Improving performance of long term dealers a study of sông vàm rice company

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

PHAN DUY HIỂN

IMPROVING PERFORMANCE OF
LONG-TERM DEALERS:
A STUDY OF SÔNG VÀM RICE
COMPANY
MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2020


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

PHAN DUY HIỂN

IMPROVING PERFORMANCE OF
LONG-TERM DEALERS:
A STUDY OF SÔNG VÀM RICE
COMPANY
MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr. NGUYỄN THỊ MAI TRANG

Ho Chi Minh City – Year 2020

Table of Contents
Executive Summary................................................................................................................. 1
Acknowledgements .................................................................................................................. 2
LIST OF TABLES ................................................................................................................... 3
LIST OF FIGURES ................................................................................................................. 4
1.INTRODUCTION ................................................................................................................ 5
1.1 Sông Vàm Rice company .............................................................................................. 5
1.2 Organizational structure of Sông Vàm Rice ............................................................... 7
1.3 Mission of Sông Vàm Rice ............................................................................................ 9
1.4 Vision of Sông Vàm Rice ............................................................................................... 9
2. Problem context ................................................................................................................. 10
2.1 Vietnamese rice industry............................................................................................. 10
2.2 Analyzing the competitors of Sông Vàm Rice ........................................................... 11
2.3 Customer segment of Sông Vàm Rice. ....................................................................... 14
3. Symptom of Sông Vàm Rice. ............................................................................................ 14
4. Problem identification. ...................................................................................................... 17
4.1 Possible problem 1: Slow in finding new dealers. .................................................... 18
4.2 Possible problem 2: Underperformance of long-term dealers. ............................... 19
4.3 Possible problem 3: Some dealers stopped cooperation with Sông Vàm Rice by
low sales revenues & profits. ............................................................................................ 22
5. Identifying main problem. ................................................................................................ 24
6. Problem justification. ........................................................................................................ 25
7. Exploration of causes......................................................................................................... 28
7.1 Lack of a trade marketing plan. ................................................................................. 28
7.2 Incentive policy is not enough to boost motivation of dealers. ................................ 30
7.3 Inefficient training programs for dealers. ................................................................. 31
7.4 Lack of modern technology and software to manage performance of sales team
and dealers.......................................................................................................................... 32
7.5 Identifying main cause. ............................................................................................... 32

8. Alternative solution. .......................................................................................................... 35
8.1 Alternative solution 1: Cooperating with a marketing agency................................ 36
8.2 Alternative solution 2: Recruiting a trade marketing manager. ............................. 39
8.3 Alternative solution 3: Designing an effective trade marketing package for dealers
by using current resources of sales and marketing department. .................................. 44
8.4 Choosing the most suitable solution for Sông Vàm Rice ......................................... 48
9. Action plan of organization .............................................................................................. 52


10. Conclusion ........................................................................................................................ 56
11. Supporting information .................................................................................................. 57
APPENDIX......................................................................................................................... 61
References........................................................................................................................... 75


Executive Summary
Sông Vàm Rice is a company working in the rice industry. It was established in 2016, the main
business of the company is providing hygiene and speciality rice (products without pesticide
residuals) for customers in Ho Chi Minh city. The company developed its distribution channel
with the strategy: Focusing on cooperating with dealers. However, the actual performance of
dealers channel in 2019 was lower than the target of CEO. This affected sales revenues, profits
and relationships between Sông Vàm Rice and its dealers. This study used secondary data,
primary data of the company to explore the main problem it is facing: “ Underperformance
of long-term dealers”. In which, the root cause was identified that the company lacked of a
trade marketing plan to support long-term dealers. Therefore, we proposed three alternative
solutions to deal with the main problem by using qualitative research and quantitative research.
These solutions could help the company improving performance of long-term dealers and build
a sustainable relationship with them.

1

Acknowledgements
I would like to say thank you very much to Dr. Nguyen Thi Mai Trang. She is a dedicated
teacher. Without her encouragements and guidance, I couldn’t complete the THESIS well. It
was a pleasure for me to be your student in MBA class. Besides that, I would like to send my
appreciation to other lecturers in ISB who taught me valuable knowledge and lessons in the
course.
I would like to say thank you my family: parents, my younger brother, my aunts and especially
my wife who supporting me during MBA course.

