UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation (SABECO) Name: Tran Thi Thanh Huyen ID: 221500030 MASTER OF BUSINESS (Honours) Ho Chi Minh City- 2017 UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation (SABECO) Name: Tran Thi Thanh Huyen ID: 221500030 SUPERVISOR: Dr LE NHAT HANH MASTER OF BUSSINESS ADMINISTRATION Ho Chi Minh - 2017 Acknowledge I would like to thank all of my family, friends and colleagues who inspired and supported me in this thesis writing venture I am really indebted to my supervisor Dr Le Nhat Hanh whose proper guidance and close supervision helped me to carry out this research to the right direction I would also like to show my gratitude to all of respondents who shared their experiences with me, thanks for all valuable time they have invested in this study that gave me precious information for research Last but not least, I would like to express my thankfulness to my company Sabeco, my Boss and all colleagues who supported me a lot during the time doing this research I TABLE OF CONTENTS EXECUTIVE SUMMARY……………………………………………………… ………… CHAPTER PROBLEM IDENTIFICATION……………………………… …………… 1.1 Background of the company…………………………………………………….…….…….3 1.2 Background of the problem…………………………………………………………… .7 1.3 Problem identifying …… …………………………….……………………….….…… 11 1.3.1 Problem justifying……………………………………………………………….……… 11 1.3.2 Justify the existing of problem………………………………………….……….……… 16 1.3.3 Definition problem……………………………………………………………….……….22 1.3.4 Justify the importance of the problem: literature regarding, consequence effect….…….23 1.4 Potential causes……………………………………………………….……… ………….27 1.4.1 Opinions from other people…………………… …………………………………….….28 1.4.2 Situation…………………………………………………….……………………….…….29 1.4.3 Product physical properties………………………………………………………….…….29 1.4.4 Storage, use, and convenience of beer……………………………………………….…….30 1.4.5 Cause - effect tree………………………………………………………………………….31 1.5 Causes validation ………………………………………………………………………….32 CHAPTER ALTERNATIVE ANALYSIS…………………………………………………36 2.1 Alternative Solutions……………………… ……………………………………….…… 36 2.1.1 To improve warehousing can adapt to these rule in preservation ………………….…… 36 2.1.2 Invest on transportation vehicle beer suitable for ensure quality product………….…… 38 2.1.3 Improving reasonable distribution network…………………………………………….….39 II 2.2 Solution comparison…………………………………………………………………… 40 CHAPTER ACTION PLAN……………………………………………………………….43 CHAPTER CONCLUSIONS AND RECOMMENDATION… ……………………….52 REFERENCES ………………………………………………………………….…………… 54 APPENDIX …………………………………………………………………….……….……58 APPENDIX ……………………………………………………………………….………….61 APPENDIX ……………………………………………………………………….………….63 III LIST OF FIGURES Figure 1: Organizational system of SABECO Figure 2: Market share of beer market in 2015 Figure 3: Market share of Sabeco from 2012 to 2015 Figure 4: Saigon Special did not choose much comparing to Heineken, Tiger by users Figure 5: Level of customer’s satisfaction Saigon special beer Figure 6: Cause-and-effect tree Figure 7: Model of determinants and consequences of perceived product quality LIST OF TABLES Table : Company information Table : Market share of all products of Sabeco from 2013 to 2015 Table : Sample details Table : Customer’s evaluation for Saigon beer report Table 5: Technical requirement of Saigon Special beer IV LIST OF ABBREVIATIONS - SABECO: Saigon Beer-Alcohol-Beverage Joint Stock Corporation - HABECO: Hanoi Beer and Beverage Corp - MoIT: Ministry of Industry and Trade - BMI: Business Monitor International - SATRACO : Saigon Trading Corporation - SABETRANJSC: Sabeco transportation joint stock company - SABECUCHI: SABECO Cu Chi Factory - QA: Quality Assurance - VBA: Vietnam Beverage Association V EXECUTIVE SUMMARY Beer industry has witnessed higher total volume growth despite the rise in the Special Consumption Tax from 50% to 55% since 2016 Positive economic conditions in Vietnam have boosted consumers’ incomes and forced them to shift from unbranded to branded beer, as higher quality and taste Saigon Alcohol Beer & Beverages Corp (Sabeco) saw a reduction in its market share although it maintained its lead in beer Saigon Special is a new brand of SABECO that is aiming at the target segment of people who tend to drink premium beer Although at present SABECO is the leading beer producer with the market share accounting for 39% in 2016 however the launching of its new brand Saigon Special was not so successful because SABECO lacked of an effective distribution plan especially focusing on preservation during transportation activities for this new brand In exploring the weakness point of the product, Saigon Special, we have given some recommendations to grow market share and market size by investment into