Enhancing the relationship between sales and marketing staffs a case of schneider electric vietnam

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

Pham Le Xuan Toan

Enhancing the relationship between
sales and marketing staffs: A case of
Schneider Electric Vietnam

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019


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

Pham Le Xuan Toan

Enhancing the relationship between
sales and marketing staffs: A case of
Schneider Electric Vietnam

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: ASSOC. PROF. DR NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2019

Contents
EXECUTIVE SUMMARY ....................................................................................................................5
ACKNOWLEDGEMENT .....................................................................................................................6
LIST OF TABLES .................................................................................................................................7
LIST OF FIGURES ...............................................................................................................................7
1. Introduction ........................................................................................................................................1
1.1 Company background ....................................................................................................................1
1.2 Industry Business’s structure & mission ........................................................................................2
2. Symptoms ............................................................................................................................................6
2.1 Low Voltage VSD Product line (IDVSD) and Vietnam market ....................................................6
2.2 The low growth rate of IDVSD sales in 2018 ................................................................................7
3. Problem analysis.................................................................................................................................8
3.1 Problem identification ....................................................................................................................8
3.1.1 Initial cause and effect map .....................................................................................................8
3.1.2 Potential problems ...................................................................................................................9
3.1.2.1 Lack of market intelligence information ..........................................................................9
3.1.2.2 Inter-channel conflict .......................................................................................................9
3.1.2.3 Poor marketing communications ................................................................................... 10
3.1.2.4 Poor relationship between salespeople of Industry Expert Distributor Sales Team and
marketing people of Pre-Sales & Marketing Support Team ..................................................... 11
3.1.3 Updated cause and affect map .............................................................................................. 12
3.1.4 Updated possible problems .................................................................................................. 14
3.1.4.1 Lack of market intelligence information ....................................................................... 14
3.1.4.2 Inter-channel conflict .................................................................................................... 15
3.1.4.3 Poor marketing communications ................................................................................... 16
3.1.4.4 Poor relationship between salespeople and marketing people ...................................... 17
3.2 Problem validation .......................................................................................................................18
4. Main problem definition and consequences ...................................................................................20
4.1 Main problem definition...............................................................................................................20

4.2 Main problem consequences ........................................................................................................20
5. Cause analysis ...................................................................................................................................21
5.1 Potential causes ............................................................................................................................21
5.1.1 Lack of discussion and sharing information between sales & marketing to support the
business ......................................................................................................................................... 21
5.1.2 Ineffective collaboration between sales & marketing to support customer .......................... 22
5.1.3 Conflict of interest between sales & marketing function to support each other ................... 23
5.2 Cause validation ...........................................................................................................................24


6. Alternative solutions ........................................................................................................................25
6.1 Alternative solution 1: Encouraging knowledge sharing between sales and marketing ..............25
6.2 Alternative solution 2: Creating an interactive information exchange system between sales &
marketing............................................................................................................................................27
6.3 Alternative solution 3: Re-training sales & marketing staffs to reduce competencies gap and redesigning job descriptions of sales & marketing and their KPIs to enhance high performance
business culture ..................................................................................................................................29
6.4. Solution justification ...................................................................................................................33
7. Change plan design ..........................................................................................................................35
7.1 Objectives .....................................................................................................................................35
7.2 Target outcomes ...........................................................................................................................35
7.3 Action plan implementation .........................................................................................................36
8. Conclusion .........................................................................................................................................38
9. Supporting information ...................................................................................................................39
9.1 Methodology ................................................................................................................................39
9.2 Interview guide.............................................................................................................................39
9.3 Transcript .....................................................................................................................................41
9.3.1 In-depth interview the first group ......................................................................................... 41
9.3.1.1 Interview 1.1.................................................................................................................. 41
9.3.1.2 Interview 1.2.................................................................................................................. 50
9.3.2 In-depth interview the second group .................................................................................... 54

9.3.2.1 Interview 2.1.................................................................................................................. 54
9.3.2.2 Interview 2.2.................................................................................................................. 59
9.3.3 In-depth interview the third group........................................................................................ 62
9.3.3.1 Interview 3.1.................................................................................................................. 62
9.3.3.2 Interview 3.2.................................................................................................................. 67
9.4 Qualitative research findings ........................................................................................................71
References .............................................................................................................................................74


EXECUTIVE SUMMARY
The purpose of this thesis is to explore the causes of poor relationship between sales
and marketing staffs of Industry Business team of Schneider Electric Vietnam that lead
to the low sales growth rate of its main product, Low Voltage Variable Speed Drives
(IDVSD), via its main distribution channel, Industry Expert Distributor (IED)
Channel, and that then consequence on the low performance of the business team in
2018.
The findings of this study reveal that ineffective collaboration between the Product
Manager of IDVSD (aka. the marketing people) and the Account Manager of the IED
channel (aka. the salespeople) tend to play a significant role that lead to their poor
relationship in this case. The findings are discussed in detail in the research along with
some recommendations for the Industry Business and the Management Board of
Schneider Electric Vietnam to enhance this relationship and improving the business
performance in both short-term and long-term vision.


