In 1993, Thanh Quoc fish sauce production facility, the predecessor of Thanh Quoc Fish Sauce Production and Trading Company Limited, was established... EXECUTIVE SUMMARY Received a reque
PROBLEMS OF THANH QUOC FISH SAUCE COMPANY’S DISTRIBUTION
Thanh Quoc Fish Sauce Company struggles with low brand recognition due to ineffective marketing strategies and a lack of competitive pricing compared to other products on the shelves.
Thanh Quoc Company lacks effective communication policies, resulting in insufficient information for customers and end-users This failure to meet customer service expectations hinders proper information sharing, leaving customers dissatisfied with the service provided.
Thanh Quoc is currently grappling with elevated costs, particularly in the Physical Possession function, as the factory absorbs most transportation expenses to retailers without utilizing multiple distribution channels This situation poses a significant threat to the company's profitability.
Thanh Quoc has yet to fully leverage direct selling channels, particularly in major cities, and some e-commerce platforms distributing its products are operating inefficiently If these issues persist, they may negatively impact the company's overall distribution system.
Furthermore, Thanh Quoc Company has not established a comprehensive social media network to meet the service output demand for information sharing from customers
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For online channelS - CC 0221110222111 22 11 KY TY gu ng KT CEEk g kEkx 46 Il ANALYZE THE STRATEGIC PROPOSAL FOR THE NEW MARKETING CHANNEL
To enhance profitability and efficiency in the E-commerce sector, it is crucial to evaluate the effectiveness of platforms like Tiki and Lazada Currently, the company does not fully utilize these platforms for product distribution, resulting in unmet customer needs and the creation of service gaps Furthermore, the sales volume and revenue generated from these E-commerce channels are underwhelming The commission fees paid to these platforms further diminish the overall effectiveness of the distribution strategy and negatively affect the company's bottom line.
Il ANALYZE THE STRATEGIC PROPOSAL FOR THE NEW MARKETING
CHANNEL STRUCTURE OF THANH QUOC FISH SAUCE COMPANY
After steadily developing the Distributor system, Thanh Quoc will develop the Retailer channel under the management of the Distributor
End-users Thanh Quéc Company
Pros e Physical possession: It supports the manufacturer in
No transporting goods to retailers e Promotion: Attracts more retailers e Ordering and payment: Controls the quantity of goods ordered e Controls retailers to avoid conflicts within the channel
Cons No e Negotiation: Meets all the needs (price negotiation, rights the distributor e Financing: Long payback period, incurs opportunity costs
Using distributors can significantly minimize logistics challenges, as they typically have established systems for transportation that help reduce costs Partnering with distributors in targeted areas enhances visibility among local retailers, boosting brand recognition among end-users For Thanh Quoc Company, the process becomes streamlined by simply determining quantities with the distributor, who then efficiently handles distribution to retailers This arrangement not only facilitates quicker fund recovery but also saves valuable time for the business.
47 e Having distributors for each region will help the company control retailers regarding pricing, policies, after-sales service, etc., to avoid conflicts within the retailer system
End-users Thanh Quéc Company
Pros No Physical possession + Ownership: Circulation and storage of ¢ before reaching the retailers' warehouses
Cons No Information sharing: Only receiving feedback from customers through retailers Thanh Quoc does not closely manage the activities of the wholesaler
Table 14: Pros and cons of Wholesaler b That solves: e Narrowing the gap between the distributor and retailer e Solving the issue of storage for the distributor
Thanh Quoc plans to enhance its retail channel by leveraging its established distributor system, targeting stalls in traditional markets, tourist markets, and local grocery stores This approach presents both advantages and challenges, as it aims to expand market reach while navigating the complexities of diverse retail environments.
End-users Thanh Quéc Company
Pros e Spatial convenience: Solves the e Information sharing: Receivin problem of convenience for direct feedback from customers to reach various point customers
Delivery and waiting time: Reduce waiting and delivery times
Bulk-breaking: Can meet the quantity of purchases that end-us need
To effectively cater to end-users, it is essential to offer a diverse assortment of products and brands Implementing strategic promotions can attract and engage these consumers Additionally, ensuring the quality of goods through thorough checks before delivery is crucial for maintaining customer satisfaction.
