Chapter 1 INTRODUCTION

Transcription

Shu-Te University
College of Management
Graduate School of Business and Management
Master
Customer Relationship Management (CRM):
A case study for Vietnam Petroleum Corporation, regional
branch V
Student:
Le Duy Bao
Adviser:
Dr. Tsung-Nan Tsai
Co-advisor:
Dr. Pham Thi Lan Huong
June, 2013
Customer Relationship Management (CRM): A case study
for Vietnam Petroleum Corporation, regional branch V
Student: Le Duy Bao
Advisor: Dr. Tsung-Nan Tsai
Co-advisor: Dr. Pham Thi Lan Huong
A Thesis
Submitted to the
Graduate School of Business and Administration
College of Management
Shu-Te University
In Partial Fulfillment of the Requirements
For the Degree of
Master of Business Administration
June, 2013
Graduate School of Business and Administrator
Shu-Te University
Customer Relationship Management (CRM): A case study for
Vietnam Petroleum Corporation, regional branch V
Student: Le Duy Bao
Adviser: Dr. Tsung-Nan Tsai
Co-adviser: Dr. Pham Thi Lan Huong
ABSTRACT
Customers are becoming more important and are key resources to the success of
the enterprise. Customers bring in revenue and profit for the enterprise, and customers
who bring in business information, such information is necessary for the existence and
can make a business successful. This research examines Customer Relationship
Management (CRM), from the perspective of strategy formulation and implementation.
We review the origins and role of CRM and highlighting the importance of adopting a
cross-functional approach to CRM strategy formulation. We examine alternative
approaches to CRM strategy development and, using a quantitative research approach
through the questionnaire. We identify four critical implementation components of a
successful CRM program and examine these in the context of key cross-functional
CRM processes in the Vietnam Petroleum Corporation – regional branch V. The results
show that the company should consider the CRM system as a strategy of the company.
Especially the company should have the experience and well-trained employees, and
complete information system.
Keywords: potential market, CRM, marketing, process, strategy, philosophy,
technology, e-marketing, demand-chain, multi-channel.
iii
ACKNOWLEDGEMENT
On the completion of this thesis, firstly, I would like to express my special thanks
and gratitude to my supervisor, Professor Tsung-Nan Tsai for his numerous useful
materials, invaluable advice, kind guidance, suggestions and comments on my thesis.
Without his care, patience as well as encouragement, I may not be able to finish this
thesis. On this occasion I would also like to express my sincere and special thanks to my
co-supervisor – Doctor Pham Thi Lan Huong for her support as well as great
encouragement throughout the thesis preparation. I also would like to say thanks to ShuTe University as well as the University of Danang for giving as much supports as
possible for students to finish the courses as well as the thesis supporting sections and
big encouragement, care from Professor Chen Pi Yun. Last but not least, my thanks and
gratitude will go over to my friends and family who always support me during my
studying time and thesis time.
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Table of Contents
ABSTRACT ................................................................................................ iii
ACKNOWLEDGEMENT ......................................................................... iv
Table of Contents ........................................................................................ v
List of Tables............................................................................................... ix
List of Figures .............................................................................................. x
Illustration of Symbols ............................................................................... xi
Chapter 1 INTRODUCTION..................................................................... 1
1.1. INTRODUCTION ........................................................................................................... 1
1.1.1. Introduction .................................................................................................... 1
1.1.2. Background ..................................................................................................... 2
1.2. RESEARCH QUESTIONS ............................................................................................ 4
1.3. SCOPE AND FOCUSES ................................................................................................ 4
1.4. RESEARCH OBJECTIVE ............................................................................................. 5
1.5. DATA SOURCE.............................................................................................................. 5
1.6. SIGNIFICANCE OF RESEARCH ................................................................................ 6
1.7. THESIS OUTLINE ......................................................................................................... 7
Chapter 2 Reaearch Methods .................................................................... 8
2.1. CONCEPTS AND DEFINITION .................................................................................. 8
2.1.1. Concept of Marketing ..................................................................................... 8
2.1.2. Concept of CRM............................................................................................. 8
2.1.2. The definition of CRM ................................................................................. 12
2.2. THE SECTOR OF CRM ............................................................................................... 12
2.2.1. Promotion activities ...................................................................................... 12
2.2.2. Sale ............................................................................................................... 12
2.2.3. Customer service .......................................................................................... 13
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2.3.4 RELATED THEORETICAL FRAMEWORK AND EMPIRICAL STUDY 14
2.4.CRM MODULE IN THE PETROLEUM SECTOR COMPANY V ............... 16
2.4.1. Identify target customer ................................................................................ 16
2.4.1.1. Creating the database ............................................................................. 16
2.4.1.2. Analysis customer’s data ....................................................................... 17
2.4.1.3. Identify target customer ......................................................................... 18
2.4.2. Develop programs to target customers ......................................................... 19
2.4.2.1. Customer service and support................................................................ 20
2.4.2.2. The program regularly to maintain customer loyalty ............................ 21
2.4.2.3. Comply with the requirements of the customer..................................... 21
2.4.2.4. Building communication program ......................................................... 21
2.4.3. How to measure CRM program success....................................................... 22
Chapter 3 Theories .................................................................................... 23
3.1. GENERAL INTRODUCTION ABOUT VIETNAM PETROLEUM
COPORATION - REGIONAL BRANCH V ..................................................................... 23
3.1.1. The company’s establishing and developing history.................................... 23
3.1.2. Functions, tasks and the structure of the company (Petrolimex Company –
Branch V) ............................................................................................................... 24
3.2. THE COMPANY RESOURCES ................................................................................. 26
3.2.1. The Usage of human resources ..................................................................... 26
3.2.2. The Financial situation of the company ....................................................... 28
3.3. THE CUSTOMER RELATIONSHIP MANAGEMENT AT VIETNAM
PETROLEUM COPORATION - REGIONAL BRANCH V ........................................... 31
3.3.1. Marketing activities at the company............................................................. 31
3.3.1.1. The Product Policy ................................................................................ 31
3.3.1.2. Price policy ............................................................................................ 31
3.3.1.3. Promotions activities ............................................................................. 33
3.3.2. CRM at the company .................................................................................... 39
3.3.2.1. The goal of CRM programs at the company recently ........................... 39
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3.3.2.2. The situation of CRM in the company .................................................. 39
3.3.2.3. Evaluating CRM activities of the Company at present ......................... 45
3.3.2.4. Advantages and disadvantages of (CRM) of the company ................... 50
3.4. CONCLUSION OF CHAPTER 3 ................................................................................ 51
Chapter 4 Empirical study ....................................................................... 52
4.1. PREMISES FOR CONDUCTING SOLUTIONS ...................................................... 52
4.1.1. Purposes and the orientations of the company ............................................. 52
4.1.2. Directions for the customer relationship management in the coming time .. 53
4.1.3. Factors affecting the customer relationship management activities of the
company ................................................................................................................. 54
4.1.3.1. External factor ....................................................................................... 54
4.1.3.2. Internal factors ....................................................................................... 55
4.2. OVERALL SOLUTION FOR CUSTOMER RELATIONSHIP MANAGEMENT
VIETNAM PETROLEUM COPORATION - REGIONAL BRANCH V ...................... 57
4.2.1. The process of conducting customer relationship management to the year
2015 of the company. ............................................................................................. 57
4.2.2. The overall solutions for customer relationship management at the company
................................................................................................................................ 59
4.2.2.1. The data collection................................................................................. 59
4.2.2.2. Questionnaire design ............................................................................. 59
Chapter 5 CONCLUSIONS AND MMENDATIONS ........................... 77
5.1. CONCLUSIONS ........................................................................................................... 77
5.2. SOME SUGGESTIONS ON CONDUCTING THE CUSTOMER
RELATIONSHIP MANAGEMENT ACTIVITIES AT THE COMPANY .................... 78
5.2.1. Building the organizing culture with customer orientations ........................ 78
5.2.2. Investing in infrastructure development ....................................................... 78
REFERENCES .......................................................................................... 82
APPENDIX 1 CUSTOMER OPINION SURVEY NOTE................................................ 85
APPENDIX 2 LIST OF COMPANY’S PETROL STORE.............................................. 90
vii
APPENDIX 3 LIST OF INTERVIEWED CUSTOMER................................................. 93
APPENDIX 4 ........................................................................................................................ 98
APPENDIX 5 ...................................................................................................................... 102
APPENDIX 6 ...................................................................................................................... 109
viii
List of Tables
Table 1. Describing the comparison of the conceptions CRM ....................................... 11
Table 2. Human resource structure of company in 2011 ................................................ 26
Table 3.Structure the proportion of workers in company............................................... 27
Table 4. Analyze the income statement of the Company ............................................... 28
Table 5. Financial parameters of company..................................................................... 30
Table 6. Price policy of company ................................................................................... 32
Table 7. For agents, general agents group (A, GA) ........................................................ 37
Table 8. Customer production customer group .............................................................. 38
Table 9 For group of general agents and agents ............................................................. 43
Table10. For group of production customer ................................................................... 43
Table11 The proportion of staff in sales department structure ....................................... 48
Table12 Company’s currently available Informatics equipment ................................... 49
Table13 Table evaluates selection criteria for the classification .................................... 63
Table14 Classify customers according to the Company's revenue ................................ 64
Table14 Classically targeted customers of the Company .............................................. 67
Table16. Assessment of customer interaction forms ...................................................... 68
Table17 Evaluate the selected interactive ...................................................................... 69
Table18. Evaluate selected interactive form................................................................... 70
Table19 Interaction with each customer ......................................................................... 71
Table20 Service policy according to customer needs .................................................... 73
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List of Figures
Figure1. Description of CRM activities ......................................................................... 10
Figure 2 CRM implementation steps .............................................................................. 14
Figure 3. CRM module in the petroleum sector company V.......................................... 16
Figure4.The analytical data model ................................................................................. 18
Figure5. Model for programs to build customer relationships ....................................... 20
Figure6. Model for programs to evaluation CRM program ........................................... 22
Figure7 Organizational structure of company ................................................................ 25
Figure8. Customer network management ....................................................................... 34
Figure9. Transaction chart of company .......................................................................... 35
Figure10 Dealing with customer ................................................................................... 36
Figure11 Management and Accounting software system .............................................. 41
Figure12 Customer satisfaction of the Company ........................................................... 46
Figure13 Company’s web system ................................................................................. 49
Figure14 Roadmap for implementation of CRM from now to 2015 of the Company ... 57
Figure15 CRM module in the petroleum sector company V.......................................... 61
x
Illustration of Symbols
LCV: Lifetime Value of Customer
S: The sale to Customer i
DC: Direct costs of products Customers
MC: Marketing costs for Customers.
δ: interest rate
t: time unit
T: Time total
xi
Chapter 1 INTRODUCTION
1.1. INTRODUCTION
1.1.1. Introduction
Nowadays, Customer Relationship Management (CRM) is becoming a critical
factor to ensure customer pleasure, loyalty and repeat purchase of a company (Anton
and Hoeck 2002). Especially, CRM can give the solutions to the peremptory challenges
faced by firms in identifying their target market and increasing the profit levels and
customer loyalty.
There is mounting evidence that CRM is important issue in maintaining and
creating relationships with customers (Jain et al., 2003; Chen and Popvich, 2003;
Zineldin, 2005). CRM has been defined in many dimensions such as a process, a
strategy, a philosophy, a capability, or as a technological tool (Zablah et al., 2004) such
as according to Chen and Popvich (2003), CRM is a combination of people, processes
and technology that seeks to understand a company's customers, or according to
Roberts-Phelps (2001), CRM as an approach to manage customer relationships.
One of the important dimensions that are CRM systems and technology such as
it may support sales, marketing, and service and integrate and analyze data about
customers (Reinartz et al., 2004; Day, 2003). The second point that is CRM emphasizes
the selective management of customer relationships to create shareholder value
(Krasnikov et al., 2009; Roy and Shekhar, 2010). And the last, CRM is defined as the
way an entire organization accepts and practices CRM (Swift, 2000).
So, in this study CRM can be defined that is a strategic approach that is
concerned with creating improved shareholder value through the development of
appropriate relationships with key customers and customer segments. CRM is the
technology used to integrate marketing systems and information systems to maintaining
relationships with current customers and seeking potential customer. CRM provides
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enhanced opportunities to use data and information to both understand customers and
create value with them (Swift, 2000).
Many believes that through CRM, firms are able to understand customer form
strategic perspective and as a result the CRM ultimately focuses on effectively turning
customer information into intelligence to more efficiently manage customer
relationships (Galbreath and Rogers, 1999). The goal then is to improve the customer’s
experience of how they interact with the company, which hopefully, will turn into more
satisfaction, which might lead to more loyalty, and finally, and to increase in profit
(Chou et al, 2002). The implementation of CRM impacts on a number of functions
within an organization including sales, IT, operations, marketing and finance.
1.1.2. Background
Vietnam Petroleum Corporation, region branch V has the function of receiving,
storing, and meeting the demand of gasoline, oil, petrochemical products, gas and other
supporting materials etc. as assigned by the market on province of Da Nang, Quang
Nam, Quang Ngai etc. and to Lao, Cambodia, the state reserves, to meet the needs of
production, life and national security. Key tasks of the company is to provide effective
Petrol by the policy of the State and the Corporation, the specific tasks include: The
Company is responsible for planning, organizing business activities well to ensure
timely response to customer demand. Implementation of independent accounting
business operations to rational use of labor, property, materials, capital and ensure
efficiency in business and fulfill obligations to the state budget. Staff training
employees, full implementation of policies, salary, social insurance, safety, labor
protection for employees. Research and application of scientific techniques and
technology.
In the business environment is more volatile, whether large or small business,
whether manufacturing enterprises tangible product or service, wants to succeed must
take care of customers. The customer is the main decision of the existence and
development of business, which businesses recognize. So, how to keep old customers
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and attract new customers? That is the problem always makes the leaders of the
business to think.
In real, Viet Nam is a developing country, businesses are always looking to
expand the market to get more new customers, take it as criteria in its business activities.
Sell more goods are big goals that most companies follow. However, how to sell more
goods? Attract new customers and retain existing customers is a way to increase
company sales. But there are so many companies have "a taste of suffering" because
they are only interested in new customers but to lose existing customers. This is pour
water on the hole. Want to retain customers, companies attempt to manage customer
relationships. Strict management will increase customer satisfaction. Satisfaction will
bring many benefits to the company: Keep longer loyalty; Buy more; Have good
feedback about the company; Pay attention to company that does not pay attention to
other companies etc.
Customers are becoming more important and are key resources to the success
of the enterprise. Customers bring in revenue and profit for the enterprise, and
customers who bring in business information, such information is necessary for the
existence and can make a business successful.
From the Business Department of the Petrolimex Vietnam, A new perspective
business-oriented customer service has indicated that businesses need to answer the
questions:

Who are the customers of the company?

What do they really want and need?

What does the company do to be able to manufacture and bring products /
services to the customers?
More importantly, customers want their needs fulfilled. Customer demand is
usually greater than the ability of suppliers to meet and usually include buying and
selling process, ways of communication, customer service etc.
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Therefore, the companies have forced to get focus on customers to all its
business activities. Especially when their products, services are not much different from
products and services of the same competitors, the only difference lies in the building
strategy of relationship with customers.
Vietnam Petroleum Corporation, region branch V is a company engaged in the
business of manufacturing petroleum products, liquefied petroleum. Company's
potential is huge, brand and products of the company are very popular but in recent
years, in addition to traditional customers to date, the company has no active relevant to
the search for new customers. Facing that, the company must have solutions to retain
old customers and looking for new customers to promote the full potential of the
company.
Stemming from this fact, the "Customer Relationship Management (CRM) - a
case study for Vietnam Petroleum Corporation, regional branches V" is very necessary
and objectives to grow the company in the coming time.
1.2. RESEARCH QUESTIONS
Propose solutions to improve the customer relationship management in order to:
improve service and maintain customer loyalty of company.
Specific objectives:
 Create a sense of relationship and increase loyalty with customers less
direct contact with the company.
 Identify the right customers
 Select the appropriate way to interact with each of the right customers.
 Make policies for different groups of customers.
1.3. SCOPE AND FOCUSES
The objective of this study is all that matters theoretical and practical work
related to customer relationship management at regional Petroleum Company V.
Research scope:
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
Contents: Threads only mention some main; these measures are feasible
and effective in the CRM - a case study for Vietnam Petroleum
Corporation, region branch V.

Space limitations: The Vietnam Petroleum Corporation, region branch V.

