Professional Documents
Culture Documents
Ameiis Lychees Export Plan To EU Market
Ameiis Lychees Export Plan To EU Market
Global Marketing
Ameii’s lychees export plan to
EU Market
Students code:
Do Quang Anh (leader) - 11186125
Le Trung Hieu - 11181746
Do Tuan Long - 11183025
Pham Diem Quynh - 11184266
Tran Vu Hoang Tuan - 11185392
Nguyen Le Huyen My - 11183416
Ha Noi, 2021
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Contents
I. Introduction.........................................................................3
II. Marco environment...........................................................5
III. Firm’s international competitiveness..................................7
IV. Market entry strategy......................................................13
V. Marketing Mix...................................................................16
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I. Introduction
1. Ameii introduction
Ameii is one of the leading Vietnamese brands in the field of exporting agricultural fruit
products, organic vegetables. At present, Ameii has built a system of supplying high quality
and stable products for export.Specifically: Ameii has joint ventures with dozens of suppliers
of agricultural products; To invest in a factory producing and processing dried fruits, fresh
fruit, fresh organic vegetable, frozen vegetable processing factories and many other regular
partners in many provinces and cities nationwide.
With the goal of further development, Ameii is constantly striving to build the system and
connect with strategic partners, reputable suppliers in the country to bring the essence of
Vietnamese products to customers all over the world.
In addition, Ameii is also an importer of specialty items in other countries around the world to
supply and distribute in the Vietnam market. Ameii has prestigious import partners in Japan,
Thailand, Korea, China and many other countries. With the criteria of providing "best quality -
suitable for consumer tastes - reasonable price" is the top priority. Ameii's export products are
fully certified as VietGap (agricultural products), ISO 2200 ... meet the strict requirements of
many international markets such as the USA, Russia, Japan, China. As well as the HACCP
certification, HALAL of the imported products for the domestic market. With the motto of
"ready to cooperate - share successfully - to develop together", Ameii always wants to become
a close partner of importers, suppliers in the country and all over the world. Best regards!
General manager.
2. Product introduction
According to forecasts of Australian lychee exporters, the demand for fruit and lychee in the
world will continue to increase in the coming time. Fresh lychees will remain popular, but
trends are varied. The demand for litchi in the worldization of lychee products will remain
strong. Confectionery, jam, flour and juice products will appear more in the wholesale segment
instead of just fresh lychee dominating this segment as before. In the past, consumers will
become more and more demanding when choosing lychee products as they have more options
from different countries around the world but the clear trend is that products are safe and retain
flavor natural taste will take precedence.
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With a tropical monsoon climate, Vietnam is one of the countries considered to be a fruit
paradise. Stretching from the cape of Ca Mau, passing through fruitful gardens, with markets
floating on the river. Or go to the top of the country, with large gardens overflowing with
lychee, and car trips carrying litchi all the way across the country. Vietnamese fruit is not only
famous for its rich variety of varieties, colors and flavors, but is also characterized by its large
quantity. Not only meeting domestic consumption demand, today's exported fruit has affirmed
its position in the world market such as: EU, USA, Japan, Australia, New Zealand, Taiwan ...,
and contributes significantly to the structure of GDP of Vietnam.
3. Reason for choosing the EU market
Right from the beginning of the integration process, after the collapse of the Soviet Union and
Eastern European countries, Vietnam recognized the EU as a big market that needed
investment and exploitation. The EU is an important export market of Vietnam with two-way
trade turnover in 2012 of over 29 billion USD, in 2013 alone it reached 26.6 billion euros, of
which Vietnam exported to the EU to 21.3 billion. Euro imports from the EU is only 5.3 billion
euros, especially exports of agricultural and forest products. Vietnam's agricultural products
exported to the EU include coffee, pepper, cashew nuts, tea, vegetables, fruits, cereal
products ... The spice products exported to the EU market on average are about 600 thousand
tons / year. However, Vietnam's fruit and vegetable export activities to this market are showing
signs of decline.In 2012, the export of vegetables and fruits slowed down due to problems with
the quality regulations of importing countries, reaching approximately 829 million USD, only
an increase of 33.4% compared to 2011, due to many lots. Exports in violation of EU
regulations. Two-way trade between Vietnam and the EU is constantly growing. The year
2013-2014 was significantly reduced due to the fact that Vietnamese enterprises still did not
meet the requirements for product quality. However, if signed, the Vietnam - EU Free Trade
Agreement (FTA) will help Vietnam's GDP increase by 15%. The FTA will create more
conditions for Vietnamese goods to be exported to the EU. It is expected that this agreement
will help Vietnam's exports to the EU increase by 30-40% and Vietnam's imports from this
market to increase by 25-35%.