2


LIST OF TABLES
Table 1: Value proposition evaluation between Sông Vàm Rice and other competitors.
Table 2: Competitive strength assessment between Sông Vàm Rice and other competitors.
Table 3: Comparing actual performance against target of CEO in 2018 and 2019.
Table 4: Performance of 3 types of dealers and sales target of CEO in 2019.
Table 5: Reasons to stop cooperation of dealers.
Table 6: Effectiveness of marketing activities to support a dealer in Binh Thanh district in
2019.
Table 7: Incentive policy for dealers of Sông Vàm Rice.
Table 8: Costs & benefits of solution 1.
Table 9: Costs & benefits of solution 2.
Table 10: 9 trade marketing packages were created by Orthogonal Design in SPSS.
Table 11: Part-Worth scaling (Utility) for each factor level.
Table 12: Relative importance of each attribute.
Table 13: Costs and benefits of solution 3.
Table 14: Action plan of Sông Vàm Rice.

Table 15: Secondary data collection.
Table 16: Primary data collection.

3


LIST OF FIGURES
Figure 1: Organizational structure of Sông Vàm Rice.
Figure 2: Sales & marketing department of Sông Vàm Rice in Ho Chi Minh city.
Figure 3: Strategic group mapping.
Figure 4: Average sales quantity/channel/month of Sông Vàm Rice from 2017 to 2019.
Figure 5: Proportion of each channel in average total sales quantity/month of Sông Vàm Rice
in 2019.
Figure 6: Comparing average actual performance/month against average target
performance/month of CEO for dealers channel in 2017, 2018 and 2019.
Figure 7: A diagram of symptom and possible problems of Sông Vàm Rice.
Figure 8: Value chain of Sông Vàm Rice.
Figure 9: A model of key factors affecting relationship satisfaction.
Figure 10: Final cause-effect map of Sông Vàm Rice.
Figure 11: Trade marketing model.
Figure 12: New structure of sales and marketing department after recruiting a trade marketing
manager.
Figure 13: Trade Marketing Planning Framework.

4


1.INTRODUCTION
1.1 Sông Vàm Rice company
Sông Vàm Rice was established in 2016 with the purpose of business is bringing

hygienic rice for customer’s family. The main business of Sông Vàm Rice is producing,
manufacturing and distributing hygienic and speciality rice. Main market of Sông Vàm
Rice concentrated on big cities in Vietnam such as Ho Chi Minh city, Ha Noi and Da Nang.
Initially, the company developed distribution channels in Ho Chi Minh city. Beside that, It
had built two rice stores, one in Long An province and one in Ho Chi Minh city since 2017
to introduce and display the products to the customers. The factory of Sông Vàm Rice is
located in Tan Tru district, Long An province.
In the value chain of Sông Vàm Rice, high quality of materials is one of the most
important factor affecting the success of business. This could help the company producing
high quality rice (rice with purity, color, fragrance and degree of stickiness) and guarantee
the hygiene of the product for the customers ( rice without pesticide residuals). Therefore,
the company put many efforts to establish a sustainable relationship with farmers in Long
An province and Mekong Delta to grow hygienic rice in these areas. Agriculture engineers
of the company will consult the efficient process to grow rice for the farmers and supervise
activities during harvest. The company will sign long-term contract with leaders of
cooperative farmers groups to buy all paddy when harvest comes, usually the price offered
by Sông Vàm Rice for farmers was higher than the price of the market from 500,000
VND/ton. This would help the farmers gaining more sustainable benefits. Meanwhile, Sông
Vàm Rice has a good source of materials to produce high quality rice without pesticide
residuals. It is a competitive advanatage for the company when comparing with other rivals
in the market. In the business model of Sông Vàm Rice, the company is not the first-mover
in rice brand industry, so CEO chose the strategy: “best-cost provider” to compete in the
market. It means Sông Vàm Rice provides high quality and hygienic rice (some main
characteristics: the purity, color, fragrance, stickiness and without pesticide residuals) with
a reasonable price compares to other competitors in the rice industry.
A strong distribution channel plays a vital role in the success of any companies. Instead
of competing directly with big competitors such as Hat Ngoc Troi rice, Minh Tam rice in
MT (modern trade) channel such as supermarket (Big C, Coopmart, MM supermarket) or
big grocery stores (Vinmart, Bach Hoa Xanh, CoopFood), the strategy of Sông Vàm Rice
is attacking the potential market in apartment areas or residential areas through cooperating

