International University-VNU HCM

School of Industrial Engineering and Management

PROJECT
RETAILING MANAGEMENT

A CASE STUDY OF BACH HOA XANH

Lecturer: MSc. Nguyen Hoang Huy

GROUP MEMBER:

Le Huy – IEIEIU17052

Truong Chi Tam – IEIEIU17015

Vu Duy Quang – IEIEIU17096

Nguyen Luu Thanh Thao – IEIEIU17018

Pham Bich Khue – IEIEIU17007

Duong Minh Hien – IEIEIU17012

Nguyen Nhu Phuong – IEIEIU17062

Ho Chi Minh City, Vietnam

01/2021
Table of Contents
I. PROPOSE RETAIL TYPE ............................................................................................. 4

1. Retailer Characteristics ................................................................................................... 4

2. Food retailers .................................................................................................................. 5

3. Ownership ....................................................................................................................... 5

II. TARGET MARKET..................................................................................................... 6

III. LOCATION ANALYSIS: .......................................................................................... 10

1. 2015 - early 2018 .......................................................................................................... 10

2. 2018 - now .................................................................................................................... 13

3. Comparing results through the two stages and conclusion (analyzing changes in results
when alternating the location strategy): ............................................................................... 16

IV. RETAILING CHANNEL........................................................................................... 18

1. Trends of retailing in Vietnam: ..................................................................................... 18

2. Bach Hoa Xanh retailing channels:............................................................................... 19

3. The importance of multichannel retailing to BHX: ...................................................... 33

V. MERCHANDISE MIX ............................................................................................... 33

VI. PRICING: .................................................................................................................... 34

1. BHX’s pricing policy: Everyday Low-pricing (EDLP) ................................................ 35

2. Other practices to compete with price .......................................................................... 36

3. Demand-Oriented Pricing Strategy ............................................................................... 38

4. Assessment of business activities of BHX.................................................................... 38

5. Proposed business solutions for BHX........................................................................... 39

VII. MARKETING COMMUNICATION MIX OF BACH HOA XANH (BHX)........ 40

1. Retailing in Vietnam: .................................................................................................... 40

2. Methods of communicating with customers: ................................................................ 41

3. BHX marketing communication mix: ........................................................................... 43

VIII. CUSTOMER SERVICE ......................................................................................... 54

1. Definition ...................................................................................................................... 54

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 2. The Importance Of Customer Service .......................................................................... 54

3. Workforce Training Strategy ........................................................................................ 55

4. Workforce Treatment .................................................................................................... 55

5. Customer Service Standardization ................................................................................ 56

IX. STORE LAYOUT AND DESIGN ............................................................................. 59

X. REFERENCES............................................................................................................ 63

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 I. PROPOSE RETAIL TYPE

1. Retailer Characteristics
a. Variety & assortment

Bach Hoa Xanh (BHX) is a grocery and general merchandising retailer with wide variety
and moderate assortment.

• Variety: BHX has been set up perishable retailers that are closest to traditional
markets, which makes sense why BXH has been intending to attract housewives
by offering various food as much as possible. With these strategies, lots of
marketing promotions have been recently launched like “thịt tươi – cá lội”.
Due to BHX combines market and grocery store in one roof, their SKU (stock
keeping unit) is estimated a quite large number. In 2020, there are nearly 4000
FMCG (Fast Moving Consumer Goods) and 3000 perishable goods. Because
BHX mainly provides food-based goods, it is an impressive number that 48% of
all SKU is food. Compared to other minimarts normally supply FMCG more than
food.
Food
Vegetables Meat Fish, Fruit Freeze
seafood food
9% 14% 8% 9% 8%

• Assortment: BHX is rich in diverse items such as fresh food or beverage.

Otherwise, some kinds of goods have been just kept in shallow assortment.
DEEP SHALLOW
Snack Powdered milk
Canned food Rice
Cooking spices …
Soft drinks
…

b. Services offered
• Advantages
Free parking providing with security guards
Available from 6:30 to 21:30 for every day, even holidays

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 Available in many regions

Large area compared to other minimarts (Coop food, Satra food, Vinmart,
Vinmart+, etc)
Own private labels
Bill payment, mobile cards
• Drawbacks
Inexperienced workers
Delivery service is not highly focused
Website has not been optimized and utilized yet

2. Food retailers
In order to achieve a multinational retailer model, BHX runs as a supermarket food retailer
type. There have been many operational strategies for BHX successfully attract more
customers.

• Fresh merchandise: as mentioned above, BHX emphasizes on fresh food most, these
profitable goods are being launched through many promotions.
• Health/Organic Merchandise: as we can know, many conventional supermarkets
attract segment of consumers who are health-conscious by offering more natural,
organic and fair-trade food as much as possible. BHX, however, does not maximize
this retailing characteristic because its attractiveness is convenience and low cost.
• Another important thing worth to mention is private-label merchandise: It is
commonly considered a competitive business advantages to boost their reputation.
BHX exclusively possesses cereal & almond milk from Korean, sweets and biscuits
from Malaysia and Indonesia, etc. These are offered with appealing prices and widely
advertised on Bachhoaxanh’s fan page as well as YouTube channel.

3. Ownership
BHX Trading Joint Stock Company (BHX) is one of members of Mobile World Investment
Corporation (MWG). In 2016, Mr. Tran Kinh Doanh – Group CEO, BOD member – has
taken over Executive Chairman of BHX Trading JSC. Thera is a brief view that finds BHX
chains accounts 5% of MWG’s revenue structure in 2018. They expect to achieve better
results in the future.

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 II. TARGET MARKET
Many people put questions about customer types that Bach Hoa Xanh (BHX) want to focus
on, are they intend to attract people who currently belong to other supermarkets,
conveniences store? Do they put investment on advertising and fresh food to have more
market share. The answer was conducted by the board of MWG that BHX now reach from
500 to 1000 customers per day, which is not the time for them to put money on marketing,
and from the company’s perspective, the return on investment to get market share from other
chains is very low.

On the other hand, with the limitation in time and new rising demands, Vietnamese are
having many options for shopping experiences. Modern market is become more and more
familiar because of the large number of convenience store, mini market, etc. also many
chains that focus on health care products. However, it is no doubt that traditional market is
still taking the big part.

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 Therefore, their strategy is to get customer from many traditional markets:
housewife, student temporally living nearby.

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• So how can they take advantages?

According to Nielsen Vietnam Report published in 2016, Bach Hoa Xanh should focus on
meeting the top three choices of consumers when choosing to buy food today. It is to
ensure product quality, clear origin but the price is always cheap, even cheaper than
traditional markets. Along with that, the friendly and enthusiastic staff has helped Bach
Hoa Xanh attract and retain customers. In addition, many housewives are worried about
going to the market because they are too busy like picking up children and blocking
traffic in the afternoon, when Bach Hoa Xanh has a strategy of delivering products with
orders of over 10 USD.

• What did they achieve yet?

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MWG Chairman Nguyen Duc Tai has kept plans for the Bach Hoa Xanh chain on track
over the last two years. The company identified a successful formula for the chain after
completing a pilot in 2016. The chain established important foundations last year and this
year is the time to boost its development. In the first stage, average monthly revenue at
each store was expected to be about $22,000 but is now around $57,000. The figure at the
Le Trong Tan Street store is about $100,000, Mr. Ngo Trung Duc, Manager of the Bach
Hoa Xanh chain in Tan Phu district, told VET. Average monthly growth per store in the
district is about 20 per cent.

It is important that Bach Hoa Xanh has positioned the brand in the market and is
gradually creating different values and attracting enough customers to its stores who
previously shopped at traditional markets. “With the mini-mart model, we have made
efforts to create a more modern shopping environment than at traditional markets and
more interesting than at grocery stores,” Mr. Tai told local media. “We listened to the
demands of consumers and the market.”
According to Mr. Tai, 30 per cent of consumption in fresh and processed products is
supplied by supermarkets and 70 per cent by traditional markets. Bach Hoa Xanh aims to
reach 10 per cent of the 70 per cent in traditional markets. The chain, indeed, will not
compete with other supermarkets like Co. op Foods and Satrafoods or convenience stores
like Circle K and Family Mart. Its strategy is to focus on broad coverage and to be similar
to traditional markets but with better services and a more diverse range of food and
goods. “The purpose of opening the chain is to encourage customers to buy food from us
for 20 days a month and from traditional markets or supermarkets for the remaining days
of the month,” Mr. Tai told an analyst meeting in February.

• What do they expect in the future?

Bach Hoa Xanh recorded revenue of VND1.38 trillion ($60.9 million) in 2017,
contributing 2.1 per cent to MWG’s total, but did not post a profit. It is now making
greater efforts to improve operations and attract more customers. It will review its 1,000-
store plan after implementation and plans to open 5,000-6,000 stores in other major cities
such as Hanoi and Da Nang over the next five years. In assessing such plans, ACBS
reported that expansion will not be easy in second-level cities and rural areas and the
retailer needs to be cautious about the speed of its network expansion over the next few
years.

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 III. LOCATION ANALYSIS:
BHX retail locations strategy:

1. 2015 - early 2018

- BHX location strategy during this stage:

From the beginning, BHX’s strategy is to focuses on opening their store in facade or front
areas and right inside the residential areas. When the brand is broadly known by citizens, they
will easily approach smaller districts or communes. To what they explained, until then, when
they’re big enough, they don’t have to spend too much budget on promotions to let people
know of them or acknowledge them as a popular and trustworthy brand, people will
automatically shop at BHX.

At first, BHX opened their very first stores at Binh Tan District, as Binh Tan is the place that
has the highest population density in HCM city with the goal is to penetrate deeply into the
residential areas.

- BHX customer target based on the location strategy:

With the precept “Shop faster, shop cheaper’, most people, especially busy people that want
to shop same products as can be bought at the market but in higher quality and have proper
origin, as well as the similar products that are sell at supermarket but can be bought in such
shorter amount of time found BHX is suitable for them since the retailing chain has created
such faster, safer way to shop for customers.

At this stage, when have made their mind out on the location strategy, which is to exploit
within the residential area to open more stores, attracting people and citizens who live around
it, will find it’s convenience to shop at. The store reputation circle is average, small BHX
stores achieve around 500 customers daily and bigger stores are approximately 1000
customers daily.

They have also defined their strongest and most important type of customer that shop at their
places are housewives and their largest market share are people who shop daily at traditional
market. In order to attract the people who shops at traditional market, we usually find there
are one BHX store around the traditional market, with the strategy is to directly attract and
approach the customer in this area. BHX is enhancing the selection of FMCG products with a
clear certificate of origin and choosing good local that are typical products in order to adapt
the customer requirements. For instant, stores in high-income residential areas such as in

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certain areas in district 2 will provide importing fruits, while in lower-income areas, they will
mainly provide typical and common fruits.

- BHX store requirements and store model descriptions:

With the idea of raising the unstoppable and sustainable growth, by the end of 2017 after
finishing the trial phase, they have set out the expectation amount of store by the end of 2018
is up to 1000 stores, BHX defined their suitable store model as each store areas are around
150-300 m2, only exploiting the ground floor.

o This average area however doesn’t affect much on the process on finding the
suitable location, someway it is much easier when compared to find a suitable
location for DMX or TGDD stores. With DMX, the minimum area should be
350 m2 in order to fill all the needs to store such electronic devices like
televisions, refrigerators, etc. TGDD area should be at least 800 m2, the
purposes leasing such huge area are depend on the store, TGDD acts like a
specialty store, the assortment should be wide and the variety should be deep
to adapt every customer need. Of all the 3 types of big retailers of MWG
corporate, BHX requires the smallest area. With such smaller area, the
corporate could easily find the location.