Time: Subject research focus on customer relationship management - a
case study for Vietnam Petroleum Corporation, region branch V during the
period 2008-2012
1.4. RESEARCH OBJECTIVE
The main objective of this study is CRM – a case study for Vietnam Petroleum
Corporation, region branch V. The methods used to in thesis: Statistical methods such
as frequency and descriptive analysis. Descriptive statistic is used to describe the basic
features of the data. Descriptive statistic can help researchers to manage data profile and
have an overview of data. Descriptive analysis framework includes: total number of
sample (N), mean, and average mean, the minimum and the maximum value frequency
of each variable.
Methods of processing and analyzing data use appropriate software such as:
Excel, SPSS etc, the statistical methods and some other methods.
1.5. DATA SOURCE
Sources of data used for the study was both primary and secondary. The
Information we need collection for this study by questionnaire and interviews that is:
-
What do you want from your customer?
-
Which data will point you in the direction appreciated?
-
With these data, ask yourself why you have those figures. That will
determine whether you need to connect which information together. The
following are lists of information you need to check your customer.
-
How long did they conduct business with you?
-
What do they fell you can improve something more?
5
-
How long do they repeat the purchase with you? (That compares with the
industry standards)
-
Which events in the life impact their business and yours? (Income, expenses
etc.)
-
Which competitor do your customers also interact?
-
Which information affects their purchasing decisions? For example:
commodity prices, product quality, service, speed of acquisition, relationship
of customer with you.
-
Choose the information (identifying the decision points)
-
Progressing to the influence management, we have to determine issues to
make the influence management solutions. The information which we need
to choose a decision:
-
Review what are customers satisfied about?
-
What are customers unhappy about?
-
What are customers difficult in?
Primary data: A survey of 160 customers. Stratified random sampling is
applied. To get this data, we choose a group and then we spend some times to training
interviewer and collective data. The survey regions for this present study are located in
Da Nang City and Quang Nam province. Data preprocessing, information analysis, and
test hypothesis were conducted using SPSS software.
Secondary data: General Statistical Office (GSO), Business Department at
Company, magazine, Internet etc.
1.6. SIGNIFICANCE OF RESEARCH
CRM helps the board consider and solve the issues which related to the
company:
(1) Transactions: CRM helps internet transactions in the customer network of
the company
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(2) Analysis: CRM allows companies create and analyze information to
manage and track customer data.
(3) Planning: CRM helps you arrange schedules for employees, for groups,
including the daily calendar, weekly calendars and monthly calendar
(4) Declare: CRM will help identify customers who have regular relations with
the company, the company has worked with which customer, and the
customer is a partner of any plans relating to priority. ..
(5) Managing contact: CRM allows manage and monitor the phone calls in the
company, helps you put the plan on the time to call anyone, how long for a
call and do you make it or have forgotten etc.
(6) Management: CRM allows the establishment of corporate governance role
and position of the sales staff, customer relations staff, which develop their
management and their roles.
1.7. THESIS OUTLINE
This thesis will be organized into five chapters. This chapter presents a
background of the research. It discussed the motivation of the research problem, and
stated the research objective and related questions. Chapter two presents the literature
review of customer relationship management (CRM). On the basic of conceptual
principles, the literature review grants a rational guideline for the whole research.
Chapter three describes the status of the CRM - a case study for Vietnam Petroleum
Corporation, regional branches V. Chapter four provides the solution to perfect the
CRM- a case study for Vietnam Petroleum Corporation, regional branches V. And then
chapter five provides conclusions and recommendations.
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Chapter 2 Reaearch Methods
2.1. CONCEPTS AND DEFINITION
2.1.1. Concept of Marketing
According to Philip Kotler, fifth Edition (p32-33), Marketing concept that the key
to achieve corporate goals is to identify needs and desires of target markets and satisfies
them with efficiency and performance than the competition.
As a managerial definition, marketing has often been described as “the art of
selling products.” But Peter Drucker (1973), a leading management theorist, says that
“the aim of marketing is to make selling superfluous. The aim of marketing is to know
and understand the customer so well that the product or service fits him and sells itself.
Ideally, marketing should result in a customer who is ready to buy.” The American
Marketing
Association
(1995)
offers
this
managerial
definition:
Marketing
(management) is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges that satisfy
individual and organizational goals.
2.1.2. Concept of CRM
There are many CRM opinions; each approach has a different aspect.
(1) The concept of CRM as a business strategy
CRM is an opportunity for investment company clients, but can bring great
value to the company. According to Parvatiyar et al. (2001), CRM is a "way of thinking
and processing registration customer relationships." CRM was considered as a strategy
because if done well CRM will include a clear plan. Any strategy in the organization if
not for creating, maintaining and expanding relationships with customers, catering to
the organization.
Strategy set the direction for the organization and any blocking strategy make
our organization go into wrong direction. We can consider this problem from the
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department or range level. The strategy organizations – plan manages shareholder,
logistics, marketing etc. These strategies support customer. This is reasonable enough to
not need to pay attention but it's easily forgotten. CRM relates to the entire customer
cycle. The functions of CRM strategy include: establishing, maintaining, and expanding.
The implementation of CRM strategy is to collect and analyze data about customers,
objectives, and their buying behaviors. From this information, we will understand and
predict customer behavior. Marketing efforts, equipped with knowledge about
customers will be more successful both in finding new customers and make existing
customers to spend more on the company. The contact with customers is equipped with
detailed information about the preferences of customers will make customers more
satisfied.
(2) The concept of CRM as a technology
CRM is a technology that uses a mix of sales, marketing, services information
systems to build relationships with customers (Fickel, 1999; Eckerson and Watson,
2000). We have witnessed an explosion of CRM tools for many years, especially the
software application. According to Bayer (2002) show that a recent report of Forester
Research, 45% of businesses are considering or applying the CRM tools. Meanwhile,
37% of businesses are setting up or complete the CRM program. These companies will
spend millions on the CRM applications; usually work with 10 or more of the other
suppliers.
CRM strategy driven organizational structure and in turn led reorganization
options associated with the application of technology. However, individuals eager to
apply the technology and forget that must begin with a CRM strategy.
(3) The concept of CRM as a philosophy
CRM is not a separate project. It is a business philosophy aiming at battling to
win the customer for the company (Daniel, 2012). Successful CRM requires that
customer focus with an understanding of the changes desired by customers. Customers
retention (and because of profit) is the highest achieved goal of the company in
maintaining and building relationships with customers.
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(4) The concept of economic CRM magazine
According to, Le The Gioi (2010) CRM is the whole process of collecting
information about customers, sales, effectiveness of marketing activities, the ability of
companies to adapt to the trend of the market aimed at improving business performance
and bringing higher profits for the company.
In the Figure1, the information from the customer will be sent to the customer
information by web and mail, fact, contact center, and partners. And then the customer
information will be analysis before sending it to processing office. Next, the customer
information also sent to marketing activities and then processing office. Besides, there is
information always sent back to customer such as information about the product, or
some explain about product’s problem. So, this information always has two directions.
Wed andmail
Analysis
Fact
Customer
Information
Custom
ers
Processing
Office
ContactCent
er
Marketing
Partners
Figure1. Description of CRM activities
(Source: Le The Gioi, Marketing Management, 2010)
(5) CRM is a process of actions:
CRM is the conception that shows the search and development, the cooperation
and relationship among the entity in the market, the allocated channel and the last
consumer. The success of CRM depends on the realizable ability and responsibility for
the increased expectation of the clients. The relationship between the sale and the user
will develop dramatically past the time. Table1 describes the comparison of the
conceptions CRM.
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Table1. Describing the comparison of the conceptions CRM
Factors
Process
Descriptions
Application for CRM
The relationship between The success of CRM
the seller and the user depends
on
the
developers past the time
realizable ability and
responsibility for the
The conceptions
CRM is the conception
that shows the search
and development, the
cooperation
and
increased expectation relationship among the
of the clients.
entity in the market, the
allocated channel and the
last consumer.
Strategy
The value of customers
decides the quantity and
quality of the invested
resources making the
relationship.
The success of CMR
request continuously
making
the
long
relationship with the
company’s customers.
CRM is a chance of
companies that invest in
customers and in which
make
many
opportunities
for
company. Nevertheless,
the
investment
for
customers is not much.
Philosophy
Keeping the customers is
the highest propose in the
building and maintaining
relation with customers.
The success of CRM
requests getting clients
in the centre, by
understanding
the
changes in expectation
of clients.
CRM is able to change
your acts and customers,
by understanding that
customers say how about
you and what you
understand them.
Technology Information and Image
management Technique is
the key success of
building
the
long
relationship
with
customers.
The success of CRM
concentrates on the
function building the
knowledge
and
influence management.
CRM is the technique
that uses the mix of sale,
marketing,
and
information system in
order
to
building
customers relationship.
(Source: Le The Gioi, Marketing Management, 2010)
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2.1.2. The definition of CRM
CRM is the strategy that attracts and maintains the development of customers.
By the way concentrates the resources of company in supplying “Taking care costumer
service” (Le The Gioi and Nguyen Thanh Liem, 2007).
2.2. THE SECTOR OF CRM
CRM implementation consists of the action chain that replied on business
strategy. This may be classification in four main groups: promotion activities, sale and
customer service. These are the main factors that contributed to create CRM structure
(Le The Gioi and Nguyen Thanh Liem, 2007).
2.2.1. Promotion activities
(1) Promotion program management: Some techniques help forming plans,
making plans and assessing advertisement campaigns. This technique also helps us
define market parts, select object patterns. Based on these results, the channel
information of advertising plans will be made.
(2) E-marketing: Is the application making essential online marketing
elements in electric commercial operators, directing marketing and the others contacts
on the Web. The technique may include the partition execute advertisement job on the
Internet, execute campaign giving discount (coupon) and the relative jobs, etc.
(3) The other automatically market tools: The tools help us set marketing
plans, research marketing, brand management, team working and manage the property
connecting marketing (for example “cooling equipment” which Coca Cola give sellers
exhibit the firm’s product.)
2.2.2. Sale
(1) Automatic sale staff: Supply sale employee information associated to
customers and the tool help job and grows productivity of using time of sale staff. This
tool may include management parts, potential objects, parts making introduction of
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product, follow habits of customers, analysis productivity of sale staff and predict
avenue.
(2) Call center: Providing management module that support current customers
as well as provide potential customers information of product/service. The tool typically
is attached to the telephone network or multi-channel exchange system. This tool may
also have additional online training modules (remote) for the sales staff, create modules
on the Power Point presentation, or self-generated product offers.
(3) Demand-chain: Tools support to a broad supply chain and to customers,
including management modules that are about product information, create online
catalogue, predict demand and optimize the price.
(4) Relationship management with agents/partners: Including modules
managing partner network, managing the distribution of agent market, managing agent
commission and forecast sales.
2.2.3. Customer service
(1)
Supporting
service
management:
modules;
customer exchange
management, support multi-channel contact web-email, call trace are set up to call
center and supported center by Internet. These tools allow customers to self-service
(free search service for products / service on the company's extranet)
(2) Hot line: Facilities and software allowing customers to make calls directly
to the service department 24/7 (24 hours per day, 7 days per week). The tool also
typically include utilities auto-responder self-help customers find answers to some
frequently asked questions related to product / service they are using.
(3) Stay (office) service management: Tools allow managing the help at
customer location such as logistic management, ranking requirement of customers and
schedule for supporting team, Inventory management related services to customers.
13
2.3.4 RELATED THEORETICAL FRAMEWORK AND EMPIRICAL
STUDY
According to Payne and Frow (2006), CRM was considered processes: (1)
Strategy development; (2) Value Creation; (3) Multi-Channel Integration; (4)
Information Management; (5) Performance assessment. According to Alex et al. (2004),
the CRM implementation steps should be follow the figure 2.2 in below:
Define the target CRM
implementation
Customer Values
Solid profit
Clear CRM program and identify
personal duties during the process
The ability to search new customers
Assess the capacity of CRM
Ability of customer retention
Increasing business programs
Increasing abilities to survive
Increasing tasks (work)
Technology Innovation
Check, assess and
continue
innovating
True
Continued investment and financing
False
Figure 2 CRM implementation steps
According to Pai and Tu (2011), the main purpose of this study is to explore
the factors affecting the acceptance and use of CRM systems in distribution service
industry. Furthermore, the proposed research model was built on the basis of uniform
theory of acceptance and use of technology (UTAUT) and task-technology (TTF)
framework as well as technological and managerial theories. Besides, this study will
14
provide valuable reference for businesses which intend on implementing or upgrading
e-business systems in the future.
This research employed the UTAUT theory proposed by Venkatesh et al.
(2003), and the TTF theory, as offered by Goodhue and Thompson (1995), those served
as main basis of the study. They aim to explore and make the empirical study on causeand-effect relationship for: Performance expectancy, effort expectancy, social
expectancy, enabling factor, task character, technology character, task-technology fit, in
relations to distribution service behavior with intention of using the CRM system.
According to pre-set research purpose and the relationship of each dimension
in the research model, the authors propose 8 hypotheses in order to conduct the
empirical study. The authors use the UTAUT to explore how the ‘‘Behavioral
Intention” of CRM system will be affected by three dimensions of ‘‘Performance
Expectancy”, ‘‘Effort Expectancy” and ‘‘Social Expectancy”; as well as the influence
for ‘‘Task Character” and ‘‘Technology Character” of TTF to ‘‘Task-Technology fit”
and indirect affect to ‘‘Behavioral Intention”. Finally, the determination of whether
‘‘User Behavior” will be influenced by ‘‘Behavioral Intention” and ‘‘Enabling Factor”.
This study was set out to explore the factors affecting behavioral intention of
using CRM systems, based on the theory of UTAUT and TTF. For final results, the
following factors were detected: Whether or not the user feels the CRM system is
helpful or not in doing the job; whether or not the system is easy to use, what exactly
will be profitable conditions in the environment; whether or not each task can benefit
each other, etc. These factors affect user’s acceptance. In other words, when the
distribution service implements the CRM system which fit its industrial character, then
proper job-site education and training will be necessary. When the staff feels the system
is easy to use and can effectively handle relevant business issues, the job performance
can be naturally enhanced; one thus can achieve the pre-set purpose of the enterprise’s
decision to use the CRM system.
15
2.4.CRM MODULE IN THE PETROLEUM SECTOR COMPANY V
This part shows step by step about the processing in CRM in the petroleum
sector company V. The figure 3 will show more detail about that.
Step 1-Identify target customers
Step 2-Develop programs to target customers
Step 3 –How to measure CRM program success
Figure 3. CRM module in the petroleum sector company V
(Source: Business Department)
2.4.1. Identify target customer
2.4.1.1. Creating the database
Database has the importance; it decides marketing strategy, so any
organizations must also be interested in creating a database about the customer. But size,
system and affection of database depend on the content and technique of collecting,
gathering and organizing the database. So, what do the contents of database include?
Information about current customer and potential customer: Basic databases
such as name, address, phone, email etc. with institutional clients also add the necessary
information such as customer’s business characteristics, organizational culture, person
who has the highest decision-making power etc. this information will create favourable
condition for contact, meeting and negotiating with customer.
The transaction: Through the transactions will provide for the company about
the customer’s purchase history with the specific database as: paid price, date of deliver,
frequency of shopping, shopping timepass customers, scales each purchase.
The information about customer’s feedback with the company’s marketing
campaign: The customer’s feedback after the company launch the promotion campaigns
16
(promotions, advertisings, client conference, etc.), that can be the customer’s feedbacks
though ideas of direct marketing.
The information about the products: this is information about the products that
have been promoted in any way, where, when and feedbacks which were collected from
the client.
The descriptive information: the market segment and related analytic databases
such as information about the demographic chrematistics (ages, career, geography, etc.)
or social status style and culture of the customers...
2.4.1.2. Analysis customer’s data
The first importance step to finish a CRM solution is organization a database or
an information file. Analysis data basic on the technology and the sensitive ability of
analyst to exploit the value of data, apply the result of analysis on particular company as
follows:

Catch the information about customer: the relationship, the customer’s
behavior characteristic before starting a transaction.

Classification customer by a variety of dimensions: demographic
characteristics, business value, state behavior, the basic for strategic
planning: positioning, marketing strategy etc.

Forming strategic, investment budget for the customer relationship, the
strategic plan groups, and the group is not profitable. Thence, the Company
knows to focus on strategic customer and ignoring which customer group.

