Tài liệu Consumer’s perception of low product quality of saigon special in saigon beer alcohol beverage corporation (sabeco)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation (SABECO) Name: Tran Thi Thanh Huyen ID: 221500030 MASTER OF BUSINESS (Honours) Ho Chi Minh City- 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation (SABECO) Name: Tran Thi Thanh Huyen ID: 221500030 SUPERVISOR: Dr. LE NHAT HANH MASTER OF BUSSINESS ADMINISTRATION Ho Chi Minh - 2017 Acknowledge I would like to thank all of my family, friends and colleagues who inspired and supported me in this thesis writing venture. I am really indebted to my supervisor Dr Le Nhat Hanh whose proper guidance and close supervision helped me to carry out this research to the right direction. I would also like to show my gratitude to all of respondents who shared their experiences with me, thanks for all valuable time they have invested in this study that gave me precious information for research. Last but not least, I would like to express my thankfulness to my company Sabeco, my Boss and all colleagues who supported me a lot during the time doing this research. I TABLE OF CONTENTS EXECUTIVE SUMMARY………………………………………………………..…………...1 CHAPTER 1. PROBLEM IDENTIFICATION………………………………..……………..2 1.1 Background of the company…………………………………………………….…….…….3 1.2 Background of the problem…………………………………………………………….......7 1.3. Problem identifying..……..…………………………….……………………….….……..11 1.3.1. Problem justifying……………………………………………………………….………..11 1.3.2 Justify the existing of problem………………………………………….……….………..16 1.3.3. Definition problem……………………………………………………………….……….22 1.3.4. Justify the importance of the problem: literature regarding, consequence effect….…….23 1.4. Potential causes……………………………………………………….………..………….27 1.4.1. Opinions from other people……………………..…………………………………….….28 1.4.2 Situation…………………………………………………….……………………….…….29 1.4.3 Product physical properties………………………………………………………….…….29 1.4.4 Storage, use, and convenience of beer……………………………………………….…….30 1.4.5 Cause - effect tree………………………………………………………………………….31 1.5. Causes validation ………………………………………………………………………….32 CHAPTER 2. ALTERNATIVE ANALYSIS…………………………………………………36 2.1 Alternative Solutions………………………..……………………………………….……..36 2.1.1 To improve warehousing can adapt to these rule in preservation ………………….……..36 2.1.2 Invest on transportation vehicle beer suitable for ensure quality product………….……..38 2.1.3 Improving reasonable distribution network…………………………………………….….39 II 2.2 Solution comparison……………………………………………………………………...40 CHAPTER 3. ACTION PLAN……………………………………………………………….43 CHAPTER 4. CONCLUSIONS AND RECOMMENDATION…..……………………….52 REFERENCES ………………………………………………………………….……………..54 APPENDIX 1 …………………………………………………………………….……….……58 APPENDIX 2 ……………………………………………………………………….………….61 APPENDIX 3 ……………………………………………………………………….………….63 III LIST OF FIGURES Figure 1: Organizational system of SABECO Figure 2: Market share of beer market in 2015 Figure 3: Market share of Sabeco from 2012 to 2015 Figure 4: Saigon Special did not choose much comparing to Heineken, Tiger by users. Figure 5: Level of customer’s satisfaction Saigon special beer Figure 6: Cause-and-effect tree Figure 7: Model of determinants and consequences of perceived product quality LIST OF TABLES Table 1 : Company information Table 2 : Market share of all products of Sabeco from 2013 to 2015 Table 3 : Sample details Table 4 : Customer’s evaluation for Saigon beer report Table 5: Technical requirement of Saigon Special beer IV LIST OF ABBREVIATIONS - SABECO: Saigon Beer-Alcohol-Beverage Joint Stock Corporation - HABECO: Hanoi Beer and Beverage Corp - MoIT: Ministry of Industry and Trade - BMI: Business Monitor International - SATRACO : Saigon Trading Corporation - SABETRANJSC: Sabeco transportation joint stock company. - SABECUCHI: SABECO Cu Chi Factory - QA: Quality Assurance - VBA: Vietnam Beverage Association V EXECUTIVE SUMMARY Beer industry has witnessed higher total volume growth despite the rise in the Special Consumption Tax from 50% to 55% since 2016. Positive economic conditions in Vietnam have boosted consumers’ incomes and forced them to shift from unbranded to branded beer, as higher quality and taste. Saigon Alcohol Beer & Beverages Corp (Sabeco) saw a reduction in its market share although it maintained its lead in beer. Saigon Special is a new brand of SABECO that is aiming at the target segment of people who tend to drink premium beer. Although at present SABECO is the leading beer producer with the market share accounting for 39% in 2016 however the launching of its new brand Saigon Special was not so successful because SABECO lacked of an effective distribution plan especially focusing on preservation during transportation activities for this new brand. In exploring the weakness point of the product, Saigon Special, we have given some recommendations to grow market share and market size by investment into quality ptoduct to create the customer need. Customers’ perspective of quality has been proven to be the primary element contributing to the success of the company. In which, four important factors affecting customers’ perspective of quality are opinions from other people, situation, physical properties and storage, use, convenience of beer. The purpose of this