Seafood Market Research for Dutch and Vietnamese Enteprises

Acknowledgements With sincere, firstly I very much appreciate and would like to thank Drs. J.Vos at Department of Business Administration of Hogeschool Zeeland, as well as my graduation internship tutor. It goes without saying that his devotion and wise advices have largely contributed to my knowledge foundation and to the success of my thesis as well. Another special thank goes to my in-company mentor Marcel P.A. van Boven from The Work Zone B.V. During my working period at Applied Research Centre, he is one of the most responsible individuals in helping me complete this dissertation. On the whole, his kindly support and instruction give me ideas of how to create a frame for the project, how to manage time, problems and all issues related to my plan. In other words, he shows me the direction to achieve my target. I am also greatly indebted to many professors and staff of Hogeschool Zeeland, especially, Drs.J.M.Weggemans, who is always enthusiastic and supportive in coaching and mentoring in most cases. Besides that, my truly thanks to Hai Le and all friends for being by my side and giving the greatest supports of all. Last but not least, I would like to express my deep gratitude to my family with all sincere.

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Seafood Market Research for Dutch and Vietnamese Enterprises

By Nhung Nguyen A Thesis Submitted to Hogeschool Zeeland For the Degree of Bachelor of International Business and Management Studies

Copyright © By Nhung Nguyen The content of this thesis report is the intellectual property of Nhung Nguyen and it must not be sold, licensed, transferred, copied or reproduced in whole or in part, in any manner or in any media to any person without the permission of Hogeschool Zeeland, TWZ-ARC and the writer

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APPROVED By

HZ TUTOR Dr. J.Vos Department of Business Administration Hogeschool Zeeland Edisonweg 4 PO Box 364 4380 AJ Vlissingen Date

Signature

IN-COMPANY MENTOR Marcel P.A. van Boven Medewerker Stage & Detacheringen TWZ, The Work Zone B.V. Tel: 0118-479 207 Fax: 0118-465 963 Date

Signature

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Executive Summary As living condition is improving, people continue to pay increased attention to health and diet. Accordingly, fish and seafood rapidly become one of the most popular food groups. Today, seafood business has been tremendously growing up in term of product-variety, quality, and technique as well. As far as it’s concerned, it is now one of the busiest market place in which more parties, higher investment, and wider attention are involved. Particularly some countries even consider fishery is its national major profit source. Speaking generally, the higher profit shows the higher success of the organisation. In that case it should be never underestimate the importance of how to define and match the supplies with demands (or demands with supplies), how to find the best partners, the greatest advantages in a win-win situation. This thesis was set up to take shape the seafood market research in Vietnam and the Netherlands. Furthermore, analyses and strategies are dissected to point out possible direction to the biggest benefits for Dutch and Vietnamese companies in this business. The goals are aimed to achieve following by some main parts as:  Initially, chapter 1 Introduction will be presented with concern about Problem definition, Objectives, Structure.  Then the chapter 2 Situation Analysis is demonstrated with the overview of Netherlands Economy, Vietnamese Economy and the Cross Culture.  Subsequently, the thesis is not only talking about the Vietnam Market Analysis, but also the Netherlands Market Analysis to give a preview in many aspects, such as: Fishery industry, Segmentation, Competitors, Market access, Buying Behaviour, and SWOT.  One of the most important issues is Strategies, which conducts some suggestion to improve the current business, for instance, strategy for Branding, Competition, Products, Price, Place, Promotion, Purchasing, and Negotiating.  Apart from this, Risks and Hedges are also showed up.  Conclusion and Recommendation will come right after.  As one may expect, Bibliography and Appendices is as well mentioned. 4

Table of Content 1 Introduction.................................................................................................................6 1.1 Problem definition................................................................................................6 1.2 Objectives.............................................................................................................6 1.3 Structure...............................................................................................................7 2 Situation Analysis.......................................................................................................8 2.1 Economy overview...............................................................................................8 2.1.1 Dutch economy.............................................................................................8 2.1.2 Vietnamese economy..................................................................................10 2.2 Cross culture.......................................................................................................11 2.2.1 Theory of cross culture................................................................................11 2.2.2 Dutch business culture................................................................................12 2.2.3 Vietnamese business culture.......................................................................15 3 Vietnamese Market Analysis....................................................................................18 3.1 Exporting............................................................................................................18 SELLER......................................................................................................................19 BUYER.......................................................................................................................19 3.2 Vietnamese fishery.............................................................................................22 3.3 Segmentation.....................................................................................................26 3.4 Competitors........................................................................................................27 3.5 SWOT.................................................................................................................28 3.5.1 Strengths......................................................................................................28 3.5.2 Weaknesses.................................................................................................28 3.5.3 Opportunities...............................................................................................28 3.5.4 Threats.........................................................................................................29 4 Dutch Market Analysis..............................................................................................30 4.1 Dutch fishery......................................................................................................30 4.2 Dutch market access...........................................................................................33 4.2.1 Regulations.................................................................................................33 4.2.2 Customs duties...........................................................................................34 4.2.3 Tax rates.....................................................................................................34 4.3 Buying behaviour...............................................................................................34 5 Strategies...................................................................................................................37 5.1 Theory of strategic management........................................................................37 REWARD....................................................................................................................37 RISK............................................................................................................................37 5.2 Strategies for Vietnamese exporters...................................................................38 5.2.1 Branding......................................................................................................38 5.2.2 The 4P’s strategy mix..................................................................................39 5.3 Strategies for Dutch importers...........................................................................42 5.3.1 Purchasing...................................................................................................42 5.3.2 Negotiating..................................................................................................42 6 Risks and Hedges......................................................................................................43 6.1 Definition of hedging.........................................................................................43 6.2 Risks and hedging..............................................................................................43 6.2.1 Currency risk ..............................................................................................43 6.2.2 Price risk......................................................................................................44 6.2.3 Payment risk................................................................................................44 6.2.4 Political risk ................................................................................................44 5

7 Conclusion and Recommendation.............................................................................45

1 Introduction 1.1 Problem definition Seafood market is tremendously developing and promising today. Demands are increasing significantly. The Netherlands seems to be a good market to penetrate, and Vietnam should be a name to be more popular when Dutch importers are looking for seafood sources. However, Most of Dutch seafood companies do not know well about the seafood market in Vietnam. They normally import from China, Bangladesh …In comparision, Vietnam is more competitive in term of price, quality, products variety…With the evaluated product quality and the reasonable price, Vietnam seafood market should be a popular name for Dutch importer. The question is wondered how to find more opportunities in importing seafood from Vietnam?. For whom it may concern, the thesis gives more information and market analyses in every aspect of Dutch and Vietnamese seafood markets. The problem definition turns out to be How to improve the seafood business situation between Vietnamese and Dutch enterprises .

1.2 Objectives Regarding to the problem definition, this project is carried out, firstly to give an overview of Vietnamese and Dutch market, and hopefully can find a possible solution for a better business in Dutch and Vietnamese seafood. The thesis plan is based on researching for seafood market information, then giving analyses in the track of these objectives: • To verify information and potential opportunities about Vietnamese and Dutch seafood markets • Giving researched facts, figures, collected data, compact analysis… • Giving the best information, or view for both parties • Analysing both parties in all weaknesses, strengths, opportunities, threats • Strategies Recommending some solutions, which can help a better successful business partners (Dutch and Vietnamese) in order to achieve the greatest benefit/profit for both sides. The thesis is content of both theoretical and practical parts, which are combined to assist. For achieving the expected objectives, the research progress has been proceeded based on desk researching and some practical activities as following:  Researching, collecting data from many sources for information, facts  Gaining knowledge from studying books, searching other networks, selfexperiences.

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 Theoretical part is conducted from literature-books, and 4- year studying period at Hogeschool Zeeland.  Practical part is conducted by self-analysis, interviews, questionnaires.  Contacting: face to face interview with Dutch wholesaler in Domburg, online interview, phone interview with Vietnamese exporter in Ho Chi Minh city, Dong Thap province, questionnaires are sent to many Vietnamese and Dutch seafood companies (see appendix 9) by e-mails.

1.3 Structure The thesis consists of 7 main chapters. Chapter 1 is the introduction about the problem giving by problem definition, the objectives which are aimed to achieve, and structure. Chapter 2 is giving the analyses of situation with the overview of economy and culture from the Netherlands and Vietnam, also the theory of cross culture. Chapter 3 is involved in analysis about Vietnamese market with all aspect of exporting, Vietnamese fishery industry, segmentation, competitors and SWOT analysis. Chapter 4 gives relevance to the Dutch markets by showing analysis about Dutch fishery industry, and tools to access Dutch market. Chapter 5 will be talking about theory of strategic management, as well as the suggested strategies for Vietnamese exporters and Dutch importers. Chapter 6 comes to potential risks and possible hedges. Chapter 7 is conclusion and recommendation. Last but least, it is following by bibliography and appendices.

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2 Situation Analysis 2.1 Economy overview 2.1.1

Dutch economy

Generally, the economy of the Netherlandsapp.1 is very open and relies on international trade. In addition, it has a prosperous economy, which depends on industry, particularly chemicals and metal processing, intensive agriculture and horticulture, and on its infrastructure, which takes advantage of the country's geographical position at the heart of Europe's transportation network. Its economy is as well noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The country is one of the leading European nations for attracting foreign direct investment. The economy overview of the Netherlands in the recent years is as following: (Figure 2.1) 2005 GDP (Purchasing power parity) GDP-Real grow rate GDP-Per capita (PPP) Unemployment rate Inflation rate

$501.6 billion 0.7% $30,600 6.5% 1.7%

2006 $629,911 billion 2.9% $38,500 3.8% 1.3%

The labour force by occupation of the Netherlands is services (64%), manufacturing (29%), agriculture (4%). From the list of countries by GDP app.2 , the Netherlands is the 16th largest economy of the world at this moment. The Netherlands has focused its industry in some main sectors such as: agriculture, metal and engineering products, electronic machinery and equipment, chemical, petroleum, construction, microelectronics, fishing. In particular, the agriculture and fisheries sector and traditional Dutch activities account for some 2% of GDP. Alternatively, the Dutch economy has been positively growing with a lower deficit (from 2.1% of GDP in 2004, to 0.3% of GDP in 2005). In the early nineties, its public debt stood at 80% of GDP, and now down to 53% in 2005, 51% in 2006, and is expected to fall below 50% in 2007.

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Based on recording, trading business is seemed to be strong and developing. The Netherlands, which derives more than two-thirds of GDP from merchandise and services trade, continued to have a strongly positive balance of goods and services trade for 2005 of $42.2 billion, close to 7.7% of GDP, and the main contributor to a current account surplus of close to 8.8% of GDP. (Figure 2.2) 2005

2006

$365.1 billion

$400.5 billion

Germany(25%) Belgium(12%) France(10%) UK(9%) Italy(6%) US(4%)

EU (76.8%) Germany (23.6%) Belgium (11.9%) China (0.9%) U.K. (9.3%) U.S. (4.9%).

$326.6 billion

$355.8 billion

Germany(17%) Belgium (9%) China (9%) US(8%) UK (6%) France (5%)

EU(55.0%) Germany(19.0%) Belgium (10.7%) China (7.7%) UK. (6.3%) US. (8.0%).

