loyalty Program” and organize workshop for
customers” is the better solution and a following implement action should be
approved as soon as possible to solve the problem and improve sales volumes at Dai
Thang.

3


ACKNOWLEDGEMENT
Without the encouragement, guidance and support for Assoc. Prof. Nguyen Thi Mai
Trang and other teachers, the entire master-level project would not be possible. I would
like to send my appreciation to my advisor. It has been a pleasure working with you on
this project. I would like to thank my friends and family for greatly support me while I
was working on my research.

4

TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................. 3
ACKNOWLEDGEMENT ................................................................................................... 4
1. Introduction ................................................................................................................... 8
1.1.

Company overview: Valvoline global lubricant market .................................. 8

1.2 Sales and market share in Viet Nam market ....................................................... 9
1.3

Valvoline Distribution Channel in Viet Nam market ...................................... 9

1.4

Valvoline Product ......................................................................................... 10

1.5

The relationship of Valvoline and Dai Thang ............................................... 11

1.6

Competitive advantage ................................................................................. 12

1.7

Problem finding process .............................................................................. 13

1.8

Symptoms ..................................................................................................... 13

1.7.1 Reducing primary and secondary sales from 2015-2019 ................................. 14
1.7.2 Customer„s complaint in Vung Tau (South East) seriously from Oct 2018 until
now…………………………………………………………………………………..16
2.1.

Initial identification of problem .................................................................... 18

2.2 Problem identification ...................................................................................... 21
2.2.1 The first potential problem: Limitation of Valvoline supplier in
packaging/colour of Valvoline product ....................................................................... 22
2.2.3 The third potential problem: Competitors brand switching ............................... 23
2.3 Problem Definition ........................................................................................... 24
2.4 Justify the existence of “Dissatisfaction at internal policies leading to brand
switching” .............................................................................................................. 25
2.5 Justify the importance of “Dissatisfaction at internal policies leading to brand
switching” .............................................................................................................. 26
2.6 Potential causes ................................................................................................ 27
2.6.1 The selling prices of Dai Thang is higher than other competitors with same
specification and other Valvoline importers. .............................................................. 28
5


2.6.2 Market competition ............................................................................................ 30
2.6.3 Ineffective sales promotion program than other competitors ............................. 31
2.7 Validation main cause and solution proposal ................................................... 31

3. Design solution for solving problem ........................................................................... 32
3.1. The first alternative solution: a discount program by accumulate points………..35
3.1.1 . Benefits…………………………………………………………………….....35
3.1.2. Costs .................................................................................................................. 35
3.2 The second alternative up “My Loyalty Program” and organize workshop………36
3.2.1. Definition of “Loyalty Program”………………………………………… …..35
3.2.2. Importance of “Loyalty Program‟‟ ............................................................ 35
3.2.3. Loyalty Program steps ....................................................................................... 35
3.2.4 Benefits ............................................................................................................. 38
3.2.7. Cost .................................................................................................................... 39
3.3
4

Solution justification .................................................................................... 39

Action Plan .................................................................................................................. 40
4.1

My Loyalty Program‟s action plan .............................................................. 40

4.2

Effectiveness measurement after taking action plan ..................................... 43

5. Conclusion ..................................................................................................................... 44
6. Supporting Information ............................................................................................... 44
REFERENCES…………………………………………………………………………..65

6

LISTS OF TABLES
Table 1. Segment Breakdown of all Valvoline importers in Viet Nam market
Table 2. Feedback‟s Customer
Table 3. Mr Nhuc‟s Actual sales volumes
Table 4. Mr Vu‟s Actual sales volumes
Table 5. Selling prices for Mr Le Anh Vu
Table 6. Comparation Valvoline prices of Dai Thang and Sam Chem
Table 7. The selling prices between Castrol and Valvoline
Table 8. Volume for loyalty program
Table 9. Action Plan

LIST OF FIGURES
Figure 1. Valvoline Business Segment 2016
Figure 2. Market shares of lubricating oil in Viet Nam market in 2018
Figure 3. Valvoline importers ‟s volume in Viet Nam 2018
Figure 4. Dai Thang‟s sales channel distribution
Figure 5. Review Sales out and Sales in from 2015 to 2018
Figure 6. Review Sales out and Sales in from 2015 to 2018
Figure 7. Initial cause-effect map
Figure 8. Updated cause effect map
Figure 9. Final cause-effect map
Figure 10. Solution map

