Xúc tiến thương mại cho thực phẩm chức năng Naturenz ở thị trường Đồng bằng sông Cửu Long
Kỷ yếu Hội thảo quốc tế “Thương mại và phân phối” lần 2 năm 2020
TRADE PROMOTION FOR NATURENZ FUNCTIONAL FOOD IN THE MEKONG
DELTA MARKET
XÚC TIẾN THƯƠNG MẠI CHO THỰC PHẨM CHỨC NĂNG NATURENZ Ở THỊ TRƯỜNG
ĐỒNG BẰNG SÔNG CỬU LONG
Assoc. Prof. Dao Duy Huan
Nam Can Tho University, [email protected]
Master's degree: Nguyen Thanh Trung
DHG Pharmaceutical Joint Stock Company
Abstract
The research objective is to analyze the trade promotion for Naturenz functional food of DHG
Pharmaceutical Joint Stock Company (DHG) in the Mekong Delta market. The data of 130 consumers in 04
provinces of the Mekong Delta and 10 experts of DHG has been collected for the research. The research result
shows weaknesses, in addition to strengths, in trade promotion in order to enhance the competitive capacity of the
company’s Naturenz brand. Based on the above result, recommendations have been given to help the company to
more efficiently develop its trade promotion for Naturenz functional food in the Mekong Delta market.
Keyword: functional food, Naturenz, DHG, Mekong Delta market.
Tóm tắt
Mục tiêu nghiên cứu là phân tích xúc tiến thương mại cho thực phẩm chức năng Naturenz của Công ty
Cổ phần Dược phẩm DHG (DHG) tại thị trường Đồng bằng sông Cửu Long. Dữ liệu của 130 người tiêu dùng
tại 04 tỉnh của Đồng bằng sông Cửu Long và 10 chuyên gia của DHG đã được thu thập cho nghiên cứu. Kết
quả nghiên cứu cho thấy những điểm yếu và những điểm mạnh trong xúc tiến thương mại nhằm nâng cao năng
lực cạnh tranh của thương hiệu Naturenz. Dựa trên kết quả trên, các khuyến nghị đã được đưa ra để giúp công
ty phát triển hiệu quả hơn trong xúc tiến thương mại đối với thực phẩm chức năng Naturenz tại thị trường Đồng
bằng sông Cửu Long.
Từ khóa: Thực phẩm chức năng, Naturenz, Công ty CP dược Hậu Giang, Đồng bằng sông Cửu Long.
1. Introduction
Having joining WTO, a large playground since 2006, Vietnam has make its business of
pharmaceutical industry become busier. The competition between domestic pharmaceutical enterprises
and foreign pharmaceutical enterprises is getting more fierce, requiring the continuous effort of
enterprises for its self-improvement, thereby confirming the position of enterprises in the market,
helping enterprises to enhance its business efficiency and competitive capacity in the regional and
international integration period.
To solve this problem, in addition to the improvement of scientific and technical level,
investment in modern equipment, expansion of distribution network, a research to find a new and high
quality product to diversify products and occupy market segmentation is indispensable to the
enhancement of competitive capacity of an enterprise in the market. A suitable promotion strategy
will be a sharp weapon to help an enterprise to stably grow and be well-established in the market and
bring the best business result.
Trade promotion is a key to help an enterprise to be well‐established in the market and compete
with competitors. Trade promotion creates the best conditions for the participation and development of
an enterprise in the market, in other words, the trade promotion supports enterprises so that they can
equally and healthily operate its business in the economy. Trade promotion is an important marketing
tool through the effective communication among members of an organization, between an enterprise
and its customers, thereby the movement of demand and goods are closer together, in spite of diverse
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and inconstant customer demand. Trade promotion impacts and changes the consumption structure,
Marketers can carry out promotion measures to evoke customer demand and stimulate consumers.
Trade promotion help the sale easier. Through the trade promotion, traders can create advantages in
competitive capacity and price. Trade promotion includes not only supporting measures for the
policies in product, price and distribution but also competitive advantage.
