Table of Contents1. Executive Summary 22. Company description 22.1. History32.2. Management42.3. Export team42.4. Sales/Revenue/Financial stability overview42.5. Goals and objective4

3. Product description53.1. Domestic and International Product53.2. Growth Potential5

4. New foreign market place analysis64.1. rationale for exporting64.2. Rationale for selected foreign market64.3. Country profile64.4. Cultural profile 84.5. Industry profile10

5. Market entry strategies 105.1. Strategic alliance 125.2. Target customer profile135.3. New foreign market product description145.4. Pricing Strategies155.5. Sales and promotion strategies165.6. Logistics and transportation20

6. International law226.1. Mediation/arbitration clauses and Venue226.2. Language consideration 226.3. Contract terms and conditions226.4. Product liability considerations236.5. Intellectual property protection236.6. Distribution agreements23

7. Financial analysis 247.1. Facility and equipment requirements247.2. Sales forecast247.3. Cost of goods sold257.4. Projected international Income Statement267.5. Breakdown analysis277.6. Financial requirements277.7. Financing sources 28

8. Risk management 288.1. Country risk 288.2. Commercial risk298.3. Current risk298.4. Internal risk298.5. Market risk29

9. Research methods and theoretical basis309.1. The research method and the techniques309.2. The theoretical basis30

10. References -----3211. Appendices ----34

1. Executive Summary This export plan is designed for Sloten BV in Deventer, The Netherlands. Sloten BV is an international company which focuses on young animal nutrition. The company would like to expand their market by doing export to new potential countries. There are three main products; those are Sprayfo, Nuklospray, and Spraymes. However, the export plan will concentrate on Sprayfo, which is milk replacer for calves.

In the first period, the project group analyzes about the company and the products itself. After analyzing of six countries, which are Vietnam, Spain, The Philippines, Brazil, China, and Russia, the project group considered Vietnam as the most potential market for Sloten BV to enter. Therefore, in the second period, the project group goes deeper in analyzing Vietnam market. Eventually, the project group established a market entry strategies and financial analysis for the next three year.

The methods for this export plan are mainly done by desk research. The data from desk research will be applied to internal and external analyses. In addition, the desk research also provided information related to strategy and development, and how the strategy could be implemented in Vietnam. The source of this research is based on secondary and primary data. The secondary data were collected from the companys website, other reliable websites and literatures. Moreover, the primary data were from the interview during the visit to Sloten BV in Deventer and the companys presentation in Saxion University of Applied Science.

In a nutshell, if Sloten BV is successful in exporting Sprayfo to Vietnam, the company can increase their market share in milk-replacer industry of Vietnam.

2. Company Description2.1 History I. Significant milestones in the development of the business.Before 1958, The Sloten factory was a factory which produced butter cheese and milk. During 1958, things have changed. Sloten bought Lyempf factory where liquid raw materials can be dried and fat can be spray-dried. After 10 years (in 1968), Sloten has two warehouses situated Deventer. And it began focus more on export in 1984. In 1989, a new product appeared which is Nuklospray. After 3 years (in 1992), Sloten had trial farm in Winssen, the Netherland. In 1993, Sloten started selling Nuklospay in Italy. Two years later (in 1995), Sloten gained ISO9001 certification for Sloten Friesland and Deventer. In 1996, Sloten had a new name: Sloten B.V and have been using this name until now. It installed 4 new silos in Deventer in 1999. At the same time, buffalo milk was introduced to Italy. In 2008, there were new weigh feeders and two extra silos in Deventer.[footnoteRef:1] [1: History . (n.d.). Sloten BV. Retrieved from http://www.sloten.com/index.php/en/about-sloten/history.html]

II. Export strategy Sloten BV committed to be more focused on international market. Until now, Sloten BV exports their products and delivers it to the customers through the distributors or agents. The distributors and agents have an important role in Sloten BV business. In each country, Sloten BV chooses the distributors or agents and they will represent Sloten BV to the end-users. Not only relying to the distributors and agents, Sloten BV also has subsidiary offices in some country such as Brazil, Germany, Poland, and Italy to help controlling the sales in the country.[footnoteRef:2] [2: Sloten BV (n.d.). Subsidiasy offices. Sloten BV. Retrieved December 24, 2011, from https://sloten.com/index.php/en/about-sloten/subsidiary-offices.html]

III. Corporate legal structureSloten BV uses distributors, agents, and has subsidiary offices in some country. Sloten BV adjusts some legal structure which applies in each country. For the distributors, Sloten BV already prepared a distribution agreement to make the task of both of the supplier (Sloten BV) and the distributor clear and it is based on the Netherlands laws.

2.2 Management I. Ownership of the companyThe ownership of Sloten BV is 100 percent acquisitions with Nutreco. This ownership started on August 29th 2006.[footnoteRef:3] Sloten BV has in cooperation with Nutreco a big part of the shares market, this gives Sloten BV an edge on the market of milk replacing products. [3: Nutreco . (n.d.). Nutreco . Retrieved from http://www.nutreco.com/index.php?option=com_content&task=view&id=436&Itemid=1&lang=NL\]

II. Vision, Mission, Organizational structure, sustainability policyVision:In a world with limited natural resources and a growing population, Nutreco plays a leading role in developing and supplying the most efficient and sustainable feed solutions.

Mission:Nutreco is a global leader in animal nutrition. We deliver high-quality and sustainable feed solutions and add value to our customers businesses by developing and supplying innovative products and concepts that support the best performance of farmed animals and fish

OrganizationSloten BV has already a successful company to fulfill the market in the Netherlands. In the organization of Sloten BV itself, the company has a person who is responsible for the export of Nuklospray and Sprayfo which is Mr. T. de Vries designed for some connected countries such as Italy, Brazil and Poland, Sloten BV has a person who has control for the export to those countries. Sloten BV has an internal organization structure which is still used nowadays.

Organizational StructureThis is the organization structure of Sloten BV which applies in the company. The Technical Director is Mr Steffen Rouwers, the Managing Director is Mr, Willem Kernkamp and the Finance Director is Mr Gerro Dijkstra. Besides this structure that Sloten BV has, to expand the market, Sloten BV has also some people who are responsible in the subsidiary offices.

III. Key personnel and exporting experience in past and presentThe key personal for exporting products are the sales team. For Sprayfo, Sloten BV has four export managers. Those people are responsible for the product from the factory until the product distributed to the countries.

Sloten BV have been exporting animal feed product for more than 50 years. Sloten BV has been successfully exporting the product to 60 countries. Nowadays, Sloten BV would like to expand their market. Vietnam could be one of the potential markets to introduce Sprayfo among the farmers.

2.3 Export teamSloten BV has its own export manager team. The managers are responsible for the products that should be delivered to the export countries. There are four export managers focusing in Sprayfo. Those are Mr. Teun Schuurkamp, Mr. Jack van Mensvoort, Mr. Jos Gonzalez Ramos, and Mr. Rafael Villaln Huisman. On the other hand, for Nuklospray, there are Mr. De Vries as an export manager.[footnoteRef:4] Sloten BV hires local personnel or teams in the exporting country to help finalizing the deal. [4: Sales Team. (n.d.). Sloten BV. Retrieved from https://sloten.com/index.php/en/about-sloten/sales.html]

2.4 Sales/Revenue/Financial stability overviewHere are some facts that could prove Sloten BV has strong financial ability.

Sloten BV had a turnover of 90 million euros (that is before it was taken over by Nutreco) in 2005 alone. Recognitions to the take over from Nutreco, Sloten BV (in cooperation with Nutreco) now has 20 percent shares in the market, making it become the leading in producing and exporting milk replacing products in the world. 90 percent of Sloten BV's production in Sloten and Deventer is meant for export. The export to countries in Western-Europe goes by truck along with a view other countries in Eastern-Europe; the rest goes by containers.

2.5 Goals and ObjectivesI. Overall goals and objectives for the companySloten BV goals and objectives are to meet customers need and build Sprayfos image to become the strong brand of young animal nourishment not only in domestic market but also in the global market.

II. Export goals and objectives A Sloten BV export goal is to expand their market by introducing Sprayfo in Vietnam with the help of the distributors or agents. Sloten BV is giving all the effort to understand the customer requirements and wishes, analysis market demands so that Sloten BV will develop successfully and effectively in new international markets.

III. Limitations: Sloten BV needs to know all the situations and conditions in Vietnam. From the infrastructure and laws in the country until the total calves and farmers. The cultural behaviour, language, domestic policy will be the difficulties for Sloten BV to enter Vietnam. Therefore, Sloten BV should do a research in advance. In order to get a reliable data, Sloten BV should not only do desk reseach, but also field research. This means that a representaative from Sloten BV should directly go to Vietnam and observe the real situation. This also cost a lot of time, energy, and money. These aspects should be taken into account. By aware of the company limitations, Sloten BV can decide where export strategy should they use. 3. Product description3.1 Domestic and international product I. SprayfoSprayfo is a high-quality calf milk replacer and it is a range of products for the rearing of calves, lambs, goats kids, foals and young buffaloes. It is specially designed for optimal digestion and feed intake. It is also support the calves during the entire milk feeding period.[footnoteRef:5] Moreover, Sprayfo has different colors of packages based on the quality. There are Sprayfo green, blue, red, violet and yellow. [5: Sloten BV (n.d.). Nutrition. Sloten BV. Retrieved December 24, 2011, from http://sprayfo.com/index.php/Calves/Nutrition/nutrition.html]

II. Unique selling attribute or competitive advantageSloten BV has high quality and unique product which differs Sloten BV from other competitors. These products are spray-dried milk replacers for rearing and fattening. Sloten BV is an international company and Sloten BV stand strong against other national companies. Sloten BV has continues contact with local authorities and advisers. Sloten BV also has a support from the international agriculture sector. Moreover, the production of Sprayfo is only in the Netherlands. Therefore, the quality of the product can be always controlled and that will be the advantages of Sloten BV.

