EXECUTIVE SUMMARY
The reason we selected moc chau milk for our research
We chose Moc Chau Milk for our research for two key reasons: first, we believe in promoting local Vietnamese milk over imported options, and second, Moc Chau Milk's quality is upheld through the company's dedicated efforts and support from reputable institutions Despite a general trend among Vietnamese consumers favoring imported milk due to concerns about local quality, Moc Chau Milk stands out as a well-maintained product, already pasteurized for safe consumption.
COMPANY’S OVERVIEW
Introduction
Moc Chau Milk (MCM), officially known as Moc Chau Dairy Cattle Breeding Joint Stock Company, is a leading and historic dairy brand in Northern and Central Vietnam As a subsidiary indirectly owned by Vinamilk via GTNFoods Joint Stock Company, MCM specializes in the supply, processing, and manufacturing of various dairy products, with a primary focus on milk and yogurt.
Moc Chau Milk, established on January 8, 1958, originally as Moc Chau Military Farm, pioneered the dairy industry in Vietnam by raising dairy cows and producing high-quality dairy products The company operates two state-of-the-art pasteurization and sterilization factories equipped with advanced technology from Tetra Pak (Sweden) and Korea, ensuring nutrient-dense dairy offerings Leveraging the ideal climate and soil of the Moc Chau plateau, Moc Chau Milk manages over 27,138 dairy cows across 600 farming households and three dairy breed centers To maintain high standards, all dairy farms adhere to 73 strict VietGAP criteria for cattle raising, covering aspects like food, water management, and sanitation Before collection at 21 designated sites, milk undergoes preliminary testing by a specialized team based on ten quality criteria, followed by refrigeration to ensure freshness.
VietGAP: Vietnamese Good Agricultural Practices. transported immediately to factories, where it will be manufactured and packaged before being delivered to consumers across the country.
Vinamilk boasts a diverse product portfolio that includes fresh milk and a variety of value-added dairy products such as yogurt, milk cakes, butter, cheese, and milk scum Catering to different consumer needs, their offerings range from core dairy items like UHT and pasteurized fresh milk to specialized products for children and uses in bartending, baking, and desserts Moc Chau Milk ensures all products undergo stringent quality management processes in line with ISO and HACCP international standards, meeting the growing nutritional demands of consumers while upholding food safety and hygiene.
The Vietnamese dairy market is highly competitive, attracting significant interest and investment Moc Chau Milk currently holds over 2% of the national milk market share and 23% in the North, ranking behind Vinamilk and TH True Milk, as noted in the Company’s Annual Report 2021 Despite its modest market share compared to other brands, Moc Chau Milk maintains a strong presence with over 60,000 retail stores The Covid-19 pandemic has disrupted global supply chains, yet domestic demand for dairy products remains resilient, particularly for fresh milk and yogurt This demand has allowed some dairy companies, including Moc Chau Milk, to achieve positive revenue growth, with net revenue rising by 3.6% to VND 2,926 billion and profit after tax increasing by 13.7% to VND 319.1 billion in 2021 Chairwoman Mrs Mai Kieu Lien emphasized the company's commitment to enhancing its sustainable agricultural value chain, investing in high-tech dairy breeding, and modernizing milk processing to improve product quality and support the well-being of Vietnamese families Moc Chau Milk is also focused on strengthening its distribution system and adapting production plans to ensure a steady supply while pursuing both short- and long-term development strategies.
2 ISO: International Organization for Standardization.
HACCP: Hazard Analysis and Critical Control Point System.
Moc Chau Milk aims to lead the Vietnamese dairy market through a passionate commitment to the homeland, backed by significant investment and strategic planning, positioning itself as the most trusted and beloved dairy brand in Vietnam.
“Moc Chau Milk has been offering Vietnamese people with the most scrumptious, fresh, and high-quality products from the Moc Chau - Son La motherland By delivering the message
“Green grassland - Fresh cool milk” 4 , the Company is contributing to boost the quality of life of people, particularly children, both physically and emotionally.”
Connection - “Moc Chau Milk is proud to be a company that has a solid relationship with farmers, creating the highest value for their products.”
Innovation - “Constantly learning and embracing the quintessence of technology in order to retain the full delicious taste and nutritious quality in each product.”
Moc Chau Milk is built on a foundation of trust, relying on the dedication of its workforce, the confidence consumers have in its product quality, and the strong commitment of its partners and shareholders to the company's values.
Moc Chau Milk understands that true success lies in enhancing consumer value while prioritizing environmental and societal responsibility.
Over 64 years of establishment and development, Moc Chau Milk has faced challenges and continuously evolved, affirming its position as a leading Vietnamese dairy brand in the domestic market while enhancing its global competitiveness The company's vision, purpose, and core values converge to create a strong foundation, allowing Moc Chau Milk to make a positive impact on the community and pursue sustainable development.
Moc Chau Milk’s CEO: Mr Pham Hai Nam
Address: Moc Chau Farm Town, Moc Chau District, Son La Province
“Green grassland - Fresh cool milk”: “Thảo nguyên xanh - Sữa mát lành”.
Email: mocchaumilk@mcmilk.com.vn
Website: www.mcmilk.com.vn
Business Model Canvas
- Distributors, wholesalers, retailers, stores & supermarkets
- Tradition, creativity, innovation and modernity
- General trade: distributors, wholesalers and retailers
- Modern trade: supermarkets and convenience stores
- Online stores: Shopee, Lazada, Tiki, etc.
- “Cửa hàng sữa tươi Mộc Châu Milk” showroom system
- Customer service staff communicate with customers through mobile phones, social media, etc.
- They listen to all its customers' suggestions and complaints patiently
- They support to exchange and return products
- Moc Chau Milk conducts a number of programs/funds to assist underprivileged youngsters all around the country
- Sales of finished and merchandise goods
- Sales that are related to parties/stakeholders
- Raw materials developments (dairy farms, farmers, cows & milk)
- Process, manufacture, distribute and retail dairy products
- Develop new products to innovate and diversify product types
- Build farm systems integrated with advanced technologies and machinery
- Expand market and increase revenue and profit
- Promote R&D activities, develop organic foods and apply advanced biological technologies
Key Partners - Foreign partners who support the activities of exporting and importing
- European suppliers for advanced machinery & equipment system
- Utilities costs (electricity, water, heating, etc.)
- Cost of cow vaccination for the dairy farm system
- Cost of support, advertising & promotion
- Cost of product invention & development
CURRENT MARKETING SITUATION
Marketing Environment
Moc Chau Milk, led by the experienced Mrs Mai Kieu Lien as the Chairman of the Board of Directors, has demonstrated exceptional relationship-building and departmental coordination Since joining Vinamilk's governance in early 2020, the company has achieved remarkable growth and enhanced operational efficiency With a seasoned board of directors, Moc Chau Milk is well-positioned for continued growth and development in the industry.
Moc Chau Milk has developed a comprehensive supply chain by establishing a closed system of livestock farms, ensuring a steady supply for its processing factory The company has partnered with nearly 600 farmer households, providing modern breeding technology and a robust insurance fund that secures milk prices and livestock insurance, fostering confidence among farmers Additionally, Moc Chau Milk has invested hundreds of billions of VND in constructing Vietnam's first modern production plant, breeding center, and TMR animal feed factory This self-sufficiency in raw material production alleviates concerns about shortages and minimizes import costs.
Moc Chau Milk's distribution network includes various intermediaries such as distributors, wholesalers, retailers, supermarkets, dairy agents, and grocery stores Choosing the right marketing intermediaries is crucial for the company, as these distributors play a vital role in delivering products to consumers By effectively displaying Moc Chau Milk's products, these intermediaries enhance brand visibility and facilitate consumer access, ultimately driving sales growth Additionally, leveraging agents and retailers allows the company to significantly reduce costs associated with establishing its own sales showrooms.
Moc Chau Milk's PR activities are mostly associated with social activities, community development and programs associated with young children, typically with programs such as:
Miss Dairy, Moc Chau Milk: Accompanying the family in a new normal life with the slogan:
Moc Chau Milk embodies the essence of nature, delivering pure, fresh milk from lush green pastures Its advertising strategy prominently features TV commercials aired on popular channels such as VTV3, VTV1, VTV6, HTV7, and SCTV2, showcasing the meticulous production process that ensures the quality of every drop Through these efforts, Moc Chau Milk reinforces its commitment to providing clean, high-quality dairy products that resonate with health-conscious consumers.
When discussing customers and distributors, the primary challenge lies in pricing, as consumers can easily compare products within the same industry, exerting pressure on manufacturers The volume of buyers significantly influences both the revenue and brand image of Moc Chau Milk Customers perceive the company as a provider of natural, clean milk, making it appealing to health-conscious consumers.
As of December 31, 2021, the population of Vietnam is estimated at 98,564,407 people, an increase of 830,246 people compared to the population of 97,757,118 people the previous year.
In 2021, Vietnam experienced a positive natural population growth rate, with births outnumbering deaths by 912,801 individuals, although migration contributed to a population decline of 82,555 The country's sex ratio stood at 0.997, indicating 997 men for every 1,000 women, which is lower than the global average of approximately 1,017 males per 1,000 females Key statistics regarding Vietnam's population in 2021 highlight these demographic trends.
Scale of Vietnam's liquid Milk market in the period 2014-2018
In 2018, the liquid milk market, excluding other dairy products, generated revenue of VND 48.9 trillion, experiencing a steady growth rate of 10% Although the compound annual growth rate (CAGR) is expected to decline to approximately 7%, revenue is projected to reach VND 66 trillion by 2023 The market is predominantly skewed towards urban populations due to limited income sources and distribution conditions, impacting both sales and product variety However, the rapidly growing urban population presents significant opportunities for Moc Chau Milk, enabling increased product consumption and sales As urban living standards improve, dairy businesses can capitalize on this potential for growth in a promising market.
Vietnam has the highest demand for milk globally, driven by stable economic growth and a GDP per capita increase of 6-8% alongside a 1% average population growth However, domestic milk production only satisfies about 20% of this demand, leading most companies to import raw milk Despite high retail prices for milk in Vietnam, farmers receive low prices for raw milk, creating a challenging market dynamic The dairy sector is dominated by three major companies that control 75% of the market share, giving them leverage in price negotiations with farmers and the retail market In contrast, Moc Chau is self-sufficient in milk production, alleviating concerns over raw material supply.
Vietnam's stable political environment plays a crucial role in shaping Moc Chau Milk's marketing strategies Following the doi moi reforms, Vietnam established normalized relations with China in 1992 and the United States in 1995, while also becoming a member of the ASEAN bloc.
Since establishing diplomatic relations with 171 countries in 1995, Vietnam has experienced significant growth, particularly marked by its accession to the WTO as the 150th member on January 11, 2007 These developments have greatly influenced market expansion and investor attraction, leading to increased revenue that has facilitated the marketing strategies of Moc Chau Milk.
In Vietnam, consumers have a strong preference for sweet, canned, and milk-related products, facilitated by easy access to information through various media channels like radio, newspapers, and television This accessibility enhances the effectiveness of marketing, advertising, and product distribution Vietnamese consumers tend to prioritize brands that they trust for their quality and prestige, leading to brand loyalty and infrequent changes in purchasing habits Consequently, Moc Chau Milk's introduction of a natural milk brand is likely to be well-received by the market.
Moc Chau Milk serves as a vital technical training center, equipping nearly 600 local households with advanced scientific knowledge and technology for effective animal husbandry All participating farms adhere to VietGap standards, utilizing European breeding technologies, modern milking machines, and nutritionally balanced TMR feed, including American Alfalfa and fresh grass The company also implements an automatic waste treatment system that ensures environmental sustainability Furthermore, Moc Chau Milk has established a livestock insurance fund and milk price insurance, safeguarding farmers' interests and fostering their confidence in production.
Moc Chau Milk transfers scientific technology to farmers to apply in animal husbandry, making the milk production process more developed and more efficient than the company's raw material problem.
Moc Chau Milk has introduced a new pasteurization line and advanced technology, resulting in a diverse range of fresh milk products The current packaging options, including paper boxes, plastic bottles, and bags, are designed for user convenience.
Moc Chau Milk sources its raw milk from 27,138 purebred Holstein Friesian dairy cows, raised across three breeding centers and nearly 600 affiliated farms These cows, originating from Cuba, Canada, the USA, Australia, and Israel, contribute to the exceptional sweetness and quality of the milk produced.
With pasteurization technology at a temperature of 95 degrees Celsius in a short period of time, fresh milk is pasteurized while keeping vitamins and important nutrients.
Poured into high-grade preservation paper boxes by the multinational Evergreen
Packaging, Korea, Moc Chau Milk pasteurized fresh milk can now be used for up to 15 days at a temperature of 4-6 degrees Celsius. f Nature & environment
Vietnam's tropical and monsoonal climate presents both challenges and opportunities for the dairy industry, particularly for Moc Chau Milk The perishability and susceptibility of milk to quality degradation necessitate effective preservation strategies to ensure high-quality products However, the favorable climate also supports farming, providing a steady supply of raw materials for production If Moc Chau Milk can navigate these challenges effectively, it can reduce costs while maintaining milk quality, turning potential obstacles into advantages for growth.
Competitive Situations
There are 2 types of competitors, which are:
- Direct competitors: The industries that have been operating in the industry have a strong influence on the business situation of Moc Chau Milk enterprises.
Potential competitors in the market include companies that focus on producing substitute products like cereal flour and functional foods, such as IMC, DOMESCO, and BIBICA However, these competitors currently lack the strength to effectively rival the established milk products.
Moc Chau Milk Company is encountering intense competition from both domestic and international milk brands, including Vinamilk, TH True Milk, Dalat Milk, Dutch Lady, Nestlé, Abbott, and Meiji As the dairy market continues to grow, the competition is expected to intensify further.
Vietnam's dairy market features a diverse range of brands, with Vinamilk and Moc Chau leading the market by holding a combined share of 45% Dutch Lady follows with 24%, while imported powdered milk products, including Mead Johnson, Abbott, and Nestlé, account for 22% Additionally, domestic brands like Hanoimilk, TH True Milk, and Nutifood make up the remaining 19% of the market.
Below is the competitor analysis table of Moc Chau Milk We are divided into 3 groups: Vinamilk (big competitor), domestic dairy companies, and foreign dairy companies.
- The strongest, most long- - Lack of self-control in the standing and reputable brand. supply of raw materials.
Vinamilk - Unable to manage the quality of consumption culture. raw materials.
- Good customer care system, reasonable prices, diverse products.
- Understand people's - Products are not diversified.
Domestic dairy consumption culture - Lack of management companies (TH True - Modern production experience, not yet self- Milk, Dutch Lady, Ba technology, high product sufficient in raw materials.
Vi) quality - The distribution system is still
- Strong brand, big brand - Not understanding the new Foreign dairy channel. market well.
- Good product quality. companies (Nestlé, - The political and cultural
Abbott) barriers have not been
- All products must be imported.workers.
According to Mintel Group, the domestic dairy market is estimated at $4.4 billion and is being driven by three main trends: Brand credibility, Brand credibility, Healthy taste and Diversification seeking.
Recent trends indicate a growing concern among consumers regarding food health and safety, with 89% of Vietnamese willing to pay a premium for quality food, as reported by Nielsen Additionally, 88% of consumers meticulously examine dairy product packaging before making a purchase, while 80% express worries about the long-term effects of artificial ingredients in milk.
Moc Chau Milk leverages consumer psychology to consistently introduce innovative products made from pure fresh milk, ensuring a natural taste without preservatives Since 2018, the brand has expanded its offerings, launching various items including Pasteurized Banana Flavored Milk, Guava Drink Yogurt, Taro Yogurt, and Pasteurized Low-Sugar Milk.
Moc Chau Milk has achieved a 10% share of the overall dairy market, with an impressive 35% share in the Northern region The company is one of only three chosen to export fresh milk to China and has plans to expand into the Southern market, making fresh milk from the green prairies more accessible to consumers in that region.
Current STP Analysis
Moc Chau Milk targets four distinct age groups: infants aged 0-6 months, babies 6-12 months, toddlers 1-3 years, and children over 3 years Each demographic is offered specialized milk products tailored to specific needs, including options for individuals with unique nutritional requirements, pregnant women, and those managing health conditions like diabetes This market segmentation is strategically based on customer behavior, motivations, and usage needs.
Moc Chau Milk is dedicated to delivering high-quality, nutritious, and delicious products that cater to the health needs of consumers With a focus on children and teenagers, Moc Chau Milk recognizes the significant demand for dairy products among these age groups The brand strategically divides its target market into two primary customer segments to better serve their diverse needs.
