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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS AND FINANCE

HO CHI MINH

FINAL REPORT

COURSE : SALES MANAGEMENT LECTURER : NGUYEN DUC CONG

CLASS : MGT1107E.B03E GROUP : 3

TOPIC : ANALYSIS OF VINAMILK'S SALES STRATEGY

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ACKNOWLEDGEMENT

First of all, We would like to thank our teacher “Mr.Nguyen Duc Cong”, the lecturer of Sales Management. Without his assistance and dedicated involvement in every step throughout the process, this report could have never been accomplished. His comments and assessments have helped us a lot to improve today's report. Much of the knowledge here is summed up from his lectures and the actual data available online. His lecture was the foundation for me to develop the idea for this report.

However, knowledge is limitless, but the acquisition of each person always has certain limitations. Therefore, in the process of completing the report, shortcomings are inevitable. We hope to receive feedback from him to make this report more complete. We wish our teacher good health and achievements on his teaching path.

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COMMENT OF A GUIDELINES TEACHER

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A.4. Core value ... 12

A.5. Main Product ... 13

B. Sales strategy ... 14

B.1. Sales organization ... 14

B.2. Sales target & sales budget ... 26

B.3. Sale staff recruitment ... 45

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FIGURES

Figure 1: Sales organization of Vinamilk ... 18

Figure 2 : Sales organization in South ... 23

Figure 3 : Sales organization in TP.Ho Chi Minh... 24

Figure 4 : Sales organization structure by market ... 25

Figure 5 : Recruiting personnel of Vinamilk... 49

Figure 6 : Hierarchy of Needs... 78

Figure 7 : The Maslow and Herzberg models. ... 81

Figure 8 : Form used for qualitative analysis of salesperson performance ... 109

Figure 9 : The selling process ... 119

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A. ABOUT THE COMPANY

A.1. OVERVIEW 1.1. INTRODUTION

Vietnam Dairy Products Joint Stock Company, commonly known as Vinamilk, is a company in Vietnam that manufactures and trades milk and dairy products, as well as related machinery and equipment. In 2007, Vietnam was ranked 15th. The company is the industry leader in dairy processing, with a current market share of 75% in Vietnam's dairy sector. Vinamilk's products are shipped to many countries, including the United States, France, Canada, Poland, Germany, the Middle East, and ten Southeast Asian countries, in addition to a strong domestic distribution network of 183 distributors and nearly 94,000 sales outlets in 64 provinces and cities. After 30 years of operation, Vinamilk now owns 8 factories, 1 factory and is constructing 3 more factories. Vinamilk currently has over 200 pasteurized milk products and goodsmade from milk. Vinamilk became the leading dairy producer in Vietnam and achieved the brand name from Southeast Asia that entered many international rankings and celebrated 45 years of success in 2021. This is the result of planning and perseverance used to advance the position of Vietnamese dairy brands in the global dairy market. Vinamilk's main products are liquid milk and powdered milk, as well as value-added products including condensed milk, drinking yogurt, ice cream, and cheese. Vinamilk offers customers a wide choice of products as well as packaging forms with the aim of creating a better experience when using.

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1.2. DEVELOP PROCESS

In 1976, Vietnam Dairy Products Company (Vinamilk) was officially established with the original name Southern Coffee and Milk Company. Depended companySouthern Food Industry Administration - In the first phase, Vinamilk mainly produces fresh milk and condensed milk. In 1982, Southern Coffee with milkThe company was transferred to the Ministry of Food Industry and renamed Dairy Company -Coffee - Confectionery Enterprise I.

March 1992 Milk - Coffee - Confectionery Union I officially changed its name to The name was changed to Vietnam Dairy Products Company (Vinamilk) - under the Light Kit Industry. The company specializes in the production and processing of dairy products.

In 1994, Vietnam Dairy Products Company built another factory in Hanoi to create favorable conditions for North market development. This event raised the total factory in the company to 4. Construction is part of the process of expansion and development strategy to be able to meet the demand for dairy products of the people in the North. In 1996, a joint venture with Quy Nhon Frozen Joint Stock Company established Binh Dinh Dairy Joint Venture Enterprise. This joint venture has helped the company successfully penetrate the Central market in the most favorable way. In 2000, the Can Tho Dairy Factory was built in Tra Noc Industrial Park. In May 2001, inaugurated Dairy Factory in Can Tho.