III. Typical profile of end-usersThe typical end-users that Sloten BV expects are the farmers. Sloten BV more focused in commercial farmers where the farmers have huge number of calves and the goal is for doing business, and not for internal use such as backyard farmers.

IV. Required product modificationIn order to fit the products to the countries, Sloten BV sometimes needs to do some modifications. It can be required from the law in the country. If there are requirement to describe the manuals in the package in the local language, Sloten BV should change the pack. It is also possible that the name of Sprayfo means something else in other country, which makes Sloten BV should change the name in the particular country. In conclusion, the modification is always possible, depends on the country.

V. Seasonability and lifecycle Sloten BV has certifications for high quality products. This means that the products that Sloten BV makes are of high quality. Sloten BV has many certificates related to the quality of its product and management. Sloten BV had certificate from ISO-2008, GMP+ certification, and EFBQ certified company.[footnoteRef:6] [6: Sloten BV (n.d.). Quality. Sloten BV. Retrieved December 24, 2011, from https://sloten.com/index.php/en/quality.html]

3.2 Growth potentialI. Domestic and exciting international marketsSloten BV has prepared an international marketing plan with defined goals and strategies. Sloten BV exists since 1958 Sloten BV used to be a butter, cheese and milk factory. In the same year Sloten BV changed the focus into spray-dried calf milk replacers for rearing and fattening. Sloten BV has already 60 distributors worldwide. Their markets are in such as Western Europe, East Europe, Latin America, Asia and The Middle East. Until now, Sloten BV is still willing to expand their market.

II. R & D (Research and development)Sloten BV has built up broad expertise and skills relation to the nutritional requirements of young animals. The products of Sloten BV are based on a unique formulae developed by Research and Development department. Formulae are tested in specific research facilities, also in farms in practise. The Calf Research Centre is located in Winssen, the Netherlands and the The Swine Research Centre (SRC) is located in Boxmeer. Trials relating to weaning, feed intake, growth, health aspects etc are tested on pig breeding farms. Sloten BV always tests the product before Sloten BV launches it onto the market. The reason for that is that Sloten BV wants to have a high quality product that has the most effect. This is also strength of the company. The locations where Sloten BV tests the products are in the Netherlands, Spain and Brazil.[footnoteRef:7] [7: R&D. (n.d.). Sloten BV . Retrieved from https://www.sloten.com/index.php/en/r-a-d.html?showall=1]

III. New intellectual property protectionThe entire product and attribute that Sloten BV has is under trademark and protected by law. Therefore, wherever Sloten BV product exported to other countries, the product and the attribute will be secure.

4. New foreign market place analysis

4.1 Rationale for exporting Sloten BV is an international leading company in young animal nutrition.[footnoteRef:8] 90 percent of their business is export market.[footnoteRef:9] Focusing on young animal nutrition for more than 50 years in more than 60 countries, Sloten BV keeps on innovating with their product and expanding their market around the world. Cooperating with the distributors, Sloten BV is developing their sales in each country. [8: About Sloten . (n.d.). Sloten BV. Retrieved December 21, 2011, from https://sloten.com/index.php/en/about-sloten.html] [9: Blackboard]

4.2 Rationale for selected foreign market Sloten BV would like to expand their sales in worldwide market, especially in Asia territory. Vietnam is one of the countries which have the prospects as a new market for Sloten BV to enter since the farmers are centralized located. For instance, most of commercial farms places surround Ho Chi Minh city, which makes the distribution of Sprayfo in Vietnam easier than other prospect country. Moreover, the total dairy cow population expanded to 27.000 heads in 2011 compared to 15.000 in 2004, which also affected the milk output in Vietnam.[footnoteRef:10] The milk output doubled reaching 170 tons per day. Based on the data the demand of milk and dairies are increasing. This information will be an indicator that there is a potiental market for Sprayfo in Vietnams commercial farm. [10: Bright prospects for local diary farming sector. (2011, March). baomoi. Retrieved December 21, 2011, from http://en.baomoi.com/Info/Bright-prospects-for-local-dairy-farming-sector/5/126345.epi]

4.3 Country Profile Political, economic and social conditions in VietnamAccording to the political, economic and social conditions, that can be seen as the new foreign market place analysis in Vietnam is easier to reach the commercial farm than the other countries. The Import duty rates in Vietnam are subject to type of goods imported and the special tariffs status of importing countries. There are three categories of import duty rates: ordinary rates, preferential rates and special preferential rates. Vietnam produces a large amount of meat every year as their export products and for local sales, it means the animal farming is important. So there are many animal farmers need the good animal feed products which is prospect for Sloten BV to sell their product to Vietnam. In addition, Vietnam is a member of Participation International Organization such as APEC( Asia-Pacific Economic Cooperation), AFTA ( Asian Free Trade Area), FAO( Food and Agricultural Organization) , G-77(The Group of 77 - seventy-seven developing countries parties of the Joint Declaration of the Seventy-Seven Countries), IBRD (International Bank for Reconstruction and Development), WHO( World Health Organization), WTO ( World Trade Organization) which makes Vietnam market more open to international trading trends. Vietnam does not have special restrictions for import product, but there are some complicated in approving for product registration. For example, Bureaucratic is difficult to access, especially in relation to customs and documentation. If Sloten BV realizes this, they have to prepare in advance such as document ( this will be explain clearly in documentation of chapter G) In addition, The Netherlands is one of the biggest European investor in Vietnam and ranked 11th among 92 countries and territories investing in Vietnam.[footnoteRef:11]. The trade relations between Vietnam and the Netherlands are constantly increasing, reaching around US $2 billion in 2010 and over US $900 million in the first half of 2011. The Netherlands is the fourth largest export market of Vietnam in the Europe after Germany, the UK and France with 153 projects worth of US $5.6 billion. These are good chances for Sloten BV to get some advantages to export to Vietnam. [11: (n.d.).http://www.vietnamembassy.nl/en/nr070521165956/news_object_view?newsPath=/vnemb.vn/tin_hddn/ns110927142130.]

Political Legal Structure [footnoteRef:12] [12: Vietnam Embassy. (n.d.). Retrieved from http://www.vietnamembassy.nl/en/nr070521165956/news_object_view?newsPath=/vnemb.vn/tin_hddn/ns11092714213]

Vietnam GovernmentCountry Name (long form):Socialist Republic of Vietnam

Country Name (short form):Vietnam

Government Type:Communist state

Vietnam has a communist state which can be negative for countries to export to Vietnam. But as we know Vietnam and the Netherlands have a good trade relation that will be easier for Sloten BV to join in Vietnam market. Because of the communist state, it is harder to get in the country. Therefore, if Sloten BV can build good relation with the government of Vietnam they could have a very successful business in a governmental point of view. It is not easy to build relationship with Vietnam government in short time, it is advisable that Sloten BV contact with a consulting firm first such as Grant Thornton Vietnam in Hochiminh city[footnoteRef:13]. It may be the quickest way for Sloten BV to get to know Vietnam local market and building relationship with local government. [13: Retrieved December 24, 2011, from http://www.gt.com.vn/]

Fiscal/ taxation structure[footnoteRef:14] [14: Retrieved November 26, 2011, from http://www.ats.agr.gc.ca/ase/4776-eng.htm]

According to Government of Vietnam, Vietnams import duty of animal feeds is quite reasonable which is 7 % (final in 2010) and 5% for premixes because of its WTO commitments. This will be an advantage for Sloten BV product price becomes more competitive to other exporters. However, government will adjust import duties to zero over the next three years for members of ASEAN Free Trade Area (AFTA). Also, the import duty of prepared animal feed is 5% in 2013 and 0% in 2016 for members of AANZFTA (under Asean-Australia-New Zealand Free Trade Area agreement). This means the Australian and New Zealand products are exported to Asean member states will have more privilege in price competition to Sloten BV. Therefore, Sloten BV should notice this threat to make export plan suitable in Vietnam market for short-term and long term plan.

Communication and infrastructure[footnoteRef:15] [15: Vietnam ustrade. (n.d.). Retrieved from http://www.vietnam-ustrade.org/index.php?f=news&do=detail&id=36&lang=english]

Internet becomes more popular with 24,269,083 Internet users as of June, 2010, 27.1% of the population, according toITU (International Telecommunication Union)[footnoteRef:16] in Vietnam; Sloten BV can connect with their customer by this communication. Also, the company can advertise to communicate through internet, TV, agenda, exhibition For example, Sloten BV can join the Vietstock 2011 Expo & Conference - Vietnam's No.1 International Feed, Livestock, Dairy & Meat Processing Show which is held every two year. Furthermore, the development of the infrastructure in Vietnam is increasing enormously. The country is by now investing more than one third of its GDP which is about 9% of its GDP investing into infrastructure. But the most improvement is still in the electrification and telephone penetration. Even though its improved a lot there are still insufficient transport infrastructure. All urban areas in Vietnam are now electrified. In rural areas, electrification expanded from 51% of all households in 1996 to 88 percent in 2006. The Vietnamese government also has major to develop capacity of the port which will be easier for container transportation. [16: Retrieved December 24, 2011, from http://www.internetworldstats.com/asia/vn.htm]

The major airportsVietnam's major ports are Haiphong (in the north), Da Nang (central region) and Ho Chi Minh City (in the south). To supplement these, additional ports have been developed at Cua Lo, Quy Nhon, and Nha Trang. Vietnam has 2 international airports (Hanoi and Ho Chi Minh City) and 32 local airports.