5


with dealers in these areas where the competition is not fierce to gain the market share
quickly. Salesmen of Sông Vàm Rice will be repsonsible for finding potential dealers in
these areas to cooperate with them. Dealers could be traditional rice stores, family-owned
grocery store or people live in the residential and apartment building area. They have a
place to store and sell rice for the customers or they have many relationship in their living
area, especially, they would like to earn extra income for their family. Salesmen of Sông
Vàm Rice will introduce sales policy of the company, consult dealers about the products
knowledge about rice industry as well as rice production process in factory, process of
growing rice. Moreover, salesmen cooperate closely with marketing employees to organize
trade marketing activities to support dealers such as sampling, promotion program, point
of sales materials, standee to boost the revenue and profit for sellers.
This strategy could help Sông Vàm Rice gain market share quickly before big
competitors start to attack this distribution channel. Besides that, Sông Vàm Rice
diversified its distribution channel to protect the business through signing long-term
contract with companies, restaurants and schools in Ho Chi Minh city who have demand
for hygienic rice. It could help the company having sustainable profit. Therefore, the
performance and cooperation of sales team and marketing employees had a huge positive
impact on the success of Sông Vàm Rice.

6


1.2 Organizational structure of Sông Vàm Rice
Sông Vàm Rice is a small company. Total employees of the company is 25. Accounting &
finance department (4 people), company service department ( 2 people), technical & production
department (5 people), warehouse and procument department (5 people), sales & marketing
department (9 people).

CEO

Operational
department
(6 people)

Business development
department
(19 people)

Account &
Finance
department
(4 people)

Technical &
Production
department
(5 people)

Company
service
department
(2 people)

Warehouse and
procument
department
(5 people)

Sales &
Marketing
department
(9 people)

Figure 1: Organizational structure of Sông Vàm Rice.
Source: Sông Vàm Rice profile.
As mentioned above, the strategy of Sông Vàm Rice is not competing directly with big
competitors with large resources as Hat Ngoc Troi rice, Minh Tam Rice in MT channel
(supermarket, grocery store chain like Coopmart, CoopFood, Bach Hoa Xanh). Initially, the
company developed its distribution channel by finding potential dealers in residential areas or
apartment buildings in Ho Chi Minh city. Hence, the role of salesmen and marketing employees
7


is very crucial in the development of the company. They need to find potential dealers to
cooperate, boosting sales revenues through marketing activities to achieve target of CEO. That
is the reason why we need to understand deeply the organizational structure and the working
process of this department to enhance the performance of the company.
Sales manager (1 person)

Marketing employees (3
people)

Salesmen (5 people)

Content (1 person)

Trade marketing
(2 people)

Figure 2: The organizational structure of sales & marketing department in Ho Chi Minh city
of Sông Vàm Rice.
Source: Sông Vàm Rice internal report in 2019.
Sales & marketing department consists of 9 people, they have responsibility to expand market
share of Sông Vàm Rice in Ho Chi Minh city. Sales manager will handle all members in this
department and offer a plan for CEO to increase sales revenue. Besides that, Sông Vàm Rice
has 5 salesmen to develop its business by finding potential dealers and taking care of them.
Marketing employees will cooperate with salesmen to execute marketing activities to not only
support salesmen and dealers but also build the brand of Sông Vàm Rice. Salesmen will report
the sales data and performance of dealers for sales manager. CEO, sales manager and marketing
employees will have meeting regularly to discuss about suitable programs to support salesmen
and dealers. Marketing employees put more efforts into advertising the brand of Sông Vàm
Rice to customers.

8


1.3 Mission of Sông Vàm Rice
Although Sông Vàm Rice is only a small and medium enterprise and has just
established recently. But the company would like to bring high quality products of rice for
customer’s family.
The company emphasizes the mission mentioned as below as a guideline to lead the
company to grow and move forward in the future:
•

Bringing the warm meal to customer’s family.

•

Providing high quality rice ( rice without pesticide residuals, quick delivery
service) with a reasonable price for customers.

•

Building a sustainable relationship with farmers, bringing a sustainable profit
and an efficient process to grow hygienic rice.

1.4 Vision of Sông Vàm Rice
Sông Vàm Rice has its vision to achieve in the next 10 year. It helps the company
creating plans, objectives and making important decisions towards the vision. Vision as a map
to guide the company, define the picture of the company, how it works or what it needs to gain
to make the vision come true. A vision helps keeping organization focused, connecting the
valued resources to gain the huge achievement.
•

Branding Sông Vàm Rice becomes one of popular brand rice in a domestic
market: By organizing a good distribution channel along the country, diversifying
distribution channel both in general trade channel (GT) and modern trade channel (MT)
to ensure the financial performance of the company.