In November 2003, the Company was transformed into the Vietnam Dairy Products

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VNM. Also this year, the Company inaugurated a new Dairy Factory in Binh Dinh and Ho Chi Minh City.

In 2004, the Company acquired shares of Saigon Dairy Products Joint Stock Company, and increased charter capital to 1,590 billion dongs. In 2005, the company continued to buy shares of joint venture partners in Binh Dinh Dairy Joint Stock Company. In June 2005, the Company inaugurated Nghe An Dairy Factory.

On January 19, 2006, the company was listed on Ho Chi Minh City Stock Exchange. At that time, the capital of the State Capital Investment Corporation held 50.01% of the Company's charter capital. On August 20, 2006, Vinamilk officially change the company brand logo.

In 2009, the enterprise developed 135,000 distribution agents, 9 factories, and many dairy farms in Nghe An, Tuyen Quang. In 2012, the company continued to change brand logos.

In the period 2010 - 2012, the enterprise built liquid milk and powdered milk industry factory in Binh Duong province with total investment capital of 220 million USD. In 2011, Da Nang Dairy Factory came into operation with an investment capital of up to 30 billion USD DOLLAR.

In 2016, inaugurated the first dairy factory abroad, Angkormilk Dairy Factory in Cambodia. By 2017, continue to inaugurate Vinamilk Organic Dalat farm - the first farm organic dairy farm in Vietnam.

From 2021 to now: Vinamilk continues to maintain its position as the leading dairy

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to invest in research and development of new products to meet the increasingly diverse needs of customers. Vinamilk also focuses on environmental protection and implements responsible social activities to contribute to sustainable development.

1.3. BUSINESS MODEL OF VINAMILK

Vinamilk is a large dairy product distribution company in Vietnam, so in order to expand its business scale and reach more customers, Vinamilk has carried out the parallel implementation of B2B (Business to Business) and models B2C (Business to Consumer)

1.4. REASONS TO CHOOSE VINAMILK

Today, no one can deny the important position of the dairy industry in the economy because dairy products are a source of many nutritional values for society, improving human health and intelligence. For economically developing countries, the dairy industry is also increasing and gradually occupies an important position in typical economies such as the US, European countries, Australia, etc.

(Vinamilk) is a state-owned enterprise, directly under the Ministry of Industry, was established in 1976. The company has operated in both economic operating mechanisms: command economy, planning, subsidy, and market economy under the management of government regulations. When switching to a market economy with fierce competition, the company continues to develop with certain achievements. For example, products are increasingly rich and diverse in types, quality, and packaging is increasingly improved, and the reputation of the product is increasingly known to the

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advantages as well as comment on its current sales activities, we decided to choose Vinamilk for research.

A.2. VISSION

“Becoming the leading symbol of trust in Vietnam about nutrition and health products serving human life”

Vinamilk's mission is to provide high-quality dairy products that promote individual and societal health and well-being. Through its dairy products, the company is dedicated to nurturing and promoting the values of nutrition, health, and happiness.

Vinamilk's mission is comprised of the following components:

• High-Quality Products: Vinamilk strives to produce and deliver high-quality dairy products. To ensure that its products meet international standards and customer expectations, the company focuses on maintaining stringent quality control standards throughout its manufacturing processes.

• Nutrition and Health: Vinamilk is committed to providing nutritious dairy products that promote individual well-being. The company understands the importance of balanced nutrition and strives to create products that contribute to a healthy lifestyle.

• Customer Satisfaction: Vinamilk constantly strives to meet and exceed customer expectations by improving its products and services. To ensure customer satisfaction, the company listens to customer feedback and incorporates it into its development processes.

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• Sustainable Development: Vinamilk is committed to environmentally friendly practices. The company prioritizes responsible raw material sourcing, environmental conservation, and community-benefiting social initiatives. Vinamilk strives to operate in a way that minimizes its environmental impact while also supporting societal well-being.

• Continuous Innovation and Research: Vinamilk is committed to continuous innovation and research in order to develop new and improved dairy products. The company invests in research and development to stay ahead of industry trends and meet changing consumer needs.