ACKNOWLEDGEMENT
I would like to acknowledge all who supported me during my studies at International
School of Business –University of Economics Ho Chi Minh City (ISB), without whom
I wouldn’t be where I am today in finishing my Master of Business Administration
journey.

I would like to give my great appreciation to my Supervisor, Assoc. Prof. Dr. Nguyen
Thi Mai Trang, who has supported me during the time doing this thesis. Without her
continuously sympathy, guidance and support, my thesis cannot be completed
promptly on schedule.
I also would like to show may gratitude to my colleagues at work, my partner’s
customers and my classmates at ISB for their feedback and contribution for this thesis.
I also send my sincere thankfulness to my parents and especially to my wife for their
support and encouragement.


LIST OF TABLES
Table 1.

Industrial automation and drives in Vietnam – Market shared and CAGRs
analysis 2018

Table 2.

Industry Business - Sales growth rate by product lines 2017 – 2018

Table 3.

Costs for alternative solution 1

Table 4.

Costs for alternative solution 2

Table 5.

Costs for alternative solution 3 – Action 1

Table 6.

Costs for alternative solution 3 – Action 2

Table 7.

Costs for best solution

Table 8.

Action plan

LIST OF FIGURES
Figure 1.

Industry Business’s products and solutions in Vietnam by product lines

Figure 2.

Industry Business’s Organization Chart 2018

Figure 3.

Industry Business - Sales contribution (%) by product line 2018

Figure 4.

Industry Business - Sales of Low Voltage VSD by channel 2017 – 2018

Figure 5.

Primary Cause-and-Effect tree


1

1. Introduction
1.1 Company background
Schneider Electric (SE) is the global specialist in energy management and automation.
With revenues of around €25 billion in fiscal year 2018, its 170,000 employees serve
customers in over 100 countries, help the customers to manage their energy and
process in ways that are safe, reliable, efficient, productive and green. From the
simplest of switches to complex operational systems, their technology, software and
services improve the way their customers manage and automate their operation. SE
offers integrated solutions across multiple market segments in Non-residential &
Residential Building, Industrial & Machines Manufacturers, Utilities & Infrastructure
and Data Centers & Networks. Its connected technologies reshape industries,
transform cities and enrich lives. (1)
SE sells products and solutions through 4 main Business Units in Vietnam (2):
-

Building & Partner Business, provided Low Voltage products, systems and
solutions, is ranking number one Worldwide in Low Voltage and Building
Automation.

-

IT (Information Technology) Business, provided Critical Power products and

solutions, is ranking number one Worldwide in Critical Power and Cooling.

-

Industry Business, provided industrial automation & drives products and
solutions, is ranking number two Worldwide in industrial automation and
control.

-

Energy Business, provided Medium Voltage products and solutions, is raking
number one Worldwide in Grid Automation and Medium Voltage.

SE has been operating in Vietnam since the 1990s, starting with the Vietnam’s 500 kV
North – South Transmission Project in 1991 – 1993 and then opened its first
representative office in Ho Chi Minh City in 1994. Today SE Vietnam has 2 factories
in Dong Nai Province and 3 offices in Ho Chi Minh City, Da Nang and Ha Noi. The
company employs more than 1000 employees and works closely with more than 500
partners in Vietnam. (2)


2

After 20 years doing business in Vietnam, SE has achieved its remarkable
performance record in 2017 with double-digits growth of all its business units in the
country and become the top growing entity in the entire region (Asia-Pacific & Japan).
(3)
1.2 Industry Business’s structure & mission
Vietnam’s industrial automation and drives is an attractive market. The market’s
revenue was 91 million € in 2017 and the compound annual growth rate (CAGR) was

8% year on year. In recent year, as Table 1 below, SE’s products and solutions in this
market have been accounted for just 5% market share with the CAGR is 12% in recent
year. The main competitors of SE in the market are ABB, Siemens, and Rockwell.
Their market shares were 12%, 9%, and 4% consecutively. And their CAGRs were
9%, 3% and 15% consecutively, as showed in Table 1 below:
Company