thesis is to identify the root cause led to the main problem after analyzing all possible causes. Strongly invest for retailer in terms of point of sales material (POSM), display (for short term) and invest on distribution system in both policy and display, especially at point of sales (for long term). Finally it implicates potential solutions that can be applied to solve this problem. CHAPTER 1: INTRODUCTION The first chapter presents an introduction to the research, as well as introduces about company background and discusses the purpose, objectives and research problems of this company. Chapter Two will present the literature review which explains the theoretical framework and give some solutions for this research that will be used for the survey. In this chapter, the two main research methods, namely quantitative and qualitative research, will be discussed. The third chapter will present the empirical findings. Lastly chapter fourth wills conclusion and recommendations for companies and further studies. 1.1 Company background SABECO is built in 1875. In June 1977, the factory was renamed as Saigon Brewery factory. In 1993 the factory was renamed as the Saigon Beer Company and became one of the company has the most modern equipment in the beer industry in Vietnam. In July 2003, Saigon Beer Company expended and became one of leading enterprises in the beer industry in Vietnam- Sabeco. In early in 2008 became SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION upon the government's decision. For over 30 years of operation in the brewery, alcohol and beverage industry, SABECO has developed to be market leader in Vietnam’s beer business in many respects. Items Company name, location. Description SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION 6 Hai Bà Trưng, Bến Nghé, 1, Hồ Chí Minh Website Website : http://sabeco.com.vn Product Main product classes Beer (main product), soft drinks, and low alcoholic drinks. Table 1: Company information 2 Achievements SABECO recognized titles as of to date include: The brand name “Saigon Beer” has been recognized as the “trusted brand” for 22 years; The “Saigon Beer” product has been repeatedly voted as a “High – quality Vietnamese product” for 13 consecutive years from 1997 to 2012; The “333” canned beer product won the Silver Medal at the international beer content held in Australia in years 1999, 2000, 2001. SABECO business includes three main fields. First, manufacture and sale kinds of beer, alcohol, beverage, packaging, label for beer, wine, soft drinks and food; Sales materials, equipments, parts related to the production of beer, wine, soft drinks, assorted flavors, juice for the production of beer, wine and soft drinks; food. Second, import and Export all types of: beer, wine, soft drinks, materials, equipments, wine and soft drink. Third, provide training services, research, technology transfer, investment consulting, construction, installation, repair and maintenance in the Beer - Alcohol – Beverage industry and food. SABECO main products include 333 Can and Bottle Beer, Saigon Lager Beer (Sai gon Xanh), Saigon Export (Sai gon Do) and Saigon Special Beer (Sai Gon Lun). Saigon Do, 333, Saigon Xanh are among 15 best – selling products of 36 cities. Saigon Do takes first place in On – Premise channel while 333 Can become leader in Off – Premise Consumption. SABECO Vision to 2025 is to become “national leading” Beverage Group, with high position in regional and international market”. By the end of 2016, Sabeco included 23 branches and 21 co-owned joined ventures. A part of them are dealing only in beer trading or indirectly connected to beer. The production capacity of the 23 breweries reaches about 1800 mln liters per year. In view of growing output volumes the company is investing into construction of new breweries planning to bring their net capacity to the level of 2000 mln liters by 2020. 3 Missions SABECO defines four Missions to follow, which are:  to develop Vietnam Beverage Industry to the world level;  to heighten Vietnamese culinary culture;  to improve Vietnamese life quality through the provision of high quality, safe and nutritious beverage products;  to bring real benefits to shareholders, customers, partners, employees and society. SABECO defines his core values into: Traditional Brands, Social Responsibility, Cooperation for Mutual Benefits and Continuous Improvement. The Organizational System SABECO has a total of 23 subsidiaries and 21 associated companies and joint ventures operating in the production chain (see Fig.1) as follows:  Production, supply and packaging materials .  