Exports

Imports

Although the private sector is the cornerstone of the economy, the Netherlands has an important and vibrant public sector. The government plays a significant role through permit requirements and regulations pertaining to almost every aspect of economic activity. The Netherlands generally pursues its foreign policy interests within the framework of multilateral organizations. The Netherlands is an active and responsible participant in the United Nations as well as other multilateral organizations such as NATO, the EU, OSCE (the Organization for Security and Cooperation in Europe), CoE (the Council of Europe), the OECD, the WTO, and the IMF (International Monetary Fund) app. 3 (abbreviation) (Figure 2.3) The Dutch economic forecast for 2007 GDP $710.6 billion GDP-Growth rate 3.1% GDP-Per capita (PPP) $42,763 Inflation rate 1.6%

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2.1.2

Vietnamese economy

Vietnamapp.4 has lately being considered as a dynamic, stable, and fast-growing economy. In general, the overview of its economy is quite promising: (Figure 2.4) GDP-PPP GDP-real grow rate GDP-Per capita Unemployment rate Agriculture Industry and services Industrial growth rate

$203.7 billion 7.2% $2,500 6.1% 63% 37% 16%

Its industrial products are mainly food processing, garments, shoes, machine building, mining, cement, chemical fertilizer, glass, tires, oil, coal, steel, paper… In 2004 Viet Nam’s economic growth for the first eight months of the year was estimated at 7.5 % and reach the year-end target of 8 %. Up to the end of the year, the country earned $ 24 billion from export revenue, a 19 % increase year-on-year. By 2006, Vietnam has reduced the percentage of its people living in poverty less than $1 a day, means 8% (when it was 10.5% in 2003, 51% in 1990). Deep poverty, defined as a percent of the population living under $1 per day, has declined significantly and is now smaller than that of China, India, and the Philippines. Vietnam is working to promote job creation to keep up with the country's high population growth rate. Furthermore, private sector obtained strong growth of 37% with investment up by 32%. The sector has generated between 1.6 and 2 million jobs so far this year. As a result, the government has made progress in reducing poverty and maintaining robust rates of economic growth. The value of industrial production reached 354 trillion VND in 2004, 16 % more than in 2003. The proportion of industrial production value in the country’s GDP rose to 41.4%. Of the total industrial production value, the private sector accounted increasingly for 26%, and the foreign-invested sector is 37%, the highest level so far. Economists say Vietnam's economy is making impressive strides recent years. As follows, it shows a huge growth in exports and imports. The export value of industrial products continued to grow year-on-year, and stood at an estimated $18.59 billion in 2004, accounting for 72.1% of the country’s export value. Accordingly, the export figure is 6% higher than the target set by the National Assembly for the whole year. Based on balance of payments data, in 2005 exports reached $32.4 billion, up by 22% year on year, while the import bill increased by around 16% year on year to $33.3 billion. Going along, Vietnam economic growth is expected to top 7% in East Asia and the Pacific (in top 3 after China, Singapore), while developing economies in the region are expected to expand by more than 8% (the World Bank forecast).

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With a lot of favorable signs, Vietnam has become key partner of the EU in Southeast Asia. In 2005, two-way trade between Viet Nam and the EU reached $9.7 billion and total registered investment capital of the EU in Vietnam posted $5.25 billion. Regarding investment, EU countries were among the first investors to come into Vietnam. By the end of 2004, they had invested a total of $6.9 billion, accounting for 9% of foreign investment in Viet Nam. Then the EU poured more than $293 million into Vietnam, representing 64.8% of the total foreign direct investment (FDI) flow into the country in the period. Last but not least, Vietnam's accession to the World Trade Organisation on January 11th 2007, will provide an important boost to the economy and ensure the continuation of liberalising reforms during the forecast period, as well as help Vietnam to improve the country's business operating environment.

2.2 Cross culture 2.2.1

Theory of cross culture

As an idiom people usually say: “In Rome, do what Romans do”, since a long time people realize that culture is a big side of every country and appreciation is always a “should” to do. Nowadays, business in the world becomes more and more international, global as well. Naturally, the top goal of any company in this world is making the greatest profit. Especially companies in international trade, a good partnership is recommended for its business to cash in overseas. Culture is different from every continent, and obviously different from each country. In other words, understanding the ways of the earth’s other people is an essential skill. Someone said “All human being are completely the same, completely different, and partly the same, and partly different”. For instance, people have cultures, however the culture of each is different from others. The concept may be simply illustrated as: (Figure 2.5)

Personality Culture Nature

Culture is powerful and invisible. The effects of it may be out of reach. Culture is mostly defined as “The grand total of all the objects, ideas, knowledge, ways of doing things, habits, values, and attitudes which each generation in a society passes 11

on to the next”. In other words, culture is a pattern of beliefs and expectations shared by the organisation. Moreover, it is also noticed in different types: (Figure 2.6) CU LT UR

Culture as Culture as a Culture as Culture as Culture as symbols stabilizing evolutionary Furthermore, people within the same culture will carry different cultural worldview civilization mechanism psychology layers/level in their mental programming: Furthermore, people within the same culture will carry different cultural layers/levels in their mental programming: (Figure 2.7) Cul tur

National level

Regional level

Gender level

Generation level

Social class level

Corporate level

On the whole, every culture has three major key elements: Shared values, Beliefs, and Behavioural Norms. It is said to be difficult to be well acquainted with people in the same culture. That means it is even more difficult in order to get used to the new culture. In a cross-cultural situation, the problem is mostly doubled because we then have to know the Shared values, the Beliefs, the Behavioural Norms from two cultures, not from one as before. This is to say the need to study, understand and integrate the new culture is largely necessary when we are doing business with organisations that are from other culture. To sum up, the better understanding of culture/cultural differences, the greater success in business and target market.

2.2.2

Dutch business culture

General speaking, the Dutch society is egalitarian, individualistic, and modern. The people are modest, tolerant, independent, and self-reliant. They value education, hard work, ambition and ability. In addition, they have pride of their cultural heritage, rich history in art and music. They are greatly involving in the

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international affairs. When having business contacts with a Dutch firm, there are some points that the foreign party should take into account. When you first meet the Dutch partner, the Dutch will shake hands and say their last name, not “Hello”. Identify yourself is considered important mandatory to a Dutch. When entering a meeting room, if you are not introduced by your acquaintance, you do it yourself. It is customary to shake hands with everyone presenting there. Shake hand again when you leave. It is appropriate to discuss during lunch or dinner. Business breakfasts are not very common. One should always ask if the host expects your spouse/partner to be present at a business function. In most cases, it is considered rude to leave the table during dinner (even go to the bathroom). Having an appointment with Dutch is a serious punctuality. In case of lateness, missed appointment, postponements, or changing the time of appointment, it should manage in a timely manner. However, those cases mostly lead to a bad impression from Dutch. Therefore, awareness of being on time is a “must”. When doing business in the Netherlands, the appropriate wearing for men are suits and ties. It’s better not to roll up the sleeves of your shirts. Sometimes sport coats are acceptable. Women should wear suits or dresses. In a conversation, one should not mention “Holland” as a synonym for the Netherlands because “Holland” is only a region in the Netherlands. The Dutch tend to get right down to the business. They maintain lots of eye contact while speaking, as regard to honesty. Dutch people are frank and direct, hence they give straight “Yes” and “No” answers. When they have a disagreement, perhaps they will argue but rarely means an offence. The Dutch avoid giving superlative compliments. Mostly, “Not bad” or “OK” is remarked as praise. At business meeting, gifts are not generally expected. Besides, business cards are exchanged during or after the conversation. On the whole, the business presentation should be practical, factual, and sloppiness is never acceptable. As far as it is concerned, Dutch have a small difference in negotiation process, compare to Vietnamese. During the negotiation process, the Dutch will pay more time for the decision-making process. They tend to carry it very carefully, step by step with a well-prepared knowledge and great care of research. Once the decision is dealed, it would be rare to change it, and the work will be implemented soon and steadily. On the contrary, the Vietnamese may go the other way around, their decision-making process may take less effort. However, on the way of implementation, it may speed down, it may have unexpected negotiation to gain more profit. The explanation can be expressed in brief, as being showed following:

(Figure 2.8)

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DUTCH Fast

Slow Decision-making

Implementation

VIETNAMESE Fast

Slow Decision-making

Implementation

Some other aspects that should pay attention to, such as: • • • • • •

Ostentatious behaviour is avoided. The Dutch value privacy and seldom speak to strangers Do not discuss money, salary or ask personal questions Do not use the middle finger to point. Keep your hands out of your pockets while talking to someone or shaking hands. Always ask before lighting up a cigarette.

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2.2.3

Vietnamese business culture

Culture variations app 5 and Bureaucracy and Culture app 6 can affect the way people communicate. As a Communist Asian country, Vietnamese culture more or less has characters belong to high-context communication. Perhaps some people may find difficult to deal with this because one Vietnamese word has many meanings, non-verbal gestures may have different meanings in different circumstances. Despite the complexity, you will understand and get used to it if you pay a little attention. In general, Vietnamese culture stresses on tradition showing by their great importance to family and honouring their ancestors. In business, when you are initially contacting with a Vietnamese organisation, it is often the best to be introduced through a third party which is acquainted by the organisation. In case you want to have self-introduction by your own, it is better to begin with an explanation of what led you to contact this particular organisation. In Vietnam, the business meetings, and face-to-face discussions are more favoured than telephones calls or letters. Normally, the first meeting is organised as a formal introductory session. The common greeting in Vietnamese is saying “Xin chào” + given name + title. “Xin chào” is used both when you want to say hello and goodbye. The Vietnamese shake hands with both men and women at the beginning and the end of the meeting. Particularly, members of the same-sex may hold hands or putting arm around someone as regarded as being friendly.

However, they rarely give women a greeting kiss on her cheeks or hands because it is mainly offensive to Vietnamese women. Instead, you may shake hands or bow your head slightly to show respect as the following picture:

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In majority, Vietnamese names are structured as: Family name + Middle name + Given name. Women always keep their family names once they marry. In honorific case, a person will be addressed as: Mr./Mrs…+given name, instead of their family names because there are many people with the same last namesapp.7. For example: Trương Đức Trung, will be addressed as Mr.Trung Family name + Middle name + Given name Trương

Đức

Trung

When meeting, business cards are always exchanged in the beginning. Asian in general and Vietnamese in specific view the exchange of business cards as a very necessary opening ritual. “The Vietnamese often use both hands to receive and give cards and also slightly bow their head to indicate respect”. In order to show a greater appreciation, you may take a look at the card to pronounce the name and title of your counterpart. In particular, the card is always given to the most senior first. Business wearing may be a suit and a tie for men and suit or dress for women. The trend in the South is to be more casuals, suit jackets are worn only on very formal occasions and first meeting. Moreover, be aware that it may lead to missconsidered if women wear heavy makeup or have revealing clothing. Vietnamese in meeting seldom give opinion due to the fact that behind the scenes is complicated and the apparent decision-making is mostly not summed up by only one person. “Business gift is fairly given at the end of a meeting or during a meal in honour of your business associates”. The perfect gifts could be something with your company logo or typical souvenirs from your country. Nevertheless, it should be very careful when giving gifts in an office, because in most cases, it is accidentally assumed as a bribe. Apart from that, there are some other aspects should be also noticed, for example: 16

• • • • • • • • • • • • •

Do not touch someone’s head Do not stand with your hands on your hips, especially when talking to elder or senior people Do not place one or both hand in your pockets when walking. Do not put one’s feet on a table or desk. It is consumed as being rude in Vietnam. Do not pass anything over someone’s head. Pass objects with both hand to elder people Do not cross middle finger over fore finger because it is obscene in Vietnamese culture. Sometimes nodding only means they are listening, it does not mean “Yes” in this case. Avoid summoning someone with a curled index finger. People might beckon someone who is younger or lower “status”. To beckon, it should extend your arm, palm down and move your fingers in a scratching motion. When Vietnamese receive compliment, normally they deny it. They consider it as the modesty. Dates are shown in day/month/year format. Decisions are made by committee. Corruption is still widespread.

