INTRODUCTION ABOUT TRUE MILK
Overview of the dairy market
Vietnam's dairy market is thriving, driven by a growing population and evolving nutritional preferences that boost milk demand This has attracted both domestic and international dairy companies, intensifying competition as numerous foreign milk brands make their entrance alongside established local players.
The COVID-19 epidemic has had a great impact on the production and business activities of enterprises However, dairy businesses seem to be less affected by this "storm" Closing
In 2020, the dairy industry experienced a significant market capitalization growth of 19.1%, outperforming the VN-Index, which rose by 14.9% Following a low point on March 24, 2020, the dairy sector rebounded sharply, increasing by 60%, although this was still below the overall market recovery of 67.5%, as reported by SSI Research.
SSI Research indicates that the domestic demand for dairy products experienced a smaller decline of only 6.1% in value during the first nine months of 2020, compared to a 7.5% drop in overall consumer goods (FMCG) consumption Additionally, the country's nominal retail sales growth stood at 4.98% according to GSO data from 2020.
Vietnam is emerging as a promising dairy market due to its rapidly growing population, characterized by a youthful demographic and a growth rate of approximately 1.2% per year With a GDP growth rate of 6-8% annually and a per capita income increase of 14.2% each year, the country presents significant opportunities for dairy industry expansion.
The increasing focus on health and wellness among the Vietnamese population is driving a strong demand for dairy products, which is projected to grow at an impressive rate of 9% per year in the coming years.
Phu Hung Securities Joint Stock Company (PHS) reports that, despite the adverse effects of COVID-19 on the global and Vietnamese economies, the consumption of milk and dairy products in Vietnam has experienced significant growth Notably, milk consumption in urban areas has increased by 10%, while rural areas have seen an impressive growth rate of 15%, surpassing levels recorded before the pandemic in 2020.
According to SSI Research's forecast for 2021, single-digit revenue growth is anticipated, assuming the Covid-19 pandemic is under control by mid-2021 and social distancing measures are lifted globally This recovery is expected to drive overall dairy consumption back from its 2020 low of 7%.
The fact that many milk brands appear together has created considerable competition To sell products, businesses are constantly coming up with new strategies
As of the end of 2020, Vinamilk maintained its position as the leading player in the dairy industry, commanding a market share of 43.3% When factoring in Moc Chau Milk, the combined market share of these two companies exceeds 45%.
Moc Chau has undergone a significant transformation following its return to Vinamilk, evidenced by a remarkable 68% increase in net profit for Moc Chau milk during the first nine months of 2020 Additionally, IDP reported a net profit of VND 151 billion in the first half of last year, up from VND 113 billion in 2019.
Nutifood is making significant strides in the liquid milk sector, partnering with Hoang Anh Gia Lai (HAGL) to develop a raw milk area housing nearly 120,000 dairy cows, aimed at producing 1.2 million liters of milk per day However, the collaboration has not met expectations, resulting in a limited volume of fresh milk sales, as Nutifood's current dairy farming operations only encompass a few thousand cows, lagging behind competitors As it stands, Nutifood holds a 7.2% share of the dairy market.
Since its establishment, TH True Milk aimed to capture 50% of the fresh milk market by 2020, investing $1.2 billion and significant human resources into developing Asia's largest dairy factory and a major cow farm project By 2015, just five years after launching its first product, TH True Milk became the leading enterprise in Vietnam's dairy sector, boasting a herd of 45,000 cows across 8,100 hectares in Nghe An As of 2020, the company held a 6.1% share of the national milk market.
The dairy industry is experiencing heightened competition as major companies pursue mergers and acquisitions, leading to an influx of new market entrants Recently, Masan introduced innovative products, while Vitadairy is rapidly expanding its presence in the powdered milk sector.
Dairy Market In 2020 – Source: Euromonitor, SSI
Introduce TH True Milk
TH True Milk Company, officially known as TH Milk Food Joint Stock Company and part of TH Group, was established with the financial guidance of Bac A Commercial Joint Stock Bank Since entering the Vietnamese market in 2010, the company has focused on producing authentic fresh milk products In just 12 years, TH True Milk has reached significant milestones, including the inauguration of a clean fresh milk factory in 2013 with a production capacity of 500,000 tons per year.
Dairy cows are raised according to high technology standards, with more than 45,000 cows carefully selected from New Zealand, Australia, Canada,etc
TH Group aims to be Vietnam's premier manufacturer in the clean food sector, leveraging cutting-edge technology The company is committed to establishing itself as a globally recognized food brand that earns the trust and affection of consumers while fostering national pride.
TH Group is dedicated to embracing nature by offering clean, safe, and nutritious food products that nourish the body and soul of the Vietnamese people Their mission is to enhance the physical and intellectual well-being of the nation, ensuring that future generations of Vietnamese children have access to wholesome and nutritious milk sourced from nature.
Embodying the slogan "True Happiness," TH is dedicated to crafting the finest milkshakes with the love and care of a mother's heart, while consistently upholding five core values that strengthen the bond with consumers.
• Environmentally friendly – Out-of-the-box thinking
In the midst of confusion within Vietnam's domestic dairy industry regarding the terms "powdered milk" and "fresh milk," TH True Milk has pioneered a new approach, establishing a strong foundation for clean fresh milk production and processing The brand emphasizes that its core value lies in promoting community health, positioning itself as a leader in the quest for quality dairy products.
The project aims to establish concentrated barns for raising 137,000 dairy cows across 37,000 hectares, with an investment of $1.2 billion This initiative is designed to fulfill 50% of Vietnam's domestic demand for dairy products, positioning the operation as the leading supplier of clean and pasteurized fresh milk in the country.
Launched TH True Milk pasteurized fresh milk, at the same time expanding the production of products made from fresh milk
TH True Mart has launched a retail chain dedicated to offering fresh and clean products sourced from TH Farms, including pasteurized fresh milk, TH True Milk yogurt, beef, seafood, and a variety of fresh vegetables and fruits The brand aims to establish itself as a convenient source of high-quality, safe food for consumers, ensuring that they have access to healthy options.