With a large market size, the growth of the economy is always increasing, the market demand
for Litchi is large, the US, EU, Japan, Australia ... are known as large potential markets. At
present, when social unrest occurs consecutively, the consumer price index of countries
continues to decrease due to the impact of oil prices, but spending on food consumption has
not decreased but tends to increase. In these countries, product and service quality is what
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consumers really care about. They are willing to pay 2 or 3 times more than the value of the
goods as long as the product meets the required standards they set. The consumer price index
in February 2015 of Japan was 103 points, the US was 235 points, the EU's 117 points, and
Australia's 12/2014 was 107 points. All signs of increase in the coming month. From the above
statistics we see that the potential of the markets is huge.
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USD in 1994 to 2.298 billion USD in 2000. The structure of EU imports: Craft products
account for 29.74% of the total annual import turnover, manufactured products. accounting for
over 67.19%, other products accounting for nearly 3.07%, The main import markets of the EU
are the United States, Japan, China, NAFTA (North American Free Trade Agreement),
ASEAN, OPEC organizes the oil exporting nations. The EU also imports a wide range of
textiles, minerals, seafood, footwear, agricultural products, ceramics, household appliances,
coffee, tea, and spices. This is also the strength of Vietnamese exports and the products
favored by the EU market. From 1990 up to now, the EU has actively "accelerated the
integration" in all fields from economy, currency, diplomacy, security to internal affairs and
justice. The member states gradually concentrated their power in the transition to the
establishment of the European Union.
3. Political and legal environment
- The legal basis for the European Union is the treaties signed and ratified by the member
states of the European Union. The first treaties marked the creation of the European
Community and Union. The successive treaties are editing and supplementing the first
treaties more fully and completely. It is the treaties that create the political institutions of
the European Union as well as give political institutions the authority to realize the goals
and policies set out in the treaties themselves. These powers include legislative powers that
directly affect all member states of the European Union and the citizens of those member
states that the European Union has full legal status to sign. international agreements and
treaties.
- EU politics always have many internal fluctuations and conflicts. In the context of Britain's
departure from the EU, which is causing controversy and confusion in Europe, has not been
resolved, the policy of developing member states of this alliance at various speeds to deal
with the current stagnation. as well as the consequences from Brexit that had been
supported by some leading countries in the EU such as Germany and France, are also
heating the continental politics. Even Prime Minister A. Czechia once said that Europe
developing at many speeds is essential, otherwise the EU will disintegrate. However, the
policy of high-speed European development has been opposed by Eastern European
countries who recently joined the EU because they feared they would be pushed back to the
end of the "EU ship". Poland and some EU member states in Eastern Europe, such as the
Czech Republic, have not yet joined the Eurozone, expressing concerns that 19 Eurozone
countries can integrate quickly and abandon the members. the other will stay behind.
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4. Technology
- The EU countries represent more than 28% of the world's annual inventions and 45% of
international scientific discoveries. In addition, this investment shows that Europe
continues to pioneer science and technology based on international cooperation as one of
the key drivers of success, opening up to innovation and opening up to science. Global
challenges related to the environment, climate change, digital systems need the support of
Europe and the cooperation of international partners.
- It is a coalition that brings together leading industrial countries in the world, leads with
developed machines, science and technology. Famous industries have high positions in the
world: automobile manufacturing, machinery, chemicals, electronic engineering and
environmental technology.
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Europe is one of the largest markets for fresh fruits and vegetables
Europe is one of the largest markets for fresh fruits and vegetables, and suppliers can widely
sell their produce across Europe. More than 80% of fresh exports are supplied domestically in
Europe.
As for in-season fruit, Nam u is a major competitor of suppliers from developing countries.
The farming organizations in Europe are well organized and have optimized their marketing
tools, including social media and online sales.
For good access to the European market, you need to present yourself as a reliable (adhere to
your agreements) and possible (easy to contact) partner. In addition, the effort is made to be a
direct or indirect part of a long-term buying program with European retailers. In addition,
please refer to the websites of France Agrimer, the Fresh Fruit Portal, the CBI channel and
market segments section for more information on the roles of different supply chain partners.
application.
2. Value chain analysis
2.1. Customer perceived value
2.1.1. Product
Alongside clean products, Ameii ensures the committed quality according to standards. A
variety of certifications are required for fresh fruit and vegetables to be available on the
European market. While certifications are common in different European markets, all markets
require quality, food safety and - to a certain extent - awareness of environmental aspects. or
society in production.
Businesses should compete on added value (organic, sustainable, healthy, ready-to-eat
products.)
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Fresh cut fruit and "ready-to-eat vegetables" are a potential market. Exporters can approach
this trend by offering ripe and delicious fruits as well as small consumer-friendly products such
as small "sunset" papaya, small watermelon, melon stomach mouse and cherry tomatoes.
For smaller European niches such as exotic products, the competition may be less intense,
since such products are not popular or grown in Europe. (Advantage of lychee).