Search potential customers
The data will not have any means with business operating if they are not
exploited and analyzed. The database by depending on computer system and applying
information technology. Analysis presses is performed quickly, effectively, provide the
result in more accurate and comprehensive when applying information technology in
the process of data analysis. The figure 4 shows the good process for analysis data within
using the technology.
17
OLAP
Data sources
Data
warehouse
Decision
Support
Visualization
Data
Mining
Results
Visualization
Figure4.The analytical data model
(Source: Kimball, R. (1996))
The concept:
Data sources consist of primary data and secondary data.
 Data warehouse: Data Warehouse "is a collection of logical database,
concentrate a large amount of information to support the analysis and
making decision through analyzing OLAP data" (Kimball, 1996).
 Data mining: A process using knowledge of statistics, mathematics, and
other means of extraction techniques to identify useful information and
predict trends from large databases.
 On Line Analysis Process (OLAP): The online and multi-dimensional
analysis tools. Data was collected and make up the database, sorted and
stored logically in the data warehouse with certain models. Through the
process of mining data mining data and analysis tools online OLAP
will provide valuable information to support decision-making system.
2.4.1.3. Identify target customer
Today, businesses move business orientation from product into customer in a
selective manner. The strength investment only spends resource. So, selecting customer
rightly is an important requesting in CRM strategy (Le The Gioi and Nguyen Thanh
Liem, 2007).
Based on the database about the customers of business to analysis can be
obtained from a variety of different ways. If the type of segments based on their buying
18
behavior or attitude, the best customer segments are satisfied including conditions such
as the high acquisition rate, the best loyal attitude, most large-scale purchases, often is
the first choice and the best customer group. Other segments may depend on many other
factors.
Overall, on CRM strategy, the customer segmentation according to the criteria
doesn’t have the main position. The most effective classification strategy should be
based on business value. Business value will give us the answer if who customers bring
the most profit, average profit and profit at least. From there, marketers can devise a
strategy to maintain and develop the customers can bring their profits and reduce costs
as well as eliminate the customers are not profitable. Identify, differentiate, set goals
interact with customers at the right time with the appropriate message is extremely
important in order to improve business results (Le The Gioi and Nguyen Thanh Liem,
2007).
2.4.2. Develop programs to target customers
Today, customers have more choices. So, investing in building customer
relationships has become one of the company strategic and long-term sustainability. The
goal of the program: to provide a higher level to meet the needs of the plan compared to
competitors. The business strives to provide a superior value to customers than
competitors. This is a difficult challenge and difficult to maintain, by competition,
marketing communications, changes in demand.
In addition, the fact there is a strong relationship between covariates customer
satisfaction and profitability of the business. As a result, business executives must
constantly measure the satisfaction level and deploy the program to meet the
expectations of the target customers
The figure5 shows that the programs of CRM include: Customer service and
support; the program shall be calculated regularly to maintain the loyalty of customers;
to comply with customer requirements; develop communication programs (relationship
marketing).
19
Customer Supported
Service
Meeting individual
requirement
Customer
Customer
Relationship
Management:
Satisfaction
Communication Program
Loyalty customer
Program
Customer Appreciation
Program
Figure5. Model for programs to build customer relationships
(Source: www.crmvietnam.com)
2.4.2.1. Customer service and support
Because customers have more choices and target customers who bring back the
key value for the company, so customer service to be made the first in the company's
business activities. The design of the programs for aims to increase the customer service,
there are two types.
(1) Customer Service "reactive": As a customer service type in which the
call to direct the company and resolve customer issues as: the failure of the
product, the required explanation invoices, change orders. Examples of
these types of services: the customer care department, service hotline, the
system response letters, emails and a lot of different solutions.
(2) Customer Service "proactive": This is the type of service that the
company actively contacts customers and not waits for customers to call,
not wait until the customer requests to address the requirements or
complain to the company. This is a form of direct customer visits, creating
a link between the company and client objectives.
20
2.4.2.2. The program regularly to maintain customer loyalty
The program was held with regularity for the existing customers of the
company to show the company's appreciation for their customers. The company will
send the invitation to participate in the program as a customer encounters intimate
contact. The company expressed gratitude to customers, exchange and customer
comments. The goal of this program is to strengthen relationships, enhance customer
understanding for business, retain customers, and gather customer opinion data is
important for the company to serve longer.
2.4.2.3. Comply with the requirements of the customer
Concepts complying with the requirements of customers in addition to that
philosophy Marketing implies that creates products and services for individual
customers, not simply providing information to them. A typical example is the company
such as Levi Strauss, Nike and Mattel has built the program and system developers to
create customized products suited to the tastes of each individual customer.
2.4.2.4. Building communication program
The explosion of information technology can interfere with information that
company wants to convey to target customers. The goal of communication is
transmitted image, message of the company, information about products and services to
target customers. In the process of CRM implementation, communication plays a
crucial role in target customers understanding the value of the message that the
company wants to convey, so as to achieve the trust, loyalty and cooperation of target
customers. Research issues in developing communication programs are: What is the key
factor leading to satisfied when a company has both online and offline? What is the
difference between the services that the company in contact with clients and customers
in contact with the company? Which programs is developed by strategy to build
customer’s loyalty? How to make large number of customer’s requirements?
21
2.4.3. How to measure CRM program success
Evaluating the effect is considered to be the most important component of
CRM, shown in two aspects: one is to assess the effect that CRM brings to business
activities, two is to evaluate the current status and trends the future as a basis for the
formulation of business strategy and decided at a specific time.
As the figure6, there are two main sides that are often used when we measure
CRM program:
(1) Evaluating the inside

Value obtained from the customer, the goals completion rate.

The exchange rate, use customer information to the relevant
department.

The rate of customer acquisition and sale rate for the same object.
(2) Evaluating the outside

The exchange rate from interesting to buying products.

The confidence level of customer in company: trademark, products,
services etc.

The exchange rate in component with customer request.

The unsatisfied rate of customers who used products. (In total
customers)
EVALUATING THE
OUTSIDE
EVALUATING THE INSIDE
Ability creating
products, service...
Ability delivering
products, service...
Requirement, attitude
of customer
Ability “understand” customer
Figure6. Model for programs to evaluation CRM program
(Source: www.crmvietnam.com)
22
Chapter 3 Theories
3.1. GENERAL INTRODUCTION ABOUT VIETNAM
PETROLEUM COPORATION - REGIONAL BRANCH V
This part reveals some background information about Vietnam Petroleum
Corporation – regional branch V or Petrolimex’s branch V such as company history,
company market, organizational structure…
3.1.1. The company’s establishing and developing history
Address: 77, Le Van Hien Street, Da Nang city
Telephone:
(0511). 3822875 – 3572132 - Fax: (0511). 3822874
Fax:
[email protected]
History and development process can be divided into three main stages
(1) The stage form 1975 to 1980:
After southern area was released totally, appearing some needs for supplying
petrol to serve economics and defense in this area. Minister of Supplies signed 807/XDQD decision to establish Petroleum Company in 10/11/1975
(2) The stage from 1980 to 1993:
In 20/3/1980, 71/VT-QD decision of Supplies changed name of company from
Petroleum Ad Nang to Petroleum area 5. In this period, company is responsible for
receiving, transporting, and supplying petrol for Laos, Cambodia.
(3) The stage from 1993 to present:
31/3/1993, Ministry Trade gave decision: 350/TM-TCCB to establish stateowned enterprises “Petroleum area 5” company. In 25/2/1995, Decision: 59/QD-QD of
Petroleum Corporation consolidated subsidiary Petroleum Company area V. 08/06/1999,
Decision No. 723/QD-BTM of Commerce Enterprise changed Construction Oil
Company of Region V Commercial Corporation and transport PETROLIMEX Da
Nang Vietnam National Petroleum Corporation.
23
06/2001, Quang Ngai branch became independent company. Now, the market
of Petroleum V is in Da Nang and Quang Nam.
With these achievements in 32 years, Petroleum area 5 company has been
honored by the State Labor awarded 06 Medals of all kinds including: 01 Labor Medal
First Class, 01 War Medal and merit, flag shootout of Government, of the Vietnam
General Confederation of Labor, the Ministry of Trade, Ministry of Public security, the
Ministry of Finance, the People's Committee of Da Nang in Quang Nam province, the
provincial People's Committee of Da Nang City and other cities in the region.
3.1.2. Functions, tasks and the structure of the company (Petrolimex
Company – Branch V)
(1) Function: Receiving, transporting and satisfying demands for petroleum,
petrochemical products, gas and other materials... at Da Nang city, Quang Nam, Quang
Ngai... and Laos, Cambodia as well as reserve for government to serve production needs,
life and defense.
(2) Task: Main task of company have provide effectively according to
government policy and company. There are three tasks:
<1> Build plan as well as control business actions to satisfy demand of
customer immediately, plus perform accounting business activities to use
labor force affectively and some others such as property, materials, capital.
In addition, company has to ensure efficiency in business and do fully task
with state budget.
<2> Must abide laws, policies along with developing facilities to expand
business network.
<3> Training staff, make fully policy on salary, social insurance, safe
condition work.
(3) Organizational structure: The Petroleum Company area V is not only
follows the National business model but also the direction of self-management in
business. The management has two fields: Inventory Management, receiving and
24
reserving petrol as well as manage business activities. Thus, organizational structure has
to comply with the sector model and function, task of company. We can see more
clearly on the Figure7
DIRECTOR
VICE DIRECTOR
FOR BUSINESS
FINANCAL
ACCOUTING
DEPARTMENT
VICE DIRECTOR
FOR TECHNICAL
VICE DIRECTOR
BUSINESS
DEPARTMENT
OPERATION
DEPARTMENT
TECHNICAL
MANAGEMENT
DEPARTMENT
TOTAL
PETROLEUM
DANANG AREA
PETROL
STORES
QUANG NAM
PETROL BRANCH
Direct Relationship
Function relationship
Figure7 Organizational structure of company
(Sources: www.petrolimex.com.vn)
Review: Structure of the company was organized under the governance
structure functions directly. Departments have related function together to advise, help
director, who will give decisions in the scope of their functions. Structure of the
company is relatively simple, so it has some advantages such as save management costs.
In addition, the information from the top down or from the bottom up is always accurate
and fast
25
3.2. THE COMPANY RESOURCES
3.2.1. The Usage of human resources
Total number of employees has decreased slightly in many years. Labor rate of
primary and short- time are 50 % per total employees and they will increase. The table2
shows labor structure in each department of the company in 2011 includes:
Table2. Human resource structure of company in 2011
Number of employees
UNIT
Number
Rate (%)
I. Office
71
16.43
Board of director
5
1.18
CMNV department
66
15.28
Sale department
12
2.77
Accounting department
11
2.54
Management technical department
26
6.02
Organization department
19
4.4
II. Branches
358
82.87
1.Total petroleum Da Nang area
131
30.32
Warehouse department
23
5.32
Branch of Warehouse
108
25
2. Quang Nam area
131
30.32
Branch of department
19
4.4
25 store of company
113
26.16
Da Nang petrol store
96
22.22
432
100.00
TOTAL
(Source: Business department)
26
The number of indirect employees at the company office, branch is about 25
percent, direct labor is 75%. In Addition, labor ratio in the depended units is 83.45%
and office is 16.55%. This structure totally reasonable because company is operating in
trades and services filed, so company need more sale staff (about 50% labor force)
In the future, company should spend more time for sale staff, and train them
requirements of customer service. Table3 describes the Structure the proportion of
workers in company
Table3.Structure the proportion of workers in company
In 2009
In 2010
In 2011
Norm
Number
(%)
Number
(%)
Number
(%)
Total worker
445
100
427
100
432
100
Male
322
72.36
315
73.77
320
74.07
Female
123
27.64
112
26.26
112
25.93
Direct Worker
245
55.06
231
55.1
237
54.86
Indirect Worker
200
44.94
196
45.9
195
45.14
University
130
29.21
128
29.98
131
30.32
Intermediate
70
15.73
68
15.93
70
16.20
High school
245
55.06
231
51.1
231
53.48
Structure
Qualification
(Sources: the report of Human Resources Management Department, Dec 2011)
The male proportion is majority in the labor structure of the Company and it’s
always stable in pass year (about 73.4% with male and 26.61% with female). Indirect
labor force is high and has keep for many years. This structure is surely suitable for
commercial business kind. Qualified labor has steadily increased and stable over the
years. Intermediate labor increases and workers with university degrees increased.
27
3.2.2. The Financial situation of the company
In during four recently years, company always get the high sales growth even
though the macro-economic in Vietnam have some difficult, especially in the 2008 and
2009. Table4 reveals the status of financial of the company by the income statement of
the Company
Table4. Analyze the income statement of the Company
(Unit: Million Vnd)
Block analysis
ITEMS
Net sale
Cost of sale
Gross
margin
2008
2009
2010
Index analysis
2011
2008
2009
2010
2011
09/08
10/09
11/10
3,414,4
4,093,7
6,765,3
7,326,5
100.
100.0
100.0
100.0
119.8
165.2
108.2
47
07
58
40
00
0
0
0
9
6
9
3,340,2
4,015,6
6,679,9
7,227,5
97.8
106.8
62
18
3
98.65
163.1
43
98.74
117.6
71
98.09
1
8
3
74,176
78,064
85,396
99,022
2.17
1.91
1.26
1.35
2.29
2.09
1.46
70,682
73,582
78,353
89,252
2.07
1.80
1.16
1.22
2.16
1.91
1.32
3,494
6,164
8,311
9,770
0.10
0.15
0.12
0.13
0.18
0.20
0.14
978
1,726
2,327
2,443
0.03
0.04
0.03
0.03
0.05
0.06
0.04
2,516
4,438
5,984
7,328
0.07
0.11
0.09
0.10
0.13
0.15
0.11
Advertising
and
promotional
expenses
Profit from
recurring
operation
Tax expense
(28%)
Profit after
tax
(Source: Finance Accounting Department)
28
According to Table4, revenue has increased over the years. However, cost of
sale also increases. Therefore, gross profit is low. Net Profit also increases over the
years. Although cost of company increase over the years, income increase more strongly
than cost. Hence, gross profit also increases. Net profit up shows that the company is on
the right track and efficient investment. Table5 provides some information about the
financial parameters of the company from 2008 to 2011.
29
Table5. Financial parameters of company
Financial parameters
2008
2009
2010
2011
Liquidity ratio
1.12
1.09
1.07
1.12
Quick ratio
0.71
0.60
0.54
0.54
Debt per Own capital ratio
3.11
4.46
5.61
3.93
Debt per Asset ratio
0.76
0.82
0.85
0.80
Gross profit margin
0.02
0.02
0.01
0.01
Net profit margin
0.001
0.001
0.001
0.001
ROA
0.03
0.06
0.08
0.07
ROE
0.01
0.01
0.01
0.01
Asset turnover ratio
10.19
9.74
13.14
13.79
Payment capability Ratio
Debt ratio
Profitability parameter
(Source: Analysis of author)

Payment capability Ratio
Liquidity ratio and Quick ratio of Company are too high, however they have a
quite reduce tendency. That show company is maintaining inventory and current asset
with low transferable. Therefore, that make liquidity ratio reduce.

Debt ratio
The debt ratio has an annual progressive tendency. The reason is that company
use a high loan capital (Over 80% in total capital). Last year, petroleum price is
continued increase, that make the business of company has some problems. The high
30
debt ratio is a big worried. Consequently, in the next year, company needs to find
methods to reduce loan quantity to decrease the company risk.

Profitability ratio
Gross profit margin and Net profit margin are low. The reason is high company
cost. On the other hand, petroleum is the industry which has a government protection,
so bring to the situation with high input cost while price is not correlative with market.
3.3. THE CUSTOMER RELATIONSHIP MANAGEMENT AT
VIETNAM PETROLEUM COPORATION - REGIONAL
BRANCH V
3.3.1. Marketing activities at the company
3.3.1.1. The Product Policy
Products of company are the essential products and they can’t be replaced.
These products originated from abroad, mainly were imported from Russia, China,
Thailand... The company are selling in all kinds of gasoline such as 90, 92, 95 unleaded,
diesel, kerosene. Meanwhile, Company is also selling products such as gas, ZA1, CT1,
lubricants... Company always tries to create their images for customers via Petrolimex
brand. Company's products ensure the quality, quantity and delivery time. Company's
products always meet demands immediately of market and always are trusted by
consumers.
3.3.1.2. Price policy
Gasoline is a product which is protected and controlled by the Government.
The Government controls price (ceiling price).
For organizations: The price for them is less than a ceiling price due to
(Formula)
Price = Imported price + Cost + Profit
31
To encourage the seller, Company applied the flexibility price policy in which
they use a discount through business objects. We can see more detail about the Price
policy of company.
Table6. Price policy of company
70
Yield / Month
30-49 m3
50-79 m3
90
80-129 m3
110
> 130 m3
120
The way company use to charge a retail price: the basic price includes these
factors:
The basic price = [CIF price (+) Import tax (+)special consumption tax] (x)
Rates of exchange (+) business expenses (+) Stabilization Fund (+) Profit before tax (+)
Value Added tax (+) Petrol fee (+) the taxes, fees and other fee;
In which:
CIF price is the world price of oil (+) insurance fee (+) Charges for
transportation to the port of Vietnam.
Exchange rate is the average rate of the commercial banks
Import tax, special consumption tax, value added tax, Petrol fee, taxes, fees and
other deductions
Business expenses, Stabilization Fund are belonging to the Ministry of Finance.
(Source: Decree No. 84/2011/ND-CP of October 15, 2011 of the Government
on Petroleum, Chapter I, Article 3, paragraph 9 "base price").
32
3.3.1.3. Promotions activities
They have very less ways to promote. They are affected by the Vietnam
National Petroleum Corporation’s marketing programs such as store, logo… suitable
with Petrolimex brand.
Their advertising activities: Introducing the information about new products,
through the technical parameters of the product, and price change notifications,
introducing the necessary services etc. Besides, this company promotes their products:
The programs of cooperation with customers, visiting and giving gift to customers,
posters on highway

For sales promotion activities: The Company applies the form of rewards,
discounts, the cost of transportation, allowing deferred and rotation debt etc.
This is the strength of the Company compared with other competitors. The
company also regularly organizes conferences, seminars, the ceremonies
etc, aiming at erasing propaganda of the company and establish a good
relationship with customers.