7


1. INTRODUCTION
1.1.

Company overview: Valvoline global lubricant market
Valvoline Inc. (NYSE: VVV) is established 1866 and a leading worldwide marketer
and supplier of premium branded lubricants and automotive services, with sales in
more than 140 countries. Valvoline ranks as the No. 3 passenger car motor oil brand
in the DIY market by volume. It also operates and franchises the No. 2 quick-lube
chain by number of stores in the United States with more than 1,170 Valvoline
Instant Oil Change SM centers and the No. 3 quick-lube chain by number of stores
in Canada with more than 100 Great Canadian Oil Change locations.Valvoline
operates a global network of research and development labs, distribution and
customer services in 150 countries in Valvoline‟s business is managed within the
following three reportable segments: Core North America (51%); Quick Lubes
(24%) and International (25%).

Core North
America

25%
Quick Lubes
51%
International

24%

Figure 1. Valvoline Business Segment 2016
(Source: Valvoline website)

8


1.2 Sales and market share in Viet Nam market

Foreign businesses hold the majority of lubricant market, PLC is a domestic enterprise
has the largest market share. As of 2017, about 60% of the domestic market share
belongs to foreign enterprises in addition to BP (Castrol), Shell, Total, Chevron (Caltex)
in which Castrol BP is the market leader with 24% market share. PLC is a domestic
company with the largest market share with the rate of 12%.

Castrol/ PBPetco

24%
41%

Shell, Total, Motul,
Caltex
PLC
Others

23%
12%

Figure 2. Market shares of lubricating oil in Viet Nam market in 2018
(Source:FFPTS Research, Castrol BP)
1.3 Valvoline Distribution Channel in Viet Nam market
In Viet Nam, Valvoline opened 8 importers in expectation to take market share.
1. Dai Thang Co., Ltd
2. Cummins Viet Nam
3. Nam My Co., Ltd
4. Sam Chem Co., Ltd
5. Sy Viet Co., Ltd
6. Hung Minh Loi., Ltd
7. ANT Co., Ltd

8. Corporation Engineering Plastic and Hai Phong
9


The expectation of Valvoline for 2019 is 2,400,000 L. With list of these importers
above, Dai Thang Co., Ltd is one the biggest company which has the biggest volume
in Viet Nam market. According to Logistics Department, it can be shared volume in
each company as below for 2019.

Figure 3. Valvoline importers ‟s volume in Viet Nam 2018
Source: (Valvoline report in Q4/2018)
1.4 Valvoline Product
In Viet Nam market, Dai Thang is the biggest importers of Valvoline. The products are
allowed by Dai Thang: fishing segment and fleet segment. This means that Dai Thang
will mainly provide products for fisherman or fleet customers such as containers, trucks,
passengers etc…Dai Thang distributes Valvoline in 4 regions: South Central Coast,
Central Highland, South East and Mekong Delta. To understand clearly, segment
breakdown of all Valvoline importers is shown in Table 1 below.

10


Table 1. Segment Breakdown of all Valvoline importers in Viet Nam market
South
Central
Coast
3
3

Central

Highland

South
East

Melkong
Delta

3
3

3
3

3
3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

Industrial
Oils/ Fleet

3

3

3

3

Industrial
Oils/ Fleet

3

3

Northeast Northwest

Red River
Delta

No

Company Name

Segment

1

Dai Thang

Fishing
Fleet

2

Cummins

Cummins
powered
base

3

3

3

3

Nam My

PC; MCO

3

3

4

Sy Viet

PC; MCO

3

3

5

Hai Phong

6

ANT

MCO

7

Sam Chem

8

Hung Minh Loi

3
3

3

(Source: Sales Deparment)
1.5 The relationship of Valvoline and Dai Thang
Firstly, Valvoline hereby appoints Dai Thang to act as “non-exclusive distributor” of
Valvoline from Da Nang to Ca Mau. Valvoline divides in two kinds of distributors:
exclusive distributor and non-exclusive distributor. Basing on distributor agreement,
“Non-exclusive distributor” means that Valvoline retains the right to sell and to supply
the products itself directly (i.e. without involvement of distributor) or through other
intermediaries to the customers in the territory. If Valvoline supplies any products
directly or through third parties, distributor shall not be entitled to any commission or any
other compensation relating to such supply. Dai Thang has been working and cooperating
and has the long-term partnership with Valvoline for more than 10 years. Currently, Dai
11

