INTRODUCTION
General introduction
The confectionery industry has a rich history that dates back to the Middle Ages, when humans began crafting delightful treats from sugar and carbohydrates to share with guests or reward well-behaved children This enduring love for confectionery continues into the modern era, enabling the industry to thrive even during challenging economic times For children worldwide, the joy of receiving candy is a cherished memory, highlighting the timeless appeal of these sweet creations.
Candy comes in various forms, including bubble gum, flavored gummy bears, marshmallows, and soft candies, alongside a wide range of snacks like potato chips, cookies, and bread These delightful treats bring immense joy to children, especially during special occasions like Halloween and Christmas, when they can indulge in sweets more freely than usual.
Both children and adults find joy in sweet treats, such as cake and chocolate bars As life becomes more complex with age, whether during moments of sadness or happiness, confectionery continues to play a significant role in sharing and enhancing those experiences.
During my time living in Finland, I've observed that people of all ages flock to the confectionery aisle in supermarkets, demonstrating a universal love for sweets among adults and the elderly alike Despite the potential health risks associated with excessive candy and chocolate consumption, the allure of these delightful treats remains irresistible to many.
Current status of Confectionery industry in Vietnam
The Vietnam confectionery industry is recognized as a promising and dynamic sector within the broader food and beverage processing industry (Vu 2015, 4) However, over the past decade, domestic companies have struggled to maintain their market share against international competitors, largely due to the effects of globalization following Vietnam's accession to the World Trade Organization (WTO).
According to the Online Trading and Investment Information Portal (Thi truong banh keo…2015), while Vietnamese confectionery companies have shown significant growth, the sector is increasingly attracting interest and investment from international firms However, a stark reality is that Vietnamese manufacturers often struggle with limited capital and outdated production technologies compared to their global counterparts.
Vietnamese companies may face challenges as they compete with larger international rivals, particularly from Thailand, known for its high-quality and affordable confectionery products However, this competition could also serve as a catalyst for growth within the local confectionery industry According to BMI's review, Vietnam ranks as one of the most appealing retail markets in Asia for food, following India, highlighting its potential for development and expansion in the sector.
The confectionery industry in Vietnam has consistently been one of the fastest-growing sectors, accounting for 40.43% of the food industry in 2015, with growth rates soaring from 20% to 40% over the past decade Currently, there are around 30 large-scale manufacturing enterprises and nearly 1,000 medium to small-scale factories, alongside various companies importing confectionery products from countries such as Thailand, Korea, and Japan According to annual financial reports, experts project that the revenue for the confectionery industry will reach 40 trillion VND in 2018, with an estimated production volume of approximately 200,000 tons.
According to Business Monitor International (BMI), Vietnam's confectionery industry experienced remarkable revenue growth of 10.65% in 2014, reaching approximately 27 trillion VND compared to 2013 This sector is poised for long-term development, driven by factors such as a youthful population, health care trends, and significant investments from international companies These dynamics position Vietnam as a highly attractive and promising market for the food and beverage industry, particularly within the confectionery segment.
Vietnam's leading confectionery brands, like Kinh Do and Bibica, are increasingly being acquired by international giants such as Mondelez International and Lotte, highlighting the growing dominance of foreign competitors in the domestic market With better salaries and access to modern technology, Vietnamese consumers are now more informed and can easily research and purchase imported confectionery products online.
Since joining the World Trade Organization (WTO) in 2007, Vietnam's economy has experienced both advantages and challenges While the membership has opened up beneficial policies for the country's export sectors, it has also intensified competition between domestic and international products Notably, imported confectionery from countries like Japan, Korea, Thailand, the USA, and Europe has flooded Vietnamese supermarkets, offering high-quality goods and well-known brands at competitive prices The reduction in import taxes for these products has further exacerbated the situation, posing a significant threat to local confectionery manufacturers.
Experts indicate that the decline of Vietnam's confectionery industry is primarily due to insufficient investment in manufacturing technology, outdated packaging designs, and a lack of focus on developing high-quality, trend-driven products Currently, half of Vietnam's confectionery offerings fail to meet market demand, as consumers increasingly prioritize health and hygiene, seeking lower sugar options However, many domestic companies continue to rely on recipes from decades past.
