INTRODUCTION ABOUT TRUE MILK
Overview of the dairy market
Vietnam is a fertile market for domestic and foreign dairy companies Increasing population along with changes in nutrition has increased the demand for milk Besides the big names in the country, many foreign milk brands have also entered, creating quite strong competition
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
2020, the dairy industry increased by 19.1% in market capitalization, better than the VN- Index (14.9% in 2020) From the bottom on March 24, 2020, the dairy industry increased sharply by 60% but still lower than the recovery of the whole market of 67.5%, recorded in the report of SSI Research
According to SSI Research, domestic demand for dairy products was less affected by Covid-19, only down -6.1% in value compared to a decrease of -7.5% for consumption of consumer goods (FMCG) in the first 9 months of 2020 and the country's nominal retail sales growth is 4.98% (GSO, 2020)
Vietnam is considered as a potential dairy market Because Vietnam is a country which has population growth, young population structure with a high population growth rate of about 1.2%/year, GDP growth rate of 6-8%/year, per capita income increasing by 14.2%/year These factors combined with the trend of improving the health and stature of the Vietnamese people make the demand for dairy products always keep a high growth rate, forecasted to reach 9%/year in the coming years next
According to Phu Hung Securities Joint Stock Company (PHS), contrary to the negative impact of COVID-19 on the global economy as well as in Vietnam, the consumption value of milk and dairy products in Vietnam is still high, strong growth, even stronger than before the epidemic in 2020 Specifically, milk consumption in urban areas grew by 10% while in rural areas it grew by 15%
Forecast for 2021, SSI Research estimates single-digit revenue growth in 2021, based on the assumption: The Covid-19 epidemic will be under control by mid-2021: There will be no more social distancing around the world The country and overall dairy consumption should recover 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
It is estimated that by the end of 2020, Vinamilk still holds the highest market share in the dairy industry with 43.3% If including Moc Chau Milk, these two businesses account for more than 45% of the market
Moc Chau are said to have a makeover after returning to Vinamilk, Moc Chau milk's net profit in the first 9 months of 2020 increased by 68%, while IDP reached VND 151 billion in net profit in the first half of last year, compared with VND 113 billion in 2019
Nutifood is also targeting the liquid milk segment with bold plans, including the cooperation with Hoang Anh Gia Lai (HAGL) to build a raw milk area with nearly 120,000 dairy cows, capable of supplying 1 ,2 million liters of milk/day However, until now, the above cooperation program has not been as expected, so the amount of fresh milk sold by Nutifood is quite limited, because the company's cow farming area has only reached a few thousand cows, low compared to other companies Currently, Nutifood accounts for 7.2% of the dairy market
Right from its inception, TH True Milk has set a goal of capturing 50% of the fresh milk market by 2020 The Group withdrew $1.2 billion from its “wallet” as well as many human resources to build a cow farm project Asia's largest dairy factory and the largest dairy factory in Southeast Asia Focusing on new product lines has helped TH True Milk to develop Only 5 years after the launch of the first product, by 2015, TH true Milk is the enterprise that owns the largest dairy herd in Vietnam with a herd size of up to 45,000 heads, on a farm area of 8,100 hectares, concentrated in Nghe An As of 2020, TH True Milk accounts for 6.1% of the milk market share in the country
Competition in the dairy industry tends to become increasingly fierce when large companies expand their scale through M&A and more competitors enter the market Masan has just launched new products, while Vitadairy seems to be growing fast in the powdered milk segment
Dairy Market In 2020 – Source: Euromonitor, SSI
Introduce TH True Milk
TH True Milk Company, whose full name is TH Milk Food Joint Stock Company, belongs to TH Group - was established under the financial advice of Bac A Commercial Joint Stock Bank Entering the Vietnamese market since 2010, the company always aims to produce the most authentic fresh milk products Although it has only been born for 12 years “ ” (according to 2020 data), TH True Milk has achieved many proud achievements In 2013, the company inaugurated a clean fresh milk factory with a capacity of 500,000 tons/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 aspires to become “Vietnam's leading manufacturer” in the clean food world's most modern technology, TH decided focused on becoming a world-class food brand trusted by everyone, loved by everyone and proud of the nation
With the spirit of being close to nature, TH Group always tries its best to nourish Vietnamese body and soul by providing food products derived from nature - clean, safe, fresh and delicious nutritious The aspiration is called Vietnamese stature, wishing to improve the physical and intellectual capacity of the Vietnamese people and for the future of the generation of Vietnamese children to have a clean, safe and nutritious source of nutritious milk from nature
With the slogan “True Happiness” - True Happiness, “Let's make the best milkshake with a mother's heart and heart” and always stick to the 5 core values that have brought consumers closer to TH
• Environmentally friendly – Out-of-the-box thinking
In the context of the domestic dairy industry being confused with the concepts of remixed “ powdered milk”and “fresh milk” for profit, the clean fresh milk TH True Milk has opened a breakthrough path, laying the first bricks, the foundation foundation for the clean fresh milk production and processing industry in Vietnam “With TH True Milk, the strength of a brand is the core value that we are striving for For the health of the “ community””
Carrying out the project of raising dairy cows in concentrated barns and processing milk with a scale of 1 billion 200 million USD with 137000 dairy cows on 37000 hectares of land Meet 50% of the demand for dairy products of the domestic market, become the leading supplier of clean milk and pasteurized fresh milk in Vietnam
Launched TH True Milk pasteurized fresh milk, at the same time expanding the production of products made from fresh milk
Launched a retail chain of TH true mart specializing in providing fresh and clean products from TH farms such as pasteurized fresh milk, TH True Milk yogurt, beef, seafood, fresh vegetables and fruits,etc TH true mart strives to become a chain of convenience goods providing clean, safe and high-class food to consumers.