These are the three major airports:Haiphong: The airport is 28 miles (45km) from downtown Hanoi. Approximate travel time is 25-30 minutes. Da Nang: Da Nang International Airport is located in Da Nang and is an important gateway to access central Vietnam.Ho Chi Minh City: The airport is about 4 Miles (7 km)from downtown Ho Chi Minh City[footnoteRef:17] [17: International airports in Vietnam. Retrieved from http://www.business-in-asia.com/airports_vietnam.html#danang]

(The plane symbol means airport and the boat symbol means harbor, in this map only the main harbors are shown)The major HarborsVietnam has 15 harbors, but there are 6 main transport harbors, Port of Cua Cam, Da Nang Port, Port of Hai Phong, Port of Ho Chi Minh City, Saigon Port and Port of Phu My. Port of Ho Chi Minh City and Saigon Port are located in Ho Chi Minh City and are both major container ports of Vietnam. Saigon Newport Holding Company has developed terminals and operations in the Port of Ho Chi Minh City (or "Saigon Newport") that are a powerful part of Vietnam's seaport system. The container traffic through the Port of Ho Chi Minh City accounts for over 65% of Ho Chi Minh City's market share and more than 40% of that for the country[footnoteRef:18] [18: Major harbors in Vietnam. Retrieved from http://www.worldportsource.com/shipping/country/ports/VNM.php]

Relatively seen are the harbors in Vietnam small compared to the big harbors of other countries. But, there are enough harbors located over the country. The infrastructure in Vietnam is proper connected. Therefore, Sloten BV could perfectly distribute by ship or plane and subsequently, distribute by truck.

4.4 Cultural ProfileHofstedes Dimensions of cultural in Vietnama. Power DistanceBased on Hofstedes definition, Power distance is the degree in which the less powerful members of an organization accept that the power is distributed unequally.[footnoteRef:19] The power distance in Vietnam is very high. This means that people accept that their superiors which could be parents, teachers, people who is older or even boss in the business life, have more power than the inferiors. The level between boss and the employee are not the same. The superior are treated different, with more respect from the inferior. Moreover, since the gap between employee and boss are high, Vietnam people use high context communication. The high context communication means that people have a preference for starting the conversation, and then ends up with the main point. Therefore, if Sloten BV wanted to do business in Vietnam, it is impolite to go directly to talk about the business. Vietnamese people like to build a relationship. Sometimes, a formal meeting in the office is not enough. They could arrange another informal meeting, outside the office like dinner or party. [19: Nunez, I. C., Mahdi, R. N., & Popma, L. (2007). Working with Hofstede's Dimention of Culture. In Intercultural Sensitivity. Assen , The Netherlands : Van Gorcum .]

b. Individualism and CollectivismVietnam is a collectivism country. This means that individuals come secondary in the group. Families, friends and society are more important.[footnoteRef:20] Vietnamese people would be we oriented. Even in a company, employees view their organizations as families. Usually, the decisions for the company are taken by a group of people in a team such as a management team. Not only one person who decide, but the teams are involved. [20: Kwintessential (n.d.). Vietnam Language, Culture, Customs and Etiquette. Kwintessential . Retrieved November 26, 2011, from http://www.kwintessential.co.uk/resources/global-etiquette/vietnam.html]

c. Masculinity and FemininityVietnam is a masculine country, even though not as masculine as United States of America. However, the dominance of men in Vietnam could be seen. Women should avoid wearing halter neck tops, or shorts in the more traditional areasd. Uncertainty Avoidance As a high power distance country, Vietnam is also a country with low uncertainty avoidance. Bosses are expected to take care of their employees financially and physically. The emotion should not be shown that why the Vietnamese are very polite people and will often smile and agree with you when in fact they may not have fully understood what you have said. It will be useful to give product manuals, for more complex negotiationse. Long-term and Short-term Orientation Vietnamese people are very long term orientation, even higher than United States of America with total 80 scores out of 100 from Geerts Hofstede model. [footnoteRef:21] This means that Vietnamese people always think not only what could happen now, but further in next several years, especially when it comes to business and investment. They have a high discipline and responsibility in work. Therefore, doing business with Vietnamese people should prepare a detail goal for the company in the future, in a period of time. [21: Kohl, K. S. (n.d.). Americans doing business in Vietnam. Baruch. Retrieved November 26, 2011, from http://www.baruch.cuny.edu/wsas/student_work/documents/Kohl.pdf]

Public Etiquettes in Vietnam10:.Avoid public displays of affection with a member of the opposite sex. .Do not touch someone's head. .Pass items with both hands. .Do not point with your finger - use your hand..Do not stand with your hands on your hips. .Do not cross your arms on your chest. .Do not pass anything over someone's head. .Do not touch anyone on the shoulder. .Do not touch a member of the opposite sex. .Shorts should only be worn at the beach.Business Etiquettes and Protocols in Vietnam10: Appointments with important people from government or authorities are required and should be made several weeks in advance. Sometimes it is more efficient to ask some people have good relation with them to make an appointment..The best means of doing so is through a local representative who can act as a reference and also translator/interpreter..The Vietnamese are flexible in time. But for important meeting they usually punctual and expect the other to do so.Dress conservatively. .Handshakes are used upon meeting and departing. Handshakes only usually take place between members of the same sex. Some Vietnamese use a two-handed shake, with the left hand on top of the right wrist and always wait for a woman to extend her hand. Business cards are exchanged on initial meetings and should be presented with both hands. When receiving business cards ensure you show proper respect to it and do not simply glance at it and put it on the table. The spoken word is very important. Never make promises that you cannot keep to as this will lead to a loss of face.Negotiations can be slow so it is important to bear in mind that decisions have to go through a lot of red tape and also group consultation. Be patient..Business gift giving is fairly common at the end of a meeting or during a meal in honor of your business associates. Gifts should be small but not expensive. Something with your company logo or something typical from your country both makes excellent gifts. Do not give handkerchiefs, anything black, yellow flowers or chrysanthemums.. it is normal in meeting if Vietnamese will ask you how old you are at the beginning of a conversation because there is no universal word for you in the Vietnamese language and people need to classify you as either older or younger than themselves in order to determine the correct form of address. It is normal practice in Vietnam to put the surname first, followed by a middle name and then the given name, e.g. Nguyen Hong Lan. In this case, the person should be addressed as Ms Lan. The full name is only used on a formal occasion.[footnoteRef:22] [22: Retrieved November 26, 2011, from http://www.austrade.gov.au/Doing-business-in-Vietnam/default.aspx]

4.5 Industry Profile i. Broadly identify direct customer After researching the condition of Vietnam markets exporting Sprayfo is the best way, since Sloten BV has never entered Vietnam before. Furthermore, since the commercial farms in Vietnam are located in South Vietnam, Sloten BV could focus more on that part which is around Hochiminh city. To deliver Sprayfo to the end users, which are the commercial farmers, Sloten BV could use a distributor. In total there are 109 distributors for animal feeds in Vietnam. However, there is one distributor company who could help Sloten BV in distributing Sprayfo. The company is called Anhtruc Co., Ltd. This is one of the biggest distributing companies in Vietnam which is located in Ho Chi Minh (Southern Vietnam).[footnoteRef:23] This distributor is located in a very good position in the middle of the provinces where the target market focuses on. Anhtruc Co., Ltd is part of the business portals premium member which makes the company has a wide network and connection around Vietnam. At present, the company is distributing animal feeds and milk replacers for swine and goats. Therefore, the company could distribute Sprayfo since the company already has knowledge about the milk replacer product itself. This is a positive aspect of the distributor for Sloten BV. [23: Anhtruc Co., Ltd. (n.d.). Anmal feed1. Retrieved December 4, 2011, from http://http://www.animalfeed1.com/supplier/anhtruc-co-ltd-at-trading-co-ltd.html]

Furthermore, a Vietnam current market trend of milk-replacer is growing. According to Ministry of Industry and Trade, the estimate of milk consumption in Vietnam is 20kilos by 2015 and 25 kilos by 2020. Therefore, Vietnam is seeking for high quality animal food that can keep Dairy healthy and increase the milk capacity per dairy head.[footnoteRef:24] [24: Retrieved December 24, 2011, from http://dairyvietnam.com/en/Vietnam-Markets-for-milk-and-milk-production/For-Sustainable-Development-of-Milk-Industry.html]

ii. Competitive analysisThere is also one big company for milk replacer in Vietnam which is Vemedim[footnoteRef:25]. This company was established in 1989. The objectives of company are to expand their market in Vietnam and export to Asia, the Middle East and South America. Their strength is product with good quality of veterinary, medicines and other animal health care products for livestock, poultry formulated to international standards. This company has been successful in some international market. Their product received certification WHO GMP (Good Manufacturing Practices) and ISO 9001:2000 (International Quality management System) and the warehousing system of Vemedim conform to GSP (Good Storage Practices). Vemedim can export within 2 weeks and their capacity is 10 tons per week. Also their company main market is international concentrate not domestic market. However, Sloten BV product is unique. The company product is spray-drying technique which is make their quality is higher. Also, the raw material is from milk redundant which Vemedin does not have. This factor will make Sloten BV have more advantages in product than other competitor. [25: Retrieved November 06, 2011, from http://vemedim.trustpass.alibaba.com/product/112143550-101592772/Milk_Replacer_Product_for_Animal.html?tracelog=ggsotherproduct2#productDetailpageLocation]