Hai Ha Confectionery Joint-Stock Company introduction
- Original trading name Công ty Cổ phần Bánh Kẹo Hải Hà
- English trading name HAIHA CONFECTIONERY JOINT-STOCK
- Charter capital 82,125,000,000 VND (App 3,672,853 USD)
- Owner’s investment 82,125,000,000 VND (App 3,672,853 USD)
- Address 25 – 27 Truong Dinh St., Truong Dinh Ward, Hai
Ba Trung Ward, Hanoi, Vietnam
- Website http://www.haihaco.com.vn/home.html
- Stock symbol (in Vietnam) HHC
Table 1 Haiha Confectionery Joint-Stock Company Introduction (Cong ty Co phan…2015, 2)
Haiha Confectionery Joint-Stock Company (HAIHACO), established on December 25, 1960, has evolved over 55 years from a manufacturer of fish and soy sauces to one of Vietnam's largest confectionery factories Currently, Haihaco employs 1,300 workers across seven departments and four manufacturing facilities located in Hanoi, Viet Tri, Nam Dinh, as well as branches in Ho Chi Minh City and Da Nang.
In January 2004, Haihaco transitioned into a Joint-Stock Company with an initial charter capital of 36.5 billion VND (approximately 1.6 million USD), where 51% was owned by the government and the remaining share was held by the employees On December 9, 2004, the Ministry of Industry and Trade of the Socialist Republic of Vietnam officially recognized this change.
The Vietnamese government’s investment in Haihaco will be managed by the Vietnam National Tobacco Corporation On November 8, 2007, Haihaco received approval to list its shares on the Hanoi Stock Exchange (HNX), with trading commencing on November 20, 2007 By May 2011, Haihaco successfully raised its charter capital to 82 billion VND (approximately 3.6 million USD) through the sale of shares to external investors.
Haihaco has proudly achieved the HACCP certification, becoming the first confectionery manufacturer in Vietnam to do so, demonstrating its commitment to consumer health With a rich history of 55 years of continuous growth, the company has overcome numerous challenges through the dedication of its skilled workforce, strategic initiatives, and the supportive policies of the Vietnamese government This relentless pursuit of excellence has solidified Haihaco's reputation in the Vietnamese confectionery manufacturing industry.
• Certificate of Merit from the Prime Minister (2010)
• Manufacturing and trading of confectionery products
• Export and import raw materials, machinery and equipment, consumer goods, other commodities
• Investments in other business sectors, which are not prohibited by Law of The Socialist Republic of Vietnam
THESIS TOPIC
Thesis tittle
“Research on the recent movement of Vietnam Confectionery market and potential strategies for Hai Ha Confectionery Joint-Stock Company (HAIHACO)”
Thesis purpose
This report aims to provide a comprehensive overview of the current state of the Vietnam Confectionery Industry, utilizing publicly available data from Haihaco's website and the Hai Ha Confectionery Joint-Stock Company Annual Report 2015 After thorough analysis of this information, I will propose potential strategies for Haihaco to enhance its market position, broaden its business scope, and capture a larger share of the Vietnamese confectionery market.
RESEARCH METHODOLOGY
Research hypothesis
Vietnamese confectionery companies, such as Hai Ha Confectionery Joint-Stock Company, face a critical challenge: can they produce high-quality products that rival imported options in taste while offering lower prices? This raises an important question about consumer trust in local brands Issues related to food safety, environmental concerns, and product diversity continue to hinder these manufacturers in retaining existing customers and attracting new ones.
Modern consumers are increasingly discerning about the confectionery products they choose, seeking not only appealing flavors but also attractive appearances With rising health concerns linked to excessive sugar consumption, there is a growing emphasis on the quality of ingredients and production processes The Vietnamese confectionery industry faces stiff competition, especially following the government's 2015 decision to reduce import taxes on these products to 0%, allowing international brands to enter the market with superior taste and lower prices Compared to established markets like Thailand, Korea, the U.S., and Germany, Vietnam's confectionery sector remains relatively young Today, Vietnamese consumers have easier access to a variety of global confectionery brands, often prioritizing enjoyment over price.