On September 18,2020, in Kon Tum province, TH Group held the Groundbreaking Ceremony of a concentrated dairy farming project with a high-tech industrial scale in Mo Rai border commune, Sa Thay district The project is the next step in the roadmap to build a map of TH True Milk milk that is spread across the country with farms in Nghe An, Ha Giang, Phu Yen, Thanh Hoa and soon An Giang and Cao Bang, with the goal of by 2025, the total number of concentrated dairy cows in cooperation with farmers will reach 400,000 heads to expand the TH true mart store chain nationwide to meet people's needs
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 received capital resources from shareholders, loans form BIDV and Vietnam Bank (VDB), Nghe An branch and Maritime Bank TH True Milk also received investment advice from Bac A Bank where Ms Thai Huong is the executive manager This bank used to be a shareholder, holding 7% of TH True Milk’s shares according to a report 2014 In addition, TH Group is also supported by the Israel Government with an investment package
TH knows that people are a valuable asset and also a decisive factor for the sustainable development of the business Therefore, TH always focuses on investing in people The working environment is always professionalized by an international - class team and the exchange between many foreign experts TH also focuses on training talents to do the work in the best way Thanks to the intensive courses, always updating knowledge, equipping with modern technology to help employees follow the trend of the times
Through many forms such as advertising on TV, newspaper, posters at agents, distribution centers, company website or products launch programs or community charity programs, Th all promote their image and information about the element “clean milk” which is safe for people’s health.
External marketing environment
Vietnam is under the socialist regime, has a stable political environment and the legal system is increasingly improved to create conditions for businesses including TH True Milk According to Decree 38/2019/2019/ND-CP, the general minimum salary is 1.490.000 VND/month, so a rise in the salary of employees will increase the purchasing power of the whole country However, it also makes TH True Milk have to increase costs because of increased salary fund
Globalization and international economic integration are deepening, especially when Vietnam’s accession to the WTO brings many opportunities for many businesses to co- operate with foreign partners including the dairy industry The price of dairy products in the world tends to increase which creates competitive conditions on prices for Vietnamese dairy enterprises and moves towards expanding overseas market At the same time, domestic repair businesses have the opportunity to interact with new, more advanced technologies to perfect themselves in a competitive environment
One of the positive indicators of the dairy industry in the past year was the increased profit margin Overall, the COVID-19 pandemic has impacted milk global demand, keeping the price of dairy raw materials low in 2020, especially the price of Anhdryous (-23% over the same period) In addition, low oil process help reduce packaging and transportation costs These factors support the gross profit margin of dairy companies WB forecasts Vietnam's GDP growth is expected to reach 6.6% in 2021, although the WB is 0.2% lower than the forecast of 6.8% made at the end of 2020 due to the effects of the COVID-19 outbreak, but the WB still confirmed that this is the highest growth rate forecasted for countries in the ASEAN region, the average income of people is stable, leading to an increase in consumption demand for food products, including milk This is an advantage for TH True Milk to develop day by day in the COVID situation Despite the ability to compete on price, Vietnamese dairy enterprises face difficulties in product quality with foreign enterprises Many Vietnamese consumers accept a set price of more than 200% to use imported milk