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3 Vietnamese Market Analysis 3.1 Exporting The effect of export Obviously, selling abroad helps to gain economy in production at home, which means lower prices to consumers of domestic products. Export brings in foreign exchange, lowers the balance of payment, increases quality of life and raises the Gross National Product (GNP) of a country. Moreover, for the individual firm, a lowering of products costs tends to improve its competitive position both at home and abroad. In general, export may also have an influence on the general business conditions of a country. Particularly, for its individual firm, export may help to enhance domestic competitiveness, increase sales and profits, gain global market share… “During a domestic business downturn, exports generally tend to hold steady and sometimes even increase, thereby softening the effect of the recession”. Namely, exports will tend to have a positive effect in a country. Methods of international payments There are many ways to make and receive payment in international trade. Due to the physical distances between buyer and seller, and the fact that the transaction may have taken place without the two parties actually meeting, minimizing exposure to risk is on the minds of both parties. The buyer wants to make sure they receive their order in acceptable condition and on time, and the seller needs to know they will get paid for it. Here are some common methods of payments that have been applied during international trades: Letters of Credit (L/Cs) This is an ideal method in international trade of regulating the interests of buyers and sellers in an even-handed manner. A letter of credit represents a bank’s commitment to pay a specific sum to the supplier of merchandise, against receipt of a specified list of documents with an agreed time frame. The flow diagram can be simply drawn as:

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(Figure 3.1) SELL ER

BUY ER

Contract

• • • •

Step 2

Step 4

Seller’s Bank (Advising Bank)

Credit application

Advice

Step 1

Step 3

Credit

Buyer’s Bank (Issuing Bank)

Step 1: The buyer and the seller conclude a pro-forma invoice or sale contract providing for payment by documentary credit. Step 2: The buyer instructs his/her bank (issuing bank) to issue a credit in favour of the seller Step 3: The issuing bank asks another bank which is usually in the country of the seller, to advise/confirm the credit Step 4: The advising bank informs the seller that the credit has been issued.

With this method of payment, the process works both in favour of both the buyer and the seller. It verifies that the payment will be guaranteed when the bank is presented with concrete documents. Most letters of credit are "irrevocable", once the importer has had them sent, which means it cannot be changed unless both the buyer and seller agree. In most cases, Vietnamese exporters apply for 90-day L’Cs, which means the importers need to pay within 90 days since the goods are on the ship. Bill of exchange/Draft A bill of exchange is a negotiable instrument that is easily transferable from one party to another. Normally this instrument is used when exporters and importers have established good relationships. In short, the bill of exchange is a written order from the seller to the buyer to pay a specific sum of money on a specific day. The exporter ships the goods, and then gives the documents (including the bill of lading necessary to claim the goods at the foreign port) to his bank (advising bank), which will forward them to a bank in the buyer's country (issuing bank), along with instructions on how to collect the money from the buyer. When the issuing bank receives the documents, they will contact the buyer and provide documents to the buyer only when the buyer pays. (Figure 3.2)

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Goods

SELLER

BUYER

Step 2

Money

Document

Step 1

Step 3

Step 4 Advising Bank • • •

• •

Money

Document Issuing Bank Step 5

Step 1: As soon as the seller receives the credit, which can meet terms and conditions, the seller is in a position to load the goods and dispatch them. Step 2: Then the seller sends the documents to prove that the shipment to his advising bank. Step 3: The advising bank checks the documents against the credit. If the documents meet the requirements of the credit, the bank will pay/ accept/ negotiate, according to the terms of the credit. Step 4: The advising bank sends the documents to the issuing bank. Step 5: The issuing bank checks the documents, if they meet the credit requirements, issuing bank will reimburse the advising bank who has paid/ accepted/ negotiated under the credit.

Cash in advance In some cases, exporters might request cash payment in advance of shipment. This is the easiest payment from and is typically used when samples or small quantity shipments. It is also used between buyers and sellers who have already established a mutual trust. On the buyer’s behalf, this method of payment assumes absolute confidence in his seller. For the seller, it is the fastest and simplest form of payment. For Vietnamese exporters, they might accept the payment of cash after three or four times transfer with their clients by L/Cs. In principle, buyers pay first 20% of total amount in advance, next 20% when the goods are on ship, and last 60% within two or three months coming up. Sales on open account

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With this method, goods are paid after delivery. Namely, the exporters receive payment after the importers has received and inspected goods. This technique is frequently used in selling between intra-corporate to its branches or its subsidiaries. Sales on open account is more often in the area where exchange controls are minimal and exporters have long-standing relations with buyers in nearby or long-establish market. Incoterms Incoterms are a set of rules for the interpretation of the most commonly used trade terms in international trade – International Commercial Terms. The International Chamber of Commerce (ICC) first published them in 1936. The latest update was in 2000. The terms describe the condition of delivery, the passing of the risk from seller to buyer, customs affairs and the splitting of cost in detail. Delivery, risks and costs are known as the critical points. Most of all, the main purpose of Incoterms is to clearly set out the obligations of the seller and the buyer in relation to the delivery of the goods and the division of functions, costs and risks related to the delivery. In general, the thirteen Incoterms are split into four distinct groups: (Figure 3.3) Group E Departure- Where the goods are made available to the buyer at the seller's premises

EXW

Ex Works

FCA

Free Carrier

FAS

Free Alongside Ship

FOB

Free On Board

CPT

Carriage Paid To

CIP

Carriage and Insurance

Group F Main Carriage UnpaidWhere the seller must deliver the goods to a carrier appointed by the buyer Group C Main Carriage PaidWhere the seller must contract for the carriage of the goods without -assuming risk of loss of, or damage to the goods or

Paid to CFR

Cost and Freight

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additional costs due to events occurring after shipment

CIF

Cost, Insurance and Freight

DAF

Delivered At Frontier

DDU

Delivered Duty Unpaid

DDP

Delivered Duty Paid

DES

Delivered Ex Ship

DEQ

Delivered Ex Quay

Group D Arrival- Where the seller has to bear all costs and risks required to bring the goods to the place of destination

In case of carriage of good by sea, most of Vietnamese exporters and their clients agree in term of FOB. By this term, the seller has to pay for the costs for transport, and the buyer is the one who choose the ship and pays for the freight. Once the goods have passed the railing of the ship, the seller is no longer at risk concerning them. Costs and risks sharing as following: (Figure 3.4) Packing Pre-forwarding Outwards customs clearance Loading onto the main transport Main transport Transport insurance Uploading off the main transport Inwards customs clearance Post-forwarding

Costs Seller Seller Seller Depending on contract Buyer Buyer Buyer Buyer Buyer

Risks Seller Seller Seller Depending on contract Buyer Buyer Buyer Buyer Buyer

3.2 Vietnamese fishery Fortunately, Vietnam has a great favour in its fishery industry due to the advantages which are brought by its natural environment. With its particular terrain, rivers and oceans in Vietnam give a special condition for fish app 8 growing. Especially, every part of the country has its own region which has a strength in some particular products. For example: Mekong-Faces of a River, Ô Môn22

Rosenberg Shrimp, Cà Mau- The Shrimp Delta, Bến Tre-The White Clams, Cần Thơ-The Land of Pangasuis, Phú Yên-The Tuna, Nha Trang-Street of the Lobsters. That is the reason why Vietnamese fisheries have their products in variety and diversification. Especially, the Tra fish, Basa fish, which are very popular now, can be only raised best here with the taste and quality that no products from other countries can compare to. Vietnamese Tra and Basa catfish now are available in 65 countries and territories worldwide. The catching field is distributed as follows: (Figure 3.5) Southeast

48,6% of catchments

Southwest

12,1% of catchments

Central coastline

14,3% of catchments

Ocean floating

7,1% of catchments

Tonkin Gulf

17,9% of catchments

In recent years, the Vietnam Fisheries Association has focused on reorganizing its operating structure from the central down to local levels, implementing modern fisheries encouragement models, expanding international co-operation and promoting trade, export and investment activities. Besides, Vietnam is now the 6th largest seafood exporting country worldwide, and it will be a significant global player in the seafood market in the years to come. Major exported products are frozen shrimps, cuttle-fish, octopus, various types of fish, and dry sea food, of which fish products made up 371,000 tons, while frozen shrimps accounted for 138,000 tons. In 2005, seafood from Vietnam was exported to 105 countries and territories in the world. Moreover, the export to reach these markets has strongly increased: 196% in Russia, 53% in Belgium, 55% in France, and 82% in the Netherlands.

23

In 2006, Vietnamese seafood has the most signficant growth in EU market, increase 87% compare to previous years. (Figure 3.6)

Be lg iu m

in Sp a

Ita

s

Ne t

he

rla

nd

an m er G

ly

102 100 98 96 94 92 90 88 y

Value (Million$)

Value of seafood exporting in EU market, 2006

Countries Since the beginning of 2006, the fisheries sector has net 3.4 million tons of seafood, a rise of 8% over the same period last year, of which aquaculture breeding products reached over 1.5 million tons. During this year, Vietnamese seafood export value reached $3.3 billion, $500 million above the target, increasing of 21.6%. (Figure 3.7) Main exported products in 2006

27% 42%

Shrimps Frozen fish Cephalopod

4%

Others 27%

24

Accordingly, markets and seafood structures also made significant progress. With regard to a report by non-governmental organisation Inforfish in Asia, Vietnamese seafood export increased 983-fold in the past 10 years. In addition, total 209 Vietnamese enterprises are allowed to export seafood to the EU, and Vietnam is included into the EU first list of seafood exporters. So far, the EU takes 23.4% of Vietnam’s total fishery exports, ranks the second biggest market of Vietnamese seafood export. (Figure 3.8) Value of Vietnamese seafood exporting in 2005, 2006

Value (million$)

1400 1200 1000 800 600 400 200 0 Japan

USA

EU

Others

Countries

Year 2005 Year 2006 In the year 2006, Vietnamese seafood exports significant grow in three main markets: Japan, US and especially EU. Moreover, in 2007, prediction will sate a 10%-15% increase in order from EU customers. (Figure 3.9) Quota of Vietnamese seafood exports in 2006

Market

Vietnamese segmentation

Japan US EU

1

0

50000 100000 150000 200000 250000 300000 350000 Tons

25

3.3 Segmentation Market segmentation is always one of the significant issues in a company’s business. Segmentation is breaking down the market for a particular product into segments of customers. By doing so, the firm can frame policies to the need of its specific segmentation, which means can help to obtain greater profits. To exporters, the issue of segmentation is even more important due to some differences between countries, for example: economic, cultural and political environment, buying behaviour... There are at least 4 points that segmentation should meet to be effective: • Measurability: the degree to which segments can be identified or measured in term of size, and purchasing power. • Accessibility: the degree that the segments can be effectively reached and served. • Profitability: the degree to which segments are large or profitable enough to serve. • Actionability: the degree to which effective programs can be formulated for attracting and serving the segments. In general, Vietnamese exporters tend to use geographical and demographical aspect to segmenting their business markets. • Geographic: world region, country, country region, city or metro size... • Demographic: industry, company size, location... They want to diversify their export markets. Currently, three major clients of Vietnam are EU, US, Japan. In particular, the EU is a large and stable market which consumes about 20% of Vietnamese seafood exports. Moreover, Dutch clients account for about 13%-15% of Vietnamese seafood exports with the major customers are wholesalers, distributors… In general, the Netherlands is one of the big markets of seafood importing in Europe. In order to fulfil the strong growing demand, it imports seafood from many countries in the world. Even it does not have a big population, but it still ranks as the 2nd biggest exporter in EU due to its re-exporting to neighbour countries. This is to say, Netherlands is a very potential market for Vietnam to expand.