Market Share (%)

CAGR (%)

ABB

12%

9%

Siemens AG

9%

3%

Schneider Electric

5%

12%

Rockwell Automation

4%

15%

Table 1. Industrial automation and drives in Vietnam – Market shared and CAGRs
analysis 2018 (Source: SE’s internal report 2019)
Via Industry Business, Schneider Electric Vietnam offers a wide range of industrial
automation and drives products and solutions, as detail in Figure 1 below, for the
automation and control of machines, manufacturing plants and industrial sites in
Vietnam. It includes hardware, such as motion controllers (IDMOT), low-voltage
variable speed drives (IDVSD), human-machines interface (IDHMI) operator panels,
programable logic controllers (IDPAC and IDSAF), push buttons and signaling
devices (IDSIG) and discrete sensors (IDSEN), as well as software for operations
management and supervisory control systems. (2)
Low Voltage VSD (IDVSD) is the main product line of Industry Business in Vietnam.
The product sales have accounted for more than 60% of business revenue with the
growth rate is normally 25-30% year on year. (Source: SE’s internal report 2019)


3

IDVSD – Low
Voltage Variable
Speed Drive

IDPAC – Process
Automation Control

IDSAF – OEM

Safety &
Controller

IDSIG – Control &
Signaling
IDSEN –
Sensors

IDHMI – Human
Machine Interface

IDMOT – Motion
Control

Figure 1. Industry Business products and solutions in Vietnam by product lines
(Sources: SE’s Company Profile 2018)
In 2018 Industry Business in Vietnam was structured, as Figure 2 below, into three
sales teams (Industry Expert Distributor Sales Team, OEM & Medium Distributor
Sales Team, and System Integrator & End-User Sales Team) and one Pre-sales &
Marketing Support Team that help to support its five main customer types (aka. Sales
Channel) in Vietnam market that are (1) Industry Expert Distributor customers; (2)
Original Machine Manufacturer (OEM) customers; (3) Medium Distributor customers;
(4) System Integrator customers; and (5) End-User customers.
Industry Expert Distributor (IED) channel is the main transactional sales channel of
Industry Business in Vietnam. This channel contributes to around 60% of the business
revenue with the sales growth rate normally 15-20% year on year. (Source: SE’s
Internal report 2019). The IED channel is managed by the Industry Expert Distributor
Sales Team that currently have 4 salespeople (aka. Account Manager) and 1 Sales
Manager that take care of around 16 official partners for doing the business in overall
Vietnam market.

4

Industry Business
Sales Director

Business Admin

Pre-sales &
Marketing
Support Team

OEM & Medium
Distributor Sales
Team

Industry Expert
Distributor
Sales Team

System Integrator &
End-User Sales
Team

Figure 2. Industry Business Organization Chart 2018 (Source: SE’s internal report
2019)
And the Pre-sales & Marketing Support Team is being responsible for supporting all
three sales teams in terms of (1) technical support via two Product Application
Engineers (one dedicated for IDVSD product line, and one dedicated for the rest

product lines); (2) marketing support via two Product Managers (one dedicated for
IDVSD product line, and one dedicated for the rest product lines). The team was
managed by a Pre-sales & Marketing Support Manager, who do coordinate his team
with other sales team to support their daily business and consult/ support the Sales
Director and the Sales Manager of each sales team in terms of achieving both the
short-term and the long-term business ambitions of Industry Business in Vietnam
market.
According to SE’s internal report and the business plan of Industry Business in 2018,
despite of the excellent double-digits growth in 2017, the Sales Director of Industry
Business and the Management Board of Schneider Electric Vietnam have not satisfied
with the current performance of Industry Business in Vietnam market. The reports
show that Industry Business has normally contributed to around 22% of SE’s revenue
all around the world, but in Vietnam it has just accounted for 10% currently, so there
will be a lot of potential areas for developing Industry Business in the very attractive
Vietnam’s industrial automation and drives market today. And the Industry Business’s


5

Sales Director has defined a five-year business plan from the beginning of 2018 to
help the business team double its contribution for Schneider Electric Vietnam by 2022.
One-year after implementing that business plan, the sales’ growth rate of Industry
Business was just nearly a half of the previous year achievement. The growth rate in
2018 was also 1% behind the worst scenario’s target that set for Industry Business
from beginning of the year by the company and so that the result also too far away
from its’ ambitions. (Sources: SE’s Internal Report 2019)
According to the internal report of Industry Business in 2019, as Table 2 below, there
are strong positive correlation between the sales growth rate of low Voltage VSD
product (IDVSD, the team’s main products offer) with sales the growth rate of the
business in the period of 2017 and 2018.

