Tiềm năng của chè Việt Nam trên thị trường quốc tế

i

THAI NGUYEN UNIVERSITY

Socialist Republic of Vietnam

SOUTHERN LUZON STATE UNIVERSITY

Republic of the Philippines

NGUYỄN THỊ SINH CHI

(English Name: MARIA)

Potential of Vietnam tea

in the internation market

TNU-SLSU, 2013

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Potential of Vietnam tea in the internation market

A RESEARCH PROPOSAL PRESENTED TO THE FACULTY OF GRADUATE SCHOOL

SOUTHERN LUZON STATE UNIVERSITY LUCBAN, QUEZON, PHILIPPINES

THAI NGUYEN UNIVERSITY S.R. VIETNAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE

DOCTOR IN BUSINESS ADMINISTRATION

Name: Nguyễn Thị Sinh Chi

English name: Maria

Advisor: Dr. Nelly L. Mendoza

2013

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ACKNOWLEDGMENT

First, I would like to sincerely thank Dr. Nelly L. Mendoza who was dedicated to guide,

encourage and help me overcome the difficulties in the course of study to complete my

thesis.

I would like to express deep gratitude to the teachers of the SOUTHERN LUZON

STATE UNIVERSITY lectured, contributed many valuable comments, help me a clearer

orientation in the process of implementation and completion of the dissertation I also would

like to thanks to the teachers of the International Graduate Study Programs have

facilitated rapid help in terms of procedures, processes during the course of the dissertation.

I would like to thank to the Managing Board of University of Social Labor Affairs has

facilitated support in terms of time for me to complete the course.

Please be affectionate towards friends, colleagues, was always encouragement, help and

support me throughout the process of doing the thesis. Sincerely thank Mr. Phan Minh

Thuy, Deputy Head of the legal department, Vietnam Chamber of Commerce and Industry

(VCCI), Vietnamese enterprises were answer survey investigation, leaders of enterprises

were willing to help and provide the data, documentation, figures related to the subject.

Finally, please send your profound gratitude to the loved ones of the family had be always

side by side, encouragement and motivation helps me overcome difficulties to complete the

thesis.

Sincere thanks!

The Author

Nguyen Thi Sinh Chi

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TABLE OF CONTENTS

Chapter I: INTRODUCTION................................................................................ 1

1.1. Introduction...................................................................................................... 1

1.2. Background of the study ................................................................................... 1

1.3. Statement of the problem .................................................................................. 3

1.4. Significance of the study.................................................................................... 4

1.5. Subject and scope of research ............................................................................ 4

1.5.1. Subject of research.......................................................................................... 4

1.5.2. Scope of research............................................................................................ 4

1.6. Definition of terms ............................................................................................ 5

1.6.1. Concept of strategy......................................................................................... 5

1.6.2. Concept of the world market entry strategy..................................................... 6

Chapter II: REVIEW OF RELATED LITERATURE AND STUDIES

2.1. Significance of planning the world market entry strategy of a sector for

development of national economy .......................................................................... 12

2.2. The world market entry strategy planning ........................................................ 13

2.2.1. Determination of the world market entry target............................................. 13

2.2.2. Selection of the target market........................................................................ 14

2.2.2.1. Information collection for market selection ................................................ 14

2.2.2.2. Methods for target market selection ........................................................... 15

2.2.2.3. Selection of methods to chose the target market......................................... 16

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2.2.3. Analysis of competition ................................................................................ 17

2.2.3.1. Analysis of business sector ........................................................................ 17

2.2.3.2. Analysis of national competitive advantage................................................ 18

2.2.4. Analysis of competitiveness.......................................................................... 20

2.2.5. Selection of competitive strategy .................................................................. 23

2.2.6. Selection of the world market entry methods................................................. 24

2.2.6.1. The world market entry from domestic production..................................... 24

2.2.6.2. The world market entry from foreign production........................................ 24

2.2.6.3. The world market entry in the free trade zone ............................................ 25

2.2.7. Marketing Mix strategy planning ................................................................. 26

2.2.7.1. International product strategy..................................................................... 26

2.2.7.2. International pricing strategy...................................................................... 26

2.2.7.3. International distribution strategy .............................................................. 27

2.2.7.4. International promotion strategy ............................................................... 28

2.3. Research on experience lessons of successful tea exporting countries in the world

and lessons learned for Vietnam ............................................................................ 28

2.3.1. Research on experience lessons of tea exporting countries............................ 28

2.3.1.1. Sri Lanka ................................................................................................... 28

2.3.1.2. Kenya ....................................................................................................... 28

2.3.1.3. India .......................................................................................................... 29

2.3.1.4. China ......................................................................................................... 30