26

(Figure 3.10) Volume of Dutch seafood imports 1000

Tons

800 600 The Netherlands 400 200 0 1990

1995

2000

2003

2004

Year

In particular, The Netherlands is considered an important and distribution centre to its position as a gateway to Europe with a big international seaport, extensive train system, and routes linking with other countries. The advantage supports a stronger development in two-way trade between Vietnam and the Netherlands. Recently, it has seen tremendous growth in the volume of exports from Vietnam to the Netherlands with the value of seafood export is about $31.5 million.

3.4 Competitors Seafood market is a very competitive and tough place for business players. Changing the structure of seafood exploitation, the sharp increase of seafood demand, the strengthening of protection measures and changes in consumption are bucking the global fisheries sector. The changes in the seafood market have made great influences on seafood processors and traders. About 180 countries are involving in the world seafood market. As one may expect, Vietnam seafood has been growing to be a big supplier in international market even it still has some competitors from the same continent. China is one of Vietnam’s competitors in seafood market. Due to a huge population, China has strength in labour aspect, especially the low labour costs. With a quick response to the new trend in the market, China has a large aquaproduction volume in the world. Recently, China buys catfish breeds from America, raises and re-exports to international market. That is to say China becomes Vietnam’s competitor in catfish category. Other competitor may be assumed as Thailand. Thailand is a very price competitive and is able to supply the fish variety, and shrimps in particular. Thailand is also a neighbouring country which provides distribution advantages to its live fish suppliers. Bangladesh, Myanmar, Indonesia, India have advantages when EU give those countries a tax rate of 0%, while the tariff for Vietnam is 4%.

27

However, Vietnamese seafood is more competitive than Indonesian and Indian products in terms of quality, the most important factor for importers.

3.5 SWOT 3.5.1 •

•

• •

Resources: natural condition brings back a lot of advantages and strengths for the fishery industry. The country has a coastline of 3260km, with 112 river mouths, creeks, with the sea territory of 226,000km2, with 4000 big and small islands, creating many harbours, gulfs, lagoons, and catching fields with the marine resource of almost 3 million tons. Product speciality and variety: due to the natural character of water where sea products are raised, some products from Vietnam have the typical taste and quality that other competitors cannot achieve, for example: catfish, Tra fish, Basa fish, tiger shrimp… Product prices are competitive. In general, Vietnamese material costs, labour costs, manufacture costs…are assumed as low. As the result, the product selling prices are vying and acceptable. Basically, Vietnamese workers are hard working, flexible, and adaptive. They’ve learnt and trained to keep up with the changing trend in its business.

3.5.2 •

•

Weaknesses

Weak management capacity: the legal systems of Vietnam’s importers are quite different from its systems. As a result, competitiveness and capacity in settling trade disputes would be limited unless management acknowledge the differences. The fisheries sector’s scale is also still modest, focusing on in-shore catches, while the application of advanced technology in the sector worldwide has expanded widely.

3.5.3 •

Strengths

Opportunities

Vietnam joins WTO. There will be opportunities for Vietnamese fisheries products in particular to enter the world market. Preferences in terms of tariffs, product origins and non-tariff barriers as well as fair and equal treatment in commercial disputes will create favourable conditions to improve the competitiveness of Viet Nam’s fisheries products. And in return, Vietnam can proceed against any foreign partners if they violate international commercial rules.

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• •

• • • • • •

Vietnam gains important achievements in term of stability and economic development. It may give a better impression for foreign customers to establish business relationships. High growth in consumption of marine and aquatic products: people have a greater concern about seafood due to many scientific researches conclude that a regular consumption of aquatic products is very good for health. Especially, Dutch people have a large passion for seafood. Tourism is significantly developing. People are more enjoy eating out. As a result, the demand is possibly increasing. Recently, Vietnamese government give many supports to boost the seafood exports, especially Tra fish and Basa fish. According to ASEAN commitments, Vietnam will reduce tariff to 0-5% by 2006, and 0% by 2010. It goes without saying that there will be less tariff barrier for trading, and trades will favourably grow. EU imposes low tariff, 4%, when importing seafood from Vietnam while Thailand gets the rate of 14%. Recently EU offers preference on investment and technology. Increasing in bilateral or long-term business relationships, it helps to save time and costs, enhance the efficiency in quality control, phytosanitation right, phytosanitation standard (sanitary requirement) …

3.5.4 • •

Threats

Natural resources are exhaustively exploited, with very little possibility for renewal Few Vietnamese exporters only pay attention to profits and ignore product quality matter, or exceed the antibiotic level allowed. It may cause bad image for Vietnam seafood on the whole, when EU gets stricter in phytosanity standard and quality control.

29

4 Dutch Market Analysis 4.1 Dutch fishery The Dutch fisheries sector is becoming more international. Dutch shipping companies are owners or co-owners of German, French or British trawler fleets. Dutch shipowners are also very active in countries outside the European Union (EU). The cutter sector has business interests in many EU member states. In the context of the Common Fisheries Policy of the EU annual catch quotas are allocated to prevent stocks from being depleted. The Dutch policy aims to improve a responsible fisheries based on sustainability. In implementing this policy, the focus is on the distribution of responsibilities in fisheries between the industry and the government and on the relation between fisheries and nature. The Netherlands is an important trader in fish. In 2000, its imports were about 1.4 billion euro. Dutch households have spent increasing amounts on fish products between 1995 and 2000. In 2000, 315 million euro was spent on fish products, up by 39 % compared to 1995. The Dutch fishing industry can be divided into sea, coastal, inland and shell-fish fisheries. Sea fishery comprises commercial harvest of varieties outside the coastal waters, by either cutters or trawlers. The biggest cutter fleet in the Dutch fishery consists of over 400 fishing-boats. The agriculture and fishery sector account for 3% of the Dutch GDP. About 60% of agriculture products are exported. Marine fishery is the most important sector in the Netherlands’ fishing industry. The global fish catch in 2000 was valued at $ 81 billion, and the international fish trade was worth $ 55 billion. Over the last thirty years, demand for seafood products has doubled and is anticipated to grow at 1.5 % per year through 2020. (Figure 4.1) Production Imports Exports

Stocks variations

Total supply

food

Ton live weight Fish for direct human 453 321 consumption

777 585 921 706 71 486

380 686

30

Value of landings by fish auction ($ million) (Figure 4.2) Site

1997 1998 1999 2000 2001 2002

Urk

133 147 165 156 157 141

Ijmuiden

71

67

66

62

59

52

Den Helder

52

57

64

66

63

52

Goedereede

44

44

44

44

44

40

Harlingen

37

43

57

53

62

11

Lauwersoog

36

76

46

44

45

37

Vlissingen

41

37

40

44

44

40

Scheveningen

27

27

26

27

26

21

Breskens

13

13

13

13

19

17

Den Oever

10

13

19

14

22

15

Colijnsplaat

9

10

12

10

12

9

TOTAL ($ million) 475 501 553 535 552 471 By foreign vessels 137 142 160 156 164 138 Marine farming in the Netherlands is dominated by mussel culture on designated culture grounds in the delta of Zeeland, particularly in the Eastern Scheldt, and the Wadden Sea. Some 51 companies in 2002 produced in total 45,000 tons, representing a total value of some $86 million. Production stands currently at about half the level of the late nineties. (Figure 4.3)

Estimated employment (2002): Fish production sector:

2650

Fish auctions:

400

Aquaculture sector:

350

Processing and wholesale sector:

8120 31

Marketing:

5000

Landings sea and coastal fisheries: $ 597 million Shellfish fisheries (mussels only): $ 86 million Inland fisheries:

$ 8 million

Aquaculture (freshwater):

$ 39 million

A further 120 companies acted as wholesale importers. The turnover of wholesale companies that do not process fish was $0.9 billion. (Figure 4.4) Companies (%) Turnover (%) Processing Round and flat fish

31

38

Herring

8

7

Smoking(salmon, eel)

8

4

Shrimps

2

15

Shellfish

11

11

Wholesalers (national)

19

12

Sea frozen pelagic fish 2

12

Others

1

19

Total

280 companies

$ 2.3 billion

Wholesale/importers

120 companies

$ 0.9 billion

Fish accounts for approximately 7.3 % of the average daily protein intake of Dutch (7.8 g per day per capita). The Netherlands have a supply of 24.5 kg per year per capita of fish and fish products. The Netherlands is one of the few EU member states with a positive trade balance in fishery products. In 2002, it imported 641,000 tons valued at $1.6 billion while the exports were $2.5 billion.

32

(Figure 4.5) Companies (%) Turnover (%) Processing Round and flat fish

31

38

Herring

8

7

Smoking(salmon, eel)

8

4

Shrimps

2

15

Shellfish

11

11

Wholesalers (national)

19

12

Sea frozen pelagic fish 2

12

Others

1

19

Total

280 companies

$ 2.3 billion

Wholesale/importers

120 companies

$ 0.9 billion

Fish accounts for approximately 7.3 % of the average daily protein intake of Dutch (7.8 g per day per capita). The Netherlands have a supply of 24.5 kg per year per capita of fish and fish products. The Netherlands is one of the few EU member states with a positive trade balance in fishery products. In 2002, it imported 641,000 tons valued at $1.6 billion while the exports were $2.5 billion.

4.2 Dutch market access 4.2.1

Regulations

Certification and documentation requirements for shipments into EU member states differ depending on the product. For most product groups, requirements are harmonized. Seafood products imported into the Netherlands need to be accompanied by a veterinary certificate. In accordance with its European Union membership, the Netherlands applies the EU rules that are in force in all EU countries. While the Netherlands has a rather liberal foreign trade policy, there are a certain number of restrictions, especially on farm products, following the implementation of the CAP (Common

33

Agricultural Policy), for instance: Certification of Processed Foods with Animal Products, Certification of Seafood Products… Exporting countries must have a competent authority that is responsible for official controls throughout the production chain. In Vietnam, NAFIQUAVED (National Fisheries Assurance and Veterinary Association) is the agency recognized by the EU as the official seafood quality examination body in Vietnam. About the sanitary conditions, the Netherlands agreed on seafood imports with Chloramphenicol residue of less than 0.3 ppb gram.