2.1.2 Service: Customer support in stores
Post-purchase support & Online customer service
Customers are often unwilling to replace well-established relationships that fulfill all their
requirements or supply specific brands. In particular, reliability is a two-way street, and poor
market conditions can do the worst for people. Requiring product quality is a common practice
in the fresh food trade.
Because of that, Ameii enterprise understands buyers and tries to build partnerships, always be
sure to have the basics prepared whenever entering a new trade.
For example, take a photo of your product before shipping it, negotiate a minimum price, and
get good deals on deals.
2.1.3. Cost:
Product cost
Price is not the deciding factor
Price is one of the main factors that determine which fresh fruit is selected. When a mango is
expensive, consumers may decide to buy other fruit products, at a lower price. Availability of
fresh produce is generally very good and varied. However, consumers mainly buy a familiar
product or search for products that are specific to a particular dish. Under normal pricing
terms, the replacement capacity is low. However, when exporting, it is necessary to take into
account the possibility of fluctuations in demand and prices.
Fruits and vegetables are considered a healthy alternative to traditional snacks. This presents
opportunities, though not always, fresh produce. Fruits and vegetables are used in vegetable
menus, smoothies and vegetable dishes among other products.
Service cost
Support activities
Ameii has already familiarized themselves with the possibilities of using social media and
other information technologies for customer promotions and relationships. Social media such
as LinkedIn, Facebook, Twitter and WhatsApp are widely used in Europe.
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In addition, in an effort to become a direct or indirect part of a long-term buying program with
European retailers, they also refer to the websites of France Agrimer, the Fresh Fruit Portal,
the CBI channel and market segments section for more information on the roles of different
supply chain partners. application.
Transportation
According to the supermarket representative, to keep the best quality, the fresh lychee sold at
this supermarket is transported by air from the end of May to the end of June. Thanks to that,
customers will enjoy this fruit in season with the freshest taste. Lychee fruit has initially
conquered consumers when it is consumed very well and is evaluated for its beautiful color,
fresh taste ...
This year, about 200 tons of fresh lychee will be exported to other markets by air and sea.
2.2. Resources
2.2.1 Technological
The lychee fruit, after being purchased and classified, is put into a multipurpose treatment
system with saturated steam, hot water spray and low PH solution, then dries suddenly by cold
storage air. Through the above process, lychee fruit is cleaned, sterilized, molded, insect
treated to meet the standards for export to difficult markets such as Australia, the US, Thailand
... Through the product packaging process. By sealing film, lychee fruit keeps its quality and
design more beautiful for dozens of days. In addition, thieu litchi gardens are always properly
monitored and cared for according to GlobalGap standards, VietGap regularly and sampled
several times before exporting, all give good results.
Mr. Nguyen Trung Duc, Vietnam Academy of Science and Technology said: “The process of
exporting lychee to the US market is very strict. After selection, lychee will go through
preliminary processing, packaging and quarantine. In the US, consumers prefer litchi that has a
sweet taste, high sugar content and a bright red color. Based on that, Luc Ngan litchi fruit is
suitable to their preferences, however, lychee exported to difficult markets must ensure strict
criteria of partners ”.
The lychee fruit of Luc Ngan district continues to reach export markets in developed countries,
where there are strict requirements on technical barriers, technical standards, and food safety
and hygiene. with imported agricultural products. Maintaining existing markets and
approaching new markets have confirmed the brand of Luc Ngan thieu litchi.
2.2.2 Human Resources
Ameii divided into a team of human resources into departments with specific jobs:
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- Warehouse operator
- Business man
- Staff vouchers
- Port staff
- Customs officer
- International payment specialists
- Partner feedback staff
In addition to professional requirements such as: Diploma, University, foreign language
certificate, ... Ameii staff encourages Logistics staff to receive certification from the American
Association of Transportation and Logistics (ASTL) or the Association. International Logistics
(SOLE). Certification offered by each organization has its own unique requirements, requiring
a combination of academic background, work experience and passing exams.
Communication skills. Logistics staff need good communication skills to be able to collaborate
with colleagues and work with suppliers and customers.
Analytical thinking skills. Logistics employees need to develop, adjust and successfully
implement logistics plans, and at the same time find ways to cut costs and improve work
efficiency.
Organizational skills. Logistics employees must be able to handle multiple tasks at the same
time, keep detailed records and manage multiple projects at a fast pace.
Problem-solving skills. Logistics employees must handle unexpected situations, such as
delivery problems, and must adjust the schedule as necessary to address those issues.
2.2.3 Production
The area of lychee produced according to VietGAP standard is 15,000 ha, GlobalGAP is 218
ha - the US has issued IRADS code, the Japanese authorities have approved 19 planting area
codes; Chinese authorities have approved 149 planting area codes and 288 packaging facilities.
2.3. Performance
2.3.1. Market outlook
Popular.
According to information from the Vietnam Trade Office, the batches of lychee exported to
this country are canned as small as 200g and sold at supermarkets with promotional prices
(equivalent to more than 100 thousand VND). Thus, 1kg of Vietnamese lychee is sold for up to
500 thousand VND.