•

Building the Vietnamese rice brand in international markets: Although Vietnam is
the third biggest exporters of rice in the world, we don’t have any famous Vietnamese
brand rice in foreign supermarkets. The foreign consumers don’t know about the
reputation of Vietnamese rice. Starting working with the supermarket in domestic
market to understand deeply the process of selling rice in MT channel, this would helps
Sông Vàm Rice having experience to attack international supermarket in the future.

•

Diversifying value-added products from rice: The value chain of argricultural
products of Vietnam is small, we don’t have many value-added products. In Thailand,
they have many value-added products from rice such as rice cracker, bran rice oil, rice
milk, cosmestics from bran rice… Sông Vàm Rice needs to invest money in research
& development activities to create new types of products from rice. It has a purpose to

9


protect the business of Sông Vàm Rice in the fierce market and expand the product line
of the company.
2. Problem context
2.1 Vietnamese rice industry
The rice industry in Vietnam is very potential, but the competition is very fierce.
Vietnam is now one of top leading exporters rice in the world. There are nearly 150 rice
exporters in Vietnam. These exporters mainly concentrate on quantity and revenue, not pay
enough attention to the brand and the quality of Vietnamese rice around the world. Meanwhile,
Thailand, India and recently Cambodia successfully build their brand rice in international
market.
In domestic market, Vietnam market is very potential, our country has over 90 million
people. Every year, Vietnamese farmers produced around 20 million tons of rice. 1/3 of them
around 7 million tons of rice are used to export for foreign countries, the rest are consumed in
domestic market. That is the reason why Vietnam rice market is very attractive. Because of the
concern of the customers about fresh and hygienic food, many rice companies in domestic
market are building their brand rice to provide for customers. In reality, the market share in
domestic market is divided into many parts, most of them belong to traditional stores who often
sell many varieties of rice without brand name, date of expiration, origin of rice.
Some big players in the rice brand industry in Vietnam are Hat Ngoc Troi rice, Vinh

Phat Wilmar rice and Minh Tam rice. They are first players of rice brand industry with large
resources and experiences. They possess a strong distribution channel, especially in modern
trade (MT) channel such as big chain supermarkets as Coopmart, Big C, Lotte and grocery
stores as Bach Hoa Xanh, Coop Food. These companies are the biggest competitors of Sông
Vàm Rice. However, they focus on taste of rice of customers. Meanwhile, Sông Vàm Rice not
only concentrates on bringing suitable taste of rice (degree of stickiness and fragrance) for
customers but also providing hygienic rice (without pesticide residuals) to ensure customer’s
health. Some small players as Hoa Nang, Hoa Lua rice, they sell organic rice with USDA and
EU certificate. However, the price is vey expensive, it ranges from 50,000 – 60,000 VND/kg.
(according to price of these products listed in Coopmart).The demand for safety food in
Vietnam is increasing, however the price is a barrier for consumers to buy safety food.

10


2.2 Analyzing the competitors of Sông Vàm Rice

Figure 3: Strategic group mapping.
Source: Competitor Analysis Report of Sông Vàm Rice in 2019.
As the chart of strategic group mapping, Minh Tâm rice and Hạt Ngọc Trời are the
same segment customers with Sông Vàm Rice. To compete in the market, Sông Vàm Rice is
pursuing the best-cost provider strategy. It means that Sông Vàm Rice will provide high quality
& hygienic rice (fragrance, stickiness and without pesticide residuals) for the customers with a
reasonable price. (price ranged from 20,000 VND/kg to 28,000 VND/kg).
Comparing with other competitors in same segment as Hat Ngoc Troi and Minh Tam
rice, the price of product of Sông Vàm Rice is similar, however, Sông Vàm Rice put more
efforts into providing hygienic rice to ensure health of customer’s family. Comparing with Hoa
Nang and Hoa Lua rice, Sông Vàm rice provide the products with the quality nearly similar
with the quality of Hoa Lua and Hoa Nang rice with a reasonable price. For instance, the highest
price of Sông Vàm Rice is 28,000 VND/kg (according to company’s report), meanwhile the

price of product of these companies is often range from 35,000 VND – 50,000 VND/kg.
(according to price listed in Coopmart and Bach Hoa Xanh).
Sông Vàm Rice is not the first-mover in rice brand industry, therefore the company
chooses to build its distribution channel in general trade channel (GT channel) first to gain
market share quickly by finding potential dealers to cooperate in residential areas or apartment
buildings in Ho Chi Minh city. Because the discount percentage for retailers as supermarkets,
grocery stores in MT channel is much higher than the discount percentage for dealers in GT
channel, moreover, the account receivable days in MT channel is often longer than GT channel.
( 45 days comparing with 15 days). Besides that, Sông Vàm Rice also diversified distribution
channel by providing rice for companies, restaurants and schools to gain sustainable profit for
11