Personal selling: they introduce products through professional staff .They
have fully knowledge about the products and communication skills to bring
products and brands to potential customers, gain a positive response from
our customers: Customer visits, call the Public company, orders etc.

Exhibitions: The company introduces products through a exhibitions to
gain more customers

Identify budget: The method of determining the budget for the media
program is belong to the first meeting board of directors. Media budget for
promoting the annual average of 600 million
3.3.1.4. Dealing with the customers
The company is organized in three ways: product, area and kind of customers.
This method of organization policy based on the Company's products and customer
characteristics. The products are divided into three kinds: Gasoline, Diesel Oil, and Gas.
33
The Company's markets include cities: Da Nang City and Quang Nam. The company
also divides customers by customer’s characteristics: directly sales, distribution
customers, and production customers. The figure8 will show more detail about the
customer network management of the company.
Vice president of sale department
Supervisor
Da Nang region
Supervisor a group
directly customers
Supervisor
QuangNam region
Marketer
Marketer
Figure8. Customer network management
About Oil and Gas products, there are a large number of customers and largescale purchase. Transactions with customers occur outside the Company. A professional
customer management is a distributor in Da Nang and Quang Nam province. Under the
management of the customer is the marketer. The employee is responsible for surveying
market, trading and working directly with customers, detecting potential customers
through meetings and other support tools. Market staff can also deliver goods at
destination customer.
The figure9 provides the information about the transaction chart of company.
The manager will work directly with big customers, trading trend and distribution of
products of the Company: drag customer to the company, through a system of over 60
retail stores located in the city of Da Nang and Quang Nam province.
34
Agents
Petrolimex
Company
region V
Customers
General agents
and agents
Retail
Figure9. Transaction chart of company
Direct dealing channel:
Retail stores and branch system.
Selling in store for companies as fuel for production and business activities.
Currently, the company has about 129 customers produce direct consumption
products, most customers buy products to serve the production process in the factory,
enterprises, construction sites, special highlights of this type of customer is buying
highly seasonal. The number of the company's retail store is 62 with 24 stores in Da
Nang and 38 stores in Quang Nam.
Intermediate transactions channel
Agent: This is the transaction through the retailer on Da Nang and Quang Nam,
with a form of agency product consumption ,so the relationship between agents and
companies linked through agency contracts signed between the two parties for the
provision and consumption (according to the Ministry of Commerce). Currently, the
company has 60 retail outlets.
General agents, agents and retail: The company sell products for general
agent where sell to affiliated agents, retail agents (sell petrol for direct customer). With
this transaction, Company signed a contract for the General Agent, and retailers
Contents of the contract give the information about the sales, the buyer and the
provisions on product transactions, single price, and method of delivery, credit terms,
payment method and the validity of the contract. However, the details of contracts are
different from types of customers.
35
Dealing with customers:
The figure10 shows that Marketing and Communications are used to change
the client's awareness so that the last goal is customers buy the products
Customers recognize Petroleum Company region V
Offers
Receive orders
After sale
Figure10 Dealing with customer
Making customers know about Petroleum Company brand: Company want
to make customers aware about their product and their brand, their reputation, to reach
this goal, the company uses directly marketing communication tools as methods such as:
use the banner brand image, petroleum products on the Highway, directly in retail store
systems, print and posts publications, catalogs to customer’s agents, potential customers.
Beside it, the company also increased awareness of customers through distributors:
Make the agents know that they also have great benefit when there are more guests
know and use the company's petroleum products, the understanding of this system is
due to the communication of the company's marketing program from agents to
customers.
Offers: Market staff must have knowledge about the products offered for sale,
some of the necessary techniques related to the products, along with technical support
tools such as catalogs, product samples, price, and communication skills. Customer will
understand specific about the product and company via those channel. Also during this
36
time, and prices and discount will be negotiated between the company and customers.
The more potential customers are the more great prices and discount is
Receive orders: This is the target company's transactions in order to achieve
orders. It’s depended on old customers or first time customer; company has so many
ways to meet requirements. If they are old customers, the procedures to meet customer
orders will be lighter and faster. With the old contract, customers simply order through
fax or phone and make adjustments necessary. First time customer, the company must
meet the orders through the purchase contract, this is a source form the basis of the
company's customer data.
After sale: The company continues hold the relationship with customers after
sale. For distributors, this is an important factor to encourage their support. That is a
visit, call to know about the consumption of intermediate products, introduce new
products. There is also the purpose of this such as: training sales skills, knowledge
about product, and technical support for distributors.
The program supporting regular maintenance of Groups of customers:
-
For agents, general agents group (A, GA)
The table7 describes the policy for company clients
Table7. For agents, general agents group (A, GA)
Group
Ranking
Quantity
Policy for clients
- Remuneration for the agent on the market is 100-200
VND/ liter, pool borrowing,
Equipment investment support
Agent,
general
1 and 2
agent
- 5 Gas
- 25 As
(paint, repairing the
pump, signs, signboard, technical consultancy, staff
training, pump testing
- Annual conference and gifts for customers
- Priority for delivery vehicles, payment duration: 7-10
days.
3
35 As
- Remuneration for the agent on the market is 70-100
37
VND/ liter, pool borrowing,
Equipment investment support
(paint, repairing the
pump, signs, signboard, technical consultancy, staff
training, pump testing
- Priority for delivery vehicles, payment duration: 5- 7
days.
- For production customer group
The table8 reveals the customer production in the group customer
Table8. Customer production customer group
Group
Ranking
Quantity
Policy for clients
- Decreasing prices and discounting in case of bulk
1 and 2
60
buying
- Payment duration: 30 days.
Customer
- Transportation support and pool borrowing
production
- Decreasing prices and discounting in case of bulk
3 and 4
69
buying - Payment term: 20 days
- Transportation support and pool borrowing
- For Groups of direct consumers
The Company often apply ‘direct present’ program at the store when customers
buy goods.
38
3.3.2. CRM at the company
3.3.2.1. The goal of CRM programs at the company recently
The CRM programs of company have been done recently. There are the
following objectives:
Retaining old customers, mostly business organizations, businesses, companies
and dealers because these are the customers who buying large quantity, bringing a big
revenue for the company as well as increase attraction with new customers and turn
them into loyal customers of company.
Maintaining the market share of the Company together with bringing higher
satisfaction for customers in their time dealing with the company.
Creating the good viral marketing from former clients, contributing to enhance
the reputation and position of the company on the market to create tools to compete
with competitors in the same area.
3.3.2.2. The situation of CRM in the company
a. Constructing and managing customer database
It starts from a small production unit, just a few types of goods. Nowadays, the
size of the company is growing and expanding about the potential, products and markets.
Therefore, the complexity of business processes and the level of competition are
increasing. Meanwhile, the development of information technology requires any
business that cannot stand out. These factors are sufficient to say that the management
methods and manual business is no longer appropriate. It must be replaced by new
business models. However the replacement leads to disruption of the old business
processes, a very large impact on the another activities of the company and requiring
big investment budget. Therefore, the Company is maintaining two traditional business
methods and new business methods simultaneously. Customer data should be stored and
management based on Information Technology: Software and Internet, Intranet.
The source of customer data is imported from the purchase contract, agent
contract. The voucher bill, purchase receipt, from market staff etc. The software is
39
divided into several modules; each module is a separate function and is managed by a
person with rights and responsibilities in the field of it.
40
The figure11 describes about the management and accounting software system:
Management and Accounting Software
Warehouse
Finished
product
Debts
Cost
Salary
General
Accounting
Figure11 Management and Accounting software system
(Sources: Accounting department)
Warehouse: Storage and allows to access and enter information about
exporting – importing products, product suppliers and the company's debts for suppliers.
Finished product: Managing product sales and consumers. Allowed to enter,
store, and retrieve customer information through the module update documents and lists
of customers. Section updated documents allows users to design, update, monitor, and
print documents from the customer's receipt. The customer receipt manage customers
who have been dealing with the company according to the information content of the
product sold, quantity, unit price, revenue per bill. List of customers manage all
customer lists that purchased of the company. Customer list provides information about
the client as the customer code, tax identification number, account number, address,
phone number, customer name and organization that show the field of activity of the
customer organization.
Debt: allowing Company to manage and monitor customer transactions and
payments in a transaction time. With debt management functions of the software, users
see the value of orders (revenue) of customers that is how much, how much paid and
owed, the function allows company to print records verification of the debt and sent to
the client, payment monitoring and alarm levels (exceeding the credit term). The
application of debt management function allows the Company to perform the following
tasks:
41
+ The customer contact information, customer field activities.
+ The revenue of each client.
+ The customer's debt.
+ The number of transactions and transaction time.
+ Products and product characteristics of transactions, the unit price offered.
+ Printing the contract, the report, written certification and documents,
customer receipt.
b. Managing, analyzing customer information
Currently, the company does not have a department, which in charge of the
establishment or management of customer information. The collection and processing
of general information are made by the employees in the sale and accounting
department. They are the ones who understand the marketing, experienced but they lack
support technology and inappropriate way, so the information obtained was very
discrete, there are no link between internal departments in the company.
They only store in the customer profile, some information about your name,
age, address, income, consumption and public debt. Customer information was managed
at a basic level, statistical work mainly, debt monitoring. The staff in charge of
consumer, business, accounting, they haven’t stored the information, happenings, and
situations of appointment with customers.
The company hasn’t built a complete database to store information about
customers. Existing customer database only manages customer transaction information,
serving activities primarily for the accounting department.
In general, construction and the customer information management of company
are not concerned adequately while building relationships with customer is extremely
important.
c. Customer classification at the company
42
Basing on data collected mainly from the accounting department and the sales
department. Sales of Petroleum Company area V divide customers of the company into
three main groups: (This work is mainly based on the consumption purposes of the plan)
- Group of the general agents and agents.
- Group of production customer.
- Group of directly consumer customers.
Companies based on 4 criterions: sales (revenue), the density of purchase,
payment capability, customer transaction time as a basis for ranking customers:
• For group of general agents and agents: Classification into three
categories.
The table9 shows four groups of general agents and agents of the company.
Table9 For group of general agents and agents
Criterion
Category 1
Category 2
Category 3
Yield (m3/ month)
Over 500
From 100 – 500
Less than 100
Purchase density
Regular
Regular
Not regular
Payment capability
High
Medium
Low
Transaction time
Over 3 years
1-3 years
, << 1 year
• For group of production customer: Classification into 4 categories.
The table10 shows for group of production customer of the company
Table10. For group of production customer
Criterion
Category 1
Category 2
Category 3
Category 4
Yield (m3/ month)
Over 500
From 200 - 500
From 100 - Less than 100
200
Purchase density
Regular
Regular
43
Regular
Not regular
Payment capability
High
High
Medium
Low
Transaction time
Over 3 years
1-3 years
1-3 years
Less than a year
General agent, agent: This group of customers buys the company's products
mainly to redistribute to other intermediaries for distributing and selling directly to
consumers. This group accounts for 50% of the Company's revenue.
Customer’s production: This group of customers buys the Company's products
mainly to serve the demand of production and accounts for about 15% of company’s
revenue. According to the current data of the company have 129 customers in this group
(see Appendix 3). This group mainly focuses on the quality of the product; their main
goods are Diesel, Kerosene. Demand of this group are often larger and less variation So
the company is always interested and have a policy to satisfy our customers in order to
retain these customers and maximize profits.
Consumer customers directly: This group buy products of the company to
serve the needs of individual and directly purchase products at the retail store system ,
there are 62 store , 24 store in Da Nang and 38 store in Quang Nam. (See Appendix 2).
d. The tools used to interact with customers
The ways that the company is mainly used to provide information and
interaction for customers with 3 main ways:
 Report directly to the customer.
 Tel.
 Fax.
The company also used the form as: Direct contact, Email due to method of
dealing with customers by the ways above becomes a habit and extended over the years.
According to company sales department, frequency of interaction with
customers through report directly accounted for 45%, 30% by phone and fax accounted
for nearly 20% of the company's transactions with customers.
44
Customer information generally responds to telephone companies accounted
for 57%, 28% by fax, direct notify 15%. This is of course because the company's
customers are mostly agents and general agents, their staff is limited so interacting by
phone and fax can help them resolve problems quickly.
Thus, the current channel to interact with customers of the company is limited,
mainly done through the contact channels such as direct contact, fax, phone, etc. But
technology interaction channels such as Web, mail, e-commerce has not been focused
although infrastructure of company's investment technology is quite good and sufficient
for deployment.
The customer interaction channel is not effective in promoting the company's
image with customers in order to attract potential customers, provide product
information, the company information to customers, showing what customer want,
answering questions for customers.
3.3.2.3. Evaluating CRM activities of the Company at present
a. The relationship between customers and The Company
Along with the efforts of all officers and employees of the Company in
customer service together with customer relations policies which has been conducted by
the Company in recent years has brought about positive business results. This is shown
in the sustainable number of customers dealing with the Company. In recent years, the
sales staff has been trying to improve customer satisfaction.
To know more about customer satisfaction of the Company, we conduct
practical surveys. We distributed 160 notes and received 100% answered notes. After
analysis, it showed that:
45
Figure12 Customer satisfaction of the Company
There are currently 7.5% of customers that are quite satisfied with the
company's discount policy, 83.8% of customers are satisfied and 8.8% are dissatisfied.
Thanks to the company‘s higher discount rather than the competitor, the customer
satisfaction is high. Discount policy is satisfied by agents, general agent’s customers,
because they always maintain large. The status of 8.8% of customers are not unsatisfied
is classified as ranking 3 and 4.
11.9% of customers are satisfied with complaint reception and resolution.
56.2% of the customers are not satisfied and 25% are very unsatisfied. The cause of this
that: the company does not have a clear policy between. Groups of clients the general
46
agents and agents, receive a higher commission, while the stores don’t. Remuneration is
important to the business of the general agencies, agents, shops. The unfair commission
is the cause of fluctuations in petrol business, which leads to conflicts between the
company and the store. In other way, general agents, agents and stores often compete
for customers in the same market. This causes great conflict between general agents,
and agents In addition, the general agents often get large customers and customers
produce of company, which causes conflicts between the company and general agents.
Registration procedures of purchase contract 17.5% of customers are quite
satisfied, 56.9% customer are satisfied and 25.6% are not satisfied. This is due to the
variable price of petroleum products and the policies of the company's stock control.
Especially, the professionalism of the staff is not appreciated up to 24.4% of
the customer are unsatisfied, 3.8% are very dissatisfied. This proves that those staff
directly dealing with customers is limited to customer service
The current customer service of the Petrol V sector company, customer
satisfaction is not high, especially in solving complaints and delivery. In the future, the
company needs to improve these issues in order to satisfy the needs of customers and to
create credibility of the company.
b. Human resource and technology in CRM activities of the company
• Human
Currently, the company do not have the staff who are in charge of customer
information collection and storing; the majority of information is based on the. Staff's
data of consumption and sale The Company has a sustainable workforce that has a lot of
years' seniority. These are advantages of the company. However, the staff is limited to
acquiring new technology. This will cause difficulties in the application of new
technologies in management. Table 3.10 shows the proportion of staff in sales
department structure from 2009 to 2011.
47
Table11 The proportion of staff in sales department structure
Year 2009
Year 2010
Year 2011
Criterion
Quality
(%)
Quality
(%)
Quality
(%)
Total employees
8
100
10
100
12
100
Male
4
50
6
60
8
66,7
Female
4
50
4
40
4
33,3
University
6
75
7
70
9
75
College
2
25
3
30
3
25
Level
The proportion of men dominates the employment structure of the business and
this proportion is relatively stable over the years. The percentage of male staff in sales
department structure is high and sustainable over many years. The standard of labors
has increased steadily and stably over the years. The number of Workers with bachelor
degrees have increased shows the relevance in the management structure of the
company: enhance the capacity staff. The company has focused on the work of Business
department as well as other departments that. Deal with the customers.
• Technology
The media is used to contact with customers: email, phone, fax.... However the
company works, and contacts with customers mainly via phone, fax machine. Currently,
there are only some simple soft-wares which are used to manage customers information
such as excel, accounting software. There is little investment in modern technology. The
company is equipped with computer systems that are connected with LAN connection
in the company‘s departments and Broadband line connecting branch.
The table12 shows Company’s currently available Informatics equipment
48
Table12 Company’s currently available Informatics equipment
No
Equipment
Quantity
Description
150
item/person
Computer
1
Personal Computer (PC)
2
Server
4
Network transmission
1
Quang Nam Branch – Company’s office- CH
2
Megawan 2 Mbps
2
Internal company’s office
1
Megawan 1Mbps
According to figure13 from Company’s web system, in order to transmit
information, data between directly under agencies, the company will:
Connect those computers that are at the same location via LAN
Connect directly under agencies with other departments of the company via
Megawan 1Mbps (24/24) Network transmission
Connect Quang Nam with the company via Megawan 1Mbps (24/24)
Network transmission
Individual PC
Store’s PC
Individual PC
Trade Department’s PC
Accounting Department’s PC
PCPC
PCPC
Company’s
Server
Server
Q.Nam Branch
Individual
PC
PCPC
Store’s PC
Sale’s PC
Figure13 Company’s web system
49
Warehouse’s
PC
3.3.2.4. Advantages and disadvantages of (CRM) of the company
Overall, Petrol V Branch has paid attention to customer relationship
management. However, the methods that the company has applied are not diverse and
comprehensive; unsuitable with the processes of customer relationship management. As
a result, the outcomes are not effective and the customers’ satisfaction is not high. These
are some characteristics of the company’s current CRM activities.
a. Advantages

The company have classified customers and enforced policies for each
group of customers

The company supply a variety of products, meeting the customers’
demands

The policy of customer service have been introduced

The company’s board of directors take a lot of care of CRM
b. Disadvantages

Customers are simply classified. The data of customers is not updated and
classified regularly, the connection between internal departments are loose.
The channels of customers’ service are limited.