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Due to being a fruit with a short, fancy, open-to-market crop and being welcomed by the
people of this country to buy at high prices is considered a very good springboard to promote
to other demanding markets and raise. High value of Vietnamese litchi fruit. In particular, to
eliminate the drop in prices that this fruit often faced a few years ago.
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dried agricultural products, and freeze for export service. The company has signed contracts to
consume about 1,250 tons of litchi in growing areas of international standards being deployed
and managed by the province for export to Singapore, Japan, Taiwan, Canada and sold in
Vietnamese supermarkets.
The company only has recent experienced exporting to foreign countries like Japan and
Singapore, yet the government and agriculture firms are very willing to produce more products
to export to even more countries
=> Thus, creating more opportunities for EU market
1.2. Product complexity
Litchi (Litchi chinensis) is a fruit of the Litchi genus of the soapberry family. The tree is native
to China and is grown mainly in Southeast Asia. The growing condition of the plant is frost
free in winter and warm in summer with high rainfall and humidity. Litchi fruit is 5cm long
and 4cm wide. The inedible shell is pinkish red and rough. The pulp inside is white and has a
sweet taste. Litchi fruit can be eaten immediately after peeling.
=> The product has low complexity and do not require service before and after sale
1.3. Desired mode characteristics
- Risk-averse:
Ameii has had experience in exporting to foreign countries, but the EU market
will be very new. Opening a store on your own in the EU will be very risky.
- Control: Ameii does not have the resource to develop a new market in the EU.
The company's main concern will be to focus on developing and improving
product quality.
- Flexibility: The EU market is also quite stable and quite diverse. There is no
sudden big change so it does not require great adaptability of the company.
2. External factors
2.1. Sociocultural distance
The diplomatic relationship between Vietnam and the EU is going really well. The trade
agreement between the EU and Vietnam entered into force on 1 August 2020. The Investment
Protection Agreement will enter into force after ratification by all EU Member States. The
agreements with Vietnam are the second (following those with Singapore) to have been
concluded between the EU and a Southeast Asian country, and represent stepping-stones to a
greater engagement between the EU and the region.
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Vietnam is one of the 10 members of the Association of Southeast Asian Nations (ASEAN)
and has become the EU's second most important trading partner in the region after Singapore.
An increasing number of European companies are establishing in the country to set up a hub to
serve the Mekong region.
2.2. Country risk/demand uncertainty: very low risk
The business environment is very good. Corporate financial information is available and
reliable. Debt collection is efficient. Institutional quality is very good. Intercompany
transactions run smoothly in environments. and represent stepping-stones to a greater
engagement between the EU and the region.
The trade and investment agreements develop the commercial dimension of bilateral relations
between the EU and Vietnam that find their foundation and are governed by the EU-Vietnam
Framework Agreement on Partnership and Cooperation (PCA) that entered into force in
October 2016.
2.3. Market size and growth
Europe has a large and mature market for fresh fruit and vegetables with stable demand
overall. The need for year-round availability and the interest in new exotic produce maintain
Europe’s continuous dependence on external suppliers. Ameii can find most opportunities in
the off-season and in the growing demand for avocados, blueberries, mangoes and sweet
potatoes, among others.
2.4. Intensity of competition
In host country
There are not many competitors of Ameii in terms of quantity. Some of the most prominent
competitors may include Chanh Thu company, Red Dragon company.
In global
In recent years, Thailand and China are two opposites the most interesting player of the fruit
exporting sector in Vietnam. Especially China, the world leader in export volume.
3. Choosing entry mode
Joint venture is a form of company establishment by the association between two or more
independent companies. Joint ventures are quite common when global businesses enter a new
market.
Currently, trade agreements signed between countries have increased, trade barriers are
increasingly being lifted, creating an integrated business environment. International businesses
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wishing to enter other countries' markets are provided with many conditions and certain
advantages.
=> Therefore, Ameii will establish joint ventures with suppliers in the EU.
V. Marketing Mix
1. Product strategy
1.1. Adaptation product strategy: Standardizing
The growing condition of the plant is frost free in winter and warm in summer with high
rainfall and humidity. Lychee fruit can be eaten immediately after peeling. The storage
condition is very suitable for various EU countries. Fresh lychee to be imported into the EU
market must comply with general marketing standards for fresh fruit and vegetables. That’s
why our group decided to choose the Standardizing strategy for Ameii company. There are
also other reasons to choose standardization strategy, like:
- Reduced inventory costs
- Increased market homogeneity
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+ Every lychee product from Amei has the information on the package like: protein, calo, fat,
net weight, minerals in the back side of the bag to help the customer can be aware of the
product's nutrition
+ The lychees in the packaging must be qualified for the “Premium Grade” with various
shapes and color of the variety or type. In addition, the lychee fruit must be free from
defects, except for very slight scratches on the surface and does not affect the general
appearance of the product, the quality, the maintenance of quality and the appearance in the
package product.