Modern machinery systems, modern farming equipment inside the largest concentration of high-tech dairy farms in Asia in Nghe An The cows in TH farm are completely imported from famous countries with clear pedigree, ensuring the best milk flow, not only that, the cows here are fitted with chips to monitor health and growth, barn system with wind and air conditioning to ensure the best living conditions In order to keep the closed process in cow raising and milk production, TH Group invests in building TH clean fresh milk processing factory This factory has the largest scale in Southeast Asia with the most modern equipment and machinery in the world
The level of culture is increasingly improved, the speed of development, consumers gradually become more aware of the importance of health, pay more attention to nutrition, and drinking milk becomes a habit and becomes a habit very popular The demand for milk of Vietnamese people is increasing day by day Therefore, since its inception, TH True Milk has affirmed in the market with the brand “clean milk” to meet the needs of customers
With the criterion of keeping the essence of every drop of milk intact, producing dairy products and being environmentally friendly along with the application of high technology in production to offer healthy products that are suitable for human consumption environment is the orientation of TH True Milk
TH True Milk always brings consumers quality products, fresh, intact with the essence of nature, suitable for all customers According to a recent study in 2021 by ADM Outside voice, 77% of consumers tend to find ways to improve their immune system, fresh milk, yogurt, cheese increased sharply due to the increase in people's income and more focus on health in the current COVID situation This is an advantage for TH True Milk because TH's products are guaranteed to be clean milk of international standards, without preservatives but still retain the maximum nutrients TH True Milk's target customer groups are parents with children from 0-7 years old, teenagers aged 8-19 years old This is a group of customers with relatively diverse consumption needs, they pay much attention to product quality, nutritional value, reasonable price and account for a high proportion Or other subjects in urban areas, big cities people care a lot about the health of themselves and their families In addition, TH sub targets international customers, TH has conquered many fastidious markets such as Russia, China and ASEAN countries
When TH True Milk decided to enter the market in 2009, there were many dairy brands both at home and abroad that were known by many consumers such as Vinamilk, Dutchlady, Abbott,etc In which, Vinamilk is currently the leading enterprise in the dairy processing industry In 2020, Vinamilk holds the highest market share in the dairy industry with 43.3%, Dutch Lady with about 15.8% market share, the rest belongs to smaller companies Although TH True Milk was born later, the growth rate is very strong, rising to the 3rd position in the dairy market share
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, using modern technology and advanced breeding methods Each of these clusters has about 15,000-17,000 dairy cows TH farm's cows are imported from the US, Australia, Canada, New Zealand, etc, with clear pedigree to produce the best milk, ensuring the content of fat, protein,etc in milk Besides, the source of feed for cows is extremely diverse such as corn, American sorghum, Mombasa grass, Mulato grass, soybean pods, purified water, et c.
Currently, TH True Milk pasteurized fresh milk products are using packaging of Tetra Pak (Sweden) and SIG Combibloc (Germany), both of which are produced on modern and advanced technological lines top in the world
Customers can easily buy TH True Milk's products The system of warehouses and convenient storage brings products to intermediary agents and sells them in supermarkets such as Big C, Coopmart, etc Especially the TH true mart supermarket chain system spanning the country, TH wants to bring products to consumers in the fastest way, ensuring safety, product quality is the best Along with that, we regularly organize product launch seminars to bring products closer to customers.