Thang‟s sales target takes account around 63% in Viet Nam market. The products of Dai
Thang are mainly imported from Singapore. The market segmentation of Dai Thang
distributes mainly on-road fleet and marine. On-road fleet in lubricating oil industry
means that customer segmentation are trucks; container etc. and marine segmentation
means that Dai Thang distributes for ship-owners, boat etc. Dai Thang distributes
Valvoline products for dealers from Da Nang to Ca Mau province and these dealers will
distributed for end-users. The main end-users are ship-owners; trucks; containers, and
passenger cars etc.

Valvoline

Dai Thang

Dealer 1

Dealer 2

Dealer 3

End-user 1

End-user 2

End-user 3

Figure 4. Dai Thang‟s sales channel distribution
(Source: Sales Department 2018)
1.6 Competitive advantage

Our company‟s competitive advantage is expressed that Dai Thang distributes high
quality products and a reputation brand and high-quality products because of some
outstanding points. First of all, in 1993, the American Petroleum Institute (API)
categorized base oils into five main groups: Group I; Group II; Group III; Group IV and
12


Group V. This breakdown is based on the refining method and the base oil‟s properties in
terms of viscosity and the proportion of saturates and sulfur content. Valvoline are
manufactured by Group II and Group III base oils which are key components of higher
quality lubricants while other products can use base oil Group I such as some local
products such as Vilube. Secondly, Valvoline products are exclusively recommended and
endorsed by Cummins which is the biggest engine oil in USA. Thirdly, Valvoline product
is approved by American Petroleum Institute (API) which is a standard and certification
for lubricating oil with high-quality.
1.7 Problem finding process
To finding main problem at Dai Thang Co., Ltd, the below steps are carried out:
-

Refering the primary report from about “ sales volume” from Sales
Department

-

Conducting in-depth interview with Sales Manager and key customers in
Vung Tau to clarify about the symptom and explore potential problems.

-

Referring literatures to prove and update the cause-consequences relation

between potential problems,variables and symptom. Meanwhile, double
check the actual situation at Dai Thang Co., Ltd to understand correctly
what happened.

-

Conducting in-depth interview again to validate the existence of central
problem.

-

Referring literatures to understand the consequences of the central problem
(the importance of solving it) and continue using in-depth interview to
validate the actual importance of solving it.

1.8 Symptoms
After meetings with Sales Department Team, Dai Thang business was not good from
2018 up to now. Secondary data and primary data will be analyzed and justified the
existence of Dai Thang‟s symptoms and find out negative symptoms.

13


1.8.1 Reducing primary and secondary sales from 2015-2019
Sales Department provided the data of primary sales and secondary sales from 2015 to
2019. Based on figure 5 and figure 6, we can see the general picture about Dai Thang
business clearly from 2015 and 2018. Primary sales is the term means Dai Thang buys
from Valvoline supplier and secondary sales means that Dai Thang sells Valvoline
products to customers.
Firstly, compared to 2015, primary sales in 2016 increased 12%. Similarly, primary sales

in 2017 also increased 8%. However, in 2018, primary sales reduced 17%. In the first of
9 months (from Oct 2018 to May 2019), primary sales dropped down -47% compared to
2018.
Secondly, secondary sales are analyzed basing on some key points. Secondary sales in
the first 9 months of 2016 reduced -2% compared to 2015 because Valvoline cut the
North market of Dai Thang including some provinces: Thanh Hoa, Nghe An, Ha Tinh,
Quang Binh, Quang Tri, Hue, Hai Phong, Quang Ninh, Hai Duong, Hung Yen, Thai
Binh, Nam Dinh.
However, secondary sales in the first 9 months of 2017 increased 16% compared to the
first 9 months of 2016. And in 2018, secondary sales in the first 9 months of Dai Thang
also decreased 3% compared to in the first 9 months of 2017. In the first of 9 months
(from October 2018 to May 2019), secondary sales in the first 9 months dropped down
seriously 40%.
Thirdly, basing on Figure 5, Dai Thang signed Valvoline target which increased from
2015 to 2018; but in 2019, Dai Thang only signed Valvoline target which reduced 20%
compared to 2019.
To conclude the first symptom from Sales Department, the negative of primary sales and
secondary sales indicated that Dai Thang business was not good in 2018 and 2019.

