UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------ NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY: THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH PHARMA COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year: 2017 – 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------ NGUYEN LO MINH DUC VIETNAMESE SUPPLEMENT MANUFACTURING INDUSTRY: THE EFFECT OF NO MARKETING ACTIVITIES IN GIAI CANH PHARMA COMPANY LIMITED MASTER OF BUSINESS ADMINISTRATION SUPERVIOR: PhD. LE THI THANH XUAN Ho Chi Minh City – Year: 2017 – 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 1 of 57 TABLE OF CONTENT EXECUTIVE SUMMARY. SYMPTOM AND PROBLEMS.
PROBLEM FINDING PROCESS. INITIAL CAUSE – EFFECT MAP. THE UPDATED CAUSE – EFFECT MAP. DEFINITION OF CORE PROBLEM.
THE EXISTENCE OF CORE PROBLEM. THE IMPORTANCE OF CORE PROBLEM. FINAL CAUSE – EFFECT MAP. MARKETING AND SALES PLAN SUMMARY.
User sign – up process. STRATEGIC OPPORTUNITIES AND THREATS. MARKETING AND SALES STRATEGY. User sign – up.
Promotion and Advertising. PROPOSED DATA AND RESOURCE PLAN. 48 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 2 of 57 EXECUTIVE SUMMARY This paper was delegated to examine why the sales volume of Giai Canh Pharma Company Limited has been too low in the first 7 months of 2017 and to recommend ways of increasing the volume.
The paper draws attention to the fact that in the first 7 months of 2017, there are many employees taking over 10 days off within a month. The peak of this situation happened in July 2017 that there are 7 employees left over 10 days and staying at home waiting for jobs when company still had to pay full salary for them. This symptom happened from the beginning of 2017 until now. Further investigations reveal that Giai Canh Pharma Company Limited which is beginning its supplement outsourcing service had no marketing department to do the business developing job, no publicity about their new business and no advertising initiatives to promote the business.
At the beginning, this company was planned to be the main factory for GPharm Company to produce their product. This background can stay the same and happens no change until the newest announcement from Ministry of Health that any supplement manufacturing companies which cannot meet the GMP standards will be obliged to shut down the operation at the end of 2018. This urgent situation together with the symptoms at Giai Canh Pharma Company promoted to this research paper. Due to the finance limitation of Giai Canh Pharma Company and the urgency of GMP application, the saving cost and time solution is preferred.
The report evaluates this range and concludes that it would be ideal to have a marketing plan. This plan will temporarily create a temporarily whole solution for causes investigated in problem finding process. It is recommended that: • Target to the new borned or small – sized companies which want to create products and testing market with small quantity. Companies which raises their own medicinal area are also preferred.
• Create a sales team to do direct sales by recruiting temporarily from GPharm Company to immediately adopt to the job and save cost. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 3 of 57 • Do press release at the beginning and the end of 2018 with GMP archievement announcing purpose. • Create a website to do pay – per – click advertising on Google for introducing outsourcing service of Giai Canh Pharma Company Limited on the base of GPharm Company website to take advantage of their close relationship and cost saving priority.
The whole work will be shown in more details after this summary. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 4 of 57 CHAPTER 1. Introduction Giai Canh Pharma Company Limited previously is a manufacturing factory of GPharm Company.
The company has split from GPharm Company and became a separately busisness organization from January 1st 2017. After split, the manufacturing performance of company continued going down and had to open the outsourcing service to improve the situation to quickly meet the GMP standards before due date or being closed. However, the firm performance has nothing changed. Therefore, there is a need of a research and investigating the problem behind the symptom to permanently improve the situation of the company.
Company Background This paper is about the Giai Canh Pharma Company Limited, which is a manufacturer in supplement market. However, to understand more about this company, the author will mention about the GPharm Company, the “older brother” of this company. GPharm Company is formerly a family – business store named Vinh Xuan, which focuses mainly on orientally raw and dry medicine locating in District 5. After over 35 years operating in a small family medicine store by his father, Mr.
D, the son of the business owner decided to establish an organization operating in Vietnamese pharmaceutical market, specialized in supplement from natural ingredients. The company named Giai Canh was established in September 2005, located in District 5 until now. In 5 years of operating, the company mainly sold medicated oil and supplement products which were outsourced by suppliers. In 2010, the first manufacturing factory was set up at Binh Chanh with maximum capacity of 100 million capsules per year.
