UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Le Xuan Toan Enhancing the relationship between sales and marketing staffs: A case of Schneider Electric Vietnam MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Pham Le Xuan Toan Enhancing the relationship between sales and marketing staffs: A case of Schneider Electric Vietnam MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: ASSOC PROF DR NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2019 Contents EXECUTIVE SUMMARY ACKNOWLEDGEMENT .6 LIST OF TABLES LIST OF FIGURES .7 Introduction 1.1 Company background 1.2 Industry Business’s structure & mission 2 Symptoms 2.1 Low Voltage VSD Product line (IDVSD) and Vietnam market 2.2 The low growth rate of IDVSD sales in 2018 Problem analysis .8 3.1 Problem identification 3.1.1 Initial cause and effect map .8 3.1.2 Potential problems 3.1.2.1 Lack of market intelligence information 3.1.2.2 Inter-channel conflict .9 3.1.2.3 Poor marketing communications 10 3.1.2.4 Poor relationship between salespeople of Industry Expert Distributor Sales Team and marketing people of Pre-Sales & Marketing Support Team 11 3.1.3 Updated cause and affect map 12 3.1.4 Updated possible problems 14 3.1.4.1 Lack of market intelligence information 14 3.1.4.2 Inter-channel conflict 15 3.1.4.3 Poor marketing communications 16 3.1.4.4 Poor relationship between salespeople and marketing people 17 3.2 Problem validation .18 Main problem definition and consequences 20 4.1 Main problem definition .20 4.2 Main problem consequences 20 Cause analysis 21 5.1 Potential causes 21 5.1.1 Lack of discussion and sharing information between sales & marketing to support the business 21 5.1.2 Ineffective collaboration between sales & marketing to support customer 22 5.1.3 Conflict of interest between sales & marketing function to support each other 23 5.2 Cause validation 24 Alternative solutions 25 6.1 Alternative solution 1: Encouraging knowledge sharing between sales and marketing 25 6.2 Alternative solution 2: Creating an interactive information exchange system between sales & marketing 27 6.3 Alternative solution 3: Re-training sales & marketing staffs to reduce competencies gap and redesigning job descriptions of sales & marketing and their KPIs to enhance high performance business culture 29 6.4 Solution justification 33 Change plan design 35 7.1 Objectives .35 7.2 Target outcomes 35 7.3 Action plan implementation 36 Conclusion 38 Supporting information 39 9.1 Methodology 39 9.2 Interview guide 39 9.3 Transcript .41 9.3.1 In-depth interview the first group 41 9.3.1.1 Interview 1.1 41 9.3.1.2 Interview 1.2 50 9.3.2 In-depth interview the second group 54 9.3.2.1 Interview 2.1 54 9.3.2.2 Interview 2.2 59 9.3.3 In-depth interview the third group 62 9.3.3.1 Interview 3.1 62 9.3.3.2 Interview 3.2 67 9.4 Qualitative research findings 71 References .74 EXECUTIVE SUMMARY The purpose of this thesis is to explore the causes of poor relationship between sales and marketing staffs of Industry Business team of Schneider Electric Vietnam that lead to the low sales growth rate of its main product, Low Voltage Variable Speed Drives (IDVSD), via its main distribution channel, Industry Expert Distributor (IED) Channel, and that then consequence on the low performance of the business team in 2018 The findings of this study reveal that ineffective collaboration between the Product Manager of IDVSD (aka the marketing people) and the Account Manager of the IED channel (aka the salespeople) tend to play a significant role that lead to their poor relationship in this case The findings are discussed in detail in the research along with some recommendations for the Industry Business and the Management Board of Schneider Electric Vietnam to enhance this relationship and improving the business performance in both short-term and long-term vision ACKNOWLEDGEMENT I would like to acknowledge all who supported me during my studies at International School of Business –University of Economics Ho Chi Minh City (ISB), without whom I wouldn’t be where I am today in finishing my Master of Business Administration journey I would like to give my great appreciation to my Supervisor, Assoc Prof Dr Nguyen Thi Mai Trang, who has supported me during the time doing this thesis Without her continuously sympathy, guidance and support, my thesis cannot be completed promptly on schedule I also would like to show may gratitude to my colleagues at work, my partner’s customers and my classmates at ISB for their feedback and contribution for this thesis I also send my sincere thankfulness to my parents and especially to my wife for their support and encouragement LIST OF TABLES Table Industrial automation and drives in Vietnam – Market shared and CAGRs analysis 2018 Table Industry Business - Sales growth rate by product lines 2017 – 2018 Table Costs for alternative