14


1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000

-

The first 9
months of
2015
1 Primary Sales
801,441
2 Secondary Sales
839,470
3 Signed Valvoline 1,300,000

The first 9
months of
2016
898,711
820,428
1,350,000

The first 9
months of
2017
966,615
953,656
1,400,000

The first 9
months of
2018
805,182
923,250

1,500,000

The first 9
months of
2019
564,410
551,814
1,200,000

Figure 5. Review Sales out and Sales in from 2015 to 2018
(Source: Sales Department in 2019)
20%

16%

12%
8%

10%

4%

7%

4%

0%
2016
-10%

2017

2018
-3%

-2%

-20%

2019

-17%

-20%

-30%

-30%
-40%
-40%
-50%
%Primary Sales

%Secondary Sales

Signed Valvoline

Figure 6. Review Sales out and Sales in from 2015 to 2018
(Source: Sales Department in 2019)

15


1.8.2 Customer„s complaint in Vung Tau (South East) seriously from Oct 2018
until now
Basing on some information from Customer Service Officer of Dai Thang, there are
some other hints. To collect information, the author made an interview with Ms LanCustomer Service Office who has experienced and worked for Dai Thang since 2017
and stated that:
“Valvoline market in Vung Tau dropped down around around 50%.

Comparing to 2018,

customers refused to buy Valvoline products and the quantities of purchase orders are also less
than last year. Here are some collections about complaints of some customers in Vung Tau”.
(Ms Lan, Sales Admin, 25 years old)

Based on secondary data as shown in Table 2 above, it can see that there are some main
complaints from customers as below:
1. With same product and quality, Dai Thang is selling to customers with high prices
compared other Valvoline importers. This issue effects on Valvoline and Dai
Thang reputation in Viet Nam market.
2. Some Valvoline importers are trying to approach Dai Thang‟s customer by
selling to Dai Thang‟s customers with low prices to take market shares.
3. Sales promotion‟s program of Dai Thang is less and is not interesting compared
to competitors.
4. Valvoline‟s product brand awareness in Viet Nam market is low.
5. Valvoline products are not various products and packing

16

Table 2. Feedback‟s Customer
NO

1

2

3

DATE

20/10/2018

23/11/2018

14/12/2018

COMPLAINT MADE BY

WRITTEN STATEMENT

Vo Duc Nhuc

I feel very concern about Valvoline business. The
market is very complicated. There is a partner to sell
Valvoline products with very low-prices with same
product DTC is selling. This action effects on DTC
and our company 's Valvoline business in long run.

Tran Quang Hung

Valvoline is reputation brand in Europe, but in Viet
Nam market, product brand awareness is very low.
The competitors give sales promotion program in our
market such as many kinds of customer gifts, seminar
customers or billboard… Also in our market, there is
one partner to sell Valvoline products directly our
customers with very low-prices.

Ta Quoc Bao

I have worked with DTC for more than 5 years. I am
concerned when DTC sold us with high prices
compared to other Valvoline importers. Example: The
products I bought from Sam Chem is higher than DTC
around 10%. Also Valvoline product is not various
kinds of products and packing as other brand.

4

21/01/2019

Nguyen Kha Co., Ltd

In this time, our customers complaint that there is one
partners gave us Valvoline quotation with very low
prices compared to us. We need Valvoline and DTC to
help to solve this issue in urgent case because our
customers refused to buy products from us.

5

10/12/2019

Nguyen Van Huy

Customers prefer to buy products with variety
promotion program. For example: Castrol gifts: Tshirt, rain-coat; helmet, bag; umbrella…

Le Van Viet

Dai Thang has few promotion program and is not
interesting. We need Valvoline and DTC consider and
give us good promotion program to inhance customers'
buying behaviour.