N, the deputy manager working in GPharm Company from the beginning was assigned to become the manager of the factory. This factory proved the hope of being actively independent in manufacturing ability and widely expand the business on Vietnamese supplement market. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 5 of 57 In November 2016, to manage the numbers of poor quality supplement products on the market, the Ministry of Health announced the decision of terminating operation of any supplement manufacturing organization which does not meet the Good Manufacturing Pratice.
This information will affect to thousands of companies that does not meet this standard. After 7 years of operation, in January 1st 2017, Mr. D, the manager of GPharm Company decided to split the manufacturing factory from GPharm Company and formed an individually business organization named Giai Canh Pharma Company Limited. This company will manufacture the products for GPharm Company together with doing outsourcing supplement products from natural ingredients for other customers to increase the outcome quantity to meet the most important standard of GMP certification, targeted manufacturing capabilities.
The urgency of meeting GMP standard in 2018 has led to this splitting initiative. After split, Giai Canh Pharma Company Limited became an independent organization and an eligible legal entity to operate in Vietnamese supplement market. N, the previous manager of the factory became the manager of Giai Canh Pharma Company Limited and took responsibility of all aspects in this organization. The company is also finance independent and not influenced by GPharm Company, which is under responsibility of the other boss.
However, this company is still under the same owner, Mr. He is both the owner of GPharm Company and the Giai Canh Pharma Company Limited. Therefore, the relationship of 2 companies is brothers under the same father. At the beginning, Giai Canh Pharma Company Limited is in charge of manufacturing products for only GPharm Company to sell on Vietnamese market.
Howerver, the business result from GPharm company was not good and led to the manufacturing performance of Giai Canh Pharma Company Limited went down. Furthermore, Ministry of Health will oblige all supplement manufacturing organization to apply and meet the GMP (Good Manufacturing Practises) standards to be still remained on the market. After the tentative date in 2018, any companies do not meet the GMP Standards will be shut down the operation. With this urgent situation, Giai Canh LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD.
Le Thi Thanh Xuan Page 6 of 57 Pharma Company Limited decided to begin outsourcing service to utilize the unused capacity, improve the manufacturing performance and also expand its own business. This service is aimed to entrepreneurs, SMEs in pharmaceutical market, companies which have own raw material zone and want to develop their own supplement products, with the latest technology and the highest quality. Giai Canh Pharma Company Limited, has 23 employees with 1 Manager, 1 Deputy Managing Supervisor and 21 other employees, in which 2 accountants and 19 common workers. N, the manager takes responsibility of all aspect in company.
The Deputy Managing Supervisor supports Manager to monitor the assembly and paperwork procedures. 2 accountants are in charge of doing accounting and general admin works. The remaining 19 workers do their jobs in each functional department of assembly. The whole organization structure can be seen below: Figure 1: Giai Canh Pharma Company Limited organizational structure 1.
History Timeline • 2005: GPharm Company was established and began operating business in pharmacy market in Ho Chi Minh city, specialized in oriental medicine and supplement from natural ingredients. • 2010: The manufacturing factory is set up at Tan Kien, Binh Chanh, Ho Chi Minh city with maximum capacity of 100 million capsules per year. • 2017: The manufacturing factory is split separately from GPharm Company and named Giai Canh Pharma Company Limited. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD.
Le Thi Thanh Xuan Page 7 of 57 1. Services Giai Canh Pharma Company Limited specializes in manufacturing, outsourcing supplement products. Its main customer is GPharm Company. In addition, the company also do outsourcing for organizations which have raw materials and want to do their own products, entrepreneurs or SMEs in pharmaceutical market.
Slogan “All for your health” 1. Vision – Mission To become the leading enterprise in manufacturing supplement products made of natural ingredients in Vietnam. SYMPTOM AND PROBLEMS 2. Problem Finding Process At the beginning, the author tried to observe all the aspect of the company.
The company is specialized in manufacturing so this was the part that the author mostly checked. The finding process began with the accidental detection about the workers at company had to take many days off showed in July salary form. In July, there were 7 employees had to take over 10 days off to wait for jobs. The author checked other previous months and found that the same situation also happened from January to June, not only in July.
When checking again by asking informally with the manager, he said employees “had to wait for jobs due to lack of jobs to do at the company”, as quoted from Interview 2 detailed in Appendix 2. There is no more order to manufacture, so he decided to let employees take days off but still paid full salary for them. It happened from the beginning of January of 2017 until now. The first symptoms found led the author to check the manufacturing performance of the company from the established date until now and find the core problems at the company at present.
The details about symptom will be shown after this part: LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Nguyen Lo Minh Duc - Supervisor: PhD. Le Thi Thanh Xuan Page 8 of 57 2.