solution Table Costs for alternative solution Table Costs for alternative solution – Action Table Costs for alternative solution – Action Table Costs for best solution Table Action plan LIST OF FIGURES Figure Industry Business’s products and solutions in Vietnam by product lines Figure Industry Business’s Organization Chart 2018 Figure Industry Business - Sales contribution (%) by product line 2018 Figure Industry Business - Sales of Low Voltage VSD by channel 2017 – 2018 Figure Primary Cause-and-Effect tree 1 Introduction 1.1 Company background Schneider Electric (SE) is the global specialist in energy management and automation With revenues of around €25 billion in fiscal year 2018, its 170,000 employees serve customers in over 100 countries, help the customers to manage their energy and process in ways that are safe, reliable, efficient, productive and green From the simplest of switches to complex operational systems, their technology, software and services improve the way their customers manage and automate their operation SE offers integrated solutions across multiple market segments in Non-residential & Residential Building, Industrial & Machines Manufacturers, Utilities & Infrastructure and Data Centers & Networks Its connected technologies reshape industries, transform cities and enrich lives (1) SE sells products and solutions through main Business Units in Vietnam (2): - Building & Partner Business, provided Low Voltage products, systems and solutions, is ranking number one Worldwide in Low Voltage and Building Automation - IT (Information Technology) Business, provided Critical Power products and solutions, is ranking number one Worldwide in Critical Power and Cooling - Industry Business, provided industrial automation & drives products and solutions, is ranking number two Worldwide in industrial automation and control - Energy Business, provided Medium Voltage products and solutions, is raking number one Worldwide in Grid Automation and Medium Voltage SE has been operating in Vietnam since the 1990s, starting with the Vietnam’s 500 kV North – South Transmission Project in 1991 – 1993 and then opened its first representative office in Ho Chi Minh City in 1994 Today SE Vietnam has factories in Dong Nai Province and offices in Ho Chi Minh City, Da Nang and Ha Noi The company employs more than 1000 employees and works closely with more than 500 partners in Vietnam (2) After 20 years doing business in Vietnam, SE has achieved its remarkable performance record in 2017 with double-digits growth of all its business units in the country and become the top growing entity in the entire region (Asia-Pacific & Japan) (3) 1.2 Industry Business’s structure & mission Vietnam’s industrial automation and drives is an attractive market The market’s revenue was 91 million € in 2017 and the compound annual growth rate (CAGR) was 8% year on year In recent year, as Table below, SE’s products and solutions in this market have been accounted for just 5% market share with the CAGR is 12% in recent year The main competitors of SE in the market are ABB, Siemens, and Rockwell Their market shares were 12%, 9%, and 4% consecutively And their CAGRs were 9%, 3% and 15% consecutively, as showed in Table below: Company Market Share (%) CAGR (%) ABB 12% 9% Siemens AG 9% 3% Schneider Electric 5% 12% Rockwell Automation 4% 15% Table Industrial automation and drives in Vietnam – Market shared and CAGRs analysis 2018 (Source: SE’s internal report 2019) Via Industry Business, Schneider Electric Vietnam offers a wide range of industrial automation and drives products and solutions, as detail in Figure below, for the automation and control of machines, manufacturing plants and industrial sites in Vietnam It includes hardware, such as motion controllers (IDMOT), low-voltage variable speed drives (IDVSD), human-machines interface (IDHMI) operator panels, programable logic controllers (IDPAC and IDSAF), push buttons and signaling devices (IDSIG) and discrete sensors (IDSEN), as well as software for operations management and supervisory control systems (2) Low Voltage VSD (IDVSD) is the main product line of Industry Business in Vietnam The product sales have accounted for more than 60% of business revenue with the growth rate is normally 25-30% year on year (Source: SE’s internal report 2019) IDVSD – Low Voltage Variable Speed Drive IDPAC – Process Automation Control IDSAF – OEM Safety & Controller IDSIG – Control & Signaling IDSEN – Sensors IDHMI – Human Machine Interface IDMOT – Motion Control Figure Industry Business products and solutions in Vietnam by product lines (Sources: SE’s Company Profile 2018) In 2018 Industry Business in Vietnam was structured, as Figure below, into three sales teams (Industry Expert Distributor Sales Team, OEM & Medium Distributor Sales Team, and System Integrator & End-User Sales