Year
Sales Growth rate by Product Lines

2017

2018

IDHMI - Human Machine Interface

44%

206%

IDMOT - Motion Control

586%

-77%

IDPAC - Process Automation Control

66%

-30%

IDSAF - OEM Safety & Controllers

-7%

84%

IDSEN - Sensors

31%

8%

IDSIG - Control & Signaling

-14%

14%

IDVSD - Variable Speed Drives

26%

15%

27%

14%

Total Sales Growth Rate

Table 2. Industry Business – Sales Growth rate by Product lines 2017 – 2018 (Source:
SE’s internal report 2019)
And as stated in this internal report of Industry Business in 2019, IDVSD is the main
distribution product of the sales team and represent to the sustainable growth of
Industry Business. Other product lines, which just accounted for 20% to 30% of the

Business, are mainly sold in project mode via the OEM and SI & EU channel. So that,
the positive or negative growth of these product lines has just reflected the business
strategy in short-term or in some certain period of times to secure the business’ key
projects and customers.


6

Why couldn’t Industry Business achieve its growth target in 2018? What were the
potential causes of reducing in sales growth rate of its main product line, IDVSD?
Which channel has been impacted the most in this low sales growth rate of IDVSD?
And how to help Industry Business solve these issues if any to improve the business’
performance and achieve its mission to double the business contribution in Vietnam by
2022? These questions have been raised among sales and marketing members, and the
researcher have been investigated in detail with all the involved stakeholders to get the
right answers and propose the practical solutions for the Industry Business team of
Schneider Electric Vietnam.
2. Symptoms
2.1 Low Voltage VSD Product line (IDVSD) and Vietnam market
Saidur et al.4 described a variable speed drive (VSD) as a device that regulates the
speed and rotational force, or output torque of mechanical equipment. And some
applications of mechanical equipment that incorporate with VSD technology are
pumps, fans, compressors and conveyors. Because many types of equipment currently
in use are running inefficiently, manufacturers are introducing VSD’s technologies to
save the losses of these mechanical equipment. VSD helps to increases efficiency by
allowing electrical motor to be operated at the ideal speed for every load condition. In
many applications VSD reduces motor electricity consumption by 30–60%.
According to the recent report of Market Research Future 5 there are some factors
which drive the growth of VSD Market are (1) the increase in urbanization and
industrialization in developing countries; (2) increasing need for efficient utilization of

energy; (3) increasing activities in construction, power transmission; and (4) reduction
in the production cost of VSD product. And Asia-Pacific region is expected to witness
the highest market share during their forecast period because this region has the largest
market for infrastructure and industrial sectors. Industries such as oil & gas, metals,
and mining are adopted the drives’ technologies in order to help them reducing the
energy consumption and to limit the CO2 emission. All these factors will lead to
increase in the growth of the VSD market in the region.


7

About VSD market in Vietnam, the Product Available Market (PAM) is around 49
million €, included optimum, medium and minimum product categories. The
accessible market for SE’s VSD is around 38 million € (optimum & medium), but its
market shared today is just 6.2% – 6.3%, and as shared by Ms. Thuy, the Product
Manager of IDVSD, in the interview about the attractiveness of Vietnam market for
SE’s Industry Business, that:
The market growth is just 10%. But the problem is our market share is very small. So when our
management team look at the PAM of the market and the number that we are delivering today
they question us a lots about how to increase our market share… (A-2.5)

2.2 The low growth rate of IDVSD sales in 2018
As record showed in Figure 3 below, in 2018 the sales of IDVSD have accounted for
66-67% of Industry Business’ revenue but it’s growth rate, as demonstrated in Table 2
above, is just 15% across all channels.
5.59%

0.35%

6.21%

6.25%

6.42%
8.36%
66.81%

IDVSD - Low Voltage
Variable Speed Drives
IDPAC - Process
Automation Control
IDSAF - OEM Safety
& Controllers
IDHMI - Human
Machine Interface
IDSIG - Control &
Signaling
IDSEN - Sensors
IDMOT - Motion
Control

Figure 3. Industry Business sales contribution (%) by product line 2018 (Source: SE’s
Internal report 2019)
IDVSD was sold in Vietnam mainly through Industry Expert Distributor (IED)
channel, as showed in Figure 4 below, which contributed for 73% of the product
revenue in 2017. But in 2018 the channel has just accounted for 65% of the product
revenue and the growth rate of this channel in terms of IDVSD product was just 2%
compared with 30% in 2017. (Source: SE’s Internal report 2019)