Provide input transport services, logistics, warehousing and other auxiliary activities  Production and sales, distribution of beer, wine,  Investment in other industries, mainly construction and supply estate services lemongrass 4 Figure 1: Organizational system of SABECO Supply team ProductionTechnology team Marketing team InvestmentDevelopment team FinanceAccount team SABECO Investments outside the industry SABECO NCT SaiGon Cu Chi FActory Subsidiaries Material-Packing Manufacturing Distribution Commerce SABECO Ltp SG-MienTay Factory SG-QuangNgai Factory SG-DongXuan Factory Packing SG beer company SG-NgheTinh Factory Glass Malaya Company SG-SongLam Factory Packing Samiguel Phu Tho Company SG-HaNoi Factory Commerce Northern SABECO Commerce North Central Coast SABECO Commerce Central SABECO SG-SocTrang Factory SG-PhuLy Factory SG-PhuTho Factory SG-TayDo Factory SG-BinhTay Factory SG-BacLieu Factory Commerce Central Highland SABECO Packing- Warehouse BinhTay Food’s SABECO company Auxiliary company KKjkkjCompanyCoexa minationAPacking Mechanical company Commerce South Cental SABECO Commerce East SABECO SG-NinhThuan Factory SG-VinhLong Factory Commerce East Northern SABECO Commerce Tien river SABECO SG-KienGiang Factory SG-DakLak Factory Commerce HSABECO BinhTay Wine Company ChuongDuong Beverage 5 Transportation Company 1.2 Background problem 1.2.1. Current situation of Sabeco Sabeco has been remained the leading position in beer industry despite the appearance of numerous beer brands in Vietnam recently. According to Vietnam beer alcohol beverage association,1Sabeco has kept the highest market share until 2015, followed by Heineken and Habeco. It takes about 43% of market share while Heineken has 21.5% and Habeco with 19.7% (Figure 2) Figure 2. Market share of beer market in 2015 However, although holding the first position in Vietnamese beer industry, market share of Sabeco has been decreased continuously. Figure 3 shows that Sabeco gets the market share of 51.4% in 2012 (more than 50% of total market), however it drops to 47.5% in 2013, 45.2% in 2014 and 43% in 2015. Over 3 years, its market share has been reduced up to 8.4%. 2 6 Figure 3. Market share of Sabeco from 2012 to 2015 The decrease of market share has posed an outcome of many problems. How to identify and solve these problems to gain the market share again is the main objective of this thesis. 1.2.2. Current situation of Saigon Special beer According to a research conducted by Sabeco in 2010, Saigon Special beer is a brand that belongs to the first four brands out of list top ten most popular beers within 36 biggest cities in Vietnam. Its target segment is Vietnamese people who prefer premium beer, white collar and from middle to high income. It is the first brand oriented as a premium brand of Sabeco and positioned as high-end product which targets to young and dynamic consumers. 3 Regarding the decrease of market share of Sabeco, Saigon special beer has been chosen as the main product to this research because in comparison with other products like 333, Saigon export… market share of Saigon special beer has been decreased continuously at the highest level, from 23.4% in 2013 to 19.8% in 2014 and 18.7% in 2015. 4 7 Table 2: Market share of all products of Sabeco from 2013 to 2015 Product 2016 2013 2014 2015 Saigon Special 23.4% 19.8% 18.7% 18.0% 333 beer 36.8% 36.7% 37% 37.5% Saigon export 29.3% 30.2% 28.9% 29.3% Others 11.2% 13.3% 15.4% 15.2% Once customers can remember about the brand at their first thinking, it means that this brand has chance to attract the purchase. This feature is the most important one of the evaluation about brand awareness. According to the research of 2015 survey by major Japanese brewer Kirin Holdings Co, Vietnam, Saigon special got 5.1% among 395 respondent for the question " What’s your most favorite brand beer” and stood at number 5 in consumer’s top of mind . 8 The figure 4 shows that Saigon Special did not choose much comparing to Heineken, Tiger by users. Customers can contact to customer support department for any questions or complaint’s information during using period, they completely unsatisfied with the quality of product what did not meet their desire. According to Kim Long Who is a food’s engineer working at Quality Assurance said that: “Each year he received some of consumers’ complaints about quality to product. Until June, total is 6 cases complaints from consumers. Among that have five cases related to quality product and one case is mistake of packing. Detail to, five cases related to quality product , the consumer complain about physical characteristics such as crusted beer, sour beer, ….He must be collect these mistake products from complainers and check again 9 quality product one more. Although, before delivering product to customers, the technical staff checked carefully product status”. Regarding yearly report of marketing team from customer support department, the level of customer satisfaction was collected in period 2013-2016. The report showed the percentage of unsatisfactory of SABECO’s customers was low level around 11%-22% during 03 years from 2013 to 2016. Nonetheless, from year 2013 and later, it exhibited an increasing trend of unsatisfactory of clients. Level of customer’s satisfaction Saigon special beer 80 70 60 50 40 30 20 10 0 Satisfaction Normal Unstatisfaction 2013 2014 2015 2016 The figure 5: Level of customer’s satisfaction Saigon special beer From these tentative problems are showed. The author continues make clear to find out the real problem. So, the problem here is that what determinant factors affect perception quality consumer’s Saigon Special beer in Ho Chi Minh City? 1.3. Problem identifying 1.3.1 Problem justification In this part, the author will justify whether the thing is the real problem at SABECO for Saigon Special product. Qualitative and Quantitative approach was adopted through secondary data, survey 40 people in 10 Ho Chi Minh City. A survey of consumer was carried out in which they were questioned about important factors which affect beer consumption, brands of beer they consume and evaluation on Saigon Special beer based on a range of factors linked to consumption. It is obvious to see that, for products in Food and Beverage category, factors which determine product quality are still considered to be most important, not only for elder consumer who has several experiences but also for the youth. Most previous study cannot be summarize easily because of a lack of consistency across research findings and the different methods and research designs used to identify attributes comprising product quality. 