DHG has planned the “Trade promotion” strategy for new products launched to the market,
contributing to satisfy the market, helping the company to affirm its position in the market. Through
the preliminary investigation, it is shown that the company’s trade promotion for Naturenz functional
food in the Mekong Delta market are relatively good, but it has not met the proposed targets,
promotional tools are not diversified, which is a reason why the company’s market share has not been
expectedly achieved. Organizational activities have not brought highly effective although the company
has spent a large amount of resources for such activities. With the above-mentioned practical situation,
I would like to propose some methods of “trade promotion for Naturenz functional food of DHG
Pharmaceutical Joint Stock Company in the Mekong Delta market”.
1.1. Introduction to DHG Pharma
- Company’s name: DHG Pharmaceutical Joint
Stock Company
- Abbreviation: DHG PHARMA
- Head office: 288 Bis Nguyen Van Cu, An Hoa
Ward, Ninh Kieu District, Can Tho City
- Telephone: (0292). 3891433 – 3890802
- Email: [email protected]
Figure 1: Head office of DHG Pharma
- VISION: “For a more Beautiful and healthier Life”
- MISSION “DHG Pharma always provides high quality products and services to satisfy the
aspiration for a more beautiful and healthier life.”
♦ Company’s latest business result
DHG’s revenue continuously took the lead in
pharmaceutical industry of Vietnam and grew from
2015 to 2017, but in 2018, the company’s net revenue
was only VND 4,421 billion, decreasing by 3%
compared to 2017.
The company said that the revenue slump in
2018 was resulted from stopping the business of MSD
products (since April 2018) and Eugica products (since
June 2018) to loosen room in accordance with the
state’s regulations. Although the company’s revenue
decreased, its net profit increased by 1.4% compared to
the same period, reaching 651 billion Vietnamese dong.
1.2. Introduction to Naturenz product
Source: DHG Accounting department
Naturenz is an outstanding research achievement
which has been researched within 02 years by the Institute of Biotechnology. Naturenz is the extract of
Vietnamese vegetables and fruits such as papaya, radish, bitter melon, eggfruit and substances
hydrolyzed from silkworm cocoon to form antioxidants and natural enzymes which is helpful in
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preventing and treating liver diseases. The materials originating from Vietnam becomes a strength for
Naturenz to be manufactured at reasonable price with the reasonable price to help any persons engaged
in liver diseases to use it.
Figure 02: Naturenz product
Source: DHG Sales Department
2. Overview of research
Trade promotion in Vietnam has been interested for research over the past time. Regarding the
trade promotion, there have been a lot of research projects, theses, research reference books on such
matter. It is mentioned to the following researches:
- Le Viet Anh (2005). Completing trade promotion activities to promote the export activities of
Vietnam to the US market.
- Nguyen Thi Dung (2006). Law on trade promotion in the market economy in Vietnam -
theory, practice and solution for improvement.
- Do Thi Huong (2009). Completing promotional activities to promote the export activities of
Vietnamese enterprises to the EU market.
- Le Hoang Oanh (2014). Trade promotion – theory and practice, National Political Publishing
House.
- Nguyen Duy Nghia (2007). Improving the effectiveness of trade promotions in the new
situation.
It may be affirmed that there have been a lot of researches on trade promotion with different
approaches. These studies, directly or indirectly, show objectives, directions, scientific bases and solutions
to improve the effectiveness of trade promotion step by step. Therefore, the research on developing the
Naturenz brand trade promotion of DHG Pharma in the Mekong Delta market is necessary.
3. Research method
The topic mainly focuses qualitative research through the methods advised by 10 experts and
in-depth group discussion including 5 persons who are specialize in trade promotion at DHG Pharma.
And, the market survey is carried out for the research to collect primary data from customers and
administrators in order to collect new, highly objective and accurate information on current business of
DHG Pharma in the Mekong Delta market to supplement and improve the information system for the
research topic and propose issues related to the development of promotional activities for Naturenz
products in the Mekong Delta market
Primary data has been collected from 02 main sources: customer questionnaire and
administrator interview questions. Customer questionnaires are randomly chosen. The form of
administrator interview questions is randomly chosen with 10 persons who hold the position of
managers, deputy managers, and branch directors of the company.
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Kỷ yếu Hội thảo quốc tế “Thương mại và phân phối” lần 2 năm 2020
Quantity: The number of customer questionnaires is 130, the number of administrator
interview questions is 10. The customer questionnaire is applied for direct interview to customers who
buy products at retail points in An Giang province (70 papers), Kien Giang province (20 papers), Dong
Thap province (20 papers), Can Tho province (20 papers ).