1.3. Packing for wholesale:
- Usually packed in boxes with a weight from 2 to 2.5 kg. Larger boxes may be used,
especially when the product is repacked in Europe. Make sure to check the packaging as
desired with the customer.
- The lychee in each package must be uniform and contain only fruits of the same origin,
variety or type, quality, size and color. The visible portion of litchi must represent all of the
lychee fruit inside the package.
- Containers must be of quality, hygiene, ventilation and durability to ensure the process of
loading, transporting and preserving lychees. Packages (or batches if the product is put in bulk)
must be completely free of foreign matter and odors.
Consumer packaging: fresh lychees are sold as soon as they are taken out of a wholesale
canvas box or in a plastic tray weighing 300 or 500 grams.
1.4. Labeling
Consumer packaging must be in accordance with the principles and regulations applicable in
the EU and the European Free Trade Area (EFTA). In order to protect consumers' interests in
accessing accurate and useful information, EU Regulation 1169/2011 sets out general rules,
requirements and responsibilities for the management of food information, in particular.
Labeling of food packages. Trademarks are not allowed to contain toxic inks or glues.
Each package (not for retail use) must contain the following, printed on the same side, clear
and difficult to erase, and visible from the outside:
- Confirmation: name and address of exporter, packer and / or consignment. Verification code
(optional);
- The nature of the product: The product name must be written if the product cannot be seen
from the outside. Variety name or trade name (optional), if in bundle form, the cluster
specifications are required;
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- Product origin: Country of origin is required, not required when the planting area, country,
region or local name is required;
Commodity certification: Product type, size (code if any) and / or net weight;
- Official Inspection Mark (optional).
In addition, for retail packaging, if the product is not visible from the outside, each package
must have a label bearing the product's name and be able to show the variety or representative
of the variety. Certification logos or retailer logos may be affixed, branded if required, in the
case of private label products.
2. Price strategy
Because the Vietnam and the EU markets are separate, the EU market has less price elasticity
for the product, so the differentiated price policy is very suitable.
2.1. External factors
2.1.1. Government influences and constraints
● In recent years, the Ministry of Industry and Trade, the Ministry of Agriculture and
Rural Development and the provinces of Bac Giang and Hai Duong have implemented
a number of measures to promote the consumption of lychees at home and abroad,
specifically:
● Trade promotion program;
● Pilot model of agricultural product consumption and supply of materials for agricultural
production;
● Conferences to discuss measures of lychee consumption in 2014;
● The documents directing the implementation of synchronous solutions to speed up the
time for goods clearance;
● The quarantine agencies at the port and border-gate areas give priority and create
favorable conditions in the plant quarantine for export lychees;
● Strengthen security and order in the area for traders who purchase thieu litchi;
● Allowing appropriate measures to give priority to the transportation of lychees,
● Timely regulating means of transport to avoid cargo congestion;
● ensure environmental sanitation.
● At this conference, the leaders of Hai Duong Provincial People's Committee made many
recommendations to improve the output efficiency for thieu litchi. Accordingly, the
People's Committee of Hai Duong province proposes the Government to supplement:
● Disaster support policy due to warm weather in winter-spring crop for litchi trees;
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● Having a specific policy mechanism to support lending with interest rates suitable to
individuals, businesses, establishments purchasing, preserving, processing and
consuming lychees.
At the same time, it is suggested that the Ministry of Industry and Trade, the Ministry of
Agriculture and Rural Development have appropriate policies to:
● Encourage businesses to find markets, in order to speed up the consumption of cloth for
farmers; Supporting searching for markets and consuming partners;
● Support the trade promotion, advertisement and search for the market for lychee
consumption in Hai Duong province on the mass media.
● Take measures to prevent information causing loss, causing difficulties for the sale of
products
2.1.2. Inflation
The euro area annual inflation rate was -0.3% in September 2020, down from -0.2% in August.
A year earlier, the rate was 0.8%. European Union annual inflation was 0.3% in September
2020, down from 0.4% in August. A year earlier, the rate was 1.2%. These figures are
published by Eurostat, the statistical office of the European Union. The lowest annual rates
were registered in Greece (-2.3%), Cyprus (-1.9%) and Estonia (-1.3%). The highest annual
rates were recorded in Poland (3.8%), Hungary (3.4%) and Czechia (3.3%). Compared with
August, annual inflation fell in thirteen Member States, remained stable in seven and rose in
seven.
● The total size of the European import market for lychees is estimated at around 20,000
to 25,000 tonnes annually. Madagascar is by far the biggest supplier of lychees to
Europe, with an exotic fruit supply (mostly lychees) of 15.5 thousand tonnes in 2017.
Most of this supply was destined for France.
● A large part of the lychees arrives by sea through the port of Zeebrugge, giving Belgium
an important role in the logistics and re-export of lychees to France. But in 2017, France
registered a direct supply and Belgian imports dropped from 14,000 tonnes in 2016 to
7,000 in 2017. This data shows a change in logistics and a more direct trade with
France. For exporters, it is most important to realise that France determines most of the
demand of lychees in Europe, and that there is also a market for air-freighted lychees.
● The most common varieties of Lychees sold on the European market are in the so-called
Mauritius group. Varieties in this group include HLH Mauritius (also known as Tai So),
Muzaffarpur, Late Large Red, Hazipur, Saharanpur, and Rose-Scented. On the French
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market, the variety Yellow Red is also popular. Other less well known varieties are Fay
Zee Siu (green, small stone, and good taste), Red MacLean, Emperor and Chakrapad
(with large fruits, Thailand).
Taxes
The taxes of lychee to EU is 0%
2.1.3. Currency fluctuation
In early 2021, the European Euro had decreased, to a conversion value of 1 Euro
for 1.1759 USD.
2.1.4 Business cycle Stage
Statistics
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2.2.3. USP
The company's average export price of the company products is lower than that of competitors.
Most of the cost of raw materials for processing dried lychee and lychee vinegar for export is
from domestic sources, only a few chemicals and additives are imported from abroad.
The two main products of the company, fresh and dried lychee, are increasingly favored by
consumers in most parts of the world with many different types and quality requirements. They
are convenient, nutritional and provide healthy value for aquatic food, which are loved by the
international markets.
Currently the company is implementing a quality management program according to the
system of standards such as HACCP, GMP, and SSOP. In recent years, the company's
Technical Department has strengthened product quality management and completed the
application for ISO 22000 certification.
2.2.4. Product cost structure
Pricing strategy is a decisive factor in the strategy of market penetration. Like any commodity,
the price of a fruit product is determined by world supply and demand. For dried and fresh
lychee, due to the strong sales and purchase in international markets, the price fluctuates
strongly.
In addition to supply-demand interactions, in most markets, there is active intervention from
the government. In this respect, the EU market is regulated by a system of prices and tariff
barriers.
It is because of these binding conditions that currently the company does not have a specific
price policy, the way the company usually uses it is: cost plus X% of profit. Technically, this
means that after determining ex-factory prices, including production costs plus a certain
percentage of profit and offering FOB prices to foreign importers. This method is very popular
and is called the Cost-Plus Method. This may be the easiest pricing method, but it is not the
best method. With this calculation, the profit depends much on the fluctuation of market
prices.
3. Distribution strategy
3.1. Distribution system in EU
3.1.1. Agency/ intermediaries
Agents will actively contact exporters to buy sufficient quantities of goods for one shipment.
They will then resell to their EU customers who are mainly wholesalers. They do not buy or
sell nor are they responsible for the goods. Some agents only trade in exotic fruits and earn
profits by earning commissions (up to 10% in some cases). However, in return you can save a
considerable amount of shipping fee.
3.1.2. Importers / Merchants
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This is the source of imports directly from manufacturers / exporters. They will clear the
customs of the goods and in some cases also take care of the packing when delivering the
goods to the retailer. Importers typically supply wholesalers and retailers and some of the
groceries specializing in food services. Importers' profits range from 5% to 10%.
The importer is a very important link in the fresh vegetable trading channel in the EU because
they know this market very well and have close relationships with suppliers and buyers. They
play a special role as quality manager or logistics service provider. In many cases, the importer
often prefers to do long-term business with the supplier, which is an advantage for small or
new exporters or not experienced in the EU market of Vietnam.
3.1.3. Wholesaler
The wholesaler buys fruit and vegetables from importers, manufacturers or at auctions. After
that, the fruits and vegetables are shipped to retailers or department stores that specialize in
food and supermarkets. A big difference is between wholesalers who supply to retailers
(understood as the sole retailers of supermarkets) and wholesalers who supply vegetables to
horticulture and other professional retailers. . However, the role of wholesalers is diminishing
as retailers tend to cooperate with direct service providers such as importers and agents.
3.1.4. Retail channel
Sales volume of retailers specializing in fruit and vegetable trading in the EU is still quite high,
but profits have declined sharply in the past few years. However, retailers in Southern Europe
do not dominate the market as strongly as those in Northern Europe, so the opportunities for
professional retailers are still very high. Retailers specializing in fresh vegetables in Europe
that outsource overseas often offer value-added vegetables such as sliced cowpea, mange-tout
pea and vegetables used to fry.
Some large retail chains have their own shopping centers and vegetable transport systems. In
addition, they tend to operate through exclusive suppliers or have special relationships and
long term contracts. This means that Vietnamese exporters can avoid pressure from the trend
of consolidating goods on world markets. On the other hand, such contracts often limit changes
in production and marketing due to strict and strict terms.