A.3. MISSION

"Vinamilk is committed to providing the community with top-class nutrition and quality with its own respect, love, and high responsibility for human life and society.” Vinamilk's mission is to become a leading global dairy company known for its quality, innovation, and environmentally responsible practices. The company aspires to be the first choice for consumers looking for high-quality dairy products that promote health and well-being.

The following are the key components of Vinamilk's vision:

• Global Leadership: Vinamilk aspires to be a major player in the global dairy industry by expanding its presence and influence beyond Vietnam. The company strives to become a leading brand that is recognized and trusted by consumers worldwide.

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• Quality: Vinamilk strives to maintain its reputation for producing high-quality dairy products. To ensure that its products consistently meet quality standards, the company is committed to strict quality control measures and continuous improvement.

• Innovation and Product Development: Vinamilk aspires to be at the forefront of dairy industry innovation. The company's goal is to constantly develop and introduce new, innovative dairy products that meet the changing needs and preferences of consumers.

• Sustainable Practices: Vinamilk strives to be a responsible and long-lasting company. The company intends to incorporate sustainable practices throughout its value chain, from raw material sourcing to manufacturing and distribution. Vinamilk is dedicated to environmental stewardship, resource conservation, and social responsibility.

• Customer Satisfaction: Vinamilk strives to exceed customer expectations by providing superior customer experiences. The company works hard to understand and meet its customers' diverse needs, ensuring their satisfaction with its products and services.

A.4. CORE VALUE

Integrity: Integrity and transparency in actions and transactions.

Respect: To have self-respect, to respect colleagues. To respect the Company and partners. To cooperate with respect.

Fairness: To be fair with employees, customers, suppliers, and other parties.

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Ethics: To respect the established ethical standards and act accordingly.

Compliance: To comply with legal regulations, the Company’s Code of Conduct, and the Company’s procedures and policies.

A.5. MAIN PRODUCT

Currently, Vinamilk is providing more than 250 product categories with 6 categories, including 3 main product lines:

Vinamilk liquid milk: including 100% fresh milk, pasteurized milk with added micronutrients, pasteurized milk, organic milk, cocoa barley drink with brands ADM GOLD, Flex, and Super SuSu, rich in healthy nutrients health, and immune support, for the whole family to be stronger so that they are always ready to do the important work every day.

Yogurt: Vinamilk has many lines of yogurt products such as eating yogurt, and drinking yogurt with brands of SuSu, Probi, and ProBeauty, made from typical yogurt yeast, helping the digestive system to be healthy.

Powdered milk: Vinamilk's powdered milk product line meets the nutritional needs of different ages, with the brands Dielac, Alpha, Pedia, Grow Plus, Optimum Gold, Ridielac nutritional powder, and powdered milk. adults like Diecerna special treatment for diabetes, SurePrevent, CalciumPro, and Mama Gold.

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B. SALES STRATEGY

B.1. SALES ORGANIZATION

1.1. WHAT IS SALES ORGANIZATION

A sales organization is both an orienting point for cooperative endeavor and a structure of human relationships. It is a group of individuals striving jointly to reach qualitative and quantitative objectives, and bearing informal and formal relations to one another. Implicit in the concept of a sales organization is the notion that individual members cooperate to attain ends. The sales organization is not an end in itself but rather the vehicle by which individuals achieve given ends. Existence of a sales organization implies the existence of patterns of relationships among subgroups and individuals established for purposes of facilitating accomplishment of the group’s aims. Sales organizations in many companies evolved without regard for changing conditions. The basic setup designed when the company was new, despite, for example, changes in selling style and size of sales force.

The sales organization, after all, is the vehicle through which personal-selling strategy is implemented. A well-designed sales organization, like a well-designed automobile, accomplishes more, and more economically, than does one that is an artifact.The sales organization should be adjusted to fit-ideally, to anticipate-changing situations. Shifts in marketing, in competition, and in other business factors call for changes in the sales organization. The ideal sales organization has a built-in adaptability allowing it to respond appropriately in fluid and diverse marketing environments.

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1.2. PURPOSES OF SALES ORGANIZATION

In the ideally organized sales department, wasted motion and duplication of effort would be eliminated, friction would be minimized, and cooperation maximized. Dynamic characteristics inherent in marketing preclude the achievement of such perfection. But when sufficient attention is given to sales organization, the ideal is approached, if not attained, and personal-selling efforts increase in productivity. Through intelligent leadership and related “human relations” talents, the skilled manager moves both individuals and informal groups along lines that facilitate achievement of the purposes of formal organization. From there, it is possible to determine the purpose of the sales organization, including the following factors:

• To Permit the Development of Specialists

• To Assure that All Necessary Activities Are Performed • To Achieve Coordination or Balance

• To Define Authority

• To Economize on Executive Time

1.3. SETTING UP A SALES ORGANIZATION

Step 1 : Defining the objectives.

The first step in setting up a sales organization is to define objectives. The top management defines the term objectives for the company and from these, the long-term objectives for the sales department are derived. The top management sets the

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leadership, through the use of outstanding technology, diversification of product lines, providing excellent service to customers, and soon.

From such composite objectives, sales management determines its objectives such as personal selling objectives (qualitatively and quantitatively) to realize long-term growth in sales and profits

Step 2 : Delineating the necessary activities.

A sound organizational design requires that all activities are being organized in a systematic manner. Along with determining necessary activities, estimation of volume of performance is also done so as to ascertain the requirement of executive positions. Executive positions determine their relationships to other positions, their duties and responsibilities, etc. Determination of necessary activities and their volume of performance are made by analyzing the qualitative and quantitative objectives of the sale department

Step 3 : Grouping activities into “jobs” or “positions.”

Next, the activities necessary to achieve objectives are assigned to different positions, and this forms the basis for creating job descriptions, including reporting relationships, objectives, duties, responsibilities, and performance measures. Tasks are classified and grouped, with closely related tasks assigned to the same position. It is important to strike a balance between having a sufficient number of tasks and providing variation to ensure job challenge and interest. In large organizations, specialization may lead to positions with a single activity, but this should be carefully considered. Activities crucial to the

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higher-level positions, while less important activities are assigned to lower-level jobs. Departmental subdivisions are formed by grouping related jobs together, and coordination of intermediate-level positions falls under the responsibility of the top sales executive. However, it is important to avoid creating too many administrative levels, and the organization should strive for the smallest number of levels that allow for smooth operations and effective performance.

Step 4 : Assigning personnel to positions.

The next step in this process is to assign personnel to positions. This requires the recruitment of special individuals to fill the positions or to see the personnel fit into the capabilities of the organization. Assignment of personal positions should be done carefully keeping in view of unique talents and abilities of the person concerned Step 5 : Providing for coordination and control.

Sales executives with line authority require means to control their subordinates and to coordinate their efforts. They should not be so overburdened with detailed and undelegated responsibilities that they have insufficient time for coordination. Nor should they have too many subordinates reporting directly to them. This weakens the quality and control and prevents the discharge of other duties.

Coordination and control can be achieved through both informal and formal means. Efficient managers control and coordinate the efforts of their subordinates largely on an informal basis. They tend to make minimal us of formal instrumenta of control and coordination. However, all sales executives can improve their effectiveness through

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The important formal instrument of organizational control is the written job description. This instrument sets forth for each job, reporting relationships, job objectives, duties and responsibilities and performance measurements

1.4. SALES ORGANIZATION OF VINAMILK

Figure 1: Sales organization of Vinamilk

At the top of the sales organizational structure is the national sales director the head – of the sales department and responsible for the overall business strategy and execution. Some typical responsibilities include:

• Developing a sales strategy: The national sales manager will be responsible for researching, analyzing, identifying growth opportunities, and setting targets and targets in line with the company's goals.

• Leadership and management: The national sales director will be responsible for managing, providing, guiding, training, and supporting the directors below. • Key Account Manager: They would collaborate with key account managers to

manage and strengthen relationships with major clients, such as large retail

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chains or distributors. This would involve strategic planning, negotiation of contracts, and undertaking customer satisfaction and loyalty.

• Sales Analysis and Reporting: The national sales manager would monitor and analyze sales performance, market trends, and competitor activities. They would prepare regular reports and presentations to senior management, providing insights, recommendations, and updates on sales-related matters.