8

2017
16%

2018

11%

14%

8%

13%

65%

73%

Industry Expert Distributor

Industry Expert Distributor

OEM

OEM

System Integrator

System Integrator

Medium Distributor

Medium Distributor

Figure 4. Industry Business Sales of Low Voltage VSD by channel 2017 – 2018
(Source: SE’s Internal report 2019)
3. Problem analysis
3.1 Problem identification
3.1.1 Initial cause and effect map
It is important to figure out the reasons for the low growth rate of Low Voltage VSD
(IDVSD) sales through Industry Expert Distributor (IED) channel and its
consequences.
After interviewing and collecting a lot of quality feedback from the marketing team
(aka. Pre-sales & Marketing Support Team, represented by Product Manager of
IDVSD and the team Manager, as marketing people), the sales team (aka. Industry
Expert Distributor Sales Team, represented by Account Managers, as salespeople that
managed IED partner customers), and the IED partner customers (Sales Director of
some IEDs that have working closely with Schneider Electric Vietnam in many years),
there are some key reasons leading to low growth rate of IDVSD via IED channel
include (1) lack of market intelligence information; (2) conflict between inter-channel
especially the new Medium Distributor channel, (3) poor marketing communication
from sales and marketing team to customers; and (4) poor relationship between sales
and marketing in terms of supporting and protecting the channel/ customer.


9

3.1.2 Potential problems
3.1.2.1 Lack of market intelligence information
Lack of market information about what competitors offers in the market, who are their

main end-customers of IDVSD product, etc. now are always the concern of the
Product Manager of IDVSD, Ms. Thuy suggest that:
I need the support from the sales team to approach the big distributors of competitors and get as
much as possible information about their business for me. I want to know what VSD brand they
are selling, how much VSD they can sell per year, which brand they sell most, which product
range they are selling most, how much is their stock, which is their main market segment, how is
their project business last year, …(A-6)

The lack of market information is also due to lack of relationship of the product
manager with their current partner customers, as she has answered, when being asking
why she didn’t go direct to the current IED partners who also sell the competitor’s
products to get more information about current competitor’s offer and support:
I don’t have time to do this, and I also not meet them frequently enough to have the relationship
like the salesman in-charged of this account to ask for these sensitives information…(A-6.4)

The lack of market information from the distribution network and the market to define
the right support for the sales team and the distributors also the big concern of the PreSales & Marketing Support Manager, Mr. Vinh, as he has shared the current situation
of selling IDVSD to the IED as below:
… what are we doing now is just distribute the product to our distributor partner, and let they do
whatever they want to offer these products to the market. So, we cannot control the end-market
customer, we don’t know where or who our products have been sold to…(A-4)

3.1.2.2 Inter-channel conflict
According to Mr. Loc, the Sales Director of A&E Engineering, the biggest IED partner
of Industry Business, about the new established distribution channel, Medium
Distributor, that focus on Medium range of IDVSD product, aka. the new product line
ATV310 and ATV610, that this strategy of SE not only effect the IDVSD business of
A&E, but also effect all other product that currently A&E distribute for SE as:

10
… I feel not fair for current distribution partner of SE like A&E, who have been working with SE
for a long time, maybe SE want to build up a new channel to expand the market but the new
channel also make a lot of effect in A&E business…(A-3)

Mr. Vinh, the Sales Director of Thien Son Technology, whom experience more than
15 years in selling SE’s IDVSD in Vietnam market, share the same insights about the
difficulties of his company in selling the Optimum VSD today, due to Medium product
and the way the Medium Distributor dumping in the market and also the tight
competition among IED distributors:
The competition is very aggressive, I’ve just said about the competition among SE’s distributor
only. But I don’t want to tell you in detail who do what, because maybe you can know! (A-5)

3.1.2.3 Poor marketing communications
Mr. Loc, the Sales Director of A&E Engineering, shared his opinion about current
sales of the Optimum VSD that it has been decreased due to the brand image of all
SE’s VSD was damaged by the way the new Medium Distributor do in the market
when offering the Medium VSD to their customer, it makes the end-customer think
that all SE’s IDVSD brand now positioning as Medium product like LS or Mitsubishi.
This situation was also recognized by the IDVSD’s Product Manager, Ms. Thuy, when
talking about the current situation of Medium VSD and Medium Distributor channel:
In my opinion, the growth of medium product not like what we have planned when launching
these products. Maybe because, first a part of that growth is being getting from our optimum
product. Second the medium distributor when they signed the contract, they commit to reduce the
sales of LS products to sales more our medium product. But in the reality, their sales of LS
product did not decrease…(A-2.7)