The SWOT analysis of exiting competitor which is Vemedim in Vietnam market

Strengths Weaknesses

Products: Presently produces more than 500 animal health care products which are packaged in various sizes to meet the needs of farming scales ranging from industrial producers to small- scale farmers. Position: One of leading animal health product in Vietnam and gains a position in international market. Quality: Producing with good quality of veterinary, medicines and other animal health care products for livestock and poultry which are formulating to international standards. Market: Vemedim Company has export successfully to Southeast Asia, South Asia, Middle East, Africa, Taiwan, etc. Certification: Their product received certification WHO GMP (Good Manufacturing Practices) and ISO 9001:2000 (International Quality management System) and the warehousing system of Vemedim conform to GSP (Good Storage Practices). High export efficiency: Vemedim can export within 2 weeks and their capacity is 10 tons per week. [footnoteRef:26] [26: Vemedim Vietnam. (n.d.). VIV India. Retrieved from http://www.vivindia.nl/en/Exposant/News/News%20from%20Exhibitors/Vemedim%20Vietnam.aspx]

The costs of Vemedim Companys products are high as it uses high-technologies to produce its product. The product focusing on variety of purpose such as: fish medicine, milk-replacer for animal foods, veterinary medicine, poultry medicine.. which can make it difficult in product quality control

OpportunitiesThreats

Because of the rising of global incomes and the increase of diet diversification, world per capita meat consumption has been increasing steadily, particular in low-income and middle-income countries, which means the needs of products for animals are huge. Therefore, the market for Vemedim Company is enormous.[footnoteRef:27] [27: World Meat Production Shapes Feed Needs. (2011, May 7). The progress farmer. Retrieved from http://www.dtnprogressivefarmer.com/dtnag/view/blog/getBlog.do;jsessionid=9803630FFE2F58E8A0ECCA958C705FDE.agfreejvm2?blogHandle=grainmarkets&blogEntryId=8a82c0bc301f591e0130faf5497c09a1]

Competitor: Sloten BV is one of big competitors for Vemedim Company as Sloten BV intends to enter Vietnam market. Exchange rate: The exchange rate is a main problem for Vemedim Company as it exports many products to international markets.

Porters Five Forces Model

Threat of new entrants: Threat of substitute products: Bargaining power of customers: Bargaining power of supplier:

Although Vemedim Company has much strength, Sloten BV still has its own strong point such as the technique of spray-drying which makes its quality higher. And the raw material of Sloten BV is from milk redundant which Vemedim does not have. Furthermore, Vemedim mainly focuses on international markets than domestic market. According to above points, Sloten BV has high opportunity to introduce their product in Vietnam.

5. Market entry strategies

5.1 Strategic alliancesAccording to the data which we found the best way to export Sloten BVs product to Vietnam is use a local distributor. Vietnam is a new market for Sloten BV we need a distributor to sell the product for Sloten BV otherwise it is hardly for a Dutch company to enter a new market. Because it takes long time to figure out how to do business in Vietnam and how to reach the local farmers. And a local distributor can handle this problem for Sloten BV, according to the presentation gave by Mr. de Vries he said Sloten BV just want to export their product it means they do not want to take the risk, but, the distributor can take the risk. So, Sloten BV would like to find a local distributor to sell their product.

5.2 Target customer profile Direct customersThe direct customer for Sloten BV is the distributor because the distributor is the one who buy Sloten BVs product and sell it to the farmers. Vietnam is a new market for Sloten BV and it is difficult for Sloten BV to find the customer in a new market. So Sloten BV will not sell the product directly to the farmers at this situation the distributor play an important role between Sloten BV and customer. Purchasing decision makersThe farmers in Vietnam are the purchasing decision makers they decide whether their cattle use Sprayfo and what benefit they will get from the product. Actual end usersThe actual end users is Vietnamese cow, because Sprayfo is a kind of product for the baby cattle it will decrease the death of baby cattle. And there are several kinds of Sprayfo to the cattle.Sprayfo blue: Maximum growth and health protection (high level of milk protein, perfect stability, high juvenile growth and less diarrhea)Sprayfo violet: Proven results for optimal rearing (good performance, smooth feed intake and reliable quality)Sprayfo red: Power milk for economic rearing (cost effective rearing, healthy start and good growth)[footnoteRef:28]Sprayfo green: Budget milk for strong calves (economic rearing and good start)[footnoteRef:29] [28: Sprayfo. (n.d.).http://sprayfo.com/index.php/Calves/Products/calf-milk-replacers.html.] [29: (n.d.).SPRAYFO. Retrieved from http://www.sprayfo.com/index.php/Calves/Products/products]

Demographics or company characteristicBeef cattles farming is practiced all over Vietnam. The most of the production is taking place in the north of Vietnam.The south of Vietnam is the disadvantaged because of the hot tropical climate. But there is reported that 75% of all commercial beef cattle breeding operations are located in the southern part of Vietnam. There will be more information about this later in the milestone where we will be more specific about which place of Vietnam would be the most potential in our perspective in the table in the next page you can find Vietnams cattle population by region.Vietnam's Cattle Population by Region in 2009 [footnoteRef:30] [30: Agri-Food Trade Service Vietnam Livestock Genetics. (2011, March). Retrieved from http://www.ats.agr.gc.ca/ase/5844-eng.htm]

Region'000 Head%

Red River delta69511.4

Northern midlands and mountains1,03216.9

North central and central coast area2,48940.8

Central highlands71711.7

South east4737.8

Mekong delta69711.4

Total6,103100.0

Total market size and future growth potentialAccording to Ministry of Agriculture and Rural Development (MARD) Vietnam's largest and more advanced beef cattle farms are mainly located in the south eastern provinces of BinhPhuoc, BinhThuan and NinhThuan and in the Central Highlands area. These operations exist to service the strong demand for beef that exists in the Ho Chi Minh City market. .[footnoteRef:31] [31: Agri-Food Trade Service Vietnam Livestock Genetics. (2011, March). Retrieved from http://www.ats.agr.gc.ca/ase/5844-eng.htm]

The last Vietnams survey found out that about 40% of Vietnams households consume beef, but with less that 10 % consumer buffalo meat. The MARD had a lot of influence on this, they supported the smallholder beef cattle farming sector through its Livestock husbandry and Stock Breeding program 2006 to 2010. This program is now extended to 2020. The program has been most active in the provinces of Nghe, ThanhHoa and BinhDinh over the period since 2006. The livestock development strategy has a goal of establishing a standing inventory of 12.5 million beef cattle by 2020 up from 5.9 million today.5.3 New foreign market product or service description Typical usage by the end usersSloten BV has high quality and unique product which differsSloten BVfrom other competitors. These products are spray-dried milk replacers for rearing and fattening.The end users will be mainly commercial farms these are the potential buyers where Sloten BV should mainly focus on. Commercial farms are mostly based on mass production, many farms are engaged with the rearing of animals, and therefore Sloten BV should focus on commercial farms. Backyard farms are not applicant in this case, because backyard farms are most of the time small businesses or just for own use, hence it is not convenient to focus on the backyard farms. Milk replacers are not very familiar in the country, there has to be a guide delivered with the product for the new customers to explain how to use the product. Sloten BV could also send an expert to the country to help the farmers by using the product and explaining the differences in each Sprayfo product.[footnoteRef:32] [32: Commercial farm. Retrieved from http://static5.businessinsider.com/image/4d2f183d49e2ae660c1a0000-398-298/commercial-milk-farm-cows.jpg2Quality Sloten BV. Retrieved from https://sloten.com/index.php/en/quality.html]

Unique selling attributes or competitive advantage(s)/market nicheSloten BV has a unique spray drying process which makes their products unique compared to the competitors. Sloten BV also has constant quality, this quality can be guaranteed by the five certificates the company earned. Thereby Sloten BV only processes high-grade raw materials of producers meeting our strict standards. In addition, Sloten BV has fully automated lot tracking and tracing in place.[footnoteRef:33]The constant quality pays off it in trust therefore Sprayfo is a trusted brand in the already existing export countries. [33: ]

These are all competitive advantages however in Vietnam they are not introduced yet, therefore they should focus on these kinds of unique things in their promotion.

Required product modificationProducts have to be modified for different reasons, however Sloten BV does not have to do that because the only thing Sloten BV would have to change to the products are the labels and use Vietnamese language on the products. Therefore, if it would be needed, Sloten BV has a good R&D department that could make changes in the product to make it for example cheaper there will be more about this in the Pricing Strategy cluster. If the products are too expensive they have to change the ingredients and use cheaper raw material but still with a good quality to meet the demands.