4.2.2

Customs duties

In the Netherlands, trade within the EU is totally free from customs duties, provided that the country of origin of the goods is one of the European Union Member States. Nevertheless, when introducing merchandises into the Netherlands, exporters shall fill in an Intrastate Declaration. When the country of origin of the goods which are exported to the Netherlands is not part of the European Union, customs duties are calculated on the CIF (Cost, Insurance and Freight) value of the goods, in accordance with the Common Customs Tariff (CCT). The duties for non-European countries are relatively low, however foodprocessing industry sectors have average duties of 17.3%.

4.2.3

Tax rates

Value of importing tax = Value of imported good X Tax rate In particular, value of imported good is calculated in term of CIF which includes cost of good, cost of packaging, cost of exporting procedure, exporting tax (if required), cost of exporting documents, cost of transport to departure harbour, and insurance. Tax rate is depending on product categories and origin of imported goods. Agricultural products are usually imposed at high tax rate, from 0%- 470.8%. Dutch Value Added Tax is 19%, and reducing fair is at 6%.

4.3 Buying behaviour In business to customer aspect, seafood is highly popular in the Netherlands. With a high living condition, Dutch people take good care of health and good attention to nutrient food. The conviction is even greater when researches come to conclusion that seafood contains less fat and cholesterol, provides vitamin, protein, especially omega 3 which helps anti cancer. The average seafood consumption in the Netherlands is increasing year by year. The average seafood consumption per person per year in the Netherlands is 23kg, which is higher than the average of EU in general, 21kg. 34

(Figure 4.6)

Average seafood consumption per person per year in the Netherlands 25

Kg

20 15 10 5 0 1988

1990 1992

1994

1996

1998 2000

2002

Year

Moreover, the buying seafood decision is often consequent by awareness of health, environment or simply by buyers’ personal taste. (Figure 4.7)

Main reasons for seafood buying decision of Dutch consumers

15% 48%

Health Environment Personal taste

37%

In business-to-business consumption, for the most part, importers make a buying decision process in stages as following:

35

Problem recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behaviour

Based on the questionnaire researches app.9, Dutch customers pay much attention to information of the client and client’s products that they are going to have business with. In advance, they will contact the exporters to question all their concerns. Contact would be by e-mail or phones…Then the evaluation is processed with the most influent points are quality and price of the products, selecting among alternatives. When the entire requirement is content, importers make their purchase decision or purchase. In the Post purchase stage, the importers may experience some level of satisfaction or dissatisfaction. In other to have a longterm relationship, exporters should monitor and lead their partners to a Post purchase satisfaction stage.

36

5 Strategies 5.1 Theory of strategic management Definition of strategic management “Strategy is a comprehensive action plan that identifies long-term direction for an organisation and guides resource utilization to accomplish goals with sustainable competitive advantage, as well as fulfil stakeholders’ expectations.” In other aspect, strategic management is the process of formulating and implementing strategies: (Figure 4.8) Identify: mission, objectives, and strategies

Analyze external and internal environments

Revise mission, objectives, and then select new strategies

Implement strategies

Strategy formulation

Evaluate results

Strategy implementation

The Knowledge Framework Knowledge framework helps to structure the issues the companies face and make choices that improve performance in complex situations where businesses meet businesses and organisations need to balance risks and rewards across several decision makers – typically a much more difficult situation than consumer analysis and sales. (Figure 4.9) Knowledge you have REWAR D Knowledge you don’t have Information

S t r

Structural

U n c You know you need

Dangerous

RIS K

You don’t know you need

Disinformation 37

•

• •

• Structural: it is where obvious information is enhanced: management information systems, knowledge management systems... Strategic: it is where thought and consideration are foremost in deriving value from existing information which has not yet brought value: quantitative or statistical studies of customers, correlations between customers and revenue or profit, segmentation analysis, portfolio analysis or scorecard development. Uncertain: the area where patterns need to be challenged and anomalies become paramount Dangerous: the area of poor knowledge or gaps about competitor information and analysis, market research of client perceptions, regulatory futures…

The 4P’s of Marketing (Figure 4.10) Product

Price

TARGET MARKET

Promotion

Place

Marketers mostly use the Marketing Mix model- 4P’s as a tool to assist in defining the marketing strategy. Marketing managers use this method to attempt to generate the optimal response in the target group by blending the 4 variables in an optimal way. Moreover, it as well intends to meet the changing needs of the target market in a dynamic marketing environment.

5.2 Strategies for Vietnamese exporters 5.2.1

Branding

A successful brand is the most valuable resource a party has. The brand name encompasses the years of advertising, good will, quality evaluation, product experience and other beneficial attributes the market associate with the product. Brand image is at the main core of business identify and strategy. In addition, owning a successful brand name gives the party a uniform worldwide image that

38

enhances efficiency and cost savings when introducing other products associated with the brand name. In researching, it presumes that the Dutch market has limited information about Vietnam seafood. They are not aware that the country is the seventh largest supplier of seafood in the world and the third biggest producer and exporter of shrimp. Importers, wholesalers, producers and processors know about Vietnamese suppliers but they hide the identity of origin, in major. In general, brand names of Vietnamese seafood did not receive the appropriate attention while the creation of a brand is a priority for the sustainable development of the Vietnam seafood industry. This is to say Vietnam needs building brand name recognition for seafood. The enterprises must determine which branding strategy to build a brand name. According to specialists, the strategy for branding comprises six basic steps: objective identification, market study, product analysis, the creation of "product characteristics", brand-name design, and finally property registration.

5.2.2

The 4P’s strategy mix

5.2.2.1

Product

Vietnamese sea products are abundant from fresh to frozen, and farmed. However, the biggest increase is in sales of frozen seafood. The variety in fish categories also contributes to the reputation of Vietnamese sea products. The export core should be set to shift to high-value rather than raw products under a long-term strategy. Product decisions also include aspects such as function, appearance, packaging, and warranty… Figure below is The Product/Market Expansion Grid, a device for identifying growth opportunities (Figure 5.1)

Existing market

New market

Existing Products

New Products

Market penetration

Product development

Market Development

Diversification

With existing products and the existing market, in order to be more prosperous in Dutch market, Vietnamese seafood should develop their Market penetration strategy for its products. This is to say Vietnam indentifies and develops new market for its current products.

39

In priority, it should be working as well to improve the quality of breeds, quality of products, and help fishermen and seafood processors reach higher standards of efficiency and hygiene.

5.2.2.2

Price

“Pricing decisions should take into account profit margins and the probable pricing response of competitors.” Vietnam has great resources for producing sea products. Moreover, low cost of labour and manufacture lead to an advantage for Vietnam in the market price competition. With the low tariff, 4%, when export to EU market, the price of Vietnamese seafood is acknowledged as being acceptable and competitive. However, more and more competitors enter the market, the price competition is getting closer to the boiling point, for example, Thailand is a price competitive in shrimp products, China is competitive for catfish….For this reason, Vietnam may apply a price strategy to keep on the price leader in this market. With regard to the setting of price, the party will dominate the market if it has lower costs than its rivals. Low-cost price leadership is considered for Vietnamese exporters. This gives so much power to the low-cost party (the leader) because the follower (the rival) will prefer a higher price for a higher profit. By time it turns out that the follower cannot set the price but accept the price given in the market, due to the leader in the market has set a lower price. It is even worse when the rival cannot afford to get into the price war. With this strategy, the price will come down to a point where the leader can still make profits, but the higher cost producer will be driven out of the market.

5.2.2.3

Place

Place decisions are those associated with channels of distribution that serve as the mean for getting the product to the target market or target segmentation. The distribution system performs transactional, logistical functions. More distributors are optimistic about the state of the seafood-distribution industry these days. Target market is the Netherlands, regard it its location, Vietnam would have some support its distribution. One of the biggest assets of the Netherlands is its harbour zone. It is a country with a high level of purchasing power and its market is very open to competition. On the other hand, the Netherlands is known for being attracted to its neighbourhood stores and having developed its unique cultural identity. The distribution market in the Netherlands is comparable to that of other European countries. Distribution is often done through agents and large importers/distributors. The Dutch market is very competitive and “price” is the determining factor for importers who often demand exclusivity on product distribution from manufacturers. Importer-distributors are very specialized, segmented into a large number of markets niches. The most important exhibitions take place in Amsterdam, Utrecht and Maastricht. There are also permanent exhibition centres which allow the various players in an industry to meet (agents, 40

importers, suppliers have show rooms to greet their clients). It is essential to participate in these show room activities as Dutch entrepreneurs are often wary of new suppliers. To achieve this target, the fisheries sector needs to implement comprehensive measures such as the building of foreign seafood distribution networks.

5.2.2.4

Promotion

Vietnam urges to expand and increases market share in the Netherlands in seafood business. Hence, promotion has played an important part in the strategy to achieve that goal. In fact, The Vietnamese Ministry of Fisheries plans to boost exports this year by spending more on trade promotion, about $630,000. The funds will be channelled through the Vietnam Association of Seafood Exporters and Producers. Proactive investment promotion is an essential feature of a successful national export strategy. It follows that the organizations concerned with investment promotion, and those responsible for establishing and maintaining an internationally competitive investment environment for the country, should be effectively integrated into the national trade support network. The key word here is “effectively”. Export promotion should focus on importers, distributors and merchandisers. Currently, the common advertising activities that Vietnamese exporters have applied are: join international fairs (Vietfish in Vietnam, Bremen in Germany, Conxemar in Spain, Brussel in Belgium…), building websites, advertising by international fishery magazine… Speaking generally, depending on the budget allowed, it may choose the best media for its advertisement strategy. (Figure 5.2)

Print media MEDIA Electronic media

Others

Newspaper, magazines (local daily, weekly…) Business publications (national, regional, international audiences)

Broadcast television Cable television Radio Internet Outdoor Transit Direct mail advertising

The most effective way could be join the trade shows for seafood business, advertising by International Fishery magazine or promoted on many commerce websites. Moreover, establishing an official website for its own company is highly inefficient, and saving cost. Besides, direct mail advertising is always the cheapest method.

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5.3 Strategies for Dutch importers 5.3.1

Purchasing

Importing is a big decision of purchasing. In order to meet with success, purchasing should be a process which includes stages such as: information research about products and products’ supplier, analysis of the market in general, and evaluation in particular, or being critical to an exporter’s success. Through some reliable resources, agencies, organisation, importers may find the best business partners. In addition, purchasing management understands that suppliers should also be involved in the process. Understanding the sensitivities of suppliers and learning what can be done to reduce supplier costs will ultimately benefit the importers’ bottom line.

5.3.2

Negotiating

Dealing with a partner is not an easy work, particularly it is even more difficult when the partner is from a culture different from yours. As being analyzed in term of Cross culture, Dutch and Vietnamese have several points which differ from each other in the negotiation process. In the aim to gain the best situation for both parties, suggested strategy is interestbased bargaining, other name is cooperative bargaining. It is a negotiation strategy in which parties collaborate to find a "win-win" solution to their dispute. In conclusion, this strategy focuses on developing mutually beneficial agreements based on the interests in term of the needs, desires, concerns, and fears important to each side.