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
The population in this area in 2019 is 33,059,735 people, accounting for 34.4% of the total population of the country and is on the rise With the feature of high population density, it is convenient for distribution and consumption of goods The income of urban people is also higher, so they care about health and often use milk for the whole family They are often loyal to the products they have chosen and trusted before Experts say that the dynamics of the dairy industry in 2020 mainly comes from people's sense of health care, especially urban consumers With a wide consumer network, especially in urban areas, more and more consumers choose to buy TH True Milk products
The population in rural areas is 63,149,249 people, accounting for 65.6% of the more than
90 million people Along with the process of urbanization, the consumption gap between rural and urban areas is shrinking, but in general, it is still lower than that of urban areas Milk consumption in rural areas in 2020 will grow by 15% Whereas consumers in urban areas look for high-end products, in rural areas, they are loyal to traditional products that they have trusted and suitable for their income ability However, people in both urban and rural areas tend to be more concerned about health, so nutrition and product quality is a big factor influencing their decision
3.1.2 Market segmentation based on demographics
Based on age, the market can be divided as follows:
• Age 0-4: This is the age that needs to be supplemented with many nutrients, DHA for development, but the digestive system is not yet mature, often use specialized dairy products for ages
• 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
They have full of media channels as well as the ability to access TH True Milk quickly and effectively With the average income of urban people, the level of awareness of product quality and the healthcare needs of themselves and their families, the fact that they have to spend more money on them a “clean” dairy product with a slightly higher price on the market is perfectly reasonable and easy to understand
This is the customer segment that TH True Milk is particularly interested in Because this is a growing age, it is necessary to have a source of nutrients, vitamins, DHA, calcium to absorb Therefore, the demand for milk at this stage is higher than ever
And in order to attract this group of customers, TH has constantly improved and produced a variety of products to suit different age groups and preferences: strawberry or chocolate flavored milk, TOPKID formula with accessible, friendly animated image However, the special thing is that customers at this age are not aware of the price as well as the financial capacity, so to make a purchasing decision,
TH must conquer the customers in the next segment
In this target group, TH aims to gain the trust and confidence of fathers and mothers as they are the ones who directly make nutritional decisions for their children If the customer aged 5-14 years old concern about appearance and taste, these customers are more interested in the origin, porcelain, quality, nutrition and preference of their children Understanding the hearts and aspirations of Vietnamese families, with the motto “Make a good glass of milk with the mother’s heart” that's why right from the moment entering the Vietnamese dairy market, TH True Milk has always created an image for itself as a brand of clean, pure, fresh milk that fully meets international standards in terms of raw materials as well as production lines to the finished products, constantly improving product quality to expand more and more market, conquering more classes of customers.
Target market positioning
The competitive advantage of TH True Milk is that the input materials are all supplied from the TH farm, so the quality and production proccess are always assured TH's business philosophy from the beginning is not by all means to optimize profits, but to rationalize benefits, always towards the community, for the benefit of consumers For each cup "true natural" milk Besides the good image of a “green business, TH True Milk products always ” aims for great goals for the future generation of Vietnam In the past time, these values have been effectively exploited through the media such as newspapers, TV, etc The products that are always emphasized are fresh, clean, pure“ ” milk.
From the right judgments about the market, TH Milk has declared a common characteristic of dairy products - that is “clean” And even though Vinamilk or Dutch milk Lady is also clean, the problem is that none of them are aware of the need to declare announce this in the mass media TH is the FIRST company to claim they are “clean milk” and they were one step ahead of their veteran rivals in doing this The word True “clean” – “Standard” thus establishes the TH's position and makes a clean milk revolution on the Vietnamese market.
TH TRUE MILK'S MARKETING MIX STRATEGY
TH TRUE MILK'S PRODUCTS STRATEGY
With the motto: “Clean fresh milk is the only way” TH Group has conveyed the best from nature to consumers The development of people's living standards and incomes as well as the increased understanding of the benefits of milk make the demand for a quality milk source more necessary than ever Understanding those wishes, TH begins their story with the desire to rise up titled: For the health of the community Born in a fiercely competitive market with more than 500 large and small brands in the same industry, TH wishes to bring people the most authentic and happiest experiences when enjoying pure and fresh TH True Milk
The fresh milk segment has long been interested and accepted by consumers This is also TH's target market with clean, delicious and safe fresh milk In order to truly own the position of “Completely from nature”, for more than 10 years, TH has continuously strived to affirm its position as the leading producer of fresh milk in Vietnam Continuing to expand the product ecosystem, TH pioneers in the path of healthy drinks, with all-natural products, low in sugar or no added sugar, helping to align consumption habits towards healthier, contributing to improving the mind and body for consumers TH understands that expanding the product portfolio is also a way to help TH get closer to every home and every customer TH's current dairy product lines:
❖ 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 stands for two words “True Happiness”, True Milk is clean milk Through that, TH True Milk wants to convey its sacred mission of bringing cups of milk from green pastures and modern technology at TH farm It is also giving sincere feelings to consumers through the most “true” product line from nature, preserving the essence of every drop of milk It is also because of those humanistic meanings and the easy- -remember, impressive name, to associated with the outstanding characteristics of the product, that TH gradually asserts its
“happy milk brand in the hearts of the public ”
TH True Milk is using the packaging of Tetra Pak (Sweden) as the world's No 1 supplier of UHT packaging along with Combibloc (Germany) packaging to meet the increasing consumption of consumers Both types of packaging are manufactured on the most modern and advanced lines today In general, apart from some differences in form, the contents of both types of packaging are still guaranteed according to certain standards
• 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 using these two types of packaging are similar in terms of image, information content on the package, price, packaging quality in preserving milk, actual volume, product quality is completely the same, fully comply with the standards that TH has announced to customers and is licensed by the regulatory agency for circulation However, there is a slight difference in appearance because the two suppliers use different production machines
Visually, the Combibloc box looks shorter and larger, but the actual volume inside is unchanged compared to the Tetra Pak box It is also easy to see that the back seam of Tetra Pak packaging is in the middle, while that of Combibloc is at the edge of the milk carton Corresponding to this back weld, the place of the suction cups of the two types is also in different positions In addition, can be seen on the milk box with the logo with the name of the packaging manufacturer, this is the best way to distinguish the two types of packaging Tetra Pak and Combibloc
With the desire to bring to Vietnamese consumers clean, delicious and nutritious fresh milk products, TH considers quality assurance for products a prerequisite in production and development TH True Milk is the only brand that owns a closed production process from “ green grass to clean milk” in Vietnam today TH Milk Food Joint Stock Company has built a proactive process from input material production, processing and product 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
• Raw materials and nutrition: TH is completely autonomous in terms of feed ingredients to ensure the best nutrition for dairy cows: corn, American sorghum, Mombasa grass Formula for each group of cows, blending process by advanced software
• Water source: The cows drink clean water treated with Amiad technology to ensure clean and pure water for the cows
• Farms and herd management: The world's most advanced farm and barn TH uses Israeli management technology Cows are tagged and have electronic chips in their legs to monitor health status, nutrition and milk production and information is easily collected and managed
• 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
• Production: Clean fresh milk is transported by cold pipe system to the main tank at the farm and then transferred to the cold tank, the cold temperature is always maintained at 2-4 degrees Celsius TH clean fresh milk factory has advanced technology at present world's greatest The factory's products meet ISO 22000 standards of food safety and hygiene
With a chain-based production approach from clean pastures, clean farms to clean cups of fresh milk, it didn't take long for TH True Milk to be well received and trusted by consumers Mr Yu Hoan Chun, general director of Wuxi Jinqiao said, visiting TH farms in Nghia Dan, Nghe An and seeing first-hand the closed process, high technology of TH, he believed that TH's products will conquer Chinese consumers “I have tried the product
We assess that TH products are of the same quality as products of European and American countries, which are present on the Chinese market” he said Not only 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
Having won many domestic and foreign awards, TH True Milk is continuously trusted by consumers and is the pride of Vietnamese people Most recently, there are awards such as Bronze "Product of the Year" for TH True Milk Pasteurized Milk at Stevie Awards 2019; 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
Modern society makes people's needs higher and higher, health factors are also focused and paid more attention This has promoted the development of nutritional products, especially fresh milk - an indispensable nutritional product for every family Besides, price is always a notable concern because this is a competitive factor and encourages consumers to decide to choose products Although coming after the big players in the industry such as Vinamilk, DutchLady,etc TH has used its own unique and different skimming price strategy to penetrate deeply and widely in the market TH True Milk has quickly created a brand of
“clean milk” with “real” actions, creating true value for the TH True Milk fresh milk product line Above all, TH has contributed to changing the minds of Vietnamese consumers: drinking milk is not a luxury, it is a way to protect their health and happiness
Right from the market launch, positioning the brand as a high-end product line, TH chose to sell products at a high price as a ticket to ensure product quality, hitting the consumer's mind with the success sentence The saying "You get what you pay for"
TH's milk price at TH true mart chain stores is the consumer-oriented price and the selling price set by the company TH True Milk's fresh milk products are diverse with different prices
• 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
It can be easily seen that the selling price at the chain of TH true mart stores and the e- commerce channel of TH True Milk is often higher than the price at supermarkets and retail stores For example, a batch of TH True Milk 4 boxes of 180ml/box of fresh milk at TH True Mart store costs 33,000 VND/lot, while at a store like Bach Hoa Xanh, the price of a similar batch of milk is only 32,500 VND/lot at TH True Milk supermarkets cost 31,900 VND/pack