The administrator interview questions are applied for directly interviewing managers, deputy
managers branch directors of the company.
Method of collection:
- Internal information: Collecting data from the Income Statement of DHG Pharma in the
Mekong Delta market over the past time from sales and accounting department. Documents related to
product communication from the Marketing Department.
- External information: Collecting the statistical data from relevant organizations and
departments, such as Department of Health, Department of Taxation, etc. which published. Collecting
some information from newspapers.
Secondary data is collected through the reliability of information sources. The data is collected
from the company’s financial statement and income statement and external information which is
collected from communique of the competent authorities, thus the reliability is relatively high. Method
of descriptive statistics includes tabulating, calculating percentage, growth rates, drawing diagrams and
comparing years
4. Research results achieved
4.1. Situation on coverage of Naturenz products at retail points
According to data published by Health Departments in
13 provinces in the Mekong Delta, there are about 10,700
retail points for drugs and functional foods (pharmacies,
drugstores, drug agents), however, according to statistics from
DHG sales department, in the first 6 months of 2019,
Naturenz products only cover about 4,688 retail points,
accounting for 44%.
4.2 . Situation on level of product identity of consumers
Source: The author has analyzed and
According to random survey data for 130 customers in
some Mekong Delta provinces (70 customers of An Giang, 20
synthesized
customers of Can Tho, 20 customers of Dong Thap, 20
customers of Kien Giang), there are 83 customers who have
known Naturenz products, accounting for 64%, of 84
customers who have known Naturenz products, there are 40
customers who had used the product, accounting for 31% of
the total survey.
4.3 Actual situation for determining promotion objectives
and budget
Actual situation of determining trade promotion
objectives
Source: The author has analyzed and
By collecting data and opinions of the company's
experts, it is determined that the objective of trade promotion
must at least achieve the following objectives:
synthesized
y Increasing product coverage at retail points, increasing level of product identity of
consumers to help increase product revenues, increase profits and market share in the Mekong Delta.
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y Increasing the reputation of the company in the market by giving commercially
meaningful news about the product in publications, mass media conveniently.
y Creating good relationships with the public, with existing customers. Building a favorable
and good image for Naturenz products and DHG Pharma.
Actual situation of determining promotion budget
Every year, the company spends 20% of revenue on A&P (Avertising & Promotion) activities,
of which 10% is for advertising activities (ATL & BTL: above the line & below the line), 5% for sales
promotion activities, 5% for public relations activities to increase brand love.
4.4. Actual situation of communication channels
According to a survey of 130 customers, there are
83 customers who have known about Naturenz products,
of which 29 customers knew through advertising on mass
media (TV, newspaper, magazine, radio ...) accounting
for 35%, 15 customers knew the product via the Internet,
accounting for 18%, 22 customers knew the product
through a picture displayed at pharmacies, accounting for
27%, 7 customers knew through advice of doctors,
pharmacists, accounting for 8%, 10 customers knew
through recommendation of friends and relatives,
accounting for 12%.
Source: The author has analyzed and
synthesized
4.5. Proposal on trade development and promotion of
Naturenz pharmaceutical products of DHG company in the Mekong Delta market
4.5.1. Solution to identify the target audience
In order to identify the target audience for Naturenz products, the company needs to research the
market clearly and customer base properly. Market research is very important for any business. The market
research will let the company know or predict the needs of customers about the type of product to satisfy
customer needs. Therefore, in order for the business to be effective in order to develop and assert itself in the
market in the coming time, the company should perform the following tasks:
- Researching market demand: this task is to determine the needs of current and future target
audience of Naturenz products. On the other hand, the company will judge the factors affecting the
market, as well as consider its ability to supply in the Mekong Delta market.
- The company needs to improve its analysis, evaluation and forecast of consumer acceptance
of Naturenz products. The company should organize a department to perform tasks such as customer
acceptance studies of the company, products and tastes of customers.
- The company should research competitors with the company on liver detoxification products, to
show the comparative advantages to have appropriate and effective promotion programs.
- Researching development trends: to assess how the future socio-economic conditions will
affect the company’s business operations and direction to develop promotion activities.
4.5.2. Solutions to budgeting for trade promotion activities
Every year the company spends 20% of revenue on promotion activities, of which only 5% is
for sales promotion activities. The research results show that the product coverage is still low,
accounting for only 44% of the total number of retail points in the region, so it is suggested that the
company should increase funding for sales promotion activities to further improve product coverage at
retail points.