Product specification standardsThere is a standard decided by the Vietnamese Ministry of Agriculture and Rural Development (MARD) said that animal feed can contain a maximum of 2.5mg of melamine per kg in Vietnam. All feed that contained higher levels of melamine will be banned from import, production, trade and use in husbandry and aquaculture. [footnoteRef:34] Sprayfo totally meets the demand as it is high-quality calf milk replacers. And Sloten BV also focus on the product quality, thus they only processes high-grade materials of producers that meet their strict standards.[footnoteRef:35] Vietnam government also requires all organizations and individuals must have business licenses, facilities, and necessary technologies that meet the current standards to operate in the area of livestock feed. What is more, feeds must be stored safely and distributed in the stores or shops which have accurate addresses.[footnoteRef:36] Aiming at this case, Sprayfo product is supplied with Sprayfo Safety Package (S.S.P). The S.S.P. is a composition of feed supplements designed to provide natural support to the calf, resulting in healthy and efficient digestion.[footnoteRef:37]S Sprayfo is ready to enter export market since it has high quality. All Sloten BVs product already had ISO-2008 standards, GMP+ certification scheme, HACCP (Hazard Analysis and Critical Control Points) and EFBQ Qualified Company. Sprayfo is also a product which has been tested and it shows a satisfying result and giving different result to calves by using this product. [34: Standards Set for Animal Feeds. (2008, December 3). The poultry site. Retrieved from http://www.thepoultrysite.com/poultrynews/16600/standards-set-for-animal-feeds] [35: Quality. (n.d.). Sloten. Retrieved from https://www.sloten.com/index.php/en/quality.html] [36: Kim Loan (2011, October 26). Tough regulations on import of livestock feed.Vietnam Information News. Retrieved from http://www.vietnamimportexportnews.com/vietnam-import-export/vietnam-importing-products/38956-tough-regulations-on-import-of-livestock-feed.html] [37: Sprayfo. (n.d.). Sloten BV . Retrieved November 20, 2011, from http://www.sprayfo.com/index.php/Calves/Products/sprayfo-safety-package-ssp.html]

Labeling, packaging and markingAll the production activities including labeling and packaging were done in Netherlands. The labeling for export market, Sloten BV has to do it in two languages. The first is the English version as an international language, them the second is the language which are used in the country. Since our export country is Vietnam, the labeling will be in English and Vietnamese. This will help the farmers to understand about the product. In the past, Sloten BVs products were packed in 50 kg. However, since there were new export regulations, the package reduced into 25 kg. During the presentation which was given by Theo de Vries, said that Sloten BV also has a consideration to reduce the package into small package, 20 kg, therefore the farmer could easier carry the product.

Seasonability and life cycle of the product or serviceSprayfo is a product which always can be used. It is not a season product, because milk replacers are part of the daily feed the animals need. Because the farmers need Sprayfo daily it is not a season product. The life cycle of this product is long, the milk replacers market does not develop hard, although sometimes there can be a small innovation on certain milk replacer products. But overall it is not a hard growing market therefore the life cycle of Sprayfo is long. Thus Sloten BV does not have to challenge all kinds of fast developing products.5.4 Pricing strategies

Export coasting analysisOverall, there are three ways of setting an export price. Those are: A, Demand-oriented pricingB, Competitor-oriented pricingC, Cost-plus pricingBased on Sloten BV condition, demand-oriented pricing is the best option for Sloten BV to decide the export price. In demand-oriented pricing the export price is based on anticipated future demand in the export market. [footnoteRef:38] Therefore, all the decision in the pricing depends on the demand of Sprayfo in Vietnams market. Furthermore, Sloten BV needs to produce a formal Sprayfo price list for the distributor. This price list will help we the basic guide for the distributor to sell Sprayfo to the end users. [38: Harlaar, M., & De Leeuw, O. (2005). Foreign Pricing. In Export a practical guide . Groningen , Netherlands : Noordhoff Uitgevers.]

Pricing ConstraintsThe pricing constraints that Sloten BV could face is the price which affected by transportation issue. If there are delays in the delivery from the Netherlands to Vietnam, the distributor cannot distribute Sprayfo to the end users on time, the end users could complain and they could possibly asked some compensation for the delays. The other issue that could affect the price is if there is another cow disease like in the 2010, the total cows in Vietnam will be decreasing and so does the demand of Sprayfo. If this situation happens, the price will be unstable and unpredictable.

LegislationLegislation in Vietnam about dumping and the normal price in the market are in Article 3, Chapter 1, the Ordinance 2004.[footnoteRef:39] Since Vietnam is part of the World Trade Organization (WTO), there are also WTO Anti-dumping Agreement applies in Vietnam. However, this regulation is only valid between the members of WTO. Therefore, this regulation will not apply for Sloten BV. [39: Vietnam and anti-dumping. Retrieved December 9, 2011, from http://www.eai.nus.edu.sg/EWP146.pdf]

Current Market PricingSince this was the first time Sloten BV exporting their product, there are no current market pricing. Furthermore, there is only one competitor in Vietnam which not has much influent to Sloten BV on deciding Sprayfo price.

Price SensitivityThe price sensitivity in Vietnam is high. People in Vietnam are very difficult in dealing with any types of changing, especially for price changing. Therefore, Sloten BV should decide the price since the beginning and not change it suddenly. The price should be in a stable position.

Market penetration pricing strategyLooking through the position of Sloten BV in entering Vietnams market, Sloten BV should use penetration pricing. Penetration pricing is a strategy adopted quickly achieving a high volume of sales and deep market penetration of a new product.[footnoteRef:40] Sloten BV would like to know how their sale in Vietnams market is. [40: Market penetration pricing . (n.d.). Business dictionary . Retrieved December 9, 2011, from http://www.businessdictionary.com/definition/market-penetration-pricing.html]

5.5 Sales and promotion strategies. Promotion methods[footnoteRef:41] [41: Retrieved December 15, 2012, from http://www.revisesmart.co.uk/business/marketing-mix/promotion-methods.html]

There are many different types of promotion tools. It depends on the availability and the budget of Sloten BV. In this case, Sloten BV mainly focuses on the distributor; therefore they will have to train the distributor about the information of Sprayfo and the way to use it. Subsequently, the distributor can combine with local requirement to deliver the most effective promotion methods for their target customers. Initially, they could use below the line promotion. This is a promotion method which is more personal and traditional. For example, Sloten BV could advise the distributor to try a particular promotion method. For instance, if a farmer buys 1000 kg Sprayfo at once, Sloten BV could give 10% discount for the next order to satisfy the farmer; if a farmer buys 120 tons Sprayfo per year, he will get a 20% discount for the order. In addition, public relations can be a good idea for Sloten BV to introduce their product to potential customers. Sloten need to establish a good reputation to gain support from publics. The distributor also need to hold an exhibition for all the farmers, in order to introduce Sprayfo the way of promoting and inviting is further explained in the advertising availability section.

Advertising availability and regulatory constraintsThe best way for Sloten BV to promote their product is through magazines, advertising specialties and newspapers. Promotion through TV will not be chosen, because this is a new product which has to be explained to the farmers and needs more than only showing the brand. This will not be a convincing way. Thereby, the costs for the promotion through TV commercials are too high compared to the possible profit of Sloten BV in the short term of 2 years. The profit and turnover is further explained in the financial analysis part. The internet usage in Vietnam is only 27%[footnoteRef:42] of the population which is very low. This makes promotion through internet not suitable. For the product Sprayfo it is important to give more explanation which can be reviewed by the farmers, TV commercials are mostly just one or two minutes which is too short. By using a magazine or an advertisement in a newspaper the information that can be given is much more. It is important for Sloten BV to advertise through a magazine which explains the product step by step and this is also an additional service given by Sloten BV to the farmers. The picture below is an example of an advertising specialty that Sloten BV could use, the costs of the production are around 260 euro for 500 pieces from vistaprint.com. [footnoteRef:43] The advertising costs for a magazine are around $3,875.00[footnoteRef:44] euro for a full-page black and white. There are many factors that can influence current ad rates. [42: Internet world stats.(n.d.). Retrieved December 15, 2011, from http://www.internetworldstats.com/asia/vn.htm] [43: Vistaprint.(n.d.). Retrieved December 15, 2011, from http://www.vistaprint.nl/folders.aspx?xnav=TsrItem&xnid=Business_AdvertisingMarketing_Brochures] [44: Gaebler.(n.d.). Retrieved December 15, 2011, from http://www.gaebler.com/Vietnam-magazine-advertising-costs++39365]

Regulatory constraints

The table below is about the basic rules of an advertisement. There are many more regulation constraints for advertising in Vietnam (see forms below). It is important for Sloten BV to know what the regulations are. For example that the written language has to be Vietnamese on the packages, Sloten has to consider the regulations first before they start producing the product and export it. In the tables below are the main regulations for promotion in Vietnam.The Ordinance on Advertising strictly prohibits the following:

Advertising which discloses State secrets, or which harms national independence and sovereignty, defense and security or the safety of society;

Advertising which is contrary to the traditions, history, culture, ethics or fine customs of the Vietnamese;

Using the national flag, the flag of the Party, the national emblem, the national anthem or its melody;

Misleading advertising;

Advertising which has an adverse effect on urban beauty, landscape and environment, and traffic order;

Advertising goods and services which the law prohibits to be traded or advertised.