To ensure the interests of TH true mart chain stores and e-commerce channels, TH allows these channels to sell products at higher prices than other agents and supermarkets Due to the characteristics of each sales channel, at consumer stores or supermarkets, retail points will have promotions and gifts in a short time The purpose of this job is to attract buyers, stimulate consumer demand, so the prices in these channels may be cheaper, customers will buy products at a more favorable price than buying directly at the chains TH true Mart store
TH True Milk's pricing strategy is a valuable lesson learned in the market penetration phase As a latecomer to the piece of cake, there have been many diners, especially big brands like Vinamilk or DucthLady - the rulers have had many years of experience in the dairy market in Vietnam Even so, from the very beginning, TH has always known how to make a difference through the execution of its unique strategies
Socio-economic development is growing, per capita income is also increasing It means that people have a higher standard of living, more focus on the health of themselves and their families The need to use nutritional products such as fresh milk is no longer a luxury for people On the contrary, drinking milk has become a common habit and essential need of people Grasping this change, TH has used the skimming price strategy as the first step for its brand Creating a "clean milk" brand is clearly defined through true stories and the production process that creates products, hitting consumers' psychology in the relationship between price and product quality TH has positioned itself as a premium product line and sells products at higher prices than other brands such as Vinamilk, Moc Chau Milk, etc 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 focuses on female customers, from the age of 15 to 35, from 25 to 35, or those in dynamic and modern urban areas and big cities who care about their health and family These focus groups are usually people with middle income or higher, who have a need to consume milk, especially premium, safe and quality milk In addition to ensuring profits, this strategy also strikes consumer trust with images of a high-priced product that goes hand in hand with quality Create brand reputation and high-end products in the mind of customers right from the new stage penetrate the market Accordingly, on the common ground in the Vietnamese dairy market, TH True Milk is ranked in the top of high-cost,
There is no denying the effectiveness that this skimming strategy brings to TH, but TH also does not abuse it because it is only really effective and should be applied in the early stages of the product when it is launched on the market After the success of this strategy, TH is increasingly expanding its customer base, exploring lower-income customer segments with the goal of becoming one of the milk brands chosen by many people, from children to children Even adults, the elderly and those on a diet can also use it It can be said that this is a long-term calculated step of the marketing - mix strategists of TH True Milk.
The competitive advantage of TH True Milk is its mastery of natural ingredients From model dairy farms, TH always ensures an abundant supply for production, along with a production process that applies modern and advanced technology to create a rich source of nutritious milk clean and quality Therefore, the company is not affected much by the price of raw materials from outside the market, does not need to import too much from abroad Instead of importing, TH also exports its nutritious “clean milk to other markets ”Therefore, the price of TH True Milk products will be adjusted when there is an increase in prices from the general milk market This means that prices are less volatile, consumers will have safer choices.
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 assumes that product consumption is the most important part of every business The ultimate goal of all goods and services is to consume as many as possible in order to make a profit As a result, TH has invested in and established a nationwide distribution network with two primary 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 designed its distribution channels to bring products/services to customers in different ways Each layer of the distribution channel is a marketing middle class that does some part of the process of bringing products and their ownership closer to the end user
As a self-distributing activity of the manufacturer, that helps TH Group to be proactive in distribution without depending on intermediaries, TH is the only member selling products directly to consumers in this distribution channel
The first goal when building TH true mart stores is to promote TH's image to consumers - acting as a big showroom with display models “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
With the motto “bringing the essence of nature to every home”, Home Delivery service is the result of concerns and continuous efforts to shorten and eliminate intermediate steps in the process of transporting and distributing, providing consumers with products quickly and conveniently that keep the essence of nature, fresh, and pure
After the customer orders online, the system staff will confirm the order via email or phone call The system will choose the nearest distribution center or TH True mart store to deliver orders to customers within 48 hours
Up to this point, in Vietnam, there are only a few small units and farms that deliver milk at home TH is the first large enterprise interested in eliminating intermediate steps, bringing milk directly to consumers
As a modern distribution channel that TH True milk focuses on, helping fresh milk products distributed to consumers and nationwide In addition to taking on the role For production and supply, TH True Milk also uses the second member who is the retail, supermarket, grocery, etc Retailer is a place to sell dairy products directly to hands consumers TH True milk products are available in big supermarkets such as Big C, Coopmart, Metro, etc From here, products will be sold to consumers at prices set by TH Group, terms of booth rental costs, profits divided by percentage previously agreed by the parties
In addition, TH True Milk also uses Key Account channel: used to distribute to customers This is also the channel that TH's biggest competitor - Vinamilk is applying This makes the battle between the two dairy industries becomes more and more fierce
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
For TH True Milk, to make a difference as well as its own mark on product images products to Vietnamese consumers, in addition TH also implement of sales and distribution products at supermarkets such as BigC, Metro, etc as well as retail and grocery stores, TH True Milk has made a big difference in the distribution system with the introduction and introduction of products directly (without intermediaries) to consumers through the store chain of showrooms TH true mart The new coordination policy in this distribution system has initially made the success of the business
To become a channel member, it is necessary to meet three requirements of the company:
• Scale: for agents, retail points need to be large enough to distribute products effectively For TH true mart showrooms, it is necessary to have a large, airy space, a convenient location to attract customers and preserve milk well
• 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”,
“Completely from nature , ” “Fresh - Delicious – Nutritious , Environmentally ” “ friendly”, Thinking out of the box and harmonizing interests Above all, all “ ” activities must give priority to consumers, producing products has brought high benefits to customers, so it is necessary to have good service, as well as a guaranteed service to create prestige and loyalty trust in customers
4.3.3 Managing and motivating members of distribution system
TH True Milk has planned and devised strategies to train distributors and agents and keep employees updated on product features and best service requirements to ensure business goals in the country Areas are assigned through sales staff Always set goals and monitor the activities of the sales lines to ensure the achievement of targets, market development and planned targets of the year Especially the programs training sales skills for employees at retail points to create a team of experienced professionals with the aim of boosting sales and profits Distributors, agents, retailers, etc are provided with full information and management of product selling prices as committed
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
TH TRUE MILK'S PROMOTION STRATEGY
TH True Milk communicates with its consumers through a variety of ways From designing novel logos, concise slogans to executing unique advertisements, TH has constantly strived and quickly built a brand image with its own imprint in the eyes of consumers Right from the moment it was launched in the market, TH True Milk has made a very right decision to affirm its “clean milk” brand through the “TH True Milk - Truly natural” model with the legendary song “TH True Milk Song” (composed by: Thai Huong) TH True Milk has cleverly conquered the Preemptive Claim strategy, also known as The Laws of Mind It is very common to declare TH as a “clean milk” brand, it is so normal that no one thinks about declaring them because it is a prerequisite standard to ensure of each milk company This move caused a “storm of public opinion” and brought a great resonance to TH even without spending any money The success in applying the strategy of “perceived quality” has brought benefits to brand recognition and proves that TH is on the right track in leading the fresh milk segment Whenever it comes to “clean milk”, the first thing that pops up in
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”
With a transparent message of quintessential, modern and “clean” process, TH uses a variety of means to make an impression on consumers According to Camnest (2019), the main advertising activities of TH True Milk must be mentioned:
• Broadcast TVC through TV channels VTV1, VTV3, VTV6, HTV7, SCTV2, about the modern clean milk production process If national television channels VTV were too familiar with the lives of people in the North, channel HTV7 hit the familiarity with people in the South That shows, TH now not only stops at customers with relative income but also expands to the segment of middle-income customers 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 shows its dedication to consumers when becoming the first brand in the dairy industry to open a chain of TH truemart Showrooms Up to now, there have been 297 TH Truemart stores nationwide to distribute products and create an experience space for its customers Along with the desire to provide the best quality and natural products for consumers on the market, TH is also one of the pioneers in building a synchronous, advanced customer care system, specializing in Modern and professional with multi-channel interaction for customers such as email, hotline, social network, etc
• Chain of stores TH truemart
Customers can contact directly to exchange, reflect, complain or simply ask questions that need to be answered TH's staff will enthusiastically answer and strive to bring maximum satisfaction to consumers With respect, all requests or problems of consumers when received by the customer support center will be handled as soon as possible All customer care activities of the company always strictly comply with the ISO 9001:2015 standard of Bureau Veritas Therefore, TH easily obtains intermediate feedback from customers and maintains a long-term relationship with its target consumers
TH's success in direct marketing is increasingly evident through consecutive awards: Bronze award in the category of "Excellent Customer Service of the Year" in 2018, Silver trophy honors "Excellent Customer Care Department of the Year" at the International Business Awards 2019 (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
In theory, but sales promotion of businesses today is not really effective as it is Because of the racing nature, leading to the lack of synchronization and lack of planning in actions, which wastes the budget, sales promotion automatically becomes a weakness of the business Despite bringing many downsides, it is easy to see that brands are all caught up in the cycle of promotion
Engaged in this race, TH True Milk constantly launches promotional programs such as trial at points of sale, gift hunting, buying combos to get more products of the same type, etc
• Recently, TH has continuously maintained a promotion of buy 8 get 1 free Specifically, from April 1, 2021 to the end of May 31, 2021, customers buy 08 products of 100g Eating Yogurt, Live Yeast Yogurt 100g, 60g TOPKID Eating Yogurt, 100ml Live Yeast Drinking Yogurt, 90ml TOPKID Cheese Drink Yogurt, 180ml Pasteurized Drinking Yogurt will receive 01 product of the same type Or buy
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 applies a free trial program with a new product TOPKID formula milk for children in 4 big cities: Ho Chi Minh, Hanoi, Da Nang, Can Tho Along with that is a gift program for children Collecting TOPKID Cards, Happy Learning Children“ ”,
TH TOPKID 3D wooden picture gift sets, 3D jigsaw sets, etc
• With a “clean” brand positioning, TH implements a program to exchange TH True Milk Organic boxes to receive canvas bags According to TH True Milk, this gift program has a great meaning for the environment and society Wishing to accompany Vietnamese people in implementing a green lifestyle, limiting the use of plastic bags and especially each box will be recycled into other useful products useful for the environment
Understanding the importance of personal selling for its business, TH has pioneered the dairy industry in opening a chain of TH true mart Showroom stores nationwide, and at the same time setting up its own home delivery team to ensure quality to consumers
Each employee of TH has undergone a thorough and professional training process according to modern standards Through actual sales activities, TH's employees will be the ones to directly collect and synthesize necessary information from customers Based on TH's commercial database, the staff selects potential customers or sales prospects Through meeting and approaching at TH's direct selling points, employees can grasp the right needs of consumers so that the business can create the right products and satisfy them, and finally convince customers buy your product TH's sales staff, especially sales staff at TH truemart showrooms, will take on the role of promoting sales to maximize revenue and maintain relationships with potential customers With a dynamic, enthusiastic business team and a diversified product portfolio, TH is always proud to be one of the leading enterprises in the country's dairy industry, always meeting and reasonably satisfying the needs of customers, consumer demand in the market
Besides, TH True Milk also regularly implements many attractive promotions and offers for customers Especially the benefits for priority customers: from April 15, 2021, Bac A Bank - TH true mart co-branded cardholders will be refunded 20,000 VND with orders from 100,000 to 200,000 VND, 10% refund (maximum no more than 50,000 VND) for orders over 200,000 VND
With industry characteristics associated with the health and life of consumers, TH always implements PR activities closely associated with social benefits, community development, encouraging the development of children and the height of children Vietnamese people aim to become a brand that sticks with the public, also known as a national brand
OFFER
Competition in the dairy industry is getting fiercer and fiercer, especially when there are more foreign brands entering With the Vietnamese mentality of being a foreigner, it is difficult in rising to the top and maintaining the competitive advantage of TH has increased even more Solution The current common solution for businesses is to conduct research and increase diversity of types and models to satisfy the needs and tastes of customers
For TH True Milk, product diversification is mainly done in the direction of increasing product category This is the most effective economic solution, no need to invest more money in new technology lines but still mainly rely on existing technology At the same time, product diversification must go hand in hand with product quality improvement Here are some issues that TH Group needs to pay attention to, such as:
• Research and add dairy products and dairy products with new flavors so that customers have more choices
• Design packaging and straws with many unique shapes, eye-catching colors For children's milk, it is advisable to regularly change the design and print attractive images to suit their preferences from time to time This will help attract consumers, especially children
• 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
“standard for checking and handling mold products”, process for handling when products “ are contaminated with strange objects , ” etc Monitor and correct inappropriate points through periodic evaluation of the system ISO and set out preventive measures
TH needs to strengthen sales promotion activities, continue to promote its advantages through effective use of tools in its promotion strategy such as PR, advertising, etc At the same time, promote advertising on other media Ads should have simple, memorable content with the goal of creating awareness and keeping the product image in the mind of the customers This will help expand coverage brand and attract the attention of consumers For the diversity in channels’ distribution, TH should focus on strengthening control over its channels to unify a common goal by establishing a reciprocal relationship strategic cooperation, mutual development between the company and agencies At the same time, there should be more solutions to reach customers more effectively to be able to collect information and needs of customers From there, make the most suitable construction and development policies for the 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 a very effective form of business However, this form is difficult to manage and strictly control Agents, supermarkets, grocery stores, etc can dump or even sell fake and expired milk, which can be replaced with a new date to continue selling to consumers Therefore, TH needs to confirm and only sign contracts to supply products to trusted distributors Strictly control the sources of goods when delivered to distributors In addition, products must be preserved according to standards to avoid damage Besides, it is necessary to thoroughly handle the places that supply fake and poorquality goods for profiteering and affect negativelys the reputation and brand image of TH
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STT Full name Work Contribution
1 Nguyễn Tâm Như Marketing Mix -Price
3 Phan Ngân Hà Analysis of STP
5 Nguyễn Thu Hi n ề Marketing Mix Price –
Marketing Mix Place – Marketing Mix Promotion – Offer