On September 18, 2020, TH Group launched a groundbreaking ceremony for a high-tech concentrated dairy farming project in Mo Rai border commune, Sa Thay district, Kon Tum province This initiative is part of TH True Milk's strategic plan to establish a nationwide network of dairy farms, with existing locations in Nghe An, Ha Giang, Phu Yen, and Thanh Hoa, and future expansions planned for An Giang and Cao Bang The ambitious goal is to collaborate with farmers to reach a total of 400,000 concentrated dairy cows by 2025, thereby enhancing the TH True Mart store chain across the country to better serve consumer demand.
TH Food Chain Joint Stock Company (distribution)
TH Dairy Food Joint Stock Company (farm)
TH Milk Joint Stock Company (factory)
TH True Milk’s marketing environment
Internal marketing environment
TH True Milk has secured capital from shareholders, loans from BIDV, Vietnam Bank (VDB), Nghe An branch, and Maritime Bank The company also benefits from investment advice provided by Bac A Bank, where Ms Thai Huong serves as the executive manager; this bank previously held a 7% stake in TH True Milk as of 2014 Additionally, TH Group receives support from the Israeli government through an investment package.
TH recognizes that people are a crucial asset and key to sustainable business development As a result, the company prioritizes investing in its workforce With a professional environment fostered by an international team and collaboration with foreign experts, TH emphasizes talent training to enhance job performance Through intensive courses that continuously update knowledge and provide modern technology, TH ensures its employees stay aligned with current trends.
Various advertising methods, including TV commercials, newspaper ads, posters at distribution centers, and promotional events, effectively communicate the message of "clean milk." These initiatives not only enhance brand image but also emphasize the health benefits of safe milk for consumers.
External marketing environment
Vietnam's socialist regime fosters a stable political climate and an evolving legal framework that benefits businesses like TH True Milk The implementation of Decree 38/2019/ND-CP, which sets the general minimum salary at 1,490,000 VND per month, is expected to boost national purchasing power However, this increase in employee salaries also poses challenges for TH True Milk, as it leads to higher operational costs.
Globalization and international economic integration are rapidly advancing, particularly following Vietnam's accession to the WTO, which opens up numerous opportunities for businesses, including the dairy sector, to collaborate with foreign partners As global dairy prices rise, Vietnamese dairy enterprises face increased competition, prompting them to explore international markets Additionally, domestic companies can now engage with advanced technologies, enhancing their competitiveness in this evolving landscape.
In the past year, the dairy industry has shown a positive trend with an increased profit margin, despite the challenges posed by the COVID-19 pandemic, which initially reduced global milk demand and kept dairy raw material prices low, particularly with Anhydrous prices dropping by 23% Furthermore, the decline in oil prices has contributed to lower packaging and transportation costs, further benefiting the industry.
The World Bank forecasts Vietnam's GDP growth to reach 6.6% in 2021, slightly lower than the previous estimate of 6.8% due to the impacts of COVID-19 However, this growth rate remains the highest in the ASEAN region, supported by stable average incomes that boost demand for food products, including milk This creates a favorable environment for TH True Milk to thrive amidst the pandemic Despite competitive pricing, Vietnamese dairy companies encounter challenges in product quality when compared to foreign competitors.
Many Vietnamese consumers accept a set price of more than 200% to use imported milk
Nghe An is home to Asia's largest concentration of high-tech dairy farms, featuring advanced machinery and modern farming equipment TH farm utilizes fully imported cows from renowned countries with verified pedigrees to ensure optimal milk production Each cow is equipped with health and growth monitoring chips, and the barns are designed with wind and air conditioning systems to provide ideal living conditions To maintain a closed-loop process in cow raising and milk production, TH Group has invested in a state-of-the-art clean fresh milk processing factory, the largest in Southeast Asia, boasting the most advanced equipment and technology available globally.
As cultural awareness rises and health consciousness among consumers increases, the demand for nutritious products like milk is rapidly growing in Vietnam TH True Milk has established itself in the market by promoting its brand as a provider of "clean milk," effectively catering to the evolving needs of health-focused customers.
TH True Milk is committed to preserving the purity of every drop of milk while producing environmentally friendly dairy products By integrating advanced technology into their production processes, they ensure the creation of healthy products that are safe for human consumption.
TH True Milk is dedicated to providing high-quality, fresh products that capture the essence of nature, catering to a diverse range of consumers A 2021 study by ADM Outside Voice revealed that 77% of consumers are actively seeking ways to enhance their immune systems, leading to a surge in demand for fresh milk, yogurt, and cheese, particularly during the COVID-19 pandemic This trend benefits TH True Milk, as its products are guaranteed to be clean, international-standard milk without preservatives, while preserving maximum nutrients The primary target audience includes parents with children aged 0-7 and teenagers aged 8-19, who prioritize product quality, nutritional value, and reasonable pricing Additionally, urban consumers are increasingly health-conscious about their families' well-being TH True Milk also aims to reach international markets, successfully entering demanding regions such as Russia, China, and ASEAN countries.
In 2009, TH True Milk entered a competitive dairy market dominated by established brands like Vinamilk, Dutch Lady, and Abbott Vinamilk leads the industry with a 43.3% market share, followed by Dutch Lady at 15.8%, while smaller companies account for the remainder Despite being a newcomer, TH True Milk has experienced significant growth, quickly ascending to the third position in market share within the dairy sector.
Beverage companies such as Suntory Pepsico, Tan Hiep Phat, etc or cereal brands such as Kellog's, Nutritional Nutifood, etc may reduce the market share of liquid dairy products
The raw materials to produce fresh milk are mostly supplied by TH True Milk
TH owns a dairy farm with an area of 37,000 hectares of fertile basalt red soil in Nghia Dan
Nghe An employs modern technology and advanced breeding techniques in its dairy farming, with each cluster housing approximately 15,000 to 17,000 high-quality dairy cows The cows at TH farm are imported from the US, Australia, Canada, and New Zealand, ensuring a clear pedigree that contributes to optimal milk production with high fat and protein content Additionally, the cows benefit from a diverse diet that includes corn, American sorghum, Mombasa grass, Mulato grass, soybean pods, and purified water.