New customers are rarely considered. The activities of identifying target
customers are not good and underestimated. The surveys on customers’
demands and expectations are few. There have been no reports on
customers’ complaints and the hardship of CRM.

There is no specialized department of Marketing that performs CRM,
which has caused overlapping. As a result, CRM is slowly conducted. The
cultures directly aimed at the customers have not been set up yet.
Being a governmental company, supported by the State makes it hard for the
company to relate to the outside customers. The company plays a passive role in
searching and meeting the customers’ demands. To be clear, the company does not pay
much attention to these activities due to their monopolistic thinking.
50
To some extent, the company’s CRM activities have affected some groups of
customers positively. However, these activities are not enough to make the customers
loyal to the company in order to gain long-term profits for the company. As a result, it’s
time the company came up with the best solutions to CRM which play a decisive part in
the operation of the company.
3.4. CONCLUSION OF CHAPTER 3
In conclusion, the analysis shows that the company meets the requirements of
equipment, workforce, finance and customers for sustainable development. It’s
important that the company conduct the CRM strongly and professionally in order to
improve the competitiveness, make use and keep the customers. Thanks to these, the
company can maintain sustainable development and gain profits in the coming time.
51
Chapter 4 Empirical study
4.1. PREMISES FOR CONDUCTING SOLUTIONS
4.1.1. Purposes and the orientations of the company
The company is to support the demand of the economic and national security in
oil/petrol and its product; in order to make economic and society efficiency, generate
profit, contribute to national budget and improve employee’s life.
Short-term goals:

Get a larger market share comparing to previous years

Increase the direct sales ratio up to 50% and decrease the ratio of
merchandise’s sales

Buildup 15 more stores in Da Nang till 2015

Improve the customer service
Long-term goals:

Expand the market share, with a yearly revenue counts at 70%

Improve company competitiveness

Increase the retail sales ratio up to 40% comparing to company sales

Develop the management system follow the ISO 9000 and ISO 14000

Complete the port and warehouse system based on city’s planning
Business strategy for the coming years:
Expand and develop the company as one of the top companies in supplying
oil/petrol at DaNang and in Coach Middle region. To be ensure to provide gas/petrol for
the economics and national security.

Maintain a market share of 70% in the region.
52

Invest to develop and reconstruct the port and warehouse system based on
city’s planning. Focus on expand the retail sales network through
upgrading stores.

Strengthen the sale management; keep the good relationship with
customer, in order to have customer’s trust and credibility to the company.

During these years, the transportation cost and loss during oil/petrol
imports/exports through sea ships has increased. Therefore, the company
has a plan to reduce cost, and sell products at reasonable price, in order to
increase competitiveness and generate profit.

Develop the marketing, promotion program to attract customers.
Advertise to build up the company image and help customers to
distinguish products of the company to our competitors.

Define a reasonable public debt to increase the customer sales ability.

Reconstruct employee system, increase productivity, do specialization. Do
training to improve abilities/skills for company’s employees.

Do specials programs to create market competitiveness. Research and
develop new technology like oil/petrol automatic selling machine. This
technology has been used widely in the world.
4.1.2. Directions for the customer relationship management in the
coming time
Objects: Improving the customer relationship management will increase the
ability to know the customer’s needs, maximize interaction value to customer, in order
to attract new customers and maintain the loyalty of the old customers, increase
company competitiveness.
Details:

Develop company core value as customer-oriented, to bring satisfaction to
customers.

Build the effective customer database.
53

Complete customer’s classification.

Evaluate the company customer service through customer satisfaction.

Diversify customer’s interaction channel.

Serve a group of customers based on their needs.

Establish the department to responsible for CRM.
4.1.3. Factors affecting the customer relationship management activities
of the company
4.1.3.1. External factor
a. Technology
The development of science and technology has affected to oil/petroleum
industry, like transportation, preservation, etc. or using internet to look for maker
information, do transaction, etc. These achievements has opened the door for
oil/petroleum industry to modernization, automation in receiving, shipping, storage,
sales, etc. thus can increase productivity, reduce cost and improve business efficiency.
The development of software industry, leading to the competitiveness between
companies in this industry helps companies to get business software with high features,
low cost.
b. Society
Vietnam population currently is about 80millions, which is the huge potential
in labor for national development. Vietnamese is classified as young group, as the labor
force (age 15-35) counts as 65% in total. The increase in population, accompanying
with the demand for economic development, transportation, entertainment, etc. will
increase the demand for using oil/petrol products. Therefore, companies have to put
effort to meet the customer’s demand as best as possible.
c. Legal and political
Oil/petrol is the essential goods; belong to the group of basic materials for
production and consumption. It has a strong impact to the whole economy, and is
ultimate goods of any nation. Therefore, the government always strictly manages the
54
oil/petroleum industry. There are many Decisions and Decrees in Petroleum business
were issued: Decision 187 (2003), Decree 84/2009/ND-CP (15/12/2009) were issued by
the Government; Decision 1505, Decision 656 were issued by Ministry of Trade and
Industry. The promulgation of Decree 84 affected Petroleum Company Region V. In the
near future, competitiveness will be increase, as there are many private as well as
foreign companies are willing to enter to this potential market.
4.1.3.2. Internal factors
a. Customer: Customers of the company is classified into 4 main groups:
 Chief agents, agents: This groups counts up to 50% in company sales.
Currently, there are 5 chief agents, which have a wide system of stores,
at least 20 stores. Besides that, there are 10 agents which belong
directly to the company
 Customers as producers: This group purchase product for production.
Currently, there are 129 customers belong to this group. They mainly
focus on quality of product, and their main products are diesel,
kerosene. The demand of this group is large and consistent.
 Customers as consumers: This is a group which is largest in quantity,
and distributes over the company market. They mainly buy company
product at retailers
 Foreign customers: They are Lao, Cambodia. They purchase product to
meet their national demand.
Currently, the company is no longer the monopoly, as the market is now
more competitively because of the appearance of many competitors to provide more
choices to customers. Thus, the company should have policies to gain old customers
loyalty and attract new customers.
b. Industrial Competitors: Currently, there are 5 competitors of “Petroleum
Company Region V” in the Middle region:
“Military Petroleum Company”: This is the company main competitor,
which has about 15% of market share. This company has strongly invested
55
in the retail system to compete with “Petroleum Company Region V”.
Besides that, this company has also invested in storage and tank system and
it is the second company which has this big system after “Petroleum
Company Region V”
“Petroleum Technique and Service Company”: PTSC has constructed the
wide fuel and oil/petroleum product business network, which includes 21
gas stations and distributed network in North provinces like HaiPhong, Nam
Dinh, Thai Binh and some Middle provinces like QuangNgai and Da Nang.
They mainly focus on buy/sell oil/petroleum product as retailers, as well as
provide fuel to industrial parks and companies.
“PetecPetroleum Company”: import/export and distributed in the local
market. PETEC owns 3 petroleum storages, which has capability up to 150k
m3. They provide petroleum to Vietnamese as well as foreign customers.
PETEC has about 13% of domestic market share.
“Airline Petroleum Company”: “Viet Nam‘s Airline Petroleum Company”
is the supplier for airlines in Vietnam airports. Fuel has been imported from
large foreign market like: Singapore, China, etc. In order to meet the criteria
in fuel quality, the company has invested to construct 3 experimental
laboratories which meet the international standard like ISO/IEC 17025:2005,
with 11 tests.
c. Potential Competitors
Dung Quat Oil Refinery: It went into operation in 2009. It is a first oil
refinery in our country with the huge developing potential; which is located
in Dung Quat-QuangNgai Industrial Park. In the near future, it will become
a dangerous competitor to our company. Its advantage is having an
independent good supply, and it will develop its own retail network, as well
as supply good to other petroleum companies.
On the other hand, the company have to compete with strong competitors
from abroad: PETRONAS (Malaysia), Petroleum (Indonesia), Petro
56
Thailand, etc. In addition, famous petroleum companies in the world
including Shell, Esso, BP, etc., also have strategies to enter Vietnam
petroleum market, once the policies changes (as expected in the near future).
d. Supplier:
Currently, the company supply is mainly from “Vietnam Petroleum
Corporation”, which imports petroleum from big port around the world, as
company registered plan. In addition, the company also import directly from
Arab, Singapore, Kuwait, China (gas90), Russia (Jet A1), Thailand
(kerosene), 80% of company product is made in abroad, while the rest is
either from domestic company whose has foreign supply, or produce
ourselves. In general, company suppliers supply high quality and consistent
product with the reasonable prices.
4.2. OVERALL SOLUTION FOR CUSTOMER
RELATIONSHIP MANAGEMENT VIETNAM PETROLEUM
COPORATION - REGIONAL BRANCH V
4.2.1. The process of conducting customer relationship management to
the year 2015 of the company.
The figure14 show the Roadmap for implementation of CRM from now to
2015 of the
Company
Costs
CRM Automation
CRM Roadmap
CRM present
Time
Figure14
Roadmap for implementation of CRM from now to 2015 of the Company
57
a. CRM Roadmap
Description: a type of CRM that works on the platform of IT where all
customer data is collected, built into a database and is managed by a CRM software
application. This strategy will be administered by the CRM committee. We can
summarize the CRM Roadmap as follows:
Customer data is collected and managed by a software application.
The CRM committee will supervise all activities on CRM, fully cooperate with
other parts departments in the company and make the customers the center of all
activities.

Identify and maintain valuable customers for the Company.

Develop marketing and communication programs related to the plan.

Every based on the basis of services serves each customer in a different
way.
b. The goal of CRM Roadmap

Increase customer loyalty.

Creating value for customers through products and services supplied

Creating competitive advantages in the elements of customer care services
c. Automatic CRM: CRM program which its operations are automated, from
marketing programs, sales force automation, technical service and customer support, to
automatically providing services. At a high level, CRM activities is more complete with
the active customer contacts, customer service process is mostly automated. Customers
use various services and are served at a high level, high fidelity with the detailed
classification of customers based on potential value, current value and loyalty. This is
the ultimate goal of CRM in most companies. Its characteristic is the loyalty and
commitment of the plan and achieving the number one brand in all aspects. To be able
to transform the current CRM the regional Petroleum Company to the targeted CRM
program we need to implement the following solution.
58
4.2.2. The overall solutions for customer relationship management at
the company
4.2.2.1. The data collection
a. Collect data from secondary (Source available at the Company):
Basic information (general information about the clients).
Information relational history: history of customer relations for the company
(store all the information about the relationship between the customer and the company
in the past).
Financial information: Storage financial statements, analysis of financial
statements of the client. Customers of the regional Petroleum Company V are mostly
large customers such as the general agent 2.1%, 26.2% agents, customers accounting for
37.8%. However, the company's customers buy in bulk 65% of customers. Customers
the regional Petroleum Company V is classified into the following three main groups:
b. Collect data from primary: Collect information to help identify personal
information about individual customers, the desire and their interests. Collect
information plays an important role in customer relationship management process.
The data collection phase was performed under the direct supervision of the
researcher. Workshop was conducted for the participators in this research, to explain the
purposes of the questionnaire and its objectives, how to distribute the questionnaire, and
how to encourage the customers to fill in the required data. The employees (volunteers)
distributed and collected the questionnaires. It was noticed that there was no duplication
occurred because of the distribution phase, as it was performed according to prepared
customers list and officially reviewed database produced for this purpose.
4.2.2.2. Questionnaire design
A questionnaire of 16 questions was designed that is based on the results of
qualitative studies and the literature (see Appendix 1).
The first stage conducted is to explore basic features and evaluate the
customer satisfaction in the products and service of the Vietnam Petroleum
Corporation – regional branch V to set up the formal questionnaire used in primary
59
study. The second stage was as formal study, in which author conducted to deliver the
complete questionnaire to examined sample, and quantitative method is employed to
analyze and report the findings.
Questionnaire is divided into 4main parts: first part collect customer
information such as which entity, which product they use, average value they buy per
time, and how often they buy product. In the second part, this study used 5-point Likert
scale (including “Extremely satisfied”, “Rather satisfied”, “Satisfied”, “Not satisfied”,
and “Completely not satisfied”) to measure the perceived importance of the following
factors: “Discount policy”, “Sales award policy” and “Produces of the contract signal”,
“Professional of Employee”, and “Product price”, etc. In the second part, we try to find
out factors influence your buying decision. And in the last one, we try to know what
form of interaction is the most favorable.
Sampling: random sampling method with 160 questionnaires was acceptable in
terms of information. The hard-copy questionnaires were sent directly to
respondents randomly, and the interview will help participators fill out all of
questions (100% of the answer sheet).

Client Production: (60 samples) is main group of customers to purchase
the Company's products to cater to the needs of production. There are
currently 129 clients in this group. This group mainly focuses on the
quality of the products, their main items as diesel, kerosene.