Team) and one Pre-sales & Marketing Support Team that help to support its five main customer types (aka Sales Channel) in Vietnam market that are (1) Industry Expert Distributor customers; (2) Original Machine Manufacturer (OEM) customers; (3) Medium Distributor customers; (4) System Integrator customers; and (5) End-User customers Industry Expert Distributor (IED) channel is the main transactional sales channel of Industry Business in Vietnam This channel contributes to around 60% of the business revenue with the sales growth rate normally 15-20% year on year (Source: SE’s Internal report 2019) The IED channel is managed by the Industry Expert Distributor Sales Team that currently have salespeople (aka Account Manager) and Sales Manager that take care of around 16 official partners for doing the business in overall Vietnam market 61 A-4: Better price! Q-4.1: What would you to have better price support from marketing team? A-4.1: I need to provide the proof for the discount request And the best proof is the loss of that project or purchase order if the price is not good! Q-4.2: From your feedback, can I assume that marketing team is not always support you fully due to they need more information from you than what you have to that support? A-4.2: I think because the decision is not only from our marketing team, maybe from sales manager, sales director, etc., someone want to support, someone want to keep the margin, etc., It turn out the support result is in the middle point of what I want and their KPIs, if my customer can accept that point, it is ok, if not I find another way to support them, etc., Q-4.3: Do you think your experience in current decision marketing process help you to find the best internal support personally? A-4.3: Yes, so I will raise the request step by step to get the best support point from them! Q-4.4: Do you think the reason of this situation is about some current problem between sales and marketing in sharing information to support each other? Can you define what is the current problem? A-4.4: I know there are some difficulties, but I don’t define I try to solve it by myself if any, and raise the support to my sales manager if the difficulty need to be due with marketing to be solved! Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which factors you think that are the key for your success in selling more and more Low Voltage VSD in Vietnam? A-5: I think currently our distributor compete with competitor’s distributor the most, in some case there are tight competition among our distributors! Q-5.1: What should we to control the competition among our distributor? Can you suggest? A-5.1: We should control the selling price among them to make the fair competition among them! Q-5.2: If we have the selling price control policy, how can we control our distributor following our rule? Can you suggest? 62 A-5.2: I think we should define the rule and apply it first, because it’s a good policy to make a fair competition among our distributors, when we apply it if there is any problem we will solve it or find a practical solution for it then Q-5.3: Come back to the key point that help you selling more VSD Let’s image, if our price is still higher than our competitor 3-5%, but we cannot discount anymore to close the deal What should you to influence your customer to buy from you instead of competitor? A-5.3: I have to use my selling technic, I have to define some other attractive offer beside the price to give the customer in exchange like extended the warranty time, attractive payment term, etc., for these offers I must influence other internal department to support me first, such as logistics, finance, etc., but It’s difficult to change these terms! Q-6: What you need from your colleague (sales, pre-sales/ after sales support, your manager, etc.,) or your customer to help you sell more VSD in Vietnam market? A-6: I need more update information from marketing about product and market to support my customer better, currently I have always been asked to provide the information back to marketing, so I just shared what I have But in my opinion, marketing should have more information than sales to support us! Q-6.1: How you evaluate the current situation of sharing information from marketing to sales? A-6.1: Not much, only sales sharing back to marketing! I think before sharing market information to sales, marketing should find the information themselves first, currently they’ve just asked sales for these information! Q-6.2: Do you have anything else related to this topic that you would like to discuss further with me? A-6.2: Should we go out for a drink now? Q: Thank you very much for your sharing 9.3.3 In-depth interview the third group 9.3.3.1 Interview 3.1  Interviewer: Pham Le Xuan Toan (Q)  Interviewee: Mr Tran Xuong Vinh (A)  Interviewee’s title: Sales Director – Thien