Age: 0-6 months old, 6-12 months old, 1-3 years old and over 3 years old.
Occupation: All professions can be purchased and used.
Lifestyle: As consumers, who have the need to buy and use pasteurized milk products.
Economy: Anyone can afford to buy Moc Chau pasteurized milk products.
Customers seeking high-quality products with excellent nutritional value and reasonable pricing are likely to remain loyal if Moc Chau Milk's pasteurized milk meets their expectations.
This group comprises distributors, wholesale and retail agents, shops, and supermarkets eager to distribute Moc Chau pasteurized milk products They seek favorable discounts, sales bonuses, and prompt fulfillment of orders related to product distribution.
In the 1980s, Vietnam's dairy industry relied heavily on imported raw materials until Moc Chau Milk partnered with local farmers to establish a herd of thousands of cows With extensive expertise in dairy farming, Moc Chau Milk produces high-quality products made entirely from pure fresh milk, ensuring exceptional natural nutritional content Annually, the company delivers over 100,000 tons of fresh milk, promoting a "clean from meadow to table" approach and catering to consumers nationwide.
Pasteurized milk products must be consumed within 2-3 days after opening to maintain quality and taste Recognizing that not all customers can finish a 900ml box in this timeframe, Moc Chau Milk has introduced a 250ml pasteurized milk option, providing a significant competitive edge over other manufacturers This smaller carton caters to customers with lower daily milk consumption needs, making it an appealing choice for those seeking convenience.
Current Marketing Mix (4P)
The quality of each pasteurized fresh milk products (both sugar, less sugar or no sugar) must be required to conform these rules:
- Do not use genetically modified varieties.
- Many nutrients are preserved, especially antioxidants.
- Rigorous process b Stages of the product
In the introduction stage, Moc Chau Milk faced significant challenges as the first company to offer pasteurized milk, with consumers largely unaware of its benefits Initial product launches garnered limited attention, but after multiple efforts to educate the public, consumer awareness grew Ultimately, Moc Chau Milk successfully established a brand recognized for its nutritious and health-promoting pasteurized milk.
Moc Chau Milk continues to thrive in a competitive market by upholding its reputation for clean, high-quality milk and establishing itself as a leader in the pasteurized milk sector among consumers.
In the maturity stage of the dairy product industry, revenue growth persists but at a slower pace as the product reaches its peak quality Companies are now focused on implementing strategies to enhance market share, particularly for pasteurized milk, within the competitive landscape of the country's dairy sector.
The price of all finished products has to include the cost of using technologies and the production line For example:
- Scientific and technological factors not only ensure product development but also create advantages for enterprise development.
- Application of many advanced technologies.
- Meeting the demand for food quality and safety.
- Selling expenses account for the second largest proportion of milk prices. b On-demand pricing
- Demand for products has grown steadily.
- The tendency of Vietnamese consumers to choose the most expensive products possible also contributes to the increase in product prices.
- Must learn, analyze carefully about customers, product goals and customer acceptability. c Price leader
- Be careful about increasing product costs.
- Cut, optimize costs, restructure brands, control retail points well.
- Quickly capture consumer feedback, respond to market needs quickly and best. d New products pricing
- Policy of keeping the same price but the quality must be higher. e Pursuing basic goals
- Increase market share and lead in quality.
Moc Chau Milk has built a quite large distribution system extending into the North Central of Vietnam.
The Company currently sells its products through two main distribution channels:
- Morden channel: showrooms, supermarkets or convenience stores
- General channel: through intermediaries such as distributors, wholesalers, retailers
This retail system, which also involves other promotional activities, allows customers to easily access Moc Chau dairy goods whenever they have a need.
Moc Chau Milk applies attractive promotions to attract consumers such as buying 12 boxes get 1 box of the same capacity, or buying 2 packs get 1 box.
Moc Chau Milk effectively utilizes promotions to enhance product visibility and appeal, tapping into consumer psychology that favors attractive discounts and promotional offers.
SWOT ANALYSIS OF MOC CHAU MILK
Strengths
4.4.1 Strong and long-standing dairy brand
Moc Chau Milk is a renowned dairy brand in Vietnam, celebrated for its clean, delicious, and nutritious fresh milk products for over 60 years Ranked 4th among the country's top dairy companies, it has established itself as a symbol of purity and freshness, despite facing competition from larger firms like Vinamilk The brand has consistently been recognized by consumers as a high-quality Vietnamese product and was acknowledged by Kantar Worldpanel as one of the top 5 most preferred brands in 2018.
Moc Chau Milk has made significant contributions to the country's economy, earning recognition through prestigious awards such as the Labor Medal from the Party and Government Additionally, it has been named among the top 10 Sustainable Development Brands and High-Quality Products, as well as one of the top 10 Prestigious Food Companies in 2020 within the Dairy and Dairy Products sector, according to Vietnam Report.
Moc Chau Milk has established itself as a leader in Vietnam's dairy market by adhering to the principle of delivering "Clean from the meadow to the table." Trusted by millions of Vietnamese families for their nutritional needs, the company's success over six decades can be attributed to the exceptional quality of its products In the food and beverage industry, particularly for Moc Chau Milk, a commitment to quality is essential, as it directly impacts consumer health To ensure safety and quality, all raw fresh milk collected by Moc Chau Milk's expert team is grade A, maximizing its natural nutritional content Although its product range may not be as extensive as other major domestic dairy companies, Moc Chau Milk's popularity and strong market position reflect its outstanding quality, effectively meeting the fundamental needs of consumers.
Pasteurized milk products made from 100% pure fresh milk are rich in natural proteins, minerals, carbohydrates, and vitamins, while being free from impurities and preservatives These essential nutrients contribute to enhancing digestive health, boosting the immune system, and promoting strong bones and teeth Therefore, opting for Moc Chau Milk products, especially pasteurized fresh milk, supports overall health and vitality.
5 “Clean from the meadow to the table”: “Sạch từ đồng cỏ đến bàn ăn”
4.4.3 Raw and natural milk sources, and international standard farm system
Moc Chau Milk and its dairy farms have established quality standards for milk production, with all farms certified under VietGAP guidelines They prioritize high-quality livestock feed, avoiding chemical fertilizers and pesticides, while ensuring dairy cows are free from growth hormones and antibiotic residues The entire process, from growing grass and corn to caring for the cows, is meticulously monitored to guarantee safe production, harvesting, and processing This commitment not only enhances product quality but also promotes social welfare, protects the environment, and ensures traceability of product origins.
To ensure optimal freshness of raw milk, all collection points are located within 1km of the farms Additionally, milk production and packaging facilities are strategically situated close to these farms, enabling Moc Chau Milk to strengthen supplier relationships and guarantee that raw milk is transported directly to factories immediately after purchase, preserving its high quality and nutrient content.
4.4.4 Building relationships with raw material suppliers
Farmers play a crucial role as strategic partners for the Company, enabling the delivery of high-quality premium products to consumers The Company invests comprehensively in all stages of animal husbandry and production, fostering strong collaboration Moc Chau Milk enhances this partnership by offering technical training and transferring scientific technologies to farmers, ensuring they can utilize advanced methods in animal husbandry Continuous research and application of modern standards in animal husbandry are prioritized to guarantee the highest quality of raw milk materials.
Moc Chau Milk prioritizes smooth operations by providing financial assistance to farmers, ensuring their production security and sharing risks in unforeseen circumstances The company also hosts the Miss Dairy Cow Contest, fostering a platform for farmers to exchange husbandry experiences while receiving support from a dedicated team of animal husbandry experts This sustainable agriculture strategy, implemented over many years, guarantees high-quality input materials for the company and promotes a stable livelihood for farmers.
4.4.5 Investing in modern and advanced equipment and technologies
Moc Chau Milk operates two state-of-the-art dairy processing and packaging factories, utilizing advanced technologies imported from Switzerland and Korea This cutting-edge equipment guarantees that all products are fresh, flavorful, and safe, ensuring high hygiene standards for direct consumption by consumers.
Sweden's innovative Tetra Pak production lines ensure that pasteurized milk products are produced in a self-contained process, adhering to ISO 9001:2008 and HACCP 2008 standards Utilizing ESL (Extended Shelf Life) pasteurization technology, all harmful bacteria are eliminated while preserving beneficial bacteria for digestive health The pasteurized milk is then packaged in high-quality plastic bottles or paper cartons sourced from Korea's Evergreen Packaging Corporation, followed by cold storage and transportation to retailers To enhance the quality of raw milk, the company employs DeLaval automatic milking equipment that meets international safety and hygiene standards.
Weaknesses
4.4.1 The entire market share in Vietnam's dairy industry is still low
As of the end of 2021, Moc Chau Milk held a modest market share of only 2-3% in Vietnam's dairy industry, significantly lagging behind competitors like Vinamilk, which commands over 55%, and TH True Milk, which accounts for 45% This limited market presence can be attributed to various factors, including insufficient product coverage, low brand awareness, subpar customer experience, and ineffective promotional strategies.
Moc Chau Milk's marketing strategy for its dairy products lacks professionalism and consistency, as evidenced by the infrequent and low-profile nature of its advertising campaigns This approach has led to minimal media attention and suggests that the company may be utilizing ineffective advertising channels or promotional methods that fail to resonate with consumers, ultimately hindering the successful communication of its brand messages.
4.4.3 The distribution network is still limited
Moc Chau Milk boasts a vast distribution network with over 60,000 retail points nationwide, yet its showroom system and major distribution channels are primarily concentrated in Northern Vietnam This geographic limitation hampers user growth and complicates market share competition To sustain its position and enhance its development in the domestic dairy sector, Moc Chau Milk must focus on upgrading and expanding its distribution network.
Opportunities
4.4.1 Potential customers are consistently increasing with a great demand
Milk and dairy products are essential for most Vietnamese, with current per capita consumption at approximately 27 liters per person per year This figure is projected to rise by an additional 7-8% annually in the coming years, highlighting the growing demand for dairy in Vietnam.
Dairy products play a significant role not only as nutritional supplements but also in beauty and culinary applications Meanwhile, Vietnam is undergoing a demographic transformation, marked by rapid population growth, increased urbanization, rising education levels, and an expanding middle class.
Moc Chau Milk has gained significant opportunities and potential for growth in the dairy industry, enabling the company to boost its domestic market share while also expanding into both national and international markets.
4.4.2 Consumers are gradually paying more attention to their health
As Vietnam's economy continues to grow, health has emerged as the top priority for consumers, according to the 2020 Nielsen “Consumer Confidence Index” report The report reveals that 83% of Vietnamese consumers actively choose diets aimed at preventing health issues, surpassing the global average of 79% Furthermore, 89% of these consumers are willing to pay a premium for high-quality, healthy products and are increasingly attentive to product packaging, seeking information on ingredients and nutritional supplements.
Moc Chau Milk’s pasteurized fresh milk line is highly regarded for its exceptional nutritional value, earning the trust of millions of Vietnamese consumers over the years The growing confidence in nutritious products, coupled with the increasing demand in the healthy beverage and food market, underscores the positive outlook for Moc Chau Milk's continued development and success.
4.4.3 The dairy market remains to develop strongly and steadily
Since the onset of the Covid-19 pandemic, Vietnam's dairy market has experienced a slowdown in growth; however, domestic demand for dairy products remains stable due to their essential nature As a result, even during challenging economic times, dairy companies like Moc Chau Milk have continued to achieve significant growth and maintain strong revenue and profit levels.
Revenue is expected to reach 113,700 billion VND in 2020 and 119,300 billion VND in
2021 In particular, milk export turnover has surged in value to approximately $300 million/year in 2020 and 2021 According to the General Statistics Office, the country's liquid milk output in
2021 is estimated at more than 1,770 million liters, up 4.5% over the same period in 2020.
Despite challenges, Vietnam's dairy industry is sustainably evolving towards modernity during the country's economic recovery, enhancing its competitiveness for regional and global integration Trade promotion activities have resumed positively, indicating a promising outlook for the Vietnamese dairy sector in 2022, as it aims to meet the growing demands of society.
Threats
4.4.1 Many rivals in the dairy industry
Moc Chau Milk currently operates on a relatively small scale, facing intense competition from both domestic dairy companies and international brands The situation is exacerbated by the anticipated decrease in prices of imported dairy products due to newly effective trade agreements, placing additional pressure on local businesses In response, the Company is strategically investing in the establishment of a domestic fresh milk supply chain, including the development of a new high-tech dairy farm and a robust brand development strategy, aimed at strengthening its market position for both the short and long term.
4.4.2 The change of natural disaster and weather
Moc Chau, a region blessed by nature, boasts a temperate climate ideal for agricultural growth, especially in dairy farming However, the effects of climate change are increasingly challenging this landscape, leading to severe weather conditions that adversely affect both livestock and crops.
4.4.3 Risks of the product's quality
Dairy products are essential for promoting good health, making product quality a critical priority for companies committed to customer accountability To ensure the highest quality, firms like Moc Chau Milk utilize advanced production technologies and modern processes, alongside rigorous quality control measures With the achievement of the ISO 2000 Certificate for Food Safety Management System, Moc Chau Milk aims to minimize the risk of subpar product quality.
4.4.4 The cost of input materials has risen
Moc Chau Milk relies on fresh milk from its own dairy farms and purchases from local farmers, which exposes it to risks such as rising input costs due to economic fluctuations and inflation, particularly highlighted by the impacts of the Covid-19 pandemic Additionally, the increasing market demand may outpace the domestic supply of fresh milk, resulting in potential shortages To mitigate these risks, the company plans to invest in new dairy farms, assist farmers in enhancing their cattle development, improve milk yields, and implement cost control measures to reduce milk prices.
4.4.5 Vietnamese people have a mentality of utilizing imported milk products
Vietnamese consumers increasingly prefer imported milk, posing a significant challenge for local dairy industries, including Moc Chau Milk This preference stems from a belief that foreign products offer superior nutritional value and safety To address this issue, Moc Chau must enhance its brand promotion efforts, highlighting that its nutritional content is on par with renowned international brands.
4.4.6 Risks of changing consumption trends
In recent years, the popularity of plant-based milk has surged in Vietnam, with a 2019 Viracresearch survey revealing that 66% of Vietnamese consumers prefer products made from natural ingredients The Covid-19 pandemic has further heightened awareness of safe food and health, emphasizing the importance of immune system support As a result, soy milk and barley milk have emerged as top alternatives to cow's milk, celebrated for their high protein content and numerous health benefits, making plant-based milk the preferred choice for many.
After addressing essential needs, spending on fast-moving consumer goods (FMCG) among Vietnamese consumers has decreased, as they now prioritize higher-quality experiences like dining out and non-essential items to enhance their quality of life While urban milk demand seems saturated, rural consumption fluctuates significantly due to dependence on agricultural commodity prices, with disposable income levels directly influencing FMCG spending in these areas.
Hence, the Company must prepare mentally to flexibly respond, conduct market research methodically, and plan product diversification strategies in line with future consumer demands.
FMCG: Fast Moving Consumer Goods.
OBJECTIVES AND ISSUES
Common goals in one next year (from 6/2022 to 6/2023)
- Leading the Vietnamese clean F&B market.
- Creating a dairy brand that is recognized not only in the country but also around the world. b Market growth
Moc Chau milk aims to enhance and diversify its distribution network, focusing on expanding its market presence across all provinces and cities in Vietnam, especially in the Central and Southern regions This strategic initiative is designed to ensure that all Vietnamese people have access to high-quality and clean dairy products, reinforcing the brand's commitment to excellence in the dairy industry.
- Moc Chau Milk plans to become a powerful dairy company, which is the first choice of Vietnamese consumers for fresh and clean products.
- It also wants to be a nutritional brand with scientific reputation and trust for all
Vietnamese people through the strategy of researching and developing many product lines with optimal quality.
Ideas for marketing strategies for Moc Chau Milk pasteurized fresh milk products 28
1 Evaluation and product export strategy.
Moc Chau milk stands out with its attractive packaging, reflecting the brand's commitment to quality and innovation Recent efforts have focused on creating new and improved designs that enhance product appeal In a competitive domestic market, effective packaging design plays a crucial role in marketing strategies, as consumers increasingly prioritize product appearance Well-designed products not only capture attention but also resonate with customers, making them highly valued in the marketplace.
To cater to the growing consumer demand, it's essential to introduce a variety of flavors in milk products By incorporating options like chocolate and fruit flavors into pasteurized milk, we can enhance the sensory experience and make it more appealing for children, encouraging them to enjoy drinking milk.
2 Evaluate and recommend pricing strategies.
With the current milk price, Moc Chau milk has a cheaper price than other brands in the market of pasteurized milk products.
Moc Chau milk should strategically adopt higher pricing for its low-positioned products while maintaining the same price to enhance perceived value Additionally, implementing a tiered pricing strategy based on product lines will effectively target diverse consumer segments This includes launching flavored dairy products aimed at younger customers and offering low-sugar or no-sugar milk options to cater to health-conscious individuals seeking weight loss solutions.
3 Evaluate and recommend distribution strategy.
The company has a quite large distribution network, and cities with distributors who are dedicated and committed to developing the Moc Chau milk brand.
Moc Chau milk's distribution market remains primarily focused in the North, capitalizing on its significant potential The company has strategically positioned distributors across various provinces and cities nationwide, following a well-defined market map.
As Moc Chau Milk expands its presence in the North, it plans to penetrate the Central and South regions in the near future To enhance efficiency, the company should prioritize quality over quantity when selecting distribution channel members, establishing tailored evaluation criteria for recruitment.
4 Evaluate and propose promotion strategy.
Moc Chau milk has effectively utilized engaging advertising campaigns featuring the image of 100% dairy cows, resonating with consumers The consistent message of "100% pure fresh milk" instills a sense of safety and trust among its audience.
In today's digital age, the Internet plays a crucial role in consumer behavior, with many individuals turning to online searches for product information To complement traditional television advertising, Moc Chau milk should enhance its online presence through effective digital marketing strategies Implementing targeted online advertising methods will help Moc Chau milk reach a broader audience and engage potential customers more effectively.
+ Place banners to advertise products on Websites with a large number of visitors such as Dantri.vn, vnexpress.vn, etc.
+ The company's website mcmilk.com.vn also needs more information about the product, which is a place for customers to search for information about the product.
A viral marketing campaign leverages coded messages through engaging clips that captivate audiences, encouraging organic sharing across online platforms By utilizing social networks like YouTube and Facebook, these unique and intriguing content pieces effectively spread throughout the online community, enhancing brand visibility and engagement.
Moc Chau milk's PR activities are doing very well such as going to charity to help people during the current epidemic situation and many other charity activities.
Vinamilk should pay more attention to internal PR issues in the enterprise to build a strong and united Vinamilk collective.
Moc Chau currently has quite a few promotions for consumers.
Moc Chau Milk should create more programs with discounts, freebies, trials, and points. For example:
+ Exchange 10 used boxes for 1 new product, which is both a way to stimulate purchases, recycle as well as increase consumer sympathy with similar community education measures .
To boost sales, businesses can enhance discounts or bonuses for distributors, encouraging them to actively promote products Offering incentives like washing machines, televisions, and travel tickets can effectively stimulate purchases Additionally, upgrading dealer booths and stores ensures that products are prominently displayed, increasing brand visibility and recognition.
Implement a range of promotional activities aimed at consumers, focusing on effective methods for distributing promotional gifts and rewarding retail agents Leverage diverse tools, promotions, and coupons to enhance the purchasing experience.
MARKETING STRATEGIES IN NEAR FUTURE FOR PASTEURIZED
STP Analysis
The current customer segmentation in the STP Analysis of Chapter 3 reveals significant inadequacies, hindering Moc Chau Milk's ability to fully tap into its potential customer base and execute effective marketing strategies To optimize its marketing efforts and enhance revenue and profits in the coming year, Moc Chau Milk should refine its market segmentation into smaller, more manageable groups This approach will allow the company to tailor its products and services to meet the unique needs of each segment, thereby facilitating the successful implementation of targeted marketing strategies This report will provide a detailed customer segmentation specifically for pasteurized fresh milk products.
When it comes to Moc Chau Milk, there are two types of customers: consumers (individuals) and businesses (organizations).
To segment consumer markets, we should use different segmentation variables as the following table:
Region All over the country
Population density Urban, suburban and rural
Age Almost suitable for all ages
Generation Kids (from 2 years old and up: 2-4 years old, 5-14 years old),
Teengers (15-25 years old) and Adults (above 25 years old)Income Low to no income, low to high income
Social Class People from all classes of society (lower, middle, and upper)
Attitude Sensitive or insensitive with the price of products
- Kids who need a lot of nutrients to grow and develop
- Kids who are in puberty time, needing products that can provide them nutrients and energy to be more dynamic and stronger
- Teenagers: they concern more about health and appearance Lifestyle
- Adults: They concern about products to improve their physical and mental health, or products for their children based on nutritional values
- People who want to use pasteurized milk to prepare scrumptious food and drinks
- 100% pure fresh milk with full of nutrients, proteins, vitamins and minerals
- Promoting healthy bones and teeth
- Strengthening the immune system and reducing inflammation
- Recharging people’s batteries after a strenuous workout
Users status Non users, potential users, first-time users, regular users (depending on experiences or personal purposes)
Loyalty status Weak, medium, strong (depending on each kind of pasteurized milk products – sugar, less sugar or no sugar)
Moc Chau Milk primarily serves business customers, including distributors, wholesalers, retailers, and supermarkets, who are responsible for delivering its products to end consumers This B2B segment operates under specific commitments and contracts that outline terms such as selling prices, discounts, sales bonuses, commissions, and timely deliveries Additionally, organizations like schools, canteens, and bakeries that utilize Moc Chau Milk's pasteurized fresh milk in their food and beverage offerings also make up a significant portion of the customer base Due to the large quantities ordered by these business clients, pricing is typically lower compared to individual consumers.
Moc Chau Milk's pasteurized fresh milk products cater to a diverse market, suitable for all ages and occupations The company prioritizes the holistic development of children while addressing various consumer needs Committed to customer health, Moc Chau Milk ensures that its products meet essential nutritional requirements However, it is advised that children under two years old should avoid these products due to their underdeveloped digestive systems, which may lead to issues like bloating and indigestion.
Moc Chau Milk's pasteurized fresh milk stands out in the F&B industry due to its strong reputation and extensive distribution network Each pack is meticulously formulated to meet customer nutritional needs, offering superior benefits compared to UHT milk, despite a shorter shelf life This enhanced nutrient profile, including vitamins and other essential ingredients, contributes to its growing popularity among consumers Consequently, the high quality of both the product and service effectively differentiates Moc Chau Milk's offerings and strengthens its market positioning.
Marketing Mix (4P)
To cater to customers seeking convenient options for enjoying pasteurized fresh milk during lunch outside, manufacturers should consider packaging their products in smaller bottles This change would alleviate hesitation among consumers who find larger bottles cumbersome for on-the-go consumption.
To ensure authenticity, it is essential for Moc Chau milk products to feature an anti-counterfeit stamp, helping buyers easily distinguish genuine items Additionally, providing clear instructions on identifying authentic products is crucial Recognized for their nutritional value, Moc Chau milk products serve as effective energy supplements for children.
The official website contains detailed product information.
Effective planning, price standardization, and unification across all sales channels are essential for Moc Chau milk Currently, the brand's varying prices at different locations create confusion among consumers, prompting them to compare prices and brand reputation with other milk options.
Moc Chau milk is expanding its presence in Central and Southern Vietnam by opening additional showrooms that showcase its full range of products These showrooms will feature dedicated staff to assist customers, enhancing their experience and knowledge of the Moc Chau brand while making it easier to explore and select products.
Increasing the number of stores in densely populated provinces and cities, which helps to raise product and brand awareness while also bringing products to as many people as possible.
More KOLs and Influencers with appropriate images should be invited to represent; this helps to attract more people's attention.
To enhance brand visibility and promote lesser-known products, it is essential to organize additional trial sessions at supermarkets and events Furthermore, amplifying the effectiveness of environmental protection campaigns aligns with the brand's core mission and values.
ACTION PROGRAMS AND BUDGET
1 Moc Chau Milk Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budget bottle (900ml) costs (01/06/2022 (01/09/2022 (01/12/2022 (01/03/2023 (VND)
31/08/2022) 30/11/2022) 28/02/2023) 01/06/2023) MainTarget -Children to -Children to Children International actions Teenagers Teenagers and their in habitants family in Vietnam
Company We can We can We can We can (120
Image provide as a provide provide provide Million) healthy Milk to the Milk for Milk for drink schools freely to promotions
After receiving samples for evaluation, families have discovered that the budget for the semester has increased significantly, reaching over 30 million VND This amount exceeds the usual semester budget, indicating a shift in financial requirements for educational expenses.
Digital -Social -TV -Free Gift (160 and social media, for commercials Million)
We can use buy an one
Facebook, We can hire bottle,
Youtube, or actors to provide a and Zalo promote free gift mainly for Milk to such as
Vietnamese ordinary figures and people here people Moc Chau
(50 Million characters international which is we people, VND) can imagine
Provide -America - Cat Ba - Milk (300
Participate in the Milion Island Festival lottery for a chance to win a free trip to America! By purchasing three or more than 100 drinking bottles of Moc Chau Milk, you can qualify for this exciting opportunity Enjoy the festival and increase your chances of winning a fantastic vacation!
CONTROLS
Moc Chau Milk should develop detailed sub-plans to effectively monitor the progress of its marketing strategy, ensuring maximum returns This phase is crucial not only when facing product challenges but also presents significant implementation difficulties By recognizing the importance of this phase, Moc Chau Milk can enhance its marketing strategies for pasteurized fresh milk products, leading to improved business outcomes.
To ensure the success of its marketing strategies and avoid potential errors, Moc Chau Milk should prioritize monitoring customer feedback through polls and surveys, enabling timely adjustments as needed For instance, if the pasteurized milk product proves unpopular, it should be removed from the marketing plan to conserve budget resources; conversely, positive customer responses would allow the continuation of existing strategies Additionally, by regularly reviewing expenditures, Moc Chau Milk can effectively manage its budget, identify sources of increased spending, and implement cost-cutting measures, particularly in marketing pasteurized dairy products, ultimately enhancing profitability.
CONCLUSION
Moc Chau Milk is a well-known dairy brand recognized for its high-quality products In the upcoming year, we will concentrate on enhancing the Moc Chau Milk pasteurized milk line Despite its achievements and strong financial performance, Moc Chau faces challenges including inadequate marketing, a limited distribution network, and an unstructured product strategy To address these issues, we have conducted a thorough investigation aimed at gradually resolving these challenges.
Moc Chau aims to lead the natural and organic food market in Vietnam by prioritizing consumer satisfaction and adhering to strict cleanliness, safety, and health standards This article outlines the current marketing strategies for Moc Chau Milk, focusing on the STP and 4P frameworks, which have been tailored to meet customer needs and preferences for pasteurized milk products Additionally, the objectives set for this product line are expected to be achieved, while future marketing strategies will further enhance the appeal of Moc Chau's products and strengthen their connection with consumers.
Our marketing plan for Moc Chau Milk was developed after careful consideration of market realities and a detailed analysis of its strengths and weaknesses, reflecting our commitment to achieving the outlined goals and objectives.