2.3.2. Lessons learned from Vietnam...................................................................... 31

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Chapter III: RESEARCH METHODOLOGY

3.1. Methods of data collection, processing and analysis......................................... 32

3.1.1. Subjects of survey......................................................................................... 32

3.1.2. Sources of data ............................................................................................. 32

3.1.2.1. Sources of secondary data ......................................................................... 32

3.1.2.2. Source of primary data .............................................................................. 33

3.1.3. Methods of data collection, processing and analysis...................................... 33

Chapter IV: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

4.1. Research on the production, export and import of tea in the world ................... 35

4.1.1. General overview of the tea industry............................................................. 35

4.1.1.1. The major products of the tea industry in the world trading........................ 35

4.1.1.2. Standard Requirements for tea exports....................................................... 36

4.1.1.3. Standard Requirements for tea exports....................................................... 37

4.1.1.4. Analysis of competition in the world tea industry....................................... 37

4.1.2. The situation of production and export of tea and analyzes the competitive

advantage of countries exporting tea....................................................................... 39

4.1.2.1. The situation in the world tea production ................................................... 39

4.1.2.2. The situation in the world tea exports......................................................... 41

4.1.2.3. Analysis of the competitive advantage of tea exporting countries .............. 42

4.1.3. Tea import situation, analyze the factors that affect the size and price of imported tea

and segment of the world market for tea products................................................... 46

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4.1.3.1. Overview of world tea import situation ...................................................... 46

4.1.3.2. Analysis of factors affecting import scale and import prices of tea importing

countries................................................................................................................. 48

4.1.3.3. World market segments of tea products...................................................... 49

4.2. The situation of Vietnam's tea production ........................................................ 54

4.3. The situation of Vietnam's tea export............................................................... 55

4.3.1. In volume and export turnover...................................................................... 55

4.3.2. Regarding exports......................................................................................... 55

4.3.3. Regarding export markets............................................................................. 56

4.3.4. About enterprises involved in exporting tea .................................................. 59

4.4. The situation of the world market penetration of Vietnam tea .......................... 60

4.4.1. The objective of market penetration of the world in time for tea.................... 60

4.4.2. Status of research activities tea export market and identify your target market63

4.4.3. Status of competitive strategy ....................................................................... 64

4.4.4. Selection modes penetrate world markets...................................................... 67

4.4.5. Status of strategic planning of the Vietnam Tea Marketing Mix .................... 67

4.4.5.1. Strategy for Vietnam tea products.............................................................. 67

4.4.5.2. Strategy for Vietnam tea products.............................................................. 72

4.4.5.3. Distribution strategy for Vietnam tea products........................................... 73

4.4.5.4. Promotion strategy for Vietnam tea products.............................................. 76

4.5. Assess the competitiveness of exporters Vietnam tea ....................................... 76

4.5.1. The importance of these factors constitutes the competitiveness for Vietnamese tea

export industry (determination of weights) ............................................................ 76

4.5.2. Analysis of the elements of Competitive capacity of exporters Vietnam tea .. 77

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4.5.2.1. Competitiveness of price............................................................................ 77

4.5.2.2. Competitiveness of governance capacity.................................................... 78

4.5.2.3. Competitiveness of manufacturing technology........................................... 78

4.5.2.4. Competitiveness of human resources ......................................................... 79

4.5.2.5. Competitiveness of export organizations.................................................... 80

4.5.2.6. Competitiveness of developing business relationships................................ 80

4.5.2.7. Competitiveness in research and development............................................ 80

4.5.2.8. Competitiveness of marketing.................................................................... 81

4.5.2.9. Competitiveness of financial...................................................................... 82

4.5.2.10. Competitiveness of handling trade disputes.............................................. 82

4.5.2.11. Competitiveness of the brand ................................................................... 82

4.5.3. Integrated assessment of Competitive capacity of exporters Vietnam tea ...... 83

4.6. SWOT Analysis of Vietnam's tea export.......................................................... 84

CHAPTER V: FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1. Strategic goal of penetrating the world market for Vietnam's tea products in 2020 …89

5.2. Viewpoints development of Vietnam's tea exports in 2020............................... 91

5.3. Strategic Options for Vietnam's tea export ....................................................... 92

5.3.1. These strategies can be applied to Vietnam's tea industry.............................. 93

5.3.2. The strategic option for the Vietnamese tea industry ..................................... 94

5.3.2.1. For types of black tea packaged in 3 kg black tea Type .............................. 95

5.3.2.2. For types of green tea Pack on3 kg ............................................................ 98

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5.3.2.3. For types of black tea packing under 3 kg under 3 kg Pack black tea........ 100