Research methods
This research employs a case methodology to explore the Vietnamese confectionery industry, specifically focusing on the company Haihaco The investigation aims to answer the question: “What is the current situation of the Vietnamese confectionery industry?” To achieve this, various data sources were analyzed, including business articles related to the industry, Haihaco's annual report, and market research surveys.
The investigation utilized the quantitative method, which involves collecting and presenting data in numerical form According to Saunders, Lewis, and Thornhill (2009), merely gathering these numbers is insufficient; researchers must analyze the data to transform it into meaningful information for their audience Techniques such as graphs, charts, and statistics are commonly employed to analyze quantitative data, enabling researchers to explore relationships and trends within the data effectively.
For my thesis research utilizing a quantitative method, I developed a concise survey to gather primary data The survey questions were tailored to align with my research topic, aiming to collect insights about confectionery consumers, their perceptions of both national and international products, as well as their preferences and expectations.
The survey responses will facilitate an analysis of customer purchasing behaviors in the confectionery industry, highlighting specific needs and desires related to confectionery products This valuable data will lead to the creation of a comparative table outlining the advantages and disadvantages of Haihaco, enhancing understanding of consumer preferences Additionally, it will reveal emerging trends in the confectionery market and identify potential challenges that may arise in the future.
To enhance my understanding of Haihaco, I conducted additional research online, gathering secondary data for my report The company's website offers a wealth of valuable resources, including its history, formation, brands, and products, which serve as reliable sources for my thesis Ultimately, this research examines Haihaco as a focal point to explore trends and phenomena within Vietnam's confectionery industry.
Haihaco consistently publishes comprehensive financial and annual reports online each quarter and year, providing valuable insights into the company These reports include detailed financial statements, evaluations from the Board of Directors regarding manufacturing and business operations, and an analysis of the company's strengths, weaknesses, opportunities, and risks for the upcoming year As a reliable source of secondary data, these reports are instrumental for my thesis research.
DATA STUDY AND ANALYSIS
Secondary data analysis
4.1.1 Operating Activities in 2015 a Operation status of Manufacture and Business:
Table 2 Haihaco operation status of manufacturing and business (Cong ty Co phan…2015, 8)
From Table 2., you can see that the practical Sales Revenue of 2015 didn’t reach the targeted plan, since it was the first year of the new Confectionery Import Tax Policy
Haihaco has responded to the new policy that reduces the import tax on international confectionery products to 0% by shifting its focus towards manufacturing higher-profit items As a result, the company has decreased the quantity of low-profit products, which led to a decline in overall sales However, this strategic pivot allowed Haihaco to successfully meet its profit targets by concentrating on more lucrative offerings.
Haihaco currently employs 1,297 contracted employees and workers, excluding three members from the company's operating department.
• Mr THANH HONG TRAN – Managing Director
• Mrs HOA KIM THI NGUYEN – Deputy Managing Director
• Mrs XUAN KIM THI DO - Chief Accountant b Investments and Projects:
Within the year 2015, Haihaco has already launched many business projects, such as:
• Building several articles at the new manufacturer, which belongs to the
“Transferring Project”; investing in building new Hai Ha Confectionery Plant in Bac Ninh’s Industry Zone
• Investing in supplementing a brand new producing Miniwaf chain
• Investing in increasing the capacity of the producing Jelly candy chain
In 2015, the investment and construction projects for various machines and equipment to enhance the production process amounted to approximately 25.5 billion VND, achieving around 51% of the initial project plans.
