Overview of the dairy market
Vietnam's dairy market is thriving, driven by a growing population and evolving nutritional preferences that boost milk demand The landscape features both prominent domestic brands and a surge of foreign milk companies, intensifying competition within the sector.
The COVID-19 epidemic has had a great impact on the production and business activities of enterprises However, dairy businesses seem to be less affected by this "storm" Closing
In 2020, the dairy industry experienced a significant market capitalization growth of 19.1%, outperforming the VN-Index's increase of 14.9% Following a low on March 24, 2020, the sector surged by 60%, although it still lagged behind the overall market recovery of 67.5%, as reported by SSI Research.
SSI Research indicates that domestic demand for dairy products experienced a smaller decline of only 6.1% in value during the first nine months of 2020, compared to a 7.5% drop in the consumption of fast-moving consumer goods (FMCG) Additionally, the country's nominal retail sales growth stood at 4.98% during the same period, according to GSO data from 2020.
Vietnam is emerging as a promising dairy market due to its robust population growth, characterized by a youthful demographic and an annual growth rate of approximately 1.2% With a GDP growth rate ranging from 6% to 8% and a significant increase in per capita income at 14.2% each year, the country presents substantial opportunities for dairy industry expansion.
The increasing health consciousness and improving stature of the Vietnamese population are driving a sustained demand for dairy products, which is projected to grow at an impressive rate of 9% per year in the coming years.
Phu Hung Securities Joint Stock Company (PHS) reports that despite the adverse effects of COVID-19 on the global and Vietnamese economies, the consumption of milk and dairy products in Vietnam has remained robust, showing significant growth Notably, milk consumption in urban areas increased by 10%, while rural areas experienced an even more impressive growth of 15%, surpassing pre-epidemic levels in 2020.
In 2021, SSI Research anticipates single-digit revenue growth, contingent upon the assumption that the Covid-19 pandemic will be under control by mid-year, leading to the cessation of global social distancing measures This recovery is expected to drive dairy consumption back from its 2020 low of 7%.
The fact that many milk brands appear together has created considerable competition To sell products, businesses are constantly coming up with new strategies
As of the end of 2020, Vinamilk maintained a leading position in the dairy industry with a market share of 43.3% When combined with Moc Chau Milk, these two companies collectively represent over 45% of the market share.
Moc Chau milk has undergone a significant transformation since its return to Vinamilk, achieving a remarkable 68% increase in net profit during the first nine months of 2020 Additionally, IDP reported a net profit of VND 151 billion in the first half of last year, up from VND 113 billion in 2019.
Nutifood is making significant strides in the liquid milk sector, partnering with Hoang Anh Gia Lai (HAGL) to establish a raw milk area featuring nearly 120,000 dairy cows, with a potential output of 1.2 million liters of milk per day However, the collaboration has not met expectations, resulting in limited fresh milk sales, as Nutifood's current dairy farming operations only encompass a few thousand cows, which is considerably lower than its competitors As it stands, Nutifood holds a 7.2% share of the dairy market.
TH True Milk aimed to capture 50% of the fresh milk market by 2020, investing $1.2 billion and significant human resources into developing Asia's largest dairy factory and a major cow farm project Within just five years of launching its first product, by 2015, the company had established itself as the owner of Vietnam's largest dairy herd, boasting 45,000 heads across 8,100 hectares in Nghe An By 2020, TH True Milk held a 6.1% share of the national milk market.
The dairy industry is experiencing intensified competition as large companies engage in mergers and acquisitions, and new entrants join the market Recently, Masan has introduced innovative products, while Vitadairy is rapidly expanding its presence in the powdered milk segment.
Dairy Market In 2020 – Source: Euromonitor, SSI
Introduce TH True Milk
Formation
TH True Milk Company, officially known as TH Milk Food Joint Stock Company and part of TH Group, was established with financial guidance from Bac A Commercial Joint Stock Bank Since its entry into the Vietnamese market in 2010, the company has focused on producing high-quality fresh milk products Despite being founded only 12 years ago, TH True Milk has garnered significant achievements, including the inauguration of a clean fresh milk factory in 2013 with an impressive capacity of 500,000 tons per year.
Dairy cows are raised according to high technology standards, with more than 45,000 cows carefully selected from New Zealand, Australia, Canada,etc.
Vision
TH Group aims to be Vietnam's premier manufacturer in the natural clean food industry Through significant long-term investments and the adoption of cutting-edge technology, TH is dedicated to establishing itself as a globally recognized food brand that earns the trust and affection of consumers while fostering national pride.
Mission
TH Group is dedicated to nurturing the Vietnamese body and soul by offering clean, safe, and nutritious food products sourced from nature Their mission, known as "Vietnamese stature," aims to enhance the physical and intellectual well-being of the Vietnamese people, ensuring that future generations have access to fresh and wholesome milk derived from natural sources.
Core values
Under the slogan "True Happiness," TH is dedicated to crafting the finest milkshakes with the care and love of a mother By adhering to five core values, TH continues to strengthen its connection with consumers, ensuring a delightful experience with every sip.