quality ptoduct to create the customer need Customers’ perspective of quality has been proven to be the primary element contributing to the success of the company In which, four important factors affecting customers’ perspective of quality are opinions from other people, situation, physical properties and storage, use, convenience of beer The purpose of this thesis is to identify the root cause led to the main problem after analyzing all possible causes Strongly invest for retailer in terms of point of sales material (POSM), display (for short term) and invest on distribution system in both policy and display, especially at point of sales (for long term) Finally it implicates potential solutions that can be applied to solve this problem CHAPTER 1: INTRODUCTION The first chapter presents an introduction to the research, as well as introduces about company background and discusses the purpose, objectives and research problems of this company Chapter Two will present the literature review which explains the theoretical framework and give some solutions for this research that will be used for the survey In this chapter, the two main research methods, namely quantitative and qualitative research, will be discussed The third chapter will present the empirical findings Lastly chapter fourth wills conclusion and recommendations for companies and further studies 1.1 Company background SABECO is built in 1875 In June 1977, the factory was renamed as Saigon Brewery factory In 1993 the factory was renamed as the Saigon Beer Company and became one of the company has the most modern equipment in the beer industry in Vietnam In July 2003, Saigon Beer Company expended and became one of leading enterprises in the beer industry in Vietnam- Sabeco In early in 2008 became SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION upon the government's decision For over 30 years of operation in the brewery, alcohol and beverage industry, SABECO has developed to be market leader in Vietnam’s beer business in many respects Items Company name, location Description SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION Hai Bà Trưng, Bến Nghé, 1, Hồ Chí Minh Website Website : http://sabeco.com.vn Product Main product classes Beer (main product), soft drinks, and low alcoholic drinks Table 1: Company information Achievements SABECO recognized titles as of to date include: The brand name “Saigon Beer” has been recognized as the “trusted brand” for 22 years; The “Saigon Beer” product has been repeatedly voted as a “High – quality Vietnamese product” for 13 consecutive years from 1997 to 2012; The “333” canned beer product won the Silver Medal at the international beer content held in Australia in years 1999, 2000, 2001 SABECO business includes three main fields First, manufacture and sale kinds of beer, alcohol, beverage, packaging, label for beer, wine, soft drinks and food; Sales materials, equipments, parts related to the production of beer, wine, soft drinks, assorted flavors, juice for the production of beer, wine and soft drinks; food Second, import and Export all types of: beer, wine, soft drinks, materials, equipments, wine and soft drink Third, provide training services, research, technology transfer, investment consulting, construction, installation, repair and maintenance in the Beer - Alcohol – Beverage industry and food SABECO main products include 333 Can and Bottle Beer, Saigon Lager Beer (Sai gon Xanh), Saigon Export (Sai gon Do) and Saigon Special Beer (Sai Gon Lun) Saigon Do, 333, Saigon Xanh are among 15 best – selling products of 36 cities Saigon Do takes first place in On – Premise channel while 333 Can become leader in Off – Premise Consumption SABECO Vision to 2025 is to become “national leading” Beverage Group, with high position in regional and international market” By the end of 2016, Sabeco included 23 branches and 21 co-owned joined ventures A part of them are dealing only in beer trading or indirectly connected to beer The production capacity of the 23 breweries reaches about 1800 mln liters per year In view of growing output volumes the company is investing into construction of new breweries planning to bring their net capacity to the level of 2000 mln liters by 2020 ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer- Alcohol- Beverage Corporation (SABECO) Name:... equipment in the beer industry in Vietnam In July 2003, Saigon Beer Company expended and became one of leading enterprises in the beer industry in Vietnam- Sabeco In early in 2008 became SAIGON BEER. .. requirement of Saigon Special beer IV LIST OF ABBREVIATIONS - SABECO: Saigon Beer- Alcohol- Beverage Joint Stock Corporation - HABECO: Hanoi Beer and Beverage Corp - MoIT: Ministry of Industry and