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4.5.3. Solutions on communication channels
The survey showed that up to 35% of consumers know the product through advertising on the
mass media, 18% via the Internet, 27% through product display at pharmacies, so the company should
develop mass channels. Media such as newspapers, television, internet, radio … could reach most of
consumers with high efficiency, and can also communicate through private pharmacies. Besides, most
have increased the advertising density through channels such as television, internet to reach the target
audience in the fastest way.
4.5.4. Solutions to develop trade promotion tools
• Advertising: The proportion of products identified by advertising accounts for the highest
proportion (35%) so the company should have a plan to improve the effectiveness of advertisements
through the printing of magazines, newspapers, banners, by making eye-catching advertisements that
are meant to showcase and attract customers to use the company’s products. In particular, the company
focuses on and invests more on television, radio, Internet or TV shopping channels. It is a form of
shopping that many people choose in this era.
• Sales promotion: For customers who are pharmacies and retail drugstores, applying push
marketing combined with pull marketing: building big promotions for pharmacies to buy and sell at
the same time organize PJ at the point of sale and giving gifts to introduce products directly to retail
customers to pull goods out, direct products to consumers directly.
• Public relations: the company keeps in touch with patrons to advertise promotions or new
products to loyal customers. Increasing funding activities for programs and events for the group at risk
of liver diseases, building image and reputation of the company in the Mekong Delta market.
• Direct marketing: this is also a powerful tool of the company with a team of skilled
pharmacists with enthusiasm for the work that helps the company’s products reach more customers. So
the company needs to train and test the expertise and working style of these employees and give them
incentives to build an effective working environment.
4.5.5. Solutions to enhance management activities
The main objectives are the criteria for determining the success or failure of trade promotion
activities. The organization of management of trade promotion development activities must stem from
the company's business objectives. Do not set objectives that are too easy to achieve or too difficult to
achieve but should set objectives that are appropriate to the capacity of the company's products.
Objectives that are too easy will cause waste of human resources, creating inertia for employees.
Conversely, if the objective is too high, it will discourage the implementation and sometimes exceed
the capacity of the human resources. It should avoid overly general, vague objectives.
In addition, the company must organize, control and evaluate more frequently for each content
of trade promotion activities, in order to make timely assessments and solutions. How to evaluate
customers, the company should approve from the pharmacists when interacting directly with
customers to be able to make the best assessment of customer feelings when making a decision to buy
Naturenz products.
5. Conclusion and management implications
Conclusion
Research shows that although Naturenz's revenues have grown year by year, product coverage
at retail points and consumer’s product identity level remains low, failing to meet expectations of
company leadership. Therefore, DHG needs to continuously promote its promotion activities to
improve the coverage and brand identity of its products, thereby improving the competitiveness of the
products, maintaining and attracting existing customers as well as potential customers of the company
in Vietnam in general and ones in the Mekong Delta region in particular.
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The investment in developing products made from medicinal herbs is a right direction of DHG
in order to timely meet the needs and tastes of current consumers, Naturenz is one of the typical
products of DHG. Success in promoting trade of Naturenz products not only brings revenue and profits
for DHG, but also contributes to the development of the Mekong Delta's agricultural sector because
Naturenz is a product extracted from typical vegetables, bulbs, fruits of the Mekong Delta such as
papaya, radish, bitter melon, Lekima, garlic and substances hydrolyzed from silkworm pupae to form
antioxidants and natural enzymes. Naturenz products also create one chain link to connect 4 units:
State - Scientific researcher - producer and farmer.
Some limitations and future research directions
The research methodology in the topic is a convenient sampling method, small sample size, the
implementation of the survey was conducted only in 4 out of 13 provinces in the Mekong Delta, the
number of samples is not evenly distributed in the provinces so it has not accurately reflected for the
whole area.
The study has not evaluated factors affecting consumers' decision to buy Naturenz products, as
well as their competitors. Therefore, the next research direction in the future could continue to exploit
this aspect, at the same time, the study should take larger and more uniform sample number across
provinces and implement throughout the Mekong Delta region then the research results will be deeper
and more accurate in reflecting the research issues.
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7. Documents provided from DHG
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