TH True Milk's pasteurized fresh milk products are packaged using state-of-the-art Tetra Pak (Sweden) and SIG Combibloc (Germany) technology, ensuring the highest quality and modern standards in the industry.
TH True Milk products are readily available for customers through a well-established warehouse and storage system that facilitates distribution to intermediaries and major supermarkets like Big C and Coopmart The extensive TH True Mart supermarket chain across the country aims to deliver products to consumers quickly while ensuring optimal safety and quality Additionally, TH True Milk frequently hosts product launch seminars to enhance customer engagement and familiarity with their offerings.
TH TRUE MILK's STP STRATEGY ANALYSIS
Market Segment
3.1.1 Market segmentation by geographical location
Based on population density and consumption habits, it is divided into 2 groups: urban and rural
In 2019, the population of this area reached 33,059,735, representing 34.4% of the national total and showing an upward trend The high population density facilitates efficient distribution and consumption of goods Urban residents typically have higher incomes, leading to a greater focus on health and a preference for milk products for their families Loyalty to trusted brands is common among these consumers Experts predict that the dairy industry's growth in 2020 will primarily stem from heightened health awareness, particularly among urban populations As a result, TH True Milk is increasingly favored by a broad network of consumers in urban areas.
The population in rural areas is 63,149,249 people, accounting for 65.6% of the more than
As urbanization progresses, the consumption gap between rural and urban areas is narrowing; however, rural consumption levels still remain significantly lower than those in urban regions, affecting approximately 90 million people.
In 2020, milk consumption in rural areas is expected to increase by 15%, driven by consumer loyalty to traditional products that align with their income levels While urban consumers gravitate towards premium offerings, both urban and rural populations are increasingly prioritizing health, making nutrition and product quality key factors in their purchasing decisions.
3.1.2 Market segmentation based on demographics
Based on age, the market can be divided as follows:
Children aged 0-4 require a variety of essential nutrients, particularly DHA, to support their growth and development However, their digestive systems are still immature, making it important to provide specialized dairy products tailored for this age group.
• Age 5-14: This is the age when young people enter the development process, need a lot of nutrition for the body, serving the learning and training process
Age 15-25: This is the age when consumers are more autonomous in making decision, using product lines that are suitable for dynamism and youthfulness
Moreover, the purchase decision at this age depends on the quality of the product and the reasonable price
• Age over 25: Use calcium supplements for the body, provide enough essential nutrients, rich in protein and minerals
3.1.3 Market segmentation by consumer behavior
Ordinary customers: make up a fairly high percentage, they have quite rich consumer preferences and can access to a wide variety of milks
Customers with health conditions: malnutrition, osteoporosis, diabetes, etc.
Customers are interested in clean products suitable for diet and health protection, etc.
Define target market
Based on the above segments as well as considering the product characteristics, it can be seen that the target market for TH True Milk dairy products is the segment:
• People living in urban areas
Urban consumers have access to a wide range of media channels, enabling them to quickly and effectively learn about TH True Milk Given their average income and heightened awareness of product quality and health needs, it is reasonable for them to invest more in "clean" dairy products, even if they come at a slightly higher price.
TH True Milk is focused on a key customer segment: children in their growing years This age group requires essential nutrients, vitamins, DHA, and calcium for optimal development, leading to an unprecedented demand for milk.
To effectively attract younger customers, TH has continuously enhanced its product offerings to cater to various age groups and preferences, including strawberry and chocolate-flavored milk, as well as the TOPKID formula featuring appealing animated designs Notably, this demographic tends to be less conscious of pricing and financial considerations, which influences their purchasing decisions.
TH must conquer the customers in the next segment
TH True Milk aims to build trust with parents, as they make nutritional choices for their children aged 5-14 While children focus on appearance and taste, parents prioritize the origin, quality, and nutritional value of products Understanding the aspirations of Vietnamese families, TH True Milk embodies the motto “Make a good glass of milk with the mother’s heart.” Since entering the Vietnamese dairy market, TH True Milk has established itself as a brand of clean, pure, and fresh milk that meets international standards, continuously enhancing product quality to expand its market reach and attract a diverse customer base.
Target market positioning
TH True Milk's competitive advantage lies in its use of high-quality input materials sourced directly from TH farm, ensuring a reliable production process The company's core philosophy prioritizes community benefits over mere profit maximization, aiming to deliver "true natural" milk that serves consumers' needs With a strong commitment to sustainability, TH True Milk positions itself as a "green business," aspiring to create a positive impact for future generations in Vietnam These values have been effectively communicated through various media channels, consistently highlighting the freshness, cleanliness, and purity of their milk products.
TH Milk has distinguished itself in the dairy market by emphasizing the "clean" quality of its products, a characteristic that has not been effectively communicated by competitors like Vinamilk and Dutch Lady By being the first to publicly declare their commitment to "clean milk," TH Milk has set itself apart from its more established rivals, solidifying its position and initiating a clean milk revolution in Vietnam The emphasis on "true" and "standard" clean milk not only enhances TH Milk's brand identity but also resonates with the growing consumer demand for quality and transparency in dairy products.
TH TRUE MILK'S MARKETING MIX STRATEGY
TH TRUE MILK'S PRODUCTS STRATEGY
TH Group, guided by the motto “Clean fresh milk is the only way,” aims to deliver the finest natural products to consumers As living standards and incomes rise, so does the demand for high-quality milk, highlighting the importance of understanding its health benefits TH's journey is fueled by a commitment to community health, seeking to provide authentic and joyful experiences through their pure and fresh TH True Milk, even amidst fierce competition from over 500 brands in the industry.