the company. In 2018, Sông Vàm Rice signed the contract with Auchan supermarket to start
distribution rice in MT channel. This helps Sông Vàm Rice having experience to understand
the process of working with supermarkets. Sông Vàm Rice also build two stores to display and
sell rice for customers, one in Long An province, one in Ho Chi Minh city.
To develop GT distribution channel, salesmen and marketing employees of Sông Vàm
Rice play vital roles in the performance of the company. They need to find potential dealers in
residental area or apartment buildings to persuade them to cooperate with the company. Dealers
who could be traditional rice stores, grocery store or just a family living in these areas.
Salesmen needs to train sales skills, knowledge about product for dealers to help them
consulting for their customers. Marketing employees will support salesmen by marketing
activities to boost revenues & build a good relationship with dealers.
Table 1: Value proposition evaluation between Sông Vàm Rice and other competitors.
Minh Tâm

Hoa Lúa

rice

Rice

8

8

6

9

8

9

9

5

10

8

7

10

7

9

9

8

9

Quick delivery

9

9

8

8

8

Total

37

45

41

40

41

Criteria
Reasonable
price

Traditional

Sông Vàm

stores

Rice

10

8

6

Hạt Ngọc Trời

Consistent
quality (purity,
bright color,
stickiness)
Without
pesticide
residuals
Consultant for
products

Source: Competitor Analysis Report of Sông Vàm Rice in 2019.
Sales department of Sông Vàm Rice conducted a survey with around 100 customers in the
market (including current customers of these companies). They will rank from 1 to 10 for
each factor of company’s product (1: very bad, 10: very good). After that, we will calculate
average number for each factor of each company. This table is used to evaluate value
proposition between Sông Vàm Rice and its competitors.
12


COMPETITIVE STRENGTH ASSESSMENT
Rating scale: 1 = very week, 10 = very strong
Sông Vàm Rice

Hạt Ngọc Trời Rice

Minh Tâm Rice

Key success

Important Strength Weighted Strength Weighted Strength Weighted

factors

weight

Strong

0.3

7

2.1

9

2.7

9

2.7

0.2

9

1.8

7

1.4

7

1.4

0.1

9

0.9

8

0.8

9

0.8

0.1

9

0.9

7

0.7

7

0.7

Manufacturing 0.1

6

0.6

9

0.9

8

0.8

0,1

8

0,8

7

0,7

7

0,7

0.05

6

0.3

10

0.5

8

0.4

0.05

7

0.35

9

0.45

7

0.35

distribution
channel
Consistent
quality
Reasonable
price
Degree of
hygienic rice
& customer
service

capability &
technology
Relative cost
position
Finance
resources
R&D for new
varieties and
products
Overall

7.75

8.15

7.85

Weighted
competitive
strength
rating

Table 2: Competitive strength assessment between Sông Vàm Rice and other competitors
Source: Competitor Analysis Report of Sông Vàm Rice in 2019.
Sales manager and sales team are responsible for evaluating competitive strength assessment
of Sông Vàm Rice and two competitors in the same segment of the company. They conducted
13


a research in the market to report for CEO about the strength of these competitors (such as

finance resources, manafacturing capabilities, strong distribution channel, with 1: very weak,
10: very strong) to help CEO having a big picture about its competitors.
2.3 Customer segment of Sông Vàm Rice.
Sông Vàm Rice focuses on the customers who have the demand for hygienic & high quality
rice. They are willing to buy hygienic & high quality rice with the price is higher than in
traditional stores. Customers can easily buy the products of Sông Vàm Rice through dealers
channel, rice will be deliveried within maximum 30 minutes from the time dealers receiving
order from customers. Especially, if the customer live in apartment buildings, they can’t bring
5kg -10kg rice from stores to home, delivery staffs of dealers will help bringing rice to their
home. It helps the customers saving time and effort to buy rice.
That is the reason why dealers, salesmen and marketing staffs are very important with Sông
Vàm Rice. Focusing on cooperating these valuable resources, Sông Vàm rice could achieve
the good performance.
3. Symptom of Sông Vàm Rice.
We collected sales data of Sông Vàm Rice from 2017 to 2019 through reports of sales &
marketing department to analyze and understand about the business and the status of Sông
Vàm Rice.