Language of the advertisement

The spoken or written text of an advertisement must be in Vietnamese, except in the case of:

Internationally-known words, commercial names, or words which cannot be translated into Vietnamese;

Advertisements in printed media permitted to be published in a foreign or ethnic minority language or in radio and television programs in a foreign or ethnic minority language;

In the case of spoken text, the Vietnamese language must be read first, followed by the ethnic minority language, followed by the foreign language;

In the case of written text, the size of the text in the foreign or ethnic minority language must be smaller than the Vietnamese text.

Demonstration and trade fairsDemonstrations and trade fairs are important for Sloten BV to introduce Sprayfo in Vietnams market. Demonstration is focus on using samples to show how Sprayfo works. Trade fair concentrates on introducing Sprayfo to Vietnamese farmers, such as Sprayfos history, it more likes a exhibition for introducing Sprayfo. Trade fairs are common in Vietnam to promote a product, especially new product in a new market. Sloten BV could also do demonstration to introduce about Sprayfo since this is not a common product in Vietnam.Every year, around November, there is an exhibition called Viet stock[footnoteRef:45]. Viet stock is Vietnams No.1 Feed and Livestock Industry Event. This exhibition is one of the biggest exhibitions in Vietnam which are going to be visited by excellence business visitors who can make business with Sloten BV. In 2010, this event was held for three days with total more than 5,000 visitors and exhibitors reported sales of USD 12 million sales at the exhibition. This is a huge event which Sloten BV should follow in order to expand their position in the market. To have a place in the event, Sloten BV should prepare US$ 298 (per square meter) for bare space only or US$ 328 (per square meter) for walk on package which also include some facilities in the exhibition.[footnoteRef:46] This price will be worth compared with the chance to meet a potential partner or buyer. [45: Track record.(n.d.).Vietstock. Retrieved December 15, 2011, from http://www.vietstock.org/track.html] [46: Cost of Participation.(n.d.).Vietstock. Retrieved December 15, 2011, from http://www.vietstock.org/booth.html]

Moreover, in 2012, there will be an exhibition called Ildex Vietnam 2012. Ildex Vietnam 2011 is The 4th International Livestock, Dairy, Meat Processing and Aquaculture. This event will be organized by The Department of Animal Health, Ministry of Agriculture and Rural Development. This is also an alternative trade fair for Sloten BV to join it and promote Sprayfo. The event will take place from March 22nd -24th, 2012 at Saigon Exhibition and Convention Centre (SECC) Ho Chi Minh City.[footnoteRef:47] Sloten BV will attend the exhibition to get more potential customers. [47: Ildex Vietnam.(n.d.).Biztradeshows. Retrieved December 15, 2011, from http://www.biztradeshows.com/trade-events/ildex-vietnam.html]

Promotional toolsWhen Sloten BV introduces Sprayfo in Vietnam, they need to join a trade fair in order to show and introduce their product. Therefore, it is necessary for Sloten BV to bring samples to distribute it during the trade fair and show people how to use Sprayfo. However, sampling to farmers is not enough since the milk replacer is a long-term product, the performances of the product will be visible after a few months. Therefore, sampling to farmers is not sufficient. There is another promotion tool, discounts, which depends on the distributor since the distributor determines the final price. Nevertheless, Sloten BV could still influence the distributor in order to put discounts on Sprayfo. However, only putting discounts on products of animal feed industry is not always smart. Farmers seldom react on discounts of other animal feed products since the product has to be used on a long term base. The best way for Sloten to promote Sprayfo is to establish a relationship with Vietnam biggest farms or some farms that have influences to attract more customers. Because other farms will follow or be influenced by these farms purchasing behavior, this is easier for Vietnamese farmers to accept Sprayfo.

Promotional messageMost advertising agencies prefer to keep the content of the message simple and clear when doing promotion in Vietnam. Most consumers often do not understand advertising, so the message has to be made straight-forward and the unique selling proposition has to be pointed out. However, a study in 2003 revealed that advertising agencies should move away from hard-selling and straight-forward to more sophisticated messages in Vietnam. However, there is an important point need be focused on: Vietnamese love entertaining and storytelling commercials. Therefore, it would be better to promote with a meaningful message in story pattern in Vietnam. [footnoteRef:48] [48: Heymer, F. (2008). Successful Promotion of Consumer Goods in Vietnam. (p. 204). Norderstedt, Germany: GRIN Verlag.]

Sales methodsSloten BV could make a frame contract with the distributor to confirm how many product they should sell per year. For instance, if they make 2000 tons frame contract for the distributor to sell the product to the customer per year then the distributor must observe, otherwise, Sloten BV can stop the contract with the distributor. Furthermore, there are several ways (like mail, website and phone) for the distributor to sell the product to customers in Vietnam. Selling through internet will be not a suitable way, because only 27% of the population in Vietnam has internet and to help that the orders from the farmers to the distributors will be done by Telephone line where all the farmers can make their orders. There will be a minimum amount of order that has to be ordered by the farmer at least, so the distributor could distribute it. But the contact way between distributor and Sloten is through website, because it is more convenient and clearer for distributor to make order from Sloten website as they do business between two different countries.FarmersDistributorSloten

Website Telephone

5.6 Logistic and transportation Time lines between order processing and delivery: According to presentation on 24th November of Mr de Vries, it takes 2 days for Sloten BV to confirm the order and prepare invoice and at least 2 weeks to prepare the entire document for exporting. Moreover, if Sloten BV wants to be safe in payment term, the company should open L/C (letter of credit). It takes at least 1-2 weeks for the Vietnam bank to open L/C for distributer. In addition, distributer also needs at least one day to deal with customer and transport product from Hochiminh port to warehouse. Sloten BV already had contract with distributor about product, so the company does not have to deal with this item. It means Sloten BV takes minimum 2 week to one month to delivery product from Sloten Deventer to distributor. Sloten should be aware of time for order processing and delivery, so the distributor can received product in the most convenient time.

Negotiated delivery terms-incoterms: it is very important for Sloten BV to negotiate with distributer to determine the most suitable term-incoterms. There are different type of incoterms (international commercial terms) issued by ICC (International Chamber of Commerce) such as incoterm 2000 or incoterm 2010. In sale transaction, agreement on term of sale and know what is included in the sale price is very crucial. Sloten BV should choose the Incoterm what brings most benefit for the company as well as preparation to quote on other terms. Because this item relates to costs, risks associated with transportation and delivery goods. According to Mr Andre Damveld, Sloten BV will choose DDP (delivery duty paid) in Europe andCIF(cost, insurance and freight) or DDU(delivery duty unpaid) outside of EU. It means Sloten BV will response of goods to harbour of destination and distributor will assume the import custom clearance because distributor used to local import requirement.[footnoteRef:49] [49: Retrieved December 8, 2011, from http://www.iccwbo.org/Incoterms/index.html?id=40772]

Requirements and availability of warehousing and storage:Sloten BV should not build warehousing or store in Vietnam because the company has not known future business between the company and Vietnam market yet. However, it will be better if distributor has its own warehouse or store. According to market demand, distributor can arrange suitable quantity of order in one time; it will save cost of transportation for distributor.

Inventory control methods: The numbers of inventory control methods are variety which includes manual and software. It is very important to know inventory situation of company to plan company production. Sloten BV is not only export to Vietnam but also many other country so the company has experienced for long time. Therefore,Sloten BV can advise distributor to use inventory method such as ABC analysis. It means distributor separate Sprayfo in different group according to price or expired date. By this way, distributor can organize product in proper way and know when to arrange next order based on which groups were sold, and which groups are still remaining.[footnoteRef:50] [50: Retrieved December 8, 2011, from http://inventorysystemsoftware.wordpress.com/2010/10/04/4-inventory-control-methods/]

Freight insurance requirements:i. Methods of transport: According to presentation of Mr de Vries, Sloten BV will choose shipping method to export product from Sloten Deventer to Hochiminh port (in Vietnam). This is the cheapest and most familiar way of export to supplier and buyers. There are about 17 tons of product are carried by 20 ft. container and 25 tons are carried by 40ft.container. Furthermore, Sloten BV should identify whether Sprayfo needs any special carriage like humidity. Because Vietnam is tropical country with high humidity which may affect to Srayfo.[footnoteRef:51] [51: Retrieved December 8, 2011, from http://www.mrbox.co.uk/new-used-containers/shipping-containers.php]

ii. Usage of professional services intermediaries:Sloten BV focuses on animal feed, so it is better to transfer shipping preparation to a company of freight forwarder. This company will help Sloten BV to ship product from Rotterdam to Hochiminhhabour. Moreover, the firm should also prepare document carefully from The Netherlands to make it easier for custom clearance in Vietnamiii. Documentation[footnoteRef:52]: if Sloten wants to export to Vietnam, the company need to prepare the most documentation such as transaction document (invoices), transportation document (B/L: bill of lading), and the export documents required for customs and declaration. In addition, Sloten BV had better contact the Chamber of Commerce to verify that the company use correct document. Sloten should also consider importer in Vietnam to make sure custom clearance is done quickly. In general, Vietnam shipping documents include commercial invoices, pro forma invoices, bill of lading, packing list, import license, insurance certificate and certificate of origin. [52: Retrieved December 8, 2011, from http://www.austrade.gov.au/Doing-business-in-Vietnam/default.aspx]