Son Technology JSC., (Industry Expert Distributor Partners of Schneider Electric Vietnam) 63 Q-1: Could you please introduce about yourself and your experience about SE’s Low Voltage VSD? A-1: My name Tran Xuong Vinh, I am Sales Director of Thien Son Technology JSC., I have work with SE and SE’s VSD product more than 10 years We mainly focus on distribute SE’s VSD (Optimum), sometimes we have to sell SIEMENS or ABB but depend on customer request only and just some small amount, not much Today we cannot sell much SE’s VSD (Optimum), as you know, because currently the Optimum VSD price is higher than your ATV610 (the Medium range) About the market share, the ATV71 price is very high, below its we have ATV930/ ATV630 range but the price also higher than ATV610 range The same product line (IDVSD), the same brand name (SE) but the price gap is so big between Optimum and Medium so that it’s difficult for distributor like us, who focus on Optimum product For VSD in Vietnam market today, for pump & fan application, if customer use ATV610 with level of power higher than ATV630 range, the price is also better, why they choose the ATV630 one? They are all SE’s product! And because ATV610 have a good price so that the Medium distributor can stock a lot compare with us, we’re dared to stock ATV71 or ATV630, and it’s turn out that we cannot customer need on delivery time! We’ve just keep a very little stock for the Optimum VSD by following some current promotion program Q-2: Could you please share with me about Low Voltage Variable Speed Drive (VSD) market in Vietnam? And what would you to sell more Low Voltage VSD in the market now? A-2: Actually, in my opinion, for VSD in Vietnam today INVT is sometimes the best option for customer, INVT offer very good price and they have a very good market expansion plan, I don’t know is there any change in customer mindset to use Medium and Minimum product or not, but what I can observe is that the distributor of INVT have stock a lot and they conquest a lot big customer based on their stock capability, their very low price offers, etc., and also their warranty policy also good! They willing to offer to change the new ones for any problem product immediately, as you know! And also, because they’ve just focus on VSD so they all their best to serve their customer Q-2.1: What are the equivalent ranges from SE to compete with INVT? A-2.1: INVT have a lot of range, can use for normal or heavy-duty load I don’t discover as much in detail but I think their product can meet customer need As I know they also have VSD for lift, with separate option module for customer to choose to meet their specific need! Q-2.2: Do INVT categorize VSD by application? 64 A-2.2: Yes, categorize by application, by normal load or heavy load, etc., but they reduce the function and make it as option so that they can optimize the VSD price Customer will choose additional option based on their true need! Q-2.3: Do you think ATV610/ ATV310 can compete with these competitors? A-2.3: Cannot compete with INVT about price but can compete with LS Q-2.4: What are the SE’s VSD range that Thien Son selling most today? A-2.4: ATV312, ATV32, etc., and today is ATV320 About ATV71/ ATV930 just sometimes! Q-2.5: And how about the power range, which is the VSD’s power range you selling most today? A-2.5: Below 15kW for ATV320 And from and above 22kW we have to use ATV610 to offer Q-2.6: In your opinion, what should you and Thien Son to sell more VSD? A-2.6: Today it’s difficult I think we can sell ATV610 but we cannot sign the distribution contract for Medium product like Hop Long or Truong An, as I know they have stock a lot, so that I cannot compete with them about price for Medium product About Optimum product, it’s still difficult to sell, because it’s just meet the need of the big factory, and there are a lot competition for these projects, maybe these factory is our traditional customer but to compete with ABB or SIEMENS for these project is not easy! So currently, for transparency, I don’t have any idea to sell the Optimum VSD like ATV71, ATV930, ATV630 in the market! This is my truly sharing Q-2.7: Do you have any plan to sell more VSD below 15kW? A-2.7: To sell more we have to stock more But it depends on the market need, if we stock but we cannot sell it’ll be our problem because today there are a lot of distributor like us in the market, etc., There are some problem about SE’s VSD that is the product life cycle in Vietnam is too short, maybe when you bring the product to Vietnam to commercialize it just can sell for some more year etc., it made us difficult in communicate with the customer etc., Q-3: In your opinion, how you think about SE’s current policies for Specialist Distributor customer? A-3: I know every supplier like SE have their own strategies, and they are all willing to support