Customer’s agents, general agents: 100 samples.
General agent, agent: This group of customers is the company's primary
revenue accounted for 50% of the company. There are currently five agents and 61
agents. The total system agents can store very large, at least 20 stores. In addition the
company also has a system of agents belong to the Company.
Direct consuming customers: This group purchases the Company's products to
serve the individual needs and directly purchases products at 62 retail system in which
24 stores in Da Nang and 38 stores in Quang Nam.
60
Conduct investigations information: Survey by questionnaire interviews and direct
mail, the scope of the study focused on existing customers of the company
(Appendix 3).
Data processing: The data has been encoded into the machine using SPSS software.
Data Measurement: In order to be able to select the appropriate method of analysis,
the level of measurement must be understood, for each type of measurement, there
is/are an appropriate method/s that can be applied and not others. In this research,
ordinal scales were used. Ordinal scale is a ranking or a rating data that normally
uses integers in ascending or descending order. The numbers assigned to the
important (1, 2, 3, 4, & 5) do not indicate that the interval between scales are equal,
nor do they indicate absolute quantities. They are merely numerical labels.
- Results analysis and reporting: (Appendix 5).
The figure15 will show the overall solutions for customer relationship
management at the company
Step 1-Identify target customers
Step 2-Develop programs to target customers
Step 3-How to measure CRM program success
Figure15 CRM module in the petroleum sector company V
Step 1. Identify target customers
a. The objectives of collecting information
- Identify the expectations and customer satisfaction:
+ Low Prices, promotions...
+ Product Quality
+ Customer service.
+ Staff in service and care.
61
+ Reputation for client of companies...
+ Transfer, delivery…
- What are the factors depending on the buying process of customers?
+ Type of customer, type of product.
+ The factors related to the supply of products.
- The tools to interact with customers and through the satisfaction of
customers rated the service plan of the Company.
b. Complete customer database
After collecting customer information, make updates to customer
information into a database or customer records, to track customers to identify key
customers of the company. It is the need to design the construction or application of a
software program on the management of customer database. A customer database contains
the following information:
THE INFORMATION OF CUSTOMER
Name: ……………………………………...Customer Code:…………………………
Address:………………………………………………………………………………
Phone: …………………….. Fax:…………….... Email/Web:………….………….
Representative of the Company: ………………… .Position: ………………………..
COMMERCIAL INFORMATION
Products:………………………Products code: …….…….. Quantity:………..…….….
Time ……………………………………………………………………..
Contract value:
- Price:…………………………………….. – Time for delivery: ……….…
- Transportation assistance: ………………… - Time of payment: ………….
- Discount (%): ……………………………...- LCV:……..…………………….
Transactions arising: (Ask products: A; Order :O):……………………………………..
FEEDBACK:
The complaint (questions):…………………………………………………………..
Comments, suggestions, wishes of customer:……………………………………….
Customer database
is analyzed
for theINFORMATION:
purpose of classifying customers. The
MEETLY
CUSTOMER
Contents
meet:……………………………………………………………………..
variety of
variables and statistical analysis methods sort the groups of variables have
Contents not meet:…………………………………………………………….......
62
been used to group customers together into the form, with similar behavior. To
distinguish the targeted customers find the target customers of Petrol Company area V.
Each customer has different values perceived and has different needs for the company.
Based on the difference between my client group will develop criteria to distinguish
clients, then will evaluate the selection method in accordance with the CRM objective
method to distinguish customers of the company Petrol oil region V.
Results of analysis of data processing: (Appendix 5)
c. Identify target customers
Depending on the different period, the business objectives as well as
environmental factors impact different key construction of each of the different criteria.
Specifically, in this period the author proposed the method of scoring each indicator to
assess customer choice.
-
Develop criteria to distinguish clients (Appendix 4)
+ Criteria 1: Distinguish customer lifetime value of customer (LCV).
+Criteria 2: Distinguishing the present value of the customer (CE).
+ Criteria 3: Differentiate customers in output (sales).
+ Criteria 4: Distinguish profits.
-
Selection methods regardless of the client (Appendix 4)
Considering the characteristics of the petroleum products and the business
situation of the company as a basis to evaluate selected by the calculation to find the
point with the highest criteria on the basis of comparison we have the following results:
Table13 Table evaluates selection criteria for the classification
Compare
Index
Achieve
CRM
Criteria 1
Coefficients
Points
0.4
3
Converted
points
1.2
Criteria 2
Points
3
Converted
points
1.2
63
Criteria 3
Points
2
Converted
points
0.8
Criteria 4
Points
2
Converted
points
0.8
Assess
customer
0.3
3
0.9
3
0.9
3
0.9
3
0.9
0.3
1
0.3
1
0.3
3
0.9
2
0.6
value
Method of
calculation
1
Total
2.4
2.4
2.6
2.3
There are 3 criteria with the highest overall score, so we will choose three
criteria as a basis for discriminating customers for Petrol Company area V.
By designing a database based on the turnover index was calculated authors
propose classifying customers as follows: Classification according to customer sales
group similar types, type 1 is the most valuable customer group , followed by the
second, 3.4 to easily identify their importance, see table14.
-
Type 1: Choose turnover of about 1 billion / year.
-
Type 2: Choose revenue in the range of 500 million to 1 billion / year.
-
Type 3: Choose revenue in the range from 100 million to nearly 500
million / year.
-
Type 4: The rest.
Table14 Classify customers according to the Company's revenue
Revenue/
Numbers
Year
Customers
(thousand
Ranking
dong)
1
The general agencies
51,206,000
1.
17,189,000
1
HoaKhanh Trading and Services Joint Stock
Company.
2.
NgọcKhanh Company
16,206,000
1
3.
Minh Khiem Company
11,479,000
1
4.
Petrolimex Da Nang Company
5,357,000
1
64
5.
Tuyet Mai Company
974,000
2
The agencies
35,857,000
1.
11,657,000
1
Total Viet Nam Joint Venture Company
Limited
2.
HaiThinh Company.
2,949,000
1
3.
Thai Loc Company.
1,684,000
1
4.
DuyThinh Company
1,594,000
1
5.
Song Han Private Enterprise Company.
1,515,000
1
6.
Quoc Viet Petrolimex Agency
1,501,000
1
7.
Da Nang Railway Company
1,463,000
1
8.
VinhPhu Company.
1,424,443
1
9.
Ha Nam Company.
1,353,000
1
10.
The
1,181,000
1
Second
Petrolimex
Agency
in
HoaKhanh
2
11.
MuoiPhuoc Private Enterprise Company.
1,077,000
1
12.
Anh Sang Company.
1,072,000
1
13.
DuyPhuoc Company.
910,000
2
14.
Da Phuong Thuc Transport Company
908,000
2
15.
Phuoc Hoang Company.
883,000
2
16.
Viet Thao Company.
155,000
3
17.
Portserco Joint-stock Company
734,000
2
18.
NguHanh Son Private Enterprise Company.
477,000
3
19.
Da Nang Construction and Trading Joint
429,000
3
Stock Company.
20.
Le Thi That Private Enterprise Company.
373,000
3
21.
TuyNghia Private Enterprise Company.
347,000
3
22.
HaiThinh Company Limited.
280,000
3
23.
Da Nang Shipping Chandler Co
147,000
3
65
24.
Ngo ThiHuong Private Enterprise Company.
123,639
3
The production client
44,344,000
1. Da Nang Locomotive Enterprise
11,326,000
1
2. Da Nang Rubber Joint Stock Company
8,682,000
1
3. 2th Locomotive Enterprise
3,055,000
1
4. Acecook Viet Nam
2,990,000
1
5. March 29 Textile Garment Joint Stock Company.
956,000
2
6. TL Construction Material Production Enterprise
942,376
2
7. 4th Young Volunteers Company.
822,000
2
8. VITACO Company.
754,000
2
9. Joint Venture Contractors Company.
737,000
2
10. QuangNgai Sugar Joint Stock Company
693,000
2
11. Vietnam Brewery Limited
624,000
2
12. The First VP Da Nang
550,000
2
13. VINA Da Nang.
536,000
2
14. QuangNgai Wheat Starch Factory.
531,000
2
15. Da Nang Chemical Industries Company
255,000
3
16. Central Area Electrical Mechanical Joint Stock
254,000
3
17. Da nang Tobacco Company Limited.
213,000
3
18. VipcoHaiPhong
197,000
3
19. ATIM Corp
175,000
3
20. Coca-Cola VN
169,000
3
21. Hoa Cam Concrete
162,000
3
Company.
3
Company.
- Selection target customers
Target customers of the whole agents, dealers and customers in production
field are determined as follows, see table14:
66
Table14 Classically targeted customers of the Company
The general agencies and The agencies.
Ranking
Target customers
HoaKhanh Manufacturing Trading Services Company Limited, Ngoc Khanh
Company, Minh Khiem Company, Petrolimex Da Nang Company,
MuoiPhuoc Private Enterprise Company, Anh Sang Company, Total Viet
Type 1
Nam Company, HaiThinh Company, Thai Loc Company, DuyThinh
Company, Song Han Private Enterprise Company, Quoc Viet Petrolimex
Agency, Da Nang Railway Company , VinhPhu Company, Ha Nam
Company, The Second Petrolimex Agency HoaKhanh.
Type 2
Tuyet Mai Company, DuyPhuoc Company, Da Phuong Thuc Transport
Company, Phuoc Hoang Company, PortsercoJoint Stock Company, …
Viet Thao Company, NguHanh Son Private Enterprise Company Da Nang
Construction and Trading Joint Stock Company, Le Thi That Private
Type 3
Enterprise Company, TuyNghia Private Enterprise Company, HaiThinh
Co.Ltd, The Shipping Company, Ngo ThiHuong Private Enterprise
Company, PhucHau Private Enterprise Company, …
ĐangTra Private Enterprise Company, Tin Nghia Co. Ltd, Le Bin Private
Enterprise
Type 4
Company,
NguyễnTấnThành
My
Dung
Private
Private Enterprise Company,
Enterprise
Company,
NghiaTrung Private
Enterprise Company, ChienThanh Co. Ltd, Tan Minh Private Enterprise
Company, Nam Tin Private Enterprise Company, An Van Private Enterprise
Company, …
Product Customer
Type 1
Da Nang Rubber Joint Stock Company, 2th Locomotive Enterprise,
AcecookVietNam Company.
March 29 Textile Garment Joint Stock Company, 4th Young Volunteers
Type 2
Company, VITACO Company, QuangNgai Sugar Joint Stock Company,
Vietnam Brewery Limited, VINA Da Nang Company, QuangNgai Wheat
67
Starch Factory, Da nang Tobacco Company Limited. ….
Da Nang Chemical Industries Company , Central Area Electrical Mechanical
Type 3
Joint Stock Company, VipcoHaiPhong Company, , Coca-Cola VN, Hoa Cam
Concrete, Nam Tin Private Enterprise Company , Ngoc Chau Private
Enterprise Company …
DienThang Private Enterprise Company, Nam Tin Private Enterprise
Type 4
Company, Ngoc Chau Private Enterprise Company, PhatTuong Co. Ltd,
Song Lai Co. Lt, Song Vang Manufaturing Trading Services Company
Limited …
Step 2. Developing programs to target customers
a. The impact tool to target customers
Interact with customers to grasp the scientific information about the
difficulties they face, their needs, desires of the company policy, the manner of service,
quality of service to perform service them.
- Determination of content interoperability: The main content of customer
interaction activities is to gather information to update the customer database. This
includes: describe customer information, client's difficulties while participating service
providers, customer’s desire, and the desire of the customer in the form of support.
Proposed information collection and customer complaints, information agent and the
information stated in the customer identification.
- Building interactive forms: Depending on the source of data to be collected
that will have different forms of interaction are used. Forms to collect primary data
include: direct interaction with customers, via phone, fax, Internet, email ... instrument
to collect customer information.
- Interactive evaluation forms: see table16
Table16. Assessment of customer interaction forms
Forms of
interaction
Cost
Benefit
Speed
68
The
truthfulness
Personalized
Risks
Interact directly
with customers.
Interactive by
telephone
Interactive by fax
Interactive by
Internet (wed)
Form collect
customer
information
Interactive by
Email
Very
High
High
Moderately
High
High
Low
High
High
Moderately
Low
Medium
Low
Medium
Medium
Moderately
Medium
Medium
Low
Low
Low
Fast
Medium
High
Low
High
Medium
Slowly
Medium
Medium
Low
Low
Medium
Fast
Medium
High
High
- Selected forms of interaction: Through the above criteria, each form of
interaction has its own advantages and disadvantages, to be able to select appropriate
forms of interaction with each customer. I will evaluate the selected interactive form by
and points will be assessed as follows, seethe table17:
Table17 Evaluate the selected interactive
Indicators
High
Medium
Low
Cost
1
2
3
Benefit
3
2
1
Speed
Moderately
Slowly
Speed
3
2
1
The truthfulness
3
2
1
Personalized
3
2
1
Risk
1
2
3
Indicators
The table18 show the evaluate selected interactive form (we can see more
detail in the appendix)
69
Table18. Evaluate selected interactive form
Collecting
Directly
Indicators
By phone
By fax
By Internet
information
By Email
form
Coefficient
Point
Point
Point
Point
Point
Point
conversion
conversion
conversion
conversion
conversion
conversion
Cost
0,2
0,2
0,2
0,4
0,6
0,2
0,6
Benefit
0,2
0,6
0,6
0,4
0,2
0,4
0,4
Risk
0,2
0,6
0,6
0,6
0,2
0,6
0,2
Speed
0,1
0,2
0,2
0,3
0,3
0,1
0,3
0,2
0,6
0,2
0,4
0,4
0,4
0,4
0,1
0,3
0,2
0,2
0,2
0,2
0,3
1
2,5
2,0
2,3
1,9
1,9
2,2
The
truthfulness
Personalized
Total
Forms can choose to interact include: direct interaction, by telephone, by fax,
by email.
In total the Company's customers, target customers of CRM programs
including agents and general agents block: 16 customers are type 1; 15 clients are type 2;
25 customers have type 3 and 4 of the plan also back. Volume customer production: 5
customers type 1 and 10 type 2 customers, and the rest of the type 3 and 4. Therefore
the list of clients I will pay attention to interact with this target group of customers in
the best way.
To be able to choose the most appropriate form of interaction with each
customer, through a survey of 160 samples, I obtained the following results, see table
4.7:
70
Table19 Interaction with each customer
Valid
Valid
Cumulative
Percent
Percent
28.8
28.8
28.8
22
13.8
13.8
42.5
Phone
92
57.5
57.5
100.0
Total
160
100.0
100.0
Frequency
Percent
Fax
46
Direct notice
Customers often give feedback to the company through many channels (phone
57.5%, fax 28.8%, and directly give feedback 13.8%). Thus, I will choose different
interactive channel for different class of customers:
- Chief agents, agents:
1st class: These customers are the most valuable to the company, thus we have
to keep the relationship with them, in order to fulfill their needs. With this class,
I will choose the directly interactive channel.
2nd class: These customers also are long-term customers to the company, thus I
will choose interactive channels: directly and through phone
3rd and 4th class: Interactive through fax, survey
- Customers as producers
1st and 2nd class: Interactive through phone, fax or directly
3rd and 4th class: Interactive through fax, phone
- Result of interactive process
After interactive with customers (160 samples), I had collected following
information, and we can see more in the chart 4.1
71
Figure16. Factors affect customer decision to buy company product
The result collected shows that our customers are very sensitive and understand
clearly the transaction process or product properties of Petroleum companies, see Figure
16 They understand that each factor above will have the huge effect to company
business process even with the small change. Especially for the price, 58.8% of
customers evaluate it as “Very important”, while 41.2% evaluate as “Quite important”.
Most customers suggest that company strategy need to be flexible and
consistent in order to help units to make a consistent business plan.
Chief agents, agents
1st class: Have the relationship more than 3 years with the company, they buy
with a large quantity, and ask product to deliver on the time. They are companies with
strong capital, with the large business network, thus they are very professional. They
know their benefits to the company, thus they always ask for better price, services after
transaction, and the care from the company.
2nd class: Have the relationship from 1-3 years with the company. Most of them
consumes with large quantity. These are the potential customers, with few of them can
72
be promote to 1st class. They want the company to extent the payment date, provide
knowledge in product safety and ask for the increase in discount rate.
3rd class: Most of them just have a new relationship with the company;
consuming slowly, with small quantity and asking for support services.
4th class: They don’t have sale experience. They buy with a small quantity or
do not buy product during one or two month.
Customers as producers
1st class: Customers, who buy for manufacturing purpose, have the long-term
relationship with the company. Due to stable, regular demand, they ask for better price,
quality, priority and higher billing period.
2nd class: Customers who have the long-term relationship with the company.
Demand is relatively stable so they often require reducing costs, transportation
assistance, resolve complaints and extent payment date.
3rd class: Irregular demand, i.e. temporary customers, they usually pay lately.
Need discount on cost and shipping fee.
4th class: Low buying value, asking for low price, or extension of payment date
b. Develop programs to targeted customers: see table20
Table 20 Service policy according to customer needs
General dealer and
Policy for customers
dealer customers
- Increase discount, company’s shipping on place, products'
priority, 8-10 days billing period.
- Dealers support policy: Investment support equipment
Type 1
(paint and repair the pump column, signs, signage, technical
advice, staff training, testing pump column ....).
- High priority on resolving complaints quickly and
reasonably, exactly.
- year-end presents, special care, marketing fee support ...
73
- increase discount, transport and selling support, products
priority.
Type 2
- Dealers support policy: Investment support equipment
(paint and repair the pump column, signs, signage, technical
advice, staff training, testing pump column ....).
- 6-8 days billing period, care on holiday...
Type 3
Type 4
- increase discount, transport and selling support.
- 5-6 days billing period, care on holiday...
- transporting and selling support.
- 3-4 days billing period
Manufacturing
Policy for customers
customers
- Discount, 35 days billing period.
- High priority, transport support, resolving complaints
Type 1
quickly and reasonably.
- respond information rapidly, with special care.
- Guarantee quality of products, provide rental storage…
- Procedures for settling orders, contracts rapidly
- Discount, 30 days billing period.
Type 2
- High priority, transport support, high priority on products,
giving out presents on holidays.
- Procedures contracts rapidly.
- Keep prices unchanged, transport support.
Type 3
- Keep billing period unchanged.
- presents on holidays.
Type 4
- introduce buying in store
Step 3. How to measure CRM program success
a. Internal evaluating
74

Value gained from customers: we can estimate this value by profitable
possibility of customers. After using CRM model in customer relation
administration, how much does the profit margin increase?

Period of time from receiving, processing information to making a
performance decision: when using CRM, does the time for providing
feedbacks to customers decrease? How much is the average time of
receiving, processing and providing information?

Rate of accepted customers: how many new customers join to the system?
How much does the rate of this increase compare with the phase before?

Rate of sales for a sort of customers: does the amount of goods selling for
objective customers increase? What is the specific amount?

Expenses for CRM?
b. External evaluating

The number of new ordering customers

The customers’ reliability level in the company: trade mark, product,
service…Regularly evaluate the customers’ reliability level by web,
customer satisfaction questionnaire.