• Environmentally friendly – Out-of-the-box thinking
In the midst of confusion in the domestic dairy industry regarding “powdered milk” and “fresh milk,” TH True Milk has pioneered a new path for clean fresh milk production and processing in Vietnam The brand emphasizes that its core value lies in promoting community health, positioning itself as a leader in the industry.
Development Goals
The project aims to establish concentrated barns for raising 137,000 dairy cows across 37,000 hectares, with an investment of $1.2 billion This initiative is designed to fulfill 50% of Vietnam's domestic dairy product demand, positioning the venture as the leading supplier of clean and pasteurized fresh milk in the country.
Launched TH True Milk pasteurized fresh milk, at the same time expanding the production of products made from fresh milk
TH True Mart is a retail chain dedicated to offering fresh and clean products sourced directly from TH Farms, including pasteurized fresh milk, TH True Milk yogurt, beef, seafood, and a variety of fresh vegetables and fruits The chain aims to establish itself as a convenient source for high-quality, safe food options for consumers.
On September 18, 2020, TH Group launched a groundbreaking ceremony for a high-tech concentrated dairy farming project in Mo Rai border commune, Sa Thay district, Kon Tum province This initiative is part of TH True Milk's expansion strategy, which includes establishing farms across various regions such as Nghe An, Ha Giang, Phu Yen, and Thanh Hoa, with plans to include An Giang and Cao Bang By 2025, the project aims to collaborate with farmers to increase the number of concentrated dairy cows to 400,000, thereby expanding the TH True Mart store chain nationwide to meet growing consumer demand.
Organizational structure
TH Food Chain Joint Stock Company (distribution)
TH Dairy Food Joint Stock Company (farm)
TH Milk Joint Stock Company (factory)
TH True Milk’s marketing environment
Internal marketing environment
TH True Milk has secured capital resources from various sources, including shareholders and loans from BIDV, Vietnam Bank (VDB), Nghe An branch, and Maritime Bank Additionally, the company received investment advice from Bac A Bank, where Ms Thai Huong serves as the executive manager; this bank was previously a shareholder, holding 7% of TH True Milk’s shares as reported in 2014 Furthermore, TH Group has gained support from the Israeli Government, which has provided an investment package valued at $100 million, while TH's charter capital stands at 3,800 billion VND.
TH recognizes that people are a vital asset and key to sustainable business development As a result, the company prioritizes investment in its workforce, fostering a professional environment supported by an international team and collaboration with foreign experts TH is dedicated to talent development through intensive training programs that continuously update knowledge and equip employees with modern technology, ensuring they stay aligned with current trends.
The promotion of "clean milk," which prioritizes consumer health, is achieved through various channels including television advertisements, newspaper articles, posters at distribution centers, the company website, product launch events, and community charity initiatives.
External marketing environment
Vietnam's socialist regime fosters a stable political environment and an improving legal system that benefits businesses like TH True Milk The implementation of Decree 38/2019/ND-CP, which sets the general minimum salary at 1,490,000 VND per month, is expected to enhance the purchasing power of the population However, this increase in employee salaries also leads to higher operational costs for TH True Milk.
Globalization and international economic integration are intensifying, particularly following Vietnam's accession to the WTO, which opens up numerous opportunities for collaboration with foreign partners, especially in the dairy industry As global dairy prices rise, Vietnamese dairy enterprises face increased competition, prompting them to explore overseas markets Additionally, domestic businesses can engage with advanced technologies, enhancing their capabilities in a competitive landscape.
In the past year, the dairy industry has seen a positive trend with an increased profit margin, despite the challenges posed by the COVID-19 pandemic, which led to a decrease in global milk demand and a significant drop in the price of dairy raw materials, particularly Anhdryous, which fell by 23% compared to the previous year Additionally, lower oil prices have contributed to reduced packaging and transportation costs, further benefiting the industry's profitability.
Vietnam's GDP growth is projected to reach 6.6% in 2021, according to the World Bank, despite a slight reduction from the previous forecast of 6.8% due to the impacts of COVID-19 This growth rate remains the highest among ASEAN countries, contributing to stable average incomes and an increased demand for food products, particularly milk This situation presents a significant opportunity for TH True Milk to expand during the pandemic However, Vietnamese dairy companies face challenges in product quality when competing with foreign enterprises, despite their ability to compete on price.
Many Vietnamese consumers accept a set price of more than 200% to use imported milk
Nghe An is home to Asia's largest concentration of high-tech dairy farms, featuring modern machinery and advanced farming equipment TH farm boasts cows imported from renowned countries with verified pedigrees, ensuring optimal milk production These cows are equipped with health and growth monitoring chips, and the barn system includes wind and air conditioning to provide ideal living conditions To maintain a closed-loop process in cow raising and milk production, TH Group has invested in a state-of-the-art fresh milk processing factory, the largest in Southeast Asia, utilizing the most modern equipment and technology available globally.
As cultural awareness and development accelerate, Vietnamese consumers are increasingly prioritizing health and nutrition, leading to a growing habit of milk consumption This rising demand for milk has positioned TH True Milk as a prominent brand in the market, recognized for its commitment to "clean milk" that caters to customer needs.
TH True Milk is committed to preserving the purity of every drop of milk while producing environmentally friendly dairy products By integrating advanced technology in its production processes, the company aims to deliver healthy products that are safe for human consumption.
TH True Milk is committed to delivering high-quality, fresh products that embody the essence of nature, catering to a diverse customer base A 2021 study by ADM Outside Voice revealed that 77% of consumers are actively seeking ways to enhance their immune systems, leading to a significant rise in demand for fresh milk, yogurt, and cheese, especially during the ongoing COVID-19 pandemic This trend benefits TH True Milk, as their offerings are clean, internationally-standardized milk products free from preservatives while maximizing nutritional value The primary target audience includes parents of children aged 0-7 and teenagers aged 8-19, who prioritize product quality, nutritional benefits, and affordability Additionally, urban residents are increasingly health-conscious about their family's well-being TH True Milk also aims to reach international markets, having successfully penetrated demanding regions such as Russia, China, and ASEAN countries.
TH True Milk entered the market in 2009, facing established competitors like Vinamilk, Dutch Lady, and Abbott Vinamilk leads the dairy processing industry, commanding a significant 43.3% market share in 2020, followed by Dutch Lady with 15.8% Despite being a later entrant, TH True Milk has experienced rapid growth, positioning itself as the third-largest player in the dairy market.
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 utilizes modern technology and advanced breeding methods in its dairy farming, with each cluster housing approximately 15,000 to 17,000 dairy cows The cows at TH farm are imported from countries like the US, Australia, Canada, and New Zealand, ensuring a clear pedigree for optimal milk production with high fat and protein content Additionally, the cows are fed a diverse diet that includes corn, American sorghum, Mombasa grass, Mulato grass, soybean pods, and purified water.
TH True Milk's pasteurized fresh milk products are packaged using state-of-the-art Tetra Pak (Sweden) and SIG Combibloc (Germany) technology, ensuring high-quality and modern packaging solutions.
TH True Milk ensures easy access to its products through a well-established warehouse and storage system that supplies intermediaries and major supermarkets like Big C and Coopmart The TH True Mart supermarket chain, which spans the country, aims to deliver products to consumers quickly while maintaining the highest safety and quality standards Additionally, TH True Milk frequently hosts product launch seminars to enhance customer engagement and familiarity with their offerings.
TH TRUE MILK's STP STRATEGY ANALYSIS
Market Segment
3.1.1 Market segmentation by geographical location
Based on population density and consumption habits, it is divided into 2 groups: urban and rural
In 2019, the population of this region reached 33,059,735, representing 34.4% of the country's total and showing an upward trend The high population density facilitates efficient distribution and consumption of goods Urban residents typically enjoy higher incomes, leading to increased health consciousness and a preference for milk products for their families This loyalty to trusted brands is evident, as experts predict that the dairy industry's growth in 2020 will be driven by urban consumers' focus on health care Consequently, TH True Milk products are increasingly favored by a broad consumer network, particularly in urban areas.
The population in rural areas is 63,149,249 people, accounting for 65.6% of the more than
As urbanization progresses, the consumption gap between rural and urban areas is narrowing, yet rural consumption levels still remain significantly lower than those of urban regions, affecting approximately 90 million people.
In 2020, milk consumption in rural areas is expected to increase by 15%, driven by a strong loyalty to traditional products that align with consumers' income levels While urban consumers often seek premium offerings, rural buyers prioritize familiar options Health consciousness is rising in both demographics, making nutrition and product quality crucial factors in their purchasing decisions.
3.1.2 Market segmentation based on demographics
Based on age, the market can be divided as follows:
Children aged 0-4 require essential nutrients, particularly DHA, for optimal development; however, their digestive systems are still maturing, making specialized dairy products for this age group a vital choice.
• 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 milk s
Customers with health conditions: malnutrition, osteoporosis, diabetes, etc.
Customers are interested in clean products suitable for diet and health protection, etc.
Define target market
Based on the above segments as well as considering the product characteristics, it can be seen that the target market for TH True Milk dairy products is the segment:
• People living in urban areas
Urban consumers have numerous media channels and quick access to TH True Milk, leading to increased awareness of product quality and healthcare needs Given their average income, it is reasonable for them to invest more in "clean" dairy products, even at slightly higher prices, as they prioritize the health of themselves and their families.
TH True Milk is focused on a key customer segment: children in their growth years During this critical stage, the need for essential nutrients, vitamins, DHA, and calcium is paramount, leading to an unprecedented demand for milk.
To effectively engage a diverse customer base, TH has consistently enhanced and diversified its product offerings, catering to various age groups and tastes with options like strawberry and chocolate-flavored milk, along with the TOPKID formula featuring appealing animated imagery Notably, younger customers often do not consider price or financial constraints when making purchasing decisions, which influences their buying behavior.
TH must conquer the customers in the next segment
TH True Milk aims to build trust with parents, as they are the primary decision-makers regarding their children's nutrition For customers aged 5-14, factors such as appearance and taste are important, while parents prioritize the origin, quality, and nutritional value of products Understanding the aspirations of Vietnamese families, TH True Milk embraces the motto “Make a good glass of milk with the mother’s heart.” Since entering the Vietnamese dairy market, TH True Milk has established itself as a brand synonymous with clean, pure, and fresh milk that adheres to international standards in both raw materials and production processes The brand is committed to continuously improving product quality to expand its market reach and attract a diverse customer base.
Target market positioning
TH True Milk's competitive advantage lies in sourcing all input materials directly from TH farm, ensuring consistent quality and production processes The company's philosophy prioritizes community benefits over profit maximization, focusing on delivering value to consumers with each cup of "true natural" milk As a green business, TH True Milk is committed to sustainable practices and aims to positively impact future generations in Vietnam These values have been effectively communicated through various media channels, highlighting the freshness, cleanliness, and purity of their milk products.
TH Milk has distinguished itself in the dairy market by emphasizing the "clean" quality of its products, a characteristic that sets it apart from competitors like Vinamilk and Dutch Lady, who have not effectively communicated this aspect to the public By being the first to boldly declare itself as a provider of "clean milk," TH Milk has gained a competitive edge, establishing its position as a leader in the clean milk revolution within 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 is dedicated to delivering the best natural products to consumers As living standards and incomes rise, so does the demand for high-quality milk, driven by a growing awareness of its health benefits TH's mission, "For the health of the community," reflects their commitment to meet these needs In a competitive market with over 500 brands, TH aims to provide authentic and joyful experiences through their pure and fresh TH True Milk.
TH has established itself as a leading producer of fresh milk in Vietnam, focusing on delivering clean, delicious, and safe products that resonate with consumers' desires for natural options With over a decade of commitment to the philosophy of "Completely from nature," TH is dedicated to expanding its product ecosystem by pioneering healthy drinks that are all-natural and low in sugar or completely sugar-free This approach not only promotes healthier consumption habits but also enhances the overall well-being of consumers By diversifying its product portfolio, TH aims to connect with every household and customer, solidifying its presence in the dairy market.
❖ TH True Milk Pasteurized Fresh Milk
• Pasteurized Fresh Milk - Less Sugar
❖ TH True Milk UHT Fresh Milk
• UHT Fresh Milk - Less Sugar
• TH True Milk A2 UHT Fresh Milk – Pure
❖ Formula Fresh Milk TH TOPKID
• TOPKID Organic fresh milk with natural vanilla
• Besides focusing on the dairy market, TH also expands its product portfolio such as nut milk, yogurt, ice cream, butter, drinks, etc
TH, which stands for "True Happiness," represents TH True Milk's commitment to providing clean, high-quality milk sourced from green pastures and advanced technology at TH farm This brand aims to deliver genuine feelings to consumers through its pure product line, preserving the essence of every drop of milk With its meaningful message and memorable name, TH True Milk effectively highlights its unique characteristics and gradually establishes its presence in the market.
“ happy milk brand in the hearts of the public ”
TH True Milk utilizes Tetra Pak, the leading global supplier of UHT packaging from Sweden, alongside Combibloc packaging from Germany to cater to rising consumer demand Both packaging types are produced using state-of-the-art technology, ensuring high-quality standards are maintained despite some differences in design.
• Sizes: 110ml, 180ml, 450ml, 500ml, 1L
• The top of the box: product shelf life
• Box body: user manual, product information
• Appearance: main tone is blue, simple image (sky)
In order to ensure the source of packaging for the dairy factory to meet the large consumption of consumers, TH simultaneously uses these two suppliers
The products packaged in these two formats share similarities in appearance, informational content, pricing, and quality in preserving milk, ensuring that they meet the standards set by TH and are approved by regulatory agencies While the actual volume and product quality remain identical, a minor difference in appearance arises from the distinct production machines used by the two suppliers.
The Combibloc box appears shorter and wider, yet its internal volume remains the same as that of the Tetra Pak box Notably, the back seam of Tetra Pak packaging is centrally located, whereas the Combibloc carton features a seam positioned at the edge.
The suction cup placement differs between the two packaging types, Tetra Pak and Combibloc Additionally, the milk box prominently displays the manufacturer's logo, providing an effective way to differentiate between these two packaging styles.
TH True Milk is dedicated to providing Vietnamese consumers with clean, delicious, and nutritious fresh milk products, prioritizing quality assurance in its production and development As the only brand in Vietnam with a closed production process from "green grass to clean milk," TH Milk Food Joint Stock Company has established a comprehensive system that manages everything from sourcing raw materials to processing and delivering products to consumers.
TH TRUE MILK'S MILK PRODUCTION PROCESS
Cow breed: The cows are imported from New Zealand, USA, Australia, Canada to ensure the best milk
TH ensures optimal nutrition for dairy cows through complete autonomy in sourcing feed ingredients such as corn, American sorghum, and Mombasa grass Each group of cows receives a tailored formula, developed using advanced software for precise blending.
• Water source: The cows drink clean water treated with Amiad technology to ensure clean and pure water for the cows
Discover the world's most advanced farm and barn, where cutting-edge Israeli management technology enhances farm and herd management Cows are equipped with electronic chips in their legs, enabling real-time monitoring of their health status, nutrition, and milk production This innovative system allows for efficient data collection and management, ensuring optimal care for the livestock.
• Health care: Veterinary center and international standard laboratory are ready to diagnose, research, prevent and treat cows
• Milking: The fully automatic milking system is controlled under strict procedures to ensure the best hygiene and safety
Clean, fresh milk is transported through a cold pipe system to the main tank at the farm and then to a cold tank, maintaining a temperature of 2-4 degrees Celsius The TH clean fresh milk factory utilizes state-of-the-art technology, ensuring that its products comply with ISO 22000 standards for food safety and hygiene.
TH True Milk has gained consumer trust through its chain-based production approach, ensuring clean pastures, farms, and fresh milk Mr Yu Hoan Chun, general director of Wuxi Jinqiao, expressed confidence in TH's high-tech processes after visiting their farms in Nghia Dan, Nghe An He believes that TH's quality products will appeal to Chinese consumers, having personally tried the milk himself.
TH products match the quality of those from European and American countries available in the Chinese market, according to assessments This quality standard is not limited to Wuxi Jinqiao alone.
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 co untry
TH True Milk, a source of pride for the Vietnamese people, has garnered numerous domestic and international awards, reflecting its strong consumer trust Notably, it received the Bronze "Product of the Year" award for its Pasteurized Milk at the 2019 Stevie Awards.
Vietnam National Brand Award 2020, National Quality Gold Award at the national quality award ceremony and Asia-Pacific International Quality Award 2020
Over 10 years of launching, TH has achieved certain successes TH True Milk is mentioned with pride by Vietnamese people - is the milk brand with the most modern cow farm in Southeast Asia, with a turnover of more than 1 billion USD, is a clean “ milk” brand in the Vietnamese market With continuous innovation efforts and dedication to improving the quality of life of Vietnamese people, product lines are always improved in quality as an answer to the beliefs and expectations of customers products into a Vietnamese dairy brand Besides, TH is also constantly diversifying product categories to reach more customer segments in the future TH True Milk's clean fresh milk products have been warmly received by consumers and highly appreciated by experts With these good signs,
TH is gradually becoming one of the leading suppliers of fresh milk in the country
4.2 TH TRUE MILK'S PRICE STRATEGY
DISTRIBUTION STRATEGY OF TH TRUE MILK
The establishment and development of the brand of clean fresh milk TH True Milk from the end of 2010 until now has created a phenomenon in the dairy industry in Vietnam
Although coming later and facing many “big brands in the dairy industry such as ” Vinamilk, Dutch Lady However, TH still asserted its position and brand
TH believes that product consumption is crucial for business success, as maximizing sales of goods and services is essential for profitability To support this goal, TH has developed a comprehensive nationwide distribution network featuring two main distribution channels.
• Traditional channel: grocery stores, retail outlets, etc
• Modern channel: TH True mart stores, large supermarkets, etc
In addition, TH Group has effectively developed an online shopping deliver by using traditional and modern channels By April 2021, there were 291 TH True Mart locations throughout Vietnam
TH True Milk has strategically developed its distribution channels to deliver products and services to customers through various methods Each level of the distribution channel acts as a marketing intermediary, facilitating the process of making products and their ownership more accessible to the end user.
TH Group's self-distribution strategy enables the manufacturer to take control of its distribution process, eliminating reliance on intermediaries As the sole member in this distribution channel, TH sells products directly to consumers, ensuring a proactive approach in reaching its market.
The primary objective of establishing TH true mart stores is to enhance TH's brand image among consumers, serving as a large showroom that showcases the journey of products "from the meadow to the glass of milk."
Second, this is a channel to introduce products and sell directly to consumers
The third goal of this chain is to become a modern chain of distribution stores, specialize in providing the cleanest, safest, freshest and most nutritious foods
Home Delivery Service embodies the philosophy of "bringing the essence of nature to every home" by streamlining the transportation and distribution process This initiative focuses on minimizing intermediate steps to ensure that consumers receive fresh and pure products quickly and conveniently, preserving the natural quality that defines them.
Once a customer places an online order, our team will promptly confirm the order through email or a phone call We ensure efficient delivery by selecting the nearest distribution center or TH True Mart store, guaranteeing that orders reach customers within 48 hours.
In Vietnam, home delivery of milk has primarily been offered by a limited number of small units and farms However, TH stands out as the first major enterprise dedicated to streamlining the process by delivering milk directly to consumers, thereby eliminating intermediaries.
TH True Milk utilizes a modern distribution channel to ensure that its fresh milk products reach consumers nationwide In addition to production and supply, the company partners with retailers, supermarkets, and grocery stores to sell its dairy products directly to consumers TH True Milk products are available in major supermarkets like Big C, Coopmart, and Metro, where they are sold at prices determined by TH Group The distribution arrangement includes agreed-upon terms for booth rental costs and profit-sharing percentages between the parties involved.
TH True Milk utilizes the Key Account channel for customer distribution, a strategy also employed by its main competitor, Vinamilk This approach intensifies the competition between the two leading dairy companies.
As a traditional distribution channel but operating very effectively, most businesses apply
TH Group in addition to distributing TH True mart stores to become the company's main and most important distribution channel, but TH True Milk Consumer Retailers
TH True Milk Wholesaler Retailer Consumer
(supermarkets, retail stores, and groceries) TH True milk has always focused on traditional channels because it is still very effective in the current business context
Products will be distributed to retailers (grocery stores, markets, etc) through agents or wholesale intermediaries (Thinh Phat Joint Stock Company, Quang Vinh Phat, etc) and sold directly to consumers
4.3.2 Choosing members of the distribution system
TH True Milk aims to distinguish itself in the Vietnamese market by enhancing its product image and implementing a robust sales and distribution strategy The company has established partnerships with major supermarkets like BigC and Metro, as well as local retail and grocery stores A significant innovation in their distribution system is the direct delivery of products to consumers through TH True Mart showrooms, eliminating intermediaries This new coordination policy has contributed to the initial success of the business.
To become a channel member, it is necessary to meet three requirements of the company:
For effective product distribution, retail points must be sufficiently large, as exemplified by TH True Mart showrooms, which require spacious and airy environments Additionally, a convenient location is crucial for attracting customers and ensuring proper milk preservation.
• Product line: agents and retailers can sell many different products but must display
TH True Milk's products in a conspicuous and attractive place, TH true marts can absolutely only sell TH True Milk products belonging to the company TH milk company
• Attitude: Standing on the basis of 5 solid core values: “For community health”,
Our products are entirely natural, offering fresh, delicious, and nutritious options that are environmentally friendly We prioritize innovative thinking and the harmonious alignment of interests, ensuring that all activities focus on consumer satisfaction By delivering high-quality products and exceptional service, we foster trust and loyalty among our customers, ultimately maximizing their benefits.
4.3.3 Managing and motivating members of distribution system
TH True Milk has developed comprehensive training strategies for distributors and agents, ensuring that employees are well-informed about product features and service standards to meet business objectives Sales staff are assigned specific areas and are tasked with setting and monitoring goals to drive market development and achieve annual targets A key focus is on enhancing sales skills through training programs for employees at retail points, fostering a team of experienced professionals aimed at increasing sales and profits Additionally, distributors, agents, and retailers receive complete information and management support regarding product pricing as promised.
Creating a long-term cooperative relationship, on the basis of win -win, commit to cooperation and share goals for the benefit and respect for the interests of both parties
Committed to regularly sharing information, maximum protection, and timely support for agents against competition and market fluctuations
To enhance profitability and foster a positive atmosphere, the company actively motivates channel members through attractive discounts and welfare initiatives By continuously improving its capabilities, the organization cultivates a friendly and professional work environment, empowering employees to recognize their vital role within a cohesive and robust corporation.
TH boasts a nationwide distribution network comparable to industry giants like Vinamilk and Moc Chau, utilizing a comprehensive system of supermarkets, agents, and retail outlets to enhance product visibility and consumer familiarity Complementing this is the TH True Mart showroom system, which facilitates direct engagement between customers and TH's products This strategic approach has enabled TH True Milk to quickly gain consumer trust and preference in the market Despite entering the dairy sector later than competitors, TH's unique distribution strategy has effectively established a strong brand image and customer loyalty.
4.3.5 TH True Milk's supply chain
• Supplier: TH builds a closed system of livestock farms to serve for own milk processing factory
TH TRUE MILK'S PROMOTION STRATEGY
TH True Milk effectively engages its consumers through innovative logos, memorable slogans, and distinctive advertisements, establishing a strong brand identity Since its market launch, TH True Milk has successfully positioned itself as a “clean milk” brand with the “TH True Milk - Truly natural” model, complemented by the iconic “TH True Milk Song” composed by Thai Huong By implementing the Preemptive Claim strategy, TH True Milk has solidified its reputation, making the assertion of being a “clean milk” brand so commonplace that it has become an expected standard in the dairy industry.
The recent strategy by TH has sparked significant public interest and enhanced brand recognition without any financial expenditure By successfully implementing the concept of "perceived quality," TH has solidified its position as a leader in the fresh milk segment Consequently, when consumers think of "clean milk," TH True Milk fresh milk is the brand that immediately comes to mind (Camnest, 2019).
Obviously, TH's communication activities in general and advertising in particular try to convey the message “The essence of nature is preserved in every drop of clean fresh milk”
TH True Milk effectively captivates consumers with a clear, modern, and clean messaging strategy As highlighted by Camnest (2019), the brand employs various advertising techniques to enhance its visibility and impact in the market.
TH is promoting its modern clean milk production process through broadcast TV commercials on national channels such as VTV1, VTV3, VTV6, HTV7, and SCTV2 While VTV channels resonate with Northern audiences, HTV7 connects with viewers in the South This strategy indicates TH's commitment to reaching a broader market, extending beyond just high-income customers to include middle-income segments as well.
Helping to open the way to solve TH's market share problem in the market when facing constant pressure from big players in the same industry
• Newspaper pages: Women, Youth, Entrepreneurs Saigon, New Hanoi, etc TH targets women and entrepreneurs, these will be newspapers that can attract them by the appropriate and scientific
• In addition, TH also uses outdoor billboards, banners, buses, etc to create familiarity and preserve brand image to its consumers
TH demonstrates its commitment to consumers by being the first dairy brand to launch a network of TH Truemart Showrooms Currently, there are 297 TH Truemart stores across the country, providing a platform for product distribution and an engaging experience for customers.
TH is dedicated to delivering high-quality, natural products while also leading the way in developing a comprehensive and advanced customer care system This system features modern, professional multi-channel interactions, including email, hotline, and social media, ensuring exceptional support for customers.
• Chain of stores TH truemart
Customers can directly reach out to exchange, express concerns, or ask questions, and TH's dedicated staff is committed to providing prompt and satisfactory responses The customer support center prioritizes addressing all inquiries and issues efficiently, adhering to the ISO 9001:2015 standards set by Bureau Veritas This commitment to quality enables TH to gather valuable customer feedback and foster long-term relationships with its target audience.
TH's success in direct marketing is increasingly evident through consecutive awards:
In 2018, the company received a Bronze award for "Excellent Customer Service of the Year," followed by a Silver trophy for "Excellent Customer Care Department of the Year" at the International Business Awards 2019 (IBA Stevie Awards).
The dairy industry is one of the fiercest races in sales promotion because it stimulates the sales force and stimulates demand in customers by reducing product prices very effectively
Sales promotions in today's businesses often fall short of their intended effectiveness due to a chaotic and unsynchronized approach, resulting in wasted budgets and highlighting their weaknesses Despite these drawbacks, it is evident that brands continue to engage in the promotional cycle.
TH True Milk actively participates in competitive marketing by implementing various promotional strategies, including in-store trials, gift hunts, and combo offers that allow customers to purchase additional products of the same type.
• Recently, TH has continuously maintained a promotion of buy 8 get 1 free
From April 1, 2021, to May 31, 2021, customers who purchase any combination of eight products, including 100g Eating Yogurt, Live Yeast Yogurt 100g, 60g TOPKID Eating Yogurt, 100ml Live Yeast Drinking Yogurt, 90ml TOPKID Cheese Drink Yogurt, or 180ml Pasteurized Drinking Yogurt, will receive one additional product of the same type for free.
12 get 1 free when buying any 12 boxes of TH True Milk 180ml Sterilized Fresh Milk, get 01 product of the same type immediately
TH is launching a free trial program for its new TOPKID formula milk for children in four major cities: Ho Chi Minh, Hanoi, Da Nang, and Can Tho Additionally, the initiative includes a gift program that encourages children to collect TOPKID Cards as part of the "Happy Learning Children" campaign.
TH TOPKID 3D wooden picture gift sets, 3D jigsaw sets, etc
TH True Milk is promoting a sustainable initiative by exchanging TH True Milk Organic boxes for canvas bags, reflecting its commitment to a clean brand positioning This program aims to support the environment and society by encouraging a green lifestyle among Vietnamese consumers, reducing plastic bag usage, and ensuring that each box is recycled into useful products for the planet.
TH has recognized the significance of personal selling in its business strategy, leading the dairy industry by launching a nationwide chain of TH True Mart Showroom stores Additionally, the company has established its own home delivery team to guarantee quality service for consumers.
At TH, every employee undergoes comprehensive training aligned with modern standards, enabling them to effectively gather and analyze customer information during sales activities Utilizing TH's extensive commercial database, staff identify potential customers and engage with them at direct selling points to understand their needs better This approach allows TH to develop products that meet consumer demands and successfully persuade customers to make purchases The sales team, particularly at TH Truemart showrooms, plays a crucial role in driving sales, maximizing revenue, and nurturing relationships with prospects With a dynamic and enthusiastic workforce and a diverse product range, TH proudly stands as a leader in the dairy industry, consistently fulfilling customer needs and market demand.
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The dairy industry is facing intensified competition, particularly with the influx of foreign brands, making it challenging for local companies like TH to maintain a competitive edge To address this issue, businesses are focusing on conducting thorough research and diversifying their product offerings to better meet the evolving needs and preferences of consumers.
TH True Milk focuses on product diversification by expanding its product categories, which serves as an effective economic strategy that minimizes the need for significant investments in new technology This approach leverages existing technology while emphasizing the importance of enhancing product quality To succeed, TH Group should prioritize key areas that ensure both diversification and quality improvement.
• Research and add dairy products and dairy products with new flavors so that customers have more choices
Designing packaging and straws in unique shapes and vibrant colors is essential for children's milk products Regularly updating the designs and featuring appealing images that resonate with children's preferences can significantly enhance consumer attraction This strategy not only captivates young audiences but also boosts overall sales.
• Diversify product designs, reduce weight so that the price is suitable for consumers’ income and increase the scale of consumption
With the strength of its product quality, TH needs to maintain and strictly follow the product quality inspection according to standards, absolutely comply with food hygiene and safety
Maintain and repair machinery and equipment on time, with adequate replacement materials for stability and operational productivity
Overcoming weaknesses in production processes when there is a new change in raw materials, technology and products Completing operation, handling in the processes of
To ensure quality and safety, it is essential to establish a standard for checking and handling mold products, particularly when they are contaminated with foreign objects Regular monitoring and evaluation of the ISO system are necessary to identify and rectify any deficiencies Implementing preventive measures will further enhance the integrity of the handling process.
To enhance brand visibility and attract consumers, TH should intensify its sales promotion efforts by leveraging effective tools such as public relations and advertising It is essential to utilize various media channels for advertising, ensuring that the content is simple and memorable This approach will not only create awareness but also reinforce the product image in customers' minds, ultimately expanding brand coverage and engaging a wider audience.
To enhance channel distribution diversity, TH should prioritize strengthening control over its channels, fostering strategic cooperation and mutual development with agencies Additionally, implementing more effective solutions to engage customers will facilitate the collection of their information and needs This approach will enable TH to develop optimal construction and development policies for its distribution network.
• The TH true mart chain of stores is a bright spot that need to be exploited by TH Group
• Customers can have complete confidence when buying products directly from this channel
• 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 can be an effective business strategy, but it presents challenges in management and control There is a risk of agents and retailers selling fake or expired milk, which may be relabeled with new dates for continued sale To mitigate these risks, TH must establish contracts only with trusted distributors and implement strict controls over the sourcing of goods upon delivery Additionally, products should be stored according to standards to prevent damage It is also essential to take decisive action against suppliers of counterfeit and low-quality goods, as they can harm TH's reputation and brand image.
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In 2020, Bao Lan explored the reasons behind TH Group's launch of its TH true MILK HILO product line in the Tai Chinh Doanh Nghiep Magazine The article highlights the strategic motivations and market positioning that led to the introduction of this innovative dairy product, emphasizing the company's commitment to quality and health For further details, you can access the full article [here](https://taichinhdoanhnghiep.net.vn/vi- sao -tap-doan- th -ra- mat -dong-san-pham- th true - - milk-hilo-d17554.html).
Chu the dong thuong hieu Bac A Bank – TH truemart nhan nhieu tien ich (2021, April 23)
TH true MILK Retrieved from https://www.thmilk.vn/chu- the -dong-thuong-hieu-bac-a-bank- -truemart-nhan-nhieu- th tien ich/ -
Danh sach Ho so san pham TH true MILK Retrieved from https://www.thmilk.vn/cong-bo-san-pham/
Diem Huyen (2020) highlights that TH True MILK offers quality comparable to European and American milk products, emphasizing its commitment to high standards in dairy production The article, published in Khoa hoc va doi song Newspaper, underscores the brand's dedication to delivering premium milk that meets international quality benchmarks For more details, visit the original article at Khoa hoc va doi song.
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Khanh Khiem (2021) Chien luoc Marketing cua TH True Milk vuot mat ke thong tri
Retrieved from https://tackexinh.com/chien- luoc -marketing-cua- th true - -milk/
In 2020, Le Son reported on the visit of the Deputy Prime Minister to the Kim Lien historical site and his engagement with the TH Group, highlighting the government's commitment to cultural heritage and development initiatives The article emphasizes the importance of preserving historical sites while promoting collaboration with private sectors for sustainable growth For more details, visit Chinh Phu News.
Minh Anh (2021) Ai dang dung dau thi phan nganh sua Nhip cau dau tu Newspaper
Retrieved from https://m.nhipcaudautu.vn/kinh-doanh/ai-dang-dung-dau-thi-phan-nganh- sua -3339241/
M.Chung (2021) Nganh sua nam 2021 se tang truong theo kich ban nao VnEconomy Magazine Retrieved from https://vneconomy.vn/nganh- sua -nam-2021- se-tang -truong- theo -kich-ban-nao.htm
Ngoc Han (2017) TH true MILK khang dinh vi the sua sach chat luong vang Viet Nam
Giao duc Newspaper Retrieved from https://giaoduc.net.vn/suc-khoe-hoc-duong/th- true milk - -khang-dinh- vi-the-sua -sach- chat - luong-vang-viet-nam-post182601.gd
Phan Thao (2019) Thi truong sua Viet Nam canh tranh ngay cang lon Nguoi chan nuoi
Newspaper Retrieved from http://nguoichannuoi.vn/thi-truong- sua -viet-nam- canh -tranh-ngay-cang- lon-nd5196.html
Phong Le (2016) TH true MILK- chia se niem hanh phuc lam ly sua tot nhat Vietnamnet
News Retrieved from https://m.infonet.vietnamnet.vn/khoe-dep/suc-khoe/th- true milk - -chia- -niem-hanh-phuc- se lam ly - -sua-tot-nhat-170692.html
Phong Nguyen (2021) Tich cuc tin hieu ve muc tang truong tin hieu tren 6,5% GDP nam
2021 Lao dong Newspaper Retrieved from https://laodong.vn/kinh- te/tin -hieu- tich-cuc -ve-kha-nang-dat- muc -tang- truong -tren-65- gdp-nam-2021-920079.ldo
The TH Group was awarded the "Outstanding Customer Care of the Year" at the International Business Awards 2018 This recognition highlights the company's commitment to exceptional customer service The award underscores TH Group's dedication to enhancing customer satisfaction and its innovative approaches in the industry.
TH True Milk has embarked on a transformative journey over the past decade, reshaping the dairy landscape in Vietnam Founded with a commitment to quality and sustainability, the company has pioneered the concept of a "milk map," ensuring access to fresh, nutritious dairy products across the nation Through innovative practices and a focus on organic farming, TH True Milk has established itself as a leader in the Vietnamese dairy industry, promoting health and wellness among consumers Their dedication to excellence has not only enhanced the local economy but also set new standards for dairy production in Vietnam.
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