The national sales director will be the group's sales director and oversee the activities of the five directors below, including the director of export channels, the e-commerce channel, and the director of three regions: North, Central, and South.

Export :

The Channel Sales Manager plays a crucial role in operating the export sales of Vinamilk.

• Market Research: The Channel Sales Manager conducts market research to identify potential export markets and assess their demand for Vinamilk products. This involves analyzing market trends, competition, consumer preferences, and regulatory requirements in different countries.

• Market Entry Strategy: Based on the market research findings, the Channel Sales Manager develops a market entry strategy for each target export market. This includes determining the distribution channels, pricing strategy, product

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positioning, and promotional activities to effectively enter and penetrate the market.

• Distributor and Partner Selection: The Channel Sales Manager identifies and selects suitable distributors or partners in the target export markets. They establish relationships with distributors, negotiate contracts, and ensure alignment with Vinamilk's goals and standards.

• Channel Development: The Channel Sales Manager works closely with distributors to develop and expand the sales channels in the export markets. This involves providing training, marketing support, and sales materials to the distributors to enhance their capabilities and increase sales effectiveness. • Sales Planning and Execution: The Channel Sales Manager collaborates with

the distributors to develop sales plans, set targets, and execute sales activities in the export markets. They monitor the sales performance, track market trends, and make necessary adjustments to achieve sales targets.

• Relationship Management: The Channel Sales Manager maintains strong relationships with distributors, importers, retailers, and other channel partners in the export markets. They conduct regular business reviews, address any concerns or issues, and provide ongoing support to ensure customer satisfaction and long-term partnerships.

• Export Documentation and Compliance: The Channel Sales Manager ensures compliance with export regulations, handles export documentation, and

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coordinates logistics and shipping activities to ensure timely and efficient product delivery to export markets.

• Performance Analysis and Reporting: The Channel Sales Manager tracks and analyzes sales data, market share, and performance metrics in the export markets. They prepare regular reports and provide insights to management on market trends, competitive landscape, and opportunities for business growth. Overall, the Channel Sales Manager plays a pivotal role in driving the export sales of Vinamilk by developing market strategies, managing channel partners, and ensuring effective sales execution in the target export markets.

E-commerce :

The channel sales manager operates the e-commerce channel of Vinamilk in the following ways:

• Developing the business strategy: The channel sales manager defines the business strategy for Vinamilk's e-commerce channel. This includes identifying goals, target customers, key products and services, as well as pricing and online advertising strategies.

• Building and managing the website: The channel sales manager is responsible for building and managing Vinamilk's e-commerce website. This involves developing a user-friendly interface, optimizing the user experience, ensuring security, and enabling smooth customer interactions.

• Managing the ordering and payment system: The channel sales manager

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integrating secure and convenient payment methods, managing the order process and fulfillment, as well as addressing customer issues.

• Creating and managing content: The channel sales manager ensures that the content on Vinamilk's e-commerce website is up-to-date and engaging. This involves creating and managing product descriptions, images, videos, customer reviews, and contact information.

• Online marketing and advertising: The channel sales manager implements online marketing and advertising activities to increase visibility and attract customers to the e-commerce website. This includes using search engine tools, online advertising, email marketing, social media marketing, and promotional campaigns.

• Managing partnerships and logistics: The channel sales manager collaborates with partners and manages logistics to ensure efficient order fulfillment and timely delivery. This involves establishing relationships with third-party logistics providers and coordinating inventory management.

• Analyzing performance and making improvements: The channel sales manager tracks and analyzes the performance of Vinamilk's e-commerce channel, including sales data, customer feedback, and website analytics. Based

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on these insights, they identify areas for improvement and implement strategies to optimize sales and customer satisfaction.

Overall, the channel sales manager plays a crucial role in operating Vinamilk's e-commerce channel, focusing on strategic planning, website management, content creation, marketing, logistics, and continuous improvement.

For the type of business that provides products to consumers, Vinamik uses a geographical organizational structure. The geographical sales network is the most basic way of organizing the sales network according to the division by territory, by each territory (area, region, locality). This is a way of distributing according to territories such as the South, the Central, and the North, each region will have a person who is generally responsible for profits, management, and administration in the area in charge of information. Under the regional director is the regional sales director because each

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In each specific area, there will be districts and stores as well as related parties that supply products from Vinamilk, for optimal sales activities, there should be supervisors of those stores and districts. And finally, the person who has the most important role, because they are the ones who directly interact with customers and influence the purchase decision or not, depends on the individual seller (salesman). This model completely eliminates the possibility of two or more employees of the same company coming into contact with the same customer. This model is suitable when the product is relatively similar and there are not many additional service requests from the customer.

Specifically, the sales organization structure in the South will include 3 main areas: Ho Chi Minh City, the Western, and Eastern. For the Ho Chi Minh City area, it will be

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The geographical structure of the Ho Chi Minh area, which is managed by a regional manager, under the regional director are 3 Regional Sales Supervisors – for each person the Regional Sales Supervisor will manage a total of 8 districts. In each district, there will be sales supervisors to manage each salesperson.

Figure 4 : Sales organization structure by market

Vinamilk's sales organization structure by market consists of 2 distribution channels, modern and traditional. In which modern channels will include supermarkets and convenience stores; The traditional channel includes a market and a chain of stores called "Giac mo sua Viet".

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B.2. SALES TARGET & SALES BUDGET 2.1. TARGET

Target concept

Targets or quotas are quantitative objectives assigned to sales organizers appraising selling effectiveness, targets specify desired performance levels for sales volume; such budgeted items as expenses, gross margin, net profit, and return on investment; selling- and non-selling-related activities; or some combination of these items.

Targeting is a process for directing and controlling sales operations. Their effectiveness depends upon the kind, amount, and accuracy of marketing information used in setting them, and upon management’s skill in administering the quota system. Ineffective systems, management bases targets on information derived from sales forecasts, studies of market and sales potentials, and cost estimates. Accurate data are important to the effectiveness of a target process, but, in and of themselves, they are not sufficient; judgment and administrative skills are required of those with target-setting responsibilities. Soundly administered targets based on thorough market knowledge are effective for directing and controlling sales operations.

Sales volume concept

The sales volume target is the oldest and most common type. It is an important standard for appraising the performances of individual sales personnel, other units of the sales organization, and distributive outlets. Sales volume targets communicate management’s expectations as to “how much for what period.

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Sales volume targets are set for geographical areas, product lines, or marketing channels or one or more of these in combination with any unit of the sales organization, the exact design depending upon what facets of the selling operation management wants to appraise or motivate

Setting a sales volume target for a sales region, for example, obtains some direction and control, but setting sales volume targets for each sales territory in the region obtains much more

2.2. OBJECTIVES IN USING TARGETS

The general objective that sales management has in mind while using tar- gets is to control the sales effort. Sales control is facilitated through setting targets to use in appraising performances of sales organizational units, such as a sales region or an individual on the sales force. Sales control is tightened through setting of targets on expenses and profitability of sales volume.

To Provide Quantitative Performance Standards

Targets provide a means for determining which sales personnel, other units of the sales organization, or distributive outlets are doing an aver- age, below-average, or above-average job. Territorial sales volume targets, for instance, are yardsticks for measuring territorial sales performance

Targets identify the strong and weak points; additional anal- ysis of performance data uncovers reasons for performance differentials.

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Control over expenses and profitability is tightened through targets

Some companies reimburse sales expenses only up to a certain percentage of sales volume, the expense quota being expressed as a percentage of sales. Others set dollar expense targets and appraise sales personnel, in part, by their success in staying within assigned expense limits. Still others establish targets for dollar profit or profit percentage on sale

Budget targets are particularly appropriate when additional sales volume is obtain- able only at increased expense. Thus, profits increase only with improved selling efficiency To Motivate Desired Performance

Targets motivate sales personnel, distributive outlets, and others engaged in the sales operation to achieve assigned performance levels

Some managements use targets solely for inspirational purposes, basing them almost entirely upon what they think individuals can be inspired to achieve, thus losing inspirational value

2.3. MARKET ANALYSIS

Most labor-intensive industries are facing numerous challenges, resulting in an increase in unemployment rates, forcing consumers to tighten their spending.

Milk products are highly sensitive to pricing and income as a significant portion of Vietnamese consumers do not consider milk as an essential nutritional product. Therefore, the demand for milk products will weaken as consumers tighten their

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In addition, Vinamilk is facing increasing competition in most product categories, especially in the powdered milk segment. In 2022, the company did not introduce any notable new products, and promotional activities were reduced. The company is currently undergoing brand restructuring and refreshing packaging, flavors, expected to be completed in 2023. The restructuring of the sales channels in 2022 may continue to impact the sales in 2023.

Experts expect VNM's export revenue to increase by 7% in 2023 compared to the low base in 2022. This is primarily due to the recovery of milk consumption in the Middle East market at a slow pace and the resumption of milk imports by China after reopening its market. However, the Chinese market still does not contribute significantly to export revenue (about 5%).

VNM's net revenue is expected to increase by 2% in 2023 and 3.8% in 2024. The target forecast for 2024 shows a 3.8% increase compared to 2022. Net revenue in 2022 was 59,956,000,000,000 VND.

=> Expected sales volume = 59,956,000,000,000 * (1 + 3.8%) = 62,234,328,000,000

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Expenses for services of promotion, display, product introduction and sales support

8,717,780,486,455

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Transportation costs 883,655,485,446

Selling expenses of 2024

Expenses for services of promotion, display, product introduction and sales support

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Tools and equipment cost 135,164,688,903

The sales budget is a blueprint for making profitable sales. It details who is going to sell how much of what during the operating period, and to which customers or classes of trade. A sales budget consists of estimates of an operating period’s probable dollar, unit sales, and likely selling expenses. These two estimates are related to predicting net profit on selling operations. The sales budget, then, is a projection of what a given sales program means in terms of sales volume, selling expenses, and net profits.

Cost of sales budget:

When building the cost of goods sold budget, the enterprise will proceed to build the cost norms, thereby determining the expenditure items.

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Regarding personnel costs, the enterprise will make assumptions about personnel from which to calculate the budget for the sales force.

Regarding fixed assets, enterprises must establish a list of necessary fixed assets, from which to get quotes and determine sales budget.

When setting a sales budget, businesses will offer many different options. Usually, 3 basic plans are given according to the level of sales achieved. These options guide the decision-making process of managers when implementing sales plans.

• Plan 1: Sales reached 100% of the set target • Plan 2: Sales reach 120% of the set target • Plan 3: Sales reached 80% of the set target

2.5. PURPOSES OF THE SALES BUDGET

Mechanism of Control

Control is the primary orientation in sales budgeting. The completed budget, which is a composite of sales, expense, and profit goals for various sales units, serves as a yardstick against which progress is measured. Comparison of accomplishments with relevant breakdowns of the budget measures the quality of performance of individual sales personnel, sales regions, products, marketing channels, and customers. These evaluations identify specific weaknesses in operating plans, thus enabling sales management to make revisions to improve performance.

Instrument of Planning

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The sales budget planners formulate the sales plan so that both sales volume and net profit objectives are reached. Showing how to achieve the targeted sales volume is not enough. The planners show how the targeted volume can be reached while keeping selling expenses at a level that per- mits attainment of the targeted profit. Sales budgeting requires the drafting of alternative sales plans and the selection of the one most appropriate for serving the company’s sales volume and net profit objectives. Determining methods

Based on cost targets and results of previous periods

Sales managers base on cost norms and sales results of previous periods, combined with sales targets of the planning period to estimate expenditures and revenues. For example, the sales budget will increase by 10% when the sales target increases by 7%. In, the increases mainly focus on developing new markets if the increased sales come from new markets.

1 Sales Reflect sales results Sales = quantity sold x selling price

2 Net sales

Actual revenue earned by the

business

Net sales = sales deductions – (discounts, VAT, etc.)

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Cost of goods sold = quantity sold x purchase price + purchase costs

Profit before tax = Gross profit – operating expenses of the business

(including selling expenses).

7 Profit after tax

Reflect the effectiveness of sales

activities

Profit after tax = Profit before tax – Corporate income tax

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2.6. FIXED COST BUDGET

Basic salary (fixed salary) and social insurance for sales staff.

Rental and store maintenance costs: Includes the rent for Vinamilk's retail stores. Additionally, maintenance and repair costs for the stores are also included. Other expense accounts such as electricity, water, and internet bills may also be included here. Annual advertising and marketing expenses: Includes costs for traditional advertising (including television, radio, and print media), online advertising (such as Google Ads, and Facebook Ads), and marketing campaigns such as promotions, discount programs, and product launch events. These activities aim to enhance brand awareness and generate interest in Vinamilk's products.

Transportation and distribution costs: Includes expenses for transporting products from the factory to Vinamilk's retail stores. This covers delivery, packaging, packaging, and product storage costs. Additionally, costs for distributing products to end customers are also included here.

Sales channel costs: Includes expenses related to the development and maintenance of Vinamilk's sales channels, including direct sales channels such as Vinamilk stores and indirect sales channels through agents and distributors. This cost may include payments to agents and costs for building and managing the sales channel network.

Information technology costs: Includes expenses related to the use and maintenance of information technology systems to manage the sales process. This may include

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2.7. VARIABLE COST BUDGET

Advertising costs: Vinamilk incurs advertising expenses to promote their dairy products. These costs include advertising on media outlets such as television, radio, print media, and websites. For example, Vinamilk may allocate a significant amount of money to purchase advertising space on popular TV channels to enhance brand recognition and attract customers.

Promotional costs: Vinamilk often runs promotional programs to boost sales volume. These costs include discounts, special offers, product giveaways, and other promotional activities. For instance, Vinamilk may offer discounted prices for milk products or provide gifts when customers purchase a large quantity of milk.

Bonus costs: Vinamilk pays bonuses to sales staff based on their performance and sales effectiveness. This may include sales-based bonuses and other rewards such as target achievement bonuses. For example, sales employees may receive a portion of their salary based on the sales volume they achieve.

Commission expenses: Vinamilk pays commissions to agents, sales representatives, or distributors based on their sales volume. The commission rate is predetermined and often calculated as a percentage of the sales volume. For example, a sales agent may receive a commission based on their sales volume for Vinamilk's milk products. Transportation and handling costs: Vinamilk incurs fees related to the transportation and handling of dairy products from the factory to retail locations. This includes transportation costs from warehouses, packaging costs, and handling of goods. For

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example, Vinamilk may hire transportation services or utilize professional handling units to ensure safe and efficient delivery of products to retail points.

Goods insurance and warehouse insurance fees: Vinamilk purchases insurance to protect goods during transportation and storage. This term includes cargo insurance to cover the risk of loss or damage during transportation and warehouse insurance to protect goods while stored in warehouses. This helps Vinamilk ensure that goods are insured and ready for sale.

Inventory holding costs: Vinamilk incurs expenses for storing and maintaining inventory, especially dairy products. This includes administrative and warehouse maintenance costs, inventory storage costs, as well as quality control and management activities. For example, Vinamilk may have to pay warehouse rent, implement storage systems, and manage inventory.

Guest reception and external relations costs: Vinamilk may have expenses related to welcoming customers, and business partners, and engaging in external relations activities. This includes the costs of organizing meetings, conferences, events, and morning sessions to present products and build business relationships. For instance, Vinamilk may cover the expenses for renting conference venues, guest reception, and hospitality services.

Market research costs: Vinamilk may allocate a budget for market research to understand customer needs and trends. This includes expenses for conducting surveys, interviews, gathering market information, and analyzing data. For example, Vinamilk

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Training and development costs: Vinamilk invests in training and development programs for sales staff to enhance skills and effectiveness. These costs include organizing training sessions, sales skill training, product knowledge, and customer management. For example, Vinamilk may organize training courses on communication skills, sales techniques, time management, and related knowledge to enhance the capabilities of sales employees.

Other expenses: In addition to the mentioned costs, Vinamilk may incur other expenses such as office expenses, telephone bills, paperwork, and other support costs in the sales process. These expenses may vary and depend on the company's operational tools.

Fixed fees

Basic salary fund (fixed salary) and social insurance

8,790,000,000

Includes fixed monthly salary and social insurance for sales staff.

Store rental and maintenance costs

2,000,000,000

Including the cost of renting the store and the costs of maintaining and maintaining the

store.

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