Total property 337,343,986,895 384,295,050,126 46,951,063,231 Revenues 775,247,030,944 781,772,532,141 6,525,501,197 Profits from business activities 31,774,846,752 34,345,933,092 2,571,086,340 Profits from other activities 2,249,420,562 -183,426,170 -2,432,846,732
PAT (VAT 10%) 26,514,384,498 26,448,643,932 -65,740,566 Proportion of profit on returned interests 46.5% 46.6% 0%
Table 3 Haihaco financial status (Cong ty Co phan…2015, 12)
In 2015, Haihaco experienced an 8.09% increase in profits from its core business activities compared to 2014, alongside a revenue growth of 0.84% However, the company faced significant challenges with a loss of -183,426,170 VND in "Profits from other activities," resulting in an overall loss of approximately 108.2% for the year This downturn adversely affected the proportion of profit on returned interests, overshadowing the positive performance in business revenues and profits.
4.1.2 Reviews from Board of Director on operating activities a Reviews on results of Manufacturing Activities
After a long year fighting with the economy crisis in Vietnam, Haihaco still managed to perform a great 2015-year with impressive revenues and profits (Cong ty Co phan…2015, 20)
• The total revenues of 2015 reached 790.7 billion VND, which means Haihaco had achieved revenues 1.4% more than the previous year
• Haihaco achieved 41.6% of benefits before tax over the charter capital
• The proportion of benefits before tax over the revenues is 4.32%
• Company’s budget deductions are approximately 39.9 billion VND
• Employee average income is around 7 million VND / person / month
About the R&D department, Haihaco had achieved quite impressive improvements, since the company had launched several new confectionery product lines, for example:
Haihaco is adapting to the emerging confectionery trends in the Vietnamese market, where health-conscious consumers are increasingly prioritizing the quality of ingredients As a result, there is a growing preference for low-sugar confectionery options over traditional Haihaco products.
Haihaco has focused on understanding customer needs and desires, leading to the development of a modern manufacturing chain that produces high-quality, efficient products These advancements not only meet customer requirements but also significantly boost the company's export potential to markets in Cambodia, Laos, Myanmar, Korea, and China.
Haihaco has announced a comprehensive redesign of the packaging for its traditional confectionery products, including Jelly Chip, Chewhaiha, Creamy Porous Cake, and Longpie Cake This strategic move aims to attract more customers while preserving the company's market share in Vietnam The refreshed packaging not only enhances the visual appeal of Haihaco's offerings but also boosts competitiveness against rival brands Additionally, the company is focusing on its labor force and salary policy to further strengthen its market position.
Haihaco has successfully maintained an average employee income of approximately 7 million VND per month, reflecting a 4% increase from the 2014 wage rate This achievement underscores the company's commitment to enhancing labor income The wage structure is based on two key factors: the quantity of products produced and the employee's job position Additionally, Haihaco prioritizes its skilled technical team, ensuring that compensation and policies align with current labor market standards.
Primary data analysis (Survey)
The survey conducted for my thesis gathered responses from 150 individuals across various demographics, including age, gender, location, occupation, and income levels While I believe the results provide valuable insights, I feel that the accuracy could be enhanced with a larger sample size.
I only collecting data online from a far distance with the small connections that I already had, this was the best I could do
The survey consisted of 12 multiple-choice questions, facilitating easier responses from participants Ultimately, it revealed the crucial insights I was seeking.
• Confectionery market trend in Vietnam at current moment
• Customer attitudes toward Vietnamese products
• Customer attitudes toward imported products
• Did Haihaco accomplish their goal as being acknowledged by the customers? Here I presented my survey with the questions and the answers from all the people who had answered them
After collecting all answers from the interviewees for this Question 1, I came to the result
The chart above described the percentage of how much 150 people were interested in the confectionery As it had been mentioned in the Introduction section, most of the people
Q1: Are you interested in confectionery products?
A recent survey revealed that a significant 83% of participants have a strong affection for confectionery, while only 17% do not share this enthusiasm This suggests that if you consider a group of 10 people, approximately 8 would be inclined to buy confectionery products, indicating a robust market interest in sweets and treats.
The Vietnamese confectionery industry is thriving, reflecting high consumer demand for its products, even though they are not essential for daily life However, excessive consumption can lead to health issues like chronic caries and worsen diabetes symptoms Despite these concerns, daily purchases of confectionery continue, indicating a positive outlook for the industry's future growth.