The fresh milk segment has garnered significant interest from consumers, making it a key target market for TH, which offers clean, delicious, and safe fresh milk For over a decade, TH has worked diligently to establish itself as Vietnam's leading fresh milk producer, embodying the ethos of being "Completely from nature." By continuously expanding its product ecosystem, TH is at the forefront of healthy beverages, providing all-natural products that are low in sugar or free from added sugars This commitment aligns with evolving consumer habits towards healthier choices, ultimately enhancing both mental and physical well-being TH recognizes that broadening its product portfolio is essential for reaching every household and customer, solidifying its presence in the dairy market.
❖ TH True Milk Pasteurized Fresh Milk
❖ TH True Milk UHT Fresh Milk
• UHT Fresh Milk - Less Sugar
• TH True Milk A2 UHT Fresh Milk – Pure
❖ Formula Fresh Milk TH TOPKID
• TOPKID Organic fresh milk with natural vanilla
• Besides focusing on the dairy market, TH also expands its product portfolio such as nut milk, yogurt, ice cream, butter, drinks, etc
TH, which stands for "True Happiness," represents TH True Milk, a brand dedicated to providing clean and pure milk sourced from green pastures and advanced technology at TH farm The brand aims to deliver genuine feelings to consumers through its natural product line, ensuring the preservation of the essence in every drop of milk With its meaningful mission and memorable name, TH True Milk is gradually establishing itself as a leader in the industry, highlighting the exceptional qualities of its products.
“happy milk brand in the hearts of the public ”
TH True Milk utilizes Tetra Pak, the leading global supplier of UHT packaging, alongside Combibloc packaging from Germany to cater to rising consumer demand Both packaging types are produced using the latest advanced technology, ensuring they meet high standards despite some differences in design.
• Sizes: 110ml, 180ml, 450ml, 500ml, 1L
• The top of the box: product shelf life
• Box body: user manual, product information
• Appearance: main tone is blue, simple image (sky)
In order to ensure the source of packaging for the dairy factory to meet the large consumption of consumers, TH simultaneously uses these two suppliers
The products packaged in these two formats are nearly identical in terms of branding, informational content, pricing, packaging quality for milk preservation, actual volume, and overall product quality, all of which meet the standards set by TH and are approved by regulatory agencies The only noticeable difference lies in their appearance, attributed to the distinct production machinery used by the two suppliers.
The Combibloc box may appear shorter and wider than the Tetra Pak box, but both have the same internal volume Notably, the back seam of Tetra Pak packaging is centrally located, whereas the Combibloc carton features a seam positioned at the edge.
The suction cup placements differ between the two packaging types, Tetra Pak and Combibloc Additionally, the milk box prominently displays the manufacturer's logo, serving as a clear identifier to distinguish between these two packaging styles.
TH True Milk is dedicated to providing Vietnamese consumers with clean, delicious, and nutritious fresh milk products, emphasizing quality assurance as a key aspect of its production and development As the only brand in Vietnam with a closed production process from "green grass to clean milk," TH Milk Food Joint Stock Company has established a comprehensive system that oversees the entire journey from raw material production to processing and delivery to consumers.
TH TRUE MILK'S MILK PRODUCTION PROCESS
Cow breed: The cows are imported from New Zealand, USA, Australia, Canada to ensure the best milk
TH ensures optimal nutrition for dairy cows through complete autonomy in sourcing feed ingredients such as corn, American sorghum, and Mombasa grass Utilizing advanced software, TH formulates tailored blends for each group of cows, guaranteeing a balanced diet that supports their health and productivity.
• Water source: The cows drink clean water treated with Amiad technology to ensure clean and pure water for the cows
The world's most advanced farm and barn utilize Israeli management technology for optimal herd management Each cow is equipped with a tag and electronic chip in its leg, allowing for real-time monitoring of health status, nutrition, and milk production This innovative system simplifies data collection and management, ensuring efficient farm operations.
• Health care: Veterinary center and international standard laboratory are ready to diagnose, research, prevent and treat cows
• Milking: The fully automatic milking system is controlled under strict procedures to ensure the best hygiene and safety
Clean, fresh milk is efficiently transported through a cold pipe system to the main tank at the farm, where it is then transferred to a cold tank maintained at a temperature of 2-4 degrees Celsius TH Clean Fresh Milk Factory utilizes state-of-the-art technology, making it one of the most advanced facilities globally The factory's products adhere to ISO 22000 standards, ensuring the highest levels of food safety and hygiene.
TH True Milk's commitment to a chain-based production process, from clean pastures and farms to fresh milk cups, has quickly garnered consumer trust Mr Yu Hoan Chun, the general director of Wuxi Jinqiao, expressed confidence in TH's high-tech, closed production process after visiting their farms in Nghia Dan, Nghe An, believing that TH's products will appeal to Chinese consumers “I have tried the product,” he noted, highlighting its quality.
TH products match the quality of European and American goods available in the Chinese market, according to assessments This quality assurance extends beyond just Wuxi Jinqiao.
International Food City, the General Administration of Customs of China also inspected
TH True Milk's farm in Nghe An, allowing TH Dairy Joint Stock Company to become the first Vietnamese exporter of fresh milk to China Country
TH True Milk, a source of pride for the Vietnamese people, has garnered numerous domestic and international awards, reinforcing consumer trust Notably, it received the Bronze "Product of the Year" for TH True Milk Pasteurized Milk at the 2019 Stevie Awards.
Vietnam National Brand Award 2020, National Quality Gold Award at the national quality award ceremony and Asia-Pacific International Quality Award 2020
Over 10 years of launching, TH has achieved certain successes TH True Milk is mentioned with pride by Vietnamese people - is the milk brand with the most modern cow farm in Southeast Asia, with a turnover of more than 1 billion USD, is a clean “ milk” brand in the Vietnamese market With continuous innovation efforts and dedication to improving the quality of life of Vietnamese people, product lines are always improved in quality as an answer to the beliefs and expectations of customers products into a Vietnamese dairy brand Besides, TH is also constantly diversifying product categories to reach more customer segments in the future TH True Milk's clean fresh milk products have been warmly received by consumers and highly appreciated by experts With these good signs,
TH is gradually becoming one of the leading suppliers of fresh milk in the country.