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6 Risks and Hedges 6.1 Definition of hedging A hedge is an investment which is made to reduce, cover or even completely eliminate the financial risk of another investment, or the risk of adverse situation that may occur during the business movements. A part from this, it purchases an offsetting position or financial instruments for the purpose of offsetting the profit or loss. In other words, “it is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity”.

6.2 Risks and hedging Exporting is a business trade spreads widely from countries to countries. Obviously, it may not only give so many profits, but also some challenges, and risks. Following are some common risks that Vietnamese exporters possibly encounter in their business. Besides the risk identifying, the possible hedges are recommended as well.

6.2.1 •

Currency risk

Risk identifying: This risk arises from the change in price of one currency against another. Namely, the business will be affected (gain or loss) by changes in exchange rate when currencies are converted. At this moment, the exchange rate from Vietnamese currency (VND) to Dutch currency (Euro) is approximate: 2003

2007

1VND= 0.0001 Euro 1 Euro = 10,000 VND

1VND= 0.00005 Euro 1 Euro = 20,000 VND

Namely, VND depreciates against Euro. This is to say the value of Euro has been growing strongly against the value of VND. •

Possible hedge: this risk is possibly controlled by a forward contract. It is a pre-agreement states that the holders are obligated to buy or sell the currency at a specified price, at a specified quantity and on a specified future date. That is to say, it protects products' value in a foreign currency against unexpected rate fluctuations for a specific amount of time.

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6.2.2

Price risk

•

Risk identifying: Basically, it's the risk causes a loss due to unexpected changing in the market price of the products owning. As the matter of fact, no one can predict exactly the prices of products whether go up or down in the future. Here it concerns two cases that exporters may suffer a loss when:  The price of raw product goes down just after the exporter makes his purchasing.  The price of product in the market goes up just after the exporter sells products to his clients.

•

Possible hedge: the potential hedge in this case is essentially opening a position “Sell to open”, and close options position by using “Buy to close”. Namely, it is holding a short position (contract writer) can sell to open (enter a contract) or buy to close (close a position). In summary, it will open by signing a Sell Future Contract in the seafood market at the current price and close the business by signing a Buy Future Contract at the price the exporter predicts that it can drop to.

6.2.3

Payment risk

•

Risk identifying: in some unfortunate cases, the payments of clients are not guaranteed as it is called delayed payment, and sometimes nonpayment. That is the most major payment risk.

•

Possible hedge: as being illustrated in the previous part, some methods of international payments can be taken into account as hedging, for example: cash in advance, letters of credit, bill of exchange/draft…

6.2.4

Political risk

•

Risk identifying: selling products abroad is highly profitable due to great margin and brisk demand. However, changes in political term of regions can quickly result a risk to seller value such as: the creation of laws that prevent the movement of capital, corruption or prejudicial actions against companies from foreign countries…

•

Possible hedge: some options are using market knowledge and leverage to obtain the highest quality protection, conducting a research on the riskiness of a country, or purchasing political risk insurance.

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7 Conclusion and Recommendation Vietnamese seafood is more and more popular and appreciated in the international market. With its reputation and success, there will be a big door for Vietnam to expand in seafood market of the Netherlands. Dutch market is open and dynamic, however, it is assumed as competitive, and very strict in sanitary and quality. Establishing a long-term business relationship with Dutch partners will take time and should be done together with developing in every aspect , for instance, in product quality, quantity, brand name… To the Dutch side, a successful partnership will lead to a successful in business. Possibly the suggection is to begin with information researches, analysis... Wellprepared information background and effective middlemen, liaisons also help to shorten the way to organisations’ goals. Following the knowledge Framework, the position of Vietnamese seafood is standing at Strategic area. Vietnamese seafood is newly getting to be well-known in the international market. In order to be more successful in this competitive market, Vietnamese seafood shall find the strategy which is appropriate the most, then implement and develop to derive knowledge, opportunities, and strengths to virtual values. Based on the analysis of SWOT, which is mentioned in previous chapter, the 4P's strategy is greatly suggested to help enterprises succeed. Moreover it needs to implement, and support measures for the strategy to maintain and expand market for aqua product exports, some recommendations is briefly summarized as following: • Improving the competitiveness of export aqua products. • Quality is always the most concern from importers, there is a necessary to improving the quality of Vietnamese sea products. Product producers and exporters have to apply the HACCP standard, as well as ISO 9000, completing the quality control system, sanitary requirement. Moreover, products should be diversified. The product structure would be: live and fresh products, value added products, frozen processed products. • Developing in trademark, brand name to achieve a greater recognition. • Other aspect is improving the price competitiveness of Vietnamese sea products, increasing raw material supply, opportune giving capital investment for fishery activities. • Promotion is one of the keys to a positive result in business. Spending proper budget in promoting marketing activities, with more marketing at the macro level. • Creating direct product distribution may help in cost and time savings. • In this globalize business, there will be more advantages when enhancing international cooperation which may contribute to funding, transfer technology, human development, and market expansion.

45

Bibliography •

Books

“International Marketing”, 2002, Philip R.Cateora & John L.Graham, ISBN: 0071123121 “The Economics of Industries and Firms”, 2002, Ken Heather, ISBN: 027365585X “Principle of Marketing”, 10th Edition, Philip Kotler & Gary Amstrong, ISBN: 0131212761 “International Marketing and Export Management”, 1998, Gerald Albaum, Jesper Strandskov and Edwin Duerr, ISBN: 0201419645 “Global Marketing”, 3rd Edition, Warren J.Keegan & Mark C.Green, ISBN: 0130669989 “Management”, 2002, John Schermerhorn, ISBN: 0471435708 “Practices of International Product Trade”, 2003, O.Van Geuns, ISBN: 9080211532 •

Websites:

https://www.cia.gov/cia/publications/factbook/print/nl.html http://fita.org/countries/nl.html http://www.lei.dlo.nl/publicaties/PDF/2005/PR_xxx/PR_05_10_summary.pdf http://www.pvis.nl/engels/home.html http://www.siamcanadian.com/product.htm http://www.seafood.com/Default.aspx? tabid=30 http://www.euroseafood.com/07/public/enter.aspx http://www.seafoodtrades.com http://www.vneconomy.vn/ http://news.bbc.co.uk/2/hi/business/6084910.stm http://www.boston.com/news/world/asia/articles/2006/11/16/vietnams_economy_mak ing_strides/ http://www.siamcanadian.com/vietnam-seafood/exports.htm http://www.foodproductiondaily.com/news/news-ng.asp?n=59553-eu-delegation-to http://www.sea-ex.com/cgi/ssearch.cgi http://economist.com http://www.seafoodfromvietnam.net http://www.fistenet.gov.vn http://www.pmforum.org/library/papers/2004/CultureBudapest.pdf •

Others:

Handout of Zeeland.

“Strategic Management” course, by professor Bosma, Hogeschool

46

Appendices Appendix 1 The Netherlands

Country name: conventional long form: Kingdom of the Netherlands conventional short form: Netherlands local long form: Koninkrijk der Nederlanden local short form: Nederland Location: Western Europe, bordering the North Sea, between Belgium and Germany Capital: Amsterdam; The Hague is the seat of government Government type: constitutional monarchy Administrative divisions: 12 provinces Area: total: 41,526 sq km water: 7,643 sq km land: 33,883 sq km

47

Appendix 2

List by the International Monetary Fund Rank

Country

GDP (millions of USD)

---

World

44,454,843

---

European Union

13,502,800

1

United States

12,455,825

2

Japan

4,567,441

3

Germany

2,791,737

4

China

2,234,133

5

United Kingdom

2,229,472

6

France

2,126,719

7

Italy

1,765,537

8

Canada

1,132,436

9

Spain

1,126,565

10

Brazil

795,666

11

South Korea

787,567

12

India

771,951

13

Mexico

768,437

14

Russia

763,287

15

Australia

708,519

16

Netherlands

629,911

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Appendix 3 Abbreviation AAF ADB AFTA APEC ASEAN CAP CCT CoE FAO FDI FOB GMP GNP HACCP ICLARM IMA IMF INCOTERMS ISO IUCN MRC NACA NAFIQUAVED NATO OECD OSCE SEAFDEC SIPA SWOT UNDP VASEP WB WTO

Asean Aquaculte Federation Asean Development Bank Asean Free Trade Area Asia-Pacific Economic Cooperation Association of South East Asian Nations Common Agricultural Policy Common Customs Tariff Council of Europe Food and Agriculture Organization Foreign Direct Investment Free On Board Good Manufacturing Practice Gross National Product Hazard Analysis Critical Control Point International Center for Living Aquatic Resources Management International Marinelife Alliance International Monetary Fund International Comercial Terms International Standards Organization International Union for Conservation of Nature Marine Research Corporation Network of Aquaculture Centres in Asia-Pacific National Fisheries Assurance and Veterinary Association North Atlantic Treaty Organization Organisation for Economic Cooperation & Development Organisation for Security and Cooperation in Europe South East Asian Fisheries Development Center Sea product Import and Processing Association Strengths, Weaknesses, Opportunities, Threats United Nations Development Programme Vietnam Association for Aquaproduct Processing and Export World Bank World Trade Organization

Appendix 4 Vietnam

49

Country name: conventional long form: Socialist Republic of Vietnam conventional short form: Vietnam local short form: Viet Nam abbreviation: SRV local long form: Cộng Hoà Xã Hội Chủ Nghĩa Việt Nam Capital: Hanoi Location: Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin, and South China Sea, alongside China, Laos, and Cambodia Map references: Southeast Asia Government type: Communist state Administrative divisions: 58 provinces Area: total: 329,560 sq km land: 325,360 sq km water: 4,200 sq km

Appendix 5 Culture variations •

High-Context Culture:

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“It refers to a culture’s tendency to cater towards in-groups. An in-group being a group that has similar experiences and expectations, from which inferences are drawn. In a high context culture, many things are left unsaid, letting the culture explain. High context cultures are more common in the eastern cultures and in countries with low racial diversity. It is also conducive to high context situations, where the small group relies on their common background to explain the situation, rather than words. High context cultures have a strong sense of tradition and history, and change little over time”. • Low-Context Culture: “It refers to a culture’s tendency to cater towards in-groups. An in-group being a group that has similar experiences and expectations, from which inferences are drawn. Much more is explained through words, instead of the context. Low context cultures change drastically from one generation to the next. Conversations between two businesspersons from a low-context culture will be direct and structured, specific. Shared background is not assumed. The person from the low-context culture will place a much higher value on the words spoken than on the non-verbal aspect of communications.” Low-Context Culture

High-Context Culture

1. Overtly displays meanings through 1. Implicitly embeds meanings at direct communication forms different levels of the sociocultural context 2. Values individualism 2. Values group sense 3. Tends to develop transitory personal relationship 3. Tends to take time to cultivate and establish a permanent relationship 4. Emphasizes linear logic 4. Emphsizes spiral logic 5. Value direct verbal interaction and is less 5. Values indirect verbal interaction and able to read nonverbal expressions is more able o read nonverbal expressions 6. Tends to use “logic” to present ideas 6. Tends to use more “feeling” in 7.Tends to emphasize highly structures expression messages, give details, and place great stress on words and technical signs. 7.Tends to give simple, ambiguous, noncontexting messages Source: http://www.cba.uni.edu/buscomm/nonverbal/Culture.htm

Appendix 6 Bureaucracy and Culture

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Low uncertainty avoidance

Marketplace Bureaucracy

Personnel Bureaucracy

Low power distance

High power distance

Full Bureaucracy

NETHERLANDS

VIETNAM

Workflow Bureaucracy

High uncertainty avoidance

Bureaucracy: Bureaucracy is a concept in sociology and political science referring to the way that the administrative execution and enforcement of legal rules are socially organized. This office organisation is characterized by standardized procedure (rule-following), formal division of responsibility, hierarchy, and impersonal relationship. Power distance: It is the degree to which members of a society adhere to distinction of importance and accept or adapt to inequalities of status. In other words, it is the index measure the degree of inequality that exists in a society.  High power distance: use power and authority as golden rule (mostly). Social relationships are authoritarian and based on one’s status within the hierarchy. Demographic differences are magnified.  Low power distance: tend to minimize inequalities and encourage individual differences. Roles are lass rigid and demographics are not very relevant. Uncertainty avoidance: It is the index measures the extent to which a society feel threaten by uncertain or ambiguous situation.