Supermarket: Auchan 0 10 5

Schools + Restaurants

5

Companies

20

15

Dealers

30

20

35

20

Own stores

10
0

55

20

20

20

40

99

60

80

100

2017

2018

2019

120

140

160

180

200

Figure 4: Average sales quantity/channel/month of Sông Vàm Rice from 2017 to 2019.
Source: Sales report in 2017, 2018 and 2019 of Sông Vàm Rice.
14


As the chart illustrated, Sông Vàm Rice diversified its distribution channel by selling rice for
various types of customers such as dealers, schools and restaurants, companies and
supermarket. Sông Vàm Rice also built two stores, one in Long An province, one in District 8
in Ho Chi Minh city to display products and sell rice for individual customers near the stores.
Sales data in figure 4 indicated that dealers channel played the most important role in the
performance of Sông Vàm Rice because sales quantity of this channel was biggest during 3

years comparing with other channels from 2017 to 2019. (20 tons in 2017, 55 tons in 2018 and
99 tons in 2019).
We calculated the proportion of dealers channel in average total sales quantity/month of Sông
Vàm Rice in 2019, then we have the figure as below:

16%

3% 11%
Individual customer
Dealers
Companies

18%

Schools + Restaurants

52%

Supermarket: Auchan

Figure 5: Proportion of each channel in average total sales quantity/month of Sông
Vàm Rice in 2019.
Source: Sales report of Sông Vàm Rice in 2019.
According to the figure 5, dealers channel contributed 52% of average total sales
quantity/month of Sông Vàm Rice. It illustrated for the strategy focusing on cooperating with
dealers in residential areas and apartment buildings in Ho Chi Minh of the company. However,
although sales quantity of dealers channel increased significantly from average 20 tons/month
in 2017 to 55 tons/month in 2018 and 99 tons/month in 2019, this actual performance was
lower than the target of CEO for dealers channel in 2018 and 2019 ( according to the sales
15

report of Sông Vàm Rice). For further detail, the figure below will illustrate the symptom of
Sông Vàm Rice:

120
99

70
55

20
10
2017

2018
Average actual performance /month

2019
Average target for dealers/month

Figure 6: Comparing average actual performance/month against average target
performance/month of CEO for dealers channel in 2017, 2018 and 2019.
Source: Sales report of Sông Vàm Rice from 2017 to 2019.
As the chart illustrated, average actual performance of dealers/month from 2017 was higher
than average target for dealers/month of CEO ( 20 tons compared to 10 tons). In constrast, in
2018 and 2019, average actual performance of dealers/month was lower than the target/month
for dealers ( 55 tons compared to 70 tons in 2018, 99 tons compared to 120 tons in 2019). The
target of CEO for dealers is attainable. A dealer of Sông Vàm Rice is often located in residential
areas and apartment buildings with minimum 600 households. According to data of sales

department of the company and other competitors, a family can consume from 10-20kg of
rice/month. In addition, basing on statistics of Ministry of Agriculture and Rural Development,
a Vietnamese person can consume 96,6 kg of rice/year, it is equivalent around from 5kg-to
7kg/month/person. Therefore, a family with 2-3 people will need to buy 10-20kg/month. From
that, we could estimate market size in dealers area around 10 tons/month. CEO expected that
long-term dealers could achieve at least 20% market share, around 2 tons/month. In the end of
2018, the company had total 60 dealers. Therefore, CEO’s target is an achievable target for
16


dealers channel. However, the actual performance of them was lower than expectation of CEO.
Therefore, we should make further investigation to explore the problems and causes affecting
the performance of dealers channel. This would help enhancing the performance of Sông Vàm
Rice. This study will find the main reason of the symptom: “ Actual performance of dealers
channel was lower than target of CEO”, then the author will suggest solutions and prove the
efficiency of this solution to enhance the status of the company.
This study uses quantitative method, qualitative method including secondary data from
Ministry of agriculture and rural development of Vietnam, Sông Vàm Rice’s reports such as
sales reports of sales and marketing department. Besides that, the author also collects data
through in-depth interviews from various stakeholders of Sông Vàm Rice as: CEO, Sông Vàm
Rice’s salesmen, sales manager, marketing employees, dealers, current customers and former
customers of Sông Vàm Rice to analyze the issues of Sông Vàm Rice.
4. Problem identification.
Starting with the symptom of the company, the author interviewed various stakeholders of
Sông Vàm Rice to understand potential problems the company are facing.
CEO of Sông Vàm Rice – Mr Phan Cong Binh talked about potential problems causing the
symptom: underperformance of dealers channel. He said that:
There are three possible problems affecting the performance of dealers channel:
1. Slow in finding new dealers.
2. Underperformance of our long-term dealers.