5.3.2.4. For types of green tea packaging under 3 kg packaged green tea Type ................. 102

5.4. Marketing Mix Strategy for tea export products of Vietnam........................... 104

5.4.1. Strategy for Vietnam tea products............................................................... 104

5.4.2. Pricing strategy for Vietnam tea products.................................................... 105

5.4.3. Distribution strategy for Vietnam tea products............................................ 106

5.4.4. Promotion strategy for Vietnam tea products .............................................. 107

5.5. The implementation of strategic solutions penetrate the world market for

Vietnam'stea products in 2020. ............................................................................. 108

5.5.1. The main solution ....................................................................................... 108

5.5.1.1. Manufacturing solutions .......................................................................... 108

5.5.1.2. Processing solutions................................................................................. 111

5.5.1.3. Solutions to improve capacity planning, implementation strategy............. 111

5.5.1.4. Solution for research and development..................................................... 112

5.5.1.5. Solution of branding for Vietnam tea products......................................... 113

5.5.1.6. Solutions to build linkages between actors in the value chain of the tea industry.114

5.5.2. The solution supports.................................................................................. 115

5.5.2.1. Solution of training and development of human resources........................ 115

5.5.2.2. Financial Solutions .................................................................................. 116

5.6. Recommendations ......................................................................................... 116

5.6.1. For State ..................................................................................................... 116

5.6.1.1. The policy plannings resource development raw material......................... 116

5.6.1.2. The policy to support the development of export markets......................... 117

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5.6.1.3. Improve policies and methods of management of the tea industry and tea

quality control ...................................................................................................... 119

5.6.1.4. The policy to encourage and support other............................................... 119

5.6.2. For the Vietnam Tea Association ................................................................ 120

5.6.3. For Businesses............................................................................................ 121

CONCLUSION.................................................................................................... 123

REFERENCES..................................................................................................... 125

APPENDIX.......................................................................................................... 128

LIST OF SYMBOLS AND ABBREVIATIONS

Symbol Abbreviation

EFW Economic Freedom of the World

GAP Good Agricultural Practice

GCI Global Competitive Index

GDP Gross Domestic Product

HACCP Hazard Analysis and Critical Control Point System

IGG Intergovernmental Group on Tea

RCA Revealed Comparative Advantage

SWOT Strengths, Weaknesses,Opportunities, Threatens

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LIST OF TABLES

Table 2-1: Useful data for market selection ............................................................ 14

Table 2-2: Description of evaluation matrix for the enterprise’s internal factors ..... 22

Table 4-1: Planting area of each continent in 2000-2009 (1000 ha)......................... 40

Table 4-2: Export turnover of tea of the world, classified by type of tea (million USD)

............................................................................................................................... 41

Table 4-3: List of countries exporting tea into groups............................................. 44

Table 4-4: Some characteristics of the group of countries exporting tea ................. 45

Table 4-5: Import prices of 05 tea importing countries having highest import prices

in 2005-2009 (USD/kg).................................................................................... 48

Table 4-6: Results of world market segmentation ................................................... 50

Table 4-7: Area, products and exportation of Vietnam tea ..................................... 54

Table 4-8: Structure of exports tea of Vietnam (2008-20011) ................................. 56

Table 4-9: Average prices of Vietnam's tea export and of the world (USD / kg)...... 56

Table 4-10: The Major Export Markets of Vietnam Tea Products (million USD).... 57

Table 4-11: Some average indicators of Vietnam's tea export in the period of

2005-2009 according to the World Market Segmentation ....................................... 59

Table 4-12: The leading tea exporters of Vietnam in 2012 ...................................... 60

Table 4-13: One of the specific targets of the tea industry the period of 2000-2010 61

Table 4-14: Some average indicators of Vietnam exported green tea packed more

than 3kg the period of 2005-2009 according to the World Market Segmentation .... 69

Table 4-15: Some average indicators of Vietnam exported black tea packed more

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than 3kg the period of 2005-2009 according to the World Market Segmentation .... 69

Table 4-16: Results of survey of importance of the elements made up the

competitiveness of Vietnam tea export industry...................................................... 77

Table 4-17: Matrix on competitive capacity of Vietnam tea exporters .................... 78

Table 5-1: Some targets for production and exportation of tea industry .................. 89

Table 5-2: Some of the characteristics of each market segment for this type of

black tea packaged on 3 kg..................................................................................... 97

Table 5-3: Some of the characteristics of each market segment for this type of

green tea Pack on 3 kg............................................................................................ 99

Table 5-4: Some of the characteristics of each market segment for this type of

black tea packing under 3 kg ................................................................................ 104

Table 5-5: Some of the characteristics of each market segment for this type of

green tea packaging under 3 kg............................................................................. 103