5 Normally, the importance of a given set of attributes for a product category will be evaluated by consumers. Then, they will evaluate the level to which each brand has those attributes. Their estimate of quality is obtaining the d by multiplying the attribute's importance by the rated evaluation of the attribute, and next step, adding to all of the attributes to obtain an overall product quality status. 6 Different authors have studied perceived quality and preferences about beer using different approaches. According two author’s discussion about the relationship between market share and customers’ quality perceptions, market share can influence quality by creating positive network externality. In other words, when a product has positive network externality, bigger market share brings higher quality perception of customer.7 According to the writer that sometimes we are affected by other opinion’s people when we decide to buy a brand, because of, more consumers buying this product which the brand is popular. And most of people not want to be outdated. 8 The customers are easily affect to behavior buying, from that it effect to market share in determining product quality. When there is no other information,. This is why market share is a frequently used indicator for consumers to tell product quality.9 However, it is hardly reliable to judge product quality by market share solely as products are diverse. It points out that product category undoubtedly influences the impact market share has on quality perception. How does the researcher know the consumers' impressions are accurate if only one measure is used? The validity of a construct is an 11 issue of measurement rather than definition. A valid measurement tool must be selected to make operational a comprehensive construct for the meaning of product quality.10 1.3.2 Problem existing Saigon Special was selected as a convenient illustration of some products in SABECO of product quality. A wide selection of competitive brands is available for comparison, as well as varied intrinsic physical differences of quality. A convenience sample of 40 respondents was chosen for this survey. However, the results are only for illustration and are not representative of all consumers. The study design and application are described in the appendix. The customers' perceived product quality consist of both types of feature, extrinsic and intrinsic, For that reason it was really essential to evaluate these two dimensions independently: the perceived quality regard to the brand and the perceived quality regard to the intrinsic product characteristics. For these quantify, we collected the consumer survey of potential buyers and paid attention to the technical characteristics of Saigon special. In the survey which connect with the “perceived quality attributed to the brand” (PQB) variable, the writer will start doing the evaluation of the brands that consumers provided. in the detail, the surveyors will give some directly question about the level of quality the consumers would ensign to each of the 8 brands in the question data, on a five-point Likert scale following already validated quality scales 11.This procedure provided us with a separate score for each of the 8 brands that were offered for sale in the study period. Therefore, we obtained a new enclosed variable; the values are between one and five, which collects the average score of the perceived quality attributed to the brand, according our surveyed consumers. As we searched and asked for the brand quality assessment, all products of a particular brand have the same value for this variable. 12 With the “perceived quality attributed to the intrinsic product characteristics” (PQIC) variable, we combined information related to the technical attributes and subjective information from the consumer survey. First, for the Saigon special product, we search for the manufacturers' estimation of the four most important intrinsic technical characteristics for paying for it (Mitra and Golder, 2006) 12. in this way, we pick up enclosed values—between one and five—which collect the quality level of each these four technical characteristics depending on their objective features. Result of survey After sending the questionnaires to 40 people, the author adequate data from primary research were collected. As the results from our survey: Table 3 : Sample details 1. Gender: 15% Under 20 7.5% 20 - 25 30% 25-30 47.5% Over 30 3. Job status 85% female 2. Age breakdown male 15% Under – graduated student 20% Having just graduated (< 6 month) 12.5% Staff 13