The main products BHX provide are Fast Moving Consumer Goods (FMCGs) which includes
canned food, soft drinks and beverage, vegetables, fruits, cosmetics, etc. The amounts of
fresh products are around 100 SKUs.

- BHX leasing method:

Basically, there are 2 main options when select a location that retailers can consider whether
to invest in buying and improving as well as developing the estate or to commit to a leasing
contract with the leaseholders. This is a risky and important to a retailer when selecting a
location. In order to analyze, retailers often choose the second decision.

o The disadvantage of this method is the price of a real estate investment

actually isn’t really cheap at all, and when buying the whole place, in several
cases retailer has to spend more money in redesigning the place, with such
risky factor that at some point, the customers around the place we invested
money in doesn’t work out as we expected. By that time, too much money and
effort have been spent on, that would be a huge loss for the retailer. However,

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 the advantage is retailer don’t have to suffer from leaseholders’ unexpected
moves such as raising the rent.
o The reason why most retailers choose the second method which is committing
to a leasing contract for 5, 10 years. The contract time isn’t really long and
when compared to the money where retailers have to spend when investing,
the money they spend leasing would be cheaper. Thus, 5 years is an average
time for a retailer to find out whether the location site is suitable or not. If it
does attract a lot of customers, the business goes well, retailers can consider
signing another contract with the leaseholder. And if not, finding another
location when ending the contract would be possible. However, as mentioned
above, the leaseholder acts as the unpredictable factor in this case. If the
business goes well, the leaseholder may want to increase the rent. Maybe by
the end of the contract, your business goes well and you want to continue
renting the place but the leaseholder may not want to sign another contract
with you.

Analyzing BHX case, I think BHX is a growing retailing chain, which actually are mini-
supermarket chains that are specialized in selling fresh food and basic, daily necessities and
when mentioning the growth of BHX, the present amount of store by the end of 2017 is 283
stores, their goal by this time is to expand the amount of store by the end of 2018 is 1000
stores. With such huge amounts of stores, it doesn’t make sense if BHX investing in the
whole place and suffering from risks, unexpected factors. Moreover, they had just finished
their trial phase, and they have also set out the goal with a number of 1000 stores, choosing to
sign the renting contract with the leaseholder would leave BHX retailer extra money to invest
in more other locations instead of spending too much money in just one location.

- The results of BHX when approaching the location strategy:

By the end of 2017, when BHX had finished the trial phase, they found out their suitable
“role model” by determining the appealing location and the potential customers. They
successfully on the rise of growth, they had opened and put 283 stores into operation in 2017
with the average income of each BHX store is 700 mil. VND/month. This number is
considered as super low and much lower than what the brand had expected, which makes it
harder and longer for BHX to reach its break-even point EBITDA. At the end of 2017, the
brand BHX had reached 1.387 billion VND, which has either rising or growing compared to
the same time last quarter. As a matter of fact, they had to shut down 3 stores this stage.

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In early 2018, the revenue per month of each store was still decreasing and reached the
bottom with 600 million VND/month/store. This has become an alarm notice that it was the
time that BHX determined again their strategy, especially their location strategy.

2. 2018 - now
- BHX location strategy during this stage:

When deeply analyzed, BHX has realized that the fact that they build the location of the
stores they opened right inside the residential areas are quite “rush” and not optimal, actually
they admitted that they were too eager to win the market. Moreover, during the open hours,
they did look through their customers and they realized big fact that customers, especially
busy people, tend to shop at BHX on the way coming back home from work cause it’s
convenient for them to stop by the stores that has appealing and suitable location, which will
be detailed mention on the store requirements. BHX have changed their strategy as following:

o Adjusted the amounts of stores to be opened in 2018 is 500 instead of 1000

like previous year. Focusing on changing the location of new stores: the stores
has to be located around the density residential areas, around the traditional
markets and it has to be located especially on the main streets. To easily
understand, instead of locating their stores right inside the residential areas as
before, BHX now open their stores on the main streets which lead to
residential areas. This is much more convenient for both BHX to deploy their
plans and the customers.
- BHX customer target based on the location strategy:

At this stage, BHX isn’t wrong about their customer target, which are housewives, especially
busy people. Based on the potential customers that usually shop at BHX, the brand has tried
every way to attract more not just this type of customers but also others by enhancing the
store locations as more convenient and adaptive to any customers’ requirement as they could.

BHX had determined main factors that people tend to shop more at their places due to these
reasons:

o The stores are close and convenience to customers

o The providing fresh products, thus the assortment is deep and the variety is
wide.
o Products are certificated by VietGAP or GlobalGAP, especially fresh products
like meat, fish, vegetable, etc.

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 o Shopping experience is better since the stores usually update the promotion
events, provide free and wide parking lot including security supervision, the
space is large enough and the ambient is also pleasant.

By determining the above reasons, it gets easier for BHX to deploy their strategy, which will
be explained on the following part.

- BHX store requirements and store model descriptions:

BHX had also made some significantly changes besides changing the location and the site of
the store from April 2018, which we couldn’t help mentioning the changes in the store
specifications. They re-determine their store models, which is called “the new models”, the
new models; requirements are described as following:

o The store areas should be at least 150-250 m2 (standard type) 300 m2 (large
type), almost twice bigger than the old stores areas requirement. However, as
usual, in order to optimize the convenience, they deploy the ground floor only.
The expanding in the store areas meant to make customers don’t have to find
themselves in uncomfortable situations finding the parking areas. Aside from
reducing any possible obstacle stopping customers from coming to shop at
BHX, the brand also uses the extra area in increasing the assortment of the
products, especially fresh products.
o The brand emphasizes on the importance of the fresh meat, fresh fish. They
display small ponds right at the store in which there are fresh fishes. Thus,
they increase the amount of in fresh products from 100 SKUs in old models
into 300-500 SKUs in this developing model. Moreover, they still have to
make sure all of their products are certificated by VietGAP or GlobalGAP.

Thus, their idea in innovating the stores are making the customers having experience as going
shopping at the supermarket but as convenient as shopping at the traditional market. They
also ensure that even though they provide fresh products, they also provide the suitable
preservation methods. The structure of the store imitates the model of traditional markets:

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 o With the stores around the market, the areas spent for parking isn’t as big as
the others since most of the customers that shop at traditional market go by
foot. They mainly invest on the structure of the store imitating the traditional
markets in order to attract the customers who shop here. The ambient of the
store is comfortable and clean, the store isn’t too big but consists of most of
what the customers want that the market could supply but in just one roof. The
employers are dedicated and helpful in helping the customers getting what
they want, suggesting the current promotion events. The price is reasonable,
the products are fresh and hygiene certificated. The fresh products are
displayed right outside with water-misting system to maintain the vegetables
fresh all day.

With the new stores they had opened after deploying this strategy, the average revenue of
each new stores is approximately 900 million VND/month. With the old stores that hadn’t
been applied with this model, they deploy the strategy right away and shut down the stores at
areas that couldn’t be deployed in order to save cost. By the end of 2018, the brand recorded
that 92% of the stores have been developed into the new model

- BHX leasing method:

As the old model, we’re now analyzing the current configuration that BHX has been applying
during this stage to find out its suitable leasing method. The brand is still acting as a grocery
store, the function it’s trying to bring to the customer remains the same. The biggest
difference that has the significant effect on the leasing method is the total area of the store of

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the new model must be at least 150-250 m2 (standard type) 300 m2 (large type). In fact, the
decision on choosing the suitable leasing method has nothing to do with the areas of the store,
it should be based on the careful calculation of the brand. Especially during this pandemic
caused by Covid-19, it’s super essential to carefully consider this problem. The most
important benefit that leasing a place brings to retailer is the flexibility. As mentioned above
on the part I, if we consider ourselves as a growing company, leasing is an easier method to
accommodate growth instead of buying. It is a huge investment to spend on just buying the
whole place and even if we’re buying the whole place, we get the chance to totally control the
place in exchange of what? Controlling the opening hours wouldn’t make sense, the opening
hours are made since housewives shop during that hour. Even if we get the chance to control
our whole place, the trade-offs are too big and it’s redundant to spend such large money on
investing. Instead of spending the whole big money into buying the whole place, retailers in
general and BHX in particular could spend and spread their money in signing the leasing
contract with the leaseholder, cause after all, their largest goal is to expand their brand as big
as they could, then it is essential and reasonable to leasing instead of buying the whole place.

- The results of BHX when approaching the location strategy:

After recovering and making such significant changes, the monthly revenue of each stores
has surprisingly increased and reached the peak of 1.2 billion/month/store by the end of 2018,
averagely there are 11.5 million outward journeys by customers per stores during August
2018. According to [Link], these figures are growing and remain sustainable
that within the next few years, the revenue that BHX contributes to MWG will bigger than
both TGDD and DMX.

Larger scale and increase the amounts of fresh products SKUs has also contributed a 14-18%
growth. BHX took this as an advantage to penetrate deeply into other south provinces, trying
to reach outside of HCM city to broaden their brand.

3. Comparing results through the two stages and conclusion (analyzing

changes in results when alternating the location strategy):
After changing the location strategy and the development of the stores model since April
2018, the brand has recovered from such huge loss caused by the miscalculating in the
process of choosing the location of the stores.

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The innovations expressed through data that record the changes in the total revenue of each
stores and the amounts of stores of the 2 stages, before and after deploying the strategy.

Records on total revenue and number of stores

before and after changes on the location stratergy
700
606
550 600

500
435
400
355
261 300
283

141 190 200

110 100
67
0
Quarter1.2017 Quarter2.2017 Quarter3.2017 Quarter4.2017 Quarter1.2018

Total Revenue (billion VND) Total amounts of stores

Through the actual data, what we have to admit that is the instant recovery and growth rate of
BHX right after changing the location strategy as well as the new model of the stores.
Comparing the statistical values of the same quarter but different year, we could see the
growth of total brand revenue has incredibly increased from 141 billion VND to 606 billion
VND.

The figure also acts as a notification that current model and changes that BHX had made is
suitable and they should keep up with this strategy. Moreover, this also means that BHX has
been ready for the next step on expanding their brand aside from HCM city. On the second
quarter of 2018, the brand has starting to open stores in the southern provinces. Remaining
the current location strategy, the brand focuses on crowded areas, open stores on main streets
that leading into the residential areas or near the traditional markets.

Until now, the year 2020, during the pandemic caused by Covid-19, BHX is still maintaining
their sustainable growth. By this time, there are 1687 BHX stores around Vietnam, highly
distributed in southern areas especially HCM city, the growth rate of this time compared to
the same time last year has increased 103%.

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Through what we’ve observed, BHX had successfully recovered from their trial phases
thanks to changes made through adjusting the location strategies, which has once again
claimed the importance of location strategy to retailers.

IV. RETAILING CHANNEL

1. Trends of retailing in Vietnam:

Vietnam is currently possessing relatively young population (40% is under 24). Which is an
important factor that effects the consumption behavior when most of the younger shoppers
prefer purchasing through the Internet (Websites, applications, etc.) or on different e-
commerce sites (Lazada, Shopee, [Link], etc.) rather than shopping directly at the physical
stores. This is one of the reasons why we need to determine the suitable potential customers
and broaden or enhance various types of channels that are respectively with such customers.

When conducting a survey in 2018 to learn more of people shopping behavior, Deloitte sent
out their survey forms to different people from mainly Ho Chi Minh city and Ha Noi, with
different ages ranging from 20-50 and above, with different income, asking their favorite
platform when they shop for food/beverages.