6

3/4/2019

17


2. PROBLEM IDENTIFICATION
2.1.

Initial identification of problem

With the limit of time and cost of the solving problem project, this study will identify

three main possible problems of Valvoline business of Dai Thang reduced secondary
sales and suggest solutions and prove them efficient in applying into company‟s
problem. From all data below, we can see that this issue happened in Dai Thang‟s
Sales & Marketing Department. Therefore, to find out three possible problems, this
study approach is based on qualitative research method including secondary from
report data of Dai Thang and Valvoline from Sales & Marketing Department,
logistics department and in depth-interviews from different groups of respondents
such as Sales Director, Sales Executive, Customer Service Office, key dealers who
bought from Dai Thang and market industry.
In-depth interview is used to find out the potential causes to “Reducing secondary sales at
Sales Department”. In-depth interview with 8 persons who are responsible to the
symptoms and are knowledgeable about the symptoms at Dai Thang as following:
 Mr. Nguyen Van Sang- Sales Director has been working Valvoline for more
than 10 years. In his role, Mr. Sang is responsible to lead the growth of
Valvoline Business at Dai Thang. He also provides sales and business
leadership that will drive growth through key accounts and for sustainable
market share growth. He manages all business activities and sales
management at Dai Thang.
 Mr. Mr Le Quoc Hoai- Sales Executive in Vung Tau has been working with
Dai Thang for more than 3 years and he takes a play role for sales
management in Vung Tau.
 Do Le Thach Lan- Sales Admin in Vung Tau has been working for Dai Thang
more than 4 years and she takes a play role for sales service in Vung Tau

18


 Mr. Vo Duc Nhuc is the biggest dealer of Dai Thang in Vung Tau and has
been working and long-term partnership with Dai Thang for more than 10
years. Mr. Nhuc not only distributes Valvoline product but also many kinds of

products such as Total, Castrol, Mobil … He is also a dealer at top ten at Dai
Thang.
 Mr. Tran Quang Hung- Port Director has the second rank position in Vung
Tau and also has been working with Dai Thang for around 5 years and only
distributes Valvoline product.
 Mr. Le Anh Vu has the third rank position in Vung Tau and also has been
cooperating with Dai Thang for around 6 years and only distributes only
Valvoline product. He is also a ship-owner.
 Mr. Chin- Doan Hai Ship is the long term partnership with Dai Thang has
been working with Dai Thang around 4 years.
 Mr. Nguyen Van Huy is the long term partnership with Dai Thang has been
working with Dai Thang around 6 years.
After in-depth interview with 8 persons at Dai Thang, there are 3 potential problems
that lead to symptom “Reducing sales volume at Sales Department”. In depthinterview with Mr Nguyen Van Sang – Sales Director of Dai Thang said that the
reason is mainly sales promotion program and stated that:
“In current market situation, there are many competitors who are entering Viet Nam market. They
are trying and approaching existing customers therefore they have sales promotion program to
attract customers to buying Valvoline products. For example, Castrol has many kinds of
promotion program: free gifts; free product; discounts… Dai Thang also has sales promotion
program, but the program is not effective.” (Mr. Sang, Sales Director, 35 years old)

As the same opinion with Mr. Sang, in the meeting company on May 2019, Mr. Hoai –
Sales Executive gave opinions by three reasons: prices; competitive market and sales
promotion programs and stated that:
“First, customers also made complaint that Dai Thang‟s selling prices are higher than other
competitors. For example, Mr. Vu also complaints that Dai Thang sold Valvoline products are
19


higher than other Valvoline importers. Besides, the market is very competitive. Therefore, they

have many kinds of sales promotion for customers to remote products and increase sales volumes.
However, Dai Thang has few promotion programs compared to other competitors.” (Mr. Hoai,
Sales Executive, 27 years old)

However, according to Mr. Nhuc, Mr. Nhuc stated that:
“Dai Thang only provides Valvoline products and do not have enough product packing to supply
for customers. Therefore, Mr. Nhuc distributes only Valvoline product, but he used Castrol
product to replace.” (Mr. Nhuc, the biggest dealer, 35 years old)

On the other hand, from conversation with Mr. Vu – Dai Thang‟s dealer, he also stated
that:
“I am unpleasant to confirm that customers switching products to other suppliers because of high
prices. In Vung Tau market, the market is very complicated. There is a partner who sold
Valvoline products with very low prices. He made a complaint that Dai Thang sold to him high
prices”. (Mr. Vu, dealer, 37 years old)