Mr. Vinh, the Sales Director of Thien Son Technology, also complaints that the
IDVSD’s marketing team did not supporting him strongly when he feedbacks about
the intensively competing of Mitsubishi and INVT currently in terms of their very

low-price offer. He has just got the answer that SE cannot compete in these cases
because for Mitsubishi, the current low-price is just occasionally due to some internal
competing in their current distribution partners, and for INVT they are offering the
Minimum product that SE don’t have the same offer to compete. He suggests that the
marketing team of SE should work closely with sales team to supporting him in these


11

case, if not SE will lose market share to these competitors soon. The situation has been
raised to the Pre-sales & Marketing Support Manager, Mr. Vinh, and the researcher
got the same answer as the Product Manager of IDVSD about current product
positioning of SE and an open leaving message about the upcoming strategy:
INVT is offering the minimum product that we don’t have the same offers to compete… but their
yearly sales around 4-5 million € is very big…

There are also some problems about communication in terms of positioning the
product offer in the market, that make the Industry Expert Distributor (Optimum VSD
Distributor) difficult to influence their customer to continues to buy the Optimum
product they currently sell, as Mr. Vinh, Sales Director of Thien Son Technology
sharing:
The same product line (IDVSD), the same brand name (SE) but the price gap is so big between
Optimum and Medium so that it’s difficult for distributor like us, who focus on Optimum
product. For VSD in Vietnam market today, for pump & fan application, if customer use ATV610
with 1 level of power higher than ATV630 range, the price is also better, why they choose the
ATV630 one? They are all SE’s product! (A-1)

3.1.2.4 Poor relationship between salespeople of Industry Expert Distributor
Sales Team and marketing people of Pre-Sales & Marketing Support Team
As concerned from Mr. Tram, Account Manager of IED Sales Team, about the

marketing team when asking about support needed from colleagues to help him sell
more IDVSD:
I still concern about our marketing team capabilities! Do they know the competitors’ distributors
or not? Do they know the competitors’ price and commercial policies or not? I really need this
support information from marketing instead of ask me to go to the customer site and ask them for
these information before supporting them for their request. (A-6)

And the feedback from marketing team about their need from sales people for the
same question above help the researcher gets some insights about the relationship
between them, as Mr. Vinh, the Pre-sales & Marketing Support Manager, stated that:
We need to work as closely as possible. Salespeople had to feedback the real information about
customer need or demand, so that we can try out best to support… If salespeople did not provide


12
the real information or try to hide somethings behind, how can we justify this unreal information
and escalate it to higher level for approval if needed. (A-6)

The same message from the IED about the current problem of the relationship between
sales and marketing team to support customer better as observed from Mr. Vinh, Sales
Director of Thien Son Technology, is that:
Marketing team need to work closely with their sales people to know what actually the market
today to have the best support for us. Because we (I and the Account Manager) are the one who
compete with competitor in the market and our feedback are always seriously…

But the Product Manager of IDVSD, Ms. Thuy, always confident about the
commercial policy for the IED Channel today as she has mentioned:
Currently, in Q2, A&E and Thien Son have achieved the target. Basically, the target setting for
our distributor is not high, but because the financial capacity of some distributors is not strong
enough… for example… If Hop Long or Han My Viet can distribute the optimum products they

can achieve the target easily! (A-3.3)

In her opinion, in the current partner network there are just some partners (the IED)
that have strong financial capabilities to get benefits from the commercial policy of
IED channel, so that she proposed the strategy to attack the big distributors of
competitors instead of developing the new policy that fit to the current IED’s partners
profile:
Yes, we just focus on analyzing the distributor who sell the most for the competitor and the
official distributor of competitor, etc., because when they are the official distributor they have the
good offers from the competitors and it also better when they buy much from these competitors.
Maybe we cannot convert 100% what they buy from competitor in to us from the first time, but
we can increase our share of wallet in them to 20-30% and decrease the competitor share of
wallet. (A-2.12)

3.1.3 Updated cause and affect map
From the result of in-depth interviews of six respondents together with literature
review on growth, sales and marketing interface, and knowledge sharing, etc., the
primary cause-and-effect tree has been developed as Figure 5 below:


Lack of
discussion
and sharing
information

Poor Marketing
Communication

Lack of Market
Intelligence

information

Competitor’s
Customer
business profile

End-market
customer &
demand

Poor marketing
guidelines for
customers from
Sales/Marketing

Poor feedback from
Sales & Customer
about marketing
program results

Figure 5. Primary Cause-and-Effect Tree (Author Synthesis)

