Development Process and Characteristics of Vietnam's Confectionery Industry

CONCLUSION OF CHAPTER 1

In the context of the current global economic recession, it has more or less affected the Vietnamese confectionery market in general and Pham Nguyen confectionery in particular. Therefore, researching ways to penetrate the market; researching factors from the external environment affecting the business such as: Information on economics, society, culture, demographics, geography, politics, society, law, technology; researching the internal situation of the company; will be important foundational factors for building important Marketing Mix strategies for the company. In order to come up with the most effective strategies, we must grasp the current situation of Marketing Mix in the recent period of Pham Nguyen confectionery joint stock company. This will be clarified and is also the important content of chapter 2.

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CHAPTER 2

CURRENT STATUS OF MARKETING MIX AT PHAM NGUYEN CONFECTIONERY JOINT STOCK COMPANY

2.1. GENERAL OVERVIEW OF THE CONFECTIONERY INDUSTRY

2.1.1. Development process and characteristics of Vietnam's confectionery industry

In recent years, along with the development of the economy and the increase in population size with a young structure, confectionery is one of the industries with high and stable growth rates in Vietnam. The total estimated market value in 2009 was about 7,673 billion VND1 , an increase of 5.43% compared to 2008 - this is the lowest increase since 2005 due to the impact of the global financial crisis. However, the recovery of the economy after the crisis has positively impacted the demand for confectionery, accordingly, the confectionery industry's sales are expected to grow by about 6.12% and 10% in 2010-2011. According to BMI's report on the food and beverage industry, the growth rate of sales of the confectionery industry (including chocolate) in the period 2010-2014 is estimated at 8-10%.

Vietnam's confectionery industry has the following characteristics:

Firstly : The main input materials of the confectionery industry include flour, sugar, the rest are milk, eggs and other raw materials. Of which, the imported raw materials are flour (almost all), and sugar (partly imported), flavorings and some additives, accounting for a large proportion of the cost. Therefore, the fluctuation of flour and sugar prices on the world market will have certain impacts on the cost of confectionery.

Second : The Vietnamese confectionery market has a clear seasonal nature. Consumption often increases sharply from the 8th lunar month (Mid-Autumn Festival) to the Lunar New Year with staple products bearing traditional Vietnamese flavors such as moon cakes, hard and soft candies, high-end biscuits, jams, and nuts. Meanwhile, confectionery consumption is quite slow after the Lunar New Year and in the summer due to the hot weather.

Third : The confectionery production lines of the enterprises are quite modern and uniform, all imported from famous manufacturing countries.

confectionery such as technology for chocolate coated cakes (Korea), biscuit technology (Denmark, UK, Japan)...

Fourth : Vietnam is a potential market with a high growth rate (10-12%) compared to the regional average (3%) and the world average (1-1.5%). The reason is that the average consumption of confectionery in Vietnam is currently quite low (1.8 kg/person/year) compared to the world average of 2.8 kg/person/year.

Chart 2.1: Confectionery industry sales growth

Source: BMI report

2.1.2. Business environment of Vietnam's confectionery industry

Currently, with a population of 86 million, Vietnam has become a potential confectionery market not only for domestic enterprises but also for foreign companies. It is estimated that there are currently about 30 domestic enterprises, hundreds of small production facilities and a number of foreign confectionery import companies participating in the market. Domestic enterprises with a series of big names such as Kinh Do (including Kinh Do in the South and Kinh Do in the North), Bibica, Hai Ha, Huu Nghi, Orion Vietnam are estimated to account for 75-80% of the market share while imported confectionery accounts for only 20%-25%. Domestic enterprises are increasingly asserting their important position in the market with product diversity (for many different customer groups), good quality, suitable for the taste of Vietnamese people. Meanwhile, small-scale production facilities are gradually shrinking in scale due to low capital, outdated technology, and lack of assurance of food hygiene and safety.

2.2. GENERAL INTRODUCTION OF PHAM NGUYEN COMPANY

2.2.1. History of formation and development

Company Name : Pham Nguyen Confectionery Joint Stock Company

Foreign transaction name: PHAM NGUYEN CONFECTIONERY CORPORATION

Address : 613 Tran Dai Nghia, Tan Tao A Ward, Binh Tan District

Phone : (84.8) 38771293 - 38771361

Website: www.phamnguyenfoods.vn

Logo :

Pham Nguyen Confectionery Joint Stock Company started as a small production facility established in 1990 and from here Pham Nguyen confectionery products were present in the national market.

To meet the growing scale, in July 2000, Pham Nguyen facility was transformed into Pham Nguyen Food and Confectionery Processing Company Limited with a charter capital of 2.5 billion VND. In 2003, the charter capital was increased to 14 billion VND. By July 2007, Pham Nguyen Food and Confectionery Processing Company Limited was transformed into Pham Nguyen Confectionery Joint Stock Company, with charter capital increased to 21 billion VND and by December 23, 2009, the company's charter capital had increased to 75 billion VND. To promote the company's product brand, the company has participated in many domestic and foreign fairs, with some products being awarded medals. In particular, in 2003, Pham Nguyen Confectionery Joint Stock Company's products were voted by consumers as "High-quality Vietnamese goods" by Saigon Marketing Newspaper, and in 2005, they received the "Golden Cup for Vietnamese Brands" by the Vietnam Intellectual Property Association. In addition, the Company also sponsored the programs "Overcoming Yourself" and "Music".

