UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business --------------------------------- Trinh Duy Bang IMPROVING PERSONAL SELLING ACTIVITIES: A CASE OF NORDIC CAR COMPANY IN HO CHI MINH CITY – VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------- Trinh Duy Bang IMPROVING PERSONAL SELLING ACTIVITIES: A CASE OF NORDIC CAR COMPANY IN HO CHI MINH CITY - VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2018 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY When global automobile market gets a remarkable resilience, especially concentrating in emerging nations, and Vietnamese economy started to integrate deeper into global trade, there were many luxury brands distributed mainly in Ho Chi Minh city and Ha Noi capital. Coming along with this trend, premium cars such as Roll-Royce, Porsche, Maseratti, Mercedes-Benz, Lexus, Audi, BMW and so forth were retailed in Vietnam with higher numbers recent years. Although luxury car segment is always a potential market for car-retailing investors, there are only few brands which have performed well for years and become top of mind when customers decide to buy a premium car. Their success could be easily explained by having effective ways in operating sales force.
This fenced off the penetration of other famous luxury brands which tried to attack this lucrative market. In August 2016, Nordic Car Joint Stock Company (in short, it would be called Nordic Car in this thesis) decided to distribute Volvo cars as a dealer with two branches in Ho Chi Minh city and Ha Noi capital. However, sales results have been too low since Nordic Car in Ho Chi Minh city was established. This research will explore the causes of low sales results of Volvo in Ho Chi Minh branch.
The findings of the study revealed that ineffective personal selling activities played the most important role in low sales results comparing to other factors from August 2016 to Dec 2017. Moreover, some reasonable solutions would be suggested in order to improve personal selling activities of Nordic Car company in Ho Chi Minh branch. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Without the encouragement, guidance and support of Prof. Nguyen Thi Mai Trang and other teachers, the entire master-level project would not be possible.
I would like to send my appreciation to my advisors. It has been a pleasure working with you on this project. I would like to thank my friends and family for greatly supporting me while I was working on my research. Your patience, understanding and respect were greatly appreciated.
4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS EXECUTIVE SUMMARY. 4 LIST OF TABLES. 6 LIST OF FIGURES. Saigon General Service Corporation.
Nordic Car Joint Stock Company. Global automobile market. Vietnamese automobile market. Volvo global business results and Nordic Car company situation in Vietnam.1 Unsuitable products for Vietnamese .2 Inconvenient business place .3 Inefficient advertisements and PR activities .4 Unattractive direct sales promotion .5 Ineffective personal selling activities.1 Eliminating product, place, promotion and price as the main problem .2 Illuminating ineffective personal selling as the main problem.
Lack of professional customer relationship management system. Disregard of technical guide on Volvo functions. Weak team selling accessory, insurance, finance and service. Cause - and - effect tree.
The first alternative solution: Using a basic customer relationship management software. The second alternative solution: Using a modular customer relationship management software. ORGANIZATION OF ACTIONS. 82 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 1: Top 10 best-selling car brands in 2017 Table 2: Volvo retail sales on over the world in 2016 and 2017 Table 3: Top 07 luxury car brands have positive change from 2016 to 2017 Table 4: Sales volume of luxury dealers around Volvo Ho Chi Minh in 2016 and 2017 Table 5: Statistics of prospects, buyers and closing ratio between Volvo Ho Chi Minh and Volvo Ha Noi in 2017 Table 6.
Evolved selling process Table 7: Estimating cost of using CRM Viet software in a year Table 8: Estimating cost of using Azsoft software in a year Table 9: Action plan LIST OF FIGURES Figure 1: Savico investment structure Figure 2: Global cars and light-commercial vehicles sales between 2016 and 2017 Figure 3: Global cars market share by segments between 2016 and 2017 Figure 4: The number of sold cars in Vietnam from 2014 to 2017 Figure 5: Volvo global retail sales from 2013 to 2017 Figure 6: The number of sold luxury automobile in Vietnam from 2014 to 2016 Figure 7: Reason why prospects refuse to buy Volvo cars Figure 8: Selling funnel Figure 9: Cause - and - effect tre 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Saigon General Service Corporation Figure 1. Savico investment structure (Source: Savico website) Saigon General Service Corporation (Savico) was established in September 1982 with the initial idea is focus on services activities. The company was formally converted into a joint stock company on 4 January 2005.
Savico was listed on the Hanoi Stock Trading Center (HNX) on 21 December 2006 and transfered listing status to Hochiminh City Stock Exchange (HOSE) on 1st June 2009. Over 30 years of experience in business operations, Savico’s strategy for 2015-2020 and the vision to 2030 is to continue to develop under the form of investment corporation focusing on three areas: Trading and Services, Property Services and Financial Services. Savico has been setting up and developing the car dealership and motorbike dealership network of prestigious manufacturers such as Toyota, Ford, GM Daewoo. through the system of 13 subsidiaries and 5 associates across Vietnam.
Savico now is the leading car distributor of Vietnam Automobile Manufacturers’ Association (VAMA), the market share of Savico system achieved 8.5% of VAMA in 2016. 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Nordic Car Joint Stock Company Nordic Car Joint Stock Company is a member of Savico’s automobile dealer network. Nordic Car is the unique representative for import and retail of Volvo Cars Corporation in Vietnam.