Cons Information sharing: Not much Risk: There is no suitable customer information about the product is | service for end-users after purchasi provided the product
Retailers play a crucial role as the final checkpoint before goods reach end-users It is essential for them to meticulously inspect products, focusing on aspects such as expiration dates, quality, and packaging This thorough evaluation not only ensures the delivery of safe and high-quality products but also minimizes the risk of returns from consumers.
Helping Thanh Quoc Company sell more products, as retailers implement promotions that resonate with end-users ensure they reach end-users in the best possible condition
Moreover, retailers are the direct point of contact with customers, so they can provide authentic and direct feedback on products and the company
Retailers not only fulfill various service output demands for end-users but also contribute to the overall customer experience
Expanding the retailer network increases the number of points of sale, providing customers with more options for their purchases This expansion enhances convenience by reducing waiting and delivery times, allowing end-users to buy exactly what they need in varying quantities Furthermore, retailers offer a diverse selection of products, featuring not only those from Thanh Quoc Company but also from other brands, thereby enriching the shopping experience for consumers.
2.2 General Trade - Thanh Quoc Fish Sauce Showroom a Pros and cons
End-users Thanh Quéc Company
Pros e Delivery and waiting time: e Information sharing: Receivin
To enhance customer satisfaction, it is essential to reduce waiting and delivery times through direct feedback from end-users Ensuring the quality of goods before delivery fosters ownership and trust among customers Additionally, bulk-breaking allows businesses to meet the specific quantity needs of end-users effectively Addressing customer issues promptly after purchase is crucial for maintaining positive relationships Lastly, providing excellent information sharing and customer service ensures that end-users receive the support they need, ultimately improving their overall experience.
When considering the drawbacks of spatial convenience, users may face additional costs and waiting times due to the proximity of retail points Furthermore, the need for physical possession can lead to high expenses, as it typically does not include the support of third-party distributors.
Table 16: Pros and cons of showroom b That solves: e This is a direct selling channel where products are sold face-to-face with customers
Showrooms play a crucial role in gathering authentic feedback on products and the company, enabling them to enhance customer satisfaction They effectively respond to end-users' inquiries by offering detailed information about products, related services, and after-sales support Additionally, showrooms ensure quality control by inspecting the expiration dates, quality, and packaging of products before they are delivered to end-users, guaranteeing a reliable customer experience.
End-users Thanh Quéc Company
The advantages of a diverse assortment of product lines include enhanced information sharing, allowing customers to receive direct feedback from various brands This variety not only attracts end-users through effective promotions but also ensures excellent customer service for seamless interactions Additionally, the company alleviates the burden of product delivery and supports fee-free cash withdrawals when done on time, providing further financial benefits to consumers.
Cons | Delivery & waiting time: It takes time to e Risk: No suitable customer receive the product to end-users service for end-users after purchase e Additional fees for the platform
Table 17: Pros and cons of E-commerce b That solves:
Receiving direct feedback from customers on e-commerce platforms is essential for addressing their needs and enhancing the shopping experience This feedback acts as a vital connection between the company and its customers, fostering better communication Additionally, promotional programs held during specific months play a crucial role in attracting end-users and encouraging purchases.
E-commerce platforms often have their own logistics teams, which can assist with reasonable shipping costs for the company to deliver goods to end-users Additionally, if the company needs to withdraw funds, there will be a reasonable platform fee if the company withdraws funds before the due date without extending accounts payable some comments: Although there are significant benefits, the company doés not sell products efficiently on e-commerce platforms such as Tiki and Lazada It is necessary to consider discontinuing these two platforms and focus on developing the website and Shopee channel - channels that are currently operating effectively
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The wholesaler serves as a crucial link between distributors and retailers, alleviating the physical possession burden faced by manufacturers and distributors In addition to sharing responsibilities like ownership, physical possession, and negotiation with distributors, wholesalers also manage retailer systems and provide essential feedback to distributors This strategic role enhances the efficiency of the distribution channel.