distributor depend on level of the distributor’s commitment Currently, for policy it all about price, and everyone want the lowest price, but if just price it is very normal, we can ask for special price case by case to survive instead of stocking But if we want to develop more 65 we have to had a plan or strategy to go together with SE that is more cooperate for market expansion, and stock more to serve that market and optimize the stock based on our finance capability and also warranty policy for these product Q-3.1: For current commercial policy of SE, can you follow all the scheme? A-3.1: Currently we are mainly focus on VSD, we also can sell PLC and HMI more but there are some project partner of SE also can sell these like distributor so it’s still difficult for us to buy all industry products following the commercial policy of distributor It’s the same with other product like push buttons and pilot lights product, we cannot compete with your retail channel So we need more support from SE for control and support us fairly not only for VSD product but also for all Industry product! Q-3.2: Let’s me clarify one point, as you mention above, one of the difficulty that effect you to make the stocking decision is the warranty period of the VSD product? A-3.2: Yes, we have to consider the warranty period of VSD to stock, because we have to consider the risk of VSD’s slow moving items otherwise our business will be in trouble if there is any problem with these product, because we cannot get support from SE after the warranty period, but we have to support our customer ourselves then Q-3.3: How you think about the BINGO program in current commercial policy? A-3.3: I think it is very attractive program, but we have to consider a lot between stocking more industry product to achieve BINGO that result in very attractive bonus for IDVSD with the risk of selling out that slow moving other industry product if we want to keep stock without customer order Q-3.4: How you think about some recently promotion program? A-3.4: In my opinion, the promotion program is not reasonable! But I think it is about your strategy or something like this, because for the same product range, for example the promotion program in Q2 is better than the same one in Q1, it not good if we try to keep stock in Q1 and in Q2 we cannot sell out due to better price offer from other distributor due to they join the Q2 promotion program! It’s not fair for us Maybe SE should provide the same promotion scheme for the same product range, or just next better promotion after we can sell out all we have stock in the previous promotion program! It better for us and also better for the market due to the price gap among distributor not much in the same period, otherwise the end customer will question why they have to buy the higher price from us compare with other SE’s distributors? The offer price is very fluctuating, and also SE don’t have any selling price control among distributor, so all try to offer the best price for the customer to sell out their current stock! I 66 hope that in the future there are some better change to support us compete fairly among the same distributor of SE Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which factors you think that are the key for your success in selling more and more Low Voltage VSD in Vietnam? A-5: The competition is very aggressive, I’ve just said about the competition among SE’s distributor only But I don’t want to tell you in detail who what, because maybe you can know! Q-5.1: Don’t worry! I need your sharing… A-5.1: Sorry I cannot share in detail But I can tell you a fact that, today if you search for SE product online you will easily get some advertise about the very low selling price of SE’s VSD online, via Facebook or some automation forum, you can find out who behind these advertise, and belong to which distributor It make us very difficult to sell SE to get profit Q-5.2: How you think about current competition with SE’s competitor distributor? A-5.2: As I share with you before, today INVT is a very dangerous competitor with very low price and very best after-sales support, etc., Q-5.3: Do you see any change in the market that customer consider to change VSD from SE, ABB or SIEMENS to INVT? A-5.3: I see a lot But they’re not change all immediately, for some urgent case they change, or for some normal application they change And day by day, they observe the quality of the product and they will change more and more! Q-5.4: So, which factors you think that are the key for your success in selling more and more Low Voltage VSD in Vietnam? A-5.4: As I observed, currently SE sell a lot ATV610 Why you can sell a lot that new product? First, price! The current price of ATV610 can compete with LS So if your product have a good price, and a good brand name, as SE, why don’t customer willing to change from other brand like LS to using SE with the same price? Q-5.5: Beside price, what is the second factor? 