The survey focused on the age of respondents, revealing that the majority, around 66%, were young adults, while approximately 26% were adults This demographic was targeted due to their higher likelihood of purchasing confectionery items and their openness to trying new products in the market compared to other age groups.
In order to make things clear, here comes the explanation Those people who are under
Many 18-year-olds lack financial independence, making it difficult for them to manage their budgets for confectionery Instead, they often prioritize other interests, such as cosmetic products for girls and games for boys Consequently, they tend to rely on their parents, typically aged between 25 and 50, to purchase these items for them.
Individuals over 50 typically prioritize their health and nutrition, opting for a diet rich in vegetables and healthy foods while reducing their sugar intake As they age, many face diabetes-related challenges, prompting them to avoid sugary snacks and confectionery.
From the above analysis, a conclusion was formed The “Young adult” group and
“Adult” group are the potential customers for confectionery companies The people in
The "young adult" demographic, typically aged 18 to 25, often juggles college or university studies alongside early career experiences From my personal experience as a student, I found that confectionery served as a vital energy source while tackling assignments and graduation theses Many students likely share this sentiment, as late-night study sessions often call for the comforting presence of candy or cookies to keep them energized and focused.
Both students and employees in the "Young adult" and "Adult" groups enjoy consuming confectionery products Whether studying or working, these treats help alleviate boredom and maintain focus Confectionery items like chocolate, cookies, and chewing gum provide a quick sugar boost, enhancing energy levels and enabling better concentration on tasks.
In the workplace, adults often use confectionery as a tool to enhance customer service For instance, during my time at a bank in Vietnam, there was always a small bowl of assorted candies available on the table Customers, including myself, could enjoy these treats while waiting for service Although the candy didn't expedite the process, it significantly improved the overall customer experience by making the wait more pleasant.
Last but not least, at home, these young adults and adults also buy their favorite confectionery, not only for themselves but also for their children who belong to the
The majority of interviewees, aged 18 to 50, are primarily employed (57%) or studying (36%), with only 7% identifying as homemakers However, homemakers represent a significant market opportunity, as they are deeply engaged in family care and shopping, giving them valuable insights into their preferences regarding prices, tastes, and product quality.
The thesis aimed to determine Haihaco's market position in southern Vietnam, with all interviewees sourced from Saigon and surrounding regions Additionally, Haihaco has successfully expanded into central Vietnam, including cities like Hue and Da Nang, making their products well-known among northern and central Vietnamese consumers To further penetrate southern markets, it is crucial for Haihaco to gain a comprehensive understanding of local consumer preferences and market dynamics.
Q3: What is your current occupation?
Q4: Where are you currently living and working?
Hanoi (or the nortern of Vietnam)
Hue (or the center of Vietnam)
Saigon (or the southern of Vietnam) people who living in these areas: their ages, genders, consuming behaviors, product perceptions, concepts of quality or favorite packaging
The next consideration was the one about those elements that affect customer’s purchasing decision Despite my own predicted answer for this question was the
Quality and food safety are crucial factors influencing consumer preferences, with 68% of respondents indicating a strong inclination to repurchase familiar confectionery products they have previously enjoyed Additionally, 64% of interviewees emphasize the importance of product origins, highlighting a growing concern for both quality and safety in their food choices.
In a recent study, it was found that 60% of interviewees prioritized brands over prices, with only 48% focusing on cost This suggests that southern consumers are more open-minded and willing to pay a premium for products that align with their tastes, contrasting sharply with northern customers who emphasize price considerations before being swayed by attractive packaging.
In a recent discussion with Mrs Hoa Nguyen, the Deputy Managing Director, she highlighted the challenges of the northern market compared to the southern region She noted that consumers in Hanoi, for instance, are reluctant to pay a premium for a 200g package of soft candy, despite its superior taste and attractive packaging.
Origins Professional and eye- catching packaging
Have tried before and suits your taste
Prices Quality and food safety Brands New-coming products on the markets
Q5: What elements do you consider when purchasing confectionery products?
Conclusion
The Vietnamese confectionery industry is currently facing intense competition, as consumers have access to a wide array of choices, including both imported and domestic products Companies in Vietnam must navigate not only rivalry among local brands but also the increasing influx of international products that are swiftly gaining popularity in the market.