3. Some long-term dealers stop cooperation with the company.

(In-depth interview 1, page 64)
According to sales report of the company, It classified dealers into 3 types to manage,
depending on the length of time of cooperation between the company and dealer:
1. Long-term dealer: Dealers have over one year cooperation with the
company.
2. Short-term dealer: Dealers have over 3 months cooperation and under one year
with the company.
3. New dealer: Dealers have under 3 months cooperation with the company.
In which, long-term dealers play the most important role in the performance of the
company”.
Basing on opinions of CEO & sales manager, we need to collect data through sales reports of
Sông Vàm Rice from 2018 and 2019, combining with point of views of related stakeholders to
17


identify and confirm possible problems which closely related to the symptom of Sông Vàm
Rice.
4.1 Possible problem 1: Slow in finding new dealers.
According to the report of sales in 2018 and 2019. We have a table as below:
Table 3: Comparing actual performance against target of CEO in 2018 and 2019.
Year

Sales target for
dealer
channel/month

Actual

Number of

Number of

Number of

performance of

dealer

actual

dealer stop

dealer

target

dealer

cooperation

channel/month
2018

70 tons

55 tons

75

60

2

2019

120 tons

99 tons

100

85

3

Source: Sales report of Sông Vàm Rice in 2018 and 2019.
Data in the table 3 indicated that the number of actual dealers of Sông Vàm Rice was lower
than target of CEO in 2018 and 2019 ( 60 actual dealers comparing with target 75 dealers in
2018, 85 actual dealers comparing with target 100 dealers in 2019). Besides that, the number
of dealers decided to stop cooperation was just 2 dealers in 2018 and 3 dealers in 2019. It means
that salesmen of Sông Vàm Rice found total 28 new dealers for the company in 2019.
Meanwhile, we asked with Mr Le Thanh Hien - sales manager about the target of CEO for
sales & marketing department. He said that:
Each month, our sales team needs to achieve target of CEO: at least 4 new dealers/month. It
means that we must cooperate with at least 48 new dealers/year. However, in 2019, our sales
team could only bring total 28 new dealers for the company. This problem can come from
ability of our salesmen in closing deals to convert potential dealers into real dealers.

(In-depth interview 2, page 66)
We continued interviewing CEO – Mr Phan Cong Binh to know his opinion about the
problem. He said that:
Our sales team had total 5 people. In which, there are 2 highly experienced salesmen in rice
industry, others need to be trained about knowledge in rice industry and selling skills. Although
I set up an attainable goal for them with just 4 dealers/month, but we couldn’t achieve it. We
need to deal with that problem to improve performance of the company.

(In-depth interview 1, page 64)
Therefore, we can confirm that the company really had the problem with finding new dealers.
According to CEO and sales manager’s opinion, this problem mainly came from ability of
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salesmen in closing deals to transform potential dealers into real dealers. Jolson (1) suggested
that closing skill is an important part of proper relationship selling. According to results of
research by Johnston, Hair and Boles (2) , consumer products salespeople indicated that ability
to get along with buyers was crucial to sales performance. Slow in finding new dealers
affected the strategy of Sông Vàm Rice to expand market share and distributed products widely
in Ho Chi Minh city. In addtion, the problem also impacted negatively on sales quantity and
performance of dealer channel. Therefore, the company should deal with that problem to
increase performance of dealer channel in order to achieve target of CEO.
4.2 Possible problem 2: Underperformance of long-term dealers.
Initially, we analyzed the performance of each type of dealers of Sông Vàm Rice in 2019,
comparing with the target of CEO in the sales report in 2019 to evaluate the importance of each
type of dealer channel.
Table 4: Performance of 3 types of dealers and sales target of CEO in 2019.
Types
of

Time of

Average sales

Average actual sales

cooperation number quantity/month quantity/dealer/month

dealer

Long-

The

Over 1 year

of

for each type of

dealers

dealer in 2019

in 2019

(tons)