Appendix 7

52

The most common Vietnamese family names

The Most Common Vietnamese Family Names 40.00% 35.00% 30.00% Nguyen Tran Le Pham Phan Vo Dang

25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 1 Family Names

53

Appendix 8 Fish Dictionary Fish (English) Anchovy Sardine Mackerel Bonito Tuna Albacore yellowfin tuna amberjack pompano smelt sprat herring whitebait

Vis Cá (Vietnamese) (Dutch) Bluefish Ansjovis / cá trổng Sardine / cá mòi Makreel / cá thu echte bonito / cá ngừ Tonijn /cá ngừ Califonia /cá ngừ

Pescado (Español) Poisson (Français) boquerón, anchoa sardina caballa bonito atún

anchois sardine maquereau thon rouge (bonite) thon blanc thon blanc, germon albacore

pez de limón palometa blanca

gewone pompano/ cá mục Spiering / cá ốt-me Sprot / cá trích cơm espadin Haring / cá trích arenque Zeebliek / cá trắng nhỏ Bream or Porgy

gilt-head

eperlan brisling, sprat, esprot hareng goujon

dorade royale, daurade royale béryx commun, béryx besugo rouge dentón denté, denti sébaste cabracho, rascacio rascasse grande castagnole, palometa negra brème de mer dorade, daurade dorado

red bream

rode brasem

/cá tráp đỏ

dentex redfish scorpion fish

Blauwrugzalm / 1 loạicá mòi Schorpioenvis / cá mũ làn

pomfret, Ray's bream Braam

/ cá chim

sea bream, porgy Couch's sea bream, porgy

/ cá mùi

Zeebrasem

pagre Seabass family

seabass

Zeebaars

lubina

meagre, croaker

Ombervis

corvina

loup de mer (Atlantic), bar (Mediterranean)

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grouper, sea perch red snapper

turbot whiff, megrim halibut brill plaice flounder sole angler, monkfish

tandbaars, zaagbaars/ cá rô rode snapper / cá chỉ vàng Mullet Mul / cá đối đỏ Harder / cá đốI xám Flat fish Tarbot / cá bơn Bot / cá bơn Heilbot / cá bơn lưỡi ngựa Griet / cá bơn vỉ School / cá bơn sao Bot / cá bơn Tong / cá bơn Zeeduivel / cá vảy chân

John Dory

Zonnevis

dab skate, ray

Schar Rog

red mullet grey mullet

hake cod saltcod haddock whiting pollack ling pike perch trout carp eel salmon pike perch salmon trout

mero huachinango

mérou vivaneau

salmonete lisa

rouget-barbet mulet, muges

rodaballo gallo hipogloso rombo, rémol solla platija lenguado rape pez de San Pedro, gallo

turbot

/ cá bơn / cá đuối raya Hake and its relatives Heek / cá meluc merluza Kabeljauw / cá tuyết bacalao stokvis, zoutvis bacalao Schelvis / cá êfin eglefino Wijting merlán carbonero o Koolvis / cá minh thái fogonero Leng / cá tuyết hồ maruca Freshwater fish Snoek / cá chó lucio Baars / cá rô perca Forel / cá hồI trucha Karper / cá chép carpa Paling / con lươn anguila Zalm / cá hồi salmón Snoekbaars Zalmforel trucha asalmonada

flétan barbue plie flet sole lotte Saint Pierre limande raie merlu, colin morue morue salée haddock, églefin merlan lieu noir, colin noir lingue brochet perche truite carpe anguille saumon sandre truite saumonée

55

gurnard, tubfish weever catfish dogfish swordfish sailfish smoked buckling (smoked herring)

Other fish rode poon / cá chào mào perlón, rubio Pieterman Meerval / cá trê pez gato doornvis / cá nhám góc pez perro pez espada, Zwaardvis / cá mũi kiếm emperador / cá cờ pez vela Smoked fish Gerookte / hun khói ahumado Bokking

/ cá bẹ hun khói

grondin vive poisson chat roussette espadon

fumé hareng fumé

gerookte haring / cá trích muối hun khói Roe roe Kuit / trứng cá hueva caviar Kaviaar / trứng cá muối caviar salmon roe Zalmkuit / trứng cá hồi hueva de salmón Crustaceans jumbo shrimp, prawn Steurgarnaal / tôm panđan langostino shrimp Garnaal / con tôm gamba langoustine Langostine cigala lobster Kreeft / tôm hùm bogavante rock lobster Langoest langosta crab Krab / cua cangrejo freshwater crayfish Rivierkreeft / tôm đồng cangrejo de río Molluscs oyster Oester / con hàu ostra clam Schlep / con sò almeja cockle Kokkel / con sò berberecho mussel Mossel / con trai mejillón venus shell Venusschelp concha fina kipper

wedge shell razor-shell, razor clam scallop

coquina

oeuf de poisson caviar Oeuf de saumon

crevette langoustine homard langouste crabe écrevisse huître clovisse coque moule olive de mer, haricotde-mer, flion, vanneau

messchede, mes heft / con điệp navaja

couteaux

Sint-Jacobsschelp / con điệp

coquille St.Jacques

vieira

56

winkle whelk

Alikruik Wulk

sea urchin squid tiny squid cuttlefish octopus snail

/ ốc mút / ốc xoắn Others Zeeëgel / nhím biển Pijlinktvis / mực ống kleine pijlinktvis inktvis, sepia / con mực Octopus / con bạch tuộc Slak / con ốc sên

bígaro caracola

bigorneau buccin

erizo de mar calamar chipirón, chopito jibia, sepia pulpo caracol

oursin calmar seiche poulpe escargot

Appendix 9

Questionnaire for Vietnamese seafood exporters Company name:

57

Business: Website: Email:

Number of employees in your company 4-20 21-50 50-100+ Annual trade in average < €500,000 €1 million- €2 million >€2 million Do you export seafood products to the Netherlands? Yes (please go to part A) No (please go to part B) Part A 1. What are top 3 seafood products you mainly export to the Netherlands?       2. Dutch clients weigh in your total foreign clients: 50% 3. What is the most influent point in your decision-making to export to the Netherlands? Quantity demand Profit Partnership Other 4. Dutch clients pay most attention to: Quality Price Brand name/ packaging 58

Other 5. Which advertising activities you apply the most for your company when intending international business? Trade show Website Magazine Brochures/Flies Other 6. In your opinion, who is the biggest competitor to Vietnamese exporters in the international seafood market? China Japan USA Germany Belgium Other 7. Do you face any difficulties when export to the Netherlands as below: (You may choose more than 1 option) Quality standard/Quality control Quantity shortage Political issues Competitors Others 8. Have you ever been in the risk of: (you may choose more than 1 option) Currency risk /Exchange risk Price risk Transport risk Payment risk Political risk

9. Are use using hedge(s) to cover risks: Yes No

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10. The most common method of payment in your international transaction: Letter of Credits (L/Cs) Cheques Bill of exchange/Draft SWIFT Open account Cash in advance Other 11. You often contact your Dutch clients by: (you may choose more than 1 option) Email Fax Phone Liaison Other 12. Do you have any cultural conflict(s) when doing business with Dutch partner? Yes, the problem cannot be solved A little, but we are still good in cooperation No, not at all 13. Do you want to keep a long-term relationship with your Dutch partner? Yes, sure Not sure No idea Other comment… 14. Do you have any comment/opinion about exporting seafood to the Netherlands?      

Thank you very much for your time

Part B: 1. Who is your major customer at this moment? USA China

60

Japan Germany Belgium Other 2. The reason you are not doing export to the Netherlands: (You may choose more than 1 option) Political issues Quality control standards Quantity demand (example: shortage/surplus) Cultural conflict(s)/contact difficulties Other 3. Do you want to expand your business in Dutch market? Yes (please continue with question 5) No (please continue with question 4) No idea (please continue with question 6) 4. Please give your main reason(s)       5. What do you expect when you plan to expand business in Dutch market? Increasing market share Gaining higher profits Having contribution to your brand name Other 6. Do you have any comment/opinion?       Thank you very much for your cooperation

Questionnaire for Dutch seafood companies Company name: Business: Website: 61

Email:

Number of employees in your company: 4-20 21-50 50-100+ Annual trade in average 5million Do you import seafood from Vietnam? Yes (please go to part A) No (please go to part B) Part A 1. What are top 3 seafood products you mainly import from Vietnam:       2. What do you think about the quality of seafood product from Vietnam? Very good Good Just ok Bad 3. You think the price of Vietnamese seafood is: Cheap Acceptable High Too expensive 4. Do you feel it is difficult to bargain with Vietnamese clients: Yes No no idea

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5. You mostly contact your Vietnamese clients by: (you may choose more than 1 option) Email Fax Phone Others 6. Have you ever had complaint(s) about seafood products you import from Vietnam? Yes (please go to question 7) No (please go to question 8) 7. The complaint is mostly about: Quality Quantity (example: sellers do not supply enough as your requirement…) Packaging Delivery (example: late, slow, not on time…) Price (ex: Sellers change price, or bargain even the contract is signed…) Other… 8. Do you think Vietnamese seafood products meet your requirement Yes No no idea 9. Specialists predict Vietnamese seafood market will have a huge development in the near future, do you agree? Strongly agree Lightly agree Disagree Strongly disagree no idea 10. Do you have any cultural conflict(s) when doing business with Vietnamese partners? Yes, the problem cannot be solved A little bit, but we are still good in cooperation. No, not at all 11. You think Vietnamese seafood industry should pay most attention to:

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Quality Quantity Advertisement/Brand name Other

Thank you very much for your corperation Part B 1. Where is your biggest source to import seafood? USA Germany Belgium China Others 2. What are top 3 products you import from your sources?       3. Which do you prefer the most in contacting your clients: Email Fax Phone Face to face conversation Others 4. Are you familiar with Vietnamese seafood market? Yes, very well Yes, just a little bit No

5. What is the most influent point in your decision-making? Price Quality/Quantity Brand name Others 6. In the near future, do you want to import seafood from Vietnam:

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Yes No I’ll think about that no idea 7. Do you have any comment/recommendation for Vietnamese seafood exporters?      