TH TRUE MILK'S PRICE STRATEGY
In today's society, the demand for health-conscious products continues to rise, leading to a significant focus on nutritional offerings, particularly fresh milk, which has become essential for families Price remains a critical factor influencing consumer choices in this competitive market Despite entering the industry after major players like Vinamilk and Dutch Lady, TH True Milk has successfully implemented a unique skimming price strategy, allowing it to establish a strong and widespread presence in the market.
TH True Milk is committed to delivering "clean milk" through genuine actions that add real value to its fresh milk product line Most importantly, TH has played a pivotal role in transforming Vietnamese consumers' perceptions, emphasizing that drinking milk is not a luxury but a vital means to safeguard their health and enhance their happiness.
From its market launch, TH strategically positioned its brand as a premium product line, opting for higher price points to guarantee quality This approach effectively resonated with consumers, reinforcing the adage, "You get what you pay for."
TH True Mart chain stores offer TH True Milk products at consumer-friendly prices set by the company The range of fresh milk products available is diverse, catering to various preferences and budgets.
• UTH fresh milk TH True Milk: 33.000 VND/ pack of 4 boxes of 180ml
• TH True Milk UTH fresh milk with flavours: 33.000 VND/ pack of 4 boxes of 180ml
• Natural UTH fresh milk TH True Milk HILO: 35.000 VND/ pack of 4 boxes of 180ml
• Pure UTH fresh milk TH True Milk A2: 21.000 VND/ box of 500ml
• Organic fresh milk TH True Milk Organic: 31.000 VND/ box 500ml
• Pure pasteurized fresh milk TH True Milk: 36.000 VND/ box of 950ml
• UTH fresh milk TH True Milk TH True Milk TOPKID organic: 50.000 VND/ pack of 4 boxes of 180ml
TH True Mart stores and the e-commerce platform of TH True Milk typically offer higher prices compared to supermarkets and retail outlets For instance, a set of four 180ml boxes of TH True Milk is priced at 33,000 VND at TH True Mart, whereas similar products are available for 32,500 VND at Bach Hoa Xanh and 31,900 VND at other supermarkets.
To protect the interests of TH True Mart chain stores and e-commerce platforms, TH permits these channels to offer products at higher prices compared to other retailers and supermarkets Each sales channel has its unique characteristics; for instance, consumer stores and supermarkets frequently run short-term promotions and provide gifts to attract customers and boost demand As a result, prices in these outlets may be lower, allowing customers to purchase products at more favorable rates than when buying directly from TH True Mart stores.
TH True Milk's pricing strategy serves as a key lesson in market penetration, especially as a newcomer in a competitive landscape dominated by established brands like Vinamilk and Dutch Lady Despite facing significant challenges from these experienced players in Vietnam's dairy market, TH True Milk has consistently differentiated itself by implementing unique strategies from the outset.
As socio-economic development progresses and per capita income rises, individuals are experiencing an improved standard of living, leading to increased health awareness for themselves and their families Consequently, the consumption of nutritional products like fresh milk has transitioned from a luxury to an essential habit Recognizing this shift, TH has implemented a skimming price strategy to establish its "clean milk" brand, which is characterized by authentic stories and a transparent production process that resonates with consumers' perceptions of price versus quality By positioning itself as a premium product line, TH successfully markets its offerings at higher prices compared to competitors such as Vinamilk and Moc Chau Milk.
According to the general psychology of customers, the selling price of products The higher it is, the more secure the product will be
TH True Milk targets female consumers aged 15 to 35, particularly those between 25 and 35 living in dynamic urban areas who prioritize health and family This demographic typically consists of middle to higher-income individuals seeking premium, safe, and high-quality milk By focusing on this strategy, TH True Milk not only aims to ensure profitability but also to build consumer trust through the perception of a high-priced product synonymous with quality This approach helps establish a strong brand reputation and positions TH True Milk as a leading high-cost option in the Vietnamese dairy market from the outset.
TH True Milk effectively employs a skimming strategy during the early stages of product launch, ensuring it is not overused This approach has successfully expanded its customer base by targeting lower-income segments, aiming to become a preferred milk brand for a diverse audience, including children, adults, the elderly, and those on diets This strategy reflects a long-term, calculated move by TH's marketing mix strategists.
TH True Milk's competitive advantage lies in its expertise in utilizing natural ingredients With model dairy farms ensuring a consistent supply, the company employs modern technology in its production process to deliver high-quality, nutritious milk This approach minimizes reliance on external raw material prices and reduces the need for imports, reinforcing the brand's commitment to quality and sustainability.
TH True Milk not only imports but also exports its nutritious "clean milk" to various markets As a result, the pricing of TH True Milk products will be adjusted in response to increases in the general milk market, leading to more stable prices This stability allows consumers to make safer choices when selecting dairy products.
DISTRIBUTION STRATEGY OF TH TRUE MILK
The establishment and development of the brand of clean fresh milk TH True Milk from the end of 2010 until now has created a phenomenon in the dairy industry in Vietnam
Although coming later and facing many “big brands in the dairy industry such as ” Vinamilk, Dutch Lady, However, TH still asserted its position and brand
TH believes that product consumption is crucial for business success, with the primary aim of maximizing sales to generate profit Consequently, TH has developed a comprehensive nationwide distribution network that utilizes two main distribution channels.
• Traditional channel: grocery stores, retail outlets, etc
• Modern channel: TH True mart stores, large supermarkets, etc
In addition, TH Group has effectively developed an online shopping deliver by using traditional and modern channels By April 2021, there were 291 TH True Mart locations throughout Vietnam
TH True Milk has strategically developed its distribution channels to deliver products and services to customers through various methods Each level of the distribution channel acts as a marketing intermediary, facilitating the process of bringing products and their ownership closer to the end user.
TH Group has established itself as a self-distributing manufacturer, allowing the company to proactively manage its distribution without relying on intermediaries As the sole member in this distribution channel, TH sells its products directly to consumers, enhancing its market presence and customer engagement.
The primary objective of establishing TH true mart stores is to enhance TH's brand image among consumers, effectively serving as an expansive showroom that showcases the journey of products "from the meadow to the glass of milk."
Second, this is a channel to introduce products and sell directly to consumers
The third goal of this chain is to become a modern chain of distribution stores, specialize in providing the cleanest, safest, freshest and most nutritious foods
Home Delivery service embodies the philosophy of "bringing the essence of nature to every home" by streamlining the transportation and distribution process This service aims to minimize intermediate steps, ensuring that consumers receive fresh and pure products quickly and conveniently, while preserving their natural qualities.
Once a customer places an order online, our team will promptly confirm the order through email or a phone call We ensure timely delivery by selecting the closest distribution center or TH True Mart store, with all orders reaching customers within 48 hours.
In Vietnam, home milk delivery is primarily offered by a limited number of small units and farms TH stands out as the first major enterprise aiming to streamline the process by delivering milk directly to consumers, thereby eliminating intermediaries.
TH True Milk utilizes a modern distribution channel to ensure that its fresh milk products reach consumers nationwide In addition to production and supply, TH True Milk partners with retailers, supermarkets, and grocery stores to sell dairy products directly to consumers Their products can be found in major supermarkets like Big C, Coopmart, and Metro Pricing is determined by TH Group, with agreed-upon terms for booth rental costs and profit sharing between the parties involved.
TH True Milk utilizes the Key Account channel for customer distribution, a strategy also employed by its main competitor, Vinamilk This approach intensifies the competition between the two leading dairy companies in the market.
As a traditional distribution channel but operating very effectively, most businesses apply
TH Group in addition to distributing TH True mart stores to become the company's main and most important distribution channel, but TH True Milk Consumer Retailers
TH True Milk Wholesaler Retailer Consumer
(supermarkets, retail stores, and groceries) TH True milk has always focused on traditional channels because it is still very effective in the current business context
Products will be distributed to retailers (grocery stores, markets, etc) through agents or wholesale intermediaries (Thinh Phat Joint Stock Company, Quang Vinh Phat, etc) and sold directly to consumers
4.3.2 Choosing members of the distribution system
TH True Milk aims to distinguish itself in the Vietnamese market by enhancing its product image and expanding its sales and distribution network The company has partnered with major supermarkets like BigC and Metro, while also supplying retail and grocery stores A significant innovation in their distribution strategy is the direct delivery of products to consumers through TH True Mart showrooms, eliminating intermediaries This new coordination policy has contributed to the initial success of the business.
To become a channel member, it is necessary to meet three requirements of the company:
To effectively distribute products, retail points must be adequately scaled, ensuring they are spacious and strategically located TH True Mart showrooms exemplify this by providing large, airy spaces that attract customers and facilitate the proper preservation of milk.
• Product line: agents and retailers can sell many different products but must display
TH True Milk's products in a conspicuous and attractive place, TH true marts can absolutely only sell TH True Milk products belonging to the company TH milk company
• Attitude: Standing on the basis of 5 solid core values: “For community health”,
Our products are entirely natural, offering freshness, deliciousness, and nutrition while being environmentally friendly We prioritize innovative thinking that harmonizes interests, ensuring that consumer satisfaction is at the forefront of our activities By delivering high-quality products and exceptional service, we build trust and loyalty among our customers, ultimately enhancing their overall experience and benefits.
4.3.3 Managing and motivating members of distribution system
TH True Milk has implemented comprehensive training strategies for distributors and agents, ensuring employees are well-informed about product features and service standards to achieve business objectives Sales staff are assigned specific areas, with set goals and ongoing monitoring to drive market development and meet annual targets A key focus is on enhancing sales skills among retail employees, fostering a team of experienced professionals aimed at increasing sales and profitability Distributors, agents, and retailers receive complete information and management support regarding product pricing as per commitments.
Creating a long-term cooperative relationship, on the basis of win-win, commit to cooperation and share goals for the benefit and respect for the interests of both parties
Committed to regularly sharing information, maximum protection, and timely support for agents against competition and market fluctuations
To enhance profitability and foster a positive working environment, the company actively incentivizes channel members through competitive discounts and welfare initiatives By continually improving operational capacity and promoting a friendly, professional atmosphere, employees are empowered to recognize their vital role within a cohesive and robust corporation.
TH has established a robust nationwide distribution network comparable to industry leaders like Vinamilk and Moc Chau To effectively reach customers and enhance market competition, TH employs a comprehensive distribution system that includes supermarkets, agents, and retail outlets in residential areas, significantly aiding consumer recognition and familiarity with their products Additionally, the TH True Mart showroom system facilitates direct engagement between TH's products and customers, enabling TH True Milk's clean fresh milk brand to swiftly gain consumer trust and preference This demonstrates that despite entering the market later, TH has successfully built a strong brand image and customer loyalty through a strategic and innovative distribution approach.
4.3.5 TH True Milk's supply chain
• Supplier: TH builds a closed system of livestock farms to serve for own milk processing factory
TH TRUE MILK'S PROMOTION STRATEGY
TH True Milk effectively engages its consumers through innovative logos, memorable slogans, and distinctive advertisements, rapidly establishing a strong brand identity Since its market launch, TH True Milk has successfully positioned itself as a "clean milk" brand with the tagline "TH True Milk - Truly natural," complemented by the iconic "TH True Milk Song" by Thai Huong By employing the Preemptive Claim strategy, TH has firmly established itself in consumers' minds as synonymous with "clean milk," a standard so widely accepted that it has become a prerequisite for all milk companies.
The recent decision sparked significant public reaction, amplifying TH's brand presence without any financial investment By effectively leveraging the strategy of "perceived quality," TH has enhanced its brand recognition, demonstrating its leadership in the fresh milk market When consumers think of "clean milk," TH is now the first name that comes to mind.
Obviously, TH's communication activities in general and advertising in particular try to convey the message “The essence of nature is preserved in every drop of clean fresh milk”
TH True Milk employs a transparent and modern approach to its branding, utilizing various strategies to capture consumer attention Key advertising activities highlighted by Camnest (2019) emphasize the company's commitment to delivering a clean and quintessential message to its audience.
TH is enhancing its reach by broadcasting TV commercials about its modern clean milk production process on national channels like VTV1, VTV3, VTV6, HTV7, and SCTV2 While VTV channels are well-known in Northern regions, HTV7 resonates with Southern audiences This strategy demonstrates TH's commitment to not only cater to higher-income customers but also to engage middle-income consumers, broadening its market presence.
Helping to open the way to solve TH's market share problem in the market when facing constant pressure from big players in the same industry
• Newspaper pages: Women, Youth, Entrepreneurs Saigon, New Hanoi, etc TH targets women and entrepreneurs, these will be newspapers that can attract them by the appropriate and scientific
• In addition, TH also uses outdoor billboards, banners, buses, etc to create familiarity and preserve brand image to its consumers
TH demonstrates its commitment to consumers by being the first dairy brand to launch a network of TH Truemart Showrooms Currently, there are 297 TH Truemart locations across the country, providing customers with access to products and a unique shopping experience.
TH is dedicated to delivering high-quality, natural products while pioneering an advanced, synchronized customer care system This modern approach features multi-channel interactions, including email, hotlines, and social networks, ensuring professional support for all customers.
• Chain of stores TH truemart
Customers can directly reach out to TH for exchanges, feedback, complaints, or inquiries, and the dedicated staff is committed to providing prompt and satisfactory responses All customer requests are handled swiftly and respectfully by the customer support center, in strict adherence to the ISO 9001:2015 standard set by Bureau Veritas This approach enables TH to gather valuable feedback and foster long-term relationships with its target consumers.
TH's success in direct marketing is increasingly evident through consecutive awards:
In 2018, the company achieved a Bronze award for "Excellent Customer Service of the Year," followed by a Silver trophy in 2019 for "Excellent Customer Care Department of the Year" at the prestigious International Business Awards (IBA Stevie Awards) (Huy Hoang, 2019).
The dairy industry is one of the fiercest races in sales promotion because it stimulates the sales force and stimulates demand in customers by reducing product prices very effectively
Sales promotions in today's businesses often fall short of their intended effectiveness due to the fast-paced nature of the market, resulting in a lack of synchronization and planning This disorganization can lead to budget waste, turning sales promotions into a liability for many companies Despite these drawbacks, it is evident that brands continue to engage in promotional cycles, highlighting the pervasive reliance on sales strategies in the industry.
TH True Milk actively participates in the competitive market by implementing various promotional strategies, including in-store trials, gift giveaways, and combo offers that allow customers to receive additional products of the same type.
• Recently, TH has continuously maintained a promotion of buy 8 get 1 free
From April 1, 2021, to May 31, 2021, customers who purchase any combination of eight products, including 100g Eating Yogurt, Live Yeast Yogurt 100g, 60g TOPKID Eating Yogurt, 100ml Live Yeast Drinking Yogurt, 90ml TOPKID Cheese Drink Yogurt, or 180ml Pasteurized Drinking Yogurt, will receive one additional product of the same type for free.
12 get 1 free when buying any 12 boxes of TH True Milk 180ml Sterilized Fresh Milk, get 01 product of the same type immediately
TH is launching a free trial program for its new TOPKID formula milk in four major cities: Ho Chi Minh, Hanoi, Da Nang, and Can Tho In addition, they are introducing a gift program for children that encourages the collection of TOPKID Cards, promoting the theme "Happy Learning Children."
TH TOPKID 3D wooden picture gift sets, 3D jigsaw sets, etc
TH True Milk is promoting a sustainable initiative by offering canvas bags in exchange for TH True Milk Organic boxes This program aims to encourage a green lifestyle among Vietnamese consumers by reducing plastic bag usage and emphasizing the importance of recycling Each returned box will be repurposed into environmentally friendly products, highlighting TH's commitment to environmental and social responsibility.
TH recognizes the significance of personal selling for its business success, leading the dairy industry with the establishment of TH True Mart Showroom stores across the nation Additionally, the company has formed its own home delivery team to guarantee quality service for consumers.
At TH, every employee undergoes comprehensive training aligned with modern standards, enabling them to effectively gather and analyze customer information during sales activities Utilizing TH's commercial database, staff identify potential customers and engage with them at direct selling points, ensuring they understand consumer needs This approach allows TH to develop products that meet customer expectations and drive sales Particularly at TH Truemart showrooms, the sales team plays a crucial role in maximizing revenue and nurturing relationships with prospective clients With a dynamic and enthusiastic workforce and a diverse product range, TH proudly stands as a leader in the dairy industry, consistently fulfilling consumer demands in the market.
OFFER
The dairy industry is facing intensified competition, particularly with the influx of foreign brands, making it increasingly challenging for local companies like TH to maintain a competitive edge To address this, businesses are focusing on conducting thorough market research and diversifying their product offerings to better meet the evolving preferences and tastes of consumers.
TH True Milk focuses on product diversification by expanding its product categories, which serves as an effective economic strategy that leverages existing technology without requiring significant new investments However, this diversification must be complemented by continuous improvements in product quality Therefore, TH Group should prioritize key areas to enhance both product offerings and overall customer satisfaction.
• Research and add dairy products and dairy products with new flavors so that customers have more choices
Designing packaging and straws in unique shapes and vibrant colors is essential for children's milk products Regularly updating the design and incorporating appealing images that align with children's preferences will significantly enhance consumer attraction, particularly among young audiences.
• Diversify product designs, reduce weight so that the price is suitable for consumers’ income and increase the scale of consumption
With the strength of its product quality, TH needs to maintain and strictly follow the product quality inspection according to standards, absolutely comply with food hygiene and safety
Maintain and repair machinery and equipment on time, with adequate replacement materials for stability and operational productivity
Overcoming weaknesses in production processes when there is a new change in raw materials, technology and products Completing operation, handling in the processes of
To ensure quality control, implement a standard procedure for inspecting and managing mold-contaminated products, as well as items contaminated with foreign objects Regularly monitor the system through periodic ISO evaluations and address any identified issues by establishing preventive measures.