Supermarkets / hypermarkets are also a distribution channel that helps increase sales of
prepackaged vegetables. However, with the increasing demand for low-priced goods, the
transportation fee becomes the deciding factor for which vegetables are imported from
developing countries.
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More and more retailers and product development companies cooperate with each other to
develop new and innovative products. Multidisciplinary retailers pay great attention to the
layout of booths selling fresh products, aiming to attract more customers. The current trend is
to adopt the layout of the traditional fresh vegetable stores and try to ensure it is always
available. For example, snow peas were once considered a specialty but are now popular and
available all year round.
Out of home channels such as food supply organizations are also the distribution channels for
importing a large amount of high quality tropical fruit. Vietnamese fruit and vegetable
exporters do not need to work directly with these organizations, but possibly through
wholesalers or importers.
In general, the current structure of distribution channels for fresh fruits and vegetables in the
EU has forced exporters to pay attention to large retail chains that are the main consumers of
fresh vegetables in this region. Retailers, wholesalers and importers require exporting
companies to ensure consistent quality, be able to deliver large quantities and deliver on time.
3.2. Decisions concerning structure of the channel
3.2.1. Types of intermediaries
Commercial intermediaries: wholesalers, retailers
Intermediary agent: Beva Fruits
Supporting intermediaries: warehouse companies, banks, advertising support for warehouse
companies
3.2.2. Market coverage:
Ameii has yet to enter the EU market. Therefore, the company needs to maximize its
product coverage in the EU market to increase brand and product awareness. For this
reason, the approach of intensive distribution is the most suitable for Ameii. The
company will use the largest number of different types of intermediaries and retailing
supermarkets such as Tesco, Sainsbury's, Asda and Morrisons.
3.2.3. Channel length
Ameii Company → Distributor: The Mercer House → Wholesalers → Retailers →
Customers
3.2.4. Control/Cost
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To minimize financial resources when getting the product to the user customers, Ameii
must use intermediaries. Therefore, Ameii will be accepting loss of control over the
marketing.
3.3 Managing and controlling distribution channel
3.3.1 Screening and selecting intermediaries
To Screening and selecting intermediaries we rely on screening criteria and selecting the most
suitable screening partners that Ameii can find. Based on the following evaluation criteria:
- Financial and company strengths:
Size of business / producer: size of business is small and medium scale
- Required market coverage: high coverage, especially in low-income settings, with
regard to price
- Flexibility of the distribution channel system: distribution channels are many, evenly
spread
3.3.2. Contracting
When Ameii has found their suitable partner, a contract over sales agreement is required.
Before the final contract is agreed upon, both parties need to discuss some factors for direction
- Time of delivery;
- Both sides’ responsibility
- Security
- Commission
- Criteria when selecting goods
- Payment method
3.3.3 Motivating
By offering both monetary and psychological rewards, the intermediaries will be strongly
influenced by the earnings potential of the product
3.3.4. Termination
Only consider terminating the contract when:
- The company receives too much complaints from the customers about their brand
- The partner fails to meet minimum sales requirements
- Either sides has broken the term of the contract
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4. Promotion
4.1. Factors influencing the communication situation:
- Economic differences: Europe is a developed continent, almost everyone has smart
electronic devices such as cell phone, laptop, personal computer, tablet, etc…, so selling
online and offline will be an advantage. The overall GDP is very much higher than
Vietnamese’s GDP, so good products like lychee will be worth more in Europe than in
Vietnam.
- Legal/Regulatory differences: With imported products like fruit, the EU has very strict
policies about food safety, the food quality, the social environment and business,
especially about the food and the environment. The EU sets the MRLs (Maximum
residue limit) for insecticide in and on the fruit from 33% to 70%. This is favorable for
Ameii because of the product quality is strictly and carefully picking
- Competitive differences: African is one of the biggest competitors. Africa's main market
for lychee exports is Europe, with France being the core market for lychee exports from
Madagascar, and the Netherlands being the largest market for South African lychee.
Other destination markets for South African lychee exports are the UK, Canada, Dubai
and the US. In South Africa, lychee production faces competitive pressure from more
profitable fruit crops such as avocado and macadamia. Marketing for lychee is difficult
due to the fact that this is a fruit that quickly spoils. They are damaged quickly, so after
harvest, it must be transported within 24 hours to ensure quality. Ameii needs to focus
on the lychee maintenance after harvest so they keep the freshness and meet the
qualification of the EU.
- Language differences: The EU is a continent, there are several languages but English is
the main one. The packaging need to be clear in information and images of the lychee to
ensure there is no misunderstood.
- Socio-cultural differences: The European care alot about the appearance of the products.
When promoting the lychee, they should have vivid image and sounds.
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4.2. Advertising
- Objectives: increase brand awareness to improve Ameii’s corporate image among new
target customer group and increase sales.