67 A-5.5: Second, I think it is about the after-sales support, warranty time, and the flexibility in troubleshooting for the end customer, such as change the new one immediately I don’t think currently SE can offer or can be flexible for all of this We have to flexible to serve our customer first, before get supporting from SE Q-5.5: So it mean you need more support from supplier with longer warranty time for you and more flexibility on helping you serving your customer? A-5.5: No, personally I don’t want to extend the warranty time to my customer I’ve just want supplier like SE can consider some current practice of competitor in the market to define a better strategy Because of extending the warranty time cannot create any profit for your business… Q-7: What you need from your supplier to help you sell more VSD in Vietnam market? A-7: More flexible, between supplier and distributor, and more trust to support us better to compete with competitors We cannot share all the sensitive information about our business, our customer, our project, etc., in detail to get better support from supplier but we have to believe each other and try our best to compete with the competitors to win the project if need, because at the end of the day maybe us or other distributor will buy from you to supply for that project instead of the competitors Q-7.1: So you want to suggest ideas that could help you and supplier to cooperate better? A-7.1: Just more trust from supplier to support us, instead of ask us to share all the information What we can share, we will share but there are some case the information will effect a lot of people that related to the project that we cannot share but you as an supplier and partner with us must believe on us Just like this Q-7.2: So you mean beside the salesman who supporting you, you also need more trust form the supplier, the team behind the salesman to support you better? A-7.2: Yes Q: Thank you very much for your sharing 9.3.3.2 Interview 3.2  Interviewer: Pham Le Xuan Toan (Q)  Interviewee: Mr Truong Tien Loc (A) 68  Interviewee’s title: Sales Director – A&E Engineering Co., Ltd (Industry Expert Distributor Partners of Schneider Electric Vietnam) Q-1: Could you please introduce about yourself and your experience about SE’s Low Voltage VSD? A-1: My name Truong Tien Loc, I have more than 10 years doing business with SE’s VSD About SE’s product, normally it is the best in class and high quality product compare with other brand name in market! But currently there are some change in SE’s strategy in lauching some other medium product lines, with lower price and also the quality I don’t tell the quality not good compare with the same product category in the market But currently there are a lot of warranty request for these new product Q-2: Could you please share with me about Low Voltage Variable Speed Drive (VSD) market in Vietnam? And what would you to sell more Low Voltage VSD in the market now? A-2: In Vietnam, there are some big brand name like SE, ABB, DELTA, INVT, LS There are some others brand from Japan like OMRON, MITSU and a lot of brand from China, Taiwan, ect., In my experience, China’s VSD mainly for China customer For other big company or EU company they are rarely using China brand Q-2.1: Is INVT also from China? A-2.1: Yes, from China but INVT have good quanlity! Today, I still don’t know why INVT have both low price and good quality and can be used in harsh environment Especially, currently INVT is very well-known in Sugar Industry and in some way can changing other big brand name product like ABB, SE there Q-2.2: Why INVT can change these big brand name like this? A-2.2: Price is just two third, good quanlity, and also stock available for all product range! Q-2.3: Can we use ATV310 or ATV610 to compete with INVT? A-2.3: Cannot Because they also offer a lot of range from low to high, and all are very competitive Q-2.4: So if we want to compete with INVT what should we do? A-2.4: In my opinion, INVT is just for some niche market only, and just distribute by one distributor and just focus on VSD product SE is bigger, you have your own strategy and a lot of product to sell, not only VSD so we should focus on our current business and sell more in our market 69 Q-2.5: How you think about the competition of SE with other brand like ABB, SIEMENS, DANFOSS? A-2.5: About price, SE is still good Currently, A&E is also distributor of ABB, about price there is not any change in price in the past 2-3 years and don’t have any new product launching recently And ABB focus more on project business, not much on distribution or transactional like SE They allow us to distribute their VSD but the connection, the support we get from them is not much And