Poor Relationship
between Sales &
Marketing

Sales & Marketing
function conflict of
interest

Not effective in
collaboration to
support customer

Conflict between
big and small
Industry Expert
Distributor

Conflict with New
Medium
Distributor Channel

Inter-channel conflict

Competitors
offer &
support

Low growth rate
of LV-VSD via
Industry Expert
Distributor
Channel

Lack of product
updating and
positioning
information

Low
employee
engagement

Low
growth
rate of
sales team

Lost market
share

13


14

From the Cause and Effect Map, four problems that lead to the low growth rate of
IDVSD via IED channel are defined (1) lack of market intelligence information, for
the right positioning of IDVSD products and competing with competitors in Vietnam
market; (2) inter-channel conflict, especially the competition between traditional IED
channel and the new “Medium Distributor” channel, that lead to more internal
competitive in selling Schneider Electric’s IDVSD products among these channel
partners, (3) poor marketing communication from sales and marketing team to end
customers and channel partners, to support the IEDs to sell the right IDVSD products
that meet the end customer need and budget; (4) poor relationship between sales and
marketing in terms of supporting and protecting the channel and their end customers,
to support the IED partners the right thing (Price, Pre-Sales/ After-Sales support,
Demand Creation/ Demand Generation activities, etc.,) in the right time (to close the
deal) to sell more Schneider Electric’s IDVSD confidently.

Theories in industrial marketing and management related to these topics have been
searched to help researcher updating and validating these problems, their
consequences and their causes in the next chapter.
3.1.4 Updated possible problems
3.1.4.1 Lack of market intelligence information
Market intelligence as defined by Tsu et al. 18 is a process of knowing what the
competitors are up to and staying one step ahead of them, by gathering actionable
information about the competitors and ideally, applying it to short and long-term
strategic planning.
The need for information related to competitors’ offers to define the best policies to
support the distributor, always the concern of Ms. Thuy, the Product Manager of
IDVSD, as she has requested sales to provide that information back to marketing:
I really want to know what these competitors have offered in terms of commercial policy, is there
any change in their price structure, do they have discount by quantity of ordering, do they have
any new promotion program, etc., I need the help from our sales force to get more information to
develop new commercial policies for next year and acquire more competitors’ distributors. (A5.3)


15

But that request from marketing also make sales concern about marketing capabilities
to support customer by leveraging their own market and customer knowledge, as Mr.
Trung, the Account Manager of IED Sales Team, feedback about his support needed
from marketing team to help him sell more VSD in Vietnam market, that is:
I need more update information from marketing about product and market to support my
customer better, currently I have always been asked to provide the information back to marketing,
so I just shared what I have. But in my opinion, marketing should have more information than
sales to support us! (A-6)

From these above data and theories, researcher can conclude that the lack of market

intelligence information, for the right positioning of IDVSD products and competing
with its competitors in Vietnam market is one of the possible problems of Industry
Business of Schneider Electric Vietnam, especially the problem of marketing team.
3.1.4.2 Inter-channel conflict
Channel conflict is defined by Stern et al.17 as a situation in which one channel
member perceives another channel member(s) to be engaged in behavior that prevents
or impedes it from achieving its goals. And the primary causes of channel conflict are
identified by Webb14 as competition over scarce resources, drives for the autonomy,
and divergence of subunit goals. And the sociological view of conflict contends that it
is of concern to the organization only in so far as it has implication for performance.
From the interviews, the competition in distribution Schneider Electric’s IDVSD as
viewed by the sales team, represented by Mr. Tram, the Account Manager of IED
Sales Team, is also de-valued the Schneider Electric’s brand name in the market, when
he has been asked about his opinion in the competition of distribution of VSD today:
Internally we also have competition among the same kind of distributors (among Optimum
Distributor), and also between different kind of distributors (Optimum Distributor vs. Medium
Distributor). And in some case this competition effecting our brand image! (A-5)

The internal competition among the Industry Expert Distributor in distribution VSD
product also been defined by Mr. Vinh, the Pre-sales and Marketing Support Manager
for the same interviewed question.


16

So the inter-channel conflict, especially more competition between traditional IED
channel and the new “Medium Distributor” channel beside the historical competition
among these IED distributor themselves that has led to more internal competition in
selling Schneider Electric’s IDVSD products in Vietnam market was also confirmed in
this case.