Besides, Mr. Hung- Port Director also gave some negative points and said that:
“Although Valvoline product has the reputation and very famous in Europe and has started
business in Viet Nam market around 10 years. But Valvoline has low brand awareness in Viet
Nam market. Currently, many competitors invest advertisement strategy and they are trying to
create brand awareness. For example, before entering Viet Nam market, ENEOS – lubricating oil
in Japan has built many billboards in highway and main routes in order to increase brand
awareness in Viet Nam market”. ( Mr. Hung, Port Director, 40 years old)

20


Based on theories and 8 in-depth interviews, and together discussion with my
Manangement Team, there are 3 potential problems leading seriously results of secondary
sales sale: limitation of Valvoline supplier in packaging/colour of Valvoline product, low

brand awareness and competitors switching brand.

Figure 7. Initial cause-effect map
2.2 Problem identification
Potential problems, variables and symptom have been clarified at initial cause-effect
map. In order to prove the actual correlation of variables and update some new
variables, many theories are reviewed. After that, the main problem is analyzed by
using in-depth interview again and combined with literature review to eliminate some
potential problems.

21


2.2.1

The

first

potential

problem:

Limitation

of

Valvoline

supplier

in

packaging/colour of Valvoline product
Silayoi and Speece (2) stated that the package becomes a critical factor in the
consumer decision-making process. The study also indicated that packing was
separated into two categories: visual and informational elements. Besides, Swati,
Siddhant, Gautam (3) indicated that 90% male says that packing effects their buying
decisions in age group 10-30 years and in age 30-50 years, 100% males says that
packing effect their product decisions. And 100% female says that packing effect
their buying decisions age group 10-30 years.
An in-depth interview with Mr. Vo Duc Nhuc- the biggest dealer of Dai Thang in
Vung Tau said that
“Valvoline packing is actually not attractive. In our market, the lubricating oil package are very
various and attractive design. Some customers refused to buy products due to design product
from Valvoline.” (Mr. Nhuc, the biggest dealer, 35 years old)

As interview Mr. Hung:
“I think that sales promotion program and the packing of Valvoline is not various and
attractive”. (Mr. Hung, dealer, 40 years old)

Based on theory and an in-depth interview with Mr. Nhuc and Mr. Hung, product
packing plays an important role in choosing to buy products and is one of the
important elements to lead customers to choose buying products. Additionally,
Ampuero and Vila (1) stated that “in marketing literature, packaging is considered
to form part of the product and the brand”. Besides, packaging is a product property
or characteristic, whereas for Olson and Jacoby (6) told that packaging is an extrinsic
element of the product. Additionally, Underwood (13) stated that packaging is
presented as part of the buying and consuming process.
2.2.2 Low brand awareness

Lu L-C, Chang W-P, Chang H-H (12) stated that brand awareness is a crucial
consideration. It may be thought of as a buyer's ability to identify a brand within a
category in sufficient detail to make a purchase. There are two types of brand
22


awareness: brand recognition and brand recall. Brand recognition and brand recall are
two separate types of brand awareness.
In-depth interview with Mr. Vo Duc Nhuc is biggest distributor of Valvoline in Vung
Tau stated that”:
“Although Valvoline has reputation brand and top three in European; but in Viet Nam, Valvoline
has low brand awareness and few people know about this brand. Therefore, our sales team also
met difficulties when approaching new customers. Most of customers are using brand name as
Castrol, Mobil or Total don not want to decide to change other brands.” (Mr. Nhuc, the biggest
dealer, 35 years old)

Moreover, to understand about brand awareness in consumer‟s side, an in-depth
interview with Doan Hai shipping, Mr. Chin- ship owner is using Valvoline products
said that:
“We have been using Valvoline products in all our engines for the past 2 years. We find the
performance of the engine oil to be very good and reliable. We never have any related
problem in our ships; however, Valvoline has low brand awareness and effects on buying
products because brand awareness is very important. It is one of major brand assets that adds
value to the products and also measures of brand strength or brand equity.” (Mr. Chin, shipowner, 37 years old)

From impacting brand awareness and in-depth interview, brand awareness takes a
play role in customer decision. Low brand awareness can lead to reduce sales
performance. By building brand awareness, it can increase your market share. If
Brand awareness does not have a financial value on its own, it is part of the collective
marketing effort that drives incremental sales.