Vietnam foreign trading organization usually require a complete description of the goods, all marks and numbers, the number of cases/bales or other shipping containers, the net and gross weights, the net value of the good, the country of origin are included in commercial invoice. Sometime the authority also as for number of copies and any extra information also be contained in the import contract Certificate of Origin. Bill of lading: in the bill of lading, the shippers acknowledge receipt of a delivery of goods as stated in the bill. Packing list: use of packing list is not compulsory but all information from this should follow in other document documentation. Custom uses the packing list as a check list to verify the incoming cargo of importing in Vietnam Certificate of origin: the original C/O form is compulsory in Vietnam and a certificate number in the C/O. Sloten BV should sign authorization in blue or red color because the Vietnamese customs may consider black signature as copies. Weight and measure should be shown in kilograms. The company should ask distributor if there is specific information by product or by standard in Vietnam. iv. Packing and marking requirements: According to Mr. de Vries presentation, Sloten BV mostly use carton and paper with ecology, safety, and lightly to pack the product. The labeling for export market, Sloten BV has to do it in two languages. The first is the English version as an international language, them the second is the language which are used in the country. Since our export country is Vietnam, the labeling will be in English and Vietnamese. This will help for the farmer to understand about the product. Based on Mr de Vries presentation, Sloten BVs products were packed in 50 kg in the past. However, since there were new export regulations, the package reduced into 25 kg. Sloten BV also has a consideration to reduce the package into small package, 20 kg, therefore the farmer could easier carry the product. Moreover, if Sloten BV wants to export the product to Vietnam, the company should consider Degree 89/2006/ND-CP which provides about requirement for labeling of goods produced in foreign countries that are imported for sale in the Vietnamese market. In which, label of product must contain clear contain on display panel. Firstly, these goods display condition include: Name of goods; Name and address of the organization or individual responsible for the goods; Origin of goods; Quantity; -Date of manufacture; Expiry date; Ingredients or ingredient quantities; Hygiene and safety information, warnings; Instructions on use and preservation. Secondly, an information section on the right-hand side of principle display panel in which non-compulsory contents may be represented. (As well as any compulsory contents which could not fit in the principal display panel) provided that the non-compulsory contents do not conceal or lead to the misunderstanding of the compulsory contents of labels. The basic requirement of Decree 89 and accompanying regulations is that all letters, numbers, drawings, pictures, signs, and codes on labels of goods must be clear and must determine the substance of the goods - any ambiguous labeling that causes confusion with other labels of goods is strictly prohibited. Be aware of this rule will prevent any negative situation with products which were exported to Vietnam.[footnoteRef:53] Furthermore, Sloten BV should consider also marking on paper pack to be shipped such as: customer identification code, shippers mark, place of origin, port of entry, gross and net weigh, ingredients Fully understand of packing and marking requirement in The Netherland as well as in Vietnam will support export process quickly and effectively. [53: Retrieved December 8, 2011, from http://www.globaltrade.net/international-trade-import-exports/f/business/text/Vietnam/Marketing-Regulations-Packaging-and-Labeling-Labeling-and-Marking-Requirements-in-Vietnam.html]

6. International law6.1 Mediation/ arbitration clauses and VenueIn case of Holland and Vietnam are the parties of the international commercial arbitration. Therefore, Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre (SIAC Rules) for the time being in force, which rules are deemed to be incorporated by reference in this clause. The Tribunal shall consist of_______* arbitrator (s) to be appointed by the Chairman of the SIAC. The language of the arbitration shall be_______.Shall be part of the contract, then any trade disputes shall be charge by the SIAC. Any local law has its own limited on international trade disputes and this is why Dutch law can restrict Dutch company but not Vietnams company another four reasons Sloten BV choose SIAC are: 1 Case of the existence of a valid arbitration agreement, the arbitration have the force of absolute exclusion within the jurisdiction of the courts of the State. 2 If brought arbitration, for legal of applies, full by party conventions, even may fail to method for award, and can pursuant to any party conventions of rules, and contract terms, and modern businessman method (LexMercatoria) and friendly arbitration of way, on entity method, full can excluded within law of applies (mandatory rule except, but the rules number very limited). 3 Arbitration Conference final than for the lengthy processing, to be efficient, save time. 4 Enforcement of arbitral power is than mediation or conciliation, more efficiency.

Securing PaymentThe distributor has to pay 50% for securing during they order the product. After the distributor next order they have to pay the rest 50%.

6.2 Language considerationSloten BV is an export company it already exports the products to 60 countries they are sure to have the English contract. And the official language of Vietnam is Vietnamese. According these two reasons Sloten will chooses English and Vietnamese for the contract language. The reason why Sloten do not choose Dutch are because Sloten is an international business company, 87 % of Dutch people can speak English well enough to have a conversation with a native speaker [footnoteRef:54]and the official language around the world is English. [54: 2006, February). Retrieved from http://ec.europa.eu/public_opinion/archives/ebs/ebs_243_en.pdf]

6.3 Contract terms and conditions Currency of payment and exchange rateSloten BV chooses Euro and USD to be paid because Sloten is located in Holland which is currency by euro, USD is the international currency and the distributor has to pay the money to Holland Sloten. For the exchange rate there are three situations because every day and every hour the rate of exchange is different. First, when the Euro and USD are decrease then it is cheaper for Vietnam distributor to pay. Second, when the exchange rate for Vietnam is decline then the distributor will pay much more. Depend on the two situations it is fair for both Sloten and Vietnam distributors. Third, however sometimes the exchange rate drop and rise dramatically (10%) at this issue both distributor and Sloten can require making a new contract of the exchange rate.

Method of paymentSloten BV will choose letter of credit to ask the distributor to pay. Because this is the safest way to protect both Sloten BV and the distributors right. For example, the distributor order product on website and pay the money by letter credit to the bank after Sloten BV send the product to Vietnam and the distributor confirm that they receive the product on website then the payment will be succeeded. For this situation the distributor checks the goods and Sloten BV get the money on time.

Insurance and after sale servicesSloten BV will buy the deliver insurance and make a contract with the deliver company before they deliver goods to Vietnam by sea. If there are something wrong during the delivery the insurance company will pay the loss. After the goods arrived at harbor in Vietnam it not Sloten BVs reasonability and the distributor should take the risk for save and preserve the product. Otherwise, the distributor must shoulder the reasonability. After sale services, Sloten BV will provide a ten-day training course to training the distributor how to use and save the goods. And Sloten BV will also provide a website to answer distributor and customers questions.

6.4 Product LiabilitySloten BV reserves the final explanation to the product. It means the distributor cannot change anything about the product not only the cover of the product but also the ingredients of the product except the ingredients cannot be accepted by Vietnams government and the color of the cover is different and bad means in Vietnam. Otherwise, the distributor will be taken to the court by interlope Sloten BVs right.

6.5 Intellectual property protectionSloten BV has a trademark to their product. All the logos, materials and the property which Sloten BV had are under license and are protected by copyright, trademark and other intellectual property laws. If there is anyone who take Sloten BVs product without their permission, Sloten BV has their power to carry out the problem regarding to the law. Moreover, Sloten BV has everything under contract. There will be specific contract for distributor and Sloten BV has rights to give limitation such as exclusive distributors. (m9)

6.6 Sales distributor agreements Consideration of foreign laws and regulations that affect agreementBecause both Holland and Vietnam are a party to the international commercial arbitration, Sloten BV and the distributor have to follow the laws and regulations of the international commercial arbitration.

CommissionsBecause Sloten BV only exports the product in a low price, there will be no commissions for the distributor.

Place of the distributorSloten BV will use a distributor in Ho Chi Minh which is located in the Southern Vietnam. Most of the commercial farms are located in Mekong River Delta where the distributor is also taking place. So the distributor will take place in the whole south of Vietnam. Sloten BV will just set one distributor in south of Vietnam by contract to protect the profit for the distributor in Ho Chi Minh.

DutiesThe distributor in Vietnam will have to duty to contact all the customers and try to customer retention and stimulate re-buy. The main duty for the distributor is to sell the entire product which in the contract to the customer.

AuthorityAuthority of the distributor will be saving and protecting the product in the right way (the product cannot be saving in the rain weather). It is means the distributor must make sure that the product will not be denatured. Otherwise, they need to afford losses.

7. Financial analysis7.1 Facility and equipment requirements

Year 2012Total

MachineryMaintenance 3.000

TransportFrom plant to harbor 2.500

Total 5.500

The only capital expenditure are machinery and transport, the fundament of Sloten BV is already settled. Therefore, Sloten BV only has additional costs on the transport from the plant to the harbor. The maintenance of the machinery will also be included in the costs. The distributor will have to distribute and pay the costs of the warehouse.

