INTERNATIONAL MARKETING PLAN FOR BASA FISH TO EU’s MARKET BY VINH HOAN JOINT STOCK COMPANY (KẾ HOẠCH TIẾP THỊ QUỐC TẾ CHO CÁ BASA ĐẾN THỊ TRƯỜNG EU CỦA CÔNG TY CỔ PHẦN VĨNH HOÀN)

THE MINISTRY OF FINANCE
UNIVERSITY OF FINANCE – MARKETING

FINAL EXAM
INTERNATIONAL MARKETING PLAN
FOR BASA FISH TO EU’s MARKET
BY VINH HOAN JOINT STOCK COMPANY

GROUP
LY THU KY – 1921000880
TRUONG MINH MAN – 1921000917
PHAN GIA CAT TUONG – 1921003892
NGUYEN NHUT HAI LONG – 1921004477

CLC_19DMA12

HO CHI MINH CITY, 2021


TABLE OF CONTENTS

LIST OF TABLES ............................................................................................................................ iii
LIST OF FIGURES ...........................................................................................................................iv
LIST OF ACRONYMS ...................................................................................................................... v
PART 1. COMPANY INTRODUCTION ......................................................................................... 1
1.1 OVERVIEW OF VINH HOAN JOINT STOCK COMPANY .................................................. 1
1.2 HISTORY OF FORMATION AND DEVELOPMENT ............................................................ 1
1.3 VISION, MISSION AND CORE VALUES............................................................................... 3
1.4 RESEARCH OBJECTIVES ....................................................................................................... 3
PART 2. ANALYSIS OF BUSINESS ENVIRONMENT ................................................................ 4
2.1 MACRO ENVIRONMENT ........................................................................................................ 4

2.1.1 Overview of the EU’s market .............................................................................................. 4
2.1.2. Natural environment ........................................................................................................... 4
2.1.3. Economic environment ....................................................................................................... 5
2.1.4. Legal and political environment ......................................................................................... 5
2.2. MICRO ENVIRONMENT ........................................................................................................ 6
2.2.1. Competitors ......................................................................................................................... 6
2.2.2. Product supply..................................................................................................................... 8
2.2.3. Customer ............................................................................................................................. 8
2.3. SWOT ANALYSIS.................................................................................................................... 9
2.3.5. S – O strategy .................................................................................................................... 10
2.3.6. W – O strategy: ................................................................................................................. 10
2.3.7. S – T strategy: ................................................................................................................... 10
2.3.8. W – T strategy: .................................................................................................................. 10
2.4. DESCRIPTION OF TARGET MARKET ............................................................................... 10
2.4.1. Main markets of Vinh Hoan Company ............................................................................. 10
2.4.2. Europe market ................................................................................................................... 10
PART 3. INTRODUCTION STRATEGY ...................................................................................... 12
3.1. INTRUSION METHODS ........................................................................................................ 12
3.1.1. Franchising ........................................................................................................................ 12
3.1.2. Licensing ........................................................................................................................... 13
3.1.3. Direct export ..................................................................................................................... 13
3.2. INFILTRATION STRATEGY CHOSEN BY VINH HOAN ................................................. 14
i


3.2.1. Direct export ..................................................................................................................... 14
3.2.2. Difficult ............................................................................................................................. 15
3.2.3. Remedial measures ........................................................................................................... 16
3.2.4. Deployment method .......................................................................................................... 17
PART 4: INTERNATIONAL MARKETING STRATEGY OF VINH HOAN .......................... 19

4.1 INTERNATIONAL MARKETING STRATEGY OF VINH HOAN COMPANY ................. 19
4.2 PRODUCT STRATEGY .......................................................................................................... 19
4.3 PRICING STRATEGY ............................................................................................................. 20
4.4 DISTRIBUTION STRATEGY ................................................................................................. 21
4.5 PROMOTION STRATEGY ..................................................................................................... 22
PART 5. CONCLUSION AND RECOMMENDATIONS ............................................................ 24
5.1. CONCLUSION ........................................................................................................................ 24
5.2 RECOMMENDATIONS .......................................................................................................... 24
LIST OF REFERENCES ................................................................................................................... a
APPENDIX ......................................................................................................................................... b

ii


LIST OF TABLES
Table 0: Vision, Mission And Core Values ............................................................................... 7
Table 1: Export Regulation ........................................................................................................ 7
Table 2: Vinh Hoan’s Competitor inside Vietnam .................................................................... 8
Table 3: Vinh Hoan’s Competitor at EU ................................................................................... 9
Table 4: Vinh Hoan’s food supply system ................................................................................. 10
Table 5: Vinh Hoan SWOT analysis.......................................................................................... 10
Table 6: Market Segment ........................................................................................................... 12
Table 7: Advantages and Disadvantages of Franchising ........................................................... 14
Table 8: Advantages and Disadvantages of Licensing .............................................................. 15
Table 9: Advantages and Disadvantages of Direct export ......................................................... 16
Table 10: Some Decision about Direct Export .......................................................................... 17
Table 11: Difficult of Direct Export .......................................................................................... 17
Table 12: Documents need to complete ..................................................................................... 20
Table 13: Revenue, Expense & Profit Forecast ......................................................................... b
Table 14: Action plan for the first year ...................................................................................... c

Table 15: Basa Fish Sales & Revenue Forecast For The Next Five Years ................................ d
Table 16: Member’s group work assessment ............................................................................. d

iii


LIST OF FIGURES
Figure 1: Company Organization ..................................................................................................5
Figure 2: Proportion of Products Exported to EU (2018) .............................................................6
Figure 3: Household Expenditure by EU’s consumption purpose ................................................13

iv


LIST OF ACRONYMS
Vinh Hoan

: Vinh Hoan Joint Stock Company

ha

: hectares

VASEP

: Vietnam Association of Seafood Exporters and Producers

EU

: European Union

UK

: United Kingdom

GDP

: Gross Domestic Product

EVFTA

: European-Vietnam Free Trade Agreement

UKVFTA

: United Kingdom-Vietnam Free Trade Agreement

FTAs

: Free Trade Agreements

IUU

: Illegal, Unreported And Unregulated Fishing

HACCP

: Hazard Analysis and Critical Control Point System

ISO

: International Organization for Standardization

v


PART 1. COMPANY INTRODUCTION
1.1 OVERVIEW OF VINH HOAN JOINT STOCK COMPANY
The predecessor of Vinh Hoan Joint Stock Company is Vinh Hoan Company Limited,
established on December 19th, 1997. In 2007, the company transformed into a joint stock company
with the name Vinh Hoan Joint Stock Company. Vinh Hoan Joint Stock Company is one of the
leading basa processing and exporting companies in Vietnam. Vinh Hoan is a company with a scale
belonging to the big enterprises in the export processing industry of the country, the total current
capacity is up to 250 tons of raw fish per day. The company has the advantage of raw material
supply because it is located in Dong Thap Province, a province in the Mekong Delta region with the
environment and conditions considered the most favorable for the farming industry of raw basa.
With 8 basa farming areas, total area 136.5 ha, providing 34% of raw material demand. The
company's products are eligible to export to many countries around the world, including the US and
EU countries, the most demanding market in the food export industry from overseas markets and
gradually become a brand name reputable both at home and abroad.
•

Trading name: VINH HOAN JOINT STOCK COMPANY

•

English name: VINH HOAN CORPORATION

•

Business registration certificate number: 1400112623

•

Charter capital: 1.833.769.560.000 VND

•

Address: Route 30, Ward 11, Cao Lanh City, Dong Thap Province

•

Phone: +84 277 389 1166

•

Fax: +84 277 389 1062

•

Website: www.vinhhoan.com

•

Stock code: VHC

1.2 HISTORY OF FORMATION AND DEVELOPMENT
-

1997: Ms. Truong Thi Le Khanh founded Vinh Hoan Private Enterprise.

-

1998: Converting the business model to Vinh Hoan Co., Ltd.

-

1999: The first fisheries processing factory in Cao Lanh Town, Dong Thap province came
into operation.

-

2007: Publicly listed on the Vietnam Stock Exchange. Established Vinh Hoan Feed.
Established Vinh Hoan USA in Milpitas, California.
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-

2009: Vinh Hoan Laboratory was accredited to ISO / IEC 17025:2005

-

2010: Become the world's largest basa producer

-

2012: The world's first basa producer received ASC (Aquaculture Stewardship Council)
certification.

-

2015: First company in the world to achieve 4-Star Best Aquaculture Practices (BAP) for
hatcheries, feed production, farming and processing of basa. Modern collagen/gelatin
production facility begins production.

-

2016: Awarded the First Class Labor Medal by the Government of Vietnam. Ranked by
Forbes as one of the top 50 companies on the Vietnamese stock market for three consecutive
years. Established Vinh Aquaculture division to promote research, development and
education as well as provide stable input for production.

-

2017: Focus on growth and innovation through Vinh Foods division to provide a wide range
of value-added products. Celebrated 20th year anniversary of Vinh Hoan's journey.

-

2018: Locate existing markets and develop into further markets. Expand farming and
production capacity to ensure the supply of high quality raw materials. Continue to focus on
developing value-added products. Increase direct distribution channels to restaurants and
supermarkets.

-

2019: In January 2019, Vinh Hoan proudly won the “Innovation of the Year” award given by
Woolworths for Fish Bites; Chairman of the Board - Ms. Truong Thi Le Khanh was voted by
Forbes Vietnam as one of the 50 most influential women in 2019; Vinh Hoan was honored

as one of the 50 best listed companies in Vietnam in 2019. This year is the 6th consecutive
year appearing in the Forbes list since 2014; In September 2019, Vinh Hoan Pangasius Seed
Production Co., Ltd started construction. This new breeding area will focus on researching
and developing new technologies, improving processes to produce high quality fingerlings;
In November 2019, the Food Safety Inspection Service (“FSIS”) under the US Department
of Agriculture (“USDA”) officially recognized the equivalent for the Vietnamese basa
industry.

2


1.3 VISION, MISSION AND CORE VALUES
Table 0: Vision, Mission And Core Values
Mission

Affirming the position and potential development of sustainable aquaculture in the world through
continuous improvement, environmental protection and efficiency improvement in all production and
business activities.

Vision

Becoming a leading company in sustainable aquaculture products, contributing to building a world of
safe, delicious, healthy food and environmental protection.

Core

•

COMMITMENT: Right speech and right action

values

•

IMPROVEMENT: Constantly differentiating to develop

•

DISTRIBUTION: Working with all your heart, not for personal gain

•

SHARE: Being willing to give is also happy to receive

•

PRO: Compliance and speed in every action

Figure 1: Company Organization
General Meeting of Shareholders
Control Board
Administrative Council
Internal Audit Department
General Manager

Operation
Support
Division

Trading

Division

Sustainable
Development
Division

Quality
Division

Accounting
and Finance
Division

Production Division

Foreign
Relations
Division

Domestic and foreign
subsidiaries and
affiliates

1.4 RESEARCH OBJECTIVES
Analyze the business environment of Vinh Hoan Joint Stock Company to see strengths,
weaknesses, opportunities and threats. And from there, the Marketing strategy of Vinh Hoan Joint
Stock Company was introduced in the European market.
3

PART 2. ANALYSIS OF BUSINESS ENVIRONMENT
2.1 MACRO ENVIRONMENT
2.1.1 Overview of the EU’s market
European Union, also known as the European Union, (abbreviated as EU), is a political and
economic union consisting of 27 member states in Europe. The European Union has developed a
single market through a standard legal system that applies to all member states to make sure the free
movement of people, goods, services and capital. The EU maintains common policies on trade,
agriculture, fisheries and local development.
The EU 27 market size is now 500 million people, GDP will reach 15.193 trillion USD in 2020
(according to Worldbank.org). The EU is now one of Vietnam's leading trading partners, with twoway trade increasing by 15-20% per year on average.
Figure 2: Proportion of Products Exported to EU (2018)
Proportion of Products Exported to EU (2018)
textile (9,8%)
leather (for shoes) (11,1%)

9,80%

bag, suitcase, umbrella (2,2%)

20,70%

phones and components (31,4%)

11,10%
2,20%

3,20%
3,40%

machinery, mechanical equipment (4,9%)

1,80%
4,90%

electronics and components (11,3%)
wooden (1,8%)

11,30%

31,40%

fisheries (3,4%)
coffee (3,2%)
others (20,7%)

(Source: Ministry of Industry and Trade, General Department of Customs)
2.1.2. Natural environment
With a coastline of 3,200 kilometer, an exclusive economic zone of 1 square kilometer million
and a large inland water surface of 1.4 million hectares, especially the waters of the Mekong Delta
have created favorable conditions for Vietnam to develop the industry. aquaculture and fisheries
processing. In which, Tien Giang, An Giang and Dong Thap are key areas for raising basa fish in the
country, which has fully met the demand for raw materials for export fisheries processing
companies. The characteristics of freshwater fish such as basa fish are easy to raise, less diseased,
and more fertile, especially suitable for environmental conditions in the waters of the Mekong Delta.

4


2.1.3. Economic environment
Like other regions of the world, under the impact of the COVID-19 pandemic, the European

Union in the past year saw many unprecedented changes and challenges in history. For the EU area,
in the first quarter of 2020 recorded a decrease of 2.7% and the strongest decline in the second
quarter of 2020 with a decrease of 13.8%.
The COVID-19 crisis has sent shock waves through the EU food supply chain in
2020. Furthermore, EU agriculture is heavily dependent on cross-border seasonal workers and these
factors are increasingly exposed by the crisis, which could push millions of EU citizens into
poverty, especially those in poverty. vulnerable objects. Among the negative factors caused by
COVID-19, this is a positive signal for Vietnam's food export industry to Europe, especially
fisheries exports.
2.1.4. Legal and political environment
The European market is considered the most rigorous market in terms of import control, the
company needs to understand the regulations to be able to deploy the most effective sales strategies
in this market.
Table 1: Export Regulation
Required

Furthermore, it is not allowed to treat the company's basa with carbon dioxide for the European
market and control the chlorate content of the product.

Food safety

Products found to be non-compliant will be reported in the Rapid Alert System for Food and

standards

Feed. If the company is on that list, its containers will be thoroughly inspected at the port of

must be met

entry. In addition, constant temperature control is recommended. To import into the EU, a

hygiene certificate is required with the product. Health and hygiene are important to customers.
Make sure that there are no contaminants in the finished product.

Chlorate

The European Union has not yet established a specific maximum residue level for chlorate in

control

food, and a default MRL of 0.01 milligrams/kg applies. The European Union is working to
strengthen regulation of residue levels in food and water. Even at the default MRL, the product
is often violated because of its higher chlorate content. At the end of October 2019, a few
shipments of frozen basa fillets with added water from Vietnam were found to have higher
chlorate levels and were put on the RASFF quick alert.

5


Do not treat

Carbon dioxide treatment is used to improve the appearance of basa products and keep the blood

basa fish

of the basa red and the flesh white. The European Union believes that carbon monoxide

with carbon

treatment can mask product deterioration and is not allowed.

oxide
Tariff

In which, shrimp, tuna basa fish are the main export products of Vietnam to the European

barriers

market... so fisheries enterprises have many advantages in terms of tax rates as well as legal
rules when exporting.

Non-tariff

In an EU member state, Romania, recently, on online newspapers such as Realitate.net,

barriers

Ziuanews.ro, Bzi.ro, Adevarul.ro, Puppe.ro, Secretulsanatatii.net... inaccurate information about
Vietnam's basa fish industry, which is harmful to export activities to this country. Some other
websites recommend that the people of this country boycott basa fish and restaurants with this
fish menu. Because the situation of exporting basa fish to the European market decreased due to
smear media in some countries in Europe, VASEP signed a contract with Globally Cool
Company to carry out a campaign to promote Basa fish at this market from March to December
2017.

(Source: VASEP)
2.2. MICRO ENVIRONMENT
2.2.1. Competitors
2.2.1.1. Direct competitors
a. Inside Vietnam: Organizations that give the same product or service and use in the same
market as a business such as:

Table 2: Vinh Hoan’s Competitor inside Vietnam
No.

Company Name

Export value

Export

(million USD)

share

136.1
76.3
130.3
100.4
118.2
78.1
94.7
66.5

6.80%
5.11%
6.52%
6.73%
5.91%
5.23%
4.74%
4.46%

Year of export

1

Nam Viet Joint Stock Company

2

Bien Dong Fisheries Co., Ltd

3

IDI. Multinational Development and
Investment Joint Stock Company

4

Go Dang Joint Stock Company

2019
2020
2019
2020
2019
2020
2019
2020

(Source: VASEP)

6


b. At Europe: Currently, there is no significant competitor for Vietnam in the EU market.
Most basa fish products exported to the European Union originate from Vietnam.
Table 3: Vinh Hoan’s Competitor at EU
Bangladesh

Due to supply chain issues, Bangladeshi exporters are often unable to sell to demanding high-end
markets such as the retail sector, where certification for traceability, quality and durability is often
required. Instead, Bangladeshi basa is often in the lower end of the foodservice market.

China

China is another country that exports small quantities of basa to the European Union. Every year,
no more than 50-100 tons to Europe.

(Source: VASEP)
2.2.1.2. Potential Competitors
Potential competitors are businesses that are not present in the fisheries industry or are new to
the industry but have not provided services and it may affect the industry in the future. The entry of
new enterprises will increase the level of competition among enterprises in the same industry,
however, this level of competition will depend on factors and conditions for entering the industry as
follows:
With many signed agreements such as EVFTA, UKFTA, along with a lot of government
attention to develop the national fisheries industry, the industry's attractiveness becomes great:
Technology; Capital requirements; Commercial factors: Distribution system, brand, customer
system; Specific resources: Inputs (controlled), patents. Human resources, government protection;
Distribution channel.

2.2.1.3. Alternative products
In addition to the competition among basa products, it also must compete with other catfish of the
world and substitute products such as tilapia, salmon, pangasius, and other types of white-meat
fish... as well as other fisheries. When people's income is high, the people's demand for food is also
high, which requires food quality, safety and hygiene, and the ability to choose. If the Vinh Hoan's
products do not meet the needs of customers, the substitute products will affect the company's
business performance.

7


2.2.2. Product supply
Vinh Hoan continues to produce and plans to invest 580 billion VND in projects such as building
new hatcheries, renovating existing farms, and expanding production plants. In 2020, Vinh Hoan
also announced that it is building a fish oil factory in Chau Thanh district, Dong Thap province. The
advantage of closed chain and the advantages of management capacity, technology and technology
have helped Vinh Hoan surpass small and medium-sized enterprises in purchasing raw materials as
well as penetrating large markets.
Table 4: Vinh Hoan’s food supply system
Fingerling

Fish fingerlings are an indispensable part of the farming process and now Vinh Hoan owns over
30 hectares of breeding area. Fish farming process is divided into several stages as follows:
Fish egg (2 weeks) → Newly hatched fish (3 - 4 weeks) → Fingerling
Vinh Hoan develops fish farming from the stage when the newly hatched fish are bought from the
hatchery, this is the stage when the fish are just big enough, easy to raise, and easy to control in
terms of feeding food.

Aquatic food

The source of fish feeding food is mainly provided by Vinh Hoan 1 Joint Stock Company, once a
subsidiary of Vinh Hoan and now sold to a Philippine partner. After the resale, Vinh Hoan became
the official distributor, continuing to buy back food from its partner at a low price and quality,
because the new partner was able to focus on R&D to improve the recipe to help increase
nutritional value and limit environmental pollution.

Raw fish
farming
activities

Recirculating fish farming project without water change:
This is the first project that the company has successfully researched and applied the model of
raising river fish in ponds in the farming area of Tan Hung, Long An.

2.2.3. Customer
The target customer is all European people, regardless of age or status, because basa fish is
white-meat fish, neutral taste, competitive price and easy to prepare into many dishes. Moreover, the
trend of choosing and paying a higher price for natural, organic products, clearly labeled with
recognizable ingredients, with minimal impact on the environment is also gradually gaining
popularity in the market of developed and developing countries.

8


2.3. SWOT ANALYSIS
Table 5: Vinh Hoan SWOT analysis
Strength

• Leading company in product quality and quality management system, pioneering in sustainable farming. Vinh
Hoan brand is reputable, effectively supporting the Company's activities;

• A closed system of farming and processing finished products and by-products, value-added products;
• A network of loyal customers and loyal partnerships spanning the globe and diversified across two traditional
sales channels and modern sales channels;
• A dedicated and professional workforce and a good, committed and experienced management team;
• Having a wide understanding and connections in different foreign markets to support brand promotion and
development strategy;
• Healthy financial situation with high accumulation.

Weakness

• High labor demand for new factories and new projects;
• The product brand has not yet developed to the end consumer;
• Smart science and technology have not yet been applied to keep up with the rapid progress of the information
age;
• The domestic market has not yet developed a suitable name to create wide recognition in the country;
• There is still a lot of untapped potential from the application of the circular economy in the chain of farming,
processing and exporting.

Opportunity

• Vietnam is one of the few countries in the world that has well controlled the spread of the COVID-19 epidemic
and maintained economic growth;
• Potential for development of new products, especially ready-made products for online sales;
• Increasing consumer awareness about food safety, product origin and sustainability factors;
• Basa fish still maintains a competitive advantage in price compared to other white fish products, there is no
direct and significant substitute;
• Several FTAs that Vietnam has signed are effective: EVFTA, EAEU FTAs, RCEP, UK VFTA.

Threat

• The COVID-19 epidemic affects the import demand of key markets;
• Shipping costs increased from the fourth quarter of 2020 and showed no sign of cooling down;
• Competitors are growing stronger and more developed;
• Customers' consumption trends are always fluctuating;
• Increasing domestic demand for raw materials leads to the risk of shortage.

9


2.3.5. S – O strategy: Take advantage of product strengths (quality and output) and take
advantage of external conditions to penetrate the market.
2.3.6. W – O strategy: Building a strong brand, effectively mobilizing capital, managing human
resources well to penetrate the target market.
2.3.7. S – T strategy: Promote the strengths and advantages of the company to limit the threats
of the market and competitors.
2.3.8. W – T strategy: Overcome weaknesses in brand, capital, and human resources to prevent
threats.
2.4. DESCRIPTION OF TARGET MARKET
2.4.1. Main markets of Vinh Hoan Company
In terms of revenue by market, most markets have decreased compared to 2019 and 2020 due to
the impact of the pandemic, mainly due to food service chains, which are one of the two main
consumption channels. In 2020, Vinh Hoan sold to 47 markets, an increase of 9 markets compared
to 2019. In which, the 3 largest markets are the US , Europe (including the UK) and China.
2.4.2. Europe market
The bright spot of the market in 2020 is the growth of the Europe market. Europe so that a block
pass China the 2nd largest market after the United States of Vinh Hoan, accounting for 18% of total
revenue.
2.4.2.1. Market Segment
Table 6: Market Segment
Demographic

According to VASEP, the biggest markets for basa in Europe are in Northern Europe, where

Segmentation

consumers are most concerned with sustainability, price and convenience. The majority of basa is
brought to Europe as frozen fillets and Vietnamese exporters account for most of the market.

Behavioral

Most consumers in Germany are interested in preserved and processed fisheries products. A notable

segmentation

trend is the development of new fisheries products for special occasions or for special enjoyment
such as Spanish savory dishes, fish appetizers, sushi and breaded products. If fisheries is more
conveniently ready and consumers are taught how to cook it, sales of fisheries could increase.

10


2.4.2.2. Market quantification
The population of EU countries is about 500 million people, GDP is 15,193 trillion USD in 2020,
the consumption rate for food and non-alcoholic beverages is 13%, restaurants and hotels are 8.7%,
estimated. EU people spend 10.85% of GDP on food and drink activities, that is, spending 1,648
trillion USD. This is a huge market for Vinh Hoan to exploit.
According to data in 2020, Vinh Hoan's pangasius and basa exports to Europe reached 54 million
USD, a very small number compared to the total market and showed an opportunity to expand the
market further.
Figure 3: Household Expenditure by EU’s consumption purpose

(Source: eurostat)
2.4.2.3. Competitive advantage of Vinh Hoan Company
It is thanks to Ms. Le Khanh assertiveness in leadership that she has made the right and timely
strategic decisions. Since then, Vinh Hoan is not passive when the price of raw materials increases
in the market, improves productivity, reduces costs and costs when realizing that the market demand
is growing or pioneering in research and processing. Basa products, basa fish into high value-added
products such as breaded basa, artichoke rolls. Ms. Le Khanh showed excellent talent and bravery
when helping Vinh Hoan gain a huge competitive advantage over rivals...

11


PART 3. INTRODUCTION STRATEGY
3.1. INTRUSION METHODS
3.1.1. Franchising
This is a business model in which the business owner or franchisor distributes its products and
services through affiliated agents or franchisees. Franchising usually comes with certain benefits.
Here, the franchisor will give the franchisee with the trademark, the right to use the developed
formula, the experts, and even the necessary equipment or materials.
Table 7: Advantages and Disadvantages of Franchising
Advantages

The biggest advantage of franchising is the ability to bring together independent retailers and use a single brand
and business philosophy. This synergy brings many benefits: consumer brand awareness, consistent response to
customer requirements, focused advertising power, and customer purchasing efficiency. For a business owner,
franchising offers many benefits. When the business process is proven to be successful in the marketplace, the
risk of continued business failure is reduced; the use of a well-known brand can save business owners the cost of
establishing and promoting a brand, recognizable from customers; and co-use of brand advertising and
purchases by many consumers. The buying advantage makes the business more profitable.

- Trading in a reputable brand with a smaller investment than building an equal brand.
- Minimize the risk of not having to invest in building a new brand.
- Support from the brand's marketing and promotion programs

Disadvantages

- Share the business risk of the franchisor.
- Not its own brand.
- Business activities according to a predetermined framework.
- Failing to promote creativity in business.
However, franchising is not for everyone. A completely independent business (you know who you are) can be
frustrating having to adhere to the strict requirements and operating characteristics of a franchise. It is also
important to understand that certain franchise methods are more effective than others. Ineffective franchise
methods won't train you to handle tough business situations well, don't support you well when problems arise,
and don't make good use of advertising dollars.

12


3.1.2. Licensing
Licensing is the process of creating and administering a contract between a trademark owner and
a company that wishes to use the trademark in conjunction with its products. This also means that
only certain organizations are licensed to do business in certain territories.
Table 8: Advantages and Disadvantages of Licensing
Advantages

For international licensing, the receiving party needs to have enough capital to put the factory in the contract.
So, the first advantage of the license is that the company does not have to bear the development costs and risks
associated with opening foreign markets. For companies lacking development funds abroad, licensing is an
attractive option.

Licensing is also an attractive entry method for companies that do not want to invest resources in unfamiliar
markets or politically unstable foreign markets. When a company wants to enter a foreign market but is banned
due to investment restrictions, licensing is often the method used.

Disadvantages

The company does not strictly control production, marketing and strategy requires experience and regional
economy. Licensing involves the assignee creating his or her own business. This limits the company's ability to
create a regional economy experience by producing products in a centralized location. So, when these economic
issues are important, licensing is not a good way to expand overseas.
Competing on world markets may need companies to coordinate cross-border strategies by using profits made in
one country to help compete with another. The license restricts this ability of the company. License assignment
does not allow multinational companies to use profits to support another assignment agreement in another
country.

3.1.3. Direct export
The import-export business unit that directly signs a foreign trade contract, as a party, must
organize the performance of such contract. The contract signed between the two parties must be in
accordance with national and international laws, and at the same time, make sure national interests
and ensure the business reputation of the enterprise. When the export volume is large enough and
the company wishes to focus its resources on developing the international market, it is proper to set
up an export organization (branch, department). This export organization can be in the country or in
the foreign market. In this case, the exporting organization takes care of all export functions from
identifying potential markets, segmenting markets, arranging ways, exporting documents,
transportation, planning and implementing plans. Marketing plans include pricing, promotion, and
distribution of products for international markets.

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Table 9: Advantages and Disadvantages of Direct export
Advantages

Direct access to foreign markets so businesses can grasp market developments and market needs. From there,
businesses will have plans for each specific market to improve their business efficiency in the international
market.
Business units are active in business, can penetrate the market on their own and thus can meet market needs,
elicit and stimulate demand. If the unit organizes good business activities, it will bring high business efficiency,
assert itself on products, brand,... and bring prestige to products in the world.

Disadvantages

In the condition that the enterprise has just started doing business in a short time, it is very difficult to apply the
form of direct export. Because of limited production conditions, little understanding of the international market,
the prestige of product brands is still unfamiliar to customers. Not to mention, businesses also must bear a large
cost from export tax.
The distance between the buyer and the seller is very large, so when the transaction is done, there may be many
unforeseen risks. For example, the risk occurs because the company is not knowledgeable about products,
partners, and markets.

3.2. INFILTRATION STRATEGY CHOSEN BY VINH HOAN
3.2.1. Direct export
Vinh Hoan Company builds a direct distribution system in the European market, which means
that it can distribute directly to consumers for final products. To build a direct distribution system in
Europe, it is necessary to have the support of the government, the Vietnam Association of Fisheries
Exporters and Producers (VASEP).
Setting up representative offices in European market countries with the following tasks:
collecting information on the market: information on the management mechanism of fisheries
imports, information on fluctuations in the supply and demand of fisheries prices of the market. ,
information about competitors; Looking for partners to buy fisheries; Coordinate with other

company organizations to organize exhibitions, customer conferences, direct marketing; Searching
for effective forms of aquatic product distribution; Selling goods online (e-commerce).
Besides, we have a great advantage in terms of human resources. We have an abundant number
of workers with a hard-working nature that is not afraid of hardship. The team of workers in the
fisheries industry has contributed to the success of production-export activities. The human
resources in the industry are constantly improving in terms of technical and professional
qualifications.
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Table 10: Some Decision about Direct Export
Decree No. 13/CP dated 2/3/1993 aroused the potential of the whole country in developing the fisheries sector, especially towards
export.
Decision No. 400/TTg dated 7/8/93 allowing royalty exemption, sales tax and profit tax, export tax refund for 3 years for offshore
fishing activities.
Decision 428/TTg issued on 7/8/95 on investment “Restore and perfect fisheries infrastructure” including construction of fishing
ports, long-term loans with preferential interest rates, promotion promote research and application of scientific and technical
advances, develop post-harvest processing technology...
Decision No. 251/1998/QD-TTg on policies to promote fisheries export.

In addition, direct export is even more convenient when the EVFTA Agreement officially takes
effect from August 1st, 2020. The EVFTA will be a huge boost for Vietnam's exports, helping to
diversify export markets and products, especially agricultural and aquatic products, as well as those
that Vietnam has many advantages compete. Commitments to fair, equal treatment, safe and full
protection for each other's investments and investors in the IPA Agreement will also contribute
positively to building a legal and investment environment. transparent investment, from which
Vietnam will attract more investors from the EU and other countries.
3.2.2. Difficult
Table 11: Difficult of Direct Export
Risks when

A leading risk of Vinh Hoan company when exporting to the European market is the concentration of the

entering the

market. Since there will be companies that have come before that already have stable distribution channels

European

and high brand awareness, creating a brand as well as increasing brand awareness is a difficult problem for

market

the company.
Second is the need to find a reliable partner. Because if you choose the wrong partner, it will greatly affect
the business direction and reputation of the company.
The third is about the legal system. Each country will have its own laws, and when there is a dispute, the
foreign company will be much weaker. Sometimes there will be no policies to support foreign businesses as
well as the court will favor local businesses, language barriers, etc.

Fisheries

On August 10, the World Bank and the Vietnam Association of Fisheries Exporters and Producers (VASEP)

exports to the

co-organized a webinar to announce the impact assessment report on non-compliance with regulations on

EU dropped

combating illegal fishing. legal, unreported and unregulated (IUU).

sharply
because of the

According to VASEP, the IUU yellow card of the European Commission (EC) has caused Vietnam's
fisheries exports to the European Union (EU) to decline continuously from 2017 to now. After 2 years of

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IUU yellow

being affected by the IUU yellow card, fisheries export turnover to the EU decreased by 12%, equal to 183.5

card

million USD.
This downward trend will continue to extend further into 2020, especially due to the double impact of the
COVID-19 epidemic, IUU yellow card and Brexit, fisheries exports to this market decreased by 5.7%
compared to 2019.
According to many experts, the consequences of the IUU "yellow card" have caused many losses to the
fishing and export activities of the fisheries industry. Currently, Vietnam's fisheries exports to Europe are
down 35% compared to 2017.
As a fisheries exporter, Vinh Hoan company is also greatly affected by IUU yellow card.

COVID-19

According to the Vietnam Association of Fisheries Exporters and Producers, in the context of applying

pandemic

Directive 16/CT-TTg of the Prime Minister in 19 southern provinces and cities, the production and export of
fisheries from the second half of the July 2021 shows signs of significant decline.
Businesses are burdened with costs arising from COVID-19 such as equipping workers to work 3 on-site,
paying extra wages, weekly testing costs, while advice and logistics costs increase. strong...
Because of the raging epidemic, Southeast Asian countries in general and Vietnam in particular, had to close
their doors to prevent the disease from spreading. This is a huge obstacle to the export of goods in Vietnam.

3.2.3. Remedial measures
•

Regarding IUU yellow card issue

To overcome the "yellow card" of the European Commission (EC), it is necessary to strictly
manage the recording and submission of fishing logs to trace the origin of caught fisheries.
To remove the IUU "yellow card", in 2017, Vietnam issued the Fisheries Law along with a
series of different efforts based on the EC's recommendations. Specifically, we have built a database
of fishing vessels (registration, registration, issuance of fishing licenses) connecting from central to
local.
Along with promoting propaganda and raising awareness for fishermen about the consequences
of illegal fishing, there should be stronger sanctions for these activities, even the application of
criminal measures. against violators.
•

Regarding the COVID-19 epidemic

In order to overcome the consequences caused by the COVID-19 epidemic, VASEP has just sent
a petition to the Prime Minister and relevant ministries and sectors to propose solutions to support

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the recovery of production, supply chain as well as livelihood for millions of workers and farmers,
fishermen exploiting and producing aquatic materials.
Vinh Hoan Company proposed to allow to be proactive in making production plans, enterprises
that are temporarily suspending production if they prepare enough anti-epidemic conditions, they
will be able to reopen in time to fulfill export orders.
In the current emergency situation and difficulties arising from maintaining "3 on-site"
production, in order to have timely support for enterprises to restore production - export, VASEP
proposed to the Prime Minister directing the local government to urgently deploy the existing
support packages of the Government. There are priority policies on reducing bank loan interest
rates; reduce electricity bills by 30% at least by the end of 2021; reducing the contribution rate of
trade union contributions from 2% of the salary fund to 1% of the salary fund so that enterprises can
have resources to invest in the recovery of production-export after the "3 on-the-spot" period.
•

Overcoming risks when entering the European market

It is necessary to develop a strict market penetration strategy, to grasp the opportunities and
weaknesses of rival companies to create a competitive advantage for the company.
To find a reliable partner, it is necessary to learn about their business activities, consult their
customers and partners to verify the level of credibility.
Before entering the market, it is necessary to understand the legal processes and important legal
rules. Setting up a direct local distribution channel without a supportive policy will be a big obstacle
to the development of the business.
3.2.4. Deployment method
•

Marketing department

It is necessary to invest and operate actively by researching the European market to have a
reasonable distribution channel, have a customer care and support system to work directly with
customers via network, telephone or online.
•

Finance department

Investing in direct distribution channels in Europe requires strong financial resources.

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•

Human resource management department

Implementing this strategy requires the company's human resources ability to have experience
operating in the European market and their culture.
Before proceeding to export goods to the international market in general and the EU - Europe in
particular, Vinh Hoan company needs to complete the necessary documents as follows:
Table 12: Documents need to complete
Commercial contract

Commercial invoice

Certificate of Origin (C/O)

Goods packing slip

Customs declaration

Insurance documents

And the most important thing for the items specified for export to the European market is the CE
Marking certificate, which is indispensable for most items in the European market.

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PART 4: INTERNATIONAL MARKETING STRATEGY OF VINH HOAN
4.1 INTERNATIONAL MARKETING STRATEGY OF VINH HOAN COMPANY
Over the past several decades, international marketing has experienced rapid development.
Participating in an extremely fierce competitive environment, especially when the trend of
internationalization of the economy is very strong, Vinh Hoan company has constantly improved its
international marketing activities. These activities are aimed at penetrating new markets, improving
sales and reputation of Vinh Hoan brand in the international market. However, completing
marketing activities is an important first step to help Vinh Hoan gain a firm foothold in the fisheries
market, specifically the Company's pangasius fillet. As mentioned above, the Company mainly
exports products from basa, therefore, this part of the 4Ps strategy also focuses on understanding and
analyzing the Company's activities for basa products.
4.2 PRODUCT STRATEGY
In international marketing, international product decisions are important because they will affect
international pricing, distribution and promotion strategies as well as the success or failure of the
company in the international market. Therefore, with decision products in the domestic market,
international decision marketers will be more coordinated to do things differently from schools,
differences in needs, preferences for attributes. product special qualities, packaging materials,
packaging formats, standards,..
Thus, the importance of product strategy is great and the product is also the image of the
company in the market. So, a company's international product policy must always keep up with

ever-changing needs, tastes, regulations, and standards that are ever higher and more stringent. To
do this, product research and development is essential for companies. Research and development
activities have been interested and invested by Vinh Hoan Company for many years. Every year, the
company fully participates in fairs and exhibitions at home and abroad, through which to learn,
research and create new products. Over the past 20 years, the Company has launched many valueadded products (VAT) in accordance with market requirements and consumer tastes, apply new
technologies to make products of higher value, more diverse.
Rolling on the world market, Vinh Hoan soon saw that product quality is a vital factor and
determines the development of business products and activities of the enterprise. Due to the
characteristics of the business line, it is always required to meet strict requirements in terms of
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