3.1.4.3 Poor marketing communications
An organization that possesses marketing communication capabilities can create
successful communication programs and ensure long-term market performance. There
is a positive impact between possessing strong marketing communication capabilities
and organizational performance. Jerman et al.19, in their study about model of
marketing communications effectiveness in the B2B markets, beside confirming the
positive relationship between marketing communication effectiveness and business
performance, have concluded that marketing communication objectives, bidirectional
communication and communication channels do have the major impact or positive
impact on marketing communication effectiveness.
Beside poor marketing communication, as observed by the distributor partners in
discussion section 3.1.2.3 above, in terms of product positioning and how to offer
suitable product to specific customer need, there is also the poor marketing
communication in terms of marketing objectives between marketing and sales for
some program that the marketing team need sales to do more to get the right
information from the distribution channel to support the channel better, as observed by
the Pre-sales and Marketing Support Manager, Mr. Vinh, when being asked what help
him to sell more IDVSD into the market:
… but sometimes our salespeople don’t know why have we proposed these program, they’ve just
claimed that we’ve force them to do this, to do that, etc., … but they don’t know that these
program will help them working closely with their managed partners and know who or where
their partner actually sell our product to and get more information about the end-market customer
need or demand to support our partner better… (A-4)

But the from the view of sales team, the request information from marketing team are
sensitive and from sales’ opinion, the IED partners are not willing to share, as


17

feedback from Mr. Tram, the Account Manager of IED Sales Team, when asking
about the willingness of distributor customers in sharing their business information in
terms of market, their end-customers, etc., for getting better support from Schneider
Electric that:
I don’t think my distributor willing to share this sensitive business information! They’ve just want
to ask special discount for some specific range to buy. If we can meet their request they will
stock! (A-2.9)

Poor marketing communications from sales and marketing team to end customers and
channel partners, to support the IED partners to sell the right IDVSD products that
meet the end customer need and their budget and also the poor marketing
communications in terms of marketing objectives, two-way communication and
feedback between sales and marketing about marketing program effectiveness were
possible problem of the sales team in this business case.
3.1.4.4 Poor relationship between salespeople and marketing people
Cespedes6 stated that the marketing efforts in most industrial firms encompass three
groups: product management, sales and customer service units and managers just tend
to manage effectively within each unit but not to coordinating across the units. And
the study of Meunier et al.7 found that there is strong support for the hypothesis that
collaboration between sales and marketing has positive impact on business
performance.
When being asked to share opinion about the current relationship between his
marketing team and sales team, Mr. Vinh, the Pre-sales and Marketing Support
Manager has straightforwardly shared that:
Generally, the collaboration is not effective. We are not working together for the same target… I
think we should work together… not to deal with each other…

The current poor relationship between sales and marketing of Industry Business, may
hasn’t defined in detail by the sales team but it’s presence can be observed via insights
from the answers of the salespeople in the interviews, such as Mr. Trung, the Account

Manager of IED Sales Team, has mentioned about his best proof to get deeper price
support from the marketing team is the feedback about the loss of projects or


18

customer’s purchase orders (A-4.1) if marketing team has not provided the right
support. This is an abnormal practice in sustainable business where sales and
marketing had to secure the business together. Mr. Trung has just concluded the
current problem between sales and marketing are some “difficulties” that he has
escalated to his manager to solve the “difficulties” related to marketing team, as:
I know there are some difficulties, but I don’t define. I try to solve it by myself if any, and raise
the support to my sales manager if the difficulty need to be deal with marketing to be solved! (A4.4)

And there is an open request for the better relationship between sales and marketing
from Mr. Tram, the Account Manager of IED Sales Team, that cooperate with
marketing to get market information together will help them confidently working and
support their customer better and selling more VSD in Vietnam market:
Yes. I also request our marketing team to go direct to customer site with me and study the market,
to know what currently happen in the market to define the practice program to support our
customer. (A-6.1)

From the interview and theories, researcher could confirm that there is the poor
relationship between sales and marketing staffs of Industry Business in terms of
supporting and protecting the channel and their end customers, to support the IED
partners the right thing (Price, Pre-Sales/ After-Sales support, Demand Creation/
Demand Generation activities, etc.,) in the right time (to close the deal) to sell more
Schneider Electric’s IDVSD confidently.
3.2 Problem validation
Base on the cause-and-effect tree, in-depth interview from 6 respondents divided into

3 main groups (see Interview guides), secondary data from Industry Business
department, and theories in industrial marketing in terms of collaboration and
interaction between sales and marketing in industrial firms, especially in hightechnology firms, the researcher found that the current poor relationship between sales
and marketing staffs of SE’s Industry Business is the main cause of the problem that
need to be solved immediately.