Preference for different purchasing channels

(food and beverages)

Supermarkets
67%

Traditional markets
55%

Convinience stores
54%

Street stores/ Grocery stores

49%

Online
19%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Percentage of purchasing

Not surprisingly, from most of the answers they collected, people still prefer shopping
directly at supermarkets (67%) and traditional markets (55%). However, the rate that people
choose shopping food/beverages through the internet is 19%, which is not small. Obviously,

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people are still fond of shopping store-based alternatives and the fact that the advantages that
store-based retailing channels they bring to us are unavoidable.

However, since the outbreak of Covid-19 pandemic, the amount of directly shoppers had
went down, which has eventually affected to customer shopping behavior, mainly due to the
highly restriction from social interaction, people couldn’t leave their house unless it’s urgent
or when they leave the house to get food or other personal stuffs for their family. This has
once again claimed the importance of retailers create or implement a method that could adapt
to the current situation.

2. Bach Hoa Xanh retailing channels:

Talking about retailing, we couldn’t help mentioning one of the biggest “domestic retailing
player” that is Bach Hoa Xanh (BHX). BHX was officially developed by the end of 2015,
when MWG cooperate found that the revenue they were currently gain in the electronic
devices sold through their 2 biggest chains Dien May Xanh (DMX) and The Gioi Di Dong
(TGDD) will soon be saturated and won’t be remained with such exponential and long-term
growth, MWG leaderships thought of creating a new retailing chain that is specialized in food
and FMCGs, with the idea that this new brand would soon be large enough and contribute
long-term growth for the cooperate.

As mentioned above, as any retailers in general, the largest sales are contributed by store
channel. However, catalogs and Internet channels also account for significant sales. The
important factor is the way retailers contribute and promote to each channel since it’s
impossible to invest the same money for all channels, retailers have to consider other factors
such as each channels customer target, motivations of customers to shop at a certain channel,
what channel brings the most benefit to the business, etc.

Currently, there are 3 main channels that we can observe from BHX that are store channel,
internet channel and catalog channel.

a. Store channel of BHX:

o Channel descriptions:

Store is the crucial channel to any retailers, especially food-related retailers. Store channel
refers to retailers sell and display their products at a physical store, which gives customers
opportunities to go and shop directly at the store. BHX stores model has been developed
lately in order to satisfy customers’ requirement, especially in optimizing the convenience of

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shopping at BHX. The stores areas are averagely large: 150-250 m2 (standard type) 300 m2
(large type), all of the stores are exploited using only ground floor only in order to optimize
the total customer movement in the store, which will also save time and optimize the
convenience for the customers.

Currently, BHX chain has 1.713 stores even distributed in southern provinces and south-
central coast areas. Even though the chain hasn’t orient to north sides of Vietnam, the growth
is worth appreciated that within just a small amount of time since the development, BHX has
now become one of the biggest “domestic retail players” in Vietnam.

BHX stores open from 6:30 – 21:30 even on Sunday and holidays. The opening hours of
BHX is in peak hour unlike most of supermarkets earliest open hour is 8:00. The opening
time and closing time of the store is also suitable for most people, busy people will most
likely shop on the way coming home, which is after 17:00, when most of the markets are
closed already and they can’t shop for fresh products, the operation hours is one of the
strengthens that BHX attract customers. Moreover, unlike most of the convenience stores,
BHX provides larger parking lot and security staffs to help customers moving their vehicle in
and out of the store.

o The layout and the characteristics:

Living in modern world, educated people and most people in Vietnam has realized the
importance of clean, fresh, certified food, which couldn’t be provided at markets. However,
supermarkets (Coop mart, Vinmart+, BigC, etc.) do provide similar products but with higher
assortment and variety. However, the appearance of BHX and other grocery stores have
become a chance to attract customers, the products are hygiene certificated by VietGap or
GlobalGap but it is provided and sell at a competitive price when compared to that of the wet
markets.

The layout of BHX store is displayed with the emphasize on the fresh products (meat, fishes,
vegetables, fruits, etc.) since this is the type of products that BHX currently enhances on as
well as the type of products that brings most percentage of the chain revenue. Other types of
FMCGs are displayed in shelves, classified by types of products such as noodles and other
instant food, milk and other beverages, frozen food, etc. The average SKUs of fresh products
in store are around 300-500, depend on the areas of each stores, other types of products can
also be bought in BHX store with popular, widely use brands such as ACECOOK,
AJNOMOTO, PEPSICO, CP, etc. The chain tries to bring the customers everything they

20
want within one roof where they can easily purchase, rather than running around the market
struggling finding different types of products provided by different types of sellers. In general,
the types of products are clearly displayed in order to help customers find it easier to navigate
the types of products they want to buy. The store isn’t small and the ambient is more
comfortable compared to that of the convenience store. Moreover, the store is clean and
bright, which enhances customers having much better shopping experience compared to
traditional markets.

Currently, with most of the stores in high population density with larger investment, the store
is displayed with the similar model as the traditional markets. The fresh products are priority
displayed right in front of the store, customers don’t have to spend too much time parking to
go into the store, they can directly shop just like in wet markets and get support from sales
assistant as usual. This new model has emphasized on the uniqueness characteristic of BHX
store, it has never been deployed or regularly seen especially in Vietnam but BHX has
successfully imitated this model taking inspiration from the traditional market.

21
Moreover, the stores also provide various payment method for customers such as cash
payment, credit cards payment in order to make it easier for different types of customers
usual payment method.

Thus, BHX store also help customers having better shopping experience by having sales
assistants with friendly behavior to support the customers in finding the goods they’re
searching for, introducing current promotion events and encourage customers buying
products from promotion events. In the annual reports of the MWG cooperate, they always
heighten the 6 core values of each MWG employees that are: dedicated to customers, honesty,
integrity, responsibility, supportive and passion. The idea of putting customers as the first
core value has once again claimed BHX in particular is a trustworthy retailer.

o Disadvantages:

Aside from various that store channels of BHX has brought up, there are still some sort of
shortcomings of this channel that needs more attention from the retailer.

Even though the stores are in operation in holidays but in national holidays like Tet holiday,
the opening day isn’t unified with all BHX stores. For instant, some of the stores will remain
open until New Year’s Eve but most of them will be closed the previous day. This is hard for
customers to keep track on when will be the last day in operation to get ready for Tet.

Moreover, during special holiday time, it’s hard for customers to shop at BHX since the store
areas is small and the amount of customer during this occasional time is extremely high,
customers might suffer from unwanted things like pick-pocking, long waiting line, don’t get
enough attention and support from limited amount of employee, etc. Especially during this

22
pandemic, it would be harder to control if the amount of customer is too large with respect to
the capacity of the store.

b. Catalog channel of BHX

o General descriptions:

Among the 3 channels of BHX, this channel may be the least popular one among all. But
despite that, the advantages that it has brought up to retailers are unavoidable.

This channel is another non-store channel that communicate with customers through the
forms of catalog, usually catalogs are mailed or sent directly to houses. In Vietnam, catalogs
are an essential approaching method especially to retailers like supermarkets.

o The characteristics and the layout:

Unlike any other traditional catalog, we normally received from supermarkets, which is
displayed in the form of a book that consists of current promotion products, BHX catalogs are
wrapped up and condensed within just one paper. The paper displays enough information and
are different to each of BHX stores. Since the catalogs are not fixed, BHX catalogs of a
certain store will be sent to every citizen around that new opened store.

The layout of the catalogs will mainly focus on notify the customers that they have a big
promotion and only display limited information of around 2-5 products that are high
discounted. The time of the discount event and the address of the new store will be
outstanding displayed upfront. The promotions they recommend for customers are such a
bargain, which usually cheaper than that of the market.

The colors are catchy, the fonts are proper and the writing is clear. The amount of
information is enough to cause curiosity to the customers. In general, the layout is different
from any other catalogs we’ve seen.

23
The customer who usually easily approach the store using this catalog channel are people
who don’t usually interact or use the Internet or aren’t familiar with using digital devices,
which usually are old age people. Considering this channel as a physical notification, instead
a promote notification is sent through your phone, this physical notification is sent straight to
your house. This is a good way to approach another type of customers that BHX has thought
up.

Instead of costing too much on making catalogs looking like a book like any other retailers,
BHX use this channel more wisely with certain intention, in notify everyone around the new
opening store that they are having a discount event and encourage customers to go shop at
this store to actual receive more promotions that aren’t displayed in the catalog.

o Uniqueness to customers:

As I mentioned above, the type of customers that has the highest interest in this channel are
housewives, especially people who aren’t familiar to Internet or digital devices using. With
most busy people and housewives, being handed with the catalog, they will find it’s easier to
reach to it and read it. If they find the promotions of BHX recommend is attractive enough,
they will decide to go and shop at the store.

24
Thus, catalog channel helps customers acknowledge on current promotion events nearby by
just showing information on the paper, thus it is convenience and portable, can easily be seen
everywhere or any time.

o Benefits to retailers

First, with this channel, it isn't obliged or limited for any types of customers. since the
function of catalog channel acts as a physical notification as I mentioned above, this channel
is just another approach of BHX to another types of customers. the advantages of this channel
to retailers are:

Fully coverage on the residential nearby, especially the ones that aren't familiar with the
appearance of BHX stores yet, or even the ones that aren't familiar to Internet using.

Moreover, catalog also acts as a supplement factor that encourage customers go to the store
and shop. With people who find using the digital devices familiar, they will easily be
approached by the Internet channel. However not everyone uses the smart phones or laptops,
or not getting Internet connection in certain areas, catalog channels is an essential method
that retailers can exploit to stimulus this type of customer.

BHX’s catalog are printed on one page only, catalog is the cheapest method of advertising
among all of the channels. With the store, operation costs and costs paid for customers are
high, Internet channel costs of maintaining and operating is high while cost of catalog is the
cheapest offer that BHX could get.

By using catalog, BHX gets to control how large the area they want to promote their brands
to the residential. The spread of the catalogs will directly influence on certain area, BHX can
define the areas they want to stimulus the customers and then spread the catalogs to them.

o Disadvantages:

Despite how attractive this channel to customers, there are still some flaws that I noticed:

BHX catalog doesn’t show the contact information (mobile phones, customer services, email,
etc.) of BHX except for the website and the address of the store, which means the store
doesn’t take this channel as a way to attract buying by calling, but it recommends customers
go on the websites and go to the physical store to check out. Some customers might find this
useless since they don’t really use digital devices.

25
Limited information displayed, even more limited when considering BHX catalog which is
displayed in 1 page only. Thus, the flaws being made in the paper is harder to fix compared to
the internet, retailers may have to cancel and abolish all of the paper. And without carefully
processing the job, it would turn out to be a waste of resources, especially paper.

It took BHX longer time to spread the same amount of information compared to the internet.
Moreover, the amount of people who get the information is enough, but still smaller than that
of the internet channel, where people spread and communicate faster and broader.

The effectiveness of catalog channel is temporary since customers approach that and only
that promotion event only. BHX only sent the catalogs on new store opening events,
customers have the tendency to feeling they aren't getting enough information or notifications
on upcoming promotions.

c. Internet channel of BHX

o Channel descriptions:

Aside from the most important channel that brings to highest values to BHX revenue, internet
channel has become an essential channel as well, it is also be predicted to extremely grow in
the near future.

Theoretically speaking, Internet channels comprise different platforms such as emails,

websites, application, mobile websites, other digital platforms, advertisements, etc. Any
possible way that retailers can approach customers to sell the products or services they
provide over the internet is considered as an Internet channel.