It is unfortunate that both government and private domestic companies in Vietnam are struggling to produce quality products for their consumers Despite having access to affordable materials, a skilled labor force, and an understanding of local tastes, these companies fail to create offerings that foster customer loyalty In fact, even when domestic products are priced slightly higher, consumers in the south often prefer imported goods over supporting local brands.
Consumers often believe that "you will get what you pay for," leading them to perceive imported products from renowned international brands as superior in taste, safety, and reliability for their health.
Haihaco faces significant challenges in regaining lost customers and expanding its market share in the southern region To succeed, the company must not only improve its packaging but also develop products that resonate with consumer desires Although only a small number of shoppers actively seek new products, capturing the interest of these few could present a valuable opportunity for Haihaco In business, the influence of a niche group of potential customers should never be underestimated, as their enthusiasm for innovative offerings can propel a product to nationwide popularity.
POTENTIAL STRATEGIES FOR HAIHACO
Haihaco’s strategies for 2016
Haihaco is actively expanding its multi-industry developments in alignment with the Vietnamese Government's market-oriented strategies The company's primary goal is to enhance production processes, reduce raw material costs, and improve manufacturing and sales efficiencies Additionally, Haihaco prioritizes food hygiene and safety to minimize incidents that could compromise product quality and harm its reputation.
Haihaco is planning on promoting market research in order to help them be able to make the right decision on investing new product and manufacturing chain developments In
In 2016, the company is set to fulfill its contract with BR Pharma to produce functional foods, including products like Jelly Melisa vitamin substances, Honey Ginger candy, and Honey Lime candy These items will be legally available in numerous drugstores across Vietnam.
Haihaco emphasizes the importance of investing in a modern management system to enhance the efficiency and cost-effectiveness of its production processes Additionally, the company focuses on branding and product naming to strengthen its position in the confectionery market To achieve effective brand building, collaboration and synchronization among all departments—including Product Design, R&D, Production, Sales, and Marketing—are essential.
The Sales Department is focused on developing an effective sales policy to increase market share in low-consumption areas Their mission is to establish a professional Sales Team capable of distributing Haihaco products widely across shops and supermarket chains To support this effort, the Product Designing and Marketing Departments must collaborate to create more attractive packaging, which will help the Sales Team draw in more curious customers.
Haihaco is taking proactive steps to address environmental concerns by relocating its factory to a designated industrial zone, ensuring that manufacturing activities do not contaminate groundwater resources Additionally, the company is committed to maintaining and enhancing its waste treatment systems within its manufacturing facilities.
The Vietnamese confectionery market is highly competitive, with consumer demand largely influenced by monthly income rather than daily necessity This presents challenges for Haihaco, which must balance high product quality with a diverse range of appealing flavors and competitive pricing to meet customer expectations.
Since 2015, the Vietnamese Government has implemented a "0% Imported Tax" policy for confectionery products imported from ASEAN countries under the ASEAN Free Trade Area (AFTA) This policy has created challenges for Haihaco, as their products now face competition from high-quality and lower-priced imports from countries like Thailand, Korea, and Japan.
Haihaco continues to face high manufacturing costs for its confectionery products due to the lack of effective government support for Vietnamese enterprises Raw materials account for approximately 65% to 70% of the product's price, with some being imported, which adds to the financial burden Additionally, the unstable currency rates have significantly impacted production costs, ultimately influencing the success or failure of their products in the market.
In 2015, Haihaco invested significantly in new warehouses, factories, and manufacturing chains to expand its market presence However, the reliance on imported machinery made the company vulnerable to fluctuations in currency rates, which greatly impacted its investment strategies and manufacturing operations.
Author’s points of view and suggestions
To enhance clarity in the report, a SWOT analysis was conducted to identify the current strengths and weaknesses of Haihaco This systematic approach allowed for a comprehensive overview of the company's advantages and disadvantages.
The SWOT analysis, which stands for Strength, Weakness, Opportunity, and Threat, is a strategic tool commonly utilized by researchers to identify and evaluate the key components of their projects.