Its operations are import, retail, marketing, supplying after- sales services for luxury cars branded Volvo in Vietnam. Besides, it has authority to appoint agency and service center on nationwide. In August 2016, Nordic Car opened two branches, Volvo Phu My Hung in District 7, Ho Chi Minh city and Volvo Long Vien in Long Bien District, Hanoi capital, and all facilities were invested according to the newest standard of Volvo Cars Corporation. Service system was fully equipped with machines, modern technology equipments, and technical teams were trained methodically and intensively by Volvo Cars Corporation.
With more than 60 billion Vietnam Dong of investment, Nordic Car Joint Stock Company is expected to become one of the strongest premium car retailers in Vietnam which brings the unique and attractively Scandinavian values to Vietnamese customers. Both two branches have a similar structure as follow: a managing director, a sales and marketing department with about 35 salesman divided into 2 teams, a human resources department, a finance department and a workshop. Global automobile market 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Global cars and light-commercial vehicles sales between 2016 and 2017 (Source: JATO global car and LCV sales press release in 2017) According to JATO3 – a prestigious company of car comparison and automotive market research, global car sales had a resilience with 86.05 million units selling out in 2017 and up 2.
Global car and light commercial vehicle (LCV) sales from 2016 to 2017 witnessed a decrease of traditional market like Korea and South America, but a remarkable increase in Asia Pacific and South America. In the early months of 2017, Chinese government implemented a policy of limit car purchase, but from the second quarter, giant demand for the whole population revived then it boosted the growth rate at 2.3% to the end of the year. Despite crisis of diesel fuel, South America showed the strongest development of automobile demand. Brazil, Argentina and Chile contributed mostly in this region’s growth.
South East Asia region witnessed a powerful growth of Thailand due to tax policies in Asean Free Trade Area agreement. Top 10 best-selling car brands in 2017 Cars and Pick-up 2017 Growth Rate Ranking TOYOTA 7,843,423 +5% 1 VOLKSWAGEN 6,639,250 +3% 2 FORD 5,953,122 -2% 3 HONDA 4,967,689 +7% 4 NISSAN 4,834,694 +5% 5 HYUNDAI 3,951,176 -9% 6 CHEVROLET 3,857,388 0% 7 SUZUKI 2,891,415 +11% 8 MERCEDES 2,534,181 +13% 9 KIA 2,511,293 -10% 10 (Source: JATO global car and LCV sales press release in 2017) JATO3 pointed out that Toyota continued to maintain its position as the most popular global brand with many top-selling models. The presence of Japanese brands was shrinking in the United States and China, but that was offset by increased purchasing power in potential markets such as Thailand and Argentina. Toyota sales are up 5% in 2017.
Volkswagen, a direct competitor to Toyota, had a successful year of business 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com beyond expectations. Despite fraudulent gas fraud scandal with billions of US dollars in fines, especially in the United States, German car sales unexpectedly surpassed the Japanese automaker to take the number one position. But if not counting the sub brands, a single Volkswagen cannot beat Toyota. Nevertheless, the popular German car – Mercedes Benz brand still finds its light in trouble thanks to good buying power in the world's most populous market - China.
Volkswagen also represented the strength as the highest market share in Europe. Total sales in 2017, Volkswagen grew 3%. Mercedes, Suzuki and Honda were top three best performers of growth rate from 2016 to 2017. Global cars market share by segments between 2016 and 2017 (Source: JATO global car and LCV sales press release in 2017) Sport Utility Vehicle (SUV) was the largest drivers of growth which reached 27.85 million sold units, and 3.14 million units more than 2016.
Nissan X-Trail/Rogue was the best-selling SUV with 814,000 units in 2017 and raised 6.5% volume on over the world. SUV divided into some subtypes like C-SUV (built from C car’s chassis), B- SUV (built from B car’s chassis and smaller than C), and so forth. Obviously, SUV have continued to take 34% market share away from traditional segments, and this trend was not restricted to particular markets – it’s a trend that we’ve seen on a global 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com scale and expect to continue in some next years. Compact cars, midsize sedan, wagon and MPVs were impacted the most.
Vietnamese automobile market Figure 4. The number of sold cars in Vietnam from 2014 to 2017 (Source: VAMA reports in 2014 to 2017) The number of automotive vehicles selling out in Vietnam in 2014 was 133,588 units and it was doubled in 2016 with 271.4 VAMA divided automobile in Vietnam into three types namely passenger cars (PC), commercial vehicle (CV) and special-purpose vehicle (SPV). Total volume of sold passenger cars in 2014 was 79,813 units, and only after 12 months it passed over 117,000 units. In 2016, if only counting PC, the sold-out vehicles increased 36% to reach 159,501 units.
Vietnam became one of the most attractive environment of automotive investment and the second fastest growth of automobile countries among South East Asia region. In 2017, the whole market decreased about 7.8% because 0% imported tax from South East Asean countries created waiting psychology for entire Vietnamese buyers. However, 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com when all automobile taxes could be completely clear in middle of 2018, the powerful resilience definitely comes back.