We aim to partner with Distributors to perform market surveys that will help us identify potential Wholesalers across provinces or clusters of neighboring provinces Our strategy involves targeting one Wholesaler for every 2-3 provinces or cities, which would result in approximately 9 Wholesalers in the Northern region and 7 Wholesalers in the Central region.
Timeline: combine between manufacturer and distributor
In September 2024 Finding Wholesalers list in Octorber 2024 Dealing with Wholesalers in November 2024 Making decision
Table 19: Timeline for Wholesalers'channel 2.3For Retailers
2.3.1 Maintain existing Retailers channel (belongs to Modern Trade channel)
Thanh Quoc Fish Sauce Company is actively developing a robust Modern Trade channel, focusing on retailers Their retail outlets include well-known chains of supermarkets, convenience stores, and minimarts, which are recognized for their strong market presence.
55 share in the domestic retail market Therefore, there is no need to delve further into the positions of retail outlets in the Modern Trade channel
2.3.2 Creating new Retailers managed by Wholesalers a Reason
Expanding the network of retailers managed by wholesalers enhances product accessibility for end-users of Thanh Quoc Company Retailers play a crucial role by sharing responsibilities with distributors and wholesalers, including physical possession, ownership, negotiation, and promotion Additionally, they serve as a vital source of customer feedback, providing the company with intimate and accurate insights.
Timeline: combine between wholesalers and distributor Manufacturer just receive information and approve the new Retailers
Time Activities in December 2024 Receiving Retailers’s information from
Distributor and Wholesalers in December 2024 Making decision
Table 20: Timeline for Retailer's channel 2.4 For E-commerce platforms
2.4.1 Removing inefficiency E-commerce platforms (if any) a Reason
At present, both e-commerce platforms lack growth potential in sales and revenue Additionally, Thanh Quoc has struggled to effectively execute promotional activities and share information on these platforms.
The plan is to withdraw from 2 e-commerce platforms, Tiki and Lazada
January 2024 — June 2024 Reevaluating the efficiency of each platform in June 2024 Making decision (if any)
Table 21: Timeline for E-commerce platform 2.4.2 Maintain current efficient E-commerce platforms
Shopee's e-commerce platform is demonstrating positive trends with stable sales figures, indicating a strong market presence Additionally, it enhances the distribution channel by offering essential functions such as promotions, information sharing, customer service, financing, and efficient transportation support through its in-house delivery system.
2.5 Expanding the new showroom (belongs to General Trade channel) a Reason
Thanh Quoc has the potential to be an effective channel if utilized correctly, but currently, it only has one showroom in Phu Quoc, which is distant from many potential customers This showroom serves as a valuable resource for information sharing and customer service, allowing end-users to explore and experience products firsthand.
Fish sauce is a vital condiment in Vietnamese cuisine, integral to daily meals Expanding showrooms enables customers to discover a wider range of Vietnamese cooking spices, which can enhance brand recognition.
Planned to open an additional 3 showrooms in the three centrally governed cities: Hanoi, Da Nang, and Ho Chỉ Minh City - where many potential customers are gathered
In March 2024 Grand Opening of Ho Chi Minh City’s showroom
In May 2024 Grand Opening of Da Nang’s showroom
In July 2024 Grand Opening of Ha Noi’s showroom
Table 22: Timeline for Showroom's grand opening
The analysis of market segmentation by age groups reveals distinct consumer preferences, enabling Thanh Quoc Company to craft targeted marketing strategies By examining both traditional retail and e-commerce distribution channels, the company can adapt to evolving consumer behaviors With a solid presence in the domestic market, Thanh Quoc should pursue international expansion while navigating the outlined challenges and opportunities Strategic decisions in marketing, distribution, and product development will be crucial for the company's success Leveraging these insights will not only enhance Thanh Quoc's market position but also facilitate growth in the dynamic fish sauce market Ultimately, while fish sauce holds significant cultural and culinary value in Vietnam, it must evolve to meet changing market conditions and consumer expectations This report aims to support the innovation and promotion of the fish sauce industry, preserving its rich cultural heritage.