7.2 Sales ForecastTarget marketNumber of cattle (x1000)20052007200820092010

Makon River Delta537.9689.6713.5696.9691.1

Ben Tre124.3157.6170.6172.0166.5

Tra Vinh117.9145.4158.3154.3152.4

An Gian69.872.971.173.775.3

Tay Ninh92.3145.5133.1131.0128.1

TP. Ho Chi Minh 80.399.4106.0107.499.4

Total number of cattle in the target market in 20101312.8

Only the cows till 12 months old could use the milk replacers, therefore the focus is on the cattle till 12 months. The collected data is about the number of cattle, the average age of cows is 6 years. In the target market there are 1312800 dairy cows. Through dividing the total number of dairy cows by the maximum age, which is 6 years old. It will give the following calculation:

Estimation of dairy cows till 12 months1.312.800 dairy cows / 6 years = 218.800

218.800 is the estimation for dairy cows till 12 months in the target market.The aim for the first year is occupying 2 percent of the market, according to the presentation of Mr. de Vries (area export manager).This means that the first year has to be at least 2% of 218.800. This will give the following calculation:

Goal for the first year (2% of the market share)218.800 x 2% = 4376 dairy cows

According to the presentation of Mr. de Vries, the average usage of Sprayfo for a calve till 12 months is 50kg. The estimation of the number of units can be calculated by multiplying 50kg with the total number of the target market:

Total Estimation50 Kg x 218.800 = 10.940.000 Kg

This is the total estimation of the whole market, but the aim of Sloten BV is 2% of the market for the first year. Therefore, the 2% has to be calculated from the total amount. This amount will be further used in the break-down analysis. The following table shows the 2% of the total estimation and the expected number of units Sprayfo selling the first year.

Forecast number of units for the first year (last 6 months)50Kg x 4376 dairy cows = 218.800 Kg / 20 Kg (one unit) = 10940 Units

The expectation of the first 6 months in 2012 is that Sloten BV will not make any sales, because they have to negotiate with the distributor and introduce the product. This will approximately take 6 months. Additionally, the price of Sprayfo is 1000 per ton.

Sales forecast last 6 months of 2012Year 2012Units (per 20 kg) Price (per ton)Turnover

July 1368 1000 27.360

August1368 1000 27.360

September1641 1000 32.820

October1914 1000 38.280

November2188 1000 43.760

December2461 1000 49.220

Total 201210940 1000 218.800

The sales forecast is based on a possible growth throughout the 6 months. Sloten BV is aiming for 2% market share in the first year of entering a new country. The expectation for the first month (July) is 12,5 % of the expected 2%. From August the sales will increase with 2,5% per month for the following months until the end of 2012.

Sales forecast for 5 years Year 2013 till 2016Units (per 20 kg) Price ( per ton)Turnover

Year 2012 (6 months)10940 1000 218.800

Year 201322536 1000 450.720

Year 201422974 1000 459.480

Year 201523521 1000 470.420

Year 201624177 1000 483.540

Once Sprayfo is introduced in the first year, the expected sales of Sprayfo will increase, because once the product is introduced the Vietnamese farmers will get familiar with the product. Therefore, the expectation is that the demand will rise.

7.3 Cost of goods soldThe costs of goods sold are the total expenses on the product. According to Mr. de Vries, 90% is the cost of sale and 10% is the gross profit.

Sloten BVs cost priceTurnover100%

Cost of sale85%

Gross Profit15%

The table below gives the expected cost of goods sold for 5 years.

Cost of goods sold for 5 yearsYear 2013 till 2016Units (per 20 kg) Costs (per ton) Costs

Year 2012 (6 months)10940 900 196.920

Year 201322536 900 405.648

Year 201422974 900 413.532

Year 201523521 900 423.378

Year 201624177 900 435.186

7.4 Project international Income statementA financial statement measures the performance of the forecast that has been made for Sloten BV.This financial statement shows the net profit of Sprayfo in Vietnam. In the year 2012 the net profit will be much less than the following years, but that is mainly because the first 6 months the product will be introduced. The cost of sales is calculated with 90% of the revenue.[footnoteRef:55] [55: Mr De Vries (n.d.). Presentation at Saxion Deventer]

Year 2012Year 2013Year 2014Year 2015Year 2016

Revenue 218.800 450.720 459.480 470.420 483.540

Cost of Sales 196.920 405.648 413.532 423.378 435.186

Net profit 21.880 45.072 45.948 47.042 48.354

7.5 Cash Flow

JanuaryFebruaryMarchAprilMeiJune

Inflow

Turn over - - - - - -

Net Cash Inflow - - - - - -

Outflow

Cost of sale - - - - - -

Promotion 2.500 * 1.000 1.000 1.000 1.000 1.000

Distribution - - - - - -

Other costs 1.000 1.000 1.000 1.000 1.000 1.000

Net Outflow 5.000 3.500 3.500 3.500 3.500 3.500

Profit/loss- 5.000- 3.500- 3.500- 3.500- 3.500- 3.500

July AugustSeptemberOctoberNovemberDecember

Inflow

Turn over 27.360 27.360 32.820 38.280 43.760 49.220

Net Cash Inflow 27.360 27.360 32.820 38.280 43.760 49.220

Outflow

Cost of sale 24.624 24.624 29.538 34.452 39.384 44.298

Promotion 1.000 1.000 1.000 1.000 2.000 ** 1.000

Distribution 1.500 1.500 1.500 1.500 1.500 1.500

Other costs 500 500 500 500 500 500

Net Outflow 27.624 27.624 32.538 37.452 43.384 47.298

Profit/loss - 264- 264 228 828 376 1.922

* The promotion costs are higher in the first month, because the product has to be introduced** The promotion costs in November are higher, because the famous Vietstock exhibition takes place.[footnoteRef:56] [56: Track record.(n.d.).Vietstock. Retrieved December 15, 2011, from http://www.vietstock.org/track.html]

7.5 Breakdown analysisThe break-even point is the point at which costs and turnover are equal. For this calculation some numbers are necessary. First of all, the variable costs and the fixed costs are necessary. The variable cost per unit Sprayfo is 17. However, the fixed costs are not known yet. Therefore, the fixed costs will be calculated by the following formula: Fixed costs = sales profit (in this case average 5 years) variables. Fixed costs = 2082960 - 41659 - 1874664 = 166637 |Break-even point [footnoteRef:57]: [57: Break-even analysis. Retrieved December 20, 2011, from http://entrepreneurs.about.com/od/businessplan/a/breakeven.htm]

Break-even point

Fixed cost (Unit selling price Variable costs) Fixed costs = 166.637Unit selling price = 20Variable costs = 17 166637

( 20 - 17)

[footnoteRef:58] [58: Break even Calculator. (n.d.). Fast 4 cast. Retrieved from http://fast4cast.com/break-even-calculator.aspx]

The breakeven is at 55.546 units in the total forecastmade in the calculation before.

7.7 Financing sources, identify the terms[footnoteRef:59] [59: Business dictionary. Retrieved December 21, 2011, from http://www.businessdictionary.com/definition/equity-investment.html]

The term financing means mainly the act of providing money of a project. Working capital requirements are also important for a business as Sloten for the cash that should be available for day-to-day operations. Sloten BV invest money in their company which is called equity investment in order to secure their needed capital requirements.

8. Risk management

8.1 Country riskAccording to Vietnam Investment New reported in 10th February 2010 , Vietnam government claimed that all organizations or individuals can only import the types of feeds that listed in the list of imports permitted for circulation in Vietnam. As for other low-quality feeds, importers must take measures to recycle and disposal them, and compensate for customers loss. The document took effect from March 25, 2010. The government requires all organizations and individuals must have business licenses, facilities, and necessary technologies that meet the current standards to operate in the area of livestock feed. What is more, feeds must be stored safely and distributed in the stores or shops which have accurate addresses.[footnoteRef:60] However, Vietnam feed association forecasted in January 14th 2011 that feeds prices would increase in 2011 due to the raising of World raw materials price and the redevelopment of feed industry. In any case, Vietnam still remains relatively poor, although it has indeed embarked on a pace of rapid economic growth. Foreign exports can do business in many provinces of Vietnam and not face much interference from the state, but they have to put up with more of the states complex rules and regulations. And there are macroeconomic risks to investing in Vietnam.[footnoteRef:61] [60: Kim Loan (2011, October 26). Tough regulations on import of livestock feed.Vietnam Information News. Retrieved from http://www.vietnamimportexportnews.com/vietnam-import-export/vietnam-importing-products/38956-tough-regulations-on-import-of-livestock-feed.html] [61: PALASH R. GHOSH (2010, August 26). Vietnam: High Potential, High Risks.International Business Times. Retrieved from http://www.ibtimes.com/articles/46475/20100826/vietnam.htm]

8.2 Commercial riskCredit in Vietnam growth each year has averaged over 30 percent for a decade.[footnoteRef:62] In order to ensure credit, Vietnam's five-year credit default swaps, which reflect the cost of insurance against default, are at about 245 basis points, or about 80 basis points more than regional peers the Philippines and Indonesia. [footnoteRef:63]There is a data that collected by D&B shows about latest proprietary cross-border payments performance: Vietnamese importers made 27.0% of payments 30 or more days over terms inthe 12 months ending the first quarter 2010. Meanwhile, 69.6% of the payments were prompt; 14.1% were 60 or more days over terms; and 2.8% were severely delinquent with a delay of 120 days or longer. [footnoteRef:64] [62: PALASH R. GHOSH (2010, August 26). Vietnam: High Potential, High Risks.International Business Times. Retrieved from http://www.ibtimes.com/articles/46475/20100826/vietnam.htm] [63: John Ruwitch (2010, May 27). Currency trend a key risk in Vietnam.REUTERS. Retrieved from http://uk.reuters.com/article/2010/05/27/businesspro-us-frontiers-vietnam-idUKTRE64Q08X20100527] [64: John Ruwitch (2010,