LIST OF BOXES

Box 4-1: Competitive strategy by creating differentiation of Tan Cuong tea .......... 65

Box 4-2: The strategy of New Generation limited liability company....................... 66

Box 4-3: Tea products of Vinatea ........................................................................ 68

Box 4-4: The role of brand tea - Tea olong ............................................................. 71

Box 4-5: Build Vinatea's direct distribution channe ................................................ 75

Box 4-6: "Taste for tea of each country”................................................................. 81

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RATING SHEET

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Chapter I

INTRODUCTION

1.1. Introduction

Vietnam is considered to be the cradle of the world’s tea plants, ranks the 5th in the

world for tea cultivation and processing and the 8

th for annual tea export. However,

building and spreading Vietnam tea brand is almost open. Any enterprise can produce and

process tea depending on their capacity. Most of the exported products are only in the

rough and unbranded form, causing the Vietnam tea to be confused or named under large

foreign tea firms. Nearly half a century for exporting tea to the world market, only a

symbol of three tea leaves with the trade name "Vinatea" helps the importers know

Vietnam tea.

At present, Vietnam's tea export is still concentrated in big markets such as

Pakistan, Taiwan, Russia, Afghanistan and China. Ten countries with high tea import

turnover from Vietnam in 2012 reached 224.6 million USD, accounting for 73 % of total

tea export turnover. Specifically, in 2012, Pakistan was the biggest tea export market of

Vietnam, reaching 45.3 million USD, accounting for 20.1 % of the total tea export turnover

of Vietnam. Secondly, it was Taiwan where Vietnam’s tea export turnover reached 29.5

million USD, accounting for 13.1 % of the total tea export turnover of Vietnam. Thirdly, it

was Russia where Vietnam’s tea export turnover reached 21.6 million USD, accounting for

9.6 % of the total tea export turnover of Vietnam. Only tea export turnover to these three

markets accounted for 42.9 % of total tea export turnover of Vietnam. Furthermore, if

comparing 10 major export markets occupying about 90% Vietnam's tea export turnover in

the early 2000s to those nowadays occupying about 73%, it is possible to indicate that the

diversification and expansion of market of tea-exporting enterprises is limited and such

expansion has not been diversified in depth.

1.2. Background of the study

Although tea plants have been grown and consumed in our country for so long, the

domestic tea market now accounts for about 20%. Thus, the majority of Vietnam's tea

products are mainly consumed by the world market with 80% of Vietnam's tea output.

Because Vietnam tea products are mainly consumed by the world market and relied on a

few key export markets, they are exposed to market risks. This situation can be seen clearly

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in 2003 when the Iraq market was collapsed due to wars. Before that, Iraq was the biggest

tea export market of Vietnam in the period 1995-2002 (making up about 40% of total

exports) and its collapse has caused great loss to tea-exporting enterprises and tea sector of

Vietnam. This shows that although in recent years the tea export market has been

expanding, the Vietnam tea-exporting enterprises have not established stable and strong

markets for export development. Consequently market diversification is urgently required

for the tea sector as well as for the tea-exporting enterprises in Vietnam.

Moreover, one of the major tea import markets in Vietnam is India, where is now

slowed down, while in previous years, the largest tea producing country in the world still

imported more thousands of tons of tea a year, including Vietnam tea for processing. There

are many markets refusing to import Vietnam tea such as Ireland, Belgium, Denmark,

Korea, Hong Kong, France and Sweden due to poor quality products. During the last time,

although tea-exporting enterprises have made efforts to diversify the market and in fact we

have entered some new markets, the volume and value of export is very limited.

In addition, the export performance of tea-exporting enterprises in Vietnam is very

low. This represents the distance between the world tea price and Vietnam’s tea export

price is quite high, ranging from 50-70% depending on each kind of tea.

According to the general report on development of the tea sector in ten years (1999-

2009) at "the second International Conference on Vietnam Tea" which was held in July,

2010, for the last ten years, the targets of tea output, export volume, average yield and

material region area have been achieved or exceeded. However, the noteworthy issue was

the continuous decrease in export tea price. The price of Vietnam's export tea in June, 2010

was only 1.4 USD/ kg, while in 1998, it was 1.52USD/kg. This price gap is getting wider

than the average price in the large auctions in the world. In 2009, while the average tea

price in such auctions increased to 2.43 USD/kg, the Vietnam’s tea price was only 1.23

USD/kg.

Thus, from 1998 until now, the average export tea price in the world has increased

by 18%, but the price in Vietnam has reduced 20%. Therefore, in spite of ranking the fifth

in the world for tea export, the price is lower than the average price in the world, Vietnam

tea brand has not been widely known and particularly the income of tea growers is not

improved.