Every problem can be viewed from two perspectives: internal and external factors Internal factors encompass a company's strengths and weaknesses, which are aspects that the organization can manage and influence Conversely, external factors involve opportunities and threats that arise from outside the company, representing elements beyond its control Understanding these dynamics is crucial for effective problem-solving and strategic planning.
The SWOT analysis table allows researchers to effectively summarize a company's strengths, weaknesses, opportunities, and threats, facilitating the identification of optimal solutions to address its challenges After reviewing the company's annual report and conducting my own market survey, I have reached the following conclusions.
• Certain market share (northern areas)
• Out-of-date manufacturing chains
• Out-of-date products _lavours
• Slow catch-up new trends
• Building new factory with new manufacturing chains
As Haihaco develops new products and brands, it is crucial for them to focus on effective naming strategies Chapter 4 highlighted that Vietnamese consumers often prefer foreign brands and products, underscoring the importance of appealing names in attracting their attention.
In their perception, Vietnamese products cannot be compared with those ones come from European countries, America and Asian countries such as Thailand, Japan or Korea
Many companies are increasingly adopting an effective strategy known as borrowing foreign elements, which involves selecting a foreign name that aptly describes their products' benefits or uses A prime example of this is "Tous Les Jours Bakery," which evokes the impression of a French bakery due to its name, a French phrase This association is strengthened by the widespread recognition of France as the birthplace of the pastry industry.
Many people mistakenly believe that "Tous Les Jours" is a French bakery, associating it with the perception that French pastries are superior in taste and presentation compared to local Vietnamese options However, "Tous Les Jours" is actually a bakery franchise established by the South Korean CJ Group Similarly, "Paris Baguette Café," another South Korean franchise, boasts around 3,000 locations in South Korea and approximately 100 outlets in countries like China, America, and Vietnam.
In a recent interview, the director of THE PATHFINDER Co., Ltd., a brand naming consulting firm in Vietnam, emphasized the importance of tailoring brand names to specific locations and target audiences For instance, traditional Vietnamese handmade products should reflect Vietnamese identity and heritage, while fashion brands may benefit from Italian-inspired names, capitalizing on Italy's reputation for stylish clothing Additionally, confectionery brands can effectively use American-English names to appeal to their market.
This method was developed in response to customers' diminishing trust and loyalty towards Vietnamese products and companies, leading them to favor international brands This shift in consumer behavior can be traced back to historical periods when Vietnam was under foreign control by the Chinese, French, and Americans, during which local production ceased Consequently, Vietnamese consumers became accustomed to using products from France, America, and Russia.
After the war, Vietnam began reintegrating into the global economy, leading to a resurgence in production and manufacturing However, as local companies struggled to establish their market presence, international competitors had already saturated the country with high-quality products These foreign brands not only offered superior goods but also executed compelling marketing campaigns that convinced consumers of their greater value Consequently, the perception that imported products were inherently better became deeply ingrained in the minds of the Vietnamese people.
Naming a company and its products using appealing English and French terms can be a highly effective marketing strategy While some may question the legality or ethics of this approach, it ultimately serves to attract customers by aligning with their preferences rather than their actual needs Short and memorable names like Crack-it for salty rice cakes and Pop-a-pop for lollipops evoke positive feelings associated with enjoying sweets This tactic not only resonates with local consumers but also facilitates recognition among foreigners living in Vietnam Furthermore, adopting English names positions the brand favorably for future international expansion, making it easier for the products to be accepted and remembered in diverse markets.
Haihaco has effectively utilized a strategic naming approach for their branch brands and products, exemplified by their new pastry branch named "Haiha – Kotobuki." This name reflects their investment in Japanese manufacturing technology to deliver high-quality products for the Vietnamese market Recently, Haihaco has shifted from using Vietnamese names to adopting American-English names for their products, aligning with global branding trends.
Haihaco has struggled to maintain its market presence in the Southern regions due to several factors, primarily product quality The company continues to offer products with higher sugar content compared to competitors, which contradicts the current market trend favoring low-sugar options Additionally, outdated technology and manufacturing processes hinder Haihaco's ability to produce innovative products at lower costs, ultimately diminishing its competitiveness in the market.