Rate of customers’ dissatisfaction: Measures the rate of dissatisfy
customers, does it increase or not after using CRM.
Using CRM model in customer relation administration not only helps the
company to recognize reasonably the customers and their value, but also helps to
compare the groups of customer and focus on objective group and put out the interactive
method and policy to a particular customers’ group. This will remain the loyalty of
former customers and attract more new customers by diversified and appropriate
policies. Therefore, sales and profits will also increase. In the drastic competitive
economy, customer is a precious asset so the more stable customer relation is, the more
great success company achieves.
75
This is content of “Solution to improving customer relation administration in
the fifth area petrol company”.
Summary of Chapter 4
The application of the CRM in V Petroleum Company will bring positive
results. It not only allows the company to identify the right customers but also focus on
the right target customers, with the appropriate way to interact with each object and
make policies for different groups of customers. Thence, the amount of purchases of
customers and company’s profits are increased.
76
Chapter 5 CONCLUSIONS AND MMENDATIONS
5.1. CONCLUSIONS
On this subject the study and application for Petrol Company area V.
Successful CRM strategy is the basis for maintaining and developing company's
business units in the long-term. Therefore, the company should review the customer
relationship management is an indispensable work for the company. In recent years,
regional Petroleum Company V has identified the customer relationship management
are effective measures to improve service quality and to maintain good relationships
with customers. However, this work is still inadequate. Therefore, the complete solution
customer relationship management in the company is essential.
Thesis "Perfecting the Customer Relationship Management in Petroleum
Company Region V" has achieved the following results: This study also show the three
step to improve the CRM processes at the company. Particularly, three steps that are
identify target customer, Develop programs to target customers, and how to measure the
success of CRM programs. From the identify target customer, company can find the
group target customer who create more than 50% revenue for the company that is more
than 20 the total system agents.
In this study, the authors also develop distinguishing client criteria that are
main problems for this company during last time. There are 3 criteria with the highest
overall score, so we will choose three criteria as a basis for discriminating customers for
Petrol Company area V.
From the criteria for customer, this paper give some point to improve the
programs to target customers through the forms of interaction that is direct interaction,
by telephone, by fax, by email. And then the study also gives the model to measure
CRM program success. That will be included internal evaluating and external evaluating.
77
5.2. SOME SUGGESTIONS ON CONDUCTING THE
CUSTOMER RELATIONSHIP MANAGEMENT ACTIVITIES
AT THE COMPANY
5.2.1. Building the organizing culture with customer orientations
To implement CRM, companies need to establish truly customer-oriented
culture. The cultural characteristics have been set and pursue derived from senior
leaders and then down the whole company. Identify first priority for understanding
customer needs, thereby continuously improving business processes to fit what
customers want.
Need to develop new business thinking, promote staff willing to share
information about customers, building up the spirit of cooperation on the basis that the
benefits of implementing CRM.
Company determined the motto of customer service as a basis for coordination
between departments, creating consistency in customer service from the first stage to
the last stage, limited conflict.
5.2.2. Investing in infrastructure development
 Infrastructure investment for CRM in the company as a basis for CRM activities
to achieve the goal mentioned above. The infrastructure needed to develop is:
 Hardware: Includes staff working for CRM and machines and equipment,
information systems etc.
 Software: Skill of staff, CRM software
Development of infrastructure must be assured synchronization, must be
developed in all departments, as if the CRM activities implementation is very good but
at a different stage in the process providing for poor performance will make the system
less satisfied customers.
(1) Improving Marketing structure to orient the customers in the company
by setting up client-relations management board
78
The target of Marketing is to put the customer to act as a center; we need to
perfect structure of Marketing that can orient the customers by setting up CRM
department in the company with the following function and mission:
 Usually execute actions to collect and update the information about the
customers
 To normalize and analyze the customer database to classify and find the target
customers and potential customers
 To research the customer’s demands and wishes, rely on the collected
information that is gathered in customer database.
 Report to the senior manager on CRM
 To develop CRM programs: interact programs, service programs to each
customer’s class
 To cooperate with other components in the company to gather the input and
output information for general goal of the company
 To rebuild the customer database, expand the customer database
Now, the company can conduct to establish CRM department with existing
facilities following the figure17.
Online Relationship
Functional Relationship
Figure17 Outline of CRM department of the company
(Sources: Business department)
79
(2) Recruitment and training of human resources for customer relationship
management: Works’ analysis of the customer relationship management,
defining margin employee to Customer relationship Management,
(3) Investment in machinery and equipment systems: Machinery and
equipment systems are invested to serve for the CRM Roadmap, in fact,
internal network system and computer equipment also relatively complete at
the Company. The company is implementing computerized office; however,
the new machines must be purchased with the establishment of another CRM
Committee.
(4) Investment management software of customer relationship: If technology
is invested, the management of customer relationship will be changed in a
positive way very much in the company. Therefore, the company should
promote the application of information technology in management and
customer service. The investment in the information technology will not only
create high effects in the exchange of information and the sharing of
customers’ data among departments but also make conditions so that the
customers can update the basic information of the company. It is very
convenient for customers. Finally, the company should establish appropriate
CRM software which suits with company’s characteristics.
Some applicable software: E-BUSINESS SUITE: a software system which
contains the utilities on auto sales, auto reply when the customers access. It is
appropriate with commercial businesses; MICROSOFT CRM: Customer Management
was run by software which is Office Outlook 2003 and Business Contact Manager.
These programs can also be converted to client management software Microsoft
Business Solutions CRM; VASC CRM: A product of the VASC Software and Media
Company with $995. It includes utilities such as updating customer data easily, with
tools to classify the value of customer and data storehouse. Moreover, it is suitable for
business activities of enterprises services; ACCESS: Applicable software of Microsoft
Office 2003 which is a database management system used to create and process the data.
80
Access can meet most of the demands for database management while maintaining
friendliness and using easily for programmers and users; BUSINESS CONTACT
MANAGER: Based on Office 2003, it is a version which integrates utilities of Office
2003. Therefore, it is an Advanced Access; QUICKBOOKS CUSTOMER
MANAGER: QuickBooks Customer Manager is designed for small business
organizations of 20 employees or less that has facilities such as calculating books,
considering the current business situation and the application of relevant information
with about $80. The following Appendix 6reviews the CRM software selection system.
According to the calculation results, I chose CRM VASC; this is the product of the
Software Company and VASC communications. It costs $995.
(5) Budget planning for CRM Roadmap: Funds for CRM Roadmap will be
calculated on the basis of investment in infrastructure development. The total
budget is 155.000.000 Vietnam Dong.
81
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[1]
Accounting department annual report of Petroleum Company at branch V.
[2]
Payne, A. and Frow, P. (2006). Customer Relationship Management: from
strategy to implementation, Journal of Marketing Management, 22(1), pp.135-168.
[3]
Alex R.Z., Danny N.B. and Wesley, J.J. (2004). An evaluation of divergent
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[4]
Anton, J. and Hoeck, M. (2002). E-Business Customer Service. Santa Monica, CA:
The Anton Press.
[5]
Bayer, J.A. (2002). Show me the ROI. A Teradata CRM white paper. Dayton, OH:
NCR Corporation
[6]
Business Department annual report of Petroleum Company at branch V.
[7]
Buttle, F.A. (2001). The CRM Value Chain, Marketing Business, (February),
pp.52–55.
[8]
Chen, I.J. and Popvich, K. (2003). Understanding customer relationship
management (CRM): People, process and technology. Business Process
Management Journal, 9(5), pp.672-688.
[9]
Chou, C.Y., Ding, M. and Unnithan, C. (2003). Organizational Transformation
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D.
(2007).
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Management Review, Vol. 44, pp. 77-82.
82
[13] Decree No. 84/2011/ND-CP of October 15, 2011 of the Government on Petroleum,
Chapter I, Article 3, paragraph 9 "base price".
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branch V.
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Concepts, Tools and Applications, Jagdish, N., Sheth, Atul Parvatiyar., &
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Harper & Row, 1973), pp. 64–65.
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management process: Its measurement and impact on performance, Journal of
Marketing Research, 41(3), pp. 203-5.
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Good Business into a Great One!. GBR, London: Thorogood.
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financial service providers, International Journal of Bank Marketing, 28(1), pp.
47-64.
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Relationship Technologies. Upper Saddle River, NJ: Prentice Hall.
[36] The report of Human Resources Management Department, Dec 2011.
[37] Venkatesh, V., Morris, M.G., Davis, G.B. and Davis. F.D. (2003). User
acceptance of information technology: Toward a unified view, MIS Quarterly,
27(3), pp. 425-478.
[38] Zablah, A.R., Bellenger, D.N. and Johnston, W.J. (2004). Customer relationship
management implementation gaps, Journal of Personal Selling & Sales
Management, 26(4), pp. 279-95.
[39] Zineldin, M. (2005). Quality and customer relationship management (CRM) as
competitive strategy in the Swedish banking industry. The TQM Magazine, 17(4),
pp. 329-344.
84
APPENDIX 1 CUSTOMER OPINION SURVEY NOTE
Hello Sir/Madam. To explore and evaluate the customer satisfaction in the
products and service of the Vietnam Petroleum Corporation – regional branch V, I
surveyed your opinions to serve your needs in the next time. Look forward to the
cooperation of you by answering the following question: (We commit the detailed
information you provide will be kept confidential and only attend to research)
1.
Which entity are you in?
General agent
Agent
Production Customer
Customer
2.
Which products of Region V Petroleum Company do you use?
Petroleum
Diezel
Viscosine
Gasoline
3.
How many average value of buying per time is.................... Vnd/time?
<100.000vnd
100.000 – 10.000.000vnd
10.000.000 – 100.000.000vnd
100.000.000 – 1.000.000.000vnd
>1.000.000.000vnd
4.
How many your buying frequency with Company is?
Once time
Sometime
Always
85
5.
Without buying Company, which other company do you buy? (in a
familiar product)
Oil Gas Petroleum
Company
Air Petroleum
Company
Army Petroleum
Company
Other………………
6.
How do you evaluate the following factors of Region V Petroleum
Company?
Factor
Extremely
Rather
satisfied
satisfied
1
2
Discount policy
Sales award policy
Produces of the contract signal
Professional of Employee
Product price
Delivery time
Transportation
Receive and manage complain
86
Satisfied
3
Not
Completely
satisfied
not satisfied
4
5
7.
How do the following factors influence your buying decision?
Factor
Extremely
Rather
important
important
1
2
Important
3
Not
Completely
important
not important
4
5
Company prestige
Distribution policy
Product quality
Product price
Professionalism of staff
Promotion
Customer support policy
8.
You answer the priority order of the factors that interest you the
most?
(Numbered from 1 to 10 elements most interested to least interested)
The ability to consume products
Promotion
Rewarded according to the sales policy
Product quality
Product price
Payment policy
Purchasing and contract procedures
Delivery time
Attitude of staff
Resolve complaints quickly
87
9.
The company usually announces price, product information and
support services for your business by what means?
Announcement on the company’s website
Phone
Direct notice
10.
Another media:............
Product price
Purchasing and contract procedures
11.
Payment policy
Delivery time
Attitude of staff
Attitude of staff
Another media
If you had feedback, did the company solve quickly?
Yes
No
How do you respond information to the company?
Phone
Direct notice
13.
Fax
You often respond to the company what information?
Product quality
12.
Email
Email
Fax
Another media:............
In your opinion, what form of interaction is the most favorable?
(Numbered from 1 to 5 of form most favorable to least favorable)
Fax
Email
Direct notice
Phone
Other:……………
14.
If company improve to satisfy your desire, will you increase the
amount of purchase?
Yes
15.
No
If “yes”, how many percent do you expect to increase by?
<5%
5 – 10%
15 – 20%
>20%
88
10 – 15%
16.
Do you have any ideas to Company?
.....................................................................................................................................
.....................................................................................................................................
.....................................................................................................................................
Thank you! Please provide some related information:
Name: .......................................................................................................................
Age: ..........................................................................................................................
Adress: .....................................................................................................................
Function: ..................................................................................................................
Agent’s representative: ..........................................................................................
89
APPENDIX 2 LIST OF COMPANY’S PETROL STORE
•
In Da Nang
No.
Store’s name
1
Petrol store 01
Mieu Bong, Hoa Phuoc, Hoa Vang, Da Nang
2
Petrol store 02
627 Nguyen Luong Bang- Da Nang
3
Petrol store 03
652 Dien Bien Phu – Da Nang
4
Petrol store 04
152 Trung Nu Vuong – Da Nang
5
Petrol store 05
337 Ton Duc Thang – Da Nang
6
Petrol store 06
01 Tran Phu – Da Nang
7
Petrol store 07
265 Nguyen Tri Phuong – Da Nang
8
Petrol store 08
172 QuangTrung – Da Nang
9
Petrol store 09
81 Le Van Hien – Da Nang
10
Petrol store 10
HoaThuanTay, Cam Le, Da Nang
11
Petrol store 11
686 Nui Thanh – Da Nang
12
Petrol store 12
Highway 1A- HoaPhuoc – HoaVang – Da Nang
13
Petrol store 14
HoaPhong – HoaVang - Da Nang
14
Petrol store 15
126 Nguyen Van Thoai
15
Petrol store 16
HoaKhuong, Da Nang
16
Petrol store 17
93-94 Nguyen Tri Phuong
17
Petrol store 18
Highway 1A- HoaPhuoc – HoaVang – Da Nang
18
Petrol store 19
Area C2 – Ho Quy Ly – Hoa Minh
19
Petrol store 20
Tho Quang – Son Tra – Da Nang
Address
90
20
Petrol store 21
Hai Van – HoaVang
21
Petrol store 22
Hoa Hai – Ngu Hanh Son
22
Point-of-sale Ceramic
23
Ship DP
•
Industrial area HoaKhanh – Lien Chieu
Han River – Da Nang
In Quang Nam
Number
Store ‘s name
1
Dai Loc Petrol Store (Area 3)
Ai Nghia Town
2
Dai Loc Petrol Store (Area 5)
Ai Nghia Town
3
Dai Minh Petrol Store
Dai Minh Village
4
Bo Bo Petrol Store
Hamlet 5, Dien Tien Village
5
Dien Duong Petrol Store
Ha My Hamlet – Dien Ban
6
DienHoa Petrol Store
Xom Bung Hamlet, Dien Hoa
7
Dien Nam Petrol store
607, 1 Hamlet, Dien Nam Bac
8
DienPhuoc Petrol store
DienPhuoc Village
9
Dien Phuong Petrol store
ThanhChiem Hamlet
10
DienTrung Petrol store
610B, Ngan Ha Hamlet, DienTrung Village
11
VinhDien Petrol store
Area 4, VinhDien Town
12
Cong Dinh Petrol store
Nam Phuoc Town
13
DuyXuyen Petrol store
Nam Phuoc Town
14
Hoi An Petrol store
61 Nguyen Tat Thanh – Hoi An
15
H.T.Khang Petrol store
102 Hung Vuong
16
Thanh Nam Petrol store
Cam Chau village
17
QN-0074H oil ship
Thu Bon River
18
Thanh My Petrol store
Thon Dung, Hanh My Town
19
An Phu Petrol store
Hamlet 4 , Tam Xuan Village
20
Chu Lai Petrol store
Highway 1A, Tam Nghia Village
Address
91
21
Doc Soi Petrol store
Tam Nghia Village
22
Ky Ha Petrol store
Ky Ha Port, Tam Quang Village
23
Nui Thanh Petrol store
Nui Thanh Town
24
Tam Xuan I Petrol store
Tam Xuan I
25
QN 06-49H Oil ship
Ky Ha Port, Tam Quang Village
26
Nui Thanh 0502 Oil ship
Outer zone of Ky Ha Beach
27
Tam Vinh Petrol store
615 Street, Tam Vinh Village
28
Tan Thanh Petrol store
Tan Thanh Village
29
An Son Petrol store
516 Hung Vuong – Tam Ky
30
Hung Vuong Petrol store
273 Hung Vuong – Tam Ky
31
HoaHuong Petrol store
797 Phan Chu Trinh- Tam Ky
32
Tam Ky Petrol store
48B Phan Chu Trinh-Tam Ky
33
Tam Phu Petrol store
PhuQuy Hamlet, Tam Phu
34
BinhTu I Petrol store
BinhTu Village
35
BinhTu II Petrol store
BinhTu – ThangBinh
36
Ha Lam Petrol store
Ha Lam Town
37
ThangBinh Petrol store
Binh Nguyen Village
38
Tien Phuoc Petrol store
Tien Ky Town
92
APPENDIX 3 LIST OF INTERVIEWED CUSTOMER
No.
1
Company Name
No.
Company Name
Viet Thao Company
81
Hoang Thanh One member co., Ltd
2
Hoa Cam Beton
82
Ngoc Tung One member co., Ltd
3
Quang Ngai Wheat flour
83
Phuoc Minh Co., Ltd
84
Song Lai Co., Ltd
85
Tuyet Mai Company
4
5
6
7
ĐạiLộc Dai Loc Special Products
Process Company
Trading Join Stock Company ĐạiLộc
ThangBinh Trading –Service Join Stock
Company
Transportation - Trading Join Stock
Company Petrolimex Da Nang
86
Da PhuocThuc Transportation
Company
87
Vitaco Company
8
ChienThanh Ltd. Co.
88
A ChauCty CP ĐT và QLTS
9
Kham Duc Ltd. Co.
89
HoaKhanh 2 Agent
10
Luong Toan Ltd. Co.
90
Cam An Petrol Agent
91
DuyXuyen Forest ranger Petrol Agent
92
Quoc Viet Petrol Agent
93
Hong Lai Retail Petrol Agent
94
An Van Private Company
95
Anh Dao Private Company
11
12
13
14
15
Tuyet Mai Service – Trading –
Production Ltd. Co.
Nghia Tin Service & Trading Ltd. Co.
Truong Xuan Construction Service &
Trading Ltd. Co.
Ngoc KhanhTransportaion Service –
Trading Ltd. Co.
Vietnam Acecook Affiliate
93
16
17
18
19
20
21
22
23
Total Vietnam Joint Venture Company
Affiliate in Quang Nam
Quang Ngai Service One Member Ltd.
Co. Affiliate
HoaKhanh Nam One Member Ltd. Co.
Affiliate
M. Trung Construction One Member
Ltd. Co. Affiliate
PhatTuong Auto Repair &
96
Binh Hong Private Company
97
Cay Sanh Private Company
98
QueTrung Private Company
99
Cua Dai Private Company
100 Dong Ha Private Company
Transportation Ltd. Co.
Area V One Member Ltd. Co. Affiliate
in Quan Nam
Petec Da Nang Trading Company
101
Hoan Thach Gold Store Private
Company
102 Ho Mua Thu Private Company
Affiliate
Hoa My Petrol Private Company
103 Hoa Mai Kim Private Company
Affiliate
24
Da Nang Chemicals Affiliate
104 Hong Ha Private Company
25
Hoa My 5 Petrol Affiliate
105 Hong Thai Private Company
26
Mid-Region Mechanic – Electricity
106 Hung Hiep Private Company
27
Cocacola VN
107 Huong Private Company
28
Anh San Company
108 Le Bin Private Company
29
Da Nang Rubber Company
109 Le Thi That Private Company
30
Portserco Joint stock Company
110 MuoiPhuoc Private Company
31
Marine Supply Company
111 Nam Tin Private Company
94
32
29/3 Weave Company
112 NghiaTrung Private Company
33
Quang Ngai Sugar Company
113 Ngo ThiHuong Private Company
34
DuyThinh Company
114 Ngoc Chau Private Company
35
Ha Nam Company
115 NguHanh Son Private Company
36
HaiThinh Company
116 Nguyen Khuong Private Company
37
Total Vietnam Joint Venture Company
117 Nguyen Tat Thanh Private Company
38
Bidder Joint Venture Company
118 Nguyen Thi De Private Company
39
Minh Khiem Company
119 PhuTho Private Company
40
Ngoc Khanh Company
120 PhucHau Private Company
41
Petrolimex Da Nang Company
121 Song Han Private Company
42
Phuoc Hoang Company
122 Tam Quang Private Company
43
Thai Loc Company
123 Tan Minh Private Company
44
Giang Trading Company
124 Thao Tan Private Company
45
HiepDuc Trading Company
125 Thu Dung Private Company
46
Phuoc Son Trading Company
126 Huong An II Trading Private Company
47
Tien Tra Trading Company
127
48
Hien Trading Company
128
49
50
Da Nang Trading & Construction
129
Company
Song Vang Service - Trading Company
95
130
Dong Phu Service & Trading Private
Company
Duong Minh Private Company Service
& Trading
Khai Hoang Private Company Service
& Trading
Tri Tin Private Company ServiceTrading
51
HoaKhanh Construction - Trading
131 Petajico Company
Company
52
DuyThinh Ltd. Co.
132 HoaHiep Private Company
53
TuyNghia Private Company
133 Vietnam Beer Factory
54
TuyetNhi Private Company
134 Da Nang Tobacco
55
Van An Private Company
135 HaiThinh LTD. CO.
56
VinhPhu Private Company
136 TNXPNN 4
57
58
59
Dien Minh Private Company
137 Tam Ky Trading Center
Construction
Thao Trinh Private Company
138 VINA DN
Construction
Tuan Tam Private Company
139 VipcoHaiPhong
Construction
60
XuanLan Private Company
140 VP 1 Da Nang
61
Dang Tra Private Company
141 CONSTRUCTION-KDVT
62
DienThang Private Company
142 No.2 Engine Bussiness
63
My Dung Private Company
143 Da Nang Engine Business
64
Da Nang Railway
144 BUSSINESS SXVL and DD TL
65
Dien Hong 2 Co-operative
145
66
CO-OPERATIVE DVNN&KDTH Dien
Ngoc I
146
BUSSINESS Petroleum station Middle Airport Corporation
CO-OPERATIVE TRADING
COMPANY DienTho
67
KhucLuy Co., Ltd
147 Chau Bi Company
68
TrungPhu Co., Ltd
148 Thai Cam Joint Stock Company
96
69
Nguyen Ba Anh Private Company
149 Ngoc Tam Private Company
70
Dang Duc Private Company
150 Phuoc Ngoc Anh Joint Stock Company
71
PhongNgu Dong Joint Stock Company
151
72
VienTay Joint Stock Company
152 Ha Tay Co., Ltd
73
Phuoc Tien Private Company
153 Ha Dong Joint Stock Company
74
Nam Ha 2 Service – Trading Joint Stock
Company
154
BinhNinh Private Company TMDV
BìnhNinh
QuangHien Construction Joint Stock
Company
Lac Thanh Nam Service – Trading Co-
75
Cam Phu I Private Company
155
76
Thi Phuong Private Company
156 Cam Van Tay Business
77
Xuan Dai Private Company
157 QuangGia Private Company
78
Thanh My Private Company
158 Ha Quang Joint Stock Company
79
DienTho Trading Co-Operative
159 Ngoc Vinh Private Company
80
Trading Company
160 Viet – Nhat Colored Tile Factory
97
Operative
APPENDIX 4
4.1.CRITERIATO DISCRIMINATE CUSTOMER
4.1.1. Criteria 1: Discriminate customer on LCV (Lifetime Value of Customer)
 1 
Formula: LCV   S it  DCit   MCit 