TH should enhance its sales promotion efforts by leveraging effective tools in its marketing strategy, including public relations and advertising Additionally, it is essential to utilize various media platforms for advertising The ads must feature straightforward and memorable content aimed at raising brand awareness and reinforcing the product image in consumers' minds This approach will broaden brand visibility and capture consumer interest.
To enhance channel distribution diversity, TH should prioritize strengthening control over its channels to achieve a unified goal through strategic cooperation and mutual development with agencies Additionally, implementing more effective solutions to engage customers will facilitate better information collection regarding their needs This approach will enable TH to create the most suitable construction and development policies for its distribution network.
• The TH true mart chain of stores is a bright spot that need to be exploited by TH Group
• Customers can have complete confidence when buying products directly from this
• Therefore, TH needs to open more genuine distribution stores so that customers all over the country can easily access its products
Providing products to distributors is an effective business strategy, yet it poses significant management challenges There is a risk of agents, supermarkets, and grocery stores selling counterfeit or expired milk, which can be relabeled with new dates for consumer sale To mitigate these risks, TH must establish contracts exclusively with trusted distributors and implement stringent controls over the goods supplied Additionally, it is essential to ensure that products are stored according to standards to prevent damage Furthermore, TH must take decisive action against suppliers of counterfeit and substandard goods to protect its brand reputation and image.
In recent years, there has been a growing trend in Vietnam towards the use of natural origin cosmetics, reflecting a shift in consumer preferences This movement emphasizes the demand for products that are environmentally friendly and derived from natural ingredients As consumers become more health-conscious, they are increasingly seeking beauty products that not only enhance their appearance but also promote overall well-being This shift in the market indicates a significant opportunity for brands that focus on sustainability and natural sourcing in their cosmetic offerings.
TH Group, a prominent player in the dairy industry, introduced its new product line, TH True MILK HILO, to cater to the growing demand for healthy and nutritious milk options This innovative product aims to meet the needs of health-conscious consumers by offering a low-fat milk alternative that retains essential nutrients The launch reflects TH Group's commitment to enhancing the quality of dairy products in Vietnam and promoting a healthier lifestyle among its customers The strategic move also positions TH True MILK HILO as a competitive choice in the expanding dairy market.
Chu the dong thuong hieu Bac A Bank – TH truemart nhan nhieu tien ich (2021, April 23)
TH true MILK Retrieved from https://www.thmilk.vn/chu-the-dong-thuong-hieu-bac-a-bank- -truemart-nhan-nhieu-th tien ich/-
Danh sach Ho so san pham TH true MILK Retrieved from https://www.thmilk.vn/cong-bo-san-pham/
Diem Huyen (2020) discusses how TH true MILK offers quality that rivals European and American milk products in her article published in Khoa hoc va doi song Newspaper The piece emphasizes the brand's commitment to high standards and its competitive position in the global dairy market For more insights, visit the full article at Khoa hoc va doi song.
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Khanh Khiem (2021) Chien luoc Marketing cua TH True Milk vuot mat ke thong tri
In 2020, Le Son reported on the Vice Prime Minister's visit to the Kim Lien historical site and the TH Group The article highlights the significance of this visit in promoting cultural heritage and supporting local development initiatives The event underscores the government's commitment to preserving historical landmarks while fostering collaboration with private enterprises for sustainable growth For further details, the full article can be accessed on Chinh Phu News.
Minh Anh (2021) Ai dang dung dau thi phan nganh sua Nhip cau dau tu Newspaper
Retrieved from https://m.nhipcaudautu.vn/kinh-doanh/ai-dang-dung-dau-thi-phan-nganh-sua-3339241/
M.Chung (2021) Nganh sua nam 2021 se tang truong theo kich ban nao VnEconomy Magazine Retrieved from https://vneconomy.vn/nganh-sua-nam-2021-se-tang-truong-theo-kich-ban-nao.htm
Ngoc Han (2017) TH true MILK khang dinh vi the sua sach chat luong vang Viet Nam
Giao duc Newspaper Retrieved from https://giaoduc.net.vn/suc-khoe-hoc-duong/th-true milk- -khang-dinh-vi-the-sua-sach-chat- luong-vang-viet-nam-post182601.gd
Phan Thao (2019) Thi truong sua Viet Nam canh tranh ngay cang lon Nguoi chan nuoi
Newspaper Retrieved from http://nguoichannuoi.vn/thi-truong-sua-viet-nam-canh-tranh-ngay-cang-lon-nd5196.html
Phong Le (2016) TH true MILK- chia se niem hanh phuc lam ly sua tot nhat Vietnamnet
News Retrieved from https://m.infonet.vietnamnet.vn/khoe-dep/suc-khoe/th-true-milk-chia- -niem-hanh-phuc-se lam ly- -sua-tot-nhat-170692.html
Phong Nguyen (2021) Tich cuc tin hieu ve muc tang truong tin hieu tren 6,5% GDP nam
2021 Lao dong Newspaper Retrieved from https://laodong.vn/kinh-te/tin-hieu-tich-cuc-ve-kha-nang-dat-muc-tang-truong-tren-65- gdp-nam-2021-920079.ldo
The TH Group was awarded the "Outstanding Customer Care of the Year" at the 2018 International Business Awards This recognition highlights the company's commitment to exceptional customer service and its significant impact on the industry The award ceremony took place on August 23, 2018, and was reported by Lao Dong Newspaper For more details, visit their website.
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Dự án nuôi bò sữa công nghệ cao tại Kon Tum, với tổng vốn đầu tư 2.544 tỷ đồng, đã chính thức khởi công, đánh dấu đây là dự án lớn nhất tại Tây Nguyên Sự kiện này hứa hẹn sẽ góp phần quan trọng vào sự phát triển kinh tế địa phương và nâng cao chất lượng sản phẩm nông nghiệp.