Haihaco has addressed its manufacturing challenges by investing in a state-of-the-art factory for confectionery production To enhance product quality, the R&D department must focus on improving flavors, colors, and food safety Conducting a survey of popular confectionery trends and leading brands in Vietnam will provide valuable insights into current market preferences, enabling the team to make informed decisions for developing innovative products that align with consumer demands.
Conducting a market research trip for the Research Team could yield more accurate insights than online research alone Ideal destinations for this trip include neighboring Asian countries like Thailand and Indonesia, which are significant competitors for Haihaco in the low to middle-class product segment Although confectionery from these countries is available in the Vietnamese market at lower local prices, imported companies typically only bring in the most popular products Therefore, a firsthand exploration of these markets can provide valuable understanding of the broader range of confectionery offerings and consumer preferences.
RELIABILITY AND VALIDITY OF THE RESEARCH
In research, reliability refers to the consistency of results, indicating that essential findings should be replicated multiple times with similar outcomes (Robson, 2010) Conversely, validity assesses the overall research process, ensuring that the final results meet all the criteria established by the research methodology.
(Mehrens & Lehmann, 1987) An example will explain this definition more clearly
(Do on dinh…2015) In order to measure the occupational satisfying level, a researcher created a survey contained three questions as below:
• Do you like going to a concert?
• Hamburger and sandwich, which one you prefer?
• Which actress in the movie “Titanic” do you like the most?
In a survey conducted with a group of 10 people, the consistency of responses demonstrated reliability; however, the questions posed were not aligned with the primary objective of assessing "occupational satisfaction levels." Despite encountering minor challenges while developing the market research survey, the results ultimately met the necessary criteria for research validity, providing me with valuable insights into the current situation.
Vietnamese confectionery industry and the survey also answered my research hypothesis
If given the opportunity to revise my survey, I would implement two key changes Firstly, I would include an additional question to capture consumers' preferences regarding their spending on confectionery, which would provide a clearer understanding of customer expectations This insight would allow for more objective recommendations for Haihaco Secondly, I would focus on expanding the survey's reach beyond my initial sample of 150 participants, which primarily consisted of individuals from middle to high-income backgrounds By engaging a more diverse audience, I could gather a broader range of opinions, particularly from low and working-class consumers, leading to more reliable results.
Sauders, M., Lewis, P & Thornhill, A 2009 Research methods for Business students Fifth edition Harlow: Prentice Hall Cop
Yin, R 2014 Case study research: design and methods Fifth edition Los Angeles: SAGE
Kumar, R 2011 Research methodology: a step-by-step guide for beginners Third edition Los Angeles: SAGE
Robson, C 2002 Real world research: a resource for social scientists and practitioner- researchers Second edition Oxford: Blackwell Publishing
Mehrens, W A & Lehmann, I J 1986 Using standardized tests in education Forth sub edition Longman Group United Kingdom
Gillham, B 2000 Continuum Research Methods: Case study research methods London: Continuum International Publishing Group 2000 Referred 25.10.2016 http://site.ebrary.com.lillukka.samk.fi/lib/SAMK/detail.action?docID404926
Phi, T 2011 Dat ten “ngoai” cho hang Viet Nam Thoi bao kinh te Sai Gon Online 10.8.2011 Referred 25.10.2016 http://www.thesaigontimes.vn/58507/Dat-ten-ngoai- cho-hang-Viet-Nam.html
Rivkin, S 2009 33 tips and tactics for generating Names Referred 25.10.2016 http://www.brandingstrategyinsider.com/2009/06/33-tips-tactics-for-generating- names.html#.WDSbeBRqrdk
Strauss, E 2008 Marketing planning by design: systematic planning for successful marketing strategy UK: John Wiley & Sons Referred 25.10.2016 http://site.ebrary.com.lillukka.samk.fi/lib/SAMK/detail.action?docID380962
Website of Haiha Confectionery Joint-Stock Company Referred 25.10.2016 http://www.haihaco.com.vn/home.html