42

61

Sales target
of CEO

in 2019

1,45 tons/month

term

>= 2
tons/month

dealer
Short-

Over 3

term

months and

dealer

under 1 year

New

Under 3

dealer

months

30

32

1,07 tons/month

>= 1
tons/month

13

6

0,46 tons/month

>= 0,5
tons/month

Source: Sales report of Sông Vàm Rice in 2019.
According to data in table 4, the number of long-term dealer was highest among three types of
dealers, it accounted nearly 50% of total dealers of Sông Vàm Rice in 2019 ( 42 long-term
dealers of total 85 dealers). Moreover, average sales quantity/month of long-term dealers
contributed approximately 61,61% of total average sales quantity/month of dealer channel in
2019 (61 tons of total 99 tons in 2019). However, comparing the average actual sales
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quantity/dealer per month with sales target of CEO, the performance of long-term dealers was
lower than expectation of CEO ( 1,45 tons/month comparing with 2 tons/month). In contrast,
the performance of other types of dealer can satisfy CEO’s expection. For instance, average
actual sales quantity of short-term dealers per month was higher than target of CEO ( 1,07
tons/month comparing with 1 tons/month). Furthermore, the performance of new dealers nearly
achieved target of CEO ( 0,46 tons/month compared to 0,5 tons/month).
We interviewed sales manager – Mr Le Thanh Hien about the role of long-term dealers. He
said that:
Long-term dealers contributed significantly in the performance of dealer channel. They helped
our company distributing products widely and building many loyal customers in Ho

Chi

Minh city. However, the actual performance of them can’t reach target of CEO in 2019. This
affected total performance of dealer channel. We need to improve it.

(In-depth interview 2, page 66)
For that problem, we talked with CEO of Sông Vàm Rice – Mr Phan Cong Binh to ask about
his target for long-time dealers. He said that:
My target for our long-time dealers is attainable and realistic. Long-time dealers had
experience in cooperation with our sales team & marketing employees. Besides that, our
dealers are often located in crowded residential areas and apartment buildings. There are
minimum 600 households in area of our dealers. According to history data of sales department,
one family with four people can consume at least 10kg-20kg rice per month. From that, we can
estimate market size of our dealers: 8 tons – 12 tons /month. Therefore, we expected our longtime dealers could achieve 20% market share (at least 2 tons/month) in their areas by support
of salesmen & marketing staffs. However, actual performance of them was lower than target.
We need to deal with that problem to improve our performance.

(In-depth interview 1, page 64)
Basing on opinion of CEO, we checked data from sales report of Sông Vàm Rice, the data
indicated average a family with four people in Ho Chi Minh city can consume from 1020kg/month. A dealer of Sông Vàm Rice is often located in residential areas and apartment
buildings with minimum 600 households. CEO expected that a long-term dealer can achieve
at least 20% market share, it was equivalent around 2 tons/month. We can confirm it was an
attainable target. Because actual sales quantity of dealers of some big competitors as Hat Ngoc
Troi, Minh Tam rice is higher than target of Sông Vàm Rice (around 3-4 tons/month)
(according to market research report of sales and department of Sông Vàm Rice). However,
the average actual performance of long-term dealers of Sông Vàm Rice was 1,45 tons/month,
it was lower than expectation of CEO. Underperformance of long-term dealers affected total
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performance of dealer channel. To improve performance of long-term dealers, the company
should make further exploration to solve the problem.
Mr Tran Long Thai – an experienced saleman of Sông Vàm Rice said:
Our sales & marketing department is repsonsible for supporting dealers through marketing
activities. It was effective in first stage of cooperation, that is the reason why new dealers and
short-term dealers can achieve target of CEO by our marketing activities. In contrast, we met
difficulties to boost sales revenues for long-term dealers. We should focus on improving
performance of long-term dealers.

(In-depth interview 3, page 69)
Bello and Gilliland (3) suggested that the company should monitor indicators of distributor
results (such as sales volume, market penetration of new products), it could increase the
performance of the company. In addition, Cavusgil and Zou (4) pointed that a manufacturer’s
support and involvement with its distributors are related to performance of the company.
Therefore, Sông Vàm Rice should review the current process of cooperation with dealers to
improve sales performance for long-time dealers. This could help improving performance of
dealer channel.

We talked with Mrs Phan Thi Hanh Nguyen – a long-term dealer of Sông Vàm Rice in
Saigonland apartment in Binh Thanh district about the sales performance of her store. She said
that:
I tried to expand the number of customers in my areas. However, the actual performance was
lower than target of CEO and my expectations. We need more support from the company to
attract more customers, especially I hope that the company will increase discount percentage
for dealers to boost our motivation.

(In-depth interview 4, page 70)
Zineldin (5) proposed that there are many benefits for a long-term collaborative relationship.
The company should build a cooperative relationship with external and internal collaborators.
In this case of Sông Vàm Rice, the company should focus on cooperating efficiently with longtime dealers by supporting them to increase their profits and bring more customers. Moreover,
salesmen and marketing staffs will help the company sharing business strategy for dealers,
encouraging them to achieve the target. Frazier and Rody (6) suggested that a cooperative
business relationships grows over time as trust and commitment between business partners
develop.

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