- Budget decisions:
Ameii will use the objectives and task approach. Despite its reputation in Vietnam, Ameii
is like a “remake” in Europe. Therefore, when making export investment decisions, they
must rely on targets to make a reasonable budget, to avoid wasting capital and not targeting
the potential customers. Firstly, based on the objectives, which are to increase brand
awareness and sales volume, Ameii will calculate the maximum budget for advertising
activities then inform The Mercer House. Then they will take care of the rest of the process
under the supervision of Ameii.
- Message decisions:
The products' unique selling propositions (USP) are fresh lychee harvested from the farm in
VietNam, which are good in quality and strictly picked by Japanese professionals.
The message will be built in English to aim at most European, then there will be subtitles in
other language for each market. The following goals are ensuring the respect of both the
main languages of Europe; ensure fair use of these bilinguals in federal agencies.
- Media decisions:
Running ads on google and facebook platform in times to high traffic => introduce the
business and products and reach as many customers as possible
Create DOOH billboards in places where many people pass by but not too ostentatious
(due to insufficient funds to pay) such as subway stations, on uber chairs, on signs in
shopping centers, especially in the area shopping Ameii was present
- Agency selection: use the local agency in the international markets because they capture
market trends more effectively.
- Advertising evaluation: depends on the number of people reaching, the number of people
who click on the ad after each podcast or run the ads, the sales revenue after each
advertising day, the cost per activity.
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4.3. Public Relations
Objectives: Establishing an image for Ameii, increasing brand awareness for Ameii in the
Europe market.
PR activities for Ameii:
- PR through electronic newspapers:
Writing articles about the special kind of fruit which can’t be planted in Europe due to
the condition of the land. The nature of the lychee (sweet, delicious, good for your
health, etc…). The quality of the Vietnamese exported lychee.
- Deploying events like farmers markets to introduce the Vietnamese Lychee to the
European consumer.
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4.4. Sales Promotion
Goals: Greater retail competition and increase the level of Ameii’s awareness inside the
consumers.
- Samples: Customers visiting Ameii 's farmers market are free to try out Vietnamese
Lychee. But they can only try it at the market, so it’s better to spread the word of mouth
or check in on social media.
- Coupons, gift: For every 10 kilogram of Lychee purchased, the customer will receive a
coupons for 1 kilogram of any type of other Vietnamese fruit in the future farmers
market
4.5. Direct Marketing
Ameii will have to collect and analyze available data of potential customers, including their
email, phone number, address and shopping habits. Ameii will choose some direct marketing
tools:
- E-mail: This is a very cost effective direct marketing tool. Ameii will send emails to
potential customers for the purpose of introducing its new products, promotions, as well
as invitations to the farmers market.
For example, the emails send the buyers some gifts or promotion codes. This way Ameii gets
the contact details as well as the preferences of the buyer. The online shopping sites track the
visitor’s site visits for certain products. Then mostly a reminder message is sent to the visitor.
For example, “you were interested in an x product. Now it’s available at a discounted rate.”
- Telemarketing: It involves reaching the potential customers over the phone to sell the
products. Ameii has to rely on well researched customer data. The customer’s profile
should match the product which the customer may buy. This is a tool that is gaining a
lot of significance as it reduces the cost of personal selling, and is considered reliable
for following up on direct marketing campaigns.
For example, for some customers who are interested in Ameii’s products, and signing to
receive the invitation via email, telemarketing representatives do follow up calls to remind,
consult as well as influence buyers to buy the products.
- Catalogue marketing – The organisation sends details of their products in the form of a
catalogue/lookbook (online link via email) to the potential buyers who sign membership
and register to receive.
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- Internet marketing/ online marketing: This gives a great opportunity for Ameii to reach
the masses directly and individually. Ameii will run SEO, Display Ads (pop-ups) on
some local newspapers, social media sites like Twitter, Facebook
4.6. Personal Selling
Ameii is in the agriculture industry, their products are Lychee which require personal selling as
an important tool. In addition, personal sale is a very effective factor in establishing contact
between salespersons and buyers in two directions. The customers can inquire and ask the
salespersons face-to-face questions. At the same time, they can discuss and reach a clear
understanding and take a proper buying decision, which encourages them to re-deal.
Customers can get the information and choose their suitable products and the company can
collect the feedback and the customer’s behaviors and interests. Ameii wants customers to
have a great experience at their stores, so salespersons need to be well trained. The company
needs to work on the training and qualification of salespersons and increase their capabilities to
negotiate so that they can deal properly with customers. Also, they need to equip salespersons
with the required flexibility, which enables them to activate sales and provide discounts to
customers with the aim of encouraging them to buy.
4.7. Fair Trade
Ameii will join some local trade fairs in the first place. It is an opportunity to happily introduce
new product - the lychee fruit, promote brands and products, as well as attract and find
potential customers. Ameii will bring somes catalogue, introduction about the brand and some
gifts and coupons.
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4.8. Social Networking
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Bảng đánh giá thành viên nhóm:
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