when compare with SIEMENS or DANFOSS the price of SE’s VSD is better in some product range and also the stocking and distribution network of SE is better Q-2.6: What are the factor that you concern when making the stock decision for VSD product? A-2.6: First is the price, second is the application For example, we cannot stock ATV71 high power range, because for heavy duty application if you want to make stock you have to stock from and above 315kW and it will cost a lot if we stock Another point is for ATV71 we just can offer for current using customer only, for new customer that don’t know about the product quality they will affraid of the high price of the product! So we just stock for some range of ATV312 because it is easy to sell and can be used for a lot of application Q-2.7: For the ATV71 or high-power range VSD you mention above, to make you willing to stock you need any special support from SE? A-2.7: For these product, based on our stock level, market information and aslo our customer need we will consolidate to a special list and ask SE for special support to stock For these product we don’t follow the normal stock policy But there are still some risk that there are some product we cannot sell-out and still in our store and out of warranty now So sometimes I suggest that for some big VSD, SE should keep stock because you can extend warranty time easily if it is your product! Q-3: In your opinion, how you think about SE’s current policies for Specialist Distributor customer? A-3: Currently SE has defined a new distribution channel for Medium product like ATV310, ATV610, in my opinion, I feel not fair for current distribution partner of SE like A&E, who have been working with SE for a long time, maybe SE want to build up a new channel to expand the market but the new channel also make a lot of effect in A&E business Customer always question us why a big distributor of SE like A&E cannot offer the same price for these product like the new distributor Han My Viet or Hop Long? Customer don’t care about the distributor profile (for Optimum or Medium product) they just care about why the 10 years old 70 distributor can not offer a better price than the new distributor for the same product! And it is not only effect the VSD business of A&E, but also effect all other product that currently A&E distribute for SE, our traditional customer now go around to check the price before contact us! Maybe it is SE strategy, but it is not fair for us Q-3.1: As I know, for current commercial policy, Medium distributor just can buy Medium VSD product and cannot access to Optimum VSD product! Do you want SE make the same coommercial policy for both Medium Distributor and Optimium Distributor so that every distributor have the same commercial policy for all product? A-3.1: I think every policy have the pros and cons, but it must be aligned with SE’s strategy in developing the business If SE want to enter the new market for this new product, SE should create the new channel and make the commercial policy to support Medium distributor better to sell to that new market If they ask A&E to open that new market maybe A&E cannot much because for these product range, currently A&E just sell base on customer request For the distributor that currently focus on selling the low-price product they can follow this strategy better Q-3.2: Base on your experience, how many percent of your customer that their need is just Medium VSD product, but because in the past SE don’t have the Medium offer so that A&E have to use Optimum to offer and influence the customer to use? A-3.2: I think about 20% For example, some simple application we have offered our customer the ATV312, but today when SE launching ATV310, the customer asks us to sell ATV310 but our selling price is not good so that they buy from your Medium distributor You know, every company have a purchasing team, and for these normal requests they will search for the best price offer in the market… Q-5: How you think about the competition in distribution of Low Voltage VSD today? Which factors you think that are the key for your success in selling more and more Low Voltage VSD in Vietnam? A-5: I think currently the cooperation among Optimum Ditributors is better than before, we are not aggressive competed as we did in the past We are not tried to win the project and tried to discount to kick out the other as usual Today we compete but must keep the requested margin level Maybe because in the past there are just A&E and Thien Son But today, a lot of distributors so we must secure our profit first, and focus on selling what make more profit And now for distribution you also have Medium Distributor like Han My Viet, Hop Long, etc., so that they are very strong with Medium product, and A&E still strong with Optimum product only 71 Q-5.1: How you think about these