Even though chances that retailers purchase food-related products are low, but the way BHX
exploit their Internet channel has made it possible for them to shop any products they want,
which is deeply analyzed later on.

BHX internet channel comprises the chain website and its application. In the next following
table, we’ll analyze the characteristics and various aspects of the two platforms to determine
the uniqueness benefits that BHX has contributed to its own internet channel.

Despite the small differences in the layout, both BHX website and its application share the
same factors such as the way it approaches customers, the product they provide as well as the
uniqueness they provide. In addition, websites are preferred for users who regularly shop
using the computer browser or mobile browser while applications are preferred for people
who use mobile devices constantly.
26
Types of BHX BHX website BHX application
internet ([Link]) (viewed through Android device)
channels
General Early 2016, while MWG has just put With the strong foundation of MWG
description [Link], an e-commerce site, into trial cooperate, BHX has soon officially
operation with the idea of shipping fresh developed their application, officially
products (fish, meat, vegetable, etc.) as well launched on February 2nd ,2017. Within
as other FMCGs to customers through its just 2 years into operation, the
websites. By the end of 2018, the cooperate application has been a milestone that
closed down the sites since they realized with marked a step of BHX into its second
the same operating function, it’s better to shopping method.
invest in the internet sites of BHX, which is
then on the stake of rising thanks to the right
model. By that time, the cooperate focused
more on BHX internet retailing activity, and
the website is step by step improved.

The layout - In order to have a better vision of the website, picture (1) expresses the websites of
BHX when surfing by the laptop or mobile device and picture (2) are the layout of
BHX application when running the app using mobile phone. Generally looking, the
websites layout is clearly, the banner of current online as well as offline discount
events are out-standing with high contrast colors from main color of the website.
Information are decorated in proper font and size that is attractive. The layout of the
app imitates to that of the website, which makes the structure of the website can be
tightened within a mobile screen size. By observing, the biggest difference between
them is the classification tool of the application is collapsed in order to display other
priority information, which might make it difficult for new user to find it.
- Moreover, acting as the most popular tool, displayed on the top of the page, the
search engine is displayed, it’s also the fastest way that customers can approach to
and find the products they need within a second.
- Pictures displayed are more attractive in mobile device screen, colors of pictures are
bright and clear, which makes it’s easier for customers to have conscious on what

27
 they’re getting.
- Locate engine serves and support the customers who want to find BHX stores that
are near them or more convenience for them to shop, as well as a place where
they’re getting discount information, career information, cooperate news, when will
the stores close on special holidays, etc.
The - The total amounts of SKUs are approximately 5000-7000, much larger than that of
characteristics BHX store channel. BHX displays and classify their products in different ways to
help customers find their goods easier by classify them by brands, by capacity, by
characteristics, by discounts, by quantity, etc. giving customers a lot of choices
compared to store channel.
- The brands that BHX supply are also larger than store channel. Taking milk
products as an example by observing picture (3), on the website/application, there
are Lothamilk, Australia’s Own, Inex, Puremilk, Vinamilk, Dutch Lady, TH True
Milk, Nipean River Dairy, Dalat Milk and Nuvita, which each brands of milk
comprises types of classifications such as the flavor, type of milk (fresh milk,
condensed milk, non-sugar milk, non-fat milk, etc.), the capacity (box of 12, carton
of 4, 180ml each box, 220ml each box, etc.). Looking back at store channel, due to
the limited space area to display and store, the products of each family of products
are limited displayed too. Thus, as once claimed, BHX priority in selling imported
goods at affluent areas rather than evenly distribute them at all of their stores. This is
why BHX takes internet as means to provide to their customers lots of products.
- One of the special and really makes BHX a “lovable” brand is the way they’re
trying to help their customers having the same shopping experience just as shopping
at their stores, products (especially dairy products like milk and butter) being
displayed on the website also show the expiry date of each products, can be
observed in Picture (3). This is important since they’re spending effort in making the
online shopping experience more comfortable.
- Aside from using the Internet as a tool to connect and encourage online purchases,
BHX takes the internet channel as a tool to promote their current program as well.
Currently, the chain just put their trial program into, where they sell a portion of
daily meal but it isn’t cooked or processed yet, to attract busy people, who want to
eat the fresh food instead of canned food or fast food in restaurants, but they don’t
really have time to go shopping for the material and preliminary process the raw
food like cleaning, cutting in smaller portions, etc. BHX has now present its trial

28
 products in this program, where the customers can buy the preliminary ready,
cleaned raw food that has also been put in smaller portions, then cook and season
the food how they want. However, these products only available at certain stores in
Binh Tan, Thu Duc and District 9, which makes the customers in the rest of other
districts hard to directly buy the products. However, BHX has used the Internet as a
tool to spread these products to customers within Ho Chi Minh city can have a
chance to experience these types of products by shipping it directly to the
customer’s address.
Uniqueness to - Display unlimited information such as promotion current events (discount products,
customers discounts on currently open stores), important information, etc. by showing banners
in the websites, pushing and attracting customers in buying more products, in the
fastest way.
- By committing, BHX Internet channel contributes to their customers the ease of
using, trustworthy, fast and convenience. By creating the website/application, BHX
has given customers to reach to the store wherever, whenever they want. Especially
during this pandemic situation, it would be challenges for certain people to go
outside shopping, Internet channel has been the solution for customers.
- The time spent to shop is extremely fast since customers can easily classify the
products within just a click. The effort spent during shopping through this channel
equals to zero since customers don’t have to go outside to the store.
- Shopping through BHX website/application is much easier since customers don’t
have to register an account to purchase. Thus, customers don’t have to remember
their ID and password whenever they want to shop online.
- Offers broader and deeper assortments, unlike the limited amount product provided
in store due to the store’s size, Internet is unlimited page where the stores can attract
customers having more alternatives in choosing what they want.
- Offers different payment methods such as pay directly in cash or pay by cards when
receiving the goods, prepaid by cards (visa, internet banking, Mastercard), prepaid
through electronic wallets (MoMo, ZaloPay). Customers get to choose to pay with
different methods however they want.
- Get the chance to pre-order the out-of-stock products or upcoming products,
especially fresh products like BHX 4K vegetables, getting to know the exact date
the vegetables will be harvested and available instore to order.
- Customers take the shot deciding on the time and date of package shipment, BHX

29
 offers to compensate 50.000 VND to a late shipment package.
- Being guaranteed with the return/repay policy of BHX if the products aren’t
qualified, expired products.
Benefits to - Gets the full control to the information they provide, easily change and update the
retailers information certain products.
- Getting to achieve customer shopping behaviors, knowing their shopping habits,
what types or brands of products are usually purchased. From that, exploit suitable
plan on provide similar products to attract as more as customers as possible.
- Faster ways to communicate with their customers, especially the younger type of
customers, notify them about the important information or upcoming discount
events.
- Lower costs since they don’t have to display all the products, staffs don’t really
seem necessary.
- By encouraging customers purchasing through internet channels, BHX can also
create a safer working environment for their employers also, limit social interaction
to both their employees and the customers while being able to maintain the chain
revenue. Thus, Internet channel will act as a potential replacement method in the
future if the pandemic gets worse.

30
Picture 10:

Picture 11: BHX application Picture 12: Milk products shown

on BHX websites /application

• Disadvantages

31
Even though we could not deny the benefits as well as the uniqueness that BHX internet
channels has contributed to the customers, but there are some weaknesses and shortcomings
that BHX hasn’t been able to improve and exploit thoroughly. As a regularly online
customers of BHX, I would define their disadvantages as following:

o Even though being in one of the biggest retailing chains in Vietnam, MWG hasn’t
created ways to control and collect their customers into one. Apparently, MWG
tended to launch the super apps by the end of 2019, where customers can reach
faster to information and multi-shopping current brands in MWG such as BHX,
TGDD as well as DMX. However, until now there’s no evolve information on this
super app.
o The website doesn’t make their customers register or sign up to purchase, hard to
determine whether they are trustworthy customers who really want to buy the
goods or whether purchasing for fun and then cancel the order. Moreover, by
making the customers signing up or registering for BHX account, it would be
easier for the chain to keep track on who are the potential customers and giving
them respectively promotions to enhance them keep shopping at the store. With
the “spoiled” customers, by signing up and giving in their information, the chain
can recognize their address in the system and refuse to purchase the following
time.
o There are a few parts in the application that when you click in it, it will eventually
lead to the BHX website, which is redundant and the application isn’t really
meaningful anymore. Moreover, the application doesn’t display any push-up
notifications, which is quite hard for the customers to keep track on the current
promotions. In general, the application of BHX hasn’t been paying enough
attention, the evidence is according to customers’ evaluations, the features in
BHX are quite simple and isn’t attractive enough. The chain should pay more
attention to this aspect of the application.
o More importantly, the application and the website doesn’t have advanced tools
such as when purchasing a certain product, there will be a part where they
recommend the products that are usually be bought with the current purchasing
products. Or the tool that track whether we can buy that product at store or not. I
believe that these are essential tools that can boost the amounts of total products
that customers purchase in one time.

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 3. The importance of multichannel retailing to BHX:
• By implementing more channels to the business, BHX can gain more types of
customers. Moreover, the implementation of various types of channels will also
increase the customer satisfaction as well as loyalty. This is an essential thing in
order to define itself a competitive advantage compared to other retailers.
• Moreover, by implementing more types of channel there will be a way for BHX to
overcome the limitations of current channels. For instant, taking store channel, the
assortment and the total amount of SKUs is limited due to the store’ area is also
limited. By implementing Internet channel into their system, BHX has been
successfully decreased the limitations, by giving customers unlimited amounts of
products, with various options that customers can consider purchasing.
• Thus, by using the Internet channel, BHX can have a way to analyze deeper on the
shopping behavior of customers. Defining which types of products/brands
customers usually purchase, or even the supplement products they purchased with
the main product. By identifying, BHX can have database on the types of products
that certain customers normally purchase at BHX store, so they can develop a
strategy in the future.
• As gaining insights information of customers, retailers like BHX could create for
themselves the unique competitive factors that can’t be easily copied by other
retailers.

V. MERCHANDISE MIX
Bach Hoa Xanh is rich in diverse items such as: beverages, beer, soft drinks, powdered milk,
fresh milk, cooking spices, ready-to-eat foods, canned foods, confectionery, snack, shampoo,
conditioner, shower gel, washing powder, liquid detergent, and conditioner. All of those can
satisfy daily demand of a normal people.

For Bach Hoa Xanh to get customers from the traditional market, this is a huge number of
customers, Bach Hoa Xanh has promoted the selection of fast-moving consumer products
with clear origin certification and selected good products in the typical local shelves to meet
the needs of customers.

• To have a good profit, Bach Hoa Xanh will get products from the manufacturer,
not through any channel.

33
 • With green vegetables, instead of selling ready-to-sell bags, stores let customers
buy in arbitrary quantities.
• Marine fish will be imported directly from the waters, not through Binh Dien
market as the current chains.
• As for fruits, the company will not go through import companies but import from
growing areas.

As a result, the product price will be cheaper and more competitive than any other system.
Fresh meat, raw fish is an outstanding strength compared to competitors in the same industry
today. And is the sum of the advantages of traditional markets and supermarkets, is new and
different from other mini supermarkets.