The company's motto is "Safety - Quality - Reasonable price" in all areas of production and business activities, so the company's future direction is to diversify types and designs, improve product quality. Always produce quality products - food hygiene and safety, reasonable prices to meet the increasing demands of the market and

satisfy consumer tastes

About infrastructure:

Pham Nguyen Confectionery Joint Stock Company has 2 Factories, of which the Factory and Head Office are located at 613 Tran Dai Nghia, Tan Tao A Ward, Binh Tan District with a total area of 12,000m2 . Long An Branch Factory II is located at 126A Hamlet 2, Huu Thanh Ward, Duc Hoa District, Long An Province with a total area of 28,000m2. Currently , the Company has 3 production and business blocks: Business Block, Production Block, Support Block and 17 branch departments.

2.2.2. Vision, mission, core values

2.2.2.1. Vision

“One of the leading confectionery companies in Vietnam and the region. Known for continuous improvement, sustainable development, stable quality and humanity in corporate culture.”

2.2.2.2. Mission

Committed to always bringing Customers and Consumers quality products, ensuring food hygiene and safety.

Always improve and develop new technology to bring consumers quality products at reasonable prices.

Preserve and protect the working environment as well as the living environment. Take green and clean technology as the development criteria.

2.2.2.3 Pham Nguyen's core values

- Humanity in behavioral culture

- Passionate about research and innovation

- Understand and find solutions to serve customers

- Reputation is a solid premise for all business transactions.

- Always care about product quality, human health and the environment

2.2.3. Organizational structure and functions of each department:

2.2.3.1. Organizational structure:

Diagram 2.1. Organizational structure of Pham Nguyen Confectionery Joint Stock Company

BOARD OF DIRECTORS

GENERAL DIRECTOR

P. TGÑ KINH

Board of Directors

FINANCIAL MANAGEMENT

P. TGÑ S.XUAT

GENERAL DIRECTOR

P. NSÖÏ

P. PURCHASE

BUSINESS DEPARTMENT

P. KTTC

PLANNING

R&D

P. HC

P. KTQT

P. Quality Management

P.MARK ETING

P. DESIGN

P. CS

( Source: Company's Human Resources Department)

2.2.3.2. Duties and functions of the Company's departments

2.2.3.2.1. Board of Directors

The Board of Directors (BOD) is the highest authority of the Company between two General Meetings of Shareholders (GMS), with full authority to decide on behalf of the Company on matters related to the Company's purposes and interests, except for matters under the authority of the GMS. Currently, the Company's Board of Directors has 3 members.

2.2.3.2.2. Board of Directors:

The General Director is appointed by the Board of Directors and is responsible for organizing, operating and managing all daily production and business activities of the Company according to the strategies and plans approved by the Board of Directors and the General Meeting of Shareholders.

2.2.3.2.3. Sales Department:

Play a key role in the company's business performance, long-term brand strategy, and best customer service style.

Propose and advise the Board of Directors on long-term strategies for brands and products, as well as tactics to achieve short-term and medium-term targets.

2.2.3.2.4. Marketing Department – Market Strategy

Research market demand reports, research and propose market segments.

Conduct comprehensive investigation and forecast market demand for each customer segment and region; analyze demand characteristics and preferences by product type; factors affecting product usage preferences in each dealer and region.

2.2.3.2.5. Design Department

Coordinate with Marketing Department to design product design, packaging and brand image

Coordinate with Agency and Marketing department in building the company's brand identity

Design posters and banners for programs as well as promoting some of the company's images at major events.

2.2.3.2.6. Administration and Human Resources Department

Human Resources Organization:

Research and advise the General Director on the organization of human resources and the selection, transfer and arrangement of human resources suitable to the development requirements of the Company.

Advise, manage, organize implementation and inspect activities related to policies and procedures on labor, wages as well as regimes and policies for employees and employers throughout the Company.

Office administration:

Manage, organize, operate and inspect the Company's administrative activities; participate in guiding the drafting of administrative documents, office and general office services of the Company.

Develop work schedules, meeting schedules, periodic and irregular meetings and activities of the Company. Arrange, assign and schedule work for the General Director.

Ensure punctuality and monitor the entire company to comply with the prescribed working hours.

Administration:

Perform service work related to the Company's internal operations, daily operations of the General Director, Deputy General Directors and functional departments.

Manage the use and perform maintenance and minor repairs of factory facilities, vehicles, machinery, electrical, water and telephone equipment.

2.2.3.2.7. Finance and Accounting Department

Accounting:

Organize accounting work and accounting system with accounting sections suitable for the Company's business activities. Assign and directly direct all accountants of the Company.

Provide professional guidance and inspect and control accounting units to comply with the Company's financial and accounting regulations.

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