Medium distributors? What currently they in the market? A-5.1: Hop Long have entered the south market recently, they open the branch office here and they did dumping the market with very low-price offer and good sales terms and condition support to conquest more and more customer from us And this is not just for Medium product, they can dumping for all kind of SE product I don’t know why they can that? Are they importing the product directly or can they get a very strong support (not fair) from SE for that? Q-5.2: Beside the price, is there any other factor that you think will help you selling more VSD in Vietnam market? A-5.2: Beside the price, if a company want to sell more VSD they have to make their customer believe in their knowhow and capability to support them, especially that company must invest in a strong technical team focus on VSD that can both support and training for the end customer Some other factors are after-sales support, delivery support, and also stocking capability of the distributor Q-7: What you need from your supplier to help you sell more VSD in Vietnam market? A-7: In my opinion, I need more support from SE for marketing activities such as organize some seminars, trainings for A&E customers at some key provinces or some key industrial zones I think these activities will help us better support our customer and also conquest more new customers Q-7.1: Is there anything you need from our marketing team? A-7.1: For marketing, if you have any new product or any update on your product you should training for our sales team and provide us more information about price, and price communication to market, catalogue, product sample, demo, price list etc., Q-7.2: So you mean our marketing team currently not support you on these activities? A-7.2: They do, but not much We need more and frequently Q: Thank you very much for your sharing 9.4 Qualitative research findings Data collected after the interviews was summarized as below key findings: 72 # Question implications Current & situation of the market and competitors 1.1/ Thuy Poor marketing communicati ons (A-2.7) 1.2/ Vinh Poor relationship between sales & marketing staffs (A2.12) Internal competition among partner customers if any and current support from sales & marketing staffs to partners Potential problems identification and validation Poor relationship between sales & marketing staffs (A-3.3) Findings 2.1/ Tram 2.2/ Trung Lack of discussion and sharing information between sales & marketing (A-1.4) Potential causes identification and validation Conflict of interest between sales & marketing (A-3.1 & A3.4) Lack of market intelligence information (A-4) Lack of market intelligence information (A-5.3) 3.2/ Loc Poor marketing communicat ions (A-2.7) Poor relationshi p between sales & marketing staffs Interchannel conflict (A3) Poor marketing communica tions (A2.9) Conflict of interest between sales & marketing (A-4.2) Poor marketing communicat ions (A-4) 3.1/ Vinh Poor marketing communic ations (A1) Interchannel conflict (A5) Lack of discussion and sharing information between sales & marketing (A-5) Poor relationshi p between sales & marketing staffs (A4.4) Interchannel conflict (A5) Interchannel conflict (A-5) 73 Implication for solution designed from sales & marketing staffs Implication for solution designed from partner customers Lack of market intelligence information (A-6 & A6.4) Poor relationship between sales & marketing staffs (A-6) Poor relationship between sales & marketing staffs (A-6 & A-6.1) Lack of market intelligenc e informatio n (A-6) Ineffective collaborati on between sales & marketing (A-7.1 & A-7.2) 74 References (1) Schneider Electric Website (2) Company Profile Schneider Electric Vietnam [Internet] 2016 April Available from: http://www.schneiderelectric.com.vn/documents/company/EN_Com_Profile_Apr16.pdf (3) Schneider Electric relishes EU-Vietnam FTA challenges Vietnam Investment Review [Internet] 2016 February 15 Available from: http://www.vir.com.vn/schneider-electric-relishes-eu-vietnam-fta-challenges.html (4) Saidur R, Mekhilef S, Ali MB, Safari A, Mohammed HA Applications of variable speed drive (VSD) in electrical motors energy savings Renewable and Sustainable Energy reviews 2012;16(1):543–550 (5) Global Variable Frequency Drive Market Research Report - Forecast to 2022 Market Research Future [Internet] 2017 July Available from: https://www.marketresearchfuture.com/reports/variable-frequency-drive-market2440 (6) Cespedes FV Industrial Marketing: Managing new requirements Sloan Management Review 1994;35(3):45-60 (7) Meunier KL, Piercy NF Exploring collaboration between sales and marketing European Journal of Marketing 2007;41(7):939-955 (8) Meunier KL, Piercy NF Does collaboration between sales and marketing affect business performance? 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