Currently there is any information related to whether BHX will establish their own private
brand or not. In our point of view, it is no need to have a private brand for this type of
business strategy, this could be a slow explosive bomb for this chain of stores, if a store's
product were found to be of poor quality, in the current 4.0 era, it could be a media bomb that
pulled down its brand. Bach Hoa Xanh does not need large scale, just enough to sell products
to serve the essential needs of the people. This saves costs, quickly expands the chain of
stores, and increases capital flexibility. However, it is also potentially risky, as the small shop
leading to the store's development base is also limited. If the demand of the people increases,
the small-scale shop cannot expand to sell other goods to serve as customer demand.

Merchandise in Bach Hoa Xanh in general is not much different compare to its
competitors: Co. op Food, Satra Food, Vinmart… but with the advantages tin economic
potential and store area utilization (which enhance the depth in assortment), they can
gradually lured customer to their side.

VI. PRICING:
What’s retail pricing? The price at which the product is sold to the end customer is called the
retail price of the product. Retail price is the summation of the manufacturing cost and all the
costs that retailers incur at the time of charging the customer. Retail pricing is a core aspect of
any business that sells products to customers. After all, consumers may care about a number
of factors when making purchasing decisions, but the price they will pay for an item is almost
always among their top concerns.

Retail prices are affected by internal and external factors:

34
 • Internal factors that influence retail prices include: Manufacturing Cost
(fixed and variable costs), The Predetermined Objectives (varies with time and
market situations), Image of the Firm (company’s image in the market), Product
Status (eg: the introducing stage, the product may charge lower price),
Promotional Activity (advertising and sales promotion may increase the product’s
price).
• External Factors include: Competition (high competition low price), Buying
Power of Consumers (sensitivity of the customer towards price variation),
Government Policies (Government rules and regulation), Market Conditions
(market reccession/burst), Levels of Channels Involved (the deeper the level of
channels, the higher would be the product prices).

1. BHX’s pricing policy: Everyday Low-pricing (EDLP)

Everyday low price (EDLP) is a pricing strategy promising consumer a low price without the
need to wait for sale price events or comparison shopping. EDLP saves retail stores the effort
and expense needed to mark down prices in the store during sale events, as well as to market
these events.

In order for BHX to get customers from the traditional market, this is a huge number of
customers, BHX has promoted the selection of fast-moving consumer products with clear
origin certification and selected good products in the Typical local shelves to meet the needs
of customers. To have a good profit, BHX will get products from the manufacturer, not
through any channel. With green vegetables, instead of selling ready-to-sell bags, stores let
customers buy in arbitrary quantities. Marine fish will be imported directly from the waters,
not through Binh Dien market as the current chains. As for fruits, the company will not go
through import companies but import from growing areas. As a result, the product price will
be cheaper and more competitive than any other system. Fresh meat, raw fish is an
outstanding strength compared to competitors in the same industry today. And is the sum of
the advantages of traditional markets and supermarkets, is new and different from other mini
supermarkets. Thanks to this model, each department store serves an average of 500
successful daily transactions. In addition to diversifying food sources, this unit also runs a
series of strong discounts every week, applying more than 200 fresh and consumer goods of
all kinds. For example, buying sea fish from the port has helped shorten the fish's travel time
to the supermarket to less than 2 days, instead of taking 4-5 days as usual. Thanks to the
original purchase, in April, the Fish sector was profitable for the first time, contributing to the

35
overall growth of the Meat-Fish group of BHX. (according to the Vietnamnet online
newspaper, 2019) [1]

2. Other practices to compete with price

Bundle pricing:
“The whole point of the bundles becoming more attractive when an option of
individual purchase is available makes sense. We as consumers always compare before
deciding and thus, we love choices, it makes us feel in control. Thus, the ability to chose
adds to the value of the product as a whole. Also, then it works for a larger variety of
customers- those who find value in the bundle or those who prefer a few items alone.”[2]
With the multiple pricing strategy, retailers sell more than one product for a single price,
a tactic alternatively known as product bundle pricing.
BHX applies bundle pricing for FMCG products such as noodles, milk, etc.
“Friesland Campina officially becomes a strategic partner of BHX. Friesland Campina
Milk Company will spend many special promotions and discounts for Green Department
Store, promising to bring many benefits to customers.”[3] is a proof for the effort of BHX
to attempt for the benefit of customers.
Combination of Penetration pricing and Loss-leading pricing:
Penetration pricing often preferred by newer brands who are set to enter the
market, penetration pricing is the practice of initially keeping product prices low so as to
introduce the brand and its products to as many people as possible.
By using the loss-leading pricing, retailers hope to offset their profit loss on the
discounted item by selling additional products the consumer hadn’t initially thought of
buying. With this strategy, retailers attract customers with a desirable discounted product
and then encourage them to buy additional items. A prime example of this strategy is that
BHX give discounts the price of peanut butter and promotes complementary products,
like loaves of bread, jelly and jam, or honey. BHX might offer a special bundle price to
encourage customers to buy these complementary products together rather than simply
selling a single jar of peanut butter.
The tradeoff of additional profit for customer awareness is one many new brands
are willing to make in order to get their foot in the door. BHX usually arrange the new
brands or new products near the checkout intentionally with offerings from staffs for
practical purpose that is saving on advertising and customer acquisition costs.
Psychological pricing (Odd Even Pricing):

36
 Studies have shown that when merchants spend money, they're experiencing pain
or loss. So, it’s up to retailers to help minimize this pain, which can increase the
likelihood that customers will make a purchase. Traditionally, merchants have
accomplished this with prices ending in an odd number, like 5, 7, or 9. For example, a
retailer would price a product at 199,000 VND instead of 200,000 VND. From a
customers’ perspective, it looks the retailer has slashed every cent possible off the price.
Their brain reads 199,000 VND and sees 199, not 200, and makes the item seem like a
better price.

a. Anchor pricing:
Anchor pricing is the approach of placing both the discounted and the original
prices of an item side-by-side to give the customer an idea of how much they’re saving.
This method creates what’s known as an anchoring cognitive bias, where the customer
considers the listed original price as the reference point in evaluating whether to buy the
discounted item.

37
 Picture 14:

3. Demand-Oriented Pricing Strategy

The price charged is high if there is high demand for the product and low if the
demand is low. The methods employed while pricing the product on the basis of demand
are:
• Price Skimming − Initially the product is charged at a high price that the
customer is willing to pay and then it decreases gradually with time.
• Odd Even Pricing − The customers perceive prices like 99.99, 11.49 to be
cheaper than 100.
• Penetration Pricing − Price is reduced to compete with other similar products to
allow more customer penetration.
• Prestige Pricing − Pricing is done to convey quality of the product.
• Price Bundling − The offer of additional product or service is combined with the
main product, together with special price.

4. Assessment of business activities of BHX

Regarding the BHX chain, with 725 stores as of August 31, 2019 and achieved a
total revenue of 266 million USD in the first 8 months, up 158% over the same period last
year. The average revenue per store is approximately 65 thousand USD / month (for
stores opened before August 1, 2019). In this August, BHX has moved to the South-
Central region with the first store in Binh Thuan. The chain has 322 stores in 15
provinces in the Southern region outside Ho Chi Minh City (accounting for 44% of the

38
total number of stores). By type of store, BHX has 125 large stores of 300m2, accounting
for about 17% of the whole chain stores. After a period of testing new solutions to
effectively control the loss - cancellation ratio, BHX has recorded quite positive results
when reducing this rate from 3% (average 7 first month of 2019) to 2.5% (August 2019).
The chain has served nearly 11.5 million customers and sold nearly 11,000 tons of fresh
produce in August 2019. Fresh, cool and frozen goods are accounting for about 50% of
BHX's revenue. BHX maintains a rapid expansion progress with 87 sites signed in
August, including new sites in Ninh Thuan, Khanh Hoa, Bac Lieu, Soc Trang and Kien
Giang provinces.[4]

5. Proposed business solutions for BHX

Business solutions for Bách Hóa Xanh
• Product:
- Diversification of products: Increasing human demand, although Bach Hoa Xanh
has many advantages in 2019, the products of Bach Hoa Xanh have not diversified
and have not met the needs of customers.
- Product quality: Currently, the products of Bach Hoa Xanh have clear origin. So
need to maintain the quality of products and add some items to meet customer
tastes.
- Product display: Show some Bach Hoa Xanh stores displaying still messy
products that make customers uncomfortable and take a long time to search for
products. So, Bach Hoa Xanh should have a list of common products such as
milk, spice items, personal belongings so that customers can find and have more
time to choose products.
• Collecting customer information: it will help businesses understand the needs and
interests of customers depending on the region. Since then perfecting the product
better and better, creating trust of customers.

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 VII. MARKETING COMMUNICATION MIX OF BACH HOA XANH (BHX)

1. Retailing in Vietnam:
According to Deloitte Vietnam, among such various forms of retailers such as convenience
stores, supercenters, grocery stores, supermarkets, etc. to new forms such as digital platforms,
e-commerce sites, etc. there has been a significant and rapid retail growth, especially
considering its revenue and growth rate.

Retail revenue and growth rate in

Vietnam during 2013-2020
200 30%
180 27%
25%
160
140
20%
120
100 15%
13% 13%
80
11% 11%
10% 10% 10%
60
40
5%
20
85 94 103 115 126 142 180
0 0%
2013 2014 2015 2016 2017 2018 2020

Revenue (USD billion) Growth rate

The rate is rapid increasing throughout the years, within just 7 years, the revenue achieved
has dramatical increased from 85 billion USD to 180 billion USD. The growth rate had also
gone through some ups and downs from stages 2013-2018 when it was around 10%-13%. By
this year, it has increased 14% into 27%, which is larger than ever to be considered. This
means that retailing has become an important and essential factor within Vietnam market.

Within the year 2019, according to data collected by the General Statistics Office, retailing
industry in Vietnam had revenue of 3,751.3 trillion VND, accounting for 75.9% overall
values. In which, the commodity of cultural and educational products increased by 14.4%,
food and food-related products increased by 13.2%. Household appliances, tools and
equipment increased by 11.3%. The amounts of products purchased have been monotonously
increased by years. Retailers have also been trying to approach customers through different
types of retailing channels such as: physical stores, catalogs, email, mobile websites, mobile
applications, etc.

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One of the information that worth noticed is that even though platforms like convenience
stores (Mini stop, circle K, Family Mart, GS 25, 7-eleven, etc.) and grocery stores (Bach Hoa
Xanh, Vinmart+, Coop Extra, Satrafoods, etc.) approach Vietnam retailing market is young
and new, their growth has been surprisingly increased and still on the rise of growing, clearly
expressed through the revenue of each brands.

The idea of this part is to express that retailing has become an important factor that has
mainly contribute to Vietnam market and will soon be the most essential one. In order to
regularly maintaining the position of their reputation, it is important that retailers satisfy and
attract as many customers as possible. There are a lot of answers to solve this question, since
the growth and the success of retailers aren’t determined by only one factor but it is the
process of creating and innovating through time to adapt to the customers requirement in
times.

To clarify, marketing communication mix is one of the important factors that contribute to
various way retailers can approach different types of customers, which also acts as a catalyst
that effect and impulse on the development of brand images and building customer loyalty.

2. Methods of communicating with customers:

a. Definitions of marketing:

In general, all methods of communicating with customers can be easily explained as a way to
deliver the message from the retailers. The information delivered must be right, the audience
who received the message must be correctly identified, the method used to deliver must be
the suitable one.

According to The Chartered Institute of Marketing (2009), the process that is responsible for
identifying, anticipating, and satisfying customer requirements profitably is defined as
“Marketing”. Lately, marketing has become a process that is essential after defining the
customer needs. In other words, marketing is the way retailers communicate to their
customers.

b. Marketing communication mix:

The largest goal that retailers expect to achieve, not considering the importance of the process
of selling merchandise as well as the services they provide, is how to increase the customers’
awareness of the products, which leads to the sales increase, eventually create brand loyalty.

41
We can simply define marketing communication is comprised of various certain marketing
tools that will be applied on the business strategy, with the final purpose is to build the new
customer relationships, as well as maintain and enhance on current ones.

There are various methods that retailers can use to communicate with customers that are:
direct marketing, sales promotions, personal selling, advertising and public relations. In
reality, obviously the appliance of marketing communication mix tools is depended on
different factors such as the target customers of the chain, the market conditions as well as
the company conditions, etc.

• Direct marketing:

This method mostly focuses on the process of directly interaction to the targeted customers
with final aim is to receive responds or conduct a transaction. Direct marketing comprises
methods of interaction through mail, mobile marketing, web sites, blogs and social medias.

• Sales promotions:

Usually happen in short-term, the purpose is to encourage, stimulus the customers by creating
programs, contests, premiums, giving coupons, displaying Point-of-purchase in stores, etc.

• Personal selling

This method describes a directly face-to-face process in order to gain information from
customers, the sales assistant will directly support the customer during the shopping, this
might help customer save time and effort, which will quickly satisfy the customer.

• Advertising:

This widely use form of marketing communication can be seen/heard everywhere. Regularly,
the retailers will deliver short, attractive and influenced information to audiences to
encourage, persuade the customers to have clearer look on the products/services that retailers
provide.

• Public relations:

We simply understand this as a method that is typically done in order to gain more reputation
of the brand, by building up a good picture, and dealing with rumors, stories, and events.
Similar to promoting, open connection can be happened through daily papers, conversation

42
shows, or social arrange, etc. however, depending on the circumstances, the charge for open
relation may or may not be paid.

3. BHX marketing communication mix:

• Process of determining the effective marketing communications for BHX:

As mentioned above, all business finds themselves adaptive and fast growing with different
types of marketing communication mix method. Thus, it seems impossible and costly to force
the business to available with all of communication methods, that is why it is essential to
determine the suitable and effective types of marketing communications,

According to Kotler (2000), there are 8 steps that we need to consider and conduct in order to
define the effective marketing communications, which will be analyzed in the BHX case:

1. Identifying the target audience

At this stage, it is the ultimate mission to determine our targeted customers, in order to have
clearer look on how and what tools of communication retailers be using to effectively interact
with them. We note that the audience in our case could be the potential customers of a certain
types of products we provide, it could also be a certain group of customers that we’re aiming
to interact.

In our case, in order to have better understanding on the nature thinking of the customers, as
well as their needs, or what are factors that push them on purchasing the goods, we determine
different types of audiences respectively with different marketing communication methods.

Due to the structure as well as the nature that BHX has brought into operations, it convinces
and attracts the customers thanks to the convenience: the stores are exploited the ground
floors only in order to minimize the total travel time of customers. Thus, stores are displayed
in Grid layout, where the products are well displayed and customers can easily reach, find the
products they want. Customers who are primarily interested in this type of stores layout is the
utilitarian ones, they are the type of customers who wants to buy and purchase the products as
soon as possible, which always comprise of busy types of customers. By the nature that
leaderships had created and implemented in the BHX nature, we define the largest type of
customer that regularly shop at BHX stores are housewives, especially busy people.

2. Determining the communication objectives

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After determining the target audience, at this step we observe how the audience will react to
the products or services we provide. This stage is important to the retailers since it is a long-
term strategy that affect to the brand image.

It is essential that retailers receptive to the process that customers have gone through before
purchasing. There are 2 cases we’re assuming here. First case, the customers have no
awareness or acknowledgement of the existence of our business nor the products/services we
provide, then we need to find the suitable type of marketing communication methods to build
the recognition in terms of the products or services retailers provide, this stage we define it as
the cognitive phase, or the awareness increasing stage. Another case we’re considering that
customers have known about the products/services, then it is essential that we create and
form the good feelings of customers about that product, which will be called as affective
stage, where we try to make the products/services as a favorable one. Finally, at this
purchasing influencing stage, with the support of suitable marketing communication, then
there will be a motivation that pushing the customers on purchasing. We notice that there
shouldn’t be a proper order that force retailers to follow, retailers should just observe and
determine the suitable for each case we’re analyzing.

Increasing the awareness stage: Generally speaking, BHX is still a new type of “domestic
retailing player” since it was developed by the end of 2015, compared to the deep penetration
of other players such as Vinmart, Coop-food, Satrafood, etc. or even its biggest competitors –
the traditional markets, the development of BHX is still new to the market. However, being
one of the members of the MWG cooperate, BHX has got itself a strong standing base since
the successfully growth of its family brands: The Gioi Di Dong (TGDD) and Dien May Xanh
(DMX), until now, the growth of BHX has been an admirable and worth taking. The
reputation of BHX now is large, however, in order to broaden their reputation into new
regions, BHX uses print ads, which are the catalogs to introduce their existence into the
region, increasing the awareness of the citizen nearby. By doing this, retailers can build and
enhance their brand images, through time, this will be an essential factor that can maintain
the customers’ loyalty.

Affection stage: the unwanted situations may happen sometimes, the way that retailers deal
and solve it is also important. Word-of-mouth acts like a double-edged sword, the way BHX
controls the information is extremely necessary. Advertising is an essential communication
tool that can directly address, effect the emotions of customers about us.

44
Influent the purchases: finally, BHX influences, motivates and persuades customers in
making purchasing since eventually this is the goal of this stage. Normally, this stage is
conducted by introducing the attractive promotions that customers could get, relatively to the
competitor of BHX. Specifically, the group of fresh products of BHX accounts to 67%
amounts of products in daily customers’ cart, also this type of products is what makes BHX
special. Comparing to the wet market, BHX provides the exact type of fresh products (meat,
fish, vegetable, etc.), the prices of the products are cheaper than that of the wet markets. Thus,
the fresh products of BHX has been ensured that they are qualified with VietGap and
GlobalGap certification. These factors and the fact that BHX has spread their information of
how qualified their products has been a visible motivation to the customers.

3. Designing the message:

This is the step where we require an attractive theme, message, method that can gain
attention, create the interests and stimulate the customers in order to achieve the response
from the customers. There are 4 aspects of a message that we need to analyze that are: the
content, the structure, the format and the source of the message.

Taking the promotion and discounts of the new BHX store to analyze, the information or
the message that BHX wants customers to pay attention on is the discount of all the
products in the new opening nearby store. The biggest line that immediately attract the
customers are the line that introducing the new existence of the store, and the line
introducing their current discount events, numbers are outstanding displayed too, the
percentage of discount is located at the easiest spot that draw the customers attention.
Moreover, the content should be condensed and shortened into short and has strong effect
words, depending on the methods BHX use to interact to their customers.

If they consider delivering their messages to different types of customers, then the
structure of the thing that contains the message should be flexible, easy to spread, or
compatible with most of the targeted audiences. In this case, the ads should be expressed
in the paper or the catalog form since it is suitable for every objects.

The format of the ads must be clearly displayed, the colors should be attractive and highly
contrasting in order to cause the attention on certain information that retailers want to
express. Through such factors, customers will feel more enthusiastic, attracted to the
information that retailers are trying send.

45
 4. Selecting the communication channels:

After determining the message that retailers want to share and communicate with the
customers, it is essential at this step to determine the form of communication to contain it.

There are two types of channels interaction where BHX should consider that are the personal
channels, which mainly involve two or more persons directly communicate with each other
such as: face to face interaction, person to audience interaction, interaction through the phone
or email.

The second type of interaction is called non-personal channels, which consists of a certain
type of media that carry message that does not respond with personal contact or feedback.
This channel includes major media, atmospheres or events. Mass media in this type of
interaction includes print media (newspapers, magazines and direct mail), or the broadcast
media (radio, television), the electronic media (audio tape and videotape) and finally the
displaying type of media (billboards, signs and posters). Moreover, most of non-personal
interaction come through paid media.

5. Establishing the total communications budget:

After determining the suitable communication channels that is suitable to deliver the desired
messages, it is important to determine the affordable types by clearly set out the total budget
retailer spends for communication.

Common method that is widely used is the objective-and-task method. By using this type,
BHX could easily identify the promotion budget by defining objectives of each specific
promotion, how the tasks needed to be done in order to achieve these objectives, estimate the
costs of conducting these tasks. As a matter of fact, the sum of these costs is the proposed
promotion budget. This method allows retailer like BHX analyze deeper on the current
budget. However, it would save more money if we carefully define the objectives of the tasks
and which tasks are essential and need to be done.

6. Deciding on the communications mix

After successfully define on the budget, it’s time to define what type of communication mix
that retailers will invest on, as mentioned above, there are 5 types that retailers could consider
that are: direct marketing, sales promotions, personal selling, advertising and public relations.
Each of the communication mix will be analyzed later on.

46
 7. Measuring the communications’ results:

In order to evaluate and find out whether the current communication method is effective or
not, retailers should put themselves as their customers. For instant, how the customers may
feel when they are receiving the messages, how often they receive the messages, the way they
respond to the messages’ influences in particular the products and the brand of retailers. By
keeping track on the results of the communication methods, retailers could easily identify the
behavior of the customers toward the products as well as the services that the retailer has
brought up. Thus, this is an important way to enhance and constantly improve the brand
images.

8. Managing the integrated marketing communication process:

Effective communication is important to promote retailers’ brand images. It is essential that

retailers communicate and deliver messages to their potential customers, but they have to
maintain and pay attention on their current customers as well. By applying this, BHX won’t
just strengthen the relationships towards their customers but they will also create an
advantage benefit compared to their competitors. Since BHX had determined the market
segment are 80% from the total customers that are currently shopping at the traditional
market, it is essential that managing their final integrated marketing communication will
contribute to the process of improving and broaden their brand images.

a. Analyzing current marketing communications of BHX:

In order to have a deeper look on the marketing communications methods of BHX, we

analyze the 5 big methods that are direct marketing, sales promotions, personal selling,
advertising and public relations. With each type, we determine the 4 aspects that are the
potential of the current communication method, the credibility, the cost as well as the retailer
control. With the four aspects that we’re about to analyze, we define them as following:

Communication potential: with this aspect, we focus on the ability of the

communication tool to deliver a personal message, whether it is well spread or
ineffective, its audience reachs and the level of interaction offered.
Credibility: this aspect refers to the way how the targeted audiences perceive the
communication tool.
Cost: the aspect that includes deep considerations about how much of the budget
is needed for a specific tool, the investment required to use that communication
tool.

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 Control: describes the ability to reach specific target audiences and how flexible
the tool is to adapt to changes.

Currently, after analyzing and taking reference, as well as reminiscing on personal experience,
the groups of marketing communication mix methods that BHX is currently using: direct
marketing, sales promotions and advertising.

• Direct marketing:

This is one of the marketing communication method that comprises of 2 main

types of marketing that are the traditional direct marketing (tele-sales, catalogs sent
through mail, postcards, etc.) and the modern direct marketing (social medias, other
internet communication methods, etc.)

I recognize BHX does actually use this type of marketing communication. BHX doesn’t
really in favor of tools such as mail or catalogs sent through email. In particularly, the retailer
actually enhances and radically utilized the online marketing communication such as
websites, blogs and social medias.

BHX website and application:

BHX website ([Link]) and its application is probably the most popular channel as
well as the most widely use of communication tool. According to SimilarWeb statistical data,
in the first quarter of 2020, BHX has gained more than 8 million access times from the
customers, which is much larger than that of other popular retailers like BigC, Vinmart,
Coopmart and SpeedL. With such peak growth amount of website access, BHX has proved
itself as the top-of-mind selection of a lot of customers. In general, the potential of this
communication method is high, customers regularly use the internet and BHX application
will find this communication type familiar. Thus, due to the pandemic situation, the need of
online shopping has been essential than ever, leading to the widely interaction through this
method. This type of communication has the fastest speed where customers can receive the
messages sent by BHX within a few clicks.

The credibility of this type of communication is mostly found comfortable and easy usage by
the customers. However, most of them react on the simple display and the format isn’t
attractive enough, the application and website of BHX hasn’t been applied with advanced
tools such as price comparison among the same type of product but provided by different
brands in order to support customers during online shopping experience.

48
This is one of the paid methods that costs relatively high fee. Since BHX has to constantly
maintenance on their website as well as their application, thus the fee that design the layout,
format of the web, other costs that ensuring the website is safe, confidentially to customers’
private information. The cost that spent in this method is high, but the results in gaining is
high. This communication method acts like a second face, an indirect face that customers can
approach to the retailers’ message anytime. And if the sites became untrustworthy or doesn’t
seem to bring the basic needs of the customers, eventually it will lose the credibility of
customers.

BHX gets to highly control the messages it sends to the targeted audiences. As a matter of
fact, they get to interact to their customers and send the message in the fastest way through
this method. Moreover, the changes made through this method isn’t costly and cause much
trouble. BHX can analyze the target who mostly interact through this method, as well as the
actual amount of access to their website/application. More importantly, BHX can gain the
information that what are the type of products that a certain group of customers regularly
purchase, this is an essential and unique information that determine important factors of
retailers such as type and brand of products that are widely bought, so BHX could consolidate
and update, implement the suitable future strategies, etc.

BHX blogs:

Taking advantages of their available websites, BHX constantly update useful information in
their websites, the stories and information are displayed and formulated similarly to the blog.
The contents are mostly cooking tutorial, by the end of each cooking lessons, they add the
information of material they used during the cooking process, which are also the types of
products that BHX provides. Aside from cooking tutorials, BHX communicates to their
customers through blogs by providing useful daily tips, mom and child useful information,
health-beauty tips and occasional information. I identify this type of marketing
communication is quite dependent on the main BHX website operation. Considering the total
amount of audience experience BHX blogs is quite low. The average view of the post is
approximately 1000. The messages BHX send through this communication aren’t clearly
displayed and attractive enough for customers to approach.

Most of the customers will find this type of communication boring and unattractive to
approach. Thus, the fact that people use online communication methods mostly due to the
convenience and the speed of this method, they don’t really want to spend too much time to

49
read and process retailers’ message. Aside from this, I think customers who have the
tendency to actual enjoy reading and surfing the internet will find this fascinating, where they
can both read something useful and be introduced with products with attractive price that they
can immediately purchase.

I think the cost of BHX blog is similar to that of the websites, since it is developed directly on
the base of the BHX website.

As the amounts of customers that approach to this communication isn’t significantly high, the
effectiveness that BHX achieves through this method isn’t clearly shown. However, the speed
of transporting the messages to the customers process is fast, since it is also internet-based. It
also gets easier for BHX to control the messages through this method.

BHX social medias:

([Link]

BHX uses only 1 type of social media, mainly communicate with their customers through
Facebook. The main function that the Facebook page of BHX does is to partially advertise
BHX website. The page constantly shares the link of the new posts from BHX websites to get
more interaction from BHX Facebook page’s followers, some other posts are formulated in
the picture form that display the current discount products. The total followers on BHX
Facebook page are 382.464, however the interaction through this media isn’t high at all. The
average likes that a post on BHX Facebook can get is approximately 40. Moreover, the
average amounts of comments or shares are zero. In general, the information and the
messages sent by BHX through their social media is clear and regularly updated.

Customers who were approached by BHX aren’t actually that much, considering by the
following amount on the sites. Thus, customers wouldn’t get so excited being approached
here since it mainly updates the information that can be seen through their main website.

Despite the limitations that BHX is still suffering from this method, the cost being spent in
this method is zero, social medias are a totally free tool to interact with people. Unless users
want to use advanced tool such as advertising their social media page to broaden their brand
to many more users.

50
Common types of communication methods that belong to the online direct marketing
normally share the same type of controlling characteristics. This enable BHX chances to
totally take control the information and messages they want to spread.

• Sales promotions:

This type of marketing communication is normally be seen in a form as an event, a coupon or

voucher, samples that retailers provide to stimulus and attract customers’ attention on their
brand or being used to enhance relationships with current customers.

Currently, I have observed BHX using this method by giving coupons, send out rebates and
creating special events.

BHX coupons:

This method has higher chances of communicate and deliver the messages that BHX wants to
send to its customers. When sending out a certain promotion, retailers have first successfully
draw customers’ attention, everyone finds it hard to turn down a promotion, especially when
receiving a physical coupon, people will spend certain amount of time to read the general
content that is displayed in the coupon, it is essential retailers making the information short,
condensed as well as easy to understand. BHX don’t usually directly send out their coupons,
they give out their coupons as a gift vouchers to customers who shop at their family brands
such as DMX or TGDD. Thus, the vouchers were sent out by BHX are usually sent in the
form as physical coupons that were directly given when purchasing successfully at TGDD or
DMX. Or as in the form of e-voucher, which is also sent through customer personal
information when they had successfully purchased through websites of TGDD or DMX. This
is an interesting strategy of BHX that is worth learning, the fact that they send out their
coupons to their potential customers who shop at their brands is a special way that also has
higher probability that the certain type of customers will go shopping at BHX.

Customers might think of this interacting method is attractive and worth trying, despite the
limited quantities of coupons BHX had sent out, each coupon has recommended really high
discount.

However, the cost spent in this method is actually high, since the costs BHX spends for value
of the discount as well as the cost of printing, spreading these coupons are high.

51
This type of promotion communication has higher chances to stimulate the targeted audiences.
As a matter of fact, the way BHX spread these coupons to shoppers who purchased at their
family brands has defined the type of customers they target on, this is normally the type who
are brand loyalty, indicating the type of customers that have the tendency shopping at a
certain brand. However, coupons aren’t so flexible and more complicated to compensate to
what retailers have spent for.

BHX rebates:

This type of marketing communicate normally indicates the promotions on certain products
that retailers regularly use as incentives factor and supplement on product sales. This method
is special due to how it stimulates the needs of customers.

BHX uses this method and delivers the rebates through mostly main website and social media
since it is the fastest as well as the cheapest way to spread the rebates.

Customers will find this fascinating and attractive to find out more of the rebates. Thus, this
is a way to enhance current customers’ relationship as well as broaden new ones.

BHX does actually have higher chances focusing on the targeted audiences and successfully
deliver the message to them as well as enhance their brand images.

BHX special events:

BHX usually takes advantages on special events as an effective way to enhance their
customer loyalty, but mostly on creating new relationships with new customers. Especially
mentioning the new-opening store events, BHX combines the promotion and the use of print
ads to introduce themselves when entering into new areas, as a way to introduce themselves
to surrounding citizens.

The areas and the amount of people interacted through this is quite large. BHX ensures
interacting to as many customers surrounding the new store’s area as possible since it will
cause customers’ curiosity wanting to know who is the new retailer that has just entered the
area, how the promotion attracts many customers. Moreover, this type of marketing
communication can lead to a possible word-of-mouth communication, since the coverage of
the store in a certain area is quite large. Retailers can totally reach to their targeted audiences
by fully spread their brand in a certain area with a certain method.

• Advertising:

52
BHX uses co-op programs as the main tool in the advertising. As a matter of fact, BHX
combines with its family brands that are DMX and TGDD applying this type of advertising.
The advertising is usually in the form of short videos with appealing information and
entertain audiences with catchy music and funny visual contents. By the year 2017 and 2018,
when MWG corporate spends money and strongly invest on DMX, the brand that provides
electronic devices, the results turned out to be surprisingly successful, internet users,
especially Facebook users, the amount of interaction through a short video that contains
funny content of DMX has soon become a trend during that time. Taking advantages of
growth in reputation of DMX, MWG has created more videos but contains the other brands
that are BHX and TGDD as well.

The amount of people who interacted through this advertisement is surprisingly high, which
is considered as a way to introduce the brand and approach to new customers.

Moreover, BHX could control the content as well as the way to deliver these advertisements.
It’s also a chance for the brand to create new and unique things that appeals the customers’
attention.

b. Recommendations:

After analyzing current marketing communication methods, we can define that most of the
tools BHX has been using are online or modern related methods. Despite each types of
marketing communication method brings certain benefits, there are still some limitations and
factors that BHX hasn’t been able to fully exploit.

• There has absolutely no interaction through email. Even though email and phone
number are one of the most basic contact that retailer could interact with their
customers. BHX could use email to send private discount, upcoming promotion
events for each customer to increase the special feeling of customers. Thus, I think
it is essential that retailers spend effort to communicate with their customers in
any forms they could.
• BHX must spend more money investing their brand image on the social medias
especially Facebook. Facebook has clearly become the most widely-use media by
all people around the world, it is essential that BHX should have certain and
strong standing base in this media. Thus, strong social media makes the customers
feel more confident on the purchases they make at the stores. The fact that people
spread the information through the Internet especially social medias is quite fast.

53
 BHX should take advantages of this factor and invest, broaden their brands in
Facebook.
• Thus, BHX should enhance and invest more on current growing method that
receives most customers’ responses, which are the out-of-home advertisements,
the print ads, etc. As a matter of fact, even though BHX doesn’t spend too much
money on advertising, they have been using the out-of-home advertisements
extremely effective. Normally, they display the mic outside of the store with high
volume of noise that easily attract customers’ right away. They usually combine
this during their discount events or special events. BHX staffs will read the list of
discount products and its price. This draws customers attention the moment they
hear the notices. This is one of the methods that BHX should keep on enhancing
and improving.

VIII. CUSTOMER SERVICE

[Link]
Customer service is the set of activities and programs undertaken by retailers to make the
shopping experience more rewarding for their customers. These activities increase the value
customers receive from the merchandise and service they purchase.

[Link] Importance Of Customer Service

• Great customer service can add value to product and service: Customer will
happily pay more for the same product or service, if BHX can provide good
customer service.
• BHX can increase customer retention and recurring revenue: If BHX can
perform customer service consistently, BHX can generates a positive word-of-
mouth which will support to keep customer returning to BHX. Furthermore, it
is also cheaper and more effective then marketing and advertising.
• Positive reviews and brand image: Nowadays, customer usually post review
on social media which has 2 sides-effect on the brand. BHX must perform a
flawless customer support in order to achieve these 5-stars reviews on social
media and to create a remarkable brand image.
• Employee’s morale and turnover cost are the next targets: By boosting the
morale of employee, BHX aim to provide a significant support to customer.
Therefore, if employee can make the customer happy, then they will help the
firm reduce the turnover costs.
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 • Adds value to your brand: For the bright future, BHX need to increase the
brand value. By performing a great customer service, BHX can advance in
launching a new product or expanding in new industries.

[Link] Training Strategy

In order for employees to understand, agree and always strive to realize the common goal of
the business. The manager must train and provide tools, resources and inspiration for
employees to always make the customers happy and satisfied. This is an integral part of
customer service planning. The content of staff training and coaching can include:

• Communication skills: Communication is an extremely important skill that

salespeople need in the process of communicating with customers. When
communicating with customers sale team need to focus on the problem, avoid
rambling and avoid asking too many questions. Salespeople must learn to
communicate well with all types of customers in order to give them the best
impression of BHX's image.
• Customer persuasion skills: The ability to persuade customers is a decisive
factor to attract customers of employees. In order for customers to choose
BHX's products, salespeople must convince them that the company's products
will meet their needs, even better.
• Understand customer psychology: Understanding customer psychology will
help employees to have the best way to handle each arising situation and
maintain BHX's image.
• The ability to solve problem: Circumstances like encountering complaints and
even objections from customers require employees to have good situational
skills to ensure the benefit of the company while not offending their
customers.
• Time management skills: Each customer should be given a fair amount of
time. If the company is too focused on one customer, the company may lose
other potential customers.

[Link] Treatment
BHX provide a time-based salary for sale team. Time-based salary is the calculation of the
salary of an employee according to the time of work.

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 𝑆𝑎𝑙𝑎𝑟𝑦 + 𝑎𝑙𝑙𝑜𝑤𝑎𝑛𝑐𝑒 (𝑖𝑓 𝑎𝑛𝑦)
𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑠𝑎𝑙𝑎𝑟𝑦 =
𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦 𝑏𝑦 𝑚𝑜𝑛𝑡ℎ ∗ 𝑎𝑐𝑡𝑢𝑎𝑙 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠

BHX also treat employees with social insurance and health insurance. By paying insurance
for employees, BHX adapt the mandatory requirement for businesses. This helps to
supplement employee benefits and health insurance. Allowances are another treatment, other
surcharges such as gasoline, lunch, phone, birthday gifts,…Also needs additional attention. It
not only shows the concern of BHX to the employees' physical and spiritual life but also is
the binding rope employee engagement voluntarily.

[Link] Service Standardization

1. Discount policy & Free shipping
New Customer Free Shipping
(First time come to BHX) (For the first 5 orders from 100,000VND)

Invoice from 2 million VND or Purchase Free Shipping

in the last 3 consecutive months with (For order from 250,000 VND)
BHX
Invoice less than 2 million VND Free Shipping
(For order from 500,000 VND)
Discount 50%
(For order from 250,000 VND)

2. Home delivery & Perfect commitment

• Whether customers are in an office or apartment, [Link] guarantees
home delivery, customer does not need to stop work to get off the goods.
• Current delivery area: Ho Chi Minh City; Bien Hoa City; Binh Duong (Delivered
only in Thuan An City, Di An City, Thu Dau Mot City, Tan Uyen Town); Can
Tho City; Tan An City, Long An Province; Tay Ninh City; My Tho City; Buon
Ma Thuot City; Vung Tau City; Phan Thiet City ([Link] is expanding
more).
• Just choose time when ordering, [Link] commits to deliver right
products and on time. If there is a shortage of delivery for even 1 minute late,
customer will receive a voucher of 50,000 VND immediately.

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 • 3 convenient timelines for customer to choose: before 12 o'clock, before 16 o'clock
and before 21 o'clock. (Bulky orders will deliver between 8am and 9pm).
3. Customer database utilization
BHX utilizes the CRM (customer relationship management tool) to record customer details
such as: contact information, purchase history, and birthday, etc. BHX will personalize the
shopping experience to build customer profile, add notes, and track their purchase history, etc.
Therefore, BHX can make a relevant and timely recommendation. BHX also celebrates
customer’s birthday by giving them voucher as birthday gift.

Picture 16:

[Link] & Compensation Policy

From CRM tools and online website, customer can make a complaints and feedbacks to BHX.
Customer feedback is important to BHX, and we review all comments carefully. Customer
can expect to hear back from a customer experience specialist with the next 24 hours.

• Acknowledge immediately
When customers take the time to give honest feedback, BHX will respond as
soon as possible, to let them know we received it. This can be accomplished
with a well-worded automated email or text message.
• Set clear expectations
In the initial response, BHX will tell the customer when they can expect to
hear from us. BHX always be reasonable and rapid.
• Continuously improvement

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 By establishing a case management and triage process, implementing case
management software, hiring additional staff to manage the load are what
BHX doing to stabilize customer service.

[Link] Satisfaction Level & Mystery Shoppers

Competition in all industries has intensified, it is becoming increasingly difficult to acquire
new customers and the importance of retaining existing customers has increased. The quality
assessment of services focuses on customer satisfaction. Customer satisfaction is decisive for
the long-term success of BHX.

Mystery shopping provides very reliable results about the quality of the service. It is
indispensable, especially when it comes to in-depth analyses of system processes and
personnel.

Small changes in the service area can be assessed by customer surveys.

A customer survey is usually sufficient if a company wants to know, for example, whether a
small change in the service system is well or poorly received by the customer. The benefits of
customer surveys are that they are quick and economical.

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Mystery shopping enables BHX to review the quality of the services it offers and to reveal
our weaknesses and strengths. If BHX are aware of both, BHX can apply appropriate
measures to eliminate errors and promote positive aspects. This improves customer
satisfaction and customer loyalty.

[Link] Empowerment
Employee empowerment can be a very effective tool in modern day organizations. Giving
employees more power to make decisions in lower level positions can increase organizational
and individual productivity, efficiency, and competency. Other advantages include an
increase in self-determination, increase trust between employees and managers, and personal
connections to the organization and job performance. Employee empowerment requires new
training and a new power dynamic which can be seen as disadvantages. Overall, employee
empowerment can be seen as a successful concept as long as both managers and employees
are willing to take part in the process. BHX always recommend our employee to make a
decision in certain circumstances.

IX. STORE LAYOUT AND DESIGN

Picture 18:

BHX Layout

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 0. Market basket
1. Counter
2. Vegetables and fruits
3. Sea foods
4. Snacks, constant noodles, drinks, butter …
5. Cooking ingredients
6. Washing liquid, Fabric softeners, floor cleaner, toothpaste …
7. Frozen foods (pork, beef, chicken, sausage, …)
8. Ice cream, milk, yogurt, …
9. Toilet paper, diaper, tampon, …
10. Warehouse
11. Special drinks (beer, wine, …)
12. Rice
13. Accessories (cosmetics, razor, chewing gum, …)

The smell of fresh fruits and vegetables gets a shopper’s mouthwatering, and the best grocery
store customer is a hungry one, then they seem to be more attractive with foods, so BHX
placed the vegetables and fruits shelf in front of the entrance, was the clever strategy to
increase their sales. Besides that, fresh fruits and vegetables also be used as one way to make
customers feel comfortable and reduce their guilty feeling when they would like to buy some
unhealthy foods.

The location of merchandise categories also plays a role in how customers navigate through
the store. By strategically placing impulse and demand/destination merchandise throughout
the store, retailers increase the chances that customers will shop the entire store and that their
attention will be focused on the merchandise that the retailer is most interested in selling—
merchandise with a high GMROI. Demand/destination merchandise is products that
customers have decided to buy before entering the store. In BHX case, based on the
Vietnamese culture, the woman went to the supermarket more frequently than the man, so
they considered washing liquid, fabric softeners, floor cleaner, toothpaste, etc. are the
demand merchandises, so they placed these in the back left-hand corner of the store. Placing
high- demand merchandise in this location pulls customers through the store, increasing the
visibility of other products along the way. About the young customers, they prefer to buy
snack, drinks, noodles, etc. rather than others, so BHX placed these in the back of the store is
easy to understand.

60
BHX also considered another type of product is impulse products or products that are
purchased without planning. Impulse products were placed in front of the counter where can
attract customer attention very well.

BHX put complementary categories next to each other to encourage unplanned purchases.
For example, snack, constant noodles, drinks, etc. were placed next to each other,

a. Type of design layout

Retailers use three general types of store layout design: grid, racetrack, and free form. Each
of these layouts has advantages and disadvantages. BHX use the grid layout because this
design enables their customers to easily find the product they are looking for and minimize
the time spent on a shopping task that most don’t enjoy. The grid layout is also cost-efficient.
There’s less wasted space with the grid layout than with other layouts because the aisles are
all the same width and designed to be just wide enough to accommodate shoppers and their
carts. The use of high shelves for merchandise enables more merchandise to be on the sales
floor compared with other layouts.

b. Customer flow effect

One limitation of the grid layout, from the retailer’s perspective, is that customers typically
are not exposed to all the merchandise in the store because, due to the height of the shelves,
they see only products displayed in the aisle they are in. Therefore, the layout does not
encourage unplanned purchases. BHX overcome this limitation, to some extent, by
complementing the packaged goods in the center-store grid with a racetrack of fresh,
perishable merchandise categories (meat, seafood, dairy, poultry, and produce) around the
periphery of the store.

c. Fixtures

It saves space: The key benefit of this type of retail shelving is that it enables stores to
optimize space. The units are assembled with vertical shelving on both sides. As gondola
shelving systems are free-standing units, we can create aisles of products throughout the
premises. The vertically stacked shelves take up minimum space and offer an accessible,
practical solution for our store to display a large number of items in a limited space.

It’s a flexible type of retail display shelving: Gondola shelving offers maximum flexibility.
Units can be moved around the store, shelving is easily adjusted to different heights and

61
depths to tailor your shop display to suit the merchandise, and the shelving units come in
different styles and sizes. Shelving is durable and can support loads of up to around 150kg.
Shelves can also be tilted to create a more attractive retail display.

It’s cost effective: Gondola shelving units are a lower cost retail shelving option compared to
many other types of shelving.

d. Lighting

Good lighting in a store involves more than simply illuminating space. Lighting can highlight
merchandise, sculpt space, and capture a mood or feeling that enhances the store’s image.
Retailers are exploring ways to save energy with technologically advanced lighting. Having
the appropriate lighting has been shown to positively influence customer shopping behavior.
BHX used both vertical and horizontal lighting. They used cold light colors which are white
and near to blue colors lights will give a fresher, more luxury feels.

e. Music

Like color and lighting, music can either add to or detract from a retailer’s total atmospheric
package. Unlike other atmospheric elements, however, music can be easily changed.
Retailers also can use music to affect customers’ behavior. Music can control the pace of
store traffic, create an image and attract or direct consumers’ attention. However, almost
BXH stores did not open the music.

62
X. REFERENCES
• References of Target Market:
- [Link]
va-mua-sam-nhung-nhu-yeu-pham-hang-ngay
- [Link]
va-Sach-cua-nguoi-tieu-dung\
- [Link]
1254078_1/courses/IS082IU_1_2020-2101/Types%20of%[Link]
- [Link]
• References of Location Analysis:
- [Link]
[Link]
- [Link]
nghiem-va-thay-doi-mo-hinh-nhung-van-chua-tao-ra-loi-nhuan-
[Link]
- [Link]
voi-mo-hinh-mo-moi-cua-bach-hoa-xanh-1119332
- [Link]
[Link]
- [Link]
nam-2020
• References of Retailing Channels:
- [Link]
xanh-3331996/
- [Link]
[Link]
- [Link]
• References of Pricing:
- [Link] [May 25, 2019]
- Dina Gerdeman (Oct 2012), Better by the Bundle?
- [Link] [2019]
- Tien, N. H. (2020), Comparative analysis of the business strategy of Bach Hoa Xanh
and VinMart on Vietnam's retail market
• References of Marketing Communication Mix:

63
- [Link]
Objectives_6097/#:~:text=Intended%20goals%20of%20an%20advertising,(6)%20eff
ecting%20a%20sale.
- [Link]
- [Link]
- [Link]

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