2.2.3 The third potential problem: Competitors brand switching
Kumar and Chaarlas (10) stated that brand switching is “the process by which
consumers switch from using one product brand to another, of same category”.
Competitors brand switching happens when customers leave their original service
provider in favour of service from another. An exploratory also gave causes
customers to switch providers by vital factors: core service failure, failed service
encounters, response to failed service, price, inconvenience, ethical problems,
23


competition, and involuntary switching. To make it clearer, the author made an
interview with key customers why competitors brand switching to buy products from
key customers.
Mr Vo Duc Nhuc – the biggest distributor stated that
“I am concerned about Valvoline prices. Dai Thang is currently selling for us with prices higher
than other imported Valvoline. Evidently, Sam Chem – imported Valvoline called for our
customers and sold with very low prices. Besides, unlike other competitions, Dai Thang does not
have sales promotion such Castrol, Mobil or Total.” (Mr. Nhuc, the biggest dealer, 35 years old)

Mr. Le Thanh Viet- ship owner also said that
“Currently, in Viet Nam market, there are many competitors that they are trying to approach our
current customers. Therefore, they can use any ways to access our customers by very low prices,
promotion program. Dai Thang should consider about this issue.” (Mr. Viet, dealer, 45 years old)

Basing on a deep-interview and theories below, there are outstanding aspects that lead to
dissatisfaction at internal policies leading to brand switching: high prices; competitive
market and ineffective promotions program.

2.3 Problem Definition
Competitors brand switching happens because of declining in brand loyalty and growing

acceptance of other brands. It leads to increases the consumer's willingness to try
alternative brands. To illustrate for this point, an interview with Mr. Nhuc:
“Other Valvoline importers sold to our market with very low-prices, I feel disappointed with Dai
Thang. I have been working with them for more than 10 years, but in the market, selling prices of
end-users are very low prices compared to our prices. It also lost Valvoline, Dai Thang and I have
been working and cooperating with very low-prices. I used to think that Valvoline and Dai Thang
are cheating me. Customers often choose Valvoline products with same products and quality and
transfer to buy other products”. (Mr. Nhuc, the biggest dealer, 35 years old)

Besides that, an interview with Mr. Hung, he concluded again that:

24

Figure 8. Updated cause effect map


“The market is very competitive. There are many brands entering to Viet Nam market. Kixx
gives many attractive sales promotion programs by various gifs for customers such as: set of
table, umbrella, set of glasses etc. while Dai Thang has limitation sales promotion program
for him With some benefits, some customers bought Kixx brand of Total brand.” (Mr. Hung,
dealer, 40 years old)

With the theory and interview with Mr. Nhuc and Mr. Hung above, when customers want
to switch to other products to use, it means that customers lost brand loyalty and can be
willing to accept to use other brands. In conclusion, from above measurement,
customers transfer to other brands because of high prices. Sam Chem sold to Mr
Nhuc‟s fishing customers with very low prices and created competition by “war
prices”. Next, the market is very competitive and many brands are entering to Viet
Nam market. Kixx also gives many attractive sales promotion programs by various
gifs for customers such as: set of table, set of glasses etc. while Dai Thang has

limitation sales promotion program. Therefore, high prices, market competition, sales
promotion program are the key reasons that lead to competitors brand switching.
2.4 Justify the existence of “Dissatisfaction at internal policies leading to brand
switching”
Coming back for further in-depth interview with Mr. Hoai- Sales Executive in Vung
Tau, Mr. Hoai confirmed competitors brand switching actually existed at Dai Thang.
An interview with Mr Hoai:
“The main problem of Dai Thang is competitors brand switching in Vung Tau market. Like
Mr Nhuc, Mr Hung case, sales volumes decreased seriously around more tha n 45% of
market. Due to some benefits, they bought other brands.” (Mr. Hoai, Sales Executive, 27
years old).

To double check again, author collected data of sales volumes from Sales Department
to prove that the problem does exist in the organization and provide comparable data
regarding the problem above of some key customers in Vung Tau: Mr.Nhuc, Mr. Vu
as below. Based on data below shown from Table 3, it can see clearly that sales
volume of Mr. Nhuc reduced seriously around 60%; while sales volume of Mr Vu
reduced around 48% in Table 4. To conclude this point, data collected from Sales
25