1  
t 1
T
t
- S: The sale to Customer i
- DC: Direct costs of products Customers
- MC: Marketing costs for Customers.
-  : interest rate
t: time unit
T: Time total
This measure is based on customer behavior which is in the past and is limited by
the diagnostic value of future marketing decisions. So now it is so difficult for company
to determine an exact value.
Customer classification is as follows: classified according to the customer groups
who had similar LCV, type 1 is the most valuable customers group, followed by type 2,
3, 4to easily identify their importance.
Customer classification into categories 1, 2, 3, 4 based on the following
basis:Customers with the highest LCV index and LCV indicators of customer
similarities are in the same range of values.
4.1.2. Criteria 2: Distinguished according to the present value of the customers.
CE
Present value of the customers
(CE)
Purchases in
phrase each
(Q)
Profit after
tax for each
customer
unit.(  )
Continuous
purchase
time.
(t=1....n)
Costs of
development
and customer
retention rate
(R)
Continuous trading model of customer’s present value
98
WACC and
discount rate
(AC)
Present value of the customer is also the present value of the relationship with the
customer. That is the difference between the actual value, the cost of maintaining and
developing customer.
This relationship can be expressed by algebraic formula based on the number of
transactions, profits and continuous trading model of customer’s present value:
n
Formula: CE =
n
 Q  d   D
t
i 1
t
t
t 1
t
 Rt d t  ACt
From this formula, we can see the basic rules to be able to obtain the greatest
value from customers is as follows:
• If the expected present value of current cash flow obtained from certain
customers is greater than or equal to the cost to win customers, investing in attracting
customers.
• After recurring customer, the cost of recurring customer before will not exist,
and also not concern to agency cost.
• Customer‘s value can be increased based on the volume of transactions increase,
the profits from the purchase or the continuity of the transaction.
• Continued investing in the development and maintenance customer until the
additional profit from the change in the volume of transactions and the value of
increasing customer which depend on the continuity of the transaction, it only
equivalent to the cost of gaining new customers.
Only if the other factors do not cause effect cancel to others, then any of the
increasing number of transaction, profits or the continuity of the transaction will help to
increase the customer value.
4.1.3.Criteria 3: Discriminate customers on output (sales)
According to these criteria, the output of each customer will be reflected in the
recent times. Customers will be sorted from high to low value in customer groups from
the most to the least value.
4.1.4. Criteria 4: Discriminate on profits.
99
The customer profits give to the organization through the purchase of products
and services, the customers who generate the higher profits will be arranged in a group.
4.2. CHOOSE THE METHODS OF CUSTOMER DISCRIMINATION
4.2.1. Evaluate strength and weakness of each feature:
Consider the characteristic of petrol products and the business situation of the
company as a basic to assess the strength and weakness of the feature:
• Criteria 1: Discriminate customer on LCV (Lifetime Value of Customer)
• Strength:
• · Achieve to CRM objective means finding the faithfully customer of company.
• · To reflect the value that each customer contribute to the company
• Weakness: Not to mention the increase speed of LCV and complex in
calculating, need more data.
• Criteria 2: Distinguished according to the present value of the customers. CE
• · Achieve to CRM objective means finding the faithfully customer of company.
• · Customer value can increase based on the volume of increased transaction, the
profits from the purchase or the continuity of the transaction.
• Weakness: Complex in calculating, need more data.
• Criteria 3: Discriminate customers on output (sales)
• Strength:
• · Introduce the output of goods and the value of each customer.
• · There is advantage in calculate.
• Weakness: Not reflect clearly the profit that each customer brings to the
company.
• Criteria 4: Discriminate on profits.
• Strength: Reflects the value that each customer contributes to the company and
calculate easily.
100
• Weakness: Not to calculate the purchase time of customer.
4.2.2. Evaluated the selection by calculate to find the criteria which have the
highest point:
Identify comparable indicators:
(1): Achieve CRM object.
(2): Evaluate customer value.
(3): The calculation method.
Determine the degree of each criterion importance, assign each criterion an
importance from 0.0 to 1.0 (significant coefficients)
Assess the level of satisfaction of each method: The best: 3 points; average: 2
points; weak: 1.
101
APPENDIX 5
The survey results and the described data analysis
5.1. Customer information
Which entity are you in?
Frequency
Percent
Valid
Cumulative
Percent
Percent
Valid General agent
5
3.1
3.1
3.1
Agent
55
34.4
34.4
37.5
Production Customer
100
62.5
62.5
100.0
Total
160
100.0
100.0
The Company purchase level
Frequency
Valid Sometimes
Percent
Valid
Cumulative
Percent
Percent
21
13.1
13.1
13.1
Always
139
86.9
86.9
100.0
Total
160
100.0
100.0
Average value in a purchase time (VND)
Frequency Percent
Valid <100.000
Valid
Cumulative
Percent
Percent
60
37.5
37.5
37.5
100.000 - 10.000.000
62
38.8
38.8
76.2
10.000.000 - 100.000.000
13
8.1
8.1
84.4
8
5.0
5.0
89.4
100.000.000 - 1.000.000.000
102
>1.000.000.000
Total
17
10.6
10.6
160
100.0
100.0
100.0
5.2. The elements of company customer satisfaction
Discount policy
Frequency
Valid
Rather satisfied
Satisfied
Not satisfied
Total
Percent
Valid
Cumulative
Percent
Percent
12
7.5
7.5
7.5
134
83.8
83.8
91.2
14
8.8
8.8
100.0
160
100.0
100.0
Sales award policy
Frequency
Valid
Percent
Valid
Cumulative
Percent
Percent
Rather satisfied
75
46.9
46.9
46.9
Satisfied
82
51.2
51.2
98.1
3
1.9
1.9
100.0
160
100.0
100.0
Not satisfied
Total
Reward policy according to revenue
Frequency
103
Percent
Valid
Cumulative
Percent
Percent
Valid
Rather satisfied
28
17.5
17.5
17.5
Satisfied
91
56.9
56.9
74.4
Not satisfied
41
25.6
25.6
100.0
160
100.0
100.0
Total
Professional of Employee
Frequency
Valid
Percent
Valid
Cumulative
Percent
Percent
Rather satisfied
40
25.0
25.0
25.0
Satisfied
75
46.9
46.9
71.9
Not satisfied
39
24.4
24.4
96.2
6
3.8
3.8
100.0
160
100.0
100.0
Completely not
important
Total
Product price
Frequency
Valid
Rather satisfied
Percent
Valid
Cumulative
Percent
Percent
3
1.9
1.9
1.9
Satisfied
87
54.4
54.4
56.2
Not satisfied
70
43.8
43.8
100.0
160
100.0
100.0
Total
104
Delivery time
Frequency
Valid
Percent
Valid
Cumulative
Percent
Percent
Rather satisfied
22
13.8
13.8
13.8
Satisfied
94
58.8
58.8
72.5
Not satisfied
18
11.2
11.2
83.8
26
16.2
16.2
100.0
160
100.0
100.0
Completely not
important
Total
Transportation
Frequency
Valid
Rather satisfied
Satisfied
Not satisfied
Total
Percent
Valid
Cumulative
Percent
Percent
20
12.5
12.5
12.5
120
75.0
75.0
87.5
20
12.5
12.5
100.0
160
100.0
100.0
Manage complain
Frequency
Valid
Rather satisfied
19
105
Percent
11.9
Valid
Cumulative
Percent
Percent
11.9
11.9
Satisfied
11
6.9
6.9
18.8
Not satisfied
90
56.2
56.2
75.0
40
25.0
25.0
100.0
160
100.0
100.0
Completely not
important
Total
5.3. The factors affecting the purchase decision
Company prestige
Frequency
Valid Extremely important
Rather important
Important
Total
Percent
Valid
Cumulative
Percent
Percent
36
22.5
22.5
22.5
110
68.8
68.8
91.2
14
8.8
8.8
100.0
160
100.0
100.0
Distribution policy
Frequency
Percent
Valid
Cumulative
Percent
Percent
48
30.0
30.0
30.0
Rather important
112
70.0
70.0
100.0
Total
160
100.0
100.0
106
Product quality
Frequency
Percent
Valid
Cumulative
Percent
Percent
64
40.0
40.0
40.0
Rather important
48
30.0
30.0
70.0
Important
23
14.4
14.4
84.4
Not important
25
15.6
15.6
100.0
160
100.0
100.0
Total
Product price
Frequency
Rather important
Total
Percent
Valid
Cumulative
Percent
Percent
94
58.8
58.8
58.8
66
41.2
41.2
100.0
160
100.0
100.0
Professionalism of staff
Frequency
Rather important
Percent
Valid
Cumulative
Percent
Percent
99
61.9
61.9
61.9
61
38.1
38.1
100.0
107
Company prestige
Frequency
Rather important
Important
Total
Percent
Valid
Cumulative
Percent
Percent
36
22.5
22.5
22.5
110
68.8
68.8
91.2
14
8.8
8.8
100.0
160
100.0
100.0
Promotion
Frequency
Percent
Valid
Cumulative
Percent
Percent
72
45.0
45.0
45.0
Rather important
71
44.4
44.4
89.4
Important
17
10.6
10.6
100.0
160
100.0
100.0
Total
Customer support policy
Frequency
103
108
Percent
64.4
Valid
Cumulative
Percent
Percent
64.4
64.4
Rather important
50
31.2
31.2
95.6
7
4.4
4.4
100.0
160
100.0
100.0
Important
Total
APPENDIX 6
The reviews the CRM software selection system
VASC CRM
Criteria
Weight
Poin
t
Cost
Service
Suitable
Total
Criteria
E-Business Suite
The
conversion
Microsoft CRM
Poin
The conversion
Poin
The conversion
t
point imputed
t
point imputed
point imputed
0.4
2
0.8
2
0.8
2
0.8
0.3
3
0.9
3
0.9
2
0.6
0.3
2
0.6
1
0.3
2
0.6
1
Weight
2.3
2.0
Business Contact
QuickBooks
Manager
Customer Manager
Poin
t
The
conversion
2.0
Access
Poin
The conversion
Poin
The conversion
t
point
t
point
point
Cost
0.4
1
0.4
3
1.2
3
1.2
Service
0.3
3
0.9
2
0.6
1
0.3
Suitable
0.3
2
0.6
1
0.3
1
0.3
Total
1
1.9
2.1
109
1.8

Chapter 1 INTRODUCTION

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