Thank you very much for your time Docifish Interview Minutes Company DOCIFISH (Sadec Aquatic Products Import Export Enterprise) is an official member of Vietnam Association of Seafood Exporters and Producers (VASEP). Head office: Lot 6, Sadec Industrial Zone, Sadec town, Dong Thap province, Vietnam Tel: (+ 84.67) 762429 - Fax: (+ 84.67) 762430 Email: [email protected] HCM city office : 364 Pham Hung St., Ward 5, Dist 8, Ho Chi Minh city, Vietnam Tel: (+ 84.8) 8506805 - Fax: (+ 84.8) 8506805 Email:[email protected] Interviewee: Mr. Hung Nguyen- Director of Docifish Date: 30 March 2007 Topic: Vietnamese Exporting Seafood Market- View from Docifish

1. List prices of main exporting products: Fish fillet (Block, FOB price): $3.55/kg Fish fillet (IQF-FBO price): $3.6/kg Fish skewered fillet: $4.2/kg Fish rolled fillet: $4/kg 2. What are advertising activities of Docifish in its business? -

The company have participated in many international fair such as: Vietfish in Vietnam, Bremen in Germany, Conxemar in Spain, Brussel in Belgium Advertising on Vietnamese website: www.vasep.com.vn Advertising on English magazines every 6 months: “International fishery” Building its own website: www.docifish.com.vn

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-

Brochures and flies for customers Quality control system: ISO 9001:2000, HACCP, GMP Maintaining the products’ quality and quantity

3. Docifish SWOT Strength

Weakness - In general, it’s not used to some -Products’ sources are from local region knowledge of foreign commerce, - Its major products are Tra and Basa international law, lawsuit, international fish which are very popular now. business culture. Therefore it sometimes - Strict and modern total quality control leads to some difficulties when facing disputes in the market. Opportunity - Environment (Cuu Long delta) gives the best natural condition for raising sea products, that no other places have this advantage. - Vietnam economy is tremendously growing lately. -Recently, Vietnamese government give many supports to boost the seafood exports, especially Tra fish and Basa fish - Vietnam is now official member of WTO

Threat -

Increasing of unfair-competition within inland competitors about Tra and Basa fish Exporting Tra fish now is dealing with quality control due to some famers ignore some steps of product raising process

4. Does Docifish have any clients from the Netherelands? “Yes, it does. The company has had good business relation with Dutch partners for years. Dutch customers weight about 20% of total company’s clients. On the whole, Dutch customers gain 22% of total Vietnamese seafood exports”. 5. Who are the big competitors of Vietnam in international seafood business? “In the maker, American Catfish is the competitive product to Vietnamese Tra and Basa. However, the US Catfish cannot meet the demand of US market, therefore US also have to import fish from Vietnam. In the other hand, China has purchased Catfish breed to raise in China, then export Catfish products back to US market. In conclusion, China is now the biggest competitor in Catfish market”

66

6. Does Vietnam have any advantages or disadvantages as being WTO member? “After being a WTO member, Vietnam has more favourable aspects in lawsuit, for example America will reconsider about its accusation of Vietnamese dumping price in Tra fish and Basa fish. In addition, EU will possibly loose some unreasonable barriers of technology that it requires. ” 7. In your opinion, are there opportunities for Vietnam in the international seafood market? “ In fishery industry, Vietnam has marine riches and opportunities which contribute to its developing. Nature gives it the greatest gift with many rivers, delta where water contains particular micro-organism that provides the best condition for particular fish. For example, the CanTho delta is the best place for Tra fish and Basa fish. That is also the reason why Vietnamese Tra fish and Basa Fish have a special quality and taste. Moreover, the producing cost of Catfish is very low compare to America, or even Thailand, Cambodia, Mianma, India…Manufacturing labour cost and farming labour cost are also low. Best of all, Vietnam is successful in applying technology of artificial fish birth-giving. In my opinion, Vietnamese seafood will definitely develop well in the international trade” 8. What is opinion of foreign clients about Vietnamese seafood product (quality and price…)? “As far as I’m concerned, they consider the price as being acceptable, or even low, compared to many other competitors. Customers also highly appreciate the quality of Vietnamese seafood, and Vietnamese seafood products are rather variable. American and European are really fond of the taste of Vietnamese Tra fish and Basa fish. Particularly, those kind of fish contain Omega 3 which help anti-aged, and provide high nutrition to your health”. 9. Do you think Dutch market is a promising client in a long term? “Speaking generally, Dutch people have a passion for seafood and they really like Vietnamese Tra fish. With the imported products, Dutch traders sell to domestic consumer, a part of that they also export to other neighbour countries like Germany, Belgium, France…Hence, even though Dutch population is not huge, Vietnam still has great opportunities to penetrate the seafood market in the Netherlands”

Companies list Vietnamese Seafood Companies Company DOCIFISH (Sadec Aquatic Products Import Export Enterprise) is an official member of Vietnam Association of Seafood Exporters and Producers (VASEP).

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Head office: Lot 6, Sadec Industrial Zone, Sadec town, Dong Thap province, Vietnam Tel: (+ 84.67) 762429 - Fax: (+ 84.67) 762430 Email: [email protected] HCM city office : 364 Pham Hung St., Ward 5, Dist 8, Ho Chi Minh city, Vietnam Tel: (+ 84.8) 8506805 - Fax: (+ 84.8) 8506805 Email:[email protected] Company name: AGIFISH (An Giang Fisheries Import & Export Joint Stock Company) 1234 Tran Hung Dao, Long Xuyen City, An Giang Province, Vietnam Tel: (84.76) 852939 - 852368 - 854241 - Fax: (84.76) 852202 E-mail: [email protected] - Website: www.agifishco.com www.agifish.com.vn Company: Seaprodex export center Address: 2-4-6 Dong Khoi St., Dist 1, Ho Chi Minh City Tel: (84.8) 8291066 - 8293227 - 8290560 - 8222362 – 8230685 Fax: (84.8) 8226211 Email: [email protected], [email protected]

Company name: Cuu Long Aquaculture Co., ltd Email: [email protected] Office address: 53C Huynh Khuong Ninh St., Dist. 1, HCMC, TP HCM Tel: 8202214 - 8202252 Fax: 8202214 - 8202252 Description: Food & Beverage,Seafood Director: Do Quoc Buu Company name: The East South Asia Co., Ltd - ESACO Email:[email protected] Office address: 17 Tran Quoc Thao St., Dist. 3, TP HCM Tel: 8243102-8295080 Fax: 8290193 Description: Seafood and fruit Director: Tran Viet Dung Company Name: Cau Tre enterprise - CTE http://www.ffa.com.vn/index.pl/members/cautre [email protected] Office Address: 125/208 14th road, Tan Binh district, Ho Chi Minh city. Tel. 84.8.8565543, 84.8.8550072 Fax. f.84.8.8550057

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Company Name: An Giang fishery import - export company Office Address: 1234 Tran Hung Dao street, Long Xuyen town, An Giang province. Tel. 84.76.852368, 84.76.852939 Fax. 84.76. 852202 Company Name: SEAPRODEX TIEN GIANG Office Address: Tan My Chanh village, My Tho city, Tien Giang province. Tel. 84.73.850020, 84.73.850021 Fax. 84.73.850024 Company Name: Thuan Phuoc seafoods and trading corporation - THUAN PHUOC CORPORATION Office Address: 20 Thanh Bo street, Hai Chau district, Da Nang city. Tel. 84.511.828118, 84.511.822654, Fax..84511.825872 Company Name: Kiengiang seaproduct import and export company, Kien Giang export fish processing enterprise - KISIMEX http://www.kisimex-vn.com/index_eng.asp Office Address: 62 Ngo Thoi Nhiem street, An Hoa precinct, Rach Gia town, Kien Giang province. Tel. 84.77.866719, 84.77.861541, 84.77.800580 Fax. 84.77.862677, 84.77.800570 Company Name: Song Huong import export seafoods company- SOSEAFOOD Office Address: 165 Thuan An street, Hue city, Thua Thien Hue province. Tel. 84.54.823541, 84.54.822245 Fax. 84.54. 823541 Company Name: Can Tho animal fishery products processing export enterprise (CAFATEX VIETNAM) Office Address: Km No. 2081, 1 National road, Chau Thanh district, Can Tho province. Tel. 84.71.847979, 84.71.846737, 84.71.846134 Fax. 84.71. 847775, 84.71.846728 Company Name: Ca Mau Frozen Seafood Processing Import Export Corporation (CAMIMEX - FACTORY II) Office Address: 333, Cao Thang street, Sub - ward 2, Ward 8, Ca Mau city, Ca Mau province Tel. 84.780.831600, 84.780.831223, 84.780.836137 Fax. 84.780.832297 Company Name: MINH PHU SEAFOOD PTE Office Address: Industrial Zone, Ward 8, Ca Mau city, Ca Mau Province. Tel. 84.780.839391, 84.780.838262 Fax. 84.780.833119 Dutch Seafood Companies Ibro Mar Bv Address: Max Euwelaan 57

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3062 MA, Rotterdam, the Netherlands Business: Import and export company of frozen fish and fishproducts. We specialize in raw materials /half fabricates for the seafood industry throughout Europe. We have a selection of standardized products in stock in Holland and we produce and develop special products for/with clients to improve production results. tel: 31-10-4532050 fax: 31-10-4529055 http://www.ibromar.com Email: [email protected] IbroMar BV Vietnam Representative Office Address: Floor 2nd, Quoc Hung Building 178A Nguyen Van Troi Str. Phu Nhuan District, HCMC, Vietnam Tel.: +84 (0)8 8478757 Fax.: +84 (0)8 8478766 Email: [email protected] Noordzee Breskens Address: Deltahoek 5 P.O.Box 57 4510 AB Breskens, Netherlands Tel: 0031 (0)117-38 60 00 Fax: 0031 (o) 117-38 12 04 Business: Fresh fish wholesaler Managers: Hanny Oosterbaan, Adri van Hanegem, Henk van Hanegem Sale Manageress: Rianne Clarisse Customers : importers, wholesalers, supermarkets, C&C markets Employees: 45 Fieret's Vishandel Office address: Industrieweg 13 4501 PM Oostburg, the Netherlands Email: [email protected] Tel. (+ 31) (0)117-453551 Fax (+ 31) (0)117-454128

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Representative Shop address: Kaai 18-20 4524 CK Sluis, the Netherlands Bond’s Seafood Creations Address: Gijzenveld 9 4817 ZE, Breda, the Netherlands http://www.bondseafood.com/ [email protected] tel: 0031 76 57 11 666 fax: 0031 76 58 12 896 Na-pi Exitic Fish Address: Gedemte Burgwal 45, 2512 BS, Den Haag, the Netherlands Business type: Trading company, established 2003 Industry focus: Frozen Food , Aquatic Products , Employees: