marketing principles vinamilk group assignment

Otherwise, the ûgure for market share of milk in Vietnam has revealed apositive increase in the milk consumption, the milk consumption is expected to go up to 28liters per person in 2020

MARKETING PRINCIPLES GROUP ASSIGNMENT

Class: MKT1613

Lecturer: Tran Dieu Thuy

Group 6 : Quach Hang Nga - HS163381

Tham Tram Anh - HS160912

Nguyen Thi Thuy Hang - HS160772

Dang Huu Dang - HS160836

Nguyen Duy Nam - HE151395

TABLE CONTENT:

I, Introduction: (Quách Hằng Nga)

- Short prỏle of Vinamilk & product

- The product9s STP (Segmenting – Targeting – Positioning) of Vinamilk

II, Business environment analysis

1 Macro environment ( Đặng Hữu Đăng )

2 Micro environment: ( Nguyễn Thị Thúy Hằng )

- Market overview

- Customer analysis

- Competitor analysis (2 direct competitors)

- Other factors (supplier, intermediaries, publics…)

III, The company9s current Marketing Mix - 4Ps: (Thẩm Trâm Anh)

IV, Conclusion & Recommendations ( Nguyễn Duy Nam )

I INTRODUCTION

1 About Vinamilk Company

Vietnam Dairy Products JSC (Vinamilk) is a Vietnam based company engaged in the food processing industry, speciûcally, the dairy industry It is involved in the manufacturing, marketing, wholesale trading and retail distribution of dairy products, such as milk of various forms and üavors, including üuid milk, powdered milk and sweetened condensed milk, along with yogurt, frozen yogurt, ice cream, cheese and infant nutrition üour Other products include soya milk, rice milk, bottled coee, sugar, bottled juice and other non-alcoholic beverages The Company also provides packaging and logistics services, besides technical support to farming and breeding Processes [1]

Vinamilk was established on August 20, 1976 on the basis of three dairy factories from the old regime: Thong Nhat Dairy Factory (formerly known as Foremost factory) Truong Tho Dairy Factory (formerly known as Cosuvina factory) Dielac Powdered Milk Factory (formerly known as Nestlé factory (Swiss) [2]

VISION

<To become a world grade brand in the food and beverage industry, where people put all their trust in nutrients and health products.=

MISSION

<To deliver the valuable nutrition to the community with our respect, love and responsibility.=

2.The Product9s STP (Segmenting- Targeting- Positioning)

2.1 Segmentation [3]

Segmentation Demographic Psychographic Behavioural Geographic Children Age: 5-14

Gender: Male, female

and others

Lifestyle:

Outdoor- oriented, prefer hanging out with friends

Personalities Active, curious, creativity

Occasion: Daily Userstatus:

potential/daily users Usage rate: daily Benefit sought: provide nutritions that is good for their growth

All over Vietnam

Young adult Age: 15-25

Gender: male,female

and others

Income: no income or

low income

Education:

college/university

students

Lifestyle: doing a lot of activities to satisfy their wants

Personalities:

energetic,enthusiastic, interested in novelty

Occasion : daily User status: ûrst-time users, regular users, potential users Usage rate: regular, daily

Loyalty: medium Benefit sought:good for body growth, reûll energy

All over Vietnam

Adult Age: 26-44

Gender: Male, female

and others

Marital status:

Married, not married

Family size: single

person or 3-4 people

Income: Middle-High

income

Occupation: Varies

Social class: Middle and upper class

Personality traits: busy life because having a lot

of tasks to do, desire to strike a work-life balance usually stressful and busy, energetic, sport-oriented

Lifestyle: Busy, creative, üexible,

outdoor-oriented

Occasion: Daily

User status: Regular

User rate: Heavy user

Loyalty: Medium

Benefit sought: Good for health, delicious taste, convenient

All over Vietnam Density: Average

to High

2.2.Targeting

The main segmentation that Vinamilk targets is children from 5 to 14 Vinamilk desires to

improve physical health of children and aims to nurture young talents as children are

considered the pillar of a nation9s tomorrow (Vinamilk 2016) The ûrst reason why Vinamilk chose this segmentation is because children roughly account for 23.2% of the population

(Statista 2020) Secondly, the amount of middle-class population is increasing and they

are starting to focus more on the value of the products rather than the price This will lead

to the result that Vinamilk could have more customers (Euromonitor 2020) [4]

2.3 Positioning

8Vươn cao Việt Nam9 In order to boost Vietnamese children's health development In the direction of a high value in terms of health of the country's future preschoolers

II BUSINESS ENVIRONMENT ANALYSIS

1 Macro environment of vinamilk

1.1 Demographic:

In March 3, 2020, researchers showed that there have been roughly 8.1 million births in Vietnam and it is continuously rising This leads to the amount of children accounting for about 23.2% of all the population (Research Department 2020), which currently occupies 13% of the population and it is predicted to reach 26% by 2026 (world bank 2020)

Vinamilk boasts a large market share with this segment Indeed, the current shop opportunities lie signiûcantly in the middle class This group of customers implies signiûcant growth potential for the company Because the young population is more educated, more receptive towards Western cultures, they are more inclined to consume dairy products Smaller household pattern means that parents pay more attention to their children As children are the targeted segment of Vinamilk, this scenario implies more demand from the market of the company Traditional milk consumers are typically urban citizens, who have more spending power and more concerns about healthy products The increasing rate of urbanization indicates increasing dairy demands

1.2 Economic:

-The GDP in Vietnam reached around 261.92 billion USD in 2019 (trading economic 2019) Moreover, the GDP number increased roughly to 7% in 2019 and from 2002 to 2019, GDP per person in Vietnam rose 2.7 times, worth 2.700 USD in 2019( world bank 2020) Due to the Covid-19 pandemic, the Organization for Economic Cooperation and Development (OECD) predicted that the world economy would decrease to 4.5% in 2020 However, the economy of Vietnam shows the opposite trend In the ûrst 9 months of 2020, GDP continuously increased to 2.12% (GSO 2020) Furthermore, there is a trend that more and more Vietnamese people are paying attention to healthy and high-value products

because of the dynamic economy and the rise in proportion of middle-income families (euromonitor 2020)

Overall, the success in controlling the pandemic, the increase in GDP and the demands for high-value products would develop the prỏt of Vinamilk

1.3 Natural:

Eect of temperature on dairy cows: temperature aects behavior, ability to collect and digest feed, growth, reproduction and production of dairy cows Temperature and humidity aect feed availability and changing weather conditions are causative agents of dairy cow disease Temperature aects the fermentation of yogurt Environmental conditions also aect the storage of raw milk and dairy products

However, there are places with temperate climates such as Sapa, Lao Cai, Da Lat suitable for growing high quality grass Although the climate is hot and humid, in general, the natural conditions are quite suitable for the development of the dairy industry, especially in the provinces of Tuyen Quang, Lam Dong, Ba Vi, Son La…

Thus, the company will easily obtain raw materials for production needs such as fresh yogurt, sugar, etc at a much lower cost than the production that has to import input materials from foreign Moreover, the ingredients are very diverse and always in a fresh condition without losing their original nutrients when they have to be preserved when ordering from other places [5]

1.4 Technological:

Technology is one of the inputs to the production process, so it is an important factor in determining whether the production of an enterprise is eective or not Therefore, it also aects Vinamilk's marketing activities

Currently, the production technology equipment used by Vinamilk are of international standards, using modern packaging technology, and importing technology from famous equipment suppliers such as: trota Pak (Sweden), APV(Denmark) The lines are synchronous, new generation, modern, automatic control, or semi-automatic to meet the requirements of food safety and quality Using Advanced technology for herd rearing such as: Ethernet network, Bluetooth wireless connection technology, Wi-Fi and remote radio wave identiûcation technology with automatic identiûcation chip RFID tags, the system Biosensors, surveillance cameras help increase the production of dairy cows

In addition, Wamas Warehouse Management System integrated ERP management system and Tetra Plant Master Automation solution provides integrated operation of the plant from production planning, material input to the ûnished product output [6]

1.5 Socio-Cultural:

The biggest concern is the milk drinking habit of the Vietnamese A majority of Vietnam9s population do not have the habit of consuming milk

According to the report of Sacombank, an average Vietnamese person drinks 15 liters of milk per year while Chinese and Thai consume 25 liters and 23 liters respectively A reason behind this may come from a perception amongst Vietnamese adults that liquid milk is only for children There is also a gender distinction and age segment , this indicates that milk is not their favorite drink

Unfortunately, the "Western brand oriented" trend among Vietnamese consumers, which derived from an undeveloped economy, has also considerably aected domestic dairy companies like Vinamilk Meanwhile, the consumers also choose trusted and well-known local brands Otherwise, the ûgure for market share of milk in Vietnam has revealed a positive increase in the milk consumption, the milk consumption is expected to go up to 28 liters per person in 2020

In 2021, during the COVID-19, the demand for drinking milk still remains fairly stable and Vinamilk still takes the lead of drinking milk products in 2020 with 40% value share Those indicate that the habit of drinking milk amongst Vietnamese adults has been driven to a much more positive side and they are likely to get used to consuming milk

1.6 Political & Legal:

The milk consumption policy is stable and the regulation system is gradually improving.The Ministry of Finance proposes to the Government to reduce import tax on dairy products from 2-5% in order to contribute to reducing milk prices, creating conditions for all subjects to improve their health, improve Vietnamese stature, diversify sources of raw materials, improve competitiveness

But there are also some disadvantages like State agencies also lose control of market prices The enforcement process against unfair competition is not really eective and Milk inspection is still lax, only stopping at food safety inspection, but not controlling the content of substances that cause diculties for dairy businesses [7]

2 Microenvironment:

2.1 Overview :

Milk market has rapid economic growth, a wide market, and an open and appealing investment climate The volume of the liquid milk market will reach VND 64.4 trillion in revenue, equivalent to a growth rate of 10% in 2020 Retail output will reach 1.6 million tons,

up 9% over the same period last year ( Babuki) [8]

According to the Vietnam Dairy Association, the dairy business in Vietnam would grow by

9 to 10% every year in the future years, reaching 28 liters of milk per person per year by

2020 Domestic fresh milk output is predicted to reach 1 billion liters, satisfying 38 percent

of demand by 2020, and 1.4 billion liters, meeting 40 percent of demand by 2025,

according to the Processing Industry Development Plan

Dairy industry experts believe that the dairy business will continue to be a potential in the future because per capita milk consumption in Vietnam is still low According to Mr Tran Quang Trung, Chairman of the Vietnam Dairy Association, Vietnam's dairy business has experienced consistent expansion over the years The total value of these two segments alone accounts for nearly three-quarters of the market value with the output of fresh milk currently reaching 1,500 thousand liters, and powdered milk reaching 138,000 tons [9]

2.2 Competitors : [10]

Criteria Dutch Lady Milk TH True Milk Vinasoy

Brand &

Products

- Dutch Lady has been

oering Asian families with

high-quality and nutritious

products since 1963

- Dutch Lady is a brand of

FrieslandCampina

- Dutch Lady9s slogan:

Nutrition from day to night

#StrongerMeStrongerUs

- logo: image of a girl

carrying fresh milk, the

- TH True Milk was founded in 2010

- TH true Milk-A Leading Brand in Vietnam9s Fresh Milk Market of TH Group

- Slogan: Really natural

- Logo : 2 letters <TH=

( standing for True Happiness and

- Vinasoy Brand Soya Milk The Vietnam Soya Milk Products Company -VinaSoy is the ûrst and only enterprise in Vietnam

- Slogan: Soya beans, just for you

- Logo: The green leaf represents the power of a natural product; The

main color is blue

- Products: variety of

products : fresh milk,

pasteurized milk, yogurt,

sweetened condensed

milk, full cream milk, juicy

milk ( yomost and fristi),

and ovaltine

chairman is Thai Huong)

- Products: Many options: fresh milk, pasteurized milk, nut milk, yogurt,

stylized letter Y in VinaSoy

-Products: Focus on Soybeans: Fami and Vinasoy

Competitive

advantages

- Milk brand from the

Netherlands

- The only dairy group in

the country to be awarded

the Royal title from Queen

Beatrix

- Milk source from Dutch

cows (The world's most

valuable dairy cow breed)

- The pioneer and only brand currently

in our country that applies the most modern pasteurization technology ESL achieves international standard certiûcation into the production process

- There are many stores that sell directly

- Soy milk, distinctive taste, dierent from traditional milk

- Tetra Alwin Soy technology keeps up to 80% of the protein and isoüavones in soy

- Good for women

- Soybean source with the most diverse precious gene bank in Southeast Asia

Marketing

activities (4Ps)

- Price: Good price

- Product: Fresh milk

- Place: Mainly sold at stalls

in supermarkets and

traditional retailers,

business agents

- Promotion: the message

"solid foundation, fear of

challenges", advertising

media emphasizes

screening on prime time

slots, sale promotion (

gifts, ) and public relation (

donation for charity

events, the London 2012

- Price: Reasonable

- Product: Fresh milk

- Place: Sold at supermarkets and traditional sales agents, stores that connect directly with customers

- Promotion:

communication message "Please cherish Mother Nature, who gave us everything", advertising on VTV, HTV, SCTV, ; public relations ( <School

- Price: Cheap

- Product: soy milk

- Place: Mainly sold at stalls in supermarkets, convenience store, grocery store and traditional market

- Promotion:

Advertisement; public relation; sale promotion

Olympic Games

Dutch Lady has sponsored

athletes)

milk=,=Join hands for Vietnamese stature=) and selling promotion

Strengths &

weaknesses

- Strengths: Brand with

high recognition, diverse

product lines, guaranteed

nutrition in milk Powdered

milk market share 20% of

the market

- Weaknesses: Fresh milk

supply is limited (taken

from Dutch cows,

packaging design does not

make a dierence, and

popular taste

- Strengths: Large investment, leading equipment in Vietnam, rich experience, cow farm has a convenient location, so it provides enough milk, many stores sell directly -Weaknesses: The foreign market has no place

- Strengths: The ûrst enterprise in Vietnam producing soy milk, technology imported from Sweden, high quality product stability, unique taste

- Weaknesses: Have not invested much in customer services (sales website), monotonous products, limited ûnancial

in marketing activities

2.3 Customers:

Consumer market

The customer market focuses on children ( 5-14 years old) At this age they are in a period where they need a lot of nutrients to grow in height and weight, promote strong brains, teeth and bones, and provide energy This is the age of rapid physical growth and changes in the nervous system - endocrine They are also very active, curious, creative